KEMPER GROWTH FUND, PRES14A, 1997-09-18

KEMPER GROWTH FUND
PRES14A, 1997-09-18

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<PAGE> 1
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
Rule 14a-6(e)(2))
[ ] Definitive proxy statement

[ ] Definitive additional materials

[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

KEMPER GROWTH FUND
- -------------------------------------------------------------------------------
(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 identify 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> 2

<PAGE> 1

IMPORTANT NEWS
KEMPER FUNDS SHAREHOLDERS

WHILE WE ENCOURAGE YOU TO READ THE FULL TEXT OF THE ENCLOSED PROXY STATEMENT,
HERE IS A BRIEF OVERVIEW OF MAJOR MATTERS TO BE VOTED UPON.

QUESTIONS AND ANSWERS

Q: WHAT IS HAPPENING?

A: Zurich Insurance Company, the parent of your Fund's investment manager
(Zurich Kemper Investments, Inc. or "ZKI") has entered into an agreement
with Scudder, Stevens & Clark, Inc. ("Scudder") whereby Zurich will acquire
approximately 70% of Scudder. Upon completion of the transaction, Scudder
will change its name to Scudder Kemper Investments, Inc. ("SKI") and ZKI
will be integrated into SKI. Because of the transaction, it is necessary for
your Fund to approve a new investment management agreement.

The following pages elaborate on Scudder, the proposed new investment
management agreement and the Fund Board's evaluation of Zurich and Scudder.
A vote is also being sought on a Rule 12b-1 plan (the provisions of which
are the same as in the current Rule 12b-1 plan) for the Class B shares and
Class C shares of each Fund and other matters. A vote is also being sought
on the election of trustees to the Board of Trustees, the selection of
independent auditors, and a change in investment policies to permit a
master/feeder fund structure in the future.

Q: WHAT IS SCUDDER?

A: Scudder is one of America's oldest and largest investment management firms.
It manages assets invested in equities, fixed income and money market
instruments in both developed and emerging markets. Scudder provides
investment services for open-end and closed-end funds, and private and
institutional clients.

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

A: The Investment Company Act of 1940 requires a vote whenever there is a
change in control of an investment manager. The Zurich/Scudder transaction
is such a change of control and requires a fund shareholder vote upon a new
investment management agreement with each Fund. A vote upon the Rule 12b-1
distribution plan with each Fund, by shareholders of Class B and Class C
shares only, is also required.
<PAGE> 2

Q: HOW WILL THE ZURICH/SCUDDER TRANSACTION AFFECT ME AS A FUND SHAREHOLDER?

A: Your Fund and your Fund investment will not change. You will still own the
same shares in the same Fund. If the new investment management agreement and
Rule 12b-1 plans are approved, your Fund shares will not change, the
advisory fees charged to your Fund will not change, and the fee rate payable
under your Fund's 12b-1 plan will not change.

Zurich and Scudder have committed to provide all resources necessary to
provide your Fund with top quality investment management and shareholder
services.

Q: WILL THE INVESTMENT ADVISORY AND RULE 12B-1 FEES BE THE SAME?

A: Yes, the investment advisory and Rule 12b-1 fees paid by your Fund will
remain the same.

Q: WILL THE BRAND IDENTITY OF THE KEMPER FUNDS SURVIVE?

A: Zurich and Scudder intend to maintain the distinct brand identity of the
Kemper Funds. They are also committed to strengthening and enhancing the
Kemper Funds brand and distribution channels, while maintaining its separate
brand identity.

Q: WHAT IS A MASTER/FEEDER FUND?

A: Rather than investing directly in a portfolio of securities, a feeder fund
is authorized to pool its assets with other mutual funds managed by its
investment manager for investment in a master fund. A purpose of a
master/feeder fund structure is to achieve operational efficiencies.

Q: HOW DO THE BOARD MEMBERS OF MY FUND SUGGEST THAT I VOTE?

A: After careful consideration, the board members of your Fund, including all
of the independent members, recommend that you vote "For" all the items on
the enclosed proxy card.

Q: WHO IS PAYING THE COST OF THE SHAREHOLDER MEETING AND THIS PROXY
SOLICITATION?

A: ZKI--not your Fund--is paying all costs of the Funds' shareholder meeting
and proxy solicitation.

Q: WHOM DO I CALL FOR MORE INFORMATION?

A: Please call Shareholder Services at 1-800-621-1048.
<PAGE> 3

ABOUT THE PROXY CARD

[TO BE ILLUSTRATED WITH A SAMPLE OF THE BALLOT (NOT FILLED IN)]

Because each Fund must vote separately, you are being sent a proxy card for each
Fund account that you have. Please vote all issues shown on each proxy card that
you receive.

Please vote on each issue using blue or black ink to mark an X in one of the
three boxes provided on each proxy card. On Item 1 (election of trustees),
mark--For All, Withhold All or For All Except. If you mark an X in the For All
Except box, you should print the number(s) relating to the individual(s) for
whom you wish to withhold authority. On all other Items, mark--For, Against or
Abstain. Then sign, date and return each of your proxy cards in the accompanying
postage-paid envelope. All registered owners of an account, as shown in the
address on the proxy card, must sign the proxy card. If you are signing for a
corporation, trust or estate, please indicate your title or position.
<PAGE> 4

THANK YOU FOR MAILING YOUR PROXY CARD PROMPTLY!

We appreciate your continuing support and look forward to serving your future
investment needs.
<PAGE> 5

KEMPER FUNDS

KEMPER EQUITY FUNDS/GROWTH STYLE
KEMPER AGGRESSIVE GROWTH FUND
KEMPER BLUE CHIP FUND
KEMPER GROWTH FUND
KEMPER QUANTITATIVE EQUITY FUND
KEMPER SMALL CAPITALIZATION EQUITY FUND
KEMPER TECHNOLOGY FUND
KEMPER TOTAL RETURN FUND
KEMPER VALUE PLUS GROWTH FUND

KEMPER INTERNATIONAL AND GLOBAL FUNDS
KEMPER ASIAN GROWTH FUND
KEMPER GLOBAL INCOME FUND
KEMPER INTERNATIONAL FUND

KEMPER TAX-FREE INCOME FUNDS
KEMPER INTERMEDIATE MUNICIPAL BOND FUND
KEMPER MUNICIPAL BOND FUND
KEMPER STATE TAX-FREE INCOME SERIES
KEMPER CALIFORNIA TAX-FREE INCOME FUND
KEMPER FLORIDA TAX-FREE INCOME FUND
KEMPER MICHIGAN TAX-FREE INCOME FUND
KEMPER NEW JERSEY TAX-FREE INCOME FUND
KEMPER NEW YORK TAX-FREE INCOME FUND
KEMPER OHIO TAX-FREE INCOME FUND
KEMPER PENNSYLVANIA TAX-FREE INCOME FUND
KEMPER TEXAS TAX-FREE INCOME FUND

KEMPER INCOME FUNDS
KEMPER ADJUSTABLE RATE U.S. GOVERNMENT FUND
KEMPER DIVERSIFIED INCOME FUND
KEMPER HIGH YIELD FUND
KEMPER INCOME AND CAPITAL PRESERVATION FUND
KEMPER SHORT-INTERMEDIATE GOVERNMENT FUND
KEMPER U.S. GOVERNMENT SECURITIES FUND
KEMPER U.S. MORTGAGE FUND

KEMPER MONEY FUNDS
KEMPER CASH RESERVES FUND

Printed on recycled paper
<PAGE> 6

KEMPER FUNDS
222 South Riverside Plaza Chicago, Illinois 60606
Telephone (800) 621-1048

, 1997

Dear Kemper Fund Shareholder:

As you read in the Questions and Answers (Q & A) on the outside cover, Zurich
Insurance Company ("Zurich") has entered into an agreement with Scudder, Stevens
& Clark, Inc. ("Scudder") pursuant to which Zurich will acquire approximately
70% of Scudder. Upon completion of the transaction, Scudder will change its name
to Scudder Kemper Investments, Inc. ("SKI"), and your Fund's investment manager,
Zurich Kemper Investments, Inc. ("ZKI") will be combined with SKI. Because of
the transaction, it is necessary for your Fund to approve a new investment
management agreement and a new Rule 12b-1 Plan for Class B and Class C shares.

If the new investment management agreement and Rule 12b-1 Plan are approved,
YOUR FUND SHARES WILL NOT CHANGE, THE ADVISORY FEES CHARGED TO YOUR FUND WILL
NOT CHANGE, AND THE FEE RATE PAYABLE UNDER YOUR FUND'S RULE 12B-1 PLAN WILL NOT
CHANGE. FURTHER, YOU SHOULD CONTINUE TO RECEIVE THE HIGH QUALITY INVESTMENT
MANAGEMENT AND SHAREHOLDER SERVICES THAT YOU HAVE COME TO EXPECT OVER THE YEARS.

Your Fund Board has unanimously approved the proposals and recommends them for
your approval. I encourage you to vote in favor of the proposals.

As always, we thank you for your confidence and support.

Sincerely,

Stephen B. Timbers
Stephen B. Timbers
President [KEMPER LOGO]
<PAGE> 7

KEMPER FUNDS
222 South Riverside Plaza Chicago, Illinois 60606
Telephone (800) 621-1048

NOTICE OF JOINT MEETING OF SHAREHOLDERS
DECEMBER 3, 1997 AND PROXY STATEMENT

, 1997

To the Shareholders:

You are invited to attend a joint special meeting of shareholders of the
following Kemper Funds (each a "Fund" and collectively the "Funds"):

KEMPER TECHNOLOGY FUND ("KTEC")
KEMPER TOTAL RETURN FUND ("KTRF")
KEMPER GROWTH FUND ("KGF")
KEMPER SMALL CAPITALIZATION EQUITY FUND ("KSCF")
KEMPER INCOME AND CAPITAL PRESERVATION FUND ("KICPF")
KEMPER NATIONAL TAX-FREE INCOME SERIES ("KNTIS")
KEMPER DIVERSIFIED INCOME FUND ("KDIF")
KEMPER HIGH YIELD SERIES ("KHYS")
KEMPER U.S. GOVERNMENT SECURITIES FUND ("KGSF")
KEMPER INTERNATIONAL FUND ("KIF")
KEMPER STATE TAX-FREE INCOME SERIES ("KSTIS")
KEMPER PORTFOLIOS ("KP")
KEMPER ADJUSTABLE RATE U.S. GOVERNMENT FUND ("KARGF")
KEMPER BLUE CHIP FUND ("KBCF")
KEMPER GLOBAL INCOME FUND ("KGIF")
KEMPER VALUE+GROWTH FUND ("KVGF")
KEMPER QUANTITATIVE EQUITY FUND ("KQEF")
KEMPER ASIAN GROWTH FUND ("KAGF")
KEMPER AGGRESSIVE GROWTH FUND ("KAGGF")

The meeting will be held in the Presentation Room on the 32nd Floor at the
offices of the Funds, 222 South Riverside Plaza, Chicago, Illinois on Wednesday,
December 3, 1997 at 2:30 p.m., Chicago time, for the following purposes and to
transact such other business as may properly come before the meeting or any
adjournment of the meeting:

1. To elect nine (9) Trustees to the Board of Trustees.

2. To ratify or reject the selection of Ernst & Young LLP as independent
auditors for the current fiscal year.

3. To approve or disapprove a new investment management agreement with Scudder
Kemper Investments, Inc. ("SKI") (or with Zurich Kemper Investments, Inc.
("ZKI") transferable to SKI).
<PAGE> 8

4. To approve or disapprove a new sub-advisory agreement with Zurich Investment
Management Limited ("ZIML") (including approval of a subsequent assignment)
[for KIF, KGIF and KAGF only].

5. To approve or disapprove a new sub-advisory agreement with Zurich Kemper
Value Advisors, Inc. ("ZKVA") [for KVGF only].

6. For Class B and Class C shareholders only, to approve or disapprove a new
Rule 12b-1 distribution plan with Zurich Kemper Distributors, Inc. ("ZKDI").

7. To approve or disapprove changes in the Fund's fundamental investment
policies to permit a master/feeder fund structure.

The Board of Trustees of each Fund has selected the close of business on
September 17, 1997 as the record date for the determination of shareholders of
each Fund entitled to notice of and to vote at the meeting. Shareholders are
entitled to one vote for each share held.

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

PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD. SIGN, DATE
AND RETURN IT IN THE ENVELOPE PROVIDED. TO SAVE THE COST OF ADDITIONAL
SOLICITATIONS, PLEASE MAIL YOUR PROXY PROMPTLY.
- ------------------------------------------------------------------------------
<PAGE> 9

The accompanying proxy is solicited by the Boards of Trustees (the "Boards") of
the Funds for voting at the joint special meeting of shareholders of the Funds
to be held on Wednesday, December 3, 1997, and at any and all adjournments
thereof (the "Meeting"). This proxy statement was first mailed to shareholders
on or about , 1997.

THE SERIES FUNDS. Each of KNTIS, KSTIS, KP and KHYS is a "series company" that
issues various series of shares. (Each series also is sometimes described herein
as a "Fund.") Each series has its own investment objective and policies and
operates independently for purposes of investments, dividends and redemptions.

The series of KNTIS are: Kemper Municipal Bond Fund ("KMBF") and Kemper
Intermediate Municipal Bond Fund ("KIMBF").

The series of KSTIS are: Kemper California Tax-Free Income Fund ("KCATF");
Kemper New York Tax-Free Income Fund ("KNYTF"); Kemper Florida Tax-Free
Income Fund ("KFLTF"); Kemper Texas Tax-Free Income Fund ("KTXTF"); Kemper
Ohio Tax-Free Income Fund ("KOHTF"); Kemper Michigan Tax-Free Income Fund
("KMITF"); Kemper New Jersey Tax-Free Income Fund ("KNJTF"); and Kemper
Pennsylvania Tax-Free Income Fund ("KPATF").

The series of KP are: Kemper Cash Reserves Fund ("KCRF"); Kemper U.S.
Mortgage Fund ("KUSMF"); and Kemper Short-Intermediate Government Fund
("KSIGF").

The series of KHYS are: Kemper High Yield Fund ("KHYF") and Kemper High
Yield Opportunity Fund ("KHYOF"). As of September 17, 1997, KHYOF had not
commenced operations and did not have any shareholders.

Each Fund (and each series of each series company) is divided into four classes
of shares, including Class A Shares, Class B Shares, Class C Shares and, except
for KSTIS, Class I Shares. Shares of each class represent a proportionate
interest in that class.

The shareholders of each Fund are being asked to vote on up to six items. On
Item 1 (election of trustees) and Item 2 (ratification of selection of
auditors), each Fund will vote in the aggregate and not by series or class. On
Item 3 (approval of new investment management agreement), each Fund will vote in
the aggregate, except that in the case of KNTIS, KSTIS, KP, and KHYS, each
series will vote separately. On Item 4 (approval of new sub-advisory agreement
with ZIML) and Item 5 (approval of new sub-advisory agreement with ZKVA), each
affected Fund will vote in the aggregate. On Item 6 (approval of new Rule 12b-1
Plan), the Class B Shares and the Class C Shares of each Fund (or in the case of
KNTIS, KSTIS, KP and KHYS, of each series) will each vote separately. On Item 7

2
<PAGE> 10

(approval of a change in the Fund's fundamental investment policies to permit a
master/feeder fund), each Fund will vote in the aggregate, except that in the
case of KNTIS, KSTIS, KP and KHYS, each series will vote separately. The Board
of each Fund recommends an affirmative vote on all items. The vote required to
approve each item is described under the section of this proxy statement
entitled "Miscellaneous."

3
<PAGE> 11

The following table indicates which shareholders are solicited with respect to
each Item:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
ITEM KTEC KTRF KGF KSCF KICPF KNTIS KDIF KHYS KGSF KIF KSTIS KP KARGF
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
1. Elect Trustees X X X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------
2. Ratify selection of auditors X X X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------
3. Approval of New Investment X X X X X X X X X X X X X
Management Agreement with Scudder
Kemper Investments, Inc.
- ------------------------------------------------------------------------------------------------------------------------------
4. Approval of New Sub-Advisory X
Agreement with Zurich Investment
Management Limited
- ------------------------------------------------------------------------------------------------------------------------------
5. Approval of New Sub-Advisory
Agreement with Zurich Kemper Value
Advisors, Inc.
- ------------------------------------------------------------------------------------------------------------------------------
6. Approval of New Rule 12b-1 Plan X X X X X X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------
7. Approval of changes in X X X X X X X X X X X X X
fundamental investment policies to
permit master/feeder structure
- ------------------------------------------------------------------------------------------------------------------------------

<CAPTION>
- ----------------------------------- --------------------------------------------
ITEM KBCF KGIF KVGF KQEF KAGF KAGGF
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------
1. Elect Trustees X X X X X X
- -----------------------------------
2. Ratify selection of auditors X X X X X X
- -----------------------------------
3. Approval of New Investment X X X X X X
Management Agreement with Scudder
Kemper Investments, Inc.
- -----------------------------------
4. Approval of New Sub-Advisory X X
Agreement with Zurich Investment
Management Limited
- -----------------------------------
5. Approval of New Sub-Advisory X
Agreement with Zurich Kemper Value
Advisors, Inc.
- -----------------------------------
6. Approval of New Rule 12b-1 Plan X X X X X X
- -----------------------------------
7. Approval of changes in X X X X X X
fundamental investment policies to
permit master/feeder structure
- -----------------------------------
</TABLE>

4
<PAGE> 12

The Board of each Fund has fixed the close of business on September 17, 1997 as
the record date for the determination of shareholders of each Fund entitled to
notice of and to vote at the Meeting. As of September 17, 1997, each Fund had
shares issued and outstanding as set forth in Exhibit A.

INTRODUCTION

On June 26, 1997, Zurich Insurance Company ("Zurich"), ZKI Holding Corp.
("ZKIH"), Zurich Kemper Investments, Inc. ("ZKI"), Scudder, Stevens & Clark,
Inc. ("Scudder") and the representatives of the beneficial owners of the capital
stock of Scudder ("Scudder Representatives") entered into a transaction
agreement ("Transaction Agreement") pursuant to which Zurich will become the
majority stockholder in Scudder with an approximately 70% interest, and ZKI will
become a wholly-owned subsidiary of, or be combined with, Scudder
("Transaction"). Upon completion of the Transaction, Scudder will change its
name to Scudder Kemper Investments, Inc. ("SKI"). Scudder, a New York-based
investment adviser and the investment manager for the Scudder and AARP Funds,
has approximately $125 billion under management. ZKI, a Chicago-based investment
adviser and the investment manager for the Kemper Funds, and its affiliates have
approximately $85 billion under management. The headquarters of SKI will be in
New York. Edmond D. Villani, Scudder's Chief Executive Officer, will continue as
Chief Executive Officer of SKI and will become a member of Zurich's Corporate
Executive Board. Some of the terms of the Transaction are also set forth in a
form of second amended and restated Security Holders Agreement ("New SHA") to be
entered into among the beneficial owners of the capital stock of Scudder, the
Scudder Representatives, Scudder, Zurich, ZKIH and the Scudder Kemper
Investments, Inc. Executive Defined Contribution Plan Trust.

Consummation of the Transaction would constitute an "assignment," as that term
is defined in the Investment Company Act of 1940 ("1940 Act"), of each Fund's
current investment management agreement with ZKI. As required by the 1940 Act,
each current investment management agreement provides for its automatic
termination in the event of its assignment. Accordingly, as discussed further
below, a new investment management agreement between each Fund and SKI is being
proposed for approval by shareholders of each Fund.

DESCRIPTION OF THE TRANSACTION.

Under the Transaction Agreement, Zurich will pay $866.7 million in cash to
acquire two-thirds of Scudder's outstanding shares and will contribute ZKI to
Scudder for additional shares, following which Zurich will have a 79.1% fully
diluted equity interest in the combined business. Zurich will

5
<PAGE> 13

then transfer a 9.6% fully diluted equity interest in SKI to a defined
contribution plan for the benefit of Scudder and ZKI employees, as well as cash
and warrants on Zurich shares for award to Scudder employees, in each case
subject to five-year vesting schedules. After giving effect to the Transaction,
current Scudder stockholders will have a 29.6% fully diluted equity interest in
SKI and Zurich will have a 69.5% fully diluted interest in SKI. Scudder's name
will be changed to Scudder Kemper Investments, Inc.

The purchase price for Scudder or for ZKI in the Transaction is subject to
adjustment based on the effect on revenues of non-consenting clients, and will
be reduced if the annualized investment management fee revenues (excluding the
effect of market changes, but taking into account new assets under management)
from clients at the time of closing, as a percentage of such revenues as of June
30, 1997 (the "Revenue Run Rate Percentage"), is less than 90%.

At the closing, Zurich and the other stockholders of SKI will enter into the New
SHA. Under the New SHA, Scudder stockholders will be entitled to designate three
of the seven members of the SKI board and two of the four members of an
Executive Committee, which will be the primary management-level committee of
SKI. Zurich will be entitled to designate the other four members of the SKI
board and the other two members of the Executive Committee.

The names, addresses and principal occupations of the initial Scudder-designated
directors of SKI are as follows: LYNN S. BIRDSONG, 345 Park Avenue, New York,
New York, Managing Director of Scudder; CORNELIA M. SMALL, 345 Park Avenue, New
York, New York, Managing Director of Scudder; and EDMOND D. VILLANI, 345 Park
Avenue, New York, New York, President, Chief Executive Officer and Managing
Director of Scudder.

The names, addresses and principal occupations of the initial Zurich-designated
directors of SKI are as follows: LAWRENCE W. CHENG, Mythenquai 2, Zurich,
Switzerland, Chief Investment Officer for Investments and Institutional Asset
Management and the corporate functions of Securities and Real Estate for Zurich
and a member of the Corporate Executive Board of Zurich; STEVEN M. GLUCKSTERN,
Mythenquai 2, Zurich, Switzerland, responsible for Reinsurance, Structured
Finance, Capital Market Products and Strategic Investments, and a member of the
Corporate Executive Board of Zurich; ROLF HUEPPI, Mythenquai 2, Zurich,
Switzerland, Chairman of the Board and Chief Executive Officer of Zurich; and
MARKUS ROHRBASSER, Mythenquai 2, Zurich, Switzerland, Chief Financial Officer
and a member of the Corporate Executive Board of Zurich.

The initial Scudder-designated Executive Committee members will be Messrs.
Birdsong and Villani (Chairman). The initial Zurich-designated Executive
Committee members will be Messrs. Cheng and Rohrbasser.

6
<PAGE> 14

The New SHA requires the approval of a majority of the Scudder-designated
directors for certain decisions, including changing the name of SKI, effecting a
public offering before April 15, 2005, causing SKI to engage substantially in
non-investment management and related business, making material acquisitions or
divestitures, making changes in SKI's capital structure, dissolving or
liquidating SKI, or entering into certain affiliated transactions with Zurich.
The New SHA also provides for various put and call rights with respect to SKI
stock held by current Scudder employees, limitations on Zurich's ability to
purchase other asset management companies outside of SKI, rights of Zurich to
repurchase SKI stock upon termination of employment of SKI personnel, and
registration rights for stock held by continuing Scudder stockholders.

The Transaction is subject to a number of conditions, including approval by
Scudder stockholders; the Revenue Run Rate Percentages of Scudder and ZKI being
at least 75%; Scudder and ZKI having obtained director and stockholder approvals
from U.S.-registered funds representing 90% of the assets of such funds under
management as of June 30, 1997; the absence of any restraining order or
injunction preventing the Transaction, or any litigation challenging the
Transaction that is reasonably likely to result in an injunction or invalidation
of the Transaction; and the continued accuracy of the representations and
warranties contained in the Transaction Agreement. The Transaction is expected
to close during the fourth quarter of 1997.

Subsequent to the execution of the Transaction Agreement, Zurich agreed to cause
ownership of Zurich Investment Management Limited ("ZIML") to be transferred by
Zurich (or a direct or indirect wholly-owned subsidiary of Zurich) to SKI (or a
direct or indirect wholly-owned subsidiary of SKI). ZIML is a sub-adviser for
certain of the Funds. While the amount of consideration payable to Zurich for
ZIML has not yet been finally agreed upon, it is expected that such
consideration would in no event exceed $50 million, payable in cash or shares of
SKI stock or some combination thereof at the closing of the Transaction or over
some period of time after the closing of the Transaction. Following the
transfer, which is expected to take place at the same time as the closing of the
Transaction, ZIML's board of directors would comprise representatives of Scudder
and Zurich. The capital stock of ZIML initially may be transferred to one or
more wholly-owned subsidiaries of Zurich, but ultimately will be transferred to
SKI or one of its wholly-owned subsidiaries (the "ZIML Transaction"). The ZIML
Transaction will result in an assignment of the sub-advisory agreement under the
1940 Act.

ITEM 1. ELECTION OF BOARD OF TRUSTEES

At the Meeting, nine (9) trustees are to be elected to constitute the Board of
each Fund. All the nominees, except Messrs. Daniel Pierce and

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<PAGE> 15

Edmond Villani, were elected to the Board of each Fund at a special meeting of
shareholders held on September 19, 1995.

It is intended that the proxies will be voted for the election of the nominees
described below. The nominees, if elected, will take office upon consummation of
the Transaction and their election and qualification is contingent upon
consummation of the Transaction. The term of each person elected as trustee will
be from the date of the consummation of the Transaction 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 Agreement and Declaration of Trust of
each Fund ("Declaration of Trust"). If the Transaction is not consummated, the
current trustees of each Fund will continue to serve as the Fund's Board. Since
the Funds do not hold annual meetings, trustees will hold office for an
indeterminate period.

All the nominees listed below have consented to serve as trustees of the
respective Funds, if elected. In case any nominee shall be unable or shall fail
to act as a trustee by virtue of an unexpected occurrence, the proxies may be
voted for such other person(s) as shall be determined by the persons acting
under the proxies in their discretion.

<TABLE>
<CAPTION>
NAME (DATE OF BIRTH), PRINCIPAL YEAR FIRST BECAME
OCCUPATION AND AFFILIATIONS A TRUSTEE
------------------------------- -----------------
<S> <C>
David W. Belin (6/20/28) 1976 -- KNTIS; 1977 -- KDIF,
Member, Belin Lamson McCormick KGF, KHYS, KICPF, KSCF, KTEC,
Zumbach Flynn, P.C. (attorneys) KTRF; 1979 -- KGSF; 1981 -- KIF;
1982 -- KP; 1983 -- KSTIS; 1987
-- KARGF, KBCF; 1989 -- KGIF;
1995 -- KVGF, KQEF; 1996 --
KAGF, KAGGF.
Lewis A. Burnham (1/8/33) 1977 -- KDIF, KGF, KHYS, KICPF,
Director, Management Consulting KNTIS, KSCF, KTEC, KTRF; 1979 --
Services, McNulty & Company; formerly KGSF; 1981 -- KIF; 1982 -- KP;
Executive Vice President, Anchor 1983 -- KSTIS; 1987 -- KARGF,
Glass Container Corporation KBCF; 1989 -- KGIF; 1995 --
KVGF, KQEF; 1996 -- KAGF, KAGGF.
Donald L. Dunaway (3/8/37) 1980 -- KDIF, KGSF, KGF, KHYS,
Retired; formerly Executive Vice KICPF, KNTIS, KSCF, KTEC, KTRF;
President, A. O. Smith Corporation 1981 -- KIF; 1982 -- KP; 1983 --
KSTIS; 1987 -- KARGF, KBCF; 1989
-- KGIF; 1995 -- KVGF, KQEF;
1996 -- KAGF, KAGGF.

</TABLE>
8
<PAGE> 16
<TABLE>
<CAPTION>
NAME (DATE OF BIRTH), PRINCIPAL YEAR FIRST BECAME
OCCUPATION AND AFFILIATIONS A TRUSTEE
------------------------------- -----------------
<S> <C>
Robert B. Hoffman (12/11/36) 1981 -- KDIF, KGSF, KGF, KHYS,
Senior Vice President and Chief KICPF, KIF, KNTIS, KSCF, KTEC,
Financial Officer, Monsanto Company; KTRF; 1982 -- KP; 1983 -- KSTIS;
formerly Vice President, FMC 1987 -- KARGF, KBCF; 1989 --
Corporation; prior thereto, Director, KGIF; 1995 -- KVGF, KQEF; 1996
Executive Vice President and Chief -- KAGF, KAGGF.
Financial Officer, Staley
Continental, Inc.
Donald R. Jones (1/17/30) 1988 -- KARGF, KBCF, KDIF, KGSF,
Retired; Director, Motorola, Inc.; KGF, KHYS, KICPF, KIF, KNTIS,
formerly Executive Vice President and KSCF, KSTIS, KTEC, KTRF, KP;
Chief Financial Officer, Motorola, 1989 -- KGIF; 1995 -- KVGF,
Inc. KQEF; 1996 -- KAGF, KAGGF.
Shirley D. Peterson (9/3/41) 1995 -- All Funds, except KVGF,
President, Hood College; formerly KQEF, KAGF and KAGGF; 1995 --
partner, Steptoe & Johnson KVGF, KQEF; 1996 -- KAGF, KAGGF.
(attorneys); prior thereto,
Commissioner, Internal Revenue
Service; prior thereto, Assistant
Attorney General, U.S. Department of
Justice; Director, Bethlehem Steel
Corp.
*Daniel Pierce (3/18/34) Nominee
Chairman of the Board and Managing
Director, Scudder; Director,
Fiduciary Trust Company; Director,
Fiduciary Company Incorporated; Board
member of 14 investment companies
advised by Scudder.
William P. Sommers (7/22/33) 1979 -- KDIF, KGF, KHYS, KNTIS,
President and Chief Executive KSCF, KTEC, KTRF; 1981 -- KGSF,
Officer, SRI International; formerly KICPF, KIF; 1982 -- KP; 1983 --
Executive Vice President, Iameter; KSTIS; 1987 -- KARGF, KBCF; 1989
prior thereto, Senior Vice President -- KGIF; 1995 -- KVGF, KQEF;
and Director, Booz, Allen & Hamilton, 1996 -- KAGF, KAGGF.
Inc. (Retired); Director, Rohr, Inc.;
Therapeutic Discovery Corp.; and
Litton Industries.
</TABLE>

9
<PAGE> 17
<TABLE>
<CAPTION>
NAME (DATE OF BIRTH), PRINCIPAL YEAR FIRST BECAME
OCCUPATION AND AFFILIATIONS A TRUSTEE
------------------------------- -----------------
<S> <C>
*Edmond D. Villani (3/4/47) Nominee
President, Chief Executive Officer
and Managing Director, Scudder.
</TABLE>

- ---------------
* Interested persons of Scudder as defined in the Investment Company Act of
1940.

All the nominees, except Messrs. Pierce and Villani, serve as board members of
twenty-six Kemper Funds. Mr. Pierce and Mr. Villani have each been nominated to
serve as a board member of thirty-nine Kemper Funds. A "Kemper Fund" is an
investment company for which ZKI or its affiliates serve as investment manager.

The Board of Trustees of each Fund has a nominating committee, the members of
which are Messrs. Burnham and Sommers and Ms. Peterson. The nominating committee
proposed the nominees for election by the shareholders; and the Board of
Trustees, including the non-interested trustees, concurred. The nominating
committee met times during each Fund's most recently completed fiscal year.
Shareholders wishing to submit the name of a candidate for consideration by the
nominating committee should submit their recommendations to the secretary of the
applicable Fund.

Each Fund's audit committee is composed of Messrs. Dunaway, Hoffman and Jones.
The audit committee met times during each Fund's most recently completed
fiscal year. The audit committee of each Fund makes recommendations regarding
the selection of independent auditors for the Fund, confers with the independent
auditors regarding the Fund's financial statements, the results of audits and
related matters and performs such other tasks as the Board of Trustees of that
Fund assigns.

The Board of each Fund met times during the Fund's most recently completed
fiscal year. Each then current trustee attended 75% or more of the respective
meetings of the Board and the committees of which he or she was a member that
were held during that period.

Each Fund pays trustees who are not interested persons of such Fund a monthly
retainer and an attendance fee for each Board meeting and committee meeting
attended, plus expense reimbursement. As reflected above, the trustees currently
serve as trustees of various investment companies for which ZKI serves as
investment manager. Trustees or officers who are "interested persons" receive no
compensation from any Fund.

The tables below show, for each trustee entitled to receive compensation from
the Funds, the aggregate compensation paid or accrued by each

10
<PAGE> 18

Fund for its most recently completed fiscal year and the total compensation that
Funds paid to each trustee during the calendar year 1996. The trustees do not
receive any pension or retirement benefits from any Fund.

<TABLE>
<CAPTION>
NAME OF TRUSTEE KTEC KTRF KGF KSCF KICPF KNTIS KDIF KHYS(1) KGSF
--------------- ---- ---- --- ---- ----- ----- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
David W. Belin(2)....... $
Lewis A. Burnham........
Donald L. Dunaway(2)....
Robert B. Hoffman.......
Donald R. Jones.........
Shirley D. Peterson.....
William P. Sommers......
</TABLE>

<TABLE>
<CAPTION>
TOTAL
COMPENSATION
KEMPER FUNDS
PAID TO
NAME OF TRUSTEE KIF KSTIS KP KARGF KBCF KGIF KVGF KQEF KAGF(4) KAGGF(4) TRUSTEES(3)
--------------- --- ----- -- ----- ---- ---- ---- ---- ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
David W. Belin(2)....... -- -- $143,400
Lewis A. Burnham........ -- -- 88,800
Donald L. Dunaway(2).... -- -- 141,200
Robert B. Hoffman....... -- -- 92,100
Donald R. Jones......... -- -- 92,100
Shirley D. Peterson..... -- -- 89,800
William P. Sommers...... -- -- 87,500
</TABLE>

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

(1) Includes KHYF only.

(2) Includes deferred fees and interest thereon pursuant to deferred
compensation agreements with the Funds. Deferred amounts accrue interest
monthly at a rate equal to the yield of Zurich Money Funds--Zurich Money
Market Fund.

(3) Includes compensation for service on the boards of 22 Kemper Funds with 40
fund portfolios. Each trustee currently serves as trustee of 26 Kemper Funds
with 46 fund portfolios.

(4) KAGF and KAGGF have not yet adopted trustee compensation schedules.

FUND OFFICERS. Information about the executive officers of the Funds, with their
respective dates of birth and terms of office indicated, is set forth below.

J. Patrick Beimford, Jr. (5/25/50), vice president of KDIF since 1/21/93, is
executive vice president of ZKI.

Daniel J. Bukowski (5/6/63), vice president of KQEF since 8/8/95 and KVGF since
8/8/95, is senior vice president and director of quantitative research.

Elizabeth A. Byrnes (2/8/57), vice president of KARGF since 7/13/94, is first
vice president of ZKI.

11
<PAGE> 19

Tracy M. Chester (9/27/54), vice president of KBCF since 12/8/94, is senior vice
president of ZKI since September 1994; prior thereto, was senior vice president
and portfolio manager of an investment management company; and prior thereto,
managed private accounts.

Philip J. Collora (11/15/45), vice president of KP since 1/28/86, KTEC, KTRF,
KGF, KSCF, KICPF, KNTIS, KDIF, KHYS, KGSF, KIF, KSTIS, and KBCF since 1/17/89,
KARGF since 5/28/87, KGIF since 7/25/89, KVGF since 8/8/95, KQEF since 8/8/95,
KAGF since 5/30/96 and KAGGF since 11/20/96, and secretary of each Fund since
1/25/95, is senior vice president and assistant secretary of ZKI.

Robert S. Cessine (1/5/50), vice president of KICPF since 7/13/94 and KDIF since
5/05/95, is senior vice president of ZKI since January 1993; and prior thereto,
was senior corporate bond analyst at an investment management company.

Jerome L. Duffy (6/29/36), treasurer of KTEC, KTRF and KICPF since 1/20/77, KGF
and KSCF since 2/17/77, KNTIS and KDIF since 4/19/77, KHYS since 11/2/77, KGSF
since 9/25/79, KIF since 1/20/81, KP since 3/3/82, KSTIS since 1/23/83, KARGF
since 5/28/87, KBCF since 1/12/88, KGIF since 8/3/88, KVGF since 8/8/95, KQEF
since 8/8/95 , KAGF since 5/30/96 and KAGGF since 11/20/96, is senior vice
president of ZKI.

William M. Knapp (4/23/61), vice president of KVGF since 1/21/97, is first vice
president of ZKI.

Frank D. Korth (7/11/45), vice president of KTEC since 1/14/94, is senior vice
president of ZKI.

Gary A. Langbaum (12/16/48), vice president of KTRF since 6/15/95, is executive
vice president of ZKI.

Charles R. Manzoni, Jr. (1/23/47), vice president of each Fund since 9/5/96, is
executive vice president, secretary and general counsel of ZKI; secretary, ZKI
Holding Corp.; secretary, ZKI Agency, Inc., and formerly, Partner, Gardner,
Carton & Douglas (attorneys).

Michael A. McNamara (12/28/44), vice president of KDIF since 1/17/89 and KHYS
since 1/22/91, is senior vice president of ZKI.

Christopher J. Mier (8/11/56), vice president of KSTIS since 1/30/90 and KNTIS
since 1/22/91, is senior vice president of ZKI.

John E. Neal (3/9/50), vice president of each Fund since 1/18/96, is president
of Kemper Funds Group, a unit of ZKI, and director of ZKI, ZKVA and ZKDI.

Robert C. Peck, Jr. (10/1/46), vice president of KICPF, KNTIS, KDIF, KHYS, KGSF,
KSTIS, KP, KARGF and KGIF since 8/2/97, is executive

12
<PAGE> 20

vice president, chief investment officer--fixed income of ZKI, and formerly,
executive vice president and chief investment officer of an unaffiliated
investment management firm.

Frank J. Rachwalski, Jr. (3/26/45), vice president of KP since 1/23/84, is
senior vice president of ZKI.

Harry E. Resis, Jr. (11/24/45), vice president of KDIF and KHYS since 1/21/93,
is senior vice president of ZKI.

Steven H. Reynolds (9/11/93), vice president of KIF, KTEC, KTRF, KGF, KSCF,
KBCF, KVGF and KQEF since 1/18/96, KAGF since 5/30/96 and KAGGF since 11/20/96,
is executive vice president, chief investment officer-equities of ZKI.

Kurt R. Stalzer (5/1/58), vice president of KSCF since 1/21/97 and KAGGF since
9/15/97, is senior vice president of ZKI.

Stephen B. Timbers (8/8/44), president of each Fund since 3/11/95, is president,
chief executive officer, chief investment officer and director of ZKI and
director of ZKDI, ZKVA and LTV Corporation. Mr. Timbers is also trustee of each
of the Funds.

Jonathan W. Trutter (11/29/57), vice president of KDIF since 5/05/95, is first
vice president of ZKI.

Richard L. Vandenberg (11/16/49), vice president of KGSF, KARGF, KP and KDIF
since 1/21/97, is senior vice president of ZKI.

Elizabeth C. Werth (10/1/47), assistant secretary of each Fund since 3/17/90, is
vice president and director of state registrations of ZKI.

The officers of each Fund are elected by the Board of the Fund on an annual
basis to serve until their successors are elected and qualified. It is
anticipated that, after consummation of the Transaction, the Boards of the Funds
will elect new officers who are expected to include persons currently affiliated
with Scudder.

SHAREHOLDINGS

Set forth in Exhibit B is the number of shares of each Fund owned beneficially
by each trustee and nominee as of , 1997.

As of , 1997, no person is known to the Funds to own beneficially more
than five percent of the shares of any class of any Fund, except as shown in
Exhibit B.

13
<PAGE> 21

ITEM 2. SELECTION OF INDEPENDENT AUDITORS

A majority of the members of each Board who are not "interested" persons of the
Fund has selected Ernst & Young LLP, independent auditors, to audit the books
and records of the Fund for the current fiscal year. This firm has served in
this capacity for each Fund since the Fund was organized and has no direct or
indirect financial interest in a Fund except as independent auditors. The
selection of Ernst & Young LLP as independent auditors of each Fund is being
submitted to the shareholders for ratification. A representative of Ernst &
Young LLP is expected to be present at the Meeting and will be available to
respond to any appropriate questions raised at the Meeting and may make a
statement.

BOARD OF TRUSTEES RECOMMENDATION

The Board of each Fund recommends that shareholders vote FOR the ratification of
the selection of independent auditors.

ITEM 3. NEW INVESTMENT MANAGEMENT AGREEMENT

INTRODUCTION

Zurich Kemper Investments, Inc. ("ZKI") is the investment adviser and manager
for each Fund. ZKI and its indirect parent, Zurich Insurance Company ("Zurich"),
entered into a transaction agreement with Scudder, Stevens & Clark, Inc.
("Scudder") whereby Zurich will acquire approximately 70% of Scudder. Upon
completion of the Transaction, Scudder will change its name to Scudder Kemper
Investments, Inc. ("SKI") and ZKI will be integrated into SKI.

As discussed above, consummation of the Transaction would constitute an
"assignment," as that term is defined in the Investment Company Act of 1940 (the
"1940 Act"), of each Fund's current investment management agreement with ZKI. As
required by the 1940 Act, each current investment management agreement provides
for its automatic termination in the event of its assignment. In anticipation of
the Transaction, a new investment management agreement ("management agreement")
between each Fund and SKI is being proposed for approval by shareholders of each
Fund. (Depending on the timing of integrating the Scudder and ZKI organizations,
the new investment management agreement may initially be between the Fund and
ZKI for some period following the Transaction and then be transferred to SKI
without further action required on the part of shareholders of the Fund. SKI or
ZKI, as party to the new investment management agreement, is sometimes referred
to in this proxy statement as the "investment manager.") A copy of the form of
the new management agreement is attached hereto as Exhibit C.

14
<PAGE> 22

BOARD OF TRUSTEES RECOMMENDATION

The Board of each Fund met on June 30, 1997, August 1-2, 1997, August 18, 1997,
and September 15, 1997 to consider the Transaction and its anticipated effects
upon ZKI and the investment management and other services provided to the Funds
by ZKI and its affiliates. In addition, the Independent Trustees also met
separately with counsel on a number of occasions to discuss the Transaction. On
September 15, 1997 the Board of each Fund, including a majority of the trustees
who are not parties to such agreement or interested persons of any such party,
voted unanimously to approve the new management agreement and to recommend it to
shareholders for their approval.

For information about each Board's deliberations and the reasons for its
recommendation, please see "Board of Trustees Evaluation" near the end of this
Item 3.

The Board of each Fund recommends that shareholders vote FOR approval of the new
management agreement.

THE CURRENT INVESTMENT MANAGEMENT AGREEMENT

Each current management agreement provides that the Fund's investment manager
acts as investment adviser, manages the Fund's investments, administers the
Fund's business affairs, furnishes offices, necessary facilities and equipment,
provides clerical, bookkeeping and administrative services, provides shareholder
and information services and permits any of its officers or employees to serve
without compensation as trustees or officers of the Fund if duly elected to such
positions. Under the current management agreement, the Fund agrees to assume and
pay the charges and expenses of its operations including, by way of example, the
compensation of the trustees other than those affiliated with the investment
manager, charges and expenses of independent auditors, of legal counsel, of any
transfer or dividend disbursing agent, of any registrar of the Fund and of the
custodian (including fees for safekeeping of securities), costs of calculating
net asset value, all costs of acquiring and disposing of portfolio securities,
interest, if any, on obligations incurred by the Fund, costs of share
certificates, membership dues in the Investment Company Institute or any similar
organization, reports and notices to shareholders, other like miscellaneous
expenses and all taxes and fees to federal, state or other governmental
agencies.

Listed below is the annual management fee rate as a percentage of average daily
net assets payable under the current management agreement for each Fund except
KSCF and KAGGF. KSCF and KAGGF each pay at a base annual management fee rate of
.65% of average daily net assets, subject to upward or downward adjustment on
the basis of the investment performance of the Class A Shares of the Fund
compared with the performance of

15
<PAGE> 23

the Standard & Poor's 500 Stock Index. After the effect of the adjustment, the
management fee rate for the KSCF may range between .35% and .95% and the
management fee rate for the KAGGF may range between .45% and .85%. (See page 11
of Exhibit C for more information regarding the computation of KSCF's and
KAGGF's management fee.) Exhibit J shows the management fees paid by each Fund
to ZKI for the Fund's most recently completed fiscal year.

