SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(a) Of The Securities
Exchange Act Of 1934 (Amendment No. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
BBH Common Settlement Fund II, Inc.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the 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:
BBH COMMON SETTLEMENT FUND II, INC.
63 Wall Street, New York, New York 10005
(800) 625-5759
Notice of Special Meeting of Stockholders
To be held August 2, 2002
A Special Meeting of Stockholders of BBH Common Settlement Fund II, Inc.
(the "Fund") will be held at the offices of Brown Brothers Harriman & Co. at 50
Milk Street, Boston, Massachusetts 02109 on Friday, August 2, 2002 at 9:00 a.m.,
Eastern Time, for the following purposes:
(Please note that the implementation by the Fund of the investment policy
changes described below is contingent upon the approval of corresponding changes
in the investment policies of the BBH U.S. Money Market Portfolio (the
"Portfolio"), in which all of the Fund's assets are invested. The Fund will vote
its interests in the Portfolio proportionately in accordance with the votes cast
by the Fund's stockholders at the Special Meeting with respect to Proposals 2, 4
and 6 below. The Board of Directors of the Fund recommends unanimously that
stockholders vote FOR proposals 1 through 6.)
PROPOSAL 1: To modify the Fund's fundamental policy regarding borrowing.
PROPOSAL 2: To authorize the Fund to act by any authorized means to approve
a corresponding modification to the Portfolio's fundamental
policy regarding borrowing (which approval by the Portfolio's
investors, as a group, must occur before the proposed change to
the Fund's policy may be implemented).
PROPOSAL 3: To eliminate the Fund's fundamental policy regarding investments
in restricted securities.
PROPOSAL 4: To authorize the Fund to act by any authorized means to approve
the elimination of the Portfolio's fundamental investment policy
regarding investments in restricted securities (which approval
by the Portfolio's investors, as a group, must occur before the
Fund's related policy may be eliminated).
PROPOSAL 5: To eliminate the Fund's fundamental policy regarding investments
in other investment companies.
PROPOSAL 6: To authorize the Fund to act by any authorized means to approve
the elimination of the Portfolio's fundamental investment policy
regarding investments in other investment companies (which
approval by the Portfolio's investors, as a group, must occur
before the Fund's related policy may be eliminated).
The persons appointed as proxies on the enclosed Proxy Card will vote in
their discretion on any other business as may properly come before the Special
Meeting or any adjournment or postponement thereof. Only stockholders of record
as of the close of business on June 26, 2002 will be entitled to vote at the
Meeting and at any adjournment or postponement thereof.
By order of the Board of Directors,
Christine D. Dorsey, Secretary
July 6, 2002
YOUR VOTE IS IMPORTANT. We would appreciate your completing, signing and
returning the enclosed Proxy Card promptly, which will help in avoiding the
additional expense of further solicitations. A stamped, self-addressed envelope
is enclosed for your convenience.
PROXY STATEMENT
This Proxy Statement and accompanying Proxy Card are being furnished to you
in connection with the solicitation of proxies by and on behalf of the Board of
Directors of BBH Common Settlement Fund II, Inc. (the "Fund") for use at a
Special Meeting of Stockholders of the Fund to be held at the offices of Brown
Brothers Harriman & Co. at 50 Milk Street, Boston, Massachusetts 02109 on
Friday, August 2, 2002 at 9:00 a.m., Eastern Time (the "Meeting"), and at any
adjournment or postponement thereof. The solicitation of votes is made by the
mailing of this Proxy Statement and the accompanying Proxy Card on or about July
6, 2002 to stockholders of record at the close of business on June 26, 2002 (the
"Record Date"). Only stockholders of record on the Record Date will be entitled
to vote at the Meeting.
Information about the Meeting
The number of shares of common stock of the Fund outstanding and entitled
to vote at the Meeting as of the Record Date was 514,632,990. Each such share is
entitled to one vote, and fractional shares are entitled to proportionate shares
of one vote. A list of stockholders who owned beneficially more than 5% of the
Fund's outstanding shares as of the Record Date is set forth in Appendix A. To
the best knowledge of the Fund, no other person(s) owned beneficially more than
5% of the Fund's outstanding shares as of the Record Date.
