SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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a-12
AIM ADVISOR FUNDS
AIM SERIES TRUST
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AIM ADVISOR FUNDS AIM SERIES TRUST
AIM REAL ESTATE FUND AIM GLOBAL TRENDS FUND
August 25, 2003
Dear Shareholder:
As you may be aware, AMVESCAP PLC, the parent company of your Fund's
investment advisor, has undertaken an integration initiative for its North
American mutual fund operations. In the first phase of the integration
initiative, A I M Distributors, Inc. became the sole distributor for all INVESCO
Funds and is now distributor for all INVESCO Funds and the AIM Funds (including
your Fund).
As a result of this integration initiative, the independent trustees of
your Board of Trustees believe that your interests would best be served if the
AIM Funds and the INVESCO Funds had a unified board of directors/trustees. The
attached proxy statement seeks your vote in favor of the persons nominated to
serve as trustees.
The integration initiative also calls for changing the organizational
structure of the AIM Funds and the INVESCO Funds. To accomplish this goal,
AMVESCAP PLC has recommended that certain series portfolios of AIM Funds with
few portfolios be restructured as new series portfolios of existing Delaware
statutory trusts. Your Board has approved restructuring your Fund as a new
series of an existing Delaware statutory trust. The attached proxy statement
seeks your approval of this restructuring.
Your vote is important. Please take a moment after reviewing the
enclosed materials to sign and return your proxy card in the enclosed postage
paid return envelope. If you attend the meeting, you may vote your shares in
person. If you expect to attend the meeting in person, or have questions, please
notify us by calling (800) 952-3502. You may also vote your shares by telephone
or through a website established for that purpose by following the instructions
that appear on the enclosed proxy card. If we do not hear from you after a
reasonable amount of time, you may receive a telephone call from our proxy
solicitor, Georgeson Shareholder Communications, Inc. reminding you to vote your
shares.
Sincerely,
/s/ Robert H. Graham
----------------------
Chairman and President
AIM ADVISOR FUNDS
AIM REAL ESTATE FUND
AIM SERIES TRUST
AIM GLOBAL TRENDS FUND
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046-1173
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON OCTOBER 21, 2003
To the Shareholders of each of the series portfolios of AIM Advisor
Funds and AIM Series Trust (each, a "Trust," and together, the "Trusts") listed
above:
We cordially invite you to attend our Special Meetings of Shareholders
to:
1. Elect 16 trustees to the Board of Trustees of each Trust, each
of whom will serve until his or her successor is elected and qualified.
2. Approve an Agreement and Plan of Reorganization which provides
for the restructuring of AIM Real Estate Fund and AIM Advisor Funds' other
series portfolio, AIM International Core Equity Fund, as new series portfolios
of AIM Investment Securities Funds, an existing open-end management investment
company organized as a Delaware statutory trust and, in connection therewith,
the sale of all of AIM Real Estate Fund's assets and the termination of AIM Real
Estate Fund as a designated series of AIM Advisor Funds.
3. Approve an Agreement and Plan of Reorganization which provides
for the restructuring of AIM Global Trends Fund as a new series portfolio of AIM
Growth Series, an existing open-end management investment company organized as a
Delaware statutory trust and, in connection therewith, the sale of all of AIM
Global Trends Fund's assets and the termination AIM Global Trends Fund as a
designated series of AIM Series Trust.
4. Transact any other business, not currently contemplated, that
may properly come before the Special Meetings, in the discretion of the proxies
or their substitutes.
We are holding the Special Meetings at 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173 on October 21, 2003, at 3:00 p.m., Central Time.
Shareholders of record of one or more of the Funds as of the close of
business on July 25, 2003 are entitled to notice of, and to vote at, the
applicable Special Meetings or any adjournment of the Special Meetings.
