SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /x/
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Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
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/ / Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
AIM SERIES TRUST
----------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
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(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
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number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
AIM GLOBAL TRENDS FUND
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046
SPECIAL MEETING OF SHAREHOLDERS
, 1999
DEAR SHAREHOLDER:
The Board of Trustees ("Board") of AIM Series Trust ("Trust") has voted to
restructure AIM Global Trends Fund ("Fund"), the sole portfolio of the Trust. As
you are aware, the Fund currently seeks to achieve its investment objective of
long-term growth of capital by investing substantially all of its assets in the
AIM Theme Funds ("Theme Funds"). Currently, the Fund operates as a "fund of
funds" and invests in the Theme Funds in proportions related to each sector's
proportion in the Morgan Stanley Capital International All Country (AC) World
Index ("MSCI Index"). Under the restructuring proposed by A I M Advisors, Inc.
("AIM"), the Fund would redeem its investments in the Theme Funds and instead
would directly invest in equity securities of U.S. and foreign issuers in the
industry sectors in which the Theme Funds invest. In allocating the Fund's
assets among those sectors, AIM would actively manage the Fund and would not be
tied to each sector's relative proportion in the MSCI Index.
The Board and AIM believe that the proposed restructuring would benefit
the Fund and its shareholders. By investing directly in equity securities, the
Fund would be better able to maintain and modify the allocation of its assets
among global industry sectors. In order for the restructuring to occur, certain
matters must be approved by shareholders. Accordingly, a special meeting of
shareholders ("Meeting") will be held on August 25, 1999.
Attached are the Notice and Proxy Statement for the Meeting which describe
the proposals on which you are being asked to vote. THE BOARD UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" EACH OF THESE PROPOSALS.
Your vote is important. Please take a moment now to sign and return your
proxy card(s) in the enclosed postage-paid envelope. If we do not hear from you
after a reasonable amount of time, you may receive a telephone call from our
proxy solicitor, Shareholder Communications Corporation, reminding you to vote
your shares. Thank you for your cooperation and continued support. You may also
vote your shares on the web at http://www.aimfunds.com by following instructions
that appear on the enclosed proxy insert.
Sincerely,
Robert H. Graham
CHAIRMAN AND PRESIDENT
AIM GLOBAL TRENDS FUND
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
AUGUST 25, 1999
TO THE SHAREHOLDERS:
Notice is hereby given that a special meeting of shareholders ("Meeting")
of AIM Global Trends Fund ("Fund"), the sole investment portfolio of AIM Series
Trust will be held at 11 Greenway Plaza, Suite 100, Houston, Texas 77046, on
August 25, 1999, at 3:00 p.m., Central time, for the following purposes:
(1) To approve a new investment advisory agreement for the Fund;
(2) To approve changes to the fundamental investment restrictions of the
Fund;
(3) To elect a Trustee;
(4) To ratify the selection of independent public accountants; and
(5) To transact any other business, not currently contemplated, that may
properly come before the Meeting, in the discretion of the proxies
or their substitutes.
Shareholders of record at the close of business on June 21, 1999, are
entitled to notice of, and to vote at, the Meeting. Your attention is called to
the accompanying Proxy Statement. Whether or not you attend the Meeting, we urge
you to PROMPTLY COMPLETE, SIGN, AND RETURN THE ENCLOSED PROXY CARD, so that a
quorum will be present and a maximum number of shares may be voted.
BY ORDER OF THE BOARD,
Samuel D. Sirko
SECRETARY
HOUSTON, TEXAS
JULY __, 1999
YOUR VOTE IS VERY IMPORTANT. PLEASE COMPLETE, SIGN, AND RETURN THE ENCLOSED
PROXY CARD PROMPTLY.
4
PROXY STATEMENT
AIM GLOBAL TRENDS FUND
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046
-----------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
AUGUST 25, 1999
-----------
This Proxy Statement is being furnished to shareholders in connection with
the solicitation of proxies by the Board of Trustees ("Board") of AIM Series
Trust ("Trust"). These proxies are to be used at the Special Meeting of
Shareholders and at any adjournment thereof ("Meeting") to be held at the
offices of the Trust at 11 Greenway Plaza, Suite 100, Houston, Texas 77046, on
August 25, 1999, at 3:00 p.m., Central time. Only shareholders of record at the
close of business on June 21, 1999, are entitled to notice of and to vote at the
Meeting. Copies of this Proxy Statement and the accompanying materials will
first be mailed to shareholders on or about _____________, 1999.
AIM Global Trends Fund ("Fund") is the sole series of the Trust. The Fund
has four classes of shares, but for simplicity and clarity, all classes of
shares of beneficial interest in the Fund are referred to as "shares." Each
outstanding full share of the Fund is entitled to one vote, and each outstanding
fractional share of the Fund is entitled to a proportionate share of one vote,
with respect to each proposal to be voted upon by the shareholders. Information
about the vote necessary to approve a proposal is discussed below in connection
with the proposal.
If the accompanying proxy card is properly executed and returned by a
shareholder in time to be voted at the Meeting, the shares covered thereby will
be voted in accordance with the instructions marked thereon by the shareholder.
Executed proxies that are unmarked will be voted in accordance with the
recommendation of your Board as to all proposals described in this Proxy
Statement; and, at the discretion of the proxyholders, on any other matter that
may properly have come before the Meeting or any adjournments thereof. Any proxy
given pursuant to this solicitation may be revoked at any time before its
exercise by giving written notice to the Secretary of the Trust or by the
issuance of a subsequent proxy. To be effective, such revocation must be
received by the Secretary of the Trust prior to the Meeting. In addition, a
shareholder may revoke a proxy by attending the Meeting and voting in person.
The solicitation of proxies will be made primarily by mail but also may be made
by telephone, telegraph, telecopy, and personal interviews. Authorization to
execute proxies may be obtained by telephonic or electronically transmitted
instructions.
5
The presence in person or by proxy of shareholders of the Fund entitled to
cast one third of all the votes entitled to be cast at the Meeting shall
constitute a quorum at the Meeting. If a quorum is not present at the Meeting or
if a quorum is present but sufficient votes to approve any of the proposals
described in the Proxy Statement are not received, the persons named as proxies
may propose one or more adjournments of the Meeting to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of those shares represented at the Meeting in person or by proxy.
A shareholder vote may be taken on one or more of the proposals in this Proxy
Statement prior to any such adjournment if sufficient votes have been received
and it is otherwise appropriate.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote and the broker does not have discretionary voting
authority. Abstentions and broker non-votes will be counted as shares present
for purposes of determining whether a quorum is present, but will not be voted
for or against any proposal or for or against any adjournment to permit further
solicitation of proxies. Accordingly, abstentions and broker non-votes
effectively will be a vote against adjournment or against any proposal where the
required vote is a percentage of the shares present or outstanding. In addition,
abstentions and broker non-votes will not be counted as votes cast for purposes
of determining whether sufficient votes have been received to approve a
proposal.
There were __________ outstanding shares of the Fund as of the record
date, June 21, 1999 ("Record Date"). [To the knowledge of the Trust's
management, as of the Record Date, there were no beneficial owners of 5% or more
of the outstanding shares of any class of the Fund, except as indicated in
Exhibit C].
PROPOSAL NO. 1:
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT
BACKGROUND
The Fund currently seeks to achieve its investment objective of long-term
growth of capital by investing substantially all of its assets in the AIM Theme
Funds ("Theme Funds"), which focus their investments on the following global
industry sectors: consumer products and services, financial services, health
care, infrastructure, natural resources, and telecommunications and technology.
The Fund operates as a "fund of funds" and allocates its assets among the Theme
Funds according to the industry weighting of the companies comprising the Morgan
Stanley Capital International All Country (AC) World Index ("MSCI"), which is a
broad unmanaged index of global stock prices in 38 industry sectors.
A I M Advisors, Inc. ("AIM") and the Board believe that restructuring the
Fund would be beneficial to the Fund and its shareholders. Under the proposed
restructuring, the Fund would redeem its investments in the Theme Funds and
would directly invest primarily in equity securities of U.S. and foreign issuers
in any or all of the global industry sectors in which the Theme Funds invest.
The remainder of the Fund's assets could be invested in equity securities of
issuers in other global industry sectors or in debt securities of U.S.
and foreign issuers. Rather than committing portions of its assets to a
6
particular group of global industries based on their respective weighting in the
MSCI, under the proposed restructuring, AIM could allocate Fund assets to
industries and industry groups that it believed provided the most advantageous
investment opportunities at a given time. Control over individual equity
selection would thus move to the Fund's portfolio managers and away from the
portfolio managers of the six Theme Funds. The primary portfolio managers for
the restructured Fund would be Derek Webb, Michael Yellen, and Roger Mortimer
each of whom currently serves as a portfolio manager of each of the Theme Funds.
The proposed restructuring would not involve any change to the Fund's name
or investment objective. In order to effect the proposed restructuring, however,
shareholders of the Fund need to approve certain changes to the Fund's
operations. These changes are (1) the approval of a new investment advisory
agreement, described in this Proposal 1, and (2) the elimination of the Fund's
policy of concentrating its investments in other investment companies, which is
described in greater detail in Proposal 2A.
AIM currently serves as investment advisor and administrator to the Fund
pursuant to the Investment Management and Administration Contract between the
Trust and AIM dated May 29, 1998 ("current advisory agreement"). The current
advisory agreement was approved by the initial shareholder on or about May 29,
1998. Because the Fund currently invests in the Theme Funds, which are also
advised by AIM, in proportions dictated by the MSCI and without management
discretion, AIM does not directly receive any investment advisory fee from the
Fund. AIM does, however, receive investment advisory fees from each of the Theme
Funds in which the Fund invests. As a result, although the Fund does not
directly pay AIM an advisory fee, it does so indirectly through its investments
in the Theme Funds.
Under the proposed restructuring, the Fund would be actively managed by
AIM. To reflect AIM's direct management of the portfolio, AIM has proposed a new
advisory agreement with the Fund that, among other things, would impose an
advisory fee directly upon the Fund. The advisory fee would be calculated
according to the same advisory fee schedule that applies to the Theme Funds.
Thus, as a result of the proposed restructuring, shareholders of the Fund would
pay approximately the same advisory fees that they currently pay indirectly.
Accordingly, the shareholders of the Fund are being asked to approve a new
investment advisory agreement ("proposed advisory agreement"). AIM would
continue to serve as the Fund's administrator and accounting agent under a
separate administration agreement. AIM affiliates would continue to serve as the
Fund's transfer agent and distributor.
A description of the proposed advisory agreement is provided below under
"Comparison of Agreements" and "Other Terms of the Proposed Advisory Agreement"
sections. Such description is only a summary and is qualified by reference to
the form of investment advisory agreement attached hereto as Exhibit A. A
summary of the Board's considerations is provided below under "Board
Considerations."
COMPARISON OF AGREEMENTS
Under the current advisory agreement, AIM does not actively manage the
Fund's portfolio, but is simply responsible for the daily allocation and
7
periodic rebalancing of the Fund's assets among the Theme Funds based on a
predetermined allocation methodology. By contrast, under the proposed advisory
agreement, AIM would actively manage the Fund's portfolio. Specifically, AIM
would, among other things, perform research and analysis for the Fund on
pertinent information about significant developments and economic, statistical
and financial data; determine which issuers and securities would be represented
in the Fund's investment portfolios; and formulate and implement continuing
programs for the purchases and sales of the securities. The following table
shows the proposed advisory fee structure for the Fund. As noted above, this fee
structure is identical to that currently in place for the Theme Funds pursuant
to their advisory agreement with AIM.
ADVISORY FEE
------------
(BASED ON AVERAGE DAILY NET ASSETS)
-----------------------------------
0.975% of the first $500 million;
0.95% on the next $500 million;
0.925% on the next $500 million; and
0.90% on amounts thereafter.
The Fund does not pay any fees directly to AIM for services provided under
the current advisory agreement because such fees are paid by the underlying
Theme Funds. The Fund currently pays these advisory fees indirectly. If the
proposed advisory agreement is approved by shareholders, upon the restructuring,
AIM would receive a fee, pursuant to the fee structure set forth above, for the
investment advisory services that it provides to the Fund. The proposed fee
schedule for advisory services is the same as the fee schedule applicable to the
Theme Funds. Under the proposed advisory agreement, it is anticipated that the
Fund would have paid $455,541 to AIM during the last fiscal year.
Under the current advisory agreement, AIM bears the cost of all ordinary
business expenses of the Fund due to the Fund's investment in the Theme Funds.
Under the proposed advisory agreement, all of the ordinary business expenses not
specifically assumed by AIM incurred in the operations of the Fund and the
offering of its shares shall be paid by the Fund. These expenses include but are
not limited to brokerage commissions, taxes, legal, accounting, auditing or
governmental fees, custodian, transfer agent, and shareholder service agent
costs.
EXPENSES BEFORE THE RESTRUCTURING
ANNUAL FUND OPERATING EXPENSES
(expenses that are
deducted from Fund
assets)
CLASS A CLASS B CLASS C ADVISOR CLASS
MANAGEMENT FEES None None None None
DISTRIBUTION AND/OR 0.50% 1.00% 1.00% None
SERVICE (12B-1) FEES
OTHER EXPENSES (1) None None None None
TOTAL ANNUAL FUND 0.50 1.00 1.00 None
OPERATING EXPENSES
(1) "Other Expenses," including transfer agency, legal and audit fees, and other
operating expenses, are borne by the Fund's advisor.
8
The table above does not reflect the Fund's indirect PRO RATA share of the
fees and expenses incurred by the Theme Funds. The following table shows the
aggregate expense ratio of each class of the Fund based on a weighted average
of the expense ratios of Advisor Class shares of the Theme Fund in which the
Fund was invested as of October 31, 1998, plus the Fund's total operating
expenses. These percentages do not necessarily reflect the current allocation of
the Fund's assets to the Theme Funds.
AGGREGATE EXPENSES (INCLUDING THE FUND'S INDIRECT PRO RATA SHARE OF THE FEES AND
EXPENSES INCURRED BY THE THEME FUNDS)
CLASS A CLASS B CLASS C ADVISOR CLASS
AGGREGATE EXPENSES 1.95% 2.45% 2.45% 1.45%
ESTIMATED EXPENSES AFTER THE RESTRUCTURING
ANNUAL FUND OPERATING EXPENSES
(expenses that are
deducted from Fund
assets)
CLASS A CLASS B CLASS C ADVISOR CLASS
MANAGEMENT FEES 0.98% 0.98% 0.98% 0.98%
DISTRIBUTION AND/OR 0.50% 1.00% 1.00% None
SERVICE (12B-1) FEES
OTHER EXPENSES 0.80% 0.83% 0.83% 0.80%
(INCLUDING TRANSFER
AGENCY, LEGAL AND
AUDIT FEES, AND
OTHER OPERATING
EXPENSES) (1)
TOTAL ANNUAL FUND 2.28% 2.81% 2.81% 1.78%
OPERATING EXPENSES
EXPENSE 0.28% 0.31% 0.31% 0.28%
REIMBURSEMENT
NET EXPENSES (2) 2.00% 2.50% 2.50% 1.50%
(1) "Other Expenses" are estimated.
(2) AIM has contractually agreed to limit the Fund's net expenses.
A table containing fee schedules of comparable mutual funds advised by AIM
is attached hereto for your reference as Exhibit B.
OTHER TERMS OF THE PROPOSED ADVISORY AGREEMENT
In performing its obligations under the proposed advisory agreement, AIM
would be required to comply with all applicable laws. In the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of obligations
or duties hereunder on the part of AIM or any of its officers, directors, or
employees, AIM shall not be subject to liability to the Trust or to the Fund or
to any shareholder of the Fund for any act or omission in the course of, or
9
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
The proposed advisory agreement provides that, subject to the approval of
the Board and the shareholders of the Fund, AIM may delegate any and all of its
duties to a sub-adviser, provided that AIM shall continue to supervise the
performance of any such sub-adviser.
The proposed advisory agreement may be terminated at any time without
penalty by vote of the Board or by a vote of a majority of the outstanding
voting securities of the Fund, on 60 days' written notice to AIM. The proposed
advisory agreement will terminate automatically in the event of any assignment,
as defined by the Investment Company Act of 1940, as amended (the "1940 Act").
The proposed advisory agreement continues automatically for successive periods
not to exceed twelve months each, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of the independent Board
members, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Board or by vote of a majority of the outstanding
voting securities of the Fund.
BOARD CONSIDERATIONS
At a series of meetings with the Board, AIM described the anticipated
effects of the restructuring on the Fund. In connection with its review of the
proposed restructuring, the Board considered the performance of the Fund and of
the Theme Funds; the growth of the Fund since commencement of operations; the
impact of the restructuring on the Fund and its shareholders; information about
other Funds and their fees and expenses; and the likely costs associated with
the restructuring.
The Board also evaluated the proposed advisory agreement. The Board
considered that the proposed advisory agreement, including the terms relating to
the services to be provided and the fees and expenses payable by the Fund, are
not materially different from the current advisory agreements for the underlying
Funds. In approving the proposed advisory agreement, the Board took into account
that, except for the establishment of a fee that is currently paid to AIM by the
Fund indirectly through its investments in the underlying Funds, the
responsibility of the Fund for all ordinary operating expenses, and moving
provisions for administration services into a separate administration agreement
with AIM, there are no material differences between the provisions of the
current advisory agreement and the proposed advisory agreement.
In particular, the Board considered that, as the Fund is currently
structured, the aggregate annual expense ratios (including the Fund's indirect
PRO RATA share of the expenses of the Theme Funds) of Class A, Class B, Class C,
and Advisor Class shares are 1.95%, 2.45%, 2.45%, and 1.45%, respectively, of
the average daily net assets allocable to those classes of shares. The Board
further considered that, under the proposed advisory agreement, the expense
ratios of Class A, Class B, Class C, and Advisor Class shares would continue to
be capped, until June 30, 2000, at 2.00%, 2.50%, 2.50%, and 1.50%, respectively,
of the average daily net assets allocable to those classes of shares. The Board
was advised that the slighly lower current aggregate annual expense ratios were
due to the benefits of economies of scale realized by the Fund as a result of
its investment in certain larger Theme Funds.
The Board also considered the services to be supplied by AIM following the
restructuring and the fees to be charged relative both to those now charged
10
indirectly through the Theme Funds and to those charged by AIM to other global
equity portfolios and Funds that it advises. (See Exhibit B) The Board
considered each of the foregoing factors. Based upon these considerations, the
Board, including its members who are not interested persons of the Fund (as that
term is defined in the 1940 Act) ("independent Board members"), unanimously
approved the proposed advisory agreement and recommended approval by the
shareholders.
SHAREHOLDER APPROVAL REQUIREMENTS
Approval of the proposed advisory agreement on behalf of the Fund requires
the affirmative vote of a "majority of the outstanding voting securities" of the
Fund, which for this purpose means the affirmative vote of the lesser of (i)
more than 50% of the outstanding shares of the Fund or (ii) 67% or more of the
shares of the Fund present at the meeting if more than 50% of the outstanding
shares of the Fund are represented at the meeting in person or by proxy. The
proposed advisory agreement is completely contingent upon the approval of
Proposal 2A and will not become effective unless Proposal 2A is approved. If
Proposal 2A is not approved, AIM will continue to perform its duties under the
current advisory agreement and the Fund will continue to invest in the Theme
Funds, until the Board decides what further action to take with respect to the
Fund.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 1.
----------------------
PROPOSAL NO. 2:
APPROVAL OF CHANGES TO THE FUNDAMENTAL RESTRICTIONS
BACKGROUND
The Board proposes several changes to the fundamental investment
restrictions of the Fund. The first proposed change described below -- to the
Fund's policy of concentrating its investments in other investment companies --
is required to effect the restructuring of the Fund in the manner described in
Proposal 1. The remaining proposed revisions to the Fund's fundamental
restrictions are intended generally to promote uniformity with the fundamental
restrictions of other AIM Funds.
PROPOSED CHANGES
The following is the text and a summary description of the proposed
changes to the Fund's fundamental restrictions. Shareholders may request from
the Fund a copy of the Fund's Statement of Additional Information for the text
of the Fund's existing fundamental restrictions, by calling 1-800-347-4246.
With respect to each existing or proposed fundamental restriction, if a
percentage restriction is adhered to at the time of an investment or
transaction, a later increase or decrease in percentage resulting from a change
11
in the values of the Fund's portfolio securities or the amount of its total
assets will not be considered a violation of the restriction.
A. MODIFICATION OF FUNDAMENTAL RESTRICTION ON CONCENTRATION.
PROPOSED CHANGE: Upon the approval of Proposal 2A, the existing fundamental
restriction on concentration would be modified as follows:
The Fund will not make investments that will result in the concentration
(as that term may be defined or interpreted by the 1940 Act Laws,
Interpretations and Exemptions [as defined below]) of its investments in
the securities of issuers primarily engaged in the same industry. This
restriction does not limit the Fund's investment in (i) obligations issued
or guaranteed by the U.S. government, its agencies or instrumentalities,
(ii) tax-exempt obligations issued by government or political subdivisions
of governments, or (iii) bank instruments. In complying with this
restriction, the Fund will not consider a bank-issued guaranty or
financial guaranty insurance as a separate security.
DISCUSSION: The Fund currently has a fundamental policy that it "will
concentrate more than 25% of its assets in the mutual fund industry." Under the
proposed restructuring, the Fund will no longer invest substantially all of its
assets in other investment companies. Accordingly, in order for the Fund to
restructure in the manner contemplated, the current concentration policy must be
modified. Under the proposed modified policy, the Fund will not concentrate its
investments in any industry.
B. MODIFICATION OF FUNDAMENTAL RESTRICTION ON PORTFOLIO DIVERSIFICATION
PROPOSED CHANGE: Upon the approval of Proposal 2B, the existing fundamental
restriction on portfolio diversification would be modified as follows:
The Fund is a "diversified company" as defined in the 1940 Act. The Fund
will not purchase the securities of any issuer if, as a result, the Fund
would fail to be a diversified company within the meaning of the 1940 Act,
and the rules and regulations promulgated thereunder, as such statute,
rules, and regulations are amended from time to time or are interpreted
from time to time by the SEC staff (collectively, the "1940 Act Laws and
Interpretations") or to the extent that the Fund may be permitted to do so
by exemptive order or similar relief (collectively, with the 1940 Act Laws
and Interpretations, the "1940 Act Laws, Interpretations and Exemptions").
In complying with this restriction, however, the Fund may purchase
securities of other investment companies to the extent permitted by the
1940 Act Laws, Interpretations and Exemptions.
DISCUSSION: The Fund's current fundamental restriction on portfolio
diversification lists the percentage standards set forth in the 1940 Act for a
diversified fund. In order to qualify as a diversified investment company under
the 1940 Act, the Fund may not purchase securities of any one issuer if, as a
12
result, more than 5% of the Fund's total assets would be invested in securities
of that issuer or the Fund would own or hold more than 10% of the outstanding
voting securities of that issuer, except that up to 25% of the Fund's total
assets may be invested without regard to this limitation, and except that this
limitation does not apply to securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities or to securities issued by other
investment companies. The proposed modified policy adopts the same 1940 Act
standards. However, by not listing the percentage limitations, the proposed
policy would change automatically if the 1940 Act Laws, Interpretations and
Exemptions change.
C. ADDITION OF FUNDAMENTAL POLICY ON INVESTMENT IN INVESTMENT COMPANIES
PROPOSED CHANGE: Upon the approval of Proposal 2C, a fundamental policy on
investments in other investment companies would be added as follows:
The Fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objectives, policies and limitations as the Fund.
DISCUSSION: The new policy is proposed in order to provide the Fund the
flexibility to take advantage of potential efficiencies in the future available
through investment in another open-end fund. The Board has not considered any
proposal to authorize the Fund to invest its assets in this fashion. However,
adoption of this policy at this time would avoid the costs of a subsequent
shareholder meeting in the event the Board were to determine to invest the
Fund's assets in this fashion.
D. MODIFICATION OF FUNDAMENTAL RESTRICTION ON ISSUING SENIOR SECURITIES AND
BORROWING MONEY
PROPOSED CHANGE: Upon the approval of Proposal 2D, the existing fundamental
restriction on issuing senior securities and borrowing money would be modified
as follows:
The Fund may not borrow money or issue senior securities, except as
permitted by the 1940 Act Laws, Interpretations and Exemptions.
DISCUSSION: The Fund's current fundamental restriction limits borrowing to 33
1/3% of the Fund's total assets and prohibits the Fund from purchasing any
security while any borrowings are outstanding, except that the Fund may borrow
an additional 5% of the Fund's total assets for temporary or emergency purposes.
The proposed changes would make the Fund's restriction on borrowing money or
issuing senior securities no more limiting than required by the 1940 Act. The
Board believes that changing the Fund's fundamental restrictions in this manner
will provide flexibility for future contingencies. However, the Board does not
currently intend the change to affect the Fund's operations, under which the
Fund does not borrow for investment purposes.
13
E. MODIFICATION OF FUNDAMENTAL RESTRICTION ON UNDERWRITING SECURITIES
PROPOSED CHANGE: Upon the approval of Proposal 2E, the existing fundamental
restriction on underwriting securities would be modified as follows:
The Fund may not underwrite the securities of other issuers. This
restriction does not prevent the Fund from engaging in transactions
involving the acquisition, disposition or resale of its portfolio
securities, regardless of whether the Fund may be considered to be an
underwriter under the Securities Act of 1933.
DISCUSSION: The proposed changes to this fundamental restriction would eliminate
minor differences in the wording of the Fund's current restriction on
underwriting securities as compared to other AIM Funds. The substance of the
fundamental restriction would remain unchanged.
F. MODIFICATION OF FUNDAMENTAL RESTRICTION ON REAL ESTATE INVESTMENTS
PROPOSED CHANGE: Upon the approval of Proposal 2F, the existing fundamental
restriction on real estate investments would be modified as follows:
The Fund may not purchase real estate or sell real estate unless acquired
as a result of ownership of securities or other instruments. This
restriction does not prevent the Fund from investing in issuers that
invest, deal, or otherwise engage in transactions in real estate or
interests therein, or investing in securities that are secured by real
estate or interests therein.
DISCUSSION: The proposed changes to this fundamental restriction would eliminate
minor differences in the wording of the Fund's current restriction on real
estate investments as compared to other AIM Funds. The substance of the
fundamental restriction would remain unchanged.
G. MODIFICATION OF FUNDAMENTAL RESTRICTION ON MAKING LOANS
PROPOSED CHANGE: Upon the approval of Proposal 2G, the existing fundamental
restriction on making loans would be modified as follows:
The Fund may not make personal loans or loans to persons who control or
are under the common control with the Fund, except to the extent permitted
by 1940 Act Laws, Interpretations and Exemptions. This restriction does
not prevent the Fund from purchasing debt obligations, entering into
repurchase agreements, loaning its assets to broker-dealers or
institutional investors, or investing in loans, including assignments and
participation interests.
DISCUSSION: The proposed change to this fundamental restriction is intended to
promote uniformity with the analogous fundamental restriction of other AIM
Funds. The proposed restriction would narrow somewhat the scope of the current
fundamental restriction, which prohibits the Fund from making loans, subject to
substantially the same exceptions as in the proposed restriction. The proposed
restriction only prohibits personal loans or loans to persons who control or are
under the common control of the Fund.
14
REQUIRED VOTE. Approval of each of the changes contemplated by Proposal 2
requires the affirmative vote of a "majority of the outstanding voting
securities" of the Fund, which for this purpose means the affirmative vote of
the lesser of (1) more than 50% of the outstanding shares of the Fund or (2) 67%
or more of the shares of the Fund present at the meeting if more than 50% of the
outstanding shares of the Fund are represented at the meeting in person or by
proxy. If the proposed changes are approved by shareholders of the Fund at the
Meeting, those changes will be effective upon appropriate disclosure being made
in the Fund's Prospectus and Statement of Additional Information.
IF ONE OR MORE OF THE CHANGES CONTEMPLATED BY PROPOSAL 2 ARE NOT APPROVED
BY SHAREHOLDERS, THE RELATED EXISTING FUNDAMENTAL RESTRICTION(S) OF THE FUND
WILL CONTINUE IN EFFECT.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 2
----------------------
PROPOSAL NO. 3:
ELECTION OF A TRUSTEE
The Board has nominated the individual identified below for election to
the Board at the Meeting. It is the intention of each proxyholder named on the
accompanying proxy card to vote FOR the election of the nominee listed below
unless the Fund shareholder specifically indicates on his or her proxy card a
desire to withhold authority to vote for the nominee. The Board does not
contemplate that the nominee, who has consented to being nominated, will be
unable to serve as a Trustee for any reason but if that should occur prior to
the Meeting, the proxies will be voted for such other nominee as the Board may
recommend.
INFORMATION REGARDING THE NOMINEE FOR ELECTION AT THE MEETING
NAME, AGE, AND BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS AND OTHER POSITION(S) WITH TRUST AND
DIRECTORSHIPS TENURE
ROBERT H. GRAHAM, Age 52*........................................................... Trustee, Since 1998
Mr. Graham is Director, President and Chief Executive Officer, A I M Management Chairman of
Group Inc.; Director and President, AIM; Director and Senior Vice President, A I M the Board, and
Capital Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc. and President
Fund Management Company; and Director, AMVESCAP PLC.
INFORMATION REGARDING OTHER TRUSTEES
C. DEREK ANDERSON, Age 57........................................................... Trustee Since 1996
Mr. Anderson is President, Plantagenet Capital Management, LLC (an investment
partnership); Chief Executive Officer, Plantagenet Holdings, Ltd. (an investment
banking firm); Director, Anderson Capital Management, Inc., since 1988; Director,
PremiumWear, Inc. (formerly Munsingwear, Inc.) (a casual apparel company); and
15
Director, "R" Homes, Inc. and various other companies. Mr. Anderson is also a
director or trustee of several other investment companies registered under the 1940
Act that are managed or administered by AIM.
FRANK S. BAYLEY, Age 59............................................................. Trustee Since 1996
Mr. Bayley is a partner of the law firm of Baker & Mackenzie; and Director and
Chairman of C.D. Stimpson Company (a private investment company). Mr. Bayley is
also a director or trustee of several other investment companies registered under
the 1940 Act that are managed or administered by AIM.
ARTHUR C. PATTERSON, Age 55......................................................... Trustee Since 1996
Mr. Patterson is a Managing Partner of Accel Partners (a venture capital firm). He
also serves as a director of Viasoft and Pagemart, Inc. (both publicly-traded
software companies), as well as several privately held software and communications
companies. Mr. Patterson is also a director or trustee of several other investment
companies registered under the 1940 Act that are managed or administered by AIM.
RUTH H. QUIGLEY, Age 64............................................................. Trustee Since 1996
Ms. Quigley is a private investor. From 1984 to 1986, she was President of Quigley
Friedlander & Co., Inc. (a financial advisory services firm). Ms. Quigley is also
a director or trustee of several other investment companies registered under the
1940 Act that are managed or administered by AIM.
- ----------------------
*........Mr. Graham is deemed an "interested person" of the Trust, as defined in the 1940 Act, by virtue both of
his office and his association with AIM and its affiliates.
INFORMATION REGARDING THE EXECUTIVE
OFFICERS OF THE TRUST
NAME, AGE, AND BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS POSITION(S) WITH THE FUND AND
TENURE
ROBERT H. GRAHAM, Age 52.......................................................... Trustee, Since 1998
Mr. Graham is Director, President and Chief Executive Officer, A I M Management Chairman of
A I M Group Inc.; Director and President, A I M; Director and Senior Vice the Board, and
President, Capital Management, Inc., A I M Distributors, Inc., A I M Fund President
Services, Inc. and Fund Management Company; and Director, AMVESCAP PLC.
MELVILLE B. COX, Age 55........................................................... Vice President Since 1998
Mr. Cox is Vice President and Chief Compliance Officer, AIM, A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc., and Fund
Management Company.
GARY T. CRUM, Age 51.............................................................. Vice President Since 1998
Mr. Crum is Director and President, A I M Capital Management, Inc.; Director and
Senior Vice President, A I M and A I M Management Group Inc.; and Director, A I M
Distributors, Inc. and AMVESCAP.
CAROL F. RELIHAN, Age 44.......................................................... Vice President Since 1998
Ms. Relihan is Director, Senior Vice President, General Counsel, and Secretary,
AIM; Senior Vice President, General Counsel, and Secretary, A I M Management
Group Inc.; Director, Vice President and General Counsel, Fund Management
16
Company; Vice President and General Counsel, A I M Fund Services, Inc.; and Vice
President, A I M Capital Management, Inc. and A I M Distributors, Inc.
SAMUEL D. SIRKO, Age 39........................................................... Vice President Since 1998
Mr. Sirko is Assistant General Counsel and Assistant Secretary, A I M Management and Secretary
Group Inc., A I M Capital Management, Inc., A I M Distributors, Inc., A I M Fund
Services, Inc., and Fund Management Company; and Vice President, Assistant
General Counsel and Assistant Secretary of AIM.
DANA R. SUTTON, Age 40............................................................ Vice President Since 1999
Ms. Sutton is Vice President and Fund Controller, AIM and Assistant Vice and Treasurer
President and Assistant Treasurer, Fund Management Company.
To the knowledge of the Trust's management, as of the Record Date, the
Trustees and Officers of the Fund owned, as a group, less than 1% of the
outstanding shares of the Fund.
There were fifteen meetings of the Trust's Board held during the Fund's
fiscal year ended December 31, 1998. The Board has a Nominating and Audit
Committee composed of Miss Quigley (Chair) and Messrs. Anderson, Bayley and
Patterson. The purpose of the Nominating and Audit Committee is to nominate
persons to serve as Trustees, review annual audits of the Fund, and recommend
firms to serve as independent auditors for the Fund. The Nominating and Audit
Committee does not normally consider nominees recommended by shareholders.
During the Fund's last completed fiscal year, the Nominating and Audit Committee
met [once]. Each Trustee attended at least 75% of the total number of meetings
of the Board and, [for members thereof, of the Nominating and Audit Committee]
during the 1998 fiscal year (or in the case of Mr. Graham, during his tenure).
All of the Trustees also serve as directors or trustees of certain of the
investment companies managed, administered, or advised by AIM ("Fund Complex").
The Trust pays each Trustee, who is not a director, officer or employee of AIM
or any affiliated company, an annual retainer component, plus a per-meeting fee
component for each Board or committee meeting attended by such Trustee and
reimburses travel and other out-of-pocket expenses incurred in connection with
attending such meetings. The table below summarizes the compensation of the
Trust's Trustees and for the fiscal year ended December 31, 1998 and provides
the total compensation paid to the Board members by the Fund Complex for the
fiscal year ended December 31, 1998.
17
COMPENSATION TABLE(1)
TOTAL COMPENSATION
AGGREGATE COMPENSATION FROM THE TRUST
NAME OF PERSON, POSITION(2) FROM THE TRUST AND THE FUND COMPLEX(2)
- ------------------------ -------------- --------------------
C. Derek Anderson $7,700 $106,850
TRUSTEE
Frank S. Bayley $7,100 $90,650
TRUSTEE
Arthur C. Patterson $7,400 $98,600
TRUSTEE
Ruth H. Quigley $7,700 $99,500
TRUSTEE
- ----------------------
(1) The Trustees do not receive any pension or retirement benefits as compensation for their services to the
Fund.
(2) As an employee of AIM, Mr. Graham receives no additional compensation from the Trust for serving as a
Trustee.
REQUIRED VOTE. A plurality of all the votes cast at the Meeting is
required for the election of the Trustee.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 3
----------------------
PROPOSAL NO. 4:
RATIFICATION OF THE SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
At a meeting called for the purpose of such selection, the firm of
PricewaterhouseCoopers LLP was selected by the Board, including its trustees who
are not "interested persons" of the Trust or AIM as the independent public
accountants to audit the books and accounts of the Fund for the fiscal year
ending December 31, 1999 and to include its opinion in financial statements
filed with the SEC. The Board has directed the submission of this selection to
the shareholders for ratification. PricewaterhouseCoopers LLP has advised the
Board that it has no financial interest in the Fund. For the fiscal year ended
December 31, 1998, the professional services rendered by PricewaterhouseCoopers
LLP included the issuance of an opinion on the financial statements of the Fund
and an opinion on other reports of the Fund filed with the SEC. Representatives
of PricewaterhouseCoopers LLP are not expected to be present at the Meeting, but
have been given the opportunity to make a statement if they so desire and will
be available should any matter arise requiring their presence.
REQUIRED VOTE. Ratification of the selection of PricewaterhouseCoopers
LLP requires the affirmative vote of a majority of the votes cast thereon at
the Meeting.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL 4
----------------------
18
INFORMATION ABOUT THE FUND'S
ADVISOR, ADMINSTRATOR,
AND THE FUND'S DISTRIBUTOR
AIM serves as investment advisor to the Fund. AIM is located at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all
aspects of the Fund's operations and provides investment advisory services to
the Fund. AIM has acted as an investment advisor since its organization in 1976.
Today, AIM, together with its subsidiaries, advises or manages over 110
investment portfolios, including the Fund, encompassing a broad range of
investment objectives. A I M Distributors, Inc. ("AIM Distributors") acts as the
Fund's distributor. AIM Distributors is located at 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173.
AIM
DIRECTORS AND PRINCIPAL OFFICER (1)
- ------------------------------------------------------------------------------------------------------------------------------
NAME POSITION WITH AIM PRINCIPAL OCCUPATION
- ------------------------------------------------------------------------------------------------------------------------------
Charles T. Bauer, C.F.A. Director and Chairman Director and Chairman of the Board of Directors,
A I M Management Group Inc., AIM, A I M Capital
Management, Inc., A I M Distributors, Inc., A I M
Fund Services, Inc. and Fund Management Company;
and Vice Chairman and Director, AMVESCAP PLC.
- ------------------------------------------------------------------------------------------------------------------------------
Gary T. Crum Director and Senior Vice President Director and President, A I M Capital Management,
Inc.; Director and Senior Vice President, A I M
Management Group Inc. and A I M; and Director,
A I M Distributors, Inc. and AMVESCAP PLC.
- ------------------------------------------------------------------------------------------------------------------------------
Robert H. Graham Director and President Director, President and Chief Executive Officer,
A I M Management Group Inc.; Director and
President, AIM; Director and Senior Vice President,
A I M Capital Management, Inc., A I M Distributors,
Inc., A I M Fund Services, Inc. and Fund Management
Company; and Director, AMVESCAP PLC.
- ------------------------------------------------------------------------------------------------------------------------------
Dawn M. Hawley Director, Senior Vice President & Senior Vice President and Chief Financial Officer,
Treasurer A I M Management Group Inc., AIM; Vice President
and Treasurer, A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc. and
Fund Management Company.
- ------------------------------------------------------------------------------------------------------------------------------
Carol F. Relihan Director, Senior Vice President, Director, Senior Vice President, General Counsel &
General Counsel & Secretary Secretary, AIM; Senior Vice President, General
Counsel & Secretary, A I M Management Group Inc.;
Director, Vice President and General Counsel, Fund
Management Company; Vice President and General
Counsel, A I M Fund Services, Inc.; and Vice
President, A I M Capital Management, Inc. and A I M
Distributors, Inc.
- ------------------------------------------------------------------------------------------------------------------------------
19
(1) Each director and the principal officer may be reached at 11 Greenway
Plaza, Suite 100, Houston, Texas 77046-1173.
AIM and AIM Distributors are each indirect wholly-owned subsidiaries of
AMVESCAP PLC, which is 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.
AMVESCAP PLC is located at 11 Devonshire Square, London, EC2M 4YR, England.
ADDITIONAL INFORMATION ABOUT THE FUND
For more information with respect to the Trust and the Fund, please refer
to the Fund's Prospectus and Statement of Additional Information included in the
Trust's Registration Statement (SEC file No. 333-30551), and the most recent
annual and semi-annual reports to shareholders. These documents and other
information filed by the Trust may be inspected without charge and copied at the
public reference facilities maintained by the SEC at Room 1014, Judiciary Plaza,
450 Fifth Street, N.W., Washington, DC 20549. Copies of such material may also
be obtained from the Public Reference Section of the SEC at the prescribed
rates. The SEC maintains an internet web site at http://www.sec.gov that
contains information regarding the Trust, the Fund, and other registrants that
file electronically with the SEC.
GENERAL INFORMATION
SOLICITATION OF PROXIES
The Trust will request broker/dealer firms, custodians, nominees and
fiduciaries to forward proxy material to the beneficial owners of the shares
held of record by such persons. The Trust may reimburse such broker/dealer
firms, custodians, nominees and fiduciaries for their reasonable expenses
incurred in connection with such proxy solicitation. In addition to the
solicitation of proxies by mail, officers of the Trust and employees of AIM and
its affiliates, without additional compensation, may solicit Proxies in person
or by telephone. The costs associated with such solicitation and the Meeting
will be borne by AIM.
The Trust has retained Shareholder Communications Corporation ("SCC"), a
professional proxy solicitation firm, to assist in the solicitation of proxies.
You may receive a telephone call from this firm concerning this proxy
solicitation. The Trust estimates that SCC will be paid fees of approximately
$15,000. Because the Fund's expenses are expected to exceed the applicable
expense caps, the Trust anticipates that SCC's fees will be borne by AIM. In
addition, SCC will be paid for its expenses incurred; the amount of these
expenses will depend on the nature and extent of the services provided in
connection with the solicitation. THE BOARD DOES NOT KNOW OF ANY MATTERS TO BE
PRESENTED AT THE MEETING OTHER THAN THOSE DESCRIBED IN THIS PROXY STATEMENT, BUT
SHOULD ANY OTHER MATTER REQUIRING A VOTE OF SHAREHOLDERS ARISE, THE PROXYHOLDERS
WILL VOTE THEREON ACCORDING TO THEIR BEST JUDGMENT IN THE INTERESTS OF THE FUND.
20
PROPOSALS OF SHAREHOLDERS
Shareholders wishing to submit proposals for inclusion in a proxy
statement for a shareholder meeting subsequent to the Meeting, if any, should
send their written proposals to the Secretary of AIM Funds, 11 Greenway Plaza,
Suite 100, Houston, Texas 77046, within a reasonable time before the
solicitation of proxies for such meeting. The timely submission of a proposal
does not guarantee its inclusion. Normally, there will be no annual meeting of
shareholders in any year, except as required under the 1940 Act.
REPORTS TO SHAREHOLDERS
THE TRUST WILL FURNISH TO SHAREHOLDERS, WITHOUT CHARGE AND UPON REQUEST, A
COPY OF THE MOST RECENT ANNUAL REPORT AND A COPY OF THE MOST RECENT SEMI-ANNUAL
REPORT FOLLOWING SUCH ANNUAL REPORT OF THE FUND. REQUESTS FOR SUCH REPORTS MAY
BE MADE BY WRITING TO THE TRUST AT 11 Greenway Plaza, Suite 100, Houston, Texas
77046, OR BY CALLING (800) 347-4246.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETING MAY BE ASSURED,
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
BY ORDER OF THE BOARD,
SAMUEL D. SIRKO
SECRETARY
________, 1999
AIM Client Services
11 Greenway Plaza, Suite 100,
Houston, Texas 77046
21
EXHIBIT A
AIM SERIES TRUST
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this ____ day of ___________, 1999, by and between
AIM Series Trust, a Delaware business trust (the "Company") with respect to its
series of shares shown on Appendix A attached hereto, as the same may be amended
from time to time, and A I M Advisors, Inc., a Delaware corporation (the
"Advisor").
RECITALS
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, diversified management
investment company;
WHEREAS, the Advisor is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment advisor and engages in
the business of acting as an investment advisor;
WHEREAS, the Company's Agreement and Declaration of Trust authorizes the
Board of Trustees of the Company to classify shares of the Company, and as of
the date of this Agreement, the Company's Board of Trustees has authorized the
issuance of one series of shares representing interests in one investment
portfolio (such portfolio and any other portfolios hereafter added to the
Company being referred to collectively herein as the "Funds"); and
WHEREAS, the Company and the Advisor desire to enter into an agreement to
provide for investment advisory services to the Funds upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. ADVISORY SERVICES. The Advisor shall act as investment advisor for the
Funds and shall, in such capacity, supervise all aspects of the Funds'
operations, including the investment and reinvestment of cash, securities or
other properties comprising the Funds' assets, subject at all times to the
policies and control of the Company's Board of Trustees. The Advisor shall give
the Company and the Funds the benefit of its best judgment, efforts and
facilities in rendering its services as investment advisor.
2. INVESTMENT ANALYSIS AND IMPLEMENTATION. In carrying out its obligations
under Section 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Funds;
(b) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the
Funds, and whether concerning the individual issuers whose securities are
included in the assets of the Funds or the activities in which such
issuers engage, or with respect to securities which the Advisor considers
desirable for inclusion in the Funds' assets;
1
(c) determine which issuers and securities shall be represented in
the Funds' investment portfolios and regularly report thereon to the
Company's Board of Trustees; and
(d) formulate and implement continuing programs for the purchases
and sales of the securities of such issuers and regularly report thereon
to the Company's Board of Trustees;
and take, on behalf of the Company and the Funds, all actions which appear to
the Company and the Funds necessary to carry into effect such purchase and sale
programs and supervisory functions as aforesaid, including but not limited to
the placing of orders for the purchase and sale of securities for the Funds.
3. DELEGATION OF RESPONSIBILITIES. Subject to the approval of the Board of
Trustees and, if required by law, the shareholders of the Funds, the Advisor may
delegate to a sub-advisor certain of its duties enumerated in Section 2 hereof,
provided that the Advisor shall continue to supervise the performance of any
such sub-advisor.
4. CONTROL BY BOARD OF TRUSTEES. Any investment program undertaken by the
Advisor pursuant to this Agreement, as well as any other activities undertaken
by the Advisor on behalf of the Funds, shall at all times be subject to any
directives of the Board of Trustees of the Company.
5. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers Act and
any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Company, as the
same may be amended from time to time under the Securities Act of 1933 and
the 1940 Act;
(c) the provisions of the Agreement and Declaration of Trust of the
Company, as the same may be amended from time to time;
(d) the provisions of the by-laws of the Company, as the same may be
amended from time to time; and
(e) any other applicable provisions of state, federal or foreign law.
6. BROKER-DEALER RELATIONSHIPS. The Advisor is responsible for decisions
to buy and sell securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates. The Advisor's primary consideration
in effecting a security transaction will be to obtain execution at the most
favorable price. In selecting a broker-dealer to execute each particular
transaction, the Advisor will take the following into consideration: the best
net price available; the reliability, integrity and financial condition of the
broker-dealer; the size of and the difficulty in executing the order; and the
value of the expected contribution of the broker-dealer to the investment
performance of the Funds on a continuing basis. Accordingly, the price to the
Funds in any transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other aspects of the
fund execution services offered. Subject to such policies as the Board of
Trustees may from time to time determine, the Advisor shall not be deemed to
have acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Funds to pay a broker or
2
dealer that provides brokerage and research services to the Advisor an amount of
commission for effecting a fund investment transaction in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction, if the Advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Advisor's overall responsibilities with respect to
a particular Fund, other Funds of the Company, and to other clients of the
Advisor as to which the Advisor exercises investment discretion. The Advisor is
further authorized to allocate the orders placed by it on behalf of the Funds to
such brokers and dealers who also provide research or statistical material, or
other services to the Funds, to the Advisor, or to any sub-advisor. Such
allocation shall be in such amounts and proportions as the Advisor shall
determine and the Advisor will report on said allocations regularly to the Board
of Trustees of the Company indicating the brokers to whom such allocations have
been made and the basis therefor. In making decisions regarding broker-dealer
relationships, the Advisor may take into consideration the recommendations of
any sub-advisor appointed to provide investment research or advisory services in
connection with the Funds, and may take into consideration any research services
provided to such sub-advisor by broker-dealers.
7. COMPENSATION. The Company shall pay the Advisor as compensation for
services rendered hereunder an annual fee, payable monthly, based upon the
average daily net assets of the Funds as the same is set forth in Appendix A
attached hereto. The average daily net asset value of the Funds shall be
determined in the manner set forth in the Agreement and Declaration of Trust and
registration statement of the Company, as amended from time to time.
8. ADDITIONAL SERVICES. Upon the request of the Company's Board of
Trustees, the Advisor may perform certain accounting, shareholder servicing or
other administrative services on behalf of the Funds which are not required by
this Agreement. Such services will be performed on behalf of the Funds and the
Advisor may receive from the Funds such reimbursement for costs or reasonable
compensation for such services as may be agreed upon between the Advisor and the
Company's Board of Trustees based on a finding by the Board of Trustees that the
provision of such services by the Advisor is in the best interests of the
Company and its shareholders. Payment or assumption by the Advisor of any fund
expense that the Advisor is not otherwise required to pay or assume under this
Agreement shall not relieve the Advisor of any of its obligations to the Funds
nor obligate the Advisor to pay or assume any similar fund expense on any
subsequent occasions. Such services may include, but are not limited to:
(a) the services of a principal financial officer of the Company
(including applicable office space, facilities and equipment) whose normal
duties consist of maintaining the financial accounts and books and records
of the Company and the Funds, including the review and calculation of
daily net asset value and the preparation of tax returns; and the services
(including applicable office space, facilities and equipment) of any of
the personnel operating under the direction of such principal financial
officer;
(b) the services of staff to respond to shareholder inquiries
concerning the status of their accounts; providing assistance to
shareholders in exchanges among the mutual funds managed or advised by the
Advisor; changing account designations or changing addresses; assisting in
the purchase or redemption of shares; supervising the operations of the
custodian, transfer agent(s) or dividend disbursing agent(s) for the
Funds; or otherwise providing services to shareholders of the Funds; and
(c) such other administrative services as may be furnished from time to
time by the Advisor to the Company or the Funds at the request of the
Company's Board of Trustees.
3
9. EXPENSES OF THE FUNDS. All of the ordinary business expenses incurred
in the operations of the Funds and the offering of their shares shall be borne
by the Funds unless specifically provided otherwise in this Agreement. These
expenses borne by the Funds include but are not limited to brokerage
commissions, taxes, legal, accounting, auditing, or governmental fees, the cost
of preparing share certificates, custodian, transfer and shareholder service
agent costs, expenses of issue, sale, redemption and repurchase of shares,
expenses of registering and qualifying shares for sale, expenses relating to
directors and shareholder meetings, the cost of preparing and distributing
reports and notices to shareholders, the fees and other expenses incurred by the
Company on behalf of the Funds in connection with membership in investment
company organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to the Funds' shareholders.
10. NON-EXCLUSIVITY. The services of the Advisor to the Company and the
Funds are not to be deemed to be exclusive, and the Advisor shall be free to
render investment advisory and administrative or other services to others
(including other investment companies) and to engage in other activities. It is
understood and agreed that officers or directors of the Advisor may serve as
officers or directors of the Company, and that officers or directors of the
Company may serve as officers or directors of the Advisor to the extent
permitted by law; and that the officers and directors of the Advisor are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors
or trustees of any other firm or trust, including other investment advisory
companies.
11. TERM AND APPROVAL. This Agreement shall become effective with respect
to a Fund if approved by the shareholders of such Fund, and if so approved, this
Agreement shall thereafter continue in force for an initial period of two years
and may be continued from year to year thereafter, provided that the
continuation of the Agreement is specifically approved at least annually:
(a) (i) by the Company's Board of Trustees or (ii) by the vote of "a
majority of the outstanding voting securities" of such Fund (as defined in
Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the trustees who are not
parties to this Agreement or "interested persons" (as defined in the 1940
Act) of a party to this Agreement (other than as Company trustees), by
votes cast in person at a meeting specifically called for such purpose.
12. TERMINATION. This Agreement may be terminated as to the Company or as
to any one or more of the Funds at any time, without the payment of any penalty,
by vote of the Company's Board of Trustees or by vote of a majority of the
outstanding voting securities of the applicable Fund, or by the Advisor, on
sixty (60) days' written notice to the other party. The notice provided for
herein may be waived by the party entitled to receipt thereof. This Agreement
shall automatically terminate in the event of its assignment, the term
"assignment" for purposes of this paragraph having the meaning defined in
Section 2(a)(4) of the 1940 Act.
13. LIABILITY OF ADVISOR AND INDEMNIFICATION. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Advisor or any of its officers, directors or
employees, the Advisor shall not be subject to liability to the Company or to
the Funds or to any shareholder of the Funds for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
14. LIABILITY OF SHAREHOLDERS. Notice is hereby given that, as provided by
applicable law, the obligations of or arising out of this Agreement are not
4
binding upon any of the shareholders of the Company individually but are binding
only upon the assets and property of the Company and that the shareholders shall
be entitled, to the fullest extent permitted by applicable law, to the same
limitation on personal liability as stockholders of private corporations for
profit.
15. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other party
entitled to receipt thereof at such address as such party may designate for the
receipt of such notice. Until further notice to the other party, it is agreed
that the address of the Company shall be and that of the Advisor shall be Eleven
Greenway Plaza, Suite 100, Houston, Texas 77046.
16. QUESTIONS OF INTERPRETATION. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act or the Advisers Act shall be resolved
by reference to such term or provision of the 1940 Act or the Advisers Act and
to interpretations thereof, if any, by the United States Courts or in the
absence of any controlling decision of any such court, by rules, regulations or
orders of the Securities and Exchange Commission issued pursuant to said Acts.
In addition, where the effect of a requirement of the 1940 Act or the Advisers
Act reflected in any provision of the Agreement is revised by rule, regulation
or order of the Securities and Exchange Commission, such provision shall be
deemed to incorporate the effect of such rule, regulation or order. Subject to
the foregoing, this Agreement shall be governed by and construed in accordance
with the laws (without reference to conflicts of law provisions) of the State of
Delaware.
17. 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 advisor to the
Company with respect to such series of shares.
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.
AIM SERIES TRUST
(a Delaware business trust)
Attest:
________________________________ By:_________________________
ASSISTANT SECRETARY PRESIDENT
(SEAL)
A I M ADVISORS, INC.
Attest:
________________________________ By:_________________________
ASSISTANT SECRETARY PRESIDENT
(SEAL)
6
APPENDIX A
TO
MASTER INVESTMENT ADVISORY AGREEMENT
OF
AIM SERIES TRUST
The Company shall pay the Advisor, out of the assets of a Fund, as full
compensation for all services rendered and all facilities furnished hereunder, a
management fee for such Fund set forth below. Such fees shall be calculated by
applying the following annual rates to the average daily net assets of such Fund
for the calendar year computed in the manner used for the determination of the
net asset value of shares of such Fund.
AIM GLOBAL TRENDS FUND
NET ASSETS ANNUAL RATE
- ---------- -----------
First $500 million.............................................. 0.975%
Next $500 million.............................................. 0.95%
Next $500 million.............................................. 0.925%
On amounts thereafter.......................................... 0.90%
7
EXHIBIT B
FEE CHART FOR COMPARABLE AIM FUNDS
- -------------------------------------------------------------------------------------------------------------
FUND ADVISORY FEE TOTAL AVERAGE NET ASSETS
---- ------------ ------------------------
(BASED ON AVERAGE DAILY NET ASSETS) FOR THE MOST RECENTLY
----------------------------------- ---------------------
COMPLETED FISCAL YEAR
---------------------
- -------------------------------------------------------------------------------------------------------------
AIM Global Consumer Products and 0.975% of the first $500 million; $ 182,949,344
Services Fund 0.95% on the next $500 million;
0.925% on the next $500 million; and
0.90% on amounts thereafter.
- -------------------------------------------------------------------------------------------------------------
AIM Global Financial Services Fund 0.975% of the first $500 million; $ 100,032,253
0.95% on the next $500 million;
0.925% on the next $500 million; and
0.90% on amounts thereafter.
- -------------------------------------------------------------------------------------------------------------
AIM Global Health Care Fund 0.975% of the first $500 million; $ 528,559,525
0.95% on the next $500 million;
0.925% on the next $500 million; and
0.90% on amounts thereafter.
- -------------------------------------------------------------------------------------------------------------
AIM Global Infrastructure Fund 0.975% of the first $500 million; $ 84,011,067
0.95% on the next $500 million;
0.925% on the next $500 million; and
0.90% on amounts thereafter.
- -------------------------------------------------------------------------------------------------------------
AIM Global Resources Fund 0.975% of the first $500 million; $ 92,848,358
0.95% on the next $500 million;
0.925% on the next $500 million; and
0.90% on amounts thereafter.
- -------------------------------------------------------------------------------------------------------------
AIM Global Telecommunications and 0.975% of the first $500 million; $1,621,328,699
Technology Fund 0.95% on the next $500 million;
0.925% on the next $500 million; and
0.90% on amounts thereafter.
- -------------------------------------------------------------------------------------------------------------
AIM International Equity Fund 0.95% of the first $1 billion; $2,456,329,774
0.90% on amounts thereafter.
- -------------------------------------------------------------------------------------------------------------
AIM Global Growth Fund 0.85% of the first $1 billion; $ 475,584,904
0.80% on amounts thereafter.
- -------------------------------------------------------------------------------------------------------------
AIM Global Aggressive Growth Fund 0.90% of the first $1 billion; $2,309,012,837
0.85% on amounts thereafter.
- -------------------------------------------------------------------------------------------------------------
EXHIBIT C
OWNERSHIP OF THE FUND
Listed below is the name, address and percent ownership of each person who
as of _________, 1999, to the knowledge of the Trust's management, owned
beneficially 5 percent or more of the outstanding shares of the Fund:
PERCENT
NUMBER OF BENEFICIAL
NAME AND ADDRESS SHARES OWNED OWNERSHIP
---------------- ------------ ---------
[ ]
[ ]
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR
PROXY TODAY!
Please detach at perforation before mailing.
PROXY PROXY SOLICITED BY THE BOARD OF TRUSTEES OF PROXY
AIM GLOBAL TRENDS FUND
(THE SOLE INVESTMENT PORTFOLIO OF AIM SERIES TRUST)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS AUGUST 25, 1999
The undersigned hereby appoints Samuel D. Sirko and Gary T. Crum, and each
of them separately, proxies with the power of substitution to each, and
hereby authorizes them to represent and to vote, as designated below, at
the Special Meeting of Shareholders of AIM Global Trends Fund, the sole
investment portfolio of AIM Series Trust, on August 25, 1999 at 3:00 p.m.
Central time, and at any adjournment thereof, all of the shares of the Fund
which the undersigned would be entitled to vote if personally present. IF
THIS PROXY IS SIGNED AND RETURNED WITH NO CHOICES INDICATED, THE SHARES
WILL BE VOTED "FOR" THE APPROVAL OF EACH PROPOSAL.
CONTROL NUMBER: NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS
PROXY CARD. All joint owners should sign. When signing
as executor, administrator, attorney, trustee or
guardian or as custodian for a minor, please give full
title as such. If a corporation, please sign in full
corporate name and indicate the signer's office. If a
partner, sign in the partnership name.
------------------------------------------------------
Signature
------------------------------------------------------
Signature (if held jointly)
------------------------------------------------------
Dated
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR
PROXY TODAY!
Please detach at perforation before mailing.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. THE TRUSTEES
RECOMMEND VOTING "FOR" EACH PROPOSAL.
TO VOTE, FILL IN THE BOX COMPLETELY. EXAMPLE: / /
FOR AGAINST ABSTAIN
1. To approve a new investment advisory agreement for AIM / / / / / /
Global Trends Fund.
2. To approve changes to the fundamental investment restrictions of the
Fund:
(A) The modification of the fundamental restriction on / / / / / /
concentration.
(B) The modification of the fundamental restriction on / / / / / /
portfolio diversification.
(C) The addition of a fundamental policy on / / / / / /
investments in investment companies.
(D) The modification of the fundamental restriction on / / / / / /
issuing senior securities and borrowing money.
(E) The modification of the fundamental restriction on / / / / / /
underwriting securities.
(F) The modification of the fundamental restriction on / / / / / /
real estate investments.
(G) The modification of the fundamental restriction on / / / / / /
making loans.
WITHHOLD
FOR AUTHORITY
3. To elect Robert H. Graham as Trustee. / / / /
FOR AGAINST ABSTAIN
4. To ratify the selection of PricewaterhouseCoopers LLP / / / / / /
as independent public accountants.
5. IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE SPECIAL MEETING OR ANY ADJOURNMENT THEREOF.