<PAGE> PAGE 1
000 B000000 09/30/98
000 C000000 0000088051
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0.a
000 J000000 U
001 A000000 VALUE EQUITY TRUST
001 B000000 811-1444
001 C000000 2123266200
002 A000000 TWO INTERNATIONAL PLACE
002 B000000 BOSTON
002 C000000 MA
002 D010000 02110
002 D020000 4103
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 2
007 C010100 1
007 C020100 SCUDDER LARGE COMPANY VALUE FUND
007 C030100 N
007 C010200 2
007 C020200 VALUE FUND
007 C030200 N
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A00AA01 SCUDDER KEMPER INVESTMENTS, INC.
008 B00AA01 A
008 C00AA01 801-252
008 D01AA01 NEW YORK
008 D02AA01 NY
008 D03AA01 10154
010 A00AA01 SCUDDER FUND ACCOUNTING CORPORATION
010 C01AA01 BOSTON
010 C02AA01 MA
010 C03AA01 02107
010 C04AA01 2291
013 A00AA01 PRICEWATERHOUSECOOPERS LLP
013 B01AA01 BOSTON
013 B02AA01 MA
<PAGE> PAGE 2
013 B03AA01 02110
014 A00AA01 SCUDDER INVESTOR SERVICES, INC.
014 B00AA01 8-44899
014 A00AA02 GRUNTAL & CO., INC.
014 B00AA02 8-31022
014 A00AA03 GMS GROUP LLC (A GRUNTAL AFFILIATE)
014 B00AA03 8-23936
014 A00AA04 ZURICH CAPITAL MARKETS
014 B00AA04 8-49827
014 A00AA05 BANK HANDLOWY
014 B00AA05 8-24613
014 A00AA06 KEMPER DISTRIBUTORS, INC.
014 B00AA06 8-47765
015 A00AA01 STATE STREET BANK AND TRUST COMPANY
015 B00AA01 C
015 C01AA01 BOSTON
015 C02AA01 MA
015 C03AA01 02110
015 E01AA01 X
015 A00AA02 WESTPAC BANKING CORPORATION
015 B00AA02 S
015 C01AA02 SYDNEY
015 D01AA02 AUSTRALIA
015 E04AA02 X
015 A00AA03 GIROCREDIT BANK AKTIENGESELLSCHAFT DER SPARK
015 B00AA03 S
015 C01AA03 VIENNA
015 D01AA03 AUSTRIA
015 E04AA03 X
015 A00AA04 STANDARD CHARTERED BANK
015 B00AA04 S
015 C01AA04 DHAKA
015 D01AA04 BANGLADESH
015 E04AA04 X
015 A00AA05 GENERALE BANK
015 B00AA05 S
015 C01AA05 BRUSSELS
015 D01AA05 BELGIUM
015 E04AA05 X
015 A00AA06 BARCLAYS BANK OF BOTSWANA LIMITED
015 B00AA06 S
015 C01AA06 GABORONE
015 D01AA06 BOTSWANA
015 E04AA06 X
015 A00AA07 BANKBOSTON, N.A.
015 B00AA07 S
015 C01AA07 SAO PAULO
015 D01AA07 BRAZIL
015 E04AA07 X
015 A00AA08 CANADA TRUSTCO MORTGAGE COMPANY
015 B00AA08 S
<PAGE> PAGE 3
015 C01AA08 TORONTO
015 D01AA08 CANADA
015 E04AA08 X
015 A00AA09 CITIBANK, N.A.
015 B00AA09 S
015 C01AA09 SANTIAGO
015 D01AA09 CHILE
015 E04AA09 X
015 A00AA10 THE HONG KONG & SHANGHAI BANKING CORP. LTD.
015 B00AA10 S
015 C01AA10 SHANGHAI & SHENZHEN
015 D01AA10 CHINA
015 E04AA10 X
015 A00AA11 CITITRUST COLOMBIA S.A. SOCIEDAD FIDUCIARIA
015 B00AA11 S
015 C01AA11 BOGOTA
015 D01AA11 COLOMBIA
015 E04AA11 X
015 A00AA12 BARCLAYS BANK PLC
015 B00AA12 S
015 C01AA12 NICOSIA
015 D01AA12 CYPRUS
015 E04AA12 X
015 A00AA13 CESKOSLOVENSKA OBCHODNI BANKA A.S.
015 B00AA13 S
015 C01AA13 PRAGUE
015 D01AA13 CZECH REPUBLIC
015 E04AA13 X
015 A00AA14 DEN DANSKE BANK
015 B00AA14 S
015 C01AA14 COPENHAGEN
015 D01AA14 DENMARK
015 E04AA14 X
015 A00AA15 MERITA BANK LIMITED
015 B00AA15 S
015 C01AA15 HELSINKI
015 D01AA15 FINLAND
015 E04AA15 X
015 A00AA16 BANQUE PARIBAS
015 B00AA16 S
015 C01AA16 PARIS
015 D01AA16 FRANCE
015 E04AA16 X
015 A00AA17 DRESDNER BANK A.G.
015 B00AA17 S
015 C01AA17 BERLIN
015 D01AA17 GERMANY
015 E04AA17 X
015 A00AA18 BARCLAYS BANK OF GHANA LIMITED
015 B00AA18 S
015 C01AA18 ACCRA
<PAGE> PAGE 4
015 D01AA18 GHANA
015 E04AA18 X
015 A00AA19 NATIONAL BANK OF GREECE S.A.
015 B00AA19 S
015 C01AA19 ATHENS
015 D01AA19 GREECE
015 E04AA19 X
015 A00AA20 STANDARD CHARTERED BANK
015 B00AA20 S
015 C01AA20 HONG KONG
015 D01AA20 CHINA
015 E04AA20 X
015 A00AA21 CITIBANK BUDAPEST RT.
015 B00AA21 S
015 C01AA21 BUDAPEST
015 D01AA21 HUNGARY
015 E04AA21 X
015 A00AA22 DEUTSCHE BANK AG
015 B00AA22 S
015 C01AA22 BOMBAY
015 D01AA22 INDIA
015 E04AA22 X
015 A00AA23 STANDARD CHARTERED BANK
015 B00AA23 S
015 C01AA23 JAKARTA
015 D01AA23 INDONESIA
015 E04AA23 X
015 A00AA24 BANK OF IRELAND
015 B00AA24 S
015 C01AA24 DUBLIN
015 D01AA24 IRELAND
015 E04AA24 X
015 A00AA25 BANK HAPOALIM B.M.
015 B00AA25 S
015 C01AA25 TEL AVIV
015 D01AA25 ISRAEL
015 E04AA25 X
015 A00AA26 BANQUE PARIBAS
015 B00AA26 S
015 C01AA26 MILAN
015 D01AA26 ITALY
015 E04AA26 X
015 A00AA27 SUMITOMO TRUST & BANKING CO. LTD.
015 B00AA27 S
015 C01AA27 TOKYO
015 D01AA27 JAPAN
015 E04AA27 X
015 A00AA28 BARCLAYS BANK OF KENYA LIMITED
015 B00AA28 S
015 C01AA28 NAIROBI
015 D01AA28 KENYA
<PAGE> PAGE 5
015 E04AA28 X
015 A00AA29 CITIBANK, N.A.
015 B00AA29 S
015 C01AA29 SEOUL
015 D01AA29 KOREA
015 E04AA29 X
015 A00AA30 STANDARD CHARTERED BANK
015 B00AA30 S
015 C01AA30 BERHAD KUALA LUMPUR
015 D01AA30 MALAYSIA
015 E04AA30 X
015 A00AA31 CITIBANK MEXICO, S.A.
015 B00AA31 S
015 C01AA31 MEXICO CITY
015 D01AA31 MEXICO
015 E04AA31 X
015 A00AA32 MEESPIERSON N.V.
015 B00AA32 S
015 C01AA32 AMSTERDAM
015 D01AA32 NETHERLANDS
015 E04AA32 X
015 A00AA33 ANZ BANKING GROUP (NEW ZEALAND) LIMITED
015 B00AA33 S
015 C01AA33 WELLINGTON
015 D01AA33 NEW ZEALAND
015 E04AA33 X
015 A00AA34 CHRISTIANA BANK OG KREDITKASSE
015 B00AA34 S
015 C01AA34 OSLO
015 D01AA34 NORWAY
015 E04AA34 X
015 A00AA35 DEUTSCHE BANK AG
015 B00AA35 S
015 C01AA35 KARACHI
015 D01AA35 PAKISTAN
015 E04AA35 X
015 A00AA36 CITIBANK, N.A.
015 B00AA36 S
015 C01AA36 LIMA
015 D01AA36 PERU
015 E04AA36 X
015 A00AA37 STANDARD CHARTERED BANK
015 B00AA37 S
015 C01AA37 MANILA
015 D01AA37 PHILIPPINES
015 E04AA37 X
015 A00AA38 CITIBANK POLAND, S.A.
015 B00AA38 S
015 C01AA38 WARSAW
015 D01AA38 POLAND
015 E04AA38 X
<PAGE> PAGE 6
015 A00AA39 BANCO COMERCIAL PORTUGUES
015 B00AA39 S
015 C01AA39 LISBON
015 D01AA39 PORTUGAL
015 E04AA39 X
015 A00AA40 THE DEVELOPMENT BANK OF SINGAPORE LTD.
015 B00AA40 S
015 C01AA40 SINGAPORE
015 D01AA40 SINGAPORE REPUBLIC
015 E04AA40 X
015 A00AA41 CESKOSLOVENSKA OBCHODNA BANKA A.S.
015 B00AA41 S
015 C01AA41 BRATISLAVA
015 D01AA41 SLOVAK REPUBLIC
015 E04AA41 X
015 A00AA42 STANDARD BANK OF SOUTH AFRICA LIMITED
015 B00AA42 S
015 C01AA42 JOHANNESBURG
015 D01AA42 SOUTH AFRICA
015 E04AA42 X
015 A00AA43 BANCO SANTANDER, S.A.
015 B00AA43 S
015 C01AA43 MADRID
015 D01AA43 SPAIN
015 E04AA43 X
015 A00AA44 THE HONG KONG & SHANGHAI BANKING CORP., LTD.
015 B00AA44 S
015 C01AA44 COLOMBO
015 D01AA44 SRI LANKA
015 E04AA44 X
015 A00AA45 BARCLAYS BANK OF SWAZILAND, LIMITED
015 B00AA45 S
015 C01AA45 MBABANE
015 D01AA45 SWAZILAND
015 E04AA45 X
015 A00AA46 SKANDINAVISKA ENSKILDA BANKEN
015 B00AA46 S
015 C01AA46 STOCKHOLM
015 D01AA46 SWEDEN
015 E04AA46 X
015 A00AA47 UNION BANK OF SWITZERLAND
015 B00AA47 S
015 C01AA47 ZURICH
015 D01AA47 SWITZERLAND
015 E04AA47 X
015 A00AA48 CENTRAL TRUST OF CHINA
015 B00AA48 S
015 C01AA48 TAIPEI
015 D01AA48 TAIWAN
015 E04AA48 X
015 A00AA49 STANDARD CHARTERED BANK
<PAGE> PAGE 7
015 B00AA49 S
015 C01AA49 BANGKOK
015 D01AA49 THAILAND
015 E04AA49 X
015 A00AA50 CITIBANK, N.A.
015 B00AA50 S
015 C01AA50 ISTANBUL
015 D01AA50 TURKEY
015 E04AA50 X
015 A00AA51 STATE STREET LONDON LIMITED
015 B00AA51 S
015 C01AA51 LONDON
015 D01AA51 UNITED KINGDOM
015 E04AA51 X
015 A00AA52 STATE STREET BANK AND TRUST COMPANY
015 B00AA52 S
015 C01AA52 LONDON
015 D01AA52 UNITED KINGDOM
015 E04AA52 X
015 A00AA53 CITIBANK, N.A.
015 B00AA53 S
015 C01AA53 MONTEVIDEO
015 D01AA53 URUGUAY
015 E04AA53 X
015 A00AA54 CITIBANK, N.A.
015 B00AA54 S
015 C01AA54 CARACAS
015 D01AA54 VENEZUELA
015 E04AA54 X
015 A00AA55 BARCLAYS BANK OF ZAMBIA LIMITED
015 B00AA55 S
015 C01AA55 LUSAKA
015 D01AA55 ZAMBIA
015 E04AA55 X
015 A00AA56 BARCLAYS BANK OF ZIMBABWE LIMITED
015 B00AA56 S
015 C01AA56 HARARE
015 D01AA56 ZIMBABWE
015 E04AA56 X
015 A00AA57 THE BANK OF BERMUDA LIMITED
015 B00AA57 S
015 C01AA57 BERMUDA
015 D01AA57 BERMUDA ISLANDS
015 E04AA57 X
015 A00AA58 CITIBANK, N.A.
015 B00AA58 S
015 C01AA58 BUENOS AIRES
015 D01AA58 ARGENTINA
015 E04AA58 X
015 A00AA59 DELETE
018 00AA00 Y
<PAGE> PAGE 8
019 A00AA00 Y
019 B00AA00 76
019 C00AA00 SCUDDERKEM
020 A000001 ALEX BROWN & SONS
020 B000001 0000000000
020 C000001 265
020 A000002 PAINE WEBBER
020 B000002 0000000000
020 C000002 203
020 A000003 SMITH BARNEY SHEARSON
020 B000003 0000000000
020 C000003 194
020 A000004 BEAR STEARNS
020 B000004 0000000000
020 C000004 188
020 A000005 DONALDSON LUFKIN
020 B000005 0000000000
020 C000005 179
020 A000006 GOLDMAN, SACHS & CO.
020 B000006 0000000000
020 C000006 158
020 A000007 SG WARBUG & CO.
020 B000007 0000000000
020 C000007 149
020 A000008 LEHMAN BROTHERS SECURITIES
020 B000008 0000000000
020 C000008 142
020 A000009 COWEN
020 B000009 0000000000
020 C000009 132
020 A000010 MERRILL LYNCH
020 B000010 0000000000
020 C000010 130
021 000000 3044
022 A000001 DONALDSON LUF & JEN FIXED INC.
022 B000001 13-2741729
022 C000001 11022123
022 D000001 0
022 A000002 STATE STREET BANK
022 B000002 04-1867445
022 C000002 7525886
022 D000002 660
022 A000003 SALOMON BROTHERS
022 B000003 13-3082694
022 C000003 496103
022 D000003 4375
022 A000004 GOLDMAN SACHS
022 B000004 13-5108880
022 C000004 159447
022 D000004 12030
022 A000005 WILLIAMS CAPITAL
<PAGE> PAGE 9
022 B000005 0000000000
022 C000005 138215
022 D000005 14979
022 A000006 FIRST CHICAGO CAP MKTS
022 B000006 36-3595942
022 C000006 133509
022 D000006 0
022 A000007 LEHMAN BROTHERS SECURITIES
022 B000007 13-2518466
022 C000007 106897
022 D000007 14963
022 A000008 DRESDNER
022 B000008 13-6172414
022 C000008 39956
022 D000008 0
022 A000009 BROWN BROTHERS HARRIMAN
022 C000009 34044
022 D000009 0
022 A000010 MESEROW
022 B000010 0000000000
022 C000010 29983
022 D000010 0
023 C000000 20006231
023 D000000 112280
024 00AA00 N
026 A000000 N
026 B000000 Y
026 C000000 Y
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
054 A00AA00 Y
054 B00AA00 Y
054 C00AA00 N
054 D00AA00 N
054 E00AA00 N
054 F00AA00 N
054 G00AA00 N
054 H00AA00 Y
054 I00AA00 N
054 J00AA00 Y
054 K00AA00 N
054 L00AA00 N
054 M00AA00 Y
054 N00AA00 N
054 O00AA00 Y
058 A00AA00 N
<PAGE> PAGE 10
059 00AA00 Y
060 A00AA00 Y
060 B00AA00 Y
061 00AA00 2500
062 A00AA00 N
062 B00AA00 0.0
062 C00AA00 0.0
062 D00AA00 0.0
062 E00AA00 0.0
062 F00AA00 0.0
062 G00AA00 0.0
062 H00AA00 0.0
062 I00AA00 0.0
062 J00AA00 0.0
062 K00AA00 0.0
062 L00AA00 0.0
062 M00AA00 0.0
062 N00AA00 0.0
062 O00AA00 0.0
062 P00AA00 0.0
062 Q00AA00 0.0
062 R00AA00 0.0
077 A000000 Y
077 B000000 Y
077 C000000 N
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 Y
077 Q020000 N
077 Q030000 Y
078 000000 N
080 A00AA00 ICI MUTUAL
080 B00AA00 NATIONAL UNION
080 C00AA00 150000
081 A00AA00 N
081 B00AA00 0
082 B00AA00 0
083 A00AA00 N
083 B00AA00 0
084 A00AA00 N
<PAGE> PAGE 11
084 B00AA00 0
085 A00AA00 Y
085 B00AA00 N
028 A010100 24935
028 A020100 0
028 A030100 0
028 A040100 36396
028 B010100 18836
028 B020100 0
028 B030100 0
028 B040100 29835
028 C010100 23206
028 C020100 0
028 C030100 0
028 C040100 29789
028 D010100 23592
028 D020100 0
028 D030100 0
028 D040100 48855
028 E010100 18065
028 E020100 0
028 E030100 0
028 E040100 68600
028 F010100 24935
028 F020100 0
028 F030100 0
028 F040100 31960
028 G010100 133569
028 G020100 0
028 G030100 0
028 G040100 245435
028 H000100 0
070 A010100 Y
070 A020100 Y
070 B010100 Y
070 B020100 N
070 C010100 Y
070 C020100 N
070 D010100 Y
070 D020100 N
070 E010100 Y
070 E020100 N
070 F010100 N
070 F020100 N
070 G010100 Y
070 G020100 N
070 H010100 Y
070 H020100 N
070 I010100 N
070 I020100 N
070 J010100 Y
<PAGE> PAGE 12
070 J020100 N
070 K010100 Y
070 K020100 N
070 L010100 Y
070 L020100 Y
070 M010100 Y
070 M020100 Y
070 N010100 Y
070 N020100 N
070 O010100 N
070 O020100 N
070 P010100 Y
070 P020100 N
070 Q010100 N
070 Q020100 N
070 R010100 N
070 R020100 N
071 A000100 876217
071 B000100 985399
071 C000100 2216276
071 D000100 39
072 A000100 12
072 B000100 1968
072 C000100 46620
072 D000100 0
072 E000100 0
072 F000100 14297
072 G000100 0
072 H000100 0
072 I000100 4959
072 J000100 288
072 K000100 0
072 L000100 339
072 M000100 53
072 N000100 100
072 O000100 0
072 P000100 0
072 Q000100 0
072 R000100 46
072 S000100 31
072 T000100 0
072 U000100 0
072 V000100 0
072 W000100 54
072 X000100 20167
072 Y000100 0
072 Z000100 28421
072AA000100 162388
072BB000100 0
072CC010100 0
072CC020100 280821
<PAGE> PAGE 13
072DD010100 18248
072DD020100 0
072EE000100 141425
073 A010100 0.2400
073 A020100 0.0000
073 B000100 1.8600
073 C000100 0.0000
074 A000100 0
074 B000100 54112
074 C000100 0
074 D000100 0
074 E000100 0
074 F000100 1950058
074 G000100 0
074 H000100 0
074 I000100 0
074 J000100 2468
074 K000100 0
074 L000100 4753
074 M000100 23
074 N000100 2011414
074 O000100 11496
074 P000100 1067
074 Q000100 0
074 R010100 0
074 R020100 0
074 R030100 0
074 R040100 1685
074 S000100 0
074 T000100 1997166
074 U010100 77858
074 U020100 0
074 V010100 25.65
074 V020100 0.00
074 W000100 0.0000
074 X000100 141
074 Y000100 0
075 A000100 0
075 B000100 2280595
076 000100 0.00
028 A010200 43960
028 A020200 0
028 A030200 0
028 A040200 16935
028 B010200 21811
028 B020200 0
028 B030200 0
028 B040200 10023
028 C010200 36660
028 C020200 0
028 C030200 0
<PAGE> PAGE 14
028 C040200 11838
028 D010200 65409
028 D020200 0
028 D030200 0
028 D040200 30550
028 E010200 31243
028 E020200 0
028 E030200 0
028 E040200 35365
028 F010200 34011
028 F020200 0
028 F030200 0
028 F040200 23787
028 G010200 233094
028 G020200 0
028 G030200 0
028 G040200 128498
028 H000200 0
070 A010200 Y
070 A020200 Y
070 B010200 Y
070 B020200 N
070 C010200 Y
070 C020200 N
070 D010200 Y
070 D020200 N
070 E010200 Y
070 E020200 N
070 F010200 Y
070 F020200 Y
070 G010200 Y
070 G020200 N
070 H010200 Y
070 H020200 N
070 I010200 Y
070 I020200 N
070 J010200 Y
070 J020200 N
070 K010200 Y
070 K020200 N
070 L010200 Y
070 L020200 Y
070 M010200 Y
070 M020200 Y
070 N010200 Y
070 N020200 N
070 O010200 N
070 O020200 N
070 P010200 Y
070 P020200 N
070 Q010200 N
<PAGE> PAGE 15
070 Q020200 N
070 R010200 N
070 R020200 N
071 A000200 415436
071 B000200 177067
071 C000200 376405
071 D000200 47
072 A000200 12
072 B000200 4277
072 C000200 6773
072 D000200 0
072 E000200 0
072 F000200 3214
072 G000200 0
072 H000200 0
072 I000200 1790
072 J000200 146
072 K000200 0
072 L000200 163
072 M000200 55
072 N000200 174
072 O000200 0
072 P000200 0
072 Q000200 0
072 R000200 40
072 S000200 34
072 T000200 32
072 U000200 7
072 V000200 0
072 W000200 14
072 X000200 5669
072 Y000200 0
072 Z000200 5381
072AA000200 29362
072BB000200 0
072CC010200 0
072CC020200 65812
072DD010200 3473
072DD020200 0
072EE000200 23876
073 A010200 0.2400
073 A020200 0.0000
073 B000200 1.6500
073 C000200 0.0000
074 A000200 1
074 B000200 19644
074 C000200 59069
074 D000200 0
074 E000200 0
074 F000200 447388
074 G000200 0
<PAGE> PAGE 16
074 H000200 0
074 I000200 0
074 J000200 1932
074 K000200 0
074 L000200 1562
074 M000200 2
074 N000200 529598
074 O000200 9763
074 P000200 338
074 Q000200 0
074 R010200 0
074 R020200 0
074 R030200 0
074 R040200 1724
074 S000200 0
074 T000200 517773
074 U010200 22100
074 U020200 1332
074 V010200 21.20
074 V020200 21.19
074 W000200 0.0000
074 X000200 0
074 Y000200 0
075 A000200 0
075 B000200 449659
076 000200 0.00
SIGNATURE THOMAS F. MCDONOUGH
TITLE VICE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Scudder
Large Company Value Fund Annual Report for the fiscal year ended 9/30/98 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> Scudder Large Company Value Fund
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 1,572,589,369
<INVESTMENTS-AT-VALUE> 2,004,169,902
<RECEIVABLES> 7,220,799
<ASSETS-OTHER> 23,043
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,011,413,744
<PAYABLE-FOR-SECURITIES> 11,496,318
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,751,552
<TOTAL-LIABILITIES> 14,247,870
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,411,341,812
<SHARES-COMMON-STOCK> 77,857,803
<SHARES-COMMON-PRIOR> 76,343,193
<ACCUMULATED-NII-CURRENT> 23,122,144
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 131,121,385
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 431,580,533
<NET-ASSETS> 1,997,165,874
<DIVIDEND-INCOME> 46,619,949
<INTEREST-INCOME> 1,968,420
<OTHER-INCOME> 0
<EXPENSES-NET> 20,166,611
<NET-INVESTMENT-INCOME> 28,421,758
<REALIZED-GAINS-CURRENT> 162,388,328
<APPREC-INCREASE-CURRENT> (280,820,721)
<NET-CHANGE-FROM-OPS> (90,010,635)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (18,248,388)
<DISTRIBUTIONS-OF-GAINS> (141,425,011)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 349,010,684
<NUMBER-OF-SHARES-REDEEMED> (467,271,665)
<SHARES-REINVESTED> 152,377,751
<NET-CHANGE-IN-ASSETS> (215,567,264)
<ACCUMULATED-NII-PRIOR> 22,560,347
<ACCUMULATED-GAINS-PRIOR> 110,159,843
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 14,296,878
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 20,166,611
<AVERAGE-NET-ASSETS> 2,280,594,753
<PER-SHARE-NAV-BEGIN> 28.98
<PER-SHARE-NII> 0.36
<PER-SHARE-GAIN-APPREC> (1.59)
<PER-SHARE-DIVIDEND> (0.24)
<PER-SHARE-DISTRIBUTIONS> (1.86)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 25.65
<EXPENSE-RATIO> 0.88
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Scudder
Value Fund Annual Report for the fiscal year ended 9/30/98 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 21
<NAME> Scudder Value Fund - Class A Shares
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> APR-16-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 541,883,455
<INVESTMENTS-AT-VALUE> 526,100,775
<RECEIVABLES> 3,494,604
<ASSETS-OTHER> 2,593
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 529,597,972
<PAYABLE-FOR-SECURITIES> 9,762,765
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,061,938
<TOTAL-LIABILITIES> 11,824,703
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 507,265,428
<SHARES-COMMON-STOCK> 1,331,850
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 4,306,919
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 22,475,916
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (16,274,994)
<NET-ASSETS> 517,773,269
<DIVIDEND-INCOME> 6,772,764
<INTEREST-INCOME> 4,277,004
<OTHER-INCOME> 0
<EXPENSES-NET> 5,669,063
<NET-INVESTMENT-INCOME> 5,380,705
<REALIZED-GAINS-CURRENT> 29,361,650
<APPREC-INCREASE-CURRENT> (65,811,617)
<NET-CHANGE-FROM-OPS> (31,069,262)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 53,828,754
<NUMBER-OF-SHARES-REDEEMED> (22,781,139)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 219,793,490
<ACCUMULATED-NII-PRIOR> 2,399,604
<ACCUMULATED-GAINS-PRIOR> 16,989,838
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,214,035
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,669,063
<AVERAGE-NET-ASSETS> 10,311,142
<PER-SHARE-NAV-BEGIN> 25.42
<PER-SHARE-NII> 0.07
<PER-SHARE-GAIN-APPREC> (4.30)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.19
