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:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
[ ] Definitive Proxy Statement Rule 14a-6(e)(2))
[ ] 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>
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:
Proposal 1: To elect Trustees of the Trust;
Proposal 2: To approve or disapprove a new investment
management agreement 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.
The appointed proxies will vote in their discretion on any other
business that may properly come before the Meeting or any adjournments thereof.
Holders of record of shares of the Fund at the close of business on
April 17, 2000 are entitled to vote at the Meeting and at any adjournments
thereof.
In the event that the necessary quorum to transact business or the vote
required to approve any Proposal is not obtained at the Meeting, the persons
named as proxies may propose one or more adjournments of the Meeting in
accordance with applicable law to permit further solicitation of proxies. Any
such adjournment as to a matter will require the affirmative vote of the holders
of a majority of the Fund's shares present in person or by proxy at the Meeting.
The persons named as proxies will vote FOR any such adjournment those proxies
which they are entitled to vote in favor of that Proposal and will vote AGAINST
any such adjournment those proxies to be voted against that Proposal.
By Order of the Board,
[Signature]
John Millette
Secretary
[date]
IMPORTANT -- We urge you to sign and date the enclosed proxy card(s) and return
it in the enclosed envelope which requires no postage (or to take advantage of
the electronic or telephonic voting procedures described on the proxy 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
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 on 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, on July 13, 2000, at 3:00 p.m., Eastern time, and at any
and all adjournments thereof (the "Meeting").
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
number of no-load funds advised by it that Scudder Kemper believes have similar
or compatible investment objectives and policies. In many cases, the proposed
consolidations are designed to eliminate the substantial overlap in current
offerings by the Scudder Funds and the funds offered through the AARP Investment
Program (the "AARP Funds"), all of which are advised by Scudder Kemper.
Consolidation plans are proposed for other funds that have not gathered enough
assets to operate efficiently and have, in turn, 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 most of the no-load funds advised by
Scudder Kemper 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 also
being nominated for election as trustees/directors of most of the other no-load
funds advised by Scudder Kemper.
Currently five different boards of trustees or directors are
responsible for overseeing different groups of no-load funds advised by Scudder
Kemper. As part of a broader restructuring effort described above, Scudder
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
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 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 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 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 of various mutual funds advised by Scudder
Kemper since 1987.
Edgar R. Fiedler (70)
Edgar R. Fiedler is Senior Fellow and Economic Counsellor at The Conference
Board. He served as the Board's Vice President, Economic Research from 1975 to
1986 and as Vice President and Economic Counsellor from 1986 to 1996. Mr.
Fiedler's business experience includes positions at Eastman Kodak in Rochester
(1956-59), Doubleday and Company in New York City (1959-60), and Bankers Trust
Company in New York City (1960-69). He also served as Assistant Secretary of the
Treasury for Economic Policy from 1971 to 1975. Mr. Fiedler graduated from the
University of Wisconsin in 1951. He received his M.B.A. from the University of
Michigan and his doctorate from New York University. During the 1980's, Mr.
Fiedler was an Adjunct Professor of Economics at the Columbia University
Graduate School of Business. From 1990 to 1991, he was the Stephen Edward Scarff
Distinguished Professor at Lawrence University in Wisconsin. Mr. Fiedler is a
Director of The Stanley Works, Harris Insight Funds, Brazil Fund, and PEG
Capital Management, Inc. He has served as a board member of various mutual funds
advised by Scudder Kemper, including the AARP Investment Program Funds, since
1984.
Keith R. Fox (46)
Keith R. Fox is the managing partner of the Exeter Group of Funds, a series of
private equity funds with offices in New York and Boston, which he founded in
1986. The Exeter Group invests in a wide range of private equity situations,
including venture capital, expansion financings, recapitalizations and
management buyouts. Prior to forming Exeter, Mr. Fox was a director and vice
president of BT Capital Corporation, a subsidiary of Bankers Trust New York
Corporation organized as a small business investment company and based in New
York City. Mr. Fox graduated from Oxford University in 1976, and in 1981
received an M.B.A. degree from the Harvard Business School. Mr. Fox is also a
qualified accountant. He is a board member and former Chairman of the National
Association of Small Business Investment Companies, and a director of Golden
State Vintners, K-Communications, Progressive Holding Corporation and Facts On
File, as well as a former director of over twenty companies. Mr. Fox has served
as a trustee of various mutual funds advised by Scudder Kemper since 1996.
Joan Edelman Spero (55)
Joan E. Spero is the president of the Doris Duke Charitable Foundation, a
position to which she was named in January 1997. From 1993 to 1997, Ms. Spero
served as Undersecretary of State for Economic, Business and Agricultural
Affairs under President Clinton. From 1981 to 1993, she was an executive at the
American Express Company, where her last position was executive vice president
for Corporate Affairs and Communications. Ms. Spero served as U.N. Ambassador to
the United Nations Economic and Social Council under President Carter from 1980
to 1981. She was an assistant professor at Columbia University from 1973 to
1979. She graduated Phi Beta Kappa from the University of Wisconsin and holds a
master's degree in international affairs and a doctorate in political science
from Columbia University. Ms. Spero is a member of the Council on Foreign
Relations and the Council of American Ambassadors. She also serves as a trustee
of the Wisconsin Alumni Research Foundation, The Brookings Institution and
Columbia University and is a Director of First Data Corporation. Ms. Spero has
served as a trustee of various mutual funds advised by Scudder Kemper since
1998.
Jean Gleason Stromberg (56)
Ms. Stromberg acts as a consultant on regulatory matters. From 1996 to 1997, Ms.
Stromberg represented the U.S. General Accounting Office before Congress and
elsewhere on issues involving banking, securities, securities markets, and
government-sponsored enterprises. Prior to that, Ms. Stromberg was a corporate
and securities law partner at the Washington, D.C. law office of Fulbright and
Jaworski, a national law firm. She served as Associate Director of the SEC's
Division of Investment Management from 1977 to 1979 and prior to that was
Special Counsel for the Division of Corporation Finance from 1972 to 1977. Ms.
Stromberg graduated Phi Beta Kappa from Wellesley College and received her law
degree from Harvard Law School. From 1988 to 1991 and 1993 to 1996, she was a
Trustee of the American Bar Retirement Association, the funding vehicle for
American Bar Association-sponsored retirement plans. Ms. Stromberg serves on the
Wellesley College Business Leadership Council and the Council for Mutual Fund
Director Education at Northwestern University Law School and was a panelist at
the SEC's Investment Company Director's Roundtable. Ms. Stromberg has served as
a board member of the AARP Investment Program Funds since 1997.
Jean C. Tempel (56)
Jean C. Tempel is a venture partner for Internet Capital Group, a strategic
network of Internet partnership companies whose principal offices are in Wayne,
Pennsylvania. Ms. Tempel concentrates on investment opportunities in the Boston
area. She spent 25 years in technology/operations executive management at
various New England banks, building custody operations and real time
financial/securities processing systems, most recently as Chief Operations
Officer at The Boston Company. From 1991 until 1993 she was president/COO of
Safeguard Scientifics, a Pennsylvania technology venture company. In that role
she was a founding investor, director and vice chairman of Cambridge Technology
Partners. She is a director of XLVision, Inc., Marathon Technologies, Inc.,
Aberdeen Group and Sonesta Hotels International, and is a Trustee of
Northeastern University, Connecticut College, and The Commonwealth Institute.
She received a B.A. from Connecticut College, an M.S. from Rensselaer
Polytechnic Institute of New York, and attended Harvard Business School's
Advanced Management Program. Ms. Tempel is currently a Trustee of the Trust and
has served as a trustee of various mutual funds advised by Scudder Kemper since
1994.
Steven Zaleznick (45)*
Steven Zaleznick is President and CEO of AARP Services, Inc., a wholly-owned and
independently-operated subsidiary of AARP which manages a range of products and
services offered to AARP members, provides marketing services to AARP and its
member service providers and establishes an electronic commerce presence for
AARP members. Mr. Zaleznick previously served as AARP's general counsel for nine
years. He was responsible for the legal affairs of the AARP, which included tax
and legal matters affecting non-profit organizations, contract negotiations,
publication review and public policy litigation. In 1979, he joined the AARP as
a legislation representative responsible for issues involving taxes, pensions,
age discrimination, and other national issues affecting older Americans. Mr.
Zaleznick is President of the Board of Cradle of Hope Adoption Center in
Washington, D.C. He is a former treasurer and currently a board member of the
National Senior Citizens Law Center. Mr. Zaleznick received his B.A. in
economics from Brown University. He received his J.D. degree from Georgetown
University Law Center and is a member of the District of Columbia Bar
Association.
<TABLE>
<CAPTION>
Trustees Not Standing for Re-election:
- ------------------------------------ -------------------------------------------- ------------------------------------------
<S> <C> <C>
Principal Occupation or Employment and
Name (Age) Directorships Present Office with the Trust
- ------------------------------------ -------------------------------------------- ------------------------------------------
- ------------------------------------ -------------------------------------------- ------------------------------------------
Peter B. Freeman (67) Corporate Director and Trustee. Trustee; Mr. Freeman serves on the
Boards of an additional 13 trusts or
corporations whose funds are advised by
Scudder Kemper.
- ------------------------------------ -------------------------------------------- ------------------------------------------
- ------------------------------------ -------------------------------------------- ------------------------------------------
George M. Lovejoy, Jr. (69) President and Director, Fifty Associates Trustee; Mr. Lovejoy serves on the
(real estate corporation). Boards of an additional 11 trusts or
corporations whose funds are advised by
Scudder Kemper.
- ------------------------------------ -------------------------------------------- ------------------------------------------
- ------------------------------------ -------------------------------------------- ------------------------------------------
Wesley W. Marple, Jr. (68) Professor of Business Administration, Trustee; Mr. Marple serves on the Board
Northeastern University, College of of an additional 10 trusts or
Business Administration. corporations whose funds are advised by
Scudder Kemper.
- ------------------------------------ -------------------------------------------- ------------------------------------------
- ------------------------------------ -------------------------------------------- ------------------------------------------
Kathryn L. Quirk (47)* Vice President and Assistant Secretary; Trustee, Vice President and Assistant
Managing Director of Scudder Kemper Secretary; Ms. Quirk serves on the
Boards of an additional 18 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.
RESPONSIBILITIES OF THE BOARD -- BOARD AND COMMITTEE MEETINGS
A fund's board is responsible for the general oversight of fund
business. The nominees proposed for election at the Meeting consist of two
individuals who are considered "interested" Trustees, and seven individuals who
have no affiliation with Scudder Kemper and who are called "independent"
Trustees (the "Independent Trustees"). The SEC has recently proposed a rule that
would require a majority of the board members of a fund to be "independent" if
the fund were to take advantage of certain exemptive rules under the 1940 Act.
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.
AUDIT COMMITTEE
The Audit Committee reviews with management and the Fund's independent
public accountants, among other things, the scope of the audit and the internal
controls of the Fund 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 the Fund to the Board, reviews the independence of
such firm and, in general, considers and reports to the Board on matters
regarding the Fund's accounting and financial reporting practices.
As suggested by the Advisory Group Report, the Trust's Audit Committee
is comprised of the Independent Trustees, 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 solely of 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 Investment 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 and each above-named committee on which he or she served as a regular
member that were held during that period.
OFFICERS
The following persons are officers of the Trust:
- -------------------------- ---------------------------------------- ------------
Year First
Principal Occupation or Employment(1) Became an
Name (Age) Officer(2)
- -------------------------- ---------------------------------------- ------------
Bruce F. Beaty (41) Vice President; Managing Director of 1995
Scudder Kemper
- -------------------------- ---------------------------------------- ------------
Jennifer P. Carter (37) Vice President; Vice President of 1999
Scudder Kemper
- -------------------------- ---------------------------------------- ------------
Linda C. Coughlin (48) Trustee and President; Managing 2000
Director of Scudder Kemper
- -------------------------- ---------------------------------------- ------------
James Eysenbach (38) Vice President; Managing Director of 1999
Scudder Kemper
- -------------------------- ---------------------------------------- ------------
William F. Gadsden (45) Vice President; Managing Director of 1996
Scudder Kemper
- -------------------------- ---------------------------------------- ------------
John R. Hebble (41) Treasurer; Senior Vice President of 1998
Scudder Kemper
- -------------------------- ---------------------------------------- ------------
Valerie F. Malter (41) Vice President; Managing Director of 1995
Scudder Kemper
- -------------------------- ---------------------------------------- ------------
Ann M. McCreary (43) Vice President; Managing Director of 1998
Scudder Kemper
- -------------------------- ---------------------------------------- ------------
Kathleen T. Millard (40) Vice President; Managing Director of 1999
Scudder Kemper
- -------------------------- ---------------------------------------- ------------
John Millette (38) Vice President and Secretary; 1999
Assistant Vice President of Scudder
Kemper
- -------------------------- ----------------------------------------- -----------
Caroline Pearson (38) Assistant Secretary; Senior Vice 1997
President of Scudder Kemper;
Associate, Dechert Price & Rhoads (law
firm) 1989 to 1997
- -------------------------- ----------------------------------------- -----------
Kathryn L. Quirk (47) Trustee, Vice President and Assistant 1997
Secretary; Managing Director of
Scudder Kemper
- -------------------------- ----------------------------------------- ----------
Robert Tymoczko (30) Vice President; Assistant Vice 1999
President of Scudder Kemper
- -------------------------------------------------------------------------------
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 other 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 of the Trust are not entitled to benefits
under any pension or retirement plan. It is currently anticipated that a
one-time benefit will be provided to those Independent Trustees who have
volunteered to leave the board prior to their normal retirement date in order to
facilitate the nomination of a consolidated board. The amount of such benefit
has not been finally determined, but is expected to be based on a Trustee's
years of service and remaining years to normal retirement. [Further detail to be
provided when available.] [Inasmuch as Scudder Kemper will also benefit from the
administrative efficiencies of a consolidated board, Scudder Kemper has agreed
to bear one-half of the cost of any such benefit.]
Scudder Kemper supervises the 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 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 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
- -------------------------- ---------------------------- ------------------------
Aggregate Total Compensation
Compensation (number from Fund Complex
Trust of funds) Paid to Trustee
- -------------------------- ---------------------------- ------------------------
Henry P. Becton Jr. $31,110 (8 funds) $140,000 (30 funds)
- -------------------------- ---------------------------- ------------------------
Dawn-Marie Driscoll $33,218 (8 funds) $150,000 (30 funds)
- -------------------------- ---------------------------- ------------------------
Peter B. Freeman $34,134 (8 funds) $179,783 (57 funds)
- -------------------------- ---------------------------- ------------------------
George M. Lovejoy, Jr. $31,025 (8 funds) $153,200 (31 funds)
- -------------------------- ---------------------------- ------------------------
Wesley W. Marple, Jr. $31,025 (8 funds) $140,000 (30 funds)
- -------------------------- ---------------------------- ------------------------
Jean C. Tempel $31,025 (8 funds) $140,000 (30 funds)
- -------------------------- ---------------------------- ------------------------
The Trustees unanimously recommend that the shareholders of the Fund
vote for each nominee.
<PAGE>
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.
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 Investment 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. (Scudder Kemper is sometimes referred to in this Proxy
Statement as the "Investment Manager.")
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).
BOARDS' RECOMMENDATION
On February 7, 2000, the Board of Trustees of Investment Trust,
including the Independent Trustees, unanimously voted to approve the Proposed
Investment 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 Investment 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 & Income Fund pursues
substantially identical investment objective 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 $_______
billion to approximately $______ billion based on [March 31, 2000] 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.
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 the following table, which is based on [March 31, 2000]
net assets and expenses.
Current Structure Proposed Structure
Investment Management Agreement 0.45% 0.45%
Administration Agreement n/a 0.30%
Other Operating Expenses 0.36% 0.00%
- ------------------------ ----- -----
Estimated Total Annual
Operating Expenses 0.81% 0.75%
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 fee payable to Scudder Kemper from 0.45% to 0.41%.
The Independent Trustees believe that the current 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 would not be fair to Scudder Kemper. In this regard, they note that
the current effective 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 AARP Growth and Income Fund.
Consequently, the Independent Trustees have approved the terms of the Proposed
Investment Management Agreement, which includes a new fee schedule that
maintains the current effective 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 fee rate in the event that assets of the combined fund
decline below $_____ 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
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.
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 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 Investment 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's
operating as an open-end investment company, including, but 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;
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 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. 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 Investment 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 Investment 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 expense; 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 Investment 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 Investment 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 Investment
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 Investment 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 rate for the Fund under
the Investment Management Agreements is described below under "Differences
Between the Current and Proposed Investment Management Agreements." As of the
end of the Fund's last fiscal year, the Fund had net assets of $___________ and
paid an aggregate management fee to the Investment Manager during such period of
$______________.
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, Investment 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 Investment 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, Investment 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,
Investment 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.
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 prior to its
becoming effective, as required by the 1940 Act, 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 continued until
________________.
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 _________________, 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 Investment 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 in some circumstances
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 fees 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 Acquiring Fund paid
the Investment Manager an effective fee rate of 0.45% of average daily net
assets.
Current Fee Schedule
- ----------------------------------------- -------------- --------------
Effective
Average Daily Net Assets Fee Rate Fee Rate
- ----------------------------------------- -------------- --------------
- ----------------------------------------- -------------- --------------
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%
- ----------------------------------------- -------------- --------------
Proposed Fee Schedule
- ----------------------------------------- -------------- --------------
Effective
Average Daily Net Assets Fee Rate Fee Rate
- ----------------------------------------- -------------- --------------
- ----------------------------------------- -------------- --------------
up to $14 billion 0.450%
- ----------------------------------------- -------------- --------------
- ----------------------------------------- -------------- --------------
next $2 billion 0.425%
- ----------------------------------------- -------------- --------------
- ----------------------------------------- -------------- --------------
in excess of $16 billion 0.385%
- ----------------------------------------- -------------- --------------
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 services 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. 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 company known as Zurich
Financial Services Group (the "B.A.T Transaction"). By way of a dual holding
company structure, former Zurich shareholders initially owned approximately 57%
of Zurich Financial Services Group, with the balance initially owned by former
B.A.T shareholders. 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 Financial Services;
the principal occupation of Lawrence Cheng is serving as Chief Investment
Officer of Zurich Financial Services; the principal occupation of Gunther Gose
is serving as the Chief Financial Officer of Zurich Financial Services; and the
principal occupation of William H. Bolinder is serving as a member of the Group
Executive Board of Zurich Financial Services. Appendix 1 includes information
regarding each Trustee and officer of the Trust who is associated with Scudder
Kemper.
* Mythenquai 2, Zurich, Switzerland
# 345 Park Avenue, New York, New York
+ 1400 American Lane, Schaumburg, Illinois
The outstanding voting securities of Scudder Kemper are held of record
1.46% by Zurich Insurance Company, a subsidiary of Zurich, 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. There are no outstanding 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 Investment 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 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.
Scudder Investor Services, Inc. ("SIS") 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 SIS an administrative service
fee of up to 0.25% of the average daily net assets of that class of the Fund and
SIS 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, STC and SIS during the last
fiscal year of the Fund were $_________, $_____________, $____________ and
$__________, respectively.
SFAC, SSC, STC and SIS 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 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 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 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 $________ (approximately $_______ 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.
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. 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
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 (for a Trust-wide vote) or Fund's (for a Fund by Fund vote) shares
present in person or by proxy at the Meeting. The persons named as proxies will
vote in favor of 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 _____ shares of the Fund outstanding.
Appendix 2 sets forth the beneficial owners of at least 5% of the
Fund's shares. To the best of the Trust's knowledge, as of January 31, 2000, no
person owned beneficially more than 5% of the Fund's outstanding shares, except
as stated in Appendix 2.
Appendix 3 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.
Shareholder Communications Corporation ("SCC") has been engaged to
assist in the solicitation of proxies, at an estimated cost of $342,632.78. 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, and ask for the shareholder's
instructions on the Proposals. Although the SCC representative is permitted to
answer questions about the process, he or she is not permitted to recommend to
the shareholder how to vote, other than to read any recommendation set forth in
the proxy statement. SCC will record the shareholder's instructions on the card.
Within 72 hours, the shareholder will be sent a letter or mailgram to confirm
his or her vote and asking the shareholder to call SCC immediately if his or her
instructions are not correctly reflected in the confirmation.
If a shareholder wishes to participate in the Meeting, but does not
wish to give a proxy by telephone or electronically, the shareholder may still
submit the proxy card originally sent with the proxy statement or attend in
person. Should shareholders require additional information regarding the proxy
or replacement proxy cards, they may contact SCC toll-free at 1-800-603-1915.
Any proxy given by a shareholder is revocable until voted at the Meeting.
Shareholders may also provide their voting instructions through
telephone touch-tone voting or Internet voting. These options require
shareholders to input a control number which is located on each voting
instruction card. After inputting this number, shareholders will be prompted to
provide their voting instructions on the Proposals. Shareholders will have an
opportunity to review their voting instructions and make any necessary changes
before submitting their voting instructions and terminating their telephone call
or Internet link. Shareholders who vote on the Internet, in addition to
confirming their voting instructions prior to submission, will also receive an
e-mail confirming their instructions.
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,
[John Millette signature]
John Millette
Secretary
<PAGE>
Exhibit A
Proposed Investment Management Agreement
marked against
Current Investment Management Agreement
[deleted text is bracketed and new text is in ALL CAPS]
-------------------
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 "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 _______________ 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 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 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
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 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 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 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 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]_______________, 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 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
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS, INC.
By: ______________________________
Managing Director
<PAGE>
Exhibit B
Investment Objectives, Advisory Fees and Assets
of
Funds Advised by Scudder Kemper Investments, Inc.
[To Come]
<PAGE>
APPENDIX 1
Trustees and Officers Associated with Scudder Kemper
<PAGE>
APPENDIX 2
Beneficial Owners of Fund Shares
<PAGE>
APPENDIX 3
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 shares
outstanding of such fund.] [As a group, the Trustees and officers own less than
1% of the shares of any series of the Trust.]
<TABLE>
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Scudder
Scudder Scudder Scudder Tax
Scudder Growth Large Scudder Scudder Tax Managed
Classic Dividend and Company Real S&P 500 Managed Small
Growth & Growth Income Growth Estate Index Growth Company
Fund Fund Fund Fund Investment Fund Fund Fund
Fund
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Henry P. Becton, Jr.1
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Linda C. Coughlin2
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Dawn-Marie Driscoll3
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Edgar R. Fiedler4
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Peter B. Freeman5
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Keith R. Fox6
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
George M. Lovejoy, Jr.7
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Wesley W. Marple, Jr.8
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Kathryn L. Quirk9
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Joan Edelman Spero10
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Jean Gleason Stromberg11
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Jean C. Tempel12
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
Steven Zaleznick13
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
[All Trustees and Officers
as a Group]
- ----------------------------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
</TABLE>
1 As of January 31, 2000, Mr. Becton's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
2 As of January 31, 2000, Ms. Coughlin's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
3 As of January 31, 2000, Ms. Driscoll's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
4 As of January 31, 2000, Mr. Fiedler's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
5 As of January 31, 2000, Mr. Freeman's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
6 As of January 31, 2000, Mr. Fox's total aggregate holdings in each series
of the Trust listed above and all other funds in the Scudder Family of
Funds and AARP Funds ranged between $___________ and $___________.
7 As of January 31, 2000, Mr. Lovejoy's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
8 As of January 31, 2000, Mr. Marple's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
9 As of January 31, 2000, Ms. Quirk's total aggregate holdings in each series
of the Trust listed above and all other funds in the Scudder Family of
Funds and AARP Funds ranged between $___________ and $___________.
10 As of January 31, 2000, Ms. Spero's total aggregate holdings in each series
of the Trust listed above and all other funds in the Scudder Family of
Funds and AARP Funds ranged between $___________ and $___________.
11 As of January 31, 2000, Ms. Stromberg's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
12 As of January 31, 2000, Ms. Tempel's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
13 As of January 31, 2000, Mr. Zaleznick's total aggregate holdings in each
series of the Trust listed above and all other funds in the Scudder Family
of Funds and AARP Funds ranged between $___________ and $___________.
<PAGE>
FORM OF PROXY
[LOGO] YOUR VOTE IS IMPORTANT!
[ADDRESS]
VOTE TODAY BY MAIL,
TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL FREE 1-XXX-XXX-XXXX OR
LOG ON TO WWW.PROXYWEB.COM/XXXXX
***CONTROL NUMBER: XXX XXX XXX XXX XX*** Please fold and detach card at
perforation before mailing.
SCUDDER GROWTH AND INCOME FUND
INVESTMENT TRUST
Two International Place
Boston, MA 02110-4103
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
3:00 p.m., Eastern time, on July 13, 2000
The undersigned hereby appoints __________, ____________ and
____________, and each of them, the proxies of the undersigned, with the power
of substitution to each of them, to vote all shares of the Scudder Growth and
Income 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, Massachusetts
02110-4103, 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 TRUSTEES OF INVESTMENT TRUST.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS.
Please vote by filling in the boxes below.
PROPOSAL 1 FOR all WITHHOLD ABSTAIN
nominees authority
listed to vote
(except as for all
noted in nominees
space listed
provided)
To elect Trustees to the Board of
Trustees of Investment Trust 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 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
