(File Nos. 2-74549 and 811-03297)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
G.T. INVESTMENT PORTFOLIOS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PRELIMINARY PROXY STATEMENT
GT GLOBAL
A World of Opportunity
GT GLOBAL SPECIAL MEETING OF SHAREHOLDERS
50 California Street
27th Floor
San Francisco, CA 94111
MARCH XX, 1998
DEAR SHAREHOLDER:
As you may be aware, the financial industry has seen many mergers and
acquisitions over the last few years. A number of well-known, high profile
organizations recently have been involved in such endeavors, with the net result
of building even stronger companies with even greater resources. In this same
vein is the pending acquisition of GT Global and its sister divisions - LGT
Asset Management and Chancellor LGT Asset Management, collectively known as the
Asset Management Division (AMD) of Liechtenstein Global Trust - by AMVESCAP PLC,
the parent corporation of A I M Management Group and INVESCO. A special meeting
of GT Global XXXXXX Fund Shareholders regarding the acquisition will be held on
May 20, 1998.
Attached is the Notice and Proxy Statement(s) for the Special Meeting which
describe a number of matters on which you, the Shareholder, are being asked to
vote: (i) election of the Fund's Boards of Trustees; (ii) approval of a new
investment management and administration agreement and a sub-advisory and
sub-administration agreement for the Fund; (iii) approval of the replacement
Rule 12b-1 plans of distribution for the Fund; (iv) approval of changes to the
fundamental investment restrictions of the Fund; (v) approval of an agreement
and plan of conversion and termination for the Fund; and (vi) ratification of
the selection of independent accountants. THE FUND'S BOARD UNANIMOUSLY
RECOMMENDS THAT YOU APPROVE THESE PROPOSALS.
The proposed acquisition of the AMD by AMVESCAP offers the following
opportunities for Shareholders of the GT Global XXXXX Fund:
. Continuity of GT Global XXXXX Fund objectives, policies and procedures.
. An extended family of funds, including both U.S.-based and global products.
. Expanded investment team strength to manage your investments.
. Business synergies between the two organizations, including increased
product diversification, global brand enhancement and broadened geographic
coverage.
Your vote is important. Please take a moment now to sign and return your proxy
card(s) in the enclosed postage-paid envelope. If we do not hear from you after
a reasonable amount of time, you may receive a telephone call from our proxy
solicitor, Shareholder Communications Corporation, reminding you to vote your
shares. If you have any questions concerning the proposals to be considered at
the special meeting of GT Global Fund Shareholders on May 20, 1998, please
contact GT Global Client Services at 1-800-223-2138.
Sincerely,
William J. Guilfoyle
CHAIRMAN OF THE BOARD AND PRESIDENT
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IMPORTANT NEWS FOR GT GLOBAL SHAREHOLDERS
We encourage you to read the attached proxy statement in full; however, the
following questions and answers represent some typical concerns that
shareholders might have regarding this proxy statement.
WHY HAVE I BEEN SENT THIS PROXY STATEMENT?
As you may know, AMVESCAP, the parent corporation of AIM Management Group Inc.
and INVESCO Plc., has entered into an agreement with Liechtenstein Global Trust
("LGT") pursuant to which AMVESCAP will acquire LGT's Asset Management Division,
which includes Chancellor LGT Asset Management, Inc. and GT Global, Inc. In
connection with this acquisition, certain changes are being recommended with
respect to the GT Global Funds which may only be implemented if approved by
shareholders.
WHAT AM I BEING ASKED TO VOTE ON?
The proposals you are being asked to vote on are:
1. Election of the Board of Trustees/Directors
2. Approval of a new investment management and administration agreement
3. Approval of a sub-advisory and sub-administration agreement
4. Approval of replacement Rule 12b-1 plans of distribution
5. Approval of changes to the fundamental investment restrictions
6. Reorganization of the Companies into Delaware business trusts
7. Reorganization of the portfolios in which certain Funds invest into
Delaware business trusts
8. Ratification of the selection of independent public accountants
HOW WILL THE ACQUISITION OF LGT'S ASSET MANAGEMENT DIVISION BY AMVESCAP AFFECT
ME?
The Boards of the GT Global Funds believe that the acquisition will be
beneficial to shareholders of the Funds for a number of reasons, including:
. AIM's performance record as an investment manager and reputation in the
industry
. Access to a wider selection of investment choices for shareholders,
including approximately 55 funds in the AIM group
. The additional shareholder service support provided by the larger
organization
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WILL THE INVESTMENT OBJECTIVES OF MY FUND CHANGE?
The investment objective of your Fund will not change.
WHAT IS THE BENEFIT OF REORGANIZING THE COMPANIES AS DELAWARE BUSINESS TRUSTS?
The reorganizations are being proposed primarily to modernize the organizational
documents under which the Companies operate; the reorganization will not
substantially affect the way your Fund operates. The Board of your Company
believes that the Delaware business trust form of organization offers a number
of advantages over the Company's current form of organization, including greater
flexibility to conduct business without expensive proxy solicitations to
shareholders and limitation of potential shareholder liability. Also, since many
AIM Funds are organized as Delaware business trusts, administrative efficiencies
and consistency among the Funds would be achieved.
HOW WILL THE EXPENSES FOR MY FUND BE AFFECTED?
The fees and expenses payable by your Fund are not expected to increase as a
result of any of the changes you are voting on.
HOW DOES THE BOARD OF MY COMPANY RECOMMEND THAT I VOTE?
The Board recommends that you vote FOR all of the proposals on the enclosed
proxy card.
HOW DO I VOTE?
You may indicate your vote on the enclosed proxy card and return it in the
postpaid envelope provided
OR
You may fax the proxy card to (Shareholder Communications fax number)
You may call in your vote to Shareholder Communications at (SC 800 number)
WHY ARE MULTIPLE PROXY CARDS ENCLOSED?
You have been sent a proxy card for each Fund and class of shares you own,
because each requires a separate vote. Please sign, date and return each proxy
card.
WHEN IS THE DEADLINE FOR VOTING?
All votes must be received by May 20, the date of the Shareholder Meeting.
However, to prevent additional costs from being incurred, it is important that
you cast your vote as soon as possible. If we do not hear from you, you may
receive a call from our proxy solicitor, Shareholder Communications Corporation,
requesting that you vote your shares.
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PRELIMINARY PROXY STATEMENT
G.T. INVESTMENT FUNDS, INC.
G.T. GLOBAL GROWTH SERIES
G.T. INVESTMENT PORTFOLIOS, INC.
GT GLOBAL SERIES TRUST
50 CALIFORNIA STREET
27TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1998
TO THE SHAREHOLDERS:
Notice is hereby given that a Special Meeting of Shareholders (the
"Special Meeting") of each of the above-listed investment companies
("Companies") will be held at 50 California Street, 27th Floor, San Francisco,
California, on May 20, 1998, at [ ] a.m., Pacific time, for the following
purposes:
(1) To elect each Company's Board of Directors or Board of Trustees;
(2) To approve a new investment management and administration agreement
and sub-advisory and sub-administration agreement with respect to
each series of each Company (each, a "Fund," and collectively, the
"Funds");
(3) To approve replacement Rule 12b-1 plans of distribution with respect
to each Fund;
(4) To approve changes to the fundamental investment restrictions of each
Fund;
(5) To approve an agreement and plan of conversion and termination for
each Company;
(6) To approve the conversion of the portfolios in which certain Funds
invest;
(7) To ratify the selection of Coopers & Lybrand L.L.P. as each Company's
independent public accountants; and
(8) To transact such other business as may properly come before the
Special Meeting or any adjournment thereof.
Shareholders of record at the close of business on March 17, 1998, are
entitled to notice of, and to vote at, the Special Meeting. Your attention is
called to the accompanying Proxy Statement. Whether or not you attend the
Special Meeting, we urge you to PROMPTLY COMPLETE, SIGN AND RETURN THE ENCLOSED
PROXY CARD, so that a quorum will be present and a maximum number of shares may
be voted.
BY ORDER OF THE BOARDS,
HELGE KRIST LEE
SECRETARY
SAN FRANCISCO, CALIFORNIA
MARCH 31, 1998
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YOUR VOTE IS VERY IMPORTANT. BY PROMPTLY COMPLETING, SIGNING AND RETURNING THE
ENCLOSED PROXY CARD YOU WILL HELP YOUR COMPANY AVOID THE SUBSTANTIAL
ADDITIONAL EXPENSES OF MAKING FURTHER SOLICITATIONS.
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PROXY STATEMENT
G.T. INVESTMENT FUNDS, INC.
G.T. GLOBAL GROWTH SERIES
G.T. INVESTMENT PORTFOLIOS, INC.
GT GLOBAL SERIES TRUST
50 CALIFORNIA STREET
27TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 20, 1998
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This Proxy Statement is being furnished to shareholders in connection with
the solicitation of proxies by the Board of Directors or Board of Trustees of
each of the above-listed investment companies ("Companies"). These proxies are
to be used at the Special Meeting of Shareholders and at any adjournment thereof
(the "Special Meeting" or "Meeting") to be held at the offices of the Companies,
50 California Street, 27th Floor, San Francisco, California 94111, on May 20,
1998, at [ ] a.m. Pacific time. Only shareholders of record at the close of
business on March 17, 1998 ("Shareholders"), are entitled to notice of and to
vote at the Meeting. Copies of this Proxy Statement and the accompanying
materials will first be mailed to Shareholders on or about March 31, 1998.
Each Company is composed of one or more separate series or portfolios,
each of which is referred to herein as a "Fund." Each Fund has multiple classes
of shares. The terminology used by the Companies varies, but for simplicity and
clarity each Company's shares of beneficial interest or shares of common stock
are referred to as "Shares" and the holders of Shares are "Shareholders." Each
Company's Board of Directors or Board of Trustees is referred to as a "Board"
and the Trustees and Directors of each Company are "Board Members." Each full
Share of each class of each Fund outstanding is entitled to one vote, and each
fractional Share of each class of each Fund outstanding is entitled to a
proportionate share of one vote, with respect to each proposal to be voted upon
by the Shareholders of that Company, that Fund or that class, as appropriate.
Information about the vote necessary with respect to each proposal is discussed
below in connection with the proposal. Set forth below is a list reflecting the
formal name of each Fund and the short-hand name as used in this proxy statement
and the proposals to be voted upon by the Shareholders of the Funds.
G.T. INVESTMENT FUNDS, INC.
NAME AS USED PROPOSALS APPLICABLE
FUND NAME IN THIS PROXY TO FUND
STATEMENT
GT Global Consumer Products Consumer Products All Proposals
and Services Fund and Services Fund
GT Global Financial Services Financial Services All Proposals
Fund Fund
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GT Global Health Care Fund Health Care Fund All Proposals except 6
GT Global Infrastructure Fund Infrastructure Fund All Proposals
GT Global Natural Resources Natural Resources All Proposals
Fund Fund
GT Global Telecommunications Telecommunications All Proposals except 6
Fund Fund
GT Global Developing Markets Developing Markets All Proposals except 6
Fund Fund
GT Global Emerging Markets Emerging Markets Fund All Proposals except 6
Fund
GT Global Latin America Growth Latin America Growth All Proposals except 6
Fund Fund
GT Global Growth & Income Fund Growth & Income Fund All Proposals except 6
GT Global Government Income Government Income All Proposals except 6
Fund Fund
GT Global High Income Fund High Income Fund All Proposals
GT Global Strategic Income Strategic Income Fund All Proposals except 6
Fund
G.T. GLOBAL GROWTH SERIES
NAME AS USED PROPOSALS APPLICABLE
FUND NAME IN THIS PROXY TO FUND
STATEMENT
GT Global New Pacific Growth Pacific Fund All Proposals except 6
Fund
GT Global Europe Growth Fund Europe Fund All Proposals except 6
GT Global Japan Growth Fund Japan Fund All Proposals except 6
GT Global International Growth International Fund All Proposals except 6
Fund
GT Global Worldwide Growth Worldwide Fund All Proposals except 6
Fund
GT Global America Mid Cap America Mid Cap Fund All Proposals except 6
Growth Fund
GT Global America Small Cap America Small Cap All Proposals
Growth Fund Fund
GT Global America Value Fund America Value Fund All Proposals
G.T. INVESTMENT PORTFOLIOS, INC.
NAME AS USED PROPOSALS APPLICABLE
FUND NAME IN THIS PROXY TO FUND
STATEMENT
GT Global Dollar Fund Dollar Fund All Proposals except 6
GT GLOBAL SERIES TRUST
NAME AS USED PROPOSALS APPLICABLE
FUND NAME IN THIS PROXY TO FUND
STATEMENT
GT Global New Dimension Fund New Dimension Fund All Proposals except 6
If the accompanying proxy card is properly executed and returned by a
Shareholder in time to be voted at the Special Meeting, the Shares covered
thereby will be voted in accordance with the instructions marked thereon by the
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Shareholder. Executed proxies that are unmarked will be voted in favor of the
nominees for Board Members; in accordance with the recommendation of your Board
as to all other proposals described in this Proxy Statement and relating to your
Fund; and, at the discretion of the proxyholders, on any other matter that may
properly have come before the Special Meeting or any adjournments thereof. Any
proxy given pursuant to this solicitation may be revoked at any time before its
exercise by giving written notice to the Secretary of your Company or by the
issuance of a subsequent proxy. To be effective, such revocation must be
received by the Secretary of your Company prior to the Special Meeting. In
addition, a Shareholder may revoke a proxy by attending the Meeting and voting
in person. The solicitation of proxies will be made primarily by mail but also
may be made by telephone, telegraph, telecopy and personal interviews.
Authorization to execute proxies may be obtained by telephonic or electronically
transmitted instructions.
The presence in person or by proxy of Shareholders of a Company entitled
to cast a majority of all the votes entitled to be cast at the Meeting shall
constitute a quorum at the Meeting with respect to that Company. If a quorum is
not present at the Meeting or if a quorum is present but sufficient votes to
approve any of the proposals described in the Proxy Statement are not received,
the persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those Shares represented at the Meeting in
person or by proxy. A Shareholder vote may be taken on one or more of the
proposals in this Proxy Statement prior to any such adjournment if sufficient
votes have been received and it is otherwise appropriate.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and the broker does not have discretionary voting
authority. Abstentions and broker non-votes will be counted as Shares present
for purposes of determining whether a quorum is present, but will not be voted
for or against any proposal or for or against any adjournment to permit further
solicitation of proxies. Accordingly, abstentions and broker non-votes
effectively will be a vote against adjournment or against any proposal where the
required vote is a percentage of the shares present or outstanding. In addition,
abstentions and broker non-votes will not be counted as votes cast for purposes
of determining whether sufficient votes have been received to approve a
proposal.
Information as to the number of outstanding Shares of each Company and
each Fund as of the record date, March 17, 1998 ("Record Date"), is set forth in
Exhibit A. To the knowledge of the Companies' management, as of the record date,
there are no owners of 5% or more of the outstanding shares of any Fund, except
as set for in Exhibit A.
PROPOSAL NO. 1: ELECTION OF BOARD MEMBERS
RELEVANT FUNDS. Proposal 1 applies to all Funds.
PROPOSAL. It is the intention of each proxyholder named on the
accompanying proxy card to vote FOR the election of the nominees listed below
unless the Shareholder specifically indicates on his or her proxy card a desire
to withhold authority to vote for any nominee. The Boards do not contemplate
that any of the nominees who have consented to being nominated will be unable to
serve as Board Members for any reason, but if that should occur prior to the
Meeting, the proxies will be voted for such other nominee(s) as the Boards may
recommend. If elected, each nominee will hold office until his/her successor is
duly elected and qualified.
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Each Board Member currently serves as a Board Member of each Company. Each
Board Member has served as a Board Member for GT Global Series Trust ("Series
Trust") since August 11, 1997, shortly after its organization. Mr. Anderson has
served as a Board Member for each of the other Companies since May 30, 1987. Mr.
Bayley has served as a Board Member for G.T. Investment Funds, Inc. ("Investment
Funds") and G.T. Investment Portfolios, Inc. ("Investment Portfolios") since May
30, 1987 and for G.T. Global Growth Series ("Growth Series") since July 30,
1985. Mr. Patterson has served as a Board Member for each of the Companies
except Series Trust since November 30, 1988. Miss Quigley has served as a Board
Member for Investment Fund and Investment Portfolios since May 30, 1987 and for
Growth Series since January 18, 1977. Mr. Guilfoyle, President of GT Global,
Inc., the principal distributor of the Funds ("GT Global"), has served as a
Board Member of each of the Companies except Series Trust since February 19,
1997. Each Board Member has served as a Board Member for Series Trust since
August 11, 1997.
INFORMATION REGARDING NOMINEES FOR ELECTION AT THE SPECIAL MEETING
NAME, AGE, BUSINESS EXPERIENCE DURING THE PAST FIVE POSITION(S) WITH
YEARS AND OTHER DIRECTORSHIPS EACH
COMPANY
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William J. Guilfoyle, Age 39* Board Member and
Mr. Guilfoyle is President, GT Global since 1995; Chairman of the
Director, GT Global since 1991; Senior Vice President Board and President
and Director of Sales and Marketing, GT Global from May of the Company
1992 to April 1995; Director, Liechtenstein Global Trust
AG (holding company of the various international LGT
companies) Advisory Board since January 1996; Director,
G.T. Global Insurance Agency ("G.T. Insurance") since
1992; President and Chief Executive Officer, G.T.
Insurance since 1995; Senior Vice President and
Director, Sales and Marketing, G.T. Insurance from April
1993 to November 1995; Senior Vice President, Retail
Marketing, G.T. Insurance from 1992 to 1993. Mr.
Guilfoyle is also a director or trustee of each of the
other investment companies registered under the 1940 Act
that is managed or administered by Chancellor LGT.
C. Derek Anderson, Age 56 Board Member
Mr. Anderson is President, Plantagenet Capital
Management, LLC (an investment partnership); Chief
Executive Officer, Plantagenet Holdings, Ltd. (an
investment banking firm); Director, Anderson Capital
Management, Inc., since 1988; Director, PremiumWear,
Inc. (formerly Munsingwear, Inc.) (a casual apparel
company); and Director, "R" Homes, Inc. and various
other companies. Mr. Anderson is also a director or
trustee of each of the other investment companies
registered under the 1940 Act that is managed or
administered by Chancellor LGT.
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Frank S. Bayley, Age 58 Board Member
Mr. Bayley is a partner of the law firm of Baker &
McKenzie; and Director and Chairman, C.D. Stimson
Company (a private investment company). Mr. Bayley also
is a director or trustee of each of the other investment
companies registered under the 1940 Act that is managed
or administered by Chancellor LGT.
Arthur C. Patterson, Age 54 Board Member
Mr. Patterson is a Managing Partner, Accel Partners (a
venture capital firm). He also serves as a director of
Viasoft and PageMart, Inc. (both public software
companies), as well as several other privately held
software and communications companies. Mr. Patterson
also is a director or trustee of each of the other
investment companies registered under the 1940 Act that
is managed or administered by Chancellor LGT.
Ruth H. Quigley, Age 62 Board Member
Miss Quigley is a private investor. From 1984 to 1986,
she was President of Quigley Friedlander & Co., Inc. (a
financial advisory services firm). Miss Quigley also is a
director or trustee of each of the other investment
companies registered under the 1940 Act that is managed
or administered by Chancellor LGT.
*Mr. Guilfoyle is deemed to be an "interested person" of the Companies, as
defined in the Investment Company Act of 1940, as amended ("1940 Act"), by
virtue of his associations with GT Global and Chancellor LGT Asset Management,
Inc. ("Chancellor LGT"), the Companies' investment manager and administrator,
and their affiliates.
The above information provides each Board Member's business experience
during at least the past five years. Corresponding information with respect to
the executive officers of the Companies is provided below. See "Other
Information -- Executive Officers of the Companies."
To the knowledge of each Company's management, as of the record date, the
Board Members and officers of each Company owned, as a group, less than 1% of
the outstanding shares of each Fund. A table indicating each nominee's ownership
of Fund shares is attached as Exhibit B.
There were eight meetings of the Boards held during the Investment Funds'
fiscal year ended October 31, 1997 and during Growth Series' and Investment
Portfolio's fiscal year ended December 31, 1997. There were four meetings of the
Board held during Series Trust's initial fiscal period ended December 31, 1997.
Each Board has an Audit Committee comprised of Miss Quigley and Messrs.
Anderson, Bayley and Patterson. The purpose of the Audit Committee is to oversee
the annual audit of each Company and review the performance of the Companies'
independent accountants. During each Company's last completed fiscal year, the
Audit Committee met [once]. Each Board Member of each Company attended at least
75% of the total number of meetings of the Board and the Audit Committee.
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Each Board Member serves in total as a director or trustee of 12
registered investment companies with 42 series managed or administered by
Chancellor LGT. Each Company pays each Board Member, who is not a director,
officer or employee of Chancellor LGT, or any affiliated company, an annual fee
plus a meeting fee for each Board or committee meeting attended by such Board
Member and reimburses travel and other out-of-pocket expenses incurred in
connection with attending such meetings. The table below summarizes the
compensation of the Companies' Board Members for the fiscal year ended October
31, 1997 for Investment Funds and December 31, 1997 for Growth Series and
Investment Portfolios and the estimated compensation of the Board Members for
Series Trust for the fiscal year ending December 31, 1998.
Compensation Table
Name of Investment Growth Investment SERIES Total
PERSON (1)(2) FUNDS SERIES PORTFOLIOS TRUST (3) COMPENSATION
------------- ----- ------- ---------- ---------- ------------
C. Derek Anderson $_____ $_____ $_____ $_____ $_____
Frank S. Bayley $_____ $_____ $_____ $_____ $_____
Arthur C.Patterson $_____ $_____ $_____ $_____ $_____
Ruth H. Quigley $_____ $_____ $_____ $_____ $_____
(1) Mr. Guilfoyle received no compensation from any of the Companies.
(2) The Board Members do not receive any pension or retirement benefits as
compensation for their services to the Companies.
(3) Estimated for first full year of service commencing August 11, 1997.
REQUIRED VOTE. With respect to each Company, a plurality of all the votes
cast at the meeting is required to elect each nominee.
EACH BOARD RECOMMENDS
THAT YOU VOTE "FOR" THE BOARD MEMBERS LISTED IN PROPOSAL 1
PROPOSAL NO 2. APPROVAL OF INVESTMENT MANAGEMENT AND
ADMINISTRATION AGREEMENTS AND SUB-ADVISORY AND SUB-ADMINISTRATION
AGREEMENTS
RELEVANT FUNDS. Proposal 2 applies to all Funds.
BACKGROUND. On January 30, 1998, Liechtenstein Global Trust, AG ("LGT"),
the indirect parent organization of Chancellor LGT and GT Global, Inc.
(together, "GT Global") and LGT Holding (International) AG, Zurich, entered into
an agreement (the "Purchase Agreement") with AMVESCAP PLC ("AMVESCAP") and AMD
Acquisition Corp. , pursuant to which AMVESCAP will acquire LGT's Asset
Management Division, which includes GT Global and certain other affiliates. In
connection with this transaction (the "Purchase"), and as required by the 1940
Act, shareholders of the Funds are being asked to approve new Investment
Management and Administration Agreements (collectively, the "New Management
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Agreements") and new Sub-Advisory and Sub-Administration Agreements
(collectively, the "New Sub-Advisory Agreements") (the New Management Agreements
and the New Sub-Advisory Agreements are collectively referred to as the "New
Agreements"). Under the New Agreements, A I M Advisors, Inc. ("AIM"), a wholly
owned subsidiary of AMVESCAP, would serve as investment manager and
administrator, and Chancellor LGT (whose name would be changed following
consummation of the Purchase) would serve as sub-adviser and sub-administrator,
to each of the Funds. See "Information Concerning AIM and Chancellor LGT." Forms
of each of the New Agreements are attached hereto as Exhibits C and D. The Board
of each Company has approved the New Management Agreement and New Sub-Advisory
Agreement with respect to each Fund, subject to the approval of its respective
shareholders.
Chancellor LGT has served and currently serves as investment manager to
each of the Funds pursuant to investment management and administration contracts
(collectively, the "Current Management Contracts"). It currently serves as
investment manager to a total of __ investment company portfolios with
approximately $__ billion in assets as of _______, 1998. As a result of the
Purchase, the Current Management Contracts will automatically terminate.
See "Information Concerning AIM and Chancellor LGT."
At a meeting held on March __, 1998, the Boards of each Company, including
a majority of the members of the Boards of the Companies who would not be
"interested persons" (as defined in the 1940 Act) ("Independent Board Members"),
approved, subject to shareholder approval, the New Agreements. A description of
the New Agreements is provided below under "Terms of the New Agreements." Such
description is only a summary and is qualified by reference to the attached
Exhibits C and D. A summary of the Boards' considerations is provided below
under "Board Considerations."
In approving the New Agreements, the Boards took into account that,
except for the change in the investment manager and the establishment of
sub-advisory relationships, there are no material differences between the
provisions of the Current Management Contracts and the New Agreements. Further,
based on the representations of AIM and Chancellor LGT regarding their
intentions, the Boards do not anticipate currently that there will be
substantial changes in the way in which the Funds are managed or operated,
except as noted below. Following the Closing Date, AIM intends to carefully
study the investment performance of each of the Funds, as well as the combined
resources of AMVESCAP and Chancellor LGT, in order to determine what steps, if
any, may be taken to ensure strong investment performance of the Funds into the
future. It is anticipated that as a result of such study, AIM may recommend,
among other things, various actions such as reorganizations or mergers involving
certain Funds, as well as changes in or adjustments to the investment personnel
assigned to manage certain Funds. Any proposals along these lines would be
presented to the Boards for their approval. Moreover, implementation of certain
of these proposals may require shareholder approval.
If the conditions set forth in the Purchase Agreement are not met or
waived or if the Purchase Agreement is terminated, the Purchase will not be
consummated, and the Current Management Contracts will remain in effect. If the
New Agreements are approved, and the Purchase is thereafter consummated, the New
Agreements will be executed and become effective on or about the Closing Date,
as defined below.
SHAREHOLDER APPROVAL REQUIREMENTS. Approval of the New Management
Agreement and New Sub-Advisory Agreement on behalf of each Fund requires the
affirmative vote of a "majority of the outstanding voting securities" of that
Fund, which for this purpose means the affirmative vote of the lesser of (i)
more than 50% of the outstanding shares of the Fund or (ii) 67% or more of the
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shares of the Fund present at the meeting if more than 50% of the outstanding
shares of such Fund are represented at the meeting in person or by proxy.
Because for each Fund approvals of the New Management Agreement and the New
Sub-Advisory Agreement are completely contingent upon the approval of both, they
are to be considered as a single Proposal by shareholders. If the New Agreements
are not approved with respect to any Fund and the Purchase is consummated, the
Board of the relevant Company will determine what further action to take.
Because the Purchase is not contingent on the approval of the New Agreements, it
is possible that the Purchase will be consummated even if one or more Funds do
not approve the New Agreements. In such case, GT Global (including Chancellor
LGT) would be acquired by AMVESCAP and the Current Management Contracts would
automatically terminate. As a result, for any Fund or Funds that had not
approved the New Agreements, the Board would need to make new arrangements for
obtaining advisory services. Such steps could include the hiring of AIM and GT
Global to provide services on an interim basis, and AMVESCAP has indicated its
willingness to permit AIM and GT Global to provide such services if so
requested.
Under a structure commonly referred to as "master-feeder," each of America
Small Cap Growth Fund, America Value Fund, Consumer Products and Services Fund,
Financial Services Fund, High Income Fund, Infrastructure Fund, Natural
Resources Fund and Telecommunications Fund invests all of its investable assets
in a corresponding Portfolio (each a "Portfolio" and collectively the
"Portfolios"). Each Portfolio directly acquires securities and its corresponding
Fund acquires an indirect interest in those securities. Under this arrangement,
investment management and sub-advisory services are rendered to the Portfolios
and not the Funds, but shareholders of the Funds are afforded the same rights to
vote on the New Management Agreements and New Sub-Advisory Agreements of the
Portfolios as they would have if the Funds invested directly in portfolio
securities.
Under the master-feeder structure, on behalf of each Fund as an
interestholder in the applicable Portfolio, the Board will vote the Fund's
interest in the same proportion as shareholders of the Fund cast their votes at
the shareholder meeting. As with the Funds that are not organized in a
master-feeder arrangement, in order for the New Agreements to be approved, a
"majority of the interests in a Portfolio" must approve the agreement. For this
purpose, a "majority of the interests in a Portfolio" requires the affirmative
vote of the lesser of (i) more than 50% of the outstanding interests of the
Portfolio or (ii) 67% of the interests of the Portfolio present or represented
at an interestholders meeting at which the holders of more than 50% of the
outstanding interests of the Portfolio are represented at the meeting in person
or by proxy.
In the interests of simplicity and clarity, references herein to a "Fund"
or the "Funds" include, where appropriate, the corresponding "Portfolio" or
"Portfolios."
PURCHASE OF LGT'S ASSET MANAGEMENT DIVISION BY AMVESCAP. On January 30,
1998, LGT and LGT Holding (International) AG, Zurich (together, the "Sellers")
entered into the Purchase Agreement with AMVESCAP and AMD Acquisition Corp., a
wholly owned subsidiary of AMVESCAP (the "Buyer"), pursuant to which the Buyer
will purchase the global asset management business of the Sellers by acquiring
all of the issued and outstanding shares of LGT Holding Luxembourg SA, LGT (UK
Holdings) PLC and LGT Bank in Liechtenstein Ltd. (Cayman) and equity interests
in LGT Verwaltungs GmbH (together with their respective subsidiaries, the
"Transferred Companies"). Under the Purchase Agreement, the Buyer shall pay the
Sellers $1.3 billion, which shall be (i) reduced (or increased) to the extent
that the closing tangible net worth of the Transferred Companies at closing is
less than (or greater than) zero, (ii) reduced to the extent that annualized
asset management fees (without giving effect to market and currency
fluctuations) of the Transferred Companies at closing, in respect of which
client consents have been obtained, are less than 92.5% of base investment
management fees and (iii) adjusted in respect of certain transaction-related
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fees and expenses (including, among other things, mutual fund shareholder and
other client consent costs). Thus, failure by Shareholders of the Companies to
approve the New Agreements may result in the Buyer paying, and the Sellers
receiving, a lower amount for the sale of the Transferred Companies, but will
not necessarily preclude a closing of the Purchase.
The closing is expected to occur on or about May 29, 1998 (the "Closing
Date") subject to the satisfaction or waiver of certain conditions that include,
among other things: (i) the annualized asset management fees (without giving
effect to market and currency fluctuations) being at least 60% of base
management fees; (ii) approval of the Purchase by AMVESCAP shareholders; (iii)
certain governmental approvals and other third party consents having been
received; (iv) representations and warranties made by the parties being true and
correct in all material respects at the closing; and (v) no party being subject
to any order prohibiting the consummation of the Purchase.
The Purchase Agreement may be terminated at any time prior to the Closing
Date (i) by the mutual consent of the Buyer and LGT; (ii) by written notice by
any party after September 30, 1998; (iii) by the Sellers if, by a specified
date, AMVESCAP's shareholders have not approved the transaction; or (iv) under
the other circumstances set forth in the Purchase Agreement.
BOARD CONSIDERATIONS. At a series of meetings with the Boards,
representatives of AMVESCAP, INVESCO Funds Group, Inc. ("INVESCO") (a wholly
owned subsidiary of AMVESCAP), AIM, Chancellor LGT and GT Global, Inc. discussed
with the Boards the anticipated effects of the Purchase on the advisory,
sub-advisory and related relationships with the Funds. At meetings in person
held on February 10, 17 and 25 and March 10-11 and 24, 1998, these
representatives provided information to Board Members concerning the specific
terms of the Purchase Agreement, the anticipated advisory and sub-advisory
relationships with the Funds, and the proposed plans for ongoing management,
distribution and operation of the Funds. Throughout this period, the Boards and
their counsel requested and received additional information from AIM, GT Global
and their counsel, and held telephone conferences regarding the Purchase and its
potential impact on the Funds and their shareholders.
In connection with their review, the Boards obtained substantial
information regarding: the management, financial position and business of
AMVESCAP and AIM and their affiliates, including INVESCO; the history of AIM's
and its affiliates' business and operations; the performance of the investment
companies and private accounts advised by AIM, INVESCO and their respective
affiliates; the impact of the Purchase on the Funds and their shareholders; the
plans of AMVESCAP and its affiliates with respect to GT Global and the Funds;
performance and financial information about each of the Funds; and information
about other funds and their fees and expenses. The Boards also received
information regarding the terms of the Purchase and comprehensive financial
information including: AMVESCAP's plans for financing the Purchase; the impact
of the financing on AIM, as investment adviser; AIM's plans for the compensation
and retention of personnel currently employed by GT Global and the Transferred
Companies who currently provide services to the Companies, including an employee
stabilization plan being implemented at GT Global; and information concerning
employment contracts with senior management of GT Global.
In connection with their deliberations, the Boards evaluated the
above-referenced information and considered, among other things, the following
factors:
(1) the expectation that the investment objectives, policies and
management strategies of the Funds after the Purchase will not materially
change;
(2) the expectation that substantially the same investment teams and
management personnel will to manage the Funds on a day-to-day basis through
Chancellor LGT as sub-adviser to the Funds, which will be supported where
appropriate by investment and other personnel of AMVESCAP, INVESCO, AIM and
their affiliates who are experienced in managing and administering similar
investment products;
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(3) the expectation that the investment expertise available to the Funds
will be enhanced by the combined AMVESCAP/Chancellor LGT management team and, in
particular, that AIM's depth and experience in managing U.S. equity funds and
money market funds will complement Chancellor LGT's traditional strength in
managing global and foreign funds and that INVESCO's depth and experience in
managing global and foreign funds also will be available to Chancellor LGT;
(4) the continued employment of and retention incentives for senior
management of GT Global and the continued maintenance of investment personnel by
Chancellor LGT and its affiliates in multiple locations throughout the world;
(5) the ability of AMVESCAP to provide sufficient capital to support the
operations of AIM and GT Global and AMVESCAP's commitment to paying compensation
adequate to attract and retain top quality personnel;
(6) the fact that Fund Shareholders will have access to a more
diversified mutual fund product line through the anticipated exchange privileges
with the AIM Funds, including access to over 50 AIM Funds, which include several
types of funds not currently available to shareholders within the GT Fund
complex;
(7) the enhanced distribution potential for the Funds through AIM
Distributors' extensive sales network and the multiple class structure utilized
by AIM Distributors (which shareholders are asked to consider for the Funds in
Proposal 3);
(8) the commitment of AIM to maintain the Funds' current expense caps for
at least two years and the expectation that the expense ratios of the Funds may
be reduced to the extent assets increase through increased sales and reduced
redemption levels;
(9) the additional administrative and shareholder services which can be
provided by a larger organization such as AIM;
(10) the overall advantages of being managed and distributed by the
AMVESCAP organization which will have approximately $250 billion under
management and operations throughout the world following the closing, especially
in light of increasingly competitive conditions in the financial services
industry, including entry into the industry of large and well-capitalized
companies which are spending substantial amounts to engage personnel and to
provide services to competing investment companies; and
(11) the continuity of experience offered by the Companies' Boards.
The Boards concluded that they could not assess the relative weight given
to each factor in making their determinations. In reaching their determinations,
the Boards also considered the fact that the new advisory and sub-advisory
relationships are intended to conform to the safe harbor provided by Section
15(f) of the 1940 Act for new advisory and other arrangements arising from the
sale of fund management businesses such as Chancellor LGT's. Under the Purchase
Agreement, AMVESCAP has agreed to conduct its business and, subject to the
fiduciary duties of the Funds, to use its reasonable best efforts to cause each
of its affiliates to conduct its business so as to assure that, insofar as is
within AMVESCAP's or its affiliates' control (i) for a period of three years
after the closing of the Purchase, at least 75% of the members of the Boards of
the Companies would be Independent Board Members; and (ii) for a period of two
years after the closing of the Purchase, there would not be imposed on the Funds
an "unfair burden" (as defined in the 1940 Act) as a result of the Purchase.
The Boards also evaluated the New Management Agreements and the New
Sub-Advisory Agreements. The Boards assured themselves that the New Agreements
for each of the Funds, including the terms relating to the services to be
provided and the fees and expenses payable by each such Fund, are not materially
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different from the Current Management Contracts for each such Fund, except that
AIM rather than Chancellor LGT will be the investment manager and administrator
for each Fund and Chancellor LGT will be the sub-adviser and sub-administrator
for each Fund.
At the Board meetings held throughout February and March, 1998, the Boards
received presentations by AMVESCAP, AIM, INVESCO, Chancellor LGT, and GT Global,
Inc. and considered each of the foregoing factors. During this time period, the
Independent Board Members also met separately and conferred with their counsel,
who is not counsel to the Funds, AMVESCAP or its affiliates or Chancellor LGT or
its affiliates. Based upon these considerations, on March 24, 1998 the Boards
unanimously approved the New Management Agreements and the New Sub-Advisory
Agreements for the Funds and recommended approval by the shareholders.
TERMS OF THE NEW AGREEMENTS. If the New Agreements are approved by
shareholders as described herein, upon the closing of the Purchase, AIM will
serve as the investment manager and administrator to the Funds. With the
exception of the replacement of Chancellor LGT by AIM as the investment manager
and administrator, the New Management Agreements are substantially the same as
the Current Management Contracts in all material respects, except: (1) the New
Agreements are governed by Delaware law, while the Current Management Contracts
are governed by California law; (2) the New Management Agreement includes a
license provision that governs the use of the "AIM" name; the Current Management
Contracts contain no such provision; (3) the provision in Current Management
Contracts addressing oversight of Fund pricing and computation of net asset
value has been deleted from the New Agreements, since AIM and Chancellor LGT
will perform these functions directly; (4) a provision has been added to the New
Agreements allowing their amendment without shareholder approval when permitted
by the 1940 Act; (5) to reflect recent changes in governing federal and state
law, the New Management Agreements remove the state expense limitation
provisions found in the Current Management Agreements; and (6) the date of
effectiveness which, assuming Shareholder approval, would be on or about the
Closing Date.
AIM will be contractually obligated to provide the same services to each
Fund as are currently provided to each Fund by Chancellor LGT, in return for the
same advisory fees as are currently in place. AIM has further agreed that, for a
period of two years from the Closing Date, it will continue to limit each Fund's
expenses (exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rates noted on Exhibit E. As a result, the total
expenses incurred by Fund shareholders will remain capped at current levels for
two years following the closing of the Purchase.
Pursuant to the New Sub-Advisory Agreements, Chancellor LGT will serve as
sub-adviser and sub-administrator to the Funds upon approval of the Funds'
shareholders. Chancellor LGT would provide substantially all of the services for
the Funds that it currently provides. It would be paid sub-advisory fees by AIM,
not by the Fund.
Forms of the New Management Agreements and New Sub-Advisory Agreements are
attached hereto as Exhibits C and D. The descriptions of the New Agreements set
forth herein are qualified in their entirety by reference to Exhibits C and D.
Although the Current Management Contracts have not terminated and the New
Agreements have not become effective, the New Agreements are described below as
if they were both in effect.
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Under the New Management Agreements, AIM will:
(a) subject to the supervision of each Company's Board, provide a
continuous investment program for each Fund, including investment research and
management with respect to all securities and investments and cash equivalents
of each Fund;
(b) determine from time to time what securities and other investments will
be purchased, retained or sold by each Fund, and the brokers and dealers through
whom trades will be executed;
(c) oversee the maintenance of all books and records with respect to the
securities transactions of the Funds, and furnish the Board with such periodic
and special reports as the Board reasonably may request; and
(d) provide administrative services for each Fund subject to the
supervision of the Board. In this regard, AIM will supervise all aspects of the
operations of each Fund, including the oversight of custodial and other
services. At AIM's expense, AIM will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination of each Fund's prospectus,
statement of additional information, proxy material, tax returns and required
reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities. AIM
will provide the Companies and the Funds with, or obtain for them, adequate
office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items.
In performing its obligations under the New Management Agreements, AIM is
required to comply with all applicable laws. AIM shall not be liable and each
Fund shall indemnify AIM and its directors, officers and employees, for any
costs or liabilities arising from any error of judgment or mistake of law or any
loss suffered by the Funds or the Companies in connection with the matters to
which the New Management Agreements relate except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of AIM in the performance
by AIM of its duties or from reckless disregard by AIM of its obligations and
duties under the New Management Agreements. Any person, even though also an
officer, director, employee or agent of AIM, who may be or become an officer,
Board Member, employee or agent of a Company shall be deemed, when rendering
services to a Fund or a Company or acting with respect to any business of a Fund
or a Company, to be rendering such service to or acting solely for the Fund or
the Company and not as an officer, partner, employee, or agent or one under the
control or direction of AIM even though paid by it.
The New Management Agreements provide that all of the ordinary business
expenses not specifically assumed by AIM incurred in the operations of each of
the Funds and the offering of each of its shares shall be paid by each such
Fund. These expenses include but are not limited to brokerage commissions,
taxes, legal, accounting, auditing or governmental fees, custodian, transfer
agent and shareholder service agent costs. AIM will assume the cost of any
compensation for services provided to a Company received by the officers of the
Company and by the Trustees/Directors of the Company who are not Independent
Board Members.
Under the New Management Agreement with respect to New Dimension Fund, AIM
will be responsible for, and will delegate to Chancellor LGT, the daily
allocation and periodic rebalancing of the assets of New Dimension Fund among
several other Funds. AIM will receive no compensation for its services under the
New Management Agreement with respect to New Dimension Fund and also will bear
all expenses of New Dimension Fund other than expenses received pursuant to New
Dimension Fund's Rule 12b-1 plan and non-recurring extraordinary expenses until
such time as the Fund enters into an agreement whereby certain expenses may be
borne by the Funds in which it invests.
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The New Management Agreements for all Funds provide that, subject to the
approval of the Board of the applicable Company and the shareholders of the
applicable Fund, AIM may delegate any and all of its duties to a sub-adviser or
sub-administrator, provided that AIM shall continue to supervise the performance
of any such sub-adviser or sub-administrator. In this regard, AIM will enter
into New Sub-Advisory Agreements with Chancellor LGT. Pursuant to the New
Sub-Advisory Agreements, AIM intends to delegate all of its duties under the New
Management Agreements to Chancellor LGT. The New Sub-Advisory Agreements are
substantially the same in all material respects to the New Management
Agreements, and the description above of the duties and services to be performed
by AIM will apply to Chancellor LGT as Sub-Adviser and Sub-Administrator to the
Funds.
Information with regard to the fees payable under each of the New
Management Agreements and the aggregate management and administration fees paid
to Chancellor LGT in each Fund's most recently completed fiscal year is as set
forth in Exhibit E.
With respect to any Fund, the New Management Agreement and the New
Sub-Advisory Agreement may be terminated at any time without penalty by vote of
the applicable Board or by a vote of a majority of the outstanding voting
securities of the applicable Fund, on 60 days' written notice to AIM or
Chancellor LGT, respectively, or by AIM or Chancellor LGT, respectively, at any
time without penalty on 60 days' written notice to the applicable Company. Each
of the New Agreements will terminate automatically in the event of any
assignment, as defined by the 1940 Act. The New Agreements 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 Board Members, 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 the applicable Fund.
ADDITIONAL SERVICES PROVIDED BY AIM AND ITS AFFILIATES. In addition to
AIM's investment management and administrative responsibilities under the New
Management Agreement, it is anticipated that a number of AIM affiliates will
provide services to the Funds if this Proposal 2 is approved by shareholders.
A I M Distributors, Inc. ("AIM Distributors"), a wholly owned subsidiary
of AIM, would serve as the principal underwriter for each of the Funds and
would, if Proposal 2 is approved by shareholders, offer Shares of the Funds. If
this Proposal 2 is approved by shareholders, the sales charge schedule
applicable on purchases of Class A Shares would be modified as set forth in
Exhibit G, in order to conform with the sales charge schedule imposed by
comparable funds distributed by AIM Distributors. As a result of this change,
the sales charge schedule for Class A Shares would generally be higher than it
currently is for the following funds - Europe Fund, Growth and Income Fund,
International Fund, Japan Fund, Pacific Fund, Worldwide Fund, America Mid Cap
Fund, America Small Cap Fund, and America Value Fund - with the maximum sales
charge increasing from 4.75% to 5.50% of the amount of the purchase. The maximum
applicable sales charge for Class A Shares of the remaining Funds would remain
at 4.75%, but Class A Shares purchased in amounts above $100,000 generally would
incur sales charges somewhat higher than those previously in effect. In
addition, a contingent deferred sales charge of 1% would be applied to purchases
of Class A Shares of $1,000,000 or more that are purchased without a front-end
sales charge and are redeemed within 18 months of the date of purchase. The
changes in initial sales charges will apply only to purchases of Class A Shares
by new and existing shareholders after the Closing Date. See Exhibit G. The
schedule of sales load waivers would also change somewhat for new purchases of
Class A, Class B, and Class C (of Series Trust) Shares. Existing shareholders
would continue to pay any applicable CDSCs to AIM Distributors for shares that
were sold by or attributable to the distribution efforts of GT Global. The
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offering of Advisor Class Shares would not be affected by the proposed new
arrangements. Of course, the public offering arrangements for the Funds are
subject to revision at any time.
If Proposal 3 is approved by shareholders, each of the Funds will have a
new distribution plan under Rule 12b-1 of the 1940 Act (each, a "Proposed Plan")
with respect to certain of its classes of shares. Pursuant to each Proposed
Plan, each such Fund will make payments to AIM Distributors in connection with
the distribution of the appropriate Class of the Fund's shares and the provision
of ongoing services to shareholders. The annualized fees will be calculated as a
percentage of the average daily net assets attributable to a class of shares.
AIM Distributors will pay a portion of the Rule 12b-1 fees that it receives to
the brokers, dealers, agents and other service providers with whom it has
entered into agreements and who offer shares of the Funds for sale or provide
customers or clients certain continuing services.
The amounts payable by a Fund under each Proposed Plan need not be
directly related to the expenses actually incurred by AIM Distributors on behalf
of each Fund. Thus, even if AIM Distributors' actual expenses exceed the fee
payable to AIM Distributors thereunder at any given time, the Funds will not be
obligated to pay more than that fee. If AIM Distributors' expenses are less than
the fee it receives, AIM Distributors will retain the full amount of the fee.
Based on representations provided by AIM Distributors, the Boards expect that
AIM Distributors will incur expenses for its service and distribution activities
that will exceed the maximum fees payable by the Funds under each Proposed Plan.
For more complete information, see Proposal 3 below.
The agreements pursuant to which GT Global, Inc. serves as principal
underwriter for the Funds will terminate as a result of the Purchase. The Boards
have approved new agreements, consistent with the description above, pursuant to
which AIM Distributors would serve as principal underwriter for the Funds' Class
A, Class B, Class C and Adviser Class Shares. Under the 1940 Act, such
agreements do not require the approval of shareholders before they become
effective. Such agreements will become effective on or about the Closing Date if
this Proposal 2 is approved by Shareholders.
It is currently anticipated that during September, 1998, A I M Fund
Services, Inc. ("AIM Services"), a wholly owned subsidiary of AIM, would
commence serving as transfer agent for the Funds. GT Global Investor Services,
Inc. will continue to serve as transfer agent for the Funds until AIM Services
assumes that role.
The agreements pursuant to which Chancellor LGT serves as accounting and
pricing agent for the Funds will also terminate as a result of the Purchase. The
Board has approved new fund accounting and pricing agent agreements, through
which AIM will serve as fund accounting and pricing agent. AIM intends to
delegate substantially all of its responsibilities as fund accounting and
pricing agent to Chancellor LGT. Under the 1940 Act, such agreements do not
require the approval of shareholders before they become effective. Such
agreements will become effective on or about the Closing Date if this Proposal 2
is approved by Shareholders.
INFORMATION CONCERNING AMVESCAP, AIM AND CHANCELLOR LGT. AMVESCAP, along
with its subsidiaries, is one of the largest independent investment management
organizations in the world. The AMVESCAP group of companies (through the AIM and
INVESCO brand names) offers a broad array of investment products and services to
institutions and individuals. As of December 31, 1997, AMVESCAP and its
subsidiaries had approximately $192 billion under management. AMVESCAP's
worldwide investment team consists of approximately 330 investment professionals
located in major financial centers, and includes larger investment teams in
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Atlanta, Boston, Dallas, Denver, Hong Kong, Houston, London, Louisville, Miami,
Portland (Oregon), and Tokyo. The expertise, personnel, data and systems of
AMVESCAP's worldwide investment team, as well as the ongoing resources of
Chancellor LGT, will be available to AIM and Chancellor LGT in their management
and administration of the Funds. The corporate headquarters of AMVESCAP are
located at 11 Devonshire Square, London EC2M 4YR, England.
AIM was organized in 1976 and, together with its affiliates, currently
advises over 50 investment company portfolios (the "AIM Funds"). As of December
31, 1997, the total assets of the AIM Funds were approximately $83 billion. AIM
is a wholly owned subsidiary of A I M Management Group Inc. ("AIM Management").
Certain of the Directors and officers of AIM are also Trustees/Directors and
executive officers of the AIM Funds. The address of AIM, all of the Directors of
AIM, AIM Distributors, AIM Services, and AIM Management, is 11 Greenway Plaza,
Suite 100, Houston, TX 77046-1173.
Chancellor LGT currently provides investment management and/or
administration services to the Funds. Chancellor LGT and its worldwide asset
management affiliates have provided investment management and/or administrative
services to institutional, corporate and individual clients around the world
since 1969. As of December 31, 1997, Chancellor LGT and its worldwide affiliates
managed approximately $54 billion in assets. In the United States, as of
December 31, 1997, Chancellor LGT managed or administered approximately $8
billion of assets of the Funds and several other registered investment
companies, including three closed-end funds, and sub-advised one other
registered investment company. In addition to the investment resources of its
San Francisco and New York offices, Chancellor LGT draws upon the expertise,
personnel, data and systems of other investment offices of LGT's Asset
Management Division in Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Funds, Chancellor LGT generally employs a team
approach, taking advantage of its investment resources around the world in
seeking each Fund's investment objective. The U.S. offices of Chancellor LGT are
located at 50 California Street, 27th Floor, San Francisco, CA 94111 and 1166
Avenue of the Americas, New York, NY 10036.
Chancellor LGT and its worldwide affiliates, including LGT Bank in
Liechtenstein, compose Liechtenstein Global Trust. Liechtenstein Global Trust is
a provider of global asset management and private banking products and services
to individual and institutional investors. Liechtenstein Global Trust is
controlled by the Prince of Liechtenstein Foundation, which serves as the parent
organization for the various business enterprises of the Princely Family of
Liechtenstein. The principal business address of the Prince of Liechtenstein
Foundation is Herrengasse 12, FL-9490, Vaduz, Liechtenstein.
EACH BOARD RECOMMENDS THAT
YOU VOTE FOR PROPOSAL 2.
PROPOSAL 3: APPROVAL OF REPLACEMENT RULE 12B-1 PLANS OF DISTRIBUTION
RELEVANT FUNDS. Proposal 3 applies to all Funds.
BACKGROUND. Each Company has adopted plans of distribution pursuant to
Rule 12b-1 under the 1940 Act with respect to the Class A and Class B shares of
each Fund and Series Trust has also adopted a plan of distribution pursuant to
Rule 12b-1 under the 1940 Act with respect to the Class C shares of New
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Dimension Fund (the "Existing Plans"). Investment Funds, Investment Portfolios,
and Growth Series, adopted their Existing Plans with respect to Class A and
Class B Shares on October 22, 1992, March 31, 1993, and March 31, 1993,
respectively, and each most recently amended their Existing Plans on July 7,
1993. Series Trust adopted its Existing Plans with respect to Class A and Class
B Shares on September 10, 1997 and with respect to Class C shares on December
31, 1997. The Existing Plans are intended to promote the sales of shares of the
respective classes of each Fund and to permit the Funds' current distributor, GT
Global, to pay third parties that distribute Shares and provide ongoing services
to Shareholders and that otherwise facilitate the administration and servicing
of shareholder accounts.
On ________, 1998, each Company's Board approved the Proposed Plans and
authorized their submission to Class A and Class B shareholders of each Fund and
also to Class C shareholders of Series Trust for approval. The Proposed Plans
are substantially identical to the plans adopted by other investment companies
for which AIM Distributors provides shareholder and distribution services.
Nonetheless, the nature of the shareholder services and distribution services
for each Class of each Fund and the payments for those services by the Fund
under the Proposed Plans are, in most respects, generally similar to the
Existing Plans. The three main differences between the Proposed Plans and the
Existing Plans are that (1) AIM Distributors, instead of GT Global, would
provide, or arrange for third parties to provide, shareholder and distribution
services to the Funds and their shareholders and would receive payments for
those services, (2) the Proposed Plans are compensation-type plans, rather than
reimbursement-type plans as is the case for the Existing Plans, and (3) each of
the Proposed Plans for Class B shares provides for the continuation of payments
to the distributor with respect to that portion of a Fund's Class B shares that
were sold by or attributable to the distribution efforts of AIM Distributors (or
its predecessor, GT Global, Inc.), unless there is a "complete termination" of
the Proposed Plan.. Under a reimbursement plan, a distributor receives payment
for distribution and service-related expenses to the extent that the expenses
are actually incurred, and the distributor often may carry forward unreimbursed,
reimbursable expenses to be paid in subsequent years. By contrast, a distributor
under a compensation plan receives payment for its shareholder and distribution
services as a stated percentage of the net assets of a Class without matching
expenses incurred with payments received. These changes are more fully described
below. A third difference between the Proposed Plans and Existing Plans is
related to Class B Shares and pertains to arrangements which facilitate the
financing for payments made by AIM Distributors to dealers upon the sale of
Class B Shares.
The changes are proposed primarily so that the Class A, Class B, and Class
C distribution arrangements for the Funds, and the services provided to their
Class A, Class B, and Class C shareholders, can be made comparable to the
arrangements for, and level of services provided to the AIM Funds. The Proposed
Plans would allow shareholders to benefit from AIM Distributors' broader
distribution network and would give shareholders greater access to AIM
Distributors' resources for providing shareholder services. AIM Distributors has
over 450 employees dedicated to marketing funds with Class A, Class B, and Class
C shares, and total sales of these funds have averaged over $13 billion annually
over the past two years. In addition, with the adoption of the Proposed Plans,
Fund shareholders would be in position to obtain exchange privileges with the
corresponding class of the AIM Funds at approximately the same time that AIM
Services begins serving as transfer agent for the Funds. Such exchange
privileges would be unavailable to Class B shareholders of the Funds if the
Proposed Plans are not adopted because of requirements imposed by lenders to AIM
Distributors which provide financing for sales of Class B shares.
Copies of the Proposed Plans are attached to this Proxy Statement as
Exhibits H and I.
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THE EXISTING PLANS. To promote Fund sales and the administration and
servicing of shareholder accounts, each Fund, under the Existing Plans,
reimburses GT Global for its expenses incurred for its service and distribution
activities on behalf of such Fund.
Under the Existing Plans for Class A shares, the maximum aggregate annual
fees, expressed as a percentage of average daily net assets of Class A shares,
for which GT Global is reimbursed for its service and distribution activities
are as follows: 0.25% with respect to Dollar Fund; 0.35% with respect to
Government Income Fund, Strategic Income Fund, High Income Fund, Growth & Income
Fund, Pacific Fund, Europe Fund, Japan Fund, International Fund, Worldwide Fund,
America Mid Cap Fund, America Small Cap Fund, and America Value Fund; and 0.50%
with respect to Health Care Fund, Latin America Growth Fund, Telecommunications
Fund, Financial Services Fund, Emerging Markets Fund, Consumer Products and
Services Fund, Natural Resources Fund, Infrastructure Fund, and New Dimension
Fund. Each Fund reimburses GT Global at an annual rate of up to 0.25% of the
average daily net assets of Class A shares for expenditures incurred in
connection with GT Global's shareholder service activities ("service fee"). Each
Fund also reimburses GT Global for expenditures incurred in connection with GT
Global's distribution activities ("distribution fee"). The service and
distribution fees combined may not exceed the maximum aggregate annual fee
described above. GT Global may be reimbursed for expenses incurred with respect
to Class A shares for up to one year. During the fiscal year ended December 31,
1997, GT Global did not seek reimbursement of expenses with respect to Dollar
Fund.
Under each Existing Plan for Class B shares of the Funds and for Class C
shares of New Dimension, each Fund reimburses GT Global at the annual rate of up
to 0.25% of the average daily net assets of Class B shares for expenditures
incurred in connection with GT Global's shareholder service activities. Each
Fund also reimburses GT Global for expenditures incurred in connection with GT
Global's distribution activities at the annual rate of up to 0.75% of the
average daily net assets of Class B shares. Expenses incurred with respect to
Class B shares and Class C shares in excess of 1.00% annually may be carried
forward for reimbursement in subsequent years as long as the Existing Plan
continues in effect. Reimbursable expenses with respect to Class B shares and
Class C shares, however, are reduced by the proceeds from contingent deferred
sales charges received by GT Global. During the fiscal year ended December 31,
1997, GT Global limited reimbursement of expenses with respect to Dollar Fund to
an aggregate annual rate of 0.75% of the average daily net assets of Class B
Shares of Dollar Fund.
With respect to Class B shares and Class C shares (for New Dimension
Fund), each Fund treats as an expense all amounts accrued under the Existing
Plans during a year whether or not paid to reimburse GT Global during the same
year so that such accruals will be available to reimburse GT Global for
expenditures in subsequent periods. Expenditures in excess of amounts paid by
the Fund during a year are not charged as an expense for such year but are
charged in subsequent years as and if accrued and paid by the Fund. Therefore,
shareholders who purchase shares after the expenses have been incurred will
nevertheless contribute to payment thereof to the extent there remain such
carryover expenses, while shareholders who held shares when the expenses were
incurred but redeemed thereafter will not contribute to the reimbursement of any
carryover expenses outstanding at the date of redemption. If amounts are accrued
prior to purchase of shares by a shareholder and utilized before a shareholder
redeems, such shareholder will have contributed to distribution expenditures not
actually incurred while a shareholder.
Since the Existing Plans went into effect, GT Global has received from
each Class of a Fund reimbursement at the maximum levels permitted under the
Plans except as noted above with respect to Dollar Fund. The dollar amounts of
the payments by each Fund and Class thereof to GT Global are set out in Exhibit
J. In addition, as of _________________, 1998, the Funds, with the exception of
______, had carried forward reimbursable amounts with respect to Class B shares.
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The Funds also had reimbursable carryforward expenses for all Funds with respect
to Class A shares, and New Dimension Fund had carryforward expenses for its
Class C shares. Upon termination of the Existing Plans with respect to Class B
(and to Class C shares of New Dimension Fund), the Board may consider the
appropriateness of having Class B shares (and Class C shares of New Dimension
Fund) reimburse GT Global for the then outstanding carryforward expenses plus
interest thereon to the extent permitted by applicable law from the effective
date of the Existing Plan. GT Global has indicated that it will not seek
reimbursement for carryforward expenses with respect to Class B shares (or to
Class C shares of New Dimension Fund), nor, to the extent that it has any rights
to carryforward expenses with respect to Class A shares, will it seek
reimbursement of such expenses. However, the Funds will continue to pay
distribution and service fees, and the existing shareholders will continue to
pay CDSCs, to AIM Distributors for Class B shares (and Class C shares of New
Dimension Fund) that were sold by or attributable to distribution efforts of GT
Global.
APPROVAL AND TERMINATION PROVISIONS. Under its terms, each Existing Plan
will continue in effect with respect to each Class for so long as it is
specifically approved at least annually by a majority of a Company's Board,
including a majority of those Board Members who are not "interested persons" of
the Company as defined in the 1940 Act, and who have no direct or indirect
financial interest in the operation of the Plan or any agreement related to the
Plan ("Plan Directors"), unless terminated by vote of a majority of the Plan
Directors, or by vote of a majority of the outstanding voting securities of that
class of the Fund. Each Existing Plan may not be amended to increase materially
the limit upon reimbursement of expenses described above unless approved by a
majority of the Board and of the Plan Directors and by a majority of the
outstanding voting securities of the applicable class of the Fund, and no other
material amendment to an Existing Plan may be made unless approved by a majority
of the entire Board and the Plan Directors. Any agreements related to the
Existing Plans must be approved by a vote of a majority of a Company's entire
Board and of the Plan Directors. While the Existing Plans are in effect, the
selection and nomination of Board Members who are not interested persons of the
Company, as defined in the 1940 Act, will be at the discretion of the Board
Members who are not interested persons of the Company.
THE PROPOSED PLANS. As noted above, the Proposed Plans differ from the
Existing Plans in three principal respects. First, under the distribution
agreement between the Funds and AIM Distributors, AIM Distributors would succeed
GT Global as each Fund's distributor. Second, the Proposed Plans are
compensation-type plans rather than reimbursement-type plans. Under each
Proposed Plan, Class A and Class B shares of each Fund, and Class C shares of
New Dimension Fund, would pay AIM Distributors, as compensation for service and
distribution activities, a fee at the same annual rate as has been paid to GT
Global by, and as is set as the maximum rate for, each class under each Existing
Plan. However, the amounts payable by each Fund under the Proposed Plans would
no longer be directly matched with the expenses actually incurred by AIM
Distributors. [With respect to Dollar Fund, AIM Distributor intends to limit for
a period of at least two years the fees it receives in the same manner that GT
Global has limited the amount of its reimbursements.] Third, each of the
Proposed Plans for Class B shares provides for the continuation of payments to
the distributor with respect to that portion of a Fund's Class B shares that
were sold by or attributable to the distribution efforts of AIM Distributors (or
its predecessor, GT Global, Inc.), unless there is a "complete termination" of
the Proposed Plan. A "complete termination" would occur if: (i) the Plan
Directors, in making their determination to terminate the Fund's Proposed Plan
for the Class B shares, have acted in good faith and have determined that the
termination is in the best interest of the Fund and its shareholders, (ii) there
is no termination of the rights of AIM Distributors to receive contingent
deferred sales charges ("CDSCs") and (iii) unless AIM Distributors is in
material breach of its distribution agreement at the time the Class B shares
Proposed Plan is terminated, no payments under the Proposed Plan will be paid to
anyone (other than AIM Distributors) with respect to Class B shares previously
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sold. Moreover, the termination of a Proposed Plan with respect to Class B
shares would not affect the Fund's obligation to withhold and pay CDSCs.
In addition, in connection with its distribution arrangements for the AIM
Funds, AIM Distributors has entered into agreements with third parties to
provide shareholder and other services to the AIM Funds and to provide financing
for AIM Distributors' distribution activities with respect to Class B shares of
the AIM Funds. AIM Distributors has expressed its desire to enter into similar
agreements with respect to the Funds and to enter into similar financing
arrangements with respect to the Class B shares of the Funds. Without such
financing arrangements with respect to the Funds' Class B shares, AIM
Distributors would not be able to provide the same level of distribution
services to the Funds as it is able to provide to the AIM Funds. Moreover, the
absence of financing arrangements would preclude the Class B shareholders of the
Funds from having exchange privileges with Class B shares of the AIM Funds.
The Proposed Plans would promote consistency between the Funds and the AIM
Funds, which have a distribution structure similar to the structure in place for
the Funds. Eliminating significant differences between the distribution plans of
the AIM Funds and those of the Funds will create substantial uniformity in the
distribution network for the AIM Funds and the Funds. Such uniformity would make
it easier for AIM Distributors to provide comparable shareholder and
distribution services both to the Funds and to the AIM Funds. Fund shareholders
could benefit from the potential asset growth and retention facilitated by AIM
Distributors' broader and deeper distribution network, especially combined with
the distribution network and shareholder base already familiar with the GT
Funds.
The proposed compensation plans would provide other benefits as well,
including greater flexibility and ease of administration and accounting than
reimbursement plans. Under reimbursement plans, all expenses must be
specifically accounted for and attributed to the investment company under the
Plan for purposes of reimbursement. Compensation plans require quarterly general
reporting to a Board of the amounts accrued and paid under the Plan and of the
expenses actually borne by the recipient during the same period. Generally,
however, there need be no matching of expenses paid for reimbursements and no
carryforward of such amounts, as under reimbursement plans. Thus, the accounting
for such compensation plans is simplified.
Compensation plans also could enhance a distributor's ability to provide
services without regard to the precise timing of the services, which would not
necessarily be the case under reimbursement plans. Under a compensation plan, a
distributor has more latitude to determine the timing of expenditures in order
to provide the greatest benefit to the funds.
Because AIM Distributors will receive its fees for distribution activities
and service activities at the rates described above irrespective of its actual
expenditures incurred in connection with its distribution and service
activities, AIM Distributors could realize a profit if its expenses were less
than the amounts it received. On the other hand, if AIM Distributors' expenses
were greater than the amounts it received, AIM Distributors could realize a
loss. The Proposed Plans thus present the possibility that AIM Distributors may
profit from its activities on behalf of a Fund. AIM Distributors has
represented, however, that in the past for the AIM Funds, it has spent
substantially more than it has received for the distribution of shares of the
AIM Funds. It also has represented that it fully expects to spend more on
shareholder servicing and distribution than it would receive under the Proposed
Plans. The Boards expect that the type of services that AIM Distributors will
provide and oversee will remain essentially the same as under the Existing Plans
and that the level of services is likely to be enhanced compared to the Existing
Plans. The Boards also expect that the type and level of expenses AIM
Distributors will incur on behalf of a Fund will remain essentially the same as
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under the Existing Plans and that the amounts actually paid by each Fund to AIM
Distributors will be the same as the payments made to GT Global.
Each Class of each Fund would pay AIM Distributors, as compensation for
service activities, a fee at the annual rate of 0.25% of the average daily net
assets of the Fund attributable to such Class. In addition, each Class of each
Fund would pay AIM Distributors, as compensation for distribution activities, a
fee that, combined with the 0.25% service fee, would equal the maximum aggregate
annual fee payable under the Existing Plans.
The Proposed Plans, if approved by shareholders, will remain in effect for
one year from the date of such approval, and thereafter from year to year so
long as they are approved by a majority of a Company's Board, including a
majority of the Plan Directors, unless sooner terminated according to its terms.
As described above, there are special provisions with respect to the termination
of each of the Proposed Plans for the Class B shares of the Funds.
BOARD CONSIDERATIONS. The Boards' chief consideration in recommending the
Proposed Plans is that the AIM Funds currently use substantially identical plans
and that the Proposed Plans would therefore promote uniformity among the
combined AIM/GT Global Funds. Such uniformity would provide the Funds with
access to a broader distribution network and to enhanced shareholder services,
including exchange privileges with the AIM Funds at such time as AIM Services
becomes transfer agent to the GT Global Funds. Also as part of the consideration
of the Proposed Plans, GT Global presented a survey of the fund industry which
indicated the prevalence of compensation-type plans over reimbursement-type
plans and identified the benefits of flexibility in timing when distribution
expenses are incurred and simplification of plan administration and accounting
that would be provided under the Proposed Plans. The Boards also considered the
fact that, although the Proposed Plans could potentially result in AIM
Distributors realizing a profit, the current distributor, GT Global, has been
reimbursed at the maximum rates under the Existing Plans since those plans were
established. Based on representations provided by AIM Distributors, the Boards
also expect that, under the Proposed Plans, AIM Distributors will spend more on
shareholder servicing and distribution than it would receive under the Proposed
Plans. The Proposed Plans will not increase payments by the Funds for these
services.
In addition, in evaluating the Proposed Plans, the Boards considered the
following factors: (1) the need for independent counsel or experts to assist the
Board Members in reaching their determination; (2) the nature of the problems or
circumstances which make implementation of the Proposed Plans necessary or
appropriate; (3) the causes of such problems or circumstances; (4) the way in
which the Proposed Plans address these problems or circumstances and how it can
be expected to resolve or alleviate them, the nature of the anticipated
benefits, and the time it would take for those benefits to be achieved; (5) the
merits of possible alternative plans; (6) the interrelationship between each
Proposed Plan and the activities of any other person who finances distribution
of a Fund's shares, including whether any payments by the Fund to such other
person are made in such a manner as to constitute the indirect financing of
distribution by the Fund; (7) the possible benefits of the Proposed Plans to any
other person relative to those expected to inure to the Funds; (8) the effect of
the Proposed Plans on existing shareholders; and (9) whether the Existing Plans
have in fact produced benefits for the Funds and shareholders. Following their
consideration, the Boards, including the Plan Directors, concluded that each of
the Proposed Plans is in the best interest of the Funds and is reasonably likely
to benefit the shareholders.
REQUIRED VOTE. Class A and Class B shares of each Fund, and Class C shares
in the case of New Dimension Fund, will vote separately on the applicable
Proposed Plan for that Fund and Class. Approval of a Proposed Plan with respect
to a Class of a Fund requires the favorable vote of a majority of the
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outstanding voting securities of that Class. As defined by the 1940 Act, a
majority of the outstanding voting securities means the lesser of (a) 67% of the
shares present at a meeting of shareholders if the owners of more than 50% of
the shares then outstanding are present in person or by proxy or (b) more than
50% of the outstanding shares. If Proposal 3 is not approved by a Class of a
Fund, the Existing Plan will remain in effect for that Class and the Board will
consider what other action, if any, to take.
EACH BOARD RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 3
PROPOSAL NO. 4: APPROVAL OF CHANGES TO CERTAIN FUNDAMENTAL INVESTMENT
RESTRICTIONS OF EACH FUND
RELEVANT FUNDS. Changes are proposed to the fundamental investment
restrictions ("fundamental restrictions") of all Funds, but some of the proposed
changes apply only to certain Funds. See "Proposed Changes," below, for listings
of the Funds to which each specific change applies.
BACKGROUND. Pursuant to the 1940 Act, each Fund has adopted certain
fundamental restrictions, which may be changed only with shareholder approval.
Restrictions and policies that a Fund has not specifically designated as being
fundamental are considered to be "non-fundamental" and may be changed by the
appropriate Company's Board without shareholder approval.
Several of the fundamental restrictions that the Funds have adopted
reflect regulatory, business or industry conditions, practices or requirements
that are no longer in effect. For example, the National Securities Markets
Improvement Act of 1996 ("NSMIA") preempted state "blue sky" laws, under which
the Funds previously were regulated and which required the adoption of certain
restrictions. In addition, other fundamental restrictions reflect federal
regulatory requirements that remain in effect but are not required to be stated
as fundamental, or in some cases even as non-fundamental, restrictions. Also, as
new Funds have been created over a period of years, substantially similar
fundamental restrictions often have been phrased in slightly different ways,
sometimes resulting in minor but unintended differences in effect or potentially
giving rise to unintended differences in interpretation.
Accordingly, the Boards have approved revisions to the Funds' fundamental
restrictions in order to simplify, modernize and make more uniform those
restrictions that are required to be fundamental. In several instances, existing
fundamental restrictions that are eliminated because they are not required to be
fundamental would be re-classified as non-fundamental restrictions. In addition,
in several other instances, Funds already have similar non-fundamental
restrictions, for which no change is proposed. However, non-fundamental
restrictions may be changed by the Boards without shareholder approval.
The Boards believe that eliminating the disparities among the Funds'
fundamental restrictions will enhance management's ability to manage efficiently
and effectively the Funds' assets in changing regulatory and investment
environments. In addition, by reducing to a minimum those restrictions that can
be changed only by shareholder vote, each Fund will be able to avoid the costs
and delays associated with a shareholder meeting if its Board decides to make
future changes to its investment policies. Although the proposed changes in
fundamental restrictions will allow the Funds greater investment flexibility to
respond to future investment opportunities, the Boards do not anticipate that
the changes, individually or in the aggregate, will result at this time in a
material change in the level of investment risk associated with an investment in
any Fund or the manner in which any Fund is currently managed.
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As noted previously, Financial Services Fund, Infrastructure Fund, Natural
Resources Fund, Consumer Products and Services Fund, High Income Fund, America
Small Cap Fund, and America Value Fund each seeks its investment objective by
investing all of its investable assets in another open-end fund (each, a
"Portfolio"). Each of these Funds and its corresponding Portfolio have identical
fundamental restrictions. A vote to approve changes in the investment
limitations of these Funds also would be a vote to approve changes to the
identical investment limitations for the Portfolios.
PROPOSED CHANGES. The following is the text and a summary description of
the proposed changes to the Funds' fundamental restrictions, together with the
text of those non-fundamental restrictions that would be adopted in connection
with the elimination of certain of the Funds' current fundamental restrictions.
The text below also describes those fundamental restrictions that are being
eliminated for which no corresponding non-fundamental restriction is being
proposed. Any non-fundamental restriction may be modified or eliminated by the
appropriate Board at any future date without any further approval of
shareholders. Shareholders may request from the Funds a copy of the Funds'
Statements of Additional Information for the text of the Funds' existing
fundamental restrictions, by calling 800-xxx-xxxx. Shareholders should note that
for some Funds certain of the fundamental restrictions that are treated
separately below currently are combined within a single existing fundamental
restriction.
With respect to each Fund and each existing or proposed fundamental or
non-fundamental restriction, if a percentage restriction is adhered to at the
time of an investment or transaction, a later increase or decrease in percentage
resulting from a change in the values of the Fund's portfolio securities or the
amount of its total assets will not be considered a violation of the
restriction.
A. MODIFICATION OF FUNDAMENTAL RESTRICTION ON PORTFOLIO DIVERSIFICATION.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds except Latin America
Growth Fund, Growth & Income Fund, Government Income Fund, Strategic Income
Fund, High Income Fund and Developing Markets Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on portfolio diversification for each of the
above-referenced Funds would be modified as follows:
"The Fund will not purchase securities of any one issuer if, as a
result, more than 5% of the Fund's total assets would be invested in
securities of that issuer or the Fund would own or hold more than 10% of
the outstanding voting securities of that issuer, except that up to 25% of
the Fund's total assets may be invested without regard to this limitation,
and except that this limitation does not apply to securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities or to
securities issued by other investment companies."
DISCUSSION: The Funds to which this change would apply are "diversified"
funds under the 1940 Act and, accordingly, must have a fundamental restriction
or policy establishing percentage limitations with respect to investments in the
securities of any one issuer. These Funds have stated their diversification
restriction in several different ways. For example, the current diversification
restriction of certain Funds does not reflect the statutory exceptions for
investments in securities of government agencies or of other investment
companies. The proposed changes to the Funds' fundamental restriction on
portfolio diversification would eliminate minor inconsistencies in the wording
of the Funds' current restrictions but would not change the Funds' existing
restriction substantially.
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B. MODIFICATION OF FUNDAMENTAL RESTRICTION ON CONCENTRATION.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds except Consumer Products and
Services Fund, Financial Services Fund, Health Care Fund, Infrastructure Fund,
Natural Resources Fund, Telecommunications Fund and New Dimension Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on concentration for each of the above-referenced
Funds would be modified as follows:
"The Fund will not purchase any security if, as a result of that
purchase, 25% or more of the Fund's total assets would be invested in
securities of issuers having their principal business activities in the
same industry, except that this limitation does not apply to securities
issued or guaranteed by the U.S. government, its agencies or
instrumentalities."
DISCUSSION: The proposed changes to the above-referenced Funds'
fundamental restriction on concentration would eliminate minor inconsistencies
in the wording of the Funds' current restrictions on concentration.
C. MODIFICATION OF FUNDAMENTAL RESTRICTION ON ISSUING SENIOR SECURITIES
AND BORROWING MONEY.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on issuing senior securities and borrowing money for
each Fund would be modified as follows:
"The Fund will not issue senior securities or borrow money, except
as permitted under the 1940 Act and then not in excess of 33 1/3% of the
Fund's total assets (including the amount borrowed but reduced by any
liabilities not constituting borrowings) at the time of the borrowing,
except that the Fund may borrow up to an additional 5% of its total assets
(not including the amount borrowed) for temporary or emergency purposes."
DISCUSSION: The 1940 Act establishes limits on the ability of the Funds to
borrow money or issue "senior securities," a term that is defined, generally, to
refer to obligations that have a priority over the investment company's shares
of common stock or beneficial interest with respect to the distribution of its
assets or the payment of dividends. Currently, the fundamental restriction for
several of the Funds is more limiting than required by the 1940 Act. The current
fundamental restriction for Growth & Income Fund, Latin America Growth Fund and
Government Income Fund prohibits each of those Funds from borrowing except for
temporary or emergency purposes. The current fundamental restriction for Growth
& Income Fund and Latin American Growth Fund also prohibits those Funds from
purchasing any security while borrowings in excess of 5% of each Fund's total
assets are outstanding. In addition, the current fundamental restriction for
Government Income Fund limits borrowing to 30% of the Fund's total assets and
prohibits the Fund from purchasing any security while any borrowings are
outstanding.
The proposed changes would make the Funds' restriction on borrowing money
or issuing senior securities no more limiting than required by the 1940 Act. The
Boards believe that changing the Funds' fundamental restrictions in this manner
will provide flexibility for future contingencies. However, the Boards do not
intend the change to affect the Funds' current operations. Accordingly, the
fundamental limitation of Government Income Fund, Latin America Growth Fund and
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Growth & Income Fund that prohibits these Funds from borrowing except for
temporary or emergency purposes will continue in effect as a non-fundamental
policy. Moreover, the fundamental limitation of Latin America Growth Fund and
Growth & Income Fund that prohibits these Funds from purchasing portfolio
securities when borrowings exceed 5% of total assets will continue in effect as
a non-fundamental policy. The non-fundamental policy for Government Income Fund
would be modified to permit it to purchase securities while borrowings of up to
5% of the Fund's total assets are outstanding. This change would give Government
Income Fund more flexibility to borrow in order to meet redemption requests. The
proposed change would also result in immaterial wording changes to New Dimension
Fund's fundamental restriction on borrowing.
Strategic Income Fund and High Income Fund, each may borrow for
investment purposes. The proposed change to these Funds' fundamental restriction
on borrowing will not affect their ability to borrow for investment purposes but
will eliminate minor differences in the wording of these Funds' current
restriction. In addition, the fundamental restriction of Dollar Fund currently
states that the Fund "may not issue senior securities." Although this
fundamental restriction will be changed as described above, Dollar Fund does not
currently intend to borrow money under any circumstances.
Government Income Fund, Strategic Income Fund, High Income Fund, Growth &
Income Fund and Latin America Growth Fund, as part of their fundamental
restriction on borrowing, include as part of their restriction an undertaking
that they will reduce their borrowings within three days if the asset coverage
for each Fund's borrowings falls below 300%. The proposed fundamental
restriction eliminates this undertaking. Nevertheless, the 1940 Act will
continue to impose this requirement on all of the Funds.
D. MODIFICATION OF FUNDAMENTAL RESTRICTION ON MAKING LOANS.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds except New Dimension
Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on making loans for each Fund would be modified as
follows:
"The Fund will not make loans, except through loans of portfolio
securities or through repurchase agreements, provided that for purposes of
this limitation, the acquisition of bonds, debentures, other debt
securities or instruments, or participations or other interests therein
and investments in government obligations, commercial paper, certificates
of deposit, bankers' acceptances or similar instruments will not be
considered the making of a loan."
DISCUSSION: The proposed changes to this fundamental restriction would
eliminate minor differences in the wording of the Funds' current restriction on
making loans. In addition, the proposed restriction more completely describes
various types of debt instruments the Funds may purchase that do not constitute
the making of a loan.
In addition, Dollar Fund's current fundamental restriction on loans
contains an exception for loans "pursuant to contracts providing for the
compensation of service provided by compensated balances." This exception
applies to an arrangement whereby a fund reduces its custodian expenses through
its securities lending activities. In order to make the Funds' fundamental
restrictions more uniform, this language will be deleted. Deletion of this
language is not intended to affect the ability of the Dollar Fund to engage the
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activity covered by the language. Similarly, this restriction is not intended to
affect the ability of each Fund to engage in this activity.
E. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds except New Dimension
Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on underwriting securities for each Fund would be
modified as follows:
"The Fund will not engage in the business of underwriting securities
of other issuers, except to the extent that the Fund might be considered
an underwriter under the federal securities laws in connection with its
disposition of portfolio securities."
DISCUSSION: The proposed changes to this fundamental restriction would
eliminate minor differences in the wording of the Funds' current restriction
on underwriting securities.
F. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds except New Dimension
Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on real estate investments for each Fund would be
modified as follows:
"The Fund will not purchase or sell real estate, except that
investments in securities of issuers that invest in real estate and
investments in mortgage-backed securities, mortgage participations or
other instruments supported by interests in real estate are not subject to
this limitation, and except that the Fund may exercise rights under
agreements relating to such securities, including the right to enforce
security interests and to hold real estate acquired by reason of such
enforcement until that real estate can be liquidated in an orderly
manner."
DISCUSSION: The proposed changes to this fundamental restriction would
eliminate minor differences in the wording of the Funds' current restriction on
real estate investments and would clarify the types of real estate related
securities that are permissible investments for each Fund. In addition, the
proposed restriction includes an exception that permits each Fund to hold real
estate acquired as a result of ownership of securities or other interests.
Consumer Products and Services Fund, Financial Services Fund,
Infrastructure Fund, Natural Resources Fund, Telecommunications Fund, Latin
America Growth Fund, Growth & Income Fund, Government Income Fund, Strategic
Income Fund, High Income Fund and Developing Markets Fund currently provide that
the Fund may not "purchase or sell real estate, including real estate limited
partnerships." The proposed restriction eliminates the reference to real estate
limited partnerships. Thus, if the proposed change is approved, all of the Funds
would be able to invest in real estate limited partnerships. However, for
various tax reasons, the Funds do not intend to invest in real estate limited
partnerships. If such investments become available in the future, they still
would have to comply with a Fund's investment objective, policies and
limitations.
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G. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN COMMODITIES.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds except New Dimension Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on investing in commodities for each Fund would be
modified as follows:
"The Fund will not purchase or sell physical commodities, but the
Fund may purchase, sell or enter into financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments."
DISCUSSION: The proposed changes to this fundamental restriction are
intended to ensure that the Funds will have the maximum flexibility to enter
into hedging and other transactions utilizing financial contracts and derivative
products when doing so is permitted by the Funds' investment policies and would
eliminate minor differences in the wording of the Funds' current restriction on
investing in commodities. Furthermore, the proposed restrictions would allow the
Funds to respond to the rapid and continuing development of derivative products.
The proposed restriction broadens the exception to the prohibition on buying and
selling physical commodities to cover all financial derivative instruments
rather than only financial futures and currency instruments.
The current fundamental restriction for Dollar Fund prohibits the Fund
from engaging in option transactions. If Proposal 4 is approved, this
restriction will be deleted and the Fund would have greater flexibility to
engage in option transactions. Dollar Fund, however, has no present intention of
engaging in option transactions. Moreover, Dollar Fund is subject to regulation
as a money market fund under Rule 2a-7 under the 1940 Act, which imposes
significant restrictions on the types of securities in which Dollar Fund can
invest.
H. ELIMINATION OF FUNDAMENTAL RESTRICTION ON MARGIN TRANSACTIONS.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds except New Dimension Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing fundamental
restriction on engaging in margin transactions for each Fund would be eliminated
and each Fund would become subject to the following non-fundamental restriction:
"The Fund will not purchase securities on margin, provided that the
Fund may obtain short-term credits as may be necessary for the clearance
of purchases and sales of securities, and further provided that the Fund
may make margin deposits in connection with its use of financial options
and futures, forward and spot currency contracts, swap transactions and
other financial contracts or derivative instruments."
DISCUSSION: The Funds are not required to have a fundamental restriction
on margin transactions. Accordingly, it is proposed that the Funds' existing
fundamental restriction be replaced with a non-fundamental restriction. The
proposed non-fundamental restriction makes minor changes in wording from the
existing fundamental restriction and expands the list of margin transactions
excepted from the prohibition to include margin deposits in connection with
financial options and futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative instruments.
As discussed in Item S below, the current fundamental restriction on
margin transactions for Worldwide Fund, International Fund, Pacific Fund, Europe
Fund, America Mid Cap Fund, Japan Fund, America Small Cap Growth, America Value
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Fund, Dollar Fund and Health Care Fund is combined with a restriction on short
sales that prohibits those Funds from making short sales or maintaining short
positions except in connection with their use of options, futures contracts and
options on futures contracts. If Proposal 4 is approved, this restriction will
be deleted and the Funds would have greater flexibility to engage in short
sales. These Funds, however, have no present intention of engaging in short
sales. The current fundamental restriction on margin transactions for Dollar
Fund prohibits purchasing securities on margin. If Proposal 4 is approved, this
restriction will be deleted and the Fund would have greater flexibility to
engage in margin transactions. Dollar Fund, however, has no present intention of
engaging in margin transactions.
I. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN FUTURES
CONTRACTS.
FUNDS TO WHICH THIS CHANGE APPLIES: Government Income Fund and
Strategic Income Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing fundamental
restriction on engaging in futures contracts for Government Income Fund and
Strategic Income Fund would be eliminated and these Funds would become subject
to the following non-fundamental restriction:
"The Fund will not enter into a futures contract, if, as a result
thereof, more than 5% of the Fund's total assets (taken at market value at
the time of entering into the contract) would be committed to margin on
such futures contracts."
DISCUSSION: There is no legal requirement that Government Income Fund or
Strategic Income Fund have a fundamental restriction on this subject.
Accordingly, the Board believes that it should be made non-fundamental. The
non-fundamental restriction would be identical to the fundamental restriction
proposed to be eliminated and, thus, is not expected to have any impact on the
operations of the Funds. Establishing the restriction as non-fundamental,
however, would enable the Board to change this restriction in the future without
shareholder approval.
J. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN ILLIQUID
SECURITIES.
FUNDS TO WHICH THIS CHANGE APPLIES: Health Care Fund, Growth & Income
Fund and Government Income Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing fundamental
restriction on investing in illiquid securities for the above-referenced Funds
would be eliminated and these Funds would become subject to the following
non-fundamental restriction:
"The Fund will not purchase securities for which there is no readily
available market, or enter into repurchase agreements or purchase time
deposits maturing in more than seven days, or purchase OTC options or hold
assets set aside to cover OTC options written by the Fund, if immediately
after and as a result, the value of such securities would exceed, in the
aggregate, 15% of the Fund's net assets."
DISCUSSION: There is no legal requirement that these Funds have a
fundamental restriction on this subject. Accordingly, the Board believes that it
should be made non-fundamental. With respect to Growth & Income Fund and
Government Income Fund, the non-fundamental restriction would be identical to
the fundamental restriction proposed to be eliminated, except that the limit on
investing in illiquid securities would increase from 10% to 15% of each Fund's
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net assets. Moreover, Health Care Fund's current policy prohibits the Fund from
investing more than 10% of its total assets in securities "which cannot be
readily resold to the public because of legal or contractual restrictions" in
addition to securities for which there is no readily available market.
Increasing the percentage of illiquid securities that each Fund may hold from
10% to 15% should have only a minimal effect, if any, on the Funds' liquidity.
The non-fundamental restriction of Health Care Fund would change the wording to
make it consistent with the other Funds. This change is not expected to have a
significant impact on operations of the Fund. Establishing the restriction as
non-fundamental, however, would enable the Board to change this restriction in
the future without shareholder approval.
K. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PLEDGING ASSETS.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds except Developing
Markets Fund and New Dimension Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing fundamental
restriction on pledging assets for each Fund would be eliminated and the Funds
would become subject to the following non-fundamental restriction:
"The Fund will not mortgage, pledge, or hypothecate any of its
assets, provided that this shall not apply to the transfer of securities
in connection with any permissible borrowing or to collateral arrangements
in connection with permissible activities."
DISCUSSION: The Funds are not required to have a fundamental restriction
with respect to the pledging of assets. In order to maximize the Funds'
flexibility in this area, the Boards believe that the Funds' restriction on
pledging assets should be made non-fundamental. The non-fundamental restriction
would be similar to the fundamental restriction proposed to be eliminated.
Dollar Fund's non-fundamental restriction will no longer refer to an exception
for "borrowings as disclosed in the Prospectus" since this exception would be
covered under the uniform non-fundamental restriction. The Boards do not expect
this change to have any impact on the Funds' operations. Establishing the
restriction as non-fundamental, however, would enable the Board to change this
restriction in the future without shareholder approval.
L. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING SECURITIES ISSUED
BY OTHER INVESTMENT COMPANIES.
FUND TO WHICH THIS CHANGE APPLIES: Dollar Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on purchasing securities issued by other investment
companies for Dollar Fund would be eliminated.
DISCUSSION: There is no legal requirement that Dollar Fund have a
fundamental restriction on this subject. Moreover, Item U discussed below would
add a new fundamental investment policy permitting the Fund to invest all of its
investable assets in another open-end investment company. As discussed below,
this change would offer the Fund the ability to use alternative investment
structures. Accordingly, the Board believes this investment restriction should
be eliminated.
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M. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING COMMON STOCKS,
PREFERRED STOCKS, WARRANTS OR OTHER EQUITY SECURITIES.
FUND TO WHICH THIS CHANGE APPLIES: Dollar Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing fundamental
restriction on purchasing common stocks, preferred stocks, warrants or other
equity securities for Dollar Fund would be eliminated.
DISCUSSION: There is no legal requirement that Dollar Fund have a
fundamental restriction on this subject. Moreover, Dollar Fund is regulated as a
money market fund under Rule 2a-7 under the 1940 Act. Rule 2a-7 imposes
substantive restrictions on the types, quality, and maturities of the securities
in which Dollar Fund may invest. Accordingly, the Board believes that this
fundamental restriction is unnecessary and that it should be deleted. This
change is not expected to have any impact on the operations of the Fund.
N. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTMENTS IN OIL, GAS AND
MINERAL LEASES AND PROGRAMS.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds except Developing
Markets Fund and New Dimension Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on investments in oil, gas or minerals for each Fund
would be eliminated.
DISCUSSION: The Funds are not required to have a fundamental restriction
with respect to oil, gas or mineral investments. In order to maximize each
Fund's flexibility in this area, the Boards believe that each Fund's restriction
on oil, gas and mineral investments should be eliminated. This restriction was
imposed by state blue sky laws and NSMIA preempts that requirement.
Notwithstanding the elimination of this fundamental restriction, no Fund expects
to invest at this time in oil, gas and mineral leases and programs.
O. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING FOR THE PURPOSE OF
CONTROL.
FUNDS TO WHICH THIS CHANGE APPLIES: Health Care Fund, Growth & Income
Fund, Government Income Fund, Strategic Income Fund, Pacific Fund, Europe Fund,
Japan Fund, International Fund, Worldwide Fund, America Mid Cap Fund, America
Small Cap Fund, and America Value Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on investing for the purpose of control for each of
the above-referenced Funds would be eliminated.
DISCUSSION: The Boards propose to eliminate this fundamental restriction,
which prohibits each of the above-referenced Funds from investing in companies
for the purpose of exercising control or management. Elimination of this
restriction would clarify each Fund's ability to exercise freely its rights as a
shareholder of the companies in which it invests. No Fund, however, intends to
become involved in directing or administering the day-to-day operations of any
company. Certain other Funds have, and will continue to have, this restriction
as a non-fundamental restriction.
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Chancellor LGT believes that it should be able to communicate freely each
Fund's views as a shareholder on important matters of policy to a company's
management, its board of directors and its shareholders, when Chancellor LGT or
the Boards believe that such action or policy may affect significantly the value
of its investment. The activities that each Fund might engage in, either
individually or with others, include seeking changes in a company's direction,
seeking the sale of a company or a portion of its assets, or participating in a
takeover effort or in opposition to a takeover effort. Chancellor LGT believes
that each Fund currently may engage in such activities without necessarily
violating this fundamental restriction. Nevertheless, the existence of the
investment restriction might give rise to a claim that such activities did in
fact constitute investing for control or management.
P. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING SECURITIES OF
ISSUERS IN WHICH OFFICERS AND BOARD MEMBERS OF EACH COMPANY AND ITS
AFFILIATES OWN SECURITIES.
FUNDS TO WHICH THIS CHANGE APPLIES: Growth & Income Fund, Government
Income Fund, and Strategic Income Fund, Pacific Fund, Europe Fund, Japan Fund,
International Fund, Worldwide Fund, America Mid Cap Fund, America Small Cap
Fund, and America Value Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing fundamental
restriction on purchasing securities of issuers in which affiliates of the
Companies own securities for each of the above-referenced Funds would be
eliminated.
DISCUSSION: There is no legal requirement that the Funds have a
fundamental restriction on this subject. This restriction was imposed by state
blue sky laws and NSMIA preempted state law requirements. Moreover, the Boards
and Chancellor LGT do not believe this restriction provides any safeguards
against conflicts of interest that are not covered under the Funds' Code of
Ethics. Accordingly, the Boards believe this restriction should be eliminated.
Q. ELIMINATION OF FUNDAMENTAL RESTRICTION ON JOINT PARTICIPATION IN A
SECURITIES TRADING ACCOUNT.
FUNDS TO WHICH THIS CHANGE APPLIES: Pacific Fund, Europe Fund, Japan
Fund, International Fund, Worldwide Fund, America Mid Cap Fund, America Small
Cap Fund, and America Value Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on joint participation in a securities trading
account would be eliminated.
DISCUSSION: The above-referenced Funds currently have a fundamental
restriction against participation on a joint or joint and several basis in any
securities trading account. Joint activities by an investment company are
subject to regulation under the 1940 Act, and there is no legal requirement for
a Fund to have a fundamental restriction on this subject. In certain
circumstances, participation in joint trading accounts may be beneficial to the
Fund. In addition, it is contemplated that the Funds may participate in joint
trading accounts if shareholders approve the New Management Agreements described
in Proposal 2. Accordingly, the Boards wish to ensure that the Funds will not be
more limited with respect to such transactions than is required by law.
Accordingly, the Boards have determined that this restriction should be
eliminated both as a fundamental and as a non-fundamental restriction.
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R. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN SECURITIES OF
COMPANIES THAT HAVE BEEN IN OPERATION FOR LESS THAN THREE YEARS.
FUNDS TO WHICH THIS CHANGE APPLIES: Health Care Fund, Government Income
Fund and Strategic Income Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing fundamental
restriction on investing in securities of companies that have been in operation
for less than three years for each of the above-referenced Funds would be
eliminated.
DISCUSSION: No Fund is required to have a fundamental restriction with
respect to investing in securities of companies that have been in operation for
less than three years. In order to maximize each Fund's flexibility in this
area, the Board believes that each Fund's restriction on investments in such
companies should be eliminated. This limitation was imposed by state blue sky
laws and NSMIA preempts that requirement. Notwithstanding the elimination of
this fundamental restriction, each Fund expects to continue to invest less than
5% of its assets in securities of companies that, together with their
predecessors, have been in operation for less than three years.
S. ELIMINATION OF FUNDAMENTAL RESTRICTION ON SELLING SECURITIES SHORT.
FUNDS TO WHICH THIS CHANGE APPLIES: Government Income Fund, Strategic
Income Fund, Dollar Fund, Developing Markets Fund, Pacific Fund, Europe Fund,
Japan Fund, International Fund, Worldwide Fund, America Mid Cap Fund, America
Small Cap Fund, America Value Fund and Health Care.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing
fundamental restriction on selling securities short for the above-referenced
Funds would be eliminated.
DISCUSSION: No Fund is required to have a fundamental restriction with
respect to short sales of securities. In order to maximize the Funds'
flexibility in this area, the Boards believe that each Fund's restriction on
short sales of securities should be eliminated. This restriction was imposed by
state blue sky laws and NSMIA preempts that requirement. Notwithstanding the
elimination of this fundamental restriction, each Fund expects to continue not
to engage in short sales of securities, except to the extent that the Fund
contemporaneously owns or has the right to acquire at no additional cost
securities identical to, or convertible into or exchangeable for, those sold
short. Moreover, Dollar Fund, as a money market fund, is subject to substantive
regulation under Rule 2a-7 under the 1940 Act. Growth & Income Fund has and will
continue to have this restriction as a non-fundamental restriction.
T. ELIMINATION OF FUNDAMENTAL RESTRICTION ON DIVERSIFICATION REQUIRED BY
INTERNAL REVENUE CODE.
FUND TO WHICH THIS CHANGE APPLIES: High Income Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the existing fundamental
restriction on diversification required by the Internal Revenue Code of 1986, as
amended (the "Code") for High Income Fund would be eliminated.
DISCUSSION: This fundamental restriction is based on the diversification
test under the Code that High Income Fund must satisfy to qualify as a regulated
investment company. Chancellor LGT expects that the Fund will continue to
satisfy the diversification test of the Code. There is no legal requirement,
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however, that this diversification test be included as a fundamental restriction
of the Fund. Accordingly, the Board believes that this fundamental restriction
regarding diversification should be eliminated.
U. APPROVAL OF NEW FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTMENT OF
ALL OF EACH FUND'S ASSETS IN AN OPEN-END FUND.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds except Consumer Products
and Services Fund, Financial Services Fund, High Income Fund, Infrastructure
Fund, Natural Resources Fund, America Small Cap Fund, America Value Fund and
New Dimension Fund.
PROPOSED CHANGE: Upon the approval of Proposal 4, the following
fundamental investment policy on investing in an open-end fund would be added
for each of the above-referenced Funds:
"Notwithstanding any other investment policy of the Fund, the Fund
may invest all of its investable assets (cash, securities and receivables
related to securities) in an open-end management investment company having
substantially the same investment objective, policies and limitations as
the Fund."
DISCUSSION: As discussed above, Consumer Products and Services Fund,
Financial Services Fund, High Income Fund, Infrastructure Fund, Natural
Resources Fund, America Small Cap Fund, and America Value Fund each seeks its
investment objective by investing all of its investable assets in another
open-end fund. The Boards have approved, subject to shareholder approval, the
adoption of a new fundamental investment policy that would permit each of the
other Funds to invest its assets in a similar fashion. At present the Boards
have not considered any specific proposal to authorize a Fund to invest its
assets in this fashion. A Board will authorize investing a Fund's assets in
another open-end fund only if the Board first determines that is in the best
interests of such Fund and its shareholders.
The purpose of this proposal is to enhance the flexibility of each Fund
and permit it to take advantage of potential efficiencies in the future
available through investment in another open-end fund. This structure allows
several funds with different distribution pricing structures, but the same
investment objective, policies and restrictions, to combine their investments in
a pooled fund instead of managing them separately. This could lower the costs of
obtaining portfolio execution, custodial, investment advisory and other services
for the Fund and could assist in portfolio management to the extent the cash
flows of each investment vehicle offset each other or provide for less volatile
asset changes. Of course, such benefits may not occur.
At present, certain of the fundamental investment restrictions of each
Fund may prevent it from investing all of its assets in another registered
investment company and would require a vote of Fund shareholders before such a
structure could be adopted. To avoid the costs associated with a subsequent
shareholder meeting, the Boards recommend that shareholders vote to permit the
assets of any Fund to be invested in an open-end fund, without a further vote of
shareholders, but only if the applicable Board subsequently determines that such
action is in the best interests of the Fund and its shareholders. If the
shareholders approve this proposal, the fundamental restrictions of each Fund
that currently may prohibit investment in an open-end fund, in effect, would be
modified to permit such investment.
A Fund's methods of operation and shareholder services would not be
materially affected by its investment in an open-end fund, except that the
assets of the Fund might be managed as part of a larger pool. If a Fund invested
all of its assets in an open-end fund, it would hold only investment securities
issued by the open-end fund, and the open-end fund would invest directly in
individual securities of other issuers. The Fund otherwise would continue its
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normal operations. The applicable Board would retain the right to withdraw the
Fund's investments from the open-end fund, and the Fund then would resume
investing directly in individual securities of other issuers as it does
currently.
Chancellor LGT (and AIM, if Proposal 2 is approved) may benefit from the
use of this structure if, as a result, overall assets under management are
increased (since management fees are based on assets). Also, Chancellor LGT's
(and AIM's) expense of providing investment and other services to the Funds may
be reduced.
REQUIRED VOTE. Approval of each of the changes contemplated by Proposal 4
with respect to a Fund requires the affirmative vote of a "majority of the
outstanding voting securities" of that Fund, which for this purpose means the
affirmative vote of the lesser of (1) more than 50% of the outstanding shares of
the Fund or (2) 67% or more of the shares of the Fund present at the meeting if
more than 50% of the outstanding shares of the Fund are represented at the
meeting in person or by proxy. In addition to voting "for" or "against" the
entire Proposal 4, shareholders of any Fund also may vote against the changes
proposed with respect to specific fundamental restrictions applicable to their
Fund in the manner indicated on the proxy card.
If the proposed changes are approved by shareholders of the respective
Funds at the Special Meeting, those changes will be effective upon appropriate
disclosure being made in the Funds' prospectuses and statements of additional
information.
IF ONE OR MORE OF THE CHANGES CONTEMPLATED BY PROPOSAL 4 ARE NOT APPROVED
BY SHAREHOLDERS OF A FUND, THE RELATED EXISTING FUNDAMENTAL RESTRICTION(S) OF
THAT FUND WILL CONTINUE IN EFFECT FOR THAT FUND. DISAPPROVAL OF ALL OR PART OF
PROPOSAL 4 BY THE SHAREHOLDERS OF ONE FUND WILL NOT AFFECT ANY APPROVALS OF
PROPOSAL 4 THAT ARE OBTAINED WITH RESPECT TO ANY OTHER FUND.
EACH BOARD RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 4
PROPOSAL 5: APPROVAL OF AN AGREEMENT AND PLAN
OF CONVERSION AND TERMINATION FOR EACH COMPANY
RELEVANT FUNDS. Proposal 5 applies to all Funds.
BACKGROUND. Investment Funds and Investment Portfolios (each a
"Corporation") currently are organized as Maryland corporations, and Growth
Series and Series Trust (each an "Old Trust") currently are organized as
Massachusetts business trusts. The Board of each Company has approved an
Agreement and Plan of Conversion and Termination ("Plan"), each of which
provides for a series of transactions (collectively, a "Reorganization") to
convert each Fund of the applicable Company to a series ("New Fund") of a newly
created open-end management investment company organized as a business trust
("New Trust") under the Delaware Business Trust Act ("Delaware Act"). Under the
Plans, each Fund will transfer all its assets to a New Fund in exchange solely
for voting shares of beneficial interest in the New Fund and the New Fund's
assumption of all the Fund's liabilities. Attached to this Proxy Statement as
Exhibit K is a form of the Plan relating to the proposed Reorganization
involving the Funds of Investment Funds; the form of the Plan relating to each
other proposed Reorganization is identical in all material respects to Exhibit K
except for the names of the applicable Company and its Funds and the New Trust
and its New Funds.
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The Reorganizations are being proposed primarily to modernize the
organizational documents under which they operate. As noted above, Chancellor
LGT, AIM, and the Boards believe that a number of benefits will be available to
the Funds and their shareholders once these documents conform to those of the
AIM Funds. The operations of each New Fund following the Reorganization will be
substantially identical to those of its predecessor Fund, except that each New
Fund's advisory arrangements will conform to the changes proposed in Proposal 2;
the Rule 12b-1 plan for each New Fund will be substantially identical to the
proposed compensation-type Rule 12b-1 plans described in Proposal 3; and the
fundamental and non-fundamental restrictions of each New Fund will conform to
the changes proposed in Proposal 4. Finally, as described below, the Trust
Instruments for the New Trusts will differ from the Articles of Incorporation
and Declarations of Trust of the Companies in certain respects that are expected
to improve the Companies' operations.
In addition, after the Closing Date the class structure of the New Funds
will differ somewhat from the Funds' class structure. Unlike the Class B shares
of the Funds (other than New Dimension Fund), each New Fund's Class B shares
acquired after the closing will have a conversion feature pursuant to which
those shares will convert to Class A shares approximately eight years after
issuance; in the case of the Class B shares of New Dimension Fund, which
currently convert to Class A shares after approximately seven years, the
conversion period will increase from seven to eight years for shares acquired
after the closing. Moreover, each New Fund will have Class C shares, unlike the
Funds other than New Dimension Fund (which already has Class C shares).
REASONS FOR THE PROPOSED REORGANIZATIONS. The Reorganizations are being
proposed because, as noted above, Chancellor LGT, AIM, and the Boards believe
that the Delaware business trust form of organization offers a number of
advantages over both the Maryland corporate form of organization and the
Massachusetts business trust form of organization. As a result of these
advantages, the Delaware business trust form of organization has been
increasingly used by mutual funds, including many AIM Funds.
The Delaware business trust form of organization 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 business trust is subject to fewer
statutory requirements. Each New Trust will be governed primarily by the terms
of an Agreement and Declaration of Trust, which is its governing instrument
("Trust Instrument"), the form of which is attached to this Proxy Statement as
Exhibit L. In particular, each New Trust 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 a Corporation's Articles of Incorporation would typically require
shareholder approval. Under Delaware law, unless the Trust Instrument of a
Delaware business trust provides otherwise, amendments thereto 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 business
trust to delegate certain of its responsibilities. For example, the board of
trustees of a Delaware business 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
business trust to future contingencies. For example, the trustees may, without a
shareholder vote, change the Delaware business trust's domicile or form of
organization. Any exercise of this authority by the Directors of the Corporation
would require shareholder approval.
The Delaware business trust form of organization also offers some
advantages over the Massachusetts business trust form. In particular, with
respect to both business trust law and corporate law generally, Delaware offers
greater specificity in its law and greater certainty than does Massachusetts
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law. The Delaware Act also provides that shareholders of a Delaware business
trust will be entitled to the same limitation of personal liability extended to
stockholders of a Delaware corporation, while Massachusetts business trust law
does not limit the potential liability of Massachusetts business trust
shareholders. Delaware's limitation of liability may not be absolute, as it is
possible that a non-Delaware court would not uphold this provision of the
Delaware Act. However, the possibility of liability, which is remote for
Massachusetts business trust shareholders, appears to be even more remote for
Delaware business trust shareholders. [Finally, the Delaware business trust form
of organization has an advantage over both the Maryland corporation and
Massachusetts business trust forms in that the Delaware Act limits inter-series
liability in a multi-series business trust, so that the assets of one series of
a New Trust (I.E., a New Fund) expressly will be protected against claims by
creditors and shareholders of another series of that New Trust. The limit on
such inter-series liability for the Companies, under Maryland and Massachusetts
law, is not as clear.]
The Reorganizations will also have certain other effects on each Company,
its shareholders, and management, which are described below under "Certain
Comparative Information about the Corporations, Old Trusts, and New Trusts."
SUMMARY OF EACH PLAN. To accomplish the Reorganizations, each New Trust
will be formed as a Delaware business trust pursuant to a Trust Instrument, and
each New Fund will be established as a series of a New Trust. On the closing
date of the Reorganizations ("Closing Date"), each Fund will transfer all its
assets to a corresponding New Fund in exchange solely for a number of full and
fractional Class A, Class B, and Advisor Class shares (and, in the case of New
Dimension Fund, Class C shares) of the New Fund equal to the number of full and
fractional shares of the corresponding classes of the Fund then outstanding.
Immediately thereafter, each Fund will distribute those New Fund shares to its
shareholders in complete liquidation and will, as soon as practicable
thereafter, be dissolved. Upon completion of the Reorganizations, each
shareholder of each Fund will own 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 Fund.
Each Plan authorizes the applicable Company to acquire one share of each
class of each New Fund and, as the sole initial shareholder prior to the
Reorganization thereunder: (1) to elect the Company's Board Members as the
trustees of the New Trust to serve without limit in time, except as they may
resign or be removed by action of the New Trust's trustees or shareholders; (2)
to approve an investment management and administration agreement that will be
substantially identical to the New Management Agreement described in Proposal 2;
(3) to approve a sub-advisory agreement that will be substantially identical to
the New Sub-Advisory Agreement described in Proposal 2; (4) to approve a new
distribution contract and new plans of distribution pursuant to Rule 12b-1 under
the 1940 Act that will be substantially identical to the compensation-type
distribution plans described in Proposal 3; and (5) to ratify the selection of
Coopers & Lybrand, L.L.P., the Company's current accountants, as the New Trust's
independent certified public accountants.
Assuming approval of this Proposal 5 by shareholders, it is currently
contemplated that the Closing Date for each Reorganization will be May 29, 1998.
However, the Closing Date for one or more of the Reorganizations may be another
date if circumstances warrant.
The obligations of each Company and each New Trust under each Plan are
subject to various conditions stated therein. To provide against unforeseen
events, each Plan may be terminated or amended at any time prior to the closing
of the Reorganization thereunder by action of the Board of the applicable
Company, notwithstanding the approval of the Plan by the shareholders of the
Company. However, no amendments may be made that would materially adversely
affect the interests of shareholders of any Fund. Each Company and New Trust may
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at any time waive compliance with any condition contained in the Plan, provided
that the waiver does not materially adversely affect the interests of the
shareholders of any Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION AGREEMENT. Each Plan authorizes
the applicable Company, as the sole shareholder of the New Trust prior to the
Reorganization thereunder, to approve with respect to each New Fund a New
Management Agreement that will be substantially identical to that described in
Proposal 2. Information on the New Management Agreements, including a
description of the differences between them and the Current Management
Contracts, is set forth under Proposal 2. The form of the New Management
Agreement, with changes from the Current Management Contract marked, is Exhibit
C to this Proxy Statement.
SUB-ADVISORY AGREEMENT. Each Plan authorizes the applicable Company, as
the sole shareholder of the New Trust prior to the Reorganization thereunder, to
approve with respect to each New Fund a New Sub-Advisory Agreement that will be
substantially identical to that described in Proposal 2. Information on the New
Sub-Advisory Agreement is set forth under Proposal 2. The form of the New
Sub-Advisory Agreement is Exhibit D to this Proxy Statement.
DISTRIBUTION CONTRACTS AND DISTRIBUTION PLANS. Each Plan authorizes the
applicable Company, as the sole shareholder of the New Trust prior to the
Reorganization thereunder, to enter into a new distribution contract with AIM
Distributors ("Proposed Distribution Contract"). Each Proposed Distribution
Contract will provide for susbtantially the same distribution services as
currently provided by GT Global.
Each Plan also authorizes the applicable Company, as the sole shareholder
of the New Trust prior to the Reorganization thereunder, to approve a new
distribution plan pursuant to Rule 12b-1 under 1940 Act with respect to each of
the New Trust's New Funds that will be substantially identical to the Proposed
Plans described in Proposal 3. Information on the Proposed Plans is set forth
under Proposal 3. The forms of the Proposed Plans are Exhibits H and I to this
Proxy Statement.
CONTINUATION OF SHAREHOLDER ACCOUNTS AND PLANS. The New Trusts' 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 the Companies' transfer
agent for each shareholder of the Funds. Shares held in the Fund accounts will
automatically be designated as shares of the New Funds. Holders of share
certificates of each Fund will not need to exchange them for new certificates
after the Reorganizations, and certificates for Fund shares issued before the
Reorganizations will represent shares of the corresponding New Funds after the
Reorganizations. Shareholders of the Funds who are receiving payment under a
withdrawal plan with respect to Fund shares will retain the same rights and
privileges as to New Fund shares under each plan. Similarly, no further action
will be necessary to continue any automatic investment plan or retirement plan
currently maintained by a shareholder with respect to any Fund's shares.
