<PAGE>
As filed with the Commission on August 28, 2000
1933 Act File No. 333-36866
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No.2
MORGAN GRENFELL INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
One South Street, Baltimore, Maryland 21202
(Address of Principal Executive Offices)
(410) 895-3433
(Registrant's Telephone Number)
Daniel O. Hirsch, Esq. Copies to: Christopher P. Harvey, Esq.
One South Street Hale & Dorr LLP
Baltimore, Maryland 21202 60 State Street
(Name and Address of Agent Boston, MA 02109
for Service)
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b)
[X] On August 28, 2000 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] On (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] On (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[X] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
June 23, 2000
BT Investment Funds
Intermediate Tax Free - Investment Class
Dear Shareholder,
I am writing to let you know that a meeting will be held July 27, 2000, for
shareholders to vote on an important proposal for Intermediate Tax Free ("Tax
Free Fund"). As a shareholder in Tax Free Fund, you have the opportunity to
voice your opinion on this matter. This package contains information about the
proposal, along with a proxy card for you to vote by mail.
The Proposal
We are asking shareholders of Tax Free Fund to approve an Agreement and
Plan of Reorganization between Tax Free Fund and Municipal Bond ("Municipal
Fund") to allow Tax Free Fund to transfer all of its assets and liabilities to
Municipal Fund in exchange for Institutional Class shares of Municipal Fund.
What this means for your investment
. You will receive Institutional Class shares of Municipal Fund in proportion
to the value of your shares in Tax Free Fund.
. The transaction will be tax-free for shareholders and for both funds.
. Both funds invest primarily in municipal securities that are exempt from
federal income tax.
. Your investment in Municipal Fund will have lower annual fees and expenses.
. The larger Municipal Fund may offer greater diversification and economies
of scale.
How to vote
Cast your vote by completing and signing the enclosed proxy card. Please
mail your completed and signed proxy as quickly as possible, using the postage-
paid envelope provided. You may also vote by calling the toll-free telephone
number 1-800-690-6903 or by logging on to the Internet at www.proxyvote.com.
Tax Free Fund's Board of Trustees, whose primary role is to protect your
interests as a shareholder, has reviewed the proposal. In the Trustees'
opinion, the proposal is fair and reasonable. THE TRUSTEES RECOMMEND THAT YOU
VOTE FOR THE PROPOSAL.
PLEASE VOTE. YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES
YOU OWN.
Any questions?
Please call 1-800-730-1313 if you have any questions about the proposal or
voting procedures.
Sincerely,
/s/ Daniel O. Hirsch
------------------------
Daniel O. Hirsch
Secretary
<PAGE>
INTERMEDIATE TAX FREE
(a series of BT Investment Funds)
One South Street
Baltimore, MD 21202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SCHEDULED FOR JULY 27, 2000
This is the formal agenda for a Special Meeting and any adjournments thereof
(the "Meeting") of shareholders of your mutual fund. It tells you what matters
will be voted on and, in case you want to attend this Meeting in person, the
time and place of the Meeting.
To the shareholders of Intermediate Tax Free ("Tax Free Fund"):
A Meeting of Tax Free Fund shareholders will be held at One South Street,
Baltimore, MD 21202 on July 27, 2000 at 10:00 a.m., Eastern Time, to consider
the following:
1. A proposal to approve an Agreement and Plan of Reorganization between Tax
Free Fund and Municipal Bond ("Municipal Fund"). Under this Agreement, Tax
Free Fund would transfer all of its assets to Municipal Fund in exchange
for Institutional shares of Municipal Fund. These shares would be
distributed proportionately to you and the other shareholders of Tax Free
Fund. Municipal Fund would also assume Tax Free Fund's stated liabilities.
Your Board of Trustees recommends that you vote FOR this proposal.
2. Any other business that may properly come before the Meeting.
Shareholders of record as of the close of business on June 2, 2000, are entitled
to vote at the Meeting and any adjournments thereof.
Whether or not you expect to attend the Meeting, please complete, sign and
return the enclosed proxy card. You may also vote your shares by calling the
toll-free number on your proxy card or by logging on to the Internet at
www.proxyvote.com. If shareholders do not return their proxies in sufficient
numbers, Tax Free Fund will incur additional costs to solicit proxies.
By Order of the Board of Trustees,
/s/ Daniel O. Hirsch
------------------------
Daniel O. Hirsch
Secretary
June 23, 2000
<PAGE>
PROXY STATEMENT OF
INTERMEDIATE TAX FREE
(a series of BT Investment Funds)
PROSPECTUS FOR
MUNICIPAL BOND -- INSTITUTIONAL CLASS
(a series of Morgan Grenfell Investment Trust)
This proxy statement and prospectus sets forth concisely the information you
should know before voting on the proposed reorganization of Intermediate Tax
Free, One South Street, Baltimore, MD 21202, 1-800-730-1313 ("Tax Free Fund")
into Municipal Bond, One South Street, Baltimore, MD 21202 ("Municipal Fund").
Please read it carefully and retain it for future reference.
Both Municipal Fund and Tax Free Fund (each a "Fund" and together the "Funds")
are open-end mutual funds investing in municipal securities that are exempt from
federal income tax. Municipal Fund's investment objective is a high level of
income exempt from regular federal income tax, consistent with the preservation
of capital and Tax Free Fund's investment objective is a high level of current
income exempt from federal income tax consistent with moderate risk of capital.
How the Reorganization Will Work
[_] Tax Free Fund will transfer all of its assets to Municipal Fund. Municipal
Fund will assume Tax Free Fund's stated liabilities.
[_] Municipal Fund will issue Institutional Class shares to Tax Free Fund in an
aggregate amount equal to the value of the assets it receives, less the
liabilities it assumes, in the reorganization. These Institutional shares
will be distributed to Tax Free Fund's shareholders in proportion to their
holdings in Tax Free Fund on the reorganization date.
[_] As described below, the reorganization will be tax-free for federal income
tax purposes.
[_] Tax Free Fund will be liquidated and terminated, and you will be a
shareholder of Municipal Fund.
An investment in Municipal Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Like shares of all mutual funds, these securities have not been approved or
disapproved by the Securities and Exchange Commission nor has the Securities and
Exchange Commission passed upon the accuracy or adequacy of this prospectus.
Any representation to the contrary is a criminal offense.
<TABLE>
<CAPTION>
======================================================================================================================
Where to Get More Information
======================================================================================================================
<S> <C>
Prospectus of Municipal Fund dated February 28, 2000. In the same envelope as this proxy statement and prospectus.
Incorporated by reference into this proxy statement and
prospectus.
-----------------------------------------------------
Municipal Fund's annual report to shareholders dated
October 31, 1999.
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Prospectus of Tax Free Fund dated January 31, 2000. On file with the Securities and Exchange Commission ("SEC")
----------------------------------------------------- and available at no charge by calling 1-800-730-1313 or
Tax Free Fund's annual report to shareholders dated writing to us at the address shown below. Incorporated by
September 31, 1999 and semi-annual report dated reference into this proxy statement and prospectus.
March 31, 2000.
-----------------------------------------------------
A statement of additional information dated June 23,
2000 contains additional information about both
Municipal Fund and Tax Free Fund, respectively.
----------------------------------------------------------------------------------------------------------------------
To ask questions about this proxy statement and Call our toll-free telephone number: 1-800-730-1313 or write
prospectus. to us at Service Center, P.O. Box 219210, Kansas City, MO
64121-9210.
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</TABLE>
The date of this proxy statement and prospectus is June 23, 2000.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION 1
SUMMARY 1
THE REORGANIZATION 6
CAPITALIZATION 9
COMPARISON OF BUSINESS TRUSTS UNDER
DELAWARE AND MASSACHUSETTS LAW 10
ADDITIONAL INFORMATION ABOUT
THE FUNDS' BUSINESSES 11
BOARDS' EVALUATIONS AND RECOMMENDATIONS 12
VOTING RIGHTS AND REQUIRED VOTE 12
INFORMATION CONCERNING THE MEETING 12
OWNERSHIP OF SHARES OF THE FUNDS 13
EXPERTS 14
AVAILABLE INFORMATION 14
</TABLE>
Additional Information
A. Agreement and Plan of Reorganization between Municipal Fund and Tax Free
Fund (attached to this proxy statement and prospectus)
B. Annual report to shareholders dated October 31, 1999 of Municipal Fund
C. Prospectus dated February 28, 2000 of Municipal Fund
<PAGE>
INTRODUCTION
This proxy statement and prospectus is being used by the Board of Trustees of
Tax Free Fund to solicit proxies to be voted at a Special Meeting (the
"Meeting") of shareholders of Tax Free Fund, or any adjournment of the Meeting
thereof. The Meeting will be held at One South Street, Baltimore, MD 21202 on
July 27, 2000, at 10:00 a.m., Eastern Time. The purpose of the Meeting is to
consider a proposal to approve an Agreement and Plan of Reorganization providing
for the reorganization of Tax Free Fund into Municipal Fund. This proxy
statement and prospectus and a proxy card are being mailed to Tax Free Fund's
shareholders on or about June 23, 2000.
Who is Eligible to Vote?
Tax Free Fund shareholders of record on June 2, 2000 are entitled to attend and
vote at the Meeting or any adjournments thereof. Each share of Tax Free Fund
outstanding on June 2, 2000 is entitled to one vote. Shares represented by
properly executed proxies, or shares voted by telephone or on the Internet,
unless revoked before or at the Meeting, will be voted according to
shareholders' instructions. If you sign a proxy card, but do not fill in a
vote, your shares will be voted to approve the Agreement. If any other business
comes before the Meeting, your shares will be voted at the discretion of the
persons named as proxies.
SUMMARY
The following is a summary. More complete information appears later in this
proxy statement and prospectus. You should read the entire proxy statement and
prospectus and the enclosed exhibits carefully because they contain details that
are not in the summary. The materials in the exhibits and the statements of
additional information, dated February 28, 2000 and January 31, 2000,
respectively, for Municipal Fund and Tax Free Fund are hereby incorporated by
reference into this proxy statement and prospectus.
Comparison of Municipal Fund and Tax Free Fund
<TABLE>
<CAPTION>
Municipal Fund Tax Free Fund
================================================================================================================
<S> <C> <C>
General A diversified series of Morgan Grenfell A diversified series of BT Investment
Investment Trust ("MG Trust"). MG Trust Funds ("BT Trust"). BT Trust is an
is an open-end management investment open-end management investment company
company organized as a Delaware business organized as a Massachusetts business
trust. trust.
-----------------------------------------------------------------------------------------------------------------
Investment Municipal Fund invests directly in Tax Free Fund is a feeder fund in a
Structure securities, as described below. master-feeder structure, which means that
it invests all of its assets in a master
portfolio, the Intermediate Tax Free
Portfolio ("Tax Free Portfolio"). Tax
Free Portfolio has the same investment
objective as Tax Free Fund. All
references to Tax Free Fund in this proxy
statement and prospectus include Tax Free
Portfolio where appropriate.
------------------------------------------------------------------------------------------------------------------
Net assets as of $480,525,559.90 $19,177,544.46
June 2, 2000
-------------------------------------------------------------------------------------------------------------------
Investment Deutsche Asset Management, Inc. ("DAMI") Bankers Trust Company ("BT") is the
Advisers is Municipal Fund's investment adviser. investment adviser of Tax Free Portfolio,
in which Tax Free Fund invests.
---------------------------------------------------------------------------------------------------------------------
Control of investment DAMI and BT are indirect wholly owned subsidiaries of Deutsche Bank AG, an
advisers international commercial and investment-banking group.
----------------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
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Municiple Fund Tax Free Fund
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Objective Municipal Fund seeks a high level of Tax Free Fund seeks a high level of
income exempt from regular federal income current income exempt from federal income
tax, consistent with the preservation of tax, consistent with moderate risk of
capital. capital.
-------------------------------------------------------------------------------------------------------------------
Portfolio managers Municipal Fund is managed by David Baldt, Gary Pollack, a Director of BT, is the
Managing Director of DAMI, and Ted portfolio manager for Tax Free Fund.
Manges, Daniel Scholl, and Susan Beck,
each a Vice President of DAMI.
-------------------------------------------------------------------------------------------------------------------
Principal Investments Each Fund invests primarily (at least 80% of its net assets) in municipal securities
that are exempt from federal income tax.
---------------------------------------------------------------------------------------------------------------------
Restrictions on Municipal Fund does not have a Tax Free Fund may invest up to 20% of its
Investments restriction on the percentage of assets assets in obligations the interest on
that may be invested in obligations the which is subject to the federal
interest on which is subject to the alternative minimum tax.
federal alternative minimum tax.
----------------------------------------------------------------------------------------------------------------------
Municipal Fund may invest 25% or more of Tax Free Fund may invest in private
its total assets in private activity and activity bonds if the interest paid on
industrial development bonds if the them is exempt from regular federal
interest paid on them is exempt from income tax.
regular federal income tax.
--------------------------------------------------------------------------------------------------------------------------
Each Fund invests primarily in high quality bonds (those rated within the top three
rating categories).
-----------------------------------------------------------------------------------------------------------------------------
Municipal Fund may invest up to 15% of
its assets in bonds that are rated in the
fourth highest category.
--------------------------------------------------------------------------------------------------------------------------------
In the event that any security is downgraded, the adviser will determine whether to
hold or sell the security.
Each Fund may invest up to 20% of its total assets in taxable securities to maintain
liquidity.
--------------------------------------------------------------------------------------------------------------------------------
Principal Strategies Municipal Fund generally uses a Tax Free Fund seeks to increase its
"bottom-up" approach to picking income primarily by managing the duration
securities. The portfolio managers focus of its portfolio. Tax Free Fund seeks a
on the securities and sectors they current yield from interest income that
believe are undervalued relative to the is greater than that generally obtainable
market, rather than relying on interest from short-term tax-exempt bonds with the
rate forecasts. highest investment ratings.
Issuer research lies at the heart of the
investment process. In selecting The portfolio manager adjusts the average
individual securities for investment, the duration of the bonds held by the Fund
portfolio managers: according to current market and credit
conditions and an assessment of interest
. Assign a relative value, based on rate forecasts.
creditworthiness, cash flow and price, to
each bond. . If the manager's analysis indicates that
. Use credit analysis to determine the yields are not likely to change, the
issuer's ability to fulfill its contracts. manager attempts to align the Fund's
. Compare each bond with a U.S. Treasury average duration to that of the
instrument to develop intermediate-duration municipal market as
a whole.
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Municiple Fund Tax Free Fund
------------------------------------------------------------------------------------------------------------------
<S> <C>
Principal Strategies a theoretical intrinsic value. They look . If the manager expects yields to rise,
(continued) to exploit any inefficiencies between the manager will shorten the Fund's
intrinsic value and market trading price. duration by buying shorter maturity bonds
. Subordinate sector weightings to and selling longer maturity bonds, a
individual bonds that may add tactic that seeks to insulate the value
above-market value. of Fund shares from falling bond prices.
. If the manager expects yields to fall,
Municipal Fund intends to maintain a the manager will lengthen the Fund's
dollar weighted effective average duration by selling shorter maturity
portfolio maturity of five to ten years. bonds and buying bonds with maturities of
up to 20 years to capture the gain in
prices.
Tax Free Fund's duration can vary
approximately 12 months in either
direction from the duration of the whole
intermediate-term market.
Tax Free Fund also attempts to increase
current income by capturing temporary
variations in the "spread" among
different kinds of municipal bonds.
----------------------------------------------------------------------------------------------------------------
Temporary defensive Each Fund may depart from its principal investment strategies in order to take a
positions temporary defensive position in response to extraordinary adverse market, economic or
political events.
----------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT RISKS
----------------------------------------------------------------------------------------------------------------
General You could lose money on your investment in either Fund. There is no guarantee that
either Fund will achieve its investment objective.
----------------------------------------------------------------------------------------------------------------
Interest rate risk The value of each Fund will fluctuate inversely with changes in interest rates.
Typically, a rise in interest rates causes a decline in the market value of fixed
income securities and vice versa.
----------------------------------------------------------------------------------------------------------------
Prepayment Risk As interest rates decline, the issuers of securities held by each Fund may prepay
principal earlier than scheduled, forcing the Fund to reinvest in lower yielding
securities.
----------------------------------------------------------------------------------------------------------------
Credit risk Each Fund faces the risk that the creditworthiness of the issuers may decline,
causing the value of the bonds to decline. In addition, issuers of securities owned
by a Fund may default on their obligations to pay principal and/or interest or may
have their credit ratings downgraded.
----------------------------------------------------------------------------------------------------------------
Fixed income securities, eligible for
purchase by Municipal Fund, rated in the
fourth highest category have speculative
characteristics. These securities
involve greater risk of loss than higher
quality securities and are more sensitive
to changes in the issuer's capacity to
pay.
----------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Municiple Fund Tax Free Fund
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Maturity Risk Prices of each Fund's fixed income securities with longer effective maturities are
more sensitive to interest rate changes than those with shorter effective maturities.
------------------------------------------------------------------------------------------------------------------
Tax Liability Risk Distributions by each Fund that are derived from income from taxable securities held
by the Funds will generally be taxable to shareholders as ordinary income.
------------------------------------------------------------------------------------------------------------------
A greater percentage of the Municipal
Fund's investments may produce taxable
income, resulting in a lower tax-adjusted
return.
----------------------------------------------------------------------------------------------------------------
Market Risk Although individual securities may outperform the market, the entire market may
decline as a result of rising interest rates, regulatory developments or
deteriorating economic conditions.
----------------------------------------------------------------------------------------------------------------
BUYING, EXCHANGING AND REDEEMING SHARES
----------------------------------------------------------------------------------------------------------------
Net asset value Each Fund calculates its net asset value per share (NAV) at the close of regular
trading on The New York Stock Exchange (NYSE) on each business day. Each Fund's
portfolio securities are valued either based on market quotations or, if market
quotations are unavailable, by the method that most accurately reflects their fair
value.
----------------------------------------------------------------------------------------------------------------
Classes of shares Municipal Fund offers two classes of Tax Free Fund has only one class of
shares: Institutional shares and shares, which is offered without a sales
Investment shares. Both Institutional charge.
and Investment shares are offered to the
public without a sales charge. Only
Institutional shares are being offered to
Tax Free Fund shareholders in this proxy
statement and prospectus.
----------------------------------------------------------------------------------------------------------------
Rule 12b-1 and service Neither Fund's shares are subject to any Rule 12b-1 or service fee.
fees
Buying and selling Investors may purchase or redeem shares either from authorized brokers or directly
shares from the Fund.
----------------------------------------------------------------------------------------------------------------
Minimum investment Initial: $250,000 Initial: $2,500
amounts* Subsequent: $ 25,000 Subsequent: $ 250
----------------------------------------------------------------------------------------------------------------
Exchanging shares Shares may be exchanged for shares of another Deutsche Asset Management mutual fund
up to four times a year (from the date of your first exchange).
----------------------------------------------------------------------------------------------------------------
</TABLE>
*Municipal Fund will waive the minimum investment amount for any Tax Free Fund
account that, after the reorganization, contains less than the minimum
investment amount required for Municipal Fund. Municipal Fund will reduce the
subsequent purchase minimum investment amount for Tax Free Fund accounts after
the reorganization.
4
<PAGE>
Fees and Expenses
This table describes the fees and expenses that you may pay if you buy and hold
Institutional Class shares of Municipal Fund or shares of Tax Free Fund. The
table also shows pro forma expenses of Institutional Class shares of Municipal
Fund following the proposed reorganization.
ANNUAL FEES AND EXPENSES AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Municipal Fund Tax Free Fund/1/ Municipal Fund
Institutional Class Investment Class Institutional Class
Fiscal Year End Fiscal Year End
Annual Fees and Expenses October 31, 1999 September 30, 1999 Pro Forma
===================================================================================================================
<S> <C> <C> <C>
Management fees 0.40% 0.40% 0.40%
Distribution (12b-1) and/or service fees None None None
Other expenses 0.18% 1.01% 0.18%
Total annual Fund operating expenses 0.58% 1.41% 0.58%
Less fee waivers or expense reimbursements /2/ (0.03)% (0.56%) (0.03%)
Net Expenses 0.55% 0.85% 0.55%
/1/Information on the annual operating expenses reflects the expenses of both Tax Free Fund and Tax Free
Portfolio, the master fund in which Tax Free Fund invests its assets.
/2/ The investment adviser and administrator for Municipal Fund have contractually agreed for the 16-month
period from the Fund's fiscal year end of October 31, 1999, to waive their fees and reimburse expenses so that
the total expenses of Municipal Fund will not exceed 0.55%. Tax Free Fund's adviser and administrator have
contractually agreed for the 16-month period from the Fund's fiscal year end of September 30, 1999, to waive
their fees and reimburse expenses so that the total expenses of Tax Free Fund will not exceed 0.85%.
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Expense Example
The example below illustrates the expenses you will incur on a $10,000
investment in each Fund. It assumes that the Fund earned an annual return of 5%
over the periods shown, that the Fund's operating expenses remained the same and
you sold your shares at the end of the period.
You may use this hypothetical example to compare the Fund's expense history with
other funds.
<TABLE>
<CAPTION>
Expense Example/3/ 1 Year 3 Years 5 Years 10 Years
===============================================================================================================
<S> <C> <C> <C> <C>
Municipal Fund $56 $183 $324 $ 723
Tax Free Fund $87 $372 $699 $1,626
Pro Forma $56 $183 $324 $ 723
----------------------------------------------------------------------------------------------------------------
</TABLE>
/3/For the first 16 months, the expense example takes into account fee waivers
and reimbursements.
The purpose of the table is to assist shareholders in understanding the various
costs and expenses that a shareholder in the Funds will bear directly and
indirectly both for the current Funds and on a pro forma basis if the proposed
reorganization is approved. The example is included for solely illustrative
purposes and should not be considered a representation of future performance or
expenses. Actual expenses may be higher or lower.
5
<PAGE>
THE REORGANIZATION
Terms of the Reorganization
The Board of each Fund has approved the Agreement and Plan of Reorganization
(the "Agreement"), a copy of which is attached as Exhibit A. The Agreement
provides for reorganization on the following terms:
. The reorganization is scheduled to occur at 5:00 p.m., Eastern Time, on
August 25, 2000, but may occur on a later date agreed to by the parties.
. Prior to the reorganization Tax Free Fund will redeem its entire interest
in Tax Free Portfolio in exchange for its pro rata share of the portfolio
securities and other assets of Tax Free Portfolio. In the reorganization,
Tax Free Fund will transfer all of its assets to Municipal Fund, and in
exchange Municipal Fund will assume Tax Free Fund's stated liabilities and
issue Institutional shares as described below.
. Municipal Fund will issue Institutional shares to Tax Free Fund in an
amount equal to the value of the assets received by Municipal Fund, less
the liabilities assumed by Municipal Fund in the transaction. These shares
will immediately be distributed by Tax Free Fund to Tax Free Fund's
shareholders in proportion to their holdings in Tax Free Fund on the
reorganization date. As a result, shareholders of Tax Free Fund will become
Institutional shareholders of Municipal Fund.
. The net asset value of both Funds will be computed as of the close of
regular trading on The New York Stock Exchange (normally 4:00 p.m., Eastern
Time) on the reorganization date.
. In connection with the reorganization, Tax Free Fund will be terminated and
liquidated.
The following diagram shows how the reorganization will be carried out.
<TABLE>
<CAPTION>
<S> <C> <C>
Tax Free Fund Municipal Fund
transfers its receives assets
assets and from and assumes
liabilities to liabilities of
Municipal Fund Tax Free Fund
--------------------- --------------------
Tax Free Fund Tax Free Fund Municipal Fund
shareholders receives these Institutional
receive Municipal shares and shares are issued
Fund Institutional distributes them
shares to its
shareholders
--------------------- --------------------
</TABLE>
Currently, Municipal Fund intends to retain most of the portfolio securities and
other assets acquired from Tax Free Fund after the reorganization. The
portfolio managers may determine, however, to liquidate individual securities
from time to time.
Tax Status of the Reorganization
The reorganization will not take place unless Tax Free Fund and Municipal Fund
receive from Hale and Dorr LLP, counsel to Municipal Fund, a satisfactory
opinion substantially to the effect that:
. The acquisition by Municipal Fund of all of the assets of Tax Free
Fund solely in exchange for the issuance of Institutional shares of
Municipal Fund to Tax Free Fund and the assumption of certain
scheduled Tax Free Fund liabilities by Municipal Fund, followed by the
distribution by Tax Free Fund, in liquidation of Tax Free Fund, of
Institutional shares of
6
<PAGE>
Municipal Fund to the shareholders of Tax Free Fund in exchange for
their Tax Free Fund shares of beneficial interest and the termination
of Tax Free Fund, will constitute a reorganization within the meaning
of Section 368(a) of the Code, and Tax Free Fund and Municipal Fund
will each be "a party to a reorganization" within the meaning of
Section 368(b) of the Code.
