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 (Amendment No.__ )
Filed by the Registrant [X]
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
[ ] Definitive Proxy Statement Rule 14a(e)(2))
[ ] 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)
(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>
AARP GROWTH TRUST
AARP Capital Growth Fund
AARP Small Company Stock Fund
Two International Place
Boston, Massachusetts 02110-4103
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
Please take notice that Special Meetings of Shareholders (each, a
"Meeting") of AARP Capital Growth Fund and AARP Small Company Stock Fund (each
such series is referred to herein as a "Fund"), each of which is a series of
AARP Growth Trust (the "Trust"), will be held jointly at the offices of Scudder
Kemper Investments, Inc., Floor 13, Two International Place, Boston, MA
02110-4103, on July 11, 2000, at 2:00 p.m., Eastern time, for the following
purposes:
Proposal 1: To elect Trustees of the Trust.
Proposal 2: To approve an Agreement and Plan of Reorganization
for each Fund whereby all or substantially all the
assets and the liabilities of each Fund would be
acquired by new series of Investment Trust in
exchange for shares of the AARP Shares class of such
series.
Proposal 3: To ratify the selection of PricewaterhouseCoopers
LLP as the independent accountants for each Fund for
each Fund's current fiscal year.
The appointed proxies will vote in their discretion on any other
business that may properly come before a Meeting or any adjournments thereof.
Holders of record of shares of each Fund at the close of business on
April 17, 2000 are entitled to vote at the Meetings and at any adjournments
thereof.
In the event that the necessary quorum to transact business or the vote
required to approve any Proposal is not obtained at the Meeting with respect to
either Fund, the persons named as proxies may propose one or more adjournments
of the Meeting in accordance with applicable law to permit further solicitation
of proxies. Any such adjournment as to a matter will require the affirmative
vote of the holders of a majority of the concerned Fund's shares present in
person or by proxy at the Meeting. The persons named as proxies will vote FOR
any such adjournment those proxies which they are entitled to vote in favor of
that Proposal and will vote AGAINST any such adjournment those proxies to be
voted against that Proposal.
By Order of the Board,
[Signature]
Kathryn L. Quirk,
Secretary
[date]
IMPORTANT -- We urge you to sign and date the enclosed proxy card(s) and return
it in the enclosed envelope which requires no postage (or to take advantage of
the electronic or telephonic voting procedures described on the proxy card(s)).
Your prompt return of the enclosed proxy card(s) (or your voting by other
available means) may save the necessity and expense of further solicitations. If
you wish to attend the Meeting and vote your shares in person at that time, you
will still be able to do so.
<PAGE>
AARP Growth Trust
AARP Capital Growth Fund
AARP Small Company Stock Fund
Two International Place
Boston, Massachusetts 02110-4103
JOINT PROXY STATEMENT
GENERAL
This Proxy Statement is being furnished to shareholders of each of
AARP Capital Growth Fund ("Capital Growth") and AARP Small Company Stock Fund
("Small Company") (each, a "Fund," and together, the "Funds"), each of which is
a series of AARP Growth Trust (the "Trust"). The Board of Trustees (the "Board",
the Trustees on which are referred to as "Trustees") of the Trust is soliciting
proxies from shareholders on behalf of each Fund, for use at the Special
Meetings of Shareholders of the Funds, to be held jointly at the offices of
Scudder Kemper Investments, Inc., the investment manager of each Fund ("Scudder
Kemper"), Floor 13, Two International Place, Boston, Massachusetts 02110-4103,
on July 11, 2000 at 2:00 p.m., Eastern time, and at any and all adjournments
thereof (the "Meeting").
At the Meetings, shareholders will be asked to vote on three proposals
(each a "Proposal"). Proposal 1 describes the election of Trustees, and Proposal
3 proposes the ratification of each Fund's accountants. Proposals 1 and 2 relate
to a restructuring program proposed by Scudder Kemper and also described in more
detail below. In Proposal 2, shareholders are asked to approve proposed
reorganizations in which all or substantially all of the assets of Capital
Growth and Small Company would be acquired by two newly-formed series of
Investment Trust, Scudder Capital Growth Fund and Scudder Small Company Stock
Fund (together, the "Series"), respectively, in exchange for shares of
beneficial interest of the AARP Shares class of the applicable Series (known as
"AARP Shares") and the assumption by the Series of all of the liabilities of its
respective Fund, as described more fully below (each a "Reorganization" and
together, the "Reorganizations").
In the descriptions of the Proposals below, the word "fund" is
sometimes used to mean an investment company or series thereof in general, and
not the Funds whose proxy statement this is. In addition, in this Proxy
Statement, for simplicity, actions are described as being taken by a Fund that
is a series of the Trust, although all actions are actually taken by the Trust
on behalf of the applicable series.
EACH 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 EACH FUND AND A COPY OF ANY MORE RECENT SEMI-ANNUAL REPORT, WITHOUT
CHARGE, BY CALLING 800-253-2277 OR WRITING THE FUND, C/O SCUDDER KEMPER
INVESTMENTS, INC., AT THE ADDRESS FOR EACH FUND SHOWN AT THE BEGINNING OF THIS
PROXY STATEMENT.
BACKGROUND
Proposals 1 and 2 are part of a broader restructuring program proposed
by Scudder Kemper to respond to changing industry conditions and investor needs.
Scudder Kemper seeks to offer the full line-up of the Scudder Family of Funds to
members of the AARP Investment Program. The expanded offering should position
the AARP Investment Program to meet the increasingly diverse needs of current
and prospective AARP members.
Scudder Kemper and AARP have advised the Board that they believe that
the proposed changes in the AARP Investment Program from Scudder are in the
interest of shareholders of the funds offered through the AARP Investment
Program (the "AARP Funds") and AARP members: the Program would consist of
forty-three no-load funds compared with the current sixteen and would retain its
separate identity with separate statements and lower minimum investments for
participating shareholders; six core funds would continue to have a risk managed
strategy; education will remain an objective of Scudder Kemper; and AARP will
continue to be involved with the Program and is proposed to have Board
representation.
As part of this initiative, Scudder Kemper has sought ways to
restructure and streamline the management and operations of the funds it
advises. Scudder Kemper believes, and has advised the boards, that the
consolidation of certain funds advised by it would benefit fund shareholders.
Scudder Kemper has, therefore, proposed the consolidation of a number of no-load
funds advised by it that Scudder Kemper believes have similar or compatible
investment objective and policies. In many cases, the proposed consolidations
are designed to eliminate the substantial overlap in current offerings by the
Scudder Funds and the AARP Funds, all of which are advised by Scudder Kemper.
Consolidation plans are proposed for other funds that have not gathered enough
assets to operate efficiently and, in turn, have relatively high expense ratios.
Scudder Kemper believes that these consolidations may help to enhance investment
performance of funds and increase efficiency of operations.
Many of the proposed consolidations are also expected to result in
lower operating expenses for shareholders of acquired funds. Subject to the
approval of the shareholders of Scudder Micro Cap Fund, Small Company will
acquire the assets of Scudder Micro Cap Fund as part of the restructuring
program.
There are currently five different boards for the no-load funds advised
by Scudder Kemper. Scudder Kemper believes, and has proposed to the boards, that
creating a single board responsible for most of the no-load funds advised by
Scudder Kemper would increase efficiency and benefit fund shareholders. (See
Proposal 1 below.)
As part of this restructuring effort, Scudder Kemper has also proposed
the adoption of an administrative fee for most of the no-load funds advised by
Scudder Kemper. Under this fee structure, in exchange for the payment by each
Series of an administrative fee, Scudder Kemper would agree to provide or pay
for substantially all services that a fund normally requires for its operations,
other than those provided under the fund's investment management agreement and
except for certain other expenses. Such an administrative fee would enable
investors to determine with greater certainty the expense level that a fund will
experience, and would transfer substantially all of the risk of increased costs
to Scudder Kemper. Each Series is expected to implement such an administrative
fee upon the Closing of its Reorganization, as described in "Administrative Fee"
below.
PROPOSAL 1: ELECTION OF TRUSTEES
At the Meeting, shareholders will be asked to elect nine individuals to
constitute the Board of Trustees of the Trust. These individuals were nominated
after a careful and deliberate selection process by the present Board of
Trustees of the Trust. The nominees for election, who are listed below, include
seven persons who currently serve as Independent Trustees (as defined below) of
the Trust or of other no-load funds advised by Scudder Kemper and who have no
affiliation with Scudder Kemper or the American Association of Retired Persons
("AARP"). The nominees listed below are also being nominated for election as
trustees or directors of most of the other no-load funds advised by Scudder
Kemper.
Currently five different boards of trustees or directors are
responsible for overseeing different groups of no-load funds advised by Scudder
Kemper. As part of a broader restructuring effort described above, Scudder
Kemper has recommended, and the Board of Trustees has agreed, that shareholder
interests can more effectively be represented by a single board with
responsibility for overseeing substantially all of the Scudder no-load funds.
Creation of a single, consolidated board should also provide certain
administrative efficiencies and potential future cost savings for both the Funds
and Scudder Kemper.
Election of each of the listed nominees for Trustee on the Board
requires the affirmative vote of a plurality of the votes cast at the Meeting,
in person or by proxy. The persons named as proxies on the enclosed proxy card
will vote for the election of the nominees named below unless authority to vote
for any or all of the nominees is withheld in the proxy. Each Trustee so elected
will serve as a Trustee of the Trust until the next meeting of shareholders, if
any, called for the purpose of electing Trustees and until the election and
qualification of a successor or until such Trustee sooner dies, resigns or is
removed as provided in the governing documents of the Trust. Each of the
nominees has indicated that he or she is willing to serve as a Trustee. If any
or all of the nominees should become unavailable for election due to events not
now known or anticipated, the persons named as proxies will vote for such other
nominee or nominees as the current Trustees may recommend. The following
paragraphs and table set forth information concerning the nominees and the
Trustees not standing for re-election. Each nominee's or Trustee's age is in
parentheses after his or her name. Unless otherwise noted, (i) each of the
nominees and Trustees has engaged in the principal occupation(s) listed in the
following paragraphs and table for at least the most recent five years, although
not necessarily in the same capacity, and (ii) the address of each nominee is
c/o Scudder Kemper Investments, Inc., Two International Place, Boston, MA
02110-4103.
Nominees for Election as Trustees:
Henry P. Becton, Jr. (56)
Henry P. Becton, Jr. is president of the WGBH Educational Foundation, producer
and distributor of public broadcasting programming and educational and
interactive software. He graduated from Yale University in 1965, where he was
elected to Phi Beta Kappa. He received his J.D. degree cum laude from Harvard
Law School in 1968. Mr. Becton is a member of the PBS Board of Directors, a
Trustee of American Public Television, the New England Aquarium, the Boston
Museum of Science, Concord Academy, and the Massachusetts Corporation for
Educational Telecommunications, an Overseer of the Boston Museum of Fine Arts,
and a member of the Board of Governors of the Banff International Television
Festival Foundation. He is also a Director of Becton Dickinson and Company and
A.H. Belo Company, a Trustee of the Committee for Economic Development, and a
member of the Board of Visitors of the Dimock Community Health Center, the
Dean's Council of Harvard University's Graduate School of Education, and the
Massachusetts Bar. Mr. Becton has served as a trustee of various mutual funds
advised by Scudder Kemper since 1990.
Linda C. Coughlin (48)*
Linda C. Coughlin, a Managing Director of Scudder Kemper, is head of Scudder
Kemper's U.S. Retail Mutual Funds Business. Ms. Coughlin joined Scudder Kemper
in 1986 and was a member of the firm's Board of Directors. She currently
oversees the marketing, service and operations of Scudder Kemper retail
businesses in the United States, which include the Scudder, Kemper, AARP, and
closed-end fund families, and the direct and intermediary channels. She also
serves as Chairperson of the AARP Investment Program from Scudder and as a
Trustee of the Program's mutual funds. Ms. Coughlin is also a member of the
Mutual Funds Management Group. Previously, she served as a regional Marketing
Director in the retail banking division of Citibank and at the American Express
Company as Director of Consumer Marketing for the mutual fund group. Ms.
Coughlin received a B.A. degree in economics (summa cum laude) from Fordham
University. Ms. Coughlin is currently a Trustee of the Trust and has served on
the boards of various funds advised by Scudder Kemper, including the AARP
Investment Program Funds, since 1996.
Dawn-Marie Driscoll (53)
Dawn-Marie Driscoll is an Executive Fellow and Advisory Board member of the
Center for Business Ethics at Bentley College, one of the nation's leading
institutes devoted to the study and practice of business ethics. Ms. Driscoll is
also president of Driscoll Associates, a consulting firm. She is a member of the
Board of Governors of the Investment Company Institute and serves as Chairman of
the Directors Services Committee. Ms. Driscoll was recently named 1999 "Fund
Trustee of the Year" by Fund Directions, a publication of Institutional
Investor, Inc. She has been a director, trustee and overseer of many civic and
business institutions, including The Massachusetts Bay United Way and Regis
College. Ms. Driscoll was formerly a law partner at Palmer & Dodge in Boston and
served for over a decade as Vice President of Corporate Affairs and General
Counsel of Filene's, the Boston-based department store chain. Ms. Driscoll
received a B.A. from Regis College, a J.D. from Suffolk University Law School, a
D.H.L. (honorary) from Suffolk University and a D.C.S. (honorary) from Bentley
College Graduate School of Business. Ms. Driscoll has served as a trustee of
various mutual funds advised by Scudder Kemper since 1987.
Edgar R. Fiedler (70)
Edgar R. Fiedler is Senior Fellow and Economic Counsellor at The Conference
Board. He served as the Board's Vice President, Economic Research from 1975 to
1986 and as Vice President and Economic Counsellor from 1986 to 1996. Mr.
Fiedler's business experience includes positions at Eastman Kodak in Rochester
(1956-59), Doubleday and Company in New York City (1959-60), and Bankers Trust
Company in New York City (1960-69). He also served as Assistant Secretary of the
Treasury for Economic Policy from 1971 to 1975. Mr. Fiedler graduated from the
University of Wisconsin in 1951. He received his M.B.A. from the University of
Michigan and his doctorate from New York University. During the 1980's, Mr.
Fiedler was an Adjunct Professor of Economics at the Columbia University
Graduate School of Business. From 1990 to 1991, he was the Stephen Edward Scarff
Distinguished Professor at Lawrence University in Wisconsin. Mr. Fiedler is a
Director of The Stanley Works, Harris Insight Funds, Brazil Fund, and PEG
Capital Management, Inc. He is currently a Trustee of the Trust and has served
as a board member of various mutual funds advised by Scudder Kemper, including
the AARP Investment Program Funds, since 1984.
Keith R. Fox (46)
Keith R. Fox is the managing partner of the Exeter Group of Funds, a series of
private equity funds with offices in New York and Boston, which he founded in
1986. The Exeter Group invests in a wide range of private equity situations,
including venture capital, expansion financings, recapitalizations and
management buyouts. Prior to forming Exeter, Mr. Fox was a director and vice
president of BT Capital Corporation, a subsidiary of Bankers Trust New York
Corporation organized as a small business investment company and based in New
York City. Mr. Fox graduated from Oxford University in 1976 and in 1981 received
an M.B.A. degree from the Harvard Business School. Mr. Fox is also a qualified
accountant. He is a board member and former Chairman of the National Association
of Small Business Investment Companies, and a director of Golden State Vintners,
K-Communications, Progressive Holding Corporation and Facts On File, as well as
a former director of over twenty companies. Mr. Fox has served as a trustee of
various mutual funds advised by Scudder Kemper since 1996.
Joan Edelman Spero (55)
Joan E. Spero is the president of the Doris Duke Charitable Foundation, a
position to which she was named in January 1997. From 1993 to 1997, Ms. Spero
served as Undersecretary of State for Economic, Business and Agricultural
Affairs under President Clinton. From 1981 to 1993, she was an executive at the
American Express Company, where her last position was executive vice president
for Corporate Affairs and Communications. Ms. Spero served as U.N. Ambassador to
the United Nations Economic and Social Council under President Carter from 1980
to 1981. She was an assistant professor at Columbia University from 1973 to
1979. She graduated Phi Beta Kappa from the University of Wisconsin and holds a
master's degree in international affairs and a doctorate in political science
from Columbia University. Ms. Spero is a member of the Council on Foreign
Relations and the Council of American Ambassadors. She also serves as a trustee
of the Wisconsin Alumni Research Foundation, The Brookings Institution and
Columbia University and is a Director of First Data Corporation. Ms. Spero has
served as a trustee of various mutual funds advised by Scudder Kemper since
1998.
Jean Gleason Stromberg (56)
Ms. Stromberg acts as a consultant on regulatory matters. From 1996 to 1997, Ms.
Stromberg represented the U.S. General Accounting Office before Congress and
elsewhere on issues involving banking, securities, securities markets, and
government-sponsored enterprises. Prior to that, Ms. Stromberg was a corporate
and securities law partner at the Washington, D.C. law office of Fulbright and
Jaworski, a national law firm. She served as Associate Director of the SEC's
Division of Investment Management from 1977 to 1979 and prior to that was
Special Counsel for the Division of Corporation Finance from 1972 to 1977. Ms.
Stromberg graduated Phi Beta Kappa from Wellesley College and received her law
degree from Harvard Law School. From 1988 to 1991 and 1993 to 1996, she was a
Trustee of the American Bar Retirement Association, the funding vehicle for
American Bar Association-sponsored retirement plans. Ms. Stromberg serves on the
Wellesley College Business Leadership Council and the Council for Mutual Fund
Director Education at Northwestern University Law School and was a panelist at
the SEC's Investment Company Director's Roundtable. Ms. Stromberg is currently a
Trustee of the Trust and has served as a board member of the AARP Investment
Program Funds since 1997.
Jean C. Tempel (56)
Jean C. Tempel is a venture partner for Internet Capital Group, a strategic
network of Internet partnership companies whose principal offices are in Wayne,
Pennsylvania. Ms. Tempel concentrates on investment opportunities in the Boston
area. She spent 25 years in technology/operations executive management at
various New England banks, building custody operations and real time
financial/securities processing systems, most recently as Chief Operations
Officer at The Boston Company. From 1991 until 1993 she was president/COO of
Safeguard Scientifics, a Pennsylvania technology venture company. In that role
she was a founding investor, director and vice chairman of Cambridge Technology
Partners. She is a director of XLVision, Inc., Marathon Technologies, Inc.,
Aberdeen Group and Sonesta Hotels International, and is a Trustee of
Northeastern University, Connecticut College, and The Commonwealth Institute.
She received a B.A. from Connecticut College, an M.S. from Rensselaer
Polytechnic Institute of New York, and attended Harvard Business School's
Advanced Management Program. Ms. Tempel has served as a trustee of various
mutual funds advised by Scudder Kemper since 1994.
Steven Zaleznick (45)*
Steven Zaleznick is President and CEO of AARP Services, Inc., a wholly-owned and
independently-operated subsidiary of AARP which manages a range of products and
services offered to AARP members, provides marketing services to AARP and its
member service providers and establishes an electronic commerce presence for
AARP members. Mr. Zaleznick previously served as AARP's general counsel for nine
years. He was responsible for the legal affairs of the AARP, which included tax
and legal matters affecting non-profit organizations, contract negotiations,
publication review and public policy litigation. In 1979, he joined the AARP as
a legislation representative responsible for issues involving taxes, pensions,
age discrimination, and other national issues affecting older Americans. Mr.
Zaleznick is President of the Board of Cradle of Hope Adoption Center in
Washington, D.C. He is a former treasurer and currently a board member of the
National Senior Citizens Law Center. Mr. Zaleznick received his B.A. in
economics from Brown University. He received his J.D. degree from Georgetown
University Law Center and is a member of the District of Columbia Bar
Association.
Trustees Not Standing for Re-election:
<TABLE>
<CAPTION>
<S> <C>
Present Office with the Trust,
Principal Occupation or Employment
Name (Age) and Directorships
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Horace B. Deets* (61) Vice Chairperson and Trustee; Executive Director, AARP
(1989 - Present). Mr. Deets serves on the Boards of an
additional 4 trusts whose funds are advised by Scudder
Kemper.
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Carole Lewis Anderson (55) Trustee; Principal, Suburban Capital Markets, Inc.
(1995 - Present). Ms. Anderson serves on the Boards of
an additional 4 trusts whose funds are advised by
Scudder Kemper.
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Adelaide Attard (69) Trustee; Member, NYC Department of Aging Advisory
Council (1995 - Present); Consultant, Gerontology
Commissioner, County of Nassau, New York, Department of
Senior Citizen Affairs (1971-1991). Ms. Attard serves
on the Boards of an additional 4 trusts whose funds are
advised by Scudder Kemper.
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Robert N. Butler, M.D. (73) Trustee; Director, International Longevity Center and
Professor of Geriatrics and Adult Development;
Chairman, Henry L. Schwartz Department of Geriatrics
and Adult Development, Mount Sinai Medical Center (1982
- present). Dr. Butler serves on the Boards of an
additional 4 trusts whose funds are advised by Scudder
Kemper.
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Lt. Gen. Eugene P. Forrester (73) Trustee; Lt. General (Retired), U.S. Army;
International Trade Counselor (1983 - present);
Consultant. Lt. Gen. Forrester serves on the Boards of
an additional 4 trusts whose funds are advised by
Scudder Kemper.
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George L. Maddox, Jr. (74) Trustee; Professor Emeritus and Director, Long Term
Care Resources Program, Duke University Medical Center;
Professor Emeritus of Sociology, Departments of
Sociology and Psychiatry, Duke University. Mr. Maddox
serves on the Boards of an additional 4 trusts whose
funds are advised by Scudder Kemper.
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Robert J. Myers (87) Trustee; Actuarial Consultant (1983 - present). Mr.
Myers serves on the Boards of an additional 4 trusts
whose funds are advised by Scudder Kemper.
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James H. Schulz (63) Trustee; Professor of Economics and Kirstein Professor
of Aging Policy, Policy Center on Aging, Florence
Heller School, Brandeis University. Mr. Schulz serves
on the Boards of an additional 4 trusts whose funds are
advised by Scudder Kemper.
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Gordon Shillinglaw (74) Trustee; Professor Emeritus of Accounting, Columbia
University Graduate School of Business. Mr.
Shillinglaw serves on the Boards of an additional 4
trusts whose funds are advised by Scudder Kemper.
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</TABLE>
* Trustee or nominee considered by the Trust and its counsel to be an
"interested person" (as defined in the Investment Company Act of 1940,
as amended (the "1940 Act")) of the Trust, Scudder Kemper or AARP
because of his or her employment by Scudder Kemper or AARP, and, in
some cases, holding offices with the Trust.
Responsibilities of the Board -- Board and Committee Meetings
A fund's board is responsible for the general oversight of fund
business. The board that is proposed for shareholder voting at each Meeting is
comprised of two individuals who are considered "interested" Trustees, and seven
individuals who have no affiliation with Scudder Kemper and who are called
"independent" Trustees (the "Independent Trustees"). The SEC has recently
proposed a rule that would require a majority of the board members of a fund to
be "independent" if the fund were to take advantage of certain exemptive rules
under the 1940 Act. On the proposed Board of Trustees, if approved by
shareholders, nearly 78% will be Independent Trustees. The Independent Trustees
have been nominated solely by the current Independent Trustees of the Trust, a
practice also favored by the SEC. The Independent Trustees have primary
responsibility for assuring that each Fund is managed in the best interests of
its shareholders.
The Trustees meet several times during the year to review the
investment performance of each series of the Trust and other operational
matters, including policies and procedures designed to assure compliance with
regulatory and other requirements. Furthermore, the Independent Trustees review
the fees paid to the investment manager and its affiliates for investment
advisory services and other administrative and shareholder services. The
Trustees have adopted several policies and practices which help ensure their
effectiveness and independence in reviewing fees and representing shareholders.