FEDERAL INCOME TAX CONSEQUENCES. Each Company and New Trust will receive
an opinion of Kirkpatrick & Lockhart LLP substantially to the effect that the
Reorganization in which it participates will constitute a tax-free
reorganization under section 368(a)(1)(F) of the Code. Accordingly, the Funds,
the New Funds, and the shareholders of the Funds will recognize no gain or loss
for federal income tax purposes as a result of the Reorganizations. Shareholders
of the Funds should consult their tax advisors regarding the effect, if any, of
a Reorganization in light of their individual circumstances and as to state and
local consequences, if any, of a Reorganization.
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APPRAISAL RIGHTS. Appraisal rights are not available to shareholders.
However, shareholders retain the right to redeem their shares of the Funds or
the New Funds, as the case may be, at any time before or after the
Reorganizations.
CERTAIN COMPARATIVE INFORMATION ABOUT THE CORPORATIONS, OLD TRUSTS,
AND NEW TRUSTS.
STRUCTURE OF THE NEW TRUSTS. Each New Trust will be established under the
laws of the State of Delaware by filing a certificate of trust in the office of
the Secretary of State of Delaware. Each New Trust will establish series
corresponding to and having identical designations as the series of its
predecessor Company, except to reflect the new proposed affiliations of the New
Funds with AIM and AMVESCAP. Each New Trust will also establish classes with
respect to each New Fund corresponding to and having identical designations as
the classes of each Fund. Each New Fund will have the same investment
objectives, policies, and restrictions as its predecessor Fund, except that each
of the New Fund's fundamental and nonfundamental restrictions will conform to
the changes proposed in Proposal 4 (assuming approval of that proposal by the
shareholders). Each New Trust's fiscal year will be the same as that of its
predecessor Company. The New Trusts will not have any operations prior to the
Reorganizations. Initially, each Company will be the sole shareholder of its
corresponding New Trust.
As a Delaware business trust, each New Trust's operations will be governed
by its Trust Instrument and By-Laws, and applicable Delaware law rather than by
its predecessor Corporation's Articles of Incorporation and By-Laws and Maryland
corporation law or by its predecessor Old Trust's Declaration of Trust and
By-Laws and applicable Massachusetts law. Certain differences between the
different domiciles and various forms of organization are summarized below. The
operations of each New Trust will continue to be subject to the provisions of
the 1940 Act and the rules and regulations thereunder.
TRUSTEES AND OFFICERS OF THE NEW TRUSTS. Subject to the provisions of the
Trust Instrument, the business of each New Trust will be managed by its
trustees, who will serve indefinite terms and will have all powers necessary or
convenient to carry out their responsibilities. The responsibilities, powers,
and fiduciary duties of the trustees will be substantially the same as those of
the Board Members of each Company.
The trustees of each New Trust would be those persons elected at this
Special Meeting to serve as Board Members of its predecessor Company.
Information concerning the nominees for election as Board Members of each
Company, all of whom presently serve in such positions, is set forth under
Proposal 1, "Election of Board Members." It is anticipated that the current
officers of each Company will be elected to serve as officers of its successor
New Trust and will perform the same functions following the Reorganizations that
they now perform on behalf of the Companies.
SHARES OF THE NEW TRUSTS. The beneficial interests in the New Funds will
be represented by transferable shares, par value $0.01 per share. Share
certificates will not be issued unless requested in writing by a shareholder.
The trustees will have the power under the Trust Instrument to establish new
series and classes of shares; each Company's Board currently has a similar
right. Each Trust Instrument will permit the trustees to issue an unlimited
number of shares of each class and series. Each Old Trust is substantially
identical to its successor New Trust with regard to the issuance of shares. By
contrast, each Corporation is authorized to issue only the number of shares
specified in its Articles of Incorporation and may issue additional shares only
with Board approval and after payment of a fee to the State of Maryland on any
additional shares authorized.
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Each Fund, except New Dimension Fund, currently has three classes of
shares of beneficial interest: Class A, Class B, and Advisor Class. New
Dimension Fund currently has four classes of shares of beneficial interest:
Class A, Class B, Class C, and Advisor Class. Each New Trust will establish for
each New Fund the same classes as currently exist. With the exception of Class B
shares, each class of the New Funds will have rights, privileges, and terms
identical to those of the corresponding class of the Funds. Class B shares of
the New Funds will be identical to Class B shares of the Funds with respect to
all rights, privileges, and terms, except that a conversion feature will be
added to Class B shares of the New Funds (with the exception of New Dimension
Fund). Initially, the conversion feature will provide that Class B shares will
convert to Class A shares eight years following the end of the calendar month in
which a shareholder acquired the Class B shares. The eight-year conversion
period will be measured from the end of the calendar month of the date of each
purchase of the Class B shares (whether before or after the Reorganizations).
The Class B shares of New Dimension Fund purchased prior to the Closing Date
will continue to be subject to the seven-year conversion period then in effect.
The conversion feature benefits eligible Class B shareholders because Class A
shares have a lower expense ratio than Class B shares.
SHAREHOLDER MEETING REQUIREMENTS. Each Corporation's By-Laws and Maryland
law provide that a special meeting of shareholders shall be called upon the
written request of shareholders holding 25% of the Corporation's shares. Each
Old Trust's Declaration of Trust and By-Laws provide that special meetings of
shareholders shall be called upon the written request of holders of at least 10%
of the Old Trust's shares then outstanding. Each New Trust's By-Laws provide
that a special meeting of shareholders for the purpose of voting on the removal
of any trustee may be called by the holders of 10% or more of the outstanding
shares of the New Trust.
Each New Trust, like its predecessor Company, will operate as an open-end
management investment company registered with the SEC under the 1940 Act.
Shareholders of the New Funds will therefore have the power to vote at special
meetings with respect to, among other things, changes in fundamental investment
objectives and fundamental policies of the New Funds; approval of certain
changes to investment advisory contracts and plans of distribution; and such
additional matters relating to the New Trusts as might be required by the 1940
Act. If, at any time, less than a majority of the trustees holding office have
been elected by the shareholders, the trustees then in office will promptly call
a meeting of shareholders of the New Trust for the purpose of electing a trustee
or trustees in order to maintain a majority of trustees elected by shareholders.
REMOVAL OF DIRECTORS AND TRUSTEES. Each Corporation's Articles of
Incorporation and By-Laws permit removal of a director by the holders of more
than 50% of the shares voted in person or by proxy at a meeting at which at
least 50% of the Corporation's outstanding shares are represented in person or
by proxy. Under each Old Trust's Declaration of Trust, a trustee may be removed
by two-thirds of the trustees holding office prior to removal or by holders of
two-thirds of the outstanding Old Trust shares at a special meeting called for
that purpose. Each New Trust will be substantially identical to the Old Trusts
with respect to the removal of trustees.
SHAREHOLDERS' RIGHTS OF INSPECTION. Maryland law provides generally that
persons who have been shareholders of record for six months or more and who own
at least 5% of a Fund's shares may inspect the Fund's books of account and stock
ledger. Under Massachusetts law, any shareholder may inspect a Fund's records,
accounts, and books for any legitimate business purpose. Series Trust permits
its trustees to determine the extent to which, the times and places at which,
and the conditions under which a shareholder may inspect any book or record. The
Declaration of Trust and Bylaws for Growth Series provide that, at each
shareholder meeting, a list of all shareholders entitled to vote, certifying the
number of shares held by each, shall be made available. Under each New Trust's
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Trust Instrument and By-Laws, New Fund shareholders who have held shares of
record for at least six months and who hold at least 5% of the outstanding
shares of any class of a New Fund will be permitted, upon written request, to
inspect a list of the shareholders of that class.
SHAREHOLDER LIABILITY. Maryland law provides that a shareholder is not
obligated to a Corporation with respect to the stock held therein, except to the
extent that (1) the subscription price or other agreed consideration for the
stock has not been paid (subject to limited exceptions); (2) the shareholder
knowingly accepted an illegal distribution; or (3) the shareholder is subject to
any liability imposed by law upon the dissolution, voluntary or involuntary, of
the Corporation. Under Massachusetts law, there is a remote possibility, under
certain circumstances, that an Old Trust's shareholders may be held personally
liable for the Old Trust's obligations. Each Old Trust's Declaration of Trust,
however, disclaims shareholder liability for acts of obligations of the Old
Trust and requires that every written agreement, obligation, or other
undertaking made or issued by the Old Trust contain a provision to the effect
that Old Trust shareholders are not personally liable thereunder. In addition,
each Declaration of Trust also provides for indemnification out of Old Trust
property for any shareholder held personally liable solely by reason of his or
her being or having been a shareholder. Each Declaration of Trust also provides
that the Old Trust shall, upon request, assume the defense of any claim made
against any shareholder for any act or obligation of the Old Trust and satisfy
any judgment thereon. Therefore, the risk of any shareholder's incurring
financial loss beyond his or her investment due to shareholder liability is
limited to circumstances in which an Old Trust itself is unable to meet its
obligations and the express disclaimer of shareholder liabilities is determined
not to be effective. Given the nature of each Old Trust's assets and operations,
the possibility that an Old Trust would be unable to meet its obligations is
remote.
Under Delaware law, each New Trust's shareholders will not be personally
liable for the obligations of the New Trust. The Delaware Act provides that a
shareholder of a Delaware business trust is entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under Delaware law. The securities regulators of some states, however,
have indicated that they may decline to apply Delaware law on this point, and it
is conceivable that, notwithstanding current laws, courts in other states may
decline to apply Delaware law on this point. As a result, to the extent that
each New Trust or a shareholder will be subject to the jurisdiction of courts in
those states, there is a risk that those courts might not apply Delaware law and
could thereby subject New Trust shareholders to liability. The Boards and
management of the Companies believe this risk to be remote. To guard against
this risk, each Trust Instrument (i) will contain an express disclaimer of
shareholder liability for acts or obligations of the New Trust and (ii) will
provide for indemnification out of New Trust property of any shareholder held
personally liable for the obligations of the New Trust. Moreover, each Trust
Instrument will require that every written agreement, obligation, or other
undertaking made or issued by the New Trust contain a provision to the effect
that New Fund shareholders are not personally liable thereunder. Thus, the risk
of a New Trust shareholder's incurring financial loss beyond the shareholder's
investment because of shareholder liability would be limited to circumstances in
which (a) a court refused to apply Delaware law or otherwise failed to give full
effect to a Trust Instrument or contractual provisions limiting shareholder
liability (or no contractual limitation of liability was in effect) and (b) a
New Trust itself was unable to meet its obligations. In light of Delaware law,
the nature of each New Trust's business, and the nature of its assets, the
Boards believe that the risk of personal liability to a New Trust shareholder is
extremely remote.
LIABILITY OF DIRECTORS AND TRUSTEES. Under the Articles of Incorporation,
each Corporation indemnifies its present and past directors, officers,
employees, and agents, and persons who are serving or have served at the
Corporation's request in similar capacities for other entities, to the maximum
extent permitted by applicable law (including Maryland law and the 1940 Act). In
the event of any litigation or other proceeding against a director or officer of
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a Corporation, Maryland law permits the Corporation to indemnify a director or
officer for certain expenses and to advance money for such expenses unless (a)
it is established that the act or omission of the director was material to the
matter giving rise to the proceeding, and the act or omission was committed in
bad faith or was the result of active and deliberate dishonesty; (b) the
director actually received an improper personal benefit in money, property, or
services; or (c) in the case of any criminal proceeding, the director had
reasonable cause to believe the act or omission was unlawful.
Under each Old Trust's Declaration of Trust, so long as the trustees have
acted under the belief that their actions are in the best interests of the Old
Trust, they will be personally liable only for willful misfeasance, bad faith,
or gross negligence in the performance of their duties or by reason of reckless
disregard of their obligations and duties as trustees. Under the Declaration of
Trust, trustees, officers and employees will generally be indemnified against
liability and against the expenses of litigation incurred by them unless their
conduct is determined to constitute willful misfeasance, bad faith, gross
negligence, or reckless disregard of their duties or unless it has been
determined that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust. [An Old Trust may also
advance money for these expenses, provided that the trustee or officer
undertakes to repay the Old Trust if his or her conduct is later determined to
preclude indemnification.]
Each New Trust's Trust Instrument will provide indemnification for current
and former trustees and officers to the fullest extent permitted by Delaware law
and other applicable law. Trustees and officers may be personally liable for
acts, omission, or obligations of a New Trust for reasons of willful
misfeasance, bad faith, or gross negligence in the performance of their duties
or by reason of reckless disregard of their obligations and duties as trustees.
AMENDMENT OF ARTICLES OF INCORPORATION, DECLARATIONS OF TRUST, AND TRUST
INSTRUMENTS. Under each Corporation's Articles of Incorporation and Maryland
law, the Articles of Incorporation may be amended upon (i) adoption by the Board
of a resolution setting forth the proposed amendment and declaring that such
amendment is advisable and (ii) approval of such resolution by the holders of a
majority of the Corporation's outstanding shares. Each Old Trust's Declaration
of Trust may be amended by a majority of the trustees so long as such amendment
does not adversely affect the rights of shareholders. When such amendment
adversely affects the rights of shareholders, such amendment may be adopted by a
majority of the trustees so long as the Old Trust obtains the approval of either
(1) the holders of more than 50% of the Old Trust's outstanding shares or (2)
holders of more than 50% of the applicable series or class of a series of the
Old Trust. Each New Trust's Trust Instrument may be amended by the trustees
without any shareholder vote, except that the shareholders will have the right
to vote on any amendment that affects their voting rights, that alters the
provisions governing amendments to the Trust Instrument, that is required to
have shareholder approval by law or by the New Trust's registration statement,
or that is submitted to the shareholders by the trustees.
The foregoing is only a summary of certain differences between and among
each Corporation's Articles of Incorporation and By-Laws and Maryland law and
each Old Trust's Declaration of Trust and By-Laws and Massachusetts law and each
New Trust's Trust Instrument and By-Laws and Delaware law. It is not a complete
list of the differences. Shareholders should refer to the provisions of these
documents and state law directly for a more thorough comparison. Copies of the
Articles of Incorporation and By-Laws of the Corporations, of the Declarations
of Trust and the By-Laws of the Old Trusts, and of the New Trust's Trust
Instrument and By-Laws are, or will be, available to shareholders without charge
upon written request to a Company or New Trust, when it comes into existence.
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REQUIRED VOTE. Under the applicable provisions of each Corporation's
Articles of Incorporation and each Old Trust's Declaration of Trust, the votes
required for approval of a Plan are as follows. Series Trust and Growth Series
each requires the affirmative vote of the holders of a majority of the Company's
shares as defined in the 1940 Act. The 1940 Act defines a "majority of the
outstanding voting securities" as the lesser of (1) 67% of the shares present or
represented at a meeting of shareholders if holders of more than 50% of all
shares are present or represented by proxy, or (2) more than 50% of all shares.
Investment Funds and Investment Portfolios each requires the affirmative vote of
a majority of the aggregate number of votes entitled to be cast. If a Plan is
not approved, the applicable Company will continue to operate as a Maryland
corporation or as a Massachusetts business trust, as the case may be, and the
Funds will continue to operate as series thereof.
EACH BOARD RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL 5
PROPOSAL 6: APPROVAL OF THE CONVERSION OF THE PORTFOLIOS IN WHICH CERTAIN
FUNDS INVEST
RELEVANT FUNDS. Proposal 6 applies to the following Funds: Consumer
Products and Services Fund, Financial Services Fund, High Income Fund,
Infrastructure Fund, and Natural Resources Fund, America Small Cap Fund, and
America Value Fund.
PROPOSAL. Global High Income Portfolio (in which High Income Fund invests
all its assets), Global Investment Portfolio (which has four series in which
Consumer Products and Services Fund, Financial Services Fund, Infrastructure
Fund and Natural Resources Fund, respectively, invest all their assets), and
Growth Portfolio (which has two series in which America Small Cap Fund and
America Value Fund, respectively, invest all their assets) (the Portfolios) are
organized as New York common law trusts. It is proposed that each Portfolio be
reorganized as and converted to a Delaware business trust (each, a "New
Portfolio") in a series of transactions (collectively, a "Conversion") pursuant
to an Agreement and Plan of Conversion and Termination ("Conversion Plan"). Each
Conversion Plan has been approved by the Board of a Portfolio and is
substantially similar to the form of Plan described in Proposal 5 and attached
to this Proxy Statement as Exhibit K. Each New Portfolio will be governed by an
Agreement and Declaration of Trust substantially similar to the Trust Instrument
described in Proposal 5 and attached to this Proxy Statement as Exhibit L.
REASONS FOR THE PROPOSED REORGANIZATIONS. The Conversions are being
proposed because Chancellor LGT, AIM, and the Board believe that the Delaware
business trust form of organization offers a number of advantages over the New
York common law trust form. In particular, the New York common law governing
common law trusts is vague in many respects. The Delaware Act, on the other
hand, is very specific in most vital areas. For example, and most importantly,
the Delaware Act expressly provides that the beneficial owners of a Delaware
business trust ("Holders") shall be entitled to the same limitation of personal
liability as stockholders of a Delaware corporation. Of generally similar
significance, the Delaware Act limits inter-series liability in a multi-series
business trust (which Global Investment Portfolio and Growth Portfolio will
become if this Proposal is approved), so that the assets of one series of a New
Portfolio expressly will be protected against claims by creditors and Holders of
another series of that New Portfolio. The Delaware Act also contains fairly
detailed provisions covering various aspects of a business trust's operations,
such as the establishment of new series and management of the trust. Conversion
of the Portfolios to Delaware business trusts thus will add protection against
liability for Funds that invest therein and should improve certain aspects of
administration of the Portfolios. In addition, the Delaware Act provides that
trustees, officers, employees, managers, agents, and independent contractors of
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a Delaware business trust, when acting as such, will not be personally liable to
any person other than the trust or a beneficial owner thereof for any act,
omission, or obligation of the trust or any trustee thereof.
DIFFERENCES BETWEEN THE CONVERSION PLANS AND THE PLANS. As noted above,
the Conversion Plan proposed to be used for each Conversion of a Portfolio is
substantially similar to the form of Plan for the Reorganizations of the Funds
described in Proposal 5 (Exhibit K). There are certain differences in those
documents, however, resulting from the facts that (1) ownership of the
Portfolios' series is represented by "interests" (in each series, all but a
nominal portion of which is held by a Fund), while ownership of the Funds is
represented by "shares" (which are widely held), (2) each series of a Portfolio
has only a single class of interests, while each Fund has multiple classes of
shares, (3) the Portfolios are organized as New York common law trusts, while
the Companies are organized as Maryland corporations or Massachusetts business
trusts, and (4) each series of a Portfolio is classified as a partnership for
federal income tax purposes, with the result that each Conversion Plan is
intended to implement a tax-free partnership-to-partnership conversion, while
each Plan is designed to implement a tax-free corporate reorganization.
DIFFERENCES BETWEEN THE NEW TRUSTS' AND NEW PORTFOLIOS' TRUST INSTRUMENTS.
As noted above, the Trust Instrument to be used for the New Portfolios is
substantially similar to the Trust Instrument to be used for the New Trusts
described in Proposal 5 (Exhibit L). There are certain differences in those
documents, however, resulting from the facts that (1) ownership of the New
Portfolios' series will be represented by "interests," while ownership of the
New Funds will be represented by "shares," (2) each series of a New Portfolio
will have only a single class of interests, while each New Fund will have
multiple classes of shares, and (3) for federal income tax purposes, the New
Portfolios' series will not be required to annually distribute their income and
gains, whereas the New Funds must do so to continue to qualify for treatment as
regulated investment companies. In addition, unlike a New Trust's Trust
Instrument, a New Portfolio's Trust Instrument will include provisions necessary
to comply with partnership tax accounting rules and to avoid being a "publicly
traded partnership" (which generally is treated as a corporation for federal
income tax purposes).
TAX CONSEQUENCES. The Conversion of a Portfolio from a New York common law
trust to a Delaware business trust will not result in recognition of any gain or
loss by that Portfolio, any Fund that invests in any series thereof or the
shareholders of such a Fund, in the opinion of Kirkpatrick & Lockhart LLP,
counsel to each Portfolio.
REQUIRED VOTE. Under the applicable provisions of the Declarations of
Trust of the Portfolios, approval of the proposed Conversions requires the
affirmative vote of the lesser of (1) 67% or more of the interests present or
represented at the meeting, if Holders of more than 50% of all interests are
present or represented by proxy, or (2) more than 50% of all interests. Each
Fund that is a Holder of interests in a series of a Portfolio will vote its
interest therein in the same proportion as shareholders of the Fund cast their
votes on this Proposal. If a proposed Conversion is not approved with respect to
a Portfolio, that Portfolio will continue to operate as a New York common law
trust.
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EACH BOARD RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL NO. 6
PROPOSAL 7: RATIFICATION OF THE SELECTION
OF INDEPENDENT PUBLIC ACCOUNTANTS
RELEVANT FUNDS. Proposal 7 applies to all Funds.
PROPOSAL. At a meeting called for the purpose of such selection, the firm
of Coopers & Lybrand L.L.P. was selected by each Company's Board, including the
Independent Board Members, as the independent accountants to audit the books and
the accounts of each Fund for its fiscal year and to include its opinion in
financial statements filed with the SEC. Each Board has directed the submission
of this selection to the shareholders for ratification. Coopers & Lybrand L.L.P.
has advised the Boards that it has no financial interest in any Company. For the
most recent fiscal year, the professional services rendered by Coopers & Lybrand
L.L.P. included the issuance of an opinion on the financial statements of each
Fund and an opinion on other reports of the Funds filed with the SEC.
Representatives of Coopers & Lybrand L.L.P. are not expected to be present at
the Meeting but have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.
REQUIRED VOTE. With respect to each Company, the ratification of the
selection of Coopers & Lybrand L.L.P. requires the affirmative vote of a
majority of the votes cast thereon at the Meeting.
EACH BOARD RECOMMENDS
THAT YOU VOTE "FOR" PROPOSAL 7
OTHER INFORMATION
EXECUTIVE OFFICERS AND DIRECTORS OF AIM
[TO BE ADDED.]
EXECUTIVE OFFICERS AND DIRECTORS OF CHANCELLOR LGT
The Directors and Executive Officers of Chancellor LGT Asset Management, Inc.
("Chancellor LGT") are listed below.
NAME, POSITION(S) WITH PRINCIPAL OCCUPATIONS AND BUSINESS
CHANCELLOR LGT AND ADDRESS EXPERIENCE FOR PAST FIVE YEARS1
- -------------------------- ----------------------------------------
Paul J. Loach, 46 Chairman of the Board of Chancellor LGT
Chairman of the Board of Directors since August 1997; Director and Managing
1166 Avenue of the Americas Director of LGT Asset Management PLC
New York, NY 10036 (London) since October 1994; Group
Manager and Director of Framlington
Group from May 1988 to October 1994.
- ------------------------
1 On October 31, 1996, Chancellor Capital Management, Inc. ("Chancellor
Capital") merged with LGT Asset Management, Inc. (San Francisco), and the
resulting entity was renamed Chancellor LGT Asset Management, Inc. Prior to
October 31, 1996, Ms. Lesavoy, Ms. Riley and Mr. Young held positions only with
Chancellor Capital.
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NAME, POSITION(S) WITH PRINCIPAL OCCUPATIONS AND BUSINESS
CHANCELLOR LGT AND ADDRESS EXPERIENCE FOR PAST FIVE YEARS1
- -------------------------- ----------------------------------------
Prince Philipp von und zu Director of Chancellor LGT since
Liechtenstein, 51 November 1996; Vice Chairman of
Director Supervisory Board of LGT Bank in
Herrengasse 12, P.O. Box 85 Liechtenstein (Deutschland) GmbH
FL-9490 Vaduz, Liechtenstein (Frankfurt) since 1992; Chairman of the
Board of Directors and CEO of
Liechtenstein Global Trust (Vaduz) since
1990; Vice Chairman of the Board of
Directors of LGT Bank in Liechtenstein
since 1981.
John G. Greenwood, 51 Chancellor LGT since November 1997;
Chief Economist and Director of Chief Economist of Chancellor LGT from
Director February 1994 to October 1996; Chief
50 California Street, Economist of LGT Asset Management,
27th Floor Limited (Hong Kong) from September 1974
San Francisco, CA 94111 to January 1994.
Nina Lesavoy, 40 Director and Head of North American
Director and Head of North Institutional Distribution for
American Institutional Distribution Chancellor LGT since November 1996;
1166 Avenue of the Americas Director and Head of Client Service and
New York, NY 10036 Sales for Chancellor LGT from March 1990
to October 1996.
Donald H. Young, 59 Director and Head of the Structured
Director Products Group for Chancellor LGT since
1166 Avenue of the Americas November 1996; Director and Head of
New York, NY 10036 Global Asset Allocation for Chancellor
LGT from October 1988 to October 1996.
Ken W. Chancey, 52 Senior Vice President - Mutual Fund
Senior Vice President Accounting, Chancellor LGT since 1997;
Mutual Fund Accounting Vice President - Mutual Fund Accounting,
50 California Street, 27th Floor Chancellor LGT from 1992 to 1997; Vice
San Francisco, CA 94111 President, Putnam Fiduciary Trust
Company from 1989 to 1992
Helge K. Lee, 51 Chief Legal and Compliance Officer -
Chief Legal and Compliance North America for Chancellor LGT since
Officer and Secretary October 1997; Executive Vice President
50 California Street, 27th of the Asset Management Division of
Floor Liechtenstein Global Trust since October
San Francisco, CA 94111 1996; Senior Vice President, General
Counsel and Secretary of Chancellor LGT,
GT Global, Inc., GT Investor Services,
Inc. and G.T. Insurance Agency from
February 1996 to October 1996; Vice
President, General Counsel and Secretary
of LGT Asset Management, Inc.,
Chancellor LGT, GT Global, Inc., GT
Investor Services, Inc. and G.T.
Insurance Agency from May 1994 to
February 1996; Senior Vice President,
General Counsel and Secretary of
Strong/Corneliuson Management, Inc. and
Secretary of each of the Strong Funds
from October 1991 through May 1994.
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NAME, POSITION(S) WITH PRINCIPAL OCCUPATIONS AND BUSINESS
CHANCELLOR LGT AND ADDRESS EXPERIENCE FOR PAST FIVE YEARS1
- -------------------------- ----------------------------------------
Margaret A. Riley, 34 Partners, Inc. since October 1997;
Director of Chancellor LGT Venture Managing Director and Chief Financial
Chief Financial Officer Officer of Chancellor LGT since October
1166 Avenue of the Americas 1997; Managing Director and Controller
New York, NY 10036 of Chancellor LGT from November 1996 to
October 1997; Managing Director of
Finance for Chancellor LGT from March
1989 to October 1996.
EXECUTIVE OFFICERS OF THE COMPANIES
The executive officers of the Companies are listed below. The business
address of each officer is 50 California Street, 27th Floor, San Francisco,
California 94111.
William J. Guilfoyle, age 39, has been President of each Company since
February 1997. Mr. Guilfoyle is also President of GT Global, principal
distributor of the GT Global Mutual Funds. Additional information about
Mr. Guilfoyle is provided above.
Helge K. Lee, age 51, has been a Vice President and Secretary of the
Companies since ______________. Mr. Lee has been Chief Legal and Compliance
Officer - North America, Chancellor LGT since October 1997; Executive Vice
President of the Asset Management Division of Liechtenstein Global Trust since
October 1996. From February 1996 to October 1996 he served as Senior Vice
President, General Counsel and Secretary of Chancellor LGT, GT Global, GT
Services and G.T. Insurance. He served as Vice President, General Counsel and
Secretary of LGT Asset Management, Inc., Chancellor LGT, GT Global, GT Services
and G.T. Insurance from May 1994 to February 1996. Mr. Lee was the Senior Vice
President, General Counsel and Secretary of Strong/Corneliuson Management, Inc.
and Secretary of each of the Strong Funds from October 1991 through May 1994.
Kenneth R. Chancey, age 52, has been a Vice President and Chief
Accounting Officer of the Companies since __________. Mr. Chancey has been
Senior Vice President - Mutual Fund Accounting at Chancellor LGT since 1997.
From 1992 to 1997 he was Vice President - Mutual Fund Accounting at
Chancellor LGT. Mr. Chancey was Vice President of Putnam Fiduciary Trust
Company from 1989 to 1992.
GENERAL INFORMATION
SOLICITATION OF PROXIES
Each Company will request broker/dealer firms, custodians, nominees and
fiduciaries to forward proxy material to the beneficial owners of the shares
held of record by such persons. Each Company may reimburse such broker/dealer
firms, custodians, nominees and fiduciaries for their reasonable expenses
incurred in connection with such proxy solicitation. In addition to the
solicitation of Proxies by mail, officers of each Company and employees of
Chancellor LGT and its affiliates, without additional compensation, may solicit
Proxies in person or by telephone. The costs associated with such solicitation
and the Special Meeting will be borne by LGT and AIM.
49
<PAGE>
Each Company has retained _________________________________________, a
professional proxy solicitation firm, to assist in the solicitation of proxies.
You may receive a telephone call from this firm concerning this proxy
solicitation. Each Company estimates that ____ will be paid fees of
approximately $_________ in connection with the solicitation, depending upon the
nature and extent of the services provided.
OTHER MATTERS TO COME BEFORE THE MEETING
The Boards do not know of any matters to be presented at the Meeting other
than those described in this Proxy Statement, but should any other matter
requiring a vote of Shareholders arise, the Proxyholders will vote thereon
according to their best judgment in the interests of the Companies.
REPORTS TO SHAREHOLDERS
EACH COMPANY WILL FURNISH TO SHAREHOLDERS, WITHOUT CHARGE AND UPON
REQUEST, A COPY OF THE MOST RECENT ANNUAL REPORT AND A COPY OF THE MOST RECENT
SEMI-ANNUAL REPORT FOLLOWING SUCH ANNUAL REPORT OF ANY FUND. REQUESTS FOR SUCH
REPORTS MAY BE MADE BY WRITING TO THE COMPANY AT 50 CALIFORNIA STREET, 27TH
FLOOR, SAN FRANCISCO, CALIFORNIA 94111, OR BY CALLING (800) 824-1580.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED,
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
BY ORDER OF THE BOARDS,
HELGE KRIST LEE
SECRETARY
March 31, 1998
50
<PAGE>
PRELIMINARY PROXY STATEMENT
GT GLOBAL
A WORLD OF OPPORTUNITY
GT GLOBAL INVESTOR SERVICES
2121 NORTH CALIFORNIA BLVD.
SUITE 395
WALNUT CREEK, CA 94596-3572
G.T. GLOBAL INVESTMENT FUNDS, INC.
G.T. GLOBAL GROWTH SERIES
G.T. INVESTMENT PORTFOLIO, INC.
GT GLOBAL SERIES TRUST
SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1998
This proxy is being solicited on behalf of the Board of Trustees/Directors of
the Company indicated below and relates to the proposals with respect to the
Company, the portfolios of the Company ("Funds") and the classes of the Funds
("Classes") indicated below. The undersigned hereby appoints as proxies William
J. Guilfoyle, Helge K. Lee and Michael A. Silver and each of them (with power of
substitution) to vote for the undersigned all shares of beneficial
interest/common stock of the undersigned in the Fund at the Special Meeting of
Shareholders to be held at [ ] a.m., Pacific time, on May 20, 1998, at the
offices of the Company, 50 California Street, 27th Floor, San Francisco,
California 94111, and any adjournment thereof ("Meeting"), with all the power
the undersigned would have if personally present. The shares represented by this
proxy will be voted as instructed. Unless indicated to the contrary, this proxy
shall be deemed to grant authority to vote "FOR" all proposals relating to the
Company, the Fund and the Class with discretionary power to vote upon such other
business as may properly come before the Meeting.
YOUR VOTE IS IMPORTANT. Please date and sign this proxy below and return it
promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
GTGXXX KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
NAME OF COMPANY/FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Vote On Directors/Trustees For Withhold For All To withhold authority to vote for any individual
All All Except nominee(s), mark "For All Except" and write the
nominee's number the line below.
1. Election of the Company's / / / / / /
Board of Directors or on
Board of Trustees; 01) C.
Derek Anderson; 02) Frank
S. Bayley; 03) William J.
Guilfoyle; 04) Arthur C.
Patterson; 05) Ruth H.
Quigley
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
VOTE ON PROPOSALS For Against Abstain
2. Approval of a new investment management and administration agreement and / / / / / /
a sub-advisory and sub-administration agreement; / / / / / /
3. Approval of replacement Rule 12b-1 plans of distribution; / / / / / /
4. Approval of changes to the fundamental investment restrictions; / / / / / /
/ / To vote against the proposed changes to one or more of the specific
fundamental investment restrictions, but to approve others, PLACE AN "X"
IN THE BOX AT left and indicate the number(s) (as set forth in the proxy
statement) of the investment restriction(s) you do not want to change on
the line below.
-------------------------------------------------------------------------
5. Approval of an agreement and plan of conversion and termination with / / / / / /
respect to the Company;
6. Only for Consumer Products and Services Fund, Financial Services Fund, / / / / / /
Infrastructure Fund, Natural Resources, High Income Fund, America Small
Cap Fund and America Value Fund: Approval of the conversion of the
portfolios in which certain Funds invest;
7. Ratification of the selection of Coopers & Lybrand L.L.P. as the Company's / / / / / /
Independent Public Accountants;
</TABLE>
If shares are held jointly, each shareholder named should sign. If only one
signs, his or her signature will be binding. If the shareholder is a
corporation, the President or a Vice President should sign in his or her own
name indicating this. If the Shareholder is a partnership, a partner should sign
in his or her own name, that he or she is a "Partner".
- ------------------------------------------------- --------------------------
- ------------------------------------------------- --------------------------
Signature (PLEASE SIGN WITHIN BOX) Date
- ------------------------------------------------- --------------------------
- ------------------------------------------------- --------------------------
Signature (Joint Owners) Date
<PAGE>
DRAFT 3/17/98
EXHIBIT A
NUMBER OF OUTSTANDING SHARES OF EACH
FUND AS OF MARCH ___, 1998
<PAGE>
EXHIBIT B
NUMBER OF OUTSTANDING SHARES OWNED BY DIRECTORS
AND OFFICERS AS OF MARCH ___, 1998
<PAGE>
EXHIBIT C
[NAME OF COMPANY]
MASTER INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN [FUND]
AND A I M ADVISORS, INC.
Contract made as of ____________, 19_, between [Company], a Delaware
business trust ("Company), and A I M Advisors, Inc. (the "Adviser"), a Delaware
corporation.
WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and
intends to offer for public sale shares of [Funds], each being a series of the
Company's shares of beneficial interest: and
WHEREAS the Company hereafter may establish additional series of its
shares of beneficial interest (any such additional series, together with the
series named in the paragraph immediately preceding, are collectively referred
to herein as the "Funds," and singly may be referred to as a "Fund"); and
WHEREAS the Company desires to retain Adviser as investment manager and
administrator to furnish certain administrative, investment advisory and
portfolio management services to the Company and the Funds, and Adviser is
willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Company hereby appoints Adviser as investment manager
and administrator of each Fund for the period and on the terms set forth in this
Contract. Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. DUTIES AS INVESTMENT MANAGER.
(a) Subject to the supervision of the Company's Board of Trustees
("Board"), Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all securities and
investments and cash equivalents of the Fund. Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by each Fund, and the brokers and dealers through whom trades will be
executed.
(b) Adviser agrees that in placing orders with brokers and dealers it
will attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation Adviser may, in its discretion, purchase and
sell portfolio securities to and from brokers and dealers who sell shares of the
Funds or provide the Funds or Adviser's other clients with research, analysis,
advice and similar services. Adviser may pay to brokers and dealers, in return
for research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to Adviser's determining in good faith that
such commission or spread is reasonable in terms either of the particular
transaction or of the overall responsibility of Adviser to the Funds and its
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
3
<PAGE>
instance will portfolio securities be purchased from or sold to Adviser or any
affiliated person thereof except in accordance with the federal securities laws
and the rules and regulations thereunder and any exemptive orders currently in
effect. Whenever Adviser simultaneously places orders to purchase or sell the
same security on behalf of a Fund and one or more other accounts advised by
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. The Company
recognizes that in some cases this procedure may adversely affect the results
obtained for each Fund.
[For New Dimension Fund, Sections 2(a) and (b) are replaced with the
following: "The Adviser will be responsible for the daily allocation and
periodic rebalancing of the Fund's assets among the investment companies in
which the Fund invests ("Underlying Funds"). Such allocation and rebalancing
shall be made in accordance with the Company's Registration Statement. The
Adviser will be responsible for placing all trades on behalf of the Fund. The
Adviser also will determine from time to time what other securities, if any,
will be purchased, retained or sold by the Fund and what cash, if any, will be
retained by the Fund."]
(c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Funds, and will furnish the Board
with such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, Adviser
hereby agrees that all records which it maintains for the Company are the
property of the Company, agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act any records which it maintains for the Company and
which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Company any records which it
maintains for the Company upon request by the Company.
3. DUTIES AS ADMINISTRATOR. Adviser will administer the affairs of each
Fund subject to the supervision of the Board and the following understandings:
(a) Adviser will supervise all aspects of the operations of each Fund,
including the oversight of transfer agency and custodial services, except as
hereinafter set forth; provided, however, that nothing herein contained shall be
deemed to relieve or deprive the Board of its responsibility for control of the
conduct of the affairs of the Funds. [Bracketed language omitted in Portfolio
Agreements.]
(b) At Adviser's expense, Adviser will provide the Company and the Funds
with such corporate, administrative and clerical personnel (including officers
of the Company) and services as are reasonably deemed necessary or advisable by
the Board.
(c) Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of each Fund's [prospectus,
statement of additional information,] proxy material, tax returns and required
reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
[Bracketed language omitted in Portfolio Agreements.]
(d) Adviser will provide the Company and the Funds with, or obtain for
them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Adviser will act in conformity with the Agreement and Declaration of
4
<PAGE>
Trust, By-Laws and Registration Statement of the Company and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules thereunder, and all other applicable federal and
state laws and regulations.
5. DELEGATION OF ADVISER'S DUTIES AS INVESTMENT MANAGER AND
ADMINISTRATOR. With respect to one or more of the Funds, Adviser may enter into
one or more contracts ("Sub-Advisory or Sub-Administration Contract") with a
Sub-adviser or Sub-administrator in which Adviser delegates to such sub-adviser
or sub-administrator the performance of any or all of the services specified in
Paragraph 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject with
respect to the delegated services under Paragraphs 2, 3 and 4 of this Contract;
(ii) each Sub-Advisory and Sub-Administration Contract meets all requirements of
the 1940 Act and rules thereunder, and (iii) Adviser shall not enter into a
Sub-Advisory or Sub-Administration Contract unless it is approved by the Board
prior to implementation.
6. SERVICES NOT EXCLUSIVE. The services furnished by Adviser hereunder
are not to be deemed exclusive and 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 Adviser, who may also be a Trustee, officer or
employee of the Company, 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.
7. EXPENSES.
(a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Adviser, [incurred in its operations and the
offering of its shares.] [Bracketed language omitted in Portfolio Agreements.]
(b) Expenses borne by each Fund will include but not be limited to the
following: (i) the cost (including brokerage commissions, if any) of securities
purchased or sold by the Fund and any losses incurred in connection therewith;
(ii) fees payable to and expenses incurred on behalf of the Fund by Adviser
under this Contract; (iii) expenses of organizing the Company and the Fund; (iv)
filing fees and expenses relating to the registration and qualification of the
Fund's shares and the Company under federal and/or state securities laws and
maintaining such registrations and qualifications; (v) fees and salaries payable
to the Company's Trustees who are not parties to this Contract or interested
persons of any such party ("Independent Trustees"); (vi) all expenses incurred
in connection with the Independent Trustees' services, including travel
expenses; (vii) taxes (including any income or franchise taxes) and governmental
fees; (viii) costs of any liability, uncollectible items of deposit and other
insurance and fidelity bonds; (ix) any costs, expenses or losses arising out of
a liability of or claim for damages or other relief asserted against the Company
or the Fund for violation of any law; (x) legal, accounting and auditing
expenses, including legal fees of special counsel for the Independent Trustees;
(xi) charges of custodians, transfer agents, pricing agents and other agents;
[(xii) costs of preparing share certificates;] (xiii) with respect to existing
shareholders, expenses of setting in type, printing and mailing [prospectuses
and supplements thereto, statements of additional information and supplements
thereto,] reports and proxy materials for existing shareholders; (xiv) any
extraordinary expenses (including fees and disbursements of counsel, costs of
actions, suits or proceedings to which the Company is a party and the expenses
the Company may incur as a result of its legal obligation to provide
indemnification to its officers, Trustees, employees and agents) incurred by the
Company or the Fund; (xv) fees, voluntary assessments and other expenses
incurred in connection with membership in investment company organizations;
(xvi) costs of mailing and tabulating proxies and costs of meetings of
shareholders, the Board and any committees thereof; (xvii) the cost of
5
<PAGE>
investment company literature and other publications provided by the Company to
its Trustees and officers; and (xviii) costs of mailing, stationery and
communications equipment. [Bracketed language omitted in Portfolio Agreements.]
(c) All general expenses of the Company and joint expenses of the Funds
shall be allocated among each Fund on a basis deemed fair and equitable by
Adviser, subject to the Board's supervision.
(d) Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.
(e) The payment or assumption by Adviser of any expense of the Company
or any Fund that Adviser is not required by this Contract to pay or assume shall
not obligate Adviser to pay or assume the same or any similar expense of the
Company or any Fund on any subsequent occasion.
[For New Dimension Fund, Section 7 is replaced with the following:
"EXPENSES. (a) During the term of this Agreement, the Adviser shall bear all
expenses of the Fund (other than expenses reimbursed pursuant to the Fund's Rule
12b-1 plans of distribution and non-recurring and extraordinary expenses of the
Fund) until such time as the Fund enters into a special servicing or similar
agreement among the Company, the Adviser, G.T. Investment Funds, Inc. and GT
Investor Services, Inc. ("Special Servicing Agreement"). Once the Company enters
into the Special Servicing Agreement, all expenses of the Fund (other than
expenses reimbursed pursuant to the Fund's Rule 12b-1 plans of distribution and
non-recurring and extraordinary expenses of the Fund) shall be paid for pursuant
to that agreement. Without limiting the generality of the foregoing, such
expenses include the following: (i) the cost (including brokerage commissions,
if any) of securities purchased or sold by the Fund and any losses incurred in
connection therewith; (ii) expenses of organizing the Fund; (iii) filing fees
and expenses relating to the registration and qualification of the Fund's shares
and the Company under federal and/or state securities law and maintaining such
registrations and qualifications; (iv) fees and salaries payable to the
Company's Trustees who are not parties to this Agreement or interested persons
of any such party ("Independent Trustees"); (v) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(vi) costs of any liability, uncollectible items of deposit and other insurance
and fidelity bonds; (vii) legal, accounting and auditing expenses, including
legal fees of special counsel for the Independent Trustees; (viii) charges of
custodians, transfer agents, pricing agents and other agents; (ix) costs of
preparing share certificates; (x) expenses of setting in type, printing and
mailing prospectuses and supplements thereto, statements of additional
information, reports and proxy materials for existing shareholders; (xi) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xii) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xiii) the cost of investment company literature and other publications
provided by the Company to its Trustees and officers; and (xiv) costs of
mailing, stationery and communications equipment.
(c) During the term of this Agreement, the Fund shall bear any
non-recurring and extraordinary expenses incurred in its operations. Such
non-recurring and extraordinary expenses include: (i) the fees and costs of
actions, suits or proceedings, and any penalties, damages or payments in
settlement in connection therewith, for which the Company and/or the Fund may be
liable directly, or which they may incur as a result of their legal obligation
to provide indemnification to their officers, trustees and agents; (ii) the fees
and costs of any governmental investigation and any fines or penalties in
6
<PAGE>
connection therewith; (iii) and any federal, state or local tax, or related
interest, penalties or additions to tax for which the Company or the Fund may be
liable.
(d) The payment or assumption by the Adviser of any expense of the
Fund prior to the effective date of the Special Servicing Agreement shall not
obligate the Adviser to pay or assume the same or any similar expense of the
Fund after the effective date of the Special Servicing Agreement."]
8. COMPENSATION.
(a) For the services provided to a Fund under this Contract, the Company
shall pay the Adviser an annual fee, payable monthly, based upon the average
daily net assets of such Fund as forth in Appendix A attached hereto. Such
compensation shall be paid solely from the assets of such Fund. [For High Income
Portfolio, add the following: "The Portfolio will also pay the Adviser a fee
equal to 2% of the Portfolio's total investment income calculated in accordance
with generally accepted accounting principles, adjusted daily for currency
revaluations, on a marked to market basis, of the Portfolio's assets; provided,
however, that during any fiscal year this amount shall not exceed 2% of the
Portfolio's total investment income calculated in accordance with generally
accepted accounting principles."]
(b) For the services provided under this Contract, each Fund as
hereafter may be established will pay to Adviser a fee in an amount to be agreed
upon in a written Appendix to this Contract executed by the Company on behalf of
such Fund and by Adviser.
(c) The fee shall be computed daily and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.
(d) 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.
[For New Dimension Fund, Section 8 is replaced with the following: "The
Adviser will not be paid any special compensation for the services provided by
it hereunder. However, the Adviser may receive fees for performing investment
management and other services on behalf of the Underlying Funds and may receive
further fees from the Underlying Funds pursuant to the Special Servicing
Agreement."]
9. LIMITATION OF LIABILITY OF ADVISER AND INDEMNIFICATION. Adviser
shall not be liable and each Fund shall indemnify Adviser and its directors,
officers and employees, for any costs or liabilities arising from any error of
judgment or mistake of law or any loss suffered by the Fund or the Company 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
Adviser in the performance by Adviser of its duties or from reckless disregard
by Adviser of its obligations and duties under this Contract. Any person, even
though also an officer, partner, employee, or agent of Adviser, who may be or
become an officer, Trustee, employee or agent of the Company shall be deemed,
when rendering services to a Fund or the Company or acting with respect to any
business of a Fund or the Company, to be rendering such service to or acting
solely for the Fund or the Company and not as an officer, partner, employee, or
agent or one under the control or direction of Adviser even though paid by it.
7
<PAGE>
10. 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, cast in 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.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. 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, 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 Adviser or by Adviser at
any time, without the payment of any penalty, on sixty days' written notice to
the Company. 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.
11. AMENDMENT OF THIS CONTRACT. 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 no amendment of this Contract shall be
effective until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.
12. GOVERNING LAW. This Contract shall be construed in accordance with
the laws of the State of Delaware (without regard to Delaware conflict or choice
of law provisions) and the 1940 Act. To the extent that the applicable laws of
the State of Delaware conflict with the applicable provisions of the 1940 Act,
the latter shall control.
13. LICENSE AGREEMENT. The Company 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 adviser to the
Company with respect to such series of shares.
14. LIMITATION OF SHAREHOLDER LIABILITY. It is expressly agreed that the
obligations of the Company hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Company
personally, but shall only bind the assets and property of the Funds, as
provided in the Company's Declaration of Trust. The execution and delivery of
this Contract have been authorized by the Trustees of the Company and
shareholders of the Funds, and this Contract has been executed and delivered by
an authorized officer of the Company acting as such; neither such authorization
by such Trustees and shareholders nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the assets
and property of the Funds, as provided in the Company's Declaration of Trust.
15. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. 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. As used in this Contract,
8
<PAGE>
the terms "majority of the outstanding voting securities," "interested person,"
assignment," "broker," "dealer," "investment adviser, "national securities
exchange," "net assets," "prospectus," "sale," sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: [COMPANY]
________________________________ By:_____________________________
Name:
Title:
Attest: A I M ADVISORS, INC.
_________________________________ By:_____________________________
Name:
Title:
10
<PAGE>
APPENDIX A
TO
MASTER INVESTMENT ADVISORY AGREEMENT
OF
[FUND]
The Company shall pay the Adviser, out of the assets of a Fund, as full
compensation for all services rendered and all facilities furnished hereunder, a
management 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.
[Series Fund]
Net Assets Annual Rate
- ---------- -----------
First $... million ............................................ ____%
Next $... million ............................................. ____%
Next $... million ............................................. ____%
Over $... million ............................................. ____%
[Series Fund]
Net Assets Annual Rate
- ---------- -----------
First $... million ............................................ ____%
Next $... million ............................................. ____%
Next $... million ............................................. ____%
Over $... million ............................................. ____%
[Series Fund]
Net Assets Annual Rate
- ---------- -----------
First $... million ............................................ ____%
Next $... million ............................................. ____%
Next $... million ............................................. ____%
Over $... million ............................................. ____%
[Series Fund]
Net Assets Annual Rate
- ---------- -----------
First $... million ........................................... ____%
Next $... million ............................................ ____%
Next $... million ............................................ ____%
Over $... million ............................................ ____%
11
<PAGE>
EXHIBIT D
[NAME OF COMPANY]
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
[CHANCELLOR LGT ASSET MANAGEMENT, INC. - NAME TO BE CHANGED]
Contract made as of ________, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and [Chancellor LGT Asset Management, Inc. -
name to be changed], a California corporation ("Sub-Adviser").
WHEREAS Adviser has entered into an Investment Management and
Administration Contract with [Company], an [open-end] management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"), with respect to [Funds}, each Fund being a series of the Company's shares
of beneficial interest; and
WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser and
sub-administrator to furnish certain advisory and administrative services to the
Funds, and Sub-Adviser is willing to furnish such services;
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 and
sub-administrator of each Fund for the period and on the terms set forth in this
Contract. 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 Company's Board of Trustees
("Board") and Adviser, the Sub-Adviser will provide a continuous investment
program for each Fund, including investment research and management, for all
securities and investments and cash equivalents of the Fund. The Sub-Adviser
will determine from time to time investments to be purchased, retained or sold
with respect to each Fund., and the brokers and dealers through whom trades will
be executed.
(b) The Sub-Adviser agrees that, in placing orders with brokers, it will
attempt to obtain the best net result in terms of price and execution; provided
that, on behalf of the Funds, the Sub-Adviser may, in its discretion, purchase
fund securities from and sell portfolio securities to brokers and dealers who
provide the Funds with research, analysis, advice and similar services. The
Sub-Adviser may pay to those brokers, in return for such services, a higher
commission than may be charged by other brokers, subject to the Sub-Adviser
determining in good faith that such commission is reasonable in terms either of
the particular transaction or of the overall responsibility of the Sub-Adviser
to the Funds and its other clients and that the total commissions paid by each
Fund will be reasonable in relation to the benefits to the Fund over the long
12
<PAGE>
term. In no instance will securities be purchased from or sold to the
Sub-Adviser, or any affiliated person thereof, except in accordance with the
federal securities laws and the rule and regulations thereunder. 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.
[For New Dimension Fund, Sections 2(a) and (b) are replaced with the
following: "The Sub-Adviser will be responsible for the daily allocation and
periodic rebalancing of the Fund's assets among the investment companies in
which the Fund invests ("Underlying Funds"). Such allocation and rebalancing
shall be made in accordance with the Company's Registration Statement. The
Sub-Adviser will be responsible for placing all trades on behalf of the Fund.
The Sub-Adviser also will determine from time to time what other securities, if
any, will be purchased, retained or sold by the Fund and what cash, if any, will
be retained by the Fund."]
(c) The Sub-Adviser will maintain all 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 the Board or Adviser reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records which it maintains for the
Company are the property of the Company, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it maintains for
the Company and which are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Company any records which
it maintains for the Company upon request by the Company.
3. DUTIES AS SUB-ADMINISTRATOR. Sub-Adviser will administer the affairs
of each Fund subject to the supervision of the Company's Board of Trustees
("Board") and the following understandings:
(a) Sub-Adviser will supervise all aspects of the operations of each
Fund, including the oversight of transfer agency and custodial except as
hereinafter set forth; provided, however, that nothing herein contained shall be
deemed to relieve or deprive the Board of its responsibility for control of the
conduct of the affairs of the Funds. [Bracketed language omitted in Portfolio
Agreements.]
(b) At Sub-Adviser's expense, Sub-Adviser will provide the Company and
the Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.
(c) Sub-Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of each Fund's [prospectus,
statement of additional information,] proxy material, tax returns and required
reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
[Bracketed language omitted in Portfolio Agreements.]
(d) Sub-Adviser will provide the Company and the Funds with, or obtain
for them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Sub-Adviser will act in conformity with the Declaration of Trust,
13
<PAGE>
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
5. 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 Company, 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.
6. EXPENSES.
(a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Sub-Adviser, [incurred in its operations and the
offering of its shares]. [Bracketed language omitted in Portfolio Agreements.]
(b) Expenses borne by each Fund will include but not be limited to the
following: (i) the cost (including brokerage commissions, if any) of securities
purchased or sold by the Fund and any losses incurred in connection therewith;
(ii) fees payable to and expenses incurred on behalf of the Fund by Sub-Adviser
under this Contract; (iii) expenses of organizing the Company and the Fund; (iv)
filing fees and expenses relating to the registration and qualification of the
Fund's shares and the Company under federal and/or state securities laws and
maintaining such registrations and qualifications; (v) fees and salaries payable
to the Company's Trustees who are not parties to this Contract or interested
persons of any such party ("Independent Trustees"); (vi) all expenses incurred
in connection with the Independent Trustees' services, including travel
expenses; (vii) taxes (including any income or franchise taxes) and governmental
fees; (viii) costs of any liability, uncollectable items of deposit and other
insurance and fidelity bonds; (ix) any costs, expenses or losses arising out of
a liability of or claim for damages or other relief asserted against the Company
or the Fund for violation of any law; (x) legal, accounting and auditing
expenses, including legal fees of special counsel for the Independent Trustees;
(xi) charges of custodians, transfer agents, pricing agents and other agents;
[(xii) costs of preparing share certificates;] (xiii) expenses of setting in
type, printing and mailing [prospectuses and supplements thereto, statements of
additional information,] reports and proxy materials for existing shareholders;
(xiv) any extraordinary expenses (including fees and disbursements of counsel,
costs of actions, suits or proceedings to which the Company is a party and the
expenses the Company may incur as a result of its legal obligation to provide
indemnification to its officers, Trustees, employees and agents) incurred by the
Company; (xv) fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; (xvi) costs of
mailing and tabulating proxies and costs of meetings of shareholders, the Board
and any committees thereof; (xvii) the cost of investment company literature and
other publications provided by the Company to its Trustees and officers; and
(xviii) costs of mailing, stationery and communications equipment. [Bracketed
language omitted in Portfolio Agreements.]
(c) All general expenses of the Company and joint expenses of the Funds
shall be allocated among each Fund on a basis deemed fair and equitable by
Sub-Adviser, subject to Adviser's and the Board's supervision.
(d) Sub-Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.
14
<PAGE>
(e) The payment or assumption by Sub-Adviser of any expense of the
Company or any Fund that Sub-Adviser is not required by this Contract to pay or
assume shall not obligate Sub-Adviser to pay or assume the same or any similar
expense of the Company or any Fund on any subsequent occasion.
[For New Dimension Fund, Section 6 is replaced with the following:
"EXPENSES. (a) During the term of this Agreement, the Sub-Adviser shall bear
all expenses of the Fund (other than expenses reimbursed pursuant to the Fund's
Rule 12b-1 plans of distribution and non-recurring and extraordinary expenses of
the Fund) until such time as the Fund enters into a special servicing or similar
agreement among the Company, the Sub-Adviser, G.T. Investment Funds, Inc. and GT
Investor Services, Inc. ("Special Servicing Agreement"). Once the Company enters
into the Special Servicing Agreement, all expenses of the Fund (other than
expenses reimbursed pursuant to the Fund's Rule 12b-1 plans of distribution and
non-recurring and extraordinary expenses of the Fund) shall be paid for pursuant
to that agreement. Without limiting the generality of the foregoing, such
expenses include the following: (i) the cost (including brokerage commissions,
if any) of securities purchased or sold by the Fund and any losses incurred in
connection therewith; (ii) expenses of organizing the Fund; (iii) filing fees
and expenses relating to the registration and qualification of the Fund's shares
and the Company under federal and/or state securities law and maintaining such
registrations and qualifications; (iv) fees and salaries payable to the
Company's Trustees who are not parties to this Agreement or interested persons
of any such party ("Independent Trustees"); (v) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(vi) costs of any liability, uncollectible items of deposit and other insurance
and fidelity bonds; (vii) legal, accounting and auditing expenses, including
legal fees of special counsel for the Independent Trustees; (viii) charges of
custodians, transfer agents, pricing agents and other agents; (ix) costs of
preparing share certificates; (x) expenses of setting in type, printing and
mailing prospectuses and supplements thereto, statements of additional
information, reports and proxy materials for existing shareholders; (xi) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xii) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xiii) the cost of investment company literature and other publications
provided by the Company to its Trustees and officers; and (xiv) costs of
mailing, stationery and communications equipment.
(c) During the term of this Agreement, the Fund shall bear any
non-recurring and extraordinary expenses incurred in its operations. Such
non-recurring and extraordinary expenses include: (i) the fees and costs of
actions, suits or proceedings, and any penalties, damages or payments in
settlement in connection therewith, for which the Company and/or the Fund may be
liable directly, or which they may incur as a result of their legal obligation
to provide indemnification to their officers, trustees and agents; (ii) the fees
and costs of any governmental investigation and any fines or penalties in
connection therewith; (iii) and any federal, state or local tax, or related
interest, penalties or additions to tax for which the Company or the Fund may be
liable.
(d) The payment or assumption by the Sub-Adviser of any expense of
the Fund prior to the effective date of the Special Servicing Agreement shall
not obligate the Sub-Adviser to pay or assume the same or any similar expense of
the Fund after the effective date of the Special Servicing Agreement."]
7. COMPENSATION.
(a) For the services provided to a Fund under this Contract, Adviser
will pay Sub-Adviser a fee, computed weekly and paid monthly, as set forth in
Appendix A hereto. [For High Income Portfolio, add the following: "Adviser will
also pay Sub-Adviser a fee equal to 2% of the Portfolio's total investment
income calculated in accordance with generally accepted accounting principles,
15
<PAGE>
adjusted daily for currency revaluations, on a marked to market basis, of the
Portfolio's assets; provided, however, that during any fiscal year this amount
shall not exceed 2% of the Portfolio's total investment income calculated in
accordance with generally accepted accounting principles."]
(b) For the services provided under this Contract to each Fund as
hereafter may be established, Adviser will pay to Sub-Adviser a fee in an amount
to be agreed upon in a written Appendix to this Contract executed by Adviser and
by Sub-Adviser.
(c) The fee shall be computed weekly and paid monthly to Sub-Adviser on
or before the last business day of the next succeeding calendar month.
(d) 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.
[For New Dimension Fund, Section 7 is replaced with the following: "The
Adviser will not be paid any special compensation for the services provided by
it hereunder. However, the Adviser may receive fees for performing investment
management and other services on behalf of the Underlying Funds and may receive
further fees from the Underlying Funds pursuant to the Special Servicing
Agreement."]
8. 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
Company 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 Company, shall be deemed, when rendering services to a Fund or the Company
or acting with respect to any business of a Fund or the Company to be rendering
such service to or acting solely for the Fund or the Company and not as an
officer, partner, employee, or agent or one under the control or direction of
Sub-Adviser even though paid by it.
9. 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, cast in 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.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. 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.
16
<PAGE>
(c) Notwithstanding the foregoing, with respect to any Fund this
Contract may be terminated at any time, without the payment of any penalty, 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 by
Sub-Adviser at any time, without the payment of any penalty, on sixty days'
written notice to the Company. 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.
10. 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 no amendment of this Contract shall be effective
until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.
11. GOVERNING LAW. This Contract shall be construed in accordance with
the laws of the State of Delaware (without regard to Delaware conflict or choice
of law provisions) and the 1940 Act. To the extent that the applicable laws of
the State of Delaware 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. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order
17
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: A I M ADVISORS, INC.
_______________________________ By:__________________________________
Name:
Title:
Attest: CHANCELLOR LGT ASSET MANAGEMENT, INC.
[Name to be Changed]
__________________________________ By:__________________________________
Name:
Title:
18
<PAGE>
APPENDIX A
TO
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
[Series Fund]
Net Assets Annual Rate
- ---------- -----------
First $... million ............................................ ____%
Next $... million ............................................. ____%
Next $... million ............................................. ____%
Over $... million ............................................. ____%
[Series Fund]
Net Assets Annual Rate
- ---------- -----------
First $... million ............................................ ____%
Next $... million ............................................. ____%
Next $... million ............................................. ____%
Over $... million ............................................. ____%
[Series Fund]
Net Assets Annual Rate
- ---------- -----------
First $... million ............................................ ____%
Next $... million ............................................. ____%
Next $... million ............................................. ____%
Over $... million ............................................. ____%
[Series Fund]
Net Assets Annual Rate
- ---------- -----------
First $... million ........................................... ____%
Next $... million ............................................ ____%
Next $... million ............................................ ____%
Over $... million ............................................ ____%
19
<PAGE>
EXHIBIT E
ADVISORY AGREEMENT FEE SCHEDULE FOR GT GLOBAL FUNDS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ADVISORY FEE SUB-ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE (BASED ON AVERAGE FOR THE MOST
NAME OF COMPANY AND FUND DAILY DAILY RECENTLY COMPLETED
NET ASSETS) NET ASSETS)1 FISCAL YEAR
- -------------------------------------------------------------------------------------------------
G.T. Global Growth Series
- -------------------------------------------------------------------------------------------------
GT Global Europe Growth Fund (A) .975% on the first .39% on the first $491,253,811
$500 million; .95% $500 million; .38%
on the next $500 on the next $500
million; .925% million; .37%
on the next on the next
$500 million; $500 million;
and .90% on and .36% on
amounts thereafter amounts thereafter
- -------------------------------------------------------------------------------------------------
GT Global International .975% on the .39% on the $204,450,024
Growth Fund (A) first $500 first $500
million; .95% on million; .38% on
the next $500 the next $500
million; .925% million; .37%
on the next $500 on the next
million; and $500 million;
.90% on amounts and .36% on amounts
thereafter thereafter
- -------------------------------------------------------------------------------------------------
GT Global Japan Growth Fund .975% on the .39% on the $99,184,283
(A) first $500 first $500
million; .95% on million; .38% on
the next $500 the next $500
million; .925% million; .37%
on the next $500 on the next
million; and $500 million;
.90% on amounts and .36% on
thereafter amounts thereafter
- -------------------------------------------------------------------------------------------------
GT Global New Pacific Growth .975% on the .39% on the $193,115,287
Fund (A) first $500 first $500
million; .95% on million; .38% on
the next $500 the next $500
million; .925% million; .37%
on the next $500 on the next
million; and $500 million;
.90% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
___________________________
1 For information about advisory fees and total compensation paid to Chancellor
LGT and its affiliates during the most recently completed fiscal year, see the
Annual Report of the applicable Fund.
20
<PAGE>
- -------------------------------------------------------------------------------------------------
ADVISORY FEE SUB-ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE (BASED ON AVERAGE FOR THE MOST
NAME OF COMPANY AND FUND DAILY DAILY RECENTLY COMPLETED
NET ASSETS) NET ASSETS)1 FISCAL YEAR
- -------------------------------------------------------------------------------------------------
GT Global Worldwide Growth .975% on the .39% on the $151,406,807
Fund (A) first $500 first $500
million; .95% on million; .38% on
the next $500 the next $500
million; .925% million; .37%
on the next $500 on the next
million; and $500 million;
.90% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
GT Global America Small Cap 0% (The advisory 0% (The $33,710,743
Growth Fund (C) fee is imposed sub-advisory fee
on the Small Cap is imposed on
Growth the Small Cap
Portfolio.)2 Growth
Portfolio.)
- -------------------------------------------------------------------------------------------------
GT Global America Mid Cap .725% on the .29% on the $512,282,162
Growth Fund (C) first $500 first $500
million; .70% on million; .28% on
the next $500 the next $500
million; .675% million; .27% on
on the next $500 the next $500
million; and million; and
.65% on amounts .26% on amounts
thereafter thereafter
- -------------------------------------------------------------------------------------------------
GT Global America Value Fund (C) 0% (The advisory 0% (The $24,824,615
fee is imposed sub-advisory fee
on the Value is imposed on
Portfolio.)1 the Value Portfolio.)
- -------------------------------------------------------------------------------------------------
GROWTH PORTFOLIO
- -------------------------------------------------------------------------------------------------
Small Cap Growth Portfolio .475% on the .29% on the $33,710,743
first $500 first $500
million; .45% on million; .28% on
the next $500 the next $500
million; .425% million; .27%
on the next $500 on the next
million; and $500 million;
.40% on amounts and .26% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
Value Portfolio .475% on the .29% on the $24,824,615
first $500 first $500
million; .45% on million; .28% on
the next $500 the next $500
million; .425% million; .27%
on the next $500 on the next
million; and $500 million;
.40% on amounts and .26% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
__________________________
2 The Fund is also subject to an administration fee of 0.25% of the Fund's
average daily net assets.
21
<PAGE>
- -------------------------------------------------------------------------------------------------
ADVISORY FEE SUB-ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE (BASED ON AVERAGE FOR THE MOST
NAME OF COMPANY AND FUND DAILY DAILY RECENTLY COMPLETED
NET ASSETS) NET ASSETS)1 FISCAL YEAR
- -------------------------------------------------------------------------------------------------
G.T. GLOBAL VARIABLE INVESTMENT
SERIES
- -------------------------------------------------------------------------------------------------
GT Global Variable America .75% .30% $43,976,824
Fund (F)
- -------------------------------------------------------------------------------------------------
GT Global Variable New 1.00% .40% $16,490,084
Pacific Fund (E)
- -------------------------------------------------------------------------------------------------
GT Global Variable Europe 1.00% .40% $27,409,750
Fund (E)
- -------------------------------------------------------------------------------------------------
GT Global Variable 1.00% .40% $5,929,179
International Fund (E)
- -------------------------------------------------------------------------------------------------
GT Global Money Market Fund (G) .50% .20% $26,964,207
- -------------------------------------------------------------------------------------------------
G.T. GLOBAL VARIABLE
INVESTMENT TRUST
- -------------------------------------------------------------------------------------------------
GT Global Variable 1.00% .40% $68,186,143
Telecommunications Fund (E)
- -------------------------------------------------------------------------------------------------
GT Global Variable Emerging 1.00% .40% $16,508,757
Markets Fund (E)
- -------------------------------------------------------------------------------------------------
GT Global Variable 1.00% .40% $8,745,185
Infrastructure Fund (E)
- -------------------------------------------------------------------------------------------------
GT Global Variable Latin 1.00% .40% $28,786,217
America Fund (E)
- -------------------------------------------------------------------------------------------------
GT Global Variable Growth & 1.00% .40% $50,356,264
Income Fund (E)
- -------------------------------------------------------------------------------------------------
GT Global Variable Strategic .75% .30% $28,496,692
Income Fund (F)
- -------------------------------------------------------------------------------------------------
GT Global Variable Natural 1.00% .40% $16,709,007
Resources Fund (E)
- -------------------------------------------------------------------------------------------------
GT Global Variable Global .75% .30% $8,251,027
Government Income Fund (F)
- -------------------------------------------------------------------------------------------------
GT Global Variable U.S. .75% .30% $7,372,636
Government Income Fund (F)
- -------------------------------------------------------------------------------------------------
G.T. INVESTMENT FUNDS, INC.
- -------------------------------------------------------------------------------------------------
GT Global Government Income .725% on the .29% on the $282,109,478
Fund (C) first $500 first $500
million; .70% on million; .28% on
the next $1 the next $1
billion; .675% billion; .27% on
on the next $1 the next $1
billion; and billion; and
.65% on amounts .26% on amounts
thereafter thereafter
- -------------------------------------------------------------------------------------------------
22
<PAGE>
- -------------------------------------------------------------------------------------------------
ADVISORY FEE SUB-ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE (BASED ON AVERAGE FOR THE MOST
NAME OF COMPANY AND FUND DAILY DAILY RECENTLY COMPLETED
NET ASSETS) NET ASSETS)1 FISCAL YEAR
- -------------------------------------------------------------------------------------------------
GT Global High Income Fund (C) 0% (The advisory 0% (The $365,792,411
fee is imposed sub-advisory fee
on the Global is imposed on
High Income the Global High
Portfolio.)1 Income
Portfolio.)
- -------------------------------------------------------------------------------------------------
GT Global Strategic Income .725% on the .29% on the $420,623,795
Fund (C) first $500 first $500
million; .70% on million; .28% on
the next $1 the next $1
billion; .675% billion; .27% on
on the next $1 the next $1
billion; and billion; and
.65% on amounts .26% on amounts
thereafter thereafter
- -------------------------------------------------------------------------------------------------
GT Global Health Care Fund .975% on the .39% on the $626,342,117
(B) first $500 first $500
million; .95% on million; .38% on
the next $500 the next $500
million; .925% million; .37%
on the next $500 on the next
million; and $500 million;
.90% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
GT Global Infrastructure 0% (The advisory 0% (The $98,019,059
Fund (B) fee is imposed sub-advisory fee
on the Global is imposed on
Infrastructure the Global
Portfolio.)1 Infrastructure
Portfolio.)
- -------------------------------------------------------------------------------------------------
GT Global Natural Resources 0% (The advisory 0% (The $171,673,573
Fund (B) fee is imposed sub-advisory fee
on the Global is imposed on
Natural the Global
Resources Natural
Portfolio.)1 Resources
Portfolio.)
- -------------------------------------------------------------------------------------------------
GT Global Telecommunications .975% on the .39% on the $1,721,119,059
Fund (B) first $500 first $500
million; .95% on million; .38% on
the next $500 the next $500
million; .925% million; .37%
on the next $500 on the next
million; and $500 million;
.90% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
GT Global Financial Services 0% (The advisory 0% (The $80,961,634
Fund (B) fee is imposed sub-advisory fee
on the Global is imposed on
Financial the Global
Services Financial
Portfolio.)1 Services
Portfolio.)
- -------------------------------------------------------------------------------------------------
23
<PAGE>
- -------------------------------------------------------------------------------------------------
ADVISORY FEE SUB-ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE (BASED ON AVERAGE FOR THE MOST
NAME OF COMPANY AND FUND DAILY DAILY RECENTLY COMPLETED
NET ASSETS) NET ASSETS)1 FISCAL YEAR
- -------------------------------------------------------------------------------------------------
GT Global Consumer Products 0% (The advisory 0% (The $162,662,313
and Services Fund (B) fee is imposed sub-advisory fee
on the Global is imposed on
Consumer the Global
Products and Consumer
Services Products and
Portfolio.)1 Services
Portfolio.)
- -------------------------------------------------------------------------------------------------
GT Global Emerging Markets .975% on the .39% on the $242,901,049
Fund (B) first $500 first $500
million; .95% on million; .38% on
the next $500 the next $500
million; .925% million; .37%
on the next $500 on the next
million; and $500 million;
.90% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
GT Global Latin America .975% on the .39% on the $293,580,062
Growth Fund (B) first $500 first $500
million; .95% on million; .38% on
the next $500 the next $500
million; .925% million; .37%
on the next $500 on the next
million; and $500 million;
.90% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
GT Global Growth and Income .975% on the .39% on the $752,477,823
Fund (C) first $500 first $500
million; .95% on million; .38% on
the next $500 the next $500
million; .925% million; .37%
on the next $500 on the next
million; and $500 million;
.90% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
GT Global Developing Markets .975% on the .39% on the $457,379,188
Fund (B) first $500 first $500
million; .95% on million; .38% on
the next $500 the next $500
million; .925% million; .37%
on the next $500 on the next
million; and $500 million;
.90% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
GLOBAL INVESTMENT PORTFOLIO
- -------------------------------------------------------------------------------------------------
24
<PAGE>
- -------------------------------------------------------------------------------------------------
ADVISORY FEE SUB-ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE (BASED ON AVERAGE FOR THE MOST
NAME OF COMPANY AND FUND DAILY DAILY RECENTLY COMPLETED
NET ASSETS) NET ASSETS)1 FISCAL YEAR
- -------------------------------------------------------------------------------------------------
Global Consumer Products and .725% on the .39% on the $162,616,034
Services Portfolio first $500 first $500
million; .70% on million; .38% on
the next $500 the next $500
million; .675% million; .37%
on the next $500 on the next
million; and $500 million;
.65% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
Global Financial Services .725% on the .39% on the $80,246,799
Portfolio first $500 first $500
million; .70% on million; .38% on
the next $500 the next $500
million; .675% million; .37%
on the next $500 on the next
million; and $500 million;
.65% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
Global Infrastructure .725% on the .39% on the $98,575,211
Portfolio first $500 first $500
million; .70% on million; .38% on
the next $500 the next $500
million; .675% million; .37%
on the next $500 on the next
million; and $500 million;
.65% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
Global Natural Resources .725% on the .39% on the $171,031,199
Portfolio first $500 first $500
million; .70% on million; .38% on
the next $500 the next $500
million; .675% million; .37%
on the next $500 on the next
million; and $500 million;
.65% on amounts and .36% on
thereafter amounts
thereafter
- -------------------------------------------------------------------------------------------------
GLOBAL HIGH INCOME PORTFOLIO .475% on the .29% on the $368,639,850
first $500 first $500
million; .45% on million; .28% on
the next $1 the next $1
billion; .425% billion; .27% on
on the next $1 the next $1
billion; and billion; and
.40% on amounts .26% on amounts
thereafter, plus thereafter, plus
2% of the 0.8% of the
Portfolio's Portfolio's
total investment total investment
income income
- -------------------------------------------------------------------------------------------------
G.T. INVESTMENT PORTFOLIOS, INC.
- -------------------------------------------------------------------------------------------------
GT Global Dollar Fund (D) .50% .20% $276,888,755
- -------------------------------------------------------------------------------------------------
G.T. GLOBAL SERIES TRUST
- -------------------------------------------------------------------------------------------------
25
<PAGE>
- -------------------------------------------------------------------------------------------------
ADVISORY FEE SUB-ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE (BASED ON AVERAGE FOR THE MOST
NAME OF COMPANY AND FUND DAILY DAILY RECENTLY COMPLETED
NET ASSETS) NET ASSETS)1 FISCAL YEAR
- -------------------------------------------------------------------------------------------------
GT Global New Dimension Fund 0% (Advisory 0% (Sub-Advisory $35,569,014
Fees are paid by Fees are paid by
the GT Global the GT Global
Theme Funds.) Theme Funds. )
- -------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------------
The expense caps correspond to the following percents of the Funds' average
daily net assets, exclusive of brokerage commissions, taxes, interest and
extraordinary expenses:
Expense Cap A Class A 2.00% Expense Cap D Class A 1.00%
Class B 2.65% Class B 1.75%
Advisor Class 1.65% Advisor Class 1.00%
Expense Cap B Class A 2.00% Expense Cap E All Shares 1.25%
Class B 2.50% Expense Cap F All Shares 1.00%
Advisor Class 1.50% Expense Cap G All Shares .75%
Expense Cap C Class A 1.75%
Class B 2.40%
Advisor Class 1.40%
26
<PAGE>
EXHIBIT F
ADVISORY AGREEMENT FEE SCHEDULE FOR AIM FUNDS
- --------------------------------------------------------------------------------
ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE DAILY FOR THE MOST RECENTLY
NAME OF COMPANY AND FUND NET ASSETS) COMPLETED FISCAL YEAR
- --------------------------------------------------------------------------------
AIM ADVISOR FUNDS, INC.
- --------------------------------------------------------------------------------
AIM Advisor Flex Fund .75%1 $625,853,949
- --------------------------------------------------------------------------------
AIM Advisor Large Cap Value .75%1 $174,849,143
Fund
- --------------------------------------------------------------------------------
AIM Advisor International 1.00%2 $103,739,567
Value Fund
- --------------------------------------------------------------------------------
AIM Advisor MultiFlex Fund 1.00%3 $387,498,357
- --------------------------------------------------------------------------------
AIM Advisor Real Estate Fund .90%4 $65,098,868
- --------------------------------------------------------------------------------
AIM EQUITY FUNDS, INC.
- --------------------------------------------------------------------------------
AIM Aggressive Growth Fund .80% of the first $150 $3,493,585,350
million and .625% of
amounts in excess of
$150 million
- --------------------------------------------------------------------------------
AIM Blue Chip Fund .75% of the first $350 $979,685,761
million and .625% of
amounts in excess of
$350 million
- --------------------------------------------------------------------------------
AIM Capital Development Fund .75% of the first $350 $1,010,135,296
million and .625% of
amounts in excess of
$350 million
- --------------------------------------------------------------------------------
AIM Charter Fund 1.0% of the first $30 $4,752,019,015
million; .75% of the
next $120 million; and
.625% of amounts in
excess of $150 million5
- --------------------------------------------------------------------------------
AIM Constellation Fund 1.0% of the first $30 $13,912,446,119
million; .75% of the
next $120 million; and
.625% of amounts in
excess of $150 million5
- --------------------------------------------------------------------------------
27
<PAGE>
- --------------------------------------------------------------------------------
ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE DAILY FOR THE MOST RECENTLY
NAME OF COMPANY AND FUND NET ASSETS) COMPLETED FISCAL YEAR
- --------------------------------------------------------------------------------
AIM Weingarten Fund 1.0% of the first $30 $6,483,927,020
million; .75% of the
next $320 million; and
.625% of amounts in
excess of $350 million(5)
- --------------------------------------------------------------------------------
AIM FUNDS GROUP
- --------------------------------------------------------------------------------
AIM Balanced Fund .75% of the first $150 $1,277,805,629
million and .50% of
amounts in excess of
$150 million
- --------------------------------------------------------------------------------
AIM Global Utilities Fund .60% of the first $200 $277,498,403
million; .50% of the
next $300 million; .40%
of the next $500
million; and .30% in
excess of $1 billion
- --------------------------------------------------------------------------------
AIM Intermediate Government .50% of the first $200 $265,925,326
Securities million; .40% of the
next $300 million; .35%
of the next $500
million; and .30% in
excess of $1 billion
- --------------------------------------------------------------------------------
AIM Growth Fund .80% of the first $150 $616,924,481
million and .625% of
amounts in excess of
$150 million
- --------------------------------------------------------------------------------
AIM High Yield Fund .625% of the first $200 $3,605,716,624
million; .55% of the
next $300 million; .50%
of the next $500
million; and .45% in
excess of $1 billion
- --------------------------------------------------------------------------------
AIM Income Fund .50% of the first $200 $489,526,640
million; .40% of the
next $300 million; .35%
of the next $500
million; and .30% in
excess of $1 billion
- --------------------------------------------------------------------------------
AIM Money Market Fund .55% of the first $1 $750,048,007
billion and .50% in
excess of $1 billion
- --------------------------------------------------------------------------------
28
<PAGE>
- --------------------------------------------------------------------------------
ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE DAILY FOR THE MOST RECENTLY
NAME OF COMPANY AND FUND NET ASSETS) COMPLETED FISCAL YEAR
- --------------------------------------------------------------------------------
AIM Municipal Bond Fund .50% of the first $200 $370,535,277
million; .40% of the
next $300 million; .35%
of the next $500
million; and .30% in
excess of $1 billion
AIM Value Fund .80% of the first $150 $13,824,307,149
million and .625% in
excess of $150 million(6)
- --------------------------------------------------------------------------------
AIM INTERNATIONAL FUNDS, INC.
- --------------------------------------------------------------------------------
AIM Asian Growth Fund .95% of the first $500 $2,743,531
million and .90% of
amounts in excess of
$500 million(7)
- --------------------------------------------------------------------------------
AIM European Development Fund .95% of the first $500 $4,315,458
million and .90% of
amounts in excess of
$500 million(7)
- --------------------------------------------------------------------------------
AIM International Equity Fund .95% of the first $2,317,723,349
billion and .90% of
amounts in excess of $1
billion8
- --------------------------------------------------------------------------------
AIM Global Income Fund .70% of the first $63,888,544
billion and .65% of
amounts in excess of $1
billion(9)
- --------------------------------------------------------------------------------
AIM Global Growth Fund .85% of the first $421,251,030
billion and .80% of
amounts in excess of $1
billion
- --------------------------------------------------------------------------------
AIM Global Aggressive Growth .90% of the first $2,260,087,933
Fund billion and .85% of
amounts in excess of $1
billion
- --------------------------------------------------------------------------------
AIM INVESTMENT SECURITIES
FUNDS
- --------------------------------------------------------------------------------
AIM Limited Maturity .20% of the first $500 $440,551,972
Treasury Fund million and .175% in
excess of $500 million
- --------------------------------------------------------------------------------
29
<PAGE>
- --------------------------------------------------------------------------------
ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE DAILY FOR THE MOST RECENTLY
NAME OF COMPANY AND FUND NET ASSETS) COMPLETED FISCAL YEAR
- --------------------------------------------------------------------------------
AIM SUMMIT FUND, INC. 1.00% of the first $10 $1,645,427,899
million; .75% of the
next $140 million; and
.625% of amounts in
excess of $150 million(10)
- --------------------------------------------------------------------------------
AIM TAX EXEMPT FUNDS, INC.
- --------------------------------------------------------------------------------
AIM High Income Municipal .60% of the first $500 $13,736,161
Fund million; .55% of the
next $500 million; .50%
of the next $500
million; and .45% of
amounts in excess of
$1.5 billion(11)
- --------------------------------------------------------------------------------
AIM Tax-Exempt Bond Fund of .50%12 $39,350,145
Connecticut
- --------------------------------------------------------------------------------
AIM Tax-Exempt Cash Fund .35% $51,861,063
- --------------------------------------------------------------------------------
AIM Tax-Free Intermediate .30% of the first $500 $193,457,422
Fund million; .25% of the
first $500 million; and
.20% of amounts in
excess of $1 billion
- --------------------------------------------------------------------------------
AIM VARIABLE INSURANCE
FUNDS, INC.
- --------------------------------------------------------------------------------
AIM V.I. Capital .65% of the first $250 $518,951,143
Appreciation Fund million and .60% of
amounts in excess of
$250 million
- --------------------------------------------------------------------------------
AIM V.I. Diversified Income .60% of the first $250 $92,801,459
Fund million and .55% of
amounts in excess of
$250 million
- --------------------------------------------------------------------------------
AIM V.I. Government .50% of the first $250 $34,818,984
Securities Fund million and .45% of
amounts in excess of
$250 million
- --------------------------------------------------------------------------------
AIM V.I. Growth Fund .65% of the first $250 $263,728,239
million and .60% of
amounts in excess of
$250 million
- --------------------------------------------------------------------------------
30
<PAGE>
- --------------------------------------------------------------------------------
ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE DAILY FOR THE MOST RECENTLY
NAME OF COMPANY AND FUND NET ASSETS) COMPLETED FISCAL YEAR
- --------------------------------------------------------------------------------
AIM V.I. Growth and Income .65% of the first $250 $679,090,534
million and .60% of
amounts in excess of
$250 million
- --------------------------------------------------------------------------------
AIM V.I. International .75% of the first $250 $209,002,303
Equity Fund million and .70% of
amounts in excess of
$250 million
- --------------------------------------------------------------------------------
AIM V.I. Money Market Fund .40% of the first $250 $54,028,632
million and .35% of
amounts in excess of
$250 million
- --------------------------------------------------------------------------------
AIM V.I. Global Utilities .65% of the first $250 $22,915,161
Fund million and .60% of
amounts in excess of
$250 million
- --------------------------------------------------------------------------------
AIM V.I. Value Fund .65% of the first $250 $710,899,635
million and .60% of
amounts in excess of
$250 million
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS CO.
- --------------------------------------------------------------------------------
Liquid Asset Portfolio .15%(13) $3,788,439,224
- --------------------------------------------------------------------------------
Prime Portfolio .20% of the first $100 $7,378,100,156
million; .15% of the
next $100 million; .10%
of the next $100
million; .06% of the
next $1.2 billion; and
.05% of amounts in
excess of $1.5 billion
- --------------------------------------------------------------------------------
SHORT TERM INVESTMENTS TRUST
- --------------------------------------------------------------------------------
Treasury .15% of the first $300 $4,887,208,702
million; .06% of the
next $1.2 billion; and
.05% of the amounts in
excess of $1.5 billion
- --------------------------------------------------------------------------------
31
<PAGE>
- --------------------------------------------------------------------------------
ADVISORY FEE TOTAL NET ASSETS
(BASED ON AVERAGE DAILY FOR THE MOST RECENTLY
NAME OF COMPANY AND FUND NET ASSETS) COMPLETED FISCAL YEAR
- --------------------------------------------------------------------------------
Treasury Tax Advantage .20% of the first $250 $170,033,083
Portfolio million; .15% of the
next $250 million; and
.10% of the amounts in
excess of $500 million(14)
- --------------------------------------------------------------------------------
TAX-FREE INVESTMENTS CO.
- --------------------------------------------------------------------------------
Cash Reserve Portfolio .25% of the first $500 $991,816,762
million and .20% of
amounts in excess of
$500 million(15)
- -------------------------------------------------------------------------------
32
<PAGE>
NOTES:
- -----
1 AIM has agreed to pay INVESCO Capital Management, which serves as
sub-advisor, a fee equal to .20% of the average daily net asset value of the
Fund for each of the Large Cap Value Fund and Flex Fund, and .10% of the average
net asset value of the Income Fund. (The previous advisor agreed to waive
advisory fees payable by the Income Fund for a three-year period beginning
October 1, 1995 so that the advisory fee would not exceed .40% of average daily
net assets. AIM has voluntarily agreed to assume the remaining term of the
previous advisor's commitment).
A portion of Flex Fund's administrative fees are being waived due to the
following expense caps. Total expenses are capped for the first $500 million at
the annual rate of $1.45% for Class A and 2.20% for Class C; on the next $500
million of net assets, expenses shall not exceed 1.40% for Class A and 2.15% for
Class C; on the net $1 billion of net assets, expenses shall not exceed 1.35%
for Class A and 2.10% for Class C; and on all assets over $2 billion, expenses
shall not exceed 1.30% for Class A and 2.05% for Class C.
2 AIM has agreed to pay INVESCO Global Asset Management Limited (IGAM),
which serves as sub-advisor, a fee equal to .35% of average net assets up to $50
million; .30% on average net assets over $50 million up to $100 million; and
.25% on average net assets in excess of $100 million of the International Value
Fund.
A portion of International Value Fund's administrative fees are being waived due
to the following expense caps. Total expenses are capped for the first $100
million at the annual rate of 1.70% for Class A and 2.45% for Class C; on the
next $400 million of net assets, expenses shall not exceed 1.65% for Class A and
2.40% for Class C; on the next $500 million of net assets, expenses shall not
exceed 1.60% for Class A and 2.35% for Class C; on assets over $l billion,
expenses shall not exceed 1.55% for Class A and 2.30% for Class C; and on all
assets over $2 billion, expenses shall not exceed l.50% for Class A and 2.25%
for Class C.
3 AIM has agreed to pay INVESCO Management & Research, Inc., which serves as
a sub-advisor, a fee equal to .35% of average net assets on the first $500
million of assets and .25% of average net assets in excess of $500 million of
the MultiFlex Fund.
A portion of MultiFlex Fund's administrative fees are being waived due to the
following expense caps. Total expenses are capped for the first $100 million at
the annual rate of 1.70% for Class A and 2.45% for Class C; on the next $400
million of net assets, expenses shall not exceed 1.65% for Class A and 2.40% for
Class C; on the next $500 million of net assets, expenses shall not exceed 1.60%
for Class A and 2.35% for Class C; on assets over $1 billion, expenses shall not
exceed 1.55% for Class A and 2.30% for Class C; and on all assets over $2
billion, expenses shall not exceed 1.50% for Class A and 2.25% for Class C.
4 AIM has agreed to pay INVESCO Realty Advisors, Inc., which serves as
sub-advisor, a fee equal to .35% of average net assets on the first $100 million
of assets and .25% of average net assets in excess of $100 million of the Real
Estate Fund.
5 AIM pays 50% of the advisory fees it receives with respect to AIM Charter
Fund, AIM Constellation Fund and AIM Weingarten Fund to A I M Capital
Management, Inc. as Sub-Advisor for such funds. AIM and A I M Capital
Management, Inc. are voluntarily waiving fees for AIM Weingarten Fund for net
asset levels in excess of $2 billion. In lieu of the contractual agreement, fees
are being calculated at the annual rate of .60% of the Fund's average daily net
assets in excess of $2 billion to and including $3 billion, plus .575% of the
Fund's average daily net assets in excess of $3 billion to and including $4
billion, plus .55% of the Fund's average daily net assets in excess of S4
billion. AIM and A I M Capital Management, Inc. are voluntarily waiving fees for
AIM Constellation Fund and AIM Charter Fund for net asset levels in excess of $2
billion. In lieu of the contractual agreement, fees are being calculated at the
annual rate of .60% of the Fund's average daily net assets in excess of $2
billion.
33
<PAGE>
6 AIM is voluntarily waiving a portion of the fees for AIM Value Fund
for net asset levels in excess of $2 billion. In lieu of the contractual
agreement, fees are being calculated at the annual rate of .60% of the Fund's
average daily net assets in excess of $2 billion.
7 AIM has agreed to pay IGAM, which serves as sub-advisor, a fee equal to
.20% of the first $500 million of net assets and .175% of net assets over $500
million for the Fund for each of the Asian Growth Fund and European Development
Fund.
8 AIM has agreed to waive fees for AIM International Equity Fund. In lieu of
the contractual agreement, fees are being calculated at the annual rate of .90%
of the Fund's average daily net assets in excess of $500 million to and
including $1 billion, plus .85% of the Fund's average daily net assets exceeding
$l billion.
9 AIM has agreed on a voluntary basis to waive fees and reimburse expenses
to the extent that the expense ratios do not exceed 1.25% and 1.75% for Class A
& B respectively.
10 AIM bears a portion of the fee reduction obligation. The other portion is
borne by TradeStreet, which serves as sub-advisor to AIM Summit Fund, Inc. AIM
and TradeStreet reduce their fees in proportion to the fees being received from
AIM Summit Fund, Inc. TradeStreet has agreed to accept a fee of .50% of the
first $10 million of the Fund's average daily net assets, .35% of the next S140
million of the Fund's average daily net assets, .225% of the next $550 million
of the Fund's average daily net assets and .15% of the Fund's average daily net
assets in excess of $700 million.
11 AIM is currently waiving all advisory fees on the High Yield Municipal
Bond Fund. AIM has agreed to limit expenses of this Fund as follows: Class A
.25% of average daily net assets; Class B & C 1.00% of average daily net assets.
AIM has agreed to this limit until March 31, 1998; however, it may be decided to
continue this limit.
12 AIM is currently waiving a portion of the advisory fee for AIM Tax Exempt
Bond Fund of Connecticut. In lieu of the contractual agreement, fees are
currently calculated at the annual rate of .30% of the Fund's average daily net
assets.
13 AIM is currently voluntarily waiving a portion of the advisory fee for the
Liquid Assets Portfolio.
14 AIM has agreed to reduce its fee on the Tax Advantage Portfolio to the
extent required so that the amount of ordinary expenses of the Portfolio
(excluding interest, taxes, brokerage commissions and extraordinary expenses) do
not exceed an annual rate of .20% of the average daily net assets.
15 As of June 1, 1985, AIM agreed to reduce its fees from Tax-Free
Investments Co. to the extent necessary to cause the expense ratio of the
Institutional Cash Reserve Shares of Tax-Free Investments Co. not to exceed .20%
(exclusive of interest, taxes, brokerage commissions, directors' fees and
registration fees payable to the SEC).
34
<PAGE>
EXHIBIT G
SALES CHARGE SCHEDULE OF GT GLOBAL FUNDS
----------------------------------------
GROUP I:
G.T. GLOBAL GROWTH SERIES
- -------------------------
GT Global Europe Growth Fund
GT Global International Growth Fund
GT Global Japan Growth Fund
GT Global New Pacific Growth Fund
GT Global Worldwide Growth Fund
GT Global America Mid Cap Growth Fund
GT Global America Small Cap Growth Fund
GT Global America Value Fund
G.T. INVESTMENT FUNDS, INC.
- ---------------------------
GT Global Growth & Income Fund
- --------------------------------------------------------------------------------
AMOUNT OF PURCHASE CURRENT SALES PROPOSED SALES
CHARGES AS % OF CHARGES AS % OF
OFFERING PRICE OFFERING PRICE
- --------------------------------------------------------------------------------
less than $25,000 4.75% 5.50%
$25,000 but less than $50,000 4.75% 5.25%
$50,000 but less than $100,000 4.00% 4.75%
$100,000 but less than $250,000 3.00% 3.75%
$250,000 but less than $500,000 2.00% 3.00%
$500,000 but less than $1,000,000 0.00%* 2.00%
$1,000,000 or more 0.00%* 0.00%*
*All shares *A CDSC of 1% of
purchased without the lesser of the
a sales charge value of the shares
based on the redeemed (excluding
aggregate purchase reinvested
amount equaling at dividends and
least $500,000 capital gain
will be subject to distributions) or
a contingent the total original
deferred sales cost of such shares
charge for the applies to
first year after purchases of
their purchase $1,000,000 or more
equal to 1% of the that are redeemed
lower of the within 18 months of
original purchase the date of
price or the NAV purchase.
of such shares at
redemption.
- --------------------------------------------------------------------------------
35
<PAGE>
GROUP II:
G.T. INVESTMENT FUNDS, INC.
- ---------------------------
GT Global Developing Markets Fund
GT Global Emerging Markets Fund
GT Global Latin America Growth Fund
GT Global Consumer Products and Services Fund
GT Global Financial Services Fund
GT Global Health Care Fund
GT Global Infrastructure Fund
GT Global Natural Resources Fund
GT Global Telecommunications Fund
GT Global Government Income Fund
GT Global High Income Fund
GT Global Strategic Income Fund
G.T. GLOBAL SERIES TRUST
- ------------------------
GT Global New Dimension Fund
- --------------------------------------------------------------------------------
AMOUNT OF PURCHASE CURRENT SALES PROPOSED SALES
CHARGES AS % OF CHARGES AS % OF
OFFERING PRICE OFFERING PRICE
- --------------------------------------------------------------------------------
less than $25,000 4.75% 4.75%
$25,000 but less than $50,000 4.75% 4.75%
$50,000 but less than $100,000 4.00% 4.00%
$100,000 but less than $250,000 3.00% 3.75%
$250,000 but less than $500,000 2.00% 2.50%
$500,000 but less than $1,000,000 0.00%* 2.00%
$1,000,000 or more 0.00%* 0.00%*
*All shares *A CDSC of 1% of
purchased without the lesser of the
a sales charge value of the shares
based on the redeemed (excluding
aggregate purchase reinvested
amount equaling at dividends and
least $500,000 capital gain
will be subject to distributions) or
a contingent the total original
deferred sales cost of such shares
charge for the applies to
first year after purchases of
their purchase $1,000,000 or more
equal to 1% of the that are redeemed
lower of the within 18 months of
original purchase the date of
price or the NAV purchase.
of such shares at
redemption.
- -------------------------------------------------------------------------------
36
<PAGE>
EXHIBIT H
MASTER DISTRIBUTION PLAN
OF
[NAME OF TRUST]
(CLASS A SHARES AND CLASS C SHARES)
SECTION 1. [Name of Trust], a Delaware business trust (the "Fund"), on
behalf of the series of shares of beneficial interest set forth in Schedule A to
this plan (the "Portfolios"), may act as a distributor of the Class A Shares and
Class C Shares (each a "Class") of such Portfolios as described in Schedule A to
this plan (the "Shares") of which the Fund is the issuer, pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act"), according to the
terms of this Distribution Plan (the "Plan").
SECTION 2. The Fund may incur as a distributor of the Shares, expenses at
the rates set forth in Schedule A per annum of the average daily net assets of
the Fund attributable to the Shares, subject to any applicable limitations
imposed from time to time by applicable rules of the NASD Regulation, Inc.
SECTION 3. Amounts set forth in Schedule A may be expended when and if
authorized in advance by the Fund's Board of Trustees. Such amounts may be used
to finance any activity which is primarily intended to result in the sale of the
Shares, including, but not limited to, expenses of organizing and conducting
sales seminars, advertising programs, finders fees, printing prospectuses and
statements of additional information (and supplements thereto) and reports for
other than existing shareholders, preparation and distribution of advertising
material and sales literature, supplemental payments to dealers and other
institutions as asset-based sales charges. Amounts set forth on Schedule A may
also be used to finance payments of service fees under a shareholder service
arrangement to be established by A I M Distributors, Inc. ("Distributors") as
the Fund's distributor in accordance with Section 4, and the costs of
administering the Plan. To the extent that amounts paid hereunder are not used
specifically to reimburse Distributors for any such expense, such amounts may be
treated as compensation for distribution-related services of Distributors or its
predecessor, GT Global, Inc. All amounts expended pursuant to the Plan shall be
paid to Distributors and are the legal obligation of the Fund and not of
Distributors. That portion of the amounts paid under the Plan that is not paid
or advanced by Distributors to dealers or other institutions that provide
personal continuing shareholder service as a service fee pursuant to Section 4
shall be deemed an asset-based sales charge. No provision of this Plan shall be
interpreted to prohibit any payments by the Fund during periods when the Fund
has suspended or otherwise limited sales.
SECTION 4.
(a) Amounts expended by the Fund under the Plan shall be used in
part for the implementation by Distributors of shareholder
service arrangements. The maximum service fee paid to any
service provider shall be twenty-five one-hundredths of one
percent (0.25%), or such lower rate for the Portfolio and Class
as is specified on Schedule A, per annum of the average daily net
assets of the Fund attributable to the Shares owned by the
customers of such service provider.
37
<PAGE>
(b) Pursuant to this program, Distributors may enter into agreements
substantially in the form attached hereto as Exhibit A ("Service
Agreements") with such broker-dealers ("Dealers") as may be
selected from time to time by Distributors for the provision of
distribution-related personal shareholder services in connection
with the sale of Shares to the Dealers' clients and customers
("Customers") to Customers who may from time to time directly or
beneficially own Shares. The distribution-related personal
continuing shareholder services to be rendered by Dealers under
the Service Agreements may include, but shall not be limited to,
the following: (i) distributing sales literature; (ii) answering
routine Customer inquiries concerning the Fund and the Shares;
(iii) assisting Customers in changing dividend options, account
designations and addresses, and in enrolling into any of several
retirement plans offered in connection with the purchase of the
Shares; (iv) assisting in the establishment and maintenance of
customer accounts and records, and in the processing of purchase
and redemption transactions; (v) investing dividends and capital
gains distributions automatically in Shares; and (vi) providing
such other information and services as the Fund or the Customer
may reasonably request.
(c) Distributors may also enter into Bank Shareholder Service Agreements
substantially in the form attached hereto as Exhibit B ("Bank
Agreements") with selected banks acting in an agent capacity for
their customers ("Banks"). Banks acting in such capacity will
provide some or all of the shareholder services to their customers
as set forth in the Bank Agreements from time to time.
(d) Distributors may also enter into Agency Pricing Agreements
substantially in the form attached hereto as Exhibit C ("Pricing
Agreements") with selected retirement plan service providers
acting in an agency capacity for their customers ("Retirement
Plan Providers"). Retirement Plan Providers acting in such a
capacity will provide some or all of the shareholders services to
their customers as set forth in the Pricing Agreements from time
to time.
(e) Distributors may also enter into Shareholder Service Agreements
substantially in the form attached hereto as Exhibit D ("Bank
Trust Department Agreements and Brokers for Bank Trust Department
Agreements") with selected bank trust departments and brokers for
bank trust departments. Such bank trust departments and brokers
for bank trust departments will provide some or all of the
shareholder services to their customers as set forth in the Bank
Trust Department Agreements and Brokers for Bank Trust Department
Agreements.
SECTION 5. Any amendment to this Plan that requires the approval of the
shareholders of a Class pursuant to Rule 12b-1 under the 1940 Act shall become
effective as to such Class upon approval of such amendment by a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of such Class,
PROVIDED that the Board of Trustees of the Fund has approved such amendment in
accordance with the provisions of Section 6 of this Plan.
SECTION 6. This Plan, any amendment to this Plan and any agreements
related to this Plan shall become effective with respect to any Class of any
Portfolio immediately upon receipt by the Fund of both (a ) affirmative vote of
a majority of the Board of Trustees of the Fund, and (b) the affirmative vote of
a majority of those trustees of the Fund who are not "interested persons" of the
Fund (as defined in the 1940 Act) and have no direct or indirect financial
interest in the operation of this Plan or any agreements related to it (the
"Disinterested Trustees"), cast in person at a meeting called for the purpose of
voting on this Plan or such agreements. Notwithstanding the forgoing, no such
38
<PAGE>
amendment that requires the approval of the shareholders of a Class of a
Portfolio shall become effective as to such Class until such amendment has been
approved by the shareholders of such Class in accordance with the provisions of
Section 5 of this Plan.
SECTION 7. Unless sooner terminated pursuant to Section 9, this Plan shall
continue in effect until _________ and thereafter shall continue in effect so
long as such continuance is specifically approved, at least annually, in the
manner provided for approval of this Plan in Section 6.
SECTION 8. Distributors shall provide to the Fund's Board of Trustees and
the Board of Trustees shall review, at least quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.
SECTION 9. This Plan may be terminated with respect to the shares of any
Class of any Portfolio at any time by vote of a majority of the Disinterested
Trustees, or by a vote of a majority of the outstanding voting securities of
such Class of such Portfolio. Upon termination of this Plan with respect to any
or all such Classes, the obligation of the Fund to make payments pursuant to
this Plan with respect to such Classes shall terminate, and the Fund shall not
be required to make payments hereunder beyond such termination date with respect
to expenses incurred in connection with shares of such Classes sold prior to
such termination date.
SECTION 10. Any Agreement related to this Plan shall be made in writing,
and shall provide:
(a) that such agreement may be terminated with respect to the shares of
any Class of any Portfolio at any time, without payment of any penalty, by
vote of a majority of the Disinterested Trustees or by a vote of the
outstanding voting securities of such Class of such Portfolio, on not more
than sixty (60) days' written notice to any other party to the agreement;
and
(b) that such agreement shall terminate automatically in the event of its
assignment.
SECTION 11. This Plan may not be amended with respect to the shares of any
Class of any Portfolio to increase materially the amount of distribution
expenses provided for in Section 2 hereof unless such amendment is approved by
such Class in the manner provided in Section 5 hereof, and no material amendment
to the Plan with respect to the shares of any Class of any Portfolio shall be
made unless approved in the manner provided for in Section 6 hereof.
[Name of Trust]
(on behalf of its Class A Shares
and Class C Shares)
Attest: ___________________________ By: _________________________________
Assistant Secretary President
Effective as of __________.
39
<PAGE>
SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
[NAME OF TRUST]
(DISTRIBUTION FEE)
The Fund shall pay the Distributor as full compensation for all services
rendered and all facilities furnished under the Distribution Plan for each
Portfolio (or Class thereof) designated below, a Distribution Fee* determined by
applying the annual rate set forth below as to each Portfolio (or Class thereof)
to the average daily net assets of the Portfolio (or Class thereof) for the plan
year, computed in a manner used for the determination of the offering price of
shares of the Portfolio.
PORTFOLIO (CLASS A SHARES) MINIMUM MAXIMUM MAXIMUM
ASSET-BASED SERVICE FEE AGGREGATE FEE
SALES CHARGE
PORTFOLIO (CLASS C SHARES) MINIMUM MAXIMUM
ASSET-BASED MAXIMUM AGGREGATE FEE
SALES CHARGE SERVICE FEE
The Distributor will waive part or all of its Distribution Fee as to a
Portfolio (or Class thereof) to the extent that the ordinary business expenses
of the Portfolio exceed the expense limitation as to the Portfolio (if any) as
contained in the Master Investment Advisory Agreement between the Company and A
I M Advisors, Inc.
THIS PLAN REFERS TO EXHIBITS A-D, WHICH RELATE TO AGREEMENTS THAT THE
DISTRIBUTOR MAY ENTER INTO WITH THIRD PARTIES. FORMS OF THESE AGREEMENTS HAVE
NOT BEEN INCLUDED WITH THIS PLAN.
___________________
* The Distribution Fee is payable apart from the sales charge, if any, as stated
in the current prospectus for the applicable Portfolio (or Class thereof).
40
<PAGE>
EXHIBIT I
MASTER DISTRIBUTION PLAN
OF
[NAME OF TRUST]
(CLASS B SHARES)
[(SECURITIZATION FEATURE)]
SECTION 1. [Name of Trust], (the "Fund"), on behalf of the series of
beneficial interest set forth in Schedule A to this plan (the "Portfolios"), may
pay for distribution of the Class B Shares of such Portfolios (the "Shares")
which the Fund issues from time to time, pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "1940 Act"), according to the terms of this
Distribution Plan (the "Plan").
SECTION 2. The Fund may incur expenses for and pay any institution
selected to act as the Fund's agent for distribution of the Shares of any
Portfolio from time to time (each, a "Distributor") at the rates set forth in
Schedule A hereto based on the average daily net assets of each class of Shares
subject to any applicable limitations imposed by the Conduct Rules of the NASD
Regulation, Inc. in effect from time to time (the "Conduct Rules"). All such
payments are the legal obligation of the Fund and not of any Distributor or its
designee.
SECTION 3.
(a) Amounts set forth in Section 2 may be used to finance any activity
which is primarily intended to result in the sale of the Shares,
including, but not limited to, expenses of organizing and conducting sales
seminars and running advertising programs, payment of finders fees,
printing of prospectuses and statements of additional information (and
supplements thereto) and reports for other than existing shareholders,
preparation and distribution of advertising material and sales literature,
payment of overhead and supplemental payments to dealers and other
institutions as asset-based sales charges. Amounts set forth in Section 2
may also be used to finance payments of service fees under a shareholder
service arrangement, which may be established by each Distributor in
accordance with Section 4, and the costs of administering the Plan. To the
extent that amounts paid hereunder are not used specifically to reimburse
the Distributor for any such expense, such amounts may be treated as
compensation for the Distributor's distribution-related services. No
provision of this Plan shall be interpreted to prohibit any payments by
the Fund during periods when the Fund has suspended or otherwise limited
sales.
(b) Subject to the provisions in Sections 8 and 9 hereof, amounts payable
pursuant to Section 2 in respect of Shares of each Portfolio shall be paid
by the Fund to the Distributor in respect of such Shares or, if more than
one institution has acted or is acting as Distributor in respect of such
Shares, then amounts payable pursuant to Section 2 in respect of such
Shares shall be paid to each such Distributor in proportion to the number
of such Shares sold by or attributable to such Distributor's distribution
efforts in respect of such Shares in accordance with allocation provisions
of each Distributor's distribution agreement (the "Distributor's 12b-1
Share") notwithstanding that such Distributor's distribution agreement
with the fund may have been terminated. The Distributor's 12b-1 Share
shall include amounts payable pursuant to Section 2 in respect of Shares
41
<PAGE>
sold by or attributable to distribution efforts of GT Global, Inc. That
portion of the amounts paid under the Plan that is not paid or advanced by
the Distributor to dealers or other institutions that provide personal
continuing shareholder service as a service fee pursuant to Section 4
shall be deemed as asset-based sales charge.
(c) Any Distributor may assign, transfer or pledge ("Transfer") to one or
more designees (each an "Assignee"), its rights to all or a designated
portion of its Distributor's 12b-1 Share from time to time (but not such
Distributor's duties and obligations pursuant hereto or pursuant to any
distribution agreement in effect from time to time, if any, between such
Distributor and the Fund), free and clear of any offsets or claims the
Fund may have against such Distributor. Each such Assignee's ownership
interest in a Transfer of a specific designated portion of a Distributor's
12b-1 Share is hereafter referred to as an "Assignee's 12b-1 Portion." A
Transfer pursuant to this Section 3(c) shall not reduce or extinguish any
claims of the Fund against the Distributor.
(d) Each Distributor shall promptly notify the Fund in writing of each
such Transfer by providing the Fund with the name and address of each such
Assignee.
(e) A Distributor may direct the Fund to pay an Assignee's 12b-1 Portion
directly to the Assignee. In such event, the Distributor shall provide the
Fund with a monthly calculation of the amount of (i) the Distributor's
12b-1 Share, and (ii) each Assignee's 12b-1 Portion, if any, for such
month (the "Monthly Calculation"). In such event, the Fund shall, upon
receipt of such notice and Monthly Calculation from the Distributor, make
all payments required under such distribution agreement directly to the
Assignee in accordance with the information provided in such notice and
Monthly Calculation upon the same terms and conditions as if such payments
were to be paid to the Distributor.
(f) Alternatively, in connection with a Transfer, a Distributor may direct
the Fund to pay all of such Distributor's 12b-1 Share from time to time to
a depository or collection agent designated by any Assignee, which
depository or collection agent may be delegated the duty of dividing such
Distributor's 12b-1 Share between the Assignee's 12b-1 Portion and the
balance of the Distributor's 12b-1 Share (such balance, when distributed
to the Distributor by the depository or collection agent, the
"Distributor's 12b-1 Portion"), in which case only the Distributor's 12b-1
Portion may be subject to offsets or claims the Fund may have against such
Distributor.
SECTION 4.
(a) Amounts expended by the Fund under the Plan shall be used in part for
the implementation by the Distributor of shareholder service arrangements
with respect to the Shares. The maximum service fee payable to any
provider of such shareholder service shall be twenty-five one-hundredths
of one percent (0.25%) per annum of the daily net assets of the Shares
attributable to the customers of such service provider. All such payments
are the legal obligation of the Fund and not of any Distributor or its
designee.
(b) Pursuant to this Plan, the Distributor may enter into agreements
substantially in the form attached hereto as Exhibit A ("Service
Agreements") with such broker-dealers ("Dealers") as may be selected from
time to time by the Distributor for the provision of continuing
shareholder services in connection with Shares held by such Dealers'
clients and customers ("Customers") who may from time to time directly or
beneficially own Shares. The personal continuing shareholder services to
be rendered by Dealers under the Service Agreements may include, but shall
not be limited to, some or all of the following: (i) distributing sales
42
<PAGE>
literature; (ii) answering routine Customer inquiries concerning the Fund
and the Shares; (iii) assisting Customers in changing dividend options,
account designations and addresses, and in enrolling in any of several
retirement plans offered in connection with the purchase of Shares; (iv)
assisting in the establishment and maintenance of customer accounts and
records, and in the processing of purchase and redemption transactions;
(v) investing dividends and capital gains distributions automatically in
Shares; (vi) performing sub-accounting; (vii) providing periodic
statements showing a Customer's shareholder account balance and the
integration of such statements with those of other transactions and
balances in the Customer's account serviced by such institution; (viii)
forwarding applicable prospectuses, proxy statements, reports and notices
to Customers who hold Shares; and (ix) providing such other information
and administrative services as the Fund or the Customer may reasonably
request.
(c) The Distributor may also enter into Bank Shareholder Service
Agreements substantially in the form attached hereto as Exhibit B ("Bank
Agreements") with selected banks and financial institutions acting in an
agency capacity for their customers ("Banks"). Banks acting in such
capacity will provide some or all of the shareholder services to their
customers as set forth in the Bank Agreements from time to time.
(d) The Distributor may also enter into Agency Pricing Agreements
substantially in the form attached hereto as Exhibit C ("Pricing
Agreements") with selected retirement plan service providers acting in an
agency capacity for their customers ("Retirement Plan Providers").
Retirement Plan Providers acting in such capacity will provide some or all
of the shareholder services to their customers as set forth in the Pricing
Agreements from time to time.
(e) The Distributor may also enter into Shareholder Service Agreements
substantially in the form attached hereto as Exhibit D ("Bank Trust
Department Agreements and Brokers for Bank Trust Department Agreements")
with selected bank trust departments and brokers for bank trust
departments. Such bank trust departments and brokers for bank trust
departments will provide some or all of the shareholder services to their
customers as set forth in the Bank Trust Department Agreements and Brokers
for Bank Trust Department Agreements from time to time.
SECTION 5. This Plan shall not take effect with respect to any Shares of
any Portfolio until (i) it has been approved, together with any related
agreements, by votes of the majority of both (a) the Board of Trustees of the
Fund, and (b) those trustees of the Fund who are not "interested persons" of the
Fund (as defined in the 1940 Act) and have no direct or indirect financial
interest in the operation of this Plan or any agreements related to it (the
"Disinterested Trustees"), cast in person at a meeting called for the purpose of
voting on this Plan or such agreements, and (ii) the execution by the Fund and A
I M Distributors, Inc. of a Master Distribution Agreement in respect of the
Shares of such Portfolio.
SECTION 6. Unless sooner terminated pursuant to Section 8, this Plan shall
continue in effect until ________ and thereafter shall continue in effect so
long as such continuance is specifically approved, at least annually, in the
manner provided for approval of this Plan in Section 5.
SECTION 7. Each Distributor shall provide the Fund's Board of Trustees and
the Board of Trustees shall review, at least quarterly, a written report of the
amounts expended for distribution of the Shares and the purposes for which such
expenditures were made.
43
<PAGE>
SECTION 8. This Plan may be terminated with respect to the Shares of any
Portfolio at any time by vote of a majority of the Disinterested Trustees, or by
a vote of a majority of outstanding Shares of such Portfolio. Upon termination
of this Plan with respect to any or all such classes, the obligation of the Fund
to make payments pursuant to this Plan with respect to such classes shall
terminate, and the fund shall not be required to make payments hereunder beyond
such termination date with respect to expenses incurred in connection with
Shares sold prior to such termination date, PROVIDED, in each case that each of
the requirements of a Complete Termination of the Plan in respect of such class,
as defined below, are met. A termination of this Plan with respect to any or all
Shares of any or all Portfolios shall not affect the obligation of the Fund to
withhold and pay to any Distributor contingent deferred sales changes to which
such distributor is entitled pursuant to any distribution agreement. For
purposes of this Section 8, a "Complete Termination" of this Plan in respect of
any Portfolio shall mean a termination of this Plan in respect of such
Portfolio, PROVIDED that: (i) the Disinterested Trustees of the Funds shall have
acted in good faith and shall have determined that such termination is in the
best interest of the Fund and the shareholders of such Portfolio; (ii) the Fund
does not alter the terms of the contingent deferred sales charges applicable to
Shares outstanding at the time of such termination; and (iii) unless the
applicable Distributor at the time of such termination was in material breach
under the distribution agreement in respect of such Portfolio, the Fund shall
not, in respect of such Portfolio, pay to any person or entity, other than such
Distributor or its designee, either the asset-based sales charge or the service
fee (or any similar fee) in respect of the Shares sold by such Distributor prior
to such termination.
SECTION 9. Any agreement related to this Plan shall be made in writing,
and shall provide:
(a) that such agreement may be terminated with respect to the Shares of
any or all Portfolios at any time, without payment of any penalty,
by vote of a majority of the Disinterested Trustees or by a vote of
the majority of the outstanding Shares of such Portfolio, on not
more than sixty (60) days' written notice to any other party to the
agreement; and
(b) that such agreement shall terminate automatically in the event of
its assignment; PROVIDED, however, that, subject to the
provisions of Section 8 hereof, if such agreement is terminated
for any reason, the obligation of the Fund to make payments of
(i) the Distributor's 12b-1 Share in accordance with the
directions of the Distributor pursuant to Section 3(e) or (f)
hereof if there exist Assignees for all or any portion of such
Distributor's 12b-1 Share, and (ii) the remainder of such
Distributor's 12b-1 Share to such Distributor if there are no
Assignees for such Distributor's Share, pursuant to such
agreement and this Plan will continue with respect to the Shares
until such Shares are redeemed or automatically converted into
another class of shares of the Fund.
SECTION 10. This Plan may not be amended with respect to the shares of any
Portfolio to increase materially the amount of distribution expenses provided
for in Section 2 hereof unless such amendment is approved by a vote of at least
a "majority of the outstanding voting securities" (as defined in the 1940 Act)
of the Shares of such Portfolio, and no material amendment to the Plan with
respect to the shares of any Portfolio shall be made unless approved in the
manner provided for in Section 5 hereof.
[Name of Trust]
(on behalf of its Class B Shares)
Attest: ________________ By:_____________________
[Secretary] [President]
Effective as of ____________.
44
<PAGE>
SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
[NAME OF TRUST]
(DISTRIBUTION FEE)
PORTFOLIO ASSET-BASED MAXIMUM MAXIMUM
SALES CHARGE SERVICE FEE AGGREGATE FEE
CLASS A SHARES
THIS PLAN REFERS TO EXHIBITS A-D, WHICH RELATE TO AGREEMENTS THAT THE
DISTRIBUTOR MAY ENTER INTO WITH THIRD PARTIES. FORMS OF THESE AGREEMENTS HAVE
NOT BEEN INCLUDED WITH THIS PLAN.
45
<PAGE>
EXHIBIT J
GT GLOBAL FUNDS
12B-1 FEE SCHEDULE
- --------------------------------------------------------------------------------
AMOUNT EXPENDED PURSUANT TO
12B-1 PLAN FOR THE MOST RECENTLY COMPLETED
COMPANY FISCAL YEAR
--------------------------------------------------------
CLASS A CLASS B
- --------------------------------------------------------------------------------
G.T. GLOBAL GROWTH SERIES
- --------------------------------------------------------------------------------
GT Global Europe $1,554,410 $910,363
Growth Fund
- --------------------------------------------------------------------------------
GT Global International $607,400 $625,899
Growth Fund
- --------------------------------------------------------------------------------
GT Global Japan Growth $212,419 $317,148
Fund
- --------------------------------------------------------------------------------
GT Global New Pacific $942,945 $1,119,211
Growth Fund
- --------------------------------------------------------------------------------
GT Global Worldwide $400,318 $496,417
Growth Fund
- --------------------------------------------------------------------------------
GT Global America $33,776 $148,043
Small Cap Growth Fund
- --------------------------------------------------------------------------------
GT Global America Mid $958,593 $2,781,908
Cap Growth Fund
- --------------------------------------------------------------------------------
GT Global America $17,701 $102,587
Value Fund
- --------------------------------------------------------------------------------
G.T. INVESTMENT FUNDS, INC.
- --------------------------------------------------------------------------------
GT Global Government $672,237 $1,392,802
Income Fund
- --------------------------------------------------------------------------------
GT Global High Income Fund $605,133 $2,653,190
- --------------------------------------------------------------------------------
GT Global Strategic Income $560,886 $3,185,408
Fund
- --------------------------------------------------------------------------------
GT Global Health Care Fund $2,327,631 $1,316,284
- --------------------------------------------------------------------------------
GT Global Infrastructure $218,486 $621,768
Fund
- --------------------------------------------------------------------------------
GT Global Natural $291,788 $733,200
Resources Fund
- --------------------------------------------------------------------------------
GT Global Telecommunications $5,105,842 $8,933,516
Fund
- --------------------------------------------------------------------------------
GT Global Financial $97,454 $280,650
Services Fund
- --------------------------------------------------------------------------------
46
<PAGE>
- --------------------------------------------------------------------------------
AMOUNT EXPENDED PURSUANT TO
12B-1 PLAN FOR THE MOST RECENTLY COMPLETED
COMPANY FISCAL YEAR
--------------------------------------------------------
CLASS A CLASS B
- --------------------------------------------------------------------------------
GT Global Consumer Products $351,953 $941,035
and Services Fund
- --------------------------------------------------------------------------------
GT Global Emerging $977,082 $2,022,092
Markets Fund
- --------------------------------------------------------------------------------
GT Global Latin $1,011,259 $1,587,737
America Growth Fund
- --------------------------------------------------------------------------------
GT Global Growth & $994,519 $4,233,024
Income Fund
- --------------------------------------------------------------------------------
GT Global Developing N/A* N/A*
Markets Fund
- --------------------------------------------------------------------------------
G.T. INVESTMENT PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
GT Global Dollar Fund** $0 $746,848
- --------------------------------------------------------------------------------
G.T. GLOBAL SERIES TRUST
- --------------------------------------------------------------------------------
GT Global New Dimension $11,800 $27,856
Fund
- --------------------------------------------------------------------------------
____________________________
* Effective November 1, 1997, GT Global Developing Markets Fund became and
open-end fund. Prior thereto, the fund did not incur any distribution fees
pursuant to Rule 12b-1.
** The figures shown for payments under the Class A and Class B Plans reflect a
waiver of expenses by GT Global. Without the waiver, Dollar Fund would have paid
GT Global $422,808 and $995,797 under the Class A Plan and Class B Plan,
respectively.
47
<PAGE>
EXHIBIT K
AGREEMENT AND PLAN OF CONVERSION AND TERMINATION
This AGREEMENT AND PLAN OF CONVERSION AND TERMINATION ("Agreement") is
made as of this _____ day of __________, 1998, between G.T. Investment Funds,
Inc., a Maryland corporation ("Corporation"), on behalf of each segregated
portfolio of assets ("series") of Corporation listed in Schedule A to this
Agreement ("Schedule A") (each an "Old Fund") and _______________, a Delaware
business trust ("Trust"), on behalf of each series of Trust listed in Schedule A
(each a "New Fund"). (Each Old Fund and New Fund is sometimes referred to herein
individually as a "Fund" and collectively as the "Funds"; Corporation and Trust
are sometimes referred to herein individually as an "Investment Company" and
collectively as the "Investment Companies.") All agreements, representations,
actions, and obligations described herein made or to be taken or undertaken by a
Fund are made and shall be taken or undertaken by Corporation on behalf of each
Old Fund and by Trust on behalf of each New Fund.
Each Old Fund intends to change its identity, form, and place of
organization -- by converting from a series of a Maryland corporation to a
series of a Delaware business trust -- through a reorganization within the
meaning of section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended
("Code"). Each Old Fund desires to accomplish such conversion by transferring
all its assets to the New Fund listed on Schedule A opposite its name (which is
being established solely for the purpose of acquiring such assets and continuing
such Old Fund's business) (each, a "corresponding New Fund") in exchange solely
for voting shares of beneficial interest in such New Fund ("New Fund Shares")
and such New Fund's assumption of such Old Fund's liabilities, followed by the
constructive distribution of the New Fund Shares PRO RATA to the holders of
shares of common stock of such Old Fund ("Old Fund Shares") in exchange
therefor, all on the terms and conditions set forth in this Agreement (which is
intended to be, and is adopted as, a "plan of reorganization" for federal income
tax purposes). All such transactions involving each Old Fund and its
corresponding New Fund is referred to herein as a "Reorganization." For
convenience, the balance of this Agreement will refer only to a single
Reorganization, one Old Fund, and one New Fund, but the terms and conditions of
this Agreement shall apply separately to each Reorganization. The consummation
of a Reorganization shall not be contingent on consummation of any other
Reorganization.
The Old Fund Shares currently are divided into three classes, designated
Class A, Class B, and Advisor Class shares ("Class A Old Fund Shares," "Class B
Old Fund Shares," and "Advisor Class Old Fund Shares," respectively). The New
Fund Shares will be divided into four classes, designated Class A, Class B,
Advisor Class, and Class C shares ("Class A New Fund Shares," "Class B New Fund
Shares," "Advisor Class New Fund Shares," and "Class C New Fund Shares,"
respectively). The first three classes of New Funs Shares are substantially
similar to the correspondingly designated classes of Old Fund Shares. Class C
New Fund Shares will not be involved in the Reorganization. [THIS PARAGRAPH WILL
INCLUDE REFERENCE TO OLD FUND'S CLASS C SHARES, AND WILL NOT INCLUDE THE LAST
SENTENCE, IN THE AGREEMENT INVOLVING GT GLOBAL SERIES TRUST ("SERIES TRUST
AGREEMENT").]
48
<PAGE>
In consideration of the mutual promises herein contained, the parties
agree as follows:
1. Plan of Conversion and Termination.
1.1. Old Fund agrees to assign, sell, convey, transfer, and deliver all
of its assets described in paragraph 1.2 ("Assets") to New Fund. New Fund agrees
in exchange therefor --
(a) to issue and deliver to Old Fund the number of full and
fractional (rounded to the third decimal place) (i) Class A New Fund
Shares equal to the number of full and fractional Class A Old Fund Shares
then outstanding, (ii) Class B New Fund Shares equal to the number of full
and fractional Class B Old Fund Shares then outstanding, and (iii) Advisor
Class New Fund Shares equal to the number of full and fractional Advisor
Class Old Fund Shares then outstanding [THIS CLAUSE WILL INCLUDE REFERENCE
TO THE FUNDS' CLASS C SHARES IN THE SERIES TRUST AGREEMENT.]; and
(b) to assume all of Old Fund's liabilities described in paragraph
1.3 ("Liabilities"). Such transactions shall take place at the Closing (as
defined in paragraph 2.1).
1.2. The Assets shall include, 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 Old Fund's books, and other property owned by Old Fund at the
Effective Time (as defined in paragraph 2.1).
1.3. The Liabilities shall include all of Old Fund's liabilities, 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.
1.4. At the Effective Time (or as soon thereafter as is reasonably
practicable), (a) the New Fund Share issued pursuant to paragraph 4.4 shall be
redeemed by New Fund for $1.00 and (b) Old Fund shall constructively distribute
the New Fund Shares received by it pursuant to paragraph 1.1 to Old Fund's
shareholders of record, determined as of the Effective Time (collectively,
"Shareholders" and each individually, a "Shareholder"), in exchange for their
Old Fund Shares. Such distribution shall be accomplished by Trust's transfer
agent ("Transfer Agent") opening accounts on New Fund's share transfer books in
the Shareholders' names and transferring such New Fund Shares thereto. 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 due
that Shareholder, by class (I.E., the account for a Shareholder of Class A Old
Fund Shares shall be credited with the respective PRO RATA number of Class A New
Fund Shares due that Shareholder, the account for a Shareholder of Class B Old
Fund Shares shall be credited with the respective PRO RATA number of Class B New
Fund Shares due that Shareholder, and the account for a Shareholder of Advisor
Class Old Fund Shares shall be credited with the respective PRO RATA number of
Advisor Class New Fund Shares due that Shareholder). [THE PRECEDING SENTENCE
WILL INCLUDE REFERENCE TO THE FUNDS' CLASS C SHARES IN THE SERIES TRUST
Agreement.] All outstanding Old Fund Shares, including those represented by
certificates, shall simultaneously be canceled on Old Fund's share transfer
books. New Fund shall not issue certificates representing the New Fund Shares in
connection with the Reorganization.
1.5. As soon as reasonably practicable after distribution of the New Fund
Shares pursuant to paragraph 1.4, Old Fund shall be terminated and any further
actions shall be taken in connection therewith as required by applicable law.
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1.6. Any transfer taxes payable on issuance of New Fund Shares in a name
other than that of the registered holder on Old Fund's books of the Old Fund
Shares constructively exchanged therefor shall be paid by the person to whom
such New Fund Shares are to be issued, as a condition of such transfer.
1.7. Any reporting responsibility of Old Fund to a public authority is
and shall remain its responsibility up to and including the date on which it is
terminated.
2. Closing.
2.1. The Reorganization, together with related acts necessary to
consummate the same ("Closing"), shall occur at the Investment Companies'
principal office on May 29, 1998, 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 Investment Companies' close of
business on the date thereof or at such other time as the parties may agree
("Effective Time").
2.2. Corporation shall deliver to Trust at the Closing a schedule of the
Assets as of the Effective Time, which shall set forth for all portfolio
securities included therein their adjusted tax basis and holding period by lot.
Old Fund's custodian shall deliver at the Closing a certificate of an authorized
officer stating that (a) the Assets held by the custodian will be transferred to
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.
2.3. Corporation shall deliver to Trust at the Closing a list of the
Shareholders' names and addresses and the number of outstanding Old Fund Shares
owned by each Shareholder, all as of the Effective Time, certified by
Corporation's Secretary or Assistant Secretary. The Transfer Agent shall deliver
at the Closing a certificate as to the opening on New Fund's share transfer
books of accounts in the Shareholders' names. Trust shall issue and deliver a
confirmation to Corporation evidencing the New Fund Shares to be credited to Old
Fund at the Effective Time or provide evidence satisfactory to Corporation that
such shares have been credited to Old 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.
2.4. Each Investment Company 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.
3. Representations and Warranties.
3.1. Old Fund represents and warrants as follows:
3.1.1. Corporation is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maryland,
and its Articles of Incorporation are on file with that state's Department
of Assessments and Taxation;
3.1.2. Corporation is duly registered as an open-end management
investment company under the Investment Company Act of 1940, as amended
("1940 Act"), and such registration is in full force and effect;
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3.1.3. Old Fund is a duly established and designated series of
Corporation;
3.1.4. At the Closing, Old Fund will have good and marketable
title to the Assets and full right, power, and authority to sell, assign,
transfer, and deliver the Assets free of any liens or other encumbrances;
and upon delivery and payment for the Assets, New Fund will acquire good
and marketable title thereto;
3.1.5. New Fund Shares are not being acquired for the purpose of
making any distribution thereof, other than in accordance with the terms
hereof;
3.1.6. Old Fund is a "fund" as defined in section 851(g)(2) of the
Code; it qualified for treatment as a regulated investment company under
Subchapter M of the Code ("RIC") for each past taxable year since it
commenced operations 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); it has no earnings and profits accumulated
in any taxable year in which the provisions of Subchapter M did not apply
to it; and it has made all distributions for each such past taxable year
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
year;
3.1.7. There is no plan or intention of Shareholders who
individually own 5% or more of the Old Fund Shares -- and, to the best of
Corporation's management's knowledge, there is no plan or intention of the
remaining Shareholders -- to redeem or otherwise dispose of any portion of
the New Fund Shares to be received by them in the Reorganization. That
management 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 Old Fund as a series of an open-end investment
company. Consequently, that management expects that the percentage of
Shareholder interests, if any, that will be disposed of as a result of or
at the time of the Reorganization will be DE MINIMIS;
3.1.8. The Liabilities were incurred by Old Fund in the ordinary
course of its business and are associated with the Assets;
3.1.9. Old Fund 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;
3.1.10. Not more than 25% of the value of Old Fund's total assets
(excluding cash, cash items, and U.S. government securities) is invested
in the stock and securities of any one issuer, and not more than 50% of
the value of such assets is invested in the stock and securities of five
or fewer issuers [THIS PARAGRAPH WILL NOT BE INCLUDED IN THE SERIES TRUST
AGREEMENT.];
3.1.11. As of the Effective Time, Old Fund will not have
outstanding any warrants, options, convertible securities, or any other
type of rights pursuant to which any person could acquire Old Fund Shares;
3.1.12. At the Effective Time, the performance of this Agreement
shall have been duly authorized by all necessary action by Old Fund's
shareholders; and
3.1.13. Old Fund will be terminated as soon as reasonably
practicable after the Reorganization, but in all events within twelve
months after the Effective Time;
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3.2. New Fund represents and warrants as follows:
3.2.1. Trust is a business 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 thereof;
3.2.2. At the Effective Time Trust will succeed to Corporation's
registration statement filed under the 1940 Act with the Securities and
Exchange Commission ("SEC") and thus will become duly registered as an
open-end management investment company thereunder;
3.2.3. Before the Effective Time, New Fund will be a duly
established and designated series of Trust;
3.2.4. New Fund has not commenced operations and will not commence
operations until after the Closing;
3.2.5. Prior to the Effective Time, there will be no issued and
outstanding shares in New Fund or any other securities issued by New Fund,
except as provided in paragraph 4.4;
3.2.6. No consideration other than New Fund Shares (and New Fund's
assumption of the Liabilities) will be issued in exchange for the Assets
in the Reorganization;
3.2.7. The New Fund Shares to be issued and delivered to Old 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 New Fund, fully paid and non-assessable;
3.2.8. 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;
3.2.9. New Fund 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 a series of an open-end investment
company; nor does New Fund 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 that business or to
the extent necessary to comply with its legal obligation under section
22(e) of the 1940 Act;
3.2.10. New Fund will actively continue Old Fund's business in
substantially the same manner that Old Fund conducted that business
immediately before the Reorganization; and New Fund has no plan or
intention to sell or otherwise dispose of any of the Assets, except for
dispositions made in the ordinary course of its business and dispositions
necessary to maintain its qualification as a RIC, although in the ordinary
course of its business New Fund will continuously review its investment
portfolio (as Old Fund did before the Reorganization) to determine whether
to retain or dispose of particular stocks or securities, including those
included in the Assets;
3.2.11. There is no plan or intention for New Fund to be dissolved
or merged into another corporation or business trust or "fund" thereof
(within the meaning of section 851(g)(2) of the Code) following the
Reorganization; and
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3.2.12. Immediately after the Reorganization, (a) not more than 25%
of the value of New Fund's total assets (excluding cash, cash items, and
U.S. government securities) will be invested in the stock and securities
of any one issuer and (b) not more than 50% of the value of such assets
will be invested in the stock and securities of five or fewer issuers.
[THIS PARAGRAPH WILL NOT BE INCLUDED IN THE SERIES TRUST AGREEMENT.]
3.3. Each Fund represents and warrants as follows:
3.3.1. The fair market value of the New Fund Shares received by
each Shareholder will be approximately equal to the fair market value of
the Old Fund Shares constructively surrendered in exchange therefor;
3.3.2. Immediately following consummation of the Reorganization,
the Shareholders will own all the New Fund Shares and will own such shares
solely by reason of their ownership of Old Fund Shares immediately before
the Reorganization;
3.3.3. The Shareholders will pay their own expenses, if any,
incurred in connection with the Reorganization;
3.3.4. There is no intercompany indebtedness between the Funds
that was issued or acquired, or will be settled, at a discount; and
3.3.5. Immediately following consummation of the Reorganization,
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 Old Fund held or was subject to immediately
prior to the Reorganization, plus any liabilities for expenses of the
parties incurred in connection with the Reorganization. Such excepted
assets, together with the amount of all redemptions and distributions
(other than regular, normal dividends) made by Old Fund immediately
preceding the Reorganization, will, in the aggregate, constitute less than
1% of its net assets.
4. Conditions Precedent.
Each Fund's obligations hereunder shall be subject to (a) performance by
the other party of all its obligations to be performed hereunder at or before
the Effective Time, (b) all representations and warranties of the other party
contained herein being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
hereby, as of the Effective Time, with the same force and effect as if made on
and as of the Effective Time, and (c) the further conditions that, at or before
the Effective Time:
4.1. 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 Investment Company to permit
consummation, in all material respects, of the transactions contemplated hereby
shall have been obtained, except where failure to obtain same would not involve
a risk of a material adverse effect on the assets or properties of either Fund,
provided that either Investment Company may for itself waive any of such
conditions;
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4.2. Corporation shall have called a meeting of Old Fund's shareholders
("Shareholders Meeting") to consider and act on this Agreement and the
Reorganization, and at such meeting those shareholders shall have approved
thereof in accordance with applicable law;
4.3. Each party shall have received an opinion from Kirkpatrick &
Lockhart 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 addressed to such counsel) and the
certificates delivered pursuant to paragraph 2.4. 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:
4.3.1. The Reorganization will constitute a reorganization within
the meaning of section 368(a)(1)(F) of the Code, and each Fund will be "a
party to a reorganization" within the meaning of section 368(b) of the
Code;
4.3.2. No gain or loss will be recognized to Old Fund on the
transfer of the Assets to New Fund in exchange solely for New Fund Shares
and New Fund's assumption of the Liabilities or on the subsequent
distribution of those shares to the Shareholders, in constructive exchange
for their Old Fund Shares, in liquidation of Old Fund;
4.3.3. No gain or loss will be recognized to New Fund on its
receipt of the Assets in exchange for New Fund Shares and its assumption
of the Liabilities;
4.3.4. New Fund's basis for the Assets will be the same as the
basis thereof in Old Fund's hands immediately before the Reorganization,
and New Fund's holding period for the Assets will include Old Fund's
holding period therefor;
4.3.5. A Shareholder will recognize no gain or loss on the
constructive exchange of all its Old Fund Shares solely for New Fund
Shares pursuant to the Reorganization;
4.3.6. A Shareholder's basis for the New Fund Shares to be
received by it in the Reorganization will be the same as the basis for its
Old Fund Shares to be constructively surrendered in exchange for those New
Fund Shares, and its holding period for those New Fund Shares will include
its holding period for those Old Fund Shares, provided they are held as
capital assets by the Shareholder at the Effective Time; and
4.3.7. For purposes of section 381 of the Code, New Fund will be
treated as if there had been no Reorganization. Accordingly, the
Reorganization will not result in the termination of Old Fund's taxable
year, Old Fund's tax attributes enumerated in section 381(c) of the Code
will be taken into account by New Fund as if there had been no
Reorganization, and the part of Old Fund's taxable year before the
Reorganization will be included in New Fund's taxable year after the
Reorganization;
4.4. Prior to the Closing, Trust's trustees shall have authorized the
issuance of, and New Fund shall have issued, one New Fund Share to Corporation
in consideration of the payment of $1.00 for the purpose of enabling Corporation
to elect Corporation's directors as Trust's trustees (to serve without limit in
time, except as they may resign or be removed by action of Trust's trustees or
shareholders), to ratify the selection of Trust's independent certified public
accountants, and to vote on the matters referred to in paragraph 4.5; and
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4.5. Trust (on behalf of and with respect to New Fund) shall have entered
into an investment management and administration agreement, a sub-advisory
agreement, a distribution contract, a plan of distribution pursuant to Rule
12b-1 under the 1940 Act, and such other agreements as are necessary for New
Fund's operation as a series of an open-end investment company. Each such
agreement shall have been approved by Trust's trustees and, to the extent
required by law, by such of those trustees who are not "interested persons"
thereof (as defined in the 1940 Act) and by Corporation as the sole shareholder
of New Fund.
At any time prior to the Closing, any of the foregoing conditions (except that
set forth in paragraph 4.2) may be waived by the directors/trustees of either
Investment Company if, in their judgment, such waiver will not have a material
adverse effect on the interests of Old Fund's shareholders.
5. Expenses.
Except as otherwise provided in subparagraph 3.3.3, 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.
6. Entire Agreement; Survival.
Neither party has made any representation, warranty, or covenant not set
forth herein, and this Agreement constitutes the entire agreement between the
parties. The representations, warranties, and covenants contained herein or in
any document delivered pursuant hereto or in connection herewith shall survive
the Closing.
7. Amendment.
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding approval thereof by Old Fund'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.
8. Termination.
This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by Old Fund's shareholders:
8.1. By either Fund (a) in the event of the other Fund'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 September 30, 1998; or
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8.2. By the parties' mutual agreement.
Except as otherwise provided in paragraph 5, in the event of termination under
paragraphs 8.1(c) or 8.2, there shall be no liability for damages on the part of
either Fund -- or the directors or trustees, as the case may be, or officers of
either Investment Company -- to the other Fund.
9. Miscellaneous.
9.1. 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.
9.2. 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.
9.3 The execution and delivery of this Agreement have been authorized by
the Trustees of the Trust and its shareholders, and this Agreement has been
executed and delivered by an authorized officer of the Trust acting as such;
neither such authorization by such Trustees and shareholders nor such execution
and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the assets and property of the Trust, as provided in the Company's
Declaration of Trust.
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: G.T. INVESTMENT FUNDS, INC.,
on behalf of each of its series listed
in Schedule A to this Agreement
_______________________________ By:______________________________________
Title:___________________________________
Attest: ________________________________________
on behalf of each of its series listed
in Schedule A to this Agreement
_______________________________ By:______________________________________
Title:___________________________________
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SCHEDULE A
SERIES OF G.T. INVESTMENT FUNDS, INC. SERIES OF ________________
GT Global Health Care Fund AIM/GT Global Health Care Fund
GT Global Telecommunications Fund AIM/GT Global Telecommunications Fund
GT Global Financial Services Fund AIM/GT Global Financial Services Fund
GT Global Infrastructure Fund AIM/GT Global Infrastructure Fund
GT Global Consumer Products and AIM/GT Global Consumer Products and
Services Fund Services Fund
GT Global Natural Resources Fund AIM/GT Global Natural Resources Fund
GT Global Latin America Growth Fund AIM/GT Global Latin America Growth Fund
GT Global Emerging Markets Fund AIM/GT Global Emerging Markets Fund
GT Global Growth & Income Fund AIM/GT Global Growth & Income Fund
GT Global Strategic Income Fund AIM/GT Global Strategic Income Fund
GT Global High Income Fund AIM/GT Global High Income Fund
57
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EXHIBIT L
AGREEMENT AND DECLARATION OF TRUST
OF
-------------------
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered into
as of ________, 1998, among ________, ________, ________, ________, and
________, as trustees, and each person who becomes a shareholder (as hereinafter
defined) in accordance with the terms hereinafter set forth.
WHEREAS, the parties hereto desire to create a business trust pursuant to
the Delaware Act (as hereinafter defined) for the investment and reinvestment of
funds contributed thereto;
NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust be
filed with the Office of the Secretary of State of Delaware and do hereby
declare that all money and property contributed to the trust hereunder shall be
held and managed in trust under this Trust Agreement for the benefit of the
Shareholders (as hereinafter defined) as herein set forth below.
ARTICLE I
NAME, DEFINITIONS, PURPOSE AND CERTIFICATE OF TRUST
SECTION 1.1. NAME. The name of the business trust created hereby is
"___________," and the Trustees may transact the Trust's affairs in that
name. The Trust shall constitute a Delaware business trust in accordance
with the Delaware Act, as hereinafter defined.
SECTION 1.2. DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) "Agreement" means this Agreement and Declaration of Trust, as it may
be amended from time to time;
(b) "Bylaws" means the Bylaws referred to in Article IV, Section 4.1(e)
hereof, as from time to time amended;
(c) "Class" means a portion of Shares of a Portfolio of the Trust
established in accordance with the provisions of Article II, Section
2.3 hereof;
(d) "Commission" shall have the meaning given it in the 1940 Act. The
terms "Affiliated Person," "Company," "Person," and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretive
releases of the Commission thereunder;
(e) "Covered Person" means every person who is, or has been, a Trustee
or an officer or employee of the Trust;
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(f) The "Delaware Act" refers to the Delaware Business Trust Act, 12
Del. C. ss. 3801 et seq., as such Act may be amended from time to
time;
(g) "Majority Shareholder Vote" means "the vote of a majority of the
outstanding voting securities" (as defined in the 1940 Act) of the
Trust, Portfolio, or Class, as applicable;
(h) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time;
(i) "Outstanding Shares" means Shares shown on the books of the Trust or
its transfer agent as then issued and outstanding, but does not
include Shares that have been repurchased or redeemed by the Trust;
(j) "Portfolio" means a series of Shares of the Trust established in
accordance with the provisions of Article II, Section 2.3 hereof;
(k) "Shareholder" means a record owner of Outstanding Shares of the
Trust;
(l) "Shares" means, as to a Portfolio or any Class thereof, the equal
proportionate transferable units of beneficial interest into which
the beneficial interest of such Portfolio of the Trust or such Class
thereof shall be divided and may include fractions of Shares as well
as whole Shares;
(m) The "Trust" means __________, the Delaware business trust
established hereby, and reference to the Trust, when applicable to
one or more Portfolios of the Trust, or Classes thereof, shall refer
to any such Portfolio, or Class thereof, as the case may be;
(n) The "Trustees" means the Persons who have signed this Agreement
and Declaration of Trust as trustees so long as they shall
continue to serve as trustees of the Trust in accordance with the
terms hereof, and all other Persons who may from time to time be
duly appointed as Trustee in accordance with the provisions of
Section 3.4 hereof, and reference herein to a Trustee or to the
Trustees shall refer to such Persons in their capacity as
Trustees hereunder; and
(o) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account
of one or more of the Trust, any Portfolio, any Class of a
Portfolio, or the Trustees on behalf of the Trust, a Portfolio, or a
Class.
SECTION 1.3. PURPOSE. The purpose of the Trust is to conduct, operate and
carry on the business of a management investment company registered under
the 1940 Act through one or more Portfolios investing primarily in
securities and to carry on such other business as the Trustees may from
time to time determine pursuant to their authority under this Trust
Agreement.
SECTION 1.4. CERTIFICATE OF TRUST. Immediately upon the execution of this
Trust Agreement, the Trustees shall file a Certificate of Trust with
respect to the Trust in the Office of the Secretary of State of the State
of Delaware pursuant to the Delaware Act.
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ARTICLE II
BENEFICIAL INTEREST
SECTION 2.1. SHARES OF BENEFICIAL INTEREST. The beneficial interest in the
Trust shall be divided into an unlimited number of Shares, with par value
of $0.01 per Share. The Trustees may, from time to time, authorize the
division of the Shares into one or more series, each of which constitutes
a Portfolio, and may further authorize the division of said Portfolios
into one or more additional, separate and distinct Classes in accordance
with Article II, Section 2.3 of this Agreement. All shares issued
hereunder, including without limitation, Shares issued in connection with
a dividend or other distribution in Shares or a split or reverse split of
Shares, shall be fully paid and nonassessable.
SECTION 2.2. ISSUANCE OF SHARES. The Trustees in their discretion may,
from time to time, without vote of the Shareholders, issue Shares, in
addition to the then issued and outstanding Shares and Shares held in the
treasury, to such party or parties and for such amount and type of
consideration, subject to applicable law, including cash or securities, at
such time or times and on such terms as the Trustees may deem appropriate,
and may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with, the assumption of liabilities)
and businesses. In connection with any issuance of Shares, the Trustees
may issue fractional Shares and Shares held in the treasury. The Trustees
may from time to time divide or combine the Shares into a greater or
lesser number without thereby changing the proportionate beneficial
interests in the Trust. Contributions to the Trust may be accepted for,
and Shares shall be redeemed as, whole Shares and/or 1/1,000th of a Share
or integral multiples thereof.
SECTION 2.3. ESTABLISHMENT OF PORTFOLIOS AND CLASSES. The Trust shall
consist of one or more separate and distinct Portfolios, each with an
unlimited number of Shares unless otherwise specified. The Trustees hereby
establish and designate the Portfolios listed on Schedule A attached
hereto and made a part hereof ("Schedule A"). Each additional Portfolio
shall be established by the adoption of a resolution by the Trustees and
shall be effective upon the date stated therein (or, if no such date is
stated, upon the date of such adoption). The Shares of each Portfolio
shall have the relative rights and preferences provided for herein and
such rights and preferences as may be designated by the Trustees. The
Trust shall maintain separate and distinct records for each Portfolio and
shall hold and account for the assets belonging thereto separately from
the other Trust Property and the assets belonging to any other Portfolio.
Each Share of a Portfolio shall represent an equal beneficial interest in
the net assets belonging to that Portfolio, except to the extent of
expenses separately allocated to Classes thereof as permitted herein. A
Portfolio may have exclusive voting rights with respect to matters
affecting only that Portfolio.
The Trustees may divide the Shares of any Portfolio into two or more
Classes, each with an unlimited number of Shares unless otherwise
specified. Each Class so established and designated shall represent
interests in the net assets belonging to that Portfolio and shall have
identical voting, dividend, liquidation, and other rights and be subject
to the same terms and conditions, except that expenses (or certain assets
as determined by the Trustees) allocated to a Class may be borne solely by
(or credited solely to) that Class and except that each Class may have
separate rights to convert to another Class, exchange rights, and similar
rights, each as determined by the Trustees and a Class may have exclusive
voting rights with respect to matters affecting only that Class. The
Trustees hereby establish for each Portfolio listed on Schedule A the
Classes listed thereon. Each additional Class for any or all Portfolios
shall be established by the adoption of a resolution by the Trustees and
shall be effective upon the date stated therein (or, if no such date is
stated, upon the date of such adoption).
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SECTION 2.3.1. Subject to Section 6.1 of this Trust Agreement, the
Trustees shall have full power and authority, in their sole discretion
without obtaining any prior authorization or vote of the Shareholders of
any Portfolio, or Class thereof, to establish and designate and to change
in any manner any Portfolio of Shares, or any Class or Classes thereof; to
fix such preferences, voting powers, rights, and privileges of any
Portfolio, or Classes thereof, as the Trustees may from time to time
determine (but the Trustees may not change the preferences, voting powers,
rights, and privileges of Outstanding Shares in a manner materially
adverse to the Shareholders of such Shares without the prior approval of
the affected Shareholders); to divide or combine the Shares or any
Portfolio, or Classes thereof, into a greater or lesser number; to
classify or reclassify any issued Shares or any Portfolio, or Classes
thereof, into one or more Portfolios or Classes of Shares of a Portfolio;
and to take such other action with respect to the Shares as the Trustees
may deem desirable. A Portfolio and any Class thereof may issue any number
of Shares but need not issue any shares. At any time that there are no
Shares outstanding of any particular Portfolio or Class previously
established and designated, the Trustees may abolish that Portfolio or
Class and the establishment and designation thereof.
SECTION 2.3.2. Unless the establishing resolution or any other resolution
adopted pursuant to this Section 2.3 otherwise provides, Shares of each
Portfolio or Class thereof established hereunder shall have the following
relative rights and preferences:
(a) Shareholders shall have no preemptive or other right to subscribe to
any additional Shares or other securities issued by the Trust or the
Trustees, whether of the same or other Portfolio (or Class).
(b) All consideration received by the Trust for the issue or sale of
Shares of a particular Portfolio, together with all assets in which
such consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds derived from
the sale, exchange, or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, shall be held and accounted for separately
from the other assets of the Trust and of every other Portfolio and
may be referred to herein as "assets belonging to" that Portfolio.
The assets belonging to a particular Portfolio shall belong to that
Portfolio for all purposes, and to no other Portfolio, subject only
to the rights of creditors of that Portfolio. In addition, any
assets, income, earnings, profits, or funds, or payments and
proceeds with respect thereto, which are not readily identifiable as
belonging to any particular Portfolio shall be allocated by the
Trustees between and among one or more of the Portfolios for all
purposes and such assets, income, earnings, profits, or funds, or
payments and proceeds with respect thereto, shall be assets
belonging to that Portfolio. The Trustees may, in their sole
discretion, allocate certain assets to a particular Class, and such
assets may be referred to herein as "assets belonging to" that
Class.
(c) A particular Portfolio (or Class) shall be charged with the
liabilities of that Portfolio (or Class) and all expenses, costs,
charges and reserves attributable to any particular Portfolio (or
Class) shall be borne by such Portfolio (or Class). Any general
liabilities, expenses, costs, charges or reserves to the Trust which
are not readily identifiable as belonging to any particular
Portfolio (or Class) shall be allocated and charged by the Trustees
between or among any one or more of the Portfolios (or Classes) in
such manner as the Trustees in their sole discretion deem fair and
equitable. Each such allocation shall be conclusive and binding upon
the Shareholders of all Portfolios (or Classes) for all purposes.
Without limitation of the foregoing provisions of this Subsection
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2.3.2, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular
Portfolio (or Class) shall be enforceable against the assets of such
Portfolio (or Class) only, and not against the assets of the Trust
generally. Notice of this contractual limitation on inter-Portfolio
liabilities shall be set forth in the Certificate of Trust described
in Section 1.4 of this Agreement (whether originally or by
amendment), and upon the giving of such notice in the Certificate of
Trust, the statutory provisions of Section 3804 of the Delaware Act
relating to limitations on inter-Portfolio liabilities (and the
statutory effect under Section 3804 of setting forth such notice in
the Certificate of Trust) shall become applicable to the Trust and
each Portfolio and Class thereof.
All references to Shares in this Trust Agreement shall be deemed to
be shares of any or all Portfolios, or Classes thereof, as the
context may require. All provisions herein relating to the Trust
shall apply equally to each Portfolio of the Trust, and each Class
thereof, except as the context otherwise requires.
SECTION 2.4. INVESTMENT IN THE TRUST. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such
consideration, which may consist of cash or tangible or intangible
property or a combination thereof, as the Trustees from time to time may
authorize. At the Trustees' sole discretion, such investments, subject to
applicable law, may be in the form of cash or securities in which the
affected Portfolio is authorized to invest, valued as provided in
applicable law. Each Investment shall be credited to the individual
shareholder's account in the form of full and fractional Shares of the
Trust, in such Portfolio (or Class) as the purchaser shall select.
SECTION 2.5. PERSONAL LIABILITY OF SHAREHOLDERS. As provided by applicable
law, no Shareholder of the Trust shall be personally liable for the debts,
liabilities, obligations, and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or any Portfolio (or Class)
thereof. Neither the Trust nor the Trustees, nor any officer, employee, or
agent of the Trust shall have any power to bind personally any Shareholder
or, except as provided herein or by applicable law, to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever
other than such as the Shareholder may at any time personally agree to pay
by way of subscription for any Shares or otherwise. The Shareholders shall
be entitled, to the fullest extent permitted by applicable law, to the
same limitation on personal liability as is extended under the Delaware
General Corporation Law to stockholders of private corporations for
profit. Every note, bond, contract, or other undertaking issued by or on
behalf of the Trust or the Trustees relating to the Trust or to any
Portfolio (or Class) thereof shall include a recitation limiting the
obligation represented thereby to the Trust or to one or more Portfolios
thereof or to one or more Classes of a Portfolio and its or their assets
(but the omission of such a recitation shall not operate to bind any
Shareholder or Trustee of the Trust).
SECTION 2.6. ASSENT TO TRUST AGREEMENT. Every Shareholder, by virtue of
having purchased a Share, shall be held to have expressly assented to, and
agreed to be bound by, the terms hereof. The death of a Shareholder during
the continuance of the Trust shall not operate to terminate the same nor
entitle the representative of any deceased Shareholder to an accounting or
to take any action in court or elsewhere against the Trust or the
Trustees, but only to rights of said decedent under this Trust.
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ARTICLE III
THE TRUSTEES
SECTION 3.1. MANAGEMENT OF THE TRUST. The Trustees shall have exclusive
and absolute control over the Trust Property and over the business of the
Trust to the same extent as if the Trustees were the sole owners of the
Trust Property and business in their own right, but with such powers of
delegation as may be permitted by this Trust Agreement. The Trustees shall
have power to conduct the business of the Trust and carry on its
operations in any and all of its branches and maintain offices both within
and without the State of Delaware, in any and all states of the United
States of America, in the District of Columbia, in any and all
commonwealths, territories, dependencies, colonies, or possessions of the
United States of America, and in any and all foreign jurisdictions and to
do all such other things and execute all such instruments as they deem
necessary, proper or desirable in order to promote the interests of the
Trust although such things are not herein specifically mentioned. Any
determination as to what is in the interests of the Trust made by the
Trustees in good faith shall be conclusive. In construing the provisions
of this Trust Agreement, the presumption shall be in favor of a grant of
power to the Trustees.
The enumeration of any specific power in this Trust Agreement shall not be
construed as limiting the aforesaid power. The powers of the Trustees may
be exercised without order of or resort to any court or other authority.
SECTION 3.2. INITIAL TRUSTEES. The initial Trustees shall be the
persons named herein.
SECTION 3.3. TERMS OF OFFICE OF TRUSTEES. The Trustees shall hold office
during the lifetime of this Trust, and until its termination as herein
provided; except (a) that any Trustee may resign his trusteeship or may
retire by written instrument signed by him and delivered to the other
Trustees, which shall take effect upon such delivery or upon such later
date as is specified therein; (b) that any Trustee may be removed at any
time by written instrument, signed by least two-thirds of the number of
Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) that any Trustee who has died, become
physically or mentally incapacitated by reason of disease or otherwise, or
is otherwise unable to serve, may be retired by written instrument signed
by a majority of the other Trustees, specifying the date of his
retirement; and (d) that a Trustee may be removed at any meeting of the
Shareholders of the Trust by a vote of the Shareholders owning at least
two-thirds of the Outstanding Shares.
SECTION 3.4. VACANCIES AND APPOINTMENT OF TRUSTEES. A vacancy shall occur
in case of the declination to serve, death, resignation, retirement or
removal of a Trustee, or a Trustee is otherwise unable to serve, or an
increase in the number of Trustees. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled, the other Trustees
shall have all the powers hereunder and the certification of the other
Trustees of such vacancy shall be conclusive. In the case of an existing
vacancy, the remaining Trustees may fill such vacancy by appointment such
other person as they in their discretion shall see fit, or may leave such
vacancy unfilled or may reduce the number of Trustees to not less than two
(2) Trustees. Such appointment shall be evidenced by a written instrument
signed by a majority of the Trustees in office or by resolution of the
Trustees, duly adopted, which shall be recorded in the minutes of a
meeting of the Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation,
or removal of a Trustee or an increase in number of Trustees effective at
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a later date, provided that said appointment shall become effective only
at the time or after the expected vacancy occurs. As soon as any Trustee
appointed pursuant to this Section 3.4 shall have accepted this
appointment in writing and agreed in writing to be bound by the terms of
the Trust Agreement, the Trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act
or conveyance, and he shall be deemed a Trustee hereunder.
SECTION 3.5. TEMPORARY ABSENCE OF TRUSTEE. Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any
one time to any other Trustee or Trustees, provided that in no case shall
less than two Trustees personally exercise the other powers hereunder
except as herein otherwise expressly provided.
SECTION 3.6. NUMBER OF TRUSTEES. The number of Trustees shall initially be
five (5), and thereafter shall be such number as shall be fixed from time
to time by a majority of the Trustees; provided, however, that the number
of Trustees shall in no event be less than two (2) [nor more than twelve
(12)]. The Shareholders shall elect the Trustees (other than the initial
Trustees) on such dates as the Trustees may fix from time to time.
SECTION 3.7. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The
declination to serve, death, resignation, retirement, removal, incapacity,
or inability of the Trustees, or any one of them, shall not operate to
terminate the Trust or to revoke any existing agency created pursuant to
the terms of this Trust Agreement.
SECTION 3.8. OWNERSHIP OF ASSETS OF THE TRUST. The assets of the Trust and
of each Portfolio thereof shall be held separate and apart from any assets
now or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustees. Legal title in all of the assets
of the Trust and the right to conduct any business shall at all times be
considered as vested in the Trustees on behalf of the Trust, except that
the Trustees may cause legal title to any Trust Property to be held by, or
in the name of the Trust, or in the name of any Person as nominee. No
Shareholder shall be deemed to have a severable ownership in any
individual asset of the Trust or of any Portfolio, or Class thereof, or
any right of partition or possession thereof, but each Shareholder shall
have, except as otherwise provided for herein, a proportionate undivided
beneficial interest in the Trust, Portfolio or Class thereof. The Shares
shall be personal property giving only the rights specifically set forth
in this Trust Agreement or the Delaware Act.
ARTICLE IV
POWERS OF THE TRUSTEES
SECTION 4.1. POWERS. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do any
and all acts and to make and execute any and all contracts and instruments
that they may consider necessary or appropriate in connection with the
management of the Trust. Without limiting the foregoing and subject to any
applicable limitation in this Trust Agreement or the Bylaws of the Trust,
the Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or
limited by any present or future law or custom in regard to
investments by Trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on, and lease any or all of the
assets of the Trust;
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(b) To operate as, and to carry on the business of, an investment
company, and exercise all the powers necessary and appropriate to
the conduct of such operations;
(c) To borrow money and in this connection issue notes or other evidence
of indebtedness; to secure borrowings by mortgaging, pledging, or
otherwise subjecting as security the Trust Property; to endorse,
guarantee, or undertake the performance of an obligation or
engagement of any other Person and to lend Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereafter provided for
or by the Trust itself, or both, or otherwise pursuant to a plan of
distribution of any kind;
(e) To adopt Bylaws not inconsistent with this Trust Agreement providing
for the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve such right to the
shareholders; such Bylaws shall be deemed incorporated and included
in this Trust Agreement;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that are
members of a national securities exchange, or such other domestic or
foreign entities as custodians of any assets of the Trust subject to
any conditions set forth in this Trust Agreement or in the Bylaws;
(h) To retain one or more transfer agents or Shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the Bylaws;
(j) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, manager,
administrator, custodian, underwriter, or other agent or independent
contractor;
(k) To sell or exchange any or all of the assets of the Trust, subject
to the provisions of Article VI, Section 6.1 hereof;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies and powers of attorney to such person or persons as
the Trustees shall deem proper, granting to such person or persons
such power and discretion with relation to securities or property as
the Trustee shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any Trust,
whether in bearer, book entry, unregistered, or other negotiable
form; or either in the name of the Trust or of a Portfolio or Class
thereof or in the name of a custodian or a nominee or nominees,
subject in either case to proper safeguards according to the usual
practice of Delaware business trusts or investment companies;
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(o) To establish separate and distinct Portfolios with separately
defined investment objectives and policies and distinct investment
purposes in accordance with the provisions of Article II hereof and
to establish Classes of such Portfolios having relative rights,
powers, and duties as they may provide consistent with applicable
law;
(p) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities, and expenses of the Trust to a
particular Portfolio or to apportion the same between or among two
or more Portfolios, provided that any liabilities or expenses
incurred by a particular Portfolio shall be payable solely out of
the assets belonging to that Portfolio as provided for in Article II
hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation, or merger of any corporation or concern, any security
of which is held in the Trust; to consent to any contact, lease,
mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
(s) To declare and pay dividends and make distributions of income and of
capital gains and capital to Shareholders in the manner hereinafter
provided;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Portfolio or Class, and
to require the redemption of the Shares of any Shareholder whose
investment is less than such minimum upon giving notice to such
Shareholder;
(u) To establish one or more committees, to delegate any of the powers
of the Trustees to said committees, and to adopt a committee charter
providing for such responsibilities, membership (including Trustees,
officers, or other agents of the Trust therein) and any other
characteristics of said committees as the Trustees may deem proper.
Notwithstanding the provisions of this Article IV, and in addition
to such provisions or any other provision of this Trust Agreement or
of the Bylaws, the Trustees may by resolution appoint a committee
consisting of less than the whole number of Trustees then in office,
which committee may be empowered to act for and bind the Trustees
and the Trust, as if the acts of such committee were the acts of all
the Trustees then in office, with respect to the institution,
prosecution, dismissal, settlement, review, or investigation of any
action, suit, or proceeding which shall be pending or threatened to
be brought before any court, administrative agency, or other
adjudicatory body;
(v) To interpret the investment policies, practices or limitations of
any Portfolios;
(w) To establish a registered office and have a registered agent in the
State of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything
necessary, suitable, or proper for the accomplishment of any purpose
or the attainment of any object or the furtherance of any power
hereinbefore set forth, either alone or in association with others,
and to do every other act or thing incidental or appurtenant to or
growing out of or connected with the aforesaid business or purposes,
objects, or powers.
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The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by
one or more of the Trustees in their capacity as such hereunder shall be
deemed an action on behalf of the Trust or the applicable Portfolio, and
not an action in an individual capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees
or upon their order.
SECTION 4.2. ISSUANCE AND REPURCHASE OF SHARES. The Trustees shall have
the power to issue, sell repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, and otherwise deal in Shares and,
subject to the provisions set forth in Article II and VII, to apply to any
such repurchase, redemption, retirement, cancellation, or acquisition of
Shares any funds or property of the Trust, or the particular Portfolio or
Class of the Trust, with respect to which such Shares are issued.
SECTION 4.3. ACTION BY THE TRUSTEES. The Trustees shall act by majority
vote of those present at a meeting duly called (including a meeting by
telephonic or other electronic means, unless the 1940 Act requires that a
particular action be taken only at a meeting of the Trustees in person) at
which a quorum is present or by unanimous written consent of the Trustees
(or by written consent of a majority of the Trustees if the President of
the Trust determines that such exceptional circumstances exist, and are of
such urgency, as to make unanimous written consent impossible or
impractical, which determination shall be conclusive and binding on all
Trustees and not otherwise subject to challenge) without a meeting. A
majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the
President of the Trust or by any two Trustees. Notice of the time, date,
and place of all meetings of the Trustees shall be given to each Trustee
by telephone, facsimile, electronic-mail, or other electronic mechanism
sent to his or her home or business address at least twenty-four hours in
advance of the meeting or in person at another meeting of the Trustees or
by written notice mailed to his or her home or business address at least
seventy-two hours in advance of the meeting. Notice need not be given to
any Trustee who attends the meeting without objecting to the lack of
notice or who signs a waiver of notice either before or after the meeting.
Subject to the requirements of the 1940 Act, the Trustees by majority vote
may delegate to any Trustee or Trustees authority to approve particular
matters or take particular actions on behalf of the Trust. Any written
consent or waiver may be provided and delivered to the Trust by any means
by which notice may be given to a Trustee.
SECTION 4.4. PRINCIPAL TRANSACTIONS. The Trustees may, on behalf of the
Trust, buy any securities from or sell any securities to, or lend any
assets of the Trust to, any Trustee or officer of the Trust or any firm of
which any such Trustee or officer is a member acting as principal, or have
any such dealings with any investment adviser, distributor, or transfer
agent for the Trust or with any affiliated person of such Person; and the
Trust may employ any such Person, or firm or Company in which such Person
is an affiliated person, as broker, legal counsel, registrar, investment
adviser, distributor, administrator, transfer agent, dividend disbursing
agent, custodian, or in any capacity upon customary terms, subject in all
cases to applicable laws, rules, and regulations and orders of regulatory
authorities.
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SECTION 4.5. PAYMENT OF EXPENSES BY THE TRUST. The Trustees are authorized
to pay or cause to be paid out of the principal or income of the Trust or
Portfolio (or Class), or partly out of the principal and partly out of
income, and to charge or allocate the same to, between or among such one
or more of the Portfolios (or Classes) that may be established or
designated pursuant to Article II, Section 2.3, as they deem fair, all
expenses, fees, charges, taxes, and liabilities incurred or arising in
connection with the Trust or Portfolio (or Class), or in connection with
the management thereof, including, but not limited, to the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser and manager, administrator,
principal underwriter, auditors, counsel, custodian, transfer agent,
Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur.
SECTION 4.6. TRUSTEE COMPENSATION. The Trustees as such shall be entitled
to reasonable compensation from the Trust. They may fix the amount of
their compensation. Nothing herein shall in any way prevent the employment
of any Trustee for advisory, management, administrative, legal,
accounting, investment banking, underwriting, brokerage, or investment
dealer or other services and the payment for the same by the Trust.
ARTICLE V
INVESTMENT ADVISORY, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
SECTION 5.1. INVESTMENT ADVISER. The Trustees may in their discretion,
from time to time, enter into an investment advisory or management
contract or contracts with respect to the Trust or any Portfolio whereby
the other party or parties to such contract or contracts shall undertake
to furnish the Trustees with such management, investment advisory,
statistical, and research facilities and services and such other
facilities and services, if any, and all upon such terms and conditions,
as the Trustees may in their discretion determine.
The Trustees may authorize the investment adviser to employ, from time to
time, one or more sub-advisers to perform such of the acts and services of
the investment adviser, and upon such terms and conditions, as may be
agreed upon among the Trustees, the investment adviser, and the
sub-adviser. Any references in this Trust Agreement to the investment
adviser shall be deemed to include such sub-advisers, unless the context
otherwise requires.
SECTION 5.2. OTHER SERVICE CONTRACTS. The Trustees may authorize the
engagement of a principal underwriter, transfer agent, administrator,
custodian, and similar servicers.
SECTION 5.3. PARTIES TO CONTRACT. Any contract of the character described
in Sections 5.1 and 5.2 of this Article V may be entered into with any
corporation, firm, partnership, trust, or association, although one or
more of the Trustees or officers of the Trust may be an officer, director,
trustee, shareholder, or member of such other party to the contract.
SECTION 5.4. MISCELLANEOUS. The fact that (i) any of the Shareholders,
Trustees, or officers of the Trust is a shareholder, director, officer,
partner, trustee, employee, manager, adviser, principal underwriter or
distributor, or agent of or for any Company or of or for any parent or
affiliate of any Company, with which an advisory or administration
contract, or principal underwriter's or distributor's contract, or
transfer, shareholder servicing, custodian, or other agency contract may
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have been or may hereafter be made, or that any such Company, or any
parent or affiliate thereof, is a Shareholder or has an interest in the
Trust, or that (ii) any Company with which an advisory or administration
contract or principal underwriter's or distributor's contract, or
transfer, shareholder servicing, or other agency contract may have been or
may hereafter be made also has an advisory or administration contract, or
principal underwriter's or distributor's contract, or transfer,
shareholder servicing, custodial, or other agency contract with one or
more other companies, or has other business or interests shall not affect
the validity of any such contract or disqualify any Shareholder, Trustee,
or officer of the Trust from voting upon or executing the same or create
any liability or accountability to the Trust or its Shareholders.
ARTICLE VI
SHAREHOLDERS' VOTING POWERS AND MEETING
SECTION 6.1. VOTING POWERS. The Shareholders shall have power to vote only
with respect to (1) the election of Trustees as provided in Article III,
Section 3.6, (2) the removal of a Trustee as provided in Article III,
Section 3.3(d), (3) any investment advisory contract to the extent
required by the 1940 Act, (4) termination of the Trust or a Portfolio or
Class thereof as provided in Article IX, Section 9.3, (5) amendment of
this Trust Agreement only as provided in Article IX, Section 9.7, (6) the
sale of all or substantially all the assets of the Trust or of any
Portfolio or Class, unless the primary purpose of such sale is to change
the Trust's domicile or form of organization or form of business trust;
(7) the merger or consolidation of the Trust or any Portfolio or Class
with and into another Company, unless (A) the primary purpose of such
merger or consolidation is to change the Trust's domicile or form of
organization or form of business trust, or (B) after giving effect to such
merger or consolidation, based on the number of Shares outstanding as of a
date selected by the Trustees, the Shareholders of the Trust or such
Portfolio or Class will have a majority of the outstanding shares of the
surviving Company or Portfolio or Class, as the case may be; and (8) such
additional matters relating to the Trust as may be required by law or as
the Trustees may consider desirable.
Until shares are issued, the Trustees may exercise all rights of
Shareholders and may make any action required or permitted by law, this
Trust Agreement or any of the Bylaws of the Trust to be taken by
Shareholders.
On any matter submitted to vote of the Shareholders, all Shares shall be
voted together, except when required by applicable law or when the
Trustees have determined that the matter affects the interests of one or
more Portfolios (or Classes), then only the Shareholders of all such
Portfolios (or Classes) shall be entitled to vote thereon. Each whole
Share shall be entitled to one vote as to any matter on which it is
entitled to vote, and each fractional Share shall be entitled to a
proportionate fractional vote. The vote necessary to approve any such
matter shall be set forth in this Trust Agreement or in the Bylaws.
ARTICLE VII
DISTRIBUTIONS AND REDEMPTIONS
SECTION 7.1. DISTRIBUTIONS. The Trustees may from time to time declare and
pay dividends and make other distributions with respect to any Portfolio,
or Class thereof, which may be from income, capital gains, or capital. The
amount of such dividends or distributions and the payment of them and
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whether they are in cash or any other Trust Property shall be wholly in
the discretion of the Trustees. Dividends and other distributions may be
paid pursuant to a standing resolution adopted once or more often as the
Trustees determine. All dividends and other distributions on Shares of a
particular Portfolio or Class shall be distributed pro rata to the
Shareholders of that Portfolio or Class, as the case may be, in proportion
to the number of Shares of that Portfolio or Class they held on the record
date established for such payment, provided that such dividends and other
distributions on Shares of a Class shall appropriately reflect expenses
allocated to that Class. The Trustees may adopt and offer to Shareholders
such dividend reinvestment plans, cash distribution payout plans, or
similar plans as the Trustees deem appropriate.
SECTION 7.2. REDEMPTIONS. Any holder of record of Shares of a particular
Portfolio, or Class thereof, shall have the right to require the Trust to
redeem his Shares, or any portion thereof, subject to such terms and
conditions as are set forth in the Bylaws or are prescribed by the
Trustees.
SECTION 7.3. REDEMPTION OF SHARES BY TRUSTEES. Upon the terms and
conditions set forth in the Bylaws, the Trustees may call for the
redemption of the Shares of any Person or may refuse to transfer or issue
Shares to any Person to the extent that the same is necessary to comply
with applicable law or advisable to further the purposes of which the
Trust is formed. To the extent permitted by law, the Trustees may retain
the proceeds of any redemption of Shares required by them for payment of
amounts due and owing by a Shareholder to the Trust or any Portfolio or
Class.
SECTION 7.4. REDEMPTION OF DE MINIMIS ACCOUNTS. If, at any time, when a
request for transfer or redemption of Shares of any Portfolio is received
by the Trust or its agent, the value of the Shares of such Portfolio in a
Shareholder's account is less than Five Hundred Dollars ($500.00) after
giving effect to such transfer or redemption, the Trust may, at any time
following such transfer or redemption and upon giving thirty (30) days'
notice to the Shareholder, cause the remaining Shares of such Portfolio in
such Shareholder's account to be redeemed at net asset value and in
accordance with such procedures as are set forth in the Bylaws.
SECTION 7.5. SUSPENSION OF RIGHT OF REDEMPTION. Notwithstanding Section 2
of this Article, the Trustees may postpone payment of the redemption price
and suspend the Shareholders' right to require any Portfolio or Class to
redeem Shares during any period when and to the extent permissible under
the 1940 Act. Any such postponement and suspension shall take effect at
the time the Trustees shall specify, but not later than the close of
business on the business day next following the declaration thereof, and
shall continue until the Trustees declare the end thereof. If the right of
redemption is suspended, a Shareholder may either withdraw his or her
request for redemption or receive payment based on the net asset value per
Share next determined after the suspension terminates.
ARTICLE VIII
LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 8.1. LIMITATION OF LIABILITY. A Trustee, when acting in such
capacity, shall not be personally liable to any person for any act,
omission, or obligation of the Trust or any Trustee; provided, however,
that nothing contained herein or in the Delaware Act shall protect any
Trustee against any liability to the Trust or to Shareholders to which he
would otherwise be subject by reason of willful misfeasance, bad faith,
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gross negligence, or reckless disregard of the duties involved in the
conduct of the office of Trustee hereunder.
SECTION 8.2. INDEMNIFICATION OF COVERED PERSONS. Every Covered Person
shall be indemnified by the Trust to the fullest extent permitted by
the Delaware Act and other applicable law.
SECTION 8.3. INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former shareholder of the Trust shall be held to be personally liable
solely by reason of his being or having been a Shareholder of the Trust or
any Portfolio or Class and not because of his acts or omissions or for
some other reason, the Shareholder or former Shareholder (or his heirs,
executors, administrators, or other legal representatives, or, in the case
of a corporation or other entity, its corporate or general successor)
shall be entitled, out of the assets belonging to the applicable Portfolio
(or Class), to be held harmless from and indemnified against all loss and
expense arising from such liability in accordance with the Bylaws and
applicable law. The Trust, on behalf of the affected Portfolio (or Class),
shall, upon request by the Shareholder, assume the defense of any claim
made against the Shareholder for any act or obligation of that Portfolio
(or Class).
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. TRUST NOT A PARTNERSHIP; TAXATION. It is hereby expressly
declared that a trust and not a partnership is created hereby. No trustee
hereunder shall have any power to bind personally either the Trust's
officers or any Shareholder. All persons extending credit to, contracting
with or having any claim against the Trust or the Trustees shall look only
to the assets of the appropriate Portfolio or Class or, if the Trustees
shall have yet to have established any separate Portfolio or Class, of the
Trust for payment under such credit, contract, or claim; and neither the
Shareholders nor the Trustee, nor any of their agents, whether past,
present, or future, shall be personally liable therefor.
It is intended that the Trust, or each Portfolio if there is more than one
Portfolio, be classified for income tax purposes as an association taxable
as a corporation, and the Trustees shall do all things that they, in their
sole discretion, determine are necessary to achieve that objective,
including (if they so determine) electing such classification on Internal
Revenue Form 8832. Any Trustee is hereby authorized to sign such form on
behalf of the Trust or any Portfolio, and the Trustees may delegate such
authority to any executive officer(s) of any Portfolio's investment
adviser. The Trustees, in their sole discretion and without the vote or
consent of the Shareholders, may amend this Trust Agreement to ensure that
this objective is achieved.
SECTION 9.2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY. The exercise by the trustees of their powers and discretion
hereunder in good faith and with reasonable care under the circumstances
then prevailing shall be binding upon everyone interested. Subject to the
provisions of Article VIII hereof and to Section 9.1 of this Article IX,
the Trustees shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Trust Agreement, and subject
to the provisions of Article VIII hereof and Section 9.1 of this Article
IX, shall be under no liability for any act or omission in accordance with
such advice or for failing to follow such advice. The Trustees shall not
be required to give any bond as such, nor any surety if a bond is
obtained.
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SECTION 9.3. TERMINATION OF TRUST OR PORTFOLIO OR CLASS. (a) The Trust or
any Portfolio (or Class) may be terminated by (1) a Majority Shareholder
Vote of the Trust or the affected Portfolio (or Class), respectively, or
(2) if there are fewer than 100 Shareholders of record of the Trust or of
such terminating Portfolio (or Class), the Trustees pursuant to written
notice to the Shareholders of the Trust or the affected Portfolio (or
Class).
(b) On termination of the Trust or any Portfolio (or Class) pursuant
to paragraph (a),
(1) the Trust or that Portfolio (or Class) thereafter shall carry on no
business except for the purpose of winding up its affairs,
(2) the Trustees shall proceed to wind up the affairs of the Trust or that
Portfolio (or Class), and all powers of the Trustees under this Trust
Agreement with respect thereto shall continue until such affairs have been
wound up, including the powers to fulfill or discharge the contracts of
the Trust or that Portfolio (or Class), collect its assets, sell, convey,
assign, exchange, or otherwise dispose of all or any part of its remaining
assets to one or more persons at public or private sale for consideration
that may consist in whole or in part of cash, securities, or other
property of any kind, discharge or pay its liabilities, and do all other
acts appropriate to liquidate its business, and
(3) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities, and refunding
agreements as they deem necessary for their protection, the Trustees shall
distribute the remaining assets ratably among the Shareholders of the
Trust or that Portfolio (or Class); however, the payment to any particular
Class of that Portfolio may be reduced by any fees, expenses, or charges
allocated to that Class.
(c) On completion of distribution of the remaining assets pursuant to
paragraph (b), the Trust or the affected Portfolio (or Class) shall
terminate and the Trustees and the Trust shall be discharged from all
further liabilities and duties hereunder with respect thereto and the
rights and interests of all parties therein shall be canceled and
discharged. On termination of the Trust, following completion of winding
up of its business, the Trustees shall cause a certificate of cancellation
of the Trust's certificate of trust to be filed in accordance with the
Delaware Act, which certificate may be signed by any one Trustee.
SECTION 9.4. SALE OF ASSETS; MERGER AND CONSOLIDATION. Subject to Section
6.1 of this Trust Agreement, the Trustees may cause (i) the Trust or one
or more of its Portfolios (or Classes) to the extent consistent with
applicable law to sell all or substantially all of its assets, or be
merged into or consolidated with another Trust or Company, (ii) the Shares
of the Trust or any Portfolio (or Class) to be converted into beneficial
interests in another business trust (or series thereof) created pursuant
to this Section 9.4 of Article IX, or (iii) the Shares to be exchanged
under or pursuant to any state or federal statute to the extent permitted
by law. In all respects not governed by statute or applicable law, the
Trustees shall have power to prescribe the procedure necessary or
appropriate to accomplish a sale of assets, merger or consolidation
including the power to create one or more separate business trusts to
which all or any part of the assets, liabilities, profits or losses of the
Trust may be transferred and to provide for the conversion of Shares of
the trust or any Portfolio (or Class) into beneficial interests in such
separate business trust or trusts (or series or class thereof).
SECTION 9.5. FILING OF COPIES, REFERENCES, HEADINGS. The original or a
copy of this Trust Agreement supplemental hereto shall be kept at the
office of the Trust where it may be inspected by any Shareholder. In this
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Trust Agreement or in any such amendment or supplemental Trust Agreement,
references to this Trust Agreement, and all expressions like "herein,"
"hereof," and "hereunder," shall be deemed to refer to this Trust
Agreement as amended or affected by any such supplemental Trust Agreement.
All expressions like "his," "he," and "him," shall be deemed to include
the feminine and neuter, as well as masculine, genders. Headings are
placed herein for convenience of reference only and in case of any
conflict, the text of this Trust Agreement, rather than the headings,
shall control. This Trust Agreement may be executed in any number of
counterparts each of which shall be deemed an original.
SECTION 9.6. GOVERNING LAW. The Trust and this Trust Agreement, and the
rights, obligations and remedies of the Trustees and Shareholders
hereunder, are to be governed by and construed and administered according
to the Delaware Act and the other laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees,
the Shareholders or this Trust Agreement (a) the provisions of Section
3540 of Title 12 of the Delaware Code or (b) any provisions of the laws
(statutory or common) of the State of Delaware (other than the Delaware
Act) pertaining to trusts which relate to or regulate (i) the filing with
any court or governmental body or agency of trustee accounts or schedules
of trustee fees and charges, (ii) affirmative requirements to post bonds
for trustees, officers, agents, or employees of a Trust, (iii) the
necessity for obtaining court or other governmental approval concerning
the acquisition, holding, or disposition of real or personal property,
(iv) fees or other sums payable to trustees, officers, agents, or
employees of a trust, (v) the allocation of receipts and expenditures to
income or principal, (vi) restrictions or limitations on the permissible
nature, amount, or concentration of trust investments or requirements
relating to the titling, storage, or other manner of holding of trust
assets, or (vii) the establishment of fiduciary or other standards or
responsibilities or limitations on the indemnification, acts or powers of
trustees or other Persons, which are inconsistent with the limitations of
liabilities or authorities and powers of the Trustees or officers of the
Trust set forth or referenced in this Trust Agreement.
The Trust shall be of the type commonly called a "business trust," and
without limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by trusts
under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege, or action shall not imply that the Trust may
not exercise such power or privilege or take such actions, provided,
however, that the exercise of any such power, privilege, or action shall
not otherwise violate applicable law.
SECTION 9.7. AMENDMENTS. Except as specifically provided herein, the
Trustees may, without any Shareholder vote, amend this Trust Agreement by
making an amendment, a Trust Agreement supplemental hereto, or an amended
and restated trust instrument. Any amendment submitted to Shareholders
that the Trustees determine would affect the Shareholders of only one or
more Portfolios (or Classes thereof) shall be authorized by vote of only
the Shareholders of that Portfolio (or Class), and no vote shall be
required of Shareholders of any Portfolio (or Class) that is not affected.
Notwithstanding anything else herein to the contrary, any amendment to
Article IX that would have the effect of reducing the indemnification
provided thereby to Covered Persons or to Shareholders or former
Shareholders, and any repeal or amendment of this sentence shall each
require the affirmative vote of Shareholders owning at least two-thirds of
the Outstanding Shares entitled to vote thereon. A certification signed by
a majority of the Trustees setting forth an amendment to this Trust
Agreement and reciting that it was duly adopted by the Shareholders or by
the Trustees as aforesaid, or a copy of this Trust Agreement, as amended,
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executed by a majority of the Trustees, shall be conclusive evidence of
such amendment when lodged among the records of the Trust.
SECTION 9.8. PROVISIONS IN CONFLICT WITH LAW. The provisions of this Trust
Agreement are severable, and the Trustees shall determine, with the advice
of counsel, that any of such provisions is in conflict with applicable law
the conflicting provision shall be deemed never to have constituted a part
of this Trust Agreement; provided, however, that such determination shall
not affect any of the remaining provisions of this Trust Agreement or
render invalid or improper any action taken or omitted prior to such
determination. If any provision of this Trust Agreement shall be held
invalid or enforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction
and shall not in any manner affect such provisions in any other
jurisdiction or nay other provision of this Trust Agreement in any
jurisdiction.
SECTION 9.9. SHAREHOLDERS' RIGHT TO INSPECT SHAREHOLDER LIST. One or more
persons who together and for at least six months have been Shareholders of
at least five percent (5%) of the outstanding shares of any Class may
present to any officer or resident agent of the Trust a written request
for a list of its Shareholders. Within twenty (20) days after such request
is made, the Trust shall prepare and have available on file at its
principal office a list verified under oath by one of its officers or its
transfer agent or registrar which sets forth the name and address of each
Shareholder and the number of Shares of each Class which the Shareholder
holds. The rights provided for herein shall not extend to any person who
is a beneficial owner but not also a record owner of Shares of the Trust.
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IN WITNESS WHEREOF, the undersigned, being all of the initial
Trustees of the Trust, have executed this instrument this _____ day of ______,
1998.
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SCHEDULE A
[Name of Trust] shall be divided into the following Portfolios, each of which
shall have four Classes (Class A, Class B, Class C, and Advisor Class):
AIM/GT Global Health Care Fund
AIM/GT Global Telecommunications Fund
AIM/GT Global Financial Services Fund
AIM/GT Global Infrastructure Fund
AIM/GT Global Consumer Products and Services Fund
AIM/GT Global Natural Resources Fund
AIM/GT Global Latin America Growth Fund
AIM/GT Global Emerging Markets Fund
AIM/GT Global Growth & Income Fund
AIM/GT Global Strategic Income Fund
AIM/GT Global High Income Fund
Date: [ ]
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