<PAGE> PAGE 1
000 A000000 03/31/99
000 C000000 0000095605
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 KEMPER SMALL CAPITALIZATION EQUITY FUND
001 B000000 811-1702
001 C000000 3125377000
002 A000000 222 SOUTH RIVERSIDE PLAZA
002 B000000 CHICAGO
002 C000000 IL
002 D010000 60606
002 D020000 5808
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
007 C010100 1
007 C010200 2
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A000001 SCUDDER KEMPER INVESTMENTS, INC.
008 B000001 A
008 C000001 801-44899
008 D010001 NEW YORK
008 D020001 NY
008 D030001 10154
008 D040001 0100
010 A000001 KEMPER DISTRIBUTORS, INC.
010 B000001 8-47765
010 C010001 CHICAGO
010 C020001 IL
010 C030001 60606
010 C040001 5808
011 A000001 KEMPER DISTRIBUTORS, INC.
011 B000001 8-47765
011 C010001 CHICAGO
011 C020001 IL
011 C030001 60606
<PAGE> PAGE 2
011 C040001 5808
012 A000001 KEMPER SERVICE COMPANY
012 B000001 84-1713
012 C010001 KANSAS CITY
012 C020001 MO
012 C030001 64141
013 A000001 ERNST & YOUNG LLP
013 B010001 CHICAGO
013 B020001 IL
013 B030001 60606
014 A000001 SCUDDER INVESTOR SERVICES, INC.
014 B000001 8-298
014 A000002 KEMPER DISTRIBUTORS, INC.
014 B000002 8-47765
014 A000003 GRUNTAL & CO., INC.
014 B000003 8-31022
014 A000004 THE GMS GROUP, L.L.C. (A GRUNTAL AFFILIATE)
014 B000004 8-23936
014 A000005 ZURICH CAPITAL MARKETS
014 B000005 8-49827
014 A000006 BANK HANDLOWY
014 B000006 8-24613
015 A000001 INVESTORS FIDUCIARY TRUST COMPANY
015 B000001 C
015 C010001 KANSAS CITY
015 C020001 MO
015 C030001 64105
015 E010001 X
015 A000002 THE CHASE MANHATTAN BANK
015 B000002 C
015 C010002 BROOKLYN
015 C020002 NY
015 C030002 11245
015 E040002 X
015 A000003 STATE STREET BANK AND TRUST COMPANY
015 B000003 S
015 C010003 BOSTON
015 C020003 MA
015 C030003 02110
015 E010003 X
018 000000 Y
019 A000000 Y
019 B000000 71
019 C000000 KEMPERFNDS
020 A000001 MORGAN STANLEY DICOVER & CO.
020 B000001 13-2655998
020 C000001 1605
020 A000002 CS FIRST BOSTON CORPORATION
020 B000002 13-5659485
020 C000002 50
020 A000003 MERRILL LUNCH, PIERCE, FENNER & SMITH INC.
<PAGE> PAGE 3
020 B000003 13-5674085
020 C000003 49
020 A000004 JEFFERIES & COMPANY, INC.
020 B000004 95-2622900
020 C000004 47
020 A000005 HSBC
020 B000005 UNKNOWN
020 C000005 42
020 A000006 INSTINET CORPORATION
020 B000006 13-3443395
020 C000006 40
020 A000007 OPPENHEIMER & CO., INC.
020 B000007 13-2798343
020 C000007 36
020 A000008 WEEDEN & CO., L.P.
020 B000008 13-3364318
020 C000008 33
020 A000009 CANTOR FITZGERALD & CO,. INC.
020 B000009 13-3680184
020 C000009 29
020 A000010 DONALDSON, LUFTKIN & JENRETTE SECURITIES CORP
020 B000010 13-2741729
020 C000010 27
021 000000 2309
022 A000001 GOLDMAN, SACHS & CO.
022 B000001 13-5108880
022 C000001 201486
022 D000001 81242
022 A000002 SOUNDVIEW FINANCIAL GROUP, INC.
022 B000002 13-2998183
022 C000002 9580
022 D000002 161165
022 A000003 MESIROW & PEMBROKE
022 B000003 UNKNOWN
022 C000003 34861
022 D000003 80128
022 A000004 CS FIRST BOSTON CORPORATION
022 B000004 22-1660266
022 C000004 53391
022 D000004 59925
022 A000005 MERRILL LYNCH, PIERCE, FENNER & SMITH INC.
022 B000005 13-5674085
022 C000005 36357
022 D000005 47580
022 A000006 LEHMAN BROTHERS INC.
022 B000006 13-2518466
022 C000006 54392
022 D000006 16961
022 A000007 DONALDSON, LUFKIN & JENRETTE SECURITIES CORP.
022 B000007 13-2741729
022 C000007 42849
<PAGE> PAGE 4
022 D000007 18133
022 A000008 COWEN & CO.
022 B000008 UNKNOWN
022 C000008 39166
022 D000008 15938
022 A000009 MONTGOMERY SECURITIES
022 B000009 94-1701676
022 C000009 24151
022 D000009 24287
022 A000010 ALEX BROWN & SONS INCORPORATED
022 B000010 52-1319768
022 C000010 34410
022 D000010 5914
023 C000000 751687
023 D000000 774114
024 000000 N
025 D000001 0
025 D000002 0
025 D000003 0
025 D000004 0
025 D000005 0
025 D000006 0
025 D000007 0
025 D000008 0
026 A000000 Y
026 B000000 Y
026 C000000 Y
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026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
028 A010000 139388
028 A020000 0
028 A030000 0
028 A040000 96452
028 B010000 93799
028 B020000 0
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028 B040000 104025
028 C010000 147147
028 C020000 54583
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<PAGE> PAGE 5
028 E020000 3
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<PAGE> PAGE 6
048 E010000 0
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<PAGE> PAGE 7
062 I000000 0.0
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066 A000000 Y
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067 000000 N
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070 A010000 Y
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070 C010000 Y
070 C020000 N
070 D010000 Y
070 D020000 N
070 E010000 Y
070 E020000 N
070 F010000 Y
070 F020000 N
070 G010000 Y
070 G020000 N
070 H010000 Y
070 H020000 N
070 I010000 N
070 I020000 N
070 J010000 Y
070 J020000 N
070 K010000 N
070 K020000 N
070 L010000 Y
070 L020000 N
070 M010000 Y
070 M020000 N
070 N010000 Y
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<PAGE> PAGE 8
070 O010000 N
070 O020000 N
070 P010000 N
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071 A000000 519535
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<PAGE> PAGE 9
074 C000000 12986
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<PAGE> PAGE 10
SIGNATURE PHILIP J. COLLORA
TITLE V.P. & SECRETARY
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1999 SEMIANNUAL REPORT TO SHAREHOLDERS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000095605
<NAME> KEMPER SMALL CAPITALIZATION EQUITY FUND
<SERIES>
<NUMBER> 001
<NAME> CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<INVESTMENTS-AT-COST> 617,043
<INVESTMENTS-AT-VALUE> 747,557
<RECEIVABLES> 4,566
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 752,123
<PAYABLE-FOR-SECURITIES> 8,886
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,209
<TOTAL-LIABILITIES> 13,095
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 528,787
<SHARES-COMMON-STOCK> 100,792
<SHARES-COMMON-PRIOR> 96,549
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 79,727
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 130,514
<NET-ASSETS> 739,028
<DIVIDEND-INCOME> 585
<INTEREST-INCOME> 856
<OTHER-INCOME> 0
<EXPENSES-NET> (5,389)
<NET-INVESTMENT-INCOME> (3,948)
<REALIZED-GAINS-CURRENT> 7,284
<APPREC-INCREASE-CURRENT> 92,276
<NET-CHANGE-FROM-OPS> 95,612
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (41,243)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 124,698
<NUMBER-OF-SHARES-REDEEMED> (127,317)
<SHARES-REINVESTED> 6,862
<NET-CHANGE-IN-ASSETS> 20,679
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 72,443
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,554
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,389
<AVERAGE-NET-ASSETS> 791,414
<PER-SHARE-NAV-BEGIN> 5.30
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> .67
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.41)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.54
<EXPENSE-RATIO> 1.03
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1999 SEMIANNUAL REPORT TO SHAREHOLDERS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000095605
<NAME> KEMPER SMALL CAPITALIZATION EQUITY FUND
<SERIES>
<NUMBER> 002
<NAME> CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<INVESTMENTS-AT-COST> 617,043
<INVESTMENTS-AT-VALUE> 747,557
<RECEIVABLES> 4,566
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 752,123
<PAYABLE-FOR-SECURITIES> 8,886
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,209
<TOTAL-LIABILITIES> 13,095
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 528,787
<SHARES-COMMON-STOCK> 30,228
<SHARES-COMMON-PRIOR> 37,351
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 79,727
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 130,514
<NET-ASSETS> 739,028
<DIVIDEND-INCOME> 585
<INTEREST-INCOME> 856
<OTHER-INCOME> 0
<EXPENSES-NET> (5,389)
<NET-INVESTMENT-INCOME> (3,948)
<REALIZED-GAINS-CURRENT> 7,284
<APPREC-INCREASE-CURRENT> 92,276
<NET-CHANGE-FROM-OPS> 95,612
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (14,405)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,899
<NUMBER-OF-SHARES-REDEEMED> (18,722)
<SHARES-REINVESTED> 2,700
<NET-CHANGE-IN-ASSETS> 20,679
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 72,443
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,554
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,389
<AVERAGE-NET-ASSETS> 791,414
<PER-SHARE-NAV-BEGIN> 4.98
<PER-SHARE-NII> (.06)
<PER-SHARE-GAIN-APPREC> .64
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.41)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.15
<EXPENSE-RATIO> 2.49
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1999 SEMIANNUAL REPORT TO SHAREHOLDERS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000095605
<NAME> KEMPER SMALL CAPITALIZATION EQUITY FUND
<SERIES>
<NUMBER> 003
<NAME> CLASS C
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<INVESTMENTS-AT-COST> 617,043
<INVESTMENTS-AT-VALUE> 747,557
<RECEIVABLES> 4,566
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 752,123
<PAYABLE-FOR-SECURITIES> 8,886
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,209
<TOTAL-LIABILITIES> 13,095
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 528,787
<SHARES-COMMON-STOCK> 2,765
<SHARES-COMMON-PRIOR> 1,628
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 79,727
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 130,514
<NET-ASSETS> 739,028
<DIVIDEND-INCOME> 585
<INTEREST-INCOME> 856
<OTHER-INCOME> 0
<EXPENSES-NET> (5,389)
<NET-INVESTMENT-INCOME> (3,948)
<REALIZED-GAINS-CURRENT> 7,284
<APPREC-INCREASE-CURRENT> 92,276
<NET-CHANGE-FROM-OPS> 95,612
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1,075)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 18,384
<NUMBER-OF-SHARES-REDEEMED> (17,448)
<SHARES-REINVESTED> 201
<NET-CHANGE-IN-ASSETS> 20,679
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 72,443
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,554
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,389
<AVERAGE-NET-ASSETS> 791,414
<PER-SHARE-NAV-BEGIN> 5.00
<PER-SHARE-NII> (.05)
<PER-SHARE-GAIN-APPREC> .64
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.41)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.18
<EXPENSE-RATIO> 2.15
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1999 SEMIANNUAL REPORT TO SHAREHOLDERS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000095605
<NAME> KEMPER SMALL CAPITALIZATION EQUITY FUND
<SERIES>
<NUMBER> 004
<NAME> CLASS I
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<INVESTMENTS-AT-COST> 617,043
<INVESTMENTS-AT-VALUE> 747,557
<RECEIVABLES> 4,566
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 752,123
<PAYABLE-FOR-SECURITIES> 8,886
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,209
<TOTAL-LIABILITIES> 13,095
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 528,787
<SHARES-COMMON-STOCK> 1,891
<SHARES-COMMON-PRIOR> 2,290
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 79,727
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 130,514
<NET-ASSETS> 739,028
<DIVIDEND-INCOME> 585
<INTEREST-INCOME> 856
<OTHER-INCOME> 0
<EXPENSES-NET> (5,389)
<NET-INVESTMENT-INCOME> (3,948)
<REALIZED-GAINS-CURRENT> 7,284
<APPREC-INCREASE-CURRENT> 92,276
<NET-CHANGE-FROM-OPS> 95,612
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (915)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 245
<NUMBER-OF-SHARES-REDEEMED> (804)
<SHARES-REINVESTED> 160
<NET-CHANGE-IN-ASSETS> 20,679
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 72,443
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,554
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,389
<AVERAGE-NET-ASSETS> 791,414
<PER-SHARE-NAV-BEGIN> 5.39
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> .68
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.41)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.66
<EXPENSE-RATIO> .52
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
Exhibit 77C
Kemper Small Capitalization Equity Fund
Form N-SAR for the period ended 3/31/98
File No. 811-1702
Page 1
A special meeting of Registrant's shareholders was held on
December 3, 1997 and was adjourned as necessary. Votes regarding
the items submitted to shareholder vote are set forth below.
Item 1: Election of the Board of Trustees
David W. Belin
Vote Number
---- -----------
FOR 73,167,971
WITHHELD 1,479,476
Lewis A. Burnham
Vote Number
---- -----------
FOR 73,216,594
WITHHELD 1,430,853
Donald L. Dunaway
Vote Number
---- -----------
FOR 73,201,684
WITHHELD 1,445,763
Robert B. Hoffman
Vote Number
---- -----------
FOR 73,213,872
WITHHELD 1,433,575
Exhibit 77C
Kemper Small Capitalization Equity Fund
Form N-SAR for the period ended 3/31/98
File No. 811-1702
Page 2
Donald R. Jones
Vote Number
---- -----------
FOR 73,209,820
WITHHELD 1,437,628
Shirley D. Peterson
Vote Number
---- -----------
FOR 73,160,923
WITHHELD 1,486,525
Daniel Pierce
Vote Number
---- -----------
FOR 73,153,670
WITHHELD 1,493,777
William P. Sommers
Vote Number
---- -----------
FOR 73,233,097
WITHHELD 1,414,351
Edmond D. Villani
Vote Number
---- -----------
FOR 73,157,826
WITHHELD 1,489,621
Exhibit 77C
Kemper Small Capitalization Equity Fund
Form N-SAR for the period ended 3/31/98
File No. 811-1702
Page 3
Item 2: Selection of Independent Auditors
Vote Number
---- -----------
F0R 72,480,025
AGAINST 484,463
ABSTAIN 1,682,958
Item 3: New Investment Management Agreement
Vote Number
---- -----------
F0R 70,317,585
AGAINST 1,435,229
ABSTAIN 2,562,810
Item 6: New Rule 12B-1 Distribution Plan
(Class B shareholders only)
Vote Number
---- -----------
F0R 18,908,305
AGAINST 508,990
ABSTAIN 1,156,176
(Class C shareholders only)
Vote Number
---- -----------
F0R 1,373,043
AGAINST 7,818
ABSTAIN 26,960
Exhibit 77C
Kemper Small Capitalization Equity Fund
Form N-SAR for the period ended 3/31/98
File No. 811-1702
Page 4
Item 7: Approve changes in investment policies
Vote Number
---- -----------
F0R 63,418,719
AGAINST 3,399,185
ABSTAIN 4,350,361
MRB|W:\FUNDS\NSAR.EXH\KSCF\77C.398|050798
Exhibit 77Q1(e)
Kemper Small Capitalization Equity Fund
Form N-SAR for the period ended 3/31/98
File No. 811-1702
INVESTMENT MANAGEMENT AGREEMENT
Kemper Small Capitalization Equity Fund
222 South Riverside Plaza
Chicago, Illinois 60606
December 31, 1997
Scudder Kemper Investments, Inc.
345 Park Avenue
New York, New York 10154
Investment Management Agreement
Kemper Small Capitalization Equity Fund
Ladies and Gentlemen:
KEMPER SMALL CAPITALIZATION EQUITY FUND (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 (the "Shares"), in separate
series, or funds. The Board of Trustees has authorized Kemper
Small Capitalization Equity Fund (the "Fund"). Series may be
abolished and dissolved, and additional series established, from
time to time by action of the Trustees.
The Trust, on behalf of the Fund, has selected you to act as the
investment manager of the Fund and to provide certain other
services, as more fully set forth below, and you have indicated
that you are willing to act as such investment manager and to
perform such services under the terms and conditions hereinafter
set forth. Accordingly, the Trust on behalf of the Fund agrees
with you as follows:
1. Delivery of Documents. The Trust engages in the business of
investing and reinvesting the assets of the Fund in the manner
and in accordance with the investment objectives, policies and
restrictions specified in the currently effective Prospectus (the
"Prospectus") and Statement of Additional Information (the "SAI")
relating to the Fund included in the Trust's Registration
Statement on Form N-1A, as amended from time to time, (the
"Registration Statement") filed by the Trust under the Investment
Company Act of 1940, as amended, (the "1940 Act") and the
Securities Act of 1933, as amended. Copies of the documents
referred to in the preceding sentence have been furnished to you
by the Trust. The Trust has also furnished you with copies
properly certified or authenticated of each of the following
additional documents related to the Trust and the Fund:
(a) The Declaration, 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 relating to the Fund, as applicable.
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.
2
You shall determine the securities, instruments, investments,
currencies, repurchase agreements, futures, options and other
contracts relating to investments to be purchased, sold or
entered into by the Fund and place orders with broker-dealers,
foreign currency dealers, futures commission merchants or others
pursuant to your determinations and all in accordance with Fund
policies as expressed in the Registration Statement. You shall
determine what portion of the Fund's portfolio shall be invested
in securities and other assets and what portion, if any, should
be held uninvested.
You shall furnish to the Trust's Board of Trustees periodic
reports on the investment performance of the Fund and on the
performance of your obligations pursuant to this Agreement, and
you shall supply such additional reports and information as the
Trust's officers or Board of Trustees shall reasonably request.
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
3
agents of the Fund; assisting in establishing the accounting
policies of the Fund; assisting in the resolution of accounting
issues that may arise with respect to the Fund's operations and
consulting with the Fund's independent accountants, legal counsel
and the Fund's other agents as necessary in connection therewith;
establishing and monitoring the Fund's operating expense budgets;
reviewing the Fund's bills; processing the payment of bills that
have been approved by an authorized person; assisting the Fund in
determining the amount of dividends and distributions available
to be paid by the Fund to its shareholders, preparing and
arranging for the printing of dividend notices to shareholders,
and providing the transfer and dividend paying agent, the
custodian, and the accounting agent with such information as is
required for such parties to effect the payment of dividends and
distributions; and otherwise assisting the Trust as it may
reasonably request in the conduct of the Fund's business, subject
to the direction and control of the Trust's Board of Trustees.
Nothing in this Agreement shall be deemed to shift to you or to
diminish the obligations of any agent of the Fund or any other
person not a party to this Agreement which is obligated to
provide services to the Fund.
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
4
accounting agent for which the Trust is responsible pursuant to
the terms of the Fund Accounting Services Agreement, custodians,
subcustodians, transfer agents, dividend disbursing agents and
registrars; payment for portfolio pricing or valuation services
to pricing agents, accountants, bankers and other specialists, if
any; expenses of preparing share certificates and, except as
provided below in this section 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 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 Class A shares of the Fund as compared with the performance
of the Standard & Poor's 500 Stock Index (the "Index"). The
Trust will pay an additional monthly fee at an annual rate of
.05% of such average daily net assets for each percentage point
(fractions to be prorated) by which the performance of the Class
5
A shares of the Fund 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 Trust will be reduced by an annual rate of .05% of such
average daily net assets for each percentage point (fractions to
be prorated) by which the performance of the Class A shares of
the Fund 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 Trust's
investment performance during any twelve month period is measured
by the percentage difference between (a) the opening net asset
value of one Class A share of the Fund and (b) 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 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 Trust's
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 you. 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%. 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 Trust's 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 performance of the Fund's Class A shares is
less favorable than that of the Index, although the performance
of the Fund's Class A shares over a longer period of time might
be better than that of the Index. These management fees will be
reduced by any compensation waived by you from time to time (as
more fully described below).
