(File Nos. 33-32595 and 811-05978)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
G.T. GLOBAL EASTERN EUROPE FUND
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction
applies:
______________________________
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 its filing.
1) Amount Previously Paid:
______________________________
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2) Form, Schedule or Registration Statement No.:
______________________________
3) Filing Party:
______________________________
4) Date Filed:
______________________________
<PAGE>
PRELIMINARY COPY
GT GLOBAL
A World of Opportunity
GT GLOBAL ANNUAL MEETING OF SHAREHOLDERS
50 California Street
27th Floor
San Francisco, CA 94111
MARCH XX, 1998
DEAR SHAREHOLDER:
As you may be aware, the financial industry has seen many mergers and
acquisitions over the last few years. A number of well-known, high profile
organizations recently have been involved in such endeavors, with the net result
of building even stronger companies with even greater resources. In this same
vein is the pending acquisition of GT Global and its sister divisions - LGT
Asset Management and Chancellor LGT Asset Management, collectively known as the
Asset Management Division (AMD) of Liechtenstein Global Trust - by AMVESCAP PLC,
the parent corporation of A I M Management Group and INVESCO. At the annual
meeting of G.T. Global Eastern Europe Fund Shareholders on May 20, 1998, the
shareholders will consider certain matters relating to the acquisition.
Attached is the Notice and Proxy Statement(s) for the Annual Meeting which
describe a number of matters on which you, the Shareholder, are being asked to
vote: (i) election of certain Trustees of the Fund; (ii) approval of a new
investment management agreement and a sub-advisory agreement for the Fund; (iii)
approval of changes to the fundamental investment restrictions of the Fund; (iv)
ratification of the selection of independent accountants. THE FUND'S BOARD
UNANIMOUSLY RECOMMENDS THAT YOU APPROVE THESE PROPOSALS.
The proposed acquisition of the AMD by AMVESCAP offers the following
opportunities for Shareholders of the GT Global Eastern Europe Fund:
o Continuity of GT Global Eastern Europe Fund objectives, policies and
procedures.
o Expanded investment team strength to manage your investments.
o Business synergies between the two organizations, including global brand
enhancement and broadened geographic coverage.
Your vote is important. Please take a moment now to sign and return your proxy
card(s) in the enclosed postage-paid envelope. If we do not hear from you after
a reasonable amount of time, you may receive a telephone call from our proxy
solicitor, Shareholder Communications Corporation, reminding you to vote your
shares. If you have any questions concerning the proposals to be considered at
the annual meeting of G.T. Global Eastern Europe Fund Shareholders on May 20,
1998, please contact the Fund's Transfer Agent at 1-800-xxx-xxxx.
Sincerely,
William J. Guilfoyle
CHAIRMAN OF THE BOARD AND PRESIDENT
<PAGE>
IMPORTANT NEWS FOR G.T. GLOBAL EASTERN EUROPE FUND SHAREHOLDERS
We encourage you to read the attached proxy statement in full; however, the
following questions and answers represent some typical concerns that
shareholders might have regarding this proxy statement.
WHY HAVE I BEEN SENT THIS PROXY STATEMENT?
As you may know, AMVESCAP, the parent corporation of AIM Management Group Inc.
and INVESCO Plc., has entered into an agreement with Liechtenstein Global Trust
("LGT") pursuant to which AMVESCAP will acquire LGT's Asset Management Division,
which includes Chancellor LGT Asset Management, Inc. and GT Global, Inc. In
connection with this acquisition, certain changes are being recommended with
respect to G.T. Global Eastern Europe Fund (the "Fund") which may only be
implemented if approved by shareholders.
WHAT AM I BEING ASKED TO VOTE ON?
The proposals you are being asked to vote on are:
1. Election of certain members of the Board of Trustees
2. Approval of a new investment management agreement
3. Approval of a sub-advisory agreement
4. Approval of changes to the fundamental investment restrictions
5. Ratification of the selection of independent public accountants
HOW WILL THE ACQUISITION OF LGT'S ASSET MANAGEMENT DIVISION BY AMVESCAP AFFECT
ME?
The Board of the Fund believes that the acquisition will be beneficial to
shareholders of the Fund for a number of reasons, including:
o AIM's performance record as an investment manager and reputation in
the industry
o The additional financial and investment resources supplied by AIM
o The additional shareholder service support provided by the larger
organization
WILL THE INVESTMENT OBJECTIVES OF MY FUND CHANGE?
The investment objective of your Fund will not change.
HOW WILL THE EXPENSES FOR MY FUND BE AFFECTED?
The fees and expenses payable by your Fund are not expected to increase as a
result of any of the changes you are voting on.
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HOW DOES THE BOARD RECOMMEND THAT I VOTE?
The Board recommends that you vote FOR all of the proposals on the enclosed
proxy card.
HOW DO I VOTE?
You may indicate your vote on the enclosed proxy card and return it in the
postpaid envelope provided
OR
You may fax the proxy card to (Shareholder Communications fax number)
You may call in your vote to Shareholder Communications at (SC 800 number)
WHEN IS THE DEADLINE FOR VOTING?
All votes must be received by May 20, the date of the Shareholder Meeting.
However, to prevent additional costs from being incurred, it is important that
you cast your vote as soon as possible. If we do not hear from you, you may
receive a call from our proxy solicitor, Shareholder Communications Corporation,
requesting that you vote your shares.
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PRELIMINARY COPY
G.T. GLOBAL EASTERN EUROPE FUND
50 CALIFORNIA STREET
27TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1998
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of G.T. Global Eastern Europe Fund (the "Fund") will be held at 50
California Street, 27th Floor, San Francisco, California, on May 20, 1998, at
[ ] a.m., Pacific time, for the following purposes:
(1) To elect Trustees of the Trust;
(2) To approve a new investment management agreement and sub-advisory
agreement with respect to the Fund;
(3) To approve changes to the fundamental investment restrictions of the
Fund;
(4) To ratify the selection of Coopers & Lybrand L.L.P. as the Fund's
independent public accountants; and
(5) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
Shareholders of record at the close of business on March 17, 1998, are
entitled to notice of, and to vote at, the Meeting. Your attention is called to
the accompanying Proxy Statement. Whether or not you attend the Meeting, we urge
you to PROMPTLY COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY CARD, so that a
quorum will be present and a maximum number of shares may be voted.
BY ORDER OF THE BOARD OF TRUSTEES,
HELGE KRIST LEE
SECRETARY
SAN FRANCISCO, CALIFORNIA
MARCH 31, 1998
- --------------------------------------------------------------------------------
YOUR VOTE IS VERY IMPORTANT. BY PROMPTLY COMPLETING, SIGNING AND RETURNING THE
ENCLOSED PROXY CARD YOU WILL HELP YOUR FUND AVOID THE SUBSTANTIAL ADDITIONAL
EXPENSES OF MAKING FURTHER SOLICITATIONS.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
G.T. GLOBAL EASTERN EUROPE FUND
50 CALIFORNIA STREET
27TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111
---------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 20, 1998
---------------------
This Proxy Statement is being furnished to shareholders in connection with
the solicitation of proxies by the Board of Trustees of G.T. Global Eastern
Europe Fund (the "Fund"). These proxies are to be used at the Annual Meeting of
Shareholders and at any adjournment thereof (the "Meeting") to be held at the
offices of the Fund, 50 California Street, 27th Floor, San Francisco, California
94111, on May 20, 1998, at [ ] a.m. Pacific time. Only shareholders of record at
the close of business on March 17, 1998 ("Shareholders"), are entitled to notice
of and to vote at the Meeting. Copies of this Proxy Statement and the
accompanying materials will first be mailed to Shareholders on or about March
31, 1998.
If the accompanying proxy card is properly executed and returned by a
Shareholder in time to be voted at the Special Meeting, the shares covered
thereby will be voted in accordance with the instructions marked thereon by the
Shareholder. Executed proxies that are unmarked will be voted in favor of the
nominees for trustee; in accordance with the recommendation of the Board of
Trustees as to all other proposals described in this Proxy Statement and, at the
discretion of the proxyholders, on any other matter that may properly have come
before the Meeting or any adjournments thereof. Any proxy given pursuant to this
solicitation may be revoked at any time before its exercise by giving written
notice to the Secretary of the Fund or by the issuance of a subsequent proxy. To
be effective, such revocation must be received by the Secretary of the Fund
prior to the Meeting. In addition, a Shareholder may revoke a proxy by attending
the Meeting and voting in person. The solicitation of proxies will be made
primarily by mail but also may be made by telephone, telegraph, telecopy and
personal interviews. Authorization to execute proxies may be obtained by
telephonic or electronically transmitted instructions.
The presence in person or by proxy of shareholders entitled to cast a
majority of all the votes entitled to be cast at the Meeting shall constitute a
quorum at the Meeting. If a quorum is not present at the Meeting or if a quorum
is present but sufficient votes to approve any of the proposals described in the
Proxy Statement are not received, the persons named as proxies may propose one
or more adjournments of the Meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority of those
shares represented at the Meeting in person or by proxy. A shareholder vote may
be taken on one or more of the proposals in this Proxy Statement prior to any
such adjournment if sufficient votes have been received and it is otherwise
appropriate. Each full share of the Fund outstanding is entitled to one vote,
and each fractional share of the Fund outstanding is entitled to a proportionate
share of one vote.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and the broker does not have discretionary voting
authority. Abstentions and broker non-votes will be counted as shares present
for purposes of determining whether a quorum is present, but will not be voted
for or against any adjournment or proposal or for or against any adjournment to
permit further solicitation of proxies. Accordingly, abstentions and broker
non-votes effectively will be a vote against adjournment or against any proposal
where the required vote is a percentage of the shares present or outstanding.