<TABLE>
<CAPTION>
KBCF
KDIF KIMBF
KGF KARGF
KHYF KICPF
KTEC KSTIS
KIF KTRF KUSMF KMBF
APPLICABLE ASSETS ($000) KAGF KGIF KVGF KQEF KSIGF KGSF KCRF
- ------------------------ ---- ---- ---- ---- ----- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$0 - $250,000........... .85% .75% .72% .58% .55% .45% .40%
$250,000 - $1,000,000... .82 .72 .69 .55 .52 .43 .38
$1,000,000 -
$2,500,000............ .80 .70 .66 .53 .50 .41 .35
$2,500,000 -
$5,000,000............ .78 .68 .64 .51 .48 .40 .32
$5,000,000 -
$7,500,000............ .75 .65 .60 .48 .45 .38 .30
$7,500,000 -
$10,000,000........... .74 .64 .58 .46 .43 .36 .28
$10,000,000 -
$12,500,000........... .73 .63 .56 .44 .41 .34 .26
Over $12,500,000........ .72 .62 .54 .42 .40 .32 .25
</TABLE>

Except for KMBF, KGSF and KCATF, each management agreement provides that the
Fund's investment manager will reimburse the Fund should the operating expenses
of the Fund, including the investment management fee, but excluding taxes,
interest, distribution fees, extraordinary expenses and brokerage commissions or
transaction costs, and any other properly excludable expenses, exceed on an
annual basis the applicable state expense limitations. Currently, there are no
state expense limitations in effect. As to KMBF, KGSF and KCATF, each management
agreement provides that the Fund's investment manager will reimburse the Fund
should operating expenses of the Fund exceed on an annual basis the following
levels: for KMBF and KGSF, 1% of average daily net assets; and for KCATF, 1.5%
of the first $30 million of average daily net assets and 1% of average daily net
assets over $30 million. For this purpose, operating expenses include the
investment management fee but exclude interest, taxes, extraordinary expenses,
brokerage commissions and transaction costs and distribution fees. The
investment management

16
<PAGE> 24

fee and the expense limitation are computed based upon average daily net assets
of each Fund.

Each management agreement provides that the Fund's investment manager shall not
be liable for any error of judgment or of law, or for any loss suffered by the
Fund in connection with the matters to which the management agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross negligence
on the part of the Fund's investment manager in the performance of its
obligations and duties or by reason of its reckless disregard of its obligations
and duties under the management agreement.

Each management agreement may be terminated for such Fund or series thereof
without penalty upon sixty (60) days written notice by either party, or by a
majority vote of the outstanding shares of the Fund or series thereof, and
automatically terminates in the event of its assignment.

ZKI has acted as investment adviser and manager for each Fund since each Fund,
except KGSF, commenced public offering of its shares as shown below. Also shown
is the date of each current management agreement, the date when the current
management agreement was last approved by the trustees and the shareholders of
each Fund, the purpose of the last submission to shareholders of the current
management agreement and the date to which the current management agreement
continues.

<TABLE>
<CAPTION>
APPROVAL OF CURRENT CURRENT
COMMENCEMENT DATE OF AGREEMENT BY AGREEMENT
OF INVESTMENT CURRENT ----------------------- CONTINUED BY
FUND OPERATIONS AGREEMENT TRUSTEES SHAREHOLDERS TRUSTEES TO
---- ------------- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
KTEC................. 09/07/48 01/04/96 01/21/97 09/19/95(b) 03/01/98
KTRF................. 03/02/64 01/04/96 01/21/97 09/19/95(b) 03/01/98
KGF.................. 04/04/66 01/04/96 01/21/97 09/19/95(b) 03/01/98
KSCF................. 02/20/69 01/04/96 01/21/97 09/19/95(b) 03/01/98
KICPF................ 04/15/74 01/04/96 01/21/97 09/19/95(b) 03/01/98
KNTIS
KMBF............... 04/20/76 01/04/96 01/21/97 09/19/95(b) 03/01/98
KIMBF.............. 11/01/94 01/04/96 01/21/97 09/19/95(b) 03/01/98
KDIF................. 06/23/77 01/04/96 01/21/97 09/19/95(b) 03/01/98
KHYS
KHYF............... 01/26/78 01/04/96 01/21/97 09/19/95(b) 03/01/98
KGSF................. 10/01/79(a) 01/04/96 01/21/97 09/19/95(b) 03/01/98
KIF.................. 05/21/86 01/04/96 01/21/97 09/19/95(b) 03/01/98
KSTIS
KCATF.............. 02/17/83 01/04/96 01/21/97 09/19/95(b) 03/01/98
KNYTF.............. 12/31/85 01/04/96 01/21/97 09/19/95(b) 03/01/98
KFLTF.............. 04/25/91 01/04/96 01/21/97 09/19/95(b) 03/01/98
KTXTF.............. 11/01/91 01/04/96 01/21/97 09/19/95(b) 03/01/98
KOHTF.............. 03/22/93 01/04/96 01/21/97 09/19/95(b) 03/01/98
</TABLE>

17
<PAGE> 25
<TABLE>
<CAPTION>
APPROVAL OF CURRENT CURRENT
COMMENCEMENT DATE OF AGREEMENT BY AGREEMENT
OF INVESTMENT CURRENT ----------------------- CONTINUED BY
FUND OPERATIONS AGREEMENT TRUSTEES SHAREHOLDERS TRUSTEES TO
---- ------------- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
KMITF.............. 03/15/95 01/04/96 01/21/97 09/19/95(b) 03/01/98
KNJTF.............. 03/15/95 01/04/96 01/21/97 09/19/95(b) 03/01/98
KPATF.............. 03/15/95 01/04/96 01/21/97 09/19/95(b) 03/01/98
KP
KCRF............... 02/06/84 01/04/96 09/15/97 09/19/95(b) 12/01/98
KUSMF.............. 10/26/84 01/04/96 01/21/97 09/19/95(b) 03/01/98
KSIGF.............. 02/01/89 01/04/96 01/21/97 09/19/95(b) 03/01/98
KARGF 09/01/87 01/04/96 01/21/97 09/19/95(b) 03/01/98
KBCF................. 11/23/87 01/04/96 01/21/97 09/19/95(b) 03/01/98
KGIF................. 10/01/89 01/04/96 01/21/97 09/19/95(b) 03/01/98
KVGF................. 01/21/97 (c) 03/01/98
KQEF................. 01/21/97 (c) 03/01/98
KAGF................. 01/21/97 (c) 03/01/98
KAGGF................ 01/21/97 (c) 03/01/98
</TABLE>

- ---------------
(a) Date when ZKI assumed investment management responsibilities.

(b) The current management agreement was last submitted to shareholders for
approval in connection with the Zurich/Kemper merger.

(c) The current management agreement was last submitted to shareholders for
approval by the initial shareholder (i.e., ZKI) immediately prior to the
commencement of the public offering of shares.

SUB-ADVISER--ZIML

KTEC, KTRF, KGF, KSCF, KICPF, KDIF, KHYF, KIF, KBCF, KGIF, KVGF, KQEF, KAGF and
KAGGF each use the investment management services of Zurich Investment
Management Limited ("ZIML"), 1 Fleet Place, London, UK, ECM4, 7RQ, an indirect
subsidiary of Zurich and an affiliate of ZKI, with respect to investments in
foreign securities pursuant to the sub-advisory agreements between ZKI and ZIML
described below. The current sub-advisory agreements are dated December 1, 1996,
and will continue, unless replaced or otherwise terminated, until March 1, 1998.

As with the investment management agreements, the sub-advisory agreements with
ZIML will terminate upon consummation of the Transaction. As discussed below,
new sub-advisory agreements are proposed for KIF, KGIF and KAGF. (See "Item 4.
New Sub-Advisory Agreement with Zurich Investment Management Limited.") For
KTEC, KTRF, KGF, KSCF, KICPF, KDIF, KHYF, KBCF, KVGF, KQEF and KAGGF, however,
new sub-advisory agreements are not being proposed; and the investment manager
would assume responsibility for the portion of those Fund's assets invested in
foreign securities. In addition, as described above, it is expected that
ownership of ZIML will be transferred to SKI or

18
<PAGE> 26

to a direct or indirect wholly-owned subsidiary of SKI upon consummation of the
Transaction.

Under the terms of the Sub-Advisory Agreement for a Fund, ZIML renders
investment advisory and management services with regard to that portion of the
Fund's portfolio as may be allocated to ZIML by ZKI from time to time for
management of foreign securities, including foreign currency transactions and
related investments. For its services, ZIML receives from ZKI (not from the
Funds) a monthly fee at the following annual rates on the portion of the average
daily net assets allocated by ZKI to ZIML for management:

KTEC, KTRF, KGF, KSCF, KIF, KBCF, KVGF, KQEF,
KAGF, KAGGF.............................................................. .35%
KICPF, KDIF, KHYF, KGIF.................................................... .30%

Each Sub-Advisory Agreement provides that ZIML will not be liable for any error
of judgment or mistake of law or for any loss suffered by any Fund in connection
with matters to which the Sub-Advisory Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
ZIML in the performance of its duties or from reckless disregard by ZIML of its
obligations and duties under the Sub-Advisory Agreement.

Each Sub-Advisory Agreement is for a term ending March 1, 1998 and continues in
effect from year to year so long as its continuation is approved at least
annually (a) by a majority of the trustees who are not parties to such agreement
or interested persons of any such party except in their capacity as trustees of
the Fund and (b) by the shareholders or the Board of Trustees. Each Sub-Advisory
Agreement may be terminated at any time for a Fund upon 60 days notice by ZKI,
ZIML or the Board of Trustees or by a majority vote of the outstanding shares of
the Fund, and will terminate automatically upon assignment or upon the
termination of the Fund's investment management agreement. No sub-advisory fees
were paid by ZKI to ZIML for each Fund's 1996 fiscal year, although in prior
fiscal years ZKI has paid ZIML for its services to ZKI with respect to foreign
securities investments of certain Funds.

SUB-ADVISER--ZKVA

KVGF uses the investment management services of Zurich Kemper Value Advisers,
Inc. ("ZKVA") with respect to investments in the value portion of KVGF pursuant
to the sub-advisory agreement between ZKI and ZKVA described below. ZKVA is a
wholly-owned subsidiary of ZKI and is located at 280 Park Avenue, New York, New
York 10017. The current sub-advisory agreement is dated , 19 ,
was approved on , 19 , by ZKI as the initial shareholder, was
last approved

19
<PAGE> 27

for continuation by the Board on , and will continue, unless
replaced or otherwise terminated, until , 19 .

As with the investment management agreements, upon consummation of the
Transaction, the sub-advisory agreement with ZKVA will terminate. As discussed
below, a new sub-advisory agreement with ZKVA is being proposed. (See "Item 5.
New Sub-Advisory Agreement with Zurich Kemper Value Advisors, Inc.") However, it
is expected that, upon consummation of the Transaction or soon thereafter, ZKVA
will be combined with SKI, the separate sub-advisory agreement with ZKVA will be
terminated, and all ZKVA functions will be provided by SKI.

Under the terms of the Sub-Advisory Agreement, ZKVA manages the value portion of
KVGF's portfolio and provides such investment advice, research and assistance as
ZKI may, from time to time, reasonably request. ZKVA may, under the terms of the
Sub-Advisory Agreement, render similar services to others including other
investment companies. For its services, ZKVA receives from ZKI (not from the
Fund) a monthly fee at the annual rate of .25% of KVGF's average daily net
assets. ZKVA permits any of its officers or employees to serve without
compensation as trustees or officers of KVGF if elected to such positions.

The Sub-Advisory Agreement provides that ZKVA will not be liable for any error
of judgment or mistake of law or for any loss suffered by KVGF in connection
with matters to which the Sub-Advisory Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
ZKVA in the performance of its duties or from reckless disregard by ZKVA of its
obligations and duties under the Sub-Advisory Agreement.

The Sub-Advisory Agreement continues by its terms from year to year if such
continuance is specifically approved at least annually (a) by a majority of
trustees who are not parties to such agreement or interested persons of any such
party except in their capacity as trustees of KVGF, and (b) by the shareholders
or the Board of Trustees of KVGF. The Sub-Advisory Agreement may be terminated
at any time upon 60 days' notice by ZKI, ZKVA or the Board of Trustees of KVGF
or by a majority vote of the outstanding shares of KVGF, and will terminate
automatically upon assignment or upon termination of KVGF's investment
management agreement.

The sub-advisory fees paid by ZKI to ZKVA for KVGF for the fiscal year ended
November 30, 1996 were $54,000.

NEW INVESTMENT MANAGEMENT AGREEMENT

The new investment management agreement for each Fund is substantially similar
to the current investment management agreement. While the

20
<PAGE> 28

form of the agreement is different (i.e., a form generally used by Scudder),
there is no material difference in the substance of the obligations of the
investment manager under the agreement except that, under a separate agreement
with Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of Scudder,
SFAC, rather than SKI as investment manager, will compute the net asset value
for each Fund. SFAC will not charge the Funds for this service and has no
current intention to do so; however, subject to Board approval, at some time in
the future, SFAC may seek payment for its services under the agreement. In
addition, for each Fund except KMBF, KGSF and KCATF, the expense limitation has
been deleted because there are no longer any state expense limitations in
effect.

The new management agreement for each Fund will be dated as of the date of the
consummation of the Transaction, which is expected to occur in the fourth
quarter of 1997, but in no event later than February 28, 1998. The new
management agreement will be for an initial term ending on the same date as
would the current management agreement but for the Transaction, and may continue
thereafter from year to year if specifically approved at least annually by the
vote of "a majority of the outstanding voting securities" of such Fund, as
defined under the 1940 Act, or by the Board and, in either event, the vote of a
majority of the trustees who are not parties to the agreement or interested
persons of any such party, cast in person at a meeting called for such purpose.

BOARD OF TRUSTEES EVALUATION

On June 27, 1997, the Board of each Fund was informed of the Transaction.
Thereafter, each Board was given extensive information about the Transaction and
Scudder. The Boards met with senior management personnel of Zurich and Scudder
and had extended discussions regarding Zurich's and Scudder's plans for ZKI, SKI
and the Funds. Throughout the process, the Independent Trustees of each Board
had the assistance of legal counsel, who prepared, among other things, an
analysis of the Board's fiduciary obligations. The Boards met on June 30, 1997,
August 1-2, 1997, August 18, 1997 and September 15, 1997 to consider the
Transaction and its effects on the Funds. The Independent Trustees also met
separately with counsel on a number of occasions to discuss the Transaction. As
a result of its review and consideration of the Transaction and the proposed new
management agreements, at its meeting on September 15, 1997, the Board of each
Fund voted unanimously to approve the new management agreement and to recommend
it to the shareholders of each Fund for their approval.

In connection with its review, each Board obtained substantial information
regarding: the management, financial position and business of Scudder; the
history of Scudder's business and operations; the investment

21
<PAGE> 29

performance of the investment companies and private accounts advised by Scudder;
the anticipated effect of the Transaction on the Funds and their shareholders;
and future plans of Zurich and Scudder with respect to ZKI, SKI and the Funds.
Each Board also received information regarding the terms of the Transaction and
comprehensive financial information, including: employment agreements with
senior Scudder executives; incentive stock compensation to be given to key ZKI
personnel; and anticipated SKI management and board of directors.

In connection with their deliberations, the Boards of the Funds obtained certain
assurances from Zurich and Scudder, including the following:

- - Zurich and Scudder have provided to the Boards such information as is
reasonably necessary to evaluate the new management and other agreements.

- - Zurich looks upon SKI as the core of Zurich's global asset management
strategy. With that focus, Zurich will devote to SKI and its affairs all
attention and resources that are necessary to provide for each Fund top
quality investment management, shareholder, administrative and product
distribution services.

- - Scudder looks upon the Kemper Funds as a core part of Scudder's global asset
management strategy. With that focus, Scudder will devote to the Kemper Funds
and their affairs all attention and resources that are necessary to provide
for each Fund top quality investment management, shareholder, administrative
and product distribution services.

- - The Transaction will not result in any change in any Fund's investment
objectives or policies.

- - The Transaction is not expected to result in any adverse change in the
investment management or operations of the Funds; and neither Zurich nor
Scudder plans to make any material change in the manner in which investment
advisory services or other services are rendered to each Fund which has the
potential to have a material adverse effect upon any Fund.

- - Zurich and Scudder are committed to the continuance, without interruption, of
services to the Funds of the type and quality currently provided by ZKI and
its subsidiaries, or superior thereto.

- - Zurich and Scudder plan to maintain or enhance the SKI facilities and
organization.

- - In order to retain and attract key personnel, Zurich and Scudder intend for
SKI to maintain overall compensation policies and practices at market levels
or better.

22
<PAGE> 30

- - Zurich and Scudder intend to maintain the distinct brand identity of the
Kemper and Scudder Funds and are committed to strengthening and enhancing both
brands and the distribution channels for both families of Funds, while
maintaining their separate brand identity.

- - Scudder has in place a detailed and comprehensive plan of action to
effectively deal with the year 2000 issue for all SKI operations. The Kemper
Funds will not be transferred from their current systems unless certain
conditions are met.

- - Zurich and Scudder will promptly advise the Boards of decisions materially
affecting the SKI organization as they relate to the Funds. Neither this, nor
any of the other above commitments will be altered by Zurich or Scudder
without the Board's prior consideration.

Zurich and Scudder assured each Board that they intend to comply with Section
15(f) of the 1940 Act. Section 15(f) provides a non-exclusive safe harbor for an
investment adviser to an investment company or any of its affiliated persons to
receive any amount or benefit in connection with a change in control of the
investment adviser so long as two conditions are met. First, for a period of
three years after the Transaction, at least 75% of the board members of the
investment company must not be "interested persons" of such investment adviser.
The composition of the Board of each Fund, currently and as proposed, would be
in compliance with this provision of Section 15(f). (See Item 1--"Election of
Board of Trustees.") Second, an "unfair burden" must not be imposed upon the
investment company as a result of such transaction or any express or implied
terms, conditions or understandings applicable thereto. The term "unfair burden"
is defined in Section 15(f) to include any arrangement during the two-year
period after the Transaction whereby the investment adviser, or any interested
person of any such adviser, receives or is entitled to receive any compensation,
directly or indirectly, from the investment company or its shareholders (other
than fees for bona fide investment advisory or other services) or from any
person in connection with the purchase or sale of securities or other property
to, from or on behalf of the investment company (other than bona fide ordinary
compensation as principal underwriter for such investment company). Zurich and
Scudder are not aware of any express or implied term, condition, arrangement or
understanding that would impose an "unfair burden" on any Fund as a result of
the Transaction. Zurich and Scudder have agreed that they, and their affiliates,
will take no action that would have the effect of imposing an "unfair burden" on
any Fund as a result of the Transaction. In furtherance thereof, ZKI has
undertaken to pay the costs of preparing and distributing proxy materials to and
of holding the meetings of the Funds' shareholders as well as other fees and
expenses in connection with the Transaction, including the fees and expenses of
legal counsel to the Funds and the Independent Trustees, and Zurich has agreed
to indemnify each

23
<PAGE> 31

Fund and the Independent Trustees for and against any liability and expenses
based upon any action or omission by the Independent Trustees in connection with
their consideration of and action with respect to the Transaction. In addition,
Scudder has agreed to indemnify each Fund and the Independent Trustees for and
against any liability and expenses based upon any misstatements or omissions by
Scudder to the Independent Trustees in connection with their consideration of
the Transaction.

In evaluating each new management agreement, each Board took into account that
the fees and expenses payable by each Fund under the new management agreement
are the same as under the current management agreement, that the services
provided to the Fund are the same (except for services to be provided under a
separate Fund Accounting Agreement as described above) and that the other terms
are substantially similar. Each Board also took into consideration the extent to
which portfolio managers and research personnel would continue their functions
with SKI. Each Board also considered Scudder's representation that the Funds'
shareholder service providers and the terms of the shareholder service
agreements were not being proposed to be changed. Each Board noted that, in
previously approving the continuation of the current management agreements, the
Board had considered a number of factors, including the nature and quality of
services provided by ZKI; investment performance, both of the Fund itself and
relative to that of competitive investment companies; investment management fees
and expense ratios of the Fund and competitive investment companies; ZKI
profitability from managing the Funds; fall-out benefits to ZKI from its
relationship to the Funds, including revenues derived from services provided to
the Funds by affiliates of ZKI; and the potential benefits to ZKI and to the
Funds and their shareholders of receiving research services from broker/dealer
firms in connection with the allocation of portfolio transactions to such firms.
The Board also considered that Scudder has a current policy of not paying higher
brokerage commissions solely for receipt of market, statistical and other
research services, that SKI is expected to adopt the same policy.

The Board discussed the Transaction with the senior management of ZKI, Scudder
and Zurich and among themselves. The Board considered that Zurich is a large,
well-established company with substantial resources, and, as noted above, has
undertaken to devote such resources to SKI as are necessary to provide each Fund
with top quality services. The Board also considered that Scudder is a large,
well-established investment advisory firm with a substantial number of highly
rated funds.

As a result of their review and consideration of the Transaction and the new
management agreements, at its meeting on September 15, 1997, the Board of each
Fund voted unanimously to approve the new management agreement and to recommend
it to the shareholders of the Fund for their approval.

24
<PAGE> 32

The Board of each Fund recommends that shareholders vote FOR approval of the new
management agreement.

ITEM 4. NEW SUB-ADVISORY AGREEMENT
WITH ZURICH INVESTMENT MANAGEMENT LIMITED
(FOR KIF, KGIF, AND KAGF ONLY.)

Zurich Investment Management Limited ("ZIML") is the sub-adviser for KIF, KGIF
and KAGF. As noted above, the consummation of the Transaction and the ZIML
Transaction each would constitute an "assignment," as defined in the 1940 Act,
of each Fund's current sub-advisory agreement with ZIML. As required by the 1940
Act, each current sub-advisory agreement provides for its automatic termination
in the event of its assignment. In anticipation of the Transaction and the ZIML
Transaction, a new sub-advisory agreement with ZIML is being proposed for
approval by the shareholders of each Fund. The new sub-advisory agreement with
ZIML is on the same terms as the current sub-advisory agreement. A vote in favor
of Item 4 will approve both the new sub-advisory agreement with ZIML to be
effective at the time of the Transaction as well as the sub-advisory agreement
with ZIML to be effective at the time of the ZIML Transaction. A copy of the new
sub-advisory agreement is attached hereto as Exhibit D.

A new sub-advisory agreement will be dated as of the date of the consummation of
the Transaction or the ZIML Transaction and will be in effect for an initial
term ending on the same date as would the current sub-advisory agreement but for
the Transaction (or ZIML Transaction), and may continue thereafter from year to
year if such continuance is specifically approved at least annually by the vote
of a "majority of the outstanding voting securities" of each of the Funds, as
defined under the 1940 Act, or the Board, including, in either event, the vote
of a majority of the trustees who are not parties to the agreement or interested
persons of any such party, cast in person at a meeting called for such a
purpose.

BOARD OF TRUSTEES RECOMMENDATION

The Board of each Fund recommends that shareholders vote FOR approval of the new
sub-advisory agreement with ZIML.

ITEM 5. NEW SUB-ADVISORY AGREEMENT WITH
ZURICH KEMPER VALUE ADVISORS, INC.
(FOR KVGF ONLY.)

Zurich Kemper Value Advisors, Inc. ("ZKVA") is the sub-adviser for KVGF. As
noted above, the consummation of the Transaction would constitute an
"assignment," as defined in the 1940 Act, of KVGF's current sub-advisory
agreement with ZKVA. As required by the 1940 Act, the

25
<PAGE> 33

current sub-advisory agreement provides for its automatic termination in the
event of its assignment. In anticipation of the Transaction, a new sub-advisory
agreement with ZKVA is being proposed for approval by the shareholders of KVGF.
The new sub-advisory agreement with ZKVA is on the same terms as the current
sub-advisory agreement. A copy of the new sub-advisory agreement is attached
hereto as Exhibit E.

The new sub-advisory agreement will be dated as of the date of the consummation
of the Transaction and will be in effect for an initial term ending on the same
date as would the current sub-advisory agreement but for the Transaction, and
may continue thereafter from year to year if such continuance is specifically
approved at least annually by vote of a "majority of the outstanding voting
securities" of KVGF, as defined under the 1940 Act, or the Board, including, in
either event, the vote of a majority of the trustees who are not parties to the
agreement or interested persons of any such party, cast in person at a meeting
called for such purpose. It is expected, however, that upon consummation of the
Transaction or soon thereafter, ZKVA will be combined with SKI, the separate
sub-advisory agreement with ZKVA will be terminated and all ZKVA functions will
be provided by SKI.

BOARD OF TRUSTEES RECOMMENDATION

The Board of KVGF recommends that shareholders vote FOR approval of the new
sub-advisory agreement with ZKVA.

ITEM 6. NEW RULE 12B-1 DISTRIBUTION PLAN
(FOR CLASS B AND CLASS C SHAREHOLDERS ONLY)

INTRODUCTION

Rule 12b-1 under the 1940 Act (the "Rule"), provides, among other things, that
an investment company (mutual fund) may bear expenses of distributing its shares
only pursuant to a plan (a "Rule 12b-1 Plan") adopted in accordance with the
Rule. Zurich Kemper Distributors, Inc. ("ZKDI"), acting as principal underwriter
and distributor for each Fund, distributes each Fund's Class B Shares and Class
C Shares pursuant to a Rule 12b-1 Plan.

Consummation of the Transaction may constitute an "assignment," as that term is
defined in the 1940 Act, of each Fund's Rule 12b-1 Plan, which provides for its
automatic termination in the event of its assignment. In anticipation of the
Transaction a new Rule 12b-1 Plan is being submitted for shareholder approval of
each Fund's Class B and Class C shareholders. THE NEW RULE 12B-1 PLAN IS ON THE
SAME TERMS AS THE FUND'S CURRENT RULE 12B-1 PLAN. A form of the new Rule 12b-1
Plan for each Fund is attached hereto as Exhibit F. NO CHANGE IN FEES IS BEING
PROPOSED.

26
<PAGE> 34

On September 15, 1997, the Board of each Fund, including a majority of the
"non-interested" trustees, voted unanimously to approve the new Rule 12b-1 Plan
for each Fund, and directed that it be submitted to the Class B and Class C
shareholders of each Fund at the Meeting, along with a recommendation that they
approve the Rule 12b-1 Plan.

If the new Rule 12b-1 Plan is approved by a class, it will become effective for
that class and will replace the current Rule 12b-1 Plan upon consummation of the
Transaction.

DESCRIPTION OF THE NEW RULE 12B-1 PLAN

As noted above, a form of the new Rule 12b-1 Plan is attached as Exhibit F and
this summary is qualified in its entirety by reference to Exhibit F. THE NEW
RULE 12B-1 PLAN DESCRIBED BELOW IS ON THE SAME TERMS AS THE CURRENT RULE 12B-1
PLAN FOR EACH FUND.

Under each Fund's Rule 12b-1 Plan, ZKDI receives a distribution fee, payable as
an expense of the Class B Shares and the Class C Shares, which ZKDI uses to pay
for distribution services for those classes. ZKDI bears all the expenses of
providing such services, including the payment of any commissions or
distribution fees. ZKDI provides for the preparation of advertising or sales
literature and bears the cost of printing and mailing prospectuses to persons
other than shareholders. ZKDI bears the cost of qualifying and maintaining the
qualification of Fund Shares for sale under the securities laws of the various
states, and each Fund bears the expense of registering its Shares with the SEC.
ZKDI may enter into related selling group agreements with various
broker-dealers, including affiliates of ZKDI, that provide distribution services
to investors. ZKDI also may provide some of the distribution services. (See
"Other Information--Underwriter" below.)

CLASS B SHARES. Each Fund's Class B Shares are sold to the public at net asset
value with a contingent deferred sales charge ("CDSC"), and automatic conversion
to Class A after a specified period of time. ZKDI receives a fee from each Fund,
payable monthly, at the annual rate of .75 of 1% of average daily net assets of
each Fund attributable to Class B Shares. This fee is accrued daily as an
expense of Class B Shares. ZKDI also receives any CDSC. ZKDI currently
compensates firms for sales of Class B Shares at a commission rate of 3.75%.

CLASS C SHARES. Each Fund's Class C Shares are sold to the public at net asset
value with a CDSC for shares redeemed during the first year following purchase.
ZKDI receives a fee from each Fund, payable monthly for as long as the shares
are owned, at the annual rate of .75 of 1% of average daily net assets of each
Fund attributable to Class C Shares. This fee is accrued daily as an expense of
Class C Shares. ZKDI also receives any CDSC. ZKDI currently pays firms for sales
of Class C Shares a

27
<PAGE> 35

distribution fee, payable quarterly, at an annual rate of .75 of 1% of net
assets attributable to Class C Shares maintained and serviced by the firm. A
firm becomes eligible for the distribution fee based upon assets in accounts in
the month of purchase and the fee continues until terminated by ZKDI or a Fund.

The table below shows, as to the Rule 12b-1 Plan for the Class B Shares and the
Class C Shares of each Fund, the date adopted, the date of the last amendment
(if any), the date last approved by the trustees and the date to which it
continues.

<TABLE>
<CAPTION>
CLASS B AND CLASS C RULE 12B-1 PLAN
-------------------------------------------
DATE APPROVAL BY DATE
FUND ADOPTED TRUSTEES CONTINUED TO
---- ------- ----------- ------------
<S> <C> <C> <C>

KTEC...................... 01/04/96 01/27/97 03/01/98
KTRF...................... 01/04/96 01/27/97 03/01/98
KGF....................... 01/04/96 01/27/97 03/01/98
KSCF...................... 01/04/96 01/27/97 03/01/98
KICPF..................... 01/04/96 01/27/97 03/01/98
KNTIS
KMBF.................... 01/04/96 01/27/97 03/01/98
KIMBF................... 01/04/96 01/27/97 03/01/98
KDIF...................... 01/04/96 01/27/97 03/01/98
KHYS
KHYF.................... 01/04/96 01/27/97 03/01/98
KGSF.................... 01/04/96 01/27/97 03/01/98
KIF..................... 01/04/96 01/27/97 03/01/98
KSTIS
KCATF................... 01/04/96 01/27/97 03/01/98
KNYTF................... 01/04/96 01/27/97 03/01/98
KFLTF................... 01/04/96 01/27/97 03/01/98
KTXTF................... 01/04/96 01/27/97 03/01/98
KOHTF................... 01/04/96 01/27/97 03/01/98
KMITF................... 01/04/96 01/27/97 03/01/98
KNJTF................... 01/04/96 01/27/97 03/01/98
KPATF................... 01/04/96 01/27/97 03/01/98
KP
KCRF.................... 01/04/96 09/15/97 12/01/98
KUSMF................... 01/04/96 01/27/97 03/01/98
KSIGF................... 01/04/96 01/27/97 03/01/98
KARGF..................... 01/04/96 01/27/97 03/01/98
KBCF...................... 01/04/96 01/27/97 03/01/98
KGIF...................... 01/04/96 01/27/97 03/01/98
KVGF...................... 01/27/97 03/01/98
</TABLE>

28
<PAGE> 36
<TABLE>
<CAPTION>
CLASS B AND CLASS C RULE 12B-1 PLAN
-------------------------------------------
DATE APPROVAL BY DATE
FUND ADOPTED TRUSTEES CONTINUED TO
---- ------- ----------- ------------
<S> <C> <C> <C>
KQEF...................... 01/27/97 03/01/98
KAGF...................... 09/15/97 03/01/98
KAGGF..................... 09/15/97 03/01/98

</TABLE>

The table below shows the distribution fees paid by each Fund to ZKDI for its
Class B Shares and Class C Shares for the most recent fiscal year of that Fund.
Information is not provided for KAGF and KAGGF because they recently commenced
operations and do not yet have fiscal year data.

<TABLE>
<CAPTION>
FISCAL CLASS B RULE 12B-1 PLAN FEES CLASS C RULE 12B-1 PLAN FEES
FUND YEAR END PAID TO ZKI BY FUND ($000) PAID TO ZKI BY FUND ($000)
---- -------- ---------------------------- ----------------------------
<S> <C> <C> <C>

KTEC................. 10/31/96 $ $
KTRF................. 10/31/96 $ $
KGF.................. 09/30/96 $ $
KSCF................. 09/30/96 $ $
KICPF................ 10/31/96 $ $
KNTIS................ $ $
KMBF............... 09/30/96
KIMBF.............. 09/30/96
KDIF................. 10/31/96 $ $
KHYS................. $ $
KHYF............... 09/30/96
KGSF................. 10/31/96 $ $
KIF.................. 10/31/96 $ $
KSTIS................ $ $
KCATF.............. 08/31/97
KNYTF.............. 08/31/97 $ $
KFLTF.............. 08/31/97 $ $
KTXTF.............. 08/31/97 $ $
KOHTF.............. 08/31/97 $ $
KMITF.............. 08/31/97
KNJTF.............. 08/31/97
KPATF.............. 08/31/97
KP................... $ $
KCRF............... 09/30/96
KUSMF.............. 09/30/96 $ $
KSIGF.............. 09/30/96 $ $
KARGF................ 08/31/97 $ $
KBCF................. 10/31/96 $ $
KGIF................. 12/31/96 $ $
KVGF................. 11/30/96 $ $
KQEF................. 11/30/96 $ $
</TABLE>

29
<PAGE> 37

The new Rule 12b-1 Plan will be in effect for an initial term ending on the same
date as would the current Rule 12b-1 Plan but for the Transaction and may
continue thereafter from year to year for a class if specifically approved at
least annually by vote of "a majority of the outstanding voting securities" of
that class, as defined under the 1940 Act, or by the Board, including, in either
event, the vote of a majority of the "non-interested" trustees, cast in person
at a meeting called for such purpose.

Pursuant to the new Rule 12b-1 Plan, ZKDI will prepare reports to the Board of a
Fund on a quarterly basis for the Fund's Class B Shares and Class C Shares
showing the amounts paid to the various firms and such other information as from
time to time the Board may reasonably request. The Rule requires the Board to
review such reports at least quarterly.

In approving the new Rule 12b-1 Plan, the Board of each Fund determined, as with
the current Rule 12b-1 Plan, that there is a reasonable likelihood that the new
Rule 12b-1 Plan would benefit the Fund and its shareholders. In doing so, each
Board considered several factors, including that the new Rule 12b-1 Plan would
(i) enable investors to choose the purchasing option best suited to their
individual situations, thereby encouraging current shareholders to make
additional investments in each Fund and attracting new investors and assets to
the Funds to the benefit of each Fund and its shareholders, (ii) facilitate
distribution of each Fund's shares, (iii) help maintain the competitive position
of each Fund in relation to other funds that have implemented or are seeking to
implement similar distribution arrangements, and (iv) permit possible economies
of scale through increased Fund size.

BOARD OF TRUSTEES RECOMMENDATION

As a result of its consideration of the foregoing factors, the Board of each
Fund voted unanimously to approve the new Rule 12b-1 Plans and to submit them to
the shareholders for their approval.

The Board of each Fund recommends that shareholders vote FOR approval of the new
Rule 12b-1 Plan.

ITEM 7. CHANGES TO EACH FUND'S FUNDAMENTAL INVESTMENT POLICIES TO PERMIT A
MASTER FUND/FEEDER FUND STRUCTURE

For greater investment flexibility, ZKI has recommended that each Fund make
certain changes to its fundamental investment policies to permit the Fund to
invest substantially all of its investable assets, except to the extent required
to remain uninvested to satisfy near-term cash requirements, in an open-end
management investment company managed by the same investment manager or an
affiliate and having the same investment objectives and substantially similar
policies and restrictions as the Fund (a

30
<PAGE> 38

"Master Fund"). The proposed fundamental investment policies are set forth in
Exhibit G.

The proposed changes to each Fund's fundamental investment policies would permit
the Fund to adopt a "Master Fund/Feeder Fund Structure." Rather than investing
directly in a portfolio of securities, a Fund would be authorized to pool its
assets with other mutual funds managed by its investment manager for investment
in a Master Fund, making it a "Feeder Fund." A purpose of such an arrangement is
to achieve operational efficiencies, assuming that the assets of the Master Fund
are greater than the assets of any individual Feeder Fund. While each Board has
not determined that any Fund should convert to a Master Fund/Feeder Fund
Structure at this time, each Board believes it could be in the best interests of
some or all Funds at some future date.

If the proposed changes in the investment policies are approved by shareholders
of a Fund, the Fund's Board could vote at some time in the future to convert
that Fund into a Feeder Fund under which all of the assets of the Fund would be
invested in a Master Fund. The Feeder Fund would transfer its assets to a Master
Fund in exchange for shares of beneficial interest in the Master Fund having the
same net asset value as the value of the assets transferred. (The ownership
interests of the Fund's shareholders will not be altered by this change.)

Under each Fund's Declaration of Trust, the affirmative vote of the shareholders
of the affected series entitled to vote more than fifty percent of the votes
entitled to be cast on the matter is required to sell or transfer substantially
all of the assets of the Fund. One way to convert a Fund to a Master Fund/Feeder
Fund Structure is through a sale or transfer of assets. Thus, approval of the
Board's discretionary authority to convert a Fund into a Master/Feeder Fund
Structure through a sale or transfer of assets requires, under a conservative
interpretation of each Fund's Declaration of Trust, the affirmative vote of a
majority of the shares of the Fund (or the affected series of the Fund, if
applicable). Approval of Item 7 by shareholders is also, therefore, deemed to
constitute approval of the Board's discretionary authority to convert a Fund
into a Master Fund/Feeder Fund Structure through a sale or transfer of assets.

Any Master Fund in which a Feeder Fund would invest would be required to have
the same investment objective and substantially similar policies and
restrictions as the Feeder Fund. Accordingly, by investing in a Master Fund, a
Feeder Fund would continue to pursue its present investment objectives and
policies in substantially the same manner as it does currently, except that it
would do so through its investment in the Master Fund rather than through direct
investments in the types of securities dictated by its investment objectives and
policies. The Master Fund, whose shares could be offered to institutional
investors in addition to a

31
<PAGE> 39

Feeder Fund, would invest in the same type of securities in which the Fund would
have invested directly, providing substantially the same investment results to
the Feeder Fund's shareholders. However, the expense ratios, the yields, and the
total returns of other investors in the Master Fund may be different from those
of the Feeder Fund due to differences in Feeder Fund expenses.

By investing substantially all of its assets in a Master Fund, a Feeder Fund
could expect to be in a position to realize directly or indirectly certain
economies of scale, in that a larger investment portfolio resulting from
multiple Feeder Funds is expected to achieve a lower ratio of operating expenses
to net assets. A Master Fund may be offered to an undetermined number of
institutional investors. However, there can be no assurance that any such
additional investments in a Master Fund by other Feeder Funds will take place.

If a Fund invests substantially all of its assets in a Master Fund, the Fund
will no longer require portfolio management services. For this reason, if the
shareholders of a Fund approve the proposed policy changes and the Board
converts the Fund into a Feeder Fund, then the existing investment management
agreement would be terminated; in such case, the Fund's Board would likely enter
into an administration agreement for the provision of certain administrative
services to the Fund currently provided under the existing investment management
agreement, with compensation at such rates as may be approved by the trustees.

MASTER FUNDS. The investment objective of any Master Fund would be the same as
the investment objective of the applicable Feeder Fund that would invest in it.
If a Fund's Board votes to convert a Fund into a Feeder Fund, the Fund's assets
will no longer be directly invested in the securities of multiple issuers, but
rather will be invested in the securities of a single issuer, i.e., the Master
Fund, which would be registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act").
Nevertheless, inasmuch as the assets of the Master Fund would be invested in a
portfolio of securities substantially similar to those in which a Feeder Fund is
authorized to invest, the Fund's Board believes that there would not be material
differences in risk to shareholders of a Fund investing indirectly through a
Master Fund rather than directly in debt and other types of securities in which
the Fund is authorized to invest. A Master Fund may have a different Board than
the Feeder Fund.

A Feeder Fund may withdraw its investment in a Master Fund at any time if the
Board determines that it is in the best interest of the shareholders of the
Feeder Fund to do so or if the investment policies or restrictions of the Master
Fund were changed so that they were inconsistent with the policies and
restrictions of the Feeder Fund. Upon any such withdrawal,

32
<PAGE> 40

the Board of the Feeder Fund would consider what action might be taken,
including the investment of all the assets of the Feeder Fund in another pooled
investment entity having substantially the same investment objective as the
Feeder Fund or the retaining of an investment adviser to directly invest the
Fund's assets in accordance with its investment objective and policies. If
another pooled investment vehicle with substantially the same investment
objective could not be found, it might have a significant impact on the
investment of shareholders in the Feeder Fund.

Whenever a Feeder Fund is asked to vote on a proposal by the Master Fund, the
Feeder Fund will hold a meeting of shareholders if required by applicable law or
its policies, and cast its vote with respect to the Master Fund in the same
proportion as its shareholders vote on the proposal.

Once its assets are invested in a Master Fund, a Feeder Fund will value its
holdings (i.e., shares issued by the Master Fund) at their fair value, which
will be based upon the daily net asset value of the Master Fund. The net income
of the Feeder Fund will be determined at the same time and on the same days as
the net income of the Master Fund is determined, which are the same time and
days that the Feeder Fund uses for this purpose.

Investments in a Master Fund would have no preemptive or conversion rights and
would be fully paid and non-assessable, except as set forth below. A Master Fund
would not be required to hold annual meetings of its investors, but the Master
Fund would be required to hold special meetings of investors when, in the
judgment of its trustees, it was necessary or desirable to submit matters for an
investor vote. Other investors in a Master Fund have rights similar to those of
Feeder Fund shareholders; under certain circumstances (e.g., upon application
and submission of certain specified documents to the trustees by a specified
number of investors), they have the right to communicate with other investors in
connection with requesting a meeting of investors for the purpose of removing
one or more of the Master Fund's trustees. Investors also have the right to
remove one or more trustees, without a meeting, by a declaration in writing by a
specified number of investors. Upon liquidation of a Master Fund, investors
would be entitled to share pro rata in the net assets of the Master Fund
available for distribution to investors.

Each Master Fund investor is entitled to a vote in proportion to the share of
its investment in the Master Fund. Investments in a Master Fund are not
transferable, but an investor (such as a Feeder Fund) may redeem all or any
portion of its investment at any time at net asset value.

TAX CONSIDERATIONS. The implementation of the proposed new Master Fund/Feeder
Fund investment policy of a Fund is not expected to have any adverse tax effects
on the Fund or its shareholders. As a condition of and prior to implementation
of conversion of a Fund to a Master

33
<PAGE> 41

Fund/Feeder Fund structure, the applicable Fund will either obtain a private
letter ruling from the Internal Revenue Service or will receive an opinion of
counsel that no gain or loss for Federal income tax purposes will be recognized
by the Feeder Fund, the Master Fund, or the shareholders of the Feeder Fund in
connection with the transfer of the Feeder Fund's assets to the Master Fund in
exchange for shares of beneficial interest in the Master Fund.

Each Feeder Fund would be expected to intend to continue to qualify and elect to
be treated as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). To so qualify, a Feeder
Fund must meet certain income, distribution, and diversification requirements.
It is expected that any Feeder Fund's investment in a Master Fund will satisfy
these requirements. Provided each Feeder Fund meets these requirements and
distributes all of its net investment income and realized capital gains to its
shareholders in accordance with the timing requirements imposed by the Code, the
Feeder Fund will not pay any Federal income or excise taxes. Any Master Fund
would qualify and elect to be treated as a "partnership" under the Code and,
therefore, would also not expect to be required to pay any Federal income or
excise taxes. Income dividends and any capital gain distributions by a Master
Fund to a Feeder Fund will be distributed by the Feeder Fund to its
shareholders, and such payments will be subject to Federal and applicable state
income taxes on that Feeder Fund's shareholders.

BOARD OF TRUSTEES RECOMMENDATION

As a result of its consideration of the foregoing facts, the Board of each Fund
voted unanimously to approve the change in fundamental investment policies to
permit a Master/Feeder fund structure and to submit them to the shareholders for
their approval.

The Board of each Fund recommends that shareholders vote FOR approval of the new
fundamental investment policies permitting a Master Fund/Feeder Fund structure.

OTHER INFORMATION

ZKI. Zurich Kemper Investments, Inc. ("ZKI"), 222 South Riverside Plaza,
Chicago, Illinois 60606, is the investment manager of each Fund and provides
each Fund with continuous professional investment supervision. ZKI is one of the
largest investment managers in the country and has been engaged in the
management of investment funds for more than forty-nine years. ZKI and its
affiliates provide investment advice and manage investment portfolios for the
Kemper Funds, affiliated insurance companies and other corporate, pension,
profit-sharing and individual

34
<PAGE> 42

accounts representing approximately $85 billion under management. ZKI acts as
investment manager or principal underwriter for 32 open-end and seven closed-end
investment companies, with 90 separate investment portfolios, representing more
than 2.5 million shareholder accounts. ZKI is an indirect subsidiary of Zurich
Insurance Company, a leading internationally recognized provider of insurance
and financial services in property/casualty and life insurance, reinsurance and
structured financial solutions as well as asset management ("Zurich").

The investment companies to which ZKI and its affiliates render investment
management services, and the related management fees, are identified in Exhibit
H.

The names, addresses and principal occupations of the principal executive
officer and the directors of ZKI are as follows:

<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------- --------------------
<S> <C>
Stephen B. Timbers, Director President, Chief Executive
222 South Riverside Plaza Officer and Chief Investment
Chicago, Illinois 60606 Officer, ZKI
John E. Neal, Director President, Kemper Funds Group
222 South Riverside Plaza
Chicago, Illinois 60606
William E. Chapman II President, Kemper Retirement
222 South Riverside Plaza Plans Group
Chicago, Illinois 60606
</TABLE>

ZIML. Zurich Investment Management Limited ("ZIML"), 1 Fleet Place, London, U.K.
EC4M 7RQ, is an indirect subsidiary of Zurich. The names, addresses and
principal occupations of the principal executive officer and the directors of
ZIML are as follows:

<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------- --------------------
<S> <C>
[insert]
</TABLE>

ZKVA. Zurich Kemper Value Advisors, Inc. ("ZKVA"), 280 Park Avenue, New York,
New York 10017, is a wholly-owned subsidiary of ZKI.

