SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
CIM High Yield Securities
-------------------------
(Name of Registrant as Specified in Its Charter)
---------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
CIM HIGH YIELD SECURITIES
400 W. Market Street, Suite 3300
Louisville, Kentucky 40202
September 3, 2004
Dear Shareholder:
The accompanying materials relate to the Annual Meeting of Shareholders
of CIM High Yield Securities. The Meeting will be held at the offices of Bingham
McCutchen LLP, 150 Federal Street, 25th Floor, Boston, Massachusetts on October
8, 2004 at 11:00 a.m. Eastern time.
At the Meeting, you will be asked to vote on a proposal to elect one
(1) Trustee for the Fund, and to transact such other business as may properly
come before the Meeting and any adjournment thereof. The proposal is described
in the accompanying Notice and Proxy Statement.
YOUR PARTICIPATION AT THIS MEETING IS VERY IMPORTANT. If you cannot
attend the Meeting, you may participate by proxy. As a shareholder, you cast one
vote for each share that you own. Please take a few moments to read the enclosed
materials and then cast your vote on the enclosed proxy card.
VOTING TAKES ONLY A FEW MINUTES. EACH SHAREHOLDER'S VOTE IS IMPORTANT.
YOUR PROMPT RESPONSE IS GREATLY APPRECIATED.
After you have voted on the proposal, please be sure to SIGN YOUR PROXY
CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
We appreciate your participation in this important Meeting. Thank you.
Sincerely,
A. George Baumann
President
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense to the Fund involved in
validating your vote if you fail to sign your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the
registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the proxy
should be indicated unless it is reflected in the form of registration. For
example:
REGISTRATION VALID SIGNATURE
------------ ---------------
CORPORATE ACCOUNTS
------------------
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
TRUST ACCOUNTS
--------------
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
----------------------------
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
CIM HIGH YIELD SECURITIES
400 W. MARKET STREET, SUITE 3300
LOUISVILLE, KENTUCKY 40202
----------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 8, 2004
----------------------
To the Shareholders of CIM HIGH YIELD SECURITIES:
Notice is hereby given that the Annual Meeting of Shareholders of CIM
High Yield Securities (the "Fund"), a Massachusetts business trust, will be held
at the offices of Bingham McCutchen LLP, 150 Federal Street, 25th Floor, Boston,
Massachusetts 02110, on October 8, 2004, at 11:00 a.m. Eastern time, for the
following purposes:
Proposal 1. To elect one (1) Trustee of the Fund.
Proposal 2. To transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Trustees has fixed the close of business on August 16,
2004 as the record date for the determination of shareholders entitled to notice
of and to vote at the meeting. The Proxy Statement and proxy card are expected
to be mailed to shareholders on or about September 3, 2004.
By order of the Board of Trustees,
Jeffrey H. Kupor
Secretary
September 3, 2004
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SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO PROMPTLY
COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON
THE INSIDE COVER.
- --------------------------------------------------------------------------------
CIM HIGH YIELD SECURITIES
400 W. MARKET STREET, SUITE 3300
LOUISVILLE, KENTUCKY 40202
-------------------------------
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 8, 2004
-------------------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Trustees of CIM High Yield Securities, a
Massachusetts business trust (the "Fund"), for use at the Annual Meeting of
Shareholders of the Fund to be held on October 8, 2004, at 11:00 a.m. Eastern
time, at the offices of Bingham McCutchen LLP, 150 Federal Street, 25th Floor,
Boston, Massachusetts 02110, and at any adjournments thereof (collectively, the
"Meeting"). A Notice of Annual Meeting of Shareholders and a proxy card
accompany this Proxy Statement.
Proxy solicitations will be made, beginning on or about September 3,
2004, primarily by mail, but such solicitations may also be made by telephone or
personal interviews conducted by officers or employees of the Fund; INVESCO
Institutional (N.A.), Inc. ("INVESCO" or the "Adviser"), the investment adviser
of the Fund; and PFPC Inc., ("PFPC") the administrator, accounting agent and
transfer agent of the Fund and a subsidiary of The PNC Financial Services Group
Inc., or any of their affiliates. The costs of proxy solicitation and expenses
incurred in connection with the preparation of this Proxy Statement and its
enclosures will be paid by the Fund. The Fund will also reimburse brokerage
firms and others for their expenses in forwarding solicitation material to the
beneficial owners of Fund shares.
THE FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS ARE AVAILABLE
UPON REQUEST, WITHOUT CHARGE, BY WRITING TO PFPC INC., P.O. BOX 43027,
PROVIDENCE, RI 02940-3027, OR BY CALLING 1-800-331-1710. THIS PROXY STATEMENT
AND THE ENCLOSED PROXY CARD ARE EXPECTED TO BE MAILED TO SHAREHOLDERS ON OR
ABOUT SEPTEMBER 3, 2004.
If the enclosed proxy card is properly executed and returned in time to
be voted at the Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. If no instructions are marked
on the enclosed proxy card, shares represented thereby will be voted in the
discretion of the persons named on the proxy card. Accordingly, unless
instructions to the contrary are marked thereon, a proxy will be voted FOR the
election of the nominee as Trustee, and FOR any other matters deemed
appropriate. Any shareholder who has given a proxy has the right to revoke it at
any time prior to its exercise either by attending the Meeting and voting his or
her shares in person, or by submitting a letter of revocation or a later-dated
proxy to the Fund at the above address prior to the date of the Meeting.
Proxies that reflect abstentions or broker "non-votes" (i.e., shares
held by brokers or nominees as to which (i) instructions have not been received
from the beneficial owners or the persons entitled to vote and (ii) the broker
or nominee does not have discretionary voting power on a particular matter) will
be counted as shares that are present for purposes of determining the presence
of a quorum. For this reason, abstentions and broker "non-votes" will have the
effect of a "no" vote for purposes of obtaining the
requisite approval of the proposal. Under the By-Laws of the Fund, a quorum is
constituted by the presence in person or by proxy of the holders of a majority
of the outstanding shares of the Fund.
The close of business on August 16, 2004 has been fixed as the record
date (the "Record Date") for the determination of shareholders entitled to
notice of and to vote at the Meeting and all adjournments thereof.
The Fund has one class of shares of beneficial interest, par value $.01
per share. On the Record Date there were 6,116,774.7660 shares outstanding. Each
share is entitled to one vote at the Meeting, and fractional shares are entitled
to proportionate shares of one vote. To the knowledge of the Board of Trustees,
as of August 16, 2004, no single shareholder or "group" (as that term is used in
Section 13(d) of the Securities Exchange Act of 1934 (the "1934 Act"),
beneficially owned more than 5% of the Fund's outstanding Shares. Information as
to beneficial ownership is based on reports filed with the Securities and
Exchange Commission ("SEC") by such holders. As of August 16, 2004, Cede & Co.,
a nominee partnership of The Depository Trust Company, located at 55 Water
Street - 25th Floor, New York, New York 10041-0002, held 5,803,057.0000 or
94.87% of the Fund's Shares
In order that your Shares may be represented at the Meeting, you are
requested to:
-- indicate your instructions on the proxy card;
-- date and sign the proxy card;
-- mail the proxy card promptly in the enclosed envelope which
requires no postage if mailed in the continental United States;
and
-- allow sufficient time for the proxy to be received on or before
5:00 P.M., on OCTOBER 6, 2004.
PROPOSAL 1: ELECTION OF TRUSTEE
The Board of Trustees is divided into three classes. Each year the term
of office of one class will expire. At the Meeting, one (1) of the four Trustees
of the Fund is to be elected, to hold office for a period of three years and
until a successor is elected and qualified. The nominee, Dr. Bruce H. Olson, is
currently a Trustee of the Fund and has indicated that he will serve, if
elected, but if he should be unable to serve, the proxy will be voted FOR any
other person determined by the persons named in the proxy in accordance with
their judgment.
The business and affairs of the Fund are managed under the direction of
the Fund's Board of Trustees, none of whom are considered to be interested
trustees under the Investment Company Act of 1940 (the "1940 Act"). Information
pertaining to the Trustees and officers of the Fund is set forth below.
TRUSTEES:
- -------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
TERM OF IN FUND
POSITION(S) OFFICE AND PRINCIPAL COMPLEX OTHER
NAME, ADDRESS 1, AND HELD WITH LENGTH OF OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS HELD
AGE THE FUND TIME SERVED PAST FIVE YEARS TRUSTEE BY TRUSTEE
- -------------------------------------------------------------------------------------------------------------------------
DR. DONALD RATAJCZAK, Chairman of Term: Consulting Economist 1 Director, Assurance
Age: 61 the Board of 2002-2005; (self-employed), April America (auto
Trustees Trustee 2003-present; insurance);
since 1987. Former Chairman and CEO Director, Ruby
of Brainworks Ventures, Tuesday, Inc.
an enterprise and asset (restaurant);
management business from Director, Morgan,
April 2000 to April Keegan & Company
2003; Former Director, (investment firm)
Economic Forecasting until March 30,
Center, Georgia State 2001, remains a
University from July consulting
1973 to June 2000; economist; Director,
Professor, Georgia State Crown Crafts
University (retired June (consumer products
30, 2000). company); Director,
TBC Corporation
(tire marketing and
distribution
company); Director,
Citizens Bancshares
Corp. (Community
Bank); Director,
Regan Holdings.
(insurance marketing
company).
- -------------------------------------------------------------------------------------------------------------------------
ROBERT G. WADE, JR., Trustee Term: Consultant to INVESCO, 1 N/A
Age: 77 2002-2005; Inc. from November 1996
Trustee to December 1998; retired
since 1987. in 1998.
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
TERM OF IN FUND
POSITION(S) OFFICE AND PRINCIPAL COMPLEX OTHER
NAME, ADDRESS 1, AND HELD WITH LENGTH OF OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS HELD
AGE THE FUND TIME SERVED PAST FIVE YEARS TRUSTEE BY TRUSTEE
- -------------------------------------------------------------------------------------------------------------------------
JOHN F. NICKOLL, Trustee Term: Director, Chairman, 1 Chairman of Wells
Age: 69 2003-2006; President and Chief Fargo Business
Trustee Executive Officer of The Credit.
since 1987. Foothill Group Inc., a
commercial finance and
asset management company.
- -------------------------------------------------------------------------------------------------------------------------
DR. BRUCE H. OLSON, Trustee Term: Professor of Finance, 1 N/A
Age: 69 2001-2004; Miami University (Ohio)
Trustee
since 1987.
- -------------------------------------------------------------------------------------------------------------------------
OFFICERS:
- -------------------------------------------------------------------------------------------------------------------------
TERM OF OFFICE AND
NAME, ADDRESS POSITION(S) HELD LENGTH OF TIME PRINCIPAL OCCUPATION(S) DURING PAST
AND AGE WITH THE FUND SERVED FIVE YEARS
- -------------------------------------------------------------------------------------------------------------------------
A. GEORGE President Term: Until successor is Head of Institutional Fixed Income at
BAUMANN 2, elected; Since 2002 INVESCO since January 2001; President
Age: 47 and CEO of PRIMCO Capital Management,
January 1998 - December 2000; President
of PRIMCO Capital Management, 1995-1998.
- -------------------------------------------------------------------------------------------------------------------------
CINDY M. Treasurer Term: Until successor is Deputy Finance Director, INVESCO North
CAMERON 2, elected; Since 2002 America since January 2004; Chief
Age: 39 Financial Officer of INVESCO's
Institutional Fixed Income Division
January 2000-December 2003; Controller
of PRIMCO Capital Management, January
1996 - December 1999.
- -------------------------------------------------------------------------------------------------------------------------
JEFFREY H. KUPOR 3, Secretary Term: Until successor is General Counsel, INVESCO Institutional
Age: 36 elected; Since 2003 (N.A.), Inc., since December 2003; Asst.
General Counsel of AMVESCAP Group
Services, Inc., January 2002-December
2003; General Counsel and Secretary,
Z-Tel Technologies, Inc., November 1999-
December 2001; Counsel of AIM Management
Group Inc., January 1998-November 1999.
- -------------------------------------------------------------------------------------------------------------------------
<FN>
1 The address for each Trustee is 1166 Avenue of the Americas, 27th Floor, New York, NY 10036.
2 The address for these officers is 400 W. Market St., Suite 3300, Louisville, KY 40202-1662.
3 The address for this officer is 1360 Peachtree Street, NE, Suite 100, Atlanta, GA 303463.
</FN>
BENEFICIAL OWNERSHIP OF SHARES HELD IN THE FUND BY EACH TRUSTEE AND NOMINEE FOR
ELECTION AS TRUSTEE
Set forth in the table below is the dollar range of equity securities
in the Fund beneficially owned by each Trustee, as of July 31, 2004.
- --------------------------------------------------------------------------------------------------
AGGREGATE DOLLAR RANGE OF
EQUITY SECURITIES IN ALL
DOLLAR RANGE OF EQUITY FUNDS OVERSEEN BY THE
NAME OF TRUSTEE SECURITIES IN THE FUND TRUSTEE
- --------------------------------------------------------------------------------------------------
John F. Nickoll $10,001-$50,000 $10,001-$50,000
- --------------------------------------------------------------------------------------------------
Dr. Bruce H. Olson $1-$10,000 $1-$10,000
- --------------------------------------------------------------------------------------------------
Dr. Donald Ratajczak $50,001-$100,000 $50,001-$100,000
- --------------------------------------------------------------------------------------------------
Robert G. Wade, Jr. $10,001-$50,000 $10,001-$50,000
- --------------------------------------------------------------------------------------------------
As of August 16, 2004, none of the Trustees or their immediate family
members owned beneficially or of record securities in the Adviser or any entity
directly or indirectly controlling, controlled by, or under common control with
the Adviser, nor did any Trustee purchase or sell securities of the Adviser or
its parents, or subsidiaries of either.
As of August 16, 2004, the officers and Trustees of the Trust owned
beneficially less than 1% of the Fund's outstanding shares.
The Fund pays each Trustee not affiliated with the Adviser or its
affiliates an annual fee of $6,000 plus $1,000 as compensation for each board
meeting and committee meeting attended. Each Trustee is reimbursed for travel
and out-of-pocket expenses associated with attending board and committee
meetings. The Board of Trustees held four regular meetings (two of which were
held via telephone conference call) during the fiscal year ended December 31,
2003, and each of the Trustees attended at least 75% of the meetings. In
addition, the Board of Trustees held one special meeting at which the majority
of the Trustees were present. The Trustees do not have a formal policy with
respect to attendance at annual shareholder meetings; however, all Trustees
participated at last year's annual shareholder meeting. The aggregate fees and
expenses paid to the Trustees by the Fund for the fiscal year ended December 31,
2003 amounted to $36,868 (including reimbursement for travel and out-of-pocket
expenses).
The following table sets forth certain information regarding the
compensation of the Fund's Trustees for the fiscal year ended December 31, 2003.
The officers of the Fund receive no compensation from the Fund for serving in
such capacity.
COMPENSATION TABLE
- -----------------------------------------------------------------------------------------------------------------
PENSION OR TOTAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS FROM THE FUND
NAME OF PERSON COMPENSATION ACCRUED AS PART OF COMPLEX PAID TO
AND POSITION FROM THE FUND FUND EXPENSES TRUSTEES
- -----------------------------------------------------------------------------------------------------------------
Dr. Donald Ratajczak, $8,500 $0 $8,500
Chairman of the Board
of Trustees
Dr. Bruce H. Olson, $8,500 $0 $8,500
Trustee
John F. Nickoll,
Trustee $8,500 $0 $8,500
Robert G. Wade, Jr.,
Trustee $8,500 $0 $8,500
BOARD COMMITTEES
AUDIT COMMITTEE
The Board of Trustees has an Audit Committee, which consists of Messrs.
Nickoll, Olson, Ratajczak and Wade, all of whom are independent Trustees of the
Fund as defined in the listing standards of the American Stock Exchange. None of
the members of the Audit Committee is an "interested person" as defined in the
1940 Act. The Audit Committee is responsible for the appointment, compensation
and oversight of the Fund's independent accountant (the "Independent Registered
Public Accounting Firm") and reviews with the Independent Registered Public
Accounting Firm the plan and results of the audit engagement and matters having
a material effect on the Fund's financial operations. The Audit Committee met
three times, including a special meeting, during the fiscal year ended December
31, 2003, with all members present.
The Audit Committee is responsible for overseeing or, as appropriate,
assisting Board oversight of, the quality and integrity of the Fund's financial
statements and independent audit thereof and overseeing the accounting and
financial reporting processes of the Fund and its internal control over
financial reporting. The Audit Committee is also responsible for pre-approving
or establishing pre-approval policies and procedures concerning: (i) all audit
and permitted non-audit services to be provided to the Fund; and (ii) all
permitted non-audit services to be provided by the Fund's Independent Registered
Public Accounting Firm to the Adviser and to entities controlling, controlled by
or under common control with the Adviser that provide ongoing services to the
Fund, if the services relate directly to the operations and financial reporting
of the Fund, except that de minimis non-audit services may, to the extent
permitted by applicable law, be approved prior to completion of the audit. In
fulfilling its responsibilities, the Audit Committee reviews and approves the
fees charged to the Fund by the Independent Registered Public Accounting Firm in
view of the scope of the services provided (including both audit and non-audit
services).
AUDIT COMMITTEE REPORT
The role of the Audit Committee is to assist the Board of Trustees in
its oversight of the Fund's financial reporting process. The Audit Committee
operates pursuant to the Charter that was most recently amended and approved by
the Board on July 8, 2004, a copy is attached as Appendix A. As set forth in the
Charter, management of the Fund is responsible for maintaining appropriate
systems for accounting and internal control. The Fund's Independent Registered
Public Accounting Firm is responsible for planning and carrying out a proper
audit.
Ernst & Young, LLP ("Ernst & Young") was the Independent Registered
Public Accounting Firm for the Fund for the fiscal year ended December 31, 2003.
In performing its oversight function, the Audit Committee reviewed and discussed
the audited financial statements for the Fund's fiscal year ended December 31,
2003 with Fund management and Ernst & Young. The Audit Committee discussed with
Ernst & Young the matters required to be discussed by Statement on Auditing
Standards No. 61, CODIFICATION OF STATEMENT ON AUDITING STANDARDS, as modified
or supplemented. The Audit Committee also received the written disclosures from
Ernst & Young required by Independence Standards Board Standard No. 1,
INDEPENDENT DISCUSSIONS WITH AUDIT COMMITTEES, as currently in effect.
Members of the Fund's Audit Committee are not professionally engaged in
the practice of auditing or accounting and are not employed by the Fund for
accounting, financial management or internal control. Moreover, the Audit
Committee relies on, and makes no independent verification of, the facts
presented and the representations made to it by Fund management and Ernst &
Young. Accordingly, the Audit Committee's oversight does not provide an
independent basis to determine that management has maintained appropriate
accounting and/or financial reporting principles and policies, or internal
controls and procedures, designed to assure compliance with accounting standards
and applicable laws and regulations. Furthermore, the Audit Committee's
considerations and discussions referred to above do not provide assurance that
the audit of the Fund's financial statements has been carried out in accordance
with generally accepted auditing standards or that the financial statements are
presented in accordance with generally accepted accounting principles.
Based on its consideration of the Fund's audited financial statements
and the discussions referred to above with Fund management and Ernst & Young,
and subject to the limitations on the responsibilities and role of the Audit
Committee as set forth in the Charter and discussed above, the Audit Committee
recommended the inclusion of the Fund's audited financial statements for the
year ended December 31, 2003 in the Fund's Annual Report dated December 31,
2003.
At a meeting held on March 31, 2004, a majority of the Trustees who are
not "interested persons" of the Fund (as defined in the 1940 Act) selected Ernst
& Young as the Independent Registered Public Accounting Firm for the Fund for
the fiscal year ending December 31, 2004. Ernst & Young has advised the Fund
that, to the best of its knowledge and belief, as of the record date, no Ernst &
Young professional had any direct or material indirect ownership interest in the
Fund inconsistent with independent professional standards pertaining to
auditors. It is expected that representatives of Ernst & Young will not be
present at the Meeting, but will be available by telephone to answer any
questions that may arise. In reliance on Rule 32a-4 under the 1940 Act, the Fund
is not seeking shareholder ratification of the selection of Ernst & Young as the
Independent Registered Public Accounting Firm.
SUBMITTED BY THE AUDIT COMMITTEE OF THE FUND:
Dr. Bruce H. Olson, Chairman
John F. Nickoll
Dr. Donald Ratajczak
Robert G. Wade, Jr.
Set forth in the tables below are fees billed by Ernst & Young to the
Fund for the Fund's last two fiscal years ended December 31:
- ------------------------------------------------------------------------------------------------
2002 Audit Related Fees Tax Fees 1 All Other Fees
Audit Fees
- ------------------------------------------------------------------------------------------------
Fund $26,000 $0 $2,000 $0
- ------------------------------------------------------------------------------------------------
2003
Audit Fees Audit Related Fees Tax Fees All Other Fees
- ------------------------------------------------------------------------------------------------
Fund $32,500 $0 $0 $0
<FN>
1 Includes fees billed by Ernst & Young directly to the Fund for tax compliance,
tax advice and tax planning services.
</FN>
The Audit Committee approved the tax related services listed above and
determined that the provision of such services is compatible with Ernst & Young
maintaining its independence.
The Audit Committee is required to pre-approve permitted non-audit
services provided by Ernst & Young to the Adviser and certain of its affiliates
to the extent that the services relate directly to the operations and financial
reporting of the Fund. No such non-audit services were provided by Ernst & Young
during the Fund's 2002 or 2003 fiscal years.
The aggregate fees paid by the Adviser and certain of its affiliates to
Ernst & Young for non-audit services that did not require Audit Committee
pre-approval totaled approximately $258,500 in 2003 and $380,000 in 2002. These
services and fees were disclosed to the Audit Committee subsequent to the
engagement of Ernst & Young to audit the Fund's financial statements. The Audit
Committee has considered whether the provision of these services is compatible
with maintaining Ernst & Young's independence.
OTHER COMMITTEES
The Board of Trustees approved a nominating committee (the "Nominating
Committee") and adopted a charter on July 8, 2004. The Nominating Committee is
comprised of as many Trustees as the Board shall determine, but in any event not
fewer than two Trustees. The members of the Nominating Committee are not
"interested persons" of the Fund as defined in the listing standards of the
American Stock Exchange and Section 2(a)(19) of the 1940 Act. Messrs. Ratajczak,
Olson, Wade and Nickoll are members of the Nominating Committee. The Nominating
Committee's primary responsibility is the screening and nomination of candidates
for election to the Board as independent trustees. The Nominating Committee does
not have regularly scheduled meetings. Nominating Committee meetings are held as
and when the Nominating Committee or Board determines necessary or appropriate
in accordance with the Fund's Bylaws. The Nominating Committee operates under a
written charter adopted and approved by the Board, a copy of which is attached
hereto as Appendix B. The Nominating Committee did not meet during the fiscal
year ended December 31, 2003.
The Nominating Committee will consider and evaluate nominee candidates
properly submitted by current shareholders of the Fund on the same basis as it
considers and evaluates candidates recommended by other sources. A shareholder
must submit any such recommendation (a "Shareholder Recommendation") in writing
to the Fund, to the attention of the Secretary of the Fund, c/o INVESCO
Institutional (N.A.), Inc., 1360 Peachtree Street, N.E., Suite 100 Atlanta, GA
30309. The Shareholder Recommendation must include a statement in writing
setting forth the following information: (i) the name, age, date of birth,
business address and residence address of the person recommended by the
shareholder (the "candidate"); (ii) the number of shares of the Fund owned of
record or beneficially by the candidate, as reported to such shareholder by the
candidate; (iii) a description of the candidate's education, experience and
current employment; (iv) any other information regarding the candidate called
for with respect to director nominees; (v) any other information regarding the
candidate that would be required to be disclosed, if the candidate were a
nominee in the proxy statement or other filing required to be made in connection
with the election of Trustees; and (vi) whether the recommending shareholder
believes that the candidate is or will be an "interested person" of the Fund.
All shareholder recommendations properly submitted to the Fund will be
held by the Secretary until such time as (i) the Nominating Committee convenes
to consider candidates to fill Board vacancies or newly created Board positions
(a "Trustee Consideration Meeting") or (ii) the Nominating Committee instructs
the Secretary to discard a shareholder recommendation following a Trustee
Consideration Meeting or an interim evaluation of the recommendation. All
nominations from Fund shareholders will be acknowledged, although there may be
times when the Nominating Committee is not actively recruiting new Trustees.
In recruiting new trustees, the Nominating Committee requires that
candidates have a college degree or equivalent business experience. The
Nominating Committee may take into account a wide variety of factors in
considering Trustee candidates, including (but not limited to): (i) availability
and commitment of a candidate to attend meetings and perform his or her
responsibilities on the Board, (ii) relevant industry and related experience,
(iii) educational background, and (iv) ability, judgement and expertise.
In identifying potential nominees for the Board, the Nominating
Committee may consider candidates recommended by one or more of the following
sources: (i) the Fund's current Trustees; (ii) the Fund's officers; (iii) the
Fund's investment adviser or subadvisers; (iv) shareholders of the Fund; and (v)
any other source the Committee deems to be appropriate. The Nominating Committee
may, but is not required to, retain a third party search firm at the Fund's
expense to identify potential candidates.
REQUIRED VOTE
Election of Dr. Bruce H. Olson as Trustee requires the affirmative vote
of the holders of a majority of the outstanding shares of the Fund represented
at the Meeting in person or by proxy.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 1.
PROPOSAL 2: OTHER MATTERS TO COME BEFORE THE MEETING
No business other than the matter described above is expected to come
before the Meeting, but should any other matter requiring a vote of shareholders
arise, including any question as to an adjournment or postponement of the
Meeting, the persons named on the enclosed proxy card will vote thereon
according to their best judgment in the interests of the Fund.
ADDITIONAL INFORMATION ABOUT THE FUND
INVESTMENT ADVISER, ADMINISTRATOR AND PRINCIPAL UNDERWRITER
INVESCO serves as the Fund's investment adviser and is located at 1166
Avenue of the Americas, 27th Floor, New York, NY 10036. PFPC Inc. ("PFPC") acts
as the Fund's administrator and is located at 301 Bellevue Parkway, Wilmington,
Delaware 19809. PFPC is a provider of full service mutual fund shareholder and
record keeping services. In addition to its mutual fund transfer agent and
record keeping service, PFPC provides complimentary services through its own
subsidiary business units.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the 1934 Act requires the Fund's officers and
Trustees, certain persons affiliated with Invesco and persons who beneficially
own more than 10% of the Fund's Shares to file reports of ownership and changes
of ownership with the SEC and the American Stock Exchange, Inc. and to furnish
the Fund with copies of all Section 16(a) forms they file. Based solely upon its
review of the copies of such forms received by it and written representations
from certain of such persons, the Fund believes that during its fiscal year
ended December 31, 2003, all such filing requirements applicable to such persons
were met.
SHAREHOLDER PROPOSALS
All proposals by shareholders that are intended to be presented at the
Fund's next Annual Meeting of Shareholders to be held in 2005 must be received
by the Fund on or before May 1, 2005 in order to be considered for inclusion in
the Fund's proxy statement and form of proxy relating to that meeting.
Shareholder proposals must meet certain requirements and there is no guarantee
that any proposal will be presented at a shareholder meeting.
SHAREHOLDER COMMUNICATIONS
Shareholders may send written communications to the Board of Trustees
of CIM High Yield Securities, c/o INVESCO Institutional (N.A.), Inc. 1360
Peachtree Street, N.E. Suite 100, Atlanta, GA 30309.
September 3, 2004
- --------------------------------------------------------------------------------
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO NOT
EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN, DATE
AND RETURN THE PROXY CARD AS SOON AS POSSIBLE IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------
A-3
APPENDIX A
----------
CIM HIGH YIELD SECURITIES
AUDIT COMMITTEE CHARTER
PRIMARY RESPONSIBILITIES
The primary responsibilities of the Audit Committee are as follows:
1. To oversee or, as appropriate, assist Board oversight of, the quality and
integrity of the Fund's financial statements and the independent audit
thereof;
2. To oversee the accounting and financial reporting processes of the Fund and
its internal control over financial reporting and, as the Committee deems
appropriate, to inquire into the internal control over financial reporting
of certain third-party service providers;
3. To approve prior to appointment the engagement of the Fund's independent
accountant, to recommend to those Board members who are not "interested
persons" (as defined under Section 2(a)(h) of the Investment Company Act of
1940) the selection, retention or termination of the Fund's independent
accountant and, in connection therewith, to review and evaluate the
qualifications, independence and performance of the Fund's independent
accountant;
4. To oversee, or, as appropriate, assist Board oversight of the Fund's
compliance with legal and regulatory requirements that relate to the Fund's
accounting and financial reporting, internal control over financial
reporting and independent audits;
5. Be directly responsible for the compensation and oversight of the work of
the Fund's independent accountant, including resolution of disagreements
between Fund management and the accountant regarding financial reporting;
6. Preapprove, or establish preapproval policies and procedures concerning,
the following:
> all audit and permitted non-audit services to be provided
the Fund, and
> all permitted non-audit services to be provided by the
Fund's independent accountant to the adviser and to entities
controlling, controlled by or under common control with the
adviser that provide ongoing services to the Fund, if the
services relate directly to the operations and financial
reporting of the Fund,
except that de minimis non-audit services, may, to the extent permitted by
applicable law, be approved prior to completion of the audit; and
7. To act as a liaison between the Fund's independent accountant and the Board
and ensure that the Board is fully informed about any findings or
recommendations of the independent accountant.
In order to fulfill these responsibilities, the Audit Committee will do the
following, to the extent required by law or deemed necessary or appropriate by
the Audit Committee:
o Evaluate the accountant's qualifications, performance and
independence, receive the accountant's specific representations as to
independence and review the accountant's partner rotation policies. In
evaluating the accountant's qualifications, performance and
A-1
independence, the Audit Committee shall, among other things, obtain
and review a report of the accountant, at least annually, describing
all relationships between the accountant and the Fund, as well as the
Fund's investment adviser and any control affiliate of the adviser
that provides ongoing services to the Fund. It is the responsibility
of the Audit Committee to engage actively in a dialogue with the
Fund's accountant with respect to any disclosed relationship or
services that may impact the objectivity and independence of the
accountant and to take, or recommend that the full Board take,
appropriate action to oversee the independence of the accountant.
o Review and approve the fees to be charged to the Fund by the
independent accountant in view of the scope of the services provided
(both audit and non-audit services).
o Meet with the independent accountant, including private meetings as
necessary,
> to review the scope of and arrangements and procedures for the
proposed audit for the current year and any special audits,
> to receive from the accountant all required reports, including
reports of critical accounting policies and practices used,
alternative treatments of financial information discussed with
management and other material written communications with
management,
> at the conclusion of the audit, to review with the accountant the
results of the audit and to discuss any matters of concern,
comments or recommendations relating to the Fund's financial
statements, including any adjustments recommended by the
accountant, or other results of the audit, and
> to consider the accountant's comments with respect to the Fund's
financial policies, procedures and internal accounting and
financial controls (including the adequacy of internal controls
and the adequacy of organizational resources committed to the
financial, accounting and compliance functions), and management's
responses thereto.
o Review with the independent accountant and the adviser's financial and
accounting personnel the adequacy and effectiveness of the accounting
and financial controls of the Fund, and elicit recommendations for the
improvement of such internal controls.
o Receive from management all required reports, including required
reports on significant deficiencies in the design or operation of
internal controls and fraud involving management or other employees.
o Review management's compliance plan and compliance organization.
o Consider the effect on the Fund of any changes in accounting
principles or practices proposed by management or the auditors.
o Investigate any matter brought to its attention within the scope of
its duties, including improprieties or suspected improprieties in Fund
operations.
o Present to the Board a summary of the examination report from the
independent accountant, including any deficiencies and/or
recommendations noted.
A-2
o Report its activities to the Board on a regular basis, and make such
recommendations with respect to the above and other matters, as the
Audit Committee may deem necessary or appropriate.
o Establish procedures for the receipt, retention and treatment of
complaints received by the Fund relating to accounting, internal
accounting controls, or auditing matters, and the confidential,
anonymous submission by employees of the Fund, its investment adviser,
administrator, principal underwriter, or any other provider of
accounting related services for the Fund of concerns about accounting
or auditing matters, and to address reports from attorneys or
accountants of possible violations of federal or state law or
fiduciary duty.
The Committee may also address other issues as they are identified and
delegated to the Committee. In furtherance of the foregoing, the Committee shall
have the resources and authority it determines to be necessary or appropriate to
discharge its responsibilities, including the authority to retain independent
counsel and other advisers and experts. Costs incurred by the Committee in
discharging its responsibilities shall be borne by the Fund.
CONCERNING THE COMMITTEE
o The Audit Committee shall consist of at least three members and shall
continue in existence until dissolved by the Board.
o The Audit Committee shall be composed solely of the trustees of the Fund
who are (a) not "interested persons" of the Fund for purposes of the
Investment Company Act of 1940, as amended, and (b) otherwise "independent"
of the Fund within the meaning of Section 301 of the Sarbanes-Oxley Act of
2002. Each member of the Audit Committee must be able to read and
understand fundamental financial statements, including a balance sheet,
income statement and cash flow statement. At least one member of the Audit
Committee must be financially sophisticated in that he or she has past
employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience. Subject to
the foregoing, the Committee shall have such members as the Board shall
determine from time to time.
o The Committee Chair shall be elected bi-annually by the full Board of
Trustees.
o The Audit Committee shall meet on a regular basis as often as necessary to
fulfill its responsibilities, including at least annually in connection
with the issuance of the Fund's financial statements. The Committee shall
meet at least two times per year, and more often as warranted, with the
Fund's independent accountant. Such meetings shall include private sessions
to the extent that the Committee or the independent accountant believes
necessary. The Committee also shall meet regularly with the Fund's and the
adviser's financial and accounting personnel.
THE COMMITTEE WILL REVIEW THIS CHARTER ANNUALLY AND RECOMMEND ANY
CHANGES TO THE BOARD.
A-3
B-4
APPENDIX B
----------
CIM HIGH YIELD SECURITIES
Nominating Committee Charter
(Adopted as of July 8, 2004)
The Board of Trustees (the "Board") of CIM HIGH YIELD SECURITIES (the
"Fund") has adopted this Charter to govern the activities of the Nominating
Committee (the "Committee") of the Board.
Statement of Purpose and Responsibility
The selection and nomination of the independent Trustees of the Fund is
committed to the discretion of the then independent Trustees of the Fund. The
primary purpose and responsibility of the Committee is the screening and
nomination of candidates for election to the Board as independent trustees.
Organization and Governance
The Committee shall be comprised of as many Trustees as the Board shall
determine, but in any event not fewer than two (2) Trustees. The Committee must
consist entirely of Board members who are not "interested persons" of the Fund,
as defined in Section 2(a)(19) of the Investment Company Act of 1940, as
amended. The Board may remove or replace any member of the Committee at any time
in its sole discretion.
One or more members of the Committee may be designated by the Board as the
Committee's chairman or co-chairman, as the case may be.
The Committee will not have regularly scheduled meetings. Committee
meetings shall be held as and when the Committee or the Board determines
necessary or appropriate in accordance with the Fund's Bylaws.
Qualifications for Trustee Nominees
The Committee requires that Trustee candidates have a college degree or
equivalent business experience. The Committee may take into account a wide
variety of factors in considering Trustee candidates, including (but not limited
to): (i) availability and commitment of a candidate to attend meetings and
perform his or her responsibilities on the Board, (ii) relevant industry and
related experience, (iii) educational background, and (iv) ability, judgment and
expertise.
Identification of Nominees
In identifying potential nominees for the Board, the Committee may consider
candidates recommended by one or more of the following sources: (i) the Fund's
current Trustees; (ii) the Fund's officers; (iii) the Fund's investment adviser
or subadvisers; (iv) shareholders of the Fund (see below); and (v) any other
source the Committee deems to be appropriate. The Committee may, but is not
required to, retain a third party search firm at the Fund's expense to identify
potential candidates.
B-1
Consideration of Candidates Recommended By Shareholders
The Committee will consider and evaluate nominee candidates properly
submitted by current shareholders of the Fund on the same basis as it considers
and evaluates candidates recommended by other sources. APPENDIX A to this
Charter, as it may be amended from time to time by the Committee, sets forth
procedures that must be followed by shareholders to submit properly a nominee
candidate to the Committee (recommendations not properly submitted in accordance
with APPENDIX A will not be considered by the Committee).
B-2
APPENDIX
--------
CIM HIGH YIELD SECURITIES (the "Fund")
Procedures for Shareholders to Submit Nominee Candidates
(As of July 8, 2004)
A current shareholder of the Fund must follow the following procedures in order
to submit properly a nominee recommendation for the Committee's consideration.
1. The shareholder must submit any such recommendation (a "Shareholder
Recommendation") in writing to the Fund, to the attention of the
Secretary of the Fund, c/o INVESCO Institutional (N.A.), Inc., 1360
Peachtree Street, N.E., Suite 100 Atlanta, GA 30309. All nominations
from Fund shareholders will be acknowledged, although there may be
times when the Committee is not actively recruiting new Trustees.
2. All Shareholder Recommendations properly submitted to the Fund will be
held by the Secretary until such time as (i) the Committee convenes to
consider candidates to fill Board vacancies or newly created Board
positions (a "Trustee Consideration Meeting") or (ii) the Committee
instructs the Secretary to discard a Shareholder Recommendation
following a Trustee Consideration Meeting or an Interim Evaluation (as
defined below).
3. At a Trustee Consideration Meeting, the Committee will consider each
Shareholder Recommendation then held by the Secretary. Following a
Trustee Consideration Meeting, the Committee may instruct the
Secretary to discard any or all of the Shareholder Recommendations
currently held by the Secretary.
4. The Committee may, in its discretion and at any time, convene to
conduct an evaluation of validly submitted Shareholder Recommendations
(each such meeting, an "Interim Evaluation") for the purpose of
determining which Shareholder Recommendations will be considered at
the next Trustee Consideration Meeting. Following an Interim
Evaluation, the Committee may instruct the Secretary to discard any or
all of the Shareholder Recommendations currently held by the
Secretary.
5. The Shareholder Recommendation must include: (i) a statement in
writing setting forth (A) the name, age, date of birth, business
address, and residence address of the person recommended by the
shareholder (the "candidate"); (B) the number of shares of the Fund
owned of record or beneficially by the candidate, as reported to such
shareholder by the candidate; (C) a description of the candidate's
education, experience and current employment; (D) any other
information regarding the candidate called for with respect to
director nominees by paragraphs (a), (d), (e) and (f) of Item 401 of
Regulation S-K (generally information regarding family relationships,
business experience and involvement in certain legal proceedings) or
paragraph (b) of Item 22 of Rule 14a-101 (Schedule 14A) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
adopted by the Securities and Exchange Commission (or the
corresponding provisions of any regulation or rule subsequently
adopted by the Securities and Exchange Commission or any successor
agency applicable to the Fund); (E) any other information regarding
the candidate that would be required to be disclosed if the candidate
were a nominee in a proxy statement or other filing required to be
made in connection with the election of Trustees pursuant to Section
14 of the Exchange Act and the rules and regulations promulgated
thereunder; and (F) whether the recommending shareholder believes that
the candidate is or will be an "interested person" of the
B-3
Fund (as defined in the Investment Company Act of 1940, as amended)
and, if not an "interested person," information regarding the
candidate that will be sufficient for the Fund to make such
determination; (ii) the written and signed consent of the candidate to
be named as a nominee and to serve as a Trustee if elected; (iii) the
recommending shareholder's name as it appears on the Fund's books;
(iv) the number of shares of the Fund owned beneficially and of record
by the recommending shareholder; and (v) a description of all
arrangements or understandings between the recommending shareholder
and the candidate and any other person or persons (including their
names) pursuant to which the recommendation is being made by the
recommending shareholder. In addition, the Committee may require the
candidate to furnish such other information as it may reasonably
require or deem necessary to determine the eligibility of such
candidate to serve on the Board or to satisfy applicable law.
B-4
DETACH HERE ZCIM22
PROXY
CIM HIGH YIELD SECURITIES
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned hereby appoints Cindy Cameron and Lisa M. King, and each of
them, attorneys and proxies for the undersigned, with full power of substitution
and revocation, to represent the undersigned and to vote on behalf of the
undersigned all shares of CIM High Yield Securities which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Fund to be held at
the offices of Bingham McCutchen LLP, 150 Federal Street, 25th Floor, Boston,
Massachusetts 02110 on October 8, 2004, at 11:00 a.m., And any adjournments
thereof. The undersigned hereby acknowledges receipt of the Notice of Meeting
and Proxy Statement, and hereby instructs said attorneys and proxies to vote
said shares as indicated hereon. In their discretion, the proxies are authorized
to vote upon such other business as may properly come before the Meeting. A
majority of the proxies present and acting at the Meeting in person or by
substitute (or, if only one shall be so present, then that one) shall have and
may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
- ------------- -------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ------------- -------------
CIM HIGH YIELD SECURITIES
C/O PFPC, INC.
P.O. BOX 8586
EDISON, NJ 08818-9452
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL ZCIM21
- --- PLEASE MARK 3192
X VOTES AS IN
- --- THIS EXAMPLE.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ELECTION OF THE NOMINEE AS TRUSTEE.
1. ELECTION OF TRUSTEE:
NOMINEE:
FOR WITHHELD
Dr. Bruce H. Olson [ ] [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE SIGN, DATE, AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
Note: Please sign exactly as your name appears on
this Proxy. If joint owners, EITHER may sign this
Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate
officer, please give your full title.
Signature: Date: Signature: Date:
---------------- ------ ----------------- ------