Many of these are similar to those suggested in the Investment Company
Institute's 1999 Report of the Advisory Group on Best Practices for Fund
Directors (the "Advisory Group Report"). For example, the Independent Trustees
select independent legal counsel to work with them in reviewing fees, advisory
and other contracts and overseeing fund matters. Trustees are also assisted in
this regard by the Funds' independent public accountants and other independent
experts retained for this purpose. The Independent Trustees regularly meet
privately with their counsel and other advisors. In addition, the Independent
Trustees from time to time have appointed task forces and subcommittees from
their members to focus on particular matters.
The Board has an Audit Committee and a Committee on Independent
Trustees, the responsibilities of which are described below. In addition, the
Board has an Executive Committee, a Shareholder Service Committee and a
Valuation Committee.
Audit Committee
The Audit Committee reviews with management and the independent public
accountants for each series of the Trust, among other things, the scope of the
audit and the internal controls of each series of the Trust and its agents,
reviews and approves in advance the type of services to be rendered by
independent accountants, recommends the selection of independent accountants for
each series of the Trust to the Board, reviews the independence of such firm
and, in general, considers and reports to the Board on matters regarding the
accounting and financial reporting practices of each series of the Trust.
As suggested by the Advisory Group Report, the Trust's Audit Committee
is comprised of the Independent Trustees, meets privately with the independent
accountants of each series of the Trust, will receive annual representations
from the accountants as to their independence, and has a written charter that
delineates the committee's duties and powers.
Committee on Independent Trustees
The Board of Trustees of the Trust has a Committee on Independent
Trustees, comprised solely of Independent Trustees, charged with the duty of
making all nominations of Independent Trustees, establishing Trustees'
compensation policies and reviewing matters relating to the Independent
Trustees.
Attendance
The full Board of Trustees of the Trust met six times, the Audit
Committee met two times and the Committee on Independent Trustees met five times
during calendar year 1999. Each then current Trustee attended 100% of the total
meetings of the Board and each above named committee on which he or she served
as a regular member that were held during that period, except Horace B. Deets,
Robert J. Myers, James H. Schulz and Robert N. Butler, who attended 90%, 85%,
92% and 85%, respectively, of those meetings. In addition to these Board and
committee meetings, the Trustees of the Trust attended various other meetings on
behalf of the Trust during the year, including meetings with their independent
legal counsel and informational meetings.
Officers
The following persons are officers of the Trust:
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Present Office with the Trust; Year First
Principal Occupation Became an
Name (Age) or Employment(1) Officer(2)
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Linda C. Coughlin (48) Trustee and President; Managing 2000
Director of Scudder Kemper
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William Glavin (41) Vice President; 1997
Senior Vice President of Scudder
Kemper
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Ann M. McCreary (43) Vice President; Managing Director of 1998
Scudder Kemper
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James Masur (39) Vice President; Senior Vice President 1999
of Scudder Kemper
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John Millette (37) Vice President and Assistant 1999
Secretary; Vice President of Scudder
Kemper
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James W. Pasman (47) Vice President; Senior Vice President 1996
of Scudder Kemper
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Kathryn L. Quirk (47) Vice President and Secretary; 1997
Managing Director of Scudder Kemper
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John Hebble (41) Treasurer; Senior Vice President, 1997
Scudder Kemper
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1 Unless otherwise stated, all of the officers have been associated
with their respective companies for more than five years, although not
necessarily in the same capacity.
2 The President, Treasurer and Secretary each holds office until his
or her successor has been duly elected and qualified, and all other
officers hold offices in accordance with the By-laws of the Trust.
Compensation of Trustees and Officers
The Trust pays each Independent Trustee an annual Trustee's fee plus
specified amounts for Board and committee meetings attended and reimburses
expenses related to the business of any series of the Trust. As of April 1,
1999, each Independent Trustee receives an annual Trustee's fee of $12,000.
(Prior to April 1, 1999, the annual Trustee's fee was $10,000.) Each Independent
Trustee also receives fees of $175 per fund for attending each meeting of the
Board and between $80 and $150 per fund (depending on meeting type) for
attending each committee meeting, or meeting held for the purpose of considering
arrangements between the Trust and Scudder Kemper, or any of its other
affiliates. The newly-constituted Board may determine to change its compensation
structure.
The current compensation package for the Independent Trustees of the
Trust has not included any provisions for pensions or other retirement benefits.
A one-time benefit, however, will be provided to those Independent Trustees who
are not standing for re-election in an amount equal to twice a Trustee's
calendar year 1999 compensation from the Trust. Inasmuch as Scudder Kemper will
also benefit from the administrative efficiencies of a consolidated board,
Scudder Kemper has agreed to bear one-half of the cost of any such benefit.
Scudder Kemper supervises the Trust's investments, pays the
compensation and certain expenses of its personnel who serve as Trustees and
officers of the Trust and receives a management fee for its services. Several of
the Trust's officers and Trustees are also officers, directors, employees or
stockholders of Scudder Kemper and participate in the fees paid to that firm,
although the Trust makes no direct payments to them other than for reimbursement
of travel expenses in connection with their attendance at Board and committee
meetings.
The following Compensation Table provides in tabular form the following
data:
Column (1) All Trustees who receive compensation from the Trust.
Column (2) Aggregate compensation received by each Trustee of the Trust
during the calendar year 1999.
Column (3) Total compensation received by each Trustee from funds
managed by Scudder Kemper (collectively, the "Fund Complex") during the calendar
year 1999.
Compensation Table
- ---------------------------------------------------- ---------------------------
Trustees Aggregate Compensation Total Compensation from
(number of funds) Fund Complex* Paid to
Trustee
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Carole Lewis Anderson $20,280 (7 funds) $40,935 (16 funds)
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Adelaide Attard $19,013 (7 funds) $38,375 (16 funds)
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Robert N. Butler $17,271 (7 funds) $34,855 (16 funds)
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- ---------------------------------------------------- ---------------------------
Edgar R. Fiedler $16,013 (7 funds) $54,495 (29 funds)
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Eugene P. Forrester $20,280 (7 funds) $40,935 (16 funds)
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
George L. Maddox, Jr. $20,280 (7 funds) $40,935 (16 funds)
- ---------------------------------------------------- ---------------------------
- ---------------------------------------------------- ---------------------------
Robert J. Myers $18,838 (7 funds) $38,200 (16 funds)
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- ---------------------------------------------------- ---------------------------
James H. Schulz $18,381 (7 funds) $37,095 (16 funds)
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- ---------------------------------------------------- ---------------------------
Gordon Shillinglaw $24,083 (7 funds) $44,280 (16 funds)
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Jean Gleason Stromberg $20,276 (7 funds) $40,935 (16 funds)
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* The Fund Complex includes two funds for which the Trustees serve without
compensation.
The Board of Trustees of AARP Growth Trust recommends that the
shareholders of AARP Capital Growth Fund and AARP Small Company Stock Fund
vote in favor of this Proposal 1.
PROPOSAL 2: APPROVAL OF REORGANIZATION OF EACH FUND INTO SEPARATE
SERIES OF INVESTMENT TRUST
On February 7, 2000, the Board of the Trust unanimously approved an
Agreement and Plan of Reorganization (each, a "Plan") for each Fund in the form
attached hereto as Exhibit A. Each Plan provides for the Reorganization of the
Fund into its respective Series, each of which is a newly-formed series of an
existing Massachusetts business trust named Investment Trust. Other than the
different composition of the Board and the adoption of the administrative fee,
as described below, there will be no material differences between the operation
of each Fund now and after the Reorganization. Specifically, shareholders will
not pay higher fees, the investment objectives and policies of each Fund will be
[substantially] identical after the Reorganization, and shareholders will have
the same services available to them.
Reasons for the Proposed Reorganizations
As described above, as part of a restructuring program, many AARP Funds
are being reorganized into various funds managed by Scudder Kemper. In order to
streamline the administration of the funds that will comprise the Scudder Family
of Funds after the completion of the restructuring program, Scudder Kemper is
proposing that most Massachusetts business trusts that have been organized on
behalf of the AARP Funds be eliminated. Scudder Kemper believes, and has advised
the Board, that administering the Funds will be more efficient and
cost-effective if the Funds are part of a business trust that is comprised by
other funds in the Scudder Family of Funds. Therefore, the Board of Trustees of
the Trust has approved, and recommends to shareholders that they approve, the
Plan, in order to make the administration of your Funds more efficient and
cost-effective as the Funds move into the Scudder Family of Funds.
The cost savings include spreading trust maintenance costs and the fees
and expenses of the Independent Trustees and their counsel over a larger asset
base, as well as savings on registration fees. After the Reorganizations, other
series of Investment Trust, as well as the Funds, will be able to use redemption
credits resulting from the redemption of shares of the Funds and the various
other series of the Trust. Because of Scudder Kemper's undertaking to pay a
portion of the expenses of certain reorganizations involving Investment Trust
and because of the anticipated implementation of an administrative fee
(described below), it is likely that Scudder Kemper will benefit from these cost
savings. It is, however, unlikely that the Funds could use all of the redemption
credits in the foreseeable future. The cost savings also provide an incentive
for Scudder Kemper to agree to the administrative fee (described below) to
Scudder Kemper, which will assume the risk of cost increases under the
administrative fee. The Trustees believe that because of these factors and
because Scudder Kemper is assuming all costs of the Reorganizations there will
be a net benefit to shareholders from the Reorganization.
Principal Features of the Proposed Reorganizations
Investment Trust is a Massachusetts business trust that is registered
as an open-end investment company of the series type. Currently, there are
[eight] active series of Investment Trust that are each separate funds managed
by Scudder Kemper. Investment Trust has established two additional series for
the purpose of succeeding to the business of each Fund. Each Reorganization
contemplates that each Fund will transfer all of its assets to the applicable
Series; the liabilities of each Fund will be assumed by the applicable Series;
and each shareholder's shares of each Fund will automatically be exchanged for
an equal number of AARP Shares (including any fractional share) of the
applicable Series.
Investment Trust is organized under a Declaration of Trust that is
substantially similar to the Declaration of Trust of the Trust. Therefore,
following the Reorganizations, the rights of shareholders of each Fund will not
differ in any material respect from their rights currently. In addition, the
shareholder services available to the current shareholders of the Funds will not
change after the Reorganization, except that shareholders will be able to
exchange AARP Shares into AARP Shares of any fund within the Scudder Family of
Funds on a no-load basis. Prior to the Reorganizations, the Board of Trustees of
Investment Trust will approve various service agreements for the Trust,
including the administrative services agreement described below, on behalf of
each Fund.
In this regard, Investment Trust will enter into new investment
management agreements with Scudder Kemper on behalf of each Series. The current
investment management agreement for each Fund, and all AARP Funds, includes two
components: a "base fee" rate, the amount of which is based on the aggregate
combined net assets of all AARP Funds, except for the two series of AARP Managed
Portfolios Trust, and an "individual fund fee" rate, which is a set rate for the
Acquiring Fund, regardless of the fund's net asset level. Based on the current
size of the Investment Program, the base fee rate is approximately 0.28% of each
Fund's average daily net assets. Small Company's current individual fund fee
rate is 0.55%, and it therefore pays Scudder Kemper a fee at an annual rate of
0.83% of its average daily net assets, and Capital Growth's current individual
fund fee rate is 0.32%, and it therefore pays Scudder Kemper a fee at an annual
rate of 0.60% of its average daily net assets. The new investment management
agreements for the Series will replace the base fee rate and individual fund fee
rate calculations in the current agreements with a graduated fee rate. For
Scudder Small Company Stock Fund, the graduated fee rate will be equal to an
annual rate of 0.75% of the first $500 million of average daily net assets,
0.70% of the next $500 million, and 0.65% on average daily net assets in excess
of $1 billion. For Scudder Capital Growth Fund, the graduated fee rate will be
equal to an annual rate of 0.58% of the first $3 billion of average daily net
assets, 0.55% of the next $1 billion, and 0.53% on average daily net assets in
excess of $4 billion. Because the portion of the fee determined under the
current investment management agreement for Capital Growth on the basis of the
aggregate combined net assets of all AARP Funds, except for the series of AARP
Managed Investment Portfolios Trust, would be eliminated under the investment
management agreement for Scudder Capital Growth Fund, it is possible that, under
certain circumstances (i.e., where the applicable net assets of the AARP
Investment Program increase to $[ ] billion), the fee rate under the current
investment management agreement could be lower than the fee rate under the
investment management agreement for Scudder Capital Growth Fund. Due to the
consolidation of AARP Funds and Scudder Funds, it is no longer feasible for a
component of the fee rate paid under the Scudder Capital Growth Fund's
investment management agreement to be based on assets in the AARP Investment
Program. All other material terms of each Fund's current investment management
agreement will remain unchanged.
Following the Reorganizations, each Series will have the same
investment strategies as its comparable Fund, except for the following
differences. Unlike Small Company Stock, Scudder Small Company Stock Fund will
be permitted to engage in reverse repurchase agreements. Currently, each Fund
may make only limited use of strategic transactions. Following the
Reorganizations, each Series, while limited to 5% of assets committed to
strategic transactions entered into for non-hedging purposes, will be able to
make more use of such transactions. Finally, each Fund currently has a stated
goal of educating shareholders on investment topics affecting their lives.
Neither Series will have this stated goal.
Administrative Fee
On or prior to the closing of the Reorganizations, Investment Trust, on
behalf of the Series, will have entered into administrative services agreements
with Scudder Kemper (the "Administration Agreements"), pursuant to which Scudder
Kemper would provide or pay others to provide substantially all of the
administrative services required by the Series (other than those provided by
Scudder Kemper under its investment management agreements with the Series, as
described above) in exchange for the payment by each Series of an administrative
services fee (the "Administrative Fee") of 0.45% of average daily net assets for
Scudder Small Company Stock Fund and 0.30% of average daily net assets for
Scudder Capital Growth Fund. One effect of these arrangements is to make each
Series' future expense ratio more predictable. The details of the proposal
(including expenses that are not covered) are set out below.
Various third-party service providers (the "Service Providers"), some
of which are affiliated with Scudder Kemper, provide certain services to the
Funds pursuant to separate agreements with the Funds. Scudder Fund Accounting
Corporation, a subsidiary of Scudder Kemper, computes net asset value for the
Funds and maintains their accounting records. Scudder Service Corporation, also
a subsidiary of Scudder Kemper, is the transfer, shareholder servicing and
dividend-paying agent for the shares of the Funds. Scudder Trust Company, an
affiliate of Scudder Kemper, provides subaccounting and recordkeeping services
for shareholders in certain retirement and employee benefit plans. As custodian,
State Street Bank and Trust Company holds the portfolio securities of the Funds,
pursuant to a custodian agreement. PricewaterhouseCoopers LLP audits the
financial statements of the Funds and provides other audit, tax, and related
services. Dechert Price & Rhoads acts as general counsel for each Fund. In
addition to the fees they pay under the investment management agreements with
Scudder Kemper, the Funds pay the fees and expenses associated with these
service arrangements, as well as each Fund's insurance, registration, printing,
postage and other costs.
After the Reorganizations, when the Administration Agreements become
effective, each Service Provider will provide to the Series the services that it
currently provides to the Funds, as described above, under the current
arrangements, except that Scudder Kemper will pay these entities for the
provision of their services to the Series and will pay other Series' expenses,
including insurance, registration, printing and postage fees. In return, each
Series will pay Scudder Kemper an Administrative Fee.
The proposed Administration Agreement will have an initial term of
three years, subject to earlier termination by Investment Trust's Trustees. The
fee payable by the Series to Scudder Kemper pursuant to the Administration
Agreements would be reduced by the amount of any credit received from the
Series' custodian for cash balances.
Certain expenses of Series would not be borne by Scudder Kemper under
the Administration Agreements, such as taxes, brokerage, interest and
extraordinary expenses; and the fees and expenses of the Independent Trustees
(including the fees and expenses of their independent counsel). In addition,
each Series would continue to pay the fees required by its investment management
agreement with Scudder Kemper.
Procedures for Proposed Reorganizations
If the shareholders of each Fund approve the Reorganization, each Fund
will transfer all of its assets to the Series; each Series will assume all of
the liabilities of its respective Fund and issue AARP Shares to each shareholder
of the Fund in a number equal to the number of shares (including any fractional
share) of the Fund then owned by such shareholder, in exchange for all of the
shares of the Fund owned by the shareholder; and the Funds and the Trust will
then be dissolved. Shareholders of each Fund will acquire the same pro rata
interest in the applicable Series as of the effective time of the Reorganization
as the shareholder had in the Fund immediately prior to the Reorganization.
Confirmations of the AARP Shares received in the Reorganizations in
exchange for shares of each Fund will not be issued to shareholders, because the
number of shares held by a shareholder will not be changed by the
Reorganization.
It will not be necessary for a shareholders holding certificates
representing shares of each Fund to exchange those certificates for new
certificates representing AARP Shares of the applicable Series following
consummation of the Reorganization. Certificates for shares of each Fund issued
prior to the Reorganization will represent outstanding AARP Shares of the
applicable Series after the Reorganization. New certificates will not be issued
by the Series after the Reorganization unless specifically requested in writing.
Shares of each Fund not represented by certificates will automatically be
exchanged for the same number of AARP Shares of the applicable Series.
If approved by shareholders of the Funds, it is expected that each
Reorganization will be made effective at [ ], on [ ],2000, but may be made
effective at a different time. At any time before the Reorganizations are
effective, the Trust and Investment Trust may agree to terminate the Agreement
and Plan of Reorganization for a Fund, and if the Reorganization has not been
made effective by [ ], 2000 either the Trust or Investment Trust may terminate
the Agreement and Plan of Reorganization, in either case whether or not it has
been approved by the Fund's shareholders.
Federal Income Tax Consequences
Each Reorganization is conditioned upon the receipt by the Trust, on
behalf of each Fund, and Investment Trust, on behalf of each Series, of an
opinion from Willkie Farr & Gallagher, substantially to the effect that, based
upon certain facts, assumptions and representations of the parties, for federal
income tax purposes: (i) the transfer to each Series of all or substantially all
of the assets of each Fund in exchange solely for AARP Shares and the assumption
by each Series of all of the liabilities of each Fund, followed by the issuance
of such shares to each Fund's shareholders in exchange for their shares of the
Fund in complete liquidation of each Fund, will constitute a "reorganization"
within the meaning of Section 368(a)(1) of the Code, and the Series and the
Funds will each be "a party to a reorganization" within the meaning of Section
368(b) of the Code; (ii) no gain or loss will be recognized by either Fund upon
the transfer of all or substantially all of its assets to the Series in exchange
solely for AARP Shares and the assumption by each Series of all of the
liabilities of the applicable Fund or upon the issuance of the AARP Shares to
each Fund's shareholders in exchange for their shares of the applicable Fund;
(iii) the basis of the assets of each Fund in the hands of each Series will be
the same as the basis of such assets of each Fund immediately prior to the
transfer; (iv) the holding period of the assets of each Fund in the hands of
each Series will include the period during which such assets were held by each
Fund; (v) no gain or loss will be recognized by a Series upon the receipt of the
assets of the applicable Fund in exchange for AARP Shares and the assumption by
each Series of all of the liabilities of the applicable Fund; (vi) no gain or
loss will be recognized by the shareholders of a Fund upon the receipt of the
AARP Shares of the applicable Series solely in exchange for their shares of the
Fund as part of the transaction; (vii) the basis of the AARP Shares received by
the shareholders of the applicable Fund will be the same as the basis of the
shares of the Fund exchanged therefor; and (viii) the holding period of AARP
Shares received by the shareholders of each Fund will include the holding period
during which the shares of each Fund exchanged therefor were held, provided that
at the time of the exchange the shares of each Fund were held as capital assets
in the hands of the shareholders of the Fund.
While the Trust is not aware of any adverse state or local tax
consequences of the proposed Reorganizations, it has not requested any ruling or
opinion with respect to such consequences and shareholders may wish to consult
their own tax advisers with respect to such matters.
The Board of Trustees of AARP Growth Trust recommends that the
shareholders of AARP Capital Growth Fund and AARP Small Company Stock Fund
vote in favor of this Proposal 2.
PROPOSAL 3: RATIFICATION OR REJECTION OF THE
SELECTION OF INDEPENDENT ACCOUNTANTS
The Board, including a majority of the Independent Trustees, has
selected PricewaterhouseCoopers LLP to act as independent accountants of each
Fund for the Fund's current fiscal year. One or more representatives of
PricewaterhouseCoopers LLP are expected to be present at the Meetings and will
have an opportunity to make a statement if they so desire. Such representatives
are expected to be available to respond to appropriate questions posed by
shareholders or management.
The Board of Trustees of AARP Growth Trust recommends that the
shareholders of AARP Capital Growth Fund and AARP Small Company Stock Fund
vote in favor of this Proposal 3.
ADDITIONAL INFORMATION
General
Each Fund will pay its allocable share of the cost of preparing,
printing and mailing the enclosed proxy card 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, except that
Scudder Kemper will bear any such expenses in excess of $________ (approximately
$_______ per share), based on December 31, 1999 net assets for each Fund). In
addition to solicitation by mail, certain officers and representatives of each
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.
This Proxy Statement, the Notice of Special Meetings and the proxy
cards are first being mailed to shareholders on or about April 18, 2000 or as
soon as practicable thereafter. Any shareholder giving a proxy has the power to
revoke it by mail (addressed to the Secretary at the principal executive office
of the Funds, c/o Scudder Kemper Investments, Inc., at the address for the Funds
shown at the beginning of this Proxy Statement) or in person at the Meeting, by
executing a superseding proxy or by submitting a notice of revocation to the
Fund. All properly executed proxies received in time for each Meeting will be
voted as specified in the proxy or, if no specification is made, in favor of the
Proposals referred to in the Proxy Statement.
The presence at any shareholders' meeting, in person or by proxy, of
the holders of one-third of the shares of the Trust (for a trust-wide vote) or a
Fund (for a fund-wide vote) 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
any Proposal is not obtained at the Meeting with respect to either Fund, the
persons named as proxies may propose one or more adjournments of the Meeting in
accordance with applicable law to permit further solicitation of proxies with
respect to that Proposal. Any such adjournment as to a matter will require the
affirmative vote of the holders of a majority of the Trust's (for a trust-wide
vote) or a Fund's (for a fund-wide vote) shares present in person or by proxy at
the Meeting. The persons named as proxies will vote in favor of any such
adjournment those proxies which they are entitled to vote in favor of that
Proposal and will vote against any such adjournment those proxies to be voted
against that proposal. For purposes of determining the presence of a quorum for
transacting business at a 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 Trust 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.
Approval of Proposal 1 requires the affirmative vote of a plurality of
the shares of the Trust voting at the Meeting. Approval of Proposal 2 requires
the affirmative vote of the holders of a majority of a Fund's shares outstanding
and entitled to vote thereon. Approval of Proposal 3 requires the affirmative
vote of a majority of the shares of a Fund voting at a Meeting. Abstentions and
broker non-votes will not be counted in favor of, but will have not other effect
on Proposal 1, and will have the effect of a "no" vote on Proposals 2 and 3.
Shareholders of the Trust will vote together on Proposal 1 and shareholders of
each Fund will vote separately with respect to Proposals 2 and 3.
Holders of record of the shares of each Fund at the close of business
on April 17, 2000 (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
Meeting. As of [date], there were [ ] shares of AARP Capital Growth Fund and [ ]
shares of AARP Small Company Stock Fund outstanding.
As of [date], the officers and Trustees of the Trust as a group owned
beneficially [less than 1%] [_____%] of each Fund's share. Appendix 1 sets forth
the beneficial owners of at least 5% of each Fund's shares. To the best of the
Fund's knowledge, as of [date], no person owned beneficially more than 5% of
outstanding shares of either Fund, except as stated in Appendix 1.
Appendix 2 hereto sets forth the number of shares of each Fund owned
directly or beneficially by the Trustees of the Fund and by the nominees for
election.
Shareholder Communications Corporation ("SCC") has been engaged to
assist in the solicitation of proxies, at an estimated cost of 66,563.94. As the
Meeting date approaches, certain shareholders of the Funds 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
Funds. 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 both the identity of the shareholder
casting the vote and 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 Proposals on the proxy card, and ask for the shareholder's
instructions on the Proposals. Although the SCC representative is permitted to
answer questions about the process, he or she is not permitted to recommend to
the shareholder how to vote, other than to read any recommendation set forth in
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 a Meeting, but does not wish
to give a proxy by telephone or electronically, the shareholder may still submit
the proxy card 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 1-800-605-1203. Any
proxy given by a shareholder is revocable until voted at the Meeting.
Shareholders may also provide their voting instructions through
telephone touch-tone voting or Internet voting. These options require
shareholders to input a control number which is located on each voting
instruction card. After inputting this number, shareholders will be prompted to
provide their voting instructions on the Proposals. Shareholders will have an
opportunity to review their voting instructions and make any necessary changes
before submitting their voting instructions and terminating their telephone call
or Internet link. Shareholders who vote on the Internet, in addition to
confirming their voting instructions prior to submission, will also receive an
e-mail confirming their instructions.
Principal Underwriter
Scudder Investor Services, Inc., Two International Place, Boston,
Massachusetts 02110, is the principal underwriter for each Fund.
Proposals of Shareholders
Shareholders wishing to submit proposals for inclusion in a proxy
statement for a shareholder meeting subsequent to the Meetings, if any, should
send their written proposals to the Secretary of the Trust, c/o Scudder Kemper
Investments, Inc., Two International Place, Boston, Massachusetts 02110-4103,
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 Meetings
No Trustee is aware of any matters that will be presented for action at
a 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
each Fund.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) (OR TAKE
ADVANTAGE OF AVAILABLE ELECTRONIC OR TELEPHONIC VOTING PROCEDURES)
PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
By Order of the Board,
Kathryn L. Quirk,
Secretary
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this ________ day of __________________, 2000, by and between Investment
Trust (the "Acquiring Trust"), a Massachusetts business trust with its principal
place of business at ___________________, on behalf of Scudder Capital Growth
Fund and Scudder Small Company Stock Fund (each, an "Acquiring Fund" and,
together, the "Acquiring Funds"), each of which is a separate series of the
Acquiring Trust, and AARP Growth Trust (the "Acquired Trust"), a Massachusetts
business trust with its principal place of business at ________________, on
behalf of AARP Capital Growth Fund and AARP Small Company Stock Fund (each, an
"Acquired Fund" and, together, the "Acquired Funds", and collectively with the
Acquiring Funds, the "Funds"), each of which is a separate series of the
Acquired Trust.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of all or substantially all of
the assets of each Acquired Fund to its respective Acquiring Fund in exchange
solely for voting shares of beneficial interest ($__ par value per share) of the
applicable Acquiring Fund (the "Acquiring Fund Shares"), the assumption by each
Acquiring Fund of all of the liabilities of each Acquired Fund and the
distribution of the Acquiring Fund Shares to the shareholders of each Acquired
Fund in complete liquidation of each Acquired Fund as provided herein, all upon
the terms and conditions hereinafter set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF EACH ACQUIRED FUND TO ITS RESPECTIVE ACQUIRING FUND
IN EXCHANGE FOR ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND
LIABILITIES AND THE LIQUIDATION OF EACH ACQUIRED FUND
1.1. Subject to the terms and conditions herein set forth and on the basis of
the representations and warranties contained herein, each Acquired Fund agrees
to transfer to its respective Acquiring Fund all or substantially all of the
Acquired Fund's assets as set forth in section 1.2, and each Acquiring Fund
agrees in exchange therefor (i) to deliver to its respective Acquired Fund that
number of full and fractional Acquiring Fund Shares determined by dividing the
value of each Acquired Fund's net assets, computed in the manner and as of the
time and date set forth in section 2.1, by the net asset value of one Acquiring
Fund Share, computed in the manner and as of the time and date set forth in
section 2.2; and (ii) to assume all of the liabilities of its respective
Acquired Fund. Such transactions shall take place at the closing provided for in
section 3.1 (the "Closing").
1.2. The assets of each Acquired Fund to be acquired by its respective Acquiring
Fund (the "Assets") shall consist of all assets, including, without limitation,
all cash, cash equivalents, securities, commodities and futures interests and
dividends or interest or other receivables that are owned by the Acquired Fund
and any deferred or prepaid expenses shown on the unaudited statement of assets
and liabilities of the Acquired Fund prepared as of the effective time of the
closing in accordance with generally accepted accounting principles ("GAAP")
applied consistently with those of the Acquired Fund's most recent audited
balance sheet. The Assets shall constitute at least 90% of the fair market value
of the net assets, and at least 70% of the fair market value of the gross
assets, held by the Acquired Fund immediately before the Closing (excluding for
these purposes assets used to pay the dividends and other distributions paid
pursuant to section 1.4).
1.3. Each Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date as defined in section
3.1.
1.4. On or as soon as practicable prior to the Closing Date as defined in
section 3.1, each Acquired Fund will declare and pay to its shareholders of
record one or more dividends and/or other distributions so that it will have
distributed substantially all of its investment company taxable income (computed
without regard to any deduction for dividends paid) and realized net capital
gain, if any, for the current taxable year through the Closing Date.
1.5. Immediately after the transfer of Assets provided for in section 1.1, each
Acquired Fund will distribute to the Acquired Fund's shareholders of record (the
"Acquired Fund Shareholders"), determined as of the Valuation Time (as defined
in section 2.1), on a pro rata basis, the Acquiring Fund Shares received by the
Acquired Fund pursuant to section 1.1 and will completely liquidate. Such
distribution and liquidation will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the names of the Acquired Fund Shareholders. The aggregate net
asset value of Acquiring Fund Shares to be so credited to Acquired Fund
Shareholders shall be equal to the aggregate net asset value of the Acquired
Fund shares owned by such shareholders as of the Valuation Time. All issued and
outstanding shares of the Acquired Fund will simultaneously be cancelled on the
books of the Acquired Fund, although share certificates representing interests
in shares of the Acquired Fund will represent a number of Acquiring Fund Shares
after the Closing Date as determined in accordance with section 2.3. The
Acquiring Fund will not issue certificates representing Acquiring Fund Shares in
connection with such exchange.
1.6. Ownership of Acquiring Fund Shares will be shown on the books of each
Acquiring Fund. Shares of each Acquiring Fund will be issued in the manner
described in the Acquiring Fund's then-current prospectus and statement of
additional information.
1.7. Any reporting responsibility of an Acquired Fund including, without
limitation, the responsibility for filing of regulatory reports, tax returns, or
other documents with the Securities and Exchange Commission (the "Commission"),
any state securities commission, and any federal, state or local tax authorities
or any other relevant regulatory authority, is and shall remain the
responsibility of the Acquired Fund.
1.8. All books and records of each Acquired Fund, including all books and
records required to be maintained under the 1940 Act and the rules and
regulations thereunder, shall be available to its respective Acquiring Fund from
and after the Closing Date and shall be turned over to the Acquiring Fund as
soon as practicable following the Closing Date.
2. VALUATION
2.1. The value of the Assets shall be computed as of the close of regular
trading on The New York Stock Exchange, Inc. (the "NYSE") on the business day
immediately preceding the Closing Date, as defined in Section 3.1 (such time and
date being hereinafter called the "Valuation Time") after the declaration and
payment of any dividends and/or other distributions on that date, using the
valuation procedures set forth in the Acquiring Trust's Declaration of Trust, as
amended, and then-current prospectus or statement of additional information.
2.2. The net asset value of an Acquiring Fund share shall be the net asset value
per share computed as of the Valuation Time using the valuation procedures
referred to in section 2.1.
2.3. The number of shares of each Acquiring Fund to be issued (including
fractional shares, if any) in exchange for the Assets shall be determined by
dividing the value of the Assets with respect to shares of the applicable
Acquired Fund determined in accordance with section 2.1 by the net asset value
of an Acquiring Fund Share determined in accordance with section 2.2.
2.4. All computations of value hereunder shall be made by or under the direction
of each Fund's respective accounting agent, if applicable, in accordance with
its regular practice and the requirements of the 1940 Act and shall be subject
to confirmation by each Fund's respective independent accountants upon the
reasonable request of the other Fund.
3. CLOSING AND CLOSING DATE
3.1. The Closing of the transactions contemplated by this Agreement shall be
_________________________, or such later date as the parties may agree in
writing (the "Closing Date"). All acts taking place at the Closing shall be
deemed to take place simultaneously as of ___:____ _.m.., Eastern time, on the
Closing Date, unless otherwise agreed to by the parties. The Closing shall be
held at the offices of Dechert Price & Rhoads, Ten Post Office Square - South,
Boston, MA 02109, or at such other place and time as the parties may agree.
3.2. Each Acquired Fund shall deliver to its respective Acquiring Fund on the
Closing Date a schedule of Assets.
3.3. __________________, custodian for each Acquired Fund, shall deliver at the
Closing a certificate of an authorized officer stating that (a) the Assets shall
have been delivered in proper form to ________________, custodian for each
Acquiring Fund, prior to or on the Closing Date and (b) all necessary taxes in
connection with the delivery of the Assets, including all applicable federal and
state stock transfer stamps, if any, have been paid or provision for payment has
been made. Each Acquired Fund's portfolio securities represented by a
certificate or other written instrument shall be presented by the custodian for
the Acquired Fund to the custodian for its respective Acquiring Fund for
examination no later than five business days preceding the Closing Date and
transferred and delivered by the Acquired Fund as of the Closing Date by the
Acquired Fund for the account of its respective Acquiring Fund duly endorsed in
proper form for transfer in such condition as to constitute good delivery
thereof. Each Acquired Fund's portfolio securities and instruments deposited
with a securities depository, as defined in Rule 17f-4 under the 1940 Act, shall
be delivered as of the Closing Date by book entry in accordance with the
customary practices of such depositories and the custodian for its respective
Acquiring Fund. The cash to be transferred by each Acquired Fund shall be
delivered by wire transfer of federal funds on the Closing Date.
3.4. __________ (the "Transfer Agent"), on behalf of each Acquired Fund, shall
deliver at the Closing a certificate of an authorized officer stating that its
records contain the names and addresses of the Acquired Fund Shareholders and
the number and percentage ownership (to three decimal places) of outstanding
Acquired Fund Shares owned by each such shareholder immediately prior to the
Closing. Each Acquiring Fund shall issue and deliver a confirmation evidencing
the Acquiring Fund Shares to be credited on the Closing Date to its respective
Acquired Fund or provide evidence satisfactory to the Acquired Fund that such
Acquiring Fund Shares have been credited to the Acquired Fund's account on the
books of the Acquiring Fund. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request to effect the transactions contemplated by this Agreement.
3.5. In the event that immediately prior to the Valuation Time (a) the NYSE or
another primary trading market for portfolio securities of each Acquiring Fund
or each Acquired Fund shall be closed to trading or trading thereupon shall be
restricted, or (b) trading or the reporting of trading on such Exchange or
elsewhere shall be disrupted so that, in the judgment of the Board members of
either party to this Agreement, accurate appraisal of the value of the net
assets with respect to the Acquiring Fund Shares or the Acquired Fund Shares is
impracticable, the Closing Date shall be postponed until the first business day
after the day when trading shall have been fully resumed and reporting shall
have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1. The Acquired Trust, on behalf of each Acquired Fund, represents and
warrants to each Acquiring Fund as follows:
(a) The Acquired Trust is a business trust duly organized and validly
existing under the laws of the Commonwealth of Massachusetts with power under
the Acquired Trust's Declaration of Trust, as amended, to own all of its
properties and assets and to carry on its business as it is now being conducted;
(b) The Acquired Trust is registered with the Commission as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and such registration is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired Fund of
the transactions contemplated herein, except such as have been obtained under
the Securities Act of 1933, as amended (the "1933 Act"), the Securities Exchange
Act of 1934, as amended (the "1934 Act") and the 1940 Act and such as may be
required by state securities laws;
(d) Other than with respect to contracts entered into in connection
with the portfolio management of each Acquired Fund which shall terminate on or
prior to the Closing Date, the Acquired Trust is not, and the execution,
delivery and performance of this Agreement by the Acquired Trust will not
result, in violation of Massachusetts law or of the Acquired Trust's Declaration
of Trust, as amended, or By-Laws, or of any material agreement, indenture,
instrument, contract, lease or other undertaking known to counsel to which
either Acquired Fund is a party or by which it is bound, and the execution,
delivery and performance of this Agreement by the Acquired Fund will not result
in the acceleration of any obligation, or the imposition of any penalty, under
any agreement, indenture, instrument, contract, lease, judgment or decree to
which the Acquired Fund is a party or by which it is bound;
(e) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against either Acquired Fund or any properties or
assets held by it. Neither Acquired Fund knows of any facts which might form the
basis for the institution of such proceedings which would materially and
adversely affect its business and is not a party to or subject to the provisions
of any order, decree or judgment of any court or governmental body which
materially and adversely affects its business or its ability to consummate the
transactions herein contemplated;
(f) The Statement of Assets and Liabilities, Operations, and Changes in
Net Assets, the Supplementary Information, and the Investment Portfolio of each
Acquired Fund at and for the fiscal year ended _____________________, has been
audited by PricewaterhouseCoopers LLP, independent certified public accountants,
and is in accordance with GAAP consistently applied, and such statements (
copies of which have been furnished to the Acquiring Fund) present fairly, in
all material respects, the financial position of the Acquired Fund as of such
date in accordance with GAAP, and there are no known contingent liabilities of
the Acquired Fund required to be reflected on a balance sheet (including the
notes thereto) in accordance with GAAP as of such date not disclosed therein;
(g) Since _________________ [date of last fiscal year above], there has
not been any material adverse change in each Acquired Fund's financial
condition, assets, liabilities or business other than changes occurring in the
ordinary course of business, or any incurrence by the Acquired Fund of
indebtedness maturing more than one year from the date such indebtedness was
incurred except as otherwise disclosed to and accepted in writing by the
Acquiring Fund. For purposes of this subsection (g), a decline in net asset
value per share of each Acquired Fund due to declines in market values of
securities in the Acquired Fund's portfolio, the discharge of Acquired Fund
liabilities, or the redemption of Acquired Fund shares by Acquired Fund
Shareholders shall not constitute a material adverse change;
(h) At the date hereof and at the Closing Date, all federal and other
tax returns and reports of each Acquired Fund required by law to have been filed
by such dates (including any extensions) shall have been filed and are or will
be correct in all material respects, and all federal and other taxes shown as
due or required to be shown as due on said returns and reports shall have been
paid or provision shall have been made for the payment thereof, and, to the best
of the Acquired Fund's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to such returns;
(i) For each taxable year of its operation (including the taxable year
ending on the Closing Date), each Acquired Fund has met the requirements of
Subchapter M of the Code for qualification as a regulated investment company and
has elected to be treated as such, has been eligible to and has computed its
federal income tax under Section 852 of the Code, and will have distributed all
of its investment company taxable income and net capital gain (as defined in the
Code) that has accrued through the Closing Date;
(j) All issued and outstanding shares of each Acquired Fund (i) have
been offered and sold in every state and the District of Columbia in compliance
in all material respects with applicable registration requirements of the 1933
Act and state securities laws, (ii) are, and on the Closing Date will be, duly
and validly issued and outstanding, fully paid and non-assessable (recognizing
that, under Massachusetts law, Acquired Fund Shareholders, under certain
circumstances, could be held personally liable for obligations of the Acquired
Fund), and (iii) will be held at the time of the Closing by the persons and in
the amounts set forth in the records of the Transfer Agent, as provided in
section 3.4. Neither Acquired Fund has outstanding any options, warrants or
other rights to subscribe for or purchase any of the Acquired Fund shares, nor
is there outstanding any security convertible into any of the Acquired Fund
shares;
(k) At the Closing Date, each Acquired Fund will have good and
marketable title to the Acquired Fund's assets to be transferred to its
respective Acquiring Fund pursuant to section 1.2 and full right, power, and
authority to sell, assign, transfer and deliver such assets hereunder free of
any liens or other encumbrances, except those liens or encumbrances as to which
the Acquiring Fund has received notice at or prior to the Closing, and upon
delivery and payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act and the
1940 Act, except those restrictions as to which the Acquiring Fund has received
notice and necessary documentation at or prior to the Closing;
(l) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action on the
part of the Board members of the Acquired Trust, and, subject to the approval of
each Acquired Fund's Shareholders, this Agreement constitutes a valid and
binding obligation of the Acquired Trust, on behalf of each Acquired Fund,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws relating to or affecting creditors' rights and to general equity
principles;
(m) The information to be furnished by each Acquired Fund for use in
applications for orders, registration statements or proxy materials or for use
in any other document filed or to be filed with any federal, state or local
regulatory authority (including the National Association of Securities Dealers,
Inc. (the "NASD")), which may be necessary in connection with the transactions
contemplated hereby, shall be accurate and complete in all material respects and
shall comply in all material respects with federal securities and other laws and
regulations applicable thereto;
(n) The current prospectus and statement of additional information of
each Acquired Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Commission thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading; and
(o) The proxy statement of the Acquired Funds (the "Proxy Statement"),
insofar as it relates to each Acquired Fund, will, on the Closing Date, not
contain any 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, in
light of the circumstances under which such statements are made, not materially
misleading; provided, however, that the representations and warranties in this
section shall not apply to statements in or omissions from the Proxy Statement
made in reliance upon and in conformity with information that was furnished or
should have been furnished by its respective Acquiring Fund for use therein.
4.2. The Acquiring Trust, on behalf of each Acquiring Fund, represents
and warrants to each Acquired Fund as follows:
(a) The Acquiring Trust is a business trust duly organized and validly
existing under the laws of the Commonwealth of Massachusetts with power under
the Acquiring Trust's Declaration of Trust, as amended, to own all of its
properties and assets and to carry on its business as it is now being conducted;
(b) The Acquiring Trust is registered with the Commission as an
open-end management investment company under the 1940 Act, and such registration
is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by each Acquiring Fund
of the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by state
securities laws;
(d) The Acquiring Trust is not, and the execution, delivery and performance of
this Agreement by the Acquiring Trust will not result, in violation of
Massachusetts law or of the Acquiring Trust's Declaration of Trust, as amended,
or By-Laws, or of any material agreement, indenture, instrument, contract, lease
or other undertaking known to counsel to which either Acquiring Fund is a party
or by which it is bound, and the execution, delivery and performance of this
Agreement by the Acquiring Fund will not result in the acceleration of any
obligation, or the imposition of any penalty, under any agreement, indenture,
instrument, contract, lease, judgment or decree to which the Acquiring Fund is a
party or by which it is bound;
(e) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against either Acquiring Fund or any properties
or assets held by it. Neither Acquiring Fund knows of any facts which might form
the basis for the institution of such proceedings which would materially and
adversely affect its business and is not a party to or subject to the provisions
of any order, decree or judgment of any court or governmental body which
materially and adversely affects its business or its ability to consummate the
transactions herein contemplated;
(f) The Statement of Assets and Liabilities, Operations, and Changes in
Net Assets, the Supplementary Information, and the Investment Portfolio of each
Acquiring Fund at and for the fiscal year ended______________________ has been
audited by PricewaterhouseCoopers LLP, independent certified public accountants,
and is in accordance with GAAP consistently applied, and such statement (a copy
of which has been furnished to the Acquired Fund) presents fairly, in all
material respects, the financial position of the Acquiring Fund as of such date
in accordance with GAAP, and there are no known contingent liabilities of the
Acquiring Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed therein;
(g) Each Acquiring Fund has conducted no operations except those
incident to its organization.
(h) The Acquiring Fund Shares to be issued and delivered to each
Acquired Fund, for the account of the Acquired Fund Shareholders, pursuant to
the terms of this Agreement, will at the Closing Date have been duly authorized
and, when so issued and delivered, will be duly and validly issued and
outstanding Acquiring Fund Shares, and will be fully paid and non-assessable
(recognizing that, under Massachusetts law, Acquiring Fund Shareholders, under
certain circumstances, could be held personally liable for the obligations of
the Acquired Fund).
(i) At the Closing Date, each Acquiring Fund will have good and
marketable title to the Acquiring Fund's assets, free of any liens or other
encumbrances, except those liens or encumbrances as to which its respective
Acquired Fund has received notice at or prior to the Closing;
(j) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action on the
part of the Board members of the Acquiring Trust and this Agreement will
constitute a valid and binding obligation of the Acquiring Trust, on behalf of
each Acquiring Fund, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws relating to or affecting creditors' rights and to
general equity principles;
(k) The information to be furnished by each Acquiring Fund for use in
applications for orders, registration statements or proxy materials or for use
in any other document filed or to be filed with any federal, state or local
regulatory authority (including the NASD), which may be necessary in connection
with the transactions contemplated hereby, shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto;
(l) The Proxy Statement related to the Reorganization, only insofar as
it relates to each Acquiring Fund, will, on the Closing Date, not contain any
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, in light of the
circumstances under which such statements were made, not materially misleading;
provided, however, that the representations and warranties in this section shall
not apply to statements in or omissions from the Proxy Statement made in
reliance upon and in conformity with information that was furnished or should
have been furnished by its respective Acquired Fund for use therein; and
(m) Each Acquiring Fund agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act and such
of the state securities laws as may be necessary in order to continue its
operations after the Closing Date.
5. COVENANTS OF EACH ACQUIRING FUND AND ACQUIRED FUND
5.1. Each Fund covenants to operate its business in the ordinary course between
the date hereof and the Closing Date, it being understood that (a) such ordinary
course of business will include (i) the declaration and payment of customary
dividends and other distributions and (ii) such changes as are contemplated by
the Funds' normal operations; and (b) each Fund shall retain exclusive control
of the composition of its portfolio until the Closing Date.
5.2. Upon reasonable notice, the Acquiring Trust's officers and agents shall
have reasonable access to each Acquired Fund's books and records necessary to
maintain current knowledge of the Acquired Fund and to ensure that the
representations and warranties made by the Acquired Fund are accurate.
5.3. The Acquired Trust covenants to call a meeting of each Acquired Fund's
Shareholders entitled to vote thereon to consider and act upon this Agreement
and to take all other reasonable action necessary to obtain approval of the
transactions contemplated herein. Such meeting shall be scheduled for no later
than ____________________.
5.4. The Acquired Trust covenants that the Acquiring Fund Shares to be issued
hereunder are not being acquired for the purpose of making any distribution
thereof other than in accordance with the terms of this Agreement.
5.5. Each Acquired Fund covenants that it will assist its respective Acquiring
Fund in obtaining such information as the Acquiring Fund reasonably requests
concerning the beneficial ownership of the Acquired Fund Shares and will provide
the Acquiring Fund with a list of affiliates of the Acquired Fund.
5.6. Subject to the provisions of this Agreement, each Fund will take, or cause
to be taken, all actions, and do or cause to be done, all things reasonably
necessary, proper, and/or advisable to consummate and make effective the
transactions contemplated by this Agreement.
5.7. Each Fund covenants to prepare in compliance with the 1934 Act and the 1940
Act the proxy materials in connection with the meeting of each Acquired Fund's
Shareholders to consider approval of this Agreement and the transactions
contemplated herein. The Acquired Trust will file the Proxy Statement with the
Commission.
5.8. Each Acquired Fund covenants that it will, from time to time, as and when
reasonably requested by its respective Acquiring Fund, execute and deliver or
cause to be executed and delivered all such assignments and other instruments,
and will take or cause to be taken such further action as the Acquiring Fund may
reasonably deem necessary or desirable in order to vest in and confirm the
Acquiring Fund's title to and possession of all the assets and otherwise to
carry out the intent and purpose of this Agreement.
5.9. Each Acquiring Fund covenants to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act and 1940 Act, and such of
the state securities laws as it deems appropriate in order to continue its
operations after the Closing Date and to consummate the transactions
contemplated herein; provided, however, that the Acquiring Fund may take such
actions it reasonably deems advisable after the Closing Date as circumstances
change.
5.10. Each Acquiring Fund covenants that it will, from time to time, as and when
reasonably requested by its respective Acquired Fund, execute and deliver or
cause to be executed and delivered all such assignments, assumption agreements,
releases, and other instruments, and will take or cause to be taken such further
action, as the Acquired Fund may reasonably deem necessary or desirable in order
to (i) vest and confirm to the Acquired Fund title to and possession of all
Acquiring Fund shares to be transferred to Acquired Fund pursuant to this
Agreement and (ii) assume the liabilities from the Acquired Fund.
5.11. As soon as reasonably practicable after the Closing, each Acquired Fund
shall make a liquidating distribution to its shareholders consisting of the
Acquiring Fund Shares received at the Closing.
5.12. Each Fund shall each use its reasonable best efforts to fulfill or obtain
the fulfillment of the conditions precedent to effect the transactions
contemplated by this Agreement as promptly as practicable.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH ACQUIRED FUND
The obligations of each Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by its
respective Acquiring Fund of all the obligations to be performed by it hereunder
on or before the Closing Date, and, in addition thereto, the following further
conditions:
6.1. All representations and warranties of the Acquired Trust, with respect to
each Acquired Fund, contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date; and there
shall be (i) no pending or threatened litigation brought by any person (other
than each Acquiring Fund, its adviser or any of their affiliates) against its
respective Acquired Fund or its investment adviser(s), Board members or officers
arising out of this Agreement and (ii) no facts known to the Acquired Fund which
the Acquired Fund reasonably believes might result in such litigation.
6.2. Each Acquiring Fund shall have delivered to its respective Acquired Fund on
the Closing Date a certificate executed in its name by its President or a Vice
President, in a form reasonably satisfactory to the Acquired Fund and dated as
of the Closing Date, to the effect that the representations and warranties of
the Acquiring Trust, with respect to the Acquiring Fund, made in this Agreement
are true and correct on and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, and as to such
other matters as the Acquired Fund shall reasonably request;
6.3. Each Acquired Fund shall have received on the Closing Date an opinion of
Dechert Price & Rhoads, in a form reasonably satisfactory to the Acquired Fund,
and dated as of the Closing Date, to the effect that:
(a) The Acquiring Trust has been duly formed and is an existing
business trust; (b) each Acquiring Fund has the power to carry on its business
as presently conducted in accordance with the description thereof in the
Acquiring Trust's registration statement under the 1940 Act; (c) the Agreement
has been duly authorized, executed and delivered by the Acquiring Trust, on
behalf of each Acquiring Fund, and constitutes a valid and legally binding
obligation of the Acquiring Trust, on behalf of each Acquiring Fund, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and laws of general applicability relating
to or affecting creditors' rights and to general equity principles; (d) the
execution and delivery of the Agreement did not, and the exchange of each
acquired Fund's assets for Acquiring Fund Shares pursuant to the Agreement will
not, violate the Acquiring Trust's Declaration of Trust, as amended, or By-laws;
and (e) to the knowledge of such counsel, all regulatory consents,
authorizations, approvals or filings required to be obtained or made by each
Acquiring Fund under the Federal laws of the United States or the laws of the
Commonwealth of Massachusetts for the exchange of the Acquired Fund's assets for
Acquiring Fund Shares, pursuant to the Agreement have been obtained or made; and
6.4. Each Acquiring Fund shall have performed all of the covenants and complied
with all of the provisions required by this Agreement to be performed or
complied with by the Acquiring Fund on or before the Closing Date.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH ACQUIRING FUND
The obligations of each Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all of the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions:
7.1. All representations and warranties of the Acquired Trust, with respect to
each Acquired Fund, contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date; and there
shall be (i) no pending or threatened litigation brought by any person (other
than each Acquired Fund, its adviser or any of their affiliates) against each
Acquiring Fund or its investment adviser(s), Board members or officers arising
out of this Agreement and (ii) no facts known to the Acquiring Fund which the
Acquiring Fund reasonably believes might result in such litigation.
7.2. Each Acquired Fund shall have delivered to its respective Acquiring
Fund a statement of the Acquired Fund's assets and liabilities as of the
Closing Date, certified by the Treasurer of the Acquired Fund;
7.3. Each Acquired Fund shall have delivered to its respective Acquiring Fund on
the Closing Date a certificate executed in its name by its President or a Vice
President, in a form reasonably satisfactory to the Acquiring Fund and dated as
of the Closing Date, to the effect that the representations and warranties of
the Acquired Trust with respect to the Acquired Fund made in this Agreement are
true and correct on and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement, and as to such other matters
as the Acquiring Fund shall reasonably request;
7.4. Each Acquiring Fund shall have received on the Closing Date an opinion of
Dechert Price & Rhoads, in a form reasonably satisfactory to the Acquiring Fund,
and dated as of the Closing Date, to the effect that:
(a) The Acquired Trust has been duly formed and is an existing business trust;
(b) each Acquired Fund has the corporate power to carry on its business as
presently conducted in accordance with the description thereof in the Acquired
Trust's registration statement under the 1940 Act; (c) the Agreement has been
duly authorized, executed and delivered by the Acquired Trust, on behalf of each
Acquired Fund, and constitutes a valid and legally binding obligation of the
Acquired Trust, on behalf of each Acquired Fund, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and laws of general applicability relating to or
affecting creditors' rights and to general equity principles; (d) the execution
and delivery of the Agreement did not, and the exchange of each Acquired Fund's
assets for Acquiring Fund Shares pursuant to the Agreement will not, violate the
Acquired Trust's Declaration of Trust, as amended, or By-laws; and (e) to the
knowledge of such counsel, all regulatory consents, authorizations, approvals or
filings required to be obtained or made by each Acquired Fund under the Federal
laws of the United States or the laws of the Commonwealth of Massachusetts for
the exchange of the Acquired Fund's assets for Acquiring Fund Shares, pursuant
to the Agreement have been obtained or made; and
7.5. Each Acquired Fund shall have performed all of the covenants and complied
with all of the provisions required by this Agreement to be performed or
complied with by the Acquired Fund on or before the Closing Date.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH ACQUIRING FUND AND
ITS RESPECTIVE ACQUIRED FUND
If any of the conditions set forth below have not been met on or before
the Closing Date with respect to each Acquired Fund or its respective Acquiring
Fund, the other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
8.1. This Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of the
respective Acquired Fund in accordance with the provisions of the Acquired
Trust's Declaration of Trust, as amended, and By-Laws, applicable Massachusetts
law and the 1940 Act, and certified copies of the resolutions evidencing such
approval shall have been delivered to its respective Acquiring Fund.
Notwithstanding anything herein to the contrary, neither an Acquiring Fund nor
an Acquired Fund may waive the conditions set forth in this section 8.1;
8.2. On the Closing Date, no action, suit or other proceeding shall be pending
or to its knowledge threatened before any court or governmental agency in which
it is sought to restrain or prohibit, or obtain material damages or other relief
in connection with, this Agreement or the transactions contemplated herein;
8.3. All consents of other parties and all other consents, orders and permits of
Federal, state and local regulatory authorities deemed necessary by an Acquiring
Fund or an Acquired Fund to permit consummation, in all material respects, of
the transactions contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve a risk of
a material adverse effect on the assets or properties of an Acquiring Fund or an
Acquired Fund, provided that either party hereto may for itself waive any of
such conditions;
8.4. The parties shall have received an opinion of Willkie Farr & Gallagher
addressed to each of the Acquiring Trust and the Acquired Trust, in a form
reasonably satisfactory to each such party to this Agreement, substantially to
the effect that, based upon certain facts, assumptions and representations of
the parties, for federal income tax purposes: (i) the transfer to each Acquiring
Fund of all or substantially all of the assets of its respective Acquired Fund
in exchange solely for Acquiring Fund shares and the assumption by the Acquiring
Fund of all of the liabilities of the Acquired Fund, followed by the
distribution of such shares to the Acquired Fund's shareholders in exchange for
their shares of the Acquired Fund in complete liquidation of the Acquired Fund,
will constitute a "reorganization" within the meaning of Section 368(a)(1) of
the Code, and the Acquiring Fund and the Acquired Fund will each be "a party to
a reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain
or loss will be recognized by an Acquired Fund upon the transfer of all or
substantially all of its assets to its respective Acquiring Fund in exchange
solely for Acquiring Fund shares and the assumption by the Acquiring Fund of all
of the liabilities of the Acquired Fund; (iii) the basis of the assets of each
Acquired Fund in the hands of its respective Acquiring Fund will be the same as
the basis of such assets of the Acquired Fund immediately prior to the transfer;
(iv) the holding period of the assets of each Acquired Fund in the hands of its
respective Acquiring Fund will include the period during which such assets were
held by the Acquired Fund; (v) no gain or loss will be recognized by an
Acquiring Fund upon the receipt of the assets of its respective Acquired Fund in
exchange for Acquiring Fund shares and the assumption by the Acquiring Fund of
all of the liabilities of the Acquired Fund; (vi) no gain or loss will be
recognized by the shareholders of an Acquired Fund upon the receipt of the
Acquiring Fund shares solely in exchange for their shares of the Acquired Fund
as part of the transaction; (vii) the basis of the Acquiring Fund shares
received by the shareholders of an Acquired Fund will be the same as the basis
of the shares of the Acquired Fund exchanged therefor; and (viii) the holding
period of Acquiring Fund shares received by the shareholders of an Acquired Fund
will include the holding period during which the shares of the Acquired Fund
exchanged therefor were held, provided that at the time of the exchange the
shares of the Acquired Fund were held as capital assets in the hands of the
shareholders of the Acquired Fund. The delivery of such opinion is conditioned
upon receipt by Willkie Farr & Gallagher of representations it shall request of
each of the Acquiring Trust and Acquired Trust. Notwithstanding anything herein
to the contrary, neither an Acquiring Fund nor an Acquired Fund may waive the
condition set forth in this section 8.5.
9. INDEMNIFICATION
9.1. Each Acquiring Fund agrees to indemnify and hold harmless its respective
Acquired Fund and each of the Acquired Trust's Board members and officers from
and against any and all losses, claims, damages, liabilities or expenses
(including, without limitation, the payment of reasonable legal fees and
reasonable costs of investigation) to which jointly and severally, the Acquired
Fund or any of the Acquired Trust's Board members or officers may become
subject, insofar as any such loss, claim damage liability or expense (or actions
with respect thereto) arises out of or is based on any breach by the Acquiring
Fund of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
9.2. Each Acquired Fund agrees to indemnify and hold harmless its respective
Acquiring Fund and each of the Acquiring Trust's Board members and officers from
and against any and all losses, claims, damages, liabilities or expenses
(including, without limitation, the payment of reasonable legal fees and
reasonable costs of investigation) to which jointly and severally, the Acquiring
Fund or any of the Acquiring Trust's Board members or officers may become
subject, insofar as any such loss, claim damage liability or expense (or actions
with respect thereto) arises out of or is based on any breach by the Acquired
Fund of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
10. FEES AND EXPENSES
10.1. Each of the Acquiring Trust on behalf of the Acquiring Funds, and the
Acquired Trust, on behalf of the Acquired Funds, represents and warrants to the
other that it has no obligations to pay any brokers or finders fees in
connection with the transactions provided for herein.
10.2. [Each Fund will pay its own allocable share of expenses associated with
the Reorganization, except that Scudder Kemper Investments, Inc. ("Scudder
Kemper") will bear any such expenses in excess of $_____ for the Acquiring Fund
and $_____ for the Acquired Fund (approximately $_____ and $_____ per share,
respectively, based on current net assets for each Fund).] [Any such expenses
which are so borne by Scudder Kemper will be solely and directly related to the
Reorganization within the meaning of Revenue Ruling 73-54, 1973-1 C.B. 187.]
[Scudder Kemper should either sign this Agreement for purposes of 10.2 only or
enter into a separate contract with each Fund regarding the allocation expenses
of the Reorganization.] The Acquired Fund shareholders will pay their own
expenses, if any, incurred in connection with the Reorganization.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1. Each Fund agrees that neither party has made any representation, warranty
or covenant not set forth herein and that this Agreement constitutes the entire
agreement between the parties.
11.2. Except as specified in the next sentence set forth in this section 11.2,
the representations, warranties and covenants contained in this Agreement or in
any document delivered pursuant hereto or in connection herewith shall not
survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing and the obligations of each Acquired
Fund and Acquiring Fund in Sections 9.1 and 9.2 shall survive the Closing.
12. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by either party by (i) mutual agreement of the parties,
or (ii) by either party if the Closing shall not have occurred on or before ,
unless such date is extended by mutual agreement of the parties, or (iii) by
either party if the other party shall have materially breached its obligations
under this Agreement or made a material and intentional misrepresentation herein
or in connection herewith. In the event of any such termination, this Agreement
shall become void and there shall be no liability hereunder on the part of any
party or their respective Board members or officers, except for any such
material breach or intentional misrepresentation, as to each of which all
remedies at law or in equity of the party adversely affected shall survive.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by any authorized officer of the
Acquired Trust and any authorized officer of the Acquiring Trust; provided,
however, that following the meeting of each Acquired Fund Shareholders called by
the Acquired Trust pursuant to section 5.2 of this Agreement, no such amendment
may have the effect of changing the provisions for determining the number of the
Acquiring Fund Shares to be issued to the Acquired Fund shareholders under this
Agreement to the detriment of such shareholders without their further approval.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be deemed duly given
if delivered by hand (including by Federal Express or similar express courier)
or transmitted by facsimile or three days after being mailed by prepaid
registered or certified mail, return receipt requested, addressed to the
Acquired Fund, ______________[address], with a copy to Dechert Price & Rhoads,
Ten Post Office Square South, Boston, MA 02109-4603, Attention: Sheldon A.
Jones, Esq., or to the Acquiring Fund, ___________________[address], with a copy
to Dechert Price & Rhoads, Ten Post Office Square South, Boston, MA 02109-4603,
Attention: Sheldon A. Jones, Esq., or to any other address that an Acquired Fund
or an Acquiring Fund shall have last designated by notice to the other party.
15. HEADINGS; COUNTERPARTS; ASSIGNMENT; LIMITATION OF LIABILITY
15.1. The Article and section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.2. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
15.3. This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, but no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by any party
without the written consent of the other party. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and the shareholders of each
Acquiring Fund and Acquired Fund and their respective successors and assigns,
any rights or remedies under or by reason of this Agreement.
15.4. Each Trust is organized as a Massachusetts business trust, and references
in this Agreement to the Acquiring Trust or Acquired Trust mean and refer to the
Board members from time to time serving under each Trust's Declaration of Trust
on file with the Secretary of State of the Commonwealth of Massachusetts, as the
same may be amended from time to time, pursuant to which each Trust conducts its
business. It is expressly agreed that the obligations of the Trusts hereunder
shall not be binding upon any of the Board members, shareholders, nominees,
officers, agents, or employees of either Trust, or the Acquiring Funds or
Acquired Funds personally, but bind only the respective property of each
Acquiring Fund or Acquired Fund, as applicable, as provided in the each Trust's
Declaration of Trust. Moreover, no series of either Trust other than the
Acquiring Funds or the Acquired Funds, as applicable, shall be responsible for
the obligations of the either Trust hereunder, and all persons shall look only
to the assets of each Acquiring Fund or Acquired Fund, as applicable, to satisfy
the obligations of each Trust hereunder. The execution and the delivery of this
Agreement have been authorized by each Trust's Board members, on behalf of each
Fund and this Agreement has been signed by authorized officers of each Trust
acting as such, and neither such authorization by such Board members, nor such
execution and delivery by such officers, shall be deemed to have been made by
any of them individually or to impose any liability on any of them personally,
but shall bind only the property of applicable Fund, as provided in the Trust's
Declaration of Trust.
Notwithstanding anything to the contrary contained in this Agreement, the
obligations, agreements, representations and warranties with respect to each
Acquiring Fund and Acquired Fund, as the case may be, shall constitute the
obligations, agreements, representations and warranties of the Acquiring Fund or
the Acquired Fund, as the case may be, only (the "Obligated Fund"), and in no
event shall any other series of the Acquiring Trust or the Acquired Trust or the
assets of any such series be held liable with respect to the breach or other
default by the Obligated Fund of its obligations, agreements, representations
and warranties as set forth herein.
15.5. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Massachusetts, without regard to its
principles of conflicts of laws.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President and its seal to be
affixed thereto and attested by its Secretary or Assistant Secretary.
Attest: AARP Growth Trust
on behalf of AARP Capital Growth Fund
and AARP Small Company Stock Fund
_________________________
Secretary
______________________________
By:___________________________
Its:____________________________
Attest: Investment Trust
on behalf of Scudder Capital Growth Fund
and Scudder Small Company Fund
_________________________
Secretary
______________________________
By:___________________________
Its:____________________________
<PAGE>
APPENDIX 1
Beneficial Ownership of Fund Shares
<PAGE>
APPENDIX 2
Fund Shares Owned by Nominees and Trustees
Many of the Nominees and Trustees own shares of the series of the Trust
and of other funds in the Scudder Family of Funds and AARP Funds, allocating
their investments among such funds based on their individual investment needs.
The following table sets forth, for each Nominee and Trustee, the number of
shares owned in each series of the Trust as of January 31, 2000. The information
as to beneficial ownership is based on statements furnished to the Trust by each
Nominee and Trustee. Unless otherwise noted, beneficial ownership is based on
sole voting and investment power. [Each Nominee's and Trustee's individual
shareholdings of any series of the Trust constitute less than 1% of the shares
outstanding of such fund.] [As a group, the Trustees and officers own less than
1% of the shares of any series of the Trust.]
<TABLE>
<CAPTION>
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
AARP
Balanced AARP AARP AARP AARP AARP Small AARP U.S.
Stock and Capital Global Growth International Company Stock
Bond Fund Growth Fund Growth and Stock Fund Stock Fund Index Fund
Fund Income
Fund
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Carole Lewis Anderson(1)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Adelaide Attard(2)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Henry P. Becton, Jr.(3)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Robert N. Butler, M.D.(4)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Linda C. Coughlin(5)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Horace B. Deets(6)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Dawn-Marie Driscoll(7)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Edgar R. Fiedler(8)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Lt. Gen. Eugene P.
Forrester(9)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Keith R. Fox(10)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
George L. Maddox, Jr.(11)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Robert J. Myers(12)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
James H. Schulz(13)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Gordon Shillinglaw(14)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Joan Edelman Spero(15)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Jean Gleason Stromberg(16)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Jean C. Tempel(17)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
Steven Zaleznick(18)
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
[All Trustees and Officers
as a Group]
- ---------------------------- ----------- ------------ ------------ ----------- ------------ ------------ -----------
</TABLE>
1 As of January 31, 2000, Ms. Anderson's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
2 As of January 31, 2000, Ms. Attard's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
3 As of January 31, 2000, Mr. Becton's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
4 As of January 31, 2000, Dr. Butler's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
5 As of January 31, 2000, Ms. Coughlin's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
6 As of January 31, 2000, Mr. Deets's total aggregate holdings in each series
of the Trust listed above and all other funds in the Scudder Family of
Funds and AARP Funds ranged between $___________ and $___________.
7 As of January 31, 2000, Ms. Driscoll's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
8 As of January 31, 2000, Mr. Fiedler's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
9 As of January 31, 2000, Lt. Gen. Forrester's total aggregate holdings in
each series of the Trust listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and
$___________.
10 As of January 31, 2000, Mr. Fox's total aggregate holdings in each series
of the Trust listed above and all other funds in the Scudder Family of
Funds and AARP Funds ranged between $___________ and $___________.
11 As of January 31, 2000, Mr. Maddox's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
12 As of January 31, 2000, Mr. Myers's total aggregate holdings in each series
of the Trust listed above and all other funds in the Scudder Family of
Funds and AARP Funds ranged between $___________ and $___________.
13 As of January 31, 2000, Mr. Schulz's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
14 As of January 31, 2000, Dr. Shillinglaw's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
15 As of January 31, 2000, Ms. Spero's total aggregate holdings in each series
of the Trust listed above and all other funds in the Scudder Family of
Funds and AARP Funds ranged between $___________ and $___________.
16 As of January 31, 2000, Ms. Stromberg's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
17 As of January 31, 2000, Ms. Tempel's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
18 As of January 31, 2000, Mr. Zaleznick's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
<PAGE>
FORM OF PROXY
[Logo] YOUR VOTE IS IMPORTANT!
[Address]
VOTE TODAY BY MAIL,
TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL FREE 1-XXX-XXX-XXXX OR
LOG ON TO WWW.PROXYWEB.COM/XXXXX
*** CONTROL NUMBER: xxx xxx xxx xxx xx *** Please fold and detach card at
perforation before mailing.
AARP GROWTH TRUST
[Fund]
Two International Place
Boston, Massachusetts 02110-4603
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
2:00 p.m., Eastern Time, on July 11, 2000
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 [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 02110-4603, on July 11, 2000 at 2:00
p.m., Eastern time, and at any adjournments thereof.
PLEASE SIGN AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED.
Dated ____________________________,2000
Please sign exactly as your name or
names appear. When signing as an
attorney, executor, administrator,
trustee or guardian, please give your
full title as such.
---------------------------------------
[Name]
[Address]
---------------------------------------
Signature(s) of Shareholder(s)
<PAGE>
[Logo] YOUR VOTE IS IMPORTANT!
[Address]
VOTE TODAY BY MAIL,
TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL FREE 1-xxx-xxx-xxxx OR
LOG ON TO WWW.PROXYWEB.COM/xxxxx
Please fold and detach card at perforation before mailing.
All properly executed proxies will be voted as directed. If no
instructions are indicated on a properly executed proxy, the proxy will be voted
FOR approval of the proposals.
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF AARP GROWTH
TRUST(the "Trust") THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS.
Please vote by filling in the boxes below.
FOR all WITHHOLD ABSTAIN
nominees authority
listed to vote
(except as for all
noted in nominees
space listed
provided)
PROPOSAL 1
To elect Trustees to the
Board of Trustees of the
Trust, to hold office until _________ __________ __________
their respective successors
have been duly elected and
qualified or until their
earlier resignation or
removal.
NOMINEES:
(01) Henry P. Becton, Jr.,
(02) Linda C. Coughlin, (03)
Dawn-Marie Driscoll, (04)
Edgar R. Fiedler, (05) Keith
R. Fox, (06) Joan Edelman
Spero, (07) Jean Gleason
Stromberg, (08) Jean C.
Tempel, (09) Steven Zaleznick.
INSTRUCTION: To withhold
authority to vote for any
individual nominee, write the
name(s) on the line
immediately below.
- ----------------------------------------------------
PROPOSAL 2 FOR AGAINST ABSTAIN
To approve an Agreement and
Plan of Reorganization for the
Fund whereby the Fund will _________ __________ __________
reorganize from a Maryland
corporation into a
Massachusetts business trust.
PROPOSAL 3 FOR AGAINST ABSTAIN
To ratify the selection of
PricewaterhouseCoopers LLP as
the Fund's independent _________ __________ __________
accountants for the current
fiscal year.
The proxies are authorized to
vote in their discretion on
any other business which may
properly come before the
meeting and any adjournments
thereof.
PLEASE SIGN ON REVERSE SIDE
