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:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of
the 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
KEMPER VARIABLE SERIES
(Name of Registrant as Specified in Its Charter)
(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)(4) 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 identity 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:
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KEMPER VARIABLE SERIES
Kemper-Dreman Financial Services Portfolio
222 South Riverside Plaza
Chicago, Illinois 60606
[date], 1999
Dear Shareholders:
A Special Meeting of Shareholders of Kemper-Dreman Financial Services
Portfolio (the "Portfolio"), a series of Kemper Variable Series, is to be held
at 2:30 p.m., Eastern time, on Thursday, July 29, 1999, at the offices of
Scudder Kemper Investments, Inc., 13th Floor, Two International Place, Boston,
Massachusetts 02110. A Proxy Statement regarding the meeting, 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, Portfolio shareholders will be asked to approve
a change to the Portfolio's sub-classification under the Investment Company Act
of 1940, as amended (the "1940 Act").
AFTER CAREFUL REVIEW, THE MEMBERS OF YOUR PORTFOLIO'S BOARD HAVE
APPROVED THE CHANGE TO THE PORTFOLIO'S SUBCLASSIFICATION UNDER THE 1940 ACT FROM
A DIVERSIFIED COMPANY TO A NON-DIVERSIFIED COMPANY. THE BOARD MEMBERS OF YOUR
PORTFOLIO BELIEVE THAT THE PROPOSAL SET FORTH IN THE NOTICE OF MEETING FOR YOUR
PORTFOLIO IS IMPORTANT AND RECOMMEND THAT YOU READ THE ENCLOSED MATERIALS
CAREFULLY AND THEN VOTE FOR THE PROPOSAL.
Your vote is important. PLEASE TAKE A MOMENT NOW TO SIGN AND RETURN
YOUR PROXY CARD IN THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE. If we do not
receive your executed proxy card after a reasonable amount of time, you may
receive a telephone call from our proxy solicitor, Shareholder Communications
Corporation, reminding you to vote.
Respectfully,
/s/ Mark S. Casady
Mark S. Casady
President
WE URGE YOU TO SIGN AND RETURN YOUR PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE TO ENSURE A QUORUM AT THE MEETING. YOUR VOTE IS IMPORTANT REGARDLESS OF
THE NUMBER OF SHARES YOU OWN.
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KEMPER VARIABLE SERIES
Kemper-Dreman Financial Services Portfolio
222 South Riverside Plaza
Chicago, Illinois 60606
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
________, 1999
Please take notice that a Special Meeting of Shareholders (the "Special
Meeting") of Kemper-Dreman Financial Services Portfolio (the "Portfolio"), a
series of Kemper Variable Series, will be held at the offices of Scudder Kemper
Investments, Inc., 13th Floor, Two International Place, Boston, Massachusetts
02110, on Thursday, July 29, 1999, at 2:30 p.m., Eastern time, for the following
purpose:
PROPOSAL: To approve a change to the Portfolio's sub-classification
under the Investment Company Act of 1940 from a diversified
company to a non-diversified company.
The appointed proxies will vote in their discretion on any other
business as may properly come before the Special Meeting or any adjournments
thereof.
Holders of record of shares of the Portfolio at the close of business
on June 1, 1999 are entitled to vote at the Special Meeting and at any
adjournments thereof.
In the event that the necessary quorum to transact business or the vote
required to approve the Proposal is not obtained at the Special Meeting, the
persons named as proxies may propose one or more adjournments of the Special
Meeting in accordance with applicable law, to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of the holders
of a majority of the Portfolio's shares present in person or by proxy at the
Special Meeting. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of the
Proposal and will vote against any such adjournment those proxies to be voted
against the Proposal.
By Order of the Board of Trustees,
/s/ Philip J. Collora
______________, 1999 Philip J. Collora
Secretary
IMPORTANT -- WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD 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 MAY SAVE THE
NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS TO ENSURE A QUORUM AT THE SPECIAL
MEETING. IF YOU CAN ATTEND THE SPECIAL MEETING AND WISH TO VOTE YOUR SHARES IN
PERSON AT THAT TIME, YOU WILL BE ABLE TO DO SO.