35
<PAGE> 43

The names, addresses and principal occupations of the principal executive
officer and the directors of ZKVA are as follows:

<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------- --------------------
<S> <C>
George Keith, Chief Executive Officer President, Chief Executive
and Director Officer and Director, ZKVA
280 Park Avenue
40th Floor
New York, New York 10017
Stephen B. Timbers, Director President, Chief Executive
222 South Riverside Plaza Officer and Chief Investment
Chicago, IL 60606 Officer, ZKI
John E. Neal, Director President, Kemper Funds Group
222 South Riverside Plaza
Chicago, IL 60606
</TABLE>

CUSTODIAN, TRANSFER AGENT AND SHAREHOLDER SERVICE AGENT. Investors Fiduciary
Trust Company ("IFTC"), 127 West 10th Street, Kansas City, Missouri 64105, as
custodian, and State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02210, as sub-custodian, have custody of all securities and cash
of each Fund maintained in the United States. For Funds that invest in foreign
securities, The Chase Manhattan Bank, Chase Metro Tech Center, Brooklyn, New
York 11245, as custodian, has custody of all securities and cash of the Funds
held outside the United States. IFTC also is the Funds' transfer agent and
dividend-paying agent. Pursuant to a services agreement with IFTC, Zurich Kemper
Service Company ("ZKSC"), an affiliate of ZKI, serves as "Shareholder Service
Agent" of the Funds and, as such, performs all of IFTC's duties as transfer
agent and dividend-paying agent.

IFTC receives an annual fee as custodian for each Fund, payable monthly, at a
rate of $.10 per $1,000 of average monthly net assets of the Fund plus certain
transaction charges and out-of-pocket expense reimbursement. IFTC receives as
transfer agent, and pays to ZKSC, annual account fees of $6 per account (a
maximum of $8 for KNTIS, KSTIS and KCRF accounts) plus account set up,
maintenance, transaction and out-of-pocket expense reimbursement. IFTC's fee is
reduced by certain earnings credits in favor of the Funds.

For the most recently completed fiscal year the Funds incurred custodian and
transfer agent fees to IFTC and IFTC remitted shareholder service fees to ZKSC
as set forth in Exhibit J. It is anticipated that ZKSC will continue to provide
transfer agent services after consummation of the Transaction.

ADMINISTRATIVE SERVICES. Zurich Kemper Distributors, Inc. ("ZKDI") provides
information and administrative services for shareholders of the

36
<PAGE> 44

Funds pursuant to administrative services agreements ("administrative
agreements"). ZKDI may enter into related arrangements with various
broker-dealer firms and other service or administrative firms ("firms"), that
provide services and facilities for their customers or clients who are investors
of the Funds. Such administrative services and assistance may include, but are
not limited to, establishing and maintaining shareholder accounts and records,
processing purchase and redemption transactions, answering routine inquiries
regarding the Funds and their special features, and such other services as may
be agreed upon from time to time and permitted by applicable statute, rule or
regulation. ZKDI bears all its expenses of providing services pursuant to the
administrative agreement, including the payment of any service fees. For
services under the administrative agreements, each Fund pays ZKDI a fee, payable
monthly, at the annual rate of up to .25 of 1% of average daily net assets of
the Fund. ZKDI then pays each firm a service fee at an annual rate of up to .25
of 1% of net assets of those accounts in each Fund that it maintains and
services, in accordance with the schedule set forth in Exhibit J. The fees are
calculated monthly and payable quarterly until terminated by ZKDI or the Fund.
Firms to which service fees may be paid include broker-dealers affiliated with
ZKDI.

ZKDI also may provide some of the above services and may retain any portion of
the fee under the administrative agreements not paid to firms to compensate
itself for administrative functions performed for the Funds. Currently, however,
the administrative services fee payable to ZKDI is based only upon Fund assets
in accounts for which there is a firm listed on a Fund's records and it is
intended that ZKDI will pay all the administrative services fee that it receives
from each Fund to firms in the form of service fees. The effective
administrative services fee rate to be charged against all assets of the Funds
while this procedure is in effect will depend upon the proportion of Fund assets
in accounts for which there is a firm of record, as well as (for KARGF, KDIF,
KGIF, KGSF, KHYS, KICPF, KNTIS and KSTIS) the date when shares representing such
assets were purchased. The Board of a Fund may, in the future, approve basing
the fee to ZKDI on all Fund assets or increasing the fee to .25 of 1% of average
daily net assets without regard to the date of purchase.

Set forth in Exhibit J are the administrative services fees paid by each Fund to
ZKDI during the most recent fiscal year and the effective rate at which each
Fund paid administrative services fees. It is anticipated that ZKDI will
continue to provide administrative services after consummation of the
Transaction.

PRINCIPAL UNDERWRITER. Pursuant to an underwriting and distribution services
agreement ("distribution agreement") with each Fund, ZKDI is the principal
underwriter and distributor of each Fund's shares and acts as agent of each Fund
in the sale of its shares. ZKDI bears all its expenses of

37
<PAGE> 45

providing services pursuant to the distribution agreement, including the payment
of any commissions. ZKDI provides for the preparation of sales literature and
bears the cost of printing and mailing prospectuses to persons other than
shareholders. ZKDI bears the cost of qualifying and maintaining the
qualification of the Fund shares for sale under the securities laws of the
various states and each Fund bears the expense of registering its shares with
the Securities and Exchange Commission. ZKDI may enter into related selling
group agreements with various broker-dealers, including affiliates of ZKDI, that
provide distribution services to investors. ZKDI also may provide some of the
distribution services.

CLASS A SHARES. ZKDI receives no compensation from the Funds as principal
underwriter for Class A Shares and pays all expenses of distribution of each
Fund's Class A shares not otherwise paid by dealers or other financial services
firms. ZKDI retains the sales charge upon the purchase of shares and pays or
allows concessions or discounts to firms for the sale of each Fund's shares.

Set forth in Exhibit J as to each Fund during its most recent fiscal year are
the commissions retained by ZKDI and allowed by ZKDI as commissions to financial
services firms affiliated with ZKDI.

CLASS B AND C SHARES. See Item 6.--New Rule 12b-1 Distribution Plan.

CLASS I SHARES. Each Fund's Class I Shares are sold at net asset value without a
front-end sales load and are not subject to a CDSC, distribution fee or service
fee. Class I Shares are offered only for purchase by affiliated employee benefit
plans and certain institutional investors.

PORTFOLIO TRANSACTIONS. ZKI and its affiliates furnish investment management
services for the Kemper Funds and other clients including affiliated insurance
companies. Zurich Investment Management Limited ("ZIML") is the sub-adviser for
KTEC, KTRF, KGF, KSCF, KICPF, KDIF, KHYF, KIF, KBCF, KGIF, KVGF, KQEF, KAGF and
KAGGF. ZKI and its affiliates share some common research and trading facilities.
ZIML is the sub-adviser for other Kemper Funds as well. Zurich Kemper Value
Advisors, Inc. ("ZKVA") is the sub-adviser for KVGF. ZKVA is the investment
manager and sub-adviser for other Kemper Funds as well. (Each of ZKI, ZIML and
ZKVA are referred to as an "Adviser.") At times investment decisions may be made
to purchase or sell the same investment securities for a Fund and for one or
more of the other clients managed by an Adviser or its affiliates. When two or
more of such clients are simultaneously engaged in the purchase or sale of the
same security, through the same trading facility, the transactions are allocated
as to amount and price in a manner considered equitable to each.

The Advisers, in effecting purchases and sales of portfolio securities for the
account of a Fund, will implement the Fund's policy of seeking best

38
<PAGE> 46

execution of orders. The Advisers may be permitted to pay higher brokerage
commissions for research services as described below. Consistent with this
policy, orders for portfolio transactions are placed with broker-dealer firms
giving consideration to the quality, quantity and nature of each firm's
professional services, which include execution, financial responsibility,
responsiveness, clearance procedures, wire service quotations and statistical
and other research information provided to a Fund and the Advisers and their
affiliates. Subject to seeking best execution of an order, brokerage is
allocated on the basis of all services provided. Any research benefits derived
are available for all clients of the Advisers and their affiliates. In selecting
among firms believed to meet the criteria for handling a particular transaction,
the Advisers may give consideration to those firms that have sold or are selling
shares of the Funds and of other funds managed by the Advisers and their
affiliates, as well as to those firms that provide market, statistical and other
research information to a Fund and the Advisers and their affiliates, although
the Advisers are not authorized to pay higher commissions to firms that provide
such services, except as described below.

The Advisers may in certain instances be permitted to pay higher brokerage
commissions solely for receipt of market, statistical and other research
services as defined in Section 28(e) of the Securities Exchange Act of 1934 and
interpretations thereunder. Such services may include, among other things:
economic, industry or company research reports or investment recommendations;
computerized databases; quotation and execution equipment and software; and
research or analytical computer software and services. Where products or
services have a "mixed use," a good faith effort is made to make a reasonable
allocation of the cost of the products or services in accordance with the
anticipated research and non-research uses, and the cost attributable to
non-research use is paid by the Adviser or one of its affiliates in cash.
Subject to Section 28(e) and procedures adopted by the Board of Trustees of each
Fund, a Fund (except for each of the series of KP) could pay a firm that
provides research services commissions for effecting a securities transaction
for the Fund in excess of the amount other firms would have charged for the
Transaction if an Adviser determines in good faith that the greater commission
is reasonable in relation to the value of the brokerage and research services
provided by the executing firm viewed in terms either of a particular
transaction or the Adviser's overall responsibilities to the Fund and other
clients. Not all such research services may be useful or of value in advising a
particular Fund. Research benefits will be available for all clients of the
Advisers and their affiliates. The investment management fee paid by a Fund to
an Adviser is not reduced because these research services are received.

39
<PAGE> 47

SKI. It is expected that SKI (including ZKI under SKI's ownership) will
implement portfolio transaction policies that are substantially similar to those
currently used by the Advisers, except that SKI does not intend to pay higher
brokerage commissions solely for receipt of market, statistical and other
research services as defined in Section 28(e) of the Securities Exchange Act of
1934 and interpretations thereunder, and, with respect to the practice of
selecting firms to handle a particular transaction based upon the sales of
Kemper Mutual Fund shares, SKI intends to only consider sales of shares of the
Fund in question. In addition, to the maximum extent feasible, it is expected
that SKI will place orders for portfolio transactions through Scudder Investor
Services, Inc., Two International Place, Boston, Massachusetts 02110 ("SIS") (a
corporation registered as a broker/dealer and a subsidiary of Scudder), which
will in turn place orders on behalf of the Funds with issuers, underwriters or
other brokers and dealers. SIS will not receive any commission, fee or other
remuneration from a Fund for this service.

Set forth in Exhibit J are the total brokerage commissions paid by each Fund for
its most recently completed fiscal year, as well as the percentage of such
amounts that was allocated to broker-dealer firms on the basis of research
information or on the basis of sales of Kemper Mutual Fund shares.

SCUDDER. Scudder, Stevens & Clark, Inc. ("Scudder"), 345 Park Avenue, New York,
New York 10154, is one of America's oldest and largest investment management
firms. It manages approximately $125 billion in assets globally, about $50
billion of which are invested in equities and the balance in fixed income and
money market investments. Scudder manages approximately $45 billion in a variety
of open-end and closed-end funds for nearly two million shareholder accounts.
The firm also provides investment services for private and institutional
clients, such as trusts, endowments, and corporate employee benefit plans.
Scudder manages more than $22 billion internationally in both developed and
emerging markets. The firm is one of the world's largest managers of pension
fund assets invested overseas.

Scudder manages two families of pure no-load mutual funds. The Scudder Family of
Funds (approximately $23 billion) comprises 46 money market, bond and equity
mutual funds. The AARP Investment Program from Scudder, a family of 15 funds
(approximately $14 billion), is designed to address the needs of the more than
33 million members of the American Association of Retired Persons. The balance
of the funds under management (approximately $7 billion) comprises closed-end,
offshore, variable life insurance and other kinds of funds.

The investment companies to which Scudder renders investment management
services, and the related fees, are identified in Exhibit I.

40
<PAGE> 48

The names, addresses and principal occupations of the principal executive
officer and the directors of Scudder are as follows:

<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
---------------- --------------------
<S> <C>

Daniel Pierce Chairman of the Board and
Two International Place Managing Director, Scudder
Boston, Massachusetts
Edmond D. Villani President, Chief Executive
345 Park Avenue Officer and Managing Director,
New York, New York Scudder
Stephen R. Beckwith Managing Director, Scudder
345 Park Avenue
New York, New York
Lynn S. Birdsong Managing Director, Scudder
345 Park Avenue
New York, New York
Nicholas Bratt Managing Director, Scudder
345 Park Avenue
New York, New York
E. Michael Brown Managing Director, Scudder
Two International Place
Boston, Massachusetts
Mark S. Casady Managing Director, Scudder
Two International Place
Boston, Massachusetts
Linda C. Coughlin Managing Director, Scudder
Two International Place
Boston, Massachusetts
Margaret D. Hadzima Managing Director, Scudder
345 Park Avenue
New York, New York
Jerard K. Hartman Managing Director, Scudder
345 Park Avenue
New York, New York
Richard A. Holt Managing Director, Scudder
Two Prudential Plaza
180 North Stetson, Suite 5400
Chicago, Illinois
John T. Packard Managing Director, Scudder
101 California Street
San Francisco, California
</TABLE>

41
<PAGE> 49
<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
---------------- --------------------
<S> <C>
Kathryn L. Quirk Managing Director, Scudder
345 Park Avenue
New York, New York
Cornelia M. Small Managing Director, Scudder
345 Park Avenue
New York, New York
Stephen A. Wohler Managing Director, Scudder
Two International Place
Boston, Massachusetts
</TABLE>

After consummation of the Transaction, it is anticipated that the principal
executive officer and directors of SKI will be as follows:

<TABLE>
<CAPTION>
NAME AND ADDRESS PRINCIPAL OCCUPATION
---------------- --------------------
<S> <C>
Lynn Birdsong, Director Senior Executive Officer--
345 Park Avenue International Operations, SKI
New York, New York
Lawrence Cheng, Director Member of Corporate Executive
Mythenquai 2 Board and Chief Investment
Zurich, Switzerland Officer for Investments and
International Asset Management,
Zurich
Steven Gluckstern, Director Member of Corporate Executive
Mythenquai 2 Board and responsible for
Zurich, Switzerland Reinsurance, Structured Finance,
Capital Market Products and
Strategic Investments, Zurich
Rolf Hueppi, Director Chairman and Chief Executive
Mythenquai 2 Officer, Zurich; Chairman of
Zurich, Switzerland Board of Directors, SKI
Markus Rohrbasser, Director Chief Financial Officer and
Mythenquai 2 Member of Corporate Executive
Zurich, Switzerland Board, Zurich
Cornelia Small, Director Senior Executive Officer--
345 Park Avenue Investment Management, SKI
New York, New York
Edmond Villani, Director Chief Executive Officer, SKI
345 Park Avenue
New York, New York
</TABLE>

42
<PAGE> 50

MISCELLANEOUS

GENERAL

The cost of preparing, printing and mailing the enclosed proxy, accompanying
notice and proxy statement and all other costs in connection with solicitation
of proxies will be paid by ZKI, including any additional solicitation made by
letter, telephone or telegraph. In addition to solicitation by mail, certain
officers and representatives of the Funds, officers and employees of ZKI 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. In addition, ZKI has retained First Data Corp. to
solicit proxies on behalf of each Fund's Board and the boards of the other
Kemper Funds, the fee for which will be borne by ZKI. A COPY OF YOUR FUND'S
ANNUAL REPORT AND ANY MORE RECENT SEMI-ANNUAL REPORT ARE AVAILABLE WITHOUT
CHARGE UPON REQUEST BY WRITING TO THE FUND, 222 SOUTH RIVERSIDE PLAZA, CHICAGO,
ILLINOIS 60606 OR BY CALLING 1-800-621-1048.

PROPOSALS OF SHAREHOLDERS

As Massachusetts business trusts, the Funds are not required to hold annual
shareholder meetings, but each will hold special meetings as required or deemed
desirable. Since the Funds do not hold regular meetings of shareholders, the
anticipated date of the next special shareholders meeting cannot be provided.
Any shareholder proposal that may properly be included in the proxy solicitation
material for a special shareholder meeting must be received by the applicable
Fund no later than four months prior to the date when proxy statements are
mailed to shareholders.

OTHER MATTERS TO COME BEFORE THE MEETING

The Boards of Trustees of the Funds are not 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 Fund.

VOTING, QUORUM

Each share of a Fund is entitled to one vote on each matter submitted to a vote
of the holders of that class of shares of such Fund at the Meeting; no shares
have cumulative voting rights.

43
<PAGE> 51

Each valid proxy will be voted in accordance with the instructions on the proxy
and as the persons named in the proxy determine on such other business as may
come before the Meeting. If no instructions are given, the proxy will be voted
FOR the election of the persons who have been nominated as trustees for such
Fund and FOR Items 2, 3, 4 (if applicable), 5 (if applicable), 6 (if Class B and
Class C shares) and 7. Shareholders who execute proxies may revoke them at any
time before they are voted, either by writing to the Fund or in person at the
time of the Meeting. Proxies given by telephone or electronically transmitted
instruments may be counted if obtained pursuant to procedures designed to verify
that such instructions have been authorized.

Item 1 (election of trustees) requires a plurality vote of the shares of each
Fund. This means that the nine nominees receiving the largest number of votes
will be elected. Item 2 (ratification of selection of independent auditors)
requires the affirmative vote of a majority of the shares voting on the matter.
Item 3 (approval of new investment management agreement), Item 4 (approval of
new sub-advisory agreement with ZIML), Item 5 (approval of new sub-advisory
agreement with ZKVA) and Item 6 (approval of new Rule 12b-1 Plan) require the
affirmative vote of a "majority of the outstanding voting securities" of the
applicable Fund. The term "majority of the outstanding voting securities" as
defined in the 1940 Act 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 shares of the Fund are present in person or by proxy, or (2) more
than 50% of the outstanding shares of the Fund. Item 7 (approval of change in
fundamental investment policies to permit Master Fund/Feeder Fund structure)
requires the affirmative vote of the shareholders of the affected series
entitled to vote more than 50% of the votes entitled to be cast on the matter.

On Items 1 and 2, each Fund will vote in the aggregate and not by series or
class. On Item 3, 4, 5 and 7, each Fund will vote in the aggregate except, in
the case of KHYS, KNTIS, KSTIS and KP, as applicable, each series will vote
separately. On Item 6, the Class B Shares and the Class C Shares of each Fund
(or in the case of KHYS, KNTIS, KSTIS and KP, of each series) will vote
separately by class.

The Declaration of Trust of each Fund provides that the presence at a
shareholder meeting in person or by proxy of at least 30% of the shares of a
Fund constitutes a quorum for that Fund. Thus, the meeting for a particular Fund
could not take place on its scheduled date if less than 30% of the shares of
that Fund were represented. If, by the time scheduled for the meeting, a quorum
of shareholders of a Fund is not present or if a quorum is present but
sufficient votes in favor of any of the items are not received, the persons
named as proxies may propose one or more adjournments of the meeting for that
Fund to permit further soliciting of

44
<PAGE> 52

proxies from its shareholders. Any such adjournment will require the affirmative
vote of a majority of the shares of the Fund as to which the meeting is being
adjourned present (in person or by proxy) at the session of the meeting to be
adjourned. The persons named as proxies will vote in favor of any such
adjournment if they determine that such adjournment and additional solicitation
are reasonable and in the interest of the respective Fund's shareholders.

In tallying shareholder votes, abstentions and "broker non-votes" (i.e., shares
held by brokers or nominees as to which (i) instructions have not been received
from the beneficial owners or persons entitled to vote and (ii) the broker or
nominee does not have discretionary voting power on a particular matter) will be
counted for purposes of determining whether a quorum is present for purposes of
convening the Meeting. On Item 1, abstentions and broker non-votes will have no
effect; the nine nominees receiving the largest number of votes will be elected.
On Item 2, abstentions and broker non-votes will not be counted as "votes cast"
and will have no effect on the result of the vote. On Items 3, 4, 5, 6 and 7
abstentions and broker non-votes will be considered to be both present at the
Meeting and issued and outstanding and, as a result, will have the effect of
being counted as voted against the Items.

The Board of Trustees of each Fund recommends an affirmative vote on all items.

PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES.

By order of the Boards of Trustees,
Philip J. Collora
Secretary

45
<PAGE> 53

EXHIBIT A

SHARES ISSUED AND OUTSTANDING ON SEPTEMBER 17, 1997

<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS C CLASS I
---- ------- ------- ------- -------
<S> <C> <C> <C> <C>
KTEC.............................
KTRF.............................
KGF..............................
KSCF.............................
KICPF............................
KNTIS............................
KMBF...........................
KIMBF..........................
KDIF.............................
KHYS.............................
KHYF...........................
KGSF.............................
KIF..............................
KSTIS............................
KCATF..........................
KNYTF..........................
KFLTF..........................
KTXTF..........................
KOHTF..........................
KMITF..........................
KNJTF..........................
KPATF..........................
KP...............................
KCRF...........................
KUSMF..........................
KSIGF..........................
KARGF............................
KBCF.............................
KGIF.............................
KVGF.............................
KQEF.............................
KAGF.............................
KAGGF............................
</TABLE>

A-1
<PAGE> 54

EXHIBIT B

SHAREHOLDINGS

Set forth below is the number of shares of each Fund owned beneficially by each
trustee and nominee as of , 1997. Also shown is the number of
shares owned beneficially by the trustees, nominees and officers as a group. In
each case, the amounts shown are less than 1% of the outstanding shares of each
class of each Fund or any series of KHYS, KNTIS, KSTIS or KP. All shares shown
are Class A shares unless otherwise noted:

<TABLE>
<CAPTION>
TRUSTEES AND
OFFICERS AS A
FUND BELIN BURNHAM DUNAWAY HOFFMAN JONES PETERSON PIERCE SOMMERS VILLANI GROUP
---- ----- ------- ------- ------- ----- -------- ------ ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
KTEC.................
KTRF.................
KGF..................
KSCF.................
KICPF................
KNTIS................
KMBF................
KIMBF...............
KDIF.................
KHYS.................
KHYF................
KGSF.................
KIF..................
KSTIS................
KCATF...............
KNYTF...............
KFLTF...............
KTXTF...............
KOHTF...............
KMITF...............
KNJTF...............
KPATF...............
KP...................
KCRF................
KUSMF...............
KSIGF...............
KARGF................
KBCF.................
KGIF.................
KVGF.................
KQEF.................
KAGF.................
KAGGF................
</TABLE>

- ---------------
* Includes Class B Shares
** Class B Shares Only

B-1
<PAGE> 55

HOLDERS OF MORE THAN 5% OF
ANY CLASS OF A FUND'S SHARES

As of , 1997, no person is known to the Funds to own beneficially
more than five percent of the Shares of any class of any Fund except as shown
below.