. No gain or loss will be recognized by Tax Free Fund upon (i) the
transfer of all of its assets to Municipal Fund solely in exchange for
the issuance of Institutional shares of Municipal Fund to Tax Free
Fund and the assumption of certain scheduled Tax Free Fund liabilities
by Municipal Fund and (ii) the distribution by Tax Free Fund of such
Institutional shares of Municipal Fund to the shareholders of Tax Free
Fund.
. No gain or loss will be recognized by Municipal Fund upon the receipt
of the assets of Tax Free Fund solely in exchange for the issuance of
Institutional shares of Municipal Fund to Tax Free Fund and the
assumption of certain scheduled Tax Free Fund liabilities by Municipal
Fund.
. The basis of the assets of Tax Free Fund acquired by Municipal Fund
will be, in each instance, the same as the basis of those assets in
the hands of Tax Free Fund immediately prior to the transfer.
. The tax holding period of the assets of Tax Free Fund in the hands of
Municipal Fund will, in each instance, include Tax Free Fund's tax
holding period for those assets.
. The shareholders of Tax Free Fund will not recognize gain or loss upon
the exchange of all of their shares of beneficial interest of Tax Free
Fund solely for Institutional shares of Municipal Fund as part of the
transaction.
. The basis of Institutional shares of Municipal Fund received by Tax
Free Fund shareholders in the transaction will be the same as the
basis of the shares of beneficial interest of Tax Free Fund
surrendered in exchange therefor.
. The tax holding period of the Institutional shares of Municipal Fund
received by Tax Free Fund shareholders will include, for each
shareholder, the tax holding period for the shares of beneficial
interest of Tax Free Fund surrendered in exchange therefor, provided
that Tax Free Fund shares were held as capital assets on the date of
the exchange.
As Municipal Fund shareholders, former Tax Free Fund shareholders will become
liable for taxes payable on their proportionate share of any taxable income and
capital gains recognized by Municipal Fund. These may include not only taxable
income and gains recognized after the reorganization, but also taxable income
and capital gains recognized but not distributed prior to the reorganization and
taxable income and capital gains attributable to pre-reorganization periods but
not recognized until after the reorganization.
Reasons for the Proposed Reorganization
The Board of Trustees of Tax Free Fund believes that the proposed reorganization
will be advantageous to the shareholders of Tax Free Fund for several reasons.
The Board of Trustees considered the following matters, among others, in
approving the reorganization at a meeting held on September 8, 1999.
Overlapping Investment Strategy and Market Niche. Tax Free Fund and Municipal
Fund have significantly similar investment objectives and investment strategies.
In addition, the portfolios of both Funds have a generally similar average
maturity and duration, as well as comparable credit ratings. Due to the
acquisition of BT by Deutsche Bank AG on June 4, 1999, the same sales force is
now marketing both Funds. Because of the confusion that might be caused by
offering clients competing intermediate-duration municipal bond funds, it is not
advantageous to operate and market Tax Free Fund separately from Municipal Fund.
7
<PAGE>
Greater Diversification. As described further below, Municipal Fund is
significantly larger than Tax Free Fund. Shareholders of both Funds may be
better served by a combined Fund offering greater diversification. To the
extent that combining the Funds' assets into a single fund creates a larger
asset base, Municipal Fund's investment portfolio can achieve greater
diversification after the reorganization than is currently possible for both
Funds and particularly the significantly smaller Tax Free Fund. Greater
diversification is expected to benefit the shareholders of both Funds because it
may reduce the negative effect that the adverse performance of any one security
may have on the performance of the entire portfolio.
Investment Performance. Municipal Fund Institutional shares received in the
reorganization will provide Tax Free Fund's shareholders with substantially the
same investment advantages as they currently have at a comparable level of risk.
Tax Free Fund's Board of Trustees also considered the performance history of
each Fund, which is shown in the table below. For the comparable periods since
Municipal Fund's inception date of December 13, 1991, Municipal Fund
Institutional Class has outperformed Tax Free Fund. The Trustees further noted
that due to the overlapping investment strategy, market niche and the similar
marketing channels of these Funds, all shareholders may benefit by the greater
diversification and the possibility of reduced expenses due to the combination
of the Funds.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETUIRNS
----------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS/1/
For the Period Ending Municipal Fund Tax Free Fund
March 31, 2000 Institutional Shares
(Inception 12/13/91) (Inception 07/20/92)
==================================================================================================================
<S> <C> <C>
1 year 0.03% (0.23)%
3 years 4.65% 4.47%
5 years 5.54% 4.83%
Inception 7.08% 4.80%
------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/Past performance offers no indication of how the Fund will perform in the
future.
Possibility of Reduced Expenses. A combined Fund offers economies of scale that
may lead to better control over expenses than is currently possible,
particularly for Tax Free Fund. Both Funds incur substantial costs for
accounting, legal, transfer agency services, insurance, and custodial and
administrative services. As shown in the Fees and Expenses table, the Total
Annual Fund Operating Expenses of Municipal Fund Institutional shares are lower
than the total for the Tax Free Fund, both on a gross and net basis.
Benefits to Municipal Fund. The Board of Trustees of Municipal Fund considered
at a meeting held on August 19, 1999, that the reorganization presents an
excellent opportunity for Municipal Fund to acquire investment assets without
the obligation to pay commissions or other transaction costs that are normally
associated with the purchase of portfolio securities. This opportunity provides
an economic benefit to Municipal Fund and its shareholders.
Benefits to Advisers and Other Service Providers. The Board of Trustees of each
Fund considered that the Fund's advisers, administrators and distributors might
also benefit from the reorganization. For example, the advisers and
administrators might function more efficiently and therefore realize cost
savings from a consolidated portfolio management effort and from the need to
prepare fewer prospectuses, reports and regulatory filings. The trustees
believe, however, that these savings will not amount to a significant economic
benefit.
Additional Terms of Agreement and Plan of Reorganization
8
<PAGE>
Surrender of Share Certificates. Shareholders of Tax Free Fund whose shares are
represented by one or more share certificates should, before the reorganization
date, either surrender their certificates to Tax Free Fund or deliver to Tax
Free Fund a lost certificate affidavit, in the form and accompanied by any
surety bonds that Tax Free Fund may require (collectively, an "Affidavit"). On
the reorganization date, all certificates that have not been surrendered to Tax
Free Fund will be cancelled, will no longer evidence ownership of Tax Free
Fund's shares and, if not otherwise surrendered, will evidence ownership of
Municipal Fund Institutional shares. Shareholders may not redeem or transfer
Municipal Fund Institutional shares received in the reorganization until they
have surrendered their Tax Free Fund share certificates or delivered an
Affidavit. Municipal Fund will not issue share certificates in the
reorganization.
Conditions to Closing the Reorganization. The obligation of Tax Free Fund to
consummate the reorganization is subject to the satisfaction of certain
conditions, including the performance by Municipal Fund of all its obligations
under the Agreement and the receipt of an officers' certificate from Municipal
Fund (see Agreement, paragraphs 6 and 7).
The obligation of Municipal Fund to consummate the reorganization is also
subject to the satisfaction of certain conditions under the Agreement including
Tax Free Fund having distributed to its shareholders for its taxable year ending
on the closing date of the Reorganization: (1) all of its investment company
taxable income (prior to reduction by any dividends paid deduction); (2) all of
its net capital gain, after reduction by any capital loss carry forward; and (3)
all of the excess of (i) its interest income excludable from federal gross
income over (ii) the related deductions disallowed under the Code (see
Agreement, paragraphs 6 and 7).
The obligations of both Funds are subject to, among other things, the approval
of the Agreement by the necessary vote of the outstanding shares of Tax Free
Fund, in accordance with the provisions of Tax Free Fund's declaration of trust
and by-laws. The Funds' obligations are also subject to several other
conditions, including the receipt of all consents, orders and permits necessary
to consummate the reorganization and the receipt of a favorable opinion of
counsel for Municipal Fund as to the federal income tax consequences of the
reorganization.
Termination of Agreement. Tax Free Fund or Municipal Fund may mutually agree to
terminate the Agreement (even if the shareholders of Tax Free Fund have already
approved it) at any time before the reorganization date. Either Fund may also
terminate the Agreement if the other Fund has materially breached any
representation, warranty or agreement contained in the Agreement or if any
condition to closing the reorganization cannot or will not be met.
Expenses of the Reorganization. Each Fund will bear its own expenses in
connection with the reorganization.
CAPITALIZATION
The following table sets forth the capitalization of each Fund as of March 31,
2000 and the pro forma combined capitalization of both Funds as if the
reorganization had occurred on that date. The table reflects pro forma exchange
ratios of approximately 0.969 Municipal Fund Institutional shares being issued
for each share of Tax Free Fund. If the reorganization is consummated as
proposed, the actual exchange ratios on the reorganization date may vary from
the exchange ratios indicated due to changes in any of a number of factors,
including:
. The market value of the portfolio securities of both Municipal Fund and Tax
Free Fund between March 31, 2000 and the reorganization date.
. Changes in the amount of undistributed net investment income and net
realized capital gains of Municipal Fund and Tax Free Fund during that
period resulting from income and distributions.
. Changes in the accrued liabilities of Municipal Fund and Tax Free Fund
during the same period.
9
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Municipal Fund
Capitalization as Municipal Fund Pro Forma Combined/1/
of March 31, 2000 Tax Free Fund Institutional Class Institutional Class
==================================================================================================================
<S> <C> <C> <C>
Net assets $19,252,541 $474,092,667 $493,345,208
Net asset value per share $ 10.34 $ 10.67 $ 10.67
Shares outstanding 1,862,775 44,428,225 46,232,587
==================================================================================================================
</TABLE>
/1/ If the reorganization had taken place on March 31, 2000 Tax Free Fund would
have received 1,805,029 Institutional shares of Municipal Fund, which would have
been available for distribution to the shareholders of Tax Free Fund.
It is impossible to predict how many Institutional shares of Municipal Fund will
actually be received and distributed by Tax Free Fund on the reorganization
date. The table should not be relied upon to determine the amount of Municipal
Fund Institutional shares that will actually be received and distributed.
COMPARISON OF BUSINESS TRUSTS UNDER DELAWARE AND MASSACHUSETTS LAW
Tax Free Fund is organized as a Massachusetts business trust. Municipal Fund is
organized as a Delaware business trust. The following is a comparison of the
laws of Massachusetts and Delaware applicable to business trusts.
Limitation of Shareholders' and Funds' Liability. Delaware law provides that
------------------------------------------------
the shareholders of a Delaware business trust shall not be subject to liability
for the debts or obligations of the trust. Under Massachusetts law,
shareholders of a Massachusetts business trust (such as Tax Free Fund) may,
under certain circumstances, be personally liable for the debts and obligations
of that trust. Although the risk of liability of shareholders of a
Massachusetts business trust who do not participate in the management of the
trust may be remote, Delaware statutory law may be considered to afford greater
protection against potential shareholder liability. Similarly, Delaware law
provides that, to the extent that a Delaware business trust issues multiple
series of shares, each series shall not be liable for the debts or obligations
of any other series, which is another potential, although remote, risk in the
case of multiple series of a Massachusetts business trust. While it is
frequently assumed that a series of shares of a Massachusetts business trust
will be liable only for its own obligations, there is no direct statutory or
judicial support for that position.
Limitation of Trustee Liability. Delaware law provides that, except to the
-------------------------------
extent otherwise provided in a trust's declaration of trust or by-laws, trustees
will not be personally liable to any person (other than the business trust or a
shareholder thereof) for any act, omission or obligation of the business trust
or any trustee thereof. Delaware law also provides that a trustee's actions
under a Delaware business trust's declaration of trust or by-laws will not
subject the trustee to liability to the business trust or its shareholders if
the trustee takes such action in good faith reliance on the provisions of the
business trust's declaration of trust or by-laws. These limitations on liability
under Delaware law are generally consistent with those applicable to directors
of a corporation under Delaware law and may be beneficial in attracting and
retaining qualified persons to act as trustees. The declaration of trust of a
Massachusetts business trust may limit the liability of a trustee who is not
also an officer of the trust for breach of fiduciary duty except for, among
other things, any act or omission not in good faith that involves intentional
misconduct or a knowing violation of law or any transaction from which such
trustee derives an improper direct or indirect financial benefit.
