SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the Securities
Exchange Act of 1934
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
X Preliminary Proxy Statement Confidential, for Use of
the Commission Only
(as permitted by
Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
AARP GROWTH TRUST
(Name of Registrant as Specified in Its Charter/Declaration of Trust)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials:
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identity the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
Dechert Price & Rhoads
Ten Post Office Square South
Boston, Massachusetts 02109
August 19, 1999
Division of Investment Management
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Preliminary Proxy Materials for
AARP U.S. Stock Index Fund (the "Fund") of the Fund, a series of
AARP Growth Trust (the "Trust") (File Nos. 33-02-191578, 811-4048)
Gentlemen:
In accordance with the provisions of Rule 14a-6 under the Securities
Act of 1934, there is being electronically filed simultaneously herewith a
preliminary copy of the Notice of Special Meeting, Proxy Statement and Form of
Proxy Card in connection with the Special Meeting of shareholders of the Fund,
which is scheduled for October 13, 1999. Because the consummation of the merger
between Bankers Trust Corporation ("BT Corporation"), Deutsche Bank, A.G.
("Deutsche Bank") and Circle Acquisition Corporation, a wholly-owned subsidiary
of Deutsche Bank (the "Merger"), which took place on June 4, 1999, may be deemed
to have constituted an "assignment" of the Fund's investment subadvisory
agreement with Bankers Trust Company ("Bankers Trust"), a wholly-owned
subsidiary of BT Corporation, in effect at such time, shareholders of the Fund
are being asked to approve a new investment subadvisory agreement between
Scudder Kemper Investments, Inc., the Fund's investment manager and Bankers
Trust that will have become effective upon the consummation of the Merger.
(Bankers Trust has applied for and received an exemptive order from the
Securities and Exchange Commission permitting implementation of the new
investment advisory agreement pending shareholder approval of the new investment
advisory agreement within 150 days after the consummation of the Merger.)
Because of significant time constraints as well as the fact that John
Grzeskiewicz of the Staff has reviewed the substantive aspects of the proposal
during the review of the preliminary proxy statement of BT Investment Funds,
filed on July 28, 1999, we respectfully request an expedited review of the
Fund's Preliminary Proxy Materials. In any event, please provide us with your
comments as soon as possible.
The proxy materials are scheduled to be mailed to shareholders on or
about August 27, 1999. Please contact the undersigned at (617) 728-7123, Oleg A.
Vyadro (617) 728-7173 or William E. Schwartz at (617) 728-7163 if you have any
questions or concerns.
Very truly yours,
/s/ Sheldon A. Jones
<PAGE>
AARP U.S. STOCK INDEX FUND
AARP Growth Trust
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held [___________], 1999
A Special Meeting of shareholders of AARP U.S. Stock Index Fund (the
"Fund") will be held at the offices of Scudder Kemper Investments, Inc.
("Scudder Kemper"), 13th Floor, Two International Place, Boston, Massachusetts
02110 on [________], 1999 at [__] a.m. Eastern time (the "Special Meeting"). The
Fund is a series of AARP Growth Trust (the "Trust"), an open-end management
investment company organized under the laws of the Commonwealth of
Massachusetts.
The Special Meeting is being held to consider and vote on the following
matter for the Fund, as indicated below and more fully described under
"Proposal" in the accompanying Proxy Statement, and such other matters as may
properly come before the meeting or any adjournments thereof:
PROPOSAL: To approve or disapprove a new subadvisory agreement between Scudder
Kemper and Bankers Trust Company ("Bankers Trust").
The appointed proxies will vote in their discretion on any other
business as may properly come before the Special Meeting or any adjournment
thereof.
The new subadvisory agreement (the "New Subadvisory Agreement") between
Scudder Kemper and Bankers Trust will contain substantially the same terms and
conditions, except for the dates of execution and termination, as the former
subadvisory agreement between Scudder Kemper and Bankers Trust pursuant to which
services were provided to the Fund. As more fully discussed in the accompanying
Proxy Statement, approval of the New Subadvisory Agreement, which provides for
the same services to be provided by Bankers Trust at the same fees as the former
subadvisory agreement, is generally required by the merger of Circle Acquisition
Corporation, a wholly-owned subsidiary of Deutsche Bank AG, with and into
Bankers Trust Corporation, the parent company of Bankers Trust.
The close of business on August 17, 1999 has been fixed as the record
date for the determination of the shareholders of the Fund entitled to notice
of, and to vote at, the Special Meeting. You are cordially invited to attend to
the Special Meeting.
This notice and related proxy material are first being mailed to
shareholders on or about [____________], 1999. This proxy is being solicited on
behalf of the Board of Trustees of the Trust.
By Order of the Board of Trustees,
----------------------------
Secretary
[______________], 1999
IMPORTANT-We urge you to sign and date the enclosed proxy card and to return it
in the enclosed addressed envelope which requires no postage and is intended for
your convenience. Your prompt return of the enclosed proxy card may save the
necessity and expense of further solicitations to ensure a quorum at the Special
Meeting. If you can attend the Special Meeting and wish to vote your shares in
person at that time, you will be able to do so.
<PAGE>
AARP U.S. STOCK INDEX FUND
AARP Growth Trust
Two International Place
Boston, Massachusetts 02110
PROXY STATEMENT
[_________], 1999
This Proxy Statement ("Proxy Statement") is being furnished in
connection with the solicitation of proxies by the Board of Trustees (the
"Board") of AARP Growth Trust (the "Trust") for use at the Special Meeting of
Shareholders of AARP U.S. Stock Index Fund (the "Fund"), a series of the Trust,
to be held at the offices of Scudder Kemper Investments, Inc. ("Scudder
Kemper"), 13th Floor, Two International Place, Boston, Massachusetts 02110 on
[_______], 1999 at [__] a.m., Eastern time and at any and all adjournments
thereof (the "Special Meeting").
This Proxy Statement, the Notice of Special Meeting and the
accompanying proxy card ("Proxy") are expected to be mailed to shareholders on
or about [_________], 1999. Any shareholder giving a Proxy has the power to
revoke it by mail (addressed to the Secretary at the principal executive office
of the Fund, c/o Scudder Kemper Investments, Inc., at 13th Floor, Two
International Place, Boston, Massachusetts 02110) or in person at the Special
Meeting, by executing a superseding Proxy or by submitting a notice of
revocation to the Fund. All properly executed proxies received in time for the
Special Meeting will be voted, as specified in the Proxy or, if no specification
is made, in favor of the Proposal, referred to in the Proxy Statement.
For simplicity, actions are described in this Proxy Statement as being
taken by the Fund, although all actions are actually taken by the Trust on
behalf of the Fund.
The Special Meeting is being held to consider and vote on the following
matter and such other matters as may properly come before the Special Meeting:
PROPOSAL: To approve or disapprove a new subadvisory agreement between
Scudder Kemper and Bankers Trust Company ("Bankers Trust").
The appointed proxies will vote in their discretion on any
other business that may properly come before the Special
Meeting or any adjournment thereof.
The presence at the Special Meeting, in person or by proxy, of the
holders of a majority of the shares of the Fund entitled to be cast shall be
necessary and sufficient to constitute a quorum for the transaction of business.
In the event that the necessary quorum to transact business or the vote required
to approve the Proposal is not obtained at the Special Meeting, the persons
named as proxies may propose one or more adjournments of the Special Meeting in
accordance with applicable law to permit further solicitation of proxies with
respect to the Proposal. Any such adjournment will require the affirmative vote
of the holders of a majority of the Fund's shares present in person or by proxy
at the Special Meeting. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of the
Proposal and will vote against any such adjournment those proxies to be voted
against the Proposal. For purposes of determining the presence of a quorum for
transacting business at the Special Meeting, abstentions and broker "non-votes"
will be treated as shares that are present but which have not been voted. Broker
non-votes are proxies received by the Fund from brokers or nominees when the
broker or nominee has neither received instructions from the beneficial owner or
other persons entitled to vote nor has discretionary power to vote on a
particular matter. Accordingly, shareholders are urged to forward their voting
instructions promptly.
The Proposal requires the affirmative vote of a "majority of the
outstanding voting securities" of the Fund. The term "majority of the
outstanding voting securities," as defined in the Investment Company Act of
1940, as amended (the "1940 Act"), and as used in this Proxy Statement, means
the affirmative vote of the lesser of (1) 67% of the voting securities of the
Fund present at the meeting if more than 50% of the outstanding voting
securities of the Fund are present in person or by proxy or (2) more than 50% of
the outstanding voting securities of the Fund.
Abstentions and broker non-votes will have the effect of a "no" vote on
the Proposal, which requires the approval of a specified percentage of the
outstanding shares of the Fund or of such shares present at the meeting.
Holders of record of the shares of the Fund at the close of business on
August 17, 1999 (the "Record Date"), as to any matter on which they are entitled
to vote, will be entitled to one vote per share on all business of the Special
Meeting. As of [__________, 1999] there were [______] outstanding shares of the
Fund.
To the best of the Trust's knowledge, as of [ , 1999], no person
owned beneficially more than 5% of the Fund's outstanding shares.
Collectively, the Trustees and officers of the Trust own less than 1%
of the outstanding shares of the Fund.
The Fund provides periodic reports to all of its shareholders which
highlight relevant information, including investment results and a review of
portfolio changes. You may receive an additional copy of the most recent annual
report for the Fund and a copy of any more recent semi-annual report, without
charge, by calling 800-225-2470 or writing the Fund, c/o Scudder Kemper
Investments, Inc., at 13th Floor, Two International Place, Boston, Massachusetts
02110.
<PAGE>
PROPOSAL: APPROVAL OF NEW SUBADVISORY AGREEMENT BETWEEN
SCUDDER KEMPER AND BANKERS TRUST
Introduction
Scudder Kemper acts as the investment manager to the Fund pursuant to
an investment management agreement entered into by the Fund and Scudder Kemper
on September 7, 1998. Scudder Kemper has retained Bankers Trust as subadviser to
the Fund to provide subadvisory services relating to the management of the Fund.
The subadvisory arrangement was initially established pursuant to a Subadvisory
Agreement dated September 7, 1998 (the "Former Subadvisory Agreement").
As described in more detail below, the shareholders of the Fund are
being asked to approve a new subadvisory agreement between Scudder Kemper and
Bankers Trust (the "New Subadvisory Agreement" and, together with the Former
Subadvisory Agreement, the "Subadvisory Agreements"). The Former Subadvisory
Agreement may have been deemed to have been automatically terminated upon the
merger of Bankers Trust and Deutsche Bank A.G. ("Deutsche Bank") that is
described below.
The Merger.
Bankers Trust is a wholly-owned subsidiary of Bankers Trust Corporation
("BT Corporation"), a registered bank holding company organized under the laws
of the State of New York. BT Corporation is located at 130 Liberty Street, New
York, NY 10006. On November 30, 1998, BT Corporation, Deutsche Bank and Circle
Acquisition Corporation, a wholly-owned subsidiary of Deutsche Bank ("Circle
Corporation"), entered into a merger agreement (the "Merger Agreement").
Pursuant to the terms of the Merger Agreement, Circle Corporation merged with
and into BT Corporation on June 4, 1999, with BT Corporation continuing as the
surviving entity (the "Merger"). Since the Merger, Bankers Trust, along with its
affiliates, has continued to offer the range of financial products and services,
including investment advisory services, that it offered prior to the Merger.
Impact of the Merger on the Former Subadvisory Agreement.
Section 15(a) of the 1940 Act provides, in pertinent part, that "[i]t shall
be unlawful for any person to serve or act as investment adviser of a registered
investment company, except pursuant to a written contract, which contract,
whether with such registered company or with an investment adviser of such
registered company, has been approved by the vote of a majority of the
outstanding voting securities of such registered company . . . . ." Section
15(a)(4) of the 1940 Act further requires that such written contract provide for
automatic termination in the event of its assignment. Section 2(a)(4) of the
1940 Act defines "assignment" to include any direct or indirect transfer of a
contract by the assignor.
While it may be argued otherwise, consummation of the Merger may have
resulted in an "assignment" of the Former Subadvisory Agreement within the
meaning of the 1940 Act, terminating the agreement according to its terms and
the 1940 Act as of June 4, 1999. Specifically, as Bankers Trust is a
wholly-owned subsidiary of BT Corporation, the merger of Circle Corporation with
and into BT Corporation could be deemed to have resulted in a change in control
of Bankers Trust and, consequently, an "assignment" of the Former Subadvisory
Agreement with Banker Trust. Accordingly, the New Subadvisory Agreement was
approved by the Board and is now being proposed for approval by shareholders of
the Fund.
THE NEW SUBADVISORY AGREEMENT IS SUBSTANTIALLY IDENTICAL TO THE FORMER
SUBADVISORY AGREEMENT, EXCEPT FOR THE DATES OF EXECUTION AND TERMINATION, AND
INITIAL TERM. The material terms of the Subadvisory Agreements are described
under "Description of Subadvisory Agreements." A form of the New Subadvisory
Agreement is attached hereto as Exhibit A and descriptions of the Subadvisory
Agreements below are qualified in their entirety by reference to Exhibit A.
Description of Subadvisory Agreements.
Under the terms of the Subadvisory Agreements, Bankers Trust provides
subadvisory services relating to the management of the Fund's assets, including
developing and implementing an investment program and strategy appropriate for
the Fund to meet its stated investment objective and placing orders for
execution of the Fund's portfolio transactions. Bankers Trust is required to
provide transaction reports to Scudder Kemper and must report to the Board and
Scudder Kemper upon request and at the time of any change in investment strategy
or tactics. In placing orders for portfolio transactions on behalf of the Fund,
Bankers Trust is authorized to cause the Fund to pay to an unaffiliated broker
or dealer commissions that may be higher than those that might be charged by
another broker or dealer if such higher commissions are considered by Bankers
Trust to be reasonable in relation to the value of the research and brokerage
services obtained.
The fees payable to Bankers Trust under the Subadvisory Agreements are
calculated monthly and paid quarterly at an annual rate of 0.07% of the first
$100 million of the Fund's average daily net assets, 0.03% of the next $100
million of such assets, and 0.01% of such average daily net assets in excess of
$200 million, with a minimum annual fee of $75,000. Fees paid to Bankers Trust
during the Fund's fiscal period ended September 30, 1998 totaled [$_____].
The Former Subadvisory Agreement was initially approved by the Board,
including a majority of the Trustees who are not "interested persons"
("Non-Interested Trustees") of the Trust (as defined under the 1940 Act) at
their meeting on August 4, 1998 and was subsequently approved by the
shareholders of the Fund at a meeting on October 20, 1998.
The New Subadvisory Agreement. The New Subadvisory Agreement, which is
currently in effect, is dated the date of the Merger, which was consummated on
June 4, 1999. If shareholders approve the New Subadvisory Agreement, the
agreement will remain in effect for an initial term ending on August 31, 2000,
and may continue thereafter from year to year only if specifically approved at
least annually by the vote of "a majority of the outstanding voting securities"
of the Fund, or by the Board and, in either event, the vote of a majority of the
Non-Interested Trustees, cast in person at a meeting called for such purpose. In
the event that shareholders of the Fund do not approve the New Subadvisory
Agreement, it will terminate. In such event, the Board will take such action as
it deems to be in the best interests of the Fund and its shareholders.
The Exemptive Order
On May 25, 1999, Bankers Trust was granted an exemptive order (the
"Exemptive Order") by the Commission permitting implementation without obtaining
prior shareholder approval of the New Subadvisory Agreement during an interim
period beginning on the date the merger was consummated (i.e. June 4, 1999) and
continuing for a period of up to 150 days following such date, but in no event
later than November 30, 1999. Under the terms of the Exemptive Order, Bankers
Trust is allowed to receive advisory fees pursuant to the New Subadvisory
Agreement, provided that these fees are held in escrow pending shareholder
approval of the New Subadvisory Agreement. In accordance with the Exemptive
Order, the advisory fees charged to the Fund and paid to Bankers Trust, as
applicable, under the New Subadvisory Agreement have been held in an interest
bearing escrow account and the Fund expects to continue to deposit these fees in
escrow until approval of the New Subadvisory Agreement by the shareholders of
the Fund has been obtained. If the New Subadvisory Agreement is not approved by
the shareholders, the advisory fees held in escrow with respect to the agreement
will be paid over to the Fund. [As of [_________], 1999, the amount in escrow
totaled $[__________].]
Differences Between the Former and New Subadvisory Agreements
The New Subadvisory Agreement is substantially identical to the Former
Subadvisory Agreement, except for the dates of execution and termination, and
the initial term. The advisory fee rate charged to the Fund under the Former
Subadvisory Agreement has continued to apply under the New Subadvisory
Agreement. Bankers Trust has advised the Fund that several of its senior
investment management personnel have departed Bankers Trust since the Merger.
However, Bankers Trust has advised the Fund that it can expect to continue to
receive the same level and quality of services under the New Subadvisory
Agreement as it received under the Former Subadvisory Agreement. Bankers Trust
has represented to the Fund's Board that in the event of any material change in
the investment management personnel of Bankers Trust, Bankers Trust will apprise
and consult with the Board to ensure that the Board, including a majority of the
Board's Non-Interested Trustees, is satisfied that the services provided by
Bankers Trust will not be diminished in scope and quality.
Information Concerning Bankers Trust
Bankers Trust is a bank and, therefore, not required to register as an
investment adviser under the Investment Advisers Act of 1940, as amended.
Bankers Trust provides a broad range of commercial banking and financial
services, including originating loans and other forms of credit, accepting
deposits and arranging financings. In addition to providing investment advisory
services to the Fund, Bankers Trust serves as investment adviser and sub-adviser
to 64 other investment companies. (See Appendix 1 for the fees and other
information regarding investment companies advised by Bankers Trust that have
investment objectives similar to those of the Fund.) As of March 31, 1999,
Bankers Trust and its affiliates had over $313 billion in assets under
management.
The names and business addresses of the current directors and principal
executive officer of Bankers Trust are set forth below. The positions at Bankers
Trust of individuals named below constitute their principal occupations.
<TABLE>
<CAPTION>
<S> <C>
Name, Position with Bankers Trust, and Address Principal Occupation
Josef Ackermann Member, Board of Managing Directors
Chairman of the Board, Chief Executive Officer Deutsche Bank A.G.
and President, Bankers Trust Company
Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
Hans Angermueller Shearman & Sterling, of counsel
Director
599 Lexington Avenue
New York, NY 10022
George B. Beitzel Member, Board of Directors of:
Director Computer Task Group, Inc.
29 King Street Phillips Petroleum Company
Chappaqua, NY 10514-3432 TIG Holdings Inc.
William R. Howell Chairman Emeritus, J.C. Penney Company, Inc.
Director Member, Board of Directors/Trustees of:
P.O. Box 10001 Exxon Corporation
Dallas, TX 75301-1109 Halliburton Company
National Organization on Disability
National Retail Federation
Southern Methodist University (Chairman)
Warner-Lambert Company
Hermann-Josef Lamberti Member, Board of Managing Directors
Director Deutsche Bank A.G.
Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
John A. Ross Regional Chief Executive Officer
Director Deutsche Bank Americas Holding Corp.
31 West 52nd Street
New York, New York 10019
Ronaldo H. Schmitz Member, Board of Managing Directors
Director Deutsche Bank A.G.
Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
</TABLE>
Brokerage Commissions on Portfolio Transactions
There were no brokerage commissions paid by the Fund to "affiliated
brokers" (as defined in Schedule 14A under the Securities Exchange Act of 1934,
as amended) for the most recently completed fiscal year.
Section 15(f) of the 1940 Act
Section 15 of the 1940 Act provides that when a change of control of an
investment adviser to an investment company occurs, the investment adviser or
any of its affiliated persons may receive an amount or benefit in connection
therewith as long as two conditions are satisfied.
First, no "unfair burden" may be imposed on the investment company as a
result of the transaction relating to the change of control, or any express or
implied terms, conditions or understandings applicable thereto. As defined in
the 1940 Act, the term "unfair burden" includes any arrangement during the two
(2) year period after the change in control whereby the investment adviser (or
predecessor or successor adviser), or any "interested person" (as defined in the
1940 Act) of such adviser, receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or its security holders
(other than fees for bona fide investment advisory or other services), or from
any person in connection with the purchase or sale of securities or other
property to, from or on behalf of the investment company (other than bona fide
ordinary compensation as principal underwriter for such company). The Board has
been advised by Bankers Trust that there are no circumstances arising from the
Merger that might result in an unfair burden being imposed on the Fund.
The second condition is that, during the three (3) year period
immediately following the Merger, at least 75% of the members of the Fund's
Board must not be "interested persons" of Bankers Trust within the meaning of
the 1940 Act. All current members of the Board are not "interested persons" of
Bankers Trust.
Additional Information
On March 11, 1999, Bankers Trust announced that it had reached an
agreement with the United States Attorney's Office in the Southern District of
New York to resolve an investigation concerning inappropriate transfers of
unclaimed funds and related record-keeping problems that occurred between 1994
and early 1996. Bankers Trust pleaded guilty to misstating entries in the bank's
books and records and agreed to pay $63.5 million in fines to state and federal
authorities. On July 26,1 999, the federal criminal proceedings were concluded
with Bankers Trust's formal sentencing. The events leading up to the guilty
pleas did not arise out of the investment advisory or mutual fund management
activities of Bankers Trust or its affiliates.
As a result of the plea, absent an order from the Commission, Bankers
Trust would not be able to continue to provide investment advisory services to
the Fund. The Commission has granted Bankers Trust a temporary order under
Section 9(c) of the 1940 Act to permit Bankers Trust and its affiliates to
continue to provide investment advisory services to registered investment
companies, and Bankers Trust, pursuant to Section 9(c) of the 1940 Act, has
filed an application for a permanent order. However, there is no assurance that
the Commission will grant a permanent order. If the Commission refuses to grant
a permanent order, shareholders will receive supplemental proxy materials
requesting approval to release any amount held in escrow up to the time of the
refusal and such other action as deemed appropriate by the Trustees of the
Trust.
Recommendation of the Trust's Board
The New Subadvisory Agreement was reviewed and approved by the
Trustees, including a majority of the Non-Interested Trustees, of the Trust at
their meeting on June 23, 1999, to continue until August 31, 2000. In
determining to approve the New Subadvisory Agreement and to recommend it for
approval by shareholders of the Fund, the Trustees considered information and
factors they deemed relevant, including information concerning the growth and
performance of the Fund since its inception on February 1, 1997, as well as
information on Bankers Trust's historic performance in managing index funds
compared to other comparable index funds and its strategy in designing and
managing the Fund. They also considered the fees payable by the Fund for
investment advisory and subadvisory services relative to those paid by other
comparable funds. In addition, at the meetings held on June 23, 1999, the Board,
including the Non-Interested Trustees, was apprised of the guilty pleas
discussed above and the exemptive relief sought by Bankers Trust.
Therefore, after careful consideration, the Board of the Trust,
including the Non-Interested Trustees, recommends that the shareholders of the
Fund vote "FOR" the approval of the New Subadvisory Agreement as set forth in
the Proposal.
If the New Subadvisory Agreement is approved by the shareholders of the
Fund, the agreement will continue in effect as described above. If the New
Subadvisory Agreement is not approved by the shareholders, the advisory fees
held in escrow with respect to the New Subadvisory Agreement will be paid over
to the Fund. In such event, the Board of the Trust will consider what other
action is appropriate based upon the interests of the Fund's shareholders.
THE BOARD OF THE TRUST, INCLUDING THE NON-INTERESTED TRUSTEES, RECOMMENDS THAT
THE SHAREHOLDERS OF THE FUND VOTE "FOR" APPROVAL OF THE PROPOSAL. ANY UNMARKED
PROXIES WILL BE SO VOTED.
<PAGE>
ADDITIONAL INFORMATION
General
The cost of preparing, printing and mailing the enclosed Proxy and
Proxy Statement and all other costs incurred in connection with the solicitation
of proxies, including any additional solicitation made by letter, telephone or
telegraph, will be paid by Bankers Trust. In addition to solicitation by mail,
certain officers and representatives of the Trust, officers and employees of
Scudder Kemper and certain financial services firms and their representatives,
who will receive no extra compensation for their services, may solicit proxies
by telephone, telegram or personally.
Shareholder Communication Corporation ("SCC") has been engaged to
assist in the solicitation of proxies. As the Special Meeting date approaches,
certain shareholders of the Fund may receive a telephone call from a
representative of SCC if their votes have not yet been received. Authorization
to permit SCC to execute proxies may be obtained by telephonic or electronically
transmitted instructions from shareholders of the Fund. Proxies that are
obtained telephonically will be recorded in accordance with the procedures set
forth below. The Trustees believe that these procedures are reasonably designed
to ensure that the identity of the shareholder casting the vote is accurately
determined and that the voting instructions of the shareholder are accurately
determined.
In all cases where a telephonic proxy is solicited, the SCC
representative is required to ask for each shareholder's full name, address,
social security or employer identification number, title (if the shareholder is
authorized to act on behalf of an entity, such as a corporation), and the number
of shares owned, and to confirm that the shareholder has received the proxy
materials in the mail. If the information solicited agrees with the information
provided to SCC, then the SCC representative has the responsibility to explain
the process, read the Proposal on the proxy card, and ask for the shareholder's
instructions on the Proposal. The SCC representative, although he or she is
permitted to answer questions about the process, is not permitted to recommend
to the shareholder how to vote, other than to read any recommendation set forth
in the Proxy Statement. SCC will record the shareholder's instructions on the
card. Within 72 hours, the shareholder will be sent a letter or mailgram to
confirm his or her vote and asking the shareholder to call SCC immediately if
his or her instructions are not correctly reflected in the confirmation.
If a shareholder wishes to participate in the Special Meeting, but does
not wish to give a proxy by telephone, the shareholder may still submit the
Proxy originally sent with the Proxy Statement or attend in person. Should
shareholders require additional information regarding the proxy or replacement
proxy cards, they may contact SCC toll-free at 1-800-248-2681. Any proxy given
by a shareholder, whether in writing or by telephone, is revocable until voted
at the Special Meeting.
Proposals of Shareholders
Meetings of shareholders if for Fund are not held on an annual or other
regular basis. Shareholders wishing to submit proposals for inclusion in a proxy
statement for a shareholder meeting subsequent to the Special Meeting, if any,
should send their written proposals to the Secretary of the Trust, c/o Scudder
Kemper Investments, Inc., 13th Floor, Two International Place, Boston,
Massachusetts 02110, within a reasonable time before the solicitation of proxies
for such meeting. The timely submission of a proposal does not guarantee its
inclusion.
Other Matters To Come Before the Special Meeting
No Board member is aware of any matters that will be presented for
action at the Special Meeting other than the matters set forth herein. Should
any other matters requiring a vote of shareholders arise, the Proxy in the
accompanying form will confer upon the person or persons entitled to vote the
shares represented by such Proxy the discretionary authority to vote the shares
as to any such other matters in accordance with their best judgment in the
interest of the Trust and the Fund.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
By order of the Board of Trustees
- ---------------------------
Secretary
<PAGE>
APPENDIX 1
INVESTMENT OBJECTIVES, NET ASSETS UNDER MANAGEMENT AND ADVISORY FEES OF FUNDS
ADVISED BY BANKERS TRUST ("BT") WITH SIMILAR INVESTMENT OBJECTIVES AS THE
PORTFOLIO
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Bankers Trust Company Proprietary Funds
Net Assets Under Advisory Fees
Fund Management 5-31-99 Payable to BT
S&P Index Funds
Equity 500 Index Portfolio (a) (b) $6,607,007,085.88 0.075%
Includes the following feeder funds:
BT Inst'l: Equity 500 Index Fund (c) $2,391,761,781.53
BT Pyramid Investment Equity 500 Index (d) $929,474,411.08
USAA S&P 500 Index (e) $2,713,859,248.97
Amer AADV: S&P 500 - AMR Class (f) $322,610,586.01
Amer AADV: S&P 500 - Mileage Fund (f) $3,632,960.16
BT Insurance Funds Trust: Equity 500 Index (Variable Annuity) $111,273,342.87 0.20%
(a) (g)
</TABLE>
(a) Information pertaining to advisory fees is shown before expense waivers
and/or reimbursements, if any, are applied.
(b) Master portfolio not available for direct retail purchase.
(c) Feeder fund available to institutional investors through BT.
(d) Feeder fund available to retail investors through BT.
(e) Feeder fund available to customers of United States Automobile Association
and retail public.
(f) Feeder fund available to customers of American Airlines.
(g) Available only through variable annuity products.
<PAGE>
Bankers Trust Company Third Party Sub-Advised Funds
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Assets Under Management
Fund 5-31-99 Fee Schedule
VALIC - American General Series Portfolio Company: A monthly fee computed at the annual rate of
0.02%on the first $2 billion and 0.01% on assets
over $2 billion for the Stock Index Fund. The
Investment Sub-Advisory Agreements
require that each Sub-Adviser promptly reduce
its monthly fee by the amount of any commission,
tender and exchange offer solicitation fees,
other fees or similar payments received by the
Sub-Adviser, or any affiliated person of the
Sub-Adviser, in connection with Sub-Advised
Fund portfolio transactions.
Stock Index Fund (a) $4,624,973,419.19
VALIC - American General Series Portfolio Company With respect to the Stock Index Fund, VALIC
2: shall pay to Bankers Trust, a monthly fee
Stock Index Fund (a) $12,489,608.16 computed at the annual rate of 0.02% of the
first $2 billion and 0.01% of average daily
net asset values on the excess over $2 billion.
EQ Advisors Trust:
BT Equity 500 Index Portfolio (a) $392,561,486.32 0.05% of the Portfolio's average daily net
assets
Fidelity: Manager will pay sub-adviser a monthly fee
Fidelity Commonwealth Trust: computed at an annual rate of 0.006% (0.6 basis
Spartan Market Index Fund $8,573,448,838.36 points) of the average daily net assets of the
Portfolio (computed in the manner set forth
in the Trust's Declaration of Trust) throughout
the month.
Variable Insurance Products Fund II: At an annual rate of 0.006% (0.6 basis points)
Index 500 Portfolio $4,624,170,180.40
Fidelity Concord Street Trust: At an annual rate of 0.006% (0.6 basis points)
Spartan U.S. Equity Index Fund $17,202,394,585.66
Pacific Mutual: A fee is paid at the beginning of each calendar
Pacific Select Fund quarter, based on an annual percentage of the
Equity Index Portfolio (a) $1,808,280,989.82 combined daily net assets of the Equity Index
and Small-Cap Index Portfolios, according to
the following schedule, subject to a
minimum annual fee of $100,000: 0.08 on first $100
million; 0.04% on next $100
million; 0.02% on excess.
SunAmerica Asset Management Corporation:
Seasons Series Trust
Large-Cap Growth Portfolio (a) (b) (c) 0.10% - first $500 million
$5,142,375.93 0.03% - over $500 million
Large-Cap Composite Portfolio (a) (b) (c) $5,308,328.33 0.05% - first $500 million
0.03% - over $500 million
Large-Cap Value Portfolio (a) (b) (c) $5,470,359.19 0.10% - first $500 million
0.03% - over $500 million
</TABLE>
(a) Information pertaining to advisory fees is shown before expense waivers
and/or reimbursements, if any, are applied.
(b) Bankers Trust acts as Sub-Advisor of the portion of the portfolio of this
fund which invests according to an investment strategy that seeks to
replicate a securities index.
(c) For all SunAmerica portfolios listed here, the aggregate annual fees paid
to sub-adviser are subject to the following minimum: first year (April 1999
through March 2000) - no minimum; second year (April 2000 through March
2001) - $300,000 total for the Portfolios combined; third year (April 2001,
through March 2002) - $600,000 total for the Portfolios combined; fourth
year (April 2002, through March 2003) - $850,000 total for the Portfolios
combined; Each subsequent year (beginning April 2003) - $850,000 total for
the Portfolios combined.
<PAGE>
Exhibit A
FORM OF SUBADVISORY AGREEMENT
AGREEMENT made as of [_________________] by and between [Trust Name], a
(state of organization) (herein called the "Trust") and [________________]
(herein called the "Investment Adviser").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940;
WHEREAS, the Trust desires to retain the Investment Adviser to render
investment advisory and other services to the Trust with respect to certain of
its series of shares of beneficial interests as may currently exist or be
created in the future (each, a "Fund") as listed on Exhibit A hereto, and the
Investment Adviser is willing to so render such services on the terms
hereinafter set forth;
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
In consideration of the promises and mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. Appointment. The [Trust] [Investment Adviser] hereby appoints the
Investment Adviser to act as investment adviser to each Fund for the period and
on the terms set forth in this Agreement. The Investment Adviser accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. Management. Subject to the supervision of the [Board of Trustees of
the Trust] [Investment Adviser], the Investment Adviser will provide a
continuous investment program for the Fund, including investment research and
management with respect to all securities, investments, cash and cash
equivalents in the Fund. The Investment Adviser will determine from time to time
what securities and other investments will be purchased, retained or sold by
each Fund. The Investment Adviser will provide the services rendered by it
hereunder in accordance with the investment objective(s) and policies of each
Fund as stated in the Fund's then-current prospectus and statement of additional
information (or the Fund's then current registration statement on Form N-1A as
filed with the Securities and Exchange Commission (the "SEC") and the
then-current offering memorandum if the Fund is not registered under the
Securities Act of 1933, as amended ("1933 Act"). The Investment Adviser further
agrees that:
(a) it will conform with all applicable rules and regulations of the SEC
(herein called the "Rules") and with all applicable provisions of the 1933 Act;
as amended, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
the Investment Company Act of 1940, as amended (the "1940 Act"); and the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and will, in
addition, conduct its activities under this Agreement in accordance with
applicable regulations of the Board of Governors of the Federal Reserve System
pertaining to the investment advisory activities of bank holding companies and
their subsidiaries;
(b) it will place orders pursuant to its investment determinations for each
Fund either directly with the issuer or with any broker or dealer selected by
it. In placing orders with brokers and dealers, the Investment Adviser will use
its reasonable best efforts to obtain the best net price and the most favorable
execution of its orders, after taking into account all factors it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. Consistent with this obligation, the
Investment Adviser may, to the extent permitted by law, purchase and sell
portfolio securities to and from brokers and dealers who provide brokerage and
research services (within the meaning of Section 28(e) of the 1934 Act) to or
for the benefit of any fund and/or other accounts over which the Investment
Adviser or any of its affiliates exercises investment discretion. Subject to the
review of the [Trust's Board of Trustees] [Investment Adviser] from time to time
with respect to the extent and continuation of the policy, the Investment
Adviser is authorized to pay to a broker or dealer who provides such brokerage
and research services a commission for effecting a securities transaction which
is in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Investment Adviser determines in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall responsibilities of
the Investment Adviser with respect to the accounts as to which it exercises
investment discretion; and
(c) it will maintain books and records with respect to the securities
transactions of each Fund and will render to the [Trust's Board of Trustees]
[Investment Adviser] such periodic and special reports as the Board may request.
3. Services Not Exclusive. The investment advisory services rendered by
the Investment Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser shall be free to render similar services to others so long as
its services under this Agreement are not impaired thereby.
4. Books and Records. In compliance with the requirements of Rule 31a-3
of the Rules under the 1940 Act, the Investment Adviser hereby agrees that all
records which it maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the [Trust] [Investment Adviser] any of
such records upon request of the [Trust] [Investment Adviser]. The Investment
Adviser further agrees to 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 and to comply in full with the requirements of Rule 204-2 under the
Advisers Act pertaining to the maintenance of books and records.
5. Expenses. During the term of this Agreement, the Investment Adviser
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of purchasing securities (including brokerage
commissions, if any) for the Fund.
6. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, [_________] will pay the Investment Adviser, and the
Investment Adviser will accept as full compensation therefor, fees, computed
daily and payable monthly, on an annual basis equal to the percentage set forth
on Exhibit A hereto of that Fund's average daily net assets.
7. Limitation of Liability of the Investment Adviser Indemnification.
(a) The Investment Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by a Fund in connection with the matters
to which this Agreement relates, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Investment Adviser in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement;
(b) Subject to the exceptions and limitations contained in Section 7(c)
below:
(i) the Investment Adviser (hereinafter referred to as a "Covered
Person") shall be indemnified by the respective Fund to the fullest extent
permitted by law, against liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action, suit or
proceeding in which he becomes involved, as a party or otherwise, by virtue
of his being or having been the Investment Adviser of the Fund, and against
amounts paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened while in office or thereafter, and
the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(c) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the [Trust]
[Investment Adviser] or to one or more Funds' investors by reason
of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office, or
(B) not to have acted in good faith in the reasonable belief that
his action was in the best interest of a Fund; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office;
(A) by the court or other body approving the settlement; or
(B) by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the
matter based upon a review of readily available facts (as
opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full
trial-type inquiry); provided, however, that any investor in
a Fund may, by appropriate legal proceedings, challenge any
such determination by the Trustees or by independent
counsel.
(d) The rights of indemnification herein provided may be insured against by
policies maintained by the [Trust] [Investment Adviser], shall be severable,
shall not be exclusive of or affect any other rights to which any Covered Person
may now or hereafter be entitled, shall continue as to a person who has ceased
to be a Covered Person and shall inure to the benefit of the successors and
assigns of such person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel and any other persons, other than a
Covered Person, may be entitled by contract or otherwise under law.
(e) Expenses in connection with the preparation and presentation of a
defense to any claim, suit or proceeding of the character described in
subsection (b) of this Section 7 may be paid by the [Trust] [Investment Adviser]
on behalf of the respective Fund from time to time prior to final disposition
thereto upon receipt of an undertaking by or on behalf of such Covered Person
that such amount will be paid over by him to the [Trust] [Investment Adviser] on
behalf of the respective Fund if it is ultimately determined that he is not
entitled to indemnification under this Section 7; provided, however, that either
(i) such Covered Person shall have provided appropriate security for such
undertaking or (ii) the [Trust] [Investment Adviser] shall be insured against
losses arising out of any such advance payments, or (iii) either a majority of
the Trustees who are neither Interested Persons of the Trust nor parties to the
matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts as opposed to a
trial-type inquiry or full investigation, that there is reason to believe that
such Covered Person will be entitled to indemnification under this Section 7.
8. Duration and Termination. This Agreement shall be effective as to a
Fund as of the date the Fund commences investment operations after this
Agreement shall have been approved by the Board of Trustees of the Trust with
respect to that Fund and the Investor(s) in the Fund in the manner contemplated
by Section 15 of the 1940 Act and, unless sooner terminated as provided herein,
shall continue until the second anniversary of such date. Thereafter, if not
terminated, this Agreement shall continue in effect as to such Fund for
successive periods of 12 months each, provided such continuance is specifically
approved at least annually (a) by the vote of a majority of those members of the
Board of Trustees of the Trust who are not parties to this Agreement or
Interested Persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, or (b) by Vote of a Majority of the
Outstanding Voting Securities of the Trust; provided, however, that this
Agreement may be terminated by the Trust at any time, without the payment of any
penalty, by the Board of Trustees of the Trust, by Vote of a Majority of the
Outstanding Voting Securities of the Trust on 60 days' written notice to the
Investment Adviser, or by the Investment Adviser as to the [Trust] [Investment
Adviser] at any time, without payment of any penalty, on 90 days' written notice
to the [Trust] [Investment Adviser]. This Agreement will immediately terminate
in the event of its assignment (as used in this Agreement, the terms "Vote of a
Majority of the Outstanding Voting Securities," "Interested Person" and
"Assignment" shall have the same meanings as such terms have in the 1940 Act and
the rules and regulatory constructions thereunder.)
9. Amendment of this Agreement. No material term of this Agreement may
be changed, 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, and no amendment of a material term of this
Agreement shall be effective with respect to a Fund, until approved by Vote of a
Majority of the Outstanding Voting Securities of that Fund.
10. Representations and Warranties. The Investment Adviser hereby
represents and warrants as follows:
(a) [The Investment Adviser is exempt from registration under the 1940 Act:]
(b) The Investment Adviser has all requisite authority to enter into, execute,
deliver and perform its obligations under this Agreement;
(c) This Agreement is legal, valid and binding, and enforceable in accordance
with its terms; and
(d) The performance by the Investment Adviser of its obligations under this
Agreement does not conflict with any law to which it is subject.
11. Covenants. The Investment Adviser hereby covenants and agrees that,
so long as this Agreement shall remain in effect:
(a) The Investment Adviser shall remain either exempt from, or registered under,
the registration provisions of the Advisers Act; and
(b) The performance by the Investment Adviser of its obligations under this
Agreement shall not conflict with any law to which it is then subject.
12. Notices. Any notice required to be given pursuant to this Agreement
shall be deemed duly given if delivered or mailed by registered mail, postage
prepaid, (a) to the Investment Adviser, Mutual Funds Services, 130 Liberty
Street (One Bankers Trust Plaza), New York, New York 10006, and (b) to the
Trust, c/o BT Alex. Brown, Incorporated, One South Street, Baltimore, Maryland
21202.
13. Waiver. With full knowledge of the circumstances and the effect of
its action, the Investment Adviser hereby waives any and all rights which it may
acquire in the future against the property of any investor in a Fund, other than
shares in that Fund, which arise out of any action or inaction of the [Trust]
[Investment Adviser] under this Agreement.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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 and shall be governed by the
laws of the ______________________________, without reference to principles of
conflicts of law. The Trust is organized under the laws of
_________________________________ pursuant to a ______________ dated
______________. No Trustee, officer or employee of the Trust shall be personally
bound by or liable hereunder, nor shall resort be had to their private property
for the satisfaction of any obligation or claim hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
[SIGNATORIES]
<PAGE>
EXHIBIT A
TO
INVESTMENT ADVISORY AGREEMENT
MADE AS OF ____________________
BETWEEN
[Trust Name] AND [______________]
Fund Investment Advisory Fee
<PAGE>
FORM OF PROXY CARD
AARP U.S. STOCK INDEX FUND
AARP Growth Trust
Two International Place
Boston, Massachusetts 02110
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
[__] a.m., on [_________], 1999
The undersigned hereby appoints [________], [_________] and
[_________], and each of them, the proxies of the undersigned, with the power of
substitution to each of them, to vote all shares of the AARP U.S. Stock Index
Fund (the "Fund") which the undersigned is entitled to vote at the Special
Meeting of shareholders of the Fund to be held at the offices of Scudder Kemper
Investments, Inc., Two International Place, Boston, Massachusetts 02110, on
[______], 1999 at [_______] a.m., Eastern time, and at any adjournments thereof.
PLEASE SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
Dated _________________, 1999
Please sign exactly as your
name or names appear. When
signing as attorney,
executor, administrator,
trustee or guardian, please
give your full title as
such.
Signature(s) of Shareholder(s)
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED.
<PAGE>
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE UNDERSIGNED'S VOTE WILL
BE CAST FOR THE ITEM LISTED BELOW.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE AARP GROWTH
TRUST. THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSAL.
Please vote by filling in the boxes below.
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To approve or disapprove a new subadvisory
agreement between Scudder Kemper Investments,
Inc. and Bankers Trust Company. FOR AGAINST ABSTAIN
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The proxies are authorized to vote in their discretion on any other business
which may properly come before the meeting and any adjournments thereof.