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KEMPER VARIABLE SERIES
Kemper-Dreman Financial Services Portfolio
222 South Riverside Plaza
Chicago, Illinois 60606
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Trustees (the "Board") of Kemper Variable Series (the
"Fund") for use at the Special Meeting of Shareholders of Kemper-Dreman
Financial Services Portfolio (the "Portfolio"), a series of the Fund, to be held
at the offices of Scudder Kemper Investments, Inc., 13th Floor, Two
International Place, Boston, Massachusetts 02110, on Thursday, July 29, 1999 at
2:30 p.m., Eastern time, and at any and all adjournments thereof (the "Special
Meeting").
This Proxy Statement, the Notice of Special Meeting and the proxy card
are first being mailed to shareholders on or about ______________________, 1999,
or as soon as practicable thereafter. Any shareholder giving a proxy has the
power to revoke it by mail (addressed to the Secretary at the principal
executive office of the Portfolio, c/o Scudder Kemper Investments, Inc., 222
South Riverside Plaza, Chicago, Illinois 60606) or in person at the Special
Meeting, by executing a superseding proxy or by submitting a notice of
revocation to the Portfolio. All properly executed proxies received in time for
the Special Meeting will be voted as specified in the proxy or, if no
specification is made, in favor of the Proposal referred to in the Proxy
Statement.
The Proposal requires the affirmative vote of a "majority of the
outstanding voting securities" of the Portfolio. The term "majority of the
outstanding voting securities," as defined in the 1940 Act, and as used in this
Proxy Statement, means: the affirmative vote of the lesser of (1) 67% of the
voting securities of the Portfolio present at the Special Meeting if more than
50% of the outstanding voting securities of the Portfolio are present in person
or by proxy or (2) more than 50% of the outstanding voting securities of the
Portfolio.
Abstentions will have the effect of a "no" vote on the Proposal. Broker
non-votes will have the effect of a "no" vote on the Proposal if such vote is
determined on the basis of obtaining the affirmative vote of more than 50% of
the outstanding voting securities of the Portfolio. Broker non-votes will not
constitute "yes" or "no" votes, and will be disregarded in determining the
voting securities "present," if such vote is determined on the basis of the
affirmative vote of 67% of the voting securities of the Portfolio present at the
Special Meeting with respect to the Proposal.
Shares of the Portfolio are offered only to insurance companies (each
an "Insurance Company") to fund benefits under their variable annuity contracts
and variable life insurance policies (each a "Contract"). Accordingly, as of the
Record Date (as defined below), shares of the Portfolio were held by separate
accounts, or sub-accounts thereof, of various Insurance Companies. These shares
are owned by the Insurance Companies as depositors for their respective
Contracts issued to individual contract holders or to a group (e.g., a defined
benefit plan) in which individuals participate (collectively, "Participants").
Under the terms of the Contracts, Participants have the right to instruct the
Insurance Companies on how to vote the shares related to their interests through
their Contracts (i.e., pass-through voting). An Insurance Company must vote the
shares of the Portfolio held in its name as directed. If an Insurance Company
does not receive voting instructions for all of the shares of the Portfolio held
under the Contracts, it may vote all of the shares in the relevant separate
accounts with respect to each proposal on which it is entitled to vote, for,
against or abstaining, in the same proportion as the shares of the Portfolio for
which it has received instructions (i.e., echo voting). The group Participants
of some group Contracts may have the right to direct the vote, with respect to
each proposal on which they are entitled to vote, for all shares of the
Portfolio held under the Contract, for, against or abstaining, in the same
proportions as shares for which instructions have been given under the same
Contract. This Proxy Statement is used to solicit instructions from Participants
for voting shares of the Portfolio as well as for soliciting proxies from the
Insurance Companies, the actual shareholders of the Portfolio. All persons
entitled to direct the voting of shares, whether or not they are shareholders,
will be described as voting for purposes of this Proxy Statement.
The presence at any shareholders' meeting, in person or by proxy, of
the holders of 30% of the shares of the Portfolio entitled to be cast shall be
necessary and sufficient to constitute a quorum for the transaction of business.
In the event that the necessary quorum to transact business or the vote required
to approve the Proposal is not obtained at the Special Meeting, the persons
named as proxies may propose one or more adjournments of the Special Meeting in
accordance with applicable law to permit further solicitation of proxies with
respect to the Proposal. Any such adjournment will require the affirmative vote
of the holders of a majority of the Portfolio's shares present in person or by
proxy at the Special Meeting.
