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As filed with the Securities and Exchange Commission
on March 3, 2000.
Securities Act File No.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |x|
Pre-Effective Amendment No. |_| Post-Effective Amendment No. |_|
SCUDDER INTERNATIONAL FUND, INC.
(Exact Name of Registrant as Specified in Charter)
345 Park Avenue, New York, NY 10154
(Address of Principal Executive Offices) (Zip Code)
John Millette
Scudder Kemper Investments, Inc.
Two International Place
Boston, MA 02110-4103
(Name and Address of Agent for Service)
(617) 295-1000
(Registrant's Area Code and Telephone Number)
with copies to:
Caroline Pearson, Esq. Sheldon A. Jones, Esq.
Scudder Kemper Investments, Inc. Dechert Price & Rhoads
Two International Place Ten Post Office Square - South
Boston, MA 02110-4103 Boston, MA 02109-4603
Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration
Statement is declared effective.
Title of Securities Being Registered:
Capital Stock ($.01 par value)
of Scudder International Fund, a series of the Registrant
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It is proposed that this filing will become effective
on April 3, 2000 pursuant to Rule 488 under the Securities Act of 1933.
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No filing fee is required because the Registrant has previously registered an
indefinite number of its shares under the Securities Act of 1933, as amended,
pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended.
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PART A
INFORMATION REQUIRED IN THE PROXY STATEMENT/PROSPECTUS
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
SCUDDER INTERNATIONAL FUND, INC.
SCUDDER INTERNATIONAL GROWTH AND INCOME FUND
Please take notice that a Special Meeting of Shareholders (the "Meeting")
of Scudder International Growth and Income Fund (the "Fund"), a series of
Scudder International Fund, Inc. (the "Corporation"), will be held at the
offices of Scudder Kemper Investments, Inc., Floor 13, Two International Place,
Boston, MA 02110-4103, on July 13, 2000, at 3:00 p.m., Eastern time, for the
following purposes:
Proposal 1: To elect Directors of the Corporation;
Proposal 2: To approve an Agreement and Plan of Reorganization whereby all
of the issued and outstanding shares of capital stock of the
Fund will be reclassified into the International Shares class
of the Corporation's Scudder International Fund series (the
"Reorganization"), which will be effected by an amendment to
the Corporation's charter; and
Proposal 3: To ratify the selection of PricewaterhouseCoopers LLP as the
independent accountants for the Fund for the Fund's current
fiscal year.
The appointed proxies will vote in their discretion on any other business
that may properly come before the Meeting or any adjournments thereof.
Holders of record of shares of the Fund at the close of business on April
17, 2000 are entitled to vote at the Meeting and at any adjournments thereof.
In the event that the necessary quorum to transact business or the vote
required to approve any Proposal is not obtained at the Meeting, the persons
named as proxies may propose one or more adjournments of the Meeting in
accordance with applicable law to permit further solicitation of proxies. Any
such adjournment as to a matter will require the affirmative vote of the holders
of a majority of the Fund's shares present in person or by proxy at the Meeting.
The persons named as proxies will vote FOR any such adjournment those proxies
which they are entitled to vote in favor of that Proposal and will vote AGAINST
any such adjournment those proxies to be voted against that Proposal.
By Order of the Board,
[Signature]
John Millette,
Secretary
[date]
IMPORTANT -- We urge you to sign and date the enclosed proxy card(s) and return
it in the enclosed envelope which requires no postage (or to take advantage of
the electronic or telephonic voting procedures described on the proxy
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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.
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Table of Contents
Introduction....................
Proposal 1: Election of Trustees/Directors for the Acquired
Trust/Corporation........
Nominees for Election..............
Trustees/Directors Not Standing for Re-election............
Responsibilities of the Board -- Board and Committee Meetings........
Audit Committee........
Committee on Independent Trustees/Directors........
Attendance............
Honorary Trustees/Directors.........
Officers.............
Compensation of Trustees/Directors and Officers.........
Proposal 2: Approval of Agreement and Plan of Reorganization......
I. SYNOPSIS.........
Introduction.........
Background of the Reorganization...........
Reasons for the Proposed Transaction; Board Approval.......
Investment Objectives, Policies and Restrictions of the
Funds........
Portfolio Turnover..........
Performance...........
Investment Manager; Fees and Expenses......
Administrative Fee..........
Comparison of Expenses.........
Financial Highlights.........
Distribution of Shares........
Purchase, Redemption and Exchange Information.........
Dividends and other Distributions..........
Tax Consequences........
II. PRINCIPAL RISK FACTORS......
III. THE PROPOSED TRANSCTION..........
Description of the Plan........
Board Approval of the Proposed Transaction......
Description of the Securities to be Issued.....
Federal Income Tax Consequences.........
Capitalization...........
Proposal 3: Ratification or Rejection of the Selection of Independent
Accountants
Additional Information
Exhibit A
Exhibit B
Appendix 1
Appendix 2
Part B: Statement of Additional Information
Part C: Other Information
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PROXY STATEMENT/PROSPECTUS
[DATE]
Relating to the reorganization of the issued and outstanding shares of
SCUDDER INTERNATIONAL GROWTH AND INCOME FUND (the "Acquired Fund"),
a separate series of
SCUDDER INTERNATIONAL FUND, INC. (the "Corporation")
345 Park Avenue
New York, New York 10154
(800) 728-3337
into shares of
the International Shares class of
SCUDDER INTERNATIONAL FUND (the "Acquiring Fund"),
a separate series of the Corporation
345 Park Avenue
New York, New York 10154
(800) 728-3337
INTRODUCTION
This Proxy Statement/Prospectus is being furnished to shareholders of the
Acquired Fund in connection with three proposals (each a "Proposal"). Proposal 1
describes the election of Directors, and Proposal 3 proposes the ratification of
the Acquired Fund's accountants.
In Proposal 2, shareholders are asked to approve a proposed reorganization
in which all of the issued and outstanding shares of capital stock of the
Acquired Fund will be reclassified into shares of the Acquiring Fund and,
accordingly, all of assets and liabilities of the Acquired Fund would be
acquired by the Acquiring Fund, as described more fully below (the
"Reorganization"). As a result of the Reorganization, each shareholder of the
Acquired Fund would receive shares of the International Shares class of the
Acquiring Fund having an aggregate net asset value equal to the aggregate net
asset value of such shareholder's shares of the Acquired Fund held as of the
close of business on the business day preceding the closing of the
Reorganization (the "Valuation Date"). Shareholders of the Acquired Fund will
vote on an Agreement and Plan of Reorganization (the "Plan") pursuant to which
the Reorganization would be consummated. A copy of the Plan is attached hereto
as Exhibit A. The closing of the Reorganization (the "Closing") is contingent
upon shareholder approval of the Plan. The Reorganization is expected to occur
on or about August 28, 2000.
Proposals 1 and 2 relate to a restructuring program proposed by Scudder
Kemper Investments, Inc. ("Scudder Kemper") and described in more detail below.
It is being proposed to shareholders of AARP International Stock Fund,
another fund advised by Scudder Kemper, the investment manager for each of the
Acquiring Fund and the Acquired Fund, that the Acquiring Fund acquire the assets
of that other fund. Each of the closing of this other acquisition and the
Closing is contingent upon the other.
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.
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In the descriptions of the Proposals below, the word "fund" is sometimes
used to mean investment companies or series thereof in general, and not the
Acquired Fund whose proxy statement this is. In addition, for simplicity,
actions are described in this Proxy Statement as being taken by either the
Acquired Fund or the Acquiring Fund (each a "Fund" and collectively the
"Funds"), although all actions are actually taken by the Corporation, on behalf
of the applicable Fund.
This Proxy Statement/Prospectus sets forth concisely the information about
the Acquiring Fund that a prospective investor should know before investing and
should be retained for future reference. For a more detailed discussion of the
investment objective, policies, restrictions and risks of the Acquiring Fund,
see the Acquiring Fund's prospectus, dated January 1, 2000, as supplemented from
time to time, which is included herewith and incorporated herein by reference.
For a more detailed discussion of the investment objectives, policies,
restrictions and risks of the Acquired Fund, see the Acquired Fund's prospectus,
dated January 1, 2000, as supplemented from time to time, which is incorporated
herein by reference and a copy of which may be obtained upon request and without
charge by calling or writing the Acquired Fund at the telephone number or
address set forth on the preceding page.
The Acquiring Fund's Statement of Additional Information, dated January 1,
2000, is incorporated herein by reference and may be obtained upon request and
without charge by calling or writing the Acquiring Fund at the telephone number
or address set forth on the preceding page. A Statement of Additional
Information dated ___________________, containing additional information about
the Reorganization and the parties thereto has been filed with the Securities
and Exchange Commission (the "SEC" or the "Commission") and is incorporated by
reference into this Proxy Statement/Prospectus. A copy of the Statement of
Additional Information relating to the Reorganization is available upon request
and without charge by calling or writing the Acquiring Fund at the telephone
number or address set forth on the preceding page. Shareholder inquiries
regarding either Fund may be made by calling (800) 728-3337. The information
contained herein concerning the Acquired Fund has been provided by, and is
included herein in reliance upon, the Acquired Fund. The information contained
herein concerning the Acquiring Fund has been provided by, and is included
herein in reliance upon, the Acquiring Fund.
The Acquiring Fund and the Acquired Fund are diversified series of capital
stock of the Corporation. The Corporation is an open-end management investment
company organized as a Maryland corporation.
The Board of Directors (except as otherwise noted, "Directors" refers to
the Directors of the Corporation and "Board" refers to the Board of Directors of
the Corporation) is soliciting proxies from shareholders of the Acquired Fund
are being solicited, on behalf of the Acquired Fund, for the Meeting of
Shareholders to be held on July 13, 2000, at Scudder Kemper's offices, at Floor
13, Two International Place, Boston, MA 02110-4103, at 3:00 p.m. (Eastern time),
or at such later time made necessary by adjournment (the "Meeting").
The Board of Directors recommends that shareholders of the Acquired Fund
vote for the nominees listed in Proposal 1, and for Proposals 2 and 3.
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PROPOSAL 1: ELECTION OF DIRECTORS FOR THE CORPORATION
At the Meeting, shareholders will be asked to elect nine individuals to
constitute the Board of Directors of the Corporation. These individuals were
nominated after a careful and deliberate selection process by the present Board
of Directors of the Corporation.
The nominees for election, who are listed below, include seven persons who
currently serve as Independent Directors (as defined below) of the Corporation
or as independent trustees or directors of other no-load funds advised by
Scudder Kemper and who have no affiliation with Scudder Kemper or AARP. The
nominees listed below are also being nominated for election as trustees or
directors of most of the other no-load funds advised by Scudder Kemper.
Currently, five different boards of trustees or directors are responsible
for overseeing different groups of no-load funds advised by Scudder Kemper. As
part of a broader restructuring effort described below under Proposal 2, Scudder
Kemper has recommended, and the Board of Directors has agreed, that shareholder
interests can more effectively be represented by a single board with
responsibility for overseeing substantially all of the Scudder no-load funds.
Creation of a single, consolidated board should also provide certain
administrative efficiencies and potential future cost savings for both the Funds
and Scudder Kemper.
Election of each of the listed nominees for Director on the Board of the
Corporation requires the affirmative vote of a plurality of the votes cast at
the Meeting, in person or by proxy. The persons named as proxies on the enclosed
proxy card will vote for the election of the nominees named below unless
authority to vote for any or all of the nominees is withheld in the proxy. Each
Director so elected will serve as a Director of the Corporation until the next
meeting of shareholders, if any, called for the purpose of electing Directors
and until the election and qualification of a successor or until such Director
sooner dies, resigns or is removed as provided in the governing documents of the
Corporation. Each of the nominees has indicated that he or she is willing to
serve as a Director. 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 Directors may
recommend. The following paragraphs and table set forth information concerning
the nominees and the Directors not standing for re-election. Each nominee's or
Director's age is in parentheses after his or her name. Unless otherwise noted,
(i) each of the nominees and Directors has engaged in the principal occupation
listed in the following paragraphs and table for more than five years, but not
necessarily in the same capacity, and (ii) the address of each nominee is c/o
Scudder Kemper Investments, Inc., Two International Place, Boston, MA
02110-4103.
Nominees for Election as Directors:
Henry P. Becton, Jr. (56)
Henry P. Becton, Jr. graduated from Yale University in 1965, where he was
elected to Phi Beta Kappa and was Chairman of the Yale Broadcasting Corporation.
He received his J.D. degree from Harvard Law School in 1968. He joined the staff
of WGBH Educational Foundation in 1970, was appointed General Manager in 1978,
and was elected President and General Manager in 1984. Mr. Becton is a member of
the PBS Board of Directors, a Trustee of American Public Television, the New
England Aquarium, the Boston Museum of Science, Concord Academy, and the
Massachusetts Corporation for Educational Telecommunications, an Overseer of the
Boston Museum of Fine Arts, and a member of the Board of Governors of the Banff
International Television Festival Foundation. He is also a Director of Becton
Dickinson and Company and A.H. Belo Company, a Trustee of the Committee for
Economic
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Development, and a member of the Board of Visitors of the Dimock Community
Health Center, the Dean's Council of Harvard University's Graduate School of
Education, and the Massachusetts Bar. Mr. Becton has served as a trustee of
various mutual funds advised by Scudder Kemper since 1990.
Linda C. Coughlin (48)*
Linda C. Coughlin, a Managing Director of Scudder Kemper, is head of Scudder
Kemper's U.S. Retail Mutual Funds Business. Ms. Coughlin joined Scudder Kemper
in 1986 and was a member of the firm's Board of Directors. She currently
oversees the marketing, service and operations of Scudder Kemper retail
businesses in the United States, which include the Scudder, Kemper, AARP, and
closed-end fund families, and the direct and intermediary channels. She also
serves as Chairperson of the AARP Investment Program from Scudder and as a
Trustee of the Program's mutual funds. Ms. Coughlin is also a member of the
Mutual Funds Management Group. Previously, she served as a regional Marketing
Director in the retail banking division of Citibank and at the American Express
Company as Director of Consumer Marketing for the mutual fund group. Ms.
Coughlin received a B.A. degree in economics (summa cum laude) from Fordham
University. Ms. Coughlin has served on the boards of various funds advised by
Scudder Kemper, including the AARP Investment Program Funds, since 1996.
Dawn-Marie Driscoll (53)
Dawn-Marie Driscoll is an Executive Fellow and Advisory Board member of the
Center for Business Ethics at Bentley College, one of the nation's leading
institutes devoted to the study and practice of business ethics. Ms. Driscoll is
also president of Driscoll Associates, a consulting firm. She is a member of the
Board of Governors of the Investment Company Institute and serves as Chairman of
the Directors Services Committee. She has been a director, trustee and overseer
of many civic and business institutions, including The Massachusetts Bay United
Way and Regis College. Ms. Driscoll was formerly a law partner at Palmer & Dodge
in Boston and served for over a decade as Vice President of Corporate Affairs
and General Counsel of Filene's, the Boston-based department store chain. Ms.
Driscoll received a B.A. from Regis College, a J.D. from Suffolk University Law
School, a D.H.L. (honorary) from Suffolk University and a D.C.S. (honorary) from
Bentley College Graduate School of Business. Ms. Driscoll has served as a
trustee of various mutual funds advised by Scudder Kemper since 1987.
Edgar R. Fiedler (70)
Edgar R. Fiedler is Senior Fellow and Economic Counsellor at The Conference
Board. He served as the Board's Vice President, Economic Research from 1975 to
1986 and as Vice President and Economic Counsellor from 1986 to 1996. Mr.
Fiedler's business experience includes positions at Eastman Kodak in Rochester
(1956-59), Doubleday and Company in New York City (1959-60), and Bankers Trust
Company in New York City (1960-69). He also served as Assistant Secretary of the
Treasury for Economic Policy from 1971 to 1975. Mr. Fiedler graduated from the
University of Wisconsin in 1951. He received his M.B.A. from the University of
Michigan and his doctorate from New York University. During the 1980's, Mr.
Fiedler was an Adjunct Professor of Economics at the Columbia University
Graduate School of Business. From 1990 to 1991, he was the Stephen Edward Scarff
Distinguished Professor at Lawrence University in Wisconsin. Mr. Fiedler is a
Director of The Stanley Works, Harris Insight Funds, Brazil Fund, and PEG
Capital Management, Inc. He has served as a board member of various mutual funds
advised by Scudder Kemper, including the AARP Investment Program Funds, since
1984.
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Keith R. Fox (46)
Keith R. Fox is the managing partner of the Exeter Group of Funds, a series of
private equity funds with offices in New York and Boston, which he founded in
1986. The Exeter Group invests in a wide range of private equity situations,
including venture capital, expansion financings, recapitalizations and
management buyouts. Prior to forming Exeter, Mr. Fox was a director and vice
president of BT Capital Corporation, a subsidiary of Bankers Trust New York
Corporation organized as a small business investment company and based in New
York City. Mr. Fox graduated from Oxford University in 1976, and in 1981
received an M.B.A. degree from the Harvard Business School. Mr. Fox is also a
qualified accountant. He is a board member and former Chairman of the National
Association of Small Business Investment Companies, and a director of Golden
State Vintners, K-Communications, Progressive Holding Corporation and Facts On
File, as well as a former director of over twenty companies. Mr. Fox has served
as a trustee of various mutual funds advised by Scudder Kemper since 1996.
Joan Edelman Spero (55)
Joan E. Spero is the president of the Doris Duke Charitable Foundation, a
position to which she was named in January 1997. From 1993 to 1997, Ms. Spero
served as Undersecretary of State for Economic, Business and Agricultural
Affairs under President Clinton. From 1981 to 1993, she was an executive at the
American Express Company, where her last position was executive vice president
for Corporate Affairs and Communications. Ms. Spero served as U.N. Ambassador to
the United Nations Economic and Social Council under President Carter from 1980
to 1981. She was an assistant professor at Columbia University from 1973 to
1979. She graduated Phi Beta Kappa from the University of Wisconsin and holds a
master's degree in international affairs and a doctorate in political science
from Columbia University. Ms. Spero is a member of the Council on Foreign
Relations and the Council of American Ambassadors. She also serves as a trustee
of the Wisconsin Alumni Research Foundation, The Brookings Institution and
Columbia University and is a Director of First Data Corporation. Ms. Spero has
served as a trustee of various mutual funds advised by Scudder Kemper since
1998.
Jean Gleason Stromberg (56)
Ms. Stromberg acts as a consultant on regulatory matters. From 1996 to 1997, Ms.
Stromberg represented the U.S. General Accounting Office before Congress and
elsewhere on issues involving banking, securities, securities markets, and
government-sponsored enterprises. Prior to that, Ms. Stromberg was a corporate
and securities law partner at the Washington, D.C. law office of Fulbright and
Jaworski, a national law firm. She served as Associate Director of the SEC's
Division of Investment Management from 1977 to 1979 and prior to that was
Special Counsel for the Division of Corporation Finance from 1972 to 1977. Ms.
Stromberg graduated Phi Beta Kappa from Wellesley College and received her law
degree from Harvard Law School. From 1988 to 1991 and 1993 to 1996, she was a
Trustee of the American Bar Retirement Association, the funding vehicle for
American Bar Association-sponsored retirement plans. Ms. Stromberg serves on the
Wellesley College Business Leadership Council and the Council for Mutual Fund
Director Education at Northwestern University Law School and was a panelist at
the SEC's Investment Company Director's Roundtable. Ms. Stromberg has served as
a board member of the AARP Investment Program Funds since 1997.
Jean C. Tempel (56)
Jean C. Tempel is a venture partner for Internet Capital Group, a strategic
network of Internet partnership companies whose principal offices are in Wayne,
Pennsylvania. Ms. Tempel concentrates on investment opportunities in the Boston
area. She spent 25 years in technology/operations executive management at
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various New England banks, building custody operations and real time
financial/securities processing systems, most recently as Chief Operations
Officer at The Boston Company. From 1991 until 1993 she was president/COO of
Safeguard Scientifics, a Pennsylvania technology venture company. In that role
she was a founding investor, director and vice chairman of Cambridge Technology
Partners. She is a director of XLVision, Inc., Marathon Technologies, Inc.,
Aberdeen Group and Sonesta Hotels International, and is a Trustee of
Northeastern University, Connecticut College, and The Commonwealth Institute.
She received a B.A. from Connecticut College, an M.S. from Rensselaer
Polytechnic Institute of New York, and attended Harvard Business School's
Advanced Management Program. Ms. Tempel has served as a trustee of various
mutual funds advised by Scudder Kemper since 1994.
Steven Zaleznick (45)*
Steven Zaleznick is President and CEO of AARP Services, Inc., a wholly-owned and
independently-operated subsidiary of AARP which manages a range of products and
services offered to AARP members, provides marketing services to AARP and its
member service providers and establishes an electronic commerce presence for
AARP members. Mr. Zaleznick previously served as AARP's general counsel for nine
years. He was responsible for the legal affairs of the AARP, which included tax
and legal matters affecting non-profit organizations, contract negotiations,
publication review and public policy litigation. In 1979, he joined the AARP as
a legislation representative responsible for issues involving taxes, pensions,
age discrimination, and other national issues affecting older Americans. Mr.
Zaleznick is President of the Board of Cradle of Hope Adoption Center in
Washington, D.C. He is a former treasurer and currently a board member of the
National Senior Citizens Law Center. Mr. Zaleznick received his B.A. in
economics from Brown University. He received his J.D. degree from Georgetown
University Law Center and is a member of the District of Columbia Bar
Association.
Directors Not Standing for Re-election:
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Present Office with the Corporation;
Principal Occupation or Employment
Name and Directorships
- ---- -----------------
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Sheryle J. Bolton (53) Director; CEO and Director, Scientific
Learning Corporation. Ms. Bolton serves
on the Boards of an additional 6 trusts
or corporations whose funds are advised
by Scudder Kemper.
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William T. Burgin (56) Director; General Partner, Bessemer
Venture Partners. Mr. Burgin serves on
the Boards of an additional 5 trusts or
corporations whose funds are advised by
Scudder Kemper.
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William H. Luers (70) Director; Chairman and President,
United Nations Association of America.
Mr. Luers serves on the Boards of an
additional 7 trusts or corporations
whose funds are advised by Scudder
Kemper.
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Kathryn L. Quirk (47)* Director, Vice President and Assistant
Secretary; Managing Director of Scudder
Kemper Investments, Inc. Ms. Quirk
serves on the Boards of an additional
18 trusts or corporations whose funds
are advised by Scudder Kemper.
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* Nominee or Director considered by the Corporation and its counsel to be an
"interested person" (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Corporation, the Investment Manager or
AARP because of his or her employment by the Investment Manager or AARP,
and, in some cases, holding offices with the Corporation.
Appendix 1 hereto sets forth the number of shares of each series of the
Corporation owned directly or beneficially by the Directors of the Corporation,
by the President of the Corporation and by the nominees for election.
Responsibilities of the Board -- Board and Committee Meetings
A fund's board is responsible for the general oversight of fund business.
The board that is proposed for shareholder voting at this Meeting is comprised
of two individuals who are considered "interested" Directors, and seven
individuals who have no affiliation with Scudder Kemper and who are called
"independent" Directors (the "Independent Directors"). The SEC has recently
proposed a rule that would require a majority of the board members of a fund to
be "independent" if the fund were to take advantage of certain exemptive rules
under the 1940 Act. On the proposed Board of Directors, if approved by
shareholders, nearly 78% will be Independent Directors. The Independent
Directors have been nominated solely by the current Independent Directors of the
Corporation, a practice also favored by the SEC. The Independent Directors have
primary responsibility for assuring that the Acquired Fund is managed in the
best interests of its shareholders.
The Directors meet several times during the year to review the investment
performance of each fund of the corporation and other operational matters,
including policies and procedures designed to assure compliance with regulatory
and other requirements. In 1999, the Directors conducted over 20 meetings to
deal with fund issues (including committee meetings and special meetings of the
Independent Directors). Furthermore, the Independent Directors review the fees
paid to the Investment Manager and its affiliates for investment advisory
services and other administrative and shareholder services. The Directors have
adopted several policies and practices which help ensure their effectiveness and
independence in reviewing fees and representing shareholders. Many of these are
similar to those suggested in the 1999 Advisory Group Report on Best Practices
for Fund Directors (the "Advisory Group Report"). For example, the Independent
Directors select independent legal counsel to work with them in reviewing fees,
advisory and other contracts and overseeing fund matters. The Directors are also
assisted in this regard by the funds' independent public accountants and other
independent experts retained for this purpose. The Independent Directors
regularly meet privately with their counsel and other advisors. In addition, the
Independent Directors from time to time have appointed task forces and
subcommittees from their members to focus on particular matters such as
investment, accounting and shareholder servicing issues.
The Board of the Corporation has an Audit Committee and a Committee on
Independent Directors, the responsibilities of which are described below. In
addition, the Corporation has an Executive Committee and a Valuation Committee.
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Audit Committee
The Audit Committee reviews with management and the independent public
accountants for each series of the Corporation, among other things, the scope of
the audit and the internal controls of each series of the Corporation and its
agents, reviews and approves in advance the type of services to be rendered by
independent accountants, recommends the selection of independent accountants for
each series of the Corporation to the Board, reviews the independence of such
firm and, in general, considers and reports to the Board on matters regarding
the accounting and financial reporting practices of each series of the
Corporation.
As suggested by the Advisory Group Report, the Corporation's Audit
Committee is comprised entirely of Independent Directors, meets privately with
the independent accountants of each series of the Corporation, will receive
annual representations from the accountants as to their independence, and has a
written charter that delineates the committee's duties and powers.
Committee on Independent Directors
The Board of Directors of the Corporation has a Committee on Independent
Directors, comprised solely of Independent Directors, charged with the duty of
making all nominations of Independent Directors, establishing Directors'
compensation policies, retirement policies and fund ownership policies,
reviewing Directors' affiliations and relationships annually, and periodically
assessing and reviewing evaluations of the Board of Directors' effectiveness.
Attendance
As noted above, the Directors conducted over 20 meetings in calendar year
1999 to deal with fund matters, including various committee meetings and special
meetings of the Independent Directors. The full Board of Trustees of the
Corporation met seven times, the Audit Committee met two times and the Committee
on Independent Directors met one time during calendar year 1999. Each then
current Director attended 100% of the total meetings of the full Board of
Directors and each above-named committee on which he or she served as a regular
member that were held during that period.
Honorary Directors
Paul Bancroft III, Wilson Nolen, William H. Gleysteen, Jr., Thomas J.
Devine and Robert G. Stone, Jr. currently serve as Honorary Directors of the
Corporation. Honorary Directors are invited to attend all Board meetings and to
participate in Board discussions, but are not entitled to vote on any matter
presented to the Board. Honorary Directors are appointed by the Board of
Directors and will continue to serve in their present capacities following the
Reorganization.
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Officers
The following persons are officers of the Corporation:
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Present Office with the
Corporation; Principal Year First Became an
Name (Age) Occupation or Employment(1) Officer(2)
- ---------- ------------------------ --------------------
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Nicholas Bratt (51) President; Managing 1985
Director of Scudder
Kemper
- --------------------------------------------------------------------------------
Kathryn L. Quirk (47) Director, Vice President 1984
and Assistant Secretary;
Managing Director of
Scudder Kemper
- --------------------------------------------------------------------------------
Irene T. Cheng (45) Vice President; Managing 1997
Director of Scudder
Kemper
- --------------------------------------------------------------------------------
Joyce E. Cornell (56) Vice President; Managing 1996
Director of Scudder
Kemper
- --------------------------------------------------------------------------------
Tien Yu Sieh (30) Vice President; Senior 1999
Vice President of Scudder
Kemper
- --------------------------------------------------------------------------------
Sheridan Reilly (48) Vice President; Senior 1997
Vice President of Scudder
Kemper
- --------------------------------------------------------------------------------
Shahram Tajbakhsh (43) Vice President; Senior 1998
Vice President of Scudder
Kemper
- --------------------------------------------------------------------------------
Edmund B. Games, Jr. (62) Vice President; Managing 1992
Director of Scudder
Kemper
- --------------------------------------------------------------------------------
Carol L. Franklin (47) Vice President; Managing 1996
Director of Scudder
Kemper
- --------------------------------------------------------------------------------
Joan Gregory (54) Vice President; Vice 1999
President of Scudder
Kemper
- --------------------------------------------------------------------------------
Ann M. McCreary (43) Vice President; Managing 1998
Director of Scudder
Kemper
- --------------------------------------------------------------------------------
John Millette (38) Vice President and 1999
Secretary; Assistant Vice
President of Scudder
Kemper
- --------------------------------------------------------------------------------
John R. Hebble (41) Treasurer; Senior Vice 1998
President of Scudder
Kemper
- --------------------------------------------------------------------------------
Caroline Pearson (38) Assistant Secretary; 1997
Senior Vice President of
Scudder Kemper;
Associate, Dechert Price
& Rhoads (law firm) 1989
to 1997
- --------------------------------------------------------------------------------
- ----------
(1) Unless otherwise stated, all of the officers have been associated with
their respective companies for more than five years, although not
necessarily in the same capacity.
(2) The President, Treasurer and Secretary each holds office until his or her
successor has been duly elected and qualified, and all other officers hold
offices in accordance with the By-laws of the Acquired Trust.
-15-
<PAGE>
Compensation of Directors And Officers
The Corporation pays each Independent Director an annual Director's fee
for each series of the Corporation plus specified amounts for Board and
committee meetings attended and reimburses expenses related to the business of
any series of the Corporation. Each Independent Director receives an annual
Director's fee of $3,500 per fund. Each Independent Director also receives fees
of $325 per fund for attending each Board meeting, Audit Committee meeting or
other meeting held for the purpose of considering arrangements between the
Corporation and Scudder Kemper, or any of its other affiliates. Each Independent
Director also receives $100 per fund for all other committee meetings attended.
The newly-constituted Board may determine to change its compensation structure.
The Independent Directors of the Corporation are not entitled to benefits
under any pension or retirement plan. It is currently anticipated that a
one-time benefit will be provided to those Independent Directors who have
volunteered to leave the board prior to their normal retirement date in order to
facilitate the nomination of a consolidated board. The amount of such benefit
has not been finally determined, but is expected to be based on a Director's
years of service and remaining years to normal retirement. [Further detail to be
provided when available.] [Inasmuch as Scudder Kemper will also benefit from the
administrative efficiencies of a consolidated board, Scudder Kemper has agreed
to bear one-half of the cost of any such benefit.]
Scudder Kemper supervises the Corporation's investments, pays the
compensation and certain expenses of its personnel who serve as Directors and
officers of the Corporation and receives a management fee for its services.
Several of the Corporation's officers and Directors are also officers,
directors, employees or stockholders of Scudder Kemper and participate in the
fees paid to that firm, although the Corporation makes no direct payments to
them other than for reimbursement of travel expenses in connection with their
attendance at Board and committee meetings.
The following Compensation Table provides in tabular form the following
data:
Column (1) All Directors who receive compensation from the Corporation.
Column (2) Aggregate compensation received by each Director of the
Corporation during calendar year 1999.
Column (3) Total compensation received by each Director from funds managed
by Scudder Kemper (collectively, the "Fund Complex") during calendar year 1999.
-16-
<PAGE>
Compensation Table
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Directors Aggregate Compensation Total Compensation from
(number of funds) Director Fund Complex Paid to
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Sheryle J. Bolton $45,600 (8 funds) $179,860 (25 funds)
- ------------------------------------------------------------------------------------------
William T. Burgin $43,650 (8 funds) $160,325 (33 funds)
- ------------------------------------------------------------------------------------------
Keith R. Fox $43,650 (8 funds) $160,325 (33 funds)
- ------------------------------------------------------------------------------------------
William H. Luers $47,550 (8 funds) $212,596 (36 funds)
- ------------------------------------------------------------------------------------------
Joan E. Spero $47,550 (8 funds) $175,275 (33 funds)
- ------------------------------------------------------------------------------------------
Paul Bancroft III,* $37,800 (8 funds) $159,991 (25 funds)
Honorary Director
- ------------------------------------------------------------------------------------------
William H. Gleysteen, Jr., $ 0 (8 funds) $ 19,933 (14 funds)
Honorary Director
- ------------------------------------------------------------------------------------------
Wilson Nolen, $ 0 (8 funds) $ 64,098 (25 funds)
Honorary Director
- ------------------------------------------------------------------------------------------
Thomas J. Devine, $ 0 (8 funds) $ 0 (26 funds)
Honorary Director
- ------------------------------------------------------------------------------------------
Robert G. Stone, Jr., $ 0 (8 funds) $ 9,000 (27 funds)
Honorary Director
- ------------------------------------------------------------------------------------------
</TABLE>
* Prior to November 1, 1999, Mr. Bancroft served as a Director of the
Corporation. As of November 1, 1999, Mr. Bancroft serves in the capacity
of Honorary Director. The compensation in this table reflects any fees
received by Mr. Bancroft in both capacities.
The Board of Directors of Scudder International Fund, Inc. recommends that
the shareholders of Scudder International Growth and Income
Fund vote for each nominee.
PROPOSAL 2: APPROVAL OF
AGREEMENT AND PLAN OF REORGANIZATION
I. SYNOPSIS
The following is a summary of certain information contained in this Proxy
Statement/Prospectus relating to the Reorganization. This summary is qualified
by reference to the more complete information contained elsewhere in this Proxy
Statement/Prospectus, the Prospectuses and Statements of Additional Information
of the Funds, and the Plan. Shareholders should read this entire Proxy
Statement/Prospectus carefully.
Introduction
The Board of the Corporation, including all of the Independent Directors,
approved the Plan at a meeting held on February 7, 2000. Subject to its approval
by the shareholders of the Acquired Fund, the Plan provides for the
reclassification of the issued and outstanding shares of the Acquired Fund into
shares of the Acquiring Fund and the abolition of the Acquired Fund as a series
of the Corporation. As a result of the Reorganization, each shareholder of the
Acquired Fund will become a shareholder of the International Shares class of the
Acquiring Fund and will hold, immediately after the Reorganization,
-17-
<PAGE>
shares of the International Shares class of the Acquiring Fund having an
aggregate net asset value equal to the aggregate net asset value of such
shareholder's shares of the Acquired Fund on the Valuation Date. In addition,
the completion of the Reorganization will result in the acquisition by the
Acquiring Fund of the all of the assets and liabilities of the Acquired Fund.
The Reorganization will be effected by an amendment to the Corporation's
charter.
Scudder Kemper is the investment manager of both Funds. If the
Reorganization is completed, the Acquired Fund's shareholders will continue to
enjoy all of the same shareholder privileges as they currently enjoy, such as
the ability to buy, exchange and sell shares without paying a sales commission,
access to professional service representatives, and automatic dividend
reinvestment. See "Purchase, Redemption and Exchange Information."
Background of the Reorganization
The Reorganization is part of a broader restructuring program proposed by
Scudder Kemper to respond to changing industry conditions and investor needs.
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 they make 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 increased confusion among investors. The group of
no-load funds advised by Scudder Kemper has followed this pattern increasing
from 44 funds in 1990 to 77 funds at present.
As a result, Scudder Kemper has sought ways to restructure and streamline
the management and operations of the funds it advises. Scudder Kemper believes,
and has advised the boards, that the consolidation of certain funds advised by
it would benefit fund shareholders. Scudder Kemper has, therefore, proposed the
consolidation of a number of no-load funds advised by it that Scudder Kemper
believes have similar or compatible investment objectives and policies. In many
cases, the proposed consolidations are designed to eliminate the substantial
overlap in current offerings by the Scudder Funds and the funds offered through
the AARP Investment Program (the "AARP Funds"), all of which are advised by
Scudder Kemper. Consolidation plans are proposed for other funds that have not
gathered enough assets to operate efficiently and, in turn, have relatively high
expense ratios. Scudder Kemper believes that these consolidations may help to
enhance investment performance of funds and increase efficiency of operations.
The Reorganization is also expected to result in lower operating expenses for
Acquired Fund shareholders, as described in "Comparison of Expenses" below.
There are currently five different boards for the no-load funds advised by
Scudder Kemper. Scudder Kemper believes, and has proposed to the boards, that
creating a single board responsible for most of the no-load funds advised by
Scudder Kemper would increase efficiency and benefit fund shareholders. (See
Proposal 1 above.)
As part of this restructuring effort, Scudder Kemper has also proposed the
adoption of an administrative fee for most of the no-load funds advised by
Scudder Kemper. Under this fee structure, in exchange for payment by the
Acquiring Fund of an administrative fee, Scudder Kemper would agree to provide
or pay for substantially all services that a fund normally requires for its
operations, other than those provided under the fund's investment management
agreement and certain other expenses. Such an administrative fee would enable
investors to determine with greater certainty the expense level that a fund will
experience, and would transfer substantially all of the risk of increased costs
to Scudder Kemper. Scudder Kemper has proposed that the Acquiring Fund implement
such an administrative fee upon the Closing, as described in "Administrative
Fee" below.
-18-
<PAGE>
The fund consolidations, the adoption of an administrative fee and the
creation of a single board are expected to have a positive impact on Scudder
Kemper, as well. These changes are likely to result in reduced costs (and the
potential for increased profitability) for Scudder Kemper in advising or
servicing funds.
Reasons for the Proposed Reorganization; Board Approval
Since receiving Scudder Kemper's proposals on October 5, 1999, the
Independent Directors 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 Directors 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.
The Directors believe that the Reorganization may provide shareholders
with the following benefits:
o LOWER EXPENSES. If the Reorganization is approved, Acquired Fund
shareholders may benefit from lower total Fund operating expenses. Please
refer to "Comparison of Expenses" below.
o GREATER PREDICTABILITY OF EXPENSES. On or prior to Closing, the Acquiring
Fund and Scudder Kemper will enter into an administrative services
agreement pursuant to which Scudder Kemper will provide or pay others to
provide substantially all of the administrative services required by the
Acquiring Fund, and most Acquiring Fund expenses, in return for payment by
the Acquiring Fund of a single administrative fee rate. This agreement,
which has an initial three year term, will protect the Acquiring Fund's
shareholders from increases in the Acquiring Fund's expense ratio
attributed to any increases in the costs of providing these services.
o OPPORTUNITY FOR HIGHER RETURN. The Acquiring Fund may provide an
opportunity for a higher level of return than the Acquired Fund, although
there can be no assurances in this regard. The Acquiring Fund has
outperformed the Acquired Fund over the past one-year period, and has been
in the top quintile of all funds in the Lipper International Funds
category for each of the past one, three, five and ten-year periods.
o SIMILAR INVESTMENT OBJECTIVES AND POLICIES. Notwithstanding the Acquired
Fund's yield-based investment criteria, as discussed herein, Scudder
Kemper has advised the Directors that the Funds have compatible investment
policies and objectives.
o TAX-FREE REORGANIZATION. Shareholders of the Acquired Fund will exchange
their shares for shares of the Acquiring Fund of equal value. It is
expected that the transaction will be tax-free for Acquired Fund
shareholders.
For these reasons, as more fully described below under "The Proposed
Transaction - Board Approval of the Proposed Transaction," the Directors of the
Corporation, including the Independent Directors, have concluded that:
o the Reorganization is in the best interests of the Acquired Fund and its
shareholders; and
-19-
<PAGE>
o the interests of the existing shareholders of the Acquired Fund will not
be diluted as a result of the Reorganization.
Accordingly, the Directors recommend approval of the Plan effecting the
Reorganization. If the Plan is not approved, the Acquired Fund will continue in
existence unless other action is taken by the Directors.
Investment Objectives, Policies and Restrictions of the Funds
Although the investment objectives, policies and restrictions of the
Acquired Fund and the Acquiring Fund (and, consequently, the risks of investing
in either Fund) are similar, there are differences between the Funds. The
investment objective of the Acquiring Fund is to seek long-term growth of
capital by investing at least 65% of its total assets in foreign equities. The
investment objective of the Acquired Fund is to seek long-term growth of capital
and current income by investing at least 80% of net assets in foreign equities.
There can be no assurance that either Fund will achieve its investment
objective.
The Acquired Fund will normally invest at least 80% of its net assets in
the equity securities of established non-U.S. companies listed on recognized
foreign exchanges. The Acquiring Fund also invests most of its assets in this
type of security, but does not have a minimum percentage of assets that must be
invested in such securities. The Acquired Fund targets stocks with dividends at
least 25% above the stock's three-year average or the median for the stock's
markets. It will sell securities whose dividends are 25% lower than the stock's
own three-year average or the median for the stock's markets. The Acquiring Fund
does not set percentage goals for the yield of the stocks in which it chooses to
invest.
The Acquiring Fund's investment restrictions, as set forth in its
Statement of Additional Information, are identical to the Acquired Fund's
investment restrictions. Investment restrictions of each Fund that are
fundamental policies may not be changed without the approval of Fund
shareholders. Investors should refer to the respective Statements of Additional
Information of the Acquiring Fund and the Acquired Fund for a fuller description
of each Fund's investment policies and restrictions.
Portfolio Turnover
The average annual portfolio turnover rate for the Acquiring Fund, i.e.,
the ratio of the lesser of annual sales or purchases to the monthly average
value of the portfolio (excluding from both the numerator and the denominator
securities with maturities at the time of acquisition of one year or less), for
the fiscal year ended March 31, 1999 and for the five month period ended August
31, 1999 were 79.9% and 81.5% (annualized), respectively. The average annual
portfolio turnover rate for the Acquired Fund for the fiscal year ended August
31, 1999 was 140.8%. 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.
Performance
The following table compares the investment performance of each Fund, and
may provide some indication of the risks of investing in each Fund by showing
changes in each Fund's performance from year to year and how the Fund's average
annual return for the periods indicated compare with those of a broad measure of
market performance. Neither Fund's past performance is an indication of how the
Fund will perform in the future.
-20-
<PAGE>
Average Annual Total Return
For the Periods Ending December 31, 1999
- -------------------------------------------------------------------------------
Acquiring Fund Acquired Fund Benchmark Index**
-------------- ------------- -----------------
- --------------------------------------------------------------------------------
Past year 57.89% 15.44% 27.92%
- -------------------------------------------------------------------------------
Past 5 years 21.06% N/A 13.09%
- -------------------------------------------------------------------------------
Past 10 years 13.06% N/A 7.09%
- -------------------------------------------------------------------------------
Since Inception* N/A 8.78% 14.28%
- -------------------------------------------------------------------------------
*The inception date for the Acquired Fund was June 30, 1997.
**Each Fund's benchmark index is the Morgan Stanley Capital International
Europe, Australia, the Far East and Canada Index, an unmanaged
capitalization-weighted measure of stock markets in Europe, Australia, the Far
East and Canada. Index returns are calculated monthly, assume reinvestment of
dividends and, unlike Fund returns, do not reflect any fees or expenses.
Total return for the Acquired Fund would have been lower during all
periods if the Investment Manager had not maintained expenses.
For management's discussion of the Acquiring Fund's performance for the
fiscal year ended August 31, 1999, see Exhibit B attached hereto.
Investment Manager; Fees and Expenses
Each Fund retains the investment management firm of Scudder Kemper,
pursuant to separate contracts, to manage its daily investment and business
affairs, subject to the policies established by the Fund's Directors.
Shareholders pay no direct charges or fees for investment management or other
services. Scudder Kemper is a Delaware corporation located at Two International
Place, Boston, Massachusetts 02110-4103.
The Investment Manager receives a fee for its services pursuant to its
investment management agreement with the Acquiring Fund. For these services, the
Acquiring Fund pays the Investment Manager a fee at an annual rate of 0.90% of
the first $500 million of average daily net assets, 0.85% of the next $500
million, 0.80% of the next $1 billion, 0.75% of the next $1 billion, and 0.70%
on average daily net assets in excess of $3 billion. The fee is graduated so
that increases in the Acquiring Fund's net assets may result in a lower annual
fee rate and decreases in its net assets may result in a higher annual fee rate.
As of August 31, 1999, the Acquiring Fund had total net assets of
$3,637,858,781. For the fiscal year ended March 31, 1999 and for the five months
ended August 31, 1999, the Acquiring Fund paid the Investment Manager a fee of
0.81% and 0.80% (annualized), respectively, of average daily net assets.
Scudder Kemper has proposed a new investment management agreement for the
Acquiring Fund. The proposed new investment management agreement includes a new
fee rate, which, at all asset levels, is the same or lower than the current rate
applicable to the Acquiring Fund. The proposed new fee rate is 0.675% of the
first $6 billion of average daily net assets, 0.625% of the next $1 billion, and
0.60% on
-21-
<PAGE>
average daily net assets in excess of $7 billion. Each of the effectiveness of
the new investment management agreement for the Acquiring Fund and the Closing
is contingent upon the other.
The Investment Manager receives a fee for its services pursuant to its
investment management agreement with the Acquired Fund. For these services, the
Acquired Fund pays the Investment Manager a fee at an annual rate of 1.00% of
average daily net assets. As of August 31, 1999, the Acquired Fund had total net
assets of $39,839,526. For the fiscal year ended February 28, 1999 and for the
six months ended August 31, 1999 the Acquired Fund paid the Investment Manager a
fee of 0.56% and 0.33% (annualized), respectively, of average daily net assets.
By contract, the total annual Fund operating expenses of the Acquired Fund are
maintained at not more than 1.75% of average daily net assets until June 30,
2001.
Administrative Fee
On or prior to the Closing, the Acquiring Fund will have entered into an
administrative services agreement with Scudder Kemper (the "Administration
Agreement"), pursuant to which Scudder Kemper will provide or pay others to
provide substantially all of the administrative services required by the
Acquiring Fund (other than those provided by Scudder Kemper under its investment
management agreement with the Fund, as described above) in exchange for the
payment by the Acquiring Fund of an administrative services fee (the
"Administrative Fee") of 0.375% of average daily net assets. One effect of this
arrangement is to make the Acquiring Fund's future expense ratio more
predictable. The details of the proposal (including expenses that are not
covered) are set out below.
Various third-party service providers (the "Service Providers"), some of
which are affiliated with Scudder Kemper, provide certain services to the
Acquiring Fund pursuant to separate agreements with the Fund, subject to
oversight and approval by the Directors. Scudder Fund Accounting Corporation, a
subsidiary of Scudder Kemper, computes net asset value for the Acquiring Fund
and maintains its accounting records. Scudder Service Corporation, also a
subsidiary of Scudder Kemper, is the transfer, shareholder servicing and
dividend-paying agent for the shares of the Acquiring Fund. Scudder Trust
Company, an affiliate of Scudder Kemper, provides subaccounting and
recordkeeping services for shareholder accounts in certain retirement and
employee benefit plans. As custodian, Brown Brothers Harriman & Co. holds the
portfolio securities of the Acquiring Fund, pursuant to a custodian agreement.
PricewaterhouseCoopers LLP audits the financial statements of the Acquiring Fund
and provides other audit, tax, and related services. Dechert Price & Rhoads acts
as general counsel for the Acquiring Fund. In addition to the fees it pays under
its current investment management agreement with Scudder Kemper, the Acquiring
Fund pays the fees and expenses associated with these service arrangements, as
well as the Acquiring Fund's insurance, registration, printing, postage and
other costs.
Once the Administration Agreement becomes effective, each Service Provider
will continue to provide the services that it currently provides to the
Acquiring Fund, as described above, under the current arrangements, except that
Scudder Kemper will pay these entities for the provision of their services to
the Acquiring Fund and will pay most other Fund expenses, including insurance,
registration, printing and postage fees. In return, the Acquiring Fund will pay
Scudder Kemper the Administrative Fee.
The proposed Administration Agreement will have an initial term of three
years, subject to earlier termination by the Directors. The fee payable by the
Acquiring Fund to Scudder Kemper pursuant to the Administration Agreement would
be reduced by the amount of any credit received from the Acquiring Fund's
custodian for cash balances.
-22-
<PAGE>
Certain expenses of the Acquiring Fund would not be borne by Scudder
Kemper under the Administration Agreement, such as taxes, brokerage, interest
and extraordinary expenses; and the fees and expenses of the Independent
Directors (including the fees and expenses of their independent counsel). In
addition, the Acquiring Fund would continue to pay the fees required by its
investment management agreement with Scudder Kemper.
Comparison of Expenses
The tables and examples below are designed to assist you in understanding
the various costs and expenses that you will bear directly or indirectly as an
investor in the International Shares class of the Acquiring Fund, and comparing
these with the expenses of the Acquired Fund. As indicated below, it is expected
that the total expense ratio of the Acquiring Fund following the Reorganization
will be substantially lower than the current expense ratio of the Acquired Fund.
Unless otherwise noted, the information is based on each Fund's expenses and
average daily net assets during the twelve months ended September 30, 1999 and
on a pro forma basis as of that date and for the period then ended, giving
effect to the Reorganization.
Shareholder Transaction Expenses
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Pro Forma@
Acquiring Fund Acquired Fund (Combined)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum sales charge (load) imposed on
purchases (as a percentage of offering
price)
None None None
- ----------------------------------------------------------------------------------------
Maximum deferred sales charge (load)
(as a percentage of purchase price) or
redemption proceeds
None None None
- ----------------------------------------------------------------------------------------
Maximum deferred sales charge (load)
imposed or reinvested dividends
None None None
- ----------------------------------------------------------------------------------------
Redemption fee (as a percentage of
amount redeemed, if applicable)+
None None None
- ----------------------------------------------------------------------------------------
</TABLE>
-23-
<PAGE>
Annual Fund Operating Expenses (Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Pro Forma*@
Acquiring Fund Acquired Fund (Combined)
-------------- ------------- ----------
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management fees 0.80% 1.00% 0.67%
- -------------------------------------------------------------------------------------------------
Distribution and/or service
(12b-1) fees None None None
- -------------------------------------------------------------------------------------------------
Other expenses 0.39% 1.47% 0.38%
- -------------------------------------------------------------------------------------------------
Total annual Fund operating
expenses 1.19% 2.47% 1.05%
- -------------------------------------------------------------------------------------------------
Expense reimbursement N/A 0.72% N/A
- -------------------------------------------------------------------------------------------------
Net annual Fund operating expenses N/A 1.75%# N/A
- -------------------------------------------------------------------------------------------------
</TABLE>
+ There is a $5 wire service fee for receiving redemption proceeds via wire.
# By contract, the total annual Fund operating expenses of the Acquired Fund
are maintained at not more than 1.75% of average daily net assets until June 30,
2001. There is no guarantee that this expense waiver will continue beyond June
30, 2001.
* Pro Forma expenses reflect the implementation of the Administrative Fee and
of a new investment management fee for the Acquiring Fund to be effective upon
the Reorganization.
@ It is being proposed to shareholders of AARP International Stock Fund, another
fund advised by Scudder Kemper, that the Acquiring Fund acquire the assets of
that other fund. Each of the closing of this other acquisition and the Closing
is contingent upon the other. Pro Forma expenses reflect the acquisition by the
Acquiring Fund of both this other fund and the Acquired Fund.
In evaluating the Proposals, the Independent Directors focused their
consideration on the Acquiring Fund's and the Acquired Fund's estimated expense
ratios calculated utilizing Fund net assets at December 31, 1999 (rather than
average daily net assets for a full year, as used in the table above), the
number of shareholder accounts at that date, and other relevant factors. This
calculation resulted in an estimated expense ratio of 1.04% for the Acquiring
Fund and 2.11% (without reflecting any expense reimbursements) for the Acquired
Fund.
Examples (Unaudited)
Based on the costs above (including one year of capped expenses in each
period included in the Acquired Fund column), the following examples are
intended to help you compare the cost of investing in the Funds with the cost of
investing in other mutual funds. The examples assume that you invest $10,000 in
the International Shares class of the Acquiring Fund and in the Acquired Fund
for the time periods indicated and then redeem all of your shares at the end of
those periods. The examples also assume that
-24-
<PAGE>
your investment has a 5% return each year and that each Fund's operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions, your costs would be as follows:
- --------------------------------------------------------------------------------
Pro Forma
Year Acquiring Fund Acquired Fund (Combined)**@
- ---- -------------- ------------- ----------
- --------------------------------------------------------------------------------
1st $ 121 $ 178 $ 107
- --------------------------------------------------------------------------------
3rd $ 378 $ 701 $ 334
- --------------------------------------------------------------------------------
5th $ 654 $1,251 $ 579
- --------------------------------------------------------------------------------
10th $1,443 $2,752 $1,283
- --------------------------------------------------------------------------------
** Pro Forma expenses reflect the implementation of the Administrative Fee and
of a new investment management fee for the Acquiring Fund to be effective upon
the Reorganization.
@ It is being proposed to shareholders of AARP International Stock Fund, another
fund advised by Scudder Kemper, that the Acquiring Fund acquire the assets of
that other fund. Each of the closing of this other acquisition and the Closing
is contingent upon the other. Pro Forma expenses reflect the acquisition by the
Acquiring Fund of both this other fund and the Acquired Fund.
Financial Highlights
The financial highlights table for the International Shares class of the
Acquiring Fund, which is intended to help you understand the Acquiring Fund's
financial performance for the past five years, is included in the Acquiring
Fund's prospectus dated January 1, 2000, which is included herewith and
incorporated herein by reference.
Distribution of Shares
Scudder Investor Services, Inc. ("SIS"), Two International Place, Boston,
Massachusetts 02110, a subsidiary of the Investment Manager, is the principal
underwriter of each Fund. SIS charges no direct fees in connection with the
distribution of shares of the Funds. Following the Reorganization, Acquiring
Fund shareholders will continue to be able to purchase shares of the funds in
the Scudder Family of Funds on a no-load basis.
Purchase, Redemption and Exchange Information
The purchase, redemption and exchange procedures and privileges of the
Acquired Fund are identical to those of the International Shares class of the
Acquiring Fund.
Dividends and other Distributions
Each of the Funds intends to distribute net realized capital gains after
utilization of capital loss carryforwards, if any, in November or December. The
Acquiring Fund intends to distribute dividends from its net investment income
annually in November or December. The Acquired Fund intends to distribute
dividends in June and December of each year. An additional distribution may be
made if necessary. Dividends and distributions of each Fund will be invested in
additional shares of the Fund at
-25-
<PAGE>
net asset value and credited to the shareholder's account on the payment date
or, at the shareholder's election, paid in cash.
If the Plan is approved by the Acquired Fund's shareholders, the Acquired
Fund will pay its shareholders a distribution of all undistributed net
investment income and undistributed realized net capital gains immediately prior
to the Closing.
Tax Consequences
As a condition to the Reorganization, the Acquiring Fund and the Acquired
Fund will have received an opinion of Willkie Farr & Gallagher in connection
with the Reorganization, to the effect that, based upon certain facts,
assumptions and representations, the Reorganization will constitute a tax-free
reorganization within the meaning of section 368(a)(1) of the Internal Revenue
Code of 1986, as amended (the "Code"). If the Reorganization constitutes a
tax-free reorganization, no gain or loss will be recognized by the Acquired Fund
or its shareholders as a direct result of the Reorganization. See "The Proposed
Transaction - Federal Income Tax Consequences."
II. PRINCIPAL RISK FACTORS
Because of their similar investment objectives, policies and strategies,
the principal risks presented by the Acquiring Fund are similar to those
presented by the Acquired Fund. The main risks applicable to each Fund include,
among others, management risk, market risk, foreign currency risk, and, to the
extent each Fund invests in bonds, risk associated with interest rates.
Management risk refers to the fact that securities selected by Scudder Kemper on
behalf of each Fund might not perform as well as the securities held by other
mutual funds with investment objectives similar to those of the Fund. Market
risk refers to the impact of the general performance of stock markets -- in this
case, foreign markets -- on each Fund's performance. When foreign stock prices
fall, the value of an investment in each Fund will fall as well. Foreign stocks
tend to be more volatile than their U.S. counterparts, for various reasons
including political and economic uncertainties and difficulty in obtaining
accurate information. Foreign currency risk refers to the effect currency
exchange rates have on the dollar value of a security. When the dollar value of
a foreign currency falls, so does the value of any investments each Fund owns
that are denominated in that currency. Risk associated with interest rates
refers to the link between interest rates and debt security performance. A rise
in interest rates generally means a fall in bond prices, and therefore in the
value of the debt securities in the portfolio of each Fund. With respect to the
Acquired Fund, there is an additional type of risk in that, to the extent that
the Acquired Fund focuses on income, it may end up avoiding opportunities in
faster-growing industries or companies.
For a further discussion of the investment techniques and risk factors
applicable to the Acquired Fund and the Acquiring Fund, see the "Investment
Objectives, Policies and Restrictions of the Funds" herein, and the Prospectuses
and Statements of Additional Information for the Funds, which are incorporated
by reference herein.
The Acquiring Fund's Investment Management Agreement
Scudder Kemper is the investment manager for the Acquiring Fund pursuant
to an investment management agreement with the Corporation that is currently
substantially similar in all material respects to that currently in place for
the Acquired Fund, except for the fee rates payable thereunder. As stated
earlier, management of the Acquiring Fund anticipates that, on or prior to the
Closing of the Reorganization, the investment management agreement applicable to
the Acquiring Fund will be replaced
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by an investment management agreement that includes a new fee rate that is lower
than the current fee rate applicable to the Acquiring Fund.
III. THE PROPOSED TRANSACTION
Description of the Plan
As stated above, the Plan provides for the reclassification of the issued
and outstanding shares of the Acquired Fund into shares of the Acquiring Fund
and the abolition of the Acquired Fund as a series of the Corporation. As a
result of the Reorganization, all of the assets and liabilities of the Acquired
Fund would become the assets and liabilities of the Acquiring Fund.
Upon completion of the Reorganization, each shareholder of the Acquired
Fund will own shares of the International Shares class of the Acquiring Fund
having an aggregate net asset value equal to the aggregate net asset value of
such shareholder's shares held in the Acquired Fund immediately as of the close
of business on the Valuation Date. Such shares will be held in an account with
the Corporation identical in all material respects to the account currently
maintained by the Corporation for such shareholder. In the interest of economy
and convenience, shares of the Acquiring Fund issued to the Acquired Fund's
shareholders will be in uncertificated form.
Until the Closing, shareholders of the Acquired Fund will continue to be
able to redeem their shares at the net asset value next determined after receipt
by the Acquired Fund's transfer agent of a redemption request in proper form.
Redemption requests received by the transfer agent after the Closing will be
treated as requests received for the redemption of shares of the Acquiring Fund
received by the shareholder in connection with the Reorganization.
The obligations of the Corporation on behalf of each of the Acquired Fund
and the Acquiring Fund, respectively, under the Plan are subject to various
conditions, as stated therein. Among other things, the Plan requires that all
filings be made with, and all authority be received from, the SEC and state
securities commissions as may be necessary in the opinion of counsel to permit
the parties to carry out the transactions contemplated by the Plan. The Acquired
Fund and the Acquiring Fund are in the process of making the necessary filings.
To provide against unforeseen events, the Plan may be terminated or amended at
any time prior to the Closing by action of the Directors of the Corporation,
notwithstanding the approval of the Plan by the shareholders of the Acquired
Fund. However, no amendment may be made that materially adversely affects the
interests of the shareholders of the Acquired Fund without obtaining the
approval of the Acquired Fund's shareholders. The Acquired Fund and the
Acquiring Fund may at any time waive compliance with certain of the covenants
and conditions contained in the Plan. For a complete description of the terms
and conditions of the Reorganization, see the Plan at Exhibit A.
Scudder Kemper will pay the Acquiring Fund's allocable share of expenses
associated with the Reorganization. The Acquired Fund will pay its own allocable
share of expenses associated with the Reorganization, except that Scudder Kemper
will bear any such expenses in excess of $39,069 for the Acquired Fund
(approximately $0.0132 per share, based on December 31, 1999 net assets for the
Acquired Fund).
Board Approval of the Proposed Transaction
Scudder Kemper first proposed the Reorganization to the Independent
Directors of the Acquired Fund at a meeting held on October 5, 1999. The
Reorganization was presented to the Directors and
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considered by them as part of a broader initiative by Scudder Kemper to
restructure many of the mutual funds advised by it that are currently offered to
retail investors (see "Synopsis - Background of the Reorganization" above). This
initiative includes four major components:
(i) The combination of funds with similar investment objectives and
policies, including in particular the combination of the AARP Funds
with similar Scudder Funds currently offered to the general public;
(ii) The liquidation of certain small funds which have not achieved
market acceptance and which are unlikely to reach an efficient
operating size;
(iii) The implementation of an administration agreement for each fund,
covering, for a single fee rate, substantially all services required
for the operation of the fund (other than those provided under the
fund's investment management agreement) and most expenses; and
(iv) The consolidation of the separate boards currently responsible for
overseeing several groups of no-load funds managed by Scudder Kemper
into a single board.
The Independent Directors of the Acquired Fund reviewed the potential
implications of these proposals for the Acquired Fund as well as the various
other funds for which they serve as trustees or directors. They were assisted in
this review by their independent legal counsel and by independent consultants
with special expertise in financial and mutual fund industry matters. Following
the October 5 meeting, the Independent Directors met in person or by telephone
on seven occasions (including committee meetings) to review and discuss these
proposals, both among themselves and with representatives of Scudder Kemper. On
a number of occasions, these meetings included representatives of the
independent trustees or directors of other funds affected by these proposals. In
the course of their review, the Independent Directors requested and received
substantial additional information and suggested numerous changes to Scudder
Kemper's proposals, many of which were accepted.
Following the conclusion of this process, the Independent Directors of the
Acquired Fund, the independent trustees/directors of other funds involved and
Scudder Kemper reached general agreement on the elements of a restructuring plan
as it affects shareholders of various funds and, where required, agreed to
submit elements of the plan for approval to shareholders of those funds.
On February 7, 2000, the Board of the Acquired Fund, including the
Independent Directors of the Acquired Fund, approved the terms of the
Reorganization and certain related proposals. At the February 7, 2000 meeting,
the Independent Directors also agreed to recommend that the Reorganization be
approved by the Acquired Fund's shareholders.
In determining to recommend that the shareholders of the Acquired Fund
approve the Reorganization, the Board considered, among other factors: (a) the
fees and expense ratios of the Funds, including comparisons between the
expenses of the Acquired Fund and the estimated operating expenses of the
Acquiring Fund, and between the estimated operating expenses of the Acquiring
Fund and other mutual funds with similar investment objectives; (b) the terms
and conditions of the Reorganization and whether the Reorganization would
result in the dilution of shareholder interests; (c) the compatibility of the
Acquired Fund's and the Acquiring Fund's investment objectives, policies,
restrictions and portfolios; (d) the agreement by Scudder Kemper to provide
services to the Acquiring Fund for a fixed fee rate under the Administration
Agreement with an initial three year term; (e) the service features available
to shareholders of the Acquired Fund and the Acquiring Fund; (f) the costs to
be borne by the Acquired Fund, the Acquiring Fund and Scudder Kemper as a
result of the Reorganization; (g) prospects for the
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Acquiring Fund to attract additional assets; (h) the tax consequences of the
Reorganization on the Acquired Fund, the Acquiring Fund and their respective
shareholders; and (i) the investment performance of the Acquired Fund and the
Acquiring Fund.
The Directors also gave extensive consideration to possible economies of
scale that might be realized by Scudder Kemper in connection with the
Reorganization, as well as the other fund combinations included in Scudder
Kemper's restructuring proposal. The Directors concluded that these economies
were appropriately reflected in the fee and expense arrangements of the
Acquiring Fund, as proposed to be revised upon completion of the Reorganization.
In particular, the Directors considered the benefits to shareholders resulting
from locking in the rate of the Acquiring Fund's Administrative Fee for an
initial three-year period. Because the Acquiring Fund will pay only its stated
Administrative Fee rate for such services and expenses regardless of changes in
actual costs, the Acquiring Fund's shareholders will be protected from increases
in the Acquiring Fund's expense ratio attributable to increases in such actual
costs. The Board also considered the protection this would afford shareholders
if the Acquiring Fund's net assets declined as a result of market fluctuations
or net redemptions.
The Directors also considered the impact of the Reorganization on the
total expenses to be borne by shareholders of the Acquired Fund. As noted above
under "Comparison of Expenses," the pro forma expense ratio (reflecting the
Administrative Fee) for the combined Fund following the Reorganization is
substantially lower than the current expense ratio for the Acquired Fund. The
Board also considered that the Reorganization would permit the shareholders of
the Acquired Fund to pursue substantially similar investment goals in a larger
fund.
Finally, the Directors concluded that the shareholders of the Acquired
Fund would be better served by having their interests represented by a single
board of directors with responsibility for overseeing substantially all of the
funds to be marketed as a "family of funds" through Scudder's no-load
distribution channels. Accordingly, the Directors agreed to recommend the
election of a new consolidated board comprised of representatives of each of the
various boards currently serving as Directors of these funds.
Based on all of the foregoing, the Board concluded that the Acquired
Fund's participation in the Reorganization would be in the best interests of the
Acquired Fund and would not dilute the interests of the Acquired Fund's
shareholders. The Board of Directors, including the Independent Directors,
recommends that shareholders of the Acquired Fund approve the Reorganization.
Description of the Securities to be Issued
The Corporation's authorized capital consists of one billion shares of
capital stock, par value $0.01 per share, 300 million shares of which are
allocated to the Acquiring Fund and 100 million shares of which are allocated to
the International Shares class of the Acquiring Fund. The Directors of the
Corporation are authorized to divide the Corporation's shares into separate
series. The Acquiring Fund is one of eight series of the Corporation that the
Board has created to date. The Board of the Corporation is also authorized to
further divide the shares of the series of the Corporation into classes. The
Acquiring Fund's shares are currently divided into three classes of shares: the
International Shares, the Barrett International Shares and the Class R Shares.
The Directors of the Corporation have authorized the creation of an additional
class for the Acquiring Fund, AARP Shares. It is anticipated that the AARP
Shares will be created prior to the Closing. Although shareholders of different
classes of a series have an interest in the same portfolio of assets,
shareholders of different classes may bear different expenses in connection with
different methods of distribution.
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<PAGE>
Each share of each class of the Acquiring Fund represents an interest in
the Acquiring Fund that is equal to and proportionate with each other share of
that class of the Acquiring Fund. Acquiring Fund shareholders are entitled to
one vote per share (and a proportionate fractional vote per each fractional
share) held on matters on which they are entitled to vote. The Corporation is
not required to hold shareholder meetings annually, although shareholder
meetings may be called for purposes such as electing or removing Directors,
changing fundamental policies or approving an investment management contract. In
the event that shareholders of the Corporation wish to communicate with other
shareholders concerning the removal of any Director, such shareholders shall be
assisted in communicating with other shareholders for the purpose of obtaining
signatures to request a meeting of shareholders, all in the manner provided in
Section 16(c) of the 1940 Act as if Section 16(c) were applicable.
In the areas of shareholder voting and the powers and conduct of the
Directors, there are no material differences between the rights of shareholders
of the Acquired Fund and the rights of shareholders of the Acquiring Fund.
Federal Income Tax Consequences
The Reorganization is conditioned upon the receipt by the Corporation, on
behalf of 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 reclassification of all
the issued shares of the Acquired Fund into shares of the Acquiring Fund and the
combination of the assets and liabilities of the Acquired Fund with the assets
and liabilities of the Acquiring Fund, as described in the Plan, and the
abolition of the Acquired Fund as a series of the Corporation, 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 as a result of such transactions or upon the
distribution of the Acquiring Fund shares to the Acquired Fund shareholders in
exchange for their shares of the Acquired Fund; (iii) the basis of the assets of
the Acquired Fund in the hands of the Acquiring Fund will be the same as the
basis of such assets of the Acquired Fund immediately prior to the transfer;
(iv) the holding period of the assets of the Acquired Fund in the hands of the
Acquiring Fund will include the period during which such assets were held by the
Acquired Fund; (v) no gain or loss will be recognized by the Acquiring Fund upon
the receipt of the assets of the Acquired Fund and the assumption by the
Acquiring Fund of all of the liabilities of the Acquired Fund; (vi) no gain or
loss will be recognized by the shareholders of the Acquired Fund upon the
receipt of the Acquiring Fund shares solely upon the reclassification of their
shares of the Acquired Fund as part of the transaction; (vii) the basis of the
Acquiring Fund shares received by the shareholders of the Acquired Fund will be
the same as the basis of the shares of the Acquired Fund exchanged therefor; and
(viii) the holding period of Acquiring Fund shares received by the shareholders
of the Acquired Fund will include the holding period during which the shares of
the Acquired Fund exchanged therefor were held, provided that at the time of the
exchange the shares of the Acquired Fund were held as capital assets in the
hands of the shareholders of the Acquired Fund.
While the Corporation 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.
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<PAGE>
Capitalization
The following table shows on an unaudited basis the capitalization of the
International Shares class of the Acquiring Fund, the Acquired Fund and AARP
International Stock Fund@ as of September 30, 1999, and on a pro forma basis as
of that date giving effect to the Reorganization:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
AARP
International Pro Forma Pro Forma
Acquiring Fund Acquired Fund Stock Fund Adjustments Combined(1)
-------------- ------------- ---------- ----------- --------
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Assets
- ----------------------------------------------------------------------------------------------------------------------
International Shares $3,734,950,224 $40,273,173 ($39,069)(3) $3,775,184,328
- ----------------------------------------------------------------------------------------------------------------------
Barrett Shares $ 25,945,213 $ 25,945,213
- ----------------------------------------------------------------------------------------------------------------------
AARP Shares $34,678,261 (43,902)(4) $ 34,634,359
- ----------------------------------------------------------------------------------------------------------------------
Class R Shares $ 3,973,979 $ 3,973,979
--------------
- ----------------------------------------------------------------------------------------------------------------------
Total Net Assets $3,839,737,879(2)
--------------
- ----------------------------------------------------------------------------------------------------------------------
Shares Outstanding
- ----------------------------------------------------------------------------------------------------------------------
International Shares 66,674,708 3,046,033 (2,327,823) 67,392,918
- ----------------------------------------------------------------------------------------------------------------------
Barrett Shares 462,131 462,131
- ----------------------------------------------------------------------------------------------------------------------
AARP Shares 1,818,198 (1,199,948) 618,250
- ----------------------------------------------------------------------------------------------------------------------
Class R Shares 71,051 71,051
- ----------------------------------------------------------------------------------------------------------------------
Net Asset Value per Share
- ----------------------------------------------------------------------------------------------------------------------
International Shares $ 56.02 $ 13.22 $ 56.02
- ----------------------------------------------------------------------------------------------------------------------
Barrett Shares 56.14 $ 56.14
- ----------------------------------------------------------------------------------------------------------------------
AARP Shares $ 19.07 $ 56.02
- ----------------------------------------------------------------------------------------------------------------------
Class R Shares 55.93 $ 55.93
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
@ It is being proposed to shareholders of AARP International Stock Fund, another
fund advised by Scudder Kemper, that the Acquiring Fund acquire the assets of
that other fund. Each of the closing of this other acquisition and the Closing
is contingent upon the other. Pro Forma capitalization reflects the acquisition
by the Acquiring Fund of both this other fund and the Acquired Fund.
(1) Assumes the Reorganization had been consummated on September 30, 1999, and
is for information purposes only. No assurance can be given as to how many
shares of the Acquiring Fund will be received by the shareholders of the
Acquired Fund and AARP International Stock Fund on the date the Reorganization
takes place, and the foregoing should not be relied upon to reflect the number
of shares of the Acquiring Fund that actually will be received on or after such
date.
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<PAGE>
(2) Pro forma combined net assets do not reflect expense reductions that would
result from the implementation of the Administrative Fee and of a new investment
management fee for the Acquiring Fund.
(3) Represents one-time proxy, legal, accounting and other costs of the
Reorganization to be borne by the Acquired Fund.
(4) Represents one-time proxy, legal, accounting and other costs of the
Reorganization to be borne by the AARP International Stock Fund.
The Board of Directors of Scudder International Fund, Inc. recommends
that the shareholders of Scudder International Growth and
Income Fund vote in favor of this Proposal 2.
PROPOSAL 3: RATIFICATION OR REJECTION OF THE SELECTION OF INDEPENDENT
ACCOUNTANTS
The Board of the Corporation, including a majority of the Independent
Directors, has selected PricewaterhouseCoopers LLP to act as independent
accountants of the Acquired Fund for the Acquired Fund's current fiscal year.
One or more representatives of PricewaterhouseCoopers LLP are expected to be
present at the Meeting and will have an opportunity to make a statement if they
so desire. Such representatives are expected to be available to respond to
appropriate questions posed by shareholders or management.
The Board of Directors of Scudder International Fund, Inc. recommends that
the shareholders of Scudder International Growth and
Income Fund vote in favor of this Proposal 3.
ADDITIONAL INFORMATION
Information about the Funds
Additional information about the Corporation, the Funds and the
Reorganization has been filed with the SEC and may be obtained without charge by
writing to Scudder Investor Services, Inc., Two International Place, Boston, MA
02110-4103, or by calling 1-800-225-2470.
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934 and the 1940 Act, and in accordance therewith,
files reports, proxy material and other information about each of the Funds with
the SEC. Such reports, proxy material and other information filed by the
Corporation 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 Statements of Additional Information for the Corporation,
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<PAGE>
materials that are incorporated by reference into the prospectuses and
Statements of Additional Information, and other information about the
Corporation and the Funds.
Interests of Certain Persons
The Investment Manager has a financial interest in the Reorganization,
arising from the fact that its fee under its investment management agreement
with the Acquiring Fund will increase as the amount of the Acquiring Fund's
assets increases. The amount of those assets will increase by virtue of the
Reorganization. See "Synopsis - Fees and Expenses."
General
Proxy Solicitation. Proxy solicitation costs will be considered
Reorganization expenses and will be allocated accordingly. In addition to
solicitation by mail, certain officers and representatives of the Corporation,
officers and employees of Scudder Kemper and certain financial services firms
and their representatives, who will receive no extra compensation for their
services, may solicit proxies by telephone, telegram or personally.
This Proxy Statement/Prospectus, the Notice of Special Meeting and the
proxy card(s) are first being mailed to shareholders on or about April 18, 2000
or as soon as practicable thereafter. Any Acquired Fund shareholder giving a
proxy has the power to revoke it by mail (addressed to the Secretary at the
principal executive office of the Acquired Fund, c/o Scudder Kemper Investments,
Inc., at the address for the Acquired Fund shown at the beginning of this Proxy
Statement/Prospectus) or in person at the Meeting, by executing a superseding
proxy or by submitting a notice of revocation to the Acquired Fund. All properly
executed proxies received in time for the Meeting will be voted as specified in
the proxy or, if no specification is made, in favor of each Proposal.
The presence at any shareholders' meeting, in person or by proxy, of the
holders of one-third of the shares of the Corporation (for a corporation-wide
vote) or the Acquired Fund (for a fund-wide vote) entitled to be cast shall be
necessary and sufficient to constitute a quorum for the transaction of business.
In the event that the necessary quorum to transact business or the vote required
to approve any Proposal is not obtained at the Meeting, the persons named as
proxies may propose one or more adjournments of the Meeting in accordance with
applicable law to permit further solicitation of proxies with respect to that
Proposal. Any such adjournment as to a matter will require the affirmative vote
of the holders of a majority of the Corporation's (for a corporation-wide vote)
or the Acquired Fund's (for a fund-wide vote) shares present in person or by
proxy at the Meeting. The persons named as proxies will vote in favor of any
such adjournment those proxies which they are entitled to vote in favor of that
Proposal and will vote against any such adjournment those proxies to be voted
against that Proposal. For purposes of determining the presence of a quorum for
transacting business at the Meeting, abstentions and broker "non-votes" will be
treated as shares that are present but which have not been voted. Broker
non-votes are proxies received by the Acquired Fund from brokers or nominees
when the broker or nominee has neither received instructions from the beneficial
owner or other persons entitled to vote nor has discretionary power to vote on a
particular matter. Accordingly, shareholders are urged to forward their voting
instructions promptly.
Approval of Proposal 1 requires the affirmative vote of a plurality of the
shares of the Corporation voting at the Meeting. Approval of Proposal 2 requires
the affirmative vote of the holders of a majority of the Acquired Fund's shares
outstanding and entitled to vote thereon. Approval of Proposal 3 requires the
affirmative vote of a majority of the shares of the Acquired Fund voting at the
Meeting.
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Abstentions and broker non-votes will not be counted in favor of, but will have
no other effect on, Proposal 1, and will have the effect of a "no" vote on
Proposals 2 and 3.
Holders of record of the shares of the Acquired Fund at the close of
business on April 17, 2000 (the "Record Date") will be entitled to one vote per
share on all business of the Meeting. As of [date], there were ____________
shares of the Acquired Fund outstanding.
As of [date], the officers and Directors of the Corporation as a group
owned beneficially [less than 1%][___%] of the outstanding shares of the
Acquiring Fund. Appendix 2 hereto sets forth the beneficial owners of at least
5% of each Fund's shares.] To the best of the Corporation's knowledge, as of
_______________, no person owned beneficially more than 5% of either Fund's
outstanding shares[, except as stated on Appendix 2.]
Shareholder Communications Corporation ("SCC") has been engaged to assist
in the solicitation of proxies, at an estimated cost of $150,949. As the Meeting
date approaches, certain shareholders of the Acquired Fund may receive a
telephone call from a representative of SCC if their votes have not yet been
received. Authorization to permit SCC to execute proxies may be obtained by
telephonic or electronically transmitted instructions from shareholders of the
Acquired Fund. Proxies that are obtained telephonically will be recorded in
accordance with the procedures set forth below. The Directors believe that these
procedures are reasonably designed to ensure that both the identity of the
shareholder casting the vote and the voting instructions of the shareholder are
accurately determined.
In all cases where a telephonic proxy is solicited, the SCC representative
is required to ask for each shareholder's full name, address, social security or
employer identification number, title (if the shareholder is authorized to act
on behalf of an entity, such as a corporation), and the number of shares owned,
and to confirm that the shareholder has received the proxy materials in the
mail. If the information solicited agrees with the information provided to SCC,
then the SCC representative has the responsibility to explain the process, read
the Proposals on the proxy card, and ask for the shareholder's instructions on
the Proposals. Although the SCC representative is permitted to answer questions
about the process, he or she is not permitted to recommend to the shareholder
how to vote, other than to read any recommendation set forth in the proxy
statement. SCC will record the shareholder's instructions on the card. Within 72
hours, the shareholder will be sent a letter or mailgram to confirm his or her
vote and asking the shareholder to call SCC immediately if his or her
instructions are not correctly reflected in the confirmation.
If a shareholder wishes to participate in the Meeting, but does not wish
to give a proxy by telephone or electronically, the shareholder may still submit
the proxy card originally sent with the proxy statement or attend in person.
Should shareholders require additional information regarding the proxy or
replacement proxy cards, they may contact SCC toll-free at 1-800-603-1915. Any
proxy given by a shareholder is revocable until voted at the Meeting.
Shareholders may also provide their voting instructions through telephone
touch-tone voting or Internet voting. These options require shareholders to
input a control number which is located on each voting instruction card. After
inputting this number, shareholders will be prompted to provide their voting
instructions on the Proposals. Shareholders will have an opportunity to review
their voting instructions and make any necessary changes before submitting their
voting instructions and terminating their telephone call or Internet link.
Shareholders who vote on the Internet, in addition to confirming their voting
instructions prior to submission, will also receive an e-mail confirming their
instructions.
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<PAGE>
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 Corporation, c/o Scudder Kemper Investments, Inc., Two
International Place, Boston, Massachusetts 02110, within a reasonable time
before the solicitation of proxies for such meeting. The timely submission of a
proposal does not guarantee its inclusion.
Other Matters to Come Before the Meeting. No Director is aware of any
matters that will be presented for action at the Meeting other than the matters
set forth herein. Should any other matters requiring a vote of shareholders
properly come before the Meeting, 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 Corporation and/or
the Acquired Fund.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) (OR TAKE ADVANTAGE
OF AVAILABLE ELECTRONIC OR TELEPHONIC VOTING PROCEDURES) PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.
By Order of the Board,
[signature]
John Millette
Secretary
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INDEX OF EXHIBITS
EXHIBIT A: AGREEMENT AND PLAN OF REORGANIZATION
EXHIBIT B: MANAGEMENT'S DISCUSSION OF THE ACQUIRING FUND'S PERFORMANCE FOR ITS
MOST RECENT FISCAL YEAR.
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<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this ________ day of __________________, 2000, by and between Scudder
International Fund, Inc. (the "Corporation"), a Maryland corporation with its
principal place of business at 345 Park Avenue, New York, NY 10154, on behalf of
each of Scudder International Fund (the "Acquiring Fund") and Scudder
International Growth & Income Fund (the "Acquired Fund" and, together with the
Acquiring Fund, each a "Fund" and collectively the "Funds"). Each of the
Acquiring Fund and the Acquired Fund is a separate series of the Corporation.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of all or substantially all of
the assets of the Acquired Fund to the Acquiring Fund in exchange solely for
voting shares of the International Shares class of common 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 shareholders of the Acquired
Fund in complete liquidation of the Acquired Fund as provided herein, all upon
the terms and conditions hereinafter set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND TO THE ACQUIRING FUND IN EXCHANGE
FOR ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND LIABILITIES
AND THE LIQUIDATION OF THE ACQUIRED FUND
1.1. Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Acquired Fund agrees
to transfer to the Acquiring Fund all or substantially all of the Acquired
Fund's assets as set forth in section 1.2, and the Acquiring Fund agrees in
exchange therefor (i) to deliver to the Acquired Fund that number of full and
fractional Acquiring Fund Shares determined by dividing the value of the
Acquired Fund's net assets, computed in the manner and as of the time and date
set forth in section 2.1, by the net asset value of one Acquiring Fund Share,
computed in the manner and as of the time and date set forth in section 2.2; and
(ii) to assume all of the liabilities of the Acquired Fund. Such transactions
shall take place at the closing provided for in section 3.1 (the "Closing").
1.2. The assets of the Acquired Fund to be acquired by the Acquiring Fund
(the "Assets") shall consist of all assets, including, without limitation, all
cash, cash equivalents, securities, commodities and futures interests and
dividends or interest or other receivables that are owned by the Acquired Fund
and any deferred or prepaid expenses shown on the unaudited statement of assets
and liabilities of the Acquired Fund prepared as of the effective time of the
closing in accordance with generally accepted accounting principles ("GAAP")
applied consistently with those of the Acquired Fund's most recent audited
balance sheet. The Assets shall constitute at least 90% of the fair market value
of the net assets,
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and at least 70% of the fair market value of the gross assets, held by 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 3.1.
1.4. On or as soon as practicable prior to the Closing Date as defined in
section 3.1, the Acquired Fund will declare and pay to its shareholders of
record one or more dividends and/or other distributions so that it will have
distributed substantially all of its investment company taxable income (computed
without regard to any deduction for dividends paid) and realized net capital
gain, if any, for the current taxable year through the Closing Date.
1.5. Immediately after the transfer of Assets provided for in section 1.1,
the Acquired Fund will distribute to the Acquired Fund's shareholders of record
(the "Acquired Fund Shareholders"), determined as of the Valuation Time (as
defined in section 2.1), on a pro rata basis, the Acquiring Fund Shares received
by the Acquired Fund pursuant to section 1.1 and will completely liquidate. Such
distribution and liquidation will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the names of the Acquired Fund Shareholders. The aggregate net
asset value of Acquiring Fund Shares to be so credited to Acquired Fund
Shareholders shall be equal to the aggregate net asset value of the Acquired
Fund shares owned by such shareholders as of the Valuation Time. All issued and
outstanding shares of the Acquired Fund will simultaneously be cancelled on the
books of the Acquired Fund, although share certificates representing interests
in shares of the Acquired Fund will represent a number of Acquiring Fund Shares
after the Closing Date as determined in accordance with section 2.3. The
Acquiring Fund will not issue certificates representing Acquiring Fund Shares in
connection with such exchange.
1.6. Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund. Shares of the Acquiring Fund will be issued in the manner
described in the Acquiring Fund's then-current prospectus and statement of
additional information.
1.7. Any reporting responsibility of the Acquired Fund including, without
limitation, the responsibility for filing of regulatory reports, tax returns, or
other documents with the Securities and Exchange Commission (the "Commission"),
any state securities commission, and any federal, state or local tax authorities
or any other relevant regulatory authority, is and shall remain the
responsibility of the Acquired Fund.
1.8. All books and records of the Acquired Fund, including all books and
records required to be maintained under the 1940 Act and the rules and
regulations thereunder, shall be available to the Acquiring Fund from and after
the Closing Date and shall be turned over to the Acquiring Fund as soon as
practicable following the Closing Date.
2. VALUATION
2.1. The value of the Assets shall be computed as of the close of regular
trading on The New York Stock Exchange, Inc. (the "NYSE") on the business day
immediately preceding the Closing Date, as defined in Section 3.1 (such time and
date being hereinafter called the "Valuation Time") after the declaration and
payment of any dividends and/or other distributions on that date, using the
valuation
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procedures set forth in the Corporation's Charter, as amended, and then-current
prospectus or statement of additional information.
2.2. The net asset value of an Acquiring Fund share shall be the net asset
value per share computed as of the Valuation Time using the valuation procedures
referred to in section 2.1.
2.3. The number of the Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Assets shall be determined by
dividing the value of the Assets with respect to shares of the Acquired Fund
determined in accordance with section 2.1 by the net asset value of an Acquiring
Fund Share determined in accordance with section 2.2.
2.4. All computations of value hereunder shall be made by or under the
direction of each Fund's respective accounting agent, if applicable, in
accordance with its regular practice and the requirements of the 1940 Act and
shall be subject to confirmation by each Fund's respective independent
accountants upon the reasonable request of the other Fund.
3. CLOSING AND CLOSING DATE
3.1. The Closing of the transactions contemplated by this Agreement shall
be August 28, 2000, or such later date as the parties may agree in writing (the
"Closing Date"). All acts taking place at the Closing shall be deemed to take
place simultaneously as of 9:00 a.m.., Eastern time, on the Closing Date, unless
otherwise agreed to by the parties. The Closing shall be held at the offices of
Dechert Price & Rhoads, Ten Post Office Square - South, Boston, MA 02109, or at
such other place and time as the parties may agree.
3.2. The Acquired Fund shall deliver to Acquiring Fund on the Closing Date
a schedule of Assets.
3.3. Brown Brothers Harriman & Co. ("Brown Brothers"), custodian for the
Acquired Fund, shall deliver at the Closing a certificate of an authorized
officer stating that (a) the Assets shall have been delivered in proper form to
Brown Brothers, custodian for the Acquiring Fund, prior to or on the Closing
Date and (b) all necessary taxes in connection with the delivery of the Assets,
including all applicable federal and state stock transfer stamps, if any, have
been paid or provision for payment has been made. The Acquired Fund's portfolio
securities represented by a certificate or other written instrument shall be
presented by the custodian for the Acquired Fund to the custodian for the
Acquiring Fund for examination no later than five business days preceding the
Closing Date and transferred and delivered by the Acquired Fund as of the
Closing Date by the Acquired Fund for the account of Acquiring Fund duly
endorsed in proper form for transfer in such condition as to constitute good
delivery thereof. The Acquired Fund's portfolio securities and instruments
deposited with a securities depository, as defined in Rule 17f-4 under the 1940
Act, shall be delivered as of the Closing Date by book entry in accordance with
the customary practices of such depositories and the custodian for the Acquiring
Fund. The cash to be transferred by the Acquired Fund shall be delivered by wire
transfer of federal funds on the Closing Date.
3.4. Scudder Service Corp. (the "Transfer Agent"), on behalf of the
Acquired Fund, shall deliver at the Closing a certificate of an authorized
officer stating that its records contain the names and addresses of the Acquired
Fund Shareholders and the number and percentage ownership (to three decimal
places) of outstanding Acquired Fund Shares owned by each such shareholder
immediately prior to the Closing. The Acquiring Fund shall issue and deliver a
confirmation evidencing the Acquiring Fund Shares to be credited on the Closing
Date to the Acquired Fund or provide evidence satisfactory to the Acquired Fund
that such Acquiring Fund Shares have been credited to the Acquired Fund's
account on
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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 Acquiring Fund Shares or the Acquired Fund Shares is
impracticable, the Closing Date shall be postponed until the first business day
after the day when trading shall have been fully resumed and reporting shall
have been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1. The Corporation, on behalf of the Acquired Fund, represents and
warrants to the Acquiring Fund as follows:
(a) The Corporation is a corporation duly organized and validly existing
under the laws of the State of Maryland with power under the Corporation's
Charter, as amended, to own all of its properties and assets and to carry on its
business as it is now being conducted;
(b) The Corporation is registered with the Commission as an open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and such registration is in full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired Fund of
the transactions contemplated herein, except such as have been obtained under
the Securities Act of 1933, as amended (the "1933 Act"), the Securities Exchange
Act of 1934, as amended (the "1934 Act") and the 1940 Act and such as may be
required by state securities laws;
(d) Other than with respect to contracts entered into in connection with
the portfolio management of the Acquired Fund which shall terminate on or prior
to the Closing Date, the Corporation is not, and the execution, delivery and
performance of this Agreement by the Corporation will not result, in violation
of Massachusetts law or of the Corporation's Charter, as amended, or By-Laws, or
of any material agreement, indenture, instrument, contract, lease or other
undertaking known to counsel to which the Acquired Fund is a party or by which
it is bound, and the execution, delivery and performance of this Agreement by
the Acquired Fund will not result in the acceleration of any obligation, or the
imposition of any penalty, under any agreement, indenture, instrument, contract,
lease, judgment or decree to which the Acquired Fund is a party or by which it
is bound;
(e) No material litigation or administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Acquired Fund or any properties or assets held
by it. The Acquired Fund knows of no facts which might form the basis for the
institution of such proceedings which would materially and adversely affect its
business and is not a party to or subject to the provisions of any order, decree
or judgment of any court or governmental body which materially and adversely
affects its business or its ability to consummate the transactions herein
contemplated;
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(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 February 28, 1999, have been
audited by PricewaterhouseCoopers LLP, independent accountants, and are in
accordance with GAAP consistently applied, and such statements (a copy of each
of which has been furnished to the Acquiring Fund) present fairly, in all
material respects, the financial position of the Acquired Fund as of such date
in accordance with GAAP, and there are no known contingent liabilities of the
Acquired Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed therein;
(g) Since February 28, 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 (iii) will be
held at the time of the Closing by the persons and in the amounts set forth in
the records of the Transfer Agent, as provided in section 3.4. The Acquired Fund
does not have outstanding any options, warrants or other rights to subscribe for
or purchase any of the Acquired Fund shares, nor is there outstanding any
security convertible into any of the Acquired Fund shares;
(k) At the Closing Date, the Acquired Fund will have good and marketable
title to the Acquired Fund's assets to be transferred to the Acquiring Fund
pursuant to section 1.2 and full right, power, and authority to sell, assign,
transfer and deliver such assets hereunder free of any liens or other
encumbrances, except those liens or encumbrances as to which the Acquiring Fund
has received notice at or prior to the Closing, and upon delivery and payment
for such assets, the Acquiring Fund will acquire good and marketable title
thereto, subject to no restrictions on the full transfer thereof, including such
restrictions as might arise under the 1933 Act and the 1940 Act, except those
restrictions as to which the Acquiring Fund has received notice and necessary
documentation at or prior to the Closing;
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(l) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action on the
part of the Board members of the Corporation, and, subject to the approval of
the Acquired Fund Shareholders, this Agreement constitutes a valid and binding
obligation of the Corporation, on behalf of the Acquired Fund, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws
relating to or affecting creditors' rights and to general equity principles;
(m) The information to be furnished by the Acquired Fund for use in
applications for orders, registration statements or proxy materials or for use
in any other document filed or to be filed with any federal, state or local
regulatory authority (including the National Association of Securities Dealers,
Inc. (the "NASD")), which may be necessary in connection with the transactions
contemplated hereby, shall be accurate and complete in all material respects and
shall comply in all material respects with federal securities and other laws and
regulations applicable thereto;
(n) The current prospectus and statement of additional information of the
Acquired Fund conform in all material respects to the applicable requirements of
the 1933 Act and the 1940 Act and the rules and regulations of the Commission
thereunder and do not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not materially misleading; and
(o) The proxy statement of the Acquired Fund to be included in the
Registration Statement referred to in section 5.7 (the "Proxy Statement"),
insofar as it relates to the Acquired Fund, will, on the effective date of the
Registration Statement and on the Closing Date, not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which such statements are made, not materially misleading;
provided, however, that the representations and warranties in this section shall
not apply to statements in or omissions from the Proxy Statement and the
Registration Statement made in reliance upon and in conformity with information
that was furnished or should have been furnished by the Acquiring Fund for use
therein.
4.2. The Corporation, on behalf of the Acquiring Fund, represents and
warrants to the Acquired Fund as follows:
(a) The Corporation is a corporation organized and validly existing under
the laws of the State of Maryland with power under the Corporation's Charter, as
amended, to own all of its properties and assets and to carry on its business as
it is now being conducted;
(b) The Corporation is registered with the Commission as an open-end
management investment company under the 1940 Act, and such registration is in
full force and effect;
(c) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring Fund of
the transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by state
securities laws;
(d) The Corporation is not, and the execution, delivery and performance of
this Agreement by the Corporation will not result, in violation of Maryland law
or of the Corporation's Charter, as amended, or By-Laws, or of any material
agreement, indenture, instrument, contract, lease or other undertaking known to
counsel to which the Acquiring Fund is a party or by which it is bound, and the
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execution, delivery and performance of this Agreement by the Acquiring Fund will
not result in the acceleration of any obligation, or the imposition of any
penalty, under any agreement, indenture, instrument, contract, lease, judgment
or decree to which the Acquiring Fund is a party or by which it is bound;
(e) No material litigation or administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Acquiring Fund or any properties or assets held
by it. The Acquiring Fund knows of no facts which might form the basis for the
institution of such proceedings which would materially and adversely affect its
business and is not a party to or subject to the provisions of any order, decree
or judgment of any court or governmental body which materially and adversely
affects its business or its ability to consummate the transactions herein
contemplated;
(f) The Statements of Assets and Liabilities, Operations, and Changes in
Net Assets, the Financial Highlights, and the Investment Portfolio of the
Acquiring Fund at and for the fiscal year ended August 31, 1999, have been
audited by PricewaterhouseCoopers LLP, independent accountants, and are in
accordance with GAAP consistently applied, and such statements (a copy of each
of which has been furnished to the Acquired Fund) present fairly, in all
material respects, the financial position of the Acquiring Fund as of such date
in accordance with GAAP, and there are no known contingent liabilities of the
Acquiring Fund required to be reflected on a balance sheet (including the notes
thereto) in accordance with GAAP as of such date not disclosed therein;
(g) Since August 31, 1999, there has not been any material adverse change
in the Acquiring Fund's financial condition, assets, liabilities or business
other than changes occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred except as otherwise disclosed to
and accepted in writing by the Acquired Fund. For purposes of this subsection
(g), a decline in net asset value per share of the Acquiring Fund due to
declines in market values of securities in the Acquiring Fund's portfolio, the
discharge of Acquiring Fund liabilities, or the redemption of Acquiring Fund
shares by Acquiring Fund shareholders shall not constitute a material adverse
change;
(h) At the date hereof and at the Closing Date, all federal and other tax
returns and reports of the Acquiring Fund required by law to have been filed by
such dates (including any extensions) shall have been filed and are or will be
correct in all material respects, and all federal and other taxes shown as due
or required to be shown as due on said returns and reports shall have been paid
or provision shall have been made for the payment thereof, and, to the best of
the Acquiring Fund's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to such returns;
(i) For each taxable year of its operation, the Acquiring Fund has met the
requirements of Subchapter M of the Code for qualification as a regulated
investment company and has elected to be treated as such, has been eligible to
and has computed its federal income tax under Section 852 of the Code, and will
do so for the taxable year including the Closing Date;
(j) All issued and outstanding shares of the Acquiring Fund (i) have been
offered and sold in every state and the District of Columbia in compliance in
all material respects with applicable registration requirements of the 1933 Act
and state securities laws and (ii) are, and on the Closing Date will be, duly
and validly issued and outstanding, fully paid and non-assessable. The Acquiring
Fund does not have outstanding any options, warrants or other rights to
subscribe for or purchase any of the Acquiring Fund shares, nor is there
outstanding any security convertible into any of the Acquiring Fund shares;
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(k) The Acquiring Fund Shares to be issued and delivered to the Acquired
Fund, for the account of the Acquired Fund Shareholders, pursuant to the terms
of this Agreement, will at the Closing Date have been duly authorized and, when
so issued and delivered, will be duly and validly issued and outstanding
Acquiring Fund Shares, and will be fully paid and non-assessable.
(l) At the Closing Date, the Acquiring Fund will have good and marketable
title to the Acquiring Fund's assets, free of any liens or other encumbrances,
except those liens or encumbrances as to which the Acquired Fund has received
notice at or prior to the Closing;
(m) The execution, delivery and performance of this Agreement will have
been duly authorized prior to the Closing Date by all necessary action on the
part of the Board members of the Corporation and this Agreement will constitute
a valid and binding obligation of the 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, not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which such statements were made, not materially misleading;
provided, however, that the representations and warranties in this section shall
not apply to statements in or omissions from the Proxy Statement and the
Registration Statement made in reliance upon and in conformity with information
that was furnished or should have been furnished by the Acquired Fund for use
therein; and
(q) The Acquiring Fund agrees to use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such of
the state securities laws as may be necessary in order to continue its
operations after the Closing Date.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1. The Acquiring Fund and the Acquired Fund each covenants to operate
its business in the ordinary course between the date hereof and the Closing
Date, it being understood that (a) such ordinary course of business will include
(i) the declaration and payment of customary dividends and other distributions
and (ii) such changes as are contemplated by the Funds' normal operations; and
(b) each Fund shall retain exclusive control of the composition of its portfolio
until the Closing Date.
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5.2. Upon reasonable notice, the Acquiring Fund's officers and agents
shall have reasonable access to the Acquired Fund's books and records necessary
to maintain current knowledge of the Acquired Fund and to ensure that the
representations and warranties made by the Acquired Fund are accurate.
5.3. The Acquired Fund covenants to call a meeting of the Acquired Fund
Shareholders entitled to vote thereon to consider and act upon this Agreement
and to take all other reasonable action necessary to obtain approval of the
transactions contemplated herein. Such meeting shall be scheduled for no later
than July 13, 2000.
5.4. The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this Agreement.
5.5. The Acquired Fund covenants that it will assist the Acquiring Fund in
obtaining such information as the Acquiring Fund reasonably requests concerning
the beneficial ownership of the Acquired Fund Shares and will provide the
Acquiring Fund with a list of affiliates of the Acquired Fund.
5.6. Subject to the provisions of this Agreement, the Acquiring Fund and
the Acquired Fund will each take, or cause to be taken, all actions, and do or
cause to be done, all things reasonably necessary, proper, and/or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.7. Each Fund covenants to prepare in compliance with the 1933 Act, the
1934 Act and the 1940 Act the Registration Statement on Form N-14 (the
"Registration Statement") in connection with the meeting of the Acquired Fund
Shareholders to consider approval of this Agreement and the transactions
contemplated herein. The Acquiring Fund will file the Registration Statement,
including the Proxy Statement, with the Commission. The Acquired Fund will
provide the Acquiring Fund with information reasonably necessary for the
preparation of a prospectus, which will include the Proxy Statement referred to
in section 4.1(o), all to be included in the Registration Statement, in
compliance in all material respects with the 1933 Act, the 1934 Act and the 1940
Act.
5.8. The Acquired Fund covenants that it will, from time to time, as and
when reasonably requested by the Acquiring Fund, execute and deliver or cause to
be executed and delivered all such assignments and other instruments, and will
take or cause to be taken such further action as the Acquiring Fund may
reasonably deem necessary or desirable in order to vest in and confirm the
Acquiring Fund's title to and possession of all the assets and otherwise to
carry out the intent and purpose of this Agreement.
5.9. The Acquiring Fund covenants to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act and 1940 Act, and such
of the state securities laws as it deems appropriate in order to continue its
operations after the Closing Date and to consummate the transactions
contemplated herein; provided, however, that the Acquiring Fund may take such
actions it reasonably deems advisable after the Closing Date as circumstances
change.
5.10. The Acquiring Fund covenants that it will, from time to time, as and
when reasonably requested by the Acquired Fund, execute and deliver or cause to
be executed and delivered all such assignments, assumption agreements, releases,
and other instruments, and will take or cause to be taken such further action,
as the Acquired Fund may reasonably deem necessary or desirable in order to (i)
vest
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and confirm to the Acquired Fund title to and possession of all Acquiring Fund
shares to be transferred to Acquired Fund pursuant to this Agreement and (ii)
assume the liabilities from the Acquired Fund.
5.11. As soon as reasonably practicable after the Closing, the Acquired
Fund shall make a liquidating distribution to its shareholders consisting of the
Acquiring Fund Shares received at the Closing.
5.12. The Acquiring Fund and the Acquired Fund shall each use its
reasonable best efforts to fulfill or obtain the fulfillment of the conditions
precedent to effect the transactions contemplated by this Agreement as promptly
as practicable.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by it hereunder on or
before the Closing Date, and, in addition thereto, the following further
conditions:
6.1. All representations and warranties of the Corporation, with respect
to the Acquired Fund, contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as they may be affected
by the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date; and there
shall be (i) no pending or threatened litigation brought by any person (other
than Acquiring Fund, its adviser or any of their affiliates) against the
Acquired Fund or its investment adviser(s), Board members or officers arising
out of this Agreement and (ii) no facts known to the Acquired Fund which the
Acquired Fund reasonably believes might result in such litigation.
6.2. The Acquiring Fund shall have delivered to the Acquired Fund on the
Closing Date a certificate executed in its name by its President or a Vice
President, in a form reasonably satisfactory to the Acquired Fund and dated as
of the Closing Date, to the effect that the representations and warranties of
the Corporation, with respect to the Acquiring Fund, made in this Agreement are
true and correct on and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement, and as to such other matters
as the Acquired Fund shall reasonably request;
6.3. The Acquired Fund shall have received on the Closing Date an opinion
of Ober, Kaler, Grimes & Shriver in a form reasonably satisfactory to the
Acquired Fund, and dated as of the Closing Date, to the effect that:
(a) The Corporation has been duly formed and is an existing corporation;
(b) the Corporation has the power to carry on its business as presently
conducted in accordance with the description thereof in the Corporation's
registration statement under the 1940 Act; (c) the Agreement has been duly
authorized, executed and delivered by the Corporation, on behalf of the
Acquiring Fund, and constitutes a valid and legally binding obligation of the
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 Corporation's
Charter, as amended, or By-laws; and (e) to the knowledge of such counsel, all
regulatory consents, authorizations, approvals or filings required to be
obtained or made by the Acquiring Fund under the Federal laws of the United
States or the laws of the State of Maryland for the exchange of the Acquired
Fund's assets for Acquiring Fund Shares, pursuant to the Agreement have been
obtained or made; and
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<PAGE>
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 Investments, Inc. ("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 Corporation, with respect
to the Acquired Fund, contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as they may be affected
by the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date; and there
shall be (i) no pending or threatened litigation brought by any person (other
than Acquired Fund, its adviser or any of their affiliates) against the
Acquiring Fund or its investment adviser(s), Board members or officers arising
out of this Agreement and (ii) no facts known to the Acquiring Fund which the
Acquiring Fund reasonably believes might result in such litigation.
7.2. The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities as of the Closing Date,
certified by the Treasurer of the Acquired Fund;
7.3. The Acquired Fund shall have delivered to the Acquiring Fund on the
Closing Date a certificate executed in its name by its President or a Vice
President, in a form reasonably satisfactory to the Acquiring Fund and dated as
of the Closing Date, to the effect that the representations and warranties of
the Corporation 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 Ober, Kaler, Grimes & Shriver in a form reasonably satisfactory to
the Acquiring Fund, and dated as of the Closing Date, to the effect that:
(a) The Corporation has been duly formed and is an existing corporation;
(b) the Corporation has the power to carry on its business as presently
conducted in accordance with the description thereof in the Corporation's
registration statement under the 1940 Act; (c) the Agreement has been duly
authorized, executed and delivered by the Corporation, on behalf of the Acquired
Fund, and constitutes a valid and legally binding obligation of the Corporation,
on behalf of the Acquired Fund, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and laws of general applicability relating to or affecting creditors'
rights and to general equity principles; (d) the execution and delivery of the
Agreement did not, and the exchange of the Acquired Fund's assets for Acquiring
Fund Shares pursuant to the Agreement will not, violate the Corporation's
Charter, as amended, or By-laws; and (e) to the knowledge of such counsel, all
regulatory consents, authorizations, approvals or filings required to be
obtained or made by the Acquired Fund under the Federal laws of the
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<PAGE>
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; and
7.5. The Acquired Fund shall have performed all of the covenants and
complied with all of the provisions required by this Agreement to be performed
or complied with by the Acquired Fund on or before the Closing Date.
7.6 The Acquiring Fund shall have (i) adopted a new investment management
agreement and (ii) entered into an administrative services agreement with
Scudder Kemper.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND THE
ACQUIRED FUND
If any of the conditions set forth below have not been met on or before
the Closing Date with respect to the Acquired Fund or the Acquiring Fund, the
other party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
8.1. This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of the Corporation's
Charter, as amended, and By-Laws, applicable Maryland law and the 1940 Act, and
certified copies of the resolutions evidencing such approval shall have been
delivered to the Acquiring Fund. Notwithstanding anything herein to the
contrary, neither the Acquiring Fund nor the Acquired Fund may waive the
conditions set forth in this section 8.1;
8.2. On the Closing Date, no action, suit or other proceeding shall be
pending or to its knowledge threatened before any court or governmental agency
in which it is sought to restrain or prohibit, or obtain material damages or
other relief in connection with, this Agreement or the transactions contemplated
herein;
8.3. All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed necessary by
the Acquiring Fund or the Acquired Fund to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Acquired Fund, provided that either party hereto may for
itself waive any of such conditions;
8.4. The Registration Statement shall have become effective under the 1933
Act and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act; and
8.5. The parties shall have received an opinion of Willkie Farr &
Gallagher addressed to the Corporation, on behalf of each 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's shareholders in exchange for their shares of the
Acquired Fund in complete liquidation of the Acquired Fund, will constitute a
"reorganization" within the meaning of Section 368(a)(1) of the Code, and the
Acquiring Fund and the Acquired Fund will each be "a party to a
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<PAGE>
reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain
or loss will be recognized by the Acquired Fund upon the transfer of all or
substantially all of its assets to the Acquiring Fund in exchange solely for
Acquiring Fund shares and the assumption by the Acquiring Fund of all of the
liabilities of the Acquired Fund; (iii) the basis of the assets of the Acquired
Fund in the hands of the Acquiring Fund will be the same as the basis of such
assets of the Acquired Fund immediately prior to the transfer; (iv) the holding
period of the assets of the Acquired Fund in the hands of the Acquiring Fund
will include the period during which such assets were held by the Acquired Fund;
(v) no gain or loss will be recognized by the Acquiring Fund upon the receipt of
the assets of the Acquired Fund in exchange for Acquiring Fund shares and the
assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund;
(vi) no gain or loss will be recognized by the shareholders of the Acquired Fund
upon the receipt of the Acquiring Fund shares solely in exchange for their
shares of the Acquired Fund as part of the transaction; (vii) the basis of the
Acquiring Fund shares received by the shareholders of the Acquired Fund will be
the same as the basis of the shares of the Acquired Fund exchanged therefor; and
(viii) the holding period of Acquiring Fund shares received by the shareholders
of the Acquired Fund will include the holding period during which the shares of
the Acquired Fund exchanged therefor were held, provided that at the time of the
exchange the shares of the Acquired Fund were held as capital assets in the
hands of the shareholders of the Acquired Fund. The delivery of such opinion is
conditioned upon receipt by Willkie Farr & Gallagher of representations it shall
request of each of the Corporation and Corporation. Notwithstanding anything
herein to the contrary, neither the Acquiring Fund nor the Acquired Fund may
waive the condition set forth in this section 8.5.
9. INDEMNIFICATION
9.1. The Acquiring Fund agrees to indemnify and hold harmless the Acquired
Fund and each of the Acquired Fund's Board members and officers from and against
any and all losses, claims, damages, liabilities or expenses (including, without
limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which jointly and severally, the Acquired Fund or any of its
Board members or officers may become subject, insofar as any such loss, claim,
damage, liability or expense (or actions with respect thereto) arises out of or
is based on any breach by the Acquiring Fund of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
9.2. The Acquired Fund agrees to indemnify and hold harmless the Acquiring
Fund and each of the Acquiring Fund's Board members and officers from and
against any and all losses, claims, damages, liabilities or expenses (including,
without limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which jointly and severally, the Acquiring Fund or any of its
Board members or officers may become subject, insofar as any such loss, claim,
damage, liability or expense (or actions with respect thereto) arises out of or
is based on any breach by the Acquired Fund of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
10. FEES AND EXPENSES
10.1. Each 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. Scudder Kemper will pay the Acquiring Fund's allocable share of
expenses associated with the Reorganization. The Acquired Fund will pay its own
allocable share of expenses associated with the Reorganization, except that
Scudder Kemper will bear any such expenses in excess of $39,069 for the Acquired
Fund (approximately $0.0132 per share, based on December 31, 1999 net assets for
the Acquired Fund). Any such expenses which are so borne by Scudder Kemper will
be solely and directly related to the Reorganization within the meaning of
Revenue Ruling 73-54, 1973-1 C.B. 187. The
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<PAGE>
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
August 28, 2000, unless such date is extended by mutual agreement of the
parties, or (iii) by either party if the other party shall have materially
breached its obligations under this Agreement or made a material and intentional
misrepresentation herein or in connection herewith. In the event of any such
termination, this Agreement shall become void and there shall be no liability
hereunder on the part of any party or their respective Board members or
officers, except for any such material breach or intentional misrepresentation,
as to each of which all remedies at law or in equity of the party adversely
affected shall survive.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by any authorized officer of the Acquired
Fund and any authorized officer of the Acquiring Fund; provided, however, that
following the meeting of the Acquired Fund Shareholders called by the Acquired
Fund pursuant to section 5.2 of this Agreement, no such amendment may have the
effect of changing the provisions for determining the number of the Acquiring
Fund Shares to be issued to the Acquired Fund shareholders under this Agreement
to the detriment of such shareholders without their further approval.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be deemed duly given
if delivered by hand (including by Federal Express or similar express courier)
or transmitted by facsimile or three days after being mailed by prepaid
registered or certified mail, return receipt requested, addressed to the
Acquired Fund, 345 Park Avenue, New York, NY 10154, with a copy to Dechert Price
& Rhoads, Ten Post Office Square South, Boston, MA 02109-4603, Attention:
Sheldon A. Jones, Esq., or to the Acquiring Fund, 345 Park Avenue, New York, NY
10154, with a copy to Dechert Price & Rhoads, Ten Post Office Square South,
Boston, MA 02109-4603, Attention: Sheldon A. Jones, Esq., or to any other
address that the Acquired Fund or the Acquiring Fund shall have last designated
by notice to the other party.
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<PAGE>
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. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Massachusetts, without regard to its
principles of conflicts of laws.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by an authorized officer and its seal to be affixed thereto and
attested by its Secretary or Assistant Secretary.
Attest: SCUDDER INTERNATIONAL FUND, INC.
on behalf of Scudder International Growth
and Income Fund
______________________________
Secretary
_________________________________________
By:______________________________________
Its:_____________________________________
Attest: SCUDDER INTERNATIONAL FUND, INC.
on behalf of Scudder International Fund
______________________________
Secretary
_________________________________________
By:______________________________________
Its:_____________________________________
AGREED TO AND ACKNOWLEDGED
ONLY WITH RESPECT TO
PARAGRAPH 10.2 HERETO
SCUDDER KEMPER INVESTMENTS, INC.
______________________________
By:___________________________
Its:__________________________
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<PAGE>
EXHIBIT B
Scudder International Fund
Annual Report
August 31, 1999
- -------------------------------------------------------------------------------
Portfolio Management Discussion
- -------------------------------------------------------------------------------
August 31, 1999
In the following interview, Portfolio Manager Irene Cheng discusses Scudder
International Fund's strategy and the market environment during the
five-month period ending August 31, 1999.
Q: The international markets have experienced high levels of volatility in
recent months. To what do you attribute this development?
A: The increase in volatility is largely the result of the market's struggle
to balance the two most important effects of a stronger economy: rising
interest rates and improved corporate earnings. Investors across the world
have been keeping a close eye on the interest rate picture in the United
States, where two quarter-point increases by the Federal Reserve have
prompted investors to question the bull market's sustainability. The concern
over higher rates has spilled over into Europe, where stronger growth has
fueled fears that the European Central Bank will be inclined to tighten as
early as this year. Although the rate issue has been roiling the markets for
months now, we believe that it represents only a short-term difficulty. In
contrast, restructuring and consolidation activity is a powerful long-term
theme that has been, and should continue to be, a primary driver of stock
market performance overseas. This continuing trend, against a backdrop of
economic recovery in its early days in Europe and Japan, remains quite
bullish for the international markets despite the day-to-day turbulence that
we have witnessed in recent months.
Q: How did consolidation activity affect fund performance over the period?
A: Corporate activity had a significant impact in two ways. First, we
benefited directly from our positions in a number of companies that were the
subject of takeover bids. Second, and probably more important, we owned a
number of stocks that were lifted when other companies in similar industries
announced deals. A case in point is the recent announcement of a proposed
three-way merger in the Japanese financial industry between Fuji Bank,
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Industrial Bank of Japan (IBJ), and Dai-Ichi Kangyo Bank (DKB). Although Fuji
is the only one of the three that we own directly, our other holdings in the
Japanese financial sector -- such as Sakura Bank, Sanwa Bank, Sumitomo Trust
and Banking, Daiwa Securities, and Nomura Securities -- were boosted on the
hopes that meaningful rationalization in the industry has finally begun.
In Europe, consolidation has continued to accelerate at a ferocious pace, and
we have benefited from our positions on many sides of the deals. For example,
Carrefour (a fund holding) recently offered to merge with Promodes in a
combination of two of the biggest players in the French food retailing
industry. Carrefour's stock rose on the news, and we believe that it has
further to run due to the potential for the company to gain synergies and
significantly improve its competitive position. This deal also strongly
boosted the price of another potential merger target -- and fund holding --
Casino. We also owned a large position in Elf Aquitane, the French oil
company that recently agreed to join forces with TotalFina. In the U.K., we
benefited from our large position in BOC, an industrial gases company that is
the key player in a three-company consolidation in process. Also in the U.K.,
we held Select Appointments, the fast-growing specialist staffing company
that was recently bought out by a Dutch competitor, Vedior NV. Our positions
in companies such as these provided a significant boost to performance by
allowing the fund to participate in the explosive increase in consolidation
activity in the overseas markets, and we would expect more to follow.
Q: How have the International Shares of the fund performed over the last
year, and in the five months since the last report?
A: The International Shares of the fund have done very well, rising 32.06%
over the 12-month reporting period ended on August 31. In comparison, the
fund's benchmark -- the MSCI EAFE + Canada Index -- returned 26.16%. Over the
five months since the last report, the
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<PAGE>
International Shares of the fund have risen 15.19% versus 6.15% for the
benchmark. International Fund has also performed well within its peer group.
According to Lipper Analytical Services, the fund beat the 24.82% average
return for international funds over the last twelve months, and is ranked in
the top decile within its category over the three- and five-year periods
ended August 31. We believe that strong stock selection across all regions
has been the driving force behind the fund's outstanding performance.
Q: Earlier, you mentioned that the fund holds a large position in the
Japanese financial sector. What factors led you to take such a heavy
weighting in a sector that, until the last 9-12 months, had been performing
so poorly?
A: When we first established our position in Japanese financials earlier in
the year, we were intrigued by the fact that the sector was so deeply out of
favor. Many financial stocks had been decimated, and the prevailing
expectation was that bank failures were inevitable. However, we felt that the
government's injection of public funds into the banking system was a key step
that would limit further deterioration in the sector. Most important, these
funds were made available under the strict conditions that banks improve
their profitability and institute reforms. While this view was not in line
with the consensus at the time, our early entry into financials allowed us to
participate in the full length of their rally. At this juncture, we continue
to believe that the market remains skeptical regarding meaningful
restructuring and consolidation in the industry, and has not yet fully
discounted the improved outlook for the sector.
Q: How has the fund's position in cyclicals affected performance?
A: Cyclicals have been strong for us in both Europe and Japan. We first built
up the position late in 1998 once it became more apparent that the improving
health of the global economy meant that a defensive positioning was no longer
warranted. The fact that we moved into cyclicals a
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<PAGE>
few months early proved to be a distinct positive in a market where changes
are being discounted into asset prices faster than at any time in history. At
this stage, we are more optimistic on Japanese cyclicals, because (as with
banks) expectations are not as high as they are in Europe. Investors have
generally accepted the notion that growth in Europe will rebound, which means
that the potential benefit of a stronger economy is already discounted into
stock prices to a greater extent. In Japan, on the other hand, there is still
a great deal of doubt as to whether the bounce in the economy is for real, or
merely the temporary result of the country's economic stimulus plan. The fact
that there are still so many variables in Japan means that there is more
breathing room for us to move in and take advantage of some very interesting
opportunities. Currently, some of our favorite names among cyclicals are Rio
Tinto, the premier global mining company in the U.K., Siemens in Germany, and
NEC, Hitachi, and Nissan Motors in Japan.
Q: Have you found any opportunities in the emerging markets?
A: Yes. The bulk of our position in the developing countries consists of
technology stocks, primarily semiconductor manufacturers. The industry has
suffered over the latter part of the 1990s, with overcapacity pushing prices
to a level that proved unprofitable for many chip makers. Now that demand is
increasing and some of the excess capacity has been wrung out of the
industry, investors have gone on the prowl for bargains among the top
companies in the sector. Fund holdings that were positioned to benefit from
this turnaround were Samsung Electronics and Taiwan Semiconductor. We also
established positions in Taiwanese tech companies that are capitalizing on
the growing trend toward outsourcing, such as Compal Electronics and Hon Hai
Precision. The fund's emerging market tech names have performed extremely
well overall, with several doubling during the first eight months of 1999.
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<PAGE>
Q: What is your outlook for the international markets from here?
A: We remain optimistic that the themes I mentioned earlier -- restructuring
and consolidation -- will continue to provide a strong underpinning for the
foreign markets, and will give bottom-up investors the opportunity to take
advantage of the positive performance of the many individual companies that
are poised to benefit from the ongoing process of secular change. That said,
we also believe that some caution may be warranted at this point -- the
global stock markets have come a long way in the past twelve months, and are
vulnerable to a larger-than-expected jump in interest rates. Regardless of
the short-term fluctuations of the markets, however, we will remain focused
on adding value for shareholders by investing in companies that are on the
cusp of significant positive changes.
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<PAGE>
Performance Update
- --------------------------------------------------------------------------------
August 31, 1999
- --------------------------------------------------------------------------------
Growth of a $10,000 Investment
- --------------------------------------------------------------------------------
THE ORIGINAL DOCUMENT CONTAINS A LINE CHART HERE
LINE CHART DATA:
<TABLE>
<CAPTION>
Scudder International
Fund --
International MSCI EAFE & Canada
Shares Index*
<S> <C> <C>
'89 10000 10000
'90 10720 8799
'91 10428 8779
'92 11078 8762
'93 13226 11013
'94 15214 12188
'95 15377 12292
'96 16767 13289
'97 19559 14604
'98 20789 14447
'99 27455 18226
</TABLE>
Yearly periods ended August 31
- --------------------------------------------------------------------------------
Fund Index Comparison
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total Return
Growth of Average
Period ended 8/31/1999 $10,000 Cumulative Annual
- --------------------------------------------------------------------------------
Scudder International Fund -- International Shares
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1 year $ 13,206 32.06% 32.06%
- --------------------------------------------------------------------------------
5 year $ 18,045 80.45% 12.53%
- --------------------------------------------------------------------------------
10 year $ 27,455 174.55% 10.63%
- --------------------------------------------------------------------------------
MSCI EAFE & Canada Index*
- --------------------------------------------------------------------------------
1 year $ 12,616 26.16% 26.16%
- --------------------------------------------------------------------------------
5 year $ 14,955 49.55% 8.38%
- --------------------------------------------------------------------------------
10 year $ 18,226 82.26% 6.18%
- --------------------------------------------------------------------------------
</TABLE>
* The Morgan Stanley Capital International (MSCI) Europe, Australia, the Far
East (EAFE) & Canada Index is an unmanaged capitalization-weighted measure
of stock markets in Europe, Australia, the Far East and Canada. Index
returns assume dividends reinvested net of withholding tax and, unlike Fund
returns, do not reflect any fees or expenses.
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<PAGE>
APPENDIX 1
FUND SHARES OWNED BY NOMINEES AND DIRECTORS
Many of the Nominees and Directors own shares of the series of the
Corporation and of other funds in the Scudder Family of Funds and AARP Funds,
allocating their investments among such funds based on their individual
investment needs. The following table sets forth, for each Nominee and
Director, the number of shares owned in each series of the Corporation as of
January 31, 2000. The information as to beneficial ownership is based on
statements furnished to the Corporation by each Nominee and Director. Unless
otherwise noted, beneficial ownership is based on sole voting and investment
power. [Each Nominee's and Director's individual shareholdings of any series
of the Corporation constitute less than 1% of the shares outstanding of such
fund.] [As a group, the Directors and executive officers own less than 1% of
the shares of any series of the Corporation.]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
SCUDDER SCUDDER SCUDDER
EMERGING GREATER INTERNATIONAL SCUDDER
MARKETS EUROPE GROWTH AND SCUDDER SCUDDER SCUDDER LATIN SCUDDER PACIFIC
GROWTH GROWTH INCOME INTERNATIONAL INTERNATIONAL INTERNATIONAL AMERICA OPPORTUNITIES
FUND FUND FUND GROWTH FUND VALUE FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Henry P. Becton, Jr.(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Sheryle J. Bolton(2)
- -----------------------------------------------------------------------------------------------------------------------------------
William T. Burgin(3)
- -----------------------------------------------------------------------------------------------------------------------------------
Linda C. Coughlin(4)
- -----------------------------------------------------------------------------------------------------------------------------------
Dawn-Marie Driscoll(5)
- -----------------------------------------------------------------------------------------------------------------------------------
Edgar R. Fiedler(6)
- -----------------------------------------------------------------------------------------------------------------------------------
Keith R. Fox(7)
- -----------------------------------------------------------------------------------------------------------------------------------
William H. Luers(8)
- -----------------------------------------------------------------------------------------------------------------------------------
Kathryn L. Quirk(9)
- -----------------------------------------------------------------------------------------------------------------------------------
Joan Edelman Spero(10)
- -----------------------------------------------------------------------------------------------------------------------------------
Jean Gleason
Stromberg(11)
- -----------------------------------------------------------------------------------------------------------------------------------
Jean C. Tempel(12)
- -----------------------------------------------------------------------------------------------------------------------------------
Steven Zaleznick(13)
- -----------------------------------------------------------------------------------------------------------------------------------
[All Directors and
Officers as a Group]
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) As of January 31, 2000, Mr. Becton's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
(2) As of January 31, 2000, Ms. Bolton's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
(3) As of January 31, 2000, Mr. Burgin's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
(4) As of January 31, 2000, Ms. Coughlin's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
(5) As of January 31, 2000, Ms. Driscoll's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
(6) As of January 31, 2000, Mr. Fiedler's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
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(7) As of January 31, 2000, Mr. Fox's total aggregate holdings in each series
of the Corporation listed above and all other funds in the Scudder Family of
Funds and AARP Funds ranged between $___________ and $___________.
(8) As of January 31, 2000, Mr. Luers's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
(9) As of January 31, 2000, Ms. Quirk's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
(10) As of January 31, 2000, Ms. Spero's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
(11) As of January 31, 2000, Ms. Stromberg's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
(12) As of January 31, 2000, Ms. Tempel's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
(13) As of January 31, 2000, Mr. Zaleznick's total aggregate holdings in each
series of the Corporation listed above and all other funds in the Scudder
Family of Funds and AARP Funds ranged between $___________ and $___________.
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APPENDIX 2
Beneficial Ownership of Fund Shares
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<PAGE>
This proxy statement/prospectus is accompanied by the Acquiring Fund's
prospectus dated January 1, 2000, which was previously filed with the
Commission via EDGAR on December 28, 1999 (File No. 2-14400) and is
incorporated by reference herein.
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PART B
SCUDDER INTERNATIONAL FUND, INC.
- --------------------------------------------------------------------------------
Statement of Additional Information
[date]
- --------------------------------------------------------------------------------
Acquisition of the Assets of Scudder International Growth and Income Fund (the
"Acquired Fund"), a series of Scudder International Fund, Inc. (the
"Corporation")
345 Park Avenue
New York, NY 10154
By and in Exchange for Shares of Scudder International Fund (the "Acquiring
Fund"), a series of the Corporation
345 Park Avenue
New York, NY 10154
This Statement of Additional Information is available to the shareholders of the
Acquired Fund in connection with a proposed transaction whereby the Acquiring
Fund will acquire all or substantially all of the assets and all of the
liabilities of the Acquired Fund in exchange for shares of the Acquiring Fund
(the "Reorganization").
This Statement of Additional Information of the Corporation contains material
which may be of interest to investors but which is not included in the
Prospectus/Proxy Statement of the Corporation relating to the Reorganization.
This Statement of Additional Information consists of this cover page and the
following documents:
1. The Acquiring Fund's statement of additional information dated January 1,
2000, which was previously filed with the Securities and Exchange Commission
(the "Commission") via EDGAR on December 28, 1999 (File No. 2-14400) and is
incorporated by reference herein.
2. The Acquiring Fund's annual report to shareholders for the fiscal year ended
August 31, 1999, which was previously filed with the Commission via EDGAR on
November 1, 1999 (File No. 811-00642) and is incorporated by reference herein.
3. The Acquired Fund's prospectus dated January 1, 2000, which was previously
filed with the Commission via EDGAR on December 28, 1999 (File No. 2-14400) and
is incorporated by reference herein.
4. The Acquired Fund's statement of additional information dated January 1,
2000, which was previously filed with the Commission via EDGAR on December 28,
1999 (File No. 2-14400) and is incorporated by reference herein.
5. The Acquired Fund's annual report to shareholders for the fiscal year ended
August 31, 1999, which was previously filed with the Commission via EDGAR on
November 1, 1999 (File No. 811-00642) and is incorporated by reference herein.
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This Statement of Additional Information is not a prospectus. A Prospectus/Proxy
Statement dated ____________________ relating to the Reorganization may be
obtained by writing the Acquired Fund at Two International Place, Boston, MA
02110-4103 or by calling Scudder Investor Services, Inc. at 1-800-225-2470. This
Statement of Additional Information should be read in conjunction with the
Prospectus/Proxy Statement.
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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 state as
follows:
TENTH: Liability and Indemnification
To the fullest extent permitted by the Maryland General
Corporation Law and the Investment Company Act of 1940, no director
or officer of the Corporation shall be liable to the Corporation or
to its stockholders for damages. 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.
Nothing in these Articles of Amendment and Restatement shall
be deemed to (i) require a waiver of compliance with any provision
of the Securities Act of 1933, as amended, or the Investment Company
Act of 1940, as amended, or of any valid rule, regulation or order
of the
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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 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 force, 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.
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<PAGE>
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 hereafter 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
- -------- --------
(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.)
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<PAGE>
(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.)
(a)(13) Articles Supplementary dated June 7, 1999.
(Incorporated by reference to Post-Effective
Amendment No. 72 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.)
(3) Inapplicable.
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<PAGE>
(4) Agreement and Plan of Reorganization filed as
Exhibit A to Part A hereof.
(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.)
(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.)
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(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.)
(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.)
(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.)
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(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.)
(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) 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.)
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(c) 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.)
(11) Opinion and Consent of Dechert Price & Rhoads
is filed herein.
(12) Opinion and Consent of Willkie Farr & Gallagher
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.)
(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.)
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(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 is filed herein.
(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.)
(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.)
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(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.)
(14) Consent of PricewaterhouseCoopers LLP filed
herein.
(15) Inapplicable.
(16) Powers of Attorney filed herein.
(17) Form of Proxy filed herein.
Item 17. Undertakings.
(1) The undersigned registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this registration statement by any
person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act [17 CFR 230.145c], the
reoffering prospectus will contain the information called for by the
applicable registration form for C-8 350 reofferings by persons who
may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The undersigned registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an
amendment to the registration statement and will not be used until
the amendment is effective, and that, in determining any liability
under the 1933 Act, each post-effective amendment shall be deemed to
be a new registration statement for the securities offered therein,
and the offering of the securities at that time shall be deemed to
be the initial bona fide offering of them.
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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 3rd day of March, 2000.
SCUDDER INTERNATIONAL FUND, INC.
By: /s/ Nicholas Bratt
-------------------------------------
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/ Nicholas Bratt President March 3, 2000
- -------------------
Nicholas Bratt
/s/ Sheryle J. Bolton* Director March 3, 2000
- ----------------------
Sheryle J. Bolton
/s/ William T. Burgin* Director March 3, 2000
- ----------------------
William T. Burgin
/s/ Keith R. Fox* Director March 3, 2000
- -----------------
Keith R. Fox
/s/ William H. Luers* Director March 3, 2000
- ---------------------
William H. Luers
/s/ Kathryn L. Quirk* Director, Vice President and March 3, 2000
- --------------------- Assistant Secretary
Kathryn L. Quirk
/s/ Joan E. Spero Director March 3, 2000
- -----------------
Joan E. Spero
/s/ John R. Hebble Treasurer (Principal March 3, 2000
- ------------------- Financial and
John R. Hebble Accounting Officer)
*By: /s/ Sheldon A. Jones March 3, 2000
--------------------
-74-
<PAGE>
Sheldon A. Jones
Attorney-in-fact
*Executed pursuant to powers of attorney filed with the Registrant's
Registration Statement on Form N-14 as filed with the Commission electronically
herewith.
-75-
<PAGE>
EXHIBIT 11
DECHERT PRICE & RHOADS LETTERHEAD
March 3, 2000
Scudder International Fund, Inc. on behalf of
Scudder International Fund
345 Park Avenue
New York, NY 10154
Dear Sirs:
We have acted as counsel to Scudder International Fund, Inc., a
Maryland corporation (the "Corporation"), and we have a general familiarity
with the Corporation's business operations, practices and procedures. You
have asked for our opinion regarding the reclassification of shares of
capital stock of the Corporation into shares of the International Shares
class of Scudder International Fund, a series of the Corporation, in
connection with the acquisition by Scudder International Fund of the assets
of Scudder International Growth and Income Fund, a series of Corporation,
which shares are registered on a Form N-14 Registration Statement (the
"Registration Statement") filed by the Corporation with the Securities and
Exchange Commission.
We have examined originals or certified copies, or copies otherwise
identified to our satisfaction as being true copies, of various corporate
records of the Corporation and such other instruments, documents and records as
we have deemed necessary in order to render this opinion. We have assumed the
genuineness of all signatures, the authenticity of all documents examined by us
and the correctness of all statements of fact contained in those documents.
On the basis of the foregoing, we are of the opinion that the shares of
the International Shares class of common stock of the Corporation being
registered under the Securities Act of 1933 in the Registration Statement will
be legally and validly issued, fully paid and non-assessable, upon transfer of
the assets of Scudder International Growth and Income Fund pursuant to the
terms of the Agreement and Plan of Reorganization included in the Registration
Statement.
We hereby consent to the filing of this opinion with and as part of the
Registration Statement.
Very truly yours,
/s/ DECHERT PRICE & RHOADS
-76-
<PAGE>
EXHIBIT 14
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Proxy
Statement/Prospectus and Statement of Additional Information constituting
parts of the Registration Statement on Form N-14 (the "Registration
Statement") of our report dated October 25, 1999, relating to the financial
statements and financial highlights appearing in the August 31, 1999 Annual
Report to Shareholders of Scudder International Fund which are also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Administrative Fee" in the Proxy
Statement/Prospectus and under the headings "Financial Highlights" in the
Prospectus and "Experts" in the Statement of Additional Information dated
January 1, 2000.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
March 1, 2000
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
Wee hereby consent to the incorporation by reference in the Proxy
Statement/Prospectus and Statement of Additional Information constituting
parts of this Registration Statement on Form N-14 (the "Registration
Statement") of our report dated October 15, 1999, relating to the financial
statements and financial highlights appearing in the August 31, 1999 Annual
Report to Shareholders of Scudder International Growth and Income Fund which
are also incorporated by reference into the Registration Statement. We also
consent to the references to us under the heading "Administrative Fee" in the
Proxy Statement/Prospectus and under the headings "Financial Highlights" in
the Prospectus and "Experts" in the Statement of Additional Information date
January 1, 2000.
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
March 1, 2000
<PAGE>
EXHIBIT 16
SCUDDER INTERNATIONAL FUND, INC.
POWERS OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated. By so signing, the undersigned in his capacity as
director or officer, or both, as the case may be, of the Registrant, does
hereby appoint Sheldon A. Jones, Allison R. Beakley, Caroline Pearson and John
Millette and each of them, severally, his/her true and lawful attorney and
agent to execute in his/her name, place and stead (in such capacity) any and
all amendments to the Registration Statement and any post-effective amendments
thereto and all instruments necessary or desirable in connection therewith, to
attest the seal of the Registrant thereon and to file the same with the
Securities and Exchange Commission. Each of said attorneys and agents shall
have power to act with or without the other and have full power and authority
to do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or advisable to be done in the
premises as fully and to all intents and the purposes as the undersigned might
or could do in person, hereby ratifying and approving the act of said attorneys
and agents and each of them.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Nicholas Bratt President February 8, 2000
- ------------------
Nicholas Bratt
/s/ Sheryle J. Bolton Director February 8, 2000
- ---------------------
Sheryle J. Bolton
/s/ William T. Burgin Director February 8, 2000
- ---------------------
William T. Burgin
/s/ Keith R. Fox Director February 8, 2000
- ----------------
Keith R. Fox
/s/ William H. Luers Director February 8, 2000
- --------------------
William H. Luers
/s/ Kathryn L. Quirk Director, Vice President and February 8, 2000
- -------------------- Assistant Secretary
Kathryn L. Quirk
/s/ Joan E. Spero Director February 8, 2000
- -----------------
Joan E. Spero
Treasurer (Principal February 8, 2000
- ------------------- Financial and
John R. Hebble Accounting Officer
-78-
<PAGE>
EXHIBIT 17
FORM OF PROXY
[LOGO] YOUR VOTE IS IMPORTANT!
[ADDRESS]
VOTE TODAY BY MAIL,
TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL FREE 1-XXX-XXX-XXXX OR
LOG ON TO WWW.PROXYWEB.COM/XXXXX
*** CONTROL NUMBER: XXX XXX XXX XXX XX ***
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
[ACQUIRED FUND]
[ACQUIRED TRUST/CORPORATION]
[address]
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
[time], on [date]
The undersigned hereby appoints __________, ____________ and ____________,
and each of them, the proxies of the undersigned, with the power of substitution
to each of them, to vote all shares of the [Acquired Fund] (the "Fund") which
the undersigned is entitled to vote at the Special Meeting of Shareholders of
the Fund to be held at the offices of Scudder Kemper Investments, Inc.,
[address], on [date] at [time], Eastern time, and at any adjournments thereof.
PLEASE SIGN AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED.
Dated ____________________,2000
PLEASE SIGN EXACTLY AS YOUR
NAME OR NAMES APPEAR. WHEN
SIGNING AS AN ATTORNEY,
EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE
GIVE YOUR FULL TITLE AS SUCH.
-------------------------------
[NAME]
[ADDRESS] -------------------------------
SIGNATURE(S) OF SHAREHOLDER(S)
<PAGE>
[LOGO] YOUR VOTE IS IMPORTANT!
[ADDRESS]
VOTE TODAY BY MAIL,
TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL FREE 1-XXX-XXX-XXXX OR
LOG ON TO WWW.PROXYWEB.COM/XXXXX
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
ALL PROPERLY EXECUTED PROXIES WILL BE VOTED AS DIRECTED. IF NO INSTRUCTIONS
ARE INDICATED ON A PROPERLY EXECUTED PROXY, THE PROXY WILL BE VOTED FOR APPROVAL
OF THE PROPOSALS.
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF [TRUSTEES/DIRECTORS] OF THE
[ACQUIRED FUND]. THE BOARD OF [TRUSTEES/DIRECTORS] RECOMMENDS A VOTE FOR THE
PROPOSALS.
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
FOR AGAINST ABSTAIN
PROPOSAL 1
To elect Trustees to the Board of Trustees
of the Portfolio to hold office until their
respective successors have been duly elected / / / / / /
and qualified or until their earlier
resignation or removal.
NOMINEES:
(01) __________, (02) ____________, (03) _________, (04) ______________, (05)
______________, (06) __________, (07) ______________, (08)_______________, (09)
____________.
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE
FOR ANY INDIVIDUAL NOMINEE, WRITE THE
NAME(S) ON THE LINE IMMEDIATELY BELOW.
- ----------------------------------------------------
PROPOSAL 2
To approve an Agreement and Plan of
Reorganization for the Fund whereby all or
substantially all of the assets an / / / / / /
liabilities of the Fund would be acquired by
[Acquiring Fund] in exchange for shares of
the [class] of the [Acquiring Fund].
PROPOSAL 3
To ratify the selection of
PricewaterhouseCoopers LLP as the Fund's / / / / / /
independent accountants for the current
fiscal year.
<PAGE>
THE PROXIES ARE AUTHORIZED TO VOTE IN THEIR DISCRETION ON ANY OTHER BUSINESS
WHICH MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS THEREOF.
PLEASE SIGN ON REVERSE SIDE
