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SIGNATURE PHILIP J. COLLORA
TITLE V.P. AND SECRETARY
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1998
ANNUAL REPORT TO SHAREHOLDERS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000858998
<NAME> THE GROWTH FUND OF SPAIN
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<PERIOD-END> OCT-31-1998
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</TABLE>
REPORT OF INDEPENDENT AUDITORS
Board of Trustees
Kemper Funds
In planning and performing our audit of the financial statements of
each of the Kemper Funds listed in Exhibit A attached hereto (the
"Funds") for the period ended as of the date listed in Exhibit A
attached hereto ("Report Date"), we considered their internal
control, including control activities for safeguarding securities, in
order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with
the requirements of Form N-SAR, not to provide assurance on internal
control.
The management of the Funds is responsible for establishing and
maintaining internal control. In fulfilling this responsibility,
estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally, controls
that are relevant to an audit pertain to the entity's objective of
preparing financial statements for external purposes that are fairly
presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets
against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud
may occur and not be detected. Also, projection of any evaluation of
internal control to future periods is subject to the risk that it may
become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of internal control would not necessarily disclose
all matters in internal control that might be material weaknesses
under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the
design or operation of one or more of specific internal control
components does not reduce to a relatively low level the risk that
errors or fraud in amounts that would be material in relation to the
financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters
involving internal control and its operation, including controls for
safeguarding securities, that we consider to be material weaknesses
as defined above as of Report Date.
This report is intended solely for the information and use of the
board of trustees and management and the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Chicago, Illinois
December 16, 1998
Kemper Funds
Exhibit A
October 31, 1998
Kemper Global International Series:
Kemper Latin America Fund
Kemper Emerging Markets Growth Fund
Kemper Emerging Markets Income Fund
Kemper International Growth and Income Fund
Kemper Global Blue Chip Fund
Kemper Diversified Income Fund
Kemper Blue Chip Fund
Kemper International Fund
Kemper Growth Fund of Spain
N:\SHAREDAT\CORP_ACT\CONTRACT\KEMPER\KGIS\IMA\gsp_d98 6
INVESTMENT MANAGEMENT AGREEMENT
Kemper Global/International Series, Inc.
345 Park Avenue
New York, New York 10154
November 25, 1998
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Growth Fund of Spain
Ladies and Gentlemen:
Kemper Global/International Series, 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 "Charter"), the Board of Directors is
authorized to issue the Corporation's shares of common
stock, par value $0.001 per share, (the "Shares") in
separate series, or funds. The Board of Directors has
authorized Growth Fund of Spain (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 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 Charter dated October 1, 1997 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. 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 2, you shall be entitled to receive and act
upon advice of counsel to the Corporation. 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.
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.
3. Administrative Services. In addition to the portfolio
management services specified above in section 2, 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
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 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.
4. Allocation of Charges and Expenses. Except as otherwise
specifically provided in this section 4, 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 2 hereof and the administrative services described
in section 3 hereof.
You shall not be required to pay any expenses of the Fund
other than those specifically allocated to you in this
section 4. 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 for which the
Corporation is responsible pursuant to the terms of the Fund
Accounting Services Agreement, 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 4, 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; and costs of shareholders' and other meetings.
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.
5. Management Fee. For all services to be rendered, payments
to be made and costs to be assumed by you as provided in
sections 2, 3, and 4 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 0.75 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 $250 million, the fee payable for that
month based on the portion of the average of such values in
excess of $250 million shall be 1/12 of 0.72 of 1 percent of
such portion; provided that, for any calendar month during
which the average of such values exceeds $1.0 billion, the
fee payable for that month based on the portion of the
average of such values in excess of $1.0 billion shall be
1/12 of 0.70 of 1 percent of such portion; provided that,
for any calendar month during which the average of such
values exceeds $2.5 billion, the fee payable for that month
based on the portion of the average of such values in excess
of $2.5 billion shall be 1/12 of 0.68 of 1 percent of such
portion; provided that, for any calendar month during which
the average of such values exceeds $5.0 billion, the fee
payable for that month based on the portion of the average
of such values in excess of $5.0 billion shall be 1/12 of
0.65 of 1 percent of such portion; provided that, for any
calendar month during which the average of such values
exceeds $7.5 billion, the fee payable for that month based
on the portion of the average of such values in excess of
$7.5 billion shall be 1/12 of 0.64 of 1 percent of such
portion; provided that, for any calendar month during which
the average of such values exceeds $10.0 billion, the fee
payable for that month based on the portion of the average
of such values in excess of $10.0 billion shall be 1/12 of
0.63 of 1 percent of such portion; provided that, for any
calendar month during which the average of such values
exceeds $12.5 billion, the fee payable for that month based
on the portion of the average of such values in excess of
$12.5 billion shall be 1/12 of 0.62 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 Charter 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 5, 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 5.
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.
6. 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 you have available funds for
investment, investments suitable and appropriate for each
shall be allocated in accordance with procedures believed by
you to be equitable to each entity. Similarly, opportunities
to sell securities shall be allocated in a manner believed
by you 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.
7. 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.
8. Duration and Termination of This Agreement. This
Agreement shall remain in force until
April 1, 1999 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 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.
This Agreement may be terminated with respect to the Fund at
any time without the payment of any penalty by the Board of
Directors or by vote of a majority of the outstanding voting
securities of the Fund in the event that it shall have been
established by a court of competent jurisdiction that you or
any of your officers or directors has taken any action which
results in a breach of your covenants set forth herein.
9. 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.
10. 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 Commonwealth of Massachusetts, 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,
Kemper Global/International
Series, Inc.,
on behalf of Growth Fund of
Spain,
By:
President
The foregoing Agreement is hereby accepted as of the date
hereof.
Scudder Kemper Investments,
Inc.
By:
