<PAGE>
As filed with the Securities and Exchange Commission
on March 6, 2000.
Securities Act File No.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / x /
----
Pre-Effective Amendment No. /____/ Post-Effective Amendment No. /____/
GLOBAL/INTERNATIONAL FUND, INC.
(Exact Name of Registrant as Specified in Charter)
345 Park Avenue, New York, New York 10154
(Address of Principal Executive Offices) (Zip Code)
John Millette
Scudder Kemper Investments, Inc.
Two International Place
Boston, MA 02110-4103
(Name and Address of Agent for Service)
(617) 295-1000
(Registrant's Area Code and Telephone Number)
with copies to:
Caroline Pearson, Esq. Sheldon A. Jones, Esq.
Scudder Kemper Investments, Inc. Dechert Price & Rhoads
Two International Place Ten Post Office Square - South
Boston, MA 02110-4103 Boston, MA 02109-4603
Approximate Date of Proposed Public Offering:
As soon as practicable after this
Registration Statement is
declared effective.
Title of Securities Being Registered:
Capital Stock ($.01 par value)
of Scudder Global Fund, a series of the Registrant
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It is proposed that this filing will become effective on April 5,
2000 pursuant to Rule 488 under the Securities Act of 1933.
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No filing fee is required because the Registrant has previously registered an
indefinite number of its shares under the Securities Act of 1933, as amended,
pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended.
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PART A
INFORMATION REQUIRED IN THE PROXY STATEMENT/PROSPECTUS
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
AARP GROWTH TRUST
AARP GLOBAL GROWTH FUND
Please take notice that a Special Meeting of Shareholders (the
"Meeting") of AARP Global Growth Fund (the "Fund"), a series of AARP Growth
Trust (the "Trust"), will be held 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 the Fund whereby all or substantially all of the
assets and liabilities of the Fund would be acquired
by Scudder Global Fund in exchange for shares of the
AARP Shares class of Scudder Global Fund; and
Proposal 3: To ratify the selection of PricewaterhouseCoopers
LLP as the independent accountants for the Fund for
the Fund's current fiscal year.
The appointed proxies will vote in their discretion on any other
business that may properly come before the Meeting or any adjournments thereof.
Holders of record of shares of the Fund at the close of business on
April 17, 2000 are entitled to vote at the Meeting 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, 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 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
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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.
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Table of Contents
Introduction....................
Proposal 1: Election of Trustees/Directors for the Acquired
Trust/Corporation........
Nominees for Election..............
Trustees/Directors Not Standing for Re-election............
Responsibilities of the Board -- Board and Committee Meetings........
Audit Committee........
Committee on Independent Trustees/Directors........
Attendance............
Honorary Trustees/Directors.........
Officers.............
Compensation of Trustees/Directors and Officers.........
Proposal 2: Approval of Agreement and Plan of Reorganization......
I. SYNOPSIS.........
Introduction.........
Background of the Reorganization...........
Reasons for the Proposed Transaction; Board Approval.......
Investment Objectives, Policies and Restrictions of the
Funds........
Portfolio Turnover..........
Performance...........
Investment Manager; Fees and Expenses......
Administrative Fee..........
Comparison of Expenses.........
Financial Highlights.........
Distribution of Shares........
Purchase, Redemption and Exchange Information.........
Dividends and other Distributions..........
Tax Consequences........
II. PRINCIPAL RISK FACTORS......
III. THE PROPOSED TRANSCTION..........
Description of the Plan........
Board Approval of the Proposed Transaction......
Description of the Securities to be Issued.....
Federal Income Tax Consequences.........
Capitalization...........
Proposal 3: Ratification or Rejection of the Selection of Independent
Accountants
Additional Information
Exhibit A
Exhibit B
Appendix 1
Appendix 2
Part B: Statement of Additional Information
Part C: Other Information
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PROXY STATEMENT/PROSPECTUS
[DATE]
Relating to the acquisition of the assets of
AARP GLOBAL GROWTH FUND (the "Acquired Fund"),
a separate series of
AARP GROWTH TRUST (the "Acquired Trust")
Two International Place
Boston, Massachusetts 02110-4103
(800) 253-2277
by and in exchange for shares of capital stock of the AARP Shares class of
SCUDDER GLOBAL FUND (the "Acquiring Fund"),
a separate series of
GLOBAL/INTERNATIONAL FUND, INC. (the "Acquiring Corporation")
345 Park Avenue
New York, New York 10154
(800) 728-3337
INTRODUCTION
This Proxy Statement/Prospectus is being furnished to shareholders of
the Acquired Fund in connection with three proposals (each a "Proposal").
Proposal 1 describes the election of Trustees, and Proposal 3 proposes the
ratification of the Acquired Fund's accountants.
In Proposal 2, shareholders are asked to approve a proposed
reorganization in which all or substantially all of the assets of the Acquired
Fund would be acquired by the Acquiring Fund, in exchange for shares of capital
stock of the AARP Shares class of the Acquiring Fund (known as "AARP Shares) and
the assumption by the Acquiring Fund of all of the liabilities of the Acquired
Fund, as described more fully below (the "Reorganization"). Shares of the
Acquiring Fund thereby received would then be distributed to the shareholders of
the Acquired Fund in complete liquidation of the Acquired Fund. As a result of
the Reorganization, each shareholder of the Acquired Fund would receive that
number of AARP Shares having an aggregate net asset value equal to the aggregate
net asset value of such shareholder's shares of the Acquired Fund held as of the
close of business on the Valuation Date. Shareholders of the Acquired Fund will
vote on an Agreement and Plan of Reorganization (the "Plan") pursuant to which
the Reorganization would be consummated. A copy of the Plan is attached hereto
as Exhibit A. The closing of the Reorganization (the "Closing") is contingent
upon shareholder approval of the Plan. The Reorganization is expected to occur
on or about September 11, 2000.
Proposals 1 and 2 relate to a restructuring program proposed by Scudder
Kemper Investments, Inc. ("Scudder Kemper" or the "Investment Manager") and
described in more detail below.
In the descriptions of the Proposals below, the word "fund" is
sometimes used to mean investment companies or series thereof in general, and
not the Acquired Fund whose proxy statement this is. In addition, for
simplicity, actions are described in this Proxy Statement as being taken by
either the Acquired Fund or the Acquiring Fund (each a "Fund" and collectively
the "Funds"), although all actions are actually taken either by the Acquired
Trust or the Acquiring Corporation, on behalf of the applicable Fund.
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THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES NOR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Proxy Statement/Prospectus sets forth concisely the information
about the Acquiring Fund that a prospective investor should know before
investing and should be retained for future reference. For a more detailed
discussion of the investment objective, policies, restrictions and risks of the
Acquiring Fund, see the Acquiring Fund's prospectus, dated January 1, 2000, as
supplemented from time to time, which is included herewith and incorporated
herein by reference. For a more detailed discussion of the investment objective,
policies, restrictions and risks of the Acquired Fund, see the Acquired Fund's
prospectus, dated February 1, 2000, as supplemented from time to time, which is
incorporated herein by reference and a copy of which may be obtained upon
request and without charge by calling or writing the Acquired Fund at the
telephone number or address set forth on the preceding page .
The Acquiring Fund's Statement of Additional Information, dated January
1, 2000, is incorporated herein by reference and may be obtained upon request
and without charge by calling or writing the Acquiring Fund at the telephone
number or address set forth on the preceding page. A Statement of Additional
Information, dated ___________________, containing additional information about
the Reorganization and the parties thereto has been filed with the Securities
and Exchange Commission (the "SEC" or the "Commission") and is incorporated by
reference into this Proxy Statement/Prospectus. A copy of the Statement of
Additional Information relating to the Reorganization is available upon request
and without charge by calling or writing the Acquiring Fund at the telephone
number or address set forth on the preceding page. Shareholder inquiries
regarding the Acquired Fund may be made by calling (800) 253-2277. Shareholder
inquiries regarding the Acquiring Fund may be made by calling (800) 728-3337.
The information contained herein concerning the Acquired Fund has been provided
by, and is included herein in reliance upon, the Acquired Fund. The information
contained herein concerning the Acquiring Fund has been provided by, and is
included herein in reliance upon, the Acquiring Fund. The AARP Shares will be a
newly-established class of shares of the Acquiring Fund and will be identical in
all material respects to the Acquiring Fund shares currently offered and sold,
as described in the prospectus and statement of additional information for the
Acquiring Fund, dated January 1, 2000, except as otherwise described herein.
The Acquiring Fund and the Acquired Fund are diversified series of
capital stock, in the case of the Acquiring Fund, and shares of beneficial
interest, in the case of the Acquired Fund, of, respectively, the Acquiring
Corporation and the Acquired Trust. The Acquiring Corporation and the Acquired
Trust are each an open-end management investment company organized as a Maryland
corporation and a Massachusetts business trust, respectively.
The Board of Trustees (except as otherwise noted, "Trustees" refers to
the Trustees of the Acquired Trust and "Board" refers to the Board of Trustees
of the Acquired Trust) is soliciting proxies from shareholders of the Acquired
Fund, on behalf of the Acquired Fund, for the Special Meeting of Shareholders to
be held on July 11, 2000, at Scudder Kemper's offices, at Floor 13, Two
International Place, Floor 13, Boston, MA 02110-4103 at 2:00 p.m. (Eastern
time), or at such later time made necessary by adjournment (the "Meeting").
The Board of Trustees recommends that shareholders vote for the
nominees listed in Proposal 1, and for Proposals 2 and 3.
PROPOSAL 1: ELECTION OF TRUSTEES FOR THE ACQUIRED TRUST
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At the Meeting, shareholders will be asked to elect nine individuals to
constitute the Board of Trustees of the Acquired Trust. These individuals were
nominated after a careful and deliberate selection process by the present Board
of Trustees of the Acquired Trust. The nominees for election, who are listed
below, include seven persons who currently serve as Independent Trustees (as
defined below) of the Acquired Trust, the Acquiring Corporation or as
independent trustees or directors of other no-load funds advised by Scudder
Kemper and who have no affiliation with Scudder Kemper or AARP. The nominees
listed below are also being nominated for election as Directors of the Acquiring
Corporation and 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 below under Proposal
2, 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 of the
Acquired Trust 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 Acquired 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
Acquired 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 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
listed in the following paragraphs and table for more than five years, but 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. graduated from Yale University in 1965, where he was
elected to Phi Beta Kappa and was Chairman of the Yale Broadcasting Corporation.
He received his J.D. degree from Harvard Law School in 1968. He joined the staff
of WGBH Educational Foundation in 1970, was appointed General Manager in 1978,
and was elected President and General Manager in 1984. 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.
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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 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. 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 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
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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 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
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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:
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Name Present Office with the Acquired Trust;
Principal Occupation or Employment 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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Name Present Office with the Acquired Trust;
Principal Occupation or Employment and
Directorships
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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. Dr.
Shillinglaw serves on the Boards of an
additional 4 trusts whose funds are
advised by Scudder Kemper.
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* Nominee or Trustee considered by the Acquired 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 Acquired Trust, the
Investment Manager or AARP because of his or her employment by the
Investment Manager or AARP, and, in some cases, holding offices with
the Acquired Trust.
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Appendix 1 hereto sets forth the number of shares of each series of the
Acquired Trust owned directly or beneficially by the Trustees of the Acquired
Trust and by the nominees for election.
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 this 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 Acquired
Trust, a practice also favored by the SEC. The Independent Trustees have primary
responsibility for assuring that the Acquired 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 fund of the Acquired 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 1999 Advisory Group Report
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. The
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 of the Acquired Trust has an Audit Committee and a Committee
on Independent Trustees, the responsibilities of which are described below. In
addition, the Acquired Trust 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 Acquired Trust, among other things, the scope
of the audit and the internal controls of each series of the Acquired 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 Acquired 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
Acquired Trust.
As suggested by the Advisory Group Report, the Acquired Trust's Audit
Committee is comprised entirely of Independent Trustees, meets privately with
the independent accountants of each series of the Acquired 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.
-14-
<PAGE>
Committee on Independent Trustees
The Board of Trustees of the Acquired 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 Acquired Trust met six times, the
Audit Committee met two times and the Committee on Independent Trustees met two
times during calendar year 1999. Each then current Trustee attended 100% of the
total meetings of the Board and each committee on which he or she served as a
regular member that were held during that period, except Horace B. Deets, Robert
J. Myers and James H. Schulz, who attended 90%, 94% and 92%, respectively, of
those meetings. In addition to these Board and committee meetings, the Trustees
of the Acquired Trust attended various other meetings on behalf of the Acquired
Trust during the year, including meetings with their independent legal counsel
and informational meetings.
Officers
The following persons are officers of the Acquired Trust:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Present Office with the Acquired
Trust; Principal Occupation or
Name (Age) Employment(1) Year First Became an Officer(2)
- ---------- ---------- ----------------------------
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Linda C. Coughlin (48) Trustee and President; Managing 2000
Director of Scudder Kemper
- ----------------------------------------------------------------------------------------------------------------------
William Glavin (41) Vice President; 1997
Senior Vice President of Scudder
Kemper
- ----------------------------------------------------------------------------------------------------------------------
Ann M. McCreary (43) Vice President; Managing Director of 1998
Scudder Kemper
- ----------------------------------------------------------------------------------------------------------------------
James Masur (39) Vice President; Senior Vice President 1999
of Scudder Kemper
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------
(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 Acquired Trust.
-15-
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Present Office with the Acquired
Trust; Principal Occupation or
Name (Age) Employment(1) Year First Became an Officer(2)
- ---------- ---------- ----------------------------
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John Millette (37) Vice President and Assistant 1999
Secretary; Assistant Vice President
of Scudder Kemper
- ----------------------------------------------------------------------------------------------------------------------
James W. Pasman (47) Vice President; Senior Vice President 1996
of Scudder Kemper
- ----------------------------------------------------------------------------------------------------------------------
Kathryn L. Quirk (47) Vice President and Secretary; 1997
Managing Director of Scudder Kemper
- ----------------------------------------------------------------------------------------------------------------------
John Hebble (41) Treasurer; Senior Vice President, 1997
Scudder Kemper
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Compensation of Trustees and Officers
The Acquired Trust pays each Independent Trustee an annual Trustee's
fee for each series of the Acquired Trust plus specified amounts for Board and
committee meetings attended and reimburses expenses related to the business of
any series of the Acquired 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 Acquired
Trust and Scudder Kemper, or any of its other affiliates. The newly-constituted
Board may determine to change its compensation structure.
The Independent Trustees of the Acquired Trust are not entitled to
benefits under any pension or retirement plan. 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 Acquired 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 Acquired Trust's investments, pays the
compensation and certain expenses of its personnel who serve as Trustees and
officers of the Acquired Trust and receives a management fee for its services.
Several of the Acquired 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 Acquired 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 Acquired
Trust.
Column (2) Aggregate compensation received by each Trustee of the
Acquired Trust during calendar year 1999.
Column (3) Total compensation received by each Trustee from funds
managed by Scudder Kemper (collectively, the "Fund Complex") during calendar
year 1999.
-16-
<PAGE>
Compensation Table
- --------------------------------------------------------------------------------
Trustees Aggregate Total Compensation
Compensation (number from Fund Complex* Paid to
of funds) Trustee
- --------------------------------------------------------------------------------
Carole Lewis Anderson $20,280 (5 funds) $40,935 (16 funds)
- --------------------------------------------------------------------------------
Adelaide Attard $19,013 (5 funds) $38,375 (16 funds)
- --------------------------------------------------------------------------------
Robert N. Butler $17,271 (5 funds) $34,855 (16 funds)
- --------------------------------------------------------------------------------
Edgar R. Fiedler $16,013 (5 funds) $54,495 (17 funds)
- --------------------------------------------------------------------------------
Eugene P. Forrester $20,280 (5 funds) $40,935 (16 funds)
- --------------------------------------------------------------------------------
George L. Maddox, Jr. $20,280 (5 funds) $40,935 (16 funds)
- --------------------------------------------------------------------------------
Robert J. Myers $18,838 (5 funds) $38,200 (16 funds)
- --------------------------------------------------------------------------------
James H. Schulz $18,381 (5 funds) $37,095 (16 funds)
- --------------------------------------------------------------------------------
Gordon Shillinglaw $23,208 (5 funds) $44,280 (16 funds)
- --------------------------------------------------------------------------------
Jean Gleason Stromberg $20,276 (5 funds) $40,935 (16 funds)
- --------------------------------------------------------------------------------
* 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 Global Growth Fund vote for each nominee.
PROPOSAL 2: APPROVAL OF
AGREEMENT AND PLAN OF REORGANIZATION
I. SYNOPSIS
The following is a summary of certain information contained in this
Proxy Statement/Prospectus relating to the Reorganization. This summary is
qualified by reference to the more complete information contained elsewhere in
this Proxy Statement/Prospectus, the Prospectuses and Statements of Additional
Information of the Funds, and the Plan. Shareholders should read this entire
Proxy Statement/Prospectus carefully.
Introduction
The Board of the Acquired Trust, including all of the Independent
Trustees, approved the Plan at a meeting held on February 7, 2000. Subject to
its approval by the shareholders of the Acquired Fund, the Plan provides for (a)
the transfer of all or substantially all of the assets and all of the
liabilities of the Acquired Fund to the Acquiring Fund, in exchange for AARP
Shares; (b) the distribution of such shares to the shareholders of the Acquired
Fund in complete liquidation of the Acquired Fund; and (c) the abolition of the
Acquired Fund as a series of the Acquired Trust. As a result of the
Reorganization, each shareholder of the Acquired Fund will become a shareholder
of the AARP Shares and will hold, immediately after the Reorganization, AARP
Shares having an aggregate net asset value equal to the aggregate net asset
value of such shareholder's shares of the Acquired Fund on the Valuation Date.
Scudder Kemper is the investment manager of both Funds. If the
Reorganization is completed, the Acquired Fund's shareholders will continue to
enjoy many of the same shareholder privileges as they currently enjoy, such as
the ability to buy, exchange and sell shares without paying a sales commission,
access to professional service representatives, and automatic dividend
reinvestment. See "Purchase, Redemption and Exchange Information."
-17-
<PAGE>
Background of the Reorganization
The Reorganization is 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 lineup of the Scudder Family of no-load
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
interests of shareholders of 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 a focus 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 objectives 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. The Reorganization
is also expected to result in lower operating expenses for Acquired Fund
shareholders, as described in "Comparison of Expenses" below.
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 above.)
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 payment by the
Acquiring Fund 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 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. Scudder Kemper has proposed that the Acquiring Fund implement
such an administrative fee upon the Closing, as described in "Administrative
Fee" below.
The fund consolidations, the adoption of an administrative fee and the
creation of a single board are expected to have a positive impact on Scudder
Kemper, as well. These changes are likely to result in reduced costs (and the
potential for increased profitability) for Scudder Kemper in advising or
servicing funds.
-18-
<PAGE>
Reasons for the Proposed Reorganization; Board Approval
Since receiving Scudder Kemper's proposals on September 22, 1999, the
Independent Trustees have conducted a thorough review of all aspects of the
proposed restructuring program. They have been assisted in this regard by their
independent counsel and by independent consultants with special expertise in
financial and mutual fund industry matters. In the course of discussions with
representatives of Scudder Kemper, the Independent Trustees have requested, and
Scudder Kemper has accepted, numerous changes designed to protect and enhance
the interests of shareholders. See "Board Approval of the Proposed Transaction"
below.
The Trustees believe that the Reorganization may provide shareholders
of the Acquired Fund with the following benefits:
o LOWER EXPENSES. If the Reorganization is approved, Acquired Fund
shareholders may benefit from lower total Fund operating expenses. Please
refer to "Comparison of Expenses" below.
o GREATER PREDICTABILITY OF EXPENSES. On or prior to Closing, the Acquiring
Fund and Scudder Kemper will enter into an administrative services
agreement pursuant to which Scudder Kemper will provide or pay others to
provide substantially all of the administrative services required by the
Acquiring Fund, and most Fund expenses, in return for payment by the
Acquiring Fund of a single administrative fee rate. This agreement, which
has an initial three year term, will protect the Acquiring Fund's
shareholders from increases in the Acquiring Fund's expense ratio
attributed to any increases in the costs of providing these services.
o OPPORTUNITY FOR HIGHER RETURN. The Acquiring Fund may provide an
opportunity for a higher level of return than the Acquired Fund, although
there can be no assurances in this regard. The Acquiring Fund has
outperformed the Acquired Fund over the past one and three year periods.
o SIMILAR INVESTMENT OBJECTIVES AND POLICIES. The combined fund will
continue to seek growth of capital through investment in global
securities. The Funds are currently managed by the same portfolio
management teams and have similar investments.
o TAX-FREE REORGANIZATION. Shareholders of the Acquiring Fund will exchange
their shares for shares of the Acquired of equal value. It is expected
that the transaction will be tax-free for Acquired Fund shareholders.
For these reasons, as more fully described below under "The Proposed
Transaction - Board Approval of the Proposed Transaction," the Trustees of the
Acquired Trust, including the Independent Trustees, have concluded that:
o the Reorganization is in the best interests of the Acquired Fund and its
shareholders; and
o the interests of the existing shareholders of the Acquired Fund will not
be diluted as a result of the Reorganization.
Accordingly, the Trustees recommend approval of the Plan effecting the
Reorganization. If the Plan is not approved, the Acquired Fund will continue in
existence unless other action is taken by the Trustees.
-19-
<PAGE>
Investment Objectives, Policies and Restrictions of the Funds
The investment objectives, policies and restrictions of the Acquired
Fund and the Acquiring Fund (and, consequently, the risks of investing in either
Fund) are very similar. Some differences do exist. The investment objective of
the Acquiring Fund is to seek long-term growth of capital. The investment
objective of the Acquired Fund is to provide long-term capital growth while
actively seeking to reduce downside risk as compared with other global growth
funds. There can be no assurance that either Fund will achieve its investment
objective. Both Funds have the same portfolio managers and are managed in a
substantially similar manner, except that the Acquired Fund seeks to reduce
downside risk by diversifying widely among regions, market sectors and
individual companies.
The Acquiring Fund normally invests at least 65% of its total assets in
U.S. and foreign equities, generally focusing on common stocks of established
companies in countries with developed economies. The Acquired Fund normally
invests at least 65% of its total assets in stocks issued by established
companies of any size in developed countries around the world, including the
U.S. The Acquired Fund invests primarily in companies that offer the potential
for sustainable above-average earnings growth.
The Acquiring Fund may invest up to 5% of its total assets in debt
securities that are rated Baa or below by Moody's Investor Services, Inc. or BBB
or below by Standard & Poor's Ratings Services ("high yield" or "junk" bonds).
To the extent the Acquired Fund invests in debt securities, the managers of the
Acquired Fund intend that such securities will be investment grade credit
ratings as determined by one or more rationally recognized rating services.
The Acquiring Fund may also invest in convertible stocks, convertible
stocks, preferred stocks, and depository receipts, over-the-counter securities,
investment grade debt securities, debt securities convertible into common stock,
convertible and non-convertible preferred stock, and fixed-income securities of
governments, governmental agencies, supranational agencies and companies. The
Acquiring Fund usually invests in securities of issuers located in at least
three countries, one of which may be the U.S.
The Acquired Fund may make only limited use of strategic transactions.
The Acquiring Fund, while limited to 5% of assets committed to strategic
transactions entered into for non-hedging purposes, may make more use of such
transactions. The Acquired Fund may also invest in real estate investment
trusts, zero coupon securities, convertible securities and investment-grade debt
securities. The Acquired Fund usually invests in securities of issuers located
in at least three countries, one of which may be the U.S.
Lastly, the Acquired Fund does not invest in securities issued by
tobacco-producing companies and has a stated goal of educating shareholders on
investment topics affecting their lives. Upon the closing of the Reorganization,
the Acquiring Fund will modify its investment objective to provide income exempt
from regular federal income tax while actively seeking to reduce downside risk
as compared with other tax-free income funds. In addition, the Acquiring Fund
will adopt the policy of excluding investment in securities issued by
tobacco-producing companies.
The Acquiring Fund's investment restrictions, as set forth in its
Statement of Additional Information, are identical to the Acquired Fund's
investment restrictions, except that the Acquiring Fund may not, as a
non-fundamental policy, lend portfolio securities in an amount greater than 5%
of its total assets. Investment restrictions of each Fund that are fundamental
policies may not be changed without the approval of Fund shareholders. Investors
should refer to the respective Statements of Additional
-20-
<PAGE>
Information of the Acquiring Fund and the Acquired Fund for a fuller description
of each Fund's investment policies and restrictions.
Portfolio Turnover
The average annual portfolio turnover rate for the Acquiring Fund,
i.e., the ratio of the lesser of annual sales or purchases to the monthly
average value of the portfolio (excluding from both the numerator and the
denominator securities with maturities at the time of acquisition of one year or
less), for the fiscal year ended June 30, 1999 and for the two months ended
August 31, 1999 (i.e., prior to the creation of AARP Shares), was 70.2% and
28.8% (annualized), respectively. The average annual portfolio turnover rate for
the Acquired Fund for the fiscal year ended September 30, 1999 was 54.8%.
Performance
The following table compares the investment performance of each Fund,
and may provide some indication of the risks of investing in each Fund by
showing changes in each Fund's performance from year to year and how the Fund's
average annual return for the periods indicated compare with those of a broad
measure of market performance. Neither Fund's past performance is an indication
of how the Fund will perform in the future.
Average Annual Total Return
For the Periods Ending December 31, 1999
- --------------------------------------------------------------------------------
Acquiring Fund+ Acquired Fund Benchmark Index**
--------------- ------------- -----------------
- --------------------------------------------------------------------------------
Past year 23.47% 22.13% 24.93%
- --------------------------------------------------------------------------------
Past 5 years 17.42% N/A 19.74%
- --------------------------------------------------------------------------------
Past 10 years 12.38% N/A 11.42%
- --------------------------------------------------------------------------------
Since Inception* N/A 14.96% 19.43%
- --------------------------------------------------------------------------------
+ AARP Shares were not offered during the periods covered. Performance shown is
for shares of the Acquiring Fund existing during the periods covered.
*The inception date for the Acquired Fund is February 1, 1996.
**Each Fund's benchmark index is the Morgan Stanley Capital International (MSCI)
World Index, an unmanaged capitalization-weighted measure of global stock
markets including the U.S., Canada, Europe, Australia, and the Far East. Index
returns are calculated monthly, assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees or expenses.
Total return for the Acquired Fund would have been lower during the
period since inception if the Investment Manager had not maintained expenses.
-21-
<PAGE>
For management's discussion of the Acquiring Fund's performance for the
annual period ended August 31, 1999 (prior to the creation of AARP Shares), see
Exhibit B attached hereto.
Investment Manager; Fees and Expenses
Each Fund retains the investment management firm of Scudder Kemper,
pursuant to separate contracts, to manage its daily investment and business
affairs, subject to the policies established by the Fund's Trustees/Directors.
Shareholders pay no direct charges or fees for investment management or other
services. Scudder Kemper is a Delaware corporation located at Two International
Place, Boston, Massachusetts 02110-4103.
The Investment Manager receives a fee for its services pursuant to its
investment management agreement with the Acquiring Fund. For these services, the
Acquiring Fund pays the Investment Manager a fee at an annual rate of 1.00% of
the first $500 million of average daily net assets, 0.95% of the next $500
million, 0.90% of the next $500 million, and 0.85% on average daily net assets
in excess of $1.5 billion. The fee is graduated so that increases in the
Acquiring Fund's net assets may result in a lower annual fee rate and decreases
in its net assets may result in a higher annual fee rate. As of August 31, 1999,
the Acquiring Fund had total net assets of $1,552,517,078. For the fiscal year
ended June 30, 1999 and for the two months ended August 31, 1999, the Acquiring
Fund paid the Investment Manager a fee of 0.94% and 0.94% (annualized),
respectively, of average daily net assets.
The Investment Manager receives a fee pursuant to the investment
management agreement as compensation for its services on behalf of the Acquired
Fund. Pursuant to the Acquired Fund's investment management agreement, the fee
payable to Scudder Kemper is calculated using a formula based in part on the
combined net assets of all AARP Funds, except for the two series of AARP Managed
Investment Portfolios Trust. The Acquired Fund currently pays the Investment
Manager a fee at an annual rate of 0.83% of average daily net assets. The fee
for the Acquiring Fund is calculated in a different manner than is currently
used for the Acquired Fund. Unlike the fee for the Acquired Fund, the Acquiring
Fund's fee will not change if the net assets of other funds managed by the
Investment Manager changes but it will go up or down based on the net assets of
the Acquiring Fund. As of September 30, 1999, the Acquired Fund had total net
assets of $144,931,413. For the fiscal year ended September 30, 1999, the
Acquired Fund paid the Investment Manager a fee of 0.83% of average daily net
assets.
Administrative Fee
On or prior to the Closing, the Acquiring Fund will have entered into
an administrative services agreement with Scudder Kemper (the "Administration
Agreement"), pursuant to which Scudder Kemper will provide or pay others to
provide substantially all of the administrative services required by the
Acquiring Fund (other than those provided by Scudder Kemper under its investment
management agreement with the Fund, as described above) in exchange for the
payment by the Acquiring Fund of an administrative services fee (the
"Administrative Fee") of 0.375% of average daily net assets. One effect of this
arrangement is to make the Acquiring Fund's 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
Acquiring Fund pursuant to separate agreements with the Fund, subject to
oversight and approval by the Acquiring Corporation's directors. Scudder Fund
Accounting Corporation, a subsidiary of Scudder Kemper, computes net asset value
for the Acquiring Fund and maintains its 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 Acquiring
-22-
<PAGE>
Fund. Scudder Trust Company, an affiliate of Scudder Kemper, provides
subaccounting and recordkeeping services for shareholder accounts in certain
retirement and employee benefit plans. As custodian, Brown Brothers Harriman &
Co. holds the portfolio securities of the Acquiring Fund, pursuant to a
custodian agreement. PricewaterhouseCoopers LLP audits the financial statements
of the Acquiring Fund and provides other audit, tax, and related services.
Dechert Price & Rhoads acts as general counsel for the Acquiring Fund. In
addition to the fees it pays under its current investment management agreement
with Scudder Kemper, the Acquiring Fund pays the fees and expenses associated
with these service arrangements, as well as the Acquiring Fund's insurance,
registration, printing, postage and other costs.
Once the Administration Agreement becomes effective, each Service
Provider will continue to provide the services that it currently provides to the
Acquiring Fund, as described above, under the current arrangements, except that
Scudder Kemper will pay these entities for the provision of their services to
the Acquiring Fund and will pay most other Fund expenses, including insurance,
registration, printing and postage fees. In return, the Acquiring Fund will pay
Scudder Kemper the Administrative Fee.
The proposed Administration Agreement will have an initial term of
three years, subject to earlier termination by the Acquiring Corporation's
directors. The fee payable by the Acquiring Fund to Scudder Kemper pursuant to
the Administration Agreement would be reduced by the amount of any credit
received from the Acquiring Fund's custodian for cash balances.
Certain expenses of the Acquiring Fund would not be borne by Scudder
Kemper under the Administration Agreement, 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, the Acquiring Fund would continue to pay the fees required by its
investment management agreement with Scudder Kemper.
Comparison of Expenses
The tables and examples below are designed to assist you in
understanding the various costs and expenses that you will bear directly or
indirectly as an investor in the Acquiring Fund and comparing these with the
expenses of the Acquired Fund. As indicated below, it is expected that the total
expense ratio of the Acquiring Fund following the Reorganization will be
substantially lower than the current expense ratio of the Acquired Fund. Unless
otherwise noted, the information is based on each Fund's expenses and average
daily net assets during the twelve months ended September 30, 1999 and on a pro
forma basis as of that date and for the period then ended, giving effect to the
Reorganization. Information in the tables and examples relating to the Acquiring
Fund relates to the Acquiring Fund as a whole prior to the creation of the AARP
Shares. Pro Forma information in the tables and examples relates to the AARP
Shares and the Class S shares class of the Acquiring Fund.
-23-
<PAGE>
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Pro Forma
Acquiring Fund Acquired Fund (Combined)
-------------- ------------- ----------
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum sales charge (load) imposed on
purchases (as a percentage of offering
price) None None None
- ------------------------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load)
(as a percentage of purchase price or
redemption proceeds) None None None
- ------------------------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load)
imposed on reinvested dividends None None None
- ------------------------------------------------------------------------------------------------------------------
Redemption fee (as a percentage of
amount redeemed, if applicable)+ None None None
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Annual Fund Operating Expenses (Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Pro Forma*
Acquiring Fund Acquired Fund (Combined)
-------------- ------------- ----------
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management fees 0.94% 0.83% 0.94%
- ------------------------------------------------------------------------------------------------------------------
Distribution and/or service
(12b-1) fees None None None
- ------------------------------------------------------------------------------------------------------------------
Other expenses 0.42% 0.82% 0.38%
- ------------------------------------------------------------------------------------------------------------------
Total annual Fund operating expenses 1.36% 1.65% 1.32%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
+ There is a $5 wire service fee for receiving redemption proceeds via wire.
-24-
<PAGE>
* Pro Forma expenses reflect the implementation of the Administrative Fee for
the Acquiring Fund to be effective upon the Reorganization.
In evaluating the Proposals, the Independent Trustees focused their
consideration on the Acquiring Fund's and the Acquired Fund's estimated
expense ratios calculated utilizing Fund net assets at December 31, 1999
(rather than average daily net assets for a full year, as used in the table
above), the number of shareholder accounts at that date, and other relevant
factors. This calculation resulted in an estimated expense ratio of 1.31% for
the Acquiring Fund and 1.53% for the Acquired Fund.
Examples (Unaudited)
Based on the costs above, the following examples are intended to help
you compare the cost of investing in each Fund with the cost of investing in
other mutual funds. The examples assume that you invest $10,000 in each Fund for
the time periods indicated and then redeem all of your shares at the end of
those periods. The examples also assume that your investment has a 5% return
each year and that each Fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions, your costs
would be as follows:
- --------------------------------------------------------------------------------
Pro Forma*
Year Acquiring Fund Acquired Fund (Combined)
- ---- -------------- ------------- ----------
- --------------------------------------------------------------------------------
1st $ 138 $ 168 $ 134
- --------------------------------------------------------------------------------
3rd $ 431 $ 520 $ 418
- --------------------------------------------------------------------------------
5th $ 745 $ 897 $ 723
- --------------------------------------------------------------------------------
10th $1,635 $1,955 $1,590
- --------------------------------------------------------------------------------
* Pro Forma expenses reflect the implementation of the Administrative Fee for
the Acquiring Fund to be effective upon the Reorganization.
Financial Highlights
The financial highlights table for the Acquiring Fund prior to the
creation of the AARP Shares, which is intended to help you understand the
Acquiring Fund's financial performance for the past five years, is included in
the Acquiring Fund's prospectus dated January 1, 2000, which is included
herewith and incorporated herein by reference.
Distribution of Shares
Scudder Investor Services, Inc. ("SIS"), Two International Place,
Boston, Massachusetts 02110, a subsidiary of the Investment Manager, is the
principal underwriter of each Fund. SIS charges no direct fees in connection
with the distribution of shares of the Funds. Following the Reorganization,
Acquiring Fund shareholders will continue to be able to purchase shares of the
funds in the Scudder Family of Funds on a no-load basis.
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Purchase, Redemption and Exchange Information
The purchase, redemption and exchange procedures and privileges of the
Acquired Fund are identical to those that will be in place for the AARP Shares,
except that Acquired Fund shareholders may exchange Acquired Fund shares only
into AARP Funds, while AARP Shares 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.
The minimum balance for non-retirement accounts investing in the AARP
Shares will be $1,000, which is lower than the minimum balance for
non-retirement accounts investing in the Acquired Fund. The minimum balance for
Individual Retirement Accounts ("IRAs") investing in AARP Shares will be $500,
as compared to $250 for the Acquired Fund. However, Acquired Fund IRA
shareholders receiving AARP Shares as a result of the Reorganization will only
be required to meet the Acquired Fund's $250 minimum balance requirement for
IRAs. AARP Share shareholders will not currently be charged an annual fee for
accounts that fall below the $1,000 minimum balance nor will such sub-minimum
accounts currently be subject to involuntary redemption by the Acquiring Fund.
Dividends and other Distributions
Each of the Funds intends to distribute dividends from its net
investment income and net realized capital gains after utilization of capital
loss carryforwards, if any, in December. An additional distribution may be made
if necessary. Dividends and distributions of each Fund will be invested in
additional shares of the Fund at net asset value and credited to the
shareholder's account on the payment date or, at the shareholder's election,
paid in cash.
If the Plan is approved by the Acquired Fund's shareholders, the
Acquired Fund will pay its shareholders a distribution of all undistributed net
investment income and undistributed realized net capital gains immediately prior
to the Closing.
Tax Consequences
As a condition to the Reorganization, the Acquiring Fund and the
Acquired Fund will have received an opinion of Willkie Farr & Gallagher in
connection with the Reorganization, to the effect that, based upon certain
facts, assumptions and representations, the Reorganization will constitute a
tax-free reorganization within the meaning of section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"). If the Reorganization constitutes
a tax-free reorganization, no gain or loss will be recognized by the Acquired
Fund or its shareholders as a direct result of the Reorganization. See "The
Proposed Transaction - Federal Income Tax Consequences."
II. PRINCIPAL RISK FACTORS
Because of their similar investment objectives, policies and
strategies, the principal risks presented by the Acquiring Fund are similar to
those presented by the Acquired Fund. The main risks applicable to the Acquiring
Fund include, among others, management risk, market risk, foreign currency risk,
and, to the extent the Fund invests in bonds, risk associated with interest
rates. Management risk refers to the fact that securities selected by Scudder
Kemper on behalf of the Acquiring Fund might not perform as well as the
securities held by other mutual funds, including the Acquired Fund, the
investment objectives of which are similar to those of the Acquiring Fund.
Market risk refers to the fact that the
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market values of common stock can fluctuate based on business performance of the
issuing companies, investor perception and general economic or financial market
movements. If certain sectors or securities don't perform as the portfolio
managers expect, the Fund could substantially underperform other balanced mutual
funds or lose money. Foreign stocks in particular tend to be more volatile than
their U.S. counterparts, for various reasons including political and economic
uncertainties and difficulty in obtaining accurate information. Foreign currency
risk refers to the effect currency exchange rates have on the dollar value of a
security. When the dollar value of a foreign currency falls, so does the value
of any investments the Fund owns that are denominated in that currency. Risk
associated with interest rates refers to the link between interest rates and
debt security performance. A rise in interest rates generally means a fall in
bond prices, and therefore in the value of the debt securities in the portfolio
of the Acquiring Fund. Because the Acquiring Fund does not actively seek to
reduce downside risk as compared to other global funds it may present more
significant risks than the Acquired Fund in a weak market.
For a further discussion of the investment techniques and risk factors
applicable to the Acquired Fund and the Acquiring Fund, see "Investment
Objectives, Policies and Restrictions of the Funds" herein, and the Prospectuses
and Statements of Additional Information for the Funds, which are incorporated
by reference herein.
III. THE PROPOSED TRANSACTION
Description of the Plan
As stated above, the Plan provides for the transfer of all or
substantially all of the assets of the AARP Shares to the Acquiring Fund in
exchange for that number of full and fractional AARP Shares having an aggregate
net asset value equal to the aggregate net asset value of the Acquired Fund as
of the close of business on the Valuation Date. The Acquiring Fund will assume
all of the liabilities of the Acquired Fund. The Acquired Fund will distribute
the AARP Shares received in the exchange to the shareholders of the Acquired
Fund in complete liquidation of the Acquired Fund. The Acquired Fund will be
abolished as a series of the Acquired Trust.
Upon completion of the Reorganization, each shareholder of the Acquired
Fund will own that number of full and fractional AARP Shares having an aggregate
net asset value equal to the aggregate net asset value of such shareholder's
shares held in the Acquired Fund immediately as of the close of business on the
Valuation Date. Such shares will be held in an account with the Acquiring
Corporation identical in all material respects to the accounts currently
maintained by the Acquired Trust for such shareholder, except as noted above. In
the interest of economy and convenience, AARP Shares issued to the Acquired
Fund's shareholders will be in uncertificated form.
Until the Closing, shareholders of the Acquired Fund will continue to
be able to redeem their shares at the net asset value next determined after
receipt by the Acquired Fund's transfer agent of a redemption request in proper
form. Redemption requests received by the transfer agent after the Closing will
be treated as requests received for the redemption of AARP Shares received by
the shareholder in connection with the Reorganization.
The obligations of each of the Acquiring Corporation and the Acquired
Trust on behalf of each of the Acquired Fund and the Acquiring Fund,
respectively, under the Plan are subject to various conditions, as stated
therein. Among other things, the Plan requires that all filings be made with,
and all authority be received from, the SEC and state securities commissions as
may be necessary in the opinion of counsel to permit the parties to carry out
the transactions contemplated by the Plan. The Acquired Fund and the
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Acquiring Fund are in the process of making the necessary filings. To provide
against unforeseen events, the Plan may be terminated or amended at any time
prior to the Closing by action of the Directors/Trustees of either of the
Acquiring Corporation or the Acquired Trust, notwithstanding the approval of the
Plan by the shareholders of the Acquired Fund. However, no amendment may be made
that materially adversely affects the interests of the shareholders of the
Acquired Fund without obtaining the approval of the Acquired Fund's
shareholders. The Acquired Fund and the Acquiring Fund may at any time waive
compliance with certain of the covenants and conditions contained in the Plan.
For a complete description of the terms and conditions of the Reorganization,
see the Plan at Exhibit A.
Each Fund will pay its own allocable share of expenses associated with
the Reorganization, except that Scudder Kemper will bear any such expenses in
excess of $92,472 for the Acquiring Fund and $142,764 for the Acquired Fund
(approximately $0.0017 and $0.0184 per share, respectively, based on December
31, 1999 net assets for each Fund).
Board Approval of the Proposed Transaction
Scudder Kemper first proposed the Reorganization to the Independent
Trustees of the Acquired Fund at a meeting held on September 22, 1999. The
Reorganization was presented to the Trustees and considered by them as part of a
broader initiative by Scudder Kemper to restructure many of the mutual funds
advised by it that are currently offered to retail investors (see "Synopsis -
Background of the Reorganization"). This initiative includes four major
components:
(i) The combination of funds with similar investment objectives
and policies, including in particular the combination of the
AARP Funds with similar Scudder Funds currently offered to the
general public;
(ii) The liquidation of certain small funds which have not achieved
market acceptance and which are unlikely to reach an efficient
operating size;
(iii) The implementation of an administration agreement for each
fund, covering, for a single fee rate, substantially all
services required for the operation of the fund (other than
those provided under the fund's investment management
agreement) and most expenses; and
(iv) The consolidation of the separate boards currently responsible
for overseeing several groups of no-load funds managed by
Scudder Kemper into a single board.
The Independent Trustees of the Acquired Fund reviewed the potential
implications of these proposals for the Acquired Fund as well as the various
other funds for which they serve as trustees or directors. They were assisted in
this review by their independent legal counsel and by independent consultants
with special expertise in financial and mutual fund industry matters. Following
the September 22 meeting, the Independent Trustees met in person or by telephone
on a number of occasions (including committee meetings) to review and discuss
these proposals, both among themselves and with representatives of Scudder
Kemper. On a number of occasions, these meetings included representatives of the
independent trustees or directors of other funds affected by these proposals. In
the course of their review, the Independent Trustees requested and received
substantial additional information and suggested numerous changes to Scudder
Kemper's proposals, many of which were accepted.
Following the conclusion of this process, the Independent Trustees of
the Acquired Fund, the independent trustees/directors of other funds involved
and Scudder Kemper reached general agreement on
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the elements of a restructuring plan as it affects shareholders of various funds
and, where required, agreed to submit elements of the plan for approval to
shareholders of those funds.
On February 7, 2000, the Board of the Acquired Fund, including the
Independent Trustees of the Acquired Fund, approved the terms of the
Reorganization and certain related proposals. At the February 7, 2000 meeting,
the Independent Trustees also agreed to recommend that the Reorganization be
approved by the Acquired Fund's shareholders.
In determining to recommend that the shareholders of the Acquired
Fund approve the Reorganization, the Board considered, among other factors:
(a) the fees and expense ratios of the Funds, including comparisons between
the expenses of the Acquired Fund and the estimated operating expenses of the
Acquiring Fund, and between the estimated operating expenses of the Acquiring
Fund and other mutual funds with similar investment objectives; (b) the terms
and conditions of the Reorganization and whether the Reorganization would
result in the dilution of shareholder interests; (c) the compatibility of the
Acquired Fund's and the Acquiring Fund's investment objectives, policies,
restrictions and portfolios; (d) the agreement by Scudder Kemper to provide
services to the Acquiring Fund for a fixed fee rate under the Administration
Agreement with an initial three year term; (e) the service features available
to shareholders of the Acquired Fund and the Acquiring Fund; (f) the costs to
be borne by the Acquired Fund, the Acquiring Fund and Scudder Kemper as a
result of the Reorganization; (g) prospects for the Acquiring Fund to attract
additional assets; (h) the tax consequences of the Reorganization on the
Acquired Fund, the Acquiring Fund and their respective shareholders; and (i)
the investment performance of the Acquired Fund and the Acquiring Fund.
The Trustees also gave extensive consideration to possible economies of
scale that might be realized by Scudder Kemper in connection with the
Reorganization, as well as the other fund combinations included in Scudder
Kemper's restructuring proposal. The Trustees concluded that these economies
were appropriately reflected in the fee and expense arrangements of the
Acquiring Fund, as proposed to be revised upon completion of the Reorganization.
In particular, the Trustees considered the benefits to shareholders resulting
from locking in the rate of the Acquiring Fund's Administrative Fee for an
initial three-year period. Because the Acquiring Fund will pay only its stated
Administrative Fee rate for such services and expenses regardless of changes in
actual costs, the Acquiring Fund's shareholders will be protected from increases
in the Acquiring Fund's expense ratio attributable to increases in such actual
costs. The Board also considered the protection this would afford shareholders
if the Acquiring Fund's net assets declined as a result of market fluctuations
or net redemptions.
The Trustees also considered the impact of the Reorganization on the
total expenses to be borne by shareholders of the Acquired Fund. As noted above
under "Comparison of Expenses," the pro forma substantially expense ratio
(reflecting the Administrative Fee) for the combined Fund following the
Reorganization is lower than the current expense ratio for the Acquired Fund.
The Board also considered that the Reorganization would permit the shareholders
of the Acquired Fund to pursue substantially similar investment goals in a
larger fund.
Finally, the Trustees concluded that the shareholders of the Acquired
Fund would be better served by having their interests represented by a single
board of trustees with responsibility for overseeing substantially all of the
funds to be marketed as a "family of funds" through Scudder's no-load
distribution channels. Accordingly, the Trustees agreed to recommend the
election of a new consolidated board comprised of representatives of each of the
various boards currently serving as Trustees of these funds.
Based on all of the foregoing, the Board concluded that the
Acquired Fund's participation in the Reorganization would be in the best
interests of the Acquired Fund and would not dilute the interests of
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the Acquired Fund's shareholders. The Board of Trustees, including the
Independent Trustees, recommends that shareholders of the Acquired Fund approve
the Reorganization.
Description of the Securities to be Issued
The Acquiring Fund is a series of the Acquiring Corporation, a
corporation organized under the laws of the state of Maryland on May 15, 1986.
The Acquiring Corporation's authorized capital consists of 800 million shares of
capital stock, par value $0.01 per share, 100 million shares of which are
allocated to the Acquiring Fund. The Directors of the Acquiring Corporation are
authorized to divide the Acquiring Corporation's shares into separate series.
The Acquiring Fund is one of five series of the Acquiring Corporation that the
Board has created to date. The Directors of the Acquiring Corporation are also
authorized to further divide the shares of the series of the Acquiring
Corporation into classes. The Directors of the Acquiring Corporation have
authorized the division of the Acquiring Fund into two classes, Class S shares
and AARP Shares. It is anticipated that this division will occur prior to the
Closing and that shares of the Acquiring Fund existing at that time will be
redesignated as Class S shares of the Acquiring Fund. If AARP Shares are not
created prior to the Closing, then the Reorganization will not be consummated.
Although shareholders of different classes of a series have an interest in the
same portfolio of assets, shareholders of different classes may bear different
expenses in connection with different methods of distribution.
Each share of each class of the Acquiring Fund represents an interest
in the Acquiring Fund that is equal to and proportionate with each other share
of that class of the Acquiring Fund. Acquiring Fund shareholders are entitled to
one vote per share (and a proportionate fractional vote per each fractional
share) held on matters on which they are entitled to vote. The Acquiring
Corporation is not required to hold shareholder meetings annually, although
shareholder meetings may be called for purposes such as electing or removing
Directors, changing fundamental policies or approving an investment management
contract. In the event that shareholders of the Acquiring Corporation wish to
communicate with other shareholders concerning the removal of any Director, such
shareholders shall be assisted in communicating with other shareholders for the
purpose of obtaining signatures to request a meeting of shareholders, all in the
manner provided in Section 16(c) of the 1940 Act as if Section 16(c) were
applicable.
The Acquiring Corporation is organized in Maryland, while the Acquired
Trust is organized in Massachusetts. Under Massachusetts law, shareholders of a
trust such as the Acquired Trust may, under certain circumstances, be held
personally liable as partners for the obligations of the trust. The Acquired
Trust's Declaration of Trust contains a disclaimer of liability and provides for
indemnification out of the Trust property of any shareholder held personally
liable for the claims and liabilities to which a shareholder may become subject
by reason of being or having been a shareholder. Thus, the risk of shareholder
liability is limited to circumstances in which the Acquired Trust itself would
be unable to meet its obligations. The Acquiring Corporation does not provide
such a disclaimer of liability or indemnification to its shareholders, because
Maryland law generally does not impose such liability on shareholders.
Federal Income Tax Consequences
The Reorganization is conditioned upon the receipt by the Acquired
Trust, on behalf of the Acquired Fund, and the Acquiring Corporation, on behalf
of the Acquiring Fund, of an opinion from Willkie Farr & Gallagher,
substantially to the effect that, based upon certain facts, assumptions and
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representations of the parties, for federal income tax purposes: (i) the
transfer to the Acquiring Fund of all or substantially all of the assets of the
Acquired Fund in exchange solely for AARP 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 the Acquired Fund upon the transfer of all or
substantially all of its assets to the Acquiring Fund in exchange solely for
AARP Shares and the assumption by the Acquiring Fund of all of the liabilities
of the Acquired Fund or upon the distribution of the AARP Shares to the Acquired
Fund shareholders in exchange for their shares of the Acquired Fund; (iii) the
basis of the assets of the Acquired Fund in the hands of the 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 the Acquired Fund in
the hands of the 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 the
Acquiring Fund upon the receipt of the assets of the Acquired Fund in exchange
for AARP 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 the Acquired Fund upon the receipt of the AARP Shares solely in
exchange for their shares of the Acquired Fund as part of the transaction; (vii)
the basis of the AARP Shares received by the shareholders of the Acquired Fund
will be the same as the basis of the shares of the Acquired Fund exchanged
therefor; and (viii) the holding period of AARP Shares received by the
shareholders of the 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.
While the Acquired Trust is not aware of any adverse state or local tax
consequences of the proposed Reorganization, it has not requested any ruling or
opinion with respect to such consequences and shareholders may wish to consult
their own tax adviser with respect to such matters.
Capitalization
The following table shows on an unaudited basis the capitalization of
each Fund as of September 30, 1999 (i.e., prior to the creation of AARP Shares),
and on a pro forma basis as of that date giving effect to the Reorganization:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Pro Forma Pro Forma
Acquiring Fund Acquired Fund Adjustments Combined(1)
-------------- ------------- ----------- -----------
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Class S Shares $1,516,081,901 (92,472)(3) $1,515,989,429
- -----------------------------------------------------------------------------------------------------------------------------------
AARP Shares $144,931,413 (142,764)(4) $ 144,788,649
- -----------------------------------------------------------------------------------------------------------------------------------
Total Net Assets $1,660,778,078(2)
- -----------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding
- -----------------------------------------------------------------------------------------------------------------------------------
Class S Shares 49,316,111 49,316,111
- -----------------------------------------------------------------------------------------------------------------------------------
AARP Shares 7,162,400 (2,452,294) 4,710,106
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value Per Share
- -----------------------------------------------------------------------------------------------------------------------------------
Class S Shares $ 30.74 $ 30.74
- -----------------------------------------------------------------------------------------------------------------------------------
AARP Shares $ 20.24 $ 30.74
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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(1) Assumes the Reorganization had been consummated on September 30, 1999, and
is for information purposes only. No assurance can be given as to how many
shares of the Acquiring Fund will be received by the shareholders of the
Acquired Fund on the date the Reorganization takes place, and the foregoing
should not be relied upon to reflect the number of shares of the Acquiring Fund
that actually will be received on or after such date.
(2) Pro Forma combined net assets do not reflect expense reductions that would
result from the implementation of the Administrative Fee for the Acquiring Fund.
(3) Represents one-time proxy, legal, accounting and other costs of the
Reorganization to be borne by the Acquiring Fund.
(4) Represents one-time proxy, legal, accounting and other costs of the
Reorganization to be borne by the Acquired Fund.
The Board of Trustees of AARP Growth Trust recommends that the
shareholders of AARP Global Growth Fund vote in favor of this Proposal 2.
PROPOSAL 3: RATIFICATION OR REJECTION OF THE SELECTION OF INDEPENDENT
ACCOUNTANTS
The Board of the Acquired Trust, including a majority of the
Independent Trustees, has selected PricewaterhouseCoopers LLP to act as
independent accountants of the Acquired Fund for the Acquired Fund's current
fiscal year. One or more representatives of PricewaterhouseCoopers LLP are
expected to be present at the Meeting 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 Global Growth Fund vote in favor of this Proposal 3.
ADDITIONAL INFORMATION
Information about the Funds
Additional information about the Acquiring Corporation and the Acquired
Trust, the Funds and the Reorganization has been filed with the SEC and may be
obtained without charge by writing to Scudder Investor Services, Inc., Two
International Place, Boston, MA 02110-4103, or by calling 1-800-225-a2470.
The Acquiring Corporation and Acquired Trust are subject to the
informational requirements of the Securities Exchange Act of 1934 and the 1940
Act, and in accordance therewith, file reports, proxy material and other
information about each of the Funds with the Securities and Exchange Commission.
Such reports, proxy material and other information filed by the Acquiring
Corporation, and those filed by the Acquired Trust, can be inspected and copied
at the Public Reference Room maintained by the Securities and Exchange
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following SEC Regional Offices: Northeast Regional Office, 7 World Trade Center,
Suite 1300, New York, NY 10048; Southeast Regional Office, 1401 Brickell Avenue,
Suite 200, Miami, FL 33131; Midwest Regional Office, Citicorp Center, 500 W.
Madison Street, Chicago, IL, 60661-2511; Central Regional Office, 1801
California Street, Suite 4800, Denver, CO 80202-2648; and Pacific Regional
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Office, 5670 Wilshire Boulevard, 11th Floor, Los Angeles, CA 90036-3648. Copies
of such material can also be obtained from the Public Reference Branch, Office
of Consumer Affairs and Information Services, Securities and Exchange Commission
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The SEC
maintains an Internet World Wide Web site (at http://www.sec.gov) which contains
the Statements of Additional Information for the Acquiring Corporation and the
Acquired Trust, materials that are incorporated by reference into the
prospectuses and Statements of Additional Information, and other information
about the Acquiring Corporation, the Acquired Trust and the Funds.
Interests of Certain Persons
The Investment Manager has a financial interest in the Reorganization,
arising from the fact that its fee under its investment management agreement
with the Acquiring Fund will increase as the amount of the Acquiring Fund's
assets increases. The amount of those assets will increase by virtue of the
Reorganization. See "Synopsis - Fees and Expenses."
General
Proxy Solicitation. Proxy solicitation costs will be considered
Reorganization expenses and will be allocated accordingly. In addition to
solicitation by mail, certain officers and representatives of the Acquired
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/Prospectus, the Notice of Special Meeting and the
proxy card(s) are first being mailed to shareholders on or about April 18, 2000
or as soon as practicable thereafter. Any Acquired Fund shareholder giving a
proxy has the power to revoke it by mail (addressed to the Secretary at the
principal executive office of the Acquired Fund, c/o Scudder Kemper Investments,
Inc., at the address for the Acquired Fund shown at the beginning of this Proxy
Statement/Prospectus) or in person at the Meeting, by executing a superseding
proxy or by submitting a notice of revocation to the Acquired Fund. All properly
executed proxies received in time for the Meeting will be voted as specified in
the proxy or, if no specification is made, in favor of each Proposal.
The presence at any shareholders' meeting, in person or by proxy, of
the holders of one-third of the shares of the Acquired Trust (for a trust-wide
vote) or the Acquired 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, 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 Acquired Trust's (for a trust-wide vote) or
the Acquired 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 the 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 Acquired Fund from brokers or nominees
when the broker or nominee has neither received instructions from the beneficial
owner or other persons entitled to vote nor has discretionary power to vote on a
particular matter. Accordingly, shareholders are urged to forward their voting
instructions promptly.
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Approval of Proposal 1 requires the affirmative vote of a plurality of
the shares of the Acquired Trust voting at the Meeting. Approval of Proposal 2
requires the affirmative vote of the holders of a majority of the Acquired
Fund's shares outstanding and entitled to vote thereon. Approval of Proposal 3
requires the affirmative vote of a majority of the shares of the Acquired Fund
voting at the Meeting. Abstentions and broker non-votes will not be counted in
favor of, but will have no other effect on, Proposal 1, and will have the effect
of a "no" vote on Proposals 2 and 3.
Holders of record of the shares of the Acquired Fund at the close of
business on April 17, 2000 (the "Record Date") will be entitled to one vote per
share on all business of the Meeting. As of [date], there were ____________
shares of the Acquired Fund outstanding.
As of [date], the officers and Directors of the Acquiring Corporation
as a group owned beneficially [less than 1%][___%] of the outstanding shares of
the Acquiring Fund. Appendix 2 hereto sets forth the beneficial owners of at
least 5% of each Fund's shares.] To the best of each of the Acquiring
Corporation's and the Acquired Trust's knowledge, as of _______________, no
person owned beneficially more than 5% of either Fund's outstanding shares[,
except as stated on Appendix 2.]
Shareholder Communications Corporation ("SCC") has been engaged to
assist in the solicitation of proxies, at an estimated cost of $85,835. As the
Meeting date approaches, certain shareholders of the Acquired Fund may receive a
telephone call from a representative of SCC if their votes have not yet been
received. Authorization to permit SCC to execute proxies may be obtained by
telephonic or electronically transmitted instructions from shareholders of the
Acquired Fund. Proxies that are obtained telephonically will be recorded in
accordance with the procedures set forth below. The Trustees believe that these
procedures are reasonably designed to ensure that 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 the 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
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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.
Shareholder Proposals for Subsequent Meetings. Shareholders wishing to
submit proposals for inclusion in a proxy statement for a shareholder meeting
subsequent to the Meeting, 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, 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 Meeting. No Trustee is aware of any
matters that will be presented for action at the 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 Acquired Trust and/or the Acquired
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,
[signature]
Kathryn L. Quirk
Secretary
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INDEX OF EXHIBITS
EXHIBIT A: AGREEMENT AND PLAN OF REORGANIZATION
EXHIBIT B: MANAGEMENT'S DISCUSSION OF THE ACQUIRING FUND'S
PERFORMANCE FOR ITS MOST RECENT FISCAL YEAR.
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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 Global/International Fund,
Inc. (the "Acquiring Corporation"), a Maryland Corporation with a principal
place of business at 345 Park Avenue, New York, NY 10154, on behalf of Scudder
Global Fund (the "Acquiring Fund"), a separate series of the Acquiring
Corporation, and AARP Growth Trust (the "Acquired Trust"), a Massachusetts
business trust with its principal place of business at Two International Place,
Boston, Massachusetss 02110-4103, on behalf of AARP Global Growth Fund (the
"Acquired Fund" and, together with the Acquiring Fund, each a "Fund" and
collectively the "Funds"), 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 the Acquired Fund to the Acquiring Fund in exchange solely for
voting shares of capital stock of the AARP Shares class ($.01 par value per
share) of the Acquiring Fund (the "Acquiring Fund Shares"), the assumption by
the Acquiring Fund of all of the liabilities of the Acquired Fund and the
distribution of the Acquiring Fund Shares to the shareholders of the Acquired
Fund in complete liquidation of the 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 THE ACQUIRED FUND TO THE ACQUIRING FUND IN
EXCHANGE FOR ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND
LIABILITIES AND THE LIQUIDATION OF THE ACQUIRED FUND
1.1. Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer to the Acquiring Fund all or substantially all of the
Acquired Fund's assets as set forth in section 1.2, and the Acquiring Fund
agrees in exchange therefor (i) to deliver to the Acquired Fund that number of
full and fractional Acquiring Fund Shares determined by dividing the value of
the 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 the Acquired Fund. Such
transactions shall take place at the closing provided for in section 3.1 (the
"Closing").
1.2. The assets of the Acquired Fund to be acquired by the 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 Acquired Fund immediately before
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the Closing (excluding for these purposes assets used to pay the dividends and
other distributions paid pursuant to section 1.4).
1.3. The 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, the 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, the 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
the Acquiring Fund. Shares of the 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 the 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 the 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 the 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 Corporation's
Charter, as amended, and then-current prospectus or statement of additional
information.
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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 the Acquiring Fund Shares 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 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 September 11, 2000, 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 9:00 a.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. The Acquired Fund shall deliver to Acquiring Fund on the Closing
Date a schedule of Assets.
3.3. Brown Brothers Harriman & Co. ("Brown Brothers"), custodian for
the 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
Brown Brothers, custodian for the 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. The 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 the
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 Acquiring Fund duly
endorsed in proper form for transfer in such condition as to constitute good
delivery thereof. The 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 the Acquiring
Fund. The cash to be transferred by the Acquired Fund shall be delivered by wire
transfer of federal funds on the Closing Date.
3.4. Scudder Service Corp. (the "Transfer Agent"), on behalf of the
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. The Acquiring Fund shall issue and deliver a
confirmation evidencing the Acquiring Fund Shares to be credited on the Closing
Date to the 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,
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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 the Acquiring
Fund or the 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 the Acquired Fund, represents and
warrants to the 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 the 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 the
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 the Acquired Fund or any properties or
assets held by it. The Acquired Fund knows of no 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 Statements of Assets and Liabilities, Operations, and Changes
in Net Assets, the Financial Highlights, and the Investment Portfolio of the
Acquired Fund at and for the fiscal year ended
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September 30, 1999, have been audited by PricewaterhouseCoopers LLP, independent
accountants, and are in accordance with GAAP consistently applied, and such
statements (a copy of each of which has 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 September 30, 1999, there has not been any material adverse
change in the 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 the 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 the 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), the 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 the 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. The Acquired Fund does not have 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, the Acquired Fund will have good and
marketable title to the Acquired Fund's assets to be transferred to the
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;
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(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
the Acquired Fund Shareholders, this Agreement constitutes a valid and binding
obligation of the Acquired Trust, on behalf of the 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 the 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
the 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 Fund to be included in the
Registration Statement referred to in section 5.7 (the "Proxy Statement"),
insofar as it relates to the Acquired Fund, will, on the effective date of the
Registration Statement and 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 and the
Registration Statement made in reliance upon and in conformity with information
that was furnished or should have been furnished by the Acquiring Fund for use
therein.
4.2. The Acquiring Corporation, on behalf of the Acquiring Fund,
represents and warrants to the Acquired Fund as follows:
(a) The Acquiring Corporation is a corporation duly organized and
validly existing under the laws of the State of Maryland with power under the
Acquiring Corporation's Charter, 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 Corporation 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 the 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 Corporation is not, and the execution, delivery and
performance of this Agreement by the Acquiring Corporation will not result, in
violation of Maryland law or of the Acquiring Corporation's Charter, as amended,
or By-Laws, or of any material agreement, indenture, instrument, contract, lease
or other undertaking known to counsel to which the Acquiring Fund is a party or
by which
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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 the Acquiring Fund or any properties or
assets held by it. The Acquiring Fund knows of no 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 Statements of Assets and Liabilities, Operations, and Changes
in Net Assets, the Financial Highlights, and the Investment Portfolio of the
Acquiring Fund at and for the fiscal year ended August 31, 1999 have been
audited by PricewaterhouseCoopers LLP, independent accountants, and are in
accordance with GAAP consistently applied, and such statements (a copy of each
of which has been furnished to the Acquired Fund) present 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) Since August 31, 1999, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquiring 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 Acquired Fund. For purposes of this subsection
(g), a decline in net asset value per share of the Acquiring Fund due to
declines in market values of securities in the Acquiring Fund's portfolio, the
discharge of Acquiring Fund liabilities, or the redemption of Acquiring Fund
shares by Acquiring 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 the Acquiring 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 Acquiring 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, the Acquiring 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
do so for the taxable year including the Closing Date;
(j) All issued and outstanding shares of the Acquiring 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 and (ii) are, and on the Closing Date will be,
duly and validly issued and outstanding, fully paid and non-assessable. The
Acquiring Fund does not have outstanding any options, warrants or other rights
to subscribe for or purchase any of the Acquiring Fund shares, nor is there
outstanding any security convertible into any of the Acquiring Fund shares;
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(k) The Acquiring Fund Shares to be issued and delivered to the
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.
(l) At the Closing Date, the 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 the Acquired Fund
has received notice at or prior to the Closing;
(m) 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 Fund and this Agreement will
constitute a valid and binding obligation of the 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;
(n) The information to be furnished by the 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;
(o) The current prospectus and statement of additional information of
the Acquiring 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;
(p) The Proxy Statement to be included in the Registration Statement,
only insofar as it relates to the Acquiring Fund, will, on the effective date of
the Registration Statement and 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 and the
Registration Statement made in reliance upon and in conformity with information
that was furnished or should have been furnished by the Acquired Fund for use
therein; and
(q) The 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 THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1. The Acquiring Fund and the Acquired Fund each 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.
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5.2. Upon reasonable notice, the Acquiring Fund's officers and agents
shall have reasonable access to the 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 Fund covenants to call a meeting of the Acquired Fund
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 July 11, 2000.
5.4. The Acquired Fund 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. The Acquired Fund covenants that it will assist the 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, the Acquiring Fund
and the Acquired Fund will each 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 1933 Act,
the 1934 Act and the 1940 Act the Registration Statement on Form N-14 (the
"Registration Statement") in connection with the meeting of the Acquired Fund
Shareholders to consider approval of this Agreement and the transactions
contemplated herein. The Acquiring Fund will file the Registration Statement,
including the Proxy Statement, with the Commission. The Acquired Fund will
provide the Acquiring Fund with information reasonably necessary for the
preparation of a prospectus, which will include the Proxy Statement referred to
in section 4.1(o), all to be included in the Registration Statement, in
compliance in all material respects with the 1933 Act, the 1934 Act and the 1940
Act.
5.8. The Acquired Fund covenants that it will, from time to time, as
and when reasonably requested by the 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. The 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. The Acquiring Fund covenants that it will, from time to time, as
and when reasonably requested by the 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
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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, the Acquired
Fund shall make a liquidating distribution to its shareholders consisting of the
Acquiring Fund Shares received at the Closing.
5.12. The Acquiring Fund and the Acquired 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 THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
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 the 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 Acquiring Fund, its adviser or any of their affiliates)
against the 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. The Acquiring Fund shall have delivered to the 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 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. The Acquired Fund shall have received on the Closing Date an
opinion of Ober, Kaler, Grimes & Shriver, in a form reasonably satisfactory
to the Acquired Fund, and dated as of the Closing Date, to the effect that:
(a) The Acquiring Corporation has been duly formed and is an existing
corporation; (b) the Acquiring Corporation has the power to carry on its
business as presently conducted in accordance with the description thereof in
the Acquiring Corporation's registration statement under the 1940 Act; (c) the
Agreement has been duly authorized, executed and delivered by the Acquiring
Corporation, on behalf of the Acquiring Fund, and constitutes a valid and
legally binding obligation of the Acquiring Corporation, on behalf of the
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 the Acquired Fund's assets for Acquiring Fund Shares pursuant to the
Agreement will not, violate the Acquiring Corporation's Charter, 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 the
Acquiring Fund under the Federal laws of the United States or the laws of the
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<PAGE>
State of Maryland 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. The 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.
6.5 The Acquiring Fund shall have entered into an administrative
services agreement with Scudder Kemper Investments, Inc. ("Scudder Kemper") in a
form reasonably satisfactory to the Acquired Fund.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the 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 the 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 Acquired Fund, its adviser or any of their affiliates)
against the 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. The Acquired Fund shall have delivered to the 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. The Acquired Fund shall have delivered to the 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 Acquiring 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. The 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) the Acquired Trust has the 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 the
Acquired Fund, and constitutes a valid and legally binding obligation of the
Acquired Trust, on behalf of the 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
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<PAGE>
the 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 the
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. The 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.
7.6 The Acquiring Fund shall have entered into an administrative
services agreement with Scudder Kemper.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE ACQUIRED FUND
If any of the conditions set forth below have not been met on or before
the Closing Date with respect to the Acquired Fund or the 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 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 the Acquiring Fund. Notwithstanding anything herein
to the contrary, neither the Acquiring Fund nor the 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
the Acquiring Fund or the 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 the
Acquiring Fund or the Acquired Fund, provided that either party hereto may for
itself waive any of such conditions;
8.4. The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act; and
8.5. The parties shall have received an opinion of Willkie Farr &
Gallagher addressed to each of the Acquiring Corporation 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 the Acquiring Fund of all or substantially all of the assets of the
Acquired Fund in exchange solely for Acquiring Fund shares
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<PAGE>
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 the
Acquired Fund upon the transfer of all or substantially all of its assets to the
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 the Acquired Fund in the hands of the 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 the Acquired Fund in
the hands of the 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 the
Acquiring Fund upon the receipt of the assets of the 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 the 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 the 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 the 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 Fund and Acquired Trust. Notwithstanding anything herein to the
contrary, neither the Acquiring Fund nor the Acquired Fund may waive the
condition set forth in this section 8.5.
9. INDEMNIFICATION
9.1. The Acquiring Fund agrees to indemnify and hold harmless the
Acquired Fund and each of the Acquired Fund'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 its 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. The Acquired Fund agrees to indemnify and hold harmless the
Acquiring Fund and each of the Acquiring Fund'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 its 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 Fund on behalf of the Acquiring Fund, and
the Acquired Trust, on behalf of the Acquired Fund, 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.
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<PAGE>
10.2. Each Fund will pay its own allocable share of expenses associated
with the Reorganization, except that Scudder Kemper will bear any such expenses
in excess of $92,472 for the Acquiring Fund and $142,764 for the Acquired Fund
(approximately $0.0017 and $0.0184 per share, respectively, based on December
31, 1999 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. 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. The Acquiring Fund and the Acquired Fund agree 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 of
the Acquiring Fund and Acquired Fund in Sections 9.1 and 9.2 shall survive the
Closing.
12. TERMINATION
12.1. 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 September 11, 2000, 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 Fund and any authorized officer of the Acquiring Fund; provided,
however, that following the meeting of the Acquired Fund Shareholders called by
the Acquired Fund 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, Two International Place, Boston, MA 02110-4103, 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, 345 Park Avenue,
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<PAGE>
New York, NY 10154, 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 the Acquired Fund or the 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 the
Acquiring Fund and the Acquired Fund and their respective successors and
assigns, any rights or remedies under or by reason of this Agreement.
15.4. References in this Agreement to the Acquired Trust mean and refer
to the Board members of the Acquired Trust from time to time serving under its
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
the Acquired Trust conducts its business. It is expressly agreed that the
obligations of the Acquired Trust hereunder shall not be binding upon any of the
Board members, shareholders, nominees, officers, agents, or employees of the
Acquired Trust or the Acquired Fund personally, but bind only the property of
the Acquired Fund, as provided in the Acquired Trust's Declaration of Trust.
Moreover, no series of the Acquired Trust other than the Acquired Fund shall be
responsible for the obligations of the Acquired Trust hereunder, and all persons
shall look only to the assets of the Acquired Fund to satisfy the obligations of
the Acquired Trust hereunder. The execution and the delivery of this Agreement
have been authorized by the Acquired Trust's Board members, on behalf of the
Acquired Fund, and this Agreement has been signed by authorized officers of the
Acquired Fund 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 the Acquired Fund, as
provided in the Acquired Trust's Declaration of Trust.
Notwithstanding anything to the contrary contained in this Agreement,
the obligations, agreements, representations and warranties with respect to the
Acquired Fund shall constitute the obligations, agreements, representations and
warranties of the Acquired Fund only, and in no event shall any other series of
the Acquired Trust or the assets of any such series be held liable with respect
to the breach or other default by the Acquired 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 an authorized officer and its seal to be affixed
thereto and attested by its Secretary or Assistant Secretary.
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Attest: AARP GROWTH TRUST
on behalf of AARP Global Growth Fund
________________________________
Secretary
________________________________
By:_____________________________
Its:____________________________
Attest: GLOBAL/INTERNATIONAL FUND, INC.
on behalf of Scudder Global Fund
________________________________
Secretary
________________________________
By:_____________________________
Its:____________________________
AGREED TO AND ACKNOWLEDGED
ONLY WITH RESPECT TO
PARAGRAPH 10.2 HERETO
SCUDDER KEMPER INVESTMENTS, INC.
________________________________
By:_____________________________
Its:____________________________
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<PAGE>
EXHIBIT B
Scudder Global Fund
Annual Report
June 30, 1999
Portfolio Management Discussion
In the following interview, Lead Portfolio Manager William Holzer discusses
Scudder Global Fund's strategy and the market environment in the twelve-month
period ended June 30, 1999.
Q: How would you characterize the global stock markets so far in 1999?
A: The overall rise in stock prices over the first half of the year masked
considerable volatility in the global financial markets. We feel that the
catalyst for rapid market movements has been the high level of uncertainty
regarding the direction of the global economy. While much of the volatility
can be attributed to investors' reaction to stronger-than-expected growth and
its potential effect on interest rates, it still remains to be seen whether
the strength of early 1999 signals the beginnings of a new upleg of the
expansion, or if it merely marks a short-term bump on the road to a more
deflationary environment. This uncertainty is evident in all three of the
geographical areas where we focus our efforts -- the U.S., Europe, and Japan.
In the U.S., large-cap growth names ceded their leadership position to value
stocks in April, but the market's lack of conviction led to an oscillation
between growth and value during the final two months of the period.
Meanwhile, internet stocks gave up significant ground, and bond markets were
very nervous away from the large benchmark Treasury issues. European stocks
rose grudgingly amid an investment environment that took a decided turn for
the worse. While there are signs that growth is picking up in the region,
investors were put off by crisis in Kosovo and the lack of meaningful
structural reform on the continent. In addition, there have been signs of
teething problems for the euro as the "one size fits all" monetary policy is
tailored more for the core economies than those on the periphery. In Japan,
investors have been more optimistic due to the combination of looser monetary
policy, meaningful corporate restructuring, and renewed growth. Despite the
resurgence in Japanese equities, however, we feel that there are still
reasons for skepticism. A significant portion of the recent bounce in the
country's GDP was due to an increase in government spending, while personal
consumption, which will be necessary for a truly meaningful rebound, remains
slow. In addition, the increase in new investment in new capacity is alarming
at a time when so much excess capacity still overhangs the market. We feel
that if growth does indeed resume in Japan, it is likely to be accompanied by
inflation.
Given the many stumbling blocks that could potentially disrupt the long
stretch of positive performance that stocks have produced since last year's
financial crisis, we have developed a strategy that is designed to prepare
the portfolio for a variety of scenarios. Specifically, we use a theme-based
approach to identify companies that are positioned to capitalize on powerful
long-term trends in the global economy.
Q: How did the Fund perform in this environment?
A: The Fund provided a total return of 7.18% for the twelve-month period June
30, 1999, trailing the 15.67% return of its unmanaged benchmark, the MSCI
World Index. The Fund's underperformance can be attributed to its lack of
exposure to the large-cap growth stocks that led the markets in both
<PAGE>
the U.S. and Europe throughout the period. The reason for its underexposure
lies in our investment discipline, which focuses on both growth and value
stocks. The extreme prices at which these large-caps traded were a function
of momentum-based growth investors on one hand, and the effects of passive
indexing on the other. Momentum is not a part of our discipline, and we found
the valuations of many of these stocks to be excessive and risky. Our
relative performance has been particularly strong so far in the 1999 calendar
year, as the Fund's increased exposure to technology proved beneficial in the
first quarter, and its position in cyclicals helped in the second. We remain
convinced in the value of our investment discipline, which we believe will
yield significant benefits in due course.
Q: Have the events of the past six months affected your overall thinking?
A: No -- our "top-down" approach has allowed us to uncover several important
trends that we believe stand out above the noise. Most important, we are
focused on the role of technology in society. The Internet enables both
businesses and consumers to leap geographic boundaries and physical barriers,
and creates new markets for consumer-to-business and business-to-business
commerce. Over time, this has been, and will continue to be, a powerful
driver of falling prices as competition increases and corporations become
more efficient. The legacy of excess industrial capacity in Asia and Europe
after the long period of globalization in the 1990s has also contributed to
weak prices. Technology is both a source of secular growth and a driver of
fundamental, and deflationary, corporate change. Our investment themes seek
to achieve balanced exposure to these processes of change by focussing on the
companies that can enable and adapt to the Internet world, and those
companies in traditional industries that can adapt successfully to the
shifting global business environment.
Q: With that as a backdrop, what are the most important new investment themes
in the portfolio?
A: The themes we have developed recently are consistent with our goal of
constructing a portfolio that we believe should deliver outperformance in any
environment. Specifically, we have begun to add what we call "virtual
companies," those that retain control over the highest level of intellectual
content and value-added activities, and outsource all other functions to
companies with the strongest competencies in those functions. The investment
potential of virtual companies lies in their ability to create brand names,
new franchises, and monopoly power, as well as their potential to achieve
immediate "first mover" advantages. The extreme case of the virtual company
is the internet firm with no hard assets, where all production is contracted
in order to increase flexibility. We believe that over time, the virtual
company will develop into the superior institution for wealth creation in the
global marketplace. Examples of Fund holdings that fit within this theme are
Prudential Corp. (U.K.) and Sabre Group. Although the investable universe
under this theme is still limited, we expect it, and our exposure to it, to
increase in the coming months.
<PAGE>
We also introduced a theme called "The Ultimate Subcontractor," which focuses
on the companies whose low costs and superior efficiencies have made them the
leading beneficiaries of the trend toward outsourcing. Several natural
resources companies, such as Rio Tinto and Woodside Petroleum, have carved
out a role as the leading suppliers to companies that are turning "virtual."
Q: In the last report, you discussed themes called "The Empowered Consumer"
and "Secure Streams of Income." Are these two concepts still playing an
important role in the portfolio?
A: Yes. At the end of the period, we had substantial holdings in stocks that
fit within both categories. The Empowered Consumer involves companies that
provide consumer enabling technologies related to the Internet. We believe
that the companies that build the electronic infrastructure that connects
businesses and their customers are poised for significant growth in the years
ahead. Holdings that have performed well within this category are Motorola,
Sun Microsystems, Sony, and TDK. Secure Streams of Income, meanwhile,
includes companies that have the ability to produce stable returns even in
adverse economic conditions. We expect that companies such as Railtrack, an
owner and operator of British Railways, and Peco Energy, a utility, will
provide defensive qualities in the event of a slowdown.
<PAGE>
Q: What is your outlook for equities from here?
A: Our current thinking is that the set of circumstances that has led the
market to attribute very high values to a small group of large capitalization
growth stocks is unlikely to be repeated. If it is not, we should find that
the thematic strategy, diversification, and value orientation of the
portfolio will add significant value. While the outcome for the global
economy is not clear at this juncture, we are confident that our current
strategy has positioned the Fund for long-term outperformance whether
stronger global growth increases inflationary pressures, or a weaker
environment brings about deflation.
<PAGE>
Performance Update as of June 30, 1999
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Fund Index Comparisons
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<TABLE>
<CAPTION>
Total Return
-------------------------------------------------
Period Ended Growth of Average
6/30/1999 $10,000 Cumulative Annual
<S> <C> <C> <C>
-------------------------------------------------
Scudder Global Fund
-------------------------------------------------
1 Year $ 10,718 7.18% 7.18%
5 Year $ 19,584 95.84% 14.39%
10 Year $ 32,586 225.86% 12.54%
-------------------------------------------------
MSCI World Index
-------------------------------------------------
1 Year $ 11,567 15.67% 15.67%
5 Year $ 21,690 116.90% 16.74%
10 Year $ 29,639 196.39% 11.47%
-------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
Growth of a $10,000 Investment
- --------------------------------------------------------------------------------
THE PRINTED DOCUMENT CONTAINS A LINE CHART HERE
CHART DATA:
<TABLE>
<CAPTION>
MSCI World Index Scudder Global Fund
---------------- -------------------
<S> <C> <C>
'89 10000 10000
'90 10711 12000
'91 10186 11377
'92 10616 12979
'93 12396 14725
'94 13665 16639
'95 15121 18155
'96 17909 21178
'97 21897 26454
'98 25625 30403
'99 29639 32586
</TABLE>
Yearly periods ended June 30
The Morgan Stanley Capital International (MSCI) World Index is an unmanaged
capitalization-weighted measure of global stock markets including the U.S.,
Canada, Europe, Australia, and the Far East. Index returns assume dividends
reinvested net of withholding tax and, unlike Fund returns, do not reflect
any fees or expenses.
<PAGE>
APPENDIX 1
FUND SHARES OWNED BY NOMINEES AND TRUSTEES
Many of the Nominees and Trustees own shares of the series of the
Acquired 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 Acquired Trust
as of January 31, 2000. The information as to beneficial ownership is based
on statements furnished to the Acquired 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 Acquired 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 Acquired Trust.]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
AARP AARP AARP
BALANCED CAPITAL GLOBAL AARP AARP AARP SMALL AARP U.S.
STOCK AND GROWTH GROWTH GROWTH AND INTERNATIONAL COMPANY STOCK
BOND FUND FUND FUND INCOME FUND STOCK FUND STOCK FUND INDEX FUND
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
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 Acquired 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 Acquired 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 Acquired 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 Acquired 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 Acquired Trust listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
<PAGE>
(6) As of January 31, 2000, Mr. Deets's total aggregate holdings in each
series of the Acquired 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 Acquired 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 Acquired 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 Acquired 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 Acquired 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 Acquired 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 Acquired 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 Acquired 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 Acquired 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 Acquired 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 Acquired 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 Acquired 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 Acquired Trust listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
<PAGE>
APPENDIX 2
Beneficial Ownership of Fund Shares
-54-
<PAGE>
This proxy statement/prospectus is accompanied by the Acquiring Fund's
prospectus dated January 1, 2000, which was previously filed with the
Commission via EDGAR on December 28, 1999 (File No. 33-05724) and is
incorporated by reference herein.
-55-
<PAGE>
PART B
GLOBAL/INTERNATIONAL FUND, INC.
- ------------------------------------------------------------------------------
Statement of Additional Information
[date]
- ------------------------------------------------------------------------------
Acquisition of the Assets of By and in Exchange for Shares of
AARP Global Growth Fund (the Scudder Global Fund (the "Acquiring
"Acquired Fund"), a series of Fund"), a series of Global/International
AARP Growth Trust (the Fund, Inc. (the "Acquiring Corporation")
"Acquired Trust") 345 Park Avenue
Two International Place New York, NY 10154
Boston, MA 02110-4103
This Statement of Additional Information is available to the shareholders of the
Acquired Fund in connection with a proposed transaction whereby the Acquiring
Fund will acquire all or substantially all of the assets and all of the
liabilities of the Acquired Fund in exchange for shares of the Acquiring Fund
(the "Reorganization").
This Statement of Additional Information of the Acquiring Corporation contains
material which may be of interest to investors but which is not included in the
Prospectus/Proxy Statement of the Acquiring Corporation relating to the
Reorganization. This Statement of Additional Information consists of this cover
page and the following documents:
1. The Acquiring Fund's statement of additional information dated January 1,
2000, which was previously filed with the Securities and Exchange Commission
(the "Commission") via EDGAR on December 28, 1999 (File No. 33-05724) and is
incorporated by reference herein.
2. The Acquiring Fund's annual report to shareholders for the fiscal year ended
August 31, 1999, which was previously filed with the Commission via EDGAR on
October 21, 1999 (File No. 811-04670) and is incorporated by reference herein.
3. The Acquired Fund's prospectus dated February 1, 2000, which was previously
filed with the Commission via EDGAR on February 1, 2000 (File No. 2-91578) and
is incorporated by reference herein.
4. The Acquired Fund's statement of additional information dated February 1,
2000, which was previously filed with the Commission via EDGAR on February 1,
2000 (File No. 2-91578) and is incorporated by reference herein.
5. The Acquired Fund's annual report to shareholders for the fiscal year ended
September 30, 1999, which was previously filed with the Commission via EDGAR on
December 3, 1999 (File No. 811-04048) and is incorporated by reference herein.
6. The financial statements and schedules of the Acquiring Fund and the Acquired
Fund required by Regulation S-X for the periods specified in Article 3 thereof,
which are filed herein.
This Statement of Additional Information is not a prospectus. A Prospectus/Proxy
Statement dated ____________________ relating to the Reorganization may be
obtained by writing the Acquired Fund at
-55-
<PAGE>
Two International Place, Boston, MA 02110-4103 or by calling Scudder Investor
Services, Inc. at 1-800-225-2470. This Statement of Additional Information
should be read in conjunction with the Prospectus/Proxy Statement.
-56-
<PAGE>
PRO FORMA
PORTFOLIO OF INVESTMENTS
AS OF SEPTEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
Scudder AARP Global Pro Forma Pro Forma
Global Fund Growth Combined Scudder AARP Global Combined
Par/Share Par/Share Par/Share Global Fund Growth Market Market
Amount Amount Amount Market Value($) Value($) Value($)(1)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
REPURCHASE AGREEMENTS 0.2%
- ---------------------------------
Repurchase Agreement with Donaldson, 3,373,000 3,373,000 3,373,000 3,373,000
Lufkin & Jenrette, 5.30%, 10/1/1999
TOTAL REPURCHASE AGREEMENTS (COST OF
$0, $3,373,000 AND ================================================
$3,373,000 RESPECTIVELY) 0 3,373,000 3,373,000
================================================
BONDS 3.9%
- ---------------------------------
GERMANY
Federal Republic of Germany, 59,000,000 59,000,000 63,270,744 63,270,744
4.000%, 3/17/00
TOTAL BONDS (COST OF $62,286,340, $0 ================================================
AND $62,286,340 RESPECTIVELY) 63,270,744 0 63,270,744
================================================
PARTICIPATION LOAN NOTES 0.4%
- ---------------------------------
LUXEMBOURG
Eurotunnel Finance Ltd., 04/30/2040 4,617 (a) 300 (a) 4,917 (a) 6,946,465 451,362 7,397,827
TOTAL PARTICIPATION LOAN NOTES (COST OF ================================================
$6,183,494, $404,411 AND $6,587,905 RESPECTIVELY) 6,946,465 451,362 7,397,827
================================================
COMMON STOCKS 95.5%
- ---------------------------------
AUSTRALIA 3.1%
Broken Hill Proprietary Co., Ltd. 718,800 68,900 787,700 8,278,782 793,556 9,072,338
(Petroleum, mineral exploration
and steel production)
Foster's Brewing Group, Ltd. 2,832,000 356,858 3,188,858 7,983,451 1,005,988 8,989,439
(Leading brewery)
WMC Ltd. 2,021,351 195,800 2,217,151 10,288,452 996,600 11,285,052
(Mineral exploration and production)
Woodside Petroleum Ltd. 2,763,700 259,800 3,023,500 19,183,319 1,803,317 20,986,636
------------------------------------------------
(Major oil and gas producer)
45,734,004 4,599,461 50,333,465
------------------------------------------------
AUSTRIA 0.0%
Flughafen Wien AG 14,100 14,100 563,751 563,751
------------------------------------------------
(Operator of terminals and facilities
at Vienna International Airport)
BRAZIL 1.7%
Aracruz Celulose S.A. (ADR) 605,400 38,650 644,050 12,637,725 806,819 13,444,544
(Producer of eucalyptus kraft pulp)
Companhia Vale do Rio Doce 621,200 55,200 676,400 13,011,622 1,156,216 14,167,838
------------------------------------------------
(Diverse mining and industrial
complex)
25,649,347 1,963,035 27,612,382
------------------------------------------------
CANADA 4.0%
BCE, Inc. 235,000 21,600 256,600 11,690,746 1,074,554 12,765,300
(Telecommunication services)
Barrick Gold Corp. 857,800 84,600 942,400 18,657,150 1,840,050 20,497,200
(Gold exploration and production in
North and South America)
Canadian National Railway Co. 338,600 48,000 386,600 10,291,373 1,458,907 11,750,280
(Railroad operator)
Canadian Pacific Ltd. (Ord.) 296,656 46,050 342,706 6,792,723 1,054,436 7,847,159
(Transportation and natural resource
conglomerate)
Molson Cos., Ltd. "A" 484,000 44,900 528,900 8,361,319 775,668 9,136,987
<PAGE>
Scudder AARP Global Pro Forma Pro Forma
Global Fund Growth Combined Scudder AARP Global Combined
Par/Share Par/Share Par/Share Global Fund Growth Market Market
Amount Amount Amount Market Value($) Value($) Value($)(1)
-----------------------------------------------------------------------------------------
(Brewery)
Noranda, Inc. 269,000 26,100 295,100 3,675,515 356,621 4,032,136
------------------------------------------------
(Operator in mining and metals)
59,468,826 6,560,236 66,029,062
------------------------------------------------
CHINA 0.5%
American Standard China "B" 526 526 3,419,000 3,419,000
(Plumbing products)
Huaneng Power International, Inc. "N" 319,300 319,300 3,971,294 3,971,294
------------------------------------------------
(ADR)
(Developer and operator of large
coal-fired power plants)
7,390,294 7,390,294
------------------------------------------------
FRANCE 2.1%
Canal Plus 222,980 21,280 244,260 13,347,921 1,273,853 14,621,774
(Provider of television programs)
Compagnie de Saint-Gobain 97,773 9,568 107,341 18,257,523 1,786,669 20,044,192
------------------------------------------------
(Glass manufacturer)
31,605,444 3,060,522 34,665,966
------------------------------------------------
GERMANY 10.1%
BASF AG 424,799 37,640 462,439 18,131,275 1,606,551 19,737,826
(International chemical producer)
Bayer AG 551,474 51,505 602,979 22,037,470 2,058,193 24,095,663
(Chemical producer)
Heidelberger Druckmaschinen AG 75,651 6,915 82,566 4,706,175 430,175 5,136,350
(Manufacturer of commercial printing
presses)
Hoechst AG 448,432 47,033 495,465 19,570,628 2,052,631 21,623,259
(Chemical producer)
HypoVereinsbank AG 200,654 21,256 221,910 11,733,113 1,242,931 12,976,044
(Bank)
Muenchener 41,231 3,924 45,155 8,345,956 794,294 9,140,250
Rueckversicherungs-Gesellschaft AG
(Registered)
(Insurance company)
RWE AG (pfd.) 351,832 37,337 389,169 14,622,703 1,551,786 16,174,489
(Producer of petroleum and chemical
products)
Schering AG 143,705 13,845 157,550 15,717,397 1,514,264 17,231,661
(Pharmaceutical and chemical producer)
Siemens AG 45,185 4,300 49,485 3,739,047 355,824 4,094,871
(Electrical engineering and
electronics company)
VEBA AG 277,482 27,031 304,513 15,233,688 1,483,995 16,717,683
(Electric utility, distributor of oil
and chemicals)
VIAG AG 896,376 49,192 945,568 17,025,312 934,328 17,959,640
------------------------------------------------
(Provider of electrical power and
natural gas services, aluminum
products, chemicals, ceramics and
glass)
150,862,764 14,024,972 164,887,736
------------------------------------------------
HONG KONG 1.1%
Citic Pacific Ltd. 247,000 247,000 683,638 683,638
(Diversified holding company)
Hutchison Whampoa, Ltd. 1,725,000 164,000 1,889,000 15,988,671 1,520,082 17,508,753
------------------------------------------------
(Diversified investment holding
company)
15,988,671 2,203,720 18,192,391
------------------------------------------------
HUNGARY 0.3%
The First Hungary Fund Limited "A" 3,619 3,619 4,433,275 4,433,275
------------------------------------------------
(Investment company)
JAPAN 19.4%
Asahi Chemical Industry Co., Ltd. 1,409,000 134,000 1,543,000 7,854,268 746,964 8,601,232
(Producer of synthetic fibers,
industrial chemicals, petrochemicals,
plastics, rubber, and food products)
Bank of Tokyo-Mitsubishi, Ltd. 647,000 63,000 710,000 9,944,021 968,274 10,912,295
(Provider of financial services)
<PAGE>
Scudder AARP Global Pro Forma Pro Forma
Global Fund Growth Combined Scudder AARP Global Combined
Par/Share Par/Share Par/Share Global Fund Growth Market Market
Amount Amount Amount Market Value($) Value($) Value($)(1)
-----------------------------------------------------------------------------------------
Chugai Pharmaceutical Co., Ltd. 342,000 33,000 375,000 4,131,134 398,618 4,529,752
(Pharmaceutical company)
Daiwa Securities Co., Ltd. 1,844,000 180,000 2,024,000 16,814,063 1,641,286 18,455,349
(Provider of brokerage and other
financial services)
East Japan Railway Co. 2,331 273 2,604 14,856,345 1,739,932 16,596,277
(Railroad operator)
Fuji Bank, Ltd. 1,074,000 103,000 1,177,000 13,064,072 1,252,886 14,316,958
(Commercial bank)
Fujitsu Ltd. 239,000 23,000 262,000 7,458,921 717,804 8,176,725
(Manufacturer of computers)
Mitsubishi Estate Co., Ltd. 1,489,000 159,000 1,648,000 15,130,748 1,615,708 16,746,456
(Real estate company)
Mitsui Fudosan Co., Ltd. 984,000 96,000 1,080,000 7,899,380 770,671 8,670,051
(Real estate company)
NEC Corp. 449,000 43,000 492,000 9,053,441 867,033 9,920,474
(Manufacturer of telecommunication
and computer equipment)
Nissan Motor Co., Ltd. 1,403,000 153,000 1,556,000 8,506,627 927,665 9,434,292
(Manufacturer of motor vehicles)
Sakura Bank, Ltd. 2,469,000 236,000 2,705,000 18,567,400 1,774,770 20,342,170
(Bank)
Sanwa Bank, Ltd. 775,000 76,000 851,000 10,381,416 1,018,049 11,399,465
(Bank)
Sharp Corp. 1,556,000 152,000 1,708,000 24,953,337 2,437,601 27,390,938
(Manufacturer of consumer and
industrial electronics)
Shohkoh Fund & Co., Ltd. 15,600 2,300 17,900 11,658,206 1,718,838 13,377,044
(Finance company for small and
medium-sized firms)
Sony Corp. 209,800 20,500 230,300 31,377,308 3,065,943 34,443,251
(Manufacturer of consumer electronic
products)
Sumitomo Metal Mining Co., Ltd. 1,427,000 102,000 1,529,000 7,069,271 505,302 7,574,573
(Leading gold, nickel and copper
mining company)
TDK Corp. 100,000 9,000 109,000 11,590,525 1,043,147 12,633,672
(Manufacturer of magnetic tapes and
floppy discs)
Teijin Ltd. 1,603,000 152,000 1,755,000 7,730,203 732,995 8,463,198
(Manufacturer of polyester products)
Toray Industries, Inc. 1,633,000 155,000 1,788,000 8,442,846 801,372 9,244,218
(Manufacturer of synthetic fibers,
leather and polyester)
Toshiba Corp. 2,401,000 234,000 2,635,000 17,898,035 1,744,332 19,642,367
(Manufacturer of electric machinery)
Yamanouchi Pharmaceutical Co., Ltd. 497,000 49,000 546,000 23,312,935 2,298,458 25,611,393
------------------------------------------------
(Pharmaceutical company)
287,694,502 28,787,648 316,482,150
------------------------------------------------
NETHERLANDS 0.3%
STMicroelectronics 54,634 5,219 59,853 4,267,357 407,646 4,675,003
------------------------------------------------
(Manufacturer of semiconductor
integrated circuits)
SOUTH AFRICA 1.9%
Anglo American Platinum Corp., Ltd. 462,586 48,765 511,351 12,374,176 1,304,464 13,678,640
(ADR)
(Leading platinum producer)
Anglo American Platinum Corp. 60,000 60,000 1,591,337 1,591,337
(Platinum mining company)
Impala Platinum Holdings Ltd. (ADR) 468,500 468,500 15,952,425 15,952,425
------------------------------------------------
(Mines and markets platinum group
metals)
29,917,938 1,304,464 31,222,402
------------------------------------------------
<PAGE>
Scudder AARP Global Pro Forma Pro Forma
Global Fund Growth Combined Scudder AARP Global Combined
Par/Share Par/Share Par/Share Global Fund Growth Market Market
Amount Amount Amount Market Value($) Value($) Value($)(1)
---------------------------------------------------------------------------------------
SWITZERLAND 4.2%
Clariant AG (Registered) 29,883 2,889 32,772 13,569,576 1,311,866 14,881,442
(Manufacturer of dye chemicals)
Nestle SA (Registered) 6,863 666 7,529 12,923,980 1,254,170 14,178,150
(Food manufacturer)
Roche Holdings AG (PC) 1,462 143 1,605 16,953,342 1,658,227 18,611,569
(Producer of drugs and medicines)
Swisscom AG (Registered) 25,991 3,598 29,589 8,122,730 1,124,450 9,247,180
(Operator of telecommunication
networks and network application
services)
UBS AG-Registered 36,616 3,557 40,173 10,342,950 1,004,749 11,347,699
------------------------------------------------
(Provider of banking and asset
management services)
61,912,578 6,353,462 68,266,040
------------------------------------------------
UNITED KINGDOM 13.8%
BOC Group plc 806,556 107,723 914,279 16,835,891 2,248,589 19,084,480
(Producer of industrial gases)
Carlton Communications PLC 1,677,899 178,742 1,856,641 12,705,915 1,353,526 14,059,441
(Television post production products
and services)
Enterprise Oil PLC 1,166,447 113,267 1,279,714 7,949,644 771,944 8,721,588
(Oil and gas exploration and
production)
Gallaher Group PLC 1,494,152 1,494,152 10,330,620 10,330,620
(Manufacturer of tobacco products)
General Electric Co., plc 1,534,658 147,024 1,681,682 14,728,634 1,411,039 16,139,673
(Manufacturer of power, communications
and defense equipment)
Great Universal Stores PLC "A" 1,083,880 40,327 1,124,207 8,216,619 305,709 8,522,328
(Catalog home shopping, retailing,
finance and property investment)
J Sainsbury plc 2,601,086 254,983 2,856,069 16,228,420 1,590,863 17,819,283
(Retail distributor of food through
supermarkets)
LASMO plc 1,136,744 110,354 1,247,098 2,685,325 260,689 2,946,014
(Oil production and exploration)
National Grid Group PLC 2,048,142 198,114 2,246,256 14,295,792 1,382,813 15,678,605
(Owner and operator of electric
transmission systems)
Prudential Corp. PLC 1,014,634 92,732 1,107,366 15,617,206 1,427,327 17,044,533
(Provider of broad range of financial
services)
Railtrack Group PLC 800,938 76,840 877,778 16,903,212 1,621,652 18,524,864
(Operator of railway infrastructure)
Reuters Group plc 1,445,469 137,517 1,582,986 16,323,572 1,552,969 17,876,541
(International news and information
agency)
Rio Tinto PLC 1,351,548 131,709 1,483,257 23,472,873 2,287,443 25,760,316
(Mining company)
Shell Transport & Trading plc 2,015,280 192,000 2,207,280 14,995,334 1,428,637 16,423,971
(Petroleum company)
SmithKline Beecham PLC 1,323,035 128,267 1,451,302 15,175,067 1,471,209 16,646,276
(Manufacturer of ethical drugs and
healthcare products)
Standard Chartered PLC 28,028 2,670 30,698 403,722 38,459 442,181
------------------------------------------------
(Iinternational banking group
operating globally)
206,867,846 19,152,868 226,020,714
------------------------------------------------
UNITED STATES 33.1%
AT&T Corp - Liberty Media Group 523,476 52,576 576,052 19,434,047 1,951,881 21,385,928
(Holding company of entertainment
<PAGE>
Scudder AARP Global Pro Forma Pro Forma
Global Fund Growth Combined Scudder AARP Global Combined
Par/Share Par/Share Par/Share Global Fund Growth Market Market
Amount Amount Amount Market Value($) Value($) Value($)(1)
---------------------------------------------------------------------------------------
networks)
AT&T Corp. 290,301 28,043 318,344 12,628,094 1,219,871 13,847,965
(Telecommunication services)
Amerada Hess Corp. 194,800 18,700 213,500 11,931,500 1,145,375 13,076,875
(Exploration, production and
transmission of crude oil and natural
gas)
America Online Inc. 65,800 6,400 72,200 6,843,200 665,600 7,508,800
(Provider of online computer services)
Azurix Corp. 411,400 40,200 451,600 7,070,938 690,938 7,761,876
(Provider of wastewater related
services)
Biogen, Inc. 111,940 10,900 122,840 8,822,271 859,056 9,681,327
(Biotechnology research and
development company)
CSX Corp. 307,100 29,600 336,700 13,013,363 1,254,300 14,267,663
(Railroad, integrated transportation
systems and shipping container
company)
Conoco, Inc. "A" 442,800 43,100 485,900 12,287,700 1,196,025 13,483,725
(Explorer of crude oil, natural gas,
and natural gas liquids)
Electronic Data Systems Corp. 403,100 38,500 441,600 21,339,106 2,038,094 23,377,200
(Provider of information technology
systems)
Enron Corp. 602,600 58,820 661,420 24,857,250 2,426,325 27,283,575
(Producer of natural gas and
electricty)
Equity Residential Properties Trust 363,300 34,000 397,300 15,394,838 1,440,750 16,835,588
(REIT)
(Owner of apartment properties)
Freeport McMoRan Copper & Gold, Inc. 69,100 6,700 75,800 1,075,369 104,269 1,179,638
"B"
(U.S. company mining copper, gold and
silver in Indonesia)
Homestake Mining Co. 1,377,800 133,600 1,511,400 12,658,538 1,227,450 13,885,988
(Major international gold producer)
Immunex Corp. 430,400 41,600 472,000 18,668,600 1,804,400 20,473,000
(Pharmaceutical company)
International Business Machines Corp. 175,180 18,000 193,180 21,262,473 2,184,750 23,447,223
(Manufacturer of computers and
servicer of information processing
units)
Lockheed Martin Corp. 490,900 47,700 538,600 16,046,294 1,559,194 17,605,488
(Manufacturer of aircraft, missiles
and space equipment)
Manulife Financial Corp. 1,438,400 136,800 1,575,200 17,105,138 1,626,796 18,731,934
(Provider of financial services)
Motorola, Inc. 174,100 16,600 190,700 15,320,800 1,460,800 16,781,600
(Manufacturer of telecommunication
products and semiconductors)
Newmont Mining Corp. 804,800 76,800 881,600 20,824,200 1,987,200 22,811,400
(International gold exploration and
mining company)
Northrop Grumman Corp. 255,900 24,900 280,800 16,265,644 1,582,706 17,848,350
(Manufacturer of aircraft, aircraft
assemblies and electronic systems for
military and commercial use)
Oracle Corp. 399,000 41,050 440,050 18,154,500 1,867,775 20,022,275
(Database management software)
PacifiCorp 854,400 82,000 936,400 17,194,800 1,650,250 18,845,050
(Electric utility)
Parametric Technology Corp. 529,400 40,400 569,800 7,146,900 545,400 7,692,300
(Mechanical design software producer)
Peco Energy Co. 416,900 48,300 465,200 15,633,750 1,811,250 17,445,000
<PAGE>
Scudder AARP Global Pro Forma Pro Forma
Global Fund Growth Combined Scudder AARP Global Combined
Par/Share Par/Share Par/Share Global Fund Growth Market Market
Amount Amount Amount Market Value($) Value($) Value($)(1)
---------------------------------------------------------------------------------------
(Electric and gas utility)
Phillips Petroleum Co. 247,700 24,000 271,700 12,075,375 1,170,000 13,245,375
(Petroleum exploration, production and
refining)
ProLogis Trust (REIT) 219,800 20,100 239,900 4,148,725 379,388 4,528,113
(Global owner of corporate
distribution facilities)
Progressive Corp. 45,300 4,400 49,700 3,700,444 359,425 4,059,869
(Property and casualty insurance
company)
Sabre Group Holdings Inc. "A" 251,900 24,100 276,000 10,831,700 1,036,300 11,868,000
(Travel reservation system provider)
Sterling Commerce, Inc. 43,600 43,600 809,325 809,325
(Producer of electronic data
interchange products and services)
Stillwater Mining Co. 647,050 59,100 706,150 17,389,469 1,588,313 18,977,782
(Exploration and development of mines
in Montana producing platinum,
palladium and associated metals)
Sun Microsystems, Inc. 233,900 22,100 256,000 21,752,700 2,055,300 23,808,000
(Manufacturer of high-performance
workstations, servers and networking
software)
US Airways Group, Inc. 265,100 25,800 290,900 6,958,875 677,250 7,636,125
(Major airline)
USEC Inc. 1,978,200 189,600 2,167,800 20,276,550 1,943,400 22,219,950
(Provider of enriched uranium
products and services)
Unocal Corp. 295,400 28,600 324,000 10,948,263 1,059,988 12,008,251
(Explorer and producer of oil and gas)
UnumProvident Corp. 349,200 34,000 383,200 10,279,575 1,000,875 11,280,450
(Provider of group disability and
special risk insurance)
Williams Cos., Inc. 430,700 47,800 478,500 16,124,330 1,789,513 17,913,843
(Gas pipeline operator and petroleum
producer)
XL Capital Ltd. " A" 137,533 13,092 150,625 6,188,980 589,140 6,778,120
------------------------------------------------
(Provider of insurance)
491,654,299 48,758,672 540,412,971
------------------------------------------------
================================================
TOTAL COMMON STOCKS (COST OF $1,115,725,169 ,
$116,824,857 AND $1,232,550,026 RESPECTIVELY) 1,423,447,145 137,740,457 1,561,187,602
================================================
6,183,494
================================================
TOTAL INVESTMENT PORTFOLIO - 100% (COST OF
$1,184,195,003, $120,602,268 AND $1,304,797,271 RESPECTIVELY) 1,493,664,354 141,564,819 1,635,229,173
================================================
(a) Represents number of contracts. Each contract equals a nominal value of EUR 2,931
1) Certain securities that do not conform to the investment policies to be in
effect after the Reorganization will be disposed of prior to the Reorganization.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINING CONDENSED STATEMENT OF ASSETS AND LIABILITIES
AS OF SEPTEMBER 30, 1999 (UNAUDITED)
Scudder
Global AARP Pro Forma Pro Forma
Fund Global Growth Adjustments Combined
----------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Investments, at value $1,493,664,354 $ 141,564,819 $1,635,229,173
Cash 1,520,964 2,985,627 4,506,591
Other assets less liabilities 20,896,583 380,967 $ (235,236) (2) 21,042,314
================= ================= ================ ================
Total Net assets $1,516,081,901 $ 144,931,413 $ (235,236) $1,660,778,078
================= ================= ================ ================
Net Assets
Scudder Shares $1,515,989,429
AARP Shares $ 144,788,649
Shares Outstanding
Scudder Shares 49,316,111 49,316,111
AARP Shares 7,162,400 (2,452,294) 4,710,106
Net Asset Value per Share
Scudder Shares $ 30.74 $ 30.74
AARP Shares $ 20.24 30.74
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINING CONDENSED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTH PERIOD ENDED SEPTEMBER 30, 1999 (UNAUDITED)
Scudder
Global AARP Pro Forma Pro Forma
Fund Global Growth Adjustments Combined
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Interest and dividend income $ 32,979,860 3,153,707 $ $-36,133,567
--------------------------------------------------------------------------
Total Investment Income 32,979,860 3,153,707 36,133,567
Expenses
Management fees 14,797,403 1,250,584 34,754 (3) 16,082,741
Trustee Fees 54,541 25,475 (25,475) (4) 54,541
All other expenses 6,497,308 1,213,198 (1,276,944) (5) 6,433,562
--------------------------------------------------------------------------
Total expenses before reductions 21,349,252 2,489,257 (1,267,665) 22,570,844
Expense reductions - - - -
--------------------------------------------------------------------------
Expenses, net 21,349,252 2,489,257 (1,267,665) 22,570,844
--------------------------------------------------------------------------
Net investment income (loss) 11,630,608 664,450 1,267,665 13,562,723
--------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) from investments 168,603,632 11,607,431 -- 180,211,063
and foreign currency related transactions
Net unrealized appreciation (depreciation)
of investments and foreign currency
related transactions 105,964,022 13,068,184 -- 119,032,206
---------------------------------------------------------------------------
Net increase in net assets from operations $ 286,198,262 $ 25,340,065 $ 1,267,665 $ 312,805,992
===========================================================================
</TABLE>
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1999
1. These financial statements set forth the unaudited pro forma condensed
Statement of Assets and Liabilities as of September 30, 1999, and the
unaudited pro forma condensed Statement of Operations for the twelve month
period ended September 30, 1999 for Scudder Global Fund and AARP Global
Growth Fund as adjusted giving effect to the Reorganization as if it had
occurred as of the beginning of the period. These statements have been
derived from the books and records utilized in calculating daily net asset
value for each fund.
2. Represents one-time proxy, legal, accounting and other costs of the
Reorganization of $92,472 and $142,764 to be borne by the Acquiring Fund
and the Acquired Fund, respectively.
3. Represents increase in management fees resulting from the application of
Scudder Global Fund's higher management fee.
4. Reduction in trustee fees resulting from the Reorganization.
5. Represents reduction in other expenses resulting from the implementation of
an administrative fee contract.
<PAGE>
PART C. OTHER INFORMATION
Item 15. Indemnification.
A policy of insurance covering Scudder Kemper Investments, Inc., its
subsidiaries including Scudder Investor Services, Inc., and all of the
registered investment companies advised by Scudder Kemper Investments,
Inc. insures the Registrant's Directors and officers and others against
liability arising by reason of an alleged breach of duty caused by any
negligent error or accidental omission in the scope of their duties.
Article Tenth of Registrant's Articles of Incorporation state as
follows:
TENTH: Liability and Indemnification
To the fullest extent permitted by the Maryland General Corporation Law
and the Investment Company Act of 1940, no director or officer of the
Corporation shall be liable to the Corporation or to its stockholders for
damages. This limitation on liability applies to events occurring at the time a
person serves as a director or officer of the Corporation, whether or not such
person is a director or officer at the time of any proceeding in which liability
is asserted. No amendment to these Articles of Amendment and Restatement or
repeal of any of its provisions shall limit or eliminate the benefits provided
to directors and officers under this provision with respect to any act or
omission which occurred prior to such amendment or repeal.
The Corporation, including its successors and assigns, shall indemnify
its directors and officers and make advance payment of related expenses to the
fullest extent permitted, and in accordance with the procedures required by
Maryland law, including Section 2-418 of the Maryland General Corporation Law,
as may be amended from time to time, and the Investment Company Act of 1940. The
By-laws may provide that the Corporation shall indemnify its employees and/or
agents in any manner and within such limits as permitted by applicable law. Such
indemnification shall be in addition to any other right or claim to which any
director, officer, employee or agent may otherwise be entitled.
The Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
partner, trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise or employee benefit plan
against any liability asserted against and incurred by such person in any such
capacity or arising out of such person's position, whether or not the
Corporation would have had the power to indemnify against such liability.
The rights provided to any person by this Article shall be enforceable
against the Corporation by such person who shall be presumed to have relied upon
such rights in serving or continuing to serve in the capacities indicated
herein. No amendment of these Articles of Amendment and Restatement shall impair
the rights of any person arising at any time with respect to events occurring
prior to such amendment.
Nothing in these Articles of Amendment and Restatement shall be deemed
to (i) require a waiver of compliance with any provision of the Securities Act
of 1933, as amended, or the Investment Company Act of 1940, as amended, or of
any valid rule, regulation or order of the Securities and Exchange Commission
under those Acts or (ii) protect any director or officer of the Corporation
against any liability to the Corporation or its stockholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of his or her duties or by reason of his or her
reckless disregard of his or her obligations and duties hereunder.
-57-
<PAGE>
Item 16. Exhibits:
(1) (a)(1) Articles of Amendment and Restatement, dated
December 13, 1990, is incorporated by
reference to Post-Effective Amendment No. 8 to
the Registration Statement of
Global/International Fund, Inc. on Form N-1A,
as amended (the "Registration Statement")
(a)(2) Articles of Amendment, dated December 29,
1997, is incorporated by reference to
Post-Effective Amendment No. 34 to the
Registration Statement.
(a)(3) Articles of Amendment, dated May 29, 1998, is
incorporated by reference to Post-Effective
Amendment No. 34 to the Registration
Statement.
(a)(4) Articles Supplementary, dated February 14,
1991, is incorporated by reference to
Post-Effective Amendment No. 9 to the
Registration Statement.
(a)(5) Articles Supplementary, dated July 11, 1991, is
incorporated by reference to Post-Effective
Amendment No. 12 to the Registration Statement.
(a)(6) Articles Supplementary, dated November 24,
1992, is incorporated by reference to
Post-Effective Amendment No. 18 to the
Registration Statement.
(a)(7) Articles Supplementary, dated October 20, 1993,
is incorporated by reference to Post-Effective
Amendment No. 19 to the Registration Statement.
(a)(8) Articles Supplementary, dated December 14,
1995, is incorporated by reference to
Post-Effective Amendment No. 26 to the
Registration Statement.
(a)(9) Articles Supplementary, dated March 6, 1996, is
incorporated by reference to Post-Effective
Amendment No. 28 to the Registration Statement.
(a)(10) Articles Supplementary, dated April 15, 1998 is
incorporated by reference to Post-Effective
Amendment No. 34 to the Registration Statement.
-58-
<PAGE>
2. (b)(1) By-Laws, dated May 15, 1986, are incorporated
by reference to the original Registration
Statement.
(b)(2) Amendment, dated May 4, 1987, to the By-Laws
is incorporated by reference to Post-Effective
Amendment No. 2 to the Registration Statement.
(b)(3) Amendment to the By-Laws, dated September 14,
1987, is incorporated by reference to
Post-Effective Amendment No. 5 to the
Registration Statement.
(b)(4) Amendment to the By-Laws, dated July 27, 1988,
is incorporated by reference to Post-Effective
Amendment No. 5 to the Registration Statement.
(b)(5) Amendment to the By-Laws, dated September 15,
1989, is incorporated by reference to
Post-Effective Amendment No. 7 to the
Registration Statement.
(b)(6) Amended and Restated By-Laws, dated March 4,
1991, are incorporated by reference to
Post-Effective Amendment No. 12 to the
Registration Statement.
(b)(7) Amendment to the By-Laws, dated September 20,
1991, is incorporated by reference to
Post-Effective Amendment No. 15 to the
Registration Statement.
(b)(8) Amendment to the By-Laws, dated December 12,
1991, is incorporated by reference to
Post-Effective Amendment No. 23 to the
Registration Statement.
(b)(9) Amendment to the By-Laws, dated October 1,
1996, is incorporated by reference to
Post-Effective Amendment No. 27 to the
Registration Statement.
(b)(10) Amendment to the By-Laws, dated December 3,
1997, is incorporated by reference to
Post-Effective Amendment No. 34 to the
Registration Statement.
3. Inapplicable.
4. Agreement and Plan of Reorganization filed
as Exhibit A to Part A hereof.
-59-
<PAGE>
5. (e)(1) Specimen Share Certificate representing shares
of capital stock of $.01 par value of Scudder
Global Fund is incorporated by reference to
Post-Effective Amendment No. 6 to the
Registration Statement.
(e)(2) Specimen Share Certificate representing shares
of capital stock of $.01 par value of Scudder
International Bond Fund is incorporated by
reference to Post-Effective Amendment No. 6 to
the Registration Statement.
6. (f)(1) Investment Management Agreement between the
Registrant (on behalf of Scudder Global Fund)
and Scudder Kemper Investments, Inc. dated
September 7, 1998 is incorporated by reference
to Post-Effective Amendment No. 36 to the
Registration Statement.
(f)(2) Investment Management Agreement between the
Registrant (on behalf of Scudder International
Bond Fund) and Scudder Kemper Investments,
Inc., dated September 7, 1998, is incorporated
by reference to Post-Effective Amendment No.
36 to the Registration Statement.
(f)(3) Investment Management Agreement between the
Registrant (on behalf of Scudder Global Bond
Fund) and Scudder Kemper Investments, Inc.,
dated September 7, 1998, is incorporated by
reference to Post-Effective Amendment No. 36
to the Registration Statement.
(f)(4) Investment Management Agreement between the
Registrant (on behalf of Scudder Global
Discovery Fund) and Scudder Kemper
Investments, Inc., dated September 7, 1998, is
incorporated by reference to Post Effective
Amendment No. 36 to the Registration Statement.
(f)(5) Investment Management Agreement between the
Registrant (on behalf of Scudder Emerging
Markets Income Fund) and Scudder Kemper
Investments, Inc., dated September 7, 1998 is
incorporated by reference to Post-Effective
Amendment No. 36 to the Registration Statement.
7. (g)(1) Underwriting Agreement between the Registrant
and Scudder Investor Services, Inc., dated
September 7, 1998, is incorporated by
reference to Post-Effective Amendment No. 36
to the Registration Statement.
(g)(2) Underwriting and Distribution Services
Agreement between the Registrant (on behalf of
Global Discovery Fund) and Kemper Distributors,
Inc., dated August 6, 1998 incorporated by
reference to Post Effective Amendment 36 to the
Registration Statement.
-60-
<PAGE>
(g)(3) Underwriting and Distribution Services
Agreement between the Registrant, (on behalf
of Global Discovery Fund) and Kemper
Distributors, Inc., dated September 7, 1998,
is incorporated by reference to Post Effective
Amendment No. 37 to the Registration Statement.
8. Inapplicable.
9. (i)(1) Custodian Agreement between the Registrant and
State Street Bank and Trust Company, dated July
24, 1986, is incorporated by reference to
Post-Effective Amendment No. 1 to the
Registration Statement.
(i)(2) Fee schedule for Exhibit (g)(1) is
incorporated by reference to Post-Effective
Amendment No. 4 to the Registration Statement.
(i)(3) Custodian Agreement between the Registrant (on
behalf of Scudder International Bond Fund) and
Brown Brothers Harriman & Co., dated July 1,
1988, is incorporated by reference to
Post-Effective Amendment No. 5 to the
Registration Statement.
(i)(4) Fee schedule for Exhibit 8(g)(3) is
incorporated by reference to Post-Effective
Amendment No. 5 to the Registration Statement.
(i)(5) Amendment, dated September 16, 1988, to the
Custodian Contract between the Registrant and
State Street Bank and Trust Company dated July
24, 1986 is Incorporated by reference to
Post-Effective Amendment No. 6 to the
Registration Statement.
(i)(6) Amendment, dated December 7, 1988, to the
Custodian Contract between the Registrant and
State Street Bank and Trust Company dated July
24, 1986 is incorporated by reference to
Post-Effective Amendment No. 6 to the
Registration Statement.
(i)(7) Amendment, dated November 30, 1990, to the
Custodian Contract between the Registrant and
State Street Bank and Trust Company, dated July
24, 1986, is incorporated by reference to
Post-Effective Amendment No. 10 to the
Registration Statement.
-61-
<PAGE>
(i)(8) Custodian Agreement between the Registrant (on
behalf of Scudder Short Term Global Income
Fund) and Brown Brothers Harriman & Co., dated
February 28, 1991, is incorporated by
reference to Post-Effective Amendment No. 15
to the Registration Statement.
(i)(9) Custodian Agreement between the Registrant (on
behalf of Scudder Global Small Company Fund)
and Brown Brothers Harriman & Co., dated
August 30, 1991, is incorporated by reference
to Post-Effective Amendment No. 16 to the
Registration Statement.
(i)(10) Custodian Agreement between the Registrant (on
behalf of Scudder Emerging Markets Income
Fund) and Brown Brothers Harriman & Co., dated
December 31, 1993, is incorporated by
reference to Post-Effective Amendment No. 23
to the Registration Statement.
(i)(11) Amendment (on behalf of Scudder Global Fund)
dated October 3, 1995 to the Custodian
Agreement between the Registrant and Brown
Brothers Harriman & Co., dated March 7, 1995,
is incorporated by reference to Post-Effective
Amendment No. 24 to the Registration Statement.
(i)(12) Amendment, dated September 29, 1997, to the
Custodian Contract between the Registrant and
Brown Brothers Harriman & Co. dated,
March 7, 1995, is incorporated by reference to
Post-Effective Amendment No. 32 to the
Registration Statement.
(i)(13) Amendment (on behalf of Scudder International
Bond Fund), dated April 16, 1998, to the
Custodian Agreement between the Registrant and
Brown Brothers Harriman & Co., dated
March 7, 1995, is incorporated by reference to
Post-Effective Amendment No. 34 to the
Registration Statement.
(i)(14) Amendment (on behalf of Scudder Global
Discovery Fund), dated April 16, 1998, to the
Custodian Agreement between the Registrant and
Brown Brothers Harriman & Co., dated March 7,
1998, is incorporated by reference to
Post-Effective Amendment No. 34 to the
Registration Statement.
(i)(15) Amendment (on behalf of Scudder Emerging
Markets Income Fund), dated June 17, 1998, to
the Custodian Agreement between the Registrant
and Brown Brothers Harriman & Co., dated
March 7, 1995, is incorporated by reference to
Post-Effective Amendment No. 34 to the
Registration Statement.
-62-
<PAGE>
10. (j)(1) Amended and Restated Rule 12b-1 Plan for
Global Discovery Fund Class B Shares, dated
August 6, 1998, is incorporated by reference
to Post Effective Amendment No. 36 to the
Registration Statement.
(j)(2) Amended and Restated Rule 12b-1 Plan for
Global Discovery Fund Class C Shares dated
August 6, 1998 is incorporated by reference to
Post Effective Amendment No. 36 to the
Registration Statement.
(j)(3) Mutual Funds Multi-Distribution System Plan
pursuant to Rule 18f-3 is incorporated by
reference to Post-Effective Amendment No. 33 to
the Registration Statement.
11. Opinion and consent of Dechert Price & Rhoads
filed herein.
12. Opinion and consent of Willkie Farr &
Gallagher to be filed by post-effective
amendment.
13. (m)(1) Transfer Agency and Service Agreement between
the Registrant and Scudder Service
Corporation, dated October 2, 1989, is
incorporated by reference to Post-Effective
Amendment No. 7 to the Registration Statement.
(m)(2) Revised fee schedule dated October 1, 1996 for
Exhibit 9(a)(1) is incorporated by reference
to Post-Effective Amendment No. 28 to the
Registration Statement.
(m)(3) Agency agreement between the Registrant, (on
behalf of Global Discovery Fund) and Kemper
Service Company ,dated April 16,1998, is
incorporated by reference to Post-Effective
Amendment No. 35 to the Registration
Statement.
(m)(4) COMPASS Service Agreement between Scudder
Trust Company and the Registrant, dated
October 1, 1995, is incorporated by reference
to Post-Effective Amendment No. 26 to the
Registration Statement.
(m)(5) Revised fee schedule, dated October 1, 1996,
for Exhibit 9(b)(4) is incorporated by
reference to Post-Effective Amendment No. 28 to
the Registration Statement.
(m)(6) Shareholder Services Agreement with Charles
Schwab & Co., Inc., dated June 1, 1990, is
incorporated by reference to Post-Effective
Amendment No. 7 to the Registration Statement.
-63-
<PAGE>
(m)(7) Service Agreement between Copeland Associates,
Inc. and Scudder Service Corporation (on
behalf of Scudder Global Fund and Scudder
Global Small Company Fund), dated June
8, 1995, is incorporated by reference to
Post-Effective Amendment No. 24 to the
Registration Statement.
(m)(8) Administrative Services Agreement between
McGladvey & Pullen, Inc. and the Registrant,
dated September 30, 1995, is incorporated by
reference to Post-Effective Amendment No. 26
to the Registration Statement.
(m)(9) Administrative Services Agreement between the
Registrant (on behalf of Global Discovery
Fund) and Kemper Distributors, Inc., dated
April 16, 1998, is incorporated by reference
to Post-Effective Amendment No. 34 to the
Registration Statement.
(m)(10) Fund Accounting Services Agreement between the
Registrant (on behalf of Scudder Global Fund)
and Scudder Fund Accounting Corporation, dated
March 14, 1995, is incorporated by reference
to Post-Effective Amendment No. 24 to the
Registration Statement.
(m)(11) Fund Accounting Services Agreement between the
Registrant (on behalf of Scudder International
Bond Fund) and Scudder Fund Accounting
Corporation, dated August 3, 1995, is
incorporated by reference to Post-Effective
Amendment No. 25 to the Registration
Statement.
(m)(12) Fund Accounting Services Agreement between the
Registrant (on behalf of Scudder Global Small
Company Fund) and Scudder Fund Accounting
Corporation, dated June 15, 1995, is
incorporated by reference to Post-Effective
Amendment No. 25 to the Registration
Statement.
(m)(13) Fund Accounting Services Agreement between the
Registrant (on behalf of Scudder Global Bond
Fund (formerly Scudder Short Term Global
Income Fund)) and Scudder Fund Accounting
Corporation, dated November 29, 1995, is
incorporated by reference to Post-Effective
Amendment No. 26 to the Registration
Statement.
(m)(14) Fund Accounting Services Agreement between the
Registrant (on behalf of Scudder Emerging
Markets Income Fund) and Scudder Fund
Accounting Corporation, dated February 1,
1996, is incorporated by reference to
Post-Effective Amendment No. 27 to the
Registration Statement.
14. Consent of PricewaterhouseCoopers LLP filed
herein.
-64-
<PAGE>
15. Inapplicable.
16. Powers of attorney filed herein.
17. Form of Proxy filed herein.
Item 17. Undertakings.
1) The undersigned registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this registration statement by
any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c) of the Securities Act [17 CFR
230.145c], the reoffering prospectus will contain the
information called for by the applicable registration form for
C-8 350 reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items
of the applicable form.
(2) The undersigned registrant agrees that every prospectus
that is filed under paragraph (1) above will be filed as a
part of an amendment to the registration statement and will
not be used until the amendment is effective, and that, in
determining any liability under the 1933 Act, each
post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and
the offering of the securities at that time shall be deemed to
be the initial bona fide offering of them.
-65-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Global/International Fund, Inc. has duly caused
this Registration Statement on Form N-14 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston and the
Commonwealth of Massachusetts on the 3rd day of March, 2000.
GLOBAL/INTERNATIONAL FUND, INC.
By: /s/ William Holzer
-------------------------
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form N-14 has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ William Holzer President March 3, 2000
- -------------------
William Holzer
/s/ Sheryle J. Bolton* Director March 3, 2000
- ----------------------
Sheryle J. Bolton
/s/ William T. Burgin* Director March 3, 2000
- ----------------------
William T. Burgin
/s/ Keith R. Fox* Director March 3, 2000
- -----------------
Keith R. Fox
/s/ William H. Luers* Director March 3, 2000
- ---------------------
William H. Luers
/s/ Kathryn L. Quirk* Director, Vice President March 3, 2000
- --------------------- and Assistant Secretary
Kathryn L. Quirk
/s/ Joan E. Spero* Director March 3, 2000
- ------------------
Joan E. Spero
/s/ John R. Hebble Treasurer (Principal March 3, 2000
- ------------------- Financial and Accounting
John R. Hebble Officer)
*By: /s/ Sheldon A. Jones March 3, 2000
--------------------
Sheldon A. Jones
Attorney-in-fact
-66-
<PAGE>
*Executed pursuant to powers of attorney filed with the Registrant's
Registration Statement on Form N-14 as filed with the Commission electronically
herewith.
-67-
<PAGE>
EXHIBIT 11
DECHERT PRICE & RHOADS LETTERHEAD
March 3, 2000
Global/International Fund, Inc. on behalf of
Scudder Global Fund
345 Park Avenue
New York, NY 10154
Dear Sirs:
We have acted as counsel to Global/International Fund, Inc., a
Maryland corporation (the "Corporation"), and we have a general familiarity
with the Corporation's business operations, practices and procedures. You
have asked for our opinion regarding the issuance of AARP Shares class of
shares of common stock by the Corporation in connection with the acquisition
by Scudder Global Fund, a series of the Corporation, of the assets of AARP
Global Growth Fund, a series of AARP Growth Trust, which shares are
registered on a Form N-14 Registration Statement (the "Registration
Statement") filed by the Corporation with the Securities and Exchange
Commission.
We have examined originals or certified copies, or copies otherwise
identified to our satisfaction as being true copies, of various corporate
records of the Corporation and such other instruments, documents and records as
we have deemed necessary in order to render this opinion. We have assumed the
genuineness of all signatures, the authenticity of all documents examined by us
and the correctness of all statements of fact contained in those documents.
On the basis of the foregoing, we are of the opinion that the AARP
Shares class of shares of common stock of the Corporation being registered
under the Securities Act of 1933 in the Registration Statement, subject to
the creation of the AARP Shares class of shares in accordance with the laws
of the State of Maryland, will be legally and validly issued, fully paid and
non-assessable, upon transfer of the assets of AARP Global Growth Fund
pursuant to the terms of the Agreement and Plan of Reorganization included in
the Registration Statement.
We hereby consent to the filing of this opinion with and as part of the
Registration Statement.
Very truly yours,
/s/ DECHERT PRICE & RHOADS
-68-
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Proxy
Statement/Prospectus and Statement of Additional Information constituting parts
of this Registration Statement on Form N-14 (the "Registration Statement") of
our report dated October 12, 1999, relating to the financial statements and
financial highlights appearing in the August 31, 1999 Annual Report to
Shareholders of Scudder Global Fund which are also incorporated by reference
into the Registration Statement. We also consent to the references to us under
the heading "Administrative Fee" in the Proxy Statement/Prospectus and under the
headings "Financial Highlights" in the Prospectus and "Experts" in the Statement
of Additional Information dated January 1, 2000
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 1, 2000
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Proxy
Statement/Prospectus and Statement of Additional Information constituting parts
of this Registration Statement on Form N-14 (the "Registration Statement") of
our report dated November 8, 1999, relating to the financial statements and
financial highlights appearing in the September 30, 1999 Annual Report to
Shareholders of AARP Global Growth Fund which are also incorporated by reference
into the Registration Statement. We also consent to the references to us under
the heading "Administrative Fee" in the Proxy Statement/Prospectus and under the
headings "Financial Highlights" in the Prospectus and "Experts" in the Statement
of Additional Information dated February 1, 2000.
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 1, 2000
<PAGE>
EXHIBIT 16
GLOBAL/INTERNATIONAL FUND
Scudder Global Fund
POWERS OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated. By so signing, the undersigned in his capacity as
director or officer, or both, as the case may be, of the Registrant, does
hereby appoint Sheldon A. Jones, Allison R. Beakley, Caroline Pearson and
John Millette and each of them, severally, his/her true and lawful attorney
and agent to execute in his/her name, place and stead (in such capacity) any
and all amendments to the Registration Statement and any post-effective
amendments thereto and all instruments necessary or desirable in connection
therewith, to attest the seal of the Registrant thereon and to file the same
with the Securities and Exchange Commission. Each of said attorneys and
agents shall have power to act with or without the other and have full power
and authority to do and perform in the name and on behalf of the undersigned,
in any and all capacities, every act whatsoever necessary or advisable to be
done in the premises as fully and to all intents and the purposes as the
undersigned might or could do in person, hereby ratifying and approving the
act of said attorneys and agents and each of them.
SIGNATURE TITLE DATE
--------- ----- ----
President February 8, 2000
- -------------------
William Holzer
/s/ Sheryle J. Bolton Director February 8, 2000
- ----------------------
Sheryle J. Bolton
/s/ William T. Burgin Director February 8, 2000
- ----------------------
William T. Burgin
/s/ Keith R. Fox Director February 8, 2000
- -----------------
Keith R. Fox
/s/ William H. Luers Director February 8, 2000
- ---------------------
William H. Luers
/s/ Kathryn L. Quirk Director, Vice President February 8, 2000
- --------------------- and Assistant Secretary
Kathryn L. Quirk
/s/ Joan E. Spero Director February 8, 2000
- ------------------
Joan E. Spero
Treasurer (Principal February 8, 2000
- ------------------- Financial and Accounting
John R. Hebble Officer)
-69-
<PAGE>
EXHIBIT 17
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.
[ACQUIRED FUND]
[ACQUIRED TRUST/CORPORATION]
[address]
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
[time], on [date]
The undersigned hereby appoints __________, ____________ and ____________,
and each of them, the proxies of the undersigned, with the power of substitution
to each of them, to vote all shares of the [Acquired 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.,
[address], on [date] at [time], 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/DIRECTORS] OF THE
[ACQUIRED FUND]. THE BOARD OF [TRUSTEES/DIRECTORS] RECOMMENDS A VOTE FOR THE
PROPOSALS.
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
FOR AGAINST ABSTAIN
PROPOSAL 1
To elect Trustees to the Board of Trustees
of the Portfolio to hold office until their
respective successors have been duly elected / / / / / /
and qualified or until their earlier
resignation or removal.
NOMINEES:
(01) __________, (02) ____________, (03) _________, (04) ______________, (05)
______________, (06) __________, (07) ______________, (08)_______________, (09)
____________.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE
FOR ANY INDIVIDUAL NOMINEE, WRITE THE
NAME(S) ON THE LINE IMMEDIATELY BELOW.
- ----------------------------------------------------
PROPOSAL 2
To approve an Agreement and Plan of
Reorganization for the Fund whereby all or
substantially all of the assets an / / / / / /
liabilities of the Fund would be acquired by
[Acquiring Fund] in exchange for shares of
the [class] of the [Acquiring Fund].
PROPOSAL 3
To ratify the selection of
PricewaterhouseCoopers LLP as the Fund's / / / / / /
independent accountants for the current
fiscal year.
<PAGE>
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
