SUB-ITEM 77M
MERGERS
SHORT-TERM INVESTMENTS TRUST
On July 30, 2003, the Board of Trustees of Short-Term Investments Co. ("STIC"),
a Maryland corporation, approved an Agreement and Plan of Reorganization (the
"Agreement") that provided for the restructuring of Cash Assts Portfolio,
Liquid Assets Portfolio and Prime Portfolio (now known as STIC Prime Portfolio,
after the Reorganization,) series portfolios of STIC, as new series portfolios
(the "New Portfolios") of Short-Term Investments Trust ("STIT") an existing
open-end management investment company organized as a Delaware statutory trust
(the "Reorganization"). The Agreement was approved by the shareholders of STIC
at a Special Meeting of STIC shareholders held on October 21, 2003. Pursuant to
the Agreement, on November 4, 2003, the New Portfolios succeeded to the assets
and assumed the liabilities of STIC portfolios. The value of each New
Portfolios shareholder's account with STIT immediately after the Reorganization
was the same as the value of such shareholder's account with STIC immediately
prior to the Reorganization. The Reorganization has been structured as a
tax-free transaction. No sales charges were imposed in connection with the
Reorganization. STIC intends to file a Form N-8F with the Securities and
Exchange Commission to deregister as an investment company.
For a more detailed discussion on the Reorganization, please see the attached
proxy statement (attached hereto as Attachment A).
ATTACHMENT A
SHORT-TERM INVESTMENTS CO. TAX-FREE INVESTMENTS CO.
CASH ASSETS PORTFOLIO CASH RESERVE PORTFOLIO
LIQUID ASSETS PORTFOLIO
PRIME PORTFOLIO
August 25, 2002
Dear Shareholder:
As you may be aware, AMVESCAP PLC, the parent company of your Fund's
investment advisor, has undertaken an integration initiative for its North
American mutual fund operations. In the first phase of the integration
initiative, A I M Distributors, Inc. became the sole distributor for all retail
INVESCO Funds and is now distributor for all retail INVESCO Funds and the retail
AIM Funds.
As a result of this integration initiative, the independent directors of
your Board of Directors believe that your interests would best be served if the
AIM Funds and the INVESCO Funds had a unified board of directors/trustees. The
attached proxy statement seeks your vote in favor of the persons nominated to
serve as directors.
The integration initiative also calls for changing the organizational
structure of the AIM Funds and the INVESCO Funds. To accomplish this goal,
AMVESCAP PLC has recommended that all INVESCO Funds and AIM Funds organized as
Maryland corporations change their form and state of organization to Delaware
statutory trusts. Your Board has approved redomesticating your Fund as a series
of an existing Delaware statutory trust. The attached proxy statement seeks your
approval of this redomestication.
Your vote is important. Please take a moment after reviewing the enclosed
materials to sign and return your proxy card in the enclosed postage paid return
envelope. If you attend the meeting, you may vote your shares in person. If you
expect to attend the meeting in person, or have questions, please notify us by
calling (000) 000-0000. If we do not hear from you after a reasonable amount of
time, you may receive a telephone call from our proxy solicitor, Xxxxxxxxx
Shareholder Communications Inc., reminding you to vote your shares.
Sincerely,
-s- XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx
Chairman and President
SHORT-TERM INVESTMENTS CO.
CASH ASSETS PORTFOLIO
LIQUID ASSETS PORTFOLIO
PRIME PORTFOLIO
TAX-FREE INVESTMENTS CO.
CASH RESERVE PORTFOLIO
00 XXXXXXXX XXXXX, XXXXX 000 XXXXXXX, XXXXX 00000-0000
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON OCTOBER 21, 2003
To the Shareholders of each of the series portfolios of Short-Term
Investments Co. and Tax-Free Investments Co. (each, a "Company," and together,
the "Companies") listed above:
We cordially invite you to attend our Special Meetings of Shareholders to:
1. Elect 16 directors to the Board of Directors of each Company, each of whom
will serve until his or her successor is elected and qualified.
2. Approve an Agreement and Plan of Reorganization which provides for the
redomestication of each series portfolio of Short-Term Investments Co. as new
series portfolios of Short-Term Investments Trust, an existing Delaware
statutory trust and, in connection therewith, the sale of all of Short-Term
Investments Co.'s assets and the dissolution of Short-Term Investments Co. as a
Maryland corporation.
3. Approve an Agreement and Plan of Reorganization which provides for the
redomestication of Tax-Free Investments Co. as a Delaware statutory trust and,
in connection therewith, the sale of all of Tax-Free Investments Co.'s assets
and the dissolution of Tax-Free Investments Co. as a Maryland corporation.
4. Transact any other business, not currently contemplated, that may properly
come before the Special Meetings, in the discretion of the proxies or their
substitutes.
We are holding the Special Meetings at 00 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000-1173 on October 21, 2003, at 3:00 p.m., Central Time.
Shareholders of record of one or more of the Funds as of the close of
business on July 25, 2003 are entitled to notice of, and to vote at, the
applicable Special Meetings or any adjournment of the Special Meetings.
WE REQUEST THAT YOU EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
THE ACCOMPANYING PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF
EACH COMPANY. YOUR VOTE IS IMPORTANT FOR THE PURPOSE OF ENSURING A QUORUM AT THE
SPECIAL MEETINGS. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS
EXERCISED BY EXECUTING AND SUBMITTING A REVISED PROXY, BY GIVING WRITTEN NOTICE
OF REVOCATION TO THE APPLICABLE COMPANY'S SECRETARY OR BY VOTING IN PERSON AT
THE SPECIAL MEETINGS.
-S- XXXXX X. XXXXXX
XXXXX X. XXXXXX
Secretary
August 25, 2003
SHORT-TERM INVESTMENTS CO.
CASH ASSETS PORTFOLIO
LIQUID ASSETS PORTFOLIO
PRIME PORTFOLIO
TAX-FREE INVESTMENTS CO.
CASH RESERVE PORTFOLIO
00 Xxxxxxxx Xxxxx, Xxxxx 000 Xxxxxxx, Xxxxx 00000-1173
--------------------------------------------------------------------------------
SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON OCTOBER 21, 2003
--------------------------------------------------------------------------------
INTRODUCTION
Proposals 1, 2 and 3 that you are being asked to vote on relate to or
result from an integration initiative announced on March 27, 2003, by AMVESCAP
PLC ("AMVESCAP"), the parent company of A I M Advisors, Inc. ("AIM") and INVESCO
Funds Group, Inc. ("INVESCO"), with respect to its North American mutual fund
operations. The primary components of AMVESCAP's integration initiative are:
- Using a single distributor for all AMVESCAP mutual funds in the United
States, with A I M Distributors, Inc. ("AIM Distributors"), the
distributor for the retail mutual funds advised by AIM (the "AIM Funds"),
replacing INVESCO Distributors, Inc. as the distributor for the retail
mutual funds advised by INVESCO (the "INVESCO Funds") effective July 1,
2003.
- Integrating back office support and creating a single platform for back
office support of AMVESCAP's mutual fund operations in the United States,
including such support services as transfer agency and information
technology, with the result that shares of the AIM Funds and shares of
the INVESCO Funds generally will be able to be exchanged for shares of
the same or a similar class of each other.
- Rationalizing and streamlining the various AIM Funds and INVESCO Funds,
thereby reducing the number of smaller and less efficient funds that
compete for limited shareholder assets and consolidating certain funds
having similar investment objectives and strategies.
- Rationalizing the contractual arrangements for the provision of
investment advisory and administrative services to the AIM Funds and the
INVESCO Funds, with the objective of having AIM become the investment
advisor and administrator for each INVESCO Fund.
1
- Simplifying the organizational structure of the AIM Funds and the INVESCO
Funds so that they are all organized as Delaware statutory trusts, using
as few entities as practicable. Proposals 2 and 3 relate to this
component of AMVESCAP's integration initiative.
In considering the integration initiative proposed by AMVESCAP, the
directors/trustees of the AIM Funds and the directors of the INVESCO Funds who
are not "interested persons" (as defined in the Investment Company Act of 1940
(the "1940 Act")) of the Funds or their advisors determined that the
shareholders of both the AIM Funds and the INVESCO Funds would benefit if one
set of directors/trustees was responsible for overseeing the operation of both
the AIM Funds and the INVESCO Funds and the services provided by AIM, INVESCO
and their affiliates. Accordingly, these directors/trustees agreed to combine
the separate boards and create a unified board of directors/trustees. Proposal 1
relates to the election of directors of your Fund.
INFORMATION ABOUT THE SPECIAL MEETINGS AND VOTING
PROXY STATEMENT
We are sending you this Proxy Statement and the enclosed proxy card on
behalf of the series portfolios of Short-Term Investments Co. and Tax-Free
Investments Co. (each a "Company," and together, the "Companies") listed above
(each a "Fund," and together, the "Funds") because the Boards of Directors of
the Companies (the "Boards") are soliciting your proxy to vote at the Special
Meetings of Shareholders and at any adjournments of the Special Meetings
(collectively, the "Special Meetings"). This Proxy Statement gives you
information about the business to be conducted at the Special Meetings. However,
you do not need to attend a Special Meeting to vote your shares. Instead, you
may simply complete, sign and return the enclosed proxy card.
The Companies intend to mail this Proxy Statement, the enclosed Notice of
Special Meetings of Shareholders and the enclosed proxy card on or about August
25, 2003 to all shareholders entitled to vote. Shareholders of record of any
class of a Fund as of the close of business on July 25, 2003 (the "Record Date")
are entitled to vote at the applicable Special Meeting. The number of shares
outstanding of each class of each Fund on the Record Date can be found in
Exhibit A. Each share of a Fund that you own entitles you to one vote on each
proposal set forth in the table below that applies to the Fund (a fractional
share has a fractional vote).
We have previously sent to shareholders the most recent annual report for
their Fund, including financial statements, and the most recent semiannual
report succeeding the annual report, if any. If you have not received such
report(s) or would like to receive an additional copy, please contact A I M Fund
Services,
2
Inc., P.O. Box 4739, Houston, Texas 00000-0000, or call (000) 000-0000. We will
furnish such report(s) free of charge.
PROPOSAL TABLE
The following table summarizes each proposal to be presented at the Special
Meetings and the Funds whose shareholders the Boards are soliciting with respect
to each proposal:
PROPOSAL AFFECTED FUNDS
-------- --------------
1. Electing directors........................... All Funds
2. Approving an Agreement and Plan of
Reorganization to redomesticate each series
portfolio of Short-Term Investments Co. as a Cash Assets Portfolio
new series portfolio of an existing Delaware Liquid Assets Portfolio
statutory trust.............................. Prime Portfolio
3. Approving an Agreement and Plan of
Reorganization to redomesticate Tax-Free
Investments Co. as a Delaware statutory
trust........................................ Cash Reserve Portfolio
4. Considering other matters.................... All Funds
TIME AND PLACE OF SPECIAL MEETINGS
We are holding the Special Meetings at 00 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000-1173 on October 21, 2003, at 3:00 p.m., Central Time.
VOTING IN PERSON
If you do attend a Special Meeting and wish to vote in person, we will
provide you with a ballot prior to the vote. However, if your shares are held in
the name of your broker, bank or other nominee, you must bring a letter from the
nominee indicating that you are the beneficial owner of the shares on the Record
Date and authorizing you to vote. Please call the applicable Company at (800)
952-3502 if you plan to attend a Special Meeting.
VOTING BY PROXY
Whether you plan to attend a Special Meeting or not, we urge you to
complete, sign and date the enclosed proxy card and to return it promptly in the
envelope provided. Returning the proxy card will not affect your right to attend
a Special Meeting and vote.
If you properly fill in and sign your proxy card and send it to us in time
to vote at the Special Meetings, your "proxy" (the individual named on your
proxy card) will vote your shares as you have directed. If you sign your proxy
card but do not make specific choices, your proxy will vote your shares as
recommended
3
by the Board of your Company as follows and in accordance with management's
recommendation on other matters:
- FOR the election of all 16 nominees for directors of your Company.
- FOR the proposal to approve an
Agreement and Plan of Reorganization (the
"STIC Plan") to redomesticate each series portfolio of Short-Term
Investments Co. as a new series portfolio of an existing Delaware
statutory trust.
- FOR the proposal to approve an
Agreement and Plan of Reorganization (the
"TFIC Plan") to redomesticate Tax-Free Investments Co. as a Delaware
statutory trust.
Your proxy will have the authority to vote and act on your behalf at any
adjournment of the Special Meetings.
If you authorize a proxy, you may revoke it at any time before it is
exercised by sending in another proxy card with a later date or by notifying the
applicable Company's Secretary in writing to the address of such Company set
forth on the cover page of this Proxy Statement before the Special Meetings that
you have revoked your proxy. In addition, although merely attending a Special
Meeting will not revoke your proxy, if you are present at a Special Meeting you
may withdraw your proxy and vote in person. Shareholders may also transact any
other business not currently contemplated that may properly come before the
Special Meetings in the discretion of the proxies or their substitutes.
QUORUM REQUIREMENT AND ADJOURNMENT
A quorum of shareholders is necessary to hold a valid meeting. A quorum
will exist for Proposals 1, 2 and 3 for a particular Company if shareholders
entitled to vote one-third of the issued and outstanding shares of such Company
on the Record Date are present at the Special Meetings in person or by proxy.
Under the rules applicable to broker-dealers, if your broker holds your
shares in its name, the broker will be entitled to vote your shares even if it
has not received instructions from you. A "broker non-vote" occurs when a broker
has not received voting instructions from a shareholder and is barred from
voting the shares without shareholder instructions because the proposal is
non-routine.
Abstentions and broker non-votes will count as shares present at the
Special Meetings for purposes of establishing a quorum.
If a quorum is not present at a Special Meeting or a quorum is present but
sufficient votes to approve a Proposal are not received, the persons named as
proxies may propose one or more adjournments of the Special Meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Special
Meeting in person or by proxy. The persons named as proxies will vote those
proxies that they are
4
entitled to vote FOR a Proposal in favor of such an adjournment and will vote
those proxies required to be voted AGAINST such Proposal against such an
adjournment. A shareholder vote may be taken on a Proposal in this Proxy
Statement prior to any such adjournment if sufficient votes have been received
and it is otherwise appropriate.
VOTE NECESSARY TO APPROVE EACH PROPOSAL
PROPOSAL 1. The affirmative vote of a plurality of votes cast by the
shareholders of a Company is necessary to elect directors of that Company at a
Special Meeting, meaning that the director nominee with the most affirmative
votes for a particular slot is elected for that slot. In an uncontested election
for directors, the plurality requirement is not a factor. Abstentions will not
count as votes cast and will have no effect on the outcome of this proposal. We
expect that brokers will be entitled to vote on this proposal, but any broker
non-vote will have no effect on the outcome of this proposal.
PROPOSAL 2. Approval of Proposal 2 requires the affirmative vote of a
majority of the issued and outstanding shares of Short-Term Investments Co. at
its Special Meeting. Abstentions and broker non-votes are counted as present but
are not considered votes cast at the Special Meeting. As a result, they have the
same effect as a vote against the STIC Plan because approval of the STIC Plan
requires the affirmative vote of a percentage of the outstanding voting
securities.
PROPOSAL 3. Approval of Proposal 3 requires the affirmative vote of a
majority of the issued and outstanding shares of Tax-Free Investments Co. at its
Special Meeting. Abstentions and broker non-votes are counted as present but are
not considered votes cast at the Special Meeting. As a result, they have the
same effect as a vote against the TFIC Plan because approval of the TFIC Plan
requires the affirmative vote of a percentage of the outstanding voting
securities.
PROXY SOLICITATION
The Companies have engaged the services of Xxxxxxxxx Shareholder
Communications Inc. ("Solicitor") to assist in the solicitation of proxies for
the Special Meetings. Solicitor's costs are estimated to be approximately
$12,400. The Companies expect to solicit proxies principally by mail, but the
Companies or Solicitor may also solicit proxies by telephone, facsimile or
personal interview. The Companies' officers will not receive any additional or
special compensation for any such solicitation. Each Fund will pay for its
proportionate share of the cost of soliciting proxies, the printing and mailing
of this Proxy Statement, the attached Notice of Special Meetings of
Shareholders, the enclosed proxy card, and any further solicitation.
5
OTHER MATTERS
Management does not know of any matters to be presented at the Special
Meetings other than those discussed in this Proxy Statement. If any other
matters properly come before the Special Meetings, the shares represented by
proxies will be voted with respect thereto in accordance with management's
recommendation.
SHAREHOLDER PROPOSALS
As a general matter, the Funds do not hold regular meetings of
shareholders. If you wish to submit a proposal for consideration at a meeting of
shareholders of your Fund, you should send such proposal to the applicable
Company at the address set forth on the first page of this Proxy Statement. To
be considered for presentation at a meeting of shareholders, the applicable
Company must receive proposals a reasonable time before proxy materials are
prepared for the meeting. Your proposal also must comply with applicable law.
For a discussion of procedures that you must follow if you want to propose
an individual for nomination as a director, please refer to the section of this
Proxy Statement entitled "Proposal 1 -- Committees of the Board -- Committee on
Directors/Trustees."
PROPOSAL 1 -- ELECTION OF DIRECTORS
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 1?
Proposal 1 applies to the shareholders of all Funds.
BACKGROUND
In considering the integration initiative proposed by AMVESCAP, the
independent directors/trustees of the AIM Funds and the independent directors of
the INVESCO Funds determined that the shareholders of all the AIM Funds and the
INVESCO Funds would benefit if a unified board of directors/trustees was
responsible for overseeing the operation of both the AIM Funds and the INVESCO
Funds and the services provided by AIM, INVESCO and their affiliates.
Accordingly, the Boards of Directors/Trustees of the AIM Funds and the Boards of
Directors of the INVESCO Funds agreed to combine the separate boards and create
a unified board of directors/trustees.
STRUCTURE OF THE BOARD OF DIRECTORS
Each Board currently consists of 12 persons. Ten of the current directors
are "independent," meaning they are not "interested persons" of the Companies
within the meaning of the 1940 Act. Two of the current directors are "interested
persons" because of their business and financial relationships with the Compa-
6
xxxx and AIM, each Company's investment advisor, and/or AIM's parent, AMVESCAP.
NOMINEES FOR DIRECTORS
Each Company's Committee on Directors/Trustees (which consists solely of
independent directors) has approved the nomination of each of the 12 current
directors, as set forth below, to serve as director until his or her successor
is elected and qualified. In addition, each Company's Committee on Directors/
Trustees has approved the nomination of four new nominees, as set forth below,
to serve as director until his or her successor is elected and qualified. These
four new nominees were nominated to effect the proposed combination of the
Boards of Directors/Trustees of the AIM Funds and the Boards of Directors of the
INVESCO Funds.
Each nominee who is a current director serves as a director or trustee of
the 17 registered investment companies comprising the AIM Funds. Each nominee
who is a current director oversees 86 portfolios that comprise the AIM Funds.
The business address of each nominee who is a current director is 00 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000.
Each new nominee serves as a director of ten registered investment
companies comprising the INVESCO Funds. Each new nominee currently oversees 46
portfolios which comprise the INVESCO Funds. The business address of each new
nominee is 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000.
If elected, each nominee would oversee a total of 27 registered investment
companies currently comprising 132 portfolios.
7
NOMINEES WHO CURRENTLY ARE INDEPENDENT DIRECTORS
DIRECTOR PRINCIPAL OCCUPATION(S) DURING OTHER DIRECTORSHIP(S)
NAME AND YEAR OF BIRTH SINCE PAST 5 YEARS HELD
---------------------- -------- ------------------------------ ---------------------
Xxxxx X. Xxxxxx -- 1939....... 2001(1) Of Counsel, law firm of Xxxxx Xxxxxxx Funds, Inc.
& XxXxxxxx (registered
investment company)
Xxxxx X. Xxxxxxxx -- 1944..... 1993(2) Chairman, Xxxxxxxx Technology ACE Limited
1992(3) Associates (technology (insurance company);
consulting company) and Captaris, Inc.
Captaris, Inc. (unified (unified messaging
messaging provider) provider)
Xxxxxx X. Xxxxxx -- 1941...... 2000(1) Director of a number of public Cortland Trust, Inc.
and private business (Chairman)
corporations, including the (registered
Boss Group, Ltd. (private investment company);
investment and management) and Annuity and Life Re
Magellan Insurance Company; (Holdings), Ltd.
formerly, President, Chief (insurance company)
Executive Officer and
Director, Volvo Group North
America, Inc.; Senior Vice
President, AB Volvo and
director of various affiliated
Volvo Group companies
Xxxxxx X. Xxxx, Xx. -- 1935... 1998(1) Formerly, Chairman, Mercantile None
Mortgage Corp.; President and
Chief Operating Officer,
Mercantile-Safe Deposit &
Trust Co.; and President,
Mercantile Bankshares Corp.
