Exhibit (n)(2)
SCUDDER TAX FREE MONEY FUND
(the "Fund")
PLAN WITH RESPECT TO
SCUDDER TAX FREE MONEY FUND
PURSUANT TO RULE 18f-3
under the
INVESTMENT COMPANY ACT OF 1940
The Plan
I. Introduction
As required by Rule 18f-3 under the Investment Company Act of 1940, as
amended ("1940 Act"), this Plan describes the multi-class system for the Fund
that will apply to shares of beneficial interest, $0.01 par value per share (the
"shares"), of the Fund, including the separate class arrangements for
shareholder and administrative services and the distribution of shares, the
method for allocating expenses, income, gain and loss of the Fund among classes
and any related exchange privileges and conversion features applicable to the
classes.
Upon the effective date of this Plan, the Fund elects to offer multiple
classes of shares of the Fund, as described herein, pursuant to Rule 18f-3 and
this Plan.
II. The Multi-Class System
The Fund may offer two classes of shares, AARP Shares and Class S
shares. Shares of each class of the Fund shall represent an equal pro rata
interest in the Fund and, generally, shall have identical voting, dividend,
liquidation, and other rights, preferences, powers, restrictions, limitations,
qualifications and terms and conditions, except that: (a) each class shall have
a different designation; (b) each class of shares shall bear any Class Expenses,
as defined by Section A.2, below; (c) each class shall have exclusive voting
rights on any matter submitted to shareholders that relates solely to its
shareholder services, administrative services or distribution arrangements; (d)
each class shall have separate voting rights on any matter submitted to
shareholders in which the interests of one class differ from the interests of
any other class; (e) each class may have separate exchange privileges; (f) each
class of shares may have separate account size requirements; and (g) each class
may have different conversion features. In addition, the following provisions
shall apply to the classes authorized hereby.
A. Allocation of Income and Expenses
1. General.
The gross income, realized and unrealized capital gains and
losses and expenses (other than Class Expenses, as defined below) of the Fund
shall be allocated to each share of the Fund, on the basis of its net asset
value relative to the net asset value of the Fund. Expenses to be so allocated
include a portion of the expenses of the Fund that are not attributable to the
Fund, any class of the Fund ("Fund Expenses"). Fund Expenses include, but are
not limited to,
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Trustees' fees, certain insurance costs and certain legal fees. Fund Expenses
include, but are not limited to, certain filing fees (i.e. state filing fees
imposed on a Fund-wide basis and Securities and Exchange Commission registration
fees), custodial fees, advisory fees and other expenses relating to the
management of the Funds' assets.
2. Class Expenses.
Expenses attributable to one or more particular classes, which
are allocated on the basis of the amount incurred on behalf of each class
("Class Expenses") may include: (a) transfer agent fees attributable to a
specific class, (b) printing and postage expenses related to preparing and
distributing material such as shareholder reports, prospectuses and proxy
materials to current Fund shareholders; (c) registration fees (other than those
set forth in subsection A.l above); (d) the expense of administrative personnel
and services as required to support the shareholders of a specific class; (e)
litigation or other legal expenses and audit or other accounting expenses
relating to a specific class; (f) Trustees' fees incurred as a result of issues
relating to a specific class; and (g) shareholder or Trustees' meeting costs
that relate to a specific class. All expenses described in this paragraph may be
allocated as Class Expenses, but only if the Fund's President and Treasurer have
determined, subject to the Board of Trustees' approval or ratification, which of
such categories of expenses will be treated as Class Expenses, consistent with
applicable legal principles under the 1940 Act and the Internal Revenue Code of
1986, as amended ("Code").
In the event that a particular expense is no longer reasonably
allocable by class or to a particular class, it shall be treated as a Fund
Expense, and in the event a Fund Expense becomes allocable at a different level,
including as a Class Expense, it shall be so allocated, subject to compliance
with Rule 18f-3 and to approval or ratification by the Board of Trustees.
The initial determination of expenses that will be allocated
as Class Expenses and any subsequent changes thereto shall be reviewed by the
Board of Trustees and approved by such Board and by a majority of the Trustees
who are not "interested persons" of the Fund, as defined in the 1940 Act (the
"Independent Trustees"). Such expense allocation shall be set forth in a
schedule, as amended from time to time, by the Board of Trustees, including a
majority of the Independent Trustees, and shall form a part of this plan.
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3. Waivers or Reimbursements of Expenses
Expenses may be waived or reimbursed by the Fund's investment
adviser, its principal underwriter, or any other provider of services to the
Fund without the prior approval of the Board of Trustees to the extent such
waiver or reimbursement does not jeopardize the Fund's status as a "regulated
investment company" under the Code.
B. Exchange Privileges
Shareholders of the Fund may exchange shares of their class for shares
of a similar class of another fund in the Scudder family, at the relative net
asset values of the respective shares to be exchanged and with no sales charge,
subject to applicable law, and to the applicable requirements, if any, as to
minimum amount.
C. Conversion Privileges
Upon the direction of a holder of Class S shares or Class AARP shares
of the Series, such shares will be converted to AARP shares or Class S shares of
the Series, respectively, at the relative net asset values of the two classes.
Any conversion of shares of one Class to shares of another Class is subject to
the continuing availability of a ruling of the Internal Revenue Service or an
opinion of counsel to the effect that the conversion of shares should not
constitute a taxable event under federal income tax law. Any such conversion may
be suspended if such a ruling or opinion is no longer available.
D. Board Review
1. Initial Approval
The Board of Trustees, including a majority of the Independent
Trustees, at a meeting held March 14, 2000, approved the Plan based on a
determination that the Plan, including the expense allocation, is in the best
interests of each class individually and of the Fund. Their determination was
based on their review of information furnished to them which they deemed
reasonably necessary and sufficient to evaluate the Plan.
2. Approval of Amendments
The Plan may not be amended materially unless the Board of
Trustees, including a majority of the Independent Trustees, has found that the
proposed amendment, including any proposed related expense allocation, is in the
best interests of each class individually and of the Fund. Such finding shall be
based on information requested by, and furnished to, the Board that the Board
deems reasonably necessary to evaluate the proposed amendment.
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3. Periodic Review
The Board shall review reports of expense allocations and such
other information as they request at such times, or pursuant to such schedule,
as they may determine is consistent with applicable legal requirements.
E. Contracts
Any Agreement related to the multi-class system shall require
the parties thereto to furnish to the Board of Trustees, upon their request,
such information as is reasonably necessary to permit the Trustees to evaluate
the plan or any proposed amendment.
F. Effective Date
The Plan, having been reviewed and approved by the Board of Trustees
and by a majority of the Independent Trustees as indicated in subsection C.l of
Section II of the Plan, shall take effect as of the implementation of the
multi-class system, except that allocation of Class Expenses shall not occur
until the effective date of the Fund's post-effective amendment to its
registration statement containing disclosure concerning the multi-class system.
G. Amendments
The Plan may not be amended to modify materially its terms unless such
amendment has been approved in the manner specified in subsection C.2 of Section
II of the Plan.
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Schedule to Multi-Distribution System Plan
Allocation of Class Expenses
AARP Shares
1. Transfer agent fees attributable to AARP Shares;
2. Printing and postage expenses related to preparing and distributing
material such as shareholder reports, prospectuses and proxy materials
to current holders of AARP Shares;
3. Registration fees (other than State registration fees imposed on a
Fund-wide basis and Securities and Exchange Commission registration
Fees) for AARP Shares;
4. Litigation or other legal expenses relating solely to AARP Shares;
5. Directors' fees incurred as a result of issues relating solely to AARP
Shares; and
6. The expense of holding meetings solely for holders of AARP Shares.
7. Any expenses incurred as a result of being an Underlying Fund of
Scudder Pathway Series under the Special Servicing Agreement dated
November 15, 1996.
Class S Shares
1. Transfer agent fees attributable to Class S Shares;
2. Printing and postage expenses related to preparing and distributing
material such as shareholder reports, prospectuses and proxy materials
to current holders of Class S Shares;
3. Registration fees (other than State registration fees imposed on a
Fund-wide basis and Securities and Exchange Commission registration
Fees) for Class S Shares;
4. Litigation or other legal expenses relating solely to Class S Shares;
5. Trustees' fees incurred as a result of issues relating solely to Class
S Shares;
6. The expense of holding meetings solely for holders of Class S Shares;
and
7. Any expenses incurred as a result of being an Underlying Fund of
Scudder Pathway Series under the Special Servicing Agreement dated
November 15, 1996.
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