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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
[_] Fee paid previously with preliminary materials:
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[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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[SCUDDER INVESTMENTS SM LOGO]
IMPORTANT NEWS FOR SHAREHOLDERS OF
SCUDDER GOLD FUND
FOR ALL SHAREHOLDERS
While we encourage you to read the full text of the enclosed Proxy Statement,
here's a brief overview of some matters affecting your Fund that will be the
subject of a shareholder vote.
Q: WHAT IS HAPPENING?
A: Zurich Scudder Investments, Inc. (formerly, Scudder Kemper Investments,
Inc.) ("Scudder"), your fund's investment manager, has proposed a
Research and Advisory Agreement between Scudder Gold Fund, Scudder and
Scudder Investments Australia Limited ("SIAL"). SIAL is a wholly-owned
subsidiary of Scudder. The proposed agreement requires shareholder
approval.
Q: WHAT ISSUES AM I BEING ASKED TO VOTE ON?
A: As described in the enclosed proxy statement, you are asked to approve
the proposed Research and Advisory Agreement with SIAL, and an amended
investment management agreement with Scudder. After reviewing the
proposals, your fund's board has determined that these actions are in
the best interest of the funds' shareholders. The Board recommends that
you read the enclosed materials carefully and vote in favor of each
proposal.
Q: HOW WOULD THE AGREEMENT WITH SIAL BENEFIT THE FUND?
A: The agreement would enable Scudder Gold Fund to take advantage of the
extensive knowledge and experience within SIAL regarding the precious
metals industry. Moreover, the Fund should benefit from having a
sub-investment adviser (i.e., SIAL) in a country with a recognized
resources capital markets base. This may provide an opportunity for
enhanced investment performance by improving the quality and quantity
of investment research provided to the Fund's portfolio managers. You
will find more detailed information regarding SIAL and the proposal in
the enclosed proxy statement.
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Q: WHY IS A NEW INVESTMENT MANAGEMENT AGREEMENT BEING PROPOSED?
A: The purpose of the new Investment Management Agreement is solely to
allow for the appointment of SIAL as a sub-investment adviser to the
Fund. The new agreement is substantially identical to the agreement
currently in place with the addition of revisions reflecting Scudder's
name changes, provisions to allow Scudder to retain sub-investment
adviser(s) and new effective and termination dates. The current
Investment Advisory Agreement is described in the enclosed proxy
statement.
Q: WOULD THE PROPOSED AGREEMENT WITH SIAL INCREASE MY FUND'S MANAGEMENT
FEES OR EXPENSES?
A: No. SIAL would be paid by Scudder directly out of the fees Scudder
receives from the Fund.
Q: WHOM SHOULD I CALL FOR ADDITIONAL INFORMATION ABOUT THIS PROXY
STATEMENT?
A: Please call Shareholder Communications Corporation, your Fund's
information agent, at 1-877-748-9122.
SCUDDER GOLD FUND
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SCUDDER MUTUAL FUNDS, INC.
Scudder Gold Fund
Your Vote is Important
Dear Shareholder:
The Board of Directors (the "Board") of Scudder Mutual Funds, Inc. (the
"Company"), on behalf of its series, the Scudder Gold Fund (the "Fund"), has
recently reviewed and unanimously endorsed a proposal to retain Scudder
Investments Australia Limited ("SIAL") as sub-investment adviser to the Fund. We
are pleased to invite you to attend a special meeting of shareholders to
consider approval of a Research and Advisory Agreement (the "Sub-Investment
Management Agreement") between and among the Company, on behalf of the Fund,
Zurich Scudder Investments, Inc. (formerly, Scudder Kemper Investments, Inc.),
the Fund's investment adviser ("Scudder"), and SIAL. SIAL is a wholly-owned
subsidiary of Scudder.
The Board of the Company believes that the retention of SIAL is in the best
interests of the Fund's shareholders and will enable the Fund to capitalize on
SIAL's investment expertise. The Board believes that the Fund will benefit from
the extensive knowledge and experience within SIAL regarding the precious metals
industry. Moreover, the Board has determined that the Fund will benefit from
having a sub-investment adviser (i.e., SIAL) in a country with a recognized
resources capital markets base, and that consequently, the retention of SIAL may
improve the quantity and quality of relevant research received by the Fund. The
Board believes that this may provide the Fund with the opportunity for enhanced
investment performance. As SIAL will be paid by Scudder directly out of the fees
received by Scudder from the Fund, there will be no increase in the fees paid or
expenses incurred by the Fund's shareholders.
In connection with the proposed retention of SIAL, Scudder has also
proposed that its Investment Management Agreement with the Company, on behalf of
the Fund, be amended to allow explicitly for the retention of SIAL by Scudder.
Any other business that may properly come before the Special Meeting will also
be resolved.
The costs associated with this proxy are being paid for by Scudder and not
by the Fund.
The proposal will NOT result in any increase in the fees paid or expenses
otherwise incurred by the shareholders.
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The Board members of your Fund believe that the proposals set forth above
are important and recommend that you read the enclosed materials carefully and
then vote for the proposals.
Detailed information about the proposals may be found in the attached Proxy
Statement. You are entitled to vote at the meeting and any adjournments thereof
if you owned shares of the Fund at the close of business on December 21, 2000.
If you attend the meeting, you may vote your shares in person. If you do not
expect to attend the meeting, please complete, date, sign and return the
enclosed proxy in the enclosed postage paid envelope. If you prefer, you can fax
the proxy card to Shareholder Communication Corporation, the Fund's proxy
solicitor, at 1-800-733-1885. Voting by fax will reduce the time and costs
associated with the proxy solicitation.
Whichever voting method you use, please read the full text of the proxy
statement before you vote.
If you have any questions regarding the proposals, please feel free to call
1-877-748-9122.
It is important that your voting instructions be received promptly.
Respectfully,
/s/ Linda C. Coughlin
Linda C. Coughlin
Chairperson and President
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INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense involved in validating your vote if you fail
to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to the name shown in the registration on the
proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of
registration.
For example:
Registration Valid Signatures
------------ ---------------
Corporate Accounts
(1) ABC Corp. ......................... ABC Corp.
(2) ABC Corp. ......................... John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer ........... John Doe
(4) ABC Corp. Profit Sharing Plan ..... John Doe, Trustee
Trust Accounts
(1) ABC Trust ......................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 .................... Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA ..... John B. Smith
(2) John B. Smith ..................... John B. Smith, Jr., Executor
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SCUDDER MUTUAL FUNDS, INC.
Scudder Gold Fund
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Notice of Special Meeting Of Shareholders
March 14, 2001
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Dear Shareholders:
Please take notice that a Special Meeting of Shareholders (the "Special
Meeting") of Scudder Gold Fund (the "Fund"), a series of Scudder Mutual Funds,
Inc. (the "Company"), will be held on March, 14, 2001, at 4:00 p.m., Eastern
Time, at the offices of Zurich Scudder Investments, Inc. (formerly), Scudder
Kemper Investments, Inc.), 13th Floor, Two International Place, Boston,
Massachusetts 02110 for the following purposes:
PROPOSAL I: To approve a Research and Advisory Agreement ("the Sub-
Investment Management Agreement") between and among the Company,
on behalf of the Fund, Zurich Scudder Investments, Inc., the
Fund's investment adviser ("Scudder"), and Scudder Investments
Australia Limited ("SIAL").
PROPOSAL II: To approve the Amended and Restated Investment Management
Agreement (the "New Investment Management Agreement") between
the Company, on behalf of the Fund, and Scudder.
PROPOSAL III: To transact such other business as may properly come before the
Special Meeting or any adjournment thereof.
The Board of Directors of the Company unanimously recommends that the
Fund's shareholders vote in favor of Proposals I and II.
Holders of record shares of the Fund at the close of business on December
21, 2000 are entitled to vote at the Special Meeting and at any adjournment(s)
thereof. As a convenience to shareholders, you can now vote in any of three
ways:
o By mail, with the enclosed proxy card(s);
o By faxing the enclosed proxy card to Shareholder Communications
Corporation at 1-800-733-1885; or
o In person at the Special Meeting.
It is important that proxies be returned promptly.
If you have any questions regarding the proposals, please feel free to call
1-877-748-9122.
By Order of the Board of Directors,
/s/ John Millette
John Millette
Vice President and Secretary
January 5, 2001
Your prompt attention to the enclosed proxy will help to avoid
the expense of further solicitation.
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SCUDDER MUTUAL FUNDS, INC.
Scudder Gold Fund
345 Park Avenue
New York, New York 10154
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 14, 2001
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Scudder Mutual Funds, Inc.
(the "Company"), on behalf of Scudder Gold Fund (the "Fund"), for use at the
Special Meeting of Shareholders of the Fund, to be held at the offices of Zurich
Scudder Investments, Inc. (formerly, Scudder Kemper Investments, Inc.), 13th
Floor, Two International Place, Boston, Massachusetts 02110, on March, 14, 2001,
at 4:00 p.m., Eastern Time, and at any and all adjournments thereof (the
"Special Meeting").
This Proxy Statement, Notice of Special Meeting and the proxy card are
first being mailed to shareholders on or about January 8, 2001 or as soon as
practicable thereafter. Any shareholder giving a proxy has the power to revoke
it by mail (addressed to Proxy Tabulaters, P.O. Box 9122, Hingham, MA
02043-9717), in person at the Special Meeting by executing a superseding proxy
or by submitting a notice of revocation. All properly executed proxies received
in time for the Special Meeting will be voted as specified in the proxy, or, if
no specification is made, in favor of the proposal referred to in the Proxy
Statement.
The presence at any Special Meeting, in person or by proxy, of the holders
of at least one-third of the shares entitled to be cast of the Fund shall be
necessary and sufficient to constitute a quorum. In the event that the necessary
quorum to transact business or the vote required to approve or reject the
proposal is not obtained at the Special Meeting, the persons named as proxies
may propose one or more adjournments of the Special Meeting in accordance with
applicable law to permit further solicitation of proxies with respect to the
proposal. Any such adjournment will require the affirmative vote of the holders
of a majority of the Fund's shares present in person or by proxy at the Special
Meeting. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor for that proposal and
will vote against any such adjournment those proxies to be voted against that
proposal.
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For purposes of determining the presence of a quorum for transacting
business at the Special Meeting, abstentions and broker "non-votes" will be
treated as shares that are present but which have not been voted. Broker
non-votes are proxies received 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.
Approval of the proposals will require the affirmative vote of a "majority
of the outstanding voting securities" of the Fund ("Majority Vote"). "Majority
Vote" for purposes of this proxy statement, and under the Investment Company Act
of 1940, as amended (the "1940 Act"), means the lesser of (i) 67% of the shares
represented at a meeting at which more than 50% of the outstanding shares of the
Fund are represented or (ii) more than 50% of the outstanding shares of the
Fund. If the shareholders of the Fund should fail to approve the Sub-Investment
Management Agreement or the New Investment Management Agreement, the Board shall
consider appropriate action with respect to such non-approval of the
Sub-Investment Management Agreement and/or the New Investment Management
Agreement.
Abstentions and broker non-votes will have the effect of votes "against"
the proposal for purposes of tabulating votes necessary for each proposal's
approval. As noted above, properly executed proxies in which no specification is
made will be voted in favor of the proposal.
The Company is an open-end investment company offering the shares of common
stock of multiple series, one of which series reflects interests in the Fund.
Each full share outstanding is entitled to one vote and each fractional share
outstanding is entitled to a proportionate share of one vote. As of December 21,
2000 (the "Record Date"), the Fund had 51,809,347 outstanding shares.
The persons who owned more than 5% of the Fund's outstanding shares as of
the Record Date, to the knowledge of the Company, are set forth in APPENDIX A
hereto.
The Fund provides periodic reports to all of its shareholders which
highlight relevant information, including investment results and a review of
portfolio changes. You may receive an additional copy of the most recent annual
report for the Fund and a copy of any more recent semi-annual report, without
charge, by calling 1-800-SCUDDER or by writing to Scudder P.O. Box 2291 Boston,
MA 02107-2291.
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PROPOSAL I
APPROVAL OF A SUB-INVESTMENT
MANAGEMENT AGREEMENT WITH SIAL
Introduction
The shareholders of the Fund will be asked at the Special Meeting to
approve a Research and Advisory Agreement (the "Sub-Investment Management
Agreement") between and among the Company, on behalf of the Fund, Zurich Scudder
Investments, Inc. (formerly, Scudder Kemper Investments, Inc.), the Fund's
investment adviser ("Scudder"), and Scudder Investments Australia Limited
("SIAL"). The Sub-Investment Management Agreement was unanimously approved by
the Board of the Company, including all of the Directors who are not parties to
the Sub-Investment Management Agreement or "interested persons" (as defined
under the 1940 Act) of any such parties (the "Non-Interested Directors"), at a
meeting held on November 13, 2000.
At that meeting, Scudder presented the Board with a proposal to retain
SIAL, its wholly-owned subsidiary, to provide sub-investment advisory services
with respect to the Fund. In light of the presentation by Scudder regarding
SIAL, the Board of the Company believes that the retention of SIAL is in the
best interests of the Fund's shareholders as it will enable the Fund to
capitalize on SIAL's investment expertise. The Board further believes that the
Fund will benefit from the extensive knowledge and experience within SIAL
regarding the precious metals industry. Moreover, the Board has determined that
the Fund will benefit from having a sub-investment adviser (i.e., SIAL) in a
country with a recognized resources capital markets base, and that consequently,
the retention of SIAL may improve the quantity and quality of relevant research
received by the Fund. The Board believes that this may provide the Fund with the
opportunity for enhanced investment performance. As SIAL will be paid by Scudder
directly out of the fees received by Scudder from the Fund under the New
Investment Management Agreement (discussed below), there will be no increase in
the fees paid or expenses incurred by the Fund's shareholders.
The Sub-Investment Management Agreement as unanimously approved by the
Board is now being submitted for approval by the shareholders of the Fund. If it
is approved by a Majority Vote of the outstanding shares of the Fund, it will
continue in effect until September 30, 2002, and will continue from year to year
thereafter, subject to approval annually by the Board or by a Majority Vote of
the outstanding shares of the Fund, and also, in either event, approval by a
majority of the Non-Interested Directors at a meeting called for the purpose of
voting on such approval. If the shareholders of the Fund should fail to approve
the Sub-Investment Management Agreement, the Board shall consider appropriate
action
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with respect to such non-approval of the Sub-Investment Management Agreement.
A form of the Sub-Investment Management Agreement is attached as APPENDIX
B.
Board Evaluation and Recommendation
In determining whether it was appropriate to approve the Sub-Investment
Management Agreement and to recommend approval to shareholders, the Board of the
Company, including the Non-Interested Directors, considered the recommendation
of Scudder and various information and materials provided by each of Scudder and
SIAL. The Board considered the benefits to the Fund of approving the
Sub-Investment Management Agreement given the extensive knowledge and experience
within SIAL regarding the precious metals industry, as well as SIAL's investment
process. The Board also carefully considered that, given the increased
complexity of the domestic and international precious metals markets, the
retention of SIAL could expand the universe of issuers and countries from which
investment opportunities can be sought. Moreover, the Board determined that the
retention of a sub-investment adviser (i.e., SIAL) in a country with a
recognized resources capital markets base may improve both the quantity and
quality of relevant research, which in turn may provide the Fund with the
opportunity for enhanced investment performance.
Description of Sub-Investment Management Agreement
The Sub-Investment Management Agreement requires SIAL to furnish Scudder
with such information, investment recommendations, advice and assistance as
Scudder may from time to time reasonably request. In addition, for the benefit
of the Fund, SIAL generally agrees to pay the fees and expenses of any directors
or officers of the Company who are directors, officers or employees of SIAL or
of any of SIAL's affiliates. Pursuant to the Sub-Investment Management
Agreement, Scudder has agreed to pay SIAL, as compensation for the services to
be rendered by SIAL thereunder, a monthly fee which, on an annual basis, is
equal to 0.35% per annum of the value of the Fund's average monthly net assets.
Scudder and SIAL have agreed that the services to be provided by SIAL to Scudder
are not to be deemed exclusive and SIAL is free to render similar services to
others, provided that the nature and quality of services to be provided to the
Fund pursuant to the Sub-Investment Management Agreement are not be adversely
affected. The Sub-Investment Management Agreement will remain in effect for an
initial period ending September 30, 2002.
Darko Kuzmanovic and Nick Raffan of SIAL, will replace the current
portfolio management personnel at Scudder in providing portfolio management
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services with respect to the Fund. Messrs. Kuzmanovic and Raffan are members of
the Australian equity team of SIAL and are responsible for the analysis of the
global mining, metals, precious metals and steel sectors.
Mr. Kuzmanovic has over 17 years relevant industry experience. He joined
the investment team in May 2000 from Colonial First State where he was
responsible for resource and utilities analysis for the Australian equity team.
He has previously worked for Zurich Investment Management for 4 years covering
resources, utilities and engineering. He also worked in the mining industry for
9 years covering a number of commodities as well as holding technical and
management roles. He is a member of the Australasian Institute of Mining and
Metallurgy.
Mr. Raffan has over 26 years of relevant industry experience. He joined the
investment team in September 1995 from NRMA Investments where he held the
position of Resources Analyst. Prior to that, he spent three years as Minerals
and Energy Economist at Westpac Banking Corporation. He also gained five years
experience as a Senior Resources Analyst at BBL Mullens and three years
experience as Resource Portfolio Manager at Aetna Insurance. He was employed as
a Gold Analyst at Bain & Co. from 1983 to 1985. He began his career as a
Petrologist at Kennecott Australia. He also is a member of the Australian
Institute of Mining and Metallurgy and the Australian Institute of
geoscientists.
Background Information Regarding the Fund
The Company was organized on July 30, 1996. As you know, the Fund seeks
maximum return (principal change and income) by investing at least 65% of total
assets in common stock and other equities of U.S. and foreign gold-related
companies and in gold coin and bullion.
The Company has an underwriting agreement with Scudder Investor Services, a
Massachusetts corporation located at Two International Place, Boston MA 02110,
which is a subsidiary of Scudder. The Company employs Brown Brothers Harriman &
Company, 40 Water Street, Boston, Massachusetts 02109, as custodian for the
Fund. Scudder Service Corporation, located at P.O. Box 2291, Boston,
Massachusetts 02107-2291, a subsidiary of Scudder, is the transfer and dividend
paying agent for the Fund. Scudder Fund Accounting Corporation, a subsidiary of
Scudder, located at Two International Place, Boston, Massachusetts, 02110-4103,
computes net asset value for the Fund.
These service arrangements will not be affected by the proposed
Sub-Investment Management Agreement with SIAL or the New Investment Management
Agreement with Scudder.
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Additional Information About SIAL
Please see APPENDIX D for information with respect to the name, address and
principal occupations of the executive officer(s) and managing member(s) of
SIAL. (No officers or directors of the Fund are affiliated with SIAL.)
The Board of Directors unanimously recommends that you
vote for this proposal.
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PROPOSAL II
APPROVAL OF A NEW INVESTMENT
MANAGEMENT AGREEMENT WITH SCUDDER
Introduction
The shareholders of the Fund will also be asked at the Special Meeting to
approve the Amended and Restated Investment Management Agreement between the
Company, on behalf of the Fund, and Scudder (the "New Investment Management
Agreement"). The sole purpose of the New Investment Management Agreement is to
allow explicitly for the appointment by Scudder of SIAL as sub-investment
adviser to the Fund.
Board Recommendation and Evaluation:
On November 13, 2000, the Board of Directors of the Company unanimously
voted to approve the New Investment Management Agreement and to recommend
approval to the shareholders of the Fund. The Board believes that shareholders
of the Fund will benefit from the proposed arrangement between and among the
Fund, Scudder and SIAL and that there will be no diminution in the services
provided by Scudder to the Fund. Moreover, the Fund's objectives, policies and
strategy will not change as a result of this proposal. As noted above, the Board
believes that the Fund will benefit from SIAL's extensive knowledge of and
experience in the precious metals industry.
The New Investment Management Agreement is substantively identical to the
current Investment Management Agreement, except for the addition of certain
revisions reflecting Scudder's name change, provisions to allow Scudder
explicitly to retain sub-investment adviser(s) and new effective and termination
dates. The fees payable by the Fund to Scudder under the New Investment
Management Agreement are the same as those currently payable under the current
Investment Management Agreement. As SIAL will be paid by Scudder directly out of
the fees received by Scudder from the Fund under the New Investment Management
Agreement, there will be no increase in the fees paid or expenses incurred by
the Fund's shareholders. Scudder will continue to provide certain services to
the Fund under the New Investment Management Agreement and will retain ultimate
responsibility to the Fund and the Company for the services that are to be
provided by SIAL.
Description of Current Investment Management Agreement
Scudder, located at 345 Park Avenue, New York, New York 10154, acts as
investment adviser to the Fund. Scudder is one of the largest and most
experienced investment organizations world wide, managing, as of September 30,
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2000 more than $290 billion in assets globally for mutual fund investors,
retirement and pension plans, institutional and corporate clients, insurance
companies, and private family and individual accounts. Scudder is a member of
the Zurich Financial Services Group. As payment for its services as investment
adviser, Scudder receives a management fee from the Fund at an annual rate of
1.00% of the Fund's average daily net assets up to $500 million and 0.95% of
that portion of the Fund's average daily net assets in excess of $500 million.
Under the current Investment Management Agreement, Scudder is required to
provide continuing investment management of the assets of the Fund in accordance
with the investment objectives, policies and restrictions set forth in the
Fund's Prospectus and Statement of Additional Information ("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; subject always to policies and instructions adopted by the
Company's Board of Directors. Scudder is required to 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 its determinations and all in
accordance with Fund policies as expressed in the Company's registration
statement. In addition to such portfolio management, Scudder also furnishes at
its 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 Scudder (or
one or more of its affiliates) renders to the Company administrative services on
behalf of the Fund necessary for operating as an open-end investment company and
not provided by persons not parties to the current Investment Management
Agreement. Additionally, Scudder pays the compensation and expenses of all
Directors, officers and executive employees of the Company (including the Fund's
share of payroll taxes) who are affiliated persons of Scudder.
The current Investment Management Agreement was initially approved by the
Board of Directors on August 6, 1998, became effective September 7, 1998 and was
approved at a shareholder meeting held on December 15, 1998. The current
Investment Management Agreement was last approved by the Board of Directors on
October 10, 2000 (when such agreement was amended and restated to reflect an
additional management fee break point for the benefit of Fund shareholders).
Regardless of whether the Sub-Investment Management Agreement or the New
Investment Management Agreement is approved, Scudder will continue to serve as
investment adviser to the Fund under the current Investment Management Agreement
although the Board will consider appropriate action if
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the Sub-Investment Management Agreement or the New Investment Management
Agreement is not approved by the Fund's shareholders.
Description of New Investment Management Agreement
The New Investment Management Agreement is substantively identical to the
current Investment Management Agreement, except for the addition of certain
revisions reflecting Scudder's name change, provisions to allow Scudder
explicitly to retain SIAL as a sub-investment adviser to the Fund and new
effective and termination dates. Please see APPENDIX C for a form of the New
Investment Management Agreement.
As is currently the case, the services of Scudder under the New Investment
Management Agreement are not exclusive. Scudder has the right to provide similar
services to other investment companies or to engage in other activities,
provided that those activities do not adversely affect Scudder's ability to
perform its services under the New Investment Management Agreement. The New
Investment Management Agreement will terminate automatically in the event of its
assignment. In addition, it may be terminated by Scudder upon 60 days' written
notice to the Fund or with respect to the Fund, upon the vote of a majority of
the Board or a majority of the outstanding voting securities of the Fund, upon
60 days' written notice to Scudder.
Under the New Investment Management Agreement, the fee for the period from
the date of the New Advisory Agreement to the end of the quarter during which
the New Advisory Agreement commences is prorated according to the proportion
that such period bears to the full quarterly period. Upon the termination of the
New Investment Management Agreement before the end of a quarter, the fee for
such part of that quarter shall be prorated according to the proportion that
such period bears to the full quarterly period.
As described herein, the retention of Scudder under the New Investment
Management Agreement and SIAL under the Sub-Investment Management Agreement will
not increase the fees or expenses otherwise incurred by the Fund's shareholders.
Additional Information About Scudder
Please see APPENDIX D for information with respect to (i) the name, address
and principal occupations of the executive officer(s) and managing member(s) of
Scudder and (ii) the Fund's officers and directors who are affiliated with
Scudder.
The Board of Directors unanimously recommends that you
vote for this proposal.
* * * * * * * * * * * * *
9
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ADDITIONAL INFORMATION
General
The costs of the Special Meeting (estimated at $20,000, including the cost
of preparing, printing and mailing the enclosed proxy, accompanying notice and
proxy statement and all other costs incurred in connection with the solicitation
of proxies) will be paid entirely by Scudder (and not by the Fund). The
principal solicitation of proxies will be by the mailing of this proxy
statement, but proxies may also be solicited by telephone and/or in person by
representatives of the Fund and regular employees of Scudder or its affiliates.
Such representatives and employees will not receive additional compensation for
solicitation activities.
Scudder has retained the services of Shareholder Communications Corporation
(the "Agent") to assist in the solicitation of proxies. As the Special Meeting
date approaches, shareholders may receive a telephone call from a representative
of the Agent if their vote has not yet been received. Authorization to permit
the Agent to execute proxies may be obtained by telephonic or electronic
transmitted instructions from shareholders of the Fund. Proxies that are
obtained telephonically will be recorded in accordance with the procedures set
forth below. The Board believes that these procedures are reasonably designed to
ensure that the identity of the shareholder casting the vote and the
shareholder's voting instructions are accurately determined.
In all cases where a telephonic proxy is solicited, the Agent's
representative is required to ask for each shareholder's full name, address,
last four digits of the shareholder's social security or tax identification
number, title of the person and whether such person is authorized to direct the
voting of such shares (if an entity), the number of shares owned, if known, and
to confirm that the shareholder has received the proxy statement and proxy card
in the mail. If the information solicited agrees with the information provided
to the Agent, then the Agent representative has the responsibility to explain
the process, read the proposals listed on the proxy card, and ask for the
shareholder's instructions on each proposal. The Agent's representative,
although he or she is permitted to answer questions about the process, is not
permitted to recommend to the shareholder how to vote, other than to read any
recommendation set forth in the proxy statement. The Agent will record the
shareholder's instructions on the card. Within 72 hours, the shareholder will be
sent a letter by first class mail confirming his or her vote and asking the
shareholder to call the Agent immediately if his or her votes are not correctly
reflected in the confirmation.
If the shareholder wishes to participate in the Special Meeting, but does
not wish to give his or her proxy by telephone or by fax, the shareholder may
still submit the proxy card originally sent with the proxy statement or attend
in person.
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Should shareholders require additional information regarding the proxy or
replacement proxy cards, they may contact the Agent toll-free at 1-877-748-9122.
Any proxy given by a shareholder, whether in writing, by telephone, by fax or by
the Internet, is revocable.
Shareholder Proposals
Shareholders wishing to submit proposals for inclusion in a proxy statement
for a shareholder meeting subsequent to the Special Meeting, if any, should send
their written proposals to the Secretary of the Fund, c/o Zurich Scudder
Investments, Inc., 345 Park Avenue, New York, New York 10154, within a
reasonable time before the solicitation of proxies for such meeting. The timely
submission of a proposal does not guarantee its inclusion.
Other Business
Management knows of no business to be presented to the Special Meeting
other than the matters set forth in this proxy statement, but should any other
matter requiring the vote of shareholders arise, the proxies will vote thereon
according to their best judgment in the interests of the Fund.
By Order of the Board of Directors,
/s/ John Millette
John Millette
Vice President and Secretary
New York, New York
January 5, 2001
The Fund will furnish, without charge, a copy of its most recent annual
report and any more recent semi-annual report to a shareholder upon request. Any
such request should be directed to the Fund by calling 1-800-SCUDDER.
11
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APPENDIX A
Scudder Mutual Funds, Inc.
Scudder Gold Fund
OWNERS OF MORE THAN
5% OF THE OUTSTANDING SHARES
OF THE FUND
Number of Percent of
Common Shares Common Shares
Name and Address Owned of Record Outstanding
---------------- --------------- -------------
Charles Schwab* ........................ 2,827,598 Class S 5.45%
101 Montgomery Street
San Francisco, CA 94101
Roy and Elise Okazaki .................. 2,502 Class AARP 25.80%
c/o Zurich Scudder Investments, Inc.
345 Park Avenue
New York, NY 10154
Delmar and Juanita Rentshler ........... 748 Class AARP 7.71%
c/o Zurich Scudder Investments, Inc.
345 Park Avenue
New York, NY 10154
Scudder Trust Company* ................. 5,157 Class AARP 51.31%
Custodian for IRA Accts.
Two International Place
Boston, MA 02110
----------
* The Company does not believe that these entities are the beneficial owners
of the Fund shares held by record by them.
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APPENDIX B
FORM OF RESEARCH AND ADVISORY AGREEMENT
Zurich Scudder Investments, Inc.
345 Park Avenue
New York, New York 10154
___________, 2001
Scudder Investments
Australia Limited
Level 42
AAP Centre
259 George Street
Sydney NSW 2000
Australia
We have entered into an Investment Advisory, Management and Administration
Agreement (the "Management Agreement") dated as of [date], as amended from time
to time, with Scudder Mutual Funds, Inc., a Maryland corporation (the
"Company"), pursuant to which we act as investment adviser to and manager of the
Scudder Gold Fund a series of the Company (the "Fund"). A copy of the Management
Agreement has been previously furnished to you. In furtherance of such duties to
the Fund, and with the approval of the Company, we wish to avail ourselves of
your investment advisory services. Accordingly, with the acceptance of the
Company, we hereby agree with you as follows for the duration of this Agreement:
1. You agree to furnish to us such information, investment recommendations,
advice and assistance as we shall from time to time reasonably request. In
addition, for the benefit of the Fund, you agree to pay the fees and expenses of
any directors or officers of the Company who are directors, officers or
employees of you , except that the Company shall bear travel expenses of one
(but not more than one) director, officer or employee of you who is not a
resident in the United States to the extent such expenses relate to his
attendance as a director at meetings of the Board of Directors of the Company in
the United States and shall also bear the travel expenses of any other director,
officer or employee of you who is resident in the United States to the extent
such expenses relate to his attendance as a director at meetings of the Board of
Directors outside of the United States.
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2. We agree to pay in United States dollars to you, as compensation for the
services to be rendered by you hereunder, a monthly fee which, on an annual
basis, is equal to 0.35% per annum of the value of the Fund's average monthly
net assets. In addition, we agree to pay you an amount equal to any Australian
GST payable on any taxable supply you make to us in connection with this
Agreement. For purposes of computing the monthly fee, the value of the net
assets of the Fund shall be determined as of the close of business on the last
business day of each month; provided, however, that the fee for the period from
the end of the last month ending prior to termination of this Agreement, for
whatever reason, to date of termination shall be based on the value of the net
assets of the Fund determined as of the close of business on the date of
termination and the fee for such period through the end of the month in which
such proceeds are received shall be prorated according to the proportion which
such period bears to a full monthly period. Each payment of a monthly fee shall
be made by us to you within the fifteen days next following the day as of which
such payment is so computed.
The value of the net assets of the Fund shall be determined pursuant to
applicable provisions of the Articles of Incorporation and By-laws of the
Company.
We agree to work with you, in order to make our relationship as productive
as possible for the benefit of the Fund, to further the development of your
ability to provide the services contemplated by Section 1. To this end we agree
to work with you to assist you in developing your research techniques,
procedures and analysis. We may from time to time furnish you with informal
memoranda, , reflecting our understanding of our working procedures with you,
which will be agreed to by each of us and may be revised as you work with us
pursuant to this Agreement. We also agree to furnish you with current copies of
the Fund's Prospectus and Statement of Additional Information, and all
amendments and supplements thereto. We agree not to furnish, without your
consent, to any person other than our personnel and directors and
representatives of the Company or the Fund any tangible research material that
is prepared by you, that is not publicly available, and that has been stamped or
otherwise clearly indicated by you as being confidential.
We agree that your prior approval will be required with respect to of any
references to you in any reports.
3. You agree that you will not make a short sale of any capital stock of
the Fund, or purchase any share of the capital stock of the Fund otherwise than
for investment.
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4. Your services to us are not to be deemed exclusive and you are free to
render similar services to others, provided that the nature and quality of
services to be provided to the Fund pursuant to Section 1 hereof.
5. Nothing herein shall be construed as constituting you an agent of us or
of the Company or the Fund.
6. You represent and warrant that you are registered as an investment
adviser under the U.S. Investment Advisers Act of 1940, as amended. You agree to
maintain such registration in effect during the term of this Agreement.
7. You shall not receive any compensation in connection with the placement
or execution of any transaction for the purchase or sale of securities or for
the investment of funds on behalf of the Fund, except that you may receive a
commission, fee or other remuneration for acting as broker in connection with
the sale of securities to or by the Fund, if permitted under the U.S. Investment
Company Act of 1940, as amended (the "1940 Act").
8. We and the Company agree that you may rely on information reasonably
believed by you to be accurate and reliable. We and the Company further agree
that neither you nor your officers, directors, employees or agents shall be
subject to any liability for any act or omission in the course of, connected
with or arising out of any services to be rendered hereunder except by reason of
willful misfeasance, bad faith or gross negligence in the performance of your
duties or by reason of reckless disregard of your obligations and duties under
this Agreement.
9. This Agreement shall remain in effect until September 30, 2002 and shall
continue in effect thereafter, but only so long as such continuance is
specifically approved at least annually by the affirmative vote of (i) a
majority of the members of the Company's Board of Directors who are not
interested persons of the Company, you or us, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) a majority of the Company's
Board of Directors or the holders of a majority of the outstanding voting
securities of the Fund. This Agreement may nevertheless be terminated at any
time, without penalty, by the Company's Board of Directors or by vote of holders
of a majority of the outstanding voting securities of the Fund, upon 60 days'
written notice delivered or sent by registered mail, postage prepaid, to you, at
your address given in Paragraph 11 hereof or at any other address of which you
shall have notified us in writing, or by you upon 60 days' written notice to us
and to the Company, and shall automatically be terminated in the event of its
assignment or of the termination (due to assignment or otherwise) of the
Management Agreement, provided that an assignment to a corporate successor to
all or substantially all of your business or to a wholly-owned subsidiary of
such corporate successor which does not result in a change of actual control or
management of your business shall
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<PAGE>
not be deemed to be an assignment for purposes of this Agreement. Any such
notice shall be deemed given when received by the addressee.
10. This Agreement may not be transferred, assigned, sold or in any manner
hypothecated or pledged by either party hereto. It may be amended by mutual
agreement, but only after authorization of such amendment by the affirmative
vote of (i) the holders of a majority of the outstanding voting securities of
the Fund; and (ii) a majority of the members of the Company's Board of Directors
who are not interested persons of the Company, you or us, cast in person at a
meeting called for the purpose of voting on such approval.
11. Any notice hereunder shall be in writing and shall be delivered in
person or by facsimile (followed by mailing such notice, air mail postage paid,
the day on which such facsimile is sent).
Addressed
If to Zurich Scudder Investments, Inc., to:
Zurich Scudder Investments, Inc.
345 Park Avenue
New York, NY 10154
Attention: President (Facsimile No. 212-319-7813)
If to Scudder Investments Australia Limited, to:
Level 42
AAP Centre
259 George Street
Sydney NSW 2000
Australia
Attention: Darko Kuzmanovic
Nick Raffan
Copy: James T. Dominguez
(Facsimile No. (612) 9995 3444)
or to such other address as to which the recipient shall have informed the other
party.
Notice given as provided above shall be deemed to have been given, if by
personal delivery, on the day of such delivery, and if by facsimile and mail,
the date on which such facsimile and confirmatory letter are sent.
12. This Agreement shall be construed in accordance with the laws of the
State of New York, provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act. As used herein the terms "interested
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person," "assignment," and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart hereof and return the same to us.
Very truly yours,
ZURICH SCUDDER INVESTMENTS, INC.
By
-----------------------------------------
Kathryn L. Quirk
Managing Director
The foregoing agreement is hereby accepted as of the date first above written.
SCUDDER INVESTMENTS
AUSTRALIA LIMITED
ABN 52 074 599 401
By
-----------------------------------------
Chairman
Accepted:
SCUDDER MUTUAL FUNDS, INC
ON BEHALF OF SCUDDER GOLD FUND, A SERIES THEREOF
By
-----------------------------------------
John Millette
Vice President
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<PAGE>
APPENDIX C
FORM OF NEW ADVISORY AGREEMENT WITH SCUDDER
SCUDDER MUTUAL FUNDS, INC.
345 Park Avenue
New York, New York 10154
Amended and restated as of
______________, 2001
Zurich Scudder Investments, Inc.
345 Park Avenue
New York, New York 10154
Amended and Restated
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 Articles of Incorporation, as amended from
time-to-time (the "Articles"), the Board of Directors may divide 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, a 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
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<PAGE>
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 5, 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 and the shareholders
of the Fund 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.
2. Sublicense to Use the Scudder Trademarks. As exclusive licensee of the
rights to use and sublicense the use of the "Scudder," "Zurich Scudder
Investments, Inc.," "Scudder Kemper Investments, Inc." and "Scudder, Stevens &
Clark, Inc." 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 or any organization which shall have succeeded
to your business as investment manager ("your Successor") 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 duality, 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
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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 your Successor) 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
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 in complying 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.
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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 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 and 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 are not maintained by the Fund's custodian
or other agents of the Fund; assisting in establishing the
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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
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<PAGE>
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 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. In connection with the rendering of services required under paragraphs
3, 4 and 5, the Fund and you have entered into an agreement dated __________,
2001 with Scudder Investments Australia Limited to furnish investment advisory
services to you pursuant to such agreement. You may also contract with or
consult with such banks, other securities firms or other parties in Australia or
elsewhere as you may deem appropriate to obtain information and advice,
including investment recommendations, advice regarding economic factors and
trends, advice as to currency exchange matters, and clerical and accounting
services and other assistance, but any fee, compensation or expenses to be paid
to any such
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parties shall be paid by you, and no obligation shall be incurred on the Fund's
behalf in any such respect.
7. 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 in United States Dollars on the
last day of each month the unpaid balance of a fee equal to the excess of 1/12
of 1 percent of the average daily net assets as defined below of the Fund for
such month; provided that, for any calendar month during which the average of
such values exceeds $500 million, the fee payable for that month based on the
portion of the average of such values in excess of $500 million shall be 1/12 of
0.95 of 1 percent of such portion over 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
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 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.
C-7
<PAGE>
8. 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. Whenever the Fund
and one or more other accounts or investment companies advised by the Manager
have available funds for investment, investments suitable and appropriate for
each shall be allocated in accordance with procedures believed by the Manager to
be equitable to each entity. Similarly, opportunities to sell securities shall
be allocated in a manner believed by the Manager to be equitable. The Fund
recognizes that in some cases this procedure may adversely affect the size of
the position that may be acquired or disposed of for the Fund.
9. Limitation of Liability of Manager. As an inducement to your undertaking
to render services pursuant to this Agreement, the Corporation agrees that you
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.
10. Duration and Termination of This Agreement. This Agreement shall remain
in force until September 30, 2002, 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
C-8
<PAGE>
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 and any applicable SEC exemptive order therefrom.
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.
11. 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 in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.
12. 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.
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.
C-9
<PAGE>
Yours very truly,
SCUDDER MUTUAL FUNDS, INC., on
behalf of Scudder Gold Fund
By:
------------------------------
John Millette
Vice President
The foregoing Agreement is hereby accepted as of the date hereof.
ZURICH SCUDDER INVESTMENTS, INC.
By:
------------------------------
Kathryn L. Quirk
Managing Director
C-10
<PAGE>
APPENDIX D
ADDITIONAL INFORMATION ABOUT SIAL AND SCUDDER
SIAL. The following chart sets forth information with respect to name,
address and principal occupations of the executive officer(s) and managing
member(s) of SIAL. (Unless otherwise noted, the person's position at SIAL
constitutes his/her principal occupation.)
Name and Address Position with SIAL and Principal Occupation
---------------- -------------------------------------------
Paul L. Bolinowsky ........... Director
AAP Centre Level 42
259 George Street
Sydney, Australia
NSW 2000
Malcolm M. Jones ............. Director
AAP Centre Level 42
259 George Street
Sydney, Australia
NSW 2000
James T. Dominguez ........... Chairman, Director
AAP Centre Level 42
259 George Street
Sydney, Australia
NSW 2000
Michael McLeod ............... Director
AAP Centre Level 42
259 George Street
Sydney, Australia
NSW 2000
D-1
<PAGE>
Name and Address Position with SIAL and Principal Occupation
---------------- -------------------------------------------
Sam Kavourakis ............... Director
AAP Centre Level 42
259 George Street
Sydney, Australia
NSW 2000
Gregory B. Ballard ........... Chief Financial Officer
AAP Centre Level 42
259 George Street
Sydney, Australia
NSW 2000
Terrence D. McKinn ........... Chief Compliance Officer
AAP Centre Level 42
259 George Street
Sydney, Australia
NSW 2000
Amanda Allen ................. Secretary
AAP Centre Level 42
259 George Street
Sydney, Australia
NSW 2000
Scudder. The following chart sets forth information with respect to name,
address and principal occupations of the executive officer(s) and managing
member(s) of Scudder. (Unless otherwise noted, the person's position at Scudder
constitutes his/her principal occupation.)
Name and Address Position with Scudder and Principal Occupation
---------------- ----------------------------------------------
Edmond D. Villani ............ Director, President and Chief Executive Officer
345 Park Avenue of Scudder.
New York, New York 10154 Member Group Management Board.
Steven Gluckstern ............ Chairman of the Board of Scudder.
345 Park Avenue Chief Executive Officer of
New York, New York 10154 Zurich Global Asset Businesses;
Member Group Management Board
D-2
<PAGE>
Name and Address Position with Scudder and Principal Occupation
---------------- ----------------------------------------------
Lynn S. Birdsong ............ Director and Vice President of Scudder.
345 Park Avenue
New York, New York 10154
Farhan Sharaff .............. Chief Investment Officer of Scudder.
345 Park Avenue
New York, New York 10154
Laurence W. Cheng ........... Director of Scudder.
345 Park Avenue
New York, New York 10154
Kathryn L. Quirk ............ Secretary, General Counsel and Chief
345 Park Avenue Compliance Officer of Scudder.
New York, New York 10154
Gunther Gose ................ Director of Scudder.
Zurich Financial Services, CFO and Member Group Executive Board,
Mythenquai-2, Zurich Financial Services;
P.O. Box CH-8022, Director and CEO/ Branch Officers, Zurich Life
Zurich, Switzerland Insurance Company.
Martin Feinstein ............ Director of Scudder.
4680 Wilshire Blvd. Chairman of the Board, President
Los Angeles, CA 90010 and Chief Executive Officer of
Farmer's Group, Inc.
Nicholas Bratt .............. Director and Vice Presdient of Scudder.
345 Park Avenue
New York, New York 10154
Robert Allan Rudell ......... Chief Operations Officer of Scudder.
345 Park Avenue
New York, New York 10154
Harold D. Kahn .............. Chief Financial Officer and Treasurer of Scudder.
345 Park Avenue
New York, New York 10154
D-3
<PAGE>
The following chart sets forth information with respect the Fund's officers and
directors who are affiliated with Scudder.
Name Position with the Fund and with Scudder
---- ---------------------------------------
Linda C. Coughlin ............ Chairperson and President of the Fund
Two International Place Managing Director of Scudder.
Boston, MA 02110
Thomas V. Bruns .............. Vice-President of the Fund
222 South Riverside Plaza Managing Director and Assistant Secretary
Chicago, IL 60606 of Scudder.
William F. Glavin ............ Vice President of the Fund
Two International Place Managing Director of Scudder.
Boston, MA 02110
James E. Masur ............... Vice President of the Fund
Two International Place Senior Vice President of Scudder.
Boston, MA 02110
Howard Schneider ............. Vice President of the Fund.
Two International Place Managing Director of Scudder.
Boston, MA 02110
Kathryn L. Quirk ............. Vice President and Assistant Secretary of the
345 Park Avenue Fund
New York, New York 10154 Managing Director of Scudder.
Joann M. Barry ............... Vice President of the Fund
222 South Riverside Plaza Senior Vice President of Scudder.
Chicago, IL 60606
John Millette ................ Vice President and Secretary of the Fund
Two International Place Vice President of Scudder.
Boston, MA 02110
John Hebble .................. Treasurer of the Fund
Two International Place Senior Vice President of Scudder.
Boston, MA 02110
Brenda Lyons ................. Assistant Treasurer of the Fund
Two International Place Senior Vice President of Scudder.
Boston, MA 02110
Caroline Pearson ............. Assistant Secretary of the Fund
Two International Place Senior Vice President of Scudder.
Boston, MA 02110
D-4
<PAGE>
PO Box 219669, Kansas City, MO 64121-9669
ADDRESS SERVICE REQUESTED
Please fold and detach card at perforation before mailing
SCUDDER MUTUAL FUNDS, INC.
Scudder Gold Fund
PROXY SOLICITED BY THE BOARD OF DIRECTORS
I hereby appoint John Millette, Kathryn L. Quirk and Caroline Pearson each with
the full power of substitution, as proxies for the undersigned to vote the
shares of the Scudder Gold Fund (the "Fund"), a series of Scudder Mutual Funds,
Inc. (the "Company"), as to which I am entitled to vote, as shown on the reverse
side, at a Special Meeting of the Shareholders of the Fund (the "Meeting") to be
held on March 14, 2001, at 4:00 p.m., Eastern Time, at the offices of Zurich
Scudder Investments, Inc., 13th Floor, Two International Place, Boston,
Massachusetts 02110, and at any adjournments thereof, as follows:
I hereby revoke any and all proxies with respect to such shares previously given
by me. I acknowledge receipt of the Proxy Statement dated January 5, 2001. THIS
PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY WILL
BE VOTED "FOR" PROPOSALS 1 AND 2.
This instruction may be revoked at any time prior to its exercise at the Meeting
by execution of a subsequent proxy card, by written notice to the Secretary of
the Fund or by voting in person at the Meeting.
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY IN THE ENCLOSED ENVELOPE.
Date 2001
---------------
Signature should be exactly as the name or
names appear on this proxy card. If the
individual signing the proxy card is a
fiduciary (e.g., attorney, executor,
trustee, guardian, etc.), the individual's
signature must be followed by his full
title.
--------------------------------------
Signature(s) or Shareholder(s)
GOLD
<PAGE>
VOTE THIS CARD TODAY
BY FAX AT
1-888-451-86839
Please fold and detach card at perforation before mailing
This proxy, if properly executed, will be voted in the manner directed by the
undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
APPROVAL OF PROPOSALS 1 AND 2.
THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY
RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2. FOR AGAINST ABSTAIN
1. To approve a Research and Advisory Agreement / / / / / /
between and among the Company, on behalf of
the Fund, Zurich Scudder Investments, Inc.,
the Fund's investment advisor ("ZSI"), and
Scudder Investments Australia, Ltd. ("SIAL").
2. To approve the Amended and Restated Investment / / / / / /
Management Agreement between the Company, on
behalf of the Fund, and ZSI.
Please be sure to sign and date this Proxy.
GOLD
