SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the Securities
Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of
the Commission Only
(as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
INVESTMENT TRUST
(Name of Registrant as Specified in Its Charter/Declaration of Trust)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identity the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
SCUDDER S&P 500 INDEX FUND
Investment Trust
------------------------------
Notice of Special Meeting of Shareholders
To Be Held October 13, 1999
A Special Meeting of shareholders of Scudder S&P 500 Index Fund (the
"Fund") will be held at the offices of Scudder Kemper Investments, Inc., 13th
Floor, Two International Place, Boston, Massachusetts 02110 on October 13, 1999
at 9:00 a.m. Eastern time (the "Special Meeting"). The Fund is a series of
Investment Trust (the "Trust"), an open-end management investment company
organized under the laws of the Commonwealth of Massachusetts. The Fund
operates as a feeder fund in a master-feeder fund arrangement with the Equity
500 Index Portfolio (the "Portfolio"). As a feeder fund, the Fund seeks to
achieve its investment objective by investing substantially all of its assets
in the Portfolio, which has the same investment objective as the Fund. The
Portfolio is a registered open-end management investment company organized as a
trust under the laws of the State of New York. Pursuant to the requirements of
the Investment Company Act of 1940, as amended, applicable to master-feeder
fund arrangements, the Fund's voting rights with respect to the Portfolio
shares that it holds are being passed through to the Fund's own shareholders.
The Special Meeting is being held to consider and vote on the following
matters for the Fund, as indicated below and more fully described in the
accompanying Proxy Statement, and such other matters as may properly come
before the meeting or any adjournments thereof:
PROPOSAL 1: To approve or disapprove a new investment advisory agreement
between the Portfolio and Bankers Trust Company ("Bankers Trust");
PROPOSAL 2: To elect Trustees to the Board of Trustees of the Portfolio to hold
office until their respective successors have been duly elected and
qualified or until their earlier resignation or removal; and
PROPOSAL 3: To ratify or reject the selection of PricewaterhouseCoopers LLP as
the Portfolio's independent accountants for the current fiscal year.
The appointed proxies will vote in their discretion on any other business
as may properly come before the Special Meeting or any adjournment thereof.
The new investment advisory agreement (the "New Advisory Agreement")
between the Portfolio and Bankers Trust Company ("Bankers Trust") will contain
substantially the same terms and conditions, except for the dates of execution
and termination, as the prior investment advisory agreement pursuant to which
services were provided to the Portfolio. As more fully discussed in the
accompanying Proxy
<PAGE>
Statement, approval of the New Advisory Agreement, which provides for the same
services to be provided by Bankers Trust at the same fees as the prior advisory
agreement, is generally required due to the merger of Circle Acquisition
Corporation, a wholly-owned subsidiary of Deutsche Bank AG, with and into
Bankers Trust Corporation, the parent company of Bankers Trust.
The close of business on August 17, 1999 has been fixed as the record date
for the determination of the shareholders of the Fund entitled to notice of,
and to vote at, the Special Meeting. You are cordially invited to attend the
Special Meeting.
This notice and related proxy materials are first being mailed to
shareholders on or about September 3, 1999. This proxy is being solicited on
behalf of the Board of Trustees of the Trust.
By Order of the Board of Trustees of the Trust,
/s/ John Millette
John Millette
Secretary
September 2, 1999
IMPORTANT -- We urge you to sign and date the enclosed proxy card and
return it in the enclosed addressed envelope which requires no postage and is
intended for your convenience. Your prompt return of the enclosed proxy card
may save the necessity and expense of further solicitations to ensure a quorum
at the Special Meeting. If you can attend the Special Meeting and wish to vote
your shares in person at that time, you will be able to do so.
<PAGE>
SCUDDER S&P 500 INDEX FUND
Investment Trust
Two International Place
Boston, Massachusetts 02110
------------------------------
PROXY STATEMENT
This Proxy Statement ("Proxy Statement") is being furnished in connection
with the solicitation of proxies by the Board of Trustees of Investment Trust
(the "Trust") for use at the Special Meeting of Shareholders of Scudder S&P 500
Index Fund (the "Fund"), a series of the Trust, to be held at the offices of
Scudder Kemper Investments, Inc. ("Scudder Kemper"), 13th Floor, Two
International Place, Boston, Massachusetts 02110 on October 13, 1999 at 9:00
a.m., Eastern time and at any and all adjournments thereof (the "Special
Meeting"). This Proxy Statement, the Notice of Special Meeting and the
accompanying proxy card ("Proxy") are expected to be mailed to shareholders on
or about September 3, 1999.
The Fund operates as a feeder fund in a master-feeder fund arrangement
with Equity 500 Index Portfolio (the "Portfolio"). The Portfolio is a
registered open-end management investment company organized as a trust under
the laws of the State of New York. As a feeder fund, the Fund seeks to achieve
its investment objective by investing substantially all of its assets in the
Portfolio, which has the same investment objective as the Fund.
For simplicity, actions are described in this Proxy Statement as being
taken by the Fund, which is a series of the Trust, although all actions are
actually taken by the Trust on behalf of the Fund. Some actions described as
taken by or with respect to the Fund are actually actions to be taken by the
Portfolio.
Your vote and the vote of other shareholders of the Fund determine how the
Fund will vote its shares in the Portfolio. See "Voting Rights in a
Master-Feeder Structure."
The Special Meeting is being held to consider and vote on the following
matters for the Fund, as indicated below and described more fully under the
Proposals discussed herein, and such other matters as may properly come before
the Special Meeting:
PROPOSAL 1: To approve or disapprove a new investment advisory agreement
between the Portfolio and Bankers Trust Company ("Bankers Trust");
PROPOSAL 2: To elect Trustees to the Board of Trustees of the Portfolio to hold
office until their respective successors have been duly elected and
qualified or until their earlier resignation or removal; and
<PAGE>
PROPOSAL 3: To ratify or reject the selection of PricewaterhouseCoopers LLP as
the Portfolio's independent accountants for the current fiscal year.
The appointed proxies will vote in their discretion on any other business
as may properly come before the Special Meeting or any adjournment thereof.
Any shareholder giving a Proxy has the power to revoke it by mail
(addressed to the Secretary at the principal executive office of the Fund, c/o
Scudder Kemper Investments, Inc., 13th Floor, Two International Place, Boston,
Massachusetts 02110) or in person at the Special Meeting, by executing a
superseding Proxy or by submitting a notice of revocation to the Fund. All
properly executed proxies received in time for the Special Meeting will be
voted as specified in the Proxy or, if no specification is made, in favor of
the Proposals referred to in the Proxy Statement.
The presence at the Special Meeting, in person or by proxy, of the holders
of a majority of the shares of the Fund entitled to be cast shall be necessary
and sufficient to constitute a quorum for the transaction of business. In the
event that the necessary quorum to transact business or the vote required to
approve the Proposals is not obtained at the Special Meeting, the persons named
as proxies may propose one or more adjournments of the Special Meeting in
accordance with applicable law to permit further solicitation of proxies with
respect to the Proposals. Any such adjournment as to the Proposals will require
the affirmative vote of the holders of a majority of the Fund's shares present
in person or by proxy at the Special Meeting. The persons named as proxies will
vote in favor of such adjournment those proxies which they are entitled to vote
in favor of the Proposals and will vote against any such adjournment those
proxies to be voted against the Proposals. For purposes of determining the
presence of a quorum for transacting business at the Special Meeting,
abstentions and broker "non-votes" will be treated as shares that are present
but which have not been voted. Broker "non-votes" are proxies received by the
Fund from brokers or nominees when the broker or nominee has neither received
instructions from the beneficial owner or other persons entitled to vote nor
has discretionary power to vote on a particular matter. Accordingly,
shareholders are urged to forward their voting instructions promptly.
Holders of record of the shares of the Fund at the close of business on
August 17, 1999 (the "Record Date"), as to any matter on which they are
entitled to vote, will be entitled to one vote per share on all business of the
Special Meeting. As of August 17, 1999 there were 15,563,824 outstanding shares
of the Fund.
To the best of the Trust's knowledge, as of August 17, 1999, no person
owned beneficially more than 5% of the Fund's outstanding shares.
To the best of the Trust's knowledge, as of August 17, 1999, collectively,
the Trustees and officers of the Trust owned less than 1% of the outstanding
shares of the Fund.
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The Fund provides periodic reports to all of its shareholders which
highlight relevant information, including investment results and a review of
portfolio changes. You may receive an additional copy of the most recent annual
report for the Fund and a copy of any more recent semi-annual report, without
charge, by calling 800-225-2470 or writing the Fund, c/o Scudder Kemper
Investments, Inc., 13th Floor, Two International Place, Boston, Massachusetts
02110.
VOTING RIGHTS IN A MASTER-FEEDER STRUCTURE.
The Fund operates as a feeder fund in a master-feeder fund arrangement
with the Portfolio, which serves as the master fund. As a feeder fund, the Fund
seeks to achieve its investment objective by investing substantially all of its
assets in the Portfolio, which has the same investment objective as the Fund.
The Portfolio invests directly in securities. Pursuant to the requirements of
the 1940 Act applicable to master-feeder fund arrangements, the Fund's voting
rights with respect to the Portfolio shares that the Fund holds are being
passed through to the Fund's own shareholders. As a result, shareholders of the
Fund are being asked to approve the Proposals.
PROPOSAL 1: APPROVAL OF NEW INVESTMENT ADVISORY
AGREEMENT BETWEEN THE PORTFOLIO AND BANKERS TRUST
Background
As described in more detail below, the shareholders of the Fund are being
asked to approve a new investment advisory agreement (the "New Advisory
Agreement") between the Portfolio and Bankers Trust. The prior investment
advisory agreement (the "Prior Advisory Agreement") between the Portfolio and
Bankers Trust may have automatically terminated due to the merger of Bankers
Trust and Deutsche Bank, A.G. ("Deutsche Bank"), as described below. The
Portfolio has asked the Fund and its other feeder funds to approve the New
Advisory Agreement. Pursuant to the Investment Company Act of 1940, as amended
(the "1940 Act"), the Fund is seeking voting instructions from its shareholders
as to how to vote on the New Advisory Agreement and will vote its shares in the
Portfolio proportionately in accordance with such voting instructions.
The Portfolio and the Fund. As indicated earlier, the Portfolio is a
registered open-end management investment company organized as a trust under
the laws of the State of New York. Bankers Trust, a banking corporation
organized under the laws of the State of New York, located at 130 Liberty
Street (One Bankers Trust Plaza), New York, New York 10006, serves as the
investment adviser, custodian, transfer agent, and administrator of the
Portfolio. Bankers Trust is a wholly-owned subsidiary of Bankers Trust
Corporation ("BT Corporation"), a registered bank holding company organized
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under the laws of the State of New York. BT Corporation is located at 130
Liberty Street (One Bankers Trust Plaza), New York, NY 10006. ICC Distributors,
Inc., located at Two Portland Square, Portland, Maine 04101, serves as the
principal underwriter and sub-administrator for the Portfolio.
The Fund retains the investment management firm of Scudder Kemper
Investments, Inc. (the "Manager"), a Delaware corporation, as investment
manager to the Fund pursuant to an investment management agreement. As
investment manager to the Fund, the Manager monitors the Fund's investments in
the Portfolio subject to the authority of and supervision by the Trust's Board
of Trustees. The Manager also provides shareholder services, administration and
distribution assistance to the Fund pursuant to an administrative services
agreement.
The New Advisory Agreement between the Portfolio and Bankers Trust will
contain substantially the same terms and conditions, except for the dates of
execution, effectiveness and initial term, as the Prior Advisory Agreement
pursuant to which services were provided to the Portfolio. As more fully
discussed below, approval of the New Advisory Agreement, which provides for the
same services to be provided by Bankers Trust at the same fees, is generally
required due to the Merger (as defined below) pursuant to which Bankers Trust
became a subsidiary of Deutsche Bank.
The Investment Advisory Agreements.
The Prior Investment Advisory Agreement. Prior to June 4, 1999, Bankers
Trust served as investment adviser to the Portfolio (as discussed earlier)
pursuant to the Prior Advisory Agreement. The Prior Advisory Agreement was
initially approved by the Board of the Portfolio and the Board of the Trust,
including a majority of the Trustees of each such Board who are not "interested
persons" of the Portfolio or the Trust, respectively (as defined under the 1940
Act) ("Independent Trustees"). The Prior Advisory Agreement was last submitted
to a vote of the shareholders of the Portfolio on its inception date of April
8, 1992.
The Merger. On November 30, 1998, BT Corporation, Deutsche Bank and Circle
Acquisition Corporation, a wholly-owned subsidiary of Deutsche Bank ("Circle
Corporation"), entered into a merger agreement (the "Merger Agreement").
Pursuant to the terms of the Merger Agreement, Circle Corporation merged with
and into BT Corporation on June 4, 1999, with BT Corporation continuing as the
surviving entity (the "Merger"). Since the Merger, BT Corporation, along with
its affiliates, has continued to offer the same range of financial products and
services, including investment advisory services, that it offered prior to the
Merger.
As a result of the Merger, BT Corporation became a wholly-owned subsidiary
of Deutsche Bank. Deutsche Bank is a banking company with limited liability
organized under the laws of the Federal Republic of Germany. Deutsche Bank is
the parent com-
4
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pany of a group consisting of banks, capital markets companies, fund management
companies, mortgage banks, a property finance company, installment financing
and leasing companies, insurance companies, research and consultancy companies
and other domestic and foreign companies ("Deutsche Bank Group"). At March 31,
1999 the Deutsche Bank Group had total assets of US $727 billion. The Deutsche
Bank Group's capital and reserves as of March 31, 1999 were US $19.6 billion.
Impact of the Merger on the Prior Advisory Agreement. Section 15(a) of the
1940 Act provides, in pertinent part, that "[i]t shall be unlawful for any
person to serve or act as investment adviser of a registered investment
company, except pursuant to a written contract, which contract, whether with
such registered company or with an investment adviser of such registered
company, has been approved by the vote of a majority of the outstanding voting
securities of such registered company . . . . ." Section 15(a)(4) of the 1940
Act further requires that such written contract provide for automatic
termination in the event of its assignment. Section 2(a)(4) of the 1940 Act
defines "assignment" to include any direct or indirect transfer of a contract
by the assignor.
While it may be argued otherwise, consummation of the Merger may have
resulted in an "assignment" of the Prior Advisory Agreement within the meaning
of the 1940 Act, terminating the agreement as of the date of the Merger
according to its terms and the 1940 Act. Specifically, as Bankers Trust is a
wholly-owned subsidiary of BT Corporation, the merger of Circle Corporation
with and into BT Corporation could be deemed to have resulted in a change in
control of Bankers Trust and, consequently, an "assignment" of the Prior
Advisory Agreement with Bankers Trust.
The New Advisory Agreement. The New Advisory Agreement, the form of which
is attached to this Proxy Statement as Exhibit A, became effective as of June
4, 1999, the date of the consummation of the Merger. The New Advisory Agreement
will remain in effect until September 30, 2000 (unless sooner terminated), and
shall remain in effect from year to year thereafter if approved annually (1) by
the Portfolio's Board or by the holders of a majority of the Portfolio's
outstanding voting securities (i.e., the feeder funds) and (2) by a majority of
the Independent Trustees of the Portfolio's Board. Like the Prior Advisory
Agreement, the New Advisory Agreement will terminate upon its assignment and is
terminable, without penalty, (1) on 60 days' written notice by the Portfolio's
Board, (2) by a "majority vote of the outstanding voting securities" of the
Portfolio (as defined in the 1940 Act), or (3) upon 60 days' written notice by
Bankers Trust.
The terms and conditions of the New Advisory Agreement, other than its
dates of execution and termination, and initial term, are substantially the
same as those of the Prior Advisory Agreement. Under the terms of the New
Advisory Agreement, as under the Prior Advisory Agreement, Bankers Trust agrees
to furnish the Portfolio with investment advisory and other services in
connection with a continuous investment
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program for the Portfolio, including investment research and management with
respect to all securities, investments, cash and cash equivalents in the
portfolios. Subject to the supervision and control of the Portfolio's Board,
Bankers Trust agrees (a) to conform to all applicable rules and regulations of
the Securities and Exchange Commission (the "Commission"), including the
Securities Act of 1933, as amended (the "1933 Act"), the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), the 1940 Act and the Investment
Advisers Act of 1940, as amended (the "Advisers Act"), and will conduct its
activities under the New Advisory Agreement in accordance with regulations of
the Board of Governors of the Federal Reserve System pertaining to the
investment advisory activities of bank holding companies and their
subsidiaries, (b) provide the services rendered by it in accordance with the
Portfolio's investment objective and policies as stated in the Prospectus and
Statement of Additional Information of the Fund, as from time to time in
effect, and the Portfolio's then current registration statement on form N-1A as
filed with the Commission (the "Registration Statement") and the then current
Offering Memorandum if the Portfolio is not registered under the 1933 Act, (c)
place orders pursuant to its investment determination for the Portfolio either
directly with the issuer or with any broker or dealer selected by it, (d)
determine from time to time what securities or other investments will be
purchased, sold or retained by the Portfolio, and (e) maintain books and
records with respect to the securities transactions of the Portfolio and render
to the Portfolio's Board such periodic and special reports as it may request.
The investment advisory fee rate charged to the Portfolio under the New
Advisory Agreement is the same as the advisory fee rate charged under the Prior
Advisory Agreement. Bankers Trust is paid a fee under the New Advisory
Agreement for its services, calculated daily and paid monthly, equal, on an
annual basis, to 0.075%. Prior to May 6, 1998, the advisory fee under the Prior
Advisory Agreement was payable at an annual rate of 0.10% of the Portfolio's
daily net assets. The Portfolio paid Bankers Trust an investment management fee
of $3,186,503 for the most recently completed fiscal year.
The services of Bankers Trust are not deemed to be exclusive and nothing
in the New Advisory Agreement prevents Bankers Trust or its affiliates from
providing similar services to other investment companies and other clients
(whether or not their investment objectives and policies are similar to those
of the Portfolio) or from engaging in other activities. In addition, Bankers
Trust is obligated to pay expenses associated with providing the services
contemplated by the New Advisory Agreement. The Portfolio bears certain other
expenses including the fees of the Portfolio's Board. The Portfolio also pays
any extraordinary expenses incurred.
Under the New Advisory Agreement, as under the Prior Advisory Agreement,
Bankers Trust will exercise its best judgment in rendering its advisory
services. Bankers Trust shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Portfolio in connection with the
matters to which the New Advisory Agreement relates, provided that nothing
therein shall be deemed to protect or purport
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to protect Bankers Trust against any liability to the Portfolio or to its
shareholders to which Bankers Trust could otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of Bankers Trust's reckless disregard of
its obligations and duties under the New Advisory Agreement.
The Fund, as a shareholder of the Portfolio, is not being asked to approve
or disapprove the Merger or the Merger Agreement; rather, it is being asked
under Proposal 1 to approve and continue the New Advisory Agreement for the
Portfolio. Other than the execution and termination dates, and the initial term
of the agreements, the New Advisory Agreement, which has been in effect since
June 4, 1999, contains substantially the same terms and conditions as the Prior
Advisory Agreement. The advisory fee rate charged to the Portfolio under the
Prior Advisory Agreement has continued to apply under the New Advisory
Agreement.
Bankers Trust has advised the Portfolio that several of its senior
investment management personnel have departed Bankers Trust since the Merger.
However, Bankers Trust has advised the Portfolio that it can expect to continue
to receive the same level and quality of services under the New Advisory
Agreement as it received under the Prior Advisory Agreement. Bankers Trust has
represented to the Portfolio's Board that in the event of any future material
change in the investment management personnel of Bankers Trust, Bankers Trust
will promptly apprise and consult with the Board to ensure that the Board,
including a majority of the Board's Independent Trustees, is satisfied that the
services provided by Bankers Trust will not be diminished in scope and quality.
The Exemptive Order. On May 25, 1999, Bankers Trust was granted an
exemptive order (the "Exemptive Order") by the Commission permitting
implementation without obtaining prior shareholder approval of the New Advisory
Agreement during an interim period beginning on the date the Merger was
consummated (i.e. June 4, 1999) and continuing for a period of up to 150 days
following such date, but in no event later than November 30, 1999. Under the
terms of the Exemptive Order, Bankers Trust is allowed to receive advisory fees
pursuant to the New Advisory Agreement, provided that these fees are held in
escrow pending shareholder approval of the New Advisory Agreement. In
accordance with the Exemptive Order, the advisory fees charged to the Portfolio
and paid to Bankers Trust, as applicable, under the New Advisory Agreement have
been held in an interest bearing escrow account and the Portfolio expects to
continue to deposit these fees in escrow until approval of the New Advisory
Agreement by the shareholders of the Portfolio has been obtained. If the New
Advisory Agreement is not approved by the shareholders, the advisory fees held
in escrow with respect to the New Advisory Agreement will be paid over to the
Portfolio. As of June 30, 1999, the amount in escrow totaled $447,425.44.
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Information Concerning Bankers Trust
Bankers Trust is a bank and, therefore, not required to register as an
investment adviser under the Advisers Act. Bankers Trust provides a broad range
of commercial banking and financial services, including originating loans and
other forms of credit, accepting deposits and arranging financings. In addition
to providing investment advisory services to the Portfolio, Bankers Trust
serves as investment adviser and sub-adviser to 64 other investment companies.
(See Appendix 1 for the fees and other information regarding investment
companies advised by Bankers Trust that have investment objectives similar to
those of the Portfolio.) As of March 31, 1999, Bankers Trust and its affiliates
had over $313 billion in assets under management, including $6.3 billion in
assets in the Portfolio.
The names, business addresses and principal occupations of the current
directors and the principal executive officer of Bankers Trust are set forth
below.
<TABLE>
<CAPTION>
Name, Position with
Bankers Trust, and Address Principal Occupation
- ------------------------------------- ---------------------------------------------
<S> <C>
Josef Ackermann Member, Board of Managing Directors
Chairman of the Board, Deutsche Bank A.G.
Chief Executive Officer
and President, Bankers Trust Company
Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
Hans Angermueller Shearman & Sterling, of counsel
Director
599 Lexington Avenue
New York, NY 10022
George B. Beitzel Member, Board of Directors of:
Director Computer Task Group, Inc.
29 King Street Phillips Petroleum Company
Chappaqua, NY 10514-3432 TIG Holdings Inc.
William R. Howell Chairman Emeritus, J.C. Penney Company, Inc.
Director Member, Board of Directors/Trustees of:
P.O. Box 10001 Exxon Corporation
Dallas, TX 75301-1109 Halliburton Company
National Organization on Disability
National Retail Federation
Southern Methodist University (Chairman)
Warner-Lambert Company
</TABLE>
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<TABLE>
<CAPTION>
Name, Position with
Bankers Trust, and Address Principal Occupation
- ----------------------------- -------------------------------------
<S> <C>
Hermann-Josef Lamberti Member, Board of Managing Directors
Director Deutsche Bank A.G.
Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
John A. Ross Regional Chief Executive Officer
Director Deutsche Bank Americas Holding Corp.
31 West 52nd Street
New York, New York 10019
Ronaldo H. Schmitz Member, Board of Managing Directors
Director Deutsche Bank A.G.
Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
</TABLE>
In addition to serving as investment adviser to the Portfolio, Bankers
Trust also serves as administrator, transfer agent and custodian of the
Portfolio. The fee paid by the Portfolio to Bankers Trust for these services
amounted to $676,625 for the most recently completed fiscal year.
Brokerage Commissions on Portfolio Transactions
Bankers Trust is authorized, consistent with Section 28(e) of the
Securities Exchange Act of 1934, as amended, when placing portfolio
transactions for the Portfolio with a broker to pay a brokerage commission (to
the extent applicable) in excess of that which another broker might have
charged for effecting the same transaction on account of the receipt of
research, market or statistical information.
There were no brokerage commissions paid by the Portfolio to "affiliated
brokers" (as defined in Schedule 14A under the Exchange Act) for the most
recently completed fiscal year.
Section 15(f) of the 1940 Act
Section 15(f) of the 1940 Act provides that when a change of control of an
investment adviser to an investment company occurs, the investment adviser or
any of its affiliated persons may receive an amount or benefit in connection
therewith as long as two conditions are satisfied.
First, no "unfair burden" may be imposed on the investment company as a
result of the transaction relating to the change of control, or any express or
implied terms, conditions or understandings applicable thereto. As defined in
the 1940 Act, the term "unfair burden" includes any arrangement during the two
(2) year period after the change in control whereby the investment adviser (or
predecessor or successor
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adviser), or any "interested person" (as defined in the 1940 Act) of such
adviser, receives or is entitled to receive any compensation, directly or
indirectly, from the investment company or its securities holders (other than
fees for bona fide investment advisory or other services), or from any person
in connection with the purchase or sale of securities or other property to,
from, or on behalf of the investment company (other than bona fide ordinary
compensation as principal underwriter for such company). Bankers Trust has
advised the Board that there are no circumstances arising from the Merger that
might result in an "unfair burden" (within the meaning of section 15(f) of the
1940 Act) being imposed on the Portfolio. After conducting its reviews of
Bankers Trust's performance, and after reviewing materials specifically
provided by Bankers Trust as a result of the termination of the Prior Advisory
Agreement and its request that the Board of the Portfolio approve the New
Advisory Agreement, the Board of the Portfolio was satisfied that it had
received and appropriately considered the relevant factors and, after
consultation with counsel, the Board of the Portfolio determined to approve the
New Advisory Agreement.
The second condition is that, during the three (3) year period immediately
following the Merger, at least 75% of the members of the Portfolio's Board must
not be "interested persons" of Bankers Trust within the meaning of the 1940
Act. All current members of the Board are not "interested persons" of Bankers
Trust.
Additional Information
On March 11, 1999, Bankers Trust announced that it had reached an
agreement with the United States Attorney's Office in the Southern District of
New York to resolve an investigation concerning inappropriate transfers of
unclaimed funds and related record-keeping problems that occurred between 1994
and early 1996. Bankers Trust pleaded guilty to misstating entries in the
bank's books and records and agreed to pay $63.5 million in fines to state and
federal authorities. On July 26, 1999, the federal criminal proceedings were
concluded with Bankers Trust's formal sentencing. The events leading up to the
guilty pleas did not arise out of the investment advisory or mutual fund
management activities of Bankers Trust or its affiliates.
As a result of the plea, absent an order from the Commission, Bankers
Trust would not be able to continue to provide investment advisory services to
the Portfolio. The Commission has granted Bankers Trust a temporary order under
Section 9(c) of the 1940 Act to permit Bankers Trust and its affiliates to
continue to provide investment advisory services to registered investment
companies, and Bankers Trust, pursuant to Section 9(c) of the 1940 Act, has
filed an application for a permanent order. However, there is no assurance that
the Commission will grant a permanent order. If the Commission refuses to grant
a permanent order, shareholders will receive additional proxy materials
requesting approval to release any amount held in escrow up to the time of the
refusal and such other action as deemed appropriate by the Trustees of the
Trust.
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Recommendation of the Portfolio's Board
At a meeting of the Portfolio's Board held on March 8, 1999 called for the
purpose of, among other things, voting on approval of the New Advisory
Agreement, the Board, including the Independent Trustees, unanimously approved
the New Advisory Agreement. In reaching this conclusion, the Board obtained
from BT Corporation, Deutsche Bank and Bankers Trust such information as it
deemed reasonably necessary to approve Bankers Trust as investment adviser to
the Portfolio and considered a number of factors, including, among other
things, the continuity of the management of the Portfolio after the Merger; the
nature, scope and quality of services that Bankers Trust would likely provide
to the Portfolio; the quality of the personnel of Bankers Trust; Bankers
Trust's commitments to continue to provide these services in the future; the
maintenance of the identical advisory fee rates; and the fact that the New
Advisory Agreement contains substantially the same terms and conditions as the
Prior Advisory Agreement. Based on the factors discussed above and others, the
Board determined that the New Advisory Agreement is fair and reasonable and in
the best interest of the Portfolio and its respective shareholders. In
addition, at the meetings held on March 24, 1999 and April 21, 1999, the
Portfolio's Board, including the Independent Trustees, was apprised of the
guilty pleas discussed above and the exemptive relief sought by Bankers Trust.
Recommendation of the Trust's Board
At a meeting of the Trust's Board held on May 3, 1999 called for the
purpose of, among other things, voting on the approval of the New Advisory
Agreement, the Board, including the Independent Trustees, unanimously approved
that the Trust's Board recommend to the shareholders of the Fund to vote for
the New Advisory Agreement. In reaching this conclusion, the Board considered
the recommendation of the Portfolio's Board to approve the New Advisory
Agreement as well as other information provided by Bankers Trust. In addition,
the Trust's Trustees, including the Independent Trustees, were apprised of the
guilty pleas discussed above and the exemptive relief sought by Bankers Trust.
Therefore, after careful consideration, the Trustees of the Trust,
including the Independent Trustees, recommend that the shareholders of the Fund
vote "FOR" the approval of the New Advisory Agreement as set forth in this
Proposal 1.
If the New Advisory Agreement is approved by the shareholders of the
Portfolio, the agreement will continue in effect as described above. If the New
Advisory Agreement is not approved by the shareholders, the advisory fees held
in escrow with respect to the agreement will be paid over to the Portfolio. In
such event, the Board of the Trust will consider what other action is
appropriate based upon the interests of the Fund's shareholders.
11
<PAGE>
Required Vote
Proposal 1 requires the affirmative vote of a "majority of the outstanding
voting securities" of the Fund. The term "majority of the outstanding voting
securities," as defined in the 1940 Act, and as used in this Proxy Statement,
means the affirmative vote of the lesser of (1) 67% of the voting securities of
the Fund present at the meeting if more than 50% of the outstanding voting
securities of the Fund are present in person or by proxy or (2) more than 50%
of the outstanding voting securities of the Fund.
Abstentions and broker non-votes will have the effect of a "no" vote on
Proposal 1, which requires the approval of a specified percentage of the
outstanding shares of the Fund or of such shares present at the meeting.
THE BOARD OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMENDS
THAT THE SHAREHOLDERS OF THE FUND VOTE "FOR" APPROVAL OF PROPOSAL 1. ANY
UNMARKED PROXIES WILL BE SO VOTED.
PROPOSAL 2: ELECTION OF BOARD OF TRUSTEES
OF THE PORTFOLIO
Nine Trustees (the "Trustee Nominees"), constituting the entire Board of
the Portfolio, are to be elected at the Special Meeting to serve until their
successors have been duly elected and qualified or until their earlier
resignation or removal. The Trustee Nominees were selected by the Independent
Trustees of the Portfolio and nominated by the full Board of the Portfolio at a
meeting held on July 27, 1999. The names and ages of the Trustee Nominees,
their principal occupations during the past five years and certain of their
other affiliations are provided below. Of the Trustee Nominees, Charles P.
Biggar, S. Leland Dill and Philip Saunders, Jr. are currently Trustees of the
Portfolio. No Trustee or Trustee Nominee of the Portfolio serves or will serve
as an officer of the Portfolio. Each of the Trustee Nominees has agreed to
serve if elected at the Special Meeting. It is the intention of the persons
designated as proxies in the Proxy, unless otherwise directed therein, to vote
at the Special Meeting for the election of the Trustee Nominees named below as
the entire Board of Trustees of the Portfolio. If any Trustee Nominee is unable
or unavailable to serve, the persons named in the Proxies will vote the Proxies
for such other person as the Board of the Portfolio may recommend.
12
<PAGE>
The following table sets forth the names, ages, position with the
Portfolio, and principal occupation of each Trustee Nominee:
TRUSTEE NOMINEES
<TABLE>
<CAPTION>
Memberships on the Board
of Other Registered
Investment Companies
Position with Principal Occupations and Other Publicly
Name, and Age Portfolio During Last Five Years Held Companies
- -------------------- --------------- ------------------------------- -----------------------------
<S> <C> <C> <C>
Charles P. Biggar+ Trustee Retired; formerly Vice Presi- None
Age: 68 Since dent of International Busi-
Inception ness Machines and President
(1991) of the National Services and
the Field Engineering Divi-
sions of IBM
S. Leland Dill+ Trustee Retired; formerly partner of Director, Coutts (U.S.A.)
Age: 69 Since KPMG Peat Marwick; Gen- International; Director,
Inception eral Partner of Pemco (an Phoenix-Zweig Series Trust;
(1991) investment company regis- Director, Vintners Interna-
tered under the 1940 Act) tional Company Inc.; Direc-
tor, Coutts Trust Holdings
Ltd; Director, Coutts Group;
Martin J. Gruber Nomura Professor of Trustee, TIAA (pension
Age: 62 Finance, Leonard L. Stern fund), Cowen Mutual Funds,
School of Business, New Japan Equity Funds, Taiwan
York University (since 1964) Equity Fund
Richard Hale* Managing Director, Deutsche Director, Flag Investors
Age: 54 Asset Management Fund (registered investment
(Americas) companies); Director and
President, Investment Com-
pany Capital Corp. (regis-
tered investment adviser)
Richard J. Herring Jacob Safra Professor of None
Age: 53 International Banking, Pro-
fessor of Finance, Finance
Department, and Vice Dean,
The Wharton School, Uni-
versity of Pennsylvania
(since 1972)
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Memberships on the Board
of Other Registered
Investment Companies
Position with Principal Occupations and Other Publicly
Name, and Age Portfolio During Last Five Years Held Companies
- ----------------------- --------------- ------------------------------ -----------------------------
<S> <C> <C> <C>
Bruce E. Langton Retired; Member, Investment Trustee, Allmerica Financial
Age: 68 Committee, Unilever U.S. Mutual Funds; Director,
Corporation Pension and TWA Directed Account/
Thrift Plans (1989 to 401(K) Plan (1988 to
present) present)
Philip Saunders, Jr.+ Trustee Principal, Philip Saunders None
Age: 63 Since Associates (Economic and
Inception Financial Analysis); Presi-
(1991) dent, John Hancock Home
Mortgage Corporation; and
Senior Vice President of
Treasury and Financial Ser-
vices, John Hancock Mutual
Life Insurance Company,
Inc.
Harry Van Benschoten Retired (since 1987); Direc- None
Age: 71 tor, Canada Life Insurance
Corporation of New York
</TABLE>
- ----------------------------
* "Interested Person" within the meaning of Section 2(a)(19) of the 1940 Act.
Mr. Hale is a Managing Director of Deutsche Asset Management (America's),
the U.S. Asset Management unit of Deutsche Bank and its affiliates.
+ Messrs. Biggar, Dill and Saunders are members of the Audit Committee of the
Board of the Portfolio.
The Board of the Portfolio has established an Audit Committee that meets
with the Portfolio's independent accountants to review the financial statements
of the Portfolio, the adequacy of internal controls and the accounting
procedures and policies of the Portfolio, and reports on these matters to the
Board of the Portfolio. The Board of the Portfolio does not have a compensation
committee. The Independent Trustees, who constitute 100% of the membership of
the current Board, select and nominate the new trustee nominees of the
Portfolio who are not "interested persons," as defined under the 1940 Act.
During 1998, the Board of the Portfolio held four meetings and the Audit
Committee held two meetings. No Trustee attended less than 75% of the
applicable meetings. If Richard Hale is elected, he will not be a member of the
Audit Committee.
The following table sets forth the compensation received by the Trustee
Nominees for their services to the Portfolio and Bankers Trust Fund Complex (as
defined below) during the calendar year ended December 31, 1998. In addition to
the fees listed below, the Trustees are also reimbursed for all reasonable
expenses incurred during the execution of their duties for the Portfolio and
the Bankers Trust Fund Complex.
14
<PAGE>
<TABLE>
<CAPTION>
Aggregate Pension or Estimated Total Compensation
Compensation Retirement Benefits Annual From the Bankers Trust
from the Accrued as Part of Benefits upon Fund Complex*
Name of Trustee Portfolio Portfolio Expenses Retirement Paid to Trustees
- ---------------------- --------------- --------------------- --------------- -----------------------
<S> <C> <C> <C> <C>
Charles P. Biggar $1,148 N/A N/A $36,250
S. Leland Dill $ 971 N/A N/A $36,250
Martin J. Gruber N/A N/A N/A N/A
Richard Hale N/A N/A N/A N/A
Richard J. Herring N/A N/A N/A N/A
Bruce E. Langton N/A N/A N/A N/A
Philip Saunders, Jr. $ 977 N/A N/A $36,250
Harry Van Benschoten N/A N/A N/A N/A
</TABLE>
- ----------------------------
* The "Bankers Trust Fund Complex" consists of the Portfolio, nine investment
management companies, as well as BT Investment Funds, BT Institutional
Funds, BT Pyramid Mutual Funds, BT Advisor Funds and BT Insurance Funds
Trust.
The following table sets forth the names, ages, position with the
Portfolio and length of service in such position, and principal occupations
during the past five years of the Portfolio's executive officers.
<TABLE>
<CAPTION>
Name and Age Position with Portfolio and Principal Occupations
- ------------------ -----------------------------------------------------------
<S> <C>
John A. Keffer President and Chief Executive Officer since December 1998;
Age: 58 President, Forum Financial Group L.L.C.; President, ICC
Distributors, Inc.*
Daniel O. Hirsch Secretary since December 1998; Director, Deutsche Asset
Age: 45 Management (Americas) since 1999; Director, BT Alex
Brown Incorporated and Investment Company Capital
Corporation, 1998-1999; Associate General Counsel, Office
of General Counsel, United States Securities and Exchange
Commission, 1993-1998.
Charles A. Rizzo Treasurer since July 1998; Vice President and Department
Age: 41 Head, Deutsche Asset Management (Americas) since April
1998; Senior Manager, PricewaterhouseCoopers LLP from
October 1993 to April 1998.
</TABLE>
- ----------------------------
* Principal underwriter of the Portfolio. Mr. Keffer owns 100% of the shares of
ICC Distributors, Inc.
Recommendation of the Board of the Portfolio
At a meeting of the Board of the Portfolio held on July 27, 1999, the
Board, based on a recommendation of the incumbent Independent Trustees,
unanimously approved the nomination of the Trustee Nominees. In reaching this
conclusion, the Board obtained from the Trustee Nominees such information as it
deemed reasonably
15
<PAGE>
necessary to approve the Trustee Nominees and considered a number of factors,
including, among other things: the nature, scope and quality of services that
the Trustee Nominees would likely provide to the Portfolio; and the
desirability of maintaining compliance with Section 15(f) of the Act. Based on
the factors discussed above and others, the Board of the Portfolio determined
that the election of the Trustee Nominees is in the best interest of the
Portfolio and its shareholders.
Recommendation of the Trust's Board
At a meeting of the Trust's Board held on August 9, 1999, the Board,
including its Independent Trustees, unanimously approved that the Trust's Board
recommend to the shareholders of the Fund to vote for the nomination of the
Trustee Nominees. In reaching this conclusion, the Board considered the
recommendation of the Portfolio's Board.
Therefore, after careful consideration, the Trustees of the Trust,
including the Independent Trustees, recommend that the shareholders of the Fund
vote "FOR" the election of the Trustee Nominees as set forth in this Proposal
2.
If the Trustee Nominees are elected by the shareholders of the Portfolio,
each Trustee Nominee will serve until his successor is duly elected and
qualified or until his earlier resignation or removal. If the Trustee Nominees
are not elected, the Trustees of the Trust will consider what action is
appropriate based upon the interests of the Fund's shareholders.
Required Vote
Proposal 2 requires the affirmative vote of a majority of the votes of the
Fund cast at the Special Meeting in person or by proxy. Because abstentions and
broker non-votes are not treated as shares voted, abstentions and broker
non-votes will have no impact on this proposal.
THE BOARD OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMENDS
THAT THE SHAREHOLDERS OF THE FUND VOTE "FOR" APPROVAL OF PROPOSAL 2. ANY
UNMARKED PROXIES WILL BE SO VOTED.
PROPOSAL 3: RATIFICATION OF THE SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS FOR THE PORTFOLIO
The Board of Trustees of the Portfolio, including a majority of the
Independent Trustees, has approved the selection of PricewaterhouseCoopers LLP
to serve as independent accountants for the Portfolio for the current fiscal
year. PricewaterhouseCoopers LLP has served as independent accountants of the
Portfolio since its inception and has
16
<PAGE>
advised the Portfolio that it has no direct or indirect financial interest in
the Portfolio. Representatives of PricewaterhouseCoopers LLP are not expected
to be present at the Special Meeting and, thus, are not expected to make a
statement, however, one or more representatives will be available by telephone
to respond to appropriate questions posed by shareholders or management.
Recommendation of the Trust's Board
At a meeting of the Trustees of the Trust held on August 9, 1999, the
Board, including the Independent Trustees, unanimously approved that the
Trust's Board recommend to the shareholders of the Fund to vote for the
selection of PricewaterhouseCoopers LLP to serve as independent accountants to
the Portfolio for the current fiscal year. In reaching this conclusion, the
Board considered the recommendation of the Portfolio's Board.
Therefore, after careful consideration, the Trustees of the Trust,
including the Independent Trustees, recommend that the shareholders of the Fund
vote "FOR" the ratification of PricewaterhouseCoopers LLP as independent
accountants as set forth in this Proposal 3.
If PricewaterhouseCoopers LLP is not ratified as independent accountants,
the Trustees of the Trust will consider what action is appropriate based upon
the interests of the Fund's shareholders.
Required Vote
Proposal 3 requires the affirmative vote of a majority of the votes of the
Fund cast at the Special Meeting in person or by proxy. Because abstentions and
broker non-votes are not treated as shares voted, abstentions and broker
non-votes will have no impact on this proposal.
THE BOARD OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMENDS
THAT THE SHAREHOLDERS OF THE FUND VOTE "FOR" APPROVAL OF PROPOSAL 3. ANY
UNMARKED PROXIES WILL BE SO VOTED.
ADDITIONAL INFORMATION
General
The cost of preparing, printing and mailing the enclosed Proxy and Proxy
Statement and all other costs incurred in connection with the solicitation of
proxies, including any additional solicitation made by letter, telephone or
telegraph, will be paid by Bankers Trust. In addition to solicitation by mail,
certain officers and representatives of the Trust, officers and employees of
Scudder Kemper Investments, Inc. and certain financial services firms and their
representatives, who will receive no extra compensation for their services, may
solicit proxies by telephone, telegram or personally.
17
<PAGE>
Shareholder Communication Corporation ("SCC") has been engaged to assist
in the solicitation of proxies, at a total estimated cost of $4600. As the
Special Meeting date approaches, certain shareholders of the Fund may receive a
telephone call from a representative of SCC if their votes have not yet been
received. Authorization to permit SCC to execute proxies may be obtained by
telephonically transmitted instructions from shareholders of the Fund. Proxies
that are obtained telephonically will be recorded in accordance with the
procedures set forth below. The Trustees believe that these procedures are
reasonably designed to ensure that the identity of the shareholder casting the
vote is accurately determined and that the voting instructions of the
shareholder are accurately determined.
In all cases where a telephonic proxy is solicited, the SCC representative
is required to ask for each shareholder's full name, address, social security
or employer identification number, title (if the shareholder is authorized to
act on behalf of an entity, such as a corporation), and the number of shares
owned, and to confirm that the shareholder has received the proxy materials in
the mail. If the information solicited agrees with the information provided to
SCC, then the SCC representative has the responsibility to explain the process,
read the Proposals on the proxy card, and ask for the shareholder's
instructions on the Proposals. The SCC representative, although he or she is
permitted to answer questions about the process, is not permitted to recommend
to the shareholder how to vote, other than to read any recommendation set forth
in the Proxy Statement. SCC will record the shareholder's instructions on the
card. Within 72 hours, the shareholder will be sent a letter or mailgram to
confirm his or her vote and asking the shareholder to call SCC immediately if
his or her instructions are not correctly reflected in the confirmation.
If a shareholder wishes to participate in the Special Meeting, but does
not wish to give a proxy by telephone, the shareholder may still submit the
Proxy originally sent with the Proxy Statement or attend in person. Should
shareholders require additional information regarding the proxy or replacement
proxy cards, they may contact SCC toll-free at 1-800-248-2681. Any proxy given
by a shareholder, whether in writing or by telephone, is revocable until voted
at the Special Meeting.
18
<PAGE>
Proposals of Shareholders
Shareholders wishing to submit proposals for inclusion in a proxy
statement for a shareholder meeting subsequent to the Special Meeting, if any,
should send their written proposals to the Secretary of the Trust, c/o Scudder
Kemper Investments, Inc., 13th Floor, Two International Place, Boston,
Massachusetts 02110, within a reasonable time before the solicitation of
proxies for such meeting. The timely submission of a proposal does not
guarantee its inclusion.
Other Matters To Come Before the Special Meeting
No Board member of the Trust is aware of any matters that will be
presented for action at the Special Meeting other than the matters set forth
herein. Should any other matters requiring a vote of shareholders arise, the
Proxy in the accompanying form will confer upon the person or persons entitled
to vote the shares represented by such proxy the discretionary authority to
vote the shares as to any such other matters in accordance with their best
judgment in the interest of the Trust and the Fund.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
By order of the Board of Trustees of the Trust
/s/ John Millette
John Millette
Secretary
19
<PAGE>
APPENDIX 1
INVESTMENT OBJECTIVES, NET ASSETS UNDER MANAGEMENT
AND ADVISORY FEES OF FUNDS ADVISED BY
BANKERS TRUST ("BT") WITH SIMILAR INVESTMENT
OBJECTIVES AS THE PORTFOLIO
Bankers Trust Company Proprietary Funds
<TABLE>
<CAPTION>
Net Assets Under Advisory Fees
Fund Management 5-31-99 Payable to BT
- -------------------------------------------- ---------------------- --------------
<S> <C> <C>
S&P Index Funds
- --------------------------------------------
Equity 500 Index Portfolio(a)(b) $6,607,007,085.88 0.075%
Includes the following feeder funds:
BT Inst'l: Equity 500 Index Fund(c) $2,391,761,781.53
BT Pyramid Investment Equity 500 Index(d) $ 929,474,411.08
USAA S&P 500 Index(e) $2,713,859,248.97
Amer AADV: S&P 500 -- AMR Class(f) $ 322,610,586.01
Amer AADV: S&P 500 -- Mileage Fund(f) $ 3,632,960.16
BT Insurance Funds Trust: Equity 500 Index
(Variable Annuity)(a)(g) $ 111,273,342.87 0.20%
</TABLE>
- ----------------------------
(a) Information pertaining to advisory fees is shown before expense waivers
and/or reimbursements, if any, are applied.
(b) Master portfolio not available for direct retail purchase.
(c) Feeder fund available to institutional investors through BT.
(d) Feeder fund available to retail investors through BT.
(e) Feeder fund available to customers of United States Automobile Association
and retail public.
(f) Feeder fund available to customers of American Airlines.
(g) Available only through variable annuity products.
20
<PAGE>
<TABLE>
<CAPTION>
Bankers Trust Company Third Party Sub-Advised Funds
Assets Under
Fund Management 5-31-99 Fee Schedule
- -------------------------------------------------------------------------------
<S> <C> <C>
VALIC -- American $4,624,973,419.19 A monthly fee computed at
General Series the annual rate of 0.02% on
Portfolio Company: the first $2 billion and
Stock Index Fund(a) 0.01% on assets over $2
billion for the Stock Index
Fund. The Investment Sub-
Advisory Agreements require
that each sub-adviser
promptly reduce its monthly
fee by the amount of any
commission, tender and
exchange offer solicitation
fees, other fees or similar
payments received by the
sub-adviser, or any affiliated
person of the sub-adviser, in
connection with sub-advised
Fund portfolio transactions.
VALIC -- American With respect to the Stock
General Series Portfolio Index Fund, VALIC shall
Company 2: pay to Bankers Trust, a
Stock Index Fund(a) $ 12,489,608.16 monthly fee computed at the
annual rate of 0.02% of the
first $2 billion and 0.01% of
average daily net asset
values on the excess over $2
billion.
EQ Advisors Trust:
BT Equity 500 Index 0.05% of the Portfolio's
Portfolio(a) $ 392,561,486.32 average daily net assets
</TABLE>
(a) Information pertaining to advisory fees is shown before expense waivers
and/or reimbursements, if any, are applied.
21
<PAGE>
Bankers Trust Company Third Party Sub-Advised Funds
<TABLE>
<CAPTION>
Assets Under
Fund Management 5-31-99 Fee Schedule
- --------------------------------------------------------------------------
<S> <C> <C>
Fidelity: Manager will pay sub-
adviser a monthly fee
Fidelity Commonwealth computed at an annual rate
Trust: of 0.006% (0.6 basis points)
of the average daily net
Spartan Market Index assets of the Portfolio
Fund $ 8,573,448,838.36 (computed in the manner set
forth in the Trust's
Declaration of Trust)
throughout the month.
Variable Insurance
Products Fund II:
At an annual rate of 0.006%
Index 500 Portfolio $ 4,624,170,180.40 (0.6 basis points)
Fidelity Concord Street
Trust:
Spartan U.S. Equity Index At an annual rate of 0.006%
Fund $17,202,394,585.66 (0.6 basis points)
Pacific Mutual:
Pacific Select Fund A fee is paid at the
Equity Index beginning of each calendar
Portfolio(a) $ 1,808,280,989.82 quarter, based on an annual
percentage of the combined
daily net assets of the Equity
Index and Small-Cap Index
Portfolios, according to the
following schedule, subject
to a minimum annual fee of
$100,000: 0.08% on first
$100 million; 0.04% on next
$100 million; 0.02% on
excess.
</TABLE>
(a) Information pertaining to advisory fees is shown before expense waivers
and/or reimbursements, if any, are applied.
22
<PAGE>
Bankers Trust Company Third Party Sub-Advised Funds
<TABLE>
<CAPTION>
Assets Under
Fund Management 5-31-99 Fee Schedule
- --------------------------------------------------------------------------------
<S> <C> <C>
SunAmerica Asset
Management Corporation:
Seasons Series Trust
Large-Cap Growth 0.10%--first $500 million
Portfolio(a)(b)(c) $ 5,142,375.93 0.03%--over $500 million
Large-Cap Composite 0.05%--first $500 million
Portfolio(a)(b)(c) $ 5,308,328.33 0.03%--over $500 million
Large-Cap Value Portfolio $ 5,470,359.19 0.10%--first $500 million
(a)(b)(c) 0.03%--over $500 million
</TABLE>
- ----------------------------
(a) Information pertaining to advisory fees is shown before expense waivers
and/or reimbursements, if any, are applied.
(b) Bankers Trust acts as Sub-Advisor of the portion of the portfolio of this
fund which invests according to an investment strategy that seeks to
replicate a securities index.
(c) For all SunAmerica portfolios listed here, the aggregate annual fees paid to
the sub-adviser are subject to the following minimum: first year (April 1999
through March 2000) -- no minimum; second year (April 2000 through March
2001) -- $300,000 total for the Portfolios combined; third year (April 2001,
through March 2002) -- $600,000 total for the Portfolios combined; fourth
year (April 2002, through March 2003) -- $850,000 total for the Portfolios
combined; Each subsequent year (beginning April 2003) -- $850,000 total for
the Portfolios combined.
23
<PAGE>
EXHIBIT A
FORM OF INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of [ ] by and between [Trust Name], a (state of
organization) (herein called the "Trust") and [ ] (herein called the
"Investment Adviser").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940;
WHEREAS, the Trust desires to retain the Investment Adviser to render
investment advisory and other services to the Trust with respect to certain of
its series of shares of beneficial interests as may currently exist or be
created in the future (each, a "Fund") as listed on Exhibit A hereto, and the
Investment Adviser is willing to so render such services on the terms
hereinafter set forth;
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
In consideration of the promises and mutual covenants herein contained, it
is agreed between the parties hereto as follows:
1. Appointment. The [Trust] [Investment Adviser] hereby appoints the
Investment Adviser to act as investment adviser to each Fund for the
period and on the terms set forth in this Agreement. The Investment
Adviser accepts such appointment and agrees to render the services herein
set forth for the compensation herein provided.
2. Management. Subject to the supervision of the [Board of Trustees of the
Trust] [Investment Adviser], the Investment Adviser will provide a
continuous investment program for the Fund, including investment research
and management with respect to all securities, investments, cash and cash
equivalents in the Fund. The Investment Adviser will determine from time
to time what securities and other investments will be purchased, retained
or sold by each Fund. The Investment Adviser will provide the services
rendered by it hereunder in accordance with the investment objective(s)
and policies of each Fund as stated in the Fund's then-current prospectus
and statement of additional information (or the Fund's then current
registration statement on Form N-1A as filed with the Securities and
Exchange Commission (the "SEC") and the then-current offering memorandum
if the Fund is not registered under the Securities Act of 1933, as amended
("1933 Act"). The Investment Adviser further agrees that:
(a) it will conform with all applicable rules and regulations of the SEC
(herein called the "Rules") and with all applicable provisions of the 1933
Act; as
A-1
<PAGE>
amended, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
the Investment Company Act of 1940, as amended (the "1940 Act"); and the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
will, in addition, conduct its activities under this Agreement in
accordance with applicable regulations of the Board of Governors of the
Federal Reserve System pertaining to the investment advisory activities of
bank holding companies and their subsidiaries;
(b) it will place orders pursuant to its investment determinations for
each Fund either directly with the issuer or with any broker or dealer
selected by it. In placing orders with brokers and dealers, the Investment
Adviser will use its reasonable best efforts to obtain the best net price
and the most favorable execution of its orders, after taking into account
all factors it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing
basis. Consistent with this obligation, the Investment Adviser may, to the
extent permitted by law, purchase and sell portfolio securities to and
from brokers and dealers who provide brokerage and research services
(within the meaning of Section 28(e) of the 1934 Act) to or for the
benefit of any fund and/or other accounts over which the Investment
Adviser or any of its affiliates exercises investment discretion. Subject
to the review of the [Trust's Board of Trustees] [Investment Adviser] from
time to time with respect to the extent and continuation of the policy,
the Investment Adviser is authorized to pay to a broker or dealer who
provides such brokerage and research services a commission for effecting a
securities transaction which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction
if the Investment Adviser determines in good faith that such commission
was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the overall responsibilities of the Investment
Adviser with respect to the accounts as to which it exercises investment
discretion; and
(c) it will maintain books and records with respect to the securities
transactions of each Fund and will render to the [Trust's Board of
Trustees] [Investment Adviser] such periodic and special reports as the
Board may request.
3. Services Not Exclusive. The investment advisory services rendered by the
Investment Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser shall be free to render similar services to others so
long as its services under this Agreement are not impaired thereby.
4. Books and Records. In compliance with the requirements of Rule 31a-3 of the
Rules under the 1940 Act, the Investment Adviser hereby agrees that all
records which it maintains for the Trust are the property of the Trust and
further agrees
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to surrender promptly to the [Trust] [Investment Adviser] any of such
records upon request of the [Trust] [Investment Adviser]. The Investment
Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act and to comply in full with the requirements of
Rule 204-2 under the Advisers Act pertaining to the maintenance of books
and records.
5. Expenses. During the term of this Agreement, the Investment Adviser will
pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of purchasing securities (including
brokerage commissions, if any) for the Fund.
6. Compensation. For the services provided and the expenses assumed pursuant
to this Agreement, [ ] will pay the Investment Adviser, and the
Investment Adviser will accept as full compensation therefor, fees,
computed daily and payable monthly, on an annual basis equal to the
percentage set forth on Exhibit A hereto of that Fund's average daily net
assets.
7. Limitation of Liability of the Investment Adviser Indemnification.
(a) The Investment Adviser shall not be liable for any error of judgment
or mistake of law or for any loss suffered by a Fund in connection with
the matters to which this Agreement relates, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties
under this Agreement;
(b) Subject to the exceptions and limitations contained in Section 7(c)
below:
(i) the Investment Adviser (hereinafter referred to as a "Covered
Person") shall be indemnified by the respective Fund to the fullest
extent permitted by law, against liability and against all expenses
reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved, as a party or
otherwise, by virtue of his being or having been the Investment
Adviser of the Fund, and against amounts paid or incurred by him in
the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened while in office or
thereafter, and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
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(c) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the [Trust] [Investment
Adviser] or to one or more Funds' investors by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, or (B) not to have acted in
good faith in the reasonable belief that his action was in the best
interest of a Fund; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office;
(A) by the court or other body approving the settlement; or
(B) by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the matter based
upon a review of readily available facts (as opposed to a full
trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry); provided, however, that any investor in a Fund may, by
appropriate legal proceedings, challenge any such determination by the
Trustees or by independent counsel.
(d) The rights of indemnification herein provided may be insured against
by policies maintained by the [Trust] [Investment Adviser], shall be
severable, shall not be exclusive of or affect any other rights to which any
Covered Person may now or hereafter be entitled, shall continue as to a
person who has ceased to be a Covered Person and shall inure to the benefit
of the successors and assigns of such person. Nothing contained herein shall
affect any rights to indemnification to which Trust personnel and any other
persons, other than a Covered Person, may be entitled by contract or
otherwise under law.
(e) Expenses in connection with the preparation and presentation of a
defense to any claim, suit or proceeding of the character described in
subsection (b) of this Section 7 may be paid by the [Trust] [Investment
Adviser] on behalf of the respective Fund from time to time prior to final
disposition thereto upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the [Trust]
[Investment Adviser] on behalf of the respective Fund if it is ultimately
determined that he is not entitled to indemnification under this Section 7;
provided, however, that either (i) such Covered Person shall have provided
appropriate security for such undertaking or (ii) the
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[Trust] [Investment Adviser] shall be insured against losses arising out
of any such advance payments, or (iii) either a majority of the Trustees
who are neither Interested Persons of the Trust nor parties to the matter,
or independent legal counsel in a written opinion, shall have determined,
based upon a review of readily available facts as opposed to a trial-type
inquiry or full investigation, that there is reason to believe that such
Covered Person will be entitled to indemnification under this Section 7.
8. Duration and Termination. This Agreement shall be effective as to a Fund as
of the date the Fund commences investment operations after this Agreement
shall have been approved by the Board of Trustees of the Trust with
respect to that Fund and the Investor(s) in the Fund in the manner
contemplated by Section 15 of the 1940 Act and, unless sooner terminated
as provided herein, shall continue until the second anniversary of such
date. Thereafter, if not terminated, this Agreement shall continue in
effect as to such Fund for successive periods of 12 months each, provided
such continuance is specifically approved at least annually (a) by the
vote of a majority of those members of the Board of Trustees of the Trust
who are not parties to this Agreement or Interested Persons of any such
party, cast in person at a meeting called for the purpose of voting on
such approval, or (b) by Vote of a Majority of the Outstanding Voting
Securities of the Trust; provided, however, that this Agreement may be
terminated by the Trust at any time, without the payment of any penalty,
by the Board of Trustees of the Trust, by Vote of a Majority of the
Outstanding Voting Securities of the Trust on 60 days' written notice to
the Investment Adviser, or by the Investment Adviser as to the [Trust]
[Investment Adviser] at any time, without payment of any penalty, on 90
days' written notice to the [Trust] [Investment Adviser]. This Agreement
will immediately terminate in the event of its assignment (as used in this
Agreement, the terms "Vote of a Majority of the Outstanding Voting
Securities," "Interested Person" and "Assignment" shall have the same
meanings as such terms have in the 1940 Act and the rules and regulatory
constructions thereunder.)
9. Amendment of this Agreement. No material term 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, and no amendment of a
material term of this Agreement shall be effective with respect to a Fund,
until approved by Vote of a Majority of the Outstanding Voting Securities
of that Fund.
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10. Representations and Warranties. The Investment Adviser hereby represents
and warrants as follows:
(a) [The Investment Adviser is exempt from registration under the 1940
Act:]
(b) The Investment Adviser has all requisite authority to enter into,
execute, deliver and perform its obligations under this Agreement;
(c) This Agreement is legal, valid and binding, and enforceable in
accordance with its terms; and
(d) The performance by the Investment Adviser of its obligations under
this Agreement does not conflict with any law to which it is subject.
11. Covenants. The Investment Adviser hereby covenants and agrees that, so long
as this Agreement shall remain in effect:
(a) The Investment Adviser shall remain either exempt from, or registered
under, the registration provisions of the Advisers Act; and
(b) The performance by the Investment Adviser of its obligations under
this Agreement shall not conflict with any law to which it is then subject.
12. Notices. Any notice required to be given pursuant to this Agreement shall
be deemed duly given if delivered or mailed by registered mail, postage
prepaid, (a) to the Investment Adviser, Mutual Funds Services, 130 Liberty
Street (One Bankers Trust Plaza), New York, New York 10006, and (b) to the
Trust, c/o BT Alex. Brown, Incorporated, One South Street, Baltimore,
Maryland 21202.
13. Waiver. With full knowledge of the circumstances and the effect of its
action, the Investment Adviser hereby waives any and all rights which it
may acquire in the future against the property of any investor in a Fund,
other than shares in that Fund, which arise out of any action or inaction
of the [Trust] [Investment Adviser] under this Agreement.
14. 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. If any provision
of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
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<PAGE>
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and shall be governed by the
laws of the ________________ , without reference to principles of conflicts of
law. The Trust is organized under the laws of pursuant to ________________ a
dated ________________ . No Trustee, officer or employee of the Trust shall be
personally bound by or liable hereunder, nor shall resort be had to their
private property for the satisfaction of any obligation or claim hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
[SIGNATORIES]
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EXHIBIT A
TO
INVESTMENT ADVISORY AGREEMENT
MADE AS OF ______________________
BETWEEN
[Trust Name] AND [______________________ ]
Fund Investment Advisory Fee
- ------ ------------------------
<PAGE>
S C U D D E R
For more information, contact your fund's agent at 1-800-890-8079.
S&P 500
<PAGE>
SCUDDER
P.O. Box 2291
Boston, MA 02107-2291
YOUR VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND MAIL THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
Please fold and detach card at perforation before mailing
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FORM OF PROXY CARD
SCUDDER S&P 500 INDEX FUND
Investment Trust
Two International Place
Boston, Massachusetts 02110
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
9:00 a.m., on October 13, 1999
The undersigned hereby appoints Kathryn L. Quirk, Lynn S. Birdsong and John
Millette, and each of them, the proxies of the undersigned, with the power of
substitution to each of them, to vote all shares of the Fund which the
undersigned is entitled to vote at the Special Meeting of Shareholders of the
Fund to be held at the offices of Scudder Kemper Investments, Inc., Two
International Place, Boston, Massachusetts 02110, on October 13, 1999 at 9:00
a.m., Eastern time, and at any adjournments thereof.
PLEASE SIGN AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE
IS REQUIRED.
Dated _________________, 1999
Please sign exactly as your
name or names appear. When
signing as attorney,
executor, administrator,
trustee or guardian, please
give your full title as
such.
-----------------------------------
-----------------------------------
Signature(s) of Shareholder(s)
- --------------------------------------------------------------------------------
<PAGE>
SCUDDER
P.O. Box 2291
Boston, MA 02107-2291
YOUR VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED.
Please fold and detach card at perforation before mailing
[arrow down] [arrow down]
ALL PROPERLY EXECUTED PROXIES WILL BE VOTED AS DIRECTED. IF NO INSTRUCTIONS
ARE INDICATED ON A PROPERLY EXECUTED PROXY, THE PROXY WILL BE VOTED FOR APPROVAL
OF THE PROPOSALS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE SCUDDER S&P
500 INDEX FUND. THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS.
---
Please vote by filling in the boxes below.
PROPOSAL 1
- ----------
To approve a new investment advisory agreement FOR AGAINST ABSTAIN
between Equity 500 Index Portfolio (the [ ] [ ] [ ]
"Portfolio") and Bankers Trust Company
("Bankers Trust").
PROPOSAL 2
- ----------
To elect Trustees to the Board of Trustees of FOR AGAINST ABSTAIN
the Portfolio to hold office until their [ ] [ ] [ ]
respective successors have been duly elected
and qualified or until their earlier resignation
or removal.
NOMINEES:
Charles P. Biggar, S. Leland Dill, Martin J.
Gruber, Richard Hale, Richard J. Herring,
Bruce E. Langton, Philip Saunders, Jr., Harry
Van Benschoten
(INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THE
NAME(S) ON THE LINE IMMEDIATELY BELOW.)
- --------------------------------------------------------------------------------
PROPOSAL 3
- ----------
To ratify the selection of FOR AGAINST ABSTAIN
PricewaterhouseCoopers LLP as the [ ] [ ] [ ]
Portfolio's independent accountants
for the current fiscal year.
THE PROXIES ARE AUTHORIZED TO VOTE IN THEIR DISCRETION ON ANY OTHER BUSINESS
WHICH MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS THEREOF.