Shareholder Voting. Delaware law provides that a Delaware business trust's
------------------
declaration of trust or by-laws may set forth provisions related to voting in
any manner. This provision appears to permit shareholder
10
<PAGE>
voting through computer or electronic media. For an investment company with a
significant number of shareholders with access to computer or electronic
networks, the use of such voting methods could significantly reduce the costs of
shareholder voting.
Declarations of Trust. Although neither a Delaware business trust nor a
---------------------
Massachusetts business trust is required to hold annual shareholder meetings,
Delaware law affords to the trustees the ability to adapt the Delaware business
trust to future contingencies without the necessity of holding a special
shareholder meeting. The trustees of a Delaware business trust may have the
power to amend the business trust's governing instrument to create a class or
series of shares of beneficial interest that was not previously outstanding; to
dissolve the business trust; to incorporate the Delaware business trust; to
merge or consolidate with another entity; to sell, lease, exchange, transfer,
pledge or otherwise dispose of all or any part of the business trust's assets;
to cause any series to become a separate trust; and to change the Delaware
business trust's domicile -- all without shareholder vote. Any exercise of
authority by the trustees will be subject to applicable state and federal law.
The flexibility of Delaware business trusts should help to assure that a
Delaware business trust operates under the most advantageous form of
organization and is intended to reduce the expense and frequency of future
shareholder meetings for non-investment-related operational issues.
ADDITIONAL INFORMATION ABOUT THE FUNDS' BUSINESSES
The following table shows where in each Fund's prospectus you can find
additional information about the business of the Fund.
<TABLE>
<CAPTION>
=================================================================================================================
Type of Information Headings in Prospectuses
-----------------------------------------------------------------------------------------------------------------
Municipal Fund Tax Free Fund
=================================================================================================================
<S> <C> <C>
Risk/return summary Overview of Municipal Bond Overview of Intermediate Tax Free
-----------------------------------------------------------------------------------------------------------------
Investment objectives/goals Goal
-----------------------------------------------------------------------------------------------------------------
Principal investment strategies Core Strategy, Investment Policies and Strategies
-----------------------------------------------------------------------------------------------------------------
Principal risks of investing in Principal Risks of Investing in the Fund, Who Should Consider Investing in
the Funds: narrative disclosure the Fund
-----------------------------------------------------------------------------------------------------------------
Principal risks of investing in Total Returns, After Fees and Expenses
the Funds: risk/return bar chart
and table
-----------------------------------------------------------------------------------------------------------------
Fee table Annual Fund Operating Expenses
-----------------------------------------------------------------------------------------------------------------
Body of prospectus A Detailed Look at Municipal Bond A Detailed Look at Intermediate Tax
Free
-----------------------------------------------------------------------------------------------------------------
Investment objectives, principal Objective, Strategy, Principal Objective, Strategy, Principal
investment strategies and related Investments, Investment Process, Investments, Investment Process,
risks Other Investments and Risks Risks
-----------------------------------------------------------------------------------------------------------------
Management: investment Management of the Fund
adviser and portfolio manager
-----------------------------------------------------------------------------------------------------------------
Shareholder information: Calculating the Fund's Share Price
Pricing of Fund shares
-----------------------------------------------------------------------------------------------------------------
Shareholder information: Buying and Selling Fund Shares
Purchase of Fund shares
-----------------------------------------------------------------------------------------------------------------
Shareholder information:
Redemption of Fund shares
-----------------------------------------------------------------------------------------------------------------
Shareholder information: Dividends and Distributions, Tax Considerations
Dividends and distributions; tax
consequences
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================================
Type of Information Headings in Prospectuses
-----------------------------------------------------------------------------------------------------------------
Municipal Fund Tax Free Fund
=================================================================================================================
<S> <C> <C>
-----------------------------------------------------------------------------------------------------------------
Financial highlights Financial highlights
Information
-----------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
BOARDS' EVALUATION AND RECOMMENDATION
For the reasons described above, the Board of Trustees of Tax Free Fund,
including the trustees who are not "interested persons" of either Fund or any of
their advisers ("Independent Trustees"), unanimously approved the reorganization
at a meeting held on September 8, 1999. In particular, the Trustees determined
that the reorganization was in the best interests of Tax Free Fund and that the
interests of Tax Free Fund's shareholders would not be diluted as a result of
the reorganization. Similarly, the Board of Trustees of Municipal Fund,
including the Independent Trustees, unanimously approved the reorganization at a
meeting held on August 19, 1999. The Trustees also determined that the
reorganization was in the best interests of Municipal Fund and that the
interests of Municipal Fund's shareholders would not be diluted as a result of
the reorganization.
--------------------------------------------------------------------------------
Therefore, after careful consideration, the Board of Trustees of Tax Free Fund,
including the Independent Trustees, recommends that the shareholders of Tax Free
Fund vote "FOR" the proposal to approve the Agreement and Plan of
Reorganization.
--------------------------------------------------------------------------------
VOTING RIGHTS AND REQUIRED VOTE
Each share of Tax Free Fund outstanding on the Record Date is entitled to one
vote. Approval of the above proposal requires the affirmative vote of a
majority of the shares of Tax Free Fund outstanding and entitled to vote. For
this purpose, a majority of the outstanding shares of Tax Free Fund means the
vote of the lesser of:
(1) 67% or more of the shares present at the Meeting, if the holders of more
than 50% of the outstanding shares of Tax Free Fund are represented in person or
by proxy, or
(2) more than 50% of the outstanding shares of Tax Free Fund.
Shares of Tax Free Fund represented in person or by proxy, including shares that
abstain or do not vote on the proposal, will be counted for purposes of
determining whether there is a quorum at the Meeting. These include proxies
submitted by a broker or nominee holding shares in "street name" who indicate on
the proxy card that it does not have discretionary authority to vote on the
proposal. Accordingly, an abstention from voting or a "broker non-vote" has the
same effect as a vote against the proposal.
Provided that they are not otherwise represented in person or by proxy; BT will
vote any shares in accounts as to which it has (i) investment authority and
discretionary authority to vote; (ii) it is the owner of record but does not
have investment discretion; and (iii) shares in any other accounts as to which
BT is the agent of record. These shares will be voted by BT for, against, or
abstaining, in the same proportion as the votes cast by holders of all shares in
the Tax Free Fund otherwise represented at the Meeting. This practice is
commonly referred to as "mirror" or "echo" voting.
If the required approval of shareholders is not obtained, Tax Free Fund will
continue to engage in business as a separate mutual fund and the Board of
Trustees will consider what further action, if any, may be appropriate.
INFORMATION CONCERNING THE MEETING
Solicitation of Proxies
In addition to the mailing of these proxy materials, proxies may be solicited by
telephone, by fax, through the Internet or in person by the Trustees, officers
and employees of Tax Free Fund or by personnel of Shareholder Communications
Corporation or BT or ICC Distributors, Inc., the distributor of Tax Free Fund's
shares.
13
<PAGE>
Revoking Proxies
A Tax Free Fund shareholder signing and returning a proxy has the power to
revoke it at any time before it is exercised:
[_] By filing a written notice of revocation with Tax Free Fund's transfer
agent, or
[_] By returning before the time of the Meeting a duly executed proxy with a
later date than the proxy being revoked, or
[_] If a shareholder has executed a proxy but is present at the Meeting and
wishes to vote in person, by notifying the secretary of Tax Free Fund at
the Meeting at any time before the proxy is voted.
Simply attending the Meeting without voting, however, will not revoke a
previously executed and returned proxy.
Outstanding Shares and Quorum
As of June 2, 2000, 1,872,856.735 shares of Tax Free Fund were outstanding.
Only shareholders of record on June 2, 2000 (the "record date") are entitled to
notice of and to vote at the Meeting and any adjournments thereof. A majority
of the outstanding shares of Tax Free Fund that are entitled to vote will be
considered a quorum for the transaction of business.
Other Business
Tax Free Fund's Board of Trustees knows of no business to be presented for
consideration at the Meeting other than the proposal. If other business is
properly brought before the Meeting, proxies will be voted according to the best
judgment of the persons named as proxies.
Adjournments
If a quorum is not present in person or by proxy at the time any session of the
Meeting is called to order, the persons named as proxies may vote those proxies
that have been received to adjourn the Meeting to a later date. If a quorum is
present but there are not sufficient votes in favor of the proposal, the persons
named as proxies may propose one or more adjournments of the Meeting to permit
further solicitation of proxies concerning the proposal. Any adjournment will
require the affirmative vote of a majority of Tax Free Fund's shares present in
person or by proxy at the session of the Meeting to be adjourned. If an
adjournment of the Meeting is proposed because there are not sufficient votes in
favor of the proposal, the persons named as proxies will vote those proxies
favoring the proposal in favor of adjournment, and will vote those proxies
against the reorganization against adjournment.
Telephone and Internet Voting
Tax Free Fund may record votes over the telephone or through the Internet. In
doing so, it will use procedures designed to authenticate shareholders'
identities, to allow shareholders to authorize the voting of their shares in
accordance with their instructions, and to confirm that their instructions have
been properly recorded. Proxies voted over the telephone or through the
Internet may be revoked at any time before they are voted in the same manner
that proxies voted by mail may be revoked.
OWNERSHIP OF SHARES OF THE FUNDS
To the knowledge of the Funds, as of June 2, 2000, the following persons owned,
of record or beneficially, 5% or more of the outstanding shares of Tax Free Fund
and Municipal Fund (before the reorganization) and would own (after the
reorganization), 5% or more of the shares of Municipal Fund.
14
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================
Tax Free Fund Municipal Fund Municipal Fund
Names and Addresses of Owners Shares owned and Institutional Shares Institutional Shares
of More Than 5% of Shares Percentage of Fund (before reorganization) (after reorganization)/1/
======================================================================================================
<S> <C> <C> <C>
Bankers Trust Company
FBO 2300414040
PO Box 9005 278,661.532 270,023.024
Church Street Station 14.97% .571%
New York, NY 10008
------------------------------------------------------------------------------------------------------
Bankers Trust Company
FBO 2582182424
PO Box 9005 120,811.611 116,945.639
Church Street Station 6.45% .255%
New York, NY 10008
------------------------------------------------------------------------------------------------------
David Eisenberg
Stephanie J. Eisenberg JT WROS
C/O Sanford C. Bernstein & Co. 113,727,602 110,088.336
767 Fifth Avenue 6.07% .233%
New York, NY 10153-0023
------------------------------------------------------------------------------------------------------
Charles Schwab & Co., Inc.
Special Custody Account
Mutual Funds Department 27,821,391.125 27,821,391.125
101 Montgomery Street 61.27% 58.905%
San Francisco, CA 94101-4122
------------------------------------------------------------------------------------------------------
National Financial Services Corp.
For the Exclusive Benefit of our
Customers, Attn: Mutual FDS-No Loads- 5/th/ FL 2,481,009.572 2,481,009.572
200 Liberty St. 1 World Fin Ctr. 5.46% 5.252%
New York, NY 10281-1003
------------------------------------------------------------------------------------------------------
</TABLE>
/1/ As of June 2, 2000, the table reflects pro forma exchange ratios of
approximately 0.968 Municipal Fund Institutional shares being issued for each
share of Tax Free Fund. If the reorganization is consummated, the actual
exchange ratios on the reorganization date may vary from the exchange ratios as
previously discussed.
As of June 2, 2000, the Trustees and Officers of Tax Free Fund and Municipal
Fund, each as a group, owned in the aggregate less than 1% of the outstanding
shares of their respective Funds.
EXPERTS
The financial statements and the financial highlights of Tax Free Fund as of
September 30, 1999 and for the periods then ended and of Municipal Fund as of
October 31, 1999 and for each of the periods then ended are incorporated by
reference into this proxy statement and prospectus. These financial statements
and highlights for each of Tax Free Fund and Municipal Fund have been audited by
PricewaterhouseCoopers LLP, independent accountants for each Fund, as stated in
the reports appearing in the respective Annual Reports to shareholders, which
are incorporated by reference in the statements of additional information.
These financial statements and highlights are included in reliance upon the
reports given upon the authority of such firm as an expert in accounting and
auditing.
15
<PAGE>
AVAILABLE INFORMATION
Each Fund is subject to the informational requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, as amended, and
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). These reports, proxy statements and
other information filed by the Funds can be inspected and copied (at prescribed
rates) at the public reference facilities of the Commission at 450 Fifth Street,
NW, Washington, D.C., and at the following regional offices: Chicago (500 West
Madison Street, Suite 1400, Chicago, Illinois) and New York
(7 World Trade Center, Suite 1300, New York, New York). Copies of such material
can also be obtained by e-mail at [email protected], or by writing the Public
Reference Branch, Office of Consumer Affairs and Information Services of the
Commission at 450 Fifth Street, NW, Washington, D.C. 20549-0102. For information
on the Public Reference Section, call the Commission at 1-202-942-8090. In
addition, copies of these documents may be viewed on-screen or downloaded from
the EDGAR Database on the Commission's Internet site at http://www.sec.gov.
16
<PAGE>
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this ____th day of __________, 2000, among (i) Morgan Grenfell Investment Trust
(the "Morgan Grenfell Trust"), a business trust organized under the laws of the
State of Delaware with its principal place of business at One South Street,
Baltimore, Maryland 21202, on behalf of Municipal Bond (the "Acquiring Fund"), a
series of the Morgan Grenfell Trust, and (ii) BT Investment Funds (the "BT
Trust"), a business trust organized under the laws of the Commonwealth of
Massachusetts with its principal place of business at One South Street,
Baltimore, Maryland 21202, on behalf of Intermediate Tax Free Fund (the
"Acquired Fund"), a series of the BT Trust.
This Agreement is intended to be and is adopted as a plan of reorganization
within the meaning of Section 368 of the United States Internal Revenue Code of
1986, as amended (the "Code"). The reorganization (the "Reorganization") will
consist of (i) the transfer of all of the assets of the Acquired Fund to the
Acquiring Fund in exchange for (a) the issuance of Institutional Class shares of
beneficial interest of the Acquiring Fund (collectively, the "Acquiring Fund
Shares" and each, an "Acquiring Fund Share") to the Acquired Fund, and (b) the
assumption by the Acquiring Fund of certain scheduled liabilities of the
Acquired Fund, and (ii) the distribution by the Acquired Fund, on the Closing
Date herein referred to or as soon thereafter as conveniently practicable, of
the Acquiring Fund Shares to the shareholders of the Acquired Fund in
liquidation of the Acquired Fund and the termination of the Acquired Fund, all
upon the terms and conditions hereinafter set forth in this Agreement.
WHEREAS, the Reorganization is intended to qualify as a reorganization
within the meaning of Section 368(a) of the Code;
WHEREAS, the Morgan Grenfell Trust and the BT Trust are each registered
open-end management investment companies, and the Acquired Fund owns securities
that generally are assets of the character in which the Acquiring Fund is
permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest;
WHEREAS, the Board of Trustees of the Morgan Grenfell Trust has determined
that the exchange of all of the assets of the Acquired Fund for shares of the
Acquiring Fund Shares and the assumption by the Acquiring Fund of certain
liabilities of the Acquired Fund is in the best interests of the Acquiring Fund
shareholders and that the interests of the existing shareholders of the
Acquiring Fund would not be diluted as a result of this transaction;
WHEREAS, the Board of Trustees of the BT Trust has determined that the
exchange of all of the assets of the Acquired Fund for shares of the Acquiring
Fund Shares and the assumption by Acquiring Fund of certain liabilities of the
Acquired Fund is in the best interests of the Acquired Fund shareholders and
that the interests of the existing shareholders of the Acquired Fund would not
be diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE INSTITUTIONAL
CLASS SHARES OF THE ACQUIRING FUND AND ASSUMPTION OF THE ACQUIRED FUND'S
SCHEDULED LIABILITIES AND LIQUIDATION AND TERMINATION OF THE ACQUIRED FUND.
1.1. Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Acquired Fund agrees
to transfer all of its assets to Acquiring Fund as set forth in paragraph 1.2 to
the Acquiring Fund free and clear of all liens and encumbrances, and the
Acquiring Fund agrees in exchange therefor: (a) to issue and deliver to the
Acquired Fund the number of Acquiring Fund Shares, including fractional
Acquiring Fund Shares, determined by dividing the value of
A1
<PAGE>
the Acquired Fund's net assets transferred to Acquiring Fund, computed in the
manner and as of the time and date set forth in paragraph 2.1, by the net asset
value of one Acquiring Fund Share, computed in the manner as of the time and
date set forth in paragraph 2.2; and (b) to assume certain scheduled liabilities
of the Acquired Fund, as set forth in paragraph 1.3. Such transactions shall
take place at the closing provided for in paragraph 3.1 (the "Closing").
1.2. (a) The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all of its property, including, without limitation, all
goodwill, all interests in the name of the Acquired Fund, all other intangible
property and all books and records of the Acquired Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a list of
all of the Acquired Fund's assets as of the date of execution of this Agreement.
The Acquired Fund reserves the right to sell any of these securities in the
ordinary course of its business (except to the extent sales may be limited by
representations made in connection with the issuance of the tax opinion
described in paragraph 7.6 hereof) but will not, without the prior approval of
the Acquiring Fund, acquire any additional securities other than securities of
the type in which the Acquiring Fund is permitted to invest.
1.3. The Acquired Fund will endeavor to discharge all the Acquired Fund's
known liabilities and obligations prior to the Closing Date. The Acquiring Fund
shall assume all liabilities, expenses, costs, charges and reserves reflected on
an unaudited Statement of Assets and Liabilities of the Acquired Fund prepared
by Bankers Trust Company, as administrator of the Acquired Fund, as of the
Valuation Date, in accordance with generally accepted accounting principles
consistently applied from the prior audited period. The Acquiring Fund shall
assume only those liabilities of the Acquired Fund reflected in that unaudited
Statement of Assets and Liabilities and shall not assume any other liabilities,
whether absolute or contingent, not reflected thereon.
1.4. On the Closing Date or as soon thereafter as is conveniently
practicable (the "Liquidation Date"), the Acquired Fund will liquidate and
distribute pro rata to the Acquired Fund's shareholders of record determined as
of the close of business on the Closing Date (the "Acquired Fund Shareholders"),
the Acquiring Fund Shares it receives pursuant to paragraph 1.1. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the names of the Acquired Fund's shareholders and representing
the respective pro rata number of the Acquiring Fund Shares due such
shareholders. All issued and outstanding shares of the Acquired Fund will
simultaneously be cancelled on the books of the Acquired Fund, although share
certificates representing interests in the Acquired Fund will represent a number
of Acquiring Fund Shares after the Closing Date as determined in accordance with
paragraph 1.1. The Acquiring Fund shall not issue certificates representing the
Acquiring Fund Shares in connection with such exchange.
1.5. Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. The Acquiring Fund Shares will be issued in the
manner described in the Acquiring Fund's current prospectus and statement of
additional information.
1.6. Any transfer taxes payable upon issuance of the Acquiring Fund Shares
in a name other than the registered holder of the Acquired Fund shares on the
books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom such Acquiring Fund Shares
are to be issued and transferred.
1.7. Any reporting responsibility of the Acquired Fund is and shall remain
the responsibility of the Acquired Fund up to and including the Closing Date and
such later date on which the Acquired Fund is terminated.
1.8. The Acquired Fund shall, following the Closing Date and the making of
all distributions pursuant to paragraph 1.4, be terminated under the laws of the
Commonwealth of Massachusetts and in accordance with its governing documents.
A2
<PAGE>
2. VALUATION
2.1. The value of the assets of the Acquired Fund to be transferred, and
liabilities of the Acquired Fund to be assumed, hereunder shall be the value of
such assets computed as of the close of regular trading on the New York Stock
Exchange, Inc. (the "NYSE") on the Closing Date (such time and date being
hereinafter called the "Valuation Date"), using the valuation procedures set
forth in the then current prospectus or statement of additional information of
the Acquiring Fund.
2.2. The net asset value of the Acquiring Fund Shares shall be the value
computed as of the close of regular trading on the NYSE on the Valuation Date,
using the valuation procedures set forth in the then current prospectus or
statement of additional information of the Acquiring Fund.
2.3. All computations of value shall be made by Brown Brothers Harriman &
Co. in accordance with its regular practice as pricing agent for the Acquiring
Fund.
3. CLOSING AND CLOSING DATE
3.1. The Closing Date shall be ________________, 2000, or such later date
as the parties may agree to in writing. All acts taking place at the Closing
shall be deemed to take place simultaneously as of the close of business on the
Closing Date unless otherwise provided. The Closing shall be held as of 5:00
p.m. at the offices of Deutsche Asset Management, One South Street, Baltimore,
Maryland 21202, or at such other time and/or place as the parties may agree.
3.2. The custodian for the Acquired Fund (the "Custodian") shall deliver at
the Closing a certificate of an authorized officer stating that: (a) the
Acquired Fund's assets have been delivered in proper form to the Acquiring Fund
on the Closing Date and (b) all necessary transfer taxes including all
applicable federal and state stock transfer stamps, if any, shall have been
paid, or provision for payment shall have been made, in conjunction with the
delivery of portfolio securities.
3.3. In the event that on the Valuation Date (a) the NYSE or another
primary trading market for portfolio securities of the BT Investment Portfolios
shall be closed to trading or trading thereon shall be restricted or (b) trading
or the reporting of trading on the NYSE or elsewhere shall be disrupted so that
accurate appraisal of the value of the net assets of the parties hereto is
impracticable, the Closing Date shall be postponed until the first business day
after the day when trading shall have been fully resumed and reporting shall
have been restored.
3.4. The Acquired Fund shall deliver to the Acquiring Fund at the Closing a
list of the names, addresses, taxpayer identification numbers and backup
withholding and nonresident alien withholding status of the Acquired Fund
Shareholders and the number and percentage ownership of outstanding full and
fractional shares owned by each such shareholder immediately prior to the
Closing, certified on behalf of the Acquired Fund by the President or a Vice
President of the BT Trust. The Acquiring Fund shall issue and deliver a
confirmation evidencing the Acquiring Fund Shares to be credited to the Acquired
Fund's account on the Closing Date to the Secretary of the BT Trust on behalf of
the Acquired Fund, or provide evidence satisfactory to the Acquired Fund that
such Acquiring Fund Shares have been credited to the Acquired Fund's account on
the books of the Acquiring Fund. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
4. REPRESENTATIONS AND WARRANTIES
4.1. The BT Trust and the Acquired Fund represent and warrant to the Morgan
Grenfell Trust and the Acquiring Fund as follows:
(a) The Acquired Fund is a series of the BT Trust, which is a business
trust, validly existing and in good standing under the laws of the Commonwealth
of Massachusetts and has the power to
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own all of its properties and assets and, subject to approval by the
shareholders of the Acquired Fund, to perform its obligations under this
Agreement. The Acquired Fund is not required to qualify to do business in any
jurisdiction in which it is not so qualified or where failure to qualify would
not subject it to any material liability or disability. The Acquired Fund has
all necessary federal, state and local authorizations to own all of its
properties and assets and to carry on its business as now being conducted;
The BT Trust is a registered open-end management investment company, and
its registration with the Securities and Exchange Commission (the "Commission")
as an investment company under the Investment Company Act of 1940 (the "1940
Act") is in full force and effect;
(c) The BT Trust is not, and the execution, delivery and performance
of this Agreement with respect to the Acquired Fund will not result, in a
material violation of its Declaration of Trust or By-laws or of any agreement,
indenture, instrument, contract, lease or other undertaking with respect to the
Acquired Fund to which the BT Trust is a party or by which it is bound;
(d) The BT Trust has no material contracts or other commitments
(other than this Agreement) with respect to the Acquired Fund which will be
terminated with liability to the BT Trust or to the Acquired Fund prior to the
Closing Date;
(e) No material litigation or administrative proceeding or
investigation of the same, before any court or governmental body, is presently
pending or, to its knowledge, threatened against the BT Trust with respect to
the Acquired Fund or any of the Acquired Fund's properties or assets, except as
previously disclosed in writing to, and acknowledged in writing by, the
Acquiring Fund. The BT Trust and the Acquired Fund know of no facts which might
form the basis for the institution of such proceedings and neither the BT Trust
nor the Acquired Fund is a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects the Acquired Fund's business or the BT Trust's ability to
consummate the transactions herein contemplated;
(f) The Statement of Assets and Liabilities of the Acquired Fund as
of September 30, 1999, has been audited by PricewaterhouseCoopers LLP,
independent certified public accountants, and is in accordance with generally
accepted accounting principles consistently applied, and such statement (copies
of which have been furnished to each of the other parties hereto) fairly
reflects the financial condition of the Acquired Fund as of such date, and there
are no known contingent liabilities of the Acquired Fund as of such date not
disclosed therein;
(g) Since September 30, 1999, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquired Fund of indebtedness maturing more than one year from
the date that such indebtedness was incurred, except as otherwise disclosed to
and accepted by each of the other parties hereto. For the purposes of this
subparagraph (g), a decline in net asset value per share of the Acquired Fund
shall not constitute a material adverse change;
(h) At the Closing Date, all federal and other tax returns and
reports of the Acquired Fund required by law then to have been filed by such
dates shall have been timely filed, and all federal and other taxes (whether or
not shown as due on such returns and reports) shall have been paid so far as
due, or provision shall have been made for the payment thereof and, to the best
of the Acquired Fund's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to such returns;
(i) For each taxable year of its operation, the Acquired Fund has met
the requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and has elected to be treated as such and will
qualify and be treated as such for its final taxable year ending on the Closing
Date;
(j) For each taxable year of its operation, the Acquired Fund has met
the requirements of Section 851(g) of the Code for qualification and treatment
as a separate corporation and will qualify and be treated as such for its final
taxable year ending on the Closing Date;
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(k) All issued and outstanding shares of the Acquired Fund are, and
at the Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable. All of the issued and outstanding shares of the Acquired
Fund will, at the time of Closing, be held by the persons and in the amounts set
forth in the records of the transfer agent as provided in paragraph 3.4. The
Acquired Fund does not have outstanding any options, warrants or other rights to
subscribe for or purchase any shares of the Acquired Fund, nor is there
outstanding any security convertible into any shares of the Acquired Fund;
(l) At the Closing Date, the BT Trust with respect to the Acquired
Fund will have good and marketable title to the assets to be transferred to the
Acquiring Fund pursuant to paragraph 1.1 and full right, power and authority to
sell, assign, transfer and deliver such assets hereunder and, upon delivery and
payment for such assets, the Acquiring Fund will acquire good and marketable
title thereto, subject to no restrictions on the full transfer thereof,
including such restrictions as might arise under the Securities Act of 1933, as
amended (the "1933 Act"), other than as disclosed in writing to, and
acknowledged in writing by, the Acquiring Fund;
(m) The execution, delivery and performance of this Agreement has
been duly authorized by all necessary action on the part of the BT Trust's Board
of Trustees on behalf of the Acquired Fund, and, subject to the approval of the
Acquired Fund shareholders, assuming due authorization, execution and delivery
by the Morgan Grenfell Trust on behalf of the Acquiring Fund, this Agreement
will constitute a valid and binding obligation of the BT Trust with respect to
the Acquired Fund, enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(n) The information to be furnished by the Acquired Fund for use in
no-action letters, applications for exemptive orders, registration statements,
proxy materials and other documents which may be necessary in connection with
the transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations thereunder applicable thereto;
(o) The proxy statement of the Acquired Fund (the "Proxy Statement")
to be included in the registration statement on Form N-14 of the Acquiring Fund
(the "Registration Statement") (other than information therein that relates to
the Acquiring Fund and supplied in writing by the Acquiring Fund for inclusion
therein) will, on the effective date of the Registration Statement and on the
Closing Date, not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not materially misleading;
(p) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the BT Trust on
behalf of the Acquired Fund of the transactions contemplated by this Agreement;
(q) All of the issued and outstanding shares of beneficial interest
of the Acquired Fund have been offered for sale and sold in conformity with all
applicable federal and state securities laws, except as may have been previously
disclosed in writing to the Acquiring Fund; and
(r) The prospectus of the Acquired Fund dated January 31, 2000, and
any amendments or supplements thereto, previously furnished to the Acquiring
Fund, does not contain any untrue statements of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not materially misleading.
4.2. The Morgan Grenfell Trust and the Acquiring Fund represent and warrant to
each of the other parties hereto as follows:
(a) The Acquiring Fund is a series of the Morgan Grenfell Trust,
which is a business
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trust, validly existing and in good standing under the laws of the State of
Delaware and has the power to own all of its properties and assets and to
perform its obligations under this Agreement. The Acquiring Fund is not required
to qualify to do business in any jurisdiction in which it is not so qualified or
where failure to qualify would not subject it to any material liability or
disability. The Acquiring Fund has all necessary federal, state and local
authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The Morgan Grenfell Trust is a registered open-end investment
company, and its registration with the Commission as an investment company under
the 1940 Act is in full force and effect;
(c) The current prospectus of and statement of additional information
of the Morgan Grenfell Trust conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Commission thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;
(d) At the Closing Date, the Morgan Grenfell Trust will have good and
marketable title to the Acquiring Fund's assets;
(e) The Morgan Grenfell Trust is not, and the execution, delivery and
performance of this Agreement on behalf of the Acquiring Fund will not result,
in a material violation of its Declaration of Trust or By-laws or of any
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquiring Fund to which the Morgan Grenfell Trust is a party or
by which it is bound;
(f) No material litigation or administrative proceeding or
investigation of the same, before any court or governmental body is presently
pending or, to the best of its knowledge, threatened against the Morgan Grenfell
Trust with respect to the Acquiring Fund or any of the Acquiring Fund's
properties or assets, except as previously disclosed in writing to, and
acknowledged in writing by, the Acquired Fund. The Morgan Grenfell Trust and
the Acquiring Fund know of no facts which might form the basis for the
institution of such proceedings and neither the Morgan Grenfell Trust nor the
Acquiring Fund is a party to or subject to the provisions of any order, decree
or judgment of any court or governmental body which materially and adversely
affects the Acquiring Fund's business or the Morgan Grenfell Trust's ability on
behalf of the Acquiring Fund to consummate the transactions contemplated herein;
(g) The Statement of Assets and Liabilities of the Acquiring Fund as
of October 31, 1999, has been audited by PricewaterhouseCoopers LLP, independent
certified public accountants, and is in accordance with generally accepted
accounting principles consistently applied, and such statement (copies of which
have been furnished to each of the other parties hereto) fairly reflects the
financial condition of the Acquiring Fund as of such date, and there are no
known contingent liabilities of the Acquiring Fund as of such date not disclosed
therein;
(h) Since October 31,1999, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date that such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquired Fund. For the purposes of this subparagraph (h),
a decline in net asset value per share of the Acquiring Fund shall not
constitute a material adverse change;
(i) At the Closing Date, all federal and other tax returns and
reports of the Acquiring Fund required by law then to have been filed by such
dates shall have been timely filed, and all federal and other taxes (whether or
not shown as due on such returns and reports) shall have been paid so far as
due, or provision shall have been made for the payment thereof and, to the best
of the Acquiring Fund's knowledge, no such return is currently under audit and
no assessment has been asserted with respect to such returns;
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(j) For each taxable year of its operations, the Acquiring Fund has
met the requirements of Subchapter M of the Code for qualification and treatment
as a regulated investment company and has elected to be treated as such and will
qualify as such on the Closing Date;
(k) For each taxable year of its operation, the Acquiring Fund has
met the requirements of Section 851(g) of the Code for qualification and
treatment as a separate corporation and will qualify and be treated as such on
the Closing Date;
(l) At the date hereof, all issued and outstanding shares of the
Acquiring Fund are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any shares of the Acquiring Fund, nor is there outstanding any security
convertible into shares of the Acquiring Fund;
(m) The execution, delivery and performance of this Agreement has
been duly authorized by all necessary action, if any, on the part of the Morgan
Grenfell Trust's Board of Trustees on behalf of the Acquiring Fund, and,
assuming due authorization, execution and delivery by the BT Trust on behalf of
the Acquired Fund, this Agreement will constitute a valid and binding obligation
of the Morgan Grenfell Trust on behalf of the Acquiring Fund, enforceable in
accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors'
rights and to general equity principles;
(n) The Acquiring Fund Shares to be issued and delivered to the
Acquired Fund, for the account of the Acquired Fund shareholders, pursuant to
the terms of this Agreement, will at the Closing Date have been duly authorized
and, when so issued and delivered, will be duly and validly issued Acquiring
Fund Shares and will be fully paid and non-assessable;
(o) The information to be furnished by the Acquiring Fund for use in
no-action letters, applications for exemptive orders, registration statements,
proxy materials and other documents which may be necessary in connection with
the transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto;
(p) The information contained in the Proxy Statement and in the
Registration Statement (only insofar as it relates to the Acquiring Fund) will,
on the effective date of the Registration Statement and on the Closing Date, not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not materially
misleading; and
(q) The Morgan Grenfell Trust, on behalf of the Acquiring Fund,
agrees to use all reasonable efforts to obtain the approvals and authorizations
required by the 1933 Act, the 1940 Act and such of the state Blue Sky or
securities laws as it may deem appropriate in order to continue the Acquiring
Fund's operations after the Closing Date.
5. COVENANTS OF EACH OF THE PARTIES
5.1. The BT Trust, on behalf of the Acquired Fund, will operate its
business in the ordinary course between the date hereof and the Closing Date. It
is understood that such ordinary course of business will include the declaration
and payment of customary dividends and distributions and any other dividends and
distributions necessary or advisable (except to the extent distributions that
are not customary may be limited by representations made in connection with the
issuance of the tax opinion described in paragraph 7.6 hereof), in each case
payable either in cash or in additional shares.
5.2. The Morgan Grenfell Trust, on behalf of the Acquiring Fund, will
operate its business in the ordinary course between the date hereof and the
Closing Date. It is understood that such ordinary course of business will
include the declaration and payment of customary dividends and distributions and
any other dividends and
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distributions necessary or advisable, in each case payable either in cash or in
additional shares.
5.3. The BT Trust will call a meeting of the Acquired Fund's shareholders
to consider and act upon this Agreement and to take all other action necessary
to obtain approval of the transactions contemplated herein.
5.4. The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this Agreement.
5.5. The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund's shares.
5.6. Subject to the provisions of this Agreement, the BT Trust, on behalf
of the Acquired Fund, and the Morgan Grenfell Trust, on behalf of the Acquiring
Fund, each will take, or cause to be taken, all action, and do or cause to be
done, all things reasonably necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement.
5.7. The Acquired Fund shall furnish to the Acquiring Fund on the Closing
Date the Statement of Assets and Liabilities of the Acquired Fund as of the
Closing Date, which statement shall be prepared in accordance with generally
accepted accounting principles consistently applied and shall be certified by
the BT Trust's Treasurer or Assistant Treasurer. As promptly as practicable,
but in any case within 60 days after the Closing Date, the Acquired Fund shall
furnish to the Acquiring Fund, in such form as is reasonably satisfactory to the
Acquiring Fund, a statement of the earnings and profits of the Acquired Fund for
federal income tax purposes, and of any capital loss carryovers and other items
that will be carried over to the Acquiring Fund as a result of Section 381 or
any other provision of the Code, and which statement will be certified by the
Treasurer of the BT Trust.
5.8. The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus (the "Prospectus"),
which will include the Proxy Statement, referred to in paragraph 4.1(n), all to
be included in the Registration Statement, in compliance with the 1933 Act, the
Securities Exchange Act of 1934 (the "1934 Act"), and the 1940 Act in connection
with the meeting of the Acquired Fund's shareholders to consider approval of
this Agreement and the transactions contemplated herein.
5.9 The Acquired Fund and the Acquiring Fund shall each use its reasonable
efforts to cause the Reorganization to be treated as a reorganization within the
meaning of Section 368(a) of the Code.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND AND THE ACQUIRING
FUND
The obligations of each Fund to consummate the transactions provided for
herein shall be subject, at its election, to the performance by each Fund of all
the obligations to be performed by it hereunder on or before the Closing Date
and, in addition thereto, the following further conditions:
6.1. All representations and warranties made in this Agreement by or on
behalf of the Funds shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date with the same force and effect as if
made on and as of the Closing Date;
6.2. The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities showing the federal tax
basis and holding periods as of the Closing Date, certified by BT Trust's
Treasurer or Assistant Treasurer on behalf of the Acquired Fund;
6.3. The BT Trust, on behalf of the Acquired Fund, shall have delivered to
the Acquiring
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Fund on the Closing Date a certificate executed in its name by its President or
Vice President and Treasurer or Assistant Treasurer, in form and substance
satisfactory to the Acquiring Fund and dated as of the Closing Date, to the
effect that the representations and warranties made in this Agreement by or on
behalf of the Acquired Fund are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated by this
Agreement;
6.4 The Morgan Grenfell Trust on behalf of the Acquiring Fund shall have
delivered to the Acquired Fund a certificate executed in its name by its
President or Vice President and its Treasurer or Assistant Treasurer, in form
and substance reasonably satisfactory to the Acquired Fund and dated as of the
Closing Date, to the effect that the representations and warranties made in this
Agreement by or on behalf of the Acquiring Fund are true and correct at and as
of the Closing Date, except as they may by affected by the transactions
contemplated by this Agreement.
7. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE PARTIES
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
7.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of the BT Trust's
Declaration of Trust and By-laws and certified copies of the votes evidencing
such approval shall have been delivered to the Acquiring Fund. Notwithstanding
anything herein to the contrary, no party hereto may waive the conditions set
forth in this paragraph 7.1;
7.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
7.3. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities, including "no-
action" positions of and exemptive orders from such federal and state
authorities) deemed necessary by either party hereto to permit consummation, in
all material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order or permit would
not involve a risk of a material adverse effect on the assets or properties of
any party hereto, provided that any party may for itself waive any of such
conditions;
7.4. The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act;
7.5. The Acquired Fund shall have distributed to its shareholders all of
its investment company taxable income, as defined in Section 852(b)(2) of the
Code (prior to reduction by any dividends paid deduction), and all of its net
capital gain, as such term is used in Section 852(b)(3)(C) of the Code, after
reduction by any capital loss carry forward, and all of the excess of (1) its
interest income excludable from gross income under Section 103(a) of the Code
over (2) the deductions disallowed under Sections 265 and 171(a)(2) of the Code,
in each case for its taxable year ending on the Closing Date.
7.6. The parties shall have received a written opinion of Hale and Dorr
LLP, addressed to the Morgan Grenfell Trust with respect to the Acquiring Fund
and the BT Trust with respect to the Acquired Fund and satisfactory to Daniel O.
Hirsch, as Secretary of each of the parties, respectively, substantially to the
effect that for federal income tax purposes:
(a) The acquisition by the Acquiring Fund of all of the assets of the
Acquired Fund solely in
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exchange for the issuance of Acquiring Fund Shares to the Acquired Fund and the
assumption of certain scheduled Acquired Fund liabilities by the Acquiring Fund,
followed by the distribution by the Acquired Fund, in liquidation of the
Acquired Fund, of Acquiring Fund Shares to the shareholders of the Acquired Fund
in exchange for their Acquired Fund shares of beneficial interest and the
termination of the Acquired Fund, will constitute a reorganization within the
meaning of Section 368(a) of the Code, and the Acquired Fund and the Acquiring
Fund will each be "a party to a reorganization" within the meaning of Section
368(b) of the Code;
(b) No gain or loss will be recognized by the Acquired Fund upon (i) the
transfer of all of its assets to the Acquiring Fund solely in exchange for the
issuance of Acquiring Fund Shares to the Acquired Fund and the assumption of
certain scheduled Acquired Fund liabilities by the Acquiring Fund and (ii) the
distribution by the Acquired Fund of such Acquiring Fund Shares to the
shareholders of the Acquired Fund;
(c) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for the issuance
of Acquiring Fund Shares to the Acquired Fund and the assumption of certain
scheduled Acquired Fund liabilities by the Acquiring Fund;
(d) The basis of the assets of the Acquired Fund acquired by the Acquiring
Fund will be, in each instance, the same as the basis of those assets in the
hands of the Acquired Fund immediately prior to the transfer;
(e) The tax holding period of the assets of the Acquired Fund in the hands
of the Acquiring Fund will, in each instance, include the Acquired Fund's tax
holding period for those assets;
(f) The shareholders of the Acquired Fund will not recognize gain or loss
upon the exchange of all of their shares of beneficial interest of the Acquired
Fund solely for Acquiring Fund Shares as part of the transaction;
The basis of the Acquiring Fund Shares received by the Acquired Fund
shareholders in the transaction will be the same as the basis of the shares of
beneficial interest of the Acquired Fund surrendered in exchange therefor; and
The tax holding period of the Acquiring Fund Shares received by the Acquired
Fund shareholders will include, for each shareholder, the tax holding period for
the shares of beneficial interest of the Acquired Fund surrendered in exchange
therefor, provided that the Acquired Fund shares were held as capital assets on
the date of the exchange.
Notwithstanding anything herein to the contrary, no party hereto may waive in
any material respect the conditions set forth in this paragraph 7.6.
7.7 Each of the Acquiring Fund and the Acquired Fund agrees to make and
provide representations with respect to itself and its shareholders that are
reasonably necessary to enable Hale and Dorr LLP to deliver an opinion
substantially as set forth in paragraph 7.6.
8. BROKERAGE FEES AND EXPENSES
8.1. Each party hereto represents and warrants to each other party hereto,
that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
8.2 Each party will bear its own expenses in connection with the
transactions.
8.3. Shareholders of each of Acquired Fund and Acquiring Fund will bear
their respective expenses, if any, in connection with the transactions.
9. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
9.1 The parties hereto agree that no party has made any representation,
warranty or covenant not set forth herein or referred to in paragraph 4.1, 4.2
and 5.1 through 5.8 hereof and that this Agreement constitutes the entire
agreement between the parties.
9.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
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10. TERMINATION
10.1. This Agreement may be terminated at any time prior to the Closing
Date by: (a) the mutual agreement of the BT Trust on behalf of the Acquired
Fund and the Morgan Grenfell Trust on behalf of the Acquiring Fund; (b) any
party hereto in the event that the other party hereto shall materially breach
any representation, warranty or agreement contained herein to be performed at or
prior to the Closing Date; or (c) a condition herein expressed to be precedent
to the obligations of the terminating party has not been met and it reasonably
appears that it will not or cannot be met.
10.2. In the event of any such termination, there shall be no liability
for damages on the part of any party hereto or their respective Trustees or
officers to any other party, but each shall bear the expenses incurred by it
incidental to the preparation and carrying out of this Agreement.
AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the BT
Trust on behalf of the Acquired Fund and the Morgan Grenfell Trust on behalf of
the Acquiring Fund; provided, however, that following the meeting of the
Acquired Fund shareholders called by the BT Trust pursuant to paragraph 5.3 of
this Agreement, no such amendment may have the effect of changing the provisions
for determining the number of the Acquiring Fund Shares to be issued to the
Acquired Fund shareholders under this Agreement to the detriment of such
shareholders without their further approval.
12. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the BT Trust on behalf of the
Acquired Fund and the Morgan Grenfell Trust on behalf of the Acquiring Fund at
One South Street, Baltimore, MD 21202.
13. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
13.1. The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.2. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
13.3. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
13.4. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other parties hereto. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm, corporation or other entity, other than the parties hereto and
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
13.5. It is expressly agreed that the obligations of the Morgan Grenfell
Trust and the BT Trust shall not be binding upon any of their respective
Trustees, shareholders, nominees, officers, agents or employees personally, but
shall bind only the trust property of the Morgan Grenfell Trust or the BT Trust,
as the case may be, as provided in the trust instruments of the Morgan Grenfell
Trust and the BT Trust, respectively. The execution and delivery of this
Agreement have been authorized by the Trustees of each of the Morgan Grenfell
Trust and the BT Trust, and this Agreement has been executed by authorized
officers of the Morgan Grenfell Trust and the BT Trust on behalf of the Acquired
Fund and the Acquiring
A11
<PAGE>
Fund, respectively, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officers shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the trust property of the Morgan Grenfell
Trust and the BT Trust, as the case may be, as provided in the Declarations of
Trust of the Morgan Grenfell Trust and the BT Trust, respectively.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its President or Vice President and attested by its Secretary or
Assistant Secretary.
Attest: BT INVESTMENT FUNDS on behalf of
INTERMEDIATE TAX FREE
By: __________________________ By: __________________________
Name: Name:
Title: Title:
Attest: MORGAN GRENFELL INVESTMENT TRUST
on behalf of MUNICIPAL BOND
By: __________________________ By: __________________________
Name: Name:
Title: Title:
A12
<PAGE>
MUNICIPAL BONDMUNICIPAL BOND
STATEMENT OF ADDITIONAL INFORMATION
June 23, 2000
This statement of additional information is not a prospectus, but expands upon
and supplements the information contained in the prospectus of Municipal Bond,
dated February 28, 2000. This statement of additional information should be
read in conjunction with the prospectus.
Additional copies of the prospectus may be obtained by writing to the Fund at
Deutsche Asset Management Service Center, P.O. Box 219210, Kansas City, MO
641212-9210 or by telephoning the Fund toll free at 1-800-730-1313.
This statement of additional information is accompanied by and incorporates by
reference to the statement of additional information dated February 28, 2000, of
Morgan Grenfell Investment Trust on behalf of seven separate investment
portfolios, including Municipal Bond Fund, and the statement of additional
information dated January 31, 2000 of BT Investment Funds on behalf of the
Intermediate Tax Free Fund. Municipal Bond Fund and Intermediate Tax Free Bond
Fund are referred to collectively as the "Funds".
<PAGE>
ADDITIONAL INFORMATION ABOUT
MUNICIPAL BOND and INTERMEDIATE TAX FREE
The following table shows where in each Fund's statement of additional
information (SAI) you can find additional information about each Fund.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
TYPE OF INFORMATION HEADINGS IN SAI
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MORGAN GRENFELL BT INVESTMENT FUNDS
INVESTMENT TRUST SAI dated January 31, 2000
SAI dated February 28, 2000
------------------------------------------------------------------------------------------------------------------------
Fund history ORGANIZATION OF THE TRUST
------------------------------------------------------------------------------------------------------------------------
Description of each Fund and ADDITIONAL INFORMATION INVESTMENT OBJECTIVES,
its investments, strategies, policies ON FUND INVESTMENTS AND POLICIES AND RESTRICTIONS:
and risks STRATEGIES AND RELATED Investment Objectives
RISKS Investment Policies
Additional Risk Factors
INVESTMENT RESTRICTIONS Investment Restrictions
-------------------------------------------------------------------------
Management of the Funds, TRUSTEES AND OFFICERS MANAGEMENT OF THE TRUST
Including the Board of Trustees, AND THE PORTFOLIOS:
Officers and Trustee compensation Trustees of the Trust and Portfolio
Officers of the Trust and Portfolio
------------------------------------------------------------------------- Trustee Compensation Table
Control persons, principal holders GENERAL INFORMATION
of securities and management ABOUT THE TRUST
ownership
------------------------------------------------------------------------------------------------------------------------
Investment advisory and other INVESTMENT ADVISORY MANAGEMENT OF THE TRUST
services: investment adviser, AND OTHER SERVICES AND THE PORTFOLIOS:
distributor and other service Investment Adviser
providers SERVICE PLAN Administrator
Distributor
ADDITIONAL INFORMATION Service Agent
Custodian and Transfer Agent
Counsel and Independent
Accountants
------------------------------------------------------------------------------------------------------------------------
Brokerage allocation and other PORTFOLIO TRANSACTIONS INVESTMENT OBJECTIVES,
Practices POLICIES AND RESTRICTIONS:
Portfolio Transactions and
Brokerage Commissions
------------------------------------------------------------------------------------------------------------------------
Shares of beneficial interest GENERAL INFORMATION ORGANIZATION OF THE TRUST
ABOUT THE TRUST
------------------------------------------------------------------------------------------------------------------------
Purchase, redemption and pricing PURCHASE AND REDEMPTION VALUATION OF SECURITIES;
of shares OF SHARES REDEMPTIONS AND PURCHASES IN-IN-KIND:
Purchase of Shares
Redemption of Shares
Redemptions and Purchases In-Kind
Trading in Foreign Securities
------------------------------------------------------------------------------------------------------------------------
MORGAN GRENFELL BT INVESTMENT FUNDS
INVESTMENT TRUST SAI dated January 31, 2000
SAI dated February 28, 2000
------------------------------------------------------------------------------------------------------------------------
Taxation of the Funds TAXES TAXATION:
Taxation of the Fund
Distributions
Taxation of the Portfolio
Other Taxation
Calculation of PERFORMANCE INFORMATION PERFORMANCE INFORMATION:
performance data Standard Performance Information
Expenses
Comparison of Fund Performance
Economic and Market Information
------------------------------------------------------------------------------------------------------------------------
Financial statements FINANCIAL STATEMENTS FINANCIAL STATEMENTS
This section incorporates by This section incorporates by
Reference Municipal Bond's reference Intermediate Tax Free's annual
Annual report dated October 31, 1999. report dated September 30, 1999.