The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of the Proposal and will
vote against any such adjournment those proxies to be voted against the
Proposal. For purposes of determining the presence of a quorum for transacting
business at the Special 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 Portfolio 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.
The Board has fixed the close of business on June 1, 1999 as the record
date for the determination of shareholders entitled to notice of and to vote at
the Special Meeting. Shareholders are entitled to one vote for each share held.
As of June 1, 1999, there were [number] shares of the Portfolio outstanding.
PROPOSAL: APPROVAL OF A CHANGE TO THE PORTFOLIO'S SUB-CLASSIFICATION UNDER THE
INVESTMENT COMPANY ACT OF 1940 FROM A DIVERSIFIED COMPANY TO A NON-DIVERSIFIED
COMPANY
The Board has adopted, subject to shareholder approval, the
recommendation of Scudder Kemper Investments, Inc. ("Scudder Kemper"), the
Portfolio's investment manager, and Dreman Value Management, L.L.C. ("Dreman"),
the Portfolio's sub-adviser, that the Portfolio's sub-classification be changed
from "diversified" to "non-diversified." The Portfolio is currently
sub-classified as a "diversified company" under Section 5(b) of the Investment
Company Act of 1940, as amended (the "1940 Act"). As a "diversified company,"
the Portfolio must have at least 75% of the value of its total assets in cash
and cash items (including receivables), Government securities, securities of
other investment companies, and other securities (the "75% basket"). For
purposes of the 75% basket, the Portfolio may not count securities of a single
issuer that account for more than 5% of the Portfolio's total assets or that
constitute more than 10% of such issuer's outstanding voting securities.
For example, if the Portfolio's holdings include a security which
constitutes 6% of the Portfolio's total assets, that position would be excluded
from the 75% basket. In addition, if shares of a security held by the Portfolio
constitute more than 10% of an issuer's outstanding voting securities, that
position would likewise be excluded from the 75% basket. This restriction is
designed to prevent funds that hold themselves out as diversified from being
tied too closely to the success of one or a few issuers. In addition, the
restriction is designed to prevent such funds from controlling companies in
which they invest.
The Board recommends that the shareholders approve the Proposal to
change the Portfolio's sub-classification under Section 5(b) from "diversified"
to "non-diversified." If the shareholders approve the proposal, the Portfolio
will no longer be required to comply with the diversification standards outlined
above. The Portfolio intends to continue to comply with the diversification and
other requirements of the Internal Revenue Code of 1986, as amended (the
"Code"), applicable to regulated investment companies so that the Portfolio will
not be subject to U.S. federal income taxes on its net investment income. In
this regard, the applicable diversification requirements imposed by the Code
provide that the Portfolio must diversify its holdings so that at the end of
each quarter of the taxable year (i) at least 50% of the market value of the
Portfolio's assets is represented by cash and cash items, U.S. government
securities, the securities of other regulated investment companies and other
securities, with such other securities of any one issuer limited for purposes of
this calculation to an amount not greater than 5% of the value of the
Portfolio's total assets and 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its total assets is invested
in the securities of any one issuer (other than U.S. government securities or
the securities of other regulated investment companies).
Although the Portfolio will be subject to the diversification standards
imposed by the Code, a change in the Portfolio's sub-classification to a
non-diversified investment company will permit the Portfolio to concentrate its
investments in fewer issuers than is now the case. Scudder Kemper and Dreman
have advised the Board that changing to non-diversified status will benefit
shareholders with the potential for improved performance. Scudder Kemper and
Dreman believe that there are a number of financial services companies that
present opportunities for growth and, as a non-diversified fund, the Portfolio
will have the flexibility to make greater use of concentration in the best ideas
of Dreman.
The Portfolio primarily invests in stocks and other equity securities
of companies in the financial services sector believed by Dreman to be
undervalued. Although the financial services sector is one of the largest and
most diverse of the sector groups as classified by Standard & Poors, Inc. (the
"S&P Finance Sector" or the "Index"), the industry has recently consolidated as
a result of a number of large-scale mergers and acquisitions involving financial
services firms. As of April 23, 1999, the three largest companies in the S&P
Finance Sector accounted for more than 25% of the Index, while the ten largest
companies in the S&P Finance Sector accounted for more than 50% of the Index.
Under these circumstances, the Portfolio may be unable to match or overweight
its investments in certain securities in the S&P Finance Sector because of the
Portfolio's subclassification as a diversified company. If the S&P Finance
Sector continues to consolidate, the Portfolio may have more difficulty
maintaining performance results similar to the Index as a diversified company
than as a non-diversified company.
While greater concentration may prove beneficial when the companies
that the Portfolio invests in outperform the market, greater concentration in
fewer issuers will also magnify any negative performance by such portfolio
companies. In general, the Portfolio's net asset value may become more volatile.
However, the Scudder Kemper and Dreman believe these additional risks are
outweighed by the potential for improved performance.
THE BOARD MEMBERS OF THE FUND RECOMMEND THAT THE SHAREHOLDERS OF THE PORTFOLIO
VOTE IN FAVOR OF THIS PROPOSAL.
<PAGE>
ADDITIONAL INFORMATION
INVESTMENT MANAGER, SUB-ADVISER AND PRINCIPAL UNDERWRITER AND ADMINISTRATOR
The Portfolio's investment manager is Scudder Kemper Investments, Inc.,
345 Park Avenue, New York, New York 10154. The Portfolio's sub-adviser is Dreman
Value Management, L.L.C., 10 Exchange Place, Jersey City, New Jersey 07701. The
Portfolio's principal underwriter and administrator is Kemper Distributors,
Inc., 222 South Riverside Plaza, Chicago, Illinois 60606.
PROXY SOLICITATION
The cost of preparing, printing and mailing the enclosed proxy card and
Proxy Statement and all other costs incurred in connection with the solicitation
of proxies, including any additional solicitation made by letter, telephone or
telegraph, will be paid by the Portfolio. In addition to solicitation by mail,
certain officers and representatives of the Fund, officers and employees of
Scudder Kemper and certain financial services firms and their representatives,
who will receive no extra compensation for their services, may solicit proxies
by telephone, telegram or personally.
Shareholder Communications Corporation ("SCC") has been engaged to
assist in the solicitation of proxies at a total estimated cost of $3,500 (plus
expenses). As the Special Meeting date approaches, certain shareholders of the
Portfolio may receive a telephone call from a representative of SCC if their
votes have not yet been received. Authorization to permit SCC to execute proxies
may be obtained by telephonic or electronically transmitted instructions from
shareholders of the Portfolio. Proxies that are obtained telephonically will be
recorded in accordance with the procedures set forth below. The Board believes
that these procedures are reasonably designed to ensure that the identity of the
shareholder casting the vote is accurately determined and that the voting
instructions of the shareholder are accurately determined.
In all cases where a telephonic proxy is solicited, the SCC
representative is required to ask for each shareholder's full name, address,
social security or employer identification number, title (if the shareholder is
authorized to act on behalf of an entity, such as a corporation), and the number
of shares owned, and to confirm that the shareholder has received the proxy
materials in the mail. If the information solicited agrees with the information
provided to SCC, then the SCC representative has the responsibility to explain
the process, read the Proposal on the proxy card, and ask for the shareholder's
instructions on the Proposal. The SCC representative, although he or she is
permitted to answer questions about the process, is not permitted to recommend
to the shareholder how to vote, other than to read any recommendation set forth
in the Proxy Statement. SCC will record the shareholder's instructions on the
card. Within 72 hours, the shareholder will be sent a letter or mailgram to
confirm his or her vote and asking the shareholder to call SCC immediately if
his or her instructions are not correctly reflected in the confirmation.
If a shareholder wishes to participate in the Special Meeting, but does
not wish to give a proxy by telephone, the shareholder may still submit the
proxy card originally sent with the Proxy Statement or attend in person. Should
shareholders require additional information regarding the proxy or replacement
proxy cards, they may call the telephone number printed on the stub of their
proxy card (or, for contract holders, their voting instruction card). Any proxy
given by a shareholder, whether in writing or by telephone, is revocable until
voted at the Special Meeting.
REPORTS
The Portfolio provides periodic reports to all of its 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 the Portfolio, without charge, by calling 1-800-621-1048 or
writing the Portfolio, c/o Scudder Kemper Investments, Inc., 222 South Riverside
Plaza, Chicago, Illinois 60606.
