(File Nos. 33-52036 and 811-7164)
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 VARIABLE INVESTMENT TRUST
(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:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
-------------------------
5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
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<PAGE>
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
PRELIMINARY COPY
GT GLOBAL
A World of Opportunity
GT GLOBAL SPECIAL MEETING OF SHAREHOLDERS
50 California Street
27th Floor
San Francisco, CA 94111
APRIL 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 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 including LGT
Asset Management and Chancellor LGT Asset Management, collectively known as the
Asset Management Division (AMD) of Liechtenstein Global Trust - by AMVESCAP PLC,
the parent corporation of A I M Management Group and INVESCO. A special meeting
of GT Global Variable Investment Series and GT Global Variable Investment Trust
Shareholders (each a "Company;" collectively, the "Companies") regarding the
acquisition will be held on May 20, 1998.
Attached is the Notice and Proxy Statement for the Special Meeting which
describe a number of matters on which you, the Shareholder, are being asked to
vote: (i) election of each Company's Board of Trustees; (ii) approval of a new
investment management and administration agreement and a sub-advisory and
sub-administration agreement; (iii) approval of changes to fundamental
investment restrictions for the Funds; (v) approval of an agreement and plan of
conversion and termination for each Company; and (vi) ratification of the
selection of independent accountants. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU
APPROVE THESE PROPOSALS.
The proposed acquisition of the AMD by AMVESCAP offers the following
opportunities for Shareholders:
o Continuity of objectives, policies and procedures.
o Expanded investment team strength to manage your investments.
o Business synergies between the two organizations, including increased
product diversification, global brand enhancement and broadened geographic
coverage.
Your vote is important. Please take a moment now to sign and return your proxy
card(s) in the enclosed postage-paid envelope. If you have any questions
concerning the proposals to be considered at the special meeting of GT Global
Variable Fund Shareholders on May 20, 1998, please contact General American Life
Insurance Company at 1-800-237-6580.
Sincerely,
William J. Guilfoyle
CHAIRMAN OF THE BOARD AND PRESIDENT
<PAGE>
GT GLOBAL
A World of Opportunity
GT GLOBAL SPECIAL MEETING OF SHAREHOLDERS
50 California Street
27th Floor
San Francisco, CA 94111
APRIL 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 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 including LGT
Asset Management and Chancellor LGT Asset Management, collectively known as the
Asset Management Division (AMD) of Liechtenstein Global Trust - by AMVESCAP PLC,
the parent corporation of A I M Management Group and INVESCO. A special meeting
of GT Global Variable Investment Series and GT Global Variable Investment Trust
Shareholders (each a "Company"; collectively, the "Companies") regarding the
acquisition will be held on May 20, 1998.
Attached is the Notice and Proxy Statement for the Special Meeting which
describe a number of matters on which you, the Shareholder, are being asked to
vote: (i) election of each Company's Board of Trustees; (ii) approval of a new
investment management and administration agreement and a sub-advisory and
sub-administration agreement; (iii) approval of changes to fundamental
investment restrictions for the Funds; (v) approval of an agreement and plan of
conversion and termination for each Company; and (vi) ratification of the
selection of independent accountants. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU
APPROVE THESE PROPOSALS.
The proposed acquisition of the AMD by AMVESCAP offers the following
opportunities for Shareholders:
o Continuity of objectives, policies and procedures.
o Expanded investment team strength to manage your investments.
o Business synergies between the two organizations, including increased
product diversification, global brand enhancement and broadened geographic
coverage.
Your vote is important. Please take a moment now to sign and return your proxy
card(s) in the enclosed postage-paid envelope. If you have any questions
concerning the proposals to be considered at the special meeting of GT Global
Variable Fund Shareholders on May 20, 1998, please contact Security Equity Life
Insurance Company at 1-800-533-8282.
Sincerely,
William J. Guilfoyle
CHAIRMAN OF THE BOARD AND PRESIDENT
<PAGE>
GT GLOBAL
A World of Opportunity
GT GLOBAL SPECIAL MEETING OF SHAREHOLDERS
50 California Street
27th Floor
San Francisco, CA 94111
APRIL 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 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 including LGT
Asset Management and Chancellor LGT Asset Management, collectively known as the
Asset Management Division (AMD) of Liechtenstein Global Trust - by AMVESCAP PLC,
the parent corporation of A I M Management Group and INVESCO. A special meeting
of GT Global Variable Investment Series and GT Global Variable Investment Trust
Shareholders (each a "Company;" collectively, the "Companies") regarding the
acquisition will be held on May 20, 1998.
Attached is the Notice and Proxy Statement for the Special Meeting which
describe a number of matters on which you, the Shareholder, are being asked to
vote: (i) election of each Company's Board of Trustees; (ii) approval of a new
investment management and administration agreement and a sub-advisory and
sub-administration agreement; (iii) approval of changes to fundamental
investment restrictions for the Funds; (v) approval of an agreement and plan of
conversion and termination for each Company; and (vi) ratification of the
selection of independent accountants. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU
APPROVE THESE PROPOSALS.
The proposed acquisition of the AMD by AMVESCAP offers the following
opportunities for Shareholders:
o Continuity of objectives, policies and procedures.
o Expanded investment team strength to manage your investments.
o Business synergies between the two organizations, including increased
product diversification, global brand enhancement and broadened geographic
coverage.
Your vote is important. Please take a moment now to sign and return your proxy
card(s) in the enclosed postage-paid envelope. If you have any questions
concerning the proposals to be considered at the special meeting of GT Global
Variable Fund Shareholders on May 20, 1998, please contact American Enterprise
Life Insurance Company at 1-800-333-3437.
Sincerely,
William J. Guilfoyle
CHAIRMAN OF THE BOARD AND PRESIDENT
<PAGE>
GT GLOBAL
A World of Opportunity
GT GLOBAL SPECIAL MEETING OF SHAREHOLDERS
50 California Street
27th Floor
San Francisco, CA 94111
APRIL 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 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 including LGT
Asset Management and Chancellor LGT Asset Management, collectively known as the
Asset Management Division (AMD) of Liechtenstein Global Trust - by AMVESCAP PLC,
the parent corporation of A I M Management Group and INVESCO. A special meeting
of GT Global Variable Investment Series and GT Global Variable Investment Trust
Shareholders (each a "Company;" collectively, the "Companies") regarding the
acquisition will be held on May 20, 1998.
Attached is the Notice and Proxy Statement for the Special Meeting which
describe a number of matters on which you, the Shareholder, are being asked to
vote: (i) election of each Company's Board of Trustees; (ii) approval of a new
investment management and administration agreement and a sub-advisory and
sub-administration agreement; (iii) approval of changes to fundamental
investment restrictions for the Funds; (v) approval of an agreement and plan of
conversion and termination for each Company; and (vi) ratification of the
selection of independent accountants. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU
APPROVE THESE PROPOSALS.
The proposed acquisition of the AMD by AMVESCAP offers the following
opportunities for Shareholders:
o Continuity of objectives, policies and procedures.
o Expanded investment team strength to manage your investments.
o Business synergies between the two organizations, including increased
product diversification, global brand enhancement and broadened geographic
coverage.
Your vote is important. Please take a moment now to sign and return your proxy
card(s) in the enclosed postage-paid envelope. If you have any questions
concerning the proposals to be considered at the special meeting of GT Global
Variable Fund Shareholders on May 20, 1998, please contact American Centurion
Life Assurance Company at 1-800-504-0469.
Sincerely,
William J. Guilfoyle
CHAIRMAN OF THE BOARD AND PRESIDENT
<PAGE>
IMPORTANT NEWS FOR GT GLOBAL SHAREHOLDERS
We encourage you to read the attached proxy statement in full; however, the
following questions and answers represent some typical concerns that
shareholders might have regarding this proxy statement.
WHY HAVE I BEEN SENT THIS PROXY STATEMENT?
As you may know, AMVESCAP, the parent corporation of AIM Management Group Inc.
and INVESCO Plc., has entered into an agreement with Liechtenstein Global Trust
("LGT") pursuant to which AMVESCAP will acquire LGT's Asset Management Division,
which includes Chancellor LGT Asset Management, Inc. and GT Global, Inc. In
connection with this acquisition, certain changes are being recommended with
respect to the GT Global Variable Investment Series and GT Global Variable
Investment Trust (each a "Company;" collectively, the "Companies") which may
only be implemented if approved by shareholders.
WHAT AM I BEING ASKED TO VOTE ON?
The proposals you are being asked to vote on are:
1. Election of the Board of Trustees
2. Approval of a new investment management and administration agreement
3. Approval of a sub-advisory and sub-administration agreement
4. Approval of changes to the fundamental investment restrictions
5. Reorganization of the Companies into Delaware business trusts
6. Ratification of the selection of independent public accountants
HOW WILL THE ACQUISITION OF LGT'S ASSET MANAGEMENT DIVISION BY AMVESCAP AFFECT
ME?
The Boards of the GT Global Variable Funds believe that the acquisition will be
beneficial to shareholders of the Funds for a number of reasons, including:
o AIM's performance record as an investment manager and reputation in
the industry
o Access to a wider selection of investment choices for shareholders,
including approximately 55 funds in the AIM group
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.
WHAT IS THE BENEFIT OF REORGANIZING THE COMPANIES AS DELAWARE BUSINESS TRUSTS?
The reorganizations are being proposed primarily to modernize the organizational
documents under which the Companies operate; the reorganization will not
substantially affect the way your Fund operates. The Board of your Company
believes that the Delaware business trust form of organization offers a number
of advantages over the Company's current form of organization, including greater
<PAGE>
flexibility to conduct business without expensive proxy solicitations to
shareholders and limitation of potential shareholder liability. Also, since many
AIM Funds are organized as Delaware business trusts, administrative efficiencies
and consistency among the Funds would be achieved.
HOW WILL THE EXPENSES FOR MY FUND BE AFFECTED?
The fees and expenses payable by your Fund are not expected to increase as a
result of any of the changes you are voting on.
HOW DOES THE BOARD 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)
OR
You may call in your vote to Shareholder Communications at (SC 800 number)
WHY ARE MULTIPLE PROXY CARDS ENCLOSED?
You have been sent a proxy card for each Fund you own, because each requires a
separate vote. Please sign, date and return each proxy card.
WHEN IS THE DEADLINE FOR VOTING?
All votes must be received by May 20, the date of the Shareholder Meeting.
<PAGE>
PRELIMINARY COPY
G.T. GLOBAL VARIABLE INVESTMENT SERIES
G.T. GLOBAL VARIABLE INVESTMENT TRUST
50 CALIFORNIA STREET
27TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1998
TO THE SHAREHOLDERS:
Notice is hereby given that a Special Meeting of Shareholders (the
"Special Meeting") of each of the above-listed investment companies
("Companies") will be held at 50 California Street, 26th Floor, San Francisco,
California, on May 20, 1998, at 1:00 p.m., Pacific time, for the following
purposes:
(1) To elect each Company's Board of Trustees;
(2) To approve a new investment management and administration agreement
and sub-advisory and sub-administration agreement with respect to
each series of each Company (each, a "Fund," and collectively, the
"Funds");
(3) To approve changes to the fundamental investment restrictions of
each Fund;
(4) To approve an agreement and plan of conversion and termination with
respect to each Company;
(5) To ratify the selection of Coopers & Lybrand L.L.P. as each
Company's independent public accountants; and
(6) To transact such other business as may properly come before the
Special Meeting or any adjournment thereof.
Shareholders of record at the close of business on March 17, 1998, are
entitled to notice of, and to vote at, the Special Meeting. Your attention is
called to the accompanying Proxy Statement. Whether or not you attend the
Special Meeting, we urge you to PROMPTLY COMPLETE, SIGN AND RETURN THE ENCLOSED
PROXY CARD, so that a quorum will be present and a maximum number of shares may
be voted.
BY ORDER OF THE BOARDS,
HELGE KRIST LEE
SECRETARY
SAN FRANCISCO, CALIFORNIA
APRIL ____, 1998
- --------------------------------------------------------------------------------
YOUR VOTE IS VERY IMPORTANT. PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED
PROXY CARD PROMPTLY.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
G.T. GLOBAL VARIABLE INVESTMENT SERIES
G.T. GLOBAL VARIABLE INVESTMENT TRUST
50 CALIFORNIA STREET
27TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111
---------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
MAY 20, 1998
---------------------
This Proxy Statement is being furnished to shareholders of each of the
above-listed investment companies ("Companies") as well as variable annuity
contract owners who beneficially own interests therein, in connection with the
solicitation of proxies by the Boards of Trustees. These proxies are to be used
at the Special Meeting of Shareholders and at any adjournment thereof (the
"Special Meeting" or "Meeting") to be held at the offices of the Companies, 50
California Street, 26th Floor, San Francisco, California 94111, on May 20, 1998,
at 1:00 p.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 April ____, 1998.
Each Company is composed of one or more separate series or portfolios,
each of which is referred to herein as a "Fund." Shares of the Funds are offered
for investment exclusively to separate accounts ("Separate Accounts") that fund
the benefits under variable annuity contracts ("VA Contracts") offered by
certain life insurance companies ("Participating Insurance Companies"). In
accordance with their view of applicable law, the Participating Insurance
Companies will solicit voting instructions from the owners of the VA Contracts
relating to each Fund ("Contract Owners") with respect to the matters set forth
in this Proxy Statement. In connection with the solicitation of voting
instructions, the Participating Insurance Companies will furnish a copy of this
Proxy Statement to all Contract Owners.
The terminology used by the Companies varies, but for simplicity and
clarity each Company's shares of beneficial interest are referred to as "Shares"
and the holders of Shares are "Shareholders." Each Company's Board of Trustees
is referred to as a "Board" and the trustees are "Board Members." Each full
outstanding share of each Fund is entitled to one vote, and each fractional
outstanding share of each Fund is entitled to a proportionate share of one vote,
with respect to each proposal. Shares of each Fund shall vote on each proposal.
Information about the vote necessary with respect to each proposal is discussed
below in connection with the proposal.
Set forth below is a list reflecting the formal name of each Fund and the
short-hand name as used in this proxy statement and the proposals to be voted on
by the shareholders of the Funds.
G.T. GLOBAL VARIABLE INVESTMENT SERIES
NAME AS USED PROPOSALS APPLICABLE
FUND NAME IN THIS PROXY TO FUND
STATEMENT
GT Global Variable New Pacific New Pacific Fund All Proposals
Fund
GT Global Variable Europe Fund Europe Fund All Proposals
GT Global Variable America Fund America Fund All Proposals
GT Global Variable International International Fund All Proposals
Fund
GT Global Variable Money Market Money Market Fund All Proposals
Fund
2
<PAGE>
G.T. GLOBAL VARIABLE INVESTMENT TRUST
NAME AS USED PROPOSALS
FUND NAME IN THIS PROXY STATEMENT APPLICABLE
TO FUND
GT Global Variable Latin America Fund Latin America Fund All Proposals
GT Global Variable Infrastructure Infrastructure Fund All Proposals
Fund
GT Global Variable Natural Resources Natural Resources Fund All
Fund Proposals
GT Global Telecommunications Fund Telecommunications Fund All Proposals
GT Global Variable Growth & Income Growth and Income Fund All Proposals
Fund
GT Global Variable Strategic Income Strategic Income Fund All
Fund Proposals
GT Global Variable Emerging Markets Emerging Markets Fund All Proposals
Fund
GT Global Variable Global Government Global Government Fund All Proposals
Fund
GT Global Variable U.S. Government U.S. Government Income All Proposals
Income Fund Fund
If the accompanying proxy card is properly executed and returned in time
to be voted at the Special Meeting, the shares covered thereby will be voted in
accordance with the instructions marked thereon. Executed proxies that are
unmarked will be voted in favor of the nominees for Board Members; in accordance
with the recommendation of the Board 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 Special Meeting or any adjournments
thereof. All shares of the Funds held on behalf of Contract Owners will be voted
by the Participating Insurance Companies in accordance with voting instructions
received from Contract Owners. The Participating Insurance Companies will vote
shares of the Funds that they are entitled to vote for which no voting
instructions are received in the same proportion as shares of the Funds for
which instructions have been received.
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 Company or
by the issuance of a subsequent proxy. To be effective, such revocation must be
received by the Secretary of the Company prior to the Special Meeting. In
addition, a shareholder may revoke a proxy by attending the Meeting and voting
in person. The solicitation of proxies will be made primarily by mail but also
may be made by telephone, telegraph, telecopy and personal interviews.
Authorization to execute proxies may be obtained by telephonic or electronically
transmitted instructions.
The presence in person or by proxy of Shareholders 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.
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.
Information as to the number of outstanding shares of each Fund as of the
record date, March 17, 1998 ("Record Date"), is set forth in Exhibit A.
3
<PAGE>
As of March 17, 1998, the following insurance companies owned, on behalf
of the Separate Accounts, more than 5% of the Funds' outstanding shares:
G.T. GLOBAL VARIABLE INVESTMENT SERIES
PERCENTAGE OF
FUND NAME INSURANCE COMPANY NUMBER OUTSTANDING
NAME AND ADDRESS OF SHARES SHARES
GT Global Variable New General American
Pacific Fund Life Insurance
Company
700 Market Street
St. Louis, MO
63103
GT Global Variable Europe Security Equity
Fund Life Insurance
Company
GT Global Variable America American
Fund Enterprise Life
GT Global Variable
International Fund
GT Global Variable Money
Market Fund
G.T. GLOBAL VARIABLE INVESTMENT TRUST
<TABLE>
<CAPTION>
PERCENTAGE OF
INSURANCE COMPANY NUMBER OUTSTANDING
FUND NAME NAME AND ADDRESS OF SHARES SHARES
<S> <C> <C> <C>
GT Global Variable Latin America Fund
GT Global Variable Infrastructure Fund
GT Global Variable Natural Resources
Fund
GT Global Telecommunications Fund
GT Global Variable Growth & Income
Fund
GT Global Variable Strategic Income
Fund
GT Global Variable Emerging Markets
Fund
GT Global Variable Global Government
Fund
GT Global Variable U.S. Government
Income Fund
</TABLE>
PROPOSAL NO. 1: ELECTION OF BOARD MEMBERS
RELEVANT FUNDS. Proposal 1 applies to all Funds.
PROPOSAL. It is the intention of each proxyholder named on the
accompanying proxy card to vote FOR the election of the nominees listed below
unless the Shareholder or Contract Owner specifically indicates on his or her
proxy card a desire to withhold authority to vote for any nominee. The Boards do
not contemplate that any of the nominees who have consented to being nominated
will be unable to serve as Board Members for any reason, but if that should
occur prior to the Meeting, the proxies will be voted for such other nominee(s)
as the Boards may recommend. If elected, each nominee will hold office until
his/her successor is duly elected and qualified.
Messrs. Anderson, Bayley and Patterson and Miss Quigley have served as
Board Members for each Company since February 1993. Mr. Guilfoyle, President of
GT Global, Inc., the principal distributor of the GT Global Mutual Funds ("GT
Global"), has served as a Board Member since February 1997.
4
<PAGE>
INFORMATION REGARDING NOMINEES FOR ELECTION AT THE SPECIAL MEETING
<TABLE>
<CAPTION>
NAME, AGE, BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS AND OTHER POSITION(S) WITH THE
DIRECTORSHIPS COMPANIES
- ---------------------------------------------------------------------- ---------------------------------
<S> <C>
William J. Guilfoyle, Age 39* Board Member and Chairman of
Mr. Guilfoyle is President, GT Global since 1995; Director, GT the Board
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.
C. Derek Anderson, Age 56 Board Member
Mr. Anderson is President, Plantagenet Capital Management, LLC (an
investment partnership); Chief Executive Officer, Plantagenet
Holdings, Ltd. (an investment banking firm); Director, Anderson
Capital Management, Inc., since 1988; Director, PremiumWear, Inc.
(formerly Munsingwear, Inc.) (a casual apparel company); and
Director, "R" Homes, Inc. and various other companies. Mr. Anderson
is also a director or trustee of each of the other investment
companies registered under the 1940 Act that is managed or
administered by Chancellor LGT.
Frank S. Bayley, Age 58 Board Member
Mr. Bayley is a partner of the law firm of Baker & McKenzie; and
Director and Chairman, C.D. Stimson Company (a private investment
company). Mr. Bayley also is a director or trustee of each of the
other investment companies registered under the 1940 Act that is
managed or administered by Chancellor LGT.
Arthur C. Patterson, Age 54 Board Member
Mr. Patterson is a Managing Partner, Accel Partners (a venture
capital firm). He also serves as a director of Viasoft and
PageMart, Inc. (both public software companies), as well as several
other privately held software and communications companies. Mr.
Patterson also is a director or trustee of each of the other
investment companies registered under the 1940 Act that is managed
or administered by Chancellor LGT.
5
<PAGE>
NAME, AGE, BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS AND OTHER POSITION(S) WITH THE
DIRECTORSHIPS COMPANIES
- ---------------------------------------------------------------------- ---------------------------------
Ruth H. Quigley, Age 62 Board Member
Miss Quigley is a private investor. From 1984 to 1986, she was
President of Quigley Friedlander & Co., Inc. (a financial advisory
services firm). Miss Quigley also is a director or trustee of each of
the other investment companies registered under the 1940 Act that is
managed or administered by Chancellor LGT.
</TABLE>
*Mr. Guilfoyle is deemed to be an "interested person" of the Companies, as
defined in the Investment Company Act of 1940, as amended ("1940 Act"), by
virtue of his association with GT Global and Chancellor LGT Asset Management,
Inc. ("Chancellor LGT"), the Companies' investment manager and administrator, or
their affiliates.
The above information provides each Board Member's business experience
during at least the past five years. Corresponding information with respect to
the executive officers of the Companies is provided below. See "Other
Information -- Executive Officers of the Companies."
To the knowledge of each Company's management, as of the Record Date, the
Board Members and officers of each Company owned none of the outstanding shares
of each Fund.
There were [eight] meetings of the Boards held during each Company's
fiscal year ended December 31, 1997. Each Board has an Audit Committee comprised
of Miss Quigley and Messrs. Anderson, Bayley and Patterson. The purpose of the
Audit Committee is to oversee the annual audit of each Company and review the
performance of the Companies' independent accountants. During each Company's
last completed fiscal year, the Audit Committee met [once]. Each Board Member of
each Company attended at least 75% of the total number of meetings of the Board
and the Audit Committee.
Each Board Member serves in total as a director or trustee of 12
registered investment companies with 42 series managed or administered by
Chancellor LGT. Each Company pays each Board Member, who is not a director,
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 Board Member and reimburses travel and other out-of-pocket expenses
incurred in connection with attending such meetings. The table below summarizes
the compensation of the Companies' Board Members for the fiscal year ended
December 31, 1997.
6
<PAGE>
Compensation Table
G.T. GLOBAL VARIABLE INVESTMENT SERIES
Total Compensation From
Compensation The Company And The
Name Of Person(1) From The Company Complex(2)
- ----------------- ---------------- ----------
C. Derek Anderson.... $______ ______
Frank S. Bayley...... $______ ______
Arthur C. Patterson.. $______ ______
Ruth H. Quigley...... $______ ______
G.T. GLOBAL VARIABLE INVESTMENT TRUST
Total Compensation From
Compensation The Company And The
Name Of Person(1) From The Company Complex(2)
- ----------------- ---------------- ----------
C. Derek Anderson.... $______ ______
Frank S. Bayley...... $______ ______
Arthur C. Patterson.. $______ ______
Ruth H. Quigley...... $______ ______
(1) Mr. Guilfoyle received no compensation from any of the Companies.
(2) The Trustees do not receive any pension or retirement benefits as
compensation for their services to the Companies.
REQUIRED VOTE. With respect to each Company, a plurality of all the
votes cast at the meeting is required to elect each nominee.
EACH BOARD RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE BOARD MEMBERS
LISTED IN PROPOSAL 1.
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PROPOSAL NO 2: APPROVAL OF INVESTMENT MANAGEMENT AND
ADMINISTRATION AGREEMENTS AND SUB-ADVISORY AND SUB-ADMINISTRATION
AGREEMENTS
RELEVANT FUNDS. Proposal 2 applies to all Funds.
BACKGROUND. On January 30, 1998, Liechtenstein Global Trust, AG ("LGT"),
the indirect parent organization of Chancellor LGT and GT Global, Inc.
(together, "GT Global") and LGT Holding (International) AG, Zurich, entered into
an agreement (the "Purchase Agreement") with AMVESCAP PLC ("AMVESCAP") and AMD
Acquisition Corp. , pursuant to which AMVESCAP will acquire LGT's Asset
Management Division, which includes GT Global and certain other affiliates. In
connection with this transaction (the "Purchase"), and as required by the 1940
Act, shareholders of the Funds are being asked to approve new Investment
Management and Administration Agreements (collectively, the "New Management
Agreements") and new Sub-Advisory and Sub-Administration Agreements
(collectively, the "New Sub-Advisory Agreements") (the New Management Agreements
and the New Sub-Advisory Agreements are collectively referred to as the "New
Agreements"). Under the New Agreements, A I M Advisors, Inc. ("AIM"), a wholly
owned subsidiary of AMVESCAP, would serve as investment manager and
administrator, and Chancellor LGT (whose name would be changed following
consummation of the Purchase) would serve as sub-adviser and sub-administrator,
to each of the Funds. See "Information Concerning AIM and Chancellor LGT." Forms
of each of the New Agreements are attached hereto as Exhibits C and D. The Board
of each Company has approved the New Management Agreement and New Sub-Advisory
Agreement with respect to each Fund, subject to the approval of its respective
shareholders.
Chancellor LGT has served and currently serves as investment manager to
each of the Funds pursuant to investment management and administration contracts
(collectively, the "Current Management Contracts"). It currently serves as
investment manager to a total of __ investment company portfolios with
approximately $__ billion in assets as of _______, 1998. As a result of the
Purchase, the Current Management Contracts will automatically terminate. See
"Information Concerning AMVESCAP, AIM and Chancellor LGT."
At a meeting held on March __, 1998, the Boards of each Company, including
a majority of the members of the Boards of the Companies who would not be
"interested persons" (as defined in the 1940 Act) ("Independent Board Members"),
approved, subject to shareholder approval, the New Agreements. A description of
the New Agreements is provided below under "Terms of the New Agreements." Such
description is only a summary and is qualified by reference to the attached
Exhibits B and C. A summary of the Boards' considerations is provided below
under "Board Considerations."
In approving the New Agreements, the Boards took into account that,
except for the change in the investment manager and the establishment of
sub-advisory relationships, there are no material differences between the
provisions of the Current Management Contracts and the New Agreements. Further,
based on the representations of AIM and Chancellor LGT regarding their
intentions, the Boards do not anticipate currently that there will be
substantial changes in the way in which the Funds are managed or operated,
except as noted below. Following the Closing Date, AIM intends to carefully
study the investment performance of each of the Funds, as well as the combined
resources of AMVESCAP and Chancellor LGT, in order to determine what steps, if
any, may be taken to ensure strong investment performance of the Funds into the
future. It is anticipated that as a result of such study, AIM may recommend,
among other things, various actions such as reorganizations or mergers involving
certain Funds, as well as changes in or adjustments to the investment personnel
assigned to manage certain Funds. Any proposals along these lines would be
presented to the Boards for their approval. Moreover, implementation of certain
of these proposals may require shareholder approval.
If the conditions set forth in the Purchase Agreement are not met or
waived or if the Purchase Agreement is terminated, the Purchase will not be
consummated, and the Current Management Contracts will remain in effect. If the
New Agreements are approved, and the Purchase is thereafter consummated, the New
Agreements will be executed and become effective on or about the Closing Date,
as defined below.
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SHAREHOLDER APPROVAL REQUIREMENTS. Approval of the New Management
Agreement and New Sub-Advisory Agreement on behalf of each Fund requires the
affirmative vote of a "majority of the outstanding voting securities" of that
Fund, which for this purpose means the affirmative vote of the lesser of (i)
more than 50% of the outstanding shares of the Fund or (ii) 67% or more of the
shares of the Fund present at the meeting if more than 50% of the outstanding
shares of such Fund are represented at the meeting in person or by proxy.
Because for each Fund approvals of the New Management Agreement and the New
Sub-Advisory Agreement are completely contingent upon the approval of both, they
are to be considered as a single Proposal by shareholders. If the New Agreements
are not approved with respect to any Fund and the Purchase is consummated, the
Board of the relevant Company will determine what further action to take.
Because the Purchase is not contingent on the approval of the New Agreements, it
is possible that the Purchase will be consummated even if one or more Funds do
not approve the New Agreements. In such case, GT Global (including Chancellor
LGT) would be acquired by AMVESCAP and the Current Management Contracts would
automatically terminate. As a result, for any Fund or Funds that had not
approved the New Agreements, the Board would need to make new arrangements for
obtaining advisory services. Such steps could include the hiring of AIM and GT
Global to provide services on an interim basis, and AMVESCAP has indicated its
willingness to permit AIM and GT Global to provide such services if so
requested.
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.
BOARD CONSIDERATIONS. At a series of meetings with the Boards,
representatives of AMVESCAP, INVESCO Funds Group, Inc. ("INVESCO") (a wholly
owned subsidiary of AMVESCAP), AIM, Chancellor LGT and GT Global, Inc. discussed
with the Boards the anticipated effects of the Purchase on the advisory,
sub-advisory and related relationships with the Funds. At meetings in person
held on February 10, 17 and 25 and March 10-11 and 24, 1998, these
representatives provided information to Board Members concerning the specific
terms of the Purchase Agreement, the anticipated advisory and sub-advisory
relationships with the Funds, and the proposed plans for ongoing management and
operation of the Funds. Throughout this period, the Boards and their counsel
requested and received additional information from AIM, GT Global and their
counsel, and held telephone conferences regarding the Purchase and its potential
impact on the Funds and their shareholders.
9
<PAGE>
In connection with their review, the Boards obtained substantial
information regarding: the management, financial position and business of
AMVESCAP and AIM and their affiliates, including INVESCO; the history of AIM's
and its affiliates' business and operations; the performance of the investment
companies and private accounts advised by AIM, INVESCO and their respective
affiliates; the impact of the Purchase on the Funds and their shareholders; the
plans of AMVESCAP and its affiliates with respect to GT Global and the Funds;
performance and financial information about each of the Funds; and information
about other funds and their fees and expenses. The Boards also received
information regarding the terms of the Purchase and comprehensive financial
information including: AMVESCAP's plans for financing the Purchase; the impact
of the financing on AIM, as investment adviser; AIM's plans for the compensation
and retention of personnel currently employed by GT Global and the Transferred
Companies who currently provide services to the Companies, including an employee
stabilization plan being implemented at GT Global; and information concerning
employment contracts with senior management of GT Global.
In connection with their deliberations, the Boards evaluated the
above-referenced information and considered, among other things, the following
factors:
(1) the expectation that the investment objectives, policies and
management strategies of the Funds after the Purchase will not materially
change;
(2) the expectation that substantially the same investment teams and
management personnel will manage the Funds on a day-to-day basis through
Chancellor LGT as sub-adviser to the Funds, which will be supported where
appropriate by investment and other personnel of AMVESCAP, INVESCO, AIM and
their affiliates who are experienced in managing and administering similar
investment products;
(3) the expectation that the investment expertise available to the Funds
will be enhanced by the combined AMVESCAP/Chancellor LGT management team and, in
particular, that AIM's depth and experience in managing U.S. equity funds and
money market funds will complement Chancellor LGT's traditional strength in
managing global and foreign funds and that INVESCO's depth and experience in
managing global and foreign funds also will be available to Chancellor LGT;
(4) the continued employment of and retention incentives for senior
management of GT Global and the continued maintenance of investment personnel by
Chancellor LGT and its affiliates in multiple locations throughout the world;
(5) the ability of AMVESCAP to provide sufficient capital to support the
operations of AIM and GT Global and AMVESCAP's commitment to paying compensation
adequate to attract and retain top quality personnel;
(6) AIM's demonstrated capacity to market and distribute variable annuity
products, and its commitment to evaluate arrangements to enhance sales of the
Funds.
(7) the commitment of AIM to maintain the Funds' current expense caps for
at least two years and the expectation that the expense ratios of the Funds may
be reduced to the extent assets increase through increased sales and reduced
redemption levels;
(8) the additional administrative and shareholder services which can be
provided by a larger organization such as AIM;
(9) 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
(10) the continuity of experience offered by the Companies' Boards.
The Boards concluded that they could not assess the relative weight given
to each factor in making their determinations. In reaching their determinations,
the Boards also considered the fact that the new advisory and sub-advisory
relationships are intended to conform to the safe harbor provided by Section
15(f) of the 1940 Act for new advisory and other arrangements arising from the
sale of fund management businesses such as Chancellor LGT's. Under the Purchase
Agreement, AMVESCAP has agreed to conduct its business and, subject to the
fiduciary duties of the Funds, to use its reasonable best efforts to cause each
of its affiliates to conduct its business so as to assure that, insofar as is
within AMVESCAP's or its affiliates' control (i) for a period of three years
after the closing of the Purchase, at least 75% of the members of the Boards of
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<PAGE>
the Companies would be Independent Board Members; and (ii) for a period of two
years after the closing of the Purchase, there would not be imposed on the Funds
an "unfair burden" (as defined in the 1940 Act) as a result of the Purchase.
The Boards also evaluated the New Management Agreements and the New
Sub-Advisory Agreements. The Boards assured themselves that the New Agreements
for each of the Funds, including the terms relating to the services to be
provided and the fees and expenses payable by each such Fund, are not materially
different from the Current Management Contracts for each such Fund, except that
AIM rather than Chancellor LGT will be the investment manager and administrator
for each Fund and Chancellor LGT will be the sub-adviser and sub-administrator
for each Fund.
At the Board meetings held throughout February and March, 1998, the Boards
received presentations by AMVESCAP, AIM, INVESCO, Chancellor LGT, and GT Global,
Inc. and considered each of the foregoing factors. During this time period, the
Independent Board Members also met separately and conferred with their counsel,
who is not counsel to the Funds, AMVESCAP or its affiliates or Chancellor LGT or
its affiliates. Based upon these considerations, on March 24, 1998 the Boards
unanimously approved the New Management Agreements and the New Sub-Advisory
Agreements for the Funds and recommended approval by the shareholders.
TERMS OF THE NEW AGREEMENTS. If the New Agreements are approved by
shareholders as described herein, upon the closing of the Purchase, AIM will
serve as the investment manager and administrator to the Funds. With the
exception of the replacement of Chancellor LGT by AIM as the investment manager
and administrator, the New Management Agreements are substantially the same as
the Current Management Contracts in all material respects, except: (1) the New
Agreements are governed by Delaware law, while the Current Management Contracts
are governed by California law; (2) the New Management Agreement includes a
license provision that governs the use of the "AIM" name; the Current Management
Contracts contain no such provision; (3) the provision in Current Management
Contracts addressing oversight of Fund pricing and computation of net asset
value has been deleted from the New Agreements, since AIM and Chancellor LGT
will perform these functions directly; (4) a provision has been added to the New
Agreements allowing their amendment without shareholder approval when permitted
by the 1940 Act; (5) to reflect recent changes in governing federal and state
law, the New Management Agreements remove the state expense limitation
provisions found in the Current Management Agreements; and (6) the date of
effectiveness which, assuming Shareholder approval, would be on or about the
Closing Date.
AIM will be contractually obligated to provide the same services to each
Fund as are currently provided to each Fund by Chancellor LGT, in return for the
same advisory fees as are currently in place. AIM has further agreed that, for a
period of two years from the Closing Date, it will continue to limit each Fund's
expenses (exclusive of brokerage commissions, taxes, interest and extraordinary
expenses) to the annual rates noted on Exhibit D. As a result, the total
expenses incurred by Fund shareholders will remain capped at current levels for
two years following the closing of the Purchase.
Pursuant to the New Sub-Advisory Agreements, Chancellor LGT will serve as
sub-adviser and sub-administrator to the Funds upon approval of the Funds'
shareholders. Chancellor LGT would provide substantially all of the services for
the Funds that it currently provides. It would be paid sub-advisory fees by AIM,
not by the Fund.
Forms of the New Management Agreements and New Sub-Advisory Agreements are
attached hereto as Exhibits B and C. The descriptions of the New Agreements set
forth herein are qualified in their entirety by reference to Exhibits B and C.
Although the Current Management Contracts have not terminated and the New
Agreements have not become effective, the New Agreements are described below as
if they were both in effect.
Under the New Management Agreements, AIM will:
(a) subject to the supervision of each Company's Board, provide a
continuous investment program for each Fund, including investment research and
management with respect to all securities and investments and cash equivalents
of each Fund;
11
<PAGE>
(b) determine from time to time what securities and other investments will
be purchased, retained or sold by each Fund, and the brokers and dealers through
whom trades will be executed;
(c) oversee the maintenance of all books and records with respect to the
securities transactions of the Funds, and furnish the Board with such periodic
and special reports as the Board reasonably may request; and
(d) provide administrative services for each Fund subject to the
supervision of the Board. In this regard, AIM will supervise all aspects of the
operations of each Fund, including the oversight of custodial and other
services. At AIM's expense, AIM will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination of each Fund's prospectus,
statement of additional information, proxy material, tax returns and required
reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities. AIM
will provide the Companies and the Funds with, or obtain for them, adequate
office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items.
In performing its obligations under the New Management Agreements, AIM is
required to comply with all applicable laws. AIM shall not be liable and each
Fund shall indemnify AIM and its directors, officers and employees, for any
costs or liabilities arising from any error of judgment or mistake of law or any
loss suffered by the Funds or the Companies in connection with the matters to
which the New Management Agreements relate except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of AIM in the performance
by AIM of its duties or from reckless disregard by AIM of its obligations and
duties under the New Management Agreements. Any person, even though also an
officer, director, employee or agent of AIM, who may be or become an officer,
Board Member, employee or agent of a Company shall be deemed, when rendering
services to a Fund or a Company or acting with respect to any business of a Fund
or a Company, to be rendering such service to or acting solely for the Fund or
the Company and not as an officer, partner, employee, or agent or one under the
control or direction of AIM even though paid by it.
The New Management Agreements provide that all of the ordinary business
expenses not specifically assumed by AIM incurred in the operations of each of
the Funds and the offering of each of its shares shall be paid by each such
Fund. These expenses include but are not limited to brokerage commissions,
taxes, legal, accounting, auditing or governmental fees, custodian, transfer
agent and shareholder service agent costs. AIM will assume the cost of any
compensation for services provided to a Company received by the officers of the
Company and by the Trustees/Directors of the Company who are not Independent
Board Members.
The New Management Agreements for all Funds provide that, subject to the
approval of the Board of the applicable Company and the shareholders of the
applicable Fund, AIM may delegate any and all of its duties to a sub-adviser or
sub-administrator, provided that AIM shall continue to supervise the performance
of any such sub-adviser or sub-administrator. In this regard, AIM will enter
into New Sub-Advisory Agreements with Chancellor LGT. Pursuant to the New
Sub-Advisory Agreements, AIM intends to delegate all of its duties under the New
Management Agreements to Chancellor LGT. The New Sub-Advisory Agreements are
substantially the same in all material respects to the New Management
Agreements, and the description above of the duties and services to be performed
by AIM will apply to Chancellor LGT as Sub-Adviser and Sub-Administrator to the
Funds.
Information with regard to the fees payable under each of the New
Management Agreements is set forth in Exhibit D.
With respect to any Fund, the New Management Agreement and the New
Sub-Advisory Agreement may be terminated at any time without penalty by vote of
the applicable Board or by a vote of a majority of the outstanding voting
securities of the applicable Fund, on 60 days' written notice to AIM or
Chancellor LGT, respectively, or by AIM or Chancellor LGT, respectively, at any
time without penalty on 60 days' written notice to the applicable Company. Each
of the New Agreements will terminate automatically in the event of any
assignment, as defined by the 1940 Act. The New Agreements continue
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<PAGE>
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Board Members, cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the Board or by
vote of a majority of the outstanding voting securities of the applicable Fund.
ADDITIONAL SERVICES PROVIDED BY AIM AND ITS AFFILIATES. In addition to
AIM's investment management and administrative responsibilities under the New
Management Agreement, it is anticipated that a number of AIM affiliates will
provide services to the Funds if this Proposal 2 is approved by Shareholders.
GT Global, Inc. currently serves as principal underwriter of the variable
annuity contracts for which the Funds serve as funding vehicles. It is
anticipated that on or about the Closing Date, A I M Distributors, Inc. ("AIM
Distributors") would assume GT Global's role as principal underwriter for the
variable annuity contracts.
It is currently anticipated that during September, 1998, A I M Fund
Services, Inc. ("AIM Services"), a wholly owned subsidiary of AIM, would
commence serving as transfer agent for the Funds. GT Global Investor Services,
Inc. will continue to serve as transfer agent for the Funds until AIM Services
assumes that role.
The agreements pursuant to which Chancellor LGT serves as accounting and
pricing agent for the Funds will also terminate as a result of the Purchase. It
is anticipated that the Board will approve 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
and administration of the Funds. The corporate headquarters of AMVESCAP are
located at 11 Devonshire Square, London EC2M 4YR, England.
AIM was organized in 1976 and, together with its affiliates, currently
advises over 50 investment company portfolios (the "AIM Funds"). As of December
31, 1997, the total assets of the AIM Funds were approximately $83 billion. AIM
is a wholly owned subsidiary of A I M Management Group Inc. ("AIM Management").
Certain of the Directors and officers of AIM are also Trustees/Directors and
executive officers of the AIM Funds. The address of AIM, all of the Directors of
AIM, AIM Distributors, AIM Services, and AIM Management, is 11 Greenway Plaza,
Suite 100, Houston, TX 77046-1173.
Chancellor LGT currently provides investment management and/or
administration services to the Funds. Chancellor LGT and its worldwide asset
management affiliates have provided investment management and/or administrative
services to institutional, corporate and individual clients around the world
since 1969. As of December 31, 1997, Chancellor LGT and its worldwide affiliates
managed approximately $54 billion in assets. In the United States, as of
December 31, 1997, Chancellor LGT managed or administered approximately $8
billion of assets of the Funds and several other registered investment
companies, including three closed-end funds, and sub-advised one other
registered investment company. In addition to the investment resources of its
San Francisco and New York offices, Chancellor LGT draws upon the expertise,
personnel, data and systems of other investment offices of LGT's Asset
Management Division in Frankfurt, Hong Kong, London, Singapore, Sydney, Tokyo
and Toronto. In managing the Funds, Chancellor LGT generally employs a team
approach, taking advantage of its investment resources around the world in
seeking each Fund's investment objective. The U.S. offices of Chancellor LGT are
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located at 50 California Street, 27th Floor, San Francisco, CA 94111 and 1166
Avenue of the Americas, New York, NY 10036.
Chancellor LGT and its worldwide affiliates, including LGT Bank in
Liechtenstein, compose Liechtenstein Global Trust. Liechtenstein Global Trust is
a provider of global asset management and private banking products and services
to individual and institutional investors. Liechtenstein Global Trust is
controlled by the Prince of Liechtenstein Foundation, which serves as the parent
organization for the various business enterprises of the Princely Family of
Liechtenstein. The principal business address of the Prince of Liechtenstein
Foundation is Herrengasse 12, FL-9490, Vaduz, Liechtenstein.
EACH BOARD RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" PROPOSAL 2.
PROPOSAL NO. 3: APPROVAL OF CHANGES TO CERTAIN FUNDAMENTAL INVESTMENT
RESTRICTIONS OF EACH FUND
RELEVANT FUNDS AND PROPOSAL. Changes are proposed to the fundamental
investment restrictions ("fundamental restrictions") of all Funds, but some of
the proposed changes apply only to certain Funds. See "Proposed Changes," below,
for listings of the Funds to which each specific change applies.
REASONS FOR THE PROPOSED CHANGES. Pursuant to the 1940 Act, each Fund has
adopted certain fundamental restrictions, which may be changed only with
shareholder approval. Restrictions and policies that a Fund has not specifically
designated as being fundamental are considered to be "non-fundamental" and may
be changed by the Boards without shareholder approval.
Several of the fundamental restrictions that the Funds have adopted
reflect regulatory, business or industry conditions, practices or requirements
that are no longer in effect In addition, other fundamental restrictions reflect
federal regulatory requirements that remain in effect but are not required to be
stated as fundamental, or in some cases even as non-fundamental, restrictions.
Also, as new Funds have been created over a period of years, substantially
similar fundamental restrictions often have been phrased in slightly different
ways, sometimes resulting in minor but unintended differences in effect or
potentially giving rise to unintended differences in interpretation.
Accordingly, the Boards have approved revisions to the Funds' fundamental
restrictions in order to simplify, modernize and make more uniform those
restrictions that are required to be fundamental. In several instances, existing
fundamental restrictions that are eliminated because they are not required to be
fundamental would be re-classified as non-fundamental restrictions.
The Boards believe that eliminating the disparities among the Funds'
fundamental restrictions will enhance management's ability to manage efficiently
and effectively the Funds' assets in changing regulatory and investment
environments. In addition, by reducing to a minimum those restrictions that can
be changed only by shareholder vote, each Fund will be able to avoid the costs
and delays associated with a shareholder meeting if the Boards decide to make
future changes to its investment policies. Although the proposed changes in
fundamental restrictions will allow the Funds greater investment flexibility to
respond to future investment opportunities, the Boards do not anticipate that
the changes, individually or in the aggregate, will result at this time in a
material change in the level of investment risk associated with an investment in
any Fund.
PROPOSED CHANGES. The following is the text and a summary description of
the proposed changes to the Funds' fundamental restrictions, together with the
text of those non-fundamental restrictions that would be adopted in connection
with the elimination of certain of the Funds' current fundamental restrictions.
The text below also describes those fundamental restrictions that are being
eliminated for which no corresponding non-fundamental restrictions is being
proposed. Any non-fundamental restriction may be modified or eliminated by the
Boards at any future date without any further approval of shareholders.
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Shareholders should note that for some Funds certain of the fundamental
restrictions that are treated separately below currently are combined within a
single existing fundamental restriction.
With respect to each Fund and each proposed fundamental or non-fundamental
restriction, if a percentage restriction is adhered to at the time of an
investment or transaction, a later increase or decrease in percentage resulting
from a change in the values of the Fund's portfolio securities or the amount of
its total assets will not be considered a violation of the restriction.
A. MODIFICATION OF FUNDAMENTAL RESTRICTION ON PORTFOLIO DIVERSIFICATION.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds other than Latin America
Fund, Growth and Income Fund, Strategic Income Fund, and Global Government
Income Fund.
PROPOSED CHANGE: Upon the approval of Proposal 3, a fundamental
restriction on portfolio diversification for each of the above-referenced
Funds would be added as follows:
"The Fund will not purchase securities of any one issuer if, as a
result, more than 5% of the Fund's total assets would be invested in
securities of that issuer or the Fund would own or hold more than 10% of
the outstanding voting securities of that issuer, except that up to 25% of
the Fund's total assets may be invested without regard to this limitation,
and except that this limitation does not apply to securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities or to
securities issued by other investment companies."
DISCUSSION: Each of the above-referenced Funds are "diversified" funds
under the 1940 Act and, accordingly, must have a fundamental restriction or
policy establishing percentage limitations with respect to investments in the
securities of any one issuer. Currently, none of these Funds has a fundamental
restriction on portfolio diversification (other than Emerging Markets Fund). The
proposed change would merely state, as a fundamental restriction, the
diversification standard each of the above-referenced Funds is already subject
to under the 1940 Act. The Emerging Markets Fund, which currently states its
diversification requirements as a fundamental policy, would modify the language
of its policy to conform to the language of the proposed fundamental policy. As
currently stated, the Emerging Market Fund's policy does not reflect the
statutory exception for investments in securities of government agencies or of
other investment companies.
B. MODIFICATION OF FUNDAMENTAL RESTRICTION ON CONCENTRATION.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds other than
Infrastructure Fund, Natural Resources Fund, and Telecommunications Fund.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on concentration for each of the above-referenced
Funds would be modified as follows:
"The Fund will not purchase any security if, as a result of that
purchase, 25% or more of the Fund's total assets would be invested in
securities of issuers having their principal business activities in the
same industry, except that this limitation does not apply to securities
issued or guaranteed by the U.S. government, its agencies or
instrumentalities."
DISCUSSION: The proposed changes to the above-referenced Funds'
fundamental restriction on concentration would eliminate minor inconsistencies
in the wording of the Funds' current restrictions on concentration.
C. CHANGE OF FUNDAMENTAL RESTRICTION ON CONCENTRATION
FUND TO WHICH THIS CHANGE APPLIES: Telecommunications Fund.
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PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on concentration for the Telecommunications Fund
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 change to the Telecommunication Fund's
fundamental restriction on concentration would change from concentrating in
investments in securities of issuers in the telecommunications industry to a
policy of not concentrating in investments in any particular industry. The
proposed change is intended to clarify that while the Fund invests primarily in
securities of companies engaged in the development, manufacture and sale of
telecommunications services or equipment, such investments cover multiple
industries and not a single industry. The proposed change is not intended to
have any impact on the Fund's operation.
D. MODIFICATION OF FUNDAMENTAL RESTRICTION ON ISSUING SENIOR SECURITIES
AND BORROWING MONEY.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on issuing senior securities and borrowing money for
each Fund would be modified as follows:
"The Fund will not issue senior securities or borrow money, except
as permitted under the 1940 Act and then not in excess of 33 1/3% of the
Fund's total assets (including the amount borrowed but reduced by any
liabilities not constituting borrowings) at the time of the borrowing,
except that the Fund may borrow up to an additional 5% of its total assets
(not including the amount borrowed) for temporary or emergency purposes."
DISCUSSION: The 1940 Act establishes limits on the ability of the Funds to
borrow money or issue "senior securities," a term that is defined, generally, to
refer to Fund obligations that have a priority over a Fund's shares of common
stock or beneficial interest with respect to the distribution of Fund assets or
the payment of dividends. Currently, the fundamental restriction for several of
the Funds is more limiting than required by the 1940 Act. The current
fundamental restriction for the Growth and Income Fund, Latin America Fund and
Global Government Income Fund prohibits each of those Funds from borrowing
except for temporary or emergency purposes. The current fundamental restriction
for the Growth and Income Fund and Latin America Fund also prohibits those Funds
from purchasing any security while borrowings in excess of 5% of each Fund's
total assets are outstanding. In addition, the current fundamental restriction
for the Global Government Income Fund limits borrowing to 30% of the Fund's
total assets and prohibits the Fund from purchasing any security while any
borrowings are outstanding.
The proposed changes would make the Funds' restriction on borrowing money
and issuing senior securities no more limiting than required by the 1940 Act.
The Board believes that changing the Funds' fundamental limitations in this
manner will provide flexibility for future contingencies. However, the Board
does not intend the change to affect the Funds' current operations. Accordingly,
the fundamental limitation of Global Government Income Fund, Latin America Fund
and Growth and Income Fund that prohibits the Funds from borrowing except for
temporary or emergency purposes will continue in effect as a non-fundamental
policy. Moreover, the fundamental limitation of Latin America Fund and Growth
and Income Fund that prohibits the Funds from purchasing portfolio securities
when borrowings exceed 5% of total assets will continue as a non-fundamental
policy. The current fundamental policy for the Global Government Income Fund
that prohibits the fund from purchasing any security while any borrowings are
outstanding would be eliminated and in its place would be added a modified
non-fundamental policy that would permit the Fund to purchase securities while
borrowings of up to 5% of the Fund's total assets are outstanding. This change
would give the Government Income Fund more flexibility to borrow in order to
meet redemption requests.
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Unlike the other Funds, Strategic Income Fund and U.S. Government Income
Fund may borrow for investment purposes. The proposed change to these Funds'
fundamental restriction on borrowing will not affect their ability to borrow for
investment purposes but will eliminate minor differences in the wording of these
Funds' current restriction.
The Global Government Income Fund, Strategic Income Fund, U.S. Government
Income Fund, Growth and Income Fund, and Latin America Fund, as part of their
fundamental restriction on borrowing, include as part of their restriction an
undertaking that they will reduce their borrowings within three days if the
asset coverage for each Fund's borrowings falls below 300%. The proposed
fundamental restriction eliminates this undertaking. Nevertheless, the 1940 Act
will continue to impose this requirement on all of the Funds.
The fundamental restriction for the Money Market Fund currently states
that the Fund "may not issue senior securities." Although this fundamental
restriction will be changed as described above, the Money Market Fund does not
currently intend to borrow money under any circumstances.
E. MODIFICATION OF FUNDAMENTAL RESTRICTION ON MAKING LOANS.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on making loans for each Fund would be modified as
follows:
"The Fund will not make loans, except through loans of portfolio
securities or through repurchase agreements, provided that for purposes of
this limitation, the acquisition of bonds, debentures, other debt
securities or instruments, or participations or other interests therein
and investments in government obligations, commercial paper, certificates
of deposit, bankers' acceptances or similar instruments will not be
considered the making of a loan."
DISCUSSION: The proposed changes to this fundamental restriction would
eliminate minor differences in the wording of the Funds' current restriction
making loans. In addition, the proposed restriction more completely describes
various types of debt instruments the Funds may purchase that do not constitute
the making of a loan.
In addition, Money Market Fund's current fundamental restriction on loans
contains an exception for loans "pursuant to contracts providing for the
compensation of service provided by compensated balances." This exception
applies to an arrangement whereby a fund reduces its custodian expenses through
its securities lending activities. In order to make the Funds' fundamental
restrictions more uniform, this language will be deleted. Deletion of this
language is not intended to affect the ability of the Money Market Fund to
engage in the activity covered by the language. Similarly, this restriction is
not intended to affect the ability of any Fund to engage in this activity.
F. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on underwriting securities for each Fund would be
modified as follows:
"The Fund will not engage in the business of underwriting securities
of other issuers, except to the extent that the Fund might be considered
an underwriter under the federal securities laws in connection with its
disposition of portfolio securities."
DISCUSSION: The proposed changes to this fundamental restriction would
eliminate minor differences in the wording of the Funds' current restriction
on underwriting securities.
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G. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS.
FUNDS TO WHICH THIS CHANGE APPLIES. All Funds.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on real estate investments for each Fund would be
modified as follows:
"The Fund will not purchase or sell real estate, except that
investments in securities of issuers that invest in real estate and
investments in mortgage-backed securities, mortgage participations or
other instruments supported by interests in real estate are not subject to
this limitation, and except that the Fund may exercise rights under
agreements relating to such securities, including the right to enforce
security interests and to hold real estate acquired by reason of such
enforcement until that real estate can be liquidated in an orderly
manner."
DISCUSSION: The proposed changes to this fundamental restriction would
eliminate minor differences in the wording of the Funds' current restriction on
real estate investments and would clarify the types of real estate related
securities that are permissible investments for each Fund. In addition, the
proposed restriction includes an exception that permits each Fund to hold real
estate acquired as a result of ownership of securities or other interests.
All of the Funds other than New Pacific Fund, Europe Fund, America Fund,
International Fund, Emerging Markets Fund, and Money Market Fund currently state
that the Fund may not "purchase or sell real estate, including real estate
limited partnerships." The proposed restriction eliminates the reference to real
estate limited partnerships. Thus, if the proposed change is approved, all of
the Funds would be able to invest in real estate limited partnerships. However,
for various tax reasons, the Funds do not intend to invest in real estate
limited partnerships. If such investments become available in the future, they
still would have to comply with a Fund's investment objective, policies and
limitations.
H. MODIFICATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN COMMODITIES.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on investing in commodities for each Fund would be
modified as follows:
"The Fund will not purchase or sell physical commodities, but the
Fund may purchase, sell or enter into financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments."
DISCUSSION: The proposed changes to this fundamental restriction are
intended to ensure that the Funds will have the maximum flexibility to enter
into hedging and other transactions utilizing financial contracts and derivative
products when doing so is permitted by the Funds' other investment policies. The
proposed restrictions would allow the Funds to respond to the rapid and
continuing development of derivative products. The proposed restriction broadens
the exception to the prohibition on buying and selling physical commodities to
cover all financial derivative instruments rather than only financial futures
and currency instruments.
The current fundamental restriction for the Money Market Fund prohibits
the Fund from engaging in option transactions. If Proposal 3 is approved, this
restriction will be deleted and the Fund would have greater flexibility to
engage in option transactions. The Money Market Fund, however, has no present
intention of engaging in option transactions. Moreover, the Money Market Fund is
subject to regulation as a money market fund under Rule 2a-7 under the 1940 Act,
which imposes significant restrictions on the types of securities in which the
Money Market Fund can invest.
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I. ELIMINATION OF FUNDAMENTAL RESTRICTION ON MARGIN TRANSACTIONS.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds.
PROPOSED CHANGE: Upon the approval of Proposal 3, existing fundamental
restrictions on engaging in margin transactions for each Fund would be
eliminated and each Fund would become subject to the following non-fundamental
restriction:
"The Fund will not purchase securities on margin, provided that the
Fund may obtain short-term credits as may be necessary for the clearance
of purchases and sales of securities; except that the Fund may make margin
deposits in connection with its use of financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments."
DISCUSSION: The Funds are not required to have a fundamental restriction
on margin transactions. Accordingly, it is proposed that the Funds' existing
fundamental restriction be replaced with a non-fundamental restriction. The
proposed non-fundamental restriction makes minor changes in wording from the
existing fundamental restriction and expands the list of margin transactions
excepted from the prohibition to include margin deposits in connection with
financial options and futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative instruments.
As discussed in Item S below, the current fundamental restriction on
margin transactions for Money Market Fund, New Pacific Fund, Europe Fund,
America Fund, and International Fund is combined with a restriction on short
sales that prohibit the Funds from making short sales except in connection with
their use of options, futures contracts, options thereon or forward currency
contracts. If Proposal 3 is approved, this restriction will be deleted and the
Funds would have greater flexibility to engage in short sales. These Funds,
however, have no present intention of engaging in short sales. The current
fundamental restriction on margin transactions for the Money Market Fund
prohibits purchasing securities on margin. If Proposal 3 is approved, this
restriction will be deleted and the Fund would have greater flexibility to
engage in margin transactions. The Money Market Fund, however, has no present
intention of engaging in margin transactions.
J. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN FUTURES
CONTRACTS.
FUNDS TO WHICH THIS CHANGE APPLIES: Global Government Income Fund and
Strategic Income Fund.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing fundamental
restriction on engaging in futures contracts for the Global Government Income
Fund and Strategic Income Fund would be eliminated and these Funds would become
subject to the following non-fundamental restriction:
"The Fund will not enter into a futures contract, if, as a result
thereof, more than 5% of the Fund's total assets (taken at market value at
the time of entering into the contract) would be committed to margin on
such futures contracts."
DISCUSSION: There is no legal requirement that the Global Government
Income Fund or the Strategic Income Fund have this fundamental restriction.
Accordingly, the Board believes that it should be made non-fundamental. The
non-fundamental restriction would be identical to the fundamental restriction
proposed to be eliminated and, thus, is not expected to have any impact on the
operations of the Funds. Establishing the restriction as non-fundamental,
however, would enable the Funds' Board to change this restriction in the future.
K. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN ILLIQUID
SECURITIES.
FUNDS TO WHICH THIS CHANGE APPLIES: Growth and Income Fund and Global
Government Income Fund.
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PROPOSED CHANGE: Upon the approval of Proposal 3, the existing fundamental
restriction on investing in illiquid securities for the above-referenced Funds
would be eliminated and these Funds would become subject to the following
non-fundamental restriction:
"The Fund will not purchase securities for which there is no readily
available market, or enter into repurchase agreements or purchase time
deposits maturing in more than seven days, or purchase OTC options or hold
assets set aside to cover OTC options written by the Fund, if immediately
after and as a result, the value of such securities would exceed, in the
aggregate, 15% of the Fund's net assets."
DISCUSSION: There is no legal requirement that these Funds have a
fundamental restriction on this subject. Accordingly the Board believes that it
should be made non-fundamental. The non-fundamental restriction would be
identical to the fundamental restriction proposed to be eliminated. Establishing
the restriction as non-fundamental, however, would enable the Funds' Board to
change this policy in the future.
L. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PLEDGING ASSETS.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing fundamental
restriction on pledging assets for each Fund would be eliminated and the Funds
would become subject to the following non-fundamental restriction:
"The Fund will not mortgage, pledge, or hypothecate any of its
assets, provided that this shall not apply to the transfer of securities
in connection with any permissible borrowing or to collateral arrangements
in connection with permissible activities."
DISCUSSION: The Funds are not required to have a fundamental restriction
with respect to the pledging of assets. In order to maximize the Fund's
flexibility in this area, the Boards believe that the Funds' restriction on
pledging assets should be made non-fundamental. The non-fundamental restriction
would be similar to the fundamental restriction proposed to be eliminated. The
Money Market Fund's non-fundamental restriction will no longer refer to an
exception for "borrowings as disclosed in the Fund's prospectus" since this
exception would be covered under the uniform non-fundamental restriction. The
Boards do not expect this change to have any impact on the Funds' operations.
M. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING SECURITIES ISSUED
BY OTHER INVESTMENT COMPANIES.
FUND TO WHICH THIS CHANGE APPLIES: Money Market Fund.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing fundamental
restriction on purchasing securities issued by other investment companies for
the Money Market Fund would be eliminated.
DISCUSSION: There is no legal requirement that the Money Market Fund
have a fundamental restriction on this subject. Accordingly, the Board
believes this investment restriction should be eliminated.
N. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING COMMON STOCKS,
PREFERRED STOCKS, WARRANTS OR OTHER EQUITY SECURITIES.
FUND TO WHICH THIS CHANGE APPLIES: Money Market Fund.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing fundamental
restriction on purchasing common stocks, preferred stocks, warrants or other
equity securities for the Money Market Fund would be eliminated.
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DISCUSSION: There is no legal requirement that the Money Market Fund have
a fundamental restriction on this subject. Moreover, the Money Market Fund is
regulated as a money market fund under Rule 2a-7 under the 1940 Act. Rule 2a-7
imposes substantive restrictions on the types, quality, and maturities of the
securities in which the Money Market Fund may invest. Accordingly, the Board
believes that this fundamental restriction is unnecessary and that it should be
deleted. This change is not expected to have any impact on the operations of the
Fund.
O. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTMENTS IN OIL, GAS AND
MINERAL LEASES AND PROGRAMS.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on investments in oil, gas or minerals for each Fund
would be eliminated.
DISCUSSION: The Funds are not required to have a fundamental restriction
with respect to oil, gas or mineral investments. In order to maximize each
Fund's flexibility in this area, the Board believes that each Fund's restriction
on oil, gas and mineral investments should be eliminated. This limitation was
imposed by state blue sky laws and NSMIA preempts that requirement.
Notwithstanding the elimination of this fundamental restriction, no Fund expects
to invest at this time in oil, gas and mineral leases and programs.
P. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING FOR THE PURPOSE OF
CONTROL.
FUNDS TO WHICH THIS CHANGE APPLIES: New Pacific Fund, Europe Fund,
America Fund, International Fund, Growth and Income Fund, Global Government
Income Fund, and Strategic Income Fund.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on investing for the purpose of control for each of
the above-referenced Funds would be eliminated.
DISCUSSION: The Boards propose to eliminate this fundamental restriction,
which prohibits each of the above-referenced Funds from investing in companies
for the purpose of exercising control or management. Elimination of this
restriction would clarify each Fund's ability to exercise freely its rights as a
shareholder of the companies in which it invests. No Fund, however, intends to
become involved in directing or administering the day-to-day operations of any
company.
Chancellor LGT believes that it should be able to communicate freely each
Fund's views as a shareholder on important matters of policy to a company's
management, its board of directors and its shareholders, when Chancellor LGT or
the Board believes that such action or policy may affect significantly the value
of its investment. The activities that each Fund might engage in, either
individually or with others, include seeking changes in a company's direction,
seeking the sale of a company or a portion of its assets, or participating in a
takeover effort or in opposition to a takeover effort. Chancellor LGT believes
that each Fund currently may engage in such activities without necessarily
violating this fundamental restriction. Nevertheless, the existence of the
investment restriction might give rise to a claim that such activities did in
fact constitute investing for control or management.
Q. ELIMINATION OF FUNDAMENTAL RESTRICTION ON PURCHASING SECURITIES OF
ISSUERS IN WHICH OFFICERS AND TRUSTEES OF EACH COMPANY AND ITS
AFFILIATES OWN SECURITIES.
FUNDS TO WHICH THIS CHANGE APPLIES: New Pacific Fund, Europe Fund,
America Fund, International Fund, Growth and Income Fund, Global Government
Income Fund, and Strategic Income Fund
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing fundamental
restriction on purchasing securities of issuers in which affiliates of the
Companies own securities for each of the above-referenced Funds would be
eliminated.
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DISCUSSION: There is no legal requirement that the Funds have this
fundamental restriction. Moreover, the Boards and Chancellor LGT do not believe
this restriction provides any safeguards against conflicts of interest that are
not covered under the Funds' Code of Ethics. Accordingly, the Boards believe
this restriction should be eliminated.
R. ELIMINATION OF FUNDAMENTAL RESTRICTION ON INVESTING IN SECURITIES OF
COMPANIES THAT HAVE BEEN IN OPERATION FOR LESS THAN THREE YEARS.
FUNDS TO WHICH THIS CHANGE APPLIES: Global Government Income Fund and
Strategic Income Fund.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing fundamental
restriction on investing in securities of companies that have been in operation
for less than three years for each of the above-referenced Funds would be
eliminated.
DISCUSSION: No Fund is required to have a fundamental restriction with
respect to investing in securities of companies that have been in operation for
less than three years. In order to maximize each Fund's flexibility in this
area, the Boards believe that each Fund's restriction on investments in such
companies should be eliminated. Notwithstanding the elimination of this
fundamental restriction, each Fund expects to continue to invest less than 5% of
its assets in securities of companies that have been in operation for less than
three years.
S. ELIMINATION OF FUNDAMENTAL RESTRICTION ON SELLING SECURITIES SHORT.
FUNDS TO WHICH THIS CHANGE APPLIES: Global Government Income Fund,
Strategic Income Fund, U.S. Government Income Fund, Money Market Fund, New
Pacific Fund, International Fund, Europe Fund and America Fund.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on selling securities short for the above-referenced
Funds would be eliminated.
DISCUSSION: No Fund is required to have a fundamental restriction with
respect to short sales of securities. In order to maximize the Government Income
Fund's and Strategic Income Fund's flexibility in this area, the Boards believe
that each Fund's restriction on short sales of securities should be eliminated.
Notwithstanding the elimination of this fundamental restriction, each Fund does
not expect 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.
T. ELIMINATION OF FUNDAMENTAL RESTRICTION ON JOINT PARTICIPATION IN A
SECURITIES TRADING ACCOUNT.
FUNDS TO WHICH THIS CHANGE APPLIES: New Pacific Fund, Europe Fund,
America Fund, and International Fund.
PROPOSED CHANGE: Upon the approval of Proposal 3, the existing
fundamental restriction on joint participation in a securities trading
account would be eliminated.
DISCUSSION: The above-referenced Funds currently have a fundamental
restriction against participation on a joint or joint and several basis in any
securities trading account. Joint activities by an investment company are
subject to regulation under the 1940 Act, and there is no legal requirement for
a Fund to have a fundamental restriction on this subject. In certain
circumstances, participation in joint trading accounts may be beneficial to the
Fund. In addition, it is contemplated that the Funds may participate in joint
trading accounts if shareholders approve the new management agreements described
in Proposals 2 and 3. Moreover, the Funds currently have, and may from time to
time seek to obtain, the benefit of exemptive relief from the SEC with respect
to certain joint activities. Accordingly, the Board wishes to ensure that the
Funds will not be more limited with respect to such transactions than is
required by law. Accordingly, the Boards have determined that this restriction
should be eliminated both as a fundamental and as a non-fundamental restriction.
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U. APPROVAL OF NEW FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTMENT OF
ALL OF EACH FUND'S ASSETS IN AN OPEN-END FUND.
FUNDS TO WHICH THIS CHANGE APPLIES: All Funds.
PROPOSED CHANGE: Upon the approval of Proposal 3, the following
fundamental investment policy on investing in an open-end fund would be added
for each Fund:
"Notwithstanding any other investment policy of the Fund, the Fund
may invest all of its investable assets (cash, securities and receivables
related to securities) in an open-end management investment company having
substantially the same investment objective, policies and limitations as
the Fund."
DISCUSSION: The Boards have approved, subject to shareholder approval, the
adoption of a new fundamental investment policy that would permit each Fund to
seek its investment objective by investing all of its investable assets in
another open-end fund.
At present the Boards have not considered any specific proposal to
authorize a Fund to invest its assets in this fashion. The Board will authorize
investing a Fund's assets in another open-end fund only if the Boards first
determine that is in the best interests of such Fund and its shareholders.
The purpose of this proposal is to enhance the flexibility of each Fund
and permit it to take advantage of potential efficiencies in the future
available through investment in another open-end fund This structure allows
several funds with different distribution pricing structures, but the same
investment objective, policies and restrictions, to combine their investments in
a pooled fund instead of managing them separately. This could lower the costs of
obtaining portfolio execution, custodial, investment advisory and other services
for the Fund and could assist in portfolio management to the extent the cash
flows of each investment vehicle offset each other or provide for less volatile
asset changes. Of course, such benefits may not occur.
At present, certain of the fundamental investment restrictions of each
Fund may prevent it from investing all of its assets in another registered
investment company and would require a vote of Fund shareholders before such a
structure could be adopted. To avoid the costs associated with a subsequent
shareholder meeting, the Boards recommend that shareholders vote to permit the
assets of any Fund to be invested in an open-end fund, without a further vote of
shareholders, but only if the Boards subsequently determine that such action is
in the best interests of the Fund and its shareholders. If the shareholders
approve this proposal, the fundamental restrictions of each Fund that currently
may prohibit investment in an open-end fund, in effect, would be modified to
permit such investment.
A Fund's methods of operation and shareholder services would not be
materially affected by its investment in an open-end fund, except that the
assets of the Fund might be managed as part of a larger pool. If a Fund invested
all of its assets in an open-end fund, it would hold only investment securities
issued by the open-end fund, and the open-end fund would invest directly in
individual securities of other issuers. The Fund otherwise would continue its
normal operations. The Board would retain the right to withdraw the Fund's
investments from the open-end fund and the Fund then would resume investing
directly in individual securities of other issuers as it does currently.
Chancellor LGT may benefit from the use of this structure if, as a result,
overall assets under management are increased (since management fees are based
on assets). Also, Chancellor LGT's expense of providing investment and other
services to the Funds may be reduced.
REQUIRED VOTE. Approval of each of the changes contemplated by Proposal 3
with respect to a Fund requires the affirmative vote of a "majority of the
outstanding voting securities" of that Fund, which for this purpose means the
affirmative vote of the lesser of (1) more than 50% of the outstanding shares of
the Fund or (2) 67% or more of the shares of the Fund present at the meeting if
more than 50% of the outstanding shares of the Fund are represented at the
meeting in person or by proxy. In addition to voting "for" or "against" the
entire Proposal 3, shareholders of any Fund also may vote against the changes
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proposed with respect to specific fundamental restrictions applicable to their
Fund in the manner indicated on the proxy card.
If the proposed changes are approved by shareholders of the respective
Funds at the Special Meeting, those changes will be effective upon appropriate
disclosure being made in the Funds' prospectus and statement of additional
information.
IF ONE OR MORE OF THE CHANGES CONTEMPLATED BY PROPOSAL 3 IS NOT APPROVED
BY SHAREHOLDERS OF A FUND, THE EXISTING FUNDAMENTAL RESTRICTION(S) OF THE FUND
WILL CONTINUE IN EFFECT FOR THAT FUND, BUT DISAPPROVAL OF ALL OR PART OF
PROPOSAL 3 BY THE SHAREHOLDERS OF ONE FUND WILL NOT AFFECT ANY APPROVALS OF
PROPOSAL 3 THAT ARE OBTAINED WITH RESPECT TO ANY OTHER FUND.
EACH BOARD RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" PROPOSAL 3.
PROPOSAL NO. 4: APPROVAL OF AN AGREEMENT AND PLAN
OF CONVERSION AND TERMINATION FOR EACH COMPANY
BACKGROUND. The Companies currently are organized as Massachusetts
business trusts. The Board of each Company has approved an Agreement and Plan of
Conversion and Termination ("Plan"), each of which provides for a series of
transactions (collectively, a "Reorganization") to convert each Fund of the
applicable Company to a series ("New Fund") of a newly created open-end
management investment company organized as a business trust ("New Trust") under
the Delaware Business Trust Act ("Delaware Act"). Under the Plans, each Fund
will transfer all its assets to a New Fund in exchange solely for voting shares
of beneficial interest in the New Fund and the New Fund's assumption of all the
Fund's liabilities. Attached to this Proxy Statement as Exhibit D is a form of
the Plan relating to the proposed Reorganizations.
The Reorganizations are being proposed primarily to modernize the
organizational documents under which they operate. As noted above, Chancellor
LGT, AIM, and the Boards believe that a number of benefits will be available to
the Funds and their shareholders once these documents conform to those of the
AIM Funds. The operations of each New Fund following the Reorganization will be
substantially identical to those of its predecessor Fund, except that each New
Fund's advisory arrangements will conform to the changes proposed in Proposal 2
and the fundamental and non-fundamental restrictions of each New Fund will
conform to the changes proposed in Proposal 3. Finally, as described below, the
Trust Instruments for the New Trusts will differ from the Declarations of Trust
of the Companies in certain respects that are expected to improve the Companies'
operations.
REASONS FOR THE PROPOSED REORGANIZATIONS. The Reorganizations are being
proposed because, as noted above, Chancellor LGT, AIM, and the Boards believe
that the Delaware business trust organizational form offers a number of
advantages over the Massachusetts business trust organizational form. As a
result of these advantages, the Delaware business trust organizational form has
been increasingly used by mutual funds, including many AIM Funds.
The Delaware business trust organizational form offers some advantages
over the Massachusetts business trust form. In particular, with respect to both
business trust law and corporate law generally, Delaware offers greater
specificity in its law and greater certainty than does Massachusetts law. The
Delaware Act also provides that shareholders of a Delaware business trust will
be entitled to the same limitation of personal liability extended to
stockholders of a Delaware corporation, while Massachusetts business trust law
does not limit the potential liability of Massachusetts business trust
shareholders. Delaware's limitation of liability may not be absolute, as it is
possible that a non-Delaware court would not uphold this provision of the
Delaware Act. However, the possibility of liability, which is remote for
Massachusetts business trust shareholders, appears to be even more remote for
Delaware business trust shareholders. [Finally, the Delaware business trust form
of organization has an advantage over the Massachusetts business trust forms in
that the Delaware Act limits inter-series liability in a multi-series business
24
<PAGE>
trust, so that the assets of one series of a New Trust (i.e., a New Fund)
expressly will be protected against claims by creditors and shareholders of
another series of that New Trust. The limit on such inter-series liability for
the Companies, under Massachusetts law, is not as clear.]
The Reorganizations will also have certain other effects on each Company,
its shareholders, and management, which are described below under "Certain
Comparative Information about the Companies and the New Trusts."
SUMMARY OF EACH PLAN. To accomplish the Reorganizations, each New Trust
will be formed as a Delaware business trust pursuant to a Trust Instrument, and
each New Fund will be established as a series of a New Trust. On the closing
date of the Reorganizations ("Closing Date"), each Fund will transfer all its
assets to a corresponding New Fund in exchange solely for a number of full and
fractional shares of the New Fund equal to the number of full and fractional
shares of the Fund then outstanding. Immediately thereafter, each Fund will
distribute those New Fund shares to its shareholders in complete liquidation and
will, as soon as practicable thereafter, be dissolved. Upon completion of the
Reorganizations, each shareholder of each Fund will own full and fractional
shares of the corresponding New Fund equal in number and aggregate net asset
value to the shares he or she held in the Fund.
Each Plan authorizes the applicable Company to acquire one share of each
New Fund and, as the sole initial shareholder prior to the Reorganization
thereunder: (1) to elect the Company's Board Members as the trustees of the New
Trust to serve without limit in time, except as they may resign or be removed by
action of the New Trust's trustees or shareholders; (2) to approve an investment
management and administration agreement that will be substantially identical to
the New Management Agreement described in Proposal 2; (3) to approve a
sub-advisory agreement that will be substantially identical to the New
Sub-Advisory Agreement described in Proposal 2; (4) to ratify the selection of
Coopers & Lybrand L.L.P., the Company's current accountants, as the New Trust's
independent certified public accountants.
Assuming approval of this Proposal by shareholders, it is currently
contemplated that the Closing Date for each Reorganization will be May 29, 1998.
However, the Closing Date for one or more of the Reorganizations may be another
date if circumstances warrant.
The obligations of each Company and each New Trust under each Plan are
subject to various conditions stated therein. To provide against unforeseen
events, each Plan may be terminated or amended at any time prior to the closing
of the Reorganization thereunder by action of the Board of the applicable
Company, notwithstanding the approval of the Plan by the shareholders of the
Company. However, no amendments may be made that would materially adversely
affect the interests of shareholders of any Fund. Each Company and New Trust may
at any time waive compliance with any condition contained in the Plan, provided
that the waiver does not materially adversely affect the interests of the
shareholders of any Fund.
INVESTMENT MANAGEMENT AND ADMINISTRATION AGREEMENT. Each Plan authorizes
the applicable Company, as the sole shareholder of the New Trust prior to the
Reorganization thereunder, to approve with respect to each New Fund a New
Management Agreement that will be substantially identical to that described in
Proposal 2. Information on the New Management Agreements, including a
description of the differences between them and the Current Management
Contracts, is set forth under Proposal 2. The form of the New Management
Agreement is Exhibit C to this Proxy Statement.
SUB-ADVISORY AGREEMENT. Each Plan authorizes the applicable Company, as
the sole shareholder of the New Trust prior to the Reorganization thereunder, to
approve with respect to each New Fund a New Sub-Advisory Agreement that will be
substantially identical to that described in Proposal 2. Information on the New
Sub-Advisory Agreement is set forth under Proposal 2. The form of the New
Sub-Advisory Agreement is Exhibit D to this Proxy Statement.
25
<PAGE>
CONTINUATION OF SHAREHOLDER ACCOUNTS AND PLANS. The New Trusts' transfer
agent will establish for each shareholder an account containing the appropriate
number of shares of each New Fund. Such accounts will be identical in all
respects to the accounts currently maintained by the Companies' transfer agent
for each shareholder of the Funds. Shares held in the Fund accounts will
automatically be designated as shares of the New Funds. Holders of share
certificates of each Fund will not need to exchange them for new certificates
after the Reorganizations, and certificates for Fund shares issued before the
Reorganizations will represent shares of the corresponding New Funds after the
Reorganizations. Shareholders of the Funds who are receiving payment under a
withdrawal plan with respect to Fund shares will retain the same rights and
privileges as to New Fund shares under each plan. Similarly, no further action
will be necessary to continue any automatic investment plan or retirement plan
currently maintained by a shareholder with respect to any Fund's shares.
FEDERAL INCOME TAX CONSEQUENCES. Each Company and New Trust will receive
an opinion of Kirkpatrick & Lockhart LLP substantially to the effect that the
Reorganization in which it participates will constitute a tax-free
reorganization under section 368(a)(1)(F) of the Code. Accordingly, the Funds,
the New Funds, and the shareholders of the Funds will recognize no gain or loss
for federal income tax purposes as a result of the Reorganizations. Shareholders
of the Funds should consult their tax advisors regarding the effect, if any, of
a Reorganization in light of their individual circumstances and as to state and
local consequences, if any, of a Reorganization.
APPRAISAL RIGHTS. Appraisal rights are not available to shareholders.
However, shareholders retain the right to redeem their shares of the Funds or
the New Funds, as the case may be, at any time before or after the
Reorganizations.
CERTAIN COMPARATIVE INFORMATION ABOUT THE COMPANIES AND THE NEW TRUSTS.
STRUCTURE OF THE NEW TRUSTS. Each New Trust will be established under the
laws of the State of Delaware by filing a certificate of trust in the office of
the Secretary of State of Delaware. Each New Trust will establish series
corresponding to and having identical designations as the series of its
predecessor Company, except to reflect the new proposed affiliations of the New
Funds with AIM and AMVESCAP. Each New Fund will have the same investment
objectives, policies, and restrictions as its predecessor Fund, except that each
of the New Fund's fundamental and nonfundamental restrictions will conform to
the changes proposed in Proposal 3 (assuming approval of that Proposal by the
shareholders). Each New Trust's fiscal year will be the same as that of its
predecessor Company. The New Trusts will not have any operations prior to the
Reorganizations. Initially, each Company will be the sole shareholder of its
corresponding New Trust.
As a Delaware business trust, each New Trust's operations will be governed
by its Trust Instrument and By-Laws, and applicable Delaware law rather than by
the Company's Declaration of Trust and By-Laws and applicable Massachusetts law.
Certain differences between the different domiciles and various forms of
organization are summarized below. The operations of each New Trust will
continue to be subject to the provisions of the 1940 Act and the rules and
regulations thereunder.
TRUSTEES AND OFFICERS OF THE NEW TRUSTS. Subject to the provisions of the
Trust Instrument, the business of each New Trust will be managed by its
trustees, who will serve indefinite terms and will have all powers necessary or
convenient to carry out their responsibilities. The responsibilities, powers,
and fiduciary duties of the trustees will be substantially the same as those of
the Board Members of each Company.
The trustees of each New Trust would be those persons elected at this
Special Meeting to serve as Board Members of its predecessor Company.
Information concerning the nominees for election as Board Members of each
Company, all of whom presently serve in such positions, is set forth under
Proposal 1. It is anticipated that the current officers of each Company will be
elected to serve as officers of its successor New Trust and will perform the
same functions following the Reorganizations that they now perform on behalf of
the Companies.
SHARES OF THE NEW TRUSTS. The beneficial interests in the New Funds will
be represented by transferable shares, par value $0.01 per share. Share
certificates will not be issued unless requested in writing by a shareholder.
26
<PAGE>
The trustees will have the power under the Trust Instrument to establish new
series and classes of shares; each Company's Board currently has a similar
right. Each Trust Instrument will permit the trustees to issue an unlimited
number of shares of each class and series. Each Company is substantially
identical to its successor New Trust with regard to the issuance of shares.
SHAREHOLDER MEETING REQUIREMENTS. Each Company's Declaration of Trust and
By-Laws provide that special meetings of shareholders shall be called upon the
written request of holders of at least 10% of the Company's shares then
outstanding. Each New Trust's By-Laws provide that a special meeting of
shareholders for the purpose of voting on the removal of any trustee may be
called by the holders of 10% or more of the outstanding shares of the New Trust.
Each New Trust, like its predecessor Company, will operate as an open-end
management investment company registered with the SEC under the 1940 Act.
Shareholders of the New Funds will therefore have the power to vote at special
meetings with respect to, among other things, changes in fundamental investment
objectives and fundamental policies of the New Funds; and such additional
matters relating to the New Trusts as might be required by the 1940 Act. If, at
any time, less than a majority of the trustees holding office have been elected
by the shareholders, the trustees then in office will promptly call a meeting of
shareholders of the New Trust for the purpose of electing a trustee or trustees
in order to maintain a majority of trustees elected by shareholders.
REMOVAL OF DIRECTORS AND TRUSTEES. Under each Company's Declaration of
Trust, a trustee may be removed by two-thirds of the trustees holding office
prior to removal or by holders of two-thirds of the outstanding shares of the
Company at a special meeting called for that purpose. Each New Trust will be
substantially identical to the Companies with respect to the removal of
trustees.
SHAREHOLDERS' RIGHTS OF INSPECTION. Under Massachusetts law, any
shareholder may inspect a Fund's records, accounts, and books for any legitimate
business purpose. Each Company's Declaration of Trust permits its trustees to
determine the extent to which, the times and places at which, and the conditions
under which a shareholder may inspect any book or record. Under each New Trust's
Trust Instrument and By-Laws, New Fund shareholders who have held shares of
record for at least six months and who hold at least 5% of the outstanding
shares of any New Fund will be permitted, upon written request, to inspect a
list of the shareholders of that New Fund.
SHAREHOLDER LIABILITY. Under Massachusetts law, there is a remote
possibility, under certain circumstances, that a Company's shareholders may be
held personally liable for the Company's obligations. Each Company's Declaration
of Trust, however, disclaims shareholder liability for acts or obligations of
the Company and requires that every written agreement, obligation, or other
undertaking made or issued by the Company contain a provision to the effect that
the Company's shareholders are not personally liable thereunder. In addition,
each Declaration of Trust also provides for indemnification out of Company
property for any shareholder held personally liable solely by reason of his or
her being or having been a shareholder. Each Declaration of Trust also provides
that the Company shall, upon request, assume the defense of any claim made
against any shareholder for any act or obligation of the Company and satisfy any
judgment thereon. Therefore, the risk of any shareholder's incurring financial
loss beyond his or her investment due to shareholder liability is limited to
circumstances in which a Company itself is unable to meet its obligations and
the express disclaimer of shareholder liabilities is determined not to be
effective. Given the nature of each Company's assets and operations, the
possibility that a Company would be unable to meet its obligations is remote.
Under Delaware law, each New Trust's shareholders will not be personally
liable for the obligations of the New Trust. The Delaware Act provides that a
shareholder of a Delaware business trust is entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under Delaware law. The securities regulators of some states, however,
have indicated that they may decline to apply Delaware law on this point, and it
is conceivable that, notwithstanding current laws, courts in other states may
decline to apply Delaware law on this point. As a result, to the extent that
each New Trust or a shareholder will be subject to the jurisdiction of courts in
those states, there is a risk that those courts might not apply Delaware law and
could thereby subject New Trust shareholders to liability. The Boards and
management of the Companies believe this risk to be remote. To guard against
27
<PAGE>
this risk, each Trust Instrument (i) will contain an express disclaimer of
shareholder liability for acts or obligations of the New Trust and (ii) will
provide for indemnification out of New Trust property of any shareholder held
personally liable for the obligations of the New Trust. Moreover, each Trust
Instrument will require that every written agreement, obligation, or other
undertaking made or issued by the New Trust contain a provision to the effect
that New Fund shareholders are not personally liable thereunder. Thus, the risk
of a New Trust shareholder's incurring financial loss beyond the shareholder's
investment because of shareholder liability would be limited to circumstances in
which (a) a court refused to apply Delaware law or otherwise failed to give full
effect to a Trust Instrument or contractual provisions limiting shareholder
liability (or no contractual limitation of liability was in effect) and (b) a
New Trust itself was unable to meet its obligations. In light of Delaware law,
the nature of each New Trust's business, and the nature of its assets, the
Boards believe that the risk of personal liability to a New Trust shareholder is
extremely remote.
LIABILITY OF DIRECTORS AND TRUSTEES. Under each Company's Declaration of
Trust, so long as the trustees have acted under the belief that their actions
are in the best interests of the Company, they will be personally liable only
for willful misfeasance, bad faith, or gross negligence in the performance of
their duties or by reason of reckless disregard of their obligations and duties
as trustees. Under the Declaration of Trust, trustees, officers and employees
will generally be indemnified against liability and against the expenses of
litigation incurred by them unless their conduct is determined to constitute
willful misfeasance, bad faith, gross negligence, or reckless disregard of their
duties or unless it has been determined that they have not acted in good faith
in the reasonable belief that their actions were in the best interests of the
Company. [A Company may also advance money for these expenses, provided that the
trustee or officer undertakes to repay the Company if his or her conduct is
later determined to preclude indemnification.]
Each New Trust's Trust Instrument will provide indemnification for current
and former trustees and officers to the fullest extent permitted by Delaware law
and other applicable law. Trustees and officers may be personally liable for
acts, omission, or obligations of a New Trust for reasons of willful
misfeasance, bad faith, or gross negligence in the performance of their duties
or by reason of reckless disregard of their obligations and duties as trustees.
AMENDMENT OF ARTICLES OF INCORPORATION, DECLARATIONS OF TRUST, AND TRUST
INSTRUMENTS. Each Company's Declaration of Trust may be amended by a majority of
the trustees so long as such amendment does not adversely affect the rights of
shareholders. When such amendment adversely affects the rights of shareholders,
such amendment may be adopted by a majority of the trustees so long as the
Company obtains the approval of either (1) the holders of more than 50% of the
Company's outstanding shares or (2) holders of more than 50% of the applicable
series of the Company. Each New Trust's Trust Instrument may be amended by the
trustees without any shareholder vote, except that the shareholders will have
the right to vote on any amendment that affects their voting rights, that alters
the provisions governing amendments to the Trust Instrument, that is required to
have shareholder approval by law or by the New Trust's registration statement,
or that is submitted to the shareholders by the trustees.
The foregoing is only a summary of certain differences between and among
each Company's Declaration of Trust and By-Laws and Massachusetts law and each
New Trust's Trust Instrument and By-Laws and Delaware law. It is not a complete
list of the differences. Shareholders should refer to the provisions of these
documents and state law directly for a more thorough comparison. Copies of the
Declarations of Trust and the By-Laws of the Companies, and of the New Trust's
Trust Instrument and By-Laws are, or will be, available to shareholders without
charge upon written request to a Company or New Trust, when it comes into
existence.
REQUIRED VOTE. Each Company's Declaration of Trust requires for approval
of the Plan the affirmative vote of the holders of a majority of the Company's
shares as defined in the 1940 Act. The 1940 Act defines a "majority of the
outstanding voting securities" as the lesser of (1) 67% of the interests present
or represented at a meeting of shareholders if holders of more than 50% of all
interests are present or represented by proxy, or (2) more than 50% of all
interests. If the Plan is not approved, the Company will continue to operate as
a Massachusetts business trust and the Funds will continue to operate as series
of a Massachusetts business trust.
28
<PAGE>
EACH BOARD RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 4.
PROPOSAL NO. 5: 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 each Company's Board, including the independent
trustees, as the independent accountants to audit the books and the accounts of
each Fund for the fiscal year ending December 31, 1998, and to include its
opinion in financial statements filed with the Securities and Exchange
Commission ("SEC"). Each Board has directed the submission of this selection to
the Shareholders for ratification. Coopers & Lybrand L.L.P. has advised the
Boards that is has no financial interest in either Company. For the fiscal year
ended December 31, 1997, the professional services rendered by Coopers & Lybrand
L.L.P. included the issuance of an opinion on the financial statements of each
Fund and an opinion on other reports of the 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 required the affirmative vote of a majority of the votes cast thereon
at the Meeting.
EACH BOARD RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" PROPOSAL 5.
OTHER INFORMATION
EXECUTIVE OFFICERS AND DIRECTORS OF AIM
[TO BE ADDED.]
EXECUTIVE OFFICERS AND DIRECTORS OF CHANCELLOR LGT
The Directors and Executive Officers of Chancellor LGT are listed below.
<TABLE>
<CAPTION>
Name, Position(s) With Principal Occupations And Business
Chancellor Lgt And Address Experience For Past Five Years1
- -------------------------- -----------------------------------
<S> <C>
Paul J. Loach, 46 Chairman of the Board of Directors of
Chairman of the Board of Directors Chancellor LGT since August 1997; Director
1166 Avenue of the Americas and Managing Director of LGT Asset
New York, NY 10036 Management PLC (London) since October 1994;
Group Manager and Director of Framlington
Group from May 1988 to October 1994.
- -----------------
1 On October 31, 1996, Chancellor Capital Management, Inc. ("Chancellor
Capital") merged with LGT Asset Management, Inc. (San Francisco), and the
resulting entity was renamed Chancellor LGT Asset Management, Inc. Prior to
October 31, 1996, Ms. Lesavoy, Ms. Riley and Mr. Young held positions only with
Chancellor Capital.
29
<PAGE>
Name, Position(s) With Principal Occupations And Business
Chancellor Lgt And Address Experience For Past Five Years1
- -------------------------- -----------------------------------
Prince Philipp von und zu Director of Chancellor LGT since November
Liechtenstein, 51 1996; Vice Chairman of Supervisory Board of
Director LGT Bank in Liechtenstein (Deutschland )
Herrengasse 12, P.O. Box 85 GmbH (Frankfurt) since 1992; Chairman of
FL-9490 Vaduz, Liechtenstein the Board of Directors and CEO of
Liechtenstein Global Trust (Vaduz) since
1990; Vice Chairman of the Board of
Directors of LGT Bank in Liechtenstein
since 1981.
John G. Greenwood, 51 Chief Economist and Director of Chancellor
Director LGT since November 1997; Chief Economist of
50 California Street, 27th Chancellor LGT from February 1994 to
Floor October 1996; Chief Economist of LGT Asset
San Francisco, CA 94111 Management, Limited (Hong Kong) from
September 1974 to January 1994.
Nina Lesavoy, 40 Director and Head of North American
Director and Head of North Institutional Distribution for Chancellor
American Institutional LGT since November 1996; Director and Head
Distribution of Client Service and Sales for Chancellor
1166 Avenue of the Americas LGT from March 1990 to October 1996.
New York, NY 10036
Donald H. Young, 59 Director and Head of the Structured
Director Products Group for Chancellor LGT since
1166 Avenue of the Americas November 1996; Director and Head of Global
New York, NY 10036 Asset Allocation for Chancellor LGT from
October 1988 to October 1996.
Ken W. Chancey, 52 Senior Vice President - Mutual Fund
Senior Vice President Accounting, Chancellor LGT since 1997; Vice
Mutual Fund Accounting President - Mutual Fund Accounting,
50 California Street, 27th Floor Chancellor LGT from 1992 to 1997; Vice
San Francisco, CA 94111 President, Putnam Fiduciary Trust Company
from 1989 to 1992.
Helge K. Lee, 51 Chief Legal and Compliance Officer -- North
Chief Legal and Compliance America for Chancellor LGT since October
Officer and Secretary 1997; Executive Vice President of the Asset
50 California Street, 27th Floor Management Division of Liechtenstein Global
San Francisco, CA 94111 Trust since October 1996; Senior Vice
President, General Counsel and Secretary of
Chancellor LGT, GT Global, Inc., GT
Investor Services, Inc. and G.T. Insurance
Agency from February 1996 to October 1996;
Vice President, General Counsel and
Secretary of LGT Asset Management, Inc.,
Chancellor LGT, GT Global, Inc., GT
Investor Services, Inc. and G.T. Insurance
Agency from May 1994 to February 1996;
Senior Vice President, General Counsel and
Secretary of Strong/Corneliuson Management,
Inc. and Secretary of each of the Strong
Funds from October 1991 through May 1994.
30
<PAGE>
Name, Position(s) With Principal Occupations And Business
Chancellor Lgt And Address Experience For Past Five Years1
- -------------------------- -----------------------------------
Margaret A. Riley, 34 Director of Chancellor LGT Venture
Chief Financial Officer Partners, Inc. since October 1997; Managing
1166 Avenue of the Americas Director and Chief Financial Officer of
New York, NY 10036 Chancellor LGT since October 1997; Managing
Director and Controller of Chancellor LGT
from November 1996 to October 1997;
Managing Director of Finance for Chancellor
LGT from March 1989 to October 1996.
</TABLE>
EXECUTIVE OFFICERS OF THE COMPANIES
The executive officers of the Companies are listed below. The business
address of each officer is 50 California Street, 27th Floor, San Francisco,
California 94111.
William J. Guilfoyle, age 39, has been President of each Company since
February 1997. Mr. Guilfoyle is also President of GT Global, principal
distributor of the GT Global Mutual Funds. Additional information about Mr.
Guilfoyle is provided above.
Helge K. Lee, age 51, has been a Vice President and Secretary of the
Companies since May 1994. Additional information about Mr. Lee is provided
above.
Kenneth R. Chancey, age 52, has been a Vice President and Chief Accounting
Officer of the Companies since __________. Additional information about Mr.
Chancey is provided above.
GENERAL INFORMATION
SOLICITATION OF PROXIES
Each Company will request broker/dealer firms, custodians, nominees and
fiduciaries to forward proxy material to the beneficial owners of the shares
held of record by such persons. Each Company may reimburse such broker/dealer
firms, custodians, nominees and fiduciaries for their reasonable expenses
incurred in connection with such proxy solicitation. In addition to the
solicitation of Proxies by mail, officers of each Company and employees of
Chancellor LGT and its affiliates, without additional compensation, may solicit
Proxies in person or by telephone. The costs associated with such solicitation
and the Special Meeting will be borne by each Company.
Each Company has retained Shareholder Communications Corporation ("SCC") a
professional proxy solicitation firm, to assist in the solicitation of proxies.
Contract Owners may receive a telephone call from this firm concerning this
proxy solicitation. Each Company estimates that SCC will be paid fees of
approximately $_________ in connection with the solicitation, depending upon the
nature and extent of the services provided.
OTHER MATTERS TO COME BEFORE THE MEETING
The Boards do not know of any matters to be presented at the Meeting other
than those described in this Proxy Statement, but should any other matter
requiring a vote of Shareholders arise, the Proxyholders will vote thereon
according to their best judgment in the interests of the Companies.
REPORTS TO SHAREHOLDERS
EACH COMPANY WILL FURNISH TO SHAREHOLDERS AND TO CONTRACT OWNERS, WITHOUT
CHARGE AND UPON REQUEST, A COPY OF THE MOST RECENT ANNUAL REPORT AND A COPY OF
THE MOST RECENT SEMI-ANNUAL REPORT FOLLOWING SUCH ANNUAL REPORT OF ANY FUND.
REQUESTS FOR SUCH REPORTS MAY BE MADE BY WRITING TO THE COMPANY AT 50 CALIFORNIA
31
<PAGE>
STREET, 27TH FLOOR, SAN FRANCISCO, CALIFORNIA 94111, OR BY CALLING (800)
824-1580.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED,
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
BY ORDER OF THE BOARDS,
HELGE KRIST LEE
SECRETARY
April ____, 1998
32
<PAGE>
PRELIMINARY PROXY STATEMENT
GT GLOBAL
A WORLD OF OPPORTUNITY
AMERICAN ENTERPRISE LIFE
INSURANCE COMPANY
P.O. BOX 534
MINNEAPOLIS, MN 55440
1-800-333-3437
G.T. GLOBAL VARIABLE INVESTMENT SERIES
G.T. GLOBAL VARIABLE INVESTMENT TRUST
SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1998
This proxy is being solicited on behalf of the Board of Trustees of the Company
indicated below and relates to the proposals with respect to the Company and the
portfolios of the Company ("Funds") 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 the Fund with respect to which the undersigned is entitled to effect the
voting at the Special Meeting of Shareholders to be held at 1:00 p.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. Unless
indicated to the contrary, this proxy shall be deemed to grant authority to vote
"FOR" all proposals relating to the Company and 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.
The Board of Trustees recommends that you vote FOR each of the nominees and FOR
the following proposals:
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
GTGVIS KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
[FUND NAME]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Vote On Trustees For Withhold For All To withhold authority to vote for
All All Except any individual nominee(s), mark
1. Election of five members of the Company's "For All Except" and write the
Board of Trustees to serve indefinite terms nominee's number on the line
until their successors are duly elected and below.
qualified; 01) William J. Guilfoyle; 02) C. / / / / / /
Derek Anderson; 03) Frank S. Bayley; 04) ----------------------------------
Arthur C. Patterson; 05) Ruth H. Quigley
VOTE ON PROPOSALS For Against Abstain
2. Approval of a new investment management and administration agreement and a / / / / / /
33
<PAGE>
sub-advisory and sub-administration 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.
---------------------------------------------------------------------------
4. Approval of an agreement and plan of conversion and termination with / / / / / /
respect to the Company;
5. Ratification of the selection of Coopers & Lybrand L.L.P. as the Company'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 title. If the Shareholder is a partnership, a partner should
sign in his or her own name, indicating that he or she is a "Partner".
- -------------------------------------------------------- --------------------
- -------------------------------------------------------- --------------------
Signature (PLEASE SIGN WITHIN BOX) Date
- -------------------------------------------------------- --------------------
- -------------------------------------------------------- --------------------
Signature (Joint Owners) Date
</TABLE>
34
<PAGE>
PRELIMINARY PROXY STATEMENT
GT GLOBAL
A WORLD OF OPPORTUNITY
SECURITY EQUITY LIFE
INSURANCE COMPANY
84 BUSINESS PARK DRIVE, SUITE 303
ARMONK, NY 10504
1-800-533-8282
G.T. GLOBAL VARIABLE INVESTMENT SERIES
G.T. GLOBAL VARIABLE INVESTMENT TRUST
SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1998
This proxy is being solicited on behalf of the Board of Trustees of the Company
indicated below and relates to the proposals with respect to the Company and the
portfolios of the Company ("Funds") 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 the Fund with respect to which the undersigned is entitled to effect the
voting at the Special Meeting of Shareholders to be held at 1:00 p.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. Unless
indicated to the contrary, this proxy shall be deemed to grant authority to vote
"FOR" all proposals relating to the Company and 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.
The Board of Trustees recommends that you vote FOR each of the nominees and FOR
the following proposals:
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
GTGVIS KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
- --------------------------------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
[FUND NAME]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Vote On Trustees For Withhold For All To withhold authority to vote for
All All Except any individual nominee(s), mark
1. Election of five members of the Company's "For All Except" and write the
Board of Trustees to serve indefinite terms nominee's number on the line
until their successors are duly elected and below.
qualified; 01) William J. Guilfoyle; 02) C. / / / / / /
Derek Anderson; 03) Frank S. Bayley; 04) ----------------------------------
Arthur C. Patterson; 05) Ruth H. Quigley
VOTE ON PROPOSALS For Against Abstain
2. Approval of a new investment management and administration agreement and a / / / / / /
35
<PAGE>
sub-advisory and sub-administration 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.
---------------------------------------------------------------------------
4. Approval of an agreement and plan of conversion and termination with / / / / / /
respect to the Company;
5. Ratification of the selection of Coopers & Lybrand L.L.P. as the Company'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 title. If the Shareholder is a partnership, a partner should
sign in his or her own name, indicating that he or she is a "Partner".
- -------------------------------------------------------- --------------------
- -------------------------------------------------------- --------------------
Signature (PLEASE SIGN WITHIN BOX) Date
- -------------------------------------------------------- --------------------
- -------------------------------------------------------- --------------------
Signature (Joint Owners) Date
</TABLE>
36
<PAGE>
PRELIMINARY PROXY STATEMENT
GT GLOBAL
A WORLD OF OPPORTUNITY
GENERAL AMERICAN LIFE
ASSURANCE COMPANY
P.O. BOX 66821
ST. LOUIS, MO 63166-6821
1-800-237-6580
G.T. GLOBAL VARIABLE INVESTMENT SERIES
G.T. GLOBAL VARIABLE INVESTMENT TRUST
SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1998
This proxy is being solicited on behalf of the Board of Trustees of the Company
indicated below and relates to the proposals with respect to the Company and the
portfolios of the Company ("Funds") 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 the Fund with respect to which the undersigned is entitled to effect the
voting at the Special Meeting of Shareholders to be held at 1:00 p.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. Unless
indicated to the contrary, this proxy shall be deemed to grant authority to vote
"FOR" all proposals relating to the Company and 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.
The Board of Trustees recommends that you vote FOR each of the nominees and FOR
the following proposals:
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
GTGVIS KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
- --------------------------------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
[FUND NAME]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Vote On Trustees For Withhold For All To withhold authority to vote for
All All Except any individual nominee(s), mark
1. Election of five members of the Company's "For All Except" and write the
Board of Trustees to serve indefinite terms nominee's number on the line
until their successors are duly elected and below.
qualified; 01) William J. Guilfoyle; 02) C. / / / / / /
Derek Anderson; 03) Frank S. Bayley; 04) ----------------------------------
Arthur C. Patterson; 05) Ruth H. Quigley
VOTE ON PROPOSALS For Against Abstain
2. Approval of a new investment management and administration agreement and a / / / / / /
37
<PAGE>
sub-advisory and sub-administration 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.
---------------------------------------------------------------------------
4. Approval of an agreement and plan of conversion and termination with / / / / / /
respect to the Company;
5. Ratification of the selection of Coopers & Lybrand L.L.P. as the Company'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 title. If the Shareholder is a partnership, a partner should
sign in his or her own name, indicating that he or she is a "Partner".
- -------------------------------------------------------- --------------------
- -------------------------------------------------------- --------------------
Signature (PLEASE SIGN WITHIN BOX) Date
- -------------------------------------------------------- --------------------
- -------------------------------------------------------- --------------------
Signature (Joint Owners) Date
</TABLE>
38
<PAGE>
PRELIMINARY PROXY STATEMENT
GT GLOBAL
A WORLD OF OPPORTUNITY
AMERICAN CENTURION LIFE
INSURANCE COMPANY
P.O. BOX 5555
ALBANY, NY 12205-0555
1-800-504-0469
G.T. GLOBAL VARIABLE INVESTMENT SERIES
G.T. GLOBAL VARIABLE INVESTMENT TRUST
SPECIAL MEETING OF SHAREHOLDERS
MAY 20, 1998
This proxy is being solicited on behalf of the Board of Trustees of the Company
indicated below and relates to the proposals with respect to the Company and the
portfolios of the Company ("Funds") 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 the Fund with respect to which the undersigned is entitled to effect the
voting at the Special Meeting of Shareholders to be held at 1:00 p.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. Unless
indicated to the contrary, this proxy shall be deemed to grant authority to vote
"FOR" all proposals relating to the Company and 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.
The Board of Trustees recommends that you vote FOR each of the nominees and FOR
the following proposals:
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
GTGVIS KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
- --------------------------------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
[FUND NAME]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Vote On Trustees For Withhold For All To withhold authority to vote for
All All Except any individual nominee(s), mark
1. Election of five members of the Company's "For All Except" and write the
Board of Trustees to serve indefinite terms nominee's number on the line
until their successors are duly elected and below.
qualified; 01) William J. Guilfoyle; 02) C. / / / / / /
Derek Anderson; 03) Frank S. Bayley; 04) ----------------------------------
Arthur C. Patterson; 05) Ruth H. Quigley
VOTE ON PROPOSALS For Against Abstain
2. Approval of a new investment management and administration agreement and a / / / / / /
39
<PAGE>
sub-advisory and sub-administration 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.
---------------------------------------------------------------------------
4. Approval of an agreement and plan of conversion and termination with / / / / / /
respect to the Company;
5. Ratification of the selection of Coopers & Lybrand L.L.P. as the Company'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 title. If the Shareholder is a partnership, a partner should
sign in his or her own name, indicating that he or she is a "Partner".
- -------------------------------------------------------- --------------------
- -------------------------------------------------------- --------------------
Signature (PLEASE SIGN WITHIN BOX) Date
- -------------------------------------------------------- --------------------
- -------------------------------------------------------- --------------------
Signature (Joint Owners) Date
</TABLE>
40
<PAGE>
EXHIBIT A
The following table shows the number of shares outstanding of each Fund as
of March 17, 1998:
G.T. GLOBAL VARIABLE INVESTMENT SERIES
Number Of Shares
Fund Name Outstanding
GT Global Variable New Pacific Fund
GT Global Variable Europe Fund
GT Global Variable America Fund
GT Global Variable International Fund
GT Variable Global Money Market Fund
G.T. GLOBAL VARIABLE INVESTMENT TRUST
Number Of Shares
Fund Name Outstanding
GT Global Variable Latin America Fund
GT Global Variable Infrastructure Fund
GT Global Variable Natural Resources Fund
GT Global Telecommunications Fund
GT Global Variable Growth & Income Fund
GT Global Variable Strategic Income Fund
GT Global Variable Emerging Markets Fund
GT Global Variable Global Government
Fund
GT Global Variable U.S. Government
Income Fund
41
<PAGE>
EXHIBIT B
[NAME OF COMPANY]
MASTER INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN [FUND]
AND A I M ADVISORS, INC.
Contract made as of ____________, 19_, between [Company], a Delaware
business trust ("Company), and A I M Advisors, Inc. (the "Adviser"), a Delaware
corporation.
WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and
intends to offer for public sale shares of [Funds], each being a series of the
Company's shares of beneficial interest: and
WHEREAS the Company hereafter may establish additional series of its
shares of beneficial interest (any such additional series, together with the
series named in the paragraph immediately preceding, are collectively referred
to herein as the "Funds," and singly may be referred to as a "Fund"); and
WHEREAS the Company desires to retain Adviser as investment manager and
administrator to furnish certain administrative, investment advisory and
portfolio management services to the Company and the Funds, and Adviser is
willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Company hereby appoints Adviser as investment manager
and administrator of each Fund for the period and on the terms set forth in this
Contract. Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. DUTIES AS INVESTMENT MANAGER.
(a) Subject to the supervision of the Company's Board of Trustees
("Board"), Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all securities and
investments and cash equivalents of the Fund. Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by each Fund, and the brokers and dealers through whom trades will be
executed.
(b) Adviser agrees that in placing orders with brokers and dealers it will
attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation Adviser may, in its discretion, purchase and
sell portfolio securities to and from brokers and dealers who sell shares of the
Funds or provide the Funds or Adviser's other clients with research, analysis,
advice and similar services. Adviser may pay to brokers and dealers, in return
for research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to Adviser's determining in good faith that
such commission or spread is reasonable in terms either of the particular
transaction or of the overall responsibility of Adviser to the Funds and its
other clients and that the total commissions or spreads paid by each Fund will
be reasonable in relation to the benefits to the Fund over the long term. In no
instance will portfolio securities be purchased from or sold to Adviser or any
affiliated person thereof except in accordance with the federal securities laws
and the rules and regulations thereunder and any exemptive orders currently in
effect. Whenever Adviser simultaneously places orders to purchase or sell the
same security on behalf of a Fund and one or more other accounts advised by
Adviser, such orders will be allocated as to price and amount among all such
42
<PAGE>
accounts in a manner believed to be equitable to each account. The Company
recognizes that in some cases this procedure may adversely affect the results
obtained for each Fund.
(c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Funds, and will furnish the Board
with such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, Adviser
hereby agrees that all records which it maintains for the Company are the
property of the Company, agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act any records which it maintains for the Company and
which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Company any records which it
maintains for the Company upon request by the Company.
3. DUTIES AS ADMINISTRATOR. Adviser will administer the affairs of each
Fund subject to the supervision of the Board and the following understandings:
(a) Adviser will supervise all aspects of the operations of each Fund,
including the oversight of transfer agency and custodial services, except as
hereinafter set forth; provided, however, that nothing herein contained shall be
deemed to relieve or deprive the Board of its responsibility for control of the
conduct of the affairs of the Funds.
(b) At Adviser's expense, Adviser will provide the Company and the Funds
with such corporate, administrative and clerical personnel (including officers
of the Company) and services as are reasonably deemed necessary or advisable by
the Board.
(c) Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of each Fund's prospectus,
statement of additional information, proxy material, tax returns and required
reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
(d) Adviser will provide the Company and the Funds with, or obtain for
them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Adviser will act in conformity with the Agreement and Declaration of
Trust, By-Laws and Registration Statement of the Company and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules thereunder, and all other applicable federal and
state laws and regulations.
5. DELEGATION OF ADVISER'S DUTIES AS INVESTMENT MANAGER AND ADMINISTRATOR.
With respect to one or more of the Funds, Adviser may enter into one or more
contracts ("Sub-Advisory or Sub-Administration Contract") with a Sub-adviser or
Sub-administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or all of the services specified in
Paragraph 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject with
respect to the delegated services under Paragraphs 2, 3 and 4 of this Contract;
(ii) each Sub-Advisory and Sub-Administration Contract meets all requirements of
the 1940 Act and rules thereunder, and (iii) Adviser shall not enter into a
Sub-Advisory or Sub-Administration Contract unless it is approved by the Board
prior to implementation.
6. SERVICES NOT EXCLUSIVE. The services furnished by Adviser hereunder are
not to be deemed exclusive and Adviser shall be free to furnish similar services
to others so long as its services under this Contract are not impaired thereby.
Nothing in this Contract shall limit or restrict the right of any director,
officer or employee of Adviser, who may also be a Trustee, officer or employee
of the Company, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
43
<PAGE>
7. EXPENSES.
(a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Adviser, incurred in its operations and the offering
of its shares.
(b) Expenses borne by each Fund will include but not be limited to the
following: (i) the cost (including brokerage commissions, if any) of securities
purchased or sold by the Fund and any losses incurred in connection therewith;
(ii) fees payable to and expenses incurred on behalf of the Fund by Adviser
under this Contract; (iii) expenses of organizing the Company and the Fund; (iv)
filing fees and expenses relating to the registration and qualification of the
Fund's shares and the Company under federal and/or state securities laws and
maintaining such registrations and qualifications; (v) fees and salaries payable
to the Company's Trustees who are not parties to this Contract or interested
persons of any such party ("Independent Trustees"); (vi) all expenses incurred
in connection with the Independent Trustees' services, including travel
expenses; (vii) taxes (including any income or franchise taxes) and governmental
fees; (viii) costs of any liability, uncollectible items of deposit and other
insurance and fidelity bonds; (ix) any costs, expenses or losses arising out of
a liability of or claim for damages or other relief asserted against the Company
or the Fund for violation of any law; (x) legal, accounting and auditing
expenses, including legal fees of special counsel for the Independent Trustees;
(xi) charges of custodians, transfer agents, pricing agents and other agents;
(xii) costs of preparing share certificates; (xiii) with respect to existing
shareholders, expenses of setting in type, printing and mailing prospectuses and
supplements thereto, statements of additional information and supplements
thereto, reports and proxy materials for existing shareholders; (xiv) any
extraordinary expenses (including fees and disbursements of counsel, costs of
actions, suits or proceedings to which the Company is a party and the expenses
the Company may incur as a result of its legal obligation to provide
indemnification to its officers, Trustees, employees and agents) incurred by the
Company or the Fund; (xv) fees, voluntary assessments and other expenses
incurred in connection with membership in investment company organizations;
(xvi) costs of mailing and tabulating proxies and costs of meetings of
shareholders, the Board and any committees thereof; (xvii) the cost of
investment company literature and other publications provided by the Company to
its Trustees and officers; and (xviii) costs of mailing, stationery and
communications equipment.
(c) All general expenses of the Company and joint expenses of the Funds
shall be allocated among each Fund on a basis deemed fair and equitable by
Adviser, subject to the Board's supervision.
(d) Adviser will assume the cost of any compensation for services provided
to the Company received by the officers of the Company and by the Trustees of
the Company who are not Independent Trustees.
(e) The payment or assumption by Adviser of any expense of the Company or
any Fund that Adviser is not required by this Contract to pay or assume shall
not obligate Adviser to pay or assume the same or any similar expense of the
Company or any Fund on any subsequent occasion.
8. COMPENSATION.
(a) For the services provided to a Fund under this Contract, the Company
shall pay the Adviser an annual fee, payable monthly, based upon the average
daily net assets of such Fund as forth in Appendix A attached hereto. Such
compensation shall be paid solely from the assets of such Fund.
(b) For the services provided under this Contract, each Fund as hereafter
may be established will pay to Adviser a fee in an amount to be agreed upon in a
written Appendix to this Contract executed by the Company on behalf of such Fund
and by Adviser.
(c) The fee shall be computed daily and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.
(d) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
44
<PAGE>
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
9. LIMITATION OF LIABILITY OF ADVISER AND INDEMNIFICATION. Adviser shall
not be liable and each Fund shall indemnify Adviser and its directors, officers
and employees, for any costs or liabilities arising from any error of judgment
or mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Adviser in the
performance by Adviser of its duties or from reckless disregard by Adviser of
its obligations and duties under this Contract. Any person, even though also an
officer, partner, employee, or agent of Adviser, who may be or become an
officer, Trustee, employee or agent of the Company shall be deemed, when
rendering services to a Fund or the Company or acting with respect to any
business of a Fund or the Company, to be rendering such service to or acting
solely for the Fund or the Company and not as an officer, partner, employee, or
agent or one under the control or direction of Adviser even though paid by it.
10. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect with respect to any Fund
unless it has first been approved (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of that Fund's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund this Contract shall continue automatically
for successive periods not to exceed twelve months each, provided that such
continuance is specifically approved at least annually (i) by a vote of a
majority of the Independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the Board or by vote of a
majority of the outstanding voting securities of that Fund.
(c) Notwithstanding the foregoing, with respect to any Fund this Contract
may be terminated at any time, without the payment of any penalty, by vote of
the Board or by a vote of a majority of the outstanding voting securities of the
Fund on sixty days' written notice to Adviser or by Adviser at any time, without
the payment of any penalty, on sixty days' written notice to the Company.
Termination of this Contract with respect to one Fund shall not affect the
continued effectiveness of this Contract with respect to any other Fund. This
Contract will automatically terminate in the event of its assignment.
11. AMENDMENT OF THIS CONTRACT. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Contract shall be
effective until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.
12. GOVERNING LAW. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
13. LICENSE AGREEMENT. The Company shall have the non-exclusive right to
use the name "AIM" to designate any current or future series of shares only so
long as A I M Advisors, Inc. serves as investment manager or adviser to the
Company with respect to such series of shares.
14. LIMITATION OF SHAREHOLDER LIABILITY. It is expressly agreed that the
obligations of the Company hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Company
personally, but shall only bind the assets and property of the Funds, as
provided in the Company's Declaration of Trust. The execution and delivery of
this Contract have been authorized by the Trustees of the Company and
shareholders of the Funds, and this Contract has been executed and delivered by
an authorized officer of the Company acting as such; neither such authorization
45
<PAGE>
by such Trustees and shareholders nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the assets
and property of the Funds, as provided in the Company's Declaration of Trust.
15. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
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: [COMPANY]
By:
- ---------------------------- ---------------------------
Name:
Title:
Attest: A I M ADVISORS, INC.
By:
- ---------------------------- ---------------------------
Name:
Title:
46
<PAGE>
APPENDIX A
TO
MASTER INVESTMENT ADVISORY AGREEMENT
OF
[FUND]
The Company shall pay the Adviser, out of the assets of a Fund, as full
compensation for all services rendered and all facilities furnished hereunder, a
management fee for such Fund set forth below. Such fee shall be calculated by
applying the following annual rates to the average daily net assets of such Fund
for the calendar year computed in the manner used for the determination of the
net asset value of shares of such Fund.
[SERIES FUND]
Net Assets Annual Rate
- ---------- -----------
First $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Over $... million . . . . . . . . . . . . . . . . . . . ____%
[SERIES FUND]
Net Assets Annual Rate
- ---------- -----------
First $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Over $... million . . . . . . . . . . . . . . . . . . . ____%
[SERIES FUND]
Net Assets Annual Rate
- ---------- -----------
First $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Over $... million . . . . . . . . . . . . . . . . . . . ____%
[SERIES FUND]
Net Assets Annual Rate
- ---------- -----------
First $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Over $... million . . . . . . . . . . . . . . . . . . . ____%
47
<PAGE>
EXHIBIT C
[NAME OF COMPANY]
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
[CHANCELLOR LGT ASSET MANAGEMENT, INC. - NAME TO BE CHANGED]
Contract made as of ________, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and [Chancellor LGT Asset Management, Inc. -
name to be changed], a California corporation ("Sub-Adviser").
WHEREAS Adviser has entered into an Investment Management and
Administration Contract with [Company], an [open-end] management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"), with respect to [Funds], each Fund being a series of the Company's shares
of beneficial interest; and
WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser and
sub-administrator to furnish certain advisory and administrative services to the
Funds, and Sub-Adviser is willing to furnish such services;
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. Adviser hereby appoints Sub-Adviser as sub-adviser and
sub-administrator of each Fund for the period and on the terms set forth in this
Contract. Sub-Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. DUTIES AS SUB-ADVISER.
(a) Subject to the supervision of the Company's Board of Trustees
("Board") and Adviser, the Sub-Adviser will provide a continuous investment
program for each Fund, including investment research and management, for all
securities and investments and cash equivalents of the Fund. The Sub-Adviser
will determine from time to time investments to be purchased, retained or sold
with respect to each Fund., and the brokers and dealers through whom trades will
be executed.
(b) The Sub-Adviser agrees that, in placing orders with brokers, it will
attempt to obtain the best net result in terms of price and execution; provided
that, on behalf of the Funds, the Sub-Adviser may, in its discretion, purchase
fund securities from and sell portfolio securities to brokers and dealers who
provide the Funds with research, analysis, advice and similar services. The
Sub-Adviser may pay to those brokers, in return for such services, a higher
commission than may be charged by other brokers, subject to the Sub-Adviser
determining in good faith that such commission is reasonable in terms either of
the particular transaction or of the overall responsibility of the Sub-Adviser
to the Funds and its other clients and that the total commissions paid by each
Fund will be reasonable in relation to the benefits to the Fund over the long
term. In no instance will securities be purchased from or sold to the
Sub-Adviser, or any affiliated person thereof, except in accordance with the
federal securities laws and the rule and regulations thereunder. Whenever the
Sub-Adviser simultaneously places orders to purchase or sell the same security
on behalf of a Fund and one or more other accounts advised by the Sub-Adviser,
such orders will be allocated as to price and amount among all such accounts in
a manner believed to be equitable to each account.
(c) The Sub-Adviser will maintain all books and records with respect to
the securities transactions of the Funds, and will furnish the Board and Adviser
48
<PAGE>
with such periodic and special reports as the Board or Adviser reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records which it maintains for the
Company are the property of the Company, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it maintains for
the Company and which are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Company any records which
it maintains for the Company upon request by the Company.
3. DUTIES AS SUB-ADMINISTRATOR. Sub-Adviser will administer the affairs of
each Fund subject to the supervision of the Company's Board of Trustees
("Board") and the following understandings:
(a) Sub-Adviser will supervise all aspects of the operations of each Fund,
including the oversight of transfer agency and custodial except as hereinafter
set forth; provided, however, that nothing herein contained shall be deemed to
relieve or deprive the Board of its responsibility for control of the conduct of
the affairs of the Funds.
(b) At Sub-Adviser's expense, Sub-Adviser will provide the Company and the
Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.
(c) Sub-Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of each Fund's prospectus,
statement of additional information, proxy material, tax returns and required
reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
(d) Sub-Adviser will provide the Company and the Funds with, or obtain for
them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Sub-Adviser will act in conformity with the Declaration of Trust,
By-Laws and Registration Statement of the Company and with the instructions and
directions of the Board and will comply with the requirements of the 1940 Act,
the rules thereunder, and all other applicable federal and state laws and
regulations.
5. SERVICES NOT EXCLUSIVE. The services furnished by Sub-Adviser hereunder
are not to be deemed exclusive and Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Sub-Adviser, who may also be a Trustee, officer
or employee of the Company, to engage in any other business or to devote his or
her time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.
6. EXPENSES.
(a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Sub-Adviser, incurred in its operations and the
offering of its shares.
(b) Expenses borne by each Fund will include but not be limited to the
following: (i) the cost (including brokerage commissions, if any) of securities
purchased or sold by the Fund and any losses incurred in connection therewith;
(ii) fees payable to and expenses incurred on behalf of the Fund by Sub-Adviser
under this Contract; (iii) expenses of organizing the Company and the Fund; (iv)
filing fees and expenses relating to the registration and qualification of the
Fund's shares and the Company under federal and/or state securities laws and
maintaining such registrations and qualifications; (v) fees and salaries payable
to the Company's Trustees who are not parties to this Contract or interested
persons of any such party ("Independent Trustees"); (vi) all expenses incurred
in connection with the Independent Trustees' services, including travel
expenses; (vii) taxes (including any income or franchise taxes) and governmental
fees; (viii) costs of any liability, uncollectable items of deposit and other
insurance and fidelity bonds; (ix) any costs, expenses or losses arising out of
a liability of or claim for damages or other relief asserted against the Company
or the Fund for violation of any law; (x) legal, accounting and auditing
49
<PAGE>
expenses, including legal fees of special counsel for the Independent Trustees;
(xi) charges of custodians, transfer agents, pricing agents and other agents;
(xii) costs of preparing share certificates; (xiii) expenses of setting in type,
printing and mailing prospectuses and supplements thereto, statements of
additional information, reports and proxy materials for existing shareholders;
(xiv) any extraordinary expenses (including fees and disbursements of counsel,
costs of actions, suits or proceedings to which the Company is a party and the
expenses the Company may incur as a result of its legal obligation to provide
indemnification to its officers, Trustees, employees and agents) incurred by the
Company; (xv) fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; (xvi) costs of
mailing and tabulating proxies and costs of meetings of shareholders, the Board
and any committees thereof; (xvii) the cost of investment company literature and
other publications provided by the Company to its Trustees and officers; and
(xviii) costs of mailing, stationery and communications equipment.
(c) All general expenses of the Company and joint expenses of the Funds
shall be allocated among each Fund on a basis deemed fair and equitable by
Sub-Adviser, subject to Adviser's and the Board's supervision.
(d) Sub-Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Trustees of the Company who are not Independent Trustees.
(e) The payment or assumption by Sub-Adviser of any expense of the Company
or any Fund that Sub-Adviser is not required by this Contract to pay or assume
shall not obligate Sub-Adviser to pay or assume the same or any similar expense
of the Company or any Fund on any subsequent occasion.
7. COMPENSATION.
(a) For the services provided to a Fund under this Contract, Adviser will
pay Sub-Adviser a fee, computed weekly and paid monthly, as set forth in
Appendix A hereto.
(b) For the services provided under this Contract to each Fund as
hereafter may be established, Adviser will pay to Sub-Adviser a fee in an amount
to be agreed upon in a written Appendix to this Contract executed by Adviser and
by Sub-Adviser.
(c) The fee shall be computed weekly and paid monthly to Sub-Adviser on or
before the last business day of the next succeeding calendar month.
(d) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
8. LIMITATION OF LIABILITY OF SUB-ADVISER AND INDEMNIFICATION. Sub-Adviser
shall not be liable for any costs or liabilities arising from any error of
judgment or mistake of law or any loss suffered by the Fund or the Company in
connection with the matters to which this Contract relates except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
Sub-Adviser in the performance by Sub-Adviser of its duties or from reckless
disregard by Sub-Adviser of its obligations and duties under this Contract. Any
person, even though also an officer, partner, employee, or agent of Sub-Adviser,
who may be or become a Trustee, officer, employee or agent of the Company, shall
be deemed, when rendering services to a Fund or the Company or acting with
respect to any business of a Fund or the Company to be rendering such service to
or acting solely for the Fund or the Company and not as an officer, partner,
employee, or agent or one under the control or direction of Sub-Adviser even
though paid by it.
9. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect with respect to any Fund
unless it has first been approved (i) by a vote of a majority of the Independent
50
<PAGE>
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of that Fund's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of that Fund.
(c) Notwithstanding the foregoing, with respect to any Fund this Contract
may be terminated at any time, without the payment of any penalty, by vote of
the Board or by a vote of a majority of the outstanding voting securities of the
Fund on sixty days' written notice to Sub-Adviser or by Sub-Adviser at any time,
without the payment of any penalty, on sixty days' written notice to the
Company. Termination of this Contract with respect to one Fund shall not affect
the continued effectiveness of this Contract with respect to any other Fund.
This Contract will automatically terminate in the event of its assignment.
10. AMENDMENT. No provision of this Contract may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.
11. GOVERNING LAW. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
12. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order
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]
51
<PAGE>
By:
- --------------------------- -----------------------------------
Name:
Title:
52
<PAGE>
APPENDIX A
TO
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
[SERIES FUND]
Net Assets Annual Rate
- ---------- -----------
First $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Over $... million . . . . . . . . . . . . . . . . . . . ____%
[SERIES FUND]
Net Assets Annual Rate
- ---------- -----------
First $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Over $... million . . . . . . . . . . . . . . . . . . . ____%
[SERIES FUND]
Net Assets Annual Rate
- ---------- -----------
First $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Over $... million . . . . . . . . . . . . . . . . . . . ____%
[SERIES FUND]
Net Assets Annual Rate
- ---------- -----------
First $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Next $... million . . . . . . . . . . . . . . . . . . . ____%
Over $... million . . . . . . . . . . . . . . . . . . . ____%
53
<PAGE>
EXHIBIT D
ADVISORY AGREEMENT FEE SCHEDULE FOR GT GLOBAL VARIABLE FUNDS
- -------------------------------------------------------------------------------
Advisory Fee Sub-advisory Fee (Based
(Based On Average Daily On Average Daily
Name Of Company And Fund Net Assets) Net Assets)2
- -------------------------------------------------------------------------------
G.T. GLOBAL VARIABLE
INVESTMENT SERIES
- -------------------------------------------------------------------------------
GT Global Variable America .75% .30%
Fund (B)
- -------------------------------------------------------------------------------
GT Global Variable New 1.00% .40%
Pacific Fund (A)
- -------------------------------------------------------------------------------
GT Global Variable Europe 1.00% .40%
Fund (A)
- -------------------------------------------------------------------------------
GT Global Variable 1.00% .40%
International Fund (A)
- -------------------------------------------------------------------------------
GT Global Money Market Fund .50% .20%
(C)
- -------------------------------------------------------------------------------
G.T. GLOBAL VARIABLE
INVESTMENT TRUST
- -------------------------------------------------------------------------------
GT Global Variable 1.00% .40%
Telecommunications Fund (A)
- -------------------------------------------------------------------------------
GT Global Variable Emerging 1.00% .40%
Markets Fund (A)
- -------------------------------------------------------------------------------
GT Global Variable 1.00% .40%
Infrastructure Fund (A)
- -------------------------------------------------------------------------------
GT Global Variable Latin 1.00% .40%
America Fund (A)
- -------------------------------------------------------------------------------
GT Global Variable Growth & 1.00% .40%
Income Fund (A)
- -------------------------------------------------------------------------------
GT Global Variable Strategic .75% .30%
Income Fund (B)
- -------------------------------------------------------------------------------
GT Global Variable Natural 1.00% .40%
Resources Fund (A)
- -------------------------------------------------------------------------------
GT Global Variable Global .75% .30%
Government Income Fund (B)
- -------------------------------------------------------------------------------
GT Global Variable U.S. .75% .30%
Government Income Fund (B)
- -------------------------------------------------------------------------------
- --------------------
2 For information about advisory fees and total compensation paid to Chancellor
LGT and its affiliates during the most recently completed fiscal year, see the
Annual Report of the applicable Fund.
54
<PAGE>
The expense caps exist with respect to the Funds that correspond to the
following percents of the Funds' average daily net assets, exclusive of
brokerage commissions, taxes, interest and extraordinary expenses:
Expense Cap A 1.25%
Expense Cap B 1.00%
Expense Cap C .75%
55
<PAGE>
EXHIBIT E
AGREEMENT AND PLAN OF CONVERSION AND TERMINATION
This AGREEMENT AND PLAN OF CONVERSION AND TERMINATION ("Agreement") is
made as of this _____ day of __________, 1998, between G.T. Global Variable
Investment Series, a Massachusetts business trust ("Old Trust"), on behalf of
each segregated portfolio of assets ("series") of Old Trust listed in Schedule A
to this Agreement ("Schedule A") (each an "Old Fund"), and _______________, a
Delaware business trust ("New Trust"), on behalf of each series of New Trust
listed in Schedule A (each a "New Fund").3 (Each Old Fund and New Fund is
sometimes referred to herein individually as a "Fund" and collectively as the
"Funds"; Old Trust and New Trust are sometimes referred to herein individually
as a "Trust" and collectively as the "Trusts.") All agreements, representations,
actions, and obligations described herein made or to be taken or undertaken by a
Fund are made and shall be taken or undertaken by Old Trust on behalf of each
Old Fund and by New Trust on behalf of each New Fund.
Each Old Fund intends to change its identity and place of organization --
by converting from a series of a Massachusetts business trust to a series of a
Delaware business trust -- through a reorganization within the meaning of
section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended ("Code").
Each Old Fund desires to accomplish such conversion by transferring all its
assets to the New Fund listed on Schedule A opposite its name (which is being
established solely for the purpose of acquiring such assets and continuing such
Old Fund's business) (each, a "corresponding New Fund") in exchange solely for
voting shares of beneficial interest in such New Fund ("New Fund Shares") and
such New Fund's assumption of such Old Fund's liabilities, followed by the
constructive distribution of the New Fund Shares PRO RATA to the holders of
shares of beneficial interest in such Old Fund ("Old Fund Shares") in exchange
therefor, all on the terms and conditions set forth in this Agreement (which is
intended to be, and is adopted as, a "plan of reorganization" for federal income
tax purposes). All such transactions involving each Old Fund and its
corresponding New Fund is referred to herein as a "Reorganization." For
convenience, the balance of this Agreement will refer only to a single
Reorganization, one Old Fund, and one New Fund, but the terms and conditions of
this Agreement shall apply separately to each Reorganization. The consummation
of a Reorganization shall not be contingent on consummation of any other
Reorganization.
In consideration of the mutual promises herein contained, the parties
agree as follows:
I. Plan of Conversion and Termination.
A. Old Fund agrees to assign, sell, convey, transfer, and deliver all of
its assets described in paragraph 1.2 ("Assets") to New Fund. New Fund agrees in
exchange therefor (a) to issue and deliver to Old Fund the number of full and
fractional (rounded to the third decimal place) New Fund Shares equal to the
number of full and fractional Old Fund Shares then outstanding and (b) to assume
all of Old Fund's liabilities described in paragraph 1.3 ("Liabilities"). Such
transactions shall take place at the Closing (as defined in paragraph 2.1).
B. The Assets shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest and dividends
receivable), claims and rights of action, rights to register shares under
applicable securities laws, books and records, deferred and prepaid expenses
shown as assets on Old Fund's books, and other property owned by Old Fund at the
Effective Time (as defined in paragraph 2.1).
C. The Liabilities shall include all of Old Fund's liabilities, debts,
obligations, and duties of whatever kind or nature, whether absolute, accrued,
contingent, or otherwise, whether or not determinable at the Effective Time, and
whether or not specifically referred to herein.
D. At the Effective Time (or as soon thereafter as is reasonably
practicable), (a) the New Fund Share issued pursuant to paragraph 4.4 shall be
redeemed by New Fund for $1.00 and (b) Old Fund shall constructively distribute
the New Fund Shares received by it pursuant to paragraph 1.1 to Old Fund's
shareholders of record, determined as of the Effective Time (collectively,
"Shareholders" and each individually, a "Shareholder"), in exchange for their
Old Fund Shares. Such distribution shall be accomplished by New Trust's transfer
agent ("Transfer Agent") opening accounts on New Fund's share transfer books in
the Shareholders' names and transferring such New Fund Shares thereto. Each
Shareholder's account shall be credited with the respective PRO RATA number of
- ------------------
3 The Agreement involving G.T. Global Variable Investment Trust will be
identical to this Agreement except for the names of the trusts and their
respective series listed in schedule A.
56
<PAGE>
full and fractional (rounded to the third decimal place) New Fund Shares due
that Shareholder. All outstanding Old Fund Shares, including those represented
by certificates, shall simultaneously be canceled on Old Fund's share transfer
books. New Fund shall not issue certificates representing the New Fund Shares in
connection with the Reorganization.
E. As soon as reasonably practicable after distribution of the New Fund
Shares pursuant to paragraph 1.4, Old Fund shall be terminated and any further
actions shall be taken in connection therewith as required by applicable law.
F. Any transfer taxes payable on issuance of New Fund Shares in a name
other than that of the registered holder on Old Fund's books of the Old Fund
Shares constructively exchanged therefor shall be paid by the person to whom
such New Fund Shares are to be issued, as a condition of such transfer.
G. Any reporting responsibility of Old Fund to a public authority
is and shall remain its responsibility up to and including the date on which
it is terminated.
II. Closing.
A. The Reorganization, together with related acts necessary to consummate
the same ("Closing"), shall occur at the Trusts' principal office on May 29,
1998, or on such other date and at such other place upon which the parties may
agree. All acts taking place at the Closing shall be deemed to take place
simultaneously as of the Trusts' close of business on the date thereof or at
such other time as the parties may agree ("Effective Time").
B. Old Trust shall deliver to New Trust at the Closing a schedule of the
Assets as of the Effective Time, which shall set forth for all portfolio
securities included therein their adjusted tax basis and holding period by lot.
Old Fund's custodian shall deliver at the Closing a certificate of an authorized
officer stating that (a) the Assets held by the custodian will be transferred to
New Fund at the Effective Time and (b) all necessary taxes in conjunction with
the delivery of the Assets, including all applicable federal and state stock
transfer stamps, if any, have been paid or provision for payment has been made.
C. Old Trust shall deliver to New Trust at the Closing a list of the
Shareholders' names and addresses and the number of outstanding Old Fund Shares
owned by each Shareholder, all as of the Effective Time, certified by Old
Trust's Secretary or Assistant Secretary. The Transfer Agent shall deliver at
the Closing a certificate as to the opening on New Fund's share transfer books
of accounts in the Shareholders' names. New Trust shall issue and deliver a
confirmation to Old Trust evidencing the New Fund Shares to be credited to Old
Fund at the Effective Time or provide evidence satisfactory to Old Trust that
such shares have been credited to Old Fund's account on such books. At the
Closing, each party shall deliver to the other such bills of sale, checks,
assignments, stock certificates, receipts, or other documents as the other party
or its counsel may reasonably request.
D. Each Trust shall deliver to the other at the Closing a certificate
executed in its name by its President or a Vice President in form and substance
satisfactory to the recipient and dated the Effective Time, to the effect that
the representations and warranties it made in this Agreement are true and
correct at the Effective Time except as they may be affected by the transactions
contemplated by this Agreement. III. Representations and Warranties.
A. Old Fund represents and warrants as follows:
1. Old Trust is a trust operating under a written instrument or
declaration of trust, the beneficial interest in which is divided into
transferable shares; it is duly organized, validly existing, and in good
standing under the laws of the Commonwealth of Massachusetts; and a copy
of its Declaration of Trust is on file with the Secretary of that
Commonwealth;
2. Old Trust is duly registered as an open-end management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"),
and such registration is in full force and effect;
3. Old Fund is a duly established and designated series of Old
Trust;
4. At the Closing, Old Fund will have good and marketable title to
the Assets and full right, power, and authority to sell, assign, transfer,
and deliver the Assets free of any liens or other encumbrances; and upon
delivery and payment for the Assets, New Fund will acquire good and
marketable title thereto;
5. New Fund Shares are not being acquired for the purpose of making
any distribution thereof, other than in accordance with the terms hereof;
6. Old Fund is a "fund" as defined in section 851(g)(2) of the Code;
it qualified for treatment as a regulated investment company under
Subchapter M of the Code ("RIC") for each past taxable year since it
commenced operations and will continue to meet all the requirements for
such qualification for its current taxable year (and the Assets will be
invested at all times through the Effective Time in a manner that ensures
57
<PAGE>
compliance with the foregoing); it has no earnings and profits accumulated
in any taxable year in which the provisions of Subchapter M did not apply
to it; and it has made all distributions for each such past taxable year
that are necessary to avoid the imposition of federal excise tax or has
paid or provided for the payment of any excise tax imposed for any such
year;
7. There is no plan or intention of Shareholders [WHO INDIVIDUALLY
OWN 5% OR MORE OF THE OLD FUND SHARES -- AND, TO THE BEST OF OLD TRUST'S
MANAGEMENT'S KNOWLEDGE, THERE IS NO PLAN OR INTENTION OF THE REMAINING
SHAREHOLDERS --] to redeem or otherwise dispose of any New Fund Shares to
be received by them in the Reorganization. That management does not
anticipate dispositions of those shares at the time of or soon after the
Reorganization to exceed the usual rate and frequency of redemptions of
shares of Old Fund as a series of an open-end investment company.
Consequently, that management expects that the percentage of Shareholder
interests, if any, that will be disposed of as a result of or at the time
of the Reorganization will be DE MINIMIS;
8. The Liabilities were incurred by Old Fund in the ordinary course
of its business and are associated with the Assets;
9. Old Fund is not under the jurisdiction of a court in a proceeding
under Title 11 of the United States Code or similar case within the
meaning of section 368(a)(3)(A) of the Code;
10. Not more than 25% of the value of Old Fund's total assets
(excluding cash, cash items, and U.S. government securities) is invested
in the stock and securities of any one issuer, and not more than 50% of
the value of such assets is invested in the stock and securities of five
or fewer issuers;
11. As of the Effective Time, Old Fund will not have outstanding any
warrants, options, convertible securities, or any other type of rights
pursuant to which any person could acquire Old Fund Shares;
12. At the Effective Time, the performance of this Agreement shall
have been duly authorized by all necessary action by Old Fund's
shareholders; and
13. Old Fund will be terminated as soon as reasonably practicable
after the Reorganization, but in all events within twelve months after the
Effective Time.
B. New Fund represents and warrants as follows:
1. New Trust is a business trust duly organized, validly existing,
and in good standing under the laws of the State of Delaware, and its
Certificate of Trust has been duly filed in the office of the Secretary of
State thereof;
2. At the Effective Time New Trust will succeed to Old Trust's
registration statement filed under the 1940 Act with the Securities and
Exchange Commission ("SEC") and thus will become duly registered as an
open-end management investment company thereunder;
3. Before the Effective Time, New Fund will be a duly established
and designated series of New Trust;
4. New Fund has not commenced operations and will not commence
operations until after the Closing;
5. Prior to the Effective Time, there will be no issued and
outstanding shares in New Fund or any other securities issued by New Fund,
except as provided in paragraph 4.4;
6. No consideration other than New Fund Shares (and New Fund's
assumption of the Liabilities) will be issued in exchange for the Assets
in the Reorganization;
7. The New Fund Shares to be issued and delivered to Old Fund
hereunder will, at the Effective Time, have been duly authorized and, when
issued and delivered as provided herein, will be duly and validly issued
and outstanding shares of New Fund, fully paid and non-assessable;
8. New Fund will be a "fund" as defined in section 851(g)(2) of the
Code and will meet all the requirements to qualify for treatment as a RIC
for its taxable year in which the Reorganization occurs;
9. New Fund has no plan or intention to issue additional New Fund
Shares following the Reorganization except for shares issued in the
ordinary course of its business as a series of an open-end investment
company; nor does New Fund have any plan or intention to redeem or
otherwise reacquire any New Fund Shares issued pursuant to the
Reorganization, other than in the ordinary course of that business or to
the extent necessary to comply with its legal obligation under section
22(e) of the 1940 Act;
10. New Fund will actively continue Old Fund's business in
substantially the same manner that Old Fund conducted that business
immediately before the Reorganization; and New Fund has no plan or
intention to sell or otherwise dispose of any of the Assets, except for
dispositions made in the ordinary course of its business and dispositions
necessary to maintain its qualification as a RIC, although in the ordinary
course of its business New Fund will continuously review its investment
portfolio (as Old Fund did before the Reorganization) to determine whether
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to retain or dispose of particular stocks or securities, including those
included in the Assets;
11. There is no plan or intention for New Fund to be dissolved or
merged into another corporation or business trust or "fund" thereof
(within the meaning of section 851(g)(2) of the Code) following the
Reorganization; and
12. Immediately after the Reorganization, (a) not more than 25% of
the value of New Fund's total assets (excluding cash, cash items, and U.S.
government securities) will be invested in the stock and securities of any
one issuer and (b) not more than 50% of the value of such assets will be
invested in the stock and securities of five or fewer issuers.
C. Each Fund represents and warrants as follows:
1. The fair market value of the New Fund Shares received by each
Shareholder will be approximately equal to the fair market value of the
Old Fund Shares constructively surrendered in exchange therefor;
2. Immediately following consummation of the Reorganization, the
Shareholders will own all the New Fund Shares and will own such shares
solely by reason of their ownership of Old Fund Shares immediately before
the Reorganization;
3. The Shareholders will pay their own expenses, if any, incurred in
connection with the Reorganization;
4. There is no intercompany indebtedness between the Funds that was
issued or acquired, or will be settled, at a discount; and
5. Immediately following consummation of the Reorganization, New
Fund will hold the same assets -- except for assets distributed to
shareholders in the course of its business as a RIC and assets used to pay
expenses incurred in connection with the Reorganization -- and be subject
to the same liabilities that Old Fund held or was subject to immediately
prior to the Reorganization, plus any liabilities for expenses of the
parties incurred in connection with the Reorganization. Such excepted
assets, together with the amount of all redemptions and distributions
(other than regular, normal dividends) made by Old Fund immediately
preceding the Reorganization, will, in the aggregate, constitute less than
1% of its net assets.
IV. Conditions Precedent.
Each Fund's obligations hereunder shall be subject to (a) performance by
the other party of all its obligations to be performed hereunder at or before
the Effective Time, (b) all representations and warranties of the other party
contained herein being true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
hereby, as of the Effective Time, with the same force and effect as if made on
and as of the Effective Time, and (c) the further conditions that, at or before
the Effective Time:
A. All necessary filings shall have been made with the SEC and state
securities authorities, and no order or directive shall have been received that
any other or further action is required to permit the parties to carry out the
transactions contemplated hereby. All consents, orders, and permits of federal,
state, and local regulatory authorities (including the SEC and state securities
authorities) deemed necessary by either Trust to permit consummation, in all
material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain same would not involve a risk of a
material adverse effect on the assets or properties of either Fund, provided
that either Trust may for itself waive any of such conditions;
B. Old Trust shall have called a meeting of Old Fund's shareholders
("Shareholders Meeting") to consider and act on this Agreement and the
Reorganization, and at such meeting those shareholders shall have approved
thereof in accordance with applicable law;
C. Each party shall have received an opinion from Kirkpatrick & Lockhart
LLP as to the federal income tax consequences mentioned below. In rendering such
opinion, such counsel may rely as to factual matters, exclusively and without
independent verification, on the representations made in this Agreement (or in
separate letters addressed to such counsel) and the certificates delivered
pursuant to paragraph 2.4. Such opinion shall be substantially to the effect
that, based on the facts and assumptions stated therein and conditioned on
consummation of the Reorganization in accordance with this Agreement, for
federal income tax purposes:
1. The Reorganization will constitute a reorganization within the
meaning of section 368(a)(1)(F) of the Code, and each Fund will be "a
party to a reorganization" within the meaning of section 368(b) of the
Code;
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2. No gain or loss will be recognized to Old Fund on the transfer of
the Assets to New Fund in exchange solely for New Fund Shares and New
Fund's assumption of the Liabilities or on the subsequent distribution of
those shares to the Shareholders, in constructive exchange for their Old
Fund Shares, in liquidation of Old Fund;
3. No gain or loss will be recognized to New Fund on its receipt of
the Assets in exchange for New Fund Shares and its assumption of the
Liabilities;
4. New Fund's basis for the Assets will be the same as the basis
thereof in Old Fund's hands immediately before the Reorganization, and New
Fund's holding period for the Assets will include Old Fund's holding
period therefor;
5. A Shareholder will recognize no gain or loss on the constructive
exchange of all its Old Fund Shares solely for New Fund Shares pursuant to
the Reorganization;
6. A Shareholder's basis for the New Fund Shares to be received by
it in the Reorganization will be the same as the basis for its Old Fund
Shares to be constructively surrendered in exchange for those New Fund
Shares, and its holding period for those New Fund Shares will include its
holding period for those Old Fund Shares, provided they are held as
capital assets by the Shareholder at the Effective Time; and
7. For purposes of section 381 of the Code, New Fund will be treated
as if there had been no Reorganization. Accordingly, the Reorganization
will not result in the termination of Old Fund's taxable year, Old Fund's
tax attributes enumerated in section 381(c) of the Code will be taken into
account by New Fund as if there had been no Reorganization, and the part
of Old Fund's taxable year before the Reorganization will be included in
New Fund's taxable year after the Reorganization;
D. Prior to the Closing, New Trust's trustees shall have authorized the
issuance of, and New Fund shall have issued, one New Fund Share to Old Trust in
consideration of the payment of $1.00 for the purpose of enabling Old Trust to
elect Old Trust's trustees as New Trust's trustees (to serve without limit in
time, except as they may resign or be removed by action of New Trust's trustees
or shareholders), to ratify the selection of New Trust's independent certified
public accountants, and to vote on the matters referred to in paragraph 4.5; and
E. New Trust (on behalf of and with respect to New Fund) shall have
entered into an investment management and administration agreement, a
sub-advisory agreement, and such other agreements as are necessary for New
Fund's operation as a series of an open-end investment company. Each such
agreement shall have been approved by New Trust's trustees and, to the extent
required by law, by such of those trustees who are not "interested persons"
thereof (as defined in the 1940 Act) and by Old Trust as the sole shareholder of
New Fund.
At any time prior to the Closing, any of the foregoing conditions (except
that set forth in paragraph 4.2) may be waived by the trustees of either Trust
if, in their judgment, such waiver will not have a material adverse effect on
the interests of Old Fund's shareholders.
V. Expenses.
Except as otherwise provided in subparagraph 3.3.3, all expenses
incurred in connection with the transactions contemplated by this Agreement
(regardless of whether they are consummated) will be borne by the parties as
they mutually agree.
VI. Entire Agreement; Survival.
Neither party has made any representation, warranty, or covenant not
set forth herein, and this Agreement constitutes the entire agreement between
the parties. The representations, warranties, and covenants contained herein
or in any document delivered pursuant hereto or in connection herewith shall
survive the Closing.
VII. Amendment.
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding approval thereof by Old Fund's shareholders, in such manner
as may be mutually agreed upon in writing by the parties; provided that
following such approval no such amendment shall have a material adverse
effect on the Shareholders' interests.
VIII. Termination.
This Agreement may be terminated at any time at or prior to the Effective
Time, whether before or after approval by Old Fund's shareholders:
A. By either Fund (a) in the event of the other Fund's material breach of
any representation, warranty, or covenant contained herein to be performed at or
prior to the Effective Time, (b) if a condition to its obligations has not been
met and it reasonably appears that such condition will not or cannot be met, or
(c) if the Closing has not occurred on or before September 30, 1998; or
B. By the parties' mutual agreement.
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Except as otherwise provided in paragraph 5, in the event of
termination under paragraphs 8.1(c) or 8.2, there shall be no liability for
damages on the part of either Fund -- or the trustees or officers of either
Trust -- to the other Fund.
IX. Miscellaneous.
A. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware; provided that, in the case of any
conflict between such laws and the federal securities laws, the latter shall
govern.
B. Nothing expressed or implied herein is intended or shall be construed
to confer upon or give any person, firm, trust, or corporation other than the
parties and their respective successors and assigns any rights or remedies under
or by reason of this Agreement.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed
and delivered by its duly authorized officers as of the day and year first
written above.
Attest: G.T. GLOBAL VARIABLE INVESTMENT SERIES,
on behalf of each of its
series listed in Schedule A
to this Agreement
________________________ By:_____________________________________
Title:____________________________________
Attest: _______________________________,
on behalf of each of its
series listed in Schedule A
to this Agreement
________________________ By:______________________________________
Title:____________________________________
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SCHEDULE A
SERIES OF GT GLOBAL VARIABLE INVESTMENT SERIES OF ________________
SERIES
GT Global Variable America Fund AIM/GT Global Variable America Fund
GT Global Variable Europe Fund AIM/GT Global Variable Europe Fund
GT Global Variable International Fund AIM/GT Global Variable International
GT Global Variable New Pacific Fund Fund
GT Global Money Market Fund AIM/GT Global Variable New Pacific
Fund
AIM/GT Global Money Market Fund
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EXHIBIT F
AGREEMENT AND DECLARATION OF TRUST
OF
-------------------
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered into
as of ________, 1998, among ________, ________, ________, ________, and
________, as trustees, and each person who becomes a shareholder (as hereinafter
defined) in accordance with the terms hereinafter set forth.
WHEREAS, the parties hereto desire to create a business trust pursuant to
the Delaware Act (as hereinafter defined) for the investment and reinvestment of
funds contributed thereto;
NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust be
filed with the Office of the Secretary of State of Delaware and do hereby
declare that all money and property contributed to the trust hereunder shall be
held and managed in trust under this Trust Agreement for the benefit of the
Shareholders (as hereinafter defined) as herein set forth below.
ARTICLE I
NAME, DEFINITIONS, PURPOSE AND CERTIFICATE OF TRUST
SECTION 1.1. NAME. The name of the business trust created hereby is
"___________," and the Trustees may transact the Trust's affairs in that
name. The Trust shall constitute a Delaware business trust in accordance
with the Delaware Act, as hereinafter defined.
SECTION 1.2. DEFINITIONS. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) "Agreement" means this Agreement and Declaration of Trust, as it may
be amended from time to time;
(b) "Bylaws" means the Bylaws referred to in Article IV, Section 4.1(e)
hereof, as from time to time amended;
(c) "Class" means a portion of Shares of a Portfolio of the Trust
established in accordance with the provisions of Article II, Section
2.3 hereof;
(d) "Affiliated Person," "Company," "Person," and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, as
modified by or interpreted by any applicable Commission" shall have
the meaning given it in the 1940 Act. The terms "order or orders of
the Commission or any rules or regulations adopted or interpretive
releases of the Commission thereunder;
(e) "Covered Person" means every person who is, or has been, a Trustee
or an officer or employee of the Trust;
(f) The "Delaware Act" refers to the Delaware Business Trust Act, 12
Del. C. ss. 3801 ET SEQ., as such Act may be amended from time to
time;
(g) "Majority Shareholder Vote" means "the vote of a majority of the
outstanding voting securities" (as defined in the 1940 Act) of the
Trust, Portfolio, or Class, as applicable;
(h) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time;
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(i) "Outstanding Shares" means Shares shown on the books of the Trust or
its transfer agent as then issued and outstanding, but does not
include Shares that have been repurchased or redeemed by the Trust;
(j) "Portfolio" means a series of Shares of the Trust established in
accordance with the provisions of Article II, Section 2.3 hereof;
(k) "Shareholder" means a record owner of Outstanding Shares of the
Trust;
(l) "Shares" means, as to a Portfolio or any Class thereof, the equal
proportionate transferable units of beneficial interest into which
the beneficial interest of such Portfolio of the Trust or such Class
thereof shall be divided and may include fractions of Shares as well
as whole Shares;
(m) The "Trust" means __________, the Delaware business trust
established hereby, and reference to the Trust, when applicable to
one or more Portfolios of the Trust, or Classes thereof, shall refer
to any such Portfolio, or Class thereof, as the case may be;
(n) The "Trustees" means the Persons who have signed this Agreement
and Declaration of Trust as trustees so long as they shall
continue to serve as trustees of the Trust in accordance with the
terms hereof, and all other Persons who may from time to time be
duly appointed as Trustee in accordance with the provisions of
Section 3.4 hereof, and reference herein to a Trustee or to the
Trustees shall refer to such Persons in their capacity as
Trustees hereunder; and
(o) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account
of one or more of the Trust, any Portfolio, any Class of a
Portfolio, or the Trustees on behalf of the Trust, a Portfolio, or a
Class.
SECTION 1.3. PURPOSE. The purpose of the Trust is to conduct, operate and
carry on the business of a management investment company registered under
the 1940 Act through one or more Portfolios investing primarily in
securities and to carry on such other business as the Trustees may from
time to time determine pursuant to their authority under this Trust
Agreement.
SECTION 1.4. CERTIFICATE OF TRUST. Immediately upon the execution of this
Trust Agreement, the Trustees shall file a Certificate of Trust with
respect to the Trust in the Office of the Secretary of State of the State
of Delaware pursuant to the Delaware Act.
ARTICLE II
BENEFICIAL INTEREST
SECTION 2.1. SHARES OF BENEFICIAL INTEREST. The beneficial interest in the
Trust shall be divided into an unlimited number of Shares, with par value
of $0.01 per Share. The Trustees may, from time to time, authorize the
division of the Shares into one or more series, each of which constitutes
a Portfolio, and may further authorize the division of said Portfolios
into one or more additional, separate and distinct Classes in accordance
with Article II, Section 2.3 of this Agreement. All shares issued
hereunder, including without limitation, Shares issued in connection with
a dividend or other distribution in Shares or a split or reverse split of
Shares, shall be fully paid and nonassessable.
SECTION 2.2. ISSUANCE OF SHARES. The Trustees in their discretion may,
from time to time, without vote of the Shareholders, issue Shares, in
addition to the then issued and outstanding Shares and Shares held in the
treasury, to such party or parties and for such amount and type of
consideration, subject to applicable law, including cash or securities, at
such time or times and on such terms as the Trustees may deem appropriate,
and may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with, the assumption of liabilities)
and businesses. In connection with any issuance of Shares, the Trustees
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may issue fractional Shares and Shares held in the treasury. The Trustees
may from time to time divide or combine the Shares into a greater or
lesser number without thereby changing the proportionate beneficial
interests in the Trust. Contributions to the Trust may be accepted for,
and Shares shall be redeemed as, whole Shares and/or 1/1,000th of a Share
or integral multiples thereof.
SECTION 2.3. ESTABLISHMENT OF PORTFOLIOS AND CLASSES. The Trust shall
consist of one or more separate and distinct Portfolios, each with an
unlimited number of Shares unless otherwise specified. The Trustees hereby
establish and designate the Portfolios listed on Schedule A attached
hereto and made a part hereof ("Schedule A"). Each additional Portfolio
shall be established by the adoption of a resolution by the Trustees and
shall be effective upon the date stated therein (or, if no such date is
stated, upon the date of such adoption). The Shares of each Portfolio
shall have the relative rights and preferences provided for herein and
such rights and preferences as may be designated by the Trustees. The
Trust shall maintain separate and distinct records for each Portfolio and
shall hold and account for the assets belonging thereto separately from
the other Trust Property and the assets belonging to any other Portfolio.
Each Share of a Portfolio shall represent an equal beneficial interest in
the net assets belonging to that Portfolio, except to the extent of
expenses separately allocated to Classes thereof as permitted herein. A
Portfolio may have exclusive voting rights with respect to matters
affecting only that Portfolio.
The Trustees may divide the Shares of any Portfolio into two or more
Classes, each with an unlimited number of Shares unless otherwise
specified. Each Class so established and designated shall represent
interests in the net assets belonging to that Portfolio and shall have
identical voting, dividend, liquidation, and other rights and be subject
to the same terms and conditions, except that expenses (or certain assets
as determined by the Trustees) allocated to a Class may be borne solely by
(or credited solely to) that Class and except that each Class may have
separate rights to convert to another Class, exchange rights, and similar
rights, each as determined by the Trustees and a Class may have exclusive
voting rights with respect to matters affecting only that Class. The
Trustees hereby establish for each Portfolio listed on Schedule A the
Classes listed thereon. Each additional Class for any or all Portfolios
shall be established by the adoption of a resolution by the Trustees and
shall be effective upon the date stated therein (or, if no such date is
stated, upon the date of such adoption).
SECTION 2.3.1. Subject to Section 6.1 of this Trust Agreement, the
Trustees shall have full power and authority, in their sole discretion
without obtaining any prior authorization or vote of the Shareholders of
any Portfolio, or Class thereof, to establish and designate and to change
in any manner any Portfolio of Shares, or any Class or Classes thereof; to
fix such preferences, voting powers, rights, and privileges of any
Portfolio, or Classes thereof, as the Trustees may from time to time
determine (but the Trustees may not change the preferences, voting powers,
rights, and privileges of Outstanding Shares in a manner materially
adverse to the Shareholders of such Shares without the prior approval of
the affected Shareholders); to divide or combine the Shares or any
Portfolio, or Classes thereof, into a greater or lesser number; to
classify or reclassify any issued Shares or any Portfolio, or Classes
thereof, into one or more Portfolios or Classes of Shares of a Portfolio;
and to take such other action with respect to the Shares as the Trustees
may deem desirable. A Portfolio and any Class thereof may issue any number
of Shares but need not issue any shares. At any time that there are no
Shares outstanding of any particular Portfolio or Class previously
established and designated, the Trustees may abolish that Portfolio or
Class and the establishment and designation thereof.
SECTION 2.3.2. Unless the establishing resolution or any other resolution
adopted pursuant to this Section 2.3 otherwise provides, Shares of each
Portfolio or Class thereof established hereunder shall have the following
relative rights and preferences:
(a) Shareholders shall have no preemptive or other right to subscribe to
any additional Shares or other securities issued by the Trust or the
Trustees, whether of the same or other Portfolio (or Class).
(b) All consideration received by the Trust for the issue or sale of
Shares of a particular Portfolio, together with all assets in
which such consideration is invested or reinvested, all income,
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earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange, or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall be held and
accounted for separately from the other assets of the Trust and
of every other Portfolio and may be referred to herein as "assets
belonging to" that Portfolio. The assets belonging to a
particular Portfolio shall belong to that Portfolio for all
purposes, and to no other Portfolio, subject only to the rights
of creditors of that Portfolio. In addition, any assets, income,
earnings, profits, or funds, or payments and proceeds with
respect thereto, which are not readily identifiable as belonging
to any particular Portfolio shall be allocated by the Trustees
between and among one or more of the Portfolios for all purposes
and such assets, income, earnings, profits, or funds, or payments
and proceeds with respect thereto, shall be assets belonging to
that Portfolio. The Trustees may, in their sole discretion,
allocate certain assets to a particular Class, and such assets
may be referred to herein as "assets belonging to" that Class.
(c) A particular Portfolio (or Class) shall be charged with the
liabilities of that Portfolio (or Class) and all expenses, costs,
charges and reserves attributable to any particular Portfolio (or
Class) shall be borne by such Portfolio (or Class). Any general
liabilities, expenses, costs, charges or reserves to the Trust
which are not readily identifiable as belonging to any particular
Portfolio (or Class) shall be allocated and charged by the
Trustees between or among any one or more of the Portfolios (or
Classes) in such manner as the Trustees in their sole discretion
deem fair and equitable. Each such allocation shall be
conclusive and binding upon the Shareholders of all Portfolios
(or Classes) for all purposes. Without limitation of the
foregoing provisions of this Subsection 2.3.2, the debts,
liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular Portfolio (or
Class) shall be enforceable against the assets of such Portfolio
(or Class) only, and not against the assets of the Trust
generally. Notice of this contractual limitation on
inter-Portfolio liabilities shall be set forth in the Certificate
of Trust described in Section 1.4 of this Agreement (whether
originally or by amendment), and upon the giving of such notice
in the Certificate of Trust, the statutory provisions of Section
3804 of the Delaware Act relating to limitations on
inter-Portfolio liabilities (and the statutory effect under
Section 3804 of setting forth such notice in the Certificate of
Trust) shall become applicable to the Trust and each Portfolio
and Class thereof.
All references to Shares in this Trust Agreement shall be deemed to
be shares of any or all Portfolios, or Classes thereof, as the
context may require. All provisions herein relating to the Trust
shall apply equally to each Portfolio of the Trust, and each Class
thereof, except as the context otherwise requires.
SECTION 2.4. INVESTMENT IN THE TRUST. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such
consideration, which may consist of cash or tangible or intangible
property or a combination thereof, as the Trustees from time to time may
authorize. At the Trustees' sole discretion, such investments, subject to
applicable law, may be in the form of cash or securities in which the
affected Portfolio is authorized to invest, valued as provided in
applicable law. Each Investment shall be credited to the individual
shareholder's account in the form of full and fractional Shares of the
Trust, in such Portfolio (or Class) as the purchaser shall select.
SECTION 2.5. PERSONAL LIABILITY OF SHAREHOLDERS. As provided by applicable
law, no Shareholder of the Trust shall be personally liable for the debts,
liabilities, obligations, and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or any Portfolio (or Class)
thereof. Neither the Trust nor the Trustees, nor any officer, employee, or
agent of the Trust shall have any power to bind personally any Shareholder
or, except as provided herein or by applicable law, to call upon any
Shareholder for the payment of any sum of money or assessment whatsoever
other than such as the Shareholder may at any time personally agree to pay
by way of subscription for any Shares or otherwise. The Shareholders shall
be entitled, to the fullest extent permitted by applicable law, to the
same limitation on personal liability as is extended under the Delaware
General Corporation Law to stockholders of private corporations for
profit. Every note, bond, contract, or other undertaking issued by or on
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behalf of the Trust or the Trustees relating to the Trust or to any
Portfolio (or Class) thereof shall include a recitation limiting the
obligation represented thereby to the Trust or to one or more Portfolios
thereof or to one or more Classes of a Portfolio and its or their assets
(but the omission of such a recitation shall not operate to bind any
Shareholder or Trustee of the Trust).
SECTION 2.6. ASSENT TO TRUST AGREEMENT. Every Shareholder, by virtue of
having purchased a Share, shall be held to have expressly assented to, and
agreed to be bound by, the terms hereof. The death of a Shareholder during
the continuance of the Trust shall not operate to terminate the same nor
entitle the representative of any deceased Shareholder to an accounting or
to take any action in court or elsewhere against the Trust or the
Trustees, but only to rights of said decedent under this Trust.
ARTICLE III
THE TRUSTEES
SECTION 3.1. MANAGEMENT OF THE TRUST. The Trustees shall have exclusive
and absolute control over the Trust Property and over the business of the
Trust to the same extent as if the Trustees were the sole owners of the
Trust Property and business in their own right, but with such powers of
delegation as may be permitted by this Trust Agreement. The Trustees shall
have power to conduct the business of the Trust and carry on its
operations in any and all of its branches and maintain offices both within
and without the State of Delaware, in any and all states of the United
States of America, in the District of Columbia, in any and all
commonwealths, territories, dependencies, colonies, or possessions of the
United States of America, and in any and all foreign jurisdictions and to
do all such other things and execute all such instruments as they deem
necessary, proper or desirable in order to promote the interests of the
Trust although such things are not herein specifically mentioned. Any
determination as to what is in the interests of the Trust made by the
Trustees in good faith shall be conclusive. In construing the provisions
of this Trust Agreement, the presumption shall be in favor of a grant of
power to the Trustees.
The enumeration of any specific power in this Trust Agreement shall not be
construed as limiting the aforesaid power. The powers of the Trustees may
be exercised without order of or resort to any court or other authority.
SECTION 3.2. INITIAL TRUSTEES. The initial Trustees shall be the
persons named herein.
SECTION 3.3. TERMS OF OFFICE OF TRUSTEES. The Trustees shall hold office
during the lifetime of this Trust, and until its termination as herein
provided; except (a) that any Trustee may resign his trusteeship or may
retire by written instrument signed by him and delivered to the other
Trustees, which shall take effect upon such delivery or upon such later
date as is specified therein; (b) that any Trustee may be removed at any
time by written instrument, signed by least two-thirds of the number of
Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) that any Trustee who has died, become
physically or mentally incapacitated by reason of disease or otherwise, or
is otherwise unable to serve, may be retired by written instrument signed
by a majority of the other Trustees, specifying the date of his
retirement; and (d) that a Trustee may be removed at any meeting of the
Shareholders of the Trust by a vote of the Shareholders owning at least
two-thirds of the Outstanding Shares.
SECTION 3.4. VACANCIES AND APPOINTMENT OF TRUSTEES. A vacancy shall occur
in case of the declination to serve, death, resignation, retirement or
removal of a Trustee, or a Trustee is otherwise unable to serve, or an
increase in the number of Trustees. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled, the other Trustees
shall have all the powers hereunder and the certification of the other
Trustees of such vacancy shall be conclusive. In the case of an existing
vacancy, the remaining Trustees may fill such vacancy by appointment such
other person as they in their discretion shall see fit, or may leave such
vacancy unfilled or may reduce the number of Trustees to not less than two
(2) Trustees. Such appointment shall be evidenced by a written instrument
signed by a majority of the Trustees in office or by resolution of the
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Trustees, duly adopted, which shall be recorded in the minutes of a
meeting of the Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation,
or removal of a Trustee or an increase in number of Trustees effective at
a later date, provided that said appointment shall become effective only
at the time or after the expected vacancy occurs. As soon as any Trustee
appointed pursuant to this Section 3.4 shall have accepted this
appointment in writing and agreed in writing to be bound by the terms of
the Trust Agreement, the Trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act
or conveyance, and he shall be deemed a Trustee hereunder.
SECTION 3.5. TEMPORARY ABSENCE OF TRUSTEE. Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any
one time to any other Trustee or Trustees, provided that in no case shall
less than two Trustees personally exercise the other powers hereunder
except as herein otherwise expressly provided.
SECTION 3.6. NUMBER OF TRUSTEES. The number of Trustees shall initially be
five (5), and thereafter shall be such number as shall be fixed from time
to time by a majority of the Trustees; provided, however, that the number
of Trustees shall in no event be less than two (2) [nor more than twelve
(12)]. The Shareholders shall elect the Trustees (other than the initial
Trustees) on such dates as the Trustees may fix from time to time.
SECTION 3.7. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The
declination to serve, death, resignation, retirement, removal, incapacity,
or inability of the Trustees, or any one of them, shall not operate to
terminate the Trust or to revoke any existing agency created pursuant to
the terms of this Trust Agreement.
SECTION 3.8. OWNERSHIP OF ASSETS OF THE TRUST. The assets of the Trust and
of each Portfolio thereof shall be held separate and apart from any assets
now or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustees. Legal title in all of the assets
of the Trust and the right to conduct any business shall at all times be
considered as vested in the Trustees on behalf of the Trust, except that
the Trustees may cause legal title to any Trust Property to be held by, or
in the name of the Trust, or in the name of any Person as nominee. No
Shareholder shall be deemed to have a severable ownership in any
individual asset of the Trust or of any Portfolio, or Class thereof, or
any right of partition or possession thereof, but each Shareholder shall
have, except as otherwise provided for herein, a proportionate undivided
beneficial interest in the Trust, Portfolio or Class thereof. The Shares
shall be personal property giving only the rights specifically set forth
in this Trust Agreement or the Delaware Act.
ARTICLE IV
POWERS OF THE TRUSTEES
SECTION 4.1. POWERS. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do any
and all acts and to make and execute any and all contracts and instruments
that they may consider necessary or appropriate in connection with the
management of the Trust. Without limiting the foregoing and subject to any
applicable limitation in this Trust Agreement or the Bylaws of the Trust,
the Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or
limited by any present or future law or custom in regard to
investments by Trustees, and to sell, exchange, lend, pledge,
mortgage, hypothecate, write options on, and lease any or all of the
assets of the Trust;
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(b) To operate as, and to carry on the business of, an investment
company, and exercise all the powers necessary and appropriate to
the conduct of such operations;
(c) To borrow money and in this connection issue notes or other evidence
of indebtedness; to secure borrowings by mortgaging, pledging, or
otherwise subjecting as security the Trust Property; to endorse,
guarantee, or undertake the performance of an obligation or
engagement of any other Person and to lend Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereafter provided for
or by the Trust itself, or both, or otherwise pursuant to a plan of
distribution of any kind;
(e) To adopt Bylaws not inconsistent with this Trust Agreement providing
for the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve such right to the
shareholders; such Bylaws shall be deemed incorporated and included
in this Trust Agreement;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that are
members of a national securities exchange, or such other domestic or
foreign entities as custodians of any assets of the Trust subject to
any conditions set forth in this Trust Agreement or in the Bylaws;
(h) To retain one or more transfer agents or Shareholder servicing
agents, or both;
(i) To set record dates in the manner provided herein or in the Bylaws;
(j) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, manager,
administrator, custodian, underwriter, or other agent or independent
contractor;
(k) To sell or exchange any or all of the assets of the Trust, subject
to the provisions of Article VI, Section 6.1 hereof;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies and powers of attorney to such person or persons as
the Trustees shall deem proper, granting to such person or persons
such power and discretion with relation to securities or property as
the Trustee shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any Trust,
whether in bearer, book entry, unregistered, or other negotiable
form; or either in the name of the Trust or of a Portfolio or Class
thereof or in the name of a custodian or a nominee or nominees,
subject in either case to proper safeguards according to the usual
practice of Delaware business trusts or investment companies;
(o) To establish separate and distinct Portfolios with separately
defined investment objectives and policies and distinct investment
purposes in accordance with the provisions of Article II hereof and
to establish Classes of such Portfolios having relative rights,
powers, and duties as they may provide consistent with applicable
law;
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(p) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities, and expenses of the Trust to a
particular Portfolio or to apportion the same between or among two
or more Portfolios, provided that any liabilities or expenses
incurred by a particular Portfolio shall be payable solely out of
the assets belonging to that Portfolio as provided for in Article II
hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation, or merger of any corporation or concern, any security
of which is held in the Trust; to consent to any contact, lease,
mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
(s) To declare and pay dividends and make distributions of income and of
capital gains and capital to Shareholders in the manner hereinafter
provided;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Portfolio or Class, and
to require the redemption of the Shares of any Shareholder whose
investment is less than such minimum upon giving notice to such
Shareholder;
(u) To establish one or more committees, to delegate any of the
powers of the Trustees to said committees, and to adopt a
committee charter providing for such responsibilities, membership
(including Trustees, officers, or other agents of the Trust
therein) and any other characteristics of said committees as the
Trustees may deem proper. Notwithstanding the provisions of this
Article IV, and in addition to such provisions or any other
provision of this Trust Agreement or of the Bylaws, the Trustees
may by resolution appoint a committee consisting of less than the
whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if
the acts of such committee were the acts of all the Trustees then
in office, with respect to the institution, prosecution,
dismissal, settlement, review, or investigation of any action,
suit, or proceeding which shall be pending or threatened to be
brought before any court, administrative agency, or other
adjudicatory body;
(v) To interpret the investment policies, practices or limitations of
any Portfolios;
(w) To establish a registered office and have a registered agent in the
State of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything
necessary, suitable, or proper for the accomplishment of any
purpose or the attainment of any object or the furtherance of any
power hereinbefore set forth, either alone or in association with
others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid
business or purposes, objects, or powers.
The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by
one or more of the Trustees in their capacity as such hereunder shall be
deemed an action on behalf of the Trust or the applicable Portfolio, and
not an action in an individual capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees
or upon their order.
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SECTION 4.2. ISSUANCE AND REPURCHASE OF SHARES. The Trustees shall have
the power to issue, sell repurchase, redeem, retire, cancel, acquire,
hold, resell, reissue, dispose of, and otherwise deal in Shares and,
subject to the provisions set forth in Article II and VII, to apply to any
such repurchase, redemption, retirement, cancellation, or acquisition of
Shares any funds or property of the Trust, or the particular Portfolio or
Class of the Trust, with respect to which such Shares are issued.
SECTION 4.3. ACTION BY THE TRUSTEES. The Trustees shall act by majority
vote of those present at a meeting duly called (including a meeting by
telephonic or other electronic means, unless the 1940 Act requires that a
particular action be taken only at a meeting of the Trustees in person) at
which a quorum is present or by unanimous written consent of the Trustees
(or by written consent of a majority of the Trustees if the President of
the Trust determines that such exceptional circumstances exist, and are of
such urgency, as to make unanimous written consent impossible or
impractical, which determination shall be conclusive and binding on all
Trustees and not otherwise subject to challenge) without a meeting. A
majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the
President of the Trust or by any two Trustees. Notice of the time, date,
and place of all meetings of the Trustees shall be given to each Trustee
by telephone, facsimile, electronic-mail, or other electronic mechanism
sent to his or her home or business address at least twenty-four hours in
advance of the meeting or in person at another meeting of the Trustees or
by written notice mailed to his or her home or business address at least
seventy-two hours in advance of the meeting. Notice need not be given to
any Trustee who attends the meeting without objecting to the lack of
notice or who signs a waiver of notice either before or after the meeting.
Subject to the requirements of the 1940 Act, the Trustees by majority vote
may delegate to any Trustee or Trustees authority to approve particular
matters or take particular actions on behalf of the Trust. Any written
consent or waiver may be provided and delivered to the Trust by any means
by which notice may be given to a Trustee.
SECTION 4.4. PRINCIPAL TRANSACTIONS. The Trustees may, on behalf of the
Trust, buy any securities from or sell any securities to, or lend any
assets of the Trust to, any Trustee or officer of the Trust or any firm of
which any such Trustee or officer is a member acting as principal, or have
any such dealings with any investment adviser, distributor, or transfer
agent for the Trust or with any affiliated person of such Person; and the
Trust may employ any such Person, or firm or Company in which such Person
is an affiliated person, as broker, legal counsel, registrar, investment
adviser, distributor, administrator, transfer agent, dividend disbursing
agent, custodian, or in any capacity upon customary terms, subject in all
cases to applicable laws, rules, and regulations and orders of regulatory
authorities.
SECTION 4.5. PAYMENT OF EXPENSES BY THE TRUST. The Trustees are authorized
to pay or cause to be paid out of the principal or income of the Trust or
Portfolio (or Class), or partly out of the principal and partly out of
income, and to charge or allocate the same to, between or among such one
or more of the Portfolios (or Classes) that may be established or
designated pursuant to Article II, Section 2.3, as they deem fair, all
expenses, fees, charges, taxes, and liabilities incurred or arising in
connection with the Trust or Portfolio (or Class), or in connection with
the management thereof, including, but not limited, to the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser and manager, administrator,
principal underwriter, auditors, counsel, custodian, transfer agent,
Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur.
SECTION 4.6. TRUSTEE COMPENSATION. The Trustees as such shall be entitled
to reasonable compensation from the Trust. They may fix the amount of
their compensation. Nothing herein shall in any way prevent the employment
of any Trustee for advisory, management, administrative, legal,
accounting, investment banking, underwriting, brokerage, or investment
dealer or other services and the payment for the same by the Trust.
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ARTICLE V
INVESTMENT ADVISORY, PRINCIPAL UNDERWRITER AND
TRANSFER AGENT
SECTION 5.1. INVESTMENT ADVISER. The Trustees may in their discretion,
from time to time, enter into an investment advisory or management
contract or contracts with respect to the Trust or any Portfolio whereby
the other party or parties to such contract or contracts shall undertake
to furnish the Trustees with such management, investment advisory,
statistical, and research facilities and services and such other
facilities and services, if any, and all upon such terms and conditions,
as the Trustees may in their discretion determine.
The Trustees may authorize the investment adviser to employ, from time to
time, one or more sub-advisers to perform such of the acts and services of
the investment adviser, and upon such terms and conditions, as may be
agreed upon among the Trustees, the investment adviser, and the
sub-adviser. Any references in this Trust Agreement to the investment
adviser shall be deemed to include such sub-advisers, unless the context
otherwise requires.
SECTION 5.2. OTHER SERVICE CONTRACTS. The Trustees may authorize
the engagement of a principal underwriter, transfer agent,
administrator, custodian, and similar servicers.
SECTION 5.3. PARTIES TO CONTRACT. Any contract of the character described
in Sections 5.1 and 5.2 of this Article V may be entered into with any
corporation, firm, partnership, trust, or association, although one or
more of the Trustees or officers of the Trust may be an officer, director,
trustee, shareholder, or member of such other party to the contract.
SECTION 5.4. MISCELLANEOUS. The fact that (i) any of the Shareholders,
Trustees, or officers of the Trust is a shareholder, director, officer,
partner, trustee, employee, manager, adviser, principal underwriter or
distributor, or agent of or for any Company or of or for any parent or
affiliate of any Company, with which an advisory or administration
contract, or principal underwriter's or distributor's contract, or
transfer, shareholder servicing, custodian, or other agency contract may
have been or may hereafter be made, or that any such Company, or any
parent or affiliate thereof, is a Shareholder or has an interest in the
Trust, or that (ii) any Company with which an advisory or administration
contract or principal underwriter's or distributor's contract, or
transfer, shareholder servicing, or other agency contract may have been or
may hereafter be made also has an advisory or administration contract, or
principal underwriter's or distributor's contract, or transfer,
shareholder servicing, custodial, or other agency contract with one or
more other companies, or has other business or interests shall not affect
the validity of any such contract or disqualify any Shareholder, Trustee,
or officer of the Trust from voting upon or executing the same or create
any liability or accountability to the Trust or its Shareholders.
ARTICLE VI
SHAREHOLDERS' VOTING POWERS AND MEETING
SECTION 6.1. VOTING POWERS. The Shareholders shall have power to vote only
with respect to (1) the election of Trustees as provided in Article III,
Section 3.6, (2) the removal of a Trustee as provided in Article III,
Section 3.3(d), (3) any investment advisory contract to the extent
required by the 1940 Act, (4) termination of the Trust or a Portfolio or
Class thereof as provided in Article IX, Section 9.3, (5) amendment of
this Trust Agreement only as provided in Article IX, Section 9.7, (6) the
sale of all or substantially all the assets of the Trust or of any
Portfolio or Class, unless the primary purpose of such sale is to change
the Trust's domicile or form of organization or form of business trust;
(7) the merger or consolidation of the Trust or any Portfolio or Class
with and into another Company, unless (A) the primary purpose of such
merger or consolidation is to change the Trust's domicile or form of
organization or form of business trust, or (B) after giving effect to such
merger or consolidation, based on the number of Shares outstanding as of a
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date selected by the Trustees, the Shareholders of the Trust or such
Portfolio or Class will have a majority of the outstanding shares of the
surviving Company or Portfolio or Class, as the case may be; and (8) such
additional matters relating to the Trust as may be required by law or as
the Trustees may consider desirable.
Until shares are issued, the Trustees may exercise all rights of
Shareholders and may make any action required or permitted by law, this
Trust Agreement or any of the Bylaws of the Trust to be taken by
Shareholders.
On any matter submitted to vote of the Shareholders, all Shares shall be
voted together, except when required by applicable law or when the
Trustees have determined that the matter affects the interests of one or
more Portfolios (or Classes), then only the Shareholders of all such
Portfolios (or Classes) shall be entitled to vote thereon. Each whole
Share shall be entitled to one vote as to any matter on which it is
entitled to vote, and each fractional Share shall be entitled to a
proportionate fractional vote. The vote necessary to approve any such
matter shall be set forth in this Trust Agreement or in the Bylaws.
ARTICLE VII
DISTRIBUTIONS AND REDEMPTIONS
SECTION 7.1. DISTRIBUTIONS. The Trustees may from time to time declare and
pay dividends and make other distributions with respect to any Portfolio,
or Class thereof, which may be from income, capital gains, or capital. The
amount of such dividends or distributions and the payment of them and
whether they are in cash or any other Trust Property shall be wholly in
the discretion of the Trustees. Dividends and other distributions may be
paid pursuant to a standing resolution adopted once or more often as the
Trustees determine. All dividends and other distributions on Shares of a
particular Portfolio or Class shall be distributed pro rata to the
Shareholders of that Portfolio or Class, as the case may be, in proportion
to the number of Shares of that Portfolio or Class they held on the record
date established for such payment, provided that such dividends and other
distributions on Shares of a Class shall appropriately reflect expenses
allocated to that Class. The Trustees may adopt and offer to Shareholders
such dividend reinvestment plans, cash distribution payout plans, or
similar plans as the Trustees deem appropriate.
SECTION 7.2. REDEMPTIONS. Any holder of record of Shares of a particular
Portfolio, or Class thereof, shall have the right to require the Trust to
redeem his Shares, or any portion thereof, subject to such terms and
conditions as are set forth in the Bylaws or are prescribed by the
Trustees.
SECTION 7.3. REDEMPTION OF SHARES BY TRUSTEES. Upon the terms and
conditions set forth in the Bylaws, the Trustees may call for the
redemption of the Shares of any Person or may refuse to transfer or issue
Shares to any Person to the extent that the same is necessary to comply
with applicable law or advisable to further the purposes of which the
Trust is formed. To the extent permitted by law, the Trustees may retain
the proceeds of any redemption of Shares required by them for payment of
amounts due and owing by a Shareholder to the Trust or any Portfolio or
Class.
SECTION 7.4. REDEMPTION OF DE MINIMIS ACCOUNTS. If, at any time, when a
request for transfer or redemption of Shares of any Portfolio is received
by the Trust or its agent, the value of the Shares of such Portfolio in a
Shareholder's account is less than Five Hundred Dollars ($500.00) after
giving effect to such transfer or redemption, the Trust may, at any time
following such transfer or redemption and upon giving thirty (30) days'
notice to the Shareholder, cause the remaining Shares of such Portfolio in
such Shareholder's account to be redeemed at net asset value and in
accordance with such procedures as are set forth in the Bylaws.
SECTION 7.5. SUSPENSION OF RIGHT OF REDEMPTION. Notwithstanding Section 2
of this Article, the Trustees may postpone payment of the redemption price
and suspend the Shareholders' right to require any Portfolio or Class to
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redeem Shares during any period when and to the extent permissible under
the 1940 Act. Any such postponement and suspension shall take effect at
the time the Trustees shall specify, but not later than the close of
business on the business day next following the declaration thereof, and
shall continue until the Trustees declare the end thereof. If the right of
redemption is suspended, a Shareholder may either withdraw his or her
request for redemption or receive payment based on the net asset value per
Share next determined after the suspension terminates.
ARTICLE VIII
LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 8.1. LIMITATION OF LIABILITY. A Trustee, when acting in such
capacity, shall not be personally liable to any person for any act,
omission, or obligation of the Trust or any Trustee; provided, however,
that nothing contained herein or in the Delaware Act shall protect any
Trustee against any liability to the Trust or to Shareholders to which he
would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the
conduct of the office of Trustee hereunder.
SECTION 8.2. INDEMNIFICATION OF COVERED PERSONS. Every Covered
Person shall be indemnified by the Trust to the fullest extent
permitted by the Delaware Act and other applicable law.
SECTION 8.3. INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former shareholder of the Trust shall be held to be personally liable
solely by reason of his being or having been a Shareholder of the Trust or
any Portfolio or Class and not because of his acts or omissions or for
some other reason, the Shareholder or former Shareholder (or his heirs,
executors, administrators, or other legal representatives, or, in the case
of a corporation or other entity, its corporate or general successor)
shall be entitled, out of the assets belonging to the applicable Portfolio
(or Class), to be held harmless from and indemnified against all loss and
expense arising from such liability in accordance with the Bylaws and
applicable law. The Trust, on behalf of the affected Portfolio (or Class),
shall, upon request by the Shareholder, assume the defense of any claim
made against the Shareholder for any act or obligation of that Portfolio
(or Class).
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. TRUST NOT A PARTNERSHIP; TAXATION. It is hereby expressly
declared that a trust and not a partnership is created hereby. No trustee
hereunder shall have any power to bind personally either the Trust's
officers or any Shareholder. All persons extending credit to, contracting
with or having any claim against the Trust or the Trustees shall look only
to the assets of the appropriate Portfolio or Class or, if the Trustees
shall have yet to have established any separate Portfolio or Class, of the
Trust for payment under such credit, contract, or claim; and neither the
Shareholders nor the Trustee, nor any of their agents, whether past,
present, or future, shall be personally liable therefor.
It is intended that the Trust, or each Portfolio if there is more than one
Portfolio, be classified for income tax purposes as an association taxable
as a corporation, and the Trustees shall do all things that they, in their
sole discretion, determine are necessary to achieve that objective,
including (if they so determine) electing such classification on Internal
Revenue Form 8832. Any Trustee is hereby authorized to sign such form on
behalf of the Trust or any Portfolio, and the Trustees may delegate such
authority to any executive officer(s) of any Portfolio's investment
adviser. The Trustees, in their sole discretion and without the vote or
consent of the Shareholders, may amend this Trust Agreement to ensure that
this objective is achieved.
SECTION 9.2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY. The exercise by the trustees of their powers and discretion
hereunder in good faith and with reasonable care under the circumstances
then prevailing shall be binding upon everyone interested. Subject to the
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provisions of Article VIII hereof and to Section 9.1 of this Article IX,
the Trustees shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Trust Agreement, and subject
to the provisions of Article VIII hereof and Section 9.1 of this Article
IX, shall be under no liability for any act or omission in accordance with
such advice or for failing to follow such advice. The Trustees shall not
be required to give any bond as such, nor any surety if a bond is
obtained.
SECTION 9.3. TERMINATION OF TRUST OR PORTFOLIO OR CLASS. (a) The Trust or
any Portfolio (or Class) may be terminated by (1) a Majority Shareholder
Vote of the Trust or the affected Portfolio (or Class), respectively, or
(2) if there are fewer than 100 Shareholders of record of the Trust or of
such terminating Portfolio (or Class), the Trustees pursuant to written
notice to the Shareholders of the Trust or the affected Portfolio (or
Class).
(b) On termination of the Trust or any Portfolio (or Class) pursuant
to paragraph (a),
(1) the Trust or that Portfolio (or Class) thereafter shall carry on no
business except for the purpose of winding up its affairs,
(2) the Trustees shall proceed to wind up the affairs of the Trust or that
Portfolio (or Class), and all powers of the Trustees under this Trust
Agreement with respect thereto shall continue until such affairs have been
wound up, including the powers to fulfill or discharge the contracts of
the Trust or that Portfolio (or Class), collect its assets, sell, convey,
assign, exchange, or otherwise dispose of all or any part of its remaining
assets to one or more persons at public or private sale for consideration
that may consist in whole or in part of cash, securities, or other
property of any kind, discharge or pay its liabilities, and do all other
acts appropriate to liquidate its business, and
(3) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities, and refunding
agreements as they deem necessary for their protection, the Trustees shall
distribute the remaining assets ratably among the Shareholders of the
Trust or that Portfolio (or Class); however, the payment to any particular
Class of that Portfolio may be reduced by any fees, expenses, or charges
allocated to that Class.
(c) On completion of distribution of the remaining assets pursuant to
paragraph (b), the Trust or the affected Portfolio (or Class) shall
terminate and the Trustees and the Trust shall be discharged from all
further liabilities and duties hereunder with respect thereto and the
rights and interests of all parties therein shall be canceled and
discharged. On termination of the Trust, following completion of winding
up of its business, the Trustees shall cause a certificate of cancellation
of the Trust's certificate of trust to be filed in accordance with the
Delaware Act, which certificate may be signed by any one Trustee.
SECTION 9.4. SALE OF ASSETS; MERGER AND CONSOLIDATION. Subject to Section
6.1 of this Trust Agreement, the Trustees may cause (i) the Trust or one
or more of its Portfolios (or Classes) to the extent consistent with
applicable law to sell all or substantially all of its assets, or be
merged into or consolidated with another Trust or Company, (ii) the Shares
of the Trust or any Portfolio (or Class) to be converted into beneficial
interests in another business trust (or series thereof) created pursuant
to this Section 9.4 of Article IX, or (iii) the Shares to be exchanged
under or pursuant to any state or federal statute to the extent permitted
by law. In all respects not governed by statute or applicable law, the
Trustees shall have power to prescribe the procedure necessary or
appropriate to accomplish a sale of assets, merger or consolidation
including the power to create one or more separate business trusts to
which all or any part of the assets, liabilities, profits or losses of the
Trust may be transferred and to provide for the conversion of Shares of
the trust or any Portfolio (or Class) into beneficial interests in such
separate business trust or trusts (or series or class thereof).
SECTION 9.5. FILING OF COPIES, REFERENCES, HEADINGS. The original or a
copy of this Trust Agreement supplemental hereto shall be kept at the
office of the Trust where it may be inspected by any Shareholder. In this
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Trust Agreement or in any such amendment or supplemental Trust Agreement,
references to this Trust Agreement, and all expressions like "herein,"
"hereof," and "hereunder," shall be deemed to refer to this Trust
Agreement as amended or affected by any such supplemental Trust Agreement.
All expressions like "his," "he," and "him," shall be deemed to include
the feminine and neuter, as well as masculine, genders. Headings are
placed herein for convenience of reference only and in case of any
conflict, the text of this Trust Agreement, rather than the headings,
shall control. This Trust Agreement may be executed in any number of
counterparts each of which shall be deemed an original.
SECTION 9.6. GOVERNING LAW. The Trust and this Trust Agreement, and the
rights, obligations and remedies of the Trustees and Shareholders
hereunder, are to be governed by and construed and administered according
to the Delaware Act and the other laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees,
the Shareholders or this Trust Agreement (a) the provisions of Section
3540 of Title 12 of the Delaware Code or (b) any provisions of the laws
(statutory or common) of the State of Delaware (other than the Delaware
Act) pertaining to trusts which relate to or regulate (i) the filing with
any court or governmental body or agency of trustee accounts or schedules
of trustee fees and charges, (ii) affirmative requirements to post bonds
for trustees, officers, agents, or employees of a Trust, (iii) the
necessity for obtaining court or other governmental approval concerning
the acquisition, holding, or disposition of real or personal property,
(iv) fees or other sums payable to trustees, officers, agents, or
employees of a trust, (v) the allocation of receipts and expenditures to
income or principal, (vi) restrictions or limitations on the permissible
nature, amount, or concentration of trust investments or requirements
relating to the titling, storage, or other manner of holding of trust
assets, or (vii) the establishment of fiduciary or other standards or
responsibilities or limitations on the indemnification, acts or powers of
trustees or other Persons, which are inconsistent with the limitations of
liabilities or authorities and powers of the Trustees or officers of the
Trust set forth or referenced in this Trust Agreement.
The Trust shall be of the type commonly called a "business trust," and
without limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by trusts
under the Delaware Act, and the absence of a specific reference herein to
any such power, privilege, or action shall not imply that the Trust may
not exercise such power or privilege or take such actions, provided,
however, that the exercise of any such power, privilege, or action shall
not otherwise violate applicable law.
SECTION 9.7. AMENDMENTS. Except as specifically provided herein, the
Trustees may, without any Shareholder vote, amend this Trust Agreement by
making an amendment, a Trust Agreement supplemental hereto, or an amended
and restated trust instrument. Any amendment submitted to Shareholders
that the Trustees determine would affect the Shareholders of only one or
more Portfolios (or Classes thereof) shall be authorized by vote of only
the Shareholders of that Portfolio (or Class), and no vote shall be
required of Shareholders of any Portfolio (or Class) that is not affected.
Notwithstanding anything else herein to the contrary, any amendment to
Article IX that would have the effect of reducing the indemnification
provided thereby to Covered Persons or to Shareholders or former
Shareholders, and any repeal or amendment of this sentence shall each
require the affirmative vote of Shareholders owning at least two-thirds of
the Outstanding Shares entitled to vote thereon. A certification signed by
a majority of the Trustees setting forth an amendment to this Trust
Agreement and reciting that it was duly adopted by the Shareholders or by
the Trustees as aforesaid, or a copy of this Trust Agreement, as amended,
executed by a majority of the Trustees, shall be conclusive evidence of
such amendment when lodged among the records of the Trust.
SECTION 9.8. PROVISIONS IN CONFLICT WITH LAW. The provisions of this Trust
Agreement are severable, and the Trustees shall determine, with the advice
of counsel, that any of such provisions is in conflict with applicable law
the conflicting provision shall be deemed never to have constituted a part
of this Trust Agreement; provided, however, that such determination shall
not affect any of the remaining provisions of this Trust Agreement or
render invalid or improper any action taken or omitted prior to such
determination. If any provision of this Trust Agreement shall be held
invalid or enforceable in any jurisdiction, such invalidity or
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unenforceability shall attach only to such provision in such jurisdiction
and shall not in any manner affect such provisions in any other
jurisdiction or nay other provision of this Trust Agreement in any
jurisdiction.
SECTION 9.9. SHAREHOLDERS' RIGHT TO INSPECT SHAREHOLDER LIST. One or more
persons who together and for at least six months have been Shareholders of
at least five percent (5%) of the outstanding shares of any Class may
present to any officer or resident agent of the Trust a written request
for a list of its Shareholders. Within twenty (20) days after such request
is made, the Trust shall prepare and have available on file at its
principal office a list verified under oath by one of its officers or its
transfer agent or registrar which sets forth the name and address of each
Shareholder and the number of Shares of each Class which the Shareholder
holds. The rights provided for herein shall not extend to any person who
is a beneficial owner but not also a record owner of Shares of the Trust.
IN WITNESS WHEREOF, the undersigned, being all of the initial Trustees of
the Trust, have executed this instrument this _____ day of ______, 1998.
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SCHEDULE A
[Name of Trust] shall be divided into the following Portfolios:
[AIM/GT Global Variable America Fund
AIM/GT Global Variable Europe Fund
AIM/GT Global Variable International Fund
AIM/GT Global Variable New Pacific Fund
AIM/GT Global Money Market Fund]
or
[AIM/GT Global Variable Emerging Markets Fund
AIM/GT Global Variable Global Government Income Fund
AIM/GT Global Variable Growth & Income Fund
AIM/GT Global Variable Infrastructure Fund
AIM/GT Global Variable Latin America Fund
AIM/GT Global Variable Natural Resources Fund
AIM/GT Global Variable Strategic Income Fund
AIM/GT Global Variable Telecommunications Fund
AIM/GT Global Variable U.S. Government Income Fund]
Date: [ ]
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