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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Deutsche Bank Alex. Brown Cash Reserve Fund, Inc.
-------------------------------------------------
(Name of Registrant as Specified In Its Charter)
___________________________________________________________________
(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:
DEUTSCHE BANK ALEX. BROWN CASH RESERVE FUND, INC.
One South Street
Baltimore, Maryland 21202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held July 30, 2002
A special meeting of shareholders of Deutsche Bank Alex. Brown Cash
Reserve Fund, Inc. (the "Fund") will be held at the offices of Deutsche Asset
Management, Inc. ("DeAM, Inc."), One South Street, 30th Floor, Baltimore,
Maryland 21202 on July 30, 2002 at 1:30 p.m. (Eastern time) (the "Special
Meeting"). The Fund is an open-end management investment company, organized
under the laws of the State of Maryland. The Fund is comprised of three series:
the Prime Series, the Treasury Series and the Tax-Free Series (each a "Series").
The Special Meeting is being held to consider and vote on the following
matters for the 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 Special Meeting or any adjournments thereof:
PROPOSAL I: To approve a new investment advisory
---------- agreement (a "New Advisory
Each Series separately Agreement") between the Fund, on
behalf of each Series, and Deutsche
Asset Management, Inc. ("DeAM,
Inc.").
PROPOSAL II: To approve a change in the Prime
----------- Series' concentration policy.
Prime Series only
PROPOSAL III: To elect eleven Directors of the
------------ Fund to hold office until their
All Series together respective successors have been duly
elected and qualified or until their
earlier resignation or removal,
whose terms will be effective on the
date of the Special Meeting or, in
the event of an adjournment or
adjournments of the Special Meeting,
such later date as shareholder
approval is obtained.
The appointed proxies will vote in their discretion on any other
business as may properly come before the Special Meeting or any adjournments
thereof.
The New Advisory Agreements described in Proposal I contain
substantially similar provisions and do not differ in substance from the current
advisory agreements pursuant to which services are provided to the Series,
except for the dates of execution, effectiveness and initial term, certain
changes to the "Delegation of Responsibilities" section (described in the Proxy
Statement) and except that, under the New Advisory Agreements, DeAM, Inc., an
indirect wholly owned subsidiary of Deutsche Bank AG ("Deutsche Bank"), would be
the investment advisor rather than Investment Company Capital Corp. ("ICCC"),
also an indirect wholly owned subsidiary of Deutsche Bank.
The close of business on May 20, 2002 has been fixed as the record date
for the determination of the shareholders of the Fund entitled to notice of, and
to vote at, the Special Meeting. You are cordially invited to attend the Special
Meeting.
The Board of Directors of the Fund unanimously recommends that
shareholders vote FOR each applicable Proposal and FOR the election of each
nominee to the Board of Directors of the Fund.
This notice and related proxy material are first being mailed to
shareholders of the Fund on or about June 13, 2002. This proxy is being
solicited on behalf of the Board of Directors of the Fund.
By Order of the Board of Directors,
Daniel O. Hirsch, Assistant Secretary
Baltimore, Maryland
June 10, 2002
- --------------------------------------------------------------------------------
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE,
DATE AND SIGN EACH 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. THE PROXY IS
REVOCABLE AT ANY TIME
PRIOR TO ITS USE.
- --------------------------------------------------------------------------------
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT OR THE
PROCEDURES TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT THE
DEUTSCHE ASSET MANAGEMENT SERVICE CENTER AT 1-800-730-1313.
2
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on each enclosed proxy card,
sign and date the card(s) and return it or them in the envelope provided. If you
sign, date and return the proxy card(s) but give no voting instructions, your
shares will be voted "FOR" the approval of the new investment advisory
agreements with Deutsche Asset Management, Inc.; "FOR" a change in the Prime
Series' concentration policy; "FOR" the nominees for Director named in the
attached Proxy Statement, and, in the discretion of the persons appointed as
proxies, either "FOR" or "AGAINST" any other business that may properly arise at
the Special Meeting or any adjournments thereof. In order to avoid the
additional expense of further solicitation, we ask your cooperation in mailing
your proxy card(s) promptly. As an alternative to using the paper proxy card to
vote, you may vote shares that are registered in your name, as well as shares
held in "street name" through a broker, via the internet or telephone. To vote
in this manner, you will need the 14-digit "control" number(s) that appear on
your proxy card(s).
To vote via the internet, please access [https://vote.proxy-direct.com]
on the World Wide Web and follow the on-screen instructions.
You may also call 1-800-___-____ and vote by telephone.
If we do not receive your completed proxy card(s) after several weeks,
our proxy solicitor, Georgeson Shareholder Communications, Inc., may contact
you. Our proxy solicitor will remind you to vote your shares or will record your
vote over the phone if you choose to vote in that manner.
- --------------------------------------------------------------------------------
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense to the Fund involved in
validating your vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration on the
proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:
3
Registration Valid Signature
------------ ---------------
Corporate Accounts
(1) ABC Corp.................................................... ABC Corp.
John Doe, Treasurer
(2) ABC Corp.................................................... John Doe, Treasurer
(3) ABC Corp. c/o John Doe, Treasurer........................... John Doe
(4) ABC Corp. Profit Sharing Plan............................... John Doe, Director
Partnership Accounts
(1) The XYZ Partnership......................................... Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership........................ Jane B. Smith, General Partner
Trust Accounts
(1) ABC Trust Account........................................... Jane B. Doe, Director
(2) Jane B. Doe, Director u/t/d 12/28/78........................ Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust. F/b/o John B. Smith Jr.
UGMA/UTMA................................................... John B. Smith
(2) Estate of John B. Smith..................................... John B. Smith, Jr.,
Executor
4
DEUTSCHE BANK ALEX. BROWN CASH RESERVE FUND, INC.
One South Street
Baltimore, Maryland 21202
PROXY STATEMENT FOR THE SPECIAL MEETING OF SHAREHOLDERS
To Be Held July 30, 2002
This proxy statement ("Proxy Statement") is being furnished in
connection with the solicitation by the Board of Directors of Deutsche Bank
Alex. Brown Cash Reserve Fund, Inc. (the "Fund") on behalf of the Prime Series,
Treasury Series, and Tax-Free Series (each a "Series") to be used at the special
meeting of the Fund to be held at the offices of Deutsche Asset Management, Inc.
("DeAM, Inc."), One South Street, 30th Floor, Baltimore, Maryland 21202 on July
30, 2002 at 1:30 p.m. (Eastern time) and at any adjournments thereof (the
"Special Meeting"). This Proxy Statement and accompanying proxy card(s)
("Proxy") are expected to be mailed to shareholders on or about June 13, 2002.
The Fund is comprised of three separate series: the Prime
Series, the Treasury Series and the Tax-Free Series. The Prime Series has six
classes and the Treasury and Tax-Free Series have two classes each. Each class
has its own expense structure. However, since the proposals presented in this
Proxy Statement uniformly affect each class of each Series, shareholders of each
class of a Series may vote on all the proposals relevant to that Series, and
each vote regardless of its class has equal weight.
The Special Meeting is being held to consider and vote on the
following matters for the Fund, as indicated below and described more fully
under the corresponding Proposals discussed herein, and such other matters as
may properly come before the meeting or any adjournments thereof:
PROPOSAL I: To approve a new investment advisory
---------- agreement (a "New Advisory Agreement")
Each Series separately between the Fund, on behalf of each
Series, and Deutsche Asset Management,
Inc. ("DeAM, Inc.").
PROPOSAL II: To approve a change in the Prime
----------- Series' concentration policy.
Prime Series only
PROPOSAL III:
------------ To elect eleven Directors of the Fund
All Series together to hold office until their respective
successors have been duly elected and
qualified or until their earlier
resignation or removal, whose terms
will be effective on the date of the
Special Meeting or, in the event of an
adjournment or adjournments of the
Special Meeting, such later date as
shareholder approval is obtained.
The appointed proxies will vote on any other business as may
properly come before the Special Meeting or any adjournments thereof.
Shareholders of each Series are to consider the approval of a
New Advisory Agreement between DeAM, Inc., an affiliate of the current
investment advisor for the Series, and the Fund, on behalf of such Series.
Shareholders of the Prime Series are to consider the approval
of a change to its concentration policy to require it, under normal business
conditions, to invest more than 25% of its assets in securities of issuers in
the financial services industry.
1
The shareholders of the Fund are also to consider the election
of Richard R. Burt, S. Leland Dill, Martin J. Gruber, Richard T. Hale, Joseph R.
Hardiman, Richard J. Herring, Graham E. Jones, Rebecca W. Rimel, Philip
Saunders, Jr., William N. Searcy and Robert H. Wadsworth (the "Director
Nominees") as Directors of the Fund. Messrs. Burt, Hale, Hardiman and Wadsworth
and Ms. Rimel currently serve on the Board of Directors of the Fund. Messrs.
Dill, Jones, Saunders and Searcy and Drs. Gruber and Herring currently serve on
the Boards of Directors of various other investment companies within the
Deutsche Asset Management family of funds.
Below is a chart describing which proposals affect each
Series.
- --------------------------------------------------------------------------------
SERIES PROPOSAL I PROPOSAL II PROPOSAL III
- --------------------------------------------------------------------------------
Prime Series Y Y Y
- --------------------------------------------------------------------------------
Treasury Series Y Y
- --------------------------------------------------------------------------------
Tax-Free Series Y Y
- --------------------------------------------------------------------------------
VOTING INFORMATION
Notice of the Special Meeting and a Proxy accompany this Proxy
Statement. In addition to solicitations made by mail, solicitations may also be
made by telephone, telegraph, through the internet or in person by officers or
employees of the Fund and certain financial services firms and their
representatives, who will receive no extra compensation for their services. All
costs of solicitation, including (a) printing and mailing of this Proxy
Statement and accompanying material, (b) the reimbursement of brokerage firms
and others for their expenses in forwarding solicitation material to the
beneficial owners of the Fund's shares, (c) payment to Georgeson Shareholder
Communications, Inc. for its services in soliciting Proxies and (d)
supplementary solicitations to submit Proxies, will be borne by DeAM, Inc. DeAM,
Inc. has engaged Georgeson Shareholder Communications, Inc., a proxy
solicitation firm, at an estimated total cost of $______. However, the exact
cost will depend on the amount and types of services rendered. If the Fund
records votes by telephone or through the internet, it will use procedures
designed to authenticate shareholders' identities, to allow shareholders to
authorize the voting of their shares in accordance with their instructions, and
to confirm that their instructions have been properly recorded. Proxies voted by
telephone or through the internet may be revoked at any time before they are
voted in the same manner that Proxies voted by mail may be revoked.
The most recent Annual Report of the Fund containing audited
financial statements for the fiscal year ended March 31, 2002 (the "Report"),
has previously been furnished to shareholders. An additional copy of the Report
will be furnished without charge upon request by writing to the Fund at the
address set forth on the cover of this Proxy Statement or by calling
1-800-730-1313. The Report is also available on the DeAM, Inc. website at
www.deam-us.com.
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 the
Fund are entitled to one vote each at the Special Meeting and fractional shares
are entitled to proportionate shares of one vote. If no instructions are marked
on the Proxy with respect to a specific Proposal, the Proxy will be voted "FOR"
the approval of such Proposal and in accordance with the judgment of the persons
appointed as proxies with respect to any other matter that may properly come
before the Special Meeting. Any shareholder giving a Proxy has the right to
attend the Special Meeting to vote his/her shares in person (thereby revoking
any prior Proxy) and also the right to revoke the Proxy at any time prior to its
exercise by executing a superseding Proxy or by submitting a written notice of
revocation to the Fund's secretary (the "Secretary"). To be effective, such
revocation must be received by
2
the Secretary prior to the Special Meeting. Merely attending the Special Meeting
without voting will not revoke a prior Proxy.
Deutsche Bank Trust Company Americas (formerly, Bankers Trust
Company) ("Deutsche Bank Trust") will vote any shares in accounts as to which
Deutsche Bank Trust has voting authority, and shares in any other accounts as to
which Deutsche Bank Trust is the owner of record, which are not otherwise
represented in person or by proxy at the Special Meeting. Accordingly, for all
Proposals, Deutsche Bank Trust will vote shares of the Fund over which it has
voting discretion in accordance with its fiduciary and other legal obligations,
and in its discretion may consult with the beneficial owners or other
fiduciaries. As to shares of the Fund for which Deutsche Bank Trust is the owner
of record but does not have voting discretion, and which are not otherwise
represented in person or by proxy at the Special Meeting, Deutsche Bank Trust
will vote such shares as follows: (a) with respect to Proposals I and III,
Deutsche Bank Trust will vote for, against, or abstaining, in the same
proportion as the votes cast by holders of all shares in the Fund otherwise
represented at the Special Meeting (a practice commonly referred to as "mirror"
or "echo" voting); and (b) with respect to Proposal II, Deutsche Bank Trust will
vote according to instructions it receives from the beneficial owner. If no
instructions are received with respect to (b), Deutsche Bank Trust will neither
vote "for" nor "against" Proposal II, but may return a proxy indicating such
shares are "present" for purposes of determining a quorum.
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 Special Meeting to permit further solicitation of Proxies
with respect to the Proposal. In determining whether to adjourn the Special
Meeting, the following factors may be considered: the nature of the proposals
that are the subject of the Special Meeting, the percentage of votes actually
cast, the percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to shareholders with respect to
the reasons for the solicitation. Any adjournment will require the affirmative
vote of a majority of those shares represented at the Special Meeting in person
or by Proxy. A shareholder vote may be taken on one or more of the Proposals in
the Proxy Statement prior to any adjournment if sufficient votes have been
received and it is otherwise appropriate. A quorum of shareholders is
constituted by the presence in person or by proxy of the holders of, for the
Fund, a majority of the outstanding shares of the Fund entitled to vote at the
Special Meeting. For purposes of determining the presence of a quorum for
transacting business at the Special Meeting, abstentions and broker "non-votes"
(that is, Proxies from brokers or nominees indicating that these persons have
not received instructions from the beneficial owner or other persons entitled to
vote shares on a particular matter with respect to which the brokers or nominees
do not have discretionary power) will be treated as shares that are present but
which have not been voted. (See "Vote Required" for a further discussion of
abstentions and broker non-votes.)
Shareholders of record at the close of business on May 20,
2002 (the "Record Date") are entitled to notice of, and to vote at, the Special
Meeting. The number of shares of each class of each Series that were issued and
outstanding as of the Record Date are set forth in Exhibit A to this Proxy
Statement.
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.
3
Instructions for voting by telephone or through the internet are included in the
attachment to the Notice of Special Meeting of Shareholders and on the Proxy (or
Proxies) enclosed with this Proxy Statement.
Beneficial Ownership of Shares of the Fund
Exhibit B to this Proxy Statement sets forth information as of
the Record Date regarding the beneficial ownership of the Fund's shares by the
only persons known by the Fund to beneficially own more than five percent of the
outstanding shares of each class of the Fund. 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 Exhibit B. The inclusion
therein of any shares deemed beneficially owned does not constitute an admission
of beneficial ownership of the shares. [Collectively, the Directors, Director
Nominees and executive officers of the Fund own less than 1% of each class'
outstanding shares.]
Background
The Fund. The Fund is a registered open-end management
investment company established as a Maryland corporation. Investment Company
Capital Corp. ("ICCC"), located at One South Street, Baltimore, Maryland 21202,
currently acts as the investment advisor to each Series pursuant to the terms of
three separate investment advisory agreements, one for each Series (the "Current
Advisory Agreements"). Pursuant to the Current Advisory Agreements, ICCC
supervises and assists in the management of the assets of each Series and
furnishes each Series with research, statistical, advisory and managerial
services. ICCC pays the ordinary office expenses of the Fund and the
compensation, if any, of all officers and employees of the Fund and all
Directors who are "interested persons" (as defined in the Investment Company Act
of 1940 (the "1940 Act")) (each, an "Interested Director") of the Fund.
