Scudder Gold Fund
345 Park Avenue (at 51st Street)
New York, New York 10154
(800) 225-5163
July 22, 1996
To the Shareholders:
A Special Meeting of Shareholders of Scudder Gold Fund (the "Fund"), a
series of Scudder Mutual Funds, Inc. (the "Corporation"), is to be held at 2:00
p.m., eastern time, on Wednesday, September 4, 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 five Directors of the
Corporation, approve or disapprove a new Investment Management Agreement between
the Fund and Scudder, Stevens & Clark, Inc., approve or disapprove Articles of
Amendment and Restatement to the Corporation's Articles of Incorporation,
consider the ratification of the selection of Coopers & Lybrand L.L.P. as the
Fund's independent accountants, and approve or disapprove of the elimination,
amendment and/or reclassification of certain fundamental investment
restrictions. In addition, the shareholders present will hear a report on the
Fund. There will be an opportunity to discuss matters of interest to you as a
shareholder.
Your Fund's Directors 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 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.
MIS-19-1
<PAGE>
Scudder Gold Fund
Notice of Special Meeting of Shareholders
To the Shareholders of
Scudder Gold Fund:
Please take notice that a Special Meeting of Shareholders of Scudder Gold Fund
(the "Fund"), a series of Scudder Mutual Funds, Inc. (the "Corporation"), 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 Wednesday,
September 4, 1996, at 2:00 p.m., eastern time, for the following purposes:
(1) To elect five Directors to hold office until their respective
successors shall have been duly elected and qualified;
(2) To approve or disapprove a new Investment Management Agreement between
the Fund and Scudder, Stevens & Clark, Inc.;
(3) To approve or disapprove Articles of Amendment and Restatement to the
Corporation's Articles of Incorporation, as amended;
(4) To ratify or reject the action taken by the Board of Directors in
selecting Coopers & Lybrand L.L.P. as independent accountants for the fiscal
year ending June 30, 1997;
(5) To approve or disapprove of the elimination, amendment and/or
reclassification of certain fundamental investment restrictions.
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 Fund at the close of
business on July 1, 1996 are entitled to vote at the meeting and at any
adjournments thereof.
By Order of the Board of Directors,
July 22, 1996 Thomas F.McDonough, 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
Fund 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 Gold Fund
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 Directors of Scudder Mutual Funds, Inc. (the
"Corporation") for use at the Special Meeting of Shareholders of Scudder Gold
Fund (the "Fund"), 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 Wednesday, September 4, 1996 at 2:00 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 being mailed to shareholders on or about July 22, 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 Corporation at the principal executive office of the
Corporation, 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 Corporation.
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 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.
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 (4) which require the
approval of a plurality and majority, respectively, of shares voting at the
Meeting. Abstentions and broker non-votes will have the effect of a "no" vote
for proposals (2), (3) and (5), which require the approval of a specified
percentage of the outstanding shares of the Fund or of such shares present at
the meeting.
Holders of record of shares of the Fund at the close of business on July 1,
1996 (the "Record Date"), will be entitled to one vote per share on all business
of the Meeting and any adjournments. There were 11,288,581 shares of the Fund
outstanding on the Record Date.
The Fund provides 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
the Fund, without charge, by calling (800) 225-2470 or writing the Fund at P.O.
Box 2291, Boston, Massachusetts 02107-2291.
1
<PAGE>
(1) ELECTION OF DIRECTORS
The 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 Directors of the Corporation to serve until their
successors are duly elected and qualified. The nominees have consented to stand
for election and to serve if elected. If the nominees should be unable to serve,
an event not now anticipated, the proxies will be voted for such persons, if
any, as shall be designated by the Board of Directors to replace such nominee.
The Directors recommend that shareholders vote in favor of the election of the
nominees listed below.
Information Concerning Nominee
The following table sets forth certain information concerning the nominees
as Directors of the Corporation. With the exception of Mr. Ladd, each of the
nominees is now a Director of the Corporation. Unless otherwise noted, the
nominees have 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
Corporation, if any; Principal Shares
Occupation or Employment Year First Beneficially
and Directorships in Publicly Became a Owned on Percent
Name (Age) Held Companies Director June 30, 1996^(1) of Class
---------------------- ------------------------------------ ---------- --------------------- ----------
<S> <C> <C> <C> <C>
Daniel Pierce (62)*# President; Chairman of the Board 1988 855 less than
and Managing Director of Scudder, 1/4 of 1%
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 52 funds
managed by Scudder.
Thomas J. Devine Consultant. Mr. Devine serves on 1988 -- --
(69) the boards of an additional 16
funds managed by Scudder.
Keith R. Fox President, Exeter Capital 1996 -- --
(42) Management Corporation (private
equity investment firm). Mr. Fox
serves on the boards of an
additional nine funds.
2
<PAGE>
Present Office with the
Corporation, if any; Principal Shares
Occupation or Employment Year First Beneficially
and Directorships in Publicly Became a Owned on Percent
Name (Age) Held Companies Director June 30, 1996^(1) of Class
---------------------- ------------------------------------ ---------- --------------------- ----------
Dr. Gordon Professor Emeritus of Accounting, 1988 145 less than
Shillinglaw (71) Columbia University Graduate School 1/4 of 1%
of Business. Dr. Shillinglaw serves
on the boards of an additional 14
funds managed by Scudder.
Dudley Ladd (52)* Managing Director of Scudder, -- -- --
Stevens & Clark, Inc. Mr. Ladd
serves on the boards of 14 funds
managed by Scudder.
Sole Shared Sole voting
investment investment but no
All Directors and Officers and voting and voting investment Percent
as a group power power power^(2) Total of Class
---------- ---------- ----------- -------- ----------
1000 -- 59,421 60,421 0.54%
<FN>
* Persons considered by the Corporation 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, as amended (the "1940 Act")) of the
Corporation or of the Fund's investment adviser, Scudder, Stevens & Clark,
Inc. Messrs. Ladd and Pierce are deemed to be "interested persons" because of
their affiliation with the Fund's investment adviser, or because they are
Officers of the Corporation or both.
# Mr. Pierce is a member of the Executive Committee of the Corporation.
^(1)The information as to beneficial ownership is based on statements furnished
to the Corporation by the nominees and Directors. 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 filed in
profit sharing and 401(k) for which Jerard K. Hartman serves as Trustee.
</FN>
</TABLE>
As of June 30, 1996, 870,360 shares in the aggregate, 7.72% of the
outstanding shares of the Fund, were held in the name of Charles Schwab & Co.,
Inc., 101 Montgomery Street, San Francisco, CA 94104-4122, 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 the Fund's knowledge, as of June 30,
1996, no other person owned beneficially more than 5% of the Fund's outstanding
voting securities.
Committees of the Board--Board Meetings
The Board of Directors met six times during the fiscal year ended June 30,
1996. Each Director attended at least 75% of the total number of regular
meetings of the Directors and all Committees of the Board on which they served
as regular members.
The Directors, in addition to an Executive Committee, have an Audit
Committee, a Valuation Committee and a Committee on Independent Directors. The
Executive and Valuation Committees consist of regular members, allowing
alternates.
3
<PAGE>
Audit Committee
The Directors have an Audit Committee, consisting of those Directors who
are not interested persons of the Fund or of Scudder (the "Non-Interested
Directors"). The Audit Committee met once during the fiscal year ended June 30,
1996 to review with management and the independent accountants, among other
things, the scope of the audit and the controls of the Fund and their agents, to
review and approve in advance the type of services to be rendered by independent
accountants, to recommend the selection of independent accountants for the Fund
to the Directors for approval and in general to consider and report to the
Directors on matters regarding the Fund's accounting and bookkeeping practices.
Nominating Committee
The Directors have a Committee on Independent Directors, consisting of the
Non-Interested Directors. The Committee is charged with the duty of making all
nominations of Non-Interested Directors. Shareholders' recommendations as to
nominees received by management are referred to the Committee for its
consideration and action. The Committee met on March 6, 1996 to consider and to
nominate the nominees set forth above.
Honorary Director
Robert G. Stone, Jr. serves as an Honorary Director of the Corporation.
Honorary Directors are invited to attend all Board meetings and to participate
in Board discussions, but are not entitled to vote on any matter presented to
the Board.
Executive Officers
In addition to Mr. Pierce, a Director who is also an Officer of the
Corporation, the following persons are Executive Officers of the Corporation:
<TABLE>
<CAPTION>
Present Office with the Corporation; 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 1988
Scudder, Stevens & Clark, Inc.
Thomas W. Joseph (57) Vice President; Principal of Scudder, 1988
Stevens & Clark, Inc.
David S. Lee (62) Vice President; Managing Director of 1988
Scudder, Stevens & Clark, Inc.
Thomas F. McDonough (49) Vice President and Secretary; Principal of 1988
Scudder, Stevens & Clark, Inc.
Pamela A. McGrath (42) Vice President and Treasurer; Managing 1989
Director of Scudder, Stevens & Clark, Inc.
Edward J. O'Connell (51) Vice President and Assistant Treasurer; 1988
Principal of Scudder, Stevens & Clark, Inc.
Juris Padegs (65) Vice President and Assistant Secretary; 1988
Managing Director of Scudder, Stevens &
Clark, Inc.
4
<PAGE>
Present Office with the Corporation; Year First
Name (Age) Principal Occupation or Employment^(1) Became an Officer^(2)
---------- ------------------------------------- ---------------------
Kathryn L. Quirk (43) Vice President and Assistant Secretary; 1988
Managing Director of Scudder, Stevens &
Clark, Inc.
Coleen Downs Dinneen (35) Assistant Secretary; Vice President of 1992
Scudder, Stevens & Clark, Inc.
<FN>
(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 Corporation.
</FN>
</TABLE>
Transactions with and Remuneration of Officers and Directors
The aggregate direct remuneration of the Non-Interested Directors of the
Corporation was $28,615, including expenses, during the fiscal year ended June
30, 1996. Each such Non-Interested Director currently receives an annual
Director's fee of $4,000 and a fee of $400 for each Directors' meeting, Audit
Committee meeting or meeting held for the purpose of considering contractual
arrangements between the Corporation and Scudder and $150 for each other
committee meeting attended. Scudder supervises the Fund's investments and pays
the compensation and expenses of the personnel of Scudder who serve as Directors
and Officers of the Corporation, and receives an investment advisory fee.
Several of the Corporation's Officers and Directors are also officers or
employees of Scudder, Scudder Fund Accounting Corporation, Scudder Service
Corporation or Scudder Trust Company and they may therefore be deemed to
participate in the fees paid to those firms, although the Corporation makes no
direct payments to them.
The following Compensation Table, provides in tabular form, the following data:
Column (1) All Directors who receive compensation from the Corporation.
Column (2) Aggregate compensation received by a Director from the Corporation.
Columns (3) and (4) Pension or retirement benefits accrued or proposed to be
paid by the Fund Complex. The Corporation does not pay such benefits to its
Directors.
Column (5) Total compensation received by a Director from the Corporation plus
compensation received from all funds managed by Scudder for which a Director
serves. The total number of funds from which a Director receives such
compensation is also provided. Generally, compensation received by a Director
for serving on the Board of a closed-end fund is greater than the compensation
received by a Director for serving on the Board of an open-end fund.
5
<PAGE>
<TABLE>
<CAPTION>
Compensation Table
for the year ended December 31, 1995
---------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
Name of Person, Aggregate Pension or Estimated Total Compensation
Position Compensation Retirement Annual From the
from Benefits Accrued Benefits Upon Corporation and
Scudder Mutual As Part of Fund Retirement Fund Complex Paid
Funds, Inc. Complex Expenses to Directors
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thomas J. Devine, $9,000 N/A N/A $146,267
Director (17 funds)
Keith R. Fox, --* N/A N/A $1,686+
Director (2 funds)
Dr. Gordon Shillinglaw, $9,400 N/A N/A $102,097
Director (15 funds)
Robert G. Stone, Jr., $9,000** $6,788*** $6,000*** $144,302
Honorary Director (15 funds)
<FN>
* Mr. Fox became a Director on January 1, 1996.
** Mr. Stone became an Honorary Director on January 1, 1996.
*** Retirement benefits accrued and proposed to be paid as additional
compensation for serving on the Board of The Japan Fund, Inc.
+ Does not reflect Mr. Fox's membership on the Boards of seven other Scudder
funds of which he was elected to after December 31, 1995.
</FN>
</TABLE>
Required Vote
Election of the listed nominees for Director requires the affirmative vote
of a plurality of the votes cast at the Meeting in person or by proxy. The
Directors recommend that shareholders vote in favor of each of the nominees.
(2) APPROVAL OR DISAPPROVAL OF THE INVESTMENT
MANAGEMENT AGREEMENT
Scudder acts as investment manager to the Fund pursuant to an Investment
Management Agreement (the "present Agreement") dated August 22, 1988, between
the Corporation, on behalf of the Fund, and Scudder.
The Directors unanimously recommend that the shareholders approve a
proposed Investment Management Agreement (the "proposed Agreement") in place of
the present Agreement. At a meeting held on June 4, 1996 the Directors,
including the Non-Interested Directors, approved the terms of the proposed
Agreement and its adoption subject to approval by shareholders.
In approving the Agreement and recommending its approval by shareholders,
the Directors, considering the best interests of the shareholders of the Fund,
took into account all such factors as they deemed relevant. Among such factors
were the nature, quality and extent of the services furnished by Scudder to the
Fund; the advantages and possible disadvantages to the Fund of having a manager
which also serves other investment companies and private accounts; the
investment record of Scudder; possible economies of scale; comparative data as
6
<PAGE>
to advisory fees; the risks assumed by Scudder; possible benefits to Scudder
from serving as manager to, and of an affiliate of Scudder serving as principal
underwriter of the Fund; current and developing conditions in the financial
services industry, including the entry into the industry of large and highly
capitalized companies which spend, and appear to be prepared to continue to
spend, substantial sums to engage personnel and to provide services to competing
investment companies; the financial resources of Scudder; the continuance of
appropriate incentives to assure that Scudder will continue to furnish high
quality services to the Fund; and various other factors. Set forth below is a
description of the principal differences between the present Agreement and the
proposed Agreement as well as a description of those provisions which are the
same under both Agreements.The proposed Agreement is attached hereto as Exhibit
A.
The present Agreement provides that Scudder be paid a monthly fee, payable
in dollars, at an annual rate of 1% of the Fund's average daily net assets. As
of June 30, 1996, assets of the Fund were $174 million. The proposed Agreement
does not include any changes to the existing management fee structure paid to
Scudder.
Description of the Proposed Agreement
Under the proposed Agreement, Scudder will provide the Fund with continuing
investment management. Under the present Agreement, Scudder provides the Fund
with investment research, advice and supervision, and furnishes an investment
program. Under both Agreements, Scudder determines what securities shall be
purchased, held or sold and what portion of the Fund's assets shall be held
uninvested, subject to the Corporation's Articles of Incorporation and By-Laws,
and the Fund's investment objective, policies and restrictions, the Investment
Company Act of 1940, as amended (the "1940 Act"), and such policies and
instructions as the Directors may determine.
In addition to the provision of portfolio management services and the
payment of the Fund's office rent, under the proposed Agreement Scudder will
render significant administrative services (not otherwise provided by third
parties) necessary for the Fund's operations as an open-end investment company
including, but not limited to, preparing reports and notices to the Directors
and shareholders; supervising, negotiating contractual arrangements with, and
monitoring various third-party service providers to the Fund (such as the Fund's
transfer agent, pricing agents, custodian, accountants and others); preparing
and making filings with the Securities and Exchange Commission and other
regulatory agencies; assisting in the preparation and filing of the Fund's
federal, state and local tax returns; preparing and filing the Fund's federal
excise tax returns; assisting with investor and public relations matters;
monitoring the valuation of securities and the calculation of net asset value;
monitoring the registration of shares of the Fund under applicable federal and
state securities laws; maintaining the Fund's books and records to the extent
not otherwise maintained by a third party; assisting in establishing accounting
policies of the Fund; assisting in the resolution of accounting and legal
issues; establishing and monitoring the Fund's operating budget; processing the
payment of the Fund's bills; assisting the Fund in, and otherwise arranging for,
the payment of distributions and dividends and otherwise assisting the Fund in
the conduct of its business, subject to the direction and control of the
Directors.
Under the present Agreement, Scudder pays the Fund's office rent and
provides investment advisory services. The Fund is responsible for all of its
other expenses, including clerical salaries, fees and expenses incurred in
7
<PAGE>
connection with membership in investment company organizations; brokers'
commissions; legal, auditing and accounting expenses; portfolio pricing
services; taxes and governmental fees; the fees and expenses of the transfer
agent; and any other expenses, including clerical expenses, of issue, redemption
or repurchase of shares; the expenses of and fees for registering or qualifying
securities for sale; the fees and expenses of Non-Interested Directors; the cost
of printing and distributing reports and notices to shareholders; and the fees
and disbursements of custodians. The Fund may arrange to have third parties
assume all or part of the expenses of sale, underwriting and distribution of
shares of the Fund. The Fund is also responsible for expenses of shareholders'
meetings, the cost of responding to shareholders' inquiries, and its expenses
incurred in connection with litigation, proceedings and claims and the legal
obligation it may have to indemnify officers and Directors of the Fund with
respect thereto. Under the present Agreement the Fund is responsible for the
cost of preparing reports and notices to Directors and shareholders.
Under the proposed Agreement, Scudder will provide the Fund with portfolio
management services and administrative services (which include provision of
office facilities) necessary for operating as an open-end investment company and
not provided by third parties including, but not limited to, preparing reports
to and meeting materials for the Corporation's Board of Directors and reports
and notices to Fund shareholders; supervising, negotiating contractual
arrangements with, to the extent appropriate, and monitoring the performance of,
accounting agents, custodians, depositories, transfer agents and pricing agents,
accountants, attorneys, printers, underwriters, brokers and dealers, insurers
and other persons; preparing and making filings with the Securities and Exchange
Commission and other regulatory and self-regulatory organizations, including,
but not limited to, preliminary and definitive proxy materials, post-effective
amendments to the Registration Statement, semiannual reports on Form N-SAR and
notices pursuant to Rule 24f-2 under the 1940 Act; overseeing the tabulation of
proxies by the Fund's transfer agent; assisting in the preparation and filing of
the Fund's federal, state and local tax returns; preparing and filing the Fund's
federal excise tax return pursuant to Section 4982 of the Code; providing
assistance with investor and public relations matters; monitoring the valuation
of portfolio securities, the calculation of net asset value; monitoring the
registration of shares of the Fund under applicable federal and state securities
laws; maintaining or causing to be maintained for the Fund all books, records
and reports and any other information required under the 1940 Act, to the extent
that such books, records and reports and other information are not maintained by
the Fund's custodian or other agents of the Fund; assisting in establishing the
accounting policies of the Fund; assisting in the resolution of accounting
issues that may arise with respect to the Fund's operations and consulting with
the Fund's independent accountants, legal counsel and the Fund's other agents as
necessary in connection therewith; establishing and monitoring the Fund's
operating expense budgets; reviewing the Fund's bills; processing the payment of
bills that have been approved by an authorized person; assisting the Fund in
determining the amount of dividends and distributions available to be paid by
the Fund to its shareholders, preparing and arranging for the printing of
dividend notices to shareholders, and providing the transfer and dividend paying
agent, the custodian, and the accounting agent with such information as is
required for such parties to effect the payment of dividends and distributions;
and otherwise assisting the Corporation as it may reasonably request in the
8
<PAGE>
conduct of the Fund's business, subject to the direction and control of the
Corporation's Board of Directors.
Under the present Agreement Scudder pays the compensation and expenses of
all officers and executive employees of the Fund, but under the proposed
Agreement, Scudder would pay only the compensation and expenses of officers and
executive employees of the Fund affiliated with Scudder. (Historically, all
officers and executive employees have been affiliated with Scudder.) Under both
Agreements, Scudder makes available, without expense to the Fund, the services
of such Directors, officers and employees as may be duly elected officers or
Directors of the Fund, subject to their individual consent to serve and to any
limitations imposed by law. Under both Agreements, the Fund is responsible for
the fees and expenses of Directors not affiliated with Scudder. (The proposed
Agreement also specifically provides that the Fund will pay the expenses, such
as travel expenses, of Directors and officers of the Fund who are Directors,
officers or employees of Scudder, to the extent that such expenses relate to
attendance at meetings of the Board of Directors or any committees thereof held
outside Boston, Massachusetts or New York, New York.) During the fiscal year
ended June 30, 1996, no compensation, direct or otherwise (other than through
fees paid to Scudder) was paid or became payable by the Fund to any of its
officers or Directors who were affiliated with Scudder.
The present Agreement directs Scudder at all times to seek for the Fund the
most favorable execution and net price available when selecting brokers or
dealers and placing orders for the Fund. The proposed Agreement states that the
placing of all such orders and the selection of brokers or dealers shall be
performed in accordance with Fund policies as set forth in the Fund's
Registration Statement. The Fund's Statement of Additional Information (Part B
of the Fund's Registration Statement) currently states that the primary
objective in placing orders for the Fund is to obtain the most favorable net
result taking into account price, commission (if any), size of order, difficulty
of execution and the skill required by the executing broker or dealer.
The present Agreement provides that Scudder shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with matters to which such Agreement relates, except a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of Scudder
in the performance of its duties or from reckless disregard by Scudder of its
obligations and duties under such Agreement. The proposed Agreement provides
that Scudder shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters to which the
Agreement relates, provided that nothing in the Agreement shall be deemed to
protect or purport to protect against any liability to the Corporation, the Fund
or its shareholders to which it would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of the duties, or
by reason of the reckless disregard of the obligations and duties hereunder. Any
person, even though also employed by Scudder, who may be or become an employee
of and paid by the Fund shall be deemed, when acting within the scope of his or
her employment by the Fund, to be acting in such employment solely for the Fund
and not as an employee or agent of Scudder.
9
<PAGE>
The present Agreement provides that the Fund may use a name derived from
the name "Scudder, Stevens & Clark, Inc.," only so long as such Agreement, or
any extension, renewal or amendment thereof, remains in effect. The proposed
Agreement provides that the Fund is granted a nonexclusive right and sublicense
to use the "Scudder" name and mark as part of the Corporation's name, and the
Scudder Marks in connection with the Corporation's investment products and
services.
If approved by the shareholders, the proposed Agreement will become
effective on the day following such approval and will remain in force until
September 30, 1997, and the present Agreement will terminate. The proposed
Agreement would continue in effect thereafter by its terms from year to year
only so long as its continuance is specifically approved at least annually by
the vote of a majority of the Non-Interested Directors cast in person at a
meeting called for the purpose of voting on such approval, and either by vote of
the Directors, or a majority of the Fund's outstanding voting securities, as
defined below. The proposed Agreement may be terminated on 60 days' written
notice, without penalty, by the Directors, by the vote of the shareholders of a
majority of the Fund's outstanding voting securities, or by Scudder, and
automatically terminates in the event of its assignment. The present Agreement
requires annual approval of its continuance and contains the same termination
provisions as the proposed Agreement.
The present Agreement will continue in effect if this Proposal is not
approved. The present Agreement was last approved by the Directors on September
6, 1995 and by the shareholders on September 15, 1989, at a meeting held in
order to elect Directors to the Board, ratify the selection of independent
accountants, and approve amendments to the Corporation's Articles of
Incorporation.
Required Vote
Approval of the proposed Agreement will require the affirmative vote of a
majority of the Fund's outstanding voting securities, which as used in this
Proxy Statement means (1) the holders of more than 50% of the outstanding shares
of the Fund or (2) the holders of 67% or more of the shares present if more than
50% of the shares are present at a meeting in person or by proxy, whichever is
less. The Directors recommend that shareholders vote to approve the proposed
Agreement.
Investment Manager
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.
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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#, E. Michael Brown*, Lynn S. Birdsong#,
Nicholas Bratt#, 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 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.
Directors, officers and employees of Scudder from time to time may have
transactions with various banks, including the Fund's custodian bank. It is
Scudder's opinion that the terms and conditions of those transactions will not
be influenced by existing or potential custodial or other Fund relationships.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of Scudder,
computes net asset value for the Fund. The Fund pays SFAC an annual fee equal to
0.025% of the first $150 million of average daily net assets, 0.0075% of such
assets on the next $850 million, 0.0045% of such assets in excess of $1 billion,
plus holding and transaction charges for this service. For the period ended June
30, 1996, the amount charged to the Fund by SFAC aggregated $56,133.
Brokerage Commissions on Portfolio Transactions
To the maximum extent feasible Scudder places orders for portfolio
transactions through Scudder Investor Services, Inc. (the "Distributor") (a
corporation registered as a broker/dealer and a subsidiary of Scudder), which in
turn places orders on behalf of the Fund with issuers, underwriters or other
brokers and dealers. The Distributor receives no commissions, fees or other
remuneration from the Fund for this service. Allocation of portfolio
transactions is supervised by Scudder.
During the fiscal year ended June 30, 1996, the Fund paid total brokerage
commissions of $235,304.
- ---------------------------
* 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
11
<PAGE>
(3) APPROVAL OR DISAPPROVAL OF ARTICLES OF AMENDMENT
AND RESTATEMENT TO THE CORPORATION'S ARTICLES OF INCORPORATION, AS AMENDED
This Proposal would replace, under Maryland corporate law, the
Corporation's Articles of Incorporation, as amended (the "current Articles")
with Articles of Amendment and Restatement (the "proposed Articles") in the form
set forth in Exhibit B.
The Corporation was incorporated in March, 1988. The current Articles were
last amended and restated in September, 1988. Many changes have occurred since
that time in both the investment company industry and in Maryland corporate law
which the Directors of the Corporation have determined would make the adoption
of the proposed Articles beneficial to shareholders. The principal changes which
would occur if the proposed Articles are approved are described in this Item 3.
Multiple Series and Classes of Shares
The proposed Articles would permit the Board of Directors of the Fund to
issue shares of capital stock in multiple series and classes. The proposed
Articles set forth that any additional series of the Corporation would have
separate investment objectives and policies, and under the proposed Articles
each series would be insulated from the liabilities of the other series.
Division of the shares into different classes (each a "Class") would permit
shares of different Classes to be distributed by different methods, and
shareholders of different Classes might bear different expenses in connection
with such methods of distribution. Shareholders of a particular Series would
continue to have an interest in the same portfolio of assets. For example, the
shares of one Class might be made available through an administrative agreement
with a bank, while the shares of another Class might continue to be available
through the Distributor without a sales charge. In such an instance, the bank
might be compensated for its services through payment by the Fund of an
administrative fee, which would be allocated only to the shares of the Class
available through the bank. Thus shareholders who purchased their shares through
the Distributor would not bear the expense of making shares available through
the bank. In the future, there may be other considerations which would make it
advisable to divide shares into different Classes.
The Directors have no present intention of taking the action necessary to
effect the division of shares into separate Classes, nor of changing the method
of distribution of shares of the Fund, although the Fund may take such action in
the future without further shareholder approval. If the shares were divided into
Classes and it was proposed that one or more Classes bear expenses of an
activity primarily intended to result in the sale of shares, the vote of a
majority of the outstanding voting securities of the affected Class or Classes
would be required to approve a "Rule 12b-1 plan" to permit the bearing of such
expenses.
Net Asset Value
The current Articles contain detailed parameters regarding net asset value
within which the Board or its delegate operates and exercises certain
discretion. It is contemplated, at this time, that net asset value will continue
to be determined in the same fashion as outlined in the current Articles.
However, the proposed Articles will permit the Board more flexibility in setting
12
<PAGE>
guidelines for the determination of net asset value in the event that new
securities, technology or regulatory changes should make advisable changes in
the method of calculating net asset value.
Shareholders would be advised of any changes in the method or timing of the
calculation of net asset value through amendments or supplements to the Fund's
registration statement, shareholder reports, or otherwise.
Required Vote
This proposal requires the approval of a majority of the votes outstanding
entitled to vote. The Directors recommend that shareholders vote to approve the
Articles of Amendment and Restatement.
(4) RATIFICATION OR REJECTION OF THE SELECTION OF
INDEPENDENT ACCOUNTANTS
At a meeting held on June 4, 1996, the Board of Directors of the
Corporation, including a majority of the Non-Interested Directors, selected
Coopers & Lybrand L.L.P. to act as independent accountants for the Fund for the
fiscal year ending June 30, 1997. Coopers & Lybrand L.L.P. are independent
accountants and have advised the Fund that they have no direct financial
interest or material indirect financial interest in the Fund. 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 stockholders or management.
The Fund's financial statements for the fiscal year ended June 30, 1996
will be 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 Fund's annual and semiannual reports and its filings with the SEC.
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 Directors recommend that shareholders ratify the selection of Coopers
& Lybrand L.L.P. as independent accountants.
(5) APPROVAL OR DISAPPROVAL OF THE ELIMINATION, AMENDMENT
AND/OR RECLASSIFICATION OF CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS
As described in the following proposals, the Directors are recommending
that shareholders approve a number of changes to the Fund's fundamental
investment restrictions, including the elimination of certain restrictions.
Generally, the purpose of these proposed changes is to increase the Fund's
investment flexibility and to bring the Fund's policies more in line with those
of many other Scudder funds.
These changes largely reflect the elimination of certain restrictive
policies which were required at one time by various state securities authorities
but which are no longer required under current regulations.
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<PAGE>
The adoption of any of these proposals is not contingent on the adoption of
any other proposal.
Required Vote
Approval of each of these proposals require the vote of a majority of the
outstanding voting securities of the Fund. The Directors have considered various
factors and believe that these proposals are in the best interests of the Fund's
shareholders. If a proposal is not approved, the Fund's present fundamental
investment restriction will remain in effect and a shareholder vote would be
required before the Fund could engage in activities prohibited by a fundamental
restriction. The Directors recommend that shareholders vote in favor of the
elimination, amendment and/or reclassification of the Fund's investment
restrictions as described in Proposals A-K below.
A. Approval Or Disapproval Of The Reclassification Of And Amendment To The
Fund's Investment Restriction With Respect To Margin Transactions
The Directors are recommending that the Fund's fundamental investment
restriction with respect to margin transactions be reclassified as
non-fundamental and amended. The current restriction states as follows:
"The Fund may not. . .
purchase securities on margin or make short sales, unless by virtue of its
ownership of other securities, it has the right to obtain securities
equivalent in kind and amount to the securities sold and, if the right is
conditional, the sale is made upon the same conditions. For purposes of
this restriction, the deposit or payment of initial or variation margin in
connection with futures contracts or related options will not be deemed to
be a purchase of securities on margin."
Certain state securities laws in the past required this restriction, and
the restriction is currently required by only one state but is not required to
be a fundamental policy. If the proposal is approved, the Directors intend to
replace this fundamental restriction with a similar non-fundamental restriction
to comply with the remaining state's requirement.
The proposed amended non-fundamental restriction would read as follows:
"The Fund may not. . .
purchase securities on margin or make short sales, unless, by virtue of its
ownership of other securities, it has the right to obtain securities
equivalent in kind and amount to the securities sold and, if the right is
conditional, the sale is made upon the same conditions, except in
connection with arbitrage transactions and except that the Fund may obtain
such short-term credits as may be necessary for the clearance of purchases
and sales of securities."
Scudder recommended to the Directors making this fundamental investment
restriction non-fundamental to provide the Fund with maximum flexibility to
modify or eliminate the policy if no longer required under state law. If the
restriction were no longer required, the Directors could eliminate the
restriction to increase the Fund's investment flexibility without the need for
further shareholder approval. However, the Fund's potential use of margin
transactions beyond transactions in futures and options and for the clearance of
purchases and sales of securities, including the use of margin in ordinary
14
<PAGE>
securities transactions, is generally limited by the current position taken by
the Staff of the SEC that margin transactions with respect to securities are
prohibited under Section 18 of the 1940 Act because they create senior
securities. "Margin transactions" involve the purchase of securities with money
borrowed from a broker, with cash or eligible securities being used as
collateral against the loan. The Fund's ability to engage in margin transactions
is also limited by its borrowing policies, which permit the Fund to borrow money
in limited circumstances and only from banks.
B. Approval Or Disapproval Of An Amendment To The Fund's Investment
Restriction With Respect To Making Loans By Purchasing Securities
The Directors are recommending that the Fund's fundamental investment
restriction relating to making loans be clarified and rephrased consistent with
the equivalent policies of other funds managed by Scudder. The proposed
amendment would replace the current restriction, which states that:
"The Fund may not. . .
make loans other than through the purchase of securities of persons not in
control of or under common control with, the Corporation or the Fund
(including publicly held and privately placed debt securities such as
notes, bonds and debentures), except that the Fund may lend its portfolio
securities (provided such loans are fully collateralized and
marked-to-market daily), and may enter into repurchase agreements"
The proposed amended fundamental investment restriction would read as
follows:
"The Fund may not. . .
make loans to other persons, except (a) loans of portfolio securities, and
(b) to the extent the entry into repurchase agreements and the purchase of
debt securities in accordance with its investment objectives and investment
policies may be deemed to be loans."
C. Approval Or Disapproval Of An Amendment To The Fund's Investment
Restriction Relating To Underwriting Securities
The Directors are recommending that the Fund's fundamental investment
restriction relating to underwriting securities be clarified and rephrased
consistent with the equivalent policies of other funds managed by Scudder. The
proposed amendment would replace the current restriction, which states that:
"The Fund may not. . .
act as an underwriter of the securities of others, except to the extent the
purchase of securities in accordance with its investment objective and
policies directly from the issuer thereof and the later disposition thereof
may be deemed to be an underwriting."
The proposed amended fundamental investment restriction would read as
follows:
"The Fund may not. . .
act as an underwriter of securities issued by others, except to the extent
that it may be deemed an underwriter in connection with the disposition of
portfolio securities of the Fund."
15
<PAGE>
D. Approval Or Disapproval Of Amendments To The Fund's Investment Restriction
With Respect To Investments In Real Estate
The Directors are recommending that the Fund's fundamental investment
restriction relating to investments in real estate be revised to grant the Fund
the maximum flexibility in light of current regulatory requirements. The
proposed policies are consistent with the equivalent policies of other funds
managed by Scudder. The current restriction states as follows:
"The Fund will not. . .
invest in real estate or mortgages (but may invest in real estate
investment trusts, companies whose business involves the purchase or sale
of real estate or mortgages or securities that are secured by real estate)
or commodities or commodity contracts, except (a) futures contracts
including but not limited to contracts based on the performance of an index
of securities or fluctuations in interest rates or for the future delivery
of securities and gold and related options, (b) forward currency exchange
contracts and foreign currency futures contracts and related options and
(c) gold, silver, platinum and palladium bullion and gold, silver, platinum
and palladium coins."
The proposed amendments would provide maximum flexibility to invest in real
estate related securities, as well as reserve for the Fund the freedom of action
to hold and sell real estate acquired as a result of the Fund's ownership of
securities.
The proposed amended fundamental investment restriction regarding real
estate would read as follows:
"The Fund may not. . .
purchase or sell real estate (except that the Fund may invest in (i)
securities of companies which deal in real estate or mortgages, and (ii)
securities secured by real estate or interests therein, and that the Fund
reserves freedom of action to hold and to sell real estate acquired as a
result of the Fund's ownership of securities)."
To the extent the Fund invests in real estate-related securities, it will
be subject to the risks associated with the real estate market. These risks may
include declines in the value of real estate, changes in general or local
economic conditions, overbuilding, difficulty in completing construction,
increased competition, changes in zoning laws, increases in property taxes and
operating expenses, and variations in rental income. Generally, increases in
interest rates will increase the costs of obtaining financing, which may result
in a decrease in the value of such investments.
In addition, the Fund will adopt a new fundamental policy to separately
address the purchase of commodities. The new fundamental policy regarding
commodities would read as follows:
"The Fund may not. . .
purchase or sell physical commodities or contracts relating to physical
commodities, except for contracts for the future delivery of gold, and
gold, silver, platinum and palladium bullion or coins."
The proposed new fundamental policy regarding commodities amends the
restriction to refer exclusively to physical commodities, so that transactions
in what may technically be deemed to be commodities (such as certain derivatives
16
<PAGE>
contracts, and other similar instruments which may be developed in the future)
would not be subject to the restriction. The proposed restriction also
specifically excepts from its provisions the types of precious metals
investments already permitted for the Fund. The Fund has no current intention to
invest in any new types of derivatives, although the amended restriction will
provide greater flexibility to do so in the future as new types of derivatives
are developed.
E. Approval Or Disapproval Of Amendments To The Fund's Investment Restriction
With Respect To Concentration Of Its Assets
The Directors are recommending that the Fund's fundamental investment
restriction with respect to concentration of its assets be revised to make it
clear that the Fund may invest more than 25% of its total assets in the
securities of agencies or instrumentalities of the U.S. government. The current
restriction states as follows:
"The Fund may not. . .
invest more than 25% of the Fund's total assets (taken at market value) in
securities of issuers (other than wholly-owned subsidiaries of the
Corporation) principally in the same industry, except Government
Securities, and except that the Fund will invest at least 25% of its total
assets in securities of companies that are primarily engaged in the
exploration, mining, fabrication, processing or distribution of gold and
other precious metals and in gold bullion and coins."
The proposed amended fundamental restriction, which makes certain other
clarifying changes, would read as follows:
"The Fund may not. . .
purchase any securities (other than securities issued by wholly-owned
subsidiaries of the Corporation) which would cause more than 25% of the
market value of its total assets at the time of such purchase to be
invested in the securities of one or more issuers having their principal
business activities in the same industry, provided that there is no
limitation with respect to investments in obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities, and except that
the Fund will invest at least 25% of its total assets in securities of
companies that are primarily engaged in the exploration, mining,
fabrication, processing or distribution of gold and other precious metals
and in gold bullion and coins."
Scudder recommended this amendment to the Directors to make it clear that
the Fund may invest in the securities of the agencies or instrumentalities of
the U.S. government without regard to the 25% limit. Scudder believes that the
current restriction does not prevent the Fund from investing in such securities
without limit, because the SEC takes the position that government issuers,
including agencies and instrumentalities of a governmental issuer, are not
members of any industry. However, the proposed amendment is being made to avoid
any ambiguity in the future, as well as to make that provision of the
restriction consistent with the equivalent policies of other funds managed by
Scudder.
17
<PAGE>
F. Approval Or Disapproval Of The Elimination Of The Fund's Investment
Restriction Which Prohibits Investing For The Purpose Of Controlling
Another Company
The Directors are recommending that the Fund's fundamental restriction
prohibiting investing for control of another company be eliminated because such
activities are regulated specifically under the 1940 Act, and therefore, this
express investment restriction ("The Fund may not . . . invest for the purpose
of exercising control or management of any other company (other than
wholly-owned subsidiaries of the Corporation") is unnecessary.
G. Approval Or Disapproval Of The Reclassification Of And Amendments To The
Fund's Investment Restriction With Respect To Investments In Issuers That
Have Been In Operation For Less Than Three Years
The Directors are recommending the elimination of the Fund's fundamental
investment restriction which limits the Fund's investments in issuers with
limited operating histories, which are sometimes referred to as "unseasoned
issuers." The current restriction states as follows:
"The Fund may not. . .
invest more than 5% of its total assets (taken at market value) in the
securities of issuers (other than wholly-owned subsidiaries of the
Corporation) having records of less than three years continuous operation
(including the operations of predecessors), except Government Securities
and except securities of closed-end investment companies."
Certain state securities laws in the past required this restriction, and
the restriction is currently required by only one state but is not required to
be a fundamental policy. If this proposal is approved, the Directors intend to
replace this restriction with a substantially similar non-fundamental investment
restriction to comply with the remaining state's requirement. Following such
amendment, the Fund will, consistent with this state's requirement, continue to
be able to invest up to 5% of its assets in the securities of unseasoned
issuers. In addition, the restriction will exempt obligations issued by any
foreign government or its agencies or instrumentalities, as well as certain U.S.
government securities from its limitations to provide the Fund maximum
flexibility.
The new non-fundamental restriction would read as follows:
"The Fund may not. . .
purchase securities of any issuer (other than wholly-owned subsidiaries of
the Corporation) with a record of less than three years continuous
operations, including predecessors, except U.S. Government securities,
obligations issued or guaranteed by any foreign government or its agencies
or instrumentalities and securities of closed-end investment companies, if
such purchase would cause the investments of the Fund in all such issuers
to exceed 5% of the total assets of the Fund taken at market value."
Scudder recommended to the Directors making this policy non-fundamental to
provide the Fund with maximum flexibility to modify or eliminate the policy if
no longer required under state law. If the restriction were no longer required,
the Directors could change or eliminate the restriction to increase the Fund's
investment flexibility without the need for further shareholder approval.
18
<PAGE>
H. Approval Or Disapproval Of The Reclassification Of And Amendments To The
Fund's Investment Restriction With Respect To Investments In Securities Of
Issuers In Which Management Of The Fund Or Scudder Owns Securities
The Directors are recommending the reclassification as non-fundamental and
subsequent amendment of the fundamental investment restriction which prevents
the Fund from investing in the securities of issuers in which management of the
Fund or Scudder owns a certain percentage of securities. The current restriction
states as follows:
"The Fund may not. . .
purchase or retain the securities of any issuer (other than wholly-owned
subsidiaries of the Corporation) any of whose officers, directors or
security holders is an officer or director of the Corporation or of the
Fund's investment adviser if after purchase one or more of such officers or
directors owns beneficially more than 1/2 of 1% of the securities of such
issuer, and such officers and directors together own beneficially more than
5% of such securities."
Certain state securities laws in the past required this restriction, and
the restriction is currently required by only one state but is not required to
be a fundamental policy. If this proposal is approved, the Directors intend to
replace this fundamental restriction with a substantially identical
non-fundamental investment restriction to comply with the remaining state's
requirement. The text of this proposed non-fundamental restriction would read as
follows:
"The Fund may not. . .
purchase or retain securities of any issuer (other than wholly-owned
subsidiaries of the Corporation) any of whose officers, directors, trustees
or security holders is an officer or director of the Corporation or a
member, officer, director or trustee of the investment adviser of the Fund
if one or more of such individuals owns beneficially more than one-half of
one percent (1/2%) of the outstanding shares or securities or both (taken
at market value) of such issuer and such individuals owning more than
one-half of one percent (1/2%) of such shares or securities together own
beneficially more than 5% of such shares or securities or both."
Scudder recommended to the Directors making this policy non-fundamental to
provide the Fund with maximum flexibility to modify or eliminate the policy if
no longer required under state law. If the restriction were no longer required,
the Directors could eliminate the restriction to increase the Fund's investment
flexibility without the need for further shareholder approval. If the
restriction were eliminated, the Fund would be able to invest in the securities
of any issuer without regard to ownership in such issuer by management of the
Fund or Scudder, except to the extent prohibited by the Fund's investment
objective and policies and the 1940 Act.
I. Approval Or Disapproval Of Amendments To The Fund's Investment Restriction
With Respect To Borrowing
The Directors are recommending that the Fund's fundamental investment
restriction relating to borrowing be clarified and rephrased consistent with the
equivalent policies of other funds managed by Scudder. Upon approval of this
proposal, to conform to applicable state requirements, the Directors will adopt
a non-fundamental restriction which would permit the Fund to borrow only from
banks and would limit borrowings to 5% of total assets taken at market value.
19
<PAGE>
Should state restrictions change, the Directors would be able to change this
non-fundamental policy without shareholder approval.
The current restriction states as follows:
"The Fund may not. . .
borrow, except as a temporary measure to meet redemption requests or for
other extraordinary or emergency purposes, in an amount exceeding 33 1/3%
of the value of the Fund's total assets (including the amount borrowed)
valued at market less liabilities (not including the amount borrowed) at
the time the borrowing is made. The Fund will not purchase securities while
outstanding borrowings exceed 5% of the Fund's total assets. For purposes
of this restriction, the entry into futures contracts and related options
in the manner described in the Prospectus shall not be deemed to create a
borrowing."
If this proposal is approved, the Directors intend to replace this
restriction with the following fundamental investment restriction:
"The Fund may not. . .
borrow money, except as a temporary measure for extraordinary or emergency
purposes or except in connection with reverse repurchase agreements;
provided that the Fund maintains asset coverage of 300% for all
borrowings."
And would adopt the following non-fundamental policy:
"The Fund may not. . .
borrow money in excess of 5% of its total assets (taken at market value)
except for temporary or emergency purposes or borrow other than from
banks."
J. Approval Or Disapproval Of The Elimination Of The Fund's Investment
Restriction Prohibiting The Issuance Of Any Securities
The Directors propose that the Fund's fundamental restriction prohibiting
the issuance of securities be eliminated, since the essence of this policy is
contained within Proposal K below, and reads as follows:
"The Fund may not . . .
issue any securities other than its shares of common stock except as
appropriate to evidence indebtedness which the Fund is permitted to incur."
K. Approval Or Disapproval Of An Amendment To The Fund's Investment
Restriction Regarding The Issuance Of Senior Securities
The Directors are recommending that the fundamental investment restriction
relating to the issuance of senior securities be clarified and rephrased
consistent with the equivalent policies of other funds managed by Scudder. The
proposed amendment would replace the current restriction, which states that:
"The Fund may not. . .
issue senior securities, except as appropriate to evidence indebtedness
which the Fund is permitted to incur pursuant to investment restriction (9)
and except for shares of any additional series which may be established by
the Board of Directors of the Corporation. For purposes of this
restriction, (a) the deposit of assets in escrow in connection with the
20
<PAGE>
writing of options and (b) collateral arrangements with respect to initial
or variation margin for futures contracts will not be deemed to be pledges
of the Fund assets."
The Directors propose that this policy be amended to read as follows:
"The Fund may not. . .
Issue senior securities, except as appropriate to evidence indebtedness
which it is permitted to incur, and except for shares of the separate
classes or series of the Corporation, provided that collateral arrangements
with respect to currency-related contracts, futures contracts, options or
other permitted investments, including deposits of initial and variation
margin, are not considered to be the issuance of senior securities for
purposes of this restriction."
ADDITIONAL INFORMATION
Other Matters
The Board of Directors 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 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.
Miscellaneous
Proxies will be solicited by mail and may be solicited in person or by
telephone or telegraph by Officers of the Corporation, personnel of Scudder or
an agent of the Fund for compensation. The expenses connected with the
solicitation of proxies and with any further proxies which may be solicited will
be borne by the Fund. The Fund will reimburse banks, brokers and other persons
holding the Fund's 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 September 4, 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 Fund.
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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 Corporation, 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 Directors
New York, New York 10154 Thomas F. McDonough
July 22, 1996 Secretary
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EXHIBIT A
SCUDDER MUTUAL FUNDS, INC.
345 Park Avenue
New York, NY 10154
September __, 1996
Scudder, Stevens & Clark, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Scudder Gold Fund
Ladies and Gentlemen:
Scudder Mutual Funds, Inc. (the "Corporation"), has been established as a
Maryland corporation to engage in the business of an investment company.
Pursuant to the Corporation's Amended and Restated Articles of Incorporation, as
amended from time-to-time (the "Articles"), the Board of Directors has divided
the Corporation's shares of capital stock, par value $0.01 per share, (the
"Shares") into separate series, or funds, including Scudder Gold Fund (the
"Fund"). Series may be abolished and dissolved, and additional series
established, from time to time by action of the Directors.
The Corporation, on behalf of the Fund, has selected you to act as the sole
investment manager of the Fund and to provide certain other services, as more
fully set forth below, and you have indicated that you are willing to act as
such investment manager and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Corporation on behalf of the
Fund agrees with you as follows:
1. Delivery of Documents. The Corporation engages in the business of
investing and reinvesting the assets of the Fund in the manner and in accordance
with the investment objectives, policies and restrictions specified in the
currently effective Prospectus (the "Prospectus") and Statement of Additional
Information (the "SAI") relating to the Fund included in the Corporation's
Registration Statement on Form N-1A, as amended from time to time, (the
"Registration Statement") filed by the Corporation under the Investment Company
Act of 1940, as amended, (the "1940 Act") and the Securities Act of 1933, as
amended. Copies of the documents referred to in the preceding sentence have been
furnished to you by the Corporation. The Corporation has also furnished you with
copies properly certified or authenticated of each of the following additional
documents related to the Corporation and the Fund:
(a) The Articles dated September __, 1996, as amended to date.
(b) By-Laws of the Corporation as in effect on the date hereof (the "By-Laws").
(c) Resolutions of the Directors of the Corporation selecting you as investment
manager and approving the form of this Agreement.
The Corporation will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements, if any, to the
foregoing, including the Prospectus, the SAI and the Registration Statement.
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2. Sublicense to Use the Scudder Trademarks. As exclusive licensee of the
rights to use and sublicense the use of the "Scudder" and "Scudder, Stevens &
Clark," trademarks (together, the "Scudder Marks"), you hereby grant the
Corporation a nonexclusive right and sublicense to use (i) the "Scudder" name
and mark as part of the Corporation's name (the "Fund Name"), and (ii) the
Scudder Marks in connection with the Corporation's investment products and
services, in each case only for so long as this Agreement, any other investment
management agreement between you and the Corporation, or any extension, renewal
or amendment hereof or thereof remains in effect, and only for so long as you
are a licensee of the Scudder Marks, provided however, that you agree to use
your best efforts to maintain your license to use and sublicense the Scudder
Marks. The Corporation agrees that it shall have no right to sublicense or
assign rights to use the Scudder Marks, shall acquire no interest in the Scudder
Marks other than the rights granted herein, that all of the Corporation's uses
of the Scudder Marks shall inure to the benefit of Scudder Trust Company as
owner and licensor of the Scudder Marks (the "Trademark Owner"), and that the
Corporation shall not challenge the validity of the Scudder Marks or the
Trademark Owner's ownership thereof. The Corporation further agrees that all
services and products it offers in connection with the Scudder Marks shall meet
commercially reasonable standards of quality, as may be determined by you or the
Trademark Owner from time to time, provided that you acknowledge that the
services and products the Corporation rendered during the one-year period
preceding the date of this Agreement are acceptable. At your reasonable request,
the Corporation shall cooperate with you and the Trademark Owner and shall
execute and deliver any and all documents necessary to maintain and protect
(including but not limited to in connection with any trademark infringement
action) the Scudder Marks and/or enter the Corporation as a registered user
thereof. At such time as this Agreement or any other investment management
agreement shall no longer be in effect between you (or your successor) and the
Corporation, or you no longer are a licensee of the Scudder Marks, the
Corporation shall (to the extent that, and as soon as, it lawfully can) cease to
use the Fund Name or any other name indicating that it is advised by, managed by
or otherwise connected with you (or any organization which shall have succeeded
to your business as investment manager) or the Trademark Owner. In no event
shall the Corporation use the Scudder Marks or any other name or mark
confusingly similar thereto (including, but not limited to, any name or mark
that includes the name "Scudder") if this Agreement or any other investment
advisory agreement between you (or your successor) and the Fund is terminated.
3. Portfolio Management Services. As manager of the assets of the Fund, you
shall provide continuing investment management of the assets of the Fund in
accordance with the investment objectives, policies and restrictions set forth
in the Prospectus and SAI; the applicable provisions of the 1940 Act and the
Internal Revenue Code of 1986, as amended, (the "Code") relating to regulated
investment companies and all rules and regulations thereunder; and all other
applicable federal and state laws and regulations of which you have knowledge;
subject always to policies and instructions adopted by the Corporation's Board
of Directors. In connection therewith, you shall use reasonable efforts to
manage the Fund so that it will qualify as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder. The Fund shall have
the benefit of the investment analysis and research, the review of current
economic conditions and trends and the consideration of long-range investment
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policy generally available to your investment advisory clients. In managing the
Fund in accordance with the requirements set forth in this section 3, you shall
be entitled to receive and act upon advice of counsel to the Corporation or
counsel to you. You shall also make available to the Corporation promptly upon
request all of the Fund's investment records and ledgers as are necessary to
assist the Corporation to comply with the requirements of the 1940 Act and other
applicable laws. To the extent required by law, you shall furnish to regulatory
authorities having the requisite authority any information or reports in
connection with the services provided pursuant to this Agreement which may be
requested in order to ascertain whether the operations of the Corporation are
being conducted in a manner consistent with applicable laws and regulations.
You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by the Fund and place orders
with broker-dealers, foreign currency dealers, futures commission merchants or
others pursuant to your determinations and all in accordance with Fund policies
as expressed in the Registration Statement. You shall determine what portion of
the Fund's portfolio shall be invested in securities and other assets and what
portion, if any, should be held uninvested.
You shall furnish to the Corporation's Board of Directors periodic reports
on the investment performance of the Fund and on the performance of your
obligations pursuant to this Agreement, and you shall supply such additional
reports and information as the Corporation's officers or Board of Directors
shall reasonably request.
4. Administrative Services. In addition to the portfolio management services
specified above in section 3, you shall furnish at your expense for the use of
the Fund such office space and facilities in the United States as the Fund may
require for its reasonable needs, and you (or one or more of your affiliates
designated by you) shall render to the Corporation administrative services on
behalf of the Fund necessary for operating as an open-end investment company and
not provided by persons not parties to this Agreement including, but not limited
to, preparing reports to and meeting materials for the Corporation's Board of
Directors and reports and notices to Fund shareholders; supervising, negotiating
contractual arrangements with, to the extent appropriate, and monitoring the
performance of, accounting agents, custodians, depositories, transfer agents and
pricing agents, accountants, attorneys, printers, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be necessary or
desirable to Fund operations; preparing and making filings with the Securities
and Exchange Commission (the "SEC") and other regulatory and self-regulatory
organizations, including, but not limited to, preliminary and definitive proxy
materials, post-effective amendments to the Registration Statement, semi-annual
reports on Form N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act;
overseeing the tabulation of proxies by the Fund's transfer agent; assisting in
the preparation and filing of the Fund's federal, state and local tax returns;
preparing and filing the Fund's federal excise tax return pursuant to Section
4982 of the Code; providing assistance with investor and public relations
matters; monitoring the valuation of portfolio securities, the calculation of
net asset value; monitoring the registration of Shares of the Fund under
applicable federal and state securities laws; maintaining or causing to be
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maintained for the Fund all books, records and reports and any other information
required under the 1940 Act, to the extent that such books, records and reports
and other information are not maintained by the Fund's custodian or other agents
of the Fund; assisting in establishing the accounting policies of the Fund;
assisting in the resolution of accounting issues that may arise with respect to
the Fund's operations and consulting with the Fund's independent accountants,
legal counsel and the Fund's other agents as necessary in connection therewith;
establishing and monitoring the Fund's operating expense budgets; reviewing the
Fund's bills; processing the payment of bills that have been approved by an
authorized person; assisting the Fund in determining the amount of dividends and
distributions available to be paid by the Fund to its shareholders, preparing
and arranging for the printing of dividend notices to shareholders, and
providing the transfer and dividend paying agent, the custodian, and the
accounting agent with such information as is required for such parties to effect
the payment of dividends and distributions; and otherwise assisting the
Corporation as it may reasonably request in the conduct of the Fund's business,
subject to the direction and control of the Corporation's Board of Directors.
Nothing in this Agreement shall be deemed to shift to you or to diminish the
obligations of any agent of the Fund or any other person not a party to this
Agreement which is obligated to provide services to the Fund.
5. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 5, you shall pay the compensation and expenses of all
Directors, officers and executive employees of the Corporation (including the
Fund's share of payroll taxes) who are affiliated persons of you, and you shall
make available, without expense to the Fund, the services of such of your
directors, officers and employees as may duly be elected officers of the
Corporation, subject to their individual consent to serve and to any limitations
imposed by law. You shall provide at your expense the portfolio management
services described in section 3 hereof and the administrative services described
in section 4 hereof.
You shall not be required to pay any expenses of the Fund other than those
specifically allocated to you in this section 5. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Fund's Directors and
officers as are directors, officers or employees of you whose services may be
involved, for the following expenses of the Fund: organization expenses of the
Fund (including out-of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Fund advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Fund's custodian or
other agents of the Corporation; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent, custodians,
subcustodians, transfer agents, dividend disbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; expenses of preparing share
certificates and, except as provided below in this section 5, other expenses in
connection with the issuance, offering, distribution, sale, redemption or
repurchase of securities issued by the Fund; expenses relating to investor and
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public relations; expenses and fees of registering or qualifying Shares of the
Fund for sale; interest charges, bond premiums and other insurance expense;
freight, insurance and other charges in connection with the shipment of the
Fund's portfolio securities; the compensation and all expenses (specifically
including travel expenses relating to Corporation business) of Directors,
officers and employees of the Corporation who are not affiliated persons of you;
brokerage commissions or other costs of acquiring or disposing of any portfolio
securities of the Fund; expenses of printing and distributing reports, notices
and dividends to shareholders; expenses of printing and mailing Prospectuses and
SAIs of the Fund and supplements thereto; costs of stationery; any litigation
expenses; indemnification of Directors and officers of the Corporation; costs of
shareholders' and other meetings; and travel expenses (or an appropriate portion
thereof) of Directors and officers of the Corporation who are directors,
officers or employees of you to the extent that such expenses relate to
attendance at meetings of the Board of Directors of the Corporation or any
committees thereof or advisors thereto held outside of Boston, Massachusetts or
New York, New York.
You shall not be required to pay expenses of any activity which is
primarily intended to result in sales of Shares of the Fund if and to the extent
that (i) such expenses are required to be borne by a principal underwriter which
acts as the distributor of the Fund's Shares pursuant to an underwriting
agreement which provides that the underwriter shall assume some or all of such
expenses, or (ii) the Corporation on behalf of the Fund shall have adopted a
plan in conformity with Rule 12b-1 under the 1940 Act providing that the Fund
(or some other party) shall assume some or all of such expenses. You shall be
required to pay such of the foregoing sales expenses as are not required to be
paid by the principal underwriter pursuant to the underwriting agreement or are
not permitted to be paid by the Fund (or some other party) pursuant to such a
plan.
6. Management Fee. For all services to be rendered, payments to be made and
costs to be assumed by you as provided in sections 3, 4 and 5 hereof, the
Corporation on behalf of the Fund shall pay you on the last day of each month
the unpaid balance of a fee equal to the excess of (a) 1/12 of 1 percent of the
average daily net assets as defined below of the Fund for such month; over (b)
the greater of (i) the amount by which the Fund's expenses exceed the lowest
applicable expense limitation (as more fully described below) or (ii) any
compensation waived by you from time to time (as more fully described below).
You shall be entitled to receive during any month such interim payments of your
fee hereunder as you shall request, provided that no such payment shall exceed
75 percent of the amount of your fee then accrued on the books of the Fund and
unpaid.
The "average daily net assets" of the Fund shall mean the average of the
values placed on the Fund's net assets as of 4:00 p.m. (New York time) on each
day on which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully determines
the value of its net assets as of some other time on each business day, as of
such time. The value of the net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Articles and the Registration
Statement. If the determination of net asset value does not take place for any
particular day, then for the purposes of this section 6, the value of the net
assets of the Fund as last determined shall be deemed to be the value of its net
assets as of 4:00 p.m. (New York time), or as of such other time as the value of
the net assets of the Fund's portfolio may be lawfully determined on that day.
If the Fund determines the value of the net assets of its portfolio more than
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once on any day, then the last such determination thereof on that day shall be
deemed to be the sole determination thereof on that day for the purposes of this
section 6.
You agree that your gross compensation for any fiscal year shall not be
greater than an amount which, when added to the other expenses of the Fund,
shall cause the aggregate expenses of the Fund to equal the maximum expenses
under the lowest applicable expense limitation established pursuant to the
statutes or regulations of any jurisdiction in which the Shares of the Fund may
be qualified for offer and sale. Except to the extent that such amount has been
reflected in reduced payments to you, you shall refund to the Fund the amount of
any payment received in excess of the limitation pursuant to this section 6 as
promptly as practicable after the end of such fiscal year, provided that you
shall not be required to pay the Fund an amount greater than the fee paid to you
in respect of such year pursuant to this Agreement. As used in this section 6,
"expenses" shall mean those expenses included in the applicable expense
limitation having the broadest specifications thereof, and "expense limitation"
means a limit on the maximum annual expenses which may be incurred by an
investment company determined (i) by multiplying a fixed percentage by the
average, or by multiplying more than one such percentage by different specified
amounts of the average, of the values of an investment company's net assets for
a fiscal year or (ii) by multiplying a fixed percentage by an investment
company's net investment income for a fiscal year. The words "lowest applicable
expense limitation" shall be construed to result in the largest reduction of
your compensation for any fiscal year of the Fund; provided, however, that
nothing in this Agreement shall limit your fees if not required by an applicable
statute or regulation referred to above in this section 6.
You may waive all or a portion of your fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of your services. You
shall be contractually bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Fund's expenses, as if such waiver
or limitation were fully set forth herein.
7. Avoidance of Inconsistent Position; Services Not Exclusive. In connection
with purchases or sales of portfolio securities and other investments for the
account of the Fund, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of the Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.
Your services to the Fund pursuant to this Agreement are not to be deemed
to be exclusive and it is understood that you may render investment advice,
management and services to others. In acting under this Agreement, you shall be
an independent contractor and not an agent of the Corporation.
8. Limitation of Liability of Manager. As an inducement to your undertaking
to render services pursuant to this Agreement, the Corporation agrees that you
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shall not be liable under this Agreement for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with the matters to which
this Agreement relates, provided that nothing in this Agreement shall be deemed
to protect or purport to protect you against any liability to the Corporation,
the Fund or its shareholders to which you would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of your
duties, or by reason of your reckless disregard of your obligations and duties
hereunder. Any person, even though also employed by you, who may be or become an
employee of and paid by the Fund shall be deemed, when acting within the scope
of his or her employment by the Fund, to be acting in such employment solely for
the Fund and not as your employee or agent.
9. Duration and Termination of This Agreement. This Agreement shall remain in
force until September 30, 1997, and continue in force from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of the Directors who are not
parties to this Agreement or interested persons of any party to this Agreement,
cast in person at a meeting called for the purpose of voting on such approval,
and (b) by the Directors of the Corporation, or by the vote of a majority of the
outstanding voting securities of the Fund. The aforesaid requirement that
continuance of this Agreement be "specifically approved at least annually" shall
be construed in a manner consistent with the 1940 Act and the rules and
regulations thereunder.
This Agreement may be terminated with respect to the Fund at any time,
without the payment of any penalty, by the vote of a majority of the outstanding
voting securities of the Fund or by the Corporation's Board of Directors on 60
days' written notice to you, or by you on 60 days' written notice to the
Corporation. This Agreement shall terminate automatically in the event of its
assignment.
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved by the vote of a majority of the outstanding voting
securities of the Fund and by the Corporation's Board of Directors, including a
majority of the Directors who are not parties to this Agreement or interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval.
11. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
In interpreting the provisions of this Agreement, the definitions contained
in Section 2(a) of the 1940 Act (particularly the definitions of "affiliated
person," "assignment" and "majority of the outstanding voting securities"), as
from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the SEC by any rule, regulation or order.
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This Agreement shall be construed in accordance with the laws of the State
of Maryland, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, or in a manner which would cause the Fund to
fail to comply with the requirements of Subchapter M of the Code.
This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Corporation on behalf of the Fund.
If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Corporation, whereupon this letter shall become a binding
contract effective as of the date of this Agreement.
Yours very truly,
SCUDDER MUTUAL FUNDS, INC.,
on behalf of Scudder Gold Fund
By: ______________________________
President
The foregoing Agreement is hereby accepted as of the date thereof.
SCUDDER, STEVENS & CLARK, INC.
By: ______________________________
Managing Director
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EXHIBIT B
SCUDDER MUTUAL FUNDS, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
(Under Section 2-609 of Corporations and Associations Article)
Scudder Mutual Funds, Inc., a Maryland corporation having its principal
office in New York, New York and having The Corporation Trust Incorporated as
its resident agent located at 32 South Street, Baltimore, Maryland 21202
(hereinafter called the "Corporation"), hereby certifies to the State Department
of Assessments and Taxation of Maryland that:
1. The Corporation desires to amend and restate as hereinafter provided its
Charter as currently in effect. The provisions set forth in these Articles of
Amendment and Restatement are all the provisions of the Charter of the
Corporation as currently in effect.
2. The Charter of the Corporation is hereby amended, by striking Articles II,
III, IV, V, VI, VII, VIII, and IX in their entirety and substituting in lieu
thereof the following:
"Second: Name.
The name of the Corporation is SCUDDER MUTUAL FUNDS, INC.
"Third: Corporate Purposes.
The purpose or purposes for which the Corporation is formed is to act as an
investment company under the federal Investment Company Act of 1940, and to
exercise and enjoy all the powers, rights and privileges granted to, or
conferred upon, corporations by the Maryland General Corporation Law. The
Corporation shall exercise and enjoy all such powers, rights and privileges to
the extent not inconsistent with these Articles of Amendment and Restatement.
"Fourth: Address and Resident Agent.
The post office address of the principal office of the Corporation in the
State of Maryland is:
c/o The Corporation Trust Incorporated
32 South Street
Baltimore, Maryland 21202
The name and post office address of the resident agent of the Corporation in
the State of Maryland is:
The Corporation Trust Incorporated
32 South Street
Baltimore, Maryland 21202
Such resident agent is a Maryland corporation.
"Fifth: Capital Stock.
(1) Authorized Shares. The total number of shares of stock which the
Corporation shall have authority to issue is three billion (3,000,000,000)
shares, par value of one cent ($0.01) per share, such shares having an
aggregate par value of thirty million dollars ($30,000,000).
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(2) Authorization of Stock Issuance. The Board of Directors may authorize
the issuance and sale of capital stock of this Corporation, including stock
of any class or series, from time to time in such amounts and on such terms
and conditions, for such purposes and for such amount or kind of
consideration as the Board of Directors shall determine, subject to any
limits required by then applicable law. All shares shall be issued on a fully
paid and non-assessable basis.
All persons who shall acquire shares of capital stock in the Corporation
shall acquire the same subject to the provisions of these Articles of
Amendment and Restatement and the By-Laws of the Corporation, as each may be
amended, supplemented and/or restated from time to time.
(3) Fractional Shares. The Corporation may issue fractional shares. Any
fractional share shall carry proportionately the rights of a whole share,
including without limitation the right to vote and the right to receive
dividends.
(4) Power to Classify. The Board of Directors may classify and reclassify
any unissued shares of capital stock into one or more additional or other
classes or series as may be established from time to time by setting or
changing in any one or more respects the preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications or terms or conditions of redemptions of such shares of stock.
Pursuant to such classification or reclassification, the Board of Directors
may increase or decrease the number of authorized shares of stock, or shares
of any existing class or series of stock. Except as otherwise provided
herein, all references herein to capital stock shall apply without
discrimination to the shares of each class or series of stock. Pursuant to
such power, there is hereby established and classified a series comprised of
one hundred million (100,000,000) shares to be known as "Scudder Gold Fund".
(5) Series-General. The relative preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption of each class or series of stock of the
Corporation, including Scudder Gold Fund, shall be as follows, unless
otherwise provided in Articles Supplementary hereto:
(a) Assets Belonging to Class. All consideration received by the
Corporation for the issue or sale of stock of a particular class or series,
together with all assets in which such consideration is invested or
reinvested, all income, earnings, profits and proceeds thereof, including
any proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that class or
series for all purposes, subject only to the rights of creditors and shall
be so recorded on the books of account of the Corporation. Any assets,
income, earnings, profits or proceeds thereof, funds or payments which are
not readily attributable to a particular class or series shall be allocated
to and among any one or more series or classes in such manner and on such
basis as the Board of Directors, in its sole discretion, shall deem fair
and equitable, and items so allocated to a particular series or class shall
belong to that series or class. Each such allocation shall be conclusive
and binding upon the stockholders of all classes and series for all
purposes.
The shares of any subsidiary purchased with the assets of a particular
series or class shall be deemed to be an asset belonging to that series or
class and all income, earnings, profits and proceeds of such subsidiaries,
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including all proceeds derived from the sale, exchange or liquidation
thereof, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong to such
series or class for all purposes and shall be so recorded on the books of
account of the Corporation, subject only to the rights of creditors.
(b) Liabilities Belonging to Class. The assets belonging to each class
or series shall be charged with the liabilities of the Corporation in
respect of that class or series and with all expenses, costs, charges and
reserves attributable to that class or series and shall be so recorded on
the books of account of the Corporation. Any general liabilities, expenses,
costs, charges or reserves of the Corporation which are not readily
identifiable as belonging to any particular class or series shall be
allocated and charges to and among any one or more of the classes or series
in such manner and on such basis as the Board of Directors in its sole
discretion deems fair and equitable, and any items so allocated to a
particular class or series shall be charged to, and shall be a liability
belonging to, that class or series. Each such allocation shall be
conclusive and binding upon the stockholders of all classes and series for
all purposes.
(c) Income. The Board of Directors shall have full discretion, to the
extent not inconsistent with the Maryland General Corporation Law and the
Investment Company Act of 1940, to determine which items shall be treated
as income and which items shall be treated as capital. Each such
determination shall be conclusive and binding. "Income belonging to" a
class or series includes all income, earnings and profits derived from
assets belonging to that class or series, less any expenses, costs, charges
or reserves belonging to that class or series, for the relevant time
period.
(d) Dividends and Distributions. Dividends and distributions on shares
of a particular class or series may be declared and paid with such
frequency, in such form and in such amount as the Board of Directors may
from time to time determine. Dividends may be declared daily or otherwise
pursuant to a standing resolution or resolutions adopted only once or with
such frequency as the Board of Directors may determine, after providing for
actual and accrued liabilities belonging to that class or series.
All dividends on shares of a particular class or series shall be paid
only out of the income belonging to that class or series and capital gains
distributions on shares of the class or series shall be only out of the
capital gains belonging to the class or series. All dividends and
distributions on shares of a particular class or series shall be
distributed pro rata to the shareholders of that class or series held by
such shareholders at the date and time of record established for the
payment of such dividends or distributions, except that in connection with
any dividend or distribution program or procedure the Board of Directors
may determine that no dividend or distribution shall be payable on shares
as to which the shareholder's purchase order and/or payment have not been
received by the time or times established by the Board of Directors under
such program or procedure.
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The Board of Directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends, including dividends designated
in whole or in part as capital gains distributions, amounts sufficient, in
the opinion of the Board of Directors, to enable the corporation or the
class or series to qualify as a regulated investment company under the
Internal Revenue Code of 1986, as amended, or any successor or comparable
statute thereto, and regulations promulgated thereunder, and to reduce or
eliminate liability of the Corporation or the class or series for taxes,
including federal income and excise taxes, but nothing in the foregoing
shall limit the authority of the Board of Directors to make distributions
greater than or less than the amount necessary to qualify as a regulated
investment company or to reduce or eliminate liability of the Corporation
or the class or series for any such taxes.
Dividends and distributions may be paid in cash, property or shares, or
a combination thereof, as determined by the Board of Directors or pursuant
to any program that the Board of Directors may have in effect at the time.
(e) Tax Elections. The Board of Directors shall have the power, in its
discretion, to make such elections as to the tax status of the Corporation
or any series or class of the Corporation as may be permitted or required
by the Internal Revenue code of 1986, as amended, without the vote of
stockholders of the Corporation or any series or class.
(f) Liquidation. At any time there are no shares outstanding for a
particular class or series, the Board of Directors may liquidate such class
or series in accordance with applicable law. In the event of the
liquidation or dissolution of the Corporation, or of a class or series
thereof when there are shares outstanding of the Corporation or of such
class or series, as applicable, the stockholders of such, or of each, class
or series, as applicable, shall be entitled to receive, when and as
declared by the Board of Directors, the excess of the assets of that class
or series over the liabilities of that class or series, determined as
provided herein and including assets and liabilities allocated pursuant to
sections (5)(a) and (5)(b) of this Article Fifth. Any such excess amounts
will be distributed to each stockholder of the applicable class or series
in proportion to the number of outstanding shares of that class or series
held by that stockholder and recorded on the books of the Corporation.
Subject to the requirements of applicable law, dissolution of a class or
series may be accomplished by distribution of assets to stockholders of
that class or series as provided herein, by the transfer of assets of that
class or series to another class or series of the Corporation, by the
exchange of shares of that class or series for shares of another class or
series of the Corporation, or in any other legal manner.
(g) Voting Rights. On each matter submitted to a vote of stockholders,
each holder of a share of capital stock of the Corporation shall be
entitled to one vote for each full share, and a fractional vote for each
fractional share of stock standing in such holder's name on the books of
the Corporation, irrespective of the class or series thereof, and all
shares of all classes and series shall vote together as a single class,
provided that (a) when the Maryland General Corporation Law or the
Investment Company Act of 1940 requires that a class or series vote
separately with respect to a given matter, the separate voting requirements
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of the applicable law shall govern with respect to the affected classes or
series and other classes or series shall vote as a single class and (b)
unless otherwise required by those laws, no class or series shall vote on
any matter which does not affect the interest of that class or series.
(h) Quorum. The presence in person or by proxy of the holders of
one-third of the shares of stock of the Corporation entitled to vote
thereat, without regard to class, shall constitute a quorum at any meeting
of the stockholders, except with respect to any matter which, under
applicable statutes or regulatory requirements, required approval by a
separate vote of one or more classes of stock, in which case the presence
in person or by proxy of the holders of one-third of the shares of stock of
each class required to vote as a class on the matter shall constitute a
quorum. If at any meeting of the stockholders there shall be less than a
quorum present, the stockholders present at such meeting may, without
further notice, adjourn the same from time to time until a quorum shall be
present.
(6) Notwithstanding any provision of the Maryland General Corporation Law
requiring for any purpose a proportion greater than a majority of the votes
of all classes or series, the affirmative vote of the holders of a majority
of the total number of shares of the Corporation, or of a series of the
Corporation, as applicable, outstanding and entitled to vote under such
circumstances pursuant to these Articles of Amendment and Restatement and the
By-Laws of the Corporation shall be effective for such purpose, except to the
extent otherwise required by the Investment Company Act of 1940 and rules
thereunder.
(7) No stockholder of the Corporation shall be entitled as of right to
subscribe for, purchase, or otherwise acquire any shares of any classes or
series, or any other securities of the Corporation which the Corporation
proposes to issue or sell; and any or all of such shares or securities of the
Corporation, whether new or hereafter authorized or created, may be issued,
or may be reissued or transferred if the same have been required, and sold to
such persons, firms, corporations and associations, and for such lawful
consideration, and on such terms as the Board of Directors in its discretion
may determine, without first offering the same, or any thereof, to any said
stockholder.
"Sixth. Transfers of Capital Stock.
(1) Issue of Shares.
(a) The Board of Directors may from time to time issue, reissue, sell
or cause to be reissued and sold any of the Corporation's authorized shares
of capital stock, including any additional shares hereafter authorized and
any shares redeemed or repurchased by the Corporation.
(b) Subject to the requirements of the Maryland General Corporation
Law, the Board of Directors may authorize the issuance of some or all of
the shares of any or all classes or series without certificates and may
establish such conditions as it may determine in connection with the
issuance of certificates.
(c) For any corporate purpose, such as in connection with the
acquisition of all or substantially all the assets or stock of another
investment company or investment trust, the Board of Directors may issue or
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cause to be issued shares of capital stock of the Corporation and accept in
payment therefor, in lieu of cash, assets or other property, either with or
without adjustment for contingent costs or liabilities, provided such
assets or other property are of the character in which the Corporation is
permitted to invest.
(2) Redemption of Shares.
(a) The Board of Directors shall authorize the Corporation to the
extent it has funds or other property legally available therefore and
subject to such reasonable conditions as the Board of Directors may
determine, to permit each holder of shares of capital stock of the
Corporation to redeem all or any part of the shares standing in the name of
such holder on the books of the Corporation, at the applicable redemption
price of such shares, determined in accordance with procedures established
by the Board of Directors of the Corporation from time to time in
accordance with applicable law.
(b) Without limiting the generality of the foregoing, the Board of
Directors may authorize the Corporation, at its option and to the extent
permitted by and in accordance with the conditions of applicable law, to
redeem stock owned by any stockholder under circumstances deemed
appropriate by the Board of Directors in its sole discretion from time to
time, such circumstances including but not limited to (1) failure to
provide the Corporation with a tax identification number, (2) failure to
maintain ownership of a specified minimum number or value of shares of any
class or series of stock of the Corporation, and (3) if necessary, in the
opinion of the Board of Directors of the Corporation, in order to prevent
the Corporation from being deemed a "personal holding company" within the
meaning of the Internal Revenue Code of 1986, as amended, such redemption
to be effected at such a price, at such time and subject to such conditions
as may be required or permitted by applicable law.
(c) Payment for redeemed stock shall be made in cash unless, in the
opinion of the Board of Directors, which shall be conclusive, conditions
exist which make it advisable for the Corporation to make payment wholly or
partially in securities or other property or assets. Payment made wholly or
partially in securities or other property or assets may be delayed to such
reasonable extent, not inconsistent with applicable law, as is reasonably
necessary under the circumstances. No stockholder shall have the right,
except as determined by the Board of Directors, to have his shares redeemed
in such securities, property or other assets.
(d) All rights of a stockholder with respect to a share redeemed,
including the right to receive dividends and distributions with respect to
such share, shall cease as of the time at which the redemption price is to
be paid, except the right of such stockholder to receive payment of such
shares as provided herein.
(e) Notwithstanding any other provisions of this Article, the Board of
Directors may suspend the right of stockholders of any or all classes or
series of shares to require the Corporation to redeem shares held by them
for such periods and to the extent permitted by, or in accordance with, the
Investment Company Act of 1940, and the rules, regulations and orders
issued thereunder. The Board of Directors may, in the absence of a ruling
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by a responsible regulatory official, terminate such suspension at such
time as the Board of Directors, in its discretion, shall deem reasonable,
such determination to be conclusive.
(f) Shares of any class or series which have been redeemed shall
constitute authorized but unissued shares subject to classification and
reclassification as provided in these Articles of Amendment and
Restatement.
(3) Repurchase of Shares. The Board may by resolution from time to time
authorize the Corporation to purchase or otherwise acquire, directly or
through an agent, shares of any class or series of its outstanding stock upon
such terms and conditions and for such consideration as permitted by
applicable law and determined to be reasonable by the Board of Directors and
to take all other steps deemed necessary in connection therewith. Shares so
purchased or acquired shall have the status of authorized but unissued
shares.
(4) Conversion and Exchange. Subject to compliance with the requirements
of the Investment Company Act of 1940, the Board of Directors shall have the
authority to provide that holders of shares of any class or series shall have
the right to convert or exchange said shares into shares of one or more other
classes or series of shares in accordance with such requirements and
procedures as may be established by the Board of Directors.
"Seventh: Board of Directors.
The number of directors of the Corporation shall be five, or such other
number as may from time to time be fixed in the manner provided in the By-laws
of the Corporation, provided that the number of directors shall not be less than
the minimum number required under the Maryland General Corporation Law. The
By-laws may authorize a majority of the directors to increase or decrease the
number of directors within the limits set by these Articles and to fill
vacancies created by an increase in the number of directors. Except as provided
in the By-laws, the election of directors may be conducted in any way approved
at the meeting (whether of stockholders or directors) at which the election is
held, provided that such election shall be by ballot whenever requested by any
person entitled to vote. The names of the directors who are in office and who
shall act as such until their successors are duly elected and qualify are as
follows:
Thomas J. Devine
Keith R. Fox
Daniel Pierce
Gordon Shillinglaw
(Dudley Ladd)
(1) Removal of Directors. Subject to the limits of the Investment Company
Act of 1940 and unless otherwise provided by the By-laws, a director may be
removed with or without cause, by the affirmative vote of a majority of (a)
the Board of Directors, (b) a committee of the Board of Directors appointed
for such purpose, or (c) the stockholders by vote of a majority of the
outstanding shares of the Corporation.
(2) Powers of Directors. In addition to any powers conferred herein or in
the By-laws, the Board of Directors may, subject to any express limitations
contained in these Articles or in the By-laws, exercise the full extent of
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powers conferred by the Maryland General Corporation Law or other applicable
law upon corporations or directors thereof, and the enumeration and
definition of particular powers herein or in the By-laws shall in no way be
deemed to restrict or otherwise limit those lawfully conferred powers. In
furtherance and without limitation of the foregoing, the Board of Directors
shall have power:
(a) to make, alter, amend or repeal from time to time the By-laws of
the Corporation except as otherwise provided by the By-laws, or required by
the Investment Company Act of 1940.
(b) subject to requirements of the Investment Company Act of 1940, to
authorize the Corporation to enter into contracts. Such contracts may be
for any lawful purpose, whether or not such purpose involves delegating
functions normally performed by the Board of Directors, including, but not
limited to, the provisions of investment management for the Corporation's
investment portfolio, the distribution of securities issued by the
Corporation, the administration of the Corporation's affairs, the
provisions of transfer agent services with respect to the Corporation's
shares of capital stock, and the custody of the Corporation's assets. Any
party (including its associates) may be retained in multiple capacities
pursuant to one or more contracts and may also perform services, including
similar or identical services, for others, including other investment
companies. Subject to the requirements of applicable law, such contracts
may provide for compensation to be paid by the Corporation in such amounts,
including payments of multiple amounts for parties (including their
affiliates) acting in multiple capacities, as the Board of Directors shall
determine in its discretion to be proper and reasonable.
(c) to authorize from time to time the payment of compensation to the
Directors for services to the Corporation, including fees for attendance at
meetings of the Board of Directors and committees thereof.
(d) subject to the requirements of applicable law, to establish, in its
absolute discretion, the basis or method, timing and frequency for
determining the value of assets belonging to each class or series and for
determining the net asset value of each share of each class or series for
purposes of sales, redemptions, repurchases or otherwise.
Without limiting the foregoing, the Board of Directors may determine
that the net asset value per share of any class or series should be
maintained at a designated constant value and may adopt procedures, not
inconsistent with applicable law, to accomplish that result. Such
procedures may include a requirement, in the event of a net loss with
respect to the particular class or series from time to time, for automatic
pro rata capital contributions from each stockholder of that class or
series in amounts sufficient to maintain the designated constant share
value.
(e) to determine in accordance with generally accepted accounting
principles and practices what constitutes net profits, earnings, surplus or
net assets in excess of capital, and to determine what accounting periods
shall be used by the Corporation for any purpose; to set apart any funds of
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the Corporation reserves for such purposes as it shall determine and to
abolish the same; to declare and pay any dividends and distributions in
cash, securities or other property from surplus or any funds legally
available therefor, at such intervals as it shall determine; to establish
payment dates for dividends or any other distributions on any basis,
including dates occurring less frequently than the effectiveness of
declarations thereof.
(f) to make such elections, in its discretion, as to the tax status of
the Corporation or any series or class of the Corporation's capital stock
as may be permitted or required by the Internal Revenue Code of 1986, as
amended.
(3) Determination by Board of Directors. Any determination made in good
faith and, in the case of accounting matters, in accordance with generally
accepted accounting principles, by or pursuant to the direction of the Board
of Directors shall be final and shall be binding upon the Corporation and
upon all stockholders, past, present and future, of each class and series.
"Eighth: Reservation of Right to Amend.
The Corporation reserves the right to amend or repeal any provision contained
in these Articles of Amendment and Restatement from time to time and at any time
in the manner now or hereafter prescribed by the laws of the State of Maryland
and all rights herein conferred upon stockholders are granted subject to such
reservation.
"Ninth: Contracts.
The Corporation may enter into any contract with any corporation, firm,
partnership, trust or association, although one or more of the Directors,
officers or shareholders of the Corporation may be an officer, director,
partner, trustee, shareholder or member of, or have an interest in, such other
party to the contracts, and no such contract shall be invalidated or rendered
voidable by reason of the existence of any such relationship or interest, nor
shall any person holding such relationship be liable merely by reason of such
relationship or interest for any loss or expense to the Corporation under or by
reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair to the Corporation.
"Tenth: Liability and Indemnification.
To the fullest extent permitted by the Maryland General Corporation Law and
the Investment Company Act of 1940, no director or officer of the Corporation
shall be liable to the Corporation or to its stockholders for damages. The
limitation on liability applies to events occurring at the time a person serves
as a director or officer of the Corporation, whether or not such person is a
director or officer at the time of any proceeding in which liability is
asserted. No amendment to these Articles of Amendment and Restatement or repeal
of any of its provisions shall limit or eliminate the benefits provided to
directors and officers under this provision with respect to any act or omission
which occurred prior to such amendment or repeal.
The Corporation, including its successors and assigns, shall indemnify its
directors and officers and make advance payment of related expenses to the
fullest extent permitted, and in accordance with the procedures required by
Maryland law, including Section 2-418 of the Maryland General Corporation Law,
as may be amended from time to time, and the Investment company Act of 1940. The
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By-laws may provide that the Corporation shall indemnify its employees and/or
agents in any manner and within such limits as permitted by applicable law. Such
indemnification shall be in addition to any other right or claim to which any
director, officer, employee or agent may otherwise be entitled.
The Corporation may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the Corporation or is or
was serving at the request of the Corporation as a director, officer, partner,
trustee, employee or agent of another foreign or domestic corporations,
partnership, joint venture, trust or other enterprise or employee benefit plan
against any liability asserted against and incurred by such person in any such
capacity or arising out of such person's position, whether or not the
Corporation would have had the power to indemnify against such liability.
The rights provided to any person by this Article shall be enforceable
against the Corporation by such person who shall be presumed to have relied upon
such rights in serving or continuing to serve in the capacities indicated
herein. No amendment of these Articles of Amendment and Restatement shall impair
the rights of any person arising at any time with respect to events occurring
prior to such amendment.
Nothing in these Articles of Amendment and Restatement shall be deemed to (i)
require a waiver of compliance with any provision of the Securities Act of 1933,
as amended, or the Investment Company Act of 1940, as amended, or of any valid
rule, regulation or order of the Securities and Exchange Commission under those
Acts or (ii) protect any director or officer of the Corporation against any
liability to the Corporation or its stockholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of his or her duties or by reason of his or her reckless disregard
of his or her obligations and duties hereunder.
"Eleventh: Stockholders.
(1) Meetings of Stockholders. Unless an election of directors is required
by the Investment Company Act of 1940, the Corporation shall not be required
to hold an annual meeting of stockholders in any year.
(2) Inspection of Records. Stockholders of the Corporation shall have only
such rights to inspect and copy the records, documents, accounts and books of
the Corporation and to request statements regarding its affairs as are
provided by the Maryland General Corporation Law, subject to such reasonable
regulation, not contrary to the General Laws of the State of Maryland, as the
Board of Directors may from time to time adopt regarding the conditions and
limits of such rights.
(3) No Liability. The stockholders of the Corporation shall not be liable
for, and their private property shall not be subject to, claim, levy or other
encumbrance on account of the debts or liabilities of the Corporation, to any
extent whatsoever.
(4) Owner of Record. The Corporation shall be entitled to treat the person
in whose name any share of the capital stock of the Corporation is registered
as the owner thereof for purposes of dividends and other distributions in the
course of business or in the course of recapitalization, sale of the property
and assets of the Corporation, or otherwise, and for the purpose of votes,
approvals and consents by stockholders and for the purpose of notices to
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stockholder, and for all other purposes whatsoever; and the Corporation shall
not be bound to recognize any equitable or other claim to or interest in such
share, on the part of any other person, whether or not the Corporation shall
have notice thereof, save as expressly required by law."
3. The number of directors of the Corporation is five, and the names of the
directors are set forth above in Article Seventh.
4. The Board of Directors of the Corporation, at a meeting duly convened and
held on June 4, 1996, adopted a resolution in which was set forth the foregoing
amendment and restatement of the Charter, declaring that said amendment and
restatement of the Charter was advisable, and directing that it be submitted for
consideration at a special meeting of the stockholders of the Corporation.
5. The amendment and restatement of the Charter as hereinabove set forth was
duly approved by the stockholders of the Corporation at a special meeting held
on September ___, 1996.
6. The Articles of Amendment and Restatement shall become effective upon filing
with the State Department of Assessments and Taxation of Maryland.
IN WITNESS WHEREOF, SCUDDER MUTUAL FUNDS, INC. has caused these present to
be signed in its name and on its behalf by its President and witnessed by its
Vice President and Secretary on ________, 1996.
Scudder Mutual
Funds, Inc.
By:____________________________
Daniel Pierce, President
Witness:
- -------------------------------------------------
Thomas F. McDonough, Vice President and Secretary
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<TABLE>
<CAPTION>
PROXY SCUDDER GOLD FUND PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Special Meeting of Stockholders -- September 4, 1996
The undersigned hereby appoints Daniel Pierce, Dudley Ladd and Keith R. Fox and each of them, the proxies of the undersigned,
with the power of substitution to each of them, to vote all shares of Scudder Gold Fund, which the undersigned is entitled to vote
at the Special Meeting of Stockholders of Scudder Gold Fund 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 Wednesday, September 4, 1996 at 2:00 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 numbered item listed below.
<S> <C>
1. The election of Directors;
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) __ to vote for all nominees listed below __
Nominees: Daniel Pierce, Thomas J. Devine, Keith R. Fox, Dr. Gordon Shillinglaw and Dudley Ladd
(INSTRUCTION: To withhold authority to vote for any individual nominee, write that nominee's name on the space
provided below.) ______________________________________________
2. Approval of a new Investment Management Agreement between the Fund and FOR __ AGAINST __ ABSTAIN __
Scudder, Stevens & Clark, Inc.; (continued on other side)
<PAGE>
3. Approval of Articles of Amendment and Restatement to the Fund's Articles FOR __ AGAINST __ ABSTAIN __
of Incorporation, as amended;
4. Ratification of the selection of Coopers & Lybrand L.L.P. as the Fund's FOR __ AGAINST __ ABSTAIN __
independent accountants;
5. Approval of the elimination, amendment and/or reclassification of certain FOR __ WITH- __ FOR ALL __
fundamental investment restrictions. HOLD EXCEPT
If you do not wish your shares voted "FOR" a particular Amendment, mark the
"FOR ALL EXCEPT" box and strike a line through that Amendment's letter.
Your shares shall be voted for the remaining Amendments. A B C D E F G H I J K
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 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 Stockholder)
---------------------------------------------------------
(Signature of joint owner, if any)
Date , 1996
----------------------------
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
NO POSTAGE IS REQUIRED
</TABLE>
