<PAGE>
SCHEDULE 14C
(Rule 14c-101)
Information Required in Information Statement
Schedule 14C Information
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934 (Amendment No.___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
[ ] Definitive Information Statement
Davis International Series, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Information 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 14c-5(g) 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
Rule0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
CONTENTS
1. Information Statement and Notice of Special Meeting of Shareholders
2. Appendices
A: Eligible Votes and Large Shareholders
B: Officers of Davis International Series, Inc., the Adviser and the
Sub-Adviser
C: New Advisory and Sub-Advisory Agreements
<PAGE>
INFORMATION
STATEMENT
INFORMATION STATEMENT AND NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS
OF DAVIS INTERNATIONAL TOTAL RETURN FUND TO BE HELD ON
FEBRUARY 23, 2001
DAVIS INTERNATIONAL SERIES, INC.
2949 EAST ELVIRA ROAD, SUITE 101
TUCSON, ARIZONA 85706
1-800-279-0279
--------------------------------------------------------------------------------
PURPOSE OF THIS INFORMATION STATEMENT
This Information Statement is being furnished to shareholders of Davis
International Total Return Fund , an authorized series of Davis International
Series, Inc., ("Fund"), to inform them of a Special Meeting of Shareholders. The
meeting will be held at 3480 East Britannia Drive, Tucson, Arizona 85706, on
February 23, 2001, beginning at 9 a.m. Mountain Time. This Information Statement
is first being mailed to shareholders on or about February 9, 2001. Shareholders
will vote on the following two proposals:
1. TO ELECT DIRECTORS. Shareholders are being asked to elect or re-elect
directors. Nine of the twelve nominees are independent of the investment
adviser.
2. TO APPROVE A NEW SUB-ADVISORY AGREEMENT. Shareholders are being asked to
approve the New Sub-Advisory Agreement with Fiduciary International, Inc.
The agreement is not being materially changed, fees are not being
increased, and the same portfolio manager will continue managing the Fund.
NO SOLICITATION OF PROXIES
Davis Selected Advisers, L.P. ("Adviser"), its officers and affiliates own a
controlling majority of the Fund's eligible vote and intend to vote to approve
both of the proposals described in this Information Statement. No proxies will
be solicited. The cost of distributing this Information Statement and holding
the shareholder meeting (including reimbursement of certain parties for their
expenses in forwarding this Information Statement to beneficial owners of Fund
shares) will be paid by the Fund, except that Fiduciary International, Inc will
bear the costs associated with Proposal 2.
THIS DOCUMENT IS REQUIRED UNDER THE FEDERAL SECURITIES LAWS AND IS PROVIDED
SOLELY FOR YOUR INFORMATION. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
1
<PAGE>
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PROPOSAL 1:
--------------------------------------------------------------------------------
ELECTION OF DIRECTORS
The Fund's Directors are responsible for protecting the interests of the Fund's
shareholders. The Directors meet regularly to review the Fund's activities,
contractual arrangements and performance. Directors are fiduciaries and have an
obligation to serve the best interests of shareholders. In addition, the
Directors review Fund performance, oversee Fund activities and review
contractual arrangements with companies that provide services to the Fund.
It is proposed that shareholders elect twelve (12) nominees to serve as
Directors, each to hold office until a successor is elected and qualified. Each
nominee has consented to being named in this Information Statement and has
agreed to serve as a Director, if elected. The Directors do not know of any
reason why any nominee would be unable or unwilling to serve as a Director, but
if any nominee should become unable to serve prior to the meeting, the
controlling shareholders intend to vote for another person of their choice as
nominee or nominees. As of December 31, 2000 ("Record Date"), none of the
nominees owned more than 1% of any Class of the Fund's shares. Appendix A lists
all shareholders that owned 5% or more of any Class of the Fund's shares on
Record Date.
At a meeting held December 5, 2000 the Directors discussed the advantages of
"merging" the Fund's board of directors with that of the other Davis Funds. The
Directors of the Fund and the Directors of the other Davis Funds consider many
of the same issues at most board meetings. The Fund's Directors concluded that
it would be in the best interests of the Fund and its shareholders if the
directors of the other Davis Funds also served as Directors of the Fund.
Thereafter, the Fund would participate in the joint board meetings held for the
other Davis Funds. The Fund's Nominating Committee was familiar with each of the
nominees and recommended that the full board call for a special meeting of
shareholders to elect each of the nominees to begin service as Directors
immediately upon election by shareholders.
INFORMATION ABOUT THE NOMINEES
This table shows basic information about each nominee. Each nominee currently
serves as a Director of each of the other Davis Funds. For purposes of their
duties as Directors, the address of each individual listed below is 2949 East
Elvira Road, Suite 101, Tucson, Arizona 85706. Nine of the twelve nominees are
Independent Directors (that is, they are not "interested persons" as defined in
the 1940 Act). The interested Directors are indicated by footnote below.
<TABLE>
<CAPTION>
NAME/BIRTHDATE DIRECTOR SINCE PRINCIPAL OCCUPATION
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
WESLEY E. BASS, JR. nominee Director of each of the Davis Funds; President,
August 21, 1931 Bass & Associates (a financial consulting firm);
former First Deputy City Treasurer, City of
Chicago; former Executive Vice President, Chicago
Title and Trust Company
JEREMY H. BIGGS* December 12, 1994 Director and Chairman of the Fund, Director and
August 16, 1935 Chairman of each of the Davis Funds; Consultant to
the Adviser; Director of the Van Eck Chubb Funds;
Vice Chairman, Head of Equity Research Department,
Chairman of the U.S. Investment Policy Committee
and member of the International Investment
Committee of Fiduciary Trust Company International
2
<PAGE>
<CAPTION>
NAME/BIRTHDATE DIRECTOR SINCE PRINCIPAL OCCUPATION
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MARC P. BLUM nominee Director of each of Davis Funds; Chief Executive
September 9, 1942 Officer, World Total Return Fund, LLP; Counsel to
Gordon, Feinblatt, Rothman, Hoffberger and
Hollander, LLC (attorneys); Director, Mid-Atlantic
Realty Trust
ANDREW A. DAVIS* nominee Vice President of the Fund; Director and President
June 25, 1963 or Vice President of each of the Davis Funds,
Director and Vice President of Selected American
Shares, Inc., Selected Special Shares, Inc., and
Selected Capital Preservation Trust; Director and
President, Venture Advisers, Inc.; President, Davis
Investments, LLC; Director and Vice President, Davis
Selected Advisers - NY, Inc.
CHRISTOPHER C. DAVIS* December 8, 1997 Director and President of the Fund; Director and
July 13, 1965 Chief Executive Officer or President of each of the
Davis Funds; Director and President or Vice President
of Selected American Shares, Inc., Selected Special
Shares, Inc., and Selected Capital Preservation Trust;
Sole Member and Chief Executive Officer of Davis
Investments, LLC; Director and Vice Chairman of
Venture Advisers, Inc.; Director, Chairman, Chief
Executive Officer, Davis Selected Advisers - NY, Inc.;
Chairman and Director, Shelby Cullom Davis Financial
Consultants, Inc.; Employee of Shelby Cullom Davis &
Co., a registered broker/dealer; Director, Rosenwald,
Roditi and Company, Ltd., an offshore investment
management company
G. BERNARD HAMILTON February 5, 1997 Director of the Fund; Director of each of the Davis
March 18, 1937 Funds; Managing General Partner, Avanti Partners, L.P.
JERRY D. GEIST nominee Director of each of the Davis Funds; Chairman,
May 23, 1934 Santa Fe Center; Chairman, Energy & Technology
Company, Ltd., Director, CH2M-Hill, Inc.; Member,
Investment Committee for Microgeneration Technology
Fund, UTECH Funds; Retired Chairman and President,
Public Service Company of New Mexico
D. JAMES GUZY nominee Director of each of the Davis Funds; Chairman, PLX
March 7, 1936 Technology, Inc. (a manufacturer of semiconductor
circuits); Director, Intel Corp. (a manufacturer of
semiconductor circuits), Cirrus Logic Corp. (a
manufacturer of semi-conductor circuits) and
Alliance Technology Fund (a mutual fund); Micro
Component Technology, Inc.; and Novellus Systems,
Inc. (a manufacturer of semi-conductor equipment)
3
<PAGE>
<CAPTION>
NAME/BIRTHDATE DIRECTOR SINCE PRINCIPAL OCCUPATION
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LAURENCE W. LEVINE nominee Director of each of the Davis Funds; Partner,
April 9, 1931 Bigham, Englar, Jones and Houston (attorneys);
United States Counsel to Aerolineas Argentia;
United States Counsel to Banco de la Ciudad de
Buenos Aires; Director, various private companies
THEODORE B. SMITH, JR. December 12, 1994 Director of the Fund; Chairman, President and CEO
December 23, 1932 of John Hassall, Inc.; Managing Director John
Hassall, Ltd.; Chairman of John Hassall Japan,
Ltd.; Chairman of Cantrock Realty; Chairman of
McCallum Die; Trustee, Deputy Mayor and
Commissioner of Public Services for the
Incorporated Village of Mill Neck
CHRISTIAN R. SONNE nominee Director of each of the Davis Funds; General
May 6, 1936 Partner of Tuxedo Park Associates (a land holding
and development firm); President and Chief Executive
Officer of Mulford Securities Corporation (a private
investment fund) until 1990; formerly Vice President
of Goldman Sachs & Co.
MARSHA WILLIAMS nominee Director of each of the Davis Funds; Director of
March 28, 1951 Selected American Shares, Inc., Selected Special
Shares, Inc., and Selected Capital Preservation
Trust; Chief Administrative Officer of Crate &
Barrel; Director, Modine Manufacturing, Inc.;
Director, Chicago Bridge & Iron Company, M.V.;
former Vice President and Treasurer, Amoco
Corporation
</TABLE>
* Jeremy H. Biggs, Andrew A. Davis and Christopher C. Davis are "interested
persons" of the Fund as defined by the 1940 Act.
Mr. Biggs is an owner and an officer of Fiduciary Trust Company International,
and also an owner of the Adviser and Principal Underwriter.
Andrew A. Davis and Christopher C. Davis are both owners and officers of the
Adviser and owners of the Principal Underwriter.
DIRECTOR ACTIVITIES AND COMPENSATION
MEETINGS AND COMMITTEES. The Fund's Directors met five times in person during
calendar year 1999 and four times in person during calendar year 2000. In each
year, each Director attended at least 75% of those meetings.
The Fund has an Audit Committee, which is comprised entirely of Independent
Directors. The Audit Committee reviews financial statements and other
audit-related matters for the Fund. The Audit Committee also holds discussions
with management and with the Independent Accountants concerning the scope of the
audit and the Auditor's independence. The Audit Committee meets at least
quarterly and, if necessary, more frequently. The Audit Committee met four times
during the Fund's most recent fiscal year, and each member of the committee
attended at least 75% of those meetings. The Audit Committee has a written
charter.
4
<PAGE>
The Fund also has a Nominating Committee, which is comprised entirely of
Independent Directors, which meets as often as deemed appropriate by the
Nominating Committee. The Nominating Committee did not meet during the Fund's
most recent fiscal year, but met after completion of the fiscal year to consider
the nominees currently being presented for election by shareholders. The
Nominating Committee reviews and nominates persons to serve as members of the
board of directors, and reviews and makes recommendations concerning the
compensation of the Independent Directors. The chair of the Nominating Committee
also serves as the Lead Independent Director. The Nominating Committee does not
ordinarily consider nominees recommended by shareholders. However, shareholders
may propose nominees by writing to the Nominating Committee, in care of the
secretary of the Davis Funds, at 2949East Elvira, Suite 101, Tucson, Arizona
85706.
COMPENSATION OF DIRECTORS. Directors who are also "interested persons" of the
Fund receive no compensation from the Fund. Officers of the Fund receive no
compensation from the Fund.
In the fiscal year ended September 30, 2000, each Independent Director received
a quarterly fee of $1,000, and an additional aggregate of $250 for each regular
meeting of the board of directors which they attended, and was reimbursed for
all reasonable out-of-pocket expenses.
After the nominees are elected to the board of directors, the new Independent
Directors' fees will be shared by all of the Davis Funds. The Davis Funds pay
each Independent Director an aggregate quarterly fee of $9,450 an additional
aggregate of $4,050 for each regular meeting attended, and reimburses all
reasonable out-of-pocket expenses. The Chairman of the Audit Committee also
receives an additional $900 per meeting. The Vice Chairman of the Audit
Committee also receives an additional $450 per meeting. The Davis Funds have no
bonus, pension, profit sharing or retirement plans. The compensation paid to
each Director of the Davis Funds is shown in the table below.
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION
FISCAL YEAR 2000
DAVIS INTERNATIONAL TOTAL COMPENSATION FROM THE DAVIS
NAME/POSITION SERIES, INC.* FUND COMPLEX
----------------------------------------------------------------------------------------------------------
<S> <C> <C>
WESLEY E. BASS, JR. $0 $xx
Nominee
JEREMY H. BIGGS $0 $0
Director/nominee
MARC P. BLUM $0 $xx
Nominee
ANDREW A. DAVIS $0 $0
Nominee
CHRISTOPHER C. DAVIS $0 $0
Director/nominee
G. BERNARD HAMILTON $xx $xx
Director/nominee
JERRY D. GEIST $0 $xx
Nominee
D. JAMES GUZY $0 $xx
Nominee
LAURENCE W. LEVINE $0 $xx
Nominee
THEODORE B. SMITH, JR. $xx $xx
Director/nominee
CHRISTIAN R. SONNE $0 $xx
Nominee
MARSHA WILLIAMS $0 $xx
Nominee
</TABLE>
5
<PAGE>
The Adviser, its officers and affiliates own a controlling majority of the
Fund's eligible vote and intend to vote to approve Proposal 1.
PROPOSAL 2:
--------------------------------------------------------------------------------
TO APPROVE OF THE NEW SUB-ADVISORY AGREEMENT WITH
FIDUCIARY INTERNATIONAL, INC.
The Directors, including the Independent Directors, have approved and
recommended that shareholders approve a New Sub-Advisory Agreement between
Fiduciary International, Inc., and the Adviser to provide services to the Fund
("New Sub-Advisory Agreement"). The New Sub-Advisory Agreement is identical in
all material respects to, and essentially a continuation of, the existing sub-
advisory agreement dated January 1, 2001 ("Current Sub-Advisory Agreement"). The
Adviser, its officers and affiliates own a controlling majority of the Fund's
eligible vote and intend to vote to approve Proposal 2.
As required by the 1940 Act, the Current Sub-Advisory Agreement provides for
automatic termination upon its assignment. In the first quarter of 2001
Fiduciary International, Inc., proposes to undergo a change of control
(described below) resulting in an assignment, as that term is defined in the
1940 Act. Consequently, if the change of control is completed, the Current
Sub-Advisory Agreement will terminate. To ensure the continuity of sub-advisory
services provided to Fund, shareholders are being asked to approve the New
Sub-Advisory Agreement. All information in this Information Statement concerning
Fiduciary International, Inc., Fiduciary Investment Corporation, Fiduciary Trust
Company International, and Franklin Resources, Inc., has been provided by
Fiduciary International, Inc.
INFORMATION CONCERNING FIDUCIARY INTERNATIONAL, INC. Fiduciary International,
Inc., has served as sub-adviser to the Fund since March 1, 2000. Fiduciary
International, Inc., is a subsidiary of Fiduciary Investment Corporation, which
in turn is a subsidiary of Fiduciary Trust Company International, a New York
state-chartered bank specializing in investment management activities. Fiduciary
International, Inc., conducts investment research and makes investment decisions
for the Fund pursuant to the Current Sub-Advisory Agreement. Fiduciary
International, Inc., acts as an investment advisor with respect to a number of
other mutual funds, including one fund with investment objectives similar to
that of the Fund, FTI International Equity Fund (annual advisory fee of 1.00%,
net assets of $98,368,257 as of December 31, 2000). The officers of the Fund and
Fiduciary International, Inc., will not change as a result of the change in
control. Officers are listed in Appendix B.
PROPOSED CHANGE IN CONTROL. On October 25, 2000, Franklin Resources, Inc.,
(operating as Franklin Templeton Investments) and Fiduciary Trust Company
International announced the signing of a definitive agreement under which
Franklin Resources will acquire Fiduciary Trust Company International in an
all-stock transaction valued at approximately $825 million. The transaction,
which is subject to shareholder and regulatory approvals and other customary
closing conditions, is expected to be completed in the first quarter of calendar
2001. Both Fiduciary Trust Company International and Franklin Resources, Inc.,
have structured this transaction to ensure continuity of client relationships
and of each firm's distinct investment processes in order to establish a
combined enterprise with a solid global platform.
Fiduciary International, Inc., has advised the Directors and the Fund that the
changes in the ownership structure of Fiduciary Trust Company International,
Fiduciary Investment Corporation and Fiduciary International, Inc., are not
expected to affect the day-to-day operations or portfolio management of the
Fund. However, these changes may constitute a technical assignment of the
Current Sub-Advisory Agreement under the 1940 Act, resulting in a termination of
the Current Sub-Advisory Agreement. Accordingly, to ensure the continuity of
sub-advisory services provided to Fund, the Directors, including the Independent
Directors, have approved and recommended that shareholders approve the New
Sub-Advisory Agreement to take effect upon completion of the change in control.
TERMS OF THE NEW SUB-ADVISORY AGREEMENT WITH FIDUCIARY INTERNATIONAL, INC.
Shareholders are being asked to approve the New Sub-Advisory Agreement with
Fiduciary International, Inc., without material change from the Current
Sub-Advisory Agreement. The Adviser, its officers and affiliates own a
control-
6
<PAGE>
ling majority of the Fund's eligible vote and intend to vote to approve the New
Sub-Advisory Agreement. The following discussion of the New Sub-Advisory
Agreement is qualified in its entirety by reference to the form of the New
Sub-Advisory Agreement set forth in Appendix C. The Adviser, not the Fund, pays
for Fiduciary International, Inc.'s services.
As under the Current Sub-Advisory Agreement, Fiduciary International, Inc.,
located at Two World Trade Center, New York, New York 10048, agrees to act as
the investment sub-adviser for the Fund and manage the investment and
reinvestment of the assets of the Fund subject to the supervision of the board
of directors and the Adviser. Fiduciary International, Inc., is responsible for
complying with stated policies and applicable laws. As payment for its services,
the Adviser pays Fiduciary International, Inc., a fee based upon a percentage of
net assets: 0.50% of the first $250 million, 0.45% of the next $250 million and
0.40% of the amount in excess of $500 million. The Adviser and not the Fund pays
all the fees paid to Fiduciary International, Inc. The New Sub-Advisory
Agreement will not affect the fees paid by the Fund.
In the absence of willful misfeasance, bad faith or gross negligence or reckless
disregard of its obligations and duties, Fiduciary International, Inc., will not
be subject to liability to the Fund or any shareholder for any act or omission
in the course of, or in connection with, rendering services thereunder or for
any losses that may be sustained in the purchase, holding or sale of any
security.
The New Sub-Advisory Agreement shall become effective on the later of (i) the
effective date of changes in the ownership structure of Fiduciary Trust Company
International and Franklin Resources, Inc., or (ii) the first business day after
the date of the changes in the ownership structure when this Agreement shall
have been approved in accordance with the 1940 Act. Unless sooner terminated as
hereunder provided, it shall initially remain in effect for a period of two
years. Thereafter, subject to the termination provisions, the New Sub-Advisory
Agreement shall continue in force from year to year, but only as long as such
continuance is specifically approved, at least annually, in the manner required
by the 1940 Act; provided, however, that if the continuation of the New
Sub-Advisory Agreement is not approved, Fiduciary International, Inc., may
continue to serve in the manner and to the extent permitted by the 1940 Act and
the rules and regulations thereunder.
If for some unforeseen reason the New Sub-Advisory Agreement is not approved at
the meeting of shareholders, the Directors will consider other options. If
Proposal 2 is not approved, the Current Sub-Advisory Agreement with Fiduciary
International, Inc., will continue in effect through January 1, 2003 (unless
terminated sooner, for example by the proposed changes in the ownership
structure), and thereafter only as long as its continuance is approved at least
annually as described above.
The last time the Current Sub-Advisory Agreement was presented to shareholders
for approval was December 1, 2001, because a change of control at the Adviser.
MATTERS CONSIDERED BY THE DIRECTORS. On December 5, 2000, the Directors,
including all of the Independent Directors, discussed the proposed change in
control. The Directors, including all of the Independent Directors, approved the
New Sub-Advisory Agreement to take effect following approval by shareholders and
completion of the proposed change in control, and also called for a meeting of
shareholders to approve the New Sub-Advisory Agreement.
In its consideration of the New Investment Advisory Agreement, the Directors,
including the Independent Directors, received information describing Franklin
Resources, Inc., and the proposed changes in the ownership structure. The
Directors, including the Independent Directors, did not identify any single
factor as all-important or controlling, but among other factors considered the
following: (i) that the change in control will not result in a material change
in the terms of the sub-advisory agreement, the sub-advisory fees, or any of the
Fund's investment objectives or policies; (ii) although ownership structure of
Fiduciary International, Inc., will change, the Directors received assurances
from Fiduciary International, Inc., that there would be no material change in
the personnel providing services to the Fund and no reduction in the nature or
quality of those services; (iii) the Directors were informed by Fiduciary
International, Inc., that it did not foresee any changes in the day-to-day
operations of Fiduciary International, Inc., as a result of the change in
control; and (iv) the Directors will again consider whether to continue the New
Sub-Advisory
7
<PAGE>
Agreement in a meeting to be held in March 2001 and, at that time will review
updated information concerning the Fund's investment performance, the amount and
structure of the sub-advisory fees, Fiduciary International, Inc.'s
organizational capability and financial condition. Based on their evaluation of
all material factors and assisted by the advice of counsel for the Independent
Directors, the Directors and Independent Directors concluded that the New
Sub-Advisory Agreement is fair and reasonable, and voted to approve it. The
Directors, including the Independent Directors, also voted to approve the
submission of the New Sub-Advisory Agreement to shareholders. The Adviser, its
officers and affiliates own a controlling majority of the Fund's eligible vote
and intend to vote to approve Proposal 2.
GENERAL INFORMATION:
--------------------------------------------------------------------------------
CORPORATE ORGANIZATION. The Fund is organized as a Maryland corporation and is
registered as a diversified open-end investment management company, commonly
known as a mutual fund. Davis International Total Return Fund is currently the
only series offered to the public by the Fund. Davis International Total Return
Fund's investment objective is total return through capital growth and/or
income. Davis International Total Return Fund pursues this objective by
investing primarily in the common stock of foreign companies and in common stock
issued by U.S. companies doing substantial business in foreign markets.
WHO MAY VOTE. The Directors have fixed the Record Date as of the close of
business on December 31, 2000. Only those shareholders who own shares of the
Fund on the close of business on Record Date are entitled to notice of and to
vote at the meeting. The holder of each full share outstanding as of the close
of business on Record Date is entitled to one vote for each dollar of net asset
value and each fractional share is entitled to a proportionate share of one vote
upon each matter properly submitted to the meeting. The Fund is authorized to
issue four Classes of shares (A, B, C and Y), each with different expenses and
different net asset values. Appendix A shows the eligible votes and shareholders
owning more than 5% of any Class of the Fund's shares.
QUORUM AND VOTING REQUIREMENTS. Record Date shareholders are entitled to vote on
both proposals. In order to take action on any proposal (or element of a
proposal), a "quorum" or a majority of the votes entitled to be cast on that
proposal must be represented in person or by proxy. The Adviser, its officers
and affiliates own the majority of the Fund's shares and therefore constitute a
quorum and have a controlling vote. The Adviser and its officers and affiliates
intend to vote to approve both of the proposals.
VOTING ON OTHER MATTERS WHICH PROPERLY COME BEFORE THE MEETING. A shareholder
vote may be taken on any other matter to come properly before the meeting prior
to such adjournment(s) if sufficient votes to approve such matter have been
received and such vote is otherwise appropriate. The Directors do not presently
know of any matter to be considered at the meeting other than the matters
described in this Information Statement.
SUBMISSION OF SHAREHOLDER PROPOSALS. The Fund is not required to hold annual
shareholders' meetings and does not intend to do so.
The Fund may hold special meetings as required or as deemed desirable by its
Directors for other purposes, such as: changing fundamental policies, electing
or removing directors, or approving or amending an investment advisory
agreement. In addition, special shareholder meetings may be called for upon the
written request of shareholders having at least 25% of the eligible votes that
could be cast at the meeting.
Shareholders wishing to submit proposals for inclusion in an Information
Statement for a future shareholder meeting should send their written submissions
to Davis International Series, Inc., at 2949 East Elvira Road, Suite 101,
Tucson, Arizona 85706. Proposals must be received a reasonable time in advance
of a proxy solicitation to be included. Submission of a proposal does not
guarantee inclusion in an information or proxy statement because the proposal
must comply with certain federal securities regulations.
SHAREHOLDER REPORTS. The Fund will furnish, without charge, a copy of its most
recent Annual Report and Semiannual Report to any shareholder upon request.
Shareholders desiring a copy of such reports should
8
<PAGE>
direct all written requests to the Davis Funds, P.O. Box 8406, Boston,
Massachusetts 02266-8406, or should call Davis Funds at 1-800-279-0279.
NOTICE TO BANKS, BROKERS-DEALERS AND VOTING TRUSTEES AND THEIR NOMINEES. Please
advise the Fund in writing, whether other persons are the beneficial owners of
the shares for which this Information Statement is being provided and, if so,
the number of copies of the Information Statement, Annual Reports or Semiannual
Reports you wish to receive in order to supply copies to such owners. Write to
Davis International Series, Inc., 2949 East Elvira Road, Suite 101, Tucson,
Arizona 85706.
IMPORTANT SERVICE PROVIDERS
DAVIS FUNDS.
2949 East Elvira Road, Suite 101, Tucson, Arizona 85706.
The Davis Funds include nine funds which are offered to the public:
Davis International Total Return Fund,
Davis New York Venture Fund,
Davis Growth & Income Fund,
Davis Growth Opportunity Fund,
Davis Financial Fund,
Davis Real Estate Fund,
Davis Convertible Securities Fund,
Davis Government Bond Fund, and
Davis Government Money Market Fund;
The Davis Funds include three funds which are sold exclusively to insurance
company separate accounts:
Davis Value Portfolio,
Davis Financial Portfolio, and
Davis Real Estate Portfolio.
ADVISER. Davis Selected Advisers, L.P.;
2949 East Elvira Road, Suite 101, Tucson, Arizona 85706.
Davis Selected Advisers -NY, Inc., a wholly owned subsidiary of the Adviser,
also provides sub-advisory services to the Fund. The Adviser pays all of Davis
Selected Advisers - NY, Inc.'s advisory fees.
SUB-ADVISER. Fiduciary International, Inc.
Two World Trade Center, New York, New York 10048.
PRINCIPAL UNDERWRITER. Davis Distributors, LLC
2949 East Elvira Road, Suite 101, Tucson, Arizona 85706.
INDEPENDENT ACCOUNTANTS. KPMG LLP
COUNSEL. D'Ancona & Pflaum
CUSTODIAN. State Street Bank
TRANSFER AGENT. Boston Financial Data Services
9
<PAGE>
By order of the Board of Directors
----------------------------------
Thomas Tays, Secretary
================================================================================
LIST OF APPENDICES
APPENDIX A: Eligible Votes and Large Shareholders
APPENDIX B: Officers of Davis International Series, Inc. and Fiduciary
International, Inc.
APPENDIX C: New Sub-Advisory Agreement
10
<PAGE>
APPENDIX A:
--------------------------------------------------------------------------------
ELIGIBLE VOTES AND LARGE SHAREHOLDERS
ELIGIBLE VOTES
as of December 31, 2000
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS C CLASS Y TOTAL
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DAVIS INTERNATIONAL xx xx xx xx Xx
TOTAL RETURN FUND
</TABLE>
The following table sets forth the name and holdings of any person(s) known by
the Davis Funds to be a record owner(s) of more than 5% of the outstanding
shares of any Class of the Fund as of December 31, 2000. Other than as indicated
below, Davis International Series, Inc., is not aware of any shareholder that
beneficially owns in excess of 25% of the Fund's total outstanding shares.
SHAREHOLDERS OWNING MORE THAN 5% OF SHARES OF ANY CLASS
as of December 31, 2000
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHAREHOLDER % OF CLASS NUMBER OF
OUTSTANDING SHARES OWNED
DAVIS INTERNATIONAL TOTAL RETURN FUND - CLASS A SHARES
<S> <C> <C>
Shelby Cullom Davis & Co. xx% xx
Investment # 3
906 Fifth Avenue, 11th Floor
New York, NY 10017-1021
Davis Selected Advisers, L.P. xx% Xx
Attention: John Gilding
Elvira Road, Suite 101
Tucson, Arizona 85706
DAVIS INTERNATIONAL TOTAL RETURN FUND - CLASS B SHARES
Merrill Lynch Pierce Fenner & Smith xx% xx
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
DAVIS INTERNATIONAL TOTAL RETURN FUND - CLASS C SHARES
Prudential Securities Inc. FBO xx% Xx
Bank One Trustco NA Trustee
FBO Elkhorn LLC
Under TR#43576008 DTD 3/22/00
500 Skokie Blvd., Ste. 310
Northbrook, IL 60062-2830
A-1
<PAGE>
APPENDIX A:
--------------------------------------------------------------------------------
ELIGIBLE VOTES AND LARGE SHAREHOLDERS (CONT.)
Salomon Smith Barney Inc. xx% Xx
00172862835
333 W. 34th St. #3
New York, NY 10001-2483
DAVIS INTERNATIONAL TOTAL RETURN FUND - CLASS Y SHARES
Merrill Lynch Pierce Fenner & Smith xx% Xx
Mutual Fund Operations
4800 Deerlake Drive East, 2nd Floor
Jacksonville, FL 32246-6484
</TABLE>
A-2
<PAGE>
APPENDIX B:
--------------------------------------------------------------------------------
OFFICERS OF DAVIS INTERNATIONAL SERIES, INC., AND
FIDUCIARY INTERNATIONAL, INC.
OFFICERS OF DAVIS INTERNATIONAL SERIES, INC.
<TABLE>
<CAPTION>
NAME BIRTHDATE POSITION
--------------------------------------------------------------------------------------------
<S> <C> <C>
CHRISTOPHER C. DAVIS(1) July 13, 1965 President
ANDREW DAVIS(2) June 25, 1963 Vice President
KENNETH C. EICH(3) August 14, 1953 Vice President
SHARRA L. REED(3) September 25, 1966 Vice President, Treasurer and
Assistant Secretary
THOMAS D. TAYS(3) March 7, 1957 Vice President and Secretary
</TABLE>
All Officers of the Fund are also officers of the Adviser.
The principal occupation of each of the officers is working for the Adviser
and/or its affiliates.
(1) Davis Selected Advisers - NY, Inc., 609 Fifth Avenue, New York,
New York 10017.
(2) Davis Selected Advisers - NY, Inc., 124 East Marcy Street, Santa Fe,
New Mexico 87501.
(3) Davis Selected Advisers, L.P., 2949 East Elvira Road, Suite 101, Tucson,
Arizona 85706.
OFFICERS OF FIDUCIARY INTERNATIONAL, INC.
FIDUCIARY INTERNATIONAL, INC. IS ORGANIZED AS A DELAWARE CORPORATION.
ITS OFFICERS AND DIRECTORS ARE:
<TABLE>
<CAPTION>
NAME POSITION
---------------------------------------------------------------------------------------------------------
<S> <C>
James C. Goodfellow President of Fiduciary International Inc.; serves Fiduciary Trust Company
International as Vice Chairman and Executive Vice President.
Anne M. Tatlock Chairman/Director of Fiduciary International Inc.; serves Fiduciary Trust
Company International as Chairman and Chief Executive Officer, and as a member
of the Global Investment Committee and Investment Policy Committee
William Y. Yun Director of Fiduciary International, Inc.; serves Fiduciary Trust Company
International as President and as a member of the Global Investment Committee
and Investment Policy Committee
Christine M. Ferrante Treasurer of Fiduciary International Inc.; serves Fiduciary Trust Company
International as Senior Vice President and Comptroller
Carol K. Demitz Director of Fiduciary International Inc.; serves Fiduciary Trust Company
International as Senior Vice President, Chief Corporate Counsel and Secretary
</TABLE>
The principal occupation of each of the directors and officers is working for
Fiduciary International, Inc., and its parent company, Fiduciary Trust Company
International. Both Fiduciary International, Inc. and Fiduciary Trust Company,
International, Inc., maintain their principal offices at Two World Trade Center,
New York, New York 10048.
B-1
<PAGE>
APPENDIX C:
--------------------------------------------------------------------------------
NEW SUB-ADVISORY AGREEMENT,
DAVIS INTERNATIONAL SERIES, INC.
FIDUCIARY INTERNATIONAL, INC.
SUB-ADVISORY AGREEMENT
FEBRUARY 24, 2001
Fiduciary International, Inc.
Two World Trade Center
New York, New York 10048
Re: Sub-Advisory Agreement for Davis International Total Return Fund,
An Authorized Series of Davis International Series, Inc.
Gentlemen:
This is to confirm that Davis Selected Advisers, L.P. ("DSA") is retaining you
as Investment Sub-Adviser for the portfolio of the International Total Return
Fund (the "Fund") of Davis International Series, Inc. (the "Company").
This letter sets forth the terms and conditions of your retention. If they are
acceptable to you, please acknowledge in the space provided. Upon your
acceptance, the retention and the mutual obligations in respect thereto shall be
effective as provided herein. The terms and conditions are as follows:
1. Investment Services. You shall act as the Investment Sub-Adviser for the
Fund and will manage the investment and reinvestment of the assets of the
Fund subject to the supervision of the Board of Directors of the Company,
DSA, which serves as Adviser to the Company, and to any applicable
provisions as in effect from time to time of (a) the Articles of
Incorporation and Bylaws of the Company, (b) the prospectus, statement of
additional information, and other information set forth in the Fund's
registration documents under the Securities Act of 1933 (the "1933 Act")
and the Investment Company Act of 1940 (the "1940 Act"), including any
supplements thereto, and (c) the Investment Advisory agreement between DSA
and the Company (the "Investment Advisory Agreement") in respect to the
Fund and the Company's Code of Ethics. You acknowledge that you have
received copies of the above documents as in effect on the date of your
acceptance of this letter. The undersigned agrees that it will promptly
deliver to you any amendments, changes or additions of or to these
documents. Without limitation, you agree that all securities transactions
will conform to (a) the stated objectives and policies of the Fund, (b) the
brokerage policies set forth in the Investment Advisory Agreement (which
are hereby incorporated by reference herein) and the registration
documents, and (c) those investment and brokerage policies directed by the
Board of Directors of the Company or any committee thereof, that have been
provided to you.
2. Independent Contractor. You shall be an independent contractor. Unless
otherwise expressly provided or authorized hereunder, or by the Board of
Directors of Company, you have no authority to represent the Company or the
Fund in any way or otherwise be an agent of the Company or the Fund. You
shall also not represent or be the agent of the undersigned except as
expressly provided or authorized hereunder, or as authorized by the
undersigned in any other writing.
C-1
<PAGE>
APPENDIX C:
--------------------------------------------------------------------------------
NEW SUB-ADVISORY AGREEMENT (CONT.)
3. Reports and Records. You agree to provide DSA with any reasonable reports,
analyses or other documentation DSA requires to carry out its
responsibilities under its Investment Advisory Agreement with the Fund,
including those related to the placement of security transactions, its
administrative responsibilities, and its responsibility to monitor
compliance with stated investment objectives, policies and limitations and
the investment performance of the Fund. You agree, directly or through an
agent, to provide daily information with respect to the portfolio
transactions of the Fund to DSA. You agree to provide all documentation
reasonably required by DSA to maintain the Fund's accounting records in
accordance with the 1940 Act and the Investment Advisers Act of 1940 (the
"Advisers Act") and the regulations issued thereunder, and to preserve
copies of all documents and records related to asset transactions,
positions and valuations related to the Fund in the manner and for the
periods prescribed by such regulations. You agree that all documents and
records maintained by you with respect to the Fund, exclusively relating to
the Fund, are the property of the Company and will be surrendered to DSA or
the Company upon the request of either. You agree to provide information
and to allow inspection of such documents and records at reasonable times
by any authorized representative of DSA, the Company's Board of Directors
or any committee thereof, the Company's independent public accountants, or
appropriate regulatory authorities.
4. Make Personnel Available. You agree to make your personnel engaged in
activities on behalf of the Fund available at reasonable times for
consultations with DSA personnel and the Company's Board of Directors, or
any committee thereof, including attendance at their meetings, wherever
situated. Travel, meals and lodging expenses for such purposes shall be
reimbursed.
5. Facilities, Equipment, and Personnel. You agree to provide office
facilities, equipment and personnel for carrying out your duties hereunder
at your own expense except as specifically provided hereunder.
6. Non-Exclusive Agreement. It is agreed that your services are not to be
deemed exclusive and you shall be free to render similar or other services
to others.
7. Standard of Care and Liability. (a) Neither DSA nor you, nor any officers,
directors, employees, agents, controlling persons, assigns or directors of
the Company shall be liable for any error of judgment or law, or for any
loss suffered by the Company or its shareholders in connection with the
matters to which this Agreement relates, except that no provision of this
Agreement shall be deemed to protect DSA or you against any liability to
the Company or its shareholders to which DSA or you might otherwise be
subject by reason of any willful misconduct, gross negligence, or actions
taken in bad faith in the discharge of your respective obligations and
performance of your respective duties under this Agreement.
(b) Notwithstanding Section 7(a) of this Agreement, DSA agrees to indemnify
and hold harmless you and any affiliated person (except the Company), and
each person, if any, who, within the meaning of Section 15 of the 1933 Act
controls ("Controlling Person") you (all of such persons being referred to
as "Sub-Adviser Indemnified Persons") against any and all losses, claims,
damages, liabilities (excluding salary charges of your employees, officers
or partners), or litigation (including legal and other) expenses to which a
Sub-Adviser Indemnified Person may become subject under the 1933 Act, the
1940 Act, the Advisers Act, any other statute, common law or otherwise,
arising out of DSA's responsibilities to the Company which (1) may be based
upon any untrue statement or alleged untrue statement of a material fact
supplied by or which is the responsibility of DSA and contained in the
Registration Statement or prospectus or statement of additional information
covering shares of the Fund, or any amendment thereof or any supplement
thereto, or the omission or alleged omission or failure to state therein a
material fact known or which should have been known to DSA and was required
to be stated therein or necessary to make the statements therein not
misleading, unless such
C-2
<PAGE>
APPENDIX C:
--------------------------------------------------------------------------------
NEW SUB-ADVISORY AGREEMENT (CONT.)
statement or omission was made in reliance upon information furnished to
DSA or the Company or to any person affiliated with DSA by a Sub-Adviser
Indemnified Person, in writing, for inclusion in the Registration Statement
or prospectus or statement of additional information; or (2) may be based
upon a failure by DSA to comply with, or a breach of, any provision of this
Agreement or any other agreement with the Fund; or (3) may be based upon
misfeasance or negligence by DSA in the discharge of its duties and
performance of its obligations under this Agreement or any other agreement
with the Fund; provided, however, that in no case shall the indemnity in
favor of the Sub-Adviser Indemnified Person be deemed to protect such
person against any liability to which any such person would otherwise be
subject by reason of any misfeasance or negligence in the discharge of its
obligations and the performance of its duties under this Agreement.
(c) Notwithstanding Section 7(a) of this Agreement, you agree to indemnify
and hold harmless DSA, any person affiliated with DSA (except the Company),
and each person, if any, who, within the meaning of the 1933 Act controls
("Controlling Person") DSA (all of such persons being referred to as
"Adviser Indemnified Persons") against any and all losses, claims, damages,
liabilities (excluding salary charges of employees, officers or partners of
DSA), or litigation (including legal and other) expenses to which an
Adviser Indemnified Person may become subject under the 1933 Act, the 1940
Act, the Advisers Act, any other statute, common law or otherwise, arising
out of your responsibilities as a sub-investment adviser to the Fund which
(1) may be based upon any untrue statement or alleged untrue statement of a
material fact supplied by you for inclusion in the Registration Statement
or prospectus or statement of additional information covering shares of the
Fund, or any amendment thereof or any supplement thereto, or, with respect
to a material fact supplied by you for inclusion in the Registration
Statement or prospectus or statement of additional information, the
omission or alleged omission or failure to state therein a material fact
known or which should have been known to you and was required to be stated
therein or necessary to make the statements therein not misleading, unless
such statement or omission was made in reliance upon information furnished
to you, or the Company, or to any person affiliated with you or the Company
by an Adviser Indemnified Person; or (2) may be based upon a failure by you
to comply with, or a breach of, any provision of this Agreement or any
other agreement with the Fund; or (3) may be based upon misfeasance or
negligence by you in the discharge of your duties and performance of your
obligations under this Agreement or any other agreement with the Fund;
provided, however, that in no case shall the indemnity in favor of the
Adviser Indemnified Person be deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of
any misfeasance or negligence in the discharge of its obligations and the
performance of its duties under this Agreement.
(d) Neither DSA nor you shall be liable under this Section with respect to
any claim made against an Indemnified Person unless such Indemnified Person
shall have notified the indemnifying party 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 such Indemnified Person
(or such Indemnified Person shall have received notice of such service on
any designated agent), but failure to notify the indemnifying party of any
such claim shall not relieve the indemnifying party from any liability
which it may have to the Indemnified Person against whom such action is
brought otherwise than on account of this section. In case any such action
is brought against the Indemnified Person, the indemnifying party will be
entitled to participate, at its own expense, in the defense thereof or,
after notice to the Indemnified Person, to assume the defense thereof, with
counsel satisfactory to the Indemnified Person. If the indemnifying party
assumes the defense and the selection of counsel by the indemnifying party
to represent both the Indemnified Person and the indemnifying party would
result in a conflict of interest and would not, in the reasonable judgment
of the Indemnified Person, adequately represent the interests of the
Indemnified Person, the indemnifying party will, at its own expense, assume
the defense with counsel to the indemnifying party and, also at its own
expense, with separate counsel to
C-3
<PAGE>
APPENDIX C:
--------------------------------------------------------------------------------
NEW SUB-ADVISORY AGREEMENT (CONT.)
the Indemnified Person which counsel shall be satisfactory to the
indemnifying party and the Indemnified Person. The Indemnified Person will
bear the fees and expenses of any additional counsel retained by it, and
the indemnifying party shall not be liable to the Indemnified Person under
this Agreement for any legal or other expenses subsequently incurred by the
Indemnified Person independently in connection with the defense thereof
other than reasonable costs of investigation. The indemnifying party shall
not have the right to compromise or settle the litigation without the prior
written consent of the Indemnified Person of the compromise or settlement
results, or may result, in a finding of wrongdoing on the part of the
Indemnified Person.
8. Compensation. DSA shall pay you a portion of the fee it receives from the
Company with respect to the Fund under the Investment Advisory Agreement
based upon the attached fee schedule, and shall reimburse expenses
expressly approved for reimbursement by DSA. You agree that neither the
Company nor the Fund is responsible or paying your sub-advisory fees.
Payment for your services and reimbursement of expenses approved by DSA
shall be made monthly. From time to time, with your express written
approval, DSA may waive any part or all of the fees due to it under the
Investment Advisory Agreement for the period specified in such writing.
Such approval shall constitute a waiver by you of your portion of the
waived fees.
8. Effective Date. This Agreement shall become effective on the later of (i)
the effective date of the changes in the ownership structure of Fiduciary
Trust Company International and Franklin Resources, Inc. described herein,
or (ii) the first business day after the date of the changes in the
ownership structure when this Agreement shall have been approved in
accordance with the 1940 Act. Unless sooner terminated as hereunder
provided, it shall initially remain in effect for a period of two years.
Thereafter, subject to the termination provisions herein, this Agreement
shall continue in force from year to year thereafter, but only as long as
such continuance is specifically approved, at least annually, in the manner
required by the 1940 Act; provided, however, that if the continuation of
this Agreement is not approved, you may continue to serve in the manner and
to the extent permitted by the 1940 Act and the rules and regulations
thereunder.
Franklin Resources, Inc. (operating as Franklin Templeton Investments) and
Fiduciary Trust Company International (Fiduciary International, Inc.'s
corporate parent) have announced the signing of a definitive agreement
under which Franklin Resources will acquire Fiduciary Trust Company
International in an all-stock transaction. This change in ownership
structure, which is subject to shareholder and regulatory approvals and
other customary closing conditions, is expected to be completed in the
first quarter of calendar 2001.
10. Termination. This Agreement shall automatically terminate immediately in
the event of its assignment (except as otherwise permitted by the 1940 Act
or rules thereunder) or in the event of the termination of the Investment
Advisory Agreement. This Agreement may be terminated without penalty at any
time (a) upon sixty (60) days' written notice to you by DSA, or upon such
sixty (60) days' written notice to you by the Company pursuant to action by
the Board of Directors of the Company, or by the vote of a majority of the
outstanding voting securities of the Fund, or (b) upon sixty (60) or more
days' written notice by you to DSA and the Company. The terms "assignment"
and "vote of a majority of the outstanding voting securities" shall have
the meaning set forth in the 1940 Act and the rules and regulations
thereunder. Termination of this Agreement shall not affect your right to
receive payments of the unpaid balance of the compensation earned and
reimbursable expenses incurred prior to such termination.
11. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
shall not be thereby affected.
C-4
<PAGE>
APPENDIX C:
--------------------------------------------------------------------------------
NEW SUB-ADVISORY AGREEMENT (CONT.)
12. Choice of Law. This Agreement shall be construed according to the laws of
the State of New York. It may be executed in counterparts each of which
shall be deemed an original and all of which together shall constitute one
and the same agreement.
Yours very truly,
Davis Selected Advisers, L.P., by
Davis Investments, LLC, General Partner
-------------------------------------
ACCEPTED AND APPROVED this _______ day of _________________, _______.
Fiduciary International, Inc.
By
----------------------------------
C-5
<PAGE>
APPENDIX C:
--------------------------------------------------------------------------------
NEW SUB-ADVISORY AGREEMENT (CONT.)
SUB-ADVISORY FEE SCHEDULE FOR
FIDUCIARY INTERNATIONAL, INC.
A monthly fee as of the last day of each month in each year based upon the
average daily value of net assets during a month for which the monthly fee is
calculated as follows:
Value of Average Daily Net
Assets of the Total Return
Monthly Rate Fund During the Month
------------ ---------------------
1/12 of 0.50% of First $250 Million
1/12 of 0.45% of Next $250 Million
1/12 of 0.40% of Amount in excess of $500 Million
C-6