Each of the proposals described below requires the affirmative vote of a
"majority of the outstanding voting securities" of the Fund, which means the
lesser of (i) 67% of the Fund's shares present at the Meeting, if the holders of
more than 50% of the Fund's shares then outstanding are present in person or by
proxy; or (ii) more than 50% of the Fund's outstanding voting securities.
A quorum for the Meeting will be obtained by the presence, in person or by
proxy, of the holders of a majority of the shares of the Fund entitled to vote
at the Meeting. If a quorum is not present at the Meeting, or if a quorum is
present at the Meeting but sufficient votes to approve one or more proposals are
not received, the persons named as proxies may propose one or more adjournments
of the Meeting (with respect to all or some of the proposals) to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of those shares affected by the adjournment represented at the
Meeting in person or by proxy. When voting on a proposed adjournment, the
persons named as proxies on the enclosed Proxy Card will vote FOR the proposed
adjournment all shares that they are entitled to vote with respect to a given
proposal, unless directed to vote AGAINST the proposal, in which case such
shares will be voted AGAINST the proposed adjournment with respect to that
proposal. A stockholder vote may be taken on one or more proposals before any
such adjournment if sufficient votes have been received for approval.
In order that your shares may be represented at the Meeting, you are
requested to:
o Indicate your instructions on the enclosed Proxy Card;
o Date and sign the Proxy Card;
o Mail the Proxy Card promptly in the enclosed envelope, which requires
no postage if mailed in the United States; and
o Allow sufficient time for the Proxy Card to be received before 9:00 a.m.
on August 2, 2002.
You may revoke your proxy at any time prior to the Meeting by written
notice of such revocation to the Fund or by submitting a Proxy Card bearing a
later date. You may also revoke an earlier submitted proxy be attending the
Meeting in person.
If you return your Proxy Card with no voting instructions, your shares will
be voted in favor of each matter described in this Proxy Statement. If you give
instructions to "abstain", your shares will be represented at the Meeting for
purposes of determining whether a quorum is present and your instructions to
"abstain" will have the same effect as a vote "against" the proposal. For
purposes of determining the presence of a quorum for transacting business at the
Meeting, abstentions and broker "non-votes" (which are proxies from brokers or
nominees indicating that such 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. For
this reason, abstentions and broker "non-votes" will have the effect of a vote
"against" the proposal(s) to which they relate. The Fund's Articles of
Incorporation provide that at any meeting of the Fund's stockholders Brown
Brothers Harriman & Co. ("BBH"), as an eligible institution or stockholder
servicing agent, may vote any shares as to which it is the agent of record and
that are not otherwise represented in person or by proxy at the Meeting,
proportionately in accordance with the votes cast by holders of all shares
otherwise represented at the meeting in person or by proxy as to which BBH is
the agent of record. Any shares so voted by BBH will be deemed represented at
the meeting for purposes of determining whether a quorum has been obtained.
Information about the Proposals
The proposals that stockholders will be asked to consider at the Meeting
concern changes to certain fundamental investment policies of the Fund and the
BBH U.S. Money Market Portfolio (the "Portfolio"), a registered open-end
management investment company having the same investment objective and policies
as the Fund and in which all of the Fund's investable assets are invested.1 The
proposed changes are designed primarily to enhance the management capabilities
of the Portfolio and the Fund and to modify or eliminate certain restrictions
that were originally instituted in response to state law requirements that no
longer apply. The Investment Company Act of 1940, as amended (the "1940 Act"),
requires that any changes to a registered investment company's fundamental
investment policies be approved by the company's stockholders.
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1 The Portfolio is the HubSM, and the Fund is one of several SpokesSM, in
a Hub and SpokeR investment structure. The Fund seeks to achieve its
investment objective by investing all of its investable assets in the
Portfolio.
2
Because the Fund seeks to achieve its investment objective by investing all
of its investable assets in the Portfolio and they have substantially identical
investment policies, a proposed change in one or more fundamental investment
policies at the Portfolio level must be (i) approved by the Fund, as an investor
in the Portfolio, and (ii) reflected by corresponding changes to the fundamental
investment policies of the Fund (unless the Directors of the Fund determine that
such changes would not be in the best interests of the Fund and its
stockholders, in which case the Fund would seek to invest its assets in a
different investment company with compatible investment policies or acquire
securities directly in accordance with the Fund's investment objective and
policies). Thus, although the investment policies described below relate
primarily to the investment activities of the Portfolio, they need to be
approved by the Fund's stockholders in order for the Fund to remain fully
invested in the Portfolio.
