INVESCO ADVISOR FUNDS, INC.
INVESCO Advisor Equity Portfolio
INVESCO Advisor Flex Portfolio
INVESCO Advisor Income Portfolio
INVESCO Advisor International Value Portfolio
INVESCO Advisor MultiFlex Portfolio
INVESCO Advisor Real Estate Portfolio
INVESCO Advisor Cash Management Portfolio
[Date , 1997]
Dear INVESCO Advisor Funds Shareholder:
Enclosed is a proxy statement for the June 30, 1997 special meeting of
shareholders of INVESCO Advisor Funds, Inc. ("Company"). The recently completed
merger of INVESCO Group Services, Inc., a subsidiary of INVESCO PLC, and A I M
Management Group Inc. ("AIM Group") has created an organization with over $160
billion in assets under management. As one of the largest independent investment
companies in the world, we are now positioned to offer fund shareholders
additional investment options and improved services.
To faciliate this process, the Company's Board of Directors ("Directors")
has determined that it would be advisable to consolidate the Company's
investment advisory, marketing, administration, fund accounting and distribution
services with those of The AIM Family of Funds(R) registered investment
companies ("AIM Funds"). To effect this consolidation, it is necessary for
shareholders to approve a new investment advisory agreement with A I M Advisors,
Inc. ("AIM"), to approve the reflection of this change in five subadvisory
arrangements, to approve a new Sub-Advisory Agreement for INVESCO Advisor
International Value Portfolio, and to elect the AIM Fund directors as directors
of the Company. The sub-advisers who manage five of the Portfolios will not
change. However, AIM will directly advise INVESCO Advisor Cash Management
Portfolio, without a sub-adviser. Also INVESCO Global Asset Management Limited
will become Sub-Adviser to INVESCO Advisor International Value Portfolio, but
the individuals responsible for managing this Portfolio will not change.
Management believes that the proposed consolidation has potential to result,
over time, in reduced expense ratios for the Portfolios and expanded investment
options and services for shareholders.
If these matters are approved by shareholders, the Company's Directors
have also approved a change in the Company's name to AIM Advisor Funds, Inc.,
with corresponding changes to the names of each Portfolio. The Directors have
also approved the use for the Company of other service providers that currently
are used by the AIM Funds. These include the provision by AIM and its affiliates
of distribution, operating and transfer agent services, as well as the use of
State Street Bank and Trust Company as custodian.
The important factors for shareholders are:
o the consolidation will cause no change in the way in which the
portfolios' investments are managed, or in the investment objectives
or policies of the Portfolios.
o the consolidation will result in no change in the contractual level
of the Company's expenses, although it is hoped that the Portfolios'
expense ratios will decline since AIM's greater distribution
capabilities provide the potential for asset growth while certain
expenses will remain constant or decline.
o the range of services and investment opportunities for shareholders
will increase.
The Directors believe that the proposed changes are in the best interests
of shareholders and recommend that shareholders vote FOR them. Therefore, we
urge you to read the enclosed materials and vote promptly. Should you have any
questions, please feel free to call our representatives at 1-800-972-9030. They
will be happy to answer any questions that you might have.
Your vote is important. The matters we are submitting for your
consideration are significant to the Company, the Portfolios and to you as a
shareholder. If we do not receive sufficient votes to act on these proposals, we
may have to send additional mailings or canvass shareholders by telephone.
Therefore, please take the time to read the Proxy Statement, to cast your vote
on the enclosed proxy card, and to return the executed proxy card in the
enclosed pre-addressed, postage-paid envelope.
Sincerely,
Hubert Harris, Jr.
President
INVESCO ADVISOR FUNDS, INC.
<PAGE>
INVESCO ADVISOR FUNDS, INC.
1315 Peachtree Street, N.E.
Atlanta, Georgia 30309
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 30, 1997
Notice is hereby given that a special meeting of shareholders ("Meeting")
of INVESCO Advisor Equity Portfolio ("Equity Portfolio"), INVESCO Advisor Flex
Portfolio ("Flex Portfolio"), INVESCO Advisor Income Portfolio ("Income
Portfolio"), INVESCO Advisor International Value Portfolio ("International Value
Portfolio"), INVESCO Advisor MultiFlex Portfolio ("MultiFlex Portfolio"),
INVESCO Advisor Real Estate Portfolio ("Real Estate Portfolio") and INVESCO
Advisor Cash Management Portfolio ("Cash Management Portfolio") (collectively,
"Portfolios") of INVESCO Advisor Funds, Inc. ("Company") will be held at 1355
Peachtree Street, N.E., Suite 200, Atlanta, Georgia 30309, on Monday, June 30,
1997, at 10:00 a.m., Eastern Time, for the following purposes:
1. To approve or disapprove a new Investment Advisory Agreement with A I M
Advisors, Inc. ("AIM") (shareholders of all Portfolios);
2. For the Portfolios indicated, to approve or disapprove a new Sub-Advisory
Agreement for each such Portfolio to reflect the new investment adviser:
A. Sub-Advisory Agreement between AIM and INVESCO Capital
Management, Inc. ("ICM") (for shareholders of Equity Portfolio,
Flex Portfolio and Income Portfolio only);
B. Sub-Advisory Agreement between AIM and INVESCO Management &
Research, Inc. ("IMR") (for shareholders of MultiFlex Portfolio
only);
C. Sub-Advisory Agreement between AIM and INVESCO Realty Advisors,
Inc. ("IRA") (for shareholders of Real Estate Portfolio only);
3. To approve a new Sub-Advisory Agreement with INVESCO Global Asset
Management Limited (shareholders of International Value Portfolio only);
4. To elect a new Board of Directors for the Company (shareholders of all
Portfolios);
5. To transact such other business as may properly come before the Meeting
or any adjournment(s) thereof.
The Board of Directors of the Company has fixed the close of business on
April 30, 1997, as the record date for the determination of shareholders
entitled to notice of, and to vote at, the Meeting or at any adjournment(s)
thereof.
A complete list of shareholders of the Portfolios entitled to vote at the
Meeting will be available and open to the examination of any shareholder of the
Portfolios for any purpose germane to the Meeting during ordinary business hours
after May 27, 1997, at the offices of the Company, 1315 Peachtree Street, N.E.,
Atlanta, Georgia 30309.
You are cordially invited to attend the Meeting. Shareholders who do not
expect to attend the Meeting in person are requested to complete, date and sign
the enclosed form of proxy and return it promptly in the enclosed envelope that
requires no postage if mailed in the United States. The enclosed proxy is being
solicited on behalf of the Board of Directors of the Company.
IMPORTANT
Please mark, sign, date and return the enclosed proxy in the accompanying
envelope as soon as possible in order to ensure a full representation at the
Meeting.
The Meeting will have to be adjourned without conducting any business if
less than one-third of the eligible shares is represented, and the Company will
have to continue to solicit votes until a quorum is obtained. The Meeting also
may be adjourned, if necessary, to continue to solicit votes if less than the
required shareholder vote has been obtained to elect the specified number of
Directors and to approve Proposals 1, 2.A, 2.B, 2.C and 3.
Your vote, then, could be critical in allowing the Company to hold the
Meeting as scheduled. By marking, signing, and promptly returning the
enclosed proxy, you may eliminate the need for additional solicitation. Your
cooperation is appreciated.
By Order of the Board of Directors
Tony D. Green
Secretary
Atlanta, Georgia
Dated: . 1997
<PAGE>
INVESCO ADVISOR FUNDS, INC.
, 1997
INVESCO ADVISOR FUNDS, INC.
1315 Peachtree Street, N.E.
Atlanta, Georgia 30309
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 30, 1997
INTRODUCTION
The enclosed proxy is being solicited by the Board of Directors ("Board"
or "Directors") of INVESCO Advisor Funds, Inc. ("Company") on behalf of INVESCO
Advisor Equity Portfolio ("Equity Portfolio"), INVESCO Advisor Flex Portfolio
("Flex Portfolio"), INVESCO Advisor Income Portfolio ("Income Portfolio"),
INVESCO Advisor International Value Portfolio ("International Value Portfolio"),
INVESCO Advisor MultiFlex Portfolio ("MultiFlex Portfolio"), INVESCO Advisor
Real Estate Portfolio ("Real Estate Portfolio") and INVESCO Advisor Cash
Management Portfolio ("Cash Management Portfolio") (collectively, "Portfolios"),
the seven series of the Company, for use in connection with the special meeting
of shareholders of the Company ("Meeting") to be held at 1355 Peachtree Street,
N.E., Suite 200, Atlanta, Georgia 30309, on Monday, June 30, 1997, at 10:00
a.m., Eastern Time, and at any adjournment(s) thereof for the purposes set forth
in the foregoing notice. The Company's Annual Report, including financial
statements of the Company for the fiscal year ended December 31, 1996, is
available without charge upon request from Tony D. Green, Secretary of the
Company, at 1355 Peachtree Street, N.E., Suite 200, Atlanta, Georgia 30309
(telephone number 1-800-972-9030). The approximate mailing date of proxies and
the Proxy Statement is May 21, 1997.
The primary purpose of the Meeting is to allow shareholders to consider
several proposals which are necessary in order to implement a proposed
consolidation of services for the Company with those of The AIM Family of
Funds(R) ("AIM Funds"). As more fully described below, the Company's Board of
Directors and its management believe that this consolidation can benefit the
Portfolios and their shareholders. Specifically, shareholders are being asked to
consider a new Investment Advisory Agreement for the Company and its Portfolios
and new Sub-Advisory Agreements for five of the Portfolios, and to elect a new
Board of Directors. As explained further below, A I M Advisors, Inc. ("AIM")
will directly advise Cash Management Portfolio, with no subadviser.
Additionally, INVESCO Global Asset Management Limited ("IGAM"), a wholly owned
subsidiary of AMVESCAP PLC ("AMVESCAP"), will act as Sub-Adviser to
International Value Portfolio under substantially the same terms as under the
current Sub-Advisory Agreement for that Portfolio. There will be no substantive
changes in the terms of the Investment Advisory Agreement or of the Sub-Advisory
Agreements for the five other Portfolios, other than the identity of the
investment adviser, the effective dates, and the reservation by AIM of rights to
the "AIM" name. The identities of the Sub-Advisers for these Portfolios, and the
services they provide, will not change.
(Shareholders should note that AMVESCAP was previously known as "INVESCO
PLC" ("INVESCO"). As described further herein, a merger was concluded on
February 28, 1997 between the INVESCO organization and the AIM organization. The
term "INVESCO" herein refers to the pre-merger INVESCO and, as the context
requires, its pre-merger affiliates.)
The following table indicates the Portfolios being solicited with respect
to the proposals being presented at the Meeting:
PROPOSALS PORTFOLIO
1. Approval of new Investment All seven Portfolios
Advisory Agreement between the
Company and AIM
2.A. Approval of new Sub-Advisory Equity Portfolio, Flex Portfolio,
Agreement between AIM and Income Portfolio
INVESCO Capital Management, Inc.
("ICM")
2.B. Approval of new Sub-Advisory MultiFlex Portfolio
Agreement between AIM and
INVESCO Management and Research,
Inc. ("IMR")
2.C. Approval of new Sub-Advisory Real Estate Portfolio
Agreement between AIM and
INVESCO Realty Advisors, Inc.
("IRA")
3. Approval of new Sub-Advisory International Value Portfolio
Agreement between AIM and IGAM
4. Election of Directors All seven Portfolios
If the enclosed form of proxy is duly executed and returned in time to be
voted at the Meeting, and not subsequently revoked, all shares represented by
the proxy will be voted in accordance with the instructions marked thereon. If
no instructions are given, such shares will be voted FOR the nominees for
Director hereinafter listed and FOR Proposals 1, 2.A, 2.B, 2.C and 3. One third
of the outstanding shares of the Company entitled to vote, represented in person
or by proxy, will constitute a quorum at the Meeting.
Shares held by shareholders present in person or represented by proxy at
the Meeting will be counted both for the purpose of determining the presence of
a quorum and for calculating the votes cast on the issues before the Meeting. An
abstention by a shareholder, either by proxy or by vote in person at the
Meeting, has the same effect as a negative vote. Shares held by a broker or
other fiduciary as record owner for the account of the beneficial owner are
counted toward the required quorum if the beneficial owner has executed and
timely delivered the necessary instructions for the broker to vote the shares or
if the broker has and exercises discretionary voting power. Where the broker or
fiduciary does not receive instructions from the beneficial owner and does not
have discretionary voting power as to one or more issues before the Meeting, but
grants a proxy for or votes such shares, they will be counted toward the
required quorum but will have the effect of a negative vote on any proposals on
which the broker or financial institution does not vote.
Because certain of the proposals being submitted for a vote of the
shareholders of each Portfolio are identical, the Board determined to combine
the proxy materials for the Portfolios in order to reduce the cost of preparing,
printing and mailing the proxy materials.
Execution of the enclosed proxy card will not affect a shareholder's right
to attend the Meeting and vote in person, and a shareholder giving a proxy has
the power to revoke it (by written notice to the Company, attention Tony D.
Green, at 1355 Peachtree Street, N.E., Suite 200, Atlanta, Georgia 30309,
execution of a subsequent proxy card, or oral revocation at the Meeting) at any
time before it is exercised.
Shareholders of record of the Portfolios at the close of business on April
30, 1997 (the "Record Date"), are entitled to vote at the Meeting, including any
adjournment(s) thereof, and are entitled to one vote for each share, and
corresponding fractional votes for fractional shares, on each matter to be acted
upon at the Meeting. On the Record Date, 26,089,887.384 shares of the Company's
common stock, $.001 par value per share, were outstanding, including
1,678,220.328 shares of Equity Portfolio, 7,544,215.857 shares of Flex
Portfolio, 512,973.992 shares of Income Portfolio, 1,278,187.275 shares of
International Value Portfolio, 5,596,588.750 shares of MultiFlex Portfolio,
512,361.092 shares of Real Estate Portfolio and 8,967,340.090 shares of Cash
Management Portfolio. Information concerning ownership of shares of the
Portfolios is contained in Annex H.
In addition to the solicitation of proxies by use of the mail, proxies may
be solicited by officers of the Company, and by officers and employees of
INVESCO Services, Inc. ("ISI"), personally or by telephone or telegraph, without
special compensation. In addition, Shareholder Communications Corporation
("SCC") will be retained to assist in the solicitation of proxies.
As the meeting date approaches, certain shareholders whose votes the
Company has not yet received may receive telephone calls from representatives of
SCC requesting that they authorize SCC, by telephonic or electronically
transmitted instructions, to execute proxy cards on their behalf. Telephone
authorizations will be recorded in accordance with the procedures set forth
below. ISI believes that these procedures are reasonably designed to ensure that
the identity of the shareholder casting the vote and the voting instructions of
the shareholder are accurately determined.
SCC has received an opinion of Maryland counsel that addresses the
validity, under the laws of the State of Maryland, of authorization given orally
to execute a proxy. The opinion given by Maryland counsel concludes that a
Maryland court would find that there is no Maryland law or public policy against
the acceptance of proxies signed by an orally-authorized agent, provided it
adheres to the procedures set forth below.
In all cases where a telephonic proxy is solicited, the SCC representative
is required to ask the shareholder for such shareholder's full name, social
security or employer identification number, title (if the person giving the
proxy is authorized to act on behalf of an entity, such as a corporation), and
the number of shares owned, and to confirm that the shareholder has received the
Proxy Statement in the mail. If the information solicited agrees with the
information provided to SCC by the Company, the SCC representative has the
responsibility to explain the process, read the proposals listed on the proxy
card, and ask for the shareholder's instructions on each proposal. Although he
or she is permitted to answer questions about the process, the SCC
representative is not permitted to recommend to the shareholder how to vote,
other than to read any recommendation set forth in the proxy statement. SCC will
record the shareholder's instructions on the card. Within 72 hours, SCC will
send the shareholder a letter or mailgram confirming the shareholder's vote and
asking the shareholder to call SCC immediately if the shareholder's instructions
are not correctly reflected in the confirmation.
If a shareholder wishes to participate in the Meeting, but does not wish
to give a proxy by telephone, such shareholder may still submit the proxy card
originally sent with the Proxy Statement or attend in person. Any proxy given by
a shareholder, whether in writing or by telephone, is revocable. A shareholder
may revoke the accompanying proxy or a proxy given telephonically at any time
prior to its use by filing with the Company a written revocation or duly
executed proxy bearing a later date. In addition, any shareholder who attends
the Meeting in person may vote by ballot at the Meeting, thereby canceling any
proxy previously given.
All costs of printing and mailing proxy materials, and the costs and
expenses of holding the Meeting and soliciting proxies, including any amount
paid to SCC (expected to range from $23,000-$28,000), will be paid by ISI and
not by the Company, the Portfolios or their shareholders.
The Board may seek one or more adjournments of the Meeting to solicit
additional shareholders, if necessary, to obtain a quorum for the Meeting, or to
obtain the required shareholder vote to elect the number of specified Directors
and approve Proposals 1, 2.A, 2.B, 2.C and 3. An adjournment would require the
affirmative vote of the holders of a majority of the shares present at the
Meeting (or an adjournment thereof) in person or by proxy and entitled to vote.
If adjournment is proposed in order to obtain the required shareholder vote on a
particular proposal, the persons named as proxies will vote in favor of
adjournment those shares which they are entitled to vote in favor of such
proposal and will vote against adjournment those shares which they are required
to vote against such proposal. A shareholder vote may be taken on one or more of
the proposals discussed herein prior to any such adjournment if sufficient votes
have been received and it is otherwise appropriate.
Vote Required for Each Proposal
Proposal 1 requires approval by vote of the majority of the outstanding
voting securities of each Portfolio. Proposal 2.A requires approval by vote of
the majority of the outstanding voting securities of each of the following
Portfolios: Equity Portfolio, Flex Portfolio and Income Portfolio. Proposal 2.B
requires approval by vote of a majority of the outstanding voting securities of
MultiFlex Portfolio. Proposal 2.C requires approval by a vote of the majority of
the outstanding voting securities of Real Estate Portfolio. Proposal 3 requires
approval by a vote of the majority of the outstanding voting securities of
International Value Portfolio. Proposal 4 requires that each nominee as Director
be approved by a majority of the votes present at the Meeting in person or by
proxy and entitled to vote. For purposes of Proposals 1, 2.A, 2.B, 2.C and 3,
the Investment Company Act of 1940 ("1940 Act") defines "majority of the
outstanding voting securities" of a Portfolio to be the lesser of (a) the vote
of holders of 67% or more of the voting shares of the Portfolio present in
person or by proxy at the Meeting, if the holders of more than 50% of the
outstanding voting shares of the Portfolio are present in person or by proxy, or
(b) the vote of the holders of more than 50% of the outstanding voting shares of
the Portfolio.
The Proposed Consolidation
Management of the Company believes that the Company, the Portfolios and
their shareholders would all benefit from consolidating the Company's service
provider arrangements with those of the AIM Funds.
The consolidation would involve the following changes:
o AIM would replace INVESCO Services, Inc. as investment adviser to
the Company;
o AIM would also provide portfolio management services directly to
Cash Management Portfolio; ICM would no longer serve as Sub-Adviser
to that Portfolio;
o IGAM would become Sub-Adviser to International Value Portfolio. The
investment policies for this Portfolio will not change, and the
Portfolio Manager currently responsible for this Portfolio at ICM,
and his staff, will continue in that capacity at IGAM;
o There would be no change in Sub-Advisers, or their staffs, to the
remaining Portfolios;
o The directors of the AIM Funds would also serve as Directors of the
Company; if the nominees are elected, the current Directors (listed
in Annex F) would resign upon the taking of office of their
successors, which is expected to occur at the time the new
investment advisory agreement with AIM takes effect;
o The Company's name would be changed to AIM Advisor Funds, Inc., with
corresponding changes to the names of each Portfolio; the Portfolios
would be called "Funds;" and Equity Portfolio would be renamed Large
Cap Value Fund;
o Service providers that currently are used by the AIM Funds would
replace those currently used by the Company. AIM and its affiliates
would provide distribution, operating and transfer agent services,
and State Street Bank and Trust Company would serve as custodian.
Management believes that such a consolidation would give the Company
access to AIM's greater shareholder servicing capabilities, to the full range of
investment options offered by the AIM Funds, and to the expansive distribution
network to which AIM has access. Management believes that AIM's distribution
network can increase sales of shares of the Portfolios more rapidly than would
occur without the proposed consolidation. The result would be that breakpoints
in the level of expenses to be borne by each Portfolio or class would be reached
more quickly, which should cause Portfolio and class expenses to be lower.
Evaluation by the Board of Directors
At a meeting held on March 26, 1997, the Directors reviewed information
presented to them regarding AIM and its qualifications to act as Adviser to the
Company. They also considered the related proposed consolidation of the
Company's advisory, marketing, administration, fund accounting and distribution
services with those of the AIM Funds, while retaining the current Sub-Advisers
for five of the Portfolios. They reviewed information presented by management
regarding the anticipated benefits to the Company and its shareholders from the
new advisory relationship and the proposed consolidation. They noted that they
had been informed that a consolidation of this type would likely be proposed
when they considered matters related to the merger ("Merger") between a wholly
owned subsidiary of INVESCO PLC and the predecessor of A I M Management Group
Inc. ("Old AIM Management"). They considered the results of the extensive due
diligence activities in which they were involved in connection with the Merger,
including their evaluation of the reputation, qualities, performance record and
ethical standards of Old AIM Management and the AIM Funds. They noted that the
proposed consolidation would involve no increase in the Company's investment
advisory, sub-advisory or other contractual expenses and no apparent decrease in
the quality of services to be provided to the Company and to the Portfolios.
They noted that possible future reorganizations of certain Portfolios were being
considered, and that such reorganizations could result in changes in some types
of expenses. However, no such reorganizations had yet been decided upon and none
could occur without approval by shareholders of any affected Portfolio. With
respect to the proposed Investment Advisory Agreement with AIM, they noted the
considerable experience and qualifications of AIM and the fact that the terms of
the new Investment Advisory Agreement would be substantially the same as those
of the current Investment Advisory Agreement with ISI (except for the identity
of the investment adviser, the effective date of the agreement, and the
reservation by AIM of rights to the "AIM" name). With respect to Cash Management
Portfolio, for which AIM would provide portfolio management services directly,
without a sub-adviser, they noted AIM's experience in managing AIM Money Market
Fund. With respect to International Value Portfolio, at a meeting held on May
16, 1997, they noted that the current portfolio manager for this Portfolio, and
his staff, would be transferred from ICM to IGAM and would continue to have
primary responsibility for the Portfolio. They noted that IGAM had been formed
in 1995 to centralize the provision of global investment services to U.S.
clients by INVESCO affiliates and had been performing that function
successfully. They also noted that the terms of the Sub-Advisory Agreement with
IGAM are substantially the same as those of the Sub-Advisory Agreement with ICM.
The Directors also considered information regarding the distribution
capabilities of AIM and its affiliates, including: the asset growth of the AIM
Funds over the past six years relative to growth of the Company's assets,
including asset growth of funds that joined the AIM Funds from other groups.
They considered the significantly larger size of A I M Management Group Inc.'s
("AIM Group") sales force relative to that of ISI, and the fact that the AIM
Funds are currently sold through 2,350 broker/dealers, while the Company is sold
through only 236 broker/dealers. They noted that the Company's shareholders
would have access, through exchange privileges, to approximately 23 AIM Funds
having a variety of investment objectives. They noted that access to the
Portfolios would be facilitated by proposed reductions in the minimum required
initial and subsequent investments. They were informed about the possibility
that AIM would add a new "B" class of shares to the Company (B shares typically
involve no front-end sales charge, but have a deferred sales charge imposed on
redemptions within a certain number of years). They also noted the quality of
the shareholder and transfer agent service capabilities of A I M Fund Services,
Inc., developed to handle a substantially larger number of shareholder accounts
than are now handled by ISI and its affiliates. They noted that A I M Fund
Services, Inc. has received high ratings in industry surveys of shareholder and
broker/dealer service. They also reviewed the qualifications of other current
service providers of the AIM Funds, which would perform similar services for the
Company if the consolidation is effected, including State Street Bank and Trust
Company, the proposed custodian.
With respect to the nominees for Directors, the Directors who are not
"interested persons" as defined in the 1940 Act ("Independent Directors")
considered the nominees' extensive qualifications generally, their services as
directors and trustees of the AIM Funds, the value to the Company of having a
Board that also served the other AIM Funds, and the requirements of the 1940 Act
regarding the composition of the Board, including requirements of Section 15 (f)
of the 1940 Act. The Independent Directors recommended approval of these
nominees to the full Board.
The Directors noted that the anticipated benefits of consolidation
included the possibility of lower expenses for the Portfolios. This reduction
would likely occur if the larger AIM Group distribution force was successful in
increasing sales of shares of the Portfolios. Increased sales could bring the
Portfolios' assets to sizes at which break-points in the level of expenses of
each Portfolio and class would take effect.
With respect to the new Sub-Advisory Agreements, at their March and May,
1997 meetings, the Directors noted the continued quality of services provided by
ICM, IMR and IRA to the Portfolios to which they currently provide services, and
the desirability of retaining continuity in the management of the Portfolios'
assets. They noted also that continuity of service would be maintained for
International Value Portfolio through the proposed new Sub-Advisory Agreement
with IGAM. They also noted that the terms of the proposed new Sub-Advisory
Agreements were substantially the same as those of the current Sub-Advisory
Agreements and, in particular, that there would be no change in the provisions
regarding fees and expenses payable by the Portfolios.
Based upon the Directors' review and their evaluation of all materials
presented to them, and in consideration of all factors deemed relevant by them,
and after consultation with independent counsel to the Independent Directors,
the Board determined that each of the proposed agreements- i.e., the new
Investment Advisory Agreement with AIM and the new Sub-Advisory Agreements -- is
fair and reasonable and in the best interests of the Company, the Portfolios and
their shareholders. Accordingly, the Board, including all of the Independent
Directors, approved each of the proposed agreements and voted to recommend that
the Company's shareholders vote to approve the new Investment Advisory
Agreement, and that the shareholders of each Portfolio (except Cash Management
Portfolio) vote to approve the applicable new Sub-Advisory Agreement. They also
approved recommending shareholder approval of the proposed nominees as
Directors.
PROPOSAL 1: Approval of the Proposed Advisory Agreement between the Company and
A I M Advisors, Inc.
The current Investment Advisory Agreement between the Company and ISI
("ISI Agreement"), and the proposed Investment Advisory Agreement between the
Company and AIM ("AIM Agreement"), have substantially identical terms, except
for the name of the investment adviser and the date. The ISI Agreement was last
approved by the Directors at a meeting held November 6, 1996 and by shareholders
of each Portfolio at a meeting held January 31, 1997, concerning issues related
to the Merger. The AIM Agreement was approved, subject to shareholder approval,
by a majority of the Directors, including a majority of the Independent
Directors, at a meeting held March 26, 1997.
(a) Information Concerning AIM
AIM was organized in 1976 and, together with its subsidiaries,
advises 38 investment company portfolios constituting the AIM Funds and
sub-advises one investment company portfolio. As of April 30, 1997, the total
assets of the AIM Funds were approximately $64.4 billion. AIM is a wholly owned
subsidiary of AIM Group. AIM Group is a wholly owned subsidiary of AVZ Inc. and
an indirect subsidiary of AMVESCAP PLC (formerly AMVESCO PLC and INVESCO PLC).
AMVESCAP PLC is a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3,
1997, as part of the Merger, which created one of the largest independent
investment management businesses in the world. Shareholders approved a name
change for AMVESCO PLC to AMVESCAP PLC effective May 8, 1997. AMVESCAP PLC has
approximately $165 billion in assets under management.
Certain of the directors and officers of AIM are also nominees as
Directors of the Company. Their names, principal occupations and affiliations
are shown in the table under Proposal 4. Information regarding the AIM Funds,
including their total net assets and the fees received by AIM from such AIM
Funds for its services, is set forth in Annex G. The address of AIM, all of the
directors of AIM, A I M Distributors, Inc., A I M Fund Services, Inc., Fund
Management Company, A I M Institutional Fund Services Inc. and AIM Group is 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The addresses of AMVESCAP
PLC and AVZ Inc. are, respectively, 11 Devonshire Square, London, England EC2M
4YR and 1315 Peachtree Street, N.E., Atlanta, Georgia 30309.
Information on the directors and executive officers of AIM is
contained in Annex I.
(b) Recent Transactions Involving Securities of AIM's Parent
Messrs. Charles T. Bauer and Robert H. Graham, nominees for election
as Directors of the Company, acquired shares of INVESCO on February 28, 1997 in
exchange for shares of Old AIM Management (the parent of AIM) which they owned
upon consummation of the Merger. The Merger is described below.
On November 4, 1996, Old AIM Management and INVESCO, a company
incorporated under the laws of England, announced the execution of an agreement
and plan of merger (the "Merger Agreement") pursuant to which Old AIM Management
would merge with and into AVZ Inc., a direct wholly owned subsidiary of INVESCO,
with AVZ Inc. being the surviving corporation. The Merger Agreement valued Old
AIM Management at approximately $1.6 billion as of November 4, 1996. The
consideration paid in connection with the Merger, which was completed on
February 28, 1997, consisted of: (i) 290 million Ordinary Shares of INVESCO,
allocated among all outstanding shares of the Common Stock of Old AIM
Management, par value $0.0025 per share ("Old Common Stock"), all outstanding
shares of the Class B Common Stock of Old AIM Management, par value $0.0025 per
share, and vested and unvested options and a warrant for Old Common Stock, and
(ii) cash in an amount estimated at February 28, 1997 to be approximately $544
million, which was allocated among Old AIM Management's stockholders and the
holders of certain vested options for Old Common Stock and a warrant for Old
Common Stock. The actual amount of the cash consideration is to be adjusted to
take into account certain transaction expenses, certain balance sheet items and
Old AIM Management's net income and dividends paid from September 1, 1996
through the closing date of the Merger. Upon consummation of the Merger,
stockholders of Old AIM Management (which included Messrs. Bauer and Graham),
option holders and the warrant holder owned approximately 45 percent of the
issued INVESCO Ordinary Shares on a fully diluted basis.
After the Merger was completed, AVZ Inc. contributed all of the
assets and liabilities of Old AIM Management to A I M Management Group Inc.
(formerly, A I M Management Group Acquisition Corp.) ("AIM Group"), a Delaware
corporation and a wholly owned subsidiary of AVZ Inc. The officers of Old AIM
Management prior to the Merger have continued as officers of AIM Group and four
of the directors of Old AIM Management prior to the Merger have continued as
directors of AIM Group. The officers and directors of AIM did not change as a
result of the Merger.
(c) The Agreements
The operative terms of the AIM Agreement are substantially identical
to those of the ISI Agreement, other than the name of the investment adviser and
the date. The form of proposed AIM Agreement is attached as Annex A. The terms
of each of the Agreements are as follows. (The ISI Agreement and the AIM
Agreement are referred to collectively as "Agreements" and ISI and AIM are
referred to as "Adviser.")
Each Agreement provides that it shall remain in force for an initial
two-year term and, thereafter, may be continued from year to year as to each
Portfolio as long as each such continuance is approved at least annually by the
Board, or by a vote of the holders of a majority of the then-outstanding voting
securities (as defined above under "Vote Required for Each Proposal") of the
Portfolios. Any such continuance also must be approved by a majority of the
Independent Directors of the Company at a meeting called for the purpose of
voting on such continuance. Upon sixty (60) days' written notice, each Agreement
may be terminated at any time without penalty by the Board, or by a majority of
the then-outstanding voting securities of the Company or, with respect to a
particular Portfolio, by a majority of the then-outstanding voting securities of
that Portfolio, or by the Adviser. Each Agreement provides that it will
terminate automatically in the event of its "assignment" under the 1940 Act.
The Agreements provide that the Adviser shall (either directly or by
delegation to a sub-adviser) maintain a continuous investment program for the
Company and each of the Portfolios that is consistent with the Company's and the
Portfolios' respective investment objectives and policies as set forth in the
Company's registration statement (the "Registration Statement") and prospectuses
and statements of additional information of each of the Portfolios (the
"Prospectus" and the "SAI") as in effect from time to time under the 1940 Act
and the Securities Act of 1933, as amended. In the performance of such duties,
the Adviser shall, among other things: (i) manage the investment and
reinvestment of the assets of the Company and the Portfolios; (ii) determine
what securities are to be purchased or sold for the Company and the Portfolios
and execute transactions accordingly; (iii) furnish the Company and the
Portfolios with investment analysis and research, reviews of current economic
conditions and trends and considerations respecting long-range investment
policies; (iv) make recommendations as to the manner in which rights pertaining
to the Portfolios' securities should be exercised; (v) furnish requisite
personnel necessary in connection with the Portfolios' operations; (vi) furnish
office space, facilities, equipment and supplies; (vii) conduct periodic reviews
of the Portfolios' compliance operations; (viii) prepare and review certain
required documents, reports and filings (including filings to the Securities and
Exchange Commission), except insofar as the assistance of independent
accountants or attorneys is necessary or desirable; (ix) supply basic telephone
service and other utilities; and (x) prepare and maintain the books and records
required under Rule 31a-1(b)(4), (5), (9) and (10) under the 1940 Act. The
Adviser, pursuant to the Agreement, pays all of the costs and expenses
associated with the Portfolios' operations and activities, except those
expressly assumed under the Agreement by the Portfolios. Expenses paid by the
Portfolios include, among others: (a) brokers' commissions, issue and transfer
taxes and other costs in connection with securities transactions in which the
Company is a party; (b) any interest on indebtedness incurred by the Company;
(c) extraordinary expenses (such as unexpected franchise taxes and corporate
fees); (d) distribution expenses permissible under the Portfolios' Plan of
Distribution (other than the Cash Management Portfolio) adopted pursuant to Rule
12b-1 under the 1940 Act; and (e) all fees paid by the Portfolios for
operational services pursuant to the Portfolios' Operating Services Agreement
(discussed below).
As full compensation for its advisory services to the Company, the
Adviser receives a monthly fee. The fee is based upon a percentage of each
Portfolio's average net assets, determined daily. Specifically, the fee is
calculated at the annual rate of: with respect to each of the Equity Portfolio
and the Flex Portfolio, 0.75% of the Portfolio's average net assets; with
respect to the Real Estate Portfolio, 0.90% of the Portfolio's average net
assets; with respect to each of the MultiFlex Portfolio and the International
Value Portfolio, 1.00% of the Portfolio's average net assets; with respect to
the Income Portfolio, 0.65% of the Portfolio's average net assets (however, ISI
waives, and AIM has agreed to waive, 0.25% of the advisory fee for a three-year
period beginning October 1, 1995); and with respect to the Cash Management
Portfolio, 0.50% of the Portfolio's average net assets.
For the fiscal year ended December 31, 1996, total advisory fees
paid to ISI by the Portfolios were as follows: (i) $946,203, with respect to the
Equity Portfolio; (ii) $3,351,899, with respect to the Flex Portfolio; (iii)
$102,386, with respect to the Real Estate Portfolio; (iv) $2,164,778, with
respect to the MultiFlex Portfolio; (v) $314,843, with respect to the
International Value Portfolio; (vi) $115,744, with respect to the Income
Portfolio (without the waivers by ISI, the fees for this Portfolio would have
been $188,085); and (vii) $95,995, with respect to the Cash Management
Portfolio. Net assets of each of such Portfolios at December 31, 1996 totaled
$137,415,746; $489,917,938; $20,566,481; $266,843,132; $51,915,976; $26,162,310;
and $15,946,305, respectively.
AIM and the Sub-Advisers permit investment and other personnel to
purchase and sell securities for their own accounts, subject to a compliance
policy governing personal investing. This policy requires AIM's and
Sub-Adviser's personnel to conduct their personal investment activities in a
manner that AIM and the Sub-Advisers believe is not detrimental to the
Portfolios or AIM's and the Sub-Advisers' other advisory clients.
The AIM Agreement expressly provides that the Company shall be
entitled to use the name "AIM" with respect to a Portfolio only so long as AIM
serves as investment manager or adviser to such Portfolio. The AIM Agreement
will take effect with respect to each Portfolio that approves the AIM Agreement
at the close of business on August 1, 1997, or on such later date as may be set
by the parties.
THE DIRECTORS, INCLUDING A MAJORITY OF THE INDEPENDENT DIRECTORS, RECOMMEND
THAT ALL OF THE COMPANY'S SHAREHOLDERS VOTE TO APPROVE THE AIM AGREEMENT
BETWEEN THE COMPANY AND AIM.
PROPOSALS 2.A, 2.B, AND 2.C: Approval of Proposed Sub-Advisory Agreements
with ICM, IMR and IRA.
The proposed new Sub-Advisory Agreements ("New Sub-Advisory Agreements")
have terms substantially identical to those of the current Sub-Advisory
Agreements ("Current Sub-Advisory Agreements"), except for their dates and the
fact that they are now between AIM (instead of ISI) and the respective
sub-advisers - ICM, IMR and IRA (collectively, "Sub-Advisers"). The New
Sub-Advisory Agreement with ICM will also reflect that ICM will no longer act as
Sub-Adviser to Cash Management Portfolio or International Value Portfolio. The
forms of proposed Sub-Advisory Agreements with ICM, IMR and IRA are attached as
Annex B, C and D, respectively.
At a meeting held April 19, 1995, the Directors, including a majority of
the Independent Directors, approved amendments to the Current Sub-Advisory
Agreements to reflect the change of the Company's name to INVESCO Advisor Funds,
Inc. The Current Sub-Advisory Agreements were also approved by the Directors ,
including a majority of the Independent Directors, at a meeting held November 6,
1996, contingent upon shareholder approval and consummation of the Merger, and
by shareholders of each Portfolio at a meeting held January 31, 1997. The New
Sub-Advisory Agreements were approved by a majority of the Directors, including
a majority of the Independent Directors, subject to shareholder approval, at a
meeting held March 26, 1997. The terms of the Current Sub-Advisory Agreements
and New Sub-Advisory Agreements (collectively, "Sub-Advisory Agreements") are as
follows.
Each of the Sub-Advisory Agreements provides that it shall remain in force
for an initial two year term and may be continued from year to year thereafter
with respect to the particular Portfolio as long as each such continuance is
approved at least annually by the Board or by a vote of the holders of a
majority of the then-outstanding voting securities (as defined above under "Vote
Required for Each Proposal") of the particular Portfolio. Any such continuance
must also be approved by a majority of the Independent Directors of the Company
at a meeting called for the purpose of voting on such continuance.
Each of the Sub-Advisory Agreements may be terminated at any time without
penalty by the Adviser, the Board, a vote of a majority of the then-outstanding
voting securities of the respective Portfolio or by the applicable Sub-Adviser.
Termination by the Adviser or the Sub-Adviser requires sixty (60) days' written
notice to the other party and to the Company.
Each of the New Sub-Advisory Agreements provides, as applicable, that ICM,
as Sub-Adviser for Equity Portfolio, Flex Portfolio and Income Portfolio
(collectively, the "ICM Sub-Advised Portfolios"), IMR, as Sub-Adviser for the
MultiFlex Portfolio, and IRA, as Sub-Adviser for the Real Estate Portfolio,
subject to the supervision of the Adviser and the Board, shall maintain a
continuous investment program for the ICM Sub-Advised Portfolios, the MultiFlex
Portfolio and the Real Estate Portfolio, respectively, that is consistent with
each Portfolio's respective investment objectives and policies as set forth in
the Company's Registration Statement and in the Portfolio's Prospectus and SAI.
(The Current Sub-Advisory Agreement with ICM additionally covers Cash Management
Portfolio and International Value Portfolio.) In the performance of such duties,
each Sub-Adviser is obligated to provide the Portfolios it sub-advises with
portfolio management services including: (i) managing the investment and
reinvestment of the assets of the Portfolios; (ii) determining what securities
are to be purchased or sold for the Portfolios and executing transactions
accordingly; (iii) furnishing the Portfolios with investment analysis and
research, reviews of current economic conditions and trends and considerations
respecting long-range investment policies; and (iv) making recommendations as to
the manner in which rights pertaining to the Portfolios' securities should be
exercised.
The ICM New Sub-Advisory Agreement provides that as compensation for its
services, ICM shall receive from the Adviser, at the end of each month, a fee
based upon each of the ICM Sub-Advised Portfolios' average daily net asset
value. Specifically, the fee is calculated at the following annual rates: with
respect to each of the Equity Portfolio and the Flex Portfolio, 0.20% of each
Portfolio's average net assets; and with respect to the Income Portfolio, 0.10%
of that Portfolio's average net assets. (Fees payable to ICM with respect to
Cash Management Portfolio under the ICM Current Sub-Advisory Agreement were at
the rate of 0.10% of that Portfolio's net assets. These fees will be retained by
AIM if Proposal 1 is approved by shareholders of Cash Management Portfolio. Fees
to ICM with respect to the International Value Portfolio were at the rate of
0.35% of the first $50 million of the Portfolio's net assets; 0.30% on the next
$50 million of the Portfolio's average net assets and 0.25% on net assets in
excess of $100 million. These fees will be payable to IGAM if Proposal 3 is
approved by shareholders of that Portfolio.) Total fees paid by ISI to ICM with
respect to each of the ICM Sub-Advised Portfolios for the last fiscal year of
the Company were: Equity Portfolio, $252,321, Flex Portfolio, $893,840, Income
Portfolio, $28,936, International Value Portfolio, $110,187, and Cash Management
Portfolio, $19,199.
The IMR Sub-Advisory Agreement provides that as compensation for its
services, IMR shall receive from the Adviser, at the end of each month, a fee
based upon the MultiFlex Portfolio's average net asset value. Specifically, the
fee is calculated at the following annual rates: 0.35% of the first $500 million
of the Portfolio's average net assets and 0.25% on assets in excess of $500
million of the Portfolio's average net assets. Total fees paid to IMR by ISI
with respect to MultiFlex Portfolio for the last fiscal year of the Company were
$757,672.
The IRA Sub-Advisory Agreement provides that as compensation for its
services, IRA shall receive from the Adviser, at the end of each month, a fee
based upon the Real Estate Portfolio's average net assets. Specifically, the fee
is calculated at the following annual rates: 0.35% of the first $100 million of
the Portfolio's average net assets and 0.25% of the Portfolio's average net
assets in excess of $100 million. Total fees paid to IRA by ISI with respect to
Real Estate Portfolio for the last fiscal year of the Company were $39,817.
With respect to each of the Sub-Advisory Agreements, the sub-advisory fees
are paid by the Adviser, and not paid by the Portfolios or their shareholders.
Each New Sub-Advisory Agreement will take effect with respect to a
Portfolio at the later of the time the AIM Agreement takes effect or approval by
shareholders of that Portfolio is obtained.
Information Concerning Sub-Advisers
INVESCO Capital Management, Inc.
INVESCO Capital Management, Inc. ("ICM"), 1315 Peachtree Street, N.E.,
Atlanta, Georgia 30309, is a wholly owned subsidiary of INVESCO North American
Holdings, Inc. ("INAH"). INAH's offices are located at 1315 Peachtree Street,
N.E., Suite 500, Atlanta, Georgia 30309. As Sub-Adviser, ICM has primary
responsibility for providing investment advisory and research services for the
ICM Sub-Advised Portfolios. ICM also acts as adviser to INVESCO Treasurer's
Series Trust and as sub-adviser to the INVESCO Intermediate Government Bond
Fund, the INVESCO Total Return Fund, the INVESCO Value Equity Fund and the
INVESCO VIF-Total Return Portfolio, and offers investment services to U.S.
institutions and wealthy individuals.
The principal executive officers and directors of ICM and their principal
occupations are:
Edward C. Mitchell, Jr., Chairman; Frank M. Bishop, President, CEO and
Director; Luis A. Aguilar, Executive Vice President, Secretary, and General
Counsel; Stephen A. Dana, Vice President and Director; David Hartley, Chief
Financial Officer; Terry Miller, Deputy President and Director; Tim Culler,
Chief Investment Officer, Vice President and Director; Wendell M. Starke,
Director, also Chairman of IGAM; and A.D. Frazier, Director, also Director of
IMR and IRA.
The address of each of the foregoing officers and directors is 1315
Peachtree Street, N.E., Atlanta, Georgia 30309.
INVESCO Management & Research, Inc.
INVESCO Management & Research, Inc. ("IMR"), 101 Federal Street, Boston,
Massachusetts 02110, formerly Gardner and Preston Moss, Inc., is a wholly owned
subsidiary of INAH. As Sub-Adviser, IMR has the primary responsibility for
providing investment advisory and research services for the MultiFlex Portfolio.
IMR also acts as sub-adviser to the INVESCO Multi-Asset Allocation Fund and the
INVESCO Small Company Fund and offers investment services to U.S. institutions
and wealthy individuals.
The principal executive officers and directors of IMR and their principal
occupations are:
Frank J. Keeler, Chief Executive Officer, President and Director; William
M. McCarthy, Senior Vice President and Director; and A.D. Frazier, Director,
also Director of ICM and IRA..
The address of Messrs. Keeler and McCarthy is 101 Federal Street, Boston,
Massachusetts 02110. The address of Mr. Frazier is 1315 Peachtree Street, N.E.,
Atlanta, Georgia 30309.
INVESCO Realty Advisors, Inc.
INVESCO Realty Advisors, Inc. ("IRA"), One Lincoln Center, Suite 1200,
5400 LBJ Freeway LB2, Dallas, Texas 75240, is a wholly owned subsidiary of INAH.
As Sub-Adviser, IRA has the primary responsibility for providing investment
advisory and research services for the Real Estate Portfolio. IRA also offers
investment services to U.S. institutions and wealthy individuals.
The principal executive officers and directors of IRA and their principal
occupations are:
D.A. Ridley, President and Chairman of the Board; David N. Farmer,
Executive Vice President and Director; and A.D. Frazier, Director, also Director
of ICM and IMR.
The address of Messrs. Farmer and Ridley is One Lincoln Center, Suite
1200, 5400 LBJ Freeway LB2, Dallas, Texas 75240. The address of Mr. Frazier is
1315 Peachtree Street, N.E., Atlanta, Georgia 30309.
ICM, IRA and IMR are indirectly wholly owned subsidiaries of AMVESCAP.
THE DIRECTORS, INCLUDING A MAJORITY OF THE INDEPENDENT DIRECTORS, RECOMMEND THAT
SHAREHOLDERS OF THE ICM SUB-ADVISED PORTFOLIOS VOTE TO APPROVE THE NEW
SUB-ADVISORY AGREEMENT BETWEEN AIM AND ICM, THAT SHAREHOLDERS OF THE MULTIFLEX
PORTFOLIO VOTE TO APPROVE THE NEW SUB-ADVISORY AGREEMENT BETWEEN AIM AND IMR AND
THAT SHAREHOLDERS OF THE REAL ESTATE PORTFOLIO VOTE TO APPROVE THE NEW
SUB-ADVISORY AGREEMENT BETWEEN AIM AND IRA.
PROPOSAL 3: Approval of Proposed Sub-Advisory Agreement with IGAM
Due to a structural reorganization, the portfolio manager and assisting
staff of ICM who have been responsible for International Value Portfolio are
being transferred to IGAM, an AMVESCAP subsidiary formed to centralize global
investing by INVESCO affiliated companies for U.S. clients into one company. ISI
has provided the Board of Directors with information regarding IGAM. At a
meeting held May 16, 1997, the Board determined that it will be advisable to
maintain continuity in the style of management for International Value Portfolio
by terminating the ICM Sub-Advisory Agreement with respect to International
Value Portfolio and approving a new Sub-Advisory Agreement for this Portfolio
between AIM and IGAM ("IGAM Sub-Advisory Agreement"). Except for the identities
of the parties and the date, the terms of the IGAM Sub-Advisory Agreement (see
Annex E) are the same with respect to International Value Portfolio as the terms
for this Portfolio under the current ICM Sub-Advisory Agreement, which is
described above under Proposal 2. The fees payable to IGAM by AIM under the IGAM
Sub-Advisory Agreement would be at the rate of 0.35% of the first $50 million of
the Portfolio's net assets; 0.30% on the next $50 million of the Portfolio's
average net assets and 0.25% on assets in excess of $100 million. These fees are
the same as those payable to ICM with respect to this Portfolio under the
current ICM Sub-Advisory Agreement.
Information About IGAM
IGAM, located at Cedar House, 41 Cedar Avenue, Hamilton, HM12 Bermuda, was
incorporated under the laws of Bermuda on May 2, 1995 and is an indirect wholly
owned subsidiary of AMVESCAP. IGAM is registered as an investment adviser under
the Investment Advisers Act of 1940. IGAM's responsibilities include analyzing
global economic trends and establishing INVESCO's global investment asset
allocations for INVESCO affiliates in addition to managing $11 million in
assets, as of December 31, 1996. Types of clients include individuals,
investment companies, pension and profit sharing plans, trusts, estates and
charitable organizations. International Value Portfolio's current manager, W.
Lindsay Davidson, is moving to IGAM, along with substantially all the supporting
members of his staff that currently provide services to this Portfolio under the
current ICM Sub-Advisory Agreement. Mr. Davidson has managed International Value
Portfolio since its inception in May 1995, and has served as a portfolio manager
for INVESCO affiliates since 1984. If this Proposal 3 is approved by
shareholders of International Value Portfolio, Mr. Davidson and his staff will
continue to provide this Portfolio services of the same nature and quality as
those they have been providing to the Portfolio at ICM.
The principal executive officers and directors of IGAM, their principal
occupations and addresses are:
Wendell M. Starke, Chairman, also Director of ICM; Everard T. Richards,
Deputy Chairman of Operations and Director; David A. Hartley, Treasurer and
Assistant Secretary; Michael A. Wood, Secretary; John D. Campbell, Director;
Ricardo Ricciardi, Director; and John Rogers, Director.
The business address of each of the foregoing is Cedar House, 41 Cedar
Avenue, Hamilton, HM12 Bermuda.
The IGAM Sub-Advisory Agreement will take effect on the later of the time
the AIM Agreement takes effect or approval by shareholders of International
Value Portfolio is obtained.
THE DIRECTORS, INCLUDING A MAJORITY OF THE INDEPENDENT DIRECTORS, RECOMMEND
THAT SHAREHOLDERS OF THE INTERNATIONAL VALUE PORTFOLIO VOTE TO APPROVE THE NEW
SUB-ADVISORY AGREEMENT BETWEEN AIM AND IGAM.
Other Services to be Provided by AIM and Its Affiliates
Subject to shareholder approval of the Investment Advisory Agreement with
AIM, the Board of Directors has also approved other service agreements for the
Company with AIM and its affiliates. These agreements are substantially
identical to current agreements between the Company and ISI and its affiliates.
These agreements are described below.
(a) Operating Services
ISI currently provides operating services pursuant to an Operating
Services Agreement with the Company. If shareholders approve the Proposals in
this Proxy Statement, the Company will enter into an Operating Services
Agreement, with substantially identical terms, with AIM. Under the Operating
Services Agreement, each Portfolio pays to the Adviser an annual fee of 0.45% of
daily net assets of the Portfolio for providing or arranging to provide
accounting, legal (except litigation), dividend disbursing, transfer agent,
registrar, custodial, shareholder reporting, sub-accounting and recordkeeping
services and functions. The agreement provides that the Adviser pays all fees
and expenses associated with these and other functions, including, but not
limited to, registration fees, shareholder meeting fees, and proxy statement and
shareholder report expenses.
The combined effect of the Advisory Agreements, Operating Services
Agreement, and Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act is
to place a cap or ceiling on the total expenses of each Portfolio, other than
brokerage commissions, interest, taxes, litigation, directors' fees and
expenses, and other extraordinary expenses. ISI has voluntarily agreed to adhere
to maximum expense ratios for the Portfolios. At a Board meeting held March 26,
1997, AIM agreed to assume ISI's commitment for a period of three years from the
effective date of the Merger, which was February 28, 1997, provided that expense
ratios might change within this period in the event one or more Portfolios were
reorganized or merged with another fund. Any such reorganization or merger would
require approval by shareholders of the affected Portfolio(s).
Pursuant to these commitments, ISI has, and AIM will, waive its fees
or reimburse the Portfolio to assure that expenses do not exceed the following
expense ratios: if, in any calendar quarter, the average net assets of each of
the Equity or Flex Portfolios are less than $500 million, each Portfolio's
expenses shall not exceed 1.55% for Class A and 2.20% for Class C; on the next
$500 million of net assets, expenses shall not exceed 1.50% for Class A and
2.15% for Class C; on the next $1 billion of net assets, expenses shall not
exceed 1.45% for Class A and 2.10% for Class C; and on all assets over $2
billion, expenses shall not exceed 1.40% for Class A and 2.05% for Class C. If,
in any calendar quarter, the average net assets of the MultiFlex or
International Value Portfolios are less than $100 million, expenses shall not
exceed 1.80% for Class A and 2.45% for Class C; on the next $400 million of net
assets, expenses shall not exceed 1.75% for Class A and 2.40% for Class C; on
the next $500 million, expenses shall not exceed 1.70% for Class A and 2.35% for
Class C; on the next $1 billion of net assets, expenses shall not exceed 1.65%
for Class A and 2.30% for Class C; and on all assets over $2 billion, expenses
shall not exceed 1.60% for Class A and 2.25% for Class C. If, in any calendar
quarter, the average net assets of the Real Estate Portfolio are less than $500
million, expenses shall not exceed 1.70% for Class A and 2.35% for Class C; on
the next $500 million, expenses shall not exceed 1.65% for Class A and 2.30% for
Class C; and on all assets over $1 billion, expenses shall not exceed 1.60% for
Class A and 2.25% for Class C. In any calendar year, the expenses of the Income
Portfolio may not exceed 1.35% for Class A and 1.70% for Class C, and the
expenses of the Cash Management Portfolio may not exceed 0.95% of average net
assets. AIM has also agreed to assume the remaining term of ISI's commitment to
reimburse the Income Portfolio for a three-year period beginning October 1,
1995, so that the expenses shall not exceed 1.10% for Class A and 1.45% for
Class C of average net assets per annum.
The Operating Services Agreement fees paid by each Portfolio during
the last fiscal year were: Flex Portfolio, $2,233,908; Equity Portfolio,
$630,611; MultiFlex Portfolio, $965,775; International Value Portfolio,
$157,351; Real Estate Portfolio, $56,854; Income Portfolio,
$144,644; and Cash Management Portfolio, $95,973.
(b) Distribution
ISI currently serves as the Company's distributor. If the
consolidation is implemented, the Directors have approved a Distribution
Agreement between the Company and A I M Distributors, Inc. ("Distributor"),
under which the Distributor would serve as principal underwriter of the Company.
All of the Distributor's outstanding shares of voting stock are owned by AIM.
The Distributor is also the principal underwriter for other investment
companies. The Distributor acts as agent upon the receipt of orders from
investors. The Distributor's principal office is located at 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173.
The Distributor receives payments for distribution-related
activities from the Equity, Income, Flex, MultiFlex, Real Estate and
International Value Portfolios pursuant to the plans of distribution adopted
pursuant to Rule 12b-1 under the 1940 Act, as described under "Plans of
Distribution" in the Company's current prospectus and in the Company's Statement
of Additional Information under "Distribution of Shares." The Cash Management
Portfolio does not have a plan of distribution under Rule 12b-1.
(c) Other Services
The Directors have also approved the following other service
agreements, to take effect if shareholders approve the Proposals in this Proxy
Statement: a transfer agent agreement with A I M Fund Services, Inc. and a
custody agreement with State Street Bank. (State Street Bank is a custodian and
investment manager, with $2.9 trillion in assets under custody.) The costs of
these services will be covered pursuant to the Operating Services Agreement.
PROPOSAL 4: Election of Directors
The present Board of Directors has approved the nomination of the
following persons as Directors of the Company. The nominees who are not
identified as being "interested persons" of the Company were selected by the
current Independent Directors, serving as a nominating committee for independent
directors, and approved by the full Board. All of the nominees presently serve
as directors, trustees or officers of the AIM Funds.
The proxies will vote for the election of the nominees named below unless
authority to vote for any or all of the nominees is withheld in the proxy. Each
of the nominees has indicated that he is willing to serve as a Director. If any
or all of the nominees should become unavailable for election due to events not
now known or anticipated, the persons named as proxies will vote for such other
nominee or nominees as the Directors who are not "interested persons" of the
Company, as defined in the 1940 Act, may recommend. If elected, the nominees
will take office at the time the AIM Agreement takes effect.
The following table sets forth certain information concerning the nominees
for Directors:
(1) Principal Occupation/Affiliations During
Name (Age) Past Five Years and (2) Current Directorships
- ---------- ---------------------------------------------
Charles T. Bauer (78)* (1) Chairman of the Board of Directors, A I M
Management Group Inc., A I M Advisors, Inc.,
A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc.,
A I M Institutional Fund Services, Inc. and
Fund Management Company; and Vice Chairman and
Director, AMVESCAP PLC.
(2) Director/Trustee of the AIM Funds
Bruce L. Crockett (53) (1) Formerly, Director, President and Chief
Executive Officer, COMSAT Corporation
(includes COMSAT World Systems, COMSAT Mobile
Communications, COMSAT Video Enterprises,
COMSAT RSI and COMSAT International Ventures);
President and Chief Operating Officer, COMSAT
Corporation; President, World Systems
Division, COMSAT Corporation; and Chairman,
Board of Governors of INTELSAT (each of the
COMSAT companies listed above is an
international communication, information and
entertainment-distribution services company).
(2) Director/Trustee of the AIM Funds.
Owen Daly II (72) (1) Formerly, Director, CF&I Steel Corp.,
Monumental Life Insurance Company and
Monumental General Insurance Company; and
Chairman of the Board of Equitable
Bancorporation.
(2) Director/Trustee of the AIM Funds; and
Director, Cortland Trust Inc. (investment
company).
Jack Fields (45) (1) Formerly, member of U.S. House of
Representatives.
(2) Director/Trustee of the AIM Funds.
Carl Frischling (60)** (1) Partner, Kramer, Levin, Naftalis &
Frankel (law firm). Formerly, Partner, Reid &
Priest (law firm); and prior thereto, Partner,
Spengler Carlson Gubar Brodsky & Frischling
(law firm).
(2) Director of ERD Waste, Inc. (waste
management company), Aegis Consumer Finance
(auto leasing company) and Lazard Funds,Inc.
(investment companies).
(3) Director/Trustee of the AIM Funds.
Robert H. Graham (50)*** (1) Director, President and Chief Executive
Officer, A I M Management Group Inc.; Director
and President, A I M Advisors, Inc.; Director
and Senior Vice President, A I M Capital
Management, Inc., A I M Distributors, Inc.,
A I M Fund Services, Inc., A I M Institutional
Fund Services, Inc. and Fund Management
Company; and Director, AMVESCAP PLC.
(2) Director/Trustee of the AIM Funds.
John F. Kroeger (72) (1) Formerly, Consultant, Wendell & Stockel
Associates, Inc. (consulting firm).
(2) Director/Trustee of the AIM Funds; and
Director, Flag Investors International Fund,
Inc., Flag Investors Emerging Growth Fund,
Inc., Flag Investors Telephone Income Fund,
Inc., Flag Investors Equity Partners Fund,
Inc., Total Return U.S. Treasury Fund, Inc.,
Flag Investors Intermediate Term Income Fund,
Inc., Managed Municipal Fund, Inc., Flag
Investors Value Builder Fund, Inc., Flag
Investors Maryland Intermediate Tax-Free
Income Fund, Inc., Flag Investors Real Estate
Securities Fund, Inc., Alex Brown Cash Reserve
Fund, Inc. and North American Government Bond
Fund, Inc. (investment companies).
Lewis F. Pennock (54) (1) Attorney in private practice in Houston,
Texas.
(2) Director/Trustee of the AIM Funds.
Ian W. Robinson (74) (1) Formerly, Executive Vice President and
Chief Financial Officer, Bell Atlantic
Management Services, Inc. (provider of
centralized management services to telephone
companies); Executive Vice President, Bell
Atlantic Corporation (parent of seven
telephone companies); and Vice President and
Chief Financial Officer, Bell Telephone
Company of Pennsylvania and Diamond State
Telephone Company.
(2) Director/Trustee of the AIM Funds.
Louis S. Sklar (57) (1) Executive Vice President, Development and
Operations, Hines Interests Limited
Partnership (real estate development).
(2) Director/Trustee of the AIM Funds.
- ---------------
* Mr. Bauer would be an "interested person" of the Company, as defined in
the 1940 Act, primarily because of his positions with AIM, and its
affiliated companies, as set forth above, and through his ownership of
stock of AMVESCAP PLC.
** Mr. Frischling would be an "interested person" of the Company, as defined
in the 1940 Act, primarily because of payments received by his law firm
for services to the AIM Funds.
*** Mr. Graham would be an "interested person" of the Company, as defined in
the 1940 Act, primarily because of his position with AIM and its
affiliated companies, as set forth above, and through his ownership of
stock of AMVESCAP PLC.
The Company does not hold regular annual meetings at which Directors are
elected.
Information concerning the current Directors and executive officers of the
Company is contained in Annex F.
If the nominees are elected, it is anticipated that the Company's Board
would have three standing committees: an audit committee, an investments
committee and a nominating and compensation committee. The audit committee would
have responsibility for meeting with the Company's auditors to review audit
procedures and results and to consider any matters arising from an audit to be
brought to the attention of the Board, and for considering such other matters as
the Board might determine. The investments committee would be responsible for
reviewing the Portfolios' compliance with applicable investment policies and
restrictions, brokerage allocation, portfolio investment pricing issues, interim
dividend and distribution issues, and any other matters determined by the Board.
The nominating and compensation committee would be responsible for considering
and nominating individuals to stand for election as Directors (including names
submitted by shareholders for consideration), reviewing policies for
compensating the Directors who are not "interested persons" of the Company, as
defined by the 1940 Act, and for considering such other matters as the Board may
determine.
Compensation of Nominees
Each Nominee for Director is reimbursed for expenses incurred in attending
each meeting of the Board of Directors or Trustees of the AIM Funds or any
committee thereof. Each Nominee who is not also an officer of AIM or an AIM
affiliate is compensated for his services according to a fee schedule which
recognizes the fact that such Nominee also serves as a Director or Trustee of
other AIM Funds. Each such Nominee receives a fee, allocated among the AIM
Funds, which consists of an annual retainer component and a meeting fee
component. It is anticipated that similar compensation arrangements will apply
to the Nominees if they are elected as Directors of the Company.
Set forth below is information regarding compensation paid, accrued or
estimated for the calendar year ending December 31, 1996 for each Nominee:
Estimated Retirement Total
Compensation Benefits Compensation
From Accrued From All AIM
Trustee The Company By All AIM Funds(2)
(1) Funds
Charles T. Bauer.......... $ -0- $ -0- $ -0-
Bruce L. Crockett......... 7,832 38,621 68,000
Owen Daly II.............. 7,832 82,607 68,000
Jack Fields (3)........... 7,832 -0- -0-
Carl Frischling........... 7,832 56,683 68,000
Robert H. Graham.......... -0- -0- -0-
John F. Kroeger........... 7,832 83,654 66,000
Lewis F. Pennock.......... 7,832 33,702 67,000
Ian W. Robinson........... 7,832 64,973 68,000
Louis S. Sklar............ 7,832 47,593 66,500
----------
(1) Figures estimate what would have been paid for the calendar year ended
December 31, 1996 based on rates applicable for that year modified to
reflect changes in director compensation for the AIM Funds approved in
March 1997.
(2) Each Nominee serves as a director or trustee of the ten registered
investment companies advised by AIM (comprised of 38 portfolios). Data
reflect total compensation earned during the calendar year ended
December 31, 1996. Does not include accrued retirement benefits or
earnings on deferred compensation.
(3) Mr. Fields commenced serving as a director/trustee of the AIM Funds on
March 11, 1997.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Retirement Plan"), each Nominee who is an "Eligible
Director/Trustee" (as defined in the Retirement Plan) may be entitled to certain
benefits upon retirement from the boards of the AIM Funds. Pursuant to the
Retirement Plan, the normal retirement date is the date on which the Eligible
Director/Trustee has attained age 65 and has completed at least five years of
continuous service with one or more of the AIM Funds. Each Eligible
Director/Trustee is entitled to receive an annual benefit from the AIM Funds
commencing on the first day of the calendar quarter coincident with or following
his date of retirement equal to 75% of the retainer paid or accrued by the AIM
Funds for such Eligible Director/Trustee during the twelve-month period
immediately preceding the Eligible Director's/Trustee's retirement (including
amounts deferred under a separate agreement between the AIM Funds and the
Eligible Director/Trustee) for the number of such Eligible Director's/Trustee's
years of service (not in excess of ten years of service) completed with respect
to any of the AIM Funds. If an Eligible Director/Trustee dies (a) before the
normal retirement date, no benefits are payable; (b) after attaining the normal
retirement date but before receipt of any benefits under the Retirement Plan
commences, the Eligible Director's/Trustee's surviving spouse (if any) shall
receive a quarterly survivor's benefit equal to 50% of the amount payable to the
deceased Eligible Director/Trustee for no more than ten years beginning the
first day of the calendar quarter following the date of the Eligible
Director's/Trustee's death. Payments under the Retirement Plan are not secured
or funded by any AIM Fund.
Set forth below is a table that shows the estimated annual benefits payable
to an Eligible Director/Trustee upon retirement assuming various final annual
compensation and years of service classifications. The estimated credited years
of service for Messrs. Crockett, Daly, Frischling, Kroeger, Pennock, Robinson
and Sklar are 9, 10, 19, 19, 15, 9 and 7, respectively, although, as noted
above, the benefits payable are based upon no more than ten years of service.
ESTIMATED BENEFITS UPON RETIREMENT
Number of Years of
Service With the AIM Funds Annual Retainer Paid by All
AIM Funds
$80,000 $86,500 $89,500
------- ------- -------
10......................$60,000 $64,875 $67,125
9......................54,000 58,388 60,413
8......................48,000 51,900 53,700
7......................42,000 45,413 46,988
6......................36,000 38,925 40,275
5......................30,000 32,438 33,563
Deferred Compensation Agreements
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of
this paragraph only, the "Deferring Directors/Trustees") have each executed a
Deferred Compensation Agreement (collectively, the "DC Agreements"). Pursuant to
the DC Agreements, the Deferring Directors/Trustees may elect to defer receipt
of up to 100% of their compensation payable by the AIM Funds, and such amounts
are placed into a deferral account. Currently, the Deferring Directors/Trustees
may select various AIM Funds in which all or part of their deferral accounts
shall be deemed to be invested. Distributions from the Deferring
Directors'/Trustees' deferral accounts will be paid in cash generally in equal
quarterly installments over a period of five or ten years (depending on the DC
Agreement) beginning on the date the Deferring Director's/Trustee's retirement
benefits commence under the Retirement Plan. The boards of the AIM Funds, in
their sole discretion, may accelerate or extend the distribution of such
deferral accounts after a Deferring Director's/Trustee's termination of service
as a Trustee or Director. If a Deferring Director/Trustee dies prior to the
distribution of amounts in his deferral account, the balance of the deferral
account will be distributed to his designated beneficiary in a single lump sum
payment as soon as practicable after such Deferring Director's/Trustee's death.
The DC Agreements are not funded and, with respect to the payments of amounts
held in the deferral accounts, the Deferring Directors/Trustees have the status
of unsecured creditors of the AIM Funds from which they are deferring
compensation.
OTHER BUSINESS
The management of the Company has no business to bring before the Meeting
other than the matters described above. Should any other business be presented
at the Meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
SHAREHOLDER PROPOSALS
The Company does not hold annual meetings of shareholders. Shareholders
wishing to submit proposals for inclusion in a proxy statement and form of proxy
for a subsequent shareholders' meeting should send their written proposals to
the Secretary of the Company, 1355 Peachtree Street, N.E., Suite 200, Atlanta,
Georgia 30309. The Company has not received any shareholder proposals to be
presented at this Meeting.
...... By Order of the Board of Directors,
...... Tony D. Green
...... Secretary
May , 1997
<PAGE>
ANNEX A
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, as made the ____ day of __________, 199_, by and between A I
M Advisors, Inc. (the "Adviser"), a Delaware corporation, and AIM Advisor Funds,
Inc., a Maryland corporation (the "Fund").
W I T N E S S E T H :
WHEREAS, the Fund is a corporation organized under the laws of the State
of Maryland; and
WHEREAS, the Fund is registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), as a diversified, open-end management
investment company and is currently divided into seven series (the "Shares"),
and which may be divided into additional series, each representing an interest
in a separate portfolio of investments (such series as are presently structured
being designated as the AIM Advisor Large Cap Value Fund, AIM Advisor Income
Fund, AIM Advisor Flex Fund, AIM Advisor MultiFlex Fund, AIM Advisor Real Estate
Fund, AIM Advisor International Value Fund, and AIM Advisor Cash Management
Fund. Such series, together with any future series, are hereinafter referred to
as the "Series"); and
WHEREAS, the Fund desires that the Adviser manage its investment operations
and provide it with certain other services, and the Adviser desires to manage
said operations and to provide such other services;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Investment Management Services. The Adviser hereby agrees to manage the
investment operations of the Fund's Series, subject to the terms of this
Agreement and to the supervision of the Fund's directors (the "Directors"). The
Adviser agrees to perform, or arrange for the performance of, the following
specific services for the Fund:
(a)to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund's Series, and to execute all purchases and
sales of portfolio securities;
(b) to maintain a continuous investment program for the Fund's Series,
consistent with (i) the Series' investment policies as set forth in the
Fund's Articles of Incorporation, Bylaws, and Registration Statement, as from
time to time amended, under the Investment Company Act of 1940, as amended
(hereinafter referred to as the "Investment Company Act"), and in any
Prospectus and/or Statement of Additional Information of the Fund, as from
time to time amended and in use under the Securities Act of 1933, as amended,
and (ii) the Fund's status as a regulated investment company under the
Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the Fund's
Series, unless otherwise directed by the Directors of the Fund, and to
execute transactions accordingly;
(d) to provide to the Fund's Series the benefit of all of the investment
analyses and research, the reviews of current economic conditions and of
trends, and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of the
Adviser;
(e) to determine what portion of the Fund's Series should be invested in
the various types of securities authorized for purchase by the Fund; and
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Fund action and any other rights pertaining to the Series'
securities shall be exercised.
With respect to execution of transactions for the Fund's Series, the Adviser
is authorized to employ such brokers or dealers as may, in the Adviser's best
judgment, implement the policy of the Fund to obtain prompt and reliable
execution at the most favorable price obtainable. In assigning an execution or
negotiating the commission to be paid therefor, the Adviser is authorized to
consider the full range and quality of a broker's services which benefit the
Fund, including but not limited to research and analytical capabilities,
reliability of performance, sale of Fund shares, and financial soundness and
responsibility. Research services prepared and furnished by brokers through
which the Adviser effects securities transactions on behalf of the Fund may be
used by the Adviser in servicing all of its accounts, and not all such services
may be used by the Adviser in connection with the Fund. In the selection of a
broker or dealer for execution of any negotiated transaction, the Adviser shall
have no duty or obligation to seek advance competitive bidding for the most
favorable negotiated commission rate for such transaction; or to select any
broker solely on the basis of its purported or "posted" commission rate for such
transaction, provided, however, that the Adviser shall consider such "posted"
commission rates, if any, together with any other information available at the
time as to the level of commissions known to be charged on comparable
transactions by other qualified brokerage firms, as well as all other relevant
factors and circumstances, including the size of any contemporaneous market in
such securities, the importance to the Fund of speed, efficiency, and
confidentiality of execution, the execution capabilities required by the
circumstances of the particular transactions, and the apparent knowledge or
familiarity with sources from or to whom such securities may be purchased or
sold. Where the commission rate reflects services, reliability and other
relevant factors in addition to the cost of execution, the Adviser shall have
the burden of demonstrating that such expenditures were bona fide and for the
benefit of the Fund. Fund transactions may be effected through qualified
broker-dealers who recommend the Fund to their clients, or who act as agent in
the purchase of the Fund's shares for their clients. When a number of brokers
and dealers can provide comparable best price and execution on a particular
transaction, the Adviser may consider the sale of Fund shares by a broker or
dealer in selecting among qualified broker-dealers.
2. Other Services and Facilities. The Adviser shall, in addition, supply at
its own expense all supervisory and administrative services and facilities
necessary in connection with the day-to-day operations of the Fund's Series
(except those associated with the preparation and maintenance of certain
required books and records and certain sub-accounting services, which services
and facilities are provided under separate Accounting Services, Transfer Agency
and Administrative Services Agreements between the Adviser and A I M Fund
Services, Inc., and those operational services which are necessary for the
day-to-day operations of the Fund's Series, which services are provided under a
separate Operating Services Agreement dated August 1, 1997, between the Fund and
the Adviser (the "Operating Services Agreement"). These services shall include,
but not be limited to: supplying the Fund with officers, clerical staff and
other employees, if any, who are necessary in connection with the Fund's
operations; furnishing office space, facilities, equipment, and supplies;
conducting periodic compliance reviews of the Fund's operations; preparation and
review of certain required documents, reports and filings (including required
reports to the Securities and Exchange Commission (the "SEC"), and other
corporate documents of the Fund), except insofar as the assistance of
independent accountants or attorneys is necessary or desirable; supplying basic
telephone service and other utilities; and preparing and maintaining the books
and records required to be prepared and maintained by the Fund pursuant to Rule
31a-1(b)(4), (5), (9), and (10) under the Investment Company Act. All books and
records prepared and maintained by the Adviser for the Fund under this Agreement
shall be the property of the Fund and, upon request therefor, the Adviser shall
surrender to the Fund such of the books and records so requested.
3. Payment of Costs and Expenses. The Adviser shall bear the costs and
expenses of all personnel, facilities, equipment and supplies reasonably
necessary to provide the services required to be provided by the Adviser under
this Agreement. The Adviser shall pay all of the costs and expenses associated
with the Fund's operations and activities, except those expressly assumed by the
Fund under this Agreement, which shall consist of:
(a) all brokers' commissions, issue and transfer taxes, and other costs
chargeable to the Fund in connection with securities transactions to which
the Fund is a party or in connection with securities owned by the Fund's
Series;
(b) the interest on indebtedness, if any, incurred by the Fund;
(c) extraordinary expenses, including unexpected franchise or income taxes,
or business license and other corporate fees (not including SEC and state
securities registration fees) that are not anticipated which the Fund will be
required to pay to federal, state, county, city, or other governmental
agents, and fees and disbursements of Fund counsel in connection with
litigation by or against the Fund;
(d) the expenses of distributing shares of the Fund but only if and to the
extent permissible under a plan of distribution adopted by the Fund pursuant
to Rule 12b-1 under the Investment Company Act; and
(e) all fees paid by the Fund for operational services which are necessary
for the day-to-day operations of the Fund's Series under the Operating
Services Agreement.
4. Use of Affiliated Companies. In connection with the rendering of the
services required to be provided by the Adviser under this Agreement, the
Adviser may, to the extent it deems appropriate and subject to compliance with
the requirements of applicable laws and regulations, and upon receipt of written
approval of the Fund, make use of its affiliated companies and their employees;
provided that the Adviser shall supervise and remain fully responsible for all
such services in accordance with and to the extent provided by this Agreement,
and further provided that all costs and expenses associated with the providing
of services by any such companies or employees and required by this Agreement to
be borne by the Adviser shall be borne by the Adviser or its affiliated
companies.
5. Compensation of the Adviser. For the services to be rendered and the
charges and expenses to be assumed by the Adviser hereunder, the Fund shall pay
to the Adviser an advisory fee which will be computed daily and paid as of the
last day of each month, using for each daily calculation the most recently
determined net asset value of each of the Fund's Series, as determined by
valuations made in accordance with the Fund's procedures for calculating its net
asset value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Adviser shall be computed at the annual
rates indicated in Schedule A hereto. During any period when the determination
of the Fund's net asset value is suspended by the Directors of the Fund, the net
asset value of a share of the Fund as of the last business day prior to such
suspension shall, for the purpose of this Paragraph 5, be deemed to be the net
asset value at the close of each succeeding business day until it is again
determined.
No advisory fee shall be paid to the Adviser with respect to any assets of
the Fund's Series which may be invested in any other investment company for
which the Adviser serves as investment adviser or sub-adviser. The fee provided
for hereunder shall be prorated in any month in which this Agreement is not in
effect for the entire month. If, in any given year, the sum of a Series'
expenses exceeds the state-imposed annual expense limitation, if any to which
the Fund is subject, the Adviser will be required to reimburse that Series for
such excess expenses promptly. Interest, taxes and extraordinary items such as
litigation costs are not deemed expenses for purposes of this paragraph and
shall be borne by that Series in any event. Expenditures, including costs
incurred in connection with the purchase or sale of portfolio securities, which
are capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and shall
not be deemed to be expenses for purposes of this paragraph.
6. Avoidance of Inconsistent Positions and Compliance with Laws. In
connection with purchases or sales of securities for the investment portfolios
of the Fund's Series, neither the Adviser nor its officers or employees will
either act as a principal or agent for any party other than the Fund's Series or
receive any commissions. The Adviser will comply with all applicable laws in
acting hereunder including, without limitation, the Investment Company Act; the
Investment Advisers Act of 1940, as amended; and all rules and regulations duly
promulgated under the foregoing.
7. Duration and Termination. With respect to each of the Fund's Series, this
Agreement is subject to approval by a majority of the outstanding voting
securities of that Series, and shall become effective as of the date so written
above with respect to each Series for which such approval has been obtained, and
unless sooner terminated as hereinafter provided, shall remain in force with
respect to each such Series for an initial term ending two years from the date
of execution, and from year to year thereafter, but only as long as such
continuance is specifically approved at least annually (i) by a vote of a
majority of the outstanding voting securities of such Series or by the Directors
of the Fund, and (ii) by a majority of the Directors of the Fund who are not
interested persons of the Adviser or the Fund by votes cast in person at a
meeting called for the purpose of voting on such approval.
This Agreement may, on 60 days' prior written notice, be terminated as to the
Fund or as to any one or more of the Series without the payment of any penalty,
by the Directors of the Fund, or by the vote of a majority of the outstanding
voting securities of the Fund's Series, as the case may be, or by the Adviser.
This Agreement shall immediately terminate in the event of its assignment,
unless an order is issued by the SEC conditionally or unconditionally exempting
such assignment from the provisions of Section 15(a) of the Investment Company
Act, in which event this Agreement shall remain in full force and effect subject
to the terms and provisions of said order. In interpreting the provisions of
this paragraph 7, the definitions contained in Section 2(a) of the Investment
Company Act and the applicable rules under the Investment Company Act
(particularly the definitions of "interested person," "assignment" and "vote of
a majority of the outstanding voting securities") shall be applied.
The Adviser agrees to furnish to the Directors of the Fund such information
on an annual basis as may reasonably be necessary to evaluate the terms of this
Agreement.
Termination of this Agreement shall not affect the right of the Adviser to
receive payments on any unpaid balance of the compensation described in
paragraph 5 earned prior to such termination.
8. Non-Exclusive Services. The Adviser shall, during the term of this
Agreement, be entitled to render investment advisory services to others,
including, without limitation, other investment companies with similar
objectives to those of the Fund's Series. The Adviser may, when it deems such to
be advisable, aggregate orders for its other customers together with any
securities of the same type to be sold or purchased for the Fund's Series in
order to obtain best execution and lower brokerage commissions. In such event,
the Adviser shall allocate the shares so purchased or sold, as well as the
expenses incurred in the transaction, in the manner it considers to be most
equitable and consistent with its fiduciary obligations to the Fund's Series and
the Adviser's other customers. It is understood that directors, officers,
employees and shareholders of the Fund are or may become interested in the
Adviser and its affiliates, as directors, officers, employees and shareholders
or otherwise and that directors, officers, employees and shareholders of the
Adviser, and its affiliates are or may become interested in the Fund as
directors, officers and employees.
<PAGE>
9. Miscellaneous Provisions.
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Amendments Hereof. No provision of this Agreement may be orally changed or
discharged, but may only be modified by an instrument in writing signed by the
Fund and the Adviser. In addition, no amendment to this Agreement shall be
effective unless approved by (1) the vote of a majority of the Directors of the
Fund, including a majority of the Directors who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such amendment, and (2) the vote of a
majority of the outstanding voting securities of any of the Fund's Series as to
which such amendment is applicable (other than an amendment which can be
effective without shareholder approval under applicable law).
Severability. Each provision of this Agreement is intended to be severable.
If any provision of this Agreement shall be held illegal or made invalid by a
court decision, statute, rule or otherwise, such illegality or invalidity shall
not affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
Applicable Law. This Agreement shall be construed in accordance with the laws
of the State of Texas. To the extent that the applicable laws of the State of
Texas, or any of the provisions herein, conflict with applicable provisions of
the Investment Company Act, the latter shall control.
10. License Agreement. The Fund shall have the non-exclusive right to use
the name "AIM" to designate any current or future series of shares only so long
as A I M Advisors, Inc. serves as investment manager or advisor to the Fund with
respect to such series of shares.
IN WITNESS WHEREOF, the Adviser and the Fund each has caused this Agreement
to be duly executed on its behalf by an officer thereunto duly authorized, on
the date first above written.
AIM ADVISOR FUNDS, INC.
By:
President
ATTEST:
Secretary
A I M ADVISORS, INC.
By:
President
ATTEST:
Secretary
<PAGE>
SCHEDULE A
TO
INVESTMENT ADVISORY AGREEMENT
OF AIM ADVISOR FUNDS, INC.
Pursuant to Clause 5 of the Investment Advisory Agreement, fees payable
thereunder to the Adviser shall be calculated by applying the following annual
rates to the average daily net assets of each Series:
Series Annual Fee Rate
AIM Advisor Large Cap Fund 0.75%
AIM Advisor Flex Fund 0.75%
AIM Advisor Real Estate Fund 0.90%
AIM Advisor MultiFlex Fund 1.00%
AIM Advisor International Value Fund 1.00%
AIM Advisor Income Fund 0.65%
AIM Advisor Cash Management Fund 0.50%
<PAGE>
ANNEX B
SUB-ADVISORY AGREEMENT
AGREEMENT made this ____ day of __________, 199_, by and between A I M
Advisors, Inc. ("AIM"), a Delaware corporation, and INVESCO Capital Management,
Inc., a Delaware corporation (the "Sub-Adviser").
WITNESSETH:
WHEREAS, AIM Advisor Funds, Inc. (the "Fund"), is engaged in business as a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act") which is divided into various series (the "Shares"),
and which may be divided into additional series, each representing an interest
in a separate portfolio of investments; and
WHEREAS, AIM and the Sub-Adviser are engaged principally in rendering
investment advisory services and are registered as investment advisers under the
Investment Advisers Act of 1940; and
WHEREAS, AIM has entered into an Investment Advisory Agreement with the Fund
(the "AIM Investment Advisory Agreement"), pursuant to which AIM is required to
provide investment and advisory services to the Fund's series, and, upon receipt
of written approval of the Fund, is authorized to retain companies which are
affiliated with AIM to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory services
to three of the Fund's seven series (the AIM Advisor Large Cap Value Fund, the
AIM Advisor Income Fund, and the AIM Advisor Flex Fund series, hereinafter
referred to as the "Series"), on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, AIM and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
AIM hereby employs the Sub-Adviser to act as investment adviser to the Series
and to furnish the investment advisory services described below, subject to the
broad supervision of AIM and the Board of Directors of the Fund, for the period
and on the terms and conditions set forth in this Agreement. The Sub-Adviser
hereby accepts such assignment and agrees during such period, at its own
expense, to render such services and to assume the obligations herein set forth
for the compensation provided for herein. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and, unless otherwise expressly
provided or authorized herein, shall have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the Fund. The Sub-Adviser
hereby agrees to manage the investment operations of the Fund's Series, subject
to the supervision of the Fund's directors (the "Directors") and AIM.
Specifically, the Sub-Adviser agrees to perform the following services:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund's Series, and to execute all purchases and
sales of portfolios securities;
(b) to maintain a continuous investment program for the Fund's Series,
consistent with (i) the Series' investment policies as set forth in the
Fund's Articles of Incorporation, Bylaws, and Registration Statement, as from
time to time amended, under the Investment Company Act of 1940, and in any
Prospectus and/or Statement of Additional Information of the Fund, as from
time to time amended and in use under the Securities Act of 1933, as amended,
and (ii) the Fund's status as a regulated investment company under the
Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the Fund's
Series, unless otherwise directed by the Directors of the Fund or AIM, and to
execute transactions accordingly;
(d) to provide to the Fund's Series the benefit of all of the investment
analysis and research, the reviews of current economic conditions and of
trends, and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of the
Sub-Adviser;
(e) to determine what portion of the Fund's Series should be invested in
the various types of securities authorized for purchase by the Series; and
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Fund action and any other rights pertaining to the Series'
securities shall be exercised.
With respect to execution of transactions for the Fund's Series, the
Sub-Adviser is authorized to employ such brokers or dealers as may, in the
Sub-Adviser's best judgment, implement the policy of the Fund to obtain prompt
and reliable execution at the most favorable price obtainable. In assigning an
execution or negotiating the commission to be paid therefor, the Sub-Adviser is
authorized to consider the full range and quality of a broker's services which
benefit the Fund, including but not limited to research and analytical
capabilities, reliability of performance, sale of Fund shares, and financial
soundness and responsibility. Research services prepared and furnished by
brokers through which the Sub-Adviser effects securities transactions on behalf
of the Fund may be used by the Sub-Adviser in servicing all of its accounts, and
not all such services may be used by the Sub-Adviser in connection with the
Fund. In the selection of a broker or dealer for execution of any negotiated
transaction, the Sub-Adviser shall have no duty or obligation to seek advance
competitive bidding for the most favorable negotiated commission rate for such
transaction, or to select any broker solely on the basis of its purported or
"posted" commission rate for such transaction, provided, however, that the
Sub-Adviser shall consider such "posted" commission rates, if any, together with
any other information available at the time as to the level of commissions known
to be charged on comparable transactions by other qualified brokerage firms, as
well as all other relevant factors and circumstances, including the size of any
contemporaneous market in such securities, the importance to the Fund of speed,
efficiency, and confidentiality of execution, the execution capabilities
required by the circumstances of the particular transactions, and the apparent
knowledge or familiarity with sources from or to whom such securities may be
purchased or sold. Where the commission rate reflects services, reliability and
other relevant factors in addition to the cost of execution, the Sub-Adviser
shall have the burden of demonstrating that such expenditures were bona fide and
for the benefit of the Fund. Fund transactions may be effected through qualified
broker-dealers who recommend the Fund to their clients, or who act as agent in
the purchase of the Fund's shares for their clients. When a number of brokers
and dealers can provide comparable best price and execution on a particular
transaction, the Sub-Adviser may consider the sale of Fund shares by a broker or
dealer in selecting among qualified broker-dealers.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and personnel
necessary to perform its obligations under this Agreement, and shall, at its own
expense, provide the office space, equipment and facilities necessary to perform
its obligations under this Agreement. Except to the extent expressly assumed by
the Sub-Adviser herein and except to the extent required by law to be paid by
the Sub-Adviser, AIM and/or the Fund shall pay all costs and expenses in
connection with the operations of the Fund's Series.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, the facilities furnished and expenses assumed by
the Sub-Adviser, AIM shall pay to the Sub-Adviser a fee, computed daily and paid
as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Fund's Series, as determined by a
valuation made in accordance with the Fund's procedures for calculating its net
asset value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the annual
rates indicated in Schedule A hereto. During any period when the determination
of the Series' net asset value is suspended by the Directors of the Fund, the
net asset value of a share of the Fund's Series as of the last business day
prior to such suspension shall, for the purpose of this Article III, be deemed
to be the net asset value at the close of each succeeding business day until it
is again determined. However, no such fee shall be paid to the Sub-Adviser with
respect to any assets of the Fund's Series which may be invested in any other
investment company for which the Sub-Adviser serves as investment adviser or sub
adviser. The fee provided for hereunder shall be prorated in any month in which
this Agreement is not in effect for the entire month. The Sub-Adviser shall be
entitled to receive fees hereunder only for such periods as the AIM Investment
Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Series are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, AIM and their affiliates are or may become
interested in the Fund as directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND
COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Fund's Series, neither the Sub-Adviser nor any of its
directors, officers or employees will either act as a principal or agent for any
party other than the Fund's Series or receive any commissions. The Sub-Adviser
will comply with all applicable laws in acting hereunder including, without
limitation, the Investment Company Act; the Investment Advisers Act of 1940, as
amended; and all rules and regulations duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
With respect to each Series, this Agreement is subject to approval by a
majority of the outstanding voting securities of that Series, and shall become
effective as of the date so written above with respect to each Series for which
approval has been obtained, and shall remain in force for an initial term of two
years from the date of execution, and from year to year thereafter until its
termination in accordance with this Article VI, but only so long as such
continuance is specifically approved at least annually by (i) the Directors of
the Fund, or by the vote of a majority of the outstanding voting securities of
the Fund's Series, and (ii) a majority of those Directors who are not parties to
this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.
This Agreement may be terminated as to any services at any time, without the
payment of any penalty, by AIM, by the Fund by vote of the Directors of the Fund
or by vote of a majority of the outstanding voting securities of the Fund's
Series, or by the Sub-Adviser. A termination by AIM or the Sub-Adviser shall
require sixty days' written notice to the other party and to the Fund, and a
termination by the Fund shall require such notice to each of the parties. This
Agreement shall automatically terminate in the event of its assignment to the
extent required by the Investment Company Act and the rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Fund such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the Sub-Adviser
to receive payments on any unpaid balance of the compensation described in
Article III hereof earned prior to such termination.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but may
only be modified by an instrument in writing signed by the Sub-Adviser and AIM.
In addition, no amendment to this Agreement shall be effective unless approved
by (1) the vote of a majority of the Directors of the Fund, including a majority
of the Directors who are not parties to this Agreement or interested persons of
any such party, cast in person at a meeting called for the purpose of voting on
such amendment, and (2) the vote of a majority of the outstanding voting
securities of any of the Fund's Series as to which such amendment is applicable
(other than an amendment which can be effective without shareholder approval
under applicable law).
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the rules and
regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Texas and the applicable provisions of the Investment Company Act. To the extent
that the applicable laws of the State of Texas, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.
<PAGE>
ARTICLE X
MISCELLANEOUS
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be severable.
If any provision of this Agreement shall be held illegal or made invalid by a
court decision, statute, rule or otherwise, such illegality or invalidity shall
not affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
A I M ADVISORS, INC.
By:
President
ATTEST:
Secretary
INVESCO CAPITAL MANAGEMENT, INC.
By:
President
ATTEST:
Secretary
<PAGE>
SCHEDULE A
TO
ICM SUB-ADVISORY AGREEMENT
Pursuant to Article III of the Sub-Advisory Agreement between A I M
Advisors, Inc. and INVESCO Capital Management, Inc. ("ICM"), fees payable
thereunder to ICM shall be calculated by applying the following annual rates to
the average daily net assets of the indicated Series:
Series Annual Fee Rate
AIM Advisor Large Cap Value Fund 0.20%
AIM Advisor Flex Fund 0.20%
AIM Advisor Income Fund 0.10%
<PAGE>
ANNEX C
SUB-ADVISORY AGREEMENT
AGREEMENT made this ____ day of __________, 199_, by and between A I M
Advisors, Inc. ("AIM"), a Delaware corporation, and INVESCO Management &
Research, Inc., a Massachusetts corporation (the "Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO ADVISOR FUNDS, INC. (the "Fund") is engaged in business as a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act") which is divided into various series (the "Shares"),
and which may be divided into additional series, each representing an interest
in a separate portfolio of investments; and
WHEREAS, AIM and the Sub-Adviser are engaged principally in rendering
investment advisory services and are registered as investment advisers under the
Investment Advisers Act of 1940; and
WHEREAS, AIM has entered into an Investment Advisory Agreement with the Fund
(the "AIM Investment Advisory Agreement"), pursuant to which AIM is required to
provide investment and advisory services to the Fund's series, and, upon receipt
of written approval of the Fund, is authorized to retain companies which are
affiliated with AIM to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory services
to one of the Fund's series (the AIM Advisor MultiFlex Fund, hereinafter
referred to as the "Series") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, AIM and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
AIM hereby employs the Sub-Adviser to act as investment adviser to the Series
and to furnish the investment advisory services described below, subject to the
broad supervision of AIM and the Board of Directors of the Fund, for the period
and on the terms and conditions set forth in this Agreement. The Sub-Adviser
hereby accepts such assignment and agrees during such period, at its own
expense, to render such services and to assume the obligations herein set forth
for the compensation provided for herein. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and, unless otherwise expressly
provided or authorized herein, shall have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the Fund.
The Sub-Adviser hereby agrees to manage the investment operations of the
Fund's Series, subject to the supervision of the Fund's directors (the
"Directors") and AIM. Specifically, the Sub-Adviser agrees to perform the
following services:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund's Series, and to execute all purchases and
sales of portfolios securities;
(b) to maintain a continuous investment program for the Fund's Series,
consistent with (i) the Series' investment policies as set forth in the
Fund's Articles of Incorporation, Bylaws, and Registration Statement, as from
time to time amended, under the Investment Company Act of 1940, and in any
prospectus and/or statement of additional information of the Fund, as from
time to time amended and in use under the Securities Act of 1933, as amended,
and (ii) the Fund's status as a regulated investment company under the
Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the Fund's
Series, unless otherwise directed by the Directors of the Fund or AIM, and to
execute transactions accordingly;
(d) to provide to the Fund's Series the benefit of all of the investment
analysis and research, the reviews of current economic conditions and of
trends, and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of the
Sub-Adviser;
(e) to determine what portion of the Fund's Series should be invested in
the various types of securities authorized for purchase by the Series; and
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Fund action and any other rights pertaining to the Series'
securities shall be exercised.
With respect to execution of transactions for the Fund's Series, the
Sub-Adviser is authorized to employ such brokers or dealers as may, in the
Sub-Adviser's best judgment, implement the policy of the Fund to obtain prompt
and reliable execution at the most favorable price obtainable. In assigning an
execution or negotiating the commission to be paid therefor, the Sub-Adviser is
authorized to consider the full range and quality of a broker's services which
benefit the Fund, including but not limited to research and analytical
capabilities, reliability of performance, sale of Fund shares, and financial
soundness and responsibility. Research services prepared and furnished by
brokers through which the Sub-Adviser effects securities transactions on behalf
of the Fund may be used by the Sub-Adviser in servicing all of its accounts, and
not all such services may be used by the Sub-Adviser in connection with the
Fund. In the selection of a broker or dealer for execution of any negotiated
transaction, the Sub-Adviser shall have no duty or obligation to seek advance
competitive bidding for the most favorable negotiated commission rate for such
transaction, or to select any broker solely on the basis of its purported or
"posted" commission rate for such transaction, provided, however, that the
Sub-Adviser shall consider such "posted" commission rates, if any, together with
any other information available at the time as to the level of commissions known
to be charged on comparable transactions by other qualified brokerage firms, as
well as all other relevant factors and circumstances, including the size of any
contemporaneous market in such securities, the importance to the Fund of speed,
efficiency, and confidentiality of execution, the execution capabilities
required by the circumstances of the particular transactions, and the apparent
knowledge or familiarity with sources from or to whom such securities may be
purchased or sold. Where the commission rate reflects services, reliability and
other relevant factors in addition to the cost of execution, the Sub-Adviser
shall have the burden of demonstrating that such expenditures were bona fide and
for the benefit of the Fund. Fund transactions may be effected through qualified
broker-dealers who recommend the Fund to their clients, or who act as agent in
the purchase of the Fund's shares for their clients. When a number of brokers
and dealers can provide comparable best price and execution on a particular
transaction, the Fund's adviser may consider the sale of Fund shares by a broker
or dealer in selecting among qualified broker-dealers.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and personnel
necessary to perform its obligations under this Agreement, and shall, at its own
expense, provide the office space, equipment and facilities necessary to perform
its obligations under this Agreement. Except to the extent expressly assumed by
the Sub-Adviser herein and except to the extent required by law to be paid by
the Sub-Adviser, AIM and/or the Fund shall pay all costs and expenses in
connection with the operations of the Fund's Series.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, the facilities furnished and expenses assumed by
the Sub-Adviser, AIM shall pay to the Sub-Adviser a fee, computed daily and paid
as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Fund's Series, as determined by a
valuation made in accordance with the Fund's procedures for calculating its net
asset value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the annual
rate indicated in Schedule A hereto. During any period when the determination of
the Series' net asset value is suspended by the Directors of the Fund, the net
asset value of a share of the Fund's Series as of the last business day prior to
such suspension shall, for the purpose of this Article III, be deemed to be the
net asset value at the close of each succeeding business day until it is again
determined. However, no such fee shall be paid to the Sub-Adviser with respect
to any assets of the Fund's Series which may be invested in any other investment
company for which the Sub-Adviser serves as investment adviser or sub adviser.
The fee provided for hereunder shall be prorated in any month in which this
Agreement is not in effect for the entire month. The Sub-Adviser shall be
entitled to receive fees hereunder only for such periods as the AIM Investment
Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Series are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, AIM and their affiliates are or may become
interested in the Fund as directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS
AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Fund's Series, neither the Sub-Adviser nor any of its
directors, officers or employees will either act as a principal or agent for any
party other than the Fund's Series or receive any commissions. The Sub-Adviser
will comply with all applicable laws in acting hereunder including, without
limitation, the Investment Company Act; the Investment Advisers Act of 1940, as
amended; and all rules and regulations duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement having been approved by a majority of the outstanding voting
securities of the Series, shall become effective as of the date so written
above, and shall remain in force for an initial term of two years from the date
of execution, and from year to year thereafter until its termination in
accordance with this Article VI, but only so long as such continuance is
specifically approved at least annually by (i) the Directors of the Fund, or by
the vote of a majority of the outstanding voting securities of the Fund's
Series, and (ii) a majority of those Directors who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by AIM, the Fund by vote of the Directors of the Fund, or by vote of a
majority of the outstanding voting securities of the Fund's Series, or by the
Sub-Adviser. A termination by AIM or the Sub-Adviser shall require sixty days'
written notice to the other party and to the Fund, and a termination by the Fund
shall require such notice to each of the parties. This Agreement shall
automatically terminate in the event of its assignment to the extent required by
the Investment Company Act and the Rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Fund such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the Sub-Adviser
to receive payments on any unpaid balance of the compensation described in
Article III hereof earned prior to such termination.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but may
only be modified by an instrument in writing signed by the Sub-Adviser and AIM.
In addition, no amendment to this Agreement shall be effective unless approved
by (1) the vote of a majority of the Directors of the Fund, including a majority
of the Directors who are not parties to this Agreement or interested persons of
any such party cast in person at a meeting called for the purpose of voting on
such amendment and (2) the vote of a majority of the outstanding voting
securities of any of the Fund's Series as to which such amendment is applicable
(other than an amendment which can be effective without shareholder approval
under applicable law).
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Texas and the applicable provisions of the Investment Company Act. To the extent
that the applicable laws of the State of Texas, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.
<PAGE>
ARTICLE X
MISCELLANEOUS
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be severable.
If any provision of this Agreement shall be held illegal or made invalid by a
court decision, statute, rule or otherwise, such illegality or invalidity shall
not affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
A I M ADVISORS, INC.
By:
President
ATTEST:
Secretary
INVESCO MANAGEMENT & RESEARCH, INC.
By:
President
ATTEST:
Secretary
<PAGE>
SCHEDULE A
TO
IMR SUB-ADVISORY AGREEMENT
Pursuant to Article III of the Sub-Advisory Agreement between A I M
Advisors, Inc. and INVESCO Management & Research, Inc. ("IMR"), fees payable
thereunder to the IMR shall be calculated by applying the following annual rates
to the average daily net assets of the indicated Series:
Series Annual Fee Rate
AIM Advisor MultiFlex Fund 0.35% of assets to $500 million;
0.25% of assets in excess of
$500 million
<PAGE>
ANNEX D
SUB-ADVISORY AGREEMENT
AGREEMENT made this ____ day of __________, 199_, by and between A I M
Advisors, Inc. ("AIM"), a Delaware corporation, and INVESCO Realty Advisors,
Inc., a Texas corporation (the "Sub-Adviser").
W I T N E S S E T H:
WHEREAS, AIM Advisor Funds, Inc. (the "Fund") is engaged in business as a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act") which is divided into various series (the "Shares"),
and which may be divided into additional series, each representing an interest
in a separate portfolio of investments; and
WHEREAS, AIM and the Sub-Adviser are engaged principally in rendering
investment advisory services and are registered as investment advisers under the
Investment Advisers Act of 1940; and
WHEREAS, AIM has entered into an Investment Advisory Agreement with the Fund
(the "AIM Investment Advisory Agreement"), pursuant to which AIM is required to
provide investment and advisory services to the Fund's series, and, upon receipt
of written approval of the Fund, is authorized to retain companies which are
affiliated with AIM to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory services
to one of the Fund series, (the AIM Advisor Real Estate Fund, hereinafter
referred to as the "Series") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, AIM and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
AIM hereby employs the Sub-Adviser to act as investment adviser to the Series
and to furnish the investment advisory services described below, subject to the
broad supervision of AIM and the Board of Directors of the Fund, for the period
and on the terms and conditions set forth in this Agreement. The Sub-Adviser
hereby accepts such assignment and agrees during such period, at its own
expense, to render such services and to assume the obligations herein set forth
for the compensation provided for herein. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and, unless otherwise expressly
provided or authorized herein, shall have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the Fund.
The Sub-Adviser hereby agrees to manage the investment operations of the
Series, subject to the supervision of the Fund's directors (the "Directors") and
AIM. Specifically, the Sub-Adviser agrees to perform the following services:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Series, and to execute all purchases and sales
of portfolios securities;
(b) to maintain a continuous investment program for the Series, consistent
with (i) the Series' investment policies as set forth in the Fund's Articles
of Incorporation, Bylaws, and Registration Statement, as from time to time
amended, under the Investment Company Act of 1940, and in any Prospectus
and/or Statement of Additional Information of the Fund, as from time to time
amended and in use under the Securities Act of 1933, as amended, and (ii) the
Fund's status as a regulated investment company under the Internal Revenue
Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the
Series, unless otherwise directed by the Directors of the Fund or AIM, and to
execute transactions accordingly;
(d) to provide to the Series the benefit of all of the investment analysis
and research, the reviews of current economic conditions and of trends, and
the consideration of long-range investment policy now or hereafter generally
available to investment advisory customers of the Sub-Adviser;
(e) to determine what portion of the Series should be invested in the
various types of securities authorized for purchase by the Series; and
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Fund action and any other rights pertaining to the Series'
securities shall be exercised.
With respect to execution of transactions for the Series, the Sub-Adviser is
authorized to employ such brokers or dealers as may, in the Sub-Adviser's best
judgment, implement the policy of the Fund to obtain prompt and reliable
execution at the most favorable price obtainable. In assigning an execution or
negotiating the commission to be paid therefor, the Sub-Adviser is authorized to
consider the full range and quality of a broker's services which benefit the
Fund, including but not limited to research and analytical capabilities,
reliability of performance, sale of Fund shares, and financial soundness and
responsibility. Research services prepared and furnished by brokers through
which the Sub-Adviser effects securities transactions on behalf of the Series
may be used by the Sub-Adviser in servicing all of its accounts, and not all
such services may be used by the Sub-Adviser in connection with the Fund. In the
selection of a broker or dealer for execution of any negotiated transaction, the
Sub-Adviser shall have no duty or obligation to seek advance competitive bidding
for the most favorable negotiated commission rate for such transaction, or to
select any broker solely on the basis of its purported or "posted" commission
rate for such transaction, provided, however, that the Sub-Adviser shall
consider such "posted" commission rates, if any, together with any other
information available at the time as to the level of commissions known to be
charged on comparable transactions by other qualified brokerage firms, as well
as all other relevant factors and circumstances, including the size of any
contemporaneous market in such securities, the importance to the Fund of speed,
efficiency, and confidentiality of execution, the execution capabilities
required by the circumstances of the particular transactions, and the apparent
knowledge or familiarity with sources from or to whom such securities may be
purchased or sold. Where the commission rate reflects services, reliability and
other relevant factors in addition to the cost of execution, the Sub-Adviser
shall have the burden of demonstrating that such expenditures were bona fide and
for the benefit of the Fund. Transactions may be effected through qualified
broker-dealers who recommend the Fund to their clients, or who act as agent in
the purchase of the Fund's shares for their clients. When a number of brokers
and dealers can provide comparable best price and execution on a particular
transaction, the Sub-Adviser may consider the sale of Fund shares by a broker or
dealer in selecting among qualified broker-dealers.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and personnel
necessary to perform its obligations under this Agreement, and shall, at its own
expense, provide the office space, equipment and facilities necessary to perform
its obligations under this Agreement. Except to the extent expressly assumed by
the Sub-Adviser herein and except to the extent required by law to be paid by
the Sub-Adviser, AIM and/or the Fund shall pay all costs and expenses in
connection with the operations of the Series.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, the facilities furnished and expenses assumed by
the Sub-Adviser, AIM shall pay to the Sub-Adviser a fee, computed daily and paid
as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Series, as determined by a valuation
made in accordance with the Fund's procedures for calculating its net asset
value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the annual
rate indicated in Schedule A hereto. During any period when the determination of
the Series' net asset value is suspended by the Directors of the Fund, the net
asset value of a share of the Series as of the last business day prior to such
suspension shall, for the purpose of this Article III, be deemed to be the net
asset value at the close of each succeeding business day until it is again
determined. However, no such fee shall be paid to the Sub-Adviser with respect
to any assets of the Series which may be invested in any other investment
company for which the Sub-Adviser serves as investment adviser or sub-adviser.
The fee provided for hereunder shall be prorated in any month in which this
Agreement is not in effect for the entire month. The Sub-Adviser shall be
entitled to receive fees hereunder only for such periods as the AIM Investment
Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Series are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, AIM and their affiliates are or may become
interested in the Fund as directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS
AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Series, neither the Sub-Adviser nor any of its directors,
officers or employees will either act as a principal or agent for any party
other than the Series or receive any commissions. The Sub-Adviser will comply
with all applicable laws in acting hereunder including, without limitation, the
Investment Company Act; the Investment Advisers Act of 1940, as amended; and all
rules and regulations duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement having been approved by a majority of the outstanding voting
securities of the Series, shall become effective as of the date so written
above, and shall remain in force for an initial term of two years from the date
of execution, and from year to year thereafter until its termination in
accordance with this Article VI, but only so long as such continuance is
specifically approved at least annually by (i) the Directors of the Fund, or by
the vote of a majority of the outstanding voting securities of the Series, and
(ii) a majority of those Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.
This Agreement may be terminated as to any services at any time, without the
payment of any penalty, by AIM, by the Fund by vote of the Directors of the Fund
or by vote of a majority of the outstanding voting securities of the Series, or
by the Sub-Adviser. A termination by AIM or the Sub-Adviser shall require sixty
days' written notice to the other party and to the Fund, and a termination by
the Fund shall require such notice to each of the parties. This Agreement shall
automatically terminate in the event of its assignment to the extent required by
the Investment Company Act and the rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Fund such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the Sub-Adviser
to receive payments on any unpaid balance of the compensation described in
Article III hereof earned prior to such termination.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but may
only be modified by an instrument in writing signed by the Sub-Adviser and AIM.
In addition, no amendment to this Agreement shall be effective unless approved
by (1) the vote of a majority of the Directors of the Fund, including a majority
of the Directors who are not parties to this Agreement or interested persons of
any such party, cast in person at a meeting called for the purpose of voting on
such amendment, and (2) the vote of a majority of the outstanding voting
securities of the Series (other than an amendment which can be effective without
shareholder approval under applicable law).
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the rules and
regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Texas and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Texas, or any of the provisions
herein, conflict with the applicable provisions of the Investment Company Act,
the latter shall control.
<PAGE>
ARTICLE X
MISCELLANEOUS
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be severable.
If any provision of this Agreement shall be held illegal or made invalid by a
court decision, statute, rule or otherwise, such illegality or invalidity shall
not affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
A I M ADVISORS, INC.
By:
President
ATTEST:
Secretary
INVESCO REALTY ADVISORS, INC.
By:
President
ATTEST:
Secretary
<PAGE>
SCHEDULE A
TO
IRA SUB-ADVISORY AGREEMENT
Pursuant to Article III of the Sub-Advisory Agreement between A I M and
INVESCO Realty Advisors, Inc.. ("IRA"), fees payable thereunder to the IRA shall
be calculated by applying the following annual rates to the average daily net
assets of the indicated Series:
Series Annual Fee Rate
AIM Advisor Real Estate Fund 0.35% of assets to $100 million;
0.25% of assets in excess of $100 million.
<PAGE>
ANNEX E
SUB-ADVISORY AGREEMENT
AGREEMENT made this ____ day of __________, 199_, by and between A I M
Advisors, Inc. ("AIM"), a Delaware corporation, and INVESCO Global Asset
Management Limited, a Bermuda company (the "Sub-Adviser").
WITNESSETH:
WHEREAS, AIM Advisor Funds, Inc. (the "Fund"), is engaged in business as a
diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act") which is divided into various series (the "Shares"),
and which may be divided into additional series, each representing an interest
in a separate portfolio of investments; and
WHEREAS, AIM and the Sub-Adviser are engaged principally in rendering
investment advisory services and are registered as investment advisers under the
Investment Advisers Act of 1940; and
WHEREAS, AIM has entered into an Investment Advisory Agreement with the Fund
(the "AIM Investment Advisory Agreement"), pursuant to which AIM is required to
provide investment and advisory services to the Fund's series, and, upon receipt
of written approval of the Fund, is authorized to retain companies which are
affiliated with AIM to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory services
to one of those Fund's series, the AIM Advisor International Value Fund,
hereinafter referred to as the "Series"), on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, AIM and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
AIM hereby employs the Sub-Adviser to act as investment adviser to the Series
and to furnish the investment advisory services described below, subject to the
broad supervision of AIM and the Board of Directors of the Fund, for the period
and on the terms and conditions set forth in this Agreement. The Sub-Adviser
hereby accepts such assignment and agrees during such period, at its own
expense, to render such services and to assume the obligations herein set forth
for the compensation provided for herein. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and, unless otherwise expressly
provided or authorized herein, shall have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent of the Fund. The Sub-Adviser
hereby agrees to manage the investment operations of the Fund's Series, subject
to the supervision of the Fund's directors (the "Directors") and AIM.
Specifically, the Sub-Adviser agrees to perform the following services:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Fund's Series, and to execute all purchases and
sales of portfolios securities;
(b) to maintain a continuous investment program for the Fund's Series,
consistent with (i) the Series' investment policies as set forth in the
Fund's Articles of Incorporation, Bylaws, and Registration Statement, as from
time to time amended, under the Investment Company Act of 1940, and in any
Prospectus and/or Statement of Additional Information of the Fund, as from
time to time amended and in use under the Securities Act of 1933, as amended,
and (ii) the Fund's status as a regulated investment company under the
Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for the Fund's
Series, unless otherwise directed by the Directors of the Fund or AIM, and to
execute transactions accordingly;
(d) to provide to the Fund's Series the benefit of all of the investment
analysis and research, the reviews of current economic conditions and of
trends, and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of the
Sub-Adviser;
(e) to determine what portion of the Fund's Series should be invested in
the various types of securities authorized for purchase by the Series; and
(f) to make recommendations as to the manner in which voting rights, rights
to consent to Fund action and any other rights pertaining to the Series'
securities shall be exercised.
With respect to execution of transactions for the Fund's Series, the
Sub-Adviser is authorized to employ such brokers or dealers as may, in the
Sub-Adviser's best judgment, implement the policy of the Fund to obtain prompt
and reliable execution at the most favorable price obtainable. In assigning an
execution or negotiating the commission to be paid therefor, the Sub-Adviser is
authorized to consider the full range and quality of a broker's services which
benefit the Fund, including but not limited to research and analytical
capabilities, reliability of performance, sale of Fund shares, and financial
soundness and responsibility. Research services prepared and furnished by
brokers through which the Sub-Adviser effects securities transactions on behalf
of the Fund may be used by the Sub-Adviser in servicing all of its accounts, and
not all such services may be used by the Sub-Adviser in connection with the
Fund. In the selection of a broker or dealer for execution of any negotiated
transaction, the Sub-Adviser shall have no duty or obligation to seek advance
competitive bidding for the most favorable negotiated commission rate for such
transaction, or to select any broker solely on the basis of its purported or
"posted" commission rate for such transaction, provided, however, that the
Sub-Adviser shall consider such "posted" commission rates, if any, together with
any other information available at the time as to the level of commissions known
to be charged on comparable transactions by other qualified brokerage firms, as
well as all other relevant factors and circumstances, including the size of any
contemporaneous market in such securities, the importance to the Fund of speed,
efficiency, and confidentiality of execution, the execution capabilities
required by the circumstances of the particular transactions, and the apparent
knowledge or familiarity with sources from or to whom such securities may be
purchased or sold. Where the commission rate reflects services, reliability and
other relevant factors in addition to the cost of execution, the Sub-Adviser
shall have the burden of demonstrating that such expenditures were bona fide and
for the benefit of the Fund. Fund transactions may be effected through qualified
broker-dealers who recommend the Fund to their clients, or who act as agent in
the purchase of the Fund's shares for their clients. When a number of brokers
and dealers can provide comparable best price and execution on a particular
transaction, the Sub-Adviser may consider the sale of Fund shares by a broker or
dealer in selecting among qualified broker-dealers.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and personnel
necessary to perform its obligations under this Agreement, and shall, at its own
expense, provide the office space, equipment and facilities necessary to perform
its obligations under this Agreement. Except to the extent expressly assumed by
the Sub-Adviser herein and except to the extent required by law to be paid by
the Sub-Adviser, AIM and/or the Fund shall pay all costs and expenses in
connection with the operations of the Fund's Series.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, the facilities furnished and expenses assumed by
the Sub-Adviser, AIM shall pay to the Sub-Adviser a fee, computed daily and paid
as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Fund's Series, as determined by a
valuation made in accordance with the Fund's procedures for calculating its net
asset value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the annual
rates indicated in Schedule A hereto. During any period when the determination
of the Series' net asset value is suspended by the Directors of the Fund, the
net asset value of a share of the Fund's Series as of the last business day
prior to such suspension shall, for the purpose of this Article III, be deemed
to be the net asset value at the close of each succeeding business day until it
is again determined. However, no such fee shall be paid to the Sub-Adviser with
respect to any assets of the Fund's Series which may be invested in any other
investment company for which the Sub-Adviser serves as investment adviser or sub
adviser. The fee provided for hereunder shall be prorated in any month in which
this Agreement is not in effect for the entire month. The Sub-Adviser shall be
entitled to receive fees hereunder only for such periods as the AIM Investment
Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Series are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, AIM and their affiliates are or may become
interested in the Fund as directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND
COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Fund's Series, neither the Sub-Adviser nor any of its
directors, officers or employees will either act as a principal or agent for any
party other than the Fund's Series or receive any commissions. The Sub-Adviser
will comply with all applicable laws in acting hereunder including, without
limitation, the Investment Company Act; the Investment Advisers Act of 1940, as
amended; and all rules and regulations duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement having been approved by a majority of the outstanding voting
securities of the Series, shall become effective as of the date so written
above, and shall remain in force for an initial term of two years from the date
of execution, and from year to year thereafter until its termination in
accordance with this Article VI, but only so long as such continuance is
specifically approved at least annually by (i) the Directors of the Fund, or by
the vote of a majority of the outstanding voting securities of the Fund's
Series, and (ii) a majority of those Directors who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
This Agreement may be terminated as to any services at any time, without the
payment of any penalty, by AIM, by the Fund by vote of the Directors of the Fund
or by vote of a majority of the outstanding voting securities of the Fund's
Series, or by the Sub-Adviser. A termination by AIM or the Sub-Adviser shall
require sixty days' written notice to the other party and to the Fund, and a
termination by the Fund shall require such notice to each of the parties. This
Agreement shall automatically terminate in the event of its assignment to the
extent required by the Investment Company Act and the rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Fund such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the Sub-Adviser
to receive payments on any unpaid balance of the compensation described in
Article III hereof earned prior to such termination.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but may
only be modified by an instrument in writing signed by the Sub-Adviser and AIM.
In addition, no amendment to this Agreement shall be effective unless approved
by (1) the vote of a majority of the Directors of the Fund, including a majority
of the Directors who are not parties to this Agreement or interested persons of
any such party, cast in person at a meeting called for the purpose of voting on
such amendment, and (2) the vote of a majority of the outstanding voting
securities of any of the Fund's Series as to which such amendment is applicable
(other than an amendment which can be effective without shareholder approval
under applicable law).
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the rules and
regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Texas and the applicable provisions of the Investment Company Act. To the extent
that the applicable laws of the State of Texas, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.
<PAGE>
ARTICLE X
MISCELLANEOUS
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be severable.
If any provision of this Agreement shall be held illegal or made invalid by a
court decision, statute, rule or otherwise, such illegality or invalidity shall
not affect the validity or enforceability of the remainder of this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
A I M ADVISORS, INC.
By:
President
ATTEST:
Secretary
INVESCO GLOBAL ASSET MANAGEMENT
LIMITED
By:
President
ATTEST:
Secretary
<PAGE>
SCHEDULE A
TO
IGAM SUB-ADVISORY AGREEMENT
Pursuant to Article III of the Sub-Advisory Agreement between A I M
Advisors, Inc. and INVESCO Global Asset Management Limited ("IGAM"), fees
payable thereunder to IGAM shall be calculated by applying the following annual
rates to the average daily net assets of the indicated Series:
Series Annual Fee Rate
AIM Advisor International Value 0.35% on assets to $50 million;
Fund 0.30% on assets over $50
million to $100 million;
0.25% on assets in excess of
$100 million.
<PAGE>
ANNEX F
PRESENT DIRECTORS AND EXECUTIVE OFFICERS
OF THE COMPANY
Position with Business Experience for the
Name, Address and Age Company Past Five Years
Charles W. Brady*+ Chairman Chief Executive Officer and
1315 Peachtree Street, N.E. Director, AMVESCAP PLC, and
Atlanta, GA 30309 of various subsidiaries;
Age: 61 Chairman of the Board,
INVESCO Treasurer's Series
Trust and The Global Health
Sciences Fund.
Fred A. Deering+# Vice Chairman Formerly, Chairman of the
Security Life Center Executive Committee and
1290 Broadway Chairman of the Board,
Denver, CO Security Life of Denver
Age: 69 Insurance Company; Former
Director, Midwestern United Life
Insurance Company; Director, ING
American Holdings Company and
First ING Life Insurance Company
of New York; Vice Chairman,
INVESCO Treasurer's Series Trust;
Trustee, The Global Health
Sciences Fund.
Hubert L. Harris, Jr.*+ President, Chief President of the Fund
1315 Peachtree Street, N.E. Accounting and (4/91-present); Chairman of
Atlanta, GA 30309 Financial INVESCO Services,
Age: 53 Officer, and Inc.(5/96-present);
Director President, INVESCO Services,
Inc. (1/90-4/96); Director,
AMVESCAP PLC, and Chief
Executive Officer of INVESCO
Individual Services Group;
member of Executive
Committee of the Alumni
Board of Trustees of Georgia
Institute of Technology;
President and Trustee, The
Global Health Sciences Fund
and Trustee, INVESCO
Treasurer's Series Trust.
Victor L. Andrews ** Director Professor Emeritus, Chairman
4625 Jettridge Drive Emeritus and Chairman of
Atlanta, GA the CFO Roundtable,
Age: 66 Department of Finance,
Georgia State University;
President, Andrews Financial
Associates, Inc.; former member of
the faculties, Harvard Business
School and the Sloan School of
Management of MIT; Director, The
Southeastern Thrift and Bank Fund,
Inc. and The Sheffield Funds,
Inc.; Trustee, INVESCO Treasurer's
Series Trust.
Bob R. Baker+** Director President and Chief
1775 Sherman Street, #1000 Executive Officer, AMC
Denver, CO 80203 Cancer Research Center
Age: 60 (since 1/89); Trustee,
INVESCO Treasurer's Series
Trust.
Lawrence H. Budner# Director Trust Consultant; Formerly,
7608 Glen Albens Circle Senior Vice President and
Dallas, TX 75225 Senior Trust Officer of
Age: 66 InterFirst Bank, Dallas, TX;
Trustee, INVESCO Treasurer's
Series Trust.
Daniel D. Chabris+# Director Financial Consultant;
15 Sterling Road Formerly, Assistant
Armonk, NY 10504 Treasurer, Colt Industries,
Age: 73 Inc., New York, NY; Trustee,
INVESCO Treasurer's Series
Trust.
Kenneth T. King** Director Retired; Formerly Chairman,
4080 North Circulo The Capital Life Insurance
Manzanillo Company, Providence
Tucson, AZ 85715 Washington Insurance
Age: 71 Company, and Director of
numerous subsidiaries
thereof; Trustee, INVESCO
Treasurer's Series Trust.
John W. McIntyre# Director Retired; Formerly Chairman
Seven Piedmont Center and Chief Executive Officer,
Suite 100 Citizens and Southern
Atlanta, GA 30305 National Bank; Trustee,
Age: 66 INVESCO Treasurer's Series
Trust, The Global Health
Sciences Fund and Gables
Residential Trust.
Tony D. Green Treasurer and Senior Vice President,
1355 Peachtree Street, N.E. Secretary INVESCO Services, Inc.
Atlanta, GA 30309 (since 7/93); Secretary,
Age: 50 INVESCO Services, Inc.
(since 4/95); formerly, Principal
for Mutual Fund Operations, Edward
D. Jones & Co; Treasurer and
Secretary, INVESCO Treasurer's
Series Trust (since 7/95).
Mark F. Moots, Jr. Assistant Chief Financial Officer,
1355 Peachtree Street, N.E. Treasurer and INVESCO Services, Inc.
Atlanta, GA 30309 Assistant (since 5/96); Compliance and
Age: 32 Secretary Accounting Manager, INVESCO
Services, Inc. (8/95-4/96);
Chief Financial Officer,
Caldwell & Orkin, Inc. and
Treasurer, C&O Funds
Distributor, Inc.(1992-1995).
- ---------------
* Messrs. Brady and Harris are "interested persons" (as that term is defined
in the 1940 Act) of the Fund because of their affiliation with ISI and/or
its affiliated companies.
** Member of the management liaison committee of the Fund.
# Member of the audit committee of the Fund.
+ Member of the executive committee of the Fund. The executive committee
acts upon the current and ordinary business of the Fund between
meetings of the Board of Directors. Except for certain powers which,
under applicable law, may only be exercised by the full Board of
Directors, the executive committee may exercise all powers and
authority of the Board of Directors in the management of the business
of the Fund. All decisions are subsequently submitted for ratification
by the Board of Directors.
During the year ended December 31, 1996, the Company's Board of Directors
met five times, including one special meeting. The Company currently has five
standing committees of its Board of Directors: the Audit Committee, the
Valuation Committee, the Compensation Committee, the Management Liaison
Committee and the Executive Committee. During the year ended December 31, 1996,
the Audit Committee met four times, the Management Liaison Committee met four
times, and the Compensation Committee met once. During such year, all of the
Directors attended at least 75% of the meetings of the Board of Directors and
all committees, except Charles Brady and Kenneth King who each missed the
special meeting and one regular meeting.
ICM serves as investment adviser of INVESCO Treasurer's Series Trust. Mr.
Brady is also Chairman of the Board, Mr. Deering is Vice Chairman, and all of
the Directors of the Fund, with the exception of Mr. Harris, are directors or
trustees of the following investment companies: INVESCO Diversified Funds, Inc.;
INVESCO Dynamics Fund, Inc.; INVESCO Emerging Opportunity Funds, Inc.; INVESCO
Growth Fund, Inc.; INVESCO Income Funds, Inc.; INVESCO Industrial Income Fund,
Inc.; INVESCO International Funds, Inc.; INVESCO Money Market Funds, Inc.;
INVESCO Multiple Asset Funds, Inc.; INVESCO Specialty Funds, Inc.; INVESCO
Strategic Portfolios, Inc.; INVESCO Tax-Free Income Funds, Inc.; INVESCO Value
Trust; and INVESCO Variable Investment Funds, Inc.
Director Compensation
The following table sets forth, for the fiscal period ended December 31,
1996: the compensation paid by the Fund to its seven (formerly eight)
independent directors for services rendered in their capacities as directors of
the Fund; the retirement benefits accrued as Fund expenses with respect to the
Defined Benefit Deferred Compensation Plan discussed below; and the total
compensation paid by all of the mutual funds distributed by ISI and INVESCO
Funds Group, Inc., including the fund, INVESCO Treasurer's Series Trust and The
Global Health Sciences Fund (collectively, the "INVESCO Complex") (50 portfolios
in total) to these directors for services rendered in their capacities as
directors or trustees.
<PAGE>
Total
Compensation
Estimated From
Retirement Annual INVESCO
Aggregate Benefits Benefits Complex
Name of Person, Compensation Accrued As Part Upon Paid To
Position From Fund (1) of Fund Retirement Directors
Expenses (2) (3) (1)
Fred A. Deering, $ 8,816 $ 1,814 $ 1,766 $ 98,850
Vice Chairman of
the Board
Victor L. Andrews 8,600 1,714 2,044 84,350
Bob R. Baker 8,635 1,530 2,739 84,350
Lawrence H.
Budner 8,352 1,714 2,044 80,350
Daniel D. Chabris 8,635 1,956 1,453 84,850
A. D. Frazier,
Jr.(4) 7,840 0 0 81,500
Kenneth T. King
7,759 1,883 1,602 71,350
John W. McIntyre
8,294 0 0 90,350
------- ------- ------- --------
TOTAL $66,933 $10,611 $11,468 $676,450
% of Assets 0.0066% (5) 0.0011% (5) -- 0.0044% (6)
(1) The vice chairman of the board, the chairman of the audit, management
liaison, and compensation committees, and the members of the executive committee
each receive compensation for serving in such capacities in addition to the
compensation paid to all independent directors.
(2) Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the election
of the directors.
(3) These figures represent the Company's share of the estimated annual benefits
to be paid by the INVESCO Complex (excluding the Global Health Sciences Fund
which does not participate in any retirement plan) upon the director's
retirement, calculated using the current method of allocating director
compensation among the mutual funds in the INVESCO Complex. These estimated
benefits assume retirement at age 72 and that the basic retainer payable to the
directors will be adjusted periodically for inflation, for increases in the
number of mutual funds in the INVESCO Complex, and for other reasons during the
period in which retirement benefits are accrued on behalf of the respective
directors. This results in lower estimated benefits for directors who are closer
to retirement and higher estimated benefits for directors who are further from
retirement. With the exception of Messrs. Frazier and McIntyre, each of these
directors has served as a director/trustee of one or more mutual funds in the
INVESCO Complex for the minimum five-year period required to be eligible to
participate in the Defined Benefit Deferred Compensation Plan.
(4) Effective November 1, 1996, Mr. Frazier was employed by AMVESCO PLC. Because
it was possible that Mr. Frazier would be employed with AMVESCO PLC, effective
May 1, 1996, he was deemed to be an "interested person" of the Fund and of the
other funds in the INVESCO Complex. Effective November 1, 1996, Mr. Frazier
ceased to receive any director's fees or other compensation from the Fund or
other investment companies in the INVESCO Complex for his services as a
director. Effective February 28, 1997, Mr. Frazier resigned as a director of the
Company.
(5) Total as a percentage of the Fund's net assets as of December 31, 1996.
(6) Total as a percentage of the net assets of the INVESCO Complex as of
December 31, 1996.
Messrs. Brady and Harris, as "interested persons" of the Fund and other
investment companies in the INVESCO Complex, receive compensation as officers or
employees of ISI or its affiliated companies, and do not receive any director's
fees or other compensation from the Company or other investment companies in the
INVESCO Complex for their services as directors.
The boards of directors/trustees of the mutual funds in the INVESCO
Complex (excluding The Global Health Services Fund) have adopted a Defined
Benefit Deferred Compensation Plan for the non-interested directors and trustees
of the funds. Under this plan, each director or trustee who is not an interested
person of the funds (as defined in the 1940 Act) and who has served for at least
five years (a "qualified director") is entitled to receive, upon retiring from
the boards at the retirement age of 72 (or the retirement age of 73 or 74, if
the retirement date is extended by the boards for one or two years, but less
than three years) continuation of payment for one year (the "first year
retirement benefit") of the annual basic retainer payable by the funds to the
qualified director at the time of his retirement (the "basic retainer").
Commencing with any such director's second year of retirement, and commencing
with the first year of retirement of a director whose retirement has been
extended by the board for three years, a qualified director shall receive
quarterly payments at an annual rate equal to 40% of the basic retainer. These
payments will continue for the remainder of the qualified director's life or ten
years, whichever is longer (the "reduced retainer payments"). If a qualified
director dies or becomes disabled after age 72 and before age 74 while still a
director of the funds, the first year retirement benefit and the reduced
retainer payments will be made to him or to his beneficiary or estate. If a
qualified director becomes disabled or dies either prior to age 72 or during
his/her 74th year while still a director of the funds, the director will not be
entitled to receive the first year retirement benefit; however, the reduced
retainer payments will be made to his beneficiary or estate. The plan is
administered by a committee of three directors who are also participants in the
plan and one director who is not a plan participant. The cost of the plan will
be allocated among the funds in the INVESCO Complex (excluding The Global Health
Sciences Fund) in a manner determined to be fair and equitable by the committee.
The Fund is not making any payments to directors under the plan as of the date
of this Statement of Additional Information. The Fund has no stock options or
other pension or retirement plans for management or other personnel and pays no
salary or compensation to any of its officers.
<PAGE>
ANNEX G
ADVISORY AGREEMENT FEE SCHEDULE
Aggregate
Total Net Fees Waivers
Net Assets Paid to AIM for the Most
for the Most for the Most Recently
Annual Rates (based on Recently Recently Completed
average daily net assets) Completed Completed Fiscal Year
for AIM Funds Fiscal Year Fiscal Year*
AIM EQUITY FUNDS, INC.
AIM Aggressive Growth
Fund
0.80% of the first
$150 million.
0.625% of the
excess over
$150 million. $ 2,750,563,943 $16,492,564 $ 0
AIM Blue Chip Fund
0.75% of the first
$350 million.
0.625% of the
excess over
$350 million. $ 128,548,354 $ 256,773** $ 26,433
AIM Capital Development
Fund
0.75% of the first
$350 million.
0.625% of the
excess over $350
million. $ 273,687,609 $ 280,248*** $ 144,946
AIM Charter Fund
1.00% of the first
$30 million.
0.75% over $30
million up to $150
million.
0.625% of the
excess over $150
million. $ 3,192,471,415 $16,529,891 $ 156,975
AIM Constellation Fund
1.00% of the first
$30 million.
0.75% over $30
million up to $150
million.
0.625% of the
excess over $150
million. $11,548,540,962 $57,614,412 $1,869,383
AIM Weingarten Fund
1.00% of the first
$30 million.
0.75% over $30
million up to $350
million.
0.625% of the
excess over $350
million. $ 5,305,435,087 $29,960,379 $1,458,804
AIM FUNDS GROUP
AIM Balanced Fund
0.75% of the first
$150 million.
0.50% of the excess
over $150 million. $ 571,270,994 $ 2,151,655 $ 0
AIM Global Utilities
Fund
0.60% of the first
$200 million.
0.50% over $200
million up to $500
million.
0.40% over $500
million up to $1
billion.
0.30% of the excess
over $1 billion. $ 243,531,479 $ 1,397,762 $ 0
AIM Growth Fund
0.80% of the first
$150 million.
0.625% of excess
over $150 million. $ 508,689,539 $ 2,874,943 $ 0
AIM High Yield Fund
0.625% of the first
$200 million.
0.55% over $200
million to $500
million.
0.50% over $500
million to $1
billion.
0.45% of the excess
over $1 billion. $ 2,341,034,366 $ 9,277,005 $ 0
AIM Income Fund
0.50% of the first
$200 million.
0.40% over $200
million to $500
million.
0.35% over $500
million to $1
billion.
0.30% of the excess
over $1 billion. $ 371,526,394 $ 1,510,254 $ 0
AIM Intermediate
Government Fund
0.50% of the first
$200 million.
0.40% over $200
million to $500
million.
0.35% over $500
million to $1
billion.
0.30% of the excess
over $1 billion. $ 253,787,441 $ 1,188,121 $ 0
AIM Money Market Fund
0.55% of the first
$1 billion.
0.50% of the excess
over $1 billion. $ 694,523,395 $ 4,136,659 $ 0
AIM Municipal Bond Fund
0.50% of the first
$200 million.
0.40% over $200
million to $500
million.
0.35% over $500
million to $1
billion.
0.30% of the excess
over $1 billion. $ 312,581,802 $ 1,417,007 $ 0
AIM Value Fund
0.80% of the first
$150 million.
0.625% of excess
over $150 million. $ 9,975,994,310 $50,259,125 $1,562,359
AIM INTERNATIONAL FUNDS,
INC.
AIM Global Aggressive
Growth Fund
0.90% of the first
$1 billion.
0.85% of the excess
over $1 billion. $ 1,726,533,976 $ 8,751,918 $ 0
AIM Global Growth Fund
0.85% of the first
$1 billion.
0.80% of the excess
over $1 billion. $ 236,819,172 $ 1,162,771 $ 0
AIM Global Income Fund
0.70% of the first
$1 billion.
0.65% of the excess
over $1 billion. $ 38,713,770 $ 0 $ 182,596
AIM International
Equity Fund
0.95% of the first
$1 billion.
0.90% of the excess
over $1 billion. $ 1,476,749,468 $10,085,495 $ 299,147
AIM INVESTMENT SECURITIES
FUNDS
Limited Maturity
Treasury Portfolio
0.20% of the first
$500 million.
0.175% of the
excess over $500
million. $ 502,515,805 $ 933,207 $ 0
AIM SUMMIT FUND, INC.
1.00% of the first
$10 million.
0.75% over $10
million to $150
million.
0.625% over $150
million. $ 1,261,008,244 $ 7,360,028**** $ 0
AIM TAX-EXEMPT FUNDS, INC.
AIM Tax-Exempt Cash
Fund
0.35% $ 56,880,192 $ 125,537 $ 0
AIM Tax-Exempt Bond
Fund of Connecticut
0.50% $ 38,118,475 $ 49,597 $ 144,775
Intermediate Portfolio
0.30% of the first
$500 million.
0.25% over $500
million to $1 billion.
0.20% of the excess
over $1 billion. $ 173,341,780 $ 276,828 $ 0
AIM VARIABLE INSURANCE
FUNDS, INC.
AIM V.I. Capital
Appreciation Fund
0.65% of the first
$250 million.
0.60% of the excess
over $250 million. $ 370,063,165 $ 1,884,838 $ 0
AIM V.I. Diversified
Income Fund
0.60% of the first
$250 million.
0.55% of the excess
over $250 million. $ 63,623,771 $ 306,235 $ 0
AIM V.I. Global
Utilities Fund
0.65% of the first
$250 million.
0.60% of the excess
over $250 million. $ 13,575,573 $ 57,054 $ 15,954
AIM V.I. Government
Securities Fund
0.50% of the first
$250 million.
0.45% of the excess
over $250 million. $ 24,526,516 $ 107,471 $ 0
AIM V.I. Growth Fund
0.65% of the first
$250 million.
0.60% of the excess
over $250 million. $ 178,637,892 $ 916,484 $ 0
AIM V.I. Growth and
Income Fund
0.65% of the first
$250 million.
0.60% of the excess
over $250 million. $ 209,331,631 $ 678,242 $ 0
AIM V.I. International
Equity Fund
0.75% of the first
$250 million.
0.70% of the excess
over $250 million. $ 165,738,078 $ 924,578 $ 0
AIM V.I. Money Market
Fund
0.40% of the first
$250 million.
0.35% of the excess
over $250 million. $ 63,529,493 $ 264,855 $ 0
AIM V.I. Value Fund
0.65% of the first
$250 million.
0.60% of the excess
over $250 million. $ 369,735,146 $ 1,955,091 $ 0
SHORT-TERM INVESTMENTS CO.
Liquid Assets Portfolio
0.15% $ 2,086,944,322 $ 125,264 $2,562,094
Prime Portfolio
0.20% of the first
$100 million.
0.15% over $100
million up to 4200
million.
0.10% over $200
million up to $300
million.
0.06% over $300
million up to $1.5
billion.
0.05% over $1.5
billion. $ 6,151,948,355 $ 3,007,431 $ 0
SHORT-TERM INVESTMENTS
TRUST
Treasury Portfolio
0.15% of the first
$300 million.
0.06% over $300
million up to $1.5
billion.
0.05% of the excess
over $1.5 billion $ 3,703,891,140 $ 2,227,788 $ 0
Treasury TaxAdvantage
Portfolio
0.20% of the first
$250 million.
0.15% over $250
million up to $500
million.
0.10% of the excess
over $500 million. $ 457,196,150 $ 675,795 $ 116,126
TAX-FREE INVESTMENTS CO.
Cash Reserve Portfolio
0.25% of the first
$500 million.
0.20% of the excess
over $500 million. $ 1,004,111,157 $ 2,346,148 $ 625,513
* AIM reimbursed expenses with respect to the following Funds: AIM Global Growth
Fund, $11,719; AIM Global Income Fund, $18,300; Liquid Assets Portfolio,
$116,930; Prime Portfolio, $61,100; Treasury Portfolio, $113,500; Treasury
TaxAdvantage Portfolio, $25,600; and Cash Reserve Portfolio, $20,000.
** For the period 06/03/96 through 10/31/96.
*** For the period 06/17/96 through 10/31/96.
**** Of the $7,360,028 paid to AIM, $2,442,907 was paid by AIM to
TradeStreet Investment Associates, Inc. pursuant to a sub-advisory agreement.
<PAGE>
ANNEX H
SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT
Security Ownership of the Portfolios
The following table sets forth, as of the Record Date, the record ownership of
each Portfolio's issued and outstanding common stock by each 5% or greater
shareholder. The Directors and executive officers of the Company and the
nominees for Directors did not own 1% or more of the outstanding shares of any
Portfolio as of the Record Date. The Company has no knowledge regarding
beneficial ownership.
Name and Address Amount of Percent of
of Record Owner Record Ownership Common Stock
Equity Portfolio
Merrill Lynch, Pierce, Fenner & Smith, 274,477.000 16.35%
Inc.
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
Flex Portfolio
Merrill Lynch, Pierce, Fenner & Smith, 932,748.000 12.36%
Inc.
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
Income Portfolio
Merrill Lynch, Pierce, Fenner & Smith, 52,372.000 10.21%
Inc.
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
International Value Portfolio
Merrill Lynch, Pierce, Fenner & Smith, 652,411.000 51.04%
Inc.
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
MultiFlex Portfolio
Merrill Lynch, Pierce, Fenner & Smith, 491,224.000 8.78%
Inc.
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
Real Estate Portfolio
Merrill Lynch, Pierce, Fenner & Smith, 32,926.000 6.43%
Inc.
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive, E., 3rd Fl.
Jacksonville, FL 32246
<PAGE>
ANNEX I
DIRECTORS AND PRINCIPAL EXECUTIVE OFFICERS
OF AIM
Set forth below is certain information regarding the directors and the
principal executive officer of AIM.
Name Position with AIM Principal Occupation
Charles T. Bauer Director See Director table under Proposal 4.
Gary T. Crum Director Director and President, A I M
Capital Management, Inc.; Director
and Senior Vice President, A I M
Management Group, Inc. and AIM;
Director, A I M Distributors, Inc.;
and Director, AMVESCAP PLC.
Robert H. Graham Director and See Director table under Proposal 4.
President
William H. Kleh Director Director and Senior Vice President,
AIM; Director and Vice President, A
I M Capital Management, Inc.;
Director, Fund Management Company.;
Senior Vice President, A I M
Management Group, Inc.; and Vice
President, A I M Distributors, Inc.
J. Abbott Sprague Director Director and President, A I M
Institutional Fund Services, Inc.
and Fund Management Company;
Director and Senior Vice President,
AIM; and Senior Vice President, A I
M Management Group, Inc..
<PAGE>
PROXY INVESCO Advisor Cash Management Portfolio PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF INVESCO ADVISOR FUNDS, INC.
SPECIAL MEETING OF SHAREHOLDERS
JUNE 30, 1997 - 10:00 A.M. EASTERN TIME
The undersigned hereby revokes all previous proxies for his or her shares and
appoints Hubert L. Harris, Jr. and Tony D. Green, and each of them, with the
power of substitution, as Proxies, and hereby authorizes them to vote as
designated below, as effectively as the undersigned could do if personally
present, all the shares of INVESCO Advisor Cash Management Portfolio held of
record by the undersigned on April 30, 1997, at the Special Meeting of
Shareholders, or any adjournment thereof, to be held at 10:00 a.m. Eastern Time
on June 30, 1997 at 1355 Peachtree Street, N.E., Suite 200, Atlanta, Georgia
30309.
The following proposals apply to shares you hold in INVESCO Advisor Cash
Management Portfolio:
1. Approval of new Investment Advisory Agreement with A I M Advisors, Inc.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
4. Election of Board of Directors.
/_/FOR all nominees listed below /_/WITHHOLD AUTHORITY to vote
(except as indicated to the contrary below) for all the nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below.)
Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Jack Fields, Carl
Frischling, Robert H. Graham, John F. Kroeger, Lewis F. Pennock, Ian W.
Robinson, Louis S. Sklar
5. Transaction of such other business as may properly come before the
Meeting or any adjournment(s) thereof.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
(Continued and to be signed on reverse)
<PAGE>
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY IMMEDIATELY
IN THE POSTAGE-PAID ENVELOPE PROVIDED.
This Proxy is solicited on behalf of the Board of Directors, and when properly
executed, will be voted as specified. If no specification is made, shares held
by the undersigned of INVESCO Advisor Cash Management Portfolio will be cast FOR
Proposal 1 and FOR the election of all nominees for Directors. If any other
matters properly come before the meeting of which the Directors were not aware a
reasonable time before the solicitation, the undersigned hereby authorizes proxy
holders to vote in their discretion on such matters. The undersigned
acknowledges receipt of the Notice of Meeting and Proxy Statement dated
__________, 1997.
Please sign exactly as your name or names appear below. When shares are held by
joint tenants, both should sign. If signing as attorney, executor, trustee or in
any other representative capacity, or as a corporate officer, please give full
title. Please date the proxy.
=======================================
Signature
Dated: _______________________, 1997
/_/ Check here if you plan to attend the Meeting. _______ persons will
attend.
<PAGE>
PROXY INVESCO Advisor Equity Portfolio PROXY
INVESCO Advisor Flex Portfolio, INVESCO Advisor Income Portfolio
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF INVESCO ADVISOR FUNDS, INC.
SPECIAL MEETING OF SHAREHOLDERS
JUNE 30, 1997 - 10:00 A.M. EASTERN TIME
The undersigned hereby revokes all previous proxies for his or her shares and
appoints Hubert L. Harris, Jr. and Tony D. Green, and each of them, with the
power of substitution, as Proxies, and hereby authorizes them to vote as
designated below, as effectively as the undersigned could do if personally
present, all the shares of INVESCO Advisor Equity Portfolio, INVESCO Advisor
Flex Portfolio and/or INVESCO Advisor Income Portfolio held of record by the
undersigned on April 30, 1997, at the Special Meeting of Shareholders, or any
adjournment thereof, to be held at 10:00 a.m. Eastern Time on June 30, 1997 at
1355 Peachtree Street, N.E., Suite 200, Atlanta, Georgia 30309.
The following proposals apply to shares you hold in INVESCO Advisor Equity
Portfolio, INVESCO Advisor Flex Portfolio and/or INVESCO Advisor Income
Portfolio:
1. Approval of new Investment Advisory Agreement with A I M Advisors,
Inc.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
2.A. Approval of new Sub-Advisory Agreement between A I M Advisors, Inc. and
INVESCO Capital Management, Inc.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
4. Election of Board of Directors.
/_/FOR all nominees listed below /_/WITHHOLD AUTHORITY to vote
(except as indicated to the contrary below) for all the nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below.)
Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Jack Fields, Carl
Frischling, Robert H. Graham, John F. Kroeger, Lewis F. Pennock, Ian W.
Robinson, Louis S. Sklar
5. Transaction of such other business as may properly come before the
Meeting or any adjournment(s) thereof.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
(Continued and to be signed on reverse)
<PAGE>
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY IMMEDIATELY
IN THE POSTAGE-PAID ENVELOPE PROVIDED.
This Proxy is solicited on behalf of the Board of Directors, and when properly
executed, will be voted as specified. If no specification is made, shares held
by the undersigned of INVESCO Advisor Equity Portfolio, INVESCO Advisor Flex
Portfolio and/or INVESCO Advisor Income Portfolio will be cast FOR Proposal 1,
FOR Proposal 2.A and FOR the election of all nominees for Directors. If any
other matters properly come before the meeting of which the Directors were not
aware a reasonable time before the solicitation, the undersigned hereby
authorizes proxy holders to vote in their discretion on such matters. The
undersigned acknowledges receipt of the Notice of Meeting and Proxy Statement
dated __________, 1997.
Please sign exactly as your name or names appear below. When shares are held by
joint tenants, both should sign. If signing as attorney, executor, trustee or in
any other representative capacity, or as a corporate officer, please give full
title. Please date the proxy.
=======================================
Signature
Dated: _______________________, 1997
/_/ Check here if you plan to attend the Meeting. _______ persons will
attend.
<PAGE>
PROXY INVESCO Advisor MultiFlex Portfolio PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF INVESCO ADVISOR FUNDS, INC.
SPECIAL MEETING OF SHAREHOLDERS
JUNE 30, 1997 - 10:00 A.M. EASTERN TIME
The undersigned hereby revokes all previous proxies for his or her shares and
appoints Hubert L. Harris, Jr. and Tony D. Green, and each of them, with the
power of substitution, as Proxies, and hereby authorizes them to vote as
designated below, as effectively as the undersigned could do if personally
present, all the shares of INVESCO Advisor MultiFlex Portfolio held of record by
the undersigned on April 30, 1997, at the Special Meeting of Shareholders, or
any adjournment thereof, to be held at 10:00 a.m. Eastern Time on June 30, 1997
at 1355 Peachtree Street, N.E., Suite 200, Atlanta, Georgia 30309.
INVESCO Advisor MultiFlex Portfolio:
1. Approval of new Investment Advisory Agreement with A I M Advisors, Inc.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
2.B. Approval of new Sub-Advisory Agreement between A I M Advisors, Inc. and
INVESCO Management & Research, Inc.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
4. Election of Board of Directors.
/_/FOR all nominees listed below /_/WITHHOLD AUTHORITY to vote
(except as indicated to the contrary below) for all the nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below.)
Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Jack Fields,
Carl Frischling, Robert H. Graham, John F. Kroeger, Lewis F.
Pennock, Ian W. Robinson, Louis S. Sklar
5. Transaction of such other business as may properly come before the
Meeting or any adjournment(s) thereof.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
(Continued and to be signed on reverse)
<PAGE>
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY IMMEDIATELY
IN THE POSTAGE-PAID ENVELOPE PROVIDED.
This Proxy is solicited on behalf of the Board of Directors, and when properly
executed, will be voted as specified. If no specification is made, shares held
by the undersigned of INVESCO Advisor MultiFlex Portfolio will be cast FOR
Proposal 1, FOR Proposal 2.B and FOR the election of all nominees for Directors.
If any other matters properly come before the meeting of which the Directors
were not aware a reasonable time before the solicitation, the undersigned hereby
authorizes proxy holders to vote in their discretion on such matters. The
undersigned acknowledges receipt of the Notice of Meeting and Proxy Statement
dated __________, 1997.
Please sign exactly as your name or names appear below. When shares are held by
joint tenants, both should sign. If signing as attorney, executor, trustee or in
any other representative capacity, or as a corporate officer, please give full
title. Please date the proxy.
=======================================
Signature
Dated: _______________________, 1997
/_/ Check here if you plan to attend the Meeting. _______ persons will
attend.
<PAGE>
PROXY INVESCO Advisor Real Estate Portfolio PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF INVESCO ADVISOR FUNDS, INC.
SPECIAL MEETING OF SHAREHOLDERS
JUNE 30, 1997 - 10:00 A.M. EASTERN TIME
The undersigned hereby revokes all previous proxies for his or her shares and
appoints Hubert L. Harris, Jr. and Tony D. Green, and each of them, with the
power of substitution, as Proxies, and hereby authorizes them to vote as
designated below, as effectively as the undersigned could do if personally
present, all the shares of INVESCO Advisor Real Estate Portfolio held of record
by the undersigned on April 30, 1997, at the Special Meeting of Shareholders, or
any adjournment thereof, to be held at 10:00 a.m. Eastern Time on June 30, 1997
at 1355 Peachtree Street, N.E., Suite 200, Atlanta, Georgia 30309.
The following proposals apply to shares you hold in INVESCO Advisor Real Estate
Portfolio:
1. Approval of new Investment Advisory Agreement with A I M Advisors, Inc.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
2.C. Approval of new Sub-Advisory Agreement between A I M Advisors, Inc. and
INVESCO Realty Advisors, Inc.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
4. Election of Board of Directors.
/_/FOR all nominees listed below /_/WITHHOLD AUTHORITY to vote
(except as indicated to the contrary below) for all the nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below.)
Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Jack Fields,
Carl Frischling, Robert H. Graham, John F. Kroeger, Lewis F.
Pennock, Ian W. Robinson, Louis S. Sklar
5. Transaction of such other business as may properly come before the
Meeting or any adjournment(s) thereof.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
(Continued and to be signed on reverse)
<PAGE>
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY IMMEDIATELY
IN THE POSTAGE-PAID ENVELOPE PROVIDED.
This Proxy is solicited on behalf of the Board of Directors, and when properly
executed, will be voted as specified. If no specification is made, shares held
by the undersigned of INVESCO Advisor Real Estate Portfolio will be cast FOR
Proposal 1, FOR Proposal 2.C. and FOR the election of all nominees for
Directors. If any other matters properly come before the meeting of which the
Directors were not aware a reasonable time before the solicitation, the
undersigned hereby authorizes proxy holders to vote in their discretion on such
matters. The undersigned acknowledges receipt of the Notice of Meeting and Proxy
Statement dated __________, 1997.
Please sign exactly as your name or names appear below. When shares are held by
joint tenants, both should sign. If signing as attorney, executor, trustee or in
any other representative capacity, or as a corporate officer, please give full
title. Please date the proxy.
=======================================
Signature
Dated: _______________________, 1997
/_/ Check here if you plan to attend the Meeting. _______ persons will
attend.
<PAGE>
PROXY INVESCO Advisor International Value Portfolio PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF INVESCO ADVISOR FUNDS, INC.
SPECIAL MEETING OF SHAREHOLDERS
JUNE 30, 1997 - 10:00 A.M. EASTERN TIME
The undersigned hereby revokes all previous proxies for his or her shares and
appoints Hubert L. Harris, Jr. and Tony D. Green, and each of them, with the
power of substitution, as Proxies, and hereby authorizes them to vote as
designated below, as effectively as the undersigned could do if personally
present, all the shares of INVESCO Advisor International Value Portfolio held of
record by the undersigned on April 30, 1997, at the Special Meeting of
Shareholders, or any adjournment thereof, to be held at 10:00 a.m. Eastern Time
on June 30, 1997 at 1355 Peachtree Street, N.E., Suite 200, Atlanta, Georgia
30309.
The following proposals apply to shares you hold in INVESCO Advisor
International Value Portfolio:
1. Approval of new Investment Advisory Agreement with A I M Advisors, Inc.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
3. Approval of new Sub-Advisory Agreement between A I M Advisors, Inc. and
INVESCO Global Asset Management Limited.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
4. Election of Board of Directors.
/_/FOR all nominees listed below /_/WITHHOLD AUTHORITY to vote
(except as indicated to the contrary below) for all the nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below.)
Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Jack Fields,
Carl Frischling, Robert H. Graham, John F. Kroeger, Lewis F.
Pennock, Ian W. Robinson, Louis S. Sklar
5. Transaction of such other business as may properly come before the
Meeting or any adjournment(s) thereof.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
(Continued and to be signed on reverse)
<PAGE>
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY IMMEDIATELY
IN THE POSTAGE-PAID ENVELOPE PROVIDED.
This Proxy is solicited on behalf of the Board of Directors, and when properly
executed, will be voted as specified. If no specification is made, shares held
by the undersigned of INVESCO Advisor International Value Portfolio will be cast
FOR Proposal 1, FOR Proposal 3 and FOR the election of all nominees for
Directors. If any other matters properly come before the meeting of which the
Directors were not aware a reasonable time before the solicitation, the
undersigned hereby authorizes proxy holders to vote in their discretion on such
matters. The undersigned acknowledges receipt of the Notice of Meeting and Proxy
Statement dated __________, 1997.
Please sign exactly as your name or names appear below. When shares are held by
joint tenants, both should sign. If signing as attorney, executor, trustee or in
any other representative capacity, or as a corporate officer, please give full
title. Please date the proxy.
=======================================
Signature
Dated: _______________________, 1997
/_/ Check here if you plan to attend the Meeting. _______ persons will
attend.
