As filed with the Securities and Exchange Commission on August 28, 1998
1933 Act Registration No. 33-32476
1940 Act Registration No. 811-5970
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 8
--------
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 9
--------
CASH ACCOUNT TRUST
(Exact name of Registrant as Specified in Charter)
222 South Riverside Plaza, Chicago, Illinois 60606
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (312) 537-7000
Philip J. Collora, Vice President and Secretary With a copy to:
Cash Account Trust Cathy G. O'Kelly
222 South Riverside Plaza David A. Sturms
Chicago, Illinois 60606 Vedder, Price, Kaufman & Kammholz
(Name and Address of Agent for Service) 222 North LaSalle Street
Chicago, Illinois 60601
It is proposed that this filing will become effective
immediately upon filing pursuant to paragraph (b)
--------
X on September 1, 1998 pursuant to paragraph (b)
--------
60 days after filing pursuant to paragraph (a)(i)
--------
on _______________________ pursuant to paragraph (a)(i)
--------
75 days after filing pursuant to paragraph (a)(ii)
--------
on ________________________ pursuant to paragraph (a)(ii)
of Rule 485
--------
If appropriate, check the following:
<PAGE>
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment
--------
2
<PAGE>
CASH ACCOUNT TRUST
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART A
OF FORM N-1A AND PROSPECTUS
<TABLE>
<CAPTION>
Item No. Item Caption Prospectus Caption
-------- ------------ ------------------
<S> <C> <C>
1. Cover Page COVER PAGE
2. Synopsis Summary; Summary of Expenses
3. Condensed Financial Financial Highlights; Performance
Information
4. General Description of Investment Objectives, Policies and Risk Factors; Capital
Registrant Structure
5. Management of the Fund Investment Manager and Shareholder Services
5A. Management's Discussion of Inapplicable
Fund Performance
6. Capital Stock and Other Purchase of Shares; Dividends and Taxes; Capital Structure
Securities
7. Purchase of Securities Being Purchase of Shares; Net Asset Value; Investment Manager and
Offered Shareholder Services; Special Features
8. Redemption or Repurchase Redemption of Shares; Special Features
9. Pending Legal Proceedings Inapplicable
</TABLE>
3
<PAGE>
CASH ACCOUNT TRUST
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART B
OF FORM N-1A AND STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
Caption in Statement
Item No. Item Caption of Additional Information
-------- ------------ -------------------------
<S> <C> <C>
10. Cover Page COVER PAGE
11. Table of Contents Table of Contents
12. General Information and Inapplicable
History
13. Investment Objectives and Investment Restrictions; Municipal Securities;
Policies Appendix--Ratings of Investments
14. Management of the Fund Investment Manager and Shareholder Services; Officers and
Trustees
15. Control Persons and Principal Officers and Trustees
Holders of Securities
16. Investment Advisory and Other Investment Manager and Shareholder Services; Officers and
Services Trustees
17. Brokerage Allocation and Portfolio Transactions
Other Practices
18. Capital Stock and Other Shareholder Rights
Securities
19. Purchase, Redemption and Purchase and Redemption of Shares; Dividends, Net Asset Value
Pricing of Securities Being and Taxes
Offered
20. Tax Status Dividends, Net Asset Value and Taxes
21. Underwriters Investment Manager and Shareholder Services
22. Calculation of Performance Performance
Data
23. Financial Statements Financial Statements
</TABLE>
4
<PAGE>
Cash Account Trust
222 South Riverside Plaza
Chicago, Illinois 60606
TABLE OF CONTENTS
SUMMARY....................................................................3
SUMMARY OF EXPENSES........................................................4
FINANCIAL HIGHLIGHTS.......................................................5
INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS...........................6
NET ASSET VALUE...........................................................11
PURCHASE OF SHARES........................................................11
REDEMPTION OF SHARES......................................................13
SPECIAL FEATURES..........................................................15
DIVIDENDS AND TAXES.......................................................15
INVESTMENT MANAGER AND SHAREHOLDER SERVICES...............................16
PERFORMANCE...............................................................18
CAPITAL STRUCTURE.........................................................19
This prospectus contains information about the Fund that a
prospective investor should know before investing and should be retained for
future reference. A Statement of Additional Information dated September 1, 1998,
has been filed with the Securities and Exchange Commission and is incorporated
herein by reference. It is available upon request without charge from the Fund
at the address or telephone number on this cover or the firm from which this
prospectus was received.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<PAGE>
Cash
Account
Trust
PROSPECTUS September 1, 1998
CASH ACCOUNT TRUST
222 South Riverside Plaza, Chicago, Illinois 60606 1-800-231-8568.
The Fund offers a choice of investment portfolios and is designed for investors
who seek maximum current income to the extent consistent with stability of
capital. The Fund currently offers the Money Market Portfolio, the Government
Securities Portfolio and the Tax-Exempt Portfolio. Each Portfolio invests
exclusively in high quality money market instruments.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government, the Federal Deposit Insurance Corporation, the Federal Reserve Board
or any other agency, and is not a deposit or obligation of, or guaranteed or
endorsed by, any bank. There can be no assurance that the Fund will be able to
maintain a stable net asset value of $1.00 per share.
2
<PAGE>
CASH ACCOUNT TRUST
222 South Riverside Plaza, Chicago, Illinois 60606, Telephone 1-800-231-8568
SUMMARY
Investment Objectives. Cash Account Trust (the "Fund") is an open-end
diversified management investment company. The Fund currently offers a choice of
three investment portfolios ("Portfolios"). Each Portfolio invests in a
portfolio of high quality short-term money market instruments consistent with
its specific objective. The Money Market Portfolio seeks maximum current income
to the extent consistent with stability of capital from a portfolio primarily of
commercial paper and bank obligations. The Government Securities Portfolio seeks
maximum current income to the extent consistent with stability of capital from a
portfolio of obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. The Tax-Exempt Portfolio seeks maximum current
income that is exempt from federal income taxes to the extent consistent with
stability of capital from a portfolio of municipal securities. Each Portfolio
may use a variety of investment techniques, including the purchase of repurchase
agreements and variable rate securities. Each Portfolio seeks to maintain a net
asset value of $1.00 per share. There is no assurance that the objective of any
Portfolio will be achieved or that any Portfolio will be able to maintain a net
asset value of $1.00 per share. See "Investment Objectives, Policies and Risk
Factors."
Investment Manager and Shareholder Services. Scudder Kemper Investments, Inc.
(the "Adviser") is the investment manager for the Fund and provides the Fund
with continuous professional investment supervision. The Adviser is paid a
monthly investment management fee on a graduated basis ranging from 1/12 of
0.22% of the first $500 million of combined average daily net assets of all
Portfolios of the Fund to 0.15% of the combined average daily net assets of all
Portfolios of the Fund over $3 billion. Kemper Distributors, Inc. ("KDI"), an
affiliate of the Adviser, is the primary administrator, distributor and
principal underwriter of the Fund and, as such, provides information and
services for existing and potential shareholders and acts as agent of the Fund
in the sale of its shares. KDI receives a distribution services fee, payable
monthly, at an annual rate of 0.60% of average daily net assets of the Money
Market and Government Securities Portfolios and 0.50% of average daily net
assets of the Tax-Exempt Portfolio. As distributor, KDI normally pays financial
services firms that provide cash management and other services for their
customers at an annual rate of 0.60% of average daily net assets of those
accounts in the Money Market and Government Securities Portfolios that they
service and 0.50% of average daily net assets of those accounts in the
Tax-Exempt Portfolio that they maintain and service. See "Investment Manager and
Shareholder Services."
Purchases and Redemptions. Shares of each Portfolio are available at net asset
value through selected financial services firms. The minimum initial investment
for each Portfolio is $1,000 and the minimum subsequent investment is $100. See
"Purchase of Shares." Shares may be redeemed at the net asset value next
determined after receipt by the Fund's Shareholder Service Agent of a request to
redeem in proper form. Shares may be redeemed by written request or by using one
of the Fund's expedited redemption procedures. See "Redemption of Shares."
Dividends. Dividends are declared daily and paid monthly. Dividends are
automatically reinvested in additional shares of the same Portfolio, unless the
shareholder makes a different election. See "Dividends and Taxes."
General Information and Capital. The Fund is organized as a business trust under
the laws of Massachusetts and may issue an unlimited number of shares of
beneficial interest. Shares are fully paid and nonassessable when issued, are
transferable without restriction and have no preemptive or conversion rights.
The Fund is not required to hold annual shareholder meetings; but will hold
special meetings as required or deemed desirable for such purposes as electing
trustees, changing fundamental policies or approving an investment management
agreement. See "Capital Structure."
3
<PAGE>
SUMMARY OF EXPENSES
<TABLE>
<CAPTION>
<S> <C>
Shareholder Transaction Expenses(1)..............................................................................None
Annual Fund Operating Expenses Money Market Government Tax-Exempt
(after fee waiver and expense absorption) Portfolio Securities Portfolio Portfolio
--------- -------------------- ---------
(as a percentage of average net assets)
Management Fees.................................................... 0.10% 0.18% 0.19%
12b-1 Fees(2)...................................................... 0.60% 0.60% 0.50%
Other Expenses..................................................... 0.30% 0.22% 0.25%
---- ---- ----
Total Operating Expenses........................................... 1.00% 1.00% 0.94%
===== ===== ======
(1) Investment dealers and other firms may independently charge shareholders
additional fees; please see their materials for details.
(2) As a result of the accrual of 12b-1 fees, long-term shareholders may pay
more than the economic equivalent of the maximum front-end sales charges
permitted by the National Association of Securities Dealers.
Example Portfolio 1 Year 3 Years 5 Years 10 Years
- ------- --------- ------ ------- ------- --------
You would pay the following expenses on a Money Market $10 $32 $55 $122
$1,000 investment, assuming (1) 5% annual return and (2) Government $10 $32 $55 $122
redemption at the end of each time Securities
period: Tax-Exempt $10 $30 $52 $115
</TABLE>
The purpose of the preceding table is to assist investors in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. As discussed more fully under "Investment Manager and Shareholder
Services," the Fund's investment manager has agreed to waive temporarily its
management fee and reimburse or pay operating expenses of a Portfolio to the
extent, if any, that such expenses as defined, exceed the following percentages
of average daily net assets of the Portfolios: Money Market Portfolio (1.00%),
Government Securities Portfolio (1.00%) and Tax-Exempt Portfolio (0.95%).
Without such waiver and reimbursement during the fiscal year ended April 30,
1998, "Management Fees" for the Money Market Portfolio and the Government
Securities Portfolio would have been 0.19% and 0.19%, respectively, and "Total
Operating Expenses" would have been 1.10% and 1.02%, respectively. The actual
expenses for the Tax-Exempt Portfolio were lower than the expense limit of
0.95%, therefore, the numbers in the table do not reflect any waiver or
reimbursement. In addition, from time to time, the Adviser may voluntarily waive
fees or absorb certain additional operating expenses of the Portfolios. "Other
Expenses" does not reflect the effect of this additional expense absorption. The
Example assumes a 5% annual rate of return pursuant to requirements of the
Securities and Exchange Commission. This hypothetical rate of return is not
intended to be representative of past or future performance of any Portfolio of
the Fund. The Example should not be considered to be a representation of past or
future expenses. Actual expenses may be greater or lesser than those shown.
4
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below show financial information expressed in terms of one share
outstanding throughout the period. The information in the tables is covered by
the report of the Fund's independent auditors. The report is contained in the
Fund's Registration Statement and is available from the Fund. The financial
statements contained in the Fund's 1998 Annual Report to Shareholders are
incorporated herein by reference and may be obtained by writing or calling the
Fund.
<TABLE>
<CAPTION>
Year ended April 30,
---------------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO 1998 1997 1996 1995 1994 1993 1992 December
---------------------- 3, 1990 to
April 30,
1991
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
----------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.05 0.05 0.05 0.04 0.02 0.02 0.04 0.03
----------------------------------------------------------------------------------------------------------------------------------
Less dividends declared 0.05 0.05 0.05 0.04 0.02 0.02 0.04 0.03
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
----------------------------------------------------------------------------------------------------------------------------------
Total Return 4.85% 4.60 4.96 4.38 2.42 2.65 4.44 2.63
Ratios to Average Net Assets:
Expenses after expense waiver 1.00% 1.00 1.00 0.99 0.93 0.84 0.93 1.00
----------------------------------------------------------------------------------------------------------------------------------
Net investment income 4.71% 4.51 4.83 4.54 2.48 2.59 4.03 6.24
----------------------------------------------------------------------------------------------------------------------------------
Other Ratios to Average Net Assets:
Expenses 1.10% 1.03 1.05 1.05 1.20 1.36 1.57 1.58
----------------------------------------------------------------------------------------------------------------------------------
Net investment income 4.61% 4.48 4.78 4.48 2.21 2.07 3.39 5.66
----------------------------------------------------------------------------------------------------------------------------------
Supplemental Data:
Net assets at end of period (in $1,995,057 584,947 455,025 378,551 156,153 34,267 27,905 6,105
thousands)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year ended April 30,
---------------------------------------------------------------------------------------------
GOVERNMENT SECURITIES PORTFOLIO 1998 1997 1996 1995 1994 1993 1992 December
3, 1990 to
April 30,
1991
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
----------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.05 0.05 0.05 0.04 0.02 0.02 0.04 0.03
----------------------------------------------------------------------------------------------------------------------------------
Less dividends declared 0.05 0.05 0.05 0.04 0.02 0.02 0.04 0.03
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
----------------------------------------------------------------------------------------------------------------------------------
Total Return 4.78% 4.69 5.01 4.37 2.49 2.65 4.54 2.47
Ratios to Average Net Assets:
Expenses after expense waiver 0.98% 0.92 0.90 0.90 0.84 0.79 0.79 0.87
----------------------------------------------------------------------------------------------------------------------------------
Net investment income 4.68% 4.59 4.88 4.66 2.47 2.63 4.41 5.95
----------------------------------------------------------------------------------------------------------------------------------
Other Ratios to Average Net Assets:
Expenses 1.02% 0.99 1.06 1.05 1.22 1.18 1.20 1.44
----------------------------------------------------------------------------------------------------------------------------------
Net investment income 4.64% 4.52 4.72 4.51 2.09 2.24 4.00 5.38
----------------------------------------------------------------------------------------------------------------------------------
Supplemental Data:
Net assets at end of period (in $804,565 544,501 189,919 138,020 30,829 28,963 34,119 30,080
thousands)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Year ended April 30,
---------------------------------------------------------------------------------------------
TAX-EXEMPT PORTFOLIO 1998 1997 1996 1995 1994 1993 1992 December
3, 1990 to
April 30,
1991
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
----------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.03 0.03 0.03 0.03 0.02 0.02 0.03 0.02
----------------------------------------------------------------------------------------------------------------------------------
Less dividends declared 0.03 0.03 0.03 0.03 0.02 0.02 0.03 0.02
----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
----------------------------------------------------------------------------------------------------------------------------------
Total Return 2.92% 2.82 3.16 2.80 1.84 2.13 3.46 1.76
Ratios to Average Net Assets:
Expenses after expense waiver 0.91% 0.81 0.78 0.76 0.74 0.71 0.67 0.75
----------------------------------------------------------------------------------------------------------------------------------
Net investment income 2.87% 2.78 3.10 3.00 1.82 2.09 3.34 4.30
----------------------------------------------------------------------------------------------------------------------------------
Other Ratios to Average Net Assets:
Expenses 0.94% 0.96 0.98 0.93 1.20 1.39 1.38 0.97
----------------------------------------------------------------------------------------------------------------------------------
Net investment income 2.84% 2.63 2.90 2.83 1.36 1.41 2.63 4.08
----------------------------------------------------------------------------------------------------------------------------------
Supplemental Data:
Net assets at end of period (in $368,141 220,791 66,981 67,748 16,991 10,014 7,097 3,904
thousands)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Notes:
(a) The Money Market Portfolio's total returns for the years ended
April 30, 1996 and 1995 include the effect of a capital
contribution from the investment manager. Without the capital
contribution, the total returns would have been 4.80% and
4.16%, respectively.
(b) The Adviser has agreed to waive temporarily its management fee
and reimburse or pay certain operating expenses to the extent
necessary to limit expenses to specific levels. The Other
Ratios to Average Net Assets are computed without this waiver
and expense absorption. Ratios have been determined on an
annualized basis. Total return is not annualized.
INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS
The Fund is a money market mutual fund designed to provide its shareholders with
professional management of short-term investment dollars. It is designed for
investors who seek maximum current income consistent with stability of capital.
The Fund pools individual and institutional investors' money that it uses to buy
high quality money market instruments. The Fund is a series investment company
that is able to provide investors with a choice of separate investment
portfolios ("Portfolios"). It currently offers three investment Portfolios: the
Money Market Portfolio, the Government Securities Portfolio and the Tax-Exempt
Portfolio. Because each Portfolio combines its shareholders' money, it can buy
and sell large blocks of securities, which reduces transaction costs and
maximizes yields. The Fund is managed by investment professionals who analyze
market trends to take advantage of changing conditions and who seek to minimize
risk by diversifying each Portfolio's investments. A Portfolio's investments are
subject to price fluctuations resulting from rising or declining interest rates
and are subject to the ability of the issuers of such investments to make
payment at maturity. However, because of their short maturities, liquidity and
high quality ratings, high quality money market instruments, such as those in
which the Fund invests, are generally considered to be among the safest
available. Thus, the Fund is designed for investors who want to avoid the
fluctuations of principal commonly associated with equity or long-term bond
investments. There can be no guarantee that a Portfolio will achieve its
objective or that it will maintain a net asset value of $1.00 per share.
6
<PAGE>
Money Market Portfolio. The Money Market Portfolio seeks maximum current income
consistent with stability of capital. The Portfolio pursues its objective by
investing exclusively in the following types of U.S. Dollar-denominated money
market instruments that mature in 12 months or less:
1. Obligations of, or guaranteed by, the U.S. or Canadian
governments, their agencies or instrumentalities.
2. Bank certificates of deposit, time deposits or bankers'
acceptances of U.S. banks (including their foreign branches)
and Canadian chartered banks having total assets in excess of
$1 billion.
3. Bank certificates of deposit, time deposits or bankers'
acceptances of foreign banks (including their U.S. and foreign
branches) having total assets in excess of $10 billion.
4. Commercial paper, notes, bonds, debentures, participation
certificates or other debt obligations that (i) are rated
high quality by Moody's Investors Service, Inc. ("Moody's"),
Standard & Poor's Corporation ("S&P"), or Duff & Phelps, Inc.
("Duff"); or (ii) if unrated, are determined to be at least
equal in quality to one or more of the above ratings in the
discretion of the Fund's investment manager. Currently, only
obligations in the top two categories are considered to be
rated high quality. The two highest rating categories of
Moody's, S&P and Duff for commercial paper are Prime-1 and
Prime-2, A-1 and A-2 and Duff 1 and Duff 2, respectively. For
other debt obligations, the two highest rating categories for
such services are Aaa and Aa, AAA and AA and AAA and AA,
respectively. For a description of these ratings, see
"Appendix-- Ratings of Investments" in the Statement of
Additional Information.
5. Repurchase agreements of obligations that are suitable for
investment under the categories set forth above. Repurchase
agreements are discussed below.
In addition, the Portfolio limits its investments to securities that meet the
quality and diversification requirements of Rule 2a-7 under the Investment
Company Act of 1940 (the "1940 Act"). See "Net Asset Value."
The Money Market Portfolio will normally invest at least 25% of its assets in
obligations issued by banks; provided, however, the Portfolio may in the
discretion of the Fund's investment manager temporarily invest less than 25% of
its assets in such obligations whenever the Portfolio assumes a defensive
posture. Investments by the Money Market Portfolio in Eurodollar certificates of
deposit issued by London branches of U.S. banks, or obligations issued by
foreign entities, including foreign banks, involve risks that are different from
investments in securities of domestic branches of U.S. banks. These risks may
include future unfavorable political and economic developments, possible
withholding taxes on interest payments, seizure of foreign deposits, currency
controls, interest limitations or other governmental restrictions that might
affect payment of principal or interest. The market for such obligations may be
less liquid and, at times, more volatile than for securities of domestic
branches of U.S. banks. Additionally, there may be less public information
available about foreign banks and their branches. The profitability of the
banking industry is dependent largely upon the availability and cost of funds
for the purpose of financing lending operations under prevailing money market
conditions. General economic conditions as well as exposure to credit losses
arising from possible financial difficulties of borrowers play an important part
in banking operations. As a result of Federal and state laws and regulations,
domestic banks are, among other things, required to maintain specified levels of
reserves, limited in the amounts they can loan to a single borrower and subject
to other regulations designed to promote financial soundness. However, not all
such laws and regulations apply to the foreign branches of domestic banks.
Foreign branches of foreign banks are not regulated by U.S. banking authorities,
and generally are not bound by accounting, auditing and financial reporting
standards comparable to U.S. banks. Bank obligations held by the Portfolio do
not benefit materially from insurance from the Federal Deposit Insurance
Corporation.
The Money Market Portfolio may invest in commercial paper issued by major
corporations under the Securities Act of 1933 in reliance on the exemption from
registration afforded by Section 3(a)(3) thereof. Such commercial paper may be
issued only to finance current transactions and must mature in nine months or
less. Trading of such commercial paper is conducted primarily by institutional
investors through investment dealers and individual investor participation in
the commercial paper market is very limited. The Portfolio also may invest in
commercial paper issued in reliance on the so-called "private placement"
exemption from registration that is afforded by Section 4(2) of the Securities
Act of 1933 ("Section 4(2) paper"). Section 4(2) paper is restricted as to
disposition under the federal securities laws, and generally is sold to
institutional investors such as the Portfolio who agree that they are purchasing
7
<PAGE>
the paper for investment and not with a view to public distribution. Any resale
by the purchaser must be in an exempt transaction. Section 4(2) paper normally
is resold to other institutional investors like the Portfolio through or with
the assistance of the issuer or investment dealers who make a market in the
Section 4(2) paper, thus providing liquidity. The Fund's investment manager
considers the legally restricted but readily saleable Section 4(2) paper to be
liquid; however, pursuant to procedures approved by the Board of Trustees of the
Fund, if a particular investment in Section 4(2) paper is not determined to be
liquid, that investment will be included within the 10% limitation on illiquid
securities discussed under "The Fund" below. The Fund's investment manager
monitors the liquidity of the Portfolio's investments in Section 4(2) paper on a
continuous basis.
The Money Market Portfolio may invest in high quality participation certificates
("certificates") representing undivided interests in trusts that hold a
portfolio of receivables from consumer and commercial credit transactions, such
as transactions involving consumer revolving credit card accounts or commercial
revolving credit loan facilities. The receivables would include amounts charged
for goods and services, finance charges, late charges and other related fees and
charges. Interest payable on the certificates may be fixed or may be adjusted
periodically or "float" continuously according to a formula based upon an
objective standard such as the 30-day commercial paper rate. See "The Fund"
below for a discussion of "Variable Rate Securities." A trust may have the
benefit of a letter of credit from a bank at a level established to satisfy
rating agencies as to the credit quality of the assets supporting the payment of
principal and interest on the certificates. Payments of principal and interest
on the certificates would be dependent upon the underlying receivables in the
trust and may be guaranteed under a letter of credit to the extent of such
credit. The quality rating by a rating service of an issue of certificates is
based primarily upon the value of the receivables held by the trust and the
credit rating of the issuer of any letter of credit and of any other guarantor
providing credit support to the trust. The Fund's investment manager considers
these factors as well as others, such as any quality ratings issued by the
rating services identified above, in reviewing the credit risk presented by a
certificate and in determining whether the certificate is appropriate for
investment by the Portfolio. Collection of receivables in the trust may be
affected by various social, legal and economic factors affecting the use of
credit and repayment patterns, such as changes in consumer protection laws, the
rate of inflation, unemployment levels and relative interest rates. It is
anticipated that for most publicly offered certificates there will be a liquid
secondary market or there may be demand features enabling the Fund to readily
sell its certificates prior to maturity to the issuer or a third party. While
the Portfolio may invest without limit in certificates, it is currently
anticipated that such investments will not exceed 25% of the Portfolio's assets.
Government Securities Portfolio. The Government Securities Portfolio seeks
maximum current income consistent with stability of capital. The Portfolio
pursues its objective by investing exclusively in U.S. Treasury bills, notes,
bonds and other obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities and repurchase agreements of such obligations. All
securities purchased mature in 12 months or less. Some securities issued by U.S.
Government agencies or instrumentalities are supported only by the credit of the
agency or instrumentality, such as those issued by the Federal Home Loan Bank,
and others have an additional line of credit with the U.S. Treasury, such as
those issued by the Federal National Mortgage Association, Farm Credit System
and Student Loan Marketing Association. Short-term U.S. Government obligations
generally are considered to be the safest short-term investment. The U.S.
Government guarantee of the securities owned by the Portfolio, however, does not
guarantee the net asset value of its shares, which the Fund seeks to maintain at
$1.00 per share. Also, with respect to securities supported only by the credit
of the issuing agency or instrumentality or by an additional line of credit with
the U.S. Treasury, there is no guarantee that the U.S. Government will provide
support to such agencies or instrumentalities and such securities may involve
risk of loss of principal and interest. Repurchase agreements are discussed
below.
Tax-Exempt Portfolio. The Tax-Exempt Portfolio seeks maximum current income that
is exempt from Federal income taxes to the extent consistent with stability of
capital. The Portfolio pursues its objective primarily through a professionally
managed, diversified portfolio of short-term high quality tax-exempt municipal
obligations. Under normal market conditions at least 80% of the Portfolio's
total assets will, as a fundamental policy, be invested in obligations issued by
or on behalf of states, territories and possessions of the United States and the
District of Columbia and their political subdivisions, agencies and
instrumentalities, the income from which is exempt from Federal income tax
("Municipal Securities"). In compliance with the position of the staff of the
Securities and Exchange Commission, the Fund does not consider "private
activity" bonds as described in "Dividends and Taxes -- Tax-Exempt Portfolio" to
be Municipal Securities for purposes of the 80% limitation. This is a
fundamental policy so long as the staff maintains its position, after which it
would become non-fundamental.
8
<PAGE>
Dividends representing net interest income received by the Tax-Exempt Portfolio
on Municipal Securities will be exempt from federal income tax when distributed
to the Portfolio's shareholders. Such dividend income may be subject to state
and local taxes. See "Dividends and Taxes -- Tax-Exempt Portfolio." The
Portfolio's assets will consist of Municipal Securities, taxable temporary
investments as described below and cash. The Portfolio considers short-term
Municipal Securities to be those that mature in one year or less.
The Tax-Exempt Portfolio will invest only in Municipal Securities that at the
time of purchase: (a) are rated within the two highest-ratings for Municipal
Securities (Aaa or Aa) assigned by Moody's or (AAA or AA) assigned by S&P; (b)
are guaranteed or insured by the U.S. Government as to the payment of principal
and interest; (c) are fully collateralized by an escrow of U.S. Government
securities acceptable to the Fund's investment manager; (d) have at the time of
purchase Moody's short-term Municipal Securities rating of MIG-2 or higher or a
municipal commercial paper rating of P-2 or higher, or S&P's municipal
commercial paper rating of A-2 or higher; (e) are unrated, if longer term
Municipal Securities of that issuer are rated within the two highest rating
categories by Moody's or S&P; or (f) are determined to be at least equal in
quality to one or more of the above ratings in the discretion of the Fund's
investment manager. In addition, the Portfolio limits its investments to
securities that meet the quality requirements of Rule 2a-7 under the Investment
Company Act of 1940. See "Net Asset Value."
Municipal Securities generally are classified as "general obligation" or
"revenue" issues. General obligation bonds are secured by the issuer's pledge of
its full credit and taxing power for the payment of principal and interest.
Revenue bonds are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise tax or other specific revenue source such as the user of the
facility being financed. Industrial development bonds held by the Fund are in
most cases revenue bonds and are not payable from the unrestricted revenues of
the issuer. Among other types of instruments, the Portfolio may purchase
tax-exempt commercial paper, warrants and short-term municipal notes such as tax
anticipation notes, bond anticipation notes, revenue anticipation notes,
construction loan notes and other forms of short-term loans. Such notes are
issued with a short-term maturity in anticipation of the receipt of tax
payments, the proceeds of bond placements or other revenues. A more detailed
discussion of Municipal Securities and the Moody's and S&P ratings outlined
above is contained in the Statement of Additional Information. As indicated
under "Dividends and Taxes -- Tax-Exempt Portfolio," the Portfolio may invest in
short-term "private activity" bonds.
The Tax-Exempt Portfolio may purchase securities that provide for the right to
resell them to an issuer, bank or dealer at an agreed upon price or yield within
a specified period prior to the maturity date of such securities. Such a right
to resell is referred to as a "Standby Commitment." Securities may cost more
with Standby Commitments than without them. Standby Commitments will be entered
into solely to facilitate portfolio liquidity. A Standby Commitment may be
exercised before the maturity date of the related Municipal Security if the
Fund's investment adviser revises its evaluation of the creditworthiness of the
underlying security or of the entity issuing the Standby Commitment. The
Portfolio's policy is to enter into Standby Commitments only with issuers, banks
or dealers that are determined by the Fund's investment manager to present
minimal credit risks. If an issuer, bank or dealer should default on its
obligation to repurchase an underlying security, the Portfolio might be unable
to recover all or a portion of any loss sustained from having to sell the
security elsewhere.
The Tax-Exempt Portfolio may purchase high quality Certificates of Participation
in trusts that hold Municipal Securities. A Certificate of Participation gives
the Portfolio an undivided interest in the Municipal Security in the proportion
that the Portfolio's interest bears to the total principal amount of the
Municipal Security. These Certificates of Participation may be variable rate or
fixed rate with remaining maturities of one year or less. A Certificate of
Participation may be backed by an irrevocable letter of credit or guarantee of a
financial institution that satisfies rating agencies as to the credit quality of
the Municipal Security supporting the payment of principal and interest on the
Certificate of Participation. Payments of principal and interest would be
dependent upon the underlying Municipal Security and may be guaranteed under a
letter of credit to the extent of such credit. The quality rating by a rating
service of an issue of Certificates of Participation is based primarily upon the
rating of the Municipal Security held by the trust and the credit rating of the
issuer of any letter of credit and of any other guarantor providing credit
support to the issue. The Fund's investment manager considers these factors as
well as others, such as any quality ratings issued by the rating services
identified above, in reviewing the credit risk presented by a Certificate of
Participation and in determining whether the Certificate of Participation is
appropriate for investment by the Portfolio. It is anticipated by the Fund's
investment manager that, for most publicly offered Certificates of
Participation, there will be a liquid secondary market or there may be demand
features enabling the Portfolio to readily sell its Certificates of
Participation prior to maturity to the issuer or a third party. As to those
instruments with demand features, the Portfolio intends to exercise its right to
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demand payment from the issuer of the demand feature only upon a default under
the terms of the Municipal Security, as needed to provide liquidity to meet
redemptions, or to maintain a high quality investment portfolio.
The Tax-Exempt Portfolio may purchase and sell Municipal Securities on a
when-issued or delayed delivery basis. A when-issued or delayed delivery
transaction arises when securities are bought or sold for future payment and
delivery to secure what is considered to be an advantageous price and yield to
the Portfolio at the time it enters into the transaction. In determining the
maturity of portfolio securities purchased on a when-issued or delayed delivery
basis, the Portfolio will consider them to have been purchased on the date when
it committed itself to the purchase.
A security purchased on a when-issued basis, like all securities held by the
Tax-Exempt Portfolio, is subject to changes in market value based upon changes
in the level of interest rates and investors' perceptions of the
creditworthiness of the issuer. Generally such securities will appreciate in
value when interest rates decline and decrease in value when interest rates
rise. Therefore if, in order to achieve higher interest income, the Portfolio
remains substantially fully invested at the same time that it has purchased
securities on a when-issued basis, there will be a greater possibility that the
market value of the Portfolio's assets will vary from $1.00 per share because
the value of a when-issued security is subject to market fluctuation and no
interest accrues to the purchaser prior to settlement of the transaction. See
"Net Asset Value."
The Portfolio will only make commitments to purchase Municipal Securities on a
when-issued or delayed delivery basis with the intention of actually acquiring
the securities, but the Portfolio reserves the right to sell these securities
before the settlement date if deemed advisable. The sale of these securities may
result in the realization of gains that are not exempt from federal income tax.
In seeking to achieve its investment objective, the Tax-Exempt Portfolio may
invest all or any part of its assets in Municipal Securities that are industrial
development bonds. Moreover, although the Portfolio does not currently intend to
do so on a regular basis, it may invest more than 25% of its assets in Municipal
Securities that are repayable out of revenue streams generated from economically
related projects or facilities, if such investment is deemed necessary or
appropriate by the Portfolio's investment manager. To the extent that the
Portfolio's assets are concentrated in Municipal Securities payable from
revenues on economically related projects and facilities, the Portfolio will be
subject to the risks presented by such projects to a greater extent than it
would be if the Portfolio's assets were not so concentrated.
From time to time, as a defensive measure or when acceptable short-term
Municipal Securities are not available, the Tax-Exempt Portfolio may invest in
taxable "temporary investments" that include: obligations of the U.S.
Government, its agencies or instrumentalities; debt securities rated within the
two highest grades by Moody's or S&P; commercial paper rated in the two highest
grades by either of such rating services; certificates of deposit of domestic
banks with assets of $1 billion or more; and any of the foregoing temporary
investments subject to repurchase agreements. Repurchase agreements are
discussed below. Interest income from temporary investments is taxable to
shareholders as ordinary income. Although the Portfolio is permitted to invest
in taxable securities (limited under normal market conditions to 20% of the
Portfolio's total assets), it is the Portfolio's primary intention to generate
income dividends that are not subject to federal income taxes. See "Dividends
and Taxes." For a description of the ratings, see "Appendix -- Ratings of
Investments" in the Statement of Additional Information.
The Fund. Each Portfolio may invest in repurchase agreements, which are
instruments under which a Portfolio acquires ownership of a security from a
broker-dealer or bank that agrees to repurchase the security at a mutually
agreed upon time and price (which price is higher than the purchase price),
thereby determining the yield during the Portfolio's holding period. Maturity of
the securities subject to repurchase may exceed one year. In the event of a
bankruptcy or other default of a seller of a repurchase agreement, a Portfolio
might have expenses in enforcing its rights, and could experience losses,
including a decline in the value of the underlying securities and loss of
income. A Portfolio will not purchase illiquid securities, including time
deposits and repurchase agreements maturing in more than seven days if, as a
result thereof, more than 10% of such Portfolio's net assets valued at the time
of the transaction would be invested in such securities.
Each Portfolio may invest in instruments having rates of interest that are
adjusted periodically or that "float" continuously according to formulae
intended to minimize fluctuation in values of the instruments ("Variable Rate
Securities"). The interest rate of Variable Rate Securities ordinarily is
determined by reference to or is a percentage of an objective standard such as a
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bank's prime rate, the 90-day U.S. Treasury Bill rate, or the rate of return on
commercial paper or bank certificates of deposit. Generally, the changes in the
interest rate on Variable Rate Securities reduce the fluctuation in the market
value of such securities. Accordingly, as interest rates decrease or increase,
the potential for capital appreciation or depreciation is less than for
fixed-rate obligations. Some Variable Rate Securities ("Variable Rate Demand
Securities") have a demand feature entitling the purchaser to resell the
securities at an amount approximately equal to amortized cost or the principal
amount thereof plus accrued interest. As is the case for other Variable Rate
Securities, the interest rate on Variable Rate Demand Securities varies
according to some objective standard intended to minimize fluctuation in the
values of the instruments. Each Portfolio determines the maturity of Variable
Rate Securities in accordance with Rule 2a-7, which allows the Portfolio to
consider certain of such instruments as having maturities shorter than the
maturity date on the face of the instrument.
A Portfolio may not borrow money except as a temporary measure for extraordinary
or emergency purposes, and then only in an amount up to one-third of the value
of its total assets, in order to meet redemption requests without immediately
selling any portfolio securities. Any such borrowings under this provision will
not be collateralized. No Portfolio will borrow for leverage purposes.
The Fund has adopted for each Portfolio certain investment restrictions that are
presented in the Statement of Additional Information and that, together with the
investment objective and policies of such Portfolio (except for policies
designated as non-fundamental and limited in regard to the Tax-Exempt Portfolio
to the policies in the first and third paragraphs under "Tax-Exempt Portfolio"
above), cannot be changed without approval by holders of a majority of its
outstanding voting shares. As defined in the 1940 Act, this means with respect
to a Portfolio the lesser of the vote of (a) 67% of the shares of such Portfolio
present at a meeting where more than 50% of the outstanding shares of the
Portfolio are present in person or by proxy or (b) more than 50% of the
outstanding shares of the Portfolio.
NET ASSET VALUE
The net asset value per share of each Portfolio is calculated by dividing the
total assets of such Portfolio less its liabilities by the total number of its
shares outstanding. The net asset value per share of each Portfolio is
determined on each day the New York Stock Exchange ("Exchange") is open for
trading, at 11:00 a.m., 1:00 p.m. and 3:00 p.m. Chicago time for the Money
Market Portfolio; at 11:00 a.m., 1:00 p.m., 3:00 p.m. and 8:00 p.m. Chicago time
for Government Securities Portfolio and at 11:00 a.m. and 3:00 p.m. Chicago time
for the Tax-Exempt Portfolio. Fund shares are sold at the net asset value next
determined after an order and payment are received in the form described under
"Purchase of Shares." Orders received by dealers or other financial services
firms prior to the 8:00 p.m. determination of net asset value for the Government
Securities Portfolio and received by KDI, the primary administrator, distributor
and principal underwriter for the Funds, prior to the close of its business day
can be confirmed at the 8:00 p.m. determination of net asset value for that day.
Such transactions are settled by payment of Federal funds in accordance with
procedures established by KDI. Each Portfolio seeks to maintain its net asset
value at $1.00 per share.
Each Portfolio values its portfolio instruments at amortized cost in accordance
with Rule 2a-7 under the 1940 Act, which means that they are valued at their
acquisition cost (as adjusted for amortization of premium or accretion of
discount) rather than at current market value. Calculations are made to compare
the value of each Portfolio's investments valued at amortized cost with
market-based values. Market-based valuations are obtained by using actual
quotations provided by market makers, estimates of market value, or values
obtained from yield data relating to classes of money market instruments
published by reputable sources at the mean between the bid and asked prices for
the instruments. If a deviation of 1/2 of 1% or more were to occur between a
Portfolio's net asset value per share calculated by reference to market-based
values and the Portfolio's $1.00 per share net asset value, or if there were any
other deviation that the Board of Trustees believed would result in a material
dilution to shareholders or purchasers, the Board of Trustees would promptly
consider what action, if any, should be initiated. In order to value its
investments at amortized cost, the Portfolios purchase only securities with a
maturity of one year or less and maintain a dollar-weighted average portfolio
maturity of 90 days or less. In addition, the Portfolios limit their portfolio
investments to securities that meet the quality and diversification requirements
of Rule 2a-7.
PURCHASE OF SHARES
Shares of each Portfolio of the Fund are sold at net asset value through
selected financial services firms, such as broker-dealers and banks ("firms").
Investors must indicate the Portfolio in which they wish to invest. The Fund has
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established a minimum initial investment for each Portfolio of $1,000 and $100
for subsequent investments, but these minimums may be changed at any time in
management's discretion. Firms offering Fund shares may set higher minimums for
accounts they service and may change such minimums at their discretion.
The Fund seeks to have its Portfolios as fully invested as possible at all times
in order to achieve maximum income. Since each Portfolio will be investing in
instruments that normally require immediate payment in Federal Funds (monies
credited to a bank's account with its regional Federal Reserve Bank), the Fund
has adopted procedures for the convenience of its shareholders and to ensure
that each Portfolio receives investable funds.
Orders for purchase of shares of a Portfolio received by wire transfer in the
form of Federal Funds will be effected at the next determined net asset value.
Shares purchased by wire will receive (i) that day's dividend if effected at or
prior to the 1:00 p.m. Chicago time net asset value determination for the Money
Market and the Government Securities Portfolio and at or prior to the 11:00 a.m.
Chicago time net asset value determination for the Tax-Exempt Portfolio; (ii)
the dividend for the next calendar day if effected at the 3:00 p.m. or 8:00 p.m.
Chicago time net asset value determination provided such payment is received by
3:00 p.m. Chicago time; or (iii) the dividend for the next business day if
effected at the 8:00 p.m. Chicago time net asset value calculation and payment
is received after 3:00 p.m. Chicago time on such date for the Government
Securities Portfolio. Confirmed share purchases that are effective at the 8:00
p.m. Chicago net asset value determination for the Government Securities
Portfolio will receive dividends upon receipt of payment for such transactions
in the form of Federal Funds in accordance with the time provisions immediately
above. Orders for purchase accompanied by a check or other negotiable bank draft
will be accepted and effected as of 3:00 p.m. Chicago time on the next business
day following receipt and such shares will receive the dividend for the next
calendar day following the day the purchase is effected. If an order is
accompanied by a check drawn on a foreign bank, funds must normally be collected
on such check before shares will be purchased. See "Purchase and Redemption of
Shares" in the Statement of Additional Information.
If payment is wired in Federal Funds, the payment should be directed to United
Missouri Bank of Kansas City, N.A. (ABA #101-000-695), 10th and Grand Avenue,
Kansas City, MO 64106 for credit to appropriate Fund bank account (CAT Money
Market Fund 46: 98-0119-980-3; CAT Government Securities Fund 47: 98-0119-983-8;
CAT Tax-Exempt Fund 48: 98-0119-985-4).
Clients of Firms. Firms provide varying arrangements for their clients with
respect to the purchase and redemption of Fund shares and the confirmation
thereof and may arrange with their clients for other investment or
administrative services. Such firms are responsible for the prompt transmission
of purchase and redemption orders. Some firms may establish higher minimum
investment requirements than set forth above. Such firms may independently
establish and charge additional amounts to their clients for their services,
which charges would reduce their clients' yield or return. Firms may also hold
Fund shares in nominee or street name as agent for and on behalf of their
clients. In such instances, the Fund's transfer agent will have no information
with respect to or control over the accounts of specific shareholders. Such
shareholders may obtain access to their accounts and information about their
accounts only from their firm. Certain of these firms may receive compensation
through the Fund's Shareholder Service Agent for record-keeping and other
expenses relating to these nominee accounts. In addition, certain privileges
with respect to the purchase and redemption of shares (such as check writing
redemptions) or the reinvestment of dividends may not be available through such
firms or may only be available subject to certain conditions or limitations.
Some firms may participate in a program allowing them access to their clients'
accounts for servicing including, without limitation, transfers of registration
and dividend payee changes; and may perform functions such as generation of
confirmation statements and disbursement of cash dividends. The prospectus
should be read in connection with such firm's material regarding its fees and
services.
Other Information. The Fund reserves the right to withdraw all or any part of
the offering made by this prospectus or to reject purchase orders, without prior
notice. The Fund also reserves the right at any time to waive or increase the
minimum investment requirements. All orders to purchase shares of a Portfolio
are subject to acceptance by the Fund and are not binding until confirmed or
accepted in writing. Any purchase that would result in total account balances
for a single shareholder in excess of $3 million is subject to prior approval by
the Fund. Share certificates are issued only on request. A $10 service fee will
be charged when a check for the purchase of shares is returned because of
insufficient or uncollected funds or a stop payment order.
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Shareholders should direct their inquiries to the firm from which they received
this prospectus or to Kemper Service Company ("KSvC"), the Fund's "Shareholder
Service Agent," 811 Main Street, Kansas City, Missouri 64105-2005.
REDEMPTION OF SHARES
General. Upon receipt by the Shareholder Service Agent of a request in the form
described below, shares of a Portfolio will be redeemed by the Fund at the next
determined net asset value. If processed at 3:00 p.m. or 8:00 p.m. (for the
Government Securities Portfolio) Chicago time, the shareholder will receive that
day's dividend. A shareholder may use either the regular or expedited redemption
procedures. Shareholders who redeem all their shares of a Portfolio will receive
the net asset value of such shares and all declared but unpaid dividends on such
shares.
If shares of a Portfolio to be redeemed were purchased by check or through
certain Automated Clearing House ("ACH") transactions, the Fund may delay
transmittal of redemption proceeds until it has determined that collected funds
have been received for the purchase of such shares, which will be up to 10 days
from receipt by the Fund of the purchase amount. Shareholders may not use
expedited redemption procedures (wire transfer or Redemption Check) until the
shares being redeemed have been owned for at least 10 days, and shareholders may
not use such procedures to redeem shares held in certificated form. There is no
delay when shares being redeemed were purchased by wiring Federal Funds.
If shares being redeemed were acquired from an exchange of shares of a mutual
fund that were offered subject to a contingent deferred sales charge as
described in the prospectus for that other fund, the redemption of such shares
by the Fund may be subject to a contingent deferred sales charge as explained in
such prospectus.
Shareholders can request the following telephone privileges: expedited wire
transfer redemptions, ACH transactions and exchange transactions for individual
and institutional accounts and pre-authorized telephone redemption transactions
for certain institutional accounts. Shareholders may choose these privileges on
the account application or by contacting the Shareholder Service Agent for
appropriate instructions. Please note that the telephone exchange privilege is
automatic unless the shareholder refuses it on the account application. The Fund
or its agents may be liable for any losses, expenses or costs arising out of
fraudulent or unauthorized telephone requests pursuant to these privileges,
unless the Fund or its agents reasonably believe, based upon reasonable
verification procedures, that the telephone instructions are genuine. The
shareholder will bear the risk of loss, including loss resulting from fraudulent
or unauthorized transactions, as long as the reasonable verification procedures
are followed. The verification procedures include recording instructions,
requiring certain identifying information before acting upon instructions and
sending written confirmations.
Because of the high cost of maintaining small accounts, the Fund reserves the
right to redeem an account that falls below the minimum investment level,
currently $1,000. A shareholder will be notified in writing and will be allowed
60 days to make additional purchases to bring the account value up to the
minimum investment level before the Fund redeems the shareholder account.
Firms provide varying arrangements for their clients to redeem Fund shares. Such
firms may independently establish and charge additional amounts to their clients
for such services.
Regular Redemptions. When shares are held for the account of a shareholder by
the Fund's transfer agent, the shareholder may redeem them by sending a written
request with signatures guaranteed to Kemper Service Company ("KSvC"), P.O. Box
419153, Kansas City, Missouri 64141-6153. When certificates for shares have been
issued, they must be mailed to or deposited with the Shareholder Service Agent,
along with a duly endorsed stock power and accompanied by a written request for
redemption. Redemption requests and a stock power must be endorsed by the
account holder with signatures guaranteed by a commercial bank, trust company,
savings and loan association, federal savings bank, member firm of a national
securities exchange or other eligible financial institution. The redemption
request and stock power must be signed exactly as the account is registered
including any special capacity of the registered owner. Additional documentation
may be requested, and a signature guarantee is normally required, from
institutional and fiduciary account holders, such as corporations, custodians
(e.g., under the Uniform Transfers to Minors Act), executors, administrators,
trustees, or guardians.
Telephone Redemptions. If the proceeds of the redemption are $50,000 or less and
the proceeds are payable to the shareholder of record at the address of record,
normally a telephone request or a written request by any one account holder
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without a signature guarantee is sufficient for redemptions by individual or
joint account holders, and trust, executor and guardian account holders
(excluding custodial accounts for gifts and transfers to minors) provided the
trustee, executor or guardian is named in the account registration. Other
institutional account holders and guardian account holders of custodial accounts
for gifts and transfers to minors may exercise this special privilege of
redeeming shares by telephone request or written request without signature
guarantee subject to the same conditions as individual account holders and
subject to the limitations on liability described under "General" above,
provided that this privilege has been pre-authorized by the institutional
account holder or guardian account holder by written instruction to the
Shareholder Service Agent with signatures guaranteed. Telephone requests may be
made by calling 1-800-231-8568. Shares purchased by check or through certain ACH
transactions may not be redeemed under this privilege of redeeming shares by
telephone request until such shares have been owned for at least 10 days. This
privilege of redeeming shares by telephone request or by written request without
a signature guarantee may not be used to redeem shares held in certificated form
and may not be used if the shareholder's account has had an address change
within 30 days of the redemption request. During periods when it is difficult to
contact the Shareholder Service Agent by telephone, it may be difficult to use
the telephone redemption privilege, although investors can still redeem by mail.
The Fund reserves the right to terminate or modify this privilege at any time.
Expedited Wire Transfer Redemptions. If the account holder has given
authorization for expedited wire redemption to the account holder's brokerage or
bank account, shares can be redeemed and proceeds sent by a federal wire
transfer to a single previously designated account. Requests received by the
Shareholder Service Agent prior to 11:00 a.m. Chicago time will result in shares
being redeemed that day and normally the proceeds will be sent to the designated
account that day. Once authorization is on file, the Shareholder Service Agent
will honor requests by telephone at 1-800-231-8568 or in writing, subject to the
limitations on liability described under "General" above. The Fund is not
responsible for the efficiency of the federal wire system or the account
holder's financial services firm or bank. The Fund currently does not charge the
account holder for wire transfers. The account holder is responsible for any
charges imposed by the account holder's firm or bank. There is a $1,000 wire
redemption minimum. To change the designated account to receive wire redemption
proceeds, send a written request to the Shareholder Service Agent with
signatures guaranteed as described above or contact the firm through which
shares of the Fund were purchased. Shares purchased by check or through certain
ACH transactions may not be redeemed by wire transfer until the shares have been
owned for at least 10 days. Account holders may not use this procedure to redeem
shares held in certificated form. During periods when it is difficult to contact
the Shareholder Service Agent by telephone, it may be difficult to use the
expedited wire transfer redemption privilege. The Fund reserves the right to
terminate or modify this privilege at any time.
Expedited Redemptions by Draft. Upon request, shareholders will be provided with
drafts to be drawn on the Fund ("Redemption Checks"). These Redemption Checks
may be made payable to the order of any person for not more than $5 million.
Shareholders should not write Redemption Checks in an amount less than $250
since a $10 service fee will be charged as described below. When a Redemption
Check is presented for payment, a sufficient number of full and fractional
shares in the shareholder's account will be redeemed as of the next determined
net asset value to cover the amount of the Redemption Check. This will enable
the shareholder to continue earning dividends until the Fund receives the
Redemption Check. A shareholder wishing to use this method of redemption must
complete and file an Account Information Form which is available from the Fund
or firms through which shares were purchased. Redemption Checks should not be
used to close an account since the account normally includes accrued but unpaid
dividends. The Fund reserves the right to terminate or modify this privilege at
any time. This privilege may not be available through some firms that distribute
shares of the Fund. In addition, firms may impose minimum balance requirements
in order to obtain this feature. Firms may also impose fees to investors for
this privilege or establish variations of minimum check amounts if approved by
the Fund.
Unless one signer is authorized on the Account Information Form, Redemption
Checks must be signed by all account holders. Any change in the signature
authorization must be made by written notice to the Shareholder Service Agent.
Shares purchased by check or through certain ACH transactions may not be
redeemed by Redemption Check until the shares have been on the Fund's books for
at least 10 days. Shareholders may not use this procedure to redeem shares held
in certificated form. The Fund reserves the right to terminate or modify this
privilege at any time.
The Fund may refuse to honor Redemption Checks whenever the right of redemption
has been suspended or postponed, or whenever the account is otherwise impaired.
A $10 service fee will be charged when a Redemption Check is presented to redeem
Fund shares in excess of the value of a Fund account or in an amount less than
$250; when a Redemption Check is presented that would require redemption of
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shares that were purchased by check or certain ACH transactions within 10 days;
or when "stop payment" of a Redemption Check is requested.
SPECIAL FEATURES
Certain firms that offer shares of the Fund also provide special redemption
features through charge or debit cards and checks that redeem Fund shares.
Various firms have different charges for their services. Shareholders should
obtain information from their firm with respect to any special redemption
features, applicable charges, minimum balance requirements and special rules of
the cash management program being offered.
Information about the following special features is contained in the Statement
of Additional Information; and further information may be obtained without
charge from KDI: Tax Sheltered Retirement Programs; Systematic Withdrawal
Program; Exchange Privilege and Automated Clearing House Programs.
DIVIDENDS AND TAXES
Dividends are declared daily and paid monthly. Shareholders may select one of
the following ways to receive dividends.
1. Reinvest Dividends at net asset value into additional shares
of the same Portfolio. Dividends are normally reinvested on
the 21st of each month if a business day, otherwise on the
next business day. Dividends will be reinvested unless the
shareholder elects to receive them in cash.
2. Receive Dividends in Cash, if so requested. Checks will be
mailed monthly to the shareholder or any person designated by
the shareholder.
The Fund reinvests dividend checks (and future dividends) in shares of the Fund
if checks are returned as undeliverable. Dividends and other distributions in
the aggregate amount of $10 or less are automatically reinvested in shares of
the Fund unless the shareholder requests that such policy not be applied to the
shareholder's account.
Taxable Portfolios. The Money Market Portfolio and the Government Securities
Portfolio each intend to continue to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code (the "Code") and, if so
qualified, will not be subject to Federal income taxes to the extent its
earnings are distributed. Dividends derived from interest and short-term capital
gains are taxable as ordinary income whether received in cash or reinvested in
additional shares. Long-term capital gains distributions, if any, are taxable as
long-term capital gains regardless of the length of time shareholders have owned
their shares . Dividends from these Portfolios do not qualify for the dividends
received deduction available to corporate shareholders.
Tax-Exempt Portfolio. The Tax-Exempt Portfolio intends to continue to qualify
under the Code as a regulated investment company and, if so qualified, will not
be liable for Federal income taxes to the extent its earnings are distributed.
This Portfolio also intends to meet the requirements of the Code applicable to
regulated investment companies distributing tax-exempt interest dividends and,
accordingly, dividends representing net interest received on Municipal
Securities will not be includable by shareholders in their gross income for
Federal income tax purposes, except to the extent such interest is subject to
the alternative minimum tax as discussed below. Dividends representing taxable
net investment income (such as net interest income from temporary investments in
obligations of the U.S. Government) and net short-term capital gains, if any,
are taxable to shareholders as ordinary income.
Net interest on certain "private activity bonds" issued on or after August 8,
1986 is treated as an item of tax preference and may, therefore, be subject to
both the individual and corporate alternative minimum tax. To the extent
provided by regulations to be issued by the Secretary of the Treasury,
exempt-interest dividends from the Tax-Exempt Portfolio are to be treated as
interest on private activity bonds in proportion to the interest income the
Portfolio receives from private activity bonds, reduced by allowable deductions.
For the 1997 calendar year 17% of the net interest income was derived from
"private activity bonds."
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Exempt-interest dividends, except to the extent of interest from "private
activity bonds," are not treated as a tax-preference item. For a corporate
shareholder, however, such dividends will be included in determining such
corporate shareholder's "adjusted current earnings." Seventy-five percent of the
excess, if any, of "adjusted current earnings" over the corporate shareholder's
other alternative minimum taxable income with certain adjustments will be a
tax-preference item. Corporate shareholders are advised to consult their tax
advisers with respect to alternative minimum tax consequences.
Shareholders will be required to disclose on their Federal income tax returns
the amount of tax-exempt interest earned during the year, including
exempt-interest dividends received from the Tax-Exempt Portfolio.
Individuals whose modified income exceeds a base amount will be subject to
Federal income tax on up to 85% of their Social Security benefits. Modified
income includes adjusted gross income, tax-exempt interest, including
exempt-interest dividends from the Tax-Exempt Portfolio, and 50% of Social
Security benefits.
The tax exemption of dividends from the Tax-Exempt Portfolio for Federal income
tax purposes does not necessarily result in exemption under the income or other
tax laws of any state or local taxing authority. The laws of the several states
and local taxing authorities vary with respect to the taxation of such income
and shareholders of the Portfolios are advised to consult their own tax advisers
as to the status of their accounts under state and local tax laws.
The Fund. Dividends declared in October, November or December to shareholders of
record as of a date in one of those months and paid during the following January
are treated as paid on December 31 of the calendar year in which declared for
Federal income tax purposes. The Fund may adjust its schedule for dividend
reinvestment for the month of December to assist in complying with the reporting
and minimum distribution requirements contained in the Code.
Each Portfolio is required by law to withhold 31% of taxable dividends paid to
certain shareholders who do not furnish a correct taxpayer identification number
(in the case of individuals a social security number) and in certain other
circumstances. Trustees of qualified retirement plans and 403(b)(7) accounts are
required by law to withhold 20% of the taxable portion of any distribution that
is eligible to be "rolled over." The 20% withholding requirement does not apply
to distributions from IRAs or any part of a distribution that is transferred
directly to another qualified retirement plan, 403(b)(7) account, or IRA.
Shareholders should consult their tax advisers regarding the 20% withholding
requirement.
Shareholders normally will receive monthly confirmations of dividends and of
purchase and redemption transactions except that confirmations of dividend
reinvestment for IRAs and other fiduciary accounts for which Investors Fiduciary
Trust Company serves as trustee will be sent quarterly. Firms may provide
varying arrangements with their clients with respect to confirmations. Tax
information will be provided annually. Shareholders are encouraged to retain
copies of their account confirmation statements or year-end statements for tax
reporting purposes. However, those who have incomplete records may obtain
historical account transaction information at a reasonable fee.
INVESTMENT MANAGER AND SHAREHOLDER SERVICES
Investment Manager. Scudder Kemper Investments, Inc. (the "Adviser"), 345 Park
Avenue, New York, New York, is the investment manager of the Fund and provides
the Fund with continuous professional investment supervision. The Adviser is one
of the largest investment managers in the country with more than $200 billion in
assets under management and has been engaged in the management of investment
funds for more than seventy years. Zurich Insurance Company ("Zurich"), a
leading internationally recognized provider of insurance and financial services
in property/casualty and life insurance, reinsurance and structured financial
solutions as well as asset management, owns approximately 70% of the Adviser,
with the balance owned by the Adviser's officers and employees.
Responsibility for overall management of the Fund rests with its Board of
Trustees and officers. Professional investment supervision is provided by the
Adviser. The investment management agreement provides that the Adviser shall act
as the Fund's investment adviser, manage its investments and provide it with
various services and facilities. For the services and facilities furnished to
the Money Market, Government Securities and Tax-Exempt Portfolios, the Fund pays
the Adviser a monthly investment management fee on a graduated basis at 1/12 of
0.22% of the first $500 million of combined average daily net assets of such
Portfolios, 0.20% of the next $500 million, 0.175% of the next $1 billion, 0.16%
of the next $1 billion and 0.15% of combined average daily net assets of such
Portfolios over $3 billion. The Adviser has agreed to waive temporarily its
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management fee and absorb operating expenses of each Portfolio to the extent, if
any, that they exceed the following percentages of average daily net assets of
the Portfolios: Money Market Portfolio (1.00%), Government Securities Portfolio
(1.00%) and Tax-Exempt Portfolio (0.95%). For this purpose, Portfolio operating
expenses do not include taxes, interest, extraordinary expenses, brokerage
commissions or transaction costs. Upon notice to the Fund, the Adviser may at
any time terminate this waiver or absorption of operating expenses. In addition,
from time to time, the Adviser may voluntarily absorb certain additional
operating expenses of the Portfolios. The level of this voluntary expense
absorption shall be in the Adviser's discretion and is in addition to the
Adviser's agreement to absorb temporarily certain operating expenses of the
Portfolios described above. For its services as investment adviser and manager
and for facilities furnished during the fiscal year ended April 30, 1998, the
Adviser received management fees aggregating 0.14%, 0.15% and 0.16% of the
average daily net assets of the Money Market Portfolio, the Government
Securities Portfolio and the Tax-Exempt Portfolio, respectively, which includes
the effect of the fee waiver.
On December 22, 1997, Zurich entered into an agreement with B.A.T Industries
p.l.c. ("B.A.T") pursuant to which the financial services businesses of B.A.T
will be combined with Zurich's businesses (including Zurich's 70% interest in
the adviser) to form a new global insurance and financial services company known
as Zurich Financial Services Group. After the transaction is completed, by way
of a dual holding company structure, current Zurich shareholders will own
approximately 57% of the new organization, with the balance owned by B.A.T's
current shareholders.
The transaction is expected to close in the third quarter of 1998. Upon
consummation of the transaction, each Fund's investment management agreement
with the adviser will be deemed to have been assigned and, therefore, will
terminate. The Board has approved a new investment management agreement with the
adviser, which is substantially identical to the current investment management
agreement, except for the date of execution and termination. The new investment
management agreement is to become effective upon the termination of the current
investment management agreement.
Fund Accounting Agent. Scudder Fund Accounting Corporation ("SFAC"), a
subsidiary of the Adviser, is responsible for determining the daily net asset
value per share of each Portfolio and maintaining all accounting records related
thereto. Currently, SFAC receives no fee for its services; however, subject to
Board approval, at some time in the future SFAC may seek payment for its
services under its agreement with the Fund.
Year 2000 Compliance. Like other mutual funds and financial and business
organizations worldwide, the Fund could be adversely affected if computer
systems on which the Fund relies, which primarily include those used by the
Adviser, its affiliates or other service providers, are unable to process
correctly date-related information on and after January 1, 2000. This risk is
commonly called the Year 2000 Issue. Failure to address successfully the Year
2000 Issue could result in interruptions to and other material adverse effects
on the Fund's business and operations. The Adviser has commenced a review of the
Year 2000 Issue as it may affect the Fund and is taking steps it believes are
reasonably designed to address the Year 2000 Issue, although there can be no
assurances that these steps will be sufficient. In addition, there can be no
assurances that the Year 2000 Issue will not have an adverse effect on the
companies whose securities are held by the Fund or on global markets or
economies generally.
Distributor and Administrator. Pursuant to an administration, shareholder
services and distribution agreement ("distribution agreement"), KDI, 222 South
Riverside Plaza, Chicago, Illinois 60606, an affiliate of the Adviser, serves as
primary administrator, distributor and principal underwriter for the Fund to
provide information and services for existing and potential shareholders. The
distribution agreement provides that KDI shall appoint various financial
services firms to provide a cash management service for their customers or
clients through the Fund. The firms are to provide such office space and
equipment, telephone facilities, personnel and literature distribution as is
necessary or appropriate for providing information and services to the firms'
clients. The Fund has adopted a plan in accordance with Rule 12b-1 of the 1940
Act (the "12b-1 Plan"). This rule regulates the manner in which an investment
company may, directly or indirectly, bear the expenses of distributing its
shares. For its services under the distribution agreement and pursuant to the
12b-1 Plan, KDI receives a distribution services fee, payable monthly, at the
annual rate of 0.60% of average daily net assets from the Money Market and
Government Securities Portfolios and 0.50% of average daily net assets from the
Tax-Exempt Portfolio. The fee is accrued daily as an expense of the Portfolios.
As principal underwriter for the Fund, KDI acts as agent of the Fund in the sale
of its shares.
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KDI has related administration services and selling group agreements ("services
agreements") with various firms to provide cash management and other services
for Fund shareholders. KDI normally pays such firms for services at an annual
rate of 0.60% of average daily net assets of those accounts in the Money Market
and Government Securities Portfolios that they maintain and service and 0.50% of
average daily net assets of those accounts in the Tax-Exempt Portfolio that they
maintain and service. In addition, KDI may, from time to time, from its own
resources pay certain firms additional amounts for such services including,
without limitation, fixed dollar amounts and amounts based upon a percentage of
net assets or increased net assets in those Fund accounts that said firms
maintain and service.
Since the fee payable to KDI under the 12b-1 Plan is based upon percentages of
the average daily net assets of the Portfolios as provided above and not upon
the actual expenditures of KDI, the expenses of KDI, which may include overhead
expense, may be more or less than the fees received by it under the 12b-1 Plan.
For example, during the fiscal year ended April 30, 1998, KDI incurred expenses
under the 12b-1 Plan of approximately $14,389,000, while it received an
aggregate fee under the 12b-1 Plan of $13,029,000 after the expense waiver. If
the 12b-1 Plan is terminated in accordance with its terms, the obligation of the
Fund to make payments to KDI pursuant to the 12b-1 Plan will cease and the Fund
will not be required to make any payments past the termination date. Thus, there
is no legal obligation for the Fund to pay any expenses incurred by KDI in
excess of its fees under the 12b-1 Plan, if for any reason the 12b-1 Plan is
terminated in accordance with its terms. Future fees under the 12b-1 Plan may or
may not be sufficient to reimburse KDI for its cumulative expenses incurred.
KDI also has agreements with banking firms to provide administrative and other
services, except for certain underwriting or distribution services that banks
may be prohibited from providing under the Glass-Steagall Act, for their clients
who wish to invest in the Fund. If the Glass-Steagall Act should prevent banking
firms from acting in any capacity or providing any of the described services,
management will consider what action, if any, is appropriate. Management does
not believe that termination of a relationship with a bank would result in any
material adverse consequences to the Fund. Banks or other financial services
firms may be subject to various state laws regarding the services described
above and may be required to register as dealers pursuant to state law.
Custodian, Transfer Agent and Shareholder Service Agent. Investors Fiduciary
Trust Company ("IFTC"), 801 Pennsylvania Avenue, Kansas City, Missouri 64105, as
custodian, and State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, as sub-custodian, have custody of all securities and cash
of the Fund. They attend to the collection of principal and income, and payment
for and collection of proceeds of securities bought and sold by the Fund. IFTC
also is the Fund's transfer and dividend-paying agent. Pursuant to a services
agreement with IFTC, Kemper Service Company, 811 Main Street, Kansas City,
Missouri 64105, an affiliate of the Adviser, serves as Shareholder Service Agent
of the Fund.
PERFORMANCE
The Fund may advertise several types of performance information including
"yield," "effective yield" and, for the Tax-Exempt Portfolio only, "tax
equivalent yield." Each of these figures is based upon historical earnings and
is not representative of the future performance of a Portfolio. The yield of a
Portfolio refers to the net investment income generated by a hypothetical
investment in the Portfolio over a specific seven-day period. This net
investment income is then annualized, which means that the net investment income
generated during the seven-day period is assumed to be generated each week over
an annual period and is shown as a percentage of the investment. The effective
yield is calculated similarly, but the net investment income earned by the
investment is assumed to be compounded weekly when annualized. The effective
yield will be slightly higher than the yield due to this compounding effect. Tax
equivalent yield is the yield that a taxable investment must generate in order
to equal the Tax-Exempt Portfolio's yield for an investor in a stated Federal
income tax bracket (normally assumed to be the maximum tax rate). Tax equivalent
yield is based upon, and will be higher than, the portion of the Tax-Exempt
Portfolio's yield that is tax-exempt.
The performance of a Portfolio may be compared to that of other money market
mutual funds or mutual fund indexes as reported by independent mutual fund
reporting services such as Lipper Analytical Services, Inc. A Portfolio's
performance and its relative size may be compared to other money market mutual
funds as reported by IBC/Financial Data, Inc.(R) or Money Market Insight(R),
reporting services on money market funds. Investors may want to compare a
Portfolio's performance to that of various bank products as reported by BANK
RATE MONITOR(TM), a financial reporting service that weekly publishes average
rates of bank and thrift institution money market deposit accounts and interest
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bearing checking accounts or various certificate of deposit indexes. The
performance of a Portfolio also may be compared to that of U.S. Treasury bills
and notes. Certain of these alternative investments may offer fixed rates of
return and guaranteed principal and may be insured. In addition, investors may
want to compare a Portfolio's performance to the Consumer Price Index either
directly or by calculating its "real rate of return," which is adjusted for the
effects of inflation.
Information may be quoted from publications such as Morningstar, Inc., The Wall
Street Journal, Money Magazine, Forbes, Barron's, Fortune, The Chicago Tribune,
USA Today, Institutional Investor and Registered Representative. The Fund may
depict the historical performance of the securities in which a Portfolio may
invest over periods reflecting a variety of market or economic conditions either
alone or in comparison with alternative investments, performance indexes of
those investments or economic indicators. The Fund may also describe its
portfolio holdings and depict its size or relative size compared to other mutual
funds, the number and make-up of its shareholder base and other descriptive
factors concerning the Fund.
Each Portfolio's yield will fluctuate. Shares of the Fund are not insured.
Additional information concerning a Portfolio's performance appears in the
Statement of Additional Information.
CAPITAL STRUCTURE
The Fund is an open-end, diversified, management investment company, organized
as a business trust under the laws of Massachusetts on September 7, 1989. The
Fund may issue an unlimited number of shares of beneficial interest in one or
more series ("Portfolios"), all having no par value, which may be divided by the
Board of Trustees into classes of shares, subject to compliance with the
Securities and Exchange Commission regulations permitting the creation of
separate classes of shares. The Fund's shares are not currently divided into
classes. While only shares of the three previously described Portfolios are
presently being offered, the Board of Trustees may authorize the issuance of
additional Portfolios if deemed desirable. Since the Fund offers multiple
Portfolios, it is known as a "series company." Shares of each Portfolio have
equal noncumulative voting rights and equal rights with respect to dividends,
assets and liquidation of such Portfolio subject to any preferences, rights or
privileges of any classes of shares within the Portfolio. Generally, each class
of shares issued by a particular Portfolio would differ as to the allocation of
certain expenses of the Portfolio, such as distribution and administrative
expenses, permitting, among other things, different levels of services or
methods of distribution among various classes. Shares are fully paid and
nonassessable when issued, are transferable without restriction and have no
preemptive or conversion rights. As of August 7, 1998, Roney & Co. owned more
than 25% of the outstanding shares of the Government Securities and Tax-Exempt
Portfolios. The Fund is not required to hold annual shareholders' meetings and
does not intend to do so. However, it will hold special meetings as required or
deemed desirable for such purposes as electing trustees, changing fundamental
policies or approving an investment management agreement. Subject to the
Agreement and Declaration of Trust of the Fund, shareholders may remove
trustees. Shareholders will vote by Portfolio and not in the aggregate or by
class except when voting in the aggregate is required under the Investment
Company Act of 1940, such as for the election of trustees, or when the Board of
Trustees determines that voting by class is appropriate.
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STATEMENT OF ADDITIONAL INFORMATION
September 1, 1998
CASH ACCOUNT TRUST
222 South Riverside Plaza, Chicago, Illinois 60606
1-800-231-8568
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectus of Cash Account Trust (the "Fund") dated
September 1, 1998. The prospectus may be obtained without charge from the Fund.
TABLE OF CONTENTS
INVESTMENT RESTRICTIONS........................................................2
MUNICIPAL SECURITIES...........................................................4
INVESTMENT MANAGER AND SHAREHOLDER SERVICES....................................5
PORTFOLIO TRANSACTIONS.........................................................8
PURCHASE AND REDEMPTION OF SHARES..............................................9
DIVIDENDS, NET ASSET VALUE AND TAXES...........................................9
PERFORMANCE...................................................................10
OFFICERS AND TRUSTEES.........................................................13
SPECIAL FEATURES..............................................................15
SHAREHOLDER RIGHTS............................................................17
APPENDIX -- RATINGS OF INVESTMENTS............................................18
The financial statements appearing in the Fund's 1998 Annual Report to
Shareholders are incorporated herein by reference. The Fund's Annual Report
accompanies this Statement of Additional Information.
<PAGE>
INVESTMENT RESTRICTIONS
The Fund has adopted for the Money Market Portfolio, the Government Securities
Portfolio and the Tax-Exempt Portfolio certain investment restrictions which,
together with the investment objective and policies of each Portfolio, cannot be
changed for a Portfolio without approval by holders of a majority of its
outstanding voting shares. As defined in the Investment Company Act of 1940 (the
"1940 Act"), this means the lesser of the vote of (a) 67% of the shares of the
Portfolio present at a meeting where more than 50% of the outstanding shares are
present in person or by proxy or (b) more than 50% of the outstanding shares of
the Portfolio.
The Money Market Portfolio and the Government Securities Portfolio individually
may not:
(1) Purchase securities of any issuer (other than obligations of,
or guaranteed by, the United States Government, its agencies
or instrumentalities) if, as a result, more than 5% of the
value of the Portfolio's assets would be invested in
securities of that issuer.
(2) Purchase more than 10% of any class of securities of any
issuer. All debt securities and all preferred stocks are each
considered as one class.
(3) Make loans to others (except through the purchase of debt
obligations or repurchase agreements in accordance with its
investment objective and policies).
(4) Borrow money except as a temporary measure for extraordinary
or emergency purposes and then only in an amount up to
one-third of the value of its total assets, in order to meet
redemption requests without immediately selling any money
market instruments (any such borrowings under this section
will not be collateralized). If, for any reason, the current
value of the Portfolio's total assets falls below an amount
equal to three times the amount of its indebtedness from money
borrowed, the Portfolio will, within three days (not including
Sundays and holidays), reduce its indebtedness to the extent
necessary.
The Portfolio will not borrow for leverage purposes.
(5) Make short sales of securities, or purchase any securities on
margin except to obtain such short-term credits as may be
necessary for the clearance of transactions.
(6) Write, purchase or sell puts, calls or combinations thereof.
(7) Purchase or retain the securities of any issuer if any of the
officers, trustees or directors of the Fund or its investment
adviser owns beneficially more than 1/2 of 1% of the
securities of such issuer and together own more than 5% of the
securities of such issuer.
(8) Invest for the purpose of exercising control or management
of another issuer.
(9) Invest in commodities or commodity futures contracts or in
real estate (or real estate limited partnerships), although it
may invest in securities which are secured by real estate and
securities of issuers which invest or deal in real estate.
(10) Invest in interests in oil, gas or other mineral exploration
or development programs or leases, although it may invest in
the securities of issuers which invest in or sponsor such
programs.
(11) Underwrite securities issued by others except to the extent
the Portfolio may be deemed to be an underwriter, under the
federal securities laws, in connection with the disposition of
portfolio securities.
(12) Issue senior securities as defined in the Investment Company
Act of 1940.
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Additionally, the Money Market Portfolio may not:
(13) Concentrate 25% or more of the value of the Portfolio's assets
in any one industry; provided, however, that (a) the Portfolio
reserves freedom of action to invest up to 100% of its assets
in obligations of, or guaranteed by, the United States
Government, its agencies or instrumentalities in accordance
with its investment objective and policies and (b) the
Portfolio will invest at least 25% of its assets in
obligations issued by banks in accordance with its investment
objective and policies. However, the Portfolio may, in the
discretion of its investment adviser, invest less than 25% of
its assets in obligations issued by banks whenever the
Portfolio assumes a temporary defensive posture.
The Tax-Exempt Portfolio may not:
(1) Purchase securities if as a result of such purchase more than
25% of the Portfolio's total assets would be invested in any
industry or in any one state. Municipal Securities and
obligations of, or guaranteed by, the U.S. Government, its
agencies or instrumentalities are not considered an industry
for purposes of this restriction.
(2) Purchase securities of any issuer (other than obligations of,
or guaranteed by, the U.S. Government, its agencies or
instrumentalities) if as a result more than 5% of the value of
the Portfolio's assets would be invested in the securities of
such issuer. For purposes of this limitation, the Portfolio
will regard the entity that has the primary responsibility for
the payment of interest and principal as the issuer.
(3) Make loans to others (except through the purchase of debt
obligations or repurchase agreements in accordance with its
investment objective and policies).
(4) Borrow money except as a temporary measure for extraordinary
or emergency purposes and then only in an amount up to
one-third of the value of its total assets, in order to meet
redemption requests without immediately selling any money
market instruments (any such borrowings under this section
will not be collateralized). If, for any reason, the current
value of the Portfolio's total assets falls below an amount
equal to three times the amount of its indebtedness from money
borrowed, the Portfolio will, within three days (not including
Sundays and holidays), reduce its indebtedness to the extent
necessary.
The Portfolio will not borrow for leverage purposes.
(5) Make short sales of securities or purchase securities on
margin, except to obtain such short-term credits as may be
necessary for the clearance of transactions.
(6) Write, purchase or sell puts, calls or combinations thereof,
although the Portfolio may purchase Municipal Securities
subject to Standby Commitments in accordance with its
investment objective and policies.
(7) Purchase or retain the securities of any issuer if any of the
officers, trustees or directors of the Fund or its investment
adviser owns beneficially more than 1/2 of 1% of the
securities of such issuer and together own more than 5% of the
securities of such issuer.
(8) Invest for the purpose of exercising control or management
of another issuer.
(9) Invest in commodities or commodity futures contracts or in
real estate (or real estate limited partnerships) except that
the Portfolio may invest in Municipal Securities secured by
real estate or interests therein.
(10) Invest in interests in oil, gas or other mineral exploration
or development programs or leases, although it may invest in
Municipal Securities of issuers which invest in or sponsor
such programs or leases.
(11) Underwrite securities issued by others except to the extent
the Portfolio may be deemed to be an underwriter, under the
federal securities laws, in connection with the disposition of
portfolio securities.
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(12) Issue senior securities as defined in the Investment Company
Act of 1940.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values or net assets will not be considered a violation. The
Portfolios did not borrow in the latest fiscal period and have no present
intention of borrowing during the coming year as permitted for each Portfolio by
investment restriction number 4. In any event, borrowings would only be made as
permitted by such restrictions. The Tax-Exempt Portfolio may invest more than
25% of its total assets in industrial development bonds. The Money Market
Portfolio and the Government Securities Portfolio of the Fund, as a
non-fundamental policy that may be changed without shareholder vote,
individually may not:
(i) Purchase securities of other investment companies,
except in connection with a merger, consolidation,
reorganization or acquisition of assets.
In addition, the Tax-Exempt Portfolio of the Fund, as a non-fundamental policy
that may be changed without shareholder vote, may not:
(i) Purchase securities of other investment companies,
except in connection with a merger, consolidation,
reorganization or acquisition of assets.
MUNICIPAL SECURITIES
Municipal Securities which the Tax-Exempt Portfolio may purchase include,
without limitation, debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities such
as airports, bridges, highways, housing, hospitals, mass transportation, public
utilities, schools, streets, and water and sewer works. Other public purposes
for which Municipal Securities may be issued include refunding outstanding
obligations, obtaining funds for general operating expenses and obtaining funds
to loan to other public institutions and facilities.
Municipal Securities, such as industrial development bonds, are issued by or on
behalf of public authorities to obtain funds for purposes including privately
operated airports, housing, conventions, trade shows, ports, sports, parking or
pollution control facilities or for facilities for water, gas, electricity or
sewage and solid waste disposal. Such obligations, which may include lease
arrangements, are included within the term Municipal Securities if the interest
paid thereon qualifies as exempt from federal income tax. Other types of
industrial development bonds, the proceeds of which are used for the
construction, equipment, repair or improvement of privately operated industrial
or commercial facilities, may constitute Municipal Securities, although current
Federal tax laws place substantial limitations on the size of such issues.
Municipal Securities generally are classified as "general obligation" or
"revenue." General obligation notes are secured by the issuer's pledge of its
full credit and taxing power for the payment of principal and interest. Revenue
notes are payable only from the revenues derived from a particular facility or
class of facilities or, in some cases, from the proceeds of a special excise or
other specific revenue source. Industrial development bonds that are Municipal
Securities are in most cases revenue bonds and generally do not constitute the
pledge of the credit of the issuer of such bonds.
Examples of Municipal Securities that are issued with original maturities of one
year or less are short-term tax anticipation notes, bond anticipation notes,
revenue anticipation notes, construction loan notes, pre-refunded municipal
bonds, warrants and tax-free commercial paper.
Tax anticipation notes typically are sold to finance working capital needs of
municipalities in anticipation of receiving property taxes on a future date.
Bond anticipation notes are sold on an interim basis in anticipation of a
municipality issuing a longer term bond in the future. Revenue anticipation
notes are issued in expectation of receipt of other types of revenue such as
those available under the Federal Revenue Sharing Program. Construction loan
notes are instruments insured by the Federal Housing Administration with
permanent financing by "Fannie Mae" (the Federal National Mortgage Association)
or "Ginnie Mae" (the Government National Mortgage Association) at the end of the
project construction period. Pre-refunded municipal bonds are bonds which are
not yet refundable, but for which securities have been placed in escrow to
refund an original municipal bond issue when it becomes refundable. Tax-free
commercial paper is an unsecured promissory obligation issued or guaranteed by a
municipal issuer. The Tax-Exempt Portfolio may purchase other Municipal
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Securities similar to the foregoing, which are or may become available,
including securities issued to pre-refund other outstanding obligations of
municipal issuers.
The Federal bankruptcy statutes relating to the adjustments of debts of
political subdivisions and authorities of states of the United States provide
that, in certain circumstances, such subdivisions or authorities may be
authorized to initiate bankruptcy proceedings without prior notice to or consent
of creditors, which proceedings could result in material adverse changes in the
rights of holders of obligations issued by such subdivisions or authorities.
Litigation challenging the validity under state constitutions of present systems
of financing public education has been initiated or adjudicated in a number of
states and legislation has been introduced to effect changes in public school
finances in some states. In other instances, there has been litigation
challenging the issuance of pollution control revenue bonds or the validity of
their issuance under state or Federal law that ultimately could affect the
validity of those Municipal Securities or the tax-free nature of the interest
thereon.
INVESTMENT MANAGER AND SHAREHOLDER SERVICES
Investment Manager. Scudder Kemper Investments, Inc. (the "Adviser"), 345 Park
Avenue, New York, New York, is the Fund's investment manager. Pursuant to the
investment management agreement, the Adviser acts as the Fund's investment
adviser, manages its investments, administers its business affairs, furnishes
office facilities and equipment, provides clerical and administrative services
and permits any of its officers or employees to serve without compensation as
trustees or officers of the Fund if elected to such positions. The Fund pays the
expenses of its operations, including the fees and expenses of its independent
auditors, counsel, custodian and transfer agent and the cost of share
certificates, reports and notices to shareholders, costs of calculating net
asset value and maintaining all accounting records thereto, brokerage
commissions or transaction costs, taxes, registration fees, the fees and
expenses of qualifying the Fund and its shares for distribution under federal
and state securities laws and membership dues in the Investment Company
Institute or any similar organization. The Fund's expenses generally are
allocated among the Portfolios on the basis of relative net assets at the time
of allocation, except that expenses directly attributable to a particular
Portfolio are charged to that Portfolio.
The investment management agreement provides that the Adviser shall not be
liable for any error of judgment or of law, or for any loss suffered by the Fund
in connection with the matters to which the agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
the Adviser in the performance of its obligations and duties, or by reason of
its reckless disregard of its obligations and duties under the agreement.
The investment management agreement continues in effect from year to year for
each Portfolio subject thereto so long as its continuation is approved at least
annually by (a) a majority vote of the trustees who are not parties to such
agreement or interested persons of any such party except in their capacity as
trustees of the Fund, cast in person at a meeting called for such purpose, and
(b) the shareholders of each Portfolio subject thereto or the Board of Trustees.
If continuation is not approved for a Portfolio, the investment management
agreement nevertheless may continue in effect for any Portfolio for which it is
approved and the Adviser may continue to serve as investment manager for the
Portfolio for which it is not approved to the extent permitted by the Investment
Company Act of 1940. The agreement may be terminated at any time upon 60 days
notice by either party, or by a majority vote of the outstanding shares of a
Portfolio subject thereto with respect to that Portfolio, and will terminate
automatically upon assignment. Additional Portfolios may be subject to different
agreements.
Pursuant to the terms of an agreement, Scudder, Stevens & Clark, Inc.
("Scudder"), and Zurich Insurance Company ("Zurich"), formed a new global
organization by combining Scudder with Zurich Kemper Investments, Inc. ("ZKI"),
a former subsidiary of Zurich and the former investment manager to the Fund and
Scudder changed its name to Scudder Kemper Investments, Inc. As a result of the
transaction, Zurich owns approximately 70% of the Adviser, with the balance
owned by the Adviser's officers and employees. Zurich is a leading
internationally recognized provider of insurance and financial services in
property/casualty and life insurance, reinsurance and structured financial
solutions as well as asset management.
Because the transaction between Scudder and Zurich resulted in the assignment of
the Fund's investment management agreement with ZKI, the agreement was deemed to
be automatically terminated upon consummation of the transaction. In
5
<PAGE>
anticipation of the transaction, however, a new investment management agreement
between the Fund and the Adviser was approved by the Fund's Boards of Trustees
and shareholders. The new investment management agreement was effective as of
December 31, 1997 and will be in effect for an initial term ending on the same
date as would the previous investment management agreement with ZKI.
The Fund's investment management agreement is on substantially similar terms as
the investment management agreement terminated by the transaction, except that
the Adviser is the new investment adviser to the Fund.
On December 22, 1997, Zurich entered into an agreement with B.A.T Industries
p.l.c. ("B.A.T") pursuant to which the financial services businesses of B.A.T
will be combined with Zurich's businesses (including Zurich's 70% interest in
the adviser) to form a new global insurance and financial services company known
as Zurich Financial Services Group. After the transaction is completed, by way
of a dual holding company structure, current Zurich shareholders will own
approximately 57% of the new organization, with the balance owned by B.A.T's
current shareholders.
The transaction is expected to close in the third quarter of 1998. Upon
consummation of the transaction, each Fund's investment management agreement
with the adviser will be deemed to have been assigned and, therefore, will
terminate. The Board has approved a new investment management agreement with the
adviser, which is substantially identical to the current investment management
agreement, except for the date of execution and termination. The new investment
management agreement is to become effective upon the termination of the current
investment management agreement.
For the services and facilities furnished to the Money Market, Government
Securities and Tax-Exempt Portfolios, the Portfolios pay a monthly investment
management fee on a graduated basis at 1/12 of 0.22% of the first $500 million
of combined average daily net assets of such Portfolios, 0.20% of the next $500
million 0.175% of the next $1 billion, 0.16% of the next $1 billion and 0.15% of
combined average daily net assets of such Portfolios over $3 billion. The
Adviser has agreed to reimburse the Fund should all operating expenses of the
Fund, including the investment management fees of the Adviser but excluding
taxes, interest, distribution services fees, extraordinary expenses, brokerage
commissions or transaction costs and any other properly excludable expenses,
exceed the applicable state expense limitations. Currently, there are no state
expense limitations in effect. The investment management fee is computed based
on average daily net assets of the Portfolios and allocated among the Portfolios
based upon the relative net assets of each. Pursuant to the investment
management agreement, the Money Market, Government Securities and Tax-Exempt
Portfolios paid the Adviser fees of $1,888,000, $1,020,000 and $530,,000
respectively, for the fiscal year ended April 30, 1998; $975,000, $483,000 and
$69,000, respectively, for the fiscal year ended April 30, 1997 and $677,000,
$102,000 and $26,000, respectively, for the fiscal year ended April 30, 1996 .
The Adviser has agreed to waive temporarily its management fee and absorb
certain operating expenses of the Portfolios to the extent described in the
prospectus. See "Investment Manager and Shareholder Services" in the prospectus.
If the fee waiver had not been in effect the Adviser would have received
investment management fees from the Money Market, Government Securities and
Tax-Exempt Portfolios of $2,463,000, $1,301,000 and $630,000, respectively, for
the fiscal year ended April 30, 1998, and $1,150,000, $744,000 and $212,000,
respectively, for the fiscal year ended April 30, 1997 and $891,000, $386,000
and $153,000, respectively, for the fiscal year ended April 30, 1996 . The
Adviser waived or absorbed operating expenses for the Money Market, Government
Securities and Tax-Exempt Portfolios of $1,253,000, $281,000 and $100,000,
respectively, for the year ended April 30, 1998; $175,000, $261,000 and
$143,000, respectively, for the fiscal year ended April 30, 1997; and $214,000,
$288,000 and $139,000, respectively, for the fiscal year ended April 30, 1996.
Certain officers or trustees of the Fund are also directors or officers of the
Adviser as indicated under "Officers and Trustees."
Fund Accounting Agent. Scudder Fund Accounting Corporation ("SFAC"), a
subsidiary of the Adviser, is responsible for determining the daily net asset
value per share of the Fund and maintaining all accounting records related
thereto. Currently, SFAC receives no fee for its services to the Fund; however,
subject to Board approval, at some time in the future, SFAC may seek payment for
its services under this agreement.
Distributor and Administrator. Pursuant to an administration, shareholder
services and distribution agreement ("distribution agreement"), Kemper
Distributors, Inc. ("KDI") serves as primary administrator and principal
underwriter for the Fund to provide information and services for existing and
potential shareholders. The distribution agreement provides that KDI shall
6
<PAGE>
appoint various firms to provide cash management services for their customers or
clients through the Fund. The firms are to provide such office space and
equipment, telephone facilities, personnel and literature distribution as is
necessary or appropriate for providing information and services to the firms'
clients. The Fund has adopted a plan in accordance with Rule 12b-1 of the 1940
Act (the "12b-1 Plan"). This rule regulates the manner in which an investment
company may, directly or indirectly, bear the expenses of distributing shares.
For its services under the distribution agreement and pursuant to the 12b-1
Plan, the Fund pays KDI a distribution services fee, payable monthly, at the
annual rate of 0.60% of average daily net assets with respect to the Money
Market and Government Securities Portfolios and 0.50% of average daily net
assets with respect to the Tax-Exempt Portfolio. Expenditures by KDI on behalf
of the Portfolios need not be made on the same basis that such fees are
allocated. The fees are accrued daily as an expense of the Portfolios.
As principal underwriter for the Fund, KDI acts as agent of the Fund in the sale
of its shares. KDI pays all its expenses under the distribution agreement
including, without limitation, services fees to firms. The Fund pays the cost
for the prospectus and shareholder reports to be set in type and printed for
existing shareholders, and KDI pays for the printing and distribution of copies
thereof used in connection with the offering of shares to prospective investors.
KDI also pays for supplementary sales literature and advertising costs.
KDI has related administration services and selling group agreements ("services
agreements") with various firms to provide cash management and other services
for Fund shareholders. Such services and assistance may include, but may not be
limited to, establishing and maintaining shareholder accounts and records,
processing purchase and redemption transactions, providing automatic investment
in Fund shares of client account balances, answering routine inquiries regarding
the Fund, assisting clients in changing account options, designations and
addresses, and such other services as may be agreed upon from time to time and
as may be permitted by applicable statute, rule or regulation. KDI also may
provide some of the above services for the Fund. KDI normally pays such firms
for services at a maximum annual rate of 0.60% of average daily net assets of
those accounts in the Money Market and Government Securities Portfolios that
they maintain and service and 0.50% of average daily net assets of those
accounts in the Tax-Exempt Portfolio that they maintain and service. KDI in its
discretion may pay certain firms additional amounts. During the fiscal year
ended April 30, 1998, the Money Market, Government Securities and Tax-Exempt
Portfolios paid distribution services fees of $7,193,000, $4,158,000 and
$1,678,000, respectively. Of such amounts, KDI remitted pursuant to related
services agreements $13,739,000 as service fees to firms. During the fiscal year
ended April 30, 1998, KDI incurred underwriting, distribution and administrative
expenses in the approximate amounts noted: service fees to firms ($13,739,000);
advertising and literature ($0); prospectus printing ($0); marketing and sales
expenses ($650,000) and other expenses ($0); for a total of $14,389,000. A
portion of the aforesaid marketing, sales and operating expenses could be
considered overhead expense.
The distribution agreement and the 12b-1 Plan continue in effect from year to
year so long as such continuance is approved at least annually by a vote of the
Board of Trustees of the Fund, including the Trustees who are not interested
persons of the Fund and who have no direct or indirect financial interest in the
agreement. The distribution agreement automatically terminates in the event of
its assignment and may be terminated at any time without penalty by the Fund or
by KDI upon 60 days' written notice. Termination of the distribution agreement
by the Fund may be by vote of a majority of the Board of Trustees, or a majority
of the Trustees who are not interested persons of the Fund and who have no
direct or indirect financial interest in the agreement, or a "majority of the
outstanding voting securities" of the Fund as defined under the 1940 Act. The
12b-1 Plan may not be amended to increase the fee to be paid by the Fund without
approval by a majority of the outstanding voting securities of the Fund and all
material amendments must in any event be approved by the Board of Trustees in
the manner described above with respect to the continuation of the 12b-1 Plan.
The 12b-1 Plan may be terminated at any time without penalty by a vote of the
majority of the Trustees who are not interested persons of the Fund and who have
no direct or indirect financial interest in the Plan, or by a vote of the
majority of the outstanding voting securities of the Fund. The Portfolios of the
Fund will vote separately with respect to the 12b-1 Plan.
Custodian, Transfer Agent and Shareholder Service Agent. Investors Fiduciary
Trust Company ("IFTC"), 801 Pennsylvania Avenue, Kansas City, Missouri 64105, as
custodian, and State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, as sub-custodian, have custody of all securities and cash
of the Fund. They attend to the collection of principal and income, and payment
for and collection of proceeds of securities bought and sold by the Fund.
Pursuant to a services agreement with IFTC, Kemper Service Company ("KSvC"), an
affiliate of the Adviser, serves as "Shareholder Service Agent." IFTC receives,
as transfer agent, and pays to KSvC annual account fees of a maximum of $13 per
7
<PAGE>
account plus out-of-pocket expense reimbursement. During the fiscal year ended
April 30, 1998, IFTC remitted shareholder service fees in the amount of
$4,230,000 to KSvC as Shareholder Service Agent.
Independent Auditors and Reports to Shareholders. The Fund's independent
auditors, Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois 60606,
audit and report on the Fund's annual financial statements, review certain
regulatory reports and the Fund's federal income tax return, and perform other
professional accounting, auditing, tax and advisory services when engaged to do
so by the Fund. Shareholders will receive annual audited financial statements
and semi-annual unaudited financial statements.
Legal Counsel. Vedder, Price, Kaufman & Kammholz, 222 North LaSalle Street,
Chicago, Illinois 60601, serves as legal counsel for the Fund.
PORTFOLIO TRANSACTIONS
Portfolio transactions are undertaken principally to pursue the objective of
each Portfolio in relation to movements in the general level of interest rates,
to invest money obtained from the sale of Fund shares, to reinvest proceeds from
maturing portfolio securities and to meet redemptions of Fund shares. This may
increase or decrease the yield of a Portfolio depending upon the Adviser's
ability to correctly time and execute such transactions. Since a Portfolio's
assets are invested in securities with short maturities, its portfolio will turn
over several times a year. Securities with maturities of less than one year are
excluded from required portfolio turnover rate calculations, each Portfolio's
portfolio turnover rate for reporting purposes should generally be zero.
The primary objective of the Adviser in placing orders for the purchase and sale
of securities for a Fund's portfolio is to obtain the most favorable net results
taking into account such factors as price, commission where applicable, size of
order, difficulty of execution and skill required of the executing
broker/dealer. The Adviser seeks to evaluate the overall reasonableness of
brokerage commissions paid (to the extent applicable) through its familiarity
with commissions charged on comparable transactions, as well as by comparing
commissions paid by a Fund to reported commissions paid by others. The Adviser
reviews on a routine basis commission rates, execution and settlement services
performed, making internal and external comparisons.
When it can be done consistently with the policy of obtaining the most favorable
net results, it is the Adviser's practice to place such orders with
broker/dealers who supply research, market and statistical information to a
Fund. The term "research, market and statistical information" includes advice as
to the value of securities: the advisability of investing in, purchasing or
selling securities; the availability of securities or purchasers or sellers of
securities; and analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and the performance of accounts.
The Adviser is authorized when placing portfolio transactions for a Fund to pay
a brokerage commission in excess of that which another broker might charge for
executing the same transaction solely on account of the receipt of research,
market or statistical information. In effecting transactions in over-the-counter
securities, orders are placed with the principal market makers for the security
being traded unless, after exercising care, it appears that more favorable
results are available elsewhere.
In selecting among firms believed to meet the criteria for handling a particular
transaction, the Adviser may give consideration to those firms that have sold or
are selling shares of a Fund managed by the Adviser.
To the maximum extent feasible, it is expected that the Adviser will place
orders for portfolio transactions through Scudder Investor Services, Inc.
("SIS"), a corporation registered as a broker-dealer and a subsidiary of the
Adviser. SIS will place orders on behalf of the Fund with issuers, underwriters
or other brokers and dealers. SIS will not receive any commission, fee or other
remuneration from the Fund for this service.
Although certain research, market and statistical information from
broker/dealers may be useful to a Fund and to the Adviser, it is the opinion of
the Adviser that such information only supplements its own research effort since
the information must still be analyzed, weighed and reviewed by the Adviser's
staff. Such information may be useful to the Adviser in providing services to
clients other than the Fund and not all such information is used by the Adviser
in connection with the Fund. Conversely, such information provided to the
Adviser by broker/dealers through whom other clients of the Adviser effect
securities transactions may be useful to the Adviser in providing services to a
Fund.
8
<PAGE>
The Board members for a Fund review from time to time whether the recapture for
the benefit of a Fund of some portion of the brokerage commissions or similar
fees paid by a Fund on portfolio transactions is legally permissible and
advisable.
Money market instruments are normally purchased in principal transactions
directly from the issuer or from an underwriter or market maker . There usually
are no brokerage commissions paid by the Fund for such purchases. During the
last three fiscal years the Fund paid no portfolio brokerage commissions.
Purchases from underwriters will include a commission or concession paid by the
issuer to the underwriter, and purchases from dealers serving as market makers
will include the spread between the bid and asked prices.
PURCHASE AND REDEMPTION OF SHARES
Shares of a Portfolio are sold at their net asset value next determined after an
order and payment are received in the form described in the Fund's prospectus.
The minimum initial investment is $1,000 and the minimum subsequent investment
is $100 but such minimum amounts may be changed at any time. The Fund may waive
the minimum for purchases by trustees, directors, officers or employees of the
Fund or the Adviser and its affiliates. An investor wishing to open an account
should use the Account Information Form available from the Fund or financial
services firms. Orders for the purchase of shares that are accompanied by a
check drawn on a foreign bank (other than a check drawn on a Canadian bank in
U.S. Dollars) will not be considered in proper form and will not be processed
unless and until the Fund determines that it has received payment of the
proceeds of the check. The time required for such a determination will vary and
cannot be determined in advance.
The Fund may suspend the right of redemption or delay payment more than seven
days (a) during any period when the New York Stock Exchange ("Exchange") is
closed other than customary weekend and holiday closings or during any period in
which trading on the Exchange is restricted, (b) during any period when an
emergency exists as a result of which (i) disposal of a Portfolio's investments
is not reasonably practicable, or (ii) it is not reasonably practicable for the
Fund to determine the value of its net assets, or (c) for such other periods as
the Securities and Exchange Commission may by order permit for the protection of
the Fund's shareholders.
Although it is the Fund's present policy to redeem in cash, if the Board of
Trustees determines that a material adverse effect would be experienced by the
remaining shareholders if payment were made wholly in cash, the Fund will pay
the redemption price in whole or in part by a distribution of portfolio
securities in lieu of cash, in conformity with the applicable rules of the
Securities and Exchange Commission, taking such securities at the same value
used to determine net asset value, and selecting the securities in such manner
as the Board of Trustees deems fair and equitable. If such a distribution
occurred, shareholders receiving securities and selling them could receive less
than the redemption value of such securities and in addition could incur certain
transaction costs. Such a redemption would not be so liquid as a redemption
entirely in cash. The Fund has elected to be governed by Rule 18f-1 under the
1940 Act pursuant to which the Fund is obligated to redeem shares of a Portfolio
solely in cash up to the lesser of $250,000 or 1% of the net assets of the
Portfolio during any 90-day period for any one shareholder of record.
DIVIDENDS, NET ASSET VALUE AND TAXES
Dividends. Dividends are declared daily and paid monthly. Shareholders will
receive dividends in additional shares unless they elect to receive cash.
Dividends will be reinvested monthly in shares of the Portfolio at the net asset
value normally on the 21st day of each month if a business day, otherwise on the
next business day. The Fund will pay shareholders who redeem their entire
accounts all unpaid dividends at the time of the redemption not later than the
next dividend payment date. Upon written request to the Shareholder Service
Agent, a shareholder may elect to have Fund dividends invested without sales
charge in shares of another Kemper Mutual Fund offering this privilege at the
net asset value of such other fund. See "Special Features -- Exchange Privilege"
for a list of such other Kemper Mutual Funds. To use this privilege of investing
Fund dividends in shares of another Kemper Mutual Fund, shareholders must
maintain a minimum account value of $1,000 in this Fund and must maintain a
minimum account value of $1,000 in the fund in which dividends are reinvested.
Each Portfolio calculates its dividends based on its daily net investment
income. For this purpose, the net investment income of the Portfolio consists of
(a) accrued interest income plus or minus amortized discount or premium
(excluding market discount for the Tax-Exempt Portfolio), (b) plus or minus all
short-term realized gains and losses on investments and (c) minus accrued
expenses allocated to the Portfolio. Expenses of the Fund are accrued each day.
While each Portfolio's investments are valued at amortized cost, there will be
9
<PAGE>
no unrealized gains or losses on such investments. However, should the net asset
value of a Portfolio deviate significantly from market value, the Board of
Trustees could decide to value the investments at market value and then
unrealized gains and losses would be included in net investment income above.
Dividends are reinvested monthly and shareholders will receive monthly
confirmations of dividends and of purchase and redemption transactions except
that confirmations of dividend reinvestment for Individual Retirement Accounts
and other fiduciary accounts for which Investors Fiduciary Trust Company acts as
trustee will be sent quarterly.
Net Asset Value. As described in the prospectus, each Portfolio values its
portfolio instruments at amortized cost, which does not take into account
unrealized capital gains or losses. This involves initially valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the instrument. While this method provides
certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Portfolio
would receive if it sold the instrument. Calculations are made to compare the
value of a Portfolio's investments valued at amortized cost with market values.
Market valuations are obtained by using actual quotations provided by market
makers, estimates of market value, or values obtained from yield data relating
to classes of money market instruments published by reputable sources at the
mean between the bid and asked prices for the instruments. If a deviation of 1/2
of 1% or more were to occur between the net asset value per share calculated by
reference to market values and a Portfolio's $1.00 per share net asset value, or
if there were any other deviation that the Board of Trustees of the Fund
believed would result in a material dilution to shareholders or purchasers, the
Board of Trustees would promptly consider what action, if any, should be
initiated. If a Portfolio's net asset value per share (computed using market
values) declined, or were expected to decline, below $1.00 (computed using
amortized cost), the Board of Trustees of the Fund might temporarily reduce or
suspend dividend payments in an effort to maintain the net asset value at $1.00
per share. As a result of such reduction or suspension of dividends or other
action by the Board of Trustees, an investor would receive less income during a
given period than if such a reduction or suspension had not taken place. Such
action could result in investors receiving no dividend for the period during
which they hold their shares and receiving, upon redemption, a price per share
lower than that which they paid. On the other hand, if a Portfolio's net asset
value per share (computed using market values) were to increase, or were
anticipated to increase above $1.00 (computed using amortized cost), the Board
of Trustees of the Fund might supplement dividends in an effort to maintain the
net asset value at $1.00 per share.
Taxes. Interest on indebtedness which is incurred to purchase or carry shares of
a mutual fund portfolio which distributes exempt-interest dividends during the
year is not deductible for Federal income tax purposes. Further, the Tax-Exempt
Portfolio may not be an appropriate investment for persons who are "substantial
users" of facilities financed by industrial development bonds held by the
Tax-Exempt Portfolio or are "related persons" to such users; such persons should
consult their tax advisers before investing in the Tax-Exempt Portfolio.
The "Superfund Act of 1986" (the "Superfund Act") imposes a separate tax on
corporations at a rate of 0.12 percent of the excess of such corporation's
"modified alternative minimum taxable income" over $2 million. A portion of
tax-exempt interest, including exempt-interest dividends from the Tax-Exempt
Portfolio, may be includable in modified alternative minimum taxable income.
Corporate shareholders are advised to consult their tax advisers with respect to
the consequences of the Superfund Act.
PERFORMANCE
As reflected in the prospectus, the historical performance calculation for a
Portfolio may be shown in the form of "yield," "effective yield" and, for the
Tax-Exempt Portfolio only, "tax equivalent yield." These various measures of
performance are described below. The Adviser has agreed to absorb temporarily
certain operating expenses of the Portfolios to the extent described in the
prospectus. Without this expense absorption, the performance results noted
herein would have been lower.
Each Portfolio's yield is computed in accordance with a standardized method
prescribed by rules of the Securities and Exchange Commission. Under that
method, the yield quotation is based on a seven-day period and is computed for
each Portfolio as follows. The first calculation is net investment income per
share, which is accrued interest on portfolio securities, plus or minus
amortized discount or premium (excluding market discount for the Tax-Exempt
Portfolio), less accrued expenses. This number is then divided by the price per
share (expected to remain constant at $1.00) at the beginning of the period
10
<PAGE>
("base period return"). The result is then divided by 7 and multiplied by 365
and the resulting yield figure is carried to the nearest one-hundredth of one
percent. Realized capital gains or losses and unrealized appreciation or
depreciation of investments are not included in the calculation. For the seven
day period ended April 30, 1998, the Money Market Portfolio's yield was 4.61%;
the Government Securities Portfolio's yield was 4.59%; and the Tax-Exempt
Portfolio's yield was 3.20%.
Each Portfolio's effective yield is determined by taking the base period return
(computed as described above) and calculating the effect of assumed compounding.
The formula for the effective yield is: (base period return +1)365/7--1. For the
seven-day period ended April 30, 1998, the Money Market Portfolio's effective
yield was 4.72%; the Government Securities Portfolio's effective yield was
4.70%; and the Tax-Exempt Portfolio's effective yield was 3.25%.
The tax equivalent yield of the Tax-Exempt Portfolio is computed by dividing
that portion of the Portfolio's yield (computed as described above) which is
tax-exempt by (one minus the stated Federal income tax rate) and adding the
product to that portion, if any, of the yield of the Portfolio that is not
tax-exempt. Based upon an assumed marginal Federal income tax rate of 37.1% and
the Tax-Exempt Portfolio's yield computed as described above for the seven-day
period ended April 30, 1998, the Tax-Exempt Portfolio's tax equivalent effective
yield for the period was 5.17%. For additional information concerning tax-exempt
yields, see "Tax-Exempt versus Taxable Yield" below.
Each Portfolio's yield fluctuates, and the publication of an annualized yield
quotation is not a representation as to what an investment in the Portfolio will
actually yield for any given future period. Actual yields will depend not only
on changes in interest rates on money market instruments during the period in
which the investment in the Portfolio is held, but also on such matters as
Portfolio expenses.
Investors have an extensive choice of money market funds and money market
deposit accounts and the information below may be useful to investors who wish
to compare the past performance of the Money Market Portfolio, the Government
Securities Portfolio and the Tax-Exempt Portfolio with that of their
competitors. Past performance cannot be a guarantee of future results.
As indicated in the prospectus (see "Performance"), the performance of the
Fund's Portfolios may be compared to that of other mutual funds tracked by
Lipper Analytical Services, Inc. ("Lipper"). Lipper performance calculations
include the reinvestment of all capital gain and income dividends for the
periods covered by the calculations. A Portfolio's performance also may be
compared to other money market funds as reported by IBC Financial Data, Inc.
Money Fund Report(R) or Money Market Insight(R), reporting services on money
market funds. As reported by IBC, all investment results represent total return
(annualized results for the period net of management fees and expenses) and
one-year investment results would be effective annual yields assuming
reinvestment of dividends.
Lipper and IBC Financial Data, Inc. reported the following results for the Money
Market Portfolio and the Government Securities Portfolio.
<TABLE>
<CAPTION>
Lipper Analytical Services, Inc. IBC Financial Data, Inc.
<S> <C>
Money Market Portfolio's Money Market Average Yield All
Period ended Ranking vs. Money Market Portfolio's Taxable Money Market
4/30/98 Instrument Funds Period Yield Funds
------- ---------------- ------ ----- -----
3 Months 239 out of 310 30 Days ended 4/30/98 4.65% 5.02%
1 Month 236 out of 311 7 Days ended 4/28/98 4.63 5.00
Government Securities Government
Portfolio's Ranking vs. Securities Average Yield All
Period ended U.S. Government Portfolio's Taxable Government
4/30/98 Money Market Funds Period Yield Money Funds
------- ---------------- ------ ----- -----------
3 Months 99 out of 114 30 Days ended 4/30/98 4.58% 4.85%
1 Month 92 out of 115 7 Days ended 4/28/98 4.57 4.82
</TABLE>
11
<PAGE>
The following investment comparisons are based upon information reported by
Lipper and IBC Financial Data, Inc. In the comparison of the Tax-Exempt
Portfolio's performance to the IBC Financial Data, Inc. Average Yield for All
Taxable Money Market Funds and to the Lipper Money Market Instrument Funds
Average, the performance of that Portfolio has been adjusted on a taxable
equivalent basis assuming a marginal Federal tax rate of 37.1% (see "Tax-Exempt
versus Taxable Yield" below for more information concerning taxable equivalent
performance).
<TABLE>
<CAPTION>
Lipper Analytical Services, Inc. IBC Financial Data, Inc.
<S> <C>
Tax Exempt Portfolio's Tax Exempt Average Yield All
Period ended Ranking vs. Tax-Exempt Portfolio's Tax-Free Money
4/30/98 Money Market Funds Period Yield Market Funds
------- ------------------ ------ ----- ------------
3 Months 109 out of 135 30 Days ended 4/30/98 4.75% 5.02%
1 Month 90 out of 135 7 Days ended 4/28/98 3.22 3.47
</TABLE>
<TABLE>
<CAPTION>
Period Tax-Exempt LipperTax-Exempt Tax-Exempt Lipper Period Tax-Exempt Average Yield
ended Portfolio Money Market Portfolio Money ------ Portfolio All Taxable
4/30/98 ---------- Fund Average Taxable Market Taxable Money Market
------- ------------ Equivalent Instrument Equivalent Funds
Basis** Funds Basis** -----
------ Average -----
-------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Month* 0.25% 0.26% 0.40% 0.40% 30 Days ended
4/30/98 4.75% 5.02%
7 Days ended
4/28/98*** 5.12 5.00
</TABLE>
* These results are not annualized.
** Source: Scudder Kemper Investments (not reported in IBC or Lipper).
*** Yield shown for taxable funds is for the 7 days ended 4/28/98.
A Portfolio's performance also may be compared on a before or after-tax basis to
various bank products, including the average rate of bank and thrift institution
money market deposit accounts, interest bearing checking accounts and 6-month
maturity certificates of deposit as reported in the BANK RATE MONITOR National
IndexTM of 100 leading bank and thrift institutions as published by the BANK
RATE MONITORTM, N. Palm Beach, Florida 33408. The rates published by the BANK
RATE MONITOR National IndexTM are averages of the personal account rates offered
on the Wednesday prior to the date of publication by 100 large bank and thrifts
in the top ten Consolidated Standard Metropolitan Statistical Areas. With
respect to money market deposit accounts and interest bearing checking accounts,
account minimums range upward from $2,000 in each institution and compounding
methods vary. Interest bearing checking accounts generally offer unlimited
checkwriting while money market deposit accounts generally restrict the number
of checks that may be written. If more than one rate is offered, the lowest rate
is used. Rates are determined by the financial institution and are subject to
change at any time specified by the institution. Generally, the rates offered
for these products take market conditions and competitive product yields into
consideration when set. Bank products represent a taxable alternative income
producing product. Bank and thrift institution account deposits may be insured.
Shareholder accounts in the Fund are not insured. Bank passbook savings accounts
share some liquidity features with money market mutual fund accounts but they
may not offer all of the features available from a money market mutual fund,
such as checkwriting. Bank passbook savings accounts normally offer a fixed rate
of interest, while the yield of each Portfolio of the Fund fluctuates. Bank
checking accounts normally do not pay interest but share some liquidity features
with money market mutual fund accounts (e.g., the ability to write checks
against the account). Bank certificates of deposit may offer fixed or variable
rates for a set term. (Normally, a variety of terms are available.) Withdrawal
of these deposits prior to maturity normally will be subject to a penalty. In
contrast, shares of a Portfolio are redeemable at the net asset value (normally
$1.00 per share) next determined after a request is received, without charge.
Investors also may want to compare a Portfolio's performance to that of U.S.
Treasury bills or notes because such instruments represent alternative income
producing products. Treasury obligations are issued in selected denominations.
Rates of U.S. Treasury obligations are fixed at the time of issuance and payment
of principal and interest is backed by the full faith and credit of the U.S.
12
<PAGE>
Treasury. The market value of such instruments generally will fluctuate
inversely with interest rates prior to maturity and will equal par value at
maturity. Generally, the values of obligations with shorter maturities will
fluctuate less than those with longer maturities. Each Portfolio's yield will
fluctuate. Also, while each Portfolio seeks to maintain a net asset value per
share of $1.00, there is no assurance that it will be able to do so.
Tax-Exempt versus Taxable Yield. You may want to determine which investment --
tax-exempt or taxable -- will provide you with a higher after-tax return. To
determine the taxable equivalent yield, simply divide the yield from the
tax-exempt investment by the sum of [1 minus your marginal tax rate]. The tables
below are provided for your convenience in making this calculation for selected
tax-exempt yields and taxable income levels. These yields are presented for
purposes of illustration only and are not representative of any yield that the
Tax-Exempt Portfolio may generate. Both tables are based upon current law as to
the 1998 tax rate schedules.
<TABLE>
<CAPTION>
Taxable Equivalent Yield Table for Persons Whose Adjusted Gross Income
is Under $124,500
Taxable Income Your A Tax-Exempt Yield of:
Marginal
Federal Tax 2% 3% 4% 5% 6% 7%
Single Joint Rate Is Equivalent to a Taxable Yield of:
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
$25,350 - $61,400 $42,350 - $102,300 28.0% 2.78 4.17 5.56 6.94 8.33 9.72
---------------------------------------------------------------------------------------------------------------------
Over $61,400 Over $102,300 31.0 2.90 4.35 5.80 7.25 8.70 10.14
</TABLE>
<TABLE>
<CAPTION>
Taxable Equivalent Yield Table for Persons Whose Adjusted Gross Income
is Over $124,500
Taxable Income Your A Tax-Exempt Yield of:
Marginal
Federal Tax 2% 3% 4% 5% 6% 7%
Single Joint Rate Is Equivalent to a Taxable Yield of:
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
$61,400-$128,100 $102,300 - $155,950 31.9% 2.94 4.41 5.87 7.34 8.81 10.28
-----------------------------------------------------------------------------------------------------------------------
$128,100-$278,450 $155,950 - $278,450 37.1 3.18 4.77 6.36 7.95 9.54 11.13
-----------------------------------------------------------------------------------------------------------------------
Over $278,450 Over $278,450 40.8 3.38 5.07 6.76 8.45 10.14 11.82
</TABLE>
* This table assumes a decrease of $3.00 of itemized deductions for each $100
of adjusted gross income over $124,500. For a married couple with adjusted
gross income between $186,800 and $309,300 (single between $124,500 and
$247,000), add 0.7% to the above Marginal Federal Tax Rate for each
personal and dependency exemption. The taxable equivalent yield is the
tax-exempt yield divided by: 100% minus the adjusted tax rate. For example,
if the table tax rate is 37.1% and you are married with no dependents, the
adjusted tax rate is 38.5% (37.1% + 0.7% + 0.7%). For a tax-exempt yield of
6%, the taxable equivalent yield is about 9.8% (6% / (100% - 38.5%)).
OFFICERS AND TRUSTEES
The officers and trustees of the Fund, their birthdates, their principal
occupations and their affiliations, if any, with the Adviser and KDI, are listed
below. All persons named as officers and trustees also serve in similar
capacities for other funds advised by the Adviser. :
DAVID W. BELIN (6/20/28), Trustee, 2000 Financial Center, 7th and Walnut, Des
Moines, Iowa; Member, Belin Lamson McCormick Zumbach Flynn, P.C. (attorneys).
LEWIS A. BURNHAM (1/8/33), Trustee, 16410 Avila Boulevard, Tampa, Florida;
Retired; formerly, Partner, Business Resources Group; formerly, Executive Vice
President, Anchor Glass Container Corporation.
13
<PAGE>
DONALD L. DUNAWAY (3/8/37), Trustee, 7515 Pelican Bay Boulevard, Naples,
Florida; Retired; formerly, Executive Vice President, A.O. Smith Corporation
(diversified manufacturer).
ROBERT B. HOFFMAN (12/11/36), Trustee, 800 North Lindbergh Boulevard, St. Louis,
Missouri; Vice Chairman and Chief Financial Officer, Monsanto Company
(agricultural, pharmaceutical and nutritional/food products); formerly, Vice
President, Head of International Operations, FMC Corporation (manufacturer of
machinery and chemicals).
DONALD R. JONES (1/17/30), Trustee, 182 Old Wick Lane, Inverness, Illinois;
Retired; Director, Motorola, Inc. (manufacturer of electronic equipment and
components); formerly, Executive Vice President and Chief Financial Officer,
Motorola, Inc.
SHIRLEY D. PETERSON (9/3/41), Trustee, 401 Rosemont Avenue, Frederick, Maryland;
President, Hood College; formerly, Partner, Steptoe & Johnson (attorneys); prior
thereto, Commissioner, Internal Revenue Service; prior thereto, Assistant
Attorney General, U.S. Department of Justice; Director, Bethlehem Steel Corp.
DANIEL PIERCE (3/18/34), Trustee*, Two International Place, Boston,
Massachusetts; Managing Director, Adviser.
WILLIAM P. SOMMERS (7/22/33), Trustee, 333 Ravenswood Avenue, Menlo Park,
California; President and Chief Executive Officer, SRI International (research
and development); formerly, Executive Vice President, Iameter (medical
information and educational service provider); prior thereto, Senior Vice
President and Director, Booz, Allen & Hamilton Inc. (management consulting
firm)(retired); Director, Rohr, Inc., Therapeutic Discovery Corp. and Litton
Industries.
EDMOND D. VILLANI (3/4/47), Trustee*, 345 Park Avenue, New York, New York;
President, Chief Executive Officer and
Managing Director, Adviser.
MARK S. CASADY (9/21/60), President*, 345 Park Avenue, New York, New York;
Managing Director, Adviser; formerly, Institutional Sales Manager of an
unaffiliated mutual fund distributor.
PHILIP J. COLLORA (11/15/45), Vice President and Secretary*, 222 South Riverside
Plaza, Chicago, Illinois; Senior Vice President and Assistant Secretary,
Adviser.
THOMAS W. LITTAUER (4/26/55), Vice President*, Two International Place, Boston,
Massachusetts; Managing Director, Adviser; formerly, Head of Broker Dealer
Division of an unaffiliated investment management firm during 1997; prior
thereto, President of Client Management Services of an unaffiliated investment
management firm from 1991 to 1996.
ANN M. McCREARY (11/6/56), Vice President*, 345 Park Avenue, New York, New York;
Managing Director, Adviser.
ROBERT C. PECK, JR. (10/1/46), Vice President*, 222 South Riverside Plaza,
Chicago, Illinois; Managing Director, Adviser; formerly, Executive Vice
President and Chief Investment Officer with an unaffiliated investment
management firm from 1988 to June 1997.
KATHRYN L. QUIRK (12/3/52), Vice President*, 345 Park Avenue, New York, New
York; Managing Director, Adviser.
FRANK J. RACHWALSKI, JR. (3/26/45), Vice President*, 222 South Riverside Plaza,
Chicago, Illinois; Managing Director, Adviser.
LINDA J. WONDRACK (9/12/64), Vice President*, Two International Place, Boston,
Massachusetts; Senior Vice President, Adviser.
JOHN R. HEBBLE (6/27/58), Treasurer*, Two International Place, Boston,
Massachusetts; Senior Vice President, Adviser.
CAROLINE PEARSON (4/1/62), Assistant Secretary*, Two International Place,
Boston, Massachusetts; Senior Vice President, Adviser; formerly, Associate,
Dechert Price & Rhoads (law firm) 1989 to 1997.
14
<PAGE>
MAUREEN E. KANE (2/14/62), Assistant Secretary*, Two International Place,
Boston, Massachusetts; Vice President, Adviser; formerly, Assistant Vice
President of an unaffiliated investment management firm; prior thereto,
Associate Staff Attorney of an unaffiliated investment management firm;
Associate, Peabody & Arnold (law firm).
JOHN W. STUEBE (1/7/49), Vice President*(2), 222 South Riverside Plaza, Chicago,
Illinois; Vice President, Adviser and KDI.
ELIZABETH C. WERTH (10/1/47), Assistant Secretary*, 222 South Riverside Plaza,
Chicago, Illinois; Vice President , Adviser and KDI.
* Interested persons as defined in the 1940 Act.
The trustees and officers who are "interested persons" as designated above
receive no compensation from the Fund. The table below shows amounts paid or
accrued to those trustees who are not designated "interested persons" during the
Fund's fiscal year ended April 30, 1998 and the total compensation that Kemper
Managed Funds paid to each trustee during the calendar year 1997.
<TABLE>
<CAPTION>
Aggregate Total Compensation Kemper Managed Funds
Name of Trustee Compensation From Fund Paid to Trustees (2)
- --------------- ---------------------- --------------------
<S> <C> <C>
David W. Belin (1) $4,100 $168,100
Lewis A. Burnham 3,500 117,800
Donald L. Dunaway (1) 4,700 162,700
Robert B. Hoffman 3,500 109,400
Donald R. Jones 3,700 114,200
Shirley D. Peterson 3,300 114,000
William P. Sommers 3,300 109,400
</TABLE>
(1) Includes deferred fees and interest thereon pursuant to deferred
compensation agreements with the Fund. Deferred amounts accrue interest
monthly at a rate approximate to the yield of Zurich Money Funds -- Zurich
Money Market Fund. Total deferred fees and interest accrued for the latest
and all prior fiscal years are $17,200 for Mr. Belin and $15,600 for Mr.
Dunaway from Cash Account Trust.
(2) Includes compensation for service on the Boards of 25 Kemper funds with 43
fund portfolios. Each trustee currently serves as trustee of 26 Kemper
Funds with 48 fund portfolios. Total compensation does not reflect amounts
paid by the Adviser to the trustees for meeting regarding the combination
of Scudder, Stevens & Clark, Inc. and Zurich Kemper Investments, Inc. Such
amounts totaled $21,900, $25,400, $21,900, $17,300, $20,800, $24,200 and
$21,900 for Messrs. Belin, Burnham, Dunaway, Hoffman, Jones, Ms. Peterson
and Mr. Sommers, respectively.
On August 7, 1998 , the officers and trustees of the Fund, as a group, owned
less than 1% of the then outstanding shares of each Portfolio. No person owned
of record 5% or more of the outstanding shares of any class of any Fund, except
the persons indicated in the chart below:
<TABLE>
<CAPTION>
Name and Address % Owned Portfolio
- ---------------- ------- ---------
<S> <C> <C>
Roney & Co1 Griswold 15.79% Money Market
Detroit, MI 48226 59.16 Government Securities
26.62 Tax-Exempt
May Financial Corp. 6.04 Government Securities
8333 Douglas Ave.
Dallas, TX 75225
</TABLE>
SPECIAL FEATURES
Exchange Privilege. Subject to the limitations described below, Class A Shares
(or the equivalent) of the following Kemper Mutual Funds may be exchanged for
15
<PAGE>
each other at their relative net asset values: Kemper Technology Fund, Kemper
Total Return Fund, Kemper Growth Fund, Kemper Small Capitalization Equity Fund,
Kemper Income and Capital Preservation Fund, Kemper Municipal Bond Fund, Kemper
Diversified Income Fund, Kemper High Yield Series, Kemper U.S. Government
Securities Fund, Kemper International Fund, Kemper State Tax-Free Income Series,
Kemper Adjustable Rate U.S. Government Fund, Kemper Blue Chip Fund, Kemper
Global Income Fund, Kemper Target Equity Fund (series are subject to a limited
offering period), Kemper Intermediate Municipal Bond Fund, Kemper Cash Reserves
Fund, Kemper U.S. Mortgage Fund, Kemper Short-Intermediate Government Fund,
Kemper Value Series, Inc., Kemper Value Plus Growth Fund, Kemper Quantitative
Equity Fund, Kemper Horizon Fund, Kemper Europe Fund, Kemper Asian Growth Fund ,
Kemper Aggressive Growth Fund, Kemper Global/International Series, Inc., Kemper
U. S. Growth and Income Fund, Kemper-Dremen Financial Services Fund, Kemper
Value Fund, Kemper Classic Growth Fund and Kemper Global Discovery Fund ("Kemper
Mutual Funds") and certain "Money Market Funds" (Zurich Money Funds, Zurich
Yieldwise Money Fund, Cash Equivalent Fund, Tax-Exempt California Money Market
Fund, Cash Account Trust, Investors Municipal Cash Fund and Investors Cash
Trust). Shares of Money Market Funds and Kemper Cash Reserves Fund that were
acquired by purchase (not including shares acquired by dividend reinvestment)
are subject to the applicable sales charge on exchange. In addition, shares of a
Kemper Mutual Fund in excess of $1,000,000 (except Zurich Yieldwise Money Fund
and Kemper Cash Reserves Fund) acquired by exchange from another Fund may not be
exchanged thereafter until they have been owned for 15 days (the "15-Day Hold
Policy"). For purposes of determining whether the 15-Day Hold Policy applies to
a particular exchange, the value of the shares to be exchanged shall be computed
by aggregating the value of shares being exchanged for all accounts under common
control, discretion or advice, including without limitation accounts
administered by a financial services firm offering market timing, asset
allocation or similar services. Series of Kemper Target Equity Fund will be
available on exchange only during the Offering Period for such series as
described in the prospectus for such series. Cash Equivalent Fund, Tax-Exempt
California Money Market Fund, Cash Account Trust, Investors Municipal Cash Fund
and Investors Cash Trust are available on exchange but only through a financial
services firm having a services agreement with KDI with respect to such funds.
Exchanges may only be made for funds that are available for sale in the
shareholder's state of residence. Currently, Tax-Exempt California Money Market
Fund is available for sale only in California and the portfolios of Investors
Municipal Cash Fund are available for sale in certain states.
The total value of shares being exchanged must at least equal the minimum
investment requirement of the fund into which they are being exchanged.
Exchanges are made based on relative dollar values of the shares involved in the
exchange. There is no service fee for an exchange; however, financial services
firms may charge for their services in expediting exchange transactions.
Exchanges will be effected by redemption of shares of the fund held and purchase
of shares of the other fund. For federal income tax purposes, any such exchange
constitutes a sale upon which a gain or loss may be realized, depending upon
whether the value of the shares being exchanged is more or less than the
shareholder's adjusted cost basis. Shareholders interested in exercising the
exchange privilege may obtain an exchange form and prospectuses of the other
funds from financial services firms or KDI. Exchanges also may be authorized by
telephone if the shareholder has given authorization. Once the authorization is
on file, the Shareholder Service Agent will honor requests by telephone at
1-800-231-8568 or in writing subject to the limitations on liability described
in the prospectus. Any share certificates must be deposited prior to any
exchange of such shares. During periods when it is difficult to contact the
Shareholder Service Agent by telephone, it may be difficult to implement the
telephone exchange privilege. The exchange privilege is not a right and may be
suspended, terminated or modified at any time. Except as otherwise permitted by
applicable regulation, 60 days' prior written notice of any termination or
material change will be provided.
Systematic Withdrawal Program. An owner of $5,000 or more of a Portfolio's
shares may provide for the payment from the owner's account of any requested
dollar amount up to $50,000 to be paid to the owner or the owner's designated
payee monthly, quarterly, semi-annually or annually. The $5,000 minimum account
size is not applicable to Individual Retirement Accounts. Dividend distributions
will be reinvested automatically at net asset value. A sufficient number of full
and fractional shares will be redeemed to make the designated payment. Depending
upon the size of the payments requested, redemptions for the purpose of making
such payments may reduce or even exhaust the account. The program may be amended
on thirty days notice by the Fund and may be terminated at any time by the
shareholder or the Fund. Firms provide varying arrangements for their clients to
redeem Fund shares on a periodic basis. Such firms may independently establish
minimums for such services.
Tax-Sheltered Retirement Programs. The Shareholder Service Agent provides
retirement plan services and documents and KDI can establish your account in any
of the following types of retirement plans:
16
<PAGE>
o Individual Retirement Accounts (IRAs) trusteed by Investors Fiduciary Trust
Company ("IFTC"). This includes Simplified Employee Pension Plan (SEP) IRA
accounts and prototype documents.
o 403(b) Custodial Accounts also trusteed by IFTC. This type of plan is
available to employees of most non-profit organizations.
o Prototype money purchase pension and profit-sharing plans may be adopted by
employers. The maximum contribution per participant is the lesser of 25% of
compensation or $30,000.
Brochures describing the above plans as well as providing model defined benefit
plans, target benefit plans, 457 plans, 401(k) plans and materials for
establishing them are available from the Shareholder Service Agent upon request.
The brochures for plans trusteed by IFTC describe the current fees payable to
IFTC for its services as trustee. Investors should consult with their own tax
advisers before establishing a retirement plan.
Electronic Funds Transfer Programs. For your convenience, the Fund has
established several investment and redemption programs using electronic funds
transfer via the Automated Clearing House (ACH). There is currently no charge by
the Fund for these programs. To use these features, your financial institution
(your employer's financial institution in the case of payroll deposit) must be
affiliated with an Automated Clearing House (ACH). This ACH affiliation permits
the Shareholder Service Agent to electronically transfer money between your bank
account, or employer's payroll bank in the case of Direct Deposit, and your Fund
account. Your bank's crediting policies of these transferred funds may vary.
These features may be amended or terminated at any time by the Fund.
Shareholders should contact Kemper Service Company at 1-800-621-1048 or the
financial services firm through which their account was established for more
information. These programs may not be available through some firms that
distribute shares of the Fund.
SHAREHOLDER RIGHTS
The Fund generally is not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Fund ("Declaration of Trust"),
however, shareholder meetings will be held in connection with the following
matters: (a) the election or removal of trustees if a meeting is called for such
purpose; (b) the adoption of any contract for which shareholder approval is
required by the 1940 Act; (c) any termination of the Fund to the extent and as
provided in the Declaration of Trust; (d) any amendment of the Declaration of
Trust (other than amendments changing the name of the Fund or any Portfolio,
establishing a Portfolio, supplying any omission, curing any ambiguity or
curing, correcting or supplementing any defective or inconsistent provision
thereof); and (e) such additional matters as may be required by law, the
Declaration of Trust, the By-laws of the Fund, or any registration of the Fund
with the Securities and Exchange Commission or any state, or as the trustees may
consider necessary or desirable. The shareholders also would vote upon changes
in fundamental investment objectives, policies or restrictions.
Each trustee serves 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, retires or is removed by a
majority vote of the shares entitled to vote (as described below) or a majority
of the trustees. In accordance with the 1940 Act (a) the Fund will hold a
shareholder meeting for the election of trustees at such time as less than a
majority of the trustees have been elected by shareholders, and (b) if, as a
result of a vacancy in the Board of Trustees, less than two-thirds of the
trustees have been elected by the shareholders, that vacancy will be filled only
by a vote of the shareholders.
Trustees may be removed from office by a vote of the holders of a majority of
the outstanding shares at a meeting called for that purpose, which meeting shall
be held upon the written request of the holders of not less than 10% of the
outstanding shares. Upon the written request of ten or more shareholders who
have been such for at least six months and who hold shares constituting at least
1% of the outstanding shares of the Fund stating that such shareholders wish to
communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a trustee, the
Fund has undertaken to disseminate appropriate materials at the expense of the
requesting shareholders.
The Declaration of Trust provides that the presence at a shareholder meeting in
person or by proxy of at least 30% of the shares entitled to vote on a matter
shall constitute a quorum. Thus, a meeting of shareholders of the Fund could
take place even if less than a majority of the shareholders were represented on
its scheduled date. Shareholders would in such a case be permitted to take
17
<PAGE>
action which does not require a larger vote than a majority of a quorum, such as
the election of trustees and ratification of the selection of auditors. Some
matters requiring a larger vote under the Declaration of Trust, such as
termination or reorganization of the Fund and certain amendments of the
Declaration of Trust, would not be affected by this provision; nor would matters
which under the 1940 Act require the vote of a "majority of the outstanding
voting securities" as defined in the 1940 Act.
The Declaration of Trust specifically authorizes the Board of Trustees to
terminate the Fund (or any Portfolio or class) by notice to the shareholders
without shareholder approval.
Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of the
Fund. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Fund or the trustees. Moreover, the Declaration of Trust provides for
indemnification out of Fund property for all losses and expenses of any
shareholder held personally liable for the obligations of the Fund and the Fund
will be covered by insurance which the trustees consider adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered by the Adviser remote and
not material, since it is limited to circumstances in which a disclaimer is
inoperative and the Fund itself is unable to meet its obligations.
18
<PAGE>
APPENDIX -- RATINGS OF INVESTMENTS
COMMERCIAL PAPER RATINGS
A-1, A-2, Prime-1, Prime-2 and Duff 1, Duff 2 Commercial Paper Ratings
Commercial paper rated by Standard & Poor's Corporation has the following
characteristics: Liquidity ratios are adequate to meet cash requirements.
Long-term senior debt is rated "A" or better. The issuer has access to at least
two additional channels of borrowing. Basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong position
within the industry. The reliability and quality of management are unquestioned.
Relative strength or weakness of the above factors determine whether the
issuer's commercial paper is rated A-1, A-2 or A-3.
The ratings Prime-1 and Prime-2 are the two highest commercial paper ratings
assigned by Moody's Investors Service, Inc. Among the factors considered by them
in assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations. Relative
strength or weakness of the above factors determines whether the issuer's
commercial paper is rated Prime-1, 2 or 3.
The rating Duff-1 is the highest commercial paper rating assigned by Duff &
Phelps Inc. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors that are supported by ample
asset protection. Risk factors are minor. Paper rated Duff-2 is regarded as
having good certainty of timely payment, good access to capital markets and
sound liquidity factors and company fundamentals. Risk factors are small.
MIG-1 and MIG-2 Municipal Notes
Moody's Investors Service, Inc.'s ratings for state and municipal notes and
other short-term loans will be designated Moody's Investment Grade (MIG). This
distinction is in recognition of the differences between short-term credit risk
and long-term risk. Factors affecting the liquidity of the borrower are
uppermost in importance in short-term borrowing, while various factors of the
first importance in bond risk are of lesser importance in the short run. Loans
designated MIG-1 are of the best quality, enjoying strong protection from
established cash flows of funds for their servicing or from established and
broad-based access to the market for refinancing, or both. Loans designated
MIG-2 are of high quality, with margins of protection ample although not so
large as in the preceding group.
STANDARD & POOR'S CORPORATION BOND RATINGS, CORPORATE BONDS
AAA. This is the highest rating assigned by Standard & Poor's Corporation to a
debt obligation and indicates an extremely strong capacity to pay principal and
interest.
AA. Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
MOODY'S INVESTORS SERVICE, INC. BOND RATINGS
Aaa. Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
19
<PAGE>
Aa. Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long term risks appear somewhat larger than in Aaa securities.
DUFF & PHELP'S INC. BOND RATINGS
AAA -- Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA -- High credit quality. Protection factors are strong. Risk is modest but may
vary slightly from time to time because of economic conditions.
20
<PAGE>
CASH ACCOUNT TRUST
PART C.
OTHER INFORMATION
<TABLE>
<CAPTION>
Item 24. Financial Statements and Exhibits
<S> <C>
(a) Financial Statements
(i) Financial Statements and Financial Highlights included in the Annual Report,
for Money Market, Government Securities and Tax-Exempt Portfolios for the fiscal year ended April 30, 1998, are
incorporated herein by reference to the fund's Statement of Additional Information and were filed on June 25, 1998 for
Cash Account Trust (No. 811-05970) pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are incorporated
herein by reference.
(ii) Financial Statements and Financial Highlights included in the Annual Report,
for Money Market, Government Securities and Tax-Exempt Portfolios for the fiscal year ended April 30, 1998, are
incorporated herein by reference to the fund's Statement of Additional Information and were filed on June 25, 1998 for
Cash Account Trust (No. 811-05970) pursuant to Rule 30d-1 under the Investment Company Act of 1940 and are incorporated
herein by reference.
Statements, schedules and historical information other than those listed above have been omitted since
they are either not applicable or are not required.
</TABLE>
(b) Exhibits
99.b1. Amended and Restated Agreement and Declaration of Trust.(1)
99.b2. By-Laws.(1)
99.b3. Inapplicable.
99.b4. Text of Share Certificate.(1)
99.b5. Investment Management Agreement.
99.b6.(a) Form of Administration, Shareholder Services and Distribution
Agreement.
99.b6.(b) Form of Administration Services and Selling Group Agreement.(1)
99.b7. Inapplicable.
99.b8. Custody Agreement.(1)
99.b9.(a) Agency Agreement.(1)
99.b9.(b) Supplement to Agency Agreement.(2)
99.b9.(c) Fund Accounting Agreements.
99.b10. Inapplicable.
99.b11. Report and Consent of Independent Auditors.
99.b12. Inapplicable.
99.b13. Inapplicable.
99.b14. Inapplicable.
99.b15. Form of 12b-1 Plan.
99.b16. Performance Calculations.(1)
99.b24. Power of Attorney.
99.b485.(b) Representation of Counsel (Rule 485(b)).
27. Financial Data Schedule for Government Securities Portfolio.
27. Financial Data Schedule for Money Market Portfolio.
27. Financial Data Schedule for Tax-Exempt Portfolio.
(1) Incorporated herein by reference to Post-Effective Amendment No. 5 to
the Registration Statement of Registrant on Form N-1A filed on or about
July 28, 1995.
(2) Incorporated herein by reference to Post-Effective Amendment No. 6 to
the Registration Statement of Registrant on Form N-1A filed on or about
July 26, 1996.
5
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant
Not applicable.
Item 26. Number of Holders of Securities
As of August 7, 1998, there were 7,267, 611 and 747 holders of record
of the Money Market Portfolio, the Government Securities Portfolio and the
Tax-Exempt Portfolio, respectively.
Item 27. Indemnification
Article VIII of the Registrant's Agreement and Declaration of Trust
(Exhibit 1 hereto, which is incorporated herein by reference) provides in effect
that the Registrant will indemnify its officers and trustees under certain
circumstances. However, in accordance with Section 17(h) and 17(i) of the
Investment Company Act of 1940 and its own terms, said Article of the Agreement
and Declaration of Trust does not protect any person against any liability to
the Registrant or its shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such trustee, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question as to whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
On June 26, 1997, Zurich Insurance Company ("Zurich"), ZKI Holding
Corp. ("ZKIH"), Zurich Kemper Investments, Inc. ("ZKI"), Scudder, Stevens &
Clark, Inc. ("Scudder") and the representatives of the beneficial owners of the
capital stock of Scudder ("Scudder Representatives") entered into a transaction
agreement ("Transaction Agreement") pursuant to which Zurich became the majority
stockholder in Scudder with an approximately 70% interest, and ZKI was combined
with Scudder ("Transaction"). In connection with the trustees' evaluation of the
Transaction, Zurich agreed to indemnify the Registrant and the trustees who were
not interested persons of ZKI or Scudder (the "Independent Trustees") for and
against any liability and expenses based upon any action or omission by the
Independent Trustees in connection with their consideration of and action with
respect to the Transaction. In addition, Scudder has agreed to indemnify the
Registrant and the Independent Trustees for and against any liability and
expenses based upon any misstatements or omissions by Scudder to the Independent
Trustees in connection with their consideration of the Transaction.
Item 28. Business or Other Connections of Investment Adviser
Scudder Kemper Investments, Inc. has stockholders and employees who are
denominated officers but do not as such have corporation-wide responsibilities.
Such persons are not considered officers for the purpose of this Item 28.
<TABLE>
<CAPTION>
Business and Other Connections of Board
Name of Directors of Registrant's Adviser
---- ------------------------------------
<S> <C>
Stephen R. Beckwith Treasurer and Chief Financial Officer, Scudder Kemper Investments, Inc.**
Vice President and Treasurer, Scudder Fund Accounting Corporation*
Director, Scudder Stevens & Clark Corporation**
Director and Chairman, Scudder Defined Contribution Services, Inc.**
6
<PAGE>
Director and President, Scudder Capital Asset Corporation**
Director and President, Scudder Capital Stock Corporation**
Director and President, Scudder Capital Planning Corporation**
Director and President, SS&C Investment Corporation**
Director and President, SIS Investment Corporation**
Director and President, SRV Investment Corporation**
Lynn S. Birdsong Director and Vice President, Scudder Kemper Investments, Inc.**
Director, Scudder, Stevens & Clark (Luxembourg) S.A.#
Laurence W. Cheng Director, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland##
Director, ZKI Holding Corporation xx
Steven Gluckstern Director, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland##
Director, Zurich Holding Company of Americao
Rolf Huppi Director, Chairman of the Board, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland##
Director, Chairman of the Board, Zurich Holding Company of Americao
Director, ZKI Holding Corporation xx
Kathryn L. Quirk Director, Chief Legal Officer, Chief Compliance Officer and Secretary, Scudder Kemper
Investments, Inc.**
Director, Senior Vice President & Assistant Clerk, Scudder Investor Services, Inc.*
Director, Vice President & Secretary, Scudder Fund Accounting Corporation*
Director, Vice President & Secretary, Scudder Realty Holdings Corporation*
Director & Assistant Clerk, Scudder Service Corporation*
Director, SFA, Inc.*
Vice President, Director & Assistant Secretary, Scudder Precious Metals, Inc.***
Director, Scudder, Stevens & Clark Japan, Inc.***
Director, Vice President and Secretary, Scudder, Stevens & Clark of Canada, Ltd.***
Director, Vice President and Secretary, Scudder Canada Investor Services Limited***
Director, Vice President and Secretary, Scudder Realty Advisers, Inc. x
Director and Secretary, Scudder, Stevens & Clark Corporation**
Director and Secretary, Scudder, Stevens & Clark Overseas Corporationoo
Director and Secretary, SFA, Inc.*
Director, Vice President and Secretary, Scudder Defined Contribution Services, Inc.**
Director, Vice President and Secretary, Scudder Capital Asset Corporation**
Director, Vice President and Secretary, Scudder Capital Stock Corporation**
Director, Vice President and Secretary, Scudder Capital Planning Corporation**
Director, Vice President and Secretary, SS&C Investment Corporation**
Director, Vice President and Secretary, SIS Investment Corporation**
Director, Vice President and Secretary, SRV Investment Corporation**
Director, Vice President and Secretary, Scudder Brokerage Services, Inc.*
Director, Korea Bond Fund Management Co., Ltd.+
Markus Rohrbasser Director, Scudder Kemper Investments, Inc.**
Member Corporate Executive Board, Zurich Insurance Company of Switzerland##
President, Director, Chairman of the Board, ZKI Holding Corporation xx
Cornelia M. Small Director , Scudder Kemper Investments, Inc.**
7
<PAGE>
Edmond D. Villani Director, President and Chief Executive Officer, Scudder Kemper Investments, Inc.**
Director, Scudder, Stevens & Clark Japan, Inc.###
President and Director, Scudder, Stevens & Clark Overseas Corporationoo
President and Director, Scudder, Stevens & Clark Corporation**
Director, Scudder Realty Advisors, Inc.x
Director, IBJ Global Investment Management S.A. Luxembourg, Grand-Duchy of Luxembourg
</TABLE>
* Two International Place, Boston, MA
x 333 South Hope Street, Los Angeles, CA
** 345 Park Avenue, New York, NY
# Societe Anonyme, 47, Boulevard Royal, L-2449 Luxembourg, R.C.
Luxembourg B 34.564
*** Toronto, Ontario, Canada
xxx Grand Cayman, Cayman Islands, British West Indies
oo 20-5, Ichibancho, Chiyoda-ku, Tokyo, Japan
### 1-7, Kojimachi, Chiyoda-ku, Tokyo, Japan
xx 222 S. Riverside, Chicago, IL
o Zurich Towers, 1400 American Ln., Schaumburg, IL
+ P.O. Box 309, Upland House, S. Church St., Grand Cayman,
British West Indies
## Mythenquai-2, P.O. Box CH-8022, Zurich, Switzerland
Item 29. Principal Underwriters.
(a)
Kemper Distributors, Inc. acts as principal underwriter of the
Registrant's shares and acts as principal underwriter of the Kemper
Funds.
(b)
Information on the officers and directors of Kemper Distributors, Inc.,
principal underwriter for the Registrant is set forth below. The
principal business address is 222 South Riverside Plaza, Chicago,
Illinois 60606.
<TABLE>
<CAPTION>
(1) (2) (3)
<S> <C> <C>
Position and Offices with Positions and
Name Kemper Distributors, Inc. Offices with Registrant
---- ------------------------- -----------------------
James L. Greenawalt President None
Thomas W. Littauer Director, Chief Executive Officer Vice President
Kathryn L. Quirk Director, Secretary, Chief Legal Vice President
Officer & Vice President
James J. McGovern Chief Financial Officer & Vice None
President
Linda J. Wondrack Vice President & Chief Compliance None
Officer
Paula Gaccione Vice President None
8
<PAGE>
Position and Offices with Positions and
Name Kemper Distributors, Inc. Offices with Registrant
---- ------------------------- -----------------------
Michael E. Harrington Vice President None
Robert A. Rudell Vice President None
William M. Thomas Vice President None
Elizabeth C. Werth Vice President Assistant Secretary
Todd N. Gierke Assistant Treasurer None
Philip J. Collora Assistant Secretary Vice President and
Secretary
Paul J. Elmlinger Assistant Secretary None
Diane E. Ratekin Assistant Secretary None
Daniel Pierce Director, Chairman Trustee
Mark S. Casady Director, Vice Chairman President
Stephen R. Beckwith Director None
</TABLE>
(c) Not applicable
Item 30. Location of Accounts and Records
Accounts, books and other documents are maintained at the offices of
the Registrant, the offices of Registrant's investment adviser, Scudder Kemper
Investments, Inc., 222 South Riverside Plaza, Chicago, Illinois 60606, at the
offices of the Registrant's principal underwriter, Kemper Distributors, Inc.,
222 South Riverside Plaza, Chicago, Illinois 60606 or, in the case of records
concerning custodial functions, at the offices of the custodian, Investors
Fiduciary Trust Company ("IFTC"), 801 Pennsylvania Avenue, Kansas City, Missouri
64105 or, in the case of records concerning transfer agency functions, at the
offices of IFTC and of the shareholder service agent, Kemper Service Company,
811 Main Street, Kansas City, Missouri 64105.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) The Registrant undertakes to furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
9
<PAGE>
INDEX TO EXHIBITS
Exhibits
99.b1. Amended and Restated Agreement and Declaration of Trust.(1)
99.b2. By-Laws.(1)
99.b3. Inapplicable.
99.b4. Text of Share Certificate.(1)
99.b5. Investment Management Agreement.
99.b6.(a) Form of Administration, Shareholder Services and Distribution
Agreement.
99.b6.(b) Form of Administration Services and Selling Group Agreement.(1)
99.b7. Inapplicable.
99.b8. Custody Agreement.(1)
99.b9.(a) Agency Agreement.(1)
99.b9.(b) Supplement to Agency Agreement.(2)
99.b9.(c) Fund Accounting Agreements.
99.b10. Inapplicable.
99.b11. Report and Consent of Independent Auditors.
99.b12. Inapplicable.
99.b13. Inapplicable.
99.b14. Inapplicable.
99.b15. Form of 12b-1 Plan.
99.b16. Performance Calculations.(1)
99.b24. Power of Attorney.
99.b485.(b) Representation of Counsel (Rule 485(b)).
27. Financial Data Schedule for Government Securities Portfolio.
27. Financial Data Schedule for Money Market Portfolio.
27. Financial Data Schedule for Tax-Exempt Portfolio.
(1) Incorporated herein by reference to Post-Effective Amendment No. 5 to
the Registration Statement of Registrant on Form N-1A filed on or about
July 28, 1995.
(2) Incorporated herein by reference to Post-Effective Amendment No. 6 to
the Registration Statement of Registrant on Form N-1A filed on or about
July 26, 1996.
10
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chicago and State of Illinois, on the 28th day
of August, 1998.
Kemper Cash Account Trust
By /s/Mark S. Casady
---------------------------
Mark S. Casady, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on August 27, 1998 on behalf of the
following persons in the capacities indicated.
<TABLE>
<S> <C> <C>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
/s/Daniel Pierce August 28, 1998
- --------------------------------------
Daniel Pierce* Chairman and Trustee
/s/David W. Belin August 28, 1998
- --------------------------------------
David W. Belin* Trustee
/s/Lewis A. Burnham August 28, 1998
- --------------------------------------
Lewis A. Burnham* Trustee
/s/Donald L. Dunaway August 28, 1998
- --------------------------------------
Donald L. Dunaway* Trustee
/s/Robert B. Hoffman August 28, 1998
- --------------------------------------
Robert B. Hoffman* Trustee
/s/Donald R. Jones August 28, 1998
- --------------------------------------
Donald R. Jones* Trustee
/s/ Shirley D. Peterson August 28, 1998
- --------------------------------------
Shirley D. Peterson* Trustee
/s/ William P. Sommers August 28, 1998
- --------------------------------------
William P. Sommers* Trustee
<PAGE>
SIGNATURE TITLE DATE
- --------- ----- ----
/s/Edmond D. Villani August 28, 1998
- --------------------------------------
Edmond D. Villani* Trustee
/s/John R. Hebble August 28, 1998
- --------------------------------------
John R. Hebble Treasurer (Principal Financial and
Accounting Officer)
</TABLE>
*By: /s/Philip J. Collora
-----------------------------------
Philip J. Collora**
** Philip J. Collora signs this document
pursuant to powers of attorney filed
herewith.
2
<PAGE>
Exhibit 99.b5.
INVESTMENT MANAGEMENT AGREEMENT
Cash Account Trust
222 South Riverside Plaza
Chicago, Illinois 60606
December 31, 1997
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Money Market Portfolio
Government Securities Portfolio
Tax-Exempt Portfolio
Ladies and Gentlemen:
CASH ACCOUNT TRUST (the "Trust") has been established as a Massachusetts
business trust to engage in the business of an investment company. Pursuant to
the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees is authorized to issue the Trust's shares
of beneficial interest (the "Shares"), in separate series, or funds. The Board
of Trustees has authorized the Money Market Portfolio, the Government Securities
Portfolio and the Tax-Exempt Portfolio each a "Fund" and collectively, the
"Funds". Series may be abolished and dissolved, and additional series
established, from time to time by action of the Trustees.
The Trust, on behalf of the Funds, has selected you to act as the investment
manager of the Funds and to provide certain other services, as more fully set
forth below, and you have indicated that you are willing to act as such
investment manager and to perform such services under the terms and conditions
hereinafter set forth. In the event the Trust establishes one or more additional
series with respect to which it desires to retain you to render the services
described hereunder, it shall notify you in writing. If you are willing to
render such services, you shall notify the Trust in writing, whereupon such
series shall become a Fund hereunder. Accordingly, the Trust on behalf of the
Funds agrees with you as follows:
I. Delivery of Documents. The Trust engages in the business of
investing and reinvesting the assets of each Fund in the manner and in
accordance with the investment objectives, policies and restrictions specified
in the currently effective Prospectus (the "Prospectus") and Statement of
Additional Information (the "SAI") relating to each Fund included in the Trust's
Registration Statement on Form N-1A, as amended from time to time, (the
"Registration Statement") filed by the Trust under the Investment Company Act of
1940, as amended, (the "1940 Act") and the Securities Act of 1933, as amended.
Copies of the documents referred to in the preceding sentence have been
furnished to you by the Trust. The Trust has also furnished you with copies
properly certified or authenticated of each of the following additional
documents related to the Trust and the Funds:
A. The Declaration, as amended to date.
A. By-Laws of the Trust as in effect on the date hereof (the "By- Laws").
A. Resolutions of the Trustees of the Trust and the shareholders of each
Fund selecting you as investment manager and approving the form of this
Agreement.
A. Establishment and Designation of Series of Shares of Beneficial
Interest relating to the Funds, as applicable.
<PAGE>
The Trust will furnish you from time to time with copies, properly certified or
authenticated, of all amendments of or supplements, if any, to the foregoing,
including the Prospectus, the SAI and the Registration Statement.
I. Portfolio Management Services. As manager of the assets of the
Funds, you shall provide continuing investment management of the assets of the
Funds in accordance with the investment objectives, policies and restrictions
set forth in the Prospectus and SAI; the applicable provisions of the 1940 Act
and the Internal Revenue Code of 1986, as amended, (the "Code") relating to
regulated investment companies and all rules and regulations thereunder; and all
other applicable federal and state laws and regulations of which you have
knowledge; subject always to policies and instructions adopted by the Trust's
Board of Trustees. In connection therewith, you shall use reasonable efforts to
manage the Fund so that it will qualify as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder. The Funds shall have
the benefit of the investment analysis and research, the review of current
economic conditions and trends and the consideration of long-range investment
policy generally available to your investment advisory clients. In managing the
Funds in accordance with the requirements set forth in this section 2, you shall
be entitled to receive and act upon advice of counsel to the Trust. You shall
also make available to the Trust promptly upon request all of the Funds'
investment records and ledgers as are necessary to assist the Trust in complying
with the requirements of the 1940 Act and other applicable laws. To the extent
required by law, you shall furnish to regulatory authorities having the
requisite authority any information or reports in connection with the services
provided pursuant to this Agreement which may be requested in order to ascertain
whether the operations of the Trust are being conducted in a manner consistent
with applicable laws and regulations.
You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by each Fund and place orders
with broker-dealers, foreign currency dealers, futures commission merchants or
others pursuant to your determinations and all in accordance with Fund policies
as expressed in the Registration Statement. You shall determine what portion of
each Fund's portfolio shall be invested in securities and other assets and what
portion, if any, should be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic reports on the
investment performance of each Fund and on the performance of your obligations
pursuant to this Agreement, and you shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
I. Administrative Services. In addition to the portfolio management
services specified above in section 2, you shall furnish at your expense for the
use of the Funds such office space and facilities in the United States as the
Funds may require for its reasonable needs, and you (or one or more of your
affiliates designated by you) shall render to the Trust administrative services
on behalf of the Funds necessary for operating as an open end investment company
and not provided by persons not parties to this Agreement including, but not
limited to, preparing reports to and meeting materials for the Trust's Board of
Trustees and reports and notices to Fund shareholders; supervising, negotiating
contractual arrangements with, to the extent appropriate, and monitoring the
performance of, accounting agents, custodians, depositories, transfer agents and
pricing agents, accountants, attorneys, printers, underwriters, brokers and
dealers, insurers and other persons in any capacity deemed to be necessary or
desirable to Fund operations; preparing and making filings with the Securities
and Exchange Commission (the "SEC") and other regulatory and self-regulatory
organizations, including, but not limited to, preliminary and definitive proxy
materials, post-effective amendments to the Registration Statement, semi-annual
reports on Form N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act;
overseeing the tabulation of proxies by the Funds' transfer agent; assisting in
the preparation and filing of each Fund's federal, state and local tax returns;
preparing and filing each Fund's federal excise tax return pursuant to Section
4982 of the Code; providing assistance with investor and public relations
matters; monitoring the valuation of portfolio securities and the calculation of
net asset value; monitoring the registration of Shares of each Fund under
applicable federal and state securities laws; maintaining or causing to be
<PAGE>
maintained for the Funds all books, records and reports and any other
information required under the 1940 Act, to the extent that such books, records
and reports and other information are not maintained by the Funds' custodian or
other agents of the Funds; assisting in establishing the accounting policies of
the Fund; assisting in the resolution of accounting issues that may arise with
respect to the Funds' operations and consulting with the Fund's independent
accountants, legal counsel and the Fund's other agents as necessary in
connection therewith; establishing and monitoring each Fund's operating expense
budgets; reviewing each Fund's bills; processing the payment of bills that have
been approved by an authorized person; assisting the Funds in determining the
amount of dividends and distributions available to be paid by each Fund to its
shareholders, preparing and arranging for the printing of dividend notices to
shareholders, and providing the transfer and dividend paying agent, the
custodian, and the accounting agent with such information as is required for
such parties to effect the payment of dividends and distributions; and otherwise
assisting the Trust as it may reasonably request in the conduct of the Funds'
business, subject to the direction and control of the Trust's Board of Trustees.
Nothing in this Agreement shall be deemed to shift to you or to diminish the
obligations of any agent of the Funds or any other person not a party to this
Agreement which is obligated to provide services to the Funds.
I. Allocation of Charges and Expenses. Except as otherwise specifically
provided in this section 4, you shall pay the compensation and expenses of all
Trustees, officers and executive employees of the Trust (including each Fund's
share of payroll taxes) who are affiliated persons of you, and you shall make
available, without expense to the Funds, the services of such of your directors,
officers and employees as may duly be elected officers of the Trust, subject to
their individual consent to serve and to any limitations imposed by law. You
shall provide at your expense the portfolio management services described in
section 2 hereof and the administrative services described in section 3 hereof.
You shall not be required to pay any expenses of the Funds other than those
specifically allocated to you in this section 4. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Funds' Trustees and
officers as are directors, officers or employees of you whose services may be
involved, for the following expenses of each Fund: organization expenses of each
Fund (including out of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Fund advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Funds' custodian or
other agents of the Trust; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Funds in connection with membership in investment company trade
organizations; fees and expenses of the Funds' accounting agent for which the
Trust is responsible pursuant to the terms of the Fund Accounting Services
Agreement, custodians, subcustodians, transfer agents, dividend disbursing
agents and registrars; payment for portfolio pricing or valuation services to
pricing agents, accountants, bankers and other specialists, if any; expenses of
preparing share certificates and, except as provided below in this section 4,
other expenses in connection with the issuance, offering, distribution, sale,
redemption or repurchase of securities issued by each Fund; expenses relating to
investor and public relations; expenses and fees of registering or qualifying
Shares of each Fund for sale; interest charges, bond premiums and other
insurance expense; freight, insurance and other charges in connection with the
shipment of each Fund's portfolio securities; the compensation and all expenses
(specifically including travel expenses relating to Trust business) of Trustees,
officers and employees of the Trust who are not affiliated persons of you;
brokerage commissions or other costs of acquiring or disposing of any portfolio
securities of the Funds; expenses of printing and distributing reports, notices
and dividends to shareholders; expenses of printing and mailing Prospectuses and
SAIs of each Fund and supplements thereto; costs of stationery; any litigation
expenses; indemnification of Trustees and officers of the Trust; and costs of
shareholders' and other meetings.
You shall not be required to pay expenses of any activity which is primarily
intended to result in sales of Shares of a Fund if and to the extent that (i)
such expenses are required to be borne by a principal underwriter which acts as
the distributor of a Fund's Shares pursuant to an underwriting agreement which
provides that the underwriter shall assume some or all of such expenses, or (ii)
the Trust on behalf of a Fund shall have adopted a plan in conformity with Rule
<PAGE>
12b-1 under the 1940 Act providing that a Fund (or some other party) shall
assume some or all of such expenses. You shall be required to pay such of the
foregoing sales expenses as are not required to be paid by the principal
underwriter pursuant to the underwriting agreement or are not permitted to be
paid by a Fund (or some other party) pursuant to such a plan.
I. Management Fee. For all services to be rendered, payments to be made
and costs to be assumed by you as provided in sections 2, 3, and 4 hereof, the
Trust on behalf of the Funds shall pay you in United States Dollars on the last
day of each month the unpaid balance of a fee equal to the excess of (a) 1/12 of
.22 of 1 percent of the combined average daily net assets as defined below of
the Funds for such month; provided that, for any calendar month during which the
average of such values exceeds $500,000,000, the fee payable for that month
based on the portion of the average of such values in excess of $500,000,000
shall be 1/12 of .20 of 1 percent of such portion; provided that, for any
calendar month during which the average of such values exceeds $1 billion, the
fee payable for that month based on the portion of the average of such values in
excess of $1 billion shall be 1/12 of .175 of 1 percent of such portion;
provided that, for any calendar month during which the average of such values
exceeds $2 billion, the fee payable for that month based on the portion of the
average of such values in excess of $2 billion shall be 1/12 of .16 of 1 percent
of such portion; and provided that, for any calendar month during which the
average of such values exceeds $3 billion, the fee payable for that month based
on the portion of the average of such values in excess of $3 billion shall be
1/12 of .15 of 1 percent of such portion; over (b) any compensation waived by
you from time to time (as more fully described below). You shall be entitled to
receive during any month such interim payments of your fee hereunder as you
shall request, provided that no such payment shall exceed 75 percent of the
amount of your fee then accrued on the books of the Funds and unpaid.
The "average daily net assets" of a Fund shall mean the average of the values
placed on a Fund's net assets as of 4:00 p.m. (New York time) on each day on
which the net asset value of a Fund is determined consistent with the provisions
of Rule 22c-1 under the 1940 Act or, if a Fund lawfully determines the value of
its net assets as of some other time on each business day, as of such time. The
value of the net assets of a Fund shall always be determined pursuant to the
applicable provisions of the Declaration and the Registration Statement. If the
determination of net asset value does not take place for any particular day,
then for the purposes of this section 5, the value of the net assets of such
Fund as last determined shall be deemed to be the value of its net assets as of
4:00 p.m. (New York time), or as of such other time as the value of the net
assets of the Fund's portfolio may be lawfully determined on that day. If a Fund
determines the value of the net assets of its portfolio more than once on any
day, then the last such determination thereof on that day shall be deemed to be
the sole determination thereof on that day for the purposes of this section 5.
You may waive all or a portion of your fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of your services. You
shall be contractually bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Funds' expenses, as if such waiver
or limitation were fully set forth herein.
I. Avoidance of Inconsistent Position; Services Not Exclusive. In
connection with purchases or sales of portfolio securities and other investments
for the account of the Funds, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for each Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of a Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
such Fund.
<PAGE>
Your services to the Funds pursuant to this Agreement are not to be deemed to be
exclusive and it is understood that you may render investment advice, management
and services to others. In acting under this Agreement, you shall be an
independent contractor and not an agent of the Trust. Whenever a Fund and one or
more other accounts or investment companies advised by you have available funds
for investment, investments suitable and appropriate for each shall be allocated
in accordance with procedures believed by you to be equitable to each entity.
Similarly, opportunities to sell securities shall be allocated in a manner
believed by you to be equitable. The Funds recognize that in some cases this
procedure may adversely affect the size of the position that may be acquired or
disposed of for the Funds.
I. Limitation of Liability of Manager. As an inducement to your
undertaking to render services pursuant to this Agreement, the Trust agrees that
you shall not be liable under this Agreement for any error of judgment or
mistake of law or for any loss suffered by a Fund in connection with the matters
to which this Agreement relates, provided that nothing in this Agreement shall
be deemed to protect or purport to protect you against any liability to the
Trust, the Funds or their shareholders to which you would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties, or by reason of your reckless disregard of your
obligations and duties hereunder.
I. Duration and Termination of This Agreement. This Agreement shall
remain in force until December 1, 1998, and continue in force from year to year
thereafter with respect to each Fund, but only so long as such continuance is
specifically approved for each Fund at least annually (a) by the vote of a
majority of the Trustees who are not parties to this Agreement or interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the Trustees of the Trust, or
by the vote of a majority of the outstanding voting securities of such Fund. The
aforesaid requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
1940 Act and the rules and regulations thereunder and any applicable SEC
exemptive order therefrom.
This Agreement may be terminated with respect to a Fund at any time, without the
payment of any penalty, by the vote of a majority of the outstanding voting
securities of such Fund or by the Trust's Board of Trustees on 60 days' written
notice to you, or by you on 60 days' written notice to the Trust. This Agreement
shall terminate automatically in the event of its assignment.
This Agreement may be terminated with respect to a Fund at any time without the
payment of any penalty by the Board of Trustees or by vote of a majority of the
outstanding voting securities of such Fund in the event that it shall have been
established by a court of competent jurisdiction that you or any of your
officers or directors has taken any action which results in a breach of your
covenants set forth herein.
I. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Agreement shall be
effective until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.
I. Limitation of Liability for Claims. The Declaration, a copy of
which, together with all amendments thereto, is on file in the Office of the
Secretary of the Commonwealth of Massachusetts, provides that the name "Cash
Account Trust" refers to the Trustees under the Declaration collectively as
Trustees and not as individuals or personally, and that no shareholder of a
Fund, or Trustee, officer, employee or agent of the Trust, shall be subject to
claims against or obligations of the Trust or of a Fund to any extent
whatsoever, but that the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of liability as set
forth in the Declaration and you agree that the obligations assumed by the Trust
on behalf of each Fund pursuant to this Agreement shall be limited in all cases
to each Fund and its assets, and you shall not seek satisfaction of any such
<PAGE>
obligation from the shareholders or any shareholder of a Fund or any other
series of the Trust, or from any Trustee, officer, employee or agent of the
Trust. You understand that the rights and obligations of each Fund, or series,
under the Declaration are separate and distinct from those of any and all other
series.
I. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
In interpreting the provisions of this Agreement, the definitions contained in
Section 2(a) of the 1940 Act (particularly the definitions of "affiliated
person," "assignment" and "majority of the outstanding voting securities"), as
from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the SEC by any rule, regulation or order.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause a
Fund to fail to comply with the requirements of Subchapter M of the Code. This
Agreement shall supersede all prior investment advisory or management agreements
entered into between you and the Trust on behalf of the Funds.
If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.
Yours very truly,
CASH ACCOUNT TRUST, on behalf of
Money Market Portfolio
Government Securities Portfolio
Tax-Exempt Portfolio
By:
Vice President
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS, INC.
By:
President
Exhibit 99.b6.(a)
ADMINISTRATION, SHAREHOLDER SERVICES AND
DISTRIBUTION AGREEMENT
AGREEMENT made this _____ day of July, 1998, by and between [NAME OF FUND], a
Massachusetts business trust (the "Fund"), and KEMPER DISTRIBUTORS, INC., a
Delaware corporation ("KDI").
In consideration of the mutual covenants hereinafter contained, it is hereby
agreed by and between the parties hereto as follows:
1. The Fund hereby appoints KDI to act as administrator, distributor
and principal underwriter for the distribution of shares of beneficial
interest (hereinafter called "shares") of the Fund in jurisdictions wherein
shares of the Fund may legally be offered for sale; provided, however, that
the Fund in its absolute discretion may (a) issue or sell shares directly
to holders of shares of the Fund upon such terms and conditions and for
such consideration, if any, as it may determine, whether in connection with
the distribution of subscription or purchase rights, the payment or
reinvestment of dividends or distributions, or otherwise; or (b) issue or
sell shares at net asset value to the shareholders of any other investment
company, for which KDI shall act as exclusive distributor, who wish to
exchange all or a portion of their investment in shares of such other
investment company for shares of the Fund.
KDI shall appoint various broker-dealers and other financial services
firms ("Firms") to provide a cash management service for their clients
through the Fund. The Firms shall provide such office space and equipment,
telephone facilities, personnel, literature distribution, advertising and
promotion as is necessary or beneficial for providing information and
services to potential and existing shareholders of the Fund and to assist
the Fund's shareholder service agent in servicing accounts of the Firm's
clients who own Fund shares ("clients"). Such services and assistance may
include, but are not limited to, establishment and maintenance of
shareholder accounts and records, processing purchase and redemption
transactions, automatic investment in Fund shares of client account cash
balances, answering routine client inquiries regarding the Fund, assistance
to clients in changing dividend options, account designations and
addresses, and such other services as the Fund or KDI may reasonably
request. KDI may also provide some of the above services for the Fund
directly.
KDI accepts such appointment and agrees during the term hereof to
render such services and to assume the obligations herein set forth for the
compensation herein provided. KDI shall for all purposes herein provided be
deemed to be an independent contractor and, unless otherwise expressly
provided or authorized, shall have no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund. It is
understood and agreed that KDI, by separate agreement with the Fund, may
also serve the Fund in other capacities. The services of KDI to the Fund
<PAGE>
under this Agreement are not to be deemed exclusive, and KDI shall be free
to render similar services or other services to others so long as its
services hereunder are not impaired thereby.
In carrying out its duties and responsibilities hereunder, KDI will,
pursuant to separate administration services and selling group agreements
("services agreements"), appoint various Firms to provide administrative,
distribution and other services contemplated hereunder directly to or for
the benefit of existing and potential shareholders who may be clients of
such Firms. Such Firms shall at all times be deemed to be independent
contractors retained by KDI and not the Fund. KDI and not the Fund will be
responsible for the payment of compensation to such Firms for such
services.
KDI will use its best efforts with reasonable promptness to sell such
part of the authorized shares of the Fund remaining unissued as from time
to time shall be effectively registered under the Securities Act of 1933
("Securities Act"), at prices determined as hereinafter provided and on
terms hereinafter set forth, all subject to applicable federal and state
laws and regulations and to the Fund's Agreement and Declaration of Trust.
The price the Fund shall receive for all shares purchased from the Fund
shall be the net asset value used in determining the public offering price
applicable to the sale of such shares.
2. KDI shall sell shares of the Fund to or through qualified Firms in
such manner, not inconsistent with the provisions hereof and the then
effective registration statement of the Fund under the Securities Act (and
related prospectus), as KDI may determine from time to time, provided that
no Firm or other person shall be appointed and authorized to act as agent
of the Fund without the prior consent of the Fund. In addition to sales
made by it as agent of the Fund, KDI may, in its discretion, also sell
shares of the Fund as principal to persons with whom it does not have
services agreements.
Shares of any series of the Fund offered for sale or sold by KDI shall
be so offered or sold at a price per share determined in accordance with
the then current prospectus relating to the sale of such shares except as
departure from such prices shall be permitted by the rules and regulations
of the Securities and Exchange Commission; provided, however, that any
public offering price for shares of the Fund shall be the net asset value
per share. The net asset value per share of the Fund shall be determined in
the manner and at the times set forth in the then current prospectus of the
Fund relating to such shares.
KDI will require each Firm to conform to the provisions hereof and the
Registration Statement (and related prospectus) at the time in effect under
the Securities Act with respect to the public offering price of the Fund's
shares, and neither KDI nor any such Firms shall withhold the placing of
purchase orders so as to make a profit thereby.
3. The Fund will use its best efforts to keep effectively registered
under the Securities Act for sale as herein contemplated such shares as KDI
shall reasonably request and as the Securities and Exchange Commission
shall permit to be so registered. Notwithstanding any other provision
hereof, the Fund may terminate, suspend or withdraw the offering of shares
2
<PAGE>
whenever, in its sole discretion, it deems such action to be desirable.
4. The Fund will execute any and all documents and furnish any and all
information that may be reasonably necessary in connection with the
qualification of its shares for sale (including the qualification of the
Fund as a dealer where necessary or advisable) in such states as KDI may
reasonably request (it being understood that the Fund shall not be required
without its consent to comply with any requirement which in its opinion is
unduly burdensome). The Fund will furnish to KDI from time to time such
information with respect to the Fund and its shares as KDI may reasonably
request for use in connection with the sale of shares of the Fund.
5. KDI shall issue and deliver or shall arrange for various Firms to
issue and deliver on behalf of the Fund such confirmations of sales made by
it pursuant to this Agreement as may be required. At or prior to the time
of issuance of shares, KDI will pay or cause to be paid to the Fund the
amount due the Fund for the sale of such shares. Certificates shall be
issued or shares registered on the transfer books of the Fund in such names
and denominations as KDI may specify.
6. KDI shall order shares of the Fund from the Fund only to the extent
that it shall have received purchase orders therefor. KDI will not make, or
authorize Firms or others to make, any short sales of shares of the Fund.
KDI, as agent of and for the account of the Fund, may repurchase the shares
of the Fund at such prices and upon such terms and conditions as shall be
specified in the current prospectus of the Fund. In selling or reacquiring
shares of the Fund for the account of the Fund, KDI will in all respects
conform to the requirements of all state and federal laws and the Rules of
Fair Practice of the National Association of Securities Dealers, Inc.,
relating to such sale or reacquisition, as the case may be, and will
indemnify and save harmless the Fund from any damage or expense on account
of any wrongful act by KDI or any employee, representative or agent of KDI.
KDI will observe and be bound by all the provisions of the Fund's Agreement
and Declaration of Trust (and of any fundamental policies adopted by the
Fund pursuant to the Investment Company Act of 1940 (the "Investment
Company Act"), notice of which shall have been given to KDI) which at the
time in any way require, limit, restrict prohibit or otherwise regulate any
action on the part of KDI hereunder.
7. The Fund shall assume and pay all charges and expenses of its
operations not specifically assumed or otherwise to be provided by KDI
under this Agreement or the Fund's Amended and Restated 12b-1 Plan (the
"Plan"). The Fund will pay or cause to be paid expenses (including the fees
and disbursements of its own counsel) and all taxes and fees payable to the
federal, state or other governmental agencies on account of the
registration or qualification of securities issued by the Fund or
otherwise. The Fund will also pay or cause to be paid expenses incident to
the issuance of shares of beneficial interest, such as the cost of share
certificates, issue taxes, and fees of the transfer agent. KDI will pay all
expenses (other than expenses which one or more Firms may bear pursuant to
any agreement with KDI) incident to the sale and distribution of the shares
3
<PAGE>
issued or sold hereunder including, without limiting the generality of the
foregoing, all expenses of printing and distributing any prospectus and of
preparing, printing and distributing or disseminating any other literature,
advertising and selling aids in connection with the offering of the shares
for sale (except that such expenses need not include expenses incurred by
the Fund in connection with the preparation, typesetting, printing and
distribution of any registration statement, prospectus or report or other
communication to shareholders in their capacity as such) and expenses of
advertising in connection with such offering.
8. This Agreement shall become effective on the date hereof and shall
continue until July _____, 1999 and shall continue from year to year
thereafter only so long as such continuance is approved in the manner
required by the Investment Company Act.
This Agreement shall automatically terminate in the event of its
assignment and may be terminated at any time without the payment of any
penalty by the Fund or by KDI on (60) days' written notice to the other
party. The Fund may effect termination by a vote of (i) a majority of the
trustees who are not interested persons of the Fund and who have no direct
or indirect financial interest in the operation of the Plan, this Agreement
or in any other agreement related to the Plan, or (ii) a majority of the
outstanding voting securities of the Fund.
All material amendments to this Agreement must be approved by a vote of
a majority of the Board of Trustees of the Fund, including the trustees who
are not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan, this Agreement or in any
other agreement related to the Plan, cast in person at a meeting called for
such purpose.
The terms "assignment," "interested person" and "vote of a majority of
the outstanding voting securities" shall have the meanings set forth in the
Investment Company Act and the rules and regulations thereunder.
KDI shall receive such compensation for its distribution services as
set forth in the Plan. Termination of this Agreement shall not affect the
right of KDI to receive payments on any unpaid balance of the compensation
earned prior to such termination, as set forth in the Plan.
9. KDI will not use or distribute or authorize the use, distribution or
dissemination by Firms or others in connection with the sale of Fund shares
any statements, other than those contained in the Fund's current
prospectus, except such supplemental literature or advertising as shall be
lawful under federal and state securities laws and regulations. KDI will
furnish the Fund with copies of all such material.
10. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder shall not be
thereby affected.
4
<PAGE>
11. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for the receipt of such notice.
12. All parties hereto are expressly put on notice of the Fund's
Agreement and Declaration of Trust and all amendments thereto, all of which
are on file with the Secretary of The Commonwealth of Massachusetts, and
the limitation of shareholder and trustee liability contained therein. This
Agreement has been executed by and on behalf of the Fund by its
representatives as such representatives and not individually, and the
obligations of the Fund hereunder are not binding upon any of the trustees,
officers or shareholders of the Fund individually but are binding upon only
the assets and property of the Fund. With respect to any claim by KDI for
recovery of any liability of the Fund arising hereunder allocated to a
particular series, whether in accordance with the express terms hereof or
otherwise, KDI shall have no recourse against the assets of any other
series for such purpose.
13. This Agreement shall be construed in accordance with applicable
federal law and with the laws of The Commonwealth of Massachusetts.
14. This Agreement is the entire contract between the parties relating
to the subject matter hereof and supersedes all prior agreements between
the parties relating to the subject matter hereof.
[SIGNATURES APPEAR ON NEXT PAGE]
5
<PAGE>
IN WITNESS WHEREOF, the Fund and KDI have caused this Agreement to be executed
as of the day and year first above written.
[NAME OF FUND]
By: ___________________________________
Title: __________________________________
ATTEST:
By: ________________________________
Title: _______________________________
KEMPER DISTRIBUTORS, INC.
By: ___________________________________
Title: __________________________________
ATTEST:
By: ________________________________
Title: _______________________________
6
Exhibit 99.b9.(c)
FUND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made on the 31st day of December, 1997 between Cash Account
Trust (the "Fund"), on behalf of Government Securities Portfolio (hereinafter
called the "Portfolio"), a registered open-end management investment company
with its principal place of business in 222 South Riverside Plaza, Chicago,
Illinois 60606 and Scudder Fund Accounting Corporation, with its principal place
of business in Boston, Massachusetts (hereinafter called "FUND ACCOUNTING").
WHEREAS, the Portfolio has need to determine its net asset value which service
FUND ACCOUNTING is willing and able to provide;
NOW THEREFORE in consideration of the mutual promises herein made, the Fund and
FUND ACCOUNTING agree as follows:
Section 1. Duties of FUND ACCOUNTING - General
FUND ACCOUNTING is authorized to act under the terms of this Agreement
to calculate the net asset value of the Portfolio as provided in the
prospectus of the Portfolio and in connection therewith shall:
a. Maintain and preserve all accounts, books, financial records
and other documents as are required of the Fund under Section
31 of the Investment Company Act of 1940 (the "1940 Act") and
Rules 31a-1, 31a-2 and 31a-3 thereunder, applicable federal
and state laws and any other law or administrative rules or
procedures which may be applicable to the Fund on behalf of
the Portfolio, other than those accounts, books and financial
records required to be maintained by the Fund's investment
adviser, custodian or transfer agent and/or books and records
maintained by all other service providers necessary for the
Fund to conduct its business as a registered open-end
management investment company. All such books and records
shall be the property of the Fund and shall at all times
during regular business hours be open for inspection by, and
shall be surrendered promptly upon request of, duly authorized
officers of the Fund. All such books and records shall at all
times during regular business hours be open for inspection,
upon request of duly authorized officers of the Fund, by
employees or agents
<PAGE>
of the Fund and employees and agents of the Securities and
Exchange Commission.
b. Record the current day's trading activity and such other
proper bookkeeping entries as are necessary for determining
that day's net asset value and net income.
c. Render statements or copies of records as from time to time
are reasonably requested by the Fund.
d. Facilitate audits of accounts by the Fund's independent public
accountants or by any other auditors employed or engaged by
the Fund or by any regulatory body with jurisdiction over the
Fund.
e. Compute the Portfolio's public offering price and/or its daily
dividend rates and money market yields, if applicable, in
accordance with Section 3 of the Agreement and notify the Fund
and such other persons as the Fund may reasonably request of
the net asset value per share, the public offering price
and/or its daily dividend rates and money market yields.
f. Perform a mark-to-market appraisal in accordance with
procedures by the Board of Trustees pursuant to Rule 2a-7
under the 1940 Act.
Section 2. Valuation of Securities
Securities shall be valued in accordance with (a) the Fund's
Registration Statement, as amended or supplemented from time to time
(hereinafter referred to as the "Registration Statement"); (b) the
resolutions of the Board of Trustees of the Fund at the time in force
and applicable, as they may from time to time be delivered to FUND
ACCOUNTING, and (c) Proper Instructions from such officers of the Fund
or other persons as are from time to time authorized by the Board of
Trustees of the Fund to give instructions with respect to computation
and determination of the net asset value. FUND ACCOUNTING may use one
or more external pricing services, including broker-dealers, provided
that an appropriate officer of the Fund shall have approved such use in
advance.
Section 3. Computation of Net Asset Value, Public Offering Price, Daily
Dividend Rates and Yields
FUND ACCOUNTING shall compute the Portfolio's net asset value,
including net income, in a manner consistent with the specific
provisions of the Registration Statement. Such computation shall be
made as of the time or times specified in the Registration Statement.
FUND ACCOUNTING shall compute the daily dividend rates and money market
yields, if applicable, in accordance with the methodology set forth in
<PAGE>
the Registration Statement.
Section 4. FUND ACCOUNTING's Reliance on Instructions and Advice
In maintaining the Portfolio's books of account and making the
necessary computations FUND ACCOUNTING shall be entitled to receive,
and may rely upon, information furnished it by means of Proper
Instructions, including but not limited to:
a. The manner and amount of accrual of expenses to be recorded on
the books of the Portfolio;
b. The source of quotations to be used for such securities as may
not be available through FUND ACCOUNTING's normal pricing
services;
c. The value to be assigned to any asset for which no price
quotations are readily available;
d. If applicable, the manner of computation of the public
offering price and such other computations as may be
necessary;
e. Transactions in portfolio securities;
f. Transactions in capital shares.
FUND ACCOUNTING shall be entitled to receive, and shall be entitled to
rely upon, as conclusive proof of any fact or matter required to be
ascertained by it hereunder, a certificate, letter or other instrument
signed by an authorized officer of the Fund or any other person
authorized by the Fund's Board of Trustees.
FUND ACCOUNTING shall be entitled to receive and act upon advice of
Counsel for the Fund at the reasonable expense of the Portfolio and
shall be without liability for any action taken or thing done in good
faith in reliance upon such advice.
FUND ACCOUNTING shall be entitled to receive, and may rely upon,
information received from the Transfer Agent.
Section 5. Proper Instructions
"Proper Instructions" as used herein means any certificate, letter or
other instrument or telephone call reasonably believed by FUND
ACCOUNTING to be genuine and to have been properly made or signed by
any authorized officer of the Fund or person certified to FUND
ACCOUNTING as being authorized by the Board of Trustees. The Fund, on
behalf of the Portfolio, shall cause oral instructions to be confirmed
in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices as from time
<PAGE>
to time agreed to by an authorized officer of the Fund and FUND
ACCOUNTING.
The Fund, on behalf of the Portfolio, agrees to furnish to the
appropriate person(s) within FUND ACCOUNTING a copy of the Registration
Statement as in effect from time to time. FUND ACCOUNTING may
conclusively rely on the Fund's most recently delivered Registration
Statement for all purposes under this Agreement and shall not be liable
to the Portfolio or the Fund in acting in reliance thereon.
Section 6. Standard of Care
FUND ACCOUNTING shall exercise reasonable care and diligence in the
performance of its duties hereunder. The Fund agrees that FUND
ACCOUNTING shall not be liable under this Agreement for any error of
judgment or mistake of law made in good faith and consistent with the
foregoing standard of care, provided that nothing in this Agreement
shall be deemed to protect or purport to protect FUND ACCOUNTING
against any liability to the Fund, the Portfolio or its shareholders to
which FUND ACCOUNTING would otherwise be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties,
or by reason of its reckless disregard of its obligations and duties
hereunder.
Section 7. Compensation and FUND ACCOUNTING Expenses
FUND ACCOUNTING shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed
upon in writing by the two parties. FUND ACCOUNTING shall be entitled,
if agreed to by the Fund on behalf of the Portfolio, to recover its
reasonable telephone, courier or delivery service, and all other
reasonable out-of-pocket, expenses as incurred, including, without
limitation, reasonable attorneys' fees and reasonable fees for pricing
services.
Section 8. Amendment and Termination
This Agreement shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by mutual agreement
of the parties hereto and may be terminated by an instrument in writing
delivered or mailed to the other party. Such termination shall take
effect not sooner than sixty (60) days after the date of delivery or
mailing of such notice of termination. Any termination date is to be no
earlier than four months from the effective date hereof. Upon
termination, FUND ACCOUNTING will turn over to the Fund or its designee
<PAGE>
and cease to retain in FUND ACCOUNTING files, records of the
calculations of net asset value and all other records pertaining to its
services hereunder; provided, however, FUND ACCOUNTING in its
discretion may make and retain copies of any and all such records and
documents which it determines appropriate or for its protection.
Section 9. Services Not Exclusive
FUND ACCOUNTING's services pursuant to this Agreement are not to be
deemed to be exclusive, and it is understood that FUND ACCOUNTING may
perform fund accounting services for others. In acting under this
Agreement, FUND ACCOUNTING shall be an independent contractor and not
an agent of the Fund or the Portfolio.
Section 10. Limitation of Liability for Claims
The Fund's Amended and Restated Declaration of Trust, as amended to
date (the "Declaration"), a copy of which, together with all amendments
thereto, is on file in the Office of the Secretary of State of the
Commonwealth of Massachusetts, provides that the name "Cash Account
Trust" refers to the Trustees under the Declaration collectively as
trustees and not as individuals or personally, and that no shareholder
of the Fund or the Portfolio, or Trustee, officer, employee or agent of
the Fund shall be subject to claims against or obligations of the Trust
or of the Portfolio to any extent whatsoever, but that the Trust estate
only shall be liable.
FUND ACCOUNTING is expressly put on notice of the limitation of
liability as set forth in the Declaration and FUND ACCOUNTING agrees
that the obligations assumed by the Fund and/or the Portfolio under
this Agreement shall be limited in all cases to the Portfolio and its
assets, and FUND ACCOUNTING shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund or the
Portfolio or any other series of the Fund, or from any Trustee,
officer, employee or agent of the Fund. FUND ACCOUNTING understands
that the rights and obligations of the Portfolio under the Declaration
are separate and distinct from those of any and all other series of the
Fund.
Section 11. Notices
Any notice shall be sufficiently given when delivered or mailed to the
other party at the address of such party set forth below or to such
other person or at such other address as such party may from time to
<PAGE>
time specify in writing to the other party.
If to FUND ACCOUNTING: Scudder Fund Accounting Corporation
Two International Place
Boston, Massachusetts 02110
Attn: Vice President
If to the Fund - Portfolio: Cash Account Trust
222 South Riverside Plaza
Chicago, Illinois 60606
Attn: President, Secretary
or Treasurer
<PAGE>
Section 12. Miscellaneous
This Agreement may not be assigned by FUND ACCOUNTING without the
consent of the Fund as authorized or approved by resolution of its
Board of Trustees.
In connection with the operation of this Agreement, the Fund and FUND
ACCOUNTING may agree from time to time on such provisions interpretive
of or in addition to the provisions of this Agreement as in their joint
opinions may be consistent with this Agreement. Any such interpretive
or additional provisions shall be in writing, signed by both parties
and annexed hereto, but no such provisions shall be deemed to be an
amendment of this Agreement.
This Agreement shall be governed and construed in accordance with the
laws of the Commonwealth of Massachusetts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes any and all prior
understandings.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized and its seal to be
hereunder affixed as of the date first written above.
[SEAL] CASH ACCOUNT TRUST
on behalf of Government Securities
Portfolio
By:
President
[SEAL] SCUDDER FUND ACCOUNTING CORPORATION
By:
Vice President
<PAGE>
FUND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made on the 31st day of December, 1997 between Cash Account
Trust (the "Fund"), on behalf of Money Market Portfolio (hereinafter called the
"Portfolio"), a registered open-end management investment company with its
principal place of business in 222 South Riverside Plaza, Chicago, Illinois
60606 and Scudder Fund Accounting Corporation, with its principal place of
business in Boston, Massachusetts (hereinafter called "FUND ACCOUNTING").
WHEREAS, the Portfolio has need to determine its net asset value which service
FUND ACCOUNTING is willing and able to provide;
NOW THEREFORE in consideration of the mutual promises herein made, the Fund and
FUND ACCOUNTING agree as follows:
Section 1. Duties of FUND ACCOUNTING - General
FUND ACCOUNTING is authorized to act under the terms of this Agreement
to calculate the net asset value of the Portfolio as provided in the
prospectus of the Portfolio and in connection therewith shall:
a. Maintain and preserve all accounts, books, financial records
and other documents as are required of the Fund under Section
31 of the Investment Company Act of 1940 (the "1940 Act") and
Rules 31a-1, 31a-2 and 31a-3 thereunder, applicable federal
and state laws and any other law or administrative rules or
procedures which may be applicable to the Fund on behalf of
the Portfolio, other than those accounts, books and financial
records required to be maintained by the Fund's investment
adviser, custodian or transfer agent and/or books and records
maintained by all other service providers necessary for the
Fund to conduct its business as a registered open-end
management investment company. All such books and records
shall be the property of the Fund and shall at all times
during regular business hours be open for inspection by, and
shall be surrendered promptly upon request of, duly
authorized officers of the Fund. All such books and records
shall at all times during regular business hours be open for
inspection, upon request of duly authorized officers of the
Fund, by employees or agents
<PAGE>
of the Fund and employees and agents of the Securities and
Exchange Commission.
b. Record the current day's trading activity and such other
proper bookkeeping entries as are necessary for determining
that day's net asset value and net income.
c. Render statements or copies of records as from time to time
are reasonably requested by the Fund.
d. Facilitate audits of accounts by the Fund's independent
public accountants or by any other auditors employed or
engaged by the Fund or by any regulatory body with
jurisdiction over the Fund.
e. Compute the Portfolio's public offering price and/or its
daily dividend rates and money market yields, if applicable,
in accordance with Section 3 of the Agreement and notify the
Fund and such other persons as the Fund may reasonably
request of the net asset value per share, the public offering
price and/or its daily dividend rates and money market
yields.
f. Perform a mark-to-market appraisal in accordance with
procedures by the Board of Trustees pursuant to Rule 2a-7
under the 1940 Act.
Section 2. Valuation of Securities
Securities shall be valued in accordance with (a) the Fund's
Registration Statement, as amended or supplemented from time to time
(hereinafter referred to as the "Registration Statement"); (b) the
resolutions of the Board of Trustees of the Fund at the time in force
and applicable, as they may from time to time be delivered to FUND
ACCOUNTING, and (c) Proper Instructions from such officers of the Fund
or other persons as are from time to time authorized by the Board of
Trustees of the Fund to give instructions with respect to computation
and determination of the net asset value. FUND ACCOUNTING may use one
or more external pricing services, including broker-dealers, provided
that an appropriate officer of the Fund shall have approved such use in
advance.
Section 3. Computation of Net Asset Value, Public Offering Price, Daily
Dividend Rates and Yields
FUND ACCOUNTING shall compute the Portfolio's net asset value,
including net income, in a manner consistent with the specific
provisions of the Registration Statement. Such computation shall be
made as of the time or times specified in the Registration Statement.
FUND ACCOUNTING shall compute the daily dividend rates and money market
yields, if applicable, in accordance with the methodology set forth in
<PAGE>
the Registration Statement.
Section 4. FUND ACCOUNTING's Reliance on Instructions and Advice
In maintaining the Portfolio's books of account and making the
necessary computations FUND ACCOUNTING shall be entitled to receive,
and may rely upon, information furnished it by means of Proper
Instructions, including but not limited to:
a. The manner and amount of accrual of expenses to be recorded
on the books of the Portfolio;
b. The source of quotations to be used for such securities as may
not be available through FUND ACCOUNTING's normal pricing
services;
c. The value to be assigned to any asset for which no price
quotations are readily available;
d. If applicable, the manner of computation of the public
offering price and such other computations as may be
necessary;
e. Transactions in portfolio securities;
f. Transactions in capital shares.
FUND ACCOUNTING shall be entitled to receive, and shall be entitled to
rely upon, as conclusive proof of any fact or matter required to be
ascertained by it hereunder, a certificate, letter or other instrument
signed by an authorized officer of the Fund or any other person
authorized by the Fund's Board of Trustees.
FUND ACCOUNTING shall be entitled to receive and act upon advice of
Counsel for the Fund at the reasonable expense of the Portfolio and
shall be without liability for any action taken or thing done in good
faith in reliance upon such advice.
FUND ACCOUNTING shall be entitled to receive, and may rely upon,
information received from the Transfer Agent.
Section 5. Proper Instructions
"Proper Instructions" as used herein means any certificate, letter or
other instrument or telephone call reasonably believed by FUND
ACCOUNTING to be genuine and to have been properly made or signed by
any authorized officer of the Fund or person certified to FUND
ACCOUNTING as being authorized by the Board of Trustees. The Fund, on
behalf of the Portfolio, shall cause oral instructions to be confirmed
in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices as from time
<PAGE>
to time agreed to by an authorized officer of the Fund and FUND
ACCOUNTING.
The Fund, on behalf of the Portfolio, agrees to furnish to the
appropriate person(s) within FUND ACCOUNTING a copy of the Registration
Statement as in effect from time to time. FUND ACCOUNTING may
conclusively rely on the Fund's most recently delivered Registration
Statement for all purposes under this Agreement and shall not be liable
to the Portfolio or the Fund in acting in reliance thereon.
Section 6. Standard of Care
FUND ACCOUNTING shall exercise reasonable care and diligence in the
performance of its duties hereunder. The Fund agrees that FUND
ACCOUNTING shall not be liable under this Agreement for any error of
judgment or mistake of law made in good faith and consistent with the
foregoing standard of care, provided that nothing in this Agreement
shall be deemed to protect or purport to protect FUND ACCOUNTING
against any liability to the Fund, the Portfolio or its shareholders to
which FUND ACCOUNTING would otherwise be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties,
or by reason of its reckless disregard of its obligations and duties
hereunder.
Section 7. Compensation and FUND ACCOUNTING Expenses
FUND ACCOUNTING shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed
upon in writing by the two parties. FUND ACCOUNTING shall be entitled,
if agreed to by the Fund on behalf of the Portfolio, to recover its
reasonable telephone, courier or delivery service, and all other
reasonable out-of-pocket, expenses as incurred, including, without
limitation, reasonable attorneys' fees and reasonable fees for pricing
services.
Section 8. Amendment and Termination
This Agreement shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by mutual agreement
of the parties hereto and may be terminated by an instrument in writing
delivered or mailed to the other party. Such termination shall take
effect not sooner than sixty (60) days after the date of delivery or
mailing of such notice of termination. Any termination date is to be no
earlier than four months from the effective date hereof. Upon
termination, FUND ACCOUNTING will turn over to the Fund or its designee
<PAGE>
and cease to retain in FUND ACCOUNTING files, records of the
calculations of net asset value and all other records pertaining to its
services hereunder; provided, however, FUND ACCOUNTING in its
discretion may make and retain copies of any and all such records and
documents which it determines appropriate or for its protection.
Section 9. Services Not Exclusive
FUND ACCOUNTING's services pursuant to this Agreement are not to be
deemed to be exclusive, and it is understood that FUND ACCOUNTING may
perform fund accounting services for others. In acting under this
Agreement, FUND ACCOUNTING shall be an independent contractor and not
an agent of the Fund or the Portfolio.
Section 10. Limitation of Liability for Claims
The Fund's Amended and Restated Declaration of Trust, as amended to
date (the "Declaration"), a copy of which, together with all amendments
thereto, is on file in the Office of the Secretary of State of the
Commonwealth of Massachusetts, provides that the name "Cash Account
Trust" refers to the Trustees under the Declaration collectively as
trustees and not as individuals or personally, and that no shareholder
of the Fund or the Portfolio, or Trustee, officer, employee or agent of
the Fund shall be subject to claims against or obligations of the Trust
or of the Portfolio to any extent whatsoever, but that the Trust estate
only shall be liable.
FUND ACCOUNTING is expressly put on notice of the limitation of
liability as set forth in the Declaration and FUND ACCOUNTING agrees
that the obligations assumed by the Fund and/or the Portfolio under
this Agreement shall be limited in all cases to the Portfolio and its
assets, and FUND ACCOUNTING shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund or the
Portfolio or any other series of the Fund, or from any Trustee,
officer, employee or agent of the Fund. FUND ACCOUNTING understands
that the rights and obligations of the Portfolio under the Declaration
are separate and distinct from those of any and all other series of the
Fund.
Section 11. Notices
Any notice shall be sufficiently given when delivered or mailed to the
other party at the address of such party set forth below or to such
other person or at such other address as such party may from time to
<PAGE>
time specify in writing to the other party.
If to FUND ACCOUNTING: Scudder Fund Accounting Corporation
Two International Place
Boston, Massachusetts 02110
Attn: Vice President
If to the Fund - Portfolio: Cash Account Trust
222 South Riverside Plaza
Chicago, Illinois 60606
Attn: President, Secretary or Treasurer
<PAGE>
Section 12. Miscellaneous
This Agreement may not be assigned by FUND ACCOUNTING without the
consent of the Fund as authorized or approved by resolution of its
Board of Trustees.
In connection with the operation of this Agreement, the Fund and FUND
ACCOUNTING may agree from time to time on such provisions interpretive
of or in addition to the provisions of this Agreement as in their joint
opinions may be consistent with this Agreement. Any such interpretive
or additional provisions shall be in writing, signed by both parties
and annexed hereto, but no such provisions shall be deemed to be an
amendment of this Agreement.
This Agreement shall be governed and construed in accordance with the
laws of the Commonwealth of Massachusetts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes any and all prior
understandings.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized and its seal to be
hereunder affixed as of the date first written above.
[SEAL] CASH ACCOUNT TRUST
on behalf of Money Market Portfolio
By:
President
[SEAL] SCUDDER FUND ACCOUNTING CORPORATION
By:
Vice President
<PAGE>
FUND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made on the 31st day of December, 1997 between Cash Account
Trust (the "Fund"), on behalf of Tax-Exempt Portfolio (hereinafter called the
"Portfolio"), a registered open-end management investment company with its
principal place of business in 222 South Riverside Plaza, Chicago, Illinois
60606 and Scudder Fund Accounting Corporation, with its principal place of
business in Boston, Massachusetts (hereinafter called "FUND ACCOUNTING").
WHEREAS, the Portfolio has need to determine its net asset value which service
FUND ACCOUNTING is willing and able to provide;
NOW THEREFORE in consideration of the mutual promises herein made, the Fund and
FUND ACCOUNTING agree as follows:
Section 1. Duties of FUND ACCOUNTING - General
FUND ACCOUNTING is authorized to act under the terms of this Agreement
to calculate the net asset value of the Portfolio as provided in the
prospectus of the Portfolio and in connection therewith shall:
a. Maintain and preserve all accounts, books, financial records
and other documents as are required of the Fund under Section
31 of the Investment Company Act of 1940 (the "1940 Act") and
Rules 31a-1, 31a-2 and 31a-3 thereunder, applicable federal
and state laws and any other law or administrative rules or
procedures which may be applicable to the Fund on behalf of
the Portfolio, other than those accounts, books and financial
records required to be maintained by the Fund's investment
adviser, custodian or transfer agent and/or books and records
maintained by all other service providers necessary for the
Fund to conduct its business as a registered open-end
management investment company. All such books and records
shall be the property of the Fund and shall at all times
during regular business hours be open for inspection by, and
shall be surrendered promptly upon request of, duly authorized
officers of the Fund. All such books and records shall at all
times during regular business hours be open for inspection,
upon request of duly authorized officers of the Fund, by
employees or agents
<PAGE>
of the Fund and employees and agents of the Securities and
Exchange Commission.
b. Record the current day's trading activity and such other
proper bookkeeping entries as are necessary for determining
that day's net asset value and net income.
c. Render statements or copies of records as from time to time
are reasonably requested by the Fund.
d. Facilitate audits of accounts by the Fund's independent public
accountants or by any other auditors employed or engaged by
the Fund or by any regulatory body with jurisdiction over the
Fund.
e. Compute the Portfolio's public offering price and/or its daily
dividend rates and money market yields, if applicable, in
accordance with Section 3 of the Agreement and notify the Fund
and such other persons as the Fund may reasonably request of
the net asset value per share, the public offering price
and/or its daily dividend rates and money market yields.
f. Perform a mark-to-market appraisal in accordance with
procedures by the Board of Trustees pursuant to Rule 2a-7
under the 1940 Act.
Section 2. Valuation of Securities
Securities shall be valued in accordance with (a) the Fund's
Registration Statement, as amended or supplemented from time to time
(hereinafter referred to as the "Registration Statement"); (b) the
resolutions of the Board of Trustees of the Fund at the time in force
and applicable, as they may from time to time be delivered to FUND
ACCOUNTING, and (c) Proper Instructions from such officers of the Fund
or other persons as are from time to time authorized by the Board of
Trustees of the Fund to give instructions with respect to computation
and determination of the net asset value. FUND ACCOUNTING may use one
or more external pricing services, including broker-dealers, provided
that an appropriate officer of the Fund shall have approved such use in
advance.
Section 3. Computation of Net Asset Value, Public Offering Price, Daily
Dividend Rates and Yields
FUND ACCOUNTING shall compute the Portfolio's net asset value,
including net income, in a manner consistent with the specific
provisions of the Registration Statement. Such computation shall be
made as of the time or times specified in the Registration Statement.
FUND ACCOUNTING shall compute the daily dividend rates and money market
yields, if applicable, in accordance with the methodology set forth in
<PAGE>
the Registration Statement.
Section 4. FUND ACCOUNTING's Reliance on Instructions and Advice
In maintaining the Portfolio's books of account and making the
necessary computations FUND ACCOUNTING shall be entitled to receive,
and may rely upon, information furnished it by means of Proper
Instructions, including but not limited to:
a. The manner and amount of accrual of expenses to be recorded on
the books of the Portfolio;
b. The source of quotations to be used for such securities as may
not be available through FUND ACCOUNTING's normal pricing
services;
c. The value to be assigned to any asset for which no price
quotations are readily available;
d. If applicable, the manner of computation of the public
offering price and such other computations
as may be necessary;
e. Transactions in portfolio securities;
f. Transactions in capital shares.
FUND ACCOUNTING shall be entitled to receive, and shall be entitled to
rely upon, as conclusive proof of any fact or matter required to be
ascertained by it hereunder, a certificate, letter or other instrument
signed by an authorized officer of the Fund or any other person
authorized by the Fund's Board of Trustees.
FUND ACCOUNTING shall be entitled to receive and act upon advice of
Counsel for the Fund at the reasonable expense of the Portfolio and
shall be without liability for any action taken or thing done in good
faith in reliance upon such advice.
FUND ACCOUNTING shall be entitled to receive, and may rely upon,
information received from the Transfer Agent.
Section 5. Proper Instructions
"Proper Instructions" as used herein means any certificate, letter or
other instrument or telephone call reasonably believed by FUND
ACCOUNTING to be genuine and to have been properly made or signed by
any authorized officer of the Fund or person certified to FUND
ACCOUNTING as being authorized by the Board of Trustees. The Fund, on
behalf of the Portfolio, shall cause oral instructions to be confirmed
in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices as from time
<PAGE>
to time agreed to by an authorized officer of the Fund and FUND
ACCOUNTING.
The Fund, on behalf of the Portfolio, agrees to furnish to the
appropriate person(s) within FUND ACCOUNTING a copy of the Registration
Statement as in effect from time to time. FUND ACCOUNTING may
conclusively rely on the Fund's most recently delivered Registration
Statement for all purposes under this Agreement and shall not be liable
to the Portfolio or the Fund in acting in reliance thereon.
Section 6. Standard of Care
FUND ACCOUNTING shall exercise reasonable care and diligence in the
performance of its duties hereunder. The Fund agrees that FUND
ACCOUNTING shall not be liable under this Agreement for any error of
judgment or mistake of law made in good faith and consistent with the
foregoing standard of care, provided that nothing in this Agreement
shall be deemed to protect or purport to protect FUND ACCOUNTING
against any liability to the Fund, the Portfolio or its shareholders to
which FUND ACCOUNTING would otherwise be subject by reason of willful
misfeasance, bad faith or negligence in the performance of its duties,
or by reason of its reckless disregard of its obligations and duties
hereunder.
Section 7. Compensation and FUND ACCOUNTING Expenses
FUND ACCOUNTING shall be paid as compensation for its services pursuant
to this Agreement such compensation as may from time to time be agreed
upon in writing by the two parties. FUND ACCOUNTING shall be entitled,
if agreed to by the Fund on behalf of the Portfolio, to recover its
reasonable telephone, courier or delivery service, and all other
reasonable out-of-pocket, expenses as incurred, including, without
limitation, reasonable attorneys' fees and reasonable fees for pricing
services.
Section 8. Amendment and Termination
This Agreement shall continue in full force and effect until terminated
as hereinafter provided, may be amended at any time by mutual agreement
of the parties hereto and may be terminated by an instrument in writing
delivered or mailed to the other party. Such termination shall take
effect not sooner than sixty (60) days after the date of delivery or
mailing of such notice of termination. Any termination date is to be no
earlier than four months from the effective date hereof. Upon
termination, FUND ACCOUNTING will turn over to the Fund or its designee
<PAGE>
and cease to retain in FUND ACCOUNTING files, records of the
calculations of net asset value and all other records pertaining to its
services hereunder; provided, however, FUND ACCOUNTING in its
discretion may make and retain copies of any and all such records and
documents which it determines appropriate or for its protection.
Section 9. Services Not Exclusive
FUND ACCOUNTING's services pursuant to this Agreement are not to be
deemed to be exclusive, and it is understood that FUND ACCOUNTING may
perform fund accounting services for others. In acting under this
Agreement, FUND ACCOUNTING shall be an independent contractor and not
an agent of the Fund or the Portfolio.
Section 10. Limitation of Liability for Claims
The Fund's Amended and Restated Declaration of Trust, as amended to
date (the "Declaration"), a copy of which, together with all amendments
thereto, is on file in the Office of the Secretary of State of the
Commonwealth of Massachusetts, provides that the name "Cash Account
Trust" refers to the Trustees under the Declaration collectively as
trustees and not as individuals or personally, and that no shareholder
of the Fund or the Portfolio, or Trustee, officer, employee or agent of
the Fund shall be subject to claims against or obligations of the Trust
or of the Portfolio to any extent whatsoever, but that the Trust estate
only shall be liable.
FUND ACCOUNTING is expressly put on notice of the limitation of
liability as set forth in the Declaration and FUND ACCOUNTING agrees
that the obligations assumed by the Fund and/or the Portfolio under
this Agreement shall be limited in all cases to the Portfolio and its
assets, and FUND ACCOUNTING shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund or the
Portfolio or any other series of the Fund, or from any Trustee,
officer, employee or agent of the Fund. FUND ACCOUNTING understands
that the rights and obligations of the Portfolio under the Declaration
are separate and distinct from those of any and all other series of the
Fund.
Section 11. Notices
Any notice shall be sufficiently given when delivered or mailed to the
other party at the address of such party set forth below or to such
other person or at such other address as such party may from time to
<PAGE>
time specify in writing to the other party.
If to FUND ACCOUNTING: Scudder Fund Accounting Corporation
Two International Place
Boston, Massachusetts 02110
Attn: Vice President
If to the Fund - Portfolio: Cash Account Trust
222 South Riverside Plaza
Chicago, Illinois 60606
Attn: President, Secretary
or Treasurer
<PAGE>
Section 12. Miscellaneous
This Agreement may not be assigned by FUND ACCOUNTING without the
consent of the Fund as authorized or approved by resolution of its
Board of Trustees.
In connection with the operation of this Agreement, the Fund and FUND
ACCOUNTING may agree from time to time on such provisions interpretive
of or in addition to the provisions of this Agreement as in their joint
opinions may be consistent with this Agreement. Any such interpretive
or additional provisions shall be in writing, signed by both parties
and annexed hereto, but no such provisions shall be deemed to be an
amendment of this Agreement.
This Agreement shall be governed and construed in accordance with the
laws of the Commonwealth of Massachusetts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes any and all prior
understandings.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized and its seal to be
hereunder affixed as of the date first written above.
[SEAL] CASH ACCOUNT TRUST
on behalf of Tax-Exempt Portfolio
By:
President
[SEAL] SCUDDER FUND ACCOUNTING CORPORATION
By:
Vice President
Exhibit 99.b11.
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees and Shareholders
Cash Account Trust
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of Cash Account Trust (comprising, respectively,
the Money Market, Government Securities and Tax-Exempt Portfolios), as of April
30, 1998, and the related statements of operations for the year then ended and
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the fiscal periods since 1991. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free from material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
April 30, 1998, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Portfolios constituting Cash Account Trust at April 30, 1998,
the results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended and the financial
highlights for each of the fiscal periods since 1991, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 16, 1998
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Financial
Highlights" and "Independent Auditors and Reports to Shareholders" and to the
incorporation by reference of our report dated June 16, 1998 in the Registration
Statement of Cash Account Trust on Form N-1A and in the related Prospectus filed
with the Securities and Exchange Commission in this Post-Effective Amendment No.
8 to the Registration Statement under the Securities Act of 1933 (File No.
33-32476) and in this Amendment No. 9 to the Registration Statement under the
Investment Company Act of 1940 (File No. 811-5970).
ERNST & YOUNG LLP
Chicago, Illinois
August 24, 1998
Exhibit 99.b15.
Fund: ______________________________ (the "Fund")
Series: ______________________________ (the "Series")
AMENDED AND RESTATED 12b-1 PLAN
Pursuant to the provisions of Rule 12b-1 under the Investment Company
Act of 1940 (the "Act"), this Amended and Restated 12b-1 Plan (the "Plan") has
been adopted for the Fund on behalf of the Series (both as noted and defined
above) by a majority of the members of the Fund's Board of Trustees, including a
majority of the trustees who are not "interested persons" of the Fund and who
have no direct or indirect financial interest in the operation of the Plan or in
any agreements related to the Plan (the "Qualified Trustees") at a meeting
called for the purpose of voting on this Plan.
1. Compensation. The Fund will pay to Kemper Distributors, Inc. ("
KDI") at the end of each calendar month a distribution services fee computed at
the annual rate of [._____ of 1%] of the Fund's average daily net assets
attributable to the Series. KDI may compensate various financial services firms
appointed by KDI ("Firms") in accordance with the provisions of the Fund's
Administration, Shareholder Services and Distribution Agreement (the
"Distribution Agreement") for sales of shares at the fee levels provided in the
Fund's prospectus from time to time. KDI may pay other commissions, fees or
concessions to Firms, and may pay them to others in its discretion, in such
amounts as KDI may determine from time to time. The distribution services fee
for the Series shall be based upon the average daily net assets of the Series,
and such fee shall be charged only to the Series. For the month and year in
which this Plan becomes effective or terminates, there shall be an appropriate
proration of the distribution services fee set forth herein on the basis of the
number of days that the Plan, the Distribution Agreement, and any other
agreement related to the Plan, is in effect during the month and year,
respectively.
2. Periodic Reporting. KDI shall prepare reports for the Board of
Trustees of the Fund on a quarterly basis showing amounts paid to the various
Firms and such other information as from time to time shall be reasonably
requested by the Board of Trustees.
3. Continuance. This Plan shall continue in effect indefinitely,
provided that such continuance is approved at least annually by a vote of a
majority of the trustees, and of the Qualified Trustees, cast in person at a
meeting called for such purpose or by vote of at least a majority of the
outstanding voting securities of the Series.
4. Termination. This Plan may be terminated at any time without penalty
with respect to the Series by vote of a majority of the Qualified Trustees or by
vote of the majority of the outstanding voting securities of the Series.
5. Amendment. This Plan may not be amended to increase materially the
amount to be paid to KDI by the Fund for distribution services with respect to
the Series without the vote of a majority of the outstanding voting securities
of the Series. All material amendments to this Plan must in any event be
approved by a vote of a majority of the trustees, and of the Qualified Trustees,
<PAGE>
cast in person at a meeting called for such purpose.
6. Selection of Non-Interested Trustees. So long as this Plan is in
effect, the selection and nomination of those trustees who are not interested
persons of the Fund will be committed to the discretion of the trustees who are
not themselves interested persons.
7. Recordkeeping. The Fund will preserve copies of this Plan, the
Distribution Agreement, and all reports made pursuant to Paragraph 2 above for a
period of not less than six (6) years from the date of this Plan, the
Distribution Agreement, or any such report, as the case may be, the first two
(2) years in an easily accessible place.
8. Limitation of Liability. Any obligation of the Fund hereunder shall
be binding only upon the assets of the Series and shall not be binding on any
trustee, officer, employee, agent, or shareholder of the Fund. Neither the
authorization of any action by the trustees or shareholders of the Fund nor the
adoption of the Plan on behalf of the Fund shall impose any liability upon any
trustee or upon any shareholder.
9. Definitions. The terms "interested person" and "vote of a majority
of the outstanding voting securities" shall have the meanings set forth in the
Act and the rules and regulations thereunder.
10. Severability; Separate Action. If any provision of this Plan shall
be held or made invalid by a court decision, rule or otherwise, the remainder of
this Plan shall not be affected thereby. Action shall be taken separately for
the Series as the Act or the rules thereunder so require.
Adopted ____________ (Amended and restated July ___, 1998)
2
Exhibit 99.b24.
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of Kemper Blue Chip Fund.
Signature Title Date
/s/ David W. Belin Trustee
- ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of [Name of Fund].
Signature Title Date
/s/ Lewis A. Burnham Trustee
- ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of [Name of Fund].
Signature Title Date
/s/ Donald L. Dunaway Trustee ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of [Name of Fund].
Signature Title Date
/s/ Robert B. Hoffman Trustee
- ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of [Name of Fund].
Signature Title Date
/s/ Donald R. Jones Trustee
- ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of [Name of Fund].
Signature Title Date
/s/ Shirley D. Peterson Trustee
- -----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of [Name of Fund].
Signature Title Date
/s/ Daniel Pierce Trustee
- ----------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of [Name of Fund].
Signature Title Date
/s/ William P. Sommers Trustee
- --------------------------
<PAGE>
POWER OF ATTORNEY
The person whose signature appears below hereby appoints Kathryn L. Quirk,
Caroline Pearson, and Philip J. Collora and each of them, any of whom may act
without the joinder of the others, as such person's attorney-in-fact to sign and
file on such person's behalf individually and in the capacity stated below such
registration statements, amendments, post-effective amendments, exhibits,
applications and other documents with the Securities and Exchange Commission or
any other regulatory authority as may be desirable or necessary in connection
with the public offering of shares of [Name of Fund].
Signature Title Date
/s/ Edmond D. Villani Trustee
- ----------------------
Exhibit 99.b485.(b)
TRANSMITTAL LETTER. FOR 485(b) FILING
Scudder Kemper Investments, Inc.
Two International Place
Boston, MA 02110
August 28, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: Money Market Portfolio, Government Securities Portfolio and Tax-Exempt
Portfolio, all a series of Cash Account Trust (Reg. No. 33-32476)
(811-5970) (the "Fund") Post Effective Amendment No. 8 to Registration
Statement on Form N-1A
Ladies and Gentlemen:
We are filing today through the EDGAR system on behalf of the Fund,
pursuant to Rule 485(b) under the Securities Act of 1933 (the "Securities Act")
and Rule 8b-16 under the Investment Company Act of 1940, Post-Effective
Amendment No. 8 to the above-referenced Fund's Registration Statement on Form
N-1A (the "Amendment"). The Amendment has been electronically coded to show
changes from the Prospectus and Statement of Additional Information dated August
1, 1997, filed with the Commission on July 25, 1997.
This Amendment is being filed under paragraph (b) of Rule 485 to bring
the financial statements and other information up-to-date under Section 10 (a)
(3) of the Securities Act of 1933, and uses standard Scudder Kemper disclosure,
as appropriate.
None of the revised disclosure represents a material change from the
Prospectus and Statement of Additional Information contained in the previous
Post-Effective Amendment. Having reviewed the Amendment, the undersigned
represents pursuant to Rule 485(b)(4) under the Securities Act that it does not
contain disclosure which would render it ineligible to become effective pursuant
to Rule 485(b).
Any comments or question on this filing should be directed to Mr. Jim
Cove at 617-295-3357.
Very truly yours,
Caroline Pearson
Director of Mutual Fund Administration
cc: David Sturms
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1998
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<CIK> 0000858372
<NAME> CASH ACCOUNT TRUST
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<EXPENSES-NET> (6,796)
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<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
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<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1998
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SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000858372
<NAME> CASH ACCOUNT TRUST
<SERIES>
<NUMBER> 01
<NAME> MONEY MARKET PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> OCT-31-1997
<PERIOD-END> APR-30-1998
<INVESTMENTS-AT-COST> 1,998,118
<INVESTMENTS-AT-VALUE> 1,998,118
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<ASSETS-OTHER> 2,939
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<OTHER-ITEMS-LIABILITIES> 9,363
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<OVERDISTRIBUTION-NII> 0
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<ACCUM-APPREC-OR-DEPREC> 0
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<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 74,993
<OTHER-INCOME> 0
<EXPENSES-NET> (13,136)
<NET-INVESTMENT-INCOME> 61,857
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 61,857
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (61,857)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,930,862
<NUMBER-OF-SHARES-REDEEMED> (7,581,047)
<SHARES-REINVESTED> 60,295
<NET-CHANGE-IN-ASSETS> 1,410,110
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 2,463
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<GROSS-EXPENSE> 14,389
<AVERAGE-NET-ASSETS> 1,311,809
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1998
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TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000858372
<NAME> CASH ACCOUNT TRUST
<SERIES>
<NUMBER> 03
<NAME> TAX-EXEMPT PORTFOLIO
<MULTIPLIER> 1000
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<FISCAL-YEAR-END> APR-30-1998
<PERIOD-START> OCT-31-1997
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<INVESTMENTS-AT-VALUE> 364,284
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<SHARES-COMMON-PRIOR> 220,791
<ACCUMULATED-NII-CURRENT> 0
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