------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Item 15. Indemnification
The response to this Item 15 is incorporated by reference to Item 25 of Post-
Effective Amendment No. 23 to the Registrant's Registration Statement on Form N-
1A ("Registration Statement") as filed with the Securities and Exchange
Commission ("SEC") on February 28, 2000.
Item 16. EXHIBITS
Except as noted, the following exhibits are being incorporated by reference
herein. All of the Registration Statements and Post-Effective Amendments are
filed under the Registrant's registration numbers (33-68704 and 811-8006).
(1) Agreement and Declaration of Trust of Registrant dated September 13,
1993, as amended. /1/
(2a) Amended By-Laws of Registrant. /1/
(b) See Articles III, IV, and V of the Agreement and Declaration of Trust
(exhibit (a)) and Article II of the Amended By-Laws (exhibit (b)). /1/
(3) Not Applicable.
(4) Form of Agreement and Plan of Reorganization filed herewith.
(5) Not Applicable.
(6a) Management Contract dated January 3, 1994, as amended as of April 25,
1994, April 1, 1995 and September 1, 1995, between Deutsche Asset
Management Investment Services Limited (formerly Morgan Grenfell
Investment Services Limited) and Registrant, on behalf of
International Select Equity Fund, Global Equity Fund, European Equity
Fund (formerly European Equity Growth Fund), New Asia Fund,
International Small Cap Equity Fund, Japanese Small Cap Equity Fund,
European Small Cap Equity Fund, Emerging Markets Equity Fund, Global
Fixed Income Fund, International Fixed Income Fund and Emerging
Markets Debt Fund. /1/
(b) Management Contract dated as of December 28, 1994 between Deutsche
Asset Management, Inc. (formerly Morgan Grenfell Inc.) and Registrant,
on behalf of Fixed Income Fund and Municipal Bond Fund. /1/
(c) Management Contract dated as of December 28, 1994 between Deutsche
Asset Management, Inc. (formerly Morgan Grenfell Inc.) and Registrant,
on behalf of Large Cap Growth Fund, Smaller Companies Fund, Short-Term
Fixed Income Fund and Short-Term Municipal Bond Fund. /1/
(d) Management Contract between Deutsche Asset Management, Inc. (formerly
Morgan Grenfell Inc. dated August 23, 1996) and Registrant, on behalf
of Micro Cap Fund. /2/
(e) Form of Management Contract between Deutsche Asset Management, Inc.
(formerly Morgan Grenfell Inc.) and Registrant, on behalf of Total
Return Bond Fund and High Yield Bond Fund. /3/
(f) Form of Management Contract between Deutsche Asset Management
Investment Services Limited (formerly Morgan Grenfell Investment
Services Ltd.) and Registrant, on behalf of Core Global Fixed Income
Fund and Emerging Local Currency Debt Fund. /3/
<PAGE>
(g) Form of Management Contract between Deutsche Asset Management, Inc.
and Registrant, on behalf of European Equity Fund. /7/
(h) Form of Subadvisory Contract between Deutsche Asset Management
Investment Services Limited (formerly Morgan Grenfell Investment
Services Ltd.), Deutsche Asset Management Investment, Inc. (formerly
Morgan Grenfell Inc.) and Registrant, on behalf of Total Return Bond
Fund. /4/
(7a) Distribution Agreement dated as of December 30, 1993 between SEI
Financial Services Company and Registrant, on behalf of all of its
series. /5/
(b) Form of Distribution Agreement between ICC Distributors, Inc. and
Registrant, on behalf of all of its series. /7/
(8) Not Applicable.
(9a) Custody Agreement dated as of August 24, 1998 between Brown Brothers
Harriman & Co. and Registrant, on behalf of all of its series. /4/
(b) Administration Agreement dated as of August 27, 1998 between Deutsche
Asset Management, Inc. (formerly Morgan Grenfell Inc.) and Registrant,
on behalf of all of its series. /4/
(c) Transfer Agency Agreement dated as of December 30, 1993 between
Supervised Service Company, Inc. and Registrant. /2/
(d) Transfer Agency Agreement dated as of December 28, 1994 between
Supervised Service Company, Inc. and Registrant. /2/
(e) Accounting Agency Agreement dated as of September 8, 1998 between
Brown Brothers Harriman & Co., Deutsche Asset Management, Inc.
(formerly Morgan Grenfell, Inc.) and Registrant on behalf of all of
its series. /4/
(f) Delegation Agreement dated as of August 24, 1998 between Brown
Brothers Harriman & Co. and Registrant on behalf of International
Select Equity Fund, Global Equity Fund, European Equity Fund, New Asia
Fund, International Small Cap Equity Fund, Japanese Small Cap Equity
Fund, European Small Cap Equity Fund, Morgan Grenfell Emerging Markets
Equity Fund, Core Global Fixed Income Fund, Global Fixed Income Fund,
International Fixed Income Fund, Morgan Grenfell Emerging Markets Debt
and Emerging Local Currency Debt Fund. /4/
(g) Form of Transfer Agency Agreement between Investment Company Capital
Corp. and Registrant, on behalf of each of its series. /7/
(10) Form of Amended Rule 18f-3 Plan. /6/
(11) Opinion of Hale & Dorr LLP in connection with the legality of the
securities being registered. /8/
(12) Opinion of Hale & Dorr LLP concerning the tax matters and consequences
to shareholders discussed in the proxy/prospectus filed herewith.
(13) Share Purchase Agreement dated as of December 29, 1993 between
Registrant and SEI Financial Management Corporation. /6/
(14) Consent of Independent Accounts filed herewith.
<PAGE>
(15) Not Applicable.
(16) Powers of Attorney. /7/
_______________________
/1/ Filed as an exhibit to Post-Effective Amendment no. 9 to Registrant's
Registration Statement on February 15, 1996 (accession number 0000950146-96-
00221) and incorporated by reference herein.
/2/ Filed as an exhibit to Post-Effective Amendment no. 12 Registrant's
Registration Statement on November 1, 1996 (accession number 0000950146-96-
001933) and incorporated by reference herein.
/3/ Filed as an exhibit to Post-Effective Amendment no. 18 Registrant's
Registration Statement on December 12, 1997 (accession number0000950146-97-
001909) and incorporated by reference herein.
/4/ Filed as an exhibit to Post-Effective Amendment no. 20 Registrant's
Registration Statement on December 28, 1998 (accession number 0001047469-98-
045270) and incorporated by reference herein.
/5/ Filed as an exhibit to Post-Effective Amendment no. 10 Registrant's
Registration Statement on June 11, 1996 (accession number0000950146-96-000954)
and incorporated by reference herein.
/6/ Filed as an exhibit to Post-Effective Amendment no. 16 Registrant's
Registration Statement on February 11, 1997 (accession number 0000950146-97-
000164) and incorporated by reference herein.
/7/ Filed as an exhibit to Post-Effective Amendment no. 22 Registrant's
Registration Statement on December 23, 1999 (accession number 0000928385-99-
003687) and incorporated by reference herein.
/8/ Filed as an exhibit to Pre-Effective Amendment no. 1 Registrant's
Statement on June 8, 2000 (accession number 0000950 168-00-001498) and
incorporated by reference herein.
_______________________
Item 17. Undertakings.
The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is part of this registration statement by any
person or party which is deemed to be an underwriter within the
meaning of Rule 145(c) under the Securities Act of 1933, the
reoffering prospectus will contain the information called for by
the applicable registration form for reofferings by persons who may
be deemed underwriters, in addition to the information called for
by the other items of the applicable form. The undersigned
Registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the
Securities Act of 1933, each post-effective amendment shall be
deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of them.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant, Morgan Grenfell Investment Trust, on behalf of Municipal Bond Fund,
certifies that it meets all of the requirements for effectiveness of this
Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933, as amended, and has duly caused this Post-Effective
Amendment No. 2 on Form N-14 to be signed on its behalf by the undersigned, duly
authorized, in the City of Baltimore and the State of Maryland on this 28th day
of August, 2000.
<PAGE>
MORGAN GRENFELL INVESTMENT TRUST
By: /s/ Daniel O. Hirsch
-----------------------------------
Daniel O. Hirsch
Secretary
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Post -Effective Amendment on Form N-14 has been signed below by the following
persons in the capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/ Richard T. Hale President and Chief August 28, 2000
--------------------------- Executive Officer
Richard T. Hale
/s/ Amy M. Olmert Chief Financial Officer August 28, 2000
---------------------------
Amy M. Olmert
/s/ Paul K. Freeman* Trustee August 28, 2000
---------------------------
Paul K. Freeman
/s/ Graham E. Jones* Trustee August 28, 2000
---------------------------
Graham E. Jones
/s/ Hugh G. Lynch* Trustee August 28, 2000
---------------------------
Hugh G. Lynch
/s/ William N. Searcy* Trustee August 28, 2000
---------------------------
William N. Searcy
/s/ Edward T. Tokar* Trustee August 28, 2000
---------------------------
Edward T. Tokar
*By: /s/ Daniel O. Hirsch Dated: August 28, 2000
---------------------------
Daniel O. Hirsch
Power-of-Attorney
<PAGE>
FORM OF PROXY CARD
BT Investment Funds
Intermediate Tax Free
One South Street, Baltimore, Maryland
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
10:00 A.M., Eastern Time, on July 27, 2000
The undersigned hereby appoints Daniel O. Hirsch and Amy M. Olmert, and each of
them, with full power of substitution, as proxies of the undersigned to vote all
shares of stock that the undersigned is entitled in any capacity to vote at the
above-stated special meeting, and any and all adjournments or postponements
thereof (the "Special Meeting"), on the matters set forth on this Proxy Card,
and, in their discretion, upon all matters incident to the conduct of the
Special Meeting and upon such other matters as may properly be brought before
the Special Meeting. This proxy revokes all prior proxies given by the
undersigned.
All properly executed proxies will be voted as directed. If no instructions are
indicated on a properly executed proxy, the proxy will be voted FOR approval of
Proposal I. All ABSTAIN votes will be counted only in determining the existence
of a quorum at the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES WITH RESPECT TO
INTERMEDIATE TAX FREE. THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" PROPOSAL
I.
The appointed proxies will vote on any other business as may properly come
before the Special Meeting or any adjournment thereof.
Receipt of the notice and the Proxy Statement, dated June 23, 2000 (the "Proxy
Statement"), is hereby acknowledged.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow
the instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to the Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and follow
the instructions.
DO NOT RETURN YOUR PROXY CARD IF YOU VOTE BY TELEPHONE OR INTERNET.
<PAGE>
Please mark boxes in blue or black ink.
I. Approval of Agreement and Plan of Reorganization between Municipal Bond
and Intermediate Tax Free, pursuant to which: (a) Intermediate Tax Free
would transfer all of its assets to Municipal Bond in exchange for
Municipal Bond's assumption of Intermediate Tax Free's stated liabilities
and the issuance of Institutional shares of Municipal Bond to be
distributed pro rata to Intermediate Tax Free shareholders.
FOR[] AGAINST [] ABSTAIN []
II. To consider and vote upon such other business as may properly come before
the Special Meeting and any adjournment or adjournments thereof.
FOR [] AGAINST [] ABSTAIN []
Receipt of the notice and the Proxy Statement dated June 23, 2000 (the "Proxy
Statement"), is hereby acknowledged.
______________________________________________________________________________
PLEASE SIGN AND DATE BELOW AND MAIL THIS PROXY CARD PROMPLY USING THE ENCLOSED
________
ENVELOPE.
_________________________________________
(Title or Authority)
__________________________________________
(Signature)
__________________________________________
(Signature)
Dated: [____________________________], 2000
(Joint owners should EACH sign. Please sign EXACTLY as
your name(s) appears on this card. When signing as
attorney, trustee, executor, administrator, guardian or
corporate officer, please give your FULL title below.)
________________________________________________________________________
YOUR VOTE IS IMPORTANT, PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
<PAGE>
The Registrant incorporates by reference Mid Cap's prospectus dated January 31,
2000, and Mid Cap's annual report dated September 30, 1999 filled as a
Pre-Effective Amendment no. 1 Registration Statement on Form N-14AE/A on June 8,
2000 (accession number 0000950 168-00-001498).
