Filed electronically with the Securities and Exchange Commission on
November 10, 1999
File No. 33-34645
File No. 811-6103
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. 14 /_X_/
and/or --
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /___/
Amendment No. 16 /_X_/
--
INVESTORS CASH TRUST
--------------------
(Exact Name of Registrant as Specified in Charter)
222 South Riverside Plaza, Chicago, Illinois 60606
--------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (312) 537-7000
Philip J. Collora
Investors Cash Trust
222 South Riverside Plaza
Chicago, Illinois 60606
----------------------------------------
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
/___/ Immediately upon filing pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (1)
/___/ 75 days after filing pursuant to paragraph (a) (2)
/_X_/ On November 17, 1999 pursuant to paragraph (b)
/___/ On__________________ pursuant to paragraph (a) (1)
/___/ On __________________ pursuant to paragraph (a) (2) of Rule 485
If Appropriate, check the following box:
/_X_/ This post-effective amendment designates a new effective date for
a previously filed post-effective amendment
<PAGE>
SCUDDER
Government Securities Portfolio
Scudder
Government Cash
Institutional Shares
Fund #144
Prospectus
November 17, 1999
As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.
<PAGE>
Contents
1 About The Portfolio
- --------------------------------------------------------------------------------
1 Investment objective
1 Main investment strategies
2 Main risks
3 Past performance
4 Fee and expense information
5 Investment adviser
6 About Your Investment
- --------------------------------------------------------------------------------
6 Transaction information
7 Buying shares
8 Selling shares
11 Distributions
12 Taxes
<PAGE>
About The Portfolio
Investment objective
The portfolio seeks to provide maximum current income consistent with stability
of capital.
The portfolio's investment objective may be changed by the portfolio's Board of
Trustees, without a vote of shareholders.
Main investment strategies
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 related repurchase
agreements. All such securities purchased mature in 12 months or less. The
portfolio maintains a dollar weighted average maturity of 90 days or less and is
managed to maintain a net asset value of $1.00 per share.
The portfolio may invest in repurchase agreements. Repurchase agreements are
instruments under which the portfolio acquires ownership of a U.S. Government
security from a broker-dealer or bank that agrees to repurchase such security at
a mutually agreed upon time and price, which price is higher than the purchase
price. The maturity of the securities subject to repurchase may exceed one year.
Currently, the portfolio will only enter into repurchase agreements with primary
U.S. Government securities dealers recognized by the Federal Reserve Bank of New
York that have been approved pursuant to procedures adopted by the Board of
Trustees.
The portfolio may invest in floating rate and variable rate instruments
(obligations that do not bear interest at fixed rates).
Securities are purchased and sold based on the investment manager's perception
of monetary conditions, the available supply of appropriate investments, and the
investment managers' projections for short-term interest rate movements.
Of course, there can be no guarantee that by following these investment
strategies, the portfolio will achieve its objective.
Risk management strategies
The portfolio seeks to minimize credit risk by investing exclusively in
short-term obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities.
1
<PAGE>
Main risks
As with most money market funds, the major factor affecting the portfolio's
performance is fluctuations in short-term interest rates. If short-term interest
rates fall, the portfolio's yield is also likely to fall. Floating rate or
variable rate securities have yields which adjust with changes in interest
rates. Accordingly, to the extent the portfolio invests in floating or variable
rate securities, as interest rates decrease or increase, the potential for
capital appreciation or depreciation is less than that of fixed-rate
obligations. Moreover, the investment manager's strategy or choice of specific
investments may not perform as expected. This portfolio may have lower returns
than other funds that invest in longer-term or lower-quality securities.
Some securities issued by U.S. Government agencies or instrumentalities are
supported only by the credit of that agency or instrumentality, while other
securities have 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.
An investment in the portfolio is not insured or guaranteed by the Federal
Deposit Insurance Company or any other government agency. Although the portfolio
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the portfolio.
2
<PAGE>
Past performance
No performance information is provided for the Institutional Shares since they
do not have a full calendar year of performance. For reference, the chart and
table below provide some indication of the risks of investing in the portfolio
by illustrating how the portfolio's Service Shares have performed from year to
year and by showing the average annual returns for the periods stated. Of
course, past performance is not necessarily an indication of future performance.
Annual total returns of the Service Shares* for years ended
December 31
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE.
CHART DATA:
- --------------------------------------------------------------------------------
5.71% 3.45% 2.95% 4.03% 5.83% 5.33% 5.93% 5.35%
1991 1992 1993 1994 1995 1996 1997 1998
- --------------------------------------------------------------------------------
* While Service Shares are not offered in this prospectus, they have
substantially similar annual returns as those of Institutional Shares because
both are invested in the same portfolio of securities. Annual returns would
differ only to the extent that the classes do not have the same expenses.
Institutional Shares have lower expenses than those of Service Shares.
For the period included in the bar chart, the Service Shares' highest return for
a calendar quarter was 1.57% (the first quarter of 1991), and the Service
Shares' lowest return for a calendar quarter was 0.71% (the fourth quarter of
1992 and the first quarter of 1993).
The Service Shares' year-to-date total return as of September 30, 1999 was
3.62%.
Average Annual Total Returns
For periods ended Government Securities
December 31, 1998 Portfolio -- Service Shares
- --------------------------------------------------------------------------------
One Year 5.35%
Five Years 5.21%
Since Portfolio Inception* 4.86%
- --------------------------------------------------------------------------------
* Inception date for the Service Shares of the portfolio is September 27,
1990.
3
<PAGE>
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold Institutional Shares of the
portfolio.
- --------------------------------------------------------------------------------
Shareholder Fees (fees paid directly from your investment): Institutional
Shares
- --------------------------------------------------------------------------------
Maximum sales charge (load) imposed on purchases (as % of NONE
offering price)
- --------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as % of redemption NONE
proceeds)
- --------------------------------------------------------------------------------
Maximum sales charge (load) imposed on reinvested NONE
dividends/distribution
- --------------------------------------------------------------------------------
Redemption fee (as % of amount redeemed, if applicable) NONE
- --------------------------------------------------------------------------------
Exchange fee NONE
- --------------------------------------------------------------------------------
Annual portfolio operating expenses (expenses that are deducted from portfolio
assets):
- --------------------------------------------------------------------------------
Management fee 0.15%
- --------------------------------------------------------------------------------
Distribution (12b-1) fees NONE
- --------------------------------------------------------------------------------
Other expenses 0.05%*
- --------------------------------------------------------------------------------
Total annual portfolio operating expenses 0.20%
- --------------------------------------------------------------------------------
* "Other Expenses" are based on estimated amounts for each class for the current
fiscal year.
Example
This example is to help you compare the cost of investing in the Institutional
Shares of the portfolio with the cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the Institutional Shares
expenses as shown above. It assumes a 5% annual return, the reinvestment of all
dividends and distributions, and "Total annual portfolio operating expenses"
remaining the same each year. The expenses would be the same whether you sold
your shares at the end of each period or continued to hold them. Actual
portfolio expenses and returns vary from year to year, and may be higher or
lower than those shown.
- --------------------------------------------------------------------------------
Institutional Shares
- --------------------------------------------------------------------------------
One Year $ 20
- --------------------------------------------------------------------------------
Three Years $ 64
- --------------------------------------------------------------------------------
Five Years $ 113
- --------------------------------------------------------------------------------
Ten Years $ 255
- --------------------------------------------------------------------------------
4
<PAGE>
Investment adviser
The portfolio retains the investment management firm of Scudder Kemper
Investments, Inc. (the "Adviser"), 345 Park Avenue, New York, New York, to
manage its daily investment and business affairs subject to the policies
established by the portfolio's Board. The Adviser actively manages the
portfolio's investments. Professional management can be an important advantage
for investors who do not have the time or expertise to invest directly in
individual securities. The Adviser is one of the largest and most experienced
investment management organizations worldwide, managing more than $290 billion
in assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, and private family and individual accounts.
The Adviser received an investment management fee of 0.07% of the portfolio's
average daily net assets on an annual basis for the fiscal year ended March 31,
1999 reflecting the effect of expense limitations then in effect.
Portfolio management
The following investment professionals are associated with the portfolio as
indicated:
<TABLE>
<CAPTION>
Name & Title Joined the Portfolio Background
- -----------------------------------------------------------------------------------
<S> <C> <C>
Frank J. Rachwalski, Jr. 1990 Joined the Adviser in 1973 and
Lead Manager (inception) began his investment career at
that time. He has been
responsible for the trading and
portfolio management of money
market funds since 1974.
Jerri I. Cohen 1998 Joined the Adviser in 1981 as an
Manager accountant and began her
investment career in 1992 as a
money market trader.
- -----------------------------------------------------------------------------------
</TABLE>
Year 2000 readiness
Like all mutual funds, this portfolio could be affected by the inability of some
computer systems to recognize the year 2000. The Adviser has a year 2000
readiness program designed to address this problem, and has researched the
readiness of suppliers and business partners as well as issuers of securities
the portfolio owns. Still, there's some risk that the year 2000 problem could
materially affect the portfolio's operations (such as its ability to calculate
net asset value and process purchases and redemptions), its investments, or
securities markets in general.
5
<PAGE>
About Your Investment
Transaction information
Share price
Scudder Fund Accounting Corporation determines the net asset value per share of
each class of the portfolio on each day the New York Stock Exchange (the
"Exchange") is open for trading, at 2:00 p.m., 4:00 p.m. and 5:00 p.m. Eastern
time.
The portfolio seeks to maintain a net asset value of $1.00 per share of each
class, and values its portfolio instruments at amortized cost. Calculations are
made to compare the value of the portfolio's investments, valued at amortized
cost, with market-based values. In order to value its investments at amortized
cost, the portfolio purchases only securities with a maturity of 12 days or
less, and maintains a dollar-weighted average portfolio maturity of 90 days or
less.
The net asset value per share is the value of one share, and is determined by
dividing the value of the portfolio's total assets attributable to the
applicable class, less all liabilities attributable to that class, by the total
number of shares outstanding for that class.
Minimum balances
The minimum initial investment and account balance is $1,000,000. There is no
required minimum investment amount for subsequent investments.
For each class of shares account balances will be reviewed periodically and the
portfolio reserves the right, following 60 days written notice to shareholders,
to redeem all shares in accounts that have a value below the required minimum
for at least 30 days where such a reduction in value has occurred due to a
redemption, exchange or transfer out of the account.
The minimum investment requirements may be waived or lowered for investments
effected through banks and other institutions that have entered into special
arrangements with Kemper Distributors, Inc. ("KDI") on behalf of the portfolio
and for investments effected on a group basis by certain other entities and
their employees, such as pursuant to a payroll deduction plan and for
investments made in an Individual Retirement Account. Investment minimums may
also be waived for trustees and officers of Investors Cash Trust (the "Trust").
6
<PAGE>
Buying shares
1. You may open an account by calling toll free from any continental state:
1-800-537-3177. Give the fund and class to be invested in, name(s) in which
the account is to be registered, address, Social Security or taxpayer
identification number, dividend payment election, amount to be wired, name of
the wiring bank and name and telephone number of the person to be contacted
in connection with the order. An account number will then be assigned.
2. Instruct the wiring bank to transmit the specified amount to:
UMB Bank, N.A.
10th and Grand Avenue Kansas City, Missouri 64106 ABA Number 101-000-695 DDA#
144:98-0120-0321-1
Attention: Government Securities Portfolio: Institutional Shares
Account Number (as assigned by the telephone representative) and amount
invested in the portfolio.
3. Complete a Purchase Application. Indicate the services to be used. A complete
Purchase Application must be received by Kemper Service Company (the
"Shareholder Servicing Agent") before the Expedited Redemption Service can be
used. Mail the Purchase Application to:
Kemper Service Company
Attn: Institutional Funds Client Services
222 South Riverside Plaza, 33rd Floor
Chicago, IL 60606
Once your order is received by Kemper Service Company or its agent, and they
have determined that it is in "good order," it will be processed at the next
determined share price calculated. Wire purchase orders received between 2 p.m.
and 4 p.m. Eastern time may be rejected based on certain guidelines described in
the Statement of Additional Information. Wire purchase orders that arrive, are
accepted, and are funded before 4 p.m. will be processed that day.
Shares purchased by wire will receive that day's dividend if effected at or
prior to the 4:00 p.m. Eastern time net asset value determination, otherwise
such shares will receive the dividend for the next calendar day.
Additional purchases by wire
Instruct the wiring bank to transmit the specified amount to UMB Bank, N.A. with
the information stated above.
7
<PAGE>
Initial purchase by mail
1. Complete a Purchase Application and indicate the services to be used.
2. Mail the Purchase Application and check payable to "Government Securities
Portfolio" to the Shareholder Servicing Agent at the address set forth above.
Orders for purchase accompanied by a check or other negotiable bank draft will
be accepted and effected as of 5:00 p.m. Eastern time on the next business day
following receipt, and such shares will receive the dividend for the next
calendar day following the day when 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.
Additional purchases by mail
1. Send a check with a letter of instruction including your account number and
the portfolio and class name, to the appropriate address listed above. Write
your fund account number on the check. If the check is returned to the
portfolio because of insufficient funds a $10 fee will be charged.
2. Mail the check to the Shareholder Servicing Agent at the address set forth
above.
Purchase restrictions
The portfolio and KDI each reserves the right to reject or limit purchases of
shares for any reason. Also, from time to time, the portfolio may temporarily
suspend the offering of its shares to new investors. During the period of such
suspension, persons who are already shareholders normally are permitted to
continue to purchase additional shares and to have dividends reinvested.
Selling shares
Upon receipt by the Shareholder Servicing Agent of a redemption request in
proper form, shares of the portfolio will be redeemed at their next determined
net asset value. (See "Share Price.") For the shareholders' convenience, the
Trust has established several different redemption methods.
The Trust may suspend the right of redemption during any period when (i) trading
on the Exchange is restricted or the Exchange is closed, (ii) the SEC has by
order permitted such suspension, (iii) an emergency, as defined by rules of the
SEC, exists making disposal of portfolio securities or determination of the
value of the net assets of the portfolio not reasonably practicable.
8
<PAGE>
Processing time
Payment for shares you sell will be made as promptly as practicable but in no
event later than seven days after receipt of a properly executed request. If you
have share certificates, those must accompany your order in proper form for
transfer. When you place an order to sell shares for which the portfolio may not
yet have received good payment (i.e. purchases by check or certain Automated
Clearing House Transactions), the portfolio may delay transmittal of the
proceeds until it has determined that collected funds have been received for the
purchase of such shares. This may be up to 10 days from receipt by the portfolio
of the purchase amount. 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, the redemption of such shares by the portfolio may be subject to a
contingent deferred sales charge as explained in the prospectus for the other
fund.
Redemption by Expedited Redemption Service
If Expedited Redemption Service has been elected on the Purchase Application on
file with the Transfer Agent, redemption of shares may be requested by
telephoning the Transfer Agent on any day the Trust and the Custodian are open
for business.
No redemption of shares purchased by check will be permitted pursuant to the
Expedited Redemption Service until ten business days after those shares have
been credited to the shareholder's account. To initiate an expedited redemption:
1. Telephone the request to the Shareholder Servicing Agent by calling toll-fee
from any continental state: 1-800-537-3177
2. Fax your request to 1-800-537-9960, or
3. Mail the request to the Shareholder Servicing Agent at the address set forth
above.
Proceeds of Expedited Redemptions will be wired to your bank indicated in the
Purchase Application. If an Expedited Redemption request for the portfolio is
received by the Transfer Agent by 2:00 p.m. (Eastern time) on a day when the
Trust and the Custodian are open for business, the redemption proceeds will
normally be transmitted to your bank that same day. In the case of investments
in the portfolio that have been effected through banks and other institutions
that have entered into special arrangements with the Trust, the full amount of
the redemption proceeds will be transmitted by wire.
9
<PAGE>
Redemption by mail
To redeem shares by mail follow these instructions:
1. Write a letter of instruction. Indicate the dollar amount or number of shares
to be redeemed. Refer to your portfolio account number and give your Social
Security or taxpayer identification number (where applicable).
2. Sign the letter in exactly the same way the account was registered. If there
is more than one owner of the shares, all must sign.
3. A signature guarantee is required unless you sell shares worth $50,000 or
less and the proceeds are payable to the shareholder of record at the address
of record. You can obtain a guarantee from most brokerage houses and
financial institutions, although not from a notary public. The portfolio will
normally send you the proceeds within one business day following your
request, but may take up to seven business days (or longer in the case of
shares recently purchased by check).
4. Mail letter to the Shareholder Servicing Agent at the address set forth under
"Initial Purchase By Wire."
Redemption by telephone
To speak with a service representative, call 1-800-537-3177 from 8:30 a.m. to
6:00 p.m. Eastern time. You may have redemption proceeds of up to $50,000 sent
to your address of record without providing a signature guarantee.
Redemption by fax
Send your fax to 1-800-537-9960 and include:
1. the name of the portfolio and the class and account number you are redeeming
from;
2. your name(s) and address as they appear on the account;
3. the dollar amount or number of shares you wish to redeem;
4. your signature(s) as it appears on your account; and
5. a daytime phone number.
A representative will call to confirm your request before processing.
10
<PAGE>
Share certificates
When certificates for shares have been issued, they must be mailed to or
deposited with the Transfer 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 an account holder, with signatures guaranteed. 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 Transfer to Minors Act), executors,
administrators, trustees or guardians.
Third party transactions
If you buy and sell shares of the portfolio with the assistance of a financial
services firm (other than the portfolio's distributor), that member may charge a
fee for that service. This prospectus should be read in connection with such
firms' material regarding their fees and services. You should contact your firm
for information concerning purchasing and selling shares.
Distributions
The portfolio's dividends are declared daily and distributed monthly to
shareholders. Any dividends or capital gains distributions declared in October,
November or December with a record date in such month and paid during the
following January will be treated by you for federal income tax purposes as if
received on December 31 of the calendar year declared. The portfolio 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
Subchapter M of the Internal Revenue Code.
Income dividends and capital gain dividends, if any, of the portfolio will be
credited to shareholder accounts in full and fractional shares of the portfolio
at net asset value, except that, upon written request to the Shareholder
Servicing Agent, a shareholder may choose to receive income and capital gain
dividends in cash.
If an investment is in the form of a retirement plan, all dividends and capital
gain distributions must be reinvested into the shareholder's account.
Distributions are generally taxable whether received in cash or reinvested.
Exchanges among other mutual funds may also be taxable events.
11
<PAGE>
Taxes
Generally, dividends from net investment income are taxable to shareholders as
ordinary income. Long-term capital gains distributions, if any, are taxable to
shareholders as long-term capital gains, regardless of length of time
shareholders have owned shares. Short-term capital gains and any other taxable
income distributions are taxable as ordinary income. A portion of dividends from
ordinary income may qualify for the dividends-received deduction for
corporations.
The portfolio sends detailed tax information about the amount and type of its
distributions by January 31 of the following year.
The portfolio may be required to withhold U.S. federal income tax at the rate of
31% of all taxable distributions payable to shareholders who fail to provide the
portfolio with their correct taxpayer identification number or to make required
certifications, or who have been notified by the IRS that they are subject to
backup withholding. Any such withheld amounts may be credited against the
shareholder's U.S. federal income tax liability.
You may be subject to state, local, and foreign taxes on portfolio distributions
and dispositions of portfolio shares. You should consult your tax advisor
regarding the particular tax consequences of an investment in the portfolio.
12
<PAGE>
This page
intentionally
left blank.
<PAGE>
Additional information about Institutional Shares of the portfolio may be found
in the Statement of Additional Information and in shareholder reports.
Shareholder inquiries may be made by calling the toll-free telephone number
listed below. The Statement of Additional Information contains more detailed
information on the portfolio's investments and operations. The semiannual and
annual shareholder reports contain a discussion of the market conditions and the
investment strategies that significantly affected the portfolio's performance
during the last fiscal year, as well as a listing of portfolio holdings and
financial statements. These and other portfolio documents may be obtained
without charge from the following sources:
- --------------------------------------------------------------------------------
By Telephone Call Institutional Funds Client Services at
1-800-537-3177
- --------------------------------------------------------------------------------
By Mail Kemper Distributors, Inc.
222 S. Riverside Plaza, 33rd Floor
Attn: Institutional Client Services
Chicago, IL 60606
or
Public Reference Section
Securities and Exchange Commission
Washington, D.C. 20549-6009
(a duplication fee is charged)
- --------------------------------------------------------------------------------
By Fax 1-800-537-9960
- --------------------------------------------------------------------------------
In Person Public Reference Room
Securities and Exchange Commission,
Washington, D.C.
(Call 1-800-SEC-0330)
- --------------------------------------------------------------------------------
By Internet http://www.sec.gov
email address: [email protected]
- --------------------------------------------------------------------------------
The Statement of Additional Information dated November 17, 1999 is incorporated
by reference into this prospectus (is legally a part of this prospectus).
Investment Company Act file number: 811-6103
<PAGE>
Government Cash
Managed Shares
November 17, 1999
Prospectus
Government Securities Portfolio
222 South Riverside Plaza, Chicago, Illinois 60606
Mutual funds:
o are not FDIC-insured
o have no bank guarantees
o may lose value
As with all mutual funds, the Securities and Exchange Commission (SEC) does not
approve or disapprove these shares or determine whether the information in this
prospectus is truthful or complete. It is a criminal offense for anyone to
inform you otherwise.
<PAGE>
Contents
1 About The Portfolio
- --------------------------------------------------------------------------------
1 Investment objective
1 Main investment strategies
2 Main risks
3 Past performance
4 Fee and expense information
5 Investment adviser
6 About Your Investment
- --------------------------------------------------------------------------------
6 Transaction information
7 Buying shares
8 Selling shares
12 Distributions
12 Taxes
<PAGE>
About The Portfolio
Investment objective
The portfolio seeks to provide maximum current income consistent with stability
of capital.
The portfolio's investment objective may be changed by the portfolio's Board of
Trustees, without a vote of shareholders.
Main investment strategies
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 related repurchase
agreements. All such securities purchased mature in 12 months or less. The
portfolio maintains a dollar weighted average maturity of 90 days or less and is
managed to maintain a net asset value of $1.00 per share.
The portfolio may invest in repurchase agreements. Repurchase agreements are
instruments under which the portfolio acquires ownership of a U.S. Government
security from a broker-dealer or bank that agrees to repurchase such security at
a mutually agreed upon time and price, which price is higher than the purchase
price. The maturity of the securities subject to repurchase may exceed one year.
Currently, the portfolio will only enter into repurchase agreements with primary
U.S. Government securities dealers recognized by the Federal Reserve Bank of New
York that have been approved pursuant to procedures adopted by the Board of
Trustees.
The portfolio may invest in floating rate and variable rate instruments
(obligations that do not bear interest at fixed rates).
Securities are purchased and sold based on the investment manager's perception
of monetary conditions, the available supply of appropriate investments, and the
investment managers' projections for short-term interest rate movements.
Of course, there can be no guarantee that by following these investment
strategies, the portfolio will achieve its objective.
Risk management strategies
The portfolio seeks to minimize credit risk by investing exclusively in
short-term obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities.
1
<PAGE>
Main risks
As with most money market funds, the major factor affecting the portfolio's
performance is fluctuations in short-term interest rates. If short-term interest
rates fall, the portfolio's yield is also likely to fall. Floating rate or
variable rate securities have yields which adjust with changes in interest
rates. Accordingly, to the extent the portfolio invests in floating or variable
rate securities, as interest rates decrease or increase, the potential for
capital appreciation or depreciation is less than that of fixed-rate
obligations. Moreover, the investment manager's strategy or choice of specific
investments may not perform as expected. This portfolio may have lower returns
than other funds that invest in longer-term or lower-quality securities.
Some securities issued by U.S. Government agencies or instrumentalities are
supported only by the credit of that agency or instrumentality, while other
securities have 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.
An investment in the portfolio is not insured or guaranteed by the Federal
Deposit Insurance Company or any other government agency. Although the portfolio
seeks to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the portfolio.
2
<PAGE>
Past performance
No performance information is provided for the Managed Shares since they do not
have a full calendar year of performance. For reference, the chart and table
below provide some indication of the risks of investing in the portfolio by
illustrating how the portfolio's Service Shares have performed from year to year
and by showing the average annual returns for the periods stated below. Of
course, past performance is not necessarily an indication of future performance.
Annual total returns of the Service Shares* for years ended December 31
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE.
BAR CHART DATA:
1991 5.71%
1992 3.45%
1993 2.95%
1994 4.03%
1995 5.83%
1996 5.33%
1997 5.93%
1998 5.35%
* While Service Shares are not offered in this prospectus, they have
substantially similar annual returns as those of Managed Shares because
both are invested in the same portfolio of securities. Annual returns
would differ only to the extent that the classes do not have the same
expenses. Managed Shares have lower total operating expenses than those
of Service Shares.
For the period included in the bar chart, the Service Shares' highest return for
a calendar quarter was 1.57% (the first quarter of 1991), and the Service
Shares' lowest return for a calendar quarter was 0.71% (the fourth quarter of
1992 and the first quarter of 1993).
The Service Shares' year-to-date total return as of September 30, 1999 was
3.62%.
Average Annual Total Returns
For periods ended Government Securities
December 31, 1998 Portfolio -- Service Shares
- --------------------------------------------------------------------------------
One Year 5.35%
Five Years 5.21%
Since Portfolio Inception* 4.86%
- --------------------------------------------------------------------------------
* Inception date for the Service Shares of the portfolio is September 27,
1990.
3
<PAGE>
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold Managed Shares of the portfolio.
- --------------------------------------------------------------------------------
Managed
Shareholder Fees (fees paid directly from your investment): Shares
- --------------------------------------------------------------------------------
Maximum sales charge (load) imposed on purchases (as % of NONE
offering price)
- --------------------------------------------------------------------------------
Maximum deferred sales charge (load) (as % of redemption NONE
proceeds)
- --------------------------------------------------------------------------------
Maximum sales charge (load) imposed on reinvested NONE
dividends/distribution
- --------------------------------------------------------------------------------
Redemption fee (as % of amount redeemed, if applicable) NONE
- --------------------------------------------------------------------------------
Exchange fee NONE
- --------------------------------------------------------------------------------
Annual portfolio operating expenses (expenses that are
deducted from portfolio assets):
- --------------------------------------------------------------------------------
Management fee 0.15%
- --------------------------------------------------------------------------------
Distribution (12b-1) fees NONE
- --------------------------------------------------------------------------------
Other expenses 0.35%*
- --------------------------------------------------------------------------------
Total annual portfolio operating expenses 0.50%
- --------------------------------------------------------------------------------
* "Other Expenses" are based on estimated amounts for each class for the
current fiscal year.
Example
This example is to help you compare the cost of investing in the Managed Shares
of the portfolio with the cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the Managed Shares' expenses as
shown above. It assumes a 5% annual return, the reinvestment of all dividends
and distributions, and "Total annual portfolio operating expenses" remaining the
same each year. The expenses would be the same whether you sold your shares at
the end of each period or continued to hold them. Actual portfolio expenses and
returns vary from year to year, and may be higher or lower than those shown.
- --------------------------------------------------------------------------------
Managed Shares
- --------------------------------------------------------------------------------
One Year $ 51
- --------------------------------------------------------------------------------
Three Years $ 159
- --------------------------------------------------------------------------------
Five Years $ 278
- --------------------------------------------------------------------------------
Ten Years $ 624
- --------------------------------------------------------------------------------
4
<PAGE>
Investment adviser
The portfolio retains the investment management firm of Scudder Kemper
Investments, Inc. (the "Adviser"), 345 Park Avenue, New York, New York, to
manage its daily investment and business affairs subject to the policies
established by the portfolio's Board. The Adviser actively manages the
portfolio's investments. Professional management can be an important advantage
for investors who do not have the time or expertise to invest directly in
individual securities. The Adviser is one of the largest and most experienced
investment management organizations worldwide, managing more than $290 billion
in assets globally for mutual fund investors, retirement and pension plans,
institutional and corporate clients, and private family and individual accounts.
The Adviser received an investment management fee of 0.07% of the portfolio's
average daily net assets on an annual basis for the fiscal year ended March 31,
1999, reflecting the effect of expense limitations then in effect.
Portfolio management
The following investment professionals are associated with the portfolio as
indicated:
Name & Title Joined the Portfolio Background
- --------------------------------------------------------------------------------
Frank J. Rachwalski, Jr. 1990 Joined the Adviser in 1973 and
Lead Manager (inception) began his investment career at
that time. He has been
responsible for the trading and
portfolio management of money
market funds since 1974.
Jerri I. Cohen 1998 Joined the Adviser in 1981 as an
Manager accountant and began her
investment career in 1992 as a
money market trader.
- --------------------------------------------------------------------------------
Year 2000 readiness
Like all mutual funds, this portfolio could be affected by the inability of some
computer systems to recognize the year 2000. The Adviser has a year 2000
readiness program designed to address this problem, and has researched the
readiness of suppliers and business partners as well as issuers of securities
the portfolio owns. Still, there's some risk that the year 2000 problem could
materially affect the portfolio's operations (such as its ability to calculate
net asset value and process purchases and redemptions), its investments, or
securities markets in general.
5
<PAGE>
About Your Investment
Transaction Information
Share price
Scudder Fund Accounting Corporation determines the net asset value per share of
each class of the portfolio on each day the New York Stock Exchange (the
"Exchange") is open for trading, at 2:00 p.m., 4:00 p.m. and 5:00 p.m. Eastern
time.
The portfolio seeks to maintain a net asset value of $1.00 per share of each
class, and values its portfolio instruments at amortized cost. Calculations are
made to compare the value of the portfolio's investments, valued at amortized
cost, with market-based values. In order to value its investments at amortized
cost, the portfolio purchases only securities with a maturity of 12 days or
less, and maintains a dollar-weighted average portfolio maturity of 90 days or
less.
The net asset value per share is the value of one share, and is determined by
dividing the value of the portfolio's total assets attributable to the
applicable class, less all liabilities attributable to that class, by the total
number of shares outstanding for that class.
Minimum balances
The minimum initial investment and account balance is $100,000. The minimum for
each additional investment is $1,000 and $100 for IRAs.
Account balances will be reviewed periodically and the portfolio reserves the
right, following 60 days written notice to shareholders, to redeem all shares in
accounts that have a value below the required minimum for at least 30 days where
such a reduction in value has occurred due to a redemption, exchange or transfer
out of the account.
The minimum investment requirements may be waived or lowered for investments
effected through banks and other institutions that have entered into special
arrangements with Kemper Distributors, Inc. ("KDI") on behalf of the portfolio
and for investments effected on a group basis by certain other entities and
their employees, such as pursuant to a payroll deduction plan and for
investments made in an Individual Retirement Account. Investment minimums may
also be waived for trustees and officers of Investors Cash Trust (the "Trust").
6
<PAGE>
Buying shares
1. You may open an account by calling toll free from any continental
state: 1-800-537-3177. Give the fund and class to be invested in,
name(s) in which the account is to be registered, address, Social
Security or taxpayer identification number, dividend payment election,
amount to be wired, name of the wiring bank and name and telephone
number of the person to be contacted in connection with the order. An
account number will then be assigned.
2. Instruct the wiring bank to transmit the specified amount to:
UMB Bank, N.A.
10th and Grand Avenue
Kansas City, Missouri 64106
ABA Number 101-000-695
DDA# 244:98-0120-0321-1
Attention: Government Securities Portfolio: Managed Shares
Account Number (as assigned by the telephone representative) and amount
invested in the portfolio.
3. Complete a Purchase Application. Indicate the services to be used. A
complete Purchase Application must be received by Kemper Service
Company (the "Shareholder Servicing Agent") before the Expedited
Redemption Service can be used. Mail the Purchase Application to:
Kemper Service Company
Attn: Institutional Funds Client Services
222 South Riverside Plaza, 33rd Floor
Chicago, IL 60606
Once your order is received by Kemper Service Company or its agent, and they
have determined that it is in "good order," it will be processed at the next
determined share price calculated. Wire purchase orders received between 2 p.m.
and 4.p.m. Eastern time may be rejected based on certain guidelines described in
the Statement of Additional Information. Wire purchase orders that arrive, are
accepted, and are funded before 4 p.m. will be processed that day.
Shares purchased by wire will receive that day's dividend if effected at or
prior to the 4:00 p.m. Eastern time net asset value determination, otherwise
such shares will receive the dividend for the next calendar day.
Additional purchases by wire
Instruct the wiring bank to transmit the specified amount to UMB Bank, N.A. with
the information stated above.
7
<PAGE>
Initial purchase by mail
1. Complete a Purchase Application and indicate the services to be used.
2. Mail the Purchase Application and check payable to "Government
Securities Portfolio" to the Shareholder Servicing Agent at the address
set forth above.
Orders for purchase accompanied by a check or other negotiable bank draft will
be accepted and effected as of 5:00 p.m. Eastern time on the next business day
following receipt, and such shares will receive the dividend for the next
calendar day following the day when 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.
Additional purchases by mail
1. Send a check with a letter of instruction including your account number
and the portfolio and class name, to the appropriate address listed
above. Write your fund account number on the check. If the check is
returned to the portfolio because of insufficient funds a $10 fee will
be charged.
2. Mail the check to the Shareholder Servicing Agent at the address set
forth above.
Automatic Investment Plan
You may arrange to make investments of $50 or more on a regular basis through
automatic deductions from your bank checking account. Please call 1-800-537-3177
for more information and enrollment.
Purchase restrictions
The portfolio and KDI each reserves the right to reject or limit purchases of
shares for any reason. Also, from time to time, the portfolio may temporarily
suspend the offering of its shares to new investors. During the period of such
suspension, persons who are already shareholders normally are permitted to
continue to purchase additional shares and to have dividends reinvested.
Selling shares
Upon receipt by the Shareholder Servicing Agent of a redemption request in
proper form, shares of the portfolio will be redeemed at their next determined
net asset value. (See "Share Price.") For the shareholders' convenience, the
Trust has established several different redemption methods.
8
<PAGE>
The Trust may suspend the right of redemption during any period when (i) trading
on the Exchange is restricted or the Exchange is closed, (ii) the SEC has by
order permitted such suspension, (iii) an emergency, as defined by rules of the
SEC, exists making disposal of portfolio securities or determination of the
value of the net assets of the portfolio not reasonably practicable.
Processing time
Payment for shares you sell will be made as promptly as practicable but in no
event later than seven days after receipt of a properly executed request. If you
have share certificates, those must accompany your order in proper form for
transfer. When you place an order to sell shares for which the portfolio may not
yet have received good payment (i.e. purchases by check or certain Automated
Clearing House Transactions), the portfolio may delay transmittal of the
proceeds until it has determined that collected funds have been received for the
purchase of such shares. This may be up to 10 days from receipt by the portfolio
of the purchase amount. 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, the redemption of such shares by the portfolio may be subject to a
contingent deferred sales charge as explained in the prospectus for the other
fund.
Redemption by Expedited Redemption Service
If Expedited Redemption Service has been elected on the Purchase Application on
file with the Transfer Agent, redemption of shares may be requested by
telephoning the Transfer Agent on any day the Trust and the Custodian are open
for business.
No redemption of shares purchased by check will be permitted pursuant to the
Expedited Redemption Service until ten business days after those shares have
been credited to the shareholder's account. To initiate an expedited redemption:
1. Telephone the request to the Shareholder Service Agent by calling
toll-fee from any continental state: 1-800-537-3177
2. Fax your request to 1-800-537-9960, or
3. Mail the request to the Shareholder Servicing Agent at the address set
forth above.
Proceeds of Expedited Redemptions will be wired to your bank indicated in the
Purchase Application. If an Expedited Redemption request for the portfolio is
received by the Transfer Agent by 2:00 p.m. (Eastern time) on a day when the
Trust and the Custodian are open for business, the redemption proceeds will
normally be transmitted to your bank that same day. In the case of investments
in the portfolio that have been effected through banks and other institutions
that have entered into special arrangements with the Trust, the full amount of
the redemption proceeds will be transmitted by wire.
9
<PAGE>
Redemption by checkwriting
You may redeem shares by writing checks against your account balance in amounts
of at least $1,000 but no more than $5 million. A $10 service charge will be
assessed for checks that are written for less than $1,000. If there are
insufficient shares in your account to meet the withdrawal, checks will be
returned and a $10 service charge will be assessed by the Shareholder Servicing
Agent.
Your portfolio investments will continue to earn dividends until your check is
presented to the portfolio for payment. You should not attempt to close an
account by check because the exact balance at the time the check clears will not
be known when the check is written.
Redemption by mail
To redeem shares by mail follow these instructions:
1. Write a letter of instruction. Indicate the dollar amount or number of
shares to be redeemed. Refer to your portfolio account number and give
your Social Security or taxpayer identification number (where
applicable).
2. Sign the letter in exactly the same way the account was registered. If
there is more than one owner of the shares, all must sign.
3. A signature guarantee is required unless you sell shares worth $50,000
or less and the proceeds are payable to the shareholder of record at
the address of record. You can obtain a guarantee from most brokerage
houses and financial institutions, although not from a notary public.
The portfolio will normally send you the proceeds within one business
day following your request, but may take up to seven business days (or
longer in the case of shares recently purchased by check).
4. Mail letter to the Shareholder Servicing Agent at the address set forth
under "Initial Purchase By Wire."
Redemption by telephone
To speak with a service representative, call 1-800-537-3177 from 8:30 a.m. to
6:00 p.m. Eastern time. You may have redemption proceeds of up to $50,000 sent
to your address of record without providing a signature guarantee.
10
<PAGE>
Redemption by fax
Send your fax to 1-800-537-9960 and include:
1. the name of the portfolio and the class and account number you are
redeeming from;
2. your name(s) and address as they appear on the account;
3. the dollar amount or number of shares you wish to redeem;
4. your signature(s) as it appears on your account; and
5. a daytime phone number.
A representative will call to confirm your request before processing.
Redemption by Automatic Withdrawal Plan
You may arrange to receive automatic cash payments periodically. Call
1-800-537-3177 for information and an enrollment form.
Share certificates
When certificates for shares have been issued, they must be mailed to or
deposited with the Transfer 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 an account holder, with signatures guaranteed. 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 Transfer to Minors Act), executors,
administrators, trustees or guardians.
Third party transactions
If you buy and sell shares of the portfolio with the assistance of a financial
services firm (other than the portfolio's distributor), that member may charge a
fee for that service. This prospectus should be read in connection with such
firms' material regarding their fees and services. You should contact your firm
for information concerning purchasing and selling shares.
Redemption-in-kind
The portfolio reserves the right to honor any request for redemption or
repurchase order by "redeeming in kind," that is, by giving you marketable
securities (which typically will involve brokerage costs for you to liquidate)
rather than cash; in most cases, the portfolio will not make a
redemption-in-kind unless your requests over 90-day period total more than
$250,000 or 1% of the portfolio's assets, whichever is less.
11
<PAGE>
Distributions
The portfolio's dividends are declared daily and distributed monthly to
shareholders. Any dividends or capital gains distributions declared in October,
November or December with a record date in such month and paid during the
following January will be treated by you for federal income tax purposes as if
received on December 31 of the calendar year declared. The portfolio 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
Subchapter M of the Internal Revenue Code.
Income dividends and capital gain dividends, if any, of the portfolio will be
credited to shareholder accounts in full and fractional shares of the portfolio
at net asset value, except that, upon written request to the Shareholder
Servicing Agent, a shareholder may choose to receive income and capital gain
dividends in cash.
If an investment is in the form of a retirement plan, all dividends and capital
gain distributions must be reinvested into the shareholder's account.
Distributions are generally taxable whether received in cash or reinvested.
Exchanges among other mutual funds may also be taxable events.
Taxes
Generally, dividends from net investment income are taxable to shareholders as
ordinary income. Long-term capital gains distributions, if any, are taxable to
shareholders as long-term capital gains, regardless of length of time
shareholders have owned shares. Short-term capital gains and any other taxable
income distributions are taxable as ordinary income. A portion of dividends from
ordinary income may qualify for the dividends-received deduction for
corporations.
The portfolio sends detailed tax information about the amount and type of its
distributions by January 31 of the following year.
The portfolio may be required to withhold U.S. federal income tax at the rate of
31% of all taxable distributions payable to shareholders who fail to provide the
portfolio with their correct taxpayer identification number or to make required
certifications, or who have been notified by the IRS that they are subject to
backup withholding. Any such withheld amounts may be credited against the
shareholder's U.S. federal income tax liability.
You may be subject to state, local, and foreign taxes on portfolio distributions
and dispositions of portfolio shares. You should consult your tax advisor
regarding the particular tax consequences of an investment in the portfolio.
12
<PAGE>
Additional information about Managed Shares of the portfolio may be found in the
Statement of Additional Information and in shareholder reports. Shareholder
inquiries may be made by calling the toll-free telephone number listed below.
The Statement of Additional Information contains more detailed information on
the portfolio's investments and operations. The semiannual and annual
shareholder reports contain a discussion of the market conditions and the
investment strategies that significantly affected the portfolio's performance
during the last fiscal year, as well as a listing of portfolio holdings and
financial statements. These and other portfolio documents may be obtained
without charge from your financial adviser, from the Shareholder Servicing Agent
at 1-800-537-3177, from the Securities and Exchange Commission Web site
(http://www.sec.gov), and the principal underwriter. You can also visit or write
the SEC and obtain copies for a fee: Public Reference Section, Securities and
Exchange Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC
20549 (1-800-SEC-0330).
The Statement of Additional Information dated November 17, 1999 is incorporated
by reference into this prospectus (is legally a part of this prospectus).
Investment Company Act file number:
Investors Cash Trust 811-6103
<PAGE>
INVESTORS CASH TRUST
STATEMENT OF ADDITIONAL INFORMATION
November 17, 1999
Government Securities Portfolio
Scudder Government Cash Institutional Shares
Government Cash Managed Shares
222 South Riverside Plaza, Chicago, Illinois 60606
1-800-537-3177
This Statement of Additional Information contains information about the Scudder
Government Cash Institutional Shares ("Institutional Shares") and Government
Cash Managed Shares ("Managed Shares") (collectively the "Shares") of Government
Securities Portfolio (the "Portfolio) offered by Investors Cash Trust (the
"Trust"), an open-end diversified management investment company. This Statement
of Additional Information is not a prospectus and should be read in conjunction
with the prospectus for the Institutional and managed Shares of the Portfolio
dated November 17, 1999. The prospectus may be obtained without charge from the
Trust at the address or telephone number on this cover or the firm from which
this Statement of Additional Information was received and is also available
along with other related materials at the SEC's Internet web site
(http://www.sec.gov). The Portfolio's Annual Report dated March 31, 1999 is
incorporated by reference into and is hereby deemed to be a part of this
Statement of Additional Information. The Portfolio's Annual Report accompanies
this Statement of Additional Information, and may be obtained without charge by
calling 1-800-537-3177.
------------
TABLE OF CONTENTS
Page
----
Investment Restrictions............................... 1
Investment Policies and Techniques.................... 2
Investment Manager and Shareholder Services........... 4
Portfolio Transactions................................ 7
Purchase and Redemption of Shares..................... 8
Dividends, Taxes and Net Asset Value.................. 11
Performance........................................... 13
Officers and Trustees................................. 15
Special Features...................................... 18
Shareholder Rights.................................... 19
1
<PAGE>
INVESTMENT RESTRICTIONS
The Trust has adopted for the Portfolio certain investment restrictions which
cannot be changed for the Portfolio without approval by holders of a majority of
its outstanding voting shares. As defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), this means the lesser of the vote of (a) 67% of the
Portfolio's shares 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 Portfolio's outstanding shares. Except as otherwise noted, the
Portfolio's investment objective and other policies may be changed by the
Portfolio's Board of Trustees, without a vote of shareholders.
The Portfolio has elected to be classified as a diversified open-end investment
company.
As a matter of fundamental policy, the Portfolio may not:
1. borrow money, except as permitted under the 1940 Act, and as interpreted or
modified by regulatory authority having jurisdiction, from time to time;
2. issue senior securities, except as permitted under the 1940 Act, and as
interpreted or modified by regulatory authority having jurisdiction, from
time to time;
3. concentrate its investments in a particular industry, as that term is used
in the 1940 Act, and as interpreted or modified by regulatory authority
having jurisdiction, from time to time;
4. engage in the business of underwriting securities issued by others, except
to the extent that the Portfolio may be deemed to be an underwriter in
connection with the disposition of portfolio securities;
5. purchase or sell real estate, which term does not include securities of
companies which deal in real estate or mortgages or investments secured by
real estate or interests therein, except that the Portfolio reserves
freedom of action to hold and to sell real estate acquired as a result of
the Portfolio's ownership of securities;
6. purchase physical commodities or contracts relating to physical
commodities; or
7. make loans, except as permitted under the 1940 Act, and as interpreted or
modified by regulatory authority having jurisdiction, from time to time.
The following policies are non-fundamental, and may be changed or eliminated for
the Portfolio by its Board without a vote of the Portfolio's shareholders:
The Portfolio may not:
1. 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,
2. write, purchase, or sell puts, calls or combinations thereof; or
3. purchase any securities other than obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, and repurchase
agreements of such obligations, except in connection with a master/feeder
fund structure. However, if the Fund implements a master/feeder fund
structure, shareholder approval is required.
1
<PAGE>
INVESTMENT POLICIES AND TECHNIQUES
Descriptions in this Statement of Additional Information of a particular
investment practice or technique in which the Portfolio may engage or a
financial instrument which the Portfolio may purchase are meant to describe the
spectrum of investments that Scudder Kemper Investments, Inc. (the "Adviser" or
"Scudder Kemper"), in its discretion, might, but is not required to, use in
managing the Portfolio's assets. The Adviser may, in its discretion, at any
time, employ such practice, technique or instrument for one or more funds but
not for all funds advised by it. Furthermore, it is possible that certain types
of financial instruments or investment techniques described herein may not be
available, permissible, economically feasible or effective for their intended
purposes in all markets. Certain practices, techniques, or instruments may not
be principal activities of the Portfolio, but, to the extent employed, could,
from time to time, have a material impact on the Portfolio's performance.
The Portfolio described in this Statement of Additional seek to provide maximum
current income consistent with the stability of capital. The Portfolio is
managed to maintain a net asset value of $1.00 per share.
The Trust 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 Trust pools individual and institutional investors' money that it
uses to buy high quality money market instruments. The Trust is a series
investment company that is able to provide investors with a choice of separate
investment portfolios. It currently offers two investment Portfolios: the
Government Securities Portfolio and the Treasury Portfolio. The Government
Portfolio currently offers three classes of shares: the Service Shares, the
Government Securities Managed Shares (the "Managed Shares"), and the Scudder
Government Securities Institutional Shares (the "Institutional Shares").
Institutional and Managed Shares are described herein. Because the Portfolio
combines its shareholders' money, it can buy and sell large blocks of
securities, which reduces transaction costs and maximizes yields. The Trust is
managed by investment professionals who analyze market trends to take advantage
of changing conditions and who seek to minimize risk by diversifying the
Portfolio's investments. The Portfolio's investments are subject to price
fluctuations resulting from rising or declining interest rates and is 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 Portfolio
invests, are generally considered to be among the safest available. Thus, the
Portfolio 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 the Portfolio will achieve its objective or that it
will maintain a net asset value of $1.00 per share.
Government Securities Portfolio. The 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 Fannie Mae and Farm Credit System. Also, as 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. The Portfolio's investments
in obligations issued or guaranteed by U.S. Government agencies or
instrumentalities currently are limited to those issued or guaranteed by the
following entities: Federal Land Bank, Farm Credit System, Federal Home Loan
Banks, Federal Home Loan Mortgage Corporation, Fannie Mae, Government National
Mortgage Association and Export-Import Credit Bank. The foregoing list of
acceptable entities is subject to change by action of the Trust's Board of
Trustees; however, the Trust will provide written notice to shareholders at
least sixty (60) days before any purchase by the Portfolio of obligations issued
or guaranteed by an entity not named above.
There can be no assurance that the Portfolio's objective can be met.
Repurchase Agreements. Repurchase agreements are instruments under which the
Portfolio acquires ownership of a U.S. Government security from a broker-dealer
or bank that agrees to repurchase the U.S. Government security at a mutually
agreed upon time and price (which price is higher than the purchase price),
thereby determining the yield
2
<PAGE>
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, the Portfolio might incur expenses in
enforcing its rights, and could experience losses, including a decline in the
value of the underlying securities and loss of income. The Portfolio may enter
into repurchase agreements with any member bank of the Federal Reserve System or
any domestic broker/dealer which is recognized as a reporting Government
securities dealer, if the creditworthiness of the bank or broker/dealer has been
determined by the Adviser to be at least as high as that of other obligations
the portfolio may purchase or to be at least equal to that of issuers of
commercial paper rated within the two highest grades assigned by Moody's, S&P or
Duff. Currently, the Portfolio will only enter into repurchase agreements with
primary U.S. Government securities dealers recognized by the Federal Reserve
Bank of New York that have been approved pursuant to procedures adopted by the
Board of Trustees of the Trust.
A repurchase agreement provides a means for the Portfolio to earn taxable income
on funds for periods as short as overnight. It is an arrangement under which the
purchaser (i.e., the Portfolio) acquires a security ("Obligation") and the
seller agrees, at the time of sale, to repurchase the Obligation at a specified
time and price. Securities subject to a repurchase agreement are held in a
segregated account, and the value of such securities kept at least equal to the
repurchase price on a daily basis. The repurchase price may be higher than the
purchase price, the difference being income to the Portfolio, or the purchase
and repurchase prices may be the same, with interest at a stated rate due to the
Portfolio together with the repurchase price on the date of repurchase. In
either case, the income to the Portfolio (which is taxable) is unrelated to the
interest rate on the Obligation itself. Obligations will be held by the
custodian or in the Federal Reserve Book Entry system.
For purposes of the 1940 Act, a repurchase agreement is deemed to be a loan from
the Portfolio to the seller of the Obligation subject to the repurchase
agreement, and is therefore subject to that Portfolio's investment restriction
applicable to loans. It is not clear whether a court would consider the
Obligation purchased by the Portfolio subject to a repurchase agreement as being
owned by the Portfolio or as being collateral for a loan by the Portfolio to the
seller. In the event of the commencement of bankruptcy or insolvency proceedings
with respect to the seller of the Obligation before repurchase of the Obligation
under a repurchase agreement, the Portfolio may encounter delay and incur costs
before being able to sell the security. Delays may involve loss of interest or
decline in price of the Obligation. If the court characterized the transaction
as a loan and the Portfolio has not perfected an interest in the Obligation, the
Portfolio may be required to return the Obligation to the seller's estate and be
treated as an unsecured creditor of the seller. As an unsecured creditor, the
Portfolio is at risk of losing some or all of the principal and income involved
in the transaction. As with any unsecured debt obligation purchased for the
Portfolio, the Adviser seeks to minimize the risk of loss through repurchase
agreements by analyzing the creditworthiness of the obligor, in this case the
seller of the Obligation. Apart from the risk of bankruptcy or insolvency
proceedings, there is also the risk that the seller may fail to repurchase the
Obligation, in which case the Portfolio may incur a loss if the proceeds to the
Portfolio of the sale to a third party are less than the repurchase price.
However, if the market value of the Obligation subject to the repurchase
agreement becomes less than the repurchase price (including interest), the
Portfolio will direct the seller of the Obligation to deliver additional
securities so that the market value of all securities subject to the repurchase
agreement will equal or exceed the repurchase price. It is possible that the
Portfolio will be unsuccessful in seeking to enforce the seller's contractual
obligation to deliver additional securities.
The Portfolio will not purchase illiquid securities including repurchase
agreements maturing in more than seven days if, as a result thereof, more than
10% of the Portfolio's net assets valued at the time of the transaction would be
invested in such securities.
The Portfolio may invest in U.S. Government securities having rates of interest
that are adjusted periodically or which "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 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
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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. The 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.
INVESTMENT ADVISER AND SHAREHOLDER SERVICES
Investment Adviser. Scudder Kemper Investments, Inc. (the "Adviser" or "Scudder
Kemper"), 345 Park Avenue, New York, New York, is the Portfolio's investment
adviser. The Adviser is approximately 70% owned by Zurich Insurance Company, 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. The balance of Scudder Kemper is owned by
Scudder Kemper's officers and employees. Responsibility for overall management
of the Portfolio rests with the Trust's Board of Trustees and officers. Pursuant
to an investment management agreement, the Adviser acts as the Portfolio'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 Trust if elected to such positions.
The Portfolio pays the expenses of its operations, including the fees and
expenses of 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 related
thereto, brokerage commissions or transaction costs, taxes, registration fees,
the fees and expenses of qualifying the Portfolio and its shares for
distribution under federal and state securities laws and membership dues in the
Investment Company Institute or any similar organization. The Portfolio's
expenses generally are allocated between the Portfolios of the Trust 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
Portfolio 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.
In certain cases the investments for the Portfolio are managed by the same
individuals who manage one or more other mutual funds advised by the Adviser
that have similar names, objectives and investment styles as the Portfolio. You
should be aware that the Portfolio is likely to differ from these other mutual
funds in size, cash flow pattern and tax matters. Accordingly, the holdings and
performance of the Portfolio can be expected to vary from those of the other
mutual funds.
The investment management agreement continues in effect from year to year for
the Portfolio 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
Trust, cast in person at a meeting called for such purpose, and (b) by the
shareholders of the Portfolio or the Board of Trustees. If continuation is not
approved for the 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 1940 Act. It may be terminated at
any time upon 60 days' notice by either party, or by a majority vote of the
outstanding shares of the Portfolio with respect to that Portfolio, and will
terminate automatically upon assignment.
At December 31, 1997, 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
Portfolio and Scudder changed its name to Scudder Kemper Investments, Inc.
On September 7, 1998, the businesses of Zurich (including Zurich's 70% interest
in the Adviser) and the financial services businesses of B.A.T Industries p.l.c.
("B.A.T") were combined to form a new global insurance and financial services
company known as Zurich Financial Services Group. By way of a dual holding
company structure, former
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Zurich shareholders initially owned approximately 57% of Zurich Financial
Services Group, with the balance initially owned by former B.A.T shareholders.
Upon consummation of this transaction, the Portfolio's then current investment
management agreement with the Adviser was deemed to have been assigned and,
therefore, terminated. The Board approved a new investment management agreement
(the "Agreement") with the Adviser, which is substantially identical to the
prior investment management agreement, except for the dates of execution and
termination. The Agreement became effective on September 7, 1998 upon the
termination of the then current investment management agreement, and was
approved at a shareholder meeting held in December 1998.
For services and facilities furnished, the Trust pays a monthly investment
management fee of 1/12 of 0.15% of average daily net assets of the Government
Securities Portfolio and Treasury Portfolio (a separate portfolio of the Trust).
The investment management fee is computed based on the combined average daily
net assets of the Portfolios and allocated between the Portfolios based upon the
relative net assets of each. Pursuant to the investment management agreement,
the Trust incurred investment management fees for the Government Securities
Portfolio of $535,000, $342,000 and $320,000 for the fiscal years ended March
31, 1999, 1998 and 1997, respectively. For this purpose, "Portfolio operating
expenses" do not include taxes, interest, extraordinary expenses, brokerage
commissions or transaction costs. During the fiscal years ended March 31, 1999,
1998, 1997, under expense limits then in effect, the Adviser (or an affiliate)
absorbed $308,000, $294,000 and $150,000, respectively, of the Portfolio's
operating expenses. Scudder Kemper and certain affiliates have agreed, for a one
year period ending August 31, 2000, to cap expenses of the Managed Shares at the
same basis point levels as had existed on the Scudder Fund, Inc.- Scudder
Government Money Market Series Managed Shares in the month prior to that fund's
ceasing of operations. Furthermore, from time to time Scudder Kemper may
voluntarily waive a portion of its fee.
Certain trustees or officers of the Trust are also directors or officers of the
Adviser and its affiliates as indicated under "Officers and Trustees."
Fund Accounting Agent. Scudder Fund Accounting Corporation ("SFAC"), Two
International Place, Boston, Massachusetts 02110, a subsidiary of the Adviser,
is responsible for determining the daily net asset value per share of the
Portfolio and maintaining all accounting records related thereto. Currently,
SFAC receives no fee for its services to the Portfolio; 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 underwriting and distribution
agreement ("distribution agreement"), Kemper Distributors, Inc. ("KDI"), 222
South Riverside Plaza, Chicago, Illinois 60606, an affiliate of the Adviser,
serves as distributor and principal underwriter for the Trust to provide
information and services for existing and potential shareholders. The
distribution agreement provides that KDI shall appoint various firms to provide
cash management services for their customers or clients through the Trust.
As principal underwriter for the Trust, KDI acts as agent of the Trust in the
sale of its shares of the Portfolio. KDI pays all its expenses under the
distribution agreement. The Trust 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 selling
group agreements with various firms to provide distribution services for
Portfolio shareholders. KDI receives no compensation from the Trust as principal
underwriter for the Shares and pays all expenses of distribution of the Shares
not otherwise paid by dealers and other financial services firms. KDI may, from
time to time, pay or allow discounts, commissions or promotional incentives, in
the form of cash, to firms that sell Shares of the Portfolio.
The distribution agreement continues 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 Trust, including the Trustees who are not interested persons of the Trust
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 Trust or by KDI upon 60
days' written notice. Termination of the distribution agreement by the Trust may
be by
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vote of a majority of the Board of Trustees, or a majority of the Trustees
who are not interested persons of the Trust and who have no direct or indirect
financial interest in the agreement, or a "majority of the outstanding voting
securities" of the Trust as defined under the 1940 Act.
Administrative services are provided to the Managed Shares of the Portfolio
under an administration services agreement ("administration agreement") with
KDI. KDI bears all its expenses of providing services pursuant to the
administration agreement between KDI and the Managed Shares of the Portfolio,
including the payment of service fees. Managed Shares of the Portfolio currently
pay KDI an administrative services fee, payable monthly, at an annual rate of up
to 0.15% of average daily net assets attributable to those shares of the
Portfolio. In the discretion of the Board of Trustees of the Trust, the
administrative services fee may be increased to a maximum of 0.25% of average
daily net assets.
KDI has entered into related arrangements with various banks, broker-dealer
firms and other service or administrative firms ("firms") that provide services
and facilities for their customers or clients who are investors in Managed
Shares of the Portfolio. The firms provide such office space and equipment,
telephone facilities and personnel as is necessary or beneficial for providing
information and services to their clients. Such services and assistance may
include, but are not limited to, establishing and maintaining accounts and
records, processing purchase and redemption transactions, answering routine
inquiries regarding the Portfolio, assistance to clients in changing dividend
and investment options, account designations and addresses and such other
administrative services as may be agreed upon from time to time and permitted by
applicable statute, rule or regulation. Currently, KDI pays each firm a service
fee, normally payable monthly, at an annual rate of up to 0.15% of the average
daily net assets in the Portfolio's Managed Shares accounts that it maintains
and services. Firms to which service fees may be paid may include affiliates of
KDI.
In addition, KDI may from time to time, from its own resources, pay certain
firms additional amounts for ongoing administrative services and assistance
provided to their customers and clients who are shareholders of the Managed
Shares of the Portfolio.
KDI also may provide some of the above services and may retain any portion of
the fee under the administration agreement not paid to firms to compensate
itself for administrative functions performed for the Managed Shares of the
Portfolio.
Custodian, Transfer Agent and Shareholder Service Agent. State Street Bank and
Trust Company ("State Street"), 225 Franklin Street, Boston, Massachusetts
02110, as custodian, has custody of all securities and cash of the Trust. State
Street attends to the collection of principal and income, and payment for and
collection of proceeds of securities bought and sold by the Portfolio. Investors
Fiduciary Trust Company ("IFTC"), 801 Pennsylvania Avenue, Kansas City, Missouri
64105, is the transfer agent of the Portfolio. 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
the Shareholder Service Agent annual account fees of a maximum of $13 per year
per account plus out-of-pocket expense reimbursement. During the fiscal year
ended March 31, 1999 and 1998, IFTC remitted shareholder service fees in the
amount of $41,000 and $26,000, respectively, to the Shareholder Service Agent
with respect to services provided to the Portfolio.
Firms provide varying arrangements for their clients with respect to the
purchase and redemption of Portfolio shares and the confirmation thereof. Such
firms are responsible for the prompt transmission of purchase and redemption
orders. Some firms may establish higher minimum investment requirements than set
forth below. A firm may arrange with its clients for other investment or
administrative services. Such firms may independently establish and charge
additional amounts to their clients for such services, which charges would
reduce the clients' yield or return. Firms may also hold Portfolio shares in
nominee or street name as agent for and on behalf of their clients. In such
instances, the Trust'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 from the Managed
Shares of the Portfolio for recordkeeping 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 conditions and limitations. Some firms may
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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 and this Statement
of Additional Information should be read in connection with such firm's material
regarding its fees and services.
Independent Auditors and Reports To Shareholders. The Trust's independent
auditors, Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois 60606,
audit and report on the Trust's annual financial statements, review certain
regulatory reports and the Trust's federal income tax return, and perform other
professional accounting, auditing, tax and advisory services when engaged to do
so by the Trust. 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 Trust.
PORTFOLIO TRANSACTIONS
Brokerage
Allocation of brokerage is supervised by the Adviser.
The primary objective of the Adviser in placing orders for the purchase and sale
of securities for the 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 the familiarity of
Scudder Investor Services, Inc. ("SIS") with commissions charged on comparable
transactions, as well as by comparing commissions paid by the Portfolio to
reported commissions paid by others. The Adviser routinely reviews commission
rates, execution and settlement services performed and makes internal and
external comparisons.
The Portfolio's purchases and sales of fixed-income securities are generally
placed by the Adviser with primary market makers for these securities on a net
basis, with out any brokerage commission being paid by the Portfolio. Trading
does, however, involve transaction costs. Transactions with dealers serving as
primary market makers reflect the spread between the bid and asked prices.
Purchases of underwritten issues may be made, which will include an underwriting
fee paid to the underwriter.
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 brokerage and research services to the Adviser or the
Portfolio. The term "research services" 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, if applicable, for
the Portfolio to pay a brokerage commission in excess of that which another
broker might charge for executing the same transaction on account of execution
services and the receipt of research services. The Adviser has negotiated
arrangements, which are not applicable to most fixed-income transactions, with
certain broker/dealers pursuant to which a broker/dealer will provide research
services to the Adviser or the Portfolio in exchange for the direction by the
Adviser of brokerage transactions to the broker/dealer. These arrangements
regarding receipt of research services generally apply to equity security
transactions. The Adviser may place orders with a broker/dealer on the basis
that the broker/dealer has or has not sold shares of the Portfolio. 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.
To the maximum extent feasible, it is expected that the Adviser will place
orders for portfolio transactions through SIS, which is a corporation registered
as a broker/dealer and a subsidiary of the Adviser; SIS will place orders on
behalf of the Portfolio with issuers, underwriters or other brokers and dealers.
SIS will not receive any commission, fee or other remuneration from the
Portfolio for this service.
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Although certain research services from broker/dealers may be useful to a
Portfolio and to the Adviser, it is the opinion of the Adviser that such
information only supplements the Adviser's 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 a Portfolio, and not all such information is used by the
Adviser in connection with a Portfolio. 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
Portfolio.
The Trustees review, from time to time, whether the recapture for the benefit of
the Portfolio of some portion of the brokerage commissions or similar fees paid
by the Portfolio 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 a Portfolio for such purchases. During the
last three fiscal years each Portfolio 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
Purchase of Shares
Shares of the Portfolio are sold at net asset value next determined after an
order and payment are received in the form described in the prospectus.
Investors must indicate the class of shares in the Portfolio in which they wish
to invest. The Portfolio has established a minimum initial investment for the
Managed Shares of $100,000 and $1,000 ($100 for IRAs) for each subsequent
investment. The minimal initial investment for the Institutional Shares is
$1,000,000. There is no minimum for each subsequent investment. These minimums
may be changed at anytime in management's discretion. Firms offering Portfolio
shares may set higher minimums for accounts they service and may change such
minimums at their discretion. The Trust may waive the minimum for purchases by
trustees, directors, officers or employees of the Trust or the Adviser and its
affiliates. 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 Portfolio 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 Portfolio seeks to remain as fully invested as possible at all times in
order to achieve maximum income. Since the 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
Portfolio has adopted procedures for the convenience of its shareholders and to
ensure that the Portfolio receives investable funds. An investor wishing to open
an account should use the Account Information Form available from the Trust 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 Portfolio 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.
Orders for purchase of Managed Shares and Institutional Shares of the 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 that
day's dividend if effected at or prior to the 4:00 p.m. Eastern time net asset
value determination for the Portfolio. The Portfolio, Shareholder Servicing
Agent and Cash Products Group each reserves the right to reject any purchase
order. The Portfolio will accept purchase orders after 4:00 p.m. eastern time
and before 5:00 p.m. eastern time, but will reject certain purchase orders
during this time period. Orders received between 4:00 p.m. and 5 p.m. eastern
time will be accepted from existing Portfolio shareholders only. In addition,
purchase orders received after 4:00 p.m. may be rejected based upon maximum
limits set by the Portfolio as to purchases from a single investor and as to the
aggregate amount of purchases accepted after 4 p.m. on a given day.
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Orders for purchase accompanied by a check or other negotiable bank draft will
be accepted and effected as of 4:00 p.m. Eastern 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.
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 Portfolio bank account
(144:98-0120-0321-1 for the Institutional Shares and 244:98-0120-0321-1 for the
Managed Shares) and further credit to your account number.
Redemption of Shares
General. Upon receipt by the Shareholder Service Agent of a request in the form
described below, shares of the Portfolio will be redeemed by the Portfolio at
the next determined net asset value. If processed or prior to 4:00 p.m. Eastern
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 the Portfolio will receive the net asset value of such
shares and all declared but unpaid dividends on such shares.
If shares of the Portfolio to be redeemed were purchased by check or through
certain Automated Clearing House ("ACH") transactions, the Portfolio 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 Portfolio of the purchase amount. Shareholders may not use
ACH or Redemption Checks (see "Redemptions by Draft") 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.
The Portfolio 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 the Portfolio's
investments is not reasonably practicable, or (ii) it is not reasonably
practicable for the Portfolio 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 Portfolio's shareholders.
Although it is the Portfolio 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 Portfolio will
pay the redemption price 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 may deem fair and equitable. If such a distribution occurs,
shareholders receiving securities and selling them could receive less than the
redemption value of such securities and in addition would incur certain
transaction costs. Such a redemption would not be as liquid as a redemption
entirely in cash. The Portfolio has elected to be governed by Rule 18f-1 under
the 1940 Act, pursuant to which the Portfolio is obligated to redeem shares of
the 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.
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
Portfolio 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
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Portfolio or its agents reasonably believe, based upon reasonable verification
procedures, that the telephone instructions are genuine. The shareholder will
bear the risk of 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 Portfolio reserves
the right to redeem an account that falls below the minimum investment level.
Thus, a shareholder that makes only the minimum initial investment and then
redeems any portion thereof might have the account redeemed. 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
Portfolio redeems the shareholder account.
Financial services firms provide varying arrangements for their clients to
redeem Portfolio shares. Such firms may independently establish and charge
amounts to their clients for such services.
Regular Redemptions. When shares are held for the account of a shareholder by
the Portfolio's transfer agent, the shareholder may redeem them by sending a
written request with signatures guaranteed (if applicable) to Kemper Service
Company, 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
without a signature guarantee is sufficient for redemptions by individual or
joint account holders, and trust, executor, guardian and custodian account
holders, provided the trustee, executor guardian or custodian is named in the
account registration. Other institutional account holders 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 1-800-537-3177. 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 Portfolio 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 2:00 p.m. Eastern 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 1-800-337-3177 or in writing, subject to the
limitations on liability described under "General" above. The Portfolio is not
responsible for the efficiency of the federal wire system or the account
holder's financial services firm or bank. The Portfolio 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 Portfolio 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
10
<PAGE>
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 Portfolio reserves the right to terminate or modify
this privilege at any time.
Redemptions By Draft. (Managed Shares Only) Upon request, shareholders will be
provided with drafts to be drawn on Portfolio ("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 $1,000. If the check is less than $1,000 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 Portfolio receives the Redemption Check. A shareholder
wishing to use this method of redemption must complete and file an Account
Application which is available from the Portfolio 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 Portfolio
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
Portfolio. In addition, firms may impose minimum balance requirements in order
to offer this feature. Firms may also impose fees to investors for this
privilege or establish variations of minimum check amounts if approved by the
Portfolio.
Unless one signer is authorized on the Account Application, 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 Portfolio's books for at
least 10 days. Shareholders may not use this procedure to redeem shares held in
certificate form. The Portfolio reserves the right to terminate or modify this
privilege at any time.
The Portfolio 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 Portfolio shares in excess of the value of the Portfolio account or in
an amount less than $1,000; when a Redemption Check is presented that would
require redemption of 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 Portfolio also provide
special redemption features through charge or debit cards and checks that redeem
Portfolio 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.
Internet access
World Wide Web Site The address of the Kemper site is http://www.kemper.com. The
site offers guidance on global investing and developing strategies to help meet
financial goals and provides access to the Kemper investor relations department
via e-mail. The site also enables users to access or view fund prospectuses and
profiles with links between summary information in Profiles and details in the
Prospectus. Users can fill out new account forms on-line, order free software,
and request literature on funds.
DIVIDENDS, TAXES AND NET ASSET VALUE
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 last calendar of each month if a business day, otherwise
on the next business day. The Portfolio 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 Portfolio 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 Portfolio dividends in of another Kemper Mutual Fund,
shareholders must maintain a minimum account value of $100,000 and 1,000,000 for
the Managed
11
<PAGE>
and Institutional shares of this Portfolio, respectively, and also must maintain
a minimum account value of $100,000 and 1,000,000 in the corresponding shares of
the fund in which dividends are reinvested.
The 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 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 Portfolio are accrued each day. While the Portfolio's
investments are valued at amortized cost, there will be no unrealized gains or
losses on such investments. However, should the net asset value of the 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.
If the shareholder elects to receive dividends in cash, checks will be mailed
monthly, within five business days of the reinvestment date (described below),
to the shareholder or any person designated by the shareholder. At the option of
the shareholder, cash dividends may be sent by Federal Funds wire. Shareholders
may request to have dividends sent by wire on the Account Application or by
contacting the Shareholder Service Agent (see "Purchase of Shares"). The
Portfolio reinvests dividend checks (and future dividends) in shares of the
Portfolio 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 Portfolio unless the shareholder requests that such
policy not be applied to the shareholder's account.
Taxes. The Portfolio intends 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. Dividends from the Portfolio do not qualify for the dividends
received deduction available to corporate shareholders.
If for any taxable year the Portfolio does not qualify for the special federal
income tax treatment afforded regulated investment companies, all of its taxable
income will be subject to federal income tax at regular corporate rates (without
any deduction for distributions to its shareholders). In such event, dividend
distributions would be taxable to shareholders to the extent of current
accumulated earnings and profits, and would be eligible for the dividends
received deduction, in the case of corporate shareholders.
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 Portfolio may adjust its schedule for dividend
reinvestment for the month of December to assist it in complying with reporting
and minimum distribution requirements contained in the Code.
The Code restricts the ability to invest tax-exempt bond proceeds at yields
materially higher than the yield on the issue. Tax advisers should be consulted
before investing tax-exempt bond proceeds in the Portfolio.
Portfolio dividends that are derived from interest on direct obligations of the
U.S. Government and certain of its agencies and instrumentalities may be exempt
from state and local taxes in certain states. In other states, arguments can be
made that such distributions should be exempt from state and local taxes based
on federal law, 31 U.S.C. Section 3124, and the U.S. Supreme Court's
interpretation of that provision in AMERICAN BANK AND TRUST CO. v. DALLAS
COUNTY, 463 U.S. 855 (1983). The Portfolio currently intends to advise
shareholders of the proportion of its dividends that consists of such interest.
Shareholders should consult their tax advisers regarding the possible exclusion
of such portion of their dividends for state and local income tax purposes.
The 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
12
<PAGE>
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 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.
Net Asset Value. As described in the prospectus, the Portfolio values its
portfolio instruments at amortized cost, which does not take into account
unrealized capital gains or losses. This involves 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 the 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 the Portfolio's $1.00 per share net asset value, or if there were any
other deviation which the Board of Trustees of the Trust 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 the
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 Trust 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 held their
shares and receiving, upon redemption, a price per share lower than that which
they paid. On the other hand, if the 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 Trust
might supplement dividends in an effort to maintain the net asset value at $1.00
per share. Redemption orders received in connection with the administration of
checkwriting programs by certain dealers or other financial services firms prior
to the determination of the Portfolio's net asset value also may be processed on
a confirmed basis in accordance with procedures established by KDI.
PERFORMANCE
From time to time, the Portfolio may advertise several types of performance
information for the Portfolio, including "yield" and "effective yield." Each of
these figures is based upon historical earnings and is not representative of the
future performance of the Portfolio. The yield of the 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
when annualized. The effective yield will be slightly higher than the yield due
to this compounding effect.
The Portfolio's seven-day 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
the 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, 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 ("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
calculations.
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<PAGE>
The Portfolio's seven-day 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 seven-day effective yield is:
(seven-day base period return +1)365/7 - 1. The Portfolio may also advertise a
thirty-day effective yield in which case the formula is (thirty-day base period
return +1)365/30 - 1.
Because the Managed Shares and Institutional Shares of the Portfolio are new
classes of shares, there is no yield information as of the date of this
Statement of Additional Information.
The 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 Portfolio with that of its competitors.
Past performance cannot be a guarantee of future results.
The Portfolio may depict the historical performance of the securities in which
the 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 Portfolio
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 Portfolio.
The performance of the Portfolio may be compared to that of other mutual funds
tracked by Lipper, Inc. ("Lipper"). Lipper performance calculations include the
reinvestment of all capital gain and income dividends for the periods covered by
the calculations. The Portfolio's performance also may be compared to other
money market funds reported by IBC Financial Data, Inc. Money Fund Report(R) or
Money Market Insight(R) ("IBC Financial Data, Inc."), reporting services on
money market funds. As reported by IBC Financial Data, Inc., 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. In addition, investors may
want to compare the 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.
Investors also may want to compare the 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.
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. The Portfolio's yield will
fluctuate. Also, while the 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.
OFFICERS AND TRUSTEES
The officers and trustees of the Trust, their birth dates, 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.
JOHN W. BALLANTINE (2/16/46), Trustee, 1500 North Lake Shore Drive, Chicago,
Illinois; First Chicago NBD Corporation/The First National Bank of Chicago:
1996-1998 Executive Vice President and Chief Risk Management Officer; 1995-1996
Executive Vice President and Head of International Banking; 1992-1995 Executive
Vice President, Chief Credit and Market Risk Officer.
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<PAGE>
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.
DONALD L. DUNAWAY (3/8/37), Trustee, 7011 Green Tree Drive, Naples, Florida;
Retired; formerly, Executive Vice President, A. O. Smith Corporation
(diversified manufacturer).
ROBERT B. HOFFMAN (12/11/36), Trustee, 1530 North State Parkway, Chicago,
Illinois; Chairman, Harnischfeger Industries, Inc. (machinery for the mining and
paper industries); formerly, 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.
THOMAS W. LITTAUER (4/26/55), Trustee and 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.
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 Tax, U.S.
Department of Justice; Director; Bethlehem Steel Corp.
CORNELIA M. SMALL (7/28/44), Trustee*, 345 Park Avenue, New York, NY; Managing
Director, Adviser.
WILLIAM P. SOMMERS (7/22/33), Trustee, 24717 Harbour View Drive, Ponte Vedra
Beach, Florida; Consultant and Director, SRI Consulting; formerly, President and
Chief Executive Officer, SRI International prior thereto, Executive Vice
President, Iameter (medical information and educational service provider); prior
thereto, Senior Vice President and Director, Booz, Allen & Hamilton Inc.
(management consulting firm) ; Director, PSI, Inc., Evergreen Solar, Inc. and
Litton Industries.
MARK S. CASADY (9/21/60), President*, 345 Park Avenue, New York, New York;
Managing Director, Adviser.
PHILIP J. COLLORA (11/15/45), Vice President and Secretary*, 222 South Riverside
Plaza, Chicago, Illinois; Senior Vice President, Adviser.
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.
15
<PAGE>
BRENDA LYONS (2/21/63), Assistant 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), from 1989 to 1997.
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).
* Interested persons as defined in the 1940 Act.
The trustees and officers who are "interested persons" as designated above
receive no compensation from the Trust. The table below shows amounts paid or
accrued to those trustees who are not designated "interested persons" during the
Trust's fiscal year ended March 31, 1999, except that the information in the
last column is for calendar year 1998.
<TABLE>
<CAPTION>
Total
Compensation From
Aggregate Compensation Kemper Fund Complex
Name Of Trustee From Portfolio Paid To Trustees(1)
--------------- -------------- -------------------
<S> <C> <C>
John W. Ballantine(2) $ 0 $ 0
Lewis A. Burnham................................ 2,800 126,100
Donald L. Dunaway(3)............................ 3,100 135,000
Robert B. Hoffman............................... 2,800 116,100
Donald R. Jones................................. 2,800 129,600
Shirley D. Peterson............................. 2,600 108,800
William P. Sommers.............................. 2,600 108,800
</TABLE>
- --------------------
(1) 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.
(2) John W. Ballantine became a Trustee on May 18, 1999.
(3) Pursuant to deferred compensation agreements with the Kemper Funds,
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 all prior fiscal years are $13,700 for Mr. Dunaway
from Investors Cash Trust.
On October 8, 1999, the trustees and officers as a group owned less than 1% of
the outstanding shares of the Portfolio. No person owned of record 5% or more of
the outstanding shares of the Portfolio except the entities indicated in the
chart below owned more than 5 percent of the Service Shares of the portfolio.
Name And Address % Owned
- ---------------- -------
Spring Branch ISD
Food Service Account
P. O. Box 19432
Houston, TX 77224 13.00
Asset Preservation, Inc. FBO**
A. A. Timber Enterprises LLC
19794 Riverside Avenue
Anderson, CA 96007 8.57
** Beneficial owner.
16
<PAGE>
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
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 Value Series, Inc., Kemper Value Plus
Growth 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 Small Cap Relative Value Fund, Kemper-Dreman
Financial Services Fund, Kemper Value Fund, Kemper Classic Growth Fund, Kemper
Global Discovery Fund, Kemper High Yield Fund II, Kemper Equity Trust, Kemper
Income Trust, Kemper Funds Trust and Kemper Securities Trust ("Kemper Mutual
Funds") and certain "Money Market Funds" (Zurich Money Funds, Zurich Yieldwise
Funds, 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 Fund in
excess of $1,000,000 (except 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"). In addition to the current limits on
exchanges of shares with a value over $1,000,000, shares of a Kemper fund with a
value of $1,000,000 or less (except Kemper Cash Reserves Fund) acquired by
exchange from another Kemper fund, or from a money market fund, may not be
exchanged thereafter until they have been owned for 15 days, if, in the
investment manager's judgement, the exchange activity may have an adverse effect
on the fund. In particular, a pattern of exchanges that coincides with a "market
timing" strategy may be disruptive to the Kemper fund and therefore may be
subject to 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 the 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 effecting 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 firms or the 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 1-800-537-3177 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 regulations,
60 days' prior written notice of any termination or material change will be
provided.
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<PAGE>
Systematic Withdrawal Program (Managed Shares Only). An owner of $5,000 or more
of the 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 Portfolio
and may be terminated at any time by the shareholder or the Portfolio. Firms
provide varying arrangements for their clients to redeem shares of the Portfolio
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:
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 Trust has
established several investment and redemption programs using electronic funds
transfer via the Automated Clearing House (ACH). There is currently no charge by
the Trust 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
account. Your bank's crediting policies of these transferred funds may vary.
These features may be amended or terminated at any time by the Trust.
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 Portfolios.
SHAREHOLDER RIGHTS
The Trust is an open-end, diversified management investment company, organized
as a business trust under the laws of Massachusetts on March 2, 1990. The Trust
may issue an unlimited number of shares of beneficial interest in one or more
series or "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 Portfolio's shares are currently divided into
three classes: Service Shares, Managed Shares and Institutional Shares. While
only shares of the "Government Securities Portfolio" and "Treasury Portfolio"
are presently being offered, the Board of Trustees may authorize the issuance of
additional Portfolios if deemed desirable, each with its own investment
objective, policies and restrictions. Since the Trust offers multiple
Portfolios, it is known as a "series company." Shares of the 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. The Trust is not required to hold annual
shareholders' meetings and does not intend to do so. However, it will hold
special
18
<PAGE>
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 Trust, 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 1940 Act,
such as for the election of trustees, or when the Board of Trustees determines
that voting by class is appropriate.
The Trust generally is not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Trust ("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 Trust 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 Trust or any Portfolio,
establishing the 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 Trust, or any registration of the Trust
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 Trust 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 on 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 Trust, 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
Trust 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 Trust 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
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 trust 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 Trust (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
Trust. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Trust and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Trust or the trustees. Moreover, the Declaration of Trust provides for
indemnification out of Trust property for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust and the
Trust 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 Trust itself is unable to meet its obligations.
19
<PAGE>
20
<PAGE>
INVESTORS CASH TRUST
PART C. OTHER INFORMATION
<TABLE>
<CAPTION>
Item 23. Exhibits.
-------- ---------
<S> <C> <C> <C>
(a) (1) Amended and Restated Agreement and Declaration of Trust, dated March 9,
1990, is incorporated by reference to Post-Effective Amendment No. 7 to the
Registration Statement.
(2) Written Instrument Amending Agreement and Declaration of Trust, dated August
14, 1990, is incorporated by reference to Post-Effective Amendment No. 7 to
the Registration Statement.
(3) Written Instrument Amending Agreement and Declaration of Trust, dated
September 19, 1990, is incorporated by reference to Post-Effective Amendment
No. 7 to the Registration Statement.
(b) By-laws of the Trust are incorporated by reference to Post-Effective
Amendment No. 7 to the Registration Statement.
(c) (1) Text of Share Certificate is incorporated by reference to Post-Effective
Amendment No. 7 to the Registration Statement.
(2) Establishment and Declaration of Series of Beneficial Interest with respect
to the Government Cash Managed Shares and Scudder Government Cash
Institutional Shares of the Government Securities Portfolio is filed herein.
(d) Investment Management Agreement, dated September 7, 1998, is filed herein.
(e) (1) Underwriting and Distribution Services Agreement between the Registrant and
Kemper Distributors, Inc., dated September 7, 1998, is incorporated by
reference to Post-Effective Amendment No. 11 to the Registration Statement.
(2) Form of Selling Group Agreement is incorporated by reference to
Post-Effective Amendment No. 7 to the Registration Statement.
(f) Inapplicable.
(g) Custody Agreement between the Registrant, on behalf of Government Securities
Portfolio and Treasury Portfolio, and State Street Bank and Trust Company,
dated April 19, 1999, incorporated by reference to Post-Effective Amendment
No. 11 to the Registration Statement.
(h) (1) Agency Agreement, dated September 21, 1990, is incorporated by reference to
Post-Effective Amendment No. 7 to the Registration Statement.
(2) Supplement to Agency Agreement, dated April 1, 1991,is incorporated by
reference to Post-Effective Amendment No. 7 to the Registration Statement.
(3) Supplement to Agency Agreement, dated October 1, 1992, is incorporated by
reference to Post-Effective Amendment No. 7 to the Registration Statement.
1
<PAGE>
(4) Supplement to Agency Agreement, dated April 1, 1995, is incorporated by
reference to Post-Effective Amendment No. 8 to the Registration Statement.
(5) Administration and Shareholder Services Agreement, dated October 1, 1991, is
incorporated by reference to Post-Effective Amendment No. 7 to the
Registration Statement.
(6) Amendment to Administration and Shareholder Services Agreement, dated
December 1, 1993, is incorporated by reference to Post-Effective Amendment
No. 7 to the Registration Statement.
(7) Assignment and Assumption Agreement, dated February 1, 1995, is incorporated
by reference to Post-Effective Amendment No. 7 to the Registration Statement.
(8) Fund Accounting Services Agreements, each dated December 31, 1997, on behalf
of Government Securities Portfolio and Treasury Portfolio, respectively, is
incorporated by reference to Post-Effective Amendment No. 10 to the
Registration Statement.
(9) Form of Services Agreement by and among the Registrant, on behalf of
Government Securities portfolio, Kemper Distributors, Inc., and Kemper
Services Company, dated November 17, 1999, is filed herein.
(10) Form of Administration and Shareholder Services Agreement on behalf of
Government Securities Portfolio- Government Cash managed Shares, is filed
herein.
(i) Legal Opinion and Consent of Counsel is filed herein
(j) Consent of Independent Accountants is filed herein
(k) Inapplicable
(l) Inapplicable
(m) Inapplicable
(n) Inapplicable
(o) Mutual Funds Multi-Distribution System Plan - Rule 18f-3 Plan is filed
herein.
</TABLE>
Item 24. Persons Controlled by or under Common Control with Fund.
- -------- --------------------------------------------------------
None
Item 25. 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
2
<PAGE>
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.
Item 26. Business and 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 26.
<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.**
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.#
William H. Bolinder Director, Scudder Kemper Investments, Inc.**
Member, Group Executive Board, Zurich Financial Services, Inc.##
Chairman, Zurich-American Insurance Company o
Laurence W. Cheng Director, Scudder Kemper Investments, Inc.**
Member, Corporate Executive Board, Zurich Insurance Company of Switzerland##
Director, ZKI Holding Corporation xx
Gunther Gose Director, Scudder Kemper Investments, Inc.**
CFO and Member, Group Executive Board, Zurich Financial Services, Inc.##
CEO/Branch Offices, Zurich Life Insurance Company##
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 America o
Director, ZKI Holding Corporation xx
3
<PAGE>
Kathryn L. Quirk 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 Corporation oo
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 Financial Services, Inc.*
Director, Korea Bond Fund Management Co., Ltd.+
Cornelia M. Small Director and Vice President, Scudder Kemper Investments, Inc.**
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 Corporation oo
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
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 27. Principal Underwriters.
- -------- -----------------------
(a)
4
<PAGE>
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)
Positions and Offices with Positions and
Name Kemper Distributors, Inc. Offices with Registrant
---- ------------------------- -----------------------
<S> <C> <C> <C>
James L. Greenawalt President None
Thomas W. Littauer Director, Chief Executive Officer Trustee and Vice President
Kathryn L. Quirk Director, Secretary, Chief Legal
Officer and Vice President Vice President
James J. McGovern Chief Financial Officer and Vice
President None
Linda J. Wondrack Vice President and Chief Compliance
Officer Vice President
Paula Gaccione Vice President None
Michael E. Harrington Vice President None
Robert A. Rudell Vice President None
William M. Thomas Vice President None
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
Mark S. Casady Director, Chairman President
Stephen R. Beckwith Director None
</TABLE>
(c) Not applicable
Item 28. 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, State Street
Bank and
5
<PAGE>
Trust Company, 225 Franklin Street, Boston, Massachusetts 02110 or, in the case
of records concerning transfer agency functions, at the offices of State Street
Bank and Trust Company and of the shareholder service agent, Kemper Service
Company, 811 Main Street, Kansas City, Missouri 64105.
Item 29. Management Services.
- -------- --------------------
Inapplicable.
Item 30. Undertakings.
- -------- -------------
Inapplicable.
6
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this amendment to
its 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
9th day of November, 1999.
INVESTORS CASH TRUST
By /s/ Mark S. Casady
------------------------------
Mark S. Casady
President
Pursuant to the requirements of the Securities Act of 1933, this
amendment to its Registration Statement has been signed below on November 9,
1999, on behalf of the following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Mark S. Casady November 9 , 1999
- --------------------------------------
Mark S. Casady President
/s/ Thomas W. Littauer November 9 , 1999
- --------------------------------------
Thomas W. Littauer* Chairman and Trustee
/s/ John W. Ballantine November 9 , 1999
- --------------------------------------
John W. Ballantine* Trustee
/s/ Lewis A. Burnham November 9 , 1999
- --------------------------------------
Lewis A. Burnham* Trustee
/s/ Donald L. Dunaway November 9 , 1999
- --------------------------------------
Donald L. Dunaway* Trustee
/s/ Robert B. Hoffman November 9 , 1999
- --------------------------------------
Robert B. Hoffman* Trustee
/s/ Donald R. Jones November 9 , 1999
- --------------------------------------
Donald R. Jones* Trustee
/s/ Shirley D. Peterson November 9 , 1999
- --------------------------------------
Shirley D. Peterson* Trustee
<PAGE>
/s/ Cornelia M. Small
- --------------------------------------
Cornelia M. Small* Trustee November 9 , 1999
/s/ William P. Sommers November 9 , 1999
- --------------------------------------
William P. Sommers* Trustee
/s/ John R. Hebble November 9 , 1999
- --------------------------------------
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 contained in
Post-Effective Amendment No. 10
to the Registration Statement,
filed on July 28, 1998 and
Post-Effective Amendment No. 13
to the Registration Statement,
filed on September 3, 1999.
2
<PAGE>
File No. 33-34645
File No. 811-6103
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM N-1A
POST-EFFECTIVE AMENDMENT NO. 14
TO REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AND
AMENDMENT NO. 16
TO REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
INVESTORS CASH TRUST
<PAGE>
INVESTORS CASH TRUST
EXHIBIT INDEX
(c)(2)
(d)
(h)(9)
(h)(10)
(i)
(j)
(o)
2
Ex. c(2)
INVESTORS CASH TRUST
Establishment and Designation of Classes of Shares
of Beneficial Interest
(The "Instrument")
The undersigned, being a majority of the duly elected and qualified
Trustees of Investors Cash Trust, a Massachusetts business trust (the "Trust"),
acting pursuant to Article III, Section 1 of the Agreement and Declaration of
Trust dated March 2, 1990, as amended (the "Declaration of Trust"), hereby
further divide the authorized and unissued shares of beneficial interest (the
"Shares") of the series of the Trust heretofore designated as the Government
Securities Portfolio (the "Fund") into the three classes designated below in
paragraph 1 (each a "Class" and collectively the "Classes"), each Class to have
the special and relative rights specified in this Instrument:
1. The Classes of the Fund shall be designated as follows:
Service Shares
Government Cash Managed Shares
Scudder Government Cash Institutional Shares
2. The Shares of the Fund outstanding as of the close of business on
the date hereof are hereby redesignated as Service Shares.
3. Each Share shall be redeemable, and, except as provided below, shall
represent a pro rata beneficial interest in the assets attributable to such
Class of Shares of the Fund, and shall be entitled to receive its pro rata share
of net assets attributable to such Class of Shares of the Fund upon liquidation
of the Fund, all as provided in or not inconsistent with the Declaration of
Trust. Each Share shall have the voting, dividend, liquidation and other rights,
preferences, powers, restrictions, limitations, qualifications, terms and
conditions, as set forth in the Declaration of Trust.
4. Upon the effective date of this Instrument:
a. Each Share of each Class of the Fund shall be entitled to
one vote (or fraction thereof in respect of a fractional share) on
matters which such Shares (or Class of Shares) shall be entitled to
vote. Shareholders of the Fund shall vote together on any matter,
except to the extent otherwise required by the Investment Company Act
of 1940, as amended (the " 1940 Act"), or when the Trustees have
determined that the matter affects only the interest of Shareholders of
one or more Classes, in which case only the Shareholders of such Class
or Classes shall be entitled to vote thereon. Any matter shall be
deemed to have been effectively acted upon with respect to the Fund if
acted upon as provided in Rule 18f-2 under the 1940 Act or any
successor rule and in the Declaration of Trust.
b. Liabilities, expenses, costs, charges or reserves that
should be properly allocated to the Shares of a particular Class of the
Fund may, pursuant to a Plan adopted by the Trustees under Rule 18f-3
under the 1940 Act, or such similar rule under or provision or
<PAGE>
interpretation of the 1940 Act, be charged to and borne solely by such
Class and the bearing of expenses solely by a Class of Shares may be
appropriately reflected and cause differences in net asset value
attributable to, and the dividend, redemption and liquidation rights
of, the Shares of different Classes.
5. The Trustees (including any successor Trustees) shall have the right
at any time and from time to time to reallocate assets, liabilities and expenses
or to change the designation of any Class now or hereafter created, or to
otherwise change the special and relative rights of any such Class, provided
that such change shall not adversely affect the rights of Shareholders of such
Class.
Executed this 28th day of September, 1999.
/s/ John W. Ballantine
----------------------------------
John W. Ballantine, as Trustee
/s/ Lewis A. Burnham
----------------------------------
Lewis A. Burnham, as Trustee
/s/ Donald L. Dunaway
----------------------------------
Donald L. Dunaway, as Trustee
/s/ Robert B. Hoffman
----------------------------------
Robert B. Hoffman, as Trustee
/s/ Donald R. Jones
----------------------------------
Donald R. Jones, as Trustee
/s/ Thomas P. Littauer
----------------------------------
Thomas P. Littauer, as Trustee
/s/ Shirley D. Peterson
----------------------------------
Shirley D. Peterson, as Trustee
/s/ Cornelia M. Small
----------------------------------
Cornelia M. Small, as Trustee
/s/ William P. Sommers
----------------------------------
William P. Sommers, as Trustee
2
Exhibit d
INVESTMENT MANAGEMENT AGREEMENT
Investors Cash Trust
222 South Riverside Plaza
Chicago, Illinois 60606
September 7, 1998
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Government Securities Portfolio
Treasury Portfolio
Ladies and Gentlemen:
INVESTORS CASH 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 Government Securities Portfolio and the Treasury
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:
1. 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.
(b) By-Laws of the Trust as in effect on the date hereof (the "By-
Laws").
(c) 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.
(d) 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.
2. 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
each 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.
3. 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 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 Funds; assisting
in the resolution of accounting issues that may arise with respect to the Funds'
operations and consulting with the Funds'
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independent accountants, legal counsel and the Funds' 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.
4. 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
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.
5. 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
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<PAGE>
the last day of each month the unpaid balance of a fee equal to the excess of
(a) 1/12 of .15 of 1 percent of the combined average daily net assets as defined
below of the Funds for such month; 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 the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the 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.
6. 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.
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.
7. 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.
8. Duration and Termination of This Agreement. This Agreement shall remain in
force until September 30, 1999, 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
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<PAGE>
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.
9. 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.
10. 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 "Investors Cash
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
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.
11. 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.
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Yours very truly,
INVESTORS CASH TRUST, on behalf of
Government Securities Portfolio
Treasury Portfolio
By: /s/ Mark Casady
------------------------------------
President
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS, INC.
By: /s/ Stephen R. Beckwith
------------------------------------
Treasurer
6
Ex(h(9)
SERVICE AGREEMENT
AGREEMENT made as of the __ day of September, 1999, by and among
[Name], a [Form of entity] , with its principal offices at [Address] ("Service
Provider"), KEMPER SERVICE COMPANY, a Delaware corporation with its principal
office at 811 Main Street, Kansas City, Missouri 64105 ("Transfer Agent"),
KEMPER DISTRIBUTORS, INC., a Delaware corporation with its principal office at
222 South Riverside Plaza, Chicago, IL 60606 ("KDI") and each of those open-end
management investment companies registered as such under the Investment Company
Act of 1940, as amended (the "1940 Act") and listed on Schedule A hereto on
behalf of the designated classes of the designated series hereof, as applicable.
WHEREAS the Transfer Agent serves as shareholder service agent,
dividend disbursing agent and agent in connection with certain other matters and
KDI serves as administrator for purposes of providing information and
administrative services for each Fund listed on Schedule A hereto, as such
Schedule A may be amended from time to time with the mutual consent of the
parties hereto;
WHEREAS Service Provider has been selected by certain customers
("Customers"), which include or propose to include as investment alternatives
certain Funds, to provide certain administrative and record keeping services as
agent for such plans;
WHEREAS the services to be provided by Service Provider hereunder will
benefit the Funds by relieving them of the expense they would incur if such
services were to be provided by the Transfer Agent or its affiliates; and
WHEREAS the services to be provided by Service Provider hereunder will
constitute administrative, record keeping, and shareholders services with
respect to the Customer accounts underlying the omnibus account Service Provider
maintains with the Transfer Agent (each such Customer account, an "Account," and
collectively, the "Accounts");
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Terms of Appointment; Duties of the Parties
1.01 Service Provider. Except as provided specifically herein, Service
Provider shall not be, and shall not hold itself out as, an agent of the
Transfer Agent, KDI, or any Fund. Service Provider shall perform the following
functions on behalf of the Accounts, as an agent of its Customer, in accordance
with procedures established from time to time by agreement of the Transfer
Agent, KDI, and Service Provider, and subject to terms and conditions set forth
in each Fund's current prospectus.
(a) Receive from its Customers, by the close of regular
trading on the New York Stock Exchange (the "Close of Trading") each business
day that the New York Stock Exchange is open for business ("Business Day")
instructions for the purchase and redemption of shares (together,
"Instructions");
<PAGE>
(b) Based on Instructions received each Business Day, compute
net purchase requests or net redemption requests for shares for each Fund for
each Account (together, "Orders");
(c) Maintain adequate records related to, and advise KDI and
the Transfer Agent as to, the foregoing, as instructed by KDI and the Transfer
Agent. Service Provider agrees that such records maintained by it hereunder will
be preserved, maintained and made available in accordance with applicable law
and regulations, and copies or, if required, originals will be surrendered
promptly to KDI or the Transfer Agent on and in accordance with its request.
Records surrendered hereunder shall be in machine readable form, except to the
extent that Service Provider has maintained such records only in paper form.
This provision shall survive the termination of this Agreement.
1.02 Equipment. Service Provider shall maintain adequate offices,
personnel and computer and other equipment to perform the services contemplated
by this Agreement. Service Provider shall notify KDI and the Transfer Agent
promptly in the event that it becomes unable for any reason to perform the
services contemplated by, or any other of its obligations under, this Agreement.
Service Provider shall maintain or provide for redundant facilities and shall
maintain or provide for backup files of its records maintained hereunder and
shall store such back-up files in a secure off-premises location, so that, in
the event of a power failure or other interruption of whatever cause at the
location of its records, Service Provider's records are maintained intact and
transactions can be processed at another location.
1.03 Insurance. Service Provider shall maintain at all times general
liability and other insurance coverage, including errors and omissions coverage,
that is reasonable and customary in light of its duties hereunder, with limits
of not less than $5 million. Service Provider shall maintain at all times a
fidelity bond covering Service Provider and its employees and agents, with a
limit of not less than $5 million. Such insurance coverage and such fidelity
bond shall be issued by a qualified insurance carrier with a Best's rating of at
least "A" or with the highest rating of a nationally recognized statistical
rating organization. Notwithstanding any provision to the contrary herein, no
provision of this Agreement shall relieve an insurer of any obligation to pay to
any Fund, KDI, the Transfer Agent or any affiliate of the Transfer Agent,
Service Provider, or any other insured party any claim that would be a covered
claim in the absence of any provision hereof.
1.04 Disclosure. To the extent required by law or applicable regulatory
authority, Service Provider shall take all steps necessary to ensure that the
arrangements provided for in this Agreement are properly disclosed to any
Customer or Account that is governed by the Employment Retirement Income
Security Act of 1974, as amended ("ERISA").
1.05 Transmission of Information to Service Provider. In accordance
with procedures established from time to time by agreement of the Transfer Agent
and Service Provider, the Transfer Agent shall transmit to Service Provider the
following information for each Fund, as received by the Transfer Agent from
third parties: (a) net asset value information as of the Close of Trading each
Business Day; (b) dividend and capital gains distribution information, as it
arises; and (c) daily accrual for dividend rate factor (mil rate) information
with respect to Funds which declare dividends daily.
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<PAGE>
1.06 Transmission of Information to Transfer Agent. Service Provider
shall, in accordance with procedures established from time to time by agreement
of the Transfer Agent and Service Provider, and subject to terms and conditions
set forth in each Fund's current prospectus:
(a) Base orders to the Transfer Agent solely on Instructions
received by Service Provider from its Customers, by the Close of Trading each
Business Day. Instructions received by Service Provider after the Close of
Trading on any Business Day shall be treated as received on the next Business
Day.
(b) Employ its best efforts to communicate Orders to the
Transfer Agent so that the Transfer Agent receives Orders no later than 9:00 PM
Boston time each Business Day that the Instructions on which such Orders are
based are received by Service Provider from a Customer before the Close of
Trading. If, however, despite its best efforts, Service Provider is unable to
communicate Orders to the Transfer Agent by such time on any Business Day,
Service Provider in any case shall communicate such Orders to the Transfer Agent
by no later than 9:00 AM Boston time the following Business Day. Subject to the
terms and conditions set forth in this Agreement, the Transfer Agent hereby
appoints Service Provider to act as, and Service Provider agrees to act as,
agent for the Funds for the sole purpose of receiving, on a Business Day,
requests for the purchase and redemption for the moment in time immediately
prior to the Close of Trading, and communicating to the Transfer Agent after the
close of trading on that Business Day such requests for the purchase and
redemption of the authorized and issued shares purchased, held or redeemed by a
Customer, and the Business Day on which Instructions are received by Service
Provider immediately prior to the Close of Trading will be the Business Day as
of which Orders will be deemed received by the Transfer Agent as a result of
such Instructions. Notwithstanding the foregoing, unless trades on a confirmed
basis are permitted by the Fund's current prospectus, trades will be effective
at the next determined net asset value after the order is received by the
Transfer Agent and, in the case of a purchase, payment is received in the form
of federal funds.
(c) Promptly deliver appropriate documentation and in the case
of purchase requests, payment therefor to the Transfer Agent.
1.07 Representations Regarding Shares. Any representation made by
Service Provider regarding any Fund shall be in its capacity as agent for its
Customer and not in its capacity as agent of the Funds. Service Provider shall
make no representation in any capacity regarding any Fund except as set forth in
such Fund's current prospectus or current sales literature furnished by such
Fund, by KDI, or by the Transfer Agent.
1.08 Confidentiality of Information. The parties hereto agree that all
books, records, information and data pertaining to the business of any other
party which are exchanged or received pursuant to the negotiation or the
carrying out of this Agreement shall be kept confidential and shall not be
voluntarily disclosed to any other person, except as may be required by law.
This provision shall survive the termination of this Agreement.
1.09 Compliance with Law. Service Provider shall comply with all
federal and state laws and regulations thereunder in connection with its
responsibilities under this Agreement.
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<PAGE>
1.10 Administrative Services. Service Provider shall perform the
administrative and record keeping services (the "Administrative Services")
described in Schedule B hereto, as such Schedule B may be amended from time to
time with the mutual consent of the parties hereto, with respect to shares
purchased, held or redeemed by an Account. Except as provided specifically in
Section 1.06 hereof, Service Provider shall perform the Administrative Services
as an independent contractor and not as an employee or agent of KDI, the
Transfer Agent or any Fund. Service Provider shall perform the Administrative
Services in accordance with procedures established from time to time by
agreement of KDI, the Transfer Agent, and Service Provider, and subject to terms
and conditions set forth in each Fund's current prospectus.
1.11 No Impairment of Authority. No provision of this Agreement shall
limit in any way the authority of any Fund or of KDI to take such action as it
deems appropriate in connection with matters relating to the operation of such
Fund and the sale of its shares.
1.12 Authority of Service Provider. Service Provider acknowledges that
it is not authorized by any Fund to register the transfer of any Fund's shares
or to transfer record ownership of any Fund's shares, and that only the Transfer
Agent is authorized to perform such activities.
2. Compensation
2.01 Service Provider's Expenses. Service Provider shall bear all
expenses arising out of the performance of the Administrative Services and of
the performance of functions related to the Accounts. Service Provider shall not
receive from the Transfer Agent (or from any affiliate of the Transfer Agent),
from KDI, or from any Fund any monetary compensation or reimbursement for such
expenses.
2.02 Transfer Agent's and Fund Expenses. The Transfer Agent, KDI, and
each Fund shall bear all expenses of its own hereunder and shall not receive
from Service Provider any monetary compensation or reimbursement for such
expenses.
2.03 Administrative Fees. In consideration of Service Provider's
performance of the Administrative Services, each Fund and KDI shall pay to
Service Provider the fees (the "Administrative Fees") described in Schedule C
hereto, as such Schedule C may be amended from time to time with the mutual
consent of Service Provider, the Funds, and KDI. Service Provider must notify
Transfer Agent in writing immediately upon the opening of any new account.
Service Provider will not be entitled to receive Administrative Fees with
respect to such new account until Transfer Agent is so notified and such Fees
will begin to accrue only at the point of notification.
2.04 Calculation and Payment of Fees. The Administrative Fees shall be
due each calendar month for which the Service Provider performs Administrative
Services pursuant to this Agreement. The applicable Funds and KDI shall make
payment within thirty (30) days after the last day of such month. Service
Provider shall make reasonable efforts following receipt of the payment to
verify the amount of the payment.
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<PAGE>
3. Representations and Warranties
3.01 Service Provider's Representations. Service Provider represents
and warrants to KDI, the Transfer Agent, and each Fund that:
(a) any ownership of Fund shares by Service Provider is purely
as nominee for or on behalf of Customers of Service Provider, whereby Service
Provider does not have investment discretion over or power to vote such Fund
shares;
(b) it is duly organized and validly existing and in good
standing under the laws of the State of its incorporation;
(c) it has full power and authority under applicable law to
carry on its business, and is registered or licensed as required, in each
jurisdiction where it conducts its business;
(d) it is duly registered as a transfer agent under section
17A of the Securities Exchange Act of 1934, as amended ("1934 Act") and it is
duly registered as a broker-dealer under section 15 of the 1934 Act; or, if not
so registered, it is not required to be so registered in order to perform this
Agreement, and it undertakes to comply with any determination by a governmental
agency or court of competent jurisdiction that activities substantially similar
to those of the Service Provider hereunder are such as to require registration
as a transfer agent or broker-dealer under the 1934 Act or, alternatively to
terminate the Agreement;
(e) it maintains and knows of no reason why it cannot or will
not during the term hereof maintain adequate offices, personnel and computer and
other equipment to perform the services contemplated by this Agreement;
(f) it will not exercise any of the authority, control or
responsibility which may make it a "fiduciary" as such term is defined in
section 3(21) of ERISA to cause any account which is subject to ERISA to invest
in Fund shares;
(g) the receipt for the Administrative Fees by Service
Provider will not constitute a "prohibited transaction" as such term is defined
in section 406 of ERISA and section 4975 of the Internal Revenue Code of 1986,
as amended (the "Code");
(h) to the extent Service Provider has engaged one or more
third parties (including affiliates of Service Provider) to act as
subcontractor(s) or agent(s) ("Agents") to perform services that Service
Provider is responsible for performing under this Agreement, Service Provider
has determined that each such Agent is capable of performing such services and
shall take measures as may be necessary to ensure that such Agents perform such
services in accordance with the terms of this Agreement; and
(i) its entering into and performing this Agreement are duly
authorized and will not violate any provision of applicable law, regulation or
order of any court, governmental or regulatory body, or any agreement or
instrument by which it is bound.
3.02 Transfer Agent's Representations. The Transfer Agent represents
and warrants to Service Provider that:
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<PAGE>
(a) it is a corporation duly organized, validly existing and
in good standing under the laws of the state of Delaware;
(b) it has full power and authority to carry on its business
in the state of Missouri;
(c) it is authorized to appoint Service Provider as agent for
the Funds for the limited purpose set forth herein;
(d) it is duly registered as a transfer agent under section
17A of the 1934 Act; and
(e) its entering into and performing this Agreement are duly
authorized and will not violate any provision of applicable law, regulation or
order of any court, governmental or regulatory body, or any agreement or
instrument by which it is bound.
3.03 KDI Representations. KDI represents and warrants to Services
Provider that:
(a) it is a corporation duly organized, validly existing and
in good standing under the laws of the state of Delaware;
(b) it has full power and authority to carry on its business
in the State of Illinois;
(c) it is authorized to retain Service Provider to provide
administrative and shareholder services as described herein;
(d) its entering into and performing this Agreement are duly
authorized and will not violate any provision of applicable law, regulation or
order of any court, government or regulatory body, or any agreement or
instrument by which it is bound.
3.04 Fund Representations. Each Fund represents and warrants to
Service Provider that:
(a) it is duly registered as an investment company under the
1940 Act or if it is a series of an investment company such company is so
registered; and
(b) its entering into and performing this Agreement are duly
authorized and will not violate any provision of applicable law, regulation or
order of any court, governmental or regulatory body, or any agreement or
instrument by which it is bound.
4. Indemnification
4.01 By Transfer Agent. The Transfer Agent shall indemnify and hold
Service Provider, each Fund, and their directors, trustees, officers and
employees harmless from and against any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liabilities arising out of or attributable
to:
6
<PAGE>
(a) the Transfer Agent's refusal or failure to comply with
the provisions of this Agreement, or
(b) the lack of good faith, negligence or willful misconduct
of the Transfer Agent, or
(c) the breach of any representation or warranty of the
Transfer Agent hereunder.
4.02 By Funds. Each Fund shall indemnify and hold the Transfer Agent,
each affiliate of the Transfer Agent, Service Provider, and their directors,
officers and employees harmless from and against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liabilities arising out of
or attributable to:
(a) such Fund's refusal or failure to comply with the
provisions of this Agreement, or
(b) the lack of good faith, negligence or willful misconduct
of such Fund, or
(c) the breach of any representation or warranty of such Fund
hereunder.
4.03 By KDI. KDI shall indemnify and hold Service Provider, each Fund,
and their directors, trustees, officers and employees harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liabilities arising out of or attributable to:
(a) KDI's refusal or failure to comply with the provisions of
this Agreement, or
(b) the lack of good faith, negligence or willful misconduct
of KDI, or
(c) the breach of any representation or warranty of KDI
hereunder.
4.04 By Service Provider. Service Provider shall indemnify and hold the
Transfer Agent, KDI, each affiliate of the Transfer Agent and KDI, each Fund,
and their directors, trustees, officers and employees harmless from and against
any and all losses, damages, costs, charges, counsel fees, payments, expenses
and liabilities arising out of or attributable to:
(a) Service Provider's refusal or failure to comply with the
provisions of this Agreement or with instructions properly given hereunder,
whether it is performing functions on behalf its Customers or providing
Administrative Services, or
(b) Service Provider's performance of the Administrative
Services, or
(c) the lack of good faith, negligence or willful misconduct
of Service Provider, whether it is performing functions on behalf of its
Customers or providing Administrative Services, or
7
<PAGE>
(d) the breach of any representation or warranty of Service
Provider hereunder.
4.05 Acts of God. In the event that any party is unable to perform its
obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such party shall not be liable to
any other party for any damages resulting from such failure to perform or
otherwise from such causes.
4.06 No Consequential Damages. No party to this Agreement shall be
liable to any other party for consequential damages under any provision of this
Agreement.
4.07 Claim Procedure. In order that the indemnification provisions
contained herein shall apply, upon the assertion of a claim or loss for which
any party (the "Indemnitor") may be required to indemnify another party (the
"Indemnitee"), the Indemnitee shall promptly notify the Indemnitor of such
assertion or loss, and shall keep the Indemnitor advised with respect to all
developments concerning any such claim. The Indemnitor shall have the option to
participate at its expense with the Indemnitee in the defense of any such claim.
In the event that there is more than one Indemnitor with respect to any such
claim, the Indemnitors shall agree as to their exercise of this option. The
Indemnitee shall in no case confess any claim or make any compromise in any case
in which the Indemnitor may be required to indemnify it except with the
Indemnitor's prior written consent. The obligations of the Transfer Agent, the
Funds and Service Provider under this Section 4 shall survive the termination of
this Agreement.
5. Acknowledgments
5.01 Fees Solely for Administrative Services. The parties hereto
acknowledge that the Administrative Fees are for administrative and record
keeping services only and do not constitute payment in any manner for investment
advisory or distribution services. The parties acknowledge that the provision of
any services not specifically authorized herein are outside the scope of this
Agreement.
5.02 Service Provider Acting as Agent for the Accounts. The parties
acknowledge that Service Provider has been selected as a provider of
administrative and record keeping services by the Customers, and that, except as
provided specifically in Section 1.06 hereof, Service Provider will perform the
Administrative Services hereunder as an independent contractor and not as an
employee or agent of KDI, the Transfer Agent, or any Fund. The parties
acknowledge, further, that neither KDI, the Transfer Agent, nor any Fund
undertakes to supervise Service Provider in the performance of the
Administrative Services; that neither KDI, the Transfer Agent, nor any Fund
shall be responsible for Service Provider's performance of the Administrative
Services; that neither KDI, the Transfer Agent nor any Fund shall be responsible
for the accuracy of the records maintained by Service Provider for the Accounts;
and that neither KDI, the Transfer Agent, nor any Fund shall be responsible for
Service Provider's performance of other functions related to the Accounts.
8
<PAGE>
5.03 Laws Applicable to Funds. Service Provider acknowledges that each
Fund, as a registered investment company under the 1940 Act, is subject to the
provisions of the 1940 Act and regulations thereunder, and that the offer and
sale of its shares are subject to the provisions of federal and state laws and
regulations applicable to the offer and sale of securities. KDI, the Transfer
Agent, and each Fund acknowledges that Service Provider is not responsible for
such Fund's compliance with such laws and regulations. If KDI, the Transfer
Agent, or any Fund advises Service Provider that a procedure of Service Provider
related to the discharge of its obligations hereunder has or may have the effect
of causing KDI, the Transfer Agent, or any Fund to violate any of such laws or
regulations, Service Provider, KDI, the Transfer Agent, and the Funds shall
develop a mutually agreeable alternative procedure which does not have such
effect.
5.04 Agents of Service Provider. Service Provider will notify KDI and
Transfer Agent prior to the use of any Agent. To the extent Agents perform
services under this Agreement that are the responsibility of Service Provider,
Service Provider shall be responsible for, and assume all liability for
(including any obligation for indemnification as provided in Section 4.03
hereof), the actions and inactions of such Agents as if such services had been
provided by Service Provider.
6. Amendment and Termination of Agreement
6.01 Amendment. Except as otherwise provided herein, this Agreement may
be amended or modified only by a written agreement executed by all the parties;
provided that an amendment solely to add or remove any Fund as a party to this
Agreement may be made, and shall be valid and binding, by the addition or
removal of the relevant Fund's listing on Schedule A and its signature below
without requiring the other parties' signatures and shall be effective as of the
date of execution, unless any other party objects in writing within thirty (30)
days after receiving notice of such amendment.
6.02 Termination Without Cause. This Agreement may be terminated by
any party upon ninety (90) days written notice to each other party.
9
<PAGE>
6.03 Termination With Cause. This Agreement may be terminated by KDI,
the Transfer Agent, or any Fund immediately upon notice to each other party in
the event that (a) Service Provider becomes unable for any reason to perform the
services contemplated by this Agreement, or (b) the performance by Service
Provider of the services contemplated by this Agreement becomes in KDI's or the
Transfer Agent's reasonable judgment unlawful or ceases to satisfy KDI's or the
Transfer Agent's reasonable standards and so becomes unacceptable to KDI or the
Transfer Agent. This Agreement may be terminated by any party hereto immediately
upon notice to each other party in the event that (a) the Transfer Agent ceases
to be the transfer agent for all the Funds, (b) KDI ceases to be administrative
service agent for the Funds, (c) all the Funds cease to be investment
alternatives for all Customers, (d) all the Funds decline to accept any
additional purchase or redemption requests for shares, the Securities and
Exchange Commission issues any stop order suspending the effectiveness of the
registration statements or prospectuses of all the Funds, or current
prospectuses for all the Funds are not on file with the Securities and Exchange
Commission as required by section 10 of the Securities Act of 1933, as amended
or (e) any other party materially breaches this Agreement. To the extent that
any of the events enumerated above occurs with respect to one or more Funds, but
not with respect to all the Funds, or that one or more Funds, but not all the
Funds, terminates this Agreement, in lieu of termination of this Agreement KDI
or the Transfer Agent shall amend Schedule A hereto with notice to the other
parties to remove the affected Funds from such Schedule A.
6.04 Termination Procedures. Upon termination of this Agreement, each
party shall return to each other party all copies of confidential or proprietary
materials or information received from such other party hereunder, other than
materials or information required to be retained by such party under applicable
laws or regulations. This provision shall survive the termination of this
Agreement.
7. Assignment and Delegation
7.01 Assignment and Delegation. Neither this Agreement nor any rights
or obligations hereunder may be assigned or delegated by any party without the
written consent of the other parties.
7.02 Successors. This Agreement shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and assigns.
8. Notices
Notices hereunder shall be in writing, shall be delivered personally,
sent by certified mail (return receipt requested), or sent by facsimile machine
in accordance with procedures established by agreement of KDI, the Transfer
Agent, and Service Provider, and shall be addressed to a party either at its
address below or at a changed address specified by it in a notice to the other
parties hereto:
Transfer Agent: KEMPER SERVICE COMPANY
811 Main Street
Kansas City, Missouri 64105
Attention: President
10
<PAGE>
KDI: KEMPER DISTRIBUTORS, INC.
222 South Riverside Plaza
Chicago, IL 60606
Attention: President
Any Fund: [Name of Fund]
c/o Kemper Service Company
222 South Riverside Plaza
Chicago, IL 60606
Attention: President
Service Provider:
_____________________
_____________________
_____________________
_____________________
9. Miscellaneous
9.01 Massachusetts Law to Apply. This Agreement shall be construed and
the provisions thereof interpreted under and in accordance with the laws of The
Commonwealth of Massachusetts, without regard to conflicts of laws principles.
9.02 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with respect to
the subject matter hereof whether oral or written. Nothing contained in this
Agreement is intended to convey rights to any third parties.
9.03 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original document and all of which
together shall be deemed one and the same instrument.
9.04 Limitation of Liability of the Funds, Trustees and Shareholders.
It is understood and expressly stipulated that none of the trustees, directors,
officers, agents, or shareholders of any Fund shall be personally liable
hereunder. It is understood and acknowledged that all persons dealing with any
Fund must look solely to the property of such Fund for the enforcement of any
claims against such Fund as neither the trustees, directors, officers, agents or
shareholders assume any personal liability for obligations entered into on
behalf of any Fund. No Fund shall be liable for the obligations or liabilities
of any other Fund. No series of any Fund, if any, shall be liable for the
obligations of any other series.
9.05 Headings. The headings contained in this Agreement are for
purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
11
<PAGE>
KEMPER SERVICE COMPANY
By:
Name:
Title:
KEMPER DISTRIBUTORS, INC.
By:
Name:
Title:
[NAME OF SERVICE PROVIDER]
By:
Name:
Title:
CASH ACCOUNT TRUST, ON BEHALF OF
Tax-Exempt Portfolio
Tax-Exempt Cash Managed Shares
By:
Name:
Title:
INVESTORS CASH TRUST, ON BEHALF OF
Government Securities Portfolio
Government Cash Managed Shares
By:
Name:
Title:
12
<PAGE>
Schedule A
List of Funds
Cash Account Trust
Tax-Exempt Portfolio
Tax-Exempt Cash Managed Shares Class
Investors Cash Trust
Government Securities Portfolio
Government Cash Managed Shares Class
<PAGE>
Schedule B
The Administrative Services
1. Maintain separate adequate records for each Account reflecting shares
purchased and redeemed, including dates and prices for all transactions, and
share balances. Such records shall be preserved, maintained and made available
in accordance with the provisions of applicable law and regulations, and copies
or, if required, originals shall be surrendered promptly to the Transfer Agent
on and in accordance with its request. Records surrendered hereunder shall be in
machine readable form, except to the extent that such records have been
maintained only in paper form.
2. Disburse or credit to the Customers, and maintain records of, all proceeds of
share redemptions and distributions not reinvested in shares.
3. Ensure and oversee the timely transfer of funds in connection with Accounts
with the Funds.
4. Prepare and deliver to Customers periodic account statements showing for each
Account the total number of shares held as of the statement closing date,
purchases and redemptions of shares during the statement period, and dividends
and other distributions paid during the statement period (whether paid in case
or reinvested in shares), including dates and prices for all transactions.
5. Deliver to Customers prospectuses, proxy materials, periodic reports to
shareholders, and other materials provided by the Transfer Agent or the Funds.
6. Receive Instructions and communicate Orders to the Transfer Agent as
specified in this Agreement.
7. Transmit confirmations of Orders to the Customers.
8. Maintain daily and monthly purchase summaries (expressed in both share and
dollar amounts) for each Account.
9. Settle Orders in accordance with the terms of each Fund's prospectus.
10. Transmit to the Transfer Agent, or to any Fund designated by the Transfer
Agent, such occasional and periodic reports as the Transfer Agent shall
reasonably request from time to time to enable it or such Fund to comply with
applicable laws and regulations.
<PAGE>
Schedule C
The Administrative Fees
The Service Provider will be paid an aggregate monthly fee at an
annualized rate of _____ of 1% (___ basis points) with respect to the Funds
listed on Schedule A. The foregoing fee will be comprised of two parts and will
be paid by the following parties: the applicable Fund for record keeping
services (0.10 of 1%) and KDI for administration services (___ of 1%). If
Service Provider begins or ceases performing Administrative Services during the
month, such fee shall be prorated according to the proportion which such portion
of the month bears to the full month.
Exhibit (h)(10)
ADMINISTRATION AND SHAREHOLDER SERVICES AGREEMENT
SERIES: GOVERNMENT SECURITIES PORTFOLIO
CLASS: GOVERNMENT CASH MANAGED SHARES
AGREEMENT made this day __ of September, 1999, by and between INVESTORS
CASH TRUST, 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 for the series
and class of the Fund referred to above (the "Class") to provide information and
administrative services for the benefit of the Class and its shareholders. In
this regard, KDI shall appoint various broker-dealer firms and other financial
services firms ("Firms") to provide administrative services for their clients
through the Fund. Their Firms shall provide such office space and equipment,
telephone facilities and personnel as is necessary or beneficial for providing
information and services to shareholders of the Class and to assist the Fund's
shareholder service agent in servicing accounts of the Firm's clients who own
shares of the Class ("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 Class shares of client account cash balances, answering routine 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
Class 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. KDI, by separate agreement with
the Fund, may also serve the Fund in other capacities. The services of KDI to
the Fund under this Agreement are not to be deemed exclusive, and KDI shall be
free to render similar services or other services to others.
As noted above, in carrying out its duties and responsibilities
hereunder, KDI will appoint various Firms to provide administrative and other
services described herein directly to or for the benefit of shareholders of the
Class 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 compensation to such Firms for such
services.
2. For the services and facilities described in Section 1, the Fund
will pay to KDI, as an expense of the Class, at the end of each calendar month
an administrative services fee computed at an annual rate of up to 0.25 of 1% of
the average daily net assets of the Class. The current fee schedule is set forth
on Appendix I hereto. For the month and year in which this
<PAGE>
Agreement becomes effective or terminates, there shall be an appropriate
proration on the basis of the number of days that the Agreement is in effect
during such month and year, respectively.
The net asset value for the Class shall be calculated in accordance
with the provisions of the Fund's current prospectus. On each day when net asset
value is not calculated, the net asset value of a share of the Class shall be
deemed to be the net asset value of such a share as of the close of business on
the last day on which such calculation was made for the purpose of the foregoing
computations.
3. 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.
4. This Agreement may be terminated at any time without the payment of any
penalty by the Fund or by KDI on sixty (60) days written notice to the other
party. Termination of this Agreement shall not affect the right of KDI to
receive payments on any unpaid balance of the compensation described in Section
2 hereof earned prior to such termination.
5. 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.
6. 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.
7. 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 that portion of the administrative
services fees (or any other liability of the Fund arising hereunder) related to
a particular series and class of the Fund, whether in accordance with the
express terms hereof or otherwise, KDI shall have recourse solely against the
assets of such series and class to satisfy such claim and shall have no recourse
against the assets of any other series and class of the Fund for such purpose.
8. This Agreement shall be construed in accordance with applicable federal law
and (except as to Section 7 hereof which shall be construed in accordance with
the laws of The Commonwealth of Massachusetts) the laws of the State of
Illinois.
9. 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.
2
<PAGE>
IN WITNESS WHEREOF, the Fund on behalf of the Class and KDI have caused
this Agreement to be executed as of the day and year first above written.
INVESTORS CASH TRUST KEMPER DISTRIBUTORS, INC.
By: By:
--------------------------------- --------------------------------
Title: Title:
------------------------------- -----------------------------
3
<PAGE>
APPENDIX I
INVESTORS CASH TRUST
FEE SCHEDULE FOR ADMINISTRATION
AND SHAREHOLDER SERVICES AGREEMENT
SERIES: GOVERNMENT SECURITIES PORTFOLIO
CLASS: GOVERNMENT CASH MANAGED SHARES
Pursuant to Section 2 of the Administration and Shareholder Services Agreement
to which this Appendix is attached, the Fund and Kemper Distributors, Inc. agree
that the administrative service fee will be computed at an annual rate of 0.15
of 1% of the average daily net assets of the Class, as defined in the Agreement.
Dated:
INVESTORS CASH TRUST KEMPER DISTRIBUTORS, INC.
By: By:
--------------------------------- --------------------------------
Title: Title:
------------------------------- -----------------------------
4
Ex (i)
VEDDER PRICE VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60601-1003
312-609-7500
FACSIMILE: 312-609-5005
A PARTNERSHIP INCLUDING VEDDER, PRICE,
KAUFMAN & KAMMHOLZ, P.C. WITH OFFICES IN
CHICAGO AND NEW YORK CITY
November 10, 1999
Investors Cash Trust
222 South Riverside Plaza
Chicago, Illinois 60606
Ladies and Gentlemen:
Reference is made to Post-Effective Amendment No. 14 to the
Registration Statement on Form N-1A under the Securities Act of 1933 being filed
by Investors Cash Trust (the "Fund") in connection with the public offering from
time to time of units of beneficial interest, no par value ("Shares"), in
Government Securities Portfolio (the "Portfolio"). The Portfolio has designated
two new classes of Shares as follows: Scudder Cash Insitutional Shares and Cash
Managed Shares.
We have acted as counsel to the Fund, and in such capacity are familiar
with the Fund's organization and have counseled the Fund regarding various legal
matters. We have examined such Fund records and other documents and certificates
as we have considered necessary or appropriate for the purposes of this opinion.
In our examination of such materials, we have assumed the genuineness of all
signatures and the conformity to original documents of all copies submitted to
us.
Based upon the foregoing and assuming that the Fund's Amended and
Restated Agreement and Declaration of Trust dated March 9, 1990, as amended by
the Written Instrument Amending the Agreement and Declaration of Trust dated
August 14, 1990, and the Establishment and Designation of Classes of Shares of
Beneficial Interest dated September 28, 1999 and the By-Laws of the Fund adopted
March 17, 1990, are presently in full force and effect and have not been amended
in any respect except as provided in the above-referenced documents and that the
resolutions adopted by the Board of Trustees of the Fund on March 2, 1990, March
17, 1990, July 30, 1991 and September 28, 1999, relating to organizational
matters, securities matters and the issuance of shares are presently in full
force and effect and have not been amended in any respect, we advise you and
opine that (a) the Fund is a validly existing voluntary association with
transferrable shares under the laws of the Commonwealth of Massachusetts and is
authorized to issue an unlimited number of Shares in the Portfolio; and (b)
presently and upon such further issuance of the Shares in accordance with the
Fund's Agreement and Declaration of Trust and the receipt by the Fund of a
purchase price not less than the net asset value per Share and when the
pertinent provisions of the Securities Act of 1933 and such "blue-sky" and
securities laws as may be applicable have been complied with, and assuming that
the Fund continues to validly exist as provided in (a) above, the Shares are and
will be legally issued and outstanding, fully paid and nonassessable.
The Fund is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund or the
Portfolio. However, the Agreement and Declaration of Trust disclaims shareholder
liability for acts and obligations of the Fund or the Portfolio and requires
that
<PAGE>
VEDDER PRICE
notice of such disclaimer be given in each note, bond, contract, instrument,
certificate share or undertaking made or issued by the Trustees or officers of
the Fund. The Agreement and Declaration of Trust provides for indemnification
out of the property of the Portfolio for all loss and expense of any shareholder
of that Portfolio held personally liable for the obligations of such Portfolio.
Thus, the risk of liability is limited to circumstances in which the Portfolio
would be unable to meet its obligations.
This opinion is solely for the benefit of the Fund, the Fund's Board of
Trustees and the Fund's officers and may not be relied upon by any other person
without our prior written consent. We hereby consent to the use of this opinion
in connection with said Post-Effective Amendment.
Very truly yours,
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
2
Exhibit (j)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent Auditors
and Reports to Shareholders" and to the use of our report dated May 18, 1999 in
the Registration Statement of Investors Cash Trust on Form N-1A filed with the
Securities and Exchange Commission in this Post-Effective Amendment No.14 to the
Registration Statement under the Securities Act of 1933 (File 33-34645) and in
this Amendment No. 16 to the Registration Statement under the Investment Company
Act of 1940 (File No. 811-6103).
ERNST & YOUNG LLP
Chicago, Illinois
November 8, 1999
Exhibit (o)
GOVERNMENT SECURITIES PORTFOLIO
OF
INVESTORS CASH TRUST
MULTI-DISTRIBUTION SYSTEM PLAN
WHEREAS, Investors Cash Trust (the "Fund"), which is adopting this
Multi-Distribution System Plan on behalf of its Government Securities Portfolio
(the "Portfolio"), is an open-end management investment company registered under
the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, Scudder Kemper Investments, Inc. serves as investment adviser
and Kemper Distributors, Inc. serves as principal underwriter for the Fund;
WHEREAS, the Portfolio currently has a single class of shares;
WHEREAS, the Fund desires to establish a Multi-Distribution System
enabling the Fund, as more fully reflected in its prospectus, to offer investors
the option of purchase shares of the Portfolio (a) with an Administrative
Services Fee of not more than 0.10% of average daily net assets, to be purchased
primarily by institutional investors through financial intermediaries not
otherwise affiliated with the Fund ("Service Shares"); (b) with an
Administrative Services Fee of not more than 0.25% of average daily net assets,
to be purchased primarily through financial intermediaries and which requires a
larger minimum investment ("Government Cash Managed Shares"); or (c) with no
Administrative Services Fee or Rule 12b-1 distribution fee, to be purchased
primarily by institutions ("Scudder Government Cash Institutional Shares"); and
WHEREAS, Rule 18f-3 under the 1940 Act permits open-end management
investment companies to issue multiple classes of voting stock representing
interests in the same portfolio notwithstanding Sections 18(f)(1) and 18(i)
under the 1940 Act if, among other things, such investment companies adopt a
written plan setting forth the separate arrangement and expense allocation of
each class and any related conversion features or exchange privileges;
NOW, THEREFORE, the Fund, wishing to be governed by Rule 18f-3 under
the 1940 Act, hereby adopts this Multi-Distribution System Plan on behalf of
Government Securities Portfolio as follows:
1. Each class of shares will represent interests in the same portfolio
of investments of the Portfolio, and be identical in all respects to each other
class, except as set forth below. The only differences among the various classes
of shares of the Portfolio will relate solely to: (a) different distribution fee
payments associated with any Rule 12b-1 Plan for a particular class of shares
and any other costs relating to implementing or amending such Rule 12b-1 Plan
(including obtaining shareholder approval of such Rule 12b-1 Plan or any
amendment thereto), which will be borne solely by shareholders of such classes;
(b) different service fees; (c) different Administrative Service Fees or
shareholder servicing fees; (d) different class expenses, which will be limited
to the following expenses determined by the Fund board to be attributable to a
specific class of shares: (i) printing and postage expenses related to preparing
and distributing materials such as shareholder reports, prospectuses, and proxy
statements to current shareholders of a specific class; (ii) Securities and
Exchange Commission registration fees incurred by a
<PAGE>
specific class; (iii) litigation or other legal expenses relating to a specific
class; (iv) board member fees or expenses incurred as a result of issues
relating to a specific class; and (v) accounting expenses relating to a specific
class; (e) the voting rights related to any Rule 12b-1 Plan affecting a specific
class of shares; (f) conversion features; (g) exchange privileges; and (h) class
names or designations. Any additional incremental expenses not specifically
identified above that are subsequently identified and determined to be properly
applied to one class of shares of the Portfolio shall be so applied upon
approval by a majority of the members of the Fund's board, including a majority
of the board members who are not interested persons of the Fund.
2. Under the Multi-Distribution System, certain expenses may be
attributable to the Fund, but not to a particular series or class thereof. All
such expenses will be borne by each class on the basis of the relative aggregate
net assets of the classes, except that, if the Fund has series, expenses will
first be allocated among series, based upon their relative aggregate net assets.
Expenses that are attributable to a particular series, but not to a particular
class thereof, will be borne by each class of that series on the basis of the
relative aggregate net assets of the classes. Notwithstanding the foregoing, the
underwriter, the investment manager or other provider of services to the Fund
may waive or reimburse the expenses of a specific class or classes to the extent
permitted under Rule 18f-3 under the 1940 Act.
A class of shares may be permitted to bear expenses that are directly
attributable to that class including: (a) any distribution fees associated with
any Rule 12b-1 Plan for a particular class and any other costs relating to
implementing or amending such Rule 12b-1 Plan (including obtaining shareholder
approval of such Rule 12b-1 Plan or any amendment thereto); (b) any service fees
attributable to such class; (c) any Administrative Service Fees or shareholder
servicing fees attributable to such class; and (d) any class expenses determined
by the Fund board to be attributable to such class.
3. Dividends paid by the Fund as to each class of its shares, to the
extent any dividends are paid, will be calculated in the same manner, at the
same time, on the same day, and will be in the same amount; except that any
distribution fees, service fees, Administrative Service Fees, shareholder
servicing fees and class expenses allocated to a class will be borne exclusively
by that class.
4. All material amendments to this Plan must be approved by a majority
of the members of the Fund's board, including a majority of the board members
who are not interested persons of the Fund.
For use on or after: September 28, 1999
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