SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY REGISTRANT [ X ] FILED BY A PARTY OTHER THAN REGISTRANT [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
CMI High Yield Securities
(Name of Registrant as Specified In Its Charter)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No Fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of the filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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CIM HIGH YIELD SECURITIES
One Exchange Place
Boston, Massachusetts 02109
April 15, 1998
Dear Shareholder:
On May 27, 1998 at [______] (Eastern time) we will hold a special meeting
of shareholders of CIM High Yield Securities (the "Fund") for the following
purposes:
ITEM 1. To consider and vote on approval of a new Investment
Advisory Agreement between the Fund and Chancellor
LGT Asset Management, Inc.
ITEM 2. To transact such other business as may properly come before
the Special Meeting of Shareholders and any adjournments
thereof.
Complete information is contained in the enclosed Proxy Statement.
VOTING ONLY TAKES A FEW MINUTES - PLEASE RESPOND PROMPTLY.
As a shareholder, you cast one vote for each share that you own. Every
shareholder's vote is important, no matter how many shares you own.
Please take a few moments to read the enclosed materials and then cast
your vote on the enclosed proxy card. Item 1 has been carefully considered by
the Board of Trustees of the Fund, which is responsible for protecting your
interests as a shareholder. The Board of Trustees of the Fund believes that the
proposal is fair and reasonable and recommends that you vote in favor of the
proposal.
After you have voted, please be sure to SIGN YOUR PROXY CARD AND RETURN
IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
This is your opportunity to voice your opinion on matters affecting the
Fund. Your participation is extremely important, no matter how many or how few
shares you own.
We appreciate your prompt response. Thank you.
Sincerely,
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CIM HIGH YIELD SECURITIES
One Exchange Place
Boston, Massachusetts 02109
Telephone: (800) 331-1710
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held May 27, 1998
A Special Meeting of Shareholders of CIM HIGH YIELD SECURITIES (the
"Fund") will be held at the offices of Chancellor LGT Asset Management, Inc.,
1166 Avenue of the Americas, New York, New York 10036, on May 27, 1998 at
[______], Eastern time, for the following purposes:
ITEM 1. To consider and vote on approval of a new Investment
Advisory Agreement between the Fund and Chancellor
LGT Asset Management, Inc.
ITEM 2. To transact such other business as may properly come before
the Special Meeting of Shareholders and any adjournments
thereof.
THE BOARD OF TRUSTEES OF THE FUND RECOMMENDS THAT YOU VOTE IN FAVOR OF ITEM 1.
Only shareholders of record on April 8, 1998 will be entitled to vote at
the Special Meeting of Shareholders and at any adjournments thereof.
Gail A. Hanson
Secretary
April 15, 1998
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOU PROMPTLY VOTING, SIGNING AND
RETURNING THE ENCLOSED PROXY, WHICH WILL HELP AVOID THE ADDITIONAL EXPENSES OF
A SECOND SOLICITATION. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND
IS PROVIDED FOR YOUR CONVENIENCE.
<PAGE>
CIM HIGH YIELD SECURITIES
One Exchange Place
Boston, Massachusetts 02109
Telephone: (800) 331-1710
PROXY STATEMENT
This Proxy Statement and Notice of Special Meeting with accompanying form
of proxy are being mailed by the Board of Trustees of CIM High Yield Securities
(the "Fund") on or about April 15, 1998. They are being furnished in connection
with the solicitation of proxies by the Board of Trustees of the Fund for use
at the special meeting of shareholders of the Fund, or any adjournment thereof,
to be held at the offices of Chancellor LGT Asset Management, Inc., 1166 Avenue
of the Americas, New York, New York 10036, on May 27, 1998 [_____], Eastern
time (the "Meeting"), for the purposes set forth in the accompanying Notice of
Special Meeting.
The Fund's most recent annual and semi-annual reports have previously
been sent to shareholders and are available upon request, without charge, by
writing to First Data Investor Services Group, Inc., One Exchange Place, P.O.
Box 1376, Boston, Massachusetts, 02109 or calling 1-800-331-1710.
MANNER OF VOTING PROXIES
In order that your shares in the Fund may be represented at the Meeting,
you are requested to:
o indicate your instructions on the proxy card;
o date and sign the proxy card;
o mail the proxy card promptly in the enclosed envelope
which requires no postage if mailed in the continental
United States; and
o allow sufficient time for the proxy to be received on or before 5:00
p.m., on May 26, 1998.
If the enclosed proxy is properly executed and returned in time to be
voted at the Meeting, the shares represented by it will be voted in accordance
with the instructions marked on the proxy. Unless instructions to the contrary
are marked on a proxy, the proxy will be voted FOR proposed Item 1 and FOR any
other matters deemed appropriate. Proxies that reflect abstentions and "broker
non-votes" (i.e., shares held by brokers or nominees as to which (a)
instructions have not been received from the beneficial owners or the persons
entitled to vote and (b) the broker or nominee does not have discretionary
voting power on a particular matter) will be counted as shares that are present
and entitled to vote on the matter for purposes of determining the presence of
a quorum. For this reason, abstentions and broker non-votes have the effect of
a negative vote on a proposal. Any shareholder who has given a proxy has the
right to revoke it at any time prior to its exercise either by attending the
Meeting and voting his or her shares in person, or by submitting a letter of
revocation or a later-dated proxy to the Fund at the above address prior to the
date of the Meeting.
In the event that a quorum is not present at the Meeting, or in the event
that a quorum is present at the Meeting but sufficient votes to approve a
proposal are not received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of those shares
represented at the Meeting in person or by proxy. If a quorum is present, the
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persons named as proxies will vote those proxies which they are entitled to
vote FOR a proposal to be considered at the adjourned meeting in favor of such
an adjournment, and will vote those proxies required to be voted AGAINST a
proposal against any such adjournment. A shareholder vote may be taken on one
or more proposals prior to any such adjournment if sufficient votes have been
received for approval. Under the by-laws of the Fund, a quorum is constituted
by the presence in person or by proxy of the holders of more than 50% of the
outstanding shares of the Fund entitled to vote at the Meeting.
Proxy solicitations will be made primarily by mail, but such
solicitations may also be made by telephone, telegraph or personal interviews
conducted by officers or employees of the Fund, Chancellor LGT Asset
Management, Inc. ("Chancellor LGT"), the investment adviser of the Fund, and
First Data Investor Services Group, Inc. ("Investor Services Group"), the
administrator and transfer agent of the Fund, or any of their affiliates. The
costs of proxy solicitation and expenses incurred in connection with the
preparation of this Proxy Statement and its enclosures will be paid by
Chancellor LGT. Chancellor LGT will also reimburse brokerage firms and others
for their expenses in forwarding solicitation material to the beneficial owners
of Fund shares.
The close of business on April 8, 1998 has been fixed as the Record Date
for the determination of shareholders entitled to notice of and to vote at the
Meeting and all adjournments thereof. The Fund has one class of shares of
beneficial interest, par value $.01 per share. On the Record Date, there were
[_________] shares in the Fund outstanding (the "Shares"). Each of such Shares
is entitled to one vote at the Meeting, and fractional Shares are entitled to
proportionate shares of one vote.
INTERESTS OF CERTAIN PERSONS
To the knowledge of the Board of Trustees, as of the Record Date, no
single shareholder or "group" (as that the term is used in Section 13(d) of the
Securities Exchange Act of 1934) beneficially owned more than 5% of the Shares.
Information as to beneficial ownership is based on reports filed with the
Securities and Exchange Commission by such holders.
As of the Record Date, Cede & Co., a nominee partnership of Depositary
Trust Company, located at 7 Hanover Square, New York, New York 10004, held
[___________] or [_____%] of the Shares. Of the Shares held by Cede & Co.,
Smith Barney Inc., located at 388 Greenwich Street, New York, New York 10013,
held [___________] or [_____%]; Prudential Securities Incorporated, located at
100 Gold Street, New York, New York 10292 held [_________] or [____%];
Interstate/Johnson Lane Corporation located at Interstate Tower, P.O. Box 1012,
Charlotte, North Carolina 28201, held [_______] or [____%]; and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, located at North Tower, World Financial
Center, New York, New York 10281, held [________] or [____%].
As of the Record Date, the Trustees and officers as a group owned less
than 1% of the Shares.
ITEM 1. APPROVAL OR DISAPPROVAL OF NEW ADVISORY AGREEMENT
BACKGROUND
Chancellor LGT Asset Management, Inc. ("Chancellor LGT"), 1166 Avenue of
the Americas, New York, New York 10036, currently manages the assets of the
Fund pursuant to an Investment Advisory Agreement dated as of October 31, 1996
(the "Existing Advisory Agreement"). The Existing Advisory Agreement was most
recently approved by the Board of Trustees of the Fund, including a majority of
the Trustees who are not "interested persons," as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), of any party to such
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agreement (the "Independent Trustees") on August 8, 1996. Subject to the terms
of the Existing Advisory Agreement, Chancellor LGT acts as the adviser to the
Fund, furnishes an investment program for the Fund and determines what
securities shall be purchased, sold or exchanged by the Fund and what portion
of the assets of the Fund shall remain uninvested, subject always to the
restrictions of the Fund's Declaration of Trust and by-laws, the 1940 Act and
the Fund's investment objective and policies.
On January 30, 1998, Liechtenstein Global Trust, AG ("LGT"), the indirect
parent organization of Chancellor LGT, and LGT Holding (International) AG,
Zurich entered into an agreement (the "Purchase Agreement") with AMVESCAP PLC
("AMVESCAP") and AMD Acquisition Corp., a wholly-owned subsidiary of AMVESCAP,
pursuant to which AMVESCAP will acquire LGT's Asset Management Division, which
includes Chancellor LGT and its affiliates. Therefore, following AMVESCAP's
purchase of LGT's Asset Management Division (the "Purchase"), Chancellor LGT
will become a wholly-owned subsidiary of AMVESCAP.
As required by the 1940 Act, the Existing Advisory Agreement provides for
its automatic termination upon its assignment. The 1940 Act defines assignment
to include any direct or indirect transfer or hypothecation of a contract. The
Purchase will constitute an assignment (as defined in the 1940 Act) of the
Existing Advisory Agreement, and therefore will result in the automatic
termination of the Existing Advisory Agreement.
As required by the 1940 Act, shareholders of the Fund are being asked to
approve a new Investment Advisory Agreement (the "New Advisory Agreement"), to
be effective upon the consummation of the Purchase. Under the New Advisory
Agreement, Chancellor LGT (whose name will be changed following consummation of
the Purchase) will serve as the investment adviser to the Fund.
At a meeting held on April 8, 1998, the Board of Trustees of the Fund,
including a majority of the Independent Trustees, approved, subject to
shareholder approval, the New Advisory Agreement. In approving the New Advisory
Agreement, the Board of Trustees took into account a number of factors,
including that there are no material differences between the Existing Advisory
Agreement and the New Advisory Agreement. A description of the New Advisory
Agreement is provided below under "The Existing and New Advisory Agreements".
Such description is only a summary and is qualified by reference to the
attached Exhibit A. A summary of the Board of Trustees' considerations is
provided below under "The Evaluation by the Board of Trustees".
If the conditions set forth in the Purchase Agreement are not met or
waived or if the Purchase Agreement is terminated, the Purchase will not be
consummated and the Existing Advisory Agreement will remain in effect. If the
New Advisory Agreement is approved and the Purchase is thereafter consummated,
the New Advisory Agreement will be executed and become effective.
THE PURCHASE AGREEMENT
On January 30, 1998, LGT and LGT Holding (International) AG, Zurich
(together, the "Sellers") entered into the Purchase Agreement with AMVESCAP and
AMD Acquisition Corp., a wholly-owned subsidiary of AMVESCAP (the "Buyer"),
pursuant to which the Buyer will purchase the global asset management business
of the Sellers by acquiring all of the issued and outstanding shares of LGT
Holding Luxembourg SA, LGT (UK Holdings) PLC and LGT Bank in Liechtenstein Ltd.
(Cayman) and equity interests in LGT Verwaltungs GmbH (together with their
respective subsidiaries, the "Transferred Companies"). Under the Purchase
Agreement, the Buyer shall pay the Sellers $1.3 billion, which shall be (a)
reduced (or increased) to the extent that the closing tangible net worth of the
Transferred Companies at closing is less than (or greater than) zero, (b)
reduced to the extent that annualized asset management fees (without giving
effect to market and currency fluctuations) of the Transferred Companies at
closing, in respect of which client consents have been obtained, are less than
92.5% of base investment management fees, and (c) adjusted in respect of
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certain transaction-related fees and expenses (including, among other things,
mutual fund shareholder and other client consent costs). As a result, failure
by the shareholders of the Fund to approve the New Advisory Agreement may
result in the Buyer paying, and the Sellers receiving, a lower amount for the
sale of the Transferred Companies, but will not necessarily preclude the
consummation of the Purchase.
The consummation of the Purchase is expected to occur on or about May 29,
1998 subject to the satisfaction or waiver of certain conditions that include,
among other things: (a) the annualized asset management fees (without giving
effect to market and currency fluctuations) being at least 60% of base
management fees, (b) approval of the Purchase by AMVESCAP shareholders, (c)
certain governmental approvals and other third party consents having been
received, (d) representations and warranties made by the parties being true and
correct in all material respects at the closing, and (e) no party being subject
to any order prohibiting the consummation of the Purchase.
The Purchase Agreement may be terminated at any time prior to closing (a)
by the mutual consent of the Buyer and LGT, (b) by written notice by any party
after September 30, 1998, (c) by the Sellers if, by a specified date,
AMVESCAP's shareholders have not approved the transaction, or (d) under the
other circumstances set forth in the Purchase Agreement.
THE EXISTING AND NEW ADVISORY AGREEMENTS
The Existing Advisory Agreement between the Fund and Chancellor LGT was
executed as of October 31, 1996 and was last approved by the Trustees,
including a majority of the Independent Trustees, at a meeting of the Board of
Trustees on August 12, 1996. The Existing Advisory Agreement was last approved
by shareholders on September 25, 1996. If the New Advisory Agreement is
approved by the required shareholders of the Fund, as described herein, upon
the consummation of the Purchase, Chancellor LGT, as a wholly-owned subsidiary
of AMVESCAP, will serve as the investment adviser to the Fund and will provide
the same services to the Fund as are currently provided to the Fund by
Chancellor LGT under the Existing Advisory Agreement. Except for the effective
and termination dates, the terms of the New Advisory Agreement are identical in
all material respects to the terms of the Existing Advisory Agreement. The New
Advisory Agreement is attached to this Proxy Statement as Exhibit A and the
description of the New Advisory Agreement set forth in this Proxy Statement is
qualified in its entirety by reference to Exhibit A.
Under the New Advisory Agreement, just as under the Existing Advisory
Agreement, Chancellor LGT will provide the Fund with such investment advice and
supervision as the Fund may from time to time consider necessary for the proper
supervision of its investment assets. Like the Existing Advisory Agreement,
under the New Advisory Agreement Chancellor LGT will furnish continuously an
investment program and will determine from time to time what securities shall
be purchased, sold or exchanged and what portion of the assets of the Fund will
be held uninvested, subject always to the restrictions of the Fund's
Declaration of Trust and by-laws, as each may be amended from time to time, to
the provisions of the 1940 Act, and to the Fund's investment objective and
policies and restrictions, as such investment objective and policies and
restrictions may be modified from time to time by the Trustees or the
shareholders. As under the Existing Advisory Agreement, Chancellor LGT will
also make recommendations as to the manner in which voting rights, rights to
consent to corporate action and any other rights pertaining to the Fund's
portfolio securities shall be exercised. Should the Board of Trustees of the
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Fund at any time make any definite determination as to an investment policy
applicable to the Fund and notify Chancellor LGT thereof in writing, Chancellor
LGT will be bound by such determination for the period, if any, specified in
such notice or until similarly notified that such determination has been
revoked. As under the Existing Advisory Agreement, Chancellor LGT will take, on
behalf of the Fund, all actions which it deems necessary to implement the
investment policies determined as provided above, and in particular to place
all orders for the purchase or sale of portfolio securities for the Fund's
account with brokers and dealers selected by it, and to that end Chancellor LGT
will be authorized as the agent of the Fund to give instructions to the
custodian of the Fund as to deliveries of securities and payments of cash for
the account of the Fund. In connection with the selection of such brokers or
dealers and placing of such orders, Chancellor LGT will be directed to seek for
the Fund, in its best judgment, prompt execution in an effective manner at the
most favorable price, except that Chancellor LGT may cause the Fund to pay a
broker-dealer which provides brokerage and research services to Chancellor LGT
an amount of commission for effecting a securities transaction for the Fund in
excess of the amount other broker-dealers would have charged for the
transaction if Chancellor LGT determines in good faith that the greater
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker-dealer viewed in terms of either a
particular transaction or Chancellor LGT's overall responsibilities to the Fund
or to its other clients.
Pursuant to its terms, subject to shareholder approval, the New Advisory
Agreement will become effective upon the consummation of the Purchase. The New
Advisory Agreement shall remain in force for two years from the date of its
effectiveness, and thereafter it will terminate unless its continuance is
specifically approved at least annually (a) by the vote of a majority of the
Independent Trustees at a meeting specifically called for the purpose of voting
on such approval and (b) by the Board of Trustees of the Fund or by vote of a
majority of the outstanding voting securities of the Fund. The New Advisory
Agreement, like the Existing Advisory Agreement, is terminable without penalty
on not more than 60 days' nor less than 30 days' written notice to the other
party. The New Advisory Agreement, like the Existing Advisory Agreement, will
terminate automatically in the event of its assignment.
INVESTMENT ADVISORY FEE
The fees under the New Advisory Agreement are the same as the fees under
the Existing Advisory Agreement. Under the New Advisory Agreement, the Fund
will pay Chancellor LGT, as compensation for investment advisory services
rendered, a monthly fee at the annual rate of .50% of the Fund's average weekly
net assets. This fee is identical to that currently being paid to Chancellor
LGT for services rendered under the Existing Advisory Agreement.
As noted above, the Fund pays Chancellor LGT a fee, computed and payable
monthly, at the annual rate of .50% of the Fund's average weekly net assets.
During the fiscal year ended December 31, 1997, the Fund paid investment
advisory fees to Chancellor LGT amounting to $221,145. Neither Chancellor LGT
nor any affiliated person of Chancellor LGT nor any affiliated person of such
person received any other fees from the Fund for services provided to the Fund
or any other material payments from the Fund during the fiscal year ended
December 31, 1997.
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INFORMATION REGARDING CHANCELLOR LGT AND AMVESCAP
Chancellor LGT, a California corporation, was formed in 1996 as a result
of the merger between LGT Asset Management, Inc., a wholly-owned subsidiary of
LGT, and Chancellor Capital Management, Inc., a wholly-owned subsidiary of LGT
which was acquired by LGT in 1996. Chancellor LGT is a wholly-owned subsidiary
of LGT. The principal address of Chancellor LGT is 1166 Avenue of the Americas,
New York, New York 10036. LGT is comprised of Chancellor LGT and its worldwide
affiliates, including LGT Bank in Liechtenstein, formerly Bank of
Liechtenstein. LGT is a provider of global asset management and private banking
products and services to individual and institutional investors. LGT is
controlled by the Prince of Liechtenstein Foundation, which serves as the
parent organization for the various business enterprises of the Princely Family
of Liechtenstein. The principal business address of the Prince of Liechtenstein
Foundation is Herrengasse 12, FL-9490, Vaduz, Liechtenstein. As of December 31,
1997, total assets under management by Chancellor LGT were approximately
[$__________], [$_________] of which were assets of registered investment
companies.
After the consummation of the Purchase, Chancellor LGT will be an
indirect, wholly-owned subsidiary of AMVESCAP, a [public limited company]
organized under the laws of the United Kingdom. AMVESCAP's principal address is
[________________]. AMVESCAP is a holding company that offers a broad array of
investment products and services to institutions and individuals through its
subsidiaries AIM Management Group, Inc. and INVESCO, Inc.
("INVESCO").
After the consummation of the Purchase, Chancellor LGT will be a direct,
wholly-owned subsidiary of INVESCO, a [_______________] corporation. INVESCO's
principal address is [_________________________]. INVESCO has a presence in the
institutional investment management and mutual fund business in North America,
Europe, Hong Kong and Japan, as well as being a provider of 401K and defined
contribution plan services. INVESCO manages portfolios of equity, balanced,
fixed-income, money market and real estate investments for institutional
investors, retail investors and high net worth individuals.
Listed below are the names, positions and principal occupations of the
individuals who are expected to serve as directors and the principal executive
officer of Chancellor LGT after the consummation of the Purchase:
Position and Offices
Name with Chancellor LGT Other Employment
There have been no purchases or sales of any interests in Chancellor LGT
or AMVESCAP or any of Chancellor LGT's or AMVESCAP's subsidiaries since the
beginning of the most recently completed fiscal year by any of the Trustees of
the Fund. No officer or Trustee of the Fund is an officer, employee, director
or shareholder of Chancellor LGT or AMVESCAP or has any other material direct
or indirect interest in Chancellor LGT or AMVESCAP or any other person
controlling, controlled by or under common control with Chancellor LGT or
AMVESCAP, except that Kevin Rogers, the Vice President of the Fund, Margaret A.
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Riley, the Treasurer of the Fund, and Julio Garcia, the Assistant Treasurer of
the Fund, are employees of Chancellor LGT and Robert G. Wade, Jr., the
President of the Fund and a Trustee of the Fund, serves as a consultant to
Chancellor LGT. Since January 1, 1998, none of the Trustees of the Fund has had
any material interest, direct or indirect, in any material transactions, or in
any material proposed transactions, to which Chancellor LGT, AMVESCAP or any
subsidiary of Chancellor LGT or AMVESCAP was or is to be a party. [CONFIRM.]
Chancellor LGT does not manage the assets of any other investment company
having a similar investment objective as the Fund.
THE EVALUATION BY THE BOARD OF TRUSTEES
The Board of Trustees of the Fund has determined that, by approving the
New Advisory Agreement, the Fund can best assure itself that services now being
provided by Chancellor LGT will continue to be provided without interruption.
At a meeting held on April 8, 1998, the Board of Trustees considered
whether the New Advisory Agreement with Chancellor LGT was in the best
interests of the Fund and its shareholders. After a presentation of information
on this matter and detailed discussion, the Trustees, including a majority of
the Independent Trustees, approved the New Advisory Agreement with Chancellor
LGT and voted to recommend its approval by the Fund's shareholders. In making
these determinations, the Trustees considered, among other factors, that the
advisory fee would not change under the New Advisory Agreement, that the terms
of the New Advisory Agreement would be substantially the same as the terms of
the Existing Advisory Agreement, the terms of the Purchase Agreement, and that
the Fund would not be subject to an unfair burden as a result of the
transaction.
