INVESTMENT TRUST
DEFS14A, 2000-04-20
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<PAGE>

                                  SCHEDULE 14A
                                 (RULE 14A-101)
                     INFORMATION REQUIRED IN PROXY STATEMENT
                            SCHEDULE 14A INFORMATION

          Proxy Statement Pursuant to Section 14(A) of the Securities
                    Exchange Act of 1934 (Amendment No.__ )

Filed by the Registrant   [X]
Filed by a Party other than the Registrant   [ ]

Check the appropriate box:
[ ]  Preliminary Proxy Statement             [ ]   Confidential, for Use of the
                                                   Commission Only (as permitted
                                                   by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive additional materials
[ ]  Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

                                INVESTMENT TRUST
                (Name of Registrant as Specified in Its Charter)

                   (Name of Person(s) Filing Proxy Statement,
                          if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[X]  No fee required.
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1)  Title of each class of securities to which transaction applies:

(2)  Aggregate number of securities to which transaction applies:

(3)  Per unit price or other underlying value of transaction computed pursuant
     to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
     calculated and state how it was determined):

(4)  Proposed maximum aggregate value of transaction:

(5)  Total fee paid:

[ ]  Fee paid previously with preliminary materials:

[ ]  Check box if any part of the fee is offset as provided by Exchange Act
     Rule 0-11(a)(2) and identity the filing for which the offsetting fee was
     paid previously. Identify the previous filing by registration statement
     number, or the form or schedule and the date of its filing.

(1)  Amount previously paid:

(2)  Form, Schedule or Registration Statement no.:

(3)  Filing Party:

(4)  Date Filed:

<PAGE>
[AARP SCUDDER LOGO]


                               IMPORTANT NEWS FOR


                  SCUDDER GROWTH AND INCOME FUND SHAREHOLDERS

    While we encourage you to read the full text of the enclosed Proxy
Statement, here's a brief overview of some matters affecting your Fund that will
be the subject of a shareholder vote.

                          Q & A: QUESTIONS AND ANSWERS

Q: WHAT AM I BEING ASKED TO VOTE ON?


A: You are being asked to vote on three proposals: The election of a new Board
    of Trustees, the approval of a new investment management agreement, and the
    ratification of the selection of PricewaterhouseCoopers LLP as the
    independent accountants of your Fund for the current fiscal year. THE BOARD
    OF YOUR FUND UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF EACH PROPOSAL.


Q: WHY AM I BEING ASKED TO VOTE ON A NEW BOARD?


A: As part of a larger effort to restructure the Scudder Family of Funds, the
    Board of your Fund has voted in favor of creating a single board of
    trustees/directors responsible for most Scudder Funds. It is the Board's
    belief that this has the potential for increasing efficiency and benefiting
    fund shareholders. The Board also believes that a single board, responsible
    for overseeing most of the no-load funds advised by Scudder Kemper, can more
    effectively represent shareholder interests. THE BOARD OF YOUR FUND
    UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF EACH NOMINEE.


Q: WHY AM I BEING ASKED TO VOTE ON A NEW INVESTMENT MANAGEMENT AGREEMENT?


A: As part of the restructuring of the Scudder Family of Funds, Scudder has
    proposed combining your Fund with AARP Growth and Income Fund, which is
    managed by the same team of investment professionals. If this proposed
    combination is approved by shareholders of the AARP Fund, Scudder Kemper has
    proposed that the fee rates contained in the Fund's investment management
    agreement be revised to maintain the current effective fee rate of 0.45% at
    all asset levels up to $14.0 billion. This fee rate would be higher than
    that provided under the current fee schedule for the anticipated combined
    assets of the two Funds. However, as a result of a new administrative fee
    that has been approved by the Board,

<PAGE>

    YOUR FUND'S TOTAL OPERATING EXPENSES WOULD BE LOWER following the proposed
    combination. THE BOARD OF YOUR FUND UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN
    FAVOR OF THIS PROPOSAL.



Q: WHEN WILL THESE CHANGES TAKE EFFECT?



A: The Board expects that the proposed changes will take effect during the third
    calendar quarter of this year if the proposals are approved.


Q: ARE THERE OTHER PROPOSALS I WILL BE VOTING ON?

A: You are also being asked to ratify the selection of PricewaterhouseCoopers
    LLP as the independent accountants of your Fund for the current fiscal year.
    THE BOARD OF YOUR FUND UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THIS
    PROPOSAL.

Q: WHOM SHOULD I CALL FOR MORE INFORMATION ABOUT THIS PROXY STATEMENT?

A: Please call Shareholder Communications Corporation, your Fund's information
    agent, at 1-800-603-1915.
<PAGE>

                                                                  April 18, 2000



Dear Shareholder,



    To continue to provide you with the highest level of investment management
and service, we're making some important changes to the Scudder Funds. Scudder
Kemper Investments, with the strong support of your Fund's Board, is proposing a
series of measures to streamline the Scudder Family of Funds. The goals are to
reduce costs and make Scudder's lineup of fund offerings easier for investors to
utilize and understand. We believe these proposals will benefit Scudder Fund
shareholders over time. We need your participation in order to make the
necessary changes.



    Along with this letter, you'll find a packet of materials that we ask you to
read and, where applicable, fill out and return to us. The Q&A that begins on
the front cover of the proxy statement explains the proposals we're making, why
we're making them, and how they apply to your Scudder Fund. The packet also
contains a proxy card.



    After careful review, the members of your Fund's Board have unanimously
approved each of the proposals explained in the Q&A and described in the proxy
statement. THE BOARD RECOMMENDS THAT YOU READ THE ENCLOSED MATERIALS CAREFULLY
AND THEN VOTE FOR ALL THE PROPOSALS. (Because many of the funds for which
Scudder Kemper acts as investment manager are holding shareholder meetings, you
may receive more than one proxy card. If so, please vote each one.)



    Your vote is important to us. Once you've voted, please sign and date the
proxy card and return it in the enclosed postpaid envelope; or help us save time
and postage cost by voting on the Internet or by telephone -- the enclosed flyer
describes how. If we do not hear from you by May 17, our proxy solicitor may
contact you.



    Thank you for your response and for your continued investment in the Scudder
Funds.



Respectfully,



<TABLE>
<S>                                <C>
/s/ Edmond D. Villani              /s/ Linda C. Coughlin
Edmond D. Villani                  Linda C. Coughlin
Chief Executive Officer            President
Scudder Kemper Investments, Inc.   Investment Trust
</TABLE>

<PAGE>
                         SCUDDER GROWTH AND INCOME FUND
                           --------------------------

                   NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

    Please take notice that a Special Meeting of Shareholders (the "Meeting") of
Scudder Growth and Income Fund (the "Fund"), a series of Investment Trust (the
"Trust"), will be held at the offices of Scudder Kemper Investments, Inc., 13th
Floor, Two International Place, Boston, MA 02110-4103, on July 13, 2000, at
3:00 p.m., Eastern time, for the following purposes:

<TABLE>
<S>          <C>
PROPOSAL 1:  To elect Trustees of the Trust;
PROPOSAL 2:  To approve or disapprove a new investment management agree-
             ment between the Fund and Scudder Kemper
             Investments, Inc.; and
PROPOSAL 3:  To ratify the selection of PricewaterhouseCoopers LLP as
             the independent accountants for the Fund for the Fund's
             current fiscal year.
</TABLE>

    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,


                                     /s/ John Millette
                                     John Millette
                                     Secretary

April 18, 2000



    IMPORTANT -- WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD(S) AND
RETURN IT IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO POSTAGE (OR TO TAKE
ADVANTAGE OF THE ELECTRONIC OR TELEPHONIC VOTING PROCEDURES DESCRIBED ON THE
PROXY CARD(S)). YOUR PROMPT RETURN OF THE ENCLOSED PROXY CARD(S) (OR YOUR VOTING
BY OTHER AVAILABLE MEANS) MAY SAVE THE NECESSITY AND EXPENSE OF FURTHER
SOLICITATIONS. IF YOU WISH TO ATTEND THE MEETING AND VOTE YOUR SHARES IN PERSON
AT THAT TIME, YOU WILL STILL BE ABLE TO DO SO.

<PAGE>
                                INVESTMENT TRUST


                         SCUDDER GROWTH AND INCOME FUND


                            TWO INTERNATIONAL PLACE

                          BOSTON, MASSACHUSETTS 02110

                           --------------------------

                                PROXY STATEMENT

                           --------------------------

GENERAL


    This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees (the "Board," the Trustees of which are
referred to as the "Trustees") of Investment Trust (the "Trust") for use at the
Special Meeting of Shareholders of Scudder Growth and Income Fund (the "Fund"),
to be held at the offices of Scudder Kemper Investments, Inc. ("Scudder Kemper"
or the "Investment Manager"), 13th Floor, Two International Place, Boston,
Massachusetts 02110-4103, on July 13, 2000, at 3:00 p.m., Eastern time, and at
any and all adjournments thereof (the "Meeting"). This Proxy Statement, the
Notice of Meeting and the proxy card(s) are first being mailed to shareholders
on or about April 18, 2000 or as soon as practicable thereafter.


    In the descriptions of the Proposals below, the word "fund" is sometimes
used to mean an investment company or series thereof in general, and not the
Fund whose proxy statement this is. In addition, for simplicity, actions are
described in this Proxy Statement as being taken by the Fund, although all
actions are actually taken by the Trust on behalf of the Fund.

    THE FUND PROVIDES PERIODIC REPORTS TO ITS SHAREHOLDERS WHICH HIGHLIGHT
RELEVANT INFORMATION, INCLUDING INVESTMENT RESULTS AND A REVIEW OF PORTFOLIO
CHANGES. YOU MAY RECEIVE AN ADDITIONAL COPY OF THE MOST RECENT ANNUAL REPORT FOR
THE FUND AND A COPY OF ANY MORE RECENT SEMI-ANNUAL REPORT, WITHOUT CHARGE, BY
CALLING (800) 728-3337 OR WRITING THE FUND, C/O SCUDDER KEMPER INVESTMENTS,
INC., AT THE ADDRESS FOR THE FUND SHOWN AT THE BEGINNING OF THIS PROXY
STATEMENT.

BACKGROUND


    Proposals 1 and 2 in this Proxy Statement are part of a program proposed by
Scudder Kemper to restructure and streamline the management and operations of
the funds it advises. Scudder Kemper believes, and has advised the Board, that
the consolidation of certain funds advised by it would benefit fund
shareholders. Scudder Kemper has, therefore, proposed the consolidation of a

<PAGE>

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 also 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. Many of
the proposed consolidations are also expected to result in lower operating
expenses for shareholders of acquired funds. Subject to the approval of the
shareholders of AARP Growth and Income Fund, the Fund will acquire the assets of
AARP Growth and Income Fund as part of the restructuring program.


    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 the AARP Funds and for the open-end,
directly-distributed, no-load Scudder Funds would increase efficiency and
benefit fund shareholders. This initiative is described in greater detail in
Proposal 1 below. In Proposal 2 below, shareholders of the Fund are being asked
to approve a new investment management agreement between the Fund and Scudder
Kemper. As described below, the new agreement is identical to the Fund's current
agreement, except for the dates of execution and termination and except for the
fee rates.

                       PROPOSAL 1:  ELECTION OF TRUSTEES

    At the Meeting, as part of the overall restructuring effort outlined above,
shareholders of the Fund will be asked to elect nine individuals to constitute
the Board of Trustees of the Trust. These individuals were nominated after a
careful and deliberate selection process by the present Board of Trustees of the
Trust. The nominees for election, who are listed below, include seven persons
who currently serve as Independent Trustees (as defined below) of the Trust or
as independent trustees/directors of other no-load funds advised by Scudder
Kemper and who have no affiliation with Scudder Kemper or the American
Association of Retired Persons ("AARP"). The nominees listed below are being
nominated for election as trustees/directors of the AARP Funds and of the
open-end, directly-distributed, no-load Scudder Funds.

    As stated above, 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 above,
Scudder

                                       2
<PAGE>
Kemper has recommended, and the Board of Trustees has agreed, that shareholder
interests can more effectively be represented by a single board with
responsibility for overseeing substantially all of the Scudder no-load funds.
Creation of a single, consolidated board should also provide certain
administrative efficiencies and potential future cost savings for both the Fund
and Scudder Kemper.

    Election of each of the listed nominees for Trustee on the Board 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(s) will
vote for the election of the nominees named below unless authority to vote for
any or all of the nominees is withheld in the proxy. Each Trustee so elected
will serve as a Trustee of the Trust until the next meeting of shareholders, if
any, called for the purpose of electing Trustees and until the election and
qualification of a successor or until such Trustee sooner dies, resigns or is
removed as provided in the governing documents of the Trust. Each of the
nominees has indicated that he or she is willing to serve as a Trustee. If any
or all of the nominees should become unavailable for election due to events not
now known or anticipated, the persons named as proxies will vote for such other
nominee or nominees as the current Trustees may recommend. The following
paragraphs and table set forth information concerning the nominees and the
Trustees not standing for re-election. Each nominee's or Trustee's age is in
parentheses after his or her name. Unless otherwise noted, (i) each of the
nominees and Trustees has engaged in the principal occupation(s) noted in the
following paragraphs and table for at least the most recent five years, although
not necessarily in the same capacity, and (ii) the address of each nominee is
c/o Scudder Kemper Investments, Inc., Two International Place, Boston, MA
02110-4103.

NOMINEES FOR ELECTION AS TRUSTEES:

HENRY P. BECTON, JR. (56)


Henry P. Becton, Jr. is president of the WGBH Educational Foundation, producer
and distributor of public broadcasting programming and educational and
interactive software. He graduated from Yale University in 1965, where he was
elected to Phi Beta Kappa. He received his J.D. degree CUM LAUDE from Harvard
Law School in 1968. 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


                                       3
<PAGE>

for Economic Development, and a member of the Board of Visitors of the Dimock
Community Health Center, the Dean's Council of Harvard University's Graduate
School of Education, and the Massachusetts Bar. Mr. Becton is currently a
Trustee of the Trust and has served as a trustee or director 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 is currently a Trustee of the Trust and 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. Ms. Driscoll was recently named 1999 "Fund
Trustee of the Year" by Fund Directions, a publication of Institutional
Investor, Inc. 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 is currently a Trustee of the
Trust and has served as a trustee or director of various mutual funds advised by
Scudder Kemper since 1987.

                                       4
<PAGE>
EDGAR R. FIEDLER (70)

Edgar R. Fiedler is Senior Fellow and Economic Counsellor at The Conference
Board. He served as the Board's Vice President, Economic Research from 1975 to
1986 and as Vice President and Economic Counsellor from 1986 to 1996.
Mr. Fiedler's business experience includes positions at Eastman Kodak in
Rochester (1956-59), Doubleday and Company in New York City (1959-60), and
Bankers Trust Company in New York City (1960-69). He also served as Assistant
Secretary of the Treasury for Economic Policy from 1971 to 1975. Mr. Fiedler
graduated from the University of Wisconsin in 1951. He received his M.B.A. from
the University of Michigan and his doctorate from New York University. During
the 1980's, Mr. Fiedler was an Adjunct Professor of Economics at the Columbia
University Graduate School of Business. From 1990 to 1991, he was the Stephen
Edward Scarff Distinguished Professor at Lawrence University in Wisconsin.
Mr. Fiedler is a Director of The Stanley Works, Harris Insight Funds, Brazil
Fund, and PEG Capital Management, Inc. He has served as a board member of
various mutual funds advised by Scudder Kemper, including the AARP Investment
Program Funds, since 1984.

KEITH R. FOX (46)

Keith R. Fox is the managing partner of the Exeter Group of Funds, a series of
private equity funds with offices in New York and Boston, which he founded in
1986. The Exeter Group invests in a wide range of private equity situations,
including venture capital, expansion financings, recapitalizations and
management buyouts. Prior to forming Exeter, Mr. Fox was a director and vice
president of BT Capital 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 or director 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

                                       5
<PAGE>
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 or director 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
Securities and Exchange Commission'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 Securities and Exchange Commission's Investment
Company Director's Roundtable. Ms. Stromberg has served as a board member of the
AARP Investment Program Funds since 1997.

JEAN C. TEMPEL (56)

Jean C. Tempel is a venture partner for Internet Capital Group, a strategic
network of Internet partnership companies whose principal offices are in Wayne,
Pennsylvania. Ms. Tempel concentrates on investment opportunities in the Boston
area. She spent 25 years in technology/operations executive management at
various New England banks, building custody operations and real time
financial/securities processing systems, most recently as Chief Operations
Officer at The Boston Company. From 1991 until 1993 she was president/COO

                                       6
<PAGE>
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 is currently a Trustee of the Trust and
has served as a trustee or director 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 AARP, which included tax and
legal matters affecting non-profit organizations, contract negotiations,
publication review and public policy litigation. In 1979, he joined 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.

                                       7
<PAGE>
TRUSTEES NOT STANDING FOR RE-ELECTION:


<TABLE>
<CAPTION>
                                PRINCIPAL OCCUPATION OR
                                     EMPLOYMENT AND
NAME (AGE)                           DIRECTORSHIPS         PRESENT OFFICE WITH THE TRUST
- ----------                      ------------------------   -----------------------------
<S>                             <C>                        <C>

Peter B. Freeman (67).........  Corporate Director and     Trustee; Mr. Freeman serves
                                Trustee.                   on the boards of various
                                                           other trusts or corporations
                                                           whose funds are advised by
                                                           Scudder Kemper.

George M. Lovejoy, Jr. (69)...  President and Director,    Trustee; Mr. Lovejoy serves
                                Fifty Associates (real     on the boards of various
                                estate corporation).       other trusts or corporations
                                                           whose funds are advised by
                                                           Scudder Kemper.

Wesley W. Marple, Jr. (68)....  Professor of Business      Trustee; Mr. Marple serves
                                Administration,            on the board of various other
                                Northeastern University,   trusts or corporations whose
                                College of Business        funds are advised by Scudder
                                Administration.            Kemper.

Kathryn L. Quirk (47)*........  Vice President and         Trustee, Vice President and
                                Assistant Secretary;       Assistant Secretary;
                                Managing Director of       Ms. Quirk serves on the
                                Scudder Kemper.            boards of various other
                                                           trusts or corporations whose
                                                           funds are advised by Scudder
                                                           Kemper.
</TABLE>


- ------------------------

* Nominee or Trustee considered by the Trust and its counsel to be an
  "interested person" (as defined in the Investment Company Act of 1940, as
  amended (the "1940 Act")) of the Trust, Scudder Kemper or AARP because of his
  or her employment by Scudder Kemper or AARP, and, in some cases, holding
  offices with the Trust.

                                       8
<PAGE>
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 the Meeting is comprised of
two individuals who are considered "interested" Trustees, and seven individuals
who have no affiliation with Scudder Kemper or AARP and who are called
"independent" Trustees (the "Independent Trustees"). The Securities and Exchange
Commission (the "SEC") has recently proposed a rule that would require a
majority of the board members of a fund to be "independent" if the fund were to
take advantage of certain exemptive rules under the 1940 Act. On the proposed
Board of Trustees, if approved by shareholders, nearly 78% will be Independent
Trustees. The Independent Trustees have been nominated solely by the current
Independent Trustees of the Trust, a practice also favored by the SEC. The
Independent Trustees have primary responsibility for assuring that the Trust is
managed in the best interests of its shareholders.

    The Trustees meet several times during the year to review the investment
performance of the Fund and other operational matters, including policies and
procedures designed to assure compliance with regulatory and other requirements.
In 1999, the Trustees of the Trust conducted over 20 meetings to deal with fund
issues (including committee and subcommittee meetings and special meetings of
the Independent Trustees). Furthermore, the Independent Trustees review the fees
paid to the Investment Manager and its affiliates for investment advisory
services and other administrative and shareholder services. The Trustees have
adopted several policies and practices which help ensure their effectiveness and
independence in reviewing fees and representing shareholders. Many of these are
similar to those suggested in the Investment Company Institute's 1999 Report of
the Advisory Group on Best Practices for Fund Directors (the "Advisory Group
Report"). For example, the Independent Trustees select independent legal counsel
to work with them in reviewing fees, advisory and other contracts and overseeing
fund matters. The Trustees are also assisted in this regard by the funds'
independent public accountants and other independent experts retained from time
to time for this purpose. The Independent Trustees regularly meet privately with
their counsel and other advisors. In addition, the Independent Trustees from
time to time have appointed task forces and subcommittees from their members to
focus on particular matters such as investment, accounting and shareholder
servicing issues.

    The Board of the Trust has an Audit Committee and a Committee on Independent
Trustees, the responsibilities of which are described below. In addition, the
Board has an Executive Committee and a Valuation Committee.

                                       9
<PAGE>
AUDIT COMMITTEE

    The Audit Committee reviews with management and the independent public
accountants for each series of the Trust, among other things, the scope of the
audit and the internal controls of each series 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 Trust to the Board, reviews the independence of such firm and, in
general, considers and reports to the Board on matters regarding the accounting
and financial reporting practices for each series of the Trust.


    As suggested by the Advisory Group Report, the Trust's Audit Committee is
comprised of only Independent Trustees (all of whom serve on the committee),
meets privately with the independent accountants of each series of the Trust,
will receive annual representations from the accountants as to their
independence, and has a written charter that delineates the committee's duties
and powers.


COMMITTEE ON INDEPENDENT TRUSTEES

    The Board of Trustees of the Trust has a Committee on Independent Trustees,
comprised of all of the Independent Trustees, charged with the duty of making
all nominations of Independent Trustees, establishing Trustees' compensation
policies, retirement policies and fund ownership policies, reviewing Trustees'
affiliations and relationships annually, and periodically assessing and
reviewing evaluations of the Board of Trustees' effectiveness.

ATTENDANCE

    As noted above, the Trustees of the Trust conducted over 20 meetings in
calendar year 1999 to deal with fund matters, including various committee and
subcommittee meetings and special meetings of the Independent Trustees. The full
Board of Trustees of the Trust met nine times, the Audit Committee met two times
and the Committee on Independent Trustees met one time during calendar year
1999. Each then current Trustee attended 100% of the total meetings of the full
Board of Trustees held during calendar year 1999. In addition, each Independent
Trustee attended 100% of the total meetings of the Audit Committee and the
Committee on Independent Trustees held during that period.

                                       10
<PAGE>
OFFICERS

    The following persons are officers of the Trust:


<TABLE>
<CAPTION>
                               PRESENT OFFICE WITH THE TRUST;      YEAR FIRST BECAME
NAME (AGE)                  PRINCIPAL OCCUPATION OR EMPLOYMENT(1)    AN OFFICER(2)
- ----------                  -------------------------------------  -----------------
<S>                         <C>                                    <C>
Bruce F. Beaty (41).......  Vice President; Managing Director of
                            Scudder Kemper                                1995

Jennifer P. Carter (37)...  Vice President; Vice President of
                            Scudder Kemper                                1999

Linda C. Coughlin (48)....  Trustee and President; Managing
                            Director of Scudder Kemper                    2000

James Eysenbach (38)......  Vice President; Managing Director of
                            Scudder Kemper                                1999

William F. Gadsden (45)...  Vice President; Managing Director of
                            Scudder Kemper                                1996

John R. Hebble (41).......  Treasurer; Senior Vice President of
                            Scudder Kemper                                1998

Valerie F. Malter (41)....  Vice President; Managing Director of
                            Scudder Kemper                                1995

Ann M. McCreary (43)......  Vice President; Managing Director of
                            Scudder Kemper                                1998

Kathleen T. Millard         Vice President; Managing Director of
(39)......................  Scudder Kemper                                1999

John Millette (37)........  Vice President and Secretary; Vice
                            President of Scudder Kemper                   1999

Caroline Pearson (38).....  Assistant Secretary; Senior Vice
                            President of Scudder Kemper;
                            Associate, Dechert Price & Rhoads
                            (law firm) 1989 to 1997                       1997

Kathryn L. Quirk (47).....  Trustee, Vice President and Assistant
                            Secretary; Managing Director of
                            Scudder Kemper                                1997
</TABLE>


                                       11
<PAGE>


<TABLE>
<CAPTION>
                               PRESENT OFFICE WITH THE TRUST;      YEAR FIRST BECAME
NAME (AGE)                  PRINCIPAL OCCUPATION OR EMPLOYMENT(1)    AN OFFICER(2)
- ----------                  -------------------------------------  -----------------
<S>                         <C>                                    <C>
Robert Tymoczko (30)......  Vice President; Senior Vice President
                            of Scudder Kemper; full-time student
                            (1995-1997)                                   1999
</TABLE>


- ------------------------

(1) Unless otherwise stated, all of the officers have been associated with their
    respective companies for more than five years, although not necessarily in
    the same capacity.

(2) The President, Treasurer and Secretary each holds office until his or her
    successor has been duly elected and qualified, and all other officers hold
    offices in accordance with the By-laws of the Trust.

COMPENSATION OF TRUSTEES AND OFFICERS

    The Trust pays each Independent Trustee an annual Trustee's fee for each
series of the Trust plus specified amounts for Board and committee meetings
attended and reimburses for expenses related to Fund business.


    Each Independent Trustee of the Trust receives an annual Trustee's fee of
$2,400 per fund if the fund's total net assets do not exceed $100 million,
$4,800 per fund if the fund's total net assets exceed $100 million but do not
exceed $1 billion, and $7,200 per fund if the fund's total net assets exceed $1
billion. The lead Trustee of the Trust receives an additional annual retainer
fee of $500 per fund. Each Independent Trustee of the Trust also receives fees
of $150 per fund for attending each Board meeting, Audit Committee meeting or
other meeting held for the purpose of considering arrangements between the Trust
and Scudder Kemper, or any of its affiliates. Each Independent Trustee of the
Trust also receives $75 per fund for all other committee meetings attended. The
newly-constituted Board of the Trust may determine to change its compensation
structure.



    The Independent Trustees are not entitled to benefits under any pension or
retirement plan. A one-time benefit will be provided to those Independent
Trustees who have volunteered to leave the board prior to their normal
retirement date in order to facilitate the nomination of a consolidated board.
Inasmuch as Scudder Kemper will also benefit from the administrative
efficiencies of a consolidated board, Scudder Kemper has agreed to pay one-half
of the cost of this benefit. The remaining portion, ranging from $8,702 to
$17,404 per Trustee, will be paid by the Fund.



    Scudder Kemper supervises the Trust's investments, pays the compensation and
certain expenses of its personnel who serve as Trustees and officers of the
Trust and receives a management fee for its services. Several of the Trust's


                                       12
<PAGE>

officers and Trustees are also officers, directors, employees or stockholders of
Scudder Kemper and participate in the fees paid to that firm, although the Trust
does not make any direct payments to them other than for reimbursement of travel
expenses in connection with their attendance at certain Board and committee
meetings.


    The following Compensation Table provides in tabular form the following
data:

    COLUMN (1) All Trustees who receive compensation from the Trust.

    COLUMN (2) Aggregate compensation received by each Trustee of the Trust
during calendar year 1999.

    COLUMN (3) Total compensation received by each Trustee from funds managed by
Scudder Kemper (collectively, the "Fund Complex") during calendar year 1999.

                               COMPENSATION TABLE


<TABLE>
<CAPTION>
                                    AGGREGATE         TOTAL COMPENSATION
                                   COMPENSATION        FROM FUND COMPLEX
TRUSTEE                         (NUMBER OF SERIES)      PAID TO TRUSTEE
- -------                         ------------------   ---------------------
<S>                             <C>                  <C>
Henry P. Becton Jr............  $31,110 (8 series)    $140,000 (30 funds)

Dawn-Marie Driscoll...........  $33,218 (8 series)    $150,000 (30 funds)

Peter B. Freeman..............  $31,025 (8 series)    $179,783 (46 funds)

George M. Lovejoy, Jr.........  $31,025 (8 series)    $153,200 (31 funds)

Wesley W. Marple, Jr..........  $31,025 (8 series)    $140,000 (30 funds)

Jean C. Tempel................  $31,025 (8 series)    $140,000 (30 funds)
</TABLE>


 THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF THE FUND VOTE FOR
                                 EACH NOMINEE.

       PROPOSAL 2:  APPROVAL OF PROPOSED INVESTMENT MANAGEMENT AGREEMENT

INTRODUCTION

    Proposal 2 seeks shareholder approval of a new investment management
agreement between Scudder Kemper and the Fund.

                                       13
<PAGE>

    Scudder Kemper acts as the investment manager to the Fund pursuant to an
investment management agreement entered into by the Fund and Scudder Kemper. The
investment management agreement currently in effect between the Fund and Scudder
Kemper is referred to in this Proxy Statement as the "Current Investment
Management Agreement." The Board of the Trust is proposing that shareholders of
the Fund approve a new investment management agreement between the Fund and
Scudder Kemper (the "Proposed Investment Management Agreement" and together with
the Current Investment Management Agreement, the "Investment Management
Agreements"). (A copy of the Proposed Investment Management Agreement, marked to
show changes against the Current Investment Management Agreement, is attached
hereto as Exhibit A.) The material terms of the Investment Management Agreements
are described under "Description of the Investment Management Agreements" below.


    The information set forth in this Proxy Statement and the accompanying
materials concerning Scudder Kemper and its affiliates has been provided to the
Fund by Scudder Kemper.

    The Current Investment Management Agreement is identical to the Proposed
Investment Management Agreement, except for (i) the dates of execution and
termination; and (ii) the fee structure. The Proposed Investment Management
Agreement includes a new fee rate, which in some circumstances may be higher
than the current rate applicable to the Fund. The current and proposed fee rates
are described further in "Differences Between the Current and Proposed
Investment Management Agreements" below. The proposal to modify the structure of
the fees paid under the Fund's investment management agreement is related to an
overall proposal to consolidate the Fund and AARP Growth and Income Fund. Under
the proposal, the shareholders of the Fund following the consolidation would
experience reduced expenses. While the fee payable pursuant to the Proposed
Investment Management Agreement will result in a higher fee rate at certain
asset levels than under the Current Investment Management Agreement, the
effective fee rate at current asset levels following the consolidation will not
increase, and total expenses of the Fund following the consolidation are
expected to be lower than current levels. The Fund will have lower total
expenses due primarily to the adoption of an administrative fee (described
below).


BOARD'S RECOMMENDATION


    On February 7, 2000, the Board of Trustees of the Trust, including the
Independent Trustees, unanimously voted to approve the Proposed Investment

                                       14
<PAGE>
Management Agreement and to recommend approval to the shareholders of the Fund.

    For information about the Board's deliberations and the reasons for their
recommendation, please see "Board's Evaluation" below.

BOARD'S EVALUATION

    Scudder Kemper first proposed the Proposed Investment Management Agreement
to the Independent Trustees of the Trust at a meeting held on October 5, 1999.
The Proposed Investment Management Agreement was presented to the Trustees and
considered by them as part of a broader initiative by Scudder Kemper to
restructure many of the mutual funds offered through its no-load distribution
channels. This initiative was undertaken in response to competitive developments
in the mutual fund industry and 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 administration agreements, covering, for a
    single fee rate, substantially all services required for the operation of
    the funds (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.


    As part of this restructuring program, Scudder Kemper has proposed that the
Fund be combined with AARP Growth and Income Fund, a fund currently offered
through the AARP Investment Program. AARP Growth and Income Fund pursues
substantially identical investment objectives and policies as the Fund and is
managed by the same team of managers. This proposed combination, which is
subject to approval by shareholders of AARP Growth and Income Fund, would
increase the Fund's net assets substantially, from approximately $6.8 billion to
approximately $13.0 billion, based on December 31, 1999 net assets. As a result,
the Trustees of the Trust believe that it would be appropriate to restructure
the fee and expense arrangements of the Fund.


                                       15
<PAGE>
    Following discussions with representatives of Scudder Kemper, the Trustees
approved the terms of the Proposed Investment Management Agreement and a new
administration agreement to take effect at the time the combination of the AARP
Growth and Income Fund and the Fund is completed. EACH OF THESE AGREEMENTS IS
DESCRIBED IN GREATER DETAIL HEREIN, BUT THE NET EFFECT OF IMPLEMENTING THESE
AGREEMENTS WOULD BE A REDUCTION IN THE FUND'S ESTIMATED CURRENT OPERATING
EXPENSES, AS SHOWN IN TABLES SET FORTH UNDER "DIFFERENCES BETWEEN THE CURRENT
AND PROPOSED INVESTMENT MANAGEMENT AGREEMENTS."

    Under the Current Investment Management Agreement's fee schedule, the
increase in net assets resulting from the proposed combination of funds would
result in a reduction of the effective advisory fee payable to Scudder Kemper
from 0.45% to 0.41%. The Independent Trustees believe that the current advisory
fee schedule did not contemplate the acquisition of a significant amount of
assets already managed by Scudder Kemper and, therefore, that the resulting
reduction in the effective advisory fee rate would not be fair to Scudder
Kemper. In this regard, they note that the current effective advisory fee rate
of 0.45% is below the average for competitive funds of similar size to the Fund
and also for competitive funds similar in size to the Fund following its
acquisition of the assets of AARP Growth and Income Fund. Consequently, the
Independent Trustees have approved the terms of the Proposed Investment
Management Agreement, which includes a new advisory fee schedule that maintains
the current effective advisory fee rate for all net asset levels up to
$14 billion, with reductions in marginal rates applying to assets beyond that
level should assets grow following the combination. In this regard, the
Independent Trustees also noted that shareholders would continue to benefit from
the current favorable effective advisory fee rate in the event that assets of
the combined fund decline below $6.92 billion, at which point the Current
Investment Management Agreement's fee schedule provides an effective fee rate
higher than 0.45%. In determining that the proposed new fee schedule was fair
and equitable to shareholders, the Independent Trustees also considered the
benefits of reduced total operating expenses provided by the proposed new
administration agreement described below, which would not have been available to
the Fund without a restructuring of the investment management fee schedule.

    The Independent Trustees were assisted in their review of the Proposed
Investment Management Agreement 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 Trustees met
in person or by telephone on seven occasions (including committee meetings) to
review and discuss this and Scudder Kemper's other related proposals, both among
themselves and with representatives of Scudder Kemper. In the

                                       16
<PAGE>
course of their review, the Independent Trustees requested and received
substantial additional information and suggested numerous changes in Scudder
Kemper's proposals, many of which were accepted.

    BASED ON ALL OF THE FOREGOING, THE BOARD OF TRUSTEES, INCLUDING ALL OF THE
INDEPENDENT TRUSTEES, APPROVED THE TERMS OF THE PROPOSED INVESTMENT MANAGEMENT
AGREEMENT, AND UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE FUND APPROVE THE
TERMS OF THE PROPOSED INVESTMENT MANAGEMENT AGREEMENT.

DESCRIPTION OF THE INVESTMENT MANAGEMENT AGREEMENTS

    Except as disclosed below, the Current and Proposed Investment Management
Agreements are identical. Under the Investment Management Agreements, Scudder
Kemper provides the Fund with continuing investment management services. The
Investment Manager also determines which securities should be purchased, held,
or sold, and what portion of the Fund's assets should be held uninvested,
subject to the Trust's governing documents, investment policies and
restrictions, the provisions of the 1940 Act, and such policies and instructions
as the Trustees may have determined.

    Each Investment Management Agreement provides that the Investment Manager
will provide portfolio management services, place portfolio transactions in
accordance with policies expressed in the Fund's registration statement, pay the
Fund's office rent, and render significant administrative services on behalf of
the Fund (not otherwise provided by third parties) necessary for the Fund to
operate as an open-end investment company.

    The administrative services provided include, but are not limited to,
preparing reports to and meeting materials for the Board and reports and notices
to Fund shareholders; supervising, negotiating contractual arrangements with, to
the extent appropriate, and monitoring the performance of various third-party
and affiliated service providers to the Fund (such as the Fund's transfer and
pricing agents, fund accounting agent, custodian, accountants and others) and
other persons in any capacity deemed necessary or desirable to Fund operations;
preparing and making filings with the SEC and other regulatory and
self-regulatory organizations, including but not limited to, preliminary and
definitive proxy materials, post-effective amendments to the Registration
Statement, semi-annual reports on Form N-SAR and notices pursuant to Rule 24f-2
under the 1940 Act; overseeing the tabulation of proxies by the Fund's transfer
agent; assisting in the preparation and filing of the Fund's federal, state and
local tax returns; preparing and filing the Fund's federal excise tax returns
pursuant to Section 4982 of the Internal Revenue Code of 1986, as amended;
providing assistance with investor and public relations matters; monitoring the
valuation of portfolio securities and the calculation of net asset value; and

                                       17
<PAGE>
monitoring the registration of shares of the Fund under applicable federal and
state securities laws.

    The administrative services provided also include, without limitation,
maintaining or causing to be maintained for the Fund all books, records and
reports and any other information required under the 1940 Act, to the extent
such books, records and reports and other information are not maintained by the
Fund's custodian or other agents of the Fund; assisting in establishing
accounting policies of the Fund; assisting in the resolution of accounting
issues that may arise with respect to the Fund's operations and consulting with
the Fund's independent accountants, legal counsel and other agents as necessary
in connection therewith; establishing and monitoring the Fund's operating
expense budgets; reviewing the Fund's bills; processing the payment of bills
that have been approved by an authorized person; assisting the Fund in
determining the amount of dividends and distributions available to be paid by
the Fund to its shareholders, preparing and arranging for the printing of
dividend notices to shareholders, and providing the transfer and dividend paying
agent, the custodian, and the accounting agent with such information as is
required for such parties to effect the payment of dividends and distributions;
and otherwise assisting the Fund in the conduct of its business, subject to the
direction and control of the Board.

    Each Investment Management Agreement also provides that the Investment
Manager is not required to pay any expenses of any activity primarily intended
to result in the sale of Fund securities if and to the extent that (i) the
expenses are to be borne by a principal underwriter acting as the distributor;
or (ii) the Fund has adopted a Rule 12b-1 Plan providing for the assumption of
some or all of those expenses. Under each Investment Management Agreement, the
Fund is responsible for other expenses, including organizational expenses
(including out-of-pocket expenses, but not including the Investment Manager's
overhead or employee costs); brokers' commissions or other costs of acquiring or
disposing of any portfolio securities of the Fund; legal, auditing and
accounting expenses; payment for portfolio pricing or valuation services to
pricing agents, accountants, bankers and other specialists, if any; taxes and
governmental fees; the fees and expenses of the Fund's transfer agent; expenses
of preparing share certificates and any other expenses, including clerical
expenses, of issuance, offering, distribution, sale, redemption or repurchase of
shares; the expenses of and fees for registering or qualifying securities for
sale; the fees and expenses of Independent Trustees; the cost of printing and
distributing reports, notices and dividends to current shareholders; and the
fees and expenses of the Fund's custodians, subcustodians, accounting agent,
dividend disbursing agents and registrars.

                                       18
<PAGE>

    The Fund may arrange to have third parties assume all or part of the
expenses of sale, underwriting and distribution of shares of the Fund. The Fund
is also responsible for expenses of shareholders' and other meetings and its
expenses incurred in connection with litigation and the legal obligation it may
have to indemnify officers and Trustees of the Trust with respect thereto. The
Fund is also responsible for the maintenance of books and records which are
required to be maintained by the Fund's custodian or other agents of the Trust;
telephone, telex, facsimile, postage and other communications expenses; any
fees, dues and expenses incurred by the Fund in connection with membership in
investment company trade organizations; expenses of printing and mailing
prospectuses and statements of additional information of the Fund and
supplements thereto to current shareholders; costs of stationery; fees payable
to the Investment Manager and to any other Fund advisors or consultants;
expenses relating to investor and public relations; interest charges, bond
premiums and other insurance expenses; freight, insurance and other charges in
connection with the shipment of the Fund's portfolio securities; and other
expenses.


    The Investment Manager is responsible for the payment of the compensation
and expenses of all Trustees, officers and executive employees of the Fund
(including the Fund's share of payroll taxes) affiliated with the Investment
Manager and making available, without expense to the Fund, the services of such
Trustees, officers and employees as may duly be elected officers of the Trust,
subject to their individual consent to serve and to any limitations imposed by
law. The Fund is responsible for the fees and expenses (specifically including
travel expenses relating to Fund business) of Trustees not affiliated with the
Investment Manager. Under each Investment Management Agreement, the Investment
Manager also pays the Fund's share of payroll taxes, as well as expenses, such
as travel expenses (or an appropriate portion thereof), of Trustees and officers
of the Trust who are directors, officers or employees of the Investment Manager,
except to the extent that such expenses relate to attendance at meetings of the
Board of the Trust, or any committees thereof or advisers thereto, held outside
Boston, Massachusetts or New York, New York. During the Fund's most recent
fiscal year, no compensation, direct or otherwise (other than through fees paid
to the Investment Manager), was paid or became payable by the Trust to any of
its officers or Trustees who were affiliated with the Investment Manager.


    In return for the services provided by the Investment Manager as investment
manager and the expenses it assumes under each Investment Management Agreement,
the Fund pays the Investment Manager a management fee which is accrued daily and
payable monthly. The management fee rates for the Fund under the Investment
Management Agreements are described below under "Differences Between the Current
and Proposed Investment Management


                                       19
<PAGE>

Agreements." As of the end of the Fund's last fiscal year, the Fund had net
assets of $6,770,984,642 and paid an aggregate management fee to the Investment
Manager during such period of $32,454,854. If the Proposed Investment Management
Agreement had been in place, the aggregate management fee would have been
$32,672,860.



    Each Investment Management Agreement further provides that the Investment
Manager shall not be liable for any error of judgment or mistake of law or for
any loss suffered by the Fund in connection with matters to which such agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Manager in the performance of its
duties or from reckless disregard by the Investment Manager of its obligations
and duties under such agreement. Each Investment Management Agreement also
provides that purchase and sale opportunities, which are suitable for more than
one client of the Investment Manager, will be allocated by the Investment
Manager in an equitable manner. In addition, each Investment Management
Agreement identifies Scudder Kemper as the exclusive licensee of the rights to
use and sublicense the names "Scudder," "Scudder Kemper Investments, Inc.," and
"Scudder, Stevens & Clark, Inc." (together the "Scudder Marks"). Under this
license, the Trust, with respect to the Fund, has the non-exclusive right to use
and sublicense the Scudder name and marks as part of its name, and to use the
Scudder Marks in the Trust's investment products and services. This license
continues only as long as the Investment Management Agreement or any other
investment advisory agreement is in place, and only as long as Scudder Kemper
continues to be a licensee of the Scudder Marks from Scudder Trust Company,
which is the owner and licensor of the Scudder Marks. As a condition of the
license, the Trust, on behalf of the Fund, undertakes certain responsibilities
and agrees to certain restrictions, such as agreeing not to challenge the
validity of the Scudder Marks or ownership by Scudder Trust Company and the
obligation to use the name within commercially reasonable standards of quality.
In the event the agreement is terminated, the Trust, on behalf of the Fund, must
not use a name likely to be confused with those associated with the Scudder
Marks. Lastly, each Investment Management Agreement contains a provision stating
that it supersedes all prior agreements.


    Each Investment Management Agreement may be terminated without penalty upon
sixty (60) days' written notice by either party. The Fund may agree to terminate
its Investment Management Agreement either by the vote of a majority of the
outstanding voting securities of the Fund, or by a vote of the Board. As stated
above, each Investment Management Agreement automatically terminates in the
event of its assignment.

                                       20
<PAGE>

    Scudder Kemper or one of its predecessors has acted as the Investment
Manager for the Fund since the Fund commenced operations on May 31, 1929. The
Current Investment Management Agreement, which is dated September 7, 1998, was
last approved by the shareholders of the Fund on December 15, 1998. The Current
Investment Management Agreement was last submitted to shareholders in connection
with the B.A.T Transaction (as defined below). The Proposed Investment
Management Agreement was approved by the Board on February 7, 2000, to be
effective on or about August 14, 2000 and to continue in effect through
September 30, 2001.


THE PROPOSED INVESTMENT MANAGEMENT AGREEMENT

    The Proposed Investment Management Agreement for the Fund will be dated on
or about August 14, 2000. The effectiveness of the Proposed Investment
Management Agreement is contingent upon shareholder approval of the agreement.
Each of the effectiveness of the Proposed Investment Management Agreement and
the closing of the acquisition of the assets of AARP Growth and Income Fund by
the Fund is contingent upon the other. The Proposed Investment Management
Agreement will be in effect for an initial term ending on September 30, 2001,
and may continue thereafter from year to year only if specifically approved at
least annually by the vote of "a majority of the outstanding voting securities"
of the Fund, or by the Board and, in either event, the vote of a majority of the
Independent Trustees, cast in person at a meeting called for such purpose. In
the event that shareholders of the Fund do not approve the Proposed Investment
Management Agreement, the Current Management Agreement will remain in effect. In
such event, the Board of the Trust will take such further action as it deems to
be in the best interests of the shareholders of the Fund.

DIFFERENCES BETWEEN THE CURRENT AND PROPOSED INVESTMENT MANAGEMENT AGREEMENTS


    The Proposed Investment Management Agreement is identical to the Current
Investment Management Agreement, except for (i) the dates of execution and
termination; and (ii) the fee structure. Fees payable to the Investment Manager
under the Proposed Investment Management Agreement may be higher than the fees
payable by the Fund under the Current Investment Management Agreement at certain
Fund asset levels. The tables below set forth the fee rates and effective fee
rates paid by the Fund under the Current Investment Management Agreement and
proposed to be paid by the Fund under the Proposed Investment Management
Agreement. For the fiscal year ended December 31, 1999, the Fund paid the
Investment Manager an effective fee rate of 0.45% of average daily net assets.


                                       21
<PAGE>
                              CURRENT FEE SCHEDULE

<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS                   FEE RATE
- ------------------------                   --------
<S>                                        <C>
up to $500 million.......................   0.600 %
next $500 million........................   0.550 %
next $500 million........................   0.500 %
next $500 million........................   0.475 %
next $1 billion..........................   0.450 %
next $1.5 billion........................   0.425 %
next $1.5 billion........................   0.405 %
next $4 billion..........................   0.3875%
in excess of $10 billion.................   0.370 %
</TABLE>

                             PROPOSED FEE SCHEDULE

<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS                   FEE RATE
- ------------------------                   --------
<S>                                        <C>
up to $14 billion........................    0.450%
next $2 billion..........................    0.425%
in excess of $16 billion.................    0.400%
</TABLE>

                                       22
<PAGE>
                              EFFECTIVE FEE RATES

<TABLE>
<CAPTION>
                                         CURRENT EFFECTIVE   PROPOSED EFFECTIVE
ASSET LEVEL                                  FEE RATE             FEE RATE
- -----------                              -----------------   ------------------
<S>                                      <C>                 <C>
up to $500 million.....................        0.600%              0.450%
up to $1 billion.......................        0.575%              0.450%
up to $1.5 billion.....................        0.550%              0.450%
up to $2 billion.......................        0.531%              0.450%
up to $3 billion.......................        0.504%              0.450%
up to $4 billion.......................        0.484%              0.450%
up to $5 billion.......................        0.469%              0.450%
up to $6 billion.......................        0.458%              0.450%
up to $7 billion.......................        0.448%              0.450%
up to $8 billion.......................        0.440%              0.450%
up to $9 billion.......................        0.434%              0.450%
up to $10 billion......................        0.430%              0.450%
up to $12 billion......................        0.420%              0.450%
up to $14 billion......................        0.413%              0.450%
up to $16 billion......................        0.407%              0.447%
up to $18 billion......................        0.403%              0.442%
up to $20 billion......................        0.400%              0.436%
up to $22 billion......................        0.397%              0.430%
up to $24 billion......................        0.395%              0.424%
up to $26 billion......................        0.393%              0.417%
up to $28 billion......................        0.391%              0.411%
up to $30 billion......................        0.390%              0.404%
</TABLE>

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 Fund, both under the current fee structure and under the
proposed fee structure. Unless otherwise noted, the information is based on the
Fund's expenses and average daily net assets during the twelve months ended
September 30, 1999.


                                       23
<PAGE>
                        SHAREHOLDER TRANSACTION EXPENSES

<TABLE>
<CAPTION>
                                                CURRENT FEE   PROPOSED FEE
                                                 STRUCTURE     STRUCTURE
                                                -----------   ------------
<S>                                             <C>           <C>
Maximum sales charge (load) imposed on
  purchases (as a percentage of offering
  price)......................................    None          None
Maximum deferred sales charge (load) (as a
  percentage of purchase price or redemption
  proceeds)...................................    None          None
Maximum deferred sales charge (load) imposed
  on reinvested dividends.....................    None          None
Redemption fee (as a percentage of amount
  redeemed, if applicable)+...................    None          None
</TABLE>

                   ANNUAL FUND OPERATING EXPENSES (UNAUDITED)

<TABLE>
<CAPTION>
                                                CURRENT FEE   PROPOSED FEE
                                                 STRUCTURE     STRUCTURE*
                                                -----------   ------------
<S>                                             <C>           <C>
Management fees...............................      0.45%          0.45%
Distribution and/or service (12b-1) fees......        None           None
Other expenses................................      0.34%          0.30%
Total annual Fund operating expenses..........      0.79%          0.75%
</TABLE>

- ------------------------

+   There is a $5 wire service fee for receiving redemption proceeds via wire.


*   Expenses under the proposed fee structure reflect the implementation of an
    administrative fee for the Fund and the acquisition of the assets of AARP
    Growth and Income Fund by the Fund.



    In evaluating the Proposals, the Independent Trustees focused their
consideration on the 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
total annual expense ratio of 0.81% for the Fund.


                              EXAMPLES (UNAUDITED)


    Based on the costs above, the following examples are intended to help you
compare the cost of investing in the Fund under both the current fee structure
and the proposed fee structure with the cost of investing in other mutual funds.
The examples assume that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
examples also assume that your investment has a 5% return each year, you


                                       24
<PAGE>

reinvested all dividends and distributions, and the 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:


<TABLE>
<CAPTION>
                            CURRENT FEE   PROPOSED FEE
YEAR                         STRUCTURE    STRUCTURE**
- ----                        -----------   ------------
<S>                         <C>           <C>
1ST.......................     $ 81           $ 77
3RD.......................     $252           $240
5TH.......................     $439           $417
10TH......................     $978           $930
</TABLE>

- ------------------------


** Expenses under the proposed fee structure reflect the implementation of an
   administrative fee for the Fund and the acquisition of the assets of AARP
   Growth and Income Fund by the Fund.


ADMINISTRATION AGREEMENT

    As part of the restructuring effort, Scudder Kemper has also proposed the
adoption of administration agreements, each of which provides for payment of an
administrative fee, for most of the no-load funds advised by Scudder Kemper.
Under this fee arrangement, in exchange for payment by a fund of an
administrative fee, Scudder Kemper will provide or pay for substantially all
services that a fund normally requires for its operations, other than (i) those
provided under the fund's investment management agreement; (ii) certain other
expenses, such as taxes, brokerage, interest and extraordinary expenses; and
(iii) the fees and expenses of independent trustees/directors (including the
fees and expenses of their independent counsel). Such an administrative fee
would enable investors to determine with greater certainty the expense level
that a fund will experience and would transfer the risk of increased costs to
Scudder Kemper. Scudder Kemper has proposed that the Fund implement such an
administrative fee. The Fund's administrative fee will be 0.30% of average daily
net assets. The Fund's administration agreement will have an initial term of
three years, subject to earlier termination by the Trustees. IT IS ANTICIPATED
THAT THE TOTAL EXPENSE RATIO OF THE FUND WILL BE LOWER FOLLOWING IMPLEMENTATION
OF THE ADMINISTRATIVE FEE.

INVESTMENT MANAGER

    Scudder Kemper, an indirect subsidiary of Zurich Insurance Company
("Zurich") which resulted from the combination of the businesses of Scudder,
Stevens & Clark, Inc. ("Scudder") and Zurich Kemper Investments, Inc. ("Kemper")
in connection with a transaction between Scudder and Zurich (the "Scudder-Zurich
Transaction"), is one of the largest and most experienced investment counsel
firms in the United States. Scudder was established in 1919 as a partnership and
was restructured as a Delaware corporation in 1985.

                                       25
<PAGE>
Scudder launched its first fund in 1928. Kemper launched its first fund in 1948.
On September 7, 1998, the businesses of Zurich (including Zurich's 70% interest
in Scudder Kemper) and the financial services businesses of B.A.T Industries
p.l.c. ("B.A.T") were combined to form a new global insurance and financial
services holding company known as Zurich Financial Services, Inc. ("ZFS") (the
combination is referred to herein as the "B.A.T Transaction"). By way of a dual
holding company structure, former Zurich shareholders initially owned
approximately 57% of ZFS through Zurich Allied AG, with the balance initially
owned by former B.A.T shareholders through Allied Zurich p.l.c. Since
December 31, 1997, Scudder Kemper has served as investment adviser to both
Scudder and Kemper funds. As of January 1, 2000, Scudder Kemper has over $290
billion in assets under management. The principal source of Scudder Kemper's
income is professional fees received from providing continuing investment
advice. Scudder Kemper provides investment counsel for many individuals and
institutions, including insurance companies, endowments, industrial corporations
and financial and banking organizations.

    Founded in 1872, Zurich is a multinational, public corporation organized
under the laws of Switzerland. Its home office (and the home offices of Zurich
Financial Services and Zurich Allied AG) is located at Mythenquai 2, 8002
Zurich, Switzerland. Historically, Zurich's earnings have resulted from its
operations as an insurer as well as from its ownership of its subsidiaries and
affiliated companies (the "Zurich Insurance Group"). Zurich and the Zurich
Insurance Group provide an extensive range of insurance and financial products
and services and have branch offices and subsidiaries in more than 70 countries
throughout the world. Zurich owns approximately 70% of Scudder Kemper, with the
balance owned by Scudder Kemper's officers and employees.


    Rolf Huppi* is the Chairman of the Board and Director of Scudder Kemper,
Edmond D. Villani(#) is the President, Chief Executive Officer and Director,
Harold D. Kahn(#) is the Chief Financial Officer, Kathryn L. Quirk(#) is the
General Counsel, Chief Compliance Officer and Secretary, each of Nicholas
Bratt(#) and Lynn S. Birdsong(#) is a Corporate Vice President and Director, and
each of Laurence Cheng*, Gunther Gose* and William H. Bolinder(+) is a Director
of Scudder Kemper. The principal occupation of each of Edmond D. Villani, Harold
D. Kahn, Nicholas Bratt, Kathryn L. Quirk and Lynn S. Birdsong is serving as a
Managing Director of Scudder Kemper; the principal occupation of Rolf Huppi is
serving as Chairman and Chief Executive Officer of Zurich Allied AG and ZFS; the
principal occupation of Lawrence Cheng is serving as a senior partner of Capital
Z Partners, an investment fund; the principal occupation of Gunther Gose is
serving as the Chief Financial Officer

- ------------------------


*   Mythenquai 2, Zurich, Switzerland

(#)   345 Park Avenue, New York, New York

+   1400 American Lane, Schaumburg, Illinois

                                       26
<PAGE>

of ZFS; and the principal occupation of William H. Bolinder is serving as a
member of the Group Executive Board of ZFS. For information regarding each
Trustee and officer of the Trust who is associated with Scudder Kemper, please
see "Officers" in Proposal 1.


    The outstanding voting securities of Scudder Kemper are held of record 1.56%
by Zurich Insurance Company, a subsidiary of ZFS; 38.75% by Zurich Holding
Company of America ("ZHCA"), a subsidiary of Zurich; 32.34% by ZKI Holding Corp.
("ZKIH"), a subsidiary of Zurich; 19.62% by Stephen R. Beckwith, Lynn S.
Birdsong, Kathryn L. Quirk and Edmond D. Villani, in their capacity as
representatives (the "Management Representatives") of Scudder Kemper's
management holders and retiree holders pursuant to a Second Amended and Restated
Security Holders Agreement (the "Security Holders Agreement") among Scudder
Kemper, Zurich, ZHCA, ZKIH, the Management Representatives, the management
holders, the retiree holders and Edmond D. Villani, as trustee of Scudder Kemper
Investments, Inc. Executive Defined Contribution Plan Trust (the "Plan Trust");
and 7.73% by the Plan Trust. ZHCA owns 100% of the non-voting securities of
Scudder Kemper.

    Pursuant to the Security Holders Agreement (which was entered into in
connection with the Scudder-Zurich Transaction), the Board of Directors of
Scudder Kemper consists of four directors designated by ZHCA and ZKIH and three
directors designated by Management Representatives. The Security Holders
Agreement requires the approval of a majority of the Scudder-designated
directors for certain material and other decisions.

    Directors, officers and employees of Scudder Kemper from time to time may
enter into transactions with various banks, including the Fund's custodian bank.
It is Scudder Kemper's opinion that the terms and conditions of those
transactions will not be influenced by existing or potential custodial or other
Fund relationships.

    During the Fund's most recent fiscal year, no compensation, direct or
otherwise (other than through fees paid to Scudder Kemper), was paid or became
payable by the Trust to any of its officers or Trustees who were affiliated with
Scudder Kemper.


    Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of Scudder
Kemper, computes net asset value and prepares the financial statements for the
Fund. Scudder Service Corporation ("SSC"), also a subsidiary of Scudder Kemper,
is the transfer, shareholder servicing and dividend-paying agent for the Scudder
Shares of the Fund. Kemper Service Company ("KSC"), an affiliate of Scudder
Kemper, is the transfer, dividend and shareholder service agent for the Class R
shares of the Fund. Scudder Trust Company ("STC"), an affiliate of Scudder
Kemper, provides subaccounting and recordkeeping services for shareholder
accounts in certain retirement and employee benefit plans.


                                       27
<PAGE>

    Kemper Distributors, Inc. ("KDI"), an affiliate of Scudder Kemper, provides
services on behalf of the Class R shares of the Fund pursuant to an
Administrative Services Agreement. The Fund, on behalf of its Class R shares,
pays KDI an administrative service fee of up to 0.25% of the average daily net
assets of that class of the Fund and KDI then distributes this fee to financial
representatives that provide services for their clients who are investors
through applicable group retirement plans.



    The fees paid by the Fund to SFAC, SSC, KSC, STC and KDI during the last
fiscal year of the Fund were $418,401, $6,867,891, $4,873, $9,223,902 and
$3,482, respectively.



    SFAC, SSC, KSC, STC and KDI will continue to provide fund accounting,
transfer agency, subaccounting and recordkeeping and administrative services,
respectively, to the Fund, as described above, under the current arrangements
(with the implementation of an administrative fee, as described above) if the
Proposed Investment Management Agreement is approved.


    Exhibit B sets forth (as of each fund's last fiscal year end, unless
otherwise noted) the fees and other information regarding investment companies
advised by Scudder Kemper that have similar investment objectives to the Fund.

BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS


    To the maximum extent feasible, Scudder Kemper places orders for portfolio
transactions through Scudder Investor Services, Inc. ("SIS") Two International
Place, Boston, Massachusetts 02110, which in turn places orders on behalf of the
Fund with issuers, underwriters or other brokers and dealers. SIS is a
corporation registered as a broker/dealer and a subsidiary of Scudder Kemper.
SIS does not receive any commissions, fees or other remuneration from the Fund
for this service. When it can be done consistently with the policy of obtaining
the most favorable net results, it is Scudder Kemper's practice to place such
orders with broker/dealers who supply brokerage and research services to Scudder
Kemper or the Fund. The term "research services" includes advice as to the value
of securities; the advisability of investing in, purchasing or selling
securities; the availability of securities or purchasers or sellers of
securities; and analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and the performance of accounts.
Scudder Kemper is authorized when placing portfolio transactions, if applicable,
for the Fund to pay a brokerage commission in excess of that which another
broker might charge for executing the same transaction on account of execution
services and the receipt of research services. Scudder Kemper has negotiated
arrangements with certain broker/dealers pursuant to which a broker/dealer will
provide research services, to Scudder Kemper or the Fund in exchange for the
direction by Scudder Kemper of brokerage transactions to the broker/dealer.
These arrangements regarding receipt of research services generally apply to


                                       28
<PAGE>

equity security transactions. Scudder Kemper will not place orders with a
broker/dealer on the basis that the broker/dealer has or has not sold shares of
the Fund, although it may place such transactions with brokers and dealers that
sell shares of funds currently advised by Scudder Kemper. Allocation of
portfolio transactions is supervised by Scudder Kemper.


  THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF THE FUND VOTE IN
                           FAVOR OF THIS PROPOSAL 2.

     PROPOSAL 3: RATIFICATION OR REJECTION OF THE SELECTION OF INDEPENDENT
                                  ACCOUNTANTS

    The Board of the Trust, including a majority of the Independent Trustees,
has selected PricewaterhouseCoopers LLP to act as independent accountants of the
Fund for the 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 TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF THE FUND VOTE IN
                           FAVOR OF THIS PROPOSAL 3.

                             ADDITIONAL INFORMATION

GENERAL

    The cost of preparing, printing and mailing the enclosed proxy card(s) and
proxy statement and all other costs incurred in connection with the solicitation
of proxies, including any additional solicitation made by letter, telephone or
telegraph, will be paid by the Fund, except that Scudder Kemper will bear any
such expenses in excess of $3,230,929 (approximately $0.01274 per share), based
on December 31, 1999 net assets for the Fund). In addition to solicitation by
mail, certain officers and representatives of the Trust, officers and employees
of Scudder Kemper and certain financial services firms and their
representatives, who will receive no extra compensation for their services, may
solicit proxies by telephone, telegram or personally.

    Any shareholder giving a proxy has the power to revoke it by mail (addressed
to the Secretary at the principal executive office of the Fund, c/o Scudder
Kemper Investments, Inc., at the address for the Fund shown at the beginning of
this Proxy Statement) or in person at the Meeting, by executing a superseding
proxy or by submitting a notice of revocation to the Fund. All properly executed
proxies received in time for the Meeting will be voted as specified in the proxy
or, if no specification is made, in favor of each Proposal.

    The presence at the shareholders' meeting, in person or by proxy, of the
holders of one-third of the shares entitled to be cast of the Trust (for a
Trust-wide vote) or the Fund (for a Fund-by-Fund vote) shall be necessary and

                                       29
<PAGE>
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 the Proposal that
did not receive the vote necessary for its passage or to obtain a quorum. Any
such adjournment as to a matter requiring a Trust-wide or a Fund-by-Fund vote
will require, respectively, the affirmative vote of the holders of a majority of
the Trust's or Fund's shares present in person or by proxy at the Meeting. The
persons named as proxies will vote in favor of any such adjournment those
proxies which they are entitled to vote in favor of that Proposal and will vote
against any such adjournment those proxies to be voted against that Proposal.
For purposes of determining the presence of a quorum for transacting business at
the Meeting, abstentions and broker "non-votes" will be treated as shares that
are present but which have not been voted. Broker non-votes are proxies received
by the Fund from brokers or nominees when the broker or nominee has neither
received instructions from the beneficial owner or other persons entitled to
vote nor has discretionary power to vote on a particular matter. Accordingly,
shareholders are urged to forward their voting instructions promptly.

    Approval of Proposal 1 requires the affirmative vote of a plurality of the
shares of the Trust voting at the Meeting. Approval of Proposal 2 requires the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund. The term "majority of the outstanding voting securities," as defined in
the 1940 Act, and as used in this Proxy Statement, means: the affirmative vote
of the lesser of (1) 67% of the voting securities of the Fund present at the
meeting if more than 50% of the outstanding voting securities of the Fund are
present in person or by proxy or (2) more than 50% of the outstanding voting
securities of the Fund. Approval of Proposal 3 requires the affirmative vote of
a majority of the shares of the Fund voting at the Meeting.

    Abstentions and broker non-votes will not be counted in favor of, but will
have no other effect on, the vote for Proposal 1, and will have the effect of a
"no" vote on Proposals 2 and 3.

    Holders of record of the shares of the Fund at the close of business on
April 17, 2000 (the "Record Date"), as to any matter on which they are entitled
to vote, will be entitled to one vote per share on all business of the Meeting.
As of March 20, 2000, there were 259,779 Class R shares of the Fund outstanding
and 232,348,468 Scudder Shares of the Fund outstanding.


    Appendix 1 hereto sets forth the number of shares of each series of the
Trust owned directly or beneficially by the Trustees of the Board and by the
nominees for election.


                                       30
<PAGE>

    To the best of the Trust's knowledge, as of January 31, 2000, no person
owned beneficially more than 5% of the outstanding shares of any series of the
Trust, except as stated in Appendix 2.



    Shareholder Communications Corporation ("SCC") has been engaged to assist in
the solicitation of proxies, at an estimated cost of $342,633. As the Meeting
date approaches, certain shareholders of the Fund may receive a telephone call
from a representative of SCC if their votes have not yet been received.
Authorization to permit SCC to execute proxies may be obtained by telephonic or
electronically transmitted instructions from shareholders of the Fund. Proxies
that are obtained telephonically will be recorded in accordance with the
procedures set forth below. The Trustees believe that these procedures are
reasonably designed to ensure that both the identity of the shareholder casting
the vote and the voting instructions of the shareholder are accurately
determined.


    In all cases where a telephonic proxy is solicited, the SCC representative
is required to ask for each shareholder's full name, address, social security or
employer identification number, title (if the shareholder is authorized to act
on behalf of an entity, such as a corporation), and the number of shares owned,
and to confirm that the shareholder has received the proxy materials in the
mail. If the information solicited agrees with the information provided to SCC,
then the SCC representative has the responsibility to explain the process, read
the Proposals on the proxy card(s), and ask for the shareholder's instructions
on the Proposals. Although the SCC representative is permitted to answer
questions about the process, he or she is not permitted to recommend to the
shareholder how to vote, other than to read any recommendation set forth in the
proxy statement. 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(s) originally sent with the proxy statement or attend in person.
Should shareholders require additional information regarding the proxy or
replacement proxy card(s), they may contact SCC toll-free at 1-800-603-1915. 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.

                                       31
<PAGE>
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.

PROPOSALS OF SHAREHOLDERS

    Shareholders wishing to submit proposals for inclusion in a proxy statement
for a shareholder meeting subsequent to the Meeting, if any, should send their
written proposals to the Secretary of the Trust, c/o Scudder Kemper Investments,
Inc., at the address for the Trust shown at the beginning of this Proxy
Statement, within a reasonable time before the solicitation of proxies for such
meeting. The timely submission of a proposal does not guarantee its inclusion.

OTHER MATTERS TO COME BEFORE THE MEETING

    No Trustee is aware of any matters that will be presented for action at the
Meeting other than the matters set forth herein. Should any other matters
requiring a vote of shareholders arise, the proxy in the accompanying form will
confer upon the person or persons entitled to vote the shares represented by
such proxy the discretionary authority to vote the shares as to any such other
matters in accordance with their best judgment in the interest of the Trust and/
or Fund.

    PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD(S) (OR TAKE
ADVANTAGE OF AVAILABLE ELECTRONIC OR TELEPHONIC VOTING PROCEDURES) PROMPTLY. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.


                                 By Order of the Board,


                                 /s/ John Millette
                                 John Millette
                                 Secretary

                                       32
<PAGE>
                                                                       EXHIBIT A

                    PROPOSED INVESTMENT MANAGEMENT AGREEMENT
                                 MARKED AGAINST
                    CURRENT INVESTMENT MANAGEMENT AGREEMENT


         [deleted text is <#>struck through</#> and new text is <*>BOLD AND
                                UNDERLINED</*>]


                                INVESTMENT TRUST
                            TWO INTERNATIONAL PLACE
                          BOSTON, MASSACHUSETTS 02110


                                  <#>September 7, 1998</#><*>AUGUST 14, 2000</*>


Scudder Kemper Investments, Inc.
Two International Place
Boston, Massachusetts 02110

                        INVESTMENT MANAGEMENT AGREEMENT
                         SCUDDER GROWTH AND INCOME FUND

Ladies and Gentlemen:

    Investment Trust (the "Trust") has been established as a Massachusetts
business trust to engage in the business of an investment company. Pursuant to
the Trust's Declaration of Trust, as amended from time-to-time (the
"Declaration"), the Board of Trustees has divided the Trust's shares of
beneficial interest, par value $0.01 per share, (the "Shares") into separate
series, or funds, including Scudder Growth and Income Fund (the "Fund"). Series
may be abolished and dissolved, and additional series established, from time to
time by action of the Trustees.

    The Trust, on behalf of the Fund, has selected you to act as the sole
investment manager of the Fund and to provide certain other services, as more
fully set forth below, and you have indicated that you are willing to act as
such investment manager and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Trust on behalf of the Fund
agrees with you as follows:

1.  DELIVERY OF DOCUMENTS.  The Trust engages in the business of investing and
reinvesting the assets of the Fund in the manner and in accordance with the
investment objectives, policies and restrictions specified in the currently
effective Prospectus (the "Prospectus") and Statement of Additional Information
(the "SAI") relating to the Fund included in the Trust's Registration Statement
on Form N-1A, as amended from time to time, (the "Registration Statement") filed
by the Trust under the Investment Company Act of 1940, as amended, (the
<PAGE>
"1940 Act") and the Securities Act of 1933, as amended. Copies of the documents
referred to in the preceding sentence have been furnished to you by the Trust.
The Trust has also furnished you with copies properly certified or authenticated
of each of the following additional documents related to the Trust and the Fund:

    (a) The Declaration dated September 20, 1984, as amended to date.

    (b) By-Laws of the Trust as in effect on the date hereof (the "By-Laws").

    (c) Resolutions of the Trustees of the Trust and the shareholders of the
        Fund selecting you as investment manager and approving the form of this
        Agreement.

    (d) Establishment and Designation of Series of Shares of Beneficial Interest
        dated February 12, 1991 relating to the Fund.

    The Trust will furnish you from time to time with copies, properly certified
or authenticated, of all amendments of or supplements, if any, to the foregoing,
including the Prospectus, the SAI and the Registration Statement.

2.  SUBLICENSE TO USE THE SCUDDER TRADEMARKS.  As exclusive licensee of the
rights to use and sublicense the use of the "Scudder," "Scudder Kemper
Investments, Inc." and "Scudder, Stevens & Clark, Inc." trademarks (together,
the "Scudder Marks"), you hereby grant the Trust a nonexclusive right and
sublicense to use (i) the "Scudder" name and mark as part of the Trust's name
(the "Fund Name"), and (ii) the Scudder Marks in connection with the Trust's
investment products and services, in each case only for so long as this
Agreement, any other investment management agreement between you and the Trust,
or any extension, renewal or amendment hereof or thereof remains in effect, and
only for so long as you are a licensee of the Scudder Marks, PROVIDED HOWEVER,
that you agree to use your best efforts to maintain your license to use and
sublicense the Scudder Marks. The Trust agrees that it shall have no right to
sublicense or assign rights to use the Scudder Marks, shall acquire no interest
in the Scudder Marks other than the rights granted herein, that all of the
Trust's uses of the Scudder Marks shall inure to the benefit of Scudder Trust
Company as owner and licensor of the Scudder Marks (the "Trademark Owner"), and
that the Trust shall not challenge the validity of the Scudder Marks or the
Trademark Owner's ownership thereof. The Trust further agrees that all services
and products it offers in connection with the Scudder Marks shall meet
commercially reasonable standards of quality, as may be determined by you or the
Trademark Owner from time to time, provided that you acknowledge that the
services and products the Trust rendered during the one-year period preceding
the date of this Agreement are acceptable. At your reasonable request, the Trust
shall cooperate with you and the Trademark Owner and shall execute and

                                      A-2
<PAGE>
deliver any and all documents necessary to maintain and protect (including but
not limited to in connection with any trademark infringement action) the Scudder
Marks and/or enter the Trust as a registered user thereof. At such time as this
Agreement or any other investment management agreement shall no longer be in
effect between you (or your successor) and the Trust, or you no longer are a
licensee of the Scudder Marks, the Trust shall (to the extent that, and as soon
as, it lawfully can) cease to use the Fund Name or any other name indicating
that it is advised by, managed by or otherwise connected with you (or any
organization which shall have succeeded to your business as investment manager)
or the Trademark Owner. In no event shall the Trust use the Scudder Marks or any
other name or mark confusingly similar thereto (including, but not limited to,
any name or mark that includes the name "Scudder") if this Agreement or any
other investment advisory agreement between you (or your successor) and the Fund
is terminated.

3.  PORTFOLIO MANAGEMENT SERVICES.  As manager of the assets of the Fund, you
shall provide continuing investment management of the assets of the Fund in
accordance with the investment objectives, policies and restrictions set forth
in the Prospectus and SAI; the applicable provisions of the 1940 Act and the
Internal Revenue Code of 1986, as amended, (the "Code") relating to regulated
investment companies and all rules and regulations thereunder; and all other
applicable federal and state laws and regulations of which you have knowledge;
subject always to policies and instructions adopted by the Trust's Board of
Trustees. In connection therewith, you shall use reasonable efforts to manage
the Fund so that it will qualify as a regulated investment company under
Subchapter M of the Code and regulations issued thereunder. The Fund shall have
the benefit of the investment analysis and research, the review of current
economic conditions and trends and the consideration of long-range investment
policy generally available to your investment advisory clients. In managing the
Fund in accordance with the requirements set forth in this section 3, you shall
be entitled to receive and act upon advice of counsel to the Trust or counsel to
you. You shall also make available to the Trust promptly upon request all of the
Fund's investment records and ledgers as are necessary to assist the Trust in
complying with the requirements of the 1940 Act and other applicable laws. To
the extent required by law, you shall furnish to regulatory authorities having
the requisite authority any information or reports in connection with the
services provided pursuant to this Agreement which may be requested in order to
ascertain whether the operations of the Trust are being conducted in a manner
consistent with applicable laws and regulations.

    You shall determine the securities, instruments, investments, currencies,
repurchase agreements, futures, options and other contracts relating to
investments to be purchased, sold or entered into by the Fund and place orders
with

                                      A-3
<PAGE>
broker-dealers, foreign currency dealers, futures commission merchants or others
pursuant to your determinations and all in accordance with Fund policies as
expressed in the Registration Statement. You shall determine what portion of the
Fund's portfolio shall be invested in securities and other assets and what
portion, if any, should be held uninvested.

    You shall furnish to the Trust's Board of Trustees periodic reports on the
investment performance of the Fund and on the performance of your obligations
pursuant to this Agreement, and you shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.

4.  ADMINISTRATIVE SERVICES.  In addition to the portfolio management services
specified above in section 3, you shall furnish at your expense for the use of
the Fund such office space and facilities in the United States as the Fund may
require for its reasonable needs, and you (or one or more of your affiliates
designated by you) shall render to the Trust administrative services on behalf
of the Fund necessary for operating as an open-end investment company and not
provided by persons not parties to this Agreement including, but not limited to,
preparing reports to and meeting materials for the Trust's Board of Trustees and
reports and notices to Fund shareholders; supervising, negotiating contractual
arrangements with, to the extent appropriate, and monitoring the performance of,
accounting agents, custodians, depositories, transfer agents and pricing agents,
accountants, attorneys, printers, underwriters, brokers and dealers, insurers
and other persons in any capacity deemed to be necessary or desirable to Fund
operations; preparing and making filings with the SEC and other regulatory and
self-regulatory organizations, including, but not limited to, preliminary and
definitive proxy materials, post-effective amendments to the Registration
Statement, semi-annual reports on Form N-SAR and notices pursuant to Rule 24f-2
under the 1940 Act; overseeing the tabulation of proxies by the Fund's transfer
agent; assisting in the preparation and filing of the Fund's federal, state and
local tax returns; preparing and filing the Fund's federal excise tax return
pursuant to Section 4982 of the Code; providing assistance with investor and
public relations matters; monitoring the valuation of portfolio securities and
the calculation of net asset value; monitoring the registration of Shares of the
Fund under applicable federal and state securities laws; maintaining or causing
to be maintained for the Fund all books, records and reports and any other
information required under the 1940 Act, to the extent that such books, records
and reports and other information are not maintained by the Fund's custodian or
other agents of the Fund; assisting in establishing the accounting policies of
the Fund; assisting in the resolution of accounting issues that may arise with
respect to the Fund's operations and consulting with the Fund's independent
accountants, legal counsel and the Fund's other agents as

                                      A-4
<PAGE>
necessary in connection therewith; establishing and monitoring the Fund's
operating expense budgets; reviewing the Fund's bills; processing the payment of
bills that have been approved by an authorized person; assisting the Fund in
determining the amount of dividends and distributions available to be paid by
the Fund to its shareholders, preparing and arranging for the printing of
dividend notices to shareholders, and providing the transfer and dividend paying
agent, the custodian, and the accounting agent with such information as is
required for such parties to effect the payment of dividends and distributions;
and otherwise assisting the Trust as it may reasonably request in the conduct of
the Fund's business, subject to the direction and control of the Trust's Board
of Trustees. Nothing in this Agreement shall be deemed to shift to you or to
diminish the obligations of any agent of the Fund or any other person not a
party to this Agreement which is obligated to provide services to the Fund.

5.  ALLOCATION OF CHARGES AND EXPENSES.  Except as otherwise specifically
provided in this section 5, you shall pay the compensation and expenses of all
Trustees, officers and executive employees of the Trust (including the Fund's
share of payroll taxes) who are affiliated persons of you, and you shall make
available, without expense to the Fund, the services of such of your directors,
officers and employees as may duly be elected officers of the Trust, subject to
their individual consent to serve and to any limitations imposed by law. You
shall provide at your expense the portfolio management services described in
section 3 hereof and the administrative services described in section 4 hereof.

    You shall not be required to pay any expenses of the Fund other than those
specifically allocated to you in this section 5. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the Fund's Trustees and
officers as are directors, officers or employees of you whose services may be
involved, for the following expenses of the Fund: organization expenses of the
Fund (including out-of-pocket expenses, but not including your overhead or
employee costs); fees payable to you and to any other Fund advisors or
consultants; legal expenses; auditing and accounting expenses; maintenance of
books and records which are required to be maintained by the Fund's custodian or
other agents of the Trust; telephone, telex, facsimile, postage and other
communications expenses; taxes and governmental fees; fees, dues and expenses
incurred by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's accounting agent, custodians,
subcustodians, transfer agents, dividend disbursing agents and registrars;
payment for portfolio pricing or valuation services to pricing agents,
accountants, bankers and other specialists, if any; expenses of preparing share
certificates and, except as provided below in this section 5, other expenses in
connection with the issuance, offering, distribution, sale, redemption or
repurchase of securities

                                      A-5
<PAGE>
issued by the Fund; expenses relating to investor and public relations; expenses
and fees of registering or qualifying Shares of the Fund for sale; interest
charges, bond premiums and other insurance expense; freight, insurance and other
charges in connection with the shipment of the Fund's portfolio securities; the
compensation and all expenses (specifically including travel expenses relating
to Trust business) of Trustees, officers and employees of the Trust who are not
affiliated persons of you; brokerage commissions or other costs of acquiring or
disposing of any portfolio securities of the Fund; expenses of printing and
distributing reports, notices and dividends to shareholders; expenses of
printing and mailing Prospectuses and SAIs of the Fund and supplements thereto;
costs of stationery; any litigation expenses; indemnification of Trustees and
officers of the Trust; costs of shareholders' and other meetings; and travel
expenses (or an appropriate portion thereof) of Trustees and officers of the
Trust who are directors, officers or employees of you to the extent that such
expenses relate to attendance at meetings of the Board of Trustees of the Trust
or any committees thereof or advisors thereto held outside of Boston,
Massachusetts or New York, New York.

    You shall not be required to pay expenses of any activity which is primarily
intended to result in sales of Shares of the Fund if and to the extent that (i)
such expenses are required to be borne by a principal underwriter which acts as
the distributor of the Fund's Shares pursuant to an underwriting agreement which
provides that the underwriter shall assume some or all of such expenses, or
(ii) the Trust on behalf of the Fund shall have adopted a plan in conformity
with Rule 12b-1 under the 1940 Act providing that the Fund (or some other party)
shall assume some or all of such expenses. You shall be required to pay such of
the foregoing sales expenses as are not required to be paid by the principal
underwriter pursuant to the underwriting agreement or are not permitted to be
paid by the Fund (or some other party) pursuant to such a plan.


6.  MANAGEMENT FEE.  For all services to be rendered, payments to be made and
costs to be assumed by you as provided in sections 3, 4 and 5 hereof, the Trust
on behalf of the Fund shall pay you in United States Dollars on the last day of
each month the unpaid balance of a fee equal to the <*>EXCESS OF 1/12 OF</*>
<*>0.450</*> <*>OF 1 PERCENT OF THE AVERAGE DAILY NET ASSETS AS DEFINED BELOW OF
THE FUND FOR SUCH MONTH; PROVIDED THAT, FOR ANY CALENDAR MONTH DURING WHICH THE
AVERAGE OF SUCH VALUES EXCEEDS $14 BILLION, THE FEE PAYABLE FOR THAT MONTH BASED
ON THE PORTION OF THE AVERAGE OF SUCH VALUES IN EXCESS OF $14 BILLION SHALL BE
1/12 OF 0.425 OF 1 PERCENT OF SUCH PORTION; AND PROVIDED THAT, FOR ANY CALENDAR
MONTH DURING WHICH THE AVERAGE OF SUCH VALUES EXCEEDS $16 BILLION THE FEE
PAYABLE FOR THAT MONTH BASED ON THE PORTION OF THE AVERAGE OF SUCH VALUES IN
EXCESS OF $16 BILLION SHALL BE 1/12 OF 0.40 OF 1 PERCENT OF SUCH
PORTION</*><#>excess of 1/12 of 0.600 of 1 percent of the average daily net
assets as defined below of the Fund for such


                                      A-6
<PAGE>

month; provided that, for any calendar month during which the average of such
values excess $500 million, the fee payable for that month based on the portion
of the average of such values in excess of $500 million shall be 1/12 of 0.550
of 1 percent of such portion; provided that, for any calendar month during which
the average of such values exceeds $1 billion, the fee payable for that month
based on the portion of the average of such values in excess of $1 billion shall
be 1/12 of 0.500 of 1 percent of such portion; provided that, for any calendar
month during which the average of such values exceeds $1.5 billion, the fee
payable for that month based on the portion of the average of such values in
excess of $1.5 billion shall be 1/12 of 0.475 of 1 percent of such portion;
provided that, for any calendar month during which the average of such values
exceeds $2.5 billion, the fee payable for that month based on the portion of the
average of such values in excess of $2.5 billion shall be 1/12 of 0.450 of
1 percent of such portion; provided that, for any calendar month during which
the average of such values exceeds $4 billion, the fee payable for that month
based on the porton of the average of such values in excess of $4 billion shall
be 1/12 of 0.425 of 1 percent of such portion; provided that, for any calendar
month during which the average of such values exceeds $5.5 billion, the fee
payable for that month based on the portion of the average of such values in
excess of $5.5 billion shall be 1/12 of 0.405 of 1 percent of such portion; and
provided that, for any calendar month during which the average of such values
exceeds $9.5 billion, the fee payable for that month based on the portion of the
average of such values in excess of $9.5 billion shall be 1/12 of 0.3875 of
1 percent of such portion</#> over any compensation waived by you from time to
time (as more fully described below). You shall be entitled to receive during
any month such interim payments of your fee hereunder as you shall request,
provided that no such payment shall exceed 75 percent of the amount of your fee
then accrued on the books of the Fund and unpaid.


    The "average daily net assets" of the Fund shall mean the average of the
values placed on the Fund's net assets as of 4:00 p.m. (New York time) on each
day on which the net asset value of the Fund is determined consistent with the
provisions of Rule 22c-1 under the 1940 Act or, if the Fund lawfully determines
the value of its net assets as of some other time on each business day, as of
such time. The value of the net assets of the Fund shall always be determined
pursuant to the applicable provisions of the Declaration and the Registration
Statement. If the determination of net asset value does not take place for any
particular day, then for the purposes of this section 6, the value of the net
assets of the Fund as last determined shall be deemed to be the value of its net
assets as of 4:00 p.m. (New York time), or as of such other time as the value of
the net assets of the Fund's portfolio may be lawfully determined on that day.
If the Fund determines the value of the net assets of its portfolio more than
once on

                                      A-7
<PAGE>
any day, then the last such determination thereof on that day shall be deemed to
be the sole determination thereof on that day for the purposes of this
section 6.

    You may waive all or a portion of your fees provided for hereunder and such
waiver shall be treated as a reduction in purchase price of your services. You
shall be contractually bound hereunder by the terms of any publicly announced
waiver of your fee, or any limitation of the Fund's expenses, as if such waiver
or limitation were fully set forth herein.

7.  AVOIDANCE OF INCONSISTENT POSITION; SERVICES NOT EXCLUSIVE.  In connection
with purchases or sales of portfolio securities and other investments for the
account of the Fund, neither you nor any of your directors, officers or
employees shall act as a principal or agent or receive any commission. You or
your agent shall arrange for the placing of all orders for the purchase and sale
of portfolio securities and other investments for the Fund's account with
brokers or dealers selected by you in accordance with Fund policies as expressed
in the Registration Statement. If any occasion should arise in which you give
any advice to clients of yours concerning the Shares of the Fund, you shall act
solely as investment counsel for such clients and not in any way on behalf of
the Fund.

    Your services to the Fund pursuant to this Agreement are not to be deemed to
be exclusive and it is understood that you may render investment advice,
management and services to others. In acting under this Agreement, you shall be
an independent contractor and not an agent of the Trust. Whenever the Fund and
one or more other accounts or investment companies advised by the Manager have
available funds for investment, investments suitable and appropriate for each
shall be allocated in accordance with procedures believed by the Manager to be
equitable to each entity. Similarly, opportunities to sell securities shall be
allocated in a manner believed by the Manager to be equitable. The Fund
recognizes that in some cases this procedure may adversely affect the size of
the position that may be acquired or disposed of for the Fund.

8.  LIMITATION OF LIABILITY OF MANAGER.  As an inducement to your undertaking to
render services pursuant to this Agreement, the Trust agrees that you shall not
be liable under this Agreement for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the matters to which this
Agreement relates, provided that nothing in this Agreement shall be deemed to
protect or purport to protect you against any liability to the Trust, the Fund
or its shareholders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties, or
by reason of your reckless disregard of your obligations and duties hereunder.
Any person, even though also employed by you, who may be or become an employee
of and paid by the Fund shall be deemed, when acting within the

                                      A-8
<PAGE>
scope of his or her employment by the Fund, to be acting in such employment
solely for the Fund and not as your employee or agent.


9.  DURATION AND TERMINATION OF THIS AGREEMENT.  This Agreement shall remain in
force until <#>September 30, 1999</#> <*>SEPTEMBER 30, 2001</*>, and continue in
force from year to year thereafter, but only so long as such continuance is
specifically approved at least annually (a) by the vote of a majority of the
Trustees who are not parties to this Agreement or interested persons of any
party to this Agreement, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Trustees of the Trust, or by the vote of
a majority of the outstanding voting securities of the Fund. The aforesaid
requirement that continuance of this Agreement be "specifically approved at
least annually" shall be construed in a manner consistent with the 1940 Act and
the rules and regulations thereunder and any applicable SEC exemptive order
therefrom.


    This Agreement may be terminated with respect to the Fund at any time,
without the payment of any penalty, by the vote of a majority of the outstanding
voting securities of the Fund or by the Trust's Board of Trustees on 60 days'
written notice to you, or by you on 60 days' written notice to the Trust. This
Agreement shall terminate automatically in the event of its assignment.

10. AMENDMENT OF THIS AGREEMENT.  No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved in a manner consistent with the 1940 Act and rules and
regulations thereunder and any applicable SEC exemptive order therefrom.

11. LIMITATION OF LIABILITY FOR CLAIMS.  The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "Investment Trust"
refers to the Trustees under the Declaration collectively as Trustees and not as
individuals or personally, and that no shareholder of the Fund, or Trustee,
officer, employee or agent of the Trust, shall be subject to claims against or
obligations of the Trust or of the Fund to any extent whatsoever, but that the
Trust estate only shall be liable.

    You are hereby expressly put on notice of the limitation of liability as set
forth in the Declaration and you agree that the obligations assumed by the Trust
on behalf of the Fund pursuant to this Agreement shall be limited in all cases
to the Fund and its assets, and you shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund or any other
series of the

                                      A-9
<PAGE>
Trust, or from any Trustee, officer, employee or agent of the Trust. You
understand that the rights and obligations of each Fund, or series, under the
Declaration are separate and distinct from those of any and all other series.

12. MISCELLANEOUS.  The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

    In interpreting the provisions of this Agreement, the definitions contained
in Section 2(a) of the 1940 Act (particularly the definitions of "affiliated
person," "assignment" and "majority of the outstanding voting securities"), as
from time to time amended, shall be applied, subject, however, to such
exemptions as may be granted by the SEC by any rule, regulation or order.

    This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause the
Fund to fail to comply with the requirements of Subchapter M of the Code.

    This Agreement shall supersede all prior investment advisory or management
agreements entered into between you and the Trust on behalf of the Fund.

    If you are in agreement with the foregoing, please execute the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
effective as of the date of this Agreement.

                                Yours very truly,

                                INVESTMENT TRUST, on behalf of Scudder Growth
                                and Income Fund

                                By:        ------------------------------
                                President

                                      A-10
<PAGE>
The foregoing Agreement is hereby accepted as of the date hereof.

                                SCUDDER KEMPER INVESTMENTS, INC.

                                By:        ------------------------------
                                Managing Director

                                      A-11
<PAGE>
                                                                       EXHIBIT B

                INVESTMENT OBJECTIVES, ADVISORY FEES AND ASSETS
                                       OF
               FUNDS ADVISED BY SCUDDER KEMPER INVESTMENTS, INC.


<TABLE>
<CAPTION>
FUND                             OBJECTIVE                 FEE RATE              ASSETS
- ----                             ---------                 --------              ------
<S>                       <C>                      <C>                       <C>
SCUDDER FUNDS(+)

U.S. GROWTH AND INCOME
  FUNDS

  Scudder Balanced Fund   A balance of growth and  0.700% of net assets      $  572,000,000
                          income from a
                          diversified portfolio
                          of equity and
                          fixed-income
                          securities.

  Scudder Dividend &      High current income and  0.750% of net assets(++)  $   25,000,000
    Growth Fund           long term growth of
                          capital.

INSURANCE PRODUCTS

  Scudder Variable Life   Balance of growth and    0.475% of net assets      $  199,000,000
    Investment Fund       income from a
    Balanced Portfolio    diversified portfolio
                          of equity and fixed
                          income securities.

  Scudder Variable Life   Long term growth of      0.475% of net assets      $  214,000,000
    Investment Fund       capital, current income
    Growth and Income     and growth of income
    Portfolio             from a portfolio
                          consisting primarily of
                          common stocks and
                          securities convertible
                          into common stocks.

AARP FUNDS(+)

  AARP Balanced Stock     Long term capital        PROGRAM FEE               $  682,000,000
    and Bond Fund         growth and income,       0.350% to $2 billion
                          while actively seeking   0.330% next $2 billion
                          to reduce downside risk  0.300% next $2 billion
                          as compared with other   0.280% next $2 billion
                          balanced mutual funds.   0.260% next $3 billion
                                                   0.250% next $3 billion
                                                   0.240% thereafter
                                                   INDIVIDUAL FUND FEE
                                                   0.190% of net assets
  AARP Growth and Income  Long term capital        PROGRAM FEE               $6,107,000,000
    Fund                  growth and income,       0.350% to $2 billion
                          while actively seeking   0.330% next $2 billion
                          to reduce downside risk  0.300% next $2 billion
                          as compared with other   0.280% next $2 billion
                          growth and income        0.260% next $3 billion
                          mutual funds.            0.250% next $3 billion
                                                   0.240% thereafter
                                                   INDIVIDUAL FUND FEE
                                                   0.190% of net assets
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
FUND                             OBJECTIVE                 FEE RATE              ASSETS
- ----                             ---------                 --------              ------
<S>                       <C>                      <C>                       <C>
KEMPER FUNDS(+)
EQUITY/VALUE STYLE FUNDS
  Kemper U.S. Growth and  Long-term growth of      0.600% to $250 million    $   34,485,000
    Income Fund           capital, current income  0.570% next $750 million
                          and growth of income.    0.550% next
                                                   $1.5 billion
                                                   0.530% thereafter(++)
ANNUITY PRODUCTS
  Kemper Blue Chip        Growth of capital and    0.650% of net assets      $  185,416,000
    Portfolio             income.
  Kemper Horizon 10+      A balance between        0.600% of net assets      $   66,963,000
    Portfolio             growth of capital and
                          income consistent with
                          moderate risk.
  Kemper Horizon 20+      Growth of capital and,   0.600% of net assets      $   37,409,000
    Portfolio             secondarily, income.
  Kemper Horizon 5        Income consistent with   0.600% of net assets      $   42,630,000
    Portfolio             preservation of
                          capital, and
                          secondarily, growth.
ASSET ALLOCATION FUNDS
  Kemper Horizon 10+      A balance between        0.580% to $250 million    $  138,110,000
    Portfolio             growth of capital and    0.550% next $750 million
                          income, consistent with  0.530% next $1.5 billion
                          moderate risk.           0.510% next $2.5 billion
                                                   0.480% next $2.5 billion
                                                   0.460% next $2.5 billion
                                                   0.440% next $2.5 billion
                                                   0.420% thereafter
  Kemper Horizon 20+      Growth of capital and,   0.580% to $250 million    $  136,971,000
    Portfolio             secondarily, income.     0.550% next $750 million
                                                   0.530% next $1.5 billion
                                                   0.510% next $2.5 billion
                                                   0.480% next $2.5 billion
                                                   0.460% next $2.5 billion
                                                   0.440% next $2.5 billion
                                                   0.420% thereafter
  Kemper Horizon 5        Income consistent with   0.580% to $250 million    $   59,953,000
    Portfolio             preservation of capital  0.550% next $750 million
                          and, secondarily,        0.530% next $1.5 billion
                          growth of capital.       0.510% next $2.5 billion
                                                   0.480% next $2.5 billion
                                                   0.460% next $2.5 billion
                                                   0.440% next $2.5 billion
                                                   0.420% thereafter
</TABLE>


- ------------------------------
+   The information provided below is shown as of the end of each Fund's last
    fiscal year, unless otherwise noted.
++  Subject to waivers and/or expense limitations.

                                      B-2
<PAGE>

                                   APPENDIX 1


                   FUND SHARES OWNED BY NOMINEES AND TRUSTEES

    Many of the nominees and Trustees own shares of the series of the Trust and
of other funds in the Scudder Family of Funds and AARP Funds, allocating their
investments among such funds based on their individual investment needs. The
following table sets forth, for each nominee and Trustee, the number of shares
owned in each series of the Trust as of January 31, 2000. The information as to
beneficial ownership is based on statements furnished to the Trust by each
nominee and Trustee. Unless otherwise noted, beneficial ownership is based on
sole voting and investment power. Each nominee's and Trustee's individual
shareholdings of any series of the Trust constitute less than 1% of the
outstanding shares of such fund. Unless otherwise noted, as a group, the
Trustees and officers own less than 1% of the shares of any series of the Trust.


<TABLE>
<CAPTION>
                                                                                                               SCUDDER
                                                       SCUDDER    SCUDDER                            SCUDDER     TAX
                                            SCUDDER    GROWTH      LARGE       SCUDDER     SCUDDER     TAX     MANAGED
                                 CLASSIC   DIVIDEND      AND      COMPANY    REAL ESTATE   S&P 500   MANAGED    SMALL
                                 GROWTH    & GROWTH    INCOME      GROWTH    INVESTMENT     INDEX    GROWTH    COMPANY
                                  FUND*      FUND       FUND*      FUND*        FUND        FUND      FUND      FUND
                                ---------  ---------  ---------  ----------  -----------  ---------  -------  ---------
<S>                             <C>        <C>        <C>        <C>         <C>          <C>        <C>      <C>
Henry P. Becton, Jr. (1)......     629        885(5)   2,881(7)   2,489(11)   1,485(13)     534(15)     169     168
Linda C. Coughlin (1).........     332          0          0          0         287           0           0       0
Dawn-Marie Driscoll (1).......   2,030        131      9,076(8)   1,852         125         256         423     420
Edgar R. Fiedler (1)..........       0          0          0          0           0           0           0       0
Peter B. Freeman..............     651     20,836      5,141        428         567         304         423     420
Keith R. Fox (1)..............       0          0          0          0           0           0           0       0
George M. Lovejoy, Jr.........     612          0      6,145(9)     421         478           0         634     841
Wesley W. Marple, Jr..........      95          0      1,374         66         153          99         169     168
Kathryn L. Quirk..............       0          0          0          0           0           0           0       0
Joan Edelman Spero (2)........       0         79         38         24           0          54           0       0
Jean Gleason Stromberg (2)....       0          0          0          0           0           0           0       0
Jean C. Tempel (1)............     283        482      2,784      4,478         540         355           0       0
Steven Zaleznick (3)..........       0          0          0          0           0           0           0       0
All Trustees and Officers as a
 Group........................  31,779(4)  22,413(6)  33,287(10) 12,474(12)   3,635(14)   1,602(16)   1,818   2,017(17)
</TABLE>


- ------------------------------


   * Ownership of shares of Classic Growth Fund, Scudder Growth and Income Fund
     and Scudder Large Company Growth Fund is in the Scudder Shares class of the
     applicable Fund.


 (1) Nominee's total aggregate holdings in each series of the Trust listed and
     all other funds in the Scudder Family of Funds and AARP Funds was over
     $100,000.

 (2) Nominee's total aggregate holdings in each series of the Trust listed and
     all other funds in the Scudder Family of Funds and AARP Funds ranged
     between $50,000 and $100,000.

 (3) Nominee's total aggregate holdings in each series of the Trust listed and
     all other funds in the Scudder Family of Funds and AARP Funds was $0.

 (4) As a group, as of January 31, 2000, the Trustees and officers of Classic
     Growth Fund held 4,632 shares with sole voting and investment power, and
     27,147 shares with sole investment but no voting power. Shares held with
     sole investment but no voting power are shares held in profit sharing and
     401(k) plans for which Scudder Kemper serves as trustee.
<PAGE>
 (5) Mr. Becton's shares in Scudder Dividend & Growth Fund are held with sole
     investment but no voting power. Shares held with sole investment but no
     voting power are shares held in profit sharing and 401(k) plans for which
     Scudder Kemper serves as trustee.

 (6) As a group, as of January 31, 2000, the Trustees and officers of Scudder
     Dividend & Growth Fund owned beneficially 1.16% of the outstanding shares
     of Scudder Dividend & Growth Fund of which 21,528 shares are held with sole
     voting and investment power, and 885 shares with sole investment but no
     voting power. Shares held with sole investment but no voting power are
     shares held in profit sharing and 401(k) plans for which Scudder Kemper
     serves as trustee.

 (7) Mr. Becton's shares in Scudder Growth and Income Fund include 1,002 shares
     with sole investment and voting power and 1,879 shares held with sole
     investment but no voting power. Shares held with sole investment but no
     voting power are shares held in profit sharing and 401(k) plans for which
     Scudder Kemper serves as trustee.

 (8) Ms. Driscoll's shares in Scudder Growth and Income Fund include 3,231
     shares with sole investment and voting power, 1,506 shares with shared
     investment and voting power, and 4,339 shares held with sole investment but
     no voting power. Shares held with sole investment but no voting power are
     shares held in profit sharing and 401(k) plans for which Scudder Kemper
     serves as trustee.

 (9) Mr. Lovejoy's shares in Scudder Growth and Income Fund are held with sole
     investment but no voting power. Shares held with sole investment but no
     voting power are shares held in profit sharing and 401(k) plans for which
     Scudder Kemper serves as trustee.

 (10) As a group, as of January 31, 2000, the Trustees and officers of Scudder
      Growth and Income Fund held 15,077 shares with sole voting and investment
      power, 1,506 shares with shared investment and voting power, and 16,704
      shares with sole investment but no voting power. Shares held with sole
      investment but no voting power are shares held in profit sharing and
      401(k) plans for which Scudder Kemper serves as trustee.

 (11) Mr. Becton's shares in Scudder Large Company Growth Fund include 751
      shares with sole investment and voting power and 1,738 shares held with
      sole investment but no voting power. Shares held with sole investment but
      no voting power are shares held in profit sharing and 401(k) plans for
      which Scudder Kemper serves as trustee.

 (12) As a group, as of January 31, 2000, the Trustees and officers of Scudder
      Large Company Growth Fund held 8,020 shares with sole voting and
      investment power, and 4,454 shares with sole investment but no voting
      power. Shares held with sole investment but no voting power are shares
      held in profit sharing and 401(k) plans for which Scudder Kemper serves as
      trustee.

 (13) Mr. Becton's shares in Scudder Real Estate Investment Fund are held with
      sole investment but no voting power. Shares held with sole investment but
      no voting power are shares held in profit sharing and 401(k) plans for
      which Scudder Kemper serves as trustee.

 (14) As a group, as of January 31, 2000, the Trustees and officers of Scudder
      Real Estate Investment Fund held 2,150 shares with sole voting and
      investment power, and 1,485 shares with sole investment but no voting
      power. Shares held with sole investment but no voting power are shares
      held in profit sharing and 401(k) plans for which Scudder Kemper serves as
      trustee.

 (15) Mr. Becton's shares in Scudder S&P 500 Index Fund are held with sole
      investment but no voting power. Shares held with sole investment but no
      voting power are shares held in profit sharing and 401(k) plans for which
      Scudder Kemper serves as trustee.

 (16) As a group, as of January 31, 2000, the Trustees and officers of Scudder
      S&P 500 Index Fund held 1,068 shares with sole voting and investment
      power, and 534 shares with sole investment but no voting power. Shares
      held with sole investment but no voting power are shares held in profit
      sharing and 401(k) plans for which Scudder Kemper serves as trustee.

 (17) As a group, as of January 31, 2000, the Trustees and officers owned
      beneficially 1.28% of the outstanding shares of Scudder Tax Managed Small
      Company Fund which were held with sole investment and voting power.

                                       2
<PAGE>

                                   APPENDIX 2



                        BENEFICIAL OWNERS OF FUND SHARES



    As of January 31, 2000, 2,396,540 shares in the aggregate, or 8.35% of the
outstanding shares, of CLASSIC GROWTH FUND -- SCUDDER SHARES were held in the
name of Merrill Lynch, Pierce, Fenner & Smith, for the sole benefit of its
customers, 4800 Deer Lake Drive, Jacksonville, FL 32246, who may be deemed to be
the beneficial owner of certain of these shares.



    As of January 31, 2000, 13,366,949 shares in the aggregate, or 5.47% of the
outstanding shares, of SCUDDER GROWTH AND INCOME FUND -- SCUDDER SHARES were
held in the name of Charles Schwab, 101 Montgomery Street, San Francisco, CA
94104, who may be deemed to be the beneficial owner of certain of these shares.



    As of January 31, 2000, 39,313 shares in the aggregate, or 16.40% of the
outstanding shares, of SCUDDER TAX MANAGED GROWTH FUND were held in the name of
Donaldson, Lufkin & Jenrette Securities Corp., P.O. Box 2052, Jersey City, NJ
07303, who may be deemed to be the beneficial owner of certain of these shares.



    As of January 31, 2000, 33,507 shares in the aggregate, or 21.26% of the
outstanding shares, of SCUDDER TAX MANAGED SMALL COMPANY FUND were held in the
name of Donaldson, Lufkin & Jenrette Securities Corp., P.O. Box 2052, Jersey
City, NJ 07303, who may be deemed to be the beneficial owner of certain of these
shares.


                                     NOTES
<PAGE>
    For more information, please call Shareholder Communications
    Corporation, your Fund's information agent at 1-800-603-1915.

                                                                          SD G&I
<PAGE>

                                  FORM OF PROXY

<TABLE>
<S><C>
                       [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.

SCUDDER GROWTH AND INCOME FUND


PROXY             SPECIAL MEETING OF SHAREHOLDERS - JULY 13, 2000


         The undersigned hereby appoints John Millette, Kathryn L. Quirk and John R. Hebble, and each of them,
the proxies of the undersigned, with the power of substitution to each of them, to vote all shares of the
above-referenced 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., Two International
Place, Boston, MA 02110, on July 13, 2000 at 3:00 p.m., 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 THE FUND.  THE BOARD OF TRUSTEES RECOMMENDS A
VOTE FOR THE PROPOSALS.

                   PLEASE VOTE BY FILLING IN THE BOXES BELOW.

                                                                                FOR ALL        WITHHOLD
                                                                                NOMINEES       AUTHORITY TO
                                                                                LISTED         VOTE FOR ALL
                                                                                (EXCEPT AS     NOMINEES LISTED
                                                                                NOTED IN
                                                                                SPACE
                                                                                PROVIDED)
PROPOSAL 1
- ----------
To elect Trustees to hold office until their respective successors have         /  /          /  /
been duly elected and  qualified  or until their  earlier  resignation  or
removal.

NOMINEES:
(01) Henry P. Becton, Jr. (02) Linda C. Coughlin (03) Dawn-Marie  Driscoll (04)
Edgar R. Fiedler (05) Keith R. Fox (06) Joan Edelman  Spero (07) Jean Gleason
Stromberg (08) Jean C. Tempel (09) Steven Zaleznick

INSTRUCTION:  TO WITHHOLD  AUTHORITY TO VOTE FOR ANY  INDIVIDUAL  NOMINEE,
WRITE THE NAME(S) ON THE LINE IMMEDIATELY BELOW.

- ----------------------------------------------------
PROPOSAL 2                                                                      FOR        AGAINST        ABSTAIN
- ----------
To approve or disapprove a new  investment  management  agreement  between      /  /        /  /           /  /
the Fund and Scudder Kemper Investments, Inc.

PROPOSAL 3                                                                      FOR        AGAINST        ABSTAIN
- ----------
To ratify the selection of PricewaterhouseCoopers LLP as the Fund's             /  /        /  /           /  /
independent accountants for the current fiscal year.

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
</TABLE>



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