<PAGE>
As filed with the Securities and Exchange Commission
on December 28, 2000
Securities Act File No.
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / x /
-------
Pre-Effective Amendment No. /____/ Post-Effective Amendment No. /____/
SCUDDER INTERNATIONAL FUND, INC.
(Exact Name of Registrant as Specified in Charter)
345 Park Avenue, New York, New York 10154
(Address of Principal Executive Offices) (Zip Code)
John Millette
Scudder Kemper Investments, Inc.
Two International Place
Boston, MA 02110-4103
(Name and Address of Agent for Service)
(617) 295-1000
(Registrant's Area Code and Telephone Number)
with copies to:
Caroline Pearson, Esq. Joseph R. Fleming, Esq.
Scudder Kemper Investments, Inc. Dechert
Two International Place Ten Post Office Square - South
Boston, MA 02110-4103 Boston, MA 02109-4603
Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration Statement is declared effective.
Title of Securities Being Registered:
Shares of Capital Stock ($.01 par value)
of Scudder Pacific Opportunities Fund, a series of the Registrant
________________________________________________________________________________
It is proposed that this filing will become effective on January 27, 2001
pursuant to Rule 488 under the Securities Act of 1933.
________________________________________________________________________________
No filing fee is required because the Registrant has previously registered an
indefinite number of its shares under the Securities Act of 1933, as amended,
pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended.
<PAGE>
PART A
INFORMATION REQUIRED IN THE PROXY STATEMENT/PROSPECTUS
<PAGE>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
KEMPER ASIAN GROWTH FUND
Please take notice that a Special Meeting of Shareholders (the "Meeting")
of Kemper Asian Growth Fund (the "Fund") will be held at the offices of Scudder
Kemper Investments, Inc., 13th Floor, Two International Place, Boston, MA 02110-
4103, on May 15, 2001, at 4:00 p.m., Eastern time, for the following purposes:
Proposal 1: To elect Trustees of the Fund.
Proposal 2: To approve an Agreement and Plan of Reorganization for the
Fund (the "Plan"). Under the Plan, (i) all or substantially
all of the assets and all of the liabilities of the Fund would
be transferred to Scudder Pacific Opportunities Fund, (ii)
each shareholder of the Fund would receive shares of Scudder
Pacific Opportunities Fund of a corresponding class to those
held by the shareholder in the Fund in an amount equal to the
value of their holdings in the Fund, and (iii) the Fund would
then be terminated.
Proposal 3: To ratify the selection of Ernst & Young LLP as the
independent auditors for the Fund for the Fund's current
fiscal year.
The persons named as proxies will vote in their discretion on any other
business that may properly come before the Meeting or any adjournments or
postponements thereof.
Holders of record of shares of the Fund at the close of business on March
5, 2001 are entitled to vote at the Meeting and at any adjournments or
postponements thereof.
In the event that the necessary quorum to transact business or the vote
required to approve any Proposal is not obtained at the Meeting, the persons
named as proxies may propose one or more adjournments of the Meeting in
accordance with applicable law to permit further solicitation of proxies. Any
such adjournment as to a matter will require the affirmative vote of the holders
of a majority of the Fund's shares present in person or by proxy at the Meeting.
The persons named as proxies will vote FOR any such adjournment those proxies
which they are entitled to vote in favor of that Proposal and will vote AGAINST
any such adjournment those proxies to be voted against that Proposal.
By Order of the Board,
/s/ Philip J. Collora
Philip J. Collora
Secretary
March 6, 2001
IMPORTANT -- WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD(S) AND RETURN
IT IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE (OR TO TAKE ADVANTAGE OF
THE ELECTRONIC OR TELEPHONIC VOTING PROCEDURES DESCRIBED ON THE PROXY CARD(S)).
YOUR PROMPT RETURN OF THE ENCLOSED PROXY CARD(S) (OR YOUR VOTING BY OTHER
AVAILABLE MEANS) MAY SAVE THE NECESSITY AND EXPENSE OF FURTHER SOLICITATIONS. IF
YOU WISH TO ATTEND THE MEETING AND VOTE YOUR SHARES IN PERSON AT THAT TIME, YOU
WILL STILL BE ABLE TO DO SO.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION.............................................................. __
PROPOSAL 1: ELECTION OF TRUSTEES......................................... __
PROPOSAL 2: APPROVAL OF AGREEMENT AND PLAN OF REORGANIZATION............. __
SYNOPSIS..................................................... __
PRINCIPAL RISK FACTORS....................................... __
THE PROPOSED TRANSACTION..................................... __
PROPOSAL 3: RATIFICATION OR REJECTION OF THE SELECTION OF INDEPENDENT
AUDITORS..................................................... __
ADDITIONAL INFORMATION.................................................... __
</TABLE>
<PAGE>
PROXY STATEMENT/PROSPECTUS
March [ ], 2001
Relating to the acquisition of the assets of
KEMPER ASIAN GROWTH FUND
222 South Riverside Plaza
Chicago, Illinois 60606
(800) [ ]
--------------------------
by and in exchange for shares of capital stock of
SCUDDER PACIFIC OPPORTUNITIES FUND,
a separate series of
SCUDDER INTERNATIONAL FUND, INC. (the "Acquiring Corporation")
345 Park Avenue
New York, New York 10154
(800) [ ]
--------------------------
INTRODUCTION
This Proxy Statement/Prospectus is being furnished to shareholders of
Kemper Asian Growth Fund (the "Fund") in connection with three proposals.
Proposal 1 describes the election of Trustees and Proposal 3 proposes the
ratification of the selection of the Fund's auditors.
In Proposal 2, shareholders are asked to vote on an Agreement and Plan
of Reorganization (the "Plan") pursuant to which all or substantially all of the
assets of the Fund would be acquired by Scudder Pacific Opportunities Fund, a
fund with similar investment characteristics and managed by the same investment
manager as the Fund, in exchange for shares of capital stock of Scudder Pacific
Opportunities Fund and the assumption by Scudder Pacific Opportunities Fund of
all of the liabilities of the Fund, as described more fully below (the
"Reorganization"). Shares of Scudder Pacific Opportunities Fund received would
then be distributed to the shareholders of the Fund in complete liquidation of
the Fund. As a result of the Reorganization, shareholders of the Fund will
become shareholders of Scudder Pacific Opportunities Fund and will receive
shares of Scudder Pacific Opportunities Fund in an amount equal to the value of
their holdings in the Fund as of the close of business on the business day
preceding the closing of the Reorganization (the "Valuation Date"). The closing
of the Reorganization (the "Closing") is contingent upon shareholder approval of
the Plan. A copy of the Plan is attached as Exhibit A. The Reorganization is
expected to occur on or about May 28, 2001.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES NOR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Proposals 1 and 2 arise out of a restructuring program proposed by
Scudder Kemper Investments, Inc. ("Scudder Kemper" or the "Investment Manager"),
the investment manager of both the Fund and Scudder Pacific Opportunities Fund,
described in more detail below. The restructuring program is designed to
respond to changing industry conditions and investor needs. Scudder Kemper
seeks to consolidate its fund line-up and offer all of the open-end funds it
advises under the "Scudder" name. In addition, Scudder Kemper anticipates
changing its name to "Zurich Scudder Investments,
-1-
<PAGE>
Inc." Scudder Kemper believes that the combination of its open-end, directly-
distributed funds (the "Scudder Funds") with the funds in the Kemper Family of
Funds (the "Kemper Funds") will permit it to streamline its administrative
infrastructure and focus its distribution efforts. The restructuring program
will not result in any reduction in the services currently offered to Kemper
Funds shareholders.
Scudder Pacific Opportunities Fund is a diversified series of shares
of capital stock of the Acquiring Corporation, which is an open-end management
investment company organized as a Maryland corporation. The Fund, which is also
diversified, is the only active series of shares of beneficial interest of
Kemper Asian Growth Fund (the "Acquired Trust"), an open-end management
investment company organized as a Massachusetts business trust.
In the descriptions of the Proposals below, the word "fund" is
sometimes used to mean an investment company or series thereof in general, and
not the Fund whose proxy statement this is. In addition, for simplicity,
actions are described in this Proxy Statement/Prospectus as being taken by
either the Fund or Scudder Pacific Opportunities Fund (which are collectively
referred to as the "Funds" and each referred to as a "Fund"), although all
actions are actually taken either by the Acquired Trust or the Acquiring
Corporation, on behalf of the applicable Fund.
This Proxy Statement/Prospectus sets forth concisely the information
about Scudder Pacific Opportunities Fund that a prospective investor should know
before investing and should be retained for future reference. For a more
detailed discussion of the investment objective, policies, restrictions and
risks of Scudder Pacific Opportunities Fund, see Scudder Pacific Opportunities
Fund's prospectus dated March 1, 2001, as supplemented from time to time,
which is included in the materials you received with this document and
incorporated herein by reference (meaning that it is legally part of this
document). For a more detailed discussion of the investment objective,
policies, restrictions and risks of the Fund, see the Fund's prospectus dated
March 1, 2001, as supplemented from time to time, which is also incorporated
herein by reference and a copy of which may be obtained upon request and without
charge by calling or writing the Fund at the telephone number or address listed
above.
Also incorporated herein by reference is Scudder Pacific Opportunities
Fund's statement of additional information dated March 1, 2001, as supplemented
from time to time, which may be obtained upon request and without charge by
calling or writing Scudder Pacific Opportunities Fund at the telephone number or
address listed above. A Statement of Additional Information, dated March [ ],
containing additional information about the Reorganization has been filed with
the Securities and Exchange Commission (the "SEC" or the "Commission") and is
incorporated by reference into this Proxy Statement/Prospectus. A copy of this
Statement of Additional Information is available upon request and without charge
by calling or writing Scudder Pacific Opportunities Fund at the telephone number
or address listed above. Shareholder inquiries regarding Scudder Pacific
Opportunities Fund may be made by calling (800) [ ] and shareholder
inquiries regarding the Fund may be made by calling (800) [ ]. The
information contained in this document concerning each Fund has been provided
by, and is included herein in reliance upon, that Fund.
The Board of Trustees that oversees the Fund is soliciting proxies
from shareholders of the Fund for the Special Meeting of Shareholders to be held
on May 15, 2001, at Scudder Kemper's offices, 13th Floor, Two International
Place, Boston, MA 02110-4103 at 4:00 p.m. (Eastern time), and at any and all
adjournments or postponements thereof (the "Meeting"). This Proxy
Statement/Prospectus, the Notice of Special Meeting and the proxy card(s) are
first being mailed to shareholders on or about March 6, 2001 or as soon as
practicable thereafter.
-2-
<PAGE>
The Board of Trustees unanimously recommends that shareholders vote
FOR the nominees listed in Proposal 1, and FOR Proposals 2 and 3.
PROPOSAL 1: ELECTION OF TRUSTEES
At the Meeting, shareholders will be asked to elect eleven individuals
to constitute the Board of Trustees to oversee the Fund. Shareholders are being
asked to elect these individuals to the Board of Trustees in case the Plan, as
described under Proposal 2, is not approved by shareholders. However, if the
Plan is approved, the current Board of Directors of the Acquiring Corporation
will oversee the operations of the combined fund (see "Synopsis - Other
Differences Between the Funds" under Proposal 2).
As discussed further below, Scudder Kemper commenced an initiative to
restructure and streamline the management and operations of the funds it
advises. In connection with that initiative, the Independent Trustees (as
defined below) of the two separate boards of Kemper Funds proposed to
consolidate into a single board. The eleven individuals who have been nominated
for election as Trustees of the Fund were nominated after careful consideration
by the present Board of Trustees. The nominees are listed below. Seven of the
nominees are currently Trustees of the Fund and three of the nominees are
currently trustees or directors of other Kemper Funds. One of the nominees,
although not currently a trustee or director of any Kemper Fund, is a senior
executive officer of Scudder Kemper. These eleven nominees are also being
nominated for election as trustees or directors of most of the other Kemper
Funds. The proposed slate of nominees reflects an effort to consolidate the two
separate boards who have historically supervised different Kemper Funds. The
proposed consolidation is expected to provide administrative efficiencies to
both the Funds and Scudder Kemper.
The persons named as proxies on the enclosed proxy card(s) will vote
for the election of the nominees named below unless authority to vote for any or
all of the nominees is withheld in the proxy. Each Trustee so elected will
serve as a Trustee commencing on July 1, 2001 and until the next meeting of
shareholders, if any, called for the purpose of electing Trustees and until the
election and qualification of a successor or until such Trustee sooner dies,
resigns or is removed as provided in the governing documents of the Fund. Each
of the nominees has indicated that he or she is willing to serve as a Trustee.
If any or all of the nominees should become unavailable for election due to
events not now known or anticipated, the persons named as proxies will vote for
such other nominee or nominees as the current Trustees may recommend. The
following tables present information about the nominees and the Trustees not
standing for re-election. Each nominee's or Trustee's date of birth is in
parentheses after his or her name. Unless otherwise noted, (i) each of the
nominees and Trustees has engaged in the principal occupation(s) noted in the
following tables for at least the most recent five years, although not
necessarily in the same capacity, and (ii) the address of each nominee is c/o
Scudder Kemper Investments, Inc., 222 South Riverside Plaza, Chicago, Illinois
60606.
Nominees for Election as Trustees:
-------------------------------------------------------------------------------
Year First
Name (Date of Birth), Principal Occupation and Affiliations Became a Board
Member
--------------------------------------------------------------------------------
John W. Ballantine (2/16/46),/(1)/ Retired; formerly, First
Chicago NBD Corporation/The First National Bank of Chicago: 1999
--------------------------------------------------------------------------------
-3-
<PAGE>
-------------------------------------------------------------------------------
Year First
Name (Date of Birth), Principal Occupation and Affiliations Became a Board
Member
--------------------------------------------------------------------------------
1996-1998 Executive Vice President and Chief Risk
Management Officer; 1995-1996 Executive Vice President and
Head of International Banking.
-------------------------------------------------------------------------------
Lewis A. Burnham (1/8/33),/(1)/ Retired; formerly, Partner,
Business Resources Group; formerly, Executive Vice
President, Anchor Glass Container Corporation. 1996
-------------------------------------------------------------------------------
Linda C. Coughlin (1/1/52),*/(2)/ Managing Director, Scudder
Kemper 2000
-------------------------------------------------------------------------------
Donald L. Dunaway (3/8/37),/(1)/ Retired; formerly, Executive
Vice President, A.O. Smith Corporation (diversified
manufacturer). 1996
-------------------------------------------------------------------------------
James R. Edgar (7/22/46),/(3)/ Distinguished Fellow, Nominee
University of Illinois Institute of Government and Public
Affairs; Director, Kemper Insurance Companies (not
affiliated with the Kemper Funds); formerly, Governor,
State of Illinois.
-------------------------------------------------------------------------------
William F. Glavin 8/30/58,* Managing Director, Scudder Nominee
Kemper
-------------------------------------------------------------------------------
Robert B. Hoffman (12/11/36),/(1)/ Retired; formerly,
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); Director, Harnischfeger Industries, Inc. 1996
-------------------------------------------------------------------------------
Shirley D. Peterson (9/3/41),/(1)/ Retired; formerly,
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. 1996
-------------------------------------------------------------------------------
Fred B. Renwick (2/1/30),/(3)/ Professor of Finance, New York Nominee
University, Stern School of Business; Director, the
Wartburg Foundation; Chairman, Investment Committee of
Morehouse College Board of Trustees; Director, American
Bible Society Investment Committee; previously member of
the Investment Committee of Atlanta University Board of
Trustees; formerly Director of Board of Pensions
Evangelical Lutheran Church in America.
-------------------------------------------------------------------------------
-4-
<PAGE>
--------------------------------------------------------------------------------
Year First
Became a
Name (Date of Birth), Principal Occupation and Affiliations Board
Member
--------------------------------------------------------------------------------
William P. Sommers (7/22/33),/(1)/ Consultant and Director,
SRI
Consulting; prior thereto, President and Chief Executive
Officer, SRI International (research and development); 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. 1996
--------------------------------------------------------------------------------
John G. Weithers (8/8/33),/(3)/ Formerly, Chairman of the Board Nominee
and Chief Executive Officer, Chicago Stock Exchange; Director,
Federal Life Insurance Company; President of the Members of
the Corporation and Trustee, DePaul University.
--------------------------------------------------------------------------------
* Interested person of the Fund, as defined in the Investment Company Act of
1940, as amended (the "1940 Act").
(1) Messrs. Ballantine, Burnham, Dunaway, Hoffman, Sommers and Ms. Peterson
serve as board members of 26 investment companies, with 45 portfolios
managed by Scudder Kemper.
(2) Ms. Coughlin serves as a board member of 52 investment companies with 97
portfolios managed by Scudder Kemper.
(3) Messrs. Edgar, Renwick and Weithers serve as board members of 16 investment
companies with 58 portfolios managed by Scudder Kemper.
Trustees Not Standing for Re-Election:
--------------------------------------------------------------------------------
Present Office with the Fund;
Principal Occupation or Employment
Name (Date of Birth) and Directorships
==================== =================
--------------------------------------------------------------------------------
Donald R. Jones (1/17/30) Trustee; 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)* Chairman, Trustee and Vice President;
Managing Director, Scudder Kemper;
formerly, Head of Broker Dealer Division
of Putnam Investment Management;
formerly, President of Client Management
Services for Fidelity Investments.
--------------------------------------------------------------------------------
* Interested person of the Fund, as defined in the 1940 Act.
-5-
<PAGE>
Appendix 1 lists the number of shares of the Fund owned directly or
beneficially by the Trustees and by the nominees for election.
Responsibilities of the Board of Trustees -- Board and Committee Meetings
The primary responsibility of the Board is to represent the interests of
the shareholders of the Fund and to provide oversight of the management of the
Fund. The board that is proposed for election at this Meeting is comprised of
two individuals who are considered "interested" Trustees, and nine individuals
who have no affiliation with Scudder Kemper and who are not considered
"interested" Trustees (the "Independent Trustees"). The SEC has recently
proposed a rule that would require a majority of the board members of a fund to
be "independent" if the fund were to take advantage of certain exemptive rules
under the 1940 Act. If the proposed Board of Trustees is approved by
shareholders, more than 75% will be Independent Trustees. The Independent
Trustees have been selected and nominated solely by the current Independent
Trustees of the Fund.
The Trustees meet multiple times during the year to review the investment
performance of the Fund and other operational matters, including policies and
procedures designed to assure compliance with regulatory and other requirements.
Furthermore, the Independent Trustees review the fees paid to the Investment
Manager and its affiliates for investment advisory services and other
administrative and shareholder services. The Trustees have adopted specific
policies and guidelines that, among other things, seek to further enhance the
effectiveness of the Independent Trustees in performing their duties. Many of
these are similar to those suggested in the Investment Company Institute's 1999
Report of the Advisory Group on Best Practices for Fund Directors (the "Advisory
Group Report"). For example, the Independent Trustees select independent legal
counsel to work with them in reviewing fees, advisory and other contracts and
overseeing fund matters, and regularly meet privately with their counsel.
Currently, the Board of Trustees has an Audit Committee and a Nominating
and Governance Committee, the responsibilities of which are described below. In
addition, the Board has a Valuation Committee and a Contract Renewal Committee.
During calendar year 2000, the Board of Trustees met eight times. Each then
current Trustee attended 75% or more of the respective meetings of the Board and
the Committees (if a member thereof) held during calendar year 2000.
Audit Committee
The Audit Committee makes recommendations regarding the selection of
independent auditors for the Fund, confers with the independent auditors
regarding the Fund's financial statements, the results of audits and related
matters, and performs such other tasks as the full Board of Trustees deems
necessary or appropriate. As suggested by the Advisory Group Report, the Audit
Committee is comprised of only Independent Trustees, receives annual
representations from the auditors as to their independence, and has a written
charter that delineates the committee's duties and powers. Currently, the
members of the Audit Committee are Donald L. Dunaway (Chairman), Robert B.
Hoffman and Donald R. Jones. The Audit Committee held five meetings during
calendar year 2000.
Nominating and Governance Committee
The Board of Trustees has a Nominating and Governance Committee, comprised
of only Independent Trustees, that seeks and reviews candidates for
consideration as nominees for membership on the Board and oversees the
administration of the Fund's Governance Procedures and Guidelines. The
Nominating and Governance Committee has a written charter that delineates the
committee's duties and powers. Shareholders wishing to submit the name of a
candidate for
-6-
<PAGE>
consideration by the committee should submit their recommendation(s) to the
Secretary of the Fund. Currently, the members of the Nominating and Governance
Committee are Lewis A. Burnham (Chairman), John W. Ballantine, Shirley D.
Peterson and William P. Sommers. The Nominating and Governance Committee held
one meeting during calendar year 2000.
Officers
The following persons are officers of the Fund:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
Present Office with the Fund;
Principal Occupation or
Name (Date of Birth) Employment Year First Became an Officer/1/
==================== ========== ============================
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mark S. Casady (9/21/60) President; Managing Director, 1998
Scudder Kemper; formerly,
Institutional Sales Manager of an
unaffiliated mutual fund distributor.
----------------------------------------------------------------------------------------------------------------------
Thomas W. Littauer (4/26/55) Vice President, Chairman and Trustee; 1998
Managing Director, Scudder Kemper;
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.
----------------------------------------------------------------------------------------------------------------------
Philip J. Collora (11/15/45) Vice President and Secretary; 1996
Attorney, Senior Vice President,
Scudder Kemper.
----------------------------------------------------------------------------------------------------------------------
Kathryn L. Quirk (12/3/52) Vice President; Managing 1998
Director, Scudder Kemper.
----------------------------------------------------------------------------------------------------------------------
William F. Truscott (9/14/60) Vice President; Managing 2000
Director, Scudder Kemper.
----------------------------------------------------------------------------------------------------------------------
Theresa Gusman (2/29/60) Vice President; Senior Vice President, 1999
Scudder Kemper.
----------------------------------------------------------------------------------------------------------------------
Tien Yu Sieh (9/26/69) Vice President; Senior Vice President, 2000
Scudder Kemper.
----------------------------------------------------------------------------------------------------------------------
Linda J. Wondrack (9/12/64) Vice President; Senior Vice 1998
President, Scudder Kemper.
----------------------------------------------------------------------------------------------------------------------
John R. Hebble (6/27/58) Treasurer; Senior Vice President, 1998
Scudder Kemper.
----------------------------------------------------------------------------------------------------------------------
Maureen E. Kane (2/14/62) Assistant Secretary; Vice President, 1998
Scudder Kemper; formerly, Assistant
Vice President of an unaffiliated
investment management firm; prior
thereto, Associate Staff Attorney of
an unaffiliated
----------------------------------------------------------------------------------------------------------------------
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
Present Office with the Fund;
Principal Occupation or
Name (Date of Birth) Employment Year First Became an Officer/1/
==================== ========== ============================
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
investment
management firm, and Associate,
Peabody & Arnold (law firm).
----------------------------------------------------------------------------------------------------------------------
Caroline Pearson (4/1/62) Assistant Secretary; Senior Vice 1998
President, Scudder Kemper;
formerly, Associate, Dechert
Price & Rhoads (law firm) 1989 to
1997.
----------------------------------------------------------------------------------------------------------------------
Brenda Lyons (2/21/63) Assistant Treasurer; Senior Vice 1998
President, Scudder Kemper.
----------------------------------------------------------------------------------------------------------------------
</TABLE>
1 The President, Treasurer and Secretary each holds office until the first
meeting of Trustees in each calendar year and until his or her successor has
been duly elected and qualified, and all other officers hold offices as the
Trustees permit in accordance with the By-laws of the Fund.
Compensation of Trustees and Officers
The Fund pays the Independent Trustees a monthly retainer and an attendance
fee, plus expenses, for each Board meeting and committee meeting attended. As
reflected below, the Trustees currently serve as board members of various other
Kemper Funds. Scudder Kemper supervises the Fund's investments, pays the
compensation and expenses of its personnel who serve as Trustees and officers on
behalf of the Fund and receives a management fee for its services. Several of
the officers and Trustees are also officers, directors, employees or
stockholders of Scudder Kemper and participate in the fees paid to that firm,
although the Fund makes no direct payments to them.
To facilitate the restructuring of the boards of the Kemper Funds, certain
Independent Trustees agreed not to stand for re-election. Independent Trustees
of the Fund are not entitled to benefits under any pension or retirement plan.
However, the Board of each Kemper Fund determined that, particularly given the
benefits that would accrue to the Kemper Funds from the restructuring of the
boards, it was appropriate to provide the four Independent Trustees who were not
standing for re-election for various Kemper Funds a one-time benefit. The cost
of such benefit is being allocated among all the Kemper Funds, with Scudder
Kemper agreeing to bear one-half of the cost of such benefit, given that Scudder
Kemper also benefits from administrative efficiencies of a consolidated board.
Mr. Jones, an Independent Trustee of the Fund who is not standing for re-
election, will receive such a one-time benefit. The amount received on behalf of
each fund for which he serves as a trustee ranges from $1,071 to $8,078.
The following Compensation Table provides in tabular form the following
data:
Column (1) All Trustees who receive compensation from the Fund.
Column (2) Aggregate compensation received by each Trustee from the Fund
during calendar year 2000.
Column (3) Total compensation received by each Trustee from funds advised
by Scudder Kemper (collectively, the "Fund Complex") during calendar year 2000.
-8-
<PAGE>
Compensation Table
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Aggregate Compensation Total Compensation From
Name of Trustee from Fund Fund Complex/(2)(3)/
--------------- --------- ------------
<S> <C> <C>
John W. Ballantine $ [ ] $ [ ]
----------------------------------------------------------------------------------------------------
Lewis A. Burnham $ [ ] $ [ ]
----------------------------------------------------------------------------------------------------
Donald L. Dunaway/(1)/ $ [ ] $ [ ]
----------------------------------------------------------------------------------------------------
Robert B. Hoffman $ [ ] $ [ ]
----------------------------------------------------------------------------------------------------
Donald R. Jones $ [ ] $ [ ]
----------------------------------------------------------------------------------------------------
Shirley D. Peterson $ [ ] $ [ ]
----------------------------------------------------------------------------------------------------
William P. Sommers $ [ ] $ [ ]
----------------------------------------------------------------------------------------------------
</TABLE>
/(1)/ Includes deferred fees. Pursuant to deferred compensation agreements with
the Fund, deferred amounts accrue interest monthly at a rate equal to the yield
of Zurich Money Funds -- Zurich Money Market Fund. Total deferred fees
(including interest thereon) payable from the Fund to Mr. Dunaway are $_______.
/(2)/ Includes compensation for service on the boards of [ ] Kemper
trusts/corporations comprised of [ ] funds. Each Trustee currently serves on
the boards of [ ] Kemper trusts/corporations comprised of [ ] funds.
/(3)/ Aggregate compensation does not reflect amounts paid to the Trustees for
special meetings in connection with the Scudder Kemper restructuring initiative.
Such amounts totaled [$_______, $_______, $_______, $_______, $_______, $_______
and $_______ for Messrs. Ballantine, Burnham, Dunaway, Hoffman, Jones, Sommers
and Ms. Peterson,] respectively.
The Board of Trustees unanimously recommends
that the shareholders of the Fund vote FOR each nominee.
PROPOSAL 2: APPROVAL OF AGREEMENT
AND PLAN OF REORGANIZATION
I. SYNOPSIS
Introduction
The Board of Trustees, including all of the Independent Trustees, approved
the Plan at a meeting held on November 29, 2000. Subject to its approval by the
shareholders of the Fund, the Plan provides for (a) the transfer of all or
substantially all of the assets and all of the liabilities of the Fund to
Scudder Pacific Opportunities Fund in exchange for Class A, Class B and Class C
shares of Scudder Pacific Opportunities Fund; (b) the distribution of such
shares to the shareholders of the Fund in complete liquidation of the Fund; and
(c) the termination of the Fund. As a result of the Reorganization, each
shareholder of the Fund will become a shareholder of Scudder Pacific
Opportunities Fund, a fund with similar investment characteristics and managed
by the same investment manager as the Fund. Immediately after the
Reorganization, each shareholder of the Fund will hold shares of the class of
shares of Scudder Pacific Opportunities Fund that corresponds to the class of
shares of the Fund held by that shareholder on the Valuation Date, having an
aggregate net asset value equal to the aggregate net asset value of such
shareholder's shares of the Fund on the Valuation Date.
-9-
<PAGE>
Scudder Kemper is the investment manager of both Funds. If the
Reorganization is completed, the Fund's shareholders will continue to enjoy all
of the same shareholder privileges as they currently enjoy, such as access to
professional service representatives, exchange privileges and automatic dividend
reinvestment. Services provided to the Class A, Class B and Class C shareholders
of Scudder Pacific Opportunities Fund following the Reorganization will be
identical to those currently provided to shareholders of the corresponding class
of the Fund. See "Purchase, Redemption and Exchange Information."
Background of the Reorganization
The Reorganization is part of a broader restructuring program to respond to
changing industry conditions and investor needs. The mutual fund industry has
grown dramatically over the last ten years. During this period of rapid growth,
investment managers expanded the range of fund offerings that are available to
investors in an effort to meet the growing and changing needs and desires of an
increasingly large and dynamic group of investors. With this expansion has come
increased complexity and competition among mutual funds, as well as the
potential for increased confusion among investors. The group of funds advised by
Scudder Kemper has followed this pattern.
As a result, Scudder Kemper has sought ways to restructure and streamline
the management and operations of the funds it advises by consolidating all of
the retail mutual funds that it currently sponsors into a single product line
offered under the "Scudder" name. Scudder Kemper believes, and has advised the
boards, that further reducing the number of funds it advises and adding the
classes of shares currently offered on all Kemper Funds to the Scudder Funds
will benefit fund shareholders. Scudder Kemper has, therefore, proposed the
combination of many Scudder Funds and Kemper Funds that have similar or
compatible investment objectives and policies. Scudder Kemper believes that the
larger funds, along with the fewer number of funds, that result from these
combinations may help to enhance investment performance and increase efficiency
of operations. The restructuring program will not result in any changes in the
shareholder services currently offered to shareholders of the Kemper Funds.
Most of the Scudder Funds have recently adopted a new fee structure for
certain administrative services. Under this fee structure, in exchange for
payment by a fund of a single administrative fee rate, Scudder Kemper provides
or pays for substantially all services that the fund normally requires for its
operations, other than those provided under the fund's investment management
agreement and certain other expenses. This administrative fee enables investors
to determine with greater certainty the expense level that a fund will
experience, and, for the term of the administration agreement, transfers
substantially all of the risk of increased costs to Scudder Kemper. Likewise,
Scudder Kemper receives all of the benefits of economies of scale from increases
in asset size or decreased operating expenses. Scudder Pacific Opportunities
Fund has implemented such an administrative fee, as described in "Administrative
Fee" below. As part of the restructuring effort, Scudder Kemper has proposed
extending this administrative fee structure to those funds currently offered
under the Kemper name.
The fund consolidations and the consolidation of the boards currently
overseeing the Kemper Funds (see Proposal 1 above) are expected to have a
positive impact on Scudder Kemper, as well. These changes are likely to result
in reduced costs (and the potential for increased profitability) for Scudder
Kemper in advising or servicing funds.
-10-
<PAGE>
Reasons for the Proposed Reorganization; Board Approval
Since receiving Scudder Kemper's proposals on May 24, 2000, the Independent
Trustees have conducted a thorough review of all aspects of the proposed
restructuring program. They have been assisted in this regard by their
independent counsel and by independent consultants with special expertise in
financial and mutual fund industry matters. In the course of discussions with
representatives of Scudder Kemper, the Independent Trustees have requested, and
Scudder Kemper has accepted, numerous changes designed to protect and enhance
the interests of shareholders. See "The Proposed Transaction - Board Approval of
the Proposed Transaction" below.
In determining whether to recommend that the shareholders of the Fund
approve the Reorganization, the Board of Trustees considered that:
. As part of Scudder Kemper's overall restructuring, the Fund would be
duplicative of another similar fund advised by Scudder Kemper in the
same distribution channel.
. The combined fund would adopt the lower fee schedule of the two Funds'
investment management agreements.
. The fixed fee rate under the Administration Agreement is expected to be
less than the estimated current applicable operating expenses the Fund
would otherwise pay.
. It is a condition of the Reorganization that each Fund receive an
opinion of tax counsel that the transaction would be a tax-free
transaction.
. Although the Fund agreed to pay the estimated costs of the
Reorganization allocated to Class A shares and a portion of the
estimated costs of the Reorganization allocated to Class B and Class C
shares, management has estimated that such allocated costs will be
recoverable from lower overall expense rates within six months of
completion of the Reorganization. Scudder Kemper agreed to pay a portion
of the estimated costs of the Reorganization allocated to Class B and
Class C shares and all of the costs of the Reorganization that exceed
estimated costs.
For these reasons, as more fully described below under "The Proposed
Transaction -- Board Approval of the Proposed Transaction," the Board of
Trustees, including the Independent Trustees, has concluded that:
. the Reorganization is in the best interests of the Fund and its
shareholders; and
. the interests of the existing shareholders of the Fund will not be
diluted as a result of the Reorganization.
Accordingly, the Trustees unanimously recommend approval of the Plan
effecting the Reorganization. If the Plan is not approved, the Fund will
continue in existence unless other action is taken by the Trustees.
Investment Objectives, Policies and Restrictions of the Funds
This section will help you compare the investment objectives and policies
of the Fund and Scudder Pacific Opportunities Fund. Please be aware that this
is only a summary. More complete information may be found in the Funds'
prospectuses.
-11-
<PAGE>
The investment objectives, policies and restrictions of the Funds are
similar. Some differences do exist. The investment objective of each Fund is to
seek long-term growth of capital. There can be no assurance that either Fund
will achieve its investment objective.
Each fund invests a required percentage of its assets in certain regions;
however, those required percentages and regions vary. Scudder Pacific
Opportunities Fund seeks to achieve its investment objective by investing at
least 65% of its total assets in Pacific Basin common stocks and other equities
(equities that are traded mainly on Pacific Basin markets, issued by companies
organized under the laws of a Pacific Basin country or issued by any company
with more than half of its business in the Pacific Basin). Examples of Pacific
Basin countries include China, Malaysia, Sri Lanka, Australia and India. Scudder
Pacific Opportunities Fund generally intends to focus on common stocks from the
region's smaller emerging markets and does not invest in Japan. The Fund invests
at least 85% of its total assets in common stocks and other Asian equities
(equities that are issued by companies organized under the laws of an Asian
country or traded mainly on Asian markets and do more than half of their
business in Asia). The Fund generally focuses on emerging Asian markets, such as
China, Indonesia, Korea and Thailand.
Both Funds have the same lead portfolio manager. Each Fund's portfolio
management team follows a substantially similar process in analyzing investment
opportunities. In choosing stocks for each Fund, the Investment Manager uses a
combination of bottom-up research, growth orientation, and analysis of regional
themes. Each Fund will normally sell a stock when the Investment Manager
believes its price is unlikely to go much higher, other investments offer better
opportunities or when adjusting its emphasis on a given country. In addition,
Scudder Pacific Opportunities Fund will normally sell a stock when its
fundamentals have deteriorated and the Fund will normally sell a stock to adjust
its exposure to a given industry. Although each Fund is permitted to use various
types of derivatives (contracts whose value is based on, for example, indices,
currencies or securities), the Investment Manager does not expect to use them as
principal investments for either Fund, and might not use them at all.
While most of each Fund's equity investments are common stocks, some may be
other types of equities, such as convertible stocks or preferred stocks. Scudder
Pacific Opportunities Fund may invest up to 35% of its total assets in foreign
or domestic debt securities in the top three credit grades, or in non-Pacific
Basin equities (excluding Japan). The Fund may invest only up to 15% of its
total assets in debt securities, which may be of any issuer or any credit
quality (including junk bonds; i.e., those rated grade BB and below), or in non-
Asian equities. Unlike the Fund, Scudder Pacific Opportunities Fund may not
invest in Japan.
The Funds' fundamental investment restrictions, as set forth under
"Investment Restrictions" in each Fund's statement of additional information,
are identical. Fundamental investment restrictions may not be changed without
the approval of Fund shareholders. The Funds' non-fundamental investment
restrictions (i.e., those changeable by the Board without shareholder approval),
as set forth under "Investment Restrictions" in each Fund's statement of
additional information, are identical, except that: (i) Scudder Pacific
Opportunities Fund may not lend portfolio securities in an amount greater than
5% of its total assets, while the Fund may not lend portfolio securities in an
amount greater than one third of its total assets, and (ii) the Fund (but not
Scudder Pacific Opportunities Fund) has a stated non-fundamental investment
restriction limiting the Fund's investments in illiquid securities to no more
than 15% of its net assets. Both Funds are, however, subject to such a
restriction pursuant to applicable regulation. Investors should refer to each
Fund's statement of additional information for a more detailed description of
that Fund's investment policies and restrictions.
-12-
<PAGE>
Portfolio Turnover
The portfolio turnover rate for Scudder Pacific Opportunities Fund, i.e.,
the ratio of the lesser of annual sales or purchases to the monthly average
value of the portfolio (excluding from both the numerator and the denominator
securities with maturities at the time of acquisition of one year or less), for
the fiscal year ended October 31, 2000 was 134%. The portfolio turnover rate for
the Fund for the fiscal year ended November 30, 2000 was [ ]%. A higher
portfolio turnover rate involves greater brokerage and transaction expenses to a
fund and may result in the realization of net capital gains, which would be
taxable to shareholders when distributed.
Comparative Considerations
The portfolio characteristics of the combined Fund after the Reorganization
will reflect the blended characteristics of the Fund and Scudder Pacific
Opportunities Fund. The following characteristics are as of ________, 2000 for
both Funds and also reflect the blended characteristics of both Funds after the
Reorganization as of that same date.
Portfolio Composition (1)
As a % of Net Assets
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
% in % in % in % in % in Average
Asian Non-Asian Pacific Non-Asian Bonds Market-Cap
Equities Equities Basin and Non- ($)
Equities Pacific
Basin
Equities
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fund
----------------------------------------------------------------------------------------------------
Scudder Pacific
Opportunities Fund
----------------------------------------------------------------------------------------------------
Pro Forma (Combined) (2)
----------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund normally invests at least 85% of its total assets in common stocks
and other Asian equities (equities that are issued by companies organized under
the laws of an Asian country or traded mainly on Asian markets and do more than
half of their business in Asia). The Fund generally intends to focus on emerging
Asian markets, such as China, Indonesia, Korea, and Thailand. Scudder Pacific
Opportunities Fund normally invests at least 65% of its total assets in Pacific
Basin common stocks and other equities (equities that are traded mainly by
companies organized under the laws of a Pacific Basin country or issued by any
company with more than half of its business in the Pacific Basin). Examples of
Pacific Basin countries include China, Malaysia, Sri Lanka, Australia and India.
For more information, see "Investment Objectives, Policies and Restrictions of
the Funds."
(2) Reflects the blended characteristics of the Fund and Scudder Pacific
Opportunities Fund as of ________, 2000.
Performance
The following table shows how the returns of the Fund and Scudder Pacific
Opportunities Fund over different periods average out. For context, the table
also includes a broad-based market index (which, unlike the Funds, does not have
any fees or expenses). The performances of both Funds
-13-
<PAGE>
and the index vary over time, and past performance is not necessarily indicative
of future results. All figures assume reinvestment of dividends and
distributions.
Average Annual Total Return
for the Periods Ended December 31, 2000
[Insert Table]
For management's discussion of Scudder Pacific Opportunities Fund's
performance for the fiscal year ended October 31, 2000, please refer to
Exhibit B.
Investment Manager; Fees and Expenses
Each Fund retains the investment management firm of Scudder Kemper,
pursuant to separate contracts, to manage its daily investment and business
affairs, subject to the policies established by each Fund's Trustees. Scudder
Kemper is a Delaware corporation located at 345 Park Avenue, New York, New York
10154-0010.
Pursuant to separate contracts, each Fund pays the Investment Manager an
investment management fee, although the fee rates differ. As of October 31,
2000, Scudder Pacific Opportunities Fund had total net assets of $104,770,568.
For the fiscal year ended October 31, 2000, Scudder Pacific Opportunities Fund
paid the Investment Manager a fee of 1.10% of its average daily net assets.
Unlike the fee paid by Scudder Pacific Opportunities Fund, the fee paid by
the Fund is graduated so that increases in the Fund's net assets may result in a
lower annual fee rate and decreases in its net assets may result in a higher
annual fee rate. However, the Investment Manager has contractually agreed to cap
the Fund's total operating expenses expressed as a percentage of average daily
net assets at 2.20%, 2.78% and 2.80% for Class A, Class B and Class C shares,
respectively, through February 28, 2002. As of November 30, 2000, the Fund had
total net assets of $[ ]. For the fiscal year ended November 30, 2000,
the Fund paid the Investment Manager a fee of [ ]% of its average daily
net assets.
Currently the fee schedules for the Fund and Scudder Pacific Opportunities
Fund are as follows:
<TABLE>
<CAPTION>
---------------------------------------------- ------------------------------------------
Fund Scudder Pacific Opportunities Fund
---- ----------------------------------
----------------------------------------------
------------------------------------------
Average Daily Net Assets Fee Rate Average Daily Net Assets Fee Rate
------------------------ -------- ------------------------ --------
---------------------------------------------- ------------------------------------------
<S> <C> <C> <C>
First $250 million 0.85% First $500 million 1.10%
---------------------------------------------- ------------------------------------------
Next $750 million 0.82% Over $500 million 1.05%
---------------------------------------------- ------------------------------------------
Next $1.5 billion 0.80%
----------------------------------------------
Next $2.5 billion 0.78%
----------------------------------------------
Next $2.5 billion 0.75%
----------------------------------------------
Next $2.5 billion 0.74%
----------------------------------------------
Next $2.5 billion 0.73%
----------------------------------------------
Over $12.5 billion 0.72%
---------------------------------------------- ------------------------------------------
</TABLE>
Scudder Kemper has proposed that Scudder Pacific Opportunities Fund adopt
the lower fee schedule of the Fund stated in the table above. The effectiveness
of the new investment management agreement for Scudder Pacific Opportunities
Fund and the Closing are contingent upon each other.
-14-
<PAGE>
Based upon the Fund's average net assets for the twelve months ended September
30, 2000, the effective advisory fee rate for the Fund is 0.85%. Based upon each
Fund's average net assets for the twelve months ended September 30, 2000, the
effective advisory fee rate for Scudder Pacific Opportunities Fund after the
Reorganization would be 0.85% of average daily net assets, giving effect to the
proposed new investment management agreement.
From its investment management fee received from each Fund, Scudder Kemper
pays to each Fund's sub-adviser, Scudder Investments Singapore Limited, 30 Cecil
Street, Prudential Tower #24-01/02, Singapore, a monthly fee at the annual rate
of 0.385% of Scudder Pacific Opportunities Fund's average daily net assets and
0.2975% of the Fund's average daily net assets.
Administrative Fee
Scudder Pacific Opportunities Fund has entered into an administration
agreement with Scudder Kemper (the "Administration Agreement"), pursuant to
which Scudder Kemper provides or pays others to provide substantially all of the
administrative services required by the Class A, Class B and Class C shares of
Scudder Pacific Opportunities Fund (other than those provided by Scudder Kemper
under its investment management agreement with that Fund) in exchange for the
payment by Scudder Pacific Opportunities Fund of an annual administrative
services fee (the "Administrative Fee") equal to 0.675%, 0.725% and 0.700% of
average daily net assets attributable to the Class A, Class B and Class C
shares, respectively. The fees for the services provided by Kemper Distributors,
Inc. ("KDI") under its current services agreement and underwriting and
distribution agreement with Scudder Pacific Opportunities Fund are not covered
by, and are in addition to, the Administrative Fee. One effect of this
arrangement is to make Scudder Pacific Opportunities Fund's future expense ratio
more predictable. On the other hand, the administrative fee rate does not
decrease with economies of scale from increases in asset size or decreased
operating expenses. The details of this arrangement (including expenses that are
not covered) are set out below.
Various service providers (the "Service Providers"), some of which are
affiliated with Scudder Kemper, provide certain services to Scudder Pacific
Opportunities Fund pursuant to separate agreements. These Service Providers may
differ from current Service Providers of the Fund. Scudder Fund Accounting
Corporation, a subsidiary of Scudder Kemper, computes net asset value for
Scudder Pacific Opportunities Fund and maintains its accounting records. Kemper
Service Company, also a subsidiary of Scudder Kemper, is the transfer,
shareholder servicing and dividend-paying agent for the Class A, Class B and
Class C shares of Scudder Pacific Opportunities Fund. Scudder Trust Company, an
affiliate of Scudder Kemper, provides subaccounting and recordkeeping services
for shareholder accounts in certain retirement and employee benefit plans. As
custodian, Brown Brothers Harriman & Company holds the portfolio securities of
Scudder Pacific Opportunities Fund, pursuant to a custodian agreement. Other
Service Providers include the independent public accountants and legal counsel
for Scudder Pacific Opportunities Fund.
Under the Administration Agreement, each Service Provider provides the
services to Scudder Pacific Opportunities Fund described above, except that
Scudder Kemper pays these entities for the provision of their services to
Scudder Pacific Opportunities Fund and pays most other fund expenses, including
insurance, registration, printing and postage fees. In return, Scudder Pacific
Opportunities Fund pays Scudder Kemper the Administrative Fee.
The Administration Agreement will remain in effect with respect to the
Class A, Class B and Class C shares for an initial term ending September 30,
2003, subject to earlier termination by the
-15-
<PAGE>
directors that oversee Scudder Pacific Opportunities Fund. The fee payable by
Scudder Pacific Opportunities Fund to Scudder Kemper pursuant to the
Administration Agreement is reduced by the amount of any credit received
from Scudder Pacific Opportunities Fund's custodian for cash balances.
Certain expenses of Scudder Pacific Opportunities Fund are not borne by
Scudder Kemper under the Administration Agreement, such as taxes, brokerage,
interest and extraordinary expenses, and the fees and expenses of the
Independent Trustees (including the fees and expenses of their independent
counsel). Scudder Pacific Opportunities Fund continues to pay the fees required
by its investment management agreement with Scudder Kemper. In addition, it pays
the fees under its services agreement and underwriting and distribution services
agreement with KDI, as described in "Distribution and Service Fees" below.
Comparison of Expenses
The tables and examples below are designed to assist you in understanding
the various costs and expenses that you will bear directly or indirectly as an
investor in the Class A, Class B and Class C shares of Scudder Pacific
Opportunities Fund, and compares these with the expenses of the Fund. [Statement
to be inserted regarding comparison of expenses.] Unless otherwise noted, the
information is based on each Fund's expenses and average daily net assets during
the twelve months ended September 30, 2000 and on a pro forma basis as of that
date and for the twelve month period then ended, assuming the Reorganization had
been in effect for the period.
Expense Comparison Table
Class A Shares
<TABLE>
<CAPTION>
Scudder
Pacific
Opportunities Pro Forma
Fund Fund (Combined)(1)
---- ---- ----------
Shareholder Fees
----------------
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases 5.75% 5.75% 5.75%
(as % of offering price)
Maximum Contingent Deferred Sales Charge (Load) None None None
(as % of redemption proceeds)(2)
Maximum Deferred Sales Charge (Load) imposed on None None None
reinvested dividends
Redemption Fee (as a percentage of amount None None None
redeemed, if applicable)
Annual Fund Operating Expenses (unaudited)
------------------------------------------
(as a % of average net assets)
------------------------------
Management Fees 0.85% 1.10% 0.85%
Rule 12b-1/ASF Fees 0.25% 0.25% 0.25%
</TABLE>
-16-
<PAGE>
<TABLE>
<S> <C> <C> <C>
Other Expenses 1.61% 0.68%(3) 0.68%
Total Annual Fund Operating Expenses 2.71% 2.03% 1.78%
Expense Waiver 0.51% None None
Net Annual Fund Operating Expenses 2.20%(4) 2.03% 1.78%
Expense Example of Total Operating Expenses at
----------------------------------------------
the End of the Period(5)
------------------------
One Year $ 785 $ 769 $ 745
Three Years $1,322 $1,175 $1,103
Five Years $1,885 $1,605 $1,484
Ten Years $3,406 $2,798 $2,549
</TABLE>
________________
Notes to Expense Comparison Table:
----------------------------------
(1) The Pro Forma column reflects expenses estimated for the Reorganized Fund
subsequent to the Reorganization and reflects the effect of the
Reorganization. Pro Forma expenses reflect the implementation of a new
investment management fee for Scudder Pacific Opportunities Fund to be
effective upon the Reorganization, the implementation of Scudder Pacific
Opportunities Fund's Administration Agreement and adoption of a
distribution plan.
(2) Class A shares purchased under the Large Order NAV Purchase Privilege have
a 1% contingent deferred sales charge if sold during the first year after
purchase and .50% if sold during the second year after purchase.
(3) Restated to reflect the implementation of Scudder Pacific Opportunities
Fund's Administration Agreement.
(4) By contract, total operating expenses of the Class A shares of the Fund are
capped at 2.20%, through February 28, 2002. There is no guarantee that
this expense waiver will continue beyond February 28, 2002.
(5) Expense examples reflect what an investor would pay on a $10,000
investment, assuming a 5% annual return, the reinvestment of all dividends,
total operating expenses remain the same and redemptions at the end of each
period.
Expense Comparison Table
Class B Shares
<TABLE>
<CAPTION>
Scudder
Pacific
Opportunities Pro Forma
Fund Fund (Combined)(1)
---- ---- ----------
Shareholder Fees
----------------
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases None None None
(as % of offering price)
Maximum Contingent Deferred Sales Charge (Load) 4.00% 4.00% 4.00%
(as % of redemption proceeds)(2)
</TABLE>
-17-
<PAGE>
<TABLE>
<S> <C> <C> <C>
Maximum Deferred Sales Charge (Load) imposed on None None None
reinvested dividends
Redemption Fee (as a percentage of amount None None None
redeemed, if applicable)
Annual Fund Operating Expenses (unaudited)
------------------------------------------
(as a % of average net assets)
------------------------------
Management Fees 0.85% 1.10% 0.85%
Rule 12b-1/ASF Fees 1.00% 1.00% 1.00%
Other Expenses 1.64% 0.73%(3) 0.73%
Total Annual Fund Operating Expenses 3.49% 2.83% 2.58%
Expense Waiver 0.71% None None
Net Annual Fund Operating Expenses 2.78%(4) 2.83% 2.58%
Expense Example of Total Operating Expenses
-------------------------------------------
Assuming Redemption at the End of the Period(5)
--------------------------------------------
One Year $ 681 $ 686 $ 661
Three Years $1,305 $1,177 $1,102
Five Years $1,952 $1,694 $1,570
Ten Years $3,383 $2,792 $2,541
Expense Example of Total Operating Expenses
-------------------------------------------
Assuming No Redemption at the End of the Period(5)
-----------------------------------------------
One Year $ 281 $ 286 $ 261
Three Years $1,005 $ 877 $ 802
Five Years $1,752 $1,494 $1,370
Ten Years $3,383 $2,792 $2,541
</TABLE>
___________
Notes to Expense Comparison Table:
----------------------------------
(1) The Pro Forma column reflects expenses estimated for the Reorganized Fund
subsequent to the Reorganization and reflects the effect of the
Reorganization. Pro Forma expenses reflect the implementation of a new
investment management fee for Scudder Pacific Opportunities Fund to be
effective upon the Reorganization, the implementation of Scudder Pacific
Opportunities Fund's Administration Agreement and adoption of a
distribution plan.
(2) Contingent deferred sales charges on Class B shares sold during the first
six years of ownership are 4% in the first year, 3% in the second and third
year, 2% in the fourth and fifth year, and 1% in the sixth year.
-18-
<PAGE>
(3) Restated to reflect the implementation of Scudder Pacific Opportunities
Fund's Administration Agreement.
(4) By contract, total operating expenses of the Class B shares of the Fund are
capped at 2.78%, through February 28, 2002. There is no guarantee that
this expense waiver will continue beyond February 28, 2002.
(5) Expense examples reflect what an investor would pay on a $10,000
investment, assuming a 5% annual return, the reinvestment of all dividends,
total operating expenses remain the same and redemptions at the end of each
period. Assumes conversion to Class A shares six years after purchase.
Expense Comparison Table
Class C Shares
<TABLE>
<CAPTION>
Scudder
Pacific
Opportunities Pro Forma
Fund Fund (Combined)(1)
---- ---- ---------
Shareholder Fees
----------------
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on None None None
Purchases (as % of offering price)
Maximum Contingent Deferred Sales Charge 1.00% 1.00% 1.00%
(Load) (as % of redemption proceeds)(2)
Maximum Deferred Sales Charge (Load) imposed on None None None
reinvested dividends
Redemption Fee (as a percentage of amount None None None
redeemed, if applicable)
Annual Fund Operating Expenses (unaudited)
------------------------------------------
(as a % of average net assets)
------------------------------
Management Fees 0.85% 1.10% 0.85%
Rule 12b-1/ASF Fees 1.00% 1.00% 1.00%
Other Expenses 1.79% 0.70%(3) 0.70%
Total Annual Fund Operating Expenses 3.64% 2.80% 2.55%
Expense Waiver 0.84% None None
Net Annual Fund Operating Expenses 2.80%(4) 2.80% 2.55%
Expense Example of Total Operating Expenses
-------------------------------------------
Assuming Redemption at the End of the
-------------------------------------
Period(5)
------
One Year $ 383 $ 383 $ 358
Three Years $1,037 $ 868 $ 794
</TABLE>
-19-
<PAGE>
Five Years $1,812 $1,479 $1,355
Ten Years $3,843 $3,128 $2,885
Expense Example of Total Operating Expenses
-------------------------------------------
Assuming No Redemption at the End of the
----------------------------------------
Period(5)
------
One Year $ 283 $ 283 $ 258
Three Years $1,037 $ 868 $ 794
Five Years $1,812 $1,479 $1,355
Ten Years $3,843 $3,128 $2,885
___________
Notes to Expense Comparison Table:
----------------------------------
(1) The Pro Forma column reflects expenses estimated for the Reorganized Fund
subsequent to the Reorganization and reflects the effect of the
Reorganization. Pro Forma expenses reflect the implementation of a new
investment management fee for Scudder Pacific Opportunities Fund to be
effective upon the Reorganization, the implementation of Scudder Pacific
Opportunities Fund's Administration Agreement and adoption of a
distribution plan.
(2) Contingent deferred sales charge on Class C shares is 1% for shares sold
during the first year after purchase.
(3) Restated to reflect the implementation of Scudder Pacific Opportunities
Fund's Administration Agreement.
(4) By contract, total operating expenses of the Class C shares of the Fund are
capped at 2.80%, through February 28, 2002. There is no guarantee that this
expense waiver will continue beyond February 28, 2002.
(5) Expense examples reflect what an investor would pay on a $10,000
investment, assuming a 5% annual return, the reinvestment of all dividends
and total operating expenses remain the same.
Distribution and Services Fees
Pursuant to an underwriting and distribution services agreement with
Scudder Pacific Opportunities Fund, KDI, 222 South Riverside Plaza, Chicago,
Illinois 60606, an affiliate of the Investment Manager, acts as the
principal underwriter and distributor of the Class A, Class B and Class C shares
of that Fund and acts as agent of the Fund in the continuing offer of such
shares. Scudder Pacific Opportunities Fund has adopted distribution plans on
behalf of the Class A, Class B and Class C shares in accordance with Rule 12b-1
under the 1940 Act that are substantially identical to the existing distribution
plans adopted by the Fund, with one exception. As under the current distribution
plans for the Fund, Scudder Pacific Opportunities Fund pays KDI an asset-based
fee at an annual rate of 0.75% of Class B and Class C shares. The distribution
plans for Scudder Pacific Opportunities Fund, however, unlike the distribution
plans for the Fund, also authorize the payment to KDI of the 0.25% services fee
with respect to the Class A, Class B and Class C shares pursuant to the services
agreement described below. Neither KDI nor the Trustees of the Fund believe that
the services performed by KDI under the services agreement have been primarily
intended to result in sales of fund shares (i.e., "distribution" services) as
defined in Rule 12b-1, but rather are post-sale administrative and other
services provided to existing shareholders. Nonetheless, to avoid legal
uncertainties due to the ambiguity of the language contained in Rule 12b-1 and
eliminate any doubt that may arise in the future regarding whether the services
performed by KDI under the services agreement are "distribution"
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<PAGE>
services, the distribution plans for Scudder Pacific Opportunities Fund
authorize the payment of the services fee. The fact that the services fee is
authorized by Scudder Pacific Opportunities Fund's distribution plans does not
change the fee rate or affect the nature or quality of the services provided by
KDI.
Pursuant to the services agreement with Scudder Pacific Opportunities Fund,
which is substantially identical to the current services agreement with the
Fund, KDI receives a services fee of up to 0.25% per year with respect to
the Class A, Class B and Class C shares of Scudder Pacific Opportunities Fund.
KDI uses the services fee to compensate financial services firms ("firms")
for providing personal services and maintenance of accounts for their customers
that hold those classes of shares of Scudder Pacific Opportunities Fund, and may
retain any portion of the fee not paid to firms to compensate itself for
administrative functions performed for the Fund. All fee amounts are payable
monthly and are based on the average daily net assets of each Fund attributable
to the relevant class of shares.
Purchases, Exchanges, and Redemptions
Both Funds are part of the Scudder Kemper complex of mutual funds. The
procedures for purchases, exchanges, and redemptions of Class A, Class B and
Class C shares of Scudder Pacific Opportunities Fund are identical to those of
the Fund. Shares of Scudder Pacific Opportunities Fund are exchangeable for
shares of the same class of most other open-end funds advised by Scudder Kemper
offering such shares.
Corresponding classes of shares of Scudder Pacific Opportunities Fund have
identical sales charges to those of the Fund. Scudder Pacific Opportunities Fund
has a maximum initial sales charge of 5.75% on Class A shares. Shareholders who
purchase $1 million or more of Class A shares pay no initial sales charge but
may have to pay a contingent deferred sales charge (a "CDSC") of up to 1% if the
shares are sold within 2 years of the date on which they were purchased. Class B
shares are sold without a front-end sales charge, but may be subject to a CDSC
upon redemption, depending on the length of time the shares are held. The CDSC
begins at 4% for shares sold in the first year, declines to 1% in the sixth year
and is eliminated after the sixth year. After six years, Class B shares
automatically convert to Class A shares. Class C shares are sold without a
front-end sales charge, but may be subject to a CDSC of up to 1% if the shares
are sold within one year of purchase.
Class A, Class B and Class C shares of Scudder Pacific Opportunities Fund
received in the Reorganization will be issued at net asset value, without a
sales charge, and no CDSC will be imposed on any shares of the Fund exchanged
for shares of Scudder Pacific Opportunities Fund as a result of the
Reorganization. However, following the Reorganization, any CDSC that applies to
shares of the Fund will continue to apply to shares of Scudder Pacific
Opportunities Fund received in the Reorganization, using the original purchase
date for such shares to calculate the holding period, rather than the date such
shares are received in the Reorganization.
Services available to shareholders of Class A, Class B and Class C shares of
Scudder Pacific Opportunities Fund will be identical to those available to
shareholders of the Fund and include the purchase and redemption of shares
through an automated telephone system and over the Internet, telephone
redemptions, and exchanges by telephone to most other Scudder Kemper funds that
offer Class A, Class B and Class C shares, and reinvestment privileges. Please
see the Fund's prospectus for additional information.
Dividends and Other Distributions
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<PAGE>
The Fund intends to distribute its investment company taxable income and any
net realized capital gains in November or December and, in the case of Scudder
Pacific Opportunities Fund, in December. An additional distribution may be made
if necessary. Shareholders of each Fund can have their dividends and
distributions automatically invested in additional shares of the same class of
that Fund, or a different fund in the same family of funds, at net asset value
and credited to the shareholder's account on the payment date or, at the
shareholder's election, paid in cash. For retirement plans, reinvestment is the
only option.
If the Plan is approved by the Fund's shareholders, the Fund will pay its
shareholders a distribution of all undistributed net investment income and
undistributed realized net capital gains immediately prior to the Closing.
Other Differences Between the Funds
Charter Documents.
The Acquired Trust is established as a Massachusetts business trust pursuant
to a Declaration of Trust (the "Declaration"). The Acquiring Corporation is
organized as a Maryland corporation under Articles of Incorporation (the
"Articles"). Although the organizational documents of the Acquired Trust and of
the Acquiring Corporation are similar, some differences do exist. The more
significant differences are listed below.
. A trustee of the Acquired Trust may be removed for cause by a majority of
the trustees, while removal without cause requires a majority vote of
shareholders entitled to vote more than 50% of the votes entitled to be
cast on the matter; removal of a director of the Acquiring Corporation
requires a majority vote of a) the board of directors, b) a committee of
the board of directors appointed for such purpose, or c) the stockholders
by vote of a majority of the outstanding shares of the Acquiring
Corporation.
. A special meeting of Fund shareholders may be called by shareholders
holding at least 25% (or 10% if the purpose is to determine the removal of
a trustee) of the Fund's shares then outstanding; the Acquiring
Corporation's Articles are silent as to the procedure for calling a special
meeting of stockholders.
. The Acquired Trust's shareholders have the right to vote on the termination
or reorganization of the Acquired Trust or a series thereof; the Acquiring
Corporation's board of directors may liquidate the Acquiring Corporation or
a series of the Acquiring Corporation without a vote of stockholders.
. The Acquired Trust's Declaration may be amended by the trustees if
authorized by a majority vote of the shareholders except in certain
circumstances where a shareholder vote is not required; the Acquiring
Corporation's Articles may be amended or repealed by the Acquiring
Corporation without a vote of stockholders.
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<PAGE>
Trustees/Directors and Officers.
The Trustees of the Fund, currently and as proposed under Proposal 1, are
different from the Directors of Scudder Pacific Opportunities Fund. As described
in Scudder Pacific Opportunities Fund's prospectus that has been included in the
materials that you received with this document, the following individuals
comprise the Board of Directors of Scudder Pacific Opportunities Fund: Henry P.
Becton, Jr., Linda C. Coughlin, Dawn-Marie Driscoll, Edgar Fiedler, Keith R.
Fox, Joan E. Spero, Jean Gleason Stromberg, Jean C. Tempel and Steven Zaleznick.
In addition, the officers of the Fund and Scudder Pacific Opportunities Fund are
different. (See Proposal 1 and the Statement of Additional Information for
further information.)
Fiscal Year.
The Fund's fiscal year-end is November 30. Scudder Pacific Opportunities
Fund's fiscal year-end is October 31.
Custodian.
The Fund's custodian is The Chase Manhattan Bank. Scudder Pacific
Opportunities Fund's custodian is Brown Brothers Harriman & Company.
Auditors.
The Fund's auditors are Ernst & Young LLP. Scudder Pacific Opportunities
Fund's auditors are PricewaterhouseCoopers LLP.
Tax Consequences
As a condition to the Reorganization, each Fund will have received an opinion
of Willkie Farr & Gallagher in connection with the Reorganization, to the effect
that, based upon certain facts, assumptions and representations, the
Reorganization will constitute a tax-free reorganization within the meaning of
section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code").
If the Reorganization constitutes a tax-free reorganization, no gain or loss
will be recognized by the Fund or its shareholders as a direct result of the
Reorganization. See "The Proposed Transaction -- Federal Income Tax
Consequences."
* * *
The preceding is only a summary of certain information contained in this Proxy
Statement/Prospectus relating to the Reorganization. This summary is qualified
by reference to the more complete information contained elsewhere in this Proxy
Statement/Prospectus, the prospectuses and statements of additional information
of the Funds, and the Plan. Shareholders should read this entire Proxy
Statement/Prospectus carefully.
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<PAGE>
II. PRINCIPAL RISK FACTORS
Because of their similar investment objectives, policies and strategies,
the types of principal risks presented by Scudder Pacific Opportunities Fund are
similar to those presented by the Fund. The main risks applicable to each Fund
include, among others, market risk, management risk (i.e., securities selection
by the Investment Manager), the risks associated with foreign securities
(including currency fluctuations, lower liquidity, economic and political risks,
and differences in accounting methods), risks associated with investing in
emerging markets, and, to the extent that a Fund invests in debt securities,
risk associated with interest rates. Scudder Pacific Opportunities Fund may be
subject to interest rate risk to a greater degree than the Fund because it may
invest a greater percentage of its assets in debt securities. Investments in
high yield securities, or "junk bonds," entail relatively greater risk of loss
of income and principal than investments in higher rated securities, and may
fluctuate more in value. The Fund, and not Scudder Pacific Opportunities Fund,
may be subject to this risk because it may invest up to 15% of its total assets
in debt securities of any credit quality, including junk bonds. Scudder Pacific
Opportunities Fund cannot invest in junk bonds. Lastly, the Funds are not
insured or guaranteed by the FDIC or any other government agency. Share prices
will go up and down, so be aware that you could lose money.
For a further discussion of the investment techniques and risk factors
applicable to the Funds, see "Investment Objectives, Policies and Restrictions
of the Funds" above, and the prospectuses and statements of additional
information for the Funds.
III. THE PROPOSED TRANSACTION
Description of the Plan
As stated above, the Plan provides for the transfer of all or substantially
all of the assets of the Fund to Scudder Pacific Opportunities Fund in exchange
for that number of full and fractional Class A, Class B and Class C shares
having an aggregate net asset value equal to the aggregate net asset value of
the shares of the corresponding classes of the Fund as of the close of business
on the Valuation Date. Scudder Pacific Opportunities Fund will assume all of the
liabilities of the Fund. The Fund will distribute the Class A, Class B and Class
C shares received in the exchange to the shareholders of the Fund in complete
liquidation of the Fund. The Fund will then be terminated.
Upon completion of the Reorganization, each shareholder of the Fund will
own that number of full and fractional Class A, Class B and Class C Shares
having an aggregate net asset value equal to the aggregate net asset value of
such shareholder's shares of the corresponding class held in the Fund as of the
close of business on the Valuation Date. Such shares will be held in an account
with Scudder Pacific Opportunities Fund identical in all material respects to
the account currently maintained by the Fund for such shareholder. In the
interest of economy and convenience, Class A, Class B and Class C shares issued
to the Fund's shareholders in the Reorganization will be in uncertificated form.
If Class A, Class B or Class C shares of the Fund are represented by
certificates prior to the Closing, such certificates should be returned to the
Fund's shareholder servicing agent. Any Class A, Class B or Class C shares of
Scudder Pacific Opportunities Fund distributed in the Reorganization to
shareholders in exchange for certificated shares of the Fund may not be
transferred, exchanged or redeemed without delivery of such certificates.
Until the Closing, shareholders of the Fund will continue to be able to
redeem their shares at the net asset value next determined after receipt by the
Fund's transfer agent of a redemption request in proper form. Redemption and
purchase requests received on or after the Valuation Date by the transfer agent
will be treated as requests received for the redemption or purchase of Class A,
Class B
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<PAGE>
or Class C shares of Scudder Pacific Opportunities Fund received by the
shareholder in connection with the Reorganization.
The obligations of the Fund and the Acquiring Corporation, on behalf of
Scudder Pacific Opportunities Fund, under the Plan are subject to various
conditions, as stated therein, which includes Scudder Pacific Opportunities
Fund's adoption of a new investment management agreement. The Plan also requires
that all filings be made with, and all authority be received from, the SEC and
state securities commissions as may be necessary in the opinion of counsel to
permit the parties to carry out the transactions contemplated by the Plan. Each
Fund is in the process of making the necessary filings. To provide for
unforeseen events, the Plan may be terminated: (i) by the mutual agreement of
the parties; (ii) by either party if the Closing has not occurred by [ ], 2001,
unless such date is extended by mutual agreement of the parties; or (iii) by
either party if the other party has materially breached its obligations under
the Plan or made a material misrepresentation in the Plan or in connection with
the Reorganization. The Plan may also be amended by mutual agreement in writing.
However, no amendment may be made following the shareholder meeting if such
amendment would have the effect of changing the provisions for determining the
number of shares of Scudder Pacific Opportunities Fund to be issued to the Fund
in the Plan to the detriment of the Fund's shareholders without their approval.
For a complete description of the terms and conditions of the Reorganization,
please refer to the Plan at Exhibit A.
Board Approval of the Proposed Transaction
As discussed above, the Reorganization is part of a Scudder Kemper
initiative that is intended to restructure and streamline the management and
operations of the funds Scudder Kemper advises. Scudder Kemper first proposed
the Reorganization to the Trustees of the Fund at a meeting held on May 24,
2000, see "Synopsis--Background of the Reorganization" above. This initiative
includes five major components:
(i) A change in branding to offer virtually all funds advised by Scudder
Kemper under the Scudder Investments name, with a concentration on
intermediary distribution;
(ii) The combination of funds with similar investment objectives and
policies, including in particular the combination of the Kemper Funds
with similar Scudder Funds currently offered to the general public;
(iii) The liquidation of certain small funds which have not achieved market
acceptance and which are unlikely to reach an efficient operating
size;
(iv) The implementation of an administration agreement for the Kemper
Funds similar to that recently adopted by the Scudder Funds covering,
for a single fee rate, substantially all services required for the
operation of the fund (other than those provided under the fund's
investment management agreement) and most expenses; and
(v) The consolidation of certain boards overseeing funds advised by
Scudder Kemper.
The Independent Trustees of the Fund reviewed the potential implications of
these proposals for the Fund as well as the various other funds for which they
serve as board members. They were assisted in this review by their independent
legal counsel and by independent consultants with special expertise in financial
and mutual fund industry matters. Following the May 24 meeting, the Independent
Trustees met in person or by telephone on numerous occasions (including
committee
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<PAGE>
meetings) to review and discuss these proposals, both among themselves and with
representatives of Scudder Kemper, including the "interested" Trustees. In the
course of their review, the Independent Trustees requested and received
substantial additional information and suggested numerous changes to Scudder
Kemper's proposals.
Following the conclusion of this process, the Trustees of the Fund, the
board members of other funds involved and Scudder Kemper reached general
agreement on the elements of a restructuring plan that they believed were in the
best interests of shareholders and, where required, agreed to submit elements of
the plan for approval to shareholders of those funds.
On November 29, 2000, the Board of Trustees, including the Independent
Trustees, unanimously approved the terms of the Reorganization and certain
related proposals. The Trustees have also unanimously agreed to recommend that
the Reorganization be approved by the Fund's shareholders.
In determining whether to recommend that the shareholders of the Fund
approve the Reorganization, the Board of Trustees considered that:
. As part of Scudder Kemper's overall restructuring, the Fund would be
duplicative of another similar fund advised by Scudder Kemper in the
same distribution channel.
. The combined fund would adopt the lower fee schedule of the two Funds'
investment management agreements.
. The fixed fee rate under the Administration Agreement is expected to
be less than the estimated current applicable operating expenses the
Fund would otherwise pay.
. It is a condition of the Reorganization that each Fund receive an
opinion of tax counsel that the transaction would be a tax-free
transaction.
. Although the Fund agreed to pay the estimated costs of the
Reorganization allocated to Class A shares and a portion of the
estimated costs of the Reorganization allocated to Class B and Class C
shares, management has estimated that such allocated costs will be
recoverable from lower overall expense rates within six months of
completion of the Reorganization. Scudder Kemper agreed to pay a
portion of the estimated costs of the Reorganization allocated to
Class B and Class C shares and all of the costs of the Reorganization
that exceed estimated costs.
As part of their deliberations, the Trustees considered, among other
things: (a) the fees and expense ratios of the Funds, including comparisons
between the expenses of the Fund and the estimated operating expenses of Scudder
Pacific Opportunities Fund after the Reorganization, and between the estimated
operating expenses of Scudder Pacific Opportunities Fund and other mutual funds
with similar investment objectives; (b) the terms and conditions of the
Reorganization and whether the Reorganization would result in the dilution of
shareholder interests; (c) the compatibility of the Funds' investment
objectives, policies, restrictions and portfolios; (d) the service features
available to shareholders of each Fund; (e) prospects for Scudder Pacific
Opportunities Fund to attract additional assets; and (f) the investment
performance of each Fund.
As part of their analysis, the Trustees considered direct and indirect
costs to shareholders including: (a) the direct costs of the Reorganization to
be borne by existing shareholders; (b) the potential costs of any necessary
rebalancing of the Fund's portfolio; and (c) the potential tax
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<PAGE>
consequences to shareholders as a result of differences in the Funds' realized
or unrealized capital gains or losses and capital loss carry-forwards.
Costs. The anticipated costs of the Reorganization allocable to the Fund
are $39,129, which includes board meeting fees, legal, accounting and other
consultant fees, and proxy solicitation costs. Class A shares of the Fund will
pay $17,962, which represents 100% of the estimated costs allocable to such
class. Class B and Class C shares will pay a portion of their allocable costs of
the Reorganization ($10,176 out of $17,276 (58.9%) for Class B shares and
$2,429 out of $3,891 (62.4%) for Class C shares). Scudder Kemper is bearing the
remaining costs, including any cost overruns (except that Scudder Pacific
Opportunities Fund is bearing the SEC and state registration and notice fees
which are estimated to be $_________).
The costs of the Reorganization borne by the Fund have been (or will soon
be) expensed, resulting in a reduction of net asset value per share of $0.0080,
$0.0074 and $0.0089 for Class A, Class B and Class C shares, respectively, based
on [ ], 2000 net assets of the Fund. Management of the Fund expects that
reduced operating expenses resulting from the Reorganization should allow for
recovery of the allocated costs of the Reorganization within six months after
the Closing.
Portfolio Transaction Costs. To consider the potential costs of any
necessary rebalancing of the Fund's portfolio as a result of the Reorganization,
the Independent Trustees asked for, and Scudder Kemper provided, an estimate of
the expected turnover of the securities of the Fund, as a percentage of the
assets of the combined fund, as a result of the Reorganization. Scudder Kemper
estimated such turnover to be less than 1% which would result in estimated
brokerage expenses and/or transaction costs of $0, which the Trustees considered
immaterial. These estimates were based upon current market conditions at the
time and any actual costs will be dependent upon liquidity and market conditions
at the Closing. In a "bear" market, for example, such costs could be
substantially higher and could result in capital losses.
Potential Tax Consequences. Although the Reorganizations will be achieved
on a federally tax-free basis (see "Federal Income Tax Consequences" below),
there are differences in the Funds' realized or unrealized capital gains or
losses and capital loss carry forwards, which at [ ], 2000 were as follows
(although they may differ at the time of the Closing):
[Charts to be inserted]
As noted above, under the terms of the Plan, shareholders of the Fund will
receive shares of Scudder Pacific Opportunities Fund in an amount equal to the
relative net asset value of their Fund shares. The Trustees considered whether
an adjustment in this formula should be made for the above tax differentials.
The Trustees determined that no adjustment should be made because the potential
tax consequences were not material, quantifiable or predictable because of (1)
uncertainties as to the amounts of any actual future realization of capital
gains or losses in view of future changes in portfolio values, (2) the exemption
of some shareholders from federal income taxation, and (3) the differing
consequences of federal and various other income taxation upon a distribution
received by each shareholder whose tax liability (if any) is determined by the
net effect of a multitude of considerations that are individual to the
shareholder. Shareholders should, however, review their own tax situation to
determine what effect, if any, these potential tax differences may have on them.
The Trustees also gave extensive consideration to possible economies of
scale that might be realized by Scudder Kemper in connection with the
Reorganization, as well as the other fund combinations included in Scudder
Kemper's restructuring proposal.
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<PAGE>
Based on all the foregoing, the Board concluded that the Fund's
participation in the Reorganization would be in the best interests of the Fund
and would not dilute the interests of the Fund's shareholders. The Board of
Trustees, including the Independent Trustees, unanimously recommends that
shareholders of the Fund approve the Reorganization.
Description of the Securities to Be Issued
Scudder Pacific Opportunities Fund is a series of the Acquiring
Corporation, a corporation organized under the laws of the state of Maryland on
June 23, 1975. The Acquiring Corporation's authorized capital consists of
approximately 2.25 billion shares of capital stock, par value $0.01 per share,
320 million shares of which are allocated to Scudder Pacific Opportunities Fund.
The Directors of the Acquiring Corporation are authorized to divide the
Acquiring Corporation's shares into separate series. Scudder Pacific
Opportunities Fund is one of five series of the Acquiring Corporation. The
Directors of the Acquiring Corporation are also authorized to further divide the
shares of the series of the Acquiring Corporation into classes. The shares of
Scudder Pacific Opportunities Fund are currently divided into five classes,
Class AARP, Class S, Class A, Class B and Class C. Although shareholders of
different classes of a series have an interest in the same portfolio of assets,
shareholders of different classes bear different expense levels because
distribution costs and certain other expenses approved by the Directors of the
Acquiring Corporation Fund are borne directly by the class incurring such
expenses.
Each share of each class of Scudder Pacific Opportunities Fund represents
an interest in Scudder Pacific Opportunities Fund that is equal to and
proportionate with each other share of that class of Scudder Pacific
Opportunities Fund. Scudder Pacific Opportunities Fund shareholders are entitled
to one vote per share held on matters on which they are entitled to vote. In
the areas of shareholder voting and the powers and conduct of the Trustees,
there are no material differences between the rights of shareholders of the Fund
and the rights of shareholders of Scudder Pacific Opportunities Fund, other than
as described above in "Other Differences Between the Funds - Charter Documents"
The Acquiring Corporation is organized in Maryland, while the Fund is
established in Massachusetts. Under Massachusetts law, shareholders of a trust
such as the Fund may, under certain circumstances, be held personally liable as
partners for the obligations of the trust. The Fund's Declaration of Trust
contains a disclaimer of liability and provides for indemnification out of the
Fund property of any shareholder held personally liable for the claims and
liabilities to which a shareholder may become subject by reason of being or
having been a shareholder. Thus, the risk of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its obligations.
The Acquiring Corporation does not provide such a disclaimer of liability or
indemnification to its shareholders, because Maryland law generally does not
impose such liability on shareholders.
Federal Income Tax Consequences
The Reorganization is conditioned upon the receipt by each Fund of an
opinion from Willkie Farr & Gallagher substantially to the effect that, based
upon certain facts, assumptions and representations of the parties, for federal
income tax purposes: (i) the transfer to Scudder Pacific Opportunities Fund of
all or substantially all of the assets of the Fund in exchange solely for Class
A, Class B and Class C shares and the assumption by Scudder Pacific
Opportunities Fund of all of the liabilities of the Fund, followed by the
distribution of such shares to the Fund's shareholders in exchange for their
shares of the Fund in complete liquidation of the Fund, will constitute a
"reorganization" within the meaning of Section 368(a)(1) of the Code, and
Scudder Pacific Opportunities Fund and the Fund will each be "a party to a
reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain
or loss will be recognized by the Fund upon the transfer of all
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or substantially all of its assets to Scudder Pacific Opportunities Fund in
exchange solely for Class A, Class B and Class C shares and the assumption by
Scudder Pacific Opportunities Fund of all of the liabilities of the Fund or upon
the distribution of the Class A, Class B and Class C shares to shareholders of
the Fund in exchange for their shares of the Fund; (iii) the basis of the assets
of the Fund in the hands of Scudder Pacific Opportunities Fund will be the same
as the basis of such assets of the Fund immediately prior to the transfer; (iv)
the holding period of the assets of the Fund in the hands of Scudder Pacific
Opportunities Fund will include the period during which such assets were held by
the Fund; (v) no gain or loss will be recognized by Scudder Pacific
Opportunities Fund upon the receipt of the assets of the Fund in exchange for
Class A, Class B and Class C shares and the assumption by Scudder Pacific
Opportunities Fund of all of the liabilities of the Fund; (vi) no gain or loss
will be recognized by the shareholders of the Fund upon the receipt of the Class
A, Class B and Class C shares solely in exchange for their shares of the Fund as
part of the transaction; (vii) the basis of the Class A, Class B and Class C
shares received by each shareholder of the Fund will be the same as the basis of
the shares of the Fund exchanged therefor; and (viii) the holding period of
Class A, Class B and Class C shares received by each shareholder of the Fund
will include the holding period during which the shares of the Fund exchanged
therefor were held, provided that at the time of the exchange the shares of the
Fund were held as capital assets in the hands of such shareholder of the Fund.
After the Closing, Scudder Pacific Opportunities Fund may dispose of
certain securities received by it from the Fund in connection with the
Reorganization, which may result in transaction costs and capital gains.
While the Fund is not aware of any adverse state or local tax consequences
of the proposed Reorganization, it has not requested any ruling or opinion with
respect to such consequences and shareholders may wish to consult their own tax
adviser with respect to such matters.
Legal Matters
Certain legal matters concerning the federal income tax consequences of the
Reorganization will be passed on by Willkie Farr & Gallagher, 787 Seventh
Avenue, New York, New York 10019. Certain legal matters concerning the issuance
of shares of Scudder Pacific Opportunities Fund will be passed on by Dechert,
Ten Post Office Square - South, Boston, Massachusetts 02109.
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<PAGE>
Capitalization
The following table shows on an unaudited basis the capitalization of
the Fund and Scudder Pacific Opportunities Fund as of September 30, 2000 and on
a pro forma basis as of that date, giving effect to the Reorganization(1):
<TABLE>
<CAPTION>
Scudder Pacific Pro Forma Pro Forma
Fund Opportunities Fund Adjustments (Combined)
---- ------------------ ----------- --------
<S> <C> <C> <C> <C>
Net Assets
Class S Shares $118,062,447 /(3)/ $ 118,062,447
Class A Shares $12,067,031 /(4)/ $ 12,067,031
Class B Shares $ 7,738,552 /(4)/ $ 7,738,552
Class C Shares $ 1,302,215 /(4)/ $ 1,302,215
--------------
Total Net Assets 139,170,245 /(2)/
==============
Shares Outstanding
Class S Shares 10,510,196 10,510,196
Class A Shares 2,000,180 (925,645) 1,074,535
Class B Shares 1,312,041 (622,945) 689,096
Class C Shares 223,360 (107,401) 115,959
Net Asset Value per Share
Class S Shares $ 11.23 $ 11.23
Class A Shares $ 6.03 $ 11.23
Class B Shares $ 5.90 $ 11.23
Class C Shares $ 5.83 $ 11.23
</TABLE>
(1) Assumes the Reorganization had been consummated on September 30, 2000, and
is for information purposes only. No assurance can be given as to how many
shares of Scudder Pacific Opportunities Fund will be received by the
shareholders of the Fund on the date the Reorganization takes place, and
the foregoing should not be relied upon to reflect the number of shares of
Scudder Pacific Opportunities Fund that actually will be received on or
after such date.
(2) Pro Forma combined net assets do not reflect expense reductions that would
result from the implementation of Scudder Pacific Opportunities Fund's
administration fee and the Fund's lower investment management agreement.
(3) Represents one-time proxy, legal, accounting and other costs of the
Reorganization to be borne by Scudder Pacific Opportunities Fund.
(4) Represents one-time proxy, legal, accounting and other costs of the
Reorganization to be borne by the Fund.
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<PAGE>
The Board of Trustees unanimously recommends that the shareholders of the
Fund vote in favor of this Proposal 2.
PROPOSAL 3: RATIFICATION OR REJECTION OF THE SELECTION OF
INDEPENDENT AUDITORS
The Board of Trustees, including all of the Independent Trustees, has
selected Ernst & Young LLP to act as independent auditors of the Fund for the
Fund's current fiscal year and recommends that shareholders ratify such
selection. However, if the Plan is approved, as described under Proposal 2,
PricewaterhouseCoopers LLP will serve as the independent auditors for the
combined fund. One or more representatives of Ernst & Young LLP are expected to
be present at the Meeting and will have an opportunity to make a statement if
they so desire. Such representatives are expected to be available to respond to
appropriate questions posed by shareholders or management.
The Board of Trustees unanimously recommends that shareholders of the
Fund vote in favor of this Proposal 3.
ADDITIONAL INFORMATION
Information about the Funds
Additional information about the Acquiring Corporation and the
Acquired Trust, the Funds and the Reorganization has been filed with the SEC and
may be obtained without charge by writing to Scudder Investor Services, Inc.,
Two International Place, Boston, MA 02110-4103, or by calling 1-800-[ ].
The Acquiring Corporation and the Acquired Trust are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended,
and the 1940 Act, and in accordance therewith, file reports, proxy material and
other information about each of the Funds with the SEC. Such reports, proxy
material and other information filed by the Acquiring Corporation, and those
filed by the Acquired Trust, can be inspected and copied at the Public Reference
Room maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 and
at the following SEC Regional Offices: Northeast Regional Office, 7 World Trade
Center, Suite 1300, New York, NY 10048; Southeast Regional Office, 1401 Brickell
Avenue, Suite 200, Miami, FL 33131; Midwest Regional Office, Citicorp Center,
500 W. Madison Street, Chicago, IL 60661-2511; Central Regional Office, 1801
California Street, Suite 4800, Denver, CO 80202-2648; and Pacific Regional
Office, 5670 Wilshire Boulevard, 11th Floor, Los Angeles, CA 90036-3648. Copies
of such material can also be obtained from the Public Reference Branch, Office
of Consumer Affairs and Information Services, Securities and Exchange
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The SEC maintains an Internet World Wide Web site (at http://www.sec.gov) which
contains the prospectuses and statements of additional information for the
Funds, materials that are incorporated by reference into the prospectuses and
statements of additional information, and other information about the Acquiring
Corporation, the Acquired Trust and the Funds.
General
Proxy Solicitation. Proxy solicitation costs will be considered
Reorganization expenses and will be allocated accordingly. See "The Proposed
Transaction - Board Approval of the Proposed Transaction." In addition to
solicitation by mail, certain officers and representatives of the Acquired
Trust, officers and employees of Scudder Kemper and certain financial services
firms and their
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<PAGE>
representatives, who will receive no extra compensation for their services, may
solicit proxies by telephone, telegram or personally.
Any shareholder of the Fund giving a proxy has the power to revoke it
by mail (addressed to the Secretary at the principal executive office of the
Fund, c/o Scudder Kemper Investments, Inc., at the address for the Fund shown at
the beginning of this Proxy Statement/Prospectus) or in person at the Meeting,
by executing a superseding proxy or by submitting a notice of revocation to the
Fund. All properly executed proxies received in time for the Meeting will be
voted as specified in the proxy or, if no specification is made, in favor of
each Proposal.
The presence at any shareholders' meeting, in person or by proxy, of
the holders of at least 30% of the shares of the Fund entitled to be cast shall
be necessary and sufficient to constitute a quorum for the transaction of
business. In the event that the necessary quorum to transact business or the
vote required to approve any Proposal is not obtained at the Meeting, the
persons named as proxies may propose one or more adjournments of the Meeting in
accordance with applicable law to permit further solicitation of proxies with
respect to that Proposal. Any such adjournment as to a matter will require the
affirmative vote of the holders of a majority of the Fund's shares present in
person or by proxy at the Meeting. The persons named as proxies will vote in
favor of any such adjournment those proxies which they are entitled to vote in
favor of that Proposal and will vote against any such adjournment those proxies
to be voted against that Proposal. For purposes of determining the presence of
a quorum for transacting business at the Meeting, abstentions and broker "non-
votes" will be treated as shares that are present but which have not been voted.
Broker non-votes are proxies received by the Fund from brokers or nominees when
the broker or nominee has neither received instructions from the beneficial
owner or other persons entitled to vote nor has discretionary power to vote on a
particular matter. Accordingly, shareholders are urged to forward their voting
instructions promptly.
The election of the Trustees under Proposal 1 requires the affirmative
vote of a plurality of the shares of the Acquired Trust voting on such election.
Approval of Proposal 2 requires the affirmative vote of the holders of a
majority of the Fund's shares outstanding and entitled to vote thereon.
Approval of Proposal 3 requires the affirmative vote of a majority of the shares
of the Fund voting at the Meeting. Abstentions and broker non-votes will not be
counted in favor of, but will have no other effect on, Proposals 1 and 3, and
will have the effect of a "no" vote on Proposal 2.
Holders of record of the shares of the Fund at the close of business
on March 5, 2001 will be entitled to one vote per share on all business of the
Meeting. As of February 5, 2001, there were [ ] Class A shares, [
] Class B shares and [ ] Class C shares of the Fund outstanding.
[As of December 31, 2000, the officers and Directors of the Acquiring
Corporation as a group owned beneficially less than 1% of the outstanding shares
of each class of Scudder Pacific Opportunities Fund.] Appendix 2 hereto sets
forth the beneficial owners of more than 5% of each class of each Fund's shares.
To the best of each Fund's knowledge, as of December 31, 2000, no person owned
beneficially more than 5% of any class of either Fund's outstanding shares,
except as stated on Appendix 2.
Shareholder Communications Corporation ("SCC") has been engaged to
assist in the solicitation of proxies, at an estimated cost of $[ ]. As
the Meeting date approaches, certain shareholders of the Fund may receive a
telephone call from a representative of SCC if their votes have not yet been
received. Authorization to permit SCC to execute proxies may be obtained by
telephonic or electronically transmitted instructions from shareholders of the
Fund. Proxies that are obtained telephonically will be recorded in accordance
with the procedures described below. The Trustees
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<PAGE>
believe that these procedures are reasonably designed to ensure that both the
identity of the shareholder casting the vote and the voting instructions of the
shareholder are accurately determined.
In all cases where a telephonic proxy is solicited, the SCC
representative is required to ask for each shareholder's full name and address,
or the last four digits of the shareholder's social security or employer
identification number, or both, and to confirm that the shareholder has received
the proxy materials in the mail. If the shareholder is a corporation or other
entity, the SCC representative is required to ask for the person's title and
confirmation that the person is authorized to direct the voting of the shares.
If the information solicited agrees with the information provided to SCC, then
the SCC representative has the responsibility to explain the process, read the
Proposals on the proxy card(s), and ask for the shareholder's instructions on
the Proposals. Although the SCC representative is permitted to answer questions
about the process, he or she is not permitted to recommend to the shareholder
how to vote, other than to read any recommendation set forth in the Proxy
Statement/Prospectus. SCC will record the shareholder's instructions on the
card. Within 72 hours, the shareholder will be sent a letter or mailgram to
confirm his or her vote and asking the shareholder to call SCC immediately if
his or her instructions are not correctly reflected in the confirmation.
Shareholders may also provide their voting instructions through
telephone touch-tone voting or Internet voting. These options require
shareholders to input a control number which is located on each voting
instruction card. After inputting this number, shareholders will be prompted to
provide their voting instructions on the Proposals. Shareholders will have an
opportunity to review their voting instructions and make any necessary changes
before submitting their voting instructions and terminating their telephone call
or Internet link. Shareholders who vote on the Internet, in addition to
confirming their voting instructions prior to submission, will also receive an
e-mail confirming their instructions.
If a shareholder wishes to participate in the Meeting, but does not
wish to give a proxy by telephone or electronically, the shareholder may still
submit the proxy card(s) originally sent with the Proxy Statement/Prospectus or
attend in person. Should shareholders require additional information regarding
the proxy or replacement proxy card(s), they may contact SCC toll-free at 1-800-
[ ]. Any proxy given by a shareholder is revocable until voted at the
Meeting.
Shareholder Proposals for Subsequent Meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a shareholder meeting
subsequent to the Meeting, if any, should send their written proposals to the
Secretary of the Acquired Trust, c/o Scudder Kemper Investments, Inc., 222 South
Riverside Plaza, Chicago, Illinois 60606, within a reasonable time before the
solicitation of proxies for such meeting. The timely submission of a proposal
does not guarantee its inclusion.
Other Matters to Come Before the Meeting. The Board is not aware of
any matters that will be presented for action at the Meeting other than the
matters described in this material. Should any other matters requiring a vote
of shareholders arise, the proxy in the accompanying form will confer upon the
person or persons entitled to vote the shares represented by such proxy the
discretionary authority to vote the shares as to any such other matters in
accordance with their best judgment in the interest of the Acquired Trust and/or
the Fund.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) (OR TAKE ADVANTAGE
OF AVAILABLE ELECTRONIC OR TELEPHONIC VOTING PROCEDURES) PROMPTLY. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES.
By Order of the Board,
/s/ Philip J. Collora
Philip J. Collora
Secretary
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<PAGE>
INDEX OF EXHIBITS AND APPENDICES
EXHIBIT A: FORM OF AGREEMENT AND PLAN OF REORGANIZATION.......................
EXHIBIT B: MANAGEMENT'S DISCUSSION OF SCUDDER PACIFIC OPPORTUNITIES FUND'S
PERFORMANCE....................................................................
APPENDIX 1: TRUSTEE AND NOMINEE
SHAREHOLDINGS.............................................................
APPENDIX 2: BENEFICIAL OWNERS OF FUND
SHARES....................................................................
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<PAGE>
EXHIBIT A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this [ ] day of [ ], 2001, by and among Scudder International Fund,
Inc. (the "Acquiring Corporation"), a Maryland corporation, on behalf of Scudder
Pacific Opportunities Fund (the "Acquiring Fund"), a separate series of the
Acquiring Corporation, Kemper Asian Growth Fund (the "Acquired Trust"), a
Massachusetts business trust, on behalf of Kemper Asian Growth Fund (the
"Acquired Fund" and, together with the Acquiring Fund, each a "Fund" and
collectively the "Funds"), the only active series of the Acquired Trust, and
Scudder Kemper Investments, Inc. ("Scudder Kemper"), investment adviser to the
Funds (for purposes of Paragraph 10.2 of the Agreement only). The principal
place of business of the Acquiring Corporation is 345 Park Avenue, New York, New
York 10154. The principal place of business of the Acquired Trust is 222 South
Riverside Plaza, Chicago, Illinois 60606.
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"). The reorganization (the "Reorganization")
will consist of the transfer of all or substantially all of the assets of the
Acquired Fund to the Acquiring Fund in exchange solely for Class A, Class B and
Class C voting shares of capital stock ($.01 par value per share) of the
Acquiring Fund (the "Acquiring Fund Shares"), the assumption by the Acquiring
Fund of all of the liabilities of the Acquired Fund and the distribution of the
Acquiring Fund Shares to the Class A, Class B and Class C shareholders of the
Acquired Fund in complete liquidation of the Acquired Fund as provided herein,
all upon the terms and conditions hereinafter set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND IN EXCHANGE
FOR ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND LIABILITIES
AND THE LIQUIDATION OF THE ACQUIRED FUND
1.1. Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer to the Acquiring Fund all or substantially all of the
Acquired Fund's assets as set forth in section 1.2, and the Acquiring Fund
agrees in exchange therefor (i) to deliver to the Acquired Fund that number of
full and fractional Class A, Class B and Class C Acquiring Fund Shares
determined by dividing the value of the Acquired Fund's assets net of any
liabilities of the Acquired Fund with respect to the Class A, Class B and Class
C shares of the Acquired Fund, computed in the manner and as of the time and
date set forth in section 2.1, by the net asset value of one Acquiring Fund
Share of the corresponding class, computed in the manner and as of the time and
date set forth in section 2.2; and (ii) to assume all of the liabilities of the
Acquired Fund, including, but not limited to, any deferred compensation to the
Acquired Fund board members. All Acquiring Fund Shares delivered to the Acquired
Fund shall be delivered at net asset value without sales load, commission or
other similar fee being imposed. Such transactions shall take place at the
closing provided for in section 3.1 (the "Closing").
<PAGE>
1.2. The assets of the Acquired Fund to be acquired by the Acquiring
Fund (the "Assets") shall consist of all assets, including, without limitation,
all cash, cash equivalents, securities, commodities and futures interests and
dividends or interest or other receivables that are owned by the Acquired Fund
and any deferred or prepaid expenses shown on the unaudited statement of assets
and liabilities of the Acquired Fund prepared as of the effective time of the
Closing in accordance with generally accepted accounting principles ("GAAP")
applied consistently with those of the Acquired Fund's most recent audited
balance sheet. The Assets shall constitute at least 90% of the fair market value
of the net assets, and at least 70% of the fair market value of the gross
assets, held by the Acquired Fund immediately before the Closing (excluding for
these purposes assets used to pay the dividends and other distributions paid
pursuant to section 1.4).
1.3. The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date as defined in section 3.6.
1.4. On or as soon as practicable prior to the Closing Date as defined
in section 3.1, the Acquired Fund will declare and pay to its shareholders of
record one or more dividends and/or other distributions so that it will have
distributed substantially all of its investment company taxable income (computed
without regard to any deduction for dividends paid) and realized net capital
gain, if any, for the current taxable year through the Closing Date.
1.5. Immediately after the transfer of Assets provided for in section
1.1, the Acquired Fund will distribute to the Acquired Fund's shareholders of
record with respect to each class of its shares (the "Acquired Fund
Shareholders"), determined as of the Valuation Time (as defined in section 2.1),
on a pro rata basis within that class, the Acquiring Fund Shares of the same
class received by the Acquired Fund pursuant to section 1.1 and will completely
liquidate. Such distribution and liquidation will be accomplished with respect
to each class of the Acquired Fund by the transfer of the Acquiring Fund Shares
then credited to the account of the Acquired Fund on the books of the Acquiring
Fund to open accounts on the share records of the Acquiring Fund in the names of
the Acquired Fund Shareholders. The Acquiring Fund shall have no obligation to
inquire as to the validity, propriety or correctness of such records, but shall
assume that such transaction is valid, proper and correct. The aggregate net
asset value of Class A, Class B and Class C Acquiring Fund Shares to be so
credited to the Class A, Class B and Class C Acquired Fund Shareholders shall,
with respect to each class, be equal to the aggregate net asset value of the
Acquired Fund shares of the same class owned by such shareholders as of the
Valuation Time. All issued and outstanding shares of the Acquired Fund will
simultaneously be cancelled on the books of the Acquired Fund, although share
certificates representing interests in Class A, Class B and Class C shares of
the Acquired Fund will represent a number of Acquiring Fund Shares after the
Closing Date as determined in accordance with section 2.3. The Acquiring Fund
will not issue certificates representing Acquiring Fund Shares in connection
with such exchange.
1.6. Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund. Shares of the Acquiring Fund will be issued in the manner
described in the Acquiring Fund's then-current prospectus and statement of
additional information.
1.7. Any reporting responsibility of the Acquired Fund including,
without limitation, the responsibility for filing of regulatory reports, tax
returns, or other documents with the Securities and Exchange Commission (the
"Commission"), any state securities commission, and any federal, state or local
tax authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the Acquired Fund.
<PAGE>
1.8. All books and records of the Acquired Fund, including all books and
records required to be maintained under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations thereunder, shall be
available to the Acquiring Fund from and after the Closing Date and shall be
turned over to the Acquiring Fund as soon as practicable following the Closing
Date.
2. VALUATION
2.1. The value of the Assets shall be computed as of the close of
regular trading on The New York Stock Exchange, Inc. (the "NYSE") on the
business day immediately preceding the Closing Date, as defined in section 3.1
(the "Valuation Time") after the declaration and payment of any dividends and/or
other distributions on that date, using the valuation procedures set forth in
the Acquiring Corporation's Charter, as amended, and then-current prospectus or
statement of additional information, copies of which have been delivered to the
Acquired Fund.
2.2. The net asset value of a Class A, Class B or Class C Acquiring Fund
Share shall be the net asset value per share computed with respect to that class
as of the Valuation Time using the valuation procedures referred to in section
2.1. Notwithstanding anything to the contrary contained in this Agreement, in
the event that, as of the Valuation Time, there are no Class A, Class B and/or
Class C Acquiring Fund Shares issued and outstanding, then, for purposes of this
Agreement, the per share net asset value of a Class A, Class B and/or Class C
share, as applicable, shall be equal to the net asset value of one Class S
Acquiring Fund Share.
2.3. The number of the Class A, Class B and Class C Acquiring Fund
Shares to be issued (including fractional shares, if any) in exchange for the
Assets shall be determined with respect to each such class by dividing the value
of the Assets with respect to Class A, Class B and Class C shares of the
Acquired Fund, as the case may be, determined in accordance with section 2.1 by
the net asset value of an Acquiring Fund Share of the same class determined in
accordance with section 2.2.
2.4. All computations of value hereunder shall be made by or under the
direction of each Fund's respective accounting agent, if applicable, in
accordance with its regular practice and the requirements of the 1940 Act and
shall be subject to confirmation by each Fund's respective independent
accountants upon the reasonable request of the other Fund.
3. CLOSING AND CLOSING DATE
3.1. The Closing of the transactions contemplated by this Agreement
shall be May 28, 2001, or such later date as the parties may agree in writing
(the "Closing Date"). All acts taking place at the Closing shall be deemed to
take place simultaneously as of 9:00 a.m., Eastern time, on the Closing Date,
unless otherwise agreed to by the parties. The Closing shall be held at the
offices of Dechert, Ten Post Office Square - South, Boston, MA 02109, or at such
other place and time as the parties may agree.
3.2. The Acquired Fund shall deliver to Acquiring Fund on the Closing
Date a schedule of Assets.
3.3. The Chase Manhattan Bank, custodian for the Acquired Fund, shall
deliver at the Closing a certificate of an authorized officer stating that (a)
the Assets shall have been delivered in proper form to Brown Brothers Harriman &
Company, custodian for the Acquiring Fund, prior to or on the Closing Date and
(b) all necessary taxes in connection with the delivery of the Assets, including
all applicable federal
<PAGE>
and state stock transfer stamps, if any, have been paid or provision for payment
has been made. The Acquired Fund's portfolio securities represented by a
certificate or other written instrument shall be presented by the custodian for
the Acquired Fund to the custodian for the Acquiring Fund for examination no
later than five business days preceding the Closing Date and transferred and
delivered by the Acquired Fund as of the Closing Date by the Acquired Fund for
the account of Acquiring Fund duly endorsed in proper form for transfer in such
condition as to constitute good delivery thereof. The Acquired Fund's portfolio
securities and instruments deposited with a securities depository, as defined in
Rule 17f-4 under the 1940 Act, shall be delivered as of the Closing Date by book
entry in accordance with the customary practices of such depositories and the
custodian for the Acquiring Fund. The cash to be transferred by the Acquired
Fund shall be delivered by wire transfer of federal funds on the Closing Date.
3.4. State Street Bank and Trust Company ("State Street"), as transfer
agent for the Acquired Fund, on behalf of the Acquired Fund, shall deliver at
the Closing a certificate of an authorized officer stating that its records
contain the names and addresses of the Acquired Fund Shareholders and the number
and percentage ownership (to three decimal places) of outstanding Class A, Class
B and Class C Acquired Fund shares owned by each such shareholder immediately
prior to the Closing. The Acquiring Fund shall issue and deliver a confirmation
evidencing the Acquiring Fund Shares to be credited on the Closing Date to the
Acquired Fund or provide evidence satisfactory to the Acquired Fund that such
Acquiring Fund Shares have been credited to the Acquired Fund's account on the
books of the Acquiring Fund. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request to effect the transactions contemplated by this Agreement.
3.5. In the event that immediately prior to the Valuation Time (a) the
NYSE or another primary trading market for portfolio securities of the Acquiring
Fund or the Acquired Fund shall be closed to trading or trading thereupon shall
be restricted, or (b) trading or the reporting of trading on such Exchange or
elsewhere shall be disrupted so that, in the judgment of the Board members of
either party to this Agreement, accurate appraisal of the value of the net
assets with respect to the Class A, Class B and Class C shares of the Acquiring
Fund or the Acquired Fund is impracticable, the Closing Date shall be postponed
until the first business day after the day when trading shall have been fully
resumed and reporting shall have been restored.
3.6. The liabilities of the Acquired Fund shall include all of the
Acquired Fund's liabilities, debts, obligations, and duties of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether or not
arising in the ordinary course of business, whether or not determinable at the
Closing Date, and whether or not specifically referred to in this Agreement
including but not limited to any deferred compensation to the Acquired Fund's
board members.
4. REPRESENTATIONS AND WARRANTIES
4.1. The Acquired Trust, on behalf of the Acquired Fund, represents and
warrants to the Acquiring Fund as follows:
(a) The Acquired Trust is a voluntary association with
transferable shares commonly referred to as a Massachusetts business trust duly
organized and validly existing under the laws of The Commonwealth of
Massachusetts with power under the Acquired Trust's Declaration of Trust, as
amended, to own all of its properties and assets and to carry on its business as
it is now being conducted and, subject to approval of shareholders of the
Acquired Fund, to carry out the Agreement. The Acquired
<PAGE>
Fund, the only active series of the Acquired Trust, is duly designated in
accordance with the applicable provisions of the Acquired Trust's Declaration of
Trust. The Acquired Trust and Acquired Fund are qualified to do business in all
jurisdictions in which they are required to be so qualified, except
jurisdictions in which the failure to so qualify would not have material adverse
effect on the Acquired Trust or Acquired Fund. The Acquired Fund has all
material federal, state and local authorizations necessary to own all of the
properties and assets and to carry on its business as now being conducted,
except authorizations which the failure to so obtain would not have a material
adverse effect on the Acquired Fund;
(b) The Acquired Trust is registered with the Commission as an
open-end management investment company under the 1940 Act, and such registration
is in full force and effect and the Acquired Fund is in compliance in all
material respects with the 1940 Act and the rules and regulations thereunder;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired Fund of
the transactions contemplated herein, except such as have been obtained under
the Securities Act of 1933, as amended (the "1933 Act"), the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and the 1940 Act and such as may be
required by state securities laws;
(d) Other than with respect to contracts entered into in
connection with the portfolio management of the Acquired Fund which shall
terminate on or prior to the Closing Date, the Acquired Trust is not, and the
execution, delivery and performance of this Agreement by the Acquired Trust will
not result (i) in violation of Massachusetts law or of the Acquired Trust's
Declaration of Trust, as amended, or By-Laws, (ii) in a violation or breach of,
or constitute a default under, any material agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquired Fund is a party or by
which it is bound, and the execution, delivery and performance of this Agreement
by the Acquired Fund will not result in the acceleration of any obligation, or
the imposition of any penalty, under any agreement, indenture, instrument,
contract, lease, judgment or decree to which the Acquired Fund is a party or by
which it is bound, or (iii) in the creation or imposition of any lien, charge or
encumbrance on any property or assets of the Acquired Fund.
(e) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against the Acquired Fund or any properties or
assets held by it. The Acquired Fund knows of no facts which might form the
basis for the institution of such proceedings which would materially and
adversely affect its business and is not a party to or subject to the provisions
of any order, decree or judgment of any court or governmental body which
materially and adversely affects its business or its ability to consummate the
transactions herein contemplated;
(f) The Statements of Assets and Liabilities, Operations, and
Changes in Net Assets, the Financial Highlights, and the Investment Portfolio of
the Acquired Fund at and for the fiscal year ended November 30, [1999], have
been audited by Ernst & Young LLP, independent auditors, and are in accordance
with GAAP consistently applied, and such statements (a copy of each of which has
been furnished to the Acquiring Fund) present fairly, in all material respects,
the financial position of the Acquired Fund as of such date in accordance with
GAAP, and there are no known contingent liabilities of the Acquired Fund
required to be reflected on a balance sheet (including the notes thereto) in
accordance with GAAP as of such date not disclosed therein;
<PAGE>
(g) Since November 30, [1999], there has not been any material
adverse change in the Acquired Fund's financial condition, assets, liabilities
or business other than changes occurring in the ordinary course of business, or
any incurrence by the Acquired Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred except as otherwise disclosed to
and accepted in writing by the Acquiring Fund. For purposes of this subsection
(g), a decline in net asset value per share of the Acquired Fund due to declines
in market values of securities in the Acquired Fund's portfolio, the discharge
of Acquired Fund liabilities, or the redemption of Acquired Fund shares by
Acquired Fund Shareholders shall not constitute a material adverse change;
(h) At the date hereof and at the Closing Date, all federal and
other tax returns and reports of the Acquired Fund required by law to have been
filed by such dates (including any extensions) shall have been filed and are or
will be correct in all material respects, and all federal and other taxes shown
as due or required to be shown as due on said returns and reports shall have
been paid or provision shall have been made for the payment thereof, and, to the
best of the Acquired Fund's knowledge, no such return is currently under audit
and no assessment has been asserted with respect to such returns;
(i) For each taxable year of its operation (including the taxable
year ending on the Closing Date), the Acquired Fund has met the requirements of
Subchapter M of the Code for qualification as a regulated investment company and
has elected to be treated as such, has been eligible to and has computed its
federal income tax under Section 852 of the Code, and will have distributed all
of its investment company taxable income and net capital gain (as defined in the
Code) that has accrued through the Closing Date;
(j) All issued and outstanding shares of the Acquired Fund (i)
have been offered and sold in every state and the District of Columbia in
compliance in all material respects with applicable registration requirements of
the 1933 Act and state securities laws, (ii) are, and on the Closing Date will
be, duly and validly issued and outstanding, fully paid and non-assessable and
not subject to preemptive or dissenter's rights (recognizing that, under
Massachusetts law, Acquired Fund Shareholders, under certain circumstances,
could be held personally liable for obligations of the Acquired Fund), and (iii)
will be held at the time of the Closing by the persons and in the amounts set
forth in the records of State Street, as provided in section 3.4. The Acquired
Fund does not have outstanding any options, warrants or other rights to
subscribe for or purchase any of the Acquired Fund shares, nor is there
outstanding any security convertible into any of the Acquired Fund shares;
(k) At the Closing Date, the Acquired Fund will have good and
marketable title to the Acquired Fund's assets to be transferred to the
Acquiring Fund pursuant to section 1.2 and full right, power, and authority to
sell, assign, transfer and deliver such assets hereunder free of any liens or
other encumbrances, except those liens or encumbrances as to which the Acquiring
Fund has received notice at or prior to the Closing, and upon delivery and
payment for such assets, the Acquiring Fund will acquire good and marketable
title thereto, subject to no restrictions on the full transfer thereof,
including such restrictions as might arise under the 1933 Act and the 1940 Act,
except those restrictions as to which the Acquiring Fund has received notice and
necessary documentation at or prior to the Closing;
(l) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action on
the part of the Board members of the Acquired Trust (including the
determinations required by Rule 17a-8(a) under the 1940 Act), and, subject to
the approval of the Acquired Fund Shareholders, this Agreement constitutes a
valid and binding obligation of the Acquired Trust, on behalf of the Acquired
Fund, enforceable in accordance with its
<PAGE>
terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws relating to or affecting
creditors' rights and to general equity principles;
(m) The information to be furnished by the Acquired Fund for use
in applications for orders, registration statements or proxy materials or for
use in any other document filed or to be filed with any federal, state or local
regulatory authority (including the National Association of Securities Dealers,
Inc. (the "NASD")), which may be necessary in connection with the transactions
contemplated hereby, shall be accurate and complete in all material respects and
shall comply in all material respects with federal securities and other laws and
regulations applicable thereto;
(n) The current prospectus and statement of additional information
of the Acquired Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Commission thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading; and
(o) The proxy statement of the Acquired Fund to be included in the
Registration Statement referred to in section 5.7 (the "Proxy Statement"),
insofar as it relates to the Acquired Fund, will, on the effective date of the
Registration Statement and on the Closing Date, (i) comply in all material
respects with the provisions and Regulations of the 1933 Act, 1934 Act and 1940
Act, as applicable, and (ii) not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which such
statements are made, not materially misleading; provided, however, that the
representations and warranties in this section shall not apply to statements in
or omissions from the Proxy Statement and the Registration Statement made in
reliance upon and in conformity with information that was furnished or should
have been furnished by the Acquiring Fund for use therein.
4.2. The Acquiring Corporation, on behalf of the Acquiring Fund,
represents and warrants to the Acquired Fund as follows:
(a) The Acquiring Corporation is a corporation duly organized and
validly existing under the laws of the State of Maryland with power under the
Acquiring Corporation's Charter, as amended, to own all of its properties and
assets and to carry on its business as it is now being conducted and, subject to
the approval of shareholders of the Acquired Fund, to carry out the Agreement.
The Acquiring Fund is a separate series of the Acquiring Corporation duly
designated in accordance with the applicable provisions of the Acquiring
Corporation's Charter. The Acquiring Corporation and Acquiring Fund are
qualified to do business in all jurisdictions in which they are required to be
so qualified, except jurisdictions in which the failure to so qualify would not
have material adverse effect on the Acquiring Corporation or Acquiring Fund. The
Acquiring Fund has all material federal, state and local authorizations
necessary to own all of the properties and assets and to carry on its business
as now being conducted, except authorizations which the failure to so obtain
would not have a material adverse effect on the Acquiring Fund;
(b) The Acquiring Corporation is registered with the Commission as
an open-end management investment company under the 1940 Act, and such
registration is in full force and effect and the Acquiring Fund is in compliance
in all material respects with the 1940 Act and the rules and regulations
thereunder;
<PAGE>
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring Fund of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by state
securities laws;
(d) The Acquiring Corporation is not, and the execution, delivery
and performance of this Agreement by the Acquiring Corporation will not result
(i) in violation of Maryland law or of the Acquiring Corporation's Charter, as
amended, or By-Laws, or (ii) in a violation or breach of, or constitute a
default under, any material agreement, indenture, instrument, contract, lease or
other undertaking known to counsel to which the Acquiring Fund is a party or by
which it is bound, and the execution, delivery and performance of this Agreement
by the Acquiring Fund will not result in the acceleration of any obligation, or
the imposition of any penalty, under any agreement, indenture, instrument,
contract, lease, judgment or decree to which the Acquiring Fund is a party or by
which it is bound, or (iii) in the creation or imposition of any lien, charge or
encumbrance on any property or assets of the Acquiring Fund;
(e) No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or to its knowledge threatened against the Acquiring Fund or any properties or
assets held by it. The Acquiring Fund knows of no facts which might form the
basis for the institution of such proceedings which would materially and
adversely affect its business and is not a party to or subject to the provisions
of any order, decree or judgment of any court or governmental body which
materially and adversely affects its business or its ability to consummate the
transactions herein contemplated;
(f) The Statements of Assets and Liabilities, Operations, and
Changes in Net Assets, the Financial Highlights, and the Investment Portfolio of
the Acquiring Fund at and for the fiscal year ended October 31, 2000, have been
audited by PricewaterhouseCoopers LLP, independent accountants, and are in
accordance with GAAP consistently applied, and such statements (a copy of each
of which has been furnished to the Acquired Fund) present fairly, in all
material respects, the financial position of the Acquiring Fund as of such date
in accordance with GAAP, and there are no known contingent liabilities of the
Acquiring Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed therein;
(g) Since October 31, 2000, there has not been any material
adverse change in the Acquiring Fund's financial condition, assets, liabilities
or business other than changes occurring in the ordinary course of business, or
any incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred except as otherwise disclosed to
and accepted in writing by the Acquired Fund. For purposes of this subsection
(g), a decline in net asset value per share of the Acquiring Fund due to
declines in market values of securities in the Acquiring Fund's portfolio, the
discharge of Acquiring Fund liabilities, or the redemption of Acquiring Fund
shares by Acquiring Fund shareholders shall not constitute a material adverse
change;
(h) At the date hereof and at the Closing Date, all federal and
other tax returns and reports of the Acquiring Fund required by law to have been
filed by such dates (including any extensions) shall have been filed and are or
will be correct in all material respects, and all federal and other taxes shown
as due or required to be shown as due on said returns and reports shall have
been paid or provision shall have been made for the payment thereof, and, to the
best of the Acquiring Fund's knowledge, no such return is currently under audit
and no assessment has been asserted with respect to such returns;
<PAGE>
(i) For each taxable year of its operation, the Acquiring Fund has
met the requirements of Subchapter M of the Code for qualification as a
regulated investment company and has elected to be treated as such, has been
eligible to and has computed its federal income tax under Section 852 of the
Code, and will do so for the taxable year including the Closing Date;
(j) All issued and outstanding shares of the Acquiring Fund (i)
have been offered and sold in every state and the District of Columbia in
compliance in all material respects with applicable registration requirements of
the 1933 Act and state securities laws and (ii) are, and on the Closing Date
will be, duly and validly issued and outstanding, fully paid and non-assessable,
and not subject to preemptive or dissenter's rights. The Acquiring Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of the Acquiring Fund shares, nor is there outstanding any security
convertible into any of the Acquiring Fund shares;
(k) The Acquiring Fund Shares to be issued and delivered to the
Acquired Fund, for the account of the Acquired Fund Shareholders, pursuant to
the terms of this Agreement, will at the Closing Date have been duly authorized
and, when so issued and delivered, will be duly and validly issued and
outstanding Acquiring Fund Shares, and will be fully paid and non-assessable
(recognizing that, under Massachusetts law, Acquiring Fund Shareholders, under
certain circumstances, could be held personally liable for the obligations of
the Acquiring Fund);
(l) At the Closing Date, the Acquiring Fund will have good and
marketable title to the Acquiring Fund's assets, free of any liens or other
encumbrances, except those liens or encumbrances as to which the Acquired Fund
has received notice at or prior to the Closing;
(m) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary action on
the part of the Board members of the Acquiring Corporation (including the
determinations required by Rule 17a-8(a) under the 1940 Act) and this Agreement
will constitute a valid and binding obligation of the Acquiring Corporation, on
behalf of the Acquiring Fund, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws relating to or affecting creditors'
rights and to general equity principles;
(n) The information to be furnished by the Acquiring Fund for use
in applications for orders, registration statements or proxy materials or for
use in any other document filed or to be filed with any federal, state or local
regulatory authority (including the NASD), which may be necessary in connection
with the transactions contemplated hereby, shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto;
(o) The current prospectus and statement of additional information
of the Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Commission thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading;
(p) The Proxy Statement to be included in the Registration
Statement, only insofar as it relates to the Acquiring Fund, will, on the
effective date of the Registration Statement and on the Closing Date, (i) comply
in all material respects with the provisions and Regulations of the 1933 Act,
<PAGE>
1934 Act, and 1940 Act and (ii) not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which such
statements were made, not materially misleading; provided, however, that the
representations and warranties in this section shall not apply to statements in
or omissions from the Proxy Statement and the Registration Statement made in
reliance upon and in conformity with information that was furnished or should
have been furnished by the Acquired Fund for use therein; and
(q) The Acquiring Fund agrees to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state securities laws as may be necessary in order to continue
its operations after the Closing Date.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1. The Acquiring Fund and the Acquired Fund each covenants to operate
its business in the ordinary course between the date hereof and the Closing
Date, it being understood that (a) such ordinary course of business will include
(i) the declaration and payment of customary dividends and other distributions
and (ii) such changes as are contemplated by the Funds' normal operations; and
(b) each Fund shall retain exclusive control of the composition of its portfolio
until the Closing Date. No party shall take any action that would, or reasonably
would be expected to, result in any of its representations and warranties set
forth in this Agreement being or becoming untrue in any material respect. The
Acquired Fund and Acquiring Fund covenant and agree to coordinate the respective
portfolios of the Acquired Fund and Acquiring Fund from the date of the
Agreement up to and including the Closing Date in order that at Closing, when
the Assets are added to the Acquiring Fund's portfolio, the resulting portfolio
will meet the Acquiring Fund's investment objective, policies and restrictions,
as set forth in the Acquiring Fund's Prospectus, a copy of which has been
delivered to the Acquired Fund.
5.2. Upon reasonable notice, the Acquiring Fund's officers and agents
shall have reasonable access to the Acquired Fund's books and records necessary
to maintain current knowledge of the Acquired Fund and to ensure that the
representations and warranties made by the Acquired Fund are accurate.
5.3. The Acquired Fund covenants to call a meeting of the Acquired Fund
Shareholders entitled to vote thereon to consider and act upon this Agreement
and to take all other reasonable action necessary to obtain approval of the
transactions contemplated herein. Such meeting shall be scheduled for no later
than May 15, 2001.
5.4. The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this Agreement.
5.5. The Acquired Fund covenants that it will assist the Acquiring Fund
in obtaining such information as the Acquiring Fund reasonably requests
concerning the beneficial ownership of the Acquired Fund shares.
5.6. Subject to the provisions of this Agreement, the Acquiring Fund and
the Acquired Fund will each take, or cause to be taken, all actions, and do or
cause to be done, all things reasonably necessary, proper, and/or advisable to
consummate and make effective the transactions contemplated by this Agreement.
<PAGE>
5.7. Each Fund covenants to prepare in compliance with the 1933 Act, the
1934 Act and the 1940 Act the Registration Statement on Form N-14 (the
"Registration Statement") in connection with the meeting of the Acquired Fund
Shareholders to consider approval of this Agreement and the transactions
contemplated herein. The Acquiring Fund will file the Registration Statement,
including the Proxy Statement, with the Commission. The Acquired Fund will
provide the Acquiring Fund with information reasonably necessary for the
preparation of a prospectus, which will include the Proxy Statement referred to
in section 4.1(o), all to be included in the Registration Statement, in
compliance in all material respects with the 1933 Act, the 1934 Act and the 1940
Act.
5.8. The Acquired Fund covenants that it will, from time to time, as and
when reasonably requested by the Acquiring Fund, execute and deliver or cause to
be executed and delivered all such assignments and other instruments, and will
take or cause to be taken such further action as the Acquiring Fund may
reasonably deem necessary or desirable in order to vest in and confirm the
Acquiring Fund's title to and possession of all the assets and otherwise to
carry out the intent and purpose of this Agreement.
5.9. The Acquiring Fund covenants to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act and 1940 Act,
and such of the state securities laws as it deems appropriate in order to
continue its operations after the Closing Date and to consummate the
transactions contemplated herein; provided, however, that the Acquiring Fund may
take such actions it reasonably deems advisable after the Closing Date as
circumstances change.
5.10. The Acquiring Fund covenants that it will, from time to time, as
and when reasonably requested by the Acquired Fund, execute and deliver or cause
to be executed and delivered all such assignments, assumption agreements,
releases, and other instruments, and will take or cause to be taken such further
action, as the Acquired Fund may reasonably deem necessary or desirable in order
to (i) vest and confirm to the Acquired Fund title to and possession of all
Acquiring Fund shares to be transferred to the Acquired Fund pursuant to this
Agreement and (ii) assume the liabilities from the Acquired Fund.
5.11. As soon as reasonably practicable after the Closing, the Acquired
Fund shall make a liquidating distribution to its shareholders consisting of the
Acquiring Fund Shares received at the Closing.
5.12. The Acquiring Fund and the Acquired Fund shall each use its
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this Agreement as promptly
as practicable.
5.13. The intention of the parties is that the transaction will qualify
as a reorganization within the meaning of Section 368(a) of the Code. Neither
the Acquiring Corporation, the Acquired Trust, the Acquiring Fund nor the
Acquired Fund shall take any action, or cause any action to be taken (including,
without limitation, the filing of any tax return) that is inconsistent with such
treatment or results in the failure of the transaction to qualify as a
reorganization within the meaning of Section 368(a) of the Code. At or prior to
the Closing Date, the Acquiring Corporation, the Acquired Trust, the Acquiring
Fund and the Acquired Fund will take such action, or cause such action to be
taken, as is reasonably necessary to enable Willkie Farr & Gallagher to render
the tax opinion contemplated herein in section 8.5.
5.14. At or immediately prior to the Closing, the Acquired Fund may
declare and pay to its stockholders a dividend or other distribution in an
amount large enough so that it will have distributed
<PAGE>
substantially all (and in any event not less than 98%) of its investment company
taxable income (computed without regard to any deduction for dividends paid) and
realized net capital gain, if any, for the current taxable year through the
Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions:
6.1. All representations and warranties of the Acquiring Corporation, on
behalf of the Acquiring Fund, contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Closing Date, with the same force and effect as if made on and as of the Closing
Date; and there shall be (i) no pending or threatened litigation brought by any
person (other than the Acquired Fund, its adviser or any of their affiliates)
against the Acquiring Fund or its investment adviser(s), Board members or
officers arising out of this Agreement and (ii) no facts known to the Acquiring
Fund which the Acquiring Fund reasonably believes might result in such
litigation.
6.2. The Acquiring Fund shall have delivered to the Acquired Fund on the
Closing Date a certificate executed in its name by its President or a Vice
President, in a form reasonably satisfactory to the Acquired Trust, on behalf of
the Acquired Fund, and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquiring Fund made in this Agreement are
true and correct on and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement, and as to such other matters
as the Acquired Fund shall reasonably request.
6.3. The Acquired Fund shall have received on the Closing Date an
opinion of Dechert, in a form reasonably satisfactory to the Acquired Fund, and
dated as of the Closing Date, to the effect that:
(a) The Acquiring Corporation has been duly formed and is an
existing corporation; (b) the Acquiring Fund has the power to carry on its
business as presently conducted in accordance with the description thereof in
the Acquiring Fund's registration statement under the 1940 Act; (c) the
Agreement has been duly authorized, executed and delivered by the Acquiring
Corporation, on behalf of the Acquiring Fund, and constitutes a valid and
legally binding obligation of the Acquiring Corporation, on behalf of the
Acquiring Fund, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and laws of general
applicability relating to or affecting creditors' rights and to general equity
principles; (d) the execution and delivery of the Agreement did not, and the
exchange of the Acquired Fund's assets for Acquiring Fund Shares pursuant to the
Agreement will not, violate the Acquiring Corporation's Charter, as amended, or
By-laws; and (e) to the knowledge of such counsel, and without any independent
investigation, (i) the Acquiring Corporation is not subject to any litigation or
other proceedings that might have a materially adverse effect on the operations
of the Acquiring Corporation, (ii) the Acquiring Corporation is duly registered
as an investment company with the Commission and is not subject to any stop
order; and (iii) all regulatory consents, authorizations, approvals or filings
required to be obtained or made by the Acquiring Fund under the federal laws of
the United States or the laws of the State of Maryland for the exchange of the
Acquired Fund's assets for Acquiring Fund Shares, pursuant to the Agreement have
been obtained or made.
<PAGE>
The delivery of such opinion is conditioned upon receipt by Dechert
of customary representations it shall reasonably request of each of the
Acquiring Corporation and the Acquired Trust.
6.4. The Acquiring Fund shall have performed all of the covenants and
complied with all of the provisions required by this Agreement to be performed
or complied with by the Acquiring Fund on or before the Closing Date.
6.5. The Acquiring Fund shall have [(i) adopted a new investment
management agreement and (ii)] entered into an administrative services agreement
with Scudder Kemper, each in a form reasonably satisfactory to the Acquired
Fund.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all of the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions:
7.1. All representations and warranties of the Acquired Trust, on behalf
of the Acquired Fund, contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as they may be affected
by the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date; and there
shall be (i) no pending or threatened litigation brought by any person (other
than the Acquiring Fund, its adviser or any of their affiliates) against the
Acquired Fund or its investment adviser(s), Board members or officers arising
out of this Agreement and (ii) no facts known to the Acquired Fund which the
Acquired Fund reasonably believes might result in such litigation.
7.2. The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities as of the Closing Date,
certified by the Treasurer of the Acquired Fund.
7.3. The Acquired Fund shall have delivered to the Acquiring Fund on the
Closing Date a certificate executed in its name by its President or a Vice
President, in a form reasonably satisfactory to the Acquiring Corporation, on
behalf of the Acquiring Fund, and dated as of the Closing Date, to the effect
that the representations and warranties of the Acquired Trust with respect to
the Acquired Fund made in this Agreement are true and correct on and as of the
Closing Date, except as they may be affected by the transactions contemplated by
this Agreement, and as to such other matters as the Acquiring Fund shall
reasonably request.
7.4. The Acquiring Fund shall have received on the Closing Date an
opinion of Dechert, in a form reasonably satisfactory to the Acquiring Fund, and
dated as of the Closing Date, to the effect that:
(a) The Acquired Trust has been duly formed and is an existing
business trust; (b) the Acquired Fund has the power to carry on its business as
presently conducted in accordance with the description thereof in the Acquired
Trust's registration statement under the 1940 Act; (c) the Agreement has been
duly authorized, executed and delivered by the Acquired Trust, on behalf of the
Acquired Fund, and constitutes a valid and legally binding obligation of the
Acquired Trust, on behalf of the Acquired Fund, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
<PAGE>
reorganization, moratorium and laws of general applicability relating to or
affecting creditors' rights and to general equity principles; (d) the execution
and delivery of the Agreement did not, and the exchange of the Acquired Fund's
assets for Acquiring Fund Shares pursuant to the Agreement will not, violate the
Acquired Trust's Declaration of Trust, as amended, or By-laws; and (e) to the
knowledge of such counsel, and without any independent investigation, (i) the
Acquired Trust is not subject to any litigation or other proceedings that might
have a materially adverse effect on the operations of the Acquired Trust, (ii)
the Acquired Trust is duly registered as an investment company with the
Commission and is not subject to any stop order, and (iii) all regulatory
consents, authorizations, approvals or filings required to be obtained or made
by the Acquired Fund under the federal laws of the United States or the laws of
The Commonwealth of Massachusetts for the exchange of the Acquired Fund's assets
for Acquiring Fund Shares, pursuant to the Agreement have been obtained or made.
The delivery of such opinion is conditioned upon receipt by Dechert
of customary representations it shall reasonably request of each of the
Acquiring Corporation and the Acquired Trust.
7.5. The Acquired Fund shall have performed all of the covenants and
complied with all of the provisions required by this Agreement to be performed
or complied with by the Acquired Fund on or before the Closing Date.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE
ACQUIRED FUND
If any of the conditions set forth below have not been met on or before the
Closing Date with respect to the Acquired Fund or the Acquiring Fund, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement:
8.1. This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of the Acquired Trust's
Declaration of Trust, as amended, and By-Laws, applicable Massachusetts law and
the 1940 Act, and certified copies of the resolutions evidencing such approval
shall have been delivered to the Acquiring Fund. Notwithstanding anything herein
to the contrary, neither the Acquiring Fund nor the Acquired Fund may waive the
conditions set forth in this section 8.1.
8.2. On the Closing Date, no action, suit or other proceeding shall be
pending or to its knowledge threatened before any court or governmental agency
in which it is sought to restrain or prohibit, or obtain material damages or
other relief in connection with, this Agreement or the transactions contemplated
herein.
8.3. All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities deemed necessary by
the Acquiring Fund or the Acquired Fund to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Acquired Fund, provided that either party hereto may for
itself waive any of such conditions.
8.4. The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the
<PAGE>
parties hereto, no investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the 1933 Act.
8.5. The parties shall have received an opinion of Willkie Farr &
Gallagher addressed to each of the Acquiring Fund and the Acquired Fund, in a
form reasonably satisfactory to each such party to this Agreement, substantially
to the effect that, based upon certain facts, assumptions and representations of
the parties, for federal income tax purposes: (i) the transfer to the Acquiring
Fund of all or substantially all of the assets of the Acquired Fund in exchange
solely for Acquiring Fund Shares and the assumption by the Acquiring Fund of all
of the liabilities of the Acquired Fund, followed by the distribution of such
shares to the Acquired Fund Shareholders in exchange for their shares of the
Acquired Fund in complete liquidation of the Acquired Fund, will constitute a
"reorganization" within the meaning of Section 368(a)(1) of the Code, and the
Acquiring Fund and the Acquired Fund will each be "a party to a reorganization"
within the meaning of Section 368(b) of the Code; (ii) no gain or loss will be
recognized by the Acquired Fund upon the transfer of all or substantially all of
its assets to the Acquiring Fund in exchange solely for Acquiring Fund Shares
and the assumption by the Acquiring Fund of all of the liabilities of the
Acquired Fund; (iii) the basis of the assets of the Acquired Fund in the hands
of the Acquiring Fund will be the same as the basis of such assets of the
Acquired Fund immediately prior to the transfer; (iv) the holding period of the
assets of the Acquired Fund in the hands of the Acquiring Fund will include the
period during which such assets were held by the Acquired Fund; (v) no gain or
loss will be recognized by the Acquiring Fund upon the receipt of the assets of
the Acquired Fund in exchange for Acquiring Fund Shares and the assumption by
the Acquiring Fund of all of the liabilities of the Acquired Fund; (vi) no gain
or loss will be recognized by Acquired Fund Shareholders upon the receipt of the
Acquiring Fund Shares solely in exchange for their shares of the Acquired Fund
as part of the transaction; (vii) the basis of the Acquiring Fund Shares
received by Acquired Fund Shareholders will be the same as the basis of the
shares of the Acquired Fund exchanged therefor; and (viii) the holding period of
Acquiring Fund Shares received by Acquired Fund Shareholders will include the
holding period during which the shares of the Acquired Fund exchanged therefor
were held, provided that at the time of the exchange the shares of the Acquired
Fund were held as capital assets in the hands of Acquired Fund Shareholders. The
delivery of such opinion is conditioned upon receipt by Willkie Farr & Gallagher
of representations it shall request of each of the Acquiring Corporation and
Acquired Trust. Notwithstanding anything herein to the contrary, neither the
Acquiring Fund nor the Acquired Fund may waive the condition set forth in this
section 8.5.
9. INDEMNIFICATION
9.1. The Acquiring Fund agrees to indemnify and hold harmless the
Acquired Fund and each of the Acquired Fund's Board members and officers from
and against any and all losses, claims, damages, liabilities or expenses
(including, without limitation, the payment of reasonable legal fees and
reasonable costs of investigation) to which jointly and severally, the Acquired
Fund or any of its Board members or officers may become subject, insofar as any
such loss, claim, damage, liability or expense (or actions with respect thereto)
arises out of or is based on any breach by the Acquiring Fund of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
9.2. The Acquired Fund agrees to indemnify and hold harmless the
Acquiring Fund and each of the Acquiring Fund's Board members and officers from
and against any and all losses, claims, damages, liabilities or expenses
(including, without limitation, the payment of reasonable legal fees and
reasonable costs of investigation) to which jointly and severally, the Acquiring
Fund or any of its Board members or officers may become subject, insofar as any
such loss, claim, damage, liability or expense (or
<PAGE>
actions with respect thereto) arises out of or is based on any breach by the
Acquired Fund of any of its representations, warranties, covenants or agreements
set forth in this Agreement.
10. FEES AND EXPENSES
10.1. Each of the Acquiring Corporation, on behalf of the Acquiring Fund,
and the Acquired Trust, on behalf of the Acquired Fund, represents and warrants
to the other that it has no obligations to pay any brokers or finders fees in
connection with the transactions provided for herein.
10.2. The anticipated costs of the Reorganization allocable to the
Acquired Fund are $39,129, which includes board meeting fees, legal, accounting
and other consultant fees, and proxy solicitation costs. Class A shares of the
Acquired Fund will pay $17,962, which represents 100% of the estimated costs
allocable to such class. Class B and Class C shares of the Acquired Fund will
pay a portion of their allocable costs of the Reorganization: $10,176 out of
$17,276 (58.9%) for Class B shares and $2,429 out of $3,891 (62.4%) for Class C
shares. Scudder Kemper will bear the remaining costs, including any cost
overruns (except that the Acquiring Fund will bear the SEC and state
registration and notice fees which are estimated to be $_________). Any such
expenses which are so borne by Scudder Kemper will be solely and directly
related to the Reorganization within the meaning of Revenue Ruling 73-54, 1973-1
C.B. 187. Acquired Fund Shareholders will pay their own expenses, if any,
incurred in connection with the Reorganization.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1. The Acquiring Fund and the Acquired Fund agree that neither party
has made any representation, warranty or covenant not set forth herein and that
this Agreement constitutes the entire agreement between the parties.
11.2. Except as specified in the next sentence set forth in this section
11.2, the representations, warranties and covenants contained in this Agreement
or in any document delivered pursuant hereto or in connection herewith shall not
survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing and the obligations of each of the
Acquiring Fund and Acquired Fund in sections 9.1 and 9.2 shall survive the
Closing.
12. TERMINATION
12.1. This Agreement may be terminated and the transactions contemplated
hereby may be abandoned by either party by (i) mutual agreement of the parties,
or (ii) by either party if the Closing shall not have occurred on or before [
], 2001, unless such date is extended by mutual agreement of the parties, or
(iii) by either party if the other party shall have materially breached its
obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective Board members or
officers, except for any such material breach or intentional misrepresentation,
as to each of which all remedies at law or in equity of the party adversely
affected shall survive.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by any authorized officer of the Acquired
Fund and any authorized officer of the
<PAGE>
Acquiring Fund; provided, however, that following the meeting of the Acquired
Fund Shareholders called by the Acquired Fund pursuant to section 5.3 of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of the Acquiring Fund Shares to be issued to the Acquired
Fund Shareholders under this Agreement to the detriment of such shareholders
without their further approval.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be deemed duly given
if delivered by hand (including by Federal Express or similar express courier)
or transmitted by facsimile or three days after being mailed by prepaid
registered or certified mail, return receipt requested, addressed to the
Acquired Fund, 222 South Riverside Plaza, Chicago, Illinois 60606, with a copy
to Dechert, Ten Post Office Square South, Boston, MA 02109-4603, Attention:
Joseph R. Fleming, Esq., or to the Acquiring Fund, 345 Park Avenue, New York,
New York 10154, with a copy to Dechert, Ten Post Office Square South, Boston, MA
02109-4603, Attention: Joseph R. Fleming, Esq., or to any other address that the
Acquired Fund or the Acquiring Fund shall have last designated by notice to the
other party.
15. HEADINGS; COUNTERPARTS; ASSIGNMENT; LIMITATION OF LIABILITY
15.1. The Article and section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.2. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
15.3. This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and the shareholders of the
Acquiring Fund and the Acquired Fund and their respective successors and
assigns, any rights or remedies under or by reason of this Agreement.
15.4. References in this Agreement to the Acquired Trust mean and refer
to the Board members of the Acquired Trust from time to time serving under its
Declaration of Trust on file with the Secretary of State of The Commonwealth of
Massachusetts, as the same may be amended from time to time, pursuant to which
the Acquired Trust conducts its business. It is expressly agreed that the
obligations of the Acquired Trust hereunder shall not be binding upon any of the
Board members, shareholders, nominees, officers, agents, or employees of the
Acquired Trust or the Acquired Fund personally, but bind only the respective
property of the Acquired Fund, as provided in the Acquired Trust's Declaration
of Trust. Moreover, no series of the Acquired Trust other than the Acquired Fund
shall be responsible for the obligations of the Acquired Trust hereunder, and
all persons shall look only to the assets of the Acquired Fund to satisfy the
obligations of the Acquired Trust hereunder. The execution and the delivery of
this Agreement have been authorized by the Acquired Trust's Board members, on
behalf of the Acquired Fund, and this Agreement has been signed by authorized
officers of the Acquired Fund acting as such, and neither such authorization by
such Board members, nor such execution and delivery by such officers, shall be
deemed to have been made by any of them individually or to impose
<PAGE>
any liability on any of them personally, but shall bind only the property of the
Acquired Fund, as provided in the Acquired Trust's Declaration of Trust.
Notwithstanding anything to the contrary contained in this Agreement, the
obligations, agreements, representations and warranties with respect to each
Fund shall constitute the obligations, agreements, representations and
warranties of that Fund only (the "Obligated Fund"), and in no event shall any
other series of the Acquiring Corporation or the Acquired Trust or the assets of
any such series be held liable with respect to the breach or other default by
the Obligated Fund of its obligations, agreements, representations and
warranties as set forth herein.
15.5. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of The Commonwealth of Massachusetts, without regard
to its principles of conflicts of laws.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by an authorized officer and its seal to be affixed thereto and
attested by its Secretary or Assistant Secretary.
Attest: SCUDDER INTERNATIONAL FUND, INC.
on behalf of Scudder Pacific
Opportunities Fund
_________________________
Secretary
______________________________
By:___________________________
Its:___________________________
Attest: KEMPER ASIAN GROWTH FUND
_________________________
Secretary
______________________________
By:___________________________
Its:____________________________
AGREED TO AND ACKNOWLEDGED
ONLY WITH RESPECT TO
PARAGRAPH 10.2 HERETO
SCUDDER KEMPER INVESTMENTS, INC.
___________________________________
By:________________________________
Its:_______________________________
<PAGE>
EXHIBIT B
Management's Discussion of Scudder Pacific Opportunities Fund's Performance
<PAGE>
Performance Update
--------------------------------------------------------------------------------
October 31, 2000
--------------------------------------------------------------------------------
Growth of a $10,000 Investment
--------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE
LINE CHART DATA:
MSCI All
Scudder Pacific Country Asia
Opportunities Fund -- Free Index
Class S (excluding Japan)*
12/92** 10000 10000
'93 13542 16472
'94 14757 19062
'95 13174 17131
'96 13538 18525
'97 9677 12871
'98 7340 9647
'99 10312 14805
'00 8853 11826
Yearly periods ended October 31
--------------------------------------------------------------------------------
Fund Index Comparison
--------------------------------------------------------------------------------
Total Return
Growth of Average
Period ended 10/31/2000 $10,000 Cumulative Annual
--------------------------------------------------------------------------------
Scudder Pacific Opportunities Fund-- Class S
--------------------------------------------------------------------------------
1 year $ 8,580 -14.20% -14.20%
--------------------------------------------------------------------------------
5 year $ 6,720 -32.80% -7.64%
--------------------------------------------------------------------------------
Life of Fund** $ 8,831 -11.69% -1.56%
--------------------------------------------------------------------------------
MSCI All Country Asia Free Index (excluding Japan)*
--------------------------------------------------------------------------------
1 year $ 7,988 -20.12% -20.12%
--------------------------------------------------------------------------------
5 year $ 6,903 -30.97% -7.14%
--------------------------------------------------------------------------------
Life of Fund** $ 11,826 18.26% 2.16%
--------------------------------------------------------------------------------
<PAGE>
* The Morgan Stanley Capital International (MSCI) All Country Asia Free
Index is an unmanaged capitalization-weighted measure of stock markets
in the Pacific Region, excluding Japan. Index returns assume dividends
are reinvested and, unlike Fund returns, do not reflect any fees or
expenses.
** The Fund commenced operations on December 8, 1992. Index comparisons
begin December 31, 1992.
On October 2, 2000, existing shares of the Fund were redesignated as
Class S shares. In addition, the Fund commenced offering Class AARP
shares. The total return information provided is for the Fund's Class S
shares.
All performance is historical, assumes reinvestment of all dividends
and capital gains, and is not indicative of future results. Investment
return and principal value will fluctuate, so an investor's shares,
when redeemed, may be worth more or less than when purchased. If the
Adviser had not maintained the Fund's expenses, the life of Fund total
return for the Fund would have been lower.
2
<PAGE>
Portfolio Management Discussion
--------------------------------------------------------------------------------
October 31, 2000
We asked Tien-Yu Sieh, lead portfolio manager of Scudder Pacific Opportunities
Fund, to discuss the recent market environment and the fund's investment
strategy over the twelve-month period ended October 31, 2000.
Q: How did the Asian markets perform during the period?
A: Pacific Basin equities declined during the twelve months ended October 31,
2000 due to extreme weakness in the second half of the period. Negative external
factors such as rising oil prices and weakness in the U.S. equity market weighed
heavily on stock prices. The Asian markets were further impacted by
region-specific difficulties, such as political issues in Taiwan and the
decision by Ford Motor Company to withdraw its offer for Daewoo's auto division,
a move that raised anxieties over the slowing pace of restructuring in Korea.
Additionally, Asian currencies were weak across the board in the face of a
strong dollar. Against this backdrop, the net asset value of Scudder Pacific
Opportunities Fund -- Class S shares during the period fell 14.20%, a smaller
decline than the -20.12% return of its unmanaged benchmark, the MSCI All Country
Asia Free, ex-Japan Index. In the second half of the period, the fund lost
27.22%, while its benchmark fell 25.50%.
Q: What were some of the key factors in the fund's underperformance?
A: The largest contributor to the fund's recent underperformance was its
overweighting in the technology and telecommunications areas, a position that
had contributed positively to performance in the early part of the year. During
the course of the third quarter, however, we reevaluated our holdings in these
sectors in the face of overwhelming downward pressure on share prices. While we
still believe in the superior fundamentals of many of the leading companies in
the sector, we are not confident that this will be reflected in the short-term
performance of their stock prices. The fund's relative performance was also hurt
3
<PAGE>
by its underweighting in value names and stocks that are prominent in the
regional indices, both of which benefited from a rotation away from companies in
the tech and telecom sectors. We have had relatively little exposure to value
names because of their finite growth potential, relatively poor operating
characteristics, and weaker competitive positioning.
In the latter part of the period, the fund was hurt by the fact that the markets
offering the heaviest representation of companies with the most attractive
fundamentals failed to perform. As a result, fund performance was hurt by
macroeconomic and political factors such as those affecting Taiwan and Korea.
Such issues, which we believe to be unrelated to the basic company-specific
fundamentals of the stocks we hold in the portfolio, prevented our bottom-up
stock selection approach from having a positive effect. Similarly, we were
underweight top-performing markets like Hong Kong, Singapore, and Australia,
which we felt were largely comprised of companies with limited upside potential.
Q: The fund has held a large position in semiconductor stocks, as well as plays
on the boom in wireless communication. How did these holdings affect
performance?
A: The decline in these areas was a key factor in the fund's underperformance.
Believing that the semiconductor industry was still in the middle of an extended
growth cycle, we were highly positive on the sector entering the third quarter.
We were further intrigued by the fact that valuations of Asian semiconductor
companies were dramatically lower than those of their counterparts in other
parts of the world. Another sector that we were enthusiastic on was mobile
telephony, based on our thesis that the world is on the brink of the dawn of a
mobile data revolution. However, our views on these key sectors have since
evolved. While valuations remain fundamentally sound -- and in fact have gotten
even more attractive in recent months -- we are now taking a more cautious
4
<PAGE>
stance. Our primary rationale is that the Asian tech and telecom sectors are
still a secondary investment made after global investors have already
established positions in the industry leaders in the U.S. and Europe. Although
the fundamental outlook for several companies in the sector remains positive, it
will be difficult for their values to be recognized by investors as long as
volatility in U.S. tech stocks remains high.
Q: How is the fund positioned at present, and what changes have you made in
recent months?
A: The fund continues to hold an overweight position in companies with exposure
to the recovery of the domestic economy, as well as leading exporters of
industrial products and services. As in the second quarter, we reviewed our
portfolio composition in considerable detail, undertaking an in-depth analysis
of our holdings through on-the-ground meetings with company managements. With
few exceptions, we determined that the operating positions of the companies in
the fund remained highly positive, and in many cases were ahead of expectations.
We therefore made few changes to the portfolio during the period. Further, we
resisted adding to positions in these companies (such as Samsung Electronics, SK
Telecom, and China Telecom), choosing instead to accumulate a higher cash level
in the face of severe market volatility and uncertainty. We continued to add to
the banking and financial services sectors, however, based on our view that the
leading companies had accelerated the overhaul of their operations with the aim
of improving efficiency and future returns.
Given our expectation for further volatility, the fund remains defensively
positioned. There is currently a dearth of attractive opportunities promising
favorable absolute returns. The threat of an imminent slowdown in economic
growth, combined with the volatility in oil prices and the weakness of the euro,
have made for a more challenging backdrop for almost all business in Asia. As a
result, we chose to raise cash levels in recent months, after having
5
<PAGE>
held minimal cash throughout the first half of the calendar year.
Q: What is your outlook for the Asian markets?
A: In the short term, we believe that sharp rallies from depressed levels are
likely to prove unsustainable. This should limit the upside in many sectors
until the larger questions surrounding global growth, oil prices, and currencies
have been resolved. Despite these concerns, we remain positive on our medium- to
longer-term outlook for Asia. In the past, we have stated our belief that more
enlightened management practices will, over time, lead to a higher quality of
income, and hence higher valuations and more potent returns to shareholders.
These changes, in turn, should have a positive impact on macroeconomic
fundamentals by providing a stronger base for growth and overall demand across
the region. As consumer confidence grows and corporate earnings increase, we
believe that funds will flow into the region and further help its companies
build a better foundation for the future. In this way, restructuring and reform
has the potential to unleash a virtuous cycle that can benefit Asia for years to
come.
In our view, the year 2000 probably marks a watershed in the transition from the
explosive rebound phase that followed the crises of 1997-98 to a period of more
sustainable growth. Further, the sharp downturn in the Asian markets since the
end of the first quarter has effectively lowered valuations to more reasonable
levels. We believe this to be especially true in light of the strong operating
performance that many of our holdings have demonstrated. Although investors
should not expect strong absolute returns in the near term, we will continue to
position the fund to benefit from the long-term themes that are emerging in the
Pacific Basin.
6
<PAGE>
APPENDIX 1
Trustee and Nominee Shareholdings
<PAGE>
APPENDIX 2
Beneficial Owners of Fund Shares
<PAGE>
This Proxy Statement/Prospectus is accompanied by Scudder Pacific
Opportunities Fund's prospectus offering Class A, Class B and Class C shares
dated March 1, 2001, which was previously filed with the Securities and Exchange
Commission (the "Commission") via EDGAR on December 26, 2000 (File No. 811-
00642 ), and is incorporated by reference herein.
Kemper Asian Growth Fund's prospectus dated March 1, 2001, which was
previously filed with the Commission via EDGAR on December 27, 2000 (File No.
811-07731), is incorporated by reference herein.
Scudder Pacific Opportunities Fund's statement of additional
information offering Class A, Class B and Class C shares dated March 1, 2001,
which was previously filed with the Commission via EDGAR on December 26, 2000
(File No. 811-00642 ), is incorporated by reference herein.
<PAGE>
PART B
SCUDDER INTERNATIONAL FUND, INC.
--------------------------------------------------------------
Statement of Additional Information
March [ ], 2001
--------------------------------------------------------------
Acquisition of the Assets of By and in Exchange for Shares of
Kemper Asian Growth Fund Scudder Pacific Opportunities Fund, a series of
222 South Riverside Plaza Scudder International Fund, Inc.
Chicago, IL 60606 (the "Acquiring Corporation")
345 Park Avenue
New York, NY 10154
This Statement of Additional Information is available to the
shareholders of Kemper Asian Growth Fund in connection with a proposed
transaction whereby Scudder Pacific Opportunities Fund will acquire all or
substantially all of the assets and all of the liabilities of Kemper Asian
Growth Fund in exchange for shares of the Scudder Pacific Opportunities Fund
(the "Reorganization").
This Statement of Additional Information of the Acquiring Corporation
contains material which may be of interest to investors but which is not
included in the Proxy Statement/Prospectus of the Acquiring Corporation relating
to the Reorganization. This Statement of Additional Information consists of
this cover page and the following documents:
1. Scudder Pacific Opportunities Fund's statement of additional
information offering Class A, Class B and Class C shares dated March 1, 2001,
which was previously filed with the Securities and Exchange Commission (the
"Commission") via EDGAR on December 26, 2000 (File No. 811-00642) and is
incorporated by reference herein.
2. Scudder Pacific Opportunities Fund's annual report to shareholders for
the fiscal year ended October 31, 2000, which was previously filed with the
Commission via EDGAR on December 27, 2000 (File No. 811-00642) and is
incorporated by reference herein.
3. Kemper Asian Growth Fund's prospectus dated March 1, 2001, which was
previously filed with the Commission via EDGAR on December 27, 2000 (File No.
811-07731) and is incorporated by reference herein.
4. Kemper Asian Growth Fund's statement of additional information dated
March 1, 2001, which was previously filed with the Commission via EDGAR on
December 27, 2000 (File No. 811-07731) and is incorporated by reference herein.
5. Kemper Asian Growth Fund's annual report to shareholders for the
fiscal year ended November 30, 1999, which was previously filed with the
Commission via EDGAR on February 1, 2000 (File No. 811-07731) and is
incorporated by reference herein.
<PAGE>
6. Kemper Asian Growth Fund's semi-annual report to shareholders for the
period ended May 31, 2000, which was previously filed with the Commission via
EDGAR on August 8, 2000 (File No. 811-07731) and is incorporated herein by
reference.
7. The financial statements and schedules of Scudder Pacific
Opportunities Fund and Kemper Asian Growth Fund required by Regulation S-X for
the periods specified in Article 3 thereof, which are filed herein.
This Statement of Additional Information is not a prospectus. A Proxy
Statement/Prospectus dated March [ ], 2001 relating to the Reorganization may be
obtained by writing Kemper Asian Growth Fund at 222 South Riverside Drive,
Chicago, IL 60606 or by calling [ ] at 1-800-[ ]. This Statement
of Additional Information should be read in conjunction with the Proxy
Statement/Prospectus.
<PAGE>
<TABLE>
<CAPTION>
Pro Forma
Portfolio of Investments
as of September 30, 2000 (Unaudited)
Scudder Scudder
Pacific Kemper Asian Pro Forma Pacific
Opportunities Growth Fund Combined Opportunities
Fund Par/ Par/Share Par/Share Fund Market
Share Amount Amount Amount Value ($)
--------------------------------------------------------
<S> <C> <C> <C> <C>
Short-term Investments 0.2%
---------------------------
Sallie Mae, 6.28%, 10/02/2000 300,000 300,000
--------------
Total Short-term Investments (Cost of $0, $299,948, and $299,948
respectively)
==============
Short-term Obligations 0.3%
---------------------------
Chase Euro Time Deposit, 6.375%, 10/02/2000 300,000 300,000
--------------
Total Short-term Obligations (Cost of $0, $300,000, and $300,000
respectively)
==============
Common Stocks 99.5%
-------------------
AUSTRALIA 1.7% Davnet Limited 1,352,000 224,600 1,576,600 792,793
E.R.G. Australia Ltd. 210,100 35,000 245,100 1,009,553
--------------
1,802,346
--------------
CHINA 0.1% Soho.Com Inc. 22,200 22,200
--------------
--------------
HONG KONG 32% ASM Pacific Technology Ltd. 688,000 120,000 808,000 1,566,293
Cheung Kong Holdings Ltd. 227,000 59,000 286,000 2,736,781
China Mobile. 1,074,000 188,000 1,262,000 7,162,984
China Unicom 1,176,000 206,000 1,382,000 2,632,019
Dao Heng Bank Group Ltd. 198,000 35,000 233,000 980,254
Ehealthcareasia Limited 209,250 34,800 244,050 10,735
Esprit Holdings Ltd. 2,325,081 312,678 2,637,759 1,983,106
Giordano International Ltd 3,259,424 448,374 3,707,798 1,891,671
HK Land Warrants 232,000 232,000
Hongkong Land Holdings, Ltd. 928,000 111,000 1,039,000 1,707,520
Hutchison Whampoa, Ltd. 444,400 74,800 519,200 5,899,304
JCG Holdings Ltd. 2,066,000 356,000 2,422,000 1,165,921
Legend Holdings Ltd. 2,142,000 386,000 2,528,000 2,033,000
Li and Fund Limited 1,188,000 200,000 1,388,000 2,506,505
New World Development Co., Ltd. 7,929 704 8,633 11,288
Quality Healthcare Asia Ltd. 4,185,000 696,000 4,881,000 1,234,552
SmarTone Telecommunications Holdings Ltd. 1,657 1,657 2,603
--------------
33,524,536
--------------
INDIA 11.4% Cipla Ltd. 28,600 10,300 38,900 427,227
Dr. Reddy's Laboratories 7,700 7,700
Global Tele-Systems Limited 29,350 5,000 34,350 739,877
HDFC Bank Ltd. 100 100 523
Hindalco Industries Ltd. 8,500 8,500
Hindustan Lever Ltd. 265,000 31,000 296,000 1,202,528
Infosys Technologies Ltd. 21,300 3,700 25,000 3,401,885
NIIT Ltd. 36,300 36,300 1,125,394
Ranbaxy Laboratories, Ltd. 71,400 14,900 86,300 989,164
Rediff.Com India Limited Adr 13,200 2,400 15,600 96,525
Satyam Computer Services 341,120 60,000 401,120 3,614,848
State Bank of India 64,600 64,600
--------------
11,597,971
--------------
INDONESIA 0.0% PT Astra Agro Lestari 80 80
--------------
--------------
KOREA 16.8% Hyundai Electronics Inc. 26,600 26,600
Kookmin Credit Card Co., Ltd. 99,500 9,700 109,200 2,890,911
Korea Telecom Corp. 78,300 13,100 91,400 2,632,837
Locus Corporation 391 391
Opicom Co. 7,473 7,473
Samsung Electro-Mechanics Co. 44,370 7,530 51,900 1,500,021
Samsung Electronics Co. 27,316 4,567 31,883 4,948,062
SK Telecom Co., Ltd. 22,470 4,050 26,520 5,480,733
--------------
17,452,564
--------------
MALAYSIA 1.7% SCB Developments Berhad 893,000 893,000 1,198,500
Unisem (M) Berhad 213,000 37,000 250,000 807,157
--------------
2,005,657
--------------
SINGAPORE 9.7% Chartered Semiconductor 72,401 14,050 86,451 4,393,835
DBS Group Holdings Ltd. 299,899 48,978 348,877 3,310,562
Sinapore Airlines Limited 156,000 27,000 183,000 1,479,905
Venture Manufacturing Ltd. 116,000 116,000 1,120,450
<CAPTION>
Pro Forma
Portfolio of Investments
as of September 30, 2000 (Unaudited)
Kemper Asian Pro Forma
Growth Fund Combined
Market Market
Value ($) Value ($)
-----------------------------
<S> <C> <C>
Short-term Investments 0.2%
---------------------------
Sallie Mae, 6.28%, 10/02/2000 299,948 299,948
--------------------------
Total Short-term Investments (Cost of $0, $299,948, and $299,948 299,948 299,948
respectively)
==========================
Short-term Obligations 0.3%
---------------------------
Chase Euro Time Deposit, 6.375%, 10/02/2000 300,000 300,000
--------------------------
Total Short-term Obligations (Cost of $0, $300,000, and $300,000 300,000 300,000
respectively)
==========================
Common Stocks 99.5%
-------------------
AUSTRALIA 1.7% Davnet Limited 131,702 924,495
E.R.G. Australia Ltd. 168,178 1,177,731
--------------------------
299,880 2,102,226
--------------------------
CHINA 0.1% Soho.Com Inc. 129,037 129,037
--------------------------
129,037 129,037
--------------------------
HONG KONG 32% ASM Pacific Technology Ltd. 273,190 1,839,483
Cheung Kong Holdings Ltd. 711,322 3,448,103
China Mobile. 1,253,903 8,416,887
China Unicom 461,051 3,093,070
Dao Heng Bank Group Ltd. 173,277 1,153,531
Ehealthcareasia Limited 1,785 12,520
Esprit Holdings Ltd. 266,689 2,249,795
Giordano International Ltd 260,222 2,151,893
HK Land Warrants 107,880 107,880
Hongkong Land Holdings, Ltd. 204,240 1,911,760
Hutchison Whampoa, Ltd. 992,952 6,892,256
JCG Holdings Ltd. 200,904 1,366,825
Legend Holdings Ltd. 366,357 2,399,357
Li and Fund Limited 421,970 2,928,475
New World Development Co., Ltd. 1,002 12,290
Quality Healthcare Asia Ltd. 205,316 1,439,868
SmarTone Telecommunications Holdings Ltd. 2,603
--------------------------
5,902,060 39,426,596
--------------------------
INDIA 11.4% Cipla Ltd. 153,861 581,088
Dr. Reddy's Laboratories 210,343 210,343
Global Tele-Systems Limited 126,043 865,920
HDFC Bank Ltd. 523
Hindalco Industries Ltd. 150,025 150,025
Hindustan Lever Ltd. 140,673 1,343,201
Infosys Technologies Ltd. 590,937 3,992,822
NIIT Ltd. 1,125,394
Ranbaxy Laboratories, Ltd. 206,422 1,195,586
Rediff.Com India Limited Adr 17,550 114,075
Satyam Computer Services 635,819 4,250,667
State Bank of India 248,747 248,747
--------------------------
2,480,420 14,078,391
--------------------------
INDONESIA 0.0% PT Astra Agro Lestari 10 10
--------------------------
10 10
--------------------------
KOREA 16.8% Hyundai Electronics Inc. 380,460 380,460
Kookmin Credit Card Co., Ltd. 281,827 3,172,738
Korea Telecom Corp. 440,487 3,073,324
Locus Corporation 9,957 9,957
Opicom Co. 59,440 59,440
Samsung Electro-Mechanics Co. 254,567 1,754,588
Samsung Electronics Co. 827,273 5,775,335
SK Telecom Co., Ltd. 987,849 6,468,582
--------------------------
3,241,860 20,694,424
--------------------------
MALAYSIA 1.7% SCB Developments Berhad 1,198,500
Unisem (M) Berhad 140,210 947,367
--------------------------
140,210 2,145,867
--------------------------
SINGAPORE 9.7% Chartered Semiconductor 852,659 5,246,494
DBS Group Holdings Ltd. 540,664 3,851,226
Sinapore Airlines Limited 256,137 1,736,042
Venture Manufacturing Ltd. 1,120,450
</TABLE>
<PAGE>
<TABLE>
----------------------------------
10,304,752 1,649,460 11,954,212
----------------------------------
<S> <C> <C> <C> <C> <C> <C>
TAIWAN 19.4% ASE Test Ltd. 84,700 15,300 100,000 1,778,700 321,300 2,100,000
China Motor Ltd. 716 716 772 772
Compeq Manufacturing Co., Ltd. 482,400 68,600 551,000 2,649,110 376,718 3,025,828
Far Eastern Textile Ltd. 1,954,724 327,354 2,282,078 2,090,713 350,127 2,440,840
Formosa Plastics Corp. 80,770 10,843 91,613 124,039 16,651 140,690
GigaMedia Ltd. 62,400 11,300 73,700 503,100 91,106 594,206
Hon Hai Precision Industry Co., Ltd. 396,080 98,020 494,100 2,605,040 644,683 3,249,723
Pacific Electric Wire & Cable Co., Ltd. 369,225 57,105 426,330 189,793 29,353 219,146
Synnex Technology International Corp. 66,900 20,700 87,600 211,458 65,428 276,886
Taiwan Cement Corp. 3,127,680 525,960 3,653,640 1,797,459 302,266 2,099,725
Taiwan Semiconductor Manufacturing Co. 417,328 71,506 488,834 1,385,719 237,432 1,623,151
United Microelectronics Corp., Ltd. 395,600 67,800 463,400 846,243 145,033 991,276
United Microelectronics Corporation 327,617 54,100 381,717 3,890,451 642,437 4,532,888
Via Technologies Inc. 99,000 19,500 118,500 1,046,230 206,075 1,252,305
Yageo Corp. 1,748,000 1,748,000 1,389,649 1,389,649
----------------------------------
20,507,704 3,429,381 23,937,085
----------------------------------
THAILAND 0.0% TelecomAsia, Rights. 328,421 102,726 431,147 0 0 0
----------------------------------
0 0 0
----------------------------------
UNITED KINGDOM 6.2% HSBC Holdings PLC 369,200 65,600 434,800 5,185,160 921,306 6,106,466
Standard Chartered PLC 92,403 16,528 108,931 1,342,045 240,049 1,582,094
----------------------------------
6,527,205 1,161,355 7,688,560
----------------------------------
UNITED STATES 0.5% Asia Info Holdings, Inc. 28,400 6,200 34,600 537,854 117,392 655,246
----------------------------------
537,854 117,392 655,246
----------------------------------
----------------------------------
Total Common Stocks (Cost of $96,861,169, $20,037,730, and $116,898,899
respectively) 104,260,589 18,551,065 122,811,654
==================================
----------------------------------
Total Investment Portfolio (Cost of $96,861,169, $20,637,678, and
$117,498,847 respectively) 104,260,589 19,151,013 123,411,602
==================================
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINING CONDENSED STATEMENT OF ASSETS AND LIABILITIES
AS OF SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Scudder Pacific Kemper Asian Pro Forma Pro Forma
Opportunities Fund Growth Fund Adjustments Combined
------------------ ------------ ----------- -------------
<S> <C> <C> <C> <C>
Investments, at value $ 104,260,589 $ 19,151,013 $ 123,411,602
Cash 14,167,702 534,312 14,702,014
Other assets less liabilities (365,844) 1,422,473 $ - (2) 1,056,629
------------------ ------------ ----------- -------------
Total Net assets $ 118,062,447 $ 21,107,798 $ - $ 139,170,245
================== ============ =========== =============
Net Assets
Class S Shares $ 118,062,447 $ 118,062,447
Class A Shares $ 12,067,031 $ 12,067,031
Class B Shares $ 7,738,552 $ 7,738,552
Class C Shares $ 1,302,215 $ 1,302,215
Shares Outstanding
Class S Shares 10,510,196 10,510,196
Class A Shares 2,000,180 (925,645) 1,074,535
Class B Shares 1,312,041 (622,945) 689,096
Class C Shares 223,360 (107,401) 115,959
Net Asset Value per Share
Class S Shares $ 11.23 $ 11.23
Class A Shares $ 6.03 $ 11.23
Class B Shares $ 5.90 $ 11.23
Class C Shares $ 5.83 $ 11.23
</TABLE>
<PAGE>
PRO FORMA COMBINING CONDENSED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTH PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Scudder Pacific Kemper Pro Forma Pro Forma
Opportunities Fund Asian Growth Adjustments Combined
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Interest and dividend income $ 1,509,127 177,059 $ -- $ 1,686,186
----------------------------------------------------------------------------
Total Investment Income 1,509,127 177,059 1,686,186
Expenses
Management fees 1,817,560 235,917 (411,182) (3) 1,642,295
12B-1 - 156,968 (4) 156,968
Trustees Fees 91,232 17,824 - (5) 109,056
All other expenses 1,554,861 397,346 (683,962) (6) 1,268,245
----------------------------------------------------------------------------
Total expenses before reductions 3,463,653 808,055 (1,095,144) 3,176,564
Expense reductions - (166,442) 166,442 -
----------------------------------------------------------------------------
Expenses, net 3,463,653 641,613 (928,702) 3,176,564
----------------------------------------------------------------------------
Net investment income (loss) (1,954,526) (464,554) 928,702 (1,490,378)
----------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss)
on Investments:
Net realized gain (loss) from investments 36,262,507 2,277,116 -- 38,539,623
Net unrealized appreciation (depreciation)
of investments and currency (30,682,257) (4,287,003) -- (34,969,260)
----------------------------------------------------------------------------
Net increase in net assets from operations $ 3,625,724 $(2,474,441) $ 928,702 $ 2,079,985
============================================================================
</TABLE>
Notes to Pro Forma Combining Financial Statements
(Unaudited)
September 30, 2000
1. These financial statements set forth the unaudited pro forma condensed
Statement of Assets and Liabilities as of September 30, 2000, and the
unaudited pro forma condensed Statement of Operations for the twelve month
period ended September 30, 2000 for Scudder Pacific Opportunities Fund and
Kemper Asian Growth Fund as adjusted giving effect to the Reorganization as
if it had occurred as of the beginning of the period. These statements have
been derived from the books and records utilized in calculating daily net
asset value for each fund.
2. Represents one-time proxy, legal, accounting and other costs of the
Reorganization of $xxxxxx and $xxxxxx to be borne by Scudder Pacific
Opportunities Fund and the Kemper Asian Growth Fund, respectively.
3. Represents reduction in management fees resulting from theutilization of
Kemper Asian Growth Fund's lower investment management agreement for the
entire year.
4. Represents adoption of a new distribution plan.
5. Reduction in trustee fees resulting from the Reorganization.
6. Represents reduction in other expenses resulting from the utilization of
Scudder Pacfic Opportunities Fund's administration agreement for the entire
year.
<PAGE>
PART C. OTHER INFORMATION
Item 15. Indemnification.
------- ----------------
A policy of insurance covering Scudder Kemper Investments, Inc., its
affiliates including Scudder Investor Services, Inc., and all of the
registered investment companies advised by Scudder Kemper Investments,
Inc. insures the Registrant's directors and officers and others
against liability arising by reason of an alleged breach of duty
caused by any negligent act, error or accidental omission in the scope
of their duties.
Article Tenth of Registrant's Articles of Incorporation states as
follows:
Tenth: Liability and Indemnification
----- -----------------------------
To the fullest extent permitted by the Maryland General
Corporation Law and the Investment Company Act of 1940, no director or
officer of the Corporation shall be liable to the Corporation or to
its stockholders for damages. The limitation on liability applies to
events occurring at the time a person serves as a director or officer
of the Corporation, whether or not such person is a director or
officer at the time of any proceeding in which liability is asserted.
No amendment to these Articles of Amendment and Restatement or repeal
of any of its provisions shall limit or eliminate the benefits
provided to directors and officers under this provision with respect
to any act or omission which occurred prior to such amendment or
repeal.
The Corporation, including its successors and assigns, shall
indemnify its directors and officers and make advance payment of
related expenses to the fullest extent permitted, and in accordance
with the procedures required by Maryland law, including Section 2-418
of the Maryland General Corporation law, as may be amended from time
to time, and the Investment Company Act of 1940. The By-Laws may
provide that the Corporation shall indemnify its employees and/or
agents in any manner and within such limits as permitted by applicable
law. Such indemnification shall be in addition to any other right or
claim to which any director, officer, employee or agent may otherwise
be entitled.
The Corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of
the Corporation or is or was serving at the request of the Corporation
as a director, officer, partner, trustee, employee or agent of another
foreign or domestic corporation, partnership, joint venture, trust or
other enterprise or employee benefit plan against any liability
asserted against and incurred by such person in any such capacity or
arising out of such person's position, whether or not the Corporation
would have had the power to indemnify against such liability.
The rights provided to any person by this Article shall be
enforceable against the Corporation by such person who shall be
presumed to have relied upon such rights in serving or continuing to
serve in the capacities indicated herein. No amendment of these
Articles of Amendment and Restatement shall impair the rights of any
person arising at any time with respect to events occurring prior to
such amendment.
<PAGE>
Nothing in these Articles of Amendment and Restatement shall
be deemed to (i) require a waiver of compliance with any provision of
the Securities Act of 1933, as amended, or the Investment Company Act
of 1940, as amended, or any valid rule, regulation or order of the
Securities and Exchange Commission under those Acts or (ii) protect
any director or officer of the Corporation against any liability to
the Corporation or its stockholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of his or her duties or by reason of his
or her reckless disregard of his or her obligations and duties
hereunder.
Article V of Registrant's Amended and Restated By-Laws states as
follows:
ARTICLE V
INDEMNIFICATION AND INSURANCE
Section 1. Indemnification of Directors and Officers. Any
person who was or is a party or is threatened to be made a party in
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of
the fact that such person is a current or former Director or officer
of the Corporation, or is or was serving while a Director or officer
of the Corporation at the request of the Corporation as a Director,
officer, partner, trustee, employee, agent or fiduciary or another
corporation, partnership, joint venture, trust, enterprise or employee
benefit plan, shall be indemnified by the Corporation against
judgments, penalties, fines, excise taxes, settlements and reasonable
expenses (including attorneys' fees) actually incurred by such person
in connection with such action, suit or proceeding to the fullest
extent permissible under the Maryland General Corporation Law, the
Securities Act of 1933 and the 1940 Act, as such statutes are now or
hereafter in force, except that such indemnity shall not protect any
such person against any liability to the Corporation or any
stockholder thereof to which such person 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
("disabling conduct").
Section 2. Advances. Any current or former Director or
officer of the Corporation claiming indemnification within the scope
of this Article V shall be entitled to advances from the Corporation
for payment of the reasonable expenses incurred by him in connection
with proceedings to which he is a party in the manner and to the
fullest extent permissible under the Maryland General Corporation Law,
the Securities Act of 1933 and the 1940 Act, as such statutes are now
or hereafter in force; provided however, that the person seeking
indemnification shall provide to the Corporation a written affirmation
of his good faith belief that the standard of conduct necessary for
indemnification by the Corporation has been met and a written
undertaking by or on behalf of the Director to repay any such advance
if it is ultimately determined that he is not entitled to
indemnification, and provided further that at least one of the
following additional conditions is met: (1) the person seeking
indemnification shall provide a security in form and amount acceptable
to the Corporation for his undertaking; (2) the Corporation is insured
against losses arising by reason of the advance; or (3) a majority of
a quorum of Directors of the Corporation who are neither "interested
persons" as defined in Section 2(a)(19) of the
<PAGE>
1940 act, as amended, nor parties to the proceeding ("disinterested
non-party Directors") or independent legal counsel, in a written
opinion, shall determine, based on a review of facts readily available
to the Corporation at the time the advance is proposed to be made,
that there is reason to believe that the person seeking
indemnification will ultimately be found to be entitled to
indemnification.
Section 3. Procedure. At the request of any current or
former Director or officer, or any employee or agent whom the
Corporation proposes to indemnify, the Board of Directors shall
determine, or cause to be determined, in a manner consistent with the
Maryland General Corporation Law, the Securities Act of 1933 and the
1940 Act, as such statutes are now or hereafter in fore, whether the
standards required by this Article V have been met; provided, however,
that indemnification shall be made only following: (1) a final
decision on the merits by a court or other body before whom the
proceeding was brought that the person to be indemnified was not
liable by reason of disabling conduct or (2) in the absence of such a
decision, a reasonable determination, based upon a review of the
facts, that the person to be indemnified was not liable by reason of
disabling conduct, by (a) the vote of the majority of a quorum of
disinterested non-party Directors or (b) an independent legal counsel
in a written opinion.
Section 4. Indemnification of Employees and Agents.
Employees and agents who are not officers or Directors of the
Corporation may be indemnified, and reasonable expenses may be
advanced to such employees or agents, in accordance with the
procedures set forth in this Article V to the extent permissible under
the Maryland General Corporation Law, the Securities Act of 1933 and
the 1940 Act, as such statutes are now or thereafter in force, and to
such further extent, consistent with the foregoing, as may be provided
by action of the Board of Directors or by contract.
Section 5. Other Rights. The indemnification provided by
this Article V shall not be deemed exclusive of any other right, in
respect of indemnification or otherwise, to which those seeking such
indemnification may be entitled under any insurance or other
agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action by a Director or officer of the
Corporation in his official capacity and as to action by such person
in another capacity while holding such office or position, and shall
continue as to a person who has ceased to be a Director or officer and
shall inure to the benefit of the heirs, executors and administrators
of such a person.
Section 6. Constituent, Resulting or Surviving
Corporations. For the purposes of this Article V, references to the
"Corporation" shall include all constituent corporations absorbed in a
consolidation or merger as well as the resulting or surviving
corporation so that any person who is or was a Director, officer,
employee or agent of a constituent corporation or is or was serving at
the request of a constituent corporation as a Director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise shall stand in the same position under this
Article V with respect to the resulting or surviving corporation as he
would if he had served the resulting or surviving corporation in the
same capacity.
Item 16. Exhibits.
------- ---------
<PAGE>
(1) (a)(1) Articles of Amendment and Restatement of the
Registrant as of January 24, 1991. (Incorporated by
reference to Post-Effective Amendment No. 56 to the
Registrant's Registration Statement on form N-1A, as
amended (the "Registration Statement").)
(a)(2) Articles Supplementary dated September 17, 1992.
(Incorporated by reference to Post-Effective
Amendment No. 56 to the Registration Statement.)
(a)(3) Articles Supplementary dated December 1, 1992.
(Incorporated by reference to Post-Effective
Amendment No. 56 to the Registration Statement.)
(a)(4) Articles Supplementary dated August 3, 1994.
(Incorporated by reference to Post-Effective
Amendment No. 56 to the Registration Statement.)
(a)(5) Articles Supplementary dated February 20, 1996.
(Incorporated by reference to Exhibit 1(e) to Post-
Effective Amendment No. 46 to the Registration
Statement.)
(a)(6) Articles Supplementary dated September 5, 1996.
(Incorporated by reference to Exhibit 1(f) to Post-
Effective Amendment No. 52 to the Registration
Statement.)
(a)(7) Articles Supplementary dated December 12, 1996.
(Incorporated by reference to Post-Effective
Amendment No. 55 to the Registration Statement.)
(a)(8) Articles Supplementary dated March 3, 1997.
(Incorporated by reference to Post-Effective
Amendment No. 55 to the Registration Statement.)
(a)(9) Articles Supplementary dated December 23, 1997.
(Incorporated by reference to Post-Effective
Amendment No. 65 to the Registration Statement.)
(a)(10) Articles Supplementary dated March 2,1998.
(Incorporated by reference to Post-Effective
Amendment No. 65 to the Registration Statement.)
(a)(11) Articles Supplementary dated March 31, 1998.
(Incorporated by reference to Post-Effective
Amendment No. 65 to the Registration Statement.)
(a)(12) Articles of Transfer from Scudder Institutional
Fund, Inc. dated April 3, 1998. (Incorporated by
reference to Post-Effective Amendment No. 67 to the
Registration Statement.)
<PAGE>
(a)(13) Articles Supplementary dated June 7, 1999.
(Incorporated by reference to Post-Effective
Amendment No. 72 to the Registration
Statement.)
(a)(14) Articles Supplementary dated March 31, 2000.
(Incorporated by reference to Post-Effective
Amendment No. 79 to the Registration
Statement.)
(2) (b)(1) Amended and Restated By-Laws of the
Registrant dated March 4, 1991.
(Incorporated by reference to Post-Effective
Amendment No. 56 to the Registration
Statement.)
(b)(2) Amended and Restated By-Laws of the
Registrant dated September 20, 1991.
(Incorporated by reference to Post-Effective
Amendment No. 56 to the Registration
Statement.)
(b)(3) Amended and Restated By-Laws of the
Registrant dated December 12, 1991.
(Incorporated by reference to Post-Effective
Amendment No. 56 to the Registration
Statement.)
(b)(4) Amended and Restated By-Laws of the
Registrant dated September 4, 1996.
(Incorporated by reference to Post-Effective
Amendment No. 55 to the Registration
Statement.)
(b)(5) Amended and Restated By-Laws of the
Registrant dated December 3, 1997.
(Incorporated by reference to Post-Effective
Amendment No. 59 to the Registration
Statement.)
(b)(6) Amended and Restated By-Laws of the
Registrant dated February 7, 2000 is
incorporated by reference to Post-Effective
Amendment No. 80 to the Registration
Statement.
(3) Inapplicable.
(4) Form of Agreement and Plan of Reorganization
is filed herein as Exhibit A to Part A.
(5) Inapplicable.
(6) (d)(1) Investment Management Agreement between the
Registrant, on behalf of Scudder
International Fund, and Scudder Kemper
Investments, Inc. dated September 7, 1998.
(Incorporated by reference to Post-Effective
Amendment No. 67 to the Registration
Statement.)
(d)(2) Investment Management Agreement between the
Registrant, on behalf of Scudder Latin
America Fund, and Scudder Kemper
Investments, Inc. dated September 7, 1998.
(Incorporated by reference to Post-Effective
Amendment No. 67 to the Registration
Statement.)
<PAGE>
(d)(3) Investment Management Agreement between the
Registrant, on behalf of Scudder Pacific
Opportunities Fund, and Scudder Kemper
Investments, Inc. dated September 7, 1998.
(Incorporated by reference to Post-Effective
Amendment No. 67 to the Registration
Statement.)
(d)(4) Investment Management Agreement between the
Registrant, on behalf of Scudder Greater
Europe Growth Fund, and Scudder Kemper
Investments, Inc. dated September 7, 1998.
(Incorporated by reference to Post-Effective
Amendment No. 67 to the Registration
Statement.)
(d)(5) Investment Management Agreement between the
Registrant, on behalf of Scudder Emerging
Markets Growth Fund, and Scudder Kemper
Investments, Inc. dated September 7, 1998.
(Incorporated by reference to Post-Effective
Amendment No. 67 to the Registration
Statement.)
(d)(6) Investment Management Agreement between the
Registrant, on behalf of Scudder
International Growth and Income Fund, and
Scudder Kemper Investments, Inc. dated
September 7, 1998. (Incorporated by
reference to Post-Effective Amendment No. 67
to the Registration Statement.)
(d)(7) Investment Management Agreement between the
Registrant, on behalf of Scudder
International Value Fund, and Scudder Kemper
Investments, Inc. dated September 7, 1998.
(Incorporated by reference to Post-Effective
Amendment No. 67 to the Registration
Statement.)
(d)(8) Investment Management Agreement between the
Registrant, on behalf of Scudder
International Growth Fund, and Scudder
Kemper Investments, Inc. dated September 7,
1998. (Incorporated by reference to Post-
Effective Amendment No. 67 to the
Registration Statement.)
(d)(9) Form of Investment Management Agreement
between the Registrant, on behalf of Scudder
International Fund, Inc. and Scudder Kemper
Investments, Inc. dated August 28, 2000.
(Incorporated by reference to Post-Effective
Amendment No. 80 to the Registration
Statement.)
(d)(10) Amended and Restated Investment Management
Agreement between the Registrant, on behalf
of Scudder Pacific Opportunities Fund and
Scudder Kemper Investments, Inc. dated May
8, 2000. (Incorporated by reference to Post-
Effective Amendment No. 80 to the
Registration Statement.)
<PAGE>
(7) (e)(1) Underwriting Agreement between the
Registrant and Scudder Investor Services,
Inc. dated September 7, 1998. (Incorporated
by reference to Post-Effective Amendment No.
67 to the Registration Statement.)
(e)(2) Underwriting Agreement between the
Registrant and Scudder Investor Services,
Inc. dated May 8, 2000. (Incorporated by
reference to Post-Effective Amendment No. 80
to the Registration Statement.)
(8) Inapplicable.
(9) (g)(1) Custodian Contract between the Registrant,
on behalf of Scudder Latin America Fund, and
Brown Brothers Harriman & Co. dated November
25, 1992. (Incorporated by reference to
Post-Effective Amendment No. 56 to the
Registration Statement.)
(g)(2) Custodian Contract between the Registrant,
on behalf of Scudder Pacific Opportunities
Fund, and Brown Brothers Harriman & Co.
dated November 25, 1992. (Incorporated by
reference to Post-Effective Amendment No. 56
to the Registration Statement.)
(g)(3) Custodian Contract between the Registrant,
on behalf of Scudder Greater Europe Growth
Fund, and Brown Brothers Harriman & Co.
dated October 10, 1994. (Incorporated by
reference to Post-Effective Amendment No. 44
to the Registration Statement.)
(g)(4) Custodian Contract between the Registrant
and Brown Brothers Harriman & Co. dated
March 7, 1995. (Incorporated by reference to
Post-Effective Amendment No. 55 to the
Registration Statement.)
(g)(5) Fee schedule for Exhibit (9)(g)(4).
(Incorporated by reference to Post-Effective
Amendment No. 55 to the Registration
Statement.)
(g)(6) Master Subcustodian Agreement between Brown
Brothers Harriman & Co. and Morgan Guaranty
Trust Company of New York, Brussels office,
dated November 15, 1976. (Incorporated by
reference to Post-Effective Amendment No. 56
to the Registration Statement.)
(g)(7) Fee schedule for Exhibit (9)(g)(6).
(Incorporated by reference to Post-Effective
Amendment No. 56 to the Registration
Statement.)
(g)(8) Subcustodian Agreement between Brown
Brothers Harriman & Co. and The Bank of New
York, London office, dated January 30, 1979.
(Incorporated by reference to Post-Effective
Amendment No. 56 to the Registration
Statement.)
(g)(9) Fee schedule for Exhibit (9)(g)(8).
(Incorporated by reference to Post-Effective
Amendment No. 56 to the Registration
Statement.)
<PAGE>
(g)(10) Master Subcustodian Agreement between Brown
Brothers Harriman & Co. and The Chase
Manhattan Bank, N.A., Singapore office,
dated June 9, 1980. (Incorporated by
reference to Post-Effective Amendment No.
56 to the Registration Statement.)
(g)(11) Fee schedule for Exhibit (9)(g)(10).
(Incorporated by reference to Post-
Effective Amendment No. 56 to the
Registration Statement.).
(g)(12) Master Subcustodian Agreement between Brown
Brothers Harriman & Co. and The Chase
Manhattan Bank, N.A., Hong Kong office,
dated June 4, 1979. (Incorporated by
reference to Post-Effective Amendment No.
56 to the Registration Statement.)
(g)(13) Fee schedule for Exhibit (9)(g)(12).
(Incorporated by reference to Post-
Effective Amendment No. 56 to the
Registration Statement.)
(g)(14) Master Subcustodian Agreement between Brown
Brothers Harriman & Co. and Citibank, N.A.,
New York office, dated July 16, 1981.
(Incorporated by reference to Post-
Effective Amendment No. 56 to the
Registration Statement.)
(g)(15) Fee schedule for Exhibit (9)(g)(14).
(Incorporated by reference to Post-
Effective Amendment No. 56 to the
Registration Statement.)
(10) (a) Rule 12(b)-1 and Administrative Services
Plan with respect to Scudder International
Fund Class R shares. (Incorporated by
reference to Post-Effective Amendment No.
72 to the Registration Statement.)
(b)(1) Plan with respect to Scudder International
Fund pursuant to Rule 18f-3. (Incorporated
by reference to Post-Effective Amendment
No. 58 to the Registration Statement.)
(b)(2) Amended Plan with respect to Scudder
International Fund pursuant to Rule 18f-3
dated June 7, 1999. (Incorporated by
reference to Post-Effective Amendment No.
72 to the Registration Statement.)
(b)(3) Plan with respect to Scudder Latin America
Fund pursuant to Rule 18f-3. (Incorporated
by reference to Post-Effective Amendment
No. 80 to the Registration Statement.)
(b)(4) Plan with respect to Scudder Pacific
Opportunities Fund pursuant to Rule 18f-3.
(Incorporated by reference to Post-
Effective Amendment No. 80 to the
Registration Statement.)
(b)(5) Plan with respect to Scudder Greater Europe
Growth Fund pursuant to Rule 18f-3.
(Incorporated by reference to Post-
Effective Amendment No. 80 to the
Registration Statement.)
<PAGE>
(b)(6) Plan with respect to Scudder Emerging
Markets Growth Fund pursuant to Rule 18f-3.
(Incorporated by reference by Post-
Effective Amendment No. 80 to the
Registration Statement.)
(b)(7) Amended and Restated Plan with respect to
Scudder International Fund pursuant to Rule
18f-3. (Incorporated by reference to Post-
Effective Amendment No. 80 to the
Registration Statement.)
(b)(8) Amended and Restated Plan with respect to
Scudder Pacific Opportunities Fund pursuant
to Rule 18f-3. (Incorporated by reference
to Post-Effective Amendment No. 80 to the
Registration Statement.)
(b)(9) Amended and Restated Plan with respect to
Scudder Latin America Fund pursuant to Rule
18f-3. (Incorporated by reference to Post-
Effective Amendment No. 80 to the
Registration Statement.)
(b)(10) Amended and Restated Plan with respect to
Scudder Greater Europe Growth Fund pursuant
to Rule 18f-3. (Incorporated by reference
to Post-Effective Amendment No. 80 to the
Registration Statement.)
(b)(11) Amended and Restated Plan with respect to
Scudder Emerging Markets Growth Fund
pursuant to Rule 18f-3. (Incorporated by
reference to Post-Effective Amendment No.
80 to the Registration Statement.)
(b)(12) Amended and Restated Plan with respect to
Scudder International Fund pursuant to Rule
18f-3. (Incorporated by reference to Post-
Effective Amendment No. 80 to the
Registration Statement.)
(b)(13) Scudder Funds Amended and Restated Multi-
Distribution System Plan is filed herewith.
(11) Opinion and Consent of Dechert is filed
herewith.
(12) Opinion and Consent of Willkie, Farr &
Gallagher is to be filed by post-effective
amendment.
(13) (h)(1) Transfer Agency and Service Agreement
between the Registrant and Scudder Service
Corporation dated October 2, 1989.
(Incorporated by reference to Post-
Effective Amendment No. 56 to the
Registration Statement.)
(h)(2) Fee schedule for Exhibit (13)(h)(1).
(Incorporated by reference to Post-
Effective Amendment No. 56 to the
Registration Statement.)
<PAGE>
(h)(3) Service Agreement between Copeland Associates, Inc. and
Scudder Service Corporation dated June 8, 1995.
(Incorporated by reference to Post-Effective Amendment
No. 45 to the Registration Statement.)
(h)(4) Letter Agreement between the Registrant and Cazenove,
Inc. dated January 23, 1978, with respect to the
pricing of securities. (Incorporated by reference to
Post-Effective Amendment No. 56 to the Registration
Statement.)
(h)(5) COMPASS and TRAK 2000 Service Agreement between the
Registrant and Scudder Trust Company dated October 1,
1995. (Incorporated by reference to Exhibit 9(c)(3) to
Post-Effective Amendment No. 47 to the Registration
Statement.)
(h)(6) Shareholder Services Agreement between the Registrant
and Charles Schwab & Co., Inc. dated June 1, 1990.
(Incorporated by reference to Post-Effective Amendment
No. 56 to the Registration Statement.)
(h)(7) Administrative Services Agreement between the
Registrant and McGladrey & Pullen, Inc. dated September
30, 1995. (Incorporated by reference to Exhibit 9(d)(2)
to Post-Effective Amendment No. 47 to the Registration
Statement.)
(h)(8) Fund Accounting Services Agreement between the
Registrant, on behalf of Scudder Greater Europe Growth
Fund, and Scudder Fund Accounting Corporation dated
October 10, 1994. (Incorporated by reference to Post-
Effective Amendment No. 44 to the Registration
Statement.)
(h)(9) Fund Accounting Services Agreement between the
Registrant, on behalf of Scudder International Fund,
and Scudder Fund Accounting Corporation dated April 12,
1995. (Incorporated by reference to Post-Effective
Amendment No. 45 to the Registration Statement.)
(h)(10) Fund Accounting Services Agreement between the
Registrant, on behalf of Scudder Latin America Fund
dated May 17, 1995. (Incorporated by reference to
Exhibit 9(e)(3) to Post-Effective Amendment No. 47 to
the Registration Statement.)
(h)(11) Fund Accounting Services Agreement between the
Registrant, on behalf of Scudder Pacific Opportunities
Fund dated May 5, 1995. (Incorporated by reference to
Exhibit 9(e)(4) to Post-Effective Amendment No. 47 to
the Registration Statement.)
(h)(12) Fund Accounting Services Agreement between the
Registrant, on behalf of Scudder Emerging Markets
Growth Fund dated May 8, 1996. (Incorporated by
reference to Exhibit 9(e)(5) to Post-Effective
Amendment No. 49 to the Registration Statement.)
<PAGE>
(h)(13) Fund Accounting Services Agreement between the
Registrant, on behalf of Scudder International Growth
and Income Fund dated June 3, 1997. (Incorporated by
reference to Post-Effective Amendment No. 56 to the
Registration Statement.)
(h)(14) Fund Accounting Services Agreement between the
Registrant, on behalf of Scudder International Growth
Fund dated June 30, 1998. (Incorporated by reference to
Post-Effective Amendment No. 67 to the Registration
Statement.)
(h)(15) Fund Accounting Services Agreement between the
Registrant, on behalf of Scudder International Value
Fund dated June 30, 1998. (Incorporated by reference to
Post-Effective Amendment No. 67 to the Registration
Statement.)
(h)(16) Administrative Services Agreement between Scudder
International Fund, Inc., on behalf of Scudder
International Fund, and Scudder Investors Service
Company. (Incorporated by reference to Post-Effective
Amendment No. 72 to the Registration Statement.)
(h)(17) Fee schedule for Exhibit (13)(h)(16). (Incorporated by
reference to Post-Effective Amendment No. 72 to the
Registration Statement.)
(h)(18) Agency Agreement between Scudder International Fund,
Inc., and Kemper Service Company dated June 7, 1999.
(Incorporated by reference to Post-Effective Amendment
No. 72 to the Registration Statement.)
(h)(19) Form of Administrative Agreement between the Registrant
on behalf of Scudder International Fund, Inc. and
Scudder Kemper Investments, Inc. dated October 2, 2000.
(Incorporated by reference to Post-Effective Amendment
No. 80 to the Registration Statement.)
(14) Consents of Independent Accountants are filed herewith.
(15) Inapplicable.
(16) Powers of Attorney are filed herewith.
(17) Form of Proxy is filed herewith.
Item 17. Undertakings.
-------- -------------
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this registration statement by any
person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act of 1933 (the "1933
Act") [17 CFR 230.145c], the reoffering
<PAGE>
prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other
items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to
the registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
(3) The undersigned Registrant undertakes to file, by post-effective
amendment, an opinion of counsel supporting the tax consequences of
the proposed reorganization within a reasonable time after receipt of
such opinion.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, Scudder International Fund, Inc. has duly caused
this Registration Statement on Form N-14 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston and the
Commonwealth of Massachusetts on the 28th day of December, 2000.
SCUDDER INTERNATIONAL FUND, INC.
By: /s/ Linda C. Coughlin
---------------------
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form N-14 has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Linda C. Coughlin President and Director December 28, 2000
---------------------------
Linda C. Coughlin
/s/ Henry P. Becton, Jr. * Director December 28, 2000
---------------------------
Henry P. Becton, Jr.
/s/ Dawn-Marie Driscoll * Director December 28, 2000
---------------------------
Dawn-Marie Driscoll
/s/ Edgar R. Fiedler * Director December 28, 2000
---------------------------
Edgar R. Fiedler
/s/ Keith R. Fox * Director December 28, 2000
---------------------------
Keith R. Fox
/s/ Joan E. Spero * Director December 28, 2000
---------------------------
Joan E. Spero
/s/ Jean Gleason Stromberg* Director December 28, 2000
---------------------------
Jean Gleason Stromberg
/s/ Jean C. Tempel * Director December 28, 2000
---------------------------
Jean C. Tempel
/s/ Steven Zaleznick * Director December 28, 2000
---------------------------
Steven Zaleznick
/s/ John R. Hebble Treasurer (Principal Financial December 28, 2000
--------------------------- and Accounting Officer)
John R. Hebble
*By: /s/ Joseph R. Fleming December 28, 2000
----------------------
Joseph R. Fleming, Attorney-in-fact
*Executed pursuant to powers of attorney filed herein as an exhibit to the
Registrant's Registration Statement on Form N-14.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SCUDDER INTERNATIONAL FUND, INC.
<PAGE>
SCUDDER INTERNATIONAL FUND, INC.
EXHIBIT INDEX
Exhibit 10(b)(13) Scudder Funds Amended and Restated Multi-Distribution System
Plan
Exhibit 11 Opinion and Consent of Dechert
Exhibit 14 Consents of Independent Accountants
Exhibit 16 Powers of Attorney
Exhibit 17 Form of Proxy
