SUB-ITEM 77M
MERGERS
AIM COUNSELOR SERIES TRUST
On June 9, 2003, the Board of Directors of AIM Manager Series Funds, Inc.
("AMSFI"), a Maryland corporation, approved an Agreement and Plan of
Reorganization (the "Agreement") that provided for the restructuring of INVESCO
Multi-Sector Fund ("Multi-Sector"), a series portfolio of AMSFI, as a new
series portfolio (the "New Fund") of AIM Counselor Series Trust ("ACST"), an
existing open-end management investment company organized as a Delaware
statutory trust (the "Reorganization"). The October 21, 2003 meeting, which was
convened to approve the Agreement by the shareholders of Multi-Sector at a
Special Meeting of shareholders of Multi-Sector was adjourned to October 28,
2003, at which time shareholders approved the Agreement and the Reorganization.
Pursuant to the Agreement, on November 25, 2003, the New Fund succeeded to the
assets and assumed the liabilities of Multi-Sector. The value of each New Fund
shareholder's account with ACST immediately after the Reorganization was the
same as the value of such shareholder's account with AMSFI 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. AMSFI 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
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO INTERNATIONAL BLUE CHIP VALUE FUND
INVESCO MANAGER SERIES FUNDS, INC.
INVESCO MULTI-SECTOR FUND
INVESCO MONEY MARKET FUNDS, INC.
INVESCO U.S. GOVERNMENT MONEY FUND
0000 XXXXX XXXXXX XXXXXX
XXXXXX, XXXXXXXX 00000
August 25, 2003
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 the distributor for all retail INVESCO Funds (including
your Fund) 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.
As part of the integration initiative, AMVESCAP PLC has also recommended
restructuring the advisory and administrative servicing arrangements so that A I
M Advisors, Inc. ("AIM") is the advisor and administrator for all INVESCO Funds
and AIM Funds. Your Board has approved a proposed advisory agreement under which
AIM will serve as the investment advisor for your Fund. Also, for INVESCO
Multi-Sector Fund, your Board has approved a proposed sub-advisory agreement
under which INVESCO Institutional (N.A.), Inc., an affiliate of INVESCO Funds
Group, Inc. ("INVESCO"), which is currently serving as your Fund's investment
advisor, will serve as sub-advisor. Finally, for INVESCO International Blue Chip
Value Fund, your Board has approved a proposed sub-advisory agreement under
which INVESCO Global Asset Management (N.A.), Inc., which is currently serving
as your Fund's sub-advisor pursuant to an agreement with INVESCO, will serve as
sub-advisor pursuant to an agreement with AIM. The portfolio management team for
your Fund will not change as a result of this restructuring. The attached proxy
statement seeks your approval of the new investment advisory agreement and, if
applicable, the new sub-advisory agreement.
The integration initiative also calls for changing the organizational
structure of the INVESCO Funds and the AIM 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 a newly organized 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. You may also vote your shares by telephone or through a
website established for that purpose by following the instructions that appear
on the enclosed proxy card. 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- Xxxxxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxx
President
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO INTERNATIONAL BLUE CHIP VALUE FUND
INVESCO MANAGER SERIES FUNDS, INC.
INVESCO MULTI-SECTOR FUND
INVESCO MONEY MARKET FUNDS, INC.
INVESCO U.S. GOVERNMENT MONEY FUND
0000 XXXXX XXXXXX XXXXXX
XXXXXX, XXXXXXXX 00000
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON OCTOBER 21, 2003
To the Shareholders of each of the series portfolios of INVESCO
International Funds, Inc., INVESCO Manager Series Funds, Inc. and INVESCO Money
Market Funds, Inc. (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 a new investment advisory agreement with A I M Advisors,
Inc. ("AIM") for your Fund.
3. Approve a new sub-advisory agreement between AIM and INVESCO
Institutional (N.A.), Inc. for INVESCO Multi-Sector Fund.
4. Approve a new sub-advisory agreement between AIM and INVESCO Global
Asset Management (N.A.), Inc. for INVESCO International Blue Chip Value
Fund.
5. Approve an Agreement and Plan of Reorganization which provides for
the redomestication of INVESCO International Funds, Inc. as a Delaware
statutory trust and, in connection therewith, the sale of all of INVESCO
International Funds, Inc.'s assets and the dissolution of INVESCO
International Funds, Inc. as a Maryland corporation.
6. Approve an Agreement and Plan of Reorganization which provides for
the redomestication of INVESCO Manager Series Funds, Inc. as a Delaware
statutory trust and, in connection therewith, the sale of all of INVESCO
Manager Series Funds, Inc.'s assets and the dissolution of INVESCO Manager
Series Funds, Inc. as a Maryland corporation.
7. Approve an Agreement and Plan of Reorganization which provides for
the redomestication of INVESCO Money Market Funds, Inc. as a Delaware
statutory trust and, in connection therewith, the sale of all of INVESCO
Money Market Funds, Inc.'s assets and the dissolution of INVESCO Money
Market Funds, Inc. as a Maryland corporation.
8. 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. YOU MAY ALSO VOTE YOUR SHARES BY TELEPHONE OR THROUGH A WEBSITE
ESTABLISHED FOR THAT PURPOSE BY FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED
PROXY MATERIALS. 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- Xxxx X. Xxxxx
Xxxx X. Xxxxx
Secretary
August 25, 2003
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO INTERNATIONAL BLUE CHIP VALUE FUND
INVESCO MANAGER SERIES FUNDS, INC.
INVESCO MULTI-SECTOR FUND
INVESCO MONEY MARKET FUNDS, INC.
INVESCO U.S. GOVERNMENT MONEY FUND
0000 XXXXX XXXXXX XXXXXX
XXXXXX, XXXXXXXX 00000
SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON OCTOBER 21, 2003
INTRODUCTION
Each Proposal that you are being asked to vote on relates to or results
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. To implement this
component, each INVESCO Fund is seeking shareholder approval to enter
into a new investment advisory agreement with AIM and certain INVESCO
Funds are seeking shareholder approval of a new sub-advisory agreement
between AIM and INVESCO Institutional (N.A.), Inc. ("INVESCO
Institutional") with respect to such Funds, or, with respect to INVESCO
International Blue Chip Value Fund, INVESCO Global Asset Management
(N.A.), Inc. ("INVESCO Global"). Proposals 2, 3 and 4 relate to this
component of AMVESCAP's integration initiative.
- 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 5, 6 and 7 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/
1
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 INVESCO International Funds, Inc., INVESCO
Manager Series Funds, Inc. and INVESCO Money Market Funds, Inc. (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 or vote by telephone or through a
website established for that purpose.
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, Inc., P.O. Box 4739, Houston, Texas 00000-0000, or call (800)
000-0000. We will furnish such report(s) free of charge.
2
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 a new investment advisory All Funds
agreement with AIM for your Fund
3. Approving a new sub-advisory agreement INVESCO Multi-Sector Fund
between AIM and INVESCO Institutional for
your Fund
4. Approving a new sub-advisory agreement INVESCO International Blue Chip Value Fund
between AIM and INVESCO Global for your
Fund
5. Approving an Agreement and Plan of INVESCO International Blue Chip Value Fund
Reorganization (the "IIFI Plan") to
redomesticate INVESCO International Funds,
Inc. as a Delaware statutory trust
6. Approving an Agreement and Plan of INVESCO Multi-Sector Fund
Reorganization (the "IMSFI Plan") to
redomesticate INVESCO Manager Series
Funds, Inc. as a Delaware statutory trust
7. Approving an Agreement and Plan of INVESCO U.S. Government Money Fund
Reorganization (the "IMMFI Plan") to
redomesticate INVESCO Money Market Funds,
Inc. as a Delaware statutory trust
8. 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 Companies at (000) 000-0000 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 a Special Meeting, 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 director of your Company.
- FOR the proposal to approve a new investment advisory agreement with AIM
for your Fund.
- FOR the proposal to approve a new sub-advisory agreement between AIM and
INVESCO Institutional for INVESCO Multi-Sector Fund.
- FOR the proposal to approve a new sub-advisory agreement between AIM and
INVESCO Global for INVESCO International Blue Chip Value Fund.
- FOR the proposal to approve the IIFI Plan to redomesticate INVESCO
International Funds, Inc. as a Delaware statutory trust.
- FOR the proposal to approve the IMSFI Plan to redomesticate INVESCO
Manager Series Funds, Inc. as a Delaware statutory trust.
- FOR the proposal to approve the IMMFI Plan to redomesticate INVESCO Money
Market Funds, Inc. 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.
VOTING BY TELEPHONE OR THE INTERNET
You may vote your shares by telephone or through a website established for
that purpose by following the instructions that appear on the proxy card
accompanying this Proxy Statement.
QUORUM REQUIREMENT AND ADJOURNMENT
A quorum of shareholders is necessary to hold a valid meeting. A quorum
will exist for Proposals 1, 5, 6 and 7 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. A
quorum will exist for Proposals 2, 3 and 4 for a particular Fund if shareholders
entitled to vote one-third of the issued and outstanding shares of such Fund 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 entitled to vote FOR a Proposal in favor of such an
4
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 the
Special Meetings, 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.
PROPOSALS 2, 3 AND 4. Approval of Proposals 2, 3 and 4 requires the lesser
of (a) the affirmative vote of 67% or more of the voting securities of your Fund
present or represented by proxy at the Special Meeting, if the holders of more
than 50% of the outstanding voting securities of your Fund are present or
represented by proxy, or (b) the affirmative vote of more than 50% of the
outstanding voting securities of your Fund. 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 Proposals 2, 3 and 4
because approval of Proposals 2, 3 and 4 requires the affirmative vote of a
percentage of the voting securities present or represented by proxy or a
percentage of the outstanding voting securities.
PROPOSALS 5, 6 AND 7. Approval of Proposals 5, 6 and 7 requires the
affirmative vote of a majority of the issued and outstanding shares of the
applicable Company. Abstentions and broker non-votes are counted as present but
are not considered votes cast at the Special Meetings. As a result, they have
the same effect as a vote against Proposals 5, 6 and 7 because approval of
Proposals 5, 6 and 7 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 in the aggregate
approximately $18,500. 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.
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.
5
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 discussion of how to propose an individual for nomination as a
director, please refer to the section of this Proxy Statement entitled "Proposal
1 -- Current Committees of the Boards -- Nominating Committee."
6
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 of the INVESCO Funds and the independent
directors/trustees of the AIM 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 of the INVESCO Funds and the
Boards of Directors/Trustees of the AIM Funds agreed to combine the separate
boards and create a unified board of directors/trustees.
STRUCTURE OF THE BOARD OF DIRECTORS
The Board of each Company currently consists of the following 11 persons:
Xxx X. Xxxxx, Xxxxxx Xxxxxx, Xxxxxx X. Xxxxxxx, Xxxxxxxx X. Xxxxxx, Xxxxx X.
Xxxxx, Xxxxxxx X. Xxxxxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxx, Xxxx X.
XxXxxxxx, Xxxxx Xxxx, Ph.D. and Xxxx X. Xxxxxxxxxx. Eight of the current
directors are "independent," meaning they are not "interested persons" of each
Company within the meaning of the 1940 Act. Three of the current directors are
"interested persons" because of their business and financial relationships with
each Company and INVESCO, its investment advisor, and/or INVESCO's parent,
AMVESCAP. Six of the current directors have declined to stand for re-election as
directors of each Company. Therefore, their terms as directors of each Company
will end upon the election and qualification of their successor directors at the
Special Meeting.
NOMINEES FOR DIRECTORS
Each Company's nominating committee (which consists solely of independent
directors) has approved the nomination of five of the 11 current directors, as
set forth below, each to serve as director until his successor is elected and
qualified. In addition, the nominating committee has approved the nomination of
11 new nominees, as set forth below, each to serve as director until his or her
successor is elected and qualified. These 11 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 of the ten
registered investment companies comprising the INVESCO Funds. Each nominee who
is a current director oversees 46 portfolios which comprise the INVESCO Funds.
The business address of each nominee who is a current director is 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000.
Each new nominee serves as a director or trustee of the 17 registered
investment companies comprising the AIM Funds. Each new nominee currently
oversees 86 portfolios which comprise the AIM Funds. The business address of
each new nominee is 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000.
If elected, each nominee would oversee a total of 27 registered investment
companies currently comprising 132 portfolios.
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NOMINEES WHO CURRENTLY ARE INDEPENDENT DIRECTORS
DIRECTOR PRINCIPAL OCCUPATION(S)
NAME AND YEAR OF BIRTH SINCE DURING PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
---------------------- -------- ----------------------- --------------------------
Xxx X. Xxxxx -- 1936........... 1983(1) 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......... 2000(1) 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........ 2000(1) Chairman of Lawsuit Resolution General Chemical Group, Inc.,
Services, San Diego, 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...... 1997(1) Retired; formerly, Chairman of Synergen Inc. (since
the Board (1987-1994), Chief incorporation in 1982) and
Executive Officer (1982-1989 Isis Pharmaceuticals, Inc.
and 1993-1994) and President
(1982-1989) of Synergen Inc.
(biotechnology company); and
formerly, trustee of INVESCO
Global Health Sciences Fund.
---------------
(1) Denotes service as director each Company.
8
NOMINEE WHO CURRENTLY IS AN INTERESTED PERSON
DIRECTOR PRINCIPAL OCCUPATION(S)
NAME AND YEAR OF BIRTH SINCE DURING PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
---------------------- -------- ----------------------- --------------------------
Xxxx X. Xxxxxxxxxx(1) -- 1951..... 1998(2) Director, President and Chief Director/trustee of each of
Executive Officer, A I M the 17 AIM Funds
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 each Company.
NEW NOMINEES WHO WILL BE INDEPENDENT DIRECTORS
PRINCIPAL OCCUPATION(S)
NAME AND YEAR OF BIRTH DURING PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
---------------------- ----------------------- --------------------------
Xxxxx X. Xxxxxx -- 1939........... Of Counsel, law firm of Xxxxx & Badgley Funds, Inc. (registered
XxXxxxxx investment company)
Xxxxx X. Xxxxxxxx -- 1944......... Chairman, Xxxxxxxx Technology ACE Limited (insurance company);
Associates (technology consulting Captaris, Inc. (unified messaging
company) and Captaris, Inc. provider)
(unified messaging provider)
Xxxxxx X. Xxxxxx -- 1941.......... Director of a number of public Cortland Trust, Inc. (Chairman)
and private business (registered investment company);
corporations, including the Boss Annuity and Life Re (Holdings),
Group, Ltd. (private investment Ltd. (insurance company)
and management) and Magellan
Insurance Company; formerly,
President, Chief Executive
Officer and Director, Volvo Group
North America, Inc.; Senior Vice
President, AB Volvo and director
of various affiliated Volvo Group
companies
9
PRINCIPAL OCCUPATION(S)
NAME AND YEAR OF BIRTH DURING PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
---------------------- ----------------------- --------------------------
Xxxxxx X. Xxxx, Xx. -- 1935....... 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............ Chief Executive Officer, Twenty Administaff
First Century Group, Inc.
(government affairs company) and
Xxxxxx Xxxxxx LP
Xxxx Xxxxxxxxxx -- 1937........... Partner, law firm of Xxxxxx Xxxxx Xxxxxxxx Trust, Inc. (registered
Naftalis & Xxxxxxx LLP investment company)
Xxxxx Xxxxxx-Xxxxx -- 1950........ Formerly, Chief Executive None
Officer, YWCA of the USA
Xxxxx X. Xxxxxxx -- 1942.......... Partner, law firm of Xxxxxxx & None
Xxxxxx
Xxxx X. Xxxxxxx -- 1935........... Retired None
Xxxxx X. Xxxxx -- 1939............ Executive Vice President, None
Development and Operations, Xxxxx
Interests Limited Partnership
(real estate development company)
NEW NOMINEE WHO WILL BE AN INTERESTED PERSON
PRINCIPAL OCCUPATION(S)
NAME AND YEAR OF BIRTH DURING PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
---------------------- ----------------------- --------------------------
Xxxxxx X. Xxxxxx(1) -- 1946....... Director and Chairman, A I M None
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 will be 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.
THE BOARDS' RECOMMENDATION ON PROPOSAL 1
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" these 16 nominees.
10
CURRENT COMMITTEES OF THE BOARDS
Each Board currently has nine standing committees: an audit committee, an
investments and management liaison committee, a brokerage committee, a
derivatives committee, a valuation committee, a legal committee, a compensation
committee, a retirement plan committee and a nominating committee.
AUDIT COMMITTEE
Each Company has an audit committee established for the purpose of
overseeing the accounting and financial reporting process of the applicable
Company and audits of the financial statements of such Company. Each audit
committee is comprised entirely of independent directors. The committee meets
quarterly with the applicable Company's independent accountants and officers to
review accounting principles used by such Company, the adequacy of internal
controls, the responsibilities and fees of the independent accountants, and
other matters. The current members of each audit committee are Messrs. Xxxxx,
Xxxxxx, Xxxxx and XxXxxxxx.
EXECUTIVE COMMITTEE
Each Company has an executive committee. On occasion, the committee acts
upon the current and ordinary business of the applicable Company between the
meetings of the applicable Board. Except for certain powers which, under
applicable law, may only be exercised by the full Board, the committee may
exercise all powers and authority of the applicable Board in the management of
the business of the applicable Company. All decisions are subsequently submitted
for ratification by the applicable Board. The current members of each executive
committee are Messrs. Xxxxx, Xxxxx, XxXxxxxx and Xxxxxxxxxx.
INVESTMENTS AND MANAGEMENT LIAISON COMMITTEE
Each Company has an investments and management liaison committee which
meets quarterly with various management personnel of INVESCO in order to
facilitate better understanding of management and operations of the applicable
Company, and to review investment, legal and operational matters which have been
assigned to the committee by the applicable Board, in furtherance of the
applicable Board's overall duty of supervision. The current members of each
investments and management liaison committee are Messrs. Xxxxxxx, Xxxxx, Bunch,
Soll and Xx. Xxxxxx.
BROKERAGE COMMITTEE
Each Company has a brokerage committee. The committee meets periodically to
review soft dollar and other brokerage transactions by the Funds and to review
policies and procedures of INVESCO with respect to brokerage transactions. It
reports on these matters to the applicable Board. The current members of each
brokerage committee are Messrs. Xxxxxx, Xxxxx and XxXxxxxx.
DERIVATIVES COMMITTEE
Each Company has a derivatives committee. The committee meets periodically
to review derivatives investments made by the Funds. It monitors the use of
derivatives by the Funds and the procedures utilized by INVESCO to ensure that
the use of such instruments follows the policies adopted by the applicable
Board. The committee reports on these matters to the applicable Board. The
current members of each derivatives committee are Messrs. Xxxxxxx, Xxxxx and
Xxxx.
NOMINATING COMMITTEE
Each Company has a nominating committee. The committee meets periodically
to review and nominate candidates for positions as independent directors to fill
vacancies on the board of directors. The nominating committee will consider
nominees recommended by shareholders. If a shareholder desires to nominate a
candidate, the shareholder must submit a request in writing to the Chairman of
the nominating
11
committee. The current members of each nominating committee are Messrs. Xxxxx,
Xxxxx, Xxxxx and Xxxx.
LEGAL COMMITTEE
Each Company has a legal committee. The committee meets periodically to
review compensation arrangements with counsel to the applicable Company and to
its independent directors. The committee reports on these matters to the
applicable Board. The current members of each legal committee are Messrs. Xxxxx,
Xxxxx and XxXxxxxx.
COMPENSATION COMMITTEE
Each Company has a compensation committee. The committee meets periodically
to review compensation arrangements of the applicable Company's independent
directors. The committee reports on these matters to the applicable Board. The
current members of each compensation committee are Messrs. Xxxxxxx, Xxxxx,
Xxxxxx and Xxxx.
VALUATION COMMITTEE
Each Company has a valuation committee. The committee meets periodically to
review valuation issues regarding investments made by the Funds. The committee
reports on these matters to the applicable Board. The current members of each
valuation committee are Messrs. Xxxxx, Xxxxx, Xxxxxxxxxx and XxXxxxxx.
RETIREMENT PLAN COMMITTEE
Each Company has a retirement plan committee. The committee meets
periodically to review the applicable Company's retirement arrangements for its
independent directors. The committee reports on these matters to the applicable
Board. The current members of each retirement plan committee are Messrs.
Xxxxxxx, Xxxxx, Xxxxxx, Xxxxxxxxxx and Xxxx.
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.
INVESTMENT
AND
MANAGEMENT
AUDIT EXECUTIVE LIAISON BROKERAGE DERIVATIVES VALUATION LEGAL
BOARD COMMITTEE COMMITTEE COMMITTEE COMMITTEE COMMITTEE COMMITTEE COMMITTEE
----- --------- --------- ---------- --------- ----------- --------- ---------
INVESCO International Funds, Five Three None Three Three Three None Two
Inc.(1)..........................
INVESCO Manager Series Funds, Eight Four None Four Four Four None Three
Inc.(2)..........................
INVESCO Money Market Funds, Seven Four None Four Four Four None Three
Inc.(3)..........................
RETIREMENT
COMPENSATION PLAN NOMINATING
COMMITTEE COMMITTEE COMMITTEE
------------ ---------- ----------
INVESCO International Funds, Two None Two
Inc.(1)..........................
INVESCO Manager Series Funds, Four None Two
Inc.(2)..........................
INVESCO Money Market Funds, Two None Four
Inc.(3)..........................
---------------
(1) Information disclosed is for the fiscal year ended October 31, 2002.
(2) Information disclosed is for the fiscal year ended August 31, 2002.
(3) Information disclosed is for the fiscal year ended May 31, 2003.
FUTURE COMMITTEE STRUCTURE
As a result of the combination of the Boards of Directors of the INVESCO
Funds and the Boards of Directors/Trustees of the AIM Funds, it is expected that
each Board will adopt a committee structure that is the same as that which is in
effect for the AIM Funds, so that each Board will have four committees:
12
an Audit Committee, a Committee on Directors/Trustees, an Investments Committee
and a Valuation Committee. These committees are described below.
AUDIT COMMITTEE
Each Audit Committee will be comprised entirely of independent directors.
Each Audit Committee will be responsible for: (i) the appointment, compensation
and oversight of any independent auditors employed by each Fund (including
resolution of disagreements between your 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.
COMMITTEE ON DIRECTORS/TRUSTEES
Each Committee on Directors/Trustees will be comprised entirely of
independent directors and will be responsible for: (i) nominating persons who
are not interested persons of 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 applicable
Company at meetings called for the election of directors; (ii) nominating
persons who are not interested persons of the applicable Company for selection
as members of each committee of the Board, including, without limitation, the
audit committee, the committee on directors, 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 trustees 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 the applicable Company.
INVESTMENTS COMMITTEE
Each Investments Committee will be responsible for: (i) overseeing the
advisor'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
Each Valuation Committee will be responsible for: (i) periodically
reviewing the advisor's procedures for valuing securities ("Procedures"), and
making any recommendations to the advisor with respect thereto; (ii) reviewing
proposed changes to the Procedures recommended by the advisor from time to time;
(iii) periodically reviewing information provided by the advisor regarding
industry developments in connection with valuation; (iv) periodically reviewing
information from the advisor 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
the advisor, assisting the advisor's internal valuation committee and/or the
full Board in resolving particular valuation anomalies.
DIRECTOR'S COMPENSATION
Each director who is independent is compensated for his or her services
according to a fee schedule which recognizes the fact that such director also
serves as a director of other INVESCO Funds. Each such director receives a fee,
allocated among the INVESCO Funds for which he or she serves as a director,
which consists of an annual retainer component and a meeting fee component.
13
Information regarding compensation paid or accrued for each continuing
director of the Companies who was not affiliated with INVESCO during the year
ended December 31, 2002 is found in Exhibit B.
CURRENT RETIREMENT PLAN FOR DIRECTORS
The Boards of Directors of the INVESCO Funds have adopted a Retirement Plan
(the "Retirement Plan") and a Deferred Retirement Plan Account Agreement (the
"Account Agreement"). Certain of the independent directors of each Company
participate either in the Retirement Plan or in the Account Agreement. Under the
Retirement Plan and the Account Agreement, each participating director who is
not an interested person of the INVESCO Funds and who has served for at least
five years (a "Participating Qualified Director") is entitled to receive a
benefit upon retirement.
Commencing with attainment of age 72 by a Participating Qualified Director
who has elected to participate in the Retirement Plan and who voluntarily
retires prior to reaching age 72, and commencing with the date of retirement of
a Participating Qualified Director who retires upon reaching age 72 or at any
time subsequent to age 72 up to the mandatory retirement age of 75, a
Participating Qualified Director shall receive quarterly payments at an annual
rate of $34,000 (the "Annual Benefit"). Directors who became Participating
Qualified Directors on or before January 1, 2001 who retire upon reaching age 72
(or at age 73 or 74, if the director extends his retirement date for one to two
years, but less than three years) are entitled to payment for one year of twice
the Annual Benefit. Payment of the Annual Benefit will continue for the
remainder of the Participating Qualified Director's life or ten years, whichever
is longer. If a Participating Qualified Director becomes disabled before the
date upon which his or her Annual Benefit payments would normally commence, such
benefit payments will begin. If a Participating Qualified Director dies prior to
the receipt of the Annual Benefit for ten years, the Annual Benefit will be paid
to his/her beneficiary or estate until an aggregate of ten years of payments has
been received. A Participating Qualified Director who has elected to participate
in the Retirement Plan receives no benefits from the Account Agreement. The cost
of the Retirement Plan will be allocated among the INVESCO Funds in a manner
determined to be fair and equitable by the committee administering the
Retirement Plan.
A Participating Qualified Director who has elected to participate in the
Account Agreement receives no benefits from the Retirement Plan. Pursuant to the
terms of the Account Agreement, a deferred retirement account is established for
a Qualified Participating Director (the "Account"). The dollar amount credited
to the Account is in an amount which, based upon an assumed account appreciation
rate per annum (currently 5.75%), will provide the Participating Qualified
Director with an account value of $340,000 upon reaching age 72. Once the
initial dollar amount of the Account is established, Account proceeds are
invested in shares of one or more of the INVESCO Funds. The value of the Account
fluctuates with the appreciation or depreciation in the shares of the INVESCO
Funds owned by the Account and Account shares are increased by the amount of any
dividends and capital gains distributions paid with respect to the shares. Upon
retirement, a Participating Qualified Director is entitled to receive the value
in the Account either in a lump sum payment or in payments over a stipulated
number of months. The Account value continues to fluctuate as long as monthly
payments are made. If a Participating Qualified Director becomes disabled or
dies prior to his or her retirement and if, at the time of disability or death,
the value of a Participating Qualified Director's Account is less than $340,000,
the Director or the Director's beneficiary or estate will not be paid the value
in the Account but will receive $34,000 per annum for ten years. If, at the time
of the Participating Qualified Director's death or disability prior to
retirement, the value in the director's Account is $340,000 or more, the
Participating Qualified Director or his or her estate or beneficiary will
receive the value in the Account either in a lump sum or in quarterly
installments. The cost of providing the initial dollar amount to be allocated to
a Participating Qualified Director's Account and the cost of payment of any
death or disability benefit that aggregates more than the Account value will be
allocated among the INVESCO Funds in a manner determined to be fair and
equitable by a committee appointed to administer the Account Agreement.
14
The Companies have no stock options, pension, or retirement plans for
affiliated directors of the INVESCO Funds or for management or other personnel,
and pay no salary or compensation to any of their officers.
CURRENT DEFERRED COMPENSATION PLAN
The independent directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of the INVESCO Funds.
Certain of the deferred amounts have been invested in the shares of all INVESCO
Funds except INVESCO Funds offered by INVESCO Variable Investment Funds, Inc.,
in which the directors are legally precluded from investing. Each independent
director may, therefore, be deemed to have an indirect interest in shares of
each such INVESCO Fund, in addition to any INVESCO Fund shares the independent
director may own either directly or beneficially. Each of the independent
directors has agreed to invest a minimum of $100,000 of his or her own resources
in shares of the INVESCO Funds. Compensation contributed to a deferred
compensation plan may constitute all or a portion of this $100,000 commitment.
NEW RETIREMENT PLAN FOR DIRECTORS
The Boards of Directors of the INVESCO Funds intend to adopt a new
retirement plan (the "New Retirement Plan") for the directors of each Company
who are not affiliated with INVESCO, which will be effective as of the date of
the Special Meeting. The New Retirement Plan also will be adopted by the Boards
of Directors/Trustees of the AIM Funds. The reason for adoption of the New
Retirement Plan is to provide for consistency in the retirement plans for the
Boards of Directors of the INVESCO Funds and the Boards of Directors/Trustees of
the AIM Funds. The retirement plan will include a retirement policy as well as
retirement benefits for independent directors.
The retirement policy will permit each independent director to serve until
December 31 of the year in which the director turns 72. A majority of the
directors will be able to extend from time to time the retirement date of a
director.
Annual retirement benefits will be available to each independent director
of the Companies and/or the other INVESCO Funds and 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 will be 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 will also be available under the New Retirement Plan
that will provide 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 New
Retirement Plan will not be secured or funded by the Companies.
Upon the effectiveness of the New Retirement Plan, the independent
directors will cease to accrue benefits under the Retirement Plan and the
Account Agreement. Messrs. Xxxxx and Xxxx will not receive any additional
benefits under the Retirement Plan or the Account Agreement, but will be
entitled to amounts which have been previously funded under the Retirement Plan
or the Account Agreement for their benefit. An affiliate of INVESCO will
reimburse Company for any amounts funded by the Companies for Messrs. Xxxxx and
Xxxx under the Retirement Plan and the Account Agreement.
NEW DEFERRED COMPENSATION AGREEMENTS
The Boards of Directors of the INVESCO Funds intend to adopt new deferred
compensation agreements which are consistent with the deferred compensation
agreements adopted by the Boards of
15
Directors/Trustees of the AIM Funds. Pursuant to the new deferred compensation
agreements ("New Compensation Agreements"), a director will have the option to
elect to defer receipt of up to 100% of his or her compensation payable by the
Companies, and such amounts are placed into a deferral account. The deferring
directors will have the option to select various INVESCO Funds in which all or
part of their deferral account will be deemed to be invested. The list of funds
may change from time to time and may include AIM Funds in addition to INVESCO
Funds. Distributions from the deferring directors' deferral accounts will be
paid in cash, generally in equal quarterly installments over a period of up to
ten years (depending on the New Compensation Agreement) beginning on the date
selected under the New Compensation Agreement.
The Boards, in their sole discretion, will be able to accelerate or extend
the distribution of such deferral accounts after the deferring directors'
retirement benefits commence under the New Retirement Plan. The Boards, in their
sole discretion, also will be able to accelerate or extend the distribution of
such deferral accounts after the deferring directors' termination of service as
a director of the Companies. 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
New Compensation Agreements will not be funded and, with respect to the payments
of amounts held in the deferral accounts, the deferring directors will have the
status of unsecured creditors of the Companies and of each other INVESCO Fund or
AIM Fund from which they will be deferring compensation.
INVESTMENT ADVISOR
INVESCO, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, currently is the
investment advisor for the Funds.
ADMINISTRATOR
INVESCO, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, currently is the
administrator for the Funds.
PRINCIPAL UNDERWRITER
AIM Distributors, 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000,
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 continuing
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 INVESCO Funds complex can be found in Exhibit F.
16
PROPOSAL 2 --
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 2?
Proposal 2 applies to the shareholders of all Funds.
BACKGROUND
INVESCO currently serves as the investment advisor to your Fund. AMVESCAP
has recommended restructuring the advisory and administrative servicing
arrangements so that AIM is the advisor and administrator for all INVESCO Funds
and AIM Funds. Your Board has approved a new advisory agreement under which AIM
will serve as the investment advisor for your Fund. With respect to INVESCO
Multi-Sector Fund only, your Board has approved a new sub-advisory agreement
under which INVESCO Institutional, an affiliate of INVESCO, which is currently
serving as your Fund's investment advisor, will serve as sub-advisor. With
respect to INVESCO International Blue Chip Value Fund only, your Board has
approved a new sub-advisory agreement under which INVESCO Global, which is
currently serving as your Fund's sub-advisor pursuant to an agreement with
INVESCO, will serve as sub-advisor pursuant to an agreement with AIM. The
portfolio management team for your Fund will not change as a result of this
restructuring.
The Board recommends that you approve the new advisory agreement between
AIM and the applicable Company for your Fund. The Board is asking you to vote on
this new agreement because a Company may enter into a new advisory agreement for
a Fund only with shareholder approval. If approved, this new agreement would
replace the current advisory agreement between INVESCO and the applicable
Company for your Fund. The form of the proposed Master Investment Advisory
Agreement between AIM and each Company is at Appendix I.
Under the new arrangements, the advisory fees paid by your Fund will not
change. If shareholders of your Fund approve Proposal 2, the applicable Company
for your Fund will also enter into a new Master Administrative Services
Agreement with AIM that will replace the current Administrative Services
Agreement between such Company and INVESCO, and move the provision of certain
administrative services currently provided by INVESCO pursuant to the current
advisory agreement between such Company and INVESCO to the Master Administrative
Services Agreement with AIM. If the proposed advisory agreement is approved and
these new arrangements are implemented, the aggregate fees paid by your Fund for
advisory and administrative services will not increase.
Any voluntary or contractual expense limitations and fee waivers that have
been agreed to by INVESCO and the applicable Company with respect to your Fund
will not be terminated if the proposed new advisory agreement with AIM is
approved. Instead, AIM will assume INVESCO's obligations with respect to these
voluntary and contractual expense limitations and fee waivers, on the same terms
and conditions.
If INVESCO and the applicable Company have entered into voluntary or
contractual expense limitations or fee waivers with respect to your Fund,
INVESCO currently is entitled to reimbursement from a share class of your Fund
that has fees and expenses absorbed pursuant to this arrangement if such
reimbursement does not cause such share class to exceed the expense limitation
and the reimbursement is made within three years after INVESCO incurred the
expense. If the proposed new advisory agreement with AIM is approved, INVESCO
will assign to AIM its right to be reimbursed with respect to fees and expenses
absorbed by it. Other than substituting AIM for INVESCO as the party having the
right to be reimbursed, this assignment will not alter in any way the rights or
obligations of your Fund or its shareholders.
A description of how the proposed advisory agreement differs from the
current advisory agreement is set forth below under "Terms of the Proposed
Advisory Agreement." At an in-person meeting of the Board of each Company held
on August 12-13, 2003, the Board of the applicable Company, including a
17
majority of the independent directors, voted to recommend that shareholders
approve a proposal to adopt the proposed advisory agreement for your Fund.
YOUR FUND'S CURRENT INVESTMENT ADVISOR
INVESCO, the current investment advisor for your Fund, became the
investment advisor for each of the Funds under the current advisory agreements
on the dates indicated in Exhibit G. Your Fund's shareholders last voted on the
current advisory agreement on the date and for the purpose indicated in Exhibit
G. The Boards, including a majority of the independent directors, last approved
the current advisory agreements on May 15, 2003.
THE PROPOSED NEW INVESTMENT ADVISOR FOR YOUR FUND
AIM is a wholly owned subsidiary of A I M Management Group Inc. ("AIM
Management"), a holding company with its principal offices at 00 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000. AIM Management is an indirect wholly owned
subsidiary of AMVESCAP, 00 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx.
AMVESCAP and its subsidiaries are an independent investment management group. A
list of the names, addresses and principal occupations of the principal
executive officer and directors of AIM is in Exhibit H.
POSITIONS WITH AIM HELD BY COMPANY'S DIRECTORS OR EXECUTIVE OFFICERS
Xxxx X. Xxxxxxxxxx, who is a director and/or executive officer of each
Company, also is a director and/or officer of AIM. He also beneficially owns
shares of AMVESCAP and/or options to purchase shares of AMVESCAP.
TERMS OF THE CURRENT ADVISORY AGREEMENTS
Under the terms of the current advisory agreement with INVESCO for your
Fund, INVESCO acts as investment manager and administrator for your Fund. As
investment manager, INVESCO provides a continuous investment program for your
Fund, including investment research and management, with respect to all
securities, investments and cash equivalents of your Fund. INVESCO also makes
recommendations as to the manner in which voting rights, rights to consent to
actions of your Fund and any other rights pertaining to your Fund's securities
shall be exercised, and, except for INVESCO Multi-Sector Fund, calculates the
net asset value of your Fund, subject to such procedures established by the
Board and based upon information provided by your Fund, the custodian of your
Fund or other source as designated by the Board. INVESCO provides
sub-accounting, recordkeeping and administrative services to your Fund under an
administrative services agreement. Under the current advisory agreement, as
administrator, INVESCO also provides, at its expense and at the request of your
Fund, executive, statistical, administrative, internal accounting and clerical
services and office space, equipment and facilities.
For INVESCO International Blue Chip Value Fund and INVESCO U.S. Government
Money Fund, under the terms of the current advisory agreement, INVESCO has no
liability to the applicable Company, your Fund or to your Fund's shareholders or
creditors, for any error of judgment, mistake of law, or for any loss arising
out of any investment, nor for any other act or omission, in the performance of
its obligations to such Company or your Fund unless such act or omission
involves willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties under the current advisory agreement.
The current advisory agreement for your Fund continues in effect from year
to year only if such continuance is specifically approved at least annually by
(i) the applicable Board or the vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of your Fund, and (ii) the vote of a
majority of the directors of the applicable Company who are not interested
persons of INVESCO or such Company by votes cast in person at a meeting called
for such purpose. The current advisory agreement provides that the applicable
Board, a majority of the outstanding voting securities of your Fund or
18
INVESCO may terminate the agreement with respect to your Fund on 60 days'
written notice without penalty. The agreement terminates automatically in the
event of its assignment, unless an order is issued by the SEC conditionally or
unconditionally exempting such assignment from the applicable provisions of the
1940 Act.
The current advisory agreement for your Fund provides that your Fund will
pay or cause to be paid all of its expenses not assumed by INVESCO, including
without limitation:
- brokerage commissions, issue and transfer taxes and other costs related
to securities transactions;
- fees, charges and expenses related to accounting, custodian, depository,
dividend disbursing agent, dividend reinvestment agent, transfer agent,
registrar, independent pricing services and legal services performed for
your Fund;
- interest on indebtedness incurred by the applicable Company or your Fund;
- taxes;
- fees for maintaining the registration and qualification of your Fund or
its shares under federal and state law;
- compensation and expenses of the applicable Board;
- costs of printing and distributing reports, notices of shareholders'
meetings, proxy statements, dividend notices, prospectuses, statements of
additional information and other communications to your Fund's
shareholders, including expenses relating to Board and shareholder
meetings;
- costs, fees and other expenses arising in connection with the
organization and filing of the applicable Company's Articles of
Incorporation, determinations of tax status of your Fund, initial
registration and qualification of your Fund's securities under federal
and state securities laws and approval of such Company's operations by
any other federal or state authority;
- expenses of repurchasing and redeeming shares of your Fund;
- insurance premiums;
- costs of designing, printing and issuing certificates representing shares
of your Fund;
- extraordinary expenses, including fees and disbursements of the
applicable Company's counsel, in connection with litigation by or against
such Company or your Fund;
- premiums for the fidelity bond maintained by your Fund pursuant to the
1940 Act (except those premiums that may be allocated to INVESCO as an
insured);
- association and institute dues;
- expenses, if any, of distributing shares of your Fund pursuant to a 12b-1
plan of distribution; and
- all other costs and expenses of your Fund's operations and organization
unless otherwise explicitly provided.
The current advisory agreement requires INVESCO to reimburse your Fund
monthly for any salaries paid by your Fund to officers, directors and full-time
employees of your Fund who are also officers, general partners or employees of
INVESCO or its affiliates. Although INVESCO has this obligation under the
current advisory agreement, your Fund does not pay salaries to its officers,
non-independent directors or employees for services rendered to your Fund.
If, in any given year, the sum of your Fund's expenses exceed the most
restrictive state-imposed annual expense limitation, INVESCO is required to
promptly reimburse such excess expenses to your Fund pursuant to the current
advisory agreement. Interest, taxes, extraordinary expenses and expenses which
are capitalized are not deemed expenses for purposes of this reimbursement
obligation.
19
The annual rates at which INVESCO receives fees from your Fund under the
current advisory agreement, the total net assets of your Fund, the dollar
amounts of advisory fees paid to INVESCO by your Fund net of any expense
limitations and the reimbursement, if any, made by INVESCO to your Fund for the
most recent fiscal year are in Exhibit I.
ADDITIONAL SERVICES PROVIDED BY INVESCO AND ITS AFFILIATES
INVESCO and its affiliates also provide additional services to the
Companies and Funds. INVESCO currently provides or arranges for others to
provide accounting and administrative services to your Fund. INVESCO currently
serves as your Fund's transfer agent. Prior to July 1, 2003, INVESCO
Distributors, Inc. served as the principal underwriter for your Fund. This
company is an indirect wholly owned subsidiary of AMVESCAP, the parent company
of INVESCO. Information concerning fees paid to INVESCO and its affiliates for
these services is in Exhibit J.
ADVISORY FEES CHARGED BY AIM FOR SIMILAR FUNDS IT MANAGES
The advisory fee schedules for other funds advised by AIM with similar
investment objectives as your Fund are in Exhibit K.
TERMS OF THE PROPOSED ADVISORY AGREEMENTS
Under the terms of the proposed advisory agreement, AIM would act as
investment manager and administrator for your Fund. As investment manager, AIM
would provide a continuous investment program for your Fund, including
supervision of all aspects of your Fund's operations, including the investment
and reinvestment of cash, securities or other properties comprising your Fund's
assets and investment research and management, subject at all times to the
policies and control of the applicable Board. AIM would also provide
administrative services pursuant to a Master Administrative Services Agreement.
The proposed advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of obligations
or duties under the agreement on the part of AIM or any of its officers,
directors, or employees, AIM would not be subject to liability to the applicable
Company or your Fund or to any shareholders of your Fund for any act or omission
in the course of, or connected with, rendering services under the agreement or
for any losses that may be sustained in the purchase, holding or sale of any
security.
The proposed advisory agreement for your Fund would continue in effect from
year to year only if such continuance is specifically approved at least annually
by (i) the Board or the vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of your Fund, and (ii) the affirmative vote of a
majority of the directors of the applicable Company who are not interested
persons of AIM or such Company by votes cast in person at a meeting called for
such purpose. The proposed advisory agreement provides that the applicable
Board, a majority of the outstanding voting securities of your Fund or AIM may
terminate the agreement with respect to your Fund on 60 days' written notice
without penalty. The proposed agreement terminates automatically in the event of
its "assignment" (as defined in the 1940 Act).
The proposed advisory agreement for your Fund provides that your Fund will
pay or cause to be paid all of the ordinary business expenses incurred in the
operations of your Fund and the offering of its shares. These expenses borne by
your Fund would include, without limitation, brokerage commissions, taxes,
legal, accounting, auditing, or governmental fees, the cost of preparing share
certificates, custodian, transfer and shareholder service agent costs, expenses
of issue, sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, expenses relating to trustees and shareholder
meetings, the cost of preparing and distributing reports and notices to
shareholders, the fees and other expenses incurred by the applicable Company on
behalf of your Fund in connection with membership in investment company
organizations and the cost of printing copies of prospectuses and statements of
additional information distributed to your Fund's shareholders.
20
The compensation to be paid to AIM under the proposed advisory agreement
would be calculated by applying annual rates to the average daily net assets of
your Fund for each calendar year. The annual rates at which AIM will receive
advisory fees from your Fund under the proposed advisory agreement are in
Exhibit L.
If Proposal 2 is approved for a Company, such Company will be able to take
advantage of an exemptive order obtained from the SEC by AIM and certain of the
AIM Funds. This exemptive order will allow your Fund and each other series
portfolio of such Company (each, an "Investing Fund") to invest their uninvested
cash in money market funds that have AIM or an affiliate of AIM as an investment
advisor (the "Affiliated Money Market Funds"), provided that investments in
Affiliated Money Market Funds do not exceed 25% of the total assets of the
Investing Fund. AIM will receive advisory fees from the Affiliated Money Market
Fund to the extent an Investing Fund invests uninvested cash in such Affiliated
Money Market Fund. If the applicable Board approves AIM's use of the exemptive
order for a Company, AIM intends to waive a portion of the advisory fees payable
by each Investing Fund in an amount equal to 25% of the advisory fee AIM
receives from the Affiliated Money Market Fund as a result of such Investing
Fund's investment of uninvested cash in such Affiliated Money Market Fund.
The primary differences between the current advisory agreements with
INVESCO and the proposed advisory agreements with AIM that the Boards approved
are to:
- replace INVESCO with AIM as the investment advisor for your Fund;
- move certain administrative services to an administrative services
agreement with AIM;
- for INVESCO International Blue Chip Value Fund and INVESCO U.S.
Government Money Fund, expand provisions regarding broker-dealer
relationships that are set forth in the current advisory agreement to
make them consistent with similar provisions in other AIM advisory
agreements;
- add provisions relating to certain functions to be performed by AIM in
connection with your Fund's securities lending program;
- change certain obligations regarding payment of expenses of your Fund;
- simplify certain rights applicable to your Fund's right to terminate
advisory services or amend the proposed advisory agreement;
- revise non-exclusivity provisions that are set forth in the current
advisory agreement;
- amend delegation provisions that are set forth in the current advisory
agreement;
- add to the limitation of liability provisions that are set forth in the
current advisory agreement to, among other things, specifically state the
limitation of liability of the applicable Company's shareholders; and
- change the governing state law set forth in the current advisory
agreement.
Although certain terms and provisions in the current advisory agreements
with INVESCO and the proposed advisory agreements with AIM are described
slightly differently, there are few substantive differences between these
agreements. The substantive differences are discussed below.
ADMINISTRATIVE SERVICES
For your Fund, the applicable Board, in approving the proposed advisory
agreement with AIM, has approved removing the provision of certain
administrative services that are covered under the current advisory agreement
with INVESCO, and consolidating those administrative services with your Fund's
accounting and recordkeeping services in a new Master Administrative Services
Agreement with AIM. The primary reason for this change is to make your Fund's
agreements consistent with similar agreements for the AIM Funds. If shareholders
approve the proposed advisory agreement, your Fund will continue to receive
substantially the same accounting and administrative services it currently
receives and at the same
21
or lower costs pursuant to the new Master Administrative Services Agreement. As
a result, there would be no loss of services nor would there by any increase in
costs borne by your Fund as a result of the transfer of administrative duties
from the advisory agreement to the Master Administrative Services Agreement.
BROKER-DEALER RELATIONSHIPS AND AFFILIATED BROKERAGE
For the INVESCO International Blue Chip Value Fund and INVESCO U.S.
Government Money Fund, the current advisory agreement requires INVESCO, when
selecting brokers or dealers, to first obtain the most favorable execution and
price for your Fund; after fulfilling this primary requirement INVESCO may
consider, as secondary factors whether such firms provide statistical research
and other information to INVESCO. The proposed advisory agreement specifies that
AIM's primary consideration in effecting a security transaction will be to
obtain the best execution. In selecting broker-dealers to execute particular
transactions, AIM will consider the best net price available, the reliability,
integrity and financial condition of the broker-dealer, the size of and
difficulty in executing the order and the value of the expected contribution of
the broker-dealer to the investment performance of the applicable Company's
portfolio funds on a continuing basis. Accordingly, the price to your Fund in
any transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other aspects of the
fund execution services offered by the broker-dealer. The broker-dealer
relationship provisions of the current advisory agreement with INVESCO for your
Fund do not specify these factors.
For INVESCO Multi-Sector Fund, there is no substantive change between the
agreements regarding the advisor's ability to select broker-dealers to perform
securities transactions for your Fund.
Although AIM does not currently execute trades through brokers or dealers
that are affiliated with AIM, the proposed advisory agreement includes a new
provision that would permit such trades, subject to compliance with applicable
federal securities laws, rules, interpretations and exemptions.
SECURITIES LENDING
If your Fund engages in securities lending, AIM will provide it with
investment advisory services and related administrative services. The proposed
advisory agreement includes a new provision that specifies the administrative
services to be rendered by AIM if your Fund engages in securities lending
activities, as well as the compensation AIM may receive for such administrative
services. Administrative services to be provided include: (a) overseeing
participation in the securities lending program to ensure compliance with all
applicable regulatory and investment guidelines; (b) assisting the securities
lending agent or principal (the "agent") in determining which specific
securities are available for loans; (c) monitoring the agent to ensure that
securities loans are effected in accordance with AIM's instructions and with
procedures adopted by the applicable Board; (d) preparing appropriate periodic
reports for, and seeking appropriate approvals from, the applicable Board with
respect to securities lending activities; (e) responding to agent inquiries; and
(f) performing such other duties as may be necessary.
In accordance with an exemptive order issued by the SEC, before your Fund
may participate in a securities lending program, the applicable Board must
approve such participation. In addition, the applicable Board must evaluate the
securities lending arrangements annually, and must determine that it is in the
best interests of the shareholders of your Fund to invest in AIM-advised money
market funds any cash collateral your Fund receives as security for the
borrower's obligation to return the loaned securities. If your Fund invests the
cash collateral in AIM-advised money market funds, AIM will receive additional
advisory fees from these money market funds, because the invested cash
collateral will increase the assets of these funds and AIM receives advisory
fees based upon the assets of these funds.
AIM does not receive any additional compensation for advisory services
rendered in connection with securities lending activities. As compensation for
the related administrative services AIM will provide, your Fund will pay AIM a
fee equal to 25% of the net monthly interest or fee income retained or paid to
your Fund from such activities. AIM intends to waive this fee, and has agreed to
seek Board approval prior to its receipt of all or a portion of such fee.
22
PAYMENT OF EXPENSES AND RESTRICTIONS ON FEES RECEIVED
Under the current advisory agreement with INVESCO, INVESCO has the
obligation to reimburse your Fund for any salaries paid by your Fund to
officers, non-independent directors and employees of your Fund. Your Fund does
not currently pay any such salaries. Such provision is not included in the
proposed advisory agreement with AIM.
The current advisory agreement provides that if annual fees exceed the most
restrictive state-imposed annual expense limitation, INVESCO is required to
reimburse any such excess to your Fund. Such state-imposed limitations are no
longer applicable because the National Securities Market Improvements Act of
1996 (NSMIA) preempted state laws under which mutual funds such as your Fund
previously were regulated. Accordingly, under the proposed advisory agreement,
such annual expense limitation has been removed. Removing this state-imposed
annual expense limitation will not result in an increase in fees paid by your
Fund.
TERMINATION/AMENDMENT RIGHTS
The current advisory agreement with INVESCO provides that the applicable
Company can terminate the agreement with INVESCO or amend the terms of the
agreement upon receipt of the affirmative vote of a majority of the outstanding
securities (as defined in the 1940 Act) of all series portfolios of such
Company. Under the 1940 Act and the regulations thereunder, as interpreted by
the SEC, advisory services provided to your Fund cannot be terminated or amended
without the approval by a majority of the outstanding securities of your Fund,
unless, in the case of an amendment, the applicable Board may approve the
changes. The proposed advisory agreement simplifies the language regarding
termination and amendment of the agreement to be consistent with the 1940 Act
and the regulations thereunder, as interpreted by the SEC.
NON-EXCLUSIVITY PROVISIONS
The current advisory agreement with INVESCO provides that the services
furnished by INVESCO are not deemed to be exclusive and that INVESCO shall be
entitled to furnish similar services to others, including other investment
companies with similar objectives, and that INVESCO may aggregate orders for its
other customers together with any securities of the same type to be sold or
purchased for your Fund in order to obtain best execution and lower brokerage
commissions. In such event, INVESCO must allocate the securities purchased or
sold and the expenses incurred in the transaction in a manner it considers most
equitable.
AIM has proposed and the Boards have agreed that the non-exclusivity
provisions in the proposed advisory agreement with AIM should be divided into
two separate provisions: one dealing with services provided by AIM to other
investment accounts and the other dealing with employees of AIM. Under the new
provisions, AIM will act as investment manager or advisor to fiduciary and other
managed accounts and to other investment companies and accounts, including
off-shore entities or accounts. The proposed advisory agreement states that
whenever your Fund and one or more other investment companies or accounts
advised by AIM have moneys available for investment, investments suitable and
appropriate for each will be allocated in accordance with a formula believed to
be equitable to your Fund and such other companies and accounts. Such allocation
procedure may adversely affect the size of the positions obtainable and the
prices realized by your Fund. The non-exclusivity provisions of the proposed
advisory agreement also explicitly recognize that officers and directors of AIM
may serve as officers or directors of the applicable Company, and that officers
and directors of such Company may serve as officers or directors of AIM to the
extent permitted by law; and that officers and directors of AIM do not owe an
exclusive duty to such Company. As described above, unlike the current advisory
agreement, the proposed advisory agreement does not require AIM to reimburse the
applicable Company for any salaries paid by such Company to officers, directors
and full-time employees of such Company who are also officers, directors or
employees of AIM or its affiliates. Your Fund does not currently pay any such
salaries.
23
DELEGATION
The current advisory agreement provides that INVESCO may, in compliance
with applicable law and with the prior written approval of your Fund, make use
of affiliated companies and their employees in connection with rendering of the
services required of INVESCO. INVESCO must supervise all such services and
remain fully responsible for the services provided.
The proposed advisory agreement expands the extent to which AIM can
delegate its rights, duties and obligations by expressly providing that AIM may
delegate any or all of its rights, duties or obligations under the agreement to
one or more sub-advisors rather than solely certain specified advisory services.
The proposed advisory agreement also provides that AIM may replace sub-advisors
from time to time, in accordance with applicable federal securities laws, rules
and regulations in effect or interpreted from time to time by the SEC or with
exemptive orders or other similar relief. Any such delegation shall require
approval by the applicable Board and the shareholders unless, in accordance with
applicable federal securities laws, rules, interpretations and exemptions, AIM
is not required to seek shareholder approval of the appointment of a
sub-advisor. For INVESCO Multi-Sector Fund, AIM currently intends to appoint
INVESCO Institutional as the sub-advisor to your Fund if the shareholders
approve the proposed sub-advisory agreement described under Proposal 3. For
INVESCO International Blue Chip Value Fund, AIM currently intends to appoint
INVESCO Global as the sub-advisor to your Fund if the shareholders approve the
proposed sub-advisory agreement described under Proposal 4.
LIMITATION OF LIABILITY OF AIM, COMPANY AND SHAREHOLDERS
For the INVESCO International Blue Chip Value Fund and INVESCO U.S.
Government Money Fund, as described above under the descriptions of the terms of
the current advisory agreement and the proposed advisory agreement,
respectively, both agreements provide limitation of liability for the advisor.
For INVESCO Multi-Sector Fund, the current advisory agreement does not
explicitly state the limitation of liability for INVESCO for acts or omissions
in the course of, or connected with, rendering advisory services under the
current advisory agreement.
The limitation of liability provisions of the 1940 Act apply to both
INVESCO and AIM in their capacity as advisor. In addition, the proposed advisory
agreement establishes a limitation of liability standard for AIM and states that
no series of any Company shall be liable for the obligations of other series of
such Company and the liability of AIM to one series of a Company shall not
automatically render AIM liable to any other series of such Company. Consistent
with applicable law, the proposed advisory agreement would also include a
provision stating that AIM's obligations under the agreement are not binding on
any shareholders the Companies individually and that shareholders are entitled
to the same limitation on personal liability as shareholders of private
corporations for profit. The primary reason for this change is to make your
Fund's agreement consistent with similar agreements for the AIM Funds.
STATE LAW GOVERNING THE AGREEMENT
Questions of state law under the current advisory agreement with INVESCO
are governed by the laws of Colorado. Under the proposed advisory agreement with
AIM, Texas law would apply. The Boards determined that, because the services
under the proposed advisory agreement with AIM will primarily be provided in
Texas, it was more appropriate to apply Texas law to the proposed advisory
agreement.
FACTORS THE DIRECTORS CONSIDERED IN APPROVING THE ADVISORY AGREEMENTS
At the request of AIM, the Boards discussed the approval of the proposed
advisory agreements at an in-person meeting held on August 12-13, 2003. The
independent directors also discussed the approval of the proposed advisory
agreements with independent counsel prior to that meeting. In evaluating the
proposed advisory agreements, the Boards requested and received information from
AIM to assist in its deliberations.
24
The Boards considered the following factors in determining reasonableness
and fairness of the proposed changes between the current advisory agreements
with INVESCO and the proposed advisory agreements with AIM:
- The qualifications of AIM to provide investment advisory services. The
Boards reviewed the credentials and experience of the officers and
employees of AIM who will provide investment advisory services to the
Funds, and, for INVESCO Multi-Sector Fund and INVESCO International Blue
Chip Value Fund, the officers and employees of INVESCO Institutional and
INVESCO Global, respectively, who will provide sub-advisory services to
such Funds if Proposals 3 or 4, as applicable, are approved by
shareholders, and noted that the persons providing portfolio management
services to the Funds would not change if Proposal 2 and, if applicable,
Proposals 3 and 4 are approved.
- The range of advisory services provided by AIM. The Boards reviewed the
services to be provided by AIM under the proposed advisory agreements,
and noted that no material changes in the level or type of services
provided under the current advisory agreements with INVESCO would occur
if the proposed advisory agreements are approved by the shareholders,
other than the provision by AIM of certain administrative services if a
Fund engages in securities lending.
- Qualifications of AIM to provide a range of management and administrative
services. The Boards reviewed the general nature of the non-investment
advisory services performed by AIM and its affiliates, such as
administrative, transfer agency and distribution services, and the fees
received by AIM and its affiliates for performing such services. In
addition to reviewing such services, the Boards also considered the
organizational structure employed by AIM and its affiliates to provide
those services. The Boards reviewed the proposed elimination from the
proposed advisory agreements of the provision of administrative services
to the Funds. The Boards also reviewed the proposed form of Master
Administrative Services Agreement, noted that the overall services to be
provided under the existing arrangements and under the proposed Master
Administrative Services Agreements are the same, and concluded that the
overall accounting and administrative services to be provided by AIM
would not change under the combination of the proposed advisory
agreements and the Master Administrative Services Agreements.
- The performance record of your Fund. The applicable Board reviewed your
Fund's performance record and determined that AIM has developed the
expertise and resources for managing funds with an investment objective
and strategies similar to those of your Fund and is able, therefore, to
provide advisory and administrative services to your Fund.
- Advisory fees and expenses. The applicable Board examined the expense
ratio and the level of advisory fees for your Fund under the current
advisory agreement and compared them with the advisory fees expected to
be incurred under the proposed advisory agreement. The applicable Board
concluded that your Fund's projected expense ratio and advisory fees
under the proposed advisory agreement were fair and reasonable in
comparison with those of other similar funds (including similar funds
advised by AIM) and in light of the investment management services to be
provided by AIM under the proposed advisory agreement. The advisory fees
that are being proposed under the proposed advisory agreement are the
same as the advisory fees paid to INVESCO under the current advisory
agreement, other than the removal of the reimbursement obligation related
to services provided to both your Fund and AIM by officers and directors
which is not currently applicable, and the provisions that permit AIM's
receipt of fees for providing administrative services in connection with
securities lending activities. Such fees would be paid only to the extent
that your Fund engages in securities lending. The applicable Board noted
that AIM intends to waive its right to receive any fees under the
proposed investment advisory agreement for the administrative services it
provides in connection with securities lending activities. The applicable
Board also noted that AIM has agreed to seek the Board's approval prior
to its receipt of all or a portion of such fees.
25
- The profitability of AIM. The Boards reviewed information concerning the
profitability of AIM's (and its affiliates') investment advisory and
other activities and its financial condition. The Boards noted that,
except as described above, no changes to the advisory fees were being
proposed, other than to permit AIM's receipt of fees for providing
services in connection with securities lending, and further noted that
AIM intends to waive its right to receive any such fees and has agreed to
seek Board approval prior to its receipt of all or a portion of such
fees. The Boards also noted that, in accordance with an exemptive order
issued by the SEC, before a Fund may participate in a securities lending
program, the applicable Board must approve such participation. In
addition, the applicable Board must evaluate the securities lending
arrangements annually and determine that it is in the best interests of
the shareholders of a Fund to invest in AIM-advised money market funds
any cash collateral such Fund receives as security for the borrower's
obligation to return the loaned securities. If a Fund invests the cash
collateral in AIM-advised money market funds, AIM will receive additional
advisory fees from these money market funds, because the invested cash
collateral will increase the assets of these funds and AIM receives
advisory fees based upon the assets of these funds. The Boards noted that
the cash collateral relates to assets of a Fund that have already been
invested, and the investment of the cash collateral is intended to
benefit such Fund by providing it with additional income. The Boards also
noted that an investment of the cash collateral in an AIM-advised money
market fund would have a positive effect on the profitability of AIM.
- The terms of the proposed advisory agreements. The Boards reviewed the
terms of the proposed advisory agreements, including changes being made
to clarify or expand non-exclusivity, delegation and liability
provisions, to separate administrative services from advisory services
and to have AIM assist a Fund if it engages in securities lending. The
Boards determined that these changes reflect the current environment in
which the Funds operate, and that AIM should have the flexibility to
operate in that environment.
After considering the above factors, the applicable Board concluded that it
is in the best interests of your Fund and its shareholders to approve the
proposed advisory agreement between the applicable Company and AIM for your
Fund.
Each Board reached this conclusion after careful discussion and analysis.
Each Board believes that it has carefully and thoroughly examined the pertinent
issues and alternatives. In recommending that you approve the proposed advisory
agreement, the independent directors have taken the action which they believe to
be in your best interests. In so doing, they were advised by independent
counsel, retained by the independent directors and paid for by the applicable
Company, as to the nature of the matters to be considered and the standards to
be used in reaching their decision.
If approved, each proposed advisory agreement will become effective on
November 5, 2003, and will expire, unless renewed, on or before June 30, 2005.
For INVESCO Multi-Sector Fund, if shareholders of your Fund do not approve both
Proposals 2 and 3, the current advisory agreement with INVESCO will continue in
effect for your Fund. For INVESCO U.S. Government Money Fund and INVESCO
International Blue Chip Value Fund, if shareholders of your Fund do not approve
Proposal 2, the current advisory agreement with INVESCO will continue in effect
for your Fund.
26
THE BOARDS' RECOMMENDATION ON PROPOSAL 2
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" this Proposal.
PROPOSAL 3 --
APPROVAL OF NEW SUB-ADVISORY AGREEMENT
WITH INVESCO INSTITUTIONAL (N.A.), INC.
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 3?
Proposal 3 applies only to the shareholders of INVESCO Multi-Sector Fund.
BACKGROUND
INVESCO currently serves as the investment advisor to your Fund. AMVESCAP
has recommended restructuring the advisory and administrative servicing
arrangements so that AIM is the advisor and administrator for all INVESCO Funds
and AIM Funds. Your Board has approved a proposed advisory agreement under which
AIM will serve as the investment advisor for your Fund, and a proposed sub-
advisory agreement under which INVESCO Institutional, an affiliate of INVESCO,
will serve as sub-advisor. The portfolio management team for your Fund will not
change as a result of this restructuring.
Your Board recommends that you approve the proposed sub-advisory agreement
between AIM and INVESCO Institutional for your Fund. Your Board is asking you to
vote on this proposed sub-advisory agreement because the proposed sub-advisory
agreement for your Fund may only be entered into with shareholder approval. The
form of the proposed Master Intergroup Sub-Advisory Contract for Mutual Funds
between AIM and INVESCO Institutional for your Fund is at Appendix II.
At an in-person meeting of your Board held on August 12-13, 2003, the
Board, including a majority of the independent directors, voted to recommend
that shareholders approve a proposal to adopt the proposed sub-advisory
agreement for your Fund.
THE PROPOSED SUB-ADVISOR FOR YOUR FUND
INVESCO Institutional is an indirect wholly owned subsidiary of AMVESCAP. A
list of the names, addresses and principal occupations of the principal
executive officer and directors of INVESCO Institutional is in Exhibit M.
POSITIONS WITH INVESCO INSTITUTIONAL HELD BY IMSFI'S DIRECTORS OR EXECUTIVE
OFFICERS
None of the directors or executive officers of INVESCO Manager Series
Funds, Inc. ("IMSFI") also are directors and/or officers of INVESCO
Institutional.
TERMS OF THE PROPOSED SUB-ADVISORY AGREEMENT
Under the proposed sub-advisory agreement between AIM and INVESCO
Institutional, INVESCO Institutional will provide general investment advice and
portfolio management to your Fund and, subject to the supervision of the
directors of IMSFI and AIM and in conformance with the stated policies of your
Fund, INVESCO Institutional will manage the investment operations of your Fund.
INVESCO Institutional will not only make investment decisions for your Fund, but
will also place the purchase and sale orders for the portfolio transactions of
your Fund. INVESCO Institutional may purchase and sell portfolio securities from
and to brokers and dealers who sell shares of your Fund or provide your Fund,
AIM's other clients or INVESCO Institutional's other clients with research,
analysis, advice and similar services. INVESCO Institutional may pay to brokers
and dealers, in return for such research and analysis, a higher commission or
spread than may be charged by other brokers and dealers, subject to INVESCO
Institutional determining in good faith that such commission or spread is
reasonable in terms either of the
27
particular transaction or of the overall responsibility of AIM and INVESCO
Institutional to your Fund and their other clients and that the total
commissions or spreads paid by each fund will be reasonable in relation to the
benefits to the fund over the long term.
Specifically, INVESCO Institutional will be required to perform the
following services under the proposed sub-advisory agreement:
- To provide a continuous investment program for your Fund, including
investment research and management, with respect to all of your Fund's
assets in conformity with (i) IMSFI's Articles of Incorporation, bylaws
and registration statement, and (ii) the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations;
- To determine what securities and other investments are to be purchased or
sold for your Fund and the brokers and dealers through whom trades will
be executed;
- Whenever INVESCO Institutional simultaneously places orders to purchase
or sell the same security on behalf of your Fund and one or more accounts
advised by INVESCO Institutional, to allocate as to price and amount
among all such accounts in a manner believed to be equitable to each
account; and
- To maintain all books and records with respect to the securities
transactions of your Fund in compliance with the requirements of the 1940
Act and to furnish your Board and AIM with periodic and special reports
as your Board or AIM reasonably may request.
The proposed sub-advisory agreement will continue from year to year for
your Fund only if such continuance is specifically approved at least annually by
(i) your Board or the vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of your Fund, and (ii) the vote of a majority of
independent directors cast at a meeting called for such purpose. The proposed
sub-advisory agreement is terminable on 60 days' written notice by either party
thereto, by your Board, or by a vote of a majority of the outstanding voting
securities of your Fund, and will terminate automatically if assigned.
For the services to be rendered and the expenses to be assumed by INVESCO
Institutional under the proposed sub-advisory agreement, AIM will pay to INVESCO
Institutional a fee that is computed daily and paid on or before the last day of
the next succeeding calendar month on the basis of AIM's compensation on the
sub-advised assets per year. The annual rate at which INVESCO Institutional will
receive fees from AIM under the proposed sub-advisory agreement is in Exhibit N.
ADVISORY FEES CHARGED BY INVESCO INSTITUTIONAL FOR SIMILAR TYPES OF ACCOUNTS FOR
WHICH IT SERVES AS ADVISOR
The annual advisory fee rates paid to INVESCO Institutional by certain
types of accounts with similar investment objectives as your Fund are in Exhibit
O.
FACTORS THE DIRECTORS CONSIDERED IN APPROVING THE PROPOSED SUB-ADVISORY
AGREEMENT
At the request of AIM, your Board discussed the approval of the proposed
sub-advisory agreement at an in-person meeting held on August 12-13, 2003. The
independent directors also discussed the approval of the proposed sub-advisory
agreement with independent counsel prior to that meeting. In evaluating the
proposed sub-advisory agreement, your Board requested and received information
from AIM to assist in its deliberations.
Your Board considered the following factors in determining the
reasonableness and fairness of the proposed sub-advisory agreement between AIM
and INVESCO Institutional for your Fund:
- The range of sub-advisory services provided by INVESCO
Institutional. Your Board reviewed the services to be provided by
INVESCO Institutional under the proposed sub-advisory agreement, and
noted that, if the proposed sub-advisory agreement is approved by
shareholders, the level and type of investment advisory services under
the proposed sub-advisory agreement will be comparable to
28
those currently provided by INVESCO under XXXXX's current advisory
agreement with INVESCO.
- The fees payable to INVESCO Institutional for its services. Your Board
noted that if the proposed sub-advisory agreement is approved, INVESCO
Institutional will receive compensation based on that portion of the
assets of your Fund that it manages (the sub-advised assets). In
addition, the fees paid would be a percentage of the advisory fees that
AIM receives on the sub-advised assets. Your Board noted that these fees
had been agreed to by AIM and INVESCO Institutional, as well as by
AMVESCAP, the indirect parent of AIM and INVESCO Institutional. Your
Board also noted that the proposed changes to the compensation to INVESCO
Institutional would have no effect on your Fund, since the fees are
payable by AIM.
- The performance record of your Fund. Your Board reviewed the performance
record of your Fund and noted that the same portfolio management team
will be providing investment advisory services to your Fund under the
proposed sub-advisory agreement. Your Board determined that such
portfolio management team had provided satisfactory services with respect
to your Fund, after considering performance information that it received
during the past year from INVESCO.
- The profitability of INVESCO Institutional. Your Board considered
information concerning the profitability of INVESCO Institutional's (and
its affiliates') investment advisory and other activities and its
financial condition. Your Board noted that INVESCO Institutional would
receive an annual fee equal to a percentage of AIM's compensation on the
sub-advised assets. Your Board noted that the proposed sub-advisory fees
are less than the advisory fees currently received by INVESCO under the
current advisory agreement, but that INVESCO Institutional assured your
Board that such reduction would not affect the nature or quality of the
services provided by it to your Fund.
- The terms of the proposed agreement. Your Board reviewed the terms of
the proposed agreement. Your Board determined that this new agreement
reflects the current environment in which your Fund operates, and that
INVESCO Institutional should have the flexibility to operate in that
environment.
After considering the above factors, your Board concluded that it is in the
best interests of your Fund and its shareholders to approve the proposed
sub-advisory agreement between AIM and INVESCO Institutional for your Fund.
Your Board reached this conclusion after careful discussion and analysis.
Your Board believes that it has carefully and thoroughly examined the pertinent
issues and alternatives. In recommending that you approve the proposed
sub-advisory agreement, the independent directors have taken the action which
they believe to be in your best interests. In so doing, they were advised by
independent counsel, retained by the independent directors and paid for by
XXXXX, as to the nature of the matters to be considered and the standards to be
used in reaching their decision.
If approved, the proposed sub-advisory agreement will become effective on
November 5, 2003, and will expire, unless renewed, on or before June 30, 2005.
If shareholders of your Fund do not approve both Proposals 2 and 3, the current
advisory agreement with INVESCO will continue in effect for your Fund and AIM
and INVESCO Institutional will not enter into the proposed sub-advisory
agreement for your Fund.
THE BOARD'S RECOMMENDATION ON PROPOSAL 3
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" this Proposal.
29
PROPOSAL 4 --
APPROVAL OF A NEW SUB-ADVISORY AGREEMENT WITH
INVESCO GLOBAL ASSET MANAGEMENT (N.A.), INC.
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 4?
Proposal 4 applies only to the shareholders of INVESCO International Blue
Chip Value Fund.
BACKGROUND
INVESCO currently serves as the investment advisor to your Fund and INVESCO
Global currently serves as the sub-advisor to your Fund pursuant to an agreement
with INVESCO. AMVESCAP has recommended restructuring the advisory and
administrative servicing arrangements so that AIM is the advisor and
administrator for all INVESCO Funds and AIM Funds. Your Board has approved a
proposed advisory agreement under which AIM will serve as the investment advisor
for your Fund, and a proposed sub-advisory agreement under which INVESCO Global
will serve as sub-advisor pursuant to an agreement with AIM. The portfolio
management team for your Fund will not change as a result of this restructuring.
Your Board recommends that you approve the proposed sub-advisory agreement
between AIM and INVESCO Global for your Fund. Your Board is asking you to vote
on this proposed sub-advisory agreement because the proposed sub-advisory
agreement for your Fund may only be entered into with shareholder approval. If
approved, this new agreement would replace the current sub-advisory agreement
between INVESCO and INVESCO Global for your Fund. The form of the proposed
Master Intergroup Sub-Advisory Contract for Mutual Funds between AIM and INVESCO
Global for your Fund is at Appendix II.
A description of how the proposed advisory agreement differs from the
current advisory agreement is set forth below under "Terms of the Proposed
Sub-Advisory Agreement." At an in-person meeting of your Board held on August
12-13, 2003, your Board, including a majority of the independent directors,
voted to recommend that shareholders approve a proposal to adopt the proposed
sub-advisory agreement for your Fund.
YOUR FUND'S CURRENT SUB-ADVISOR
INVESCO Global, the current sub-advisor for your Fund, became the
sub-advisor for your Fund under the current sub-advisory agreement on September
18, 1998. Your Fund's initial shareholder approved the sub-advisory agreement on
September 18, 1998, and your Fund's public shareholders have not voted on the
sub-advisory agreement subsequent to that date. Your Board, including a majority
of the independent directors, last approved the current sub-advisory agreement
on May 15, 2003.
INVESCO Global is an indirect wholly owned subsidiary of AMVESCAP. A list
of the names, addresses and principal occupations of the principal executive
officer and directors of INVESCO Global is in Exhibit P.
POSITIONS WITH INVESCO GLOBAL HELD BY IIFI'S DIRECTORS OR EXECUTIVE OFFICERS
None of the directors or executive officers of INVESCO International Funds,
Inc. ("IIFI") also are directors and/or officers of INVESCO Global.
ADVISORY FEES CHARGED BY INVESCO GLOBAL FOR SIMILAR TYPES OF ACCOUNTS FOR WHICH
IT SERVES AS ADVISOR
The annual advisory fee rates paid to INVESCO Global by certain types of
accounts with similar investment objectives as your Fund are in Exhibit R.
30
TERMS OF THE PROPOSED SUB-ADVISORY AGREEMENT
Under the proposed sub-advisory agreement, INVESCO Global will provide
general investment advice and portfolio management to your Fund and, subject to
the supervision of the directors of IIFI and AIM and in conformance with the
stated policies of your Fund, INVESCO Global will manage the investment
operations of your Fund. INVESCO Global will not only make investment decisions
for your Fund, but will also place the purchase and sale orders for the
portfolio transactions of your Fund. INVESCO Global may purchase and sell
portfolio securities from and to brokers and dealers who sell shares of your
Fund or provide your Fund, AIM's other clients or INVESCO Global's other clients
with research, analysis, advice and similar services. INVESCO Global may pay to
brokers and dealers, in return for such research and analysis, a higher
commission or spread than may be charged by other brokers and dealers, subject
to INVESCO Global determining in good faith that such commission or spread is
reasonable in terms either of the particular transaction or of the overall
responsibility of AIM and INVESCO Global to your Fund and their other clients
and that the total commissions or spreads paid by each fund will be reasonable
in relation to the benefits to the fund over the long term.
Specifically, INVESCO Global will be required to perform the following
services under the proposed sub-advisory agreement:
- To provide a continuous investment program for your Fund, including
investment research and management, with respect to all of your Fund's
assets in conformity with (i) IIFI's Articles of Incorporation, bylaws
and registration statement, and (ii) the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations;
- To determine what securities and other investments are to be purchased or
sold for your Fund and the brokers and dealers through whom trades will
be executed;
- Whenever INVESCO Global simultaneously places orders to purchase or sell
the same security on behalf of your Fund and one or more accounts advised
by INVESCO Global, to allocate as to price and amount among all such
accounts in a manner believed to be equitable to each account; and
- To maintain all books and records with respect to the securities
transactions of your Fund in compliance with the requirements of the 1940
Act and to furnish your Board and AIM with periodic and special reports
as your Board or AIM reasonably may request.
The proposed sub-advisory agreement will continue from year to year for
your Fund only if such continuance is specifically approved at least annually by
(i) your Board or the vote of a majority of the outstanding voting securities
(as defined in the 1940 Act) of your Fund, and (ii) the vote of a majority of
independent directors cast at a meeting called for such purpose. The proposed
sub-advisory agreement is terminable on 60 days' written notice by either party
thereto, by your Board, or by a vote of a majority of the outstanding voting
securities of your Fund, and will terminate automatically if assigned.
For the services to be rendered and the expenses to be assumed by INVESCO
Global under the proposed sub-advisory agreement, AIM will pay to INVESCO Global
a fee that is computed daily and paid on or before the last day of the next
succeeding calendar month on the basis of AIM's compensation on the sub-advised
assets per year. The annual rate at which INVESCO Global will receive fees from
AIM under the proposed sub-advisory agreement is in Exhibit Q.
The primary differences between the current sub-advisory agreement between
INVESCO and INVESCO Global and the proposed sub-advisory agreement between AIM
and INVESCO Global that your Board approved are to:
- change the sub-advisory fee from a fee based on your Fund's net asset
value to a fee based on AIM's compensation on the sub-advised assets per
year;
- eliminate the obligation of INVESCO to indemnify INVESCO Global;
- add a provision requiring the reduction of sub-advisory fees in
connection with fee waivers and expense limitations;
31
- add a provision explicitly requiring INVESCO Global to maintain your
Fund's books and records; and
- change the governing state law set forth in the current sub-advisory
agreement.
Although certain terms and provisions in the current sub-advisory agreement
between INVESCO and INVESCO Global and the proposed sub-advisory agreement
between AIM and INVESCO Global are described slightly differently, there are few
substantive differences between these agreements. The substantive differences
are discussed below.
COMPENSATION OF INVESCO GLOBAL
Compensation under the current sub-advisory agreement between INVESCO and
INVESCO Global is based on a percentage of your Fund's net asset value, which
percentage decreases as your Fund's assets increase. The current fee schedule
ranges from 0.30% on the first $350 million of your Fund's average net assets to
0.14% of your Fund's average net assets over $8 billion. Under the proposed
sub-advisory agreement between AIM and INVESCO Global, AIM will pay to INVESCO
Global a fee based on AIM's compensation on the sub-advised assets per year.
INDEMNIFICATION PROVISION
The current sub-advisory agreement between INVESCO and INVESCO Global
requires INVESCO to indemnify INVESCO Global from and against any and all
liabilities, obligations, losses, damages, suits and expenses which may be
incurred by or asserted against INVESCO Global for which it is responsible. Such
indemnification provision is not included in the proposed sub-advisory agreement
between AIM and INVESCO Global.
REDUCTION OF SUB-ADVISORY FEES IN CONNECTION WITH XXX XXXXXXX AND EXPENSE
LIMITATIONS
Under the proposed sub-advisory agreement between AIM and INVESCO Global,
the sub-advisory fee payable to INVESCO Global will be reduced to the extent
that AIM's fees are reduced because of contractual or voluntary fee waivers or
expense limitations. To the extent AIM reimburses your Fund as a result of such
expense limitations, INVESCO Global will reimburse AIM that proportion of such
reimbursement payments which INVESCO Global's sub-advisory fee bears to AIM's
advisory fee. The current sub-advisory agreement between INVESCO and INVESCO
Global does not provide for such a reduction of sub-advisory fees in connection
with fee waivers or expense limitations.
BOOKS AND RECORDS PROVISION
The proposed sub-advisory agreement between AIM and INVESCO Global
explicitly requires INVESCO Global to maintain all required books and records
with respect to the securities transactions of your Fund in compliance with the
requirements of the 1940 Act and to furnish to your Board and AIM such periodic
and special reports as your Board or AIM reasonably may request. Pursuant to the
proposed sub-advisory agreement, INVESCO Global will agree that all records
which it maintains for AIM are AIM's property. INVESCO Global also will agree to
preserve for the periods prescribed by applicable law any records which it
maintains for AIM which are required to be maintained, and to surrender promptly
to AIM any records which it maintains for AIM upon AIM's request. The current
sub-advisory agreement between INVESCO and INVESCO Global does not explicitly
require INVESCO Global to maintain your Fund's books and records.
STATE LAW GOVERNING THE AGREEMENT
Questions of state law under the current sub-advisory agreement between
INVESCO and INVESCO Global are governed by the laws of Colorado. Under the
proposed sub-advisory agreement between AIM and INVESCO Global, Texas law would
apply. Your Board determined that, because AIM is located in
32
Texas and the services under the proposed advisory agreement with AIM will
primarily be provided in Texas, it was more appropriate to apply Texas law to
the proposed sub-advisory agreement.
FACTORS THE DIRECTORS CONSIDERED IN APPROVING THE PROPOSED SUB-ADVISORY
AGREEMENT
At the request of AIM, your Board discussed the approval of the proposed
sub-advisory agreement at an in-person meeting held on August 12-13, 2003. The
independent directors also discussed the approval of the proposed sub-advisory
agreement with independent counsel prior to that meeting. In evaluating the
proposed sub-advisory agreement, your Board requested and received information
from AIM to assist in its deliberations.
Your Board considered the following factors in determining reasonableness
and fairness of the proposed changes between the current sub-advisory agreement
between INVESCO and INVESCO Global and the proposed sub-advisory agreement
between AIM and INVESCO Global:
- The range of sub-advisory services provided by INVESCO Global. Your
Board reviewed the services to be provided by INVESCO Global under the
proposed sub-advisory agreement, and noted that no material changes in
the level or type of services provided under the current sub-advisory
agreement would occur if the proposed sub-advisory agreement is approved
by the shareholders.
- The fees payable to INVESCO Global for its services. Your Board noted
that if the proposed sub-advisory agreement is approved, INVESCO Global
will receive an annual fee equal to a percentage of the advisory fees
that AIM receives on the sub-advised assets, rather than an annual fee
equal to a percentage of your Fund's average net assets as it receives
under the current sub-advisory agreement.
- The performance record of your Fund. Your Board reviewed the performance
record of your Fund and noted that the same portfolio management team
will be providing investment advisory services to your Fund under the
proposed sub-advisory agreement. Your Board determined that such
portfolio management team had provided satisfactory services with respect
to your Fund, after considering performance information that it received
during the past year from INVESCO.
- The profitability of INVESCO Global. Your Board considered information
concerning the profitability of INVESCO Global's (and its affiliates')
investment advisory and other activities and its financial condition.
Your Board noted that INVESCO Global would receive an annual fee equal to
a percentage of AIM's compensation on the sub-advised assets. Your Board
noted that the proposed sub-advisory fees are calculated differently than
under the current sub-advisory agreement, but that INVESCO Global assured
the Board that such difference would not affect the nature or quality of
the services provided by it to your Fund.
- The terms of the proposed sub-advisory agreement. Your Board reviewed
the terms of the proposed sub-advisory agreement, including the changes
from the current sub-advisory agreement discussed above. Your Board
determined that these changes reflect the current environment in which
your Fund operates, and that INVESCO Global should have the flexibility
to operate in that environment.
After considering the above factors, your Board concluded that it is in the
best interests of your Fund and its shareholders to approve the proposed
sub-advisory agreement between AIM and INVESCO Global for your Fund.
Your Board reached this conclusion after careful discussion and analysis.
Your Board believes that it has carefully and thoroughly examined the pertinent
issues and alternatives. In recommending that you approve the proposed
sub-advisory agreement, the independent directors have taken the action which
they believe to be in your best interests. In so doing, they were advised by
independent counsel, retained by the independent directors and paid for by XXXX,
as to the nature of the matters to be considered and the standards to be used in
reaching their decision.
33
If approved, the proposed sub-advisory agreement will become effective on
November 5, 2003, and will expire, unless renewed, on or before June 30, 2005.
If shareholders of your Fund do not approve both Proposals 2 and 4, the current
advisory agreement with INVESCO and the current sub-advisory agreement between
INVESCO and INVESCO Global will continue in effect for your Fund and AIM and
INVESCO Global will not enter into the proposed sub-advisory agreement for your
Fund.
THE BOARD'S RECOMMENDATION ON PROPOSAL 4
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" this Proposal.
PROPOSAL 5 --
APPROVAL OF THE IIFI PLAN TO REDOMESTICATE
INVESCO INTERNATIONAL FUNDS, INC. AS A DELAWARE STATUTORY TRUST
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 5?
Proposal 5 applies only to the shareholders of INVESCO International Blue
Chip Value Fund.
BACKGROUND
INVESCO International Funds, Inc. ("IIFI"), a Maryland corporation,
currently is comprised of two series portfolios: INVESCO International Blue Chip
Value Fund and INVESCO European Fund. AMVESCAP has identified these two series
portfolios as appropriate to be redomesticated as new series portfolios of AIM
International Mutual Funds ("AIMF"), a newly created open-end management
investment company organized as a statutory trust under the Delaware Statutory
Trust Act.
The Board of Directors of AIM International Funds, Inc. ("AIFI"), an
open-end management investment company organized as a Maryland corporation,
currently is soliciting the proxies of the shareholders of AIFI's five existing
series portfolios to vote on the conversion of these five existing series
portfolios to five corresponding new series portfolios of AIMF (each, an "AIFI
Fund"). Currently, the sole shareholder of the AIFI Funds is AIFI and the sole
shareholder of the New Funds (as defined below) is IIFI.
XXXX's Board of Directors (the "IIFI Board") has approved the IIFI Plan,
which provides for a series of transactions to convert each of INVESCO
International Blue Chip Value Fund and INVESCO European Fund (each, a "Current
Fund") to a corresponding series (a "New Fund") of AIMF. Under the IIFI 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 "IIFI Redomestication"). A form of the IIFI Plan relating to the proposed
IIFI Redomestication is set forth in Appendix III. If Proposal 5 is not approved
by the IIFI shareholders, IIFI will continue to operate as a Maryland
corporation.
Approval of the IIFI Plan requires the affirmative vote of a majority of
the issued and outstanding shares of IIFI. The IIFI Board is soliciting the
proxies of the shareholders of INVESCO International Blue Chip Fund to vote on
the IIFI Plan with this Proxy Statement. The IIFI Board is soliciting the
proxies of the shareholders of INVESCO European Fund to vote on the IIFI Plan
with a separate proxy statement.
The IIFI Redomestication is being proposed primarily to provide IIFI with
greater flexibility in conducting its business operations. The operations of
each New Fund following the IIFI Redomestication will be substantially similar
to those of its predecessor Current Fund. As described below, AIMF's Declaration
of Trust (the "AIMF Declaration") differs from IIFI's Articles of Amendment and
Restatement of the Articles of Incorporation and the amendments and supplements
thereto (the "IIFI Articles of Incorporation") in certain respects that are
expected to improve IIFI's and each Current
34
Fund's operations. AIMF, like IIFI, will operate as an open-end management
investment company registered with the Securities and Exchange Commission (the
"SEC") under the 1940 Act.
REASONS FOR THE PROPOSED IIFI REDOMESTICATION
The IIFI Redomestication is being proposed because, as noted above, INVESCO
and the IIFI 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.
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. AIMF will be governed primarily by the terms of the AIMF
Declaration. In particular, AIMF 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 IIFI
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.
The IIFI Redomestication will also have certain other effects on IIFI, its
shareholders and management, which are described below under the heading "AIMF
Compared to IIFI."
WHAT THE PROPOSED IIFI REDOMESTICATION WILL INVOLVE
To accomplish the IIFI Redomestication, AIMF has been formed as a Delaware
statutory trust pursuant to the AIMF Declaration and each New Fund has been
established as a series of AIMF. 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 IIFI
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 IIFI Redomestication, each
Current Fund will be terminated and IIFI will be dissolved as a Maryland
corporation.
The obligations of IIFI and AIMF under the IIFI Plan are subject to various
conditions stated therein. To provide against unforeseen events, the IIFI Plan
may be terminated or amended at any time prior to the closing of the IIFI
Redomestication by action of the IIFI Board, notwithstanding the approval of the
IIFI 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. IIFI and AIMF may at any time waive compliance with any condition
contained in the IIFI Plan, provided that the waiver does not materially
adversely affect the interests of shareholders of any Current Fund.
35
The IIFI Plan authorizes IIFI to acquire one share of each class of each
New Fund and, as the sole shareholder of each New Fund prior to the IIFI
Redomestication, to do each of the following:
- Approve with respect to each New Fund a new investment advisory agreement
with AIM with an effective date of November 5, 2003 that will be
substantially identical to that described in Proposal 2 and a new
investment advisory agreement with INVESCO that is substantially
identical to the corresponding Current Fund's existing investment
advisory agreement with INVESCO for the interim period between the
consummation of the IIFI Redomestication and November 5, 2003.
Information on the new advisory agreement, including a description of the
differences between it and IIFI's current advisory agreement, is set
forth above under Proposal 2. If Proposal 2 is not approved by
shareholders of a Current Fund, IIFI will approve for the corresponding
New Fund an investment advisory agreement with INVESCO that is
substantially identical to such Current Fund's existing investment
advisory agreement with INVESCO.
- Approve with respect to the New Fund corresponding to INVESCO
International Blue Chip Value Fund a new sub-advisory agreement between
AIM and INVESCO Global with an effective date of November 5, 2003 that
will be substantially identical to that described in Proposal 4 and a new
sub-advisory agreement between INVESCO and INVESCO Global that is
substantially identical to the existing sub-advisory agreement between
INVESCO and INVESCO Global for INVESCO International Blue Chip Value Fund
for the interim period between the consummation of the IIFI
Redomestication and November 5, 2003. Information on the new sub-advisory
agreement is set forth above under Proposal 4. If Proposal 2 is not
approved by shareholders of INVESCO International Blue Chip Value Fund,
IIFI will not approve a sub-advisory agreement between AIM and INVESCO
Global for the corresponding New Fund.
- Assuming that Proposal 2 is approved by shareholders, approve with
respect to each New Fund a new administrative services agreement with AIM
with an effective date of November 5, 2003 that will be substantially
identical to the new administrative services agreement with AIM that will
be entered into by IIFI if shareholders approve Proposal 2 and a new
administrative services agreement with AIM that is substantially
identical to the corresponding Current Fund's existing administrative
services agreement with INVESCO for the interim period between the
consummation of the IIFI Redomestication and November 5, 2003. If
Proposal 2 is not approved by shareholders of a Current Fund, IIFI will
approve for the corresponding New Fund an administrative services
agreement with AIM that is substantially identical to such Current Fund's
existing administrative services agreement with INVESCO.
- 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 has been approved
by the IIFI Board for the corresponding Current Fund and which is
expected to become effective prior to the consummation of the IIFI
Redomestication.
- Together with XXXX, as sole shareholder of each AIFI Fund, elect the
directors of IIFI and XXXX as the trustees of AIMF to serve without limit
in time, except as they may resign or be removed by action of AIMF's
trustees or shareholders, and except as they retire in accordance with
AIMF's retirement policy for trustees. XXXX's retirement policy for
trustees will replace XXXX's retirement policy for directors.
36
- Ratify the selection of PricewaterhouseCoopers LLP, 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.
AIMF'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 XXXX'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 IIFI
Redomestication will represent shares of the corresponding New Fund after the
IIFI Redomestication. Shareholders of the New Funds will not have the right to
demand or require AIMF 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 IIFI Redomestication.
Assuming your approval of Proposal 5, XXXX currently contemplates that the
IIFI Redomestication will be consummated on October 31, 2003.
THE FEDERAL INCOME TAX CONSEQUENCES OF THE IIFI REDOMESTICATION
XXXX and AIMF will receive an opinion of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx,
LLP to the effect that the IIFI 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 income
tax purposes as a result of the IIFI Redomestication. Shareholders of the
Current Funds should consult their tax advisers regarding the effect, if any, of
the IIFI Redomestication in light of their individual circumstances and as to
state and local consequences, if any, of the IIFI 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 IIFI Redomestication.
AIMF COMPARED TO IIFI
STRUCTURE OF AIMF
AIMF 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. AIMF has established series portfolios corresponding to and having
identical designations as the series portfolios of IIFI. AIMF has also
established classes with respect to each New Fund corresponding to and having
identical designations as the classes of each corresponding Current Fund. AIMF's
fiscal year is the same as that of IIFI. Each New Fund will have the same
investment objectives, policies, and restrictions as its predecessor Current
Fund. AIMF will not have any operations prior to the IIFI Redomestication.
Initially, AIFI will be the sole shareholder of the AIFI Funds and IIFI will be
the sole shareholder of the New Funds.
As a Delaware statutory trust, AIMF's operations are governed by the AIMF
Declaration, AIMF's Bylaws and applicable Delaware law rather than by the IIFI
Articles of Incorporation, IIFI's Bylaws (the "IIFI Bylaws") and applicable
Maryland law. Certain differences between the two domiciles and organizational
forms are summarized below. The operations of AIMF will continue to be subject
to the provisions of the 1940 Act and the rules and regulations thereunder.
37
TRUSTEES OF AIMF
Subject to the provisions of the AIMF Declaration, the business of AIMF
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 AIMF are substantially the same as those of the
directors of IIFI.
The trustees of AIMF would be those persons elected at this Special Meeting
to serve as directors of IIFI. Information concerning the nominees for election
as directors of IIFI is set forth above under Proposal 1.
SHARES OF AIMF
The beneficial interests in the New Funds will be represented by
transferable shares, par value $0.001 per share. Shareholders do not have the
right to demand or require AIMF to issue share certificates. The trustees have
the power under the AIMF Declaration to establish new series and classes of
shares; XXXX's directors currently have a similar right. The AIMF Declaration
permits the trustees to issue an unlimited number of shares of each class and
series. IIFI is authorized to issue only the number of shares specified in the
IIFI Articles of Incorporation and may issue additional shares only with IIFI
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. AIMF
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 AIMF Declaration provides that shareholders of AIMF shall not
be subject to any personal liability for acts or obligations of AIMF and that
every written agreement, obligation or other undertaking made or issued by AIMF
shall contain a provision to the effect that shareholders are not personally
liable thereunder. In addition, the AIMF Declaration provides for
indemnification out of AIMF'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
AIMF 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 AIMF, the possibility of AIMF being unable to meet
its obligations is considered remote, and even if a claim were brought against
AIMF and a court determined that shareholders were personally liable, it would
likely not impose a material obligation on a shareholder.
ELECTION OF DIRECTORS/TRUSTEES; TERMS
The shareholders of IIFI have elected a majority of the directors of IIFI.
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 IIFI 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
38
IIFI Board to appoint directors to fill vacancies without shareholder approval
is subject to the provisions of the 1940 Act.
As set forth above, the IIFI Plan authorizes IIFI to acquire one share of
each class of each New Fund and, as the sole shareholder of AIMF prior to the
IIFI Redomestication, to elect the directors of IIFI as the trustees of AIMF.
Such trustees serve for the life of AIMF, 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 AIMF (the "AIMF Board"), a majority of
the trustees may appoint a successor to fill such vacancy. The right of the AIMF
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 IIFI may be removed by the affirmative vote of a majority of
the outstanding shares of IIFI.
A trustee of AIMF 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 AIMF.
MEETINGS OF SHAREHOLDERS
IIFI is not required to hold annual meetings of shareholders and does not
intend to do so unless required by the 1940 Act. The IIFI 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 IIFI 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
need 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.
AIMF is not required to hold annual meetings of shareholders unless
required by the 1940 Act and does not intend to do so. The AIMF 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 or more trustees upon written request of the holders of not less
than 10% of the outstanding shares of AIMF. 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 IIFI 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 AIMF
Declaration, the trustees and officers of AIMF 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
39
any and all claims and demands. The AIMF 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 AIMF, 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 IIFI may be dissolved by the vote of a majority
of the IIFI Board and two-thirds of the shares entitled to vote on the
dissolution; however the IIFI 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 AIMF Declaration, AIMF or any series or class of shares of
beneficial interest in AIMF may be terminated by: (1) a majority shareholder
vote of AIMF or the affected series or class, respectively; or (2) if there are
fewer than 100 shareholders of record of AIMF or of such terminating series or
class, the trustees pursuant to written notice to the shares of AIMF or the
affected series or class.
VOTING RIGHTS OF SHAREHOLDERS
Shareholders of a Maryland corporation such as IIFI 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 AIMF 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
AIMF 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 AIMF or one of its investment portfolios; (v)
merger or consolidation of AIMF or any of its investment portfolios, with
certain exceptions; (vi) approval of any amendments to shareholders' voting
rights under the AIMF 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 AIMF Declaration confer upon shareholders
rights of appraisal or dissenters' rights.
AMENDMENTS TO ORGANIZATION DOCUMENTS
XXXX has the right to amend, alter, change or repeal any provision
contained in the IIFI Articles of Incorporation in the manner prescribed by
statute, including any amendment that alters the contract rights, as expressly
set forth in the IIFI Articles of Incorporation, of any outstanding stock, and
all rights conferred on shareholders are granted subject to this reservation.
The IIFI Board may approve amendments to the IIFI Articles of Incorporation to
classify or reclassify unissued shares of a class of stock without shareholder
approval. Other amendments to the IIFI 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 IIFI Bylaws or adopt new bylaws at any time.
Consistent with Delaware law, the AIMF Board may, without shareholder
approval, amend the AIMF Declaration at any time, except to eliminate any voting
rights pertaining to the shares of AIMF, without
40
approval of the majority of the shares of AIMF. The trustees have the power to
alter, amend or repeal the AIMF Bylaws or adopt new bylaws at any time.
The foregoing discussion is only a summary of certain differences between
and among the IIFI Articles of Incorporation, the IIFI Bylaws and Maryland law,
and the AIMF Declaration, AIMF Bylaws and Delaware law. It is not a complete
list of the differences. Shareholders should refer to the provisions of the
governing documents of IIFI and AIMF and state law directly for a more thorough
comparison. Copies of the IIFI Articles of Incorporation and IIFI Bylaws, and of
the AIMF Declaration and AIMF Bylaws are available to shareholders without
charge upon written request to IIFI.
THE BOARD'S RECOMMENDATION ON PROPOSAL 5
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" this Proposal.
PROPOSAL 6 --
APPROVAL OF THE IMSFI PLAN TO REDOMESTICATE
INVESCO MANAGER SERIES FUNDS, INC. AS A DELAWARE STATUTORY TRUST
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 6?
Proposal 6 applies only to the shareholders of INVESCO Multi-Sector Fund.
BACKGROUND
INVESCO Manager Series Funds, Inc. ("IMSFI") currently is organized as a
Maryland corporation. AMVESCAP has identified the sole series portfolio of IMSFI
as appropriate to be redomesticated as a new series portfolio of
AIM Counselor
Series Trust ("ACST"), a newly created open-end management investment company
organized as a statutory trust under the Delaware Statutory Trust Act.
The Board of Directors of INVESCO Counselor Series Funds, Inc. ("ICSFI"),
an open-end management investment company organized as a Maryland corporation,
currently is soliciting the proxies of the shareholders of ICSFI's two existing
series portfolios to vote on the conversion of these two existing series
portfolios to two corresponding new series portfolios of ACST (each, an "ICSFI
Fund"). Currently, the sole shareholder of the ICSFI Funds is ICSFI and the sole
shareholder of the New Fund (as defined below) is IMSFI.
IMSFI's Board of Directors (the "IMSFI Board") has approved the IMSFI Plan,
which provides for a series of transactions to convert INVESCO Multi-Sector Fund
(the "Current Fund") to a corresponding series (the "New Fund") of ACST. Under
the IMSFI 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 Fund's liabilities
(collectively, the "IMSFI Redomestication"). A form of the IMSFI Plan relating
to the proposed IMSFI Redomestication is set forth in Appendix III. If Proposal
6 is not approved by the IMSFI shareholders, IMSFI will continue to operate as a
Maryland corporation.
Approval of the IMSFI Plan requires the affirmative vote of a majority of
the issued and outstanding shares of IMSFI.
The IMSFI Redomestication is being proposed primarily to provide IMSFI with
greater flexibility in conducting its business operations. The operations of the
New Fund following the IMSFI Redomestication will be substantially similar to
those of the Current Fund. As described below, ACST's Declaration of Trust (the
"ACST Declaration") differs from IMSFI's Articles of Incorporation (the "IMSFI
Articles of Incorporation") in certain respects that are expected to improve
IMSFI's and the Current Fund's operations. ACST, like IMSFI, will operate as an
open-end management investment company registered with the SEC under the 1940
Act.
41
REASONS FOR THE PROPOSED IMSFI REDOMESTICATION
The IMSFI Redomestication is being proposed because, as noted above,
INVESCO and the IMSFI 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.
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. ACST will be governed primarily by the terms of the ACST
Declaration. In particular, ACST 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 IMSFI
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.
The IMSFI Redomestication will also have certain other effects on IMSFI,
its shareholders and management, which are described below under the heading
"ACST Compared to IMSFI."
WHAT THE PROPOSED IMSFI REDOMESTICATION WILL INVOLVE
To accomplish the IMSFI Redomestication, ACST has been formed as a Delaware
statutory trust pursuant to the ACST Declaration and the New Fund has been
established as the sole series of ACST. 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
such Current Fund. Upon completion of the IMSFI 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 IMSFI Redomestication, the Current Fund will be terminated and IMSFI will
be dissolved as a Maryland corporation.
The obligations of IMSFI and ACST under the IMSFI Plan are subject to
various conditions stated therein. To provide against unforeseen events, the
IMSFI Plan may be terminated or amended at any time prior to the closing of the
IMSFI Redomestication by action of the IMSFI Board, notwithstanding the approval
of the IMSFI 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. IMSFI and ACST may at any time waive
compliance with any condition contained in the IMSFI Plan, provided that the
waiver does not materially adversely affect the interests of shareholders of the
Current Fund.
The IMSFI Plan authorizes IMSFI to acquire one share of each class of the
New Fund and, as the sole shareholder of the New Fund prior to the IMSFI
Redomestication, to do each of the following:
- Approve with respect to the New Fund a new investment advisory agreement
with AIM with an effective date of November 5, 2003 that will be
substantially identical to that described in Proposal
42
2 and a new investment advisory agreement with INVESCO that is
substantially identical to the Current Fund's existing investment
advisory agreement with INVESCO for the interim period between the
consummation of the IMSFI Redomestication and November 5, 2003.
Information on the new advisory agreement, including a description of the
differences between it and IMSFI's current advisory agreement, is set
forth above under Proposal 2. If Proposal 2 is not approved by
shareholders of the Current Fund, IMSFI will approve for the New Fund an
investment advisory agreement with INVESCO that is substantially
identical to the Current Fund's existing investment advisory agreement
with INVESCO.
- Approve with respect to the New Fund a new sub-advisory agreement between
AIM and INVESCO Institutional with an effective date of November 5, 2003
that will be substantially identical to that described in Proposal 3.
Information on the new sub-advisory agreement is set forth above under
Proposal 3. If Proposal 2 is not approved by shareholders of the Current
Fund, IMSFI will not approve a sub-advisory agreement between AIM and
INVESCO Institutional for the New Fund.
- Assuming that Proposal 2 is approved by shareholders, approve with
respect to the New Fund a new administrative services agreement with AIM
with an effective date of November 5, 2003 that will be substantially
identical to the new administrative services agreement with AIM that will
be entered into by IMSFI if shareholders approve Proposal 2 and a new
administrative services agreement with INVESCO that is substantially
identical to the Current Fund's existing administrative services
agreement with INVESCO for the interim period between the consummation of
the IMSFI Redomestication and November 5, 2003. If Proposal 2 is not
approved by shareholders of the Current Fund, IMSFI will approve for the
New Fund an administrative services agreement with AIM that is
substantially identical to the Current Fund's existing administrative
services agreement with INVESCO.
- Approve with respect to the New Fund a distribution agreement with AIM
Distributors. The proposed distribution agreement will provide for
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 has been approved by the IMSFI
Board for the Current Fund and which is expected to become effective
prior to the consummation of the IMSFI Redomestication.
- Together with XXXXX, as the sole shareholder of each ICSFI Fund, elect
the directors of IMSFI and ICSFI as the trustees of ACST to serve without
limit in time, except as they may resign or be removed by action of
ACST's trustees or shareholders, and except as they retire in accordance
with ACST's retirement policy for trustees. ACST's retirement policy for
trustees will replace XXXXX's retirement policy for directors.
- Ratify the selection of PricewaterhouseCoopers LLP, the accountants for
the Current Fund, 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.
ACST'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 XXXXX's transfer agent for each shareholder of the Current Fund. Shares
43
held in the Current Fund accounts will automatically be designated as shares of
the New Fund. Certificates for Current Fund shares issued before the IMSFI
Redomestication will represent shares of the New Fund after the IMSFI
Redomestication. Shareholders of the New Fund will not have the right to demand
or require ACST 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 IMSFI
Redomestication.
Assuming your approval of Proposal 6, IMSFI currently contemplates that the
IMSFI Redomestication will be consummated on October 31, 2003.
THE FEDERAL INCOME TAX CONSEQUENCES OF THE IMSFI REDOMESTICATION
IMSFI and ACST will receive an opinion of Xxxxxxx Xxxxx Xxxxxxx &
Xxxxxxxxx, LLP to the effect that the IMSFI 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 the
shareholders of the New Fund will recognize no gain or loss for Federal income
tax purposes as a result of the IMSFI Redomestication. Shareholders of the
Current Fund should consult their tax advisers regarding the effect, if any, of
the IMSFI Redomestication in light of their individual circumstances and as to
state and local consequences, if any, of the IMSFI 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 IMSFI Redomestication.
ACST COMPARED TO IMSFI
STRUCTURE OF ACST
ACST 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. ACST has established a series portfolio corresponding to and having
identical designations as INVESCO Multi-Sector Fund, the sole series portfolio
of IMSFI. ACST has also established classes with respect to the New Fund
corresponding to and having identical designations as the classes of the Current
Fund. ACST's fiscal year is the same as that of IMSFI. The New Fund will have
the same investment objectives, policies, and restrictions as the Current Fund.
ACST will not have any operations prior to the IMSFI Redomestication. Initially,
ICSFI will be the sole shareholder of the ICSFI Funds and IMSFI will be the sole
shareholder of the New Fund.
As a Delaware statutory trust, ACST's operations are governed by the ACST
Declaration, ACST's Bylaws and applicable Delaware law rather than by the IMSFI
Articles of Incorporation, IMSFI's Bylaws (the "IMSFI Bylaws") and applicable
Maryland law. Certain differences between the two domiciles and organizational
forms are summarized below. The operations of ACST will continue to be subject
to the provisions of the 1940 Act and the rules and regulations thereunder.
TRUSTEES OF ACST
Subject to the provisions of the ACST Declaration, the business of ACST
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 ACST are substantially the same as those of the
directors of IMSFI.
The trustees of ACST would be those persons elected at this Special Meeting
to serve as directors of IMSFI. Information concerning the nominees for election
as directors of IMSFI is set forth above under Proposal 1.
44
SHARES OF ACST
The beneficial interests in the New Fund will be represented by
transferable shares, par value $0.01 per share. Shareholders do not have the
right to demand or require ACST to issue share certificates. The trustees have
the power under the ACST Declaration to establish new series and classes of
shares; IMSFI's directors currently have a similar right. The ACST Declaration
permits the trustees to issue an unlimited number of shares of each class and
series. IMSFI is authorized to issue only the number of shares specified in the
IMSFI Articles of Incorporation and may issue additional shares only with IMSFI
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. ACST
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 ACST Declaration provides that shareholders of ACST shall not
be subject to any personal liability for acts or obligations of ACST and that
every written agreement, obligation or other undertaking made or issued by ACST
shall contain a provision to the effect that shareholders are not personally
liable thereunder. In addition, the ACST Declaration provides for
indemnification out of ACST'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
ACST 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 ACST, the possibility of ACST being unable to meet
its obligations is considered remote, and even if a claim were brought against
ACST and a court determined that shareholders were personally liable, it would
likely not impose a material obligation on a shareholder.
ELECTION OF DIRECTORS/TRUSTEES; TERMS
The shareholders of IMSFI have elected a majority of the directors of
IMSFI. 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 IMSFI 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 IMSFI Board to appoint
directors to fill vacancies without shareholder approval is subject to the
provisions of the 1940 Act.
As set forth above, the IMSFI Plan authorizes IMSFI to acquire one share of
each class of the New Fund and, as the sole shareholder of ACST prior to the
IMSFI Redomestication, to elect the directors of IMSFI as the trustees of ACST.
Such trustees serve for the life of ACST, 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 ACST (the "ACST Board"), a majority of
the trustees may appoint a successor to fill such vacancy. The right of the ACST
Board to appoint trustees to fill vacancies without shareholder approval is
subject to the provisions of the 1940 Act.
45
REMOVAL OF DIRECTORS/TRUSTEES
A director of IMSFI may be removed by the affirmative vote of a majority of
the outstanding shares of IMSFI.
A trustee of ACST 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 ACST.
MEETINGS OF SHAREHOLDERS
IMSFI is not required to hold annual meetings of shareholders and does not
intend to do so unless required by the 1940 Act. The IMSFI 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 IMSFI 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
need 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.
ACST is not required to hold annual meetings of shareholders unless
required by the 1940 Act and does not intend to do so. The ACST 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 or more trustees upon written request of the holders of not less
than 10% of the outstanding shares of ACST. 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 IMSFI 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 ACST
Declaration, the trustees and officers of ACST 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 ACST 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 ACST, 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 IMSFI may be dissolved by the vote of a majority
of the IMSFI Board and two-thirds of the shares entitled to vote on the
dissolution; however the IMSFI Articles of
46
Incorporation reduce the required shareholder vote from two-thirds to a majority
of the shares entitled to vote on the dissolution.
Pursuant to the ACST Declaration, ACST or any series or class of shares of
beneficial interest in ACST may be terminated by: (1) a majority shareholder
vote of ACST or the affected series or class, respectively; or (2) if there are
fewer than 100 shareholders of record of ACST or of such terminating series or
class, the trustees pursuant to written notice to the shares of ACST or the
affected series or class.
VOTING RIGHTS OF SHAREHOLDERS
Shareholders of a Maryland corporation such as IMSFI 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 ACST 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
ACST 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 ACST or one of its investment portfolios; (v)
merger or consolidation of ACST or any of its investment portfolios, with
certain exceptions; (vi) approval of any amendments to shareholders' voting
rights under the ACST 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 ACST Declaration confer upon shareholders
rights of appraisal or dissenters' rights.
AMENDMENTS TO ORGANIZATION DOCUMENTS
IMSFI has the right to amend, alter, change or repeal any provision
contained in the IMSFI Articles of Incorporation in the manner prescribed by
statute, including any amendment that alters the contract rights, as expressly
set forth in the IMSFI Articles of Incorporation, of any outstanding stock, and
all rights conferred on shareholders are granted subject to this reservation.
The IMSFI Board may approve amendments to the IMSFI Articles of Incorporation to
classify or reclassify unissued shares of a class of stock without shareholder
approval. Other amendments to the IMSFI 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 IMSFI Bylaws or adopt new bylaws at any time.
Consistent with Delaware law, the ACST Board may, without shareholder
approval, amend the ACST Declaration at any time, except to eliminate any voting
rights pertaining to the shares of ACST, without approval of the majority of the
shares of ACST. The trustees have the power to alter, amend or repeal the ACST
Bylaws or adopt new bylaws at any time.
The foregoing discussion is only a summary of certain differences between
and among the IMSFI Articles of Incorporation, the IMSFI Bylaws and Maryland
law, and the ACST Declaration, ACST Bylaws and Delaware law. It is not a
complete list of the differences. Shareholders should refer to the provisions of
the governing documents of IMSFI and ACST and state law directly for a more
thorough comparison. Copies of the IMSFI Articles of Incorporation and IMSFI
Bylaws, and of the ACST
47
Declaration and ACST Bylaws are available to shareholders without charge upon
written request to IMSFI.
THE BOARD'S RECOMMENDATION ON PROPOSAL 6
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" this Proposal.
PROPOSAL 7 --
APPROVAL OF THE IMMFI PLAN TO REDOMESTICATE
INVESCO MONEY MARKET FUNDS, INC. AS A DELAWARE STATUTORY TRUST
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 7?
Proposal 7 applies only to the shareholders of INVESCO U.S. Government
Money Fund.
BACKGROUND
INVESCO Money Market Funds, Inc. ("IMMFI") currently is organized as a
Maryland corporation. AMVESCAP has identified each series portfolio of IMMFI as
appropriate to be redomesticated as a new series portfolio of AIM Treasurer's
Series Trust ("ATST"), a newly created open-end management investment company
organized as a statutory trust under the Delaware Statutory Trust Act.
The Board of Directors of INVESCO Treasurer's Series Funds, Inc. ("ITSFI"),
an open-end management investment company organized as a Maryland corporation,
currently is soliciting the proxies of the shareholders of ITSFI's three
existing series portfolios to vote on the conversion of these three existing
series portfolios to three corresponding new series portfolios of ATST (each, an
"ITSFI Fund"). Currently, the sole shareholder of the ITSFI Funds is ITSFI and
the sole shareholder of the New Funds (as defined below) is IMMFI.
IMMFI's Board of Directors (the "IMMFI Board") has approved the IMMFI Plan,
which provides for a series of transactions to convert each of INVESCO U.S.
Government Money Fund, INVESCO Cash Reserves Fund and INVESCO Tax-Free Money
Fund (each, a "Current Fund") to a corresponding series (a "New Fund") of ATST.
Under the IMMFI 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 "IMMFI Redomestication"). A form of the
IMMFI Plan relating to the proposed IMMFI Redomestication is set forth in
Appendix III. If Proposal 7 is not approved by the IMMFI shareholders, IMMFI
will continue to operate as a Maryland corporation.
Approval of the IMMFI Plan requires the affirmative vote of a majority of
the issued and outstanding shares of IMMFI. The IMMFI Board is soliciting the
proxies of the shareholders of INVESCO U.S. Government Money Fund to vote on the
IMMFI Plan with this Proxy Statement. The IMMFI Board is soliciting the proxies
of the shareholders of INVESCO Cash Reserves Fund and INVESCO Tax-Free Money
Fund to vote on the IMMFI Plan with a separate proxy statement.
The IMMFI Redomestication is being proposed primarily to provide IMMFI with
greater flexibility in conducting its business operations. The operations of
each New Fund following the IMMFI Redomestication will be substantially similar
to those of its predecessor Current Fund. As described below, ATST's Declaration
of Trust (the "ATST Declaration") differs from IMMFI's Articles of Incorporation
and the amendments thereto (the "IMMFI Articles of Incorporation") in certain
respects that are expected to improve IMMFI's and each Current Fund's
operations. ATST, like IMMFI, will operate as an open-end management investment
company registered with the SEC under the 1940 Act.
48
REASONS FOR THE PROPOSED IMMFI REDOMESTICATION
The IMMFI Redomestication is being proposed because, as noted above,
INVESCO and the IMMFI 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.
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. ATST will be governed primarily by the terms of the ATST
Declaration. In particular, ATST 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 IMMFI
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.
The IMMFI Redomestication will also have certain other effects on IMMFI,
its shareholders and management, which are described below under the heading
"ATST Compared to IMMFI."
WHAT THE PROPOSED IMMFI REDOMESTICATION WILL INVOLVE
To accomplish the IMMFI Redomestication, ATST has been formed as a Delaware
statutory trust pursuant to the ATST Declaration and each New Fund has been
established as a series of ATST. 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 IMMFI
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 IMMFI Redomestication, each
Current Fund will be terminated and IMMFI will be dissolved as a Maryland
corporation.
The obligations of IMMFI and ATST under the IMMFI Plan are subject to
various conditions stated therein. To provide against unforeseen events, the
IMMFI Plan may be terminated or amended at any time prior to the closing of the
IMMFI Redomestication by action of the IMMFI Board, notwithstanding the approval
of the IMMFI 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. IMMFI and ATST may at any time waive
compliance with any condition contained in the IMMFI Plan, provided that the
waiver does not materially adversely affect the interests of shareholders of any
Current Fund.
The IMMFI Plan authorizes IMMFI to acquire one share of each class of each
New Fund and, as the sole shareholder of each New Fund prior to the IMMFI
Redomestication, to do each of the following:
- Approve with respect to each New Fund a new investment advisory agreement
with AIM with an effective date of November 5, 2003 that will be
substantially identical to that described in
49
Proposal 2 and a new investment advisory agreement with INVESCO that is
substantially identical to the corresponding Current Fund's existing
investment advisory agreement with INVESCO for the interim period between
the consummation of the IMMFI Redomestication and November 5, 2003.
Information on the new advisory agreement, including a description of the
differences between it and IMMFI's current advisory agreement, is set
forth above under Proposal 2. If Proposal 2 is not approved by
shareholders of a Current Fund, IMMFI will approve for the corresponding
New Fund an investment advisory agreement with INVESCO that is
substantially identical to such Current Fund's existing investment
advisory agreement with INVESCO.
- Assuming that Proposal 2 is approved by shareholders, approve with
respect to each New Fund a new administrative services agreement with AIM
with an effective date of November 5, 2003 that will be substantially
identical to the new administrative services agreement with AIM that will
be entered into by IMMFI if shareholders approve Proposal 2 and a new
administrative services agreement with INVESCO that is substantially
identical to the corresponding Current Fund's existing administrative
services agreement with INVESCO for the interim period between the
consummation of the IMMFI Redomestication and November 5, 2003. If
Proposal 2 is not approved by shareholders of a Current Fund, IMMFI will
approve for the corresponding New Fund an administrative services
agreement with AIM that is substantially identical to such Current Fund's
existing administrative services agreement with INVESCO.
- 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 has been approved
by the IMMFI Board for the corresponding Current Fund and which is
expected to become effective prior to the consummation of the IMMFI
Redomestication.
- Together with XXXXX, as the sole shareholder of each ITSFI Fund, elect
the directors of IMMFI and XXXXX as the trustees of ATST to serve without
limit in time, except as they may resign or be removed by action of
ATST's trustees or shareholders, and except as they retire in accordance
with XXXX's retirement policy for trustees. XXXX's retirement policy for
trustees will replace XXXXX's retirement policy for directors.
- Ratify the selection of PricewaterhouseCoopers LLP, 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 XXXXX'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 IMMFI
Redomestication will represent shares of the corresponding New Fund after the
IMMFI Redomestication. Shareholders of the New Funds will not have the right to
demand or require ATST 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 IMMFI Redomestication.
50
Assuming your approval of Proposal 7, IMMFI currently contemplates that the
IMMFI Redomestication will be consummated on November 4, 2003.
THE FEDERAL INCOME TAX CONSEQUENCES OF THE IMMFI REDOMESTICATION
IMMFI and XXXX will receive an opinion of Xxxxxxx Xxxxx Xxxxxxx &
Xxxxxxxxx, LLP to the effect that the IMMFI 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 income
tax purposes as a result of the IMMFI Redomestication. Shareholders of the
Current Funds should consult their tax advisers regarding the effect, if any, of
the IMMFI Redomestication in light of their individual circumstances and as to
state and local consequences, if any, of the IMMFI 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 IMMFI Redomestication.
ATST COMPARED TO IMMFI
STRUCTURE OF ATST
ATST 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. ATST has established series portfolios corresponding to and having
identical designations as the series portfolios of IMMFI. ATST has also
established classes with respect to each New Fund corresponding to and having
identical designations as the classes of each corresponding Current Fund. ATST's
fiscal year is the same as that of IMMFI. Each New Fund will have the same
investment objectives, policies, and restrictions as its predecessor Current
Fund. ATST will not have any operations prior to the IMMFI Redomestication.
Initially, ITSFI will be the sole shareholder of the ITSFI Funds and IMMFI will
be the sole shareholder of the New Funds.
As a Delaware statutory trust, ATST's operations are governed by the ATST
Declaration, ATST's Bylaws and applicable Delaware law rather than by the IMMFI
Articles of Incorporation, IMMFI's Bylaws (the "IMMFI Bylaws") and applicable
Maryland law. Certain differences between the two domiciles and organizational
forms are summarized below. The operations of ATST will continue to be subject
to the provisions of the 1940 Act and the rules and regulations thereunder.
TRUSTEES OF ATST
Subject to the provisions of the ATST Declaration, the business of ATST
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 ATST are substantially the same as those of the
directors of IMMFI.
The trustees of ATST would be those persons elected at this Special Meeting
to serve as directors of IMMFI. Information concerning the nominees for election
as directors of IMMFI is set forth above under Proposal 1.
SHARES OF ATST
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 ATST to issue share certificates. The trustees have
the power under the ATST Declaration to establish new series and classes of
shares; IMMFI's directors currently have a similar right. The ATST Declaration
permits the trustees to issue an unlimited number of shares of each class and
series. IMMFI is authorized to issue only the number of
51
shares specified in the IMMFI Articles of Incorporation and may issue additional
shares only with IMMFI 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. ATST
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 ATST Declaration provides that shareholders of ATST shall not
be subject to any personal liability for acts or obligations of ATST and that
every written agreement, obligation or other undertaking made or issued by ATST
shall contain a provision to the effect that shareholders are not personally
liable thereunder. In addition, the ATST Declaration provides for
indemnification out of ATST'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
ATST 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 ATST, the possibility of ATST being unable to meet
its obligations is considered remote, and even if a claim were brought against
ATST and a court determined that shareholders were personally liable, it would
likely not impose a material obligation on a shareholder.
ELECTION OF DIRECTORS/TRUSTEES; TERMS
The shareholders of IMMFI have elected a majority of the directors of
IMMFI. 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 IMMFI 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 IMMFI Board to appoint
directors to fill vacancies without shareholder approval is subject to the
provisions of the 1940 Act.
As set forth above, the IMMFI Plan authorizes IMMFI to acquire one share of
each class of each New Fund and, as the sole shareholder of ATST prior to the
IMMFI Redomestication, to elect the directors of IMMFI as the trustees of ATST.
Such trustees serve for the life of ATST, 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 ATST (the "ATST Board"), a majority of
the trustees may appoint a successor to fill such vacancy. The right of the ATST
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 IMMFI may be removed by the affirmative vote of a majority of
the outstanding shares of IMMFI.
A trustee of ATST 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 ATST.
52
MEETINGS OF SHAREHOLDERS
IMMFI is not required to hold annual meetings of shareholders and does not
intend to do so unless required by the 1940 Act. The IMMFI 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 IMMFI 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
need 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.
ATST is not required to hold annual meetings of shareholders unless
required by the 1940 Act and does not intend to do so. The ATST 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 or more trustees upon written request of the holders of not less
than 10% of the outstanding shares of ATST. 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 IMMFI 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 ATST
Declaration, the trustees and officers of ATST 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 ATST 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 ATST, 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 IMMFI may be dissolved by the vote of a majority
of the IMMFI Board and two-thirds of the shares entitled to vote on the
dissolution; however the IMMFI 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 ATST Declaration, ATST or any series or class of shares of
beneficial interest in ATST may be terminated by: (1) a majority shareholder
vote of ATST or the affected series or class, respectively; or (2) if there are
fewer than 100 shareholders of record of ATST or of such terminating series or
class, the trustees pursuant to written notice to the shares of ATST or the
affected series or class.
53
VOTING RIGHTS OF SHAREHOLDERS
Shareholders of a Maryland corporation such as IMMFI 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 ATST 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
ATST 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 ATST or one of its investment portfolios; (v)
merger or consolidation of ATST or any of its investment portfolios, with
certain exceptions; (vi) approval of any amendments to shareholders' voting
rights under the ATST 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 ATST Declaration confer upon shareholders
rights of appraisal or dissenters' rights.
AMENDMENTS TO ORGANIZATION DOCUMENTS
IMMFI has the right to amend, alter, change or repeal any provision
contained in the IMMFI Articles of Incorporation in the manner prescribed by
statute, including any amendment that alters the contract rights, as expressly
set forth in the IMMFI Articles of Incorporation, of any outstanding stock, and
all rights conferred on shareholders are granted subject to this reservation.
The IMMFI Board may approve amendments to the IMMFI Articles of Incorporation to
classify or reclassify unissued shares of a class of stock without shareholder
approval. Other amendments to the IMMFI 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 IMMFI Bylaws or adopt new bylaws at any time.
Consistent with Delaware law, the ATST Board may, without shareholder
approval, amend the ATST Declaration at any time, except to eliminate any voting
rights pertaining to the shares of ATST, without approval of the majority of the
shares of ATST. The trustees have the power to alter, amend or repeal the ATST
Bylaws or adopt new bylaws at any time.
The foregoing discussion is only a summary of certain differences between
and among the IMMFI Articles of Incorporation, the IMMFI Bylaws and Maryland
law, and the ATST Declaration, ATST Bylaws and Delaware law. It is not a
complete list of the differences. Shareholders should refer to the provisions of
the governing documents of IMMFI and ATST and state law directly for a more
thorough comparison. Copies of the IMMFI Articles of Incorporation and IMMFI
Bylaws, and of the ATST Declaration and ATST Bylaws are available to
shareholders without charge upon written request to IMMFI.
THE BOARD'S RECOMMENDATION ON PROPOSAL 7
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" this Proposal.
54
INDEPENDENT PUBLIC ACCOUNTANTS
Effective August 13, 2002, the fiscal year end of INVESCO Money Market
Funds, Inc. was changed from May 31 to August 31. The audit committees of the
Boards of INVESCO International Funds, Inc. and INVESCO Manager Series Funds,
Inc. have appointed PricewaterhouseCoopers LLP ("PwC") as each such Company's
independent public accountants for the fiscal years ending October 31, 2003 and
August 31, 2003, respectively. The audit committee of the Board of INVESCO Money
Market Funds, Inc. has appointed PwC as such Company's independent public
accountants for the fiscal years ending August 31, 2003 and August 31, 2004.
Representatives of PwC 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 Boards of the Companies have considered whether
the provision of the services below is compatible with maintaining the
independence of PwC.
FEES PAID TO PWC RELATED TO INVESCO MONEY MARKET FUNDS, INC. (FOR 2003 FISCAL
YEAR)
PwC billed INVESCO Money Market Funds, Inc. aggregate fees for professional
services rendered for the 2003 fiscal year as follows:
FINANCIAL
INFORMATION SYSTEMS
DESIGN AND
IMPLEMENTATION
COMPANY AND FISCAL YEAR END AUDIT FEES FEES ALL OTHER FEES* TOTAL FEES
--------------------------- ---------- ------------------- --------------- ----------
INVESCO Money Market Funds, Inc.
(5/31/03)...................... $54,200 $0 $9,265 $63,465
---------------
* All Other Fees includes fees billed for all other non-audit services,
including fees for tax-related services rendered to INVESCO Money Market
Funds, Inc.
FEES PAID TO PWC NOT RELATED TO INVESCO MONEY MARKET FUNDS, INC. (FOR 2003
FISCAL YEAR)
PwC billed INVESCO aggregate fees for professional services rendered for
the 2003 fiscal year to INVESCO, or any affiliate that provided services to
INVESCO Money Market Funds, Inc., as follows:
Financial Information Systems Design and Implementation
Fees...................................................... $ 0
All Other Fees**............................................ $31,500
-------
Total Fees.................................................. $31,500
---------------
** As required by SEC rules, All Other Fees includes amounts paid to PWC by the
Funds' advisor and other related entities that provide support for the
operations of INVESCO Money Market Funds, Inc. All Other Fees include
services relating to tax services, controls review on the transfer agency,
research on accounting consultations, a CRM project and other agreed-upon
procedures. The services performed for the Funds' advisor and related
entities benefit many legal entities of INVESCO, including many sister funds
within the investment company complex.
55
FEES PAID TO PWC RELATED TO INVESCO INTERNATIONAL FUNDS, INC. AND INVESCO
MANAGER SERIES FUNDS, INC. (FOR 2002 FISCAL YEARS)
No information is provided for INVESCO Manager Series Funds, Inc. because
it has not yet completed its first fiscal year. PwC billed INVESCO International
Funds, Inc. aggregate fees for professional services rendered for the 2002
fiscal year as follows:
FINANCIAL
INFORMATION SYSTEMS
DESIGN AND
IMPLEMENTATION
COMPANY AND FISCAL YEAR END AUDIT FEES FEES ALL OTHER FEES* TOTAL FEES
--------------------------- ---------- ------------------- --------------- ----------
INVESCO International Funds, Inc.
(10/31/02)..................... $61,800 $0 $8,388 $70,188
---------------
* All Other Fees includes fees billed for all other non-audit services,
including fees for tax-related services rendered to the applicable Company.
FEES PAID TO PWC NOT RELATED TO INVESCO INTERNATIONAL FUNDS, INC. AND INVESCO
MANAGER SERIES FUNDS, INC. (FOR 2002 FISCAL YEARS)
No information is provided for INVESCO Manager Series Funds, Inc. because
it has not yet completed its first fiscal year. PwC billed INVESCO aggregate
fees for professional services rendered for the 2002 fiscal year to INVESCO, or
any affiliate that provided services to INVESCO International Funds, Inc. as
follows:
FINANCIAL
INFORMATION SYSTEMS
DESIGN AND
IMPLEMENTATION
COMPANY AND FISCAL YEAR END FEES ALL OTHER FEES* TOTAL FEES
--------------------------- ------------------- --------------- ----------
INVESCO International Funds, Inc.
(10/31/02)............................... $0 $37,500 $37,500
---------------
* As required by SEC rules, All Other Fees includes amounts paid to PwC by the
Funds' advisor and other related entities that provide support for the
operations of INVESCO International Funds, Inc. All Other Fees include
services relating to tax services, controls review on the transfer agency,
research on accounting consultations, a CRM project and other agreed-upon
procedures. The services performed for the Funds' advisor and related entities
benefit many legal entities of INVESCO, including many sister funds within the
investment company complex.
56
EXHIBIT A
SHARES OF INVESCO INTERNATIONAL FUNDS, INC.
OUTSTANDING ON JULY 25, 2003
NUMBER OF SHARES OUTSTANDING
NAME OF FUND (CLASS) ON JULY 25, 2003
-------------------- ----------------------------
INVESCO INTERNATIONAL BLUE CHIP VALUE FUND
Class A..................................................... 343,733.88
Class B..................................................... 50,775.11
Class C..................................................... 341,287.90
Investor Class.............................................. 5,086,270.64
INVESCO EUROPEAN FUND
Class A..................................................... 619,227.05
Class B..................................................... 9,526.87
Class C..................................................... 138,626.09
Class K..................................................... 48,846.84
Investor Class.............................................. 20,255,066.78
SHARES OF INVESCO MANAGER SERIES FUNDS, INC.
OUTSTANDING ON JULY 25, 2003
NUMBER OF SHARES OUTSTANDING
NAME OF FUND (CLASS) ON JULY 25, 2003
-------------------- ----------------------------
INVESCO MULTI-SECTOR FUND
Class A..................................................... 1,314,195.58
Class B..................................................... 433,235.61
Class C..................................................... 528,992.00
SHARES OF INVESCO MONEY MARKET FUNDS, INC.
OUTSTANDING ON JULY 25, 2003
NUMBER OF SHARES OUTSTANDING
NAME OF FUND (CLASS) ON JULY 25, 2003
-------------------- ----------------------------
INVESCO U.S. GOVERNMENT MONEY FUND
Investor Class.............................................. 64,930,519.14
INVESCO CASH RESERVES FUND
Class A..................................................... 7,646,965.33
Class B..................................................... 587,638.32
Class C..................................................... 14,489,104.93
Investor Class.............................................. 544,983,137.48
INVESCO TAX-FREE MONEY FUND
Investor Class.............................................. 25,707,202.13
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 INVESCO during the
year ended December 31, 2002.
AGGREGATE COMPENSATION FROM RETIREMENT BENEFITS ACCRUED BY
COMPANY(4) COMPANY(2)
-------------------------------------------- --------------------------------------------
INVESCO INVESCO INVESCO INVESCO
INVESCO MANAGER MONEY INVESCO MANAGER MONEY
INTERNATIONAL SERIES MARKET INTERNATIONAL SERIES MARKET
NAME OF DIRECTOR FUNDS, INC. FUNDS, INC.(3) FUNDS, INC. FUNDS, INC. FUNDS, INC.(3) FUNDS, INC.
---------------- ------------- -------------- ----------- ------------- -------------- -----------
Xxx X. Xxxxx................... $3,148 N/A $8,862 $278 N/A 0
Xxxxx X. Xxxxx................. 2,962 N/A 7,895 0 N/A 0
Xxxxxx X. Xxxxx................ 2,938 N/A 7,654 0 N/A 0
Xxxxx Xxxx, Ph.D............... 3,024 N/A 7,974 0 N/A 0
ESTIMATED ANNUAL TOTAL COMPENSATION
BENEFITS UPON FROM ALL INVESCO
NAME OF DIRECTOR RETIREMENT(4) FUNDS(5)
---------------- ---------------- ------------------
Xxx X. Xxxxx................... $34,000 $138,000
Xxxxx X. Xxxxx................. 34,000 124,625
Xxxxxx X. Xxxxx................ 34,000 116,500
Xxxxx Xxxx, Ph.D............... 34,000 126,000
---------------
(1) The vice chairman of the Board, the chairs of certain of your Fund's
committees who are independent directors, and the members of your Fund's
committees who are independent directors each receive compensation for
serving in such capacities in addition to the compensation paid to all
independent directors. For INVESCO International Funds, Inc., amounts shown
are based on the fiscal year ended October 31, 2002. For INVESCO Money
Market Funds, Inc., amounts shown are based on the fiscal year ended May 31,
2003. No amounts are shown for INVESCO Manager Series Funds, Inc. because
such Company has not yet completed a full fiscal year.
(2) Represents estimated benefits accrued with respect to the current Retirement
Plan and Deferred Retirement Plan Account Agreement, and not compensation
deferred at the election of the directors. For INVESCO International Funds,
Inc., amounts shown are based on the fiscal year ended October 31, 2002. For
INVESCO Money Market Funds, Inc., amounts shown are based on the fiscal year
ended May 31, 2003.
(3) No amounts are shown for INVESCO Manager Series Funds, Inc. because such
Company has not yet completed a full fiscal year.
(4) These amounts represent the estimated annual benefits payable by the ten
INVESCO Funds upon the directors' retirement under the current Retirement
Plan and Deferred Retirement Plan Account Agreement, calculated using the
current method of allocating director compensation among the INVESCO Funds.
These estimated benefits assume retirement at age 72. With the exception of
Messrs. Xxxxx and Xxxxx, each of these directors has served as a director of
one or more of the INVESCO Funds for the minimum five-year period required
to be eligible to participate in the current Retirement Plan.
(5) All continuing directors currently serve as directors of ten registered
investment companies advised by INVESCO.
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 all officers of each Company is 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000.
NAME, YEAR OF BIRTH AND OFFICER
POSITION(S) HELD WITH COMPANY SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
----------------------------- ------- -------------------------------------------
Xxxx X. Xxxxxxxxxx -- 1951................... 1998 Director, President and Chief Executive
Chairman of the Board Officer, 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.
Xxxxxxx X. Xxxxxxxxxx -- 1951................ 2001 President (2001-present) and Chief Executive
President and Chief Executive Officer Officer (2003-present) of INVESCO Funds
Group, Inc.; Chairman of the Board
(2003-present) and President (2003-present)
of INVESCO Distributors, Inc.; Senior Vice
President and Chief Operating Officer, A I M
Management Group Inc.; Senior Vice President,
A I M Advisors, Inc. and A I M Distributors,
Inc.; formerly, Chief Operating Officer
(2001-2003) and Senior Vice President
(1999-2002) of INVESCO Funds Group, Inc. and
INVESCO Distributors, Inc.; and Senior Vice
President of GT Global -- North America
(1992-1998).
Xxxx X. Xxxxx -- 1947........................ 1989 Senior Vice President, General Counsel and
Secretary Secretary of INVESCO Funds Group, Inc.;
Senior Vice President, Secretary and General
Counsel of INVESCO Distributors, Inc.;
formerly, Secretary of INVESCO Global Health
Sciences Fund; General Counsel of INVESCO
Trust Company (1989-1998); and employee of
the Securities and Exchange Commission,
Washington, DC (1973-1989).
C-1
NAME, YEAR OF BIRTH AND OFFICER
POSITION(S) HELD WITH COMPANY SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
----------------------------- ------- -------------------------------------------
Xxxxxx X. Xxxxxx -- 1946..................... 1988 Senior Vice President and Treasurer of
Chief Accounting Officer, INVESCO Funds Group, Inc.; and Senior Vice
Chief Financial Officer and Treasurer President and Treasurer of INVESCO
Distributors, Inc.; formerly, Treasurer and
Principal Financial and Accounting Officer of
INVESCO Global Health Sciences Fund; and
Senior Vice President and Treasurer of
INVESCO Trust Company (1988-1998).
Xxxxxxx X. Xxxxxx, Xx. -- 1956............... 1992 Senior Vice President and Assistant Secretary
Assistant Secretary INVESCO Funds Group, Inc.; and Senior Vice
President and Assistant Secretary of INVESCO
Distributors, Inc.; formerly, Trust Officer
of INVESCO Trust Company (1995-1998).
Xxxxxx X. Xxxx -- 1960....................... 1999 Vice President and Assistant Treasurer of
Assistant Treasurer INVESCO Funds Group, Inc.; and Assistant
Treasurer of INVESCO Distributors, Inc.;
formerly, Assistant Vice President
(1996-1997).
Xxxx X. Xxxxx -- 1965........................ 2002 Vice President and Assistant General Counsel
Assistant Secretary of INVESCO Funds Group, Inc.
C-2
EXHIBIT D
SECURITY OWNERSHIP OF MANAGEMENT
To the best knowledge of the Companies, the following table sets forth
certain information regarding the ownership as of July 25, 2003 of shares of
common stock of each class of each of the Funds by the directors, nominees and
current executive officers of the Companies. No information is given as to a
series portfolio or class if a director, nominee or current executive officer
held no shares of any or all classes of such series portfolio as of July 25,
2003.
INVESCO INTERNATIONAL FUNDS, INC.
SHARES OF THE
FUNDS OWNED
BENEFICIALLY AS PERCENT OF
NAME OF DIRECTOR/NOMINEE/OFFICER FUND (CLASS) OF JULY 25, 2003 CLASS
-------------------------------- ------------ ---------------- ----------
Xxx X. Xxxxx.................. INVESCO International Blue Chip Value Fund 41.213 *
(Investor Class)
INVESCO European Fund 28.658 *
(Investor Class)
Xxxxxx Xxxxxx................. INVESCO International Blue Chip Value Fund 14.620 *
(Investor Class)
INVESCO European Fund 15.468 *
(Investor Class)
Xxxxxx X. Xxxxxxx............. INVESCO International Blue Chip Value Fund 41.213 *
(Investor Class)
INVESCO European Fund 28.658 *
(Investor Class)
Xxxxxxxx X. Xxxxxx............ INVESCO International Blue Chip Value Fund 41.213 *
(Investor Class)
INVESCO European Fund 28.658 *
(Investor Class)
Xxxxx X. Xxxxx................ INVESCO International Blue Chip Value Fund 14.808 *
(Investor Class)
INVESCO European Fund 8.692 *
(Investor Class)
Xxxxxx X. Xxxxx............... INVESCO International Blue Chip Value Fund 14.808 *
(Investor Class)
INVESCO European Fund 459.408 *
(Investor Class)
Xxxx X. XxXxxxxx.............. INVESCO International Blue Chip Value Fund 41.213 *
(Investor Class)
INVESCO European Fund 183.071 *
(Investor Class)
Xxxxx Xxxx, Ph.D. ............ INVESCO International Blue Chip Value Fund 41.213 *
(Investor Class)
INVESCO European Fund 724.904 *
(Investor Class)
Xxxx X. Xxxxxxxxxx............ INVESCO European Fund 129.282 *
(Investor Class)
D-1
SHARES OF THE
FUNDS OWNED
BENEFICIALLY AS PERCENT OF
NAME OF DIRECTOR/NOMINEE/OFFICER FUND (CLASS) OF JULY 25, 2003 CLASS
-------------------------------- ------------ ---------------- ----------
Xxxx X. Xxxxx................. INVESCO European Fund 114.548 *
(Investor Class)
All Directors, Nominees, and
current Executive Officers as a
Group......................... INVESCO International Blue Chip Value Fund 250.301 *
(Investor Class)
INVESCO European Fund 1,721.347 *
(Investor Class)
---------------
* Less than 1% of the outstanding shares of the class.
INVESCO MANAGER SERIES FUNDS, INC.
SHARES OF THE
FUNDS OWNED
BENEFICIALLY AS PERCENT OF
NAME OF DIRECTOR/NOMINEE/OFFICER FUND (CLASS) OF JULY 25, 2003 CLASS
-------------------------------- ------------ ---------------- ----------
Xxx X. Xxxxx.............................. INVESCO Multi-Sector Fund 7.003 *
(Class A)
Xxxxxx Xxxxxx............................. INVESCO Multi-Sector Fund 6.649 *
(Class A)
Xxxxxx X. Xxxxxxx......................... INVESCO Multi-Sector Fund 7.003 *
(Class A)
Xxxxxxxx X. Xxxxxx........................ INVESCO Multi-Sector Fund 7.003 *
(Class A)
Xxxxx X. Xxxxx............................ INVESCO Multi-Sector Fund 7.003 *
(Class A)
Xxxxxx X. Xxxxx........................... INVESCO Multi-Sector Fund 7.003 *
(Class A)
Xxxx X. XxXxxxxx.......................... INVESCO Multi-Sector Fund 7.003 *
(Class A)
Xxxxx Xxxx, Ph.D. ........................ INVESCO Multi-Sector Fund 7.003 *
(Class A)
All Directors, Nominees, and current
Executive Officers as a Group............. INVESCO Multi-Sector Fund 55.67 *
(Class A)
---------------
* Less than 1% of the outstanding shares of the class.
D-2
INVESCO MONEY MARKET FUNDS, INC.
SHARES OF THE
FUNDS OWNED
BENEFICIALLY AS PERCENT OF
NAME OF DIRECTOR/NOMINEE/OFFICER FUND (CLASS) OF JULY 25, 2003 CLASS
-------------------------------- ------------ ---------------- ----------
Xxx X. Xxxxx.................... INVESCO Cash Reserves Fund 226.67 *
(Investor Class)
INVESCO Tax-Free Money Fund 109.99 *
(Investor Class)
INVESCO U.S. Government Money Fund 114.45 *
(Investor Class)
Xxxxxx Xxxxxx................... INVESCO Cash Reserves Fund 575.26 *
(Investor Class)
INVESCO Tax-Free Money Fund 100.02 *
(Investor Class)
INVESCO U.S. Government Money Fund 100.02 *
(Investor Class)
Xxxxxx X. Xxxxxxx............... INVESCO Cash Reserves Fund 212.39 *
(Investor Class)
INVESCO Tax-Free Money Fund 109.99 *
(Investor Class)
INVESCO U.S. Government Money Fund 114.45 *
(Investor Class)
Xxxxxxxx X. Xxxxxx.............. INVESCO Cash Reserves Fund 2,404.29 *
(Investor Class)
INVESCO Tax-Free Money Fund 109.99 *
(Investor Class)
INVESCO U.S. Government Money Fund 114.45 *
(Investor Class)
Xxxxx X. Xxxxx.................. INVESCO Cash Reserves Fund 20,510.45 *
(Investor Class)
INVESCO Tax-Free Money Fund 105.68 *
(Investor Class)
INVESCO U.S. Government Money Fund 108.85 *
(Investor Class)
Xxxxxxx X. Xxxxx................ INVESCO Tax-Free Money Fund 31,647.66 *
(Investor Class)
Xxxxxx X. Xxxxx................. INVESCO Cash Reserves Fund 253.94 *
(Investor Class)
INVESCO Tax-Free Money Fund 105.68 *
(Investor Class)
INVESCO U.S. Government Money Fund 108.85 *
(Investor Class)
Xxxx X. XxXxxxxx................ INVESCO Cash Reserves Fund 201.42 *
(Investor Class)
INVESCO Tax-Free Money Fund 109.99 *
(Investor Class)
INVESCO U.S. Government Money Fund 114.45 *
(Investor Class)
Xxxxx Xxxx, Ph.D. .............. INVESCO Cash Reserves Fund 201.42 *
(Investor Class)
INVESCO Tax-Free Money Fund 109.99 *
(Investor Class)
INVESCO U.S. Government Money Fund 114.45 *
(Investor Class)
D-3
SHARES OF THE
FUNDS OWNED
BENEFICIALLY AS PERCENT OF
NAME OF DIRECTOR/NOMINEE/OFFICER FUND (CLASS) OF JULY 25, 2003 CLASS
-------------------------------- ------------ ---------------- ----------
Xxxx X. Xxxxxxxxxx.............. INVESCO Cash Reserves Fund 250.86 *
(Investor Class)
Xxxx X. Xxxxx................... INVESCO Cash Reserves Fund 2,628.78 *
(Investor Class)
Xxxxxx X. Xxxxxx................ INVESCO Tax-Free Money Fund 417,275.31 1.62%
(Investor Class)
Xxxxxxx X. Xxxxxx, Xx. ......... INVESCO Cash Reserves Fund 54,447.66 *
(Investor Class)
INVESCO Tax-Free Money Fund 90,763.94 *
(Investor Class)
Xxxxxx X. Xxxx.................. INVESCO Cash Reserves Fund 1,849.40 *
(Investor Class)
All Directors, Nominees, and
current Executive Officers as a
Group........................... INVESCO Cash Reserves Fund 83,763.22 *
(Investor Class)
INVESCO Tax-Free Money Fund 540,548.24 2.10%
(Investor Class)
INVESCO U.S. Government Money Fund 889.97 *
(Investor Class)
---------------
* Less than 1% of the outstanding shares of the class.
D-4
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 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.
INVESCO INTERNATIONAL FUNDS, INC.
NUMBER OF SHARES PERCENT OF CLASS
NAME AND ADDRESS OF RECORD OWNER FUND (CLASS) OWNED OF RECORD OWNED OF RECORD*
-------------------------------- ------------ ---------------- ----------------
INVESCO INTERNATIONAL BLUE CHIP VALUE FUND
Xxxxxxx Xxxxxx & Co. Inc. .................... Investor Class 815,995.62 16.04%
Special Custody Acct. for the
Exclusive Benefit of Customers
Attn: Mutual Funds
000 Xxxxxxxxxx Xx.
Xxx Xxxxxxxxx, XX 00000-0000
Xxxx & Co. ................................... Investor Class 639,372.76 12.57%
Attn: Mutual Fund Area T-8
P.O. Box 2479
San Antonio, TX 78298-2479
Xxxxxxx Xxxxxx & Co. Inc. .................... Class A 114,832.99 33.41%
Special Custody Acct. for the
Exclusive Benefit of Customers
Attn: Mutual Funds
000 Xxxxxxxxxx Xx.
Xxx Xxxxxxxxx, XX 00000-0000
Xxxxxxx Xxxxx................................. Class A 60,453.70 17.59%
0000 Xxxx Xxxx Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000-0000
Bear Xxxxxxx Securities Corp. ................ Class A 32,499.58 9.45%
1 Metrotech Center North
Brooklyn, NY 11201-3870
Pershing LLC.................................. Class A 28,822.06 8.38%
P.O. Box 2052
Jersey City, NJ 07303-2052
Wexford Clearing Services Corp FBO............ Class A 23,932.65 6.96%
Caffyn Family LTD A
Custom House
00 Xxxx Xxxx
Xxxxxx 0 Xxxxxxx
Xxxxxxxxx & Company Inc. ..................... Class A 21,543.04 6.27%
Harborside Financial Center
000 Xxxxx 0
Xxxxxx Xxxx, XX 00000
Xxxxxxx Xxxxx................................. Class B 7,737.61 15.24%
0000 Xxxx Xxxx Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000-0000
E-1
NUMBER OF SHARES PERCENT OF CLASS
NAME AND ADDRESS OF RECORD OWNER FUND (CLASS) OWNED OF RECORD OWNED OF RECORD*
-------------------------------- ------------ ---------------- ----------------
American Enterprise Investment Svcs........... Class B 5,625.24 11.08%
FBO 213757461
P.O. Box 9446
Minneapolis, MN 55440-9446
UBS Financial Services Inc. .................. Class B 4,267.43 8.40%
Xxxx X. Xxxxx &
Xxx X. Xxxxx JTWROS
0 Xxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000-0000
American Enterprise Investment Svcs........... Class B 3,212.64 6.33%
FBO 215222551
P.O. Box 9446
Minneapolis, MN 55440-9446
American Enterprise Investment Svcs........... Class B 2,886.84 5.69%
FBO 580183591
P.O. Box 9446
Minneapolis, MN 55440-9446
LPL Financial Services........................ Class B 2,805.39 5.53%
0000 Xxxxx Xxxxxx Xx.
Xxx Xxxxx, XX 00000-1968
Xxxxxxx Xxxxx................................. Class C 97,230.26 28.49%
0000 Xxxx Xxxx Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000-0000
X. Xxxxxx Xxxx TR............................. Class C 44,006.60 12.89%
X. Xxxxxx Xxxx Revocable Trust
06/23/99
0000 X. Xxxxxxxxx Xxx.
Muncie, IN 47304-3762
San Xxxxxx Partnership........................ Class C 28,774.64 8.43%
0000 X. Xxxxxxxxx Xxx.
Muncie, IN 47304-3762
---------------
* The Companies have no knowledge of whether all or any portion of the shares
owned of record are also owned beneficially.
INVESCO MANAGER SERIES FUNDS, INC.
NUMBER OF SHARES PERCENT OF CLASS
NAME AND ADDRESS OF RECORD OWNER FUND (CLASS) OWNED OF RECORD OWNED OF RECORD*
-------------------------------- ------------ ---------------- ----------------
INVESCO MULTI-SECTOR FUND
Xxxxxxx Xxxxxx & Co. Inc. .................... Class A 485,654.00 36.95%
Special Custody Acct. for the
Exclusive Benefit of Customers
Attn: Mutual Funds
000 Xxxxxxxxxx Xx.
Xxx Xxxxxxxxx, XX 00000-0000
Xxxxxxx Xxxxx................................. Class A 100,990.57 7.68%
0000 Xxxx Xxxx Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000-0000
Invesco Funds Group Inc. ..................... Class B 55,533.33 12.82%
Attn: Xxxxxx Xxxxxxxx
P.O. Box 173706
Denver, CO 80217-3706
E-2
NUMBER OF SHARES PERCENT OF CLASS
NAME AND ADDRESS OF RECORD OWNER FUND (CLASS) OWNED OF RECORD OWNED OF RECORD*
-------------------------------- ------------ ---------------- ----------------
Xxxxxxx Xxxxx................................. Class B 37,696.53 8.70%
0000 Xxxx Xxxx Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000-0000
Invesco Funds Group Inc. ..................... Class C 55,533.33 10.50%
Attn: Xxxxxx Xxxxxxxx
P.O. Box 173706
Denver, CO 80217-3706
Xxxxxxx Xxxxx................................. Class C 48,564.86 9.18%
0000 Xxxx Xxxx Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000-0000
---------------
* The Companies have no knowledge of whether all or any portion of the shares
owned of record are also owned beneficially.
E-3
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 INVESCO Funds complex.
DOLLAR RANGE OF EQUITY
SECURITIES PER FUND
INTERESTED DIRECTOR
XXXX X. XXXXXXXXXX
----------------------
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO International Blue Chip Value Fund................ None
INVESCO MANAGER SERIES FUNDS, INC.
INVESCO Multi-Sector Fund................................. None
INVESCO MONEY MARKET FUNDS, INC.
INVESCO U.S. Government Money Fund........................ None
Aggregate Dollar Range of Equity Securities in All
Registered Investment Companies Overseen By Director in
the INVESCO Funds Complex................................. Over $100,000
DOLLAR RANGE OF EQUITY
SECURITIES PER FUND
INTERESTED NOMINEE
XXXXXX X. XXXXXX
----------------------
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO International Blue Chip Value Fund................ None
INVESCO MANAGER SERIES FUNDS, INC.
INVESCO Multi-Sector Fund................................. None
INVESCO MONEY MARKET FUNDS, INC.
INVESCO U.S. Government Money Fund........................ None
Aggregate Dollar Range of Equity Securities in All
Registered Investment Companies Overseen By Director in
the INVESCO Funds Complex................................. None
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
INDEPENDENT DIRECTORS
--------------------------------------------------------------------------
XXX X. XXXXX XXXXX X. XXXXX XXXXXX X. XXXXX XXXXX XXXX, PH.D.
---------------- ---------------- ---------------- -----------------
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO International Blue Chip
Value Fund....................... $1-$10,000 $1-$100,000 $1-$100,000 $1-100,000
INVESCO MANAGER SERIES FUNDS, INC.
INVESCO Multi-Sector Fund.......... $1-$10,000 $1-$100,000 $1-$100,000 $1-100,000
INVESCO MONEY MARKET FUNDS, INC.
INVESCO U.S. Government Money
Fund............................. $1-$10,000 $1-$100,000 $1-$100,000 $1-100,000
Aggregate Dollar Range of Equity
Securities in All Registered
Investment Companies Overseen By
Director in the INVESCO Funds
Complex............................ Over $100,000 $50,001-$100,000 $50,001-$100,000 Over $100,000
F-1
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
INDEPENDENT NOMINEES
-----------------------------------------------------
XXXXX X. XXXXX X. XXXXXX X. XXXXXX X. XXXX X.
XXXXXX XXXXXXXX XXXXXX XXXX, XX. FIELDS
-------- -------- --------- --------- -------
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO International Blue Chip Value Fund........... None None None None None
INVESCO MANAGER SERIES FUNDS, INC.
INVESCO Multi-Sector Fund............................ None None None None None
INVESCO MONEY MARKET FUNDS, INC.
INVESCO U.S. Government Money Fund................... None None None None None
Aggregate Dollar Range of Equity Securities in All
Registered Investment Companies Overseen by Director
in the INVESCO Funds Complex......................... None None None None None
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
INDEPENDENT NOMINEES
-------------------------------------------------------
PREMA
XXXX XXXXXX- XXXXX F. XXXX X. XXXXX X.
XXXXXXXXXX XXXXX XXXXXXX XXXXXXX XXXXX
---------- ------- --------- -------- ---------
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO International Blue Chip Value Fund.......... None None None None None
INVESCO MANAGER SERIES FUNDS, INC.
INVESCO Multi-Sector Fund........................... None None None None None
INVESCO MONEY MARKET FUNDS, INC.
INVESCO U.S. Government Money Fund.................. None None None None None
Aggregate Dollar Range of Equity Securities in All
Registered Investment Companies Overseen by Director
in the INVESCO Funds Complex........................ None None None None None
F-2
EXHIBIT G
CURRENT ADVISORY AGREEMENTS
XXXX XXXXXXX BECAME DATE LAST SUBMITTED
ADVISOR UNDER CURRENT TO A VOTE
NAME OF FUND ADVISORY AGREEMENT OF SHAREHOLDERS
------------ --------------------- -------------------
INVESCO International Blue Chip Value Fund....... September 18, 1998(1) N/A
INVESCO U.S. Government Money Fund............... February 28, 1997 January 31, 1997(2)
INVESCO Multi-Sector Fund........................ August 30, 2002(1) N/A
---------------
(1) The applicable Fund's initial shareholder initially approved the agreement
and such Fund's public shareholders have not subsequently voted on the
agreement.
(2) Shareholders last voted on the agreement on January 31, 1997, for the
purpose of approving a new investment advisory agreement, with the same
parties and on terms substantially identical to the then-existing investment
advisory agreement. Such approval was necessary because the then-existing
investment advisory agreement terminated automatically by operation of law
upon the consummation on February 28, 1997, of the merger of A I M
Management Group Inc. and INVESCO PLC, which at that time was the ultimate
parent company of the Fund's investment advisor.
G-1
EXHIBIT H
PRINCIPAL EXECUTIVE OFFICER AND DIRECTORS OF
A I M ADVISORS, INC.
The following table provides information with respect to the principal
executive officer and the directors of A I M Advisors, Inc. ("AIM"). The
business address of the principal executive officer and the directors of AIM is
00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
NAME POSITION WITH AIM PRINCIPAL OCCUPATION
---- ----------------- --------------------
Xxxx X. Xxxxxxxxxx............. Director, Chairman and Director, President and Chief Executive
President Officer, 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
Xxxxx X. Xxxxxx................ Director, Senior Vice Director, Senior Vice President,
President, General Counsel Secretary and General Counsel, A I M
and Secretary Management Group Inc.; Vice President,
A I M Capital Management Inc., A I M
Distributors, Inc. and A I M Fund
Services, Inc., and Director, Vice
President and General Counsel, Fund
Management Company
Xxxx X. Xxxx................... Director and Senior Vice Chairman, Director and Director of
President Investments, A I M Capital Management,
Inc.; Director and Executive Vice
President, A I M Management Group Inc.;
Director, A I M Distributors, Inc. and
AMVESCAP PLC
Xxxx X. Xxxxxx................. Director, Senior Vice Director, Senior Vice President and Chief
President and Chief Financial Officer, A I M Management Group
Financial Officer Inc.; Vice President and Treasurer, A I M
Capital Management, Inc. and A I M
Distributors, Inc.; Director, Vice
President and Chief Financial Officer,
A I M Fund Services, Inc.; and Vice
President and Chief Financial Officer,
Fund Management Company
H-1
EXHIBIT I
COMPENSATION TO INVESCO FUNDS GROUP, INC.
Each Company pays INVESCO Funds Group, Inc., out of the assets of the
applicable Fund, as full compensation for all services rendered, an advisory fee
for such Fund set forth the applicable below. Such fee shall be calculated by
applying the following annual rate to the average daily net assets of such Fund
for the calendar year, computed in the manner used for the determination of the
net asset value of shares of such Fund.
NET FEES PAID FEE WAIVERS
TO INVESCO OR EXPENSE
TOTAL NET FUNDS GROUP, REIMBURSEMENTS
ASSETS FOR THE INC. FOR THE FOR THE
MOST RECENTLY MOST RECENTLY MOST RECENTLY
ANNUAL RATE COMPLETED COMPLETED COMPLETED
(BASED ON AVERAGE FISCAL PERIOD FISCAL PERIOD FISCAL PERIOD
NAME OF COMPANY AND FUND DAILY NET ASSETS) OR YEAR OR YEAR OR YEAR
------------------------ ------------------------ -------------- ------------- --------------
INVESCO INTERNATIONAL FUNDS, INC. INVESCO
International Blue Chip Value Fund........ 0.75% of the first $500 $44,762,929 $367,288 $ 8,258
million; 0.65% of the
next $500 million; 0.55%
of the next $1 billion;
0.45% of the next $2
billion; 0.40% of the
next $2 billion; 0.375%
of the next $2 billion;
0.35% of the excess over
$8 billion
INVESCO MANAGER SERIES FUNDS, INC. INVESCO
Multi-Sector Fund......................... 0.75% of all assets $20,052,113* $ 43,175* $ 28,063
INVESCO MONEY MARKET FUNDS, INC. INVESCO
U.S. Government Money Fund................ 0.50% of the first $300 $67,097,347 $368,428 $191,120
million; 0.40% of the
next $200 million; 0.30%
of the excess over $500
million
---------------
* Commenced operation September 4, 2002.
I-1
EXHIBIT J
FEES PAID TO INVESCO FUNDS GROUP, INC. AND AFFILIATES IN MOST RECENT FISCAL YEAR
The following chart sets forth the non-advisory fees paid by each Fund
during its most recently completed fiscal year to INVESCO Funds Group, Inc. and
to affiliates of INVESCO Funds Group, Inc.
INVESCO
(ADMINISTRATIVE INVESCO INVESCO
NAME OF FUND SERVICES)* DISTRIBUTORS, INC.** (TRANSFER AGENCY)
------------ --------------- -------------------- -----------------
INVESCO International Blue Chip Value Fund..... $32,533 $61,423 $298,448
INVESCO U.S. Government Money Fund............. $43,159 $ 0 $299,092
INVESCO Multi-Sector Fund...................... $ 7,507*** $35,294*** $ 7,886***
---------------
* Fees paid to INVESCO for administrative services for the prior fiscal year
were paid pursuant to an agreement other than the advisory agreement.
** Net amount received from Rule 12b-1 fees. Excluded are amounts reallowed to
broker-dealers, agents and other service providers.
*** Commenced operation September 4, 2002. Figures are unaudited.
J-1
EXHIBIT K
ADVISORY FEE SCHEDULES FOR OTHER AIM FUNDS
The following table provides information with respect to the annual
advisory fee rates paid to A I M Advisors, Inc. by certain funds that have a
similar investment objective as INVESCO International Blue Chip Value Fund.
TOTAL NET ASSETS
FOR THE MOST FEE WAIVER, EXPENSE LIMITATIONS
ANNUAL RATE RECENTLY AND/OR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FISCAL FOR THE MOST RECENTLY COMPLETED
NAME OF FUND NET ASSETS) PERIOD OR YEAR FISCAL PERIOD OR YEAR
------------ ------------------------ ---------------- -------------------------------
AIM Basic Balanced Fund................ 0.65% of the first $1 $ 95,737,649 Waive advisory fee and/or
billion; 0.60% over 1 reimburse expenses on Class A,
billion up to and Class B and Class C to extent
including $5 billion; necessary to limit Total
0.55% of the excess over Operating Expenses (excluding
$5 billion interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 1.50%
AIM Blue Chip Fund..................... 0.75% if the first $350 $2,903,854,053 Waive 0.025% of advisory fee on
million; 0.625% of the each $5 billion increment on
excess over $350 million net assets in excess of $5
billion up to a maximum waiver
of 0.175% on net assets in
excess of $35 billion
AIM Developing Markets Fund............ 0.975% of the first $500 $ 157,833,643 Waive advisory fee and
million; 0.95% over $500 reimburse expenses on Class A,
million up to and Class B and Class C to extent
including $1 billion; necessary to limit Total
0.925% over $1 billion Operating Expenses (excluding
up to and including $1.5 interest, taxes, dividends on
billion; 0.90% of the short sales, extraordinary
excess over 1.5 billion items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 2.00%
AIM Diversified Dividend Fund.......... 0.75% of the first $1 $ 16,049,354 Waive advisory fee and/or
billion; 0.70% over $1 reimburse expenses on Class A,
billion up to and Class B and Class C to the
including $2 billion; extent necessary to limit Total
0.625% of the excess Operating Expenses (excluding
over $2 billion interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 1.75%
K-1
TOTAL NET ASSETS
FOR THE MOST FEE WAIVER, EXPENSE LIMITATIONS
ANNUAL RATE RECENTLY AND/OR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FISCAL FOR THE MOST RECENTLY COMPLETED
NAME OF FUND NET ASSETS) PERIOD OR YEAR FISCAL PERIOD OR YEAR
------------ ------------------------ ---------------- -------------------------------
AIM Large Cap Basic Value Fund......... 0.60% of the first $1 $ 180,146,221 N/A
billion; 0.575% over $1
billion up to and
including $2 billion;
0.55% of the excess over
$2 billion
AIM Premier Equity Fund................ 0.80% of the first $150 $9,364,213,634 Waive 0.025% of advisory fee on
million; 0.625% of the each $5 billion increment on
excess over $150 million net assets in excess of $5
billion up to a maximum waiver
of 0.175% on net assets in
excess of $35 billion
AIM V.I. Blue Chip Fund................ 0.75% of the first $350 $ 65,762,832 N/A
million; 0.625% of the
excess over $350 million
AIM V.I. Premier Equity Fund........... 0.65% of the first $250 $1,530,358,905 N/A
million; 0.60% of the
excess over $250 million
The following table provides information with respect to the annual
advisory fee rates paid to A I M Advisors, Inc. by certain funds that have a
similar investment objective as INVESCO Multi-Sector Fund.
TOTAL NET ASSETS
FOR THE MOST FEE WAIVER, EXPENSE LIMITATIONS
ANNUAL RATE RECENTLY AND/OR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FISCAL FOR THE MOST RECENTLY COMPLETED
NAME OF FUND NET ASSETS) PERIOD OR YEAR FISCAL PERIOD OR YEAR
------------ ------------------------ ---------------- -------------------------------
AIM Aggressive Growth Fund............. 0.80% of the first $150 $2,098,074,956 Waive 0.025% on each $5 billion
million; 0.625% of the increment on net assets over $5
excess over $150 million billion, up to a maximum waiver
of 0.175% on net assets in
excess of $35 billion
AIM Capital Development Fund........... 0.75% of the first $350 $ 859,038,420 N/A
million; 0.625% of the
excess over $350 million
AIM Charter Fund....................... 1.00% of the first $30 $3,473,400,686 Waive 0.025% on each $5 billion
million; 0.75% over $30 increment on net assets over $5
million up to and billion, up to a maximum waiver
including $150 million; of 0.175% on net assets in
0.625% of the excess excess of $35 billion
over $150 million
AIM Constellation Fund................. 1.00% of the first $30 $7,712,712,838 Waive 0.025% on each $5 billion
million; 0.75% over $30 increment on net assets over $5
million up to and billion, up to a maximum waiver
including $150 million; of 0.175% on net assets in
0.625% of the excess excess of $35 billion
over $150 million
K-2
TOTAL NET ASSETS
FOR THE MOST FEE WAIVER, EXPENSE LIMITATIONS
ANNUAL RATE RECENTLY AND/OR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FISCAL FOR THE MOST RECENTLY COMPLETED
NAME OF FUND NET ASSETS) PERIOD OR YEAR FISCAL PERIOD OR YEAR
------------ ------------------------ ---------------- -------------------------------
AIM Core Strategies Fund............... 0.75% of the first $1 $ 799,226 Waive advisory fee and/or
billion; 0.70% over $1 reimburse expenses on Class A,
billion up to and Class B and Class C to extent
including $2 billion; necessary to limit Total
0.625% of the excess Operating Expenses (excluding
over $2 billion interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 1.75%
AIM Dent Demographic Trends Fund....... 0.85% of the first $2 $ 501,855,692 N/A
billion; 0.80% of the
excess over $2 billion
AIM Emerging Growth Fund............... 0.85% of the first $1 $ 105,075,644 N/A
billion; 0.80% of the
excess over $1 billion
AIM Large Cap Growth Fund.............. 0.75% of the first $1 $ 245,944,356 Waive advisory fee and/or
billion; 0.70% over $1 reimburse expenses on Class A,
billion up to and Class B and Class C to extent
including $2 billion; necessary to limit Total
0.625% of the excess Operating Expenses (excluding
over $2 billion interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 1.95%
AIM Mid Cap Growth Fund................ 0.80% of the first $1 $ 138,528,944 N/A
billion; 0.75% of the
excess over $1 billion
AIM U.S. Growth Fund................... 0.75% of the first $1 $ 976,335 Waive advisory fee and/or
billion; 0.70% over $1 reimburse expenses on Class A,
billion up to and Class B and Class C to extent
including $2 billion; necessary to limit Total
0.65% of the excess over Operating Expenses (excluding
$2 billion interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 1.75%
AIM Xxxxxxxxxx Fund.................... 1.00% of the first $30 $2,726,296,882 Waive 0.025% on each $5 billion
million; 0.75% over $30 increment on net assets over $5
million up to and billion, up to a maximum waiver
including $350 million; of 0.175% on net assets in
0.625% of the excess excess of $35 billion
over $350 million
K-3
TOTAL NET ASSETS
FOR THE MOST FEE WAIVER, EXPENSE LIMITATIONS
ANNUAL RATE RECENTLY AND/OR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FISCAL FOR THE MOST RECENTLY COMPLETED
NAME OF FUND NET ASSETS) PERIOD OR YEAR FISCAL PERIOD OR YEAR
------------ ------------------------ ---------------- -------------------------------
AIM Global Value Fund.................. 0.85% of the first $1 $ 12,794,786 Waive advisory fee and/or
billion; 0.80% of the reimburse expenses on Class A,
excess over $1 billion Class B and Class C to extent
necessary to limit Total
Operating Expenses (excluding
interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 2.00%
AIM Mid Cap Basic Value Fund........... 0.80% of the first $1 $ 68,393,079 Waive advisory fee and/or
billion; 0.75% over $1 reimburse expenses on Class A,
billion up to and Class B and Class C to extent
including $5 billion; necessary to limit Total
0.70% of the excess over Operating Expenses (excluding
$5 billion interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 1.80%
AIM Asia Pacific Growth Fund........... 0.95% of the first $500 $ 88,741,097 Waive advisory fee and/or
million; 0.90% of the reimburse expenses on Class A,
excess over $500 million Class B and Class C to extent
necessary to limit Total
Operating Expenses (excluding
interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 2.25%
AIM European Growth Fund............... 0.95% of the first $500 $ 408,587,558 N/A
million; 0.90% of the
excess over $500 million
AIM Global Aggressive Growth Fund...... 0.90% of the first $1 $ 812,560,745 N/A
billion; 0.85% of the
excess over $1 billion
AIM Global Growth Fund................. 0.85% of the first $1 $ 576,920,957 N/A
billion; 0.80% of the
excess over $1 billion
AIM International Growth Fund.......... 0.95% of the first $1 $1,608,825,043 Waive 0.05% of advisory fee on
billion; 0.90% of the average net assets in excess of
excess over $1 billion $500 million
K-4
TOTAL NET ASSETS
FOR THE MOST FEE WAIVER, EXPENSE LIMITATIONS
ANNUAL RATE RECENTLY AND/OR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FISCAL FOR THE MOST RECENTLY COMPLETED
NAME OF FUND NET ASSETS) PERIOD OR YEAR FISCAL PERIOD OR YEAR
------------ ------------------------ ---------------- -------------------------------
AIM European Small Company Fund........ 0.95% $ 21,342,399 Waive advisory fee and/or
reimburse expenses on Class A,
Class B and Class C to extent
necessary to limit Total
Operating Expenses (excluding
interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 2.00%
AIM International Emerging Growth 0.95% $ 16,470,175 Waive advisory fee and/or
Fund................................. reimburse expenses on Class A,
Class B and Class C to extent
necessary to limit Total
Operating Expenses (excluding
interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 2.00%
AIM New Technology Fund................ 1.00% $ 34,819,420 Waive advisory fee and/or
reimburse expenses on Class A,
Class B and Class C to extent
necessary to limit Total
Operating Expenses (excluding
interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 2.00%
AIM Select Equity Fund................. 0.80% of the first $150 $ 497,933,298 N/A
million; 0.625% of the
excess over $150 million
AIM Small Cap Equity Fund.............. 0.85% $ 281,390,536 N/A
AIM Premier Equity II Fund............. 0.75% $ 76,141,376 N/A
AIM V.I. Aggressive Growth Fund........ 0.80% of first $150 $ 104,046,601 N/A
million; 0.625% of the
excess over $150 million
K-5
TOTAL NET ASSETS
FOR THE MOST FEE WAIVER, EXPENSE LIMITATIONS
ANNUAL RATE RECENTLY AND/OR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FISCAL FOR THE MOST RECENTLY COMPLETED
NAME OF FUND NET ASSETS) PERIOD OR YEAR FISCAL PERIOD OR YEAR
------------ ------------------------ ---------------- -------------------------------
AIM V.I. Basic Value Fund.............. 0.725% of the first $500 $ 202,513,473 Waive advisory fees of Series I
million; 0.70% of the and II shares to the extent
next $500 million; necessary to limit the expenses
0.675% of the next $500 (excluding 12b-1 plan fees, if
million; 0.65% in excess any, interest, taxes, dividend
of $1.5 billion expense on short sales,
extraordinary items and
increases in expenses due to
expense offset arrangements, if
any) of each Series to 1.30%
AIM V.I. Capital Appreciation Fund..... 0.65% of first $250 $ 786,930,877 N/A
million; 0.60% of the
excess over $250 million
AIM V.I. Capital Development Fund...... 0.75% of first $350 $ 84,986,466 N/A
million; 0.625% of the
excess over $350 million
AIM V.I. Core Equity Fund.............. 0.65% of first $250 $1,386,999,432 N/A
million; 0.60% of the
excess over $250 million
AIM V.I. Dent Demographic Trends Fund.. 0.85% of first $2 $ 38,244,830 Waive advisory fees of Series I
billion; 0.80% of the and II shares to the extent
excess over $2 billion necessary to limit the expenses
(excluding 12b-1 plan fees, if
any, interest, taxes, dividend
expense on short sales,
extraordinary items and
increases in expenses due to
expense offset arrangements, if
any) of each Series to 1.30%
AIM V.I. Growth Fund................... 0.65% of first $250 $ 363,991,901 N/A
million; 0.60% of the
excess over $250 million
AIM V.I. International Growth Fund..... 0.75% of first $250 $ 252,330,849 N/A
million; 0.70% of excess
over $250 million
AIM V.I. Mid Cap Core Equity Fund...... 0.725% of the firsts $ 69,484,798 Waive advisory fees of Series I
$500 million; 0.70% of and II shares to the extent
the next $500 million; necessary to limit the expenses
0.675% of the next $500 (excluding 12b-1 plan fees, if
million; 0.65% in excess any, interest, taxes, dividend
of $1.5 billion expense on short sales,
extraordinary items and
increases in expenses due to
expense offset arrangements, if
any) of each Series to 1.30%
K-6
TOTAL NET ASSETS
FOR THE MOST FEE WAIVER, EXPENSE LIMITATIONS
ANNUAL RATE RECENTLY AND/OR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FISCAL FOR THE MOST RECENTLY COMPLETED
NAME OF FUND NET ASSETS) PERIOD OR YEAR FISCAL PERIOD OR YEAR
------------ ------------------------ ---------------- -------------------------------
AIM V.I. New Technology Fund........... 1.00% $ 14,647,745 Waive advisory fees of Series I
and II shares to the extent
necessary to limit the expenses
(excluding 12b-1 plan fees, if
any, interest, taxes, dividend
expense on short sales,
extraordinary items and
increases in expenses due to
expense offset arrangements, if
any) of each Series to 1.30%
AIM Summit Fund........................ 1.00% of the first $10 $1,455,914,877 N/A
million; 0.75% of the
next $140 million;
0.625% in excess of $150
million
AIM Opportunities I Fund............... Base fee of 1.00%; $ 313,489,899 N/A
maximum annual
performance adjustment
of +/-0.75%
AIM Opportunities II Fund.............. Base fee of 1.50%; $ 195,743,587 N/A
maximum annual
performance adjustment
of +/-1.00%
AIM Opportunities III Fund............. Base fee of 1.50%; $ 197,568,312 N/A
maximum annual
performance adjustment
of +/-1.00%
AIM Basic Value Fund................... 0.725% of first $500 $4,554,929,266 Waive advisory fees at the
million; 0.70% of next annual rate of 0.025% for each
$500 million; 0.675% of $5 billion increment, up to a
next $500 million; 0.65% maximum waiver of 0.175% on net
of excess over $1.5 assets in excess of $35 billion
billion
AIM Basic Value II Fund................ 0.75% of first $1 $ 913,123 Waive advisory fee and/or
billion; 0.70% of next reimburse expenses on Class A,
$1 billion; 0.65% of Class B and Class C to extent
excess over $2 billion necessary to limit Total
Operating Expenses (excluding
interest, taxes, dividends on
short sales, extraordinary
items and increases in expenses
due to expense offset
arrangements, if any) of Class
A shares to 1.75%
AIM Mid Cap Core Equity Fund........... 0.725% on first $500 $1,741,929,034 N/A
million; 0.70% on next
$500 million; 0.675% on
next $500 million; 0.65%
on excess over $1.5
billion
K-7
TOTAL NET ASSETS
FOR THE MOST FEE WAIVER, EXPENSE LIMITATIONS
ANNUAL RATE RECENTLY AND/OR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FISCAL FOR THE MOST RECENTLY COMPLETED
NAME OF FUND NET ASSETS) PERIOD OR YEAR FISCAL PERIOD OR YEAR
------------ ------------------------ ---------------- -------------------------------
AIM Small Cap Growth Fund.............. 0.725% on first $500 $ 989,137,111 N/A
million; 0.70% on next
$500 million; 0.675% on
next $500 million; 0.65%
of excess over $1.5
billion
AIM Global Financial Services Fund..... 0.975% on first $500 $ 226,268,642 N/A
million; 0.95% on next
$500 million; 0.925% on
next $500 million; 0.90%
of excess over $1.5
billion
AIM Global Health Care Fund............ 0.975% on first $500 $ 767,768,706 N/A
million; 0.95% on next
$500 million; 0.925% on
next $500 million; 0.90%
of excess over $1.5
billion
The following table provides information with respect to the annual
advisory fee rates paid to A I M Advisors, Inc. by certain funds that have a
similar investment objective as INVESCO U.S. Government Money Fund.
TOTAL NET ASSETS
FOR THE MOST FEE WAIVER, EXPENSE LIMITATIONS
ANNUAL RATE RECENTLY AND/OR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FISCAL FOR THE MOST RECENTLY COMPLETED
NAME OF FUND NET ASSETS) PERIOD OR YEAR FISCAL PERIOD OR YEAR
------------ ------------------------ ---------------- -------------------------------
AIM V.I. Money Market Fund............ 0.40% of the first $250 $ 127,367,060 N/A
million; 0.35% of the
excess over $250 million
Liquid Assets Portfolio............... 0.15% $37,318,945,505 Waive 0.075% of advisory fee on
average net assets
Prime Portfolio....................... 0.15% $ 7,941,409,852 Waive 0.075% of advisory fee on
average net assets
Government & Agency Portfolio......... 0.10% $ 2,802,914,062 Limit Total Operating Expenses
(excluding Rule 12b-1
distribution plan fees, if any,
interest expense, taxes and
extraordinary items and
indirect expenses resulting
from expense offset
arrangements, if any) to 0.12%
Treasury Portfolio.................... 0.15% $ 8,109,819,658 Waive 0.075% of advisory fee on
average net assets
K-8
TOTAL NET ASSETS
FOR THE MOST FEE WAIVER, EXPENSE LIMITATIONS
ANNUAL RATE RECENTLY AND/OR EXPENSE REIMBURSEMENTS
(BASED ON AVERAGE DAILY COMPLETED FISCAL FOR THE MOST RECENTLY COMPLETED
NAME OF FUND NET ASSETS) PERIOD OR YEAR FISCAL PERIOD OR YEAR
------------ ------------------------ ---------------- -------------------------------
Government TaxAdvantage Portfolio..... 0.20% of the first $250 $ 234,741,982 Limit Total Operating Expenses
million; 0.15% over $250 (excluding Rule 12b-1
million up to and distribution plan fees, if any,
including $500 million; interest expense, taxes and
0.10% of the excess over extraordinary items and
$500 million indirect expenses resulting
from expense offset
arrangements, if any) to 0.13%
AIM Money Market Fund................. 0.55% of the first $1 $ 1,958,803,442 N/A
billion; 0.50% of the
excess over $1 billion
K-9
EXHIBIT L
PROPOSED COMPENSATION TO A I M ADVISORS, INC.
The following table provides information with respect to the annual
advisory fee rates proposed to be paid to A I M Advisors, Inc. by each Fund
under the proposed advisory agreement.
ANNUAL RATE
NAME OF FUND (BASED ON AVERAGE DAILY NET ASSETS)
------------ -------------------------------------
INVESCO International Blue Chip Value Fund........... 0.75% of first $500 million;
0.65% of next $500 million;
0.55% of next $1 billion;
0.45% of next $2 billion;
0.40% of next $2 billion;
0.375% of next $2 billion;
0.35% of excess over $8 billion
INVESCO U.S. Government Money Fund................... 0.50% of first $300 million;
0.40% of next $200 million;
0.30% of excess over $500 million
INVESCO Multi-Sector Fund............................ 0.75% of all assets
L-1
EXHIBIT M
PRINCIPAL EXECUTIVE OFFICER AND DIRECTORS OF
INVESCO INSTITUTIONAL (N.A.), INC.
The following table provides information with respect to the principal
executive officer and the directors of INVESCO Institutional (N.A.), Inc.
("INVESCO Institutional"). The business address of each principal executive
officer and directors of INVESCO Institutional is One Midtown Plaza, 0000
Xxxxxxxxx Xxxxxx, XX, Xxxxxxx, Xxxxxxx 00000.
NAME POSITION WITH INVESCO INSTITUTIONAL PRINCIPAL OCCUPATION
---- ------------------------------------------ ------------------------
Xxxx X. Xxxxxx................. Director, Chairman, President and Chief Chief Executive Officer,
Executive Officer AMVESCAP PLC -- INVESCO
Division
Xxxxx X. Xxxxxxx............... Director and Chief Financial Officer Chief Financial Officer,
INVESCO Division
M-1
EXHIBIT N
PROPOSED COMPENSATION TO INVESCO INSTITUTIONAL (N.A.), INC.
AIM proposes to pay INVESCO Institutional (N.A.), Inc., as full
compensation for all investment advisory services rendered to your Fund, a
sub-advisory fee. Such fee shall be computed daily and paid monthly, at the rate
of 40% of AIM's compensation on the sub-advised assets per year, on or before
the last day of the next succeeding calendar month.
N-1
EXHIBIT O
ADVISORY FEE SCHEDULES FOR OTHER INVESCO INSTITUTIONAL (N.A.), INC.
ADVISED TYPES OF ACCOUNTS
The following table provides information with respect to the annual
advisory fee rates paid to INVESCO Institutional (N.A.), Inc. by certain types
of accounts that have a similar investment objective as INVESCO Multi-Sector
Fund.
INVESCO Capital Management Group ("ICM")........ The fees for investment advisory services offered
by this Group vary, with all fees being negotiable
beyond the minimum fee of $50,000. The following is
a representative fee schedule for ICM's services
for equity or balanced account management: 0.75% on
the first $10 million dollars of assets under
management; 0.50% on the next $10 million; and
0.25% thereafter. Break points in pricing are
offered as the total amount of assets under
management increases.
INVESCO National Asset Management ("NAM")....... NAM Division's basic annual fee is as follows: For
Core Multiple Attribute Equity, Growth Multiple
Attribute Equity, and Premier Growth Multiple
Attribute Equity accounts, .75 of 1% of the market
value of assets up to $10 million, .50 of 1% of the
market value of assets on the next $40 million, .40
of 1% of the market value of assets on the next $50
million, and .25 of 1% of the market value of
assets above $100 million. For Mid Cap Multiple
Attribute Equity and Growth Mid Cap Multiple
Attribute Equity accounts, .85 of 1% of the market
value of assets up to $10 million, .60 of 1% of the
market value of assets on the next $40 million, .50
of 1% of the market value of assets on the next $50
million, and .35 of 1% of the market value of
assets above $100 million. For balances accounts,
.65 of 1% of the market value of assets up to $10
million, .40 of 1% of the market value of assets on
the next $40 million, .30 of 1% of the market value
of assets on the next $50 million, and .20 of 1% of
the market value of assets above $100 million. The
NAM Division reserves the right to negotiate fees
from the above schedules.
The NAM Groups serves as an advisor or sub-advisor
to mutual funds. The fees for such services are
negotiated separately.
O-1
INVESCO Structured Products STRUCTURED EQUITY ENHANCED INDEX
Group ("SPG")............. 0.60% on the first $25,000,000 0.30% on the first $25,000,000
0.45% on the next $25,000,000 0.25% on the next $50,000,000
0.35% on the next $50,000,000 0.20% on the next $125,000,000
0.25% on the next $300,000,000 0.10% on the next $300,000,000
0.10% thereafter 0.05% thereafter
MARKET NEUTRAL (BASE FEE): TAA
0.30% on the first $50,000,000 0.75% on the first $10,000,000
0.20% on the next $100,000,000 0.50% on the next $25,000,000
0.10% thereafter 0.35% on the next $65,000,000
MARKET NEUTRAL (PERFORMANCE FEE): 0.30% on the next $150,000,000
Hurdle agreed upon benchmark 0.20% on the next $300,000,000
Percent Profit Share 20% 0.10% on the next $450,000,000
0.05% thereafter
FEE COMPUTATION AND RELATED MATTERS
Fees may be negotiated on a basis that differs from the schedules above, if
circumstances warrant. Such circumstances may include, without limitation,
specialized guidelines for the products listed in the basic fee schedule,
performance fee arrangements entered into with a particular client (consistent
with the requirements of applicable law, including the Investment Advisers Act
of 1940, as amended, and ERISA), clients with multiple accounts or relationships
with Registrant and its affiliates, off-shore relationships, and account size.
Fee schedules for the SPG products for institutional accounts are typically
negotiated individually with institutional clients.
INVESCO Multiple Asset Strategies Group
("MAS")....................................... Fees for the Global Balanced product family vary
depending on mandate complexity. All fees are
negotiable above a minimum fee of $150,000. The
following is a representative fee schedule for MAS
services: 0.80% on the first $25 million of assets
under management; 0.60% on the next $25 million;
0.50% on the next $50 million; and negotiable
thereafter. The group also negotiates
performance-based fees.
O-2
EXHIBIT P
PRINCIPAL EXECUTIVE OFFICER AND DIRECTORS OF
INVESCO GLOBAL ASSET MANAGEMENT (N.A.), INC.
The following table provides information with respect to the principal
executive officer and the directors of INVESCO Global Asset Management (N.A.),
Inc. ("INVESCO Global"). The business address of each principal executive
officer and directors of INVESCO Global is One Midtown Plaza, 0000 Xxxxxxxxx
Xxxxxx, XX, Xxxxxxx, Xxxxxxx 00000.
NAME AND ADDRESS POSITION WITH INVESCO GLOBAL PRINCIPAL OCCUPATION
---------------- ---------------------------- --------------------
Xxxx X. Xxxxxx................. Director, Chairman, President Chief Executive Officer,
and Chief Executive Officer AMVESCAP PLC -- INVESCO Division
Xxxxx X. Xxxxxxx............... Director and Chief Financial Chief Financial Officer, INVESCO
Officer Division
P-1
EXHIBIT Q
PROPOSED COMPENSATION TO INVESCO GLOBAL ASSET MANAGEMENT (N.A.), INC.
AIM proposes to pay INVESCO Global Asset Management (N.A.), Inc. as full
compensation for all investment advisory services rendered to your Fund, a
sub-advisory fee. Such fee shall be computed daily and paid monthly, at the rate
of 40% of AIM's compensation on the sub-advised assets per year, on or before
the last day of the next succeeding calendar month.
Q-1
EXHIBIT R
ADVISORY FEE SCHEDULES FOR OTHER INVESCO GLOBAL ASSET MANAGEMENT (N.A.), INC.
ADVISED TYPES OF ACCOUNTS
The following table provides information with respect to the annual
advisory fee rates paid to INVESCO Global Asset Management (N.A.), Inc. by
certain types of accounts that have a similar investment objective as INVESCO
International Blue Chip Value Fund.
ANNUAL RATE
TYPE OF ACCOUNT (BASED ON AVERAGE DAILY NET ASSETS)
--------------- --------------------------------------------------------
Non-U.S. Equity........................... 0.80 of 1% on the first $25 million; 0.60 of 1% on the
next $25 million; 0.40 of 1% thereafter
Global Equity............................. 0.80 of 1% on the first $25 million; 0.60 of 1% on the
next $25 million; 0.40 of 1% thereafter
Non-U.S. Small Cap Equity................. 1.00 of 1% on the first $25 million; 0.80 of 1% on the
next $25 million; 0.60 of 1% thereafter
Fees may be negotiable depending on particular requirements and
circumstances of the account(s).
R-1
APPENDIX I
[REGISTRANT]
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this day of , 200 , by and between
[Registrant], a Delaware statutory trust (the "Trust") with respect to its
series of shares shown on the Appendix A attached hereto, as the same may be
amended from time to time, and A I M Advisors, Inc., a Delaware corporation (the
"Advisor").
RECITALS
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end, diversified management investment
company;
WHEREAS, the Advisor is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment advisor and engages in
the business of acting as an investment advisor;
WHEREAS, the Trust's Agreement and Declaration of Trust (the "Declaration
of Trust") authorizes the Board of Trustees of the Trust (the "Board of
Trustees") to create separate series of shares of beneficial interest of the
Trust, and as of the date of this Agreement, the Board of Trustees has created
separate series portfolios (such portfolios and any other portfolios
hereafter added to the Trust being referred to collectively herein as the
"Funds"); and
WHEREAS, the Trust and the Advisor desire to enter into an agreement to
provide for investment advisory services to the Funds upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for the
Funds and shall, in such capacity, supervise all aspects of the Funds'
operations, including the investment and reinvestment of cash, securities or
other properties comprising the Funds' assets, subject at all times to the
policies and control of the Board of Trustees. The Advisor shall give the Trust
and the Funds the benefit of its best judgment, efforts and facilities in
rendering its services as investment advisor.
2. Investment Analysis and Implementation. In carrying out its
obligations under Section 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Funds;
(b) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the Funds,
and whether concerning the individual issuers whose securities are included
in the assets of the Funds or the activities in which such issuers engage,
or with respect to securities which the Advisor considers desirable for
inclusion in the Funds' assets;
(c) determine which issuers and securities shall be represented in the
Funds' investment portfolios and regularly report thereon to the Board of
Trustees;
(d) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers and regularly report thereon to the
Board of Trustees; and
(e) take, on behalf of the Trust and the Funds, all actions which
appear to the Trust and the Funds necessary to carry into effect such
purchase and sale programs and supervisory functions as aforesaid,
including but not limited to the placing of orders for the purchase and
sale of securities for the Funds.
I-1
3. Securities Lending Duties and Fees. The Advisor agrees to provide the
following services in connection with the securities lending activities of each
Fund: (a) oversee participation in the securities lending program to ensure
compliance with all applicable regulatory and investment guidelines; (b) assist
the securities lending agent or principal (the "Agent") in determining which
specific securities are available for loan; (c) monitor the Agent to ensure that
securities loans are effected in accordance with the Advisor's instructions and
with procedures adopted by the Board of Trustees; (d) prepare appropriate
periodic reports for, and seek appropriate approvals from, the Board of Trustees
with respect to securities lending activities; (e) respond to Agent inquiries;
and (f) perform such other duties as necessary.
As compensation for such services provided by the Advisor in connection
with securities lending activities of each Fund, a lending Fund shall pay the
Advisor a fee equal to 25% of the net monthly interest or fee income retained or
paid to the Fund from such activities.
4. Delegation of Responsibilities. The Advisor is authorized to delegate
any or all of its rights, duties and obligations under this Agreement to one or
more sub-advisors, and may enter into agreements with sub-advisors, and may
replace any such sub-advisors from time to time in its discretion, in accordance
with the 1940 Act, the Advisers Act, and rules and regulations thereunder, as
such statutes, rules and regulations are amended from time to time or are
interpreted from time to time by the staff of the Securities and Exchange
Commission ("SEC"), and if applicable, exemptive orders or similar relief
granted by the SEC and upon receipt of approval of such sub-advisors by the
Board of Trustees and by shareholders (unless any such approval is not required
by such statutes, rules, regulations, interpretations, orders or similar
relief).
5. Independent Contractors. The Advisor and any sub-advisors shall for
all purposes herein be deemed to be independent contractors and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed to be an agent of the
Trust.
6. Control by Board of Trustees. Any investment program undertaken by the
Advisor pursuant to this Agreement, as well as any other activities undertaken
by the Advisor on behalf of the Funds, shall at all times be subject to any
directives of the Board of Trustees.
7. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers Act and
any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Trust, as the
same may be amended from time to time under the Securities Act of 1933 and
the 1940 Act;
(c) the provisions of the Declaration of Trust, as the same may be
amended from time to time;
(d) the provisions of the by-laws of the Trust, as the same may be
amended from time to time; and
(e) any other applicable provisions of state, federal or foreign law.
8. Broker-Dealer Relationships. The Advisor is responsible for decisions
to buy and sell securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates.
(a) The Advisor's primary consideration in effecting a security
transaction will be to obtain the best execution.
(b) In selecting a broker-dealer to execute each particular
transaction, the Advisor will take the following into consideration: the
best net price available; the reliability, integrity and financial
condition of the broker-dealer; the size of and the difficulty in executing
the order; and the value of the expected contribution of the broker-dealer
to the investment performance of the Funds on a continuing basis.
Accordingly, the price to the Funds in any transaction may be less
favorable than
I-2
that available from another broker-dealer if the difference is reasonably
justified by other aspects of the fund execution services offered.
(c) Subject to such policies as the Board of Trustees may from time to
time determine, the Advisor shall not be deemed to have acted unlawfully or
to have breached any duty created by this Agreement or otherwise solely by
reason of its having caused the Funds to pay a broker or dealer that
provides brokerage and research services to the Advisor an amount of
commission for effecting a fund investment transaction in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction, if the Advisor determines in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the Advisor's overall
responsibilities with respect to a particular Fund, other Funds of the
Trust, and to other clients of the Advisor as to which the Advisor
exercises investment discretion. The Advisor is further authorized to
allocate the orders placed by it on behalf of the Funds to such brokers and
dealers who also provide research or statistical material, or other
services to the Funds, to the Advisor, or to any sub-advisor. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine and the Advisor will report on said allocations regularly to the
Board of Trustees indicating the brokers to whom such allocations have been
made and the basis therefor.
(d) With respect to one or more Funds, to the extent the Advisor does
not delegate trading responsibility to one or more sub-advisors, in making
decisions regarding broker-dealer relationships, the Advisor may take into
consideration the recommendations of any sub-advisor appointed to provide
investment research or advisory services in connection with the Funds, and
may take into consideration any research services provided to such
sub-advisor by broker-dealers.
(e) Subject to the other provisions of this Section 8, the 1940 Act,
the Securities Exchange Act of 1934, and rules and regulations thereunder,
as such statutes, rules and regulations are amended from time to time or
are interpreted from time to time by the staff of the SEC, any exemptive
orders issued by the SEC, and any other applicable provisions of law, the
Advisor may select brokers or dealers with which it or the Funds are
affiliated.
9. Compensation. The compensation that each Fund shall pay the Advisor is
set forth in Appendix B attached hereto.
10. Expenses of the Funds. All of the ordinary business expenses incurred
in the operations of the Funds and the offering of their shares shall be borne
by the Funds unless specifically provided otherwise in this Agreement. These
expenses borne by the Funds include but are not limited to brokerage
commissions, taxes, legal, accounting, auditing, or governmental fees, the cost
of preparing share certificates, custodian, transfer and shareholder service
agent costs, expenses of issue, sale, redemption and repurchase of shares,
expenses of registering and qualifying shares for sale, expenses relating to
trustees and shareholder meetings, the cost of preparing and distributing
reports and notices to shareholders, the fees and other expenses incurred by the
Trust on behalf of the Funds in connection with membership in investment company
organizations and the cost of printing copies of prospectuses and statements of
additional information distributed to the Funds' shareholders.
11. Services to Other Companies or Accounts. The Trust understands that
the Advisor now acts, will continue to act and may act in the future as
investment manager or advisor to fiduciary and other managed accounts, and as
investment manager or advisor to other investment companies, including any
offshore entities, or accounts, and the Trust has no objection to the Advisor so
acting, provided that whenever the Trust and one or more other investment
companies or accounts managed or advised by the Advisor have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each company and account.
The Trust recognizes that in some cases this procedure may adversely affect the
size of the positions obtainable and the prices realized for the Funds.
I-3
12. Non-Exclusivity. The Trust understands that the persons employed by
the Advisor to assist in the performance of the Advisor's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement shall be deemed to limit or restrict the right of the Advisor
or any affiliate of the Advisor to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature. The Trust
further understands and agrees that officers or directors of the Advisor may
serve as officers or trustees of the Trust, and that officers or trustees of the
Trust may serve as officers or directors of the Advisor to the extent permitted
by law; and that the officers and directors of the Advisor are not prohibited
from engaging in any other business activity or from rendering services to any
other person, or from serving as partners, officers, directors or trustees of
any other firm or trust, including other investment advisory companies.
13. Effective Date, Term and Approval. This Agreement shall become
effective with respect to a Fund, if approved by the shareholders of such Fund,
on the Effective Date for such Fund, as set forth in Appendix A attached hereto.
If so approved, this Agreement shall thereafter continue in force and effect
until , 200 , and may be continued from year to year thereafter,
provided that the continuation of the Agreement is specifically approved at
least annually:
(a) (i) by the Board of Trustees or (ii) by the vote of "a majority of
the outstanding voting securities" of such Fund (as defined in Section
2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the trustees who are not
parties to this Agreement or "interested persons" (as defined in the 1940
Act) of a party to this Agreement (other than as trustees of the Trust), by
votes cast in person at a meeting specifically called for such purpose.
14. Termination. This Agreement may be terminated as to the Trust or as
to any one or more of the Funds at any time, without the payment of any penalty,
by vote of the Board of Trustees or by vote of a majority of the outstanding
voting securities of the applicable Fund, or by the Advisor, on sixty (60) days'
written notice to the other party. The notice provided for herein may be waived
by the party entitled to receipt thereof. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for purposes of
this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
15. Amendment. No amendment of this Agreement shall be effective unless
it is in writing and signed by the party against which enforcement of the
amendment is sought.
16. Liability of Advisor and Fund. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Advisor or any of its officers, directors or
employees, the Advisor shall not be subject to liability to the Trust or to the
Funds or to any shareholder of the Funds for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security. Any liability of
the Advisor to one Fund shall not automatically impart liability on the part of
the Advisor to any other Fund. No Fund shall be liable for the obligations of
any other Fund.
17. Liability of Shareholders. Notice is hereby given that, as provided
by applicable law, the obligations of or arising out of this Agreement are not
binding upon any of the shareholders of the Trust individually but are binding
only upon the assets and property of the Trust and that the shareholders shall
be entitled, to the fullest extent permitted by applicable law, to the same
limitation on personal liability as shareholders of private corporations for
profit.
18. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other party
entitled to receipt thereof at such address as such party may designate for the
receipt of such notice. Until further notice to the other party, it is agreed
that the address of the Trust and that of the Advisor shall be 00 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000.
19. Questions of Interpretation. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act or the
I-4
Advisers Act shall be resolved by reference to such term or provision of the
1940 Act or the Advisers Act and to interpretations thereof, if any, by the
United States Courts or in the absence of any controlling decision of any such
court, by rules, regulations or orders of the SEC issued pursuant to said Acts.
In addition, where the effect of a requirement of the 1940 Act or the Advisers
Act reflected in any provision of the Agreement is revised by rule, regulation
or order of the SEC, such provision shall be deemed to incorporate the effect of
such rule, regulation or order. Subject to the foregoing, this Agreement shall
be governed by and construed in accordance with the laws (without reference to
conflicts of law provisions) of the State of Texas.
20. License Agreement. The Trust shall have the non-exclusive right to
use the name "AIM" to designate any current or future series of shares only so
long as A I M Advisors, Inc. serves as investment manager or advisor to the
Trust with respect to such series of shares.
I-5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.
[REGISTRANT]
(a Delaware statutory trust)
Attest:
----------------------------------------- By: ----------------------------------------------------
Assistant Secretary
President
(SEAL)
Attest:
A I M ADVISORS, INC.
-----------------------------------------
By: ----------------------------------------------------
Assistant Secretary
President
(SEAL)
I-6
APPENDIX A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT
------------ ------------------------------------
[To Be Added] [To Be Added]
A-1
APPENDIX B
COMPENSATION TO THE ADVISOR
The Trust shall pay the Advisor, out of the assets of a Fund, as full
compensation for all services rendered, an advisory fee for such Fund set forth
below. Such fee shall be calculated by applying the following annual rates to
the average daily net assets of such Fund for the calendar year computed in the
manner used for the determination of the net asset value of shares of such Fund.
[To Be Added -- Please see Exhibit L for the annual rates applicable to
your Fund]
B-1
APPENDIX II
MASTER INTERGROUP SUB-ADVISORY CONTRACT FOR MUTUAL FUNDS
This contract is made as of , 200 , between A I M Advisors, Inc.
hereinafter "Adviser," 00 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, and
[INVESCO Global Asset Management (N.A.), Inc.] hereinafter "Sub-Adviser," 0000
Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000 Xxxxxxx, Xxxxxxx 00000.
WHEREAS:
A) Adviser has entered into an investment advisory agreement with
[Registrant] (hereinafter "Trust"), an open-end management investment
company registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), with respect to the funds set forth in Exhibit A
attached hereto (each a "Fund");
B) Sub-Adviser represents that it is licensed under the Investment Advisers
Act of 1940 ("Advisers Act") as an investment adviser and engages in the
business of acting as an investment adviser;
C) Adviser is authorized to delegate certain, any or all of its rights,
duties and obligations under investment advisory agreements to
sub-advisers, including sub-advisers that are affiliated with Adviser.
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. Adviser hereby appoints Sub-Adviser as Sub-Adviser of
each Fund for the period and on the terms set forth herein. Sub-Adviser accepts
such appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision of the Trust's Board of Trustees ("Board")
and Adviser, the Sub-Adviser will provide a continuous investment program for
each Fund, including investment research and management, with respect to all or
a portion of the securities and investments and cash equivalents of the Fund
(the "Sub-Advised Assets"), such Sub-Advised Assets to be determined by the
Adviser. The Sub-Adviser will determine from time to time what securities and
other investments will be purchased, retained or sold with respect to the
Sub-Advised Assets of each Fund, and the brokers and dealers through whom trades
will be executed.
(b) The Sub-Adviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price and
execution. Consistent with this obligation, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who sell shares of the Funds or provide the Funds, Adviser's other
clients, or Sub-Adviser's other clients with research, analysis, advice and
similar services. The Sub-Adviser may pay to brokers and dealers, in return for
such research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to the Sub-Adviser determining in good faith
that such commission or spread is reasonable in terms either of the particular
transaction or of the overall responsibility of the Adviser and the Sub-Adviser
to the Funds and their other clients and that the total commissions or spreads
paid by each Fund will be reasonable in relation to the benefits to the Fund
over the long term. In no instance will portfolio securities be purchased from
or sold to the Sub-Adviser, or any affiliated person thereof, except in
accordance with the applicable securities laws and the rules and regulations
thereunder and any exemptive orders currently in effect. Whenever the
Sub-Adviser simultaneously places orders to purchase or sell the same security
on behalf of a Fund and one or more other accounts advised by the Sub-Adviser,
such orders will be allocated as to price and amount among all such accounts in
a manner believed to be equitable to each account.
(c) The Sub-Adviser will maintain all required books and records with
respect to the securities transactions of the Funds, and will furnish the Board
and Adviser with such periodic and special reports as
II-1
the Board or Adviser reasonably may request. Sub-Adviser xxxxxx agrees that all
records which it maintains for the Adviser are the property of the Adviser, and
agrees to preserve for the periods prescribed by applicable law any records
which it maintains for the Adviser and which are required to be maintained, and
further agrees to surrender promptly to the Adviser any records which it
maintains for the Adviser upon request by the Adviser.
3. Further Duties. In all matters relating to the performance of this
Contract, Sub-Adviser will act in conformity with the Agreement and Declaration
of Trust, By-Laws and Registration Statement of the Trust and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules, regulations, exemptive orders and no-action
positions thereunder, and all other applicable laws and regulations. Sub-Adviser
shall maintain compliance procedures for the Funds that it and the Adviser
reasonably believe are adequate to ensure compliance with the 1940 Act and the
investment objective(s) and policies as stated in the prospectuses and
statements of additional information.
4. Services Not Exclusive. The services furnished by Sub-Adviser
hereunder are not to be deemed exclusive and Sub-Adviser shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby. Nothing in this Contract shall limit or restrict the
right of any director, officer or employee of Sub-Adviser, who may also be a
Trustee, officer or employee of the Trust, to engage in any other business or to
devote his or her time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar nature.
5. Compensation.
(a) For the services provided to a Fund under this Contract, Adviser will
pay Sub-Adviser a fee, computed daily and paid monthly, at the rate of 40% of
the Adviser's compensation on the Sub-Advised Assets per year, on or before the
last business day of the next succeeding calendar month.
(b) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
6. Fee Waivers and Expense Limitations. If, for any fiscal year of the
Trust, the amount of the advisory fee which the Fund would otherwise be
obligated to pay to the Adviser is reduced because of contractual or voluntary
fee waivers or expense limitations by the Adviser, the fee payable hereunder to
the Sub-Adviser shall be reduced proportionately; and to the extent that the
Adviser reimburses the Fund as a result of such expense limitations, the
Sub-Adviser shall reimburse the Adviser that proportion of such reimbursement
payments which the sub-advisory fee hereunder bears to the advisory fee under
this Contract.
7. Limitation of Liability of Sub-Adviser and
Indemnification. Sub-Adviser shall not be liable for any costs or liabilities
arising from any error of judgment or mistake of law or any loss suffered by the
Fund or the Trust in connection with the matters to which this Contract relates
except a loss resulting from willful misfeasance, bad faith or gross negligence
on the part of Sub-Adviser in the performance by Sub-Adviser of its duties or
from reckless disregard by Sub-Adviser of its obligations and duties under this
Contract. Any person, even though also an officer, partner, employee, or agent
of Sub-Adviser, who may be or become a Trustee, officer, employee or agent of
the Trust, shall be deemed, when rendering services to a Fund or the Trust or
acting with respect to any business of a Fund or the Trust to be rendering such
service to or acting solely for the Fund or the Trust and not as an officer,
partner, employee, or agent or one under the control or direction of Sub-Adviser
even though paid by it.
8. Duration and Termination.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect with respect to any Fund
unless it has first been approved (i) by a vote of a majority of the independent
Trustees who are not parties to this Contract or "interested persons" (as
defined in the 1940 Act) of a party to this Contract, other than as Board
members ("Independent Trustees"), cast in
II-2
person at a meeting called for the purpose of voting on such approval, and (ii)
by vote of a majority of that Fund's outstanding voting securities, when
required by the 1940 Act.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in force and effect until , 200 . Thereafter, if not
terminated, with respect to each Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of that Fund.
(c) Notwithstanding the foregoing, with respect to any Fund this Contract
may be terminated at any time, without the payment of any penalty, (i) by vote
of the Board or by a vote of a majority of the outstanding voting securities of
the Fund on sixty days' written notice to Sub-Adviser; or (ii) by the Adviser on
sixty days' written notice to Sub-Adviser; or (iii) by the Sub-Adviser on sixty
days' written notice to the Trust. Termination of this Contract with respect to
one Fund shall not affect the continued effectiveness of this Contract with
respect to any other Fund. This Contract will automatically terminate in the
event of its assignment.
9. Amendment. No provision of this Contract may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and, when required by the 1940 Act, no amendment of this
Contract shall be effective until approved by vote of a majority of the Fund's
outstanding voting securities.
10. Notices. Any notices under this Contract shall be writing, addressed
and delivered, telecopied or mailed postage paid, to the other party entitled to
receipt thereof at such address as such party may designate for the receipt of
such notice. Until further notice to the other party, it is agreed that the
address of the Trust and the Adviser shall be 00 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000. Until further notice to the other party, it is agreed that
the address of the Sub-Adviser shall be 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000.
11. Governing Law. This Contract shall be construed in accordance with
the laws of the State of Texas and the 1940 Act. To the extent that the
applicable laws of the State of Texas conflict with the applicable provisions of
the 1940 Act, the latter shall control.
12. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. Any question of
interpretation of any term or provision of this Contract having a counterpart in
or otherwise derived from a term or provision of the 1940 Act or the Advisers
Act shall be resolved by reference to such term or provision of the 1940 Act or
the Advisers Act and to interpretations thereof, if any, by the United States
Courts or in the absence of any controlling decision of any such court, by
rules, regulations or orders of the Securities and Exchange Commission ("SEC")
issued pursuant to said Acts. In addition, where the effect of a requirement of
the 1940 Act or the Advisers Act reflected in any provision of the Contract is
revised by rule, regulation or order of the SEC, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
II-3
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their officers designated as of the day and year first above
written.
A I M ADVISORS, INC. [INVESCO Global Asset Management (N.A.), INC.]
Adviser Sub-adviser
By:
-----------------------------------------
By: ----------------------------------------------------
Name:
-----------------------------------------
Name: -------------------------------------------------
Title:
----------------------------------------- Title:
--------------------------------------------------
II-4
EXHIBIT A
TO
MASTER INTERGROUP SUB-ADVISORY CONTRACT FOR MUTUAL FUNDS
FUND
[To Be Added]
II-5
APPENDIX III
[NAME OF INVESCO FUND]
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of August
13, 2003, by and between [name of current INVESCO Fund], 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
[name of new Delaware statutory 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 one or more 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 one or more 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.
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.
III-1
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.
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.
III-2
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.
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
[date], 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
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
III-3
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;
(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;
III-4
(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 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.
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;
III-5
(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
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;
III-6
(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.
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 will contain such amendments
to such Registration Statement as are determined by the Company to be necessary
and appropriate to effect the Reorganization, (ii) which will register the New
Fund Shares to be issued pursuant to Section 2.1 of this Agreement, and (iii) if
applicable, under which the Trust will succeed to the Registration Statement,
and shall use its best efforts to have such post-effective amendment or
amendments to the Registration Statement become effective as of the Closing.
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
III-7
xxxxxx, 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 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).
III-8
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.
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.
III-9
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: [NAME OF MARYLAND CORPORATION],
on behalf of each of its series listed in Schedule A
By:
-------------------------------------------- --------------------------------------------------------
Title:
--------------------------------------------------------
Attest: [NAME OF DELAWARE STATUTORY TRUST],
on behalf of each of its series listed in Schedule A
By:
-------------------------------------------- --------------------------------------------------------
Title:
--------------------------------------------------------
III-10
SCHEDULE A
SERIES OF CORRESPONDING SERIES OF
[MARYLAND CORPORATION] [DELAWARE STATUTORY TRUST]
(EACH A "CURRENT FUND") (EACH A "NEW FUND")
----------------------- --------------------------
[To Be Added]............................................... [To Be Added]
III-11
SCHEDULE B
CORRESPONDING CLASSES OF
CLASSES OF EACH CURRENT FUND EACH NEW FUND
---------------------------- ------------------------
[To Be Added]............................................... [To Be Added]
III-12
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
III-13