SECURITY OWNERSHIP
Appendix 1 sets forth the beneficial owners of at least 5% of the
Portfolio's shares as of April 3, 1999. To the best of the Fund's knowledge,
as of April 30, 1999, no person owned beneficially more than 5% of the
Portfolio's outstanding shares, except as stated in Appendix 1.
[Appendix 2 sets forth the number of shares of the Portfolio owned
directly or beneficially by the Trustees of the Portfolio.] [Scudder Kemper to
complete Appendix 2.]
PROPOSALS OF SHAREHOLDERS
Meetings of shareholders of the Portfolio are not held on an annual or
other regular basis. Shareholders wishing to submit proposals for inclusion in a
proxy statement for a shareholder meeting subsequent to the Special Meeting, if
any, should send their written proposals to the Secretary of the Fund, c/o
Scudder Kemper Investments, Inc., Two International Place, Boston, Massachusetts
02110, within a reasonable time before the solicitation of proxies for such
meeting. The timely submission of a proposal does not guarantee its inclusion.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
No Board member is aware of any matters that will be presented for
action at the Special Meeting other than the matter set forth herein. Should any
other matters requiring a vote of shareholders arise, the proxy in the
accompanying form will confer upon the person or persons entitled to vote the
shares represented by such proxy the discretionary authority to vote the shares
as to any such other matters in accordance with their best judgment in the
interest of the Fund and/or the Portfolio.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
By order of the Board of Trustees,
/s/ Philip J. Collora
Philip J. Collora
Secretary
<PAGE>
APPENDIX 1
BENEFICIAL OWNERS OF AT LEAST 5% OF THE PORTFOLIO'S SHARES
As of April 30, 1999, [number] shares in the aggregate, or __._% of the
outstanding shares of the Portfolio were held in the name of [name], [address],
who may be deemed to be the beneficial owner of certain of these shares, but
disclaims any beneficial ownership therein. [Scudder Kemper to complete.]
<PAGE>
APPENDIX 2
PORTFOLIO SHARES OWNED BY TRUSTEES
[Name of Trustee] [Number of shares owned] [Percentage]
As of [ ], the Trustees and officers of the Fund as a group owned beneficially [
] shares of the Portfolio, [which is less than 1% of the total outstanding
shares of the Portfolio]. [Scudder Kemper to provide the above information for
the Trustees individually and as a group.]
<PAGE>
FORM OF PROXY
KEMPER-DREMAN FINANCIAL SERVICES PORTFOLIO
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
Special Meeting of Shareholders - July 29, 1999
The undersigned hereby appoints Kathryn L. Quirk, Philip S. Collora,
Maureen E. Kane and Caroline Pearson, and each of them, the proxies of the
undersigned, with the power of substitution to each of them, to vote all shares
of the Portfolio which the undersigned is entitled to vote at the Special
Meeting of Shareholders of the Portfolio to be held at the offices of Scudder
Kemper Investments, Inc., Two International Place, Boston, Massachusetts 02110,
on Thursday, July 29, 1999 at 2:30 p.m., Eastern time, and at any adjournments
thereof.
Dated _____________________________, 1999
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(s)
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE PROXY CARD BELOW. SIGN, DATE AND
RETURN IT IN THE ENVELOPE PROVIDED. TO SAVE THE COST OF ADDITIONAL
SOLICITATIONS, PLEASE MAIL YOUR PROXY PROMPTLY.
Unless otherwise specified in the squares provided, your vote will be cast FOR
each numbered item listed below. The Board members of your Portfolio unanimously
recommend that you vote FOR each item.
Proposal: To approve the change to the Portfolio's sub-classification
under the Investment Company Act of 1940 from a diversified company to a
non-diversified company.
FOR AGAINST ABSTAIN
_____ _____ _____
The proxies are authorized to vote in their discretion on any other business
which may properly come before the meeting and any adjournments thereof.
Please Vote Promptly!
Your vote is needed! Please vote on the reverse side of this form and sign in
the space provided below. Return your completed proxy in the enclosed envelope
today.
You may receive additional proxies for your other accounts. These are not
duplicates; you should sign and return each proxy card in order for your votes
to be counted. Please return them as soon as possible to help save the cost of
additional mailings.