4
PROPOSAL I
APPROVAL OF NEW ADVISORY AGREEMENTS
It is proposed that shareholders of each Series approve a new
investment advisory agreement between the Fund, on behalf of that Series, and
DeAM, Inc. The New Advisory Agreements contain substantially similar provisions
and do not differ in substance from the Current Advisory Agreements pursuant to
which services are provided to the Series except for the dates of execution,
effectiveness and initial term, certain changes to the "Delegation of
Responsibilities" section and except that, under the New Advisory Agreements,
DeAM, Inc., an indirect wholly owned subsidiary of Deutsche Bank, would be the
investment advisor rather than ICCC. See "Differences Between the Current and
New Advisory Agreements."
The Advisory Agreements
The Current Advisory Agreements. ICCC currently serves as
investment advisor to each Series (as discussed earlier) pursuant to the Current
Advisory Agreements. The Current Advisory Agreements were initially approved by
the Board, including a majority of those Board members who are not "interested
persons" (as defined in the 1940 Act) of the Fund or ICCC (the "Independent
Directors").
Exhibit C to this Proxy Statement lists: (i) the date of the
Current Advisory Agreements; and (ii) the most recent date on which the Current
Advisory Agreements were approved by the Fund's Directors, including a majority
of the Independent Directors, and each Series' shareholders.
The New Advisory Agreements. The form of the New Advisory
Agreement for the Prime Series is attached to this Proxy Statement as Exhibit D.
The form of the New Advisory Agreement for the Treasury Series is attached to
this Proxy Statement as Exhibit E. The form of the New Advisory Agreement for
the Tax-Free Series is attached to this Proxy Statement as Exhibit F. The
description of the New Advisory Agreements set forth below is qualified in its
entirety by reference to Exhibits D, E and F. If shareholders approve the New
Advisory Agreements, each agreement will remain in effect for an initial term of
two years from its effective date, and may be renewed annually thereafter only
if specifically approved at least annually by the vote of "a majority of the
outstanding voting securities" (as defined in the 1940 Act; see "Vote Required"
below) of the relevant Series, or by the Board of Directors and, in either
event, the vote of a majority of the Independent Directors of the Fund, cast in
person at a meeting called for such purpose.
The New Advisory Agreements are being proposed as a means to
simplify the organizational structure of Deutsche Bank's U.S. mutual fund
operations, enhance the efficiency of their administration and promote
consistency of internal controls, compliance and regulatory oversight. The New
Advisory Agreements are to be implemented within two years of the date of the
Special Meeting upon approval of the Fund's Board of Directors, including a
majority of the Independent Directors. The deferral in implementing the New
Advisory Agreements may be needed to permit a sufficient amount of time to plan,
prepare and institute the necessary arrangements to consolidate Deutsche Bank's
U.S. mutual fund operations.
Differences Between the Current and New Advisory Agreements.
As stated above, the terms and conditions -- including the services to be
provided and the fees to be paid therefor -- of the New Advisory Agreements
contain substantially similar provisions and do not differ in substance from the
Current Advisory Agreements except for the dates of execution, effectiveness and
initial term, and except that, under the New Advisory Agreements, DeAM, Inc., an
indirect wholly owned subsidiary of Deutsche
5
Bank, would be the investment advisor rather than ICCC and the "Delegation of
Responsibilities" section of the agreement has been revised.
Both the Current Advisory Agreements and the New Advisory
Agreements permit the investment advisor, ICCC and DeAM, Inc. respectively, to
delegate the performance of advisory services to another party under certain
conditions. The New Advisory Agreements revise this provision as it applies to
the delegation of authority to a company that the investment advisor controls,
is controlled by or under common control with, in the following ways:
1. The New Advisory Agreements clarify that a delegation must
be approved in advance by both the Independent Directors
and the full Board of Directors of the Fund, whereas the
Current Advisory Agreements state that a delegation must
be approved by the Board of Directors and the shareholders
of the relevant Series, to the extent required by the 1940
Act;
2. The New Advisory Agreements clarify that DeAM, Inc. may,
with the prior approval of the Board of Directors and the
Independent Directors, adjust the duties of the delegate,
the portion of any Series' assets being managed by the
delegate, and the fees that DeAM, Inc. shall pay to the
delegate; and
3. While both the Current Advisory Agreements and the New
Advisory Agreements require the investment advisor to
supervise the performance of any delegate, the New
Advisory Agreements clarify that any delegation shall not
relieve DeAM, Inc. of any of its obligations under the New
Advisory Agreements.
Other provisions of the New Advisory Agreements are
substantially similar to the Current Advisory Agreements. Under the terms of the
New Advisory Agreements, DeAM, Inc. agrees to provide each Series with
investment advisory services, including the investment and reinvestment of the
cash, securities or other properties comprising the Series' assets. Subject to
the supervision and control of the Board of Directors, DeAM, Inc. agrees, in
carrying out its obligations, to conform to (a) all applicable provisions of the
1940 Act and any rules and regulations adopted thereunder, (b) the provisions of
the Fund's registration statement, (c) the provisions of the Fund's Articles of
Incorporation and By-Laws, and (d) any other applicable provisions of state and
federal law.
Under the terms of each New Advisory Agreement, DeAM, Inc.
agrees to (a) supervise and manage all aspects of the Series' operations, except
for distribution services; (b) formulate and implement continuing programs for
the purchases and sales of securities, consistent with the investment objective
and policies of the Series, (c) provide the Series with such executive,
administrative and clerical services as are deemed advisable by the Fund's Board
of Directors; (d) provide the Series with, or obtain for it, adequate office
space and all necessary office equipment and services for the Fund's principal
office; (e) obtain and evaluate pertinent information about significant
developments and certain other information, whether affecting the economy
generally or the Series; (f) determine which issuers and securities will be
represented in the portfolio and regularly report thereon to the Fund's Board of
Directors; (g) take all actions necessary to carry into effect the Series'
purchase and sale programs; (h) supervise the operations of the Series' transfer
and dividend disbursing agent; (i) provide the Series with such administrative
and clerical services for the maintenance of certain shareholder records, as are
deemed advisable by the Fund's Board of Directors; and, (j) arrange, but not pay
for, the periodic updating of prospectuses and supplements thereto, proxy
material, tax returns, reports to the shareholders of the Series and reports to
and filings with the Securities and Exchange Commission and state Blue Sky
authorities, which may be required for the Series.
6
The investment advisory fee rate proposed to be charged to
each Series under its New Advisory Agreement is the same as the investment
advisory fee rate charged to that Series under its Current Advisory Agreement.
The advisory fee rate paid by each Series under its Current Advisory Agreement
and the advisory fee paid by each Series for the most recent fiscal year is set
forth in Exhibit G to this Proxy Statement. Exhibit G also sets forth other fees
paid to ICCC and its affiliates during the last fiscal year of the Fund.
Generally. If approved, the New Advisory Agreements will
remain in effect for an initial term of two years (unless sooner terminated),
and shall remain in effect from year to year thereafter if approved annually (1)
by the Board of Directors or by the holders of a majority of the Series'
outstanding voting securities and (2) by a majority of the Independent Directors
who are not parties to such contract or agreement. Like the Current Advisory
Agreements, each New Advisory Agreement will terminate upon assignment by any
party and is terminable, without penalty, on 60 days' written notice by the
Board of Directors or by vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of the Series or upon 60 days' written notice by
DeAM, Inc.
The services of DeAM, Inc. are not deemed to be exclusive and
nothing in the New Advisory Agreements prevents it or its affiliates from
providing similar services to other investment companies, and their series, and
other clients (whether or not their investment objectives and policies are
similar to those of the Series) or from engaging in other activities. In
addition, DeAM, Inc. is obligated to pay those expenses specified in the New
Advisory Agreements associated with providing the services contemplated by the
New Advisory Agreements. The Fund bears certain other expenses including the
fees of the Fund's Board. The Fund also pays any extraordinary expenses
incurred.
Under each New Advisory Agreement, DeAM, Inc. will exercise
its best judgment in rendering its advisory services. DeAM, Inc. will not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Series in connection with the matters to which the New Advisory Agreement
relate, provided that nothing therein shall be deemed to protect or purport to
protect DeAM, Inc. against any liability to the Series or to its shareholders to
which DeAM, Inc. could otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or by
reason of DeAM, Inc.'s reckless disregard of its obligations and duties under
each New Advisory Agreement.
DeAM, Inc., will allocate and place all orders for portfolio
transactions of the Series' securities. When it can be done consistently with
the policy of obtaining the most favorable net results, DeAM, Inc. may place
such orders with brokers and dealers who provide market, statistical and other
research information to the Fund or DeAM, Inc. DeAM, Inc. is authorized, under
certain circumstances, when placing portfolio transactions for equity securities
to pay a brokerage commission (to the extent applicable) in excess of that which
another broker might charge for executing the same transaction on account of the
receipt of brokerage or research services. When it can be done consistently with
obtaining best execution, in selecting brokers and dealers with which to place
portfolio transactions for the Series, DeAM, Inc. may consider its affiliates
and also firms that sell shares of mutual funds advised by DeAM, Inc. or
recommend the purchase of such funds.
Management of the Fund
The Current Advisor. ICCC, located at One South Street,
Baltimore, Maryland 21202, currently acts as the investment advisor to each
Series. ICCC is registered as an investment advisor and serves as investment
advisor to 25 other investment companies. As of March 31, 2002, ICCC had
approximately $9.6 billion of assets under management. ICCC is an indirect
wholly owned subsidiary of Deutsche Bank.
7
The principal occupations of each director and principal
executive officer of ICCC are set forth in Exhibit H to this Proxy Statement.
The principal business address of each director and principal executive officer
as it relates to his or her duties at ICCC, is One South Street, Baltimore,
Maryland 21202.
The Proposed New Advisor. DeAM, Inc., an indirect wholly owned
subsidiary of Deutsche Bank, is located at 280 Park Avenue, New York, New York
10017. DeAM, Inc. is registered as an investment advisor and provides a full
range of investment advisory services to institutional and retail clients. DeAM,
Inc. serves as investment advisor to 30 other investment companies and
investment sub-advisor to 53 other investment companies. See Exhibit I to this
Proxy Statement for a list of those investment companies that DeAM, Inc. advises
that have investment objectives similar to those of the Fund, together with
information regarding the fees charged to those companies. As of March 31, 2002,
DeAM, Inc. had approximately $97 billion of assets under management.
The principal occupations of each director and principal
executive officer of DeAM, Inc. are set forth in Exhibit H to this Proxy
Statement. The principal business address of each director and principal
executive officer as it relates to his or her duties at DeAM, Inc., is 280 Park
Avenue, New York, New York 10017.
Deutsche Bank. Deutsche Bank, Aktiengesellschaft, Taunusalage
12, D-60262, Frankfurt am Main, Federal Republic of Germany, is an international
commercial and investment banking group and a leading integrated provider of
financial services to institutions and individuals throughout the world. It is
organized in Germany and is a publicly traded entity. Its shares trade on many
exchanges including the New York Stock Exchange and Xetra (German Stock
Exchange). It is engaged in a wide range of financial services, including
retail, private and commercial banking, investment banking and insurance.
Deutsche Bank has combined all of its investment management businesses to form
Deutsche Asset Management (the marketing name in the US for the asset management
activities of Deutsche Bank and its subsidiaries), which as of March 31, 2002
had more than $[231] billion in assets under management. Deutsche Asset
Management acts as investment manager to [96] US open and closed-end investment
companies, which in the aggregate had approximately $[53] billion of assets
under management as of March 31, 2002.
Directors and Officers. Biographical information about the
Director Nominees and the executive officers is provided under Proposal III in
this Proxy Statement. Certain other information about the Director Nominees and
each executive officer of the Fund is provided in Exhibit J to this Proxy
Statement.
Recommendation of the Board
At a meeting of the Board of Directors of the Fund held on
March 26, 2002 called for the purpose of, among other things, voting on approval
of the New Advisory Agreements, the Board, including the Independent Directors,
unanimously approved, subject to shareholder approval, the New Advisory
Agreements. In reaching this conclusion, the Board of Directors obtained such
information as they deemed reasonably necessary to approve DeAM, Inc. as
investment advisor to each Series. In approving the New Advisory Agreements, the
Independent Directors considered numerous factors, including, among other things
(i) the standards set forth in written materials previously provided to the
Independent Directors by their counsel and (ii) representations by Fund
management that the change to
8
DeAM, Inc., an affiliate of ICCC, is a matter of administrative convenience and
that no material changes will result with respect to the services currently
provided to each Series.
Based on the factors discussed above, and others, the Board of
Directors determined that the New Advisory Agreements are fair and reasonable
and in the best interest of each Series and its shareholders. Based on all of
the foregoing, at a meeting on March 26, 2002, the Board of Directors, including
the Independent Directors of the Fund, voted unanimously to approve the New
Advisory Agreements and to recommend them to the shareholders of the respective
Series for their approval.
Required Vote
Approval of each New Advisory Agreement requires the
affirmative vote of a "majority of the outstanding voting securities" (as
defined in the 1940 Act; see "Vote Required") of the Series.
Therefore, after careful consideration, the Board of
Directors, including the Independent Directors, recommends that the shareholders
of each Series vote "FOR" the approval of the New Advisory Agreements as set
forth in this Proposal.
If the New Advisory Agreements are approved by the
shareholders, the agreements will become effective on their respective effective
dates. If the New Advisory Agreement for a Series is not approved by the
shareholders, the Current Advisory Agreement for that Series will continue in
effect, subject to any requisite approval(s) of the Board of Directors or the
Series' respective shareholders, and the Board of Directors will consider what
other action is appropriate based upon the interests of the shareholders.
9
PROPOSAL II
APPROVAL OF A CHANGE IN THE PRIME SERIES'
CONCENTRATION POLICY
It is proposed that shareholders of the Prime Series approve a
change in the Series' fundamental policy concerning concentration. Currently,
the Prime Series does not concentrate its investments, i.e., under normal
business conditions it will not invest more than 25% of its total assets in
securities of issuers in the same industry or a group of industries. The
proposed change in the Prime Series' concentration policy would require the
Series to invest, under normal business conditions, more than 25% of its total
assets in obligations of banks and other financial institutions.
As disclosed in the current prospectus for the Prime Series,
obligations of banks and other financial institutions are among the principal
investments of the Prime Series. Approval of this Proposal will enable the Prime
Series to invest more than 25% of its total assets in such obligations. These
obligations may include, but are not limited to, certificates of deposit,
bankers' acceptances, time deposits, commercial paper, and other obligations
issued by US or foreign banks, and other financial institutions.
The Board of Directors believes that changing the Prime
Series' fundamental policy concerning concentration would provide the Series
with greater flexibility for future contingencies. Fund management believes that
the change is desirable because an increasing number of instruments suitable for
investment by money market funds are issued or guaranteed by banks and other
financial institutions. In addition, the change would conform the Series' policy
with that of certain other money market funds managed by the same portfolio
manager.
The Prime Series will continue to pursue the same investment
objective, seeking as high a level of current income as is consistent with
preservation of capital and liquidity, by investing in high quality short-term
money market instruments. The Prime Series will continue to invest solely in
US dollar-denominated securities presenting minimal credit risk and maturing in
397 days or less. The Prime Series will continue to maintain an average maturity
of 90 days or less. All securities purchased by the Prime Series will continue
to be, at the time of purchase, rated in one of the two highest rating
categories by Moody's Investors Service, Inc., Standard & Poor's Ratings Group,
or Fitch, Inc. or, if unrated, determined to be of similar quality by the
investment advisor.
The Prime Series will continue to be subject to the risks
disclosed in its current prospectus, except that if this Proposal is approved,
the Prime Series will increase its investment in obligations of banks and other
financial services entities. This increased investment will cause the Prime
Series to be subject to the risks peculiar to banks and other financial
institutions to a greater extent than if its investments were not so
concentrated. These risks include those associated with changing interest rates,
credit defaults, banking regulations, and changing economic conditions.
Recommendation of the Board
The Board of Directors of the Fund on May __, 2002
[unanimously] approved by written consent, subject to shareholder approval, the
amendment of the Prime Series' concentration policy to require the Series to
invest, under normal business conditions, more than 25% of its total assets in
obligations of banks and other financial institutions. In approving the change
in the Prime Series' concentration policy, the Board of Directors requested and
obtained such information as they deemed reasonably necessary to evaluate the
Proposal. [In this connection, the Board of Directors considered, among other
factors, DeAM, Inc.'s experience in managing money market funds
10
having a concentration policy substantially similar to that proposed herein and
the performance of those funds, the availability of high quality debt
obligations of financial services entities, the characteristics of the
obligations in which the Series would concentrate and the market in which those
obligations are traded, and the particular risks associated with concentrating
the Prime Series' investments in the financial services industry].
Based on these and other factors, the Board of Directors
determined it would be in the best interests of the Prime Series and its
shareholders if the Series concentrated its investments in debt obligations of
banks and financial institutions. Accordingly, the Board of Directors
[unanimously] approved by written consent to change the Prime Series'
concentration policy to require it to invest, under normal business conditions,
more than 25% of its total assets in debt obligations of banks and financial
institutions.
Required Vote
Approval of the change in the Prime Series' concentration
policy requires the affirmative vote of a "majority of the outstanding voting
securities" (as defined in the 1940 Act; see "Vote Required") of the Series.
Therefore after careful consideration, the Board of Directors
recommends that shareholders of the Prime Series vote "FOR" the approval of a
change in the Prime Series' concentration policy.
If the change in the Prime Series' concentration policy is
approved by shareholders, the new policy will take effect as soon as
practicable. If the change in the Prime Series' concentration policy is not
approved by shareholders, the Series' current policy of not concentrating its
investments in any single industry or group of industries will continue in
effect and the Board of Directors will consider what other action is appropriate
based upon the interests of the shareholders.
11
PROPOSAL III
ELECTION OF NOMINEES TO THE BOARD OF DIRECTORS
OF THE FUND
It is proposed that eleven Director Nominees are to be elected
at the Special Meeting to comprise the entire Board of Directors of the Fund to
serve until their successors have been duly elected and qualified or until their
earlier resignation or removal. The Independent Director Nominees were recently
selected by a Nominating Committee of the Board comprised entirely of the
Independent Directors of the Board and nominated by the full Board at a meeting
held on March 26, 2002. If elected, the terms of the eleven Director Nominees
will begin on the date of the Special Meeting or, in the event of an adjournment
or adjournments of the Special Meeting, such later date as shareholder approval
is obtained, upon their respective acceptances of their election in writing (the
"Effective Date"); until that time, the current Board members will continue
their terms. It is anticipated that Messrs. Levy, McDonald, Semans and Vogt,
each a current member of the Board of Directors, will resign effective the
Effective Date if Proposal III is approved by the shareholders of the Fund. The
names and ages of the Director Nominees, their principal occupations during the
past five years and certain of their other affiliations are provided below. No
Independent Director or Independent Director Nominee of the Fund serves or will
serve as an officer of the Fund. Each of the Director 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 election of the Director Nominees named below. If
any Director Nominee is unable or unavailable to serve, the persons named in the
Proxies will vote the Proxies for such other person(s) as the Board of Directors
may recommend.
The nomination of these persons to serve as the Board of
Directors of the Fund reflects an overall plan to coordinate and enhance the
efficiency of the governance of the Fund and of certain other investment
companies that are managed, advised, sub-advised or administered by DeAM, Inc.
(along with certain other investment companies managed, advised or administered
by ICCC) (the "DeAM Funds"). The proposal concerning the size and composition of
the Board of Directors was suggested to the Board by ICCC and reviewed by the
current Independent Directors of the Board. Messrs. Burt, Hale (interested
director), Hardiman and Wadsworth and Ms. Rimel currently serve on the Board of
Directors of the Fund. Each of the other Independent Director Nominees already
serves as an independent board member for one or more other DeAM Funds and
understands the operations of the fund complex.
ICCC recommended, and the Board agreed, that the Fund should
be governed by a larger Board of Directors composed of the same members as are
expected to govern certain other DeAM Funds. Presently, the Board membership of
the Fund and the board membership of the other DeAM Funds are not identical.
Nine persons currently serve on the Board of Directors of the Fund and between
eight and nine persons currently serve on the boards of the other DeAM Funds. If
shareholders elect each of the Director Nominees, certain of the existing
Directors will be joined by certain of the board members of the other DeAM
Funds. Although the By-Laws of the Fund provide that the Board of Directors may
consist of a maximum of fifteen directors, Fund management proposed, and the
Board agreed, that only eleven Director Nominees be submitted for election.
Proxies cannot be voted for a greater number of persons than the number of
Director Nominees named.
It is currently anticipated that the boards of the other DeAM
Funds will approve the expansions of their boards and the appointment of new
board members so that each of the DeAM Funds' boards is ultimately identically
comprised.
12
On June 4, 1999, Bankers Trust Company, the parent company of
ICCC at that time, merged with Deutsche Bank. This merger and subsequent change
in control of ICCC required compliance with Section 15(f) of the 1940 Act. At
that time, pursuant to Section 15(f), the Board declared its intention that at
least 75% of its members would be disinterested persons within the contemplation
of Section 15(f) and would remain disinterested persons for at least three years
after the merger. The Board has complied with this provision and will continue
to be in compliance if this Proposal to elect directors is approved.
The following information is provided for each Director
Nominee and executive officer of the Fund's Board as of the end of the most
recently completed calendar year. The first section of the table lists
information for each Director Nominee who is an Independent Director Nominee.
Information for the Interested Director Nominee follows. The Interested Director
Nominee is considered to be an interested person as defined by the 1940 Act
because of his employment with DeAM, Inc. The mailing address for the Director
Nominees and the executive officers with respect to Fund operations is One South
Street, Baltimore, Maryland, 21202.
INFORMATION CONCERNING DIRECTOR NOMINEES AND OFFICERS
Name, Birth Date and Business Experience and Directorships During the Number of Funds in
Position with the Fund Past 5 Years the Fund Complex to
be Overseen by
Director Nominee/1/
Independent
Director Nominees
- -----------------
Richard R. Burt Chairman, IEP Advisors, Inc. (July 1998 to present); 71
2/3/47 Chairman of the Board, Weirton Steel Corporation/2/
Director since 1999. (April 1996 to present); Member of the Board, Hollinger
International, Inc./2/ (publishing) (1995 to
present), HCL Technologies Limited (information
technology) (April 1999 to present), UBS Mutual
Funds (formerly known as Brinson and Mitchell
Hutchins families of funds) (registered
investment companies) (1995 to present); and
Member, Textron Inc./2/ International Advisory
Council (July 1996 to present). Formerly,
Partner, McKinsey & Company (consulting)
(1991-1994) and U.S. Chief Negotiator in
Strategic Arms Reduction Talks (START) with
former Soviet Union and U.S. Ambassador to the
Federal Republic of Germany (1985-1991); Member
of the Board, Homestake Mining/2/ (mining and
exploration) (1998 - February 2001), Archer
Daniels Midland Company/2/(agribusiness
operations) (October 1996-June 2001) and Anchor
Gaming (gaming software and equipment) (March
1999-December 2001). Director of 25 investment
companies managed, advised or administered by
ICCC or its affiliates.
13
Name, Birth Date and Business Experience and Directorships During the Number of Funds in
Position with the Fund Past 5 Years the Fund Complex to
be Overseen by
Director Nominee/1/
S. Leland Dill Trustee and Audit Committee Chairman, Phoenix Zweig Trust 71
3/28/30 (September 1989 to present), Phoenix Euclid Funds (May 1998
Nominee to present) (registered investment companies); Retired (since
1986). Formerly, Partner, KPMG Peat Marwick (June
1956-June 1986); Director, Vintners International
Company Inc. (wine production)(June 1989-May
1992), Coutts (USA) International (January
1992-March 2000), Coutts Trust Holdings Ltd.,
Coutts Group (March 1991-March 1999)
(international private banking arm of The Royal
Bank of Scotland); General Partner, Pemco
(insurance) (June 1979-June 1986). Trustee of ___
investment companies managed, advised or
administered by ICCC or its affiliates.
Martin J. Gruber Nomura Professor of Finance, Leonard N. Stern School of 71
7/15/37 Business, New York University (1964 to present); Director,
Nominee College Retirement Equities Fund (2000 to present); Japan
Equity Fund, Inc. (1992 to present), Thai Capital Fund, Inc.
(2000 to present) and Singapore Fund, Inc. (2000 to present)
(registered investment companies). Formerly, Director, S.G.
Cowen Mutual Funds (1985 to 2001). Trustee of ___ investment
companies managed, advised or administered by ICCC or its
affiliates.
Richard J. Herring Jacob Safra Professor of International Banking and 71
2/18/46 Professor, Finance Department, The Wharton School,
Nominee University of Pennsylvania (1972 to present); Director,
Lauder Institute of International Management
Studies (2000 to present); Co-Director, Wharton
Financial Institutions Center (2000 to present)
and Member, Shadow Financial Regulatory Committee
(1990 to present). Trustee of ___ investment
companies managed, advised or administered by
ICCC or its affiliates.
14
Name, Birth Date and Business Experience and Directorships During the Number of Funds in
Position with the Fund Past 5 Years the Fund Complex to
be Overseen by
Director Nominee/1/
Joseph R. Hardiman Private Equity Investor (1997 to present); Director, 71
05/27/37 Soundview Technology Group Inc. (investment banking) (July
Director since 1998. 1998 to present), Corvis Corporation/2/ (optical networking
equipment) (July 2000 to present), Brown Investment Advisory
& Trust Company (investment advisor) (February 2001 to
present), The Nevis Fund (registered investment company)
(July 1999 to present), and ISI Family of Funds (registered
investment companies) (March 1998 to present). Formerly,
Director, Circon Corp./2/ (medical instruments) (November
1998-January 1999); President and Chief Executive Officer,
The National Association of Securities Dealers, Inc. and The
NASDAQ Stock Market, Inc. (1987-1997); Chief Operating
Officer of Alex. Brown & Sons Incorporated (now Deutsche
Bank Securities Inc.) (1985-1987); General Partner, Alex.
Brown & Sons Incorporated (now Deutsche Bank Securities
Inc.) (1976-1985). Director of 23 investment companies
managed, advised or administered by ICCC or its affiliates.
Graham E. Jones Senior Vice President, BGK Properties, Inc. (1994 to 71
01/31/33 present); Trustee, 8 open-end mutual funds managed by Weiss,
Nominee Peck & Greer (1985 to present) and Trustee of 21 open-end
mutual funds managed by Sun Capital Advisers, Inc. (1998 to
present). Formerly, Director of open-end and closed-end
mutual funds managed by Morgan Stanley Investment Management
Inc. (1987-2001). Trustee of 12 investment companies
managed, advised or administered by ICCC or its affiliates.
Rebecca W. Rimel President and Chief Executive Officer, The Pew Charitable 71
4/10/51 Trusts (charitable foundation) (1994 to present) and
Director since 1995. Director and Executive Vice President, The Glenmede Trust
Company (investment trust and wealth management)
(1994 to present). Formerly, Executive Director,
The Pew Charitable Trusts (1988-1994) and
Director, ISI Family of Funds (registered
investment companies) (1997-1999). Director of 25
investment companies managed, advised or
administered by ICCC or its affiliates.
15
Name, Birth Date and Business Experience and Directorships During the Number of Funds in
Position with the Fund Past 5 Years the Fund Complex to
be Overseen by
Director Nominee/1/
Philip Saunders, Jr. Principal, Philip Saunders Associates (Economic and 71
10/11/35 Financial Consulting) (1998 to present). Formerly,
Nominee Director, Financial Industry Consulting, Wolf & Company
(consulting)(1987-1988); President, John Hancock Financial
Services (1984-1986); Senior Vice President of Treasury and
Financial Services, John Hancock Mutual Life Insurance
Company, Inc. (1982-1986). Trustee of ___ investment
companies managed, advised or administered by ICCC or its
affiliates.
William N. Searcy Pension & Savings Trust Officer, Sprint Corporation/2/ 71
09/03/46 (telecommunications) (1989 to present); Trustee and Chairman
Nominee of the Audit Committee, Sun Capital Advisers Trust (1998 to
present). Trustee of ___ investment companies managed,
advised or administered by ICCC or its affiliates.
Robert H. Wadsworth President, Robert H. Wadsworth Associates, Inc. (consulting 71
1/29/40 firm) (1982 to present); President and Director, Trust for
Director since 1999. Investment Managers (registered investment company) (1999 to
present); Director, The Germany Fund Inc. (1986 to present),
The New Germany Fund, Inc. (1992 to present) and Central
European Equity Fund, Inc. (1986 to present). Formerly
President, Investment Company Administration, L.L.C. (1992*-
July 2001); President, Treasurer and Director, First Fund
Distributors, Inc. (1990 - January 2002); Vice President,
Professionally Managed Portfolios and Advisors Series Trust
(registered investment companies) (dates) and President,
Guinness Flight Investment Funds, Inc. (registered
investment companies) (dates). Director of 25 investment
companies managed, advised or administered by ICCC or its
affiliates.
* Inception date of the corporation which was the
predecessor to the LLC.
16
Name, Birth Date and Business Experience and Directorships During the Number of Funds in
Position with the Fund Past 5 Years the Fund Complex to
be Overseen by
Director Nominee/1/
Interested Director
- -------------------
Nominee
- -------
Richard T. Hale/3/ Managing Director, Deutsche Bank Securities Inc. (formerly 71
7/17/45 Deutsche Banc Alex. Brown Inc.) and Deutsche Asset
Director since 1989 and Management (1999 to present); Director and President,
President. Investment Company Capital Corp. (registered investment
advisor) (1996 to present). Director/Director and
President, Deutsche Asset Management Mutual Funds (1989 to
present); Director, Deutsche Global Funds, Ltd. (2000 to
present), CABEI Fund (2000 to present), North American
Income Fund (2000 to present); Vice President, Deutsche
Asset Management, Inc. (2000 to present). Chartered
Financial Analyst. Formerly, Director, ISI Family of Funds
(registered investment companies) (dates). Director of 52
investment companies managed, advised or administered by
ICCC or its affiliates.
Officers
- --------
Richard T. Hale See information provided under Interested Director Nominee.
President since 2000.
Amy M. Olmert Director, Deutsche Asset Management (January 1999 to
5/14/63 present); Certified Public Accountant (1989 to present).
Secretary since 1997. Formerly, Vice President, BT Alex. Brown Incorporated,
(Deutsche Bank Securities Inc.) (1997-1999); Senior Manager,
Coopers & Lybrand L.L.P. (PricewaterhouseCoopers LLP)
(1992-1997).
17
Name, Birth Date and Business Experience and Directorships During the Number of Funds in
Position with the Fund Past 5 Years the Fund Complex to
be Overseen by
Director Nominee/1/
Charles A. Rizzo Director, Deutsche Asset Management (April 2000 to present);
8/5/57 Certified Public Accountant; Certified Management
Treasurer since 1999. Accountant. Formerly, Vice President and Department Head,
BT Alex. Brown Incorporated (Deutsche Bank Securities Inc.)
(1998-1999); Senior Manager, Coopers & Lybrand L.L.P.
(PricewaterhouseCoopers LLP) (1993-1998).
Daniel O. Hirsch Managing Director, Deutsche Asset Management (2002 to
3/27/54 present) and Director, Global Funds Ltd. (2002 to present).
Assistant Secretary since Formerly, Director, Deutsche Asset Management (1999-2002),
1999. Principal, BT Alex. Brown Incorporated, (Deutsche Bank
Securities Inc.) (1998-1999); Assistant General Counsel,
United States Securities and Exchange Commission (1993-1998).
___________
1. As of March 31, 2002, the total number of funds in the Deutsche Asset
Management Fund Complex (the "Fund Complex") is 71. The Fund Complex consists
of the following: Flag Investors Communications Fund, Flag Investors Equity
Partners Fund, Flag Investors Value Builder Fund, Emerging Growth Fund, Real
Estate Securities Fund, Short-Intermediate Income Fund, Deutsche Bank Alex.
Brown Cash Reserve Fund, Deutsche Investors Funds, Deutsche Investors
Portfolios Trust, BT Investment Funds, BT Advisor Funds, BT Institutional
Funds, BT Investment Portfolios, Morgan Grenfell Investment Trust, and VIT
Funds.
2. A publicly held company with securities registered pursuant to Section 12 of
the Securities Exchange Act of 1934.
3. Mr. Hale is a director who is an "interested person" within the meaning of
Section 2(a)(19) of the 1940 Act. Mr. Hale is Vice President of DeAM, Inc.
and a Managing Director of Deutsche Asset Management Americas, the US asset
management unit of Deutsche Bank and its affiliates.
Ms. Olmert and Messrs. Hale, Hirsch and Rizzo also hold
similar positions for other investment companies for which DeAM, Inc. or an
affiliate serves as the advisor.
Ownership in Securities of DeAM, Inc. and Related Companies
As reported to the Fund, Exhibit K to this Proxy Statement
sets forth ownership by the Independent Director Nominees and their immediate
family members of certain securities as of April 30, 2002.
18
Director Compensation Table
The following table sets forth the compensation paid to the
Independent Directors by the Fund and the Fund Complex for the fiscal year ended
March 31, 2002.
- ---------------------------------------------------------------------------------------------------------------
Name of Person, Aggregate Compensation Pension or Retirement Total Compensation from
Position from the Fund Payable to Benefits Accrued as Part the Fund and the Fund
Directors of Fund Expenses Complex Payable to
Directors
- ---------------------------------------------------------------------------------------------------------------
Richard T. Hale/1/ $0 N/A $0
Chairman and President
- ---------------------------------------------------------------------------------------------------------------
Truman T. Semans $0 N/A $0
Director/1/
- ---------------------------------------------------------------------------------------------------------------
Richard R. Burt $/2/ N/A $_________ for service on
Director ___ Boards
- ---------------------------------------------------------------------------------------------------------------
Joseph R. Hardiman $/2/ N/A $_________ for service on
Director ___ Boards
- ---------------------------------------------------------------------------------------------------------------
Louis E. Levy $/2/ N/A $_________ for service on
Director ___ Boards
- ---------------------------------------------------------------------------------------------------------------
Eugene J. McDonald $/2/ N/A $_________ for service on
Director ___ Boards
- ---------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel $/2/ N/A $_________ for service on
Director ___ Boards
- ---------------------------------------------------------------------------------------------------------------
Carl W. Vogt, Esq. $/2/ N/A $_________ for service on
Director ___ Boards
- ---------------------------------------------------------------------------------------------------------------
Robert H. Wadsworth $/2/ N/A $_________ for service on
Director ___ Boards
- ---------------------------------------------------------------------------------------------------------------
____________
1 A director who is, or may be, an 'interested person' as defined in the
1940 Act.
2 Of amounts payable to Ms. Rimel and Messrs. Burt, Hardiman, Levy,
McDonald, Vogt, and Wadsworth $, $, $, $, $, $ and $, respectively, was
deferred pursuant to a deferred compensation plan.
The Board has established the Audit and Compliance Committee,
the Nominating Committee, the Pricing Committee, the Compensation Committee and
the Executive Committee. Each committee (except for the Pricing Committee) is
composed of the current Independent Directors. In accordance with its written
charter adopted by the Board of Directors, the Audit and Compliance Committee
assists the Board in fulfilling its responsibility for oversight of the quality
and integrity of the accounting, auditing and financial reporting practices of
the Fund. It also makes recommendations to the Board as to the selection of the
independent public accountants, reviews the methods, scope and results of the
audits and audit fees charged, and reviews the Fund's internal accounting
procedures and controls. The Audit and Compliance Committee also considers the
scope and amount of non-audit services provided to the Fund, its investment
advisor and affiliates by the independent public accountants. The Nominating
Committee is charged with the duty of making all nominations for Independent
Directors to the Board of Directors. The Nominating Committee will consider
Director nominees recommended by shareholders. The Pricing Committee considers
and acts upon all questions relating to valuation of the securities in the Fund
which may arise between meetings of the Board. The Compensation Committee is
responsible for reviewing the compensation paid to the Directors for its
appropriateness, and making recommendations to the full Board with respect to
the compensation of the Directors. The Executive Committee makes recommendations
to the full Board with respect to the renewal of the Fund's agreements with its
service providers. During the Fund's most recent fiscal year the Board held six
meetings, the Audit and Compliance Committee held four meetings, the Nominating
Committee held one meeting, the Pricing Committee held one meeting, the
Compensation Committee did not meet and the Executive Committee held four
meetings. No Director attended less than 75% of the applicable meetings. If the
Nominees are elected to the Board, the Board will consider whether other
committees should be organized after it has reviewed the needs of the Fund.
19
Mr. Hale, if elected, will not be a member of the Audit and
Compliance Committee, the Nominating Committee, the Compensation Committee, or
the Executive Committee.
Retirement Plan Information
Certain funds in the Fund Complex have adopted a retirement
plan for Directors who are not employees of the Fund, [ICCC] or its respective
affiliates (the "Retirement Plan"). The Retirement Plan is unfunded and
unvested. On February 12, 2001, the Board of Directors of the Fund, as well as
each fund participating in the Retirement Plan, voted to amend the Retirement
Plan, effective January 1, 2001, as part of an overall review of the
compensation paid to Directors. The amendments provide that no further benefits
would accrue to any current or future directors and include a one-time payment
of benefits accrued under the Retirement Plan to Directors, as calculated based
on the following actuarial assumptions: (1) retirement benefits at later of age
65 and 10 years of service based on a 10% per year of service vesting schedule;
(2) a 6% interest rate; and (3) rounding all calculations to the next whole year
as of January 1, 2001. At each Director's election, this one-time payment could
be transferred into the Directors' Deferred Compensation Plan, described below.
Under the Retirement Plan in effect until December 31, 2000,
the Fund has one participant, a Director who retired effective December 31,
1996, who qualified for the Retirement Plan by serving fourteen years as a
Director and who will be paid a quarterly fee of $4,875 by certain funds in the
Fund Complex for the rest of his life. Such fees are allocated to certain funds
in the Fund Complex based upon the relative net assets of such funds to the Fund
Complex.
Any Director of the Fund who receives fees from the Fund is
permitted to defer 50% to 100% of his or her annual compensation pursuant to a
Deferred Compensation Plan. Messrs. Burt, Hardiman, Levy, McDonald, Vogt, and
Wadsworth, and Ms. Rimel have each executed a Deferred Compensation Agreement.
Currently, the deferring Directors may select from among the funds in the Fund
Complex in which all or part of their deferral account shall be deemed to be
invested. Distributions from the deferring Directors' deferral accounts will be
paid in cash, in generally equal quarterly installments over a period of ten
years.
Recommendation of the Board of Directors
The Board of Directors believes that coordinated governance
through a unified board structure will benefit the Fund.
In their deliberations, the Board of Directors considered
various matters related to the management and long-term welfare of the Fund. The
Board considered, among other factors, that coordinated governance within the
Fund Complex will reduce the possibility that the separate boards might arrive
at conflicting or inconsistent decisions regarding the policies, strategies,
operations and management of the Fund and the other DeAM Funds, and that this
will help avoid costs, confusion and complexity resulting from different or
conflicting decisions. While the Board will act in the manner it believes most
appropriate for the Fund, the Board also considered that operating with a
unified group of board members across the Fund Complex reduces the potential for
these types of conflicts while preserving the insights and experience that can
be contributed by individual members. In addition, the Board considered that a
unified group board would also allow management to reduce the total number of
board meetings it is required to attend and at which it would make repetitive
presentations each year across the Fund Complex which can be expected to make
the governance process more efficient. ICCC expends a significant amount of time
and effort preparing and coordinating materials and presentations for board
meetings. In many instances, presentations need to be made more than once on
identical or similar issues. Adopting a unified group board structure would
enable management to use time more efficiently.
20
The Board also considered that a unified group board structure
benefits the Fund by creating an experienced group of Board members who
understand the operations of the Fund and the Fund Complex and are exposed to
the wide variety of issues that arise from overseeing different types of funds.
The Board gave considerable weight to their expectation that the Fund will
benefit from the diversity and experience of the Director Nominees that would be
included in the expanded Board and from the experience that each Director
Nominee will gain by serving on the boards of a diverse group of funds. The
Board also considered, in light of the following transaction, the importance of
greater breadth and depth of expertise on the Board. On April 5, 2002, Deutsche
Bank acquired 100% of U.S.-based asset manager Zurich Scudder Investments
("Scudder") (the "Transaction"). The combined organization is the fourth largest
asset manager in the world, with approximately $900 billion in assets under
management. The Transaction is anticipated to provide greater breadth and
geographic reach to the asset management services presently provided by the
asset management entities of Deutsche Bank by making available additional
investment expertise more effectively leveraged globally through a stronger
investment platform in which research is fundamentally integrated with portfolio
management. Because of the increased size and scope of Deutsche Asset Management
after the Transaction, Deutsche Asset Management will seek to attract and retain
talented people by providing a challenging work environment, competitive
compensation and reward systems and professional development opportunities.
Management intends to build a culture of teamwork, commitment, performance and
mutual respect.
The Director Nominees have had distinguished careers in
accounting, finance, marketing and other areas and will bring a wide range of
expertise to the Board. Ten of the eleven nominees, if elected, would be
Independent Directors. Independent Directors are charged with special
responsibilities to provide an independent check on management and to approve
advisory, distribution and similar agreements between the Fund and management.
They also comprise the Board's Audit and Compliance, Nominating, Compensation
and Executive Committees.
Therefore, after careful consideration, the Board, including
the Independent Directors, recommends that the shareholders of the Fund vote
"FOR" the election of the Director Nominees as set forth in this Proposal.
If the Director Nominees are elected by the shareholders, each
Director Nominee will serve, effective the Effective Date, until his/her
successor is duly elected and qualified or until his/her earlier resignation or
removal. If the Director Nominees are not elected, the Board will consider what
action is appropriate based upon the interests of the Fund's shareholders.
21
INFORMATION CONCERNING INDEPENDENT AUDITORS
The Fund's financial statements for its most recent fiscal
year were audited by PricewaterhouseCoopers LLP ("PwC"), independent auditors.
[In addition, PwC prepares the Fund's federal and state annual income tax
returns and provides certain non-audit services to the Fund.] During the Board's
most recent consideration of the selection of auditors for the Fund, the Board
considered whether the provision of non-audit services to the Fund was
compatible with maintaining PwC's independence. The Board of Directors of the
Fund has selected PwC as the independent auditors for the Fund's fiscal year
ending March 31, 2003. PwC has been the Fund's independent auditors since
_________ ____. PwC has informed the Fund that it has no material direct or
indirect financial interest in the Fund.
Representatives of PwC are not expected to be present at the
Special Meeting but have been given the opportunity to make a statement if they
so desire and will be available should any matter arise requiring their
presence.
Audit Fees. The aggregate fees billed by PwC for professional
services rendered for the audit of the Fund's annual financial statements for
the most recent fiscal year and the review of the financial statements included
in the Fund's reports to shareholders are $______.
Financial Information Systems Design and Implementation Fees.
There were no fees billed by PwC for the most recent fiscal year for
professional services rendered for financial information systems design and
implementation services provided to the Fund, ICCC or entities that control, are
controlled by or are under common control with ICCC that provide services to the
Fund.
All Other Fees. There were $________ in fees billed by PwC for
the most recent fiscal year for other services provided to the Fund, ICCC and
entities that control, are controlled by or are under common control with ICCC
that provide services to the Fund.
OTHER INFORMATION
Portfolio Transactions
For the fiscal year ended March 31, 2002, the Fund did not pay
any brokerage commissions to affiliates of ICCC.
Principal Underwriter
The Fund's principal underwriter is ICC Distributors, Inc.
They are located at One Portland Square, Portland, Maine 04104.
VOTE REQUIRED
Approval of Proposals I and II requires the affirmative vote
of a "majority" of the outstanding shares of a Series. "Majority" (as defined in
the 1940 Act) means (as of the Record Date) the lesser of (a) 67% or more of the
shares of the Series present at the special meeting, if the holders of more than
50% of the outstanding shares of the Series are present in person or by proxy,
or (b) more than 50% of the outstanding shares of the Series. Approval of
Proposal III requires the affirmative vote of a plurality of all votes cast at
the Special Meeting, provided that a quorum is present. 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 I and II.
- --------------------------------------------------------------------------------
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, RECOMMENDS THAT THE
SHAREHOLDERS VOTE "FOR" APPROVAL OF PROPOSALS I,
II AND III. ANY UNMARKED PROXIES WILL BE SO VOTED.
- --------------------------------------------------------------------------------
22
The Board is not aware of any other matters that will come
before the Special 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 Fund does not hold regular shareholders' meetings.
Shareholders wishing to submit proposals for inclusion in a proxy statement for
a subsequent shareholders' meeting should send their written proposals to the
Secretary of the Fund 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 the Fund's meeting. Timely submission of a proposal does not,
however, necessarily mean that such proposal will be included.
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders holding at least 10% of the Fund's outstanding
voting securities (as defined in the 1940 Act) may require the calling of a
meeting of shareholders for the purpose of voting on the removal of any Director
of the Fund. Meetings of shareholders for any other purpose also shall be called
by the Board of Directors 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 THE
DEUTSCHE ASSET MANAGEMENT SERVICE CENTER AT 1-800-730-1313.
- --------------------------------------------------------------------------------
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, OR
FOLLOW THE INSTRUCTIONS FOR VOTING BY TELEPHONE OR THROUGH THE
INTERNET ON THE ENCLOSED PROXY.
- --------------------------------------------------------------------------------
By Order of the Board of Directors,
Daniel O. Hirsch, Assistant Secretary
June 10, 2002
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS OF THE FUND HOPES THAT SHAREHOLDERS WILL
ATTEND THE SPECIAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU
ARE URGED TO COMPLETE, DATE, SIGN AND RETURN EACH ENCLOSED PROXY IN
THE ACCOMPANYING ENVELOPE (OR FOLLOW THE INSTRUCTIONS FOR VOTING BY
TELEPHONE OR THROUGH THE INTERNET ON THE ENCLOSED PROXY).
- --------------------------------------------------------------------------------
23
Exhibit A
- ----------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING AS OF RECORD DATE
- ----------------------------------------------------------------------------------------------------------
Fund NUMBER OF SHARES OUTSTANDING
- ----------------------------------------------------------------------------------------------------------
Prime Series
- ----------------------------------------------------------------------------------------------------------
Deutsche Bank Alex. Brown Cash Reserve Prime Shares
- ----------------------------------------------------------------------------------------------------------
Deutsche Bank Alex. Brown Cash Reserve Prime Institutional
Shares
- ----------------------------------------------------------------------------------------------------------
Class A Shares
- ----------------------------------------------------------------------------------------------------------
Class B Shares
- ----------------------------------------------------------------------------------------------------------
Class C Shares
- ----------------------------------------------------------------------------------------------------------
Quality Cash Reserve Shares
- ----------------------------------------------------------------------------------------------------------
Treasury Series
- ----------------------------------------------------------------------------------------------------------
Deutsche Bank Alex. Brown Cash Reserve Treasury Shares
- ----------------------------------------------------------------------------------------------------------
Deutsche Bank Alex. Brown Cash Reserve Treasury
Institutional Shares
- ----------------------------------------------------------------------------------------------------------
Tax-Free Series
- ----------------------------------------------------------------------------------------------------------
Deutsche Bank Alex. Brown Cash Reserve Tax-Free Shares
- ----------------------------------------------------------------------------------------------------------
Deutsche Bank Alex. Brown Cash Reserve Tax-Free
Institutional Shares
- ----------------------------------------------------------------------------------------------------------
A-1
Exhibit B
5% Shareholders*
DEUTSCHE BANK ALEX. BROWN Class A Shares Class B Shares Class C Shares
CASH RESERVE FUND,
INC.--PRIME SERIES
Name and Address of Shares Percent Shares Percent Shares Percent
- ------------------- ------ ------- ------ ------- ------ -------
Beneficial Owner Beneficially Owned Ownership Beneficially Owned Ownership Beneficially Owned Ownership
- ---------------- ------------------ --------- ------------------ --------- ------------------ ---------
of of of
-- -- --
Outstanding Outstanding Outstanding
----------- ----------- -----------
Shares Shares Shares
------ ------ ------
* [The Directors, the Director Nominees, the executive officers of the Fund and
the Directors and executive officers as a group own less than 1% of each class'
outstanding shares.]
B-1
5% Shareholders*
DEUTSCHE BANK ALEX. BROWN Cash Reserve Prime Shares Cash Reserve Prime Quality Cash Reserve Prime
CASH RESERVE FUND, Institutional Shares Shares
INC.--PRIME SERIES
Name and Address of Shares Percent Shares Percent Shares Percent
- ------------------- ------ ------- ------ ------- ------ -------
Beneficial Owner Beneficially Owned Ownership Beneficially Owned Ownership Beneficially Owned Ownership
- ---------------- ------------------ --------- ------------------ --------- ------------------ ---------
of of of
-- -- --
Outstanding Outstanding Outstanding
----------- ----------- -----------
Shares Shares Shares
------ ------ ------
* [The Directors, the Director Nominees, the executive officers of the Fund and
the Directors and executive officers as a group own less than 1% of each class'
outstanding shares.]
B-2
5% Shareholders*
DEUTSCHE BANK ALEX. BROWN Cash Reserve Treasury Shares Cash Reserve Treasury
CASH RESERVE FUND, Institutional Shares
INC.--TREASURY SERIES
Name and Address of Shares Percent Ownership Shares Percent Ownership
- ------------------- ------ ----------------- ------ -----------------
Beneficial Owner Beneficially Owned of Outstanding Shares Beneficially Owned of Outstanding Shares
- ---------------- ------------------ --------------------- ------------------ ---------------------
* [The Directors, the Director Nominees, the executive officers of the Fund and
the Directors and executive officers as a group own less than 1% of each class'
outstanding shares.]
B-3
5% Shareholders*
DEUTSCHE BANK ALEX. BROWN Cash Reserve Tax-Free Shares Cash Reserve Tax-Free
CASH RESERVE FUND, Institutional Shares
INC.--TAX-FREE SERIES
Name and Address of Shares Percent Ownership Shares Percent Ownership
- ------------------- ------ ----------------- ------ -----------------
Beneficial Owner Beneficially Owned of Outstanding Shares Beneficially Owned of Outstanding Shares
- ---------------- ------------------ --------------------- ------------------ ---------------------
* [The Directors, the Director Nominees, the executive officers of the Fund and
the Directors and executive officers as a group own less than 1% of each class'
outstanding shares.]
B-4
Exhibit C
- -------------------------------------------------------------------------------------------
Date Last Approved By Fund's
- -------------------------------------------------------------------------------------------
Series (Fiscal Year) Date of Current
Advisory Agreement Directors Shareholders
- -------------------------------------------------------------------------------------------
Prime Series (3/31) June 4, 1999 September 25, 2001 October 7, 1999*
- -------------------------------------------------------------------------------------------
Treasury Series (3/31) June 4, 1999 September 25, 2001 October 7, 1999*
- -------------------------------------------------------------------------------------------
Tax-Free Series (3/31) June 4, 1999 September 25, 2001 October 7, 1999*
- -------------------------------------------------------------------------------------------
* Submitted for shareholder vote because the merger on June 4, 1999 between
Bankers Trust Corporation, the indirect parent of Investment Company Capital
Corp. at that time, and a US subsidiary of Deutsche Bank AG may have arguably
resulted in an assignment, and, therefore, termination of the investment
advisory agreements.
C-1
Exhibit D
DEUTSCHE BANK ALEX. BROWN CASH RESERVE FUND, INC. - PRIME SERIES
FORM OF INVESTMENT ADVISORY AGREEMENT
-------------------------------------
THIS AGREEMENT is made as of the ____ day of ________, 200_ by and
between DEUTSCHE BANK ALEX. BROWN CASH RESERVE FUND, INC., a Maryland
corporation (the "Fund"), and DEUTSCHE ASSET MANAGEMENT, INC., a Delaware
corporation (the "Advisor"), with respect to the following recital of fact:
WHEREAS, the Fund is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment advisor; and
WHEREAS, the Fund's Articles of Incorporation authorize the Board of
Directors of the Fund to classify or reclassify authorized but unissued shares
of the Fund; and
WHEREAS, the Fund's Board of Directors has authorized issuance of three
series of shares with a par value of $.001 representing interests in three
portfolios: the Prime Series, the Treasury Series and the Tax-Free Series (each
of the existing portfolios and any portfolios hereafter added shall be referred
to collectively as the "Series"); and
WHEREAS, the Fund and the Advisor desire to enter into an agreement to
provide investment advisory and administrative services for the Fund's Prime
Series (the "Prime Series") on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Investment Advisor. The Fund hereby appoints the
Advisor to act as the investment advisor to the Prime Series. The Advisor shall
manage the Prime Series' affairs and shall supervise all aspects of the Prime
Series' operations (except as otherwise set forth herein), including the
investment and reinvestment of the cash, securities or other properties
comprising the Prime Series' assets, subject at all times to the policies and
control of the Fund's Board of Directors. The Advisor shall give the Prime
Series the benefit of its best judgment, efforts and facilities in rendering its
services as Advisor.
2. Duties of Investment Advisor. In carrying out its obligations under
Section 1 hereof, the Advisor shall:
(a) supervise and manage all aspects of the Prime Series' operations;
(b) formulate and implement continuing programs for the purchases and
sales of securities, consistent with the investment objective and policies
of the Prime Series;
(c) provide the Prime Series with such executive, administrative and
clerical services as are deemed advisable by the Fund's Board of Directors;
D-1
(d) provide the Prime Series with, or obtain for it, adequate office
space and all necessary office equipment and services, including telephone
service, heat, utilities, stationery supplies and similar items for the
Fund's principal office;
(e) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic, foreign
or otherwise, whether affecting the economy generally or the Prime Series,
and whether concerning the individual issuers whose securities are included
in the Prime Series or the activities in which they engage, or with respect
to securities which the Advisor considers desirable for inclusion in the
Prime Series;
(f) determine which issuers and securities shall be represented in the
Prime Series and regularly report thereon to the Fund's Board of Directors;
(g) take all actions necessary to carry into effect the Fund's purchase
and sale programs with respect to its Prime Series;
(h) supervise the operations of the Prime Series' transfer and dividend
disbursing agent;
(i) provide the Prime Series with such administrative and clerical
services for the maintenance of certain shareholder records, as are deemed
advisable by the Fund's Board of Directors; and,
(j) arrange, but not pay for, the periodic updating of prospectuses and
supplements thereto, proxy material, tax returns, reports to the
shareholders of the Prime Series and reports to and filings with the
Commission and state Blue Sky authorities, which may be required for the
Prime Series.
3. Broker-Dealer Relationship. In the event that the Advisor is
responsible for decisions to buy and sell securities for the Prime Series,
broker-dealer selection, and negotiation of its brokerage commission rates, the
Advisor's primary consideration in effecting a security transaction will be
execution at the most favorable price. The Fund understands that a substantial
majority of the Prime Series' transactions will be transacted with primary
market makers acting as principal on a net basis, with no brokerage commissions
being paid by the Fund. Such principal transactions may, however, result in a
profit to the market makers. In certain instances the Advisor may make purchases
of underwritten issues at prices which include underwriting fees. In selecting a
broker-dealer to execute each particular transaction, the Advisor will take the
following into consideration: the best net price available; the reliability,
integrity and financial condition of the broker-dealer; the size of and
difficulty in executing the order; and the value of the expected contribution of
the broker-dealer to the investment performance of the Prime Series on a
continuing basis. Accordingly, the price to the Fund in any transaction may be
less favorable than that available from another broker-dealer if the difference
is reasonably justified by other aspects of the portfolio execution services
offered. Subject to such policies as the Board of Directors may determine, the
Advisor shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides brokerage and research
services to the Advisor an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if the Advisor
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Advisor's overall responsibilities with respect to the Prime Series. The Advisor
is further authorized to allocate the orders placed by it on behalf of the Prime
Series to such brokers and dealers who also provide research or statistical
material or other services to the Fund or the Advisor. Such allocation shall be
in such amounts and proportions as the Advisor shall determine and the Advisor
will report on said allocation regularly to the Board of Directors of the Fund,
indicating the brokers to whom such allocations have been made and the basis
therefor.
D-2
4. Control by Board of Directors. Any management or supervisory
activities undertaken by the Advisor pursuant to this Agreement, as well as any
other activities undertaken by the Advisor on behalf of the Prime Series
pursuant thereto, shall at all times be subject to any applicable directives of
the Board of Directors of the Fund.
5. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules and
regulations adopted thereunder;
(b) the provisions of the Registration Statement of the Fund under the
Securities Act of 1933 and 1940 Act;
(c) the provisions of the Articles of Incorporation, as amended;
(d) the provisions of the By-Laws of the Fund, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Prime Series shall be
allocable between the Fund and the Advisor as follows:
(a) The Advisor shall, subject to compliance with applicable banking
regulations, furnish, at its expense and without cost to the Fund, the
services of one or more officers of the Fund, to the extent that such
officers may be required by the Fund for the proper conduct of its affairs.
(b) The Fund assumes and shall pay or cause to be paid all other
expenses of the Prime Series, including, without limitation, the Prime
Series' allocable portion of the following expenses: payments to the Fund's
distributor under the Prime Series' plans of distribution; the charges and
expenses of any registrar, any custodian or depository appointed by the Fund
for the safekeeping of its cash, portfolio securities and other property,
and any transfer, dividend or accounting agent or agents appointed by the
Fund; brokers' commissions chargeable to the Fund in connection with
portfolio securities transactions to which the Fund is a party; all taxes,
including securities issuance and transfer taxes, and fees payable by the
Fund to Federal, State or other governmental agencies; the costs and
expenses of engraving or printing of certificates representing shares of the
Fund; all costs and expenses in connection with the registration and
maintenance of registration of the Fund and its shares with the SEC and
various states and other jurisdictions (including filing fees, legal fees
and disbursements of counsel); the costs and expenses of printing, including
typesetting, and distributing prospectuses and statements of additional
information of the Fund and supplements thereto to the Fund's shareholders;
all expenses of shareholders' and directors' meetings and of preparing,
printing and mailing of proxy statements and reports to shareholders; fees
and travel expenses of directors or director members of any advisory board
or committee; all expenses incident to the payment of any dividend,
distribution, withdrawal or redemption, whether in shares or in cash;
charges and expenses of any outside service used for pricing of the Fund's
shares; charges and expenses of legal counsel, including counsel to the
directors of the Fund who are not interested persons (as defined in the 1940
Act) of the Fund and of independent accountants, in connection with any
matter relating to the Fund; membership dues of industry associations;
interest payable on Fund borrowings; postage; insurance premiums on property
or personnel (including officers and directors) of the Fund which inure to
its benefit; extraordinary expenses (including but not limited to, legal
claims and liabilities and litigation costs and any indemnification related
thereto); and all other charges and costs of the Fund's operation unless
otherwise explicitly provided herein.
D-3
7. Delegation of Advisory Services.
(a) Subject to the prior approval of the members of the Fund's Board of
Directors, including a majority of the Directors who are not "interested
persons," as defined in the 1940 Act, and shareholders of the Prime Series,
the Advisor may delegate to a sub-advisor certain of its duties enumerated
in Section 2 hereof provided that the Advisor shall continue to supervise
the performance of any such sub-advisor. The Advisor shall not be
responsible for any such sub-advisor's performance under a sub-advisory
agreement.
(b) Subject to the prior approval of a majority of the members of the
Fund's Board of Directors, including a majority of the Directors who are not
"interested persons," as defined in the 1940 Act, the Advisor may, through a
sub-advisory agreement or other arrangement, delegate to any other company
that the Advisor controls, is controlled by, or is under common control
with, or to specified employees of any such companies, or to more than one
such company, to the extent permitted by applicable law, certain of the
Advisor's duties enumerated in Section 2 hereof, and may adjust the duties
of such entity, the portion of portfolio assets of the Series that such
entity shall manage and the fees to be paid to such who are not "interested
persons," as defined in the 1940 Act; provided, that the Advisor shall
continue to supervise the services provided by such company or employees and
any such delegation shall not relieve the Advisor of any of its obligations
hereunder.
(c) The Advisor may, but shall not be under any duty to, perform
services on behalf of the Prime Series which are not required by this
Agreement upon the request of the Fund's Board of Directors. Such services
will be performed on behalf of the Prime Series and the Advisor's charge in
rendering such services may be billed monthly to the Fund, subject to
examination by the Fund's independent accountants. Payment or assumption by
the Advisor of any Fund expense that the Advisor is not required to pay or
assume under this Agreement shall not relieve the Advisor of any of its
obligations to the Prime Series nor obligate the Advisor to pay or assume
any similar Prime Series' expenses on any subsequent occasions.
8. Compensation. For the services to be rendered and the expenses
assumed by the Advisor, the Prime Series shall pay to the Advisor monthly
compensation at an annual rate derived by: (1) calculating an amount equal to
0.30% of the first $500 million of the Fund's aggregate average daily net
assets, 0.26% of the next $500 million of the Fund's aggregate average daily net
assets, 0.25% of the next $500 million of the Fund's aggregate average daily net
assets, 0.24% of the next $1 billion of the Fund's aggregate average daily net
assets, 0.23% of the next $1 billion of the Fund's aggregate average daily net
assets and 0.22% of that portion of the Fund's aggregate average daily net
assets in excess of $3.5 billion; (2) applying to this amount a fraction equal
to the net assets of the Prime Series divided by the net assets of the Fund; and
(3) adding an amount calculated daily and paid monthly, at the annual rate of
0.02% of the Prime Series' average daily net assets.
Except as hereinafter set forth, compensation under this Agreement
shall be calculated and accrued daily and the amounts of the daily accruals
shall be paid monthly. If this Agreement becomes effective subsequent to the
first day of a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
above. Payment of the Advisor's compensation for the preceding month shall be
made as promptly as possible.
9. Non-Exclusivity. The services of the Advisor to the Fund are not to
be deemed to be exclusive, and the Advisor shall be free to render investment
advisory and corporate administrative or other services to others (including
other investment companies) and to engage in other activities, so long as its
services under this Agreement are not impaired thereby. It is understood and
agreed that officers or directors of the Advisor may serve as officers or
directors of the
D-4
Fund, and that officers or directors of the Fund may serve as officers or
directors of the Advisor to the extent permitted by law; and that the officers
and directors of the Advisor are not prohibited from engaging in any other
business activity or from rendering services to any other person, or from
serving as partners, officers, trustees or directors of any other firm, trust or
corporation, including other investment companies.
10. Term. This Agreement shall become effective at the close of
business on the date hereof and shall continue in force and effect, subject to
Section 12 hereof, for two years from the date hereof.
11. Renewal. Following the expiration of its initial two-year term,
this Agreement shall continue in force and effect from year to year, provided
that such continuance is specifically approved at least annually:
(a) (i) by the Fund's Board of Directors or (ii) by the vote of a
majority of the outstanding voting securities of the Prime Series (as
defined in Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the directors who are not
parties to this Agreement or "interested persons" of a party to this
Agreement (other than as directors of the Fund) by votes cast in person at a
meeting specifically called for such purpose.
12. Termination. This Agreement may be terminated at any time, without
the payment of any penalty, by vote of the Fund's Board of Directors or by vote
of a majority of the Prime Series' outstanding voting securities (as defined in
Section 2(a)(42) of the 1940 Act), or by the Advisor on sixty (60) days' written
notice to the other party. The notice provided for herein may be waived by
either party. This Agreement will automatically terminate in the event of its
assignment, the term "assignment" having the meaning defined in Section 2(a)(4)
of the 1940 Act.
13. Liability of Advisor. In the performance of its duties hereunder,
the Advisor shall be obligated to exercise care and diligence and to act in good
faith and to use its best efforts within reasonable limits to ensure the
accuracy of all services performed under this Agreement, but the Advisor shall
not be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of the Advisor or its
officers, directors or employees, or reckless disregard by the Advisor of its
duties under this Agreement.
14. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Fund for
this purpose shall be One South Street, Baltimore, Maryland 21202 and the
address of the Advisor for this purpose shall be 280 Park Avenue, New York, New
York 10017.
15. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act shall be resolved by reference to such
term or provision of the 1940 Act and to interpretations thereof, if any, by the
United States Courts or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the SEC issued pursuant to said Act.
In addition, where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is revised by rule, regulation or order of the SEC,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order. Otherwise the provisions of this Agreement shall be
interpreted in accordance with the laws of Maryland.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their respective officers on the day and year first above
written.
D-5
[SEAL] DEUTSCHE BANK ALEX. BROWN CASH
RESERVE FUND, INC.
Attest: _____________________ By:____________________________
Name: _____________________ Name:__________________________
Title:_________________________
[SEAL] DEUTSCHE ASSET MANAGEMENT, INC.
Attest: _____________________ By:____________________________
Name: _____________________ Name:__________________________
Title:_________________________
D-6
Exhibit E
DEUTSCHE BANK ALEX. BROWN CASH RESERVE FUND, INC. - TREASURY SERIES
FORM OF INVESTMENT ADVISORY AGREEMENT
-------------------------------------
THIS AGREEMENT is made as of the ____ day of ________, 200_ by and
between DEUTSCHE BANK ALEX. BROWN CASH RESERVE FUND, INC., a Maryland
corporation (the "Fund"), and DEUTSCHE ASSET MANAGEMENT, INC., a Delaware
corporation (the "Advisor"), with respect to the following recital of fact:
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment advisor; and
WHEREAS, the Fund's Articles of Incorporation authorize the Board of
Directors of the Fund to classify or reclassify authorized but unissued shares
of the Fund; and
WHEREAS, the Fund's Board of Directors has authorized issuance of three
series of shares with a par value of $.001 representing interests in three
portfolios: the Prime Series, the Treasury Series and the Tax-Free Series (each
of the existing portfolios and any portfolios hereafter added shall be referred
to collectively as the "Series"); and
WHEREAS, the Fund and the Advisor desire to enter into an agreement to
provide investment advisory and administrative services for the Fund's Treasury
Series (the "Treasury Series") on the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Investment Advisor. The Fund hereby appoints the
Advisor to act as the investment advisor to the Treasury Series. The Advisor
shall manage the Treasury Series' affairs and shall supervise all aspects of the
Treasury Series' operations (except as otherwise set forth herein), including
the investment and reinvestment of the cash, securities or other properties
comprising the Treasury Series' assets, subject at all times to the policies and
control of the Fund's Board of Directors. The Advisor shall give the Treasury
Series the benefit of its best judgment, efforts and facilities in rendering its
services as Advisor.
2. Duties of Investment Advisor. In carrying out its obligations under
Section 1 hereof, the Advisor shall:
(a) supervise and manage all aspects of the Treasury Series'
operations;
(b) formulate and implement continuing programs for the purchases and
sales of securities, consistent with the investment objective and policies
of the Treasury Series;
(c) provide the Treasury Series with such executive, administrative and
clerical services as are deemed advisable by the Fund's Board of Directors;
E-1
(d) provide the Treasury Series with, or obtain for it, adequate office
space and all necessary office equipment and services, including telephone
service, heat, utilities, stationery supplies and similar items for the
Fund's principal office;
(e) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic, foreign
or otherwise, whether affecting the economy generally or the Treasury
Series, and whether concerning the individual issuers whose securities are
included in the Treasury Series or the activities in which they engage, or
with respect to securities which the Advisor considers desirable for
inclusion in the Treasury Series;
(f) determine which issuers and securities shall be represented in the
Treasury Series and regularly report thereon to the Fund's Board of
Directors;
(g) take all actions necessary to carry into effect the Fund's purchase
and sale programs with respect to its Treasury Series;
(h) supervise the operations of the Treasury Series' transfer and
dividend disbursing agent;
(i) provide the Treasury Series with such administrative and clerical
services for the maintenance of certain shareholder records, as are deemed
advisable by the Fund's Board of Directors; and,
(j) arrange, but not pay for, the periodic updating of prospectuses and
supplements thereto, proxy material, tax returns, reports to the
shareholders of the Treasury Series and reports to and filings with the
Securities and Exchange Commission (the "SEC") and state Blue Sky
authorities, which may be required for the Treasury Series.
3. Broker-Dealer Relationship. In the event that the Advisor is
responsible for decisions to buy and sell securities for the Treasury Series,
broker-dealer selection, and negotiation of its brokerage commission rates, the
Advisor's primary consideration in effecting a security transaction will be
execution at the most favorable price. The Fund understands that a substantial
majority of the Treasury Series' transactions will be transacted with primary
market makers acting as principal on a net basis, with no brokerage commissions
being paid by the Fund. Such principal transactions may, however, result in a
profit to the market makers. In certain instances the Advisor may make purchases
of underwritten issues at prices which include underwriting fees. In selecting a
broker-dealer to execute each particular transaction, the Advisor will take the
following into consideration: the best net price available; the reliability,
integrity and financial condition of the broker-dealer; the size of and
difficulty in executing the order; and the value of the expected contribution of
the broker-dealer to the investment performance of the Treasury Series on a
continuing basis. Accordingly, the price to the Fund in any transaction may be
less favorable than that available from another broker-dealer if the difference
is reasonably justified by other aspects of the portfolio execution services
offered. Subject to such policies as the Board of Directors may determine, the
Advisor shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides brokerage and research
services to the Advisor an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if the Advisor
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Advisor's overall responsibilities with respect to the Treasury Series. The
Advisor is further authorized to allocate the orders placed by it on behalf of
the Treasury Series to such brokers and dealers who also provide research or
statistical material or other services to the Fund or the Advisor. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine and the Advisor will report on said
E-2
allocation regularly to the Board of Directors of the Fund, indicating the
brokers to whom such allocations have been made and the basis therefor.
4. Control by Board of Directors. Any management or supervisory
activities undertaken by the Advisor pursuant to this Agreement, as well as any
other activities undertaken by the Advisor on behalf of the Treasury Series
pursuant thereto, shall at all times be subject to any applicable directives of
the Board of Directors of the Fund.
5. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules and
regulations adopted thereunder;
(b) the provisions of the Registration Statement of the Fund on behalf
of a Series under the Securities Act of 1933 and 1940 Act;
(c) the provisions of the Articles of Incorporation, as amended;
(d) the provisions of the By-Laws of the Fund, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Treasury Series shall be
allocable between the Fund and the Advisor as follows:
(a) The Advisor shall, subject to compliance with applicable banking
regulations, furnish, at its expense and without cost to the Fund, the
services of one or more of its officers of the Fund, to the extent that such
officers may be required by the Fund for the proper conduct of its affairs.
(b) The Fund assumes and shall pay or cause to be paid all other
expenses of the Fund on behalf of a Series, including, without limitation,
the Treasury Series' allocable portion of the following expenses: payments
to the Fund's distributor under the Treasury Series' plans of distribution;
the charges and expenses of any registrar, any custodian or depository
appointed by the Fund for the safekeeping of its cash, portfolio securities
and other property, and any transfer, dividend or accounting agent or agents
appointed by the Fund; brokers' commissions chargeable to the Fund in
connection with portfolio securities transactions to which the Fund is a
party; all taxes, including securities issuance and transfer taxes, and fees
payable by the Fund to Federal, State or other governmental agencies; the
costs and expenses of engraving or printing of certificates representing
shares of the Fund; all costs and expenses in connection with the
registration and maintenance of registration of the Fund and its shares with
the SEC and various states and other jurisdictions (including filing fees,
legal fees and disbursements of counsel); the costs and expenses of
printing, including typesetting, and distributing prospectuses and
statements of additional information of the Fund and supplements thereto to
the Fund's shareholders; all expenses of shareholders' and directors'
meetings and of preparing, printing and mailing of proxy statements and
reports to shareholders; fees and travel expenses of directors or director
members of any advisory board or committee; all expenses incident to the
payment of any dividend, distribution, withdrawal or redemption, whether in
shares or in cash; charges and expenses of any outside service used for
pricing of the Fund's shares; charges and expenses of legal counsel,
including counsel to the directors of the Fund who are not interested
persons (as defined in the 1940 Act) of the Fund and of independent
accountants, in connection with any matter relating to the Fund; membership
dues of industry associations; interest payable on Fund borrowings; postage;
insurance premiums on property or personnel (including officers and
directors) of the Fund which inure to its benefit; extraordinary expenses
(including but
E-3
not limited to, legal claims and liabilities and litigation costs and any
indemnification related thereto); and all other charges and costs of the
Fund's operation unless otherwise explicitly provided herein.
7. Delegation of Advisory Services.
(a) Subject to the prior approval of the members of the Board of
Directors, including a majority of the Directors who are not "interested
persons," as defined in the 1940 Act, and shareholders of the Treasury
Series, the Advisor may delegate to a sub-advisor certain of its duties
enumerated in Section 2 hereof provided that the Advisor shall continue to
supervise the performance of any such sub-advisor. The Advisor shall not be
responsible for such sub-advisor's performance under a sub-advisory
agreement.
(b) Subject to the prior approval of a majority of the members of the
Fund's Board of Directors, including a majority of the Directors who are not
"interested persons," as defined in the 1940 Act, the Advisor may, through a
sub-advisory agreement or other arrangement, delegate to any other company
that the Advisor controls, is controlled by, or is under common control
with, or to specified employees of any such companies, or to more than one
such company, to the extent permitted by applicable law, certain of the
Advisor's duties enumerated in Section 2 hereof, and may adjust the duties
of such entity, the portion of portfolio assets of the Series that such
entity shall manage and the fees to be paid to such entity, subject to the
prior approval of the members of the Fund's Board of Directors who are not
"interested persons," as defined in the 1940 Act; provided, that the Advisor
shall continue to supervise the services provided by such company or
employees and any such delegation shall not relieve the Advisor of any of
its obligations hereunder.
(c) The Advisor may, but shall not be under any duty to, perform
services on behalf of the Treasury Series which are not required by this
Agreement upon the request of the Fund's Board of Directors. Such services
will be performed on behalf of the Treasury Series and the Advisor's charge
in rendering such services may be billed monthly to the Fund, subject to
examination by the Fund's independent accountants. Payment or assumption by
the Advisor of any Fund expense that the Advisor is not required to pay or
assume under this Agreement shall not relieve the Advisor of any of its
obligations to the Treasury Series nor oblige the Advisor to pay or assume
any similar Treasury Series' expenses on any subsequent occasions.
8. Compensation. For the services to be rendered and the expenses
assumed by the Advisor, the Treasury Series shall pay to the Advisor monthly
compensation at an annual rate derived by: (1) calculating an amount equal to
0.30% of the first $500 million of the Fund's aggregate average daily net
assets, 0.26% of the next $500 million of the Fund's aggregate average daily net
assets, 0.25% of the next $500 million of the Fund's aggregate average daily net
assets, 0.24% of the next $1 billion of the Fund's aggregate average daily net
assets, 0.23% of the next $1 billion of the Fund's aggregate average daily net
assets and 0.22% of that portion of the Fund's aggregate average daily net
assets in excess of $3.5 billion; and (2) applying to this amount a fraction
equal to the net assets of the Treasury Series divided by the net assets of the
Fund.
Except as hereinafter set forth, compensation under this Agreement
shall be calculated and accrued daily and the amounts of the daily accruals
shall be paid monthly. If this Agreement becomes effective subsequent to the
first day of a month or shall terminate before the last day of a month,
compensation for that part of the month this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
above. Payment of the Advisor's compensation for the preceding month shall be
made as promptly as possible.
9. Non-Exclusivity. The services of the Advisor to the Fund are not to
be deemed to be exclusive, and the Advisor shall be free to render investment
advisory and corporate administrative or
E-4
other services to others (including other investment companies) and to engage in
other activities, so long as its services under this Agreement are not impaired
thereby. It is understood and agreed that officers or directors of the Advisor
may serve as officers or directors of the Fund, and that officers or directors
of the Fund may serve as officers or directors of the Advisor to the extent
permitted by law; and that the officers and directors of the Advisor are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, trustees or
directors of any other firm, trust or corporation, including other investment
companies.
10. Term. This Agreement shall become effective at the close of
business on the date hereof and shall continue in force and effect, subject to
Section 12 hereof, for two years from the date hereof.
11. Renewal. Following the expiration of its initial two-year term,
this Agreement shall continue in force and effect from year to year, provided
that such continuance is specifically approved at least annually:
(a) (i) by the Fund's Board of Directors or (ii) by the vote of a
majority of the outstanding voting securities of the Treasury Series (as
defined in Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the directors who are not
parties to this Agreement or "interested persons" of a party to this
Agreement (other than as directors of the Fund) by votes cast in person at a
meeting specifically called for such purpose.
12. Termination. This Agreement may be terminated at any time, without
the payment of any penalty, by vote of the Fund's Board of Directors or by vote
of a majority of the Treasury Series' outstanding voting securities (as defined
in Section 2(a)(42) of the 1940 Act), or by the Advisor on sixty (60) days'
written notice to the other party. The notice provided for herein may be waived
by either party. This Agreement will automatically terminate in the event of its
assignment, the term "assignment" having the meaning defined in Section 2(a)(4)
of the 1940 Act.
13. Liability of Advisor. In the performance of its duties hereunder,
the Advisor shall be obligated to exercise care and diligence and to act in good
faith and to use its best efforts within reasonable limits to ensure the
accuracy of all services performed under this Agreement, but the Advisor shall
not be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of the Advisor or its
officers, directors or employees, or reckless disregard by the Advisor of its
duties under this Agreement.
14. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Fund for
this purpose shall be One South Street, Baltimore, Maryland 21202 and the
address of the Advisor for this purpose shall be 280 Park Avenue, New York, New
York 10017.
15. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act shall be resolved by reference to such
term or provision of the 1940 Act and to interpretations thereof, if any, by the
United States Courts or, in the absence of any controlling decision of any such
court, by rules, regulations or orders of the SEC issued pursuant to said Act.
In addition, where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is revised by rule, regulation or order of the SEC,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order. Otherwise the provisions of this Agreement shall be
interpreted in accordance with the laws of Maryland.
E-5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their respective officers on the day and year first above
written.
[SEAL] DEUTSCHE BANK ALEX. BROWN CASH
RESERVE FUND, INC.
Attest: _____________________ By:____________________________
Name: _____________________ Name:__________________________
Title:_________________________
[SEAL] DEUTSCHE ASSET MANAGEMENT, INC.
Attest: _____________________ By:____________________________
Name: _____________________ Name:__________________________
Title:_________________________
E-6
Exhibit F
DEUTSCHE BANK ALEX. BROWN CASH RESERVE FUND, INC. - TAX-FREE SERIES
FORM OF INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of the ____ day of ________, 200_ by and
between DEUTSCHE BANK ALEX. BROWN CASH RESERVE FUND, INC., a Maryland
corporation (the "Fund"), and DEUTSCHE ASSET MANAGEMENT, INC., a Delaware
corporation (the "Advisor"), with respect to the following recital of fact:
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment advisor; and
WHEREAS, the Fund's Articles of Incorporation authorize the Board of
Directors of the Fund to classify or reclassify authorized but unissued shares
of the Fund; and
WHEREAS, the Fund's Board of Directors has authorized issuance of three
series of shares with a par value of $.001 representing interests in three
portfolios: the Prime Series, the Tax-Free Series and the Tax-Free Series (each
of the existing portfolios and any portfolios hereafter added shall be referred
to collectively as the "Series"); and
WHEREAS, the Fund and the Advisor desire to enter into an agreement to
provide investment advisory and administrative services for the Fund's Tax-Free
Series (the "Tax-Free Series") on the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Investment Advisor. The Fund hereby appoints the
Advisor to act as the investment advisor to the Tax-Free Series. The Advisor
shall manage the affairs of the Tax-Free Series and shall supervise all aspects
of the Tax-Free Series' operations (except as otherwise set forth herein),
including the investment and reinvestment of the cash, securities or other
properties comprising the Tax-Free Series' assets, subject at all times to the
policies and control of the Fund's Board of Directors. The Advisor shall give
the Tax-Free Series the benefit of its best judgment, efforts and facilities in
rendering its services as Advisor.
2. Duties of Investment Advisor. In carrying out its obligations under
Section 1 hereof, the Advisor shall:
(a) supervise and manage all aspects of the Tax-Free Series'
operations;
(b) formulate and implement continuing programs for the purchases and
sales of securities, consistent with the investment objective and policies
of the Tax-Free Series;
(c) provide the Tax-Free Series with such executive, administrative and
clerical services as are deemed advisable by the Fund's Board of Directors;
F-1
(d) provide the Tax-Free Series with, or obtain for it, adequate office
space and all necessary office equipment and services, including telephone
service, heat, utilities, stationery supplies and similar items for the
Fund's principal office;
(e) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic, foreign
or otherwise, whether affecting the economy generally or the Tax-Free
Series, and whether concerning the individual issuers whose securities are
included in the Tax-Free Series or the activities in which they engage, or
with respect to securities which the Advisor considers desirable for
inclusion in the Tax-Free Series;
(f) determine which issuers and securities shall be represented in the
Tax-Free Series and regularly report thereon to the Fund's Board of
Directors;
(g) take all actions necessary to carry into effect the Fund's purchase
and sale programs with respect to its Tax-Free Series;
(h) supervise the operations of the Tax-Free Series' transfer and
dividend disbursing agent;
(i) provide the Tax-Free Series with such administrative and clerical
services for the maintenance of certain shareholder records, as are deemed
advisable by the Fund's Board of Directors; and,
(j) arrange, but not pay for, the periodic updating of prospectuses and
supplements thereto, proxy material, tax returns, reports to the
shareholders of the Tax-Free Series and reports to and filings with the
Securities and Exchange Commission (the "SEC") and state Blue Sky
authorities, which may be required for the Tax-Free Series.
3. Broker-Dealer Relationship. In the event that the Advisor is
responsible for decisions to buy and sell securities for the Tax-Free Series,
broker-dealer selection, and negotiation of its brokerage commission rates, the
Advisor's primary consideration in effecting a security transaction will be
execution at the most favorable price. The Fund understands that a substantial
majority of the Tax-Free Series' transactions will be transacted with primary
market makers acting as principal on a net basis, with no brokerage commissions
being paid by the Fund. Such principal transactions may, however, result in a
profit to the market makers. In certain instances the Advisor may make purchases
of underwritten issues at prices which include underwriting fees. In selecting a
broker-dealer to execute each particular transaction, the Advisor will take the
following into consideration: the best net price available; the reliability,
integrity and financial condition of the broker-dealer; the size of and
difficulty in executing the order; and the value of the expected contribution of
the broker-dealer to the investment performance of the Tax-Free Series on a
continuing basis. Accordingly, the price to the Fund in any transaction may be
less favorable than that available from another broker-dealer if the difference
is reasonably justified by other aspects of the portfolio execution services
offered. Subject to such policies as the Board of Directors may determine, the
Advisor shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides brokerage and research
services to the Advisor an amount of commission for effecting a portfolio
investment transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction, if the Advisor
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Advisor's overall responsibilities with respect to the Tax-Free Series. The
Advisor is further authorized to allocate the orders placed by it on behalf of
the Tax-Free Series to such brokers and dealers who also provide
F-2
research or statistical material or other services to the Fund or the Advisor.
Such allocation shall be in such amounts and proportions as the Advisor shall
determine and the Advisor will report on said allocation regularly to the Board
of Directors of the Fund, indicating the brokers to whom such allocations have
been made and the basis therefor.
4. Control by Board of Directors. Any management or supervisory
activities undertaken by the Advisor pursuant to this Agreement, as well as any
other activities undertaken by the Advisor on behalf of the Tax-Free Series
pursuant thereto, shall at all times be subject to any applicable directives of
the Board of Directors of the Fund.
5. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules and
regulations adopted thereunder;
(b) the provisions of the Registration Statement of the Fund under the
Securities Act of 1933 and 1940 Act;
(c) the provisions of the Articles of Incorporation, as amended;
(d) the provisions of the By-Laws of the Fund, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Tax-Free Series shall be
allocable between the Fund and the Advisor as follows:
(a) The Advisor shall, subject to compliance with applicable banking
regulations, furnish, at its expense and without cost to the Fund, the
services of one or more of its officers, to the extent that such officers
may be required by the Fund for the proper conduct of its affairs.
(b) The Fund assumes and shall pay or cause to be paid all other
expenses of the Tax-Free Series, including, without limitation, the Tax-Free
Series' allocable portion of the following expenses: payments to the Fund's
distributor under the Fund's plan of distribution; the charges and expenses
of any registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities and other property, and any
transfer, dividend or accounting agent or agents appointed by the Fund;
brokers' commissions chargeable to the Fund in connection with portfolio
securities transactions to which the Fund is a party; all taxes, including
securities issuance and transfer taxes, and fees payable by the Fund to
Federal, State or other governmental agencies; the costs and expenses of
engraving or printing of certificates representing shares of the Fund; all
costs and expenses in connection with the registration and maintenance of
registration of the Fund and its shares with the SEC and various states and
other jurisdictions (including filing fees, legal fees and disbursements of
counsel); the costs and expenses of printing, including typesetting, and
distributing prospectuses and statements of additional information of the
Fund and supplements thereto to the Fund's shareholders; all expenses of
shareholders' and directors' meetings and of preparing, printing and mailing
of proxy statements and reports to shareholders; fees and travel expenses of
directors or director members of any advisory board or committee; all
expenses incident to the payment of any dividend, distribution, withdrawal
or redemption, whether in shares or in cash; charges and expenses of any
outside service used for pricing of the Fund's shares; charges and expenses
of legal counsel, including counsel to the directors of the Fund who are not
interested persons (as defined in the 1940 Act) of the Fund and of
independent accountants, in connection with any matter relating to the Fund;
F-3
membership dues of industry associations; interest payable on Fund
borrowings; postage; insurance premiums on property or personnel (including
officers and directors) of the Fund which inure to its benefit;
extraordinary expenses (including but not limited to, legal claims and
liabilities and litigation costs and any indemnification related thereto);
and all other charges and costs of the Fund's operation unless otherwise
explicitly provided herein.
7. Delegation of Advisory Services.
(a) Subject to the prior approval of the members of the Fund's Board of
Directors, including a majority of the Directors who are not "interested
persons, " as defined in the 1940 Act, and shareholders of the Tax-Free
Series, the Advisor may delegate to a sub-advisor certain to its duties
enumerated in Section 2 hereof provided that the Advisor shall continue to
supervise the performance of any such sub-advisor and shall report regularly
thereon to the Fund's Board of Directors. The Advisor shall not be
responsible for any such sub-advisor's performance under a sub-advisory
agreement.
(b) Subject to the prior approval of a majority of the members of the
Fund's Board of Directors, including a majority of the Directors who are not
"interested persons," as defined in the 1940 Act, the Advisor may, through a
sub-advisory agreement or other arrangement, delegate to any other company
that the Advisor controls, is controlled by, or is under common control
with, or to specified employees of any such companies, or to more than one
such company, to the extent permitted by applicable law, certain of the
Advisor's duties enumerated in Section 2 hereof, and may adjust the duties
of such entity, the portion of portfolio assets of the Series that such
entity shall manage and the fees to be paid to such entity, subject to the
prior approval of the members of the Fund's Board of Directors who are not
"interested persons," as defined in the 1940 Act; provided, that the Advisor
shall continue to supervise the services provided by such company or
employees and any such delegation shall not relieve the Advisor of any of
its obligations hereunder.
(c) The Advisor may, but shall not be under any duty to, perform
services on behalf of the Tax-Free Series which are not required by this
Agreement upon the request of the Fund's Board of Directors. Such services
will be performed on behalf of the Tax-Free Series and the Advisor's charge
in rendering such services may be billed monthly to the Fund, subject to
examination by the Fund's independent accountants. Payment or assumption by
the Advisor of any Fund expense that the Advisor is not required to pay or
assume under this Agreement shall not relieve the Advisor of any of its
obligations to the Tax-Free Series nor oblige the Advisor to pay or assume
any similar expenses on any subsequent occasions.
8. Compensation. For the services to be rendered and the expenses
assumed by the Advisor, the Tax-Free Series shall pay to the Advisor monthly
compensation at an annual rate derived by: (1) calculating an amount equal to
0.30% of the first $500 million of the Fund's aggregate average daily net
assets, 0.26% of the next $500 million of the Fund's aggregate average daily net
assets, 0.25% of the next $500 million of the Fund's aggregate average daily net
assets, 0.24% of the next $1 billion of the Fund's aggregate average daily net
assets, 0.23% of the next $1 billion of the Fund's aggregate average daily net
assets and 0.22% of that portion of the Fund's aggregate average daily net
assets in excess of $3.5 billion; (2) applying to this amount a fraction equal
to the net assets of the Tax-Free Series divided by the net assets of the Fund;
and (3) adding an amount calculated daily and paid monthly, at the annual rate
of 0.03% of the Tax-Free Series' average daily net assets.
Except as hereinafter set forth, compensation under this Agreement
shall be calculated and accrued daily and the amounts of the daily accruals
shall be paid monthly. If this Agreement becomes effective subsequent to the
first day of a month or shall terminate before the last day of a month,
F-4
compensation for that part of the month this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
above. Payment of the Advisor's compensation for the preceding month shall be
made as promptly as possible.
9. Non-Exclusivity. The services of the Advisor to the Fund are not to
be deemed to be exclusive, and the Advisor shall be free to render investment
advisory and corporate administrative or other services to others (including
other investment companies) and to engage in other activities, so long as its
services under this Agreement are not impaired thereby. It is understood and
agreed that officers or directors of the Advisor may serve as officers or
directors of the Fund, and that officers or directors of the Fund may serve as
officers or directors of the Advisor to the extent permitted by law; and that
the officers and directors of the Advisor are not prohibited from engaging in
any other business activity or from rendering services to any other person, or
from serving as partners, officers, trustees or directors of any other firm,
trust or corporation, including other investment companies.
10. Term. This Agreement shall become effective at the close of
business on the date hereof and shall continue in force and effect, subject to
Section 12 hereof, for two years from the date hereof.
11. Renewal. Following the expiration of its initial two-year term,
this Agreement shall continue in force and effect from year to year, provided
that such continuance is specifically approved at least annually:
(a) (i) by the Fund's Board of Directors or (ii) by the vote of a
majority of the outstanding voting securities of the Tax-Free Series (as
defined in Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the directors who are not
parties to this Agreement or "interested persons" of a party to this
Agreement (other than as directors of the Fund) by votes cast in person at a
meeting specifically called for such purpose.
12. Termination. This Agreement may be terminated at any time, without
the payment of any penalty, by vote of the Fund's Board of Directors or by vote
of a majority of the Tax-Free Series' outstanding voting securities (as defined
in Section 2(a)(42) of the 1940 Act), or by the Advisor on sixty (60) days'
written notice to the other party. The notice provided for herein may be waived
by either party. This Agreement will automatically terminate in the event of its
assignment, the term "assignment" having the meaning defined in Section 2(a)(4)
of the 1940 Act.
13. Liability of Advisor. In the performance of its duties hereunder,
the Advisor shall be obligated to exercise care and diligence and to act in good
faith and to use its best efforts within reasonable limits to ensure the
accuracy of all services performed under this Agreement, but the Advisor shall
not be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of the Advisor or its
officers, directors or employees, or reckless disregard by the Advisor of its
duties under this Agreement.
14. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Fund for
this purpose shall be One South Street, Baltimore, Maryland 21202 and the
address of the Advisor for this purpose shall be 280 Park Avenue, New York, New
York 10017.
15. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act shall be resolved by reference to such
term or provision of the 1940 Act and to interpretations thereof, if any, by
F-5
the United States Courts or, in the absence of any controlling decision of any
such court, by rules, regulations or orders of the SEC issued pursuant to said
Act. In addition, where the effect of a requirement of the 1940 Act reflected in
any provision of this Agreement is revised by rule, regulation or order of the
SEC, such provision shall be deemed to incorporate the effect of such rule,
regulation or order. Otherwise the provisions of this Agreement shall be
interpreted in accordance with the laws of Maryland.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their respective officers on the day and year first above
written.
[SEAL] DEUTSCHE BANK ALEX. BROWN CASH
RESERVE FUND, INC.
Attest: _____________________ By:____________________________
Name: _____________________ Name:__________________________
Title:_________________________
[SEAL] DEUTSCHE ASSET MANAGEMENT, INC.
Attest: _____________________ By:____________________________
Name: _____________________ Name:__________________________
Title:_________________________
F-6
Exhibit G
ADVISORY FEES
I. Rates of Compensation under the Current Advisory Agreements
The Prime Series shall pay to the Advisor monthly compensation at an annual rate
derived by: (1) calculating an amount equal to 0.30% of the first $500 million
of the Fund's aggregate average daily net assets, 0.26% of the next $500 million
of the Fund's aggregate average daily net assets, 0.25% of thenext $500 million
of the Fund's aggregate average daily net assets, 0.24% of the next $1 billion
of the Fund's aggregate average daily net assets, 0.23% of the next $1 billion
of the Fund's aggregate average daily net assets and 0.22% of that portion of
the Fund's aggregate average daily net assets in excess of $3.5 billion; (2)
applying to this amount a fraction equal to the net assets of the Prime Series
divided by the net assets of the Fund; and (3) adding an amount calculated daily
and paid monthly, at the annual rate of 0.02% of the Prime Series' average daily
net assets.
The Treasury Series* shall pay to the Advisor monthly compensation at an annual
rate derived by: (1) calculating an amount equal to 0.30% of the first $500
million of the Fund's aggregate average daily net assets, 0.26% of the next $500
million of the Fund's aggregate average daily net assets, 0.25% of the next $500
million of the Fund's aggregate average daily net assets, 0.24% of the next $1
billion of the Fund's aggregate average daily net assets, 0.23% of the next $1
billion of the Fund's aggregate average daily net assets and 0.22% of that
portion of the Fund's aggregate average daily net assets in excess of $3.5
billion; and (2) applying to this amount a fraction equal to the net assets of
the Treasury Series divided by the net assets of the Fund.
* The Advisor has contractually agreed to waive its fee for the Treasury Series
by 0.05%. This agreement will continue until July 31, 2002 and may be extended.
The Tax-Free Series shall pay to the Advisor monthly compensation at an annual
rate derived by: (1) calculating an amount equal to 0.30% of the first $500
million of the Fund's aggregate average daily net assets, 0.26% of the next $500
million of the Fund's aggregate average daily net assets, 0.25% of the next $500
million of the Fund's aggregate average daily net assets, 0.24% of the next $1
billion of the Fund's aggregate average daily net assets, 0.23% of the next $1
billion of the Fund's aggregate average daily net assets and 0.22% of that
portion of the Fund's aggregate average daily net assets in excess of $3.5
billion; (2) applying to this amount a fraction equal to the net assets of the
Tax-Free Series divided by the net assets of the Fund; and (3) adding an amount
calculated daily and paid monthly, at the annual rate of 0.03% of the Tax-Free
Series' average daily net assets.
II. Aggregate Advisory Fees
For its investment advisory services, ICCC was paid the following amounts for
the Fund's fiscal year ended March 31, 2002:
- ----------------------------------------------------------------------------------------------------------------------
Series Fee Before Waivers Fee Waivers Fee After Waivers
- ----------------------------------------------------------------------------------------------------------------------
Prime Series $ $ $
- ----------------------------------------------------------------------------------------------------------------------
Treasury Series $ $ $
- ----------------------------------------------------------------------------------------------------------------------
Tax-Free Series $ $ $
- ----------------------------------------------------------------------------------------------------------------------
G-1
III. Transfer Agency, Accounting and Custody Fees
For its transfer agency and accounting services, ICCC was paid the following
amounts for the Fund's fiscal year ended March 31, 2002:
------------------------------------------------------------------------------------------------------------
Series Transfer Agency Fees Accounting Service Fees
------------------------------------------------------------------------------------------------------------
Prime Series $ $
------------------------------------------------------------------------------------------------------------
Treasury Series $ $
------------------------------------------------------------------------------------------------------------
Tax-Free Series $ $
------------------------------------------------------------------------------------------------------------
Deutsche Bank Trust, an affiliate of ICCC, was paid the following amounts for
providing custody services for the Fund's fiscal year ended March 31, 2002:
-------------------------------------------------------------------------------------
Series Custody Fees
-------------------------------------------------------------------------------------
Prime Series $
-------------------------------------------------------------------------------------
Treasury Series $
-------------------------------------------------------------------------------------
Tax-Free Series $
-------------------------------------------------------------------------------------
G-2
Exhibit H
[Principal occupations of each director and principal
executive officer of ICCC]
[To Come]
[Principal occupations of each director and principal
executive officer of DeAM, Inc.]
[To Come]
H-1
Exhibit I
[Investment Companies Advised or Subadvised by DeAM, Inc. ]
[To Come]
I-1
Exhibit J
- -----------------------------------------------------------------------------------------------------------------
Aggregate Dollar Range of Ownership as
of April 30, 2002 in all Funds Overseen
or to be Overseen by Director or
Director Dollar Range of Beneficial Director Nominee in the Family of
Ownership in the Fund/1/ Investment Companies/2/
Independent Director Nominees
- -----------------------------------------------------------------------------------------------------------------
Richard R. Burt $____________(Prime Series)
$__________(Treasury Series)
$___________(Tax-Free Series)
- -----------------------------------------------------------------------------------------------------------------
S. Leland Dill None (Prime Series) $50,001-$100,000
None (Treasury Series)
None (Tax-Free Series)
- -----------------------------------------------------------------------------------------------------------------
Martin J. Gruber None (Prime Series)
None (Treasury Series)
None (Tax-Free Series)
- -----------------------------------------------------------------------------------------------------------------
Joseph R. Hardiman $___________ (Prime Series) Over $100,000
$_________ (Treasury Series)
$__________ (Tax-Free Series)
- -----------------------------------------------------------------------------------------------------------------
Richard J. Herring None (Prime Series) $50,001-$100,000
None (Treasury Series)
None (Tax-Free Series)
- -----------------------------------------------------------------------------------------------------------------
Graham E. Jones None (Prime Series) $50,001-$100,000
None (Treasury Series)
None (Tax-Free Series)
- -----------------------------------------------------------------------------------------------------------------
Rebecca W. Rimel None (Prime Series) Over $100,000
None (Treasury Series)
None (Tax-Free Series)
- -----------------------------------------------------------------------------------------------------------------
Philip Saunders, Jr. None (Prime Series)
None (Treasury Series)
None (Tax-Free Series)
- -----------------------------------------------------------------------------------------------------------------
William N. Searcy None (Prime Series) $1-$10,000
None (Treasury Series)
None (Tax-Free Series)
- -----------------------------------------------------------------------------------------------------------------
Robert H. Wadsworth None (Prime Series) $50,001-$100,000
None (Treasury Series)
None (Tax-Free Series)
- -----------------------------------------------------------------------------------------------------------------
Interested Director Nominees
- -----------------------------------------------------------------------------------------------------------------
Richard T. Hale $____________(Prime Series) Over $100,000
$___________(Treasury Series)
$___________(Tax-Free Series)
- -----------------------------------------------------------------------------------------------------------------
___________
1. Securities beneficially owned as defined under the Securities Exchange Act of
1934 (the "1934 Act") include direct and or indirect ownership of securities
where the director's economic interest is tied to the securities, employment
ownership and securities when the director can exert voting power and when
the trustee has authority to sell the securities. The dollar ranges are:
None, $1-$10,000, $10,001-$50,000, $50,001-$100,000, over $100,001.
2. The dollar ranges are: None, $1-$10,000, $10,001-$50,000, $50,001-$100,000,
over $100,001. The funds overseen by the directors in the family of
investment companies consist of the following: Flag Investors Communications
Fund, Flag Investors Equity Partners Fund, Flag Investors Value Builder Fund,
Emerging Growth Fund, Real Estate Securities Fund, Short-Intermediate Income
Fund, Deutsche Bank Alex. Brown Cash Reserve Fund Prime Series, Deutsche Bank
Alex. Brown Cash Reserve Fund Tax-Free Series, Deutsche Bank Alex. Brown Cash
Reserve Fund Treasury Series, Top 50 World Fund, Top 50 World Portfolio, Top
50 US Fund, Top 50 US Portfolio, Top 50 Asia Fund, Top 50 Asia Portfolio, Top
50 Europe Fund, Top 50 Europe Portfolio, European Mid-Cap Fund, European
Mid-Cap Portfolio, Japanese Equity Fund, Japanese Equity Portfolio, Global
Financial Services Fund, Global Biotechnology Fund, Global Technology Fund,
Growth Opportunity Fund, BT Investment Funds: Cash Management Fund, Tax Free
Money Fund, Treasury Money Fund, International Equity Fund, Mid Cap Fund,
Lifecycle Long Range Fund, Lifecycle Mid Range Fund, Lifecycle Short Range
Fund, Small Cap Fund, Quantitative Equity Fund, PreservationPlus Income Fund,
Global Equity Fund; BT Advisor Funds: EAFE(R) Equity Index Fund, US Bond
Index Fund; BT Pyramid Mutual Funds: Money Market Fund, Equity 500 Index
Fund, Asset Management Fund, PreservationPlus Fund; BT Institutional Funds:
Cash Management Fund, Cash Reserves Fund, Treasury Money Fund, International
Equity Fund, Equity 500 Index Fund, Liquid Assets Fund, Daily Assets Fund,
Treasury Assets Fund, Cash Management Portfolio, Treasury Money Portfolio,
International Equity Portfolio, Equity 500 Index Portfolio, Asset Management
Portfolio, Capital Appreciation Portfolio; BT Investment Portfolios: Asset
Management Portfolio II, Asset Management Portfolio III, Liquid Assets
Portfolio, EAFE Equity Index Portfolio, Small Cap Portfolio, US Bond Index
Portfolio, PreservationPlus Portfolio, PreservationPlus Income Portfolio,
Quantitative Equity Portfolio, Daily Assets Portfolio; Morgan Grenfell
Investment Trust: Fixed Income Fund, Short-Term Fixed Income Fund, Municipal
Bond Fund, Short-Term Municipal Bond Fund, High Yield Bond Fund, Total Return
Bond Fund, European Equity Fund, Micro Cap Fund, International Select Equity
Fund, Emerging Markets Equity Fund, Emerging Markets Debt Fund; and VIT
Funds: Equity 500 Index Fund, Small Cap Index Fund, EAFE Equity Index Fund,
and NASDAQ-100 Index Fund.
J-1
Exhibit K
Ownership in Securities of DeAM, Inc. and Related Companies
Value of
Securities Percent of
Owner and on an Class on an
Relationship to Title of Aggregate Aggregate
Director Nominees Director Company* Class Basis Basis
- ----------------- -------- -------- ----- ----- -----
Richard R. Burt
S. Leland Dill
Martin J. Gruber
Joseph R. Hardiman
Richard J. Herring
Graham E. Jones
Rebecca W. Rimel
Philip Saunders, Jr.
William N. Searcy
Robert H. Wadsworth
[*Describe the company's relationship with the Fund's investment advisor or
underwriter]
K-1
FORM OF PROXY CARD
[DEUTSCHE BANK LOGO]
[DEUTSCHE ASSET MANAGEMENT]
MUTUAL FUND SERVICES -- LEGAL DEPARTMENT
[CODE]
One South Street
Baltimore, Maryland 21202-3220
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-____-_____.
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:
Deutsche Bank Alex. Brown Cash Reserve Fund, Inc.
Prime Series
One South Street
Baltimore, Maryland 21202
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
1:30 p.m., Eastern time, on July 30, 2002
The undersigned hereby appoints Bruce A. Rosenblum, Tammie Lee and
Savonne L. Ferguson 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 I, II and III. All ABSTAIN votes will be counted in
determining the existence of a quorum at the Special Meeting and, for Proposals
I and II will have the effect of votes AGAINST the Proposals.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
WITH RESPECT TO YOUR FUND.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR PROPOSALS I, II AND III.
---
UNLESS VOTING BY TELEPHONE OR INTERNET,
PLEASE SIGN AND DATE BELOW AND MAIL THIS
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
KEEP THIS PORTION FOR YOUR RECORDS.
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
DEUTSCHE BANK ALEX. BROWN CASH RESERVE FUND, INC.--PRIME SERIES
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 Directors
III. Election of Messrs. (01) Richard Burt, (02) S. Leland Dill,
(03) Richard Hale, (04) Joseph Hardiman, (05) Graham Jones, For All Withhold All For All Except: To withhold authority
(06) Philip Saunders, (07) William Searcy and (08) Robert to vote, mark "For All
Wadsworth, Drs. (09) Martin Gruber and (10) Richard Herring [ ] [ ] [ ] Except" and write the
and (11) Ms. Rebecca Rimel as Directors of the Board. nominee's number on
the line below.
_________________
Vote on Proposals
I. Approval of a New Advisory
Agreement with Deutsche Asset
Management, Inc. FOR [ ] AGAINST [ ] ABSTAIN [ ]
- ------------------------------------------------------------
- ------------------------------------------------------------
Signature (Please sign within box) Date
II. Approval of a change in the
Prime Series' concentration
policy. FOR [ ] AGAINST [ ] ABSTAIN [ ]
The appointed proxies will vote on any other business
as may properly come before the Special Meeting
Receipt of the Notice and the Joint Proxy Statement,
dated ______ __, 2002 (the "Proxy Statement"), is
hereby acknowledged.
--------------------------------------------------------
--------------------------------------------------------
Signature (Joint Owners) Date
[DEUTSCHE BANK LOGO]
[DEUTSCHE ASSET MANAGEMENT]
MUTUAL FUND SERVICES -- LEGAL DEPARTMENT
[Code]
One South Street
Baltimore, Maryland 21202-3220
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-____-_____.
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:
Deutsche Bank Alex. Brown Cash Reserve Fund, Inc.
Treasury Series
One South Street
Baltimore, Maryland 21202
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
1:30 p.m., Eastern time, on July 30, 2002
The undersigned hereby appoints Bruce A. Rosenblum, Tammie Lee and
Savonne L. Ferguson 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 I and III. All ABSTAIN votes will be counted in
determining the existence of a quorum at the Special Meeting and, for Proposal I
will have the effect of votes AGAINST the Proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
WITH RESPECT TO YOUR FUND. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR PROPOSALS I AND III.
---
UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE
BELOW AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
KEEP THIS PORTION FOR YOUR RECORDS.
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
DEUTSCHE BANK ALEX. BROWN CASH RESERVE FUND, INC.--TREASURY SERIES
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 Directors
III. Election of Messrs. (01) Richard Burt, (02) S. Leland Dill,
(03) Richard Hale, (04) Joseph Hardiman, (05) Graham Jones, For All Withhold All For All Except: To withhold authority
(06) Philip Saunders, (07) William Searcy and (08) Robert to vote, mark "For All
Wadsworth, Drs. (09) Martin Gruber and (10) Richard Herring [ ] [ ] [ ] Except" and write the
and (11) Ms. Rebecca Rimel as Directors of the Board. nominee's number on
the line below.
_________________
Vote on Proposal
I. Approval of a New Advisory
Agreement with Deutsche Asset
Management, Inc. FOR [ ] AGAINST [ ] ABSTAIN [ ]
- ------------------------------------------------------------
- ------------------------------------------------------------
Signature (Please sign within box) Date
The appointed proxies will vote on any other business
as may properly come before the Special Meeting
Receipt of the Notice and the Joint Proxy Statement,
dated ______ __, 2002 (the "Proxy Statement"), is
hereby acknowledged.
--------------------------------------------------------------
--------------------------------------------------------------
Signature (Joint Owners) Date
[DEUTSCHE BANK LOGO]
[DEUTSCHE ASSET MANAGEMENT]
MUTUAL FUND SERVICES -- LEGAL DEPARTMENT
[Code]
One South Street
Baltimore, Maryland 21202-3220
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-____-_____.
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:
Deutsche Bank Alex. Brown Cash Reserve Fund, Inc.
Tax-Free Series
One South Street
Baltimore, Maryland 21202
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
1:30 p.m., Eastern time, on July 30, 2002
The undersigned hereby appoints Bruce A. Rosenblum, Tammie Lee and
Savonne L. Ferguson 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 I and III. All ABSTAIN votes will be counted in
determining the existence of a quorum at the Special Meeting and, for Proposal I
will have the effect of votes AGAINST the Proposal.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS WITH RESPECT TO YOUR FUND. THE BOARD
OF DIRECTORS RECOMMENDS A VOTE
FOR PROPOSALS I AND III.
---
UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN AND
DATE BELOW AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
KEEP THIS PORTION FOR YOUR RECORDS.
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
DEUTSCHE BANK ALEX. BROWN CASH RESERVE FUND, INC.--TAX-FREE SERIES
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 Directors
III. Election of Messrs. (01) Richard Burt, (02) S. Leland Dill,
(03) Richard Hale, (04) Joseph Hardiman, (05) Graham Jones, For All Withhold All For All Except: To withhold authority
(06) Philip Saunders, (07) William Searcy and (08) Robert to vote, mark "For All
Wadsworth, Drs. (09) Martin Gruber and (10) Richard Herring [ ] [ ] [ ] Except" and write the
and (11) Ms. Rebecca Rimel as Directors of the Board. nominee's number on
the line below.
_________________
Vote on Proposal
I. Approval of a New Advisory
Agreement with Deutsche Asset
Management, Inc. FOR [ ] AGAINST [ ] ABSTAIN [ ]
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Signature (Please sign within box) Date
The appointed proxies will vote on any other business as may properly
come before the Special Meeting
Receipt of the Notice and the Joint Proxy Statement, dated ______ __,
2002 (the "Proxy Statement"), is hereby acknowledged.
----------------------------------------------------------
----------------------------------------------------------
Signature (Joint Owners) Date