<EXPENSE-RATIO> 1.34
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Scudder
Value Fund Annual Report for the fiscal year ended 9/30/98 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 22
<NAME> Scudder Value Fund - Class B Shares
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> APR-16-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 541,883,455
<INVESTMENTS-AT-VALUE> 526,100,775
<RECEIVABLES> 3,494,604
<ASSETS-OTHER> 2,593
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 529,597,972
<PAYABLE-FOR-SECURITIES> 9,762,765
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,061,938
<TOTAL-LIABILITIES> 11,824,703
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 507,265,428
<SHARES-COMMON-STOCK> 860,214
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 4,306,919
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 22,475,916
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (16,274,994)
<NET-ASSETS> 517,773,269
<DIVIDEND-INCOME> 6,772,764
<INTEREST-INCOME> 4,277,004
<OTHER-INCOME> 0
<EXPENSES-NET> 5,669,063
<NET-INVESTMENT-INCOME> 5,380,705
<REALIZED-GAINS-CURRENT> 29,361,650
<APPREC-INCREASE-CURRENT> (65,811,617)
<NET-CHANGE-FROM-OPS> (31,069,262)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 21,926,576
<NUMBER-OF-SHARES-REDEEMED> (1,468,241)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 219,793,490
<ACCUMULATED-NII-PRIOR> 2,399,604
<ACCUMULATED-GAINS-PRIOR> 16,989,838
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,214,035
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,669,063
<AVERAGE-NET-ASSETS> 8,111,945
<PER-SHARE-NAV-BEGIN> 25.42
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> (4.31)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.11
<EXPENSE-RATIO> 2.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Scudder
Value Fund Annual Report for the fiscal year ended 9/30/98 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 23
<NAME> Scudder Value Fund - Class C Shares
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> APR-16-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 541,883,455
<INVESTMENTS-AT-VALUE> 526,100,775
<RECEIVABLES> 3,494,604
<ASSETS-OTHER> 2,593
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 529,597,972
<PAYABLE-FOR-SECURITIES> 9,762,765
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,061,938
<TOTAL-LIABILITIES> 11,824,703
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 507,265,428
<SHARES-COMMON-STOCK> 138,908
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 4,306,919
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 22,475,916
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (16,274,994)
<NET-ASSETS> 517,773,269
<DIVIDEND-INCOME> 6,772,764
<INTEREST-INCOME> 4,277,004
<OTHER-INCOME> 0
<EXPENSES-NET> 5,669,063
<NET-INVESTMENT-INCOME> 5,380,705
<REALIZED-GAINS-CURRENT> 29,361,650
<APPREC-INCREASE-CURRENT> (65,811,617)
<NET-CHANGE-FROM-OPS> (31,069,262)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,367,784
<NUMBER-OF-SHARES-REDEEMED> (83,547)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 219,793,490
<ACCUMULATED-NII-PRIOR> 2,399,604
<ACCUMULATED-GAINS-PRIOR> 16,989,838
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,214,035
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,669,063
<AVERAGE-NET-ASSETS> 1,169,942
<PER-SHARE-NAV-BEGIN> 25.42
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> (4.30)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.13
<EXPENSE-RATIO> 2.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Scudder
Value Fund - Scudder Shares for the fiscal year ended 9/30/98 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 24
<NAME> Scudder Value Fund - Scudder Shares
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 541,883,455
<INVESTMENTS-AT-VALUE> 526,100,775
<RECEIVABLES> 3,494,604
<ASSETS-OTHER> 2,593
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 529,597,972
<PAYABLE-FOR-SECURITIES> 9,762,765
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,061,938
<TOTAL-LIABILITIES> 11,824,703
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 507,265,428
<SHARES-COMMON-STOCK> 22,099,599
<SHARES-COMMON-PRIOR> 12,664,615
<ACCUMULATED-NII-CURRENT> 4,306,919
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 22,475,916
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (16,274,994)
<NET-ASSETS> 517,773,269
<DIVIDEND-INCOME> 6,772,764
<INTEREST-INCOME> 4,277,004
<OTHER-INCOME> 0
<EXPENSES-NET> 5,669,063
<NET-INVESTMENT-INCOME> 5,380,705
<REALIZED-GAINS-CURRENT> 29,361,650
<APPREC-INCREASE-CURRENT> (65,811,617)
<NET-CHANGE-FROM-OPS> (31,069,262)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (3,472,885)
<DISTRIBUTIONS-OF-GAINS> (23,876,077)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 358,943,904
<NUMBER-OF-SHARES-REDEEMED> (162,049,236)
<SHARES-REINVESTED> 26,526,859
<NET-CHANGE-IN-ASSETS> 219,793,490
<ACCUMULATED-NII-PRIOR> 2,399,604
<ACCUMULATED-GAINS-PRIOR> 16,989,838
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,214,035
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,669,063
<AVERAGE-NET-ASSETS> 449,658,658
<PER-SHARE-NAV-BEGIN> 23.53
<PER-SHARE-NII> 0.28
<PER-SHARE-GAIN-APPREC> (0.72)
<PER-SHARE-DIVIDEND> (0.24)
<PER-SHARE-DISTRIBUTIONS> (1.65)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 21.20
<EXPENSE-RATIO> 1.23
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Value Equity Trust:
In planning and performing our audit of the financial statements and financial
highlights (hereinafter referred to as "financial statements") of Scudder Large
Company Value Fund, for the year ended September 30, 1998, we considered its
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 Scudder Large Company Value Fund 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, error 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 the internal control components does not reduce to a relatively low level the
risk that misstatements caused by error 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
September 30, 1998.
This report is intended solely for the information and use of management, the
Trustees of Value Equity Trust and the Securities and Exchange Commission.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 6, 1998
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Value Equity Trust:
In planning and performing our audit of the financial statements and financial
highlights (hereinafter referred to as "financial statements") of Value Fund for
the year ended September 30, 1998, we considered its 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 Value Fund 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, error 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 the internal control components does not reduce to a relatively low level the
risk that misstatements caused by error 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 over safeguarding
securities, that we consider to be material weaknesses as defined above as of
September 30, 1998.
This report is intended solely for the information and use of management, the
Trustees of Value Equity Trust and the Securities and Exchange Commission.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 20, 1998
Value Equity Trust
Two International Place
Boston, Massachusetts 02110
September 7, 1998
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Value Fund
Ladies and Gentlemen:
Value Equity Trust (the "Trust") has been established as a
Massachusetts business Trust to engage in the business of an investment company.
Pursuant to the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees has divided the Trust's shares of
beneficial interest, par value $0.01 per share, (the "Shares") into separate
series, or funds, including Value Fund (the "Fund"). Series may be abolished and
dissolved, and additional series established, from time to time by action of the
Trustees.
The Trust, on behalf of the Fund, has selected you to act as the sole
investment manager of the Fund and to provide certain other services, as more
fully set forth below, and you have indicated that you are willing to act as
such investment manager and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Trust on behalf of the Fund
agrees with you as follows:
1. Delivery of Documents. The Trust 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 Trust's
Registration Statement on Form N-1A, as amended from time to time, (the
"Registration Statement") filed by the Trust 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 Trust. The Trust has also furnished you with copies
properly certified or authenticated of each of the following additional
documents related to the Trust and the Fund:
(a) The Declaration dated March 17, 1988, as amended to date.
<PAGE>
(b) By-Laws of the Trust as in effect on the date hereof (the "By-Laws").
(c) Resolutions of the Trustees of the Trust and the shareholders of the Fund
selecting you as investment manager and approving the form of this
Agreement.
(d) Establishment and Designation of Series of Shares of Beneficial Interest
dated April 16, 1998 relating to the Fund.
The Trust 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" and "Scudder Kemper
Investments, Inc."/"Scudder, Stevens & Clark, Inc." trademarks (together, the
"Scudder Marks"), you hereby grant the Trust a nonexclusive right and sublicense
to use (i) the "Scudder" name and mark as part of the Trust's name (the "Fund
Name"), and (ii) the Scudder Marks in connection with the Trust's investment
products and services, in each case only for so long as this Agreement, any
other investment management agreement between you and the Trust, 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 Trust 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
Trust'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 Trust shall not challenge the validity of the Scudder Marks or the
Trademark Owner's ownership thereof. The Trust further agrees that all services
and products it offers in connection with the Scudder Marks shall meet
commercially reasonable standards of quality, as may be determined by you or the
Trademark Owner from time to time, provided that you acknowledge that the
services and products the Trust rendered during the one-year period preceding
the date of this Agreement are acceptable. At your reasonable request, the Trust
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 Trust 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 Trust, or you no longer are a
licensee of the Scudder Marks, the Trust shall (to the extent that, and as soon
as, it lawfully can) cease to use the Fund Name or any other name indicating
that it is advised by, managed by or otherwise connected with you (or any
organization which shall have succeeded to your business as investment manager)
or the Trademark Owner. In no event shall the Trust 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.
2
<PAGE>
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 Trust's Board of
Trustees. 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 Trust or counsel to
you. You shall also make available to the Trust promptly upon request all of the
Fund's investment records and ledgers as are necessary to assist the Trust 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 Trust 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 Trust's Board of Trustees 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 Trust's officers or Board of Trustees 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 Trust 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 Trust's Board of
Trustees 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
3
<PAGE>
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 Trust as
it may reasonably request in the conduct of the Fund's business, subject to the
direction and control of the Trust's Board of Trustees. 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
Trustees, officers and executive employees of the Trust (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 Trust, 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
Trustees 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 Trust; telephone, telex, facsimile, postage and other
4
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communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent, custodians,
subcustodians, transfer agents, dividend disbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; expenses of preparing share
certificates and, except as provided below in this section 5, other expenses in
connection with the issuance, offering, distribution, sale, redemption or
repurchase of securities issued by the Fund; expenses relating to investor and
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 Trust business) of Trustees, officers and
employees of the Trust 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 Trustees and officers of the Trust; costs of
shareholders' and other meetings; and travel expenses (or an appropriate portion
thereof) of Trustees and officers of the Trust who are directors, officers or
employees of you to the extent that such expenses relate to attendance at
meetings of the Board of Trustees of the Trust 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 Trust on behalf of the Fund shall have adopted a plan in
conformity with Rule 12b-1 under the 1940 Act providing that the Fund (or some
other party) shall assume some or all of such expenses. You shall be required to
pay such of the foregoing sales expenses as are not required to be paid by the
principal underwriter pursuant to the underwriting agreement or are not
permitted to be paid by the Fund (or some other party) pursuant to such a plan.
6. Management Fee. For all services to be rendered, payments to be made
and costs to be assumed by you as provided in sections 3, 4 and 5 hereof, the
Trust 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
0.70 of 1 percent of the average daily net assets as defined below of the Fund
for such month; and provided that, effective September 30, 1998, 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 0.65 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.
5
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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 Declaration 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.
7. Avoidance of Inconsistent Position; Services Not Exclusive. In
connection with purchases or sales of portfolio securities and other investments
for the account of the Fund, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of the Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.
Your services to the Fund pursuant to this Agreement are not to be
deemed to be exclusive and it is understood that you may render investment
advice, management and services to others. In acting under this Agreement, you
shall be an independent contractor and not an agent of the Trust. 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.
8. Limitation of Liability of Manager. As an inducement to your
undertaking to render services pursuant to this Agreement, the Trust 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
6
<PAGE>
shall be deemed to protect or purport to protect you against any liability to
the Trust, the Fund or its shareholders to which you would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties, or by reason of your reckless disregard of your
obligations and duties hereunder. Any person, even though also employed by you,
who may be or become an employee of and paid by the Fund shall be deemed, when
acting within the scope of his or her employment by the Fund, to be acting in
such employment solely for the Fund and not as your employee or agent.
9. Duration and Termination of This Agreement. This Agreement shall
remain in force until September 30, 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 Trustees 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 Trustees of the Trust, 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 Trust's Board of Trustees on 60 days'
written notice to you, or by you on 60 days' written notice to the Trust. This
Agreement shall terminate automatically in the event of its assignment.
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.
11. Limitation of Liability for Claims. The Declaration, a copy of
which, together with all amendments thereto, is on file in the Office of the
Secretary of the Commonwealth of Massachusetts, provides that the name "Value
Equity Trust" refers to the Trustees under the Declaration collectively as
Trustees and not as individuals or personally, and that no shareholder of the
Fund, or Trustee, officer, employee or agent of the Trust, shall be subject to
claims against or obligations of the Trust or of the Fund to any extent
whatsoever, but that the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability
as set forth in the Declaration and you agree that the obligations assumed by
the Trust on behalf of the Fund pursuant to this Agreement shall be limited in
all cases to the Fund and its assets, and you shall not seek satisfaction of any
such obligation from the shareholders or any shareholder of the Fund or any
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<PAGE>
other series of the Trust, or from any Trustee, officer, employee or agent of
the Trust. You understand that the rights and obligations of each Fund, or
series, under the Declaration are separate and distinct from those of any and
all other series.
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
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 Trust on behalf of the
Fund.
8
<PAGE>
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 Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
VALUE EQUITY TRUST, on behalf of
Value Fund
By: ______________________________
Vice President
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS, INC.
By: ______________________________
Managing Director
9
Value Equity Trust
Two International Place
Boston, Massachusetts 02110
September 7, 1998
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Scudder Large Company Value Fund
Ladies and Gentlemen:
Value Equity Trust (the "Trust") has been established as a
Massachusetts business Trust to engage in the business of an investment company.
Pursuant to the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees has divided the Trust's shares of
beneficial interest, par value $0.01 per share, (the "Shares") into separate
series, or funds, including Scudder Large Company Value Fund (the "Fund").
Series may be abolished and dissolved, and additional series established, from
time to time by action of the Trustees.
The Trust, on behalf of the Fund, has selected you to act as the sole
investment manager of the Fund and to provide certain other services, as more
fully set forth below, and you have indicated that you are willing to act as
such investment manager and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Trust on behalf of the Fund
agrees with you as follows:
1. Delivery of Documents. The Trust 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 Trust's
Registration Statement on Form N-1A, as amended from time to time, (the
"Registration Statement") filed by the Trust 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 Trust. The Trust has also furnished you with copies
properly certified or authenticated of each of the following additional
documents related to the Trust and the Fund:
(a) The Declaration dated March 17, 1988, as amended to date.
<PAGE>
(b) By-Laws of the Trust as in effect on the date hereof (the "By-Laws").
(c) Resolutions of the Trustees of the Trust and the shareholders of the Fund
selecting you as investment manager and approving the form of this
Agreement.
(d) Establishment and Designation of Series of Shares of Beneficial Interest
dated December 23, 1996 relating to the Fund.
The Trust 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" and "Scudder Kemper
Investments, Inc."/"Scudder, Stevens & Clark, Inc." trademarks (together, the
"Scudder Marks"), you hereby grant the Trust a nonexclusive right and sublicense
to use (i) the "Scudder" name and mark as part of the Trust's name (the "Fund
Name"), and (ii) the Scudder Marks in connection with the Trust's investment
products and services, in each case only for so long as this Agreement, any
other investment management agreement between you and the Trust, 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 Trust 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
Trust'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 Trust shall not challenge the validity of the Scudder Marks or the
Trademark Owner's ownership thereof. The Trust further agrees that all services
and products it offers in connection with the Scudder Marks shall meet
commercially reasonable standards of quality, as may be determined by you or the
Trademark Owner from time to time, provided that you acknowledge that the
services and products the Trust rendered during the one-year period preceding
the date of this Agreement are acceptable. At your reasonable request, the Trust
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 Trust 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 Trust, or you no longer are a
licensee of the Scudder Marks, the Trust shall (to the extent that, and as soon
as, it lawfully can) cease to use the Fund Name or any other name indicating
that it is advised by, managed by or otherwise connected with you (or any
organization which shall have succeeded to your business as investment manager)
or the Trademark Owner. In no event shall the Trust 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.
2
<PAGE>
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 Trust's Board of
Trustees. 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 Trust or counsel to
you. You shall also make available to the Trust promptly upon request all of the
Fund's investment records and ledgers as are necessary to assist the Trust 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 Trust 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 Trust's Board of Trustees 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 Trust's officers or Board of Trustees 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 Trust 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 Trust's Board of
Trustees 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
3
<PAGE>
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 Trust as
it may reasonably request in the conduct of the Fund's business, subject to the
direction and control of the Trust's Board of Trustees. 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
Trustees, officers and executive employees of the Trust (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 Trust, 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
Trustees 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 Trust; telephone, telex, facsimile, postage and other
4
<PAGE>
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent, custodians,
subcustodians, transfer agents, dividend disbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; expenses of preparing share
certificates and, except as provided below in this section 5, other expenses in
connection with the issuance, offering, distribution, sale, redemption or
repurchase of securities issued by the Fund; expenses relating to investor and
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 Trust business) of Trustees, officers and
employees of the Trust 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 Trustees and officers of the Trust; costs of
shareholders' and other meetings; and travel expenses (or an appropriate portion
thereof) of Trustees and officers of the Trust who are directors, officers or
employees of you to the extent that such expenses relate to attendance at
meetings of the Board of Trustees of the Trust 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 Trust on behalf of the Fund shall have adopted a plan in
conformity with Rule 12b-1 under the 1940 Act providing that the Fund (or some
other party) shall assume some or all of such expenses. You shall be required to
pay such of the foregoing sales expenses as are not required to be paid by the
principal underwriter pursuant to the underwriting agreement or are not
permitted to be paid by the Fund (or some other party) pursuant to such a plan.
6. Management Fee. For all services to be rendered, payments to be made
and costs to be assumed by you as provided in sections 3, 4 and 5 hereof, the
Trust 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 $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
0.65 of 1 percent of such portion; and provided that, for any calendar month
during which the average of such values exceeds $1 billion, the fee payable for
that month based on the portion of the average of such values in excess of $1
billion shall be 1/12 of 0.60 of 1 percent of such portion; and provided that,
for any calendar month during which the average of such values exceeds $1.5
billion, the fee payable for that month based on the portion of the average of
such values in excess of $1.5 billion shall be 1/12 of 0.55 of 1 percent of such
portion; and provided that, effective September 30, 1998, for any calendar month
5
<PAGE>
during which the average of such values exceeds $2.0 billion, the fee payable
for that month based on the portion of the average of such values in excess of
$2.0 billion shall be 1/12 of 0.50 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 Declaration 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.
7. Avoidance of Inconsistent Position; Services Not Exclusive. In
connection with purchases or sales of portfolio securities and other investments
for the account of the Fund, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of the Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.
Your services to the Fund pursuant to this Agreement are not to be
deemed to be exclusive and it is understood that you may render investment
advice, management and services to others. In acting under this Agreement, you
shall be an independent contractor and not an agent of the Trust. 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
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affect the size of the position that may be acquired or disposed of for the
Fund.
8. Limitation of Liability of Manager. As an inducement to your
undertaking to render services pursuant to this Agreement, the Trust 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 Trust, the Fund or its shareholders to which you would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties, or by reason of your reckless disregard of your
obligations and duties hereunder. Any person, even though also employed by you,
who may be or become an employee of and paid by the Fund shall be deemed, when
acting within the scope of his or her employment by the Fund, to be acting in
such employment solely for the Fund and not as your employee or agent.
9. Duration and Termination of This Agreement. This Agreement shall
remain in force until September 30, 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 Trustees 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 Trustees of the Trust, 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 Trust's Board of Trustees on 60 days'
written notice to you, or by you on 60 days' written notice to the Trust. This
Agreement shall terminate automatically in the event of its assignment.
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.
11. Limitation of Liability for Claims. The Declaration, a copy of
which, together with all amendments thereto, is on file in the Office of the
Secretary of the Commonwealth of Massachusetts, provides that the name "Value
Equity Trust" refers to the Trustees under the Declaration collectively as
Trustees and not as individuals or personally, and that no shareholder of the
Fund, or Trustee, officer, employee or agent of the Trust, shall be subject to
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claims against or obligations of the Trust or of the Fund to any extent
whatsoever, but that the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability
as set forth in the Declaration and you agree that the obligations assumed by
the Trust on behalf of the Fund pursuant to this Agreement shall be limited in
all cases to the Fund and its assets, and you shall not seek satisfaction of any
such obligation from the shareholders or any shareholder of the Fund or any
other series of the Trust, or from any Trustee, officer, employee or agent of
the Trust. You understand that the rights and obligations of each Fund, or
series, under the Declaration are separate and distinct from those of any and
all other series.
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
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 Trust on behalf of the
Fund.
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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 Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
VALUE EQUITY TRUST, on behalf of
Scudder Large Company Value Fund
By: ______________________________
Vice President
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS, INC.
By: ______________________________
Managing Director
9
VALUE EQUITY TRUST
Two International Place
Boston, MA 02110
September 7, 1998
Scudder Investor Services, Inc.
Two International Place
Boston, Massachusetts 02110
Underwriting Agreement
----------------------
Dear Ladies and Gentlemen:
Equity Value Trust (hereinafter called the "Trust") is a business trust
organized under the laws of Massachusetts and is engaged in the business of an
investment company. The authorized capital of the Trust consists of shares of
beneficial interest, with par value of $0.01 per share ("Shares"), currently
divided into two portfolios ("Portfolio"); however, shares may be divided into
additional Portfolios of the Trust and the Portfolios may be terminated from
time to time. The Trust has selected you to act as principal underwriter (as
such term is defined in Section 2(a)(29) of the Investment Company Act of 1940,
as amended (the "1940 Act")) of the Shares and you are willing to act as such
principal underwriter and to perform the duties and functions of underwriter in
the manner and on the terms and conditions hereinafter set forth. Accordingly,
the Trust hereby agrees with you as follows:
1. Delivery of Documents. The Trust has furnished you with copies
properly certified or authenticated of each of the following:
(a) Declaration of Trust of the Trust, dated March 17, 1988, as
amended to date.
(b) By-Laws of the Trust as in effect on the date hereof.
<PAGE>
(c) Resolutions of the Board of Trustees of the Trust selecting
you as principal underwriter and approving this form of
Agreement.
The Trust will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
The Trust will furnish you promptly with properly certified or
authenticated copies of any registration statement filed by it with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
(the "1933 Act") or the 1940 Act, together with any financial statements and
exhibits included therein, and all amendments or supplements thereto hereafter
filed.
2. Registration and Sale of Additional Shares. The Trust will from time
to time use its best efforts to register under the 1933 Act such number of
Shares not already so registered as you may reasonably be expected to sell on
behalf of the Trust. You and the Trust will cooperate in taking such action as
may be necessary from time to time to comply with requirements applicable to the
sale of Shares by you or the Trust in any states mutually agreeable to you and
the Trust, and to maintain such compliance. This Agreement relates to the issue
and sale of Shares that are duly authorized and registered under the 1933 Act
and available for sale by the Trust, including redeemed or repurchased Shares if
and to the extent that they may be legally sold and if, but only if, the Trust
sees fit to sell them.
3. Sale of Shares. Subject to the provisions of paragraphs 5 and 7
hereof and to such minimum purchase requirements as may from time to time be
currently indicated in the Trust's prospectus or statement of additional
information, you are authorized to sell as agent on behalf of the Trust Shares
authorized for issue and registered under the 1933 Act. You may also purchase as
principal Shares for resale to the public. Such sales will be made by you on
behalf of the Trust by accepting unconditional orders to purchase Shares placed
with you by investors and such purchases will be made by you only after
acceptance by you of such orders. The sales price to the public of Shares shall
be the public offering price as defined in paragraph 6 hereof.
4. Solicitation of Orders. You will use your best efforts (but only in
states in which you may lawfully do so) to obtain from investors unconditional
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orders for Shares authorized for issue by the Trust and registered under the
1933 Act, provided that you may in your discretion refuse to accept orders for
Shares from any particular applicant.
5. Sale of Shares by the Trust. Unless you are otherwise notified by
the Trust, any right granted to you to accept orders for Shares or to make sales
on behalf of the Trust or to purchase Shares for resale will not apply to (i)
Shares issued in connection with the merger or consolidation of any other
investment company with the Trust or its acquisition, by purchase or otherwise,
of all or substantially all of the assets of any investment company or
substantially all the outstanding shares of any such company, and (ii) to Shares
that may be offered by the Trust to shareholders of the Trust by virtue of their
being such shareholders.
6. Public Offering Price. All Shares sold to investors by you will be
sold at the public offering price. The public offering price for all accepted
subscriptions will be the net asset value per Share, determined, in the manner
provided in the Trust's registration statements as from time to time in effect
under the 1933 Act and the 1940 Act, next after the order is accepted by you.
7. Suspension of Sales. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further orders
for Shares shall be accepted by you except unconditional orders placed with you
before you had knowledge of the suspension. In addition, the Trust reserves the
right to suspend sales and your authority to accept orders for Shares on behalf
of the Trust if, in the judgment of a majority of the Board of Trustees or a
majority of the Executive Committee of such Board, if such body exists, it is in
the best interests of the Trust to do so, such suspension to continue for such
period as may be determined by such majority; and in that event, no Shares will
be sold by you on behalf of the Trust while such suspension remains in effect
except for Shares necessary to cover unconditional orders accepted by you before
you had knowledge of the suspension.
8. Portfolio Securities. Portfolio securities of any Portfolio of the
Trust may be bought or sold by or through you and you may participate directly
or indirectly in brokerage commissions or "spread" in respect to transactions in
portfolio securities of any Portfolio of the Trust; provided, however, that all
sums of money received by you as a result of such purchases and sales or as a
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<PAGE>
result of such participation must, after reimbursement of your actual expenses
in connection with such activity, be paid over by you to or for the benefit of
the Trust.
9. Expenses. (a) The Trust will pay (or will enter into arrangements
providing that others than you will pay) all fees and expenses:
(1) in connection with the preparation, setting in type and filing
of any registration statement (including a prospectus and
statement of additional information) under the 1933 Act or the
1940 Act, or both, and any amendments or supplements thereto
that may be made from time to time;
(2) in connection with the registration and qualification of
Shares for sale, or compliance with other conditions
applicable to the sale of Shares in the various jurisdictions
in which the Trust shall determine it advisable to sell such
Shares (including registering the Trust as a broker or dealer
or any officer of the Trust or other person as agent or
salesman of the Trust in any such jurisdictions);
(3) of preparing, setting in type, printing and mailing any
notice, proxy statement, report, prospectus or other
communication to shareholders of the Trust in their capacity
as such;
(4) of preparing, setting in type, printing and mailing
prospectuses annually, and any supplements thereto, to
existing shareholders;
(5) in connection with the issue and transfer of Shares resulting
from the acceptance by you of orders to purchase Shares placed
with you by investors, including the expenses of printing and
mailing confirmations of such purchase orders and the expenses
of printing and mailing a prospectus included with the
confirmation of such orders;
(6) of any issue taxes or any initial transfer taxes;
(7) of WATS (or equivalent) telephone lines other than the portion
allocated to you in this paragraph 9;
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(8) of wiring funds in payment of Share purchases or in
satisfaction of redemption or repurchase requests, unless such
expenses are paid for by the investor or shareholder who
initiates the transaction;
(9) of the cost of printing and postage of business reply
envelopes sent to Trust shareholders;
(10) of one or more CRT terminals connected with the computer
facilities of the transfer agent other than the portion
allocated to you in this paragraph 9;
(11) permitted to be paid or assumed by the Trust pursuant to a
plan ("12b-1 Plan"), if any, adopted by the Trust in
conformity with the requirements of Rule 12b-1 under the 1940
Act ("Rule 12b-1") or any successor rule, notwithstanding any
other provision to the contrary herein;
(12) of the expense of setting in type, printing and postage of the
periodic newsletter to shareholders other than the portion
allocated to you in this paragraph 9; and
(13) of the salaries and overhead of persons employed by you as
shareholder representatives other than the portion allocated
to you in this paragraph 9.
b) You shall pay or arrange for the payment of all fees and expenses:
(1) of printing and distributing any prospectuses or reports
prepared for your use in connection with the offering of
Shares to the public;
(2) of preparing, setting in type, printing and mailing any other
literature used by you in connection with the offering of
Shares to the public;
(3) of advertising in connection with the offering of Shares to
the public;
(4) incurred in connection with your registration as a broker or
dealer or the registration or qualification of your officers,
trustees, agents or representatives under Federal and state
laws;
(5) of that portion of WATS (or equivalent) telephone lines,
allocated to you on the basis of use by investors (but not
shareholders) who request information or prospectuses;
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<PAGE>
(6) of that portion of the expenses of setting in type, printing
and postage of the periodic newsletter to shareholders
attributable to promotional material included in such
newsletter at your request concerning investment companies
other than the Trust or concerning the Trust to the extent you
are required to assume the expense thereof pursuant to
paragraph 9(b)(8), except such material which is limited to
information, such as listings of other investment companies
and their investment objectives, given in connection with the
exchange privilege as from time to time described in the
Trust's prospectus;
(7) of that portion of the salaries and overhead of persons
employed by you as shareholder representatives attributable to
the time spent by such persons in responding to requests from
prospective investors and shareholders for information about
the Trust;
(8) of any activity which is primarily intended to result in the
sale of Shares, unless a 12b-1 Plan shall be in effect which
provides that the Trust shall bear some or all of such
expenses, in which case the Trust shall bear such expenses in
accordance with such Plan; and
(9) of that portion of one or more CRT terminals connected with
the computer facilities of the transfer agent attributable to
your use of such terminal(s) to gain access to such of the
transfer agent's records as also serve as your records.
Expenses which are to be allocated between you and the Trust shall be
allocated pursuant to reasonable procedures or formulae mutually agreed upon
from time to time, which procedures or formulae shall to the extent practicable
reflect studies of relevant empirical data.
10. Conformity with Law. You agree that in selling Shares you will duly
conform in all respects with the laws of the United States and any state in
which Shares may be offered for sale by you pursuant to this Agreement and to
the rules and regulations of the National Association of Securities Dealers,
Inc., of which you are a member.
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11. Independent Contractor. You shall be an independent contractor and
neither you nor any of your officers or employees is or shall be an employee of
the Trust in the performance of your duties hereunder. You shall be responsible
for your own conduct and the employment, control and conduct of your agents and
employees and for injury to such agents or employees or to others through your
agents or employees. You assume full responsibility for your agents and
employees under applicable statutes and agree to pay all employee taxes
thereunder.
12. Indemnification. You agree to indemnify and hold harmless the Trust
and each of its trustees and officers and each person, if any, who controls the
Trust within the meaning of Section 15 of the 1933 Act, against any and all
losses, claims, damages, liabilities or litigation (including legal and other
expenses) to which the Trust or such trustees, officers, or controlling person
may become subject under such Act, under any other statute, at common law or
otherwise, arising out of the acquisition of any Shares by any person which (i)
may be based upon any wrongful act by you or any of your employees or
representatives, or (ii) may be based upon any untrue statement or alleged
untrue statement of a material fact contained in a registration statement
(including a prospectus or statement of additional information) covering Shares
or any amendment thereof or supplement thereto or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading if such statement or
omission was made in reliance upon information furnished to the Trust by you, or
(iii) may be incurred or arise by reason of your acting as the Trust's agent
instead of purchasing and reselling Shares as principal in distributing the
Shares to the public, provided, however, that in no case (i) is your indemnity
in favor of a trustee or officer or any other person deemed to protect such
trustee or officer or other person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of his duties or by reason of his
reckless disregard of obligations and duties under this Agreement or (ii) are
you to be liable under your indemnity agreement contained in this paragraph with
respect to any claim made against the Trust or any person indemnified unless the
Trust or such person, as the case may be, shall have notified you in writing
within a reasonable time after the summons or other first legal process giving
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<PAGE>
information of the nature of the claims shall have been served upon the Trust or
upon such person (or after the Trust or such person shall have received notice
of such service on any designated agent), but failure to notify you of any such
claim shall not relieve you from any liability which you may have to the Trust
or any person against whom such action is brought otherwise than on account of
your indemnity agreement contained in this paragraph. You shall be entitled to
participate, at your own expense, in the defense, or, if you so elect, to assume
the defense of any suit brought to enforce any such liability, but if you elect
to assume the defense, such defense shall be conducted by counsel chosen by you
and satisfactory to the Trust, to its officers and trustees, or to any
controlling person or persons, defendant or defendants in the suit. In the event
that you elect to assume the defense of any such suit and retain such counsel,
the Trust, such officers and trustees or controlling person or persons,
defendant or defendants in the suit shall bear the fees and expenses of any
additional counsel retained by them, but, in case you do not elect to assume the
defense of any such suit, you will reimburse the Trust, such officers and
trustees or controlling person or persons, defendant or defendants in such suit
for the reasonable fees and expenses of any counsel retained by them. You agree
promptly to notify the Trust of the commencement of any litigation or
proceedings against it in connection with the issue and sale of any Shares.
The Trust agrees to indemnify and hold harmless you and each of your
trustees and officers and each person, if any, who controls you within the
meaning of Section 15 of the 1933 Act, against any and all losses, claims,
damages, liabilities or litigation (including legal and other expenses) to which
you or such trustees, officers or controlling person may become subject under
such Act, under any other statute, at common law or otherwise, arising out of
the acquisition of any Shares by any person which (i) may be based upon any
wrongful act by the Trust or any of its employees or representatives, or (ii)
may be based upon any untrue statement or alleged untrue statement of a material
fact contained in a registration statement (including a prospectus or statement
of additional information) covering Shares or any amendment thereof or
supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading if such statement or omission was made in reliance upon
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<PAGE>
information furnished to you by the Trust; provided, however, that in no case
(i) is the Trust's indemnity in favor of you, a trustee or officer or any other
person deemed to protect you, such trustee or officer or other person against
any liability to which any such person would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his
duties or by reason of his reckless disregard of obligations and duties under
this Agreement or (ii) is the Trust to be liable under its indemnity agreement
contained in this paragraph with respect to any claims made against you or any
such trustee, officer or controlling person unless you or such trustee, officer
or controlling person, as the case may be, shall have notified the Trust in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon you or
upon such trustee, officer or controlling person (or after you or such trustee,
officer or controlling person shall have received notice of such service on any
designated agent), but failure to notify the Trust of any such claim shall not
relieve it from any liability which it may have to the person against whom such
action is brought otherwise than on account of its indemnity agreement contained
in this paragraph. The Trust will be entitled to participate at its own expense
in the defense, or, if it so elects, to assume the defense of any suit brought
to enforce any such liability, but if the Trust elects to assume the defense,
such defense shall be conducted by counsel chosen by it and satisfactory to you,
your trustees, officers, or controlling person or persons, defendant or
defendants in the suit. In the event that the Trust elects to assume the defense
of any such suit and retain such counsel, you, your trustees, officers or
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, but, in case
the Trust does not elect to assume the defense of any such suit, it will
reimburse you or such trustees, officers or controlling person or persons,
defendant or defendants in the suit, for the reasonable fees and expenses of any
counsel retained by them. The Trust agrees promptly to notify you of the
commencement of any litigation or proceedings against it or any of its officers
or trustees in connection with the issuance or sale of any Shares.
13. Authorized Representations. The Trust is not authorized to give any
information or to make any representations on behalf of you other than the
information and representations contained in a registration statement (including
a prospectus
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or statement of additional information) covering Shares, as such registration
statement and prospectus may be amended or supplemented from time to time.
You are not authorized to give any information or to make any
representations on behalf of the Trust or in connection with the sale of Shares
other than the information and representations contained in a registration
statement (including a prospectus or statement of additional information)
covering Shares, as such registration statement may be amended or supplemented
from time to time. No person other than you is authorized to act as principal
underwriter (as such term is defined in the 1940 Act) for the Trust.
14. Duration and Termination of this Agreement. This Agreement shall
become effective upon the date first written above and will remain in effect
until September 30, 1999 and from year to year thereafter, but only so long as
such continuance is specifically approved at least annually by the vote of a
majority of the trustees who are not interested persons of you or of the Trust,
cast in person at a meeting called for the purpose of voting on such approval,
and by vote of the Board of Trustees or of a majority of the outstanding voting
securities of the Trust. This Agreement may, on 60 days' written notice, be
terminated at any time without the payment of any penalty, by the Board of
Trustees of the Trust, by a vote of a majority of the outstanding voting
securities of the Trust, or by you. This Agreement will automatically terminate
in the event of its assignment. In interpreting the provisions of this paragraph
14, the definitions contained in Section 2(a) of the 1940 Act (particularly the
definitions of "interested person", "assignment" and "majority of the
outstanding voting securities"), as modified by any applicable order of the
Securities and Exchange Commission, shall be applied.
15. Amendment of this Agreement. No provisions of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. If the Trust should at any time deem it
necessary or advisable in the best interests of the Trust that any amendment of
this Agreement be made in order to comply with the recommendations or
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requirements of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under state or federal tax laws and should
notify you of the form of such amendment, and the reasons therefor, and if you
should decline to assent to such amendment, the Trust may terminate this
Agreement forthwith. If you should at any time request that a change be made in
the Trust's Declaration of Trust or By-laws or in its methods of doing business,
in order to comply with any requirements of federal law or regulations of the
Securities and Exchange Commission or of a national securities association of
which you are or may be a member relating to the sale of shares of the Trust,
and the Trust should not make such necessary change within a reasonable time,
you may terminate this Agreement forthwith.
16. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit 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.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract.
Very truly yours,
EQUITY VALUE TRUST
By: _____________________________
Thomas F. McDonough
Vice President
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The foregoing agreement is hereby accepted as of the foregoing date
thereof.
SCUDDER INVESTOR SERVICES, INC.
By:________________________________
Daniel Pierce
Vice President
12