Xxxx X. Xxxxxx -- 1952........ 1997(1) Chief Executive Officer, Administaff
Twenty First Century Group,
Inc. (government affairs
company) and Xxxxxx Xxxxxx LP
Xxxx Xxxxxxxxxx -- 1937....... 1993(2) Partner, law firm of Xxxxxx Xxxxxxxx Trust, Inc.
1992(3) Xxxxx Xxxxxxxx & Xxxxxxx LLP (registered
investment company)
Xxxxx Xxxxxx-Xxxxx -- 1950.... 1998(1) Formerly, Chief Executive None
Officer, YWCA of the USA
Xxxxx X. Xxxxxxx -- 1942...... 1993(2) Partner, law firm of Xxxxxxx & None
1992(3) Xxxxxx
Xxxx X. Xxxxxxx -- 1935....... 2001(1) Retired None
Xxxxx X. Xxxxx -- 1939........ 1993(2) Executive Vice President, None
1992(3) Development and Operations,
Xxxxx Interests Limited
Partnership (real estate
development company)
---------------
(1) Denotes service as director of both Short-Term Investments Co. and Tax-Free
Investments Co.
(2) Denotes service as director of Short-Term Investments Co.
(3) Denotes service as director of Tax-Free Investments Co.
8
NOMINEES WHO CURRENTLY ARE INTERESTED PERSONS
NAME, YEAR OF BIRTH AND
POSITION(S) HELD WITH THE DIRECTOR PRINCIPAL OCCUPATION(S) DURING OTHER DIRECTORSHIP(S)
COMPANIES SINCE PAST 5 YEARS HELD
------------------------- -------- ------------------------------ ---------------------
Xxxxxx X. Xxxxxx(1) -- 1946... 1994(2) Director and Chairman, A I M None
Chairman and President 1977(3) Management Group Inc.
(financial services holding
company); Director and Vice
Chairman, AMVESCAP PLC (parent
of AIM and a global investment
management firm) and Chairman,
AMVESCAP PLC -- AIM Division;
formerly, President and Chief
Executive Officer, A I M
Management Group Inc.;
Director, Chairman and
President, A I M Advisors,
Inc. (registered investment
advisor); Director and
Chairman, A I M Capital
Management, Inc. (registered
investment advisor), A I M
Distributors, Inc. (registered
broker dealer), A I M Fund
Services, Inc. (registered
transfer agent), and Fund
Management Company (registered
broker dealer); and Chief
Executive Officer, AMVESCAP
PLC -- Managed Products
---------------
(1) Xx. Xxxxxx is considered an interested person of the Companies because he is
a director of AMVESCAP PLC, parent of the advisor to, and principal
underwriter of, the Companies.
(2) Denotes service as director of Short-Term Investments Co.
(3) Denotes service as director of Tax-Free Investments Co.
9
NOMINEES WHO CURRENTLY ARE INTERESTED PERSONS -- (CONTINUED)
NAME, YEAR OF BIRTH AND
POSITION(S) HELD WITH THE DIRECTOR PRINCIPAL OCCUPATION(S) DURING OTHER DIRECTORSHIP(S)
COMPANIES SINCE PAST 5 YEARS HELD
------------------------- -------- ------------------------------ ---------------------
Xxxx X. 2003(2) Director, President and Chief Director of each of
Xxxxxxxxxx(1) -- 1951........ Executive Officer, A I M the ten INVESCO Funds
Executive Vice President Management Group Inc.;
Director, Chairman and
President, A I M Advisors,
Inc. (registered investment
advisor); Director, A I M
Distributors, Inc. (registered
broker dealer); and Chief
Executive Officer of the AIM
Division of AMVESCAP PLC
(2003-present); formerly,
Chief Executive Officer,
Managed Products Division,
AMVESCAP PLC (2001-2002);
Chairman of the Board
(1998-2002), President
(1998-2002) and Chief
Executive Officer (1998-2002)
of INVESCO Funds Group, Inc.
(registered investment
advisor) and INVESCO
Distributors, Inc. (registered
broker dealer); Chief
Operating Officer and Chairman
of the Board of INVESCO Global
Health Sciences Fund; Chairman
and Chief Executive Officer of
NationsBanc Advisors, Inc.;
and Chairman of NationsBanc
Investments, Inc.
---------------
(1) Xx. Xxxxxxxxxx is considered an interested person of the Companies because
he is an officer and a director of the advisor to, and a director of the
principal underwriter of, the Companies.
(2) Denotes service as director of both Short-Term Investments Co. and Tax-Free
Investments Co.
10
NEW NOMINEES WHO WILL BE INDEPENDENT DIRECTORS
PRINCIPAL OCCUPATION(S) DURING
NAME AND YEAR OF BIRTH PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
---------------------- ------------------------------ ----------------------------
Xxx X. Xxxxx -- 1936........... Consultant (2000-present); None
formerly, President and Chief
Executive Officer (1988-2000)
of AMC Cancer Research Center,
Denver, Colorado; until mid-
December 1988, Vice Chairman
of the Board of First Columbia
Financial Corporation,
Englewood, Colorado; formerly,
Chairman of the Board and
Chief Executive Officer of
First Columbia Financial
Corporation.
Xxxxx X. Xxxxx -- 1942......... Co-President and Founder of None
Green, Xxxxxxx & Bunch Ltd.,
Denver, Colorado
(1988-present) (investment
banking firm); Director,
Policy Studies, Inc. and Xxx
Xxxxxx Insurance Corporation;
formerly, General Counsel and
Director of Xxxxxxxxx & Co.,
Denver, Colorado; and
formerly, Chairman and
Managing Partner, law firm of
Xxxxx, Xxxxxx & Xxxxxx,
Denver, Colorado.
Xxxxxx X. Xxxxx -- 1933........ Chairman of Lawsuit Resolution General Chemical Group,
Services, San Diego, Inc., Hampdon, New Hampshire
California (1987-present); (1996-present), Wheelabrator
formerly, Associate Justice of Technologies, Inc. (waste
the California Court of management company), Xxxxxx
Appeals; and Of Counsel, law Scientific, Inc., Henley
firm of Xxxxxx & Xxxxxxx, San Manufacturing, Inc.
Diego, California (1987-1997). (laboratory supplies), and
California Coastal
Properties, Inc.
Xxxxx Xxxx, Ph.D. -- 1942...... Retired; formerly, Chairman of Synergen Inc. (biotechnology
the Board (1987-1994), Chief company) (since
Executive Officer (1982-1989 incorporation in 1982) and
and 1993-1994) and President Isis Pharmaceuticals, Inc.
(1982-1989) of Synergen Inc.
(biotechnology company); and
formerly, Trustee of INVESCO
Global Health Sciences Fund.
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THE BOARDS' RECOMMENDATION ON PROPOSAL 1
Your Board, including the independent directors of each Board, unanimously
recommends that you vote "FOR" these 16 nominees.
COMMITTEES OF THE BOARDS
Each Board has five standing committees: an Audit Committee, an Investments
Committee, a Valuation Committee, a Capitalization Committee and a Committee on
Directors/Trustees. These Committees will remain as part of the combined board.
Audit Committee
Each Audit Committee is comprised entirely of independent directors. The
current members of each Audit Committee are Messrs. Xxxxx X. Xxxxxx, Xxxxx X.
Xxxxxxxx, Xxxxxx X. Xxxxxx (Vice Chair), Xxxxxx X. Xxxx, Xx. (Chair), Xxxx X.
Xxxxxx, Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxx, Xx. Xxxxx Xxxxxx-Xxxxx and Xxxx Xxxx
X. Xxxxxxx. Each Audit Committee is responsible for: (i) the appointment,
compensation and oversight of any independent auditors employed by each Fund
(including resolution of disagreements between each Fund's management and the
auditor regarding financial reporting) for the purpose of preparing or issuing
an audit report or related work; (ii) overseeing the financial reporting process
of each Fund; (iii) monitoring the process and the resulting financial
statements prepared by management to promote accuracy of financial reporting and
asset valuation; and (iv) pre-approving permissible non-audit services that are
provided to each Fund by its independent auditors.
Capitalization Committee
The current members of each Capitalization Committee are Messrs. Xxxxxx,
Xxxxxx (Chairman) and Xxxxxxx. Each Capitalization Committee is responsible for:
(i) increasing or decreasing the aggregate number of shares of any class of the
applicable Company's stock by classifying and reclassifying such Company's
authorized but unissued shares of common stock, up to such Company's authorized
capital; (ii) fixing the terms of such classified or reclassified shares of
common stock, and (iii) issuing such classified or reclassified shares of common
stock upon the terms set forth in the applicable Fund's prospectus, up to such
Company's authorized capital.
Committee on Directors/Trustees
Each Committee on Directors/Trustees is comprised entirely of independent
directors. The current members of each Committee on Directors/Trustees are
Messrs. Xxxxxx, Xxxxxxxx (Chair), Xxxxxx, Dunn, Fields (Vice Chair), Xxxxxxx and
Xxxxx, Xx. Xxxxxx-Xxxxx and Xxxx Xxxxxxx. Each Committee on Directors/Trustees
is responsible for: (i) nominating persons who are not
12
interested persons of a Company for election or appointment: (a) as additions to
the Board, (b) to fill vacancies which, from time to time, may occur in the
Board and (c) for election by shareholders of the Fund at meetings called for
the election of directors; (ii) nominating persons who are not interested
persons of a Company for selection as members of each committee of the Board,
including, without limitation, the Audit Committee, the Committee on
Directors/Trustees, the Investments Committee and the Valuation Committee, and
to nominate persons for selection as chair and vice chair of each such
committee; (iii) reviewing from time to time the compensation payable to the
independent directors and making recommendations to the Board regarding
compensation; (iv) reviewing and evaluating from time to time the functioning of
the Board and the various committees of the Board; (v) selecting independent
legal counsel to the independent directors and approving the compensation paid
to independent legal counsel; and (vi) approving the compensation paid to
independent counsel and other advisers, if any, to the Audit Committee of a
Company.
Each Committee on Directors/Trustees will consider nominees recommended by
a shareholder to serve as directors, provided: (i) that such person is a
shareholder of record at the time he or she submits such names and is entitled
to vote at the meeting of shareholders at which directors will be elected; and
(ii) that the Committee on Directors/Trustees or the Board, as applicable, shall
make the final determination of persons to be nominated.
Notice procedures set forth in each Company's bylaws require that any
shareholder of a Fund desiring to nominate a director for election at a
shareholder meeting must submit to the applicable Company's Secretary the
nomination in writing not later than the close of business on the later of the
90th day prior to such shareholder meeting or the tenth day following the day on
which public announcement is made of the shareholder meeting and not earlier
than the close of business on the 120th day prior to the shareholder meeting.
The notice must set forth: (i) as to each person whom the shareholder proposes
to nominate for election or reelection as a director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors in an election contest, or is otherwise required, in each
case pursuant to Regulation 14A of the Securities Exchange Act of 1934
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); and (ii) as to the
shareholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination is made: (a) the name and address of such shareholder, as they
appear on the Company's books, and of such beneficial owner; and (b) the number
of shares of each series portfolio of a Company which are owned of record or
beneficially by such shareholder and such beneficial owner.
13
Investments Committee
The current members of each Company's Investments Committee are Messrs.
Xxxxxx, Xxxxxxxx, Xxxxxx, Dunn, Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx and Xxxxx
(Chair), Xx. Xxxxxx-Xxxxx (Vice Chair) and Xxxx Xxxxxxx. Each Investments
Committee is responsible for: (i) overseeing AIM's investment-related compliance
systems and procedures to ensure their continued adequacy; and (ii) considering
and acting, on an interim basis between meetings of the full Board, on
investment-related matters requiring Board consideration, including dividends
and distributions, brokerage policies and pricing matters.
Valuation Committee
The current members of each Trust's Valuation Committee are Messrs. Xxxx
and Xxxxxxx (Chair), and Xxxx Xxxxxxx (Vice Chair). Each Valuation Committee is
responsible for: (i) periodically reviewing AIM's Procedures for Valuing
Securities ("Procedures"), and making any recommendations to AIM with respect
thereto; (ii) reviewing proposed changes to the Procedures recommended by AIM
from time to time; (iii) periodically reviewing information provided by AIM
regarding industry developments in connection with valuation; (iv) periodically
reviewing information from AIM regarding fair value and liquidity determinations
made pursuant to the Procedures, and making recommendations to the full Board in
connection therewith (whether such information is provided only to the Committee
or to the Committee and the full Board simultaneously); and (v) if requested by
AIM, assisting AIM's internal valuation committee and/or the full Board in
resolving particular valuation anomalies.
BOARD AND COMMITTEE MEETING ATTENDANCE
The following table sets forth information regarding the number of meetings
held by each Board and each committee of each Board for each Company's most
recently completed fiscal year. All of the current directors then serving
attended at least 75% of the meetings of each Board or applicable committee held
during the most recent fiscal year.
AUDIT CAPITALIZATION COMMITTEE ON INVESTMENTS VALUATION
BOARD COMMITTEE COMMITTEE DIRECTORS/ TRUSTEES COMMITTEE COMMITTEE
------ --------- -------------- ------------------- ----------- ---------
Short-Term
Investments Co.(1) eleven six one five four one
Tax-Free Investments
Co.(2) eight seven none five four one
---------------
(1) Information disclosed is for the fiscal year ended August 31, 2002.
(2) Information disclosed is for the fiscal year ended March 31, 2003.
14
DIRECTOR'S COMPENSATION
Each director who is not affiliated with AIM is compensated for his or her
services according to a fee schedule which recognizes the fact that such
director also serves as a director or trustee of other AIM Funds. Each such
director receives a fee, allocated among the AIM Funds for which he or she
serves as a director or trustee, which consists of an annual retainer component
and a meeting fee component.
Information regarding compensation paid or accrued for each director of the
Companies who was not affiliated with AIM during the year ended December 31,
2002 is found in Exhibit B.
RETIREMENT PLAN FOR DIRECTORS
The directors have adopted a retirement plan for the directors of the
Companies who are not affiliated with AIM. The retirement plan includes a
retirement policy as well as retirement benefits for the non-AIM-affiliated
directors.
The retirement policy permits each non-AIM-affiliated directors to serve
until December 31 of the year in which the director turns 72. A majority of the
directors may extend from time to time the retirement date of a director.
Annual retirement benefits are available to each non-AIM-affiliated
director of the Companies and/or the other AIM Funds (each, a "Covered Fund")
who has at least five years of credited service as a director (including service
to a predecessor fund) for a Covered Fund. The retirement benefits will equal
75% of the director's annual retainer paid or accrued by any Covered Fund to
such director during the twelve-month period prior to retirement, including the
amount of any retainer deferred under a separate deferred compensation agreement
between the Covered Fund and the director. The annual retirement benefits are
payable in quarterly installments for a number of years equal to the lesser of
(i) ten or (ii) the number of such director's credited years of service. A death
benefit is also available under the plan that provides a surviving spouse with a
quarterly installment of 50% of a deceased director's retirement benefits for
the same length of time that the director would have received the benefits based
on his or her service. A director must have attained the age of 65 (55 in the
event of death or disability) to receive any retirement benefit. Payment of
benefits under the plan is not secured or funded by the Companies.
DEFERRED COMPENSATION AGREEMENTS
Messrs. Xxxx, Xxxxxx, Xxxxxxxxxx and Xxxxx and Xx. Xxxxxx-Xxxxx (the
"Deferring Directors") have each executed a Deferred Compensation Agreement
(collectively, the "Compensation Agreements"). Pursuant to the Compensation
Agreements, the Deferring Directors have the option to elect to defer receipt of
up to 100% of their compensation payable by the Companies, and such
15
amounts are placed into a deferral account. Currently, the Deferring Directors
have the option to select various AIM Funds in which all or part of their
deferral accounts shall be deemed to be invested. Distributions from the
Deferring Directors' deferral accounts will be paid in cash, generally in equal
quarterly installments over a period of up to ten (10) years (depending on the
Compensation Agreement) beginning on the date selected under the Compensation
Agreement. Each Board, in its sole discretion, may accelerate or extend the
distribution of such deferral accounts after the Deferring Director's retirement
benefits commence under the plan. Each Board, in its sole discretion, also may
accelerate or extend the distribution of such deferral accounts after the
Deferring Director's termination of service as a director of a Company. If a
Deferring Director dies prior to the distribution of amounts in his or her
deferral account, the balance of the deferral account will be distributed to his
or her designated beneficiary. The Compensation Agreements are not funded and,
with respect to the payments of amounts held in the deferral accounts, the
Deferring Directors have the status of unsecured creditors of the Companies and
of each other AIM Fund from which they are deferring compensation.
PROPOSAL 2 -- APPROVAL OF THE STIC PLAN
TO REDOMESTICATE EACH SERIES PORTFOLIO OF
SHORT-TERM INVESTMENTS CO. AS
NEW SERIES PORTFOLIOS OF
SHORT-TERM INVESTMENTS TRUST
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 2?
Proposal 2 applies only to the shareholders of Cash Assets Portfolio,
Liquid Assets Portfolio and Prime Portfolio.
BACKGROUND
Short-Term Investments Co. ("STIC") currently is organized as a Maryland
corporation. AMVESCAP has identified each series portfolio of STIC as
appropriate to be redomesticated as new series portfolios of Short-Term
Investments Trust ("STIT"), an existing open-end management investment company
organized as a statutory trust under the Delaware Statutory Trust Act.
STIC's Board of Directors (the "STIC Board") has approved the STIC Plan,
which provides for a series of transactions to convert each of Cash Assets
Portfolio, Liquid Assets Portfolio and Prime Portfolio (each, a "Current Fund")
to a corresponding series (a "New Fund") of STIT. Under the STIC Plan, each
Current Fund will transfer all of its assets to a corresponding New Fund in
exchange solely for voting shares of beneficial interest in the New Fund and the
New Fund's assumption of all of the Current Fund's liabilities (collectively,
the "STIC Redomestication"). A form of the STIC Plan relating to the proposed
STIC Redomestication is set forth in Appendix I. If Proposal 2 is not approved
16
by the STIC shareholders, STIC will continue to operate as a Maryland
corporation.
Approval of the STIC Plan requires the affirmative vote of a majority of
the issued and outstanding shares of STIC.
The STIC Redomestication is being proposed primarily to provide STIC with
greater flexibility in conducting its business operations. The operations of
each New Fund following the STIC Redomestication will be substantially similar
to those of its predecessor Current Fund. As described below, STIT's Amended and
Restated Agreement and Declaration of Trust, as amended (the "STIT Declaration")
differs from STIC's Articles of Incorporation, and the amendments and
supplements thereto (the "STIC Articles of Incorporation") in certain respects
that are expected to improve STIC's and each Current Fund's operations.
REASONS FOR THE PROPOSED STIC REDOMESTICATION
The STIC Redomestication is being proposed because, as noted above, AIM and
the STIC Board believe that the Delaware statutory trust organizational form
offers a number of advantages over the Maryland corporate organizational form.
As a result of these advantages, the Delaware statutory trust organizational
form has been increasingly used by mutual funds, including the majority of the
AIM Funds. STIT, like STIC, will operate as an open-end management investment
company registered with the Securities and Exchange Commission (the "SEC") under
the 1940 Act.
The Delaware statutory trust organizational form offers greater flexibility
than the Maryland corporate form. A Maryland corporation is governed by the
detailed requirements imposed by Maryland corporate law and by the terms of its
articles of incorporation. A Delaware statutory trust is subject to fewer
statutory requirements. STIT is governed primarily by the terms of the STIT
Declaration. In particular, STIT has greater flexibility to conduct business
without the necessity of engaging in expensive proxy solicitations to
shareholders. For example, under Maryland corporate law, amendments to the STIC
Articles of Incorporation would typically require shareholder approval. Under
Delaware law, unless the Declaration of Trust of a Delaware statutory trust
provides otherwise, amendments to it may be made without first obtaining
shareholder approval. In addition, unlike Maryland corporate law, which
restricts the delegation of a board of directors' functions, Delaware law
permits the board of trustees of a Delaware statutory trust to delegate certain
of its responsibilities. For example, the board of trustees of a Delaware
statutory trust may delegate the responsibility of declaring dividends to duly
empowered committees of the board or to appropriate officers. Finally, Delaware
law permits the trustees to adapt a Delaware statutory trust to future
contingencies. For example, the trustees may, without a shareholder vote, change
a Delaware statutory trust's domicile or organizational form. In contrast,
17
under Maryland corporate law, a company's board of directors would be required
to obtain shareholder approval prior to changing domicile or organizational
form.
The STIC Redomestication will also have certain other effects on STIC, its
shareholders and management, which are described below under the heading "STIT
Compared to STIC."
WHAT THE PROPOSED STIC REDOMESTICATION WILL INVOLVE
To accomplish the STIC Redomestication, each New Fund has been established
as a series of STIT. On the closing date, each Current Fund will transfer all of
its assets to the corresponding classes of the corresponding New Fund in
exchange solely for a number of full and fractional shares of the New Fund equal
to the number of full and fractional shares of common stock of the corresponding
classes of the Current Fund then outstanding and the New Fund's assumption of
the Current Fund's liabilities. Immediately thereafter, each Current Fund will
distribute those New Fund shares to its shareholders in complete liquidation of
such Current Fund. Upon completion of the STIC Redomestication, each shareholder
of each Current Fund will be the owner of full and fractional shares of the
corresponding New Fund equal in number and aggregate net asset value to the
shares he or she held in the Current Fund. As soon as practicable after the
consummation of the STIC Redomestication, each Current Fund will be terminated
and STIC will be dissolved as a Maryland corporation.
The obligations of STIC and STIT under the STIC Plan are subject to various
conditions stated therein. To provide against unforeseen events, the STIC Plan
may be terminated or amended at any time prior to the closing of the STIC
Redomestication by action of the STIC Board, notwithstanding the approval of the
STIC Plan by the shareholders of any Current Fund. However, no amendments may be
made that would materially adversely affect the interests of shareholders of any
Current Fund. STIC and STIT may at any time waive compliance with any condition
contained in the STIC Plan, provided that the waiver does not materially
adversely affect the interests of shareholders of any Current Fund.
The STIC Plan authorizes STIC to acquire one share of each class of each
New Fund and, as the sole shareholder of each New Fund prior to the STIC
Redomestication, to do each of the following:
- Approve with respect to each New Fund a new investment advisory agreement
with AIM that will be substantially identical to STIC's current
investment advisory agreement with AIM.
- Approve with respect to each New Fund a new administrative services
agreement with AIM that will be substantially identical to each Current
Fund's existing administrative services agreement with AIM.
18
- Approve with respect to each New Fund a distribution agreement with AIM
Distributors. The proposed distribution agreement will provide for
substantially identical distribution services as currently provided to
each corresponding Current Fund by AIM Distributors.
- Approve a distribution plan pursuant to Rule 12b-1 under the 1940 Act
with respect to each class of each New Fund that will be substantially
identical to the corresponding Current Fund's existing distribution plan
for that class.
- Approve with respect to each New Fund a custodian agreement with State
Street Bank and Trust Company and a transfer agency and servicing
agreement with A I M Fund Services, Inc., each of which currently
provides such services to the corresponding Current Fund, and a multiple
class plan pursuant to Rule 18f-3 of the 1940 Act which will be
substantially identical to the multiple class plan that exists for the
corresponding Current Fund.
- Ratify the selection of Xxxx, Xxxxxx & Xxxxx, the accountants for each
Current Fund, as the independent public accountants for each New Fund.
- Approve such other agreements and plans as are necessary for each New
Fund's operation as a series of an open-end management investment
company.
XXXX's transfer agent will establish for each shareholder an account
containing the appropriate number of shares of each class of each New Fund. Such
accounts will be identical in all respects to the accounts currently maintained
by STIC's transfer agent for each shareholder of the Current Funds. Shares held
in the Current Fund accounts will automatically be designated as shares of the
New Funds. Certificates for Current Fund shares issued before the STIC
Redomestication will represent shares of the corresponding New Fund after the
Redomestication. Shareholders of the New Funds will not have the right to demand
or require STIT to issue share certificates. Any account options or privileges
on accounts of shareholders under the Current Funds will be replicated on the
New Fund account. No sales charges will be imposed in connection with the STIC
Redomestication.
Assuming your approval of Proposal 2, STIC currently contemplates that the
STIC Redomestication will be consummated on November 4, 2003.
THE FEDERAL INCOME TAX CONSEQUENCES OF THE STIC REDOMESTICATION
STIC and STIT will receive an opinion of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx,
LLP to the effect that the STIC Redomestication will qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended. Accordingly, the Current Funds, the New Funds and the
shareholders of the New Funds will recognize no gain or loss for Federal
19
income tax purposes as a result of the STIC Redomestication. Shareholders of the
Current Funds should consult their tax advisers regarding the effect, if any, of
the STIC Redomestication in light of their individual circumstances and as to
state and local consequences, if any, of the STIC Redomestication.
APPRAISAL RIGHTS
Appraisal rights are not available to shareholders. However, shareholders
retain the right to redeem their shares of the Current Funds or the New Funds,
as the case may be, at any time before or after the STIC Redomestication.
STIT COMPARED TO STIC
Structure of STIT
STIT is an existing statutory trust established under the laws of the State
of Delaware by the filing of a certificate of trust in the office of the
Secretary of State of Delaware. STIT has established new series portfolios
corresponding to and having identical designations as the series portfolios of
STIC except that the new series portfolio corresponding to the Prime Portfolio
of STIC will be designated "STIC Prime." STIT has also established classes with
respect to each New Fund corresponding to and having identical designations as
the classes of each Current Fund. Each New Fund will have the same investment
objectives, policies, and restrictions as its predecessor Current Fund. XXXX's
fiscal year is the same as that of STIC. No New Fund will have any operations
prior to the STIC Redomestication. Initially, STIC will be the sole shareholder
of each New Fund.
As a Delaware statutory trust, STIT's operations are governed by the STIT
Declaration, STIT's Amended and Restated Bylaws (the "STIT Bylaws") and
applicable Delaware law rather than by the STIC Articles of Incorporation and
STIC's Amended and Restated Bylaws (the "STIC Bylaws") and applicable Maryland
law. Certain differences between the two domiciles and organizational forms are
summarized below. The operations of STIT will continue to be subject to the
provisions of the 1940 Act and the rules and regulations thereunder.
Trustees and Officers of STIT
Subject to the provisions of the STIT Declaration, the business of STIT is
managed by its trustees, who have all powers necessary or convenient to carry
out their responsibilities. The responsibilities, powers, and fiduciary duties
of the trustees of STIT are substantially the same as those of the directors of
STIC.
All of the current officers of STIC currently serve as officers of STIT and
those current officers of STIC will perform the same functions on behalf of the
New Funds and STIT following the STIC Restructuring that they now perform on
behalf of the Current Funds and STIC.
20
Shares of STIT
The beneficial interests in the New Funds will be represented by
transferable shares, par value $0.01 per share. Shareholders do not have the
right to demand or require STIT to issue share certificates. The trustees have
the power under the STIT Declaration to establish new series and classes of
shares; STIC's directors currently have a similar right. The STIT Declaration
permits the trustees to issue an unlimited number of shares of each class and
series. STIC is authorized to issue only the number of shares specified in the
STIC Articles of Incorporation and may issue additional shares only with STIC
Board approval and after payment of a fee to the State of Maryland on any
additional shares authorized.
Your Fund currently has the classes of shares set forth in Exhibit A. STIT
has established for each New Fund the classes that currently exist for its
predecessor Current Fund. Except as discussed in this Proxy Statement, shares of
each class of each New Fund will have rights, privileges, and terms
substantially similar to those of the corresponding class of the Current Fund.
Liability of Shareholders
Shareholders of a Maryland corporation generally do not have personal
liability for the corporation's obligations, except that a shareholder may be
liable to the extent that he or she receives any distribution which exceeds the
amount which he or she could properly receive under Maryland law or where such
liability is necessary to prevent fraud.
The Delaware Statutory Trust Act provides that shareholders of a Delaware
statutory trust shall be entitled to the same limitations of liability extended
to shareholders of private for-profit corporations. There is, however, a remote
possibility that, under certain circumstances, shareholders of a Delaware
statutory trust might be held personally liable for the trust's obligations to
the extent the courts of another state that does not recognize such limited
liability were to apply the laws of such state to a controversy involving such
obligations. The STIT Declaration provides that shareholders of STIT shall not
be subject to any personal liability for acts or obligations of STIT and that
every written agreement, obligation or other undertaking made or issued by STIT
shall contain a provision to the effect that shareholders are not personally
liable thereunder. In addition, the STIT Declaration provides for
indemnification out of STIT's property for any shareholder held personally
liable solely by reason of his or her being or having been a shareholder.
Therefore, the risk of any shareholder incurring financial loss beyond his or
her investment due to shareholder liability is limited to circumstances in which
STIT itself is unable to meet its obligations and the express disclaimer of
shareholder liabilities is determined not to be effective. Given the nature of
the assets and operations of STIT, the possibility of STIT being unable to meet
its obligations is considered remote, and even if a claim were brought against
STIT and a court determined that shareholders were
21
personally liable, it would likely not impose a material obligation on a
shareholder.
Election of Directors/Trustees; Terms
The shareholders of STIC have elected a majority of the directors of STIC.
Each director serves until a successor is elected, subject to his or her earlier
death, resignation or removal in the manner provided by law (see below). In the
case of a vacancy on the STIC Board (other than a vacancy created by removal by
the shareholders), a majority of the directors may appoint a successor to fill
such vacancy. The right of the STIC Board to appoint directors to fill vacancies
without shareholder approval is subject to the provisions of the 1940 Act.
The current shareholders of STIT have elected the trustees of STIT. Such
trustees serve for the life of STIT, subject to his or her earlier death,
incapacitation, resignation, retirement or removal (see below). In the case of
any vacancy on the Board of Trustees of STIT (the "STIT Board"), a majority of
the trustees may appoint a successor to fill such vacancy. The right of the STIT
Board to appoint trustees to fill vacancies without shareholder approval is
subject to the provisions of the 1940 Act.
Removal of Directors/Trustees
A director of STIC may be removed by the affirmative vote of a majority of
the STIC Board, a committee of the STIC Board appointed for such purpose, or the
holders of a majority of the outstanding shares of STIC.
A trustee of STIT may be removed at any time by a written instrument signed
by at least two-thirds of the trustees or by vote of two-thirds of the
outstanding shares of STIT.
Meetings of Shareholders
STIC is not required to hold annual meetings of shareholders and does not
intend to do so unless required by the 1940 Act. The STIC Bylaws provide that a
special meeting of shareholders may be called by the president or, in his or her
absence, the vice-president or by a majority of the STIC Board or holders of
shares entitled to cast at least 10% of the votes entitled to be cast at the
special meeting. Requests for special meetings must, among other things, state
the purpose of such meeting and the matters to be voted upon. No special meeting
needs to be called to consider any matter previously voted upon at a special
meeting called by the shareholders during the preceding twelve months, unless
requested by a majority of all shares entitled to vote at such meeting.
STIT is not required to hold annual meetings of shareholders unless
required by the 1940 Act and does not intend to do so. The STIT Bylaws provide
that any trustee may call a special meeting of shareholders and the trustees
shall call a special meeting of the shareholders solely for the purpose of
removing one
22
or more trustees upon written request of the holders of not less than 10% of the
outstanding shares of STIT. Special meetings may be called for the purpose of
electing trustees or for any other action requiring shareholder approval, or for
any matter deemed by the trustees to be necessary or desirable.
Liability of Directors/Trustees and Officers; Indemnification
Maryland law permits a corporation to eliminate liability of its directors
and officers to the corporation or its stockholders, except for liability
arising from receipt of an improper benefit or profit and from active and
deliberate dishonesty. The STIC Articles of Incorporation eliminate director and
officer liability to the fullest extent permitted under Maryland law. Under
Maryland law, indemnification of a corporation's directors and officers is
mandatory if a director or officer has been successful on the merits or
otherwise in the defense of certain proceedings. Maryland law permits
indemnification for other matters unless it is established that the act or
omission giving rise to the proceeding was committed in bad faith, a result of
active and deliberate dishonesty, or one in which a director or officer actually
received an improper benefit.
Delaware law provides that trustees of a statutory trust shall not be
liable to the statutory trust or its shareholders for acting in good faith
reliance on the provisions of its governing instrument and that the trustee's
liabilities may be expanded or restricted by such instrument. Under the STIT
Declaration, the trustees and officers of STIT are not liable for any act or
omission or any conduct whatsoever in their capacity as trustees, except for
liability to the trust or shareholders due to willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the office of trustee. Delaware law allows a statutory trust to indemnify and
hold harmless any trustee or other person against any and all claims and
demands. The STIT Declaration provides for the indemnification of its trustees
and officers to the extent that such trustees and officers act in good faith and
reasonably believe that their conduct is in the best interests of STIT, except
with respect to any matter in which it has been determined that such trustee
acted with willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties.
Dissolution and Termination
Maryland law provides that STIC may be dissolved by the vote of a majority
of the STIC Board and two-thirds of the shares entitled to vote on the
dissolution; however the STIC Articles of Incorporation reduce the required
shareholder vote from two-thirds to a majority of the shares entitled to vote on
the dissolution.
Pursuant to the STIT Declaration, STIT or any series or class of shares of
beneficial interest in STIT may be terminated by: (1) a majority shareholder
vote of STIT or the affected series or class, respectively; or (2) if there are
fewer than 100 shareholders of record of STIT or of such terminating series or
class,
23
the trustees pursuant to written notice to the shares of STIT or the affected
series or class.
Voting Rights of Shareholders
Shareholders of a Maryland corporation such as STIC are entitled to vote
on, among other things, those matters which effect fundamental changes in the
corporate structure (such as a merger, consolidation or sale of substantially
all of the assets of the corporation) as provided by Maryland law.
The STIT Declaration grants shareholders power to vote only with respect to
the following: (i) election of trustees, provided that a meeting of shareholders
has been called for that purpose; (ii) removal of trustees, provided that a
meeting of shareholders has been called for that purpose; (iii) termination of
STIT or a series or class of its shares of beneficial interest, provided that a
meeting of shareholders has been called for that purpose; (iv) sale of all or
substantially all of the assets of STIT or one of its investment portfolios; (v)
merger or consolidation of STIT or any of its investment portfolios, with
certain exceptions; (vi) approval of any amendments to shareholders' voting
rights under the STIT Declaration; and (vii) approval of such additional matters
as may be required by law or as the trustees, in their sole discretion, shall
determine.
Dissenters' Rights
Under Maryland law, shareholders may not demand the fair value of their
shares from the successor company in a transaction involving the transfer of the
corporation's assets and are, therefore, bound by the terms of the transaction
if the stock is that of an open-end investment company registered with the SEC
under the 1940 Act and the value placed on the stock in the transaction is its
net asset value.
Neither Delaware law nor the STIT Declaration confer upon shareholders
rights of appraisal or dissenters' rights.
Amendments to Organization Documents
STIC has the right to amend, alter, change or repeal any provision
contained in the STIC Articles of Incorporation in the manner prescribed by
statute, including any amendment that alters the contract rights, as expressly
set forth in the STIC Articles of Incorporation, of any outstanding stock, and
all rights conferred on shareholders are granted subject to this reservation.
The STIC Board may approve amendments to the STIC Articles of Incorporation to
classify or reclassify unissued shares of a class of stock without shareholder
approval. Other amendments to the STIC Articles of Incorporation may be adopted
if approved by the affirmative vote of a majority of all the votes entitled to
be cast on the matter. The directors have the power to alter, amend or repeal
the STIC Bylaws or adopt new bylaws at any time.
24
Consistent with Delaware law, the STIT Board may, without shareholder
approval, amend the STIT Declaration at any time, except to eliminate any voting
rights pertaining to the shares of STIT, without approval of the majority of the
shares of STIT. The trustees have the power to alter, amend or repeal the STIT
Bylaws or adopt new bylaws at any time.
The foregoing is only a summary of certain differences between and among
the STIC Articles of Incorporation and the STIC Bylaws and Maryland law, and the
STIT Declaration and STIT Bylaws and Delaware law. It is not a complete list of
the differences. Shareholders should refer to the provisions of the governing
documents of STIC and STIT and state law directly for a more thorough
comparison. Copies of the STIC Articles of Incorporation and STIC Bylaws and of
the STIT Declaration and STIT Bylaws are available to shareholders without
charge upon written request to STIC.
THE BOARD'S RECOMMENDATION ON PROPOSAL 2
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" this Proposal.
PROPOSAL 3 -- APPROVAL OF THE TFIC PLAN
TO REDOMESTICATE TAX-FREE INVESTMENTS CO.
AS A DELAWARE STATUTORY TRUST
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 3?
Proposal 3 applies only to the shareholders of Cash Reserve Portfolio.
BACKGROUND
Tax-Free Investments Co. ("TFIC") currently is organized as a Maryland
corporation. AMVESCAP has identified Cash Reserve Portfolio, the sole series
portfolio of TFIC, as appropriate to be redomesticated as a new series portfolio
of Tax-Free Investments Trust ("TFIT"), a newly created open-end management
investment company organized as a statutory trust under the Delaware Statutory
Trust Act.
TFIC's Board of Directors (the "TFIC Board") has approved the TFIC Plan,
which provides for a series of transactions to convert Cash Reserve Portfolio
(the "Current Fund") to a corresponding series (the "New Fund") of TFIT. Under
the TFIC Plan, the Current Fund will transfer all of its assets to the New Fund
in exchange solely for voting shares of beneficial interest in the New Fund and
the New Fund's assumption of all of the Current liabilities (collectively, the
"TFIC Redomestication"). A form of the TFIC Plan relating to the proposed TFIC
Redomestication is set forth in Appendix II. If Proposal 3 is not approved by
the TFIC shareholders, TFIC will continue to operate as a Maryland corporation.
25
Approval of the TFIC Plan requires the affirmative vote of a majority of
the issued and outstanding shares of TFIC.
The TFIC Redomestication is being proposed primarily to provide TFIC with
greater flexibility in conducting its business operations. The operations of the
New Fund following the TFIC Redomestication will be substantially similar to
those of the Current Fund. As described below, TFIT's Declaration of Trust (the
"TFIT Declaration") differs from TFIC's Articles of Incorporation and the
amendments and supplements thereto (the "TFIC Articles of Incorporation") in
certain respects that are expected to improve TFIC's and the Current Fund's
operations.
REASONS FOR THE PROPOSED TFIC REDOMESTICATION
The TFIC Redomestication is being proposed because, as noted above, AIM and
the TFIC Board believe that the Delaware statutory trust organizational form
offers a number of advantages over the Maryland corporate organizational form.
As a result of these advantages, the Delaware statutory trust organizational
form has been increasingly used by mutual funds, including the majority of the
AIM Funds. TFIT, like TFIC, will operate as an open-end management investment
company registered with the Securities and Exchange Commission (the "SEC") under
the 1940 Act.
The Delaware statutory trust organizational form offers greater flexibility
than the Maryland corporate form. A Maryland corporation is governed by the
detailed requirements imposed by Maryland corporate law and by the terms of its
articles of incorporation. A Delaware statutory trust is subject to fewer
statutory requirements. TFIT will be governed primarily by the terms of the TFIT
Declaration. In particular, TFIT will have greater flexibility to conduct
business without the necessity of engaging in expensive proxy solicitations to
shareholders. For example, under Maryland corporate law, amendments to the TFIC
Articles of Incorporation would typically require shareholder approval. Under
Delaware law, unless the Declaration of Trust of a Delaware statutory trust
provides otherwise, amendments to it may be made without first obtaining
shareholder approval. In addition, unlike Maryland corporate law, which
restricts the delegation of a board of directors' functions, Delaware law
permits the board of trustees of a Delaware statutory trust to delegate certain
of its responsibilities. For example, the board of trustees of a Delaware
statutory trust may delegate the responsibility of declaring dividends to duly
empowered committees of the board or to appropriate officers. Finally, Delaware
law permits the trustees to adapt a Delaware statutory trust to future
contingencies. For example, the trustees may, without a shareholder vote, change
a Delaware statutory trust's domicile or organizational form. In contrast, under
Maryland corporate law, a company's board of directors would be required to
obtain shareholder approval prior to changing domicile or organizational form.
26
The TFIC Redomestication will also have certain other effects on TFIC, its
shareholders and management, which are described below under the heading "TFIT
Compared to TFIC."
WHAT THE PROPOSED TFIC REDOMESTICATION WILL INVOLVE
To accomplish the TFIC Redomestication, TFIT has been formed as a Delaware
statutory trust pursuant to the TFIT Declaration and the New Fund has been
established as the sole series of TFIT. On the closing date, the Current Fund
will transfer all of its assets to the corresponding classes of the New Fund in
exchange solely for a number of full and fractional shares of the New Fund equal
to the number of full and fractional shares of common stock of the corresponding
classes of the Current Fund then outstanding and the New Fund's assumption of
the Current Fund's liabilities. Immediately thereafter, the Current Fund will
distribute those New Fund shares to its shareholders in complete liquidation of
the Current Fund. Upon completion of the TFIC Redomestication, each shareholder
of the Current Fund will be the owner of full and fractional shares of the New
Fund equal in number and aggregate net asset value to the shares he or she held
in the Current Fund. As soon as practicable after the consummation of the TFIC
Redomestication, the Current Fund will be terminated and TFIC will be dissolved
as a Maryland corporation.
The obligations of TFIC and TFIT under the TFIC Plan are subject to various
conditions stated therein. To provide against unforeseen events, the TFIC Plan
may be terminated or amended at any time prior to the closing of the TFIC
Redomestication by action of the TFIC Board, notwithstanding the approval of the
TFIC Plan by the shareholders of the Current Fund. However, no amendments may be
made that would materially adversely affect the interests of shareholders of the
Current Fund. TFIC and TFIT may at any time waive compliance with any condition
contained in the TFIC Plan, provided that the waiver does not materially
adversely affect the interests of shareholders of the Current Fund.
The TFIC Plan authorizes TFIC to acquire one share of each class of the New
Fund and, as the sole shareholder of the New Fund prior to the TFIC
Redomestication, to do each of the following:
- Approve with respect to the New Fund a new investment advisory agreement
with AIM that will be substantially identical to TFIC's current
investment advisory agreement with AIM.
- Approve with respect to the New Fund a administrative services agreement
with AIM that will be substantially identical to the Current Fund's
existing administrative services agreement with AIM.
- Approve with respect to the New Fund a distribution agreement with AIM
Distributors. The proposed distribution agreement will provide for
27
substantially identical distribution services as currently provided to
the Current Fund by AIM Distributors.
- Approve a distribution plan pursuant to Rule 12b-1 under the 1940 Act
with respect to each class of the New Fund that will be substantially
identical to the Current Fund's existing distribution plan for that
class.
- Approve with respect to the New Fund a custodian agreement with State
Street Bank and Trust Company and a transfer agency and servicing
agreement with A I M Fund Services, Inc., each of which currently
provides such services to the Current Fund, and a multiple class plan
pursuant to Rule 18f-3 of the 1940 Act which will be substantially
identical to the multiple class plan that exists for the Current Fund.
- Elect the directors of TFIC as the trustees of TFIT to serve without
limit in time, except as they may resign or be removed by action of
TFIT's trustees or shareholders, and except as they retire in accordance
with TFIT's retirement policy for trustees. TFIT's retirement policy for
trustees is substantially identical to TFIC's retirement policy for
directors.
- Ratify the selection of Ernst & Young LLP as the independent public
accountants for the New Fund.
- Approve such other agreements and plans as are necessary for the New
Fund's operation as a series of an open-end management investment
company.
TFIT's transfer agent will establish for each shareholder an account
containing the appropriate number of shares of each class of the New Fund. Such
accounts will be identical in all respects to the accounts currently maintained
by TFIC's transfer agent for each shareholder of the Current Fund. Shares held
in the Current Fund accounts will automatically be designated as shares of the
New Fund. Certificates for Current Fund shares issued before the TFIC
Redomestication will represent shares of the New Fund after the TFIC
Redomestication. Shareholders of the New Fund will not have the right to demand
or require TFIT to issue share certificates. Any account options or privileges
on accounts of shareholders under the Current Fund will be replicated on the New
Fund account. No sales charges will be imposed in connection with the TFIC
Redomestication.
Assuming your approval of Proposal 3, TFIC currently contemplates that the
TFIC Redomestication will be consummated on November 4, 2003.
THE FEDERAL INCOME TAX CONSEQUENCES OF THE TFIC REDOMESTICATION
TFIC and TFIT will receive an opinion of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx,
LLP to the effect that the TFIC Redomestication will qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended. Accordingly, the Current Fund, the New Fund and
28
the shareholders of the New Fund will recognize no gain or loss for Federal
income tax purposes as a result of the TFIC Redomestication. Shareholders of the
Current Fund should consult their tax advisers regarding the effect, if any, of
the TFIC Redomestication in light of their individual circumstances and as to
state and local consequences, if any, of the TFIC Redomestication.
APPRAISAL RIGHTS
Appraisal rights are not available to shareholders. However, shareholders
retain the right to redeem their shares of the Current Fund or the New Fund, as
the case may be, at any time before or after the TFIC Redomestication.
TFIT COMPARED TO TFIC
Structure of TFIT
TFIT has been established under the laws of the State of Delaware by the
filing of a certificate of trust in the office of the Secretary of State of
Delaware. TFIT has established a sole series portfolio corresponding to Cash
Reserve Portfolio, the sole series portfolio of TFIC, except that the new series
portfolio will be designated "Tax-Free Cash Reserve Portfolio." TFIT has also
established classes with respect to the New Fund corresponding to and having
identical designations as the classes of the Current Fund. TFIT's fiscal year is
the same as that of TFIC. The New Fund will have the same investment objectives,
policies, and restrictions as the predecessor Current Fund. TFIT will not have
any operations prior to the TFIC Redomestication. Initially, TFIC will be the
sole shareholder of TFIT.
As a Delaware statutory trust, TFIT's operations are governed by the TFIT
Declaration, TFIT's Bylaws and applicable Delaware law rather than by the TFIC
Articles of Incorporation, TFIC's Amended and Restated Bylaws (the "TFIC
Bylaws") and applicable Maryland law. Certain differences between the two
domiciles and organizational forms are summarized below. The operations of TFIT
will continue to be subject to the provisions of the 1940 Act and the rules and
regulations thereunder.
Trustees of TFIT
Subject to the provisions of the TFIT Declaration, the business of TFIT
will be managed by its trustees, who have all powers necessary or convenient to
carry out their responsibilities. The responsibilities, powers, and fiduciary
duties of the trustees of TFIT are substantially the same as those of the
directors of TFIC.
The trustees of TFIT would be those persons elected at this Special Meeting
to serve as directors of TFIC. Information concerning the nominees for election
as directors of TFIC is set forth above under Proposal 1.
29
Shares of TFIT
The beneficial interests in the New Fund will be represented by
transferable shares, par value $0.001 per share. Shareholders do not have the
right to demand or require TFIT to issue share certificates. The trustees have
the power under the TFIT Declaration to establish new series and classes of
shares; TFIC's directors currently have a similar right. The TFIT Declaration
permits the trustees to issue an unlimited number of shares of each class and
series. TFIC is authorized to issue only the number of shares specified in the
TFIC Articles of Incorporation and may issue additional shares only with TFIC
Board approval and after payment of a fee to the State of Maryland on any
additional shares authorized.
Your Fund currently has the classes of shares set forth in Exhibit A. TFIT
has established for the New Fund the classes that currently exist for the
Current Fund. Except as discussed in this Proxy Statement, shares of each class
of the New Fund will have rights, privileges, and terms substantially similar to
those of the corresponding class of the Current Fund.
Liability of Shareholders
Shareholders of a Maryland corporation generally do not have personal
liability for the corporation's obligations, except that a shareholder may be
liable to the extent that he or she receives any distribution which exceeds the
amount which he or she could properly receive under Maryland law or where such
liability is necessary to prevent fraud.
The Delaware Statutory Trust Act provides that shareholders of a Delaware
statutory trust shall be entitled to the same limitations of liability extended
to shareholders of private for-profit corporations. There is, however, a remote
possibility that, under certain circumstances, shareholders of a Delaware
statutory trust might be held personally liable for the trust's obligations to
the extent the courts of another state that does not recognize such limited
liability were to apply the laws of such state to a controversy involving such
obligations. The TFIT Declaration provides that shareholders of TFIT shall not
be subject to any personal liability for acts or obligations of TFIT and that
every written agreement, obligation or other undertaking made or issued by TFIT
shall contain a provision to the effect that shareholders are not personally
liable thereunder. In addition, the TFIT Declaration provides for
indemnification out of TFIT's property for any shareholder held personally
liable solely by reason of his or her being or having been a shareholder.
Therefore, the risk of any shareholder incurring financial loss beyond his or
her investment due to shareholder liability is limited to circumstances in which
TFIT itself is unable to meet its obligations and the express disclaimer of
shareholder liabilities is determined not to be effective. Given the nature of
the assets and operations of TFIT, the possibility of TFIT being unable to meet
its obligations is considered remote, and even if a claim were brought against
TFIT and a court determined that shareholders were
30
personally liable, it would likely not impose a material obligation on a
shareholder.
Election of Directors/Trustees; Terms
The shareholders of TFIC have elected a majority of the directors of TFIC.
Each director serves until a successor is elected, subject to his or her earlier
death, resignation or removal in the manner provided by law (see below). In the
case of a vacancy on the TFIC Board (other than a vacancy created by removal by
the shareholders), a majority of the directors may appoint a successor to fill
such vacancy. The right of the TFIC Board to appoint directors to fill vacancies
without shareholder approval is subject to the provisions of the 1940 Act.
As set forth above, the TFIC Plan authorizes TFIC to acquire one share of
each class of the New Fund and, as the sole shareholder of TFIT prior to the
TFIC Redomestication, to elect the directors of TFIC as the trustees of TFIT.
Such trustees serve for the life of TFIT, subject to his or her earlier death,
incapacitation, resignation, retirement or removal (see below). In the case of
any vacancy on the Board of Trustees of TFIT (the "TFIT Board"), a majority of
the trustees may appoint a successor to fill such vacancy. The right of the TFIT
Board to appoint trustees to fill vacancies without shareholder approval is
subject to the provisions of the 1940 Act.
Removal of Directors/Trustees
A director of TFIC may be removed by the affirmative vote of a majority of
the holders of a majority of the outstanding shares of TFIC.
A trustee of TFIT may be removed at any time by a written instrument signed
by at least two-thirds of the trustees or by vote of two-thirds of the
outstanding shares of TFIT.
Meetings of Shareholders
TFIC is not required to hold annual meetings of shareholders and does not
intend to do so unless required by the 1940 Act. The TFIC Bylaws provide that a
special meeting of shareholders may be called by the president or, in his or her
absence, the vice-president or by a majority of the TFIC Board or holders of
shares entitled to cast at least 10% of the votes entitled to be cast at the
special meeting. Requests for special meetings must, among other things, state
the purpose of such meeting and the matters to be voted upon. No special meeting
needs to be called to consider any matter previously voted upon at a special
meeting called by the shareholders during the preceding twelve months, unless
requested by a majority of all shares entitled to vote at such meeting.
TFIT is not required to hold annual meetings of shareholders unless
required by the 1940 Act and does not intend to do so. The TFIT Bylaws provide
that any trustee may call a special meeting of shareholders and the trustees
shall
31
call a special meeting of the shareholders solely for the purpose of removing
one or more trustees upon written request of the holders of not less than 10% of
the outstanding shares of TFIT. Special meetings may be called for the purpose
of electing trustees or for any other action requiring shareholder approval, or
for any matter deemed by the trustees to be necessary or desirable.
Liability of Directors/Trustees and Officers; Indemnification
Maryland law permits a corporation to eliminate liability of its directors
and officers to the corporation or its stockholders, except for liability
arising from receipt of an improper benefit or profit and from active and
deliberate dishonesty. The TFIC Articles of Incorporation eliminate director and
officer liability to the fullest extent permitted under Maryland law. Under
Maryland law, indemnification of a corporation's directors and officers is
mandatory if a director or officer has been successful on the merits or
otherwise in the defense of certain proceedings. Maryland law permits
indemnification for other matters unless it is established that the act or
omission giving rise to the proceeding was committed in bad faith, a result of
active and deliberate dishonesty, or one in which a director or officer actually
received an improper benefit.
Delaware law provides that trustees of a statutory trust shall not be
liable to the statutory trust or its shareholders for acting in good faith
reliance on the provisions of its governing instrument and that the trustee's
liabilities may be expanded or restricted by such instrument. Under the TFIT
Declaration, the trustees and officers of TFIT are not liable for any act or
omission or any conduct whatsoever in their capacity as trustees, except for
liability to the trust or shareholders due to willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the office of trustee. Delaware law allows a statutory trust to indemnify and
hold harmless any trustee or other person against any and all claims and
demands. The TFIT Declaration provides for the indemnification of its trustees
and officers to the extent that such trustees and officers act in good faith and
reasonably believe that their conduct is in the best interests of TFIT, except
with respect to any matter in which it has been determined that such trustee
acted with willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties.
Dissolution and Termination
Maryland law provides that TFIC may be dissolved by the vote of a majority
of the TFIC Board and two-thirds of the shares entitled to vote on the
dissolution; however the TFIC Articles of Incorporation reduce the required
shareholder vote from two-thirds to a majority of the shares entitled to vote on
the dissolution.
Pursuant to the TFIT Declaration, TFIT or any series or class of shares of
beneficial interest in TFIT may be terminated by: (1) a majority shareholder
vote of TFIT or the affected series or class, respectively; or (2) if there are
fewer
32
than 100 shareholders of record of TFIT or of such terminating series or class,
the trustees pursuant to written notice to the shares of TFIT or the affected
series or class.
Voting Rights of Shareholders
Shareholders of a Maryland corporation such as TFIC are entitled to vote
on, among other things, those matters which effect fundamental changes in the
corporate structure (such as a merger, consolidation or sale of substantially
all of the assets of the corporation) as provided by Maryland law.
The TFIT Declaration grants shareholders power to vote only with respect to
the following: (i) election of trustees, provided that a meeting of shareholders
has been called for that purpose; (ii) removal of trustees, provided that a
meeting of shareholders has been called for that purpose; (iii) termination of
TFIT or a series or class of its shares of beneficial interest, provided that a
meeting of shareholders has been called for that purpose; (iv) sale of all or
substantially all of the assets of TFIT or one of its investment portfolios; (v)
merger or consolidation of TFIT or any of its investment portfolios, with
certain exceptions; (vi) approval of any amendments to shareholders' voting
rights under the TFIT Declaration; and (vii) approval of such additional matters
as may be required by law or as the trustees, in their sole discretion, shall
determine.
Dissenters' Rights
Under Maryland law, shareholders may not demand the fair value of their
shares from the successor company in a transaction involving the transfer of the
corporation's assets and are, therefore, bound by the terms of the transaction
if the stock is that of an open-end investment company registered with the SEC
under the 1940 Act and the value placed on the stock in the transaction is its
net asset value.
Neither Delaware law nor the TFIT Declaration confer upon shareholders
rights of appraisal or dissenters' rights.
Amendments to Organization Documents
TFIC has the right to amend, alter, change or repeal any provision
contained in the TFIC Articles of Incorporation in the manner prescribed by
statute, including any amendment that alters the contract rights, as expressly
set forth in the TFIC Articles of Incorporation, of any outstanding stock, and
all rights conferred on shareholders are granted subject to this reservation.
The TFIC Board may approve amendments to the TFIC Articles of Incorporation to
classify or reclassify unissued shares of a class of stock without shareholder
approval. Other amendments to the TFIC Articles of Incorporation may be adopted
if approved by the affirmative vote of a majority of all the votes entitled
33
to be cast on the matter. The directors have the power to alter, amend or repeal
the TFIC Bylaws or adopt new bylaws at any time.
Consistent with Delaware law, the TFIT Board may, without shareholder
approval, amend the TFIT Declaration at any time, except to eliminate any voting
rights pertaining to the shares of TFIT, without approval of the majority of the
shares of TFIT. The trustees have the power to alter, amend or repeal the TFIT
Bylaws or adopt new bylaws at any time.
The foregoing is only a summary of certain differences between and among
the TFIC Articles of Incorporation, the TFIC Bylaws and Maryland law, and the
TFIT Declaration, TFIT Bylaws and Delaware law. It is not a complete list of the
differences. Shareholders should refer to the provisions of the governing
documents of TFIC and TFIT and state law directly for a more thorough
comparison. Copies of the TFIC Articles of Incorporation and TFIC Bylaws and of
the TFIT Declaration and TFIT Bylaws are available to shareholders without
charge upon written request to TFIC.
THE BOARD'S RECOMMENDATION ON PROPOSAL 3
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" this Proposal.
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the STIC Board has appointed Xxxx, Xxxxxx & Xxxxx
("TWB") as such Company's independent public accountants for the fiscal year
ending August 31, 2003. The Audit Committee of the TFIC Board has appointed
Ernst & Young LLP ("E&Y") as such Company's independent public accountants for
the fiscal year ending March 31, 2004.
Representatives of TWB and E&Y are expected to be available at the Special
Meetings and to have the opportunity to make a statement and respond to
appropriate questions from the shareholders.
The Audit Committees of the STIC Board and the TFIC Board have considered
whether the provision of the services below is compatible with maintaining the
independence of TWB and E&Y, respectively.
34
FEES PAID TO TWB RELATED TO SHORT-TERM INVESTMENTS CO. (FOR 2002 FISCAL YEAR)
TWB billed Short-Term Investments Co. (consisting of three separate series
portfolios) aggregate fees for professional services rendered for the 2002
fiscal year as follows:
FINANCIAL
INFORMATION SYSTEMS
DESIGN AND ALL OTHER
COMPANY AND FISCAL YEAR END AUDIT FEES IMPLEMENTATION FEES FEES TOTAL FEES
--------------------------- ---------- ------------------- --------- ----------
Short-Term Investments Co.
(8/31/02)..................... $36,000 $0 $0 $36,000
FEES PAID TO TWB NOT RELATED TO SHORT-TERM INVESTMENTS CO. (FOR 2002 FISCAL
YEAR)
TWB billed AIM aggregate fees for professional services rendered for the
2002 fiscal year to AIM, or any affiliate that provided services to Short-Term
Investments Co., as follows:
Financial Information Systems Design and Implementation
Fees...................................................... $ 0
All Other Fees.............................................. $ 0
---
Total Fees.................................................. $ 0
FEES PAID TO E&Y RELATED TO TAX-FREE INVESTMENTS CO. (FOR 2003 FISCAL YEAR)
E&Y billed Tax-Free Investments Co. (consisting of one series portfolio)
aggregate fees for professional services rendered for the 2003 fiscal year as
follows:
FINANCIAL
INFORMATION SYSTEMS
DESIGN AND ALL OTHER
COMPANY AND FISCAL YEAR END AUDIT FEES IMPLEMENTATION FEES FEES* TOTAL FEES
--------------------------- ---------- ------------------- --------- ----------
Tax-Free Investments Co.
(3/31/03)..................... $21,862 $0 $850 $22,712
---------------
* All Other Fees includes fees billed for all other non-audit services,
including fees for tax-related services rendered to Tax-Free Investments Co.
35
FEES PAID TO E&Y NOT RELATED TO TAX-FREE INVESTMENTS CO. (FOR 2003 FISCAL YEAR)
E&Y billed AIM aggregate fees for professional services rendered for the
2003 fiscal year to AIM, or any affiliate that provided services to Tax-Free
Investments Co., as follows:
Financial Information Systems Design and Implementation
Fees...................................................... $ 0
All Other Fees**............................................ $300,661
--------
Total Fees.................................................. $300,661
---------------
** As required by SEC rules, All Other Fees includes amounts paid to E&Y by the
Fund's advisor and other related entities that provide support for the
operations for the Company. All Other Fees include services relating to
audits of related entities, tax services and research on accounting
consultations, and issuance of SAS No. 70 Reports, Reports on The Processing
of Transactions by Service Organization. The services performed for the
Fund's advisor and related entities benefit many legal entities of AIM,
including many sister funds within the investment company complex.
36
ADDITIONAL INFORMATION
INVESTMENT ADVISOR
AIM, 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-1173, is the
investment advisor for the Funds.
ADMINISTRATOR
AIM, 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-1173, is the
administrator for the Funds.
PRINCIPAL UNDERWRITER
Fund Management Company, 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000-1173, is the principal underwriter for the Funds.
OFFICERS OF THE COMPANIES
Information regarding the current officers of the Companies can be found in
Exhibit C.
SECURITY OWNERSHIP OF MANAGEMENT
Information regarding the ownership of each class of each Fund's shares by
the directors, nominees, and current executive officers of the Companies can be
found in Exhibit D.
OWNERSHIP OF SHARES
A list of the name, address and percent ownership of each person who, as of
July 25, 2003, to the knowledge of the Companies owned 5% or more of any class
of the outstanding shares of each Fund can be found in Exhibit E.
DIRECTOR OWNERSHIP OF FUND SHARES
The dollar range of equity securities beneficially owned by each director
and nominee as of December 31, 2002 (i) in each Fund and (ii) on an aggregate
basis, in all registered investment companies overseen by the director and
nominee within the AIM Funds complex can be found in Exhibit F.