The Trustees also considered, as they have in the past, the nature and
quality of services expected to be provided by Chancellor LGT after the
Purchase and information regarding fees, expense ratios and performance. In
evaluating Chancellor LGT's ability to provide advisory services to the Fund
after the Purchase, the Trustees noted that certain key personnel that had
provided advisory services to the Fund as employees of Chancellor LGT were no
longer employed by Chancellor LGT. As a result, the Trustees considered
carefully the experience and qualifications of the personnel that would be
involved with the Fund and the extent to which Chancellor LGT's personnel and
resources would be enhanced by the personnel and resources of AMVESCAP and its
subsidiaries. The Trustees also considered AMVESCAP's business organization,
financial resources and personnel and other matters including the history,
reputation, qualification and background of AMVESCAP and its subsidiaries and
the benefits expected to be realized as a result of Chancellor LGT's
affiliation with AMVESCAP. After considering these matters, the Trustees
concluded that the investment advisory operations of Chancellor LGT would not
be materially affected as a result of the loss of key personnel at Chancellor
LGT or as a result of the Purchase.
RECOMMENDATION AND REQUIRED VOTE
Based upon its review, the Board of Trustees of the Fund concluded that
the New Advisory Agreement is reasonable, fair and in the best interests of the
Fund and its shareholders, and that the fees provided in the New Advisory
Agreement are fair and reasonable in light of the usual and customary charges
made by others for services of the same nature and quality. Accordingly, after
consideration of the above factors, and such other factors and information as
it deemed relevant, the Board of Trustees of the Fund, including all of the
Independent Trustees, unanimously approved the New Advisory Agreement and voted
to recommend its approval by the shareholders of the Fund.
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Approval of the New Advisory Agreement will require the approval of "a
majority of the outstanding voting securities" (as defined below) of the Fund
present in person or represented by proxy at a meeting of the shareholders of
the Fund. Under the 1940 Act, a "majority of the outstanding voting securities"
of an issuer means the affirmative vote by the lesser of (a) 67% or more of the
issuer's voting securities present at a meeting if the holders of more than 50%
of the issuer's outstanding voting securities are present in person or
represented by proxy or (b) more than 50% of the issuer's outstanding voting
securities.
Because the consummation of the Purchase is not contingent on the
approval of the New Advisory Agreement by the Fund's shareholders, it is
possible that the Purchase will be consummated even if the New Advisory
Agreement is not approved. In such a case, Chancellor LGT would be acquired by
AMVESCAP and the Existing Advisory Agreement would automatically terminate. As
a result, the Board of Trustees of the Fund would need to make new arrangements
for obtaining advisory services, subject to approval in accordance with the
1940 Act. In the event that the Purchase is not consummated, the Existing
Advisory Agreement will remain in effect.
THE BOARD OF TRUSTEES OF THE FUND RECOMMENDS THAT THE SHAREHOLDERS OF THE FUND
VOTE FOR APPROVAL OF THE NEW ADVISORY AGREEMENT.
ITEM 2. OTHER BUSINESS
The management of the Fund knows of no other business to be presented at
the Meeting. If any additional matters should be properly presented, it is
intended that the enclosed proxy (if not limited to the contrary) will be voted
in accordance with the judgment of the persons named in such proxy.
ADDITIONAL INFORMATION
First Data Investor Services Group, Inc. ("Investor Services Group"), the
Fund's administrator, is a wholly-owned subsidiary of First Data Corporation.
Investor Services Group is located at One Exchange Place, Boston, Massachusetts
02109. First Data Corporation is located at 5660 New Northside Drive, Atlanta,
Georgia 30328.
For the most recently completed fiscal year of the Fund, no commissions
were paid to any broker that (a) is an affiliated person of the Fund, or (b) is
affiliated with any such person described in clause (a) of this paragraph, or
(c) an affiliated person of which is an affiliated person of the Fund,
Chancellor LGT, AMVESCAP or Investor Services Group. [CONFIRM.]
DATE TO SUBMIT SHAREHOLDER PROPOSALS
A shareholder proposal intended to be presented at the Fund's 1998 Annual
Meeting must be received by the Fund on or before [___________], 1998 in order
to be considered for inclusion in the Fund's proxy statement and form of proxy
relating to that meeting.
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YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE
ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
April 15, 1998
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PROXY CARD PROXY CARD
CIM HIGH YIELD SECURITIES
A PROXY FOR A SPECIAL MEETING
OF SHAREHOLDERS TO BE HELD MAY 27, 1998
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of [_________________], or any of them, as Proxies of the undersigned with
full power of substitution, to vote on behalf of all of the undersigned all
shares in the CIM High Yield Securities (the "Fund"), which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at the offices of Chancellor LGT Asset Management, Inc., 1166 Avenue of the
Americas, New York, New York 10036 on May 27, 1998, at [_____], Eastern time,
and at any adjournment thereof, as fully as the undersigned would be entitled
to vote if personally present, as follows:
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL.
1. To consider and vote on approval of a new Investment Advisory Agreement
between the Fund and Chancellor LGT Asset Management, Inc.
______FOR _____AGAINST ______ABSTAIN
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSALS
FOR WHICH NO CHOICE IS INDICATED.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON
SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
Date:_______________ ___________________________________
Signature
___________________________________
Signature of joint owner, if any
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD
When signing as attorney, executor, administrator, trustee, guardian or
as custodian for a minor, please sign your name and give your full title as
such. If signing on behalf of a corporation, please sign the full corporate
name and your name and indicate your title. If you are a partner signing for a
partnership, please sign the partnership name and your name. Joint owners
should each sign this proxy. Please sign, date and return in the enclosed
envelope.
EXHIBIT A
FORM OF
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated ___________, 1998, by and between
CIM High Yield Securities, a Massachusetts business trust (the "Fund"), and
Chancellor LGT Asset Management, Inc.
(the "Adviser or Chancellor LGT").
WITNESSETH:
WHEREAS, the Fund is engaged in business as a closed-end investment
company registered under the Investment Company Act of 1940 (collectively with
the rules and regulations promulgated thereunder, the "1940 Act"); and
WHEREAS, the Fund's current investment advisory agreement dated October
31, 1996 with Chancellor LGT will terminate upon the completion of the
acquisition of the Asset Management Division of the Liechtenstein Global Trust,
including its subsidiary Chancellor LGT, by Amvescap, PLC (the "Transaction");
and
WHEREAS, the Fund wishes to engage the Adviser to provide certain
investment advisory services for the Fund, and the Adviser is willing to
provide such investment advisory services for the Fund on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of the Adviser. The Adviser shall provide the Fund with such
investment advice and supervision as the latter may from time to time consider
necessary for the proper supervision of its investment assets. Chancellor LGT
shall act as the Adviser for the Fund and as such shall furnish continuously an
investment program and shall determine from time to time what securities shall
be purchased, sold or exchanged and what portion of the assets of the Fund
shall be held uninvested, subject always to the restrictions of the Fund's
Declaration of Trust, dated September 11, 1987, and By-laws, as each may be
amended from time to time (respectively, the "Declaration" and the "By-Laws"),
to the provisions of the 1940 Act, and to the Fund's investment objective and
policies and restrictions as described in the Fund's Registration Statement on
Form N-2 filed with the Securities and Exchange Commission ("SEC"), as such
investment objective and policies and restrictions may be modified from time to
time by the Trustees or the shareholders. The Adviser shall also make
recommendations as to the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the Fund's portfolio
securities shall be exercised. Should the Board of Trustees of the Fund at any
time, however, make any definite determination as to investment policy
applicable to the Fund and notify the Adviser thereof in writing, the Adviser
shall be bound by such determination for the period, if any, specified in such
notice or until similarly notified that such determination has been revoked.
<PAGE>
The Adviser shall take, on behalf of the Fund, all actions which it deems
necessary to implement the investment policies determined as provided above,
and in particular to place all orders for the purchase or sale of portfolio
securities for the Fund's account with brokers or dealers selected by it, and
to that end the Adviser is authorized as the agent of the Fund to give account
of the Fund. In connection with the selection of such brokers or dealers and
the placing of such orders, the Adviser is directed to seek for the Fund, in
its best judgment, prompt execution in an effective manner at the most
favorable price, except that the Adviser may cause the Fund to pay a
broker-dealer which provides brokerage and research services to the Adviser an
amount of commission for effecting a securities transaction for the Fund in
excess of the amount other broker-dealers would have charged for the
transaction if the Adviser determines in good faith that the greater commission
is reasonable in relation to the value of the brokerage and research services
provided by the executing broker-dealer viewed in terms of either a particular
transaction or the Adviser's overall responsibilities to the Fund or to its
other clients.
2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense all necessary services, facilities and personnel in connection with
its responsibilities under Section I above. It is understood that the Fund will
pay from its own assets all of its own expenses allocable to it including,
without limitation, compensation of Trustees not "affiliated" with the Adviser
or with First Data Investor Services Group, Inc., the Fund's administrator (the
"Administrator"): fees of the Adviser and the Administrator: governmental fees;
interest charges; taxes; fees and expenses of independent auditors, of legal
counsel and of any transfer agent, registrar or dividend disbursing agent of
the Fund: expenses of repurchasing shares; expenses of preparing, printing and
mailing share certificates, shareholder reports, notices, proxy statements and
reports to governmental officers and commissions; brokerage and other expenses
connected with the execution, recording and settlement of portfolio security
transactions; insurance premiums; fees and expenses of the Fund's custodian for
all services to the Fund, including safekeeping of funds and securities and
maintaining required books and accounts; expenses of calculating the net asset
value of the Fund's shares; expenses of shareholder meetings; expenses in
connection with any dividend reinvestment plan; SEC and state blue sky
registration fees; American Stock Exchange listing fees; and fees payable to
the National Association of Securities Dealers, Inc. in connection with the
public offering of the Fund's shares.
3. Compensation of the Adviser. For the services to be rendered, the Fund
shall pay to the Adviser from the assets of the Fund an investment advisory fee
computed and paid monthly in an amount equal of 0.50% per annum of the Fund's
average weekly net asset value. For purposes of determining the monthly fee,
average weekly net asset value is the average of the determinations of net
asset value for each week the last business day of which occurs during such
month. If Chancellor LGT serves as Adviser for less than the whole of any
period specified in this Section 3, the compensation to Chancellor LGT, as
Adviser, shall be prorated.
4. Covenants of the Adviser. The Adviser agrees that it will deal with
itself, or with the Trustees of the Fund or with the Fund's principal
underwriters or distributor, as principals in making purchases or sales of
<PAGE>
securities or other property for the account of the Fund, only as permitted by
the 1940 Act or any exemptive order issued by the SEC thereunder. The Adviser
agrees that it will not take a long or short position in shares of the Fund
except as permitted by the Declaration, and it will comply with all other
provisions of the Declaration and By-Laws and the then-current policies
applicable to the Fund relative to the Adviser and its directors and officers.
The Adviser will comply with any federal or state securities law applicable to
it by virtue of its acting as Adviser hereunder.
5. Limitation of Liability of the Adviser. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the execution of portfolio
transactions for the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder. As used in this Section 5, the term
"Adviser" shall include directors, officers and employees of the Adviser as
well as the association itself.
6. Activities of the Adviser. The services of the Adviser to the Fund are
not to be deemed to be exclusive, Chancellor LGT being free to render
investment advisory and/or other services to others. The Adviser may permit
other investment company clients to use in their names the same initials used
in the Fund's name. The Fund agrees that if the Adviser shall for any reason no
longer serve as the Adviser to the Fund, the Fund will change its name so as to
delete the initials "CIM" or any reference to Chancellor LGT. It is understood
that Trustees, officers, and shareholders of the Fund are or may be or may
become "interested persons" of the Adviser are or may become "interested
persons" of the Fund and that the Adviser may be or may become an "interested
person" of the Fund as a shareholder or otherwise.
7. Duration, Termination and Amendments of This Agreement. This Agreement
shall become effective on the closing date of the Transaction. This Agreement
shall govern the relations between the parties hereto and shall remain in force
for two years from the date of its effectiveness, and thereafter it will
terminate unless its continuance is "specifically approved at least annually"
(a) by the vote of a majority of the Trustees of the Fund who are not
"interested persons" of the Fund or of the Adviser at a meeting specifically
called for the purpose of voting on such approval, and (b) by the Board of
Trustees of the Fund or by "vote of a majority of the outstanding voting
securities" of the Fund.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the "vote of a majority of the outstanding voting
securities" of the Fund, or by the Adviser, in each case on not more than 60
days' nor less than 30 days' written notice to the other party. This Agreement
shall automatically terminate in the event of its "assignment".
This Agreement may be amended only if such amendment is approved by the
"vote of a majority of the outstanding voting securities" of the Fund.
<PAGE>
This Agreement is made by the Trustees not individually, but as such
Trustees, and the obligations of the Trust under this Agreement are not binding
upon any trustee, shareholder, officer or agent of the Trust individually, but
bind only the Trust estate.
The terms "specifically approved at least annually", "vote of a majority
of the outstanding voting securities", "assignment", "affiliated person", and
"interested persons", when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
To the extent not governed by applicable federal law, this Agreement
shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
CIM HIGH YIELD SECURITIES
By:____________________________________
Title: Chairman of the Board of Trustees
CHANCELLOR LGT ASSET
MANAGEMENT, INC.
By:____________________________________
Title:
