As filed with the Securities and Exchange Commission on February 26, 1999
File No. 811-7302
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 9 /x/
EMERGING MARKETS DEBT PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
11 Greenway Plaza,
Suite 100
Houston, Texas 77046
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (713) 626-1919
Samuel D. Sirko, Esq.
A I M Advisors, Inc.
11 Greenway Plaza,
Suite 100
Houston, Texas 77046
(Name and Address of Agent for Service)
<PAGE>
EXPLANATORY NOTE
This Amendment to the Registration Statement of Emerging Markets Debt
Portfolio has been filed by the Registrant pursuant to Section 8(b) of the
Investment Company Act of 1940, as amended (the "1940 Act"). However, beneficial
interests in the Registrant have not been registered under the Securities Act of
1933, as amended (the "1933 Act"), since such interests are offered solely in
private placement transactions that do not involve any "public offering" within
the meaning of Section 4(2) of the 1933 Act. Investments in the Registrant may
only be made by investment companies, insurance company separate accounts,
common or commingled trust funds or similar organizations or entities which are
"accredited investors" as defined in Regulation D under the 1933 Act. This
Amendment to the Registration Statement does not constitute an offer to sell, or
the solicitation of an offer to buy, any beneficial interests in the Registrant.
<PAGE>
EMERGING MARKETS DEBT PORTFOLIO
CONTENTS OF REGISTRATION STATEMENT
This registration statement of Emerging Markets Debt Portfolio contains the
following documents:
Facing Sheet
Contents of Registration Statement
Part A
Part B
Part C
Signature Page
Exhibits
<PAGE>
PART A
Responses to Items 1, 2, 3, 5 and 9 have been omitted pursuant to
paragraph B.2(b) of the General Instructions to Form N-1A.
Responses to certain Items required to be included in Part A of this
Registration Statement of Emerging Markets Debt Portfolio (the "Portfolio") are
incorporated herein by reference from Post-Effective Amendment No. 58 to the
Registration Statement of AIM Investment Funds (1940 Act File No. 811-5426), as
filed with the Securities and Exchange Commission ("SEC") on February 22, 1999
("Feeder Registration Statement"). Part A of the Feeder Registration Statement
includes the prospectus of AIM Emerging Markets Debt Fund ("Feeder's Part A").
ITEM 4. INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED
RISKS.
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Information on the Portfolio's investment objectives, principal investment
strategies and the principal risk factors associated with investments in the
Portfolio is incorporated herein by reference from the sections entitled
"Investment Objectives and Strategies" and "Principal Risks of Investing in the
Fund" in the Feeder's Part A. Additional investment techniques, features and
limitations concerning the Portfolio's investment program are described in Part
B of this Registration Statement.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE.
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The Portfolio is managed and administered by A I M Advisors, Inc. ("AIM")
and is sub-advised by INVESCO Asset Management Ltd. (the "Sub-advisor"). AIM and
the Sub-advisor and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-advisor are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
A more complete description of how the business of the Portfolio is
managed is incorporated herein by reference from the section entitled "Fund
Management" in the Feeder's Part A.
Beneficial interests in the Portfolio are offered solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolio may only
be made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or entities which are
"accredited investors" as defined in Regulation D under the 1933 Act. This
Amendment to the Registration Statement does not constitute an offer to sell, or
the solicitation of an offer to buy, any "security" within the meaning of the
1933 Act.
A-1
<PAGE>
Investor inquiries may be directed to the Advisor at the following
address: 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
ITEM 7. SHAREHOLDER INFORMATION.
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An investment in the Portfolio may be made without a sales load at the net
asset value next determined after an order is received in "good order" by the
Portfolio. There is no minimum initial or subsequent investment in the
Portfolio. However, investments must be made in federal funds (i.e., monies
credited to the account of the Portfolio's custodian bank by a Federal Reserve
Bank). Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each day the New York Stock Exchange ("NYSE") is open for trading.
Information on the time and method of valuation of the Portfolio's assets
is incorporated by reference from the section entitled "Shareholder Information
- - Pricing of Shares" in the Feeder's Part A.
The Portfolio reserves the right to cease accepting investments at any
time or to reject any investment order.
An investor in the Portfolio may reduce any portion or all of its
investment at any time at the net asset value next determined after a request in
"good order" is furnished by the investor to the Portfolio. The proceeds of a
reduction will be paid by the Portfolio in federal funds normally on the next
business day after the reduction is effected, but in any event within seven
days. Investments in the Portfolio may not be transferred.
The right of any investor to receive payment with respect to any reduction
may be suspended or the payment of the proceeds therefrom postponed during any
period (1) when the NYSE is closed (other than customary weekend or holiday
closings) or trading on the NYSE is restricted as determined by the SEC, (2)
when an emergency exists, as defined by the SEC, which would prohibit the
Portfolio in disposing of its portfolio securities or in fairly determining the
value of its assets, or (3) as the SEC may otherwise permit.
The Portfolio intends to distribute to its investors the Portfolio's net
investment income monthly and its net realized capital gains, if any, annually
after the end of the Portfolio's fiscal year on October 31.
Under the current method of the Portfolio's operation, it is not subject
to any income tax. However, each investor in the Portfolio is taxable on its
share (as determined in accordance with the governing instruments of the
Portfolio) of the Portfolio's taxable income, gain, loss, deductions and credits
in determining its income tax liability. The determination of such share will be
made in accordance with the Internal Revenue Code of 1986, as amended ("Code")
and regulations promulgated thereunder. It is intended that the Portfolio's
assets, income and distributions will be managed in such a way that an investor
in the Portfolio will be able to satisfy the requirements of Subchapter M of the
Code, assuming that the investor invested all of its assets in the Portfolio.
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ITEM 8. DISTRIBUTION ARRANGEMENTS.
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Not applicable.
A-3
<PAGE>
APPENDIX A
RATINGS OF SECURITIES
A description of corporate bond and commercial paper ratings is
incorporated herein by reference from "Appendix" in the Feeder's Part B.
A-4
<PAGE>
PART B
Part B of this Registration Statement should be read only in conjunction
with Part A. Capitalized terms used in Part B and not otherwise defined have the
meanings given them in Part A of this Registration Statement.
Responses to certain Items required to be included in Part B of this
Registration Statement are incorporated herein by reference from the Feeder
Registration Statement. Part B of the Feeder Registration Statement includes the
joint statement of additional information of the AIM Income Funds ("Feeder's
Part B").
ITEM 10. COVER PAGE AND TABLE OF CONTENTS.
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Cover Page: Not applicable.
Page
History of the Portfolio.............................................B-1
Description of the Portfolio and its Investments and Risks...........B-1
Management of the Portfolio..........................................B-2
Control Persons and Principal Holders of Securities..................B-2
Investment Advisory and Other Services...............................B-3
Brokerage Allocation and Other Practices.............................B-3
Capital Stock and Other Securities...................................B-3
Purchase, Redemption and Pricing of Securities.......................B-5
Taxation of the Portfolio............................................B-6
Underwriters.........................................................B-6
Calculation of Performance Data......................................B-6
Financial Statements.................................................B-6
ITEM 11. HISTORY OF THE PORTFOLIO.
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Emerging Markets Debt Portfolio (the "Portfolio") was organized as a
Delaware business trust on May 7, 1998. On May 29, 1998, the Portfolio acquired
the assets and assumed the liabilities of Global High Income Portfolio, a New
York common law trust. Prior to September 8, 1998, the Portfolio operated under
the name "Global High Income Portfolio."
ITEM 12. DESCRIPTION OF THE PORTFOLIO AND ITS INVESTMENTS AND RISKS.
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The Portfolio is a non-diversified, open-end management investment
company.
Part A contains basic information about the investment objectives,
principal investment strategies and principal risks of the Portfolio. This Part
B supplements the discussion in Part A of the investment objectives, principal
investment strategies and principal risks of the Portfolio.
B-1
<PAGE>
Information on the fundamental investment limitations and the
non-fundamental investment policies and limitations of the Portfolio, the types
of securities bought and investment techniques used by the Portfolio, and
certain risks attendant thereto, as well as other information on the Portfolio's
investment programs, is incorporated by reference from the sections entitled
"Investment Strategies and Risks," "Options, Futures and Currency Strategies,"
"Risk Factors," "Investment Limitations" and "Execution of Portfolio
Transactions" in the Feeder's Part B.
ITEM 13. MANAGEMENT OF THE PORTFOLIO.
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Information about the Trustees and officers of the Portfolio, and their
roles in management of the Portfolio and other AIM Funds, is incorporated herein
by reference from the section entitled "Trustees and Executive Officers" in the
Feeder's Part B.
The Portfolio pays each Trustee who is not a director, officer or employee
of the Sub-advisor or any affiliated company an annual fee of $500 a year, plus
$150 for each meeting of the Board attended, and reimbursed travel and other
expenses incurred in connection with attending Board meetings. Other Trustees
and officers receive no compensation or expense reimbursement from the
Portfolio. For the fiscal year ended October 31, 1998, the Portfolio paid Mr.
Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley $1,725, $1,700, $1,850 and
$1,850, respectively. For the year ended October 31, 1998, Mr. Anderson, Mr.
Bayley, Mr. Patterson and Miss Quigley, who are not directors, officers or
employees of the Sub-advisor or any affiliated company, received total
compensation of $97,600, $97,500, $105,450 and $106,350, respectively, from the
investment companies which are managed or administered by AIM and which may be
sub-advised and sub-administered by the Sub-advisor or sub-advised by IAML for
which he or she serves as a Director or Trustee. Fees and expenses disbursed to
the Trustees contained no accrued or payable pension or retirement benefits.
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
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As of the date of this filing, Emerging Markets Debt Fund owned 99.9% of
the value of the outstanding interests in the Portfolio. Because Emerging
Markets Debt Fund controls the Portfolio, Emerging Markets Debt Fund may take
actions affecting its Portfolio without the approval of any other investor.
Emerging Markets Debt Fund has informed the Portfolio that whenever it is
requested to vote on any proposal of the Portfolio, it will hold a meeting of
shareholders and will cast its vote as instructed by its shareholders. It is
anticipated that other investors in the Portfolio will follow the same or a
similar practice.
The address of Emerging Markets Debt Fund is 11 Greenway Plaza, Suite 100,
Houston, Texas 77046.
As of February 25, 1999, the officers and Trustees and their families as a
group owned in the aggregate beneficially or of record less than 1% of the
outstanding shares of the Portfolio.
B-2
<PAGE>
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES.
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Information on the investment management and other services provided for
or on behalf of the Portfolio is incorporated herein by reference from the
sections entitled "Management" and "Miscellaneous Information" in the Feeder's
Part B. The following list identifies the specific sections in the Feeder's Part
B under which the information required by Item 15 of Form N-1A may be found;
each section is incorporated herein by reference.
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Item 15(a) Management; Miscellaneous Information
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Item 15(b) Not Applicable
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Item 15(c) Not Applicable
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Item 15(d) Management
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Item 15(e) Not Applicable
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Item 15(f) Not Applicable
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Item 15(g) Not Applicable
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Item 15(h) Miscellaneous Information
===============================================================================
For the fiscal years ended October 31, 1996 and 1997, the Portfolio paid
investment management and administration fees of $3,014,924 and $2,971,167,
respectively, to INVESCO (NY), Inc. For the period November 1, 1997 to May 29,
1998, the Portfolio paid investment management and administration fees of
$976,376 to INVESCO (NY), Inc. For the period May 30, 1998 to October 31, 1998,
the Portfolio paid aggregate investment management and administration fees of
$1,265,573 to AIM and/or INVESCO (NY), Inc.
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES.
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A description of the Portfolio's brokerage allocation and other practices
is incorporated herein by reference from the section entitled "Execution of
Portfolio Transactions" in the Feeder's Part B.
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES.
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Under the Portfolio's Agreement and Declaration of Trust, the Trustees are
authorized to issue beneficial interests in the Portfolio. Investors are
entitled to participate PRO RATA in distributions of taxable income, loss, gain
and credit of the Portfolio. Upon liquidation or dissolution of the Portfolio,
investors are entitled to share PRO RATA in the Portfolio's net assets available
for distribution to its investors. Investments in the Portfolio may not be
transferred, but an investor may withdraw all or any portion of its investment
B-3
<PAGE>
at any time at net asset value. Investments in the Portfolio have no preference,
preemptive, conversion or similar rights and are fully paid and nonassessable,
except as set forth below.
Under Delaware law, AIM Emerging Markets Debt Fund ("Emerging Markets Debt
Fund") and other entities that invest in the Portfolio enjoy the same
limitations of liability extended to shareholders of private, for-profit
corporations. There is a remote possibility, however, that under certain
circumstances an investor in the Portfolio may be held liable for the
Portfolio's obligations. However, the Portfolio's Agreement and Declaration of
Trust disclaims shareholder liability for acts or obligations of the Portfolio
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Portfolio or a trustee.
The Agreement and Declaration of Trust also provides for indemnification from
the Portfolio property for all losses and expenses of any shareholder held
personally liable for the Portfolio's obligations. Thus, the risk of an investor
incurring financial loss on account of such liability is limited to
circumstances in which the Portfolio itself would be unable to meet its
obligations and where the other party was held not to be bound by the
disclaimer. The Agreement and Declaration of Trust also provides that the
Portfolio shall maintain appropriate insurance (for example, fidelity bonding
and errors and omissions insurance) for the protection of the Portfolio, its
investors, Trustees, officers, employees and agents covering possible tort and
other liabilities. Thus, the risk of an investor incurring financial loss on
account of investor liability is limited to circumstances in which both
inadequate insurance existed and the Portfolio itself was unable to meet its
obligations.
Each investor is entitled to a vote in proportion to the amount of its
investment in the Portfolio. Investors in the Portfolio do not have cumulative
voting rights, and investors holding more than 50% of the aggregate beneficial
interest in the Portfolio may elect all of the Trustees of the Portfolio if they
choose to do so and in such event the other investors in the Portfolio would not
be able to elect any Trustee. Investors also have under certain circumstances
the right to remove one or more Trustees without a meeting. The Portfolio is not
required to hold annual meetings of investors but the Portfolio will hold
special meetings of investors when in the judgment of the Portfolio's Trustees
it is necessary or desirable to submit matters for an investor vote. No
amendment required to be approved by investors may be made to the Portfolio's
Agreement and Declaration of Trust without the affirmative majority vote of
investors (with the vote of each being in proportion to the amount of their
investment).
As of the date of this Registration Statement, Emerging Markets Debt Fund
owns a majority interest in the Portfolio. However, the Emerging Markets Debt
Fund has undertaken that, with respect to matters on which the Portfolio seeks a
vote of its interestholders, the Emerging Markets Debt Fund will seek a vote of
its shareholders and will vote its interest in the Portfolio in accordance with
their instructions.
The Portfolio may be terminated by (1) "the vote of a majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Portfolio, or
(2) if there are fewer than 100 record owners of a beneficial interest in the
Portfolio, the Trustees pursuant to written notice to the record owners of the
Portfolio. The Trustees may cause (i) the Portfolio to the extent consistent
with applicable law to sell all or substantially all of its assets, or be merged
into or consolidated with another business trust or company, (ii) the beneficial
B-4
<PAGE>
interests of a record owner in the Portfolio to be converted into beneficial
interests in another business trust (or series thereof) created pursuant to
Section 10.4 of Article X of the Portfolio's Agreement and Declaration of Trust,
or (iii) the beneficial interests of a record owner of the Portfolio 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 interests in the Trust or any Portfolio into
beneficial interests in such separate business trust or trusts (or series or
class thereof).
The Agreement and Declaration of Trust provides that obligations of the
Portfolio are not binding upon the Trustees individually but only upon the
property of the Portfolio and that the Trustees will not be liable for any
action or failure to act, but nothing in the Agreement and Declaration of Trust
protects a Trustee against any liability 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 his office. The Agreement and
Declaration of Trust provides that the trustees and officers will be indemnified
by the Portfolio against liabilities and expenses incurred in connection with
litigation in which they may be involved because of their offices with the
Portfolio, unless, as to liability to the Portfolio or its investors, it is
finally adjudicated that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in their offices, or
unless with respect to any other matter it is finally adjudicated that they did
not act in good faith in the reasonable belief that their actions were in the
best interests of the Portfolio. In the case of settlement, such indemnification
will not be provided unless it has been determined by a court or other body
approving the settlement or other disposition, or by a reasonable determination,
based upon a review of readily available facts, by vote of a majority of
disinterested Trustees or in a written opinion of independent counsel, that such
officers or Trustees have not engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.
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Beneficial interests in the Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended.
Information on the method followed by the Portfolio in determining its net
asset value and the timing of such determination is incorporated by reference
from the section entitled "Net Asset Value Determination" in the Feeder's Part
B. See also Item 7 in Part A.
The Portfolio reserves the right, if conditions exist which make cash
payments undesirable, to honor any request for redemption or repurchase order by
making payment in whole or in part in readily marketable securities chosen by
the Portfolio and valued as they are for purposes of computing the Portfolio's
net asset value (a redemption in kind). If payment is made in securities, an
investor may incur transaction expenses in converting these securities into
cash. The Portfolio has elected, however, to be governed by Rule 18f-1 under the
1940 Act as a result of which the Portfolio is obligated to redeem beneficial
interests with respect to any one investor during any 90 day period, solely in
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<PAGE>
cash up to the lesser of $250,000 or 1% of the net asset value of the Portfolio
at the beginning of the period.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each day that the NYSE is open for trading. At the close of
trading, on each such day, the value of each investor's interest in the
Portfolio will be determined by multiplying the net asset value of the Portfolio
by the percentage representing that investor's share of the aggregate beneficial
interests in the Portfolio. Any additions or reductions which are to be effected
on that day will then be effected. The investor's percentage of the aggregate
beneficial interests in the Portfolio will then be recomputed as the percentage
equal to the fraction (i) the numerator of which is the value of such investor's
investment in the Portfolio as of the close of trading on such day plus or
minus, as the case may be, the amount of net additions to or reductions in the
investor's investment in the Portfolio effected on such day, and (ii) the
denominator of which is the aggregate net asset value of the Portfolio as of the
close of trading on such day plus or minus, as the case may be, the amount of
the net additions to or reductions in the aggregate investments in the Portfolio
by all investors in the Portfolio. The percentage so determined will then be
applied to determine the value of the investor's interest in the Portfolio as of
the close of trading on the following day the NYSE is open for trading.
ITEM 19. TAXATION OF THE PORTFOLIO.
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Information on the taxation of the Portfolio is incorporated by reference
herein from the section entitled "Dividends, Distributions and Tax Matters" in
the Feeder's Part B.
ITEM 20. UNDERWRITERS.
- -----------------------
Not applicable.
ITEM 21. CALCULATION OF PERFORMANCE DATA.
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Not applicable.
ITEM 22. FINANCIAL STATEMENTS.
- ------------------------------
Audited financial statements for the Portfolio for the fiscal year ended
October 31, 1998 are included herein, in reliance on the report of
PricewaterhouseCoopers LLP, independent auditors, given on the authority of said
firm as experts in auditing and accounting.
B-6
<PAGE>
PART C: OTHER INFORMATION
EMERGING MARKETS DEBT PORTFOLIO
ITEM 23. EXHIBITS.
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Exhibit
Number Description
- ------- -----------
(a) (1) - Agreement and Declaration of Trust of Registrant, dated May 7, 1998,
is filed herewith electronically.
(2) - Certificate of Amendment to Certificate of Trust of Registrant is
filed herewith electronically.
(b) (1) - By-Laws of Registrant are filed herewith electronically.
(2) - Amended and Restated By-Laws of Registrant are filed herewith
electronically.
(c) - Provisions of instruments defining the rights of holders of
Registrant's securities are contained in the Agreement and
Declaration of Trust, as amended, Articles II, VI, VII, VIII and IX
and By-Laws Articles IV, V, VI, VII and VIII, which are included as
part of Exhibits (a)(1) and (b) of this Registration Statement.
(d) (1) - Investment Management and Administration Contract between Registrant
and A I M Advisors, Inc. is filed herewith electronically.
(2) - Form of Sub-Advisory Contract between A I M Advisors, Inc. and
INVESCO Asset Management Ltd. with respect to Registrant is filed
herewith electronically.
(e) - Underwriting Contracts - None.
(f) - Bonus or Profit Sharing Contracts - None.
(g) - Amendment to Custodian Contract, dated January 26, 1999, is filed
herewith electronically.
(h) - Other Material Contracts - None.
(i) - Legal Opinion - None.
(j) - Consent of PricewaterhouseCoopers LLP, independent auditors, is
filed herewith electronically.
C-1
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(k) - Omitted Financial Statements - None.
(l) - Initial Capitalization Agreements - None.
(m) - Rule 12b-1 Plan - None.
(n) - Financial Data Schedule is filed herewith electronically.
(o) - Rule 18f-3 Plan - None.
Other Exhibits:
(1) Power of Attorney for Carol F. Relihan, dated February 25, 1999, is
filed herewith electronically.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.
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PROVIDE A LIST OR DIAGRAM OF ALL PERSONS DIRECTLY OR INDIRECTLY CONTROLLED
BY OR UNDER COMMON CONTROL WITH THE FUND. FOR ANY PERSON CONTROLLED BY ANOTHER
PERSON, DISCLOSE THE PERCENTAGE OF VOTING SECURITIES OWNED BY THE IMMEDIATELY
CONTROLLING PERSON OR OTHER BASIS OF THAT PERSON'S CONTROL. FOR EACH COMPANY,
ALSO PROVIDE THE STATE OR OTHER SOVEREIGN POWER UNDER THE LAWS OF WHICH THE
COMPANY IS ORGANIZED.
None.
ITEM 25. INDEMNIFICATION.
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STATE THE GENERAL EFFECT OF ANY CONTRACT, ARRANGEMENTS OR STATUTE UNDER
WHICH ANY DIRECTOR, OFFICER, UNDERWRITER OR AFFILIATED PERSON OF THE FUND IS
INSURED OR INDEMNIFIED AGAINST ANY LIABILITY INCURRED IN THEIR OFFICIAL
CAPACITY, OTHER THAN INSURANCE PROVIDED BY ANY DIRECTOR, OFFICER, AFFILIATED
PERSON, OR UNDERWRITER FOR THEIR OWN PROTECTION.
Article VIII of the Registrant's Agreement and Declaration of Trust, as
amended, provides for indemnification of certain persons acting on behalf
of the Registrant. Article VIII, Section 8.1 provides that a Trustee, when
acting in such capacity, shall not be personally liable to any person for
any act, omission, or obligation of the Registrant or any Trustee;
provided, however, that nothing contained in the Registrant's Agreement and
Declaration of Trust or in the Delaware Business Trust Act shall protect
any Trustee against any liability to the Registrant or the 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.
Article VIII, Section 3 of the Registrant's By-Laws also provides that
every person who is, or has been, a Trustee or Officer of the Registrant
to the fullest extent permitted by the Delaware Business Trust Act, the
Registrant's By-Laws and other applicable law.
C-2
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Section 9 of the Investment Management and Administration Contract between
the Registrant and AIM provides that AIM shall not be liable, and each
series of the Registrant 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 any series of the
Registrant or the Registrant in connection with the matters to which the
Investment Management and Administration Contract relates except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
part of AIM in the performance by AIM of its duties or from reckless
disregard by AIM of its obligations and duties under the Investment
Management and Administration Contract.
Section 8 of the Sub-Advisory and Sub-Administration Contract between the
Registrant and the Sub-advisor provides that the Sub-advisor shall not be
liable, and each series of the Registrant shall indemnify the Sub-advisor
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 any series of the Registrant or the Registrant in connection with the
matters to which the Sub-Advisory and Sub-Administration Contract relates
except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Sub-advisor in the performance by the
Sub-advisor of its duties or from reckless disregard by the Sub-advisor of
its obligations and duties under the Sub-Advisory and Sub-Administration
Contract.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISOR.
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DESCRIBE ANY OTHER BUSINESS, PROFESSION, VOCATION OR EMPLOYMENT OF A
SUBSTANTIAL NATURE THAT EACH INVESTMENT ADVISOR, AND EACH DIRECTOR, OFFICER OR
PARTNER OF THE ADVISOR, IS OR HAS BEEN ENGAGED WITHIN THE LAST TWO FISCAL YEARS
FOR HIS OR HER OWN ACCOUNT OR IN THE CAPACITY OF DIRECTOR, OFFICER, EMPLOYEE,
PARTNER, OR TRUSTEE.
See the material under the headings "Trustees and Executive Officers" and
"Management" included in Part B (Statement of Additional Information) of
this Amendment. Information as to the Directors and Officers of A I M
Advisors, Inc. and INVESCO (NY), Inc. is included in Schedule A and
Schedule D of Part I of each entity's Form ADV (File No. 801-12313 and File
No. 801-10254, respectively), filed with the Securities and Exchange
Commission, which are incorporated herein by reference thereto.
ITEM 27. PRINCIPAL UNDERWRITERS.
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None.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
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STATE THE NAME AND ADDRESS OF EACH PERSON MAINTAINING PHYSICAL POSSESSIONS
OF EACH ACCOUNT, BOOK, OR OTHER DOCUMENT REQUIRED TO BE MAINTAINED BY SECTION
31(A) [15 U.S.C. 80A-30(A)] AND THE RULES UNDER THAT SECTION.
Accounts, books and other records required by Rules 31a-1 and 31a-2 under
the Investment Company Act of 1940, as amended, are maintained and held in
the offices of the Registrant and its advisor A I M Advisors, Inc., 11
Greenway Plaza, Suite 100, Houston, Texas 77046, and its custodian, State
C-3
<PAGE>
Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110.
ITEM 29. MANAGEMENT SERVICES.
- -----------------------------
PROVIDE A SUMMARY OF THE SUBSTANTIVE PROVISIONS OF ANY MANAGEMENT-RELATED
SERVICE CONTRACT NOT DISCUSSED IN PART A OR B, DISCLOSING THE PARTIES TO THE
CONTRACT AND THE TOTAL AMOUNT PAID AND BY WHOM FOR THE FUND'S LAST THREE FISCAL
YEARS.
None.
ITEM 30. UNDERTAKINGS.
- ----------------------
None.
C-4
<PAGE>
SIGNATURES
Pursuant to the Investment Company Act of 1940, the Emerging Markets Debt
Portfolio has duly caused this Registration Statement to be signed on its behalf
by the undersigned, duly authorized, in the City of Houston, Texas on the 26th
day of February , 1999.
EMERGING MARKETS DEBT PORTFOLIO
By: *
-----------------------------------
Robert H. Graham, President
SIGNATURES TITLE DATE
---------- ----- ----
* Chairman, Trustee &
----------------------- President
(Robert H. Graham) (Principal Executive Officer)
* Trustee
----------------------
(C. Derek Anderson)
* Trustee
----------------------
(Frank S. Bayley)
* Trustee
----------------------
(Arthur C. Patterson)
* Trustee
----------------------
(Ruth H. Quigley)
Vice President &
* Principal Financial
---------------------- and Accounting Officer
(Kenneth W. Chancey)
* By: /s/ CAROL F. RELIHAN
----------------------
Carol F. Relihan
Attorney-In-Fact
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints Carol F. Relihan, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all his capacities as a trustee or officer of Emerging
Markets Debt Portfolio, a Delaware business trust, to sign on his or its behalf
any and all Registration Statements of Emerging Markets Debt Portfolio
(including any amendments to Registration Statements) under the Securities Act
of 1933, the Investment Company Act of 1940 and any amendments and supplements
thereto and applications thereunder, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission and any other applicable regulatory authority, granting unto
said attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, and fully as to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, may lawfully do or cause to be done by virtue hereof.
DATED this 25th day of February, 1999.
/s/ Robert H. Graham
------------------------
Robert H. Graham
/s/ C. Derek Anderson
------------------------
C. Derek Anderson
/s/ Frank S. Bayley
------------------------
Frank S. Bayley
/s/ Arthur C. Patterson
------------------------
Arthur C. Patterson
/s/ Ruth H. Quigley
------------------------
Ruth H. Quigley
<PAGE>
INDEX TO EXHIBITS
EMERGING MARKETS DEBT PORTFOLIO
Exhibit Number
- --------------
(a)(1) Agreement and Declaration of Trust of Registrant
(a)(2) Certificate of Amendment to Certificate of Trust of Registrant
(b)(1) By-Laws of Registrant
(b)(2) Amended and Restated By-Laws of Registrant
(d)(1) Investment Management and Administration Contract
(d)(2) Form of Sub-Advisory and Sub-Administration Contract between A I
M Advisors, Inc. and INVESCO Asset Management Ltd.
(g) Amendment to Custodian Contract
(j) Consent of PricewaterhouseCoopers LLP, independent auditors
(n) Financial Data Schedule
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders of AIM Emerging Markets Debt Fund (formerly GT Global High
Income Fund) and Board of Trustees of AIM Investment Funds (formerly G.T.
Investment Funds, Inc.):
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the AIM Emerging Markets Debt Fund
- -Consolidated at October 31, 1998, and the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at October
31, 1998 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
BOSTON, MASSACHUSETTS
DECEMBER 18, 1998
7
<PAGE>
PORTFOLIO OF INVESTMENTS
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ----------------------------------------------------------- -------- ------------- ------------ -------------
Government & Government Agency Obligations (75.6%)
Algeria (4.3%)
Algeria Tranche 1 Loan Assignment, 6.625% due
9/4/06+ .............................................. USD 15,200,000 $ 7,752,000 4.3
Argentina (18.4%)
Republic of Argentina:
I.O. Strip, 12.11% due 4/10/05 ...................... USD 10,390,000 9,142,145 5.1
Discount Bond, 6.625% due 3/31/23+ .................. USD 12,518,000 8,527,888 4.7
Par Bond Series L, 5.75% (6% at 3/31/99) due
3/31/23++ .......................................... USD 11,540,000 8,020,300 4.4
Global Bond, 9.75% due 9/19/27 ...................... USD 4,573,000 3,970,507 2.2
7.297% due 7/8/05 ................................... ITL 7,780,000,000 3,526,648 2.0
Brazil (4.7%)
Brazil Floating Rate Discount Note, 6.125% due
4/15/24+ ............................................. USD 14,398,000 8,557,811 4.7
Bulgaria (7.2%)
Republic of Bulgaria:
Discount Bond Series A, 6.6875% due 7/28/24 -
Euro+ .............................................. USD 11,120,000 7,811,800 4.3
Front Loaded Interest Reduction Bond Series A, 2.5%
(2.75% at 7/99) due 7/28/12++ ...................... USD 9,427,000 5,208,418 2.9
Colombia (4.3%)
Republic of Colombia:
8.625% due 4/1/08 ................................... USD 6,498,000 5,100,930 2.8
7.27% due 6/15/03 - 144A{.} ......................... USD 3,300,000 2,689,500 1.5
Ivory Coast (4.8%)
Ivory Coast:
Past Due Interest Bond, 1.9% (2.9% at 3/31/09) due
3/29/18++ .......................................... FRF 153,852,500 6,856,419 3.8
Past due Interest Bond, 2% (3% at 3/31/09) due
3/29/18++ .......................................... USD 5,875,625 1,718,620 1.0
Jamaica (3.8%)
Government of Jamaica, 10.875% due 6/10/05 -
144A{.} .............................................. USD 9,054,000 6,790,500 3.8
Korea (0.6%)
Korea Republic Restructured Debt, 8.281% due
4/8/00+ .............................................. USD 1,230,000 1,143,900 0.6
Mexico (13.5%)
United Mexican States:
9.875% due 1/15/07 .................................. USD 7,390,000 7,029,738 3.9
Discount Bond Series A, 6.1156% due 12/31/19+ +/+ ... USD 8,295,000 6,475,284 3.6
6.63% due 12/31/19 .................................. FRF 39,000,000 5,468,652 3.0
Global Bond, 11.375% due 9/15/16 .................... USD 2,688,000 2,684,640 1.5
Discount Bond Series D, 6.6016% due 12/31/19+ ....... USD 2,210,000 1,725,181 1.0
Discount Bond Series B, 6.47656% due 12/31/19+
+/+ ................................................ USD 1,265,000 987,491 0.5
Panama (3.2%)
Republic of Panama:
Interest Reduction Bond, 4.00% (4.25% at 7/99) due
7/17/14++ .......................................... USD 4,350,000 3,183,656 1.8
8.875% due 9/30/27 .................................. USD 2,689,000 2,480,603 1.4
Peru (4.6%)
Republic of Peru, Past Due Interest Bond, 4% (4.5% at
3/8/99) due 3/7/17++ ................................. USD 14,305,000 8,225,375 4.6
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ----------------------------------------------------------- -------- ------------- ------------ -------------
Government & Government Agency Obligations (Continued)
Poland (4.6%)
Poland:
3% (3.5% at 10/28/99) due 10/27/24 - Euro++ ......... USD 8,210,000 $ 5,459,650 3.0
Past Due Interest, 5% (6% at 10/28/99) 10/27/14 -
Euro++ ............................................. USD 3,138,000 2,853,619 1.6
Russia (1.6%)
Bank for Foreign Economic Affairs (Venesheconombank)
Principal Loans, 6.625% due 12/15/20+ ................ USD 37,242,372 2,956,113 1.6
------------
Total Government & Government Agency Obligations (cost
$164,789,707) ............................................ 136,347,388
------------
Corporate Bonds (20.9%)
Argentina (1.5%)
Disco S.A., 9.875% due 5/15/08 - 144A{.} .............. USD 1,960,000 1,367,100 0.8
Mastellone Hermanos S.A., 11.75% due 4/1/08 -
144A{.} .............................................. USD 1,943,000 1,185,230 0.7
Brazil (6.1%)
Globo Comunicacoes Participacoes, 10.625% due 5/12/08 -
144A{.} .............................................. USD 5,995,000 3,432,138 1.9
Banco Hipotecario Espana, 10% due 4/17/03 - 144A{.} ... USD 3,679,000 3,237,520 1.8
Banco Nacional de Desenvolvimento Economico e Social
(BNDES):
10.8% due 6/16/08 -144A{.} .......................... USD 1,694,000 1,185,800 0.7
10.8% due 6/16/08 - Reg S{c} ........................ USD 1,375,000 962,500 0.5
RBS Participacoes S.A., 11% due 4/1/07 - 144A{.} ...... USD 3,708,000 1,668,600 0.9
CSN Iron S.A., 9.125% due 6/1/07 ...................... USD 985,000 558,988 0.3
Colombia (0.9%)
Financiera Energia Nacional, 9.375% due 6/15/06 - Reg
S{c} ................................................. USD 2,200,000 1,613,260 0.9
Jamaica (1.6%)
Mechala Group Jamaica:
12.75% due 12/30/99 - Series B ...................... USD 2,846,000 1,992,200 1.1
12.75% due 12/30/99 - Reg S{c} ...................... USD 1,288,000 901,600 0.5
Korea (0.9%)
Pohang Iron & Steel, 2% due 10/9/00 ................... JPY 224,000,000 1,665,177 0.9
Luxembourg (1.7%)
Cellco Finance N.V., 15% due 8/1/05 - Reg S{c} ........ USD 3,790,000 3,069,900 1.7
Mexico (6.4%)
Petroleos Mexicanos (PEMEX), 9.25% due 3/30/18 -
144A{.} .............................................. USD 9,257,000 7,544,455 4.2
Dine, S.A. de C.V., 8.75% due 10/15/07 - 144A{.} ...... USD 2,060,000 1,627,400 0.9
Cemex Valenciana, 9.66% due 11/29/49 - 144A{.} ........ USD 1,430,000 1,201,200 0.7
Banco Nacional Comercio Exte., 8% due 7/18/02 - Reg
S{c} ................................................. USD 1,180,000 1,076,750 0.6
Russia (0.9%)
Lukinter Finance BV Convertible, 3.5% due 5/6/02 -
144A{.} .............................................. USD 2,283,000 833,295 0.5
Mosenergo Finance BV, 8.375% due 10/9/02 - 144A{.} .... USD 4,200,000 735,000 0.4
Singapore (0.9%)
Krung Thai Bank, 6.23% due 9/30/04 .................... USD 2,500,000 1,650,000 0.9
------------
Total Corporate Bonds (cost $53,441,317) .................. 37,508,113
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
PORTFOLIO OF INVESTMENTS (cont'd)
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PRINCIPAL VALUE % OF NET
FIXED INCOME INVESTMENTS CURRENCY AMOUNT (NOTE 1) ASSETS
- ----------------------------------------------------------- -------- ------------- ------------ -------------
Structured Notes (2.0%)
Korea (2.0%)
Fixed Rate Trust Certificate 13.55% due 2/15/02[::]
(Issued by a newly created Delaware Business Trust,
collateralized by triple A paper. This trust
certificate has a credit risk component linked to
the value of a referenced security: Korean
Development Bank 1.875% 2002.)
(cost $5,050,000) ................................. USD 5,050,000 $ 3,694,075 2.0
------------ -----
TOTAL FIXED INCOME INVESTMENTS (cost $223,281,024) ........ 177,549,576 98.5
------------ -----
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ----------------------------------------------------------- ------------ -------------
Dated October 30, 1998, with State Street Bank & Trust
Co., due November 2, 1998, for an effective yield 5.30%
collateralized by $5,000 U.S. Treasury Bonds, 8.75% due
05/15/17 (market value of collateral is $7,211 including
accrued interest). (cost $7,000) ...................... 7,000 --
------------ -----
TOTAL INVESTMENTS (cost $223,288,024) * .................. 177,556,576 98.5
Other Assets and Liabilities .............................. 2,766,571 1.5
------------ -----
NET ASSETS ................................................ $180,323,147 100.0
------------ -----
------------ -----
</TABLE>
- --------------
[::] Certain events may cause the contract to terminate prior to date
shown.
{.} Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers.
{c} Security issued under Regulation S. Rule 144A and additional
restrictions may apply in the resale of such securities.
+ The coupon rate shown on floating rate note represents the rate at
period end.
++ The coupon rate shown on step-up coupon bond represents the rate at
period end.
+/+ Issued with detachable warrants or value recovery rights. The
current market value of each warrant or right is zero.
* For Federal income tax purposes, cost is $229,575,059 and
appreciation (depreciation) is as follows:
Unrealized appreciation: $ 2,192,621
Unrealized depreciation: (54,211,104)
-------------
Net unrealized depreciation: $ (52,018,483)
-------------
-------------
10
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING
OCTOBER 31, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
UNREALIZED
MARKET VALUE CONTRACT DELIVERY APPRECIATION
CONTRACTS TO SELL: (U.S. DOLLARS) PRICE DATE (DEPRECIATION)
- ---------------------------------------- -------------- ------------ -------- --------------
French Francs........................... 6,685,024 5.45470 03/18/99 $ 79,784
Japanese Yen............................ 1,596,301 118.80000 11/27/98 (38,220)
-------------- --------------
Total Contracts to Sell (Receivable
amount $8,322,889)................... 8,281,325 41,564
-------------- --------------
THE VALUE OF CONTRACTS TO SELL AS
PERCENTAGE OF NET ASSETS IS 4.59%.
Total Open Forward Foreign Currency
Contracts............................ $ 41,564
--------------
--------------
</TABLE>
- ----------------
See Note 1 of Notes to the Financial Statements.
The accompanying notes are an integral part of the financial statements.
10A
<PAGE>
STATEMENT OF ASSETS
AND LIABILITIES
October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investments in securities, at value (cost $223,288,024) (Note 1)............................ $177,556,576
U.S. currency.................................................................... $ 90
Foreign currencies (cost $655,357)............................................... $ 647,780 647,870
---------
Receivable for securities sold.............................................................. 11,083,854
Interest receivable......................................................................... 5,228,106
Receivable for Fund shares sold............................................................. 1,421,034
Receivable for open forward foreign currency contracts (Note 1)............................. 41,564
-----------
Total assets.............................................................................. 195,979,004
-----------
Liabilities:
Payable for securities purchased............................................................ 11,070,590
Payable for loan outstanding (Note 1)....................................................... 2,000,000
Payable for Fund shares repurchased......................................................... 927,125
Distribution payable........................................................................ 863,058
Payable for service and distribution expenses (Note 2)...................................... 339,869
Payable for investment management and administration fees (Note 2).......................... 142,609
Payable for transfer agent fees (Note 2).................................................... 100,252
Payable for printing and postage expenses................................................... 83,667
Payable for professional fees............................................................... 51,163
Payable for custodian fees.................................................................. 30,000
Payable for registration and filing fees.................................................... 12,051
Payable for Trustees' fees and expenses (Note 2)............................................ 11,850
Payable for fund accounting fees (Note 2)................................................... 4,476
Other accrued expenses...................................................................... 19,047
-----------
Total liabilities......................................................................... 15,655,757
Minority interest (Notes 1 & 2)............................................................. 100
-----------
Net assets.................................................................................... $180,323,147
-----------
-----------
Class A:
Net asset value and redemption price per share $(69,321,193 DIVIDED BY 8,818,139 shares
outstanding)............................................................................... $ 7.86
-----------
-----------
Maximum offering price per share (100/95.25 of $7.86) *..................................... $ 8.25
-----------
-----------
Class B:+
Net asset value and offering price per share $(109,406,337 DIVIDED BY 13,918,010 shares
outstanding)................................................................................. $ 7.86
-----------
-----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share $(1,595,617
DIVIDED BY 203,898 shares outstanding)..................................................... $ 7.83
-----------
-----------
Net assets consist of:
Paid in capital (Note 4).................................................................... $285,771,413
Accumulated net investment loss............................................................. (41,564)
Accumulated net realized loss on investments and foreign currency transactions.............. (59,706,950)
Net unrealized appreciation on translation of assets and liabilities in foreign
currencies................................................................................. 31,696
Net unrealized depreciation of investments.................................................. (45,731,448)
-----------
Total -- representing net assets applicable to capital shares outstanding..................... $180,323,147
-----------
</TABLE>
- --------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
STATEMENT OF OPERATIONS
Year ended October 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income: (Note 1)
Interest income.......................................................................... $ 39,014,757
Securities lending income................................................................ 957,492
-------------
Total investment income................................................................ 39,972,249
-------------
Expenses:
Investment management and administration fees (Note 2)................................... 3,009,607
Service and distribution expenses: (Note 2)
Class A.................................................................... $ 396,089
Class B.................................................................... 1,911,164 2,307,253
----------
Transfer agent fees (Note 2)............................................................. 580,010
Printing and postage expenses............................................................ 194,145
Professional fees........................................................................ 123,970
Custodian fees........................................................................... 103,300
Fund accounting fees (Note 2)............................................................ 82,450
Registration and filing fees............................................................. 48,875
Trustees' fees and expenses (Note 2)..................................................... 23,526
Other expenses........................................................................... 116,753
-------------
Total net expenses..................................................................... 6,589,889
-------------
Net investment income...................................................................... 33,382,360
-------------
Net realized and unrealized loss on investments and foreign currencies: (Note
1)
Net realized loss on investments............................................. (66,692,221)
Net realized loss on foreign currency transactions........................... (2,809,719)
----------
Net realized loss during the year...................................................... (69,501,940)
Net change in unrealized appreciation on translation of assets and
liabilities in foreign currencies........................................... 951,172
Net change in unrealized depreciation of investments......................... (50,094,366)
----------
Net unrealized depreciation during the year............................................ (49,143,194)
-------------
Net realized and unrealized loss on investments and foreign currencies..................... (118,645,134)
-------------
Net decrease in net assets resulting from operations....................................... $ (85,262,774)
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
------------- -------------
Decrease in net assets
Operations:
Net investment income...................................................... $ 33,382,360 $ 31,937,784
Net realized gain (loss) on investments and foreign currency
transactions.............................................................. (69,501,940) 69,702,746
Net change in unrealized appreciation (depreciation) on translation of
assets and liabilities in foreign currencies.............................. 951,172 (1,099,793)
Net change in unrealized appreciation (depreciation) of investments........ (50,094,366) (36,470,606)
------------- -------------
Net increase (decrease) in net assets resulting from operations.......... (85,262,774) 64,070,131
------------- -------------
Class A:
Distributions to shareholders: (Note 1)
From net investment income................................................. (9,422,518) (12,555,399)
From net realized gain on investments...................................... (24,756,370) (2,751,509)
Return of capital.......................................................... (3,147,917) --
Class B:
Distributions to shareholders: (Note 1)
From net investment income................................................. (14,937,576) (17,789,317)
From net realized gain on investments...................................... (41,863,802) (3,911,565)
Return of capital.......................................................... (4,936,309) --
Advisor Class:
Distributions to shareholders: (Note 1)
From net investment income................................................. (246,624) (1,289,469)
From net realized gain on investments...................................... (638,983) (264,339)
Return of capital.......................................................... (82,579) --
------------- -------------
Total distributions...................................................... (100,032,678) (38,561,598)
------------- -------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested........................... 273,854,427 561,523,639
Decrease from capital shares repurchased................................... (274,028,239) (665,858,246)
------------- -------------
Net decrease from capital share transactions............................. (173,812) (104,334,607)
------------- -------------
Total decrease in net assets................................................. (185,469,264) (78,826,074)
Net assets:
Beginning of year.......................................................... 365,792,411 444,618,485
------------- -------------
End of year *.............................................................. $ 180,323,147 $ 365,792,411
------------- -------------
------------- -------------
* Includes undistributed/accumulated net investment income (loss)........... $ (41,564) $ 303,600
------------- -------------
------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS A
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1998 (d) 1997 (d) 1996 (d) 1995 1994 (d)
---------- ---------- ---------- ---------- ----------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 15.56 $ 14.85 $ 11.70 $ 12.56 $ 14.92
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income................. 1.35* 1.19 1.27 1.35 0.94
Net realized and unrealized gain
(loss) on investments and foreign
currencies........................... (4.80) 0.93 3.09 (1.09) (1.87)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) from
investment operations.............. (3.45) 2.12 4.36 0.26 (0.93)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ (1.06) (1.18) (1.11) (1.03) (0.94)
From net realized gain on
investments.......................... (2.83) (0.23) (0.10) (0.03) (0.27)
In excess of net realized gain on
investments.......................... -- -- -- -- (0.22)
Return of capital..................... (0.36) -- -- (0.06) --
---------- ---------- ---------- ---------- ----------
Total distributions................. (4.25) (1.41) (1.21) (1.12) (1.43)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 7.86 $ 15.56 $ 14.85 $ 11.70 $ 12.56
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (c)............. (30.07)% 14.46% 39.05% 2.81% (6.45)%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 69,321 $ 133,973 $ 178,318 $ 142,002 $ 167,974
Ratio of net investment income to
average net assets..................... 11.27% 7.39% 9.52% 11.85% 7.00%
Ratio of expenses to average net assets
excluding interest expense:
With expense reductions............... 1.74% 1.53% 1.69% 1.75% 1.57%
Without expense reductions............ 1.74% 1.58% 1.69% 1.75% 1.57%
Ratio of interest expense to average net
assets++............................... N/A N/A 0.04% N/A 0.22%
Portfolio turnover rate++............... 339% 214% 290% 213% 178%
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share operating data were calculated based upon
average shares outstanding during the period.
* Net investment income per share reflects an interest payment received
from the conversion of Vnesheconombank loan agreements of $0.21 per
share for each of Class A, B and Advisor.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates and ratio of interest expense to average net
assets are calculated on the basis of the fund as a whole without
distinguishing among the classes of shares issued.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS B
----------------------------------------------------------
YEAR ENDED OCTOBER 31,
----------------------------------------------------------
1998 (d) 1997 (d) 1996 (d) 1995 1994 (d)
---------- ---------- ---------- ---------- ----------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 15.54 $ 14.83 $ 11.69 $ 12.56 $ 14.90
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income................. 1.28* 1.09 1.17 1.27 0.86
Net realized and unrealized gain
(loss) on investments and foreign
currencies........................... (4.79) 0.93 3.09 (1.09) (1.85)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) from
investment operations.............. (3.51) 2.02 4.26 0.18 (0.99)
---------- ---------- ---------- ---------- ----------
Distributions to shareholders:
From net investment income............ (0.98) (1.08) (1.03) (0.96) (0.86)
From net realized gain on
investments.......................... (2.83) (0.23) (0.09) (0.03) (0.27)
In excess of net realized gain on
investments.......................... -- -- -- -- (0.22)
Return of capital..................... (0.36) -- -- (0.06) --
---------- ---------- ---------- ---------- ----------
Total distributions................. (4.17) (1.31) (1.12) (1.05) (1.35)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period.......... $ 7.86 $ 15.54 $ 14.83 $ 11.69 $ 12.56
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (c)............. (30.49)% 13.77% 38.16% 2.07% (6.99)%
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 109,406 $ 228,101 $ 251,002 $ 214,897 $ 232,423
Ratio of net investment income to
average net assets..................... 10.62% 6.74% 8.87% 11.20% 6.35%
Ratio of expenses to average net assets
excluding interest expense:
With expense reductions............... 2.39% 2.18% 2.34% 2.40% 2.22%
Without expense reductions............ 2.39% 2.23% 2.34% 2.40% 2.22%
Ratio of interest expense to average net
assets++............................... N/A N/A 0.04% N/A 0.22%
Portfolio turnover rate++............... 339% 214% 290% 213% 178%
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share operating data were calculated based upon
average shares outstanding during the period.
* Net investment income per share reflects an interest payment received
from the conversion of Vnesheconombank loan agreements of $0.21 per
share for each of Class A, B and Advisor.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates and ratio of interest expense to average net
assets are calculated on the basis of the fund as a whole without
distinguishing among the classes of shares issued.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
FINANCIAL HIGHLIGHTS (cont'd)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding
throughout the period, total investment return, ratios and supplemental data.
This information has been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ADVISOR CLASS+
---------------------------------------------------
JUNE 1, 1995
YEAR ENDED OCTOBER 31, TO
------------------------------------ OCTOBER 31,
1998 (d) 1997 (d) 1996 (d) 1995
----------- ----------- ---------- -------------
Per Share Operating Performance:
Net asset value, beginning of period.... $ 15.52 $ 14.83 $ 11.71 $ 11.44
----------- ----------- ---------- -------------
Income from investment operations:
Net investment income................. 1.40* 1.22 1.34 0.57
Net realized and unrealized gain
(loss) on investments and foreign
currencies........................... (4.79) 0.93 3.05 0.17
----------- ----------- ---------- -------------
Net increase (decrease) from
investment operations.............. (3.39) 2.15 4.39 0.74
----------- ----------- ---------- -------------
Distributions to shareholders:
From net investment income............ (1.11) (1.23) (1.16) (0.44)
From net realized gain on
investments.......................... (2.83) (0.23) (0.11) --
In excess of net realized gain on
investments.......................... -- -- -- --
Return of capital..................... (0.36) -- -- (0.03)
----------- ----------- ---------- -------------
Total distributions................. (4.30) (1.46) (1.27) (0.47)
----------- ----------- ---------- -------------
Net asset value, end of period.......... $ 7.83 $ 15.52 $ 14.83 $ 11.71
----------- ----------- ---------- -------------
----------- ----------- ---------- -------------
Total investment return (c)............. (29.79)% 14.72% 39.38% 6.54%(b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 1,596 $ 3,719 $ 15,298 $ 1,463
Ratio of net investment income to
average net assets..................... 11.62% 7.74% 9.87% 12.20%(a)
Ratio of expenses to average net assets
excluding interest expense:
With expense reductions............... 1.39% 1.18% 1.34% 1.40%(a)
Without expense reductions............ 1.39% 1.23% 1.34% 1.40%(a)
Ratio of interest expense to average net
assets++............................... N/A N/A 0.04% N/A
Portfolio turnover rate++............... 339% 214% 290% 213%(a)
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share operating data were calculated based upon
average shares outstanding during the period.
* Net investment income per share reflects an interest payment received
from the conversion of Vnesheconombank loan agreements of $0.21 per
share for each of Class A, B and Advisor.
+ Commencing June 1, 1995, the Fund began offering Advisor Class shares.
++ Portfolio turnover rates and ratio of interest expense to average net
assets are calculated on the basis of the fund as a whole without
distinguishing among the classes of shares issued.
N/A Not Applicable.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
NOTES TO
FINANCIAL STATEMENTS
October 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (SEE ALSO NOTE 2)
AIM Emerging Markets Debt Fund (the "Fund"), formerly AIM Global High Income
Fund and prior to that GT Global High Income Fund, a non-diversified separate
series of AIM Investment Funds (the "Trust"), formerly G.T. Investment Funds,
Inc. The Trust is organized as a Delaware business trust and is registered under
the Investment Company Act of 1940, as amended ("1940 Act"), as an open-end
management investment company. The Trust has thirteen series of shares in
operation, each series corresponding to a distinct portfolio of investments.
The Fund invests substantially all of its investable assets in the Emerging
Markets Debt Portfolio (the "Portfolio", formerly the Global High Income
Portfolio), a Delaware business trust and is registered under the 1940 Act as a
non-diversified, open-end management investment company.
The Portfolio has investment objectives, policies and limitations substantially
identical to those of its corresponding Fund. Therefore, the financial
statements of the Fund and the Portfolio have been presented on a consolidated
basis, and represent all activities of both the Fund and Portfolio. Through
October 31, 1998, all of the shares of beneficial interest of the Portfolio were
owned by the Fund or INVESCO (NY), Inc. (the "Sub-advisor"), which has a nominal
($100) investment in the Portfolio.
The Fund offers Class A, Class B, and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses, and the common
expenses of the Fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the Fund. Each
class of shares differs in its respective service and distribution expenses, and
may differ in its transfer agent, registration, and certain other class-specific
fees and expenses.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange, or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
Equity securities are valued at the last sale price on the exchange on which
such securities are traded, or on the principal over-the-counter market on which
such securities are traded, as of the close of business on the day the
securities are being valued, or, lacking any sales, at the last available bid
price. In cases where securities are traded on more than one exchange, the
securities are valued on the exchange determined by A I M Advisors, Inc. (the
"Manager") to be the primary market.
Fixed income investments are valued at the mean of representative quoted bid and
ask prices for such investments or, if such prices are not available, at prices
for investments of comparative maturity, quality, and type; however, when the
Manager deems it appropriate, prices obtained for the day of valuation from a
bond pricing service will be used. Short-term investments with a maturity of 60
days or less are valued at amortized cost adjusted for foreign exchange
translation and market fluctuation, if any.
Investments for which market quotations are not readily available (including
restricted securities which are subject to limitations on their sale) are valued
at fair value as determined in good faith by or under the direction of the
Trust's Board of Trustees.
Portfolio securities which are primarily traded on foreign exchanges are
generally valued at the preceding closing values of such securities on their
respective exchanges, and those values are then translated into U.S. dollars at
the current exchange rates, except that when an occurrence subsequent to the
time a value was so established is likely to have materially changed such value,
then the fair value of those securities will be determined by consideration of
other factors by or under the direction of the Trust's Board of Trustees.
17
<PAGE>
(B) FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund and Portfolio are maintained in U.S. dollars.
The market values of foreign securities, currency holdings, and other assets and
liabilities are recorded in the books and records of the Portfolio after
translation to U.S. dollars based on the exchange rates on that day. The cost of
each security is determined using historical exchange rates. Income and
withholding taxes are translated at prevailing exchange rates when earned or
incurred.
The Portfolio does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, forward foreign currency contracts, sales
of foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains or losses arise from
changes in the value of assets and liabilities other than investments in
securities at period end, resulting from changes in exchange rates.
17A
<PAGE>
(C) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Portfolio, it is the
Portfolio's policy to always receive, as collateral, United States government
securities or other high quality debt securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Portfolio
under each agreement at its maturity.
(D) FORWARD FOREIGN CURRENCY CONTRACTS
A forward foreign currency contract ("Forward Contract") is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of the Forward Contract fluctuates with changes in currency
exchange rates. The Forward Contract is marked-to-market daily and the change in
market value is recorded by the Portfolio as an unrealized gain or loss. When
the Forward Contract is closed, the Portfolio records a realized gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed. Forward Contracts involve market risk in excess
of the amount shown in the Portfolio's "Statement of Assets and Liabilities".
The Portfolio could be exposed to risk if a counterparty is unable to meet the
terms of the contract or if the value of the currency changes unfavorably. The
Portfolio may enter into Forward Contracts in connection with planned purchases
or sales of securities, or to hedge against adverse fluctuations in exchange
rates between currencies.
(E) OPTION ACCOUNTING PRINCIPLES
When the Portfolio writes a call or put option, an amount equal to the premium
received is included in the Portfolio's "Statement of Assets and Liabilities" as
an asset and an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of the option.
The current market value of an option listed on a traded exchange is valued at
its last bid price, or, in the case of an over-the-counter option, is valued at
the average of the last bid prices obtained from brokers, unless a quotation
from only one broker is available, in which case only that broker's price will
be used. If an option expires on its stipulated expiration date or if the
Portfolio enters into a closing purchase transaction, a gain or loss is realized
without regard to any unrealized gain or loss on the underlying security and the
liability related to such option is extinguished. If a written call option is
exercised, a gain or loss is realized from the sale of the underlying security
and the proceeds of the sale are increased by the premium originally received.
If a written put option is exercised, the cost of the underlying security
purchased would be decreased by the premium originally received. The Portfolio
can write options only on a covered basis, which, for a call, requires that the
Portfolio hold the underlying security and, for a put, requires the Portfolio to
set aside cash, U.S. government securities or other liquid securities in an
amount not less than the exercise price, or otherwise provide adequate cover at
all times while the put option is outstanding. The Portfolio may use options to
manage its exposure to the stock market and to fluctuations in currency values
or interest rates.
The premium paid by the Portfolio for the purchase of a call or put option is
included in the Portfolio's "Statement of Assets and Liabilities" as an
investment and subsequently "marked-to-market" to reflect the current market
value of the option. If an option which the Portfolio has purchased expires on
the stipulated expiration date, the Portfolio realizes a loss in the amount of
the cost of the option. If the Portfolio enters into a closing sale transaction,
the Portfolio realizes a gain or loss, depending on whether proceeds from the
closing sale transaction are greater or less than the cost of the option. If the
Portfolio exercises a call option, the cost of the securities acquired by
exercising the call is increased by the premium paid to buy the call. If the
Portfolio exercises a put option, it realizes a gain or loss from the sale of
the underlying security, and the proceeds from such sale are decreased by the
premium originally paid.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a call option is that the Portfolio may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is that
the Portfolio may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk the
Portfolio may not be able to enter into a closing transaction because of an
illiquid secondary market.
18
<PAGE>
(F) FUTURES CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
security at a set price on a future date. Upon entering into such a contract the
Portfolio is required to pledge to the broker an amount of cash or securities
equal to the minimum "initial margin" requirements of the exchange on which the
contract is traded. Pursuant to the contract, the Portfolio agrees to receive
from or pay to the broker an amount of cash equal to the daily fluctuation in
value of the contract. Such receipts or payments are known as "variation margin"
and are recorded by the Portfolio as unrealized gains or losses. When the
contract is closed, the Portfolio records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. The potential risk to the Portfolio is that the
change in value of the underlying securities may not correlate to the change in
value of the contracts. The Portfolio may use futures contracts to manage its
exposure to the stock market and to fluctuations in currency values or interest
rates.
(G) SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed). The cost of securities sold is determined on a first-in,
first-out-basis, unless otherwise specified. Dividends are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. Where a high
level of uncertainty exists as to its collection, income is recorded net of all
withholding tax with any rebate recorded when received. The Portfolio may trade
securities on other than normal settlement terms. This may increase the risk if
the other party to the transaction fails to deliver and causes the Portfolio to
subsequently invest at less advantageous prices.
(H) PORTFOLIO SECURITIES LOANED
At October 31, 1998, stocks with an aggregate value of $10,301,788 were on loan
to brokers. The loans were secured by cash collateral of $11,293,368 received by
the Portfolio. For the year ended October 31, 1998, the Fund received fees of
$957,492.
For international securities, cash collateral is received by the Portfolio
against loaned securities in an amount at least equal to 105% of the
18A
<PAGE>
market value of the loaned securities at the inception of each loan. This
collateral must be maintained at not less than 103% of the market value of the
loaned securities during the period of the loan. For domestic securities, cash
collateral is received by the Portfolio against loaned securities in the amount
at least equal to 102% of the market value of the loaned securities at the
inception of each loan. This collateral must be maintained at not less than 100%
of the market value of the loaned securities during the period of the loan. The
cash collateral is invested in a securities lending trust which consists of a
portfolio of high quality short duration securities whose average effective
duration is restricted to 120 days or less.
(I) TAXES
It is the intended policy of the Fund to meet the requirements for qualification
as a "regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains. The Fund has a capital loss carryforward of $53,419,915 which
expires in 2006.
(J) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by each Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Portfolio and timing differences.
(K) FOREIGN SECURITIES
There are certain additional considerations and risks associated with investing
in foreign securities and currency transactions that are not inherent in
investments of domestic origin. The Portfolio's investment in emerging market
countries may involve greater risks than investments in more developed markets
and the price of such investments may be volatile. These risks of investing in
foreign and emerging markets may include foreign currency exchange rate
fluctuations, perceived credit risk, adverse political and economic developments
and possible adverse foreign government intervention.
(L) INDEXED SECURITIES
The Portfolio may invest in indexed securities whose value is linked either
directly or indirectly to changes in foreign currencies, interest rates,
equities, indices, or other reference instruments. Indexed securities may be
more volatile than the reference instrument itself, but any loss is limited to
the amount of the original investment.
(M) RESTRICTED SECURITIES
The Portfolio is permitted to invest in privately placed restricted securities.
These securities may be resold in transactions exempt from registration or to
the public if the securities are registered. Disposal of these securities may
involve time-consuming negotiations and expense, and prompt sale at an
acceptable price may be difficult. At the end of the year, restricted
securities, if any, (excluding 144A issues), are shown at the end of the Fund's
Portfolio of Investments.
(N) LINE OF CREDIT
The Fund, along with certain other funds advised and/or administered by the
Manager, has a line of credit with BankBoston. The arrangement with the bank
allows all specified funds and certain other Funds to borrow, on a first come,
first serve basis, an aggregate maximum amount of $150,000,000. The Fund is
limited to borrowing up to 33 1/3% of the value of the Fund's total assets. On
October 31, 1998, AIM Emerging Markets Debt Fund had $2,000,000 in loans
outstanding.
For the year ended October 31, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
for the Fund was $6,402,778, with a weighted average interest rate of 6.27%.
Interest expense for the year ended October 31, 1998 was $80,253 and is included
in "Other Expenses" on the Statement of Operations.
(O) SECURITIES PURCHASED ON A WHEN-ISSUED OR FORWARD COMMITMENT BASIS
The Portfolio may trade securities on a when-issued or forward commitment basis,
with payment and delivery scheduled for a future date. These transactions are
subject to market fluctuations and are subject to the risk that the value at
delivery may be more or less than the trade date purchase price. Although the
Portfolio will generally purchase these securities with the intention of
acquiring such securities, they may sell such securities before the settlement
date. These securities are identified on the accompanying Portfolio of
Investments. The Fund or Portfolio has set aside sufficient cash or liquid
securities as collateral for these purchase commitments.
19
<PAGE>
2. RELATED PARTIES
A I M Advisors, Inc. (the "Manager"), an indirect wholly-owned subsidiary of
AMVESCAP PLC, is the Fund's and Portfolio's investment manager and administrator
and INVESCO (NY), Inc., (formerly, Chancellor LGT Asset Management, Inc.) is the
Fund's and Portfolio's investment sub-advisor and sub-administrator. As of the
close of business on May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the
former indirect parent organization of Chancellor LGT Asset Management, Inc.
("Chancellor LGT") consummated a purchase agreement with AMVESCAP PLC pursuant
to which AMVESCAP PLC acquired LGT's Asset Management Division, which included
Chancellor LGT and certain other affiliates. As a result of this transaction,
Chancellor LGT was renamed INVESCO (NY), Inc., and is now an indirect
wholly-owned subsidiary of AMVESCAP PLC. A I M Distributors, Inc. ("AIM
Distributors"), a wholly-owned subsidiary of the Manager, became the Fund's
distributor as of the close of business on May 29, 1998. The Trust was
reorganized from a Maryland corporation into a Delaware business trust, and the
Portfolio was reorganized from a New York common law trust into a Delaware
business trust on September 8, 1998. Finally, as of the close of business on
September 4, 1998, A I M Fund Services, Inc. ("AFS"), an affiliate of the
Manager and AIM Distributors, replaced GT Global Investor Services, Inc. ("GT
Services") as the transfer agent of the Fund.
The Fund pays administration fees to the Manager at the annualized rate of 0.25%
of its average daily net assets. These fees are computed daily and paid monthly.
The AIM Emerging Markets Debt Portfolio pays investment management and
administration fees to the Manager
19A
<PAGE>
at the annualized rate of 0.475% on the first $500 million of average daily net
assets of the Portfolio; 0.45% on the next $1 billion; 0.425% on the next $1
billion; and 0.40% on amounts thereafter, plus 2% of the Portfolio's total
investment income calculated in accordance with generally accepted accounting
principles, adjusted daily for currency revaluations, on a mark to market basis,
of the Portfolio's assets; provided, however, that during any fiscal year this
amount shall not exceed 2% of the Portfolio's total investment income calculated
in accordance with generally accepted accounting principles. These fees are
computed daily and paid monthly.
AIM Distributors, an affiliate of the Manager, serves as the Fund's distributor.
For the period ended May 29, 1998, GT Global, Inc. ("GT Global"), an affiliate
of the investment sub-advisor, served as the Fund's distributor. The Fund offers
Class A, Class B, and Advisor Class shares for purchase.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. AIM Distributors collects the sales charges imposed on sales of
Class A shares, and reallows a portion of such charges to dealers through which
the sales are made. For the year ended October 31, 1998, AIM Distributors and GT
Global retained sales charges of $21,515 and $35,739, respectively. Purchases of
Class A shares exceeding $1,000,000 may be subject to a contingent deferred
sales charge ("CDSC") upon redemption, in accordance with the Fund's current
prospectus. AIM Distributors and GT Global collected CDSCs for the year ended
October 31, 1998 of $8 and $435, respectively. AIM Distributors also makes
ongoing shareholder servicing and trail commission payments to dealers whose
clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, AIM Distributors, from its own resources, pays commissions to dealers
through which the sales are made. Certain redemptions of Class B shares made
within six years of purchase are subject to CDSCs, in accordance with the Fund's
current prospectus. For the year ended October 31, 1998, AIM Distributors and GT
Global collected CDSCs in the amount of $352,609 and $610,629, respectively. In
addition, AIM Distributors makes ongoing shareholder servicing and trail
commission payments to dealers whose clients hold Class B shares.
For the period ended May 29, 1998, pursuant to the then effective separate
distribution plans adopted under the 1940 Act Rule 12b-1 by the Trust's Board of
Trustees with respect to the Fund's Class A shares ("Class A Plan") and Class B
shares ("Class B Plan"), the Fund reimbursed GT Global for a portion of its
shareholder servicing and distribution expenses. Under the Class A Plan, the
Fund was permitted to pay GT Global a service fee at the annualized rate of up
to 0.25% of the average daily net assets of the Fund's Class A shares for GT
Global's expenditures incurred in servicing and maintaining shareholder
accounts, and was permitted to pay GT Global a distribution fee at the
annualized rate of up to 0.35% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global was reimbursed under the Class A Plan would
have been incurred within one year of such reimbursement.
For the period ended May 29, 1998, pursuant to the Class B Plan, the Fund was
permitted to pay GT Global a service fee at the annualized rate of up to 0.25%
of the average daily net assets of the Fund's Class B shares for GT Global's
expenditures incurred in servicing and maintaining shareholder accounts, and was
permitted to pay GT Global a distribution fee at the annualized rate of up to
0.75% of the average daily net assets of the Fund's Class B shares for GT
Global's expenditures incurred in providing services as distributor. Expenses
incurred under the Class B Plan in excess of 1.00% annually were permitted to be
carried forward for reimbursement in subsequent years as long as that Plan
continued in effect.
Effective as of the close of business May 29, 1998, pursuant to Rule 12b-1 under
the 1940 Act, the Trust's Board of Trustees adopted a Master Distribution Plan
applicable to the Fund's Class A shares ("Class A Plan") and Class B shares
("Class B Plan"), pursuant to which the Fund compensates AIM Distributors for
the purpose of financing any activity that is intended to result in the sale of
Class A or Class B shares of the Fund. Under the Class A Plan, the Fund
compensates AIM Distributors at the annualized rate of 0.35% of the average
daily net assets of the Fund's Class A shares. Under the Class B Plan, the Fund
compensates AIM Distributors at an annualized rate of 1.00% of the average daily
net assets of the Fund's Class B shares.
20
<PAGE>
The Class A Plan and the Class B Plan (together, the "Plans") are designed to
compensate AIM Distributors for certain promotional and other sales-related
costs, and to implement a dealer incentive program that provides for periodic
payments to selected dealers who furnish continuing personal shareholder
services to their customers who purchase and own Class A and Class B shares of
the Fund. Payments also can be directed by AIM Distributors to financial
institutions who have entered into service agreements with respect to Class A
and Class B shares of the Fund and who provide continuing personal services to
their customers who own Class A and Class B shares of the Fund. The service fees
payable to selected financial institutions are calculated at the annual rate of
0.25% of the average daily net asset value of those Fund shares that are held in
such institution's customers' accounts that were purchased on or after a
prescribed date set forth in the Plans.
The Manager and AIM Distributors voluntarily have undertaken to limit the Fund's
expenses (exclusive of brokerage commissions, taxes, interest, and extraordinary
expense) to the maximum annual rate of 1.75%, 2.40%, and 1.40% of the average
daily net assets of the Fund's Class A, Class B, and Advisor Class shares,
respectively. If necessary, this limitation will be effected by waivers by the
Manager of investment management and administration fees, waivers by AIM
Distributors of payments under the Class A Plan and/or Class B Plan and/or
reimbursements by the Manager or AIM Distributors of portions of the Fund's
other operating expenses.
Effective as of the close of business September 4, 1998, the Fund, pursuant to a
transfer agency and service agreement, has agreed to pay A I M Fund Services,
Inc. ("AFS") an annualized fee of $24.85 per shareholder accounts that are open
during any monthly period (this fee includes all out-of-pocket expenses), and an
annualized fee of $0.70 per shareholder account that is closed during any
monthly
20A
<PAGE>
period. Both fees shall be billed by AFS monthly in arrears on a prorated basis
of 1/12 of the annualized fee for all such accounts.
For the period November 1, 1997 to September 4, 1998, GT Services, an affiliate
of the Manager and AIM Distributors, was the transfer agent of the Fund. For
performing shareholder servicing, reporting, and general transfer agent
services, GT Services received an annual maintenance fee of $17.50 per account,
a new account fee of $4.00 per account, a per transaction fee of $1.75 for all
transactions other than exchanges and a per exchange fee of $2.25. GT Services
also was reimbursed by the Fund for its out-of-pocket expenses for such items as
postage, forms, telephone charges, stationery and office supplies.
The Manager is the pricing and accounting agent for the Fund and Portfolio. The
monthly fee for these services to the Manager is a percentage, not to exceed
0.03% annually, of a Fund's average daily net assets. The annual fee rate is
derived based on the aggregate net assets of the funds which comprise the
following investment companies: AIM Growth Series, AIM Investment Funds, AIM
Investment Portfolios, AIM Series Trust, G.T. Global Variable Investment Series
and G.T. Global Variable Investment Trust. The fee is calculated at the rate of
0.03% of the first $5 billion of assets and 0.02% to the assets in excess of $5
billion. An amount is allocated to and paid by each such fund based on its
relative average daily net assets.
The Trust pays each Trustee who is not an employee, officer or director of the
Manager, or any other affiliated company, $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1998, purchases and sales of investment
securities by the Portfolio, other than U.S. government obligations and
short-term investments, aggregated $939,420,479 and $952,299,285, respectively.
For the year ended October 31, 1998, sales of U.S. government obligations
aggregated $27,908,116. There were no purchases of U.S. government obligations.
4. CAPITAL SHARES
At October 31, 1998, there were 6,000,000,000 shares of the Trust's common stock
authorized, at $0.0001 par value. Of this amount, 400,000,000 were classified as
shares of the AIM Global Telecommunications Fund; 400,000,000 were classified as
shares of AIM Global Government Income Fund; 200,000,000 were classified as
shares of AIM Global Health Care Fund; 200,000,000 were classified as shares of
AIM Strategic Income Fund; 200,000,000 were classified as shares of AIM
Developing Markets Fund; 200,000,000 were classified as shares of GT Global
Currency Fund (inactive); 200,000,000 were classified as shares of AIM Global
Growth & Income Fund; 200,000,000 were classified as shares of GT Global Small
Companies Fund (inactive); 200,000,000 were classified as shares of AIM Latin
American Growth Fund; 200,000,000 were classified as shares of AIM Emerging
Markets Fund; 200,000,000 were classified as shares of AIM Emerging Markets Debt
Fund; 200,000,000 were classified as shares of AIM Global Financial Services
Fund; 200,000,000 were classified as shares of AIM Global Resources Fund;
200,000,000 were classified as shares of AIM Global Infrastructure Fund;
200,000,000 were classified as shares of AIM Global Consumer Products and
Services Fund. The shares of each of the foregoing series of the Trusts were
divided equally into two classes, designated Class A and Class B common stock.
With respect to the issuance of Advisor Class shares, 100,000,000 shares were
classified as shares of each of the fifteen series of the Trusts and designated
as Advisor Class common stock. 1,100,000,000 shares remain unclassified.
Transactions in capital shares of the Fund were as follows:
21
<PAGE>
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997
-------------------------- ----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------- ----------- ------------- ----------- ---------------
Shares sold....................................... 10,918,639 $ 129,801,507 17,142,418 $ 272,139,950
Shares issued in connection with reinvestment of
distributions................................... 2,191,470 26,459,355 574,707 9,164,383
----------- ------------- ----------- ---------------
13,110,109 156,260,862 17,717,125 281,304,333
Shares repurchased................................ (12,901,851) (152,829,526) (21,118,898) (335,756,037)
----------- ------------- ----------- ---------------
Net increase (decrease)........................... 208,258 $ 3,431,336 (3,401,773) $ (54,451,704)
----------- ------------- ----------- ---------------
----------- ------------- ----------- ---------------
CLASS B
- --------------------------------------------------
Shares sold....................................... 5,958,185 $ 73,991,330 13,848,218 $ 221,702,040
Shares issued in connection with reinvestment of
distributions................................... 3,020,192 36,460,585 721,148 11,494,889
----------- ------------- ----------- ---------------
8,978,377 110,451,915 14,569,366 233,196,929
Shares repurchased................................ (9,736,068) (113,538,414) (16,813,796) (270,094,630)
----------- ------------- ----------- ---------------
Net decrease...................................... (757,691) $ (3,086,499) (2,244,430) $ (36,897,701)
----------- ------------- ----------- ---------------
----------- ------------- ----------- ---------------
ADVISOR CLASS
- --------------------------------------------------
Shares sold....................................... 490,309 $ 6,221,370 2,868,282 $ 45,874,009
Shares issued in connection with reinvestment of
distributions................................... 76,464 920,280 72,440 1,148,368
----------- ------------- ----------- ---------------
566,773 7,141,650 2,940,722 47,022,377
Shares repurchased................................ (602,542) (7,660,299) (3,732,584) (60,007,579)
----------- ------------- ----------- ---------------
Net decrease...................................... (35,769) $ (518,649) (791,862) $ (12,985,202)
----------- ------------- ----------- ---------------
----------- ------------- ----------- ---------------
</TABLE>
21A
<PAGE>
5. SUBSEQUENT EVENT (UNAUDITED)
Effective December 14, 1998, sub-administration responsibility for the Fund and
sub-advisory and sub-administration responsibility for the Portfolio was
transferred from INVESCO (NY), Inc. to INVESCO Asset Management Ltd., another
indirect wholly-owned subsidiary of AMVESCAP PLC. A I M Advisors, Inc. will
continue to serve as the manager and administrator of the Fund and the
Portfolio. The transfer will not change the fees paid by A I M Advisors, Inc.
for sub-advisory services and will not change the nature of the sub-advisory
services provided to the Portfolio or the personnel providing such services.
6. PROXY RESULTS (UNAUDITED)
The Special Meeting of Shareholders of the G.T. Investment Funds, Inc. now known
as AIM Investment Funds (the "Trust") was held on May 20, 1998 at the Trust's
offices, 50 California Street, 26th Floor, San Francisco, California. The
meeting was held for the following purposes:
(1) To elect Trustees as follows: C. Derek Anderson, Frank S. Bayley, William
J. Guilfoyle, Arthur C. Patterson, Ruth H. Quigley.
(2) To approve a new Investment Management and Administration Contract and
Sub-Advisory and Sub-Administration Contract with respect to each series of the
Trust (each, a "Fund," and collectively, the "Funds").
(3) To approve replacement Rule 12b-1 plans of distribution with respect to
Class A and B Shares of the Fund.
(4) To approve changes to the fundamental investment restrictions of the Fund.
(5) To approve an agreement and plan of conversion and termination for the
Trust.
(6) To ratify the selection of Coopers & Lybrand L.L.P., now known as
PricewaterhouseCoopers LLP, as the Trust's independent public accountants.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
<S> <C>
TRUSTEE/MATTER
---------------------------------------------------------------------------------------------------------------
(1) C. Derek Anderson..............................................................................................
Frank S. Bayley................................................................................................
William J. Guilfoyle...........................................................................................
Arthur C. Patterson............................................................................................
Ruth H. Quigley................................................................................................
(2)(a) Approval of investment management and administration contract..................................................
(2)(b) Approval of sub-advisory and sub-administration contract.......................................................
(3) Approval of replacement Rule 12b-1 plans of distribution
CLASS A SHARES.................................................................................................
CLASS B SHARES.................................................................................................
(4)(a) Modification of Fundamental Restriction on Concentration.......................................................
(4)(b) Modification of Fundamental Restriction on Issuing Senior Securities and Borrowing Money.......................
(4)(c) Modification of Fundamental Restriction on Making Loans........................................................
(4)(d) Modification of Fundamental Restriction on Underwriting Securities.............................................
(4)(e) Modification of Fundamental Restriction on Real Estate Investments.............................................
(4)(f) Modification of Fundamental Restriction on Investing in Commodities............................................
(4)(g) Elimination of Fundamental Restriction on Margin Transactions..................................................
(4)(h) Elimination of Fundamental Restriction on Pledging Assets......................................................
(4)(i) Elimination of Fundamental Restriction on Investments in Oil, Gas and Mineral Leases and Programs..............
(4)(j) Elimination of Fundamental Restriction on Diversification Required By Internal Revenue Code....................
(5) Approval of an agreement and plan of conversion and termination with respect to the Trust......................
(6) Approval of the conversion of the portfolios in which certain Funds invest.....................................
(7) Ratification of the selection of Coopers and Lybrand L.L.P., now known as PricewaterhouseCoopers LLP, as the
Trust's independent public accountants.......................................................................
</TABLE>
22
<PAGE>
VOTES WITHHELD/
VOTES FOR AGAINST ABSTENTIONS
--------------- ------------ --------------
(1) 191,685,088 N/A 13,123,292
191,766,811 N/A 13,041,568
191,828,959 N/A 12,979,420
191,845,270 N/A 12,963,109
191,869,887 N/A 12,938,492
(2)(a) 11,539,226 325,581 3,653,718*
(2)(b) 11,405,206 398,639 3,714,680*
(3)
5,596,649 164,819 433,984
8,129,440 288,519 787,402
(4)(a) 11,358,960 419,748 3,739,817*
(4)(b) 11,358,802 419,906 3,739,817*
(4)(c) 11,358,802 419,906 3,739,817*
(4)(d) 11,358,960 419,748 3,739,817*
(4)(e) 11,358,802 419,906 3,739,817*
(4)(f) 11,358,593 420,115 3,739,817*
(4)(g) 11,358,436 420,272 3,739,817*
(4)(h) 11,358,960 419,748 3,739,817*
(4)(i) 11,358,960 419,748 3,739,817*
(4)(j) 11,358,713 419,995 3,739,817*
(5) 190,027,469 6,362,084 94,055,040*
(6) 11,391,564 294,742 3,832,219*
(7) 191,358,779 2,114,168 11,333,063
- --------------
* Includes Broker Non-Votes
- --------------
FEDERAL TAX INFORMATION (UNAUDITED):
Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$11,387,137 as capital gain dividends for the fiscal year ended October 31,
1998.
22A
AGREEMENT AND DECLARATION OF TRUST
OF
GLOBAL HIGH INCOME PORTFOLIO
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered into
as of May 7, 1998, among William J. Guilfoyle, C. Derek Anderson, Frank S.
Bayley, Arthur C. Patterson, and Ruth H. Quigley, as Trustees, and each person
who becomes a Holder in accordance with the terms hereinafter set forth.
WHEREAS, the parties hereto desire to create a business trust pursuant to
the Delaware Act 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 Agreement for the benefit of the Holders 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
"Global High Income Portfolio," 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.
Section 1.2. DEFINITIONS. Whenever used herein, unless otherwise required
by the context or specifically provided:
(a) "Affiliated Person," "Company," "Person," and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretive
releases of the Commission thereunder. The term "Commission" shall
have the meaning given it in the 1940 Act;
(b) "Agreement" means this Agreement and Declaration of Trust, as it may
be amended from time to time;
(c) "Book Capital Account" means, for any Holder of an Interest in a
particular Portfolio at any time, the Book Capital Account of the
Holder with respect to that Portfolio, maintained in accordance with
Article VIII, Section 8.1 hereof;
(d) "Bylaws" means the Bylaws referred to in Article IV, Section 4.1(e)
hereof, as from time to time amended;
<PAGE>
(e) "Code" means the Internal Revenue Code of 1986, as amended;
(f) "Covered Person" means every person who is, or has been, a Trustee
or an officer or employee of the Trust;
(g) 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;
(h) "Fiscal Year" means, with respect to any Portfolio, the annual
period that ends on December 31 of each year or such other annual
period as may be determined from time to time by the Trustees;
(i) "Holder" means a record owner of an Interest in a Portfolio;
(j) "Interest" means, with respect to each Portfolio, the beneficial
interest of a Holder in that Portfolio, including all rights,
powers, and privileges accorded to such Holders in this Agreement.
The Interest of a Holder in any particular Portfolio may be
expressed as a percentage, determined by calculating, at such times
and on such bases as the Trustees shall from time to time determine,
the ratio of the Holder's Book Capital Account balance to the total
Book Capital Account balances of all Holders in that Portfolio.
Reference herein to a specified percentage in, or fraction of, the
Interests of the Holders in a Portfolio means Holders whose combined
Book Capital Account balances represent such specified percentage or
fraction of the Book Capital Account balances of all Holders in that
Portfolio;
(k) "Liabilities," when used with respect to the Trust or a Portfolio,
means all debts, liabilities, obligations, expenses, costs, and
charges incurred, contracted for, or otherwise existing with respect
to the Trust or that Portfolio;
(l) "Majority Interests Vote" means "the vote of a majority of the
outstanding voting securities" (as defined in the 1940 Act) of the
Trust or Portfolio, as applicable;
(m) "Net Asset Value" means, with respect to any Portfolio, the amount
by which the assets belonging to that Portfolio exceed its
Liabilities, all as determined by or under the Trustees' direction;
(n) "Net Profits" of a Portfolio for any given time period means the
excess of its Net Asset Value at the close of business on the last
day of such period, prior to any distributions being made with
respect to such period, over its Net Asset Value as of the opening
of business on the first day of such period, after any contributions
made on such date; and "Net Losses" of a Portfolio for any given
time period means the excess of its Net Asset Value as of the
opening of business on the first day of such period, after any
contributions made on such date, over its Net Asset Value at the
close of business on the last day of such period, prior to any
distributions being made with respect to such period;
2
<PAGE>
(o) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time;
(p) "Portfolio" means a series of Interests in the Trust established in
accordance with the provisions of Article II, Section 2.3 hereof;
(q) The "Trust" means Global High Income Portfolio, the Delaware
business trust established hereby, and reference to the Trust, when
applicable to one or more Portfolios, shall refer to each such
Portfolio;
(r) The "Trustees" means the Persons who have signed this Agreement 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 Article III, Section 3.4 hereof or elected as
Trustee in accordance with the provisions of Article III, Section
3.6 hereof, and reference herein to a Trustee or to the Trustees
shall refer to such Persons in their capacity as Trustees hereunder;
and
(s) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account
of the Trust or any Portfolio, or the Trustees on behalf of the
Trust or any Portfolio.
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 Agreement.
Section 1.4. CERTIFICATE OF TRUST. Immediately upon the execution of this
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. INTERESTS. The beneficial interest in the Trust shall be
divided into an unlimited number of Interests. The Trustees may, from time to
time, authorize the division of the Interests into one or more series, each of
which constitutes a Portfolio, in accordance with Article II, Section 2.3 of
this Agreement. All Interests issued hereunder shall be fully paid and
nonassessable.
Section 2.2. ISSUANCE OF INTERESTS. The Trustees in their discretion may,
from time to time, without vote of the Holders, issue Interests, in addition to
the then issued and outstanding Interests, 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.
3
<PAGE>
Section 2.3. ESTABLISHMENT OF PORTFOLIOS. The Trust shall consist of one
or more separate and distinct Portfolios, each with an unlimited number of
Interests 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 Interests in 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 Interest in a Portfolio shall represent an equal beneficial interest in the
net assets belonging to that Portfolio. A Portfolio may have exclusive voting
rights with respect to matters affecting only that Portfolio.
Section 2.3.1. Subject to Article VI, Section 6.1 of this Agreement, the
Trustees shall have full power and authority, in their sole discretion without
obtaining any prior authorization or vote of the Holders of any Portfolio, to
establish and designate and to change in any manner any Portfolio; to fix such
preferences, voting powers, rights, and privileges of any Portfolio as the
Trustees may from time to time determine (but the Trustees may not change the
preferences, voting powers, rights, and privileges of Interests in a manner
materially adverse to the Holders of such Interests without the prior approval
of the affected Holders); and to take such other action with respect to the
Interests as the Trustees may deem desirable. A Portfolio may issue any number
of Interests but need not issue any Interests. At any time that there are no
Interests outstanding of any particular Portfolio previously established and
designated, the Trustees may abolish that Portfolio 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, Interests in each
Portfolio established hereunder shall have the following relative rights and
preferences:
(a) Holders shall have no preemptive or other right to subscribe to any
additional Interests or other securities issued by the Trust or the
Trustees, whether of the same or other Portfolio.
(b) All consideration received by the Trust for the issue or sale of
Interests in a particular Portfolio, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange, or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall be held and accounted for
separately from the other assets of the Trust and of every other
Portfolio and may be referred to herein as "assets belonging to"
that Portfolio. The assets belonging to a particular Portfolio shall
belong to that Portfolio for all purposes, and to no other
Portfolio, subject only to the rights of creditors of that
Portfolio. In addition, any assets, income, earnings, profits, or
funds, or payments and proceeds with respect thereto, which are not
4
<PAGE>
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.
(c) A particular Portfolio shall be charged with the Liabilities of that
Portfolio, and all Liabilities attributable to any particular
Portfolio shall be borne by such Portfolio. Any general Liabilities
of the Trust that are not readily identifiable as chargeable to any
particular Portfolio shall be allocated and charged by the Trustees
between or among any one or more of the Portfolios in such manner as
the Trustees in their sole discretion deem fair and equitable. Each
such allocation shall be conclusive and binding upon the Holders in
all Portfolios for all purposes. Without limitation of the foregoing
provisions of this Subsection 2.3.2, the Liabilities incurred,
contracted for or otherwise existing with respect to a particular
Portfolio shall be enforceable against the assets of such Portfolio
only, and not against the assets of the Trust generally or the
assets belonging to any other Portfolio. Notice of this contractual
limitation of inter-Portfolio liabilities shall be set forth in the
Certificate of Trust described in Article I, 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.
All references to Interests in this Agreement shall be deemed to be
Interests in any or all Portfolios as the context may require. All provisions
herein relating to the Trust shall apply equally to each Portfolio of the Trust,
except as the context otherwise requires.
Section 2.4. INVESTMENT IN THE TRUST; LIMITATION ON NUMBER OF HOLDERS.
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
such investment shall be credited to the individual Holder's account in the form
of full and fractional Interests in the Trust, in such Portfolio as the
purchaser shall select. The Trustees shall have the right to refuse to accept
investments in any Portfolio at any time without any cause or reason therefor
whatsoever. Notwithstanding anything herein to the contrary, (a) Interests shall
only be issued in a transaction or transactions not requiring registration under
the Securities Act of 1933 and (b) no Portfolio shall at any time have more than
100 Holders. In determining the number of Holders of any Portfolio, a person
owning an Interest through a partnership, grantor trust, or S corporation (a
"flow-through entity") shall be counted as a Holder if substantially all the
value of that person's interest in the flow-through entity is attributable to
that Portfolio and a principal purpose for using a tiered structure was to
satisfy the 100-Holder condition. The Trustees shall impose such other
limitations on investments in the Portfolios as are necessary to avoid having
5
<PAGE>
any Portfolio treated as a "publicly traded partnership" within the meaning of
Section 7704 of the Code.
Section 2.5. PERSONAL LIABILITY OF HOLDERS. As provided by applicable law,
no Holder of the Trust shall be personally liable for the Liabilities incurred
by, contracted for, or otherwise existing with respect to, the Trust or any
Portfolio. Neither the Trust nor the Trustees, nor any officer, employee, or
agent of the Trust shall have any power to bind personally any Holder or, except
as provided herein or by applicable law, to call upon any Holder for the payment
of any sum of money or assessment whatsoever other than such as the Holder may
at any time personally agree to pay by way of subscription for an Interest or
otherwise. The Holders shall be entitled, to the fullest extent permitted by
applicable law, to the same limitation of personal liability as is extended
under the Delaware General Corporation Law to stockholders of private
corporations for profit. Every note, bond, contract, or other undertaking issued
by or on behalf of the Trust or the Trustees relating to the Trust or to any
Portfolio thereof shall include a recitation limiting the obligation represented
thereby to the Trust and its assets or to one or more Portfolios thereof and the
assets belonging thereto (but the omission of such a recitation shall not
operate to bind any Holder or Trustee of the Trust).
Section 2.6. ASSENT TO AGREEMENT. Every Holder, by virtue of having
purchased an Interest, shall be held to have expressly assented to, and agreed
to be bound by, the terms hereof. The death of a Holder during the continuance
of the Trust shall not operate to terminate the same nor entitle the
representative of any deceased Holder 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 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 Agreement, the presumption
shall be in favor of a grant of power to the Trustees.
The enumeration of any specific power in this 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.
6
<PAGE>
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 at
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 Holders
of the Trust by a vote of the Holders owning at least two-thirds of the
Interests.
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 of such other person as they in their discretion
shall see fit, or may leave such vacancy unfilled or may reduce the number of
Trustees to not less than two (2) Trustees. Such appointment shall be evidenced
by a written instrument signed by a majority of the Trustees in office or by
resolution of the Trustees, duly adopted, which shall be recorded in the minutes
of a meeting of the Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation, or
removal of a Trustee or an increase in number of Trustees effective at 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 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
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Holders 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 Holder shall be deemed to
have a severable ownership in any individual asset of the Trust or belonging to
any Portfolio or any right of partition or possession thereof, but each Holder
shall have, except as otherwise provided for herein, a proportionate undivided
beneficial interest in the Trust or the assets belonging to the Portfolio in
which the Holder holds an Interest. The Interests shall be personal property
giving only the rights specifically set forth in this 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 Holders. 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
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;
(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;
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(d) To provide for the distribution of Interests either through a
placement agent or by the Trust itself, or both;
(e) To adopt Bylaws not inconsistent with this 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
Holders; such Bylaws shall be deemed incorporated and included in
this 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 Agreement or in the Bylaws;
(h) To set record dates in the manner provided herein or in the Bylaws;
(i) To delegate such authority as they consider desirable to any
officers of the Trust and to any investment adviser, manager,
administrator, custodian, placement agent, or other agent or
independent contractor;
(j) To sell or exchange any or all of the assets of the Trust, subject
to the provisions of Article VI, Section 6.1 hereof;
(k) 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;
(l) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(m) 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 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;
(n) 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;
(o) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities, and expenses of the Trust to a
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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;
(p) 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 contract, 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;
(q) 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;
(r) To make distributions of income and of capital gains and capital to
Holders in the manner hereinafter provided;
(s) To establish, from time to time, a minimum investment for Holders in
the Trust or in one or more Portfolios, and to require the
redemption of the Interests of any Holder whose investment is less
than such minimum upon giving notice to such Holder;
(t) Subject to the requirements of the 1940 Act, 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 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;
(u) To interpret the investment policies, practices or limitations of
any Portfolios;
(v) To establish a registered office and have a registered agent in the
State of Delaware; and
(w) 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,
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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.
Section 4.2. ISSUANCE AND REPURCHASE OF INTERESTS. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, and otherwise deal in Interests and, subject to the
provisions set forth in Articles II and VII, to apply to any such repurchase,
redemption, retirement, cancellation, or acquisition of Interests any funds or
property of the Trust, or any assets belonging to the particular Portfolio with
respect to which such Interests 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
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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 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, administrator, 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 any
Portfolio, 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, as they deem fair, all fees, taxes, and Liabilities incurred or
arising in connection with the Trust or Portfolio, 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, auditors, counsel,
custodian, and such other agents or independent contractors and such other
expenses and charges as the Trustees may deem necessary or proper to incur.
Section 4.6. TRUSTEE COMPENSATION. The Trustees as such shall be entitled
to reasonable compensation from the Trust. They may fix the amount of their
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, administrative, legal, accounting, investment
banking, underwriting, brokerage, or investment dealer or other services and the
payment for the same by the Trust.
ARTICLE V
INVESTMENT ADVISER AND OTHER SERVICE PROVIDERS
Section 5.1. INVESTMENT ADVISER. Subject to the approval of Shareholders
as required by Article VI, Section 6.1, 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 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 an principal underwriter, transfer agent, administrator,
custodian, and similar service providers.
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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 Holders,
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, placement agent, 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 Holder or has an interest
in the Trust, or that (ii) any Company with which an advisory or administration
contract or placement agent, custodian, or other agency contract may have been
or may hereafter be made also has an advisory or administration contract, or
placement agent, custodian, 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 Holder, Trustee, or officer of the Trust
from voting upon or executing the same or create any liability or accountability
to the Trust or its Holders.
ARTICLE VI
HOLDERS' VOTING POWERS AND MEETING
Section 6.1. VOTING POWERS. The Holders 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 as provided in Article X, Section 10.3,
(5) amendment of this Agreement only as provided in Article X, Section 10.7, (6)
the sale of all or substantially all the assets of the Trust or of the assets
belonging to any Portfolio, 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 with and into another
Company or portfolio, 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 Interests outstanding as of a date selected by the Trustees, the
Holders of the Trust or such portfolio will have a majority of the outstanding
interests of the surviving Company or Portfolio, 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 Interests are issued, the Trustees may exercise all rights of
Holders and may make any action required or permitted by law, this Agreement or
any of the Bylaws of the Trust to be taken by Holders.
On any matter submitted to a vote of the Holders, all Interests 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, then
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only the Holders of all such Portfolios shall be entitled to vote thereon. The
vote necessary to approve any such matter shall be set forth in this Agreement
or in the Bylaws.
ARTICLE VII
INCREASES, DECREASES, AND REDEMPTIONS OF INTERESTS
Section 1. INCREASES. Subject to the provisions hereof and such
restrictions as the Trustees, in their sole discretion, may from time to time
adopt, each Holder may increase its investment in any Portfolio at any time
without limitation. An increase in a Holder's investment in any Portfolio shall
be reflected as an increase in the Holder's Book Capital Account balance with
respect to that Portfolio and shall be included in its Interest therein.
Section 2. DECREASES AND REDEMPTIONS. Each Holder may decrease its
investment in any Portfolio or redeem its entire Interest in any Portfolio
(I.E., completely withdraw therefrom) at any time, on such terms and conditions
as the Trustees, in their sole discretion, may from time to time determine,
subject to any applicable provisions of the 1940 Act. A decrease in or
redemption of a Holder's investment in any Portfolio shall be reflected as a
decrease in the Holder's Book Capital Account balance with respect to that
Portfolio and shall be deducted from its Interest therein. Subject to the
foregoing, the Trust shall, on appropriate and adequate notice from a Holder,
decrease or redeem the Holder's Interest for an amount (which shall be treated
as a distribution for purposes of Article VIII, Section 8.1) determined by
applying a formula adopted for such purpose by resolution of the Trustees;
provided that (a) such amount shall not exceed the smaller of (i) the decrease
in the Holder's Book Capital Account balance effected by such decrease or
redemption and (ii) the positive balance in the Holder's Book Capital Account
(determined after taking into account such adjustments as are required by
Treasury Regulation ss. 1.704-1(b)(2)(ii)(b)(2) but before reduction thereof to
reflect the distribution of such amount) and (b) if so authorized by the
Trustees, the Trust may, at any time and from time to time, (i) charge fees for
effecting any such decrease or redemption, at such rates as the Trustees in
their sole discretion may establish, and (ii) suspend such right of decrease or
redemption. The procedures for effecting decreases or redemptions shall be as
determined by the Trustees from time to time.
ARTICLE VIII
BOOK CAPITAL ACCOUNTS; NET ASSET VALUE;
ALLOCATIONS AND DISTRIBUTIONS
Section 8.1. BOOK CAPITAL ACCOUNTS. (a) A Book Capital Account shall be
maintained for each Holder of each Portfolio. With respect to each Portfolio,
each Holder's Book Capital Account (i) shall be credited with the amount(s) of
consideration paid by the Holder to purchase or increase its Interest in that
Portfolio and with the Holder's share of that Portfolio's Net Profits, (ii)
shall be charged with the Holder's share of that Portfolio's Net Losses,
distributions to the Holder, and withholding taxes (if any), and (iii) shall
otherwise appropriately reflect transactions of that Portfolio and its Holders.
No interest shall be paid on any amount of consideration paid to the Trust to
purchase or increase Interests.
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(b) The Book Capital Account balances of Holders of each Portfolio shall
be determined periodically at such time or times as the Trustees may determine.
The power and duty to make calculations necessary to determine such balances may
be delegated by the Trustees to an investment adviser, custodian, or such other
person as the Trustees may determine.
(c) Notwithstanding anything herein to the contrary, the Book Capital
Accounts and any related accounts (including without limitation tax capital
accounts and revaluation accounts) of the Holders and of any Portfolio shall at
all times during the full term of that Portfolio be determined and maintained in
accordance with the requirements of Treasury Regulation ss. 1.704-1(b)(2)(iv).
The Trustees are authorized to prescribe, in their sole discretion, such
policies for the establishment and maintenance of such accounts ("Policies") as
they, in consultation with the Trust's professional advisers, consider to be in
accordance with such requirements.
Section 8.2. NET ASSET VALUE. In making a determination of Net Asset
Value, the Trustees, without Holder approval, may alter the method of valuing
portfolio securities insofar as permitted under the 1940 Act and the rules,
regulations, and interpretations thereof promulgated or issued by the Commission
or any applicable order of the Commission. The Trustees may delegate any of
their powers and duties under this Section with respect to the valuation of
assets and liabilities.
Section 8.3. ALLOCATION OF NET PROFITS AND NET LOSSES. (a) As of the close
of business each day, the Net Profits and Net Losses of each Portfolio shall be
determined and allocated to and among the Holders of that Portfolio in
proportion to their respective Interests in that Portfolio, determined as of the
opening of business on that day.
(b) Except as otherwise provided in this Section, for each taxable year of
a Portfolio, all items of income, gain, loss, deduction, and credit that are
recognized by that Portfolio for tax purposes shall be allocated pursuant to
Treasury Regulation ss. 1.704-1(b) in a manner that equitably reflects amounts
credited or debited to the Book Capital Account of each Holder of that Portfolio
for such year. Allocations of such items also shall be made, where appropriate,
in accordance with Section 704(c) of the Code and the regulations thereunder, as
may be provided in any Policies adopted by the Trustees pursuant to Article
VIII, Section 8.1(c).
(c) Expenses of a Portfolio, if any, that are borne by any Holder of that
Portfolio in its individual capacity shall be specially allocated to the Holder.
(d) Notwithstanding anything to the contrary in the preceding paragraphs
(b) or (c), if any Holder of a Portfolio unexpectedly receives any adjustments,
allocations, or distributions described in Treasury Regulation ss.ss.
1.704-1(b)(2)(II)(D)(4), (5), OR (6), items of income (including gross income)
and gain of that Portfolio shall be specially allocated to the Holder in an
amount and manner sufficient to eliminate the deficit balance in the Holder's
Book Capital Account (as determined in accordance with Treasury Regulation ss.
1.704-1(b)(2)(ii)(d)) created by such adjustments, allocations, or distributions
as quickly as possible. Any special allocations of income and gain of a
Portfolio pursuant to this paragraph shall be taken into account in computing
subsequent allocations of income and gain of that Portfolio pursuant to this
Article, so that the net amount of any items of that Portfolio so allocated and
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the income, gain, loss, deductions, and other items of that Portfolio allocated
to each Holder pursuant to this Article shall, to the extent possible, equal the
net amount that would have been allocated to each such Holder pursuant to this
Article if such special allocations had not been made.
Section 8.4. DISTRIBUTIONS. The Trustees may from time to time determine
to pay distributions to Holders of a Portfolio. The amount of such distributions
and the payment of them and whether they are paid in cash or in any other assets
belonging to a Portfolio shall be determined wholly in the Trustees' sole
discretion.
Section 8.5. POWER TO MODIFY ARTICLE. Notwithstanding any foregoing
provision of this Article, the Trustees may prescribe, in their sole discretion,
such other bases and times for determining, for financial reporting and/or tax
accounting purposes, (a) the Net Profits, Net Losses, taxable income, tax loss,
and/or net assets of any Portfolio (or, where appropriate in the Trustees' sole
judgment, of the Trust as a whole) and/or (b) the allocation of the Net Profits
or Net Losses and taxable income or tax loss so determined among, or the payment
of distributions to, the Holders of any Portfolio as they deem necessary or
desirable to enable the Trust or any Portfolio to comply with any provision of
the 1940 Act, the Code, any rule or regulation thereunder, or any order of
exemption issued by the Commission or any ruling issued by the Internal Revenue
Service, all as in effect now or as hereafter amended or modified.
ARTICLE IX
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 9.1. 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 Holders 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 9.2. 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 9.3. INDEMNIFICATION OF HOLDERS. In case any Holder or former
Holder of the Trust shall be held to be personally liable solely by reason of
his being or having been a Holder of the Trust or any Portfolio and not because
of his acts or omissions or for some other reason, the Holder or former Holder
(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, 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, shall, upon request by the Holder, assume the
defense of any claim made against the Holder for any act or obligation of that
Portfolio.
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ARTICLE X
MISCELLANEOUS
Section 10.1. TRUST NOT A PARTNERSHIP, EXCEPT FOR INCOME TAX PURPOSES; TAX
MATTERS PARTNER. (a) This Agreement creates a trust and not a partnership, and
no Trustee shall have any power to bind personally either the Trust's officers
or any Holder. Notwithstanding the foregoing, it is intended that the Trust, or
each Portfolio if there is more than one Portfolio, be classified as a
partnership for income tax purposes, 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
Holders, may amend this Agreement to ensure that this objective is achieved.
(b) The Trustees annually shall designate for each Portfolio a "Tax
Matters Partner" under Section 6231(a)(7) of the Code. A Portfolio's Tax Matters
Partner shall have all the powers and responsibilities of such position as
provided in the Code, provided it (1) shall promptly furnish the Internal
Revenue Service with information sufficient to cause each Holder in that
Portfolio to be treated as a "notice partner" as defined in Section 6231(a)(8)
of the Code, (2) shall not file any action or suit or extend any statute of
limitations relating to Portfolio tax matters without first notifying each such
Holder and obtaining the consent of Holders owning more than 50% of all
Interests in that Portfolio, and (3) shall not settle any action or suit
relating to Portfolio tax matters without first notifying all Holders in that
Portfolio and obtaining the consent of Holders owning at least 75% of all
Interests therein. Reasonable expenses incurred by the Tax Matters Partner, in
its capacity as such, will be treated as Portfolio expenses. Any Holder in a
Portfolio shall have the right to participate in any administrative proceedings
relating to the determination of partnership tax items at that Portfolio's
level.
Section 10.2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretion hereunder in
good faith and with reasonable care under the circumstances then prevailing
shall be binding upon everyone interested. Subject to the provisions of Article
IX hereof and to Section 10.1 of this Article X, 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 Agreement, and subject to the provisions of Article IX hereof and Section
10.1 of this Article X, 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 10.3. TERMINATION OF TRUST OR PORTFOLIO. (a) The Trust or any
Portfolio may be terminated by (1) a Majority Interests Vote of the Trust or the
affected Portfolio, respectively, or (2) if there are fewer than 100 Holders of
record of the Trust or of such terminating Portfolio, the Trustees pursuant to
written notice to the Holders of the Trust or the affected Portfolio .
(b) On termination of the Trust or any Portfolio pursuant to paragraph
(a),
17
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(1) the Trust or that Portfolio 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, and all powers of the Trustees under this 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, 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 Holders of the Trust or
that Portfolio.
(c) On completion of distribution of the remaining assets pursuant to
paragraph (b), the Trust or the affected Portfolio 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 10.4. SALE OF ASSETS; MERGER AND CONSOLIDATION. Subject to Article
VI, Section 6.1, the Trustees may cause (i) the Trust or one or more of its
Portfolios to the extent consistent with applicable law to sell all or
substantially all of its assets, or be merged into or consolidated with another
business trust or Company, (ii) the Interests in the Trust or any Portfolio to
be converted into beneficial interests in another business trust (or series
thereof) created pursuant to this Section 10.4 of Article X, or (iii) the
Interests 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 Interests in the Trust or any
Portfolio into beneficial interests in such separate business trust or trusts
(or series or class thereof).
Section 10.5. FILING OF COPIES, REFERENCES, HEADINGS. The original or a
copy of this Agreement, or any amendment hereto or supplemental to this
Agreement shall be kept at the office of the Trust where it may be inspected by
any Holder. In this Agreement or in any such amendment or supplemental
Agreement, references to this Agreement, and all expressions like "herein,"
"hereof," and "hereunder," shall be deemed to refer to this Agreement as amended
or affected by any such supplemental Agreement. All expressions like "his,"
18
<PAGE>
"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 Agreement, rather than the
headings, shall control. This Agreement may be executed in any number of
counterparts each of which shall be deemed an original.
Section 10.6. GOVERNING LAW. The Trust and this Agreement, and the rights,
obligations and remedies of the Trustees and Holders 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 Holders 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 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 10.7. AMENDMENTS. Except as specifically provided herein, the
Trustees may, without any Holder vote, amend this Agreement by making an
amendment, an Agreement supplemental hereto, or an amended and restated
Agreement. Any amendment submitted to Holders that the Trustees determine would
affect the Holders of less than all Portfolios shall be authorized by vote of
only the Holders of the affected Portfolio(s), and no vote shall be required of
Holders of any Portfolio 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
Holders or former Holders, and any repeal or amendment of this sentence shall
each require the affirmative vote of Holders owning at least two-thirds of the
Interests entitled to vote thereon. A certification signed by a majority of the
19
<PAGE>
Trustees setting forth an amendment to this Agreement and reciting that it was
duly adopted by the Holders or by the Trustees as aforesaid, or a copy of this
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 10.8. PROVISIONS IN CONFLICT WITH LAW. The provisions of this
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
Agreement; provided, however, that such determination shall not affect any of
the remaining provisions of this Agreement or render invalid or improper any
action taken or omitted prior to such determination. If any provision of this
Agreement shall be held invalid or enforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any other
jurisdiction or any other provision of this Agreement in any jurisdiction.
Section 10.9. HOLDERS' RIGHT TO INSPECT HOLDER LIST. One or more Persons
who together and for at least six months have been Holders of at least five
percent (5%) of the outstanding Interests of any Portfolio may present to any
officer or resident agent of the Trust a written request for a list of its
Holders. 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 Holder and the number of Interests of that
Portfolio that the Holder holds. The rights provided for herein shall not extend
to any Person who is a beneficial owner but not also a record owner of Interests
in the Trust.
20
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IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument this 7th day of May, 1998.
/s/ William J. Guilfoyle
-------------------------
William J. Guilfoyle,
as Trustee
/s/ C. Derek Anderson
-------------------------
C. Derek Anderson,
as Trustee
/s/ Frank S. Bayley
-------------------------
Frank S. Bayley,
as Trustee
/s/ Ruth H. Quigley
-------------------------
Ruth H. Quigley,
as Trustee
/s/ Arthur C. Patterson
-----------------------
Arthur C. Patterson,
as Trustee
21
<PAGE>
SCHEDULE A
Global High Income Portfolio has no Portfolios.
Date: May 7, 1998
22
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF TRUST
OF
GLOBAL HIGH INCOME PORTFOLIO
This Certificate of Amendment to the Certificate of Trust of Global High
Income Portfolio ("Trust"), a business trust registered under the Investment
Company Act of 1940, as amended, is being duly executed and filed on behalf of
the Trust by the undersigned, a trustee of the Trust, to amend the name of the
Trust pursuant to the Delaware Business Trust Act (12 DEL. C. ss. 3801 eT Seq.).
The Trust's Certificate of Trust was filed in the Office of the Secretary of
State of the State of Delaware on May 7, 1998.
ARTICLE I
---------
The name of the Trust is hereby changed from "Global High Income
Portfolio" to "Emerging Markets Debt Portfolio." Article I of the Certificate of
Trust is hereby amended to read as follows:
The name of the business trust formed hereby is "Emerging Markets
Debt Portfolio" (the "Trust").
ARTICLE II
----------
This Certificate of Amendment shall become effective on September 8, 1998.
ARTICLE III
-----------
The Trust Instrument relating to the Trust provides for the issuance of
one or more series of shares of beneficial interest in the Trust. Separate and
distinct records shall be maintained by the Trust for each series and the assets
associated solely with any such series shall be held and accounted for
separately from the assets of the Trust associated solely with any other series.
As provided in the Trust Instrument, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series shall be enforceable against the assets of such series only,
and not against the assets of the Trust generally.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment of the Certificate of Trust of Global High Income Portfolio as of this
1st day of September, 1998.
/s/ Robert H. Graham
--------------------
Robert H. Graham, as Trustee
BYLAWS
OF
GLOBAL HIGH INCOME PORTFOLIO,
A DELAWARE BUSINESS TRUST
ADOPTED EFFECTIVE MAY 7, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I OFFICES..............................................................1
Section 1. Registered Office...............................................1
Section 2. Other Offices...................................................1
ARTICLE II TRUSTEES............................................................1
Section 1. Number..........................................................1
Section 2. Term............................................................1
Section 3. Vacancy.........................................................1
Section 4. Delegation of Power.............................................2
Section 5. Inability to Serve Full Term....................................2
Section 6. Powers..........................................................2
Section 7. Meetings of the Trustees........................................3
Section 8. Regular Meetings................................................3
Section 9. Quorum..........................................................3
Section 10. Action Without Meeting..........................................3
Section 11. Designation, Powers, and Name of Committees.....................4
Section 12. Minutes of Committee............................................4
Section 13. Compensation of Trustees........................................4
ARTICLE III OFFICERS...........................................................4
Section 1. Executive Officers..............................................4
Section 2. Term of Office..................................................5
Section 3. President.......................................................5
Section 4. Chairman of the Board...........................................5
Section 5. Other Officers..................................................5
Section 6. Secretary.......................................................5
Section 7. Treasurer.......................................................6
Section 8. Surety Bond.....................................................6
ARTICLE IV MEETINGS OF SHAREHOLDERS............................................6
Section 1. Purpose.........................................................6
Section 2. Nominations of Trustees.........................................7
Section 3. Election of Trustees............................................7
Section 4. Notice of Meetings..............................................7
Section 5. Special Meetings................................................7
Section 6. Notice of Special Meeting.......................................7
Section 7. Conduct of Special Meeting......................................7
Section 8. Quorum..........................................................7
Section 9. Organization of Meetings........................................8
Section 10. Voting Standard.................................................8
Section 11. Voting Procedure................................................8
Section 12. Action Without Meeting..........................................9
i
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ARTICLE V NOTICES..............................................................9
Section 1. Methods of Giving Notice........................................9
Section 2. Written Waiver.................................................10
ARTICLE VI GENERAL PROVISIONS.................................................10
Section 1. Dividends and Distributions....................................10
Section 2. Redemptions....................................................10
Section 3. Indemnification................................................11
Section 4. Advance Payments of Indemnifiable Expenses.....................11
Section 5. Seal...........................................................11
Section 6. Severability...................................................11
Section 7. Headings.......................................................11
ARTICLE VII AMENDMENTS........................................................12
Section 1. Amendments.....................................................12
ii
<PAGE>
BYLAWS
OF
GLOBAL HIGH INCOME PORTFOLIO,
A DELAWARE BUSINESS TRUST
Capitalized terms not specifically defined herein
shall have the meanings ascribed to them in the Trust's
Agreement and Declaration of Trust ("Agreement").
ARTICLE I
OFFICES
Section 1. REGISTERED OFFICE. The registered office of Global High
Income Portfolio (the "Trust") shall be in the County of New Castle, State of
Delaware.
Section 2. OTHER OFFICES. The Trust may also have offices at such other
places both within and without the State of Delaware as the Trustees may from
time to time determine or the business of the Trust may require.
ARTICLE II
TRUSTEES
Section 1. NUMBER. The number of Trustees shall initially be five, and
thereafter shall be such number as shall be fixed from time to time by
resolution of the Board of Trustees; provided, however, that the number of
Trustees shall in no event be less than two nor more than twelve.
Section 2. TERM. The Trustees shall hold office during the lifetime of
the Trust, 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 at 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
Holders of the Trust.
Section 3. VACANCY. 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, a vacancy shall
occur. Whenever a vacancy in the Trustees shall occur, until such vacancy is
<PAGE>
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
appointing 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 Trustees. Such appointment shall be evidenced by a written instrument
signed by a majority of the Trustees in office or by resolution of the Trustees,
duly adopted, which shall be recorded in the minutes of a meeting of the
Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to Sections 2 and 3 of Article II of these Bylaws, or
elected pursuant to Section 3 of Article IV, and the Agreement 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 4. DELEGATION OF POWER. 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 5. INABILITY TO SERVE FULL TERM. 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 the Agreement.
Section 6. POWERS. 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 the 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 foreign jurisdiction 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 these Bylaws and the Agreement, the presumption
shall be in favor of a grant of power to the Trustees.
Section 7. MEETINGS OF THE TRUSTEES. The Trustees of the Trust may hold
meetings, both regular and special, either within or without the State of
Delaware.
2
<PAGE>
Section 8. REGULAR MEETINGS. Regular meetings of the Board of Trustees
shall be held each year, at such time and place as the Board of Trustees may
determine.
Section 9. NOTICE OF MEETINGS. 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.
Section 10. QUORUM. At all meetings of the Trustees, a majority of the
Trustees then in office (but in no event less than two Trustees) shall
constitute a quorum for the transaction of business and the act of a majority of
the Trustees present at any meeting at which there is a quorum shall be the act
of the Board of Trustees, except as may be otherwise specifically provided by
applicable law or by the Agreement or these Bylaws. If a quorum shall not be
present at any meeting of the Board of Trustees, the Trustees present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 11. ACTION WITHOUT MEETING. Unless otherwise restricted by the
Agreement or these Bylaws, any action required or permitted to be taken at any
meeting of the Board of Trustees or of any committee thereof may be taken
without a meeting by unanimous written consent of the Trustees or committee
members (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) and the writing or writings are filed with the minutes of
proceedings of the board or committee.
Section 12. DESIGNATION, POWERS, AND NAME OF COMMITTEES. The Board of
Trustees may, by resolution passed by a majority of the whole Board, designate
one or more committees, each committee to consist of two or more of the Trustees
of the Trust. The Board may designate one or more Trustee as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of such committee. Each committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Trustees in
the management of the business and affairs of the Trust; provided, however, that
in the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such members constitute a quorum, may
unanimously appoint another member of the Board of Trustees to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Trustees.
Section 13. MINUTES OF COMMITTEE. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Trustees when
required.
3
<PAGE>
Section 14. COMPENSATION OF TRUSTEES. The Trustees as such shall be
entitled to reasonable compensation for their services as determined from time
to time by the Board of Trustees. Nothing herein shall in any way prevent the
employment of any Trustee for advisory, management, administrative, legal,
accounting, investment banking, underwriting, brokerage, or investment dealer or
other services and the payment for the same by the Trust.
ARTICLE III
OFFICERS
Section 1. EXECUTIVE OFFICERS. The initial executive officers of the
Trust shall be elected by the Board of Trustees as soon as practicable after the
organization of the Trust. The executive officers may include a Chairman of the
Board, and shall include a President, one or more Vice Presidents (the number
thereof to be determined by the Board of Trustees), a Secretary and a Treasurer.
The Chairman of the Board, if any, shall be selected from among the Trustees.
The Board of Trustees may also in its discretion appoint Assistant Vice
Presidents, Assistant Secretaries, Assistant Treasurers, and other officers,
agents and employees, who shall have such authority and perform such duties as
the Board may determine. The Board of Trustees may fill any vacancy which may
occur in any office. Any two offices, except for those of President and Vice
President, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument on behalf of the Trust in more than one
capacity, if such instrument is required by law or by these Bylaws to be
executed, acknowledged or verified by two or more officers.
Section 2. TERM OF OFFICE. Unless otherwise specifically determined by
the Board of Trustees, the officers shall serve at the pleasure of the Board of
Trustees. If the Board of Trustees in its judgment finds that the best interests
of the Trust will be served, the Board of Trustees may remove any officer of the
Trust at any time with or without cause. The Trustees may delegate this power to
the President with respect to any other officer. Such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Any officer
may resign from office at any time by delivering a written resignation to the
Trustees or the President. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
Section 3. PRESIDENT. The President shall be the chief executive
officer of the Trust and, subject to the Board of Trustees, shall generally
manage the business and affairs of the Trust. If there is no Chairman of the
Board, or if the Chairman of the Board has been appointed but is absent, the
President shall, if present, preside at all meetings of the Holders and the
Board of Trustees.
Section 4. CHAIRMAN OF THE BOARD. The Chairman of the Board, if any,
shall preside at all meetings of the Holders and the Board of Trustees, if the
Chairman of the Board is present. The Chairman of the Board shall have such
other powers and duties as shall be determined by the Board of Trustees, and
shall undertake such other assignments as may be requested by the President.
4
<PAGE>
Section 5. OTHER OFFICERS. The Chairman of the Board or one or more
Vice Presidents shall have and exercise such powers and duties of the President
in the absence or inability to act of the President, as may be assigned to them,
respectively, by the Board of Trustees or, to the extent not so assigned, by the
President. In the absence or inability to act of the President, the powers and
duties of the President not otherwise assigned by the Board of Trustees or the
President shall devolve upon the Chairman of the Board, or in the Chairman's
absence, the Vice Presidents in the order of their election.
Section 6. SECRETARY. The Secretary shall (a) have custody of the seal
of the Trust; (b) attend meetings of the shareholders, the Board of Trustees,
and any committees of Trustees and keep the minutes of such meetings of Holders,
Board of Trustees and any committees thereof; and (c) issue all notices of the
Trust. The Secretary shall have charge of the Holder records and such other
books and papers as the Board may direct, and shall perform such other duties as
may be incidental to the office or which are assigned by the Board of Trustees.
The Secretary shall also keep or cause to be kept a Holder book, which may be
maintained by means of computer systems, containing the names, alphabetically
arranged, of all persons who are Holders, showing their places of residence, the
number and class or series of any class of shares of beneficial interest held by
them, respectively, and the dates when they became the record owners thereof,
and such book shall be open for inspection as prescribed by the laws of the
State of Delaware.
Section 7. TREASURER. The Treasurer shall have the care and custody of
the funds and securities of the Trust and shall deposit the same in the name of
the Trust in such bank or banks or other depositories, subject to withdrawal in
such manner as these Bylaws or the Board of Trustees may determine. The
Treasurer shall, if required by the Board of Trustees, give such bond for the
faithful discharge of duties in such form as the Board of Trustees may require.
Section 8. SURETY BOND. The Trustees may require any officer or agent
of the Trust to execute a bond (including, without limitation, any bond required
by the Investment Company Act of 1940, as amended ("1940 Act") and the rules and
regulations of the Securities and Exchange Commission ("Commission") to the
Trust in such sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his or her duties to the
Trust, including responsibility for negligence and for the accounting of any of
the Trust's property, funds, or securities that may come into his or her hands.
ARTICLE IV
MEETINGS OF HOLDERS
Section 1. PURPOSE. All meetings of the Holders for the election of
Trustees shall be held at such place as may be fixed from time to time by the
Trustees, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Trustees and stated in the
notice indicating that a meeting has been called for such purpose. Meetings of
Holders may be held for any purpose determined by the Trustees and may be held
at such time and place, within or without the State of Delaware as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
5
<PAGE>
thereof. At all meetings of the Holders, every Holder of record entitled to vote
thereat shall be entitled to vote at such meeting either in person or by written
proxy signed by the Holder or by his duly authorized attorney in fact. A Holder
may duly authorize such attorney in fact through written, electronic,
telephonic, computerized, facsimile, telecommunication, telex or oral
communication or by any other form of communication. Unless a proxy provides
otherwise, such proxy is not valid more than eleven months after its date. A
proxy with respect to shares held in the name of two or more persons shall be
valid if executed by any one of them unless at or prior to exercise of the proxy
the Trust receives a specific written notice to the contrary from any one of
them. A proxy purporting to be executed by or on behalf of a Holder shall be
deemed valid unless challenged at or prior to its exercise and the burden of
proving invalidity shall rest on the challenger.
Section 2. NOMINATIONS OF TRUSTEES. Nominations of individuals for
election to the board of trustees shall be made by the Board of Trustees or a
nominating committee of the Board of Trustees, if one has been established (the
"Nominating Committee"). Any Holder of the Trust may submit names of individuals
to be considered by the Nominating Committee or the Board of Trustees, as
applicable, provided, however, (i) that such person was a Holder of record at
the time of submission of such names and is entitled to vote at the meeting, and
(ii) that the Nominating Committee or the Board of Trustees, as applicable,
shall make the final determination of persons to be nominated.
Section 3. ELECTION OF TRUSTEES. All meetings of Holders for the
purpose of electing Trustees shall be held on such date and at such time as
shall be designated from time to time by the Trustees and stated in the notice
of the meeting, at which the Holders shall elect by a plurality vote any number
of Trustees as the notice for such meeting shall state are to be elected, and
transact such other business as may properly be brought before the meeting in
accordance with Section 1 of this Article IV.
Section 4. NOTICE OF MEETINGS. Written notice of any meeting stating
the place, date, and hour of the meeting shall be given to each Holder entitled
to vote at such meeting not less than ten days before the date of the meeting in
accordance with Article V hereof.
Section 5. SPECIAL MEETINGS. Special meetings of the Holders, for any
purpose or purposes, unless otherwise prescribed by applicable law or by the
Agreement, may be called by any Trustee; provided, however, that the Trustees
shall promptly call a meeting of the Holders solely for the purpose of removing
one or more Trustees, when requested in writing so to do by the record Holders
of not less than ten percent of the outstanding Interest in the Trust.
Section 6. NOTICE OF SPECIAL MEETING. Written notice of a special
meeting stating the place, date, and hour of the meeting and the purpose of
purposes for which the meeting is called, shall be given not less than ten days
before the date of the meeting, to each Holder entitled to vote at such meeting.
Section 7. CONDUCT OF SPECIAL MEETING. Business transacted at any
special meeting of Holders shall be limited to the purpose stated in the notice.
Section 8. QUORUM. The Holders of one-third of the Interests that are
issued and outstanding and entitled to vote thereat, present in person or
6
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represented by proxy, shall constitute a quorum at all meetings of the Holders
for the transaction of business except as otherwise provided by applicable law
or by the Agreement. If, however, such quorum shall not be present or
represented at any meeting of the Holders, the vote of the Holders of a majority
of Interests cast shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting, at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 9. ORGANIZATION OF MEETINGS.
(a) The Chairman of the Board of Trustees shall preside at each meeting
of Holders. In the absence of the Chairman of the Board, the meeting shall be
chaired by the President, or if the President shall not be present, by a Vice
President. In the absence of all such officers, the meeting shall be chaired by
a person elected for such purpose at the meeting. The Secretary of the Trust, if
present, shall act as Secretary of such meetings, or if the Secretary is not
present, an Assistant Secretary of the Trust shall so act, and if no Assistant
Secretary is present, then a person designated by the Secretary of the Trust
shall so act, and if the Secretary has not designated a person, then the meeting
shall elect a secretary for the meeting.
(b) The Board of Trustees of the Trust shall be entitled to make such
rules and regulations for the conduct of meetings of Holders as it shall deem
necessary, appropriate or convenient. Subject to such rules and regulations of
the Board of Trustees, if any, the chairman of the meeting shall have the right
and authority to prescribe such rules, regulations and procedures and to do all
such acts as, in the judgment of such chairman, are necessary, appropriate or
convenient for the proper conduct of the meeting, including, without limitation,
establishing: an agenda or order of business for the meeting; rules and
procedures for maintaining order at the meeting and the safety of those present;
limitations on participation in such meeting to Holders of record of the Trust
and their duly authorized and constituted proxies, and such other persons as the
chairman shall permit; restrictions on entry to the meeting after the time fixed
for the commencement thereof; limitations on the time allotted to questions or
comments by participants; and regulation of the opening and closing of the polls
for balloting on matters which are to be voted on by ballot, unless and to the
extent the Board of Trustees or the chairman of the meeting determines that
meetings of Holders shall not be required to be held in accordance with the
rules of parliamentary procedure.
Section 10. VOTING STANDARD. When a quorum is present at any meeting,
the vote of the Holders of a majority of the Interests cast shall decide any
question brought before such meeting, unless the question is one on which, by
express provision of applicable law, the Agreement, these Bylaws, or applicable
contract, a different vote is required, in which case such express provision
shall govern and control the decision of such question.
Section 11. VOTING PROCEDURE. Each Interest shall be entitled to vote
in proportion to its share in the Trust. On any matter submitted to a vote of
the Holders, the Interests 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 Holders of such
Portfolios (or Classes) shall be entitled to vote thereon.
7
<PAGE>
Section 12. ACTION WITHOUT MEETING. Unless otherwise provided in the
Agreement or applicable law, any action required to be taken at any meeting of
Holders of the Trust, or any action which may be taken at any meeting of such
Holders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the Holders of outstanding Interests having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all Interests entitled to vote thereon were present and voted.
Prompt notice of the taking of any such action without a meeting by less than
unanimous written consent shall be given to those Holders who have not consented
in writing.
Section 13. FIXING RECORD DATE. In order that the Trustees may
determine the Holders entitled to notice of or to vote at any meeting of Holders
or any adjournment thereof, or to express consent to action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution of
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of beneficial interests or for the purpose of any
other lawful action, the Board of Trustees may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Trustees, and which record date shall not be more
than ninety nor less than ten days before the date of such meeting, nor more
than ten days after the date upon which the resolution fixing the record date is
adopted by the Board of Trustees for action by Holder consent in writing without
a meeting, nor more than ninety days prior to any other action. A determination
of Holders of record entitled to notice of or to vote at a meeting of Holders
shall apply to any adjournment of the meeting; provided, however, that the Board
of Trustees may fix a new record date for the adjourned meeting.
ARTICLE V
NOTICES
Section 1. METHODS OF GIVING NOTICE. Whenever, under the provisions of
applicable law or of the Agreement or of these Bylaws, notice is required to be
given to any Trustee or Holder, it shall not, unless otherwise provided herein,
be construed to mean personal notice, but such notice may be given orally in
person, or by telephone (promptly confirmed in writing) or in writing, by mail
addressed to such Trustee or Holder, at his address as it appears on the records
of the Trust, with postage thereon prepaid, and such notice shall be deemed to
be given at the time when the same shall be deposited in the United States mail.
Notice to Trustees or members of a committee may also be given by telex,
telegram, telecopier or via overnight courier. If sent by telex or telecopier,
notice to a Trustee or member of a committee shall be deemed to be given upon
transmittal; if sent by telegram, notice to a Trustee or member of a committee
shall be deemed to be given when the telegram, so addressed, is delivered to the
telegraph company, and if sent via overnight courier, notice to a Trustee or
member of a committee shall be deemed to be given when delivered against a
receipt therefor.
Section 2. WRITTEN WAIVER. Whenever any notice is required to be given
under the provisions of applicable law or of the Agreement or of these Bylaws, a
waiver thereof in writing, signed by the person or persons entitled to said
8
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notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE VI
GENERAL PROVISIONS
Section 1. DIVIDENDS AND OTHER 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 other 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.
Section 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 Interests, or any portion thereof, subject to the terms and conditions set
forth in the registration statement in effect from time to time. The redemption
price may in any case or cases be paid wholly or partly in kind if the Trustees
determine that such payment is advisable in the interest of the remaining
shareholders of the Portfolio or Class thereof for which the shares are being
redeemed. Subject to the foregoing, the fair value, selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any Person in transferring
securities selected for delivery as all or part of any payment in kind.
The Trustees may, at their option, and at any time, have the right to
redeem shares of any shareholder of a particular Portfolio or Class thereof in
accordance with Section 2 of this Article VII. The Trustees 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 for which the
Trust is formed.
Section 3. INDEMNIFICATION. Every person who is, or has been, a Trustee
or officer of the Trust shall be indemnified by the Trust to the fullest extent
permitted by the Delaware Business Trust Act, these Bylaws and other applicable
law.
Section 4. ADVANCE PAYMENTS OF INDEMNIFIABLE EXPENSES. To the maximum
extent permitted by the Delaware Act and other applicable law, the Trust or
applicable Portfolio may advance to a Covered Person, in connection with the
preparation and presentation of a defense to any claim, action, suit, or
proceeding, expenses for which the Covered Person would ultimately be entitled
to indemnification; provided that the Trust or applicable Portfolio has received
an undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the Trust or applicable Portfolio if it is ultimately
determined that he is not entitled to indemnification for such expenses, and
further provided that (i) such Covered Person shall have provided appropriate
security for such undertaking, (ii) the Trust is insured against losses arising
out of any such advance payments, or (iii) either a majority of the Trustees who
are not interested persons (as defined in the 1940 Act) of the Trust nor parties
to the matter, or independent legal counsel in a written opinion shall have
determined, based upon a review of readily available facts (as opposed to a full
9
<PAGE>
trial-type inquiry) that there is reason to believe that such Covered Person
will not be disqualified from indemnification for such expenses.
Section 5. SEAL. The business seal shall have inscribed thereon the
name of the business trust, the year of its organization and the word "Business
Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced. Any officer or Trustee of the
Trust shall have authority to affix the corporate seal of the Trust to any
document requiring the same.
Section 6. SEVERABILITY. The provisions of these Bylaws are severable.
If the Board of Trustees determines, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code, or other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of these Bylaws; provided, however, that such determination shall not
affect any of the remaining provisions of these Bylaws or render invalid or
improper any action taken or omitted prior to such determination. If any
provision hereof shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of these Bylaws.
Section 7. HEADINGS. Headings are placed in these Bylaws for
convenience of reference only and in case of any conflict, the text of these
Bylaws rather than the headings shall control.
ARTICLE VII
AMENDMENTS
Section 1. AMENDMENTS. These Bylaws may be altered or repealed at any
regular or special meeting of the Board of Trustees without prior notice. These
Bylaws may also be altered or repealed at any special meeting of the Holders,
but only if the Board of Trustees resolves to put a proposed alteration or
repealer to the vote of the Holders and notice of such alteration or repealer is
contained in a notice of the special meeting being held for such purpose.
10
AMENDED AND RESTATED BYLAWS
OF
EMERGING MARKETS DEBT PORTFOLIO (FORMERLY GLOBAL HIGH INCOME PORTFOLIO),
A DELAWARE BUSINESS TRUST
ADOPTED EFFECTIVE MAY 7, 1998
AMENDED EFFECTIVE DECEMBER 10, 1998
<PAGE>
ARTICLE I OFFICES............................................................1
Section 1. REGISTERED OFFICE..............................................1
Section 2. OTHER OFFICES..................................................1
ARTICLE II TRUSTEES..........................................................1
Section 1. NUMBER.........................................................1
Section 2. TERM...........................................................1
Section 3. VACANCY........................................................1
Section 4. DELEGATION OF POWER............................................2
Section 5. INABILITY TO SERVE FULL TERM...................................2
Section 6. POWERS.........................................................2
Section 7. MEETINGS OF THE TRUSTEES.......................................3
Section 8. REGULAR MEETINGS...............................................3
Section 9. QUORUM.........................................................3
Section 10. ACTION WITHOUT MEETING.........................................3
Section 11. DESIGNATION, POWERS, AND NAME OF COMMITTEES....................4
Section 12. MINUTES OF COMMITTEE...........................................4
Section 13. COMPENSATION OF TRUSTEES.......................................4
ARTICLE III OFFICERS.........................................................4
Section 1. EXECUTIVE OFFICERS.............................................4
Section 2. TERM OF OFFICE.................................................5
Section 3. PRESIDENT......................................................5
Section 4. CHAIRMAN OF THE BOARD..........................................5
Section 5. OTHER OFFICERS.................................................5
Section 6. SECRETARY......................................................5
Section 7. TREASURER......................................................6
Section 8. SURETY BOND....................................................6
ARTICLE IV MEETINGS OF SHAREHOLDERS..........................................6
Section 1. PURPOSE........................................................6
Section 2. NOMINATIONS OF TRUSTEES........................................7
Section 3. ELECTION OF TRUSTEES...........................................7
Section 4. NOTICE OF MEETINGS.............................................7
Section 5. SPECIAL MEETINGS...............................................7
Section 6. NOTICE OF SPECIAL MEETING......................................7
Section 7. CONDUCT OF SPECIAL MEETING.....................................7
Section 8. QUORUM.........................................................7
Section 9. ORGANIZATION OF MEETINGS.......................................8
Section 10. VOTING STANDARD................................................8
Section 11. VOTING PROCEDURe...............................................8
Section 12. ACTION WITHOUT MEETING.........................................9
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ARTICLE V NOTICES............................................................9
Section 1. METHODS OF GIVING NOTICE.......................................9
Section 2. WRITTEN WAIVER................................................10
ARTICLE VI GENERAL PROVISIONS...............................................10
Section 1. DIVIDENDS AND DISTRIBUTIONS...................................10
Section 2. REDEMPTIONs...................................................10
Section 3. INDEMNIFICATIOn...............................................11
Section 4. ADVANCE PAYMENTS OF INDEMNIFIABLE EXPENSES....................11
Section 5. SEAL..........................................................11
Section 6. SEVERABILITY..................................................11
Section 7. HEADINGS......................................................11
ARTICLE VII AMENDMENTS......................................................12
Section 1. AMENDMENTS....................................................12
ii
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
EMERGING MARKETS DEBT PORTFOLIO (FORMERLY GLOBAL HIGH INCOME PORTFOLIO),
A DELAWARE BUSINESS TRUST
Capitalized terms not specifically defined herein
shall have the meanings ascribed to them in the Trust's
Agreement and Declaration of Trust ("Agreement").
ARTICLE I
OFFICES
AMENDED AND RESTATED BYLAWS
OF
EMERGING MARKETS DEBT PORTFOLIO (FORMERLY GLOBAL HIGH INCOME PORTFOLIO),
A DELAWARE BUSINESS TRUST
Capitalized terms not specifically defined herein
shall have the meanings ascribed to them in the Trust's
Agreement and Declaration of Trust ("Agreement").
ARTICLE I
OFFICES
Section 1. REGISTERED OFFICE. The registered office of Emerging Markets
Debt Portfolio (formerly Global High Income Portfolio) (the "Trust") shall be in
the County of New Castle, State of Delaware.
Section 2. OTHER OFFICES. The Trust may also have offices at such other
places both within and without the State of Delaware as the Trustees may from
time to time determine or the business of the Trust may require.
ARTICLE II
TRUSTEES
Section 1. NUMBER. The number of Trustees shall initially be five, and
thereafter shall be such number as shall be fixed from time to time by
resolution of the Board of Trustees; provided, however, that the number of
Trustees shall in no event be less than two nor more than twelve.
Section 2. TERM. The Trustees shall hold office during the lifetime of the
Trust, 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 at 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
Holders of the Trust.
Section 3. VACANCY. 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, a vacancy shall
occur. Whenever a vacancy in the Trustees shall occur, until such vacancy is
<PAGE>
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
appointing 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 Trustees. Such appointment shall be evidenced by a written instrument
signed by a majority of the Trustees in office or by resolution of the Trustees,
duly adopted, which shall be recorded in the minutes of a meeting of the
Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to Sections 2 and 3 of Article II of these Amended
and Restated Bylaws, or elected pursuant to Section 3 of Article IV, and the
Agreement 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 4. DELEGATION OF POWER. 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 5. INABILITY TO SERVE FULL TERM. 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 the Agreement.
Section 6. POWERS. 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 the
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 foreign jurisdiction 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 these Amended and Restated Bylaws and the
Agreement, the presumption shall be in favor of a grant of power to the
Trustees.
Section 7. MEETINGS OF THE TRUSTEES. The Trustees of the Trust may hold
meetings, both regular and special, either within or without the State of
Delaware.
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Section 8. REGULAR MEETINGS. Regular meetings of the Board of
Trustees shall be held each year, at such time and place as the Board of
Trustees may determine.
Section 9. NOTICE OF MEETINGS. 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.
Section 10. QUORUM. At all meetings of the Trustees, a majority of the
Trustees then in office (but in no event less than two Trustees) shall
constitute a quorum for the transaction of business and the act of a majority of
the Trustees present at any meeting at which there is a quorum shall be the act
of the Board of Trustees, except as may be otherwise specifically provided by
applicable law or by the Agreement or these Amended and Restated Bylaws. If a
quorum shall not be present at any meeting of the Board of Trustees, the
Trustees present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 11. ACTION WITHOUT MEETING. Unless otherwise restricted by the
Agreement or these Amended and Restated Bylaws, any action required or permitted
to be taken at any meeting of the Board of Trustees or of any committee thereof
may be taken without a meeting by unanimous written consent of the Trustees or
committee members (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) and the writing or writings are filed
with the minutes of proceedings of the board or committee.
Section 12. DESIGNATION, POWERS, AND NAME OF COMMITTEES. The Board of
Trustees may, by resolution passed by a majority of the whole Board, designate
one or more committees, each committee to consist of two or more of the Trustees
of the Trust. The Board may designate one or more Trustee as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of such committee. Each committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Trustees in
the management of the business and affairs of the Trust; provided, however, that
in the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such members constitute a quorum, may
unanimously appoint another member of the Board of Trustees to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Trustees.
Section 13. MINUTES OF COMMITTEE. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Trustees when
required.
3
<PAGE>
Section 14. COMPENSATION OF TRUSTEES. The Trustees as such shall be
entitled to reasonable compensation for their services as determined from time
to time by the Board of Trustees. Nothing herein shall in any way prevent the
employment of any Trustee for advisory, management, administrative, legal,
accounting, investment banking, underwriting, brokerage, or investment dealer or
other services and the payment for the same by the Trust.
ARTICLE III
OFFICERS
Section 1. EXECUTIVE OFFICERS. The initial executive officers of the Trust
shall be elected by the Board of Trustees as soon as practicable after the
organization of the Trust. The executive officers may include a Chairman of the
Board, and shall include a President, one or more Vice Presidents (the number
thereof to be determined by the Board of Trustees), a Secretary and a Treasurer.
The Chairman of the Board, if any, shall be selected from among the Trustees.
The Board of Trustees may also in its discretion appoint Assistant Vice
Presidents, Assistant Secretaries, Assistant Treasurers, and other officers,
agents and employees, who shall have such authority and perform such duties as
the Board may determine. The Board of Trustees may fill any vacancy which may
occur in any office. Any two offices, except for those of President and Vice
President, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument on behalf of the Trust in more than one
capacity, if such instrument is required by law or by these Amended and Restated
Bylaws to be executed, acknowledged or verified by two or more officers.
Section 2. TERM OF OFFICE. Unless otherwise specifically determined by the
Board of Trustees, the officers shall serve at the pleasure of the Board of
Trustees. If the Board of Trustees in its judgment finds that the best interests
of the Trust will be served, the Board of Trustees may remove any officer of the
Trust at any time with or without cause. The Trustees may delegate this power to
the President with respect to any other officer. Such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Any officer
may resign from office at any time by delivering a written resignation to the
Trustees or the President. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
Section 3. PRESIDENT. The President shall be the chief executive officer
of the Trust and, subject to the Board of Trustees, shall generally manage the
business and affairs of the Trust. If there is no Chairman of the Board, or if
the Chairman of the Board has been appointed but is absent, the President shall,
if present, preside at all meetings of the Holders and the Board of Trustees.
Section 4. CHAIRMAN OF THE BOARD. The Chairman of the Board, if any, shall
preside at all meetings of the Holders and the Board of Trustees, if the
Chairman of the Board is present. The Chairman of the Board shall have such
other powers and duties as shall be determined by the Board of Trustees, and
shall undertake such other assignments as may be requested by the President.
4
<PAGE>
Section 5. OTHER OFFICERS. The Chairman of the Board or one or more Vice
Presidents shall have and exercise such powers and duties of the President in
the absence or inability to act of the President, as may be assigned to them,
respectively, by the Board of Trustees or, to the extent not so assigned, by the
President. In the absence or inability to act of the President, the powers and
duties of the President not otherwise assigned by the Board of Trustees or the
President shall devolve upon the Chairman of the Board, or in the Chairman's
absence, the Vice Presidents in the order of their election.
Section 6. SECRETARY. The Secretary shall (a) have custody of the seal of
the Trust; (b) attend meetings of the shareholders, the Board of Trustees, and
any committees of Trustees and keep the minutes of such meetings of Holders,
Board of Trustees and any committees thereof; and (c) issue all notices of the
Trust. The Secretary shall have charge of the Holder records and such other
books and papers as the Board may direct, and shall perform such other duties as
may be incidental to the office or which are assigned by the Board of Trustees.
The Secretary shall also keep or cause to be kept a Holder book, which may be
maintained by means of computer systems, containing the names, alphabetically
arranged, of all persons who are Holders, showing their places of residence, the
number and class or series of any class of shares of beneficial interest held by
them, respectively, and the dates when they became the record owners thereof,
and such book shall be open for inspection as prescribed by the laws of the
State of Delaware.
Section 7. TREASURER. The Treasurer shall have the care and custody of the
funds and securities of the Trust and shall deposit the same in the name of the
Trust in such bank or banks or other depositories, subject to withdrawal in such
manner as these Amended and Restated Bylaws or the Board of Trustees may
determine. The Treasurer shall, if required by the Board of Trustees, give such
bond for the faithful discharge of duties in such form as the Board of Trustees
may require.
Section 8. SURETY BOND. The Trustees may require any officer or agent of
the Trust to execute a bond (including, without limitation, any bond required by
the Investment Company Act of 1940, as amended ("1940 Act") and the rules and
regulations of the Securities and Exchange Commission ("Commission") to the
Trust in such sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his or her duties to the
Trust, including responsibility for negligence and for the accounting of any of
the Trust's property, funds, or securities that may come into his or her hands.
ARTICLE IV
MEETINGS OF HOLDERS
Section 1. PURPOSE. All meetings of the Holders for the election of
Trustees shall be held at such place as may be fixed from time to time by the
Trustees, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Trustees and stated in the
notice indicating that a meeting has been called for such purpose. Meetings of
Holders may be held for any purpose determined by the Trustees and may be held
at such time and place, within or without the State of Delaware as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof. At all meetings of the shareholders, every shareholder of record
5
<PAGE>
entitled to vote thereat shall be entitled to vote either in person or by proxy,
which term shall include proxies provided through written, electronic,
telephonic, computerized, facsimile, telecommunications, telex or oral
communication or by any other form of communication, each pursuant to such
voting procedures and through such systems as are authorized by the Trustees or
one or more executive officers of the Trust. Unless a proxy provides otherwise,
such proxy is not valid more than eleven months after its date. A proxy with
respect to shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of a Holder shall be deemed
valid unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger.
Section 2. NOMINATIONS OF TRUSTEES. Nominations of individuals for
election to the board of trustees shall be made by the Board of Trustees or a
nominating committee of the Board of Trustees, if one has been established (the
"Nominating Committee"). Any Holder of the Trust may submit names of individuals
to be considered by the Nominating Committee or the Board of Trustees, as
applicable, provided, however, (i) that such person was a Holder of record at
the time of submission of such names and is entitled to vote at the meeting, and
(ii) that the Nominating Committee or the Board of Trustees, as applicable,
shall make the final determination of persons to be nominated.
Section 3. ELECTION OF TRUSTEES. All meetings of Holders for the purpose
of electing Trustees shall be held on such date and at such time as shall be
designated from time to time by the Trustees and stated in the notice of the
meeting, at which the Holders shall elect by a plurality vote any number of
Trustees as the notice for such meeting shall state are to be elected, and
transact such other business as may properly be brought before the meeting in
accordance with Section 1 of this Article IV.
Section 4. NOTICE OF MEETINGS. Written notice of any meeting stating the
place, date, and hour of the meeting shall be given to each Holder entitled to
vote at such meeting not less than ten days before the date of the meeting in
accordance with Article V hereof.
Section 5. SPECIAL MEETINGS. Special meetings of the Holders, for any
purpose or purposes, unless otherwise prescribed by applicable law or by the
Agreement, may be called by any Trustee; provided, however, that the Trustees
shall promptly call a meeting of the Holders solely for the purpose of removing
one or more Trustees, when requested in writing so to do by the record Holders
of not less than ten percent of the outstanding Interest in the Trust.
Section 6. NOTICE OF SPECIAL MEETING. Written notice of a special meeting
stating the place, date, and hour of the meeting and the purpose of purposes for
which the meeting is called, shall be given not less than ten days before the
date of the meeting, to each Holder entitled to vote at such meeting.
Section 7. CONDUCT OF SPECIAL MEETING. Business transacted at any special
meeting of Holders shall be limited to the purpose stated in the notice.
6
<PAGE>
Section 8. QUORUM. The Holders of one-third of the Interests that are
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the Holders
for the transaction of business except as otherwise provided by applicable law
or by the Agreement. If, however, such quorum shall not be present or
represented at any meeting of the Holders, the vote of the Holders of a majority
of Interests cast shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting, at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 9. ORGANIZATION OF MEETINGS.
(a) The Chairman of the Board of Trustees shall preside at each
meeting of Holders. In the absence of the Chairman of the Board, the meeting
shall be chaired by the President, or if the President shall not be present, by
a Vice President. In the absence of all such officers, the meeting shall be
chaired by a person elected for such purpose at the meeting. The Secretary of
the Trust, if present, shall act as Secretary of such meetings, or if the
Secretary is not present, an Assistant Secretary of the Trust shall so act, and
if no Assistant Secretary is present, then a person designated by the Secretary
of the Trust shall so act, and if the Secretary has not designated a person,
then the meeting shall elect a secretary for the meeting.
(b) The Board of Trustees of the Trust shall be entitled to make
such rules and regulations for the conduct of meetings of Holders as it shall
deem necessary, appropriate or convenient. Subject to such rules and regulations
of the Board of Trustees, if any, the chairman of the meeting shall have the
right and authority to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing: an agenda or order of business for the
meeting; rules and procedures for maintaining order at the meeting and the
safety of those present; limitations on participation in such meeting to Holders
of record of the Trust and their duly authorized and constituted proxies, and
such other persons as the chairman shall permit; restrictions on entry to the
meeting after the time fixed for the commencement thereof; limitations on the
time allotted to questions or comments by participants; and regulation of the
opening and closing of the polls for balloting on matters which are to be voted
on by ballot, unless and to the extent the Board of Trustees or the chairman of
the meeting determines that meetings of Holders shall not be required to be held
in accordance with the rules of parliamentary procedure.
Section 10. VOTING STANDARD. When a quorum is present at any meeting, the
vote of the Holders of a majority of the Interests cast shall decide any
question brought before such meeting, unless the question is one on which, by
express provision of applicable law, the Agreement, these Amended and Restated
Bylaws, or applicable contract, a different vote is required, in which case such
express provision shall govern and control the decision of such question.
Section 11. VOTING PROCEDURE. Each Interest shall be entitled to vote in
proportion to its share in the Trust. On any matter submitted to a vote of the
Holders, the Interests shall be voted together, except when required by
7
<PAGE>
applicable law or when the Trustees have determined that the matter affects the
interests of one or more Portfolios (or Classes), then only the Holders of such
Portfolios (or Classes) shall be entitled to vote thereon.
Section 12. ACTION WITHOUT MEETING. Unless otherwise provided in the
Agreement or applicable law, any action required to be taken at any meeting of
Holders of the Trust, or any action which may be taken at any meeting of such
Holders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the Holders of outstanding Interests having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all Interests entitled to vote thereon were present and voted.
Prompt notice of the taking of any such action without a meeting by less than
unanimous written consent shall be given to those Holders who have not consented
in writing.
Section 13. FIXING RECORD DATE. In order that the Trustees may determine
the Holders entitled to notice of or to vote at any meeting of Holders or any
adjournment thereof, or to express consent to action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution of
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of beneficial interests or for the purpose of any
other lawful action, the Board of Trustees may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Trustees, and which record date shall not be more
than ninety nor less than ten days before the date of such meeting, nor more
than ten days after the date upon which the resolution fixing the record date is
adopted by the Board of Trustees for action by Holder consent in writing without
a meeting, nor more than ninety days prior to any other action. A determination
of Holders of record entitled to notice of or to vote at a meeting of Holders
shall apply to any adjournment of the meeting; provided, however, that the Board
of Trustees may fix a new record date for the adjourned meeting.
ARTICLE V
NOTICES
Section 1. METHODS OF GIVING NOTICE. Whenever, under the provisions of
applicable law or of the Agreement or of these Amended and Restated Bylaws,
notice is required to be given to any Trustee or Holder, it shall not, unless
otherwise provided herein, be construed to mean personal notice, but such notice
may be given orally in person, or by telephone (promptly confirmed in writing)
or in writing, by mail addressed to such Trustee or Holder, at his address as it
appears on the records of the Trust, with postage thereon prepaid, and such
notice shall be deemed to be given at the time when the same shall be deposited
in the United States mail. Notice to Trustees or members of a committee may also
be given by telex, telegram, telecopier or via overnight courier. If sent by
telex or telecopier, notice to a Trustee or member of a committee shall be
deemed to be given upon transmittal; if sent by telegram, notice to a Trustee or
member of a committee shall be deemed to be given when the telegram, so
addressed, is delivered to the telegraph company, and if sent via overnight
courier, notice to a Trustee or member of a committee shall be deemed to be
given when delivered against a receipt therefor.
8
<PAGE>
Section 2. WRITTEN WAIVER. Whenever any notice is required to be given
under the provisions of applicable law or of the Agreement or of these Amended
and Restated Bylaws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
ARTICLE VI
GENERAL PROVISIONS
Section 1. DIVIDENDS AND OTHER 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 other 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.
Section 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 Interests, or any portion thereof, subject to the terms and conditions set
forth in the registration statement in effect from time to time. The redemption
price may in any case or cases be paid wholly or partly in kind if the Trustees
determine that such payment is advisable in the interest of the remaining
shareholders of the Portfolio or Class thereof for which the shares are being
redeemed. Subject to the foregoing, the fair value, selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any Person in transferring
securities selected for delivery as all or part of any payment in kind.
The Trustees may, at their option, and at any time, have the right to
redeem shares of any shareholder of a particular Portfolio or Class thereof in
accordance with Section 2 of this Article VII. The Trustees 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 for which the
Trust is formed.
Section 3. INDEMNIFICATION. Every person who is, or has been, a Trustee or
officer of the Trust shall be indemnified by the Trust to the fullest extent
permitted by the Delaware Business Trust Act, these Amended and Restated Bylaws
and other applicable law.
Section 4. ADVANCE PAYMENTS OF INDEMNIFIABLE EXPENSES.To the maximum
extent permitted by the Delaware Act and other applicable law, the Trust or
applicable Portfolio may advance to a Covered Person, in connection with the
preparation and presentation of a defense to any claim, action, suit, or
proceeding, expenses for which the Covered Person would ultimately be entitled
to indemnification; provided that the Trust or applicable Portfolio has received
an undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the Trust or applicable Portfolio if it is ultimately
determined that he is not entitled to indemnification for such expenses, and
further provided that (i) such Covered Person shall have provided appropriate
security for such undertaking, (ii) the Trust is insured against losses arising
out of any such advance payments, or (iii) either a majority of the Trustees who
9
<PAGE>
are not interested persons (as defined in the 1940 Act) of the Trust nor parties
to the matter, or independent legal counsel in a written opinion shall have
determined, based upon a review of readily available facts (as opposed to a full
trial-type inquiry) that there is reason to believe that such Covered Person
will not be disqualified from indemnification for such expenses.
Section 5. SEAL. The business seal shall have inscribed thereon the name
of the business trust, the year of its organization and the word "Business Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced. Any officer or Trustee of the
Trust shall have authority to affix the corporate seal of the Trust to any
document requiring the same.
Section 6. SEVERABILITY. The provisions of these Amended and Restated
Bylaws are severable. If the Board of Trustees determines, with the advice of
counsel, that any provision hereof conflicts with the 1940 Act, the regulated
investment company provisions of the Internal Revenue Code, or other applicable
laws and regulations, the conflicting provision shall be deemed never to have
constituted a part of these Amended and Restated Bylaws; provided, however, that
such determination shall not affect any of the remaining provisions of these
Amended and Restated Bylaws or render invalid or improper any action taken or
omitted prior to such determination. If any provision hereof shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision only in such jurisdiction
and shall not affect any other provision of these Amended and Restated Bylaws.
Section 7. HEADINGS. Headings are placed in these Amended and Restated
Bylaws for convenience of reference only and in case of any conflict, the text
of these Amended and Restated Bylaws rather than the headings shall control.
ARTICLE VII
AMENDMENTS
Section 1. AMENDMENTS. These Amended and Restated Bylaws may be altered or
repealed at any regular or special meeting of the Board of Trustees without
prior notice. These Amended and Restated Bylaws may also be altered or repealed
at any special meeting of the Holders, but only if the Board of Trustees
resolves to put a proposed alteration or repealer to the vote of the Holders and
notice of such alteration or repealer is contained in a notice of the special
meeting being held for such purpose.
10
GLOBAL HIGH INCOME PORTFOLIO
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN
GLOBAL HIGH INCOME PORTFOLIO
AND
A I M ADVISORS, INC.
Contract made as of May 29, 1998, between Global High Income Portfolio,
a Delaware business trust ("Company), and A I M Advisors, Inc., a Delaware
corporation (the "Adviser").
WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company, and
WHEREAS the Company desires to retain Adviser as investment manager and
administrator to furnish certain investment advisory, portfolio management and
administration services to the Company, 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 the Company 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 the Company,
including investment research and management with respect to all securities and
investments and cash equivalents of the Company. Adviser will determine from
time to time what securities and other investments will be purchased, retained
or sold by the Company, 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
Company or provide the Company 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
Company and its other clients and that the total commissions or spreads paid by
the Company will be reasonable in relation to the benefits to the Company 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
<PAGE>
exemptive orders currently in effect. Whenever Adviser simultaneously places
orders to purchase or sell the same security on behalf of a Company and one or
more other accounts advised by Adviser, such orders will be allocated as to
price and amount among all such accounts in a manner believed to be equitable to
each account. The Company recognizes that in some cases this procedure may
adversely affect the results obtained for the Company.
(c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Company, 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 the Company
subject to the supervision of the Board and the following understandings:
(a) Adviser will supervise all aspects of the operations of the
Company, 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 Company.
(b) At Adviser's expense, Adviser will provide the Company 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 the Company's proxy
material, tax returns and required reports with or to the Company's
shareholders, the Securities and Exchange Commission and other appropriate
federal or state regulatory authorities.
(d) Adviser will provide the Company with, or obtain for it, 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 the Company, 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
Paragraphs 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 services under Paragraphs 2, 3 and 4 of this Contract; (ii) each
Sub-Advisory and Sub-Administration Contract meets all requirements of the 1940
<PAGE>
Act and rules thereunder, and (iii) Adviser shall not enter into a Sub-Advisory
or Sub-Administration Contract unless it is approved by the Board prior to
implementation.
6. SERVICES NOT EXCLUSIVE. The services furnished by Adviser hereunder are not
to be deemed exclusive and Adviser shall be free to furnish similar services to
others so long as its services under this Contract are not impaired thereby.
Nothing in this Contract shall limit or restrict the right of any director,
officer or employee of Adviser, who may also be a Trustee, officer or employee,
of the Company, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
7. EXPENSES.
(a) During the term of this Contract, the Company will bear all
expenses, not specifically assumed by Adviser.
(b) Expenses borne by the Company will include but not be limited to
the following: (i) all direct charges relating to the purchase and sale of
portfolio securities, including the cost (including brokerage commissions, if
any) of securities purchased or sold by the Company and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Company by Adviser under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Company; (v) expenses of
preparing filing reports and other documents with governmental and regulatory
agencies; (vi) filing fees and expenses relating to the registration and
qualification of the Company's shares and the Company under federal and/or state
securities laws and maintaining such registrations and qualifications; (vii)
costs incurred in connection with the issuance, sale or repurchase of the
Company's shares of beneficial interest; (viii) 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"); (ix) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief asserted against the Company for
violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii)
expenses of setting in type, printing and mailing reports, notices and proxy
materials for existing shareholders; (xviii) 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; (xix) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xx) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof, (xxi) the cost of investment company literature and other publications
provided by the Company to its Trustees and officers; and (xxii) costs of
mailing, stationery and communications equipment.
<PAGE>
(c) 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.
(d) The payment or assumption by Adviser of any expense of the Company
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
on any subsequent occasion.
8. COMPENSATION.
(a) For the services provided to the Company under this Contract, the
Company shall pay the Adviser an annual fee, payable monthly, based upon the
average daily net assets of the Company as forth in Appendix A attached hereto.
Such compensation shall be paid solely from the assets of the Company. The
Company will also pay the Adviser a fee equal to 2% of the Company's total
investment income calculated in accordance with generally accepted accounting
principles, adjusted daily for currency revaluations, on a marked to market
basis, of the Company's assets; provided, however, that during any fiscal year
this amount shall not exceed 2% of the Company's total investment income
calculated in accordance with generally accepted accounting principles.
(b) The fee shall be computed daily and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.
(c) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
9. LIMITATION OF LIABILITY OF ADVISER AND INDEMNIFICATION. Adviser shall not be
liable and the Company 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 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 the Company or acting with respect to any business of the
Company, to be rendering such service to or acting solely for 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 the
Company unless it has first been approved (i) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the Company's
outstanding voting securities.
<PAGE>
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to the Company this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of the Company.
(c) Notwithstanding the foregoing, with respect to the Company 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 Company 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. 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 Company'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 Company, as
provided in the Company's Agreement and Declaration of Trust. The execution and
delivery of this Contract have been authorized by the Trustees of the Company
and shareholders of the Company, and this Contract has been executed and
delivered by an authorized officer of the Company acting as such; neither such
authorization by such Trustees and shareholders nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the
assets and property of the Company, as provided in the Company's Agreement and
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
<PAGE>
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: GLOBAL HIGH INCOME PORTFOLIO
By: /s/ Michael A. Silver By: /s/ Helge K. Lee
------------------------- ----------------------------------
Name: Michael A. Silver Name: Helge K. Lee
Title: Assistant Secretary Title: Vice President and Secretary
Attest: A I M ADVISORS, INC.
By: /s/ Kathleen J. Pflueger By: /s/ Carol F. Relihan/SDS
------------------------- ----------------------------------
Name: Kathleen J. Pflueger Name: Carol F. Relihan
Title: Assistant Secretary Title: Senior Vice President
<PAGE>
APPENDIX A
TO
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
OF
GLOBAL HIGH INCOME PORTFOLIO
In addition to amounts otherwise payable under Section 8(a) of the
Contract, the Company shall pay the Adviser, out of the assets of the Company,
as full compensation for all services rendered and all facilities furnished
hereunder, a management fee for the Company set forth below. Such fee shall be
calculated by applying the following annual rates to the average daily net
assets of the Company for the calendar year computed in the manner used for the
determination of the net asset value of shares of the Company.
Global High Income Portfolio
Net Assets Annual Rate
---------- -----------
First $ 500 million .................................... .475%
Next $ 1 billion........................................ .45%
Next $ 1 billion ....................................... .425%
On amounts thereafter .................................. .40%
EMERGING MARKETS DEBT PORTFOLIO
SUB-ADVISORY CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
INVESCO ASSET MANAGEMENT LIMITED
Contract made as of December 14, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and INVESCO Asset Management Limited, a
company organized under the laws of England and Wales ("Sub-Adviser").
WHEREAS Adviser has entered into an Investment Management and
Administration Contract with Emerging Markets Debt Portfolio ("Company"), an
open-end management investment company registered under the Investment
Company Act of 1940, as amended ("1940 Act"); and
WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser to furnish
certain advisory services to the Company, and Sub-Adviser is willing to furnish
such services;
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. Adviser hereby appoints Sub-Adviser as sub-adviser of the
Company 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 the Company, including investment research and management, with
respect to all securities and investments and cash equivalents of the Company.
The Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by the Company, and the brokers
and dealers through whom trades will be executed.
(b) The Sub-Adviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net result in terms of price and
execution. Consistent with this obligation, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
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dealers who sell shares of the Company or provide the Company, Adviser's other
clients, or Sub-Adviser's other clients with research, analysis, advice and
similar services. The Sub-Adviser may pay to brokers and dealers, in return for
such research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to the Sub-Adviser determining in good faith
that such commission or spread is reasonable in terms either of the particular
transaction or of the overall responsibility of the Adviser and the Sub-Adviser
to the Company and their other clients and that the total commissions or spreads
paid by the Company will be reasonable in relation to the benefits to the
Company over the long term. In no instance will portfolio 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 rules and
regulations thereunder and any exemptive orders currently in effect. Whenever
the Sub-Adviser simultaneously places orders to purchase or sell the same
security on behalf of the Company 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 Company, and will furnish the Board and
Adviser with such periodic and special reports as the Board or Adviser
reasonably may request. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records which it maintains
for the Company are the property of the Company, agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any records which it
maintains for the Company and which are required to be maintained by Rule 31a-1
under the 1940 Act, and further agrees to surrender promptly to the Company any
records which it maintains for the Company upon request by the Company.
3. FURTHER DUTIES. In all matters relating to the performance of this Contract,
Sub-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.
4. SERVICES NOT EXCLUSIVE. The services furnished by Sub-Adviser hereunder are
not to be deemed exclusive and Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Sub-Adviser, who may also be a Trustee, officer
or employee of the 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.
5. EXPENSES.
(a) During the term of this Contract, the Company will bear all expenses,
not specifically assumed by Sub-Adviser, incurred in its operations.
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(b) Expenses borne by the Company will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Company and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Company by Sub-Adviser under this Contract; (iii) investment consulting fees
and related costs; (iv) expenses of organizing the Company; (v) expenses of
preparing and filing reports and other documents with governmental and
regulatory agencies; (vi) filing fees and expenses relating to the registration
and qualification of the Company's shares and the Company under federal and/or
state securities laws and maintaining such registrations and qualifications;
(vii) costs incurred in connection with the issuance, sale or repurchase of the
Company's shares of beneficial interest; (viii) 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"); (ix) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(x) taxes (including any income or franchise taxes) and governmental fees; (xi)
costs of any liability, uncollectible items of deposit and other insurance and
fidelity bonds; (xii) any costs, expenses or losses arising out of a liability
of or claim for damages or other relief asserted against the Company for
violation of any law; (xiii) interest charges; (xiv) legal, accounting and
auditing expenses, including legal fees of special counsel for the Independent
Trustees; (xv) charges of custodians, transfer agents, pricing agents and other
agents; (xvi) expenses of disbursing dividends and distributions; (xvii)
expenses of setting in type, printing and mailing reports, notices and proxy
materials for existing shareholders; (xviii) 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; (xix) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xx) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xxi) the cost of investment company literature and other publications
provided by the Company to its Trustees and officers; and (xxii) costs of
mailing, stationery and communications equipment.
(c) The payment or assumption by Sub-Adviser of any expense of the Company
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 on any subsequent occasion.
6. COMPENSATION.
(a) For the services provided to the Company under this Contract, Adviser
will pay Sub-Adviser a fee, computed weekly and paid monthly, as set forth in
Appendix A hereto. Adviser will also pay Sub-Adviser a fee equal to 0.8% of the
Company's total investment income calculated in accordance with generally
accepted accounting principles, adjusted daily for currency revaluations, on a
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marked to market basis, of the Company's assets; provided, however, that during
any fiscal year this amount shall not exceed 0.8% of the Company's total
investment income calculated in accordance with generally accepted accounting
principles.
(b) 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.
(c) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
7. 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 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 the Company or acting with respect to any business of
the Company to be rendering such service to or acting solely for 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.
8. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect unless it has first been
approved (i) by a vote of a majority of the Independent Trustees, cast in person
at a meeting called for the purpose of voting on such approval, and (ii) by vote
of a majority of the Company's outstanding voting securities, when required by
the 1940 Act.
(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 this Contract shall continue automatically for successive periods not
to exceed twelve months each, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Board or by vote of a majority of the outstanding
voting securities of the Company.
(c) Notwithstanding the foregoing, this Contract may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Company on sixty days'
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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. This Contract will
automatically terminate in the event of its assignment.
9. 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 Company's outstanding voting securities, when required
by the 1940 Act.
10. 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.
11. 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.
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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.
A I M ADVISORS, INC.
Attest: _____________________ By:
--------------------
Name: Robert H. Graham
Title: President
INVESCO ASSET MANAGEMENT LIMITED
Attest: _____________________ By: /s/
--------------------
Name:
Title:
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APPENDIX A
TO
SUB-ADVISORY CONTRACT
EMERGING MARKETS DEBT PORTFOLIO
0.8% of the Company's total investment income, plus
NET ASSETS ANNUAL RATE
- ---------- -----------
First $ 500 million......................................... 0.29%
Next $ 1 billion............................................ 0.28%
Next $ 1 billion............................................ 0.27%
On amounts thereafter....................................... 0.26%
AMENDMENT TO CUSTODIAN CONTRACT
This Amendment to the Custodian Contract is made as of January 26, 1999 by and
between Emerging Markets Debt Portfolio (formerly Global High Income Portfolio,
the "Fund") and State Street Bank and Trust Company (the "Custodian").
Capitalized terms used in this Amendment without definition shall have the
respective meanings ascribed to such terms in the Custodian Contract referred to
below.
WHEREAS, the Fund and the Custodian entered into a Custodian Contract dated as
of October 21, 1992 (as amended and in effect from time to time, the
"Contract"); and
WHEREAS, the Fund and the Custodian desire to amend certain provisions of the
Contract to reflect revisions to Rule 17f-5 ("Rule 17f-5") promulgated under
Section 17(f) of the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund and the Custodian desire to amend and restate certain other
provisions of the Contract relating to the terms and conditions of the custody
of assets of the Fund held outside of the United States.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereinafter contained, the parties hereby agree to amend the
Contract; pursuant to the terms thereof, as follows:
I. Article 3 of the Contract is hereby deleted, and Articles 4 through 24 of
the Contract are hereby amended, as of the effective date of this
Amendment, by renumbering same as Articles 5 through 25, respectively.
II. New Articles 3 and 4 of the Contract are hereby added, as of the
effective date of this Amendment, as set forth below.
3. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
----------------------------------------
3.1. DEFINITIONS.
-----------
Capitalized terms in this Article 3 of the Contract shall have the following
meanings:
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment; economic and financial infrastructure
(including any Mandatory Securities Depositories operating in the country);
prevailing or developing custody and settlement practices; laws and regulations
applicable to the safekeeping and recovery of Foreign Assets held in custody in
that country; and factors comprising the "prevailing country risk", including
the effects of foreign law on the safekeeping of Fund assets, the likelihood of
expropriation, nationalization, freezing, or confiscation of the Fund's assets
and any reasonably foreseeable difficulties in repatriating the Fund's assets.
<PAGE>
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f- 5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the SEC), or a foreign branch of a Bank (as defined in Section 2(a)(5)
of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of
the 1940 Act, except that the term does not include Mandatory Securities
Depositories.
"Foreign Assets" means any of the Fund's investments (including foreign
currencies) for which the primary market is outside the United States, currency
contracts that are settled outside the United States and such cash and cash
equivalents as are reasonably necessary to effect the Fund's transactions in
such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(2) of Rule
17f-5.
"Mandatory Securities Depository" means a foreign securities depository or
clearing agency that, either as a legal or practical matter, must be used if the
Fund determines to place Foreign Assets in a country outside the United States
(i) because required by law or regulation; (ii) because securities cannot be
withdrawn from such foreign securities depository or clearing agency; or (iii)
because maintaining or effecting trades in securities outside the foreign
securities depository or clearing agency is not consistent with prevailing or
developing custodial or market practices.
3.2. DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
------------------------------------------------------
The Fund, by resolution adopted by its Board of Trustees (the "Board"), hereby
delegates to the Custodian, subject to Section (b) of Rule 17f-5, the
responsibilities set forth in this Article 3 with respect to Foreign Assets held
outside the United States, and the Custodian hereby accepts such delegation as
Foreign Custody Manager of the Fund.
3.3. COUNTRIES COVERED.
-----------------
The Foreign Custody Manager shall be responsible for performing the delegated
responsibilities defined below only with respect to (a) the countries listed on
Schedule A hereto as approved by the Board, which list of Board-approved
countries may be amended from time to time by the Fund with the agreement of the
Foreign Custody Manager, and (b) the custody arrangements set forth on such
Schedule A. The Foreign Custody Manager shall list on Schedule A the Eligible
Foreign Custodians selected by the Foreign Custody Manager to maintain the
Fund's assets, which list of Eligible Foreign Custodians may be amended from
time to time in the sole discretion of the Foreign Custody Manager. Mandatory
Securities Depositories are listed on Schedule B to this Contract, which
Schedule B may be amended from time to time by the Foreign Custody Manager. The
Foreign Custody Manager will provide amended versions of Schedules A and B in
accordance with Section 3.7 of this Article 3.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account or to place or maintain Foreign Assets in a country listed on
Schedule A, and the fulfillment by the Fund of the account opening requirements
for such country (if any), the Foreign Custody Manager shall be deemed to have
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been appointed by the Board as Foreign Custody Manager with respect to that
country and to have accepted the delegation. Execution of this Amendment by the
Fund shall be deemed to be a Proper Instruction to open an account, or to place
or maintain Foreign Assets, in each Board- approved country listed on Schedule A
in which the Custodian has previously placed or currently maintains Foreign
Assets pursuant to the terms of the Contract. Following the receipt of Proper
Instructions directing the Foreign Custody Manager to close the account of the
Fund with the Eligible Foreign Custodian selected by the Foreign Custody Manager
in a designated country, the delegation by the Board to the Custodian as Foreign
Custody Manager for that country shall be deemed to have been withdrawn and the
Custodian shall immediately cease to be the Foreign Custody Manager of the Fund
with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period as to which the parties agree in
writing) after receipt of any such notice by the Fund, the Custodian shall have
no further responsibility as Foreign Custody Manager to the Fund with respect to
the country as to which the Custodian's acceptance of delegation is withdrawn.
3.4. SCOPE OF DELEGATED RESPONSIBILITIES.
-----------------------------------
3.4.1. SELECTION OF ELIGIBLE FOREIGN CUSTODIANS.
----------------------------------------
Subject to the provisions of this Article 3, the Foreign Custody Manager of the
Fund may place and maintain the Foreign Assets in the care of the Eligible
Foreign Custodians selected by the Foreign Custody Manager in each country
listed as "approved" on Schedule A, as such Schedule is amended from time to
time.
In performing its delegated responsibilities as Foreign Custody Manager to place
or maintain the Foreign Assets with an Eligible Foreign Custodian, the Foreign
Custody Manager shall determine that the Foreign Assets will be subject to
reasonable care, based on the standards applicable to custodians in the country
in which the Foreign Assets will be held by that Eligible Foreign Custodian,
after considering all factors relevant to the safekeeping of such assets,
including, without limitation, the factors specified in Rule 17f-5(c)(1).
3.4.2. CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS.
------------------------------------------
The Foreign Custody Manager shall determine that the contract (or the rules or
established practices or procedures in the case of an Eligible Foreign Custodian
that is a foreign securities depository or clearing agency) governing the
foreign custody arrangements with each Eligible Foreign Custodian selected by
the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
3.4.3. MONITORING.
----------
In each case in which the Foreign Custody Manager maintains Foreign Assets with
an Eligible Foreign Custodian, selected by the Foreign Custody Manager, the
Foreign Custody Manager shall maintain a system to monitor (i) the
appropriateness of maintaining the Foreign Assets with such Eligible Foreign
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Custodian, and (ii) the contract governing the custody arrangements established
by the Foreign Custody Manager with the Eligible Foreign Custodian (or the rules
or established practices and procedures in the case of an Eligible Foreign
Custodian selected by the Foreign Custody Manager which is a foreign securities
depository or clearing agency that is not a Mandatory Securities Depository).
The Foreign Custody Manager shall provide the Board with information at least
annually as to the factors used in such monitoring system. In the event the
Foreign Custody Manager determines that the custody arrangements with an
Eligible Foreign Custodian that it has selected are no longer appropriate, the
Foreign Custody Manager shall promptly transfer the Fund's Foreign Assets to
another Eligible Foreign Custodian in the market and shall notify the Board in
accordance with Section 3.7 hereunder.
3.5. GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY.
--------------------------------------------------
For purposes of this Article 3, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and maintaining
the Foreign Assets in each country for which the Custodian is serving as Foreign
Custody Manager of the Fund, and the Board shall be deemed to be monitoring on a
continuing basis such Country Risk to the extent that the Board considers
necessary or appropriate.
Notwithstanding any provision of this Contract to the contrary, the Fund and the
Custodian expressly acknowledge and agree that the Foreign Custody Manager,
shall not be delegated any responsibilities under this Article 3 with respect to
Mandatory Securities Depositories, and that the determination by or on behalf of
the Board to place the Foreign Assets in a particular country shall be deemed to
include the determination to place such Foreign Assets eligible for any
Mandatory Securities Depository with such Mandatory Securities Depository,
whether the Mandatory Securities Depository exists at the time the Foreign
Assets are acquired, or after the acquisition thereof.
3.6. STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF THE FUND.
-------------------------------------------------------
In performing the responsibilities delegated to it, the Foreign Custody Manager
shall exercise reasonable care, prudence and diligence such as a person having
responsibility for the safekeeping of assets of management investment companies
registered under the 1940 Act would exercise.
3.7. REPORTING REQUIREMENTS.
----------------------
The Foreign Custody Manager shall report at least quarterly on the Foreign
Assets held with each Eligible Foreign Custodian and, in connection therewith if
applicable, provide to the Board amended Schedules A or B at the end of the
calendar quarter in which an amendment to either Schedule has occurred. The
Foreign Custody Manager will make written reports notifying the Board of any
other material change in the foreign custody arrangements of the Fund defined in
this Article 3 promptly after the occurrence of the material change.
3.8. REPRESENTATIONS WITH RESPECT TO RULE 17F-5.
------------------------------------------
The Foreign Custody Manager represents to the Fund that it is a U.S. Bank as
defined in section (a)(7) of Rule 17f-5.
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The Fund represents to the Custodian that the Board has determined that it is
reasonable for the Board to rely on the Custodian to perform the
responsibilities delegated pursuant to this Contract to the Custodian as the
Foreign Custody Manager of the Fund.
3.9. EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
--------------------------------------------------------------------------
The Board's delegation to the Custodian as Foreign Custody Manager of the Fund
shall be effective as of the date hereof and shall remain in effect until
terminated at any time, without penalty, by written notice from the terminating
party to the non-terminating party. Termination will become effective thirty
days after receipt by the non-terminating party of such notice. The provisions
of Section 3.3 hereof shall govern the delegation to and termination of the
Custodian as Foreign Custody Manager of the Fund with respect to designated
countries.
3.10 FUTURE NEGOTIATIONS.
-------------------
If at any time prior to termination of this Amendment the Custodian as a matter
of standard business practice, accepts delegation as Foreign Custody Manager for
its U.S. mutual fund clients on terms materially different than set forth in
this Amendment, the Custodian hereby agrees to negotiate with the fund in good
faith with respect thereto.
4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD OUTSIDE
THE UNITED STATES.
-----------------
4.1 DEFINITIONS.
-----------
Terms used in this Article 4 and not defined below shall have the meanings
ascribed them in the Contract or in this Amendment:
"Foreign Securities System" means either a clearing agency or a securities
depository which is listed on Schedule A hereto or a Mandatory Securities
Depository.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
4.2. HOLDING SECURITIES.
------------------
The Custodian shall identify on its books as belonging to the Fund the foreign
securities held by each Foreign Sub-Custodian or Foreign Securities System. The
Custodian may hold foreign securities for all of its customers, including the
Fund, with any Foreign Sub- Custodian in an account that is identified as
belonging to the Custodian for the benefit of its customers, PROVIDED HOWEVER,
that (i) the records of the Custodian with respect to foreign securities of the
Fund which are maintained in such account shall identify those securities as
belonging to the Fund and (ii), to the extent permitted and customary in the
market in which the account is maintained, the Custodian shall require that
securities so held by the Foreign Sub-Custodian be held separately from any
assets of such Foreign Sub-Custodian or of other customers of such Foreign
Sub-Custodian.
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4.3. FOREIGN SECURITIES SYSTEMS.
Foreign securities shall be maintained in a Foreign Securities System in a
designated country only through arrangements implemented by the Foreign
Sub-Custodian in such country pursuant to the terms of this Contract.
4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. DELIVERY OF FOREIGN SECURITIES.
The Custodian or a Foreign Sub-Custodian shall release and deliver foreign
securities of the Fund held by such Foreign Sub-Custodian, or in a Foreign
Securities System account, only upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, and only in
the following cases:
(i) upon sale of such foreign securities for the Fund in
accordance with reasonable market practice in the country
where such Foreign Assets are held or traded, including,
without limitation: (A) delivery against declaring such
purpose to be a proper purpose, and naming the person or
persons to whom such payment is to be made.
4.4.3. MARKET CONDITIONS; MARKET INFORMATION.
-------------------------------------
Notwithstanding any provision of this Contract to the contrary, settlement and
payment for Foreign Assets received for the account of the Fund and delivery of
Foreign Assets maintained for the account of the Fund may be effected in
accordance with the customary established securities trading or processing
practices and procedures in the country or market in which the transaction
occurs generally accepted by Institutional Clients, including, without
limitation, delivering Foreign Assets to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such Foreign Assets from such
purchaser or dealer. For purposes of this Contract, "Institutional Clients"
means U.S. registered investment companies or major U.S. based commercial banks,
insurance companies, pension funds or substantially similar institutions which,
as a part of their ordinary business operations, purchase or sell securities and
make use of global custody services.
The Custodian shall provide to the Board the information with respect to custody
and settlement practices in countries in which the Custodian employs a Foreign
Sub- Custodian, including without limitation information relating to Foreign
Securities Systems, described on Schedule C hereto at the time or times set
forth on such Schedule. The Custodian may revise Schedule C from time to time,
provided that no such revision shall result in the Board being provided with
substantively less information than had been previously provided hereunder and,
provided further, that the Custodian shall in any event provide to the Board and
to A I M Advisors, Inc. annually the following information and opinions with
respect to the Board-approved countries listed on Schedule A:
(i) legal opinions relating to whether local law restricts with
respect to U.S. registered mutual funds (a) access of a fund's
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independent public accountants to books and records of a
Foreign Sub-Custodian or Foreign Securities System, (b) a
fund's ability to recover in the event of bankruptcy or
insolvency of a Foreign Sub-Custodian or Foreign Securities
System, (c) a fund's ability to recover in the event of a loss
by a Foreign Sub-Custodian or Foreign Securities System, and
(d) the ability of a foreign investor to convert cash and cash
equivalents to U.S. dollars;
(ii) summary of information regarding Foreign Securities Systems;
and
(iii) country profile information containing market practice for (a)
delivery versus payment, (b) settlement method, (c) currency
restrictions, (d) buy- in practices, (e) foreign ownership
limits, and (f) unique market arrangements.
4.5. REGISTRATION OF FOREIGN SECURITIES.
----------------------------------
The foreign securities maintained in the custody of a Foreign Custodian (other
than bearer securities) shall be registered in the name of the Fund or in the
name of the Custodian or in the name of any Foreign Sub-Custodian or in the name
of any nominee of the foregoing, and the Fund agrees to hold any such nominee
harmless from any liability as a holder of record of such foreign securities,
except to the extent that the Fund incurs loss or damage due to failure of such
nominee to meet its standard of care as set forth in the Contract. The Custodian
or a Foreign Sub-Custodian shall not be obligated to accept securities on behalf
of the Fund under the terms of this Contract unless the form of such securities
and the manner in which they are delivered are in accordance with reasonable
market practice.
4.6. BANK ACCOUNTS.
-------------
The Custodian shall identify on its books as belonging to the Fund cash
(including cash denominated in foreign currencies) deposited with the Custodian.
Where the Custodian is unable to maintain, or market practice does not
facilitate the maintenance of, cash on the books of the Custodian, a bank
account or bank accounts opened and maintained outside the United States on
behalf of the Fund in a Foreign Sub-Custodian shall be subject only to draft or
order by the Custodian or such Foreign Sub-Custodian, acting pursuant to the
terms of this Contract to hold cash received by or from or for the account of
the Fund.
4.7. COLLECTION OF INCOME.
--------------------
The Custodian shall use reasonable commercial efforts to collect all dividends,
income and other payments with respect to the Foreign Assets held hereunder to
which the Fund shall be entitled and shall credit such income, as collected, to
the Fund. In the event the Custodian or a Foreign Sub-Custodian must use
measures beyond those which are customary in a particular country to collect
such payments, the Fund and the Custodian shall consult as to such measures and
as to the compensation and expenses of the Custodian attendant thereto.
7
<PAGE>
4.8. SHAREHOLDER RIGHTS.
------------------
With respect to the foreign securities held under this Article 4, the Custodian
will use commercially reasonable efforts to facilitate the exercise by the Fund
of voting and other shareholder rights, subject always to the laws, regulations
and practical constraints that may obtain in the country where such securities
are issued. The Fund acknowledges that local conditions, including lack of
regulation, onerous procedural obligations, lack of notice and other factors may
have the effect of severely limiting the ability of the Fund to exercise
shareholder rights.
4.9. COMMUNICATIONS RELATING TO FOREIGN SECURITIES.
---------------------------------------------
The Custodian shall transmit promptly to the Fund written information
(including, without limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith) received by the
Custodian via the Foreign Sub- Custodians from issuers of the foreign securities
being held for the account of the Fund. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund written information so
received by the Custodian from issuers of the foreign securities whose tender or
exchange is sought or from the party (or its agents) making the tender or
exchange offer. Subject to the standard of care to which the Custodian is held
under this Contract, the Custodian shall not be liable for any untimely exercise
of any tender, exchange or other right or power in connection with foreign
securities or other property of the Fund at any time held by it unless (i) the
Custodian or the respective Foreign Sub-Custodian is in actual possession of
such foreign securities or property and (ii) the Custodian receives Proper
Instructions with regard to the exercise of any such right or power, and both
(i) and (ii) occur at least two New York business days prior to the date on
which the Custodian is to take action to exercise such right or power.
4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS AND FOREIGN SECURITIES SYSTEMS.
------------------------------------------------------------------
Each agreement pursuant to which the Custodian employs a Foreign Sub-Custodian
shall, to the extent possible consistent with prevailing market practice,
require the Foreign Sub-Custodian to exercise reasonable care in the performance
of its duties and to indemnify, and hold harmless, the Custodian from and
against any loss, damage, cost, expense, liability or claim arising out of or in
connection with such Foreign Sub- Custodian's performance of such obligations.
At the election of the Fund, the Fund shall be entitled to be subrogated to the
rights of the Custodian with respect to any claims against a Foreign
Sub-Custodian as a consequence of any such loss, damage, cost, expense,
liability or claim if and to the extent that the Fund has not been made whole
for any such loss, damage, cost, expense, liability or claim.
4.11. TAX LAW.
-------
The Custodian shall have no responsibility or liability for any obligations now
or hereafter imposed on the Fund or the Custodian as custodian of the Fund by
the tax law of the United States or of any state or political subdivision
thereof. With respect to jurisdictions other than the United States, the sole
responsibility of the Custodian with regard to the tax law of any such
jurisdiction shall be to use reasonable efforts to (a) notify the Fund of the
obligations imposed on the Fund or the Custodian as custodian of the Fund by the
8
<PAGE>
tax law of such jurisdictions, including responsibility for withholding and
other taxes, assessment or other governmental charges, certifications and
government reporting and (b) perform such ministerial steps as are required to
collect any tax refund, to ascertain the appropriate rate of tax withholding and
to provide such documents as may be required to enable each Fund to receive
appropriate tax treatment under applicable tax laws and any applicable treaty
provisions. The Custodian, in performance of its duties under this Section,
shall be entitled to treat each Fund as a Delaware business trust which is
"registered investment company" under the laws of the United States, and it
shall be the duty of each Fund to inform the Custodian of any change in the
organization, domicile or, to the extent within the knowledge of the Fund, other
relevant facts concerning tax treatment of the Fund and further to inform the
Custodian if the Fund is or becomes the beneficiary of any special ruling or
treatment not applicable to the general nationality and category of entity of
which the Fund is a part under general laws and treaty provisions. The Custodian
shall be entitled to rely on any information supplied by the Fund. The Custodian
may engage reasonable professional advisors disclosed to the Fund by the
Custodian, which may include attorneys, accountants or financial institutions in
the regular business of investment administration and may rely upon advice
received therefrom.
4.12. LIABILITY OF CUSTODIAN.
----------------------
Except as may arise from the Custodian's own negligence or willful misconduct or
the negligence or willful misconduct of a Sub-Custodian, the Custodian shall be
without liability to the Fund for any loss, liability, claim or expense
resulting from or caused by Country Risk (as such term is defined in Article 3
hereof), regardless of whether assets are maintained in the custody of a Foreign
Sub-Custodian or a Foreign Securities Depository, the Custodian shall be without
liability for any loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism, or any other similar loss beyond the reasonable control of the
Custodian or the Sub-Custodian.
The Custodian shall be liable to the Fund on account of any actions or omissions
of any Foreign Sub-Custodian to the same extent as such Foreign Sub-Custodian
shall be liable to the Custodian.
4.13 USE OF TERM "FUND"; ASSETS AND LIABILITIES
------------------------------------------
All references in this Article 4 or in Article 3 of this Agreement to "Fund"
shall mean the Fund, or a Portfolio of the Fund, as the context requires or as
applicable.
The Custodian shall maintain separate and distinct records for each Portfolio
and the assets allocated solely with such Portfolio shall be held and accounted
for separately from the assets of the Fund associated solely with any other
Portfolio. The debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular Portfolio shall be
enforceable against the assets of such Portfolio only, and not against the
assets of the Fund generally or the assets of any other Portfolio.
III. Except as specifically superseded or modified herein, the terms and
provisions of the Contract shall continue to apply with full force and effect.
In the event of any conflict between the terms of the Contract prior to this
9
<PAGE>
Amendment and this Amendment, the terms of this Amendment shall prevail. If the
Custodian is delegated the responsibilities of Foreign Custody Manager pursuant
to the terms of Article 3 hereof, in the event of any conflict between the
provisions of Articles 3 and 4 hereof, the provisions of Article 3 shall
prevail.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and behalf by its duly authorized representative as of the
date first above written.
WITNESSED BY: STATE STREET BANK AND TRUST COMPANY
/s/ Marc L. Parsons By: /s/ RonalD E. Logue
- ------------------------------- --------------------------------------
Marc L. Parsons Name: Ronald E. Logue
Associate Counsel Title: Executive Vice President
WITNESSED BY: EMERGING MARKETS DEBT PORTFOLIO
/s/ Samuel D. Sirko By: /s/ Carol F. Relihan
- ------------------------------- -------------------------------------
Name: Samuel D. Sirko Name: Carol F. Relihan
Title: Assistant Secretary Title: Vice President
10
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
- ------- ------------ --------------------------
<S> <C> <C>
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria Erste Bank der Oesterreichischen Sparkassen --
AG
Bahrain British Bank of the Middle East (as --
delegate of The Hongkong and Shanghai
Banking Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Generale de Banque --
Bermuda The Bank of Bermuda Limited --
Bolivia Banco Boliviano Americano S.A. --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Bulgaria ING Bank N.V. --
Canada Canada Trustco Mortgage Company
Chile Citibank, N.A. Deposito Central de Valores S.A.
People's Republic The Hongkong and Shanghai Banking --
of China Corporation Limited, Shanghai and
Shenzhen branches
12/31/98
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria --
Costa Rica Banco BCT S.A. --
Croatia Privredna Banka Zagreb d.d --
Cyprus Barclays Bank Plc. Cyprus Offshore Banking --
Unit
Czech Republic Ceskoslovenska Obchodni Banka, A.S. --
Denmark Den Danske Bank --
Ecuador Citibank, N.A. --
Egypt National Bank of Egypt --
Estonia Hansabank --
Finland Merita Bank Limited --
France Banque Paribas --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited
Greece National Bank of Greece S.A. The Bank of Greece,
System for Monitoring Transactions in
Securities in Book-Entry Form
Hong Kong Standard Chartered Bank --
Hungary Citibank Budapest Rt. --
Iceland Icebank Ltd. --
India Deutsche Bank AG --
The Hongkong and Shanghai Banking
Corporation Limited
Indonesia Standard Chartered Bank --
12/31/98 2
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
Italy Banque Paribas --
Ivory Coast Societe Generale de Banques en Cote --
d'Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant Bank --
Ltd.
Japan The Daiwa Bank, Limited Japan Securities Depository Center
The Fuji Bank, Limited
Jordan British Bank of the Middle East (as --
delegate of The Hongkong and Shanghai
Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited --
Republic of Korea The Hongkong and Shanghai Banking --
Corporation Limited
Latvia JSC Hansabank-Latvija --
Lebanon British Bank of the Middle East (as --
delegate of The Hongkong and Shanghai
Banking Corporation Limited)
Lithuania Vilniaus Bankas AB --
Malaysia Standard Chartered Bank Malaysia Berhad --
Mauritius The Hongkong and Shanghai Banking --
Corporation Limited
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South Africa --
12/31/98 3
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
The Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group (New Zealand) Limited --
Norway Christiania Bank og Kreditkasse --
Oman British Bank of the Middle East (as --
delegate of The Hongkong and Shanghai
Banking Corporation Limited)
Pakistan Deutsche Bank AG --
Peru Citibank, N.A. --
Philippines Standard Chartered Bank --
Poland Citibank (Poland) S.A. --
Bank Polska Kasa Opieki S.A.
Portugal Banco Comercial Portugues --
Romania ING Bank N.V. --
Russia Credit Suisse First Boston AO, Moscow (as --
delegate of Credit Suisse First Boston,
Zurich)
Singapore The Development Bank of Singapore Limited --
Slovak Republic Ceskoslovenska Obchodna Banka, A.S. --
Slovenia Bank Austria d.d. Ljubljana --
South Africa Standard Bank of South Africa Limited --
Spain Banco Santander, S.A. --
Sri Lanka The Hongkong and Shanghai Banking --
Corporation Limited
12/31/98 4
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Swaziland Standard Bank Swaziland Limited --
Sweden Skandinaviska Enskilda Banken --
Switzerland UBS AG --
Taiwan - R.O.C. Central Trust of China --
Thailand Standard Chartered Bank --
Trinidad & Tobago Republic Bank Limited --
Tunisia Banque Internationale Arabe de Tunisie --
Turkey Citibank, N.A. Ottoman Bank --
Ukraine ING Bank, Ukraine --
United Kingdom State Street Bank and Trust Company, London --
Branch
Uruguay Citibank, N.A. --
Venezuela Citibank, N.A. --
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe Limited --
Euroclear (The Euroclear System)/State Street London Limited
Cedel, S.A. (Cedel Bank, societe anonyme)/State Street London Limited
INTERSETTLE (for EASDAQ Securities)
</TABLE>
12/31/98 5
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Reserve Bank Information and
Transfer System
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium Caisse Interprofessionnelle de Depot et
de Virement de Titres S.A.
Banque Nationale de Belgique
Brazil Companhia Brasileira de Liquidacao e
Custodia (CBLC)
Bolsa de Valores de Rio de Janeiro
All SSB CLIENTS PRESENTLY USE CBLC
Central de Custodia e de Liquidacao
Financeira de Titulos
Bulgaria Central Depository AD
Bulgarian National Bank
Canada The Canadian Depository
for Securities Limited
People's Republic of China Shanghai Securities Central Clearing and
Registration Corporation
Shenzhen Securities Central Clearing Co.,
Ltd.
Costa Rica Central de Valores S.A. (CEVAL)
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice
11/20/98
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Croatia Ministry of Finance
National Bank of Croatia
Czech Republic Stredisko cennych papiru
Czech National Bank
Denmark Vaardipapircentralen (the Danish
Securities Center)
Egypt Misr Company for Clearing, Settlement,
and Central Depository
Estonia Eesti Vaaftpaberite Keskdepositoorium
Finland The Finnish Central Securities Depository
France Societe Interprofessionnelle
pour la Compensation des
Valeurs Mobilieres (SICOVAM)
Germany Deutsche Borse Clearing AG
Greece The Central Securities Depository
(Apothetirion Titlon AE)
Hong Kong The Central Clearing and
Settlement System
Central Money Markets Unit
Hungary The Central Depository and Clearing
House (Budapest) Ltd. (KELER)
[MANDATORY FOR GOV'T BONDS ONLY;
SSB DOES NOT USE FOR OTHER SECURITIES]
India The National Securities Depository
Limited
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice
11/20/98 2
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Indonesia Bank of Indonesia
Ireland Central Bank of Ireland
Securities Settlement Office
Israel The Tel Aviv Stock Exchange Clearing
House Ltd.
Bank of Israel
Italy Monte Titoli S.p.A.
Banca d'Italia
Ivory Coast Depositaire Central - Banque de Reglement
Jamaica The Jamaican Central Securities
Depository
Japan Bank of Japan Net System
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository Corporation
Latvia The Latvian Central Depository
Lebanon The Custodian and Clearing Center
of Financial Instruments for
Lebanon and the Middle East
(MIDCLEAR) S.A.L.
The Central Bank of Lebanon
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice
11/20/98 3
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Lithuania The Central Securities Depository of
Lithuania
Malaysia The Malaysian Central Depository Sdn.
Bhd.
Bank Negara Malaysia,
Scripless Securities Trading and
Safekeeping System
Mauritius The Central Depository & Settlement
Co. Ltd.
Mexico S.D. INDEVAL, S.A. de C.V.
(Iinstituto para el Deposito de Valores)
Morocco Maroclear
The Netherlands Nederlands Centraal lnstituut voor
Giraal Effectenverkeer B.V. (NECIGEF)
De Nederlandsche Bank N.V.
New Zealand New Zealand Central Securities
Depository Limited
Norway Verdipapirsentralen (the Norwegian
Registry of Securities)
Oman Muscat Securities Market
Pakistan Central Depository Company of Pakistan
Limited
Peru Caja de Valores y Liquidaciones S.A.
(CAVALI)
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice
11/20/98 4
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Philippines The Philippines Central Depository, Inc.
The Registry of Scripless Securities
(ROSS) of the Bureau of the Treasury
Poland The National Depository of Securities
(Krajowy Depozyt Papierow Wartokiowych)
Central Treasury Bills Registrar
Portugal Central de Valores Mobiliarios (Central)
Romania National Securities Clearing, Settlement
and Depository Co.
Bucharest Stock Exchange Registry
Division
Singapore The Central Depository (Pte) Limited
Monetary Authority of Singapore
Slovak Republic Stredisko Cennych Papierov
National Bank of Slovakia
Slovenia Klirinsko Depotna Druzba d.d.
South Africa The Central Depository Limited
Spain Servicio de Compensacion y
Liquidacion de Valores, S.A.
Banco de Espana,
Central de Anotaciones en Cuenta
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice
11/20/98 5
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Sri Lanka Central Depository System (Pvt) Limited
Sweden Vardepapperscentralen AB
(the Swedish Central Securities
Depository)
Switzerland Schweizerische Effekten - Giro AG
Taiwan - R.O.C. The Taiwan Securities Central
Depository Co., Ltd.
Thailand Thailand Securities Depository Company
Limited
Tunisia Societe Tunisienne lnterprofessionelle
de Compensation et de Depot de
Valeurs Mobilieres
Central Bank of Tunisia
Tunisian Treasury
Turkey Takas ve Saklama Bankasi A.S.
(TAKASBANK)
Central Bank of Turkey
Ukraine The National Bank of Ukraine
United Kingdom The Bank of England,
The Central Gilts Office and
The Central Moneymarkets Office
Uruguay Central Bank of Uruguay
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice
11/20/98 6
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Venezuela Central Bank of Venezuela
Zambia Lusaka Central Depository Limited
Bank of Zambia
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice
11/20/98 7
<PAGE>
SCHEDULE C
MARKET INFORMATION
PUBLICATION/TYPE OF INFORMATION BRIEF DESCRIPTION
(FREQUENCY)
THE GUIDE TO CUSTODY IN WORLD MARKETS An overview of safekeeping and
(annually) settlement practices and procedures
in each market in which State Street
Bank and Trust Company offers
custodial services.
GLOBAL CUSTODY NETWORK REVIEW Information relating to the
(annually) operating history and structure of
depositories and subcustodians
located in the markets in which
State Street Bank and Trust Company
offers custodial services, including
transnational depositories.
GLOBAL LEGAL SURVEY With respect to each market in which
(annually) State Street Bank and Trust Company
offers custodial services, opinions
relating to whether local law
restricts (i) access of a fund's
independent public accountants to
books and records of a Foreign Sub-
Custodian or Foreign Securities
System, (ii) the Fund's ability to
recover in the event of bankruptcy
or insolvency of a Foreign
Sub-Custodian or Foreign Securities
System, (iii) the Fund's ability to
recover in the event of a loss by a
Foreign Sub-Custodian or Foreign
Securities System, and (iv) the
ability of a foreign investor to
convert cash and cash equivalents to
U.S. dollars.
SUBCUSTODIAN AGREEMENTS Copies of the subcustodian contracts
(annually) State Street Bank and Trust Company
has entered into with each
subcustodian in the markets in which
State Street Bank and Trust Company
offers subcustody services to its US
mutual fund clients.
Network Bulletins (weekly): Developments of interest to
investors in the markets in which
State Street Bank and Trust Company
offers custodial services.
Foreign Custody Advisories (as With respect to markets in which
necessary): State Street Bank and Trust Company
offers custodial services which
exhibit special custody risks,
developments which may impact State
Street's ability to deliver expected
levels of service.
Consent of Independent Accountants
To the Trustees of Emerging Markets Debt Portfolio:
RE: Emerging Markets Debt Portfolio
AIM Emerging Markets Debt Fund
We consent to the inclusion in Amendment No. 9 to the Registration Statement on
Form N-1A, under the Investment Company Act of 1940, as amended, of Emerging
Markets Debt Portfolio, of our report dated December 18, 1998, on our audit of
the financial statements and financial highlights of the AIM Emerging Markets
Debt Fund, which report is included in the Annual Report to Shareholders for the
periods stated therein, which is also included in this Registration Statement.
We also consent to the reference to our Firm under the caption "Financial
Statements" in the statement of additional information.
/s/ PricewaterhouseCoopers LLP
- -------------------------------
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 25, 1999
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS LEGEND CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FUND'S
ANNUAL FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000893580
<NAME> AIM EMERGING MARKETS DEBT PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> OCT-31-1998
<INVESTMENTS-AT-COST> 223288
<INVESTMENTS-AT-VALUE> 177557
<RECEIVABLES> 16354
<ASSETS-OTHER> 647
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 194558
<PAYABLE-FOR-SECURITIES> 11071
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2188
<TOTAL-LIABILITIES> 13259
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 21253
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 195684
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10062
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (45700)
<NET-ASSETS> 181299
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 39015
<OTHER-INCOME> 957
<EXPENSES-NET> 2457
<NET-INVESTMENT-INCOME> 37515
<REALIZED-GAINS-CURRENT> (69502)
<APPREC-INCREASE-CURRENT> (49143)
<NET-CHANGE-FROM-OPS> (81130)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (187341)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2242
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2457
<AVERAGE-NET-ASSETS> 511484
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
