SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) 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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Deutsche Investors Funds, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) filing Proxy Statement, if other than Registrant)
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statement number, or the Form or Schedule and the date of its filing.
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[LOGO] Deutsche Asset Management
A Member of the Deutsche Bank Group
July 2002
Dear Shareholder:
Your fund and certain other funds within the Deutsche Asset Management Fund
Complex ('DeAM Fund Complex') are holding shareholder meetings at which
shareholders will be asked to vote on certain proposals.
You will be asked to elect members of the Board governing your fund. This
proposal is part of an overall plan to coordinate and enhance the efficiency of
governance by the boards of the DeAM Fund Complex. Your Board also believes
that your fund will benefit from the greater diversity and the expertise of the
nominees that would be included on the expanded boards.
As you know, your investment advisor's parent, Deutsche Bank AG, has,
through acquisitions such as Zurich Scudder Investments, and through internal
reorganizations, sought to enhance its global research and investment
management capabilities. Consistent with these changes, you will also be asked
to approve a new advisory agreement. Under the new advisory agreement, your
advisor would be authorized to appoint certain affiliates as sub-advisors. This
would allow your fund's advisor to take advantage of the strengths of other
entities within the Deutsche Asset Management organization by permitting the
advisor to delegate certain portfolio management services to these entities.
Shareholders of certain funds will also be asked to approve a new sub-advisory
agreement.
The enclosed proxy statement details these proposals. For your convenience,
we've provided a question and answer section that offers 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:
. These proposals will have no effect on the number of shares you own or the
value of those shares.
. The advisory fees applicable to your fund will not change.
. The members of your fund's Board carefully reviewed each proposal prior to
recommending that you vote in favor of each proposal.
To vote, simply complete the enclosed proxy card(s)--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,
/s/ Daniel O. Hirsch
Daniel O. Hirsch
Assistant Secretary
The attached proxy statement contains more detailed information about each of
the proposals relating to your fund. Please read it carefully.
Deutsche Asset Management 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.
QUESTIONS AND ANSWERS
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 issues:
. to elect eleven members of the Board of Directors of Deutsche
Investors Funds, Inc. (the 'Company'), of which your fund is a
series, whose terms will be effective beginning August 16, 2002 or on
such later date as shareholder approval is obtained;
. for Global Biotechnology Fund and Growth Opportunity Fund, to approve
new investment advisory agreements between the Company, on behalf of
each Fund, and Deutsche Asset Management, Inc. ('DeAM, Inc.');
. for Top 50 US Fund and Japanese Equity Fund, to approve a new
investment advisory agreement between Deutsche Investors Portfolios
Trust and DeAM, Inc.;
. for Global Biotechnology Fund and Growth Opportunity Fund, to approve
new sub-advisory agreements among the Company, on behalf of each
Fund, DeAM, Inc. and DWS International Portfolio Management GmbH
('DWS') and Jennison Associates LLC ('Jennison'), respectively; and
. for Japanese Equity Fund, to approve a new sub-advisory agreement
between DeAM, Inc. and Deutsche Asset Management (Japan) Limited.
Each of Top 50 US Fund and Japanese Equity Fund operates as a feeder fund in
a master-feeder fund arrangement with a corresponding master portfolio. Each
master portfolio is a series of Deutsche Investors Portfolios Trust (the
'Trust'). Under the Investment Company Act of 1940, as amended, each fund's
voting rights with respect to the master portfolio interests that it holds must
be passed through to the fund's own shareholders.
THE BOARD MEMBERS OF THE COMPANY RECOMMEND THAT YOU VOTE FOR THESE PROPOSALS.
I. BOARD PROPOSAL TO ELECT NEW BOARD MEMBERS
Q: Why am I being asked to vote for Board members?
A: Fund management recommended to the Board, and the Board agreed, that the
Company, along with certain other funds that are managed, advised,
sub-advised or administered by DeAM, Inc. and certain other funds
managed, advised or administered by Investment Company Capital Corp.
('ICCC') (collectively, the 'DeAM Funds') should be governed by boards
comprised of the same group of individuals. To attain the goal of having
identical boards for all DeAM Funds, we need shareholder approval to add
certain persons to the Company's Board and the Trust's Board. The
Trust's Board agreed to submit this proposal to shareholders.
Q: Why did the Company's Board and the Trust's Board approve management's
recommendation?
A: Fund management recommended this proposal as part of an overall plan to
coordinate and enhance the efficiency of the governance of the DeAM
Funds. The Boards considered, among other factors, that a unified group
board structure should benefit the Company, the Trust and your fund by
creating an experienced group of Board members who understand the
operations of the Company and the DeAM Fund Complex and are exposed to
the wide variety of issues that arise from overseeing different types of
funds. Adopting a unified group board structure will also enable
management to use time more efficiently. There may also be cost savings
in avoiding duplication of efforts involved in the preparation and
conduct of board meetings.
Q: If the Board proposal is approved by shareholders, how many directors
will sit on the Board?
A: If all nominees are elected, the Company's Board and the Trust's Board
will each consist of eleven individuals. Five of these persons currently
serve as members of each Board; six persons will be new to the Company's
Board and the Trust's Board but have experience serving on the boards of
various other investment companies within the DeAM Fund Complex.
II. PROPOSAL RELATED TO APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS
Q: Why am I being asked to vote for a new investment advisory agreement?
A: Fund management recommended to the Board that they approve the new
investment advisory agreements in order to simplify the organizational
structure of Deutsche Bank's US mutual fund operations. The proposed new
advisory agreements described in the proxy statement will cover sub-
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stantially similar provisions and do not differ in terms of services to
be provided or fees to be paid therefor from the current advisory
agreements pursuant to which services are provided to the funds, except
for the dates of execution, effectiveness and initial term, for Top 50
US Fund and Japanese Equity Fund, certain changes to the 'Delegation of
Responsibilities' language, and except that, under the new advisory
agreements, DeAM, Inc., an indirect wholly owned subsidiary of Deutsche
Bank, would be the investment advisor rather than ICCC, also an indirect
wholly owned subsidiary of Deutsche Bank. Currently, under limited
circumstances, an advisor may delegate duties to a sub-advisor without
obtaining shareholder approval at the time such delegation is made. The
proposed delegation provision is also intended to authorize the
selection of sub-advisors under circumstances yet to be approved or
identified by the Securities and Exchange Commission or its staff.
In determining to recommend that the shareholders approve the new
advisory agreements, the Board considered, among other factors, the
potential benefits to the funds of providing DeAM, Inc. more flexibility
in structuring portfolio management services for each fund and that the
change to DeAM, Inc. is a matter of administrative convenience and no
material changes will result with respect to the services currently
provided to the funds. In addition, the Board considered that DeAM, Inc.
will be able to take advantage of the strengths of other entities within
the Deutsche Asset Management organization by permitting DeAM, Inc. to
delegate certain portfolio management services to such entities.
Q: Will the investment advisory fees remain the same?
A: Yes. The investment advisory fee rates proposed to be charged to the
funds under the new advisory agreements are the same as the respective
investment advisory fee rates charged under the current advisory
agreements.
III. GLOBAL BIOTECHNOLOGY FUND, GROWTH OPPORTUNITY FUND AND JAPANESE EQUITY
FUND SHAREHOLDERS ONLY-- PROPOSAL RELATED TO APPROVAL OF NEW SUB-ADVISORY
AGREEMENTS
Q: Why am I being asked to vote for a new sub-advisory agreement?
A: Fund management has proposed new sub-advisory agreements on behalf of
each of Global Biotechnology Fund with DWS, on behalf of Growth
Opportunity Fund with Jennison and on behalf of Japanese Equity Fund
with Deutsche Asset Management (Japan) Limited ('DeAMJ'), pursuant to
which
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DWS, Jennison or DeAMJ, as applicable, would furnish information,
investment recommendations, advice and assistance to the funds and to
DeAM, Inc. DeAM, Inc. will remain fully responsible for DWS', Jennison's
or DeAMJ's actions under the proposed sub-advisory agreements. The
proposed new sub-advisory agreements for Global Biotechnology Fund and
Growth Opportunity Fund contain substantially similar provisions and do
not differ in substance from the current sub-advisory agreements
pursuant to which services are provided to the funds, except for the
dates of execution, effectiveness and initial term, and the substitution
of DeAM, Inc. for ICCC. The proposed new sub-advisory agreement for
Japanese Equity Fund contains substantially similar provisions as the
current sub-advisory agreement. However, Fund management proposed, in
connection with the special meeting, changing the Fund's sub-advisor
from DWS to DeAMJ, both of which are wholly owned subsidiaries of
Deutsche Bank, and affiliates of ICCC and DeAM, Inc. Under the new
sub-advisory agreement, DeAM, Inc. would be the investment advisor
rather than ICCC.
Q: Will the investment advisory fees remain the same?
A: Yes. The sub-advisory fees will be paid by DeAM, Inc. and not by your
fund, and therefore these fees will have no effect on the investment
advisory fee paid by your fund to DeAM, Inc.
IV. GENERAL QUESTIONS
Q: What are the Board's recommendations?
A: The Board recommends that all shareholders vote 'FOR' the nominees for
the Board and 'FOR' the approval of the new advisory agreements. The
Board also recommends that Global Biotechnology Fund, Growth Opportunity
Fund and Japanese Equity Fund shareholders vote 'FOR' the approval of
the new sub-advisory agreements.
Q: Will my fund pay for the proxy solicitation and legal costs associated
with this solicitation?
A: No, DeAM, Inc. will bear these costs.
Q: How can I vote?
A: You can vote in any one of four ways:
. Through the Internet by going to the website listed on your proxy
card(s);
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. By telephone, with a toll-free call to the number listed on your
proxy card;
. By mail, with the enclosed proxy card(s); or
. 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. These voting
methods will save your fund money. 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(s)?
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(s).
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(s).
Q: Whom should I call with questions?
A: Please call Georgeson Shareholder Communications, Inc. at 1-866-474-6829
with any additional questions about the proxy statement or the
procedures to be followed to execute and deliver a proxy.
Q: Why am I receiving proxy information on funds that I do not own?
A: Since shareholders of all of the DeAM Funds are being asked to approve
certain of the same proposals, most of the information that must be
included in a proxy statement for your fund needs to be included in a
proxy statement for other funds as well. Therefore, in order to save
money and to promote efficiency, one proxy statement has been prepared
for the Company.
The attached proxy statement contains more detailed information about each of
the proposals relating to your fund. Please read it carefully.
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DEUTSCHE INVESTORS FUNDS, INC.
Top 50 US Fund
Japanese Equity Fund
Global Biotechnology Fund
and
Growth Opportunity Fund
One South Street
Baltimore, Maryland 21202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held August 16, 2002
A special meeting of shareholders of the Top 50 US Fund, Japanese Equity
Fund, Global Biotechnology Fund and Growth Opportunity Fund, each a series of
Deutsche Investors Funds, Inc. (the 'Company') will be held at the offices of
Deutsche Asset Management, One South Street, 30th Floor, Baltimore, Maryland
21202 on August 16, 2002 at 10:00 am (Eastern time) (the 'Special Meeting').
The Company is an open-end management investment company, organized under the
laws of the State of Maryland. The Company is comprised of the above series
(each, a 'Fund,' and collectively, the 'Funds').
Each of the Top 50 US Fund and Japanese Equity Fund operates as a feeder
fund (each, a 'Feeder Fund,' and collectively, the 'Feeder Funds') in a
master-feeder fund arrangement with a corresponding master portfolio (each, a
'Portfolio,' and collectively, the 'Portfolios'). Each Feeder Fund seeks to
achieve its investment objective by investing all of its investable assets in a
corresponding Portfolio with the same investment objective and policies. The
Portfolios in which the Feeder Funds invest are organized as registered
open-end management investment companies established as series of Deutsche
Investors Portfolios Trust (the 'Trust') under the laws of the State of New
York. Pursuant to the requirements of the Investment Company Act of 1940, as
amended (the '1940 Act'), applicable to master-feeder arrangements, each Feeder
Fund's voting rights with respect to the Portfolio interests that it holds must
be passed through to the Feeder Fund's own shareholders. Each of the Global
Biotechnology Fund and Growth Opportunity Fund is a stand-alone fund.
The Special Meeting is being held to consider and vote on the following
matters for each Fund, as indicated below and described more fully under the
corresponding Proposals in the Proxy Statement, and such other matters as may
properly come before the Special Meeting or any adjournments thereof:
PROPOSAL 1: (Voted on By To elect eleven Directors of the Company to hold
All Funds together) office until their respective successors have
been duly elected and qualified or until their
earlier resignation or removal, whose terms will
be effective on the date of the Special Meeting
or, in the event of an adjournment or
adjournments of the Special Meeting, such later
date as shareholder approval is obtained.
PROPOSAL 2A: (Global To approve a new investment advisory agreement (a
Biotechnology and Growth 'New Advisory Agreement') between the Company, on
Opportunity only) behalf of the Funds, and Deutsche Asset
Management, Inc. ('DeAM, Inc.') to be implemented
within two years of the date of the Special
Meeting upon approval of the members of the
Company's Board of Directors who are not
'interested persons' (as defined in the
Investment Company Act of 1940, as amended).
PROPOSAL 2B: (Top 50 US To approve a new investment advisory agreement (a
and Japanese Equity only) 'New Advisory Agreement') between the Trust, on
behalf of the Portfolios, and DeAM, Inc. to be
implemented within two years of the date of the
Special Meeting upon approval of the members of
the Trust's Board of Trustees who are not
'interested persons' (as defined in the
Investment Company Act of 1940, as amended).
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PROPOSAL 3A: (Global To approve a new sub-advisory agreement (a 'New
Biotechnology and Growth Sub-Advisory Agreement') among the Company, on
Opportunity only) behalf of the Funds, DeAM, Inc. and each Fund's
respective sub-advisor (each a 'Sub-Advisor') to
be implemented within two years of the date of
the Special Meeting upon approval of the members
of the Company's Board of Directors who are not
'interested persons' (as defined in the
Investment Company Act of 1940, as amended).
PROPOSAL 3B: (Japanese To approve a new sub-advisory agreement (a 'New
Equity only) Sub-Advisory Agreement') between DeAM, Inc. and
Deutsche Asset Management (Japan) Limited
('DeAMJ' or the 'Sub-Advisor') to be implemented
upon approval of the members of the Trust's Board
of Trustees who are not 'interested persons' (as
defined in the Investment Company Act of 1940, as
amended).
The appointed proxies will vote in their discretion on any other business as
may properly come before the Special Meeting or any adjournments thereof.
The New Advisory Agreements described in Proposal 2A contain substantially
similar provisions and do not differ in substance from the Current Advisory
Agreements pursuant to which services are provided to the Funds, except for the
dates of execution, effectiveness and initial term, and except that, under the
New Advisory Agreements, DeAM, Inc., an indirect wholly owned subsidiary of
Deutsche Bank AG ('Deutsche Bank'), would be the investment advisor rather than
Investment Company Capital Corp. ('ICCC'), also an indirect wholly owned
subsidiary of Deutsche Bank, and DeAM, Inc. would be authorized, to the extent
permissible by law and subject to further approval by the Board of Directors,
to appoint certain affiliates as sub-advisors.
The New Advisory Agreement described in Proposal 2B contains substantially
similar provisions and does not differ in substance from the Current Advisory
Agreement pursuant to which services are provided to the Portfolios,
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except for the dates of execution, effectiveness, initial term and certain
changes to the 'Delegation of Responsibilities' language described in the proxy
statement, and except that, under the New Advisory Agreement, DeAM, Inc., an
indirect wholly owned subsidiary of Deutsche Bank, would be the investment
advisor rather than ICCC, also an indirect wholly owned subsidiary of Deutsche
Bank.
The New Sub-Advisory Agreements described in Proposal 3A contain
substantially similar provisions and do not differ in substance from the
Current Sub-Advisory Agreements except for the dates of execution,
effectiveness, and initial term, and except that, under the New Sub-Advisory
Agreements, DeAM, Inc. would be the investment advisor rather than ICCC.
The New Sub-Advisory Agreement described in Proposal 3B contains
substantially similar provisions as the Current Sub-Advisory Agreement.
However, Fund management proposed, in connection with the Special Meeting,
changing the Fund's sub-advisor from DWS International Portfolio Management
GmbH ('DWS') to Deutsche Asset Management (Japan) Limited ('DeAMJ'), both of
which are wholly owned subsidiaries of Deutsche Bank, and affiliates of ICCC
and DeAM, Inc. Under the New Sub-Advisory Agreement, DeAM, Inc. would be the
investment advisor rather than ICCC.
Implementation of Proposal 3A or Proposal 3B for a Fund/Portfolio is
contingent upon the approval of Proposal 2A or Proposal 2B, as appropriate (the
New Advisory Agreement) by the shareholders of that Fund. If shareholders of a
Fund do not approve Proposal 2A or Proposal 2B, as appropriate, but approve
Proposal 3A or Proposal 3B, the Current Advisory and Sub-Advisory Agreements
will remain in effect and the Board of Directors will consider what other
action is appropriate based upon the interests of the shareholders.
The close of business on June 26, 2002 has been fixed as the record date for
the determination of the shareholders of the Company entitled to notice of, and
to vote at, the Special Meeting. You are cordially invited to attend the
Special Meeting.
The Board of Directors of the Company unanimously recommends that
shareholders vote FOR the election of each nominee to the Board of Directors of
the Company and FOR each applicable Proposal.
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This notice and related proxy material are first being mailed to
shareholders of the Company on or about July 16, 2002. This proxy is being
solicited on behalf of the Board of Directors of the Company.
By Order of the Board of Directors,
/s/ Daniel O. Hirsch
Daniel O. Hirsch, Assistant Secretary
Baltimore, Maryland
July 9, 2002
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE,
DATE AND SIGN EACH 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. THE PROXY
IS REVOCABLE AT ANY TIME PRIOR TO ITS USE.
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 1-866-474-6829.
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YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on each enclosed proxy card, sign
and date the card(s) and return it or them in the envelope provided. If you
sign, date and return the proxy card(s) but give no voting instructions, your
shares will be voted 'FOR' the nominees for Director named in the attached
Proxy Statement; 'FOR' the approval of the new investment advisory agreements
with Deutsche Asset Management, Inc.; 'FOR' the approval of new sub-advisory
agreements among the Company, Deutsche Asset Management, Inc. and (i) DWS
International Portfolio Management GmbH (Global Biotechnology Fund only) and
(ii) Jennison Associates LLC (Growth Opportunity Fund only); 'FOR' the
approval of a new sub-advisory agreement between Deutsche Asset Management,
Inc. and Deutsche Asset Management (Japan) Limited (Japanese Equity Fund
only); and, in the discretion of the persons appointed as proxies, either
'FOR' or 'AGAINST' any other business that may properly arise at the Special
Meeting or any adjournments thereof. In order to avoid the additional expense
of further solicitation, we ask your cooperation in mailing your proxy card(s)
promptly. As an alternative to using the paper proxy card(s) to vote, you may
vote shares that are registered in your name, as well as shares held in
'street name' through a broker, via the Internet or telephone. To vote in this
manner, you will need the 'control' number(s) that appear on your proxy
card(s).
See your proxy card(s) for instructions for Internet voting.
You may also call 1-866-474-6829 and vote by telephone.
If we do not receive your completed proxy card(s), our proxy solicitor,
Georgeson Shareholder Communications, Inc., may contact you. Our proxy
solicitor will remind you to vote your shares or will record your vote over
the phone if you choose to vote in that manner.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to
you and avoid the time and expense to the Company involved in validating your
vote if you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration on the
proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration.
For example:
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, Director
- -----------------------------------------------------------------------------------
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, Director
(2) Jane B. Doe, Director u/t/d 12/28/78 Jane B. Doe
- -----------------------------------------------------------------------------------
Custodial or Estate Accounts
(1) John B. Smith, Cust. f/b/o John B. Smith, Jr.
UGMA/UTMA John B. Smith
(2) Estate of John B. Smith John B. Smith, Jr., Executor
DEUTSCHE INVESTORS FUNDS, INC.
Top 50 US Fund
Japanese Equity Fund
Global Biotechnology Fund
and
Growth Opportunity Fund
One South Street
Baltimore, Maryland 21202
PROXY STATEMENT FOR THE SPECIAL MEETING
OF SHAREHOLDERS
To Be Held August 16, 2002
This proxy statement ('Proxy Statement') is being furnished in connection
with the solicitation by the Board of Directors of Deutsche Investors Funds,
Inc. (the 'Company') on behalf of the Top 50 US Fund, Japanese Equity Fund,
Global Biotechnology Fund and Growth Opportunity Fund (each, a 'Fund,' and
collectively, the 'Funds') to be used at the special meeting of the Company to
be held at the offices of Deutsche Asset Management, One South Street, 30th
Floor, Baltimore, Maryland 21202 on August 16, 2002 at 10:00 am (Eastern time)
and at any adjournments thereof (the 'Special Meeting'). This Proxy Statement
and accompanying proxy card(s) ('Proxy') are expected to be mailed to
shareholders on or about July 16, 2002.
The Company is an open-end management investment company, organized under
the laws of the State of Maryland. Each of the Top 50 US Fund and Japanese
Equity Fund operates as a feeder fund (each, a 'Feeder Fund,' and collectively,
the 'Feeder Funds') in a master-feeder fund arrangement with a corresponding
master portfolio (each, a 'Portfolio,' and collectively, the 'Portfolios').
Each Feeder Fund seeks to achieve its investment objective by investing all of
its investable assets in a corresponding Portfolio with the same investment
objective and policies. The Portfolios in which the Feeder Funds invest are
organized as registered open-end management investment companies established as
series of Deutsche Investors Portfolios Trust (the 'Trust') under the laws of
the State of New York. Pursuant to the requirements of the Investment Company
Act of 1940, as amended (the '1940 Act'), applicable to master-feeder
arrangements, each Feeder Fund's voting rights with respect to the Portfolio
interests that it holds must be passed through to the Feeder Fund's own
shareholders. Each of the Global Biotechnology Fund and Growth Opportunity Fund
is a stand-alone fund.
Each Fund is comprised of three separate classes, each with its own expense
structure. However, since the Proposals presented in this Proxy Statement
uniformly affect each class, shareholders of each class may vote on all the
Proposals relating to the relevant Fund, and each vote has equal weight
regardless of its class.
The Special Meeting is being held to consider and vote on the following
matters for each 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 1: To elect eleven Directors of the Company to hold office until
(Voted on By All their respective successors have been duly elected and qualified
Funds together) or until their earlier resignation or removal, whose terms will be
effective on the date of the Special Meeting or, in the event of an
adjournment or adjournments of the Special Meeting, such later
date as shareholder approval is obtained.
PROPOSAL 2A: To approve a new investment advisory agreement (a 'New
(Global Advisory Agreement') between the Company, on behalf of the
Biotechnology Funds, and Deutsche Asset Management, Inc. ('DeAM, Inc.') to
and Growth be implemented within two years of the date of the Special
Opportunity only) Meeting upon approval of the members of the Company's Board
of Directors who are not 'interested persons' (as defined in the
Investment Company Act of 1940, as amended).
PROPOSAL 2B: To approve a new investment advisory agreement (a 'New
(Top 50 US and Advisory Agreement') between the Trust, on behalf of the
Japanese Equity Portfolios, and DeAM, Inc. to be implemented within two years
only) of the date of the Special Meeting upon approval of the members
of the Trust's Board of Trustees who are not 'interested persons'
(as defined in the Investment Company Act of 1940, as
amended).
PROPOSAL 3A: To approve a new sub-advisory agreement (a 'New Sub-Advisory
(Global Agreement') among the Company, on behalf of the Funds,
Biotechnology DeAM, Inc. and each Fund's respective sub-advisor (each a
and Growth 'Sub-Advisor') to be implemented within two years of the date of
Opportunity only) the Special Meeting upon approval of the members of the
Company's Board of Directors who are not 'interested persons'
(as defined in the Investment Company Act of 1940, as
amended).
PROPOSAL 3B: To approve a new sub-advisory agreement (a 'New Sub-Advisory
(Japanese Equity Agreement') between DeAM, Inc. and Deutsche Asset
only) Management (Japan) Limited ('DeAMJ' or the 'Sub-Advisor') to
be implemented upon approval of the members of the Trust's
Board of Trustees who are not 'interested persons' (as defined in
the Investment Company Act of 1940, as amended).
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The appointed proxies will vote on any other business as may properly come
before the Special Meeting or any adjournments thereof.
The shareholders of the Company are to consider the election of Richard R.
Burt, S. Leland Dill, Martin J. Gruber, Richard T. Hale, Joseph R. Hardiman,
Richard J. Herring, Graham E. Jones, Rebecca W. Rimel, Philip Saunders, Jr.,
William N. Searcy and Robert H. Wadsworth (the 'Director Nominees') as
Directors of the Company./1/ Mr. Hale is currently an 'interested person' (an
'Interested Director') as defined in the 1940 Act of each Fund and, if elected,
will be the Chairman of the Board of the Company. Messrs. Burt, Hale, Hardiman
and Wadsworth and Ms. Rimel currently serve on the Board of Directors of the
Company. Messrs. Dill, Jones, and Searcy and Drs. Gruber, Herring and Saunders
currently serve on the Boards of Directors of various other investment
companies within the Deutsche Asset Management family of funds.
Shareholders of the Funds are also to consider the approval of a New
Advisory Agreement between DeAM, Inc., an affiliate of the current investment
advisor for the Fund/Portfolio, and the Company/Trust.
Shareholders of Global Biotechnology Fund are to consider the approval of a
New Sub-Advisory Agreement among the Company, DeAM, Inc. and DWS International
Portfolio Management GmbH; shareholders of Japanese Equity Fund are to consider
the approval of a New Sub-Advisory Agreement between DeAM, Inc. and DeAMJ; and
shareholders of Growth Opportunity Fund are to consider the approval of a New
Sub-Advisory Agreement among the Company, DeAM, Inc. and Jennison Associates
LLC.
Implementation of Proposal 3A or Proposal 3B for a Fund/Portfolio is
contingent upon the approval of Proposal 2A or Proposal 2B as appropriate (the
New Advisory Agreement) by the shareholders of that Fund. If shareholders of a
Fund do not approve Proposal 2A or Proposal 2B, as appropriate, but approve
Proposal 3A or Proposal 3B, the Current Advisory and Sub-Advisory Agreements
will remain in effect and the Board of Directors will consider what other
action is appropriate based upon the interests of the shareholders.
Below is a chart describing which proposals affect each Fund.
Proposal Proposal Proposal Proposal Proposal
Fund 1 2A 2B 3A 3B
- ----------------------------------------------------------------------------------------------
Top 50 US Fund (check mark) (check mark)
- ----------------------------------------------------------------------------------------------
Japanese Equity Fund (check mark) (check mark) (check mark)
- ----------------------------------------------------------------------------------------------
Global Biotechnology Fund (check mark) (check mark) (check mark)
- ----------------------------------------------------------------------------------------------
Growth Opportunity Fund (check mark) (check mark) (check mark)
- --------
/1/ Unless otherwise indicated, references in this Proxy Statement to the
'Director Nominees' include the nominees for both the Company and the Trust.
3
For simplicity, actions are described in this Proxy Statement as being taken
by a Fund, which is a series of the Company, although all actions are actually
taken by the Company on behalf of the applicable Fund. Some actions described
as taken by or with respect to a Feeder Fund are actually actions to be taken
by the corresponding Portfolio in which the Feeder Fund invests all of its
assets and on which the Feeder Fund votes as a shareholder. Further, actions
described as being taken by the shareholders of the Trust with respect to its
Board of Trustees will also be taken by the Feeder Funds as shareholders of the
Portfolios with respect to the Portfolios' Boards of Trustees. For the Feeder
Funds, your vote determines how the Feeder Fund will vote with respect to
itself and its corresponding Portfolio. See 'Background.'
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, telegraph, through the Internet or in person by officers or
employees of the Company 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 Company's shares, (c) payment to Georgeson Shareholder
Communications, Inc., a proxy solicitation firm, for its services in soliciting
Proxies and (d) supplementary solicitations to submit Proxies, will be borne by
DeAM, Inc. DeAM, Inc. has engaged Georgeson Shareholder Communications, Inc. at
an estimated total cost of $177,600. However, the exact cost will depend on the
amount and types of services rendered. If the Company records votes by
telephone or through the Internet, it 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 in the
same manner that Proxies voted by mail may be revoked.
The most recent Annual Report of each Fund containing audited financial
statements for the fiscal year ended August 31, 2001 for Top 50 US Fund,
Japanese Equity Fund and Global Biotechnology Fund, and September 30, 2001 for
Growth Opportunity Fund, as well as the most recent Semi-Annual Report
succeeding the Annual Report, if any, of each Fund (each, a 'Report'), have
previously been furnished to shareholders of the respective Funds. An
additional copy of each Report will be furnished without charge upon request by
writing to the Company at the address set forth on the cover of this Proxy
Statement or by calling 1-800-730-1313. The Reports are also available on the
Deutsche Asset Management website at www.deam-us.com.
4
If the enclosed Proxy is properly executed and returned in time to be voted
at the Special Meeting, the shares represented thereby will be voted in
accordance with the instructions marked on the Proxy. Shares of a Fund are
entitled to one vote each at the Special Meeting and fractional shares are
entitled to proportionate shares of one vote. If no instructions are marked on
the Proxy with respect to a specific Proposal, the Proxy will be voted 'FOR'
the approval of such Proposal and in accordance with the judgment of the
persons appointed as proxies with respect to any other matter that may properly
come before the Special Meeting. Any shareholder giving a Proxy has the right
to attend the Special Meeting to vote his/her shares in person (thereby
revoking any prior Proxy) and also the right to revoke the Proxy at any time
prior to its exercise by executing a superseding Proxy or by submitting a
written notice of revocation to the Company's secretary (the 'Secretary'). To
be effective, such revocation must be received by the Secretary prior to the
Special Meeting. Merely attending the Special Meeting without voting will not
revoke a prior Proxy.
Deutsche Bank Trust Company Americas (formerly, Bankers Trust Company)
('Deutsche Bank Trust') may vote any shares in accounts as to which Deutsche
Bank Trust has voting authority, which are not otherwise represented in person
or by proxy at the Special Meeting. Accordingly, for each Proposal, if Deutsche
Bank Trust votes shares of the Funds over which it has voting discretion, it
will do so in accordance with its fiduciary and other legal obligations, and in
its discretion may consult with the beneficial owners or other fiduciaries.
In the event that a quorum is not present at the Special Meeting, or if a
quorum is present but sufficient votes to approve a Proposal are not received,
the persons named as proxies may propose one or more adjournments of the
Special Meeting to permit further solicitation of Proxies with respect to the
Proposal. In determining whether to adjourn the Special Meeting, the following
factors may be considered: the nature of the proposals that are the subject of
the Special Meeting, the percentage of votes actually cast, the percentage of
negative votes actually cast, the nature of any further solicitation and the
information to be provided to shareholders with respect to the reasons for the
solicitation. Any adjournment will require the affirmative vote of a majority
of those shares represented at the Special Meeting in person or by Proxy. The
persons named as proxies will vote these Proxies that they are entitled to vote
'FOR' any Proposal in favor of an adjournment and will vote these Proxies
required to be voted 'AGAINST' any such Proposal against any adjournment. A
shareholder vote may be taken on one or more of the Proposals in the Proxy
Statement prior to any adjournment if sufficient votes have been received and
it is otherwise appropriate. A quorum of shareholders is constituted by the
presence in person or by proxy of the holders of, for the Company, at least
one-third of the outstanding shares of the Company entitled to vote at the
Special Meeting. For purposes of determining the presence of a quorum for
transacting business at the Special Meeting, abstentions and
5
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 June 26, 2002 (the
'Record Date') are entitled to notice of, and to vote at, the Special Meeting.
The number of shares of each class of each Fund that were issued and
outstanding as of the Record Date are set forth in Exhibit A to this Proxy
Statement.
This Proxy Statement is being used in order to reduce the preparation,
printing, handling and postage expenses that would result from the use of a
separate statement for each Fund and, because shareholders may own shares of
more than one Fund, the combined statement may avoid burdening shareholders
with more than one Proxy Statement. To the extent information relating to
common ownership is available to the Funds, a shareholder that owns of record
shares in two or more of the Funds will receive a package containing a Proxy
Statement and Proxies for the Funds in which such shareholder is a record
owner. If the information relating to common ownership is not available to the
Funds, a shareholder that beneficially owns of record shares in two or more
Funds may receive two or more packages each containing a Proxy Statement and a
Proxy for each Fund in which the shareholder is a beneficial owner. It is
essential that shareholders complete, date, sign and return each enclosed Proxy
(unless a shareholder is voting by telephone or through the Internet).
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 (or Proxies);
. date and sign the Proxy (or Proxies); and
. mail the Proxy (or Proxies) promptly in the enclosed envelope.
Instructions for voting by telephone or through the Internet are included on
the Proxy (or Proxies) enclosed with this Proxy Statement.
Beneficial Ownership of Shares of the Funds
Exhibit B to this Proxy Statement sets forth information as of the Record
Date regarding the beneficial ownership of the Funds' shares by the persons
known by the Company to beneficially own more than five percent of the
outstanding shares of each
6
class of each Fund. 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. Collectively, the Directors, Director Nominees, and executive
officers of the Company own less than 1% of each class of each Fund's
outstanding shares.
Background
The Company. The Company is a registered open-end management investment
company established as a Maryland corporation. Investment Company Capital Corp.
('ICCC'), located at One South Street, Baltimore, Maryland 21202, currently
acts as the investment advisor to each of the Funds pursuant to the terms of
the Current Advisory Agreements. Pursuant to the Current Advisory Agreements,
ICCC supervises and assists in the management of the assets of the Funds and
furnishes the Funds with research, statistical, advisory and managerial
services. ICCC pays the ordinary office expenses of the Funds and the
compensation, if any, of all officers and employees of the Company and all
Interested Directors who are 'interested persons' (as defined in the 1940 Act)
of the Company.
Master-Feeder Structure. Top 50 US Fund and Japanese Equity Fund each
operates as a feeder fund in a master-feeder fund arrangement with the
Portfolios, which serve as master funds. Each Feeder Fund seeks to achieve its
investment objective by investing all of its investable assets in a
corresponding Portfolio with the same investment objectives and policies. Each
Portfolio is a registered open-end management investment company established as
a series of Deutsche Investors Portfolios Trust (the 'Trust'). The Portfolios
invest directly in investment securities and other investments. Pursuant to the
requirements of the 1940 Act applicable to master-feeder arrangements, each
Feeder Fund's voting rights with respect to the Portfolio shares that it holds
must be passed through to the Feeder Fund's own shareholders.
7
PROPOSAL 1
ELECTION OF NOMINEES TO THE BOARD OF DIRECTORS OF THE COMPANY
It is proposed that eleven Director Nominees are to be elected at the
Special Meeting to comprise the entire Board of Directors of the Company to
serve until their successors have been duly elected and qualified or until
their earlier resignation or removal. The Independent Director Nominees were
recently selected by a Nominating Committee of the Board comprised entirely of
the Independent Directors of the Board and nominated by the full Board at a
meeting held on March 26, 2002. If elected, the terms of the eleven Director
Nominees will begin on the date of the Special Meeting or, in the event of an
adjournment or adjournments of the Special Meeting, such later date as
shareholder approval is obtained, and upon their respective acceptances of
their election in writing (the 'Effective Date'); until that time, the current
Board members will continue their terms. It is anticipated that Messrs. Levy,
McDonald, Semans and Vogt, each a current member of the Board of Directors,
will no longer serve effective the Effective Date if Proposal 1 is approved by
the shareholders of the Funds. Upon Mr. Semans' resignation, Richard T. Hale
will become Chairman of the Board of the Company if Proposal 1 is approved by
the shareholders of the Funds. The names and ages of the Director Nominees,
their principal occupations during the past five years and certain of their
other affiliations are provided later in this Proposal. No Independent Director
or Independent Director Nominee of the Company serves or will serve as an
officer of the Company. Each of the Director Nominees has agreed to serve if
elected at the Special Meeting. It is the intention of the persons designated
as proxies in the Proxy, unless otherwise directed therein, to vote at the
Special Meeting for the election of the Director Nominees. If any Director
Nominee is unable or unavailable to serve, the persons named in the Proxies
will vote the Proxies for such other person(s) as the Board of Directors may
recommend.
The nomination of these persons to serve as the Board of Directors of the
Company reflects an overall plan to coordinate and enhance the efficiency of
the governance of the Company and of certain other investment companies that
are managed, advised, sub-advised or administered by DeAM, Inc. (along with
certain other investment companies managed, advised or administered by ICCC,
another indirect wholly owned subsidiary of Deutsche Bank) (the 'DeAM Funds').
The proposal concerning the size and composition of the Board of Directors was
suggested to the Board by ICCC and reviewed by the current Independent
Directors of the Board. Messrs. Burt, Hale (Interested Director), Hardiman and
Wadsworth and Ms. Rimel currently serve on the Board of Directors of the
Company. Each of the other Independent Director Nominees already serves as an
independent board member for one or more other DeAM Funds and understands the
operations of the fund complex.
8
ICCC recommended, and the Board agreed, that the Company should be governed
by a larger Board of Directors composed of the same members as are expected to
govern certain other DeAM Funds. Presently, the Board membership of the Company
and the board membership of the other DeAM Funds are not identical. Nine
persons currently serve on the Board of Directors of the Company, and between
five and nine persons currently serve on the boards of the other DeAM Funds. If
shareholders elect each of the Director Nominees, certain of the existing
Directors will be joined by certain of the board members of the other DeAM
Funds. Although the By-Laws of the Company provide that the Board of Directors
may consist of a maximum of fifteen directors, Fund management proposed, and
the Board agreed, that only eleven Director Nominees be submitted for election.
Proxies cannot be voted for a greater number of persons than the number of
Director Nominees named.
Although the election of the Director Nominees is not in any way conditioned
on similar action being taken by other funds, it is currently anticipated that
the boards of the other DeAM Funds will approve the expansions of their boards
and the appointment of new board members so that each of the DeAM Funds' boards
is ultimately identically comprised. The following information is provided for
each Director Nominee and executive officer of the Company as of the end of the
most recently completed calendar year. The first section of the table lists
information for each Director Nominee who is an Independent Director Nominee.
Information for the Interested Director Nominee follows. The Interested
Director Nominee is considered to be an interested person as defined by the
1940 Act because of his employment with DeAM, Inc. The mailing address for the
Director Nominees and the executive officers with respect to the Company's
operations is One South Street, Baltimore, Maryland 21202.
9
INFORMATION CONCERNING DIRECTOR NOMINEES AND OFFICERS
NUMBER OF
FUNDS IN
THE FUND
COMPLEX TO
POSITION WITH BE OVERSEEN
THE COMPANY BY DIRECTOR
AND LENGTH OF BUSINESS EXPERIENCE AND DIRECTORSHIPS DURING OR DIRECTOR
NAME AND BIRTH DATE TIME SERVED THE PAST 5 YEARS NOMINEE/1/
- -----------------------------------------------------------------------------------------------
Independent Director Nominees
Richard R. Burt Director Chairman, IEP Advisors, Inc. (July 1998 to 86
2/3/47 since 1998. present); Chairman of the Board, Weirton Steel
Corporation/2/ (April 1996 to present); Member of
the Board, Hollinger International, Inc./2/
(publishing) (1995 to present), HCL Technologies
Limited (information technology) (April 1999 to
present), UBS Mutual Funds (formerly known as
Brinson and Mitchell Hutchins families of funds)
(1995 to present) (registered investment
companies); and Member, Textron Inc./2/
International Advisory Council (July 1996 to
present). Formerly, Partner, McKinsey &
Company (consulting) (1991-1994) and US Chief
Negotiator in Strategic Arms Reduction Talks
(START) with former Soviet Union and US
Ambassador to the Federal Republic of Germany
(1985-1991); Member of the Board, Homestake
Mining/2/ (mining and exploration) (1998-February
2001), Archer Daniels Midland Company/2/
(agribusiness operations) (October 1996-June
2001) and Anchor Gaming (gaming software and
equipment) (March 1999-December 2001).
S. Leland Dill Nominee Trustee, Phoenix Zweig Series Trust (since 84
3/28/30 September 1989), Phoenix Euclid Market Neutral
Funds (since May 1998) (registered investment
companies); Retired (since 1986). Formerly,
Partner, KPMG Peat Marwick (June 1956-June
1986); Director, Vintners International Company
Inc. (June 1989-May 1992), Coutts (USA)
International (January 1992-March 2000), Coutts
Trust Holdings Ltd., Coutts Group (March 1991-
March 1999); and General Partner, Pemco
(investment company) (June 1979-June 1986).
Martin J. Gruber Nominee Nomura Professor of Finance, Leonard N. Stern 85
7/15/37 School of Business, New York University (since
1964); Trustee, CREF (since 2000); Director, S.G.
Cowen Mutual Funds (1985-2001), Japan Equity
Fund, Inc. (since 1992), Thai Capital Fund, Inc.
(2000 to present) and Singapore Fund, Inc. (since
2000) (registered investment companies).
10
NUMBER OF
FUNDS IN
THE FUND
COMPLEX TO
POSITION WITH BE OVERSEEN
THE COMPANY BY DIRECTOR
AND LENGTH OF BUSINESS EXPERIENCE AND DIRECTORSHIPS DURING OR DIRECTOR
NAME AND BIRTH DATE TIME SERVED THE PAST 5 YEARS NOMINEE/1/
- ------------------------------------------------------------------------------------------------
Richard J. Herring Nominee Jacob Safra Professor of International Banking 84
2/18/46 and Professor, Finance Department, The Wharton
School, University of Pennsylvania (since 1972);
Director, Lauder Institute of International
Management Studies (since 2000); Co-Director,
Wharton Financial Institutions Center (since
2000) and Vice Dean and Director, Wharton
Undergraduate Division (1995-2000).
Joseph R. Hardiman Director Private Equity Investor (1997 to present); 82
5/27/37 since 2000. Director, Soundview Technology Group Inc.
(investment banking) (July 1998 to present),
Corvis Corporation/2/ (optical networking
equipment) (July 2000 to present), Brown
Investment Advisory & Trust Company
(investment advisor) (February 2001 to present),
The Nevis Fund (registered investment company)
(July 1999 to present), and ISI Family of Funds
(registered investment companies) (March 1998 to
present). Formerly, Director, Circon Corp./2/
(medical instruments) (November 1998-January
1999); President and Chief Executive Officer, The
National Association of Securities Dealers, Inc.
and The NASDAQ Stock Market, Inc. (1987-
1997); Chief Operating Officer of Alex. Brown &
Sons Incorporated (now Deutsche Bank Securities
Inc.) (1985-1987) and General Partner, Alex.
Brown & Sons Incorporated (now Deutsche Bank
Securities Inc.) (1976-1985).
Graham E. Jones Nominee Senior Vice President, BGK Properties, Inc. 84
1/31/33 (commercial real estate) (since 1995); Trustee, 8
open-end mutual funds managed by Weiss, Peck
& Greer (since 1985) and Trustee of 22 open-end
mutual funds managed by Sun Capital Advisers,
Inc. (since 1998).
Rebecca W. Rimel Director President and Chief Executive Officer, The Pew 84
4/10/51 since 2000. Charitable Trusts (charitable foundation) (1994 to
present) and Director and Executive Vice
President, The Glenmede Trust Company
(investment trust and wealth management) (1994
to present). Formerly, Executive Director, The
Pew Charitable Trusts (1988-1994) and Director,
ISI Family of Funds (registered investment
companies) (1997-1999).
11
NUMBER OF
FUNDS IN
THE FUND
COMPLEX TO
POSITION WITH BE OVERSEEN
THE COMPANY BY DIRECTOR
AND LENGTH OF BUSINESS EXPERIENCE AND DIRECTORSHIPS DURING OR DIRECTOR
NAME AND BIRTH DATE TIME SERVED THE PAST 5 YEARS NOMINEE/1/
- -------------------------------------------------------------------------------------------------
Philip Saunders, Jr. Nominee Principal, Philip Saunders Associates (Economic 84
10/11/35 and Financial Consulting) (since 1998). Formerly,
Director, Financial Industry Consulting, Wolf &
Company (1987-1988); President, John Hancock
Home Mortgage Corporation (1984-1986); Senior
Vice President of Treasury and Financial
Services, John Hancock Mutual Life Insurance
Company, Inc. (1982-1986).
William N. Searcy Nominee Pension & Savings Trust Officer, Sprint 84
9/3/46 Corporation/2/ (telecommunications) (since 1989);
Trustee of 22 open-end mutual funds managed by
Sun Capital Advisers, Inc. (since 1998).
Robert H. Wadsworth Director President, Robert H. Wadsworth Associates, Inc. 87
1/29/40 since 1997. (consulting firm) (1982 to present); President and
Director, Trust for Investment Managers
(registered investment company) (1999 to
present). Formerly, President, Investment
Company Administration, L.L.C. (1992*-July
2001); President, Treasurer and Director, First
Fund Distributors, Inc. (1990-January 2002); Vice
President, Professionally Managed Portfolios
(1999-2002) and Advisors Series Trust (1997-
2002) (registered investment companies); and
President, Guinness Flight Investment Funds, Inc.
(registered investment companies).
* Inception date of the corporation which was the
predecessor to the LLC.
Interested Director Nominee
Richard T. Hale/3/ Director Managing Director, Deutsche Bank Securities Inc. 84
7/17/45 and (formerly Deutsche Banc Alex. Brown Inc.) and
President Deutsche Asset Management (1999 to present);
since 2000. Director and President, Investment Company
Capital Corp. (registered investment advisor)
(1996 to present); President, DB Hedge Strategies
Fund LLC (registered investment company) (June
2002 to present); Director, Deutsche Global
Funds, Ltd. (2000 to present), CABEI Fund (2000
to present), North American Income Fund (2000
to present) (registered investment companies);
Vice President, Deutsche Asset Management, Inc.
(2000 to present). Chartered Financial Analyst.
Formerly, Director, ISI Family of Funds
(registered investment companies) (1992-1999).
Officers
Richard T. Hale President See information provided under Interested
since 2000. Director Nominee.
12
NUMBER OF
FUNDS IN
THE FUND
COMPLEX TO
POSITION WITH BE OVERSEEN
THE COMPANY BY DIRECTOR
AND LENGTH OF BUSINESS EXPERIENCE AND DIRECTORSHIPS DURING OR DIRECTOR
NAME AND BIRTH DATE TIME SERVED THE PAST 5 YEARS NOMINEE/1/
- -----------------------------------------------------------------------------------------------
Amy M. Olmert Secretary Director, Deutsche Asset Management (January
5/14/63 since 1999. 1999 to present); Certified Public Accountant
(1989 to present). Formerly, Vice President, BT
Alex. Brown Incorporated (now Deutsche Bank
Securities Inc.) (1997-1999); Senior Manager,
Coopers & Lybrand L.L.P. (now
PricewaterhouseCoopers LLP) (1992-1997).
Charles A. Rizzo Treasurer Director, Deutsche Asset Management (April
8/5/57 since 1999. 2000 to present); Certified Public Accountant;
Certified Management Accountant. Formerly,
Vice President and Department Head, BT Alex.
Brown Incorporated (now Deutsche Bank
Securities Inc.) (1998-1999); Senior Manager,
Coopers & Lybrand L.L.P. (now
PricewaterhouseCoopers LLP) (1993-1998).
Daniel O. Hirsch Assistant Managing Director, Deutsche Asset Management
3/27/54 Secretary (2002 to present) and Director, Global Funds Ltd.
since 1999. (2002 to present). Formerly, Director, Deutsche
Asset Management (1999-2002), Principal, BT
Alex. Brown Incorporated (now Deutsche Bank
Securities Inc.) (1998-1999); Assistant General
Counsel, United States Securities and Exchange
Commission (1993-1998).
- --------
/1/ As of March 31, 2002, the total number of Funds in the Deutsche Asset
Management Fund Complex (the 'Fund Complex') is 89.
/2/ A publicly held company with securities registered pursuant to Section 12
of the Securities Exchange Act of 1934.
/3/ Mr. Hale is a director who is an 'interested person' within the meaning of
Section 2(a)(19) of the 1940 Act. Mr. Hale is Vice President of DeAM, Inc.
and a Managing Director of Deutsche Asset Management, the US asset
management unit of Deutsche Bank and its affiliates.
Ms. Olmert and Messrs. Hale, Hirsch and Rizzo also hold similar positions
for other investment companies for which DeAM, Inc. or an affiliate serves as
the advisor.
Ownership in Securities of DeAM, Inc. and Related Companies
As reported to the Company, as of April 30, 2002 the Independent Director
Nominees and their immediate family members do not own securities of DeAM, Inc.
or an entity directly or indirectly controlling, controlled by, or under common
control with DeAM, Inc.
13
Director Compensation Table
The following table sets forth the compensation paid to the Independent
Directors by the Company and the Fund Complex for the fiscal year ended August
31, 2001 and for Growth Opportunity Fund for the fiscal year ended September
30, 2001.
PENSION OF
RETIREMENT TOTAL
BENEFITS ESTIMATED COMPENSATION
ACCRUED AS ANNUAL FROM THE
PART OF BENEFITS FUND AND
TOP 50 JAPANESE GLOBAL GROWTH FUND UPON FUND
INDEPENDENT DIRECTOR US EQUITY BIOTECHNOLOGY* OPPORTUNITY** EXPENSES RETIREMENT COMPLEX
- -----------------------------------------------------------------------------------------------------
Richard R. Burt $124.26 $41.65 $6.74 $17.86 $0 N/A $49,500.00
Joseph R. Hardiman $125.06 $41.88 $6.74 $17.86 $0 N/A $49,500.00
Louis E. Levy $149.66 $50.57 $7.86 $20.67 $0 N/A $59,500.00
Eugene J. McDonald $149.66 $50.57 $7.86 $20.67 $0 N/A $59,500.00
Rebecca W. Rimel $124.26 $41.65 $6.74 $17.86 $0 N/A $49,500.00
Carl W. Vogt $ 71.98 $19.64 $6.74 $17.86 $0 N/A $49,500.00
Robert H. Wadsworth $124.26 $41.65 $6.74 $17.86 $0 N/A $49,500.00
- --------
* For the period March 30, 2001 (the Fund's inception date) through August 31,
2001.
** For the period December 29, 2000 (the Fund's inception date) through
September 30, 2001.
The Board has established an Audit and Compliance Committee, a Nominating
Committee of the Board, a Pricing Committee, a Compensation Committee and an
Executive Committee. Each committee (except for the Pricing Committee) is
currently composed of the Independent Directors of the Board. Messrs. Burt,
Hale (Interested Director), Levy, McDonald, Semans (Interested Director) and
Wadsworth are currently the members of the Pricing Committee. In accordance
with its written charter adopted by the Board of Directors, the Audit and
Compliance Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing and
financial reporting practices of the Company. It also makes recommendations to
the Board as to the selection of the independent public accountants, reviews
the methods, scope and result of the audits and audit fees charged, and reviews
the Company's internal accounting procedures and controls. The Audit and
Compliance Committee also considers the scope and amount of non-audit services
provided to the Company, its investment advisor and affiliates by the
independent public accountants. The Nominating Committee is charged with the
duty of making all nominations for Independent Directors to the Board of
Directors. The Nominating Committee will consider Director nominees recommended
by shareholders. Shareholders who wish to suggest nominees for the Board of
Directors should submit their suggestions to be considered to the Company 60
days in advance of a meeting for inclusion in the Company's proxy statement and
form of proxy for such meeting as is held. The Pricing Committee considers and
acts upon all questions relating to valuation of the securities in the
Company's investment portfolios which may arise between meetings of the Board.
The Compensation Committee is responsible for
14
reviewing the compensation paid to the Directors for its appropriateness, and
making recommendations to the full Board with respect to the compensation of
the Directors. The Executive Committee makes recommendations to the full Board
with respect to the renewal of the Company's agreements with its service
providers. During the Company's most recent fiscal year ended August 31 for Top
50 US Fund, Japanese Equity Fund and Global Biotechnology Fund, the Board held
six meetings, the Audit and Compliance Committee held four meetings, the
Nominating Committee held one meeting, the Pricing Committee held two meetings,
the Compensation Committee held four meetings, and the Executive Committee held
four meetings. During the Company's most recent fiscal year ended September 30
for Growth Opportunity Fund, the Board held six meetings, the Audit and
Compliance Committee held four meetings, the Nominating Committee held one
meeting, the Pricing Committee held two meetings, the Compensation Committee
held three meetings, and the Executive Committee held four meetings. No
Director attended less than 75% of the applicable meetings. If the Nominees are
elected to the Board, the Board will consider whether other committees should
be organized after it has reviewed the needs of the Company.
Mr. Hale, if elected, will not be a member of the Audit and Compliance
Committee or the Nominating Committee.
Retirement Plan Information
Certain funds in the Fund Complex have adopted a retirement plan for
Directors who are not employees of the Company, ICCC or its respective
affiliates (the 'Retirement Plan'). The Retirement Plan is unfunded and
unvested. On February 12, 2001, the Board of Directors of the Company, as well
as each fund participating in the Retirement Plan, voted to amend the
Retirement Plan, effective January 1, 2001, as part of an overall review of the
compensation paid to Directors. The amendments provide that no further benefits
would accrue to any current or future directors and include a one-time payment
of benefits accrued under the Retirement Plan to Directors, as calculated based
on the following actuarial assumptions: (1) retirement benefits at later of age
65 and 10 years of service based on a 10% per year of service vesting schedule;
(2) a 6% interest rate; and (3) rounding all calculations to the next whole
year as of January 1, 2001. At each Director's election, this one-time payment
could be transferred into the Directors' Deferred Compensation Plan, described
below.
Any Director of the Fund who receives fees from the Fund is permitted to
defer 50% to 100% of his or her annual compensation pursuant to a Deferred
Compensation Plan. Messrs. Burt, Hardiman, Levy, McDonald, Vogt, and Wadsworth,
and Ms. Rimel have each executed a Deferred Compensation Agreement. Currently,
the deferring Directors may select from among the funds in the Fund Complex in
which
15
all or part of their deferral account shall be deemed to be invested.
Distributions from the deferring Directors' deferral accounts will be paid in
cash, in generally equal quarterly installments over a period of ten years.
Recommendation of the Board of Directors
The Board of Directors believes that coordinated governance through a
unified board structure will benefit the Company.
In their deliberations, the Board of Directors considered various matters
related to the management and long-term welfare of the Company. The Board
considered, among other factors, that coordinated governance within the Fund
Complex will reduce the possibility that the separate boards might arrive at
conflicting or inconsistent decisions regarding the policies, strategies,
operations and management of the Company and the other DeAM Funds, and that
this will help avoid costs, confusion and complexity resulting from different
or conflicting decisions. The Board also considered that operating with a
unified group eliminates the potential for these types of conflicts while
preserving the insights and experience that can be contributed by individual
members. In addition, the Board considered that a unified group board would
also allow management to reduce the total number of board meetings it is
required to attend and at which it would make repetitive presentations each
year across the Fund Complex which can be expected to make the governance
process more efficient. Deutsche Asset Management expends a significant amount
of time and effort preparing and coordinating materials and presentations for
board meetings. In many instances, presentations need to be made more than once
on identical or similar issues. Adopting a unified group board structure would
enable management to use time more efficiently. There may also be cost savings
to the Company because Directors will serve an increased number of investment
companies.
The Board also considered that a unified group board structure benefits the
Company by creating an experienced group of Board members who understand the
operations of each Fund and the Fund Complex and are exposed to the wide
variety of issues that arise from overseeing different types of funds. The
Board gave considerable weight to their expectation that the Company will
benefit from the diversity and experience of the Director Nominees that would
be included in the expanded Board and from the experience that each Director
Nominee will gain by serving on the boards of a diverse group of funds. The
Board also considered, in light of the following transaction, the importance of
greater breadth and depth of expertise on the Board.
On April 5, 2002, Deutsche Bank acquired 100% of US-based asset manager
Zurich Scudder Investments ('Scudder') (the 'Transaction'). The combined orga-
16
nization is the fourth largest asset manager in the world, with approximately
$900 billion in assets under management. The Transaction is anticipated to
provide greater breadth and geographic reach to the asset management services
presently provided by the asset management entities of Deutsche Bank by making
available additional investment expertise more effectively leveraged globally
through a stronger investment platform in which research is fundamentally
integrated with portfolio management. Because of the increased size and scope
of Deutsche Asset Management after the Transaction, Deutsche Asset Management
will seek to attract and retain talented people by providing a challenging work
environment, competitive compensation and reward systems and professional
development opportunities. Management intends to build a culture of teamwork,
commitment, performance and mutual respect.
The Director Nominees have had distinguished careers in accounting, finance,
marketing and other areas and will bring a wide range of expertise to the
Board. Ten of the eleven nominees, if elected, would be Independent Directors.
Independent Directors are charged with special responsibilities to provide an
independent check on management and to approve advisory, distribution and
similar agreements between the Company and management.
In addition, the Board considered certain other advantages of enlarging the
Board. These included that enlarging the Board will afford an increased range
of experience among Board members and makes it more likely that the Board will
be able to ensure appropriate continuity over the years as incumbent members
reach mandatory retirement age or otherwise retire and that, should the Board
determine to revise their structures through increased establishment of
committees, an enlarged Board will provide an increased choice of potential
members of such committees. As part of their deliberations, the Board also
recognized that increased numbers of Board members could result in less
collegial meetings and longer discussions. On balance, the Board concluded that
these possible detriments of size were outweighed by the benefits anticipated
from the unified and enlarged Board.
Therefore, after careful consideration, the Board, including the Independent
Directors, recommends that the shareholders vote 'FOR' the election of the
Director Nominees as set forth in this Proposal.
If the Director Nominees are elected by the shareholders, each Director
Nominee will serve, effective the Effective Date, until his/her successor is
duly elected and qualified or until his/her earlier resignation or removal. If
the Director Nominees are not elected, the Board will consider what action is
appropriate based upon the interests of the Company's shareholders.
17
PROPOSALS 2A and 2B
APPROVAL OF NEW ADVISORY AGREEMENTS
PROPOSAL 2A
It is proposed that shareholders of Global Biotechnology Fund and Growth
Opportunity Fund each approve a new investment advisory agreement between the
Company and DeAM, Inc. The New Advisory Agreements contain substantially
similar provisions and do not differ in substance from the Current Advisory
Agreements pursuant to which services are provided to the Funds except for the
dates of execution, effectiveness and initial term, and except that, under the
New Advisory Agreements, DeAM, Inc., an indirect wholly owned subsidiary of
Deutsche Bank, would be the investment advisor rather than ICCC and DeAM, Inc.
would be authorized, to the extent permissible by law and subject to further
approval by the Board of Directors, including a majority of those Board members
who are not 'interested persons' (as defined in the 1940 Act) of the Company or
the investment advisor (the 'Independent Directors'), to appoint certain
affiliates as sub-advisors. See 'Differences Between the Current and New
Advisory Agreements.'
PROPOSAL 2B
It is proposed that shareholders of Top 50 US Fund and Japanese Equity Fund
approve a new investment advisory agreement between the Trust and DeAM, Inc.
The New Advisory Agreement contains substantially similar provisions and does
not differ in substance from the Current Advisory Agreement pursuant to which
services are provided to the Portfolios except for the dates of execution,
effectiveness, initial term, and certain changes to the 'Delegation of
Responsibilities' language, and except that, under the New Advisory Agreement,
DeAM, Inc., an indirect wholly owned subsidiary of Deutsche Bank, would be the
investment advisor rather than ICCC. See 'Differences Between the Current and
New Advisory Agreements.'
The Advisory Agreements
The Current Advisory Agreements. ICCC currently serves as investment
advisor to each Fund and the Trust (as discussed earlier) pursuant to the
Current Advisory Agreements. The Current Advisory Agreements were initially
approved by the Board, including a majority of the Independent Directors.
Exhibit C to this Proxy Statement lists: (i) the date of each Current
Advisory Agreement; (ii) the most recent date on which each Current Advisory
Agreement was approved by the Company's Directors, including a majority of the
Independent
18
Directors, and by each Fund's shareholders; and (iii) the reason each agreement
was submitted to shareholders for their approval.
The New Advisory Agreements. The form of the New Advisory Agreement for Top
50 US Fund and Japanese Equity Fund is attached to this Proxy Statement at
Exhibit D. The form of the New Advisory Agreement for Global Biotechnology Fund
is attached to this Proxy Statement as Exhibit E. The form of the New Advisory
Agreement for Growth Opportunity Fund is attached to this Proxy Statement as
Exhibit F. The description of the New Advisory Agreements set forth below is
qualified in its entirety by reference to Exhibits D, E and F. If shareholders
approve the New Advisory Agreements, each agreement will remain in effect for
an initial term of two years from its effective date, and may be renewed
annually thereafter only if specifically approved at least annually (a) by the
vote of a majority of those Directors of the Company who are not parties to the
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Directors of
the Company or by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act; see 'Vote Required' ) of the applicable Fund.
The New Advisory Agreements are being proposed as a means to simplify the
organizational structure of Deutsche Bank's US mutual fund operations, enhance
the efficiency of their administration and promote consistency of internal
controls, compliance and regulatory oversight. The New Advisory Agreements are
to be implemented within two years of the date of the Special Meeting, upon
approval of the Company's Board of Directors, including a majority of the
Independent Directors. The deferral in implementing the New Advisory Agreements
may be needed to permit a sufficient amount of time to plan, prepare and
institute the necessary arrangements to consolidate Deutsche Bank's US mutual
fund operations.
Differences Between the Current and New Advisory Agreements. The terms and
conditions -- including the services to be provided and the fees to be paid
therefor -- of the New Advisory Agreements contain substantially similar
provisions and do not differ in substance from the corresponding Current
Advisory Agreements, except for the dates of execution, effectiveness and
initial term, and except that under the New Advisory Agreements, DeAM, Inc., an
indirect wholly owned subsidiary of Deutsche Bank, would be the investment
advisor rather than ICCC. In addition, with respect to Global Biotechnology
Fund and Growth Opportunity Fund, the New Advisory Agreements will authorize
DeAM, Inc. to the extent permissible by law and subject to further Board
approval, to appoint certain of its affiliates as sub-advisors to perform
certain of DeAM, Inc.'s duties. In such cases, DeAM, Inc. would also be
authorized to adjust the duties, the amount of assets to be managed and the
fees paid by DeAM, Inc. to any such affiliated sub-advisors. These affiliated
sub-advisors must be
19
entities that DeAM, Inc. controls, is controlled by, or is under common control
with, and any such appointments are subject to the further approval of the
Independent Directors and the full Board of Directors. Shareholders of the
Funds that are affected by any adjustment would receive prompt notice following
approval by the Independent Directors. The advisory fee rates paid by the Funds
would not increase as a result of any such action; all fees incurred by a
sub-advisor will continue to be the responsibility of DeAM, Inc. DeAM, Inc.
will retain full responsibility for the actions of any such sub-advisor.
Both the Current Advisory Agreement and the New Advisory Agreement for Top
50 US Fund and Japanese Equity Fund permit the investment advisor, ICCC and
DeAM, Inc., respectively, to delegate the performance of advisory services to
another party under certain conditions. The New Advisory Agreement revises this
provision as it applies to the delegation of authority to a company that the
investment advisor controls, is controlled by or under common control with, in
the following ways:
1. The New Advisory Agreement clarifies that DeAM, Inc. may delegate
advisory responsibilities to specified employees of such a company;
2. The New Advisory Agreement provides that a delegation must be approved
in advance by both the Independent Trustees and the full Board of
Trustees of the Trust, whereas the Current Advisory Agreement states
that a delegation must be approved by the Board of Trustees and the
shareholders of the Trust, to the extent required by the 1940 Act;
3. The New Advisory Agreement clarifies that DeAM, Inc. may, with the prior
approval of the Board of Trustees and the Independent Trustees, adjust
the duties of the delegate, the portion of any Funds' assets being
managed by the delegate, and the fees that DeAM, Inc. shall pay to the
delegate; and
4. While both the Current Advisory Agreement and the New Advisory Agreement
require the investment advisor to supervise the activities of any
delegate, the New Advisory Agreement clarifies that any delegation shall
not relieve DeAM, Inc. of any of its obligations under the New Advisory
Agreement.
Unlike the Current Advisory Agreements, the New Advisory Agreements make
explicit that DeAM, Inc. would be permitted to delegate certain advisory duties
to an affiliated sub-advisor. Currently, under limited circumstances, an
advisor may delegate duties to a sub-advisor without obtaining shareholder
approval at the time such delegation is made. Such circumstances include (a)
under Rule 2a-6 of the 1940 Act, where a proposed sub-advisor is under common
control with the advisor, and the same persons involved in the management of
the assets are employed at both the
20
advisor and the sub-advisor; and (b) pursuant to certain interpretations of the
staff of the Securities and Exchange Commission (the 'SEC'), where investment
responsibility is delegated by the advisor to other entities, or employees of
such entities, that are wholly owned subsidiaries of the advisor's parent
company. The New Advisory Agreements would also permit DeAM, Inc. to appoint
certain affiliates as sub-advisors, i.e., entities that DeAM, Inc. controls, is
controlled by, or is under common control with, under circumstances not
currently contemplated by Rule 2a-6 or the aforementioned staff
interpretations. However, DeAM, Inc. will not delegate to a sub-advisor unless
such delegation is then consistent with any amendments to the 1940 Act or the
rules and regulations thereunder or interpretations thereof.
Deutsche Asset Management anticipates that it will seek to utilize the
talents of its employees throughout the world and without regard to the
specific subsidiary of Deutsche Bank that employs such persons. Accordingly,
DeAM, Inc. believes that shareholders could benefit from an authorization
permitting DeAM, Inc. to delegate such functions to affiliated advisory
organizations.
Other provisions of the New Advisory Agreements are substantially similar to
the Current Advisory Agreements. Under the terms of the New Advisory
Agreements, DeAM, Inc. agrees to provide each Fund with investment advisory
services, including the investment and reinvestment of the cash, securities or
other properties comprising the Fund's assets. Subject to the supervision and
control of the Board of Directors, DeAM, Inc. agrees, in carrying out its
obligations, to conform to (a) all applicable provisions of the 1940 Act and
any rules and regulations adopted thereunder, (b) the provisions of the
Company's and Trust's registration statements, (c) the provisions of the
Company's Articles of Incorporation and the Trust's Declaration of Trust, and
(d) any other applicable provisions of state and federal law.
Under the terms of the New Advisory Agreement for Global Biotechnology Fund,
DeAM, Inc. agrees to (a) supervise and manage all aspects of the Fund's
operations, except for distribution services; (b) formulate and implement
continuing programs for the purchases and sales of securities, consistent with
the investment objective and policies of the Fund; (c) provide the Company with
such executive, administrative and clerical services as are deemed advisable by
the Company's Board of Directors; (d) provide the Company with, or obtain for
it, adequate office space and all necessary office equipment and services,
including telephone services, utilities, stationery, supplies and similar items
for the Company's principal office; (e) obtain and evaluate pertinent
information about significant developments and economic, statistical and
financial data, domestic, foreign or otherwise, whether affecting the economy
generally or the Fund; (f) determine which issuers and securities shall be
represented in the Fund's portfolio and regularly report thereon to the
Company's Board of Directors;
21
and (g) take all actions necessary to carry into effect the Fund's purchase and
sale programs.
Under the terms of the New Advisory Agreement for Growth Opportunity Fund,
DeAM, Inc. agrees to (a) supervise and manage all aspects of the Fund's
operations, except for distribution services; (b) formulate and implement
continuing programs for the purchases and sales of securities, consistent with
the investment objective and policies of the Fund; (c) obtain and evaluate
pertinent information about significant developments and economic, statistical
and financial data, domestic, foreign or otherwise, whether affecting the
economy generally or the Fund; (d) determine which issuers and securities shall
be represented in the Fund's portfolio and regularly report thereon to the
Company's Board of Directors; and (e) take all actions necessary to carry into
effect the Fund's purchase and sale programs.
Under the terms of the New Advisory Agreement applicable to Top 50 US Fund
and Japanese Equity Fund, DeAM, Inc. agrees to manage, or appoint an advisor to
manage, the investment operations of the Portfolios and the composition of each
Portfolio's holdings of securities and investments, including cash, the
purchase, retention and disposition thereof and agreements relating thereto, in
accordance with such Portfolio's investment objectives and policies as stated
in the registration statement.
The investment advisory fee rate proposed to be charged to each Fund under
its New Advisory Agreement is the same as the investment advisory fee rate
charged to that Fund under the Current Advisory Agreement. The advisory fee
rate paid to ICCC by each Fund under the Current Advisory Agreements and the
advisory fee paid by each Fund for the most recent fiscal year are set forth in
Exhibit G to this Proxy Statement. Exhibit G also sets forth other fees paid to
ICCC and its affiliates during the last fiscal year of each Fund.
Generally. If approved, the New Advisory Agreements will remain in effect
for an initial term of two years (unless sooner terminated), and shall remain
in effect from year to year thereafter if approved annually (1) by the Board of
Directors or by the holders of a majority of the Fund's outstanding voting
securities and (2) by a majority of the Independent Directors who are not
parties to such contract or agreement. Like the Current Advisory Agreements,
each New Advisory Agreement will terminate upon assignment by any party. The
New Advisory Agreements for Growth Opportunity Fund and Global Biotechnology
Fund are terminable without penalty, on not less than 30 days' nor more than 60
days' written notice by the Board of Directors or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund or upon
90 days' written notice by DeAM, Inc. The New Advisory Agreement for Top 50 US
Fund and Japanese Equity Fund is terminable without penalty on 60 days' written
notice by the Board of Directors or by vote of a majority of
22
the outstanding voting securities (as defined in the 1940 Act) of the Fund or
upon 60 days' written notice by DeAM, Inc.
The services of DeAM, Inc. are not deemed to be exclusive and nothing in the
Current Advisory Agreements or the New Advisory Agreements prevents it or its
affiliates from providing similar services to other investment companies and
their series, and other clients (whether or not their investment objectives and
policies are similar to those of the Funds) or from engaging in other
activities. In addition, DeAM, Inc. is obligated to pay those expenses
specified in the New Advisory Agreements associated with providing the services
contemplated by the New Advisory Agreements. The Funds bear certain other
expenses including the fees of the Company's Board. The Funds also pay any
extraordinary expenses incurred.
Under each New Advisory Agreement, DeAM, Inc. will exercise its best
judgment in rendering its advisory services. DeAM, Inc. will not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which the New Advisory Agreement relates,
provided that nothing therein shall be deemed to protect or purport to protect
DeAM, Inc. against any liability to the Fund or to its shareholders to which
DeAM, Inc. 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 DeAM, Inc.'s reckless disregard of its obligations and duties under
each New Advisory Agreement.
In the event DeAM, Inc. is responsible for this duty, DeAM, Inc. will
allocate and place all orders for portfolio transactions of each Fund's
securities. When it can be done consistently with the policy of obtaining the
most favorable net results, DeAM, Inc. may place such orders with brokers and
dealers who provide market, statistical and other research information to a
Fund or DeAM, Inc. DeAM, Inc. is authorized, under certain circumstances, when
placing portfolio transactions for equity securities to pay a brokerage
commission (to the extent applicable) in excess of that which another broker
might charge for executing the same transaction on account of the receipt of
brokerage or research services. When it can be done consistently with obtaining
best execution, in selecting brokers and dealers with which to place portfolio
transactions for a Fund, DeAM, Inc. may consider its affiliates and also firms
that sell shares of the Funds or other mutual funds advised by DeAM, Inc. or
its affiliates or recommend the purchase of such funds.
Management of the Funds
The Current Advisor. ICCC, located at One South Street, Baltimore, Maryland
21202, currently acts as the investment advisor to the Funds and the
Portfolios. ICCC is registered as an investment advisor with the SEC and serves
as
23
investment advisor to 25 investment companies. As of March 31, 2002, ICCC had
approximately $9.6 billion of assets under management. ICCC also serves as
Administrator to each Fund. ICCC is an indirect wholly owned subsidiary of
Deutsche Bank.
The Proposed New Advisor. DeAM, Inc., an indirect wholly owned subsidiary
of Deutsche Bank, is located at 280 Park Avenue, New York, New York 10017.
DeAM, Inc. is registered with the SEC as an investment advisor and provides a
full range of investment advisory services to institutional and retail clients.
DeAM, Inc. serves as investment advisor to 35 investment companies and
investment sub-advisor to 50 investment companies. The Top 50 US Fund currently
utilizes DeAM, Inc. as its sub-advisor, which will no longer be necessary if
this Proposal is approved. See Exhibit H to this Proxy Statement for a list of
those investment companies that DeAM, Inc. advises that have investment
objectives similar to those of the Funds, together with information regarding
the asset size and the fees charged to those companies. As of April 30, 2002,
DeAM, Inc. had approximately $93.8 billion of assets under management.
The principal occupations of each director and principal executive officer
of DeAM, Inc. are set forth in Exhibit I to this Proxy Statement. The principal
business address of each director and principal executive officer as it relates
to his or her duties at DeAM, Inc., is 280 Park Avenue, New York, New York
10017.
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). It is
engaged in a wide range of financial services, including investment management,
mutual funds, retail, private and commercial banking, investment banking and
insurance. Deutsche Bank has combined all of its investment management
businesses to form Deutsche Asset Management (the marketing name in the US, for
the asset management activities of Deutsche Bank and its subsidiaries).
Directors and Officers. Biographical information about the Director
Nominees and the executive officers of the Company is provided under Proposal I
in this Proxy Statement. Certain other information about the Director Nominees
is provided in Exhibit J to this Proxy Statement.
Recommendation of the Board
At a meeting of the Board of Directors held on March 26, 2002, called for
the purpose of, among other things, voting on approval of the New Advisory
Agreements,
24
the Board, including the Independent Directors, unanimously approved, subject
to shareholder approval, the New Advisory Agreements. In reaching this
conclusion, the Board of Directors obtained such information as they deemed
reasonably necessary to approve DeAM, Inc. as investment advisor to the Funds
and the Portfolios. In approving the New Advisory Agreements, the Independent
Directors considered numerous factors, including, among other things (i) the
standards set forth in written materials previously provided to the Independent
Directors by their counsel and (ii) representations by Fund management that the
change to DeAM, Inc., an affiliate of ICCC, is a matter of administrative
convenience and that no material changes will result with respect to the
services currently provided to each Fund and Portfolio.
In addition, the Board considered the potential benefit to the Funds of
providing DeAM, Inc. more flexibility in structuring portfolio management
services for each Fund. The Board recognized that it may be beneficial to the
Funds to allow DeAM, Inc. to take advantage of the strengths of other entities
within the Deutsche Asset Management organization by permitting DeAM, Inc. to
delegate certain portfolio management services to such entities, and to do so,
to the extent permissible, without incurring the expense of obtaining further
shareholder approval. In addition, the Board considered that (i) any
restructuring of the provision of portfolio management services provided to the
Funds would require the prior approval of a majority of the members of the
Company's Board, including a majority of the Independent Directors; (ii) the
investment advisory expenses incurred by the Funds would not be affected by any
action taken to delegate services to other Deutsche Bank entities or their
employees in reliance on the New Advisory Agreements because any fees paid to a
sub-advisor would be paid by DeAM, Inc. and not by the Funds; and (iii) DeAM,
Inc. will retain full responsibility for the actions of any such sub-advisor.
Based on the factors discussed above, and others, the Board of Directors
determined that the New Advisory Agreements are fair and reasonable and in the
best interest of each Fund and its shareholders. Based on all of the foregoing,
at the meeting on March 26, 2002, the Board of Directors, including the
Independent Directors, voted unanimously to approve the New Advisory Agreements
and to recommend them to the shareholders of the respective Fund for their
approval.
Required Vote
Approval of each New Advisory Agreement requires the affirmative vote of a
'majority of the outstanding voting securities' (as defined in the 1940 Act;
see 'Vote Required') of the relevant Fund.
Therefore, after careful consideration, the Board of Directors, including
the Independent Directors, recommends that the shareholders of the Funds vote
'FOR' the approval of the New Advisory Agreements as set forth in this Proposal.
25
If the New Advisory Agreements are approved by the shareholders, the
agreements are to be implemented within two years of the date of the Special
Meeting. If the New Advisory Agreement for a Fund is not approved by the
shareholders, the Current Advisory Agreement for that Fund will continue in
effect, subject to any requisite approval(s) of the Board of Directors or the
Fund's respective shareholders, and the Board of Directors will consider what
other action is appropriate based upon the interests of the shareholders.
26
PROPOSAL 3A and 3B
APPROVAL OF NEW SUB-ADVISORY AGREEMENTS
Fund management has proposed new sub-advisory agreements (i) among DeAM,
Inc., the Company, on behalf of Global Biotechnology Fund, and DWS
International Portfolio Management GmbH ('DWS'), and (ii) among DeAM, Inc., the
Company, on behalf of Growth Opportunity Fund, and Jennison Associates LLC
('Jennison'). The New Sub-Advisory Agreements with DWS and Jennison were
unanimously approved by the Board of Directors, including the Independent
Directors, at a meeting held on March 26, 2002. A form of the New Sub-Advisory
Agreement for Global Biotechnology Fund is attached hereto as Exhibit K. A form
of the New Sub-Advisory Agreement for Growth Opportunity Fund is attached
hereto as Exhibit L. Fund management has also proposed a new sub-advisory
agreement between DeAM, Inc. and Deutsche Asset Management (Japan) Limited
('DeAMJ') on behalf of Japanese Equity Fund. The New Sub-Advisory Agreement
with DeAMJ was unanimously approved by the Board of Directors, including the
Independent Directors, at a meeting held on June 24, 2002. The Form of New
Sub-Advisory Agreement for Japanese Equity Fund is attached hereto as Exhibit
M. The description of the New Sub-Advisory Agreements set forth below is
qualified in its entirety by reference to Exhibits K, L and M. Each of DWS,
Jennsion and DeAMJ are hereinafter referred to as a Sub-Advisor and
collectively, the Sub-Advisors.
The Current Sub-Advisory Agreements. DWS currently serves as the investment
sub-advisor to Japanese Equity Fund and Global Biotechnology Fund and Jennison
currently serves as investment sub-advisor to Growth Opportunity Fund (as
discussed earlier) pursuant to the Current Sub-Advisory Agreements. The Current
Sub-Advisory Agreements were initially approved by the Board, including a
majority of those Board members who are not 'interested persons' (as defined in
the 1940 Act) of the Fund, ICCC, DWS or Jennison, as applicable (the
'Independent Directors').
Exhibit C to this Proxy Statement lists: (i) the date of the Current
Sub-Advisory Agreements; (ii) the most recent date on which the Current
Sub-Advisory Agreements were approved by the Company's Directors, including a
majority of the Independent Directors, and by each Fund's shareholders; and
(iii) the reason each agreement was submitted to shareholders for their
approval.
The New Sub-Advisory Agreements contain substantially similar provisions and
do not differ in substance from the Current Sub-Advisory Agreements pursuant to
which services are provided to the Funds, except for the dates of execution,
effectiveness and initial term, and the substitution of DeAM, Inc. for ICCC
and, with respect to Japanese Equity Fund, the substitution of DeAMJ for DWS as
the Sub-Advisor. The fee to
27
be paid each of the Sub-Advisors under the proposed New Sub-Advisory Agreements
will be paid by DeAM, Inc. and has no effect on the investment advisory fees
paid by the Funds to ICCC, pursuant to the Current Advisory Agreements, or
proposed to be paid to DeAM, Inc. pursuant to the New Advisory Agreements. In
no case will the sub-advisory fees paid to DWS, Jennison or DeAMJ by DeAM, Inc.
be greater than the advisory fees paid by the applicable Fund to ICCC pursuant
to the Current Advisory Agreements or to DeAM, Inc. pursuant to the proposed
New Advisory Agreements. DeAM, Inc. will remain responsible for the activities
of each of the Sub-Advisors pursuant to the New Sub-Advisory Agreements.
The New Sub-Advisory Agreements
The New Sub-Advisory Agreement applicable to Global Biotechnology Fund
provides that DWS shall (a) provide the Fund with such executive and clerical
services as are deemed advisable by the Fund's Board; (b) determine which
issuers and securities shall be represented in the Fund's portfolio and
regularly report thereon to the Company's Board; (c) formulate and implement
continuing programs for the purchases and sales of securities of such issuers
and regularly report thereon to the Company's Board; (d) take, on behalf of the
Fund, all actions which appear necessary to carry into effect such purchase and
sale programs, including the placing of orders for the purchase and sale of
securities of the Fund; (e) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally or the
Fund; (f) provide the Advisor and the Fund with records concerning the
Sub-Advisor's activities which the Fund is required to maintain; (g) render
regular reports to the Advisor and the Fund's officers and directors concerning
the Sub-Advisor's discharge of its responsibilities; and (h) discharge the
foregoing responsibilities subject to the control of the Board of the Company
and the overall supervision of the Advisor and in compliance with such policies
as the Directors or the Advisor may from time to time establish, subject always
to the provisions of the Company's Articles of Incorporation and By-Laws, and
the 1940 Act, and in compliance with the objectives, policies, and limitations
for the Fund as set forth in the Fund's prospectus and statement of additional
information, as amended from time to time, and applicable laws and regulations.
The New Sub-Advisory Agreement applicable to Japanese Equity Fund provides
that DeAMJ shall manage the investment operations of the Portfolio and the
composition of the Portfolio's holdings of securities and other investments,
including cash, the purchase, retention and disposition thereof and agreements
relating thereto, in accordance with the Portfolio's investment objective and
policies as stated in the registration statement.
28
The New Sub-Advisory Agreement applicable to Growth Opportunity Fund
provides that Jennison shall (a) provide the Fund with such executive and
clerical services as are deemed advisable by the Fund's Board; (b) determine
which issuers and securities shall be represented in the Fund's portfolio and
regularly report thereon to the Company's Board; (c) formulate and implement
continuing programs for the purchases and sales of securities and regularly
report thereon to the Company's Board; (d) take, on behalf of the Fund, all
actions which appear necessary to carry into effect such purchase and sale
programs, including the placing of orders for the purchase and sale of
securities of the Fund; (e) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally or the
Fund; (f) provide the Advisor and the Fund with records concerning the
Sub-Advisor's activities which the Fund is required to maintain; (g) render
regular reports to the Advisor and the Fund's officers and directors concerning
the Sub-Advisor's discharge of its responsibilities; and (h) discharge the
foregoing responsibilities subject to the control of the Board of the Company
and the overall supervision of the Advisor and in compliance with such policies
as the Directors or the Advisor may from time to time establish, subject always
to the provisions of the Company's Articles of Incorporation and By-Laws, and
the 1940 Act, and in compliance with the objectives, policies, and limitations
for the Fund as set forth in the Fund's prospectus and statement of additional
information, as amended from time to time, and applicable laws and regulations.
As noted above, the sub-advisory fees payable under the New Sub-Advisory
Agreements would be paid by DeAM, Inc., not the Funds, and will be set, and may
vary from time to time thereafter, subject to the approval of the Board of
Directors, including a majority of the Independent Directors. The sub-advisory
fees paid by ICCC, on behalf of each Fund, under the Current Sub-Advisory
Agreements for the most recent fiscal year are set forth in Exhibit G to this
Proxy Statement.
Each New Sub-Advisory Agreement further provides that the Sub-Advisor shall
not be liable for any act or omission in the course of, connected with or
arising out of any services to be rendered under the New Sub-Advisory
Agreement, except by reason of willful misfeasance, bad faith or gross
negligence on the part of the Sub-Advisor in the performance of its duties or
from reckless disregard by the Sub-Advisor of its obligations and duties under
the New Sub-Advisory Agreement.
If approved, each New Sub-Advisory Agreement will remain in effect for an
initial term of two years, and shall remain in effect from year to year
thereafter if approved annually (a) by the Board of Directors or by the vote of
a majority of the Fund's outstanding voting securities and (b) by the
affirmative vote of a majority of the Independent Directors who are not parties
to such contract or agreement. The New Sub-Advisory Agreements for Global
Biotechnology Fund and Growth Oppor-
29
tunity Fund are terminable without penalty, on not less than 30 days' nor more
than 60 days' written notice by the Board of Directors, DeAM, Inc. or by vote
of a majority of the outstanding voting securities (as defined in the 1940 Act)
of the Fund or upon 60 days' written notice by the Sub-Advisor. The New
Sub-Advisory Agreement for Japanese Equity Fund is terminable without penalty
on 60 days' written notice by the Board of Directors, DeAM, Inc. or by vote of
a majority of the outstanding voting securities (as defined in the 1940 Act) of
the Fund or upon 60 days' written notice by the Sub-Advisor. Like the Current
Sub-Advisory Agreements, each New Advisory Agreement automatically terminates
in the event of the termination of the Fund's Advisory Agreement or in the
event of its assignment.
The New Sub-Advisory Agreements are being proposed as a means to simplify
the organizational structure of Deutsche Bank's US mutual fund operations,
enhance the efficiency of their administration and promote consistency of
internal controls, compliance and regulatory oversight. The New Sub-Advisory
Agreements for Global Biotechnology Fund and Growth Opportunity Fund are to be
implemented within two years of the date of the Special Meeting upon approval
of the Company's Directors, including a majority of the Independent Directors.
The deferral in implementing the New Sub-Advisory Agreements may be needed to
permit a sufficient amount of time to plan, prepare and institute the necessary
arrangements to consolidate Deutsche Bank's US mutual fund operations. The
implementation of the Sub-Advisory Agreement for Japanese Equity Fund will
occur upon approval of the Company's Board of Directors, including a majority
of the Independent Directors. Implementation of the New Sub-Advisory Agreement
for a Fund is contingent upon shareholder approval of Proposal 2 for that Fund.
Information about DWS
DWS, Grueneburgweg 113-115, Frankfurt, Germany 60323, is a company organized
under the laws of the Federal Republic of Germany. DWS is a direct wholly owned
subsidiary of Deutsche Asset Management Europe GmbH, an indirect wholly owned
subsidiary of Deutsche Bank and an affiliate of ICCC and DeAM, Inc. DWS and its
affiliates together had approximately $134.7 billion under management as of May
31, 2002.
The principal occupations of each director and principal executive officer
of DWS are set forth in Exhibit N to this Proxy Statement. The principal
business address of each director and principal executive officer, as it
relates to his or her duties at DWS is Grueneburgweg 113-115, Frankfurt,
Germany 60323. No Directors or officers of Global Biotechnology Fund are
employees, officers, directors or shareholders of DWS.
30
Exhibit O sets forth the fees and other information regarding investment
companies advised or sub-advised by DWS that have similar investment objectives
to the Fund.
Information about Jennison
Jennison Associates LLC is located at 466 Lexington Avenue, New York, New
York 10017. Jennison is a Delaware limited liability company. Jennison has
approximately $60.7 billion under management as of March 31, 2002. Jennison is
a direct wholly owned subsidiary of Prudential Investment Management, Inc.
(formerly known as the Prudential Investment Corporation), Gateway Center Two,
McCarter Highway and Market Street, Newark, New Jersey 07102.
The principal occupations of each director and principal executive officer
of Jennison are set forth in Exhibit N to this Proxy Statement. The principal
business address of each director and principal executive officer, as it
relates to his or her duties at Jennison is 466 Lexington Avenue, New York, New
York 10017. No Directors or officers of Growth Opportunity Fund are employees,
officers, directors or shareholders of Jennison.
Exhibit O sets forth the fees and other information regarding investment
companies advised or sub-advised by Jennison that have similar investment
objectives to Growth Opportunity Fund.
Information about DeAMJ
DeAMJ is located at Sanno Park Tower, 2-11-1, Nagata-Cho, Chiyoda-Ku, Tokyo,
Japan 100-6173. DeAMJ is a corporation organized under the laws of Japan. DeAMJ
is a direct wholly-owned subsidiary of Deutsche Bank and an affiliate of ICCC
and DeAM, Inc. DeAMJ and its affiliates together had approximately $11 billion
under management as of May 1, 2002.
The principal occupations of each director and principal executive officer
of DeAMJ are set forth in Exhibit N to this Proxy Statement. The principal
business address of each director and principal executive officer, as it
relates to his or her duties at DeAMJ is Sanno Park Tower, 2-11-1, Nagata-Cho,
Chiyoda-Ku, Tokyo, Japan 100-6173. No Directors or officers of Japanese Equity
Fund are employees, officers, directors or shareholders of DeAMJ.
Exhibit O sets forth the fees and other information regarding investment
companies advised or sub-advised by DeAMJ that have similar investment
objectives to Japanese Equity Fund.
31
Each Sub-Advisor, under the supervision of DeAM, Inc., will allocate and
place all orders for portfolio transactions of a Fund's securities. When it can
be done consistently with the policy of obtaining the most favorable net
results, the Sub-Advisor may place such orders with brokers and dealers who
provide market, statistical and other research information to the Fund or the
Sub-Advisor. The Sub-Advisor is authorized, under certain circumstances, when
placing portfolio transactions for equity securities to pay a brokerage
commission (to the extent applicable) in excess of that which another broker
might charge for executing the same transaction on account of the receipt of
brokerage or research services. When it can be done consistently with obtaining
best execution, in selecting brokers and dealers with which to place portfolio
transactions for the Fund, the Sub-Advisor may consider its affiliates or
affiliates of DeAM, Inc. and also firms that sell shares of mutual funds
advised by the Sub-Advisor or DeAM, Inc. or its affiliates or recommend the
purchase of such funds. Allocation of portfolio transactions will be supervised
by DeAM, Inc.
Recommendation of the Board
At a meeting of the Board of Directors held on March 26, 2002, called for
the purpose of, among other things, voting on the New Sub-Advisory Agreements,
the Board, including the Independent Directors, unanimously approved, subject
to shareholder approval, the New Sub-Advisory Agreements for Global
Biotechnology Fund and Growth Opportunity Fund. The Independent Directors
obtained such information as they deemed reasonably necessary to evaluate the
proposal. In approving the New Sub-Advisory Agreements, the Board, including
the Independent Directors, considered numerous factors, including, among other
things (i) the standards set forth in written materials previously provided to
the Independent Directors by their counsel and (ii) representations by Fund
management that the change to DeAM, Inc., an affiliate of ICCC, is a matter of
administrative convenience and that no material changes will result with
respect to the services currently provided to each Fund and Portfolio.
Furthermore, the Board considered that approval of the New Sub-Advisory
Agreements would not affect the advisory fees paid by the Funds, and that DeAM,
Inc. would remain fully responsible for DWS and Jennison's actions under the
New Sub-Advisory Agreements.
At a meeting of the Board of Directors held on June 24, 2002, called for the
purpose of, among other things, voting on the New Sub-Advisory Agreement, the
Board, including the Independent Directors, unanimously approved, subject to
shareholder approval, the New Sub-Advisory Agreement for the Japanese Equity
Fund. The Independent Directors obtained such information as they deemed
reasonably necessary to evaluate the proposal. In approving the New
Sub-Advisory Agreement, the Board, including the Independent Directors,
considered numerous factors, including, among other things (i) the standards
set forth in written materials pre-
32
viously provided to the Independent Directors by their counsel, (ii)
information provided by Fund management concerning DeAMJ's experience in
managing investments in Japanese equity securities for funds having similar
investment objectives and policies, that the change to DeAM, Inc., an affiliate
of ICCC, is a matter of administrative convenience and the nature and quality
of the services provided to the Japanese Equity Fund will not change, and (iii)
representations of Fund management that the change to DeAMJ, an affiliate of
ICCC and DeAM, Inc., will not result in any material changes with respect to
the nature or the quality of services provided to the Fund. Furthermore, the
Board considered that approval of the New Sub-Advisory Agreement would not
affect the advisory fees paid by the Fund, and that DeAM, Inc. would be fully
responsible for DeAMJ's actions under the New Sub-Advisory Agreement.
Based on the factors discussed above, and others, the Board of Directors
determined that the New Sub-Advisory Agreements are fair and reasonable and in
the best interest of the relevant Fund and its shareholders. Based on all of
the foregoing, at meetings on March 26, 2002 and June 24, 2002, respectively,
the Board of Directors, including the Independent Directors, voted unanimously
to approve the New Sub-Advisory Agreements and to recommend them to the
shareholders of the respective Fund for their approval.
Required Vote
Approval of each Sub-Advisory Agreement requires the affirmative vote of a
'majority of the outstanding voting securities' (as defined in the 1940 Act;
see 'Vote Required') of the relevant Fund.
Therefore, after careful consideration, the Board of Directors, including
its Independent Directors, recommends that the shareholders of each Fund vote
'FOR' the approval of the New Sub-Advisory Agreement as set forth in this
Proposal.
If the New Sub-Advisory Agreements are approved by the shareholders, the
agreements for Global Biotechnology Fund and Growth Opportunity Fund are to be
implemented within two years of the date of the Special Meeting and the
agreement for Japanese Equity Fund will be implemented upon approval of the
Board of Directors, including a majority of the Independent Directors. If the
New Sub-Advisory Agreement for a Fund is not approved by the shareholders, the
Current Sub-Advisory Agreement for that Fund will continue in effect and the
Board of Directors will consider what other action is appropriate based upon
the interests of the shareholders. Implementation of Proposal 3A or Proposal 3B
for a Fund is contingent upon the approval of Proposal 2A or Proposal 2B, as
appropriate, (the New Advisory Agreement)
33
by the shareholders of that Fund. If shareholders of a Fund do not approve
Proposal 2A or Proposal 2B, but approve Proposal 3A or Proposal 3B, the Current
Advisory and Sub-Advisory Agreements will remain in effect and the Board of
Directors will consider what other action is appropriate based upon the
interests of the shareholders.
34
INFORMATION CONCERNING INDEPENDENT AUDITORS
The Company's financial statements for the Funds' most recent fiscal years
were audited by PricewaterhouseCoopers LLP ('PwC'), independent auditors. In
addition, PwC prepares the Company's federal and state annual income tax
returns and provides certain non-audit services to the Company. During the
Board's most recent consideration of the selection of auditors for the Funds,
the Board considered whether the provision of non-audit services to the Company
was compatible with maintaining PwC's independence. The Board of Directors has
selected PwC as the independent auditors for the Funds' fiscal year ending
2002. PwC has been the Company's independent auditors since inception of each
Fund. PwC has informed the Company that it has no material direct or indirect
financial interest in the Funds.
Representatives of PwC are not expected to be present at the Special Meeting
but have been given the opportunity to make a statement if they so desire and
will be available should any matter arise requiring their presence.
Audit Fees. The aggregate fees billed by PwC for professional services
rendered for the audit of the Funds'/Portfolios' annual financial statements
for the most recent fiscal year and the review of the financial statements
included in the Funds'/Portfolios' reports to shareholders were $118,600.
Financial Information Systems Design and Implementation Fees. There were no
fees billed by PwC for the most recent fiscal year ended August 31, 2001 and
September 30, 2001 for professional services rendered for financial information
systems design and implementation services provided to the Company/Trust, ICCC
or entities that control, are controlled by or are under common control with
ICCC that provide services to the Company/Trust.
All Other Fees. There were $2,855,400 in fees billed by PwC for the most
recent fiscal year for other services provided to the Company/Trust, ICCC, and
entities that control, are controlled by or are under common control with ICCC
that provide services to the Company/Trust.
OTHER INFORMATION
Portfolio Transactions
For the fiscal year ended September 30, 2001, Growth Opportunity Fund paid
commissions to Deutsche Bank Securities Inc. and its affiliates, an affiliated
broker, in the aggregate amount of $544.50, which represented 3.28% of the
total amount of brokerage commissions paid during the period.
35
For the fiscal year ended August 31, 2001, the Portfolios paid $782 in
brokerage commissions to Deutsche Bank London, an affiliated broker, which
represents 0.15% of the aggregate brokerage commissions paid.
For the fiscal year ended August 31, 2001, the Portfolios paid $465 in
brokerage commissions to Deutsche Bank Frankfurt, an affiliated broker, which
represents 0.09% of the aggregate brokerage commissions paid.
For the fiscal year ended August 31, 2001, the Portfolios paid $2,913 in
brokerage commissions to Deutsche Bank - New York, which represents 0.58% of
the aggregate brokerage commissions paid.
For the fiscal year ended August 31, 2001, the Portfolios paid $402 in
brokerage commissions to Deutsche Bank Securities Limited - Tokyo, Japan, an
affiliated broker, which represents 0.08% of the aggregate brokerage
commissions paid.
For the fiscal year ended August 31, 2001, the Portfolios paid $52 in
brokerage commissions to DB Clearing Services, an affiliated broker, which
represents 0.01% of the aggregate brokerage commissions paid.
Principal Underwriter
The Funds' principal underwriter is ICC Distributors, Inc. ICC Distributors,
Inc. is located at Two Portland Square, Portland, Maine 04104.
36
VOTE REQUIRED
Approval of Proposal 1 requires the affirmative vote of a 'majority of the
outstanding voting securities' (as defined in the 1940 Act) of the Company (all
Funds voting collectively). Approval of Proposals 2A, 2B, 3A and 3B requires
the affirmative vote of a 'majority of the outstanding voting securities' (as
defined in the 1940 Act) of a Fund. 'Majority of the outstanding voting
securities' (as defined in the 1940 Act) means (as of the Record Date) the
lesser of (a) 67% or more of the shares of a 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 each Proposal because each requires the approval of
a specified percentage of the outstanding voting securities of the Company or a
Fund.
THE BOARD, INCLUDING THE INDEPENDENT DIRECTORS, RECOMMEND THAT THE
SHAREHOLDERS VOTE 'FOR' APPROVAL OF PROPOSALS 1, 2A, 2B, 3A AND 3B, AS
APPLICABLE. 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 Company 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 Company 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
Company'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 Company's outstanding voting
securities (as defined in the 1940 Act) may require the calling of a meeting of
share-
37
holders for the purpose of voting on the removal of any Director of the
Company. Meetings of shareholders for any other purpose also shall be called by
the Board of Directors when requested in writing by shareholders holding at
least 25% of the shares then outstanding.
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 1-866-474-6829.
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 Directors,
/s/ Daniel O. Hirsch
Daniel O. Hirsch, Assistant Secretary
July 9, 2002
THE BOARD OF DIRECTORS OF THE COMPANY HOPES THAT SHAREHOLDERS WILL ATTEND THE
SPECIAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE,
DATE, SIGN AND RETURN EACH ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE (OR
FOLLOW THE INSTRUCTIONS FOR VOTING BY TELEPHONE OR THROUGH THE INTERNET ON THE
ENCLOSED PROXY).
38
Exhibit A
SHARES OUTSTANDING AS OF RECORD DATE
Number of
Shares
Fund Outstanding
----------------------------------------
Top 50 US Fund
----------------------------------------
Class A Shares 1,469,461.6480
----------------------------------------
Class B Shares 263,923.6350
----------------------------------------
Class C Shares 30,752.1920
----------------------------------------
Japanese Equity Fund
----------------------------------------
Class A Shares 74,369.1020
----------------------------------------
Class B Shares 230,999.3000
----------------------------------------
Class C Shares 12,990.3130
----------------------------------------
Global Biotechnology Fund
----------------------------------------
Class A Shares 502,258.1420
----------------------------------------
Class B Shares 43,736.5420
----------------------------------------
Class C Shares 35,459.3410
----------------------------------------
Growth Opportunity Fund
----------------------------------------
Class A Shares 409,801.0690
----------------------------------------
Class B Shares 82,655.3410
----------------------------------------
Class C Shares 50,652.4160
A-1
Exhibit B
5% Shareholders*
- ------------------------------------------- ------------------- ---------------------
TOP 50 US FUND--CLASS A SHARES:
- ------------------------------------------- ------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
- ------------------------------------------- ------------------- ---------------------
Fidelity Investments Institutional 192,048.28 13.07%
Operations CO, Inc. (FIIOC)
As Agent For Certain Employee Benefit Plans
100 Magaellan Way
KW1C
Covington, KY 41015-1999
Deutsche Bank Trust Company Americas 130,595.34 8.89%
FBO 2591854040
PO Box 9005
Church Street Station
NewYork, NY 10007
TOP 50 US FUND--CLASS B SHARES:
- ------------------------------------------- ------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
- ------------------------------------------- ------------------- ---------------------
Merrill Lynch Pierce Fenner & Smith 23,342.99 8.84%
For The Sole Benefit Of Its Cust
Attention: Fund Administration Team
4800 Deer Lake Drive E
3rd Floor
Jacksonville, FL 32246-6484
TOP 50 US FUND--CLASS C SHARES:
- ------------------------------------------- ------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
- ------------------------------------------- ------------------- ---------------------
First Clearing Corporation 11,215.56 36.47%
Account 8400-8806
Katharine B Winn JTWROS
741 Woodlands Road
Charlottesville, VA 22901-5506
LPL Financial Services 4,810.96 15.64%
A/C 6489-5183 9785
Towne Centre Drive
San Diego, CA 92121-1968
Merrill Lynch Pierce Fenner & Smith 4,258.95 13.85%
For The Sole Benefit Of Its Cust
Attention: Fund Administration Team
4800 Deer Lake Drive E
3rd Floor
Jacksonville, FL 32246-6484
NFSC 1,990.45 6.47%
FEBO # X94-264288
Cozett Y Nguyen
9340 Boothwyn Way
Elk Grove, CA 95758-7635
* The Directors, the Director Nominees, and the executive officers of the
Company as a group own less than 1% of each class of the Fund's outstanding
shares.
B-1
5% Shareholders*
----------------------------------- ------------------- ---------------------
JAPANESE EQUITY FUND--CLASS A SHARES:
------------------------------------------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
----------------------------------- ------------------- ---------------------
Atwell & Co. 23,069.22 31.02%
FBO East Coast Realty
C/O US Trust Company of NY
Peck Slip Station
PO Box 2044
New York, NY 10008-2044
Merrill Lynch Pierce Fenner & Smith 22,987.82 30.91%
For The Sole Benefit Of Its Cust
Attention: Fund Administration Team
4800 Deer Lake Drive E
3rd Floor
Jacksonville, FL 32246-6484
M Gottlieb Associates Inc. 4,493.83 6.04%
6009 N Milwaukee Ave.
Chicago, IL 60646-4797
JAPANESE EQUITY FUND--CLASS B SHARES:
------------------------------------------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
----------------------------------- ------------------- ---------------------
Merrill Lynch Pierce Fenner & Smith 190,089.85 81.60%
For The Sole Benefit Of Its Cust
Attention: Fund Administration Team
4800 Deer Lake Drive E
3rd Floor
Jacksonville, FL 32246-6484
B-2
JAPANESE EQUITY FUND--CLASS C SHARES:
------------------------------------------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
----------------------------------- ------------------- ---------------------
Investment Company Capital Corp. 5,845.41 45.00%
Attn: Julie Thomas
MS BAL01-1602
1 South Street
Baltimore, MD 21202-3298
Deutsche Bank Securities Inc. 4,437.54 34.16%
FBO 231-77676-28
PO Box 1346
Baltimore, MD 21203
National Investor Services 1,280.96 9.86%
FBO 442-30019-18 55
Water Street Fl 32
New York, NY 10041-0028
Merrill Lynch Pierce Fenner & Smith 1,015.46 7.82%
Mutual Fund Operations
Attn Transfer Supervisor
4800 Deer Lake Dr E Fl 3
Jacksonville, FL 32246-6484
* The Directors, the Director Nominees, and the executive officers of the
Company as a group own less than 1% of each class of the Fund's outstanding
shares.
B-3
5% Shareholders*
- ------------------------------------- ------------------- ---------------------
GLOBAL BIOTECHNOLOGY FUND--CLASS A SHARES:
- --------------------------------------------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
- ------------------------------------- ------------------- ---------------------
DWS Investment GmbH 450,000.00 89.61%
Attn: Reinhold Volk
Grueneburgweg 113-115
Frankfurt, Germany 60323
GLOBAL BIOTECHNOLOGY FUND--CLASS B SHARES:
- --------------------------------------------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
- ------------------------------------- ------------------- ---------------------
DWS Investment GmbH 25,000.00 55.37%
Attn: Reinhold Volk
Grueneburgweg 113-115
Frankfurt, Germany 60323
GLOBAL BIOTECHNOLOGY FUND--CLASS C SHARES:
- --------------------------------------------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
- ------------------------------------- ------------------- ---------------------
DWS Investment GmbH 25,000.00 70.50%
Attn: Reinhold Volk
Grueneburgweg 113-115
Frankfurt, Germany 60323
Merrill Lynch Pierce Fenner & Smith 5,379.66 15.17%
For The Sole Benefit Of Its Customers
4800 Deer Lake Drive E
3rd Floor
Jacksonville, FL 32246-6484
* The Directors, the Director Nominees, and the executive officers of the
Company as a group own less than 1% of each class of the Fund's outstanding
shares.
B-4
5% Shareholders*
------------------------------------ ------------------- ---------------------
GROWTH OPPORTUNITY FUND--CLASS A SHARES:
-------------------------------------------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
------------------------------------ ------------------- ---------------------
Deutsche Asset Management, Inc. 400,000.00 97.61%
280 Park Avenue
New York, NY 10017
GROWTH OPPORTUNITY FUND--CLASS B SHARES:
-------------------------------------------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
------------------------------------ ------------------- ---------------------
Deutsche Asset Management, Inc. 50,000.00 60.49%
280 Park Avenue
New York, NY 10017
Rahel Hagopian & Tim Hagopian JTWROS 5,465.30 6.61%
30 Harborpoint Blvd. # 405
Boston, MA 02125-3210
GROWTH OPPORTUNITY FUND--CLASS C SHARES:
-------------------------------------------------------- ---------------------
Name and Address Shares Beneficially Percent Ownership
of Beneficial Owner Owned of Outstanding Shares
------------------------------------ ------------------- ---------------------
Deutsche Asset Management, Inc. 50,000.00 98.71%
280 Park Avenue
New York, NY 10017
* The Directors, the Director Nominees, and the executive officers of the
Company as a group own less than 1% of each class of the Fund's outstanding
shares.
B-5
Exhibit C
- -------------------------------------------------------------------------------------------------------------
Date Last Approved By Fund's
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Date of Current Advisory
Fund (Fiscal Year End) Agreement Directors Shareholders
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Top 50 US Fund (8/31) May 7, 2001 June 25, 2002 March 28, 2000*
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Japanese Equity
Fund (8/31) May 7, 2001 June 25, 2002 March 28, 2000*
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Global Biotechnology Fund
(8/31) March 28, 2001 June 25, 2002 March 28, 2001**
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Growth Opportunity Fund
(9/30) March 28, 2001 June 25, 2002 March 28, 2001**
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Date Last Approved By Fund's
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Date of Current
Fund (Fiscal Year End) Sub-Advisory Agreement Directors Shareholders
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Japanese Equity Fund
(8/31) May 7, 2001 June 25, 2002 March 28, 2000*
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Global Biotechnology Fund
(8/31) March 28, 2001 June 25, 2002 March 28, 2001**
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Growth Opportunity Fund
(9/30) March 28, 2001 June 25, 2002 March 28, 2001**
- -------------------------------------------------------------------------------------------------------------
- --------
* Submitted for shareholder vote in order to simplify the organizational
structure of Deutsche Bank's US mutual fund operations, enhance the
efficiency of their administration and promote consistency of internal
controls, compliance and regulatory oversight as a result of the merger
with Bankers Trust Corporation.
** Approved by the sole shareholder.
C-1
Exhibit D
DEUTSCHE INVESTORS PORTFOLIOS TRUST
FORM OF INVESTMENT ADVISORY AGREEMENT
Agreement, made as of , , between DEUTSCHE INVESTORS
PORTFOLIOS TRUST, a trust organized under New York law (the 'Trust'), and
DEUTSCHE ASSET MANAGEMENT, INC., a Delaware corporation (the 'Investment
Advisor'), registered as an investment advisor under the Investment Advisers
Act of 1940 (the 'Advisers Act').
W I T N E S S E T H:
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the '1940 Act'), and
consists on the date hereof of the two sub-trusts listed on Schedule A to this
Agreement (each such sub-trust, together with each other sub-trust of the Trust
hereafter established by the Board of Trustees of the Trust (the 'Board of
Trustees') and made subject to this Agreement in accordance with Section 13
hereof, individually a 'Portfolio' and, collectively, the 'Portfolios'); and
WHEREAS, the Board of Trustees desires to retain the Investment Advisor to
render various investment management services to each Portfolio, and the
Investment Advisor is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Trust hereby appoints the Investment Advisor to act as investment
manager to each of the Portfolios for the period and the terms set forth in
this Agreement, with the understanding that it may appoint an advisor to
perform certain services relating to the management of the investment
operations of the Portfolios as set forth in Section 4. The Investment Advisor
accepts such appointment and agrees to render or provide the services herein
set forth, for the compensation herein provided as set forth in Schedule A.
2. The activities of the Investment Advisor or any advisor appointed
hereunder shall at all times be subject to the supervision of the Board of
Trustees.
3. The Investment Advisor shall manage, or appoint an advisor to manage,
the investment operations of the Portfolios and the composition of each
Portfolio's hold-
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ings of securities and investments, including cash, the purchase, retention and
disposition thereof and agreements relating thereto, in accordance with such
Portfolio's investment objectives and policies as stated in the Registration
Statement (as defined in paragraph 6(d) of this Agreement). The Investment
Advisor, or in case it appoints an advisor, such advisor, shall perform such
services (the person performing such services being referred to herein as the
'Sub-Advisor') subject to the following understandings:
(a) The Sub-Advisor in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Declaration of Trust
and By-Laws of the Trust and the Registration Statement and with the
instructions and directions of the Board of Trustees, and will conform
to and comply with the requirements of the 1940 Act and all other
applicable federal and state laws and regulations;
(b) the Sub-Advisor shall use the same skill and care in the management of
each Portfolio's investments as it uses in the administration of other
accounts for which it has investment responsibility as agent;
(c) the Sub-Advisor shall determine the securities or other investments to
be purchased, sold or lent by each Portfolio and as agent for each
Portfolio will effect portfolio transactions pursuant to its
determinations either directly with the issuer or with any broker and/or
dealer in such securities, including a broker affiliated with the
Sub-Advisor; in placing orders with brokers and/or dealers the
Sub-Advisor intends to seek best price and execution for purchases and
sales; the Sub-Advisor shall also determine whether or not a Portfolio
shall enter into repurchase or reverse repurchase agreements;
On occasions when the Sub-Advisor deems the purchase or sale of a
security or other investment to be in the best interest of a Portfolio as
well as other customers of the Sub-Advisor, the Sub-Advisor may, to the
extent permitted by applicable laws and regulations, but shall not be
obligated to, aggregate the securities to be so sold or purchased on behalf
of such Portfolio and such other customer of the Sub-Advisor in order to
obtain best execution, including lower brokerage commissions, if applicable.
In such event, allocation of the securities so purchased or sold, as well as
the expenses incurred in the transaction, will be made by the Sub-Advisor in
the manner it considers to be the most equitable and consistent with its
fiduciary obligations to a Portfolio;
(d) the Sub-Advisor shall maintain a set of books and records with respect
to each Portfolio's securities and other investment transactions as
required by the Advisers Act and other applicable laws and regulations
and shall render to the Board of Trustees such periodic and special
reports as the Board of Trustees may reasonably request; and
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(e) the services of the Sub-Advisor to the Trust under this Agreement are
not to be deemed exclusive, and the Sub-Advisor shall be free to render
similar services to others.
4. The Investment Advisor is authorized to appoint an unaffiliated
investment advisor to carry out the aforementioned investment operations of
each Portfolio, as Sub-Advisor, on the above terms pursuant to an investment
advisory contract conforming to the requirements of the 1940 Act and subject to
approval of the Board of Trustees and the holders of beneficial interests in
the Trust as required by the 1940 Act. Any such investment advisory contract
shall provide that the Sub-Advisor is not authorized to make any business,
operational or management decisions on behalf of the Trust or any Portfolio
other than with respect to the investment operations and composition of a
Portfolio's holdings of securities and other investments as set forth herein.
The compensation of any such Sub-Advisor will be paid by the Investment Advisor.
Subject to the prior approval of a majority of the members of the Board of
Trustees, including a majority of the Trustees who are not 'interested
persons,' as defined in the 1940 Act, the Investment Advisor may, through a
sub-advisory agreement or other arrangement, delegate to any other company that
the Investment Advisor controls, is controlled by, or is under common control
with, or to specified employees of any such companies, or to more than one such
company, to the extent permitted by applicable law, certain of the Investment
Advisor's duties enumerated in Section 3 hereof, and may adjust the duties of
such entity, the portion of portfolio assets of the Portfolio that such entity
shall manage and the fees to be paid to such entity, subject to the prior
approval of the members of the Board of Trustees who are not 'interested
persons,' as defined in the 1940 Act; provided, that the Investment Advisor
shall continue to supervise the services provided by such company or employees
and any such delegation shall not relieve the Investment Advisor of any of its
obligations hereunder.
The Investment Advisor may, but shall not be under any duty to, perform
services on behalf of any Portfolio which are not required by this Agreement
upon the request of the Board of Trustees. Such services will be performed on
behalf of such Portfolio and the Investment Advisor's charge in rendering such
services may be billed monthly to the Trust, subject to examination by the
Trust's independent accountants. Payment or assumption by the Investment
Advisor of any Trust expense that the Investment Advisor is not required to pay
or assume under this Agreement shall not relieve the Investment Advisor of any
of its obligations to such Portfolio nor obligate the Investment Advisor to pay
or assume any similar Portfolio's expenses on any subsequent occasions.
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5. The Investment Advisor shall also provide certain supervisory and
administrative services to the Trust, including:
(a) negotiating, maintaining, evaluating and coordinating contractual
arrangements with third-party service providers, including, but not
limited to, administrators, custodians, transfer agents, fund accounting
agents, independent accountants, attorneys, printers and insurers;
(b) assisting the various third-party service providers retained by or for
the Trust by, among other things, providing any information to such
service providers as the Board of Trustees deem appropriate, including
information concerning Portfolio performance and administration;
(c) reviewing agendas for and minutes of meetings of the Board of Trustees
and committees of the Board of Trustees; and preparing such supporting
documents for such meetings as the Board of Trustees may request the
Investment Advisor to prepare;
(d) arranging, if desired by the Trust, for directors, officers or employees
of the Investment Advisor to serve as Trustees, officers or agents of
the Trust if duly elected or appointed to such positions and subject to
their individual consent and to any limitations imposed by law; and
(e) reviewing all registration statements, amendments thereto and other
documents as may be required for compliance by the Trust and each
Portfolio with all applicable laws and regulations and preparing such
portions thereof as the Board of Trustees may request the Investment
Advisor to prepare.
Notwithstanding the foregoing, the Investment Advisor shall not be deemed to
have assumed any duties under this Agreement with respect to, and shall not be
responsible for, functions specifically assumed by any administrator, fund
accounting agent, custodian, private placement agent or transfer agent of the
Trust. As to any of the services contemplated by this Section 5 to be provided
by the Investment Advisor, it may instead retain a third party to perform those
services on its behalf and expense, subject to its supervision of such third
party.
6. The Trust has delivered copies of each of the following documents to the
Investment Advisor and will promptly notify and deliver to it all future
amendments and supplements, if any:
(a) Declaration of Trust of the Trust (such Declaration of Trust, as
presently in effect and as amended from time to time, is herein called
the 'Declaration of Trust');
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(b) By-Laws of the Trust (such By-Laws, as presently in effect and as
amended from time to time, are herein called the 'By-Laws');
(c) Certified resolutions of the Board of Trustees authorizing the
appointment of the Investment Advisor and approving the form of this
Agreement;
(d) The Trust's Notification of Registration on Form N-8A under the 1940
Act, its Registration Statement on Form N-1A under the 1940 Act (File
No. 811-8375) and the Registration Statement on Form N-1A of Deutsche
Investors Funds, Inc. (File No. 333-07008) under the Securities Act of
1933, as amended, and the 1940 Act, as filed with the Securities and
Exchange Commission (the 'Commission') on May 23, 1997, including all
amendments thereto (together with the Registration Statement of the
Trust, the 'Registration Statement').
7. The Sub-Advisor shall keep the books and records required to be
maintained by it pursuant to paragraph 3(e). The Investment Advisor agrees that
all records which it maintains for the Trust are the property of the Trust and
it will promptly surrender any of such records to the Trust upon request. The
Sub-Advisor further agrees to preserve for the periods prescribed by Rule 31a-2
of the Commission under the 1940 Act any such records as are required to be
maintained by the Sub-Advisor with respect to the Portfolios by Rule 31a-2 of
the Commission under the 1940 Act.
8. During the term of this Agreement the Investment Advisor will pay all
expenses, including personnel costs and overhead, incurred by it in connection
with the performance of its obligations under this Agreement other than the
cost of securities and investments purchased for each Portfolio (including
taxes and brokerage commissions, if any) and extraordinary expenses and shall
pay the salaries of Trustees and officers of the Trust who are affiliated
persons (as defined in the 1940 Act) of the Investment Advisor. The Investment
Advisor shall not be required to pay expenses of any activity which is intended
primarily to result in sales of shares of the Portfolios.
9. For the services provided and the expenses borne pursuant to this
Agreement, each Portfolio will pay to the Investment Advisor as full
compensation therefor, a fee, computed daily and paid monthly in arrears, at an
annual rate equal to the percentage of the average daily net assets of such
Portfolio specified in Schedule A hereto.
10. The Investment Advisor shall not be liable for any error of judgment or
mistake of law or for any loss or expense suffered by the Trust or any
Portfolio in connection with the matters to which this Agreement relates,
except a loss or expense
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resulting from willful misfeasance, bad faith or gross negligence on its part
in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
11. This Agreement shall continue in effect until the date two years after
its execution and shall continue in effect from year to year thereafter with
respect to each Portfolio if such continuance is specifically approved at least
annually in conformity with the requirements of the 1940 Act; provided,
however, that this Agreement may be terminated by the Trust in its entirety or
with respect to any Portfolio, at any time, without the payment of any penalty,
by vote of a majority of the Board of Trustees or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Trust or such
Portfolio, as the case may be, on 60 days' written notice to the Investment
Advisor, or by the Investment Advisor at any time, without the payment of any
penalty, on 60 days' written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its assignment (as
defined in the 1940 Act).
12. The Investment Advisor shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Board of Trustees from time to time, have no authority to act
for or represent the Trust or any Portfolio in any way or otherwise be deemed
an agent of the Trust or any Portfolio.
13. This Agreement may be amended by mutual consent, but the consent of the
Trust must be approved (a) by vote of a majority of those Trustees of the Trust
who are not parties to this Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such amendment,
and (b) by vote of a majority of the outstanding voting securities of the Trust
or, in the case of an amendment to this Agreement affecting only one or several
Portfolios, a majority of the outstanding voting securities of each such
Portfolio. In the event that the Board of Trustees establish one or more
additional sub-trusts with respect to which they wish to retain the Investment
Advisor to act as investment manager, the Trust and the Investment Advisor may
amend Schedule A hereto to add each such sub-trust and specify the fee payable
to the Investment Advisor in respect thereof, in which event such sub-trust
shall become subject to the provisions of this Agreement and be deemed a
'Portfolio' hereunder to the same extent as the existing Portfolios, except to
the extent that such provisions may be modified with respect to any additional
Portfolio in writing by the Trust and the Investment Advisor at the time of the
addition of the Portfolio.
14. Notices of any kind to be given to the Investment Advisor by the Trust
shall be in writing and shall be duly given if mailed or delivered to the
Investment
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Advisor at 280 Park Avenue, New York, New York 10017, Attention: President, or
at such other address or to such other individual as shall be specified by the
Investment Advisor to the Trust. Notices of any kind to be given to the Trust
by the Investment Advisor shall be in writing and shall be duly given if mailed
or delivered to the Trust at Cardinal Avenue, Grand Cayman, Cayman Islands, BWI
or at such other address or to such other individual as shall be specified by
the Trust to the Investment Advisor.
15. The Board of Trustees have authorized the execution of this Agreement
in their capacity as Trustees and not individually and the Investment Advisor
agrees that neither the holders of interests in the Trust nor the Trustees nor
any officer, employee, representative or agent of the Trust shall be personally
liable upon, or shall resort be had to their private property for the
satisfaction of, obligations given, executed or delivered on behalf of or by
the Trust or any Portfolio, that the interest holders of the Portfolios and the
trustees, officers, employees, representatives and agents of the Trust shall
not be personally liable hereunder, and that the Investment Advisor shall look
solely to the property of the Trust for the satisfaction of any claim hereunder.
16. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
17. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the date first set forth
above.
DEUTSCHE INVESTORS PORTFOLIOS TRUST
By: ----------------------------------
Name: ----------------------------------
Title: ----------------------------------
DEUTSCHE ASSET MANAGEMENT, INC.
By: ----------------------------------
Name: ----------------------------------
Title: ----------------------------------
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Schedule A
Fee (annualized % of average
Portfolio daily net assets)
------------------------------------------------------
Top 50 US Portfolio 0.85%
------------------------------------------------------
Japanese Equity Portfolio 0.85%
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Exhibit E
GLOBAL BIOTECHNOLOGY FUND
FORM OF INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of the day of , by and between
DEUTSCHE INVESTORS FUNDS, INC., a Maryland corporation (the 'Fund'), and
DEUTSCHE ASSET MANAGEMENT, INC., a Delaware corporation (the 'Advisor').
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
'1940 Act'), consisting of several series of shares, each having its own
investment policies;
WHEREAS, the Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment advisor; and
WHEREAS, the Fund and the Advisor desire to enter into an agreement to
provide investment advisory services for the series listed in Schedule A to
this Agreement on the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of Investment Advisor. The Fund hereby appoints the Advisor
to act as the investment advisor of each series listed in Schedule A to this
Agreement (each such series, together with all other series subsequently
established by the Fund and made subject to this Agreement in accordance with
Section 11, being herein referred to as 'a Series', and collectively as 'the
Series'). The Advisor shall manage a Series' affairs and shall supervise all
aspects of a Series' operations (except as otherwise set forth herein),
including the investment and reinvestment of the cash, securities or other
properties comprising a Series' assets, subject at all times to the policies
and control of the Fund's Board of Directors (the 'Board of Directors'). The
Advisor shall give a Series the benefit of its best judgment, efforts and
facilities in rendering its services as Advisor.
2. Delivery of Documents. The Fund has furnished the Advisor with copies
properly certified or authenticated of each of the following:
(a) The Fund's Articles of Incorporation, filed with the State of Maryland
on May 22, 1997 and all amendments thereto (such Articles of
Incorporation,
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as presently in effect and as they shall from time to time be amended,
are herein called the 'Articles of Incorporation');
(b) The Fund's By-Laws and all amendments thereto (such By-Laws, as
presently in effect and as they shall from time to time be amended, are
herein called the 'By-Laws');
(c) Resolutions of the Board of Directors and shareholders authorizing the
appointment of the Advisor and approving this Agreement;
(d) The Fund's Registration Statement on Form N-1A under the Securities Act
of 1933, as amended (the '1933 Act') (File No. 333-07008) and under the
1940 Act as filed with the Securities and Exchange Commission ('SEC')
relating to the shares of the Fund and its series, and all amendments
thereto; and
(e) Each Series' most recent prospectus (such prospectus, as presently in
effect, and all amendments and supplements thereto are herein called
'Prospectus').
The Fund will furnish the Advisor from time to time with copies, properly
certified or authenticated, of all amendments or supplements to the foregoing,
if any, and all documents, notices and reports filed with the SEC.
The Advisor will provide the Fund with copies of its Form ADV, including all
amendments thereto, as it is filed with the SEC.
3. Duties of Investment Advisor. In carrying out its obligations under
Section 1 hereof, the Advisor shall:
(a) supervise and manage all aspects of a Series' operations, except for
distribution services;
(b) formulate and implement continuing programs for the purchases and sales
of securities, consistent with the investment objective and policies of
a Series;
(c) provide the Fund with such executive, administrative and clerical
services as are deemed advisable by the Board of Directors;
(d) provide the Fund with, or obtain for it, adequate office space and all
necessary office equipment and services, including telephone services,
utilities, stationery, supplies and similar items for the Fund's
principal office;
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(e) obtain and evaluate pertinent information about significant developments
and economic, statistical and financial data, domestic, foreign or
otherwise, whether affecting the economy generally or a Series, and
whether concerning the individual issuers whose securities are included
in a Series portfolio or the activities in which they engage, or with
respect to securities which the Advisor considers desirable for
inclusion in a Series' portfolio;
(f) determine which issuers and securities shall be represented in a Series'
portfolio and regularly report thereon to the Board of Directors; and
(g) take all actions necessary to carry into effect a Series' purchase and
sale programs.
4. Portfolio Transactions. The Advisor is authorized to select the brokers
or dealers that will execute the purchases and sales of portfolio securities
for a Series and is directed to use its best efforts to obtain the best net
results as described from time to time in a Series' Prospectus and statement of
additional information. The Advisor will promptly communicate to the
Administrator and to the officers and the Directors of the Fund such
information relating to portfolio transactions as they may reasonably request.
It is understood that the Advisor will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Fund or be in breach of
any obligation owing to the Fund under this Agreement, or otherwise, solely by
reason of its having directed a securities transaction on behalf of the Fund to
a broker-dealer in compliance with the provisions of Section 28(e) of the
Securities Exchange Act of 1934 or as otherwise permitted from time to time by
a Series' Prospectus and statement of additional information.
Subject to the policies established by the Board of Directors in compliance
with applicable law, the Advisor may direct Deutsche Bank Securities Inc. ('DB
Securities') or any of its affiliates to execute portfolio transactions for a
Series on an agency basis. The commissions paid to DB Securities or any of its
affiliates must be, as required by Rule 17e-1 under the 1940 Act, 'reasonable
and fair compared to the commission, fee or other remuneration received or to
be received by other brokers in connection with comparable transactions
involving similar securities . . . during a comparable period of time.' If the
purchase or sale of securities consistent with the investment policies of a
Series or one or more other accounts of the Advisor is considered at or about
the same time, transactions in such securities will be allocated among the
accounts in a manner deemed equitable by the Advisor. DB Securities or any of
its affiliates and the Advisor may combine such transactions, in accordance
with applicable laws and regulations, in order to obtain the best net price and
most favorable execution.
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The Fund, on behalf of a Series, will not deal with the Advisor or DB
Securities or any of its affiliates in any transaction in which the Advisor or
DB Securities or any of its affiliates acts as a principal with respect to any
part of a Series' order. If DB Securities or any of its affiliates is
participating in an underwriting or selling group, a Series may not buy
portfolio securities from the group except in accordance with policies
established by the Board of Directors in compliance with rules of the SEC.
5. Control by Board of Directors. Any management or supervisory activities
undertaken by the Advisor pursuant to this Agreement, as well as any other
activities undertaken by the Advisor on behalf of a Series pursuant thereto,
shall at all times be subject to any applicable directives of the Board of
Directors.
6. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules and regulations
adopted thereunder;
(b) the provisions of the Registration Statement of the Fund on behalf of a
Series under the 1933 Act and the 1940 Act;
(c) the provisions of the Articles of Incorporation;
(d) the provisions of the By-Laws; and
(e) any other applicable provisions of state and federal law.
7. Expenses. The expenses connected with the Fund on behalf of a Series
shall be allocable between the Fund and the Advisor as follows:
(a) The Advisor shall furnish, at its expense and without cost to the Fund,
the services of one or more officers of the Advisor, to the extent that
such officers may be required by the Fund on behalf of a Series for the
proper conduct of its affairs.
(b) The Fund assumes and shall pay or cause to be paid all other expenses of
the Fund on behalf of a Series, including, without limitation: payments
to the Fund's distributor under the Fund's plan of distribution; the
charges and expenses of any registrar, any custodian or depository
appointed by the Fund for the safekeeping of a Series' cash, portfolio
securities and other property, and any transfer, dividend or accounting
agent or agents appointed by the Fund; brokers' commissions chargeable
to the Fund on behalf of a Series in connection with portfolio
securities transactions to which the Fund is a party; all taxes,
including securities issuance and transfer taxes, and fees payable by
the Fund to Federal, State or other governmental
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agencies; the costs and expenses of engraving or printing of
certificates representing shares of the Fund; all costs and expenses in
connection with the registration and maintenance of registration of the
Fund and its shares with the SEC and various states and other
jurisdictions (including filing fees, legal fees and disbursements of
counsel); the costs and expenses of printing, including typesetting, and
distributing prospectuses and statements of additional information of
the Fund and supplements thereto to the Fund's shareholders; all
expenses of shareholders' and Directors' meetings and of preparing,
printing and mailing of proxy statements and reports to shareholders;
fees and travel expenses of Directors or Director members of any
advisory board or committee; all expenses incident to the payment of any
dividend, distribution, withdrawal or redemption, whether in shares or
in cash; charges and expenses of any outside service used for pricing of
the Fund's shares; charges and expenses of legal counsel, including
counsel to the Directors of the Fund who are not interested persons (as
defined in the 1940 Act) of the Fund and of independent certified public
accountants, in connection with any matter relating to the Fund;
membership dues of industry associations; interest payable on Fund
borrowings; postage; insurance premiums on property or personnel
(including officers and Directors) of the Fund which inure to its
benefit; extraordinary expenses (including but not limited to, legal
claims and liabilities and litigation costs and any indemnification
related thereto); and all other charges and costs of the Series' or
Fund's operation unless otherwise explicitly provided herein.
8. Delegation of Advisory Services. It is understood that the Advisor, on
behalf of a Series, may employ one or more unaffiliated sub-investment advisors
(each, a 'Sub-Advisor') under written agreements with each Sub-Advisor,
provided that any such Sub-Advisor and agreement is first approved by the vote
of a majority of the Board of Directors, including a majority of the Board of
Directors who are not 'interested persons' (as defined in the 1940 Act) of the
Fund, the Advisor or any such Sub-Advisor, at a meeting of the Board of
Directors called for the purpose of voting on such approval and, except as may
be otherwise permitted by then current law as modified or interpreted by an
applicable order or orders of the SEC or any rules or regulations adopted by,
or interpretive releases of, the SEC, by a vote of a 'majority of the
outstanding voting securities' (as defined in the 1940 Act) of a Series. The
authorization given to the Advisor in this Agreement to perform portfolio
management and related services may be delegated by it under any such agreement
to any of the Sub-Advisors, provided that the Sub-Advisors shall be subject to
the same restrictions and limitations on the investments and brokerage
discretion as the Advisor. In the event the Advisor employs one or more
Sub-Advisors, the Advisor shall oversee and continually evaluate the activities
of any such Sub-Advisor and shall make
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such recommendations to the Board of Directors from time to time concerning the
continuation, termination or modification of any such agreements as the Advisor
deems appropriate. Notwithstanding the foregoing, the Fund agrees that the
Advisor shall not be accountable to the Fund or a Series for any loss or
liability relating to specific investments directed solely by any Sub-Advisor.
Subject to the prior approval of a majority of the members of the Board of
Directors, including a majority of the Board of Directors who are not
'interested persons,' as defined in the 1940 Act, the Advisor may, through a
sub-advisory agreement or other arrangement, delegate to any other company that
the Advisor controls, is controlled by, or is under common control with, or to
specified employees of any such companies, or to more than one such company, to
the extent permitted by applicable law, certain of the Advisor's duties
enumerated in Section 3 hereof, and may adjust the duties of such entity, the
portion of portfolio assets of the Series that such entity shall manage and the
fees to be paid to such entity, subject to the prior approval of the members of
the Board of Directors who are not 'interested persons,' as defined in the 1940
Act; provided, that the Advisor shall continue to supervise the services
provided by such company or employees and any such delegation shall not relieve
the Advisor of any of its obligations hereunder.
As used in this Agreement, the terms 'interested persons' and a 'vote of a
majority of the outstanding voting securities' shall have the respective
meanings set forth in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the SEC under said Act.
9. Compensation. For the services to be rendered and the expenses assumed
by the Advisor, the Fund shall pay to the Advisor monthly compensation in
accordance with Schedule B.
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily and the amounts of the daily accruals shall be
paid monthly. If this Agreement becomes effective subsequent to the first day
of a month, compensation for that part of the month this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as
set forth above.
In the event of termination of this Agreement, the advisory fee shall be
computed on the basis of the period ending on the last business day on which
this Agreement is in effect subject to a pro rata adjustment based on the
number of days elapsed in the current month as a percentage of the total number
of days in such month.
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In addition to the foregoing, the Advisor may from time to time agree not to
impose all or a portion of its fee otherwise payable hereunder (in advance of
the time such fee or a portion thereof would otherwise accrue) and/or undertake
to pay or reimburse the Fund on behalf of the Series for all or a portion of
its expenses not otherwise required to be borne or reimbursed by the Advisor.
Any such fee reduction or undertaking may be discontinued or modified by the
Advisor at any time.
All rights of compensation under this Agreement for services performed as of
the termination date shall survive the termination of this Agreement. In
addition to the foregoing, the Advisor may from time to time agree not to
impose all or a portion of its fee otherwise payable hereunder (in advance of
the time such fee or a portion thereof would otherwise accrue) and/or undertake
to pay or reimburse a Series for all or a portion of its expenses not otherwise
required to be borne or reimbursed by the Advisor. Any such fee reduction or
undertaking may be discontinued or modified by the Advisor at any time.
10. Non-Exclusivity. The services of the Advisor to the Fund on behalf of
each Series are not to be deemed to be exclusive, and the Advisor shall be free
to render investment advisory or other services to others (including other
investment companies) and to engage in other activities, so long as its
services under this Agreement are not impaired thereby. It is understood and
agreed that officers or directors of the Advisor may serve as officers or
Directors of the Fund, and that officers or Directors of the Fund may serve as
officers or directors of the Advisor to the extent permitted by law; and that
the officers and directors of the Advisor are not prohibited from engaging in
any other business activity or from rendering services to any other person, or
from serving as partners, officers, trustees or directors of any other firm,
trust or corporation, including other investment companies.
11. Additional Series and Classes. In the event that the Fund establishes
one or more series of Shares or one or more classes of Shares after the
effectiveness of this Agreement, such series of shares or classes of shares, as
the case may be, shall become Series and Classes under this Agreement upon
approval of this Agreement by the Fund with respect to the series of shares or
class of shares and the execution of an amended Schedule A reflecting the
applicable names and terms.
12. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall remain in effect with respect to the Fund on behalf of a
Series until two years from the date first set forth above, and thereafter, for
periods of one year so long as such continuance thereafter is specifically
approved at least annually (a) by the vote of a majority of those Directors of
the Fund who are not parties to this Agreement or interested persons of any
such party, cast in person at a
E-7
meeting called for the purpose of voting on such approval, and (b) by the Board
of Directors or by vote of a majority of the outstanding voting securities of a
Series, subject to the right of the Fund and the Advisor to terminate this
contract as provided in Section 12 hereof; provided, however, that if the
shareholders of a Series fail to approve the Agreement as provided herein, the
Advisor may continue to serve hereunder in the manner and to the extent
permitted by the 1940 Act as modified or interpreted by any applicable order or
orders of the SEC or any rules or regulations adopted by, or interpretative
releases of, the SEC thereunder. The foregoing requirement that continuance of
this Agreement be 'specifically approved at least annually' shall be construed
in a manner consistent with the 1940 Act as modified or interpreted by any
applicable order or orders of the SEC or any rules or regulations adopted by,
or interpretative releases of, the SEC thereunder.
This Agreement may be terminated as to a Series at any time, without the
payment of any penalty by vote of a majority of the Board of Directors or by
vote of a majority of the outstanding voting securities of a Series on not less
than 30 days nor more than 60 days written notice to the Advisor, or by the
Advisor at any time without the payment of any penalty, on 90 days written
notice to the Fund. This Agreement will automatically and immediately terminate
in the event of its assignment. Any notice under this Agreement shall be given
in writing, addressed and delivered, or mailed postpaid, to the other party at
any office of such party.
As used in this Section 12, the term 'assignment' shall have the meaning as
set forth in the 1940 Act as modified or interpreted by any applicable order or
orders of the SEC or any rules or regulations adopted by, or interpretative
releases of, the SEC.
13. Liability of Advisor. In the performance of its duties hereunder, the
Advisor shall be obligated to exercise care and diligence and to act in good
faith and to use its best efforts within reasonable limits to ensure the
accuracy of all services performed under this Agreement, but the Advisor shall
not be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of the Advisor or its
officers, directors or employees, or reckless disregard by the Advisor of its
duties under this Agreement.
14. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice.
Currently such addresses are as follows: if to the Fund, One South Street,
Baltimore, Maryland 21202, and if to the Advisor, 280 Park Avenue, New York,
New York 10017.
15. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
E-8
16. Entire Agreement. This Agreement states the entire agreement of the
parties hereto, and is intended to be the complete and exclusive statement of
the terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act as modified or interpreted by any applicable order
or orders of the SEC or any rules or regulations adopted by, or interpretative
releases of, the SEC, when applicable.
17. Reports. The Fund and the Advisor agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to Shareholders,
certified copies of their financial statements, and such other information with
regard to their affairs as each may reasonably request.
18. Certain Records. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
1940 Act which are prepared or maintained by the Advisor on behalf of the Fund
are the property of the Fund and will be surrendered promptly to the Fund on
request.
19. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such term or provision of the 1940 Act and to interpretations thereof, if
any, by the United States Courts or in the absence of any controlling decision
of any such court, by rules, regulations or orders of the SEC issued pursuant
to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is modified or interpreted by any
applicable order or orders of the SEC or any rules or regulations adopted by,
or interpretative releases of, the SEC thereunder, such provision shall be
deemed to incorporate the effect of such order, rule, regulation or
interpretative release. Otherwise the provisions of this Agreement shall be
interpreted in accordance with the laws of Maryland.
20. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
E-9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
[SEAL] DEUTSCHE INVESTORS FUNDS, INC.
Attest: ------------------------ By: ------------------------
Name: ------------------------ Name: ------------------------
Title: ------------------------
[SEAL] DEUTSCHE ASSET MANAGEMENT, INC.
Attest: ------------------------ By: ------------------------
Name: ------------------------ Name: ------------------------
Title: ------------------------
E-10
Schedule A
Global Biotechnology Fund
E-11
Schedule B
------------------------------------------------------------
Global Biotechnology Fund
------------------------------------------------------------
Advisory Fee (annualized % of
Average Daily Net Assets Average Daily Net Assets)
------------------------------------------------------------
First $250 million 0.85%
------------------------------------------------------------
Next $250 million 0.80%
------------------------------------------------------------
Portion exceeding $500 million 0.75%
------------------------------------------------------------
E-12
Exhibit F
GROWTH OPPORTUNITY FUND
FORM OF INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of the day of , by and between
DEUTSCHE INVESTORS FUNDS, INC., a Maryland corporation (the 'Fund'), and
DEUTSCHE ASSET MANAGEMENT, INC., a Delaware corporation (the 'Advisor').
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
'1940 Act'), consisting of several series of shares, each having its own
investment policies;
WHEREAS, the Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and engages in the business of
acting as an investment advisor; and
WHEREAS, the Fund and the Advisor desire to enter into an agreement to
provide investment advisory services for the series listed in Schedule A to
this Agreement on the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of Investment Advisor. The Fund hereby appoints the Advisor
to act as the investment advisor of each series listed in Schedule A to this
Agreement (each such series, together with all other series subsequently
established by the Fund and made subject to this Agreement in accordance with
Section 11, being herein referred to as 'a Series', and collectively as 'the
Series'). The Advisor shall manage a Series' affairs and shall supervise all
aspects of a Series' operations (except as otherwise set forth herein),
including the investment and reinvestment of the cash, securities or other
properties comprising a Series' assets, subject at all times to the policies
and control of the Fund's Board of Directors (the 'Board of Directors'). The
Advisor shall give a Series the benefit of its best judgment, efforts and
facilities in rendering its services as Advisor.
2. Delivery of Documents. The Fund has furnished the Advisor with copies
properly certified or authenticated of each of the following:
F-1
(a) The Fund's Articles of Incorporation, filed with the State of Maryland
on May 22, 1997 and all amendments thereto (such Articles of
Incorporation, as presently in effect and as they shall from time to
time be amended, are herein called the 'Articles of Incorporation');
(b) The Fund's By-Laws and all amendments thereto (such By-Laws, as
presently in effect and as they shall from time to time be amended, are
herein called the 'By-Laws');
(c) Resolutions of the Board of Directors and shareholders authorizing the
appointment of the Advisor and approving this Agreement;
(d) The Fund's Registration Statement on Form N-1A under the Securities Act
of 1933, as amended (the '1933 Act') (File No. 333-07008) and under the
1940 Act as filed with the Securities and Exchange Commission ('SEC')
relating to the shares of the Fund and its series, and all amendments
thereto; and
(e) Each Series' most recent prospectus (such prospectus, as presently in
effect, and all amendments and supplements thereto are herein called
'Prospectus').
The Fund will furnish the Advisor from time to time with copies, properly
certified or authenticated, of all amendments or supplements to the foregoing,
if any, and all documents, notices and reports filed with the SEC.
The Advisor will provide the Fund with copies of its Form ADV, including all
amendments thereto, as filed with the SEC.
3. Duties of Investment Advisor. In carrying out its obligations under
Section 1 hereof, the Advisor shall:
(a) supervise and manage all aspects of a Series' operations, except for
distribution services;
(b) formulate and implement continuing programs for the purchases and sales
of securities, consistent with the investment objective and policies of
a Series;
(c) obtain and evaluate pertinent information about significant developments
and economic, statistical and financial data, domestic, foreign or
otherwise, whether affecting the economy generally or a Series, and
whether concerning the individual issuers whose securities are included
in a Series portfolio or the activities in which they engage, or with
respect to securities which the Advisor considers desirable for
inclusion in a Series' portfolio;
F-2
(d) determine which issuers and securities shall be represented in a Series'
portfolio and regularly report thereon to the Board of Directors; and
(e) take all actions necessary to carry into effect a Series' purchase and
sale programs.
4. Portfolio Transactions. The Advisor is authorized to select the brokers
or dealers that will execute the purchases and sales of portfolio securities
for a Series and is directed to use its best efforts to obtain the best net
results as described from time to time in a Series' Prospectus and statement of
additional information. The Advisor will promptly communicate to the
Administrator and to the officers and the Directors of the Fund such
information relating to portfolio transactions as they may reasonably request.
It is understood that the Advisor will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Fund or be in breach of
any obligation owing to the Fund under this Agreement, or otherwise, solely by
reason of its having directed a securities transaction on behalf of the Fund to
a broker-dealer in compliance with the provisions of Section 28(e) of the
Securities Exchange Act of 1934 or as otherwise permitted from time to time by
a Series' Prospectus and statement of additional information.
Subject to the policies established by the Board of Directors in compliance
with applicable law, the Advisor may direct Deutsche Bank Securities Inc. ('DB
Securities') or any of its affiliates to execute portfolio transactions for a
Series on an agency basis. The commissions paid to DB Securities or any of its
affiliates must be, as required by Rule 17e-1 under the 1940 Act, 'reasonable
and fair compared to the commission, fee or other remuneration received or to
be received by other brokers in connection with comparable transactions
involving similar securities . . . during a comparable period of time.' If the
purchase or sale of securities consistent with the investment policies of a
Series or one or more other accounts of the Advisor is considered at or about
the same time, transactions in such securities will be allocated among the
accounts in a manner deemed equitable by the Advisor. DB Securities or any of
its affiliates and the Advisor may combine such transactions, in accordance
with applicable laws and regulations, in order to obtain the best net price and
most favorable execution.
The Fund, on behalf of a Series, will not deal with the Advisor or DB
Securities or any of its affiliates in any transaction in which the Advisor or
DB Securities or any of its affiliates acts as a principal with respect to any
part of a Series' order. If DB Securities or any of its affiliates is
participating in an underwriting or selling group, a Series may not buy
portfolio securities from the group except in accordance with policies
established by the Board of Directors in compliance with rules of the SEC.
F-3
5. Control by Board of Directors. Any management or supervisory activities
undertaken by the Advisor pursuant to this Agreement, as well as any other
activities undertaken by the Advisor on behalf of a Series pursuant thereto,
shall at all times be subject to any applicable directives of the Board of
Directors.
6. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules and regulations
adopted thereunder;
(b) the provisions of the Registration Statement of the Fund on behalf of a
Series under the 1933 Act and the 1940 Act;
(c) the provisions of the Articles of Incorporation;
(d) the provisions of the By-Laws; and
(e) any other applicable provisions of state and federal law.
7. Expenses. The expenses connected with the Fund on behalf of a Series
shall be allocable between the Fund and the Advisor as follows:
(a) The Advisor shall furnish, at its expense and without cost to the Fund,
the services of one or more officers of the Advisor, to the extent that
such officers may be required by the Fund on behalf of a Series for the
proper conduct of its affairs.
(b) The Fund assumes and shall pay or cause to be paid all other expenses of
the Fund on behalf of a Series, including, without limitation: payments
to the Fund's distributor under the Fund's plan of distribution; the
charges and expenses of any registrar, any custodian or depository
appointed by the Fund for the safekeeping of a Series' cash, portfolio
securities and other property, and any transfer, dividend or accounting
agent or agents appointed by the Fund; brokers' commissions chargeable
to the Fund on behalf of a Series in connection with portfolio
securities transactions to which the Fund is a party; all taxes,
including securities issuance and transfer taxes, and fees payable by
the Fund to Federal, State or other governmental agencies; the costs and
expenses of engraving or printing of certificates representing shares of
the Fund; all costs and expenses in connection with the registration and
maintenance of registration of the Fund and its shares with the SEC and
various states and other jurisdictions (including filing fees, legal
fees and disbursements of counsel); the costs and expenses of printing,
including typesetting, and distributing prospectuses and statements of
additional information of the Fund and supplements thereto to the
F-4
Fund's shareholders; all expenses of shareholders' and Directors'
meetings and of preparing, printing and mailing of proxy statements and
reports to shareholders; fees and travel expenses of Directors or
Director members of any advisory board or committee; all expenses
incident to the payment of any dividend, distribution, withdrawal or
redemption, whether in shares or in cash; charges and expenses of any
outside service used for pricing of the Fund's shares; charges and
expenses of legal counsel, including counsel to the Directors of the
Fund who are not interested persons (as defined in the 1940 Act) of the
Fund and of independent certified public accountants, in connection with
any matter relating to the Fund; membership dues of industry
associations; interest payable on Fund borrowings; postage; insurance
premiums on property or personnel (including officers and Directors) of
the Fund which inure to its benefit; extraordinary expenses (including
but not limited to, legal claims and liabilities and litigation costs
and any indemnification related thereto); and all other charges and
costs of the Series' or Fund's operation unless otherwise explicitly
provided herein.
8. Delegation of Advisory Services. It is understood that the Advisor, on
behalf of a Series, may employ one or more unaffiliated sub-investment advisors
(each, a 'Sub-Advisor') under written agreements with each Sub-Advisor,
provided that any such Sub-Advisor and agreement is first approved by the vote
of a majority of the Board of Directors, including a majority of the Board of
Directors who are not 'interested persons' (as defined in the 1940 Act) of the
Fund, the Advisor or any such Sub-Advisor, at a meeting of the Board of
Directors called for the purpose of voting on such approval and, except as may
be otherwise permitted by then current law as modified or interpreted by an
applicable order or orders of the SEC or any rules or regulations adopted by,
or interpretive releases of, the SEC, by a vote of a 'majority of the
outstanding voting securities' (as defined in the 1940 Act) of a Series. The
authorization given to the Advisor in this Agreement to perform portfolio
management and related services may be delegated by it under any such agreement
to any of the Sub-Advisors, provided that the Sub-Advisors shall be subject to
the same restrictions and limitations on the investments and brokerage
discretion as the Advisor. In the event the Advisor employs one or more
Sub-Advisors, the Advisor shall oversee and continually evaluate the activities
of any such Sub-Advisor and shall make such recommendations to the Board of
Directors from time to time concerning the continuation, termination or
modification of any such agreements as the Advisor deems appropriate.
Notwithstanding the foregoing, the Fund agrees that the Advisor shall not be
accountable to the Fund or a Series for any loss or liability relating to
specific investments directed solely by any Sub-Advisor.
Subject to the prior approval of a majority of the members of the Board of
Directors, including a majority of the Board of Directors who are not
'interested persons,'
F-5
as defined in the 1940 Act, the Advisor may, through a sub-advisory agreement
or other arrangement, delegate to any other company that the Advisor controls,
is controlled by, or is under common control with, or to specified employees of
any such companies, or to more than one such company, to the extent permitted
by applicable law, certain of the Advisor's duties enumerated in Section 3
hereof, and may adjust the duties of such entity, the portion of portfolio
assets of the Series that such entity shall manage and the fees to be paid to
such entity, subject to the prior approval of the members of the Board of
Directors who are not 'interested persons,' as defined in the 1940 Act;
provided, that the Advisor shall continue to supervise the services provided by
such company or employees and any such delegation shall not relieve the Advisor
of any of its obligations hereunder.
As used in this Agreement, the terms 'interested persons' and a 'vote of a
majority of the outstanding voting securities' shall have the respective
meanings set forth in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the SEC under said Act.
9. Compensation. For the services to be rendered and the expenses assumed
by the Advisor, the Fund shall pay to the Advisor monthly compensation in
accordance with Schedule B.
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily and the amounts of the daily accruals shall be
paid monthly. If this Agreement becomes effective subsequent to the first day
of a month, compensation for that part of the month this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as
set forth above.
In the event of termination of this Agreement, the advisory fee shall be
computed on the basis of the period ending on the last business day on which
this Agreement is in effect subject to a pro rata adjustment based on the
number of days elapsed in the current month as a percentage of the total number
of days in such month.
In addition to the foregoing, the Advisor may from time to time agree not to
impose all or a portion of its fee otherwise payable hereunder (in advance of
the time such fee or a portion thereof would otherwise accrue) and/or undertake
to pay or reimburse the Fund on behalf of the Series for all or a portion of
its expenses not otherwise required to be borne or reimbursed by the Advisor.
Any such fee reduction or undertaking may be discontinued or modified by the
Advisor at any time.
All rights of compensation under this Agreement for services performed as of
the termination date shall survive the termination of this Agreement. In
addition to
F-6
the foregoing, the Advisor may from time to time agree not to impose all or a
portion of its fee otherwise payable hereunder (in advance of the time such fee
or a portion thereof would otherwise accrue) and/or undertake to pay or
reimburse a Series for all or a portion of its expenses not otherwise required
to be borne or reimbursed by the Advisor. Any such fee reduction or undertaking
may be discontinued or modified by the Advisor at any time.
10. Non-Exclusivity. The services of the Advisor to the Fund on behalf of
each Series are not to be deemed to be exclusive, and the Advisor shall be free
to render investment advisory or other services to others (including other
investment companies) and to engage in other activities, so long as its
services under this Agreement are not impaired thereby. It is understood and
agreed that officers or directors of the Advisor may serve as officers or
Directors of the Fund, and that officers or Directors of the Fund may serve as
officers or directors of the Advisor to the extent permitted by law; and that
the officers and directors of the Advisor are not prohibited from engaging in
any other business activity or from rendering services to any other person, or
from serving as partners, officers, trustees or directors of any other firm,
trust or corporation, including other investment companies.
11. Additional Series and Classes. In the event that the Fund establishes
one or more series of Shares or one or more classes of Shares after the
effectiveness of this Agreement, such series of shares or classes of shares, as
the case may be, shall become Series and Classes under this Agreement upon
approval of this Agreement by the Fund with respect to the series of shares or
class of shares and the execution of an amended Schedule A reflecting the
applicable names and terms.
12. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall remain in effect with respect to the Fund on behalf of a
Series until two years from the date first set forth above, and thereafter, for
periods of one year so long as such continuance thereafter is specifically
approved at least annually (a) by the vote of a majority of those Directors of
the Fund who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the Board of Directors or by vote of a majority of
the outstanding voting securities of a Series, subject to the right of the Fund
and the Advisor to terminate this contract as provided in Section 12 hereof;
provided, however, that if the shareholders of a Series fail to approve the
Agreement as provided herein, the Advisor may continue to serve hereunder in
the manner and to the extent permitted by the 1940 Act as modified or
interpreted by any applicable order or orders of the SEC or any rules or
regulations adopted by, or interpretative releases of, the SEC thereunder. The
foregoing requirement that continuance of this Agreement be 'specifically
approved at least annually' shall be construed in a manner consistent with the
1940 Act as modified or
F-7
interpreted by any applicable order or orders of the SEC or any rules or
regulations adopted by, or interpretative releases of, the SEC thereunder.
This Agreement may be terminated as to a Series at any time, without the
payment of any penalty by vote of a majority of the Board of Directors or by
vote of a majority of the outstanding voting securities of a Series on not less
than 30 days nor more than 60 days written notice to the Advisor, or by the
Advisor at any time without the payment of any penalty, on 90 days written
notice to the Fund. This Agreement will automatically and immediately terminate
in the event of its assignment. Any notice under this Agreement shall be given
in writing, addressed and delivered, or mailed postpaid, to the other party at
any office of such party.
As used in this Section 12, the term 'assignment' shall have the meaning as
set forth in the 1940 Act as modified or interpreted by any applicable order or
orders of the SEC or any rules or regulations adopted by, or interpretative
releases of, the SEC.
13. Liability of Advisor. In the performance of its duties hereunder, the
Advisor shall be obligated to exercise care and diligence and to act in good
faith and to use its best efforts within reasonable limits to ensure the
accuracy of all services performed under this Agreement, but the Advisor shall
not be liable for any act or omission which does not constitute willful
misfeasance, bad faith or gross negligence on the part of the Advisor or its
officers, directors or employees, or reckless disregard by the Advisor of its
duties under this Agreement.
14. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice.
Currently such addresses are as follows: if to the Fund, One South Street,
Baltimore, Maryland 21202, and if to the Advisor, 280 Park Avenue, New York,
New York 10017.
15. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
16. Entire Agreement. This Agreement states the entire agreement of the
parties hereto, and is intended to be the complete and exclusive statement of
the terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act as modified or interpreted by any applicable order
or orders of the SEC or any rules or regulations adopted by, or interpretative
releases of, the SEC, when applicable.
F-8
17. Reports. The Fund and the Advisor agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to Shareholders,
certified copies of their financial statements, and such other information with
regard to their affairs as each may reasonably request.
18. Certain Records. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
1940 Act which are prepared or maintained by the Advisor on behalf of the Fund
are the property of the Fund and will be surrendered promptly to the Fund on
request.
19. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such term or provision of the 1940 Act and to interpretations thereof, if
any, by the United States Courts or in the absence of any controlling decision
of any such court, by rules, regulations or orders of the SEC issued pursuant
to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is modified or interpreted by any
applicable order or orders of the SEC or any rules or regulations adopted by,
or interpretative releases of, the SEC thereunder, such provision shall be
deemed to incorporate the effect of such order, rule, regulation or
interpretative release. Otherwise the provisions of this Agreement shall be
interpreted in accordance with the laws of Maryland.
20. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
F-9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
[SEAL] DEUTSCHE INVESTORS FUNDS, INC.
Attest: ---------------------------------- By: ----------------------------------
Name: ---------------------------------- Name: ----------------------------------
Title: ----------------------------------
[SEAL] DEUTSCHE ASSET MANAGEMENT, INC.
Attest: ---------------------------------- By: ----------------------------------
Name: ---------------------------------- Name: ----------------------------------
Title: ----------------------------------
F-10
Schedule A
Growth Opportunity Fund
F-11
Schedule B
Growth Opportunity Fund
Advisory Fee as a % of
Average Daily Net Assets Average Daily Net Assets
--------------------------------------------------
First $250 million 0.85%
--------------------------------------------------
Next $250 million 0.80%
--------------------------------------------------
In excess of $500 million 0.75%
--------------------------------------------------
F-12
Exhibit G
ADVISORY FEES
I. Rates of Compensation under the Current Advisory Agreements
Top 50 US Fund/1/ and Japanese Equity Fund/2/
For its services, the Advisor is entitled to receive an annual fee from each
Portfolio, which is computed daily and paid monthly, equal to a percentage of
the average daily net assets of the Portfolio as follows: 0.85% for Top 50 US
Portfolio and 0.85% for Japanese Equity Portfolio.
Global Biotechnology Fund/3/
As compensation for its services, the Advisor is entitled to receive an
annual fee from the Company, on behalf of the Fund, which is computed daily and
paid monthly, equal to a percentage of the average daily net assets of the Fund
as follows: 0.85% of the first $250 million, 0.80% of the next $250 million and
0.75% of the portion of assets exceeding $500 million.
Growth Opportunity Fund/4/
As compensation for its services, the Company, on behalf of the Fund, pays
the Advisor an annual fee based on the Fund's average daily net assets
according to the following schedule of annual rates: 0.85% of the first $250
million, 0.80% of the next $250 million and 0.75% of the assets in excess of
$500 million.
II. Aggregate Advisory Fees
For providing investment advisory services to the Funds/Portfolios for each
Fund's/Portfolio's most recently completed fiscal year, ICCC was entitled to
receive the amounts listed under 'Fee Before Waivers.' ICCC, in its capacity as
Advisor or Administrator, has agreed to waive its fees and reimburse expenses
so that total expenses do not exceed the expense ratios listed in Footnotes 1
through 4 of I above. As
/1 /ICCC, in its capacity as Advisor and Administrator, has contractually
agreed to waive its fees and reimburse expenses through December 31, 2002 to
the extent necessary to maintain the Top 50 US Fund's expense ratio at 1.15%
for Class A Shares and 1.90% for Class B and C Shares.
/2 /ICCC, in its capacity as Advisor and Administrator, has contractually
agreed to waive its fees and reimburse expenses through December 31, 2002 to
the extent necessary to maintain the Japanese Equity Fund's expense ratio at
1.60% for Class A Shares and 2.35% for Class B and C Shares.
/3/ ICCC, in its capacity as Advisor and Administrator, has contractually
agreed to waive its fees and/or reimburse expenses through December 31,
2002, to the extent necessary to maintain the Global Biotechnology Fund
expense ratio at 1.50% for Class A Shares and 2.25% for Class B and C
Shares.
/4/ ICCC, in its capacity as Advisor and Administrator, has contractually
agreed to waive its fees and/or reimburse expenses through January 31,
2003, to the extent necessary to maintain the Growth Opportunity Fund's
expense ratio at 1.30% for Class A Shares and 2.05% for Class B and C
Shares.
G-1
of each Fund's fiscal year end, ICCC waived and/or reimbursed the amounts
listed in 'Waiver/Reimbursement by Advisor and/or Administrator.'
Fee Before Waiver/Reimbursement by
Fund/Portfolio (Fiscal Year) Waivers Advisor and/or Administrator
------------------------------------------------------------------------------
Top 50 US Portfolio (8/31/2001) $311,150 $385,751
------------------------------------------------------------------------------
Japanese Equity Portfolio (8/31/2001) $ 97,335 $361,978
------------------------------------------------------------------------------
Global Biotechnology Fund (8/31/2001) $ 20,036* $115,653
------------------------------------------------------------------------------
Growth Opportunity Fund (9/30/2001) $ 28,971** $140,481
* For the period from March 30, 2001 (the Fund's inception) through August 31,
2001.
** For the period from December 29, 2000 (the Fund's inception) through
September 30, 2001.
III. Administrative and Transfer Agency Fees
For its administrative and transfer agency services, ICCC was paid the
following amounts for each Fund's most recently completed fiscal year.
Administrative Transfer
Fund (Fiscal Year) Fees Agent Fees
---------------------------------------------------------------
Top 50 US Fund (8/31/2001) $75,187 $57,894
---------------------------------------------------------------
Japanese Equity Fund (8/31/2001) $75,192 $56,095
---------------------------------------------------------------
Global Biotechnology Fund (8/31/2001) $ 4,151* $22,671*
---------------------------------------------------------------
Growth Opportunity Fund (9/30/2001) $ 5,113** $ 9,618**
* For the period from March 30, 2001 (the Fund's inception) through August 31,
2001.
** For the period from December 29, 2000 (the Fund's inception) through
September 30, 2001.
Deutsche Bank Trust, an affiliate of ICCC, was paid the following amounts
for providing custody services to Growth Opportunity Fund for the fiscal year
ended September 30, 2001:
Fund Custody Fees
------------------------------------
Growth Opportunity Fund $20,120*
* For the period from December 29, 2000 (the Fund's inception) through
September 30, 2001.
It is expected that these services will continue to be provided to the Funds
by an affiliate of the Advisor after the New Advisory Agreements are approved.
G-2
SUB-ADVISORY FEES
I. Rates of Compensation under the Current Sub-Advisory Agreements
Japanese Equity Fund
For its services, the Advisor will pay the Sub-Advisor an annual fee, which
is calculated daily and payable monthly, at an annual rate equal to the
percentage of the average daily net assets of the Portfolio as follows: 0.60%
for Japanese Equity Portfolio.
Global Biotechnology Fund
As compensation for its services, the Advisor will pay the Sub-Advisor an
annual fee which is computed daily and paid monthly, equal to a percentage of
the average daily net assets of the Fund as follows: 0.50% for Global
Biotechnology Fund. From time to time, DWS may voluntarily waive a portion of
its sub-advisory fees.
Growth Opportunity Fund
As compensation for its services, Jennison is entitled to receive a fee from
the Advisor, payable from its advisory fee based on the Fund's average daily
net assets. This fee is calculated daily and paid monthly, according to the
following schedule of annual rates: 0.48% of the first $250 million, 0.45% of
the next $250 million and 0.42% of the assets in excess of $500 million.
II. Aggregate Sub-Advisory Fees
For its investment sub-advisory services, the Company paid DWS and Jennison,
as applicable, the following amounts for each Fund's/Portfolio's most recently
completed recent fiscal year:
Fund/Portfolio (Fiscal Year) Fee
-----------------------------------------------
Japanese Equity Portfolio (8/31/2001) $12,024
-----------------------------------------------
Global Biotechnology Fund (8/31/2001) $11,815*
-----------------------------------------------
Growth Opportunity Fund (9/30/2001) $13,906**
* For the period March 30, 2001 (the Fund's inception) through August 31, 2001.
** For the period December 29, 2000 (the Fund's inception) through September
30, 2001.
G-3
Exhibit H
Investment Companies Advised or Sub-Advised DeAM, Inc.
Assets Under Contractual
Management as of Advisory
Funds with Similar Investment Objectives/1/ March 31, 2002 Fees
---------------------------------------------- ----------------- -----------
Top 50 US Portfolio $ 32,036,662.33 0.85%/2/
Top 50 US Fund (Onshore) $ 21,065,049.82 --/2/
Top 50 US Fund (Offshore) $ 10,971,612.51 --/2/
Federated Max-Cap Fund $1,552,552,574.73 0.22%
SEI Institutional Investments Trust--Large Cap
Fund $ 910,978,309.96 Note 1
Growth Opportunity Fund $ 4,114,840.59 0.85%/3/
The SmallCap Fund, Inc. $ 125,523,512.00 1.00%
Micro Cap Fund $ 77,301,415.13 1.50%
Small Cap Fund Investment $ 288,943,053.00 0.65%
AST DeAM Small Cap Growth Portfolio $ 61,755,671.86 Note 2
ASAF DeAM Small Cap Growth Fund $ 557,999,910.74 Note 2
Federated Mid-Cap $ 442,216,144.29 0.35%
Federated Mini-Cap $ 127,389,686.23 0.65%
Global Biotechnology Fund $ 5,426,474.57 0.85%/3/
Japanese Equity Portfolio $ 5,339,948.49* 0.85%/4/
Japanese Equity Fund $ 3,503,812.96 --/4/
- --------
* This amount includes the assets of the Japanese Equity Fund (Offshore),
which was a feeder fund to the Japanese Equity Portfolio. Japanese Equity
Fund (Offshore) closed on May 31, 2002.
/1/ There may be additional funds and/or portfolios that are advised or
sub-advised by DeAM, Inc. with similar investment objectives to the Funds
that are not listed below. These funds are scheduled to close on or about
August 17, 2002.
/2/ Top 50 US Portfolio is the master portfolio. Top 50 US Fund (Onshore) and
Top 50 US Fund (Offshore) are feeder funds to Top 50 US Portfolio. The
advisory fee is paid by the master portfolio under the advisory agreement
and allocated to the feeder funds proportionately based upon the feeder
funds interest in the master portfolio.
/3/ For each Fund's advisory fee schedule, please see Exhibit G.
/4/ Japanese Equity Portfolio is the master portfolio. The Japanese Equity Fund
is the only feeder fund to the Japanese Equity Portfolio. The advisory fee
is paid by the master portfolio under the Advisory Agreement and allocated
to the feeder fund.
Note 1 0.0175%--first $1 billion or less, 0.0150%--next $1 billion to $3
billion, 0.0100%--amounts over $3 billion.
Note 2 .35% of the portion of the combined average daily net assets in excess
of $100 million; plus, .30% of the portion over $100 million but not in
excess of $300 million; plus .25% of the portion over $300 million but
not in excess of $500 million; plus .20% of the portion in excess of
$500 million.
H-1
Exhibit I
Principal occupations of each director and
principal executive officer of DeAM, Inc.
The names and principal occupations of the current directors and executive
officers of DeAM, Inc. are set forth below. The business address of each person
is 280 Park Avenue, New York, New York 10017.
-----------------------------------------------------
Name Principal Occupation
-----------------------------------------------------
Dean Sherman Barr President and Chief
Investment Officer
-----------------------------------------------------
Audrey Theresa Jones Director and Executive
Vice President
-----------------------------------------------------
William George Butterly Secretary and Executive
Vice President
-----------------------------------------------------
Mary Anne Mullin Compliance Officer
-----------------------------------------------------
Gwyn Morgan Thomas Director and Vice
President
-----------------------------------------------------
Lori Callahan Director and Chief
Administrative Officer
-----------------------------------------------------
I-1
Exhibit J
- -----------------------------------------------------------------------------------
Aggregate Dollar Range of
Ownership as of May 31,
2002 in all Funds
Overseen or to be
Overseen by Director or
Dollar Range of Director Nominee in
Beneficial Ownership in Family of Investment
Director the Funds/1/ Companies/2/
- -----------------------------------------------------------------------------------
Independent Director Nominees
- -----------------------------------------------------------------------------------
Richard R. Burt* $1-$10,000 (Top 50 US Over $100,000
Fund) $1-$10,000
(Japanese Equity
Fund) None (Global
Biotechnology Fund)
None (Growth Opportunity
Fund)
- -----------------------------------------------------------------------------------
S. Leland Dill None (Top 50 US Over $100,000
Fund) None (Japanese
Equity Fund) None (Global
Biotechnology Fund)
None (Growth Opportunity
Fund)
- -----------------------------------------------------------------------------------
Martin J. Gruber None (Top 50 US $10,001-$50,000
Fund) None (Japanese
Equity Fund) None (Global
Biotechnology Fund)
None (Growth Opportunity
Fund)
- -----------------------------------------------------------------------------------
Joseph R. Hardiman* None (Top 50 US Over $100,000
Fund) None (Japanese
Equity Fund) None (Global
Biotechnology Fund)
$10,001-$50,000 (Growth
Opportunity Fund)
- -----------------------------------------------------------------------------------
Richard J. Herring None (Top 50 US Over $100,000
Fund) None (Japanese
Equity Fund) None (Global
Biotechnology Fund)
None (Growth Opportunity
Fund)
- -----------------------------------------------------------------------------------
Graham E. Jones None (Top 50 US Over $100,000
Fund) None (Japanese
Equity Fund) None (Global
Biotechnology Fund)
None (Growth Opportunity
Fund)
- -----------------------------------------------------------------------------------
Rebecca W. Rimel* None (Top 50 US Over $100,000
Fund) None (Japanese
Equity Fund) None (Global
Biotechnology Fund)
None (Growth Opportunity
Fund)
- -----------------------------------------------------------------------------------
Philip Saunders, Jr. None (Top 50 US $50,001-$100,000
Fund) None (Japanese
Equity Fund) None (Global
Biotechnology Fund)
None (Growth Opportunity
Fund)
- -----------------------------------------------------------------------------------
J-1
- --------------------------------------------------------------------------------
Aggregate Dollar Range of
Ownership as of May 31,
2002 in all Funds
Overseen or to be
Overseen by Director or
Dollar Range of Director Nominee in
Beneficial Ownership in Family of Investment
Director the Funds/1/ Companies/2/
- --------------------------------------------------------------------------------
William N. Searcy None (Top 50 US $10,001-$50,000
Fund) None (Japanese
Equity Fund) None (Global
Biotechnology Fund)
None (Growth Opportunity
Fund)
- --------------------------------------------------------------------------------
Robert H. Wadsworth* $10,001-$50,000 (Top 50 Over $100,000
US Fund) None (Japanese
Equity Fund) $1-$10,000
(Global Biotechnology
Fund)
None (Growth Opportunity
Fund)
- --------------------------------------------------------------------------------
Interested
Director Nominee
- --------------------------------------------------------------------------------
Richard T. Hale None (Top 50 US Over $100,000
Fund) None (Japanese
Equity Fund) None (Global
Biotechnology Fund)
None (Growth Opportunity
Fund)
- --------------------------------------------------------------------------------
- --------
/*/ The amount shown includes share equivalents of funds which the board member
is deemed to be invested pursuant to the Fund's deferred compensation plan.
The inclusion therein of any shares deemed beneficially owned does not
constitute an admission of beneficial ownership of the shares.
/1/ Securities beneficially owned as defined under the Securities Exchange Act
of 1934 (the '1934 Act') include direct and or indirect ownership of
securities where the director's economic interest is tied to the
securities, employment ownership and securities when the director can exert
voting power and when the director has authority to sell the securities.
The dollar ranges are: None, $1-$10,000, $10,001-$50,000, $50,001-$100,000,
over $100,000.
/2/ The dollar ranges are: None, $1-$10,000, $10,001-$50,000, $50,001-$100,000,
over $100,000.
J-2
Exhibit K
GLOBAL BIOTECHNOLOGY FUND
FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made as of the day of , by and among
DEUTSCHE INVESTORS FUNDS, INC., a Maryland corporation (the 'Fund'), DEUTSCHE
ASSET MANAGEMENT, INC., a Delaware corporation (the 'Advisor'), and DWS
INTERNATIONAL PORTFOLIO MANAGEMENT GmbH, a company organized under the laws of
the Federal Republic of Germany (the 'Sub-Advisor').
WHEREAS, the Advisor is the investment advisor to the Fund, which is an
open-end, diversified management investment company registered under the
Investment Company Act of 1940, as amended (the '1940 Act'), consisting of
several series of shares, each having its own investment policies.
WHEREAS, the Board of Directors of the Fund (the 'Board') has selected the
Advisor to provide overall investment advice and management, and to provide
certain other services, under the terms and conditions provided in the Advisory
Agreement, dated , between Deutsche Asset Management, Inc. and Deutsche
Investors Funds, Inc. (the 'Advisory Agreement').
NOW THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of Sub-Advisor. The Fund hereby appoints the Sub-Advisor to
act as the Sub-Advisor of each series listed in Schedule A to this Agreement
(each such series, together with all other series subsequently established by
the Fund and made subject to this Agreement in accordance with Section 10,
being herein referred to as 'a Series', and collectively as 'the Series') under
the supervision of the Board and the Advisor, and the Sub-Advisor hereby
accepts such appointment, all subject to the terms and conditions contained
herein.
2. Delivery of Documents. The Fund has furnished the Sub-Advisor with
copies properly certified or authenticated of each of the following:
(a) The Fund's Articles of Incorporation, filed with the State of Maryland
on May 22, 1997 and all amendments thereto (such Articles of
Incorporation, as presently in effect and as they shall from time to
time be amended, are herein called the 'Articles of Incorporation');
K-1
(b) The Fund's By-Laws and all amendments thereto (such By-Laws, as
presently in effect and as they shall from time to time be amended, are
herein called the 'By-Laws');
(c) Resolutions of the Board and shareholders authorizing the appointment of
the Sub-Advisor and approving this Agreement;
(d) The Fund's Registration Statement on Form N-1A under the Securities Act
of 1933, as amended (the '1933 Act') (File No. 333-07008) and under the
1940 Act as filed with the Securities and Exchange Commission ('SEC')
relating to the shares of the Fund on behalf of the Series listed in
Schedule A, and all amendments thereto; and
(e) Each Series' most recent prospectus (such prospectus, as presently in
effect, and all amendments and supplements thereto are herein called
'Prospectus').
The Fund will furnish the Sub-Advisor from time to time with copies, properly
certified or authenticated, of all amendments or supplements to the foregoing,
if any, and all documents, notices and reports filed with the SEC.
The Sub-Advisor will provide the Series with copies of its Form ADV,
including all amendments thereto, as filed with the SEC.
3. Duties of Sub-Advisor. In carrying out its obligations under Section 1
hereof, the Sub-Advisor, shall:
(a) provide the Series with such executive and clerical services as are
deemed advisable by the Board;
(b) determine which issuers and securities shall be represented in the
Series' portfolio and regularly report thereon to the Board;
(c) formulate and implement continuing programs for the purchases and sales
of securities and regularly report thereon to the Board;
(d) take, on behalf of the Series, all actions which appear necessary to
carry into effect such purchase and sale programs as aforesaid,
including the placing of orders for the Series' purchase and sale of
securities;
(e) obtain and evaluate pertinent information about significant developments
and economic, statistical and financial data, domestic, foreign or
otherwise, whether affecting the economy generally or the Series, and
whether concerning the individual issuers whose securities are included
in the Series' portfolio or the activities in which they engage, or with
respect to securities which the Advisor considers desirable for
inclusion in the Series' portfolio;
K-2
(f) provide the Advisor and the Fund with records concerning the
Sub-Advisor's activities which the Fund is required to maintain;
(g) render regular reports to the Advisor and the Fund's officers and
directors concerning the Sub-Advisor's discharge of its
responsibilities; and
(h) discharge the foregoing responsibilities subject to the control of the
Board and the overall supervision of the Advisor and in compliance with
such policies as the Board or the Advisor may from time to time
establish, subject always to the provisions of the Fund's Articles of
Incorporation and By-Laws, and the 1940 Act, and in compliance with the
objectives, policies, and limitations for each Series as set forth in
each Series' Prospectus and statement of additional information, as
amended from time to time, and applicable laws and regulations.
4. Portfolio Transactions. The Sub-Advisor is authorized in its discretion
to select the brokers or dealers that will execute the purchases and sales of
portfolio securities for a Series and is directed to use its best efforts to
obtain the best net results as described from time to time in a Series'
Prospectus and statement of additional information. The Sub-Advisor will
promptly communicate to the Advisor and to the officers and the Directors of
the Fund such information relating to portfolio transactions as they may
reasonably request.
It is understood that the Sub-Advisor will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Fund or be in breach of
any obligation owing to the Fund under this Agreement, or otherwise, solely by
reason of its having directed a securities transaction on behalf of a Fund to a
broker-dealer in compliance with the provisions of Section 28(e) of the
Securities Exchange Act of 1934 or as otherwise permitted from time to time by
a Prospectus and statement of additional information.
Subject to the policies established by the Board in compliance with
applicable law, the Sub-Advisor may direct Deutsche Bank Securities Inc. ('DB
Securities') or any of its affiliates to execute portfolio transactions for the
Fund on an agency basis. The commissions paid to DB Securities must be, as
required by Rule 17e-1 under the 1940 Act, 'reasonable and fair compared to the
commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar securities
during a comparable period of time.' If the purchase or sale of securities
consistent with the investment policies of each Series or one or more other
accounts of the Sub-Advisor is considered at or about the same time,
transactions in such securities will be allocated among the accounts in a
manner deemed equitable by the Sub-Advisor. DB Securities and the Sub-Advisor
may combine such transactions, in accordance with applicable laws and
regulations, in order to obtain the best net price and most favorable execution.
K-3
The Fund, on behalf of each Series, will not deal with the Sub-Advisor or DB
Securities in any transaction in which the Sub-Advisor or DB Securities acts as
a principal with respect to any part of a Series' order. If DB Securities is
participating in an underwriting or selling group, a Series may not buy
portfolio securities from the group except in accordance with policies
established by the Board in compliance with rules of the SEC.
5. Control by the Fund's Board. Any recommendations concerning a Series'
investment program proposed by the Sub-Advisor and the Advisor pursuant to this
Agreement, as well as any other activities undertaken by the Sub-Advisor on
behalf of a Series pursuant hereto, shall at all times be subject to any
applicable directives of the Board.
6. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Sub-Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules and regulations
adopted thereunder, as amended;
(b) the provisions of the Registration Statement of the Fund under the 1933
Act and the 1940 Act;
(c) the provisions of the Articles of Incorporation;
(d) the provisions of the By-Laws; and
(e) any other applicable provisions of state and federal law.
7. Expenses. The expenses connected with the Fund on behalf of a Series
shall be allocable between the Fund, the Sub-Advisor and the Advisor as follows:
(a) The Sub-Advisor shall furnish at its expense and without cost to the
Fund, the services of one or more officers of the Sub-Advisor, to the
extent that such officers may be required by the Series for the proper
conduct of its affairs.
(b) The Sub-Advisor shall maintain, at its expense and without cost to the
Fund, a trading function in order to carry out its obligations under
Section 3 hereof to place orders for the purchase and sale of portfolio
securities for each Series.
(c) The Fund assumes and shall pay or cause to be paid all other expenses of
the Fund on behalf of each Series, including, without limitation:
payments to the Advisor under the Advisory Agreement between the Fund
and the Advisor, payments to the Fund's distributor under the Fund's
plan of distribution; the charges and expenses of any registrar, any
custodian or
K-4
depository appointed by the Fund for the safekeeping of each Series'
cash, portfolio securities and other property, and any transfer,
dividend or accounting agent or agents appointed by the Fund; brokers'
commissions chargeable to the Fund on behalf of each Series in
connection with portfolio securities transactions to which the Fund is a
party; all taxes, including securities issuance and transfer taxes, and
fees payable by the Fund to Federal, State or other governmental
agencies; the costs and expenses of engraving or printing of
certificates representing shares of the Fund; all costs and expenses in
connection with the registration and maintenance of registration of the
Fund and its shares with the SEC and various states and other
jurisdictions (including filing fees, legal fees and disbursements of
counsel); the costs and expenses of printing, including typesetting, and
distributing prospectuses and statements of additional information of
the Fund and supplements thereto to the Fund's shareholders; all
expenses of shareholders' and Directors' meetings and of preparing,
printing and mailing of proxy statements and reports to shareholders;
fees and travel expenses of Directors or Director members of any
advisory board or committee; all expenses incident to the payment of any
dividend, distribution, withdrawal or redemption, whether in shares or
in cash; charges and expenses of any outside service used for pricing of
the Fund's shares; charges and expenses of legal counsel, including
counsel to the Directors of the Fund who are not 'interested persons'
(as defined in the 1940 Act) of the Fund and of independent certified
public accountants, in connection with any matter relating to the Fund;
membership dues of industry associations; interest payable on Fund
borrowings; postage; insurance premiums on property or personnel
(including officers and Directors) of the Fund which inure to its
benefit; extraordinary expenses (including but not limited to, legal
claims and liabilities and litigation costs and any indemnification
related thereto); and all other charges and costs of the Fund's
operation unless otherwise explicitly provided herein.
8. Compensation. For the services to be rendered hereunder by the
Sub-Advisor, the Advisor shall pay to the Sub-Advisor monthly compensation in
accordance with Schedule B. The Fund on behalf of each Series shall have no
responsibility for such compensation.
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily and the amounts of the daily accruals shall be
paid monthly. For any period less than a full month during which this Agreement
is in effect, the fee shall be prorated according to the proportion, which such
period bears to a full month. Payment of the Sub-Advisor's compensation for the
preceding month shall be made as promptly as possible.
K-5
9. Delegation of Sub-Advisory Services. Subject to the provisions of this
Agreement, the duties of the Sub-Advisor, the portion of portfolio assets of
the Series that the Sub-Advisor shall manage and the fees to be paid to the
Sub-Advisor by the Advisor under and pursuant to this Agreement or other
arrangement entered into in accordance with this Agreement may be adjusted from
time to time by the Advisor, subject to the prior approval of the members of
the Board who are not 'interested persons,' as defined in the 1940 Act.
The Sub-Advisor may, but shall not be under any duty to, perform services on
behalf of the Fund which are not required by this Agreement upon the request of
the Board. Such services will be performed on behalf of the Fund and the
Sub-Advisor's charges in rendering such services will be billed monthly to the
Fund, subject to examination by the Fund's independent certified public
accountants. Payment or assumption by the Sub-Advisor of any Fund expense that
the Sub-Advisor is not required to pay or assume under this Agreement shall not
relieve the Sub-Advisor of any of its obligations to the Fund nor obligate the
Sub-Advisor to pay or assume any similar Fund expenses on any subsequent
occasions.
10. Additional Series and Classes. In the event that the Fund establishes
one or more series of Shares or one or more classes of Shares after the
effectiveness of this Agreement, such series of shares or classes of shares, as
the case may be, shall become Series and Classes under this Agreement upon
approval of this Agreement by the Fund with respect to the series of shares or
class of shares and the execution of an amended Schedule A reflecting the
applicable names and terms.
11. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall remain in effect with respect to a Series until two
years from the date first set forth above, and thereafter, for periods of one
year so long as such continuance thereafter is specifically approved at least
annually (a) by the vote of a majority of those members of the Board who are
not parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and,
except as may be otherwise permitted by then current law as modified or
interpreted by any applicable order or orders of the SEC or any rules or
regulations adopted by, or interpretative releases of, the SEC, (b) by vote of
a majority of the outstanding voting securities of a Series; provided, however,
that if the shareholders of a Series fail to approve the Agreement as provided
in Section 15 of the 1940 Act, the Sub-Advisor may continue to serve hereunder
in the manner and to the extent permitted by the 1940 Act and rules and
regulations thereunder. The foregoing requirement that continuance of this
Agreement be 'specifically approved at least annually' shall be construed in a
manner consistent with the 1940 Act as modified or interpreted by any
applicable order or orders of the SEC or any rules or regulations adopted by,
or interpretative releases of, the SEC.
K-6
This Agreement may be terminated as to a Series at any time, without the
payment of any penalty by vote of a majority of the members of the Board or by
vote of a majority of the outstanding voting securities of a Series or the
Advisor on not less than 30 days nor more than 60 days written notice to the
Sub-Advisor, or by the Sub-Advisor at any time without the payment of any
penalty, on 60 days written notice to the Advisor and the Fund. This Agreement
will automatically and immediately terminate in the event of its assignment.
Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of such party.
As used in this Section 11, the term 'assignment' shall have the meaning as
set forth in the 1940 Act and the rules and regulations thereunder, subject to
such exemptions as may be granted by the SEC.
12. Non-Exclusivity. Each of the Advisor and the Sub-Advisor hereby
represents and warrants that it is registered as an investment advisor under
the Investment Advisers Act of 1940, as amended. The services of the
Sub-Advisor to the Advisor and the Fund on behalf of each Series are not to be
deemed to be exclusive, and the Sub-Advisor shall be free to render investment
advisory or other services to others (including other investment companies) and
to engage in other activities, so long as its services under this Agreement are
not impaired thereby. It is understood and agreed that officers and directors
of the Sub-Advisor may serve as officers or members of the Board, and that
officers or members of the Board may serve as officers or directors of the
Sub-Advisor to the extent permitted by law; and that the officers and directors
of the Sub-Advisor are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, or directors of any other firm or corporation, including
other investment companies.
13. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Fund or a Series, neither
the Sub-Advisor nor any of its directors, officers or employees will act as
principal or agent or receive any commission. The Sub-Advisor shall not
knowingly recommend that a Series purchase, sell or retain securities of any
issuer in which the Sub-Advisor has a financial interest without obtaining
prior approval of the Advisor prior to the execution of any such transaction.
14. Liability of Sub-Advisor. In the performance of its duties hereunder,
the Sub-Advisor shall be obligated to exercise care and diligence and to act in
good faith to ensure the accuracy of all services performed under this
Agreement, but the Sub-Advisor shall not be liable for any act or omission
which does not constitute willful misfeasance, bad faith or gross negligence on
the part of the Sub-Advisor or its
K-7
officers, Directors or employees, or reckless disregard by the Sub-Advisor of
its duties under this Agreement.
15. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice.
Currently, such addresses are as follows: if for the Sub-Advisor, Grueneburgweg
113-115, Frankfurt, Germany 60323; if for the Fund, One South Street,
Baltimore, Maryland 21202, and if for the Advisor, 280 Park Avenue, New York,
New York 10017.
16. Amendment of This Agreement. No provision of this Agreement may be
changed or waived orally, but only by an instrument in writing signed by the
party against which enforcement of the change or waiver is sought, and no
amendment to this Agreement shall be effective until approved by (a) the Board,
including a majority of the members of the Board who are not interested persons
of the Advisor, the Sub-Advisor or (other than as Board members) the Fund, cast
in person at a meeting called for the purpose of voting on such approval, and,
except as may be otherwise permitted by then current law as modified or
interpreted by any applicable order or orders of the SEC or any rules or
regulations adopted by, or interpretative releases of, the SEC, (b) a majority
of the outstanding voting securities of a Series, as defined in the 1940 Act.
17. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such term or provision of the 1940 Act and to interpretations thereof, if
any, by the United States Courts or in the absence of any controlling decision
of any such court, by rules, regulations, orders or interpretative releases of
the SEC issued pursuant to said Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation, order or interpretative releases of the SEC, such
provision shall be deemed to incorporate the effect of such rule, regulation,
order or interpretative release. Otherwise the provisions of this Agreement
shall be interpreted in accordance with the laws of Maryland.
18. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
19. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
K-8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
[SEAL] DEUTSCHE INVESTORS FUNDS, INC.
Attest: ---------------------------------- By: ----------------------------------
Name: ---------------------------------- Name: ----------------------------------
Title: ----------------------------------
[SEAL] DEUTSCHE ASSET MANAGEMENT, INC.
Attest: ---------------------------------- By: ----------------------------------
Name: ---------------------------------- Name: ----------------------------------
Title: ----------------------------------
[SEAL] DWS INTERNATIONAL PORTFOLIO MANAGEMENT
GmbH
Attest: ---------------------------------- By: ----------------------------------
Name: ---------------------------------- Name: ----------------------------------
Title: ----------------------------------
K-9
Schedule A
Global Biotechnology Fund
K-10
Schedule B
Fee (annualized % of
Fund average daily net assets)
---------------------------------------------------
Global Biotechnology Fund 0.50%
K-11
Exhibit L
GROWTH OPPORTUNITY FUND
FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made as of the day of , by and among
DEUTSCHE INVESTORS FUNDS, INC., a Maryland corporation (the 'Fund'), DEUTSCHE
ASSET MANAGEMENT, INC., a Delaware corporation (the 'Advisor'), and JENNISON
ASSOCIATES LLC, a Delaware limited liability company (the 'Sub-Advisor').
WHEREAS, the Advisor is the investment advisor to the Fund, which is an
open-end, diversified management investment company registered under the
Investment Company Act of 1940, as amended (the '1940 Act'), consisting of
several series of shares, each having its own investment policies.
WHEREAS, the Board of Directors of the Fund (the 'Board') has selected the
Advisor to provide overall investment advice and management, and to provide
certain other services, under the terms and conditions provided in the Advisory
Agreement, dated , between Deutsche Asset Management, Inc.
and Deutsche Investors Funds, Inc. (the 'Advisory Agreement').
NOW THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of Sub-Advisor. The Fund hereby appoints the Sub-Advisor to
act as the Sub-Advisor of each series listed in Schedule A to this Agreement
(each such series, together with all other series subsequently established by
the Fund and made subject to this Agreement in accordance with Section 10,
being herein referred to as 'a Series', and collectively as 'the Series') under
the supervision of the Board and the Advisor, and the Sub-Advisor hereby
accepts such appointment, all subject to the terms and conditions contained
herein.
2. Delivery of Documents. The Fund has furnished the Sub-Advisor with
copies properly certified or authenticated of each of the following:
(a) The Fund's Articles of Incorporation, filed with the State of Maryland
on May 22, 1997 and all amendments thereto (such Articles of
Incorporation, as presently in effect and as they shall from time to
time be amended, are herein called the 'Articles of Incorporation');
L-1
(b) The Fund's By-Laws and all amendments thereto (such By-Laws, as
presently in effect and as they shall from time to time be amended, are
herein called the 'By-Laws');
(c) Resolutions of the Board and shareholders authorizing the appointment of
the Sub-Advisor and approving this Agreement;
(d) The Fund's Registration Statement on Form N-1A under the Securities Act
of 1933, as amended (the '1933 Act') (File No. 333-07008) and under the
1940 Act as filed with the Securities and Exchange Commission ('SEC')
relating to the shares of the Fund on behalf of the Series listed in
Schedule A, and all amendments thereto; and
(e) Each Series' most recent prospectus (such prospectus, as presently in
effect, and all amendments and supplements thereto are herein called
'Prospectus').
The Fund will furnish the Sub-Advisor from time to time with copies,
properly certified or authenticated, of all amendments or supplements to the
foregoing, if any, and all documents, notices and reports filed with the SEC.
The Sub-Advisor will provide the Series with copies of its Form ADV,
including all amendments thereto, as filed with the SEC.
3. Duties of Sub-Advisor. In carrying out its obligations under Section 1
hereof, the Sub-Advisor, shall:
(a) provide the Series with such executive and clerical services as are
deemed advisable by the Board;
(b) determine which issuers and securities shall be represented in the
Series' portfolio and regularly report thereon to the Board;
(c) formulate and implement continuing programs for the purchases and sales
of securities and regularly report thereon to the Board;
(d) take, on behalf of the Series, all actions which appear necessary to
carry into effect such purchase and sale programs as aforesaid,
including the placing of orders for each Series' purchase and sale of
securities;
(e) obtain and evaluate pertinent information about significant developments
and economic, statistical and financial data, domestic, foreign or
otherwise, whether affecting the economy generally or each Series, and
whether concerning the individual issuers whose securities are included
in each Series' portfolio or the activities in which they engage, or
with respect to securities which the Advisor considers desirable for
inclusion in each Series' portfolio;
L-2
(f) provide the Advisor and the Fund with records concerning the
Sub-Advisor's activities which the Fund is required to maintain;
(g) render regular reports to the Advisor and the Fund's officers and
directors concerning the Sub-Advisor's discharge of its
responsibilities; and
(h) discharge the foregoing responsibilities subject to the control of the
Board and the overall supervision of the Advisor and in compliance with
such policies as the Directors or the Advisor may from time to time
establish, subject always to the provisions of the Fund's Articles of
Incorporation and By-Laws, and the 1940 Act, and in compliance with the
objectives, policies, and limitations for each Series as set forth in
each Series' Prospectus and statement of additional information, as
amended from time to time, and applicable laws and regulations.
4. Portfolio Transactions. The Sub-Advisor is authorized in its discretion
to select the brokers or dealers that will execute the purchases and sales of
portfolio securities for a Series and is directed to use its best efforts to
obtain the best net results as described from time to time in a Series'
Prospectus and statement of additional information. The Sub-Advisor will
promptly communicate to the Advisor and to the officers and the Directors of
the Fund such information relating to portfolio transactions as they may
reasonably request.
It is understood that the Sub-Advisor will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Fund or be in breach of
any obligation owing to the Fund under this Agreement, or otherwise, solely by
reason of its having directed a securities transaction on behalf of a Fund to a
broker-dealer in compliance with the provisions of Section 28(e) of the
Securities Exchange Act of 1934 or as otherwise permitted from time to time by
a Prospectus and statement of additional information.
Subject to the policies established by the Board in compliance with
applicable law, the Sub-Advisor may direct Deutsche Bank Securities Inc. ('DB
Securities') or any of its affiliates to execute portfolio transactions for the
Fund on an agency basis. The commissions paid to DB Securities must be, as
required by Rule 17e-1 under the 1940 Act, 'reasonable and fair compared to the
commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar securities
during a comparable period of time.' If the purchase or sale of securities
consistent with the investment policies of each Series or one or more other
accounts of the Sub-Advisor is considered at or about the same time,
transactions in such securities will be allocated among the accounts in a
manner deemed equitable by the Sub-Advisor. DB Securities and the Sub-Advisor
may combine such transactions, in accordance with applicable laws and
regulations, in order to obtain the best net price and most favorable execution.
L-3
The Fund, on behalf of each Series, will not deal with the Sub-Advisor or DB
Securities in any transaction in which the Sub-Advisor or DB Securities acts as
a principal with respect to any part of a Series' order. If DB Securities is
participating in an underwriting or selling group, a Series may not buy
portfolio securities from the group except in accordance with policies
established by the Board in compliance with rules of the SEC.
5. Control by the Fund's Board. Any recommendations concerning a Series'
investment program proposed by the Sub-Advisor and the Advisor pursuant to this
Agreement, as well as any other activities undertaken by the Sub-Advisor on
behalf of a Series pursuant hereto, shall at all times be subject to any
applicable directives of the Board.
6. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Sub-Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules and regulations
adopted thereunder, as amended;
(b) the provisions of the Registration Statement of the Fund under the 1933
Act and the 1940 Act;
(c) the provisions of the Articles of Incorporation;
(d) the provisions of the By-Laws; and
(e) any other applicable provisions of state and federal law.
7. Expenses. The expenses connected with the Fund on behalf of a Series
shall be allocable between the Fund, the Sub-Advisor and the Advisor as follows:
(a) The Sub-Advisor shall furnish at its expense and without cost to the
Fund, the services of one or more officers of the Sub-Advisor, to the
extent that such officers may be required by the Series for the proper
conduct of its affairs.
(b) The Fund assumes and shall pay or cause to be paid all other expenses of
the Fund on behalf of each Series, including, without limitation:
payments to the Advisor under the Advisory Agreement between the Fund
and the Advisor, payments to the Fund's distributor under the Fund's
plan of distribution; the charges and expenses of any registrar, any
custodian or depository appointed by the Fund for the safekeeping of
each Series' cash, portfolio securities and other property, and any
transfer, dividend or accounting agent or agents appointed by the Fund;
brokers' commissions chargeable to the Fund on behalf of each Series in
connection with portfo-
L-4
lio securities transactions to which the Fund is a party; all taxes,
including securities issuance and transfer taxes, and fees payable by
the Fund to Federal, State or other governmental agencies; the costs and
expenses of engraving or printing of certificates representing shares of
the Fund; all costs and expenses in connection with the registration and
maintenance of registration of the Fund and its shares with the SEC and
various states and other jurisdictions (including filing fees, legal
fees and disbursements of counsel); the costs and expenses of printing,
including typesetting, and distributing prospectuses and statements of
additional information of the Fund and supplements thereto to the Fund's
shareholders; all expenses of shareholders' and Directors' meetings and
of preparing, printing and mailing of proxy statements and reports to
shareholders; fees and travel expenses of Directors or Director members
of any advisory board or committee; all expenses incident to the payment
of any dividend, distribution, withdrawal or redemption, whether in
shares or in cash; charges and expenses of any outside service used for
pricing of the Fund's shares; charges and expenses of legal counsel,
including counsel to the Directors of the Fund who are not 'interested
persons' (as defined in the 1940 Act) of the Fund and of independent
certified public accountants, in connection with any matter relating to
the Fund; membership dues of industry associations; interest payable on
Fund borrowings; postage; insurance premiums on property or personnel
(including officers and Directors) of the Fund which inure to its
benefit; extraordinary expenses (including but not limited to, legal
claims and liabilities and litigation costs and any indemnification
related thereto); and all other charges and costs of the Series' or
Fund's operation unless otherwise explicitly provided herein.
8. Compensation. For the services to be rendered hereunder by the
Sub-Advisor, the Advisor shall pay to the Sub-Advisor monthly compensation in
accordance with Schedule B. The Fund on behalf of each Series shall have no
responsibility for such compensation.
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily and the amounts of the daily accruals shall be
paid monthly. For any period less than a full month during which this Agreement
is in effect, the fee shall be prorated according to the proportion, which such
period bears to a full month. Payment of the Sub-Advisor's compensation for the
preceding month shall be made as promptly as possible.
9. Delegation of Sub-Advisory Services. Subject to the provisions of this
Agreement, the duties of the Sub-Advisor, the portion of portfolio assets of
the Series
L-5
that the Sub-Advisor shall manage and the fees to be paid to the Sub-Advisor by
the Advisor under and pursuant to this Agreement or other arrangement entered
into in accordance with this Agreement may be adjusted from time to time by the
Advisor, subject to the prior approval of the members of the Board who are not
'interested persons,' as defined in the 1940 Act.
The Sub-Advisor may, but shall not be under any duty to, perform services on
behalf of the Fund which are not required by this Agreement upon the request of
the Board. Such services will be performed on behalf of the Fund and the
Sub-Advisor's charges in rendering such services will be billed monthly to the
Fund, subject to examination by the Fund's independent certified public
accountants. Payment or assumption by the Sub-Advisor of any Fund expense that
the Sub-Advisor is not required to pay or assume under this Agreement shall not
relieve the Sub-Advisor of any of its obligations to the Fund nor obligate the
Sub-Advisor to pay or assume any similar Fund expenses on any subsequent
occasions.
10. Additional Series and Classes. In the event that the Fund establishes
one or more series of Shares or one or more classes of Shares after the
effectiveness of this Agreement, such series of shares or classes of shares, as
the case may be, shall become Series and Classes under this Agreement upon
approval of this Agreement by the Fund with respect to the series of shares or
class of shares and the execution of an amended Schedule A reflecting the
applicable names and terms.
11. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall remain in effect with respect to a Series until two
years from the date first set forth above, and thereafter, for periods of one
year so long as such continuance thereafter is specifically approved at least
annually (a) by the vote of a majority of those members of the Board who are
not parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and,
except as may be otherwise permitted by then current law as modified or
interpreted by any applicable order or orders of the SEC or any rules or
regulations adopted by, or interpretative releases of, the SEC, (b) by vote of
a majority of the outstanding voting securities of a Series; provided, however,
that if the shareholders of a Series fail to approve the Agreement as provided
in Section 15 of the 1940 Act, the Sub-Advisor may continue to serve hereunder
in the manner and to the extent permitted by the 1940 Act and rules and
thereunder. The foregoing requirement that continuance of this Agreement be
'specifically approved at least annually' shall be construed in a manner
consistent with the 1940 Act as modified or interpreted by any applicable order
or orders of the SEC or any rules or regulations adopted by, or interpretative
releases of, the SEC.
L-6
This Agreement may be terminated as to a Series at any time, without the
payment of any penalty by vote of a majority of the members of the Board or by
vote of a majority of the outstanding voting securities of a Series or the
Advisor on not less than 30 days nor more than 60 days written notice to the
Sub-Advisor, or by the Sub-Advisor at any time without the payment of any
penalty, on 60 days written notice to the Advisor and the Fund. This Agreement
will automatically and immediately terminate in the event of its assignment.
Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed postpaid, to the other party at any office of such party.
As used in this Section 11, the term 'assignment' shall have the meaning as
set forth in the 1940 Act and the rules and regulations thereunder, subject to
such exemptions as may be granted by the SEC.
12. Non-Exclusivity. Each of the Advisor and the Sub-Advisor hereby
represents and warrants that it is registered as an investment advisor under
the Investment Advisers Act of 1940, as amended. The services of the
Sub-Advisor to the Advisor and the Fund on behalf of each Series are not to be
deemed to be exclusive, and the Sub-Advisor shall be free to render investment
advisory or other services to others (including other investment companies) and
to engage in other activities, so long as its services under this Agreement are
not impaired thereby. It is understood and agreed that officers and directors
of the Sub-Advisor may serve as officers or members of the Board, and that
officers or members of the Board may serve as officers or directors of the
Sub-Advisor to the extent permitted by law; and that the officers and directors
of the Sub-Advisor are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, or directors of any other firm or corporation, including
other investment companies.
13. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Fund or a Series, neither
the Sub-Advisor nor any of its directors, officers or employees will act as
principal or agent or receive any commission. The Sub-Advisor shall not
knowingly recommend that a Series purchase, sell or retain securities of any
issuer in which the Sub-Advisor has a financial interest without obtaining
prior approval of the Advisor prior to the execution of any such transaction.
14. Liability of Sub-Advisor. In the performance of its duties hereunder,
the Sub-Advisor shall be obligated to exercise care and diligence and to act in
good faith to ensure the accuracy of all services performed under this
Agreement, but the Sub-Advisor shall not be liable for any act or omission
which does not constitute willful misfeasance, bad faith or gross negligence on
the part of the Sub-Advisor or its
L-7
officers, Directors or employees, or reckless disregard by the Sub-Advisor of
its duties under this Agreement.
15. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice.
Currently, such addresses are as follows: if for the Sub-Advisor, 466 Lexington
Avenue, New York, New York 10017; if for the Fund, One South Street, Baltimore,
Maryland 21202, and if for the Advisor, 280 Park Avenue, New York, New York
10017.
16. Amendment of This Agreement. No provision of this Agreement may be
changed or waived orally, but only by an instrument in writing signed by the
party against which enforcement of the change or waiver is sought, and no
amendment to this Agreement shall be effective until approved by (a) the Board,
including a majority of the members of the Board who are not interested persons
of the Advisor, the Sub-Advisor or (other than as Board members) the Fund, cast
in person at a meeting called for the purpose of voting on such approval, and,
except as may be otherwise permitted by then current law as modified or
interpreted by any applicable order or orders of the SEC or any rules or
regulations adopted by, or interpretative releases of, the SEC, (b) a majority
of the outstanding voting securities of a Series, as defined in the 1940 Act.
17. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such term or provision of the 1940 Act and to interpretations thereof, if
any, by the United States Courts or in the absence of any controlling decision
of any such court, by rules, regulations, orders or interpretative releases of
the SEC issued pursuant to said Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation, order or interpretative releases of the SEC, such
provision shall be deemed to incorporate the effect of such rule, regulation,
order or interpretative release. Otherwise the provisions of this Agreement
shall be interpreted in accordance with the laws of Maryland.
18. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
19. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
L-8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
[SEAL] DEUTSCHE INVESTORS FUNDS, INC.
Attest: ------------------------ By: ------------------------
Name: ------------------------ Name: ------------------------
Title: ------------------------
[SEAL] DEUTSCHE ASSET MANAGEMENT, INC.
Attest: ------------------------ By: ------------------------
Name: ------------------------ Name: ------------------------
Title: ------------------------
[SEAL] JENNISON ASSOCIATES LLC
Attest: ------------------------ By: ------------------------
Name: ------------------------ Name: ------------------------
Title: ------------------------
L-9
Schedule A
Growth Opportunity Fund
L-10
Schedule B
--------------------------------------------------
Growth Opportunity Fund
--------------------------------------------------
Advisory Fee as a % of
Average Daily Net Assets Average Daily Net Assets
--------------------------------------------------
First $250 million 0.48%
--------------------------------------------------
Next $250 million 0.45%
--------------------------------------------------
In excess of $500 million 0.42%
--------------------------------------------------
L-11
Exhibit M
Deutsche Investors Portfolios Trust
FORM OF SUB-ADVISORY AGREEMENT
Agreement made as of between DEUTSCHE ASSET MANAGEMENT, INC., a
Delaware corporation (the 'Investment Advisor') and DEUTSCHE ASSET MANAGEMENT
(JAPAN) LIMITED, a company organized under the laws of the Federal Republic of
Germany (hereinafter called the 'Sub-Advisor').
W I T N E S S E T H:
WHEREAS, the Investment Advisor has entered into an Investment Management
Agreement dated as of (the 'Investment Advisory Agreement') with the
Deutsche Investors Portfolios Trust, an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the '1940
Act') and organized as a trust under the laws of the State of New York (the
'Trust') on behalf of one non-diversified sub-trust named herein (such
sub-trust, together with each sub-trust hereafter established by the Board of
Trustees of the Trust (the 'Board of Trustees') and made subject to this
Agreement in accordance with Section 11 hereof, individually a 'Portfolio' and
collectively, the 'Portfolios'), pursuant to which the Investment Advisor will
act as investment advisor to the sub-trusts named in the Investment Advisory
Agreement;
WHEREAS, the Investment Advisory Agreement contemplates that the Investment
Advisor may appoint a sub-advisor to perform certain services relating to the
management of the investment operations of the sub-trusts of the Trust, and the
Sub-Advisor is willing to render such investment advisory services to the
respective Portfolios designated herein; and
WHEREAS, the Sub-Advisor is registered as an investment advisor under the
Investment Advisers Act of 1940.
NOW, THEREFORE, in consideration of the premises and mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. The Investment Advisor hereby appoints the Sub-Advisor to act as
sub-advisor to the Portfolios set forth under its name on Schedule A and for
the period and on the terms set forth in this Agreement. The Sub-Advisor
accepts such appointment and agrees to render the services herein set forth,
for the compensation herein provided.
M-1
2. Subject to the general supervision of the Board of Trustees and the
Investment Advisor, the Sub-Advisor shall manage the investment operations of
each Portfolio and the composition of each Portfolio's holdings of securities
and other investments, including cash, the purchase, retention and disposition
thereof and agreements relating thereto, in accordance with such Portfolio's
investment objective and policies as stated in the Registration Statement (as
defined in paragraph 3(d) of this Agreement) and subject to the following
understandings:
(a) The Sub-Advisor, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Declaration of Trust
and By-Laws of the Trust and the Registration Statement and with the
instructions and directions of the Board of Trustees, and will conform
to and comply with the requirements of the 1940 Act and all other
applicable federal and state laws and regulations;
(b) the Sub-Advisor shall use the same skill and care in the management of
each Portfolio's investments as it uses in the administration of other
accounts for which it has investment responsibility as agent;
(c) the Sub-Advisor shall determine the securities or other investments to
be purchased, sold or lent by the Portfolio and as agent for each
Portfolio will effect portfolio transactions pursuant to its
determinations either directly with the issuer or with any broker and/or
dealer in such securities, including a broker affiliated with the
Sub-Advisor; in placing orders with brokers and/or dealers the
Sub-Advisor intends to seek best price and execution for purchases and
sales; the Sub-Advisor shall also determine whether or not a Portfolio
shall enter into repurchase or reverse repurchase agreements;
On occasions when the Sub-Advisor deems the purchase or sale of a security
or other investment to be in the best interest of a Portfolio as well as other
customers of the Sub-Advisor, the Sub-Advisor may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to, aggregate the
securities to be so sold or purchased on behalf of such Portfolio and such
other customer of the Sub-Advisor in order to obtain best execution, including
lower brokerage commissions, if applicable. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Advisor in the manner it considers to be
the most equitable and consistent with its fiduciary obligations to a Portfolio;
(d) the Sub-Advisor shall maintain a set of books and records with respect
to each Portfolio's securities transactions as required by the Advisers
Act and other applicable laws and regulations and shall render to the
Board of Trustees such periodic and special reports as the Board of
Trustees may reasonably request; and
M-2
(e) the services of the Sub-Advisor to the Trust under this Agreement are
not to be deemed exclusive, and the Sub-Advisor shall be free to render
similar services to others.
Notwithstanding the foregoing, the Sub-Advisor is not authorized, and shall
not be deemed to have assumed any duties under this Agreement, to make any
business, operational or management decisions on behalf of the Trust or any
Portfolio other than with respect to the investment operations and composition
of a Portfolio's holdings of securities and other investments as set forth
herein.
3. The Investment Advisor has delivered copies of each of the following
documents to the Sub-Advisor and will promptly notify and deliver to it all
future amendments and supplements, if any:
(a) Declaration of Trust of the Trust (such Declaration of Trust, as
presently in effect and as amended from time to time, is herein called
the 'Declaration of Trust');
(b) By-Laws of the Trust (such By-Laws, as presently in effect and as
amended from time to time, are herein called the 'By-Laws');
(c) Certified resolutions of the Board of Trustees authorizing the
appointment of the Investment Advisor and approving the form of this
Agreement;
(d) The Trust's Notification of Registration on Form N-8A under the 1940
Act, its Registration Statement on Form N-1A under the 1940 Act (File
No. 811-8375) and the Registration Statement on Form N-lA of Deutsche
Investors Funds, Inc. (File No. 333-07008) under the Securities Act of
1933, as amended, and the 1940 Act, as filed with the Securities and
Exchange Commission (the 'Commission') on May 23, 1997, including all
amendments thereto (together with the Registration Statement of the
Trust, the 'Registration Statement').
4. The Sub-Advisor shall keep the books and records required to be
maintained by it pursuant to paragraph 2(e) of this Agreement. The Sub-Advisor
agrees that all records that it maintains for the Trust are the property of the
Trust and it will promptly surrender any of such records to the Trust or to the
Investment Advisor upon request. The Sub-Advisor further agrees to preserve for
the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act any
such records as are required to be maintained by the Investment Advisor with
respect to the Portfolios by Rule 31a-2 of the Commission under the 1940 Act.
5. During the term of this Agreement, the Sub-Advisor will pay all
expenses, including personnel costs and overhead, incurred by it in connection
with its activ-
M-3
ities under this Agreement, other than the cost of securities and investments
purchased or sold for the Portfolios (including taxes and brokerage
commissions, if any) and extraordinary expenses.
6. The Investment Advisor shall continue to have responsibility for all
services to be provided to the Portfolios pursuant to the Investment Advisory
Agreement and shall oversee and review the Sub-Advisor's performance of its
duties under this Agreement.
7. For the services provided and the expenses borne pursuant to this
Agreement, the Investment Advisor will pay to the Sub-Advisor, as full
compensation therefor, a fee, calculated daily and payable monthly in arrears,
at an annual rate equal to the percentage of the average daily net assets of
each Portfolio specified in Schedule A hereto.
Subject to the provisions of this Agreement, the duties of the Sub-Advisor,
the portion of Portfolio assets that such Sub-Advisor shall manage and the fees
to be paid to the Sub-Advisor by the Investment Advisor under and pursuant to
this Agreement or other arrangement entered into in accordance with this
Agreement may be adjusted from time to time by the Investment Advisor, subject
to the prior approval of the members of the Board of Trustees who are not
'interested persons', as defined in the 1940 Act.
8. The Sub-Advisor shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Investment Advisor, the Trust or any
Portfolio in connection with the matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on its part in the performance of its duties or from reckless disregard by it
of its obligations and duties under this Agreement.
9. This Agreement shall continue in effect until the date two years after
the date of its execution and shall continue in effect from year to year
thereafter with respect to each Portfolio if such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated with respect to the
Trust in its entirety or with respect to any Portfolio, at any time, without
the payment of any penalty, (a) by the Investment Advisor, or (b) by the Trust,
by vote of a majority of all the Board of Trustees or by vote of a majority of
the outstanding voting securities (as defined in the 1940 Act) of the Trust or
such Portfolio, as the case may be, in each case on 60 days' written notice to
the Sub-Advisor, or by the Sub-Advisor with respect to its respective
Portfolios, at any time, without the payment of any penalty, on 60 days'
written notice to the Investment Advisor and to the Trust. This Agreement will
automatically and immedi-
M-4
ately terminate in the event of its 'assignment' (as defined in the 1940 Act)
or upon termination of the Investment Advisory Agreement.
10. The Sub-Advisor shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein or
authorized by the Board of Trustees and the Investment Advisor from time to
time, have no authority to act for or represent the Trust or any Portfolio in
any way or otherwise be deemed an agent of the Trust or any Portfolio.
11. This Agreement may be amended by the mutual consent of the parties. Any
such amendment shall also require the consent of the Trust, which must be
approved (a) by vote of a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such amendment, and (b)
by vote of a majority of the outstanding voting securities of the Trust or, in
the case of any such amendment affecting only one or several Portfolios, a
majority of the outstanding voting securities of each such Portfolio. In the
event that the Board of Trustees establish one or more additional sub-trusts
with respect to which they retain the Investment Advisor to act as investment
advisor, the Investment Advisor and the Sub-Advisor may amend Schedule A hereto
to add each such sub-trust and specify the fee payable to the Sub-Advisor in
respect thereof, in which event such sub-trust shall become subject to the
provisions of this Agreement and be deemed a 'Portfolio' hereunder to the same
extent as the existing Portfolios, except to the extent that such provisions
may be modified with respect to any additional Portfolio in writing by the
Investment Advisor and the Sub-Advisor at the time of the addition of the
Portfolio.
12. Notices of any kind to be given hereunder shall be in writing and shall
be duly given if mailed or delivered as follows: (a) to the Sub-Advisor at
Sanno Park Tower, 2-11-1, Nagata-Cho, Chiyoda-Ku, Tokyo, Japan 100-6173,
Attention: President, with a copy to the Investment Advisor; (b) to the
Investment Advisor at 280 Park Avenue, New York, New York 10017, Attention:
President; (c) to the Trust at Cardinal Avenue, George Town, Grand Cayman,
Cayman Islands, BWI; or (d) at such other address or to such other individual
as any of the foregoing shall designate by notice to the others.
13. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
14. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
M-5
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the date set forth above.
DEUTSCHE ASSET MANAGEMENT, INC.
By: ------------------------
Name: ------------------------
Title: ------------------------
DEUTSCHE ASSET MANAGEMENT
(JAPAN) LIMITED
By: ------------------------
Name: ------------------------
Title: ------------------------
By: ------------------------
Name: ------------------------
Title: ------------------------
Acknowledged and Confirmed.
DEUTSCHE INVESTORS PORTFOLIOS
TRUST
Attest: ------------------------
Name: ------------------------
Title: ------------------------
M-6
Schedule A
--------------------------------------------------
Fee
(annualized % of average
Portfolio daily net assets)
--------------------------------------------------
--------------------------------------------------
Japanese Equity Portfolio 0.60%
--------------------------------------------------
M-7
Exhibit N
Principal Occupations of Each Director
and Principal Executive Officer of DWS
-----------------------------------------------------
Name Principal Occupation
-----------------------------------------------------
Udo Behrenwaldt Managing Director and
Spokesman of the Board of
the Directors
-----------------------------------------------------
Axel-Guenter Benker Managing Director
-----------------------------------------------------
Klaus Kaldemorgen Managing Director
-----------------------------------------------------
Heinz-Wilhelm Fesser Managing Director
-----------------------------------------------------
Holger Naumann Director
-----------------------------------------------------
Michael Bergmann Director
-----------------------------------------------------
Ralf Ring Vice President
-----------------------------------------------------
Henning Gebhardt Vice President
-----------------------------------------------------
Principal Occupations of Each Director
and Principal Executive Officer of Jennison
-----------------------------------------------------
Name Principal Occupation
-----------------------------------------------------
Michael Anthony Del Balso Executive Vice President
and Director
-----------------------------------------------------
John Howard Hobbs Chief Executive Officer,
Chairman and Director
-----------------------------------------------------
Karen Elizabeth Kohler Chief Compliance Officer,
Executive Vice President
and Director
-----------------------------------------------------
Ann Kathleen McCarragher Executive Vice President
and Director
-----------------------------------------------------
Spiros Segalas President and Director
-----------------------------------------------------
John Robert Strangfeld Director
-----------------------------------------------------
Kevin Charles Uebelein Director
-----------------------------------------------------
Bruce Bernard Winograd Director
-----------------------------------------------------
Mary-Jane Flaherty Director
-----------------------------------------------------
Philip Nicholas Russo Director
-----------------------------------------------------
Victor Ying-Wing Sim Director
-----------------------------------------------------
N-1
Principal Occupations of Each Director
and Principal Executive Officer of Deutsche Asset Management (Japan) Limited
-----------------------------------------------------
Name Principal Occupation
-----------------------------------------------------
Isao Sakaguchi Director and President
-----------------------------------------------------
Anthony Jude Lally Managing Director
-----------------------------------------------------
Masaki Fukuda Director, Head of
Compliance
-----------------------------------------------------
Brian Edwin Scullin Part Time Director
-----------------------------------------------------
Timothy John Hudson Chief Operating Officer
-----------------------------------------------------
Yoshikane Takahashi Financial Officer
-----------------------------------------------------
N-2
Exhibit O
Information Regarding Investment Companies Advised or Sub-Advised By DWS
Other than the Global Biotechnology Fund and the Japanese Equity Fund, DWS
does not advise or sub-advise any other registered U.S. investment companies
with similar Fund objectives to the aforementioned Funds.
Information Regarding Investment Companies Advised or Sub-Advised By Jennison
Assets Under
Management as of Contractual
Funds with similar investment objectives May 31, 2002 Sub-Advisory fees
------------------------------------------------------------------------------
Growth Opportunity Fund $3,857,928.57 0.48%/1/
Prudential U.S. Emerging Growth Fund, Inc. $ 520,178,634* Note 1
Strategic Partners Opportunity Funds $ 86,115,514* Note 2
The Prudential Series Fund, Inc.--SP
Prudential U.S. Emerging Growth Portfolio $ 44,064,861 0.30%
- --------
* This figure represents only that portion of the Fund's assets managed by
Jennison.
/1 /For the Fund's sub-advisory fee schedule, please see Exhibit G.
Note 1--0.30% on the first $1 billion Jennison manages and 0.261% on assets in
excess of $1 billion.
Note 2--0.50% on the first $1 billion Jennison manages and 0.40% on assets in
excess of $1 billion.
Information Regarding Investment Companies Advised or Sub-Advised By Deutsche
Asset Management (Japan) Limited
Assets Under
Management as of Contractual
Funds with similar investment objectives May 31, 2002 Sub-Advisory fees
---------------------------------------------------------------------------
Japanese Equity Portfolio $ 3,700,360.69 0.60%/1/
Japanese Equity Fund $ 3,700,360.69 --/1/
Scudder Japan Fund, Inc. $376,458,179.10 0.28%
- --------
/1/ Japanese Equity Portfolio is the master portfolio. The Japanese Equity Fund
is the only feeder fund to the Japanese Equity Portfolio. The advisory fee
is paid by the master portfolio under the advisory agreement and allocated
to the feeder fund.
O-1
For more information please call your Fund's information agent,
Georgeson Shareholder Communications, Inc. at (866) 474-6829.
Flag DIFI #16
Deutsche Asset Management [/] Vote by Touch-Tone Phone, by Mail or via the Internet!
A Member of the Deutsche Bank Group CALL: To vote by phone call toll-free 1-888-221-0697 and
use the control number on the front of your proxy card.
Deutsche Investors Funds, Inc. INTERNET: Vote on the Internet at www.proxyweb.com and use the
P.O. BOX 9132, HINGHAM, MA 02043-9132 control number on the front of your proxy card.
MAIL: Return the signed proxy card in the enclosed envelope.
Do not return your proxy card if you vote by phone or Internet.
*** CONTROL NUMBER: 999 999 999 999 99 ***
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
FUND NAME PRINTS HERE To Be Held August 16, 2002 at 10:00 am, Eastern time
The undersigned hereby appoints Bruce A. Rosenblum, Tammie Lee and Savonne L.
Ferguson and each of them, with the 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
Proposals 1, 2A, 2B, 3A and 3B, as applicable. All ABSTAIN votes will be counted
in determining the existence of a quorum at the Special Meeting and for all
Proposals will have the effect of votes AGAINST the Proposals.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WITH RESPECT TO YOUR
FUND. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2A, 2B, 3A and
3B, AS APPLICABLE.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED
AND DATED.
Dated: ________________________
------------------------------------------
------------------------------------------
Signature(s) (Title(s), if applicable)
Joint owners should each sign. Please
sign exactly as your name or names appear
on this card. When signing as an attorney,
executor, administrator, trustee, guardian
or corporate officer, please give your
full title as such.
Deutsche Investors Funds #16
Please fill in box(es) as shown using black or |X|
blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
The Special Meeting is being held to consider and vote on the following matters
for the Company and the Funds, as indicated below and more fully described under
the corresponding Proposals in the Proxy Statement, and such other matters as
may properly come before the Special Meeting or any adjournments thereof:
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
PROPOSAL 1: (Voted on by All Funds together) To elect eleven Directors [_] [_] [_]
of the Company to hold office until their respective successors
have been duly elected and qualified or until their earlier
resignation or removal, whose terms will be effective on the date
of the Special Meeting or, in the event of an adjournment or
adjournments of the Special Meeting, such later date as shareholder
approval is obtained.
(01) Richard R. Burt (05) Joseph R. Hardiman (09) Philip Saunders, Jr.
(02) S. Leland Dill (06) Richard J. Herring (10) William N. Searcy
(03) Martin J. Gruber (07) Graham E. Jones (11) Robert H. Wadsworth
(04) Richard T. Hale (08) Rebecca W. Rimel
To withhold authority to vote, mark `For All Except' and write the nominees
number on the line below.
- --------------------------------------------------------------------------------
PROPOSAL 2A: (Global Biotechnology and Growth Opportunity only) To approve a FOR AGAINST ABSTAIN
new investment advisory agreement (a `New Advisory Agreement') [_] [_] [_]
between the Company, on behalf of the Funds, and Deutsche Asset
Management, Inc. (`DeAM, Inc.') to be implemented within two years
of the date of the Special Meeting upon approval of the members of the
Company's Board of Directors who are not `interested persons' (as
defined in the Investment Company Act of 1940, as amended).
PROPOSAL 2B: (Top 50 US and Japanese Equity only) To approve a new investment [_] [_] [_]
advisory agreement (a `New Advisory Agreement') between the Trust,
on behalf of the Portfolios, and DeAM, Inc. to be implemented
within two years of the date of the Special Meeting upon approval
of the members of the Trust's Board of Trustees who are not
`interested persons' (as defined in the Investment Company Act of 1940,
as amended).
PROPOSAL 3A: (Global Biotechnology and Growth Opportunity only) To approve a new [_] [_] [_]
sub-advisory agreement (a `New Sub-Advisory Agreement') among the
Company, on behalf of the Funds, DeAM, Inc. and each Fund's respective
sub-advisor (each a `Sub-Advisor') to be implemented within two years of
the date of the Special Meeting upon approval of the members of the
Company's Board of Directors who are not `interested persons' (as
defined in the Investment Company Act of 1940, as amended).
PROPOSAL 3B: (Japanese Equity only) To approve a new sub-advisory agreement (a [_] [_] [_]
`New Sub-Advisory Agreement') between DeAM Inc. and Deutsche
Asset Management (Japan) Limited (`DeAMJ' or the 'Sub-Advisor')
to be implemented upon approval of the members of the Trust's Board
of Trustees who are not `interested persons' (as defined in the
Investment Company Act of 1940, as amended)