The Directors of the Fund believe that the proposed revisions to the
investment policies of the Fund and the Portfolio described below maintain
important stockholder protections while providing the Portfolio and the Fund
with needed flexibility to respond to different market conditions and future
changes in applicable laws and regulations. As money market funds, both the Fund
and the Portfolio remain subject to strict federal regulations that govern the
quality, liquidity, maturity, diversity and other features of the securities in
which they may invest.
The proposed changes were approved unanimously by the Board of Trustees of
the Portfolio and the Board of Directors of the Fund at meetings of each Board
held on October 1, 2001. When the Portfolio seeks the approval of its investors
for the proposed investment policy changes, the Fund will indicate its approval
with respect to each proposal in the same proportion as the votes cast by the
Fund's stockholders at the Meeting.2 The implementation of the proposed changes
by the Fund is contingent upon the approval by the Portfolio's investors, as a
group, of corresponding changes at the Portfolio level. The Board of Directors
of the Fund recommends unanimously that stockholders vote FOR proposals 1
through 6.
Proposals 1 and 2:
1: To modify the Fund's fundamental policy regarding borrowing.
2: To authorize the Fund to act by any authorized means to
approve a corresponding modification to the Portfolio's
fundamental policy regarding borrowing (which approval by the
Portfolio's investors, as a group, must occur before the
proposed change to the Fund's policy may be implemented).
Currently, neither the Portfolio nor the Fund may borrow money except for
extraordinary or emergency purposes, and then only in amounts not to exceed 10%
of the value of their respective total assets (taken at cost) at the time of the
borrowing. In addition, neither the Portfolio nor the Fund may mortgage, pledge
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2 For example, if 80% of stockholder votes are cast at the Meeting in
favor of a particular proposal, the Fund will indicate its approval of
the corresponding change at the Portfolio level with respect to only
80% of the Fund's shares in the Portfolio.
3
or hypothecate any assets except in connection with such borrowings and in
amounts not to exceed 10% of the value of their respective net assets at the
time of the borrowing, and may not purchase securities while borrowings exceed
5% of their respective total assets. The Fund and the Portfolio are also limited
as to the purposes for which they may borrow (e.g., to facilitate the orderly
sale of portfolio securities and to meet abnormally heavy redemption requests),
and may not borrow for investment purposes.
The 1940 Act permits a registered investment company to borrow money from
banks, so long as it maintains asset coverage of 300% for all outstanding
borrowings.3 It is proposed that the fundamental policy described in the
preceding paragraph be modified to permit the Portfolio and the Fund to borrow
money to the maximum extent permitted by the 1940 Act. As a general matter, a
fund that borrows money is susceptible to the risk of having to sell portfolio
securities at an inopportune time in order to maintain the 300% asset coverage
ratio required by the 1940 Act. Borrowing may also exaggerate the impact on a
fund of any increase or decrease in the value of its investments (which would
have a corresponding effect on the fund's share value). Money borrowed is also
subject to share costs. To the extent the Portfolio and/or the Fund borrow
significantly more under the proposed policy than they do under their current
policy, they would be susceptible to a correspondingly higher degree of
borrowing risk.
Under the current 10% borrowing policy, the Portfolio must maintain a
significant amount of uninvested cash in order to be prepared to meet redemption
requests received later in the day. Any cash remaining after the day's
redemption requests have been processed may be used for investment purposes, but
the availability of suitable investments later in the day tends to be limited
and those that are available often generate lower yields. The increased
borrowing ability reflected in the proposed policy would enable the Portfolio to
invest its assets more advantageously while at the same time maintaining its
ability to meet redemption requests on a timely basis. The proposed policy would
also enable the Portfolio and the Fund to adjust their borrowing practices in
response to any future change in applicable law without having to seek investor
approval.
With respect to the other elements of the Fund's and the Portfolio's
existing borrowing policies, it is proposed that (i) they be made
"non-fundamental" (meaning that they could be changed by the Directors of the
Fund and the Trustees of the Portfolio without investor approval) and (ii) the
amount of assets that the Fund and the Portfolio could mortgage, pledge or
hypothecate in connection with their respective borrowings be increased from 10%
to 33-1/3% (which would mirror their increased borrowing ability under the new
fundamental investment policy).4
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3 Funds must reduce the amount of their borrowings within three days if
their asset coverage falls below 300%.
4 The Trustees/Directors do not currently intend to permit the
Portfolio or the Fund to borrow for investment leverage
purposes. Such borrowings, if permitted, would increase the Portfolio's
and the Fund's susceptibility to price movements and the risk of loss
in a declining market.
4
Based on the foregoing, and subject to the affirmative vote of the Fund's
stockholders and the approval of the Portfolio's investors, the fundamental
borrowing policy for the Fund and the Portfolio would be as follows:
"Neither the Portfolio nor the Fund may borrow money, except as
permitted by the Investment Company Act of 1940, as amended, and rules
thereunder."
In addition, and subject to the approval by the Fund's stockholders and the
Portfolio's investors of the fundamental investment policy stated above, the
Portfolio and the Fund would be subject to the following non-fundamental
borrowing policy (which could be changed by the Directors of the Fund and the
Trustees of the Portfolio without investor approval):
"Neither the Portfolio nor the Fund may mortgage, pledge or hypothecate
any of its assets except in connection with one or more borrowings
described in its fundamental restriction regarding borrowing and in
amounts not to exceed 33-1/3% of the value of its total assets at the
time of such borrowing(s). Neither the Portfolio nor the Fund may
purchase securities at any time that its borrowings exceed 5% of its
total assets. It is intended that any borrowing by the Portfolio or the
Fund will be to facilitate the orderly sale of portfolio securities
and/or to meet redemption requests, and will not be for investment
purposes."
Proposals 3 and 4:
3: To eliminate the Fund's fundamental policy regarding
investments in restricted securities.
4: To authorize the Fund to act by any authorized means to
approve the elimination of the Portfolio's fundamental
investment policy regarding investments in restricted
securities (which approval by the Portfolio's investors, as a
group, must occur before the Fund's related policy may be
eliminated).
Currently, the Portfolio and the Fund have a non-fundamental investment
policy stating that neither may "invest more than 10% of its net assets (taken
at the greater of cost or market value) in restricted securities". The Portfolio
and the Fund also have a fundamental investment policy stating that neither may
"purchase securities which may not be resold to the public without registration
under the Securities Act of 1933, as amended". A security that may not be resold
to the public without registration under the Securities Act of 1933, as amended
(the "1933 Act"), is commonly known as a "restricted security". As a general
matter, restricted securities may be sold (i) only to qualified institutional
buyers; (ii) in a privately negotiated transaction to a limited number of
purchasers; (iii) in limited quantities after they have been held for a
specified period of time and other conditions are met pursuant to an exemption
from registration; or (iv) in a public offering for which a registration
statement is in effect under the 1933 Act. As such, they are generally regarded
as "illiquid" (i.e., they cannot be disposed of within seven days in the
ordinary course of business at approximately the amount at which the company has
5
valued the instruments). Under current Securities and Exchange Commission
("SEC") interpretations, a money market fund may invest up to 10% of its net
assets in illiquid securities.5
Certain types of restricted securities (such as unregistered securities
eligible for resale pursuant to Rule 144A under the 1933 Act and unregistered
commercial paper sold pursuant to Section 4(2) of the 1933 Act) may be deemed
liquid by a fund's board of directors/trustees or by the fund's adviser pursuant
to board-approved guidelines (which normally identify certain factual
considerations relating to the trading market for the securities).6 Accordingly,
it is possible for a money market fund to have more than 10% of its assets
invested in restricted securities without violating its 10% limit on illiquid
securities, so long as the value of all illiquid securities held by the fund
(including restricted securities that cannot be considered liquid and any other
securities that cannot be disposed of within seven days in the ordinary course
of business at approximately the amount at which the company has valued the
instruments) do not exceed 10% of the fund's net assets.7
In light of the foregoing, it is proposed that the fundamental investment
policy described above be eliminated,8 and that the non-fundamental policy to
which the Fund and the Portfolio are already subject be modified so that the 10%
limit applies to investments in "illiquid" securities (rather than "restricted"
securities, as is currently the case). This would provide the Fund and the
Portfolio with the maximum investment flexibility permitted under current law
and SEC positions and enable the Directors to respond on a timely basis to any
future changes in this area.
Accordingly, and subject to the affirmative vote of the Fund's stockholders
and the approval of the Portfolio's investors, the fundamental policy for the
Fund and the Portfolio regarding investments in restricted securities would be
eliminated, and the Fund and the Portfolio would be made subject instead to the
following non-fundamental policy (which could be changed by the Directors of the
Fund and the Trustees of the Portfolio without investor approval):
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5 SEC Release No. 21837 (March 21, 1986), citing SEC Release No. 13380
(July 11, 1983) (adopting Rule 2a-7 under the 1940 Act). The principal
concerns associated with illiquid securities include (i) decreased
management flexibility (i.e., more limited options as to which
investments will be disposed of to meet redemption requests on a timely
basis) and (ii) portfolio valuation (since a fund's net asset value per
share determines the price at which stockholders purchase and redeem
fund shares).
6 The Directors of the Fund and the Trustees of the Portfolio have
approved such guidelines for determining the liquidity of any
restricted securities they hold.
7 If, as a result of changed conditions, a restricted security that had
been considered liquid is later deemed illiquid, the fund's total
holdings in illiquid securities would have to be reviewed to ensure
that the 10% limit on such securities is still being met. An
inadvertent violation of the 10% limit must be corrected as soon as is
reasonably practicable (i.e., the fund's next investment transactions
must be consistent with bringing the fund's illiquid holdings back
within the 10% limit).
8 The 1940 Act does not require funds to have a fundamental policy on
investments in illiquid or restricted securities.
6
"Neither the Portfolio nor Fund may invest more than 10% of its net
assets (taken at the greater of cost or market value) in illiquid
securities".
Proposal 5 and 6:
5: To eliminate the Fund's fundamental policy regarding
investments in other investment companies.
6: To authorize the Fund to act by any authorized means to
approve the elimination of the Portfolio's fundamental
investment policy regarding investments in other investment
companies (which approval by the Portfolio's investors, as a
group, must occur before the Fund's related policy may be
eliminated).
Currently, the Fund and the Portfolio have a fundamental investment policy
prohibiting them from acquiring shares in other investment companies (subject to
the Fund's general ability to invest all of its investable assets in any
open-end investment company with substantially the same investment objective,
policies and restrictions as the Fund).
Section 12(d)(1) of the 1940 Act permits a registered investment company to
acquire the shares of other investment companies, so long as immediately after
the acquisition (i) the acquiring fund owns not more than 3% of the acquired
fund's outstanding securities, (ii) securities of the acquired fund represent
not more than 5% of the total assets of the acquiring fund, and (iii) securities
of the acquired fund and all other investment companies in which the acquiring
fund has invested represent not more than 10% of the total assets of the
acquiring fund. The 1940 Act also permits a fund to acquire the shares of
another investment company in connection with a merger, consolidation,
reorganization or acquisition of fund assets.
It is proposed that the fundamental policy of the Fund and the Portfolio
regarding investments in other investment companies be made non-fundamental,9
and be modified to permit the Fund and the Portfolio to make such investments to
the maximum extent contemplated by Section 12(d)(1) of the 1940 Act.10 As
discussed in connection with Proposal 1, above, the limited supply of suitable
investments later in the day creates certain cash management issues stemming
from the flow of investment into and out of the Portfolio. Currently, the
Portfolio has a limited array of investment options for investing cash it
receives or has accumulated as a result of purchase orders placed later in the
day. If the proposed policy changes were approved, the Portfolio would have the
option of investing its excess cash in one or more money market funds (which,
depending on the circumstances, are likely to offer higher yields relative to
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9 There is no requirement under the 1940 Act that a fund's policies with
respect to investing in other investment companies be stated as a
fundamental policy.
10 As money market funds, the Portfolio and the Fund would remain subject
to any restrictions on investments in other investment companies
contained in Rule 2a-7 under the 1940 Act (i.e., such investments must
be consistent with the maintenance of a stable share value).
7
the Portfolio's other investment options). As stockholders of other investment
companies, the Portfolio and the Fund would bear their pro rata portion of the
other investment companies' expenses, including advisory fees. The impact of
such expenses will vary depending on the amount of investment company securities
held by the Portfolio or the Fund (which cannot in any case exceed 10% of their
respective total assets - see preceding paragraph) and the length of time the
positions are held.
Based on the foregoing, and subject to the affirmative vote of the Fund's
stockholders and the approval of the Portfolio's investors, the fundamental
policy for the Fund and the Portfolio regarding investments in other investment
companies would be eliminated, and the Fund and the Portfolio would be made
subject instead to the following non-fundamental policy (which could be changed
by the Directors of the Fund and the Trustees of the Portfolio without investor
approval):
"Neither the Portfolio nor Fund may purchase securities of other
investment companies, except in connection with a merger,
consolidation, reorganization or acquisition of assets, and except that
each may invest in securities of other investment companies subject to
the restrictions set forth in Section 12(d)(1) of the Investment
Company Act of 1940, as amended."
Other Business
Neither the Directors of the Fund nor the persons appointed as proxies are
aware of any matters other than those set forth in the accompanying Notice of
Special Meeting of Stockholders that may be presented at the Meeting, nor do
they have any intention of bringing before the Meeting for action any matters
other than those specified in the Notice of Special Meeting of Stockholders. If
any other business shall properly come before the Meeting, the persons appointed
as proxies shall vote thereon in accordance with their best judgment.
Additional Information
Solicitation Expenses
The Fund will bear all proxy solicitation costs, which are estimated to be
approximately $5,000 (including the cost of preparing, printing and mailing this
Proxy Statement and the related Notice of Special Meeting of Stockholders and
Proxy Card, and all other costs incurred in connection with the solicitation of
proxies for the Meeting). Proxies will be solicited primarily through the
mailing of this Proxy Statement. The Fund's officers and the eligible
institutions through which certain stockholders hold shares in the Fund may also
solicit proxies by telephone or personal interview, for which they will receive
no additional compensation or reimbursement.
Stockholder Proposals
The Articles of Incorporation and the By-Laws of the Fund provide that the
Fund need not hold annual stockholder meetings, except as required by the 1940
Act. It is not expected that an annual meeting of stockholders will be held
8
later this year or in subsequent years unless so required. Stockholders wishing
to submit proposals for inclusion in a proxy statement for a stockholder meeting
subsequent to the Special Meeting of Stockholders to be held on August 2, 2002
should send their written proposals to the Fund's Secretary at the offices of
the Fund, 63 Wall Street, New York, New York 10005, within a reasonable time
before the solicitation of proxies for the meeting. The timely submission of a
proposal does not guarantee its inclusion.
Service Providers
Brown Brothers Harriman Trust Company, LLC (the "Administrator"), located
at 59 Wall Street, New York, New York 10005, serves as Administrator for the
Fund and the Portfolio. Brown Brothers Harriman & Co. ("BBH & Co."), located at
59 Wall Street, New York, New York 10005, and 59 Wall Street Administrators,
Inc., located at 21 Milk Street, Boston, Massachusetts 02109, each perform
certain subadministrative services for the Fund and the Portfolio pursuant to
separate Subadministrative Services Agreements with the Administrator. BBH & Co.
also serves as investment adviser to the Portfolio. 59 Wall Street Distributors,
Inc., located at 21 Milk Street, Boston, Massachusetts 02109, serves as the
Placement Agent for the Fund and the Portfolio.
Annual Report
The Fund's most recent Annual and Semi-Annual Reports to Stockholders are
available upon request and without charge by calling the Fund at (800) 625-5759
or by writing to the Fund c/o Brown Brothers Harriman & Co., 59 Wall Street, New
York, New York, 10005. You may also send your request by e-mail to
bbhfunds@bbh.com. The Fund's Annual Report contains audited financial statements
for the Fund's fiscal year ended June 30, 2001 and was mailed on or about August
29, 2001 to stockholders of record as of that date.
* * * * *
Please complete the enclosed Proxy Card and return it promptly in the enclosed
postage-paid envelope. You may revoke your proxy at any time prior to the
Meeting by written notice to the Fund or by submitting a Proxy Card bearing a
later date.