Abstentions and broker non-votes will not be counted, however, as votes cast for
purposes of determining whether sufficient votes have been received to approve a
proposal.
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As of the record date, March 17, 1998 ("Record Date"), there were
__________ shares of beneficial interest in the Fund. To the knowledge of the
Fund's management, as of the record date, there are no owners of 5% or more of
the outstanding shares of the Fund [except ________].
PROPOSAL NO. 1: ELECTION OF TRUSTEES
The Fund's Trustees, all of whom are listed below, are divided into three
classes. Upon expiration of the initial term of office of each Trustee, a
Trustee elected to succeed the Trustee whose term of office expires shall be
elected for a term expiring on the date of the third annual meeting of
shareholders or special meeting in lieu thereof following his or her election.
The term of the Class 2 Trustees expires in 1998. The terms of Class 3 and 1
Trustees will expire in 1999 and 2000, respectively. It is proposed that the
Class 2 Trustees be elected at the Meeting to serve for terms expiring in 2000.
In addition, it is proposed that Mr. Guilfoyle, who has not previously been
elected by shareholders, be elected at the Meeting to serve the remaining
portion of his current term which expires in 1999.
It is the intention of each proxyholder named on the accompanying proxy
card to vote FOR the election of the nominees listed below unless the
Shareholder specifically indicates on his or her proxy card a desire to withhold
authority to vote for any nominee. The Board of Trustees does not contemplate
that any nominee, who has consented to being nominated, will be unable to serve
as Trustees for any reason, but if that should occur prior to the Meeting, the
proxies will be voted for such other nominee(s) as the Board may recommend.
The Trustees, with the execution of Mr. Guilfoyle and Mr. Wade have
served as Trustees since the Fund's commencement of operations in March
1990. Mr. Wade has served as a Trustee since January 1997 and Mr. Guilfoyle,
President of GT Global, Inc. ("GT Global"), the principal distributor of the
GT Global Mutual Funds, has served as a Trustee since February 1997.
INFORMATION REGARDING NOMINEES FOR ELECTION AT THE ANNUAL MEETING
SHARES OF THE
FUND
POSITION(S) BENEFICIALLY
NAME, AGE, BUSINESS EXPERIENCE DURING THE WITH OWNED DIRECTLY
PAST FIVE THE FUND OR INDIRECTLY ON
YEARS AND OTHER DIRECTORSHIPS MARCH 17, 1998
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CLASS 2 - TERM EXPIRES 1998 Trustee
Arthur C. Patterson, Age 54
Mr. Patterson is a Managing Partner, Accel
Partners (a venture capital firm). He also
serves as a director of Viasoft and
PageMart, Inc. (both public software
companies), as well as several other
privately held software and communications
companies. Mr. Patterson also is a director
or trustee of each of the other investment
companies registered under the 1940 Act that
is managed or administered by Chancellor LGT.
Ruth H. Quigley, Age 62 Trustee
Miss Quigley is a private investor. From
1984 to 1986, she was President of Quigley
Friedlander & Co., Inc. (a financial
advisory services firm). Miss Quigley also
is a director or trustee of each of the
other investment companies registered under
the 1940 Act that is managed or administered
by Chancellor LGT.
3
<PAGE>
SHARES OF THE
FUND
POSITION(S) BENEFICIALLY
NAME, AGE, BUSINESS EXPERIENCE DURING THE WITH OWNED DIRECTLY
PAST FIVE THE FUND OR INDIRECTLY ON
YEARS AND OTHER DIRECTORSHIPS MARCH 17, 1998
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CLASS 3 - TERM EXPIRES 1999 Trustee and
William J. Guilfoyle, Age 39* Chairman of
Mr. Guilfoyle is President, GT Global since the Board
1995; Director, GT Global since 1991; Senior
Vice President and Director of Sales and
Marketing, GT Global from May 1992 to April
1995; Vice President and Director of
Marketing, GT Global from 1987 to 1992;
Director, Liechtenstein Global Trust AG
(holding company of the various
international LGT companies) Advisory Board
since January 1996; Director, G.T. Global
Insurance Agency ("G.T. Insurance") since
1996; President and Chief Executive
Officer, G.T. Insurance since 1995; Senior
Vice President and Director, Sales and
Marketing, G.T. Insurance from April 1995 to
November 1995; Senior Vice President, Retail
Marketing, G.T. Insurance from 1992 to
1993. Mr. Guilfoyle is also a director or
trustee of each of the other investment
companies registered under the 1940 Act that
is managed or administered by Chancellor LGT.
INFORMATION REGARDING TRUSTEES WHOSE CURRENT TERMS CONTINUE
CLASS 3 - TERM EXPIRES 1999 Trustee
Robert G. Wade, Jr., Age 70*
Mr. Wade is Consultant to Chancellor LGT;
Chairman of the Board of Chancellor Capital
Management, Inc. From January 1995 to
October 1996; President, Chief Executive
Officer and Chairman of the Board of
Chancellor Capital Management, Inc. From
1988 to January 1995. Mr. Wade also is a
director or trustee of each of the other
investment companies registered under the
1940 Act that is managed or administered by
Chancellor LGT.
CLASS 1 - TERM EXPIRES 2000 Trustee
C. Derek Anderson, Age 56
Mr. Anderson is President, Plantagenet
Capital Management, LLC (an investment
partnership); Chief Executive Officer,
Plantagenet Holdings, Ltd. (an investment
banking firm); Director, Anderson Capital
Management, Inc., since 1988; Director,
PremiumWear, Inc. (formerly Munsingwear,
Inc.) (a casual apparel company); and
Director, "R" Homes, Inc. and various other
companies. Mr. Anderson is also a director
or trustee of each of the other investment
companies registered under the 1940 Act that
is managed or administered by Chancellor LGT.
Frank S. Bayley, Age 58 Trustee
Mr. Bayley is a partner of the law firm of
Baker & McKenzie; and Director and Chairman,
C.D. Stimson Company (a private investment
company). Mr. Bayley also is a director or
trustee of each of the other investment
companies registered under the 1940 Act that
is managed or administered by Chancellor LGT.
4
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*Mr. Guilfoyle and Mr. Wade are deemed to be an "interested person" of the
Fund, as defined in the Investment Company Act of 1940, as amended ("1940
Act"), by virtue of their associations with GT Global and Chancellor LGT
Asset Management, Inc. ("Chancellor LGT"), the Companies' investment manager,
or their affiliates.
The above information provides the business experience of each Trustee
during at least the past five years. Corresponding information with respect to
the executive officers of the Fund is provided below. See "Other Information --
Executive Officers of the Fund."
To the knowledge of the Fund's management, as of the record date, the
Trustees and officers of the Fund owned, as a group, less than 1% of the
outstanding shares of the Fund.
There were [eight] meetings of the Board of Trustees held during the
Fund's fiscal year ended October 31, 1997. The Board of Trustees has an Audit
Committee comprised of Miss Quigley and Messrs. Anderson, Bayley and Patterson.
The purpose of the Audit Committee is to oversee the annual audit of the Fund
and review the performance of the independent accountants. During the Fund's
last completed fiscal year, the Audit Committee met [once]. Each Trustee
attended at least 75% of the total number of meetings of the Board and the Audit
Committee.
EachTrustee serves in total as a director or trustee of 12 registered
investment companies with 42 series managed or administered by Chancellor LGT.
The Fund pays each Trustee, who is not a director, trustee, officer or employee
of Chancellor LGT, or any affiliated company, an annual fee plus a meeting fee
for each Board or committee meeting attended by such Trustee and reimburses
travel and other out-of-pocket expenses incurred in connection with attending
such meetings. The table below summarizes the compensation of the Fund's
Trustees for the fiscal year ended October 31, 1997.
Compensation Table
Compensation Total Compensation From The
Name Of Person(1) From The Fund Fund And The Complex(2)
- ----------------- ------------- -----------------------
C. Derek Anderson.... $______ ______
Frank S. Bayley...... $______ ______
Arthur C. Patterson.. $______ ______
Ruth H. Quigley...... $______ ______
(1) Mr. Guilfoyle and Mr. Wade received no compensation from the Fund.
(2) The Trustees do not receive any pension or retirement benefits as
compensation for their services to the Fund.
REQUIRED VOTE. A plurality of all the votes cast at the Meeting is required
for the election of each Trustee.
THE BOARD OF TRUSTEES RECOMMENDS
THAT YOU VOTE "FOR" THE TRUSTEES LISTED IN PROPOSAL 1
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PROPOSAL NO 2: APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT AND
SUB-ADVISORY AGREEMENT
BACKGROUND. On January 30, 1998, Liechtenstein Global Trust, AG ("LGT"),
the indirect parent organization of Chancellor LGT and GT Global, Inc.
(together, "GT Global") and LGT Holding (International) AG, Zurich, entered into
an agreement (the "Purchase Agreement") with AMVESCAP PLC ("AMVESCAP") and AMD
Acquisition Corp. , pursuant to which AMVESCAP will acquire LGT's Asset
Management Division, which includes GT Global and certain other affiliates. In
connection with this transaction (the "Purchase"), and as required by the 1940
Act, shareholders of the Fund are being asked to approve a new Investment
Management Agreement (the "New Management Agreement") and a new Sub-Advisory
Agreement (the "New Sub-Advisory Agreement") (the New Management Agreement and
the New Sub-Advisory Agreements are collectively referred to as the "New
Agreements"). Under the New Agreements, A I M Advisors, Inc. ("AIM"), a wholly
owned subsidiary of AMVESCAP, would serve as investment manager, and Chancellor
LGT (whose name would be changed following consummation of the Purchase) would
serve as sub-adviser, to the Fund. See "Information Concerning AIM and
Chancellor LGT." Forms of each of the New Agreements are attached hereto as
Exhibits C and D. The Board has approved the New Management Agreement and New
Sub-Advisory Agreement with respect to the Fund, subject to the approval of its
shareholders.
Chancellor LGT has served and currently serves as investment manager to
the Fund pursuant to an investment management contract (the "Current Management
Contract"). It currently serves as investment manager to a total of __
investment company portfolios with approximately $__ billion in assets as of
_______, 1998. As a result of the Purchase, the Current Management Contracts
will automatically terminate. See "Information Concerning AIM and Chancellor
LGT."
At a meeting held on March __, 1998, the Board, including a majority of
the members of the Board who would not be "interested persons" (as defined in
the 1940 Act) ("Independent Board Members"), approved, subject to shareholder
approval, the New Agreements. A description of the New Agreements is provided
below under "Terms of the New Agreements." Such description is only a summary
and is qualified by reference to the attached Exhibits C and D. A summary of the
Board's considerations is provided below under "Board Considerations."
In approving the New Agreements, the Board took into account that, except
for the change in the investment manager and the establishment of sub-advisory
relationships, there are no material differences between the provisions of the
Current Management Contracts and the New Agreements. Further, based on the
representations of AIM and Chancellor LGT regarding their intentions, the Board
does not anticipate currently that there will be substantial changes in the way
in which the Fund is managed or operated, except as noted below. Following the
Closing Date, AIM intends to carefully study the investment performance of each
of the Funds, as well as the combined resources of AMVESCAP and Chancellor LGT,
in order to determine what steps, if any, may be taken to ensure strong
investment performance of the Funds into the future. It is anticipated that as a
result of such study, AIM may recommend, among other things, various actions
such as reorganizations or mergers involving certain Funds, as well as changes
in or adjustments to the investment personnel assigned to manage certain Funds.
Any proposals along these lines would be presented to the Boards of the Funds
for their approval. Moreover, implementation of certain of these proposals may
require shareholder approval.
If the conditions set forth in the Purchase Agreement are not met or
waived or if the Purchase Agreement is terminated, the Purchase will not be
consummated, and the Current Management Contracts will remain in effect. If the
6
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New Agreements are approved, and the Purchase is thereafter consummated, the New
Agreements will be executed and become effective on or about the Closing Date,
as defined below.
SHAREHOLDER APPROVAL REQUIREMENTS. Approval of the New Management
Agreement and New Sub-Advisory Agreement on behalf of the Fund requires the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund, which for this purpose means the affirmative vote of the lesser of (i)
more than 50% of the outstanding shares of the Fund or (ii) 67% or more of the
shares of the Fund present at the meeting if more than 50% of the outstanding
shares of the Fund are represented at the meeting in person or by proxy. Because
approvals of the New Management Agreement and the New Sub-Advisory Agreement are
completely contingent upon the approval of both, they are to be considered as a
single Proposal by shareholders. If the New Agreements are not approved with
respect to the Fund and the Purchase is consummated, the Board will determine
what further action to take. Because the Purchase is not contingent on the
approval of the New Agreements, it is possible that the Purchase will be
consummated even if the Fund does not approve the New Agreements. In such case,
GT Global (including Chancellor LGT) would be acquired by AMVESCAP and the
Current Management Contracts would automatically terminate. As a result, the
Board would need to make new arrangements for obtaining advisory services. Such
steps could include the hiring of AIM and GT Global to provide services on an
interim basis, and AMVESCAP has indicated its willingness to permit AIM and GT
Global to provide such services if so requested.
PURCHASE OF LGT'S ASSET MANAGEMENT DIVISION BY AMVESCAP. On January 30,
1998, LGT and LGT Holding (International) AG, Zurich (together, the "Sellers")
entered into the Purchase Agreement with AMVESCAP and AMD Acquisition Corp., a
wholly owned subsidiary of AMVESCAP (the "Buyer"), pursuant to which the Buyer
will purchase the global asset management business of the Sellers by acquiring
all of the issued and outstanding shares of LGT Holding Luxembourg SA, LGT (UK
Holdings) PLC and LGT Bank in Liechtenstein Ltd. (Cayman) and equity interests
in LGT Verwaltungs GmbH (together with their respective subsidiaries, the
"Transferred Companies"). Under the Purchase Agreement, the Buyer shall pay the
Sellers $1.3 billion, which shall be (i) reduced (or increased) to the extent
that the closing tangible net worth of the Transferred Companies at closing is
less than (or greater than) zero, (ii) reduced to the extent that annualized
asset management fees (without giving effect to market and currency
fluctuations) of the Transferred Companies at closing, in respect of which
client consents have been obtained, are less than 92.5% of base investment
management fees and (iii) adjusted in respect of certain transaction-related
fees and expenses (including, among other things, mutual fund shareholder and
other client consent costs). Thus, failure by Shareholders of the Companies to
approve the New Agreements may result in the Buyer paying, and the Sellers
receiving, a lower amount for the sale of the Transferred Companies, but will
not necessarily preclude a closing of the Purchase.
The closing is expected to occur on or about May 29, 1998 (the "Closing
Date") subject to the satisfaction or waiver of certain conditions that include,
among other things: (i) the annualized asset management fees (without giving
effect to market and currency fluctuations) being at least 60% of base
management fees; (ii) approval of the Purchase by AMVESCAP shareholders; (iii)
certain governmental approvals and other third party consents having been
received; (iv) representations and warranties made by the parties being true and
correct in all material respects at the closing; and (v) no party being subject
to any order prohibiting the consummation of the Purchase.
The Purchase Agreement may be terminated at any time prior to the Closing
Date (i) by the mutual consent of the Buyer and LGT; (ii) by written notice by
any party after September 30, 1998; (iii) by the Sellers if, by a specified
date, AMVESCAP's shareholders have not approved the transaction; or (iv) under
the other circumstances set forth in the Purchase Agreement.
7
<PAGE>
BOARD CONSIDERATIONS. At a series of meetings with the Board,
representatives of AMVESCAP, INVESCO Funds Group, Inc. ("INVESCO") (a wholly
owned subsidiary of AMVESCAP), AIM, Chancellor LGT and GT Global, Inc. discussed
with the Board the anticipated effects of the Purchase on the advisory,
sub-advisory and related relationships with the Fund. At meetings in person held
on February 10, 17 and 25 and March 10-11 and 24, 1998, these representatives
provided information to Board Members concerning the specific terms of the
Purchase Agreement, the anticipated advisory and sub-advisory relationships with
the Fund, and the proposed plans for ongoing management, distribution and
operation of the Fund. Throughout this period, the Board and their counsel
requested and received additional information from AIM, GT Global and their
counsel, and held telephone conferences regarding the Purchase and its potential
impact on the Fund and its shareholders.
In connection with their review, the Board obtained substantial
information regarding: the management, financial position and business of
AMVESCAP and AIM and their affiliates, including INVESCO; the history of AIM's
and its affiliates' business and operations; the performance of the investment
companies and private accounts advised by AIM, INVESCO and their respective
affiliates; the impact of the Purchase on the Fund and its shareholders; the
plans of AMVESCAP and its affiliates with respect to GT Global and the GT Global
Funds; performance and financial information about each of the Fund; and
information about other funds and their fees and expenses. The Board also
received information regarding the terms of the Purchase and comprehensive
financial information including: AMVESCAP's plans for financing the Purchase;
the impact of the financing on AIM, as investment adviser; AIM's plans for the
compensation and retention of personnel currently employed by GT Global and the
Transferred Companies who currently provide services to the Companies, including
an employee stabilization plan being implemented at GT Global; and information
concerning employment contracts with senior management of GT Global.
In connection with their deliberations, the Board evaluated the
above-referenced information and considered, among other things, the following
factors:
(1) the expectation that the investment objectives, policies and
management strategies of the Fund after the Purchase will not materially change;
(2) the expectation that substantially the same investment teams and
management personnel will manage the Fund on a day-to-day basis through
Chancellor LGT as sub-adviser to the Fund, which will be supported where
appropriate by investment and other personnel of AMVESCAP, INVESCO, AIM and
their affiliates who are experienced in managing and administering similar
investment products;
(3) the expectation that the investment expertise available to the Fund
will be enhanced by the combined AMVESCAP/Chancellor LGT management team and, in
particular, that AIM's depth and experience in managing U.S. equity funds and
money market funds will complement Chancellor LGT's traditional strength in
managing global and foreign funds and that INVESCO's depth and experience in
managing global and foreign funds also will be available to Chancellor LGT;
(4) the continued employment of and retention incentives for senior
management of GT Global and the continued maintenance of investment personnel by
Chancellor LGT and its affiliates in multiple locations throughout the world;
(5) the ability of AMVESCAP to provide sufficient capital to support the
operations of AIM and GT Global and AMVESCAP's commitment to paying compensation
adequate to attract and retain top quality personnel;
(6) the commitment of AIM to maintain the Fund's current expense caps for
at least two years and the expectation that the expense ratios of the Fund may
be reduced to the extent assets increase through increased sales and reduced
redemption levels;
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(7) the additional administrative and shareholder services which can be
provided by a larger organization such as AIM;
(8) the overall advantages of being managed by the AMVESCAP organization
which will have approximately $250 billion under management and operations
throughout the world following the closing, especially in light of increasingly
competitive conditions in the financial services industry, including entry into
the industry of large and well-capitalized companies which are spending
substantial amounts to engage personnel and to provide services to competing
investment companies; and
(9) the continuity of experience offered by the Board.
The Board concluded that it could not assess the relative weight given to
each factor in making its determinations. In reaching its determinations, the
Board also considered the fact that the new advisory and sub-advisory
relationships are intended to conform to the safe harbor provided by Section
15(f) of the 1940 Act for new advisory and other arrangements arising from the
sale of fund management businesses such as Chancellor LGT's. Under the Purchase
Agreement, AMVESCAP has agreed to conduct its business and, subject to the
fiduciary duties of the Fund, to use its reasonable best efforts to cause each
of its affiliates to conduct its business so as to assure that, insofar as is
within AMVESCAP's or its affiliates' control (i) for a period of three years
after the closing of the Purchase, at least 75% of the members of the Board
would be Independent Board Members; and (ii) for a period of two years after the
closing of the Purchase, there would not be imposed on the Fund an "unfair
burden" (as defined in the 1940 Act) as a result of the Purchase.
The Board also evaluated the New Management Agreement and the New
Sub-Advisory Agreement. The Board assured itself that the New Agreements,
including the terms relating to the services to be provided and the fees and
expenses payable by the Fund, are not materially different from the Current
Management Contracts for the Fund, except that AIM rather than Chancellor LGT
will be the investment manager for the Fund and Chancellor LGT will be the
sub-adviser for the Fund.
At the Board meetings held throughout February and March, 1998, the Board
received presentations by AMVESCAP, AIM, INVESCO, Chancellor LGT, and GT Global,
Inc. and considered each of the foregoing factors. During this time period, the
Independent Board Members also met separately and conferred with their counsel,
who is not counsel to the Fund, AMVESCAP or its affiliates or Chancellor LGT or
its affiliates. Based upon these considerations, on March 24, 1998 the Board
unanimously approved the New Management Agreement and the New Sub-Advisory
Agreement for the Fund and recommended approval by the shareholders.
TERMS OF THE NEW AGREEMENTS. If the New Agreements are approved by
shareholders as described herein, upon the closing of the Purchase, AIM will
serve as the investment manager to the Fund. With the exception of the
replacement of Chancellor LGT by AIM as the investment manager, the New
Management Agreement is substantially the same as the Current Management
Contract in all material respects, except: (1) the New Agreement is governed by
Delaware law, while the Current Management Contract is governed by California
law; (2) the New Management Agreement includes a license provision that governs
the use of the "AIM" name; the Current Management Contract contains no such
provision; (3) the provision in Current Management Contract addressing oversight
of Fund pricing and computation of net asset value has been deleted from the New
Agreements, since AIM and Chancellor LGT will perform these functions directly;
(4) a provision has been added to the New Agreement allowing its amendment
without shareholder approval when permitted by the 1940 Act; (5) to reflect
recent changes in governing federal and state law, the New Management Agreement
removes the state expense limitation provisions found in the Current Management
Agreement; and (6) the date of effectiveness which, assuming Shareholder
approval, would be on or about the Closing Date.
9
<PAGE>
AIM will be contractually obligated to provide the same services to the
Fund as are currently provided by Chancellor LGT, in return for the same
advisory fees as are currently in place. AIM has further agreed that, for a
period of two years from the Closing Date, it will continue to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rates noted on Exhibit E. As a result, the total
expenses incurred by Fund shareholders will remain capped at current levels for
two years following the closing of the Purchase.
Pursuant to the New Sub-Advisory Agreement, Chancellor LGT will serve as
sub-adviser to the Fund upon approval of the Fund's shareholders. Chancellor LGT
would provide substantially all of the services for the Fund that it currently
provides. It would be paid sub-advisory fees by AIM, not by the Fund.
Forms of the New Management Agreement and New Sub-Advisory Agreement are
attached hereto as Exhibits C and D. The descriptions of the New Agreements set
forth herein are qualified in their entirety by reference to Exhibits C and D.
Although the Current Management Contract has not terminated and the New
Agreements have not become effective, the New Agreements are described below as
if they were both in effect.
Under the New Management Agreement, AIM will:
(a) subject to the supervision of the Board, provide a continuous
investment program for the Fund, including investment research and management
with respect to all securities and investments and cash equivalents of the Fund;
(b) determine from time to time what securities and other investments will
be purchased, retained or sold by the Fund, and the brokers and dealers through
whom trades will be executed;
(c) oversee the maintenance of all books and records with respect to the
securities transactions of the Fund, and furnish the Board with such periodic
and special reports as the Board reasonably may request; and
In performing its obligations under the New Management Agreement, AIM is
required to comply with all applicable laws. AIM shall not be liable and the
Fund shall indemnify AIM and its directors, officers and employees, for any
costs or liabilities arising from any error of judgment or mistake of law or any
loss suffered by the Fund in connection with the matters to which the New
Management Agreement relates except a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of AIM in the performance by AIM of
its duties or from reckless disregard by AIM of its obligations and duties under
the New Management Agreement. Any person, even though also an officer, director,
employee or agent of AIM, who may be or become an officer, Board Member,
employee or agent of the Fund shall be deemed, when rendering services to the
Fund or acting with respect to any business of the Fund, to be rendering such
service to or acting solely for the Fund and not as an officer, partner,
employee, or agent or one under the control or direction of AIM even though paid
by it.
The New Management Agreement provides that all of the ordinary business
expenses not specifically assumed by AIM incurred in the operations of the Fund
and the offering of each of its shares shall be paid by each the Fund. These
expenses include but are not limited to brokerage commissions, taxes, legal,
accounting, auditing or governmental fees, custodian, transfer agent and
shareholder service agent costs. AIM will assume the cost of any compensation
for services provided to a Company received by the officers of the Fund and by
the Board Members who are not Independent Board Members.
The New Management Agreement provides that, subject to the approval of the
Board and the Fund's shareholders, AIM may delegate any and all of its duties to
a sub-adviser, provided that AIM shall continue to supervise the performance of
any such sub-adviser. In this regard, AIM will enter into the New Sub-Advisory
10
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Agreement with Chancellor LGT. Pursuant to the New Sub-Advisory Agreement, AIM
intends to delegate all of its duties under the New Management Agreement to
Chancellor LGT. The New Sub-Advisory Agreement is substantially the same in all
material respects to the New Management Agreement, and the description above of
the duties and services to be performed by AIM will apply to Chancellor LGT as
Sub-Adviser to the Fund.
Information with regard to the fees payable under each of the New
Management Agreement and the aggregate management fees paid to Chancellor LGT in
the Fund's most recently completed fiscal year is as set forth in Exhibit E.
The New Management Agreement and the New Sub-Advisory Agreement may be
terminated at any time without penalty by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Fund, on 60 days' written
notice to AIM or Chancellor LGT, respectively, or by AIM or Chancellor LGT,
respectively, at any time without penalty on 60 days' written notice to the
Fund. Each of the New Agreements will terminate automatically in the event of
any assignment, as defined by the 1940 Act. The New Agreements continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Board Members, cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the Board or by
vote of a majority of the outstanding voting securities of the Fund.
ADDITIONAL SERVICES PROVIDED BY AIM AND ITS AFFILIATES. In addition to
AIM's investment management responsibilities under the New Management Agreement,
it is anticipated that a number of AIM affiliates will provide services to the
Fund if this Proposal 2 is approved by shareholders.
It is currently anticipated that during September, 1998, A I M Fund
Services, Inc. ("AIM Services"), a wholly owned subsidiary of AIM, would
commence serving as transfer agent for the Fund. GT Global Investor Services,
Inc. will continue to serve as transfer agent for the Fund until AIM Services
assumes that role.
The agreements pursuant to which Chancellor LGT serves as accounting and
pricing agent for the Fund will also terminate as a result of the Purchase. The
Board has approved new fund accounting and pricing agent agreements, through
which AIM will serve as fund accounting and pricing agent. AIM intends to
delegate substantially all of its responsibilities as fund accounting and
pricing agent to Chancellor LGT. Under the 1940 Act, such agreements do not
require the approval of shareholders before they become effective. Such
agreements will become effective on or about the Closing Date if this Proposal 2
is approved by Shareholders.
INFORMATION CONCERNING AMVESCAP, AIM AND CHANCELLOR LGT. AMVESCAP, along
with its subsidiaries, is one of the largest independent investment management
organizations in the world. The AMVESCAP group of companies (through the AIM and
INVESCO brand names) offers a broad array of investment products and services to
institutions and individuals. As of December 31, 1997, AMVESCAP and its
subsidiaries had approximately $192 billion under management. AMVESCAP's
worldwide investment team consists of approximately 330 investment professionals
located in major financial centers, and includes larger investment teams in
Atlanta, Boston, Dallas, Denver, Hong Kong, Houston, London, Louisville, Miami,
Portland (Oregon), and Tokyo. The expertise, personnel, data and systems of
AMVESCAP's worldwide investment team, as well as the ongoing resources of
Chancellor LGT, will be available to AIM and Chancellor LGT in their management
of the Fund. The corporate headquarters of AMVESCAP are located at 11 Devonshire
Square, London EC2M 4YR, England.
11
<PAGE>
AIM was organized in 1976 and, together with its affiliates, currently
advises over 50 investment company portfolios (the "AIM Funds"). As of December
31, 1997, the total assets of the AIM Funds were approximately $83 billion. AIM
is a wholly owned subsidiary of A I M Management Group Inc. ("AIM Management").
Certain of the Directors and officers of AIM are also Trustees/Directors and
executive officers of the AIM Funds. The address of AIM, all of the Directors of
AIM, AIM Distributors, AIM Services, and AIM Management, is 11 Greenway Plaza,
Suite 100, Houston, TX 77046-1173.
Chancellor LGT currently provides investment management and/or
administration services to the Fund. Chancellor LGT and its worldwide asset
management affiliates have provided investment management and/or administrative
services to institutional, corporate and individual clients around the world
since 1969. As of December 31, 1997, Chancellor LGT and its worldwide affiliates
managed approximately $54 billion in assets. In the United States, as of
December 31, 1997, Chancellor LGT managed or administered approximately $8
billion of assets of the Funds and several other registered investment
companies, including three closed-end funds, and sub-advised one other
registered investment company. In addition to the investment resources of its
San Francisco and New York offices, Chancellor LGT draws upon the expertise,
personnel, data and systems of other investment offices of LGT's Asset
Management Division in Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Funds, Chancellor LGT generally employs a team
approach, taking advantage of its investment resources around the world in
seeking each Fund's investment objective. The U.S. offices of Chancellor LGT are
located at 50 California Street, 27th Floor, San Francisco, CA 94111 and 1166
Avenue of the Americas, New York, NY 10036.
Chancellor LGT and its worldwide affiliates, including LGT Bank in
Liechtenstein, compose Liechtenstein Global Trust. Liechtenstein Global Trust is
a provider of global asset management and private banking products and services
to individual and institutional investors. Liechtenstein Global Trust is
controlled by the Prince of Liechtenstein Foundation, which serves as the parent
organization for the various business enterprises of the Princely Family of
Liechtenstein. The principal business address of the Prince of Liechtenstein
Foundation is Herrengasse 12, FL-9490, Vaduz, Liechtenstein.
THE BOARD RECOMMENDS THAT
YOU VOTE FOR PROPOSAL 2.
PROPOSAL NO. 3: APPROVAL OF CHANGES TO CERTAIN FUNDAMENTAL
INVESTMENT RESTRICTIONS OF THE FUND
PROPOSAL. Changes are proposed to the fundamental investment
restrictions ("fundamental restrictions") of the Fund.
REASONS FOR THE PROPOSED CHANGES. Pursuant to the 1940 Act, the Fund has
adopted certain fundamental restrictions, which may be changed only with
shareholder approval. Restrictions and policies that the Fund has not
specifically designated as being fundamental are considered to be
"non-fundamental" and may be changed by the Fund's Board of Trustees without
shareholder approval.
Several of the fundamental restrictions that the Fund has adopted reflect
regulatory, business or industry conditions, practices or requirements that are
no longer in effect. In addition, other fundamental restrictions reflect federal
regulatory requirements that remain in effect but are not required to be stated
as fundamental, or in some cases even as non-fundamental, restrictions.
Accordingly, the Board has approved revisions to the Fund's fundamental
restrictions in order to simplify, modernize and make more uniform those
restrictions that are required to be fundamental. In several instances, existing
fundamental restrictions that are eliminated because they are not required to be
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<PAGE>
fundamental would be re-classified as non-fundamental restrictions. However,
non-fundamental restrictions may be changed by the Board without shareholder
approval.
The Board believes that by reducing to a minimum those restrictions that
can be changed only by shareholder vote, the Fund will be able to avoid the
costs and delays associated with a shareholder meeting if the Board decides to
make future changes to its investment policies. Although the proposed changes in
fundamental restrictions will allow the Fund greater investment flexibility to
respond to future investment opportunities, the Board does not anticipate that
the changes, individually or in the aggregate, will result at this time in a
material change in the level of investment risk associated with an investment in
the Fund or the manner in which the Fund is managed.
PROPOSED CHANGES. The following is the text and a summary description of
the proposed changes to the Fund's fundamental restrictions, together with the
text of those non-fundamental restrictions that would be adopted in connection
with the elimination of certain of the Fund's current fundamental restrictions.
The text below also describes those fundamental restrictions that are being
eliminated for which no corresponding non-fundamental restrictions is being
proposed. Any non-fundamental restriction may be modified or eliminated by the
Board at any future date without any further approval of shareholders.
Shareholders should note that certain of the fundamental restrictions that are
treated separately below currently are combined within a single existing
fundamental restriction.
With respect to the Fund and each proposed fundamental or non-fundamental
restriction, if a percentage restriction is adhered to at the time of an
investment or transaction, a later increase or decrease in percentage resulting
from a change in the values of the Fund's portfolio securities or the amount of
its total assets will not be considered a violation of the restriction.
A. MODIFICATION OF FUNDAMENTAL RESTRICTION ON CONCENTRATION.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on concentration would be modified as follows:
"The Fund will not purchase any security if, as a result of that
purchase, 25% or more of the Fund's total assets would be invested in
securities of issuers having their principal business activities in the
same industry, except that this limitation does not apply to securities
issued or guaranteed by the U.S. government, its agencies or
instrumentalities."
DISCUSSION: The proposed changes to the Fund's fundamental restriction
on concentration would make minor changes in wording from the existing
fundamental restriction.
B. MODIFICATION OF FUNDAMENTAL RESTRICTION ON ISSUING SENIOR SECURITIES
AND BORROWING MONEY.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on issuing senior securities and borrowing money for
the Fund would be modified as follows:
"The Fund will not issue senior securities or borrow money, except
as permitted under the 1940 Act and then not in excess of 33 1/3% of the
Fund's total assets (including the amount borrowed but reduced by any
liabilities not constituting borrowings) at the time of the borrowing,
except that the Fund may borrow up to an additional 5% of its total assets
(not including the amount borrowed) for temporary or emergency purposes."
DISCUSSION: The 1940 Act establishes limits on the ability of the Fund to
borrow money or issue "senior securities," a term that is defined, generally, to
refer to Fund obligations that have a priority over the Fund's shares of
beneficial interest with respect to the distribution of Fund assets or the
payment of dividends. The proposed change to the Fund's fundamental restriction
on borrowing would make minor changes in wording from the existing fundamental
restriction.
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<PAGE>
C. MODIFICATION OF FUNDAMENTAL RESTRICTION ON MAKING LOANS.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on making loans for the Fund would be modified as
follows:
"The Fund will not make loans, except through loans of portfolio
securities or through repurchase agreements, provided that for purposes of
this limitation, the acquisition of bonds, debentures, other debt
securities or instruments, or participations or other interests therein
and investments in government obligations, commercial paper, certificates
of deposit, bankers' acceptances or similar instruments will not be
considered the making of a loan."
DISCUSSION: The proposed changes to this fundamental restriction would
make minor changes in wording from the existing fundamental restriction on
making loans. In addition, the proposed restriction more completely describes
various types of debt instruments the Fund may purchase that do not constitute
the making of a loan.
D. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on underwriting securities for the Fund would be
modified as follows:
"The Fund will not engage in the business of underwriting securities
of other issuers, except to the extent that the Fund might be considered
an underwriter under the federal securities laws in connection with its
disposition of portfolio securities."
DISCUSSION: The proposed changes to this fundamental restriction would
make minor changes in wording from the existing fundamental restriction on
underwriting securities.
E. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on real estate investments for the Fund would be
modified as follows:
"The Fund will not purchase or sell real estate, except that
investments in securities of issuers that invest in real estate and
investments in mortgage-backed securities, mortgage participations or
other instruments supported by interests in real estate are not subject to
this limitation, and except that the Fund may exercise rights under
agreements relating to such securities, including the right to enforce
security interests and to hold real estate acquired by reason of such
enforcement until that real estate can be liquidated in an orderly
manner."
DISCUSSION: The proposed changes to this fundamental restriction would
make changes in wording from the existing fundamental restriction on real estate
investments and would provide more detail regarding the types of real estate
related securities that are permissible investments for the Fund. In addition,
the proposed restriction includes an exception that permits the Fund to hold
real estate acquired as a result of ownership of securities or other interests.
F. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN COMMODITIES.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on investing in commodities for the Fund would be
modified as follows:
"The Fund will not purchase or sell physical commodities, but the
Fund may purchase, sell or enter into financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments."
DISCUSSION: The proposed changes to this fundamental restriction are
intended to ensure that the Fund will have the maximum flexibility to enter into
hedging and other transactions utilizing financial contracts and derivative
14
<PAGE>
products when doing so is permitted by the Fund's investment policy and would
make changes in wording from the existing fundamental restriction on investing
in commodities. Furthermore, the proposed restrictions would allow the Fund to
respond to the rapid and continuing development of derivative products. The
proposed restriction broadens the exception to the prohibition on buying and
selling physical commodities to cover all financial derivative instruments
rather than only financial futures and currency instruments.
G. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PLEDGING ASSETS.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing fundamental
restriction on pledging assets for the Fund would be eliminated and the Fund
would become subject to the following non-fundamental restriction:
"The Fund will not mortgage, pledge, or hypothecate any of its
assets, provided that this [restriction] shall not apply to the transfer
of securities in connection with any permissible borrowing or to
collateral arrangements in connection with permissible activities."
DISCUSSION: The Fund is not required to have a fundamental restriction
with respect to the pledging of assets. In order to maximize the Fund's
flexibility in this area, the Board believes that the Fund's restriction on
pledging assets should be made non-fundamental. The non-fundamental restriction
would be similar to the fundamental restriction proposed to be eliminated. The
Board does not expect this change to have any impact on the Fund's operations.
Moreover, the reference in this fundamental restriction to short-sales,
when-issued and forward commitment contracts and hedging transactions has been
deleted since these investment techniques are addressed already by other
fundamental and non-fundamental restrictions.
H. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING SECURITIES ISSUED
BY OTHER INVESTMENT COMPANIES.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on purchasing securities issued by other investment
companies for the Fund would be eliminated.
DISCUSSION: There is no legal requirement that the Fund have a fundamental
restriction on this subject. This change would offer the Fund the ability to use
alternative investment structures. In addition, the ability of the Fund to
invest in other investment companies already is subject to certain percentage
limitations in the 1940 Act. Accordingly, the Board believes this investment
restriction should be eliminated.
I. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTMENTS IN OIL, GAS AND
MINERAL LEASES AND PROGRAMS.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on investments in oil, gas or minerals for the Fund
would be eliminated.
DISCUSSION: The Fund is not required to have a fundamental restriction
with respect to oil, gas or mineral investments. In order to maximize the Fund's
flexibility in this area, the Board believes that the Fund's restriction on oil,
gas and mineral investments should be eliminated. This restriction was imposed
by state blue sky laws and NSMIA preempts that requirement. Notwithstanding the
elimination of this fundamental restriction, the Fund does not expect to invest
at this time in oil, gas and mineral leases and programs.
J. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING FOR THE PURPOSE OF
CONTROL.
PROPOSED CHANGE: Upon the approval of Proposal 3, the Fund's existing
fundamental restriction on investing for the purpose of control for the Fund
would be eliminated.
DISCUSSION: The Board proposes to eliminate this fundamental restriction,
which prohibits the Fund from investing in companies for the purpose of
exercising control or management. Elimination of this restriction would clarify
the Fund's ability to exercise freely its rights as a shareholder of the
companies in which it invests. The Fund, however, does not intend to become
involved in directing or administering the day-to-day operations of any company.
15
<PAGE>
Chancellor LGT believes that it should be able to communicate freely the
Fund's views as a shareholder on important matters of policy to a company's
management, its board of directors and its shareholders, when Chancellor LGT or
the Board believes that such action or policy may affect significantly the value
of its investment. The activities that the Fund might engage in, either
individually or with others, include seeking changes in a company's direction,
seeking the sale of a company or a portion of its assets, or participating in a
takeover effort or in opposition to a takeover effort. Chancellor LGT believes
that the Fund currently may engage in such activities without necessarily
violating this fundamental restriction. Nevertheless, the existence of the
investment restriction might give rise to a claim that such activities did in
fact constitute investing for control or management.
K. ELIMINATION OF FUNDAMENTAL RESTRICTION ON SELLING SECURITIES SHORT.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on selling securities short for the Fund would be
eliminated.
DISCUSSION: The Fund is not required to have a fundamental restriction
with respect to short sales of securities. In order to maximize the Fund's
flexibility in this area, the Board believes that the Fund's restriction on
short sales of securities should be eliminated. This restriction was imposed by
state blue sky laws and NSMIA preempts that requirement. Notwithstanding the
elimination of this fundamental restriction, the Fund expects to continue not to
engage in short sales of securities, [except to the extent that the Fund
contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short.]
REQUIRED VOTE. Approval of each of the changes contemplated by Proposal 3
requires the affirmative vote of a "majority of the outstanding voting
securities" of the Fund, which for this purpose means the affirmative vote of
the lesser of (1) more than 50% of the outstanding shares of the Fund or (2) 67%
or more of the shares of the Fund present at the meeting if more than 50% of the
outstanding shares of the Fund are represented at the meeting in person or by
proxy. In addition to voting "for" or "against" the entire Proposal 3,
shareholders of the Fund also may vote against the changes proposed with respect
to specific fundamental restrictions in the manner indicated on the proxy card.
If the proposed changes are approved by shareholders of the Fund at the
Meeting, those changes will be effective on the Fund's next business day.
IF ONE OR MORE OF THE CHANGES CONTEMPLATED BY PROPOSAL 3 ARE NOT APPROVED
BY SHAREHOLDERS, THE RELATED EXISTING FUNDAMENTAL RESTRICTION(S) OF THE FUND
WILL CONTINUE IN EFFECT.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 3.
PROPOSAL 4: RATIFICATION OF THE SELECTION
OF INDEPENDENT PUBLIC ACCOUNTANTS
At a meeting called for the purpose of such selection, the firm of Coopers
& Lybrand L.L.P. was selected by the Fund's Board of Trustees, including the
independent trustees, as the independent accountants to audit the books and the
accounts of the Fund for the fiscal year ending October 31, 1998, and to include
its opinion in financial statements filed with the Securities and Exchange
Commission ("SEC"). The Board has directed the submission of this selection to
the Shareholders for ratification. Coopers & Lybrand L.L.P. has advised the
Boards that it has no financial interest in the Fund. For the fiscal year ended
October 31, 1997, the professional services rendered by Coopers & Lybrand L.L.P.
included the issuance of an opinion on the financial statements of the Fund and
an opinion on other reports of the Fund filed with the SEC. Representatives of
Coopers & Lybrand L.L.P. are not expected to be present at the Meeting, but have
been given the opportunity to make a statement if they so desire and will be
available should any matter arise requiring their presence.
REQUIRED VOTE. Ratification of the selection of Coopers & Lybrand
L.L.P. requires the affirmative vote of a majority of the votes cast thereon
at the Meeting.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 4
16
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OTHER INFORMATION
EXECUTIVE OFFICERS AND DIRECTORS OF AIM
[TO BE ADDED]
EXECUTIVE OFFICERS AND DIRECTORS OF CHANCELLOR LGT
[TO BE ADDED]
EXECUTIVE OFFICERS OF THE FUND
The executive officers of the Fund are listed below. The business address
of each officer is 50 California Street, 27th Floor, San Francisco, California
94111.
William J. Guilfoyle, age 39, is President of the Fund. Mr. Guilfoyle
is also President of GT Global, principal distributor of the GT Global Mutual
Funds. Additional information about Mr. Guilfoyle is provided above.
Helge K. Lee, age 51, is Vice President and Secretary of the Fund. Mr. Lee
has been Chief Legal and Compliance Officer - North America, Chancellor LGT
since October 1997; Executive Vice President of the Asset Management Division of
Liechtenstein Global Trust since October 1996. From February 1996 to October
1996 he served as Senior Vice President, General Counsel and Secretary of
Chancellor LGT, GT Global, GT Services and G.T. Insurance. He served as Vice
President, General Counsel and Secretary of LGT Asset Management, Inc.,
Chancellor LGT, GT Global, GT Services and G.T. Insurance from May 1994 to
February 1996. Mr. Lee was the Senior Vice President, General Counsel and
Secretary of Strong/Corneliuson Management, Inc. and Secretary of each of the
Strong Funds from October 1991 through May 1994.
Kenneth R. Chancey, age 52, is Vice President and Chief Accounting
Officer of the Fund. Mr. Chancey has been Vice President - Mutual Fund
Accounting at Chancellor LGT since 1992. Mr. Chancey was Vice President of
Putnam Fiduciary Trust Company from 1989 to 1992.
GENERAL INFORMATION
SOLICITATION OF PROXIES
The Fund will request broker/dealer firms, custodians, nominees and
fiduciaries to forward proxy material to the beneficial owners of the shares
held of record by such persons. The Fund may reimburse such broker/dealer firms,
custodians, nominees and fiduciaries for their reasonable expenses incurred in
connection with such proxy solicitation. In addition to the solicitation of
Proxies by mail, officers of the Fund and employees of Chancellor LGT and its
affiliates, without additional compensation, may solicit Proxies in person or by
telephone. The costs associated with such solicitation and the Meeting will be
borne by [___________________].
The Fund has retained ___________________________, a professional proxy
solicitation firm, to assist in the solicitation of proxies. You may receive a
telephone call from this firm concerning this proxy solicitation. The Fund
estimates that ___ will be paid fees of approximately $_________ in connection
with the solicitation, depending upon the nature and extent of the services
provided.
17
<PAGE>
OTHER MATTERS TO COME BEFORE THE MEETING
The Board does not know of any matters to be presented at the Meeting
other than those described in this Proxy Statement, but should any other matter
requiring a vote of Shareholders arise, the Proxyholders will vote thereon
according to their best judgment in the interests of the Fund.
REPORTS TO SHAREHOLDERS
THE FUND WILL FURNISH TO SHAREHOLDERS, WITHOUT CHARGE AND UPON REQUEST, A
COPY OF THE MOST RECENT ANNUAL REPORT AND A COPY OF THE MOST RECENT SEMI-ANNUAL
REPORT FOLLOWING SUCH ANNUAL REPORT OF THE FUND. REQUESTS FOR SUCH REPORTS MAY
BE MADE BY WRITING TO THE FUND AT 50 CALIFORNIA STREET, 27TH FLOOR, SAN
FRANCISCO, CALIFORNIA 94111, OR BY CALLING (800) 824-1580.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED,
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
BY ORDER OF THE BOARD OF TRUSTEES,
HELGE KRIST LEE
SECRETARY
March 31, 1998
18
<PAGE>
PRELIMINARY COPY
GT GLOBAL
A WORLD OF OPPORTUNITY
GT GLOBAL INVESTOR SERVICES
2121 NORTH CALIFORNIA BLVD.
SUITE 395
WALNUT CREEK, CA 94596-3572
G.T. GLOBAL EASTERN EUROPE FUND
ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1998
This proxy is being solicited on behalf of the Board of Trustees of G.T. Global
Eastern Europe Fund (the "Fund") and relates to the proposals with respect to
the Fund indicated below. The undersigned hereby appoints as proxies William J.
Guilfoyle, Helge K. Lee and Michael A. Silver and each of them (with power of
substitution) to vote for the undersigned all shares of beneficial interest of
the undersigned in the Fund at the Annual Meeting of Shareholders to be held at
[ ] a.m., Pacific time, on May 20, 1998, at the offices of the Company, 50
California Street, 27th Floor, San Francisco, California 94111, and any
adjournment thereof ("Meeting"), with all the power the undersigned would have
if personally present. The shares represented by this proxy will be voted as
instructed. Unless indicated to the contrary, this proxy shall be deemed to
grant authority to vote "FOR" all proposals relating to the Fund with
discretionary power to vote upon such other business as may properly come before
the Meeting.
YOUR VOTE IS IMPORTANT. Please date and sign this proxy below and return it
promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
GTGXXX KEEP THIS PORTION FOR YOUR RECORDS
- ------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
- ------------------------------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
NAME OF FUND
For
Vote On Trustees For Withhold All To withhold authority
All All Except to vote for any
1. Election of Trustees; 01) individual nominee(s),
William J. Guilfoyle; 02) mark "For All Except"
Arthur C. Patterson; 03) Ruth and write the
H. Quigley nominee's number on
the line below.
/ / / / / /
---------------------
VOTE ON PROPOSALS For Against Abstain
2. Approval of a new investment management agreement / / / / / /
and sub-advisory agreement;
3. Approval of changes to the fundamental investment / / / / / /
restrictions;
/ / To vote against the proposed changes to one or more of the specific
fundamental investment restrictions, but to approve others, PLACE AN "X" IN
THE BOX AT left and indicate the number(s) (as set forth in the proxy
statement) of the investment restriction(s) you do not want to change on the
line below.
----------------------------------------------------------------------------
<PAGE>
4. Ratification of the selection of Coopers & Lybrand
L.L.P. as the Fund's Independent Public Accountants; / / / / / /
If shares are held jointly, each shareholder named should sign. If only one
signs, his or her signature will be binding. If the shareholder is a
corporation, the President or a Vice President should sign in his or her own
name indicating this. If the Shareholder is a partnership, a partner should sign
in his or her own name, that he or she is a "Partner".
- ----------------------------------------------- ---------------------------
- ----------------------------------------------- ---------------------------
Signature (PLEASE SIGN WITHIN BOX) Date
- ----------------------------------------------- ---------------------------
- ----------------------------------------------- ---------------------------
Signature (Joint Owners) Date
2
<PAGE>
EXHIBIT A
[NAME OF FUND]
MASTER INVESTMENT MANAGEMENT CONTRACT
BETWEEN [FUND]
AND A I M ADVISORS, INC.
Contract made as of ____________, 19_, between [Fund], a Massachusetts
business trust ("Fund"), and A I M Advisors, Inc. (the "Adviser"), a Delaware
corporation.
WHEREAS the Fund is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as a closed-end management investment company; and
WHEREAS the Fund desires to retain Adviser as investment manager to
furnish certain investment advisory and portfolio management services to the
Fund, and Adviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Fund hereby appoints Adviser as investment manager of
each Fund for the period and on the terms set forth in this Contract. Adviser
accepts such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. DUTIES AS INVESTMENT MANAGER.
(a) Subject to the supervision of the Fund's Board of Trustees ("Board"),
Adviser will provide a continuous investment program for the Fund, including
investment research and management with respect to all securities and
investments and cash equivalents of the Fund. Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by the Fund, and the brokers and dealers through whom trades will be
executed.
(b) Adviser agrees that in placing orders with brokers and dealers it will
attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation Adviser may, in its discretion, purchase and
sell portfolio securities to and from brokers and dealers who provide the Fund
or Adviser's other clients with research, analysis, advice and similar services.
Adviser may pay to brokers and dealers, in return for research and analysis, a
higher commission or spread than may be charged by other brokers and dealers,
subject to Adviser's determining in good faith that such commission or spread is
reasonable in terms either of the particular transaction or of the overall
responsibility of Adviser to the Fund and its other clients and that the total
commissions or spreads paid by the Fund will be reasonable in relation to the
benefits to the Fund over the long term. In no instance will portfolio
securities be purchased from or sold to Adviser or any affiliated person thereof
except in accordance with the federal securities laws and the rules and
regulations thereunder and any exemptive orders currently in effect. Whenever
Adviser simultaneously places orders to purchase or sell the same security on
behalf of the Fund and one or more other accounts advised by Adviser, such
orders will be allocated as to price and amount among all such accounts in a
manner believed to be equitable to each account. The Fund recognizes that in
some cases this procedure may adversely affect the results obtained for the
Fund.
<PAGE>
(c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Fund, and will furnish the Board
with such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, Adviser
hereby agrees that all records which it maintains for the Fund are the property
of the Fund, agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any records which it maintains for the Fund and which are required
to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to
surrender promptly to the Fund any records which it maintains for the Fund upon
request by the Fund.
3. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Adviser will act in conformity with the Agreement and Declaration of
Trust, By-Laws and Registration Statement of the Fund and with the instructions
and directions of the Board and will comply with the requirements of the 1940
Act, the rules thereunder, and all other applicable federal and state laws and
regulations.
4. DELEGATION OF ADVISER'S DUTIES AS INVESTMENT MANAGER. Adviser may enter
into one or more contracts ("Sub-Advisory Contracts") with a Sub-adviser in
which Adviser delegates to such sub-adviser or the performance of any or all of
the services specified in Paragraph 2 and 3 of this Contract, provided that: (i)
each Sub-Advisory Contract imposes on the sub-adviser bound thereby all the
duties and conditions to which Adviser is subject with respect to the delegated
services under Paragraphs 2 and 3 of this Contract; (ii) each Sub-Advisory
Contract meets all requirements of the 1940 Act and rules thereunder, and (iii)
Adviser shall not enter into a Sub-Advisory Contract unless it is approved by
the Board prior to implementation.
5. SERVICES NOT EXCLUSIVE. The services furnished by Adviser hereunder are
not to be deemed exclusive and Adviser shall be free to furnish similar services
to others so long as its services under this Contract are not impaired thereby.
Nothing in this Contract shall limit or restrict the right of any director,
officer or employee of Adviser, who may also be a Trustee, officer or employee
of the Fund, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
6. EXPENSES.
(a) During the term of this Contract, the Fund will bear all expenses, not
specifically assumed by Adviser.
(b) Expenses borne by the Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or soled by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Adviser under this Contract; (iii) investment consulting fees and related costs;
(iv) expenses of organizing the Fund; (v) costs incurred in connection with the
issuance, sale or repurchase of the Fund's shares of beneficial interest; (vi)
filing fees and expenses relating to the registration and qualification of the
Fund's shares and the Fund under federal and/or state securities laws and
maintaining such registrations and qualifications; (vii) expenses of preparing
and filing reports and other documents with governmental and regulatory
agencies; (viii) fees and salaries payable to the Fund's Trustees who are not
parties to this Contract or interested persons of any such party ("Independent
Trustees"); (ix) all expenses incurred in connection with the Independent
Trustees' services, including travel expenses; (x) taxes (including any income
or franchise taxes) and governmental fees; (xi) costs of any liability,
uncollectible items of deposit and other insurance and fidelity bonds; (xii) any
costs, expenses or losses arising out of a liability of or claim for damages or
other relief asserted against the Fund for violation of any law; (xiii) interest
charges; (xiv) legal, accounting and auditing expenses, including legal fees of
special counsel for the Independent Trustees; (xv) charges of administrators,
custodians, transfer agents, pricing agents and other agents; (xvi) expenses of
disbursing dividends and distributions; (xvii) costs of preparing share
certificates (xviii) expenses of setting in type, printing and mailing reports,
notices and proxy materials for existing shareholders; (xix) expenses of
obtaining and maintaining securities exchange listings of the Fund's shares of
beneficial interest; (xx) any extraordinary expenses (including fees and
disbursements of counsel, costs of actions, suits or proceedings to which the
Fund is a party and the expenses the Fund may incur as a result of its legal
obligation to provide indemnification to its officers, Trustees, employees and
agents) incurred by the Fund; (xxi) fees, voluntary assessments and other
expenses incurred in connection with membership in investment company
organizations; (xxii) costs of mailing and tabulating proxies and costs of
meetings of shareholders, the Board and any committees thereof; (xxiii) the cost
of investment company literature and other publications provided by the Fund to
2
<PAGE>
its Trustees and officers; and (xxiv) costs of mailing, stationery and
communications equipment.
(c) Adviser will assume the cost of any compensation for services provided
to the Fund received by the officers of the Fund and by the Trustees of the Fund
who are not Independent Trustees.
(d) The payment or assumption by Adviser of any expense of the Fund that
Adviser is not required by this Contract to pay or assume shall not obligate
Adviser to pay or assume the same or any similar expense of the Fund on any
subsequent occasion.
7. COMPENSATION.
(a) For the services provided to the Fund under this Contract, the Fund
shall pay the Adviser an annual fee, payable monthly, based upon the average
daily net assets of the Fund as forth in Appendix A attached hereto. Such
compensation shall be paid solely from the assets of the Fund.
(b) The fee shall be computed daily and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.
(c) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
8. LIMITATION OF LIABILITY OF ADVISER AND INDEMNIFICATION. Adviser shall
not be liable and the Fund shall indemnify Adviser and its directors, officers
and employees, for any costs or liabilities arising from any error of judgment
or mistake of law or any loss suffered by the Fund in connection with the
matters to which this Contract relates except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of Adviser in the
performance by Adviser of its duties or from reckless disregard by Adviser of
its obligations and duties under this Contract. Any person, even though also an
officer, partner, employee, or agent of Adviser, who may be or become an
officer, Trustee, employee or agent of the Fund shall be deemed, when rendering
services to the Fund or acting with respect to any business of the Fund, to be
rendering such service to or acting solely for the Fund and not as an officer,
partner, employee, or agent or one under the control or direction of Adviser
even though paid by it.
9. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect with respect to the Fund
unless it has first been approved (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Fund's outstanding voting
securities.
3
<PAGE>
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to the Fund this Contract shall continue automatically
for successive periods not to exceed twelve months each, provided that such
continuance is specifically approved at least annually (i) by a vote of a
majority of the Independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the Board or by vote of a
majority of the outstanding voting securities of the Fund.
(c) Notwithstanding the foregoing, this Contract may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Fund on sixty days' written
notice to Adviser or by Adviser at any time, without the payment of any penalty,
on sixty days' written notice to the Fund. This Contract will automatically
terminate in the event of its assignment.
10. AMENDMENT OF THIS CONTRACT. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Contract shall be
effective until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.
11. GOVERNING LAW. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
12. 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 adviser to the Fund with
respect to such series of shares.
13. LIMITATION OF SHAREHOLDER LIABILITY. It is expressly agreed that the
obligations of the Fund hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Fund personally,
but shall only bind the assets and property of the Fund, as provided in the
Fund's Declaration of Trust. The execution and delivery of this Contract have
been authorized by the Trustees of the Fund and shareholders of the Funds, and
this Contract has been executed and delivered by an authorized officer of the
Fund acting as such; neither such authorization by such Trustees and
shareholders nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, but shall bind only the assets and property of the Fund, as
provided in the Fund's Declaration of Trust.
14. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person,"
assignment," "broker," "dealer," "investment adviser, "national securities
exchange," "net assets," "prospectus," "sale," sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: [FUND]
- ---------------------- By:
-------------------------------------
Name:
Title:
Attest: A I M ADVISORS, INC.
- ---------------------- By:
-------------------------------------
Name:
Title:
5
<PAGE>
APPENDIX A
TO
MASTER INVESTMENT ADVISORY AGREEMENT
OF
[FUND]
The Fund shall pay the Adviser, as full compensation for all services
rendered and all facilities furnished hereunder, a management fee for such Fund
set forth below. Such fee shall be calculated by applying the following annual
rates to the average daily net assets of the Fund for the calendar year computed
in the manner used for the determination of the net asset value of shares of the
Fund.
[FUND]
Net Assets Annual Rate
- ---------- -----------
First $... million . . . . . . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . . . . . . ____%
Over $... million . . . . . . . . . . . . . . . . . . . . . . . . ____%
<PAGE>
EXHIBIT B
[NAME OF FUND]
SUB-ADVISORY CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
[CHANCELLOR LGT ASSET MANAGEMENT, INC. - NAME TO BE CHANGED]
Contract made as of ________, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and [Chancellor LGT Asset Management, Inc. -
name to be changed], a California corporation ("Sub-Adviser").
WHEREAS Adviser has entered into an Investment Management Contract with
["Fund"], a closed-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser to furnish
certain advisory services to the Fund, and Sub-Adviser is willing to furnish
such services;
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. Adviser hereby appoints Sub-Adviser as sub-adviser of the
Fund for the period and on the terms set forth in this Contract. Sub-Adviser
accepts such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. DUTIES AS SUB-ADVISER.
(a) Subject to the supervision of the Fund's Board of Trustees ("Board")
and Adviser, the Sub-Adviser will provide a continuous investment program for
the Fund, including investment research and management, for all securities and
investments and cash equivalents of the Fund. The Sub-Adviser will determine
from time to time investments to be purchased, retained or sold with respect to
the Fund., and the brokers and dealers through whom trades will be executed.
(b) Sub-Adviser agrees that in placing orders with brokers and dealers it
will attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation Sub-Adviser may, in its discretion, purchase and
sell portfolio securities to and from brokers and dealers who provide the Fund
or Sub-Adviser's other clients with research, analysis, advice and similar
services. Sub-Adviser may pay to brokers and dealers, in return for research and
analysis, a higher commission or spread than may be charged by other brokers and
dealers, subject to Sub-Adviser's determining in good faith that such commission
or spread is reasonable in terms either of the particular transaction or of the
overall responsibility of Sub-Adviser to the Fund and its other clients and that
the total commissions or spreads paid by the Fund will be reasonable in relation
to the benefits to the Fund over the long term. In no instance will portfolio
securities be purchased from or sold to Sub-Adviser or any affiliated person
thereof except in accordance with the federal securities laws and the rules and
regulations thereunder and any exemptive orders currently in effect. Whenever
Sub-Adviser simultaneously places orders to purchase or sell the same security
on behalf of the Fund and one or more other accounts advised by Sub-Adviser,
such orders will be allocated as to price and amount among all such accounts in
<PAGE>
a manner believed to be equitable to each account. The Fund recognizes that in
some cases this procedure may adversely affect the results obtained for the
Fund.
(c) Sub-Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Fund, and will furnish the Board
with such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, Sub-Adviser
hereby agrees that all records which it maintains for the Fund are the property
of the Fund, agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any records which it maintains for the Fund and which are required
to be maintained by Rule 31a-1 under the 1940 Act, and further agrees to
surrender promptly to the Fund any records which it maintains for the Fund upon
request by the Fund.
3. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Sub-Adviser will act in conformity with the Declaration of Trust,
By-Laws and Registration Statement of the Fund and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
4. SERVICES NOT EXCLUSIVE. The services furnished by Sub-Adviser hereunder
are not to be deemed exclusive and Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Sub-Adviser, who may also be a Trustee, officer
or employee of the Fund, to engage in any other business or to devote his or her
time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.
5. EXPENSES.
(a) During the term of this Contract, the Fund will bear all expenses, not
specifically assumed by Sub-Adviser.
(b) Expenses borne by the Fund will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or soled by the Fund and any losses incurred in connection
therewith; (ii) fees payable to and expenses incurred on behalf of the Fund by
Sub-Adviser under this Contract; (iii) investment consulting fees and related
costs; (iv) expenses of organizing the Fund; (v) costs incurred in connection
with the issuance, sale or repurchase of the Fund's shares of beneficial
interest; (vi) filing fees and expenses relating to the registration and
qualification of the Fund's shares and the Fund under federal and/or state
securities laws and maintaining such registrations and qualifications; (vii)
expenses of preparing and filing reports and other documents with governmental
and regulatory agencies; (viii) fees and salaries payable to the Fund's Trustees
who are not parties to this Contract or interested persons of any such party
("Independent Trustees"); (ix) all expenses incurred in connection with the
Independent Trustees' services, including travel expenses; (x) taxes (including
any income or franchise taxes) and governmental fees; (xi) costs of any
liability, uncollectible items of deposit and other insurance and fidelity
bonds; (xii) any costs, expenses or losses arising out of a liability of or
claim for damages or other relief asserted against the Fund for violation of any
law; (xiii) interest charges; (xiv) legal, accounting and auditing expenses,
including legal fees of special counsel for the Independent Trustees; (xv)
charges of administrators, custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii) costs
of preparing share certificates (xviii) expenses of setting in type, printing
and mailing reports, notices and proxy materials for existing shareholders;
(xix) expenses of obtaining and maintaining securities exchange listings of the
Fund's shares of beneficial interest; (xx) any extraordinary expenses (including
fees and disbursements of counsel, costs of actions, suits or proceedings to
which the Fund is a party and the expenses the Fund may incur as a result of its
2
<PAGE>
legal obligation to provide indemnification to its officers, Trustees, employees
and agents) incurred by the Fund; (xxi) fees, voluntary assessments and other
expenses incurred in connection with membership in investment company
organizations; (xxii) costs of mailing and tabulating proxies and costs of
meetings of shareholders, the Board and any committees thereof; (xxiii) the cost
of investment company literature and other publications provided by the Fund to
its Trustees and officers; and (xxiv) costs of mailing, stationery and
communications equipment.
(c) Sub-Adviser will assume the cost of any compensation for services
provided to the Fund received by the officers of the Fund and by the Trustees of
the Fund who are not Independent Trustees.
(d) The payment or assumption by Sub-Adviser of any expense of the Fund
that Sub-Adviser is not required by this Contract to pay or assume shall not
obligate Sub-Adviser to pay or assume the same or any similar expense of the
Fund on any subsequent occasion.
7. COMPENSATION.
(a) For the services provided to the Fund under this Contract, the Adviser
shall pay the Sub-Adviser an annual fee, payable monthly, based upon the average
daily net assets of the Fund as forth in Appendix A attached hereto.
(b) The fee shall be computed daily and paid monthly to Sub-Adviser on or
before the last business day of the next succeeding calendar month.
(c) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
8. LIMITATION OF LIABILITY OF SUB-ADVISER AND INDEMNIFICATION. Sub-Adviser
shall not be liable for any costs or liabilities arising from any error of
judgment or mistake of law or any loss suffered by the Fund in connection with
the matters to which this Contract relates except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of Sub-Adviser in the
performance by Sub-Adviser of its duties or from reckless disregard by
Sub-Adviser of its obligations and duties under this Contract. Any person, even
though also an officer, partner, employee, or agent of Sub-Adviser, who may be
or become a Trustee, officer, employee or agent of the Fund, shall be deemed,
when rendering services to the Fund or acting with respect to any business of
the Fund to be rendering such service to or acting solely for the Fund and not
as an officer, partner, employee, or agent or one under the control or direction
of Sub-Adviser even though paid by it.
9. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect with respect to the Fund
unless it has first been approved (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of that Fund's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to the Fund, this Contract shall continue automatically
for successive periods not to exceed twelve months each, provided that such
continuance is specifically approved at least annually (i) by a vote of a
majority of the Independent Trustees, cast in person at a meeting called for the
3
<PAGE>
purpose of voting on such approval, and (ii) by the Board or by vote of a
majority of the outstanding voting securities of the Fund.
(c) Notwithstanding the foregoing, with respect to any Fund this Contract
may be terminated at any time, without the payment of any penalty, by vote of
the Board or by a vote of a majority of the outstanding voting securities of the
Fund on sixty days' written notice to Sub-Adviser or by Sub-Adviser at any time,
without the payment of any penalty, on sixty days' written notice to the Fund.
Termination of this Contract with respect to one Fund shall not affect the
continued effectiveness of this Contract with respect to any other Fund. This
Contract will automatically terminate in the event of its assignment.
10. AMENDMENT. No provision of this Contract may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.
11. GOVERNING LAW. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
12. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: A I M ADVISORS, INC.
- ------------------------ By:
-----------------------------------
Name:
Title:
Attest: CHANCELLOR LGT ASSET MANAGEMENT, INC.
[Name to be Changed]
- ------------------------ By:
-----------------------------------
Name:
Title:
4
<PAGE>
APPENDIX A
TO
SUB-ADVISORY CONTRACT
[FUND]
Net Assets Annual Rate
- ---------- -----------
First $... million . . . . . . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . . . . . . ____%
Over $... million . . . . . . . . . . . . . . . . . . . . . . . . ____%
