Scudder Funds Trust
345 Park Avenue (at 51st Street)
New York, New York 10154
(800) 225-5163
October 11, 1996
To the Shareholders:
A Special Meeting of Shareholders of Scudder Funds Trust (the "Trust"),
consisting of Scudder Short Term Bond Fund and Scudder Zero Coupon 2000 Fund
(the "Funds") is to be held at 3:00 p.m., eastern time, on Monday, December 2,
1996, at the offices of Scudder, Stevens & Clark, Inc., 25th Floor, 345 Park
Avenue (at 51st Street), New York, New York 10154. Shareholders who are unable
to attend this meeting are strongly encouraged to vote by proxy, which is
customary in corporate meetings of this kind. A Proxy Statement regarding the
meeting, a proxy card for your vote at the meeting and an envelope--postage
prepaid--in which to return your proxy card are enclosed.
At the Special Meeting the shareholders will elect Trustees of the Trust
and consider the ratification of the selection of Coopers & Lybrand L.L.P. as
the Funds' independent accountants. In addition, the shareholders present will
hear a report on the Funds. There will be an opportunity to discuss matters of
interest to you as a shareholder.
Your Fund's Trustees recommend that you vote in favor of each of the
foregoing matters.
Respectfully,
/s/Daniel Pierce
Daniel Pierce
President
SHAREHOLDERS ARE URGED TO SIGN THE PROXY CARD(S) AND MAIL IT IN THE ENCLOSED
POSTAGE PREPAID ENVELOPE SO AS TO ENSURE A QUORUM AT THE MEETING. THIS IS
IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES.
<PAGE>
Scudder Funds Trust
Notice of Special Meeting of Shareholders
To the Shareholders of
Scudder Short Term Bond Fund
and Scudder Zero Coupon 2000 Fund:
Please take notice that a Special Meeting of Shareholders of Scudder Funds Trust
(the "Trust"), consisting of Scudder Short Term Bond Fund and Scudder Zero
Coupon 2000 Fund (the "Funds") has been called to be held at the offices of
Scudder, Stevens & Clark, Inc., 25th Floor, 345 Park Avenue (at 51st Street),
New York, New York 10154 on Monday, December 2, 1996, at 3:00 p.m., eastern
time, for the following purposes:
(1) To elect seven Trustees to hold office until their respective
successors shall have been duly elected and qualified;
(2) To ratify or reject the action taken by the Board of Trustees in
selecting Coopers & Lybrand L.L.P. as independent accountants for the Funds for
the fiscal year ending December 31, 1997.
The appointed proxies will vote on any other business as may properly come
before the meeting or any adjournments thereof.
Holders of record of shares of beneficial interest of the Funds at the close of
business on October 4, 1996 are entitled to vote at the meeting and at any
adjournments thereof.
By Order of the Board of Trustees,
October 11, 1996 THOMAS F. MCDONOUGH, Secretary
IMPORTANT--We urge you to sign and date the enclosed proxy card(s) and return it
in the enclosed addressed envelope which requires no postage and is intended for
your convenience. Your prompt return of the enclosed proxy card(s) may save the
Trust the necessity and expense of further solicitations to ensure a quorum at
the Special Meeting. If you can attend the meeting and wish to vote your shares
in person at that time, you will be able to do so.
<PAGE>
Scudder Funds Trust
345 Park Avenue
New York, New York 10154
PROXY STATEMENT
General
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Scudder Funds Trust (the "Trust") for use at
the Special Meeting of Shareholders of Scudder Short Term Bond Fund and Scudder
Zero Coupon 2000 Fund (the "Funds"), to be held at the offices of Scudder,
Stevens & Clark, Inc. ("Scudder"), 25th Floor, 345 Park Avenue (at 51st Street),
New York, New York 10154, on Monday, December 2, 1996 at 3:00 p.m., eastern
time, and at any adjournments thereof (collectively, the "Meeting").
