-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G7X8zFg9RYkN/K356SPtb4q7CvjF6bw1J3kzPwe3gFCzhpPKynvnpk+/aEv2EYTG lt2vz1kq+Vq5Fz/+zGTu2Q== 0001047469-99-006675.txt : 19990222 0001047469-99-006675.hdr.sgml : 19990222 ACCESSION NUMBER: 0001047469-99-006675 CONFORMED SUBMISSION TYPE: N-1A PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19990219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMERGING GERMANY FUND INC CENTRAL INDEX KEY: 0000860127 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133560296 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-1A SEC ACT: SEC FILE NUMBER: 333-72679 FILM NUMBER: 99546156 FILING VALUES: FORM TYPE: N-1A SEC ACT: SEC FILE NUMBER: 811-06038 FILM NUMBER: 99546157 BUSINESS ADDRESS: STREET 1: FOUR EMBARCADERO CENTER CITY: SAN FRANCISCO STATE: CA ZIP: 94111 MAIL ADDRESS: STREET 1: FOUR EMBARCADERO CENTER STREET 2: SUITE 3000 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 FORMER COMPANY: FORMER CONFORMED NAME: DRESDNER EMERGING GERMANY FUND INC DATE OF NAME CHANGE: 19900306 N-1A 1 FORM N-1A - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 - ------------------------------------------------------------------------------- FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X] Pre-Effective Amendment No. [ ] Post-Effective Amendment No. [ ] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X] Amendment No. (Check appropriate box or boxes.) DRESDNER RCM INVESTMENT FUNDS INC. ---------------------------------- (Exact Name of Registrant as specified in Charter) Four Embarcadero Center San Francisco, California 94111 -------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code (415) 954-5400 ------------- - ------------------------------------------------------------------------------- Robert J. Goldstein DRESDNER RCM INVESTMENT FUNDS INC. Four Embarcadero Center San Francisco, California 94111 -------------------------------- (Name and Address of Agent for Service) (800) 726-7240 - ------------------------------------------------------------------------------- Copies to: Robert J. Goldstein Michael Glazer Associate General Counsel Paul, Hastings, Janofsky & Walker LLP Dresdner RCM Global Investors LLC 555 South Flower Street Four Embarcadero Center Los Angeles, California 90071 San Francisco, California 94111 Approximate Date of Proposed Public Offering: May 1, 1999 ----------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a) may determine. DRESDNER RCM INVESTMENT FUNDS INC. DRESDNER RCM EUROPE FUND CROSS REFERENCE SHEET BETWEEN ITEMS OF PART A AND B OF FORM N-1A AND THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION ITEM NUMBER OF PART A OF FORM N-1A INFORMATION REQUIRED IN A PROSPECTUS 1. Front and Back Cover Pages Front and Back Cover Pages 2. Risk/Return Summary: Investments, Risk/Return Summary Risks, and Performance 3. Risk/Return Summary: Fee Table Fees and Expenses 4. Investment Objectives, Principal Investment Objective and Policies; Investment Strategies, and Related Other Investment Practices; Risks Investment Risks 5. Management's Discussion of Fund * Performance 6. Management, Organization, and Organization and Management Capital Structure 7. Shareholder Information Buying Shares; Selling Shares; Other Stockholder Services; Dividends, Distributions and Taxes 8. Distribution Arrangements Organization and Management; The Distributor 9. Financial Highlights Information Financial Highlights DRESDNER RCM INVESTMENT FUNDS INC. DRESDNER RCM EUROPE FUND CROSS REFERENCE SHEET BETWEEN ITEMS OF PART A AND B OF FORM N-1A AND THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION (CONTINUED) ITEM NUMBER OF PART B OF FORM N-1A INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION 10. Cover Page and Table of Contents Cover Page and Table of Contents 11. Fund History Fund History 12. Description of the Fund and Its Investment Objectives and Policies; Investments and Risks Investment and Risk Considerations; Investment Restrictions 13. Management of the Fund The Investment Manager 14. Control Persons and Principal Directors and Officers; Description Holders of Securities of Capital Shares 15. Investment Advisory and Other The Investment Manager; The Services Distributor; Additional Information 16. Brokerage Allocation and Other Execution of Portfolio Transactions Practices 17. Capital Stock and Other Securities Description of Capital Shares 18. Purchase, Redemption and Pricing of Purchase and Redemption of Shares Shares 19. Taxation of the Fund Dividends, Distributions and Tax Status 20. Underwriters The Distributor 21. Calculation of Peformance Data Investment Results 22. Financial Statements * * Not Applicable DRESDNER RCM INVESTMENT FUNDS INC. ------------------------------------------------------------------------- Dresdner RCM Europe Fund ------------------------------------------------------------------------- ____________, 1999 This prospectus contains essential information for anyone considering an investment in this fund. Please read this document carefully and retain it for future reference. As with all mutual funds, the Securities and Exchange Commission does not guarantee that the information in this Prospectus is accurate or complete, and has not judged this fund for its investment merit. It is a criminal offense to state or suggest otherwise. 1 DRESDNER RCM INVESTMENT FUNDS INC. TABLE OF CONTENTS - -------------------------------------------------------------------------------- RISK/RETURN SUMMARY AND FUND EXPENSES - -------------------------------------------------------------------------------- THIS SECTION SUMMARIZES THE 3 Risk/Return Summary FUND'S INVESTMENTS, RISKS, 5 Fees and Expenses PAST PERFORMANCE, AND FEES. INVESTMENT OBJECTIVES, POLICIES AND RISKS - -------------------------------------------------------------------------------- THIS SECTION PROVIDES DETAILS 7 Investment Objective and Policies ABOUT THE FUND'S INVESTMENT 9 Other Investment Practices OBJECTIVE, POLICIES AND RISKS. 10 Changing the Investment Objectives and Policies 10 Investment Risks ORGANIZATION AND MANAGEMENT - -------------------------------------------------------------------------------- THIS SECTION PROVIDES DETAILS 14 The Fund and the Investment Manager ABOUT THE PEOPLE AND 14 The Portfolio Managers ORGANIZATIONS WHO OVERSEE THE 14 Management Fees and Other Expenses FUND. 15 The Distributor 15 Pending Litigation STOCKHOLDER INFORMATION - -------------------------------------------------------------------------------- THIS SECTION TELLS YOU HOW TO 16 Buying Shares BUY, SELL AND EXCHANGE SHARES, 19 Selling Shares HOW WE VALUE SHARES, AND HOW WE 19 Other Stockholder Services PAY DIVIDENDS AND DISTRIBUTIONS. 22 Dividends, Distributions and Taxes OTHER INFORMATION ABOUT THE FUND - -------------------------------------------------------------------------------- THIS SECTION PROVIDES DETAILS ON 24 Financial Highlights SELECTED FINANCIAL HIGHLIGHTS OF THE FUND 2 RISK RETURN SUMMARY AND FUND EXPENSES RISK/RETURN SUMMARY Goal: The Fund's goal is to seek long term growth of capital by investing in equity securities of European companies. Principal Investment The Fund invests primarily in common stocks of Strategies: companies located in Europe, from both European Economic and Monetary Union ("EMU") and non-EMU countries. Under normal market conditions, the fund invests at least 75% of its total assets in these companies. The Fund anticipates that it will invest most of its assets in equity securities of issuers located in Western European countries. The Fund focuses on companies that it expects will have higher than average rates of growth and strong potential for capital appreciation. The Morgan Stanley Capital International (MSCI) Europe Index is the Fund's performance benchmark. The Fund bases its security selection on the relative investment merits of different industries and companies throughout Europe and therefore will not seek to duplicate the country and sector allocations of the MSCI Europe Index. Principal Investment Because the value of the Fund's investments will Risks: fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund, or the Fund could underperform other investments. The values of the Fund's investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. The performance of foreign securities depends in part on the political and economic environments and other overall economic conditions in the countries where the Fund invests. Because the Fund focuses on certain developed European countries, it will be more susceptible than other funds to market and other conditions affecting those countries. The stock prices of smaller and newer companies fluctuate more than those of larger, more established companies. Emerging country markets involve greater risk and volatility than more developed markets. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 3 On ______, 1999, the Fund converted from a closed-end fund (without redeemable securities) to an open-end fund. Effective February 9, 1999, the Fund expanded its investment mandate from investing primarily in equity securities of German companies to investing primarily in equity securities of European companies. The bar chart and table below therefore reflect only the performance of the Fund before the expansion of its investment mandate. The bar chart shows the performance of the Fund's shares from year to year since its inception. Both the chart and table below assume reinvestment of dividends and distributions. Of course, past performance does not indicate how the Fund will perform in the future. Year-by-Year Total Returns for Class N Shares [GRAPH] For the period covered by this year-by-year total return chart, the Fund's highest quarterly return was ___% (for the quarter ended ______) and the lowest quarterly return was ___% (for the quarter ended _____). The following table shows how the Fund's average annual total returns for the past one year, five years and the life of the Fund compared to that of the DAX100 Index and MDAX Index. Average Annual Total Returns (through December 31, 1998)
Date of Past Five Life of Inception Year Years Fund Class N Shares ,1990 % % % Class I Shares* ,1990 % % % DAX100 Index** ,1990 % % % MDAX Index** ,1990 % % %
The returns for Class I shares differ from the Class N shares because of differences in each Class's expenses. *Class I Shares of the Fund commenced operations on _________, 1999. **The DAX 100 Index measures the total return of the 100 most highly capitalized stocks traded on the Frankfurt Stock Exchange. The MDAX Index is a total rate of return index of 70 medium sized German Companies. For periods after 1998, the Fund will compare its performance to the MSCI Europe Index. 4 FEES AND EXPENSES As an investor in the Fund, you will pay the following fees and expenses. The Fund does not have any front-end or contingent sales loads and does not charge you for reinvesting dividends.
SHAREHOLDER FEES Class of Shares (FEES PAID DIRECTLY FROM YOUR INVESTMENT) --------------- Class N Class I ------- ------- Redemption or exchange fees (1) 1% 1% ANNUAL FUND OPERATING EXPENSES (FEES PAID FROM FUND ASSETS) Management Fees 1.00% 1.00% Rule 12b-1 fee 0.25% NONE Other expenses(2) 1.48% 1.48% Total annual Fund operating expenses 2.73% 2.48% Fee waiver and/or expense reimbursement(3) 1.13% 1.13% Net expenses(3) 1.60% 1.35%
1 The fund charges a 1.00% redemption fee if you redeem shares before ____, 1999. 2 These expenses are based on estimated expenses for the current fiscal year. 3 The Investment Manager has agreed, until at least ___________, 2002, to pay each quarter the amount, if any, by which the ordinary operating expenses for the quarter (except interest, taxes and extraordinary expenses) exceed the annualized rate of 1.60% for Class N and 1.35% for Class I. Such amounts are subject to possible future reimbursement. 5 EXPENSE EXAMPLE Use this table to compare fees and expenses of the Fund with those of other funds. It illustrates the amount of fees and expenses you would pay assuming: - $10,000 investment in the Fund - 5% annual return - redemption at the end of each period - no changes in the Fund's operating expenses Because this example is hypothetical and for comparison only, your actual costs will be different.
1 3 5 10 Year Years Years Years Class N $160 $500 $870 $1,900 Class I $140 $430 $740 $1,620
6 INVESTMENT OBJECTIVES, POLICIES AND RISKS INVESTMENT OBJECTIVE AND POLICIES HOW DOES THE FUND SELECT EQUITY INVESTMENTS? While the Fund emphasizes investments in growth companies, the Fund also may invest in other companies that are not traditionally considered to be growth companies, such as emerging growth companies and cyclical and semi-cyclical companies in developing economies, if the Investment Manager believes that such companies have above-average growth potential. When the Investment Manager analyzes a specific company, it evaluates the fundamental value of each enterprise as well as its prospects for growth. In most cases, these companies have one or more of the following characteristics: - - Superior management - - Strong balance sheets - - Differentiated or superior products or services - - Substantial capacity for growth in revenue through either an expanding market or expanding market share - - Strong commitment to research and development - - Steady stream of new products or services The Fund does not seek current income, and does not restrict its investments to companies with a record of dividend payments. When evaluating foreign companies, the Investment Manager may also consider the anticipated economic growth rate, political outlook, inflation rate, currency outlook, and interest rate environment for the country and the region in which the company is located, as well as other factors it deems relevant. In addition to traditional research activities, the Investment Manager uses research produced by its Grassroots Research operating group. Grassroots Research prepares research reports based on field interviews with customers, distributors, and competitors of the companies that the Investment Manager follows. The Investment Manager believes that Grassroots Research can be a valuable adjunct to its traditional research efforts by providing a "second look" at companies in which the Fund might invest and by checking marketplace assumptions concerning market demand for particular products and services. WHAT KINDS OF EQUITY SECURITIES DOES THE FUND INVEST IN? The Fund invests primarily in common stocks and depositary receipts. The Fund may invest in companies of any size. Common stocks represent the basic equity ownership interests in a company. Depositary receipts are issued by banks or other financial institutions and represent, or may be converted into, underlying ordinary shares of a foreign company. They may be sponsored by the foreign company or organized independently. The Fund may also invest in other equity and equity related securities. These include preferred stock, convertible preferred stock, convertible debt obligations, warrants or other rights to acquire stock, and options on stock and stock indices. The Fund expects that its foreign investments will primarily be traded on recognized foreign securities exchanges. However, the Fund also may invest in securities that are traded only over-the-counter, either in the United States or in foreign markets, when the Investment Manager believes that such securities meet the Fund's investment criteria. The Fund also may invest in securities that are not publicly traded either in the United States or in foreign markets. 7 WHEN IS A COMPANY CONSIDERED TO BE LOCATED IN A PARTICULAR COUNTRY? A company will be considered to be located in a particular country if the company is organized or headquartered, or derives at least 50% of its total revenue from operations, in such country. WHAT ARE DEPOSITARY RECEIPTS? The Fund may invest in securities of foreign companies in the form of American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs"), or other similar depositary instruments representing securities of foreign companies. Depositary receipts are receipts for ordinary shares of foreign companies that are typically issued by U.S. banks, in the case of ADRs, and by foreign financial institutions, in the case of EDRs and GDRs. Depositary receipts entitle their holders to all dividends and all capital gains associated with the underlying ordinary shares. ADRs are usually dollar-denominated and do not involve the currency exchange risk of investing in the underlying securities. Depositary receipts have risks similar to foreign equity securities. Therefore, for purposes of the Fund's investment policies and restrictions, they are treated as foreign equity securities, based on the country in which the underlying issuer is located. DOES THE FUND BUY AND SELL FOREIGN CURRENCIES? The Investment Manager presently expects to purchase and sell foreign currencies primarily to settle foreign securities transactions. However, the Fund may also engage in currency management transactions (other than currency futures contracts) to hedge currency exposure related to securities it owns or securities it expects to purchase. The Fund may also hold foreign currency received in connection with investments in foreign securities when the Investment Manager believes the relevant exchange rates will change favorably and it would be better to convert the currency into U.S. dollars later. DOES THE FUND HEDGE ITS INVESTMENTS? For hedging purposes, the Fund may purchase options on stock indices and on securities it is authorized to purchase. If the Fund purchases a "put" option on a security, the Fund acquires the right to sell the security at a specified price at any time during the term of the option (for "American-style" options) or on the option expiration date (for "European-style" options). If the Fund purchases a "call" option on a security, it acquires the right to purchase the security at a specified price at any time during the term of the option (or on the option expiration date). An option on a stock index gives the Fund the right to receive a cash payment equal to the difference between the closing price of the index and the exercise price of the option. The Fund may "close out" an option before it is exercised or expires by selling an option of the same series as the option previously purchased. The Fund may employ certain currency management techniques to hedge against currency exchange rate fluctuations. The Fund may hedge up to 100% of its total assets. These techniques include forward currency exchange contracts, currency options 8 and currency swaps. A forward currency exchange contract is an obligation to purchase or sell a specific currency at a future date at a price set at the time of the contract. Currency options are rights to purchase or sell a specific currency at a future date at a specified price. Currency swaps involve the exchange of rights to make or receive payments in specified currencies. The Fund may also cross-hedge currencies, which involves writing or purchasing options or entering into foreign exchange contracts on one currency to hedge against changes in exchange rates for a different currency, if the Investment Manager believes changes in the two currencies are correlated. WHAT IS THE FUND'S PORTFOLIO TURNOVER RATE? The Fund may invest in securities on either a long-term or short-term basis. The Investment Manager anticipates that the annual portfolio turnover rate for the Fund will exceed 100% due to the repositioning of the portfolio as a result of the recent investment mandate change approved by stockholders. The Fund's portfolio turnover rate is not a limiting factor. The Investment Manager will sell the Fund's portfolio securities whenever it deems appropriate, regardless of the length of time the Fund has held the securities and may purchase or sell securities for short-term profits. Turnover will be influenced by sound investment practices, the Fund's investment objective and the need for funds for the redemption of the Fund's shares. A high portfolio turnover rate would increase the Fund's brokerage commission expenses and other transaction costs, and may increase taxable capital gains. Such expenses may adversely affect the Fund's performance. OTHER INVESTMENT PRACTICES OTHER INVESTMENT COMPANIES The laws of some foreign countries may make it difficult or impossible for the Fund to invest directly in companies organized or headquartered in those countries, or may limit such investments. The only practical means of investing in such companies may be through other investment companies that in turn are authorized to invest in the securities of such issuers. In these cases and in other appropriate circumstances, the Fund may invest up to 10% of the value of its total assets in other investment companies. Such investment is subject to the restrictions referred to above regarding investments in companies located in foreign countries. The Fund may not acquire more than 3% of the voting securities of any other investment company. If the Fund invests in other investment companies, it will bear its proportionate share of the other investment companies' management or administration fees and other expenses in addition to the Fund's own expenses. At the same time, the Fund would continue to pay its own management fees and other expenses. INVESTMENT POLICIES IN UNCERTAIN MARKETS When the Investment Manager believes the Fund should adopt a temporary defensive posture, including periods of international, political or economic uncertainty, the Fund may hold all or a substantial portion of its assets in investment grade debt securities. These securities may be 9 issued or guaranteed by the U.S. Government or foreign governments (including their agencies, instrumentalities, authorities and political subdivisions), debt obligations issued or guaranteed by international or supranational government entities, or debt obligations of corporate issuers. During these periods, the Fund may not be achieving its investment objective. ADDITIONAL INFORMATION ABOUT INVESTMENT PRACTICES The STATEMENT OF ADDITIONAL INFORMATION (the SAI) has more detailed information about the investment practices described in this Prospectus as well as information about other investment practices used by the Investment Manager. CHANGING THE INVESTMENT OBJECTIVES AND POLICIES The Fund's investment objective is a fundamental policy that may not be changed without stockholder approval. However, except as otherwise indicated in this Prospectus or the SAI, the Fund's other investment policies and restrictions are not fundamental and may be changed without stockholder approval. The various percentage limitations referred to in this Prospectus and the SAI apply immediately after a purchase or initial investment. Unless indicated to the contrary, the Fund is not required to sell any security in its portfolio as a result of a change resulting from market fluctuations. INVESTMENT RISKS Your investment in the Fund is subject to a variety of risks, including those described below. See the SAI for further information about these and other risks. EQUITY INVESTMENTS Although equity securities have a history of long-term growth in value, their prices fluctuate based on changes in the issuer's financial condition and prospects and on overall market and economic conditions. SMALL COMPANIES Investments in small companies may involve greater risks than larger companies, and may be speculative. The securities of small companies, as a class, have had periods of more favorable results, and periods of less favorable results, than securities of larger companies as a class. In addition, small companies may have limited or unprofitable operating histories, limited financial resources and inexperienced management. They often face competition from larger and more established firms that have greater resources. Small companies may have less ability to raise additional capital, and may have a less diversified product line (making them susceptible to market pressure), than larger companies. Securities of small and unseasoned companies are often less liquid than securities of larger companies and are frequently traded in the over-the-counter market or on regional exchanges where low trading volumes may result in erratic or abrupt price movements. Selling these securities may take an extended period of time. As a result, to the extent the Fund invests in small companies, its net asset value may be more volatile than would otherwise be the case. 10 FOREIGN SECURITIES Investing in foreign securities involves significant risks, some of which are not typically associated with investing in securities of U.S. issuers. For example, the value of investments in such securities may fluctuate based on changes in the value of one or more foreign currencies relative to the U.S. dollar. In addition, information about foreign issuers may be less readily available than information about domestic issuers. Foreign issuers generally are not subject to accounting, auditing and financial reporting standards, or to other regulatory practices and requirements, comparable to U.S. issuers. Furthermore, certain foreign countries may be politically unstable, expropriate or nationalize assets, revalue currencies, impose confiscatory taxes, and limit foreign investment and use or removal of funds or other assets of the Fund (including the withholding of dividends and limitations on the repatriation of currencies). The Fund may also face difficulties or delays in obtaining or enforcing judgments. Most foreign securities markets have substantially less volume than U.S. markets, and the securities of many foreign issuers may be less liquid and more volatile than securities of comparable U.S. issuers. There is generally less government regulation of securities markets, securities exchanges, securities dealers, and listed and unlisted companies in foreign countries than in the United States. Foreign markets also have different clearance and settlement procedures, and at times in certain markets settlements have not been able to keep pace with the volume of securities transactions, making it difficult to conduct and complete transactions. In addition, the costs associated with transactions in securities of foreign companies and securities traded on foreign markets, and the expense of maintaining custody of these securities with foreign custodians, generally are higher than in the U.S. EMERGING MARKETS Investments in emerging markets involve additional risks. The securities markets of emerging market countries are substantially smaller, less developed, less liquid, and more volatile than in the U.S. and other developed foreign markets. Disclosure and regulatory standards are less stringent. There also may be a lower level of monitoring and regulation of securities markets in emerging market countries and of the activities of investors in such markets, and enforcement of existing regulations has been limited. Economies in emerging market countries generally depend heavily on international trade. They may be affected adversely by the economic conditions of the countries with which they trade, as well as by trade barriers, exchange controls, managed adjustments in relative currency values, and other protectionist measures imposed or negotiated by these countries. In many cases, governments of emerging market countries continue to exercise significant control over the economies of these countries. In addition, some of these countries have in the past failed to recognize private property rights and have at times nationalized or expropriated the assets of private companies. There is a greater possibility of confiscatory taxation, imposition of withholding taxes on interest payments, or other similar developments that could affect investments in those countries. Unanticipated political or social developments may also affect the value of the Fund's investments in those countries. OPTIONS, CURRENCY HEDGING AND CURRENCY MANAGEMENT Stock options involve a number of risks. They may be more volatile than the underlying stock. Options and securities markets may not be precisely correlated, so that a given transaction may not achieve its objective. In addition, the secondary market for particular options may not be liquid for a variety of reasons. When trading options on foreign exchanges, many of the protections 11 in the United States will not be available. The Fund could lose the amount of the option premium plus transaction costs. The Fund's currency management techniques involve risks different from investments in U.S. dollar-denominated securities. If the Fund invests in foreign securities and also maintains currency positions, it may be exposed to greater combined risk than would otherwise be the case. The use of hedging and currency management techniques is a highly specialized activity, and the success of any such operations by the Fund is not assured. Gains and losses in such transactions depend upon the Investment Manager's ability to predict correctly the direction of stock prices, currency exchange rates, and other factors. Although hedging operations could reduce the risk of loss due to a decline in the value of the hedged security or currency, they could also limit the potential gain from an increase in the value of the security or currency. NON-DIVERSIFICATION The Fund is non-diversified within the meaning of the 1940 Act. As a non-diversified fund, it may invest a greater percentage of its assets in the securities of any single issuer than diversified funds, and may be more susceptible to risks associated with a single economic, political or regulatory occurrence than diversified funds. However, in order to meet the requirements of the Internal Revenue Code of 1986, as amended (the "Code"), for qualification as a regulated investment company, the Fund must diversify its holdings so that, at the end of each quarter of its taxable year, (i) at least 50% of the market value of its assets is represented by cash, U.S. Government securities, the securities of other regulated investment companies and other securities, with such other securities of any one issuer limited for purposes of this calculation to an amount not greater than 5% of the value of the Fund's total assets and representing not more than 10% of the issuer's outstanding voting securities, and (ii) not more than 25% of the value of the Fund's total assets may be invested in the securities of any one issuer (other than the U.S. Government or other regulated investment companies). GEOGRAPHIC CONCENTRATION The Fund will invest in companies located in both EMU and non-EMU European countries. There are certain specific risks that may be encountered when investing in EMU countries. The EMU's objective is to create a single, unified market through which people, goods, and money can move freely. Participation in the EMU is predicated upon countries meeting certain financial criteria outlined in the treaty creating the EMU. The transition to the EMU may be troubled as eleven separate nations adjust to the reduction in flexibility, independence, and sovereignty that the EMU mandates. High unemployment and a sense of "deculturalization" within the general public of the participating countries could lead to political unrest and continuing labor disturbances. YEAR 2000 Many computer programs employed throughout the world use two digits rather than four to identify the year. These programs, if not adapted, will not correctly handle the change from "99" to "00" on January 1, 2000, and will not be able to perform necessary functions critical to the Fund's operations. The "Year 2000 issue" affects all companies and organizations. The Year 2000 problem may also adversely affect the companies in which the Fund invests. For example, companies may incur substantial costs to address the problem. They may also suffer losses caused by corporate and governmental data processing errors. To the extent the impact on a portfolio holding is negative, the Fund's investment return could be adversely affected. The Investment Manager has advised the Fund that it is implementing a plan intended to ensure that is computer systems are not adversely affected by the Year 2000 issue. The Fund understands that their key service providers are taking steps to address the issue as well. The Fund and the Investment Manager will continue to monitor developments relating to this issue but do not anticipate that the Year 2000 issue will have an adverse effect on the Investment Manager's ability to provide services to the Fund. EURO INTRODUCTION The European Union's introduction on January 1, 1999 of a single European currency, the Euro, creates various uncertainties. The conversion to a new currency will affect the Fund's operations and contains some special risks. These include whether the payment and operational systems of banks and other financial institutions will be prepared for the change, the legal treatment of certain outstanding financial contracts that refer to existing currencies, and the creation of suitable clearing and settlement payment systems for the new currency. If there is not adequate preparation, there could be delays in settlement and additional costs to the Fund. 12 The conversion will also affect issuers in which the Fund invests due to changes in the competitive market from a consolidated currency market and greater operational costs from converting to the Euro. These or other related factors could cause market disruptions and may adversely affect the value of some of the Fund's holdings and increase the Fund's operational costs. The adoption of a common currency is expected to produce some benefits, such as consolidating the government debt market for those countries and reducing some currency risks and costs. The overall effect of these factors on the Fund's investments cannot be determined with certainty. The Fund understands that the Investment Manager and other key service providers are taking steps to address Euro-related issues. This includes upgrading their computer and bookkeeping systems to deal with the conversion. The Fund and its Investment Manager will continue to monitor the effects of the conversion on the issuers in which the Fund 13 ORGANIZATION AND MANAGEMENT THE FUND AND THE INVESTMENT MANAGER The Fund is a series of Dresdner RCM Investment Funds Inc. (the "Company"). Dresdner RCM Global Investors LLC, with principal offices at Four Embarcadero Center, San Francisco, California 94111, is the investment manager of the Fund. The Investment Manager manages the Fund's investments, provides various administrative services, and supervises the Fund's business. The Investment Manager provides investment supervisory services to institutional and individual clients. It was established in December of 1998 and is the successor to the business of its holding company, Dresdner RCM Global Investors US Holdings LLC. The Investment Manager was originally formed as Rosenberg Capital Management in 1970, and it and its successors have been consistently in business since then. The Investment Manager is an indirect wholly owned subsidiary of Dresdner Bank AG ("Dresdner"), an international banking organization with principal executive offices in Frankfurt, Germany. THE PORTFOLIO MANAGERS David S. Plants and Barbel Lenz are primarily responsible for the day-to-day management of the Dresdner RCM Europe Fund. Mr. Plants is a Director of Investment Manager, with which he has been associated since 1993. Ms. Lenz is a Director of the Investment Manager, with which she has been associated since 1997. She joined the Investment Manager as a Senior Research Specialist for European Equities and as a portfolio manager. From ____ to ____ she served managed European balanced portfolios and mutual funds at Deutscher Investment Trust, a wholly owned subsidiary of Dresdner Bank. MANAGEMENT FEES AND OTHER EXPENSES The Fund pays the Investment Manager a monthly fee pursuant to an investment management agreement at the annual rate of 1.00% of its average daily net assets up to and including $100 million and 0.80% of its average daily net assets in excess of $100 million. The Fund pays for its own expenses. These include brokerage and commission expenses, taxes, interest charges on any borrowings, custodial charges and expenses, investment management fees, and other operating expenses (e.g., legal and audit fees, securities registration expenses, and compensation of directors who are not affiliated with the Investment Manager). These expenses are allocated to each class of shares based on the assets of each class. Each class also bears certain class-specific expenses, such as Rule 12b-1 expenses payable by the Fund's Class N shares. 14 The Investment Manager has agreed to limit the Fund's expenses through _____, 2002. During this period, the Investment Manager will pay the Fund on a quarterly basis the amount, if any, by which the Fund's ordinary operating expenses for the quarter (except interest, taxes and extraordinary expenses) exceed the following expense ratios on an annual basis:
--------------------------------------------------------- EUROPE FUND EXPENSE RATIOS THROUGH _______, 2002 --------------------------------------------------------- Class N shares 1.60% Class I shares 1.35%
The Fund will reimburse the Investment Manager for such payments in later years, so long as the Fund's ordinary operating expenses after reimbursement are less than the expense limit. THE DISTRIBUTOR Funds Distributor, Inc. (the "Distributor"), with principal offices at 60 State Street, Suite 1300, Boston, Massachusetts 02109, acts as distributor of each class of shares of the Fund. The Distributor provides mutual fund distribution services to registered investment companies, and is an indirect wholly owned subsidiary of Boston Institutional Group, Inc., which is not affiliated with the Investment Manager or Dresdner. The Company has adopted a distribution plan (the "Plan") for its Class N shares pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund pays the Distributor an annual fee of up to 0.25% of the average daily net assets of its Class N shares as reimbursement for certain expenses incurred by the Distributor in providing distribution and shareholder support services to such shares. These expenses include advertising and marketing expenses, payments to broker-dealers and others who have entered into agreements with the Distributor, the expenses of preparing, printing and distributing the Prospectus to persons who are not already stockholders, and indirect and overhead costs associated with the sale of Class N shares. If in any month the Distributor is due more for such services than is immediately payable because of the Plan's expense limitation, the unpaid amount is carried forward from month to month while the Plan is in effect until it can be paid. PENDING LITIGATION On April 8, 1998, the Fund filed a lawsuit in the United States District Court for the Southern District of New York against Philip Goldstein, Ronald Olin and three affiliated entities captioned THE EMERGING GERMANY FUND INC. V. GOLDSTEIN. The Fund alleges violations by the defendants of the proxy solicitation and beneficial ownership disclosure provisions of the federal securities laws in connection with the Fund's annual meeting scheduled for April 1998. With respect to that meeting, Opportunity Partners, L.P. filed an action in the same court against the Fund and its directors on April 24, 1998 styled OPPORTUNITY PARTNERS L.P. V. THE EMERGING GERMANY FUND INC. alleging violations of the proxy antifraud rule of the federal securities laws and breach of fiduciary duty. The Fund, as nominal defendant, and each member of the Fund's Board of Directors have been named as defendants in a derivative and purported class action suit captioned STEINER V. FUGELSANG filed on May 28, 1998 in the same court. The class action allegations assert that the defendants violated the federal securities laws and Maryland corporate law and the derivative claims assert breach of fiduciary duty regarding the meeting. All issues in the actions have been resolved except as to entitlement to legal fees by the Goldstein and Steiner litigants, which issues 15 are the subject of settlement discussions in part and further litigation in part. The Fund believes that a substantial portion of any fees payable to these litigants should be reimbursed under a contract of insurance which insures the Fund and its directors. STOCKHOLDER INFORMATION BUYING SHARES For your convenience, we offer several ways to start and add to Fund investments. INVESTING THROUGH A FINANCIAL PROFESSIONAL If you work with a financial professional, he or she is prepared to handle your planning and transaction needs. Your financial professional will be able to assist you in establishing your fund account, executing transactions, and monitoring your investment. If you do not hold your Fund investment in the name of your financial professional and you prefer to place a transaction order yourself, please use the instructions below for investing directly. You may also purchase through certain brokers which have entered into selling group agreements with the Distributor. Brokers may charge a fee for their services at the time of purchase or redemption. Subscription forms can be obtained from the Fund. ESTABLISHING YOUR ACCOUNT You may establish accounts without the help of an intermediary as follows: - - Determine the amount you are investing. The minimum amount for initial investments is $5,000 for the Class N shares ($250 for additional investments) and $1,000,000 for the Class I shares ($50,000 for additional investments). Stockholders whose shares were redesignated as Class I shares will be subject to the $250 subsequent investment requirements applicable to holders of Class N Shares. Minimum subsequent investment requirements do not apply to investors purchasing shares through the Fund's automatic dividend reinvestment plan. In addition, minimum initial investments may vary for investors purchasing shares through a broker-dealer or other intermediary having a service agreement with the Investment Manager and maintaining an omnibus account with the Fund. For more information on minimum investments, call 1-800-726-7240. - - Complete the account application. Please apply at this time for any account privileges you may want to use in the future, to avoid the delays associated with adding them later on. - - Mail your completed application to the Fund at: Boston Financial Data Services P.O. Box 419927 Boston, MA 02266-8025 For answers to any questions, please speak with a Fund Representative at 1-800-726-7240. 16 We reserve the right to reject any purchase of shares at its sole discretion. We also reserve the right to cancel any purchase order for which payment has not been received by the third business day following the order. We will issue share certificates only for full shares and only upon request. Confirmation statements showing transactions in the stockholder's account and a summary of the status of the account serve as evidence of ownership of shares of the Fund. We will forward a confirmation statement to you on receipt of a proper order. INVESTING IN YOUR ACCOUNT BY WIRE - - Make sure you have established an account by mailing an application as explained above. - - Call 1-800-726-7240 to obtain your account number and to place a purchase order. FUNDS THAT ARE WIRED WITHOUT A PURCHASE ORDER WILL BE RETURNED UNINVESTED. - - After placing your purchase order, instruct your bank to wire the amount of your investment to: ------------------------------- Routing number: --------------- Credit: ----------------------- Account number: --------------- FCC: your account number, name of registered owner(s) and Fund name BY CHECK - - Make out a check (bank or certified) or money order for the investment amount payable to Dresdner RCM Europe Fund. - - Mail the check with your completed application to the Fund at: Boston Financial Data Services P.O. Box 419927 Boston, MA 02266-8025 ADDING TO YOUR ACCOUNT BY WIRE - - Call the Fund to place a purchase order. FUNDS THAT ARE WIRED WITHOUT A PURCHASE ORDER WILL BE RETURNED UNINVESTED. - - Once you have placed your purchase order, instruct your bank to wire the amount of your investment as described above. BY CHECK - - Make out a check for the investment amount payable to Dresdner RCM Europe Fund. - - Mail the check with a completed investment slip to the Fund at: 17 Boston Financial Data Services P.O. Box 419927 Boston, MA 02266-8025 If you do not have an investment slip, attach a note indicating your account number. WITH SECURITIES In its discretion, the Fund may accept securities of equal value instead of cash in payment of all or part of the subscription price for Fund shares. Contact the Fund in advance to discuss the securities in question and the documentation necessary to complete the transaction. Any such securities: - - Will be valued at the close of regular trading on the New York Stock Exchange on the day of acceptance of the subscription in accordance with the Fund's method of valuing its securities; - - Will have a tax basis to the Fund equal to such value; - - Must not be restricted securities; and - - Must be permitted to be purchased in accordance with the Fund's investment objective and policies and must be securities that the Fund would be willing to purchase at that time 18 SELLING SHARES BY PHONE - WIRE PAYMENT - - Call the Fund to verify that the wire redemption privilege is in place on your account. If it is not, a representative can help you add it. - - Place your wire request. BY PHONE - CHECK PAYMENT - - Call the Fund and place your request. Once your request has been verified, a check for the net cash amount, payable to the registered owner(s), will be mailed to the address of record. For checks payable to any other party or mailed to any other address, please make your request in writing (see below). IN WRITING - - Write a letter of instruction, signed by each registered owner or their duly authorized agent, that includes the following information: - The name of the registered owner(s) of the account - The account number - The number of shares or the dollar amount you want to sell - The recipient's name and address or wire information, if different from those of the account registration - Any stock certificates you may hold or additional documents we may request - - Indicate whether you want any cash proceeds sent by check or by wire. - - Make sure the letter is signed by all registered owners or their authorized parties. The Fund may require additional information, such as a signature guarantee. - - Mail the letter to the Fund. OTHER STOCKHOLDER SERVICES TELEPHONE ORDERS We accept telephone orders to buy or sell shares of the Fund. To order call 1-800-726-7240. To guard against fraud, we may record telephone orders or take other reasonable precautions. However, if we do not take such steps to ensure the authenticity of an order, we may bear any loss if the order later proves fraudulent. At times of peak activity, such as during periods of volatile economic or market conditions, it may be difficult to place buy or sell orders by phone. During these times, consider sending your request in writing. BUSINESS HOURS AND NAV CALCULATIONS The Fund's regular business days and hours are the same as those of the New York Stock Exchange (NYSE). The Fund calculates its net asset value per share (NAV) every business day as of the close of trading on the NYSE (normally 4:00 p.m. eastern time). The Fund's securities are typically priced using market quotes or pricing services. When these methods are not available or do not represent a security's value at the time of pricing, the security is valued in accordance with the Fund's fair valuation procedures. 19 TIMING OF ORDERS The Fund accepts orders until the close of trading on the NYSE every business day. Orders received before 1:00 p.m. Eastern Time are executed the same day at that day's NAV. Orders received after 1:00 p.m. Eastern time are executed the following day at that day's NAV. The Fund has the right to suspend redemption of shares and to postpone payment of proceeds for up to seven days or as permitted by law. The Fund may suspend the right of redemption or the date of payment for more than seven days after shares are tendered for redemption for any period during which - - The New York Stock Exchange is closed (other than a customary weekend or holiday closing) or the SEC determines that trading thereon is restricted - - An emergency (as determined by the SEC) exists as a result of which disposal by the Fund of securities it owns is not reasonably practicable, or as a result of which it is not reasonably practical for the Fund fairly to determine the value of its net assets - - The SEC by order permits such suspension for the protection of stockholders. TIMING OF SETTLEMENTS When you buy shares, you will become the owner of record when the Fund receives your payment, generally the day following execution. When you sell shares, cash proceeds are generally available the day following execution and will be forwarded according to your instructions. When you sell shares that you recently purchased by check, your order will be executed at the next NAV but the proceeds will not be available until your check clears. This may take up to 15 days. Upon execution of the redemption order, a confirmation statement will be forwarded to you indicating the number of shares sold and the proceeds thereof. ACCOUNTS WITH BELOW-MINIMUM BALANCES If your account balance falls below the minimum as a result of selling shares (and not because of performance), the Fund reserves the right to request that you buy more shares or close your account. If your account balance is still below the minimum 90 days after notification, the Fund reserves the right to close out your account and send the proceeds to the address of record. AUTOMATIC REINVESTMENT We will reinvest each income dividend and capital gain distribution declared by the Fund in full and fractional shares of the same class, unless you or your duly authorized agent elect to receive all such payments, or only the dividend or distribution portions in cash. We will base such reinvestment on the Fund's NAV as determined on the payment date. You or your authorized agent may request changes in the manner in which dividend and distribution payments are made through written notice to BFDS. This request will be effective as to any subsequent payment if it is received prior to the record date used for determining your payment. Any dividend and distribution election will remain in effect until you notify BFDS in writing to the contrary. 20 EXCHANGE PRIVILEGE You may exchange shares of either class of the Fund into shares of the same class of any other Fund offered by Dresdner RCM, without a sales charge or other fee, by contacting BFDS. Exchange purchases are subject to the minimum investment requirements of the class purchased. An exchange will be treated as a redemption and purchase for tax purposes. Shares will be exchanged at net asset value per share next determined after receipt by BFDS of: - - A written request for exchange, signed by each registered owner or his or her duly authorized agency exactly as the shares are registered, which clearly identifies the exact names in which the account is registered, the account number and the number of shares or the dollar amount to be exchanged - - Stock certificates for any shares to be exchanged which are held by the stockholder Exchanges will not become effective until all documents in the form required have been received by BFDS. If you have any questions, please contact BFDS. Please be sure to obtain and read carefully the prospectus of any other Fund in which you wish to exchange shares. ACCOUNT STATEMENTS Stockholder accounts are opened in accordance with your registration instructions. Transactions is the account, such as additional investments and dividend reinvestments, will be reflected on regular confirmation statements. REPORTS TO STOCKHOLDERS The Fund's fiscal year ends on December 31. The Fund will issue to its stockholders semi-annual and annual reports. In addition, stockholders will receive quarterly statements of the status of their accounts reflecting all transactions having taken place within that quarter. In order to reduce duplicate mailings and printing costs, the Fund will provide one annual and semi-annual report and annual prospectus per household. Information regarding the tax status of income dividends and capital gains distributions will be mailed to stockholders on or before January 31st of each year. Account tax information will also be sent to the IRS. REDEMPTION Redemption payments will be made wholly in cash unless the Board of Directors believes that unusual conditions exist which would make such payment detrimental to the best interests of the Fund. Under such circumstances, payment of the redemption price could be made in whole or in part in portfolio securities. You would incur brokerage costs to sell such securities. 21 DIVIDENDS, DISTRIBUTIONS AND TAXES The Fund's dividends and distributions consist of most or all of its net investment income and net realized capital gains. They are typically paid once a year in December. The amount depends on the Fund's investment results and its tax compliance situation. Dividends and distributions normally are reinvested in additional Fund shares. You may instruct your financial professional or the Fund to have them sent to you by check or credited to a separate account. If you are an individual (or certain other non-corporate stockholders), we have to withhold 31% of all dividends, capital gains distributions and redemption proceeds we pay to you if: (a) you have not given us a certified correct taxpayer identification number and (b) except with respect to redemption proceeds, have not certified that backup withholding does not apply. Amounts we withhold are applied to your federal tax liability, and a refund may be obtained from the Internal Revenue Service if withholding results in an overpayment of taxes. Distributions of our taxable income and net capital gain to non-resident alien individuals, non-resident alien fiduciaries of trusts of estate, foreign corporations, or foreign partnerships may also be subject to U.S. withholding tax, although distributions of net capital gain to such stockholders generally will not be subject to withholding. We may be required to pay income, withholding and other taxes imposed by foreign countries, generally at rates from 10% to 40%, which would reduce our investment income. Tax conventions between certain countries and the U.S. may reduce or eliminate such taxes. We may "pass through" to you the amount of foreign income taxes we pay, if it is in the best interests of stockholders. If we do so, you will be required to include in your gross income your pro-rata share of foreign taxes we paid, and you will be able to treat such taxes as either an itemized deduction or a foreign credit against U.S. income taxes on your tax returns. If we do not do so, you will not be able to deduct your share of such taxes in computing your taxable income and will not be able to take your share of such taxes as a credit against your U.S. income taxes. In general, selling shares for cash, exchanging shares, and receiving distributions (whether reinvested or taken in cash) are all taxable events. These transactions typically create the following tax liabilities for taxable accounts: TRANSACTION TAX STATUS - ------------------------------------------------------------------------------- Income dividends Ordinary income - ------------------------------------------------------------------------------- Short-term capital gains distributions Ordinary income - ------------------------------------------------------------------------------- Long-term capital gains distributors Capital gains - ------------------------------------------------------------------------------- Sales or exchanges of shares Capital gains or losses owned for more than one year - ------------------------------------------------------------------------------- Sales of exchanges of shares owned Gains are treated for one year or less as ordinary income; losses are subject to special rules - ------------------------------------------------------------------------------- Dividends and other distributions generally are taxable to you at the time they are 22 received. However, dividends declared in October, November and December by the Fund and made payable to your in such month are treated as paid and are thereby taxable as of December 31, provided that the Fund pays the dividend no later than January 31 of the following year. If you purchase the Fund's shares shortly before the record date for a dividend or other distribution thereon, you will pay full price for the shares (know as buying a distribution). Then you will receive some portion of your purchase price back as a taxable distribution even though, because the amount of the dividend or other distribution reduce the shares' net asset value, it actually represents a return of invested capital. You will receive, after the end of each year, full information on dividends, capital gain distributions and other reportable amounts with respect to shares of the Fund for tax purposes. This includes information such as the portion taxable as capital gains and the amount of dividends, if any, eligible for the federal dividends-received deduction for corporate taxpayers. Foreign stockholders may be subject to special withholding requirements. A penalty is charged on certain pre-retirement distributions form retirement accounts. Consult your tax adviser about the federal, state and local tax consequences in your particular circumstances. The tax considerations described in this section do not apply to tax-deferred accounts or other non-taxable entities. Because each investor's tax circumstances are unique, please consult you tax professional about your investment in the Fund. 23 FINANCIAL HIGHLIGHTS [TO COME] NET ASSET VALUE, BEGINNING OF PERIOD - -------------------------------------------- INVESTMENT ACTIVITIES: Net investment income (loss) Net realized and unrealized gain (loss) From investments - -------------------------------------------- Total from Investment Activities - -------------------------------------------- DISTRIBUTIONS: Net investment income In excess of net investment income Net realized gains In excess of net realized gains - -------------------------------------------- Total Distributions NET ASSET VALUE, END OF PERIOD - -------------------------------------------- Total Return (excludes sales charge) ANNUALIZED RATIOS/ SUPPLEMENTARY DATA: Net Assets at end of period (000) Ratio of expenses to average net assets Ratio of net investment income to Average net assets Ratio of expenses to average net Assets* Ratio of net investment income to Average net assets* Portfolio Turnover (e) *During the period certain fees were voluntarily reduced. In addition, the investment adviser reimbursed expenses. If such voluntary fee reductions and expense reimbursements had not occurred, the ratios would have been as indicated. 24 [Back Page] FOR MORE INFORMATION ABOUT DRESDNER RCM INVESTMENT FUNDS, THE FOLLOWING DOCUMENTS ARE AVAILABLE FREE UPON REQUEST: ANNUAL/SEMIANNUAL REPORTS: The Fund's annual and semiannual reports to shareholders contain detailed information on the Fund's investments. The annual report includes a discussion of the market conditions and investment strategies that significantly affected the Fund's performance during its last fiscal year. STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI provides more detailed information about the Fund, including operations and investment policies. It is incorporated by reference and is legally considered as part of this Prospectus. You can get free copies of the reports and the SAI, or request other information and discuss your questions about the Fund, by contacting ________, or a broker that sells the Fund. Or contact us at: Dresdner RCM Investment Funds Inc. Four Embarcadero Center, Suite 2900 San Francisco, CA 94111 Telephone 1-800-726-7240 You can review the Fund's reports and SAI at the Public Reference Room of the Securities and Exchange Commission in Washington, D.C. You can also get copies: - For a fee, by writing the Public Reference Section of the Commission, Washington, D.C. 20549-6009 or calling 1-800-SEC-0330. - Free from the Commission's Website at http://www.sec.gov. Investment Company Act file no. 811-________. 25 [LETTERHEAD] DRESDNER RCM EUROPE FUND STATEMENT OF ADDITIONAL INFORMATION ____________ __, 1999 Dresdner RCM Europe Fund (the "Europe Fund") is a non-diversified series of Dresdner RCM Investment Funds Inc. (the " Company"), an open-end management investment company. The Fund's investment manager is Dresdner RCM Global Investors LLC (the "Investment Manager"). This Statement of Additional Information ("SAI") is not a prospectus, and should be read in conjunction with the Prospectus of the Fund dated ________ __, 1999. This SAI relates to the Fund's Non-Institutional Class ("Class N") and Institutional Class ("Class I") of shares. The Prospectus may be obtained without charge by writing or calling the Company at the address and phone number above. TABLE OF CONTENTS
Page Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Investment Objectives and Policies. . . . . . . . . . . . . . . . . . . 1 Risk Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 18 Execution of Portfolio Transactions . . . . . . . . . . . . . . . . . . 20 Directors and Officers. . . . . . . . . . . . . . . . . . . . . . . . . 22 The Investment Manager. . . . . . . . . . . . . . . . . . . . . . . . . 25 The Distributor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Purchase and Redemption of Shares . . . . . . . . . . . . . . . . . . . 30 Dividends, Distributions and Tax Status . . . . . . . . . . . . . . . . 30 Investment Results. . . . . . . . . . . . . . . . . . . . . . . . . . . 33 General Information . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Description of Capital Shares . . . . . . . . . . . . . . . . . . . . . 35 Additional Information. . . . . . . . . . . . . . . . . . . . . . . . . 35 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . 36
INVESTMENT OBJECTIVES AND POLICIES INVESTMENT CRITERIA In evaluating particular investment opportunities, the Investment Manager may consider such other factors, in addition to those described in the Prospectus, as the anticipated economic growth rate, the political outlook, the anticipated inflation rate, the currency outlook, and the interest rate environment for the country and the region in which a particular issuer is located. When the Investment Manager believes it would be appropriate and useful, the Investment Manager's personnel may visit the issuer's headquarters and plant sites to assess an issuer's operations and to meet and evaluate its key executives. The Investment Manager also will consider whether other risks may be associated with particular securities. INVESTMENT IN FOREIGN SECURITIES The securities markets of many countries have at times in the past moved relatively independently of one another due to different economic, financial, political, and social factors. In seeking to achieve the investment objectives of the Fund, the Investment Manager allocates the Fund's assets among securities of countries and in currency denominations where it expects opportunities for meeting the Fund's investment objectives to be the most attractive, subject to the percentage limitations set forth in the Prospectus. In addition, from time to time the Fund may strategically adjust its investments among issuers based in various countries and among the various equity markets of the world in order to take advantage of diverse global opportunities, based on the Investment Manager's evaluation of prevailing trends and developments, as well as on the Investment Manager's assessment of the potential for capital appreciation (as compared to the risks) of particular companies, industries, countries, and regions. INVESTMENT IN DEVELOPED FOREIGN COUNTRIES. The Fund may invest in securities of foreign governments and companies that are organized or headquartered in developed foreign countries. The Fund may not be invested in all developed foreign countries at one time, and may not invest in particular developed foreign countries at any time, depending on the Investment Manager's view of the investment opportunities available. Although these countries have developed economies, even developed countries may be subject to periods of economic or political instability. For example, efforts by the member countries of the European Union to eliminate internal barriers to the free movement of goods, persons, services and capital have encountered opposition arising from the conflicting economic, political and cultural interests and traditions of the member countries and their citizens. The reunification of the former German Democratic Republic (East Germany) with the Federal Republic of Germany (West Germany) and other political and social events in Europe have caused considerable economic and social dislocations. Such events can materially affect securities markets and have also disrupted the relationship of such currencies with each other and with the U.S. dollar. Future political, economic and social developments can be expected to produce continuing effects on securities and currency markets in these and other developed foreign countries. INVESTMENT IN EMERGING MARKETS. The Fund may invest in securities of developing countries with emerging markets and companies organized or headquartered in such countries. As a general matter, countries that are not considered to be developed foreign countries by the Investment Manager will be deemed to be emerging market countries. Emerging market countries include any country generally considered to be an emerging market or developing country by the World Bank, the International Finance Corporation, the United Nations or its authorities, or other recognized financial institutions. As of the date of this SAI, emerging market countries are deemed to include for purposes of this SAI, all foreign countries other than Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Luxembourg, The Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. (See INVESTMENT IN DEVELOPED FOREIGN COUNTRIES.) As their Page 1 economies grow and their markets grow and mature, some countries that currently may be characterized by the Investment Manager as emerging market countries may be deemed by the Investment Manager to be developed foreign countries. In the event that the Investment Manager deems a particular country to be a developed foreign country, any investment in securities issued by that country's government or by an issuer located in that country would not be subject to the Fund's overall limitations on investments in emerging market countries. Securities of issuers organized or headquartered in emerging market countries may, at times, offer excellent opportunities for current income and capital appreciation. However, prospective investors should be aware that the markets of emerging market countries historically have been more volatile than the markets of the United States and developed foreign countries, and thus the risks of investing in securities of issuers organized or headquartered in emerging market countries may be far greater than the risks of investing in developed foreign markets. (See RISK CONSIDERATIONS--EMERGING MARKET SECURITIES for a more detailed discussion of the risk factors associated with investments in emerging market securities.) In addition, movements of emerging market currencies historically have had little correlation with movements of developed foreign market currencies. Prospective investors should consider these risk factors carefully before investing in the Fund. Some emerging market countries have currencies whose value is closely linked to the U.S. dollar. Emerging market countries also may issue debt denominated in U.S. dollars and other currencies. It is unlikely that the Fund will be invested in securities in all emerging market countries at any time. Moreover, investing in some emerging markets currently may not be desirable or feasible, due to lack of adequate custody arrangements for Fund assets, overly burdensome repatriation or similar restrictions, the lack of organized and liquid securities markets, unacceptable political risks, poor values of investments in those markets relative to investments in other emerging markets, in developed foreign markets, or in the United States, or for other reasons. CURRENCY MANAGEMENT Securities purchased by the Fund may be denominated in U.S. dollars, foreign currencies, or multinational currencies such as the Euro, and the Fund will incur costs in connection with conversions between various currencies. Movements in the various securities markets may be offset by changes in foreign currency exchange rates. Exchange rates frequently move independently of securities markets in a particular country. As a result, gains in a particular securities market may be affected, either positively or negatively, by changes in exchange rates, and the Fund's net currency positions may expose it to risks independent of its securities positions. From time to time, the Fund may employ currency management techniques (other than currency futures contracts) to enhance its total returns, although there is no current intention to do so. The Fund may not employ more than 30% of the value of its total assets in currency management techniques for the purpose of enhancing returns. To the extent that such techniques are used to enhance return, they are considered speculative. The Fund's ability and decision to purchase or sell portfolio securities may be affected by the laws or regulations in particular countries relating to convertibility and repatriation of assets. Because the shares of the Fund are redeemable in U.S. dollars each day the Fund determines their net asset value, the Fund must have the ability at all times to obtain U.S. dollars to the extent necessary to meet redemptions. Under present conditions, the Investment Manager does not believe that these considerations will have any significant adverse effect on its portfolio strategies, although there can be no assurances in this regard. GENERAL CURRENCY CONSIDERATIONS. Currency exchange rates may fluctuate significantly over short periods of time causing, along with other factors, the Fund's net asset value to fluctuate as well. Currency exchange rates generally are determined by the forces of supply and demand in the foreign exchange markets and the relative merits of investments in different countries, actual or anticipated changes in interest rates and other complex factors, as seen from an international perspective. Currency exchange rates also can be affected unpredictably by intervention, or failure to do so, by U.S. or foreign governments or central banks or by currency controls or political developments in the United States or abroad. The markets in forward foreign currency exchange contracts, currency swaps and other privately negotiated currency instruments offer less protection against defaults by the other party to such Page 2 instruments than is available for currency instruments traded on an exchange. To the extent that a substantial portion of the Fund's total assets, adjusted to reflect the Fund's net position after giving effect to currency transactions, is denominated or quoted in the currencies of foreign countries, the Fund will be more susceptible to the risk of adverse economic and political developments within those countries. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Fund may purchase or sell forward foreign currency exchange contracts ("forward contracts") for hedging purposes or to seek to increase total return when the Investment Manager anticipates that a foreign currency will appreciate or depreciate in value, but securities denominated or quoted in that currency do not present attractive investment opportunities and are not held in the Fund's portfolio. When purchased or sold to increase total return, forward contracts are considered speculative. In addition, the Fund may enter into forward contracts in order to protect against anticipated changes in future foreign currency exchange rates. The Fund may engage in cross-hedging by using forward contracts in a currency different from that in which the hedged security is denominated or quoted if the Investment Manager determines that there is a pattern of correlation between the two currencies. The Fund may also engage in proxy hedging, by using forward contracts in a series of foreign currencies for similar purposes. The Fund may enter into forward contracts to purchase foreign currencies to protect against an anticipated rise in the U.S. dollar price of securities it intends to purchase. The Fund may enter into forward contracts to sell foreign currencies to protect against the decline in value of its foreign currency denominated or quoted portfolio securities, or a decline in the value of anticipated income or dividends from such securities, due to a decline in the value of foreign currencies against the U.S. dollar. Forward contracts to sell foreign currency could limit any potential gain which might be realized by the Fund if the value of the hedged currency increased. If the Fund enters into a forward contract to sell foreign currency to increase total return or to buy foreign currency for any purpose, the Fund will segregate cash, U.S. Government securities, or other liquid debt or equity securities with the Fund's custodian in an amount equal to the value of the Fund's total assets committed to the consummation of the forward contract. If the value of the segregated securities declines, additional assets will be segregated so that the value of the segregated assets will equal the amount of the Fund's commitment with respect to the contract. A forward contract is subject to the risk that the counterparty to such contract will default on its obligations. Since a forward contract is not guaranteed by an exchange or clearinghouse, a default on the contract would deprive the Fund of unrealized profits, transaction costs or the benefits of a currency hedge or force the Fund to cover its purchase or sale commitments, if any, at the current market price. OPTIONS ON FOREIGN CURRENCIES. The Fund may purchase and sell (write) put and call options on foreign currencies for the purpose of protecting against declines in the U.S. dollar value of foreign portfolio securities and anticipated income or dividends on such securities and against increases in the U.S. dollar cost of foreign securities to be acquired. The Fund may also use options on currency to cross-hedge, which involves writing or purchasing options on one currency to hedge against changes in exchange rates for a different currency, if the Investment Manager believes there is a pattern of correlation between the two currencies. Options on foreign currencies to be written or purchased by the Fund will be traded on U.S. and foreign exchanges. The writer of a put or call option receives a premium and gives the purchaser the right to sell (or buy) the currency underlying the option at the exercise price. The writer has the obligation upon exercise of the option to purchase (or deliver) the currency during the option period. A writer of an option who wishes to terminate the obligation may effect a "closing transaction" by buying an option of the same series as the option previously written. A writer may not effect a closing purchase transaction after being notified of the exercise of an option. The writing of an option on foreign currency will constitute only a partial hedge, up to the amount of the premium received; the Fund could be required to purchase or sell additional foreign currencies at disadvantageous exchange rates, thereby incurring losses. The purchase of an option on foreign currency may constitute an effective hedge against exchange Page 3 rate fluctuations; however, in the event of exchange rate movements adverse to the Fund's position, the Fund may forfeit the entire amount of the premium plus related transaction costs. The Fund may purchase call or put options on a currency to seek to increase total return when the Investment Manager anticipates that the currency will appreciate or depreciate in value, but the securities quoted or denominated in that currency do not present attractive investment opportunities and are not held in the Fund's portfolio. When the Fund writes a put or call option on a foreign currency, an amount of cash, U.S. Government securities, or other liquid debt or equity securities equal to the market value of its obligations under the option will be segregated by the Fund's custodian to collateralize the position. CURRENCY SWAPS. The Fund may enter into currency swaps for both hedging and to seek to increase total return. Currency swaps involve the exchange of rights to make or receive payments in specified currencies. Since currency swaps are individually negotiated, the Fund expects to achieve an acceptable degree of correlation between its portfolio investments and its currency swap positions entered into for hedging purposes. Currency swaps may involve the delivery of the entire principal value of one designated currency in exchange for the other designated currency, or the delivery of the net amount of a party's obligations over its entitlements. Therefore, the entire principal value of a currency swap may be subject to the risk that the other party to the swap will default on its contractual delivery obligations. The Fund will maintain in a segregated account with the Fund's custodian cash, U.S. Government securities, or other liquid debt or equity securities equal to the amount of the Fund's obligations, or the net amount (if any) of the excess of the Fund's obligations over its entitlements, with respect to swap transactions. To the extent that such amount of a swap is segregated, the Company and the Investment Manager believe that swaps do not constitute senior securities under the Investment Company Act of 1940 (the "1940 Act") and, accordingly, will not treat them as being subject to the Fund's borrowing restriction. The use of currency swaps is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. If the Investment Manager is incorrect in its forecasts of market values and currency exchange rates, the investment performance of the Fund entering into a currency swap would be less favorable than it would have been if this investment technique were not used. OPTIONS TRANSACTIONS The Fund may purchase listed put and call options on any securities which it is eligible to purchase as a hedge against changes in market conditions that may result in changes in the value of the Fund's portfolio securities. The aggregate premiums on put options and call options purchased by the Fund may not in each case exceed 5% of the value of the net assets of the Fund as of the date of purchase. In addition, the Fund will not purchase options if more than 25% of the value of its net assets would be hedged. A put gives the holder the right, in return for the premium paid, to require the writer of the put to purchase from the holder a security at a specified price. A call gives the holder the right, in return for the premium paid, to require the writer of the call to sell a security to the holder at a specified price. Put and call options on various stocks and financial indices are traded on U.S. and foreign exchanges. A put option is covered if the writer segregates cash, U.S. Government securities or other liquid debt or equity securities equal to the exercise price. A call option is covered if the writer owns the security underlying the call or has an absolute and immediate right to acquire the security without additional cash consideration upon conversion or exchange of other securities held by it. PUT OPTIONS. If the Fund purchases a put option, the Fund acquires the right to sell the underlying security at a specified price at any time during the term of the option (for "American-style" options) or on the option expiration date (for "European-style" options). Purchasing put options may be used as a portfolio investment strategy when the Page 4 Investment Manager perceives significant short-term risk but substantial long-term appreciation for the underlying security. The put option acts as an "insurance policy", as it protects against significant downward price movement while it allows full participation in any upward movement. If the Fund is holding a security which the Investment Manager feels has strong fundamentals, but for some reason may be weak in the near term, the Fund may purchase a put option on such security, thereby giving itself the right to sell such security at a certain strike price throughout the term of the option. Consequently, the Fund will exercise the put only if the price of such security falls below the strike price of the put. The difference between the strike price of the put and the market price of the underlying security on the date the Fund exercises the put, less transaction costs, will be the amount by which the Fund will be able to hedge against a decline in the underlying security. If during the period of the option the market price for the underlying security remains at or above the put's strike price, the put will expire worthless, representing a loss of the price the Fund paid for the put, plus transaction costs. If the price of the underlying security increases, the profit the Fund realizes on the sale of the security will be reduced by the premium paid for the put option less any amount for which the put may be sold. CALL OPTIONS. If the Fund purchases a call option, it acquires the right to purchase the underlying security at a specified price at any time during the term of the option. The purchase of a call option is a type of "insurance policy" to hedge against losses that could incur if the Fund intends to purchase the underlying security and the security thereafter increases in price. The Fund will exercise a call option only if the price of the underlying security is above the strike price at the time of exercise. If during the option period the market price for the underlying security remains at or below the strike price of the call option, the option will expire worthless, representing a loss of the price paid for the option, plus transaction costs. If the price of the underlying security increases, the price the Fund pays for the security will in effect be increased by the premium paid for the call. STOCK INDEX OPTIONS. The Fund may purchase put and call options with respect to stock indices such as Standard & Poor's 500 Stock Index and other stock indices. Such options may be purchased as a hedge against changes resulting from market conditions in the values of securities which are held in the Fund's portfolio or which it intends to purchase or sell, or when they are economically appropriate for the reduction of risks inherent in the ongoing management of the Fund. The distinctive characteristics of options on stock indices create certain risks that are not present with stock options generally. Because the value of an index option depends upon movements in the level of the index rather than the price of a particular stock, whether the Fund will realize a gain or loss on the purchase or sale of an index option depends upon movements in the level of stock prices in the stock market generally rather than movements in the price of a particular stock. Accordingly, successful use by the Fund of options on a stock index will be subject to the Investment Manager's ability to predict correctly movements in the direction of the stock market generally. This requires different skills and techniques than predicting changes in the prices of individual stocks. Index prices may be distorted if trading of certain stocks included in an index is interrupted. Trading of index options also may be interrupted in certain circumstances, such as if trading were halted in a substantial number of stocks included in the index. If this were to occur, the Fund would not be able to close out options which it had purchased, and if restrictions on exercise were imposed, the Fund might be unable to exercise an option it holds, which could result in substantial losses to the Fund. It is the policy of the Fund to purchase put or call options only with respect to an index which the Investment Manager believes includes a sufficient number of stocks to minimize the likelihood of a trading halt in the index. DEALER OPTIONS. The Fund may engage in transactions involving dealer options as well as exchange-traded options. Options not traded on an exchange generally lack the liquidity of an exchange-traded option, and may be subject to the Fund's restriction on investment in illiquid securities. In addition, dealer options may involve the risk that the securities dealers participating in such transactions will fail to meet their obligations under the terms of the options. Page 5 SHORT SALES The Fund may engage in short sales transactions. A short sale that is not made "against the box" is a transaction in which the Fund sells a security it does not own in anticipation of a decline in market price. When the Fund makes a short sale, the proceeds it receives are retained by the broker until the Fund replaces the borrowed security. In order to deliver the security to the buyer, the Fund must arrange through a broker to borrow the security and, in so doing, the Fund becomes obligated to replace the security borrowed at its market price at the time of replacement, whatever that price may be. The value of securities of any issuer in which the Fund maintains a short position that is not "against the box" may not exceed the lesser of 5% of the value of the Fund's net assets or 5% of the securities of such class of the issuer. The Fund's ability to enter into short sales transactions is limited by the requirements of the 1940 Act. Short sales by the Fund that are not made "against the box" create opportunities to increase the Fund's return but, at the same time, involve special risk considerations and may be considered a speculative technique. Since the Fund in effect profits from a decline in the price of the securities sold short without the need to invest the full purchase price of the securities on the date of the short sale, the Fund's net asset value per share will tend to increase more when the securities it has sold short decrease in value, and to decrease more when the securities it has sold short increase in value, than would otherwise be the case if it had not engaged in such short sales. Short sales theoretically involve unlimited loss potential, as the market price of securities sold short may continuously increase, although the Fund may mitigate such losses by replacing the securities sold short before the market price has increased significantly. Under adverse market conditions, the Fund might have difficulty purchasing securities to meet its short sale delivery obligations, and might have to sell portfolio securities to raise the capital necessary to meet its short sale obligations at a time when fundamental investment considerations would not favor such sales. If the Fund makes a short sale "against the box," the Fund would not immediately deliver the securities sold and would not receive the proceeds from the sale. The seller is said to have a short position in the securities sold until it delivers the securities sold, at which time it receives the proceeds of the sale. The Fund's decision to make a short sale "against the box" may be a technique to hedge against market risks when the Investment Manager believes that the price of a security may decline, causing a decline in the value of a security owned by the Fund or a security convertible into or exchangeable for such security. In such case, any future losses in the Fund's long position would be reduced by a gain in the short position. In the view of the Securities and Exchange Commission ("SEC"), a short sale involves the creation of a "senior security" as such term is defined in the 1940 Act, unless the sale is "against the box" and the securities sold are placed in a segregated account (not with the broker), or unless the Fund's obligation to deliver the securities sold short is "covered" by segregating (not with the broker) cash, U.S. Government securities or other liquid debt or equity securities in an amount equal to the difference between the market value of the securities sold short at the time of the short sale and any cash or securities required to be deposited as collateral with a broker in connection with the sale (not including the proceeds from the short sale), which difference is adjusted daily for changes in the value of the securities sold short. The total value of the cash and securities deposited with the broker and otherwise segregated may not at any time be less than the market value of the securities sold short at the time of the short sale. To avoid limitations under the 1940 Act on borrowing by investment companies, short sales by the Fund will be "against the box", or the Fund's obligation to deliver the securities sold short will be "covered" by segregating cash, U.S. Government securities or other liquid debt or equity securities in an amount equal to the market value of its delivery obligation. The Fund will not make short sales of securities or maintain a short position if doing so could create liabilities or require collateral deposits and segregation of assets aggregating more than 25% of the value of the Fund's total assets. Page 6 FUTURES TRANSACTIONS The Fund may enter into contracts for the purchase or sale for future delivery ("futures contracts") of foreign stock or bond indices or other financial indices that the Investment Manager determines are appropriate to hedge the risks associated with changes in interest rates or general fluctuations in the value of its portfolio securities. Pursuant to the regulations of the Commodity Futures Trading Commission ("CFTC"), and subject to certain restrictions, the Fund may purchase or sell futures contracts that are traded on U.S. exchanges that have been designated as contract markets by the CFTC. The Fund may also generally purchase or sell futures contracts that are subject to the rules of any foreign board of trade ("foreign futures contracts"). The Fund may not, however, trade a foreign futures contract based on a foreign stock index unless the contract has been approved by the CFTC for trading by U.S. persons. The Investment Manager may comply with such different standards as may be established by the CFTC with respect to the purchase or sale of futures contracts and foreign futures contracts. FUTURES CHARACTERISTICS. A futures contract on an index is an agreement between two parties (buyer and seller) to take or make delivery of an amount of cash equal to the difference between the value of the index at the close of the last trading day of the contract and the price at which the index contract was originally written. In the case of futures contracts traded on U.S. exchanges, the exchange itself or an affiliated clearing corporation assumes the opposite side of each transaction (i.e., as buyer or seller). A futures contract may be satisfied or closed out by payment of the change in the cash value of the index. No physical delivery of the instruments underlying the index is made. Unlike when the Fund purchases or sells a security, no price is paid or received by the Fund upon the purchase or sale of a futures contract. Initially, the Fund will be required to deposit with the Fund's custodian or such other parties as may be authorized by the SEC (in the name of the futures commission merchant (the "FCM")) an amount of cash or U.S. Treasury bills which is referred to as an "initial margin" payment. The nature of initial margin in futures transactions is different from that of margin in security transactions in that a futures contract margin does not involve the borrowing of funds by the Fund to finance the transactions. Rather, the initial margin is in the nature of a performance bond or good faith deposit on the contract which is returned to the Fund upon termination of the futures contract, assuming all contractual obligations have been satisfied. Futures contracts customarily are purchased and sold with initial margins that may range upwards from less than 5% of the value of the futures contract being traded. Subsequent payments, called "variation margin", to and from the FCM, will be made on a daily basis as the value of the underlying index varies, making the long and short positions in the futures contract more or less valuable. This process is known as "marking to the market." For example, when the Fund has purchased a stock index futures contract and the value of the underlying index has risen, the Fund's position will have increased in value and the Fund will receive from the FCM a variation margin payment equal to that increased value. Conversely, when the Fund has purchased a stock index futures contract and the value of the underlying index has declined, the position would be less valuable and the Fund would be required to make a variation margin payment to the FCM. At any time prior to expiration of a futures contract, the Fund may elect to close the position by taking an identical opposite position which will operate to terminate the Fund's position in the futures contract. A final determination of variation margin is then made, additional cash is required to be paid by or released to the Fund, and the Fund realizes a loss or a gain. Page 7 PURCHASE AND SALE OF FUTURES. When the Investment Manager anticipates a significant stock market or stock market sector advance, the Fund may purchase a stock index futures contract which affords a hedge against not participating in such advance at a time when the Fund is not fully invested in equity securities. Such purchase of a futures contract would serve as a temporary substitute for the purchase of individual stocks which may later be purchased (with attendant costs) in an orderly fashion. As such purchase of individual stocks are made, an approximately equivalent amount of stock index futures would be terminated by offsetting sales. The Fund may sell stock index futures contracts in anticipation of or during a general stock market or market sector decline that may adversely affect the market values of the Fund's portfolio of equity securities. To the extent that the Fund's portfolio of equity securities changes in value in correlation with a given stock index, the sale of futures contracts on that index would reduce the risk to the portfolio of a market decline and, by doing so, would provide an alternative to the liquidation of securities positions in the portfolio with resultant transaction costs. LIMITATIONS ON PURCHASE AND SALE OF FUTURES. The Fund may not purchase or sell futures contracts if, immediately thereafter, more than 30% of the value of its net assets would be hedged. In addition, the Fund may not purchase or sell futures or purchase futures options if, immediately thereafter, the sum of the amount of margin deposits on the Fund's existing futures positions would exceed 5% of the market value of the Fund's total assets. In Fund transactions involving futures contracts, to the extent required by applicable SEC guidelines, an amount of cash, U.S. Government securities, or other liquid debt or equity securities equal to the market value of the futures contracts will be segregated with the Fund's Custodian, or in other segregated accounts as regulations may allow, to collateralize the position and thereby to insure that the use of such futures is unleveraged. REGULATORY MATTERS. The Company has filed a claim of exemption from registration of the Fund as a commodity pool with the CFTC. The Fund intends to conduct its Page 8 futures trading activity in a manner consistent with that exemption. The Investment Manager is registered with the CFTC as both a commodity pool operator and as a commodity trading advisor. DEBT SECURITIES The Fund may purchase debt obligations. The timing of purchase and sale transactions in debt obligations may result in capital appreciation or depreciation because the value of debt obligations varies inversely with prevailing interest rates. The debt obligations in which the Fund will invest will be rated, at the time of purchase, BBB or higher by Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("Standard & Poor's"), or Baa or higher by Moody's Investors Service, Inc. ("Moody's") or equivalent ratings by other rating organizations, or, if unrated, will be determined by the Investment Manager to be of comparable investment quality. If the rating of an investment grade security held by the Fund is downgraded, the Investment Manager will determine whether it is in the best interests of the Fund to continue to hold the security in its investment portfolio. RATINGS. Credit ratings evaluate the safety of principal and interest payments of securities, not their market value. The rating of an issuer is also heavily weighted by past developments and does not necessarily reflect probable future conditions. There is frequently a lag between the time a rating is assigned and the time it is updated. As credit rating agencies may fail to timely change credit ratings of securities to reflect subsequent events, the Investment Manager will also monitor issuers of such securities to determine if such issuers will have sufficient cash flow and profits to meet required principal and interest payments and to assure their liquidity. In general, debt securities held by the Fund will be treated as investment grade if they are rated by at least one major rating agency in one of its top four rating categories at the time of purchase or, if unrated, are determined by the Investment Manager to be of comparable quality. Investment grade means the issuer of the security is believed to have adequate capacity to pay interest and repay principal, although certain of such securities in the lower grades have speculative characteristics, and changes in economic conditions or other circumstances may be more likely to lead to a weakened capacity to pay interest and principal than would be the case with higher rated securities. GOVERNMENT OBLIGATIONS. U.S. Government obligations include obligations issued or guaranteed as to principal and interest by the U.S. Government and its agencies and instrumentalities, by the right of the issuer to borrow from the U.S. Treasury, by the discretionary authority of the U.S. Government to purchase certain obligations of the agency or instrumentality, or only by the credit of the agency or instrumentality. No assurance can be given that the U.S. Government will provide financial support to U.S. Government-sponsored instrumentalities if it is not obligated to do so by law. The Fund may invest in sovereign debt obligations of foreign countries. A number of factors affect a sovereign debtor's willingness or ability to repay principal and interest in a timely manner, including its cash flow situation, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the sovereign debtor's policy toward principal international lenders and the political constraints to which it may be subject. Emerging market governments could default on their sovereign debt. Such sovereign debtors also may be dependent on expected disbursements from foreign governments, multilateral agencies and other entities abroad to reduce principal and interest arrearages on their debt. The commitments on the part of these governments, agencies and others to make such disbursements may be conditioned on a sovereign debtor's implementation of economic reforms and/or economic performance and the timely service of such debtor's obligations. Failure to meet such conditions could result in the cancellation of such third parties' commitments to lend funds to the sovereign debtor, which may further impair such debtor's ability or willingness to service its debt in a timely manner. CONVERTIBLE SECURITIES AND WARRANTS The Fund may invest in convertible securities and warrants. The value of a convertible security is a function of its "investment value" (determined by its yield in comparison with the yields of other securities of comparable maturity and quality that do not have conversion privilege) and its "conversion value" (the security's worth, at market value, if converted into the underlying common stock). The credit standing of the issuer and other factors may also Page 9 affect the investment value of a convertible security. The conversion value of a convertible security is determined by the market price of the underlying common stock. If the conversion value is low relative to the investment value, the price of the convertible security is governed principally by its investment value. To the extent the market price of the underlying common stock approaches or exceeds the conversion price, the price of the convertible security will be increasingly influenced by its conversion value. As a matter of operating policy, the Fund will not invest more than 5% of its net assets in warrants. A warrant gives the holder a right to purchase at any time during a specified period a predetermined number of shares of common stock at a fixed price. Unlike convertible debt, securities or preferred stock, warrants do not pay a fixed dividend. Investments in warrants involve certain risks, including the possible lack of a liquid market for resale of the warrants, potential price fluctuations as a result of speculation or other factors, and failure of the price of the underlying security to reach or have reasonable prospects of reaching a level at which the warrant can be prudently exercised (in which event the warrant may expire without being exercised) resulting in a loss of the Fund's entire investment. SYNTHETIC CONVERTIBLE SECURITIES The Fund may invest in "synthetic" convertible securities, which are derivative positions composed of two or more different securities whose investment characteristics, taken together, resemble those of convertible securities. For example, the Fund may purchase a non-convertible debt security and a warrant or option, which enables the Fund to have a convertible-like position with respect to a company, group of companies or stock index. Synthetic convertible securities are typically offered by financial institutions and investment banks in private placement transactions. Upon conversion, the Fund generally receives an amount in cash equal to the difference between the conversion price and the then current value of the underlying security. Unlike a true convertible security, a synthetic convertible comprises two or more separate securities, each with its own market value. Therefore, the market value of a synthetic convertible is the sum of the values of its fixed-income component and its convertible component. For this reason, the values of a synthetic convertible and a true convertible security may respond differently to market fluctuations. The Fund only invests in synthetic convertibles with respect to companies whose corporate debt securities are rated "A" or higher by Moody's or Standard & Poor's and will not invest more than 15% of its net assets in such synthetic securities and other illiquid securities. PREFERRED STOCK The Fund may purchase preferred stock. Preferred stock, unlike common stock, offers a stated dividend rate payable from a corporation's earnings. Such preferred stock dividends may be cumulative or non-cumulative, participating, or auction rate. If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred stock may have mandatory sinking fund provisions, as well as call/redemption provisions prior to maturity, a negative feature when interest rates decline. Dividends on some preferred stock may be "cumulative," requiring all or a portion of prior unpaid dividends to be paid prior to payment of dividends on the issuer's common stock. Preferred stock also generally has a preference over common stock on the distribution of a corporation's assets in the event of liquidation of the corporation, and may be "participating," which means that it may be entitled to a dividend exceeding the stated dividend in certain cases. The rights of the holders of preferred stock on the distribution of a corporation's assets in the event of a liquidation are generally subordinate to the rights associated with a corporation's debt securities. BORROWING MONEY From time to time, it may be advantageous for the Fund to borrow money rather than sell portfolio securities to raise the cash to meet redemption requests. In order to meet such redemption requests, the Fund may borrow from banks or enter into reverse repurchase agreements. The Fund may also borrow up to 5% of the value of its total assets for temporary or emergency purposes other than to meet redemptions. However, the Fund will not borrow money for leveraging purposes. The Fund may continue to purchase securities while borrowings are outstanding, but Page 10 will not do so when the Fund's borrowings (including reverse repurchase agreements) exceed 5% of the value of its total assets. The 1940 Act permits the Fund to borrow only from banks and only to the extent that the value of its total assets, less its liabilities other than borrowings, is equal to at least 300% of all borrowings (including the proposed borrowing), and requires the Fund to take prompt action to reduce its borrowings if this limit is exceeded. For the purpose of the 300% borrowing limitation, reverse repurchase agreements and other borrowing transactions covered by segregated assets are not considered borrowings. A reverse repurchase agreement involves a transaction by which a borrower (such as the Fund) sells a security to a purchaser (a member bank of the Federal Reserve System or a broker-dealer deemed creditworthy pursuant to standards adopted by the Board of Directors of the Company (the "Board of Directors" ), and simultaneously agrees to repurchase the security at an agreed-upon price on an agreed-upon date within a number of days (usually not more than seven) from the date of purchase. LENDING PORTFOLIO SECURITIES The Fund is authorized to make loans of portfolio securities, for the purpose of realizing additional income, to broker-dealers or other institutional investors deemed creditworthy pursuant to standards adopted by the Board of Directors. The borrower must maintain with the Fund's custodian collateral consisting of cash, U.S. Government securities or other liquid debt or equity securities equal to at least 100% of the value of the borrowed securities, plus any accrued interest. The Fund will receive any interest paid on the loaned securities, and a fee and/or a portion of the interest earned on the collateral, less any fees and administrative expenses associated with the loan. INVESTMENT IN ILLIQUID SECURITIES The Fund may invest up to 15% of the value of its net assets in illiquid securities. Securities may be considered illiquid if the Fund cannot reasonably expect to receive approximately the amount at which the Fund values such securities within seven days. The Investment Manager has the authority to determine whether certain securities held by the Fund are liquid or illiquid pursuant to standards adopted by the Boards of Directors. The Investment Manager takes into account a number of factors in reaching liquidity decisions, including, but not limited to: the listing of the security on an exchange or national market system; the frequency of trading in the security; the number of dealers who publish quotes for the security; the number of dealers who serve as market makers for the security; the apparent number of other potential purchasers; and the nature of the security and how trading is effected (e.g., the time needed to sell the security, how offers are solicited, and the mechanics of transfer). The Fund's investments in illiquid securities may include securities that are not registered for resale under the Securities Act of 1933 (the "Securities Act"), and therefore are subject to restrictions on resale. When the Fund purchases unregistered securities, it may, in appropriate circumstances, obtain the right to register such securities at the expense of the issuer. In such cases there may be a lapse of time between the Fund's decision to sell any such security and the registration of the security permitting sale. During any such period, the price of the security will be subject to market fluctuations. The fact that there are contractual or legal restrictions on resale of certain securities to the general public or to certain institutions may not be indicative of the liquidity of such investments. If such securities are subject to purchase by institutional buyers in accordance with Rule 144A under the Securities Act, the Investment Manager may determine in particular cases, pursuant to standards adopted by the Boards of Directors, that such securities are not illiquid securities notwithstanding the legal or contractual restrictions on their resale. Investing in Rule 144A securities could have the effect of increasing the Fund's illiquidity to the extent that qualified institutional buyers become, for a time, uninterested in purchasing such securities. Page 11 CASH-EQUIVALENT INSTRUMENTS Other than as described under INVESTMENT RESTRICTIONS below, the Fund is not restricted with regard to the types of cash-equivalent investments it may make. When the Investment Manager believes that such investments are an appropriate part of the Fund's overall investment strategy, the Fund may hold or invest, for investment purposes, a portion of its assets in any of the following, denominated in U.S. dollars, foreign currencies, or multinational currencies: cash; short-term U.S. or foreign government securities; commercial paper rated at least A-2 by Standard & Poor's or P-2 by Moody's; certificates of deposit or other deposits of banks deemed creditworthy by the Investment Manager pursuant to standards adopted by the Board of Directors; time deposits; bankers' acceptances; and repurchase agreements related to any of the foregoing. In addition, for temporary defensive purposes under abnormal market or economic conditions, the Fund may invest up to 100% of its assets in such cash-equivalent investments. A certificate of deposit is a short-term obligation of a commercial bank. A bankers' acceptance is a time draft drawn on a commercial bank by a borrower, usually in connection with international commercial transactions. A repurchase agreement involves a transaction by which an investor (such as the Fund) purchases a security and simultaneously obtains the commitment of the seller (a member bank of the Federal Reserve System or a securities dealer deemed creditworthy by the Investment Manager pursuant to standards adopted by the Board of Directors) to repurchase the security at an agreed-upon price on an agreed-upon date within a number of days (usually not more than seven) from the date of purchase. RISK CONSIDERATIONS INVESTMENTS IN FOREIGN SECURITIES GENERALLY Investments in foreign securities may offer investment opportunities and potential benefits not available from investments solely in securities of U.S. issuers. Such benefits may include higher rates of interest on debt securities than are available from domestic issuers, the opportunity to invest in foreign issuers that appear, in the opinion of the Investment Manager, to offer better opportunity for long-term capital appreciation than investments in securities of U.S. issuers, the opportunity to invest in foreign countries with economic policies or business cycles different from those of the United States and the opportunity to reduce fluctuations in portfolio value by taking advantage of foreign markets that do not necessarily move in a manner parallel to U.S. stock markets. At the same time, however, investing in foreign securities involves significant risks, some of which are not typically associated with investing in securities of U.S. issuers. For example, the value of investments in such securities may fluctuate based on changes in the value of one or more foreign currencies relative to the U.S. dollar, and a change in the exchange rate of one or more foreign currencies could reduce the value of certain portfolio securities. Currency exchange rates may fluctuate significantly over short periods of time, and are generally Page 12 determined by the forces of supply and demand and other factors beyond the Fund's control. Changes in currency exchange rates may, in some circumstances, have a greater effect on the market value of a security than changes in the market price of the security. To the extent that a substantial portion of the Fund's total assets is denominated or quoted in the currency of a foreign country, the Fund will be more susceptible to the risk of adverse economic and political developments within that country. As discussed above, the Fund may employ certain investment techniques to hedge its foreign currency exposure; however, such techniques also entail certain risks. In addition, information about foreign issuers may be less readily available than information about domestic issuers. Foreign issuers generally are not subject to accounting, auditing, and financial reporting standards or to other regulatory practices and requirements comparable to those applicable to U.S. issuers. Furthermore, with respect to certain foreign countries, the possibility exists of expropriation, nationalization, revaluation of currencies, confiscatory taxation, and limitations on foreign investment and the use or removal of funds or other assets of the Fund, including the withholding of tax on interest, dividends and other distributions and limitations on the repatriation of currencies. In addition, the Fund may experience difficulties or delays in obtaining or enforcing judgments. Foreign securities may be subject to foreign government taxes that could reduce the yield and total return on such securities. Foreign equity securities may be traded on an exchange in the issuer's country, an exchange in another country, or over-the-counter in one or more countries. Most foreign securities markets, including over-the-counter markets, have substantially less volume than U.S. securities markets, and the securities of many foreign issuers may be less liquid and more volatile than securities of comparable U.S. issuers. In addition, there is generally less government regulation of securities markets, securities exchanges, securities dealers, and listed and unlisted companies in foreign countries than in the United States. Foreign markets also have different clearance and settlement procedures, and in certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct and complete such transactions. Inability to dispose of a portfolio security caused by settlement problems could result either in losses to the Fund due to subsequent declines in the value of the portfolio security or, if the Fund has entered into a contract to sell that security, could result in possible liability of the Fund to the purchaser. Delays in settlement could adversely affect the Fund's ability to implement its investment strategies and to achieve its investment objectives. In addition, the costs associated with transactions in securities traded on foreign markets or of foreign issuers, and the expense of maintaining custody of such securities with foreign custodians, generally are higher than the costs associated with transactions in U.S. securities on U.S. markets. Investments in foreign securities may result in higher expenses due to the cost of converting foreign currency to U.S. dollars, the payment of fixed brokerage commissions on foreign exchanges, the expense of maintaining securities with foreign custodians and the imposition of transfer taxes or transaction charges associated with foreign exchanges. Investment in debt securities of supranational organizations involves additional risks. Such organizations' debt securities generally are not guaranteed by their member governments, and payment depends on their financial solvency and/or the willingness and ability of their member governments to support their obligations. Continued support of a supranational organization by its government members is subject to a variety of political, economic and other factors, as well as the financial performance of the organization. DEPOSITARY RECEIPTS In many respects, the risks associated with investing in depositary receipts are similar to the risks associated with investing in foreign equity securities directly. In addition, to the extent that the Fund acquires depositary receipts through banks that do not have a contractual relationship with the foreign issuer of the security underlying the depositary receipts to issue and service depositary receipts, there may be an increased possibility that the Fund would not become aware of and be able to respond to corporate actions, such as stock splits or rights offerings, involving the foreign issuer in a timely manner. Page 13 The information available for American Depositary Receipts ("ADRs") sponsored by the issuers of the underlying securities is subject to the accounting, auditing, and financial reporting standards of the domestic market or exchange on which they are traded, which standards generally are more uniform and more exacting than those to which many non-domestic issuers may be subject. However, some ADRs are sponsored by persons other than the issuers of the underlying securities. Issuers of the stock on which such ADRs are based are not obligated to disclose material information in the United States. The information that is available concerning the issuers of the securities underlying European Depositary Receipts ("EDRs") and Global Depositary Receipts ("GDRs") may be less than the information that is available about domestic issuers, and EDRs and GDRs may be traded in markets or on exchanges that have lesser standards than those applicable to the markets for ADRs. A depositary receipt will be treated as an illiquid security for purposes of the Fund's restriction on the purchases of such securities unless the depositary receipt is convertible into cash by the Fund within seven days. EMERGING MARKET SECURITIES There are special risks associated with investments in securities of companies organized or headquartered in developing countries with emerging markets that are in addition to the usual risks of investing in securities of issuers located in developed foreign markets around the world, and investors in the Fund are strongly advised to consider those risks carefully. The securities markets of emerging market countries are substantially smaller, less developed, less liquid, and more volatile than the securities markets of the United States and developed foreign markets. As a result, the prices of emerging market securities may increase or decrease much more rapidly and much more dramatically than the prices of securities of issuers located in developed foreign markets. Disclosure and regulatory standards in many respects are less stringent than in the United States and developed foreign markets. There also may be a lower level of monitoring and regulation of securities markets in emerging market countries and the activities of investors in such markets, and enforcement of existing regulations has been extremely limited. Many emerging market countries have experienced substantial, and in some periods extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had and may continue to have very negative effects on the economies and securities markets of certain emerging market countries. Economies in emerging markets generally are heavily dependent upon international trade and, accordingly, have been and may continue to be affected adversely by trade barriers, exchange controls, managed adjustments in relative currency values, and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been and may continue to be adversely affected by economic conditions in the countries with which they trade. In addition, custodial services and other costs related to investment in foreign markets may be more expensive in emerging markets than in many developed foreign markets, which could reduce the Fund's investment returns from such securities. In many cases, governments of emerging market countries continue to exercise a significant degree of control over the economies of such countries, and government actions relative to the economy, as well as economic developments generally, also may have a major effect on an issuer's prospects. In addition, certain of such governments have in the past failed to recognize private property rights and have at times naturalized or expropriated the assets of private companies. There is also a heightened possibility of confiscatory taxation, imposition of withholding taxes on dividend and interest payments, or other similar developments that could affect investments in those countries. As a result, there can be no assurance that adverse political changes will not cause the Fund to suffer a loss with respect to any of its holdings. In addition, political and economic structures in many of such countries may be undergoing significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristics of more developed countries. Unanticipated political or social developments may affect the values of the Fund's investments in those countries and the availability of additional investments in those countries. Page 14 INVESTMENTS IN SMALLER COMPANIES Investment in the securities of companies with market capitalizations below $1 billion involves greater risk and the possibility of greater portfolio price volatility than investing in larger capitalization companies. The securities of small-sized concerns, as a class, have shown market behavior which has had periods of more favorable results, and periods of less favorable results, relative to securities of larger companies as a class. For example, smaller capitalization companies may have less certain growth prospects, and may be more sensitive to changing economic conditions, than large, more established companies. Moreover, smaller capitalization companies often face competition from larger or more established companies that have greater resources. In addition, the smaller capitalization companies in which the Fund may invest may have limited or unprofitable operating histories, limited financial resources, and inexperienced management. Furthermore, securities of such companies are often less liquid than securities of larger companies, and may be subject to erratic or abrupt price movements. To dispose of these securities, the Fund may have to sell them over an extended period of time below the original purchase price. Investments in smaller capitalization companies may be regarded as speculative. Securities issued by companies (including predecessors) that have operated for less than three years may have limited liquidity, which can result in their prices being lower than might otherwise be the case. In addition, investments in such companies are more speculative and entail greater risk than do investments in companies with established operating records. CONVERTIBLE SECURITIES Investment in convertible securities involves certain risks. If the conversion value is low relative to the investment value, the price of the convertible security will be governed principally by its yield, and thus may not decline in price to the same extent as the underlying stock; to the extent the market price of the underlying common stock approaches or exceeds the conversion price, the price of the convertible security will be influenced increasingly by its conversion value. A convertible security held by the Fund may be subject to redemption at the option of the issuer at a price established in the instrument governing the convertible security, in which event the Fund will be required to permit the issuer to redeem the security, convert it into the underlying common stock, or sell it to a third party. OTHER DEBT OBLIGATIONS Although securities rated BBB by Standard & Poor's or Baa by Moody's are considered to be of "investment grade," and are considered to have adequate capacity to pay interest and repay principal, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and principal than higher-rated securities. Credit ratings evaluate the safety of principal and interest payments of securities, not their market value. The rating of an issuer is also heavily weighted by past developments and does not necessarily reflect probable future conditions. There is frequently a lag between the time a rating is assigned and the time it is updated. OPTIONS There are several risks associated with transactions in options on securities, currencies and financial indices. Options may be more volatile than the underlying instruments, and therefore, on a percentage basis, an investment in options may be subject to greater fluctuation than an investment in the underlying instruments themselves. There are also significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objective. In addition, a liquid secondary market for particular options may be absent for reasons which include the following: there may be insufficient trading interest in certain options; restrictions may be imposed by an exchange on opening transactions or closing transactions or both; trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options or underlying instruments; unusual or unforeseen circumstances may interrupt normal Page 15 operations on an exchange; the facilities of an exchange or clearing corporation may not at all times be adequate to handle current trading volume; or one or more exchanges could, for economic or other reasons, decide, or be compelled at some future date, to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in that class or series of options) would cease to exist, although outstanding options that had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms. A decision as to whether, when and how to use options involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events. In addition, when trading options on foreign exchanges, many of the protections afforded to participants in U.S. option exchanges will not be available. For example, there may be no daily price fluctuation limits in such exchanges or markets, and adverse market movements could therefore continue to an unlimited extent over a period of time. Although the purchaser of an option cannot lose more than the amount of the premium plus related transaction costs, this entire amount could be lost. Potential losses to the writer of an option are not limited to the loss of the option premium received by the writer, and thus may be greater than the losses incurred in connection with the purchasing of an option. FUTURES TRANSACTIONS There are several risks in connection with the use of futures contracts in the Fund. One risk arises because the correlation between movements in the price of an index futures contract and movements in the value of the portfolio of securities which is the subject of the hedge is not always perfect. The price of the futures contract acquired by the Fund may move more than, or less than, the value of the portfolio of securities being hedged. If the price of the future moves less than the value of the portfolio of securities which is the subject of the hedge, the hedge will not be fully effective but, if the value of the portfolio of securities being hedged has moved in an unfavorable direction, the Fund would be in a better position than if it had not hedged at all. If the value of the portfolio of securities being hedged has moved in a favorable direction, this advantage will be partially offset by movement in the value of the future. If the price of the futures contract moves more than the value of the portfolio of securities, the Fund will experience either a loss or a gain on the futures contract which will not be completely offset by movements in the value of the portfolio of securities which is the subject of the hedge. To compensate for the imperfect correlation of movements in the value of the portfolio of securities being hedged and movements in the price of the futures, the Fund may buy or sell futures contracts in a greater dollar amount than the value of the portfolio of securities being hedged, if the historical volatility of the value of the portfolio of securities has been greater than the historical volatility of the futures contract being used. Conversely, the Fund may buy or sell fewer futures contracts if the historical volatility of the price of the security or currency being hedged is less than the historical volatility of the security or currency. Because of the low margins required, futures trading involves a high degree of leverage. As a result, a relatively small investment in a futures contract by the Fund may result in immediate and substantial loss, or gain, to the Fund. A purchase or sale of a futures contract may result in losses in excess of the initial margin for the futures contract. However, the Fund would have sustained comparable losses if, instead of the futures contract, it had invested in the underlying financial instrument and sold the instrument after the decline. When futures are purchased by the Fund to hedge against a possible unfavorable movement in a currency exchange rate before the Fund is able to invest its cash (or cash equivalents) in stock or debt instruments in an orderly fashion, it is possible that the currency exchange rate may move in a favorable manner instead. If the Fund then decides not to invest in stock or debt instruments at that time because of concern as to possible further market decline or for other reasons, the Fund will realize a loss on the futures contract that is not offset by a reduction in the price of securities purchased. Page 16 In addition, the price of futures contracts may not correlate perfectly with movements in the index due to certain market distortions. First, all participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions. This practice could distort the normal relationship between the index and futures markets. Second, from the point of view of speculators, the deposit requirements in the futures market may be less onerous than margin requirements in the securities market. Therefore, increased participation by speculators in the futures market also may cause temporary price distortions. Due to the possibility of price distortion in the futures market and because of the imperfect correlation between movements in the index and movements in the price of index futures, a correct forecast of general market trends by the Investment Manager still may not result in a successful hedging transaction over a short time frame. Futures exchanges may limit the amount of fluctuation permitted in certain futures contract prices during a single trading day. Once the daily limit has been reached, no more trades may be made on that day at a price beyond the limit. The daily limit governs only price movements during a particular trading day and therefore does not limit potential losses, because the limit may prevent the liquidation of unfavorable positions. The Fund will only enter into futures contracts that are standardized and traded on a U.S. or foreign exchange or board of trade, or similar entity, or quoted on an automated quotation system. However, there is no assurance that a liquid secondary market on an exchange or board of trade will exist for any particular futures contract or at any particular time. In such event, it may not be possible to close a futures position, and, in the event of adverse price movements, the Fund would continue to be required to make daily cash payments of variation margin. In the event futures contracts have been used to hedge a portfolio security, an increase in the price of the security, if any, may partially or completely offset losses on the futures contract. However, as described above, there is no guarantee that the price of the security will, in fact, correlate with the movements in the futures contract and thus provide an offset to losses on a futures contract. Successful use of futures by the Fund is subject to the Investment Manager's ability to predict correctly movements in the direction of the securities markets and interest rates. For example, if the Fund hedged against the possibility of a decline in the market adversely affecting the value of its portfolio and its value increased instead, the Fund would lose part or all of the benefit of the increased value of its portfolio because it would have offsetting losses in its futures positions. In addition, in such situations, if the Fund had insufficient cash, it might have to sell securities to meet daily variation margin requirements. Such sales of securities might, but would not necessarily be at increased prices which would reflect the rising market. The Investment Manager and its predecessor have been actively engaged in the provision of investment supervisory services for institutional and individual accounts since 1970, but the skills required for the successful use of futures are different from those needed to select portfolio securities, and the Investment Manager has limited prior experience in the use of futures techniques in the management of assets under its supervision. Page 17 OTHER RISK CONSIDERATIONS Investment in illiquid securities involves potential delays on resale as well as uncertainty in valuation. Limitations on resale may have an adverse effect on the marketability of portfolio securities, and the Fund might not be able to dispose of such securities promptly or at reasonable prices. A number of transactions in which the Fund may engage are subject to the risks of default by the other party to the transaction. If the seller of securities pursuant to a repurchase agreement entered into by the Fund defaults and the value of the collateral securing the repurchase agreement declines, the Fund may incur a loss. If bankruptcy proceedings are commenced with respect to the seller, realization of the collateral by the Fund may be delayed or limited. Similarly, when the Fund engages in when-issued, reverse repurchase, forward commitment and related settlement transactions, it relies on the other party to consummate the trade; failure of the other party to do so may result in the Fund incurring a loss or missing an opportunity to obtain a price the Investment Manager believed to be advantageous. The risks in lending portfolio securities, as with other extensions of secured credit, consist of a possible delay in receiving additional collateral or in recovery of the securities or possible loss of rights in the collateral should the borrower fail financially. Borrowing also involves special risk considerations. Interest costs of borrowings may fluctuate with changing market rates of interest and may partially offset or exceed the return earned on the borrowed funds (or on the assets that were retained rather than sold to meet the needs for which funds were borrowed). Under adverse market conditions, the Fund might have to sell portfolio securities to meet interest or principal payments at a time when fundamental investment considerations would not favor such sales. To the extent the Fund enters into reverse repurchase agreements, the Fund is subject to risks that are similar to those of borrowing. INVESTMENT RESTRICTIONS FUNDAMENTAL POLICIES The Fund has adopted certain investment restrictions that are fundamental policies and that may not be changed without approval by the vote of a majority of the Fund's outstanding voting securities, as defined in the 1940 Act. The "vote of a majority of the outstanding voting securities" of the Fund, as defined in Section 2(a)(42) of the 1940 Act, means the vote of (i) 67% or more of the voting securities of the Fund present at any meeting, if the holders of more than 50% of the outstanding voting securities of the Fund are present or represented by proxy, or (ii) more than 50% of the outstanding voting securities of the Fund, whichever is less. These restrictions provide that the Fund may not: 1. Purchase any security (other than obligations of the FRG, the German Federal Railways and the German Federal Post Office, which in the aggregate shall not represent 25% or more of the Fund's total assets, or obligations of the U.S. government, its agencies or instrumentalities) if as a result more than 10% of the Fund's total assets would then be invested in securities of any single issuer. 2. Invest 25% or more of the value of its total assets in a particular industry. This restriction does not apply to securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, but will apply to foreign government obligations until such time as the Securities and Exchange Commission permits their exclusion. 3.Purchase more than 10% of the outstanding voting securities of any issuer. 4. Borrow money, except from banks to meet redemption requests or for temporary or emergency purposes; provided that borrowings for temporary or emergency purposes other than to meet redemption requests shall not exceed 5% of the value of its total assets; and provided further that total borrowings shall be made only to the extent that the value of the Fund's total assets, less its liabilities other than borrowings, is equal to at least 300% of all borrowings (including the proposed borrowing). For purposes of the foregoing limitations, reverse repurchase agreements and other borrowing transactions covered by segregated assets are not considered to be borrowings. This investment restriction shall not prohibit the Fund from engaging in futures contracts, options on futures, forward foreign currency exchange transactions, and currency options. Page 18 5. Purchase or sell real estate or real estate mortgage loans, except that the Fund may purchase and sell securities of companies that deal in real estate or interests therein. 6. Purchase securities on margin, except short-term credits as may be necessary or routine for the clearance or settlement of transactions, and except for margin posted in connection with hedging transactions consistent with its investment policies. 7. Underwrite securities of other issuers, except insofar as the Fund may be deemed an underwriter under the U.S. Securities Act of 1933 in selling portfolio securities. 8. Buy or sell commodities, commodity contracts or futures contracts (other than futures contracts with respect to foreign stock or bond indices or other financial indices that the Investment Manager determines are appropriate to hedge the risks associated with interest rates or general fluctuations in the value of its portfolio securities). OPERATING POLICIES The Fund has adopted certain investment restrictions that are not fundamental policies and may be changed by the Board of Directors without approval of the Fund's outstanding voting securities. These restrictions provide that the Fund may not: 1. Invest in interests in oil, gas, or other mineral exploration or development programs; Page 19 2. Participate on a joint or a joint-and-several basis in any trading account in securities (the aggregation of orders for the sale or purchase of marketable portfolio securities with other accounts under the management of the Investment Manager to save brokerage costs, or to average prices among them, is not deemed to result in a securities trading account). 3. Purchase or sell futures if, immediately thereafter, the sum of the amount of "margin" deposits on the Fund's existing futures positions would exceed 5% of the value of the Fund's total assets. 4. Invest more than 15% of the value of its net assets in securities that are illiquid. The Fund is also subject to other restrictions under the 1940 Act; however, the registration of the Company under the 1940 Act does not involve any supervision by any federal or other agency of the Company's management or investment practices or policies, other than incident to occasional or periodic compliance examinations conducted by the SEC staff. EXECUTION OF PORTFOLIO TRANSACTIONS The Investment Manager, subject to the overall supervision of the Board of Directors, makes the Fund's investment decisions and selects the broker or dealer to be used in each specific transaction using its best judgment to choose the broker or dealer most capable of providing the services necessary to obtain the best execution of that transaction. In seeking the best execution of a transaction, the Investment Manager evaluates a wide range of criteria, including any or all of the following: the broker's commission rate, promptness, reliability and quality of executions, trading expertise, positioning and distribution capabilities, back-office efficiency, ability to handle difficult trades, knowledge of other buyers and sellers, confidentiality, capital strength and financial stability, prior performance in serving the Investment Manager and its clients, and other factors affecting the overall benefit to be received in the transaction. When circumstances relating to a proposed transaction indicate to the Investment Manager that a particular broker is in a position to obtain the best execution, the order is placed with that broker. This may or may not be a broker that has provided investment information and research services to the Investment Manager. Such investment information may include, among other things: a wide variety of written reports or other data on individual companies and industries; data and reports on general market or economic conditions; information concerning pertinent federal and state legislative and regulatory developments and other developments that could affect the value of actual or potential investments; information about companies in which the Investment Manager has invested or may consider investing; attendance at meetings with corporate management personnel, industry experts, economists, government personnel, and other financial analysts; comparative issuer performance and evaluation and technical measurement services; subscription to publications that provide investment-related information; accounting and tax law interpretations; availability of economic advice; quotation equipment and services; execution measurement services; market-related and survey data concerning the products and services of an issuer and its competitors or concerning a particular industry that are used in reports prepared by the Investment Manager to enhance its ability to analyze an issuer's financial condition and prospects; and other services provided by recognized experts on investment matters of particular interest to the Investment Manager. In addition, the foregoing services may include the use of, or be delivered by, computer systems whose hardware and/or software components may be provided to the Investment Manager as part of the services. In any case in which information and other services can be used for both research and non-research purposes, the Investment Manager makes an appropriate allocation of those uses and pays directly for that portion of the services to be used for non-research purposes. Subject to the requirement of seeking the best execution, the Investment Manager may, in circumstances in which two or more brokers are in a position to offer comparable execution, give preference to a broker or dealer that has provided investment information to the Investment Manager. In so doing, the Investment Manager may effect Page 20 securities transactions which cause the Fund to pay an amount of commission in excess of the amount of commission another broker would have charged. In electing such broker or dealer, the Investment Manager will make a good faith determination that the amount of commission is reasonable in relation to the value of the brokerage services and research and investment information received, viewed in terms of either the specific transaction or the Investment Manager's overall responsibility to the accounts for which the Investment Manager exercises investment discretion. The Investment Manager evaluates all commissions paid in order to ensure that the commissions represent reasonable compensation for the brokerage and research services provided by such brokers. Such investment information as is received from brokers or dealers may be used by the Investment Manager in servicing all of its clients (including the Fund), and the Fund's commissions may be paid to a broker or dealer who supplied research services not used by the Fund. However, the Investment Manager expects that the Fund will benefit overall by such practice because it is receiving the benefit of research services and the execution of such transactions not otherwise available to it without the allocation of transactions based on the recognition of such research services. Subject to the requirement of seeking the best execution, the Investment Manager may also place orders with brokerage firms that have sold shares of the Fund. The Investment Manager has made and will make no commitments to place orders with any particular broker or group of brokers. The Company anticipates that a substantial portion of all brokerage commissions will be paid to brokers who supply investment information to the Investment Manager. The Investment Manager has no obligation to purchase or sell for the Fund any security that it, or its officers of employees, may purchase or sell for the Investment Manager's or their own accounts or the account of any other client, if in the opinion of the Investment Manager such transaction appears unsuitable, impractical or undesirable for the Fund. Additionally, the Investment Manager does not prohibit any of its officers or employees from purchasing or selling for their own accounts securities that may be recommended to or held by the Investment Manager's client's, subject to the Investment Manager's and the Fund's Code of Ethics. The Fund also invests frequently in foreign and/or U.S. securities that are not listed on a national securities exchange but are traded in the over-the-counter market. The Fund may also purchase listed securities through the third market or fourth market. When transactions are executed in the over-the-counter market or the third or fourth market, the Investment Manager will seek to deal with the counterparty that the Investment Manager believes can provide the best execution, whether or not that counterparty is the primary market maker for that security. During the Fiscal Year ended December 31, 1998, the Fund acquired securities of its regular brokers or dealers (as defined in Rule 10b-1 under the 1940 Act) or their parents as follows: ________. For the Fiscal Years ended December 31, 1996, 1997 and 1998, the Fund paid total brokerage commissions of $__________, $__________ and $__________, respectively. Of the total commissions paid during the fiscal year ended December 31, 1998, $__________ (__%) were paid to firms which provided research, statistical or other services to the Investment Manager. The Investment Manager has not separately identified a portion of such commissions as applicable to the provision of such research, statistical or otherwise. [Payments to affiliated brokers] As noted below, the Investment Manager is an indirect wholly owned subsidiary of Dresdner Bank AG ("Dresdner"). Dresdner Kleinwort Benson North America LLC ("Dresdner Kleinwort Benson") and other Dresdner subsidiaries may be broker-dealers (collectively, the "Dresdner Affiliates"). The Investment Manager believes that it is in the best interests of the Fund to have the ability to execute brokerage transactions, when appropriate, through the Dresdner Affiliates. Accordingly, the Investment Manager intends to execute brokerage transactions on behalf of the Fund through the Dresdner Affiliates, when appropriate and to the extent consistent with applicable laws and regulations, including federal banking laws. In all such cases, the Dresdner Affiliates will act as agent for the Fund, and the Investment Manager will not enter into any transaction on behalf of the Fund in which a Dresdner Affiliate is acting as principal for its own account. In connection with such agency transactions, the Dresdner Affiliates will receive compensation in the form of brokerage commissions separate from the Investment Manager's management fee. The Investment Manager's policy is that such commissions must be reasonable and fair when compared to the commissions received by other brokers Page 21 in connection with comparable transactions involving similar securities and that the commissions paid to a Dresdner Affiliate must be no higher than the commissions paid to that broker by any other similar customer of that broker who receives brokerage and research services that are similar in scope and quality to those received by the Fund. The Investment Manager performs investment management and advisory services for various clients, including other registered investment companies, and pension, profit-sharing and other employee benefit plans, as well as individuals. In many cases, portfolio transactions for the Fund may be executed in an aggregated transaction as part of concurrent authorizations to purchase or sell the same security for numerous accounts served by the Investment Manager, some of which accounts may have investment objectives similar to those of the Fund. The objective of aggregated transactions is to obtain favorable execution and/or lower brokerage commissions, although there is no certainty that such objective will be achieved. Although executing portfolio transactions in an aggregated transaction potentially could be either advantageous or disadvantageous to any one or more particular accounts, aggregated transactions in which the Fund participates will be effected only when the Investment Manager believes that to do so will be in the best interest of the Fund, and the Investment Manager is not obligated to aggregate orders into larger transactions. These orders generally will be averaged as to price. When such aggregated transactions occur, the objective will be to allocate the executions in a manner which is deemed fair and equitable to each of the accounts involved over time. In making such allocation decisions, the Investment Manager will use its business judgment and will consider, among other things, any or all of the following: each client's investment objectives, guidelines, and restrictions, the size of each client's order, the amount of investment funds available in each client's account, the amount already committed by each client to that or similar investments, and the structure of each client's portfolio. DIRECTORS AND OFFICERS The names and addresses of the Directors and officers of the Companies and their principal occupations and certain other affiliations during the past five years are given below. Unless otherwise specified, the address of each of the following persons is Four Embarcadero Center, San Francisco, California 94111. ROBERT J. BIRNBAUM (71), DIRECTOR. Director, Chicago Board Options Exchange (since 1998); Director, Chicago Mercantile Exchange (1990 to 1998); Trustee, Liberty All-Star Growth Fund, Inc. (since 1995); Trustee, Colonial Funds (since 1995); Trustee, Liberty All-Star Equity Fund, Inc. (since 1994); Special Counsel, Dechert Price & Rhoads (law firm) (1988 to 1993); President and Chief Operating Officer, New York Stock Exchange, Inc. (1985 to 1988); President and Chief Operating Officer, American Stock Exchange, Inc. (1977 to 1985). CARROLL BROWN (70), DIRECTOR. President, The American Council on Germany (since 1988); Executive Director, John J. McCloy Fund (since 1988); Foreign Service Officer, United States Department of State with service in Yugoslavia, Poland, Austria, and Germany (1957 to 1988); U.S. Consul General, Dusseldorf and Munich; Deputy Assistant Secretary of State, U.S. State Department (1986 and 1987). THEODORE J. COBURN (44), DIRECTOR. Partner, Brown, Coburn & Co., a consulting firm (since 1991); education associate at Harvard University Graduate School of Education (since 1996); Director, Nicholas-Applegate Fund, Inc. (since 1987); Trustee, Nicholas-Applegate Mutual Funds (since 1992); Director, Measurement Specialties, Inc. (since 1995); Director, Moovies, Inc. (since 1995); Senior Vice President, Prudential Securities Inc. (1986 to 1991); Managing Director of the Global Equity Transactions Group and a member of the Board of Directors, Prudential Securities (1986 to 1991); Managing Director, Merrill Lynch Capital Markets (1983 to 1986). JAMES E. DOWD (75), DIRECTOR. Attorney/Consultant (since 1982); Director, Trustee or Managing General Partner of various registered investment companies managed Page 22 by Federated Investors (since 1982); President, Boston Stock Exchange (1969t to 1982); Member of Panel of Arbitrators, New York Stock Exchange, Inc. (since 1986); Member of Panel of Arbitrators, National Association of Securities Dealers, Inc. (since 1984). SIEGFRIED A. KESSLER (80), DIRECTOR. Retired; Chairman. Carl Zeiss Inc. (New York) (1981 to 1982) and President (1965 to 1981) (sale, distribution and service of scientific instruments and optical products) (1965 to 1985). ALFRED FIORE (60), DIRECTOR. General Manager, Hirschfeld, Stern, Moyer & Ross, Inc. (employee benefit consulting firm) (since 1988); Consultant, Lois/U.S.A. (creative advertising agency) (1987 to 1988); Executive Vice President and Chief Financial Officer, Parlux Fragrances, Inc. (1987); Executive Vice President and Chief Financial Officer, Concord Assets Group, Inc. (real estate manager) (1986); President and Chief Operating Officer, Amerigroup Financial Services, Inc. (financial services) (1984 to 1986); Partner, KPMG Peat Marwick, LLP (1973 to 1984). GOTTFRIED W. PERBIX (68), DIRECTOR. President, Perbix International, Inc. (management consulting) (1980 to 1994); Director, American Profol Inc. (plastic film manufacturers) (since 1993); Sole Proprietor, Perbix Associates (executive search) (since 1978) JACOB SALIBA (84), DIRECTOR. Director (since 1994), Chairman (1988 to 1994) and Chief Executive Officer (1988 to 1993), Katy Industries, Inc. (diversified manufacturing and oil and related services); President and Chief Operating Officer, Katy Industries, Inc. (1968 to 1987); Director, CEGF Compagnie des Entrepots et Gares Frigorifques (cold storage warehouses) (since 1989); Director, Schon & Cie AG (manufacturer of machinery) (since 1990); Director, Sahlman Seafoods (shrimp fishing and shrimp aquaculture) (since 1998); Director, Syratech Corp. (manufacturer of household furnishings) (1992 to 1998). Fund Officers - To be elected The Fund pays each of its Directors who is not an interested person of the Fund, as defined in the 1940 Act, an annual fee of $9,000, plus $1,500 for each Board of Directors meeting attended. During the fiscal year ended December 31, 1998, all such Directors as a group received from the Fund aggregate fees amounting to $__________. In addition, the Fund reimburses Directors not affiliated with Dresdner RCM for travel and out-of-pocket expenses incurred in connection with meetings of the Board. The following table sets forth for each Director receiving compensation from the Fund the amount of such compensation paid by the Fund during the fiscal year ended December 31, 1998. Page 23
NAME OF PERSON, AGGREGATE PENSION OR RETIREMENT ESTIMATED ANNUAL TOTAL COMPENSATION FROM POSITION COMPENSATION FROM BENEFITS ACCRUED AS BENEFITS UPON FUND AND FUND COMPLEX FUND PART OF FUND EXPENSES RETIREMENT PAID TO DIRECTORS(1) Robert J. Birnbaum $______ N/A __ $______ Carroll Brown ______ N/A __ ______ Theodore J. Coburn ______ N/A __ ______ James E. Dowd ______ N/A __ ______ Alfred W. Fiore ______ N/A __ ______ Siegfried A. Kessler ______ N/A __ ______ Gottfried W. Perbix ______ N/A __ ______ Jacob Saliba ______ N/A __ ______ TOTAL $______ $______
- -------------- (1) During the fiscal year ended December 31, 1998, there were __ funds in the complex. During the fiscal year ended December 31, 1997, the Board of Directors met five times and during the fiscal year ending December 31, 1998, the Board of Directors met eleven times. Each Director attended at least 75% of the total number of meetings of the Board and each Committee of the Board of which he was a member held during the period in which he served. The Board of Directors has an Audit Committee presently composed of Messrs. Perbix, Dowd, and Kessler, none of whom is an interested person of the Fund (as defined in the 1940 Act). The Audit Committee makes recommendations to the full Board with respect to the engagement of independent accountants and reviews with the independent accountants the plan and results of the audit engagement and matters having a material effect upon the Fund's financial operations. The Audit Committee held two meetings during the fiscal year ended December 31, 1997 and two meetings during the fiscal year ending December 31, 1998. The fees paid to Audit Committee members in 1998 were at the same rate as the fees paid in 1997. In 1998, the Board of Directors established an ad hoc Strategic Planning and Communications Committee, composed of Messrs. Birnbaum, Coburn, and Fiore, none of whom is an interested person of the Fund (as defined in the 1940 Act), to communicate with stockholders on behalf of the full Board of Directors and to consider various strategic options for the future of the Fund, including, whether the Fund should convert from a closed-end investment company to an open-end investment company. Strategic Planning and Communications Committee members received $1,500 per meeting in 1998. There were 14 such meetings in 1998. Page 24 The Board of Directors has no compensation committee, or other committee performing similar a function. Uopn conversion of the Fund to an open-end structure, a Nominating Committee was established, which will consist of the Directors who are not interested persons of the Fund (as defined in the 1940 Act). CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES As of December 31, 1998, the Directors and Officers of the Company, as a group, owned beneficially and of record less than 1% of the outstanding shares of the Fund. As of _____________, 1999, there were ____________ shares of the Fund outstanding. On that date the following were known to the Company to own of record more than 5% of the Fund's capital stock: Name and Address of % of Shares Beneficial Owner Shares Held Outstanding THE INVESTMENT MANAGER The Board of Directors the Company has overall responsibility for the operation of the Fund. Pursuant to such responsibility, the Board of Directors has approved various contracts for designated financial organizations to provide, among other things, day to day management services required by the Fund. The Company has retained as the Fund's Investment Manager, Dresdner RCM Global Investors LLC, a Delaware limited liability company with principal offices at Four Embarcadero Center, San Francisco, California 94111. The Investment Manager is actively engaged in providing investment supervisory services to institutional and individual clients. The Investment Manager was established in December of 1998 and is the successor to the business of its holding company, Dresdner RCM Global Investors US Holdings LLC. The Investment Manager was originally formed as Rosenberg Capital Management in 1970, and it and its successors have been consistently in business since then. The Investment Manager is an indirect wholly owned subsidiary of Dresdner Bank, an international banking organization with principal executive offices located at Gallunsanlage 7, 60041 Frankfurt, Germany. With total Page 25 consolidated assets as of December 31, 1998, of DM ___ billion ($___ billion), and approximately 1,600 offices and 45,000 employees in over 60 countries around the world, Dresdner is one of Germany's largest banks. Dresdner provides a full range of banking services including, traditional lending activities, mortgages, securities, project finance and leasing, to private customers and financial and institutional clients. In the United States, Dresdner maintains branches in New York and Chicago and an agency in Los Angeles. As of the date of this SAI, the nine members of the Board of Managers of the Investment Manager are William L. Price (Chairman), Gerhard Eberstadt, George N. Fugelsang, Joachim Madler, Susan C. Gause, Luke D. Knecht, Jeffrey S. Rudsten, William S. Stack, and Kenneth B. Weeman, Jr. Banking laws and regulations, including the Glass-Steagall Act as presently interpreted by the Board of Governors of the Federal Reserve System, prohibit certain banking entities, such as Dresdner, from sponsoring, organizing, controlling or distributing the shares of a registered investment company continuously engaged in the issuance of its shares, and prohibit banks generally from underwriting securities. However, banks and their affiliates generally can act as advisers to investment companies and can purchase shares of investment companies as agent for and upon the order of customers. The Investment Manager believes that it may perform the services contemplated by its investment management agreements with the Company without violating these banking laws or regulations. However, future changes in legal requirements relating to the permissible activities of banks and their affiliates, as well as future interpretations of current requirements, could prevent the Investment Manager from continuing to perform investment management services for the Company. The Investment Manager is also the investment manager for Dresdner RCM International Growth Equity Fund, Dresdner RCM Growth Equity Fund and Dresdner RCM Small Cap Fund, each a series of Dresdner RCM Capital Funds, Inc.; Dresdner RCM Large Cap Growth Fund, Dresdner RCM Global Small Cap Fund, Dresdner RCM Global Technology Fund, Dresdner RCM Global Health Care Fund, Dresdner RCM Biotechnology Fund, Dresdner RCM Emerging Markets Fund, Dresdner RCM Tax Managed Growth Fund; Dresdner RCM Global Equity Fund and Dresdner RCM Strategic Income Fund, each a series of Dresdner RCM Global Funds, Inc.; RCM Strategic Global Government Fund, Inc., and Bergstrom Capital Corporation, each a closed-end management investment company. The Fund's Management Agreement may be renewed from year-to-year after its initial term, provided that any such renewals have been specifically approved at least annually by (i) the vote of a majority of the Company's Board of Directors, including a majority of the Directors who are not parties to the Management Agreement or interested persons (as defined in the 1940 Act) of any such person, cast in person at a meeting called for the purpose of voting on such approval, or (ii) the vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the Fund and the vote of a majority of the Directors who are not parties to the contract or interested persons of any such party. The Fund has, under its Management Agreement, assumed the obligation for payment of all of its ordinary operating expenses, including: (a) brokerage and commission expenses, (b) federal, state, or local taxes incurred by, or levied on, the Fund, (c) interest charges on borrowings, (d) charges and expenses of the Fund's custodian, (e) Page 26 investment advisory fees (including fees payable to the Investment Manager under the Management Agreement), (f) fees pursuant to the Fund's Rule 12b-1 plan, (g) legal and audit fees, (h) SEC and "Blue Sky" registration expenses, and (i) compensation, if any, paid to officers and employees of the Company who are not employees of the Investment Manager (see DIRECTORS AND OFFICERS). The Investment Manager is responsible for all of its own expenses in providing services to the Fund. Expenses attributable to the Fund are charged against the assets of the Fund. To limit the total expenses of the Fund, the Investment Manager has agreed to waive its fees and to pay the Fund on a quarterly basis the amount, if any, by which the ordinary operating expenses of the Fund attributable to the Fund for the quarter (except taxes, interest, and extraordinary expenses) exceed an expense ratio of 1.60% on an annual basis for at least the first three years of operation following the conversion of the Fund to open-end status. The Fund will reimburse the Investment Manager for deferred fees or other expenses paid by the Investment Manager pursuant to the Investment Management Agreement in later years in which operating expenses are otherwise, and as a result of such reimbursement would be, less than such expense limitation. Accordingly, until all such amounts are reimbursed, the fund's expenses will be higher, and its total return will be lower, than would otherwise have been the case. No interest, carrying, or finance charge will be paid by the Fund with respect to any amounts representing deferred fees or other expenses paid by the Investment Manager. In addition, the fund will not be required to repay any unreimbursed amounts to the Investment Manager upon termination of the Management Agreement. The Fund's Management Agreement provides that the Investment Manager will not be liable for any error of judgment or for any loss suffered by the Fund in connection with the matters to which the Management Agreement relates, except for liability resulting from willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of the Investment Manager's reckless disregard of its duties and obligations under the Management Agreement. The Company has agreed to indemnify the Investment Manager out of the assets of the Fund, against liabilities, costs and expenses that the Investment Manager may incur in connection with any action, suit, investigation or other proceeding arising out of or otherwise based on any action actually or allegedly taken or omitted to be taken by the Investment Manager in connection with the performance of its duties or obligations under the Management Agreement with respect to the Fund or otherwise as investment manager of the Fund. The Investment Manager is not entitled to indemnification with respect to any liability to the Fund or its stockholders by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties, or of its reckless disregard of its duties and obligations under the Management Agreement. The Management Agreement is terminable without penalty on 60 days' written notice by a vote of the majority of the outstanding voting securities of the Fund by a vote of the majority of the Company's Board of Directors, or by the Investment Manager on 60 days' written notice and will automatically terminate in the event of its assignment (as defined in the 1940 Act). THE DISTRIBUTOR Funds Distributor, Inc., 60 State Street, Suite 1300, Boston, Massachusetts 02109 (the "Distributor") serves as Distributor to the Fund. The Distributor has provided mutual fund distribution services since 1976, and is a subsidiary of Boston Institutional Group, Inc., which provides distribution and other related services with respect to investment products. DISTRIBUTION AGREEMENT Pursuant to a Distribution Agreement with the Company, the Distributor has agreed to use its best efforts to effect sales of shares of the Fund, but is not obligated to sell any specified number of shares. The Distribution Agreement contains provisions with respect to renewal and termination similar to those in the Fund's Management Page 27 Agreement discussed above. Pursuant to the Distribution Agreement, the Company has agreed to indemnify the Distributor out of the assets of the Fund to the extent permitted by applicable law against certain liabilities under the Securities Act of 1933 arising in connection with the Distributor's activities on behalf of the Company. The Company also has an agreement with the Investment Manager and the Distributor pursuant to which the Distributor has agreed to provide: regulatory, compliance and related technical services to the Company; services with regard to advertising, marketing and promotional activities; and officers to the Company. The Investment Manager is required to reimburse the Company for any fees and expenses of the Distributor pursuant to the Agreement. DISTRIBUTION PLAN The Company, on behalf of its Dresdner RCM Europe Fund Class N shares, has adopted a distribution plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund pays the Distributor an annual fee of up to 0.25% of the average daily net assets of its Class N shares as reimbursement for certain expenses actually incurred by the Distributor in connection with providing distribution and shareholder support services to such shares. Class I shares are not subject to 12b-1 fees. The Distributor is reimbursed for: (a) expenses incurred in connection with advertising and marketing the N Class of shares of the Fund, including but not limited to any advertising by radio, television, newspapers, magazines, brochures, sales literature, telemarketing or direct mail solicitations; (b) periodic payments of fees or commissions for distribution assistance made to one or more securities brokers, dealers or other industry professionals such as investment advisers, accountants, estate planning firms and the Distributor itself in respect of the average daily value of Class N shares owned by clients of such service organizations, and (c) expenses incurred in preparing, printing and distributing the Fund's prospectus and statement of additional information. If in any year Funds Distributor is due more from the Fund for such services than is immediately payable because of the expense limitation under the Plan, the unpaid amount is carried forward from while the Plan is in effect until such later year as it may be paid. There is no limit on the periods during which unreimbursed expenses may be carried forward, although the Fund is not obligated to repay any outstanding unreimbursed expenses that may exist if the Plan is terminated or not continued. No interest, carrying, or finance charge will be imposed on any amounts carried forward. The Plan continues in effect from year to year with respect to the Fund, provided that each such continuance is approved at least annually by a vote of the Board of Directors of the Company, including a majority vote of the Directors who are not "interested persons" of the Company within the meaning of the 1940 Act and have no direct or indirect financial interest in the Plan or in any agreement related to the Plan, cast in person at a meeting called for the purpose of voting on such continuance. The Plan may be terminated with respect to the Fund at any time, without penalty, by the vote of a majority of the outstanding Class N shares of the Fund or of the Board of Directors in the manner described above. The Plan may not be amended to increase materially the amounts to be paid by the Fund for the services described therein without approval by the shareholders of the Fund, and all material amendments are required to be approved by the Board of Directors of the respective Company in the manner described above. The Plan will automatically terminate in the event of its assignment. The Distributor may pay broker-dealers and others, out of the fees it receives under the Plan, quarterly trail commissions of up to 0.25%, on an annual basis, of the average daily net assets attributable to the N class of shares of the Fund held in the accounts of their customers. Pursuant to the Plan, the Board of Directors of each Company will review at least quarterly a written report of the distribution expenses incurred on behalf of shares of the N Class of shares of the Fund by the Distributor. The report will include an itemization of the distribution expenses and the purposes of such expenditures. In addition, as long as the Plans remain in effect, the selection and nomination of Directors of each Company who are not "interested persons" of the Company within the meaning of the 1940 Act will be committed to the Directors who are not interested persons of the Company. Page 28 NET ASSET VALUE For purposes of the computation of the net asset value of each share of the Fund, equity securities traded on stock exchanges are valued at the last sale price on the exchange or in the principal over-the-counter market in which such securities are traded as of the close of regular trading on the day the securities are being valued, unless the Board of Directors or a duly constituted committee of the Board determines that such price does not reflect the fair value of the security. In cases where securities are traded on more than one exchange, the securities are valued on the exchange determined by the Investment Manager to be the primary market for the securities. If there has been no sale on such day, the security will be valued at the closing bid price on such day. If no bid price is quoted on such day, then the security will be valued by such method as a duly constituted committee of the Board of Directors determines in good faith to reflect its fair value. Readily marketable securities traded only in the over-the-counter market that are not listed on the NASDAQ Stock Market or a similar foreign reporting service will be valued at the mean bid price, or such other comparable sources as the Board of Directors deems appropriate to reflect their fair value. Other portfolio securities held by the Fund will be valued at current market value, if current market quotations are readily available for such securities. To the extent that market quotations are not readily available such securities will be valued by whatever means a duly constituted committee of the Board of Directors deems appropriate to reflect their fair value. Futures contracts and related options are valued at their last sale or settlement price as of the close of the exchange on which they are traded or, if no sales are reported, at the mean between the last reported bid and asked prices. All other assets of the Fund will be valued in such manner as a duly constituted committee of the Board of Directors in good faith deems appropriate to reflect their fair value. Trading in securities on foreign exchanges and over-the-counter markets is normally completed at times other than the close of regular trading on the New York Stock Exchange. In addition, foreign securities and commodities trading may not take place on all business days in New York, and may occur in various foreign markets on days which are not business days in New York and on which net asset value is not calculated. The calculation of net asset value may not take place contemporaneously with the determination of the prices of portfolio securities used in such calculation. Events affecting the values of portfolio securities that occur between the time their prices are determined and the close of the New York Stock Exchange will not be reflected in the calculation of net asset value unless the Board of Directors determines that a particular event would materially affect net asset value, in which case an adjustment will be made. Assets or liabilities initially expressed in terms of foreign currencies are translated prior to the next determination of net asset value into U.S. dollars at the spot exchange rates at 12:00 p.m. Eastern time or at such other rates as the Investment Manager may determine to be appropriate in computing net asset value. Debt obligations with maturities of 60 days or less are valued at amortized cost. The Company may use a pricing service approved by the Board of Directors to value other debt obligations. Prices provided by such a service represent evaluations of the mean between current bid and asked market prices, may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, individual rating characteristics, indications of value from dealers, and other market data. Such services may use electronic data processing techniques and/or a matrix system to determine valuations. The procedures of such services are reviewed periodically by the officers of the Investment Manager under the general supervision of the Board of Directors. Short-term investments are amortized to maturity based on their cost, adjusted for foreign exchange translation, provided such valuations equal fair market value. Page 29 PURCHASE AND REDEMPTION OF SHARES The price paid for purchase and redemption of shares of the Fund is based on the net asset value per share, which is normally calculated once daily at the close of regular trading (normally 4:00 P.M. Eastern time) on the New York Stock Exchange on each day that the New York Stock Exchange is open. The New York Stock Exchange is currently closed on weekends and on the following holidays: New Year's Day, President's Day, Martin Luther King Jr. Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The offering price is effective for orders received by Boston Financial Data Services ("BFDS") prior to the time of determination of net asset value. Dealers are responsible for promptly transmitting purchase orders to BFDS. The Company reserves the right in its sole discretion to suspend the continued offering of its Fund's shares and to reject purchase orders in whole or in part when such rejection is in the best interests of the Fund and its respective stockholders. REDEMPTION OF SHARES Payments will be made wholly in cash unless the Board of Directors believes that economic conditions exist which would make such a practice detrimental to the best interests of the Fund. Under such circumstances, payment of the redemption price could be made either in cash or in portfolio securities taken at their value used in determining the redemption price (and, to the extent practicable, representing a pro rata portion of each of the portfolio securities held by the Fund), or partly in cash and partly in portfolio securities. Payment for shares redeemed also may be made wholly or partly in the form of a pro rata portion of each of the portfolio securities held by the Fund at the request of the redeeming stockholder, if the Company believes that honoring such request is in the best interests of such series. If payment for shares redeemed were to be made wholly or partly in portfolio securities, brokerage costs would be incurred by the stockholder in converting the securities to cash. DIVIDENDS, DISTRIBUTIONS AND TAX STATUS Each income dividend and capital gain distribution, if any, declared by the Fund will be paid in full and fractional shares based on the net asset value as determined on the payment date for such distribution, unless the stockholder or his or her duly authorized agent has elected to receive all such payments or the dividend or other distribution portion thereof in cash. Changes in the manner in which dividend and other distribution payments are paid may be requested by the stockholder or his or her duly authorized agent at any time through written notice to the Company and will be effective as to any subsequent payment if such notice is received by the Company prior to the record date used for determining the stockholders entitled to such payment. Any distribution election will remain in effect until the Company is notified by the stockholder in writing to the contrary. REGULATED INVESTMENT COMPANY The Fund has qualified and intends to continue to qualify for treatment as a "regulated investment company" under Subchapter M of the Code. The Fund is treated as a separate corporation for tax purposes and thus the provisions of the Code generally applicable to regulated investment companies are applied separately to the Fund. In addition, net capital gains (the excess of net long-term capital gain over net short-term capital loss), net investment income, and operating expenses are determined separately for the Fund. By complying with the applicable provisions of the Code, the Fund will not be subject to federal income tax with respect to net investment income and net realized capital gains distributed to its stockholders. Page 30 To qualify as a regulated investment company under Subchapter M, generally the Fund must: (i) derive at least 90% of its gross income each taxable year from dividends, interest, payments with respect to securities loans, and gains from the sale or other disposition of stock, securities or foreign currencies and certain other income (including gains from certain options, futures and forward contracts), ("Income Requirement"); and (ii) diversify its holdings so that, at the end of each fiscal quarter, (a) at least 50% of the value of the Fund's total assets is represented by cash, cash items, U.S. Government securities, securities of other regulated investment companies and other securities, limited, in respect of any one issuer, to an amount not greater than 5% of the Fund's total assets and 10% of the outstanding voting securities of such issuer, and (b) not more than 25% of the value of its total assets is invested in the securities of any one issuer (other than U.S. Government securities or the securities of other regulated investment companies), or in two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses. In any taxable year in which the Fund so qualifies and distributes at least 90% of the sum of its investment company taxable income (consisting of net investment income, the excess of net short-term capital gains over net long-term capital losses and net gains from certain foreign currency transactions) and its net tax-exempt interest income (if any) ("Distribution Requirement"), it will be taxed only on that portion, if any, of such investment company taxable income and any net capital gain that it retains. The Fund expects to so distribute all of such income and gains on an annual basis and thus will generally avoid any such taxation. Even if the Fund qualifies as a "regulated investment company," it may be subject to a federal excise tax unless it meets certain additional distribution requirements. Under the Code, a nondeductible excise tax of 4% ("Excise Tax") is imposed on the excess of a regulated investment company's "required distribution" for a calendar year ending within the regulated investment company's taxable year over the "distributed amount" for that calendar year. The term "required distribution" means the sum of (i) 98% of ordinary income (generally net investment income and net gains from certain foreign currency transactions) for the calendar year, (ii) 98% of capital gain net income (generally both long-term and short-term capital gain) for the one-year period ending on October 31 (as though that period were the regulated investment company's taxable year), and (iii) the sum of any untaxed, undistributed net investment income and net capital gains of the regulated investment company for prior periods. The term "distributed amount" generally means the sum of (i) amounts actually distributed by the Fund from its current year's ordinary income and capital gain net income and (ii) any amount on which the Fund pays income tax for the year. The Fund intends to meet these distribution requirements to avoid Excise Tax liability. Stockholders who are subject to federal or state income or franchise taxes will be required to pay taxes on dividend and capital gain distributions they receive from the Fund whether paid in additional shares of the Fund or in cash. To the extent that dividends received by the Fund would qualify for the 70% dividends-received deduction available to corporations, the Fund must designate in a written notice to stockholders, within 60 days after the close of the Fund's taxable year, the amount of the Fund's dividends that would be eligible for this treatment. In order to qualify for the dividends-received deduction with respect to a dividend paid on Fund shares, a corporate stockholder must hold the Fund shares for at least 45 days during the 90 day period that begins 45 days before the shares become ex-dividend with respect to the dividend. Stockholders, such as qualified employee benefit plans, which are exempt from federal and state taxation generally would not have to pay income tax on dividend or capital gain distributions. Prospective tax-exempt investors should consult their own tax advisers with respect to the tax consequences of an investment in the Fund under federal, state, and local tax laws. WITHHOLDING Dividends paid by the Fund to a stockholder who, as to the U.S., is a nonresident alien individual, nonresident alien fiduciary of a trust or estate, foreign corporation, or foreign partnership (a "foreign stockholder") generally will be subject to U.S. withholding tax (at a rate of 30% or a lower treaty rate, if applicable). Withholding will not apply, however, if a dividend paid by the Fund to a foreign stockholder is "effectively connected" with the conduct of a U.S. trade or business, in which case the reporting and withholding requirements applicable to U.S. citizens or domestic corporations will apply. Distributions of net capital gain to foreign stockholders who are neither U.S. resident aliens nor engaged in a U.S. trade or business generally are not subject to withholding or U.S. federal income tax. Page 31 FOREIGN CURRENCY, OPTIONS, FUTURES AND FORWARD CONTRACTS Gains from the sale or other disposition of foreign currencies (except certain gains therefrom that may be excluded by future regulations), and gains from options, futures, and forward contracts derived by the Fund with respect to its business of investing in securities of foreign currencies, will qualify as permissible income under the Income Requirement. SECTION 1256 CONTRACTS Many of the options, futures contracts and forward contracts entered into by the Fund are "Section 1256 contracts." Any gains or losses realized on Section 1256 contracts are generally considered 60% long-term and 40% short-term capital gains or losses, although certain foreign currency gains and losses from such contracts may be treated as ordinary income in character. Section 1256 contracts held by the Fund at the end of each taxable year (and, for purposes of the Excise Tax, on October 31 or such other dates as prescribed under the Code), other than Section 1256 contracts that are part of a "mixed straddle" with respect to which the Fund has made an election not to have the following rules apply, must be "marked-to-market" (that is, treated as sold for their fair market value) for federal income tax purposes, with the result that unrealized gains or losses are treated as though they were realized. The 60% portion of gains on Section 1256 contracts that is treated as long-term capital gain will qualify for the reduced maximum tax rates on net capital gain -- 20% (10% for taxpayers in the 15% marginal tax bracket) for gain recognized on capital assets held for more than 12 months. STRADDLE RULES Generally, the hedging transactions and other transactions in options, futures and forward contracts undertaken by the Fund may result in "straddles" for U.S. federal income tax purposes. The straddle rules may affect the amount, character and timing of recognition of gains or losses realized by the Fund. In addition, losses realized by the Fund on positions that are part of a straddle position may be deferred under the straddle rules, rather than being taken into account for the taxable year in which these losses are realized. Because limited regulations implementing the straddle rules have been promulgated, the tax consequences of hedging transactions and options, futures and forward contracts to the Fund are not entirely clear. Hedging transactions may increase the amount of short-term capital gain realized by the Fund, which is taxed as ordinary income when distributed to stockholders. The Fund may make one or more elections available under the Code which are applicable to straddle positions. If the Fund makes any of the elections, the amount, character and timing of the recognition of gains or losses from the affected straddle positions will be determined under rules that vary according to elections made. The rules applicable under certain elections operate to accelerate the recognition of gains or losses from the affected straddle positions. Because the application of the straddle rules may affect the character of gains or losses, defer losses and/or accelerate the recognition of gains or losses from the affected straddle positions, the amount which must be distributed to stockholders, and which will be taxed to stockholders as ordinary income or long-term capital gain, may be increased or decreased substantially as compared to the Fund that did not engage in such hedging transactions. SECTION 988 GAINS AND LOSSES Under the Code, gains or losses attributable to fluctuations in exchange rates which occur between the time the Fund accrues interest or other receivables, or accrues expenses or other liabilities, denominated in a foreign currency and the time the Fund actually collects such receivables or pays such liabilities, generally are treated as ordinary income or loss. Similarly, on the disposition of debt securities denominated in foreign currency and on the disposition of certain futures contracts, forward contracts and options, gains or losses attributable to fluctuation in the value of foreign currency between the date of acquisition of the debt security, contract or option and the date of disposition thereof are also treated as ordinary gain or loss. These gains or losses, referred to under the Code as Page 32 "Section 988" gains or losses, may increase or decrease the amount of the Fund's investment company taxable income to be distributed to stockholders as ordinary income. FOREIGN TAXES The Fund may be required to pay withholding and other taxes imposed by foreign countries which would reduce the Fund's investment income, generally at rates from 10% to 40%. Tax conventions between certain countries and the United States may reduce or eliminate such taxes. If more than 50% of the value of the Fund's total assets at the close of its taxable year consists of securities of foreign corporations, the Fund will be eligible to elect to "pass-through" to the Fund's stockholders the amount of foreign income and similar taxes paid by the Fund. If this election is made, stockholders generally subject to tax will be required to include in gross income (in addition to taxable dividends actually received) their pro rata shares of the foreign income taxes paid by the Fund, and may be entitled either to deduct (as an itemized deduction) their pro rata shares of foreign taxes in computing their taxable income or to use such amount (subject to limitations) as a foreign tax credit against their U.S. federal income tax liability. No deduction for foreign taxes may be claimed by a stockholder who does not itemize deductions. Each stockholder will be notified within 60 days after the close of the Fund's taxable year whether the foreign taxes paid by the Fund will be "passed-through" for that year. The foregoing is a general abbreviated summary of present U.S. federal income tax laws applicable to the Fund, their stockholders and dividend and capital gain distributions by the Fund. Stockholders are urged to consult their own tax advisers for more detailed information and for information regarding any foreign, state, and local tax laws and regulations applicable to dividends and other distributions received from the Fund. INVESTMENT RESULTS Average annual total return ("T") of the Fund is calculated as follows: an initial hypothetical investment of $1,000 ("P") is divided by the net asset value of shares of the Fund as of the first day of the period in order to determine the initial number of shares purchased. Subsequent dividend and capital gain distributions by the Fund are paid at net asset value on the payment date determined by the Board of Directors. The sum of the initial shares purchased and shares acquired through distributions is multiplied by the net asset value per share of the Fund as of the end of the period ("n") to determine ending redeemable value ("ERV"). The ending value divided by the initial investment converted to a percentage equals total return. The formula thus used, as required by the SEC, is: n P(1+T) = ERV The resulting percentage indicates the positive or negative investment results that an investor would have experienced from reinvested dividend and capital gain distributions and changes in share price during the period. This formula reflects the following assumptions: (i) all share sales at net asset value, without a sales load reduction from the $1,000 initial investment; (ii) reinvestment of dividends and distributions at net asset value on the reinvestment date determined by the Board of Directors; and (iii) complete redemption at the end of any period illustrated. Total return may be calculated for one year, five years, ten years, and for other periods, and will typically be updated on a quarterly basis. The average annual compound rate of return over various periods may also be computed by using ending values as determined above. Page 33 In addition, in order to more completely represent the Fund's performance or more accurately compare such performance to other measures of investment return, the Fund also may include in advertisements and stockholder reports other total return performance data based on time-weighted, monthly-linked total returns computed on the percentage change of the month end net asset value of the Fund after allowing for the effect of any cash additions and withdrawals recorded during the month. Returns may be quoted for the same or different periods as those for which average total return is quoted. The Fund's investment results will vary from time to time depending upon market conditions, the composition of the Fund's portfolio, and operating expenses, so that any investment results reported should not be considered representative of what an investment in the Fund may earn in any future period. These factors and possible differences in calculation methods should be considered when comparing the Fund's investment results with those published for other investment companies, other investment vehicles and unmanaged indices. Results also should be considered relative to the risks associated with the Fund's investment objective and policies. The Fund may from time to time compare its investment results with the following: 1. The DAX 100 Index, an unmanaged index which is commonly used as a performance comparison for funds that invest primarily in Germany and which measures the total rate of return of the 100 most highly capitalized stocks traded on the Frankfurt Stock Exchange. 2. The MDAX Index, a total rate of return index of 70 medium sized German companies. 3. The Morgan Stanley Capital International Europe Index which measures the total rate of return of nearly 600 stocks from 15 developed European countries. 4. Data and mutual fund rankings published or prepared by Lipper Analytical Services, Inc. and Morningstar, which rank mutual funds by overall performance, investment objectives, and assets. GENERAL INFORMATION The Company was organized as a closed-end management investment company incorporated under the laws of the State of Maryland on February 2, 1990. On December 4, 1998, the Board of Directors, including the Directors who are not interested persons of the Fund (as defined in the 1940 Act), approved the final plan for the conversion of the Fund to an open-end investment company. At the Company's Annual Meeting on January 26, 1999, the Company's stockholders approved, among other things, (a) changing the Fund's investment strategy from a predominately German investment portfolio to a broader European investment portfolio, (b) changing the Fund's name to Dresdner RCM Europe Fund, (c) changing the Fund from a closed-end investment company to an open-end investment company, (d) modifying and eliminating certain fundamental investment restrictions of the Fund, (e) the Investment Management Agreement between the Fund and the Investment Manager, and (f) the Rule 12b-1 Distribution Plan of the Fund. The Fund converted to an open-end investment company on ____________, 1999. The Board of Directors has authority to issue an unlimited number of shares of separate series and classes. The Fund is currently the only series of the Company. Upon conversion to an open-end fund, the Fund commenced offering two classes of stock: Class N and Class I, as described in the Prospectus. Outstanding shares of the Fund on the date of conversion were automatically redesignated Class N shares. Page 34 DESCRIPTION OF CAPITAL SHARES Stockholders are entitled to one vote for each full share held and fractional votes for fractional shares held. Unless otherwise provided by law or its Articles of Incorporation or Bylaws, each Company generally may take or authorize any extraordinary action upon the favorable vote of the holders of more than 50% of the outstanding shares of the Company or may take or authorize any routine action upon approval of a majority of the votes cast. Rule 18f-2 under the 1940 Act provides that any matter required to be submitted to the holders of the outstanding voting securities of an investment company such as the Company shall not be deemed to have been effectively acted upon unless approved by a majority of the outstanding voting securities, as defined in the 1940 Act, of the series or class of the Company affected by the matter. Under Rule 18f-2, a series or class is presumed to be affected by a matter, unless the interests of each series or class in the matter are identical or the matter does not affect any interest of such series or class. Under Rule 18f-2 the approval of an investment advisory agreement or any change in a fundamental investment policy would be effectively acted upon with respect to the Fund only if approved by a majority of its outstanding voting securities, as defined in the 1940 Act. However, the rule also provides that the ratification of independent public accountants, the approval of principal underwriting contracts and the election of directors may be effectively acted upon by the stockholders of the Company voting without regard to Fund. Each share of each Class of the Fund represents an equal proportional interest in the Fund with each other share of the same Class and is entitled to such dividends and distributions out of the income earned on the assets allocable to the Class as are declared in the discretion of the Board of Directors. In the event of the liquidation or dissolution of either Company, stockholders of the Fund are entitled to receive the assets attributable to the Fund that are available for distribution, and a distribution of any general assets not attributable to a particular Fund that are available for distribution, in such manner and on such general basis as the Board of Directors may determine. Stockholders are not entitled to any preemptive rights. All shares, when issued, will be fully paid and nonassessable by the Company. ADDITIONAL INFORMATION COUNSEL Certain legal matters in connection with the capital shares offered by the Prospectus have been passed upon for the Fund by _____________________. The validity of the capital stock offered by the Fund has been passed upon by ______________. Paul, Hastings, Janofsky & Walker LLP has acted and will continue to act as counsel to the Investment Manager in various matters. INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP, One Post Office Square, Boston, Massachusetts 02109, have been appointed as independent auditors for the Company. Page 35 FINANCIAL STATEMENTS Incorporated by reference herein are the financial statements of the Fund contained in the Fund's Annual Reports to Shareholders for the year ended December 31, 1998, including the Report of Independent Accountants, dated _______________, the Statement of Investments in Securities and Net Assets, the Statement of Assets and Liabilities, the Statement of Operations, the Statement of Changes in Net Assets, and the related Notes to Financial Statements. Copies of the Fund's Annual and Semi-Annual Reports to Shareholders will be available, upon request, by calling (800) 726-7240, or by writing to Four Embarcadero Center, San Francisco, California 94111. REGISTRATION STATEMENT The Fund's Prospectus and this SAI do not contain all of the information set forth in the Company's registration statement and related forms as filed with the SEC, certain portions of which are omitted in accordance with rules and regulations of the SEC. The registration statement and related forms may be inspected at the Public Reference Room of the SEC at Room 1024, 450 5th Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and copies thereof may be obtained from the SEC at prescribed rates. It is also available on the SEC's Internet Web site at http://www.sec.gov. Statements contained in the Prospectus or this SAI as to the contents of any contract or other document referred to herein or in the Prospectus are not necessarily complete, and, in each instance, reference is made to the copy of such contract or other document filed as an exhibit to each Company's registration statement, each such statement being qualified in all respects by such reference. Page 36 PART C OTHER INFORMATION ITEM 23. EXHIBITS. (a) Form of Amended and Restated Articles of Incorporation of Registrant is filed herein as Exhibit 23(a). (b) Form of By-laws of Registrant is filed herein as Exhibit 23(b). (c) (1) Form of certificate for Class N shares of capital stock ($0.001 par value) of Registrant is filed herein as Exhibit 23(c)(1). (2) Form of certificate for Class I shares of capital stock ($0.001 par value) of Registrant is filed herein as Exhibit 23(c)2. (d) Form of Investment Management Agreement between Dresdner RCM Global Investors LLC and Registrant on behalf of the Dresdner RCM Europe Fund is filed herein as Exhibit 23(d). (e) Form of Distribution Agreement between Registrant and Funds Distributor Inc. is filed herein as Exhibit 23(e). (f) None (g) To be filed. (h) (1) Form of Service Agreement among Dresdner RCM Global Investors LLC, Registrant, and Funds Distributor Inc. is filed herein as Exhibit 23(h)(1). (2) Form of Transfer Agency Agreement between Registrant and State Street Bank and Trust Company is filed herein as Exhibit 23(h)(2). (i) To be filed. (j) Power of Attorney dated February 12, 1999 is filed herein as Exhibit 23(j). (k) To be filed. (l) Not applicable. (m) Rule 12b-1 Plan to be filed by subsequent amendment. (n) To be filed. (o) Multiple Class of Shares Plan to be filed by subsequent amendment. ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND None ITEM 25. INDEMNIFICATION Section 2-418 of the General Corporation Law of Maryland empowers a corporation to indemnify directors and officers of the corporation under various circumstances as provided in such statute. A director or officer who has been successful on the merits or otherwise, in the defense of any proceeding, must be indemnified against reasonable expenses incurred by such person in connection with the proceeding. Reasonable expenses may be paid or reimbursed by the corporation in advance of the final disposition of the proceeding, after a determination that the facts then known to those making the determination would not preclude indemnification under the statute, and following receipt by the corporation of a written affirmation by the person that his or her standard of conduct necessary for indemnification has been met and upon delivery of a written undertaking by or on behalf of the person to repay the amount advanced if it is ultimately determined that the standard of conduct has not been met. Article VI of the Bylaws of Registrant contains indemnification provisions conforming to the above statute and to the provisions of Section 17 of the Investment Company Act of 1940, as amended. The Registrant and the directors and officers of Registrant obtained coverage under an Errors and Omissions insurance policy. The terms and conditions of the policy coverage conforms generally to the standard coverage available throughout the investment company industry. The coverage also applies to Registrant's investment manager and its members and employees. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Registrant pursuant to the provisions of Maryland law and Registrant's Articles of Incorporation and Bylaws, or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in said Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred or paid by a director, officer or controlling person of Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER Registrant's investment manager, Dresdner RCM Global Investors LLC, is a Delaware limited liability company, whose two members are Dresdner Bank AG ("Dresdner") and Dresdner Kleinwort Benson North America, Inc. ("Dresdner Kleinwort Benson"). Dresdner is an international banking organization whose principal executive offices are located at Gallunsanlage 7, 60041 Frankfurt am Main, Frankfurt, Germany. Dresdner Kleinwort Benson is a wholly owned subsidiary of Dresdner whose principal executive offices are located at 75 Wall Street, New York, New York 10005. The individuals who sit on the Board of Managers of Dresdner RCM have held the following director or officer positions within the past two fiscal years: NAME OF THE OFFICER OR BUSINESS AFFILIATIONS ADDRESS MEMBER OF THE BOARD OF MANAGERS Gerhard Eberstadt Dresdner Bank AG Jurgen-Ponto-Platz 1 (May 1998 - present) D-60301 Frankfurt am Main Germany Chairman, Dresdner 75 Wall Street Kleinwort Benson North New York, NY 10005 America, Inc. (September 1996 - present); Director, KBIMA (December 75 Wall Street 1997 - present) New York, NY 10005 George N. Fugelsang President, Chief Executive 75 Wall Street Officer, Chairman, Dresdner New York NY 10005 Kleinwort Benson North America LLC (February 1994 - present) Director, Dresdner 75 Wall Street Kleinwort Benson North New York, NY 10005 America Services LLC (September 1996 - present); Director, KBIMA (December 1997 - present Director, KBIMA (December 75 Wall Street 1997 - present New York, NY 10005 NAME OF THE OFFICER OR BUSINESS AFFILIATIONS ADDRESS MEMBER OF THE BOARD OF MANAGERS Susan C. Gause Dresdner RCM (July 1994 - Four Embarcadero Center Present) San Francisco, CA 94111 Chief Operating Officer, Four Embarcadero Center Senior Managing Director, San Francisco, CA 94111 and Member of the Board of Managers (July 1998- present) Luke D. Knecht Managing Director (July Four Embarcadero Center 1998-present), Member of San Francisco, CA the Board of Managers, 94111 Dresdner RCM (November 1997 - present) Joachim Madler Director, Dresdner Bank AG Mainzer LanstraB 15-17 (September 1997 - present) 60301 Frankfurt Germany Director, KBIMA (December 75 Wall Street 1997 - present); New York, NY 10005 Director, Dresdner (South Singapore East Asia) (October 1997 - Present) Managing Director, Dresdner FarberstraBe 6, Bank (Schweiz) AG Zurich, Switzerland (November 1997 - present); Chairman, DFV Deutsche Mainzer LanstraBe 11-13 Fonds und Vorsorgeberatungs 60301 Frankfurt (July 1996 - June 1997) Germany Deutscher Investment-Trust Mainzer LanstraBe 11-13 (June 1996 - June 1997) 60301 Frankfurt Germany Managing Director, GKS Windmuhlweg 12 Gesellschaft fur 95030 Hof Kontenservice GmbH (June Germany 1994 - June 1997) NAME OF THE OFFICER OR BUSINESS AFFILIATIONS ADDRESS MEMBER OF THE BOARD OF MANAGERS William L. Price Chief Executive Officer and Four Embarcadero Center Global Chief Investment San Francisco, CA 94111 Officer, Dresdner RCM (July 1998 - present) Chairman and Member of the Four Embarcadero Center Board of Managers, Senior San Francisco, CA 94111 Managing Director, Dresdner RCM (December 1997 - present) Director, KBIMA (December 75 Wall Street 1997- present) New York, NY 10005 Director, Dresdner RCM (UK) 10 Fenchurch Street (January 1998 - present) London, UK EC3M3LB Jeffrey S. Rudsten Senior Managing Director Four Embarcadero Center (July 1998 - present); San Francisco, CA 94111 Member of the Board of Managers, Dresdner RCM (June 1978 - present) Director, KBIMA (December 75 Wall Street 1997- present) New York, NY 10005 William S. Stack Senior Managing Director, Four Embarcadero Center Global Equity Chief San Francisco, CA 94111 Investment Officer (July 1998 - present); Member of the Board of Managers, Dresdner RCM (August 1994 - present) Director, KBIMA (December 75 Wall Street 1997- present) New York, NY 10005 Director, Dresdner RCM (UK) 10 Fenchurch Street (January 1998 - present) London, UK EC3M3LB Kenneth B. Weeman, Jr. Dresdner RCM (October 1979 Four Embarcadero Center - present) San Francisco, CA 94111 NAME OF THE OFFICER OR BUSINESS AFFILIATIONS ADDRESS MEMBER OF THE BOARD OF MANAGERS Vice Chairman, Senior Four Embarcadero Center Managing Director (July San Francisco, CA 94111 1998 - present) Director, KBIMA (December 75 Wall Street 1997- present); New York, NY 10005 Director, Dresdner RCM (UK) 10 Fenchurch Street (January 1998 - present) London, UK EC3M3LB ITEM 27. PRINCIPAL UNDERWRITERS (a) Funds Distributor, Inc. ("FDI"), whose principal offices are located at 60 State Street, Suite 1300, Boston Massachusetts 02109, is the principal underwriter of Registrant. FDI is an indirect, wholly owned subsidiary of Boston Institutional Group, Inc., a holding company, all of whose outstanding shares are owned by key employees. FDI is a broker-dealer registered under the Securities Exchange Act of 1934, as amended, and is a member of the National Association of Securities Dealers, Inc. FDI also serves as principal underwriter of the following investment companies: American Century California Tax-Free and Municipal Funds American Century Capital Portfolios, Inc. American Century Government Income Trust American Century International Bond Funds American Century Investment Trust American Century Municipal Trust American Century Mutual Funds, Inc. American Century Premium Reserves, Inc. American Century Quantitative Equity Funds American Century Strategic Asset Allocations, Inc. American Century Target Maturities Trust American Century Variable Portfolios, Inc. American Century World Mutual Funds, Inc. The Brinson Funds Dresdner RCM Capital Funds, Inc. Dresdner RCM Global Funds, Inc. Founders Funds, Inc. Harris Insight Funds Trust HT Insight Funds, Inc. d/b/a Harris Insight Funds J.P. Morgan Institutional Funds J.P. Morgan Funds JPM Series Trust JPM Series Trust II LaSalle Partners Funds, Inc. Kobrick-Cedant Investment Trust Merrimac Series Monetta Fund, Inc. Monetta Trust The Montgomery Funds I The Montgomery Funds II The Munder Framlington Funds Trust The Munder Funds Trust The Munder Funds, Inc. National Investors Cash Management Fund, Inc. Orbitex Group of Funds SG Cowen Funds, Inc. SG Cowen Income + Growth Fund, Inc. SG Cowen Standby Reserve Fund, Inc. SG Cowen Standby Tax-Exempt Reserve Fund, Inc. SG Cowen Series Funds, Inc. St. Clair Funds, Inc. The Skyline Funds Waterhouse Investors Family of Funds, Inc. WEBS Index Fund, Inc. FDI does not act as a depositor or investment adviser of any investment company. (b) The directors and executive officers of FDI are set forth below: NAME AND PRINCIPAL POSITIONS AND OFFICES WITH POSITIONS AND OFFICES BUSINESS ADDRESS FUNDS DISTRIBUTOR, INC. WITH REGISTRANT - -------------------------------------------------------------------------------- Marie E. Connolly Director, President and None Chief Executive Officer George A. Rio Executive Vice President None Donald R. Roberson Executive Vice President None William S. Nichols Executive Vice President None Michael S. Petrucelli Senior Vice President None Margaret W. Chambers Senior Vice President, None General Counsel and Chief Compliance Officer Joseph F. Tower III Director, Senior Vice None President, Treasurer and Chief Financial Officer Paula R. David Senior Vice President None Judith K. Benson Senior Vice President None Gary S. MacDonald Senior Vice President None Bernard A. Whalen Senior Vice President None William J. Nutt Chairman and Director None (c) Not Applicable. ITEM 28. LOCATION OF ACCOUNTS AND RECORDS Accounts, books and other records required by Rules 31a-1 and 31a-2 under the Investment Company Act of 1940, as amended, are maintained and held in the offices of Registrant's investment manager, Dresdner RCM Global Investors LLC, Four Embarcadero Center, San Francisco, California 94111; and/or Registrant's distributor, Funds Distributor, Inc., 60 State Street, Suite 1300, Boston, Massachusetts 02109. Records covering portfolio transactions are also maintained and kept by Registrant's custodian and transfer agent, State Street Bank and Trust Company, U.S. Mutual Funds Services Division, P.O. Box 1713, Boston, Massachusetts 02105. ITEM 29. MANAGEMENT SERVICES None ITEM 30. UNDERTAKINGS. The Registrant hereby undertakes to furnish each person to whom a Prospectus for one or more of the series of the Registrant is delivered with a copy of the relevant latest annual report to shareholders, upon request and without charge. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in San Francisco, California on February 18, 1999. DRESDNER RCM INVESTMENT FUNDS INC. By: /s/William S. Stack, President -------------------- By: /s/Caroline M. Hirst, Treasurer, -------------------- Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the date indicated. SIGNATURE TITLE DATE (1) Principal Executive Officer President February 18, 1999 /s/William S. Stack ------------------- William S. Stack (2) Chief Financial and Accounting Officer Treasurer February 18, 1999 /s/Caroline M. Hirst -------------------- Caroline M. Hirst SIGNATURE TITLE DATE (3) Directors /s/Rolf Passow* February 18, 1999 ------------------------------ Rolf Passow /s/Theodore J. Coburn* February 18, 1999 ------------------------------ Theodore J. Coburn /s/Robert J. Birnbaum * February 18, 1999 ------------------------------ Robert J. Birnbaum /s/Carroll Brown* February 18, 1999 ------------------------------ Carroll Brown /s/James E. Dowd* February 18, 1999 ------------------------------ James E. Dowd /s/Siegfried Kessler* February 18, 1999 ------------------------------ Siegfried Kessler /s/Gottfried W. Perbix* February 18, 1999 ------------------------------ Gottfried W. Perbix /s/Jacob Saliba* February 18, 1999 ------------------------------ Jacob Saliba /s/ Alfred W. Fiore* February 18, 1999 ------------------------------ Alfred W. Fiore /s/George N. Fugelsang* February 18, 1999 ------------------------------ George N. Fugelsang By: /s/Robert J. Goldstein February 18, 1999 ------------------------- Robert J. Goldstein as Attorney-in-Fact *Signed by Robert J. Goldstein pursuant to a power of attorney dated February 12, 1999. EXHIBIT INDEX
FORM N1-A EDGAR EXHIBIT NO. EXHIBIT NO. 23(a) Form of Amended and Restated Articles of Incorporation Ex.99.23(a) of Dresdner RCM Investment Funds Inc. 23(b) Form of By-laws of Dresdner RCM Investment Funds Inc. Ex.99.23(b) 23(c)(1) Form of certificate for Class N shares of capital stock Ex.99.23(c)(1) 23(c)(2) Form of certificate for Class I shares of capital stock Ex.99.23(c)(2) 23(d) Form of Investment Management Agreement Ex.99.23(d) 23(e) Form of Distribution Agreement Ex.99.23(e) 23(h)(1) Form of Service Agreement Ex.99.23(h)(1) 23(h)(2) Form of Transfer Agency Agreement Ex.99.23(h)(2) 23(j) Power of Attorney Ex.99.23(j)
EX-99.23(A) 2 EXHIBIT 99.23(A) EXHIBIT 99.23(a) FORM OF AMENDED AND RESTATED ARTICLES OF INCORPORATION ARTICLE I NAME (1) The name of the Corporation is Dresdner RCM Investment Funds Inc. (2) The Board of the Directors reserves the right to change its corporate name or any series or class name thereunder by a majority vote without action by stockholders in accordance with Section 2-605 of the General Corporation Law of the State of Maryland. ARTICLE II PURPOSES AND POWERS The purposes for which the Corporation is formed are to act as an open-end investment company under the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder (the "1940 Act"), and to exercise and enjoy all of the general powers, rights, and privileges granted to, or conferred upon, corporations by the Maryland General Corporation Law (the "Maryland Law") now or hereafter in force. ARTICLE III PRINCIPAL OFFICE AND RESIDENT AGENT The post office address of the principal office of the Corporation in the State of Maryland is c/o The Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland 21202. The name and address of the resident agent of the Corporation in the State of Maryland are The Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland 21202. Such resident agent is a Maryland corporation. ARTICLE IV CAPITAL STOCK (1)(a) As increased from 100,000,000 with a par value of $.001 per share, the total number of shares of all classes of capital stock which the Corporation shall have the authority to issue is 1,000,000,000 shares of capital stock, of the par value of $.001 per share. There shall initially be one series of shares, designated as the "Dresdner RCM Europe Fund" consisting initially of 200,000,000 shares (such series and any further series of shares from time-to-time created by the Board of Directors being referred to individually herein as a "series") and 800,000,000 unclassified shares of capital stock. The Board of Directors of the Corporation is hereby empowered to increase or decrease, from time-to-time, the total number of shares of capital stock or the number of shares of capital stock of any series that the Corporation shall have authority to issue without any action by the stockholders but to not less than the number of shares of capital stock or of such series, as the case may be, then outstanding. A-1 (b) The aggregate par value of all shares having a par value is $100,000 before the increase and $1,000,000 as increased. (2) The Corporation may issue fractional shares, which shall carry proportionally all the rights of a whole share, excepting any right to receive a certificate evidencing such fractional shares, but including the right to vote and the right to receive dividends. (3) All persons who shall acquire capital stock in the Corporation shall acquire the same subject to the provisions of these Amended and Restated Articles of Incorporation and the By-Laws of the Corporation (the "By-Laws"). (4) As used in these Amended and Restated Articles of Incorporation, a "series" of shares represent interests in the same assets, liabilities, income, earnings, and profits of the Corporation. The Board of Directors shall have authority to classify and reclassify any authorized but unissued shares of capital stock from time-to-time by setting or changing in any one or more respects the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption of the capital stock. Subject to the provisions of ARTICLE IV and applicable law, the power of the Board of Directors to classify or reclassify any of the shares of capital stock shall include, without limitation, authority to classify or reclassify any such stock into one or more series of capital stock, by determining, fixing, or altering one or more of the following: (a) The distinctive designation of such series and the number of shares to constitute such series; provided that, unless otherwise prohibited by the terms of such series, the number of shares of any series may be decreased by the Board of Directors in connection with any classification or reclassification of unissued shares and the number of shares of such series may be increased by the Board of Directors in connection with any such classification or reclassification, and any such shares of any series which have been redeemed, purchased, or otherwise acquired by the Corporation shall remain part of the authorized capital stock and be subject to classification and reclassification as provided herein; (b) Whether or not and, if so, the rates, amounts, and times at which, and the conditions under which, dividends shall be payable on shares of such series; (c) Whether or not shares of such series shall have voting rights in addition to any general voting rights provided by law and these Amended and Restated Articles of Incorporation of the Corporation and, if so, the terms of such additional voting rights; and (d) The rights of holders of shares of such series (including any classes thereof) upon the liquidation, dissolution, or winding up of the affairs of, or upon distribution of the assets of, the Corporation. (5) Shares of capital stock of the Corporation shall have the following preferences, and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption. (a) ASSETS BELONGING TO A SERIES. All consideration received by the Corporation for the issue or sale of stock of any series of capital stock, together with all assets in which such A-2 consideration is invested and reinvested, income, earnings, profits and proceeds thereof, including any proceeds derived from the sale, exchange, or liquidation thereof, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall irrevocably belong to the series of shares of capital stock with respect to which assets, payments, or funds were received by the Corporation for all purposes, subject only to the rights of creditors, and shall be handled upon the books of account of the Corporation. Such consideration, assets, income, earnings, profits, and proceeds thereof, and any assets derived from the sale, exchange, or liquidation thereof, and any assets derived from any reinvestment of such proceeds in whatever form, are herein referred to as "assets belonging to" such series. Any assets, income, earnings, profits, and proceeds thereof, and any funds or payments which are not readily attributable to any particular series shall be allocable among any one or more of the series in such a manner and on such a basis as the Board of Directors, in its sole discretion, shall deem fair and equitable. (b) LIABILITIES BELONGING TO A SERIES. The assets belonging to any series of capital stock shall be charged with the liabilities in respect of such series and shall also be charged with such series' share of the general liabilities of the Corporation determined as hereinafter provided. The determination of the Board of Directors shall be conclusive as to the amount of such liabilities, including the amount of accrued expenses and reserves; as to any allocation of the same to a given series; and as to whether the same are allocable to one or more series. The liabilities so allocated to a series are herein referred to as "liabilities belonging to" such series. Any liabilities which are not readily attributable to any particular series shall be allocable among any one or more of the series in such manner and on such basis as the Board of Directors, in its sole discretion, shall deem fair and equitable. (c) DIVIDENDS AND DISTRIBUTIONS. Shares of each series of capital stock shall be entitled to such dividends and distributions, in stock or in cash or both, as may be declared from time-to-time by the Board of Directors, acting in its sole discretion, with respect to such series, provided, however, that dividends and distributions on shares of a series of capital stock shall be paid only out of the lawfully available "assets belonging to" such series as such phrase is defined in ARTICLE IV (5). (d) LIQUIDATING DIVIDENDS AND DISTRIBUTIONS. In the event of the liquidation or dissolution of the Corporation, stockholders of each series of capital stock shall be entitled to receive, as a series, out of the assets of the Corporation available for distribution to stockholders, but other than general assets not belonging to any particular series of capital stock, the assets belonging to such series; and the assets so distributable to the stockholders of any series of capital stock shall be distributed among such stockholders in proportion to the number of shares of such series held by them and recorded on the books of the Corporation. In the event that there are any general assets not belonging to any particular series of capital stock and available for distribution, such distribution shall be made to the holders of stock of all series of capital stock in proportion to the asset value of the respective series of capital stock determined as hereinafter provided. (e) CLASSES OF SHARES. There shall initially be two classes of the "Dresdner RCM Europe Fund" series, Class N and Class I. Of the 200,000,000 shares designated as "Dresdner RCM Europe Fund" shares, 100,000,000 shall be designated Class N shares thereof and 100,000,000 shall be designated Class I shares thereof. All shares of the Corporation that are A-3 outstanding when the Corporation converts from a closed-end to an open-end investment company will be automatically designated Class N shares of "Dresdner RCM Europe Fund." A class of shares may be invested with one or more other classes in a common investment portfolio comprising a series. Notwithstanding the other provisions of ARTICLE IV (5), if two or more classes are invested in a common investment portfolio as a series, the shares of each such class of capital stock of the Corporation shall be subject to the following preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption, and if there are other classes of capital stock invested together in a different series, shall also be subject to the provisions of this ARTICLE IV (5) at the series level as if the classes comprising the series were one class. (i) The income and expenses of the series shall be allocated among the classes comprising the series in accordance with the relative net asset value of each such class or as otherwise determined by the Board of Directors in accordance with the law and the Corporation's current registration statement as filed with the Securities and Exchange Commission (the "Registration Statement"). The allocation of investment income, capital gains, expenses, and liabilities of the Corporation or any series, among the series and any classes thereof shall be determined by the Board of Directors in a manner that is consistent with applicable law and the Registration Statement. (ii) As more fully set forth in this ARTICLE IV (5), the liabilities and expenses of the classes comprising the series shall be determined separately from those of each other and, accordingly, the net asset value, the dividends and distributions payable to holders, and the amounts distributable in the event of the liquidation of the Corporation or a series to holders of shares of the Corporation's capital stock may vary from class to class within a series. Except for these differences and certain other differences set forth in this ARTICLE IV (5) or elsewhere in the Amended and Restated Articles of Incorporation, the classes comprising a series shall have the same preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption. (iii) The dividends and distributions of investment income and capital gains with respect to the classes comprising a series shall be in such amounts as may be declared from time-to-time by the Board of Directors, and such dividends and distributions may vary among the classes comprising the series to reflect differing allocations of the expenses of the Corporation among the classes and any resultant differences among the net asset values per share of the classes, to such extent and for such purposes as the Board of Directors may deem appropriate. (iv) At such times (which may vary within a class) as may be determined by the Board of Directors (or with the authorization of the Board of Directors, by the officers of the Corporation) in accordance with the 1940 Act and applicable rules and regulations of the National Association of Securities Dealers, Inc. ("NASD") and the Registration Statement, shares of a particular class of capital stock of the Corporation may be automatically converted into shares of another class of capital stock of the Corporation based on the relative net asset values of such classes at the time of conversion, subject, however, to any conditions of conversion that may be imposed by the Board of Directors (or with the authorization of the Board of Directors, by the officers of the Corporation) and the Registration Statement. A-4 (f) VOTING. Each stockholder of each series of capital stock then standing in his or her name on the books of the Corporation, and on any matter submitted to a vote of stockholders, all shares of capital stock then issued and outstanding and entitled to vote shall be voted in the aggregate and not by series except that: (i) when expressly required by law, shares of capital stock shall be voted by individual series and (ii) only shares of capital stock of the respective series affected by a matter shall be entitled to vote on such matter. At all meetings of stockholders, the holders of one-third of the shares of capital stock of the Corporation entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for the transaction of any business, except as otherwise provided by statute or by these Amended and Restated Articles of Incorporation. In the absence of a quorum no business may be transacted, except that the holders of a majority of the shares of capital stock present in person or by proxy and entitled to vote may adjourn the meeting from time-to-time, without notice other than announcement at the meeting except as otherwise required by these Amended and Restated Articles of Incorporation or the By-Laws, until the holders of the requisite amount of shares of capital stock shall be present. At any such adjourned meeting at which a quorum may be present any business may be transacted which might have been transacted at the meeting originally called. The absence from any meeting, in person or by proxy, of holders of the quorum which may be required by the laws of the State of Maryland, the 1940 Act, or other applicable statute, these Amended and Restated Articles of Incorporation, or the By-Laws, for action upon any given matter shall not prevent action at such meeting upon any other matter or matters which may properly come before the meeting, if there shall be present at the meeting, in person or by proxy, holders of the number of shares of capital stock of the Corporation required for action in respect of such other matter or matters. (g) REDEMPTION. To the extent the Corporation has funds or other property legally available therefor, each holder of shares of capital stock of the Corporation shall be entitled to require the Corporation to redeem all or any part of the shares standing in the name of such holder on the books of the Corporation, at the redemption price of such shares as in effect from time-to-time as may be determined by the Board of Directors of the Corporation in accordance with the provisions hereof, subject to the right of the Board of Directors of the Corporation to suspend the right of redemption of shares of capital stock or postpone the date of payment of such redemption price in accordance with provisions of applicable law. The Corporation may at any time purchase or redeem shares of capital stock of the Corporation in the open market or at private sale, or otherwise, out of funds legally available therefor, at a price not exceeding the net asset value thereof determined in accordance with the 1940 Act and the Corporation's current Registration Statement. Without limiting the generality of the foregoing, the Corporation shall, to the extent permitted by applicable law, have the right at any time to redeem the shares owned by any holder of capital stock of the Corporation if the value of such shares in the account of such holder is less than the minimum initial investment amount applicable to that account as set forth in the Corporation's current Registration Statement, and subject to such further terms and conditions as the Board of Directors of the Corporation may from time-to-time adopt. The price of any shares of capital stock redeemed by the Corporation shall, except as otherwise provided in ARTICLE IV (5)(e), be the net asset value thereof as determined by, or pursuant to methods approved by, the Board of Directors of the Corporation from time-to-time in accordance with the provisions of applicable law, less such redemption fee or other charge, if any, as may be specified in the Corporation's current Registration Statement for that series. Payment of the redemption price shall be made in cash by the Corporation unless, in the opinion of the Board of Directors, which shall be conclusive, conditions exist which make payment wholly in cash unwise or undesirable; in such event the Corporation may make payment wholly or partly by securities or A-5 other property included in the assets belonging or allocable to the series of the shares redemption of which is being sought, the value of which shall be determined as provided herein. (h) OTHER SALES CHARGES. The proceeds of the redemption of the shares of any class of capital stock of the Corporation may be reduced by the amount of any contingent deferred sales charge or other charge (which charges may vary within and among the classes) payable on such redemption pursuant to the terms of issuance of such shares, all in accordance with the 1940 Act, and applicable rules and regulations of the NASD. ARTICLE V BOARD OF DIRECTORS The number of Directors of the Corporation shall be fixed from time-to-time by the By-Laws of the Corporation, but shall not be less than three (3). The Board of Directors can vote to increase or decrease the number of Directors within the limit set by the By-Laws. The number constituting the Board of Directors is eight (8), and the names of the persons who are to serve as Directors are: Robert J. Birnbaum Carroll Brown Theodore J. Coburn James E. Dowd Alfred W. Fiore Siegfried A. Kessler Gottfried W. Perbix Jacob Saliba ARTICLE VI MANAGEMENT OF THE AFFAIRS OF THE CORPORATION (1) POWERS OF THE CORPORATION. All corporate powers and authority of the Corporation (except as at the time otherwise provided by statute or applicable rules and regulations of any governmental or quasi-governmental agency or instrumentality, by these Amended and Restated Articles of Incorporation or by the By-Laws) shall be vested in and exercised by the Board of Directors. (2) ISSUANCE OF STOCK. The Board of Directors may from time-to-time authorize the issuance of and may issue and sell or cause to be issued and sold shares of the Corporation's capital stock of any series or class, whether now or hereafter authorized, including any shares redeemed or repurchased by the Corporation, and securities convertible into shares of the Corporation's capital stock, whether now or hereafter authorized, for such consideration as may be deemed advisable by the Board of Directors and without any action by the stockholders. (3) COMPENSATION OF DIRECTORS. The Board of Directors shall have power from time-to-time to authorize payment of compensation to the Directors for services to the Corporation, including fees for attendance at meetings of the Board of Directors and of committees. A-6 (4) INSPECTION OF CORPORATION'S BOOKS. The Board of Directors shall have power from time-to-time to determine whether and to what extent, and at what times and places and under what conditions and regulations, the accounts and books of the Corporation (other than the stock ledger) or any of them shall be open to the inspection of stockholders; and no stockholder shall have the right of inspecting any account, book, or document of the Corporation except as at the time conferred by statute, unless authorized by a resolution of the stockholders or the Board of Directors. (5) CONTRACTS OF THE CORPORATION AFFECTING THE FINANCIAL INTEREST OF DIRECTOR(S). A contract or other transaction between the Corporation and any of its Directors or between the Corporation and any other corporation, firm, or other entity in which any of its Directors is a Director or has a material financial interest is not void or voidable solely because of any one or more of the following: the common Directorship or interest; the presence of the Director at the meeting of the Board of Directors which authorizes, approves, or ratifies the contract or transaction; or the counting of the vote of a Director for the authorization or ratification of the contract or transaction. This ARTICLE VI (5) applies if: (a) the fact of common Directorship of interest is disclosed or known to: (i) the Board of Directors and the Board authorizes, approves, or ratifies the contract or transaction by the affirmative vote of a majority of disinterested directors, even if the disinterested directors constitute less than a quorum; or (ii) the stockholders entitled to vote, and the contract or transaction is authorized, approved, or ratified by a majority of the votes cast by the stockholders entitled to vote other than the votes of shares owned of record or beneficially by the interested director or corporation, firm, or other entity; or (b) the contract or transaction is fair and reasonable to the Corporation. Common or interested Directors or the stock owned by them or by an interested corporation, firm, or other entity may be counted in determining the presence of a quorum at a meeting of the Board of Directors or at a meeting of the stockholders, as the case may be, at which the contract or transaction is authorized, approved, or ratified. If a contract or transaction is not authorized, approved, or ratified in one of the ways provided for in clause (a) of the second sentence of this ARTICLE VI (5), the person asserting the validity of the contract or transaction shall bear the burden of proving that the contract or transaction was fair and reasonable to the Corporation at the time it was authorized, approved, or ratified. This ARTICLE VI (5) does not apply to the fixing by the Board of Directors of reasonable compensation for a Director, whether as a Director or in any other capacity. (6) RATIFICATION BY STOCKHOLDERS. Except as provided in Article VI (5), any contract, transaction, or act of the Corporation or of the Board of Directors which shall be ratified by a majority of a quorum of the stockholders having voting power at any annual meeting, or at any special meeting called for such purpose, shall so far as permitted by law be as valid and as binding as though ratified by every stockholder of the Corporation. (7) REMOVAL OF OFFICERS. Unless the By-Laws of the Corporation otherwise provide, any officer or employee of the Corporation (other than a Director) may be removed at any time with or without cause by the Board of Directors or by any committee or superior officer upon whom such power of removal may be conferred by the By-Laws or by authority of the Board of Directors. A-7 (8) INDEMNIFICATION OF OFFICERS AND DIRECTORS. To the maximum extent permitted by Maryland Law, as from time-to-time amended, the Corporation: (a) shall indemnify and advance expenses to each of its currently acting and its former Directors against any and all liabilities and expenses incurred in connection with their services in such capacities; (b) shall indemnify and advance expenses to its currently acting and its former officers to the full extent that indemnification shall be provided to Directors; and (c) may indemnify and advance expenses to its employees and agents, to the extent determined by the Board of Directors; in each case, subject to any limitations imposed by the 1940 Act. The foregoing rights of indemnification shall not be exclusive of any other rights to indemnification to which those seeking indemnification may be entitled. Subject to the same limitations imposed by the 1940 Act, the Corporation may, by By-Laws, resolution, or agreement, make further provision for indemnification of Directors, officers, employees, and agents. Furthermore, to the fullest extent permitted by Maryland law, as it may be amended or interpreted from time-to-time, subject to any limitations imposed by the 1940 Act, no Director or officer in the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages. No amendment of these Restated and Amended Articles of Incorporation or repeal of its provisions shall limit or eliminate any of the benefits provided to any person who at any time is or was a Director or officer of the Corporation under this Section in respect of any act or omission that occurred prior to such amendment or repeal. ARTICLE VII DURATION The duration of the Corporation shall be perpetual. ARTICLE VIII MAJORITY VOTE Notwithstanding any provision of the laws of the State of Maryland requiring a greater proportion than a majority of the votes of all classes or of any class of stock entitled to be cast, to take or authorize any action, the Corporation may, subject to other applicable provisions of law, these Amended and Restated Articles of Incorporation and the By-Laws, take or authorize such action upon the concurrence of a majority of the aggregate number of the votes entitled to be cast thereon; provided, that this provision shall not affect any requirement of the 1940 Act or the Rules and Regulations of the Securities and Exchange Commission thereunder, for any vote to be taken by the concurrence of a greater proportion of the votes entitled to be cast or for any matter to be authorized by the separate vote of a particular class or series of shares. ARTICLE IX PRE-EMPTIVE RIGHTS No holder of the capital stock of the Corporation or of any other class of stock or securities of the Corporation, whether now or hereafter authorized, shall be entitled as such, as a matter of pre-emptive right, to subscribe for or purchase any part of any new or additional issue of stock of any class, or of rights or options to purchase any stock, or of securities convertible into, or carrying rights or options to purchase, stock of any class, whether now of hereafter authorized or whether issued for money, for a consideration other than money, or by way of a dividend or otherwise, and all such rights are hereby waived by each holder of capital stock and of any other class of stock or securities of the Corporation, whether now or hereafter authorized. A-8 ARTICLE X RESERVATION OF RIGHT TO AMEND The Corporation reserves the right from time-to-time to make any amendment of its charter, now or hereafter authorized by law, including any amendment which alters the terms or contract rights, as expressly set forth in its charter, of any outstanding stock by classification, reclassification, or otherwise, and all rights herein conferred upon stockholders are granted subject to such reservation. A-9 EX-99.23(B) 3 EXHIBIT 99.23(B) EXHIBIT 99.23(b) FORM OF BY-LAWS OF DRESDNER RCM INVESTMENT FUNDS INC. FORM OF BY-LAWS OF DRESDNER RCM INVESTMENT FUNDS INC. TABLE OF CONTENTS
Page ---- ARTICLE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Section 1. PRINCIPAL OFFICE . . . . . . . . . . . . . . . . . . . .1 Section 2. OTHER OFFICES. . . . . . . . . . . . . . . . . . . . . .1 ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Meetings of Stockholders. . . . . . . . . . . . . . . . . . . . . . . . .1 Section 1. ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . .1 Section 2. SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . .1 Section 3. PLACE OF MEETING . . . . . . . . . . . . . . . . . . . .2 Section 4. NOTICE OF MEETINGS: WAIVER OF NOTICE . . . . . . . . . .2 Section 5. QUORUM . . . . . . . . . . . . . . . . . . . . . . . . .2 Section 6. ORGANIZATION . . . . . . . . . . . . . . . . . . . . . .2 Section 7. ORDER OF BUSINESS. . . . . . . . . . . . . . . . . . . .2 Section 8. FIXING OF RECORD DATE. . . . . . . . . . . . . . . . . .3 Section 9. VOTING . . . . . . . . . . . . . . . . . . . . . . . . .3 Section 10. PROXIES. . . . . . . . . . . . . . . . . . . . . . . . .3 Section 11. VOTING BY BALLOT . . . . . . . . . . . . . . . . . . . .4 Section 12. VOTING OF SHARES BY CERTAIN HOLDERS. . . . . . . . . . .4 Section 13. INSPECTORS . . . . . . . . . . . . . . . . . . . . . . .4 Section 14. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING . . . . . . .5 ARTICLE III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Section 1. GENERAL POWERS . . . . . . . . . . . . . . . . . . . . .5 Section 2. NUMBER OF DIRECTORS. . . . . . . . . . . . . . . . . . .5 Section 3. TERM OF DIRECTORS. . . . . . . . . . . . . . . . . . . .5 Section 4. RESIGNATIONS . . . . . . . . . . . . . . . . . . . . . .5 Section 5. VACANCIES. . . . . . . . . . . . . . . . . . . . . . . .5 Section 6. PLACE OF MEETINGS. . . . . . . . . . . . . . . . . . . .6 Section 7. REGULAR MEETINGS . . . . . . . . . . . . . . . . . . . .6 Section 8. SPECIAL MEETINGS . . . . . . . . . . . . . . . . . . . .6 Section 9. TELEPHONE MEETINGS . . . . . . . . . . . . . . . . . . .6 Section 10. NOTICE OF MEETINGS . . . . . . . . . . . . . . . . . . .6 Section 11. WAIVER OF NOTICE OF MEETINGS . . . . . . . . . . . . . .6 Section 12. QUORUM AND VOTING. . . . . . . . . . . . . . . . . . . .7 Section 13. ORGANIZATION . . . . . . . . . . . . . . . . . . . . . .7 Section 14. WRITTEN CONSENT OF DIRECTORS IN LIEU OF A MEETING. . . .7 Section 15. COMPENSATION . . . . . . . . . . . . . . . . . . . . . .7 Section 16. NET ASSET VALUE. . . . . . . . . . . . . . . . . . . . .7 ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Committees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Section 1. COMMITTEES OF THE BOARD OF DIRECTORS . . . . . . . . . .8 Section 2. MEETINGS; QUORUM . . . . . . . . . . . . . . . . . . . .8 ARTICLE V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Officers, Agents, and Employees . . . . . . . . . . . . . . . . . . . . .8 Section 1. ELECTION OR APPOINTMENT OF OFFICERS. . . . . . . . . . .8 Section 2. EFFECT OF ELECTION OR APPOINTMENT OF OFFICERS, AGENTS, AND EMPLOYEES . . . . . . . . . . . . . . . .9 Section 3. RESIGNATIONS . . . . . . . . . . . . . . . . . . . . . .9 Section 4. REMOVAL OF OFFICER, AGENT, OR EMPLOYEE . . . . . . . . .9 Section 5. VACANCIES. . . . . . . . . . . . . . . . . . . . . . . .9 Section 6. COMPENSATION . . . . . . . . . . . . . . . . . . . . . .9 Section 7. BONDS OR OTHER SECURITY. . . . . . . . . . . . . . . . 10 Section 8. PRESIDENT. . . . . . . . . . . . . . . . . . . . . . . 10 Section 9. VICE PRESIDENT . . . . . . . . . . . . . . . . . . . . 10 Section 10. TREASURER. . . . . . . . . . . . . . . . . . . . . . . 10 Section 11. SECRETARY. . . . . . . . . . . . . . . . . . . . . . . 11 Section 12. DELEGATION OF DUTIES . . . . . . . . . . . . . . . . . 11 ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Indemnification and Insurance . . . . . . . . . . . . . . . . . . . . . 12 Section 1. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . 12 Section 2. INSURANCE OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS . . . . . . . . . . . . . . . . . . . . . . . 12 ARTICLE VII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 1. STOCK CERTIFICATES . . . . . . . . . . . . . . . . . . 13 Section 2. BOOKS OF ACCOUNTS AND RECORD OF STOCKHOLDERS . . . . . 13 Section 3. TRANSFERS OF SHARES. . . . . . . . . . . . . . . . . . 13 Section 4. REGULATIONS. . . . . . . . . . . . . . . . . . . . . . 14 Section 5. LOST, DESTROYED, OR MUTILATED CERTIFICATES . . . . . . 14 Section 6. FIXING OF A RECORD DATE FOR DIVIDENDS AND DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . 14 Section 7. INFORMATION TO STOCKHOLDERS AND OTHERS . . . . . . . . 15 ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Depositories and Custodians . . . . . . . . . . . . . . . . . . . . . . 15 Section 3. OTHER ARRANGEMENTS . . . . . . . . . . . . . . . . . . 15 ARTICLE X. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Contracts; Safekeeping and Transfer of Funds and Securities . . . . . . 15 Section 1. CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . 15 Section 2. CHECKS, NOTES DRAFTS, ETC. . . . . . . . . . . . . . . 15 Section 3. SALE OR TRANSFER OF SECURITIES . . . . . . . . . . . . 16 ARTICLE XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Independent Public Accountants. . . . . . . . . . . . . . . . . . . . . 16 ii ARTICLE XII. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Annual Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 ARTICLE XIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
iii FORM OF BY-LAWS OF DRESDNER RCM INVESTMENT FUNDS INC. ARTICLE I OFFICES Section 1. PRINCIPAL OFFICE. The principal office of the Corporation shall be in the City of Baltimore, State of Maryland, or at any other place or places, whether or not within the State of Maryland, as the Board of Directors may designate. Section 2. OTHER OFFICES. The Corporation may have such other offices in such places as the Board of Directors may from time-to-time determine or as the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. ANNUAL MEETING. No annual meeting of the stockholders of the Corporation shall be held in any year in which the election of Directors is not required to be acted upon under the Investment Company Act of 1940, as amended (the "1940 Act"), unless otherwise determined by the Board of Directors. An annual meeting may be held at any place within the United States as may be determined by the Board of Directors and as shall be designated in the notice of the meeting, at the time specified by the Board of Directors. Any business of the Corporation may be transacted at an annual meeting without being specifically designated in the notice unless otherwise provided by statute, the Corporation's charter, or these By-Laws. Section 2. SPECIAL MEETINGS. Special meetings of the stockholders, unless otherwise provided by law or by the Articles of Incorporation, may be called for any purpose or purposes by the Chairman of the Board, by a majority of the Board of Directors, by the President, or on the written request of the holders of at least 25% of the outstanding stock of the Corporation entitled to vote at such meeting. Such request shall state the purpose of such meeting and the matters proposed to be acted on at such meeting. The Secretary shall inform the stockholders who make the request of the reasonably estimated cost of preparing and mailing notice of the meeting and, upon payment to the Corporation of such costs, the Secretary shall give notice to each stockholder entitled to notice of the meeting. Unless requested by stockholders entitled to cast a majority of all the votes entitled to be cast at such a meeting, a special meeting need not be called to consider any matter that is substantially the same as a matter voted on at any special meeting of the stockholders held during the preceding 12 months. No business shall be transacted at any special meeting except as provided in the notice of meeting. Section 3. PLACE OF MEETING. Annual and special meetings of the stockholders shall be held at the principal executive office of the Corporation in the City of New York, New York, or at such other place within the United States as the Board of Directors may from time-to-time determine and as shall be stated in the notice of the meeting. Section 4. NOTICE OF MEETINGS: WAIVER OF NOTICE. Notice of the place, date and time of the holding of each annual and special meeting of the stockholders and the purpose or purposes of each special meeting shall be given personally or by mail, not less than ten (10) nor more than ninety (90) days before the date of such meeting, to each stockholder entitled to vote at such meeting and to each other stockholder entitled to notice of the meeting. Notice by mail shall be deemed to be duly given when deposited in the United States mail addressed to the stockholder at his address as it appears on the records of the Corporation, with postage thereon prepaid. Notice of any meeting of stockholders shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, or who shall, either before or after the meeting, submit a signed waiver of notice which is filed with the records of the meeting. If any meeting of the stockholders shall be adjourned to another time and place not more than 120 days after the original record date, and if the time and place to which the meeting shall be adjourned were announced at the meeting at which the adjournment is taken, no further notice of such meeting need be given. Section 5. QUORUM. Except as otherwise provided by statute, the Articles of Incorporation, or these By-Laws, the presence at any stockholders' meeting, in person or by proxy, of stockholders entitled to cast a majority of the votes entitled to be cast at such meeting shall constitute a quorum for the transaction of business. A majority of the votes cast at a meeting of stockholders, duly called and at which a quorum is present, shall be sufficient to take or authorize action upon any matter which may properly come before the meeting, unless the matter is one upon which, by express provisions of applicable statutes, of the Articles of Incorporation or of these By-Laws, a different vote is required, in which case such express provisions shall govern and control the decision of such matter. Section 6. ORGANIZATION. At each meeting of the stockholders, the Chairman of the Board (if one has been designated by the Board of Directors), or in the Chairman of the Board's absence or inability to act, the President, or in the absence or inability of the Chairman of the Board and the President, a Vice President, shall act as chairman of the meeting. The Secretary or the Assistant Secretary, or in the Secretary's or the Assistant Secretary's absence or inability to act, any person appointed by the chairman of the meeting, shall act as secretary of the meeting and keep the minutes thereof. Section 7. ORDER OF BUSINESS. The order of business at all meetings of the stockholders shall be as determined by the chairman of the meeting. Section 8. FIXING OF RECORD DATE. The Board of Directors may set a record date for the purpose of determining stockholders entitled to notice of or to vote at any meeting of the stockholders, or in order to make a determination of stockholders for any other proper purpose. For purposes of determining the record date for any meeting of stockholders, the record date may not be prior to the close of business on the day the record date is fixed, and shall be not more than ninety (90) nor less than ten (10) days before the date of the meeting of the stockholders. Only those persons who were holders of record of shares at such time shall be entitled to vote at such meeting and any adjournment thereof. In lieu of fixing a record date, the Board of Directors may provide that the stock transfer books shall be closed for a stated period not to exceed twenty (20) days, except that if the stock transfer books are closed for the 2 purpose of determining stockholders entitled to notice of, or to vote at, a meeting of stockholders, such books shall be closed for at least ten (10) days before the date of such meeting. If no record date is fixed and the stock transfer books are not closed for the determination of stockholders, the record date for the determination of stockholders entitled to notice of, or to vote at, a meeting of stockholders shall be the later of the close of business on the day on which notice of the meeting of stockholders is mailed or the thirtieth (30th) day before the meeting, or, if notice is waived by all stockholders, at the close of business on the tenth (10th) day next preceding the day on which the meeting is held. Section 9. VOTING. Except as otherwise provided by Maryland Law, the 1940 Act, or the Articles of Incorporation, each holder of record of shares of stock of the Corporation having voting power shall be entitled at each meeting of the stockholders to one vote for every share and a fractional vote for each fraction of a share of capital stock of the Corporation (regardless of class) standing in such stockholder's name on the record of stockholders of the Corporation as of the record date determined pursuant to Section 8 of this Article or, if such record date shall not have been so fixed, then at the later of (a) the close of business on the day on which notice of the meeting is mailed or (b) the 30th day before the meeting. With respect to the election of directors, each share of stock may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted, and directors shall be elected by plurality vote. Except as otherwise provided by Maryland Law, the 1940 Act, the Articles of Incorporation, or these By-Laws, any corporate action to be taken by vote of the stockholders shall be authorized by a majority of the total votes cast at a meeting of stockholders by the holders of shares present in person or represented by proxy and entitled to vote on such action, provided that a quorum is present. Section 10. PROXIES. Each stockholder entitled to vote at any meeting of stockholders may authorize another person or persons to act for him by a proxy signed by such stockholder or his duly authorized attorney-in-fact. No proxy shall be valid after the expiration of 11 months from the date thereof, unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the stockholder executing it, except in those cases where such proxy states that it is irrevocable and where an irrevocable proxy is permitted by law. Section 11. VOTING BY BALLOT. On a vote by ballot, each ballot shall be signed by the stockholder voting or by his proxy, if there be such proxy, and shall state the number of shares voted. Section 12. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of its own stock directly or indirectly owned by the Corporation shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of shares outstanding at any given time. The Board of Directors may adopt by resolution a procedure whereby a stockholder may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of stockholders who may make the certification, the purpose for which the certification may be made, the form of certification, and the information to be contained in it; if the certification is with respect to a record date or closing of the stock transfer books, the time after the record date or closing of the stock transfer books 3 within which the certification must be received by the Corporation; and any other provisions with respect to the procedure that the Board of Directors considers necessary or desirable. On receipt of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the stockholder of record of the specified stock in place of the stockholder who makes the certification Section 13. INSPECTORS. The Board of Directors may, in advance of any meeting of stockholders, appoint one or more inspectors to act at such meeting or any adjournment thereof. If the inspectors shall not be so appointed or if any of them shall fail to appear or act, the chairman of the meeting may, and on the request of any stockholder entitled to vote thereat shall, appoint inspectors. The inspectors shall determine the number of shares outstanding and the voting powers of each, the number of shares represented at the meeting, the existence of a quorum, and the validity and effect of proxies, and shall receive votes, ballots, or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and perform such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the chairman of the meeting or any stockholder entitled to vote thereat, the inspectors shall make a report in writing of any challenge, request, or matter determined by them and shall execute a certificate of any fact found by them. Any such report shall be signed by the inspector, if there is a single inspector, or by a majority of the inspectors, if there is more than one inspector. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof. No director or candidate for the office of director shall act as inspector of an election of directors. Inspectors need not be stockholders. Section 14. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Except as otherwise provided by Maryland Law, the 1940 Act, or the Articles of Incorporation, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice, and without a vote, if the following are filed with the records of stockholders meetings: (a) an unanimous written consent which sets forth the action and is signed by each stockholder entitled to vote on the matter and (b) a written waiver of any right to dissent signed by each stockholder entitled to notice of the meeting but not entitled to vote thereat. ARTICLE III BOARD OF DIRECTORS Section 1. GENERAL POWERS. Except as otherwise provided in the Articles of Incorporation, the business and affairs of the Corporation shall be managed under the direction of the Board of Directors. All powers of the Corporation may be exercised by or under authority of the Board of Directors except as conferred on or reserved to the stockholders by Maryland Law, the 1940 Act, the Articles of Incorporation, or these By-Laws. Section 2. NUMBER OF DIRECTORS. Except as otherwise provided in the Articles of Incorporation, the number of Directors shall be fixed, and may be increased or decreased from time-to-time, by resolution of the entire Board of Directors then in office, provided, however, that the number of Directors shall in no event be less than the minimum number required by Maryland law nor more than 15. Any vacancy created by an increase in number of Directors may be filled in 4 accordance with Section 5 of this Article. No reduction in the number of Directors shall have the effect of removing any director from office prior to the expiration of his term unless such Director is specifically removed pursuant to Maryland law. Directors need not be stockholders. Section 3. TERM OF DIRECTORS. The term of office of each Director shall be from the time of his election and qualification until his successor shall have been elected and shall have been qualified unless sooner terminated by his death, resignation or removal. Section 4. RESIGNATIONS. A Director may resign at any time by giving written notice of his resignation to the Board of Directors, the Chairman of the Board, the President, or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 5. VACANCIES. Subject to the provisions of Maryland Law and the 1940 Act, any vacancies in the Board of Directors arising from death, resignation, removal, or any other cause other than an increase in the number of Directors, shall be filled by a vote of a majority of the remaining members of the Board of Directors, whether or not sufficient to constitute a quorum. Any vacancy on the Board of Directors by reason of an increase in the number of directors may be filled by a majority vote of the entire Board of Directors in office prior to the increase. Section 6. PLACE OF MEETINGS. Meetings of the Board of Directors may be held at such place as the Board of Directors may from time-to-time determine or as shall be specified in the notice of such meeting. Section 7. REGULAR MEETINGS. Regular meetings of the Board of Directors may be held without notice at such time and place as may be determined by the Board of Directors. Section 8. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of two or more Directors or by the Chairman of the Board, the President, or the Secretary. Section 9. TELEPHONE MEETINGS. Members of the Board of Directors or of any committee thereof may participate in a meeting by means of a conference telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time. Subject to the provisions of the 1940 Act, participation in a meeting by these means constitutes presence in person at the meeting. Section 10. NOTICE OF MEETINGS. To the extent required by Maryland Law or the 1940 Act, notice of each meeting of the Board of Directors shall be given by the Secretary as hereinafter provided, in which notice shall be stated the time and place of the meeting. Notice of each such meeting shall be delivered to each Director, either personally or by telephone or facsimile or by any other standard form of telecommunication, at least 24 hours before the time at which such meeting is to be held, or mailed by first-class mail, postage prepaid, addressed to the Director at his residence or usual place of business, at least three days before the day on which such meeting is to be held. If mailed, such notice shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. Neither 5 the business to be transacted at, nor the purpose of, any annual, regular, or special meeting of the Board of Directors need be stated in the notice, unless specifically required by Maryland Law, the 1940 Act, the Articles of Incorporation, or these By-Laws. Section 11. WAIVER OF NOTICE OF MEETINGS. Notice of any meeting need not be given to any Director who shall, either before or after the meeting, sign a written waiver of notice which is filed with the records of the meeting or who shall attend such meeting. Section 12. QUORUM AND VOTING. One-third, but not less than two, of the members of the entire Board of Directors shall be present in person at any meeting of the Board of Directors in order to constitute a quorum for the transaction of business at such meeting. Except as otherwise expressly required by Maryland Law, the 1940 Act, the Articles of Incorporation or these By-Laws, the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum at any meeting of the Board of Directors, a majority of the Directors present thereat may adjourn such meeting to another time and place until a quorum shall be present thereat. Notice of the time and place of any such adjourned meeting shall be given to the Directors who were not present at the time of the adjournment and, unless such time and place were announced at the meeting at which the adjournment was taken, to the other Directors. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. Section 13. ORGANIZATION. The Board of Directors may, by resolution adopted by a majority of the entire Board of Directors, designate a Chairman of the Board, who shall preside at each meeting of the Board of Directors. In the absence or inability of the Chairman of the Board to preside at a meeting, the President or, in the President's absence or inability to act another Director chosen by a majority of the Directors present, shall act as chairman of the meeting and preside thereat. The Secretary or the Assistant Secretary (or, in their absence or inability to act, any person appointed by the Chairman) shall act as secretary of the meeting and keep the minutes thereof. Section 14. WRITTEN CONSENT OF DIRECTORS IN LIEU OF A MEETING. Subject to the provisions of Maryland Law and the 1940 Act, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and such written consent or consents are filed with the minutes of the proceedings of the Board of Directors or the committee. Section 15. COMPENSATION. Directors shall be entitled to receive, in accordance with a resolution passed by the Board of Directors, compensation for their services and for the cost of attendance at each annual, regular, or special meeting of the Board of Directors or any committee thereof. Nothing herein shall be construed as precluding any Director from serving the Corporation in any other capacity and receiving compensation therefor. Section 16. NET ASSET VALUE. The Board of Directors shall determine the times and method of calculation of the net asset value per share of the Corporation subject to the requirements of the 1940 Act. The Board of Directors may delegate its duties with respect to calculation of the net asset value per share of the Corporation to one or more individuals or corporate management companies and/or investment advisers pursuant to a written contract or 6 contracts which have obtained the requisite approvals, including any requisite approvals of renewals thereof, of the Board of Directors and/or the stockholders in accordance with the provisions of the 1940 Act. ARTICLE IV COMMITTEES Section 1. COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors may from time-to-time, by resolution adopted by a majority of the members of the entire Board of Directors, designate one or more committees of the Board of Directors, each such committee to consist of two or more Directors and to have such powers and duties, to the extent permitted by Maryland Law and the 1940 Act, as the Board of Directors may, by resolution, prescribe. The Board of Directors shall have the power to determine the size of each committee, to name (or to change, from time-to-time) the members of each committee, to designate alternate members to replace any absent or disqualified member, or to dissolve any such committee. Each member of any committee of the Board of Directors shall serve at the pleasure of the Board of Directors, and may be removed from such committee at any time by the vote of a majority of the members present at any meeting of the Board of Directors. Nothing herein shall be deemed to prevent the Board of Directors from appointing one or more committees consisting in whole or in part of persons who are not Directors; provided, however, that no such committee shall have or may exercise any authority or power of the Board of Directors in the management of the business or affairs of the Corporation. Section 2. MEETINGS; QUORUM. Not less than two of the members of any committee shall be present in person at any meeting of such committee in order to constitute a quorum for the transaction of business at such meeting, and the act of a majority present shall be the act of such committee. The Board of Directors may designate a chairman of any committee and such chairman, or the Chairman of the Board or the President, may fix the time and place of the committee's meetings unless the Board of Directors shall otherwise provide. In the absence or disqualification of any member of any committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may (a) unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member, (b) determine that, for purposes of that meeting, the member so appointed shall replace any other member of the committee, and (c) determine that such member may serve in such capacity until the next meeting of the Board of Directors. For purposes of determining whether a quorum of the committee exists, any such member of the Board of Directors appointed by the member or members of the committee present shall be treated as a member of the committee, and any member so replaced shall not be treated as a member of the committee. ARTICLE V OFFICERS, AGENTS, AND EMPLOYEES Section 1. ELECTION OR APPOINTMENT OF OFFICERS. The officers of the Corporation shall include a President, a Secretary and a Treasurer, each of whom shall be elected or appointed by the Board of Directors. The Board of Directors may elect or appoint one or more Vice Presidents and may also elect or appoint such other officers, agents, and employees, and 7 may give any officers so elected any title or titles, as it may deem necessary or proper. Any two or more offices may be held by the same person, except the offices of President and Vice President, but no officer shall execute, acknowledge, or verify any instrument as an officer in more than one capacity. Such officers shall be elected or appointed by the Board of Directors. Officers serve at the pleasure of the Board of Directors. Each officer shall hold office until his successor shall have been duly elected or appointed and shall have qualified, or until his death, or until he shall have resigned or have been removed, as hereinafter provided in these By-Laws. In its discretion, the Board of Directors may leave unfilled any office except those of President, Treasurer, and Secretary. The Board of Directors may from time-to-time elect or appoint, or delegate to the President the power to appoint, such officers (including one or more Assistant Vice Presidents, Assistant Treasurers and Assistant Secretaries) and such agents, as may be necessary or desirable for the business of the Corporation. Such officers and agents shall have such duties and shall hold their offices for such terms as may be prescribed by the Board of Directors or by the appointing authority. Section 2. EFFECT OF ELECTION OR APPOINTMENT OF OFFICERS, AGENTS, AND EMPLOYEES. The election or appointment of any officer or agent of the Corporation shall not, of itself, create any contract rights between the Corporation and such officer, agent, or employee. Section 3. RESIGNATIONS. Any officer of the Corporation may resign at any time by giving written notice of resignation to the Board of Directors, the Chairman of the Board, the President, or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 4. REMOVAL OF OFFICER, AGENT, OR EMPLOYEE. Any officer, agent, or employee of the Corporation may be removed by the Board of Directors with or without cause at any time in the sole discretion of the Board of Directors, and the Board of Directors may delegate such power of removal to any officer in respect of officers, agents, or employees under his control. Such removal shall be without prejudice to such person's contract rights, if any, but the appointment of any person as an officer, agent, or employee of the Corporation shall not itself create contract rights. Section 5. VACANCIES. A vacancy in any office, either arising from death, resignation, removal, creation of a new office, or any other cause, may be filled by the Board of Directors for the unexpired portion of the term of the office which shall be vacant. Section 6. COMPENSATION. The compensation of the officers of the Corporation shall be fixed by the Board of Directors, but this power may be delegated to any officer in respect of other officers under his control. Section 7. BONDS OR OTHER SECURITY. If required by the Board of Directors, any officer, agent, or employee of the Corporation shall give a bond or other security for the faithful performance of his duties, in such amount and with such surety or sureties as the Board of Directors may require. Section 8. PRESIDENT. The President shall be the chief executive officer. In the absence of the Chairman of the Board (or if there be none), he shall preside at all meetings of the 8 stockholders and of the Board of Directors. To the extent permitted by Maryland Law and the 1940 Act, the President shall be a member ex officio of each committee of the Board of Directors of which he is not officially a member. The President shall have, subject to the control of the Board of Directors, general supervision and control of the business and affairs of the Corporation. The President may, to the extent permitted by Maryland Law and the 1940 Act, execute any deed, mortgage, bond, contract, or other instrument to which the Corporation is a party except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these By-Laws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed. The President may employ and discharge employees and agents of the Corporation, and in general shall perform all duties incident to the Office of President, as well as such other duties as may be prescribed by the Board of Directors from time-to-time. To the extent consistent with Maryland Law and the 1940 Act, the President may delegate any or all of the powers listed in this Section 8 of Article V to any other officer of the Corporation. Section 9. VICE PRESIDENT. Each Vice President shall have such powers and perform such duties as the Board of Directors or the President may from time-to-time prescribe. The Board of Directors may designate one or more Vice Presidents as Senior-Vice President or as Vice President for a particular area of responsibility. Unless and until the Board of Directors determines otherwise, in the absence of the President or in the event of a vacancy in such office, the most senior Senior-Vice President, or, if none such exists, the most senior Vice President (based on the order of election of all Vice Presidents currently in office) shall perform the duties of the President and when so acting shall have all the powers of, and shall be subject to the same restrictions as, the President. Section 10. TREASURER. The Treasurer shall: (a) have charge and custody of, and be responsible for, all the funds and securities of the Corporation, except those which the Corporation has placed in the custody of a bank or other entity permitted to act as custodian for the Corporation under the 1940 Act pursuant to a written agreement designating such bank or other entity as a custodian or sub-custodian of the property of the Corporation; (b) keep, or cause to be kept, full and accurate accounts of receipts and disbursements in books belonging to the Corporation; (c) cause all moneys and other valuables to be deposited to the credit of the Corporation in such depositories as may be designated, from time-to-time, by the Board of Directors; (d) receive, and give receipts for, or cause to receive and give receipts for, moneys due and payable, to the Corporation from any source whatsoever; (e) disburse, or cause to be disbursed, the funds of the Corporation and supervise the investment of its funds as ordered or authorized by the Board of Directors, taking proper vouchers therefor; 9 (f) render to the President and the Board of Directors, at the regular meetings of the Board of Directors or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation; and (g) in general, perform all the duties incident to the office of Treasurer and such other duties as from time-to-time may be assigned to him by the Board of Directors or the President. Section 11. SECRETARY. The Secretary shall: (a) keep or cause to be kept in one or more books provided for the purpose, the minutes of all meetings of the Board of Directors, the committees of the Board of Directors, and the stockholders; (b) see that all notices are duly given in accordance with the provisions of these By-Laws and as required by law; (c) be custodian of the corporate records and the seal of the Corporation and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal; (d) see that the books, reports, statements, certificates, and other documents and records required by law to be kept and filed are properly kept and filed; and (e) in general, perform all the duties incident to the office of Secretary and such other duties as from time-to-time may be assigned to him by the Board of Directors or the President. Section 12. DELEGATION OF DUTIES. In case of the absence of any officer of the Corporation, or for any other reason that the Board of Directors may deem sufficient, the Board of Directors may confer for the time being the powers or duties, or any of them, of such officer upon any other officer or upon any Director. ARTICLE VI INDEMNIFICATION AND INSURANCE Section 1. INDEMNIFICATION. The Corporation shall indemnify to the fullest extent permitted by law, (including the Investment Company Act of 1940, as amended) as currently in effect or as the same may hereafter be amended, any person made or threatened to be made a party of any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person or such person's testator or intestate is or was a director or officer of the Corporation or serves or served at the request of the Corporation any other enterprise as a director or officer. To the fullest extent permitted by law (including the Investment Company Act of 1940, as amended) as currently in effect or as the same may hereafter be amended, expenses incurred by any person in defending any such action, suit or proceeding shall be paid or reimbursed by the Corporation promptly upon receipt by it of an undertaking by such person to repay such expenses even if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation. The rights provided to any person by this Article VI 10 shall be enforceable against the Corporation by such person who shall be presumed to have relied upon it in serving or continuing to serve as a director or officer as provided above. No amendment of this Article VI shall impair the rights of any person arising at any time with respect to events occurring prior to such amendment. For purposes of this Article VI, the term "Corporation" shall include any predecessor of the Corporation and any constituent Corporation (including any constituent of a constituent) absorbed by the Corporation in a consolidation or merger; the term "other enterprise" shall include any Corporation, partnership, joint venture, trust or employee benefit plan; service "at the request of the Corporation" shall include service as a director or officer of the Corporation which imposes duties on, or involves services by, such director or officer with respect to any employee benefit plan, its participants or beneficiaries; any excise taxes assessed on a person with respect to an employee benefit plan shall be deemed to be indemnifiable expenses; and action by a person with respect to any employee benefit plan which such person reasonably believes to be in the interest of the participants and beneficiaries of such plan shall be deemed to be action not opposed to the best interests of the Corporation. Section 2. INSURANCE OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS. Except as otherwise provided by statute, the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, partner, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability. ARTICLE VII EXEMPTION FROM LIABILITY Section 1. EXEMPTION. A director or officer of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not permitted by law (including the Investment Company Act of 1940, as amended) as currently in effect or as the same may hereafter be amended. No amendment, modification or repeal of this Article VII shall adversely affect any right or protection of a director or officer that exists at the time of such amendment, modification or repeal. ARTICLE VIII CAPITAL STOCK Section 1. STOCK CERTIFICATES. Each holder of stock of the Corporation shall be entitled upon request to have a certificate or certificates, in such form as shall be approved by the Board of Directors, representing the number of shares of the Corporation owned by him, provided, however, that certificates for fractional shares will not be delivered in any case. The certificates representing shares of stock shall be signed by or in the name of the Corporation by the Chairman of the Board, the President or a Vice President, and by the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer and sealed with the seal of the Corporation. 11 Any or all of the signatures or the seal on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate shall be issued, it may be issued by the Corporation with the same effect as if such officer, transfer agent, or registrar were still in office at the date of issue. Certificates shall be consecutively numbered; and if the Corporation shall, from time-to-time, issue several classes of stock, each class may have its own number series. Each certificate representing stock which is restricted as to its transferability or voting powers, which is preferred or limited as to its dividends or as to its share of the assets upon liquidation or which is redeemable at the option of the Corporation, shall have a statement of such restriction, limitation, preference, or redemption provision, or a summary thereof, plainly stated on the certificate. In lieu of such a statement or summary, the Corporation may set forth upon the face or back of the certificate a statement that the Corporation will furnish to any stockholder, upon request and without charge, a full statement of such information. Section 2. BOOKS OF ACCOUNTS AND RECORD OF STOCKHOLDERS. There shall be kept at the principal executive office of the Corporation or at the office of its transfer agent correct and complete books and records containing the name and address of each stockholder and the number of shares of stock of each class held by such stockholder. Section 3. TRANSFERS OF SHARES. Transfers of shares of stock of the Corporation shall be made on the stock records of the Corporation only by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary or with a transfer agent or transfer clerk, and on surrender of the certificate or certificates, if issued, for such shares properly endorsed or accompanied by a duly executed stock transfer power and the payment of all taxes thereon. When such requirements are satisfied and the transfer has been recorded on the books of the Corporation, the Corporation shall cancel the old certificate and issue a new certificate to the person entitled thereto. Except as otherwise provided by law or these By-Laws, the Corporation shall be entitled to recognize the exclusive rights of a person in whose name any share or shares stand on the record of stockholders as the owner of such share or shares for all purposes, including, without limitation, the rights to receive dividends or other distributions, and to vote as such owner; and the Corporation shall not be bound to recognize any equitable or legal claim to or interest in any such share or shares on the part of any other person, whether or not it shall have express or other notice thereof. Section 4. REGULATIONS. The Board of Directors may make such additional rules and regulations, not inconsistent with these By-Laws, as it may deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation. It may appoint, or authorize any officer or officers to appoint, one or more transfer agents or one or more transfer clerks and one or more registrars and may require all certificates for shares of stock to bear the signature or signatures of any of them. Section 5. LOST, DESTROYED, OR MUTILATED CERTIFICATES. The holder of any certificates representing shares of stock of the Corporation shall immediately notify the Corporation of any loss, theft, destruction, or mutilation of such certificate, and, upon request, shall provide to the Corporation an affidavit of the rightful holder of such certificate stating that such certificate has been lost, stolen, destroyed, or mutilated, as the case may be. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued 12 by it which the owner thereof shall allege to have been lost or destroyed or which shall have been mutilated. Prior to issuing a new certificate to replace any certificate alleged to have been lost, stolen, destroyed, or mutilated, the Board of Directors may, in its discretion, require such owner or his legal representatives to give to the Corporation a bond in such sum, limited or unlimited, and in such form and with such surety or sureties, as the Board of Directors in its absolute discretion shall determine, to indemnify the Corporation against any claim that may be made against it on account of the alleged loss, theft, or destruction of any such certificate, or issuance of a new certificate. Anything herein to the contrary notwithstanding, the Board of Directors, in its absolute discretion, may refuse to issue any such new certificate, except pursuant to legal proceedings under Maryland Law. Section 6. FIXING OF A RECORD DATE FOR DIVIDENDS AND DISTRIBUTIONS. The Board of Directors may fix, in advance, as a record date, a date not more than 90 days preceding the date fixed for the payment of any dividend or the making of any distribution or the allotting of any other rights (except with respect to voting which is provided for in Article II(8)). Once the Board of Directors fixes such record date as the record date for the determination of the stockholders entitled to receive any such dividend or distribution or the allotment of such other rights, only the stockholders of record at the time so fixed shall be entitled to receive such dividend or distribution or such other rights. Section 7. INFORMATION TO STOCKHOLDERS AND OTHERS. Any stockholder or his agent may inspect and copy during usual business hours the Corporation's By-Laws, minutes of the proceedings of its stockholders, annual statements of its affairs, and voting trust agreements on file at its principal office. ARTICLE IX DEPOSITORIES AND CUSTODIANS Section 1. EMPLOYMENT OF A CUSTODIAN. The Corporation shall place and at all times maintain in the custody of a custodian (including any sub-custodian for the custodian) all funds, securities and similar investments owned by the Corporation to the extent required by the Investment Company Act of 1940, as amended. The custodian (and any sub-custodian) shall be an institution conforming to the requirements of Section 17(f) of the Investment Company Act of 1940, as amended, and the rules of the Securities and Exchange Commission thereunder. The custodian shall be appointed from time to time by the Board of Directors, which shall fix its remuneration. Section 2. TERMINATION OF CUSTODIAN AGREEMENT. Upon termination of the custodian agreement or inability of the custodian to continue to serve, the Board of Directors shall promptly appoint a successor custodian, but in the event that no successor custodian can be found who has the required qualifications and is willing to serve, the Board of Directors shall call as promptly as possible a special meeting of the stockholders to determine whether the Corporation shall function without a custodian or shall be liquidated. If so directed by vote of the holders of a majority of the outstanding shares of stock of the Corporation, the custodian shall deliver and pay over all property of the Corporation held by it as specified in such vote. 13 Section 3. OTHER ARRANGEMENTS. The Corporation may make such other arrangements for the custody of its assets (including deposit arrangements) as may be required by any applicable law, rule or regulation. ARTICLE X CONTRACTS; SAFEKEEPING AND TRANSFER OF FUNDS AND SECURITIES Section 1. CONTRACTS. Subject to the requirements of the 1940 Act, the Board of Directors may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Section 2. CHECKS, NOTES DRAFTS, ETC. Checks, notes, drafts, acceptances, bills of exchange, and other orders or obligations for the payment of money shall be signed by such officer or officers or person or persons as the Board of Directors by resolution shall from time-to-time designate, and such authority may be general or confined to specific instances. Section 3. SALE OR TRANSFER OF SECURITIES. Stock certificates, bonds, or other securities at any time owned by the Corporation may be held on behalf of the Corporation or sold, transferred, or otherwise disposed of subject to any limits imposed by these By-Laws and pursuant to authorization by the Board of Directors and, when so authorized to be held, sold, transferred, or otherwise disposed of, may be transferred from the name of the Corporation by the signature of the President, a Vice President, or the Treasurer or pursuant to any procedure approved by the Board of Directors, subject to applicable law. ARTICLE XI INDEPENDENT PUBLIC ACCOUNTANTS Section 1. INDEPENDENT PUBLIC ACCOUNTANTS The Corporation shall employ a firm of independent public accountants as its accountants as its accountant to examine the accounts of the Corporation and to sign and certify financial statements filed by the Corporation. The accountant's certificates and reports shall be addressed both to the Directors and to the stockholders. The employment of the accountant shall be conditioned upon the right of the Corporation to terminate the employment forthwith without any penalty by vote of a majority of the outstanding voting securities at any stockholders' meeting called for that purpose. A majority of the Directors who are not interested persons (as such term is defined in the Investment Company Act of 1940, as amended) of the Corporation shall select the accountant at any meeting held (i) within 30 days before or after the beginning of the fiscal year of the Corporation or (ii) before the annual stockholders' meeting in that year. Such selection shall be submitted for ratification or rejection at the next succeeding annual stockholders' meeting. If such meeting shall reject such selection, the accountant shall be selected by majority vote of the Corporation's outstanding voting securities, either at the meeting at which the rejection occurred or at a subsequent meeting of stockholders called for the purpose of selecting an accountant. 14 Any vacancy occurring between annual meetings, due to the resignation of the accountant, may be filled by a majority vote of the members of the Board of Directors who are not such interested persons. ARTICLE XII ANNUAL STATEMENT The books of account of the Corporation shall be examined by an independent firm of public accountants at the close of each annual period of the Corporation and at such other times as may be directed by the Board of Directors. A report to the stockholders based upon each such examination shall be mailed to each stockholder of record on such date with respect to each report as may be determined by the Board of Directors, at his address as the same appears on the books of the Corporation. Such annual statement shall be placed on file at the Corporation's principal office within 120 days after the end of the Corporation's fiscal year. Each such report shall show the assets and liabilities of the Corporation as of the close of the annual or other period covered by the report. Such report shall also show the Corporation's income and expenses for the period from the end of the Corporation's preceding fiscal year to the close of the annual or other period covered by the report and any other information required by the 1940 Act, and shall set forth such other matters as the Board of Directors or such firm of independent public accountants shall determine. ARTICLE XIII AMENDMENTS These By-Laws may be amended or repealed by the affirmative vote of a majority of the Board of Directors at any regular or special meeting of the Board of Directors, subject to the requirements of the 1940 Act. 15 EX-99.23(C)(1) 4 EXHIBIT 99.23(C)(1) EXHIBIT 99.23(c)(1) INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND DRESDNER RCM INVESTMENT FUNDS INC. DRESDNER RCM EUROPE FUND CLASS N (Par Value $0.001) THIS CERTIFIES THAT ________________________________ IS THE REGISTERED HOLDER OF ____________________________ CLASS N SHARES OF THE DRESDNER RCM EUROPE FUND Common Stock of DRESDNER RCM INVESTMENT FUNDS INC. TRANSFERABLE ONLY ON THE BOOKS OF THE CORPORATION BY THE HOLDER HEREOF IN PERSON OR BY ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED. IN WITNESS WHEREOF, THE SAID CORPORATION HAS CAUSED THIS CERTIFICATE TO BE SIGNED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED THIS ____________ DAY OF ___________________________ AD. __________ ________________________ _________________________ Secretary President SHARES Par Value Each $0.001 CERTIFICATE FOR SHARES DRESDNER RCM EUROPE FUND CLASS N SERIES COMMON STOCK OF DRESDNER RCM INVESTMENT FUNDS INC. ISSUED TO: _______________________________ DATED: _______________________________ THE CORPORATION IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OF CAPITAL STOCK AND THE BOARD OF DIRECTORS MAY AUTHORIZE ADDITIONAL CLASSES OF CAPITAL STOCK. THE CORPORATION WILL FURNISH A FULL STATEMENT OF THE BOARD OF DIRECTORS' AUTHORITY AND OF THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS, QUALIFICATIONS AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH CLASS WHICH THE CORPORATION IS AUTHORIZED TO ISSUE TO ANY STOCKHOLDER UPON REQUEST WITHOUT CHARGE. FOR VALUE RECEIVED, ____________________ HEREBY SELL, ASSIGN AND TRANSFER UNTO _____________________________________________________________ ______________________________________________________________________________ SHARES REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT_________________________________________ ATTORNEY TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN NAMED CORPORATION WITH FULL POWER OF SUBSTITUTION IN THE PREMISES. DATED _____________________ In presence of _________________________________________ EX-99.23(C)(2) 5 EXHIBIT 99.23(C)(2) EXHIBIT 99.23(c)(2) INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND DRESDNER RCM INVESTMENT FUNDS INC. DRESDNER RCM EUROPE FUND CLASS I (Par Value $0.001) THIS CERTIFIES THAT ________________________________ IS THE REGISTERED HOLDER OF ____________________________ CLASS I SHARES OF THE DRESDNER RCM EUROPE FUND Common Stock of DRESDNER RCM INVESTMENT FUNDS INC. TRANSFERABLE ONLY ON THE BOOKS OF THE CORPORATION BY THE HOLDER HEREOF IN PERSON OR BY ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED. IN WITNESS WHEREOF, THE SAID CORPORATION HAS CAUSED THIS CERTIFICATE TO BE SIGNED BY ITS DULY AUTHORIZED OFFICERS AND ITS CORPORATE SEAL TO BE HEREUNTO AFFIXED THIS ____________ DAY OF ___________________________ AD. __________ _____________________________ ___________________________ Secretary President SHARES Par Value Each $0.001 CERTIFICATE FOR SHARES DRESDNER RCM EUROPE FUND CLASS I SERIES COMMON STOCK OF DRESDNER RCM INVESTMENT FUNDS INC. ISSUED TO: ___________________________ DATED: ___________________________ THE CORPORATION IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OF CAPITAL STOCK AND THE BOARD OF DIRECTORS MAY AUTHORIZE ADDITIONAL CLASSES OF CAPITAL STOCK. THE CORPORATION WILL FURNISH A FULL STATEMENT OF THE BOARD OF DIRECTORS' AUTHORITY AND OF THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS, QUALIFICATIONS AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH CLASS WHICH THE CORPORATION IS AUTHORIZED TO ISSUE TO ANY STOCKHOLDER UPON REQUEST WITHOUT CHARGE. FOR VALUE RECEIVED, ____________________ HEREBY SELL, ASSIGN AND TRANSFER UNTO _____________________________________________________________ ______________________________________________________________________________ SHARES REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT_________________________________________ ATTORNEY TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN NAMED CORPORATION WITH FULL POWER OF SUBSTITUTION IN THE PREMISES. DATED _____________________ In presence of _________________________________________ EX-99.23(D) 6 EXHIBIT 99.23(D) EXHIBIT 99.23(d) FORM OF INVESTMENT MANAGEMENT AGREEMENT THIS AGREEMENT is entered into this ____ day of _______, 1999 by and between Dresdner RCM Investment Funds Inc. (the "Company"), on behalf of Dresdner RCM Europe Fund (the "Fund"), a series of the Company, and Dresdner RCM Global Investors LLC, (the "Investment Manager"). 1. APPOINTMENT AND ACCEPTANCE OF APPOINTMENT OF THE INVESTMENT MANAGER (a) Subject to express provisions and limitations set forth in the Company's Amended and Restated Articles of Incorporation, By-Laws, Form N-1A Registration Statement under the Investment Company Act of 1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as amended (the "1933 Act"), and the Fund's prospectus as in use from time-to-time, as well as to the factors affecting the Company's status as a regulated investment company under the Internal Revenue Code of 1986, as amended, the Company hereby grants to the Investment Manager and the Investment Manager hereby accepts full discretionary authority to manage the investment and reinvestment of the cash, securities, and other assets of the Fund (the "Portfolio"), any proceeds thereof, and any additions thereto, in the Investment Manager's discretion. In the performance of its duties hereunder, the Investment Manager shall further be bound by any and all determinations by the Board of Directors of the Company relating to the investment objectives, policies, or restrictions of the Fund, which determinations shall be communicated in writing to the Investment Manager. For all purposes herein, the Investment Manager shall be deemed an independent contractor of the Company. 2. POWERS OF THE INVESTMENT MANAGER (a) Subject to the limitations provided in Section 1 hereof, the Investment Manager is empowered hereby, through any of its partners, principals, or appropriate employees, for the benefit of the Fund: (i) to invest and reinvest in shares, stocks, bonds, notes, and other obligations of every description issued or incurred by governmental bodies, corporations, mutual funds, trusts, associations, or firms, in trade acceptances and other commercial paper, and in loans and deposits at interest on call or on time, whether or not secured by collateral; (ii) to purchase and sell commodities or commodities contracts and investments in put, call, straddle, or spread options; (iii) to enter into forward, future, or swap contracts with respect to the purchase and sale of securities, currencies, commodities, and commodities contracts; (iv) to lend its portfolio securities to brokers, dealers, and other financial institutions; B-1 (v) to buy, sell, or exercise options, rights, and warrants to subscribe for stock or securities; (vi) to engage in any other types of investment transactions described in the Fund's Prospectus and Statement of Additional Information; and (vii) to take such other action, or to direct the Fund's custodian to take such other action, as may be necessary or desirable to carry out the purpose and intent of the foregoing. (b) The Investment Manager may enter into one or more contracts (each a "Sub-Advisory Contract" or "Sub-Administration Contract") with a sub-adviser or sub-administrator in which the Investment Manager delegates to such sub-adviser or sub-administrator any or all duties specified in this Agreement, provided that each Sub-Advisory Contract or Sub-Administration Contract imposes on the sub-adviser or sub-administrator bound thereby all applicable duties and conditions to which the Investment Manager is subject under this Agreement, and further provided that each Sub-Advisory Contract or Sub-Administration Contract meets all requirements of the 1940 Act and any rules, regulations, or orders of the Securities and Exchange Commission thereunder. 3. EXECUTION OF PORTFOLIO TRANSACTIONS (a) The Investment Manager shall provide adequate facilities and qualified personnel for the placement of, and shall place, orders for the purchase, or other acquisition, and sale, or other disposition, of portfolio securities or other portfolio assets for the Fund. (b) Unless otherwise specified in writing to the Investment Manager by the Fund, all orders for the purchase and sale of securities for the Portfolio shall be placed in such markets and through such brokers as in the Investment Manager's best judgment shall offer the most favorable price and market for the execution of each transaction; provided, however, that, subject to the above, the Investment Manager may place orders with brokerage firms that have sold shares of the Fund or that furnish statistical and other information to the Investment Manager, taking into account the value and quality of the brokerage services of such firms, including the availability and quality of such statistical and other information. Receipt by the Investment Manager of any such statistical and other information and services shall not be deemed to give rise to any requirement for abatement of the advisory fee payable to the Investment Manager pursuant to Section 5 hereof and Appendix A hereto. (c) The Fund understands and agrees that the Investment Manager may effect securities transactions which cause the Fund to pay an amount of commission in excess of the amount of commission another broker would have charged, provided, however, that the Investment Manager determines in good faith that such amount of commission is reasonable in relation to the value of Fund share sales, statistical, brokerage, and other services provided by such broker, viewed in terms of either the specific transaction or the Investment Manager's overall responsibilities to the Fund and other clients for which the Investment Manager exercises B-2 investment discretion. The Fund also understands that the receipt and use of such services will not reduce the Investment Manager's customary and normal research activities. (d) The Fund understands and agrees that: (i) the Investment Manager performs investment management services for various clients and that the Investment Manager may take action with respect to any of its other clients which may differ from action taken or from the timing or nature of action taken with respect to the Portfolio, so long as it is the Investment Manager's policy, to the extent practical, to allocate investment opportunities to the Portfolio over a period of time on a fair and equitable basis relative to other clients; (ii) the Investment Manager shall have no obligation to purchase or sell for the Portfolio any security which the Investment Manager, or its principals or employees, may purchase or sell for its or their own accounts or the account of any other client, if in the opinion of the Investment Manager such transaction or investment appears unsuitable, impractical, or undesirable for the Portfolio; (iii) on occasions when the Investment Manager deems the purchase or sale of a security to be in the best interests of the Fund as well as other clients of the Investment Manager, the Investment Manager, to the extent permitted by applicable laws and regulations, may aggregate the securities to be so sold or purchased when the Investment Manager believes that to do so will be in the best interests of the Fund. In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, shall be made by the Investment Manager in the manner the Investment Manager considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to such other clients; and (iv) the Investment Manager does not prohibit any of its principals or employees from purchasing or selling for their own accounts securities that may be recommended to or held by the Investment Manager's clients, subject to the provisions of the Investment Manager's Code of Ethics and that of the Company. 4. ALLOCATION OF EXPENSES OF THE FUND (a) The Investment Manager will bear all expenses related to salaries of its employees and to the Investment Manager's overhead in connection with its duties under this Agreement. The Investment Manager also will pay all fees and salaries of the Company's directors and officers who are affiliated persons (as such term is defined in the 1940 Act) of the Investment Manager. (b) Except for the expenses specifically assumed by the Investment Manager, the Fund will pay all of its expenses, including, without limitation, fees and expenses of the directors not affiliated with the Investment Manager attributable to the Fund; fees of the Investment Manager; fees of the Fund's administrator, custodian, and sub-custodians for all services to the Fund (including safekeeping of funds and securities and maintaining required books and accounts); transfer agent, registrar, and dividend reinvestment and disbursing agent fees; interest charges; taxes; charges and expenses of the Fund's legal counsel and independent accountants; charges and expenses of legal counsel provided to the non-interested directors of the Company; expenses of repurchasing shares of the Fund; expenses of printing and mailing B-3 share certificates, stockholder reports, notices, proxy statements, and reports to governmental agencies; brokerage and other expenses connected with the execution recording and settlement of portfolio security transactions; expenses connected with negotiating, or effecting purchases or sales of portfolio securities or registering privately issued portfolio securities; expenses of calculating and publishing the net asset value of the Fund's shares; expenses of membership in investment company associations; premiums and other costs associated with the acquisition of a mutual fund directors and officers errors and omissions liability insurance policy; expenses of fidelity bonding and other insurance premiums; expenses of stockholders' meetings; SEC, state blue sky, and foreign registration fees; portfolio pricing services expenses; litigation expenses; and Rule 12b-1 fees. (c) The expenses borne by the Fund pursuant to Section 4(b) shall include the Fund's proportionate share of any such expenses of the Company, which shall be allocated among the Fund and the other series of the Company, if any, on such basis as the Company shall deem appropriate. 5. COMPENSATION OF THE INVESTMENT MANAGER (a) In consideration of the services performed by the Investment Manager hereunder, the Fund will pay or cause to be paid to the Investment Manager, as they become due and payable, management fees determined in accordance with the attached Schedule of Fees (Appendix A). In the event of termination, any management fees paid in advance pursuant to such fee schedule will be prorated as of the date of termination and the unearned portion thereof will be returned to the Fund. (b) The net asset value of the Fund's portfolio used in fee calculations shall be determined in the manner set forth in the Amended and Restated Articles of Incorporation and By-Laws of the Company and the Fund's Prospectus as of the close of regular trading on the New York Stock Exchange on each business day the New York Stock Exchange is open. (c) The Fund hereby authorizes the Investment Manager to charge the Portfolio, subject to the provisions in Section 6 hereof, for the full amount of fees as they become due and payable pursuant to the attached Schedule of Fees; provided, however, that a copy of a fee statement covering said payment shall be sent to the Fund's custodian and to the Company. (d) The Investment Manager may from time-to-time voluntarily agree to limit the aggregate operating expenses of the fund for one or more fiscal years of the Company, as set forth in Appendix A hereto or in any other written agreement with the Company. If in any such fiscal year the aggregate operating expenses of the Fund (as defined in Appendix A or such other written agreement) exceed the applicable percentage of the average daily net assets of the Fund for such fiscal year, the Investment Manager shall reimburse the Fund for such excess operating expenses. Such operating expense reimbursement, if any, shall be estimated, reconciled, and paid on a quarterly basis, or such more frequent basis as the Investment Manager may agree in writing. Any such reimbursement of the Fund shall be repaid to the Investment Manager by the Fund, without interest, at such later time or times as it may be repaid without causing the aggregating operating expenses of the Fund to exceed the applicable percentage of the average daily net assets of the Fund for the period in which it is repaid; provided, however, that upon termination of this Agreement, the Fund shall have no further obligation to repay any such reimbursements. B-4 6. SERVICE TO OTHER CLIENTS Nothing contained in this Agreement shall be construed to prohibit the Investment Manager from performing investment advisory, management, distribution, or other services for other investment companies and other persons, trusts, or companies, or to prohibit affiliates of the Investment Manager from engaging in such business or in other related or unrelated businesses. 7. STANDARD OF CARE The Investment Manager shall have no liability to the Fund, or its stockholders, for any error of judgment, mistake of law, loss arising out of any investment, or other act or omission on the performance of its obligations to the Fund not involving willful misfeasance, bad faith, gross negligence, or reckless disregard of its obligations and duties hereunder. The federal securities laws impose liabilities under certain circumstances on persons who act in good faith, and therefore nothing herein shall in any way constitute a waiver or limitation of any rights which the undersigned may have under any federal securities laws. 8. DURATION OF AGREEMENT This Agreement shall continue in effect until the close of business on _________, 2001. This Agreement may thereafter be renewed from year to year by mutual consent, provided that such renewal shall be specifically approved at least annually by (i) the Board of Directors of the Company, or by the vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the Fund, and (ii) a majority of those directors who are not parties to this Agreement or interested persons (as defined in the 1940 Act) of any such party cast in person at a meeting called for the purpose of voting on such approval. 9. TERMINATION This Agreement may be terminated at any time, without payment of any penalty, by the Board of Directors of the Company or by the vote of a majority (as defined in the 1940 Act) of the outstanding voting securities of the Company on sixty (60) days' written notice to the Investment Manager, or by the Investment Manager on like notice to the Company. This Agreement shall automatically terminate in the event of its assignment (as defined in the 1940 Act). 10. CORPORATE NAME In the event this Agreement is terminated by either party or upon written notice from the Investment Manager at any time, the Company hereby agrees that it will eliminate from its corporate name any reference to the name "Dresdner RCM." The Company shall have the non-exclusive use of the name "Dresdner RCM" in whole or in part so long as this Agreement is effective or until such notice is given. B-5 11. REPORTS, BOOKS, AND RECORDS The Investment Manager shall render to the Board of Directors of the Company such periodic and other reports as the Board may from time to time reasonably request. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Investment Manager hereby agrees that all records which it maintains for the Company are property of the Company. The Investment Manager shall surrender promptly to the Company any of such records upon the Company's request, and shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act. 12. REPRESENTATIONS AND WARRANTIES The Investment Manager represents and warrants to the Company that the Investment Manager is registered as an investment adviser under the Investment Advisers Act of 1940. During the term of this Agreement, the Investment Manager shall notify the Company of any change in the ownership of the Investment Manager within a reasonable time after such change. The Company represents and warrants to the Investment Manager that the company is registered as an open-end management investment company under the 1940 Act. Each party further represents and warrants to the other that this Agreement has been duly authorized by such party and constitutes the legal, valid, and binding obligation of such party in accordance with its terms. 13. AMENDMENT OF THIS AGREEMENT No provision of this Agreement may be change, waived, discharged, or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge, or termination is sought. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate originals by their officers thereunto duly authorized as of the date first above written. DRESDNER RCM GLOBAL DRESDNER RCM INVESTMENT FUNDS INVESTORS LLC INC. ON BEHALF OF DRESDNER RCM EUROPE FUND By: By: ----------------------- ---------------------- ATTEST: ATTEST: By: By: ---------------------- ---------------------- B-6 APPENDIX A FORM OF INVESTMENT MANAGEMENT AGREEMENT BETWEEN DRESDNER RCM GLOBAL INVESTORS LLC AND DRESDNER RCM INVESTMENT FUNDS INC. SCHEDULE OF FEES FOR DRESDNER RCM EUROPE FUND Effective Date: __________, 1999 The Fund will pay a monthly fee to the Investment Manager based on the average daily net assets of the Fund, at the annualized rate of 1.00% of the value of the Fund's average daily net assets up to and including $100 million and 0.80% of the Fund's average daily net assets in excess of $100 million. Value of Securities and Cash of Fund Fee - ------------------------------------------- ---- Up to and including $100 million 1.00% annually In excess of $100 million 0.80% annually For three years beginning from the date that the Fund converts to an open-end investment company, the Investment Manager shall reimburse the Fund to the extent that the operating expenses of the Fund (as hereinafter defined) exceed 1.60% of the average daily net assets of the Fund. For this purpose, the "operating expenses" of the Fund shall be deemed to include all ordinary operating expenses other than interest, taxes and extraordinary expenses. Dated: __________, 1999 DRESDNER RCM GLOBAL INVESTORS LLC DRESDNER RCM INVESTMENT FUNDS INC. ON BEHALF OF DRESDNER RCM EUROPE FUND By: By: ------------------------- ------------------------- ATTEST: ATTEST: By: By: -------------------------- -------------------------- EX-99.23(E) 7 EXHIBIT 99.23(E) EXHIBIT 99.23(e) FORM OF DISTRIBUTION AGREEMENT DRESDNER RCM INVESTMENT FUNDS INC. 4 EMBARCADERO SAN FRANCISCO, CA 94111 ________________, 1999 Funds Distributor, Inc. 60 State Street Suite 1300 Boston, Massachusetts 02109 Dear Sirs: This is to confirm that, in consideration of the agreements hereinafter contained, the above-named investment company (the "Fund") has agreed that you shall be, for the period of this agreement, the distributor of shares of the Fund. For purposes of this agreement the term "Shares" shall mean the Fund's authorized shares. 1. Services as Distributor 1.1 You will act as agent for the distribution of Shares covered by, and in accordance with, the registration statement and prospectus then in effect under the Securities Act of 1933, as amended, and will transmit promptly any orders received by you for purchase or redemption of Shares to the Transfer and Dividend Disbursing Agent for the Fund of which the Fund has notified you in writing. 1.2 You agree to use your best efforts to solicit orders for the sale of Shares. It is contemplated that you may enter into sales or servicing agreements with securities dealers, financial institutions and other industry professionals, such as investment advisers, accountants and estate planning firms, and in so doing you will act only on your own behalf as principal. 1.3 You shall act as distributor of Shares in compliance with all applicable laws, rules and regulations, including, without limitations the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended and the National Association of Securities Dealers, Inc.'s (the "NASD") Rules of Fair Practice, Constitution and By-Laws. You represent and warrant that you are a broker-dealer registered with the Securities and Exchange Commission and that you are registered with the relevant securities regulatory agencies in all fifty states, the District of Columbia and Puerto Rico. You also represent and warrant that you are a member of the NASD. 1.4 You shall file Fund advertisements, sales literature and other marketing and sales related materials with the appropriate regulatory agencies and shall obtain such approvals for their use as may be required by the Securities and Exchange Commission, the National Association of Securities Dealers. Inc. and/or state securities administrators. 1.5 Whenever in their judgment such action is warranted by unusual market, economic or political conditions, or by abnormal circumstances of any kind deemed by the parties hereto to render sales of the Fund's Shares not in the best interest of the Fund, the parties hereto may decline to accept any orders for, or make any sales of, any Shares until such time as those parties deem it advisable to accept such orders and to make such sales and each party shall advise promptly the other party of any such determination. 1.6 The Fund agrees to pay all costs and expenses in connection with the registration of Shares under the Securities Act of 1933, as amended, and all expenses in connection with maintaining facilities for the issue and transfer of Shares and for supplying information, prices and other data to be furnished by the Fund hereunder, and Page 1 all expenses in connection with the preparation and printing of the Fund's prospectuses and statements of additional information for regulatory purposes and for distribution to shareholders; provided however, that the Fund shall not pay any of the costs of advertising or promotion for the sale of Shares. 1.7 The Fund agrees to execute any and all documents and to furnish any and all information and otherwise to take all actions which may be reasonably necessary in the discretion of the Fund's officers in connection with the qualification of Shares for sale in such states as you may designate to the Fund and the Fund may approve, and the Fund agrees to pay all expenses which may be incurred in connection with such qualification. You shall pay all expenses connected with your own qualification as a dealer under state or Federal laws and, except as otherwise specifically provided in this agreement, all other expenses incurred by you in connection with the sale of Shares as contemplated in this agreement. 1.8 The Fund shall furnish you from time to time, for use in connection with the sale of Shares, such information with respect to the Fund and the Shares as you may reasonably request, all of which shall be signed by one or more of the Fund's duly authorized officers; and the Fund warrants that the statements contained in any such information, when so signed by the Fund's officers, shall be true and correct. The Fund also shall furnish you upon request with: (a) semi-annual reports and annual audited reports of the Fund's books and accounts made by independent public accountants regularly retained by the Fund, (b) quarterly earnings statements prepared by the Fund, (c) a monthly itemized list of the securities in the Fund's or, if applicable, each Series' portfolio, (d) monthly balance sheets as soon as practicable after the end of each month, and (e) from time to time such additional information regarding the Fund's financial condition as you may reasonably request. 1.9 The Fund represents to you that all registration statements and prospectuses filed by the Fund with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and under the Investment Company Act of 1940, as amended, with respect to the Shares have been carefully prepared in conformity with the requirements of said Acts and rules and regulations of the Securities and Exchange Commission thereunder. As used in this agreement the terms "registration statement" and "prospectus" shall mean any registration statement and prospectus, including the statement of additional information incorporated by reference therein filed with the Securities and Exchange Commission and any amendments and supplements thereto which at any time shall have been filed with said Commission. The Fund represents and warrants to you that any registration statement and prospectus, when such registration statement becomes effective, will contain all statements required to be stated therein in conformity with said Acts and the rules and regulations of said Commission; that all statements of fact contained in any such registration statement and prospectus will be true and correct when such registration statement becomes effective; and that neither any registration statement nor any prospectus when such registration statement becomes effective will include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Fund may, but shall not be obligated to, propose from time to time such amendment or amendments to any registration statement and such supplement or supplements to any prospectus as, in the light of future developments, may, in the opinion of the Fund's counsel, be necessary or advisable. If the Fund shall not propose such amendment or amendments and/or supplement or supplements within fifteen days after receipt by the Fund of a written request from you to do so, you may, at your option, terminate this agreement or decline to make offers of the Fund's securities until such amendments are made. The Fund shall not file any amendment to any registration statement or supplement to any prospectus without giving you reasonable notice thereof in advance; provided, however, that nothing contained in this agreement shall in any way limit the Fund's right to file at any time such amendments to any registration statement and/or supplements to any prospectus, of whatever character, as the Fund may deem advisable, such right being in all respects absolute and unconditional. 1.10 The Fund authorizes you and any dealers with whom you have entered into dealer agreements to use any prospectus in the form furnished by the Fund in connection with the sale of Shares. The Fund agrees to indemnify, defend and hold you, your several officers and directors, and any person who controls you within the meaning of Section 15 of the Securities Act of 1933, as amended, free and harmless from and against any and all claims, demands, liabilities and expenses (including the reasonable cost of investigating or defending such claims, demands or liabilities and any reasonable counsel fees incurred in connection therewith) which you, your officers Page 1 and directors, or any such controlling persons, may incur under the Securities Act of 1933, as amended, the Investment Company Act of 1940, as amended, or common law or otherwise, arising out of or on the basis of any untrue statement, or alleged untrue statement, of a material fact required to be stated in either any registration statement or any prospectus or any statement of additional information, or arising out of or based upon any omission, or alleged omission, to state a material fact required to be stated in any registration statement, any prospectus or any statement of additional information or necessary to make the statements in any of them not misleading, except that the Fund's agreement to indemnify you, your officers or directors, and any such controlling person will not be deemed to cover any such claim, demand, liability or expense to the extent that it arises out of or is based upon any such untrue statement, alleged untrue statement, omission or alleged omission made in any registration statement, any prospectus or any statement of additional information in reliance upon information furnished by you, your officers, directors or any such controlling person to the Fund or its representatives for use in the preparation thereof, and except that the Fund's agreement to indemnify you and the Fund's representations and warranties set out in paragraph 1.9 of this Agreement will not be deemed to cover any liability to the Fund or its shareholders to which you would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of your duties, or by reason of your reckless disregard of your obligations and duties under this Agreement ("Disqualifying Conduct"). The Fund's agreement to indemnify you, your officers and directors, and any such controlling person, as aforesaid, is expressly conditioned upon the Fund's being notified of any action brought against you, your officers or directors, or any such controlling person, such notification to be given by letter, by facsimile or by telegram addressed to the Fund at its address set forth above within a reasonable period of time after the summons or other first legal process shall have been served. The failure so to notify the Fund of any such action shall not relieve the Fund from any liability which the Fund may have to the person against whom such action is brought by reason of any such untrue, or alleged untrue, statement or omission, or alleged omission, otherwise than on account of the Fund's indemnity agreement contained in this paragraph 1.10. The Fund will be entitled to assume the defense of any suit brought to enforce any such claim, demand or liability, but, in such case, such defense shall be conducted by counsel of good standing chosen by the Fund and approved by you. In the event the Fund elects to assume the defense of any such suit and retain counsel of good standing approved by you, the defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by any of them; but in case the Fund does not elect to assume the defense of any such suit, the Fund will reimburse you, your officers and directors, or the controlling person or persons named as defendant or defendants in such suit, for the reasonable fees and expenses of any counsel retained by you or them. The Fund's indemnification agreement contained in this paragraph 1.10 and the Fund's representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of you, your officers and directors, or any controlling person, and shall survive the delivery of any Shares. This agreement of indemnity will inure exclusively to your benefit, to the benefit of your several officers and directors, and their respective estates, and to the benefit of any controlling persons and their successors. The Fund agrees promptly to notify you of the commencement of any litigation or proceedings against the Fund or any of its officers or Board members in connection with the issue and sale of Shares. 1.11 You agree to indemnify, defend and hold the Fund, its several officers and Board members, and any person who controls the Fund within the meaning of Section 15 of the Securities Act of 1933, as amended, free and harmless from and against any and all claims, demands, liabilities and expenses (including the reasonable cost of investigating or defending such claims, demands or liabilities and any reasonable counsel fees incurred in connection therewith) which the Fund, its officers or Board members, or any such controlling person, may incur under the Securities Act of 1933, as amended, the Investment Company Act of 1940, as amended, or under common law or otherwise, but only to the extent that such liability or expense incurred by the Fund, its officers or Board members, or such controlling person resulting from such claims or demands, (a) shall arise out of or be based upon any unauthorized sales literature, advertisements, information, statements or representations or any Disqualifying Conduct in connection with the offering and sale of any Shares, or (b) shall arise out of or be based upon any untrue, or alleged untrue, statement of a material fact contained in information furnished in writing by you to the Fund specifically for use in the Fund's registration statement and used in the answers to any of the items of the registration statement or in the corresponding statements made in the prospectus or statement of additional information, or shall arise out of or be based upon any omission, or alleged omission, to state a material fact in connection with such information furnished in writing by you to the Fund and required to be stated in such answers Page 2 or necessary to make such information not misleading. Your agreement to indemnify the Fund, its officers and Board members, and any such controlling person, as aforesaid, is expressly conditioned upon your being notified of any action brought against the Fund, its officers or Board members, or any such controlling person, such notification to be given by letter, by facsimile or by telegram addressed to you at your address set forth above within a reasonable period of time after the summons or other first legal process shall have been served. You shall have the right to control the defense of such action, with counsel of your own choosing, satisfactory to the Fund, if such action is based solely upon such alleged misstatement or omission on your part, and in any other event the Fund, its officers or Board members, or such controlling person shall each have the right to participate in the defense or preparation of the defense of any such action. The failure so to notify you of any such action shall not relieve you from any liability which you may have to the Fund, its officers or Board members, or to such controlling person by reason of any such untrue, or alleged untrue, statement or omission, or alleged omission, otherwise than on account of your indemnity agreement contained in this paragraph 1.11. This agreement of indemnity will inure exclusively to the Fund's benefit, to the benefit of the Fund's officers and Board members, and their respective estates, and to the benefit of any controlling persons and their successors. You agree promptly to notify the Fund of the commencement of any litigation or proceedings against you or any of your officers or directors in connection with the issue and sale of Shares. 1.12 No Shares shall be offered by either you or the Fund under any of the provisions of this agreement and no orders for the purchase or sale of such Shares hereunder shall be accepted by the Fund if and so long as the effectiveness of the registration statement then in effect or any necessary amendments thereto shall be suspended under any of the provisions of the Securities Act of 1933, as amended, or if and so long as a current prospectus as required by Section 10 of said Act, as amended, is not on file with the Securities and Exchange Commission; provided, however, that nothing contained in this paragraph 1.12 shall in any way restrict or have an application to or bearing upon the Fund's obligation to repurchase any Shares from any shareholder in accordance with the provisions of the Fund's prospectus or charter documents. 1.13 The Fund agrees to advise you immediately in writing: (a) of any request by the Securities and Exchange Commission for amendments to the registration statement or prospectus then in effect or for additional information; (b) in the event of the issuance by the Securities and Exchange Commission of any stop order suspending the effectiveness of the registration statement or prospectus then in effect or the initiation of any proceeding for that purpose; (c) of the happening of any event which makes untrue any statement of a material fact made in the registration statement or prospectus then in effect or which requires the making of a change in such registration statement or prospectus in order to make the statements therein not misleading; and (d) of all actions of the Securities and Exchange Commission with respect to any amendments to any registration statement or prospectus which may from time to time be filed with the Securities and Exchange Commission. 2. Offering Price Shares of any class of the Fund offered for sale by you shall be offered at a price per share (the "offering price") approximately equal to (a) the net asset value (determined in the manner set forth in the Fund's charter documents) plus (b) a sales charge, if any and except to those persons set forth in the then-current prospectus, which shall be the percentage of-the offering price of such Shares as set forth in the Fund's then-current prospectus. The offering price, if not an exact multiple of one cent, shall be adjusted to the nearest cent. In addition, Shares of any class of the Fund offered for sale by you may be subject to a contingent deferred sales charge as set forth in the Fund's then-current prospectus. You shall be entitled to receive any sales charge or Page 3 contingent deferred sales charge in respect of the Shares. Any payments to dealers shall be governed by a separate agreement between you and such dealer and the Fund's then-current prospectus. 3. Term This Agreement shall become effective with respect to the Fund as of the date hereof and will continue for an initial two-year term and will continue thereafter so long as such continuance is specifically approved at least annually (i) by the Fund's Board or (ii) by a vote of a majority of the Shares of the Fund, provided that in either event its continuance also is approved by a majority of the Board members who are not "interested persons" of any party to this Agreement, by vote cast in person at a meeting called for the , purpose of voting on such approval. This agreement is terminable with respect to a Fund, without penalty, on not less than sixty days' notice, by the Fund's Board of Directors, by vote of a majority of the outstanding voting securities of the Fund, or by you. This Agreement will automatically and immediately terminate in the event of its "assignment." (As used in this Agreement, the terms "majority of the outstanding voting securities," "interested person" and "assignment" shall have the same meanings as such terms have in the Investment Company Act of 1940). You agree to notify the Fund immediately upon the event of your expulsion or suspension by the NASD. This Agreement will automatically and immediately terminate in the event of your expulsion or suspension by the NASD. 4. Miscellaneous 4.1 The Fund recognizes that, except to the extent otherwise agreed to by the parties hereto, your directors, officers and employees may from time to time serve as directors, trustees, officers and employees of corporations and business trusts (including other investment companies), and that you or your affiliates may enter into distribution or other agreements with such other corporations and trusts. 4.2 No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which an enforcement of the change, waiver, discharge or termination is sought. 4.3 This Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts without giving effect to principles of conflicts of laws. 4.4 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. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. Please confirm that the foregoing is in accordance with your understanding and indicate your acceptance hereof by signing below, whereupon it shall become a binding agreement between us. Very truly yours, DRESDNER RCM INVESTMENT FUNDS INC. By: ------------------------ Name: ---------------------- Title: --------------------- Page 4 Accepted: FUNDS DISTRIBUTOR, INC. By: ------------------- Name: ----------------- Title: ---------------- Page 5 EX-99.23(H)(1) 8 EXHIBIT 99.23(H)(1) EXHIBIT 99.23(h)(1) FORM OF SERVICE AGREEMENT AGREEMENT made this _____ day of _______________, 1999 by and among Dresdner RCM Global Investors LLC ("Dresdner RCM"), a California limited liability company, Dresdner RCM Investment Funds Inc. an open end management investment company (the "Company"), and Funds Distributor, Inc. ("FDI"), a Massachusetts corporation. WHEREAS, Dresdner RCM serves as investment adviser to and provides certain administrative services for the Company, which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), and which is comprised of the investment series listed on Schedule A, as such Schedule shall be automatically amended from time to time (each a "Fund," collectively, the "Funds"); WHEREAS, the Company has entered into a distribution agreement with FDI (the "Distribution Agreement") for the distribution by FDI of shares of common stock (the "Shares") in the Company or in a Fund; WHEREAS, in furtherance of FDI's duties and responsibilities as set forth in the Distribution Agreement, one or more employees of FDI (who may be registered with the National Association of Securities Dealers ("NASD") as representatives of FDI), shall be based in an FDI branch office (an Office of Supervisory Jurisdiction as defined by the NASD's Rules of Fair Practice) in San Francisco (such FDI employees shall hereinafter be referred to as "Registered Representatives"); WHEREAS, such Registered Representatives shall provide marketing and sales services to the Company pursuant to the Distribution Agreement; WHEREAS, Dresdner RCM, the Company and FDI desire to enter into this Agreement pursuant to which FDI will perform certain administrative services for the Company and for Dresdner RCM with respect to each Fund; NOW THEREFORE, in consideration of the mutual agreements herein contained, the parties agree as follows: 1. SERVICES PROVIDED BY FDI. FDI will assist the Company and Dresdner RCM in providing services with respect to each Fund as may be reasonably requested by the Company or Dresdner RCM from time to time. To the extent consistent with FDI's compensation hereunder and at the direction of the Company or Dresdner RCM specific assignments may include: (a) The provision of the following advice and assistance to the Company, and/or to Dresdner RCM: (i) advice with regard to various compliance requirements under the 1940 Act; and (ii) assistance in the resolution of technical issues of a compliance or non-compliance nature; (b) Gathering of information deemed necessary by the Company and/or Dresdner RCM to support: (i) required state regulatory filings and (ii) required federal regulatory filings; (c) As mutually agreed to by the parties hereto, the preparation of statistical and research data; (d) The provision of advice and counsel to the Company and/or Dresdner RCM with respect to regulatory matters, including monitoring regulatory and legislative developments that may affect the Funds and assisting the Company in routine regulatory examinations or investigations; (e) Assistance in the Company's operations and provision of general consulting services on a day to day, as needed basis; (f) Legal review of all Fund marketing materials and other sales related materials to ensure compliance with the advertising rules of the relevant regulatory authorities; (g) As mutually agreed to by the parties hereto, provision of services with regard to advertising, marketing and promotional activities including but not limited to: (i) developing information, analysis and reports, (ii) preparing, printing and distributing sales literature brochures, letters, training materials and dealer guides and all similar materials and advertisements as defined below, (iii) developing and implementing audio and video advertising programs, (iv) arranging and paying for the printing and distribution of prospectuses and reports of the Funds to prospective shareholders, (v) arranging and paying for telemarketing services and (vi) arranging and paying for fulfillment services. Without limiting the generality of Section 18 hereof, all Fund advertisements, sales literature, prospectuses and shareholder reports shall state that the distributor of the Fund is "Dresdner RCM Distributors, a division of Funds Distributor, Inc." For purposes of this Agreement "sales literature" and "advertisements" mean brochures, letters, training materials and dealers' guides, materials for oral presentations and all other similar materials, whether transmitted directly to potential shareholders or published in print or audio-visual media, but does not include generic materials that do not mention the Funds or the Shares; (h) Use of reasonable efforts, in cooperation with Dresdner RCM, to resolve as of trades with respect to Shares of the Funds in order to mitigate the risk of loss to FDI, Dresdner RCM, and the Company from such as of trades; (i) In connection with the foregoing activities, maintenance of an office facility (which may be in the offices of FDI or a corporate affiliate); (j) In connection with the foregoing activities, the furnishing of clerical services and internal executive and administrative services, stationery and office supplies; and (k) The provision of officers to the Company including, but not limited to, President, Vice Presidents, Secretary, Assistant Secretaries, Treasurer and Assistant Treasurers to assume certain specified responsibilities. 2. SERVICES PROVIDED BY DRESDNER RCM AND THE COMPANY . In furtherance of the responsibilities under this Agreement Dresdner RCM and the Company will: (a) Cause the Company's administrator to furnish any and all information and assist FDI in taking any other actions that may be reasonably necessary in connection with (i) registration of the Shares under the Securities Act of 1933 (the "1933 Act") and (ii) the qualification for the Shares for sale in those states that the Funds and FDI may designate; (b) Cause the Company's administrator to monitor sales of the Shares to assure compliance with applicable state securities laws; (c) Report or cause the Company's transfer agent to provide sales-related complaints to FDI and consult with FDI concerning the manner in which such complaints will be addressed; (d) If applicable, cause the Company's transfer agent to give necessary information for the preparation of quarterly reports in a form satisfactory to FDI regarding Rule 12b-1 fees, front-end sales loads, back-end sales loads and other data regarding sales and sales loads as required by the 1940 Act or as requested by the board of directors of the Company; (e) If applicable, cause the Company's transfer agent to provide FDI with all necessary historical information so that FDI can calculate the maximum sales charges payable by the Funds pursuant to the Rules of Fair Practice of the NASD and the actual sales charges paid by the Funds; cause the Company's and the Corporation's transfer agent to provide FDI with all of the ongoing necessary information so that FDI can calculate the maximum sales charges payable by the Funds pursuant to the Rules of Fair Practice of the NASD and the actual sales charges paid by the Funds; and cause the Company's transfer agent to provide such information in a form satisfactory to FDI no less often than monthly for every Fund and on a daily basis for any Fund for which FDI determines that the remaining NASD sales change limit is approaching zero; (f) Support or cause the Company's transfer agent to support the servicing of the shareholders and, in connection therewith, provide or cause the Company's transfer agent to provide one or more persons during normal business hours to respond to telephone questions concerning the Funds' shareholders' accounts; (g) Provide FDI with copies of, or access to, any documents that FDI may reasonably request and notify FDI as soon as possible of any matter materially affecting FDI's performance of its services under this Agreement. (h) Report to FDI, to the extent that Dresdner RCM or the Company are aware of, any and all actions or inactions by any Registered Representative or securities dealers, financial institutions and other industry professionals such as investment advisers and estate planning firms that have entered into agreements with FDI for the solicitation of Fund Shares (collectively referred to herein as "Selling Broker Dealers") that (i) fail to comply with the terms of any selling agreements, (ii) violate any applicable laws of any governmental authorities, including the NASD's Rules of Fair Practice, or (iii) violate any other agreement or procedure with which such Selling Broker-Dealer or Registered Representative is required to comply; and (i) Submit the form of confirmation statement to be used for sale of the Shares to FDI for its approval and cause the Company's transfer agent to provide to customers of the Selling Broker-Dealers ("Customers") and to the Selling Broker-Dealers such confirmations of all transactions in the Shares as may be required by the 1934 Act and the selling agreements, and (ii) use reasonable efforts to monitor the Company's transfer agent and the Corporation's transfer agent in its preparation and mailing of such confirmations regarding the sales of the Shares and report to FDI any deficiencies of which Dresdner RCM, the Company, or the Corporation are aware in the transfer agent's performance of such activities. In addition, as soon as practicable after the effective date of this Agreement, Dresdner RCM shall sublease office space to FDI for the Office of Supervisory Jurisdiction. The terms of the sublease shall be subject to a final agreement as negotiated by Dresdner RCM and FDI. 3. COMPENSATION. (a) For the services to be rendered and expenses to be assumed by FDI under this Agreement, each Fund will pay to FDI, for its services, a fee in accordance with the terms set forth in the Fee Letter Agreement dated as of ____________ ____, 1999 by and among FDI, Dresdner RCM and the Company as the same may be amended from time to time (the "Fee Letter Agreement"). FDI shall bear all expenses in connection with the performance of its services under this Agreement except those enumerated in the Fee Letter Agreement. (b) FDI will employ certain persons listed on Schedule B, as such schedule may be amended from time to time, who shall be exclusively dedicated to the sales and marketing activities of the Company and/or the Corporation. In addition to those persons listed in Schedule B, FDI will from time to time employ or associate with itself such person or persons as FDI may believe to be particularly suited to assist it in performing services under this Agreement. Such person or persons may be officers and employees who are employed by both FDI (and/or an affiliated company) and the Company. The compensation of such person or persons shall be paid by FDI or a corporate affiliate of FDI and no obligation shall be incurred on behalf of the Company, or Dresdner RCM in such respect. (c) FDI acknowledges and agrees that any expenditures and obligations of a Fund pursuant to this Section 3 and Section 6 hereof shall be enforceable only against the assets and property of such Fund and not against the assets and property of any other Fund of the Company of which it is a series. (d) Dresdner RCM shall promptly reimburse the Company, and shall indemnify and hold each of them and each of the Funds harmless from and against, all expenditures and obligations of the Company pursuant to this Section 3. Such reimbursement shall be made within one (1) business day after delivery by the Company, as the case may be, to Dresdner RCM of reasonably satisfactory evidence of such expenditure or satisfaction of such obligation. Dresdner RCM acknowledges and agrees that, in the event it fails to pay any reimbursement when due with respect to a Fund, the amount of such unpaid reimbursement shall be offset by the Company, as the case may be, against the advisory fees payable by it to Dresdner RCM with respect to such Fund. 4. EFFECTIVE DATE. This Agreement shall become effective with respect to a Fund as of the date first written above (or, if a particular Fund is not in existence on that date, on the date Funds Distributor, Inc. becomes the distributor of the shares of such Fund; in which case Schedule A to this Agreement shall be deemed amended to include such Fund from and after such date). 5. TERM. This Agreement shall continue for an initial one-year period and shall continue thereafter for successive one-year terms unless notice not to renew is given by the non-renewing party to the other parties at least 60 days prior to the expiration of the then current term. This Agreement shall automatically terminate if: (i) FDI ceases to be the distributor of all of the Funds under the Distribution Agreements; or (ii) Dresdner RCM ceases to be the investment adviser to all of the Funds. 6. STANDARD OF CARE AND INDEMNIFICATION. (a) The Company, shall cause each Fund to: (i) indemnify and hold harmless FDI and Dresdner RCM against any losses, claims, damages or liabilities, or actions in respect thereof, to which FDI or Dresdner RCM may become subject, including amounts paid in settlement with the prior written consent of the Company, insofar as such losses, claims, damages or liabilities, or actions in respect thereof, arise out of or result from the failure of the Company, as the case may be, to comply with the terms of this Agreement with respect to any Fund; and (ii) reimburse FDI and Dresdner RCM for reasonable legal or other expenses reasonably incurred by FDI or Dresdner RCM in connection with investigating or defending against any such loss, claim, damage, liability or action. A Fund shall not be liable to FDI or Dresdner RCM for any action taken or omitted by FDI or Dresdner RCM in bad faith, with willful misfeasance, with gross negligence or in reckless disregard by FDI or Dresdner RCM of its obligations and duties. The indemnities in this Section shall, upon the same terms and conditions, extend to and inure to the benefit of each of the directors and officers of FDI and Dresdner RCM and any person controlling FDI or Dresdner RCM within the meaning of Section 15 of the 1933 Act or Section 20 of the Securities Exchange Act of 1934 (the "1934 Act"). (b) FDI will: (i) indemnify and hold harmless each Fund and Dresdner RCM against any losses, claims, damages or liabilities, or actions in respect thereof, to which a Fund or Dresdner RCM may become subject, including amounts paid in settlement with the prior written consent of FDI, insofar as such losses, claims, damages or liabilities, or actions in respect thereof, arise out of or result from the failure of FDI to comply with the terms of this Agreement; and (ii) reimburse each Fund and Dresdner RCM for reasonable legal or other expenses reasonably incurred by such Fund or Dresdner RCM in connection with investigating or defending against any such loss, claim, damage, liability or action. FDI shall not be liable to a Fund or Dresdner RCM for any action taken or omitted by such Fund or Dresdner RCM in bad faith, with willful misfeasance, with gross negligence or in reckless disregard by such Fund or Dresdner RCM of its obligations and duties. The indemnities in this Section shall, upon the same terms and conditions, extend to and inure to the benefit of each of the directors and officers of each of the Company and Dresdner RCM and any person controlling the Company or Dresdner RCM within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act. (c) Dresdner RCM will:(i) indemnify and hold harmless each Fund and FDI against any losses, claims, damages or liabilities, or actions in respect thereof, to which a Fund or FDI may become subject, including amounts paid in settlement with the prior written consent of Dresdner RCM, insofar as such losses, claims, damages or liabilities, or actions in respect thereof, arise out of or result from (A) the failure of Dresdner RCM to comply with the terms of this Agreement, or (B) any obligation of the Corporation or the Company, as the case may be, to FDI pursuant to Section 1.10 of the Distribution Agreement, to the extent such obligation arises out of or is based upon any untrue statement, alleged untrue statement, omission or alleged omission made in reliance upon information furnished by Dresdner RCM, its officers, directors or any person who controls Dresdner RCM within the meaning of Section 15 of the 1933 Act; and (ii) reimburse each Fund and FDI for reasonable legal or other expenses reasonably incurred by such Fund or FDI in connection with investigating or defending against any such loss, claim, damage, liability or action. Dresdner RCM shall not be liable to a Fund or FDI for any action taken or omitted by such Fund or FDI in bad faith, with willful misfeasance, with gross negligence or in reckless disregard by such Fund or FDI of its obligations and duties. The indemnities in this Section shall, upon the same terms and conditions, extend to and inure to the benefit of each of the directors and officers of each of the Company, FDI and any person controlling the Company or FDI within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act. (d) (i) Promptly after an indemnified party (or, if such indemnified party is not a natural person, a responsible officer of such indemnified party) receives notice or otherwise becomes aware of the commencement of any action or other assertion of any losses, claims, damages or liabilities by any third party, such indemnified party shall, if a claim in respect thereof is to be made pursuant to this Section 6, notify the indemnitor of the same in writing (such notice, a "claim notice"); but the omission so to notify the indemnitor will not relieve the indemnitor from any liability that it may have to such indemnified party otherwise than under this Section 6. The failure of an indemnified party to promptly send a claim notice shall not relieve the indemnitor from any liability except to the extent that the indemnitor shall have been prejudiced as a result of the failure or delay in giving such claim notice. In the event that the indemnified party notifies the indemnitor in writing of its waiver of any right to indemnification pursuant to this Section 6 in respect of any losses, claims, damages or liabilities or portion thereof, the provisions of clause (ii) of this Section 6(d) shall not apply. (ii) Promptly following receipt of a claim notice, the indemnitor, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnitor may designate in contesting such losses, claims, damages or liabilities and shall pay the reasonable fees and disbursements of such counsel related to such contest. In any such contest, any indemnified party shall have the right to retain its own counsel, but the reasonable fees and expenses of such counsel shall be at the expense of such indemnified party unless (A) the indemnitor and the indemnified party shall have mutually agreed to the retention of such counsel or (B) the named parties to any such contest (including any impleaded parties) include both the indemnitor (or any other parties the indemnitor may designate) and the indemnified party and representation of all such parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnitor shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm for all such indemnified parties. The indemnitor may, at its option, at any time upon written notice to the indemnified party, assume the responsibility for contesting any losses, claims, damages or liabilities and may designate counsel reasonably satisfactory to the indemnified party in connection therewith, provided that the counsel so designated would have no actual or potential conflict of interest in connection with such representation. Unless it shall assume the responsibility for contesting any losses, claims, damages or liabilities, the indemnitor shall not be liable for any settlement or compromise of such losses, claims, damages or liabilities or portion thereof, which settlement or compromise is effected without its written consent (which shall not be unreasonably withheld), but if settled or compromised with such consent or if there be a final judgment for the plaintiff asserting such losses, claims or liabilities, the indemnitor agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement, compromise or judgment. If the indemnitor assumes responsibility for contesting any losses, claims, damages or liabilities, it shall be entitled to settle or compromise such losses, claims, damages or liabilities or portion thereof with the consent of the indemnified party (which shall not be unreasonably withheld) or, if such settlement or compromise provides for release of the indemnified party in connection with all matters relating to such losses, claims, damages or liabilities, or, with respect to the settlement or compromise of a portion of such losses, claims, damages or liabilities, all matters relating to such portion of such losses, claims, damages or liabilities, that have been asserted against the indemnified party by the other parties to such settlement or compromise, without the consent of the indemnified party. In the event that any expense paid by the indemnitor pursuant to this Section 6(d) is subsequently determined to not be required to be borne by the indemnitor, the indemnified party that received such payment shall promptly refund the amount so paid to the indemnitor. If the indemnitor assumes responsibility for contesting any losses, claims, damages or liabilities, the indemnitor shall keep the indemnified party apprised, on a current basis, of matters concerning such contest, including without limitation (i) providing the indemnified party with reasonable notice of and opportunity to be present in person and/or by counsel at proceedings or discussions of settlement or compromise; (ii) providing the indemnified party with copies of and opportunity to comment on filings, papers or settlement agreements proposed to be filed or served by or on behalf of the indemnitor; and (iii) providing the indemnified party with copies of filings, papers and proposed settlement agreements received by the indemnitor from or on behalf of persons asserting such losses claims, damages or liabilities. (e) If the indemnification provided for in Section 6(a), (b) or (c) shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 6(a), (b) or (c) in respect of any claim, demand, liability or expense, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount pa or payable by such indemnified party as a result of such claim, demand, liability or expense, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by such party, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of each party with respect to the matters that give rise to such claim, demand, liability or expense, or action in respect thereof, as well as any other relevant equitable considerations. The parties agree that it would not be just and equitable if contributions pursuant to this Section 6(e) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the claim, demand, liability or expense, or action in respect thereof, referred to above in this Section 6(e) shall be deemed to include, for purposes of this Section 6(e), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6(e), FDI shall not be required to contribute any amount in excess of (i) the total net underwriting discounts and commissions received by FDI with respect to the Shares sold under the Distribution Agreements and retained by FDI after payments to the Selling Broker Dealers; plus (ii) the amount of total "Excess Amount" compensation received by FDI with respect to Fee Letter Agreement as such term is defined in the Fee Letter Agreement. No person guilty of fraudulent misrepresentation (within the meaning of Section 1 l(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (f) The obligation to indemnify and provide contribution pursuant to this Section 6 shall survive the termination of this Agreement. (g) All notices to or consents by a Fund or the Company pursuant to this Section 6 shall be given to or made by the board of directors of the Company, as the case may be. 7. RECORD RETENTION AND CONFIDENTIALITY. FDI shall keep and maintain on behalf of the Company all books and records which the Company and FDI are, or may be, required to keep and maintain in connection with the services to be provided hereunder pursuant to any applicable statutes, rules and regulations, including without limitation Rules 31a-1 and 31a-2 under the 1940 Act. FDI further agrees that all such books and records shall be the respective property of the Company and FDI shall make such respective books and records available for inspection by the Company, Dresdner RCM, their independent accountants and agents and the Securities and Exchange Commission at reasonable times and otherwise keep confidential all books and records and other information relative to the Company and their shareholders, except when requested to divulge such information by duly-constituted authorities or court process; provided, however, that upon receiving notice to divulge any such information which is not in the opinion of FDI or its counsel clearly required to be disclosed by the 1940 Act and the rules and regulations thereunder, FDI shall promptly provide notice to the board of directors of the Company and/or the Corporation and shall cooperate with the Company and/or the Corporation with their efforts, if any, to contest the request to divulge such information. 8. RIGHTS OF OWNERSHIP. All computer programs and procedures developed by FDI to perform the services to be provided by FDI under this Agreement are the property of FDI. All records and other data except such computer programs and procedures are the exclusive property of the Company or the Corporation and all such other records and data will be furnished to Dresdner RCM, the Company and/or the Corporation in appropriate form as soon as practicable after termination of this Agreement for any reason. 9. RETURN OF RECORDS. FDI may at its option at any time, and shall promptly upon the demand of Dresdner RCM and/or the Company, turn over to Dresdner RCM and the Company and cease to retain FDI's files, records and documents created and maintained by FDI pursuant to this Agreement which are no longer needed by FDI in the performance of its services or for its legal protection. If not so turned over to Dresdner RCM, and/or the Company, such documents and records will be retained by FDI for six years from the year of creation. At the end of such six-year period, such records and documents will be turned over to Dresdner RCM, and/or the Company unless Dresdner RCM and/or the Company authorizes in writing the destruction of such records and documents. 10. REPRESENTATIONS OF DRESDNER RCM. Dresdner RCM represents and warrants that this Agreement has been duly authorized by Dresdner RCM and, when executed and delivered by Dresdner RCM, will constitute a legal, valid and binding obligation of Dresdner RCM, enforceable against Dresdner RCM in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties. 11. REPRESENTATIONS OF THE COMPANY. The Company represents and warrants that this Agreement has been duly authorized by the Company and, when executed and delivered by the Company, will constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties. 12. REPRESENTATIONS OF FDI. FDI represents and warrants that this Agreement has been duly authorized by FDI and, when executed and delivered by the FDI, will constitute a legal, valid and binding obligation of FDI, enforceable against FDI in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting the rights and remedies of creditors and secured parties. 13. NOTICES. Any notice provided hereunder shall be sufficiently given when sent by registered or certified mail to Dresdner RCM at the following address: Dresdner RCM Global Investors LLC, 4 Embarcadero Center, San Francisco, CA 94111, Attention: President with a copy to the General Counsel; to the Company at the following address: 4 Embarcadero Center, San Francisco, CA 94111, Attention: President with a copy to the Secretary; and to FDI at the following address: 60 State Street, Suite 1300, Boston, MA 02109, Attention: President with a copy to the General Counsel, or at such other address as either party may from time to time specify in writing to the other party pursuant to this Section. 14. HEADINGS. Paragraph headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement. 15. ASSIGNMENT. This Agreement and the rights and duties hereunder shall not be assignable by any of the parties hereto except by the specific written consent of all parties hereto. 16. GOVERNING LAW. This Agreement shall be governed by and provisions shall be construed in accordance with the laws of The Commonwealth of Massachusetts. 17. CONDUCT OF BUSINESS. All actions to be performed by FDI under the Distribution Agreements and under this Agreement shall be conducted by Dresdner RCM Distributors, a division of Funds Distributors, Inc. 18. AMENDMENTS. This Agreement (except Schedule A which may be automatically amended from time to time) may be amended only by a written instrument signed by all parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed all as of the day and year first above written. DRESDNER RCM GLOBAL INVESTORS LLC By: ------------------------------- Name: ----------------------------- Title: ---------------------------- DRESDNER RCM INVESTMENT FUNDS INC. By: ------------------------------- Name: ----------------------------- Title: ---------------------------- FUNDS DISTRIBUTOR, INC. By: ------------------------------- Name: ----------------------------- Title: ---------------------------- Dated: February__, 1999 SCHEDULE A Dresdner RCM Europe Fund Inc. SCHEDULE B None as of February __, 1999 EX-99.23(H)(2) 9 EXHIBIT 99.23(H)(2) EXHIBIT 99.23(h)(2) FORM OF TRANSFER AGENCY AND SERVICE AGREEMENT between DRESDNER RCM INVESTMENT FUNDS INC. and STATE STREET BANK AND TRUST COMPANY TABLE OF CONTENTS Page 1. Terms of Appointment and Duties . . . . . . . . . . . . . . . . . . . .1 2. Third Party Administrators for Defined Contribution Plans . . . . . . .3 3. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .4 4. Representations and Warranties of the Transfer Agent . . . . . . . . .5 5. Representations and Warranties of the Fund . . . . . . . . . . . . . .5 6. Wire Transfer Operating Guidelines. . . . . . . . . . . . . . . . . . .6 7. Data Access and Proprietary Information . . . . . . . . . . . . . . . .7 8. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 9. Standard of Care . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10. Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 11. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 12. Covenants of the Fund and the Transfer Agent . . . . . . . . . . . . 11 13. Termination of Agreement. . . . . . . . . . . . . . . . . . . . . . . 11 14 Assignment and Third Party Beneficiaries . . . . . . . . . . . . . . 12 15. Subcontractors . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 16. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 17. Additional Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . 14 i TRANSFER AGENCY AND SERVICE AGREEMENT AGREEMENT made as of the ______ day of ______________, 1999, by and between DRESDNER RCM INVESTMENT FUNDS INC., a Maryland corporation, having its principal office and place of business at 4 Embarcadero, San Francisco, California 94111 (the "Fund"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company having its principal office and place of business at 225 Franklin Street, Boston, Massachusetts 02110 (the "Transfer Agent"). WHEREAS, the Fund is authorized to issue shares in separate series, with each such series representing interests in a separate portfolio of securities and other assets; and WHEREAS, the Fund intends to initially offer shares in one (1) series, such series shall be named in the attached Schedule A which may be amended by the parties from time to time (each such series, together with all other series subsequently established by the Fund and made subject to this Agreement in accordance with Article 13, being herein referred to as a "Portfolio", and collectively as the "Portfolios"); WHEREAS, the Fund on behalf of the Portfolios desires to appoint the Transfer Agent as its transfer agent, dividend disbursing agent, custodian of certain retirement plans and agent in connection with certain other activities, and the Transfer Agent desires to accept such appointment; NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows: 1. TERMS OF APPOINTMENT AND DUTIES 1.1 Transfer Agency Services. Subject to the terms and conditions set forth in this Agreement, the Fund, on behalf of the Portfolios, hereby employs and appoints the Transfer Agent to act as, and the Transfer Agent agrees to act as its transfer agent for the Fund's authorized and issued shares of its common stock, $.001 par value, ("Shares"), dividend disbursing agent, custodian of certain retirement plans and agent in connection with any accumulation, open-account or similar plan provided to the shareholders of each of the respective Portfolios of the Fund ("Shareholders") and set out in the currently effective prospectus and statement of additional information ("prospectus") of the Fund on behalf of the applicable Portfolio, including without limitation any periodic investment plan or periodic withdrawal program. In accordance with procedures established from time to time by agreement between the Fund on behalf of each of the Portfolios, as applicable and the Transfer Agent, the Transfer Agent agrees that it will perform the following services: (a) Receive for acceptance, orders for the purchase of Shares, and promptly deliver payment and appropriate documentation thereof to the Custodian of the Fund authorized pursuant to the Articles of Incorporation of the Fund (the "Custodian"); (b) Pursuant to purchase orders, issue the appropriate number of Shares and hold such Shares in the appropriate Shareholder account; (c) Receive for acceptance redemption requests and redemption directions and deliver the appropriate documentation thereof to the Custodian; Page 1 (d) In respect to the transactions in items (i), (ii) and (iii) above, the Transfer Agent shall execute transactions directly with broker-dealers authorized by the Fund; (e) At the appropriate time as and when it receives monies paid to it by the Custodian with respect to any redemption, pay over or cause to be paid over in the appropriate manner such monies as instructed by the redeeming Shareholders; (f) Effect transfers of Shares by the registered owners thereof upon receipt of appropriate instructions; (g) Prepare and transmit payments for dividends and distributions declared by the Fund on behalf of the applicable Portfolio; (h) Issue replacement certificates for those certificates alleged to have been lost, stolen or destroyed upon receipt by the Transfer Agent of indemnification satisfactory to the Transfer Agent and protecting the Transfer Agent and the Fund, and the Transfer Agent at its option, may issue replacement certificates in place of mutilated stock certificates upon presentation thereof and without such indemnity; (i) Maintain records of account for and advise the Fund and its Shareholders as to the foregoing; and (j) Record the issuance of Shares of the Fund and maintain pursuant to SEC Rule 17Ad-10(e) a record of the total number of Shares of the Fund which are authorized, based upon data provided to it by the Fund, and issued and outstanding. The Transfer Agent shall also provide the Fund on a regular basis with the total number of Shares which are authorized and issued and outstanding and shall have no obligation, when recording the issuance of Shares, to monitor the issuance of such Shares or to take cognizance of any laws relating to the issue or sale of such Shares, which functions shall be the sole responsibility of the Fund. 1.2 Additional Services. In addition to, and neither in lieu nor in contravention of, the services set forth in the above paragraph, the Transfer Agent shall perform the following services: (a) OTHER CUSTOMARY SERVICES. Perform the customary services of a transfer agent, dividend disbursing agent, custodian of certain retirement plans and, as relevant, agent in connection with accumulation, open-account or similar plan (including without limitation any periodic investment plan or periodic withdrawal program), including but not limited to: maintaining all Shareholder accounts, preparing Shareholder meeting lists, mailing Shareholder proxies, Shareholder reports and prospectuses to current Shareholders, withholding taxes on U.S. resident and non-resident alien accounts, preparing and filing U.S. Treasury Department Forms 1099 and other appropriate forms required with respect to dividends and distributions by federal authorities for all Shareholders, preparing and mailing confirmation forms and statements of account to Shareholders for all purchases and redemptions of Shares and other confirmable transactions in Shareholder accounts, preparing and mailing activity statements for Shareholders, and providing Shareholder account information. Page 2 (b) CONTROL BOOK (ALSO KNOWN AS "SUPER SHEET"). Maintain a daily record and produce a daily report for the Fund of all transactions and receipts and disbursements of money and securities and deliver a copy of such report for the Fund for each business day to the Fund no later than 9:00 AM Eastern Time, or such earlier time as the Fund may reasonably require, on the next business day; (c) "BLUE SKY" REPORTING. The Fund shall (i) identify to the Transfer Agent in writing those transactions and assets to be treated as exempt from blue sky reporting for each State; and (ii) verify the establishment of transactions for each State on the system prior to activation and thereafter monitor the daily activity for each State. The responsibility of the Transfer Agent for the Fund's blue sky State registration status is solely limited to the initial establishment of transactions subject to blue sky compliance by the Fund and providing a system which will enable the Fund to monitor the total number of Shares sold in each State; (d) NATIONAL SECURITIES CLEARING CORPORATION (THE "NSCC"). (i) accept and effectuate the registration and maintenance of accounts through Networking and the purchase, redemption, transfer and exchange of shares in such accounts through Fund/SERV (networking and Fund/SERV being programs operated by the NSCC on behalf of NSCC's participants, including the Fund), in accordance with, instructions transmitted to and received by the Transfer Agent by transmission from NSCC on behalf of broker-dealers and banks which have been established by, or in accordance with the instructions of authorized persons, as hereinafter defined on the dealer file maintained by the Transfer Agent; (ii) issue instructions to Fund's banks for the settlement of transactions between the Fund and NSCC (acting on behalf of its broker-dealer and bank participants); (iii) provide account and transaction information from the affected Fund's records on DST Systems, Inc. computer system TA2000 ("TA2000 System") in accordance with NSCC's Networking and Fund/SERV rules for those broker-dealers; and (iv) maintain Shareholder accounts on TA2000 System through Networking. (e) NEW PROCEDURES. New procedures as to who shall provide certain of these services in Section 1 may be established in writing from time to time by agreement between the Fund and the Transfer Agent. The Transfer Agent may at times perform only a portion of these services and the Fund or its agent may perform these services on the Fund's behalf. (f) ADDITIONAL TELEPHONE SUPPORT SERVICES. If the parties elect to have the Transfer Agent provide ADDITIONAL telephone support services under this Agreement, the parties will agree to such services, fees and sub-contracting as stated in Schedule 1.2(f) entitled "Telephone Support Services" attached hereto. 2. THIRD PARTY ADMINISTRATORS FOR DEFINED CONTRIBUTION PLANS 2.1 The Fund may decide to make available to certain of its customers, a qualified plan program (the "Program") pursuant to which the customers ("Employers") may adopt certain plans of deferred compensation ("Plan or Plans") for the benefit of the individual Plan participant (the "Plan Participant"), such Plan(s) being qualified under Section 401(a) Page 3 of the Internal Revenue Code of 1986, as amended ("Code") and administered by third party administrators which may be plan administrators as defined in the Employee Retirement Income Security Act of 1974, as amended)(the "TPA(s)"). 2.2 In accordance with the procedures established in the initial Schedule 2.1 entitled "Third Party Administrator Procedures", as may be amended by the Transfer Agent and the Fund from time to time ("Schedule 2.1"), the Transfer Agent shall: (a) Treat Shareholder accounts established by the Plans in the name of the Trustees, Plans or TPAs as the case may be as omnibus accounts; (b) Maintain omnibus accounts on its records in the name of the TPA or its designee as the Trustee for the benefit of the Plan: and (c) Perform all services under SECTION 1 as transfer agent of the Funds and not as a record-keeper for the Plans. 2.3 Transactions identified under SECTION 2 of this Agreement shall be deemed exception services ("Exception Services") when such transactions: (a) Require the Transfer Agent to use methods and procedures other than those usually employed by the Transfer Agent to perform services under SECTION 1 of this Agreement; (b) Involve the provision of information to the Transfer Agent after the commencement of the nightly processing cycle of the TA2000 System; or (c) Require more manual intervention by the Transfer Agent, either in the entry of data or in the modification or amendment of reports generated by the TA2000 System than is usually required by non-retirement plan and pre-nightly transactions. 3. FEES AND EXPENSES 3.1 Fee Schedule. For the performance by the Transfer Agent pursuant to this Agreement, the Fund agrees to pay the Transfer Agent an annual maintenance fee for each Shareholder account as set forth in the attached fee Schedule ("Schedule 3.1"). Such fees and out-of-pocket expenses and advances identified under SECTION 3.2 below may be changed from time to time subject to mutual written agreement between the Fund and the Transfer Agent. 3.2 Out-of-Pocket Expenses. In addition to the fee paid under SECTION 3.1 above, the Fund agrees to reimburse the Transfer Agent for out-of-pocket expenses, including but not limited to confirmation production, postage, forms, telephone, microfilm, microfiche, mailing and tabulating proxies, records storage, or advances incurred by the Transfer Agent for the items set out in Schedule 3.1 attached hereto. In addition, any other expenses incurred by the Transfer Agent at the request or with the consent of the Fund, will be reimbursed by the Fund. Page 4 3.3 Postage. Postage for mailing of dividends, proxies, Fund reports and other mailings to all shareholder accounts shall be advanced to the Transfer Agent by the Fund at least seven (7) days prior to the mailing date of such materials. 3.4 Invoices. The Fund agrees to pay all fees and reimbursable expenses within thirty (30) days following the receipt of the respective billing notice, except for any fees or expenses which are subject to good faith dispute. In the event of such a dispute, the Fund may only withhold that portion of the fee or expense subject to the good faith dispute. The Fund shall notify the Transfer Agent in writing within twenty-one (21) calendar days following the receipt of each billing notice if the Fund is disputing any amounts in good faith. If the Fund does not provide such notice of dispute within the required time, the billing notice will be deemed accepted by the Fund. 4. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT The Transfer Agent represents and warrants to the Fund that: 4.1 It is a trust company duly organized and existing and in good standing under the laws of The Commonwealth of Massachusetts. 4.2 It is duly qualified to carry on its business in The Commonwealth of Massachusetts. 4.3 It is empowered under applicable laws and by its Charter and By-Laws to enter into and perform this Agreement. 4.4 All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement. 4.5 It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement. 5. REPRESENTATIONS AND WARRANTIES OF THE FUND The Fund represents and warrants to the Transfer Agent that: 5.1 It is a corporation duly organized and existing and in good standing under the laws of the State of Maryland. 5.2 It is empowered under applicable laws and by its Articles of Incorporation and By-Laws to enter into and perform this Agreement. 5.3 All corporate proceedings required by said Articles of Incorporation and By-Laws have been taken to authorize it to enter into and perform this Agreement. 5.4 It is an open-end and diversified management investment company registered under the Investment Company Act of 1940, as amended. 5.5 A registration statement under the Securities Act of 1933, as amended is currently effective and will remain effective, and appropriate state securities law filings have been Page 5 made and will continue to be made, with respect to all Shares of the Fund being offered for sale. 6. WIRE TRANSFER OPERATING GUIDELINES/ARTICLES 4A OF THE UNIFORM COMMERCIAL CODE 6.1 The Transfer Agent is authorized to promptly debit the appropriate Fund account(s) upon the receipt of a payment order in compliance with the selected security procedure (the "Security Procedure") chosen for funds transfer and in the amount of money that the Transfer Agent has been instructed to transfer. The Transfer Agent shall execute payment orders in compliance with the Security Procedure and with the Fund instructions on the execution date provided that such payment order is received by the customary deadline for processing such a request, unless the payment order specifies a later time. All payment orders and communications received after this the customary deadline will be deemed to have been received the next business day. 6.2 The Fund acknowledges that the Security Procedure it has designated on the Fund Selection Form was selected by the Fund from security procedures offered by the Transfer Agent. The Fund shall restrict access to confidential information relating to the Security Procedure to authorized persons as communicated to the Transfer Agent in writing. The Fund must notify the Transfer Agent immediately if it has reason to believe unauthorized persons may have obtained access to such information or of any change in the Fund's authorized personnel. The Transfer Agent shall verify the authenticity of all Fund instructions according to the Security Procedure. 6.3 The Transfer Agent shall process all payment orders on the basis of the account number contained in the payment order. In the event of a discrepancy between any name indicated on the payment order and the account number, the account number shall take precedence and govern. 6.4 The Transfer Agent reserves the right to decline to process or delay the processing of a payment order which (a) is in excess of the collected balance in the account to be charged at the time of the Transfer Agent's receipt of such payment order; (b) if initiating such payment order would cause the Transfer Agent, in the Transfer Agent's sole judgement, to exceed any volume, aggregate dollar, network, time, credit or similar limits which are applicable to the Transfer Agent; or (c) if the Transfer Agent, in good faith, is unable to satisfy itself that the transaction has been properly authorized. 6.5 The Transfer Agent shall use reasonable efforts to act on all authorized requests to cancel or amend payment orders received in compliance with the Security Procedure provided that such requests are received in a timely manner affording the Transfer Agent reasonable opportunity to act. However, the Transfer Agent assumes no liability if the request for amendment or cancellation cannot be satisfied. 6.6 The Transfer Agent shall assume no responsibility for failure to detect any erroneous payment order provided that the Transfer Agent complies with the payment order instructions as received and the Transfer Agent complies with the Security Procedure. The Security Procedure is established for the purpose of authenticating payment orders only and not for the detection of errors in payment orders. Page 6 6.7 The Transfer Agent shall assume no responsibility for lost interest with respect to the refundable amount of any unauthorized payment order, unless the Transfer Agent is notified of the unauthorized payment order within thirty (30) days of notification by the Transfer Agent of the acceptance of such payment order. In no event (including failure to execute a payment order) shall the Transfer Agent be liable for special, indirect or consequential damages, even if advised of the possibility of such damages. 6.8 When the Fund initiates or receives Automated Clearing House credit and debit entries pursuant to these guidelines and the rules of the National Automated Clearing House Association and the New England Clearing House Association, the Transfer Agent will act as an Originating Depository Financial Institution and/or receiving depository Financial Institution, as the case may be, with respect to such entries. Credits given by the Transfer Agent with respect to an ACH credit entry are provisional until the Transfer Agent receives final settlement for such entry from the Federal Reserve Bank. If the Transfer Agent does not receive such final settlement, the Fund agrees that the Transfer Agent shall receive a refund of the amount credited to the Fund in connection with such entry, and the party making payment to the Fund via such entry shall not be deemed to have paid the amount of the entry. 6.9 Confirmation of Transfer Agent's execution of payment orders shall ordinarily be provided within twenty-four (24) hours notice of which may be delivered through the Transfer Agent's proprietary information systems, or by facsimile or call-back. Fund must report any objections to the execution of an order within thirty (30) days. 7. DATA ACCESS AND PROPRIETARY INFORMATION 7.1 The Fund acknowledges that the databases, computer programs, screen formats, report formats, interactive design techniques, and documentation manuals furnished to the Fund by the Transfer Agent as part of the Fund's ability to access certain Fund-related data ("Customer Data") maintained by the Transfer Agent on data bases under the control and ownership of the Transfer Agent or other third party ("Data Access Services") constitute copyrighted, trade secret, or other proprietary information (collectively, "Proprietary Information") of substantial value to the Transfer Agent or other third party. In no event shall Proprietary Information be deemed Customer Data. The Fund agrees to treat all Proprietary Information as proprietary to the Transfer Agent and further agrees that it shall not divulge any Proprietary Information to any person or organization except as may be provided hereunder. Without limiting the foregoing, the Fund agrees for itself and its employees and agents to: (a) Use such programs and databases (i) solely on the Fund's computers, or (ii) solely from equipment at the location agreed to between the Fund and the Transfer Agent and (iii) solely in accordance with the Transfer Agent's applicable user documentation; (b) Refrain from copying or duplicating in any way (other than in the normal course or performing processing on the Fund's computer(s)), the Proprietary Information; (c) Refrain from obtaining unauthorized access to any portion of the Proprietary Information, and if such access is inadvertently obtained, to inform in a timely Page 7 manner of such fact and dispose of such information in accordance with the Transfer Agent's instructions; (d) Refrain from causing or allowing information transmitted from the Transfer Agent's computer to the Fund's terminal to be retransmitted to any other computer terminal or other device except as expressly permitted by the Transfer Agent (such permission not to be unreasonably withheld); (e) Allow the Fund to have access only to those authorized transactions as agreed to between the Fund and the Transfer Agent; and (f) Honor all reasonable written requests made by the Transfer Agent to protect at the Transfer Agent's expense the rights of the Transfer Agent in Proprietary Information at common law, under federal copyright law and under other federal or state law. 7.2 Proprietary Information shall not include all or any portion of any of the foregoing items that: (i) are or become publicly available without breach of this Agreement; (ii) are released for general disclosure by a written release by the Transfer Agent; or (iii) are already in the possession of the receiving party at the time or receipt without obligation of confidentiality or breach of this Agreement. 7.3 The Fund acknowledges that its obligation to protect the Transfer Agent's Proprietary Information is essential to the business interest of the Transfer Agent and that the disclosure of such Proprietary Information in breach of this Agreement would cause the Transfer Agent immediate, substantial and irreparable harm, the value of which would be extremely difficult to determine. Accordingly, the parties agree that, in addition to any other remedies that may be available in law, equity, or otherwise for the disclosure or use of the Proprietary Information in breach of this Agreement, the Transfer Agent shall be entitled to seek and obtain a temporary restraining order, injunctive relief, or other equitable relief against the continuance of such breach 7.4 If the Fund notifies the Transfer Agent that any of the Data Access Services do not operate in material compliance with the most recently issued user documentation for such services, the Transfer Agent shall endeavor in a timely manner to correct such failure. Organizations from which the Transfer Agent may obtain certain data included in the Data Access Services are solely responsible for the contents of such data and the Fund agrees to make no claim against the Transfer Agent arising out of the contents of such third-party data, including, but not limited to, the accuracy thereof. DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE TRANSFER AGENT EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 7.5 If the transactions available to the Fund include the ability to originate electronic instructions to the Transfer Agent in order to: (i) effect the transfer or movement of cash or Shares; or (ii) transmit Shareholder information or other information, then in such event the Transfer Agent shall be entitled to rely on the validity and authenticity of such instruction Page 8 without undertaking any further inquiry as long as such instruction is undertaken in conformity with security procedures established by the Transfer Agent from time to time. 7.6 Each party shall take reasonable efforts to advise its employees of their obligations pursuant to this SECTION 7. The obligations of this Section shall survive any earlier termination of this Agreement. 8. INDEMNIFICATION 8.1 The Transfer Agent shall not be responsible for, and the Fund shall indemnify and hold the Transfer Agent harmless from and against, any and all losses, damages, costs, charges, counsel fees, payments, expenses and liability arising out of or attributable to: (a) All actions of the Transfer Agent or its agents or subcontractors required to be taken pursuant to this Agreement, provided that such actions are taken in good faith and without negligence or willful misconduct; (b) The Fund's lack of good faith, negligence or willful misconduct which arise out of the breach of any representation or warranty of the Fund hereunder: (c) The reliance upon, and any subsequent use of or action taken or omitted, by the Transfer Agent, or its agents or subcontractors on: (i) any information, records, documents, data, stock certificates or services, which are received by the Transfer Agent or its agents or subcontractors by machine readable input, facsimile, CRT data entry, electronic instructions or other similar means authorized by the Fund, and which have been prepared, maintained or performed by the Fund or any other person or firm on behalf of the Fund including but not limited to any previous transfer agent or registrar; (ii) any instructions or requests of the Fund or any of its officers; (iii) any instructions or opinions of legal counsel with respect to any matter arising in connection with the services to be performed by the Transfer Agent under this Agreement which are provided to the Transfer Agent after consultation with such legal counsel; or (iv) any paper or document, reasonably believed to be genuine, authentic, or signed by the proper person or persons; (d) The offer or sale of Shares in violation of federal or state securities laws or regulations requiring that such Shares be registered or in violation of any stop order or other determination or ruling by any federal or any state agency with respect to the offer or sale of such Shares; (e) The negotiation and processing of any checks including without limitation for deposit into the Fund's demand deposit account maintained by the Transfer Agent; or (f) Upon the Fund's request entering into any agreements required by the National Securities Clearing Corporation (the "NSCC") required by the NSCC for the transmission of Fund or Shareholder data through the NSCC clearing systems. 8.2 In order that the indemnification provisions contained in this SECTION 8 shall apply, upon the assertion of a claim for which the Fund may be required to indemnify the Transfer Page 9 Agent, the Transfer Agent shall promptly notify the Fund of such assertion, and shall keep the Fund advised with respect to all developments concerning such claim. The Fund shall have the option to participate with the Transfer Agent in the defense of such claim or to defend against said claim in its own name or in the name of the Transfer Agent. The Transfer Agent shall in no case confess any claim or make any compromise in any case in which the Fund may be required to indemnify the Transfer Agent except with the Fund's prior written consent. 9. STANDARD OF CARE 9.1 The Transfer Agent shall at all times act in good faith and agrees to use its best efforts within reasonable limits to insure the accuracy of all services performed under this Agreement, but assumes no responsibility and shall not be liable for loss or damage due to errors unless said errors are caused by its negligence, bad faith, or willful misconduct or that of its employees, except as provided in SECTION 9.2 below. 9.2 In the case of Exception Services as defined in SECTION 2.3 herein, the Transfer Agent shall be held to a standard of gross negligence and encoding and payment processing errors shall not be deemed negligence. 10. YEAR 2000 The Transfer Agent will take reasonable steps to ensure that its products (and those of its third-party suppliers) reflect the available technology to offer products that are Year 2000 ready, including, but not limited to, century recognition of dates, calculations that correctly compute same century and multi century formulas and date values, and interface values that reflect the date issues arising between now and the next one-hundred years, and if any changes are required, the Transfer Agent will make the changes to its products at a price to be agreed upon by the parties and in a commercially reasonable time frame and will require third-party suppliers to do likewise. 11. CONFIDENTIALITY 11.1 The Transfer Agent and the Fund agree that they will not, at any time during the term of this Agreement or after its termination, reveal, divulge, or make known to any person, firm, corporation or other business organization, any customers' lists, trade secrets, cost figures and projections, profit figures and projections, or any other secret or confidential information whatsoever, whether of the Transfer Agent or of the Fund, used or gained by the Transfer Agent or the Fund during performance under this Agreement. The Fund and the Transfer Agent further covenant and agree to retain all such knowledge and information acquired during and after the term of this Agreement respecting such lists, trade secrets, or any secret or confidential information whatsoever in trust for the sole benefit of the Transfer Agent or the Fund and their successors and assigns. In the event of breach of the foregoing by either party, the remedies provided by SECTION 7.3 shall be available to the party whose confidential information is disclosed. The above prohibition of disclosure shall not apply to the extent that the Transfer Agent must disclose such data to its sub-contractor or Fund agent for purposes of providing services under this Agreement. Page 10 11.2 In the event that any requests or demands are made for the inspection of the Shareholder records of the Fund, other than request for records of Shareholders pursuant to standard subpoenas from state or federal government authorities (i.e., divorce and criminal actions), the Transfer Agent will endeavor to notify the Fund and to secure instructions from an authorized officer of the Fund as to such inspection. The Transfer Agent expressly reserves the right, however, to exhibit the Shareholder records to any person whenever it is advised by counsel that it may be held liable for the failure to exhibit the Shareholder records to such person or if required by law or court order. 12. COVENANTS OF THE FUND AND THE TRANSFER AGENT 12.1 The Fund shall promptly furnish to the Transfer Agent the following: (a) A certified copy of the resolution of the Board of Directors of the Fund authorizing the appointment of the Transfer Agent and the execution and delivery of this Agreement; and (b) A copy of the Articles of Incorporation and By-Laws of the Fund and all amendments thereto. 12.2 The Transfer Agent hereby agrees to establish and maintain facilities and procedures reasonably acceptable to the Fund for safekeeping of stock certificates, check forms and facsimile signature imprinting devices, if any; and for the preparation or use, and for keeping account of, such certificates, forms and devices. 12.3 The Transfer Agent shall keep records relating to the services to be performed hereunder, in the form and manner as it may deem advisable. To the extent required by Section 31 of the Investment Company Act of 1940, as amended, and the Rules thereunder, the Transfer Agent agrees that all such records prepared or maintained by the Transfer Agent relating to the services to be performed by the Transfer Agent hereunder are the property of the Fund and will be preserved, maintained and made available in accordance with such Section and Rules, and will be surrendered promptly to the Fund on and in accordance with its request. 13. TERMINATION OF AGREEMENT 13.1 This Agreement may be terminated by either party upon one hundred twenty (120) days written notice to the other. 13.2 Should the Fund exercise its right to terminate, all out-of-pocket expenses or costs associated with the movement of records and material will be borne by the Fund. Additionally, the Transfer Agent reserves the right to charge for any other reasonable expenses associated with such termination and a charge equivalent to the average of three (3) months' fees. Payment of such expenses or costs shall be in accordance with SECTION 3.4 of this Agreement. 13.3 Upon termination of this Agreement, each party shall return to the other party all copies of confidential or proprietary materials or information received from such other party Page 11 hereunder, other than materials or information required to be retained by such party under applicable laws or regulations. 14. ASSIGNMENT AND THIRD PARTY BENEFICIARIES 14.1 Except as provided in SECTION 15.1 below and the Additional Telephone Support Services Schedule 1.2(f) attached, neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the written consent of the other party. Any attempt to do so in violation of this Section shall be void. Unless specifically stated to the contrary in any written consent to an assignment, no assignment will release or discharge the assignor from any duty or responsibility under this Agreement. 14.2 Except as explicitly stated elsewhere in this Agreement, nothing under this Agreement shall be construed to give any rights or benefits in this Agreement to anyone other than the Transfer Agent and the Fund, and the duties and responsibilities undertaken pursuant to this Agreement shall be for the sole and exclusive benefit of the Transfer Agent and the Fund. This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns. 14.3 This Agreement does not constitute an agreement for a partnership or joint venture between the Transfer Agent and the Fund. Other than as provided in SECTION 15.1 and Schedule 1.2(f), neither party shall make any commitments with third parties hat are binding on the other party without the other party's prior written consent. 15. SUBCONTRACTORS 15.1 The Transfer Agent may, without further consent on the part of the Fund, subcontract for the performance hereof with (i) Boston Financial Data Services, Inc., a Massachusetts corporation ("BFDS") which is duly registered as a transfer agent pursuant to Section 17A(c)(2) of the Securities Exchange Act of 1934, as amended, (ii) a BFDS subsidiary duly registered as a transfer agent or (iii) a BFDS affiliate duly registered as a transfer agent; provided, however, that the Transfer Agent shall be fully responsible to the Fund for the acts and omissions of BFDS or its subsidiary or affiliate as it is for its own acts and omissions. 15.2 Nothing herein shall impose any duty upon the Transfer Agent in connection with or make the Transfer Agent liable for the actions or omissions to act of unaffiliated third parties such as by way of example and not limitation, Airborne Services, Federal Express, United Parcel Service, the U.S. Mails, the NSCC and telecommunication companies, provided, if the Transfer Agent selected such company, the Transfer Agent shall have exercised due care in selecting the same. 16. MISCELLANEOUS 16.1 Amendment. This Agreement may be amended or modified by a written agreement executed by both parties and authorized or approved by a resolution of the Board of Directors of the Fund. Page 12 16.2 Massachusetts Law to Apply. This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of The Commonwealth of Massachusetts. 16.3 Force Majeure. In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes, equipment or transmission failure or damage reasonably beyond its control, or other causes reasonably beyond its control, such party shall not be liable for damages to the other for any damages resulting from such failure to perform or otherwise from such causes. 16.4 Consequential Damages. Neither party to this Agreement shall be liable to the other party for consequential damages under any provision of this Agreement or for any consequential damages arising out of any act or failure to act hereunder. 16.5 Survival. All provisions regarding indemnification, warranty, liability, and limits thereon, and confidentiality and/or protections of proprietary rights and trade secrets shall survive the termination of this Agreement. 16.6 Severability. If any provision or provisions of this Agreement shall be held invalid, unlawful, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired. 16.7 Priorities Clause. In the event of any conflict, discrepancy or ambiguity between the terms and conditions contained in this Agreement and any Schedules or attachments hereto, the terms and conditions contained in this Agreement shall take precedence. 16.8 Waiver. No waiver by either party or any breach or default of any of the covenants or conditions herein contained and performed by the other party shall be construed as a waiver of any succeeding breach of the same or of any other covenant or condition. 16.9 Merger of Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof whether oral or written. 16.10 Counterparts. This Agreement may be executed by the parties hereto on any number of counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 16.11 Reproduction of Documents. This Agreement and all schedules, exhibits, attachments and amendments hereto may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. The parties hereto each agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction shall likewise be admissible in evidence. 16.12 Notices. All notices and other communications as required or permitted hereunder shall be in writing and sent by first class mail, postage prepaid, addressed as follows or to Page 13 such other address or addresses of which the respective party shall have notified the other. (a) If to State Street Bank and Trust Company, to: State Street Bank and Trust Company c/o Boston Financial Data Services, Inc. Two Heritage Drive Quincy, Massachusetts 02171 Attention: Legal Department Facsimile: (617) 774-2287 (b) If to the Fund, to: Attention: 17. ADDITIONAL FUNDS In the event that the Fund establishes one or more series of Shares in addition to the attached Schedule A with respect to which it desires to have the Transfer Agent render services as transfer agent under the terms hereof, it shall so notify the Transfer Agent in writing, and if the Transfer Agent agrees in writing to provide such services, such series of Shares shall become a Portfolio hereunder. Page 14 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers, as of the day and year first above written. DRESDNER RCM INVESTMENT FUNDS INC. BY: -------------------------------- ATTEST: - ------------------------------- STATE STREET BANK AND TRUST COMPANY BY: -------------------------------- Executive Vice President ATTEST: - ------------------------------- Page 15 SCHEDULE A Dresdner RCM Europe Fund DRESDNER RCM INVESTMENT FUNDS INC. STATE STREET BANK AND TRUST COMPANY BY: BY: ------------------------------- -------------------------------- Page 16 SCHEDULE 1.2(f) ADDITIONAL TELEPHONE SUPPORT FEES AND SERVICES Dated -------------------------- I. SERVICES 1. Transfer Agent and Telephone Support Functions a. Answer telephone inquiries from [XXX 8 a.m. to 8 p.m. Boston time Monday through Friday XXX] from [XXX existing customers and prospective customers XXX] of the Fund [XXX for sales literature XXX] in accordance with the telephone script provided by the Fund. b. Answer questions pertaining thereto the extent that such questions are answerable based upon the information supplied to the Transfer Agent by the Fund. c. [XXX As the Fund and the Transfer Agent may agree in writing, the Transfer Agent will receive calls and take written transaction requests from shareholders of the Fund. Transfer Agent transactions include: [XXX telephone redemptions, account maintenance, exchanges, transfers, confirmed purchases, account balances and general inquiries XXX]. Some transactions may result in research which will be done by the Fund. Other calls may be referred directly to the Fund. Fax any referrals to [XXX name of company XXX] on the same day the telephone call is received.XXX]; 2. Incorporate new information into the above referenced script upon written instructions from the Fund; 3. Maintain prospect detail information for six (6) months thereafter, provide such information to the Fund in the form that the Fund may reasonably request; 4. Send all literature orders for information from BFDS/DST [XXX [how?] [to whom?] XXX] a minimum of [XXX one XXX] transmission per day; 5. Provide the Fund with a [XXX daily/weekly/monthly XXX] telephone report detailing the calls received during the [XXX day/week/month XXX]. 6. [XXX Provide the Fund with monthly conversion reports as selected by the Fund from DST's standard report package. XXX] II. SUBCONTRACTORS 1. The Transfer Agent may, without further consent on the part of the Fund, subcontract ministerial telephone support services for the performance hereof. III. FEES DRESDNER RCM INVESTMENT FUNDS INC. STATE STREET BANK AND TRUST COMPANY BY: BY: ------------------------------- -------------------------------- SCHEDULE 2.1 THIRD PARTY ADMINISTRATOR(S) PROCEDURES Dated ----------------------------------- 1. On each Business Day, the TPA(s) shall receive, on behalf of and as agent of the Fund(s), Instructions (as hereinafter defined) from the Plan. Instructions shall mean as to each Fund (i) orders by the Plan for the purchases of Shares, and (ii) requests by the Plan for the redemption of Shares; in each case based on the Plan's receipt of purchase orders and redemption requests by Participants in proper form by the time required by the term of the Plan, but not later than the time of day at which the net asset value of a Fund is calculated, as described from time to time in that Fund's prospectus. Each Business Day on which the TPA receives Instructions shall be a "Trade Date". 2. The TPA(s) shall communicate the TPA(s)'s acceptance of such Instructions, to the applicable Plan. 3. On the next succeeding Business Day following the Trade Date on which it accepted Instructions for the purchase and redemption of Shares, (TD+1), the TPA(s) shall notify the Transfer Agent of the net amount of such purchases or redemptions, as the case may be, for each of the Plans. In the case of net purchases by any Plan, the TPA(s) shall instruct the Trustees of such Plan to transmit the aggregate purchase price for Shares by wire transfer to the Transfer Agent on (TD+1). In the case of net redemptions by any Plan, the TPA(s) shall instruct the Fund's custodian to transmit the aggregate redemption proceeds for Shares by wire transfer to the Trustees of such Plan on (TD+1). The times at which such notification and transmission shall occur on (TD+1) shall be as mutually agreed upon by each Fund, the TPA(s), and the Transfer Agent. 4. The TPA(s) shall maintain separate records for each Plan, which record shall reflect Shares purchased and redeemed, including the date and price for all transactions, and Share balances. The TPA(s) shall maintain on behalf of each of the Plans a single master account with the Transfer Agent and such account shall be in the name of that Plan, the TPA(s), or the nominee of either thereof as the record owner of Shares owned by such Plan. 5. The TPA(s) shall maintain records of all proceeds of redemptions of Shares and all other distributions not reinvested in Shares. 6. The TPA(s) shall prepare, and transmit to each of the Plans, periodic account statements showing the total number of Shares owned by that Plan as of the statement closing date, purchases and redemptions of Shares by the Plan during the period covered by the statement, and the dividends and other distributions paid to the Plan on Shares during the statement period (whether paid in cash or reinvested in Shares). 7. The TPA(s) shall, at the request and expense of each Fund, transmit to the Plans prospectuses, proxy materials, reports, and other information provided by each Fund for delivery to its shareholders. 8. The TPA(s) shall, at the request of each Fund, prepare and transmit to each Fund or any agent designated by it such periodic reports covering Shares of each Plan as each Fund shall reasonably conclude are necessary to enable the Fund to comply with state Blue Sky requirements. 9. The TPA(s) shall transmit to the Plans confirmation of purchase orders and redemption requests placed by the Plans; and 10. The TPA(s) shall, with respect to Shares, maintain account balance information for the Plan(s) and daily and monthly purchase summaries expressed in Shares and dollar amounts. 11. Plan sponsors may request, or the law may require, that prospectuses, proxy materials, periodic reports and other materials relating to each Fund be furnished to Participants in which event the Transfer Agent or each Fund shall mail or cause to be mailed such materials to Participants. With respect to any such mailing, the TPA(s) shall, at the request of the Transfer Agent or each Fund, provide at the TPA(s)'s expense complete and accurate set of mailing labels with the name and address of each Participant having an interest through the Plans in Shares. DRESDNER RCM INVESTMENT FUNDS INC. STATE STREET BANK AND TRUST COMPANY BY: BY: ------------------------------- -------------------------------- SCHEDULE 3.1 FEES Dated ------------------------- DRESDNER RCM INVESTMENT FUNDS INC. STATE STREET BANK AND TRUST COMPANY BY: BY: ------------------------------- -------------------------------- Dresdner RCM Fee Information for Services as Plan, Transfer and Dividend Disbursing Agent - -------------------------------------------------------------------------------- ANNUAL ACCOUNT SERVICE FEES - -------------------------------------------------------------------------------- Monthly Dividend Funds $ 14.00/year* (per open account within a fund) Quarterly Dividend Funds $ 13.00/year* (per open account within a fund) Semi-Annual/Annual Dividend Funds $ 12.00/year* (per open account within a fund) Closed Account Fee $ 1.80/year* (per closed account within a fund) Minimum Per Cusip 1st Class within a Non-Institutional Portfolio $18,000/year* Subsequent Classes within a Non-Institutional $15,000/year* Portfolio Institutional Classes $12,000/year* * Fees are billable on a monthly basis at the rate of 1/12 of the annual fee. A charge is made for an account in the month that an account opens or closes. Account service fees are the higher of: open account charges plus closed account charges or the fund minimum. These fees will be subject to an annual Cost of Living Adjustment based on regional consumer price index. - -------------------------------------------------------------------------------- ACTIVITY BASED FEES - -------------------------------------------------------------------------------- New Account Set-up $ 4.00/each Manual Transactions $ 1.50/each Manual Non-Financial Transactions $ .75/each Telephone Calls $ 2.00/each Correspondence $ 3.00/each - -------------------------------------------------------------------------------- BANKING SERVICES - -------------------------------------------------------------------------------- Checkwriting Drafts Presented for Payment $ 1.00/each Checkwriting Set-up $ 5.00/each - -------------------------------------------------------------------------------- CONVERSION FEES - -------------------------------------------------------------------------------- Per Class within a Portfolio $ 2,500/each - -------------------------------------------------------------------------------- FUND IMPLEMENTATION FEES - -------------------------------------------------------------------------------- First Class within a Portfolio $ 1,000/each Subsequent Classes within a Portfolio $ 500/each Institutional Class $ 1,000/each - -------------------------------------------------------------------------------- OUT-OF-POCKET EXPENSES BILLED AS INCURRED - -------------------------------------------------------------------------------- Out-of-Pocket expenses include but are not limited to: mailing expenses (i.e., statements, stationery, checks, certificates, sales literature, printing, postage, etc.), telecommunication expenses, equipment and software expenses (client-site only), programming expenses (i.e., charges necessary to establish consolidated statement), microfiche, freight, ACH bank charges, and all other expenses incurred on the fund's behalf. DRESDNER RCM INVESTMENT FUNDS INC. STATE STREET BANK AND TRUST COMPANY By: By: ------------------------------- -------------------------------- Title: Title: ---------------------------- ----------------------------- Date: Date: ----------------------------- ------------------------------ EX-99.23(J) 10 EXHIBIT 99.23(J) EXHIBIT 99.23(j) DRESDNER RCM INVESTMENT FUNDS INC. POWER OF ATTORNEY Each person whose signature appears below hereby appoints Robert J. Goldstein, Caroline M. Hirst, Jennie W. Klein and Judith W. O'Connell, or any of them, as attorney-in-fact, with full power and authority, in his or her discretion, to execute, deliver, on each of the below persons behalf individually, and in their capacity stated below, any registration statement or amendment to a registration statement of the Dresdner RCM Europe Fund Inc. (including post-effective amendments) and to file the same, with all exhibits thereto, with the Securities and Exchange Commission and any other regulatory agency and to execute and deliver such other documents or instruments necessary to have such registration statement (including post-effective amendments) declared effective. The Power of Attorney granted hereby is effective immediately and will continue until it is revoked. By accepting or acting under the appointment, the attorney-in-fact, as agent, assumes the fiduciary and other legal responsibilities of an agent. IN WITNESS WHEREOF, this Power of Attorney is executed on February 12, 1999. /s/Rolf Passow /s/Theodore J. Coburn - -------------- --------------------- Rolf Passow Theodore J. Coburn Director Director /s/Robert J. Birnbaum /s/Carroll Brown - --------------------- ---------------- Robert J. Birnbaum Carroll Brown Director Director /s/James E. Dowd /s/Siegfried Kessler - ---------------- -------------------- James E. Dowd Siegfried Kessler Director Director /s/Gottfried W. Perbix /s/Jacob Saliba - ---------------------- --------------- Gottfried W. Perbix Jacob Saliba Director Director /s/Alfred W. Fiore /s/George N. Fugelsang - ------------------ ---------------------- Alfred W. Fiore George N. Fugelsang Director Director -----END PRIVACY-ENHANCED MESSAGE-----