<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
BT ADVISOR FUNDS
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
August 23, 1999
Dear Shareholder:
On June 4, 1999, Bankers Trust merged with Deutsche Bank A.G. As a result
of the merger, we are asking shareholders of BT Mutual Funds to approve new ad-
visory agreements. Enclosed is further information relating to these changes,
including a Questions & Answers section and proxy card(s).
Important information about the changes:
. The merger has no effect on the number of shares you own or the
value of those shares.
. The advisory fees payable under the new advisory agreements have
not increased.
. The investment objective and policies of your mutual fund invest-
ment have not changed.
In addition to the change in advisory agreements, shareholders are also
being asked to approve other changes outlined in the enclosed Proxy Statement.
The Board of Trustees of your BT Mutual Fund believes that the proposals are
important and recommends that you read the enclosed materials carefully and
then vote for all proposals.
---
What you need to do:
. Read all enclosed materials including the Questions & Answers
section.
. Choose one of the following options to vote:
1. By Mail: Complete the enclosed proxy card and return in
postage-paid envelope provided.
2. By Telephone: Call the Toll-Free # on your proxy card.
3. By Internet: Logon to www.proxyvote.com.
4. Attend Shareholder Meeting (details enclosed).
Please note: if you own shares of more than one Fund, you will receive more
than one proxy card. Please sign and return each proxy card you receive.
Sincerely,
/s/ Daniel O. Hirsch
Daniel O. Hirsch
Secretary
BT Mutual Funds
<PAGE>
QUESTIONS AND ANSWERS
IMPORTANT NEWS
FOR SHAREHOLDERS OF BT ADVISOR FUNDS
Here is a brief overview of some matters affecting your Fund which require
a shareholder vote. We encourage you to read the full text of the enclosed
Proxy Statement, and to vote your shares.
Q. What has happened to require a shareholder vote?
A. On June 4, 1999, Bankers Trust became a subsidiary of Deutsche Bank
A.G. The combined entity now ranks as the fourth largest investment
manager in the world with $670-billion in assets in a full range of
active and index strategies.
To ensure that Bankers Trust or an affiliate may continue to serve as
investment adviser of the BT Mutual Funds, we are seeking shareholder
approval of new advisory agreements.
THE BOARD MEMBERS OF YOUR FUND RECOMMEND THAT YOU VOTE FOR THESE PRO-
POSALS.
Q. Why am I being asked to vote on the new advisory agreements?
A. The Investment Company Act, which regulates investment companies in the
United States such as your BT Mutual Fund, requires a shareholder vote
to approve a new advisory agreement following certain types of business
combinations. Each of the new advisory agreements became effective
immediately upon consummation of the merger and will continue in effect
only upon shareholder approval.
Q. How does the merger affect my BT Mutual Fund?
A. Your BT Mutual Fund and its respective investment objectives have not
changed as a result of the merger. You still own the same shares in the
same Fund as you did prior to the merger. Each of the new advisory
agreements contains substantially the same terms and conditions as the
agreement in effect prior to the merger, except for the dates of
execution and termination. If shareholders do not approve the new
advisory agreements, the agreements will no longer continue and the
governing Boards of your Fund will take such action as they deem to be
in the best interests of the Fund, and their respective shareholders.
Q. Have the investment advisory fees remained the same?
A. Yes.
1
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Q. What are the benefits of the merger?
A. There are several potential positive aspects of the merger you may be
interested in. Most notably, the combined institution will be one of
the largest financial institutions in the world, as well as a leader in
a number of important categories, including asset management. The
financial strength of the combined institution coupled with the
increased breadth and depth of its resources and capabilities are
advantages the acquisition brings. Further, as a truly global
institution, the combined entity will be in a unique position to
provide coverage, services and products.
Q. How does the Board of Trustees of my BT Mutual Fund recommend that I
vote?
A. After careful consideration, the Board of Trustees of your BT Mutual
Fund recommends that you vote in favor of all the proposals on the
enclosed proxy card(s).
Q. Whom do I call for more information?
A. If you need more information, please call Shareholder Communications
Corporation, your Fund's information agent, at 1-800-732-6168.
Q. How can I vote my shares?
A. You may choose from one of the following options to vote your shares:
. By mail, with the enclosed proxy card(s) and return envelope.
. By telephone, with a toll-free call to the telephone number that
appears on your proxy card.
. Through the Internet, by using the Internet address located on
your proxy card and following the instructions on the site.
. In person at the shareholder meeting (see details enclosed in
proxy statement).
Q. Will my BT Mutual Fund pay for the proxy solicitation and legal costs
associated with this transaction?
A. No, Bankers Trust will bear these costs.
Q. What happens if I own shares in more than one BT Mutual Fund?
A. If you have more than one BT Mutual Fund in your name at the same
address, you will receive separate proxy cards for each Fund but only
one proxy statement for the account.
Please vote all issues on each proxy card that you receive. Thank you for
mailing your proxy card(s) promptly.
2
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BT ADVISOR FUNDS
EAFE(R) Equity Index Fund ("EAFE Fund")
Small Cap Index Fund ("Small Cap Fund")
U.S. Bond Index Fund ("Bond Fund")
One South Street
Baltimore, Maryland 21202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held October 8, 1999
A Special Meeting of shareholders of BT Advisor Funds (the "Trust") will
be held at the offices of BT Alex. Brown Incorporated, 30th Floor, Baltimore,
Maryland 21202 on October 8, 1999 at 11:00 a.m. (the "Special Meeting"). The
Trust is an open-end management investment company, organized under the laws
of the Commonwealth of Massachusetts, that is comprised of the above three se-
ries (each a "Fund," and collectively, the "Funds"). Each Fund consists of an
institutional class and an advisory class. The advisory class of each Fund is
not active at this time. Each Fund operates as a feeder fund in a master-
feeder fund arrangement with a corresponding master fund portfolio (each a
"Portfolio," and collectively, the "Portfolios"). As feeder funds, each Fund
seeks to achieve its respective investment objectives by investing all of its
investable assets in a corresponding Portfolio with the same investment objec-
tive and policies. The Portfolios in which the Funds invest are organized as
separate series of BT Investment Portfolios, an open-end management investment
company established as a trust under the laws of the State of New York. Pursu-
ant to the requirements of the Investment Company Act of 1940, as amended, ap-
plicable to master-feeder arrangements, each Fund's voting rights with respect
to the Portfolio interests that it holds must be passed through to the Fund's
own shareholders.
The Special Meeting is being held to consider and vote on the following
matters for each Fund, as indicated below and more fully described under the
corresponding Proposals in the Proxy Statement, and such other matters as may
properly come before the meeting or any adjournments thereof:
PROPOSAL I: To approve or disapprove new investment advisory
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(All Funds) agreements (each a "New Advisory Agreement" and
collectively the "New Advisory Agreements") for
each Fund's corresponding Portfolio:
A. To approve or disapprove a New Advisory
Agreement between each Fund's corresponding
Portfolio and Bankers Trust Company ("Bankers
Trust").
B. To approve or disapprove a New Advisory
Agreement between each Fund's corresponding
<PAGE>
Portfolio and Morgan Grenfell Inc. ("MGI") to be
implemented within two years of the date of the
Special Meeting upon approval of the members of
the Trust's and the Portfolio's Boards of Trust-
ees, respectively, who are not "interested per-
sons" ("Independent Trustees") (as defined in the
Investment Company Act of 1940, as amended).
C. To approve or disapprove a new sub-
invesment advisory agreement (the "New Sub-
advisory Agreements," which term, unless other-
wise specified, is included within the meaning of
New Advisory Agreements) among each Fund's corre-
sponding Portfolio, MGI and Bankers Trust under
which Bankers Trust may perform certain of MGI's
responsibilities, at MGI's expense, under the ap-
plicable New MGI Advisory Agreement with the ap-
plicable Portfolio upon approval of the Indepen-
dent Trustees of the Trust and the Portfolio.
PROPOSAL II: To elect Trustees of the Trust and the Portfolios
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(All Funds) to hold office until their respective successors
have been duly elected and qualified or until
their earlier resignation or removal.
PROPOSAL III: To ratify or reject the selection of
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(All Funds) PricewaterhouseCoopers LLP as the independent ac-
countants for the Funds and their corresponding
Portfolios for the current fiscal year.
The appointed proxies will vote in their discre-
tion on any other business as may properly come
before the Special Meeting or any adjournment
thereof.
The New Advisory Agreements described in Proposals IA, IB and IC, respec-
tively, will contain substantially the same terms and conditions, except for
the parties and the dates of execution, effectiveness and initial term, as the
prior investment advisory agreements pursuant to which services were provided
to the Portfolios. In addition, the form of New Sub-advisory Agreement autho-
rizes the applicable investment adviser to adjust the duties, the amount of as-
sets to be managed and the fees paid to the investment subadviser with and upon
the approval of the Boards and the Independent Trustees. As more fully dis-
cussed in the accompanying Proxy Statement, approval of the New Advisory Agree-
ments, which provide for the same services to be provided at the same fees, is
generally occasioned by the merger of Circle Acquisition Corporation, a
2
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wholly owned subsidiary of Deutsche Bank A.G. ("Deutsche Bank"), with and into
Bankers Trust Corporation, the parent company of Bankers Trust. MGI is, and as
a result of this transaction, Bankers Trust became, an indirect wholly owned
subsidiary of Deutsche Bank. The New Advisory Agreements with MGI described in
Proposal IB and the New Sub-advisory Agreements with Bankers Trust described in
Proposal IC will permit Deutsche Bank, upon the approval of the Independent
Trustees of the Trust and the Portfolios, to simplify the organizational struc-
ture of its U.S. mutual fund operations, enhance the efficiency of their admin-
istration and promote consistency of internal controls, compliance and regula-
tory oversight. The deferral in implementing the New Advisory Agreements with
MGI is needed to permit Deutsche Bank a sufficient amount of time (which will
vary for different Portfolios) to plan, prepare and institute the necessary ar-
rangements for MGI to consolidate Deutsche Bank's U.S. mutual fund operations.
The close of business on July 22, 1999 has been fixed as the record date
for the determination of the shareholders of each Fund entitled to notice of,
and to vote at, the Special Meeting. You are cordially invited to attend the
Special Meeting.
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT OR THE PROCEDURES
TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT SHAREHOLDER COM-
MUNICATIONS CORPORATION AT 1-800-732-6168.
This notice and related proxy material are first being mailed to sharehold-
ers on or about August 23, 1999. This proxy is being solicited on behalf of the
Board of Trustees of the Trust.
By Order of the Board of Trustees,
/s/ Daniel O. Hirsch
Daniel O. Hirsch, Secretary
New York, New York
August 23, 1999
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WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE COM-
PLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN
THE ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR
SHARES (UNLESS YOU ARE VOTING BY TELEPHONE OR THROUGH THE
INTERNET). NO POSTAGE NEED BE AFFIXED IF THE PROXY
CARD IS MAILED IN THE UNITED STATES.
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3
<PAGE>
BT Advisor Funds
EAFE(R) Equity Index Fund ("EAFE Fund")
Small Cap Index Fund ("Small Cap Fund")
U.S. Bond Index Fund ("Bond Fund")
One South Street
Baltimore, Maryland 21202
PROXY STATEMENT FOR THE SPECIAL MEETING
OF SHAREHOLDERS
October 8, 1999
This Joint Proxy Statement ("Proxy Statement") is being furnished in con-
nection with the solicitation of proxies by the Board of Trustees of BT Advisor
Funds (the "Trust") with respect to the above three series thereof (each a
"Fund," and collectively, the "Funds") for use at the special meeting of the
Trust to be held at the offices of BT Alex. Brown Incorporated, One South
Street, 30th Floor, Baltimore, Maryland 21202 on October 8, 1999 at 11:00 a.m.
(the "Special Meeting") and at any adjournments thereof. This Proxy Statement
and accompanying proxy card(s) ("Proxy") are expected to be mailed to share-
holders on or about August 23, 1999.
Each Fund operates as a feeder fund in a master-feeder fund arrangement
with a corresponding master fund portfolio (each a "Portfolio," and collective-
ly, the "Portfolios"). The Portfolios in which the Funds invest are organized
as separate series of BT Investment Portfolios ("BT Portfolios"), an open-end
management investment company established as a trust under the laws of the
State of New York. As feeder funds, each Fund seeks to achieve its respective
investment objectives by investing all of its investable assets in a corre-
sponding Portfolio with the same investment objectives and policies.
For simplicity, actions are described in this Proxy Statement as being
taken by a Fund, which is a series of the Trust, although all actions are actu-
ally taken by the Trust on behalf of the applicable series or Fund. Some ac-
tions described as taken by or with respect to a Fund are actually actions to
be taken by the corresponding Portfolio in which the Fund invests all of its
assets and on which the Fund votes as a shareholder. Further, actions described
as being taken by the shareholders of the Trust with respect to its Board of
Trustees will also be taken by the Funds as shareholders of the Portfolios with
respect to the Portfolios' respective Boards of Trustees. Your vote and the
vote of other shareholders of the relevant Fund determines how the Fund will
vote with respect to itself and its corresponding Portfolio. See "Background."
The Special Meeting is being held to consider and vote on the following
matters for each Fund, as indicated below and described more fully under the
<PAGE>
corresponding Proposals discussed herein, and such other matters as may prop-
erly come before the meeting or any adjournments thereof:
PROPOSAL I: To approve or disapprove new investment advisory
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(All Funds) agreements (each a "New Advisory Agreement" and
collectively the "New Advisory Agreements") for
each Fund's corresponding Portfolio:
A. To approve or disapprove a New Advisory
Agreement between each Fund's corresponding Port-
folio and Bankers Trust Company ("Bankers Trust")
(the "New BT Advisory Agreements").
B. To approve or disapprove a New Advisory
Agreement between each Fund's corresponding Port-
folio and Morgan Grenfell Inc. ("MGI" and, to-
gether with Bankers Trust, the "Advisers") (the
"New MGI Advisory Agreements") to be implemented
within two years of the date of the Special Meet-
ing upon approval of the members of the Trust's
and the Portfolio's Boards of Trustees, respec-
tively, who are not "interested persons" thereof
("Independent Trustees") (as defined in the In-
vestment Company Act of 1940, as amended (the
"Act")).
C. To approve or disapprove a new sub-invest-
ment advisory agreement (the "New Sub-advisory
Agreements," which term, unless otherwise speci-
fied, is included within the meaning of New Advi-
sory Agreements) among each Fund's corresponding
Portfolio, MGI and Bankers Trust under which
Bankers Trust may perform certain of MGI's re-
sponsibilities, at MGI's expense, under the ap-
plicable New MGI Advisory Agreement with the ap-
plicable Portfolio upon approval of the Indepen-
dent Trustees of the Trust and the Portfolio.
PROPOSAL II: To elect Trustees of the Trust and the Portfolios
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(All Funds) to hold office until their respective successors
have been duly elected and qualified or until
their earlier resignation or removal.
PROPOSAL III: To ratify or reject the selection of
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(All Funds) PricewaterhouseCoopers LLP as the independent
accountants for the applicable Funds and their
corresponding Portfolios for the current fiscal
year.
2
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The appointed proxies will vote on any other business as may properly come
before the Special Meeting or any adjournment thereof.
The Funds' shareholders are to consider the approval of New Advisory
Agreements for each Fund's corresponding Portfolio, as indicated in the table
below:
<TABLE>
<CAPTION>
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Fund Corresponding Portfolio
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<S> <C>
EAFE Fund EAFE(R) Equity Index Portfolio ("EAFE Portfolio")
------------------------------------------------------------------
Small Cap Fund Small Cap Index Portfolio ("Small Cap Portfolio")
------------------------------------------------------------------
Bond Fund U.S. Bond Index Portfolio ("Bond Portfolio")
------------------------------------------------------------------
</TABLE>
The shareholders of the Trust are also to consider the election of Charles
P. Biggar, S. Leland Dill, Martin J. Gruber, Richard Hale, Richard J. Herring,
Bruce E. Langton, Philip Saunders, Jr. and Harry Van Benschoten (the "Trustee
Nominees") as Trustees of the Trust and Portfolios./1/ Drs. Herring and Gruber
and Messrs. Langton and Van Benschoten currently serve on the Board of the
Trust and Messrs. Dill and Saunders currently serve on the Board of the Port-
folios (collectively, the "Boards") and serve as Trustees of various other in-
vestment companies within the Bankers Trust family of funds. To ensure adher-
ence by the Trust and the Portfolios with Section 15(f) of the Act, only Mr.
Hale will be an "interested person" (within the meaning of Section 2(a)(19) of
the Act) of the Funds or Portfolios following the Merger (as defined herein)
and the approval of the New Advisory Agreements.
Notice of the Special Meeting and a Proxy accompany this Proxy Statement.
Proxy solicitations will be made primarily by mail, but solicitations may also
be made by telephone, telegraph, through the Internet or in person by officers
or agents of the Funds. All costs of solicitation, including (a) printing and
mailing of this Proxy Statement and accompanying material, (b) the reimburse-
ment of brokerage firms and others for their expenses in forwarding solicita-
tion material to the beneficial owners of the Funds' shares, (c) payment to
Shareholder Communications Corporation for its services in soliciting proxies
and (d) supplementary solicitations to submit Proxies, will be borne by Bank-
ers Trust. If the Funds record votes by telephone or through the Internet,
they will use procedures designed to authenticate shareholders' identities, to
allow shareholders to authorize the voting of their shares in accordance with
their instructions, and to confirm that their instructions have been properly
recorded. Proxies voted by telephone or through the Internet may be revoked at
any time before they are voted in the same manner that proxies voted by mail
may be revoked.
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/1/ Unless otherwise indicated, references in this Proxy Statement to the
"Trustee Nominees" include the Trustee Nominees of both the Trust and the
Portfolios.
3
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The Annual Report of each Fund containing audited financial statements for
the fiscal year ended December 31, 1998 as well as the Semi-Annual Report of
each Fund (each a "Report"), have previously been furnished to the Funds' re-
spective shareholders. An additional copy of each Report will be furnished
without charge upon request by writing to the Trust at the address set forth
on the cover of this Proxy Statement or by calling 1-800-368-4031.
If the enclosed Proxy is properly executed and returned in time to be
voted at the Special Meeting, the shares represented thereby will be voted in
accordance with the instructions marked on the Proxy. Shares of a Fund are en-
titled to one vote each at the Special Meeting and fractional shares are enti-
tled to proportionate shares of one vote.
If no instructions are marked on the Proxy with respect to a specific Pro-
posal, the Proxy will be voted "FOR" the approval of such Proposal and in ac-
cordance with the judgment of the persons appointed as proxies with respect to
any other matter that may properly come before the Special Meeting. Any share-
holder giving a Proxy has the right to attend the Special Meeting to vote
his/her shares in person (thereby revoking any prior Proxy) and also the right
to revoke the Proxy at any time by written notice received by the applicable
Fund prior to the time it is voted.
Bankers Trust will vote any shares in accounts as to which it has invest-
ment authority, and shares in any other accounts as to which Bankers Trust is
the agent of record, which are not otherwise represented in person or by proxy
at the Special Meeting. Bankers Trust will vote shares of each Fund over which
it has investment discretion in accord with its fiduciary and other legal ob-
ligations, and in its discretion may consult with the beneficial owners or
other fiduciaries. Bankers Trust will vote shares of each Fund for which it is
the owner of record but does not have investment discretion, with respect to
each Proposal on which shareholders of the applicable Fund are entitled to
vote, which are not otherwise represented in person or by proxy at the Special
Meeting. These shares will be voted by Bankers Trust for, against, or ab-
staining, in the same proportion as the votes cast by holders of all shares in
the Fund otherwise represented at the Special Meeting. This practice is com-
monly referred to as "mirror" or "echo" voting.
In the event that a quorum is not present at the Special Meeting, or if a
quorum is present but sufficient votes to approve a Proposal are not received,
the persons named as proxies may propose one or more adjournments of the Spe-
cial Meeting to permit further solicitation of Proxies with respect to the
Proposal. In determining whether to adjourn the Special Meeting, the following
factors may be considered: the nature of the proposals that are the subject of
the Special Meeting, the percentage of votes actually cast, the percentage of
negative votes actually cast, the nature of any further solicitation and the
information to be provided to shareholders with respect to the reasons for the
solicitation. Any
4
<PAGE>
adjournment will require the affirmative vote of a majority of those shares
represented at the Special Meeting in person or by Proxy. The persons named as
proxies will vote those Proxies that they are entitled to vote "FOR" any Pro-
posal in favor of an adjournment and will vote those Proxies required to be
voted "AGAINST" any such Proposal against any adjournment. A shareholder vote
may be taken on one or more of the Proposals in the Proxy Statement prior to
any adjournment if sufficient votes have been received and it is otherwise ap-
propriate. A quorum of shareholders is constituted by the presence in person
or by proxy of the holders of a majority of the outstanding shares of the
Trust or a Fund thereof (as applicable) entitled to vote at the Special Meet-
ing. For purposes of determining the presence of a quorum for transacting
business at the Special Meeting, abstentions and broker "non-votes" (that is,
proxies from brokers or nominees indicating that these persons have not re-
ceived instructions from the beneficial owner or other persons entitled to
vote shares on a particular matter with respect to which the brokers or nomi-
nees do not have discretionary power) will be treated as shares that are pres-
ent but which have not been voted. (See "Vote Required" for a further discus-
sion of abstentions and broker non-votes.)
Shareholders of record at the close of business on July 22, 1999 (the
"Record Date") are entitled to notice of, and to vote at, the Special Meeting.
As of the Record Date, the following number of shares of each Fund were issued
and outstanding:
<TABLE>
<S> <C>
EAFE Fund 5,195,253.334 shares
Small Cap Fund 8,323,665.347 shares
Bond Fund 5,876,247.627 shares
</TABLE>
This Proxy Statement is being used in order to reduce the preparation,
printing, handling and postage expenses that would result from the use of a
separate statement for each Fund and, because shareholders may own shares of
more than one Fund, the combined statement may avoid burdening shareholders
with more than one proxy statement. To the extent information relating to com-
mon ownership is available to the Funds, a shareholder that owns of record
shares in two or more of the Funds will receive a package containing a Proxy
Statement and Proxies for the Funds in which such shareholder is a record own-
er. If the information relating to common ownership is not available to the
Funds, a shareholder that beneficially owns of record shares in two or more
Funds may receive two or more packages each containing a Proxy Statement and a
Proxy for each Fund in which the shareholder is a beneficial owner. It is es-
sential that shareholders complete, date, sign and return each enclosed Proxy
(unless a shareholder is voting by telephone or through the Internet).
5
<PAGE>
In order that your shares may be represented, you are requested to (unless
you are voting by telephone or through the Internet):
. indicate your instructions on the Proxy (or Proxies);
. date and sign the Proxy (or Proxies); and
. mail the Proxy (or Proxies) promptly in the enclosed envelope.
Beneficial Ownership of Shares of the Funds
Annex I attached hereto sets forth information as of the Record Date re-
garding the beneficial ownership of the Funds' shares by (i) the only persons
known by each Fund to beneficially own more than five percent of the outstand-
ing shares of the Fund, (ii) the Trustees and Trustee Nominees, (iii) the ex-
ecutive officers of each Fund, and (iv) the Trustees and executive officers of
each Fund as a group. The number of shares beneficially owned by each Trustee,
Trustee Nominee or executive officer is determined under rules of the Securi-
ties and Exchange Commission (the "Commission"), and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
these rules, beneficial ownership includes any shares as to which the individ-
ual has the sole or shared voting power or investment power and also any
shares which the individual has the right to acquire within 60 days of the
Record Date through the exercise of any stock option or other right. Unless
otherwise indicated, each person has sole investment and voting power (or
shares this power with his or her spouse) with respect to the shares set forth
in Annex I. The inclusion herein of any shares deemed beneficially owned does
not constitute an admission of beneficial ownership of the shares.
Collectively, the Trustees and officers of the Trust own less than 1% of
each Fund's outstanding shares.
Background
Master-Feeder Structure. Shareholders of the Funds are being asked to ap-
prove the New Advisory Agreements, as applicable, and to elect new Boards of
Trustees of the Trust and the Portfolios (together, the "Boards"). As indi-
cated earlier, each Fund operates as a feeder fund in a master-feeder fund ar-
rangement with the Portfolios, which serve as master funds. As feeder funds,
the Funds seek to achieve their respective investment objectives by investing
all of their investable assets in a corresponding Portfolio with the same in-
vestment objectives and policies. The Portfolios invest directly in investment
securities and other investments. Pursuant to the requirements of the Act ap-
plicable to master-feeder arrangements, each Fund's voting rights with respect
to the Portfolio shares that it holds must be passed through to the Fund's own
shareholders. Other
6
<PAGE>
feeder funds of a particular Portfolio will also vote in accordance with their
respective charters and/or other applicable requirements with respect to the
approval of the applicable New Advisory Agreement(s), the election of Trustees
of the Portfolios and the ratification of the Portfolios' independent accoun-
tants.
The Portfolios. As indicated earlier, the Portfolios are separate series
of BT Portfolios. Bankers Trust, a banking corporation organized under the
laws of the State of New York, located at 130 Liberty Street (One Bankers
Trust Plaza), New York, New York 10006, serves as the investment adviser, cus-
todian and administrator of each Portfolio. Bankers Trust is a wholly owned
subsidiary of Bankers Trust Corporation ("BT Corporation"), located at 130
Liberty Street (One Bankers Trust Plaza), New York, New York 10006, a regis-
tered bank holding company organized under the laws of the State of New York.
As discussed later in this Proxy Statement, as a result of the Merger (as de-
fined herein), BT Corporation became a wholly owned subsidiary of Deutsche
Bank A.G. ("Deutsche Bank"), located at 31 West 52nd Street, New York, New
York 10019. ICC Distributors, Inc., located at Two Portland Square, Portland,
Maine 04101, serves as the principal underwriter of each Portfolio. ICC Dis-
tributors, Inc. is not affiliated with Bankers Trust, Deutsche Bank, or any of
their affiliates.
7
<PAGE>
PROPOSALS IA, IB AND IC
APPROVAL OF NEW ADVISORY AGREEMENTS
The New Advisory Agreements will contain substantially the same terms and
conditions, except for the parties and the dates of execution, effectiveness
and initial term, as the prior investment advisory agreements pursuant to
which services were provided to the Portfolios. In addition, the form of New
Sub-advisory Agreement authorizes the applicable investment adviser to adjust
the duties, the amounts of assets to be managed and the fees paid to the in-
vestment subadviser with and upon the approval of the Board and the Indepen-
dent Trustees. As more fully discussed below, approval of the New Advisory
Agreements, which provide for the same services to be provided at the same
fees, is generally occasioned by the Merger (as defined herein) pursuant to
which Bankers Trust became an indirect subsidiary of Deutsche Bank. The New
MGI Advisory Agreements described in Proposal IB and the New Sub-advisory
Agreements with Bankers Trust described in Proposal IC will permit Deutsche
Bank, upon the approval of the Independent Trustees of the Trust and the ap-
plicable Portfolio, to simplify the organizational structure of its U.S. mu-
tual fund operations, enhance the efficiency of their administration and pro-
mote consistency of internal controls, compliance and regulatory oversight.
The deferral in implementing the New MGI Advisory Agreements is needed to per-
mit Deutsche Bank a sufficient amount of time (which will vary for different
Portfolios) to plan, prepare and institute the necessary arrangements for MGI
to consolidate Deutsche Bank's U.S. mutual fund operations.
The Prior Advisory Agreements
The Prior Advisory Agreements. Prior to June 4, 1999, Bankers Trust served
as investment adviser to each of the Portfolios (as discussed earlier) pursu-
ant to separate investment advisory agreements between Bankers Trust and the
applicable Portfolios (the "Prior Advisory Agreements"). The Prior Advisory
Agreements were initially approved by the Boards of the applicable Portfolio
and the Trust, including a majority of the Independent Trustees of the Portfo-
lio or the Trust, respectively.
The following table lists: (i) the date of each Prior Advisory Agree-
ment; (ii) the most recent date on which each Prior Advisory Agreement was ap-
proved by the applicable Portfolio's Trustees, including a majority of the In-
dependent Trustees, and shareholders; (iii) the most recent date on which each
Prior Advisory Agreement was approved by the applicable Fund's Trustees, in-
cluding a majority of the Independent Trustees, and shareholders; and (iv) the
amount paid by the Portfolios to Bankers Trust for services rendered pursuant
to the Prior Advisory Agreements (for each Portfolio's last fiscal year):
8
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------
<CAPTION>
Date of Prior
Portfolio Advisory Date Last Approved Date Last Approved
(Fiscal Year) Agreement By Portfolio's By Fund's Fee
- -------------------------------------------------------------------------------------
Trustees Shareholders* Trustees Shareholders*
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EAFE Portfolio
(12/31/98) 4/28/93 3/8/99 4/28/93 3/8/99 4/28/93 $6,594
- -------------------------------------------------------------------------------------
Small Cap
Portfolio
(12/31/98) 4/28/93 3/8/99 4/28/93 3/8/99 4/28/93 $151,232
- -------------------------------------------------------------------------------------
Bond Portfolio
(12/31/98) 4/28/93 3/8/99 4/28/93 3/8/99 4/28/93 $67,925
- -------------------------------------------------------------------------------------
</TABLE>
- -----------
* Shareholders voted to approve the Prior Advisory Agreements on their
respective dates of inception.
The Merger. On November 30, 1998, BT Corporation, Deutsche Bank and Circle
Acquisition Corporation entered into an Agreement and Plan of Merger (the
"Merger Agreement"). Pursuant to the terms of the Merger Agreement, Circle Ac-
quisition Corporation, a wholly owned New York subsidiary of Deutsche Bank,
merged with and into BT Corporation on June 4, 1999, with BT Corporation con-
tinuing as the surviving entity (the "Merger"). Under the terms of the Merger,
each outstanding share of BT Corporation common stock was converted into the
right to receive $93 in cash, without interest. Since the Merger, BT Corpora-
tion, along with its affiliates, has continued to offer the range of financial
products and services, including investment advisory services, that it offered
prior to the Merger.
As a result of the Merger, BT Corporation became a wholly owned subsidiary
of Deutsche Bank. Deutsche Bank is a banking company with limited liability
organized under the laws of the Federal Republic of Germany. Deutsche Bank is
the parent company of a group consisting of banks, capital markets companies,
fund management companies, mortgage banks, a property finance company, in-
stallment financing and leasing companies, insurance companies, research and
consultancy companies and other domestic and foreign companies (the "Deutsche
Bank Group"). At March 31, 1999, the Deutsche Bank Group had total assets of
US $727 billion. The Deutsche Bank Group's capital and reserves at March 31,
1999, were US $19.6 billion.
Impact of the Merger on the Prior Advisory Agreements. Section 15(a) of
the Act provides, in pertinent part, that "[i]t shall be unlawful for any per-
son to serve or act as investment adviser of a registered investment company,
except pursuant to a written contract, which contract, whether with such reg-
istered company or with an investment adviser of such registered company, has
been approved by the vote of a majority of the outstanding voting securities
of such registered company . . . ." Section 15(a)(4) of the Act further re-
quires that such written contract provide for automatic termination in the
event of its assignment. Section 2(a)(4)
9
<PAGE>
of the Act defines "assignment" to include any direct or indirect transfer of a
contract by the assignor.
While it may be argued otherwise, consummation of the Merger may have re-
sulted in an "assignment" of the Prior Advisory Agreements within the meaning
of the Act, terminating the agreements according to their respective terms and
the Act as of June 4, 1999. Specifically, as Bankers Trust is a wholly owned
subsidiary of BT Corporation, the merger of Circle Acquisition Corporation with
and into BT Corporation could be deemed to have resulted in an "assignment" of
the Prior Advisory Agreements with Bankers Trust.
On May 25, 1999, Bankers Trust was granted an exemptive order (the
"Exemptive Order") by the Commission permitting implementation, without ob-
taining prior shareholder approval, of the New BT Advisory Agreements during an
interim period commencing on the date of the closing of the Merger and continu-
ing, for a period of up to 150 days, through the date on which each of the New
BT Advisory Agreements are approved or disapproved by the respective sharehold-
ers of each Portfolio (the "Interim Period"). Under the terms of the Exemptive
Order, Bankers Trust was allowed to receive advisory fees during the Interim
Period pursuant to the New BT Advisory Agreements, provided that these fees
would be held in escrow pending shareholder approval of the New BT Advisory
Agreements. In accordance with the Exemptive Order, the advisory fees charged
to the Portfolios and paid to Bankers Trust under the New BT Advisory Agree-
ments have been held in an interest-bearing escrow account and the Portfolios
expect to continue to deposit these fees in such account until approval of the
New BT Advisory Agreements by the respective shareholders of the Portfolios has
been obtained. If the New BT Advisory Agreements are not approved by the share-
holders by the expiration of the Interim Period, the fees held in escrow will
be remitted to the applicable Fund. As of June 30, 1999, the amount in escrow
for EAFE Fund totalled $10,642.25, for Small Cap Fund totalled $0 and for Bond
Fund totalled $1,940.64.
The Funds, as shareholders of the Portfolios, are not being asked to ap-
prove or disapprove the Merger or the Merger Agreement; rather, they are being
asked under these Proposals to approve and continue the New BT Advisory Agree-
ments and to approve the New Advisory Agreements for the Portfolios. Other than
the parties and the dates of execution, effectiveness, and initial term of the
agreements, the New Advisory Agreements contain substantially the same terms
and conditions as the Prior Advisory Agreements. In addition, the form of New
Sub-advisory Agreement authorizes the applicable investment adviser to adjust
the duties, the amount of assets to be managed and the fees paid to the invest-
ment subadviser with and upon the approval of the Board and the Independent
Trustees. The advisory fee rates charged to the Portfolios under the Prior Ad-
visory Agreements have continued to apply under the New BT Advisory Agreements
and would continue to apply under the New MGI Advisory Agree-
10
<PAGE>
ments. MGI, and not the Portfolios, would be solely responsible for paying the
sub-advisory fees, which may vary from time to time as approved by the Indepen-
dent Trustees. The subadvisory fees would be paid by MGI directly to the
subadviser. In addition, the Advisers have advised the Portfolios that they can
expect to continue to receive the same level and quality of services under the
New Advisory Agreements as they received under the Prior Advisory Agreements.
The Advisers have represented to the Boards that in the event of any material
change in the investment management personnel of the Advisers responsible for
providing services to the Funds, the Advisers will apprise and consult with the
relevant Board or Boards to ensure that the applicable Board, including a ma-
jority of the Board's Independent Trustees, is satisfied that the services pro-
vided by the Advisers will not be diminished in scope and quality.
The New Advisory Agreements
The New Advisory Agreements. The form of the New Advisory Agreement and
Sub-advisory Agreement is attached to this Proxy Statement as Exhibit A. If
shareholders approve the New Advisory Agreements, each of the agreements will
remain in effect for an initial term of two years from its effective date, and
may be renewed annually thereafter by specific approval of the respective Board
or shareholders of the applicable Portfolio, provided that they are also ap-
proved by a majority of the Independent Trustees. The terms and conditions of
the New Advisory Agreements, other than the parties and their dates of execu-
tion, effectiveness and initial term, are substantially the same as those of
the Prior Advisory Agreements. The New BT Advisory Agreements and the New MGI
Advisory Agreements will be between the Trust and either Bankers Trust or MGI,
as applicable; the New Sub-advisory Agreements will be among the Trust, MGI (as
Adviser) and Bankers Trust (as subadviser). Each of the New BT Advisory Agree-
ments became effective as of June 4, 1999, the date of the consummation of the
Merger.
If the New MGI Advisory Agreements and/or the New Sub-advisory Agreements
are approved, Bankers Trust will continue to perform its advisory duties under
the New BT Advisory Agreements until the New MGI Advisory Agreements and/or the
New Sub-advisory Agreements, as applicable, are implemented. MGI, as Adviser,
and Bankers Trust, as subadviser, would perform its respective advisory duties
and be paid its respective advisory fees only upon implementation of the appli-
cable New Advisory Agreement.
Under the terms of the New Advisory Agreements, as under the Prior Advisory
Agreements, each of the Advisers agrees to furnish the Portfolios with invest-
ment advisory and other services in connection with a continuous investment
program for the Portfolios, including investment research and management with
respect to all securities, investments, cash and cash equivalents in the port-
folios. Subject to the supervision and control of the Portfolios' Boards, each
of the Ad-
11
<PAGE>
visers agrees to (a) conform to all applicable rules and regulations of the
Commission, including all applicable provisions of the Securities Act of 1933,
as amended (the "1933 Act"), the Securities Exchange Act of 1934 (the "Ex-
change Act"), the Act and the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and will conduct its activities under the New Advisory Agree-
ments in accordance with applicable regulations of the Board of Governors of
the Federal Reserve System pertaining to the investment advisory activities of
bank holding companies and their subsidiaries, (b) provide the services ren-
dered by it in accordance with the applicable Portfolio's investment objec-
tives and policies as stated in Prospectuses and Statements of Additional In-
formation of the relevant Funds, as from time to time in effect, and the Port-
folios' then current registration statements on Form N-1A as filed with the
Commission and the then current offering Memorandum if the Portfolio is not
registered under the 1933 Act, (c) place orders pursuant to its investment de-
terminations for each Portfolio either directly with the issuer or with any
broker or dealer selected by it, (d) determine from time to time what securi-
ties or other investments will be purchased, sold or retained by each Portfo-
lio, and (e) maintain books and records with respect to the securities trans-
actions of each Portfolio and render to the Board of Trustees of the Trust
such periodic and special reports as they may request.
The Advisory Fees. The investment advisory fee rate charged to the Portfo-
lios under the New BT Advisory Agreements and the New MGI Advisory Agreements
is the same as the investment advisory fee rate charged under the Prior Advi-
sory Agreements. As noted above, the investment advisory fee payable under the
New Sub-advisory Agreements would be paid by MGI, not the Portfolios, and may
vary from time to time, subject to the approval of the applicable Portfolio's
Board of Trustees, including a majority of its Independent Trustees.
As under the Prior Advisory Agreements, Bankers Trust or MGI, as applica-
ble, is paid a fee under the New Advisory Agreements for its services, calcu-
lated daily and paid monthly, equal, on an annual basis, to the following:
<TABLE>
<CAPTION>
Portfolio Advisory Agreement Fee*
-----------------------------------------------------------------------
<S> <C>
EAFE Portfolio 0.25%
-----------------------------------------------------------------------
Small Cap Portfolio 0.15%
-----------------------------------------------------------------------
Bond Portfolio 0.15%
-----------------------------------------------------------------------
</TABLE>
- -----------
* Pursuant to the Expense Limitation Agreement between Bankers Trust and the
Trust, the total fund operating expenses for each Fund are capped for the
current fiscal year. The fee rates shown do not reflect the cap.