This Proxy Statement, the Notice of Special Meeting of Shareholders and the
proxy card are first being mailed to shareholders on or about October 11, 1996,
or as soon as practicable thereafter. All properly executed proxies received in
time for the Meeting will be voted as specified in the proxy or, if no
specification is made, in favor of each proposal referred to in the Proxy
Statement. Any shareholder giving a proxy has the power to revoke it by mail
(addressed to the Secretary of the Trust at the principal executive office of
the Trust, 345 Park Avenue, New York, New York 10154) or in person at the
Meeting, by executing a superseding proxy or by submitting a notice of
revocation to the Trust.
The presence at any shareholders' meeting, in person or by proxy, of
shareholders entitled to cast a majority of the votes entitled to be cast shall
be necessary and sufficient to constitute a quorum for the transaction of
business. For purposes of determining the presence of a quorum for transacting
business at the Meeting, abstentions and broker "non-votes" will be treated as
shares that are present but which have not been voted. Broker non-votes are
proxies received by the Funds from brokers or nominees when the broker or
nominee has neither received instructions from the beneficial owner or other
persons entitled to vote nor has discretionary power to vote on a particular
matter. Accordingly, shareholders are urged to forward their voting instructions
promptly.
Abstentions and broker non-votes will not be counted in favor of, but will
have no other effect on, the vote for proposals (1) and (2) which require the
approval of a plurality and majority, respectively, of shares voting at the
Meeting.
Shareholders of the Funds will vote together on the matters set forth in
this Proxy Statement. Holders of record of shares of beneficial interest of the
Funds at the close of business on October 4, 1996 (the "Record Date") will be
entitled to one vote per share on all business of the Meeting and any
adjournments. Shares of the Funds outstanding on the Record Date were as
follows:
Fund Shares
---- ------
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund
The Funds provide periodic reports to all shareholders which highlight
relevant information, including investment results and a review of portfolio
changes. You may receive an additional copy of the most recent annual report for
1
<PAGE>
either Fund, without charge, by calling (800) 225-2470 or writing the Funds at
P.O. Box 2291, Boston, Massachusetts 02107-2291.
(1) ELECTION OF TRUSTEES
Persons named on the accompanying proxy card intend, in the absence of
contrary instructions, to vote all proxies in favor of the election of the
nominees listed below as Trustees of the Trust to serve until their successors
are duly elected and qualified. All nominees have consented to stand for
election and to serve if elected. If a nominee should be unable to serve, an
event not now anticipated, the proxies will be voted for such person, if any, as
shall be designated by the Board of Trustees to replace such nominee. The Board
of Trustees recommends that shareholders vote in favor of the election of the
nominees listed below.
Information Concerning Nominees
The following table sets forth certain information concerning each of the
nominees as a Trustee of the Trust. With the exception of Ms. Quirk, each of the
nominees is now a Trustee of the Trust. Ms. Quirk, if elected, will replace
Juris Padegs as Trustee, who will be retiring from the Board on December 2,
1996. Unless otherwise noted, each of the nominees has engaged in the principal
occupation or employment listed in the following table for more than five years,
but not necessarily in the same capacity.
<TABLE>
<CAPTION>
Present Office with the
Trust, if any; Principal Shares
Occupation or Employment Year First Beneficially
and Directorships in Publicly Became a Owned on Percent
Name (Age) Held Companies Trustee August 31, 1996(1) of Class
---------- -------------- ------- ------------------ --------
<S> <C> <C> <C> <C>
Daniel Pierce (62)*# President; Chairman of the Board 1991
and Managing Director of Scudder,
Stevens & Clark, Inc.; Director,
Fiduciary Trust Company (bank and
trust company) and Fiduciary
Company Incorporated (bank and
trust company). Mr. Pierce serves
on the boards of an additional 47
funds managed by Scudder.
Lynn S. Birdsong (50)* Managing Director of Scudder, 1993
Stevens & Clark, Inc. Mr. Birdsong
serves on the board of one
additional fund managed by Scudder.
Sheyle J. Bolton (50) Consultant; President and Chief 1996
Operating Officer, Physicians' On-
line, Inc. (electronic transmission of
clinical information for physicians)
(1994-95); Member, Senior Manage-
ment Team, Rockefeller & Co.
(1990-93). Ms. Bolton serves on the
boards of an additional seven funds
managed by Scudder.
2
<PAGE>
Thomas J. Devine (69) Consultant. Mr. Devine serves on 1982
the boards of an additional 18
funds managed by Scudder.
Peter B. Freeman (64) Trustee, Eastern Utilities Associates; 1982
and Director, AMICA Life Insurance
Co. and AMICA Mutual Insurance Co.
Mr. Freeman serves on the boards of an
additional 17 funds managed by Scudder.
Dr. Wilson Nolen (69) Consultant; Director, Ecohealth, 1982
Inc.(biotechnology company). Dr.
Nolen serves on the boards of an
additional 17 funds managed by Scudder.
Kathryn L. Quirk (43)* Vice President and Assistant --
Secretary; Managing Director of
Scudder, Stevens & Clark, Inc. Ms.
Quirk serves on the boards of
an additional ___ funds managed by
Scudder.
</TABLE>
<TABLE>
<CAPTION>
Sole Shared Sole voting
investment investment but no
All Trustees and Officers and voting and voting investment Percent
as a group power power power(2) Total of Class
---------- ----- ----- -------- ----- --------
<S> <C> <C> <C> <C> <C>
Short Term Bond Fund
Zero Coupon 2000 Fund
TOTAL
</TABLE>
* Nominees considered by the Trust and its counsel to be persons who are
"interested persons" (which as used in this Proxy Statement is as defined in
the Investment Company Act of 1940) of the Trust or of the Funds' investment
adviser, Scudder, Stevens & Clark, Inc. Messrs. Birdsong and Pierce, and Ms.
Quirk are deemed to be "interested persons" because of their affiliation with
the Funds' investment adviser, or because they are Officers of the Funds or
both.
# Mr. Pierce is a member of the Executive Committee of the Trust.
(1)The information as to beneficial ownership is based on statements furnished
to the Trust by the nominees and Trustees. Unless otherwise noted, beneficial
ownership is based on sole voting and investment power.
(2)Shares held with sole voting but no investment power are shares held in
profit sharing and 401(k) plans for which Jerard K. Hartman serves as
trustee.
Certain accounts for which the Adviser acts as investment adviser owned
________ shares in the aggregate or ____% of the outstanding shares of Short
3
<PAGE>
Term Bond Fund on August 31, 1996. The Adviser may be deemed to be the
beneficial owner of such shares but disclaims any beneficial ownership in such
shares.
As of August 31, 1996, _______ shares in the aggregate or ____% of the
outstanding shares of Short Term Bond Fund, were held in the name of National
Financial Services Company, 200 Liberty Street, One World Financial Center, New
York, NY 10281-0095, who may be deemed to be the beneficial owner of certain of
these shares, but disclaims any beneficial ownership therein.
Except as noted above, to the best of each Fund's knowledge, as of August
31, 1996, no other person owned beneficially more than 5% of any of the Fund's
outstanding voting securities.
Responsibilities of the Board--Board and Committee Meetings
The Board of Trustees is responsible for the general oversight of the
Funds' business. A majority of the Board's members are not affiliated with
Scudder. These "Independent Trustees" have primary responsibility for assuring
that a Fund is managed in the best interests of its shareholders.
The Board of Trustees meets at least quarterly to review the investment
performance of a Fund and other operational matters, including policies and
procedures designated to assure compliance with various regulatory requirements.
At least annually, the Independent Trustees review the fees paid to Scudder and
its affiliates for investment advisory services and other administrative and
shareholder services. In this regard, they evaluate, among other things, a
Fund's investment performance, the quality and efficiency of the various other
services provided, costs incurred by Scudder and its affiliates, and comparative
information regarding fees and expenses of competitive funds. They are assisted
in this process by the Funds' independent public accountants and by independent
legal counsel selected by the Independent Trustees.
All of the Independent Trustees serve on the Committee on Independent
Trustees, which nominates Independent Trustees and considers other related
matters, and the Audit Committee, which selects the Funds' independent public
accountants and reviews accounting policies and controls. In addition,
Independent Trustees from time to time have established and served on task
forces and subcommittees focusing on particular matters such as investment,
accounting and shareholder service issues.
The Independent Trustees met four times during 1995, including Board and
Committee meetings and meetings to review a Fund's contractual arrangements as
described above. As a group, the Independent Trustees had a 75% attendance
record for all such meetings.
4
<PAGE>
Executive Officers
In addition to Mr. Pierce and Ms. Quirk, Nominees who are also Officers of the
Trust, the following persons are Executive Officers of the Trust:
<TABLE>
<CAPTION>
Present Office with the Trust; Year First
Name (Age) Principal Occupation or Employment(1) Became an Officer (2)
---------- ------------------------------------- ---------------------
<S> <C> <C>
Jerard K. Hartman (63) Vice President; Managing Director of
Scudder, Stevens & Clark, Inc.
Thomas W. Joseph (57) Vice President; Principal of Scudder,
Stevens & Clark, Inc.
David S. Lee (62) Vice President; Managing Director of
Scudder, Stevens & Clark, Inc.
Thomas F. McDonough (49) Vice President, Secretary and Assistant
Treasurer; Principal of Scudder, Stevens &
Clark, Inc.
Pamela A. McGrath (42) Vice President and Treasurer; Managing
Director of Scudder, Stevens & Clark, Inc.
Edward J. O'Connell (51) Vice President and Assistant Treasurer;
Principal of Scudder, Stevens & Clark, Inc.
Coleen Downs Dinneen (35) Assistant Secretary; Vice President of
Scudder, Stevens & Clark, Inc.
</TABLE>
(1) Unless otherwise stated, all Executive Officers have been associated with
Scudder for more than five years, although not necessarily in the same
capacity.
(2) The President, Treasurer and Secretary each hold office until his or her
successor has been duly elected and qualified, and all other officers hold
office in accordance with the By-laws of the Trust.
Compensation of Trustees
The Independent Trustees receive the following compensation from the Trust:
an annual trustee's fee of $4,000; a fee of $200 per Fund for attendance at each
Board meeting, audit committee meeting, or other meeting held for the purposes
of considering arrangements between a Fund and Scudder or any affiliate of
Scudder; $75 for any other committee meeting (although in some cases the
Independent Trustees have waived committee meeting fees); and reimbursement of
expenses incurred for travel to and from Board Meetings. No additional
compensation is paid to any Independent Trustee for travel time to meetings,
attendance at directors' educational seminars or conferences, service on
industry or association committees, participation as speakers at directors'
conferences, service on special trustee task forces or subcommittees or service
as lead or liaison trustee. Independent Trustees do not receive any employee
benefits such as pension, retirement or health insurance.
The Independent Trustees also serve in the same capacity for other funds
managed by Scudder. These funds differ broadly in type and complexity and in
some cases have substantially different Trustee fee schedules. The following
table shows the aggregate compensation received by each Independent Trustee
during 1995 from the Fund and from all of Scudder funds as a group.
5
<PAGE>
<TABLE>
<CAPTION>
Short Term Bond Fund and
Zero Coupon 2000 Fund All Scudder Funds
--------------------- -----------------
<S> <C> <C>
Sheryle J. Bolton $0** $5,101 (7 funds)
Thomas J. Devine $8,600 $146,267 (17 funds)
Peter B. Freeman $8,900 $126,750 (26 funds*)
Dr. Wilson Nolen $8,200 $148,342 (16 funds)
</TABLE>
* This does not include membership on the Board of Institutional International
Equity Portfolio which commenced operations on April 3, 1996.
** Ms. Bolton became a Trustee of the Trust on January 1, 1996.
Members of the Board of Trustees who are employees of Scudder or its
affiliates receive no direct compensation from the Trust, although they are
compensated as employees of Scudder, which in turn receives an investment
advisory fee from the Fund.
Required Vote
Election of each of the listed nominees for Trustee requires the
affirmative vote of a plurality of the votes cast at the Meeting in person or by
proxy. The Board of Trustees recommends that shareholders vote in favor of each
of the nominees.
(2) RATIFICATION OR REJECTION OF THE SELECTION OF COOPERS & LYBRAND L.L.P.
AS INDEPENDENT ACCOUNTANTS
At a meeting held on June 19, 1996, all members of the Board of Trustees,
including a majority of the Non-Interested Trustees, selected Coopers & Lybrand
L.L.P. as the Funds' independent accountants for the fiscal year ending December
31, 1997 to examine the Funds' books and accounts and to certify the Funds'
financial statements. Coopers & Lybrand L.L.P. are independent accountants and
have advised the Trust that they have no direct financial interest or material
indirect financial interest in the Trust. One or more representatives of Coopers
& Lybrand L.L.P. are expected to be present at the Meeting and will have an
opportunity to make a statement if they so desire. Such representatives are
expected to be available to respond to appropriate questions posed by
shareholders or management.
The Funds' financial statements for the fiscal year ended December 31, 1995
were audited by Coopers & Lybrand L.L.P. In connection with its audit services,
Coopers & Lybrand L.L.P. reviews the financial statements included in the Funds'
semiannual and annual reports and their filings with the Securities and Exchange
Commission.
Required Vote
Ratification of the selection of independent accountants requires the
affirmative vote of a majority of the votes cast at the Meeting in person or by
proxy. The Board of Trustees recommends that shareholders ratify the selection
of Coopers & Lybrand L.L.P. as independent accountants.
6
<PAGE>
ADDITIONAL INFORMATION
Investment Adviser
Scudder is one of the most experienced investment counsel firms in the
United States. It was established in 1919 as a partnership and was restructured
as a Delaware corporation in 1985. The principal source of Scudder's income is
professional fees received from providing continuing investment advice.
Scudder's subsidiary, Scudder Investor Services, Inc., Two International Place,
Boston, MA 02110, acts as the principal underwriter for shares of registered
open-end investment companies. Scudder provides investment counsel for many
individuals and institutions, including insurance companies, endowments,
industrial corporations and financial and banking organizations.
Scudder is a Delaware corporation. Daniel Pierce* is the Chairman of the Board
of Scudder. Edmond D. Villani# is the President and Chief Executive Officer of
Scudder. Stephen R. Beckwith#, Lynn S. Birdsong#, Nicholas Bratt#, E. Michael
Brown*, Mark S. Casady*, Linda C. Coughlin*, Margaret D. Hadzima*, Jerard K.
Hartman#, Richard A. Holt@, Dudley H. Ladd*, John T. Packard+++, Kathryn L.
Quirk#, Cornelia M. Small# and Stephen A. Wohler* are the other members of the
Board of Directors of Scudder. The principal occupation of each of the above
named individuals is serving as a Managing Director of Scudder.
All of the outstanding voting and nonvoting securities of Scudder are held
of record by Stephen R. Beckwith, Juris Padegs, Daniel Pierce and Edmond D.
Villani in their capacity as the representatives (the "Representatives") of the
beneficial owners of such securities, pursuant to a Security Holders' Agreement
among Scudder, the beneficial owners of securities of Scudder and the
Representatives. Pursuant to the Security Holders' Agreement, the
Representatives have the right to reallocate shares among the beneficial owners
from time to time. Such reallocation will be at net book value in cash
transactions. All Managing Directors of Scudder own voting and nonvoting stock
and all Principals own nonvoting stock.
Other Matters
The Board of Trustees does not know of any matters to be brought before the
Meeting other than those mentioned in this Proxy Statement. The appointed
proxies will vote on any other business that comes before the Meeting or any
adjournments thereof in accordance with their best judgment.
Please complete and sign the enclosed proxy card(s) and return it in the
envelope provided so that the Meeting may be held and action may be taken, with
the greatest possible number of shares participating, on the matters described
in this Proxy Statement. This will not preclude your voting in person if you
attend the Meeting.
- - - ---------------------------
* Two International Place, Boston, Massachusetts
# 345 Park Avenue, New York, New York
+++ 101 California Street, San Francisco, California
@ Two Prudential Plaza, 180 North Stetson, Suite 5400, Chicago, Illinois
7
<PAGE>
Miscellaneous
Proxies will be solicited by mail and may be solicited in person or by
telephone or facsimile by Officers of the Trust, personnel of Scudder or an
agent of the Funds for compensation. The expenses connected with the
solicitation of proxies and with any further proxies which may be solicited will
be borne by the Funds. The Funds will reimburse banks, brokers and other persons
holding the Funds' shares registered in their names or in the names of their
nominees, for their expenses incurred in sending proxy material to and obtaining
proxies from the beneficial owners of such shares.
In the event that sufficient votes in favor of the proposals set forth in
the Notice of Special Meeting are not received by December 2, 1996, the persons
named as appointed proxies on the enclosed proxy card may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of the holders of a majority of
the shares present in person or by proxy at the session of the meeting to be
adjourned. The persons named as appointed proxies on the enclosed proxy card
will vote in favor of such adjournment those proxies which they are entitled to
vote in favor of the proposal for which further solicitation of proxies is to be
made. They will vote against any such adjournment those proxies required to be
voted against such proposal. The costs of any such additional solicitation and
of any adjourned session will be borne by the Funds.
Shareholder Proposals
Shareholders wishing to submit proposals for inclusion in a proxy statement
for any subsequent shareholders' meeting should send their written proposals to
Thomas F. McDonough, Secretary of the Trust, c/o Scudder, Stevens & Clark, Inc.,
345 Park Avenue, New York, New York 10154, within a reasonable time before the
solicitation of proxies for such shareholders' meeting. The timely submission of
a proposal does not guarantee its inclusion.
345 Park Avenue By Order of the Board of Trustees
New York, New York 10154 THOMAS F. MCDONOUGH
Secretary
October 11, 1996
8
<PAGE>
PROXY SCUDDER FUNDS TRUST PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES
Special Meeting of Shareholders--December 2, 1996
The undersigned hereby appoints Lynn S. Birdsong, Dr. Wilson Nolen and Daniel
Pierce and each of them, the proxies for the undersigned, with the power of
substitution to each of them, to vote all shares of Scudder Funds Trust
consisting of Scudder Short Term Bond Fund and Scudder Zero Coupon 2000 Fund,
which the undersigned is entitled to vote at the Special Meeting of Shareholders
of Scudder Funds Trust, to be held at the offices of Scudder, Stevens & Clark,
Inc., 25th Floor, 345 Park Avenue (at 51st Street), New York, New York 10154, on
December 2, 1996 at 3:00 p.m., eastern time, and at any adjournments thereof.
Unless otherwise specified in the squares provided, the undersigned's vote will
be cast FOR each item listed below.
<TABLE>
<CAPTION>
<S> <C> <C>
1. The election of Trustees;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) /___/ to vote for all nominees listed below /___/
Nominees: Daniel Pierce, Lynn S. Birdsong, Sheryle J. Bolton, Thomas J. Devine, Peter B.
Freeman, Dr. Wilson Nolen, and Kathryn L. Quirk.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's
name on the space provided below.)
---------------------------------------------------------------------
2. Ratification of the selection of Coopers & Lybrand L.L.P. as the Fund's FOR /---/ AGAINST /---/ ABSTAIN /---/
independent accountants.
The proxies are authorized to vote upon such other business as may properly come
before the Meeting or any adjournments thereof.
Please sign exactly as your name or names appear.
When signing as attorney, executor, administrator,
trustee or guardian, please give your full title as such.
--------------------------------------------------
(Signature of Shareholder)
--------------------------------------------------
(Signature of joint owner, if any)
Date----------------------------------------, 1996
PLEASE SIGN AND RETURN IN ENCLOSED ENVELOPE
NO POSTAGE IS REQUIRED
</TABLE>