37
APPENDIX I
SHORT-TERM INVESTMENTS CO.
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of July
30, 2003, by and between Short-Term Investments Co., a Maryland corporation (the
"Company"), acting on its own behalf and on behalf of each of its series
portfolios, all of which are identified on Schedule A to this Agreement, and
Short-Term Investments Trust, a Delaware statutory trust (the "Trust"), acting
on its own behalf and on behalf of each of its series portfolios, all of which
are identified on Schedule A.
BACKGROUND
The Company is organized as a series management investment company and is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended. The Company currently publicly offers shares of
common stock representing interests in one or more separate series portfolios.
Each of these series portfolios is listed on Schedule A and is referred to in
this Agreement as a "Current Fund."
The Board of Directors of the Company has designated multiple classes of
common stock that represent interests in each Current Fund. Each of these
classes is listed on Schedule B to this Agreement and is referred to in this
Agreement as a "Current Fund Class."
The Company desires to change its form and place of organization by
reorganizing as the Trust. In anticipation of such reorganization, the Board of
Trustees of the Trust has established a series portfolio corresponding to each
of the Current Funds (each a "New Fund"), and has designated multiple classes of
shares of beneficial interest in each New Fund corresponding to the Current Fund
Classes (each a "New Fund Class"). Schedule A lists the New Funds and Schedule B
lists the New Fund Classes.
Each Current Fund desires to provide for its Reorganization (each, a
"Reorganization" and collectively, the "Reorganizations") through the transfer
of all of its assets to the corresponding New Fund in exchange for the
assumption by such New Fund of the liabilities of the corresponding Current Fund
and the issuance by the Trust to such Current Fund of shares of beneficial
interest in the New Fund ("New Fund Shares"). New Fund Shares received by a
Current Fund will have an aggregate net asset value equal to the aggregate net
asset value of the shares of the Current Fund immediately prior to the
Reorganization (the "Current Fund Shares"). Each Current Fund will then
distribute the New Fund Shares it has received to its shareholders.
I-1
Each Reorganization of each Current Fund is dependent upon the consummation
of the Reorganization of all of the other Current Funds, so that the
Reorganizations of all of the Current Funds must be consummated if any of them
are to be consummated. For convenience, the balance of this Agreement refers
only to a single Reorganization, but the terms and conditions hereof shall apply
separately to each Reorganization and to the Current Fund and the corresponding
New Fund participating therein, as applicable.
The Reorganization is subject to, and shall be effected in accordance with,
the terms of this Agreement. This Agreement is intended to be and is adopted by
the Company, on its own behalf and on behalf of the Current Funds, and by the
Trust, on its own behalf and on behalf of the New Funds, as a Plan of
Reorganization within the meaning of the regulations under Section 368(a) of the
Internal Revenue Code of 1986, as amended.
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS.
Any capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the preamble or background to this Agreement. In addition,
the following terms shall have the following meanings:
1.1 "Assets" shall mean all assets including, without limitation, all
cash, cash equivalents, securities, receivables (including interest and
dividends receivable), claims and rights of action, rights to register shares
under applicable securities laws, books and records, deferred and prepaid
expenses shown as assets on a Current Fund's books, and other property owned by
a Current Fund at the Effective Time.
1.2 "Closing" shall mean the consummation of the transfer of Assets,
assumption of Liabilities and issuance of shares described in Sections 2.1 and
2.2 of this Agreement, together with the related acts necessary to consummate
the Reorganization, to occur on the date set forth in Section 3.1.
1.3 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.4 "Current Fund" shall mean each of the series portfolios of the Company
as shown on Schedule A.
1.5 "Current Fund Class" shall mean each class of common stock of the
Company representing an interest in a Current Fund as shown on Schedule B.
1.6 "Current Fund Shares" shall mean the shares of a Current Fund
outstanding immediately prior to the Reorganization.
1.7 "Effective Time" shall have the meaning set forth in Section 3.1.
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1.8 "Liabilities" shall mean all liabilities of a Current Fund including,
without limitation, all debts, obligations, and duties of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether or not
determinable at the Effective Time, and whether or not specifically referred to
herein.
1.9 "New Fund" shall mean each of the series portfolios of the Trust, one
of which shall correspond to one of the Current Funds as shown on Schedule A.
1.10 "New Fund Class" shall mean each class of shares of beneficial
interest in a New Fund, one of which shall correspond to one of the Current Fund
Classes as shown on Schedule B.
1.11 "New Fund Shares" shall mean those shares of beneficial interest in a
New Fund issued to a Current Fund hereunder.
1.12 "Registration Statement" shall have the meaning set forth in Section
5.4.
1.13 "RIC" shall mean a "regulated investment company" (as defined under
Subchapter M of the Code).
1.14 "SEC" shall mean the Securities and Exchange Commission.
1.15 "Shareholder(s)" shall mean a Current Fund's shareholder(s) of
record, determined as of the Effective Time.
1.16 "Shareholders Meeting" shall have the meaning set forth in Section
5.1.
1.17 "Transfer Agent" shall have the meaning set forth in Section 2.2.
1.18 "1940 Act" shall mean the Investment Company Act of 1940, as amended.
2. PLAN OF REORGANIZATION.
2.1 The Company agrees, on behalf of each Current Fund, to assign, sell,
convey, transfer and deliver all of the Assets of each Current Fund to its
corresponding New Fund. The Trust, on behalf of each New Fund, agrees in
exchange therefor:
(a) to issue and deliver to the corresponding Current Fund the number
of full and fractional (rounded to the third decimal place) New Fund Shares
of each New Fund Class designated on Schedule B equal to the number of full
and fractional Current Fund Shares of each corresponding Current Fund Class
designated on Schedule B; and
(b) to assume all of the Current Fund's Liabilities.
Such transactions shall take place at the Closing.
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2.2 At the Effective Time (or as soon thereafter as is reasonably
practicable), (a) the New Fund Shares issued pursuant to Section 5.2 shall be
redeemed by each New Fund for $10.00 and (b) each Current Fund shall distribute
the New Fund Shares received by it pursuant to Section 2.1 to the Current Fund's
Shareholders in exchange for such Shareholders' Current Fund Shares. Such
distribution shall be accomplished through opening accounts, by the transfer
agent for the Trust (the "Transfer Agent"), on each New Fund's share transfer
books in the Shareholders' names and transferring New Fund Shares to such
accounts. Each Shareholder's account shall be credited with the respective pro
rata number of full and fractional (rounded to the third decimal place) New Fund
Shares of each New Fund Class due that Shareholder. All outstanding Current Fund
Shares, including those represented by certificates, shall simultaneously be
canceled on each Current Fund's share transfer books. The Trust shall not issue
certificates representing the New Fund Shares in connection with the
Reorganization. However, certificates representing Current Fund Shares shall
represent New Fund Shares after the Reorganization.
2.3 Following receipt of the required shareholder vote and as soon as
reasonably practicable after the Closing, the status of each Current Fund as a
designated series of the Company shall be terminated; provided, however, that
the termination of each Current Fund as a designated series of the Company shall
not be required if the Reorganization shall not have been consummated.
2.4 Following receipt of the required shareholder vote and as soon as
reasonably practicable after distribution of the New Fund Shares pursuant to
Section 2.2, the Company and the Trust shall cause Articles of Transfer to be
filed with the State Department of Assessments and Taxation of Maryland and,
following the filing of Articles of Transfer, the Company shall file Articles of
Dissolution with the State Department of Assessments and Taxation of Maryland to
dissolve the Company as a Maryland corporation; provided, however, that the
filing of Articles of Transfer and Articles of Dissolution as aforesaid shall
not be required if the Reorganization shall not have been consummated.
2.5 Any transfer taxes payable on issuance of New Fund Shares in a name
other than that of the registered holder of the Current Fund Shares exchanged
therefor shall be paid by the person to whom such New Fund Shares are to be
issued, as a condition of such transfer.
2.6 Any reporting responsibility of the Company or each Current Fund to a
public authority is and shall remain its responsibility up to and including the
date on which it is terminated.
3. CLOSING.
3.1 The Closing shall occur at the principal office of the Company on
November 4, 2003, or on such other date and at such other place upon which the
parties may agree. All acts taking place at the Closing shall be deemed to take
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place simultaneously as of the Company's and the Trust's close of business on
the date of the Closing or at such other time as the parties may agree (the
"Effective Time").
3.2 The Company or its fund accounting agent shall deliver to the Trust at
the Closing, a certificate of an authorized officer verifying that the
information (including adjusted basis and holding period, by lot) concerning the
Assets, including all portfolio securities, transferred by the Current Funds to
the New Funds, as reflected on the New Funds' books immediately following the
Closing, does or will conform to such information on the Current Funds' books
immediately before the Closing. The Company shall cause the custodian for each
Current Fund to deliver at the Closing a certificate of an authorized officer of
the custodian stating that (a) the Assets held by the custodian will be
transferred to each corresponding New Fund at the Effective Time and (b) all
necessary taxes in conjunction with the delivery of the Assets, including all
applicable federal and state stock transfer stamps, if any, have been paid or
provision for payment has been made.
3.3 The Company shall deliver to the Trust at the Closing a list of the
names and addresses of each Shareholder of each Current Fund and the number of
outstanding Current Fund Shares of the Current Fund Class owned by each
Shareholder, all as of the Effective Time, certified by the Company's Secretary
or Assistant Secretary. The Trust shall cause the Transfer Agent to deliver at
the Closing a certificate as to the opening on each New Fund's share transfer
books of accounts in the Shareholders' names. The Trust shall issue and deliver
a confirmation to the Company evidencing the New Fund Shares to be credited to
each corresponding Current Fund at the Effective Time or provide evidence
satisfactory to the Company that such shares have been credited to each Current
Fund's account on such books. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, stock certificates, receipts, or
other documents as the other party or its counsel may reasonably request.
3.4 The Company and the Trust shall deliver to the other at the Closing a
certificate executed in its name by its President or a Vice President in form
and substance satisfactory to the recipient and dated the Effective Time, to the
effect that the representations and warranties it made in this Agreement are
true and correct at the Effective Time except as they may be affected by the
transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES.
4.1 The Company represents and warrants on its own behalf and on behalf of
each Current Fund as follows:
(a) The Company is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Maryland, and its Charter
is on file with the Maryland Department of Assessments and Taxation;
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(b) The Company is duly registered as an open-end series management
investment company under the 1940 Act, and such registration is in full
force and effect;
(c) Each Current Fund is a duly established and designated series of
the Company;
(d) At the Closing, each Current Fund will have good and marketable
title to its Assets and full right, power, and authority to sell, assign,
transfer, and deliver its Assets free of any liens or other encumbrances;
and upon delivery and payment for the Assets, the corresponding New Fund
will acquire good and marketable title to the Assets;
(e) The New Fund Shares are not being acquired for the purpose of
making any distribution thereof, other than in accordance with the terms
hereof;
(f) Each Current Fund is a "fund" as defined in Section 851(g)(2) of
the Code; each Current Fund qualified for treatment as a RIC for each
taxable year since it commenced operations that has ended (or will end)
before the Closing and will continue to meet all the requirements for such
qualification for its current taxable year (and the Assets will be invested
at all times through the Effective Time in a manner that ensures compliance
with the foregoing); each Current Fund has no earnings and profits
accumulated in any taxable year in which the provisions of Subchapter M did
not apply to it; and each Current Fund has made all distributions for each
calendar year that has ended (or will end) before the Closing that are
necessary to avoid the imposition of federal excise tax or has paid or
provided for the payment of any excise tax imposed for any such calendar
year;
(g) During the five-year period ending on the date of the
Reorganization, neither Company nor any person related to Company (as
defined in Section 1.368-1(e)(3) of the Federal income tax regulations
adopted pursuant to the Code without regard to Section 1.368-1(e)(3)(i)(A))
will have directly or through any transaction, agreement, or arrangement
with any other person, (i) acquired shares of a Current Fund for
consideration other than shares of such Current Fund, except for shares
redeemed in the ordinary course of such Current Fund's business as an
open-end investment company as required by the 1940 Act, or (ii) made
distributions with respect to a Current Fund's shares, except for (a)
distributions necessary to satisfy the requirements of Sections 852 and
4982 of the Code for qualification as a regulated investment company and
avoidance of excise tax liability and (b) additional distributions, to the
extent such additional distributions do not exceed 50 percent of the value
(without giving effect to such distributions) of the proprietary interest
in such Current Fund at the Effective Time. There is no plan or intention
of the Shareholders who
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individually own 5% or more of any Current Fund Shares and, to the best of
the Company's knowledge, there is no plan or intention of the remaining
Shareholders to redeem or otherwise dispose of any New Fund Shares to be
received by them in the Reorganization. The Company does not anticipate
dispositions of those shares at the time of or soon after the
Reorganization to exceed the usual rate and frequency of redemptions of
shares of the Current Fund as a series of an open-end investment company.
Consequently, the Company is not aware of any plan that would cause the
percentage of Shareholder interests, if any, that will be disposed of as a
result of or at the time of the Reorganization to be one percent (1%) or
more of the shares of the Current Fund outstanding as of the Effective
Time;
(h) The Liabilities were incurred by the Current Funds in the ordinary
course of their business and are associated with the Assets;
(i) The Company is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code or similar case within
the meaning of Section 368(a)(3)(A) of the Code;
(j) As of the Effective Time, no Current Fund will have outstanding
any warrants, options, convertible securities, or any other type of rights
pursuant to which any person could acquire Current Fund Shares except for
the right of investors to acquire its shares at net asset value in the
normal course of its business as a series of an open-end diversified
management investment company operating under the 1940 Act;
(k) At the Effective Time, the performance of this Agreement shall
have been duly authorized by all necessary action by the Company's
shareholders;
(l) Throughout the five-year period ending on the date of the Closing,
each Current Fund will have conducted its historic business within the
meaning of Section 1.368-1(d) of the Income Tax Regulations under the Code
in a substantially unchanged manner;
(m) The fair market value of the Assets of each Current Fund
transferred to the corresponding New Fund will equal or exceed the sum of
the Liabilities assumed by the New Fund plus the amount of Liabilities, if
any, to which the transferred Assets are subject; and
(n) The total adjusted basis of the Assets of each Current Fund
transferred to the corresponding New Fund will equal or exceed the sum of
the Liabilities assumed by the New Fund plus the amount of Liabilities, if
any, to which the transferred assets are subject.
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4.2 The Trust represents and warrants on its own behalf and on behalf of
each New Fund as follows:
(a) The Trust is a statutory trust duly organized, validly existing,
and in good standing under the laws of the State of Delaware, and its
Certificate of Trust has been duly filed in the office of the Secretary of
State of Delaware;
(b) The Trust is duly registered as an open-end management investment
company under the 1940 Act. At the Effective Time, the New Fund Shares to
be issued pursuant to Section 2.1 of this Agreement shall be duly
registered under the Securities Act of 1933 by a Registration Statement
filed with the SEC;
(c) At the Effective Time, each New Fund will be a duly established
and designated series of the Trust;
(d) No New Fund has commenced operations nor will it commence
operations until after the Closing;
(e) Prior to the Effective Time, there will be no issued and
outstanding shares in any New Fund or any other securities issued by the
Trust on behalf of any New Fund, except as provided in Section 5.2;
(f) No consideration other than New Fund Shares (and each New Fund's
assumption of the Liabilities) will be issued in exchange for the Assets in
the Reorganization;
(g) The New Fund Shares to be issued and delivered to each
corresponding Current Fund hereunder will, at the Effective Time, have been
duly authorized and, when issued and delivered as provided herein, will be
duly and validly issued and outstanding shares of the New Fund, fully paid
and nonassessable;
(h) Each New Fund will be a "fund" as defined in Section 851(g)(2) of
the Code and will meet all the requirements to qualify for treatment as a
RIC for its taxable year in which the Reorganization occurs;
(i) The Trust, on behalf of the New Funds, has no plan or intention to
issue additional New Fund Shares following the Reorganization except for
shares issued in the ordinary course of its business as an open-end
investment company; nor does the Trust, on behalf of the New Funds, have
any plan or intention to redeem or otherwise reacquire any New Fund Shares
issued pursuant to the Reorganization, other than in the ordinary course of
such business or to the extent necessary to comply with its legal
obligation under Section 22(e) of the 1940 Act;
(j) Each New Fund will actively continue the corresponding Current
Fund's business in substantially the same manner that the Current Fund
conducted that business immediately before the Reorganization; and no
I-8
New Fund has any plan or intention to sell or otherwise dispose of any of
the Assets, except for dispositions made in the ordinary course of its
business or dispositions necessary to maintain its qualification as a RIC,
although in the ordinary course of its business the New Fund will
continuously review its investment portfolio (as each Current Fund did
before the Reorganization) to determine whether to retain or dispose of
particular stocks or securities, including those included in the Assets,
provided, however that this Section 4.2(j) shall not preclude any of the
combinations of funds set forth on Schedule C to this Agreement; and
(k) There is no plan or intention for any of the New Funds to be
dissolved or merged into another corporation or statutory trust or "fund"
thereof (within the meaning of Section 851(g)(2) of the Code) following the
Reorganization, provided, however that this Section 4.2(k) shall not
preclude any of the combinations of Funds set forth on Schedule C.
4.3 Each of the Company and the Trust, on its own behalf and on behalf of
each Current Fund or each New Fund, as appropriate, represents and warrants as
follows:
(a) The fair market value of the New Fund Shares of each New Fund
received by each Shareholder will be equal to the fair market value of the
Current Fund Shares of the corresponding Current Fund surrendered in
exchange therefor;
(b) Immediately following consummation of the Reorganization, the
Shareholders will own all the New Fund Shares of each New Fund and will own
such shares solely by reason of their ownership of the Current Fund Shares
of the corresponding Current Fund immediately before the Reorganization;
(c) The Shareholders will pay their own expenses, if any, incurred in
connection with the Reorganization;
(d) There is no intercompany indebtedness between a Current Fund and a
New Fund that was issued or acquired, or will be settled, at a discount;
and
(e) Immediately following consummation of the Reorganization, each New
Fund will hold the same assets, except for assets distributed to
shareholders in the course of its business as a RIC and assets used to pay
expenses incurred in connection with the Reorganization, and be subject to
the same liabilities that the corresponding Current Fund held or was
subject to immediately prior to the Reorganization. Assets used to pay (i)
expenses, (ii) all redemptions (other than redemptions at the usual rate
and frequency of the Current Fund as a series of an open-end investment
company), and (iii) distributions (other than regular, normal
distributions), made by a
I-9
Current Fund after the date of this Agreement will, in the aggregate,
constitute less than one percent (1%) of its net assets.
5. COVENANTS.
5.1 As soon as practicable after the date of this Agreement, the Company
shall call a meeting of its shareholders (the "Shareholders Meeting") to
consider and act on this Agreement and, in connection therewith, the sale of all
of the Company's assets and the dissolution of the Company as a Maryland
corporation. The Board of Directors of the Company shall recommend that
shareholders approve this Agreement and, in connection therewith, sale of all of
the Company's assets and the dissolution of the Company as a Maryland
corporation. Approval by shareholders of this Agreement will authorize the
Company, and the Company hereby agrees, to vote on the matters referred to in
Sections 5.2 and 5.3.
5.2 Prior to the Closing, the Company shall acquire one New Fund Share in
each New Fund Class of each New Fund for the purpose of enabling the Company to
elect the Company's directors as the Trust's trustees (to serve without limit in
time, except as they may resign or be removed by action of the Trust's trustees
or shareholders), to ratify the selection of the Trust's independent
accountants, and to vote on the matters referred to in Section 5.3.
5.3 Immediately prior to the Closing, the Trust (on its own behalf and
with respect to each New Fund or each New Fund Class, as appropriate) shall
enter into a Master Investment Advisory Agreement, a Master Sub-Advisory
Agreement, if applicable, a Master Administrative Services Agreement, Master
Distribution Agreements, a Custodian Agreement, and a Transfer Agency and
Servicing Agreement; shall adopt plans of distribution pursuant to Rule 12b-l of
the 1940 Act, a multiple class plan pursuant to Rule 18f-3 of the 1940 Act; and
shall enter into or adopt, as appropriate, such other agreements and plans as
are necessary for each New Fund's operation as a series of an open-end
investment company. Each such agreement and plan shall have been approved by the
Trust's trustees and, to the extent required by law, by such of those trustees
who are not "interested persons" of the Trust (as defined in the 1940 Act) and
by the Company as the sole shareholder of each New Fund.
5.4 The Company or the Trust, as appropriate, shall file with the SEC one
or more post-effective amendments to the Company's Registration Statement on
Form N-lA under the Securities Act of 1933, as amended, and the 1940 Act, as
amended (the "Registration Statement"), which (i) will contain such amendments
to such Registration Statement as are determined by the Company to be necessary
and appropriate to effect the Reorganization and (ii) will register the New Fund
Shares to be issued pursuant to Section 2.1 of this Agreement, and shall use its
best efforts to have such post-effective amendment or amendments to the
Registration Statement become effective as of the Closing.
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6. CONDITIONS PRECEDENT.
The obligations of the Company, on its own behalf and on behalf of each Current
Fund, and the Trust, on its own behalf and on behalf of each New Fund, will be
subject to (a) performance by the other party of all its obligations to be
performed hereunder at or before the Effective Time, (b) all representations and
warranties of the other party contained herein being true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated hereby, as of the Effective Time, with the same
force and effect as if made on and as of the Effective Time, and (c) the further
conditions that, at or before the Effective Time:
6.1 The shareholders of the Company shall have approved this Agreement and
the transactions contemplated by this Agreement in accordance with applicable
law.
6.2 All necessary filings shall have been made with the SEC and state
securities authorities, and no order or directive shall have been received that
any other or further action is required to permit the parties to carry out the
transactions contemplated hereby. All consents, orders, and permits of federal,
state, and local regulatory authorities (including the SEC and state securities
authorities) deemed necessary by either the Company or the Trust to permit
consummation, in all material respects, of the transactions contemplated hereby
shall have been obtained, except where failure to obtain such consults, orders,
and permits would not involve a risk of a material adverse effect on the assets
or properties of either a Current Fund or a New Fund, provided that either the
Company or the Trust may for itself waive any of such conditions.
6.3 Each of the Company and the Trust shall have received an opinion from
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP as to the federal income tax consequences
mentioned below. In rendering such opinion, such counsel may rely as to factual
matters, exclusively and without independent verification, on the
representations made in this Agreement (or in separate letters of representation
that the Company and the Trust shall use their best efforts to deliver to such
counsel) and the certificates delivered pursuant to Section 3.4. Such opinion
shall be substantially to the effect that, based on the facts and assumptions
stated therein and conditioned on consummation of the Reorganization in
accordance with this Agreement, for federal income tax purposes:
(a) The Reorganization will constitute a reorganization within the
meaning of section 368(a) of the Code, and each Current Fund and each New
Fund will be "a party to a reorganization" within the meaning of section
368(b) of the Code;
(b) No gain or loss will be recognized to a Current Fund on the
transfer of its Assets to the corresponding New Fund in exchange solely for
the New Fund's New Fund Shares and the New Fund's assumption of the Current
Fund's Liabilities or on the subsequent distribution of those New
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Fund Shares to its Shareholders, in constructive exchange for their Current
Fund Shares, in liquidation of the Current Fund;
(c) No gain or loss will be recognized to a New Fund on its receipt of
the corresponding Current Fund's Assets in exchange for New Fund Shares and
its assumption of the Current Fund's Liabilities;
(d) Each New Fund's basis for the corresponding Current Fund's Assets
will be the same as the basis thereof in the Current Fund's hands
immediately before the Reorganization, and the New Fund's holding period
for those Assets will include the Current Fund's holding period therefor;
(e) A Shareholder will recognize no gain or loss on the constructive
exchange of Current Fund Shares solely for New Fund Shares pursuant to the
Reorganization; and
(f) A Shareholder's basis for the New Fund Shares of each New Fund to
be received in the Reorganization will be the same as the basis for the
Current Fund Shares of the corresponding Current Fund to be constructively
surrendered in exchange for such New Fund Shares, and a Shareholder's
holding period for such New Fund Shares will include its holding period for
such Current Fund Shares, provided that such Current Fund Shares are held
as capital assets by the Shareholder at the Effective Time.
6.4 No stop-order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceeding for that purpose shall have
been initiated or threatened by the SEC (and not withdrawn or terminated).
At any time prior to the Closing, any of the foregoing conditions (except
those set forth in Sections 6.1 and 6.3) may be waived by the directors/trustees
of either the Company or the Trust if, in their judgment, such waiver will not
have a material adverse effect on the interests of the Current Fund's
Shareholders.
7. EXPENSES.
Except as otherwise provided in Section 4.3(c), all expenses incurred in
connection with the transactions contemplated by this Agreement (regardless of
whether they are consummated) will be borne by the parties as they mutually
agree.
8. ENTIRE AGREEMENT.
Neither party has made any representation, warranty, or covenant not set
forth herein, and this Agreement constitutes the entire agreement between the
parties.
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9. AMENDMENT.
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding its approval by the Company's shareholders, in such manner as
may be mutually agreed upon in writing by the parties; provided that following
such approval no such amendment shall have a material adverse effect on the
shareholders' interests.
10. TERMINATION.
This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by the Company's shareholders:
10.1 By either the Company or the Trust (a) in the event of the other
party's material breach of any representation, warranty, or covenant contained
herein to be performed at or prior to the Effective Time, (b) if a condition to
its obligations has not been met and it reasonably appears that such condition
will not or cannot be met, or (c) if the Closing has not occurred on or before
December 31, 2003; or
10.2 By the parties' mutual agreement.
Except as otherwise provided in Section 7, in the event of termination
under Sections 10.1(c) or 10.2, there shall be no liability for damages on the
part of either the Company or the Trust or any Current Fund or corresponding New
Fund, to the other.
11. MISCELLANEOUS.
11.1 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware; provided that, in the case of any
conflict between such laws and the federal securities laws, the latter shall
govern.
11.2 Nothing expressed or implied herein is intended or shall be construed
to confer upon or give any person, firm, trust, or corporation other than the
parties and their respective successors and assigns any rights or remedies under
or by reason of this Agreement.
11.3 The execution and delivery of this Agreement have been authorized by
the Trust's trustees, and this Agreement has been executed and delivered by a
duly authorized officer of the Trust in his or her capacity as an officer of the
Trust intending to bind the Trust as provided herein, and no officer, trustee or
shareholder of the Trust shall be personally liable for the liabilities or
obligations of the Trust incurred hereunder. The liabilities and obligations of
the Trust pursuant to this Agreement shall be enforceable against the assets of
the New Funds only and not against the assets of the Trust generally.
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IN WITNESS WHEREOF, each party has caused this Agreement to be executed and
delivered by its duly authorized officers as of the day and year first written
above.
Attest: SHORT-TERM INVESTMENTS CO., on behalf of
each of its series listed in Schedule A
--------------------------------------- By:
--------------------------------------
Title:--------------------------------
Attest: SHORT-TERM INVESTMENTS TRUST, on behalf of
each of its series listed in Schedule A
--------------------------------------- By:
--------------------------------------
Title:--------------------------------
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SCHEDULE A
CORRESPONDING SERIES OF SHORT-TERM
SERIES OF SHORT-TERM INVESTMENTS CO. INVESTMENTS TRUST
(EACH A "CURRENT FUND") (EACH A "NEW FUND")
------------------------------------ ----------------------------------
Cash Assets Portfolio.............. Cash Assets Portfolio
Liquid Assets Portfolio............ Liquid Assets Portfolio
Prime Portfolio.................... STIC Prime Portfolio
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SCHEDULE B
CLASSES OF EACH CURRENT FUND CORRESPONDING CLASSES OF EACH NEW FUND
---------------------------- --------------------------------------
Cash Assets Portfolio.............. Cash Assets Portfolio
Institutional Class Shares....... Institutional Class Shares
Liquid Assets Portfolio............ Liquid Assets Portfolio
Cash Management Class Shares..... Cash Management Class Shares
Institutional Class Shares....... Institutional Class Shares
Personal Investment Class Personal Investment Class Shares
Shares........................
Private Investment Class Private Investment Class Shares
Shares........................
Reserve Class Shares............. Reserve Class Shares
Resource Class Shares............ Resource Class Shares
Sweep Class Shares............... Sweep Class Shares
Prime Portfolio.................... STIC Prime Portfolio
Cash Management Class Shares..... Cash Management Class Shares
Institutional Class Shares....... Institutional Class Shares
Personal Investment Class Personal Investment Class Shares
Shares........................
Private Investment Class Private Investment Class Shares
Shares........................
Reserve Class Shares............. Reserve Class Shares
Resource Class Shares............ Resource Class Shares
Sweep Class Shares............... Sweep Class Shares
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SCHEDULE C
PERMITTED COMBINATIONS OF FUNDS
INVESCO Advantage Fund into AIM Opportunities III Fund
INVESCO Growth Fund into AIM Large Cap Growth Fund
INVESCO Growth & Income Fund into AIM Blue Chip Fund
INVESCO European Fund into AIM European Growth Fund
AIM International Core Equity Fund into INVESCO International Blue Chip Value
Fund
AIM New Technology Fund into INVESCO Technology Fund
AIM Global Science and Technology Fund into INVESCO Technology Fund
INVESCO Telecommunications Fund into INVESCO Technology Fund
AIM Global Financial Services Fund into INVESCO Financial Services Fund
AIM Global Energy Fund into INVESCO Energy Fund
AIM Global Utilities Fund into INVESCO Utilities Fund
INVESCO Real Estate Opportunity Fund into AIM Real Estate Fund
INVESCO Tax-Free Bond Fund into AIM Municipal Bond Fund
INVESCO High Yield Fund into AIM High Yield Fund
INVESCO Select Income Fund into AIM Income Fund
INVESCO U.S. Government Securities Fund into AIM Intermediate Government Fund
INVESCO Cash Reserves Fund into AIM Money Market Fund
INVESCO Tax-Free Money Fund into AIM Tax-Exempt Cash Fund
INVESCO Balanced Fund into INVESCO Total Return Fund
INVESCO Value Equity Fund into AIM Large Cap Basic Value Fund
AIM Premier Equity II Fund into AIM Premier Equity Fund
I-17
APPENDIX II
TAX-FREE INVESTMENTS CO.
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of July
30, 2003, by and between Tax-Free Investments Co., a Maryland corporation (the
"Company"), acting on its own behalf and on behalf of each of its series
portfolios, all of which are identified on Schedule A to this Agreement, and
Tax-Free Investments Trust, a Delaware statutory trust (the "Trust"), acting on
its own behalf and on behalf of each of its series portfolios, all of which are
identified on Schedule A.
BACKGROUND
The Company is organized as a series management investment company and is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended. The Company currently publicly offers shares of
common stock representing interests in one or more separate series portfolios.
Each of these series portfolios is listed on Schedule A and is referred to in
this Agreement as a "Current Fund."
The Board of Directors of the Company has designated multiple classes of
common stock that represent interests in each Current Fund. Each of these
classes is listed on Schedule B to this Agreement and is referred to in this
Agreement as a "Current Fund Class."
The Company desires to change its form and place of organization by
reorganizing as the Trust. In anticipation of such reorganization, the Board of
Trustees of the Trust has established a series portfolio corresponding to each
of the Current Funds (each a "New Fund"), and has designated multiple classes of
shares of beneficial interest in each New Fund corresponding to the Current Fund
Classes (each a "New Fund Class"). Schedule A lists the New Funds and Schedule B
lists the New Fund Classes.
Each Current Fund desires to provide for its Reorganization (each, a
"Reorganization" and collectively, the "Reorganizations") through the transfer
of all of its assets to the corresponding New Fund in exchange for the
assumption by such New Fund of the liabilities of the corresponding Current Fund
and the issuance by the Trust to such Current Fund of shares of beneficial
interest in the New Fund ("New Fund Shares"). New Fund Shares received by a
Current Fund will have an aggregate net asset value equal to the aggregate net
asset value of the shares of the Current Fund immediately prior to the
Reorganization (the "Current Fund Shares"). Each Current Fund will then
distribute the New Fund Shares it has received to its shareholders.
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Each Reorganization of each Current Fund is dependent upon the consummation
of the Reorganization of all of the other Current Funds, so that the
Reorganizations of all of the Current Funds must be consummated if any of them
are to be consummated. For convenience, the balance of this Agreement refers
only to a single Reorganization, but the terms and conditions hereof shall apply
separately to each Reorganization and to the Current Fund and the corresponding
New Fund participating therein, as applicable.
The Reorganization is subject to, and shall be effected in accordance with,
the terms of this Agreement. This Agreement is intended to be and is adopted by
the Company, on its own behalf and on behalf of the Current Funds, and by the
Trust, on its own behalf and on behalf of the New Funds, as a Plan of
Reorganization within the meaning of the regulations under Section 368(a) of the
Internal Revenue Code of 1986, as amended.
NOW THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS
Any capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the preamble or background to this Agreement. In addition,
the following terms shall have the following meanings:
1.1 "Assets" shall mean all assets including, without limitation, all
cash, cash equivalents, securities, receivables (including interest and
dividends receivable), claims and rights of action, rights to register shares
under applicable securities laws, books and records, deferred and prepaid
expenses shown as assets on a Current Fund's books, and other property owned by
a Current Fund at the Effective Time.
1.2 "Closing" shall mean the consummation of the transfer of Assets,
assumption of Liabilities and issuance of shares described in Sections 2.1 and
2.2 of this Agreement, together with the related acts necessary to consummate
the Reorganization, to occur on the date set forth in Section 3.1.
1.3 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.4 "Current Fund" shall mean each of the series portfolios of the Company
as shown on Schedule A.
1.5 "Current Fund Class" shall mean each class of common stock of the
Company representing an interest in a Current Fund as shown on Schedule B.
1.6 "Current Fund Shares" shall mean the shares of a Current Fund
outstanding immediately prior to the Reorganization.
1.7 "Effective Time" shall have the meaning set forth in Section 3.1.
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1.8 "Liabilities" shall mean all liabilities of a Current Fund including,
without limitation, all debts, obligations, and duties of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether or not
determinable at the Effective Time, and whether or not specifically referred to
herein.
1.9 "New Fund" shall mean each of the series portfolios of the Trust, one
of which shall correspond to one of the Current Funds as shown on Schedule A.
1.10 "New Fund Class" shall mean each class of shares of beneficial
interest in a New Fund, one of which shall correspond to one of the Current Fund
Classes as shown on Schedule B.
1.11 "New Fund Shares" shall mean those shares of beneficial interest in a
New Fund issued to a Current Fund hereunder.
1.12 "Registration Statement" shall have the meaning set forth in Section
5.4.
1.13 "RIC" shall mean a "regulated investment company" (as defined under
Subchapter M of the Code).
1.14 "SEC" shall mean the Securities and Exchange Commission.
1.15 "Shareholder(s)" shall mean a Current Fund's shareholder(s) of
record, determined as of the Effective Time.
1.16 "Shareholders Meeting" shall have the meaning set forth in Section
5.1.
1.17 "Transfer Agent" shall have the meaning set forth in Section 2.2.
1.18 "1940 Act" shall mean the Investment Company Act of 1940, as amended.
2. PLAN OF REORGANIZATION
2.1 The Company agrees, on behalf of each Current Fund, to assign, sell,
convey, transfer and deliver all of the Assets of each Current Fund to its
corresponding New Fund. The Trust, on behalf of each New Fund, agrees in
exchange therefor:
(a) to issue and deliver to the corresponding Current Fund the number
of full and fractional (rounded to the third decimal place) New Fund Shares
of each New Fund Class designated on Schedule B equal to the number of full
and fractional Current Fund Shares of each corresponding Current Fund Class
designated on Schedule B; and
(b) to assume all of the Current Fund's Liabilities.
Such transactions shall take place at the Closing.
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2.2 At the Effective Time (or as soon thereafter as is reasonably
practicable), (a) the New Fund Shares issued pursuant to Section 5.2 shall be
redeemed by each New Fund for $10.00 and (b) each Current Fund shall distribute
the New Fund Shares received by it pursuant to Section 2.1 to the Current Fund's
Shareholders in exchange for such Shareholders' Current Fund Shares. Such
distribution shall be accomplished through opening accounts, by the transfer
agent for the Trust (the "Transfer Agent"), on each New Fund's share transfer
books in the Shareholders' names and transferring New Fund Shares to such
accounts. Each Shareholder's account shall be credited with the respective pro
rata number of full and fractional (rounded to the third decimal place) New Fund
Shares of each New Fund Class due that Shareholder. All outstanding Current Fund
Shares, including those represented by certificates, shall simultaneously be
canceled on each Current Fund's share transfer books. The Trust shall not issue
certificates representing the New Fund Shares in connection with the
Reorganization. However, certificates representing Current Fund Shares shall
represent New Fund Shares after the Reorganization.
2.3 Following receipt of the required shareholder vote and as soon as
reasonably practicable after the Closing, the status of each Current Fund as a
designated series of the Company shall be terminated; provided, however, that
the termination of each Current Fund as a designated series of the Company shall
not be required if the Reorganization shall not have been consummated.
2.4 Following receipt of the required shareholder vote and as soon as
reasonably practicable after distribution of the New Fund Shares pursuant to
Section 2.2, the Company and the Trust shall cause Articles of Transfer to be
filed with the State Department of Assessments and Taxation of Maryland and,
following the filing of Articles of Transfer, the Company shall file Articles of
Dissolution with the State Department of Assessments and Taxation of Maryland to
dissolve the Company as a Maryland corporation; provided, however, that the
filing of Articles of Transfer and Articles of Dissolution as aforesaid shall
not be required if the Reorganization shall not have been consummated.
2.5 Any transfer taxes payable on issuance of New Fund Shares in a name
other than that of the registered holder of the Current Fund Shares exchanged
therefor shall be paid by the person to whom such New Fund Shares are to be
issued, as a condition of such transfer.
2.6 Any reporting responsibility of the Company or each Current Fund to a
public authority is and shall remain its responsibility up to and including the
date on which it is terminated.
3. CLOSING
3.1 The Closing shall occur at the principal office of the Company on
November 4, 2003, or on such other date and at such other place upon which the
parties may agree. All acts taking place at the Closing shall be deemed to take
II-4
place simultaneously as of the Company's and the Trust's close of business on
the date of the Closing or at such other time as the parties may agree (the
"Effective Time").
3.2 The Company or its fund accounting agent shall deliver to the Trust at
the Closing, a certificate of an authorized officer verifying that the
information (including adjusted basis and holding period, by lot) concerning the
Assets, including all portfolio securities, transferred by the Current Funds to
the New Funds, as reflected on the New Funds' books immediately following the
Closing, does or will conform to such information on the Current Funds' books
immediately before the Closing. The Company shall cause the custodian for each
Current Fund to deliver at the Closing a certificate of an authorized officer of
the custodian stating that (a) the Assets held by the custodian will be
transferred to each corresponding New Fund at the Effective Time and (b) all
necessary taxes in conjunction with the delivery of the Assets, including all
applicable federal and state stock transfer stamps, if any, have been paid or
provision for payment has been made.
3.3 The Company shall deliver to the Trust at the Closing a list of the
names and addresses of each Shareholder of each Current Fund and the number of
outstanding Current Fund Shares of the Current Fund Class owned by each
Shareholder, all as of the Effective Time, certified by the Company's Secretary
or Assistant Secretary. The Trust shall cause the Transfer Agent to deliver at
the Closing a certificate as to the opening on each New Fund's share transfer
books of accounts in the Shareholders' names. The Trust shall issue and deliver
a confirmation to the Company evidencing the New Fund Shares to be credited to
each corresponding Current Fund at the Effective Time or provide evidence
satisfactory to the Company that such shares have been credited to each Current
Fund's account on such books. At the Closing, each party shall deliver to the
other such bills of sale, checks, assignments, stock certificates, receipts, or
other documents as the other party or its counsel may reasonably request.
3.4 The Company and the Trust shall deliver to the other at the Closing a
certificate executed in its name by its President or a Vice President in form
and substance satisfactory to the recipient and dated the Effective Time, to the
effect that the representations and warranties it made in this Agreement are
true and correct at the Effective Time except as they may be affected by the
transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Company represents and warrants on its own behalf and on behalf of
each Current Fund as follows:
(a) The Company is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Maryland, and its Charter
is on file with the Maryland Department of Assessments and Taxation;
II-5
(b) The Company is duly registered as an open-end series management
investment company under the 1940 Act, and such registration is in full
force and effect;
(c) Each Current Fund is a duly established and designated series of
the Company;
(d) At the Closing, each Current Fund will have good and marketable
title to its Assets and full right, power, and authority to sell, assign,
transfer, and deliver its Assets free of any liens or other encumbrances;
and upon delivery and payment for the Assets, the corresponding New Fund
will acquire good and marketable title to the Assets;
(e) The New Fund Shares are not being acquired for the purpose of
making any distribution thereof, other than in accordance with the terms
hereof;
(f) Each Current Fund is a "fund" as defined in Section 851(g)(2) of
the Code; each Current Fund qualified for treatment as a RIC for each
taxable year since it commenced operations that has ended (or will end)
before the Closing and will continue to meet all the requirements for such
qualification for its current taxable year (and the Assets will be invested
at all times through the Effective Time in a manner that ensures compliance
with the foregoing); each Current Fund has no earnings and profits
accumulated in any taxable year in which the provisions of Subchapter M did
not apply to it; and each Current Fund has made all distributions for each
calendar year that has ended (or will end) before the Closing that are
necessary to avoid the imposition of federal excise tax or has paid or
provided for the payment of any excise tax imposed for any such calendar
year;
(g) During the five-year period ending on the date of the
Reorganization, neither Company nor any person related to Company (as
defined in Section 1.368-1(e)(3) of the Federal income tax regulations
adopted pursuant to the Code without regard to Section 1.368-1(e)(3)(i)(A))
will have directly or through any transaction, agreement, or arrangement
with any other person, (i) acquired shares of a Current Fund for
consideration other than shares of such Current Fund, except for shares
redeemed in the ordinary course of such Current Fund's business as an
open-end investment company as required by the 1940 Act, or (ii) made
distributions with respect to a Current Fund's shares, except for (a)
distributions necessary to satisfy the requirements of Sections 852 and
4982 of the Code for qualification as a regulated investment company and
avoidance of excise tax liability and (b) additional distributions, to the
extent such additional distributions do not exceed 50 percent of the value
(without giving effect to such distributions) of the proprietary interest
in such Current Fund at the Effective Time. There is no plan or intention
of the Shareholders who
II-6
individually own 5% or more of any Current Fund Shares and, to the best of
the Company's knowledge, there is no plan or intention of the remaining
Shareholders to redeem or otherwise dispose of any New Fund Shares to be
received by them in the Reorganization. The Company does not anticipate
dispositions of those shares at the time of or soon after the
Reorganization to exceed the usual rate and frequency of redemptions of
shares of the Current Fund as a series of an open-end investment company.
Consequently, the Company is not aware of any plan that would cause the
percentage of Shareholder interests, if any, that will be disposed of as a
result of or at the time of the Reorganization to be one percent (1%) or
more of the shares of the Current Fund outstanding as of the Effective
Time;
(h) The Liabilities were incurred by the Current Funds in the ordinary
course of their business and are associated with the Assets;
(i) The Company is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code or similar case within
the meaning of Section 368(a)(3)(A) of the Code;
(j) As of the Effective Time, no Current Fund will have outstanding
any warrants, options, convertible securities, or any other type of rights
pursuant to which any person could acquire Current Fund Shares except for
the right of investors to acquire its shares at net asset value in the
normal course of its business as a series of an open-end diversified
management investment company operating under the 1940 Act;
(k) At the Effective Time, the performance of this Agreement shall
have been duly authorized by all necessary action by the Company's
shareholders;
(l) Throughout the five-year period ending on the date of the Closing,
each Current Fund will have conducted its historic business within the
meaning of Section 1.368-1(d) of the Income Tax Regulations under the Code
in a substantially unchanged manner;
(m) The fair market value of the Assets of each Current Fund
transferred to the corresponding New Fund will equal or exceed the sum of
the Liabilities assumed by the New Fund plus the amount of Liabilities, if
any, to which the transferred Assets are subject; and
(n) The total adjusted basis of the Assets of each Current Fund
transferred to the corresponding New Fund will equal or exceed the sum of
the Liabilities assumed by the New Fund plus the amount of Liabilities, if
any, to which the transferred assets are subject.
II-7
4.2 The Trust represents and warrants on its own behalf and on behalf of
each New Fund as follows:
(a) The Trust is a statutory trust duly organized, validly existing,
and in good standing under the laws of the State of Delaware, and its
Certificate of Trust has been duly filed in the office of the Secretary of
State of Delaware;
(b) At the Effective Time, the Trust will succeed to the Company's
registration statement filed under the 1940 Act with the SEC and thus will
become duly registered as an open-end management investment company under
the 1940 Act;
(c) At the Effective Time, each New Fund will be a duly established
and designated series of the Trust;
(d) No New Fund has commenced operations nor will it commence
operations until after the Closing;
(e) Prior to the Effective Time, there will be no issued and
outstanding shares in any New Fund or any other securities issued by the
Trust on behalf of any New Fund, except as provided in Section 5.2;
(f) No consideration other than New Fund Shares (and each New Fund's
assumption of the Liabilities) will be issued in exchange for the Assets in
the Reorganization;
(g) The New Fund Shares to be issued and delivered to each
corresponding Current Fund hereunder will, at the Effective Time, have been
duly authorized and, when issued and delivered as provided herein, will be
duly and validly issued and outstanding shares of the New Fund, fully paid
and nonassessable;
(h) Each New Fund will be a "fund" as defined in Section 851(g)(2) of
the Code and will meet all the requirements to qualify for treatment as a
RIC for its taxable year in which the Reorganization occurs;
(i) The Trust, on behalf of the New Funds, has no plan or intention to
issue additional New Fund Shares following the Reorganization except for
shares issued in the ordinary course of its business as an open-end
investment company; nor does the Trust, on behalf of the New Funds, have
any plan or intention to redeem or otherwise reacquire any New Fund Shares
issued pursuant to the Reorganization, other than in the ordinary course of
such business or to the extent necessary to comply with its legal
obligation under Section 22(e) of the 1940 Act;
(j) Each New Fund will actively continue the corresponding Current
Fund's business in substantially the same manner that the Current Fund
conducted that business immediately before the Reorganization; and no New
Fund has any plan or intention to sell or otherwise dispose of any of the
II-8
Assets, except for dispositions made in the ordinary course of its business
or dispositions necessary to maintain its qualification as a RIC, although
in the ordinary course of its business the New Fund will continuously
review its investment portfolio (as each Current Fund did before the
Reorganization) to determine whether to retain or dispose of particular
stocks or securities, including those included in the Assets, provided,
however that this Section 4.2(j) shall not preclude any of the combinations
of funds set forth on Schedule C to this Agreement; and
(k) There is no plan or intention for any of the New Funds to be
dissolved or merged into another corporation or statutory trust or "fund"
thereof (within the meaning of Section 851(g)(2) of the Code) following the
Reorganization, provided, however that this Section 4.2(k) shall not
preclude any of the combinations of Funds set forth on Schedule C.
4.3 Each of the Company and the Trust, on its own behalf and on behalf of
each Current Fund or each New Fund, as appropriate, represents and warrants as
follows:
(a) The fair market value of the New Fund Shares of each New Fund
received by each Shareholder will be equal to the fair market value of the
Current Fund Shares of the corresponding Current Fund surrendered in
exchange therefor;
(b) Immediately following consummation of the Reorganization, the
Shareholders will own all the New Fund Shares of each New Fund and will own
such shares solely by reason of their ownership of the Current Fund Shares
of the corresponding Current Fund immediately before the Reorganization;
(c) The Shareholders will pay their own expenses, if any, incurred in
connection with the Reorganization;
(d) There is no intercompany indebtedness between a Current Fund and a
New Fund that was issued or acquired, or will be settled, at a discount;
and
(e) Immediately following consummation of the Reorganization, each New
Fund will hold the same assets, except for assets distributed to
shareholders in the course of its business as a RIC and assets used to pay
expenses incurred in connection with the Reorganization, and be subject to
the same liabilities that the corresponding Current Fund held or was
subject to immediately prior to the Reorganization. Assets used to pay (i)
expenses, (ii) all redemptions (other than redemptions at the usual rate
and frequency of the Current Fund as a series of an open-end investment
company), and (iii) distributions (other than regular, normal
distributions), made by a Current Fund after the date of this Agreement
will, in the aggregate, constitute less than one percent (1%) of its net
assets.
II-9
5. COVENANTS
5.1 As soon as practicable after the date of this Agreement, the Company
shall call a meeting of its shareholders (the "Shareholders Meeting") to
consider and act on this Agreement and, in connection therewith, the sale of all
of the Company's assets and the dissolution of the Company as a Maryland
corporation. The Board of Directors of the Company shall recommend that
shareholders approve this Agreement and, in connection therewith, sale of all of
the Company's assets and the dissolution of the Company as a Maryland
corporation. Approval by shareholders of this Agreement will authorize the
Company, and the Company hereby agrees, to vote on the matters referred to in
Sections 5.2 and 5.3.
5.2 Prior to the Closing, the Company shall acquire one New Fund Share in
each New Fund Class of each New Fund for the purpose of enabling the Company to
elect the Company's directors as the Trust's trustees (to serve without limit in
time, except as they may resign or be removed by action of the Trust's trustees
or shareholders), to ratify the selection of the Trust's independent
accountants, and to vote on the matters referred to in Section 5.3.
5.3 Immediately prior to the Closing, the Trust (on its own behalf and
with respect to each New Fund or each New Fund Class, as appropriate) shall
enter into a Master Investment Advisory Agreement, a Master Sub-Advisory
Agreement, if applicable, a Master Administrative Services Agreement, Master
Distribution Agreements, a Custodian Agreement, and a Transfer Agency and
Servicing Agreement; shall adopt plans of distribution pursuant to Rule 12b-l of
the 1940 Act, a multiple class plan pursuant to Rule 18f-3 of the 1940 Act; and
shall enter into or adopt, as appropriate, such other agreements and plans as
are necessary for each New Fund's operation as a series of an open-end
investment company. Each such agreement and plan shall have been approved by the
Trust's trustees and, to the extent required by law, by such of those trustees
who are not "interested persons" of the Trust (as defined in the 1940 Act) and
by the Company as the sole shareholder of each New Fund.
5.4 The Company or the Trust, as appropriate, shall file with the SEC one
or more post-effective amendments to the Company's Registration Statement on
Form N-lA under the Securities Act of 1933, as amended, and the 1940 Act, as
amended (the "Registration Statement"), (i) which contain such amendments to
such Registration Statement as are determined by the Company to be necessary and
appropriate to effect the Reorganization and (ii) pursuant to which the Trust
adopts such Registration Statement, as so amended, as its own, and shall use its
best efforts to have such post-effective amendment or amendments to the
Registration Statement become effective as of the Closing.
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6. CONDITIONS PRECEDENT
The obligations of the Company, on its own behalf and on behalf of each
Current Fund, and the Trust, on its own behalf and on behalf of each New Fund,
will be subject to (a) performance by the other party of all its obligations to
be performed hereunder at or before the Effective Time, (b) all representations
and warranties of the other party contained herein being true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated hereby, as of the Effective Time, with the same
force and effect as if made on and as of the Effective Time, and (c) the further
conditions that, at or before the Effective Time:
6.1 The shareholders of the Company shall have approved this Agreement and
the transactions contemplated by this Agreement in accordance with applicable
law.
6.2 All necessary filings shall have been made with the SEC and state
securities authorities, and no order or directive shall have been received that
any other or further action is required to permit the parties to carry out the
transactions contemplated hereby. All consents, orders, and permits of federal,
state, and local regulatory authorities (including the SEC and state securities
authorities) deemed necessary by either the Company or the Trust to permit
consummation, in all material respects, of the transactions contemplated hereby
shall have been obtained, except where failure to obtain such consults, orders,
and permits would not involve a risk of a material adverse effect on the assets
or properties of either a Current Fund or a New Fund, provided that either the
Company or the Trust may for itself waive any of such conditions.
6.3 Each of the Company and the Trust shall have received an opinion from
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP as to the federal income tax consequences
mentioned below. In rendering such opinion, such counsel may rely as to factual
matters, exclusively and without independent verification, on the
representations made in this Agreement (or in separate letters of representation
that the Company and the Trust shall use their best efforts to deliver to such
counsel) and the certificates delivered pursuant to Section 3.4. Such opinion
shall be substantially to the effect that, based on the facts and assumptions
stated therein and conditioned on consummation of the Reorganization in
accordance with this Agreement, for federal income tax purposes:
(a) The Reorganization will constitute a reorganization within the
meaning of section 368(a) of the Code, and each Current Fund and each New
Fund will be "a party to a reorganization" within the meaning of section
368(b) of the Code;
(b) No gain or loss will be recognized to a Current Fund on the
transfer of its Assets to the corresponding New Fund in exchange solely for
the New Fund's New Fund Shares and the New Fund's assumption of the Current
Fund's Liabilities or on the subsequent distribution of those New
II-11
Fund Shares to its Shareholders, in constructive exchange for their Current
Fund Shares, in liquidation of the Current Fund;
(c) No gain or loss will be recognized to a New Fund on its receipt of
the corresponding Current Fund's Assets in exchange for New Fund Shares and
its assumption of the Current Fund's Liabilities;
(d) Each New Fund's basis for the corresponding Current Fund's Assets
will be the same as the basis thereof in the Current Fund's hands
immediately before the Reorganization, and the New Fund's holding period
for those Assets will include the Current Fund's holding period therefor;
(e) A Shareholder will recognize no gain or loss on the constructive
exchange of Current Fund Shares solely for New Fund Shares pursuant to the
Reorganization; and
(f) A Shareholder's basis for the New Fund Shares of each New Fund to
be received in the Reorganization will be the same as the basis for the
Current Fund Shares of the corresponding Current Fund to be constructively
surrendered in exchange for such New Fund Shares, and a Shareholder's
holding period for such New Fund Shares will include its holding period for
such Current Fund Shares, provided that such Current Fund Shares are held
as capital assets by the Shareholder at the Effective Time.
6.4 No stop-order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceeding for that purpose shall have
been initiated or threatened by the SEC (and not withdrawn or terminated).
At any time prior to the Closing, any of the foregoing conditions (except
those set forth in Sections 6.1 and 6.3) may be waived by the directors/trustees
of either the Company or the Trust if, in their judgment, such waiver will not
have a material adverse effect on the interests of the Current Fund's
Shareholders.
7. EXPENSES
Except as otherwise provided in Section 4.3(c), all expenses incurred in
connection with the transactions contemplated by this Agreement (regardless of
whether they are consummated) will be borne by the parties as they mutually
agree.
8. ENTIRE AGREEMENT
Neither party has made any representation, warranty, or covenant not set
forth herein, and this Agreement constitutes the entire agreement between the
parties.
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9. AMENDMENT
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding its approval by the Company's shareholders, in such manner as
may be mutually agreed upon in writing by the parties; provided that following
such approval no such amendment shall have a material adverse effect on the
shareholders' interests.
10. TERMINATION
This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by the Company's shareholders:
10.1 By either the Company or the Trust (a) in the event of the other
party's material breach of any representation, warranty, or covenant contained
herein to be performed at or prior to the Effective Time, (b) if a condition to
its obligations has not been met and it reasonably appears that such condition
will not or cannot be met, or (c) if the Closing has not occurred on or before
December 31, 2003; or
10.2 By the parties' mutual agreement.
Except as otherwise provided in Section 7, in the event of termination
under Sections 10.1(c) or 10.2, there shall be no liability for damages on the
part of either the Company or the Trust or any Current Fund or corresponding New
Fund, to the other.
11. MISCELLANEOUS
11.1 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware; provided that, in the case of any
conflict between such laws and the federal securities laws, the latter shall
govern.
11.2 Nothing expressed or implied herein is intended or shall be construed
to confer upon or give any person, firm, trust, or corporation other than the
parties and their respective successors and assigns any rights or remedies under
or by reason of this Agreement.
11.3 The execution and delivery of this Agreement have been authorized by
the Trust's trustees, and this Agreement has been executed and delivered by a
duly authorized officer of the Trust in his or her capacity as an officer of the
Trust intending to bind the Trust as provided herein, and no officer, trustee or
shareholder of the Trust shall be personally liable for the liabilities or
obligations of the Trust incurred hereunder. The liabilities and obligations of
the Trust pursuant to this Agreement shall be enforceable against the assets of
the New Funds only and not against the assets of the Trust generally.
II-13
IN WITNESS WHEREOF, each party has caused this Agreement to be executed and
delivered by its duly authorized officers as of the day and year first written
above.
Attest: TAX-FREE INVESTMENTS CO.,
on behalf of each of its series
listed in Schedule A
By:
-----------------------------
---------------------------------
Title:
---------------------------
Attest: TAX-FREE INVESTMENTS TRUST,
on behalf of each of its series
listed in Schedule A
By:
-----------------------------
---------------------------------
Title:
---------------------------
II-14
SCHEDULE A
SERIES OF TAX-FREE INVESTMENTS CO. CORRESPONDING SERIES OF TAX-FREE
(EACH A "CURRENT FUND") INVESTMENTS TRUST (EACH A "NEW FUND")
---------------------------------- -------------------------------------
Cash Reserve Portfolio.............. Tax-Free Cash Reserve Portfolio
II-15
SCHEDULE B
CLASSES OF EACH CURRENT FUND CORRESPONDING CLASSES OF EACH NEW FUND
---------------------------- --------------------------------------
Cash Reserve Portfolio Tax-Free Cash Reserve Portfolio
Cash Management Class Share...... Cash Management Class Share
Institutional Class Shares....... Institutional Class Shares
Personal Investment Class Personal Investment Class Shares
Shares........................
Private Investment Class Private Investment Class Shares
Shares........................
Reserve Class Shares............. Reserve Class Shares
Resource Class Shares............ Resource Class Shares
Sweep Class Shares............... Sweep Class Shares
II-16
SCHEDULE C
PERMITTED COMBINATIONS OF FUNDS
INVESCO Advantage Fund into AIM Opportunities III Fund
INVESCO Growth Fund into AIM Large Cap Growth Fund
INVESCO Growth & Income Fund into AIM Blue Chip Fund
INVESCO European Fund into AIM European Growth Fund
AIM International Core Equity Fund into INVESCO
International Blue Chip Value Fund
AIM New Technology Fund into INVESCO Technology Fund
AIM Global Science and Technology Fund into INVESCO
Technology Fund
INVESCO Telecommunications Fund into INVESCO Technology Fund
AIM Global Financial Services Fund into INVESCO Financial
Services Fund
AIM Global Energy Fund into INVESCO Energy Fund
AIM Global Utilities Fund into INVESCO Utilities Fund
INVESCO Real Estate Opportunity Fund into AIM Real Estate
Fund
INVESCO Tax-Free Bond Fund into AIM Municipal Bond Fund
INVESCO High Yield Fund into AIM High Yield Fund
INVESCO Select Income Fund into AIM Income Fund
INVESCO U.S. Government Securities Fund into AIM
Intermediate Government Fund
INVESCO Cash Reserves Fund into AIM Money Market Fund
INVESCO Tax-Free Money Fund into AIM Tax-Exempt Cash Fund
INVESCO Balanced Fund into INVESCO Total Return Fund
INVESCO Value Equity Fund into AIM Large Cap Basic Value
Fund
AIM Premier Equity II Fund into AIM Premier Equity Fund
II-17
EXHIBIT A
SHARES OF SHORT-TERM INVESTMENTS CO.
OUTSTANDING ON JULY 25, 2003
NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND (CLASS) JULY 25, 2003
-------------------- -----------------
Cash Assets Portfolio
Institutional Class.............................. 10.00
Liquid Assets Portfolio
Cash Management Class............................ 4,687,238,097.62
Institutional Class.............................. 21,021,238,245.50
Personal Investment Class........................ 51,885,916.76
Private Investment Class......................... 933,326,775.22
Reserve Class.................................... 56,443,261.48
Resource Class................................... 1,447,105,093.58
Sweep Class...................................... None
Prime Portfolio
Cash Management Class............................ 588,776,466.79
Institutional Class.............................. 6,041,152,110.60
Personal Investment Class........................ 137,484,963.47
Private Investment Class......................... 420,100,386.61
Reserve Class.................................... 106,834,510.39
Resource Class................................... 82,309,630.66
Sweep Class...................................... None
SHARES OF TAX-FREE INVESTMENTS CO.
OUTSTANDING ON JULY 25, 2003
NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND (CLASS) JULY 25, 2003
-------------------- ----------------
Cash Reserve Portfolio
Cash Management Class............................ 615,792,461.09
Institutional Class.............................. 1,340,139,611.85
Personal Investment Class........................ 12,040,194.11
Private Investment Class......................... 313,261,725.19
Reserve Class.................................... 11,989,604.12
Resource Class................................... 315,337,377.89
Sweep Class...................................... None
A-1
EXHIBIT B
DIRECTOR COMPENSATION TABLE
Set forth below is information regarding compensation paid or accrued for
each director of each Company who was not affiliated with AIM during the year
ended December 31, 2002.
AGGREGATE COMPENSATION FROM
COMPANY(1) RETIREMENT ESTIMATED TOTAL
--------------------------------- BENEFITS ANNUAL COMPENSATION
SHORT-TERM TAX-FREE ACCRUED BY ALL BENEFITS UPON FROM ALL
NAME OF DIRECTOR INVESTMENTS CO. INVESTMENTS CO. AIM FUNDS(2) RETIREMENT(3) AIM FUNDS(4)
---------------- --------------- --------------- -------------- ------------- ------------
Xxxxx X. Xxxxxx...... $24,539 $2,170 $142,800 $90,000 $150,000
Xxxxx X. Xxxxxxxx.... 26,210 2,156 50,132 90,000 149,000
Xxxx Xxxx XX(5)...... 7,902 -0- 40,045 75,000 -0-
Xxxxxx X. Xxxxxx..... 26,210 2,170 57,955 90,000 150,000
Xxxxxx X. Xxxx,
Xx.................. 26,210 2,156 94,149 90,000 149,000
Xxxx X. Xxxxxx....... 26,117 2,170 29,153 90,000 153,000
Xxxx Xxxxxxxxxx(6)... 26,117 2,170 74,511 90,000 150,000
Xxxxx Xxxxxx-Xxxxx... 26,210 2,170 33,931 90,000 150,000
Xxxxx X. Xxxxxxx..... 26,967 2,170 54,802 90,000 154,000
Xxxx X. Xxxxxxx...... 24,632 2,170 142,502 90,000 153,000
Xxxxx X. Xxxxx....... 26,967 2,156 78,500 90,000 153,000
---------------
(1) Amounts shown for Short-Term Investments Co. and Tax-Free Investments Co.
are based on the fiscal years ended August 31, 2002 and March 31, 2003,
respectively. The total amount of compensation deferred by all directors of
Short-Term Investments Co. during the fiscal year ended August 31, 2002,
including earnings, was $130,885. The total amount of compensation deferred
by all directors of Tax-Free Investments Co. during the fiscal year ended
March 31, 2003, including earnings, was $8,539.
(2) During the fiscal year ended August 31, 2002, the total amount of expenses
allocated to Short-Term Investments Co. in respect of such retirement
benefits was $76,779. During the fiscal year ended March 31, 2003, the total
amount of expenses allocated to Tax-Free Investments Co. in respect of such
retirement benefits was $17,575.
(3) Xxxxxxx shown assume each director serves until his or her normal retirement
date.
(4) All directors currently serve as directors or trustees of 17 registered
investment companies advised by AIM.
(5) Xx. Xxxx was a director until December 31, 2001, when he retired.
(6) During the fiscal year ended August 31, 2002, Short-Term Investments Co.
paid $128,388 in legal fees to Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP ("Xxxxxx
Xxxxx") for services rendered by such firm as counsel to the independent
directors of such Company. During the fiscal year ended March 31, 2003,
Tax-Free Investments Co. paid $7,079 in legal fees to Xxxxxx Xxxxx for
services rendered by such firm as counsel to the independent directors of
such Company. Xx. Xxxxxxxxxx is a partner of Xxxxxx Xxxxx.
B-1
EXHIBIT C
OFFICERS OF COMPANIES
The following table provides information with respect to the current
officers of each Company. Each officer is elected by each Board and serves until
his or her successor is chosen and qualified or until his or her resignation or
removal by a Board. The business address of each of the following persons is 00
Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
NAME, YEAR OF BIRTH AND OFFICER
POSITION(S) HELD WITH COMPANY SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
----------------------------- ------- -------------------------------------------
Xxxxxx X. Xxxxxx -- 1946....... 1994* Director and Chairman, A I M Management
Chairman and President 1977** Group Inc. (financial services holding
company); and Director and Vice Chairman,
AMVESCAP PLC (parent of AIM and a global
investment management firm) and Chairman,
AMVESCAP PLC -- AIM Division; formerly,
President and Chief Executive Officer,
A I M Management Group Inc.; Director,
Chairman and President, A I M Advisors,
Inc. (registered investment advisor);
Director and Chairman, A I M Capital
Management, Inc. (registered investment
advisor), A I M Distributors, Inc.
(registered broker dealer), A I M Fund
Services, Inc. (registered transfer agent),
and Fund Management Company (registered
broker dealer); and Chief Executive
Officer, AMVESCAP PLC -- Managed Products
Xxxx X. Xxxxxxxxxx -- 1951..... 2003*** Director, President and Chief Executive
Officer,
Executive Vice President A I M Management Group Inc.; Director,
Chairman and President, A I M Advisors,
Inc. (registered investment advisor);
Director, A I M Distributors, Inc.
(registered broker dealer); and Chief
Executive Officer of the AIM Division of
AMVESCAP PLC (2003-present); formerly,
Chief Executive Officer, Managed Products
Division, AMVESCAP PLC (2001-2002);
Chairman of the Board (1998-2002),
President (1998-2002) and Chief Executive
Officer (1998-2002) of INVESCO Funds Group,
Inc. (registered investment advisor) and
INVESCO Distributors, Inc. (registered
broker dealer); Chief Operating Officer and
Chairman of the Board of INVESCO Global
Health Sciences Fund; Chairman and Chief
Executive Officer of NationsBanc Advisors,
Inc.; and Chairman of NationsBanc
Investments, Inc.
C-1
NAME, YEAR OF BIRTH AND OFFICER
POSITION(S) HELD WITH COMPANY SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
----------------------------- ------- -------------------------------------------
Xxxxx X. Xxxxxx -- 1956........ 2003*** Director, Senior Vice President and General
Senior Vice President Counsel, A I M Management Group Inc.
(financial services holding company) and
A I M Advisors, Inc.; and Vice President,
A I M Capital Management, Inc., A I M
Distributors, Inc. and A I M Fund Services;
Director, Vice President and General
Counsel, Fund Management Company; formerly,
Senior Vice President and General Counsel,
Liberty Financial Companies, Inc.; and
Senior Vice President and General Counsel,
Liberty Funds Group, LLC
Xxxx X. Xxxx -- 1947........... 1993* Director, Chairman and Director of
Investments,
Senior Vice President 1977** A I M Capital Management, Inc.; Director
and Executive Vice President, A I M
Management Group, Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and
Director, A I M Distributors, Inc. and
AMVESCAP PLC; formerly Chief Executive
Officer and President, A I M Capital
Management, Inc.
Xxxxxx X. Xxxx -- 1955......... 2002** Managing Director and Chief Research
Officer --
Vice President Fixed Income, A I M Capital Management,
Inc.; and Vice President, A I M Advisors,
Inc.
Xxxxxxxx X. Xxx -- 1943........ 1993* Vice President and Chief Compliance
Officer,
Vice President 1992** A I M Advisors, Inc. and A I M Capital
Management, Inc.; and Vice President, A I M
Fund Services, Inc.
Xxxxx Xxxx Xxxxxx -- 1960...... 1993* Managing Director and Chief Cash Management
Vice President 1992** Officer, A I M Capital management, Inc.;
Director and president, fund Management
company; and Vice President, A I M
Advisors, Inc.
Xxxx X. Xxxxxx -- 1959......... 1993* Vice President and Fund Treasurer,
Vice President and Treasurer 1988** A I M Advisors, Inc.
Xxxxx X. Xxxxxx -- 1957........ 2003*** Vice President, A I M Advisors, Inc.; and
Secretary Vice President and General Counsel, A I M
Capital Management, Inc.
---------------
* Denotes service as officer of Short-Term Investments Co.
** Denotes service as officer of Tax-Free Investments Co.
*** Denotes service as officer of both Short-Term Investments Co. and Tax-Free
Investments Co.
C-2
EXHIBIT D
SECURITY OWNERSHIP OF MANAGEMENT
As of July 25, 2003, none of the directors, nominees or current executive
officers of the Companies owned shares of beneficial interest of any Fund.
D-1
EXHIBIT E
OWNERSHIP OF SHARES OF THE FUNDS
SIGNIFICANT HOLDERS
Listed below is the name, address and percent ownership of each person who,
as of July 25, 2003, to the best knowledge of the Companies owned 5% or more of
any class of the outstanding shares of a Fund. A shareholder who owns
beneficially 25% or more of the outstanding securities of a Fund is presumed to
"control" the Fund as defined in the 1940 Act. Such control may affect the
voting rights of other shareholders.
NUMBER OF SHARES PERCENT OWNED
NAME AND ADDRESS OF RECORD OWNER FUND (CLASS) OWNED OF RECORD OF RECORD*
-------------------------------- ------------------------- ---------------- -------------
SHORT-TERM INVESTMENTS CO.
CASH ASSETS PORTFOLIO
AIM Management Inc............. Institutional Class 10.00 100.00%
00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
LIQUID ASSETS PORTFOLIO
Bank of New York............... Cash Management Class 1,011,395,958.48 21.58%
One Wall Street, 2nd Floor
Xxxx/Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx Xxxx Xxxxxx..... Cash Management Class 766,000,051.80 16.34%
0 Xxxxxxxxxx Xxxxx, 0xx Xx
Xxxxxxxx, XX 00000
Mellon Global Cash Management
Accounts....................... Cash Management Class 412,678,000.00 8.80%
3 Mellon Bank Center -- Room
2501
Pittsburgh, PA 15259-0001
Xxxxxx Xxxxxxx Xxxx Xxxxxx..... Institutional Class 1,792,126,142.46 8.53%
0 Xxxxxxxxxx Xxxxx, 0xx Xx
Xxxxxxxx, XX 00000
AIM Fund of Funds Account #1... Institutional Class 1,643,838,192.10 7.82%
Money Mkt Portfolio Admin.
00 Xxxxxxxx Xxx, Xxx 000
Xxxxxxx, XX 00000
Microsoft Capital Group LP..... Institutional Class 1,489,100,000.00 7.08%
0000 Xxxx Xxxx
Xxxx, XX 00000-1132
AIM Funds-Sec Lending (MSDW)... Institutional Class 1,476,634,908.30 7.02%
00 Xxxxxxxx, Xxx 000
Xxxxxxx, XX 00000
Texas Capital Bank, N.A........ Personal Investment Class 11,857,477.79 22.85%
0000 XxXxxxxx Xxx., Xxx 000
Xxxxxx, XX 00000
E-1
NUMBER OF SHARES PERCENT OWNED
NAME AND ADDRESS OF RECORD OWNER FUND (CLASS) OWNED OF RECORD OF RECORD*
-------------------------------- ------------------------- ---------------- -------------
HVCC Xxxxxx'x Project Escrow... Personal Investment Class 8,499,719.12 16.38%
80 Vandenburgh
Troy, NY 12180
Bank of New York............... Private Investment Class 425,293,970.22 45.57%
One Wall Street, 2nd Floor
Xxxx/Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx Xxxx Xxxxxx..... Private Investment Class 120,690,384.01 12.93%
0 Xxxxxxxxxx Xxxxx, 0xx Xx
Xxxxxxxx, XX 00000
US Clearing/Fleet Securities... Reserve Class 52,460,219.61 92.94%
00 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx Xxxx Xxxxxx..... Resource Class 451,638,492.23 31.21%
0 Xxxxxxxxxx Xxxxx, 0xx Xx
Xxxxxxxx, XX 00000
CENCO.......................... Resource Class 297,238,389.56 20.54%
Attn: AMG 7th Floor
P.O. Box 10566
Birmingham, AL 35296
Xxxxxx Methodist (Texas Health
Resources)..................... Resource Class 267,559,779.75 18.49%
000 Xxxx Xxxxx Xxxxx
0xx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
PRIME PORTFOLIO
Bank of New York............... Cash Management Class 324,781,165.05 55.16%
One Wall Street, 2nd Floor
Xxxx/Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Frost National Bank TX......... Cash Management Class 103,102,827.15 17.51%
Xxxx & Co.
C/O Frost
P.O. Box 2479
San Antonio, TX 78298-2479
AIM Fund of Funds Account #1... Institutional Class 1,643,838,192.10 27.21%
Money Mkt Portfolio Admin.
00 Xxxxxxxx Xxx, Xxx 000
Xxxxxxx, XX 00000
AIM Funds-Sec Lending (MSDW)... Institutional Class 1,476,634,910.97 24.44%
00 Xxxxxxxx, Xxx 000
Xxxxxxx, XX 00000
XX Bank........................ Institutional Class 571,088,304.90 9.45%
Attn: ACM Dept
P.O. Box 1787
Milwaukee, WI 53201
Cullen/Frost Discount Brokers... Personal Investment Class 107,165,925.69 77.95%
P.O. Box 2358
San Antonio, TX 78299
E-2
NUMBER OF SHARES PERCENT OWNED
NAME AND ADDRESS OF RECORD OWNER FUND (CLASS) OWNED OF RECORD OF RECORD*
-------------------------------- ------------------------- ---------------- -------------
CoBank Cash Management
Program........................ Personal Investment Class 8,773,088.65 6.38%
P.O. Box 5110
Denver, CO 80217
First Interstate -- Montana.... Personal Investment Class 8,196,884.72 5.96%
P.O. Box 30918
Billings, MT 59116
Bank of New York............... Private Investment Class 112,694,691.31 26.83%
One Wall Street, 2nd Floor
Xxxx/Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Huntington Capital Corp........ Private Investment Class 61,846,854.06 14.72%
00 X. Xxxx Xx., Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Frost National Bank TX......... Private Investment Class 55,638,722.56 13.24%
Xxxx & Co.
C/O Frost
P.O. Box 2479
San Antonio, TX 78298-2479
Xxxxxx/Frost Discount Brokers... Private Investment Class 38,613,479.27 9.19%
P.O. Box 2358
San Antonio, TX 78299
Bank of Oklahoma, N.A.
Institutional Investments...... Private Investment Class 27,662,261.06 6.58%
P.O. Box 2300
Tulsa, OK 74192
Wachovia Capital Markets, LLC... Private Investment Class 21,111,522.02 5.03%
Attn: Money Funds
0000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000-0000
Bank of New York............... Reserve Class 100,571,090.28 94.14%
440 Mamoroneck, 5th Fl.
Harrison, NY 10528
Wachovia Capital Markets, LLC... Reserve Class 43,049,635.96 52.30%
Attn: Money Funds
0000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000-0000
Sovereign Bank................. Resource Class 11,424,186.36 13.88%
C/O Chase Enterprises
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Wachovia Capital Markets,
LLC -- Sub-Accounts............ Resource Class 10,161,442.23 12.35%
8739 Research Dr. NC 0675
Attn: Money Funds
Charlotte, NC 28288
E-3
NUMBER OF SHARES PERCENT OWNED
NAME AND ADDRESS OF RECORD OWNER FUND (CLASS) OWNED OF RECORD OF RECORD*
-------------------------------- ------------------------- ---------------- -------------
TAX-FREE INVESTMENTS CO.
CASH RESERVE PORTFOLIO
Xxxxxx Xxxxxxx Xxxx Xxxxxx..... Cash Management Class 415,348,879.68 67.45%
0 Xxxxxxxxxx Xxxxx, 0xx Xx
Xxxxxxxx, XX 00000
Xxxxx Xxxxxx Bank on Behalf of
Blackrock...................... Cash Management Class 63,422,320.26 10.30%
1 Heritage Drive
Xxxxxx Xxxxxxxx 0 Xxxxx
Xxxxxx, XX 00000
Sun Trust Capital Markets,
Inc............................ Cash Management Class 39,301,081.57 6.38%
P.O. Box 4418, MC 3907
Atlanta, GA 30302
Xxxxxx Xxxxxxx Xxxx Xxxxxx..... Institutional Class 284,834,300.96 21.25%
0 Xxxxxxxxxx Xxxxx, 0xx Xx
Xxxxxxxx, XX 00000
Frost National Bank TX......... Institutional Class 212,975,699.43 15.89%
Xxxx & Co.
C/O Frost
P.O. Box 2479
San Antonio, TX 78298-2479
Bank of America N.A............ Institutional Class 137,846,629.14 10.29%
000 Xxxxx Xxxxxx Xxxxxx
M.C. TX1-945-08-18
Dallas, TX 75201-3307
Colorado State Bank & Trust.... Personal Investment Class 10,628,189.67 88.27%
0000 Xxxxxxxx
Xxxxxx, XX 00000-4999
Woodforest Sweep Account....... Personal Investment Class 1,217,384.04 10.11%
0000 Xxxx Xxxxx
Xxxxxx, XX 00000
Xxxxxx/Frost Discount Brokers... Private Investment Class 53,900,709.04 17.21%
P.O. Box 2358
San Antonio, TX 78299
Union Bank of California....... Private Investment Class 44,082,204.15 14.07%
Attn: Cash Mgmt
000 X Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Bank One Trust Company......... Private Investment Class 35,006,570.14 11.17%
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Bank of New York............... Private Investment Class 21,045,331.18 6.72%
440 Mamoroneck, 5th Fl.
Harrison, NY 10528
Bank of New York............... Reserve Class 11,799,124.99 98.41%
440 Mamoroneck, 5th Fl.
Harrison, NY 10528
Xxxxxx Xxxxxxx Xxxx Xxxxxx..... Resource Class 250,892,441.85 79.56%
0 Xxxxxxxxxx Xxxxx, 0xx Xx
Xxxxxxxx, XX 00000
---------------
* The Companies have no knowledge of whether all or any portion of the shares
owned of record are also owned beneficially.
E-4
EXHIBIT F
DIRECTOR OWNERSHIP OF FUND SHARES
Set forth below is the dollar range of equity securities beneficially owned
by each director and nominee as of December 31, 2002 (i) in each Fund and (ii)
on an aggregate basis, in all registered investment companies overseen by the
director within the AIM Funds complex.
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
INTERESTED DIRECTORS
-------------------------------------
XXXXXX X. XXXXXX XXXX X. XXXXXXXXXX
---------------- ------------------
SHORT-TERM INVESTMENTS CO.
Cash Assets Portfolio.......................... None None
Liquid Assets Portfolio........................ None None
Prime Portfolio................................ None None
TAX-FREE INVESTMENTS CO.
Cash Reserve Portfolio......................... None None
Aggregate Dollar Range of Equity Securities in
All Registered Investment Companies Overseen By
Director in the AIM Funds Complex.............. Over $100,000 $10,001-$50,000
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
INDEPENDENT DIRECTORS
------------------------------------------------------
XXXXX X. XXXXX X. XXXXXX X. XXXXXX X. XXXX X.
XXXXXX XXXXXXXX XXXXXX XXXX, XX.(1) FIELDS(1)
-------- -------- --------- ------------ ---------
SHORT-TERM INVESTMENTS CO.
Cash Assets Portfolio............. None None None None None
Liquid Assets Portfolio........... None None None None None
Prime Portfolio................... None None None None None
TAX-FREE INVESTMENTS CO.
Cash Reserve Portfolio............ None None None None None
Aggregate Dollar Range of Equity
Securities in All Registered
Investment
Companies Overseen By Director in $10,001- $1- $50,001- Over Over
the AIM Funds Complex............. $50,000 $10,000 $100,000 $100,000 $100,000
F-1
INDEPENDENT DIRECTORS
-----------------------------------------------------------
XXXX XXXXX XXXXX F. XXXX X. XXXXX X.
XXXXXXXXXX(1) XXXXXX-XXXXX(1) XXXXXXX XXXXXXX XXXXX(1)
------------- --------------- -------- ------- --------
SHORT-TERM INVESTMENTS CO.
Cash Assets Portfolio....... None None None None None
Liquid Assets Portfolio..... None None None None None
Prime Portfolio............. None None None None None
TAX-FREE INVESTMENTS CO.
Cash Reserve Portfolio...... None None None None None
Aggregate Dollar Range of
Equity
Securities in All Registered
Investment Companies
Overseen By Director in the Over Over $50,001- $1- Over
AIM Funds Complex........... $100,000 $100,000 $100,000 $100,0 $10,000
---------------
(1) Amounts shown include the total amount of compensation deferred by the
director at his or her election pursuant to a deferred compensation plan.
Such deferred compensation is placed in a deferral account and deemed to be
invested in one or more of the AIM Funds.
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
INDEPENDENT NOMINEES
-------------------------------------------
XXX X. XXXXX X. XXXXXX X. XXXXX XXXX,
XXXXX XXXXX XXXXX PH.D.
------ -------- --------- -----------
SHORT-TERM INVESTMENTS CO.
Cash Assets Portfolio....................... None None None None
Liquid Assets Portfolio..................... None None None None
Prime Portfolio............................. None None None None
TAX-FREE INVESTMENTS CO.
Cash Reserve Portfolio...................... None None None None
Aggregate Dollar Range of Equity Securities in
All Registered Investment Companies Overseen
By Director in the AIM Funds Complex........ None None None None
F-2