Generally. If approved, the New Advisory Agreements, as applicable, will
remain in effect for an initial two year period (unless sooner terminated),
and shall remain in effect from year to year thereafter if approved annually
(1) by the Portfolios' Boards or by the holders of a majority of the Portfo-
lios' respective
12
<PAGE>
outstanding voting securities (i.e., in most cases, the Funds) and (2) by a ma-
jority of the Independent Trustees who are not parties to such contract or
agreement. Like the Prior Advisory Agreements, the New Advisory Agreements will
terminate upon assignment by any party and are terminable, without penalty, on
60 days' written notice by the Portfolios' Boards or by a "majority" vote of
the shareholders of the Portfolios (as defined in the Act) or upon 60 days'
written notice by the applicable Adviser.
The services of the Advisers are not deemed to be exclusive and nothing
in the New Advisory Agreements prevents them or their affiliates from providing
similar services to other investment companies and other clients (whether or
not their investment objectives and policies are similar to those of the Port-
folios) or from engaging in other activities. In addition, the Advisers are ob-
ligated to pay expenses associated with providing the services contemplated by
the New Advisory Agreements. The Portfolios bear certain other expenses includ-
ing the fees of the Portfolios' Boards. The Portfolios also pay any extraordi-
nary expenses incurred.
Under the New Advisory Agreements, each of the Advisers will exercise its
best judgment in rendering its advisory services. The Advisers shall not be li-
able for any error of judgment or mistake of law or for any loss suffered by
the Portfolios in connection with the matters to which the New Advisory Agree-
ments relate, provided that nothing therein shall be deemed to protect or pur-
port to protect the Advisers against any liability to the Portfolios or to its
shareholders to which the Advisers could otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on their part in the perfor-
mance of their duties or by reason of the Advisers' reckless disregard of their
obligations and duties under the New Advisory Agreements.
The Advisers
Bankers Trust. Bankers Trust is the principal banking subsidiary of BT Cor-
poration. Bankers Trust is a bank and, therefore, not required to register as
an investment adviser under the Advisers Act. Bankers Trust provides a broad
range of commercial banking and financial services, including originating loans
and other forms of credit, accepting deposits and arranging financings. Bankers
Trust also engages in trading currencies, securities, derivatives and commodi-
ties. In addition to providing investment advisory services to the Portfolios,
Bankers Trust serves as investment adviser to 31 other investment companies and
as investment subadviser to 34 other investment companies. (See Annex II for a
list of those investment companies that Bankers Trust advises that have invest-
ment objectives similar to those of the Portfolios, together with information
regarding the fees charged to those companies.) As of March 31, 1999, Bankers
Trust had over $313 billion of assets under management, including approximately
$315 million of assets in the Portfolios.
13
<PAGE>
The names, businesses addresses and principal occupations of the current
directors and chief executive officer of Bankers Trust are set forth below.
<TABLE>
<CAPTION>
Name and Address Principal Occupation
- -----------------------------------------------------------------
<S> <C>
Josef Ackermann Chairman of the Board, Chief Executive
Deutsche Bank A.G. Officer and President, Bankers Trust
Taunusanlage 12 Company; Member, Board of Managing
D-60262 Frankfurt am Directors, Deutsche Bank A.G.
Main Federal Republic
of Germany
Hans Angermueller Shearman & Sterling, of counsel
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
George B. Beitzel Director, Computer Task Group, Inc.;
29 King Street Director, Phillips Petroleum Company;
Chappaqua, NY 10514-3432 Director, TIG
Holdings Inc.
William R. Howell Chairman Emeritus, J.C. Penney Company,
J.C. Penney Company, Inc.; Director, Exxon Corporation;
Inc. Director, Halliburton Company; Director,
P.O. Box 10001 National Organization on Disability;
Dallas, TX 75301-1109 Director, National Retail Federation;
Director and Chairman, Southern
Methodist University Board of Trustees;
Director, Warner-Lambert Company;
Director, The Williams Companies, Inc.
Hermann-Josef Lamberti Member, Board of Managing Directors,
Deutsche Bank A.G. Deutsche
Taunusanlage 12 Bank A.G.
D-60262 Frankfurt am
Main Federal Republic of
Germany
John A. Ross Regional Chief Executive Officer,
Deutsche Bank A.G. Deutsche Bank Americas Holding Corp.
31 West 52nd Street
New York, NY 10019
Ronaldo H. Schmitz Member, Board of Managing Directors,
Deutsche Bank A.G. Deutsche
Taunusanlage 12 Bank A.G.
D-60262 Frankfurt am
Main Federal Republic of
Germany
- -----------------------------------------------------------------
</TABLE>
In addition to serving as investment adviser to the Portfolios, Bankers
Trust also serves as administrator, transfer agent and custodian of each Port-
folio and Fund. These services will continue to be provided by Bankers Trust
after approval of the New Advisory Agreements. (Annex III sets forth the fees
paid to Bankers Trust by the Portfolios and the Funds for these services for
the most recently completed fiscal year.)
14
<PAGE>
MGI. MGI is a corporation organized under the laws of the State of Dela-
ware and is a registered investment adviser under the Advisers Act. It is lo-
cated at 885 Third Avenue, 32nd Floor, New York, NY 10022. MGI provides a full
range of investment advisory services to institutional clients. MGI serves as
investment adviser to ten other investment companies and as investment
subadviser to five other investment companies. MGI is a subsidiary of Morgan
Grenfell Asset Management Ltd. ("MGAM"), located at 20 Finsbury Circus, Lon-
don, England, a wholly owned subsidiary of Deutsche Morgan Grenfell Group PLC,
located at 23 Great Winchester Street, London, England, an investment holding
company which is, in turn, a wholly owned subsidiary of Deutsche Bank. MGAM
currently manages approximately $16.5 billion for a wide range of pension,
corporate, insurance, local authority, government and private clients world-
wide. (See Annex II for a list of those investment companies that MGI advises
that have investment objectives similar to those of the Portfolios, together
with information regarding the fees charged to those companies.)
The names, business addresses and principal occupations of the current di-
rectors and chief executive officer of MGI are set forth below. Except as oth-
erwise indicated, the business address of the individuals named below is 885
Third Avenue, 32nd Floor, New York, NY 10022 and their positions at MGI con-
stitute their principal occupation.
<TABLE>
<CAPTION>
Name and Address Principal Occupation
- -----------------------------------------------------------------
<S> <C>
Richard Marin President and Director, Morgan Grenfell
280 Park Avenue Inc.; Managing Director, Bankers Trust
New York, NY 10017 Company
David Westover Baldt Executive Vice President and Director,
Morgan Grenfell Inc.
Joan A. Binstock Chief Operating Officer, Secretary,
Treasurer, and Director, Morgan Grenfell
Inc.
Audrey Mary Theresa Executive Vice President, Portfolio
Jones Manager and Director, Morgan Grenfell
Inc.
Robert H. Smith Chairman and Director, Morgan Grenfell
Inc; Chief Executive Officer, Morgan
Grenfell Asset Management; Chairman and
Chief Executive Officer, Morgan Grenfell
Development Capital
Steven Schneider Managing Director, Bankers Trust Company
280 Park Avenue
New York, NY 10017
- -----------------------------------------------------------------
</TABLE>
Section 15(f) of the Act
Section 15(f) of the Act provides that when a change of control of an in-
vestment adviser to an investment company occurs, the investment adviser or
any of
15
<PAGE>
its affiliated persons may receive an amount or benefit in connection therewith
as long as two conditions are satisfied.
First, no "unfair burden" may be imposed on the investment company as a re-
sult of the transaction relating to the change of control, or any express or
implied terms, conditions or understandings applicable thereto. As defined in
the Act, the term "unfair burden" includes any arrangement during the two (2)
year period after the change in control whereby the investment adviser (or
predecessor or successor adviser), or any "interested person" (as defined in
the Act) of such adviser, receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or its security holders
(other than fees for bona fide investment advisory or other services), or from
any person in connection with the purchase or sale of other property to, or on
behalf of the investment company (other than fees for bona fide brokerage and
principal underwriting services). The Advisers have advised the Boards that
there are no circumstances arising from the Merger that might result in an "un-
fair burden" (within the meaning of section 15(f) of the Act) being imposed on
the Portfolios. After conducting its reviews of the Advisers and of Bankers
Trust's performance, and after reviewing materials specifically provided by
Bankers Trust as a result of the termination of the Prior Advisory Agreements
and its request that the Board approve the New Advisory Agreements, the Boards
were satisfied that they had received and appropriately considered the relevant
factors and, after consultation with counsel, the Boards determined to approve
the New Advisory Agreements.
The second condition is that, during the three (3) year period immediately
following the Merger, at least 75% of the members of the Portfolios' Boards
must not be "interested persons" of the Advisers within the meaning of the Act.
All current members of the Boards are not, and have continued not to be since
the Merger, "interested persons" of the Advisers.
Additional Information
On March 11, 1999, Bankers Trust announced that it had reached an agreement
with the United States Attorney's Office in the Southern District of New York
to resolve an investigation concerning inappropriate transfers of unclaimed
funds and related record-keeping problems that occurred between 1994 and early
1996. Bankers Trust pleaded guilty to misstating entries in the bank's books
and records and agreed to pay a $63.5 million fine to state and federal author-
ities. On July 26, 1999, the federal criminal proceedings were concluded with
Bankers Trust's formal sentencing. The events leading up to the guilty pleas
did not arise out of the investment advisory or mutual fund management activi-
ties of Bankers Trust or its affiliates.
As a result of the plea, absent an order from the Commission, Bankers Trust
would not be able to continue to provide investment advisory services to the
16
<PAGE>
Portfolios or the Funds. The Commission has granted Bankers Trust a temporary
order under Section 9(c) of the Act to permit Bankers Trust and its affiliates
to continue to provide investment advisory services to registered investment
companies, and Bankers Trust, pursuant to Section 9(c) of the Act, has filed an
application for a permanent order. On May 7, 1999, the Commission extended the
temporary order under Section 9(c) of the Act until the Commission takes final
action on the application for a permanent order or, if earlier, November 8,
1999. However, there is no assurance that the Commission will grant a permanent
order. If the Commission refuses to grant a permanent order, shareholders will
receive supplemental proxy materials requesting approval to release any amounts
held in escrow up to the time of the refusal and such other action as deemed
appropriate by the Boards.
Recommendation of the Boards
At a meeting of the Boards held on March 8, 1999 called for the purpose of,
among other things, voting on approval of the New BT Advisory Agreements, the
Boards, including the Independent Trustees, unanimously approved the New BT Ad-
visory Agreements. In reaching this conclusion, the Boards obtained from BT
Corporation, Deutsche Bank and Bankers Trust such information as they deemed
reasonably necessary to approve Bankers Trust as investment adviser to the
Portfolios. Additionally, the Boards considered a number of factors, including,
among other things, the continuity of the management of the Portfolios after
the Merger; the nature, scope and quality of services that Bankers Trust would
likely provide to the Portfolios; the quality of the personnel of Bankers
Trust; Bankers Trust's commitment to continue to provide these services in the
future; the maintenance of the identical advisory fee rates; and the fact that
the New BT Advisory Agreements contain substantially the same terms and condi-
tions as the Prior Advisory Agreements. Based on the factors discussed above
and others, the Boards determined that the New BT Advisory Agreements are fair
and reasonable and in the best interest of the Portfolios and their respective
shareholders.
At meetings of the Boards held on July 15 and July 27, 1999 called for the
purpose of, among other things, discussing and voting on approval of the New
MGI Advisory Agreements and the New Sub-advisory Agreements, the Boards ob-
tained from Deutsche Bank and MGI such information as they deemed reasonably
necessary to approve MGI as investment advisers to the Portfolios. Representa-
tives of Deutsche Bank and MGI made detailed presentations at the July 15th and
July 27th meetings with respect to, among other factors, the organizational
structure, assets under management, asset management services, financial condi-
tion and business plan of MGI. The Boards considered the same factors described
above for the New BT Advisory Agreements with regard to the New MGI Advisory
Agreements and the New Sub-advisory Agreements. The Boards also considered a
number of other factors, including the capacity of MGI to perform its duties
under the New Advisory Agreements; the high degree of continuity of
17
<PAGE>
investment management personnel expected to be available to the Portfolios be-
cause most of the personnel of Bankers Trust who provided services under the
Prior Management Agreements will be employed by MGI; the financial standings of
Deutsche Bank and MGI; the benefits to the Funds and Portfolios from technolog-
ical advances being instituted by Deutsche Bank on a world-wide basis; the ex-
perience and expertise of MGI as an investment adviser, as reflected in its
amount of assets under management, and the new organizational structure pro-
posed to be created as a component of the Merger and the benefits that may ac-
crue to the shareholders as a result thereof. With respect to the last factor,
the Boards considered that the proposed organizational structure may simplify
the organizational structure of Deutsche Bank's U.S. mutual fund operations,
enhance the efficiency of their administration and promote consistency of in-
ternal controls, compliance and regulatory oversight. Additionally, the even-
tual implementation of the New MGI Advisory Agreements will provide the Funds
and the Portfolios with an investment adviser registered under the Advisers
Act.
The Boards were apprised that the deferral in implementing the New MGI Ad-
visory Agreements is needed to permit Deutsche Bank a sufficient amount of time
(which will vary for different Portfolios) to plan, prepare and institute the
necessary arrangements for MGI to consolidate Deutsche Bank's U.S. mutual fund
operations. The Advisers also emphasized to the Boards that the New MGI Advi-
sory Agreements and the New Sub-advisory Agreements would be implemented only
upon the approval of the applicable Portfolio's Independent Trustees based on
information they then deemed adequate and necessary to consider these arrange-
ments. At the July 27th meeting of the Boards, a majority of the Boards, in-
cluding a majority of the Independent Trustees, approved the New MGI Advisory
Agreements and the New Sub-advisory Agreements.
Based on the factors discussed above and others, the Boards determined that
the New MGI Advisory Agreements and the New Sub-Advisory Agreements are fair
and reasonable and in the best interest of the Portfolios and their respective
shareholders.
In addition, at meetings held on March 24 and April 21, 1999 the Boards,
including the Independent Trustees, also were apprised of the guilty pleas dis-
cussed above and the exemptive relief sought by Bankers Trust.
Therefore, after careful consideration, the Boards, including the Indepen-
dent Trustees of each, recommend that the respective shareholders of the Funds
vote "FOR" the approval of the New Advisory Agreements as set forth in these
Proposals.
If the New BT Advisory Agreements are approved by the shareholders, each
agreement will continue in effect as described above. If any New BT Advisory
Agreement is not approved by the shareholders, the advisory fees held in escrow
with respect to that New BT Advisory Agreement will be paid over to
18
<PAGE>
the applicable Portfolio. In such event, the applicable Board(s) will consider
what other action is appropriate based upon the interests of the shareholders.
If any New MGI Advisory Agreements and/or New Sub-advisory Agreements are not
approved by the shareholders, the applicable New BT Advisory Agreement(s), if
they have been approved by the shareholders, will continue in effect in accor-
dance with their terms while the Boards consider whether and the extent to
which other action is appropriate based upon the interests of the shareholders.
If shareholders of a Fund do not approve the applicable New Advisory Agreements
at the same time that shareholders of other investment companies approve the
applicable New Advisory Agreements with respect to a common Portfolio in a man-
ner sufficient to implement the New Advisory Agreements for that Portfolio, the
applicable Fund will remain a participant in that Portfolio while the Board(s)
consider what other action, if any, is appropriate based upon the interests of
the shareholders of the applicable Fund.
19
<PAGE>
PROPOSAL II
ELECTION OF BOARDS OF TRUSTEES OF THE TRUST AND THE PORTFOLIOS
Trustees constituting the entire Board of Trustees of the Trust and of each
Portfolio are to be elected at the Special Meeting to serve until their succes-
sors have been duly elected and qualified or until their earlier resignation or
removal. The Trustee Nominees were recently selected by the Independent Trust-
ees of the Boards and nominated by the full Boards at a meeting held on July
27, 1999. The names and ages of the Trustee Nominees, their principal occupa-
tions during the past five years and certain of their other affiliations are
provided below. Of the Trustee Nominees, Martin J. Gruber, Richard J. Herring,
Bruce E. Langton and Harry Van Benschoten are currently Trustees of the Trust
and Charles P. Biggar, S. Leland Dill and Philip Saunders, Jr. are currently
Trustees of the Portfolios. No Trustee or Trustee Nominee of the Trust or the
Portfolios serves or will serve as an officer of the Trust or any Portfolio.
Each of the Trustee Nominees has agreed to serve if elected at the Special
Meeting. It is the intention of the persons designated as proxies in the Proxy,
unless otherwise directed therein, to vote at the Special Meeting for the elec-
tion of the Trustee Nominees named below as the entire Board of Trustees of the
Trust and of each Portfolio. If any Trustee Nominee is unable or unavailable to
serve, the persons named in the Proxies will vote the Proxies for such other
person as the Boards may recommend.
The following table sets forth the name, age, position with the
Trust/Portfolios, and principal occupation of each Trustee Nominee; each
Trustee Nominee is proposed to be elected as such for the Trust and for each
Portfolio.
TRUSTEE NOMINEES
<TABLE>
<CAPTION>
Position with Principal Occupations
Name and Age Trust/Portfolios During Last Five Years
- ------------------------------------------------------------------------------
<S> <C> <C>
Charles P. Trustee of Portfolios Retired; formerly, Vice President of
Biggar+ since inception of International Business Machines
Age: 68 each Portfolio ("IBM") and President of the National
Services and Field Engineering
Divisions of IBM.
S. Leland Trustee of the Trust Retired; Director, Coutts (U.S.A.)
Dill(1)+ since 1986 and International; Trustee, Phoenix-Zweig
Age: 69 Trustee of the Trust(3) and Phoenix-Euclid Market
Portfolios since Neutral Fund(3); former Partner of
inception of KPMG Peat Marwick; Director, Vintners
each Portfolio International Company Inc.; Director,
Coutts Trust Holdings Ltd.; Director,
Coutts Group; General Partner,
Pemco(3).
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Position with Principal Occupations
Name and Age Trust/Portfolios During Last Five Years
- -------------------------------------------------------------------------------
<S> <C> <C>
Martin J. Gruber(1)+ Trustee of the Nomura Professor of Finance,
Age: 62 Trust since 1992 Leonard N. Stern School of
Business, New York University
(since 1964); Trustee, TIAA(3);
Trustee, SG Cowen Mutual
Funds(3); Trustee, Japan Equity
Fund(3); Trustee, Taiwan Equity
Fund(3).
Richard Hale* Managing Director, Deutsche
Age: 54 Asset Management; Director, Flag
Investors Fund(3); Managing
Director, BT Alex. Brown
Incorporated; Director and
President, Investment Company
Capital Corp.
Richard J. Herring(1)+ Trustee of the Jacob Safra Professor of
Age: 53 Trust since 1995 International Banking, Professor
of Finance and Vice Dean, The
Wharton School, University of
Pennsylvania (since 1972).
Bruce E. Langton(1)+ Trustee of the Retired; Trustee, Allmerica
Age: 68 Trust since 1995 Financial Mutual Funds (1994 to
present); Member, Pension &
Thrift Plans and Investment
Committee, Unilever U.S.
Corporation (1989 to
present)(2); Director, TWA
Pilots Directed Account Plan and
401K Plan (1988 to present)(3).
Philip Saunders, Jr.(1)+ Trustee of the Principal, Philip Saunders
Age: 63 Trust since 1986 Associates (Economic and
and Trustee Financial Analysis);
of the Portfolios Former Director, Financial
since inception Industry Consulting, Wolf and
of each Portfolio Company; President, John Hancock
Home Mortgage Corporation;
Senior Vice President of
Treasury and Financial Services,
John Hancock Mutual Life
Insurance Company, Inc.
Harry Van Benschoten(1)+ Trustee of the Trust Retired; Director, Canada Life
Age: 71 since 1992 Insurance Corporation of New
York.
</TABLE>
- -----------
* "Interested Person" within the meaning of Section 2(a)(19) of the Act. Mr.
Hale is a Managing Director of Deutsche Asset Management, the U.S. asset
management unit of Deutsche Bank and its affiliates.
+ Drs. Gruber and Herring and Messrs. Langton and Van Benschoten are members
of the Audit Committee of the Trust and Messrs. Biggar, Dill and Saunders
are members of the Audit Committees of the Portfolios.
(1) Holds one other trusteeship in the Bankers Trust Fund Complex, as defined
herein.
(2) A publicly held company with securities registered pursuant to Section 12
of the Exchange Act.
(3) An investment company registered under the Act.
21
<PAGE>
Each Board has established an Audit Committee that meets with the
Trust's/Portfolios' independent accountants to review the financial statements
of the Trust/Portfolios, the adequacy of internal controls and the accounting
procedures and policies of the Trust/Portfolios, and reports on these matters
to the Board. The Independent Trustees of each Board, who constitute 100% of
the membership of each current Board, select and nominate the new trustee nomi-
nees who are not "interested persons," as defined under the Act, of the Trust
or Portfolios, as applicable. The Boards do not have compensation committees.
During 1998, the Boards held four meetings and the Audit Committees held two
meetings. No Trustee attended less than 75% of the applicable meetings.
If Richard Hale is elected, he will not be a member of the Audit Committee.
The following table sets forth the compensation received by the Trustee
Nominees for their services to the Trust, Portfolios and Bankers Trust Fund
Complex (as defined below) during the most recent calendar year ended December
31, 1998. In addition to the fees listed below, the Trustees are also reim-
bursed for all reasonable expenses incurred during the execution of their du-
ties for the Trust, Portfolios and Bankers Trust Fund Complex.*
<TABLE>
<CAPTION>
Aggregate Estimated
Aggregate Compensation Pension or Retirement Annual Total Compensation
Compensation from the Benefits Accrued as Benefits upon From the Complex*
Name of Trustee from the Trust Portfolios Part of Trust Expenses Retirement Paid to Trustees
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Charles P. Biggar N/A N/A N/A N/A $36,250
S. Leland Dill N/A $3,882 N/A N/A $36,250
Martin J. Gruber $13,688 N/A N/A N/A $36,250
Richard Hale N/A N/A N/A N/A N/A
Richard J. Herring $11,375 N/A N/A N/A $35,000
Bruce E. Langton $11,375 N/A N/A N/A $35,000
Philip Saunders, Jr. N/A $3,910 N/A N/A $36,250
Harry Van Benschoten $13,688 N/A N/A N/A $36,250
</TABLE>
- -----------
* The "Bankers Trust Fund Complex" consists of the Trust and the Portfolios,
as well as BT Institutional Funds, BT Pyramid Mutual Funds, BT Investment
Funds and BT Insurance Funds Trust.
22
<PAGE>
The following table sets forth the names, ages, position with the Trust and
length of service in such position, and principal occupations during the past
five years of the officers of the Trust.
<TABLE>
<CAPTION>
Position with Trust and Principal
Name and Age Occupations
- -------------------------------------------------------------
<S> <C>
John A. Keffer President and Chief Executive Officer since
Age: 57 1998; President, Forum Financial Group
L.L.C. and its affiliates; President, ICC
Distributors, Inc. *
Daniel O. Hirsch Secretary since 1998; Director, Deutsche
Age: 45 Asset Management since 1999; Director, BT
Alex. Brown Incorporated and Investment
Company Capital Corporation, 1998-99;
Associate General Counsel, Office of
General Counsel, United States Securities
and Exchange Commission, 1993-1998.
Charles A. Rizzo Treasurer since 1999; Vice President and
Age: 41 Department Head, Deutsche Asset Management
since 1998; Senior Manager,
PricewaterhouseCoopers LLP, 1993-98.
</TABLE>
- -----------
*Underwriter/distributor for the Trust. Mr. Keffer owns 100% of the shares of
ICC Distributors, Inc.
Recommendation of the Boards
At a meeting of the Boards held on July 27, 1999, the Boards, based on a
recommendation of the incumbent Independent Trustees of each, unanimously ap-
proved the nomination of the Trustee Nominees. In reaching this conclusion, the
Boards obtained from the Trustee Nominees such information as they deemed rea-
sonably necessary to approve the Trustee Nominees and considered a number of
factors, including, among other things: alignment of the members of the Boards
of the Trust and the Portfolios; the nature, scope and quality of services that
the Trustee Nominees would likely provide to the Trust and the Portfolios; and
the desirability of maintaining adherence to Section 15(f) of the Act. Based on
the factors discussed above and others, the Boards determined that the election
of the Trustee Nominees is in the best interest of the Trust and the Portfolios
and their respective shareholders.
Therefore, after careful consideration, the Boards, including the Indepen-
dent Trustees of each, recommend that the respective shareholders of the Trust
and the Portfolios vote "FOR" the election of the Trustee Nominees as set forth
in this Proposal.
If the Trustee Nominees are elected by the applicable shareholders, each
Trustee Nominee will serve until his successor is duly elected and qualified or
until his earlier resignation or removal. If the Trustee Nominees are not
elected, the applicable Board(s) will consider what action is appropriate based
upon the interests of the Trust's or Portfolios' shareholders, as applicable.
23
<PAGE>
PROPOSAL III
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
ACCOUNTANTS FOR ALL FUNDS AND PORTFOLIOS
The Boards of the Trust and BT Portfolios, including a majority of the In-
dependent Trustees of each, have approved the selection of
PricewaterhouseCoopers LLP to serve as independent accountants for the Funds
and the Portfolios for the current fiscal year. PricewaterhouseCoopers LLP has
served as independent accountants of each Fund and each Portfolio since the
date of the applicable Fund and Portfolio's inception and has advised the Trust
and BT Portfolios that they have no direct or indirect financial interest in
any Fund or Portfolio. Representatives of PricewaterhouseCoopers LLP are not
expected to be present at the Special Meeting and, thus, are not expected to
make a statement; however, one or more representatives will be available by
telephone to respond to appropriate questions posed by shareholders or manage-
ment.
Therefore, after careful consideration, the Boards, including the Indepen-
dent Trustees of each, recommend that the respective shareholders of the Trust
and the Portfolios vote "FOR" the ratification of the independent accountants
as set forth in this Proposal.
VOTE REQUIRED
In view of the master-feeder structure discussed earlier, approval of each
of Proposals IA, IB and IC with respect to a particular Portfolio's New Advi-
sory Agreements requires the affirmative vote of a "majority" of the outstand-
ing shares of the Portfolio's various feeder funds as shareholders of the Port-
folio. "Majority" (as defined in the Act) means (as of the Record Date) the
lesser of (a) 67% or more of the shares of the applicable Portfolio present at
the special meeting, if the holders of more than 50% of the outstanding shares
of the Portfolio are present in person or by proxy, or (b) more than 50% of the
outstanding shares of the Portfolio (with respect to the applicable feeder
funds) determined by reference to the shares outstanding of the various feeder
funds. Because abstentions and broker non-votes are treated as shares present
but not voting, any abstentions and broker non-votes will have the effect of
votes against Proposals IA, IB and IC, which require the approval of a speci-
fied percentage of the outstanding shares of a Portfolio.
Approval of Proposal II with respect to the Trustee Nominees of the Trust
requires the affirmative vote of a plurality of the votes cast in person or by
proxy at the Special Meeting for all Funds voting collectively. Approval of
Proposal II with respect to the Trustee Nominees of the Portfolios requires the
affirmative vote of a plurality of the votes cast in person or by proxy at the
special meetings of shareholders of all the Portfolios' various feeder funds
voting collectively.
24
<PAGE>
Because abstentions and broker non-votes are not treated as shares voted, ab-
stentions and broker non-votes will have no impact on Proposal II.
Approval of Proposal III with respect to the selection of the independent
accountants of the applicable Funds requires the affirmative vote of a majority
of the votes cast in person or by proxy at the Special Meeting for each Fund.
Approval of Proposal III with respect to the selection of the independent ac-
countants of the applicable Portfolios requires the affirmative vote of a ma-
jority of the votes cast in person or by proxy at the special meetings of
shareholders of each Portfolio's various feeder funds. Because abstentions and
broker non-votes are not treated as shares voted, abstentions and broker non-
votes will have no impact on Proposal III.
- --------------------------------------------------------------------------------
THE BOARDS, INCLUDING THE INDEPENDENT TRUSTEES OF EACH, RECOMMEND
THAT THE SHAREHOLDERS VOTE "FOR" APPROVAL OF PROPOSALS IA, IB,
IC, II AND III. ANY UNMARKED PROXIES WILL BE SO VOTED.
- --------------------------------------------------------------------------------
The Board is not aware of any other matters that will come before the Spe-
cial Meeting. Should any other matter properly come before the Special Meeting,
it is the intention of the persons named in the accompanying Proxy to vote the
Proxy in accordance with their judgment on such matters.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Funds do not hold regular shareholders' meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent share-
holders' meeting should send their written proposals to the Secretary of the
Trust at the address set forth on the cover of this Proxy Statement.
Proposals must be received at a reasonable time prior to the date of a
meeting of shareholders to be considered for inclusion in the materials for a
Fund's meeting. Timely submission of a proposal does not, however, necessarily
mean that such proposal will be included.
25
<PAGE>
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders holding at least 10% of each Fund's outstanding voting securi-
ties (as defined in the Act) may require the calling of a meeting of sharehold-
ers for the purpose of voting on the removal of any Trustee of the Fund. Meet-
ings of shareholders for any other purpose also shall be called by the applica-
ble Board of Trustees when requested in writing by shareholders holding at
least 10% of the shares then outstanding.
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT OR THE PROCEDURES
TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT SHAREHOLDER COM-
MUNICATIONS CORPORATION AT 1-800-732-6168.
- --------------------------------------------------------------------------------
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING AND WHO
WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, UNLESS THEY ARE VOTING BY
TELEPHONE OR THROUGH THE INTERNET.
- --------------------------------------------------------------------------------
By Order of the Board of Trustees,
/s/ Daniel O. Hirsch
Daniel O. Hirsch, Secretary
August 23, 1999
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES OF THE TRUST HOPES THAT SHAREHOLDERS WILL ATTEND THE
SPECIAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COM-
PLETE, DATE, SIGN AND RETURN EACH ENCLOSED PROXY IN THE ACCOMPANYING
ENVELOPE (UNLESS YOU ARE VOTING BY TELEPHONE OR THROUGH THE
INTERNET).
- --------------------------------------------------------------------------------
26
<PAGE>
Annex I
(i) 5% Shareholders
EAFE FUND:
<TABLE>
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- ---------------------------------------------------------------------------
<S> <C> <C>
Bankers Trust as Trustee 2,428,441.2660 46.743%
Pacificorp Master Retirement
Trust Dated 10/1/94
300 S. Grand Ave 40th
Attn: Diane Severino
Los Angeles, CA 90071-3109
Swiss Bank Corporation 1,035,434.7060 19.93%
Attn: Kenneth Andersen
10 East 50th Street SBT-32-B
New York, NY 10022-6831
Branch Banking & Trust Co. Cust. 561,877.2170 10.815%
FBO API Trust Growth Fund
c/o Trust Securities Operations
PO Box 2887
223 West Nash Street
Wilson, NC 27894-2887
SMALL CAP FUND:
<CAPTION>
Name and Address of Beneficial Shares Beneficially Percent Ownership
Owner Owned of Outstanding Shares
- ---------------------------------------------------------------------------
<S> <C> <C>
Merck & Co Union VEBA 4,649,045.5930 55.853%
100 Plaza One
Jersey City, NJ 07311-3901
Merck & Co Inc Employee Benefit 2,018,949.9440 24.256%
One Merck Drive
WS 3AF-05
PO Box 100
Whitehouse Station, NJ 08889
Adventist Health System 857,252.6340 10.299%
111 N. Orlando Ave.
Winter Park, FL 32789
</TABLE>
<PAGE>
BOND FUND:
<TABLE>
<CAPTION>
Shares Beneficially Percent Ownership
Name and Address of Beneficial Owner Owned of Outstanding Shares
- -------------------------------------------------------------------------------
<S> <C> <C>
Bankers Trust Co. 1,856,847.6170 31.599%
U/A DTD 01/01/1986
GTE Foundation
GTE Investment Management
695 Main Street, Ste 600
Box 120029
Stamford, CT 06901-2141
Bankers Trust Co. Cust 401(k) 638,792.6940 10.871%
Framatome Technologies
Attn: Tom Arnold
648 Grassmere Park
Recordkeeping
Nashville, TN 37211-3658
Baptist Health Systems Inc. 555,459.0750 9.453%
PO Box 830605
Birmingham, AL 35283-0605
FTC & Co 509,792.7870 8.675%
Datalynx House Acct
PO Box 173736
Denver, CO 80217-3736
(ii) Trustees and Trustee Nominees *
Charles P. Biggar *
S. Leland Dill *
Martin J. Gruber *
Richard Hale *
Richard J. Herring *
Bruce E. Langton *
Philip Saunders, Jr. *
Harry Van Benschoten *
(iii) Executive Officers *
John A. Keffer *
Daniel O. Hirsch *
Charles A. Rizzo *
(iv) Trustees and Executive Officers
as a Group *
</TABLE>
- -----------
* The Trustees, the Trustee Nominess, the executive officers of the Trust and
the Trustees and executive officers as a group own less than 1% of the Fund's
outstanding shares.
I-2
<PAGE>
Annex II
BT ADVISOR FUNDS
BANKERS TRUST
<TABLE>
<CAPTION>
Advisory
Fee as a
Net Assets (As of Most Percentage of
Recently Completed Average Daily
Fiscal Year) Net Assets
- --------------------------------------------------------------------------------
Equity 500 Index Portfolio:
<S> <C> <C>
Includes the following feeder funds: 0.08%
BT Institutional Equity 500 Index Fund $ 2,288,969,859.00
Scudder S & P 500 Index Fund $244,805,518.35
American Aadvantage S & P 500 Index Fund $322,610,586.01
USAA S & P 500 Index Fund $2,713,859,248.97
American Aadvantage S&P 500 Index Mileage $3,632,960.16
Fund
BT Investment Equity 500 Index Fund $929,474,411.08
Quantitative Equity Fund N/A/1/ 0.50%
American Skandia Trust--AST Bankers Trust $452,128,871.00 NOTE A
Enhanced 500 Portfolio
Security Equity Fund--Enhanced Index $15,785,667.21 NOTE I
Series (Security Benefit)
BT Insurance Equity 500 Index Fund $49,691,350.00 0.20%
American General Series Portfolio--MidCap $814,774,297.65 NOTE B
Index Fund (VALIC)
American General Series Portfolio--Stock $4,624,973,419.19 NOTE B
Index Fund (VALIC)
American General Series Portfolio Company $12,489,608.16 NOTE C
2--Stock Index Fund (VALIC)
American General Series Portfolio Company $6,585,995.57 NOTE C
2--MidCap Index Fund
EQ Advisors Trust--BT Equity 500 Index $392,561,486.32 0.05%
Portoflio (Equitable)
Variable Insurance Products Fund II--Index $4,624,170,180.40 At an annual
500 Portfolio (Fidelity) rate of
0.006% (0.6
basis points)
Fidelity Concord Street Trust--Spartan $17,202,394,585.66 At an annual
U.S. Equity Index Fund rate of
0.006% (0.6
basis points)
</TABLE>
- -----------
1 The fund commenced operations on March 31, 1999. Accordingly, the fund does
not have a full fiscal year of operations to report.
<PAGE>
<TABLE>
<CAPTION>
Advisory
Fee as a
Net Assets (As of Most Percentage of
Recently Completed Average Daily
Fiscal Year) Net Assets
- -------------------------------------------------------------------------------
<S> <C> <C>
Pacific Select Fund--Equity Index $1,808,280,989.82 NOTE E
Portoflio (Pacific Mutual)
AARP U.S. Stock Index Fund (Scudder) $ 464,922,428.55 NOTE D
U.S. Bond Index Portfolio:
Includes the following feeder fund: 0.15%
BT U.S. Bond Index Fund $ 39,790,125.00
Season Series Trust--Diversified $ 5,245,870.74 0.12%--first
Fixed Income Portfolio $500 million
0.08%--over
$500 million
Fidelity Commonwealth Trust--Spartan $8,573,448,838.36 NOTE F
Market Index Fund
Fidelity Concord Street Trust-- $ 347,643,315.71 At an annual rate
Spartan Total Market Index Fund of 0.0125% (1.25
basis points)
Fidelity Concord Street Trust-- $ 78,316,856.18 At an annual rate
Spartan Extended Market Index Fund of 0.0125% (1.25
basis points)
Fidelity Concord Street Trust-- $ 78,012,265.00 NOTE G
Spartan International Index Fund
Pacific Select Fund--Small Cap Index $ 42,738,313.85 NOTE H
Portfolio (Pacific Mutual)
</TABLE>
NOTE A) An annual rate of .17% of the portion of the average daily net as-
sets of the Portfolio not in excess of $300 million; plus .13% of the portion
of the net assets over $300 million.
NOTE B) A monthly fee computed at the annual rate of 0.03% on the first
$300 million and 0.02% on assets over $300 million for the MidCap Index Fund,
0.02% on the first $2 billion and 0.01% on assets over $2 billion for the Stock
Index Fund and 0.03% on the first $150 million and 0.02% on assets over $150
million for the Small Cap Index Fund. Notwithstanding the above provision,
VALIC is required to pay a minimum annual sub-advisory fee of $50,000 to BTC
for the Small Cap Index Fund. There are no minimum sub-advisory fees for the
Stock Index Fund, MidCap Index Fund. The Investment Sub-Advisory Agreements re-
quire that each Sub-Adviser promptly reduce its monthly fee by the amount of
any commission, tender and exchange offer solicitation fees, other fees or sim-
ilar payments received by the Sub-Adviser, or any affiliated person of the Sub-
Adviser, in connection with Sub-Advised Fund portfolio transactions.
II-2
<PAGE>
NOTE C) A monthly fee computed at the annual rate of 0.03% of the average
daily net asset values of the portion of the Small Cap Value Fund portfolio
that BT manages. With respect to the Stock Index Fund, VALIC shall pay to Bank-
ers Trust, a monthly fee computed at the annual rate of 0.02% of the first $2
billion and 0.01% of average daily net asset values on the excess over $2 bil-
lion. VALIC shall pay Bankers Trust, a monthly fee computed at the annual rate
of 0.03% of the first $300 million and 0.02% of average daily net asset values
on the excess over $300 million of the Mid Cap Index Fund, and 0.03% of the
first $150 million and 0.02% of average daily net asset values on the excess
over $150 million of the Small Cap Index Fund.
NOTE D) The fee paid to the Sub-Adviser is calculated on a quarterly basis
and depends on the level of total assets in the AARP U.S. Stock Index Fund. The
fee rate decreases as the level of total assets for the Fund increases. The fee
rate for each level of assets is: 0.07% of the first $100 million of average
daily net assets, 0.03% of such assets in excess of $100 million, and 0.01% of
such assets in excess of $200 million with a minimum annual fee of $75,000.
NOTE E) A fee is paid at the beginning of each calendar quarter, based on
an annual percentage of the combined daily net assets of the Equity Index and
Small-Cap Index Portfolios, according to the following schedule, subject to a
minimum annual fee of $100,000: 0.08% on first $100 million; 0.04% on next
$100 million; 0.02% on excess.