WE REQUEST THAT YOU EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY, WHICH IS BEING SOLICITED BY THE BOARD OF
TRUSTEES OF EACH TRUST. YOU MAY ALSO VOTE YOUR SHARES BY TELEPHONE OR THROUGH A
WEBSITE ESTABLISHED FOR THAT PURPOSE BY FOLLOWING THE INSTRUCTIONS ON THE
ENCLOSED PROXY MATERIALS. YOUR VOTE IS IMPORTANT FOR THE PURPOSE OF ENSURING A
QUORUM AT THE SPECIAL MEETINGS. YOU MAY REVOKE YOUR PROXY AT
ANY TIME BEFORE IT IS EXERCISED BY EXECUTING AND SUBMITTING A REVISED PROXY, BY
GIVING WRITTEN NOTICE OF REVOCATION TO THE APPLICABLE TRUST'S SECRETARY OR BY
VOTING IN PERSON AT THE SPECIAL MEETINGS.
/s/ Nancy L. Martin
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Secretary
August 25, 2003
AIM ADVISOR FUNDS
AIM REAL ESTATE FUND
AIM SERIES TRUST
AIM GLOBAL TRENDS FUND
11 GREENWAY PLAZA, SUITE 100
HOUSTON, TEXAS 77046-1173
SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON OCTOBER 21, 2003
INTRODUCTION
Proposals 1, 2 and 3 that you are being asked to vote on relate to or
result from an integration initiative announced on March 27, 2003, by AMVESCAP
PLC ("AMVESCAP"), the parent company of A I M Advisors, Inc. ("AIM") and INVESCO
Funds Group, Inc. ("INVESCO"), with respect to its North American mutual fund
operations. The primary components of AMVESCAP's integration initiative are:
- Using a single distributor for all AMVESCAP mutual funds in
the United States, with A I M Distributors, Inc. ("AIM
Distributors"), the distributor for the retail mutual funds
advised by AIM (the "AIM Funds"), replacing INVESCO
Distributors, Inc. as the distributor for the retail mutual
funds advised by INVESCO (the "INVESCO Funds") effective July
1, 2003.
- Integrating back office support and creating a single platform
for back office support of AMVESCAP's mutual fund operations
in the United States, including such support services as
transfer agency and information technology, with the result
that shares of the AIM Funds and shares of the INVESCO Funds
generally will be able to be exchanged for shares of the same
or a similar class of each other.
- Rationalizing and streamlining the various AIM Funds and
INVESCO Funds, thereby reducing the number of smaller and less
efficient funds that compete for limited shareholder assets
and consolidating certain funds having similar investment
objectives and strategies.
- Rationalizing the contractual arrangements for the provision
of investment advisory and administrative services to the AIM
Funds and the INVESCO Funds, with the objective of having AIM
become the investment advisor and administrator for each
INVESCO Fund.
- Simplifying the organizational structure of the AIM Funds and
the INVESCO Funds so that they are all organized as Delaware
statutory trusts, using as few entities as practicable.
Proposals 2 and 3 relate to this component of AMVESCAP's
integration initiative.
In considering the integration initiative proposed by AMVESCAP, the
directors/trustees of the AIM Funds and the directors of the INVESCO Funds who
are not "interested persons" (as defined in the Investment Company Act of 1940
(the "1940 Act")) of the Funds or their advisors determined that the
shareholders of both the AIM Funds and the INVESCO Funds would benefit if one
set of directors/trustees was responsible for overseeing the operation of both
the AIM Funds and the INVESCO Funds and the services provided by AIM, INVESCO
and their affiliates. Accordingly, these directors/trustees agreed to combine
the separate boards and create a unified board of directors/trustees. Proposal 1
relates to the election of trustees of your Fund.
INFORMATION ABOUT THE SPECIAL MEETINGS AND VOTING
PROXY STATEMENT
We are sending you this Proxy Statement and the enclosed proxy card on
behalf of the series portfolios of AIM Advisor Funds and AIM Series Trust (each
a "Trust," and together, the "Trusts") listed above (each a "Fund," and
together, the "Funds") because the Boards of Trustees of the Trusts (the
"Boards") are soliciting your proxy to vote at the Special Meetings of
Shareholders and at any adjournments of the Special Meetings (collectively, the
"Special Meetings"). This Proxy Statement gives you information about the
business to be conducted at the Special Meetings. However, you do not need to
attend a Special Meeting to vote your shares. Instead, you may simply complete,
sign and return the enclosed proxy card or vote by telephone or through a
website established for that purpose.
The Trusts intend to mail this Proxy Statement, the enclosed Notice of
Special Meetings of Shareholders and the enclosed proxy card on or about August
24, 2003 to all shareholders entitled to vote. Shareholders of record of any
class of a Fund as of the close of business on July 25, 2003 (the "Record Date")
are entitled to vote at the applicable Special Meeting. The number of shares
outstanding of each class of each Fund on the Record Date can be found in
Exhibit A. Each share of a Fund that you own entitles you to one vote on each
proposal set forth in the table below that applies to the Fund (a fractional
share has a fractional vote).
We have previously sent to shareholders the most recent annual report
for their Fund, including financial statements, and the most recent semiannual
report succeeding the annual report, if any. If you have not received such
report(s) or would like to receive an additional copy, please contact A I M Fund
Services, Inc., P.O. Box 4739, Houston, TX 77210-4739, or call (800) 347-4246.
We will furnish such report(s) free of charge.
PROPOSAL TABLE
The following table summarizes each proposal to be presented at the
Special Meetings and the Funds whose shareholders the Boards are soliciting with
respect to each proposal:
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PROPOSAL AFFECTED FUNDS
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1. Electing trustees All Funds
2. Approving an Agreement and Plan of AIM Real Estate Fund
Reorganization to restructure each series
portfolio of AIM Advisor Funds as a new series
portfolio of an existing Delaware statutory
trust
3. Approving an Agreement and Plan of AIM Global Trends Fund
Reorganization to restructure the sole
series portfolio of AIM Series Trust as
a new series portfolio of an
existing Delaware statutory trust
4. Considering other matters All Funds
TIME AND PLACE OF SPECIAL MEETINGS
We are holding the Special Meetings at 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173 on October 21, 2003, at 3:00 p.m., Central Time.
VOTING IN PERSON
If you do attend a Special Meeting and wish to vote in person, we will
provide you with a ballot prior to the vote. However, if your shares are held in
the name of your broker, bank or other nominee, you must bring a letter from the
nominee indicating that you are the beneficial owner of the shares on the Record
Date and authorizing you to vote. Please call the applicable Trust at (800)
952-3502 if you plan to attend a Special Meeting.
VOTING BY PROXY
Whether you plan to attend a Special Meeting or not, we urge you to
complete, sign and date the enclosed proxy card and to return it promptly in the
envelope provided. Returning the proxy card will not affect your right to attend
a Special Meeting and vote.
If you properly fill in and sign your proxy card and send it to us in
time to vote at the Special Meetings, your "proxy" (the individual named on your
proxy card) will vote your shares as you have directed. If you sign your proxy
card but do not make specific choices, your proxy will vote your shares as
recommended by the Board of your Trust as follows and in accordance with
management's recommendation on other matters:
- FOR the election of all 16 nominees for trustees of your
Trust.
- FOR the proposal to approve an Agreement and Plan of
Reorganization (the "AAF Plan") to restructure each series
portfolio of AIM Advisor Funds as a new series portfolio of an
existing Delaware statutory trust.
- FOR the proposal to approve an Agreement and Plan of
Reorganization (the "AST Plan") to restructure the sole series
portfolio of AIM Series Trust as a new series portfolio of an
existing Delaware statutory trust.
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Your proxy will have the authority to vote and act on your behalf at
any adjournment of the Special Meetings.
If you authorize a proxy, you may revoke it at any time before it is
exercised by sending in another proxy card with a later date or by notifying the
applicable Trust's Secretary in writing to the address of such Trust set forth
on the cover page of this Proxy Statement before a Special Meeting that you have
revoked your proxy. In addition, although merely attending a Special Meeting
will not revoke your proxy, if you are present at a Special Meeting you may
withdraw your proxy and vote in person. Shareholders may also transact any other
business not currently contemplated that may properly come before the Special
Meetings in the discretion of the proxies or their substitutes.
VOTING BY TELEPHONE OR THE INTERNET
You may vote your shares by telephone or through a website established
for that purpose by following the instructions that appear on the proxy card
accompanying this Proxy Statement.
QUORUM REQUIREMENT AND ADJOURNMENT
A quorum of shareholders is necessary to hold a valid meeting. A quorum
will exist for Proposal 1 for a particular Trust if shareholders entitled to
vote one-third of the issued and outstanding shares of such Trust on the Record
Date are present at the Special Meetings in person or by proxy. A quorum will
exist for Proposals 2 and 3 for a particular Fund if shareholders entitled to
vote one-third of the issued and outstanding shares of such Fund on the Record
Date are present at the Special Meetings in person or by proxy.
Under the rules applicable to broker-dealers, if your broker holds your
shares in its name, the broker will be entitled to vote your shares even if it
has not received instructions from you. A "broker non-vote" occurs when a broker
has not received voting instructions from a shareholder and is barred from
voting the shares without shareholder instructions because the proposal is
non-routine.
Abstentions and broker non-votes will count as shares present at the
Special Meetings for purposes of establishing a quorum.
If a quorum is not present at a Special Meeting or a quorum is present
but sufficient votes to approve a Proposal are not received, the persons named
as proxies may propose one or more adjournments of the Special Meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Special
Meeting in person or by proxy. The persons named as proxies will vote those
proxies that they are entitled to vote FOR a Proposal in favor of such an
adjournment and will vote those proxies required to be voted AGAINST such
Proposal against such an adjournment. A shareholder vote may be taken on a
Proposal in this Proxy Statement prior to any such adjournment if sufficient
votes have been received and it is otherwise appropriate.
VOTE NECESSARY TO APPROVE EACH PROPOSAL
PROPOSAL 1. The affirmative vote of a plurality of votes cast by the
shareholders of a Trust is necessary to elect trustees of that Trust at a
Special Meeting, meaning that the trustee nominee with the most affirmative
votes for a particular slot is elected for that slot. In an uncontested election
for trustees, the plurality requirement is not a factor. Abstentions will not
count as votes cast and will have no effect on the outcome of this proposal. We
expect that
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brokers will be entitled to vote on this proposal, but any broker non-vote will
have no effect on the outcome of this proposal.
PROPOSAL 2. Approval of Proposal 2 with respect to AIM Real Estate Fund
requires the affirmative vote of a majority of the votes cast by shareholders of
AIM Real Estate Fund at its Special Meeting. Abstentions and broker non-votes
will not count as votes cast and will have no effect on the outcome of this
proposal.
PROPOSAL 3. Approval of Proposal 3 with respect to AIM Global Trends
Fund requires the affirmative vote of a majority of the votes cast by
shareholders of AIM Global Trends Fund at its Special Meeting. Abstentions and
broker non-votes will not count as votes cast and will have no effect on the
outcome of this proposal.
PROXY SOLICITATION
The Trusts have engaged the services of Georgeson Shareholder
Communications, Inc. ("Solicitor") to assist in the solicitation of proxies for
the Special Meetings. Solicitor's costs are estimated to be approximately
$93,600. The Trusts expect to solicit proxies principally by mail, but the
Trusts or Solicitor may also solicit proxies by telephone, facsimile or personal
interview. The Trusts' officers will not receive any additional or special
compensation for any such solicitation. Each Fund will pay for its proportionate
share of the cost of soliciting proxies, the printing and mailing of this Proxy
Statement, the attached Notice of Special Meetings of Shareholders, the enclosed
proxy card, and any further solicitation.
OTHER MATTERS
Management does not know of any matters to be presented at the Special
Meetings other than those discussed in this Proxy Statement. If any other
matters properly come before the Special Meetings, the shares represented by
proxies will be voted with respect thereto in accordance with management's
recommendation.
SHAREHOLDER PROPOSALS
As a general matter, the Funds do not hold regular meetings of
shareholders. If you wish to submit a proposal for consideration at a meeting of
shareholders of your Fund, you should send such proposal to the applicable Trust
at the address set forth on the first page of this Proxy Statement. To be
considered for presentation at a meeting of shareholders, the applicable Trust
must receive proposals a reasonable time before proxy materials are prepared for
the meeting. Your proposal also must comply with applicable law.
For a discussion of procedures that you must follow if you want to
propose an individual for nomination as a trustee, please refer to the section
of this Proxy Statement entitled "Proposal 1 - Committees of the Board -
Committee on Directors/Trustees."
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PROPOSAL 1 -
ELECTION OF TRUSTEES
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 1?
Proposal 1 applies to the shareholders of all Funds.
BACKGROUND
In considering the integration initiative proposed by AMVESCAP, the
independent directors/trustees of the AIM Funds and the independent directors of
the INVESCO Funds determined that the shareholders of all the AIM Funds and the
INVESCO Funds would benefit if a unified board of directors/trustees was
responsible for overseeing the operation of both the AIM Funds and the INVESCO
Funds and the services provided by AIM, INVESCO and their affiliates.
Accordingly, the Board of Directors/Trustees of the AIM Funds and the Boards of
Directors of the INVESCO Funds agreed to combine the separate boards and create
a unified board of directors/trustees.
STRUCTURE OF THE BOARD OF TRUSTEES
Each Board currently consists of 12 persons. Ten of the current
trustees are "independent," meaning they are not "interested persons" of the
Trusts within the meaning of the 1940 Act. Two of the current trustees are
"interested persons" because of their business and financial relationships with
the Trusts and AIM, each Trust's investment advisor, and/or AIM's parent,
AMVESCAP.
NOMINEES FOR TRUSTEES
Each Trust's Committee on Directors/Trustees (which consists solely of
independent trustees) has approved the nomination of each of the 12 current
trustees, as set forth below, to serve as trustee until his or her successor is
elected and qualified. In addition, each Trust's Committee on Directors/Trustees
has approved the nomination of four new nominees, as set forth below, to serve
as trustee until his or her successor is elected and qualified. These four new
nominees were nominated to effect as a result of the proposed combination of the
Boards of Directors/Trustees of the AIM Funds and the Boards of Directors of the
INVESCO Funds.
Each nominee who is a current trustee serves as a director or trustee
of the 17 registered investment companies comprising the AIM Funds. Each nominee
who is a current trustee oversees 86 portfolios that comprise the AIM Funds. The
business address of each nominee who is a current trustee is 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173.
Each new nominee serves as a director of ten registered investment
companies comprising the INVESCO Funds. Each new nominee currently oversees 46
portfolios which comprise the INVESCO Funds. The business address of each new
nominee is 4350 South Monaco Street, Denver, Colorado 80237.
If elected, each nominee would oversee a total of 27 registered
investment companies currently comprising 132 portfolios.
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NOMINEES WHO CURRENTLY ARE INDEPENDENT TRUSTEES
TRUSTEE PRINCIPAL OCCUPATION(s)
NAME AND YEAR OF BIRTH SINCE DURING PAST 5 YEARS OTHER DIRECTORSHIP(s) HELD
- ------------------------ ------------- -------------------------------- ----------------------------
Frank S. Bayley - 1939 2001(1) Of Counsel, law firm of Baker & Badgley Funds, Inc.
1997(2) McKenzie (registered investment
company)
Bruce L. Crockett - 1944 1997(1) Chairman, Crockett Technology ACE Limited (insurance
2001(2) Associates (technology company); Captaris, Inc.
consulting company) and (unified messaging provider)
Captaris, Inc. (unified
messaging provider)
Albert R. Dowden - 1941 2000(1) Director of a number of public Cortland Trust, Inc.
2001(2) and private business (Chairman) (registered
corporations, including the Boss investment company); Annuity
Group, Ltd. (private investment and Life Re (Holdings), Ltd.
and management) and Magellan (insurance company)
Insurance Company; formerly,
President, Chief Executive
Officer and Director, Volvo
Group North America, Inc.;
Senior Vice President, AB Volvo
and director of various
affiliated Volvo Group companies
Edward K. Dunn, Jr. - 1935 1998(1) Formerly, Chairman, Mercantile None
2001(2) Mortgage Corp.; President and
Chief Operating Officer,
Mercantile-Safe Deposit & Trust
Co.; and President, Mercantile
Bankshares Corp.
Jack M. Fields - 1952 1997(1) Chief Executive Officer, Twenty Administaff
2001(2) First Century Group, Inc.
(government affairs company) and
Texana Timber LP
Carl Frischling - 1937 1997(1) Partner, law firm of Kramer Cortland Trust, Inc.
2001(2) Levin Naftalis & Frankel LLP (registered investment company)
Prema Mathai-Davis - 1950 1998(1) Formerly, Chief Executive None
2001(2) Officer, YWCA of the USA
Lewis F. Pennock - 1942 1997(1) Partner, law firm of Pennock & None
2001(2) Cooper
Ruth H. Quigley - 1935 2001(1) Retired None
1997(2)
Louis S. Sklar - 1939 1997(1) Executive Vice President, None
2001(2) Development and Operations,
Hines Interests Limited
Partnership (real estate
development company)
(1) Denotes service as trustee of AIM Advisor Funds.
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(2) Denotes service as trustee of AIM Series Trust.
NOMINEES WHO CURRENTLY ARE INTERESTED PERSONS
NAME, YEAR OF BIRTH AND
POSITION(s) HELD WITH THE TRUSTEE PRINCIPAL OCCUPATION(s)
TRUSTS SINCE DURING PAST 5 YEARS OTHER DIRECTORSHIP(s) HELD
- ------------------------- ------------- ------------------------------ --------------------------
Robert H. Graham(1) - 1946 1997(2) Director and Chairman, A I M None
Chairman and President 1998(3) Management Group Inc. (financial
services holding company);
and Director and Vice
Chairman, AMVESCAP PLC
(parent of AIM and a global
investment management firm)
and Chairman, AMVESCAP PLC -
AIM Division; formerly,
President and Chief
Executive Officer, A I M
Management Group Inc.;
Director, Chairman and
President, A I M Advisors,
Inc. (registered investment
advisor); Director and
Chairman, A I M Capital
Management, Inc. (registered
investment advisor), A I M
Distributors, Inc.
(registered broker dealer),
A I M Fund Services, Inc.
(registered transfer agent),
and Fund Management Company
(registered broker dealer);
and Chief Executive Officer,
AMVESCAP PLC - Managed
Products
(1) Mr. Graham is considered an interested person of the Trusts because he
is a director of AMVESCAP PLC, parent of the advisor to, and principal
underwriter of, the Trusts.
(2) Denotes service as trustee of AIM Advisor Funds.
(3) Denotes service as trustee of AIM Series Trust.
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NAME, YEAR OF BIRTH AND
POSITION(s) HELD WITH THE PRINCIPAL OCCUPATION(s)
TRUSTS TRUSTEE SINCE DURING PAST 5 YEARS OTHER DIRECTORSHIP(s) HELD
- ------------------------- ------------- -------------------------------- ----------------------------
Mark H. Williamson(4) - 1951 2003(5) Director, President and Chief Director of each of the ten
Executive Vice President Executive Officer, A I M INVESCO Funds
Management Group Inc.; Director,
Chairman and President, A I M
Advisors, Inc. (registered
investment advisor);
Director, A I M
Distributors, Inc.
(registered broker dealer);
and Chief Executive Officer
of the AIM Division of
AMVESCAP PLC (2003-present);
formerly, Chief Executive
Officer, Managed Products
Division, AMVESCAP PLC
(2001-2002); Chairman of the
Board (1998-2002), President
(1998-2002) and Chief
Executive Officer
(1998-2002) of INVESCO Funds
Group, Inc. (registered
investment advisor) and
INVESCO Distributors, Inc.
(registered broker dealer);
Chief Operating Officer and
Chairman of the Board of
INVESCO Global Health
Sciences Fund; Chairman and
Chief Executive Officer of
NationsBanc Advisors, Inc.;
and Chairman of NationsBanc
Investments, Inc.
(4) Mr. Williamson is considered an interested person of the Trusts because
he is an officer and a director of the advisor to, and a director of
the principal underwriter of, the Trusts.
(5) Denotes service as trustee of both AIM Advisor Funds and AIM Series
Trust.
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NEW NOMINEES WHO WILL BE INDEPENDENT TRUSTEES
PRINCIPAL OCCUPATION(s)
NAME AND YEAR OF BIRTH DURING PAST 5 YEARS OTHER DIRECTORSHