<PAGE>
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/Declaration of Trust)
(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 identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
PRELIMINARY COPIES
KEMPER VARIABLE SERIES
----------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Please take notice that a Special Meeting of Shareholders (the
"Meeting") of each portfolio that is listed on Appendix 1 to the Proxy Statement
(each such portfolio is referred to herein as a "Fund" and, collectively, the
"Funds") of Kemper Variable Series (the "Trust"), will be held at the offices of
Zurich Scudder Investments, Inc., 13th Floor, Two International Place, Boston,
MA 02110-4103, on March 14, 2001, at 3:30 p.m., Eastern time, for the following
purposes:
PROPOSAL 1: To elect Trustees of the Trust.
PROPOSAL 2: To ratify the selection of Ernst & Young LLP as
the independent auditors for each Fund for the Fund's
current fiscal year.
PROPOSAL 3: For shareholders of Kemper Money Market Portfolio,
to approve or disapprove an amendment to the Fund's
concentration policy.
The persons named as proxies will vote in their discretion on any other
business that may properly come before the Meeting or any adjournments or
postponements thereof.
Holders of record of shares of the Funds at the close of business on
January 26, 2001 are entitled to vote at the Meeting and at any adjournments or
postponements thereof.
In the event that the necessary quorum to transact business or the vote
required to approve any Proposal is not obtained at the Meeting, the persons
named as proxies may propose one or more adjournments of the Meeting in
accordance with applicable law to permit further solicitation of proxies with
respect to that Proposal. Any such adjournment as to a matter will require the
affirmative vote of the holders of a majority of the Trust's (for a trust-wide
vote) or the concerned Fund's (for a fund-wide vote) shares present in person or
by proxy at the Meeting. The persons named as proxies will vote FOR any such
adjournment those proxies which they are entitled to vote in favor of that
Proposal and will vote AGAINST any such adjournment those proxies to be voted
against that Proposal.
By Order of the Board,
/s/ Maureen E. Kane
Maureen E. Kane
Secretary
January 29, 2001
IMPORTANT -- WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD(S) OR VOTING
INSTRUCTION FORM(S) AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO
POSTAGE. YOUR PROMPT RETURN OF THE ENCLOSED PROXY CARD(S) OR VOTING INSTRUCTION
FORM(S) MAY SAVE THE NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS. IF YOU WISH
TO ATTEND THE MEETING AND VOTE YOUR SHARES IN PERSON AT THAT TIME, YOU WILL
STILL BE ABLE TO DO SO.
<PAGE>
KEMPER VARIABLE SERIES
222 South Riverside Plaza
Chicago, Illinois 60606
PROXY STATEMENT
GENERAL
This Proxy Statement is being furnished to shareholders of each
portfolio that is listed on Appendix 1 to this Proxy Statement (each such
portfolio is referred to herein as a "Fund" and, collectively, the "Funds") of
Kemper Variable Series (the "Trust") in connection with three proposals.
Proposal 1 describes the election of Trustees, Proposal 2 proposes the
ratification of the selection of the Funds' independent auditors and Proposal 3
proposes the amendment of the concentration policy of Kemper Money Market
Portfolio ("Money Market Portfolio"). In the descriptions of the Proposals
below, the word "fund" is sometimes used to mean an investment company or series
thereof in general, and not the Funds whose proxy statement this is.
The Board of Trustees (the "Board," the Trustees on which are referred
to as the "Trustees") that oversees the Funds is soliciting proxies on behalf of
the Trust from shareholders of the Funds for the Special Meeting of Shareholders
to be held on March 14, 2001, at the offices of Zurich Scudder Investments, Inc.
("ZSI" or the "Investment Manager"), 13th Floor, Two International Place,
Boston, MA 02110-4103, at 3:30 p.m. (Eastern time), and at any and all
adjournments or postponements thereof (the "Meeting"). Each Fund is available
exclusively as a funding vehicle for variable life insurance policies ("VLI
contracts") and variable annuity contracts ("VA contracts") offered by the
separate accounts, or subaccounts thereof, of certain life insurance companies
("Participating Insurance Companies"). Individual VLI and VA contract owners are
not the "shareholders" of the Funds. Rather, the Participating Insurance
Companies and their separate accounts are the shareholders. To the extent
required to be consistent with interpretations of voting requirements by the
staff of the Securities and Exchange Commission ("SEC"), each Participating
Insurance Company will offer to contract owners the opportunity to instruct it
as to how it should vote shares held by it and the separate accounts on the
items to be considered at the Meeting. This Proxy Statement is, therefore,
furnished to contract owners entitled to give voting instructions with regard to
the Funds. This Proxy Statement, the Notice of Special Meeting and the proxy
cards and voting instruction forms are first being mailed to shareholders and
contract owners on or about January 29, 2001 or as soon as practicable
thereafter.
THE FUNDS PROVIDE PERIODIC REPORTS TO THEIR 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 A FUND AND A COPY OF ANY MORE RECENT SEMI-ANNUAL REPORT, WITHOUT
CHARGE, BY CALLING (800) 778-1482 OR WRITING THE FUND, C/O ZURICH SCUDDER
INVESTMENTS, INC., AT THE ADDRESS FOR THE TRUST SHOWN AT THE BEGINNING OF THIS
PROXY STATEMENT.
Holders of record of shares of each Fund at the close of business on
January 26, 2001 (the "Record Date") will be entitled to one vote per share on
all business of the Meeting, as to any matter on which they are entitled to
vote. The table provided in Appendix 2 hereto sets forth the number of
outstanding shares of each series of the Trust as of December 31, 2000.
The following table identifies the Funds entitled to vote on each
Proposal.
MONEY MARKET ALL OTHER FUNDS
PROPOSAL PORTFOLIO
1. To elect Trustees of the Trust. |X| |X|
2. To ratify the selection of Ernst & Young LLP |X| |X|
as the independent auditors for each Fund
for the Fund's current fiscal year.
3. To amend the concentration policy of Money |X|
Market Portfolio.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3.
PROPOSAL 1: ELECTION OF TRUSTEES
At the Meeting, shareholders will be asked to elect eleven individuals
to constitute the Board of Trustees of the Trust. The election of new Board
members arises out of a restructuring program proposed by ZSI, the investment
manager of the Trust. The restructuring program is designed to respond to
changing industry conditions and investor needs. ZSI seeks to consolidate its
fund line-up and offer all of the open-end funds it advises under the "Scudder"
name. As part of the restructuring program, certain funds advised by ZSI that
have similar investment policies and characteristics are proposed to be
combined. ZSI believes that the combination of its open-end, directly
distributed funds (the "Scudder Funds") with the funds in the Kemper Family of
Funds (the "Kemper Funds") will permit it to streamline its administrative
infrastructure and focus its distribution efforts. In connection with that
initiative, the Independent Trustees (as defined below) of the two separate
boards of the Kemper Funds proposed to consolidate into a single board. The
eleven individuals who have been nominated for election as Trustees of the Trust
were nominated after careful consideration by the present Board of Trustees. The
nominees are listed below. Four of the nominees are currently Trustees of the
Trust and six of the other nominees are currently trustees or directors of other
Kemper Funds. One of the nominees, although not currently a trustee or director
of any Kemper Fund, is a senior executive of ZSI. These eleven nominees are also
being nominated for election as trustees or directors of most of the other
Kemper Funds. The proposed slate of nominees reflects an effort to consolidate
the two separate boards who have historically supervised different Kemper Funds.
The proposed consolidation is expected to provide administrative efficiencies to
both the Funds and ZSI.
The persons named as proxies on the enclosed proxy card(s) will vote
for the election of the nominees named below unless authority to vote for any or
all of the nominees is withheld in the proxy. Each Trustee so elected will serve
as a Trustee commencing on July 1, 2001 and until the next meeting of
shareholders, if any, called for the purpose of electing Trustees and until the
election and qualification of a successor or until such Trustee sooner dies,
resigns or is removed as provided in the Trust's governing documents. Each of
the nominees has indicated that he or she is willing to serve as a Trustee. If
any or all of the nominees should become unavailable for election due to events
not now known or anticipated, the persons named as proxies will vote for such
other nominee or nominees as the current Trustees may recommend. The following
tables present information about the nominees and the Trustees standing for
re-election as well as those not standing for re-election. Each nominee's or
Trustee's date of birth is in parentheses after his or her name. Unless
otherwise noted, (i) each of the nominees and Trustees has engaged in the
principal occupation(s) noted in the following tables for at least the most
recent five years, although not necessarily in the same capacity, and (ii) the
address of each nominee is c/o Zurich Scudder Investments, Inc., 222 South
Riverside Plaza, Chicago, Illinois 60606.
NOMINEES FOR ELECTION AS TRUSTEES:
NAME (DATE OF BIRTH), PRINCIPAL YEAR FIRST BECAME
OCCUPATION AND AFFILIATIONS A BOARD MEMBER
JOHN W. BALLANTINE (2/16/46),(1) Nominee
Retired; formerly, First Chicago NBD
Corporation/The First National Bank of
Chicago: 1996-1998, Executive Vice
President and Chief Risk Management
Officer; 1995-1996, Executive Vice
President and Head of International
Banking; Director, First Oak Brook
Bancshares, Inc.; Director, Tokheim
Corporation.
LEWIS A. BURNHAM (1/8/33),(1) Retired; Nominee
formerly, Partner, Business Resources
Group; formerly, Executive Vice
President, Anchor Glass Container
Corporation.
LINDA C. COUGHLIN (1/1/52),*(2) Managing 2001
Director, ZSI
DONALD L. DUNAWAY (3/8/37),(1) Retired; Nominee
formerly, Executive Vice President, A.O.
Smith Corporation (diversified
manufacturer).
JAMES R. EDGAR (7/22/46),(3) Director, 1999
John B. Sanfilippo & Son, Inc.;
Director, Horizon Group Properties,
Inc.; Distinguished Fellow, University
of Illinois Institute of Government and
Public Affairs; Director, Kemper
Insurance Companies (not affiliated with
the Kemper Funds); formerly, Governor,
State of Illinois.
WILLIAM F. GLAVIN (8/30/58),* Managing Nominee
Director, ZSI.
ROBERT B. HOFFMAN (12/11/36),(1) Nominee
Retired; formerly, Chairman,
Harnischfeger Industries, Inc.
(machinery for the mining and paper
industries); formerly, Vice Chairman and
Chief Financial Officer, Monsanto
Company (agricultural, pharmaceutical
and nutritional/food products);
formerly, Vice President, Head of
International Operations, FMC
Corporation (manufacturer of machinery
and chemicals); Director, Harnischfeger
Industries, Inc.
SHIRLEY D. PETERSON (9/3/41),(1) Nominee
Retired; formerly, President, Hood
College; formerly, Partner, Steptoe &
Johnson (attorneys); prior thereto,
Commissioner, Internal Revenue Service;
prior thereto, Assistant Attorney
General (Tax), U.S. Department of
Justice; Director, Bethlehem Steel Corp.
FRED B. RENWICK (2/1/30),(3) Professor 1995
of Finance, New York University, Stern
School of Business; Director, the
Wartburg Foundation; Chairman, Finance
Committee of Morehouse College Board of
Trustees; Director, American Bible
Society Investment Committee; previously
member of the Investment Committee of
Atlanta University Board of Trustees;
formerly, Director of Board of Pensions
Evangelical Lutheran Church in America.
WILLIAM P. SOMMERS (7/22/33),(1) Nominee
Retired; formerly, President and Chief
Executive Officer, SRI International
(research and development); Consultant
and Director, SRI/Atomic Tangerine;
prior thereto, Executive Vice President,
Iameter (medical information and
educational service provider); prior
thereto, Senior Vice President and
Director, Booz, Allen & Hamilton Inc.
(management consulting firm); Director,
PSI Inc., Evergreen Solar, Inc. and
Litton Industries; Advisor, Guckenheimer
Enterprises.
JOHN G. WEITHERS (8/8/33),(3) Retired; 1993
formerly, Chairman of the Board and
Chief Executive Officer, Chicago Stock
Exchange; Director, Federal Life
Insurance Company; President of the
Members of the Corporation and Trustee,
DePaul University.
* Interested person of the Trust, as defined in the Investment Company Act of
1940, as amended (the "1940 Act").
(1) Messrs. Ballantine, Burnham, Dunaway, Hoffman, Sommers and Ms. Peterson
serve as board members of 26 investment companies, with 45 portfolios
managed by ZSI.
(2) Ms. Coughlin serves as a board member of 56 investment companies with 137
portfolios managed by ZSI.
(3) Messrs. Edgar, Renwick and Weithers serve as board members of 16 investment
companies with 58 portfolios managed by ZSI.
TRUSTEES NOT STANDING FOR RE-ELECTION:
PRESENT OFFICE WITH THE TRUST;
PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME (DATE OF BIRTH) AND DIRECTORSHIPS
JAMES E. AKINS (10/15/26) Trustee; Consultant on International,
Political and Economic Affairs;
formerly, a career U.S. Foreign Service
Officer, Energy Adviser for the White
House and U.S. Ambassador to Saudi
ARTHUR GOTTSCHALK (2/13/25) Arabia, 1973-1976.
Trustee; Retired; formerly, President,
Illinois Manufacturers Association;
Trustee, Illinois Masonic Medical
Center; formerly, Illinois State
FREDERICK T. KELSEY (4/25/27) Senator; formerly, Vice President, The
Reuben H. Donnelley Corp.; formerly,
attorney.
Trustee; Retired; formerly, Consultant
to Goldman, Sachs & Co.; formerly,
President, Treasurer and Trustee of
Institutional Liquid Assets and its
affiliated mutual funds; formerly,
President and Trustee, Northern
Institutional Funds; formerly, President
and Trustee, Pilot Funds.
RESPONSIBILITIES OF THE BOARD OF TRUSTEES -- BOARD AND COMMITTEE MEETINGS
The primary responsibility of the Board is to represent the interests
of the shareholders of the Funds and to provide oversight of the management of
the Funds. The board that is proposed for election at this Meeting is comprised
of two individuals who are considered "interested" Trustees, and nine
individuals who have no affiliation with ZSI and who are not considered
"interested" Trustees (the "Independent Trustees"). The SEC has recently adopted
rules that require a majority of the board members of a fund to be "independent"
if the fund takes advantage of certain exemptive rules under the 1940 Act. If
the proposed Board of Trustees is approved by shareholders, more than 75% will
be Independent Trustees. Each of the nominees that will be considered
Independent Trustees if elected has been selected and nominated solely by the
current Independent Trustees of the Trust.
The Trustees meet multiple times during the year to review the
investment performance of the Funds and other operational matters, including
policies and procedures designed to assure compliance with regulatory and other
requirements. Furthermore, the Independent Trustees review the fees paid to the
Investment Manager and its affiliates for investment advisory services and other
administrative and shareholder services. The Trustees have adopted specific
policies and guidelines that, among other things, seek to further enhance the
effectiveness of the Independent Trustees in performing their duties. Many of
these are similar to those suggested in the Investment Company Institute's 1999
Report of the Advisory Group on Best Practices for Fund Directors (the "Advisory
Group Report"). For example, the Independent Trustees select independent legal
counsel to work with them in reviewing fees, advisory and other contracts and
overseeing fund matters, and regularly meet privately with their counsel.
Currently, the Board of Trustees has an Audit and Governance Committee,
the responsibilities of which are described below. In addition, the Board has a
Valuation Committee. During calendar year 2000, the Board of Trustees met ten
times. Each then current Trustee attended 75% or more of the respective meetings
of the Board and the committees (if a member thereof) held during calendar year
2000.
AUDIT AND GOVERNANCE COMMITTEE
The Audit and Governance Committee makes recommendations regarding the
selection of independent auditors for the Funds, confers with the independent
auditors regarding the Funds' financial statements, the results of audits and
related matters, and performs such other tasks as the full Board of Trustees
deems necessary or appropriate. As suggested by the Advisory Group Report, the
Audit and Governance Committee is comprised of only Independent Trustees,
receives annual representations from the auditors as to their independence, and
has a written charter that delineates the Committee's duties and powers. In
addition, the committee seeks and reviews candidates for consideration as
nominees for membership on the Board and oversees the administration of the
Trust's Governance Procedures and Guidelines. Shareholders wishing to submit the
name of a candidate for consideration by the committee should submit their
recommendation(s) to the Secretary of the Trust. Currently, the members of the
Audit and Governance Committee are Messrs. Akins, Edgar, Gottschalk, Kelsey,
Renwick and Weithers. The Committee held four meetings during calendar year
2000.
OFFICERS
The following persons are officers of the Trust:
PRESENT OFFICE WITH THE TRUST; YEAR FIRST
PRINCIPAL OCCUPATION OR BECAME AN
NAME (DATE OF BIRTH) EMPLOYMENT OFFICER(1)
Mark S. Casady (9/21/60) President; Managing Director, ZSI; 1998
formerly, Institutional Sales
Manager of an unaffiliated mutual fund
distributor.
Linda C. Coughlin (1/1/52) Vice President, Trustee and 2001
Chairman; Managing Director, ZSI.
Philip J. Collora (11/15/45) Vice President and Assistant 1992
Secretary; Attorney, Senior Vice
President, ZSI.
Kathryn L. Quirk (12/3/52) Vice President; Managing Director, 1998
ZSI.
Linda J. Wondrack (9/12/64) Vice President; Senior Vice 1998
President, ZSI.
John R. Hebble (6/27/58) Treasurer; Senior Vice President, 1998
ZSI.
Brenda Lyons (2/21/63) Assistant Treasurer; Senior Vice 1998
President, ZSI.
Caroline Pearson (4/1/62) Assistant Secretary; Senior Vice 1998
President, ZSI; formerly, Associate,
Dechert Price & Rhoads (law firm)
from 1989-1997.
Maureen E. Kane (2/14/62) Secretary; Vice President, ZSI; 1998
formerly, Assistant Vice President
of an unaffiliated investment
management firm; prior thereto,
Associate Staff Attorney of an
unaffiliated investment management
firm, and Associate, Peabody &
Arnold (law firm).
J. Patrick Beimford (5/25/50) Vice President; Managing Director, 2001
ZSI.
Jesus A. Cabrera (12/25/61) Vice President; Managing Director, 2000
ZSI.
Robert S. Cessine (1/5/50) Vice President; Managing Director, 1996
ZSI.
Irene T. Cheng (6/6/54) Vice President; Managing Director, 2000
ZSI.
James M. Eysenbach (4/1/62) Vice President; Managing Director, 1999
ZSI.
Jan C. Faller (8/8/66) Vice President; Vice President, ZSI. 2000
Carol L. Franklin (12/3/52) Vice President; Managing Director, 2001
ZSI.
Donald E. Hall (8/22/52) Vice President; Managing Director, 2000
ZSI.
Sewall Hodges (1/9/55) Vice President; Managing Director, 2000
ZSI.
William E. Holzer (7/27/49) Vice President; Managing Director, 2001
ZSI.
Robert L. Horton (9/14/66) Vice President; Vice President, ZSI. 2001
Gary A. Langbaum (12/16/48) Vice President; Managing Director, 1995
ZSI.
Valerie F. Malter (7/25/58) Vice President; Managing Director, 2000
ZSI.
Tracy McCormick (9/27/54) Vice President; Managing Director, 1999
ZSI.
Frank J. Rachwalski, Jr. Vice President; Managing Director, 1995
(3/26/45) ZSI.
Harry E. Resis, Jr. Vice President; Managing Director, 1995
(11/24/45) ZSI.
Thomas F. Sassi (11/7/42) Vice President; Managing Director, 1998
ZSI, formerly, consultant with an
unaffiliated investment consulting
firm and an officer of an
unaffiliated investment banking firm
from 1993 to 1996.
William F. Truscott (9/14/60) Vice President; Managing Director, 2000
ZSI.
Robert D. Tymoczko (2/3/70) Vice President; Senior Vice 2000
President, ZSI.
Richard L. Vandenberg Vice President; Managing Director, ZSI, 1997
formerly, senior vice president and
portfolio manager with an unaffiliated
investment management firm.
(1) The President, Treasurer and Secretary each holds office until the first
meeting of Trustees in each calendar year and until his or her successor
has been duly elected and qualified, and all other officers hold offices as
the Trustees permit in accordance with the By-laws of the Trust.
COMPENSATION OF TRUSTEES AND OFFICERS
The Trust pays the Independent Trustees an annual retainer (paid in
quarterly installments) and an attendance fee, plus expenses, for each Board
meeting and committee meeting attended. As reflected below, the Trustees
currently serve as board members of various other Kemper Funds. ZSI supervises
the Funds' investments, pays the compensation and expenses of its personnel who
serve as Trustees and officers on behalf of the Trust and receives a management
fee for its services. Several of the officers and Trustees are also officers,
directors, employees or stockholders of ZSI and participate in the fees paid to
that firm, although the Trust makes no direct payments to them.
To facilitate the restructuring of the boards of the Kemper Funds,
certain Independent Trustees agreed not to stand for re-election. Independent
Trustees of the Trust are not entitled to benefits under any pension or
retirement plan. However, the board of each Kemper Fund determined that,
particularly given the benefits that would accrue to the Kemper Funds from the
restructuring of the boards, it was appropriate to provide the four Independent
Trustees who were not standing for re-election for various Kemper Funds a
one-time benefit. The cost of such benefit is being allocated among all the
Kemper Funds, with ZSI agreeing to bear one-half of the cost of such benefit,
given that ZSI also benefits from administrative efficiencies of a consolidated
board. Messrs. Akins, Gottschalk and Kelsey, Independent Trustees of the Trust
who are not standing for re-election, will each receive a one-time benefit. The
amount received by a trustee on behalf of each fund for which he serves as
trustee ranges from $478 to $6,124 for Mr. Akins; $159 to $2,035 for Mr.
Gottschalk; and $797 to $10,194 for Mr. Kelsey.
The following Compensation Table provides in tabular form the following
data:
COLUMN (1) All Trustees who receive compensation from the Trust.
COLUMN (2) Aggregate compensation received by each Trustee from the
Trust during calendar year 2000.
COLUMN (3) Total compensation received by each Trustee from funds
advised by ZSI (collectively, the "Fund Complex") during calendar year 2000.
COMPENSATION TABLE
Aggregate Compensation Total Compensation From
Name of Trustee From Trust Fund Complex(2)(3)
$ [ ]
James E. Akins $ [ ] (26 funds)
$ [ ] (26 funds) $ [ ]
James R. Edgar
Arthur R. Gottschalk(1) $ [ ] (26 funds) $ [ ]
Frederick T. Kelsey $ [ ] (26 funds) $ [ ]
Fred B. Renwick $ [ ] (26 funds) $ [ ]
John G. Weithers $ [ ] (26 funds) $ [ ]
(1) Includes deferred fees. Pursuant to deferred compensation agreements with
the Trust, deferred amounts accrue interest monthly at a rate approximate
to the yield of Zurich Money Funds - Zurich Money Market Fund. Total
deferred fees (including interest thereon) payable from the Trust to Mr.
Gottschalk are $[ ].
(2) Includes compensation for service on the boards of [ ] Kemper
trusts/corporations comprised of [ ] funds. Each trustee currently serves
on the boards of [ ] Kemper trusts/corporations comprised of [ ] funds.
(3) Aggregate compensation reflects amounts paid to the Trustees for special
meetings in connection with the ZSI restructuring initiative. Such amounts
totaled $[ ], $[ ], $[ ], $[ ], $[ ] and $[ ] for Messrs. Akins, Edgar,
Gottschalk, Kelsey, Renwick and Weithers, respectively.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT THE SHAREHOLDERS OF EACH FUND VOTE FOR EACH NOMINEE.
PROPOSAL 2: RATIFICATION OR REJECTION OF THE SELECTION OF INDEPENDENT AUDITORS
The Board, including all of the Independent Trustees, has selected
Ernst & Young LLP to act as independent auditors of each Fund for the Fund's
current fiscal year and recommends that shareholders ratify such selection. One
or more representatives of Ernst & Young LLP 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 BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS OF EACH FUND VOTE IN FAVOR OF THIS PROPOSAL 2.
PROPOSAL 3: AMENDMENT TO CONCENTRATION POLICY
(MONEY MARKET PORTFOLIO ONLY)
The Board of Trustees has approved, and recommends that shareholders of
Money Market Portfolio approve, an amendment to the Money Market Portfolio's
concentration policy.
Money Market Portfolio currently has a fundamental policy not to
concentrate its investments in a particular industry, except that the Fund will
invest more than 25% of its assets in instruments issued by banks. This
exception requires Money Market Portfolio to concentrate (i.e., invest more than
25% of the Fund's assets) in instruments issued by banks. Money Market Portfolio
does not have the freedom to concentrate (i.e., concentrate when deemed
advisable by the Fund's investment manager).
Under the 1940 Act, a fund must recite its policies with respect to
industry concentration in its prospectus. Any change to those policies requires
shareholder approval. Under SEC rules and guidelines, investing more than 25% of
a fund's net assets in any one industry represents concentration. Generally,
funds may not reserve the freedom of action to concentrate. However, money
market funds may reserve freedom of action to concentrate in "government
securities" (as defined in the 1940 Act) and certain bank instruments issued by
domestic banks. In order to allow Money Market Portfolio greater flexibility to
invest in instruments that the Fund's investment manager considers attractive,
the Board proposes that Money Market Portfolio adopt a policy that allows (but
does not require) it to concentrate in government securities and bank
instruments of domestic banks.
With the freedom to concentrate in government securities and bank
instruments of domestic banks, Money Market Portfolio will have the ability to
diversify the portfolio while maintaining the ability to concentrate when
necessary to adjust to current market and other conditions.
Money Market Portfolio's current fundamental investment policy states:
"[The] Fund may not, as a fundamental policy:
Concentrate its investments in a particular industry,
as that term is used in the 1940 Act, and as
interpreted or modified by regulatory authority
having jurisdiction, from time to time, except that
the fund intends to invest more than 25% of its net
assets in instruments issued by banks."
The proposed fundamental investment policy that you are being asked to
approve states:
"The Fund may not, as a fundamental policy:
Concentrate its investments in a particular industry,
as that term is used in the Investment Company Act of
1940, as amended, and as interpreted or modified by
regulatory authority having jurisdiction, from time
to time, except that the Fund reserves the freedom of
action to concentrate in government securities and
instruments issued by domestic banks."
As with Money Market Portfolio's current fundamental policy on
concentration, in the event that the Fund concentrates its investments in
instruments issued by domestic banks, changes in the financial condition or
market assessment of the financial condition of such domestic banks could have a
significant adverse impact on the Fund. Consequently, if Money Market Portfolio
were concentrated, an investment in the Fund may be riskier than an investment
in a money market fund that does not concentrate in instruments issued by
domestic banks. Domestic banks include U.S. banks and U.S. branches of foreign
banks that are subject to the same regulation as U.S. banks. Domestic banks may
also include foreign branches of domestic banks if the investment risk
associated with investing in instruments issued by the foreign branch of a
domestic bank is the same as investing in instruments issued by the domestic
parent.
If the amendment to Money Market Portfolio's fundamental investment
policy is approved by the Fund's shareholders, it will become effective on or
about [ ], 2001. If the shareholders of Money Market Portfolio do not
approve the amendment to the Fund's fundamental investment policy, the existing
policy on concentration will remain in place.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
OF MONEY MARKET PORTFOLIO VOTE IN FAVOR OF THIS PROPOSAL 3.
ADDITIONAL INFORMATION
GENERAL
PROXY SOLICITATION. As discussed above, shares of each Fund are offered
only to Participating Insurance Companies to fund benefits under their VA
contracts and VLI contracts (each a "Contract"). Accordingly, as of the close of
business on January 26, 2001, shares of each Fund were held by separate
accounts, or subaccounts thereof, of various Participating Insurance Companies.
These shares are owned by the Participating 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"). Participants have the right to instruct the
Participating Insurance Companies on how to vote the shares related to their
interests through their Contracts (i.e., pass-through voting). A Participating
Insurance Company must vote the shares of a Fund held in its name as directed.
If a Participating Insurance Company does not receive voting instructions for
all of the shares of a Fund 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 that Fund 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 a Fund 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 Funds as well as for
soliciting proxies from the Participating Insurance Companies, the actual
shareholders of the Funds. 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.
Any shareholder of a Fund giving a proxy has the power to revoke it by
mail (addressed to the Secretary at the principal executive office of the Trust,
c/o Zurich Scudder Investments, Inc., at the address for the Trust shown at the
beginning of this Proxy Statement) or in person at the Meeting, by executing a
superseding proxy or by submitting a notice of revocation to the Trust. 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. Only a shareholder may execute or revoke a proxy. A Participant who
has given voting instructions may revoke them through the applicable
Participating Insurance Company. A Participant may also revoke the accompanying
voting instruction at any time prior to its use by filing with the Trust a
written revocation or duly executed voting instruction bearing a later date. In
addition, any Participant who attends the Meeting in person may vote by ballot
at the Meeting, thereby canceling any voting instruction previously given. The
persons named in the accompanying voting instruction will vote as directed, but
in the absence of voting directions in any voting instruction that is signed and
returned, they may have the authority to vote the interest represented thereby
FOR each Proposal and may vote in accordance with their best judgment with
respect to other matters not now known to the Board that may be presented to the
Meeting.
The presence at any shareholders' meeting, in person or by proxy, of
the holders of at least 30% of the shares of the Trust (for a trust-wide vote)
or a Fund (for a fund-wide vote) 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
any Proposal is not obtained at the Meeting, the persons named as proxies may
propose one or more adjournments of the Meeting in accordance with applicable
law to permit further solicitation of proxies with respect to that Proposal. Any
such adjournment as to a matter will require the affirmative vote of the holders
of a majority of the Trust's (for a trust-wide vote) or a Fund's (for a
fund-wide vote) shares present in person or by proxy at the Meeting. The persons
named as proxies will vote in favor of any such adjournment those proxies which
they are entitled to vote in favor of that Proposal and will vote against any
such adjournment those proxies to be voted against that Proposal. 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 that have not been voted. Broker non-votes are proxies received by a Fund
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 election of each nominee under Proposal 1 requires the affirmative
vote of a plurality of the shares of the Trust voting on such election. The vote
for the election of Trustees will be determined based upon the results of the
voting of shares of each series of the Trust, voting as a single class. The
votes of shareholders of certain series of the Trust are being solicited through
separate proxy statements. Aproval of Proposal 2 requires the affirmative vote
of a majority of the shares of a Fund voting at the Meeting. Approval of
Proposal 3 requires the affirmative vote of a "majority of the outstanding
voting securities" of Money Market 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 (i) 67% of the
voting securities of Money Market Portfolio present at the meeting if more than
50% of the outstanding voting securities of Money Market Portfolio are present
in person or by proxy or (ii) more than 50% of the outstanding voting securities
of Money Market Portfolio. Abstentions and broker non-votes will not be counted
in favor of, but will have no other effect on, Proposals 1 and 2 and will have
the effect of a "no" vote on Proposal 3.
As of November 30, 2000, each officer, nominee and Trustee of the Trust
individually, and the officers and Trustees as a group, owned beneficially less
than 1% of the outstanding shares of each Fund. Appendix 3 hereto sets forth the
beneficial owners of more than 5% of each Fund's shares, as well as the
beneficial owners of more than 5% of the shares of each other portfolio of the
Trust. To the best of the Trust's knowledge, as of November 30, 2000, no person
owned beneficially more than 5% of any Fund's outstanding shares or the shares
of any other portfolio of the Trust, except as stated on Appendix 3.
Proxy solicitation costs will be paid by ZSI. In addition to
solicitation by mail, certain officers and representatives of the Trust,
officers and employees of ZSI or its affiliates 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") also has been engaged to assist
in the solicitation of proxies, at an estimated cost of $8,000. As the Meeting
date approaches, certain shareholders of a Fund, if their votes have not yet
been received, may receive a telephone call from a representative of SCC
requesting that they submit the proxy card(s) or voting instruction form(s)
originally sent with the Proxy Statement. Should shareholders require additional
information regarding the proxy or replacement proxy card(s) or voting
instruction form(s), they may contact SCC toll-free at 1-877-389-2214. Any proxy
given by a shareholder is revocable until voted at the Meeting.
INVESTMENT ADVISOR, SUBADVISORS AND PRINCIPAL UNDERWRITER. The Funds'
investment advisor is Zurich Scudder Investments, Inc., 345 Park Avenue, New
York, New York 10154. Bankers Trust Company, 130 Liberty Street, New York, New
York 10006, is KVS Index 500 Portfolio's subadvisor. Eagle Asset Management,
Inc. 880 Carillon Parkway, St. Petersburg, Florida 33716, is KVS Focused Large
Cap Growth Portfolio's subadvisor. Janus Capital Corporation, 100 Fillmore
Street, Denver, Colorado 80206-4928, is the subadvisor for KVS Growth and Income
Portfolio and KVS Growth Opportunities Portfolio. Dreman Value Management
L.L.C., 10 Exchange Place, Jersey City, New Jersey 07302, is the subadvisor for
KVS Dreman Financial Services Portfolio and KVS Dreman High Return Equity
Portfolio. Kemper Distributors, Inc., located at 222 South Riverside Plaza,
Chicago, Illinois 60606, is the distributor and principal underwriter for shares
of each Fund.
SHAREHOLDER PROPOSALS FOR SUBSEQUENT MEETINGS. Shareholders wishing to
submit proposals for inclusion in a proxy statement for a shareholder meeting
subsequent to the Meeting, if any, should send their written proposals to the
Secretary of the Trust, c/o Zurich Scudder Investments, Inc., 222 South
Riverside Plaza, Chicago, Illinois 60606, 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 MEETING. The Board is not aware of any
matters that will be presented for action at the Meeting other than the matters
described in this material. 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 Trust and/or the
Funds.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) OR VOTING
INSTRUCTION FORM(S) PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
By Order of the Board,
/s/ Maureen E. Kane
Maureen E. Kane
Secretary
<PAGE>
APPENDIX 1
KEMPER VARIABLE SERIES
Kemper Aggressive Growth Portfolio
Kemper Blue Chip Portfolio
Kemper Contrarian Value Portfolio
Kemper Global Blue Chip Portfolio
Kemper Government Securities Portfolio
Kemper Growth Portfolio
Kemper High Yield Portfolio
Kemper International Portfolio
Kemper Investment Grade Bond Portfolio
Kemper Money Market Portfolio
Kemper New Europe Portfolio
Kemper Small Cap Growth Portfolio
Kemper Small Cap Value Portfolio
Kemper Strategic Income Portfolio
Kemper Technology Growth Portfolio
Kemper Total Return Portfolio
KVS Dreman Financial Services Portfolio
KVS Dreman High Return Equity Portfolio
KVS Focused Large Cap Growth Portfolio
KVS Growth and Income Portfolio
KVS Growth Opportunities Portfolio
KVS Index 500 Portfolio
<PAGE>
APPENDIX 2
FUND SHARES OUTSTANDING
The table below sets forth the number of shares of each series of the
Trust outstanding as of December 31, 2000.
NUMBER OF SHARES
FUND OUTSTANDING
Kemper Aggressive Growth Portfolio 49,909,597.624
Kemper Blue Chip Portfolio 158,306,610.276
Kemper Contrarian Value Portfolio 163,654,803.712
Kemper Global Blue Chip Portfolio 28,262,308.877
Kemper Government Securities Portfolio 126,908,998.672
Kemper Growth Portfolio 193,400,099.078
Kemper High Yield Portfolio 337,288,121,616
Kemper Horizon 5 Portfolio 28,749,630.105
Kemper Horizon 10+ Portfolio 41,973,537.738
Kemper Horizon 20+ Portfolio 21,805,435.961
Kemper International Portfolio 121,747,989.322
Kemper Investment Grade Bond Portfolio 67,709,469.629
Kemper Money Market Portfolio 278,826,209.917
Kemper New Europe Portfolio 13,973,925.401
Kemper Small Cap Growth Portfolio 139,081,779.116
Kemper Small Cap Value Portfolio 74,793,494.958
Kemper Strategic Income Portfolio 9,120,802.883
Kemper Technology Growth Portfolio 194,420,698.493
Kemper Total Return Portfolio 328,284,442.439
Kemper Value+Growth Portfolio 92,528,575.323
KVS Dreman Financial Services Portfolio 57,130,696.099
KVS Dreman High Return Equity Portfolio 155,882,182.981
KVS Focused Large Cap Growth Portfolio 24,678,503.598
KVS Growth and Income Portfolio 100,469,805.463
KVS Growth Opportunities Portfolio 134,815,890.357
KVS Index 500 Portfolio 104,700,340.975
<PAGE>
APPENDIX 3
BENEFICIAL OWNERS OF MORE THAN 5% OF FUND SHARES
As of November 30, 2000, the following shares of the portfolios of the
Trust were held in the name of Allmerica Life Insurance Company, 440 Lincoln
Street, Worcester, MA, 01653, who may be deemed to be the beneficial owner of
certain of these shares:
o 28,320,768 shares in the aggregate, or 60.87% of the outstanding shares of
KEMPER AGGRESSIVE GROWTH PORTFOLIO;
o 114,219,903 shares in the aggregate, or 73.18% of the outstanding shares of
KEMPER BLUE CHIP PORTFOLIO;
o 96,026,706 shares in the aggregate, or 59.44% of the outstanding shares of
KEMPER CONTRARIAN VALUE PORTFOLIO;
o 18,760,317 shares in the aggregate, or 67.97% of the outstanding shares of
KEMPER GLOBAL BLUE CHIP PORTFOLIO;
o 47,186,171 shares in the aggregate, or 37.73% of the outstanding shares of
KEMPER GOVERNMENT SECURITIES PORTFOLIO;
o 51,457,858 shares in the aggregate, or 26.58% of the outstanding shares of
KEMPER GROWTH PORTFOLIO;
o 128,669,800 shares in the aggregate, or 43.44% of the outstanding shares of
KEMPER HIGH YIELD PORTFOLIO;
o 23,182,585 shares in the , or 79.08% of the outstanding shares of KEMPER
HORIZON 5 PORTFOLIO;
o 31,834,181 shares in the aggregate, or 74.85% of the outstanding shares of
KEMPER HORIZON 10+ PORTFOLIO;
o 15,716,224 shares in the aggregate, or 70.76% of the outstanding shares of
KEMPER HORIZON 20+ PORTFOLIO;
o 48,837,990 shares in the aggregate, or 39.80% of the outstanding shares of
KEMPER INTERNATIONAL Portfolio;
o 45,948,436 shares in the aggregate, or 69.08% of the outstanding shares of
KEMPER INVESTMENT GRADE BOND PORTFOLIO;
o 131,316,637 shares in the aggregate, or 43.32% of the outstanding shares of
KEMPER MONEY MARKET Portfolio;
o 8,958,632 shares in the aggregate, or 68.33% of the outstanding shares of
KEMPER NEW EUROPE PORTFOLIO;
o 46,809,686 shares in the aggregate, or 34.20% of the outstanding shares of
KEMPER SMALL CAP GROWTH PORTFOLIO;
o 41,455,285 shares in the aggregate, or 55.63% of the outstanding shares of
KEMPER SMALL CAP VALUE PORTFOLIO;
o 5,736,446 shares in the aggregate, or 64.78% of the outstanding shares of
KEMPER STRATEGIC INCOME PORTFOLIO;
o 114,776,395 shares in the aggregate, or 63.17% of the outstanding shares of
KEMPER TECHNOLOGY GROWTH PORTFOLIO;
o 94,387,108 shares in the aggregate, or 28.53% of the outstanding shares of
KEMPER TOTAL RETURN PORTFOLIO;
o 66,625,290 shares in the aggregate, or 71.74% of the outstanding shares of
KEMPER VALUE+GROWTH PORTFOLIO;
o 39,941,218 shares in the aggregate, or 73.36% of the outstanding shares of
KVS DREMAN FINANCIAL SERVICES PORTFOLIO;
o 92,013,813 shares in the aggregate, or 61.64% of the outstanding shares of
KVS DREMAN HIGH RETURN EQUITY PORTFOLIO;
o 15,770,791 shares in the aggregate, or 69.52% of the outstanding shares of
KVS FOCUSED LARGE CAP GROWTH PORTFOLIO;
o 63,006,181 shares in the aggregate, or 66.21% of the outstanding shares of
KVS GROWTH AND INCOME PORTFOLIO;
o 83,486,667 shares in the aggregate, or 66.25% of the outstanding shares of
KVS GROWTH OPPORTUNITIES PORTFOLIO; and
o 53,691,106 shares in the aggregate, or 54.42% of the outstanding shares of
KVS INDEX 500 PORTFOLIO.
As of November 30, 2000, the following shares of the Trust were held in
the name of Kemper Investors Life Insurance Company, 222 South Riverside Plaza,
Chicago, IL, 60606, who may be deemed to be the beneficial owner of certain of
these shares:
o 8,680,738 shares in the aggregate, or 5.56% of the outstanding shares of
KEMPER BLUE CHIP PORTFOLIO;
o 45,327,609 shares in the aggregate, or 28.06% of the outstanding shares of
KEMPER CONTRARIAN VALUE PORTFOLIO;
o 48,905,972 shares in the aggregate, or 39.10% of the outstanding shares of
KEMPER GOVERNMENT SECURITIES PORTFOLIO;
o 133,629,422 shares in the aggregate, or 69.03% of the outstanding shares of
KEMPER GROWTH PORTFOLIO;
o 142,534,569 shares in the aggregate, or 48.12% of the outstanding shares of
KEMPER HIGH YIELD PORTFOLIO;
o 4,201,460 shares in the aggregate, or 14.33% of the outstanding shares of
KEMPER HORIZON 5 PORTFOLIO;
o 7,037,417 shares in the aggregate, or 16.55% of the outstanding shares of
KEMPER HORIZON 10+ PORTFOLIO;
o 5,211,672 shares in the aggregate, or 23.46% of the outstanding shares of
KEMPER HORIZON 20+ PORTFOLIO;
o 67,076,484 shares in the aggregate, or 54.67% of the outstanding shares of
KEMPER INTERNATIONAL PORTFOLIO;
o 10,356,740 shares in the aggregate, or 15.57% of the outstanding shares of
KEMPER INVESTMENT GRADE BOND PORTFOLIO;
o 125,564,878 shares in the aggregate, or 41.43% of the outstanding shares of
KEMPER MONEY MARKET PORTFOLIO;
o 69,218,682 shares in the aggregate, or 50.57% of the outstanding shares of
KEMPER SMALL CAP GROWTH PORTFOLIO;
o 19,064,207 shares in the aggregate, or 25.58% of the outstanding shares of
KEMPER SMALL CAP VALUE PORTFOLIO;
o 215,863,566 shares in the aggregate, or 65.25% of the outstanding shares of
KEMPER TOTAL RETURN Portfolio; and
o 20,044,723 shares in the aggregate, or 21.58% of the outstanding shares of
KEMPER VALUE+GROWTH Portfolio.
As of November 30, 2000, the following shares of the portfolios of the
Trust were held in the name of Lincoln National Life Insurance Company, 2920
South 84th Street, Lincoln, NE, 68506, who may be deemed to be the beneficial
owner of certain of these shares:
o 13,497,662 shares in the aggregate, or 10.79% of the outstanding shares of
KEMPER GOVERNMENT SECURITIES PORTFOLIO.
As of November 30, 2000, the following shares of the portfolios of the
Trust were held in the name of Zurich Kemper Life, 1 Kemper Drive, Long Grove,
IL, 60049, who may be deemed to be the beneficial owner of such shares:
o 16,696,503 shares in the aggregate, or 35.89% of the outstanding shares of
KEMPER AGGRESSIVE GROWTH PORTFOLIO;
o 41,851,610 shares in the aggregate, or 26.82% of the outstanding shares of
KEMPER BLUE CHIP PORTFOLIO;
o 65,531,853 shares in the aggregate, or 40.56% of the outstanding shares of
KEMPER CONTRARIAN VALUE PORTFOLIO;
o 62,016,515 shares in the aggregate, or 49.58% of the outstanding shares of
KEMPER GOVERNMENT SECURITIES PORTFOLIO;
o 142,133,912 shares in the aggregate, or 73.42% of the outstanding shares of
KEMPER GROWTH PORTFOLIO;
o 166,841,942 shares in the aggregate, or 56.33% of the outstanding shares of
KEMPER HIGH YIELD PORTFOLIO;
o 6,132,901 shares in the aggregate, or 20.92% of the outstanding shares of
KEMPER HORIZON 5 PORTFOLIO;
o 10,697,987 shares in the aggregate, or 25.15% of the outstanding shares of
KEMPER HORIZON 10+ PORTFOLIO;
o 6,488,388 shares in the aggregate, or 29.21% of the outstanding shares of
KEMPER HORIZON 20+ PORTFOLIO;
o 73,894,986 shares in the aggregate, or 60.22% of the outstanding shares of
KEMPER INTERNATIONAL PORTFOLIO;
o 20,568,118 shares in the aggregate, or 30.92% of the outstanding shares of
KEMPER INVESTMENT GRADE BOND PORTFOLIO;
o 171,785,353 shares in the aggregate, or 56.67% of the outstanding shares of
KEMPER MONEY MARKET PORTFOLIO;
o 85,223,299 shares in the aggregate, or 62.26% of the outstanding shares of
KEMPER SMALL CAP GROWTH PORTFOLIO;
o 28,526,681 shares in the aggregate, or 38.28% of the outstanding shares of
KEMPER SMALL CAP VALUE PORTFOLIO;
o 2,907,399 shares in the aggregate, or 32.83% of the outstanding shares of
KEMPER STRATEGIC INCOME PORTFOLIO;
o 65,409,404 shares in the aggregate, or 36.00% of the outstanding shares of
KEMPER TECHNOLOGY GROWTH PORTFOLIO;
o 236,438,346 shares in the aggregate, or 71.47% of the outstanding shares of
KEMPER TOTAL RETURN PORTFOLIO;
o 26,244,244 shares in the aggregate, or 28.26% of the outstanding shares of
KEMPER VALUE+GROWTH PORTFOLIO;
o 13,989,653 shares in the aggregate, or 25.70% of the outstanding shares of
KVS DREMAN FINANCIAL SERVICES PORTFOLIO;
o 55,893,761 shares in the aggregate, or 37.44% of the outstanding shares of
KVS DREMAN HIGH RETURN EQUITY PORTFOLIO;
o 5,379,454 shares in the aggregate, or 23.71% of the outstanding shares of
KVS FOCUSED LARGE CAP GROWTH PORTFOLIO; and
o 39,918,209 shares in the aggregate, or 40.46% of the outstanding shares of
KVS INDEX 500 PORTFOLIO.
As of November 30, 2000, the following shares of the portfolios of the
Trust were held in the name of Cova Financial Services Company, One Tower Lane,
Suite 3000, Oakbrook Terrace, IL, 60181, who may be deemed to be the beneficial
owner of certain of these shares:
o 4,538,063 shares in the aggregate, or 6.09% of the outstanding shares of
KEMPER SMALL CAP VALUE Portfolio.
<PAGE>
PRELIMINARY COPIES
YOUR VOTE IS IMPORTANT!
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
[KEMPER][KVS] [ ] PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS - MARCH 14, 2001
I hereby appoint Philip J. Collora, Maureen E. Kane, Caroline Pearson
and Kathryn L. Quirk, each with the full power of substitution, as my proxies to
vote all shares of the above-referenced fund (the "Fund") which I am entitled to
vote, as shown on the reverse side, at the Special Meeting of Shareholders
("Special Meeting") of the Fund to be held on March 14, 2001 at 3:30 p.m.,
Eastern time, at the offices of Zurich Scudder Investments, Inc., 13th Floor,
Two International Place, Boston, MA 02110-4103, and at any adjournments thereof.
I hereby revoke any and all proxies with respect to such shares
previously given by me. I acknowledge receipt of the Proxy Statement relating to
the Special Meeting.
This instruction may be revoked at any time prior to its exercise at
the Special Meeting by execution of a subsequent proxy card, by written notice
to the Fund's Secretary or by voting in person at the Special Meeting.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
Dated ____________________________, 2001
PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR. WHEN SIGNING AS AN
ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR
FULL TITLE AS SUCH.
-----------------------------------------
[NAME]
[ADDRESS]
-----------------------------------------
SIGNATURE(S) OF SHAREHOLDER(S)
<PAGE>
YOUR VOTE IS IMPORTANT!
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED.
IF NO INSTRUCTIONS ARE INDICATED ON A PROPERLY EXECUTED PROXY, THE PROXY WILL BE
VOTED FOR APPROVAL OF THE PROPOSALS.
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND. THE BOARD
OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSALS.
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
FOR ALL
NOMINEES
LISTED WITHHOLD
(EXCEPT AS AUTHORITY TO
NOTED IN VOTE FOR ALL
SPACE NOMINEES LISTED
PROVIDED)
PROPOSAL 1
To elect Trustees to hold office until [ ] [ ]
their respective successors have been
duly elected and qualified or until
their earlier resignation or removal.
NOMINEES:
(01) John W. Ballantine, (02) Lewis A.
Burnham, (03) Linda C. Coughlin, (04)
Donald L. Dunaway, (05) James R. Edgar,
(06) William F. Glavin, (07) Robert B.
Hoffman, (08) Shirley D. Peterson, (09)
Fred B. Renwick, (10) William P.
Sommers, (11) John G. Weithers.
INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THE NAME(S) ON THE LINE IMMEDIATELY
BELOW.
----------------------------------------
FOR AGAINST ABSTAIN
PROPOSAL 2
To ratify the selection of Ernst & Young [ ] [ ] [ ]
LLP as the Fund's independent auditors
for its current fiscal year.
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 BE SURE TO SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
<PAGE>
YOUR VOTE IS IMPORTANT!
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
KEMPER MONEY MARKET PORTFOLIO
SPECIAL MEETING OF SHAREHOLDERS - MARCH 14, 2001
I hereby appoint Philip J. Collora, Maureen E. Kane, Caroline Pearson
and Kathryn L. Quirk, each with the full power of substitution, as my proxies to
vote all shares of the above-referenced fund (the "Fund") which I am entitled to
vote, as shown on the reverse side, at the Special Meeting of Shareholders
("Special Meeting") of the Fund to be held on March 14, 2001 at 3:30 p.m.,
Eastern time, at the offices of Zurich Scudder Investments, Inc., 13th Floor,
Two International Place, Boston, MA 02110-4103, and at any adjournments thereof.
I hereby revoke any and all proxies with respect to such shares
previously given by me. I acknowledge receipt of the Proxy Statement relating to
the Special Meeting.
This instruction may be revoked at any time prior to its exercise at
the Special Meeting by execution of a subsequent proxy card, by written notice
to the Fund's Secretary or by voting in person at the Special Meeting.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
Dated ____________________________, 2001
PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR. WHEN SIGNING AS AN
ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR
FULL TITLE AS SUCH.
------------------------------------------
[NAME]
[ADDRESS]
------------------------------------------
SIGNATURE(S) OF SHAREHOLDER(S)
<PAGE>
YOUR VOTE IS IMPORTANT!
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED.
IF NO INSTRUCTIONS ARE INDICATED ON A PROPERLY EXECUTED PROXY, THE PROXY WILL BE
VOTED FOR APPROVAL OF THE PROPOSALS.
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND. THE BOARD
OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSALS.
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
FOR ALL
NOMINEES
LISTED WITHHOLD
(EXCEPT AS AUTHORITY TO
NOTED IN VOTE FOR ALL
SPACE NOMINEES LISTED
PROVIDED)
PROPOSAL 1
To elect Trustees to hold office until [ ] [ ]
their respective successors have been
duly elected and qualified or until
their earlier resignation or removal.
NOMINEES:
(01) John W. Ballantine, (02) Lewis A.
Burnham, (03) Linda C. Coughlin, (04)
Donald L. Dunaway, (05) James R. Edgar,
(06) William F. Glavin, (07) Robert B.
Hoffman, (08) Shirley D. Peterson, (09)
Fred B. Renwick, (10) William P.
Sommers, (11) John G. Weithers.
INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THE NAME(S) ON THE LINE IMMEDIATELY
BELOW.
----------------------------------------
FOR AGAINST ABSTAIN
PROPOSAL 2
To ratify the selection of Ernst & Young [ ] [ ] [ ]
LLP as the Fund's independent auditors
for its current fiscal year.
PROPOSAL 3
To approve an amendment to the Fund's [ ] [ ] [ ]
concentration policy.
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 BE SURE TO SIGN AND DATE THIS PROXY ON THE REVERSE SIDE