NOTE F) Manager will pay Sub-Advisor a monthly fee computed at an annual
rate of 0.006% (0.6 basis points) of the average daily net assets of the Port-
folio (computed in the manner set forth in the Trust's Declaration of Trust)
thrgoughout the months.
NOTE G) At an annual rate of 0.065% (6.5 basis points). In addition, Man-
ager shall pay Sub-Advisor a monthly fee equal to $35 for each securities
transaction executed on behalf of the Portfolio during such month, provided
that such transaction shall not exceed in the aggregate $200,000 per annum.
NOTE H) A fee is paid at the beginning of each calendar quarter, based on
an annual percentage of the combined daily net assets of the Equity Index and
Small-Cap Index Portfolios, according to the following schedule, subject to a
minimum annual fee of $100,000: 0.08% on first $100 million; 0.04% on next $100
million; 0.02% on excess.
NOTE I) An annual rate of .20% of the combined average daily net assets of
the Enhanced Index Funds of $100 million or less; and an annual rate of .15% of
the combined average daily net assets of the Enhanced Index Funds of more than
$100 million but less than $300 million; and an annual rate of .13% of the com-
bined average daily net assets of the Enhanced Index Funds of more than $300
million.
II-3
<PAGE>
Subject to the following minimum fees: (I) in the first year from the date
the Enhanced Index Series of Security Equity Fund is seeded (the "Seeding
Date"), no minimum fee; (ii) in the second year from the Seeding Date, $100,000
minimum and (iii) in the third year from the Seeding Date and each year there-
after, $200,000 minimum. If at the end of the second year from the Seeding Date
the total amount of the fees paid by the Advisor to the Sub-Advisor for serv-
ices to the Enhanced Index Funds is collectively less than $100,000, then the
Advisor will pay any such difference in a lump-sum to the Sub-Advisor. If at
the end of the third year from the Seeding Date, and each year thereafter that
this Agreement is in effect, the total amount of the fees paid by the Advisor
to the Sub-Advisor for services to the Enhanced Index Funds is collectively
less than $200,000, then the Advisor will pay any such difference in a lump-sum
to the Sub-Advisor.
MORGAN GRENFELL INC.
None.
II-4
<PAGE>
Annex III
<TABLE>
<CAPTION>
Fund Fee Portfolio Fee
- ----------------------------------------------------
<S> <C> <C> <C>
EAFE Fund $55,785 EAFE Portfolio $2,637
- ----------------------------------------------------
Small Cap Fund $142,203 Small Cap Portfolio $50,411
- ----------------------------------------------------
Bond Fund $37,679 Bond Portfolio $22,642
- ----------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT A
[FORM OF INVESTMENT ADVISORY AND
SUB-ADVISORY AGREEMENT]
AGREEMENT made as of [ ] by and between [Trust Name], a (state of or-
ganization) (herein called the "Trust") and [ ] (herein called the "In-
vestment Adviser") [and [ ] (herein called the "Investment Subadviser")].
WHEREAS, the Trust is registered as an open-end management investment com-
pany under the Investment Company Act of 1940;
WHEREAS, the Trust desires to retain the Investment Adviser to render in-
vestment advisory and other services to the Trust with respect to certain of
its series of shares of beneficial interests as may currently exist or be cre-
ated in the future (each, a "Fund") as listed on Exhibit A hereto, and the In-
vestment Adviser is willing to so render such services on the terms hereinaf-
ter set forth;
[WHEREAS, the Investment Adviser desires to retain the Investment
Subadviser to perform certain of the Investment Adviser's duties under this
Agreement, and the Investment Subadviser is willing to so render such services
on the terms hereinafter set forth;]/(1)/
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
In consideration of the promises and mutual covenants herein contained, it
is agreed between the parties hereto as follows:
1. Appointment. The [Trust] [Investment Adviser] hereby appoints the [In-
vestment Adviser] [Investment Subadviser] to act as [investment adviser] [in-
vestment subadviser] to each Fund for the period and on the terms set forth in
this Agreement. The [Investment Adviser] [Investment Subadviser] accepts such
appointment and agrees to render the services herein set forth for the compen-
sation herein provided.
2. Management. Subject to the supervision of the [Board of Trustees of the
Trust] [Investment Adviser], the [Investment Adviser] [Investment Subadviser]
will provide a continuous investment program for the Fund, including invest-
ment research and management with respect to all securities, investments, cash
and cash equivalents in the Fund. The [Investment Adviser] [Investment
Subadviser] will determine from time to time what securities and other invest-
ments will be purchased, retained or sold by each Fund. The [Investment Advis-
er] [Investment
- -----------
/(1)/ Contained in the form of Investment Sub-Advisory Agreement only.
<PAGE>
Subadviser] will provide the services rendered by it hereunder in accordance
with the investment objective(s) and policies of each Fund as stated in the
Fund's then-current prospectus and statement of additional information (or the
Fund's then current registration statement on Form N-1A as filed with the Se-
curities and Exchange Commission (the "SEC") and the then-current offering
memorandum if the Fund is not registered under the Securities Act of 1933, as
amended ("1933 Act"). The [Investment Adviser] [Investment Subadviser] further
agrees that:
(a) it will conform with all applicable rules and regulations of the SEC
(herein called the "Rules") and with all applicable provisions of the 1933
Act; as amended, the Securities Exchange Act of 1934, as amended (the "1934
Act"), the Investment Company Act of 1940, as amended (the "1940 Act"); and
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
will, in addition, conduct its activities under this Agreement in accordance
with applicable regulations of the Board of Governors of the Federal Reserve
System pertaining to the investment advisory activities of bank holding compa-
nies and their subsidiaries;
(b) it will place orders pursuant to its investment determinations for
each Fund either directly with the issuer or with any broker or dealer se-
lected by it. In placing orders with brokers and dealers, the [Investment Ad-
viser] [Investment Subadviser] will use its reasonable best efforts to obtain
the best net price and the most favorable execution of its orders, after tak-
ing into account all factors it deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing ba-
sis. Consistent with this obligation, the [Investment Adviser] [Investment
Subadviser] may, to the extent permitted by law, purchase and sell portfolio
securities to and from brokers and dealers who provide brokerage and research
services (within the meaning of Section 28(e) of the 1934 Act) to or for the
benefit of any fund and/or other accounts over which the [Investment Adviser]
[Investment Subadviser] or any of its affiliates exercises investment discre-
tion. Subject to the review of the [Trust's Board of Trustees] [Investment Ad-
viser] from time to time with respect to the extent and continuation of the
policy, the [Investment Adviser] [Investment Subadviser] is authorized to pay
to a broker or dealer who provides such brokerage and research services a com-
mission for effecting a securities transaction which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the [Investment Adviser] [Investment Subadviser] deter-
mines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or deal-
er, viewed in terms of either that particular transaction or the overall re-
sponsibilities of the [Investment Adviser] [Investment Subadviser] with re-
spect to the accounts as to which it exercises investment discretion; and
EX-2
<PAGE>
(c) it will maintain books and records with respect to the securities
transactions of each Fund and will render to the [Trust's Board of Trustees]
[Investment Adviser] such periodic and special reports as the Board may re-
quest.
3. [Subject to the provisions of this Agreement, the duties of the Invest-
ment Subadviser, the portion of portfolio assets that the Subadviser shall man-
age, and the fees to be paid the Investment Subadviser by the Investment Ad-
viser under and pursuant to this Agreement may be adjusted from time to time by
the Investment Adviser with and upon the approval of the Board and the members
of the Trust's Board of Trustees who are not "interested persons," as defined
in the Act ]./(2)/
4. Services Not Exclusive. The investment advisory services rendered by the
[Investment Adviser] [Investment Subadviser] hereunder are not to be deemed ex-
clusive, and the [Investment Adviser] [Investment Subadviser] shall be free to
render similar services to others so long as its services under this Agreement
are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3 of
the Rules under the 1940 Act, the [Investment Adviser] [Investment Subadviser]
hereby agrees that all records which it maintains for the Trust are the prop-
erty of the Trust and further agrees to surrender promptly to the [Trust] [In-
vestment Adviser] any of such records upon request of the [Trust] [Investment
Adviser]. The [Investment Adviser] [Investment Subadviser] further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the rec-
ords required to be maintained by Rule 31a-1 under the 1940 Act and to comply
in full with the requirements of Rule 204-2 under the Advisers Act pertaining
to the maintenance of books and records.
6. Expenses. During the term of this Agreement, the [Investment Adviser]
[Investment Subadviser] will pay all expenses incurred by it in connection with
its activities under this Agreement other than the cost of purchasing securi-
ties (including brokerage commissions, if any) for the Fund.
7. Compensation. For the services provided and the expenses assumed pursu-
ant to this Agreement, the [Trust] [Investment Adviser] will pay the [Invest-
ment Adviser] [Investment Subadviser], and the [Investment Adviser] [Investment
Subadviser] will accept as full compensation therefor, fees, computed daily and
payable monthly, on an annual basis equal to the percentage set forth on Ex-
hibit A hereto of that Fund's average daily net assets.
- -----------
(2) Provision contained in the form of Investment Sub-advisory Agreement only.
EX-3
<PAGE>
8. Limitation of Liability of the [Investment Adviser] [Investment
Subadviser]: Indemnification.
(a) The [Investment Adviser] [Investment Subadviser] shall not be liable
for any error of judgment or mistake of law or for any loss suffered by a Fund
in connection with the matters to which this Agreement relates, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of com-
pensation for services or a loss resulting from willful misfeasance, bad faith
or gross negligence on the part of the [Investment Adviser] [Investment
Subadviser] in the performance of its duties or from reckless disregard by it
of its obligations and duties under this Agreement;
(b) Subject to the exceptions and limitations contained in Section 7(c)
below:
(i) the [Investment Adviser] [Investment Subadviser] (hereinafter re-
ferred to as a "Covered Person") shall be indemnified by the respective
Fund to the fullest extent permitted by law, against liability and against
all expenses reasonably incurred or paid by him in connection with any
claim, action, suit or proceeding in which he becomes involved, as a party
or otherwise, by virtue of his being or having been the [Investment Advis-
er] [Investment Subadviser] of the Fund, and against amounts paid or in-
curred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened while in office or thereafter,
and the words "liability" and "expenses" shall include, without limita-
tion, attorneys' fees, costs, judgments, amounts paid in settlement,
fines, penalties and other liabilities.
(c) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the [Trust] [Investment Ad-
viser] or to one or more Funds' investors by reason of willful misfea-
sance, bad faith, gross negligence or reckless disregard of the duties in-
volved in the conduct of his office, or (B) not to have acted in good
faith in the reasonable belief that his action was in the best interest of
a Fund; or
(ii) in the event of a settlement, unless there has been a determina-
tion that such Covered Person did not engage in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office;
(A) by the court or other body approving the settlement; or
(B) by at least a majority of those Trustees who are neither In-
terested Persons of the Trust nor are parties to the matter based
upon a
EX-4
<PAGE>
review of readily available facts (as opposed to a full trial-type
inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry); provided, however, that any investor in a Fund may, by ap-
propriate legal proceedings, challenge any such determination by the
Trustees or by independent counsel.
(d) The rights of indemnification herein provided may be insured against
by policies maintained by the [Trust] [Investment Adviser], shall be severa-
ble, shall not be exclusive of or affect any other rights to which any Covered
Person may now or hereafter be entitled, shall continue as to a person who has
ceased to be a Covered Person and shall inure to the benefit of the successors
and assigns of such person. Nothing contained herein shall affect any rights
to indemnification to which Trust personnel and any other persons, other than
a Covered Person, may be entitled by contract or otherwise under law.
(e) Expenses in connection with the preparation and presentation of a de-
fense to any claim, suit or proceeding of the character described in subsec-
tion (b) of this Section 7 may be paid by the [Trust] [Investment Adviser] on
behalf of the respective Fund from time to time prior to final disposition
thereto upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the [Trust] [Investment Adviser]
on behalf of the respective Fund if it is ultimately determined that he is not
entitled to indemnification under this Section 7; provided, however, that ei-
ther (i) such Covered Person shall have provided appropriate security for such
undertaking or (ii) the [Trust] [Investment Adviser] shall be insured against
losses arising out of any such advance payments, or (iii) either a majority of
the Trustees who are neither Interested Persons of the Trust nor parties to
the matter, or independent legal counsel in a written opinion, shall have de-
termined, based upon a review of readily available facts as opposed to a tri-
al-type inquiry or full investigation, that there is reason to believe that
such Covered Person will be entitled to indemnification under this Section 7.
9. Duration and Termination. This Agreement shall be effective as to a
Fund as of the date the Fund commences investment operations after this Agree-
ment shall have been approved by the Board of Trustees of the Trust with re-
spect to that Fund and the Investor(s) in the Fund in the manner contemplated
by Section 15 of the 1940 Act and, unless sooner terminated as provided here-
in, shall continue until the second anniversary of such date. Thereafter, if
not terminated, this Agreement shall continue in effect as to such Fund for
successive periods of 12 months each, provided such continuance is specifi-
cally approved at least annually (a) by the vote of a majority of those mem-
bers of the Board of Trustees of the Trust who are not parties to this Agree-
ment or Interested Persons of any such party, cast in person at a meeting
called for the purpose of voting on
EX-5
<PAGE>
such approval, or (b) by Vote of a Majority of the Outstanding Voting Securi-
ties of the Trust; provided, however, that this Agreement may be terminated by
the Trust at any time, without the payment of any penalty, by the Board of
Trustees of the Trust, by Vote of a Majority of the Outstanding Voting Securi-
ties of the Trust on 60 days' written notice to the [Investment Adviser] [In-
vestment Subadviser], or by the [Investment Adviser] [Investment Subadviser] as
to the [Trust] [Investment Adviser] at any time, without payment of any penal-
ty, on 90 days' written notice to the [Trust] [Investment Adviser]. This Agree-
ment will immediately terminate in the event of its assignment (as used in this
Agreement, the terms "Vote of a Majority of the Outstanding Voting Securities,"
"Interested Person" and "Assignment" shall have the same meanings as such terms
have in the 1940 Act and the rules and regulatory constructions thereunder.)
10. Amendment of this Agreement. No material term of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of a material term of this
Agreement shall be effective with respect to a Fund, until approved by Vote of
a Majority of the Outstanding Voting Securities of that Fund.
11. Representations and Warranties. The [Investment Adviser] [Investment
Subadviser] hereby represents and warrants as follows:
(a) [The [Investment Adviser] [Investment Subadviser] is exempt from
registration under the 1940 Act:]
(b) The [Investment Adviser] [Investment Subadviser] has all requisite
authority to enter into, execute, deliver and perform its obligations un-
der this Agreement;
(c) This Agreement is legal, valid and binding, and enforceable in ac-
cordance with its terms; and
(d) The performance by the [Investment Adviser] [Investment
Subadviser] of its obligations under this Agreement does not conflict with
any law to which it is subject.
12. Covenants. The [Investment Adviser] [Investment Subadviser] hereby cov-
enants and agrees that, so long as this Agreement shall remain in effect:
(a) The [Investment Adviser] [Investment Subadviser] shall remain ei-
ther exempt from, or registered under, the registration provisions of the
Advisers Act; and
(b) The performance by the [Investment Adviser] [Investment
Subadviser] of its obligations under this Agreement shall not conflict
with any law to which it is then subject.
EX-6
<PAGE>
13. Notices. Any notice required to be given pursuant to this Agreement
shall be deemed duly given if delivered or mailed by registered mail, postage
prepaid, (a) to the Investment Adviser, Mutual Funds Services, 130 Liberty
Street (One Bankers Trust Plaza), New York, New York 10006 , [(b) to the
Subadviser, [Address] or ](c) to the Trust, c/o BT Alex. Brown, Incorporated,
One South Street, Baltimore, Maryland 21202.
14. Waiver. With full knowledge of the circumstances and the effect of its
action, the [Investment Adviser] [Investment Subadviser] hereby waives any and
all rights which it may acquire in the future against the property of any in-
vestor in a Fund, other than shares in that Fund, which arise out of any action
or inaction of the [Trust] [Investment Adviser] under this Agreement.
15. Miscellaneous. The captions in this Agreement are included for conve-
nience of reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. If any provision of
this Agreement shall be held or made invalid by a court decision, statute, rule
or otherwise, the remainder of this Agreement shall not be affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and shall be governed by the
laws of the _________, without reference to principles of conflicts of law. The
Trust is organized under the laws of _________ pursuant to a _________ dated
_________. No Trustee, officer or employee of the Trust shall be personally
bound by or liable hereunder, nor shall resort be had to their private property
for the satisfaction of any obligation or claim hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
[SIGNATORIES]
EX-7
<PAGE>
EXHIBIT A
TO
INVESTMENT ADVISORY AGREEMENT
MADE AS OF
BETWEEN
[Trust Name] AND [ ]
<TABLE>
<CAPTION>
Fund Investment Advisory Fee
---- -----------------------
<S> <C>
</TABLE>
EX-8
<PAGE>
CUSIP #05576L874
CUSIP #05576L882
CUSIP #055762L00
<PAGE>
FORM OF PROXY CARD
[BANKERS TRUST LOGO]
DEUTSCHE BANC ALEX. BROWN
MUTUAL FUND SERVICES
MS 1-18-8
Baltimore, Maryland 21202-3220
One South Street
BT Advisor Funds
Small Cap Index Fund
One South Street
Baltimore, Maryland 21202
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
11:00 a.m., Eastern time, on October 8, 1999
The undersigned hereby appoints Daniel O. Hirsch and Amy M. Olmert and each of
them, with full power of substitution, as proxies of the undersigned to vote all
shares of stock that the undersigned is entitled in any capacity to vote at the
above-stated special meeting, and at any and all adjournments or postponements
thereof (the "Special Meeting"), on the matters set forth on this Proxy Card,
and, in their discretion, upon all matters incident to the conduct of the
Special Meeting and upon such other matters as may properly be brought before
the Special Meeting. This proxy revokes all prior proxies given by the
undersigned.
All properly executed proxies will be voted as directed. If no instructions are
indicated on a properly executed proxy, the proxy will be voted FOR approval of
Proposals IA, IB, IC, II and III. All ABSTAIN votes will be counted in
determining the existence of a quorum at the Special Meeting and, for Proposals
IA, IB and IC, as votes AGAINST the applicable Proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES WITH RESPECT TO YOUR
FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS IA, IB, IC, II AND III.
UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE BELOW AND MAIL THIS
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set forth on the Proxy card and
follow the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the Proxy card and
follow the simple instructions.
DO NOT RETURN YOUR PROXY CARD IF YOU VOTE BY PHONE OR INTERNET.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
<PAGE>
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
SMALL CAP INDEX FUND
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on
this card. When signing as attorney, trustee, executor, administrator, guardian
or corporate officer, please give your FULL title below.)
Vote on Trustees
II. Election of Messrs. (01) Biggar, (02) Dill, (03) Hale, (04)
Langton, (05) Saunders, and (06) Van Benschoten and Drs. (07)
Gruber and (08) Herring as Trustees of the Boards.
For All Withhold All For All Except: To withhold authority
to vote, mark "For All
Except" and write the
nominee's number on the
line below.
__________________
Vote on Proposals
IA. Approval of New Investment
Advisory Agreement with
Bankers Trust Company FOR AGAINST ABSTAIN
IB. Approval of New Investment
Advisory Agreement with
Morgan Grenfell Inc. FOR AGAINST ABSTAIN
IC. Approval of New Investment
Sub-advisory Agreement with
Bankers Trust Company FOR AGAINST ABSTAIN
- ---------------------------------------------------------
- ---------------------------------------------------------
Signature (Please sign within box) Date
III. Ratification of the
selection of
PricewaterhouseCoopers LLP
as the independent
accountants of the Fund and
its corresponding Portfolio. FOR [ ] AGAINST [ ] ABSTAIN [ ]
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 Joint Proxy Statement is hereby
acknowledged.
- -----------------------------------------------------
- -----------------------------------------------------
Signature (Joint Owners) Date
<PAGE>
FORM OF PROXY CARD
[BANKERS TRUST LOGO]
DEUTSCHE BANC ALEX BROWN
MUTUAL FUND SERVICES
MS 1-18-8
One South Street
Baltimore, Maryland 21202
BT Advisor Funds
EAFE(R) Equity Index Fund
One South Street
Baltimore, Maryland 21202
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
11:00 a.m., Eastern time, on October 8, 1999
The undersigned hereby appoints Daniel O. Hirsch and Amy M. Olmert and each of
them, with full power of substitution, as proxies of the undersigned to vote all
shares of stock that the undersigned is entitled in any capacity to vote at the
above-stated special meeting, and at any and all adjournments or postponements
thereof (the "Special Meeting"), on the matters set forth on this Proxy Card,
and, in their discretion, upon all matters incident to the conduct of the
Special Meeting and upon such other matters as may properly be brought before
the Special Meeting. This proxy revokes all prior proxies given by the
undersigned.
All properly executed proxies will be voted as directed. If no One South Street
instructions are indicated on a properly executed proxy, the proxy will be
Baltimore, Maryland 21202-3220 voted FOR approval of Proposals IA, IB, IC, II
and III. All ABSTAIN votes will be counted in determining the existence of a
quorum at the Special Meeting and, for Proposals IA, IB and IC, as votes AGAINST
the applicable Proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES WITH RESPECT TO YOUR
FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS IA, IB, IC, II AND III.
UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE BELOW AND MAIL THIS
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set forth on the Proxy card and
follow the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the Proxy card and
follow the simple instructions.
DO NOT RETURN YOUR PROXY CARD IF YOU VOTE BY PHONE OR INTERNET.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
<PAGE>
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
EAFE(R) EQUITY INDEX FUND
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on
this card. When signing as attorney, trustee, executor, administrator, guardian
or corporate officer, please give your FULL title below.)
Vote on Trustees
II. Election of Messrs. (01) Biggar, (02) Dill, (03) Hale, (04)
Langton, (05) Saunders, and (06) Van Benschoten and Drs. (07)
Gruber and (08) Herring as Trustees of the Boards.
For All Withhold All For All Except: To withhold authority
to vote, mark "For All
Except" and write the
nominee's number on the
line below.
__________________
Vote on Proposals
IA. Approval of New Investment
Advisory Agreement with
Bankers Trust Company FOR AGAINST ABSTAIN
IB. Approval of New Investment
Advisory Agreement with
Morgan Grenfell Inc. FOR AGAINST ABSTAIN
IC. Approval of New Investment
Sub-advisory Agreement with
Bankers Trust Company FOR AGAINST ABSTAIN
- ------------------------------------------ --------------
- ------------------------------------------ --------------
Signature (Please sign within box) Date
III. Ratification of the
selection of
PricewaterhouseCoopers LLP
as the independent
accountants of the Fund and
its corresponding Portfolio. FOR [ ] AGAINST [ ] ABSTAIN [ ]
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 Joint Proxy Statement is hereby
acknowledged.
- ------------------------------------------ --------------
- ------------------------------------------ --------------
Signature (Please sign within box) Date
<PAGE>
FORM OF PROXY CARD
[BANKERS TRUST LOGO]
DEUTSCHE BANK ALEX BROWN
MUTUAL FUND SERVICES
MS 1-18-8
One South Street
Baltimore, Maryland 21202
BT Advisor Funds
U.S. Bond Equity Index Fund
One South Street
Baltimore, Maryland 21202
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
11:00 a.m., Eastern time, on October 8, 1999
The undersigned hereby appoints Daniel O. Hirsch and Amy M. Olmert and each of
them, with full power of substitution, as proxies of the undersigned to vote all
shares of stock that the undersigned is entitled in any capacity to vote at the
above-stated special meeting, and at any and all adjournments or postponements
thereof (the "Special Meeting"), on the matters set forth on this Proxy Card,
and, in their discretion, upon all matters incident to the conduct of the
Special Meeting and upon such other matters as may properly be brought before
the Special Meeting. This proxy revokes all prior proxies given by the
undersigned.
All properly executed proxies will be voted as directed. If no One South Street
instructions are indicated on a properly executed proxy, the proxy will be
Baltimore, Maryland 21202-3220 voted FOR approval of Proposals IA, IB, IC, II
and III. All ABSTAIN votes will be counted in determining the existence of a
quorum at the Special Meeting and, for Proposals IA, IB and IC, as votes AGAINST
the applicable Proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES WITH RESPECT TO YOUR
FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS IA, IB, IC, II AND III.
UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE BELOW AND MAIL THIS
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12-digit control number set forth on the Proxy card and
follow the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the Proxy card and
follow the simple instructions.
DO NOT RETURN YOUR PROXY CARD IF YOU VOTE BY PHONE OR INTERNET.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
<PAGE>
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
U.S. BOND INDEX FUND
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on
this card. When signing as attorney, trustee, executor, administrator, guardian
or corporate officer, please give your FULL title below.)
Vote on Trustees
II. Election of Messrs. (01) Biggar, (02) Dill, (03) Hale, (04)
Langton, (05) Saunders, and (06) Van Benschoten and Drs. (07)
Gruber and (08) Herring as Trustees of the Boards.
For All Withhold All For All Except: To withhold authority
to vote, mark "For All
Except" and write the
nominee's number on the
line below.
__________________
Vote on Proposals
IA. Approval of New Investment
Advisory Agreement with
Bankers Trust Company FOR AGAINST ABSTAIN
IB. Approval of New Investment
Advisory Agreement with
Morgan Grenfell Inc. FOR AGAINST ABSTAIN
IC. Approval of New Investment
Sub-advisory Agreement with
Bankers Trust Company FOR AGAINST ABSTAIN
- ------------------------------------------ --------------
- ------------------------------------------ --------------
Signature (Please sign within box) Date
III. Ratification of the
selection of
PricewaterhouseCoopers LLP
as the independent
accountants of the Fund and
its corresponding Portfolio. FOR [ ] AGAINST [ ] ABSTAIN [ ]
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 Joint Proxy Statement is hereby
acknowledged.
- ------------------------------------------ --------------
- ------------------------------------------ --------------
Signature (Please sign within box) Date