By Order of the Board of Directors,
Christine D. Dorsey, Secretary
9
APPENDIX A
OWNERS OF MORE THAN 5% OF THE FUND'S
OUTSTANDING SHARES OF COMMON STOCK
AS OF JUNE 26, 2002
Number of Percentage of Total
Name and Address Shares Owned Shares Outstanding
Merrill Lynch Pierce Fenner & 125,000,000 24.29%
Smith, Incorporated
1 South Wacker Drive, Suite 300
Chicago, IL 60606
Bear Stearns Securities Corp. 85,888,013 16.69%
383 Madison Ave.
New York, NY 10179
ADM Investor Services, Inc. 56,298,847 10.94%
141 W. Jackson Blvd, Suite 1600A
Chicago, IL 60604
Greenwich Capital Markets, Inc. 45,807,721 8.90%
550 W. Jackson Blvd., Suite 1700
Chicago, IL 60661
Credit Suisse First Boston Corp. 35,327,683 6.86%
11 Madison Avenue
New York, NY 10010
RB&H Financial Services, L.P. 34,998,614 6.80%
30 S. Wacker Drive, Suite 1912
Chicago, IL 60606
10
PROXY CARD
BBH COMMON SETTLEMENT FUND II, INC.
A Proxy Solicited by the Board of Directors of
BBH Common Settlement Fund II, Inc.
for a Special Meeting of Stockholders to be held on August 2, 2002
The undersigned, revoking all proxies heretofore given, hereby appoints
each of Joseph V. Shields, Jr., Philip W. Coolidge, Christine D. Dorsey, Susan
Jakuboski and Kate T. Alen, or any one of them, as proxy of the undersigned,
each with full power of substitution, to vote on behalf of the undersigned all
shares of common stock of BBH Common Settlement Fund II, Inc. (the "Fund") that
the undersigned is entitled to vote at the Special Meeting of Stockholders of
the Fund to be held at the offices of Brown Brothers Harriman & Co. at 50 Milk
Street, Boston, Massachusetts 02109, on Friday, August 2, 2002 at 9:00 a.m.,
Eastern Time, and at any adjournment or postponement thereof, as fully as the
undersigned would be entitled to vote if personally present, as follows:
(Please note that the implementation by the Fund of the investment policy
changes described below is contingent upon the approval of corresponding changes
in the investment policies of the BBH U.S. Money Market Portfolio (the
"Portfolio"), in which all of the Fund's assets are invested. The Fund will vote
its interests in the Portfolio proportionately in accordance with the votes cast
by the Fund's stockholders at the Special Meeting with respect to Proposals 2, 4
and 6 below. The Board of Directors of the Fund recommends unanimously that
stockholders vote FOR proposals 1 through 6.)
PROPOSAL 1: To modify the Fund's fundamental policy regarding borrowing.
____ FOR ____ AGAINST ____ ABSTAIN
PROPOSAL 2: To act by any authorized means to approve a corresponding
modification to the Portfolio's fundamental policy regarding
borrowing (which approval by the Portfolio's investors, as a
group, must occur before the proposed change to the Fund's
policy may be implemented).
____ FOR ____ AGAINST ____ ABSTAIN
PROPOSAL 3: To eliminate the Fund's fundamental policy regarding investments
in restricted securities.
____ FOR ____ AGAINST ____ ABSTAIN
PROPOSAL 4: To authorize the Fund to act by any authorized means to
approve the elimination of the Portfolio's fundamental
investment policy regarding investments in restricted
securities (which approval by the Portfolio's investors,
as a group, must occur before the Fund's related policy
may be eliminated).
____ FOR ____ AGAINST ____ ABSTAIN
PROPOSAL 5: To eliminate the Fund's fundamental policy regarding investments
in other investment companies.
____ FOR ____ AGAINST ____ ABSTAIN
PROPOSAL 6: To authorize the Fund to act by any authorized means to
approve the elimination of the Portfolio's fundamental
investment policy regarding investments in other
investment companies (which approval by the Portfolio's
investors, as a group, must occur before the Fund's
related policy may be eliminated).
____ FOR ____ AGAINST ____ ABSTAIN
The shares represented hereby will be voted as indicated, or FOR any proposals
for which no choice is indicated. The proxies named above are authorized in
their discretion to vote upon such other matters as may properly come before the
meeting and any adjournment or postponement thereof.
Date: _________________ ____________________________________
Signature*
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Signature of joint owner, if any*
* Note: Please sign exactly as your name appears on this Card. When signing
as attorney, executor, administrator, trustee, guardian, or as custodian
for a minor, please sign your name and give your full title as such. If
signing on behalf of a corporation, please sign the full corporate name and
your name and indicate your title. If you are a partner signing for a
partnership, please sign the partnership name and your name. Joint owners
should each sign this Card.
PLEASE SIGN, DATE AND RETURN THIS CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE