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¨ | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
¨ | Soliciting Material Pursuant to §240.14a-12 |
x | No fee required. |
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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: |
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¨ | 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 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. |
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February , 2003
Dear Shareholder:
Your fund and certain other funds within the Scudder Investments Fund Complex are holding shareholder meetings at which shareholders will be asked to approve new advisory and sub-advisory agreements.
On September 27, 2002, Deutsche Bank AG (“Deutsche Bank”) agreed to sell its global passive equity, enhanced equity and passive fixed income businesses to Northern Trust Investments, Inc. (“NTI”), an indirect investment advisory subsidiary of Northern Trust Corporation. The sale was completed on January 31, 2003. As part of this sale, most of the members of the index team responsible for the management of your fund became employees of NTI. In connection with this sale, we are proposing that you approve NTI as a sub-advisor to your fund. Your fund will incurno additional cost as a result of NTI’s providing sub-advisory services.
In addition, we are asking you to approve a new investment advisory agreement between Deutsche Investment Management Americas Inc. (“DeIM”), the current investment advisor to your fund, and Scudder Investors Trust (the “Trust”), the business trust of which your fund is a series. This investment advisory agreement will be identical to the Trust’s current investment advisory agreement, except for the dates of execution, effectiveness and initial term, and except that the new advisory agreement will also contain a specific provision with respect to DeIM’s delegation of duties under the new advisory agreement to an unaffiliated sub-advisor. Currently, the investment advisory agreement permits DeIM to appoint an affiliate as a sub-advisor but does not contain a provision specifically allowing for delegation of advisory duties to a sub-advisor which is not an affiliate.
The enclosed proxy statement details these proposals. For your convenience, we’ve provided a question and answer section that gives a brief overview of the issues for which your vote is requested. The proxy statement itself provides greater detail about the proposals, why they are being made and how they apply to your fund. Please read these materials carefully.
Please be assured that:
• | Approval of these proposals would have no effect on the number of shares you own or the value of those shares. |
• | The investment objectives and policies of your fund would not change. |
• | The advisory fees applicable to your fund would not change. The sub-advisory fees to be paid to NTI would be paid by DeIM. |
• | The members of your fund’s Board carefully reviewed the proposals prior to recommending that you vote in favor of the proposals. |
To vote, simply complete the enclosed proxy card—be sure to sign and date it—and return it to us in the enclosed postage-paid envelope. Or, you can save time by voting through the Internet or by telephone as described on your proxy card.
Your vote is very important to us. If we do not hear from you, our proxy solicitor may contact you. Thank you for your response and for your continued investment.
Respectfully,
William Glavin
President
The attached proxy statement contains more detailed information about the proposals. Please read it carefully.
Scudder Investments is part of Deutsche Asset Management, which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Bank Securities Inc., Deutsche Asset Management Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Investment Management Americas Inc. and Scudder Trust Company.
Q&A
Q: What is the purpose of this proxy solicitation?
A: The purpose of this proxy solicitation is to ask you to vote on the following proposals:
n | to approve a new advisory agreement between Scudder Investors Trust (the “Trust”), the business trust of which your fund, Scudder S&P 500 Stock Fund (the “Fund”), is a series, and Deutsche Investment Management Americas Inc. (“DeIM”), the investment advisor for the Trust; and |
n | to approve an investment sub-advisory agreement for your Fund between DeIM and Northern Trust Investments, Inc. (“NTI”). |
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT YOU VOTE FOR THESE PROPOSALS.
Q: Why am I being asked to vote for new investment advisory and sub-advisory agreements?
A: On September 27, 2002, Deutsche Bank AG, the parent company of DeIM, entered into an agreement with NTI under which Deutsche Bank agreed to sell its global passive equity, enhanced equity and passive fixed income businesses to NTI. The sale was completed on January 31, 2003.
As part of this transaction, certain employees of DeIM, including most members of the index team responsible for management of your Fund, have become employees of NTI, pursuant to an agreement described in the proxy statement. This agreement provides that these individuals will be made available to DeIM by NTI and will continue to manage your Fund pursuant to the current advisory agreement until approval of the sub-advisory agreement. If the shareholders approve the new sub-advisory agreement, these employees will no longer be made available to DeIM but are expected to continue to provide services to your Fund under the sub-advisory agreement as employees of NTI. DeIM and NTI have advised your fund’s Board of Trustees that if the sub-advisory agreement is approved, these same individuals would continue to be responsible for the management of your Fund at NTI and would continue to use substantially the same investment process. We are recommending that shareholders approve NTI as the sub-advisor to your Fund.
Q&A continued
We are also recommending that you approve a new investment advisory agreement for the Trust, on behalf of your Fund. The new advisory agreement will be identical to the current investment advisory agreement, except for the dates of execution, effectiveness and initial term, and except that the new advisory agreement will contain a specific provision in regard to DeIM’s delegation of some or all of its duties (under the supervision of DeIM) to a non-affiliated sub-advisor. This change is intended to facilitate the appointment of NTI as a sub-advisor to your Fund.
In determining to recommend that the shareholders approve the new advisory and sub-advisory agreements, we—the Board of Trustees of the Trust—considered, among other factors, that approval of the proposed sub-advisory agreement would permit your Fund to continue to be managed by most of the same investment advisory personnel who currently provide services to the Fund. Among other factors, the Board also considered the nature, scope and quality of services that DeIM provides under the current advisory agreement and would provide under the proposed advisory agreement and that NTI would likely provide to the Fund under the proposed sub-advisory agreement. The Board also considered that the advisory fee rates and other fees paid by the Fund would not change as a result of the implementation of the new advisory and sub-advisory agreements.
Q: Will the investment advisor to my Fund remain the same?
A: Yes. Under the proposed new advisory agreement, DeIM will remain the advisor to your Fund. If the proposed advisory and sub-advisory agreements are approved, DeIM will supervise the provision of sub-advisory services to your Fund. As described above, the employees of the index team responsible for management of your Fund have become employees of NTI but have been made available to DeIM until approval of the sub-advisory agreement and will continue to provide services to your Fund.
Q: Will the investment advisory fees my Fund pays remain the same?
A: Yes. The investment advisory fee rate charged under the proposed advisory agreement with DeIM will remain the same as under the current advisory agreement. The fee proposed to be paid to NTI for its sub-advisory services to your Fund will be paid by DeIM, not by your Fund or the Trust.
Q: What are the Board’s recommendations?
A: The Board of Trustees recommends that all shareholders vote “FOR” the approval of the new advisory agreement and the sub-advisory agreement.
Q&A continued
Q: Will my Fund pay for the proxy solicitation and legal costs associated with this solicitation?
A: No, DeIM will bear these costs.
Q: How can I vote?
A: You can vote in any one of four ways:
n | Through the internet by going to the website listed on your proxy card; |
n | By telephone, with a toll-free call to the number listed on your proxy card; |
n | By mail, with the enclosed proxy card; or |
n | In person at the special meeting. |
We encourage you to vote over the internet or by telephone, using the voting control number that appears on your proxy card. Whichever method you choose, please take the time to read the full text of the proxy statement before you vote.
Q: I plan to vote by mail. How should I sign my proxy card?
A: Please see the instructions at the end of the Notice of Special Meeting of Shareholders, which is attached.
Q: I plan to vote by telephone. How does telephone voting work?
A: To vote by telephone, please read and follow the instructions on your enclosed proxy card.
Q: I plan to vote through the internet. How does internet voting work?
A: To vote through the internet, please read and follow the instructions on your enclosed proxy card.
Q: Whom should I call with questions?
A: Please call Georgeson Shareholder Communications, Inc. at 1-866-767-2075 with any additional questions about the proxy statement or the procedures to be followed to execute and deliver a proxy.
The attached proxy statement contains more detailed information about the proposals. Please read it carefully.
SCUDDER INVESTORS TRUST
Scudder S&P 500 Stock Fund
• Class A
• Class B
• Class C
Two International Place
Boston, Massachusetts 02110-4103
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held March 21, 2003
A special meeting of shareholders of the Scudder S&P 500 Stock Fund (the “Fund”), a series of Scudder Investors Trust (the “Trust”) will be held at the offices of Deutsche Asset Management, Two International Place, 13th Floor, Boston, Massachusetts 02110-4103 on March 21, 2003 at [4:00] p.m. (Eastern time) (the “Special Meeting”). The Trust is an open-end management investment company organized under the laws of the Commonwealth of Massachusetts.
The Special Meeting is being held to consider and vote on the following matters for the Fund, as indicated below and more fully described under the corresponding proposals (the “Proposals”) in the accompanying proxy statement, and such other matters as may properly come before the Special Meeting or any adjournments thereof:
PROPOSAL I: | To approve a new advisory agreement between the Trust, on behalf of the Fund, and Deutsche Investment Management Americas Inc. (“DeIM”). | |
PROPOSAL II: | To approve an investment sub-advisory agreement for the Fund between DeIM and Northern Trust Investments, Inc. |
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 close of business on January 22, 2003, 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.
The Board of Trustees of the Trust unanimously recommends that shareholders vote FOR the Proposals.
This notice and related proxy material are first being mailed to shareholders of the Fund on or about February , 2003. This proxy is being solicited on behalf of the Board of Trustees of the Trust.
By Order of the Board of Trustees,
John Millette,Secretary
Boston, Massachusetts
February , 2003
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES (UNLESS YOU ARE VOTING BY TELEPHONE OR THROUGH THE INTERNET). NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED STATES. |
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT OR THE PROCEDURES TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT GEORGESON SHAREHOLDER COMMUNICATIONS, INC. AT 1-866-767-2075.
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Registration | Valid Signature | |
Corporate Accounts | ||
(1) ABC Corp. | ABC Corp. John Doe, Treasurer | |
(2) ABC Corp. | John Doe, Treasurer | |
(3) ABC Corp. c/o John Doe, Treasurer | John Doe | |
(4) ABC Corp. Profit Sharing Plan | John Doe, Trustee | |
Partnership Accounts | ||
(1) The XYZ Partnership | Jane B. Smith, Partner | |
(2) Smith and Jones, Limited Partnership | Jane B. Smith, General Partner | |
Trust Accounts | ||
(1) ABC Trust Account | Jane B. Doe, Trustee | |
(2) Jane B. Doe, Trustee u/t/d 12/28/78 | Jane B. Doe | |
Custodial or Estate Accounts | ||
(1) John B. Smith, Cust. f/b/o JohnB. Smith Jr. UGMA/UTMA | John B. Smith | |
(2) Estate of John B. Smith | John B. Smith, Jr., Executor |
SCUDDER INVESTORS TRUST
Scudder S&P 500 Stock Fund
•Class A
•Class B
•Class C
Two International Place
Boston, Massachusetts 02110-4103
PROXY STATEMENT FOR THE SPECIAL MEETING
OF SHAREHOLDERS
March 21, 2003
This proxy statement (“Proxy Statement”) is being furnished in connection with the solicitation of proxies by the Board of Trustees of Scudder Investors Trust (the “Trust”) with respect to its series, Scudder S&P 500 Stock Fund (the “Fund”), of proxies to be used at the special meeting of the Trust to be held at the offices of Deutsche Asset Management, Two International Place, 13th Floor, Boston, Massachusetts 02110-4103 on March 21, 2003 at [4:00] p.m. (Eastern time) and at any adjournments thereof (the “Special Meeting”). This Proxy Statement and accompanying proxy card (“Proxy”) are expected to be mailed to shareholders on or about February , 2003.
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. See “Background.”
The Fund is comprised of three classes of shares, each with its own expense structure. However, since the proposals presented in this Proxy Statement (the “Proposals”) uniformly affect each class, shareholders of each class will vote together as a single class on all the Proposals, and each vote, regardless of its class, has equal weight.
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 corresponding Proposals discussed herein, and such other matters as may properly come before the Special Meeting or any adjournments thereof:
Proposal I: | To approve a new advisory agreement (the “New Advisory Agreement”) between the Trust, on behalf of the Fund, and Deutsche Investment Management Americas Inc. (“DeIM”). | |
Proposal II: | To approve an investment sub-advisory agreement (the “New Sub-Advisory Agreement”) for the Fund between DeIM and Northern Trust Investments, Inc. (“NTI”). |
The appointed proxies will vote on any other business as may properly come before the Special Meeting or any adjournment thereof.
Unlike funds that are actively managed, the Fund seeks to provide investment results that replicate, as closely as possible, before expenses, the performance of a target index, the Standard & Poor’s Composite Stock Price Index (the “S&P 500 Index”), which emphasizes stocks of large US companies, by holding a statistically selected sample of
the securities in the S&P 500 Index. It seeks to do so by investing, under normal circumstances, at least 80% of total assets, plus the amount of any borrowings for investment purposes, in common stocks and securities included in the S&P 500 Index.1
VOTING INFORMATION
Notice of the Special Meeting and a Proxy accompany this Proxy Statement. In addition to solicitations made by mail, solicitations may also be made by telephone, through the internet or in person by officers or employees of the Fund and certain financial services firms and their representatives, who will receive no extra compensation for their services. All costs of solicitation, including (a) printing and mailing of this Proxy Statement and accompanying material, (b) the reimbursement of brokerage firms and others for their expenses in forwarding solicitation material to the beneficial owners of the Fund’s shares, (c) payment to Georgeson Shareholder Communications, Inc. (“Georgeson”), a proxy solicitation firm, for its services in soliciting Proxies and (d) supplementary solicitations to submit Proxies, will be borne by DeIM, the investment advisor for the Fund. Georgeson has been engaged to assist in the solicitation of proxies for the Fund at an estimated total cost of $5,652. However, the exact cost will depend on the amount and types of services rendered. If the Fund records votes by telephone or through the internet, the Fund will use procedures designed to authenticate shareholders’ identities, to allow shareholders to authorize the voting of their shares in accordance with their instructions, and to confirm that their instructions have been properly recorded. Proxies voted by telephone or through the internet may be revoked at any time before they are voted. A shareholder may revoke a proxy voted by telephone or through the internet at any time prior to its exercise by (a) attending the Special Meeting to vote his/her shares in person (thereby revoking any prior Proxy) or (b) executing a superseding Proxy in the same manner as his/her original Proxy.
In all cases where a telephonic proxy is solicited, the Georgeson representative is required to ask for each shareholder’s full name and address and to confirm that the shareholder has received the proxy materials in the mail. If the shareholder is a corporation or other entity, the Georgeson representative is required to ask for the person’s title and confirmation that the person is authorized to direct the voting of the shares. If the information solicited agrees with the information provided to Georgeson, then the Georgeson representative has the responsibility to explain the process, read the Proposals listed on the proxy card and ask for the shareholder’s instructions on each Proposal. Although the Georgeson representative is permitted to answer questions about the process, he or she is not permitted to recommend to the shareholder how to vote, other than to read any recommendation set forth in this Proxy Statement. Georgeson 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 Georgeson immediately if his or her instructions are not correctly reflected in the confirmation.
1 | The Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s, a division of McGraw-Hill, Inc. (“S&P”). S&P makes no representation or warranty, express or implied, to the owners of the Fund or any member of the public regarding the advisability of investing in securities generally or in the Fund particularly or the ability of the S&P 500 Index to track general stock market performance. |
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at the Special Meeting, i.e., for purposes of the Proposals, one-third of the outstanding shares of the Fund. For purposes of determining the presence of a quorum for transacting business at the Special Meeting, abstentions and broker “non-votes” (that is, Proxies from brokers or nominees indicating that these persons have not received instructions from the beneficial owner or other persons entitled to vote shares on a particular matter with respect to which the brokers or nominees do not have discretionary power) will be treated as shares that are present but which have not been voted. (See “Vote Required” for a further discussion of abstentions and broker non-votes.)
Shareholders of record at the close of business on January 22, 2003 (the “Record Date”) are entitled to notice of, and to vote at, the Special Meeting. The number of shares of each class of the Fund that were issued and outstanding as of the Record Date are set forth in Exhibit A to this Proxy Statement.
In order that your shares may be represented, you are requested to (unless you are voting by telephone or through the internet):
• | indicate your instructions on the Proxy; |
• | date and sign the Proxy; and |
• | mail the Proxy promptly in the enclosed envelope. |
Instructions for voting by telephone or through the internet are included on the Proxy enclosed with this Proxy Statement.
Beneficial Ownership of Shares of the Fund
Exhibit B to this Proxy Statement sets forth information as of the Record Date regarding the beneficial ownership of the Fund’s shares by the only persons known by the Fund to beneficially own more than 5% of the outstanding shares of the Fund. Collectively, the Trustees and executive officers of the Trust own less than 1% of the Fund’s outstanding shares. The number of shares beneficially owned is determined under rules of the Commission, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under these rules, beneficial ownership includes any shares as to which the individual has the sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days of the Record Date through the exercise of any stock option or other right. Unless otherwise indicated, each person has sole investment and voting power (or shares this power with his or her spouse) with respect to the shares set forth in Exhibit B. The inclusion therein of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of the shares.
Background
Trust and Fund Structure. The Trust is an open-end management investment company, organized under the laws of the Commonwealth of Massachusetts. DeIM, located at 345 Park Avenue, New York, New York 10154, acts as the investment advisor to the Fund pursuant to the terms of an investment advisory agreement with the Trust (the “Current Advisory Agreement”). Pursuant to the Current Advisory Agreement, DeIM currently manages the Fund’s investments, administers its business affairs, furnishes office facilities and equipment, provides clerical, bookkeeping and
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administrative services and permits any of its officers and employees to serve without compensation as trustees or officers of the Trust if elected to such positions. DeIM pays the ordinary office expenses of the Fund and the compensation and expenses of all Trustees, officers and executive employees of the Trust who are affiliated with DeIM. If the New Advisory Agreement and New Sub-Advisory Agreement are approved, DeIM will also supervise the provision of sub-advisory services to the Fund by NTI.
Information About the Transaction. On September 27, 2002, Deutsche Bank AG (“Deutsche Bank”) and NTI entered into an agreement whereby Deutsche Bank will sell its global passive equity, enhanced equity and passive fixed income businesses to NTI. Deutsche Bank determined to sell its passive investment business in order to concentrate on active investment management. The sale to NTI encompasses all of Scudder Investment’s passive investment business in the Americas, Europe and the Far East. The sale was completed on January 31, 2003 (the “Closing Date”).
This sale and certain other matters pertaining thereto was completed pursuant to the terms of the Amended and Restated Sale and Purchase Agreement, dated as of the Closing Date, among Deutsche Bank, The Northern Trust Company (solely for purposes of its guarantee of payment and performance of NTI’s obligations under the Amended and Restated Sale and Purchase Agreement and certain other ancillary agreements) and NTI (the “Sale and Purchase Agreement”), a Transition Services and Set-up Agreement, dated as of the Closing Date, between Deutsche Bank, on behalf of itself and certain of its affiliates (the “DB Group”) and NTI (the “Transition Services Agreement”), and a Preferred Provider Agreement, dated as of the Closing Date, between Deutsche Bank, on behalf of itself and the DB Group and NTI (the “Preferred Provider Agreement”).
The Transition Services Agreement. Pursuant to the terms of the Transition Services Agreement, Deutsche Bank and NTI have agreed, among other things, that, for that period of time beginning on the Closing Date and ending as of the execution of the New Sub-Advisory Agreement, the investment advisory personnel who currently provide services to the Fund under the Current Advisory Agreement, and who became employees of NTI on the Closing Date, will be made available to DeIM in order to assist DeIM in fulfilling its management obligations to the Fund under the Current Advisory Agreement. Upon the execution of the New Sub-Advisory Agreement, the terms of the Transition Services Agreement relating to these employees will terminate and these individuals will remain employees of NTI and are anticipated to continue to provide services to the Fund under the New Sub-Advisory Agreement.
Preferred Provider Agreement. Subject to any required approvals of a board of directors or trustees or shareholders, or other applicable legal or fiduciary obligations of any member of the DB Group, and subject to certain exceptions, for a period of five years from the Closing Date NTI will be the preferred provider for Deutsche Bank and the DB Group over other third party providers for the provision of services similar to, but not limited to, those proposed to be provided to the Fund under the New Advisory Agreement and the New Sub-Advisory Agreement for those registered investment companies advised or sub-advised by DeIM or other management companies part of the DB Group. The Preferred Provider Agreement provides that, to the extent consistent with its fiduciary duties and applicable law, the Deutsche Bank entity serving as advisor to a registered investment company will recommend to the board of directors or trustees of such registered investment company that NTI serve as sub-advisor with respect to any global passive equity, enhanced equity and passive fixed income investment management and investment advisory products and services, and similar services provided to such registered investment company.
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Sale and Purchase Agreement—Non-compete Provision. The Sale and Purchase Agreement provides in part that, for five years after the Closing Date, Deutsche Bank will not, and will not permit any person or entity that it controls, including DeIM, to, directly or indirectly, provide certain investment management services, including the passive index management services provided to the Fund under the Current Advisory Agreement and proposed to be provided by NTI under the New Sub-Advisory Agreement, absent certain exceptions, or solicit the members of the passive index management team who currently provide services to the Fund under the Current Advisory Agreement, and who are now employees of NTI (the “Non-compete Provision”). However, the Sale and Purchase Agreement further provides, in part, that, notwithstanding the Non-compete Provision, DeIM may continue to serve as investment advisor for certain funds (including the Fund) for which NTI serves as sub-advisor pursuant to a sub-advisory agreement (including the New Sub-Advisory Agreement). Thus, if shareholders approve Proposal II, DeIM will continue to serve as investment advisor to the Fund and will supervise the provision of sub-advisory services to the Fund by NTI. The Non-compete Provision does not and would not prevent the Fund from terminating the New Sub-Advisory Agreement with NTI (or terminating a sub-advisory agreement with any future sub-advisor), under which circumstances DeIM would continue as advisor to the Fund and recommend to the Fund’s Board of Trustees that the Board consider approval of a sub-advisory agreement with another prospective sub-advisor, so long as the Fund can retain another sub-advisor which, in the judgment of DeIM and the Board of Trustees, is capable of providing to the Fund the necessary advisory services to be provided to the Fund pursuant to the New Sub-Advisory Agreement.
For information about Northern Trust Corporation (“Northern Trust”), the parent company of NTI, and NTI, see “The Proposed Sub-Advisor” under Proposal II.
Other Information. On April 5, 2002, Deutsche Bank acquired 100% of US-based asset manager Zurich Scudder Investments (“Scudder”). Scudder became part of Deutsche Asset Management and changed its name to Deutsche Investment Management Americas Inc. (“DeIM”). The Current Advisory Agreement took effect on April 5, 2002, in conjunction with the consummation of this transaction. The combined organization is, as of December 31, 2001, the fourth largest asset manager in the world, with approximately $742 billion in assets under management as of September 30, 2002. Effective August 19, 2002, the Deutsche Asset Management funds were combined with the Scudder family of funds under the Scudder Investments brand. The Deutsche Asset Management family of funds and the Scudder funds have been integrated into a single fund complex, the Scudder Investments family of funds, with the investment operations of Scudder becoming part of an integrated global investment operation serving Deutsche Asset Management’s clients worldwide.
Section 15(f) of the 1940 Act
Section 15(f) of the 1940 Act provides that an investment advisor of a registered investment company or any of its affiliated persons may receive any amount or benefit in connection with a sale of securities of, or a sale of any other interest in, such investment advisor, which results in the assignment of an investment advisory contract with the investment company, as long as two conditions are satisfied.
First, during the three (3) year period immediately following the transaction, at least 75% of the members of the Board of such investment company must not be “interested persons” of the current or successor advisor within the meaning of the 1940 Act. At least 75% of the current members of the Board of Trustees of the Trust are not “interested persons” of DeIM or NTI.
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Second, 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 Section 15(f)(1)(B) of the 1940 Act, the term “unfair burden” includes any arrangement during the two (2) year period after the change in control whereby the investment advisor (or predecessor or successor advisor), or any “interested person” (as defined in the 1940 Act) of such advisor, receives or is entitled to receive any compensation, directly or indirectly, from the investment company or its security 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 fees for bona fide principal underwriting services).
As described above, Deutsche Bank has sold its passive investment management businesses to NTI. While DeIM did not assign its Current Advisory Agreement with the Fund to NTI in connection with this sale, it is proposing to delegate extensive responsibilities with respect thereto to NTI as provided for in the New Sub-Advisory Agreement. Accordingly, the Sale and Purchase Agreement provides that Deutsche Bank will use its reasonable best efforts to ensure the satisfaction of the conditions set forth in Section 15(f) of the 1940 Act, including the requirement that no ‘unfair burden’ (as defined in Section 15(f)(1)(B) of the 1940 Act) be imposed on the Fund. Further, pursuant to the Sale and Purchase Agreement, NTI has agreed (a) for a period of three years after the Closing Date, not to recommend or advise the Board of Trustees to change its composition such that less than 75% of the Board of Trustees are not ‘interested persons’ of DeIM or NTI and (b) for a period of two years after the Closing Date, not to itself impose upon the Fund an ‘unfair burden’ as a result of the transactions contemplated by the agreement between Deutsche Bank and NTI, or any terms, conditions or understandings applicable thereto, whether express or implied. However, nothing in the Sale and Purchase Agreement requires NTI to accept or receive less than the sub-advisory fee to be paid to NTI by DeIM pursuant to the New Sub-Advisory Agreement, or to waive or reimburse any such fees.
Proposal I
Approval of the New Advisory Agreement
The New Advisory Agreement contains identical provisions as, and does not differ from, the Current Advisory Agreement pursuant to which services are provided to the Fund except for the dates of execution, effectiveness and initial term, and except that the New Advisory Agreement would contain a specific provision authorizing DeIM, subject to approval by shareholders of the Fund of a sub-advisory agreement with the proposed sub-advisor, to delegate some or all of its duties under the New Advisory Agreement to non-affiliated sub-advisors, such as NTI. See “The New Advisory Agreement.” Approval of this Proposal would facilitate the appointment of NTI as a sub-advisor to the Fund.
The Advisory Agreement
The Current Advisory Agreement. DeIM currently serves as investment advisor to the Fund (as discussed earlier) pursuant to the Current Advisory Agreement. The Current Advisory Agreement was initially approved by the Board of Trustees, including a majority of those members of the Board of Trustees who are not “interested persons” (as defined in the 1940 Act) of the Trust, the Fund or DeIM (the “Independent Trustees”), on February 4, 2002 and was approved by the shareholders of the Fund on March 28, 2002.
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If the New Advisory Agreement and New Sub-Advisory Agreement are approved, DeIM will continue to serve as investment advisor to the Trust, on behalf of the Fund, pursuant to the New Advisory Agreement. However, it will delegate many of its duties under the New Advisory Agreement to NTI and will supervise the provision of sub-advisory services to the Fund by NTI.
Exhibit C to this Proxy Statement lists: (i) the date of the Current Advisory Agreement; and (ii) the most recent date on which the Current Advisory Agreement was approved by the Board of Trustees, including a majority of the Independent Trustees, and the Fund’s shareholders.
The New Advisory Agreement. If approved, the New Advisory Agreement will remain in effect for an initial term ending September 30, 2003 (unless sooner terminated), and will remain in effect from year to year thereafter if approved annually by (1) the Board of Trustees or the vote of a “majority of the outstanding voting securities” (as defined in the 1940 Act; see “Vote Required” below) of the Fund and (2) the vote of a majority of the Independent Trustees, cast in person at a meeting called for such purpose.
The form of the New Advisory Agreement is attached to this Proxy Statement as Exhibit D. The discussion of the New Advisory Agreement in this Proxy Statement is qualified in its entirety by reference to Exhibit D.The New Advisory Agreement contains identical provisions as, and does not differ from, the Current Advisory Agreement except for the dates of execution, effectiveness and initial term and except that the New Advisory Agreement contains a specific provision authorizing DeIM, subject to approval by shareholders of the Fund of a sub-advisory agreement with the proposed sub-advisor, to delegate some or all of its duties under the New Advisory Agreement to a non-affiliated sub-advisor.In the event of a delegation, DeIM will continue to supervise the services provided by NTI (or any future sub-advisor(s)) and the delegation will not relieve DeIM of any of its obligations under the New Advisory Agreement (including, without limitation, the management of the Fund’s assets in accordance with the New Advisory Agreement).
The investment advisory fee rate proposed to be charged to the Fund under the New Advisory Agreement is the same as the investment advisory fee rate charged under the Current Advisory Agreement.
The advisory fee rate paid to DeIM under the Current Advisory Agreement and the advisory fee paid by the Fund for the most recent fiscal year is set forth in Exhibit E to this Proxy Statement.
For a description of DeIM and a discussion of the deliberations of the Board of Trustees in determining to approve the New Advisory Agreement, see Proposal II.
Proposal II
Approval of the Sub-Advisory Agreement
The New Sub-Advisory Agreement
It is being proposed that NTI serve as sub-advisor for the Fund pursuant to the terms of the New Sub-Advisory Agreement. The form of the New Sub-Advisory Agreement is attached to this Proxy Statement as Exhibit F. A description of the New Sub-Advisory Agreement is set forth below and is qualified in its entirety by reference to Exhibit F.
8
Under the terms of the proposed New Sub-Advisory Agreement, NTI agrees, subject to the supervision and control of DeIM and the Board of Trustees, to provide the Fund with investment advice and investment management services concerning the investments of the Fund. NTI will, among other things, (a) determine what securities will be purchased, held, sold or reinvested by the Fund and what portion of the Fund’s assets shall be held uninvested in cash and cash equivalents; (b) make its officers and employees available to meet with the officers of DeIM and the Trust’s officers and Trustees on due notice to review the investments and investment program of the Fund in the light of current and prospective economic and market conditions; (c) from time to time as the Board of Trustees or DeIM may reasonably request, furnish to DeIM and the Trust’s officers and Trustees reports on portfolio transactions and reports on issuers of securities held by the Fund; (d) provide advice and assistance to DeIM as to the determination of the value of securities held or to be acquired by the Fund for valuation purposes; (e) maintain all accounts, books and records of the Fund required of an investment advisor of a registered investment company pursuant to the 1940 Act and the rules and regulations thereunder, and preserve such records for the periods and in the manner prescribed under the 1940 Act and the rules and regulations thereunder; (f) maintain and enforce adequate security procedures with respect to all materials, records, documents and data relating to any of its responsibilities pursuant to the New Sub-Advisory Agreement, including all means for the effecting of securities transactions; (g) permit DeIM, the Trust’s officers and the Trust’s independent public accountants to inspect and audit such records pertaining to the Fund at reasonable times during normal business hours upon due notice; and (h) vote, pursuant to procedures described to the Board of Trustees, all proxies solicited by or with respect to issuers of securities in which the assets of the Fund may be invested from time to time.
The investment advisory fee rate charged to the Fund under the Current Advisory Agreement and the proposed New Advisory Agreement is not proposed to be changed. If the New Sub-Advisory Agreement is approved, NTI will be paid a fee for its services under the New Sub-Advisory Agreement by DeIM from DeIM’s fee as investment advisor to the Fund.
Generally. If approved, the New Sub-Advisory Agreement will remain in effect for an initial term ending September 30, 2003 (unless sooner terminated), and will remain in effect from year to year thereafter if approved annually by (1) the Board of Trustees or the vote of a “majority of the outstanding voting securities” (as defined in the 1940 Act; see “Vote Required” below) of the Fund and (2) the vote of a majority of the Independent Trustees who are not parties to such agreement, cast in person at a meeting called for such purpose. The New Sub-Advisory Agreement will terminate upon assignment by any party and is terminable, without penalty, on 60 days’ written notice by DeIM or the Board of Trustees or by a vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund or upon 120 days’ written notice by NTI to DeIM and the Fund.
NTI is obligated to pay expenses associated with providing the services contemplated by the New Sub-Advisory Agreement. The Trust bears certain other expenses including the fees of the Board of Trustees. The Trust also pays any extraordinary expenses incurred. Pursuant to the New Sub-Advisory Agreement, NTI’s fee will be payable solely by DeIM, from its fee as investment advisor to the Fund. The Fund will have no responsibility for the sub-advisory fees payable to NTI. The services of NTI are not deemed to be exclusive and nothing in the New Sub-Advisory Agreement prevents it 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 Fund) or from engaging in other activities.
9
Under the New Sub-Advisory Agreement, NTI will not be liable for any loss sustained by reason of the adoption of any investment policy or the purchase, sale or retention of any security on the recommendation of NTI, if such recommendation is made in good faith; provided that nothing therein shall be construed to protect NTI against any liability to DeIM, the Fund or to its shareholders to which NTI 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 NTI’s reckless disregard of its obligations and duties under the New Sub-Advisory Agreement. However, DeIM will continue to supervise the services provided by NTI (or any future sub-advisor(s)) and the delegation will not relieve DeIM of any of its obligations under the New Advisory Agreement (including, without limitation, the management of the Fund’s assets in accordance with the New Advisory Agreement).
Subject to the provisions of the New Sub-Advisory Agreement and absent instructions from DeIM or the Trust, as investment sub-advisor NTI will have full discretionary authority to place orders for the purchase and sale of securities for the account of the Fund with such brokers and dealers as it may select. In the selection of brokers or dealers and the placing of orders, NTI will seek for the Fund at all times the most favorable best execution and net price available. In assessing the best execution and net price available for any transaction, NTI will consider all factors it deems relevant including, without limitation, the breadth of the market in and the price of the security, the financial condition and execution capability of the broker or dealer, the quality of research provided and the reasonableness of the commission, if any, with respect to the specific transaction and on a continuing basis.
Pursuant to the New Sub-Advisory Agreement, NTI will have access to supplemental investment and market research and security and economic analyses provided by certain brokers who may execute brokerage transactions at higher commissions to the Fund than another broker may have charged, and NTI will be authorized to place orders for the purchase and sale of securities for the Fund with such brokers upon a good faith determination that the commission paid is reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, subject to applicable laws and regulations and review and direction by DeIM and the Board of Trustees from time to time with respect to the extent and continuation of this practice. NTI will provide such information as DeIM or the Board of Trustees from time to time requests concerning the commissions paid by the Fund and research and other services provided to NTI by brokers executing transactions on behalf of the Fund. Further, under the terms of the New Sub-Advisory Agreement, DeIM will have the right by written notice to identify securities that may not be purchased on behalf of the Fund and/or brokers and dealers through or with which portfolio transactions on behalf of the Fund may not be effected, including, without limitation, brokers or dealers affiliated with DeIM. NTI will refrain from purchasing such securities for the Fund or directing any portfolio transaction to any such broker or dealer on behalf of the Fund, unless and until the written approval of DeIM or the Board of Trustees, as the case may be, is obtained. In addition, NTI will not direct portfolio transactions for the Fund with or through NTI or any broker or dealer that is an ‘affiliated person’ of NTI (as defined in the 1940 Act or interpreted under applicable rules and regulations of the Commission) without the prior written approval of the Board of Trustees and DeIM and then only as permitted under the 1940 Act.
There were no affiliated brokerage transactions for the Fund during the Fund’s last fiscal year.
10
Management of the Fund
The Advisor. Under the supervision of the Board of Trustees, DeIM, with headquarters at 345 Park Avenue, New York, New York 10154, acts as the investment advisor to the Fund. As investment advisor, DeIM currently makes the Fund’s investment decisions. It buys and sells securities for the Fund and conducts the research that leads to these purchase and sale decisions. DeIM is also currently responsible for selecting brokers and dealers and for negotiating brokerage commissions and dealer charges. DeIM is registered with the Commission as an investment advisor and provides a full range of investment advisory services to institutional and retail clients. If the New Advisory Agreement and the New Sub-Advisory Agreement are approved, DeIM will supervise the provision of sub-advisory services to the Fund by NTI.
In addition to providing investment advisory services to the Fund, DeIM serves as investment advisor to other investment companies and investment sub-advisor to other investment companies. As of September 30, 2002, DeIM had approximately $ billion of assets under management. DeIM is an indirect wholly-owned subsidiary of Deutsche Bank.
See Exhibit G to this Proxy Statement for a list of those investment companies that DeIM advises or subadvises that have investment objectives similar to those of the Fund, together with information regarding the fees charged to those companies.
The principal occupations and business address of each director and principal executive officer of DeIM are set forth in Exhibit H to this Proxy Statement. The principal business address of each director and principal executive officer as it relates to his or her duties at DeIM is 345 Park Avenue, New York, NY 10154. Each officer and trustee of the Trust who is an officer, employee, director or shareholder of DeIM is also listed in Exhibit H.
The Proposed Sub-Advisor. NTI is a subsidiary of The Northern Trust Company. NTI is located at 50 South LaSalle Street, Chicago, IL 60675. NTI has managed accounts, including registered investment companies, designed to mirror the performance of the same index as that the Fund seeks to replicate.
NTI is an Illinois state chartered trust company and an investment advisor registered under the Investment Advisers Act of 1940, as amended. Formed in 1988, it primarily manages assets for defined contribution and benefit plans, investment companies and other institutional investors. As of September 30, 2002, NTI had approximately $126.4 billion of assets under management.
The Northern Trust Company is an Illinois state chartered banking organization and a member of the Federal Reserve System. Formed in 1889, it administers and manages assets for individuals, personal trusts, defined contribution and benefit plans and other institutional and corporate clients. It is the principal subsidiary of Northern Trust, a bank holding company.
Northern Trust, through its subsidiaries, has for more than 100 years managed the assets of individuals, charitable organizations, foundations and large corporate investors, and as of September 30, 2002, administered in various capacities approximately $1.44 trillion of assets, including approximately $293.2 billion of assets under discretionary management. As of such date, Northern Trust and its subsidiaries had approximately $39.7 billion in assets and $24.4 billion in deposits.
11
See Exhibit I to this Proxy Statement for a list of those investment companies that NTI advises or subadvises that have investment objectives similar to those of the Fund, together with information regarding the fees charged to those companies.
The principal occupations of each director and principal executive officer of NTI are set forth in Exhibit J to this Proxy Statement. The principal business address of each director and principal executive officer as it relates to his or her duties at NTI is 50 South LaSalle Street, Chicago, IL 60675. As of November 20, 2002, the date the Board of Trustees voted to approve the New Advisory Agreement and New Sub-Advisory Agreement, two trustees of the Trust who are otherwise Independent Trustees owned, beneficially or of record, securities of The Northern Trust Company. As of October 31, 2002, John W. Ballantine beneficially owned (shares were owned by his spouse) 2,944 shares of common stock of The Northern Trust Company. Mr. Ballantine’s spouse has subsequently sold all of these shares. As of November 20, 2002, John G. Weithers owned of record 200 shares of common stock of The Northern Trust Company. Mr. Weithers has subsequently sold all of these shares.
Administrator, Transfer Agent, Custodian and Distributor. DeIM serves as administrator to the Fund pursuant to an administrative services agreement, pursuant to which DeIM provides or pays others to provide substantially all of the administrative services provided to the Fund (other than those provided by DeIM under its investment advisory agreement with the Fund). State Street Bank & Trust Company (“State Street”) serves as custodian for the Fund. State Street is also the transfer agent, dividend-paying agent and shareholder services agent of the Fund. Pursuant to an agreement with State Street, Scudder Investments Service Company (“SISC”), an affiliate of DeIM, serves as dividend-paying agent and shareholder services agent for the Fund and previously served as transfer agent for the Fund. Scudder Distributors, Inc. (“SDI”), an affiliate of DeIM, serves as the distributor of the Fund’s shares pursuant to a distribution agreement. SDI’s address is 222 South Riverside Plaza, Chicago, Illinois 60606. It is expected that these services will continue to be provided by the same service providers after approval of the New Advisory Agreement and the New Sub-Advisory Agreement. Exhibit E sets forth the fees paid (a) to DeIM for administrative services provided to the Fund during its most recent fiscal year, (b) to SISC for its services during the most recent fiscal year and (c) to SDI for its services for the most recent fiscal year.
Deutsche Bank. Deutsche Bank, Aktiengesellschaft, Taunusalage 12, D-60262, Frankfurt am Main, Federal Republic of Germany, is an international commercial and investment banking group and a leading integrated provider of financial services to institutions and individuals throughout the world. It is organized in Germany and is a publicly traded entity. Its shares trade on many exchanges including the New York Stock Exchange and Xetra (German Stock Exchange). Deutsche Bank is a major global banking institution that is engaged in a wide range of financial services, including investment management, mutual funds, retail, private and commercial banking, investment banking and insurance.
Recommendation of the Board
On September 27, 2002, Deutsche Bank announced that it had entered into an agreement with Northern Trust for the sale of Deutsche Bank's global passive equity, enhanced equity and passive fixed income businesses. As a result of this transaction, DeIM would engage NTI as sub-advisor to manage the Fund, subject to Board and shareholder approval. At a meeting of the Board of Trustees of the Trust held on
12
November 20, 2002 called for the purpose of, among other things, voting on approval of the New Advisory Agreement and the New Sub-Advisory Agreement, the Board, including the Independent Trustees, unanimously approved the New Advisory Agreement and the New Sub-Advisory Agreement. In reaching this conclusion, the Board of Trustees obtained from DeIM, Northern Trust and NTI such information as they deemed reasonably necessary to continue DeIM as investment advisor to the Fund and to approve NTI as investment sub-advisor to the Fund.
In connection with its review, the Board obtained information regarding: the management, financial position and business of Northern Trust and NTI, the history of NTI's operations and experience as an investment adviser to registered investment companies; and the investment performance of the investment companies advised by NTI. Representatives of DeIM and NTI made detailed presentations at the meeting with respect to, among other factors, the organizational structure, operations, assets under management, asset management services, financial conditions, research capabilities, portfolio management approach and investment results of DeIM and NTI, respectively.
In determining whether to approve the New Advisory Agreement and the New Sub-Advisory Agreement and submit them to shareholders for approval, the Board considered various factors and reviewed the various materials furnished by DeIM and NTI, including (i) the prior investment performance of accounts and registered investment companies managed by NTI relative to broad-based indices and to comparably managed accounts and funds, (ii) the investment approach of NTI, (iii) the quality, scope and nature of the services provided by NTI and DeIM, and (iv) the knowledge and experience of the investment professionals who would be responsible for day-to-day management of the Fund. The Board particularly considered that approval of the New Sub-Advisory Agreement would permit most of the same personnel of the Fund's current investment management team to continue to manage the Fund as these personnel will be employed by NTI after completion of the transaction. The Board also considered that the investment objectives and policies of the Fund would not change and that the Fund would be managed using substantially the same investment process as is currently used.
The Board also considered a number of other factors, including, among other things, that approval of the New Advisory Agreement and New Sub-Advisory Agreement will not result in an increase in the advisory fee rate or other fees paid by the Fund; that the Advisor is responsible for any payment of fees to the sub-advisor; and that DeIM and NTI are committed to the continuance of services to the Fund of at least the type and quality currently provided by DeIM and its affiliates. The Board also considered that, pursuant to the New Advisory Agreement, DeIM would supervise the sub-advisory duties of NTI.
With respect to the New Advisory Agreement, the Board considered that the terms of the New Advisory Agreement would be identical to the terms of the Current Advisory Agreement (except for the dates of execution, effectiveness and initial term), except that the New Advisory Agreement would contain a specific provision authorizing DeIM to delegate some or all of its advisory duties to an unaffiliated sub-advisor, subject to shareholder approval.
The Board noted that, in previously approving the continuation of the Current Advisory Agreement at its annual contract review meeting in September 2002, the Board had considered numerous factors, including the nature and quality of services
13
provided by DeIM; investment performance of both the Fund and relative to appropriate peer groups and one or a combination of market indices; investment management fees; expense ratios and asset sizes of the Fund and relative peer groups; DeIM's profitability from managing the Fund; fall-out benefits to DeIM from its relationship to the Fund, including revenues derived from services provided to the Fund by affiliates of DeIM; and the potential benefits to DeIM, the Fund and its shareholders of receiving research services from broker-dealer firms in connection with the allocation of portfolio transactions to such firms.
As a result of their review and consideration of the New Advisory Agreement and the New Sub-Advisory Agreement, at its meeting on November 20, 2002, the Board of Trustees of the Trust, including the Independent Trustees, voted unanimously to approve the New Advisory Agreement and the New Sub-Advisory Agreement and to recommend them to shareholders for their approval.
Therefore, after careful consideration, the Board of Trustees, including the Independent Trustees, recommend that the shareholders of the Fund vote “FOR” the approval of the New Advisory Agreement as set forth in Proposal I and the New Sub-Advisory Agreement as set forth in this Proposal.
If the New Advisory Agreement is approved by the shareholders, it will remain in effect as described above. If the New Advisory Agreement is not approved by the shareholders, the Board of Trustees will consider what other action, if any, is appropriate based upon the interests of the Fund.
If the New Sub-Advisory Agreement is approved by the shareholders, the agreement will remain in effect as described above. If the New Sub-Advisory Agreement is not approved by the shareholders, the Board of Trustees will consider what other action, if any, is appropriate based upon the interests of the Fund, including consideration of an alternative sub-advisor.
14
If the New Sub-Advisory Agreement is approved by the shareholders, the agreement will remain in effect as described above. If the New Sub-Advisory Agreement is not approved by the shareholders, the Board of Trustees will consider what other action, if any, is appropriate based upon the interests of the Fund, including consideration of an alternative sub-advisor.
VOTE REQUIRED
Approval of Proposal I with respect to the New Advisory Agreement and Proposal II with respect to the New Sub-Advisory Agreement each requires the affirmative vote of a “majority” of the outstanding shares of those series of the Trust entitled to vote on these matters, i.e., in this instance, the Fund. “Majority” (as defined in the 1940 Act) means (as of the Record Date) the lesser of (a) 67% or more of the shares of the Fund present at the Special Meeting, if the holders of more than 50% of the outstanding shares of the Fund are present in person or by proxy, or (b) more than 50% of the outstanding shares of the Fund. Because abstentions and broker non-votes are treated as shares present but not voting, any abstentions and broker non-votes will have the effect of votes against Proposals I and II.
THE BOARD OF TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” APPROVAL OF PROPOSALS I AND II. ANY UNMARKED PROXIES WILL BE SO VOTED. |
The Board is not aware of any other matters that will come before the Special Meeting. Should any other matter properly come before the Special Meeting, it is the intention of the persons named in the accompanying Proxy to vote the Proxy in accordance with their judgment on such matters.
SUBMISSION OF SHAREHOLDER PROPOSALS
The Fund does not hold regular shareholders’ meetings. Shareholders wishing to submit proposals for inclusion in a proxy statement for a subsequent shareholders’ meeting should send their written proposals to the Secretary of the Trust at the address set forth on the cover of this Proxy Statement.
Proposals must be received at a reasonable time prior to the date of a meeting of shareholders to be considered for inclusion in the materials for the Fund’s meeting. Timely submission of a proposal does not, however, necessarily mean that such proposal will be included.
SHAREHOLDERS’ REQUEST FOR SPECIAL MEETING
Shareholders holding at least 10% of the Fund’s outstanding voting securities (as defined in the 1940 Act) may require the calling of a meeting of shareholders for the purpose of voting on the removal of any trustee of the Trust. Meetings of shareholders for any other purpose also shall be called by the Board of Trustees when requested in writing by shareholders holding at least 10% of the shares then outstanding.
15
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT OR THE PROCEDURES TO BE FOLLOWED TO EXECUTE AND DELIVER A PROXY, PLEASE CONTACT GEORGESON SHAREHOLDER COMMUNICATIONS, INC. AT 1-866-767-2075.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING AND WHO WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, OR FOLLOW THE INSTRUCTIONS FOR VOTING BY TELEPHONE OR THROUGH THE INTERNET ON THE ENCLOSED PROXY. |
By Order of the Board of Trustees,
John Millette,Secretary
February , 2003
THE BOARD OF TRUSTEES HOPES THAT SHAREHOLDERS WILL ATTEND THE SPECIAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE (OR FOLLOW THE INSTRUCTIONS FOR VOTING BY TELEPHONE OR THROUGH THE INTERNET ON THE ENCLOSED PROXY). |
16
EXHIBIT A
SHARES OUTSTANDING AS OF RECORD DATE
Fund | Number of Shares Outstanding | |
Scudder S&P 500 Stock Fund | ||
Class A | ||
Class B | ||
Class C |
A-1
EXHIBIT B
5% SHAREHOLDERS
Scudder S&P 500 Stock Fund—Class A:
Name and Address of Beneficial Owner | Shares Beneficially Owned | Percent Ownership of Outstanding Shares | |||
Scudder Trust Co. FBO IBEW Local Union #252 Contribution/401(k) Plan #062962 Attn: Asset Recon P.O. Box 1757 Salem, NH 03079-1143 | 705,575.772 | 7.49 | % | ||
Scudder S&P 500 Stock Fund—Class B:
Name and Address of Beneficial Owner | Shares Beneficially Owned | Percent Ownership of Outstanding Shares | |||
SSC Investment Corp. Attn: Bob Dicarlo 345 Park Avenue New York, NY 10154-0004 | 175,876.101 | 7.41 | % |
Scudder S&P 500 Stock Fund—Class C:
Name and Address of Beneficial Owner | Shares Beneficially Owned | Percent Ownership of Outstanding Shares | |||
SSC Investment Corp. Attn: Bob Dicarlo 345 Park Avenue New York, NY 10154-0004 | 175,876.100 | 10.88 | % |
B-1
EXHIBIT C
Fund (Fiscal Year) | Date of Current Advisory Agreement | Date Last Approved by | ||||
Trustees | Shareholders* | |||||
Scudder S&P 500 Stock Fund (8/31) | 4/05/02 | 9/26/02 | 3/28/02 |
* | The Current Advisory Agreement was last approved by the shareholders as a result of the sale of Scudder to Deutsche Bank, in order to permit Scudder to continue to serve as investment advisor to the Fund. |
C-1
[SEAL] | SCUDDER INVESTORS TRUST | |||||||
Attest: | By: | |||||||
Name: | Name: | |||||||
Title: | ||||||||
[SEAL] | DEUTSCHE INVESTMENT MANAGEMENT AMERICAS, INC. | |||||||
Attest: | By: | |||||||
Name: | Name: | |||||||
Title: |
1. Fund | 2. Investment Advisory Fee | |
Scudder S&P 500 Stock Fund | [ ]% |
Average Daily Net Asset Level | Annual Fee Rate | |
$0 to $ million | % | |
above $ million to $ million | % | |
above $ million to $ million | % | |
above $ million | % |
[INVESTMENT ADVISER] | ||||||||
By: | ||||||||
Its: |
[SUBADVISER] | ||||||||
By: | ||||||||
Its: |
Fund with similar investment objectives | Total Assets as of September 30, 2002 | Contractual Advisory Fees | ||||
$ | [ | ]% |
Name | Principal Occupation | |
Deborah Flickinger | Director | |
Thomas Hughes | Director | |
William N. Shiebler | Director and Chairman | |
Philipp Freiherr von Girsewald | Director | |
Thomas F. Eggers | President and Chief Executive Officer | |
Nicholas Bratt | Corporate Vice President | |
William G. Butterly, III | General Counsel, Chief Legal Officer and Secretary | |
Linda J. Wondrack | Chief Compliance Officer | |
Gwyn Thomas | Treasurer | |
Joseph Rice | Assistant Treasurer | |
John H. Kim | Assistant Secretary |
Funds With Similar Investment Objectives | Total Assets as ofSeptember 30, 2002 | Contractual Advisory Fees | ||||
Northern Small Cap Index Fund | $ | 232,564,558.87 | 0.60 | %(1) | ||
Northern Stock Index Fund | $ | 329,356,336.55 | 0.50 | %(2) | ||
Northern Institutional International Equity | $ | 67,469,124.99 | 0.35 | %(3) | ||
Index Portfolio | ||||||
Northern Institutional Small Company | $ | 160,297,980.74 | 0.30 | %(4) | ||
Index Portfolio | ||||||
Northern Institutional Equity Index | $ | 576,714,451.44 | 0.20 | %(5) | ||
Portfolio | ||||||
Northern Institutional U.S. Treasury Index | $ | 55,156,275.50 | 0.30 | %(6) | ||
Portfolio | ||||||
UMB Scout Equity Index Fund | $ | 36,857,938.00 | 0.08 | %(7) | ||
AB Funds Trust Equity Index Fund | $ | 286,164,921.93 | 0.04 | %(8) |
(1) | 0.50% after fee waivers. |
(2) | 0.40% after fee waivers. |
(3) | 0.25% after fee waivers. |
(4) | 0.20% after fee waivers. |
(5) | 0.10% after fee waivers. |
(6) | 0.15% after fee waivers. |
(7) | $40,000 annual minimum subadvisory fee. |
(8) | Subadvisory fees are subject to the following breakpoints: 0.04% on the first $100 million of assets, 0.02% on the next $250 million of assets, 0.01% on the next $400 million of assets and 0.005% on assets in excess of $750 million. NTI also receives a separate fee from the fund for monitoring and equitizing cash balances at the rate of 0.12% on the first $50 million, 0.06% on the next $250 million and 0.02% on the aggregated daily notional value of future contracts with the fund. |
Name and Position with Northern Trust Investments, Inc. | Principal Occupation | |
Stephen B. Timbers Chairman, president & Chief Executive Officer | President, Northern Trust Global Investments, and Executive Vice President, Northern Trust Corporation and The Northern Trust Company | |
Judy M. Bednar Director and Senior Vice President | Senior Vice President Northern Trust Investments, Inc. | |
Carl J. Domino Director & Senior Vice President | Senior Vice President Northern Trust Investments, Inc. | |
Orie Leslie Dudley, Jr. Director and Executive Vice President | Executive Vice President and Chief Investment Officer, Northern Trust Corporation and The Northern Trust Company | |
Perry R. Pero Director | Vice Chairman and Chief Financial Officer, Northern Trust Corporation and The Northern Trust Company | |
Stephen N. Potter Director & Senior Vice President | Senior Vice President The Northern Trust Company | |
Alan W. Robertson Director & Senior Vice President | Senior Vice President Northern Trust Investments, Inc. | |
Kevin J. Rochford Director & Senior Vice President | Senior Vice President Northern Trust Investments, Inc. | |
Peter L. Rossiter Director | President—Corporate and Institutional Services Northern Trust Corporation and The Northern Trust Company | |
Terence J. Toth Director & Senior Vice President | Executive Vice President The Northern Trust Company | |
Frederick H. Waddell Director | Executive Vice President The Northern Trust Company | |
Lloyd A. Wennlund Director and Senior Vice President | Senior Vice President Northern Trust Investments, Inc. |
FORM OF PROXY CARD
MUTUAL FUND SERVICES—LEGAL DEPARTMENT
[Code]
One South Street
Baltimore, Maryland 21202-3220
To vote by Telephone
1) | Read the Proxy Statement and have the Proxy card below at hand. |
2) | Call . |
3) | Enter the -digit control number set forth on the Proxy card and follow the simple instructions. |
To vote by Internet
1) | Read the Proxy Statement and have the Proxy card below at hand. |
2) | Go to Website www. .com. |
3) | Enter the -digit control number set forth on the Proxy card and follow the simple instructions. |
DO NOT RETURN YOUR PROXY CARD IF YOU VOTE BY PHONE OR INTERNET.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK AS FOLLOWS:
Scudder Investors Trust
Scudder S&P 500 Stock Fund
Two International Place
Boston, Massachusetts 02110-4103
PROXY FOR THE SPECIAL MEETING OF STOCKHOLDERS
[4:00] p.m., Eastern time,
on March 21, 2003
The undersigned hereby appoints Daniel O. Hirsch, Phillip J. Collora, John Millette and Caroline Pearson, and each of them, with full power of substitution, as proxies of the undersigned to vote all shares of stock that the undersigned is entitled in any capacity to vote at the above-stated special meeting, and at any and all adjournments or postponements thereof (the “Special Meeting”), on the matters set forth on this Proxy Card, and, in their discretion, upon all matters incident to the conduct of the Special Meeting and upon such other matters as may properly be brought before the Special Meeting. This proxy revokes all prior proxies given by the undersigned.
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 Proposal I and Proposal II. All ABSTAIN votes will be counted in determining the existence of a quorum at the Special Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES WITH RESPECT TO YOUR FUND. THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS I AND II.
UNLESS VOTING BY TELEPHONE OR INTERNET, PLEASE SIGN AND DATE BELOW AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
KEEP THIS PORTION FOR YOUR RECORDS.
DETACH AND RETURN
THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
SCUDDER S&P 500 STOCK FUND
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(Joint owners should EACH sign. Please sign EXACTLY as your name(s) appears on this card. When signing as attorney, trustee, executor, administrator, guardian or corporate officer, please give your FULL title below.)
Vote on Proposals I. Approval of a New Advisory Agreement with Deutsche Investment Management Americas Inc. | The appointed proxies will vote on any other business as may properly come before the Special Meeting. Receipt of the Notice and the Proxy Statement, dated February , 2003, is hereby acknowledged. | |||||||
FOR ¨ AGAINST ¨ ABSTAIN ¨ | ||||||||
II. Approval of a New Sub-Advisory Agreement between Deutsche Investment Management Americas Inc. and Northern Trust Investments. | ||||||||
FOR ¨ AGAINST ¨ ABSTAIN ¨ |
Signature (Please sign within box) | Date | Signature (Joint Owners) | Date |