<TABLE>
<CAPTION>
NUMBER
FUND NAME AND ADDRESS OF SHARES % OF CLASS
---- ---------------- --------- ----------
<S> <C> <C> <C>
</TABLE>

B-2
<PAGE> 56

EXHIBIT C

FORM OF
INVESTMENT MANAGEMENT AGREEMENT

[NAME OF TRUST]
222 SOUTH RIVERSIDE PLAZA
CHICAGO, ILLINOIS 60606

, 199

Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154

INVESTMENT MANAGEMENT AGREEMENT
[NAME OF SERIES]

Ladies and Gentlemen:

[Name of Trust] (the "Trust") has been established as a Massachusetts business
Trust to engage in the business of an investment company. Pursuant to the
Trust's Declaration of Trust, as amended from time-to-time (the "Declaration"),
the Board of Trustees is authorized to issue the Trust's shares of beneficial
interest, par value $ per share, (the "Shares") in separate series, or funds.
The Board of Trustees has authorized [name of series] (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

C-1
<PAGE> 57

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 , 19 , 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 , 19 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. 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 2, you shall
be entitled to receive and act upon advice of counsel to the Trust. You shall
also make available to the Trust promptly upon request all of the 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

C-2
<PAGE> 58

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.

3. ADMINISTRATIVE SERVICES. In addition to the portfolio management services
specified above in section 2, you shall furnish at your expense for the use of
the 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 Securities and Exchange
Commission (the "SEC") and other regulatory and self-regulatory organizations,
including, but not limited to, preliminary and definitive proxy materials,
post-effective amendments to the Registration Statement, semi-annual reports on
Form N-SAR and notices pursuant to Rule 24f-2 under the 1940 Act; overseeing the
tabulation of proxies by the 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

C-3
<PAGE> 59

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.

4. ALLOCATION OF CHARGES AND EXPENSES. Except as otherwise specifically provided
in this section 4, you shall pay the compensation and expenses of all Trustees,
officers and executive employees of the Trust (including 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 2
hereof and the administrative services described in section 3 hereof.

You shall not be required to pay any expenses of the Fund other than those
specifically allocated to you in this section 4. In particular, but without
limiting the generality of the foregoing, you shall not be responsible, except
to the extent of the reasonable compensation of such of the 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 for which the
Trust is responsible pursuant to the terms of the Fund Accounting Services
Agreement, custodians, subcustodians, transfer agents, dividend

C-4
<PAGE> 60

disbursing agents and registrars; payment for portfolio pricing or valuation
services to pricing agents, accountants, bankers and other specialists, if any;
expenses of preparing share certificates and, except as provided below in this
section 4, other expenses in connection with the issuance, offering,
distribution, sale, redemption or repurchase of securities issued by 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; and costs of shareholders' and other meetings.

You shall not be required to pay expenses of any activity which is primarily
intended to result in sales of Shares of 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.

5. MANAGEMENT FEE. For all services to be rendered, payments to be made and
costs to be assumed by you as provided in sections 2, 3, and 4 hereof, the Trust
on behalf of the 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 (a) 1/12 of
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 $ , the fee payable for that month based on the
portion of the average of such values in excess of $ shall be 1/12 of
of 1 percent of such portion;] [and provided that, for any calendar month during
which the average of such values exceeds $ , the fee payable for that
month based on the portion of the average of such values in excess of $
shall be 1/12 of of 1 percent of such portion;] [See page of proxy
statement for each Fund's management fee and page C-11 for a description

C-5
<PAGE> 61

of the computation of the fee for KSCF and KAGGF] over [(b) the greater of (i)
the amount by which the Fund's expenses exceed % of average daily net assets
or (ii)] 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 5, 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 5.

[You agree that your gross compensation for any fiscal year shall not be greater
than an amount which, when added to other expenses of the Fund, shall cause the
aggregate expenses of the Fund to equal % of average daily net assets. [KMBF
and KGSF: 1% of average daily net assets; KCATF: 1.5% of average daily net
assets up to $30 million and 1% of average daily net assets over $30 million.]
Except to the extent that such amount has been reflected in reduced payments to
you, you shall refund to the Fund the amount of any payment received in excess
of the limitation pursuant to this section 5 as promptly as practicable after
the end of such fiscal year, provided that you shall not be required to pay the
Fund an amount greater than the fee paid to you in respect of such year pursuant
to this Agreement. As used in this section 5, "expenses" shall mean those
expenses included in the applicable expense limitation having the broadest
specifications thereof, and "expense limitation" means a limit on the maximum
annual expenses which may be incurred by an investment company determined (i) by
multiplying a fixed percentage by the average, or by multiplying more than one
such percentage by different specified amounts of the average, of the values of
an investment company's

C-6
<PAGE> 62

net assets for a fiscal year or (ii) by multiplying a fixed percentage by an
investment company's net investment income for a fiscal year.]

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.

6. AVOIDANCE OF INCONSISTENT POSITION; SERVICES NOT EXCLUSIVE. In connection
with purchases or sales of portfolio securities and other investments for the
account of the 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.

7. LIMITATION OF LIABILITY OF MANAGER. As an inducement to your undertaking to
render services pursuant to this Agreement, the Trust agrees that you shall not
be liable under this Agreement for any error of judgment or mistake of law or
for any loss suffered by 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.

8. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall remain in
force until , 19 , and continue in force from year to year
thereafter, but only so long as such continuance is specifically

C-7
<PAGE> 63

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.

This Agreement may be terminated with respect to the Fund at any time without
the payment of any penalty by the Board of Trustees or by vote of a majority of
the outstanding voting securities of the Fund in the event that it shall have
been established by a court of competent jurisdiction that you or any of your
officers or directors has taken any action which results in a breach of your
covenants set forth herein.

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

10. LIMITATION OF LIABILITY FOR CLAIMS. The Declaration, a copy of which,
together with all amendments thereto, is on file in the Office of the Secretary
of the Commonwealth of Massachusetts, provides that the name "[Name of 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

C-8
<PAGE> 64

agent of the Trust. You understand that the rights and obligations of each Fund,
or series, under the Declaration are separate and distinct from those of any and
all other series.

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

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

This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, provided that nothing herein shall be construed
in a manner inconsistent with the 1940 Act, or in a manner which would cause 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

C-9
<PAGE> 65

such counterpart to the Trust, whereupon this letter shall become a binding
contract effective as of the date of this Agreement.

Yours very truly,

[Name of Trust], on behalf of
Kemper Fund

By:_______________________________
President

The foregoing Agreement is hereby accepted as of the date hereof.

SCUDDER KEMPER INVESTMENTS, INC.

By:_______________________________
President

C-10
<PAGE> 66

DESCRIPTION OF MANAGEMENT FEE SCHEDULE FOR
KEMPER SMALL CAPITALIZATION EQUITY FUND
AND KEMPER AGGRESSIVE GROWTH FUND

As compensation for the services and facilities furnished, KSCF and KAGGF pay a
base annual investment management fee, payable monthly, at the rate of .65 of 1%
of the average daily net assets of the Fund. This base fee is subject to upward
or downward adjustment on the basis of the investment performance of the Fund's
Class A shares as compared with the performance of the Standard & Poor's 500
Stock Index (the "Index").

The Fund will pay an additional monthly fee at the rate of 1/12 of .05% of such
average daily net assets for the preceding twelve months for each percentage
point (fractions to be prorated) by which the Fund's Class A shares performance
exceeds that of the Index for the immediately preceding twelve months; provided
that such additional monthly fee shall not exceed 1/12 of .30% of the average
daily net assets. Conversely, the compensation payable by the Fund will be
reduced by the rate of 1/12 of .05% of such average daily net assets for each
percentage point (fractions to be prorated) by which the Fund's Class A shares
performance falls below that of the Index, provided that such reduction in the
monthly fee shall not exceed 1/12 of .30% of the average net assets. The total
fee on an annual basis can range from .35% to .95% of average daily net assets.

The Fund's Class A shares investment performance during any twelve month period
is measured by the percentage difference between (i) the opening net asset value
of one Class A share of the Fund and (ii) the sum of the closing net asset value
of one Class A share of the Fund plus the value of any income and capital gain
dividends on such Class A share during the period treated as if reinvested in
Class A shares of the Fund at the time of distribution. The performance of the
Index is measured by the percentage change in the Index between the beginning
and the end of the twelve month period with cash distributions on the securities
which comprise the Index being treated as reinvested in the Index at the end of
each month following the payment of the dividend.

Each monthly calculation of the incentive portion of the fee may be illustrated
as follows: if over the preceding twelve month period the adjusted net asset
value applicable to one Class A share went from $10.00 to $11.00 (10%
appreciation) and the Index, after adjustment, went from 100 to 104 (or only
4%), the entire incentive compensation would have been earned by ZKI. On the
other hand, if the Index rose from 100 to 110 (10%), no incentive fee would have
been payable. A rise in the Index from 100 to 116 (16%) would have resulted in
the minimum monthly fee of 1/12 of .35%.

C-11
<PAGE> 67

Since the computation is not cumulative from year to year, an additional
management fee may be payable with respect to a particular year, although the
Fund's Class A shares' performance over some longer period of time may be less
favorable than that of the Index. Conversely, a lower management fee may be
payable in a year in which the Fund's Class A shares' performance is less
favorable than that of the Index, although the Fund's Class A shares'
performance over a longer period of time might be better than that of the Index.

C-12
<PAGE> 68

EXHIBIT D

FORM OF SUB-ADVISORY AGREEMENT
WITH ZURICH INVESTMENT MANAGEMENT LIMITED

AGREEMENT made this day of , 199 , by and between SCUDDER
KEMPER INVESTMENTS, INC., a Delaware corporation (the "Adviser") and ZURICH
INVESTMENT MANAGEMENT LIMITED, an English corporation (the "Sub-Adviser").

WHEREAS, [Name of Fund], a Massachusetts business trust (the "Fund") is a
management investment company registered under the Investment Company Act of
1940;

WHEREAS, the Fund has retained the Adviser to render to it investment advisory
and management services with regard to the Fund's sole series (the "initial
series") pursuant to an Investment Management Agreement (the "Management
Agreement"); and

WHEREAS, the Adviser desires at this time to retain the Sub-Adviser to render
investment advisory and management services with respect to that portion of the
portfolio of the Fund's initial series allocated to the Sub-Adviser by the
Adviser for management, including services related to foreign securities,
foreign currency transactions and related investments, and the Sub-Adviser is
willing to render such services;

NOW THEREFORE, in consideration of the mutual covenants hereinafter contained,
it is hereby agreed by and between the parties hereto as follows:

1. The Adviser hereby employs the Sub-Adviser to manage the investment and
reinvestment of the assets of the initial series of the Fund allocated by the
Adviser in its sole discretion to the Sub-Adviser for management, including
services related to foreign securities, foreign currency transactions and
related investments, in accordance with the applicable investment objectives,
policies and limitations and subject to the supervision of the Adviser and the
Board of Trustees of the Fund for the period and upon the terms herein set
forth, and to place orders for the purchase or sale of portfolio securities for
the Fund's account with brokers or dealers selected by the Sub-Adviser; and, in
connection therewith, the Sub-Adviser is authorized as the agent of the Fund to
give instructions to the Custodian of the Fund as to the deliveries of
securities and payments of cash for the account of the Fund. In connection with
the selection of such brokers or dealers and the placing of such orders, the
Sub-Adviser is directed to seek for the Fund best execution of orders. Subject
to such policies as the Board of Trustees of the Fund determines and subject to
satisfying the requirements of Section 28(e) of the Securities Exchange Act of
1934, the Sub-Adviser shall not be deemed to

D-1
<PAGE> 69

have acted unlawfully or to have breached any duty, created by this Agreement or
otherwise, solely by reason of its having caused the Fund to pay a broker or
dealer an amount of commission for effecting a securities transaction in excess
of the amount of commission another broker or dealer would have charged for
effecting that transaction, if the Sub-Adviser determined in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer viewed in
terms of either that particular transaction or the Sub-Adviser's overall
responsibilities with respect to the clients of the Sub-Adviser as to which the
Sub-Adviser exercises investment discretion. The Adviser recognizes that all
research services and research that the Sub-Adviser receives are available for
all clients of the Sub-Adviser, and that the Fund and other clients of the
Sub-Adviser may benefit thereby. The investment of funds shall be subject to all
applicable restrictions of the Agreement and Declaration of Trust and By-Laws of
the Fund as may from time to time be in force.

The Sub-Adviser accepts such employment and agrees during such period to render
such investment management services, to furnish related office facilities and
equipment and clerical, bookkeeping and administrative services for the Fund, to
permit any of its officers or employees to serve without compensation as
trustees or officers of the Fund if elected to such positions and to assume the
obligations herein set forth for the compensation herein provided. The
Sub-Adviser shall for all purposes herein provided be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Fund or the Adviser in any
way or otherwise be deemed an agent of the Fund or the Adviser. It is understood
and agreed that the Sub-Adviser, by separate agreements with the Fund, may also
serve the Fund in other capacities.

The Sub-Adviser will keep the Fund and the Adviser informed of developments
materially affecting the Fund and shall, on the Sub-Adviser's own initiative and
as reasonably requested by the Adviser or the Fund, furnish to the Fund and the
Adviser from time to time whatever information the Adviser reasonably believes
appropriate for this purpose.

The Sub-Adviser agrees that, in the performance of the duties required of it by
this Agreement, it will comply with the Investment Advisers Act of 1940 and the
Investment Company Act of 1940, and all rules and regulations thereunder, and
all applicable laws and regulations and with any applicable procedures adopted
by the Fund's Board of Trustees and identified in writing to the Sub-Adviser.

The Sub-Adviser shall provide the Adviser with such investment portfolio
accounting and shall maintain and provide such detailed records and reports as
the Adviser may from time to time reasonably request, including without
limitation, daily processing of investment transactions and

D-2
<PAGE> 70

cash positions, periodic valuations of investment portfolio positions as
required by the Adviser, monthly reports of the investment portfolio and all
investment transactions and the preparation of such reports and compilation of
such data as may be required by the Adviser to comply with the obligations
imposed upon it under Management Agreement.

The Sub-Adviser shall provide adequate security with respect to all materials,
records, documents and data relating to any of its responsibilities pursuant to
this Agreement including any means for the effecting of securities transactions.

The Sub-Adviser agrees that it will make available to the Adviser and the Fund
promptly upon their request copies of all of its investment records and ledgers
with respect to the Fund to assist the Adviser and the Fund in monitoring
compliance with the Investment Company Act of 1940 and the Investment Advisers
Act of 1940, as well as other applicable laws. The Sub-Adviser will furnish the
Fund's Board of Trustees such periodic and special reports with respect to the
Fund's portfolio as the Adviser or the Board of Trustees may reasonably request.

In compliance with the requirements of Rule 31a-3 under the Investment Company
Act of 1940, the Sub-Adviser hereby agrees that any records that it maintains
for the Fund are the property of the Fund and further agrees to surrender
promptly to the Fund copies of any such records upon the Fund's request. The
Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the Investment Company Act of 1940 any records with respect to the
Sub-Adviser's duties hereunder required to be maintained by Rule 31a-1 under
such Act to the extent that the Sub-Adviser prepares and maintains such records
pursuant to this Agreement and to preserve the records required by Rule 204-2
under the Investment Advisers Act of 1940 for the period specified in that Rule.

The Sub-Adviser agrees that it will immediately notify the Adviser and the Fund
in the event that the Sub-Adviser: (i) becomes subject to a statutory
disqualification that prevents the Sub-Adviser from serving as an investment
adviser pursuant to this Agreement; or (ii) is or expects to become the subject
of an administrative proceeding or enforcement action by the United States
Securities and Exchange Commission, the Investment Management Regulatory
Organization ("IMRO") or other regulatory authority.

The Sub-Adviser represents that it is an investment adviser registered under the
Investment Advisers Act of 1940 and other applicable laws and it is regulated by
IMRO and will treat the Fund as a Non-Private Customer as defined by IMRO. The
Sub-Adviser agrees to maintain the completeness and accuracy of its registration
on Form ADV in accordance with all legal requirements relating to that Form. The
Sub-Adviser acknowledges that it is an "investment adviser" to the Fund within
the

D-3
<PAGE> 71

meaning of the Investment Company Act of 1940 and the Investment Advisers Act of
1940.

The Sub-Adviser shall be responsible for maintaining an appropriate compliance
program to ensure that the services provided by it under this Agreement are
performed in a manner consistent with applicable laws and the terms of this
Agreement. Furthermore, the Sub-Adviser shall maintain and enforce a Code of
Ethics that is in form and substance satisfactory to the Adviser. Sub-Adviser
agrees to provide such reports and certifications regarding its compliance
program as the Adviser or the Fund shall reasonably request from time to time.

2. In the event that there are, from time to time, one or more additional series
of the Fund with respect to which the Adviser desires to retain the Sub-Adviser
to render investment advisory and management services hereunder, the Adviser
shall notify the Sub-Adviser in writing. If the Sub-Adviser is willing to render
such services, it shall notify the Adviser in writing whereupon such additional
series shall become subject to this Agreement.

3. For the services and facilities described in Section 1, the Adviser will pay
to the Sub-Adviser, at the end of each calendar month, a sub-advisory fee
computed at an annual rate of [see page 14 of the proxy statement for each
Fund's sub-advisory fee] of that portion of the average daily net assets of the
initial series of the Fund that is allocated by the Adviser to the Sub-Adviser
for management.

For the month and year in which this Agreement becomes effective or terminates,
there shall be an appropriate proration on the basis of the number of days that
the Agreement is in effect during the month and year, respectively.

4. The services of the Sub-Adviser under this Agreement are not to be deemed
exclusive, and the Sub-Adviser shall be free to render similar services or other
services to others so long as its services hereunder are not impaired thereby.

5. The Sub-Adviser shall arrange, if desired by the Fund, for officers or
employees of the Sub-Adviser to serve, without compensation from the Fund, as
trustees, officers or agents of the Fund if duly elected or appointed to such
positions and subject to their individual consent and to any limitations imposed
by law.

6. The net asset value for each series of the Fund subject to this Agreement
shall be calculated as the Board of Trustees of the Fund may determine from time
to time in accordance with the provisions of the Investment Company Act of 1940.
On each day when net asset value is not calculated, the net asset value of a
series shall be deemed to be the net asset value of such series as of the close
of business on the last day on

D-4
<PAGE> 72

which such calculation was made for the purpose of the foregoing computations.

7. Subject to applicable statutes and regulations, it is understood that certain
trustees, officers or agents of the Fund are or may be interested in the
Sub-Adviser as officers, directors, agents, shareholders or otherwise, and that
the officers, directors, shareholders and agents of the Sub-Adviser may be
interested in the Fund otherwise than as a trustee, officer or agent.

8. The Sub-Adviser shall not be liable for any error of judgment or of law or
for any loss suffered by the Fund or the Adviser in connection with the matters
to which this Agreement relates, except loss resulting from willful misfeasance,
bad faith or gross negligence on the part of the Sub-Adviser in the performance
of its obligations and duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.

9. This Agreement shall become effective with respect to the initial series of
the Fund on the date hereof and shall remain in full force until
, 199 , unless sooner terminated as hereinafter provided. This
Agreement shall continue in force from year to year thereafter with respect to
each such series, but only as long as such continuance is specifically approved
for each series at least annually in the manner required by the Investment
Company Act of 1940 and the rules and regulations thereunder; provided, however,
that if the continuation of this Agreement is not approved for a series, the
Sub-Adviser may continue to serve in such capacity for such series in the manner
and to the extent permitted by the Investment Company Act of 1940 and the rules
and regulations thereunder.

This Agreement shall automatically terminate in the event of its assignment or
in the event of the termination of the Management Agreement and may be
terminated at any time with respect to any series subject to this Agreement
without the payment of any penalty by the Adviser or by the Sub-Adviser on sixty
(60) days written notice to the other party. The Fund may effect termination
with respect to any such series without payment of any penalty by action of the
Board of Trustees or by vote of a majority of the outstanding voting securities
of such series on sixty (60) days written notice to the Adviser and the
Sub-Adviser.

This Agreement may be terminated with respect to any series at any time without
the payment of any penalty by the Board of Trustees of the Fund, by vote of a
majority of the outstanding voting securities of such series or by the Adviser
in the event that it shall have been established by a court of competent
jurisdiction that the Sub-Adviser or any officer or director of the Sub-Adviser
has taken any action which results in a breach of the covenants of the
Sub-Adviser set forth herein.

D-5
<PAGE> 73

The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the Investment Company Act of
1940 and the rules and regulations thereunder.

Termination of this Agreement shall not affect the right of the Sub-Adviser to
receive payments on any unpaid balance of the compensation described in Section
3 earned prior to such termination.

10. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder shall not be thereby
affected.

11. Any notice under this Agreement shall be in writing, addressed and delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate for the receipt of such notice.

12. This Agreement shall be construed in accordance with applicable federal law
and the laws of the Commonwealth of Massachusetts.

13. This Agreement is the entire contract between the parties relating to the
subject matter hereof and supersedes all prior agreements between the parties
relating to the subject matter hereof.

IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this Agreement
to be executed as of the day and year first above written.

SCUDDER KEMPER INVESTMENTS, INC.

By: _________________________

Title: ________

ZURICH INVESTMENT MANAGEMENT LIMITED

By: _________________________

Title: ________

D-6
<PAGE> 74

EXHIBIT E

FORM OF SUB-ADVISORY AGREEMENT
WITH ZURICH KEMPER VALUE ADVISORS, INC.

AGREEMENT made this day of , 199 , by and between SCUDDER KEMPER
INVESTMENTS, INC., a Delaware corporation (the "Adviser") and ZURICH KEMPER
VALUE ADVISORS, INC., a Delaware corporation (the "Sub-Adviser").

WHEREAS, KEMPER VALUE PLUS GROWTH FUND, a Massachusetts business trust (the
"Fund") is an open-end management investment company registered under the
Investment Company Act of 1940, the shares of beneficial interest ("Shares") of
the initial series of which are registered under the Securities Act of 1933;

WHEREAS, the Fund has retained the Adviser to render to it investment advisory
and management services pursuant to an Investment Management Agreement, dated
, 199 (the "Management Agreement"); and

WHEREAS, the Adviser desires at this time to retain the Sub-Adviser to render
investment advisory and management services with respect to that portion of the
Fund's portfolio allocated to the Sub-Adviser by the Adviser for management and
the Sub-Adviser is willing to render such services;

NOW THEREFORE, in consideration of the mutual covenants hereinafter contained,
it is hereby agreed by and between the parties hereto as follows:

1. The Adviser hereby employs the Sub-Adviser to manage the investment and
reinvestment of the assets of the Fund allocated by the Adviser in its sole
discretion to the Sub-Adviser for management in accordance with the applicable
investment objectives and policies and limitations and subject to the
supervision of the Adviser and the Board of Trustees of the Fund for the period
and upon the terms herein set forth, and to place orders for the purchase or
sale of portfolio securities for the Fund's account with brokers or dealers
selected by the Sub-Adviser and, in connection therewith, the Sub-Adviser; is
authorized as the agent of the Fund to give instructions to the Custodian of the
Fund as to the deliveries of securities and payments of cash for the account of
the Fund. In connection with the selection of such brokers or dealers and the
placing of such orders, the Sub-Adviser is directed to seek for the Fund best
execution of orders. Subject to such policies as the Board of Trustees of the
Fund determines, the Sub-Adviser shall not be deemed to have acted unlawfully or
to have breached any duty, created by this Agreement or otherwise, solely by
reason of its having caused the Fund to pay a broker

E-1
<PAGE> 75

or dealer an amount of commission for effecting a securities transaction in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction, if the Sub-Adviser determined in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer viewed in
terms of either that particular transaction or the Sub-Adviser's overall
responsibilities with respect to the clients of the Sub-Adviser's overall
responsibilities with respect to the clients of the Sub-Adviser as to which the
Sub-Adviser exercises investment discretion. The Adviser recognizes that all
research services and research that the Sub-Adviser receives or generates are
available for all clients of the Sub-Adviser, and that the Fund and other
clients of the Sub-Adviser may benefit thereby. The investment of funds shall be
subject to all applicable restrictions of the Agreement and Declaration of Trust
and By-Laws of the Fund as may from time to time be in force.

2. In the event that the Fund establishes one or more additional series with
respect to which the Adviser desires to retain the Sub-Adviser to render
investment advisory and management services hereunder, the Adviser shall notify
the Sub-Adviser in writing. If the Sub-Adviser is willing to render such
services, it shall notify the Adviser in writing whereupon such series shall
become subject to this agreement.

3. For the services and facilities described in Section 1, the Adviser will pay
to the Sub-Adviser at the end of each calendar month, a sub-advisory fee
computed at an annual rate of .25 of 1% of the Fund's average daily net assets.

The fee as computed above shall be computed separately for, and charged as an
expense of, each series of the Fund based upon the average daily net assets of
such series. For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration

E-2
<PAGE> 76

on the basis of the number of days that the Agreement is in effect during the
month and year, respectively.

6. The net asset value for each series of the Fund shall be calculated in
accordance with the provisions of the Fund's prospectus or as the trustees may
determine in accordance with the provisions of the Investment Company Act of
1940. On each day when net asset value is not calculated, the net asset value of
a series shall be deemed to be the net asset value of such series as of the
close of business on the last day on which such calculation was made for the
purpose of the foregoing computations.

9. This Agreement shall become effective with respect to the initial series of
the Fund on the date hereof and shall remain in full force until ,
199 , unless sooner terminated as hereinafter provided. This Agreement shall
continue in force from year to year thereafter with respect to each series, but
only as long as such continuance is specifically approved for each series at
least annually in the manner required by the Investment Company Act of 1940 and
the rules and regulations thereunder; provided, however, that if the
continuation of this Agreement is not approved for a series, the Sub-Adviser may
continue to serve in such capacity for such Portfolio in the manner and to the
extent permitted by the Investment Company Act of 1940 and the rules and
regulations thereunder.

E-3
<PAGE> 77

This Agreement shall automatically terminate in the event of its assignment or
in the event of the termination of the Management Agreement and may be
terminated at any time with respect to any series without the payment of any
penalty by the Adviser or by the Sub-Adviser on sixty (60) days written notice
to the other party. The Fund may effect termination with respect to any series
without payment of any penalty by action of the Board of Trustees or by vote of
a majority of the outstanding voting securities of such series on sixty (60)
days written notice to the Adviser and the Sub-Adviser.

The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the Investment Company Act of
1940 and the rules and regulations thereunder.

Termination of this Agreement shall not affect the right of the Sub-Adviser to
receive payments on any unpaid balance of the compensation described in Section
3 earned prior to such termination.

10. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder shall not be thereby
affected.

11. Any notice under this Agreement shall be in writing, addressed and delivered
or mailed, postage prepared, to the other party at such address as such other
party may designate for the receipt of such notice.

12. This Agreement shall be construed in accordance with applicable federal law
and the laws of the Commonwealth of Massachusetts.

13. This Agreement is the entire contract between the parties relating to the
subject matter hereof and supersedes all prior agreements between the parties
relating to the subject matter hereof.

E-4
<PAGE> 78

IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this Agreement
to be executed as of the day and year first above written.

SCUDDER KEMPER
INVESTMENTS, INC.

By:__________________________

Title:_______________________

ATTEST:
_________________________

Title:___________________
ZURICH KEMPER VALUE
ADVISORS, INC.

By:___________________________

Title:________________________

ATTEST:

_________________________

Title:___________________

E-5

<PAGE> 79

EXHIBIT F

FORM OF
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT

AGREEMENT made this day of , 199 , between KEMPER
, a Massachusetts business trust (the "Fund"), and ZURICH
KEMPER DISTRIBUTORS, INC., a Delaware corporation ("ZKDI").

In consideration of the mutual covenants hereinafter contained, it is hereby
agreed by and between the parties hereto as follows:

1. The Fund hereby appoints ZKDI to act as agent for the distribution of shares
of beneficial interest (hereinafter called "shares") of the Fund in
jurisdictions wherein shares of the Fund may legally be offered for sale;
provided, however, that the Fund in its absolute discretion may (a) issue or
sell shares directly to holders of shares of the Fund upon such terms and
conditions and for such consideration, if any, as it may determine, whether in
connection with the distribution of subscription or purchase rights, the payment
or reinvestment of dividends or distributions, or otherwise; or (b) issue or
sell shares at net asset value to the shareholders of any other investment
company, for which ZKDI shall act as exclusive distributor, who wish to exchange
all or a portion of their investment in shares of such other investment company
for shares of the Fund. ZKDI shall appoint various financial service firms
("Firms") to provide distribution services to investors. The Firms shall provide
such office space and equipment, telephone facilities, personnel, literature
distribution, advertising and promotion as is necessary or beneficial for
providing information and distribution services to existing and potential
clients of the Firms. ZKDI may also provide some of the above services for the
Fund.

ZKDI accepts such appointment as distributor and principal underwriter and
agrees to render such services and to assume the obligations herein set forth
for the compensation herein provided. ZKDI shall for all purposes herein
provided be deemed to be an independent contractor and, unless expressly
provided herein or otherwise authorized, shall have no authority to act for or
represent the Fund in any way. ZKDI, by separate agreement with the Fund, may
also serve the Fund in other capacities. The services of ZKDI to the Fund under
this Agreement are not to be deemed exclusive, and ZKDI shall be free to render
similar services or other services to others so long as its services hereunder
are not impaired thereby.

In carrying out its duties and responsibilities hereunder, ZKDI will, pursuant
to separate written contracts, appoint various Firms to provide advertising,
promotion and other distribution services contemplated hereunder directly to or
for the benefit of existing and potential shareholders

F-1
<PAGE> 80

who may be clients of such Firms. Such Firms shall at all times be deemed to be
independent contractors retained by ZKDI and not the Fund.

ZKDI shall use its best efforts with reasonable promptness to sell such part of
the authorized shares of the Fund remaining unissued as from time to time shall
be effectively registered under the Securities Act of 1933 ("Securities Act"),
at prices determined as hereinafter provided and on terms hereinafter set forth,
all subject to applicable federal and state laws and regulations and to the
Agreement and Declaration of Trust of the Fund.

2. ZKDI shall sell shares of the Fund to or through qualified Firms in such
manner, not inconsistent with the provisions hereof and the then effective
registration statement (and related prospectus) of the Fund under the Securities
Act, as ZKDI may determine from time to time, provided that no Firm or other
person shall be appointed or authorized to act as agent of the Fund without the
prior consent of the Fund. In addition to sales made by it as agent of the Fund,
ZKDI may, in its discretion, also sell shares of the Fund as principal to
persons with whom it does not have selling group agreements.

Shares of any class of any series of the Fund offered for sale or sold by ZKDI
shall be so offered or sold at a price per share determined in accordance with
the then current prospectus. The price the Fund shall receive for all shares
purchased from it shall be the net asset value used in determining the public
offering price applicable to the sale of such shares. Any excess of the sales
price over the net asset value of the shares of the Fund sold by ZKDI as agent
shall be retained by ZKDI as a commission for its services hereunder. ZKDI may
compensate Firms for sales of shares at the commission levels provided in the
Fund's prospectus from time to time. ZKDI may pay other commissions, fees or
concessions to Firms, and may pay them to others in its discretion, in such
amounts as ZKDI shall determine from time to time. ZKDI shall be entitled to
receive and retain any applicable contingent deferred sales charge as described
in the Fund's prospectus. ZKDI shall also receive any distribution services fee
payable by the Fund as provided in Section 8 hereof.

ZKDI will require each Firm to conform to the provisions hereof and the
Registration Statement (and related prospectus) at the time in effect under the
Securities Act with respect to the public offering price or net asset value, as
applicable, of the Fund's shares, and neither ZKDI nor any such Firms shall
withhold the placing of purchase orders so as to make a profit thereby.

3. The Fund will use its best efforts to keep effectively registered under the
Securities Act for sale as herein contemplated such shares as ZKDI shall
reasonably request and as the Securities and Exchange Commission shall permit to
be so registered. Notwithstanding any other provision

F-2
<PAGE> 81

hereof, the Fund may terminate, suspend or withdraw the offering of shares
whenever, in its sole discretion, it deems such action to be desirable.

4. The Fund will execute any and all documents and furnish any and all
information that may be reasonably necessary in connection with the
qualification of its shares for sale (including the qualification of the Fund as
a dealer where necessary or advisable) in such states as ZKDI may reasonably
request (it being understood that the Fund shall not be required without its
consent to comply with any requirement which in its opinion is unduly
burdensome). The Fund will furnish to ZKDI from time to time such information
with respect to the Fund and its shares as ZKDI may reasonably request for use
in connection with the sale of shares of the Fund.

5. ZKDI shall issue and deliver or shall arrange for various Firms to issue and
deliver on behalf of the Fund such confirmations of sales made by it pursuant to
this agreement as may be required. At or prior to the time of issuance of
shares, ZKDI will pay or cause to be paid to the Fund the amount due the Fund
for the sale of such shares. Certificates shall be issued or shares registered
on the transfer books of the Fund in such names and denominations as ZKDI may
specify.

6. ZKDI shall order shares of the Fund from the Fund only to the extent that it
shall have received purchase orders therefor. ZKDI will not make, or authorize
Firms or others to make (a) any short sales of shares of the Fund; or (b) any
sales of such shares to any trustee or officer of the Fund or to any officer or
director of ZKDI or of any corporation or association furnishing investment
advisory, managerial or supervisory services to the Fund, or to any corporation
or association, unless such sales are made in accordance with the then current
prospectus relating to the sale of such shares. ZKDI, as agent of and for the
account of the Fund, may repurchase the shares of the Fund at such prices and
upon such terms and conditions as shall be specified in the current prospectus
of the Fund. In selling or reacquiring shares of the Fund for the account of the
Fund, ZKDI will in all respects conform to the requirements of all state and
federal laws and the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., relating to such sale or reacquisition, as the case
may be, and will indemnify and save harmless the Fund from any damage or expense
on account of any wrongful act by ZKDI or any employee, representative or agent
of ZKDI. ZKDI will observe and be bound by all the provisions of the Agreement
and Declaration of Trust of the Fund (and of any fundamental policies adopted by
the Fund pursuant to the Investment Company Act of 1940, notice of which shall
have been given to ZKDI) which at the time in any way require, limit, restrict,
prohibit or otherwise regulate any action on the part of ZKDI hereunder.

F-3
<PAGE> 82

7. The Fund shall assume and pay all charges and expenses of its operations not
specifically assumed or otherwise to be provided by ZKDI under this Agreement.
The Fund will pay or cause to be paid expenses (including the fees and
disbursements of its own counsel) of any registration of the Fund and its shares
under the United States securities laws and expenses incident to the issuance of
shares of beneficial interest, such as the cost of share certificates, issue
taxes, and fees of the transfer agent. ZKDI will pay all expenses (other than
expenses which one or more Firms may bear pursuant to any agreement with ZKDI)
incident to the sale and distribution of the shares issued or sold hereunder,
including, without limiting the generality of the foregoing, all (a) expenses of
printing and distributing any prospectus and of preparing, printing and
distributing or disseminating any other literature, advertising and selling aids
in connection with the offering of the shares for sale (except that such
expenses need not include expenses incurred by the Fund in connection with the
preparation, typesetting, printing and distribution of any registration
statement or prospectus, report or other communication to shareholders in their
capacity as such), (b) expenses of advertising in connection with such offering
and (c) expenses (other than the Fund's auditing expenses) of qualifying or
continuing the qualification of the shares for sale and, in connection
therewith, of qualifying or continuing the qualification of the Fund as a dealer
or broker under the laws of such states as may be designated by ZKDI under the
conditions herein specified. No transfer taxes, if any, which may be payable in
connection with the issue or delivery of shares sold as herein contemplated or
of the certificates for such shares shall be borne by the Fund, and ZKDI will
indemnify and hold harmless the Fund against liability for all such transfer
taxes.

8. For the services and facilities described herein in connection with Class B
shares and Class C shares of each series of the Fund, the Fund will pay to ZKDI
at the end of each calendar month a distribution services fee computed at the
annual rate of .75% of average daily net assets attributable to the Class B
shares and Class C shares of each such series. For the month and year in which
this Agreement becomes effective or terminates, there shall be an appropriate
proration on the basis of the number of days that the Agreement is in effect
during the month and year, respectively. The foregoing fee shall be in addition
to and shall not be reduced or offset by the amount of any contingent deferred
sales charge received by ZKDI under Section 2 hereof.

The net asset value shall be calculated in accordance with the provisions of the
Fund's current prospectus. On each day when net asset value is not calculated,
the net asset value of a share of any class of any series of the Fund shall be
deemed to be the net asset value of such a share as of the close of business on
the last previous day on which such calculation was

F-4
<PAGE> 83

made. The distribution services fee for any class of a series of the Fund shall
be based upon average daily net assets of the series attributable to the class
and such fee shall be charged only to such class.

9. ZKDI shall prepare reports for the Board of Trustees of the Fund on a
quarterly basis in connection with the Fund's distribution plan for Class B
shares and Class C shares showing amounts paid to the various Firms and such
other information as from time to time shall be reasonably requested by the
Board of Trustees.

10. To the extent applicable, this Agreement constitutes the plan for the Class
B shares and Class C shares of each series of the Fund pursuant to Rule 12b-1
under the Investment Company Act of 1940; and this Agreement and plan shall be
approved and renewed in accordance with Rule 12b-1 for such Class B shares and
Class C shares separately.

This Agreement shall become effective on the date hereof and shall continue
until , 199 ; and shall continue from year to year thereafter only so
long as such continuance is approved in the manner required by the Investment
Company Act of 1940.

This Agreement shall automatically terminate in the event of its assignment and
may be terminated at any time without the payment of any penalty by the Fund or
by ZKDI on sixty (60) days written notice to the other party. The Fund may
effect termination with respect to any class of any series of the Fund by a vote
of (i) a majority of the Board of Trustees, (ii) a majority of the trustees who
are not interested persons of the Fund and who have no direct or indirect
financial interest in this Agreement or in any agreement related to this
Agreement, or (iii) a majority of the outstanding voting securities of the
class. Without prejudice to any other remedies of the Fund, the Fund may
terminate this Agreement at any time immediately upon ZKDI's failure to fulfill
any of its obligations hereunder.

This Agreement may not be amended to increase the amount to be paid to ZKDI by
the Fund for services hereunder with respect to a class of any series of the
Fund without the vote of a majority of the outstanding voting securities of such
class. All material amendments to this Agreement must in any event be approved
by a vote of the Board of Trustees of the Fund including the trustees who are
not interested persons of the Fund and who have no direct or indirect financial
interest in this Agreement or in any agreement related to this Agreement, cast
in person at a meeting called for such purpose.

The terms "assignment", "interested" and "vote of a majority of the outstanding
voting securities" shall have the meanings set forth in the Investment Company
Act of 1940 and the rules and regulations thereunder.

F-5
<PAGE> 84

Termination of this Agreement shall not affect the right of ZKDI to receive
payments on any unpaid balance of the compensation described in Section 8 earned
prior to such termination.

11. ZKDI will not use or distribute, or authorize the use, distribution or
dissemination by Firms or others in connection with the sale of Fund shares any
statements other than those contained in the Fund's current prospectus, except
such supplemental literature or advertising as shall be lawful under federal and
state securities laws and regulations. ZKDI will furnish the Fund with copies of
all such material.

12. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder shall not be thereby
affected.

13. Any notice under this Agreement shall be in writing, addressed and delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate for the receipt of such notice.

14. All parties hereto are expressly put on notice of the Fund's Agreement and
Declaration of Trust, and all amendments thereto, all of which are on file with
the Secretary of The Commonwealth of Massachusetts, and the limitation of
shareholder and trustee liability contained therein. This Agreement has been
executed by and on behalf of the Fund by its representatives as such
representatives and not individually, and the obligations of the Fund hereunder
are not binding upon any of the Trustees, officers or shareholders of the Fund
individually but are binding upon only the assets and property of the Fund. With
respect to any claim by ZKDI for recovery of any liability of the Fund arising
hereunder allocated to a particular series or class, whether in accordance with
the express terms hereof or otherwise, ZKDI shall have recourse solely against
the assets of that series or class to satisfy such claim and shall have no
recourse against the assets of any other series or class for such purpose.

15. This Agreement shall be construed in accordance with applicable federal law
and the laws of the Commonwealth of Massachusetts.

16. This Agreement is the entire contract between the parties relating to the
subject matter hereof and supersedes all prior agreements between the parties
relating to the subject matter hereof.

F-6
<PAGE> 85

IN WITNESS WHEREOF, the Fund and ZKDI have caused this Agreement to be executed
as of the day and year first above written.

[FUND]

By:

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

Title:

-----------------------------------------------------------------------
ATTEST:

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

Title:
- --------------------------------

ZURICH KEMPER
DISTRIBUTORS, INC.

By:

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

Title:

-----------------------------------------------------------------------
ATTEST:

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

Title:
- --------------------------------

F-7
<PAGE> 86

EXHIBIT G

PROPOSED FUNDAMENTAL INVESTMENT POLICIES

The following policies are proposed to be changed with respect to each Fund. The
proposed additions are underlined and the proposed deletions are marked by
strike-through.

[Forthcoming]

G-1
<PAGE> 87

EXHIBIT H

KEMPER FUNDS AND MANAGEMENT FEES

<TABLE>
<CAPTION>
TOTAL NET ASSETS* MANAGEMENT
FUND (MILLIONS) FEE**
---- ----------------- ----------
<S> <C> <C>

Kemper Technology Fund................ $ A
Kemper Total Return Fund.............. A
Kemper Growth Fund.................... A
Kemper Small Capitalization Equity
Fund................................ F
Kemper Income and Capital Preservation
Fund................................ B
Kemper National Tax-Free Income Series
1. Kemper Municipal Bond Fund....... C
2. Kemper Intermediate Municipal
Bond Fund........................ B
Kemper Diversified Income Fund........ A
Kemper High Yield Series.............. A
1. Kemper High Yield Fund...........
2. Kemper High Yield Opportunity
Fund.............................
Kemper U.S. Government Securities
Fund................................ C
Kemper International Fund............. D
Kemper International Bond Fund........
Kemper State Tax-Free Income Series
1. Kemper California Tax-Free Income
Fund............................. B
2. Kemper New York Tax-Free Income
Fund............................. B
3. Kemper Florida Tax-Free Income
Fund............................. B
4. Kemper Texas Tax-Free Income
Fund............................. B
5. Kemper Ohio Tax-Free Income
Fund............................. B
6. Kemper Michigan Tax-Free Income
Fund............................. B
7. Kemper New Jersey Tax-Free Income
Fund............................. B
8. Kemper Pennsylvania Tax-Free
Income Fund...................... B
</TABLE>

H-1
<PAGE> 88
<TABLE>
<CAPTION>
TOTAL NET ASSETS* MANAGEMENT
FUND (MILLIONS) FEE**
---- ----------------- ----------
<S> <C> <C>
Kemper Portfolios
1. Kemper Cash Reserves Fund........ E
2. Kemper U.S. Mortgage Fund........ B
3. Kemper Short-Intermediate
Government Fund.................. B
Kemper Value Fund, Inc.
1. Kemper Contrarian Fund...........
2. Kemper-Dreman High Return Equity
Fund.............................
3. Kemper Small Cap Value Fund......
4. Kemper Mid-Cap Value Fund........
Kemper Adjustable Rate U.S. Government
Fund................................ B
Kemper Blue Chip Fund................. A
Kemper Global Income Fund............. D
Kemper Value+Growth Fund..............
Kemper Quantitative Equity Fund.......
Kemper Asian Growth Fund..............
Kemper Europe Fund....................
Kemper Aggressive Growth Fund.........
Zurich Money Funds.................... G
1. Zurich Money Market Fund......... 0.27%
2. Government Securities Fund....... 0.27%
3. Zurich Tax-Exempt Fund........... 0.27%
Zurich YieldWise Money Fund...........
Cash Equivalent Fund..................
1. Money Market Portfolio........... H
2. Government Securities
Portfolio........................ H
3. Tax-Exempt Portfolio............. H
Tax-Exempt California Money Market
Fund................................ H
Cash Account Trust.................... H
1. Money Market Portfolio...........
2. Government Securities
Portfolio........................
3. Tax-Exempt Portfolio.............
Investors Cash Trust***
1. Government Securities
Portfolio........................ 0.15%
2. Treasury Portfolio............... 0.15%
</TABLE>

H-2
<PAGE> 89
<TABLE>
<CAPTION>
TOTAL NET ASSETS* MANAGEMENT
FUND (MILLIONS) FEE**
---- ----------------- ----------
<S> <C> <C>
Investors Municipal Cash Fund
1. Investors Florida Municipal Cash
Fund............................
2. Investors New Jersey Municipal
Cash Fund.......................
3. Investors Pennsylvania Municipal
Cash Fund.......................
4. Tax-Exempt New York Money Market
Fund............................ H
Kemper High Income Trust.............. 0.85%
Kemper Intermediate Government
Trust............................... 0.80%
Kemper Municipal Income Trust......... 0.55%
Kemper Multi-Market Income Trust...... 0.85%
Kemper Strategic Municipal Income
Trust............................... 0.60%
The Growth Fund of Spain, Inc......... 1.00%
Kemper Strategic Income Fund.......... 0.85%
Kemper Horizon Fund
1. Kemper Horizon 20+ Portfolio....
2. Kemper Horizon 10+ Portfolio....
3. Kemper Horizon 5 Portfolio......
Investors Fund Series
1. Kemper Money Market Portfolio... 0.50%
2. Kemper Total Return Portfolio... 0.55%
3. Kemper High Yield Portfolio..... 0.60%
4. Kemper Growth Portfolio......... 0.60%
5. Kemper Government Securities
Portfolio....................... 0.55%
6. Kemper International
Portfolio....................... 0.75%
7. Kemper Small Capitalization
Growth Portfolio................ 0.65%
8. Kemper Investment Grade Bond
Portfolio.......................
9. Kemper Value Portfolio..........
10. Kemper Small Cap Value
Portfolio.......................
11. Kemper Value+Growth Portfolio...
12. Kemper Horizon 20+ Portfolio....
13. Kemper Horizon 10+ Portfolio....
14. Kemper Horizon 5 Portfolio......
15. Kemper Blue Chip Portfolio......
16. Kemper Global Income
Portfolio.......................
</TABLE>

H-3
<PAGE> 90
<TABLE>
<CAPTION>
TOTAL NET ASSETS* MANAGEMENT
FUND (MILLIONS) FEE**
---- ----------------- ----------
<S> <C> <C>
17. Zurich High Yield Portfolio.....
18. Zurich Emerging Markets
Portfolio........................
Kemper Target Equity Fund
1. Kemper Retirement Fund Series
I................................ 0.50%
2. Kemper Retirement Fund Series
II............................... 0.50%
3. Kemper Retirement Fund Series
III.............................. 0.50%
4. Kemper Retirement Fund Series
IV............................... 0.50%
5. Kemper Retirement Fund Series
V................................ 0.50%
6. Kemper Retirement Fund Series
VI............................... 0.50%
7. Kemper Retirement Fund Series
VII..............................
8. Kemper Worldwide 2004 Fund....... 0.60%
</TABLE>

- ---------------
* Total Net Assets, in millions, as of end of fiscal year, 1996.
** Scheduled annual management fees payable to ZKI as a percentage of average
daily net assets.
*** ZKI has agreed to temporarily absorb or pay operating expenses of the
Investors Cash Trust portfolios to the extent, if any, that such expenses
exceed 0.80% of average daily net assets of such portfolios.

(A) .58 of 1% of the first $250 million, .55 of 1% of the next $750 million, .53
of 1% of the next $1.5 billion, .51 of 1% of the next $2.5 billion, .48 of
1% of the next $2.5 billion, .46 of 1% of the next $2.5 billion, .44 of 1%
of the next $2.5 billion and .42 of 1% thereafter.

(B) .55 of 1% of the first $250 million, .52 of 1% of the next $750 million,
.50 of 1% of the next $1.5 billion, .48 of 1% of the next $2.5 billion, .45
of 1% of the next $2.5 billion, .43 of 1% of the next $2.5 billion, .41 of
1% of the next $2.5 billion and .40 of 1% thereafter. ZKI is currently
waiving its management fee for [Kemper Intermediate Municipal Bond Fund,
Kemper Michigan Tax-Free Income Fund, Kemper New Jersey Tax-Free Income
Fund and Kemper Pennsylvania Tax-Free Income Fund].

(C) .45 of 1% of the first $250 million, .43 of 1% of the next $750 million, .41
of 1% of the next $1.5 billion, .40 of 1% of the next $2.5 billion, .38 of
1% of the next $2.5 billion, .36 of 1% of the next $2.5 billion, .34 of 1%
of the next $2.5 billion and .32 of 1% thereafter.

(D) .75 of 1% of the first $250 million, .72 of 1% of the next $750 million, .70
of 1% of the next $1.5 billion, .68 of 1% of the next $2.5 billion, .65 of
1% of the next $2.5 billion, .64 of 1% of the next $2.5 billion, .63 of 1%
of the next $2.5 billion and .62 of 1% thereafter.

H-4
<PAGE> 91

(E) .40 of 1% of the first $250 million, .38 of 1% of the next $750 million,
.35 of 1% of the next $1.5 billion, .32 of 1% of the next $2.5 billion, .30
of 1% of the next $2.5 billion, .28 of 1% of the next $2.5 billion, .26 of
1% of the next $2.5 billion and .25 of 1% thereafter.

(F) Base investment management fee of .65 of 1% of average daily net assets
plus or minus an incentive fee based upon the investment performance of the
fund as compared with the performance of the Standard & Poor's 500 Stock
Index which may result in a total fee ranging from .35 of 1% to .95 of 1%.

(G) .50% of the first $215 million; .375% of the next $335 million; .30% of the
next $250 million; .25% thereafter (on the identified series in the
aggregate).

(H) .22% of the first $500 million; .20% of the next $500 million; .175% of the
next $1 billion; .16% of the next $1 billion; .15% thereafter (on the
identified series in the aggregate). ZKI has agreed to temporarily absorb
operating expenses of the Cash Account Trust portfolios to the extent, if
any, that such expenses exceed the following percentages of average daily
net assets: Money Market Portfolio (1.00%), Government Securities Portfolio
(0.90%) and Tax-Exempt Portfolio (0.80%). In addition, from time to time,
ZKI may voluntarily absorb certain additional expenses of the Cash Account
Trust portfolios. ZKI has also agreed to temporarily absorb or pay
operating expenses of Tax-Exempt New York Money Market Fund to the extent,
if any, that such expenses exceed 0.80% of average net assets of the Fund.

(I) .80% of the first $250 million; .79% of the next $750 million; .77% of the
next $1.5 billion; .75% thereafter.

(J) .65% of the first $250 million; .64% of the next $750 million; .62% of the
next $1.5 billion; .60% thereafter.

(K) .50% of the first $250 million; .49% of the next $750 million; .47% of the
next $1.5 billion; .45% thereafter.

H-5
<PAGE> 92

EXHIBIT I

SCUDDER FUNDS AND FEE RATES

<TABLE>
<CAPTION>
TOTAL
NET ASSETS*
FUND (MILLIONS) FEE RATE**
---- ----------- ----------
<S> <C> <C>
MONEY MARKET
Scudder U.S. Treasury
Money Fund................... 0.500% of net assets
Scudder Cash Investment
Trust........................ 0.500% to $250 million
0.450% next $250 million
0.400% next $500 million
0.350% thereafter
Scudder Money Market Series.... 0.250% of net assets
Scudder Government Money Market
Series....................... 0.250% of net assets
TAX FREE MONEY MARKET
Scudder Tax Free Money Fund.... 0.500% to $500 million
0.480% thereafter
Scudder Tax Free Money Market
Series....................... 0.250% of net assets
Scudder California Tax Free
Money Fund................... 0.500% of net assets
Scudder New York Tax Free Money
Fund......................... 0.500% of net assets
TAX FREE
Scudder Limited Term Tax Free
Fund......................... 0.600% of net assets
Scudder Medium Term Tax Free
Fund......................... 0.600% to $500 million
0.500% thereafter
Scudder Managed Municipal
Bonds........................ 0.550% to $200 million
0.500% next $500 million
0.475% thereafter
Scudder High Yield Tax
Free Fund.................... 0.650% to $300 million
0.600% thereafter
Scudder California Tax
Free Fund.................... 0.625% to $200 million
0.600% thereafter
Scudder Massachusetts Limited
Term Tax Free Fund........... 0.600% of net assets
</TABLE>

I-1
<PAGE> 93
<TABLE>
<CAPTION>
TOTAL
NET ASSETS*
FUND (MILLIONS) FEE RATE**
---- ----------- ----------
<S> <C> <C>
Scudder New York Tax
Free Fund.................... 0.625% to $250 million
0.600% thereafter
Scudder Ohio Tax Free Fund..... 0.600% of net assets
Scudder Pennsylvania Tax Free
Fund......................... 0.600% of net assets
U.S. INCOME
Scudder Short Term Bond Fund... 0.600% to $500 million
0.500% next $500 million
0.450% next $500 million
0.400% next $500 million
0.375% next $1 billion
0.350% thereafter
Scudder Zero Coupon 2000
Fund......................... 0.600% of net assets
Scudder GNMA Fund.............. 0.650% to $200 million
0.600% next $300 million
0.550% thereafter
Scudder Income Fund............ 0.650% to $200 million
0.600% next $300 million
0.550% thereafter
Scudder High Yield Bond Fund... 0.700% of net assets
GLOBAL INCOME
Scudder Global Bond Fund....... 0.750% to $1 billion
0.700% thereafter
Scudder International Bond
Fund......................... 0.850% to $1 billion
0.800% thereafter
Scudder Emerging Markets Income
Fund......................... 1.000% of net assets
ASSET ALLOCATION
Scudder Pathway Conservative
Portfolio.................... 0.000%
Scudder Pathway Balanced
Portfolio.................... 0.000%
Scudder Pathway Growth
Portfolio.................... 0.000%
Scudder Pathway International
Portfolio.................... 0.000%
U.S. GROWTH AND INCOME
Scudder Balanced Fund.......... 0.700% of net assets
</TABLE>

I-2
<PAGE> 94
<TABLE>
<CAPTION>
TOTAL
NET ASSETS*
FUND (MILLIONS) FEE RATE**
---- ----------- ----------
<S> <C> <C>
Scudder Growth and
Income Fund.................. 0.600% to $500 million
0.550% next $500 million
0.500% next $500 million
0.475% next $500 million
0.450% next $1 billion
0.425% next $1 billion
0.405% thereafter
U.S. GROWTH
Scudder Large Company Value
Fund (formerly Scudder
Capital Growth Fund)......... 0.750% to $500 million
0.650% next $500 million
Scudder Value Fund............. 0.700% of net assets
Scudder Small Company Value
Fund......................... 0.750% of net assets
Scudder Micro Cap Fund......... 0.750% of net assets
Scudder Classic Growth Fund.... 0.700% of net assets
Scudder Large Company Growth
Fund (formerly Scudder
Quality Growth Fund)......... 0.700% of net assets
Scudder Development Fund....... 1.000% to $500 million
0.950% next $500 million
0.900% thereafter
Scudder 21st Century
Growth Fund.................. 1.000% of net assets
GLOBAL GROWTH
Scudder Global Fund............ 1.000% to $500 million
0.950% next $500 million
0.900% next $500 million
0.850% thereafter
Institutional International
Equity Portfolio............. 0.900% of net assets
Scudder International Growth
and Income Fund.............. 1.000% of net assets
Scudder International Fund..... 0.900% to $500 million
0.850% next $500 million
0.800% next $1 billion
0.750% next $1 billion
0.700% thereafter
Scudder Global Discovery
Fund......................... 1.100% of net assets
</TABLE>

I-3
<PAGE> 95
<TABLE>
<CAPTION>
TOTAL
NET ASSETS*
FUND (MILLIONS) FEE RATE**
---- ----------- ----------
<S> <C> <C>
Scudder Emerging Markets Growth
Fund......................... 1.25% of net assets
Scudder Gold Fund.............. 1.000% of net assets
Scudder Greater Europe Growth
Fund......................... 1.000% of net assets
Scudder Pacific Opportunities
Fund......................... 1.100% of net assets
Scudder Latin America Fund..... 1.250% to $1 billion
1.150% thereafter
The Japan Fund, Inc............ 0.850% to $100 million
0.750% next $200 million
0.700% next $300 million
0.650% thereafter
CLOSED-END FUNDS
The Argentina Fund, Inc........ Advisor:
Effective 11/01/97:
1.100% of net assets
Sub-Advisor:
Paid by Advisor.
0.160% of net assets
The Brazil Fund, Inc........... 1.200% to $150 million
1.050% next $150 million
1.000% thereafter
Effective 10/29/97:
1.200% to $150 million
1.050% next $150 million
1.000% next $200 million
0.900% thereafter
Administrator:
Annual Fee of $50,000
</TABLE>

I-4
<PAGE> 96
<TABLE>
<CAPTION>
TOTAL
NET ASSETS*
FUND (MILLIONS) FEE RATE**
---- ----------- ----------
<S> <C> <C>
The Korea Fund, Inc............ Advisor:
1.150% to $50 million
1.100% next $50 million
1.000% next $250 million
0.950% next $400 million
0.900% thereafter
Sub-Advisor Daewoo
(paid by Advisor):
0.2875% to $50 million
0.275% next $50 million
0.250% next $250 million
0.2375% next $400
million
0.225% thereafter
The Latin America Dollar Income
Fund, Inc.................... 1.200% of net assets
Montgomery Street Income
Securities, Inc.............. 0.500% to $150 million
0.450% next $50 million
0.400% thereafter
Scudder New Asia Fund, Inc..... 1.250% to $75 million
1.150% next $125 million
1.100% thereafter
Scudder New Europe Fund,
Inc.......................... 1.250% to $75 million
1.150% next $125 million
1.100% thereafter
Scudder Spain and Portugal
Fund, Inc.................... Advisor:
1.000% of net assets
Administrator:
0.200% of net assets
Scudder World Income
Opportunities Fund, Inc...... 1.200% of net assets
INSURANCE PRODUCTS
Balanced Portfolio............. 0.475% of net assets
Bond Portfolio................. 0.475% of net assets
Capital Growth Portfolio....... 0.475% to $500 million
0.450% thereafter
Global Discovery Portfolio..... 0.975% of net assets
Growth and Income Portfolio.... 0.475% of net assets
International Portfolio........ 0.875% to $500 million
0.775% thereafter
</TABLE>

I-5
<PAGE> 97

AARP FUND

Each AARP Fund pays Scudder a base fee at the following rates:(1)

0.350% to $2 billion
0.330% next $2 billion
0.300% next $2 billion
0.280% next $2 billion
0.260% next $3 billion
0.250% next $3 billion
0.240% thereafter
- ---------------
(1) There are two exceptions: The AARP Diversified Growth Portfolio and the AARP
Diversified Income Portfolio do not pay any separate fee, because the
manager receives a fee from the underlying funds.

In addition, AARP Funds pay an individual fund fee as follows:

<TABLE>
<CAPTION>
<S> <C>
AARP High Quality Money Fund..... 0.100% of net assets
AARP Balanced Stock & Bond Fund.. 0.190% of net assets
AARP Global Growth Fund.......... 0.550% of net assets
AARP Growth and Income Fund...... 0.190% of net assets
AARP International Stock Fund.... 0.600% of net assets
AARP Small Company Stock Fund.... 0.550% of net assets
AARP U.S. Stock Index Fund....... 0.000% of net assets
AARP Bond Fund for Income........ 0.280% of net assets
AARP GNMA and U.S. Treasury
Fund........................... 0.120% of net assets
AARP High Quality Bond Fund...... 0.190% of net assets
AARP High Quality Tax Free Money
Fund........................... 0.100% of net assets
AARP Insured Tax Free General
Bond Fund...................... 0.190% of net assets
</TABLE>

I-6
<PAGE> 98

EXHIBIT J

FEES AND EXPENSES

<TABLE>
<CAPTION>
KTEC KTRF KGF KSCF KICPF KDIF KHYS KGSF
---- ---- --- ---- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fiscal Year End............... 10/31/96 10/31/96 09/30/96 09/30/96 10/31/96 10/31/96 09/30/96 10/31/96
Management Fees Paid to ZKI...
Effective Management Fee
Rate.........................
Shareholder Service Fees Paid
by IFTC to ZKSC.............. $
Administrative Service Fees
Paid by Fund to ZKI.......... $
Maximum Administrative Service
Fee Rate Payable Based on
Assets Acquired Prior to
10/01/93..................... $
Maximum Administrative Service
Fee Rate Payable Based on
Assets Acquired On or After
10/01/93..................... $
Effective Administrative
Service Fee Rate............. $
Commissions Retained by
ZKDI......................... $
Commissions Allowed to
Affiliates of ZKDI........... $
Brokerage Commissions Paid by
Fund......................... $
Percent of Brokerage
Commissions Paid by Fund
Allocated on Basis of
Research/Sales...............
</TABLE>

- ---------------
(a) ZKI waived its management fee and absorbed certain operating expenses for
.

J-1
<PAGE> 99

EXHIBIT J -- (CONTINUED)

FEES AND EXPENSES -- (CONTINUED)

<TABLE>
<CAPTION>
KIF KARGF KBCF KGIF KVGF KQEF KAGF KAGGF
--- ----- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fiscal Year End............... 10/31/96 08/31/96 10/31/96 12/31/96 11/30/96 11/30/96 11/30/96 9/30/96
Management Fees Paid to ZKI...
Effective Management Fee
Rate.........................
Shareholder Service Fees Paid
by IFTC to ZKSC.............. $
Administrative Service Fees
Paid by Fund to ZKI.......... $
Maximum Administrative Service
Fee Rate Payable Based on
Assets Acquired Prior to
10/01/93..................... $
Maximum Administrative Service
Fee Rate Payable Based on
Assets Acquired On or After
10/01/93..................... $
Effective Administrative
Service Fee Rate............. $
Commissions Retained by
ZKDI......................... $
Commissions Allowed to
Affiliates of ZKDI........... $
Brokerage Commissions Paid by
Fund......................... $
Percent of Brokerage
Commissions Paid by Fund
Allocated on Basis of
Research/Sales...............
</TABLE>

- ---------------
(a) ZKI waived its management fee and absorbed certain operating expenses for
.

J-2
<PAGE> 100
<TABLE>
<CAPTION>
KNTIS KSTIS
----------------- -------------------------------------------------------------------
KMBF KIMBF KCATF KNYTF KFLTF KTXTF KOHTF KMITF KNJIF
---- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Fiscal Year End.................... 9/30/96 9/30/96 8/31/96 8/31/96 8/31/96 8/31/96 8/31/96
Management Fees Paid to ZKI........ $
Effective Management Fee Rate......
Shareholder Service Fees Paid by
IFTC to ZKSVC..................... $
Administrative Service Fees Paid by
Fund to ZKI....................... $
Maximum Administrative Service Fee
Rate Payable Based on Assets
Acquired Prior to 10/01/93........
Maximum Administrative Service Fee
Rate Payable Based on Assets
Acquired On or After 10/01/93.....
Effective Administrative Service
Fee Rate..........................
Commissions Retained by ZKDI....... $
Commissions Allowed to Affiliates
of ZKDI........................... $
Brokerage Commissions Paid by
Fund.............................. $
Percent of Brokerage Commissions
Paid by Fund Allocated on Basis of
Research/Sales....................

<CAPTION>
KSTIS KP
------- ---------------------------
KPATF KCRF KUSMF KSIGF
----- ---- ----- -----
<S> <C> <C> <C> <C>
Fiscal Year End.................... 7/31/97 7/31/97 7/31/97
Management Fees Paid to ZKI........
Effective Management Fee Rate......
Shareholder Service Fees Paid by
IFTC to ZKSVC.....................
Administrative Service Fees Paid by
Fund to ZKI.......................
Maximum Administrative Service Fee
Rate Payable Based on Assets
Acquired Prior to 10/01/93........
Maximum Administrative Service Fee
Rate Payable Based on Assets
Acquired On or After 10/01/93.....
Effective Administrative Service
Fee Rate..........................
Commissions Retained by ZKDI.......
Commissions Allowed to Affiliates
of ZKDI...........................
Brokerage Commissions Paid by
Fund..............................
Percent of Brokerage Commissions
Paid by Fund Allocated on Basis of
Research/Sales....................
</TABLE>

J-3

<PAGE> 3
[KEMPER FUNDS LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735

KEMPER GROWTH FUND

FOR THE JOINT SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 3, 1997

The signers of this proxy hereby appoint
Donald L. Dunaway and Stephen B. Timbers and each
of them, attorneys and proxies, with power of
substitution in each, to vote all shares for the
signers at the Joint Special Meeting of
Shareholders to be held December 3, 1997, and at
any adjournments thereof, as specified herein, and
in accordance with their best judgment, on any
other business that may properly come before this
meeting. If no specification is made herein, all
shares will be voted "FOR" the proposals set forth
on this proxy.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X]
- --------------------------------------------------------------------------------
KEMPER GROWTH FUND

PLEASE VOTE PROMPTLY!

Your vote is needed! Please vote below and sign in the space provided.

THE PROXY IS SOLICITED BY THE BOARD OF THE FUND WHICH RECOMMENDS A VOTE "FOR"
ALL ITEMS.

<TABLE>
<S><C>
1. To elect the following as trustees: For Withhold For All
All All Except
/ / / / / /

01) David W. Belin, 02) Lewis A. Burnham, 03) Donald L. Dunaway,
04) Robert B. Hoffman, 05) Donald R. Jones, 06) Shirley D. Peterson, 07) Daniel Pierce,
08) William P. Sommers, 09) Edmond D. Villani

-----------------------------------------------------------------------------------------
To withhold authority to vote on any individual nominee(s), please print the number(s)
on the line above.

2. To ratify the selection of Ernst & Young LLP
as independent auditors for the For Against Abstain
current fiscal year. / / / / / /

3. To approve a new investment management
agreement with Scudder Kemper Investments,
Inc. ("SKI") (or with Zurich Kemper
Investments, Inc. transferable to SKI). For Against Abstain
/ / / / / /

6. For Class B and Class C shareholders
only, to approve a new Rule 12b-1
distribution plan with Zurich For Against Abstain
Kemper Distributors, Inc. / / / / / /

7. To approve changes in the Fund's fundamental
investment policies to permit a master/feeder For Against Abstain
fund structure. / / / / / /

THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" ALL ITEMS.

Signature(s) (All registered owners of accounts shown above must sign.
If signing for a corporation, estate or trust, please indicate your capacity or
title.)

- ------------------------------------- ---------- ---------------------------------------- ----------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
- --------------------------------------------------------------------------------