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
6
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 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 you
have available funds for investment, investments suitable and
appropriate for each shall be allocated in accordance with
procedures believed by you to be equitable to each entity.
Similarly, opportunities to sell securities shall be allocated in
a manner believed by you 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
7
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 March 1, 1998, and continue in force
from year to year thereafter, but only so long as such
continuance is specifically approved at least annually (a) by the
vote of a majority of the Trustees who are not parties to this
Agreement or interested persons of any party to this Agreement,
cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the Trustees of the Trust, or by the
vote of a majority of the outstanding voting securities of the
Fund. The aforesaid requirement that continuance of this
Agreement be "specifically approved at least annually" shall be
construed in a manner consistent with the 1940 Act and the rules
and regulations thereunder and any applicable SEC exemptive order
therefrom.
This Agreement may be terminated with respect to the Fund at any
time, without the payment of any penalty, by the vote of a
majority of the outstanding voting securities of the Fund or by
the Trust's Board of Trustees on 60 days' written notice to you,
or by you on 60 days' written notice to the Trust. This
Agreement shall terminate automatically in the event of its
assignment.
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 "Kemper Small Capitalization Equity Fund"
8
refers to the Trustees under the Declaration collectively as
Trustees and not as individuals or personally, and that no
shareholder of the Fund, or Trustee, officer, employee or agent
of the Trust, shall be subject to claims against or obligations
of the Trust or of the Fund to any extent whatsoever, but that
the Trust estate only shall be liable.
You are hereby expressly put on notice of the limitation of
liability as set forth in the Declaration and you agree that the
obligations assumed by the Trust on behalf of the Fund pursuant
to this Agreement shall be limited in all cases to the Fund and
its assets, and you shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Fund
or any other series of the Trust, or from any Trustee, officer,
employee or agent of the Trust. You understand that the rights
and obligations of each Fund, or series, under the Declaration
are separate and distinct from those of any and all other series.
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.
9
If you are in agreement with the foregoing, please execute the
form of acceptance on the accompanying counterpart of this letter
and return such counterpart to the Trust, whereupon this letter
shall become a binding contract effective as of the date of this
Agreement.
Yours very truly,
KEMPER SMALL CAPITALIZATION EQUITY
FUND, on behalf of Kemper Small
Capitalization Equity Fund
By: /s/ John E. Neal
--------------------------------
Vice President
The foregoing Agreement is hereby accepted as of the date hereof.
SCUDDER KEMPER INVESTMENTS, INC.
By: /s/ Lynn S. Birdsong
--------------------------------
Vice President
MRB|W:\FUNDS\NSAR.EXH\KSCF\77Q.398|050898
10
N\\SHAREDAT\CORP_ACT\CONTRACT\KEMPER\KSCF\UNDER81
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made this 1st day of August, 1998 between KEMPER
SMALL CAPITALIZATION EQUITY FUND, a Massachusetts business trust
(the "Fund"), and KEMPER DISTRIBUTORS, INC., a Delaware
corporation ("KDI").
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 KDI to act as agent for
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 KDI 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. KDI 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. KDI may also provide some of the above services for the
Fund.
KDI 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. KDI 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. KDI, by separate agreement
with the Fund, may also serve the Fund in other capacities. The
services of KDI to the Fund under this Agreement are not to be
deemed exclusive, and KDI 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,
KDI 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 who may be clients of such
Firms. Such Firms shall at all times be deemed to be independent
contractors retained by KDI and not the Fund.
KDI 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 Fund's organizational documents.
2. KDI 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
KDI 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 prior consent of the Fund. In addition to sales
made by it as agent of the Fund, KDI 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 KDI 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 KDI as agent shall be retained by KDI as a
commission for its services hereunder. KDI may compensate Firms
for sales of shares at the commission levels provided in the
Fund's prospectus from time to time. KDI may pay other
commissions, fees or concessions to Firms, any may pay them to
others in its discretion, in such amounts as KDI shall determine
from time to time. KDI shall be entitled to receive and retain
any applicable contingent deferred sales charge as described in
the Fund's prospectus. KDI shall also receive any distribution
services fee payable by the Fund as provided in the Fund's
Amended and Restated 12b-1 Plan, as amended from time to time
(the "Plan").
KDI 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 KDI 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 KDI shall reasonably request and as
the Securities and Exchange Commission shall permit to be so
registered. Notwithstanding any other provision 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 KDI 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 KDI from
time to time such information with respect to the Fund and its
shares as KDI may reasonably request for use in connection with
the sale of shares of the Fund.
5. KDI 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,
KDI 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 KDI may specify.
6. KDI shall order shares of the Fund from the Fund only
to the extent that it shall have received purchase orders
therefor. KDI 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 Board member or officer of the Fund or to
any officer or Board member of KDI 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.
KDI, 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, KDI 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 KDI or any employee,
representative or agent of KDI. KDI will observe and be bound by
all the provisions of the Fund's organizational documents (and of
any fundamental policies adopted by the Fund pursuant to the
Investment Company Act of 1940 (the "Investment Company Act"),
notice of which shall have been given to KDI) which at the time
in any way require, limit, restrict, prohibit or otherwise
regulate any action on the part of KDI hereunder.
7. The Fund shall assume and pay all charges and expenses
of its operations not specifically assumed or otherwise to be
provided by KDI under this Agreement or the Plan. 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. KDI will pay all expenses (other
than expenses which one or more Firms may bear pursuant to any
agreement with KDI) 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 KDI under the conditions
herein specified. No transfer taxes, if any, which may be
payable in connection with the issue or delivery or shares sold
as herein contemplated or of the certificates for such shares
shall be borne by the Fund, and KDI will indemnify and hold
harmless the Fund against liability for all such transfer taxes.
8. This Agreement shall become effective on the date
hereof and shall continue until March 1, 1999; 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.
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 KDI 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 members who are not
interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan, this Agreement,
or in any other agreement related to the Plan, or (ii) a majority
of the outstanding voting securities of such series or class.
Without prejudice to any other remedies of the Fund, the Fund may
terminate this Agreement at any time immediately upon KDI's
failure to fulfill any of its obligations hereunder.
All material amendments to this Agreement must be approved
by a vote of a majority of the Board, and of the Board members
who are not interested persons of the Fund and who have no direct
or indirect financial interest in the operation of the Plan, this
Agreement or in any other agreement related to the Plan, cast in
person at a meeting called for such purpose.
The terms "assignment," "interested person" and "vote of a
majority of the outstanding voting securities" shall have the
meanings set forth in the Investment Company Act and the rules
and regulations thereunder.
KDI shall receive such compensation for its distribution
services as set forth in the Plan. Termination of this Agreement
shall not affect the right of KDI to receive payments on any
unpaid balance of the compensation earned prior to such
termination, as set forth in the Plan.
9. KDI 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. KDI will
furnish the Fund with copies of all such material.
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. 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 KDI 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,
KDI 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.
13. This Agreement shall be construed in accordance with
applicable federal law and with the laws of The Commonwealth of
Massachusetts.
14. 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.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the Fund and KDI have caused this
Agreement to be executed as of the day and year first above
written.
KEMPER SMALL CAPITALIZTION
EQUITY FUND
By:
Title:
ATTEST:
Title:
KEMPER DISTRIBUTORS, INC.
By:
Title:
ATTEST:
Title:
N\\SHAREDAT\CORP_ACT\CONTRACT\KEMPER\KSCF\UNDER97
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made this 7th day of September, 1998 between
KEMPER SMALL CAPITALIZATION EQUITY FUND, a Massachusetts business
trust (the "Fund"), and KEMPER DISTRIBUTORS, INC., a Delaware
corporation ("KDI").
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 KDI to act as agent for
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 KDI 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. KDI 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. KDI may also provide some of the above services for the
Fund.
KDI 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. KDI 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. KDI, by separate agreement
with the Fund, may also serve the Fund in other capacities. The
services of KDI to the Fund under this Agreement are not to be
deemed exclusive, and KDI 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,
KDI 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 who may be clients of such
Firms. Such Firms shall at all times be deemed to be independent
contractors retained by KDI and not the Fund.
KDI 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 Fund's organizational documents.
2. KDI 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
KDI 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 prior consent of the Fund. In addition to sales
made by it as agent of the Fund, KDI 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 KDI 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 KDI as agent shall be retained by KDI as a
commission for its services hereunder. KDI may compensate Firms
for sales of shares at the commission levels provided in the
Fund's prospectus from time to time. KDI may pay other
commissions, fees or concessions to Firms, any may pay them to
others in its discretion, in such amounts as KDI shall determine
from time to time. KDI shall be entitled to receive and retain
any applicable contingent deferred sales charge as described in
the Fund's prospectus. KDI shall also receive any distribution
services fee payable by the Fund as provided in the Fund's
Amended and Restated 12b-1 Plan, as amended from time to time
(the "Plan").
KDI 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 KDI 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 KDI shall reasonably request and as
the Securities and Exchange Commission shall permit to be so
registered. Notwithstanding any other provision 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 KDI 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 KDI from
time to time such information with respect to the Fund and its
shares as KDI may reasonably request for use in connection with
the sale of shares of the Fund.
5. KDI 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,
KDI 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 KDI may specify.
6. KDI shall order shares of the Fund from the Fund only
to the extent that it shall have received purchase orders
therefor. KDI 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 Board member or officer of the Fund or to
any officer or Board member of KDI 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.
KDI, 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, KDI 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 KDI or any employee,
representative or agent of KDI. KDI will observe and be bound by
all the provisions of the Fund's organizational documents (and of
any fundamental policies adopted by the Fund pursuant to the
Investment Company Act of 1940 (the "Investment Company Act"),
notice of which shall have been given to KDI) which at the time
in any way require, limit, restrict, prohibit or otherwise
regulate any action on the part of KDI hereunder.
7. The Fund shall assume and pay all charges and expenses
of its operations not specifically assumed or otherwise to be
provided by KDI under this Agreement or the Plan. 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. KDI will pay all expenses (other
than expenses which one or more Firms may bear pursuant to any
agreement with KDI) 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 KDI under the conditions
herein specified. No transfer taxes, if any, which may be
payable in connection with the issue or delivery or shares sold
as herein contemplated or of the certificates for such shares
shall be borne by the Fund, and KDI will indemnify and hold
harmless the Fund against liability for all such transfer taxes.
8. This Agreement shall become effective on the date
hereof and shall continue until March 1, 1999; 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.
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 KDI 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 members who are not
interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan, this Agreement,
or in any other agreement related to the Plan, or (ii) a majority
of the outstanding voting securities of such series or class.
Without prejudice to any other remedies of the Fund, the Fund may
terminate this Agreement at any time immediately upon KDI's
failure to fulfill any of its obligations hereunder.
All material amendments to this Agreement must be approved
by a vote of a majority of the Board, and of the Board members
who are not interested persons of the Fund and who have no direct
or indirect financial interest in the operation of the Plan, this
Agreement or in any other agreement related to the Plan, cast in
person at a meeting called for such purpose.
The terms "assignment," "interested person" and "vote of a
majority of the outstanding voting securities" shall have the
meanings set forth in the Investment Company Act and the rules
and regulations thereunder.
KDI shall receive such compensation for its distribution
services as set forth in the Plan. Termination of this Agreement
shall not affect the right of KDI to receive payments on any
unpaid balance of the compensation earned prior to such
termination, as set forth in the Plan.
9. KDI 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. KDI will
furnish the Fund with copies of all such material.
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. 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 KDI 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,
KDI 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.
13. This Agreement shall be construed in accordance with
applicable federal law and with the laws of The Commonwealth of
Massachusetts.
14. 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.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the Fund and KDI have caused this
Agreement to be executed as of the day and year first above
written.
KEMPER SMALL CAPITALIZTION
EQUITY FUND
By:
Title:
ATTEST:
Title:
KEMPER DISTRIBUTORS, INC.
By:
Title:
ATTEST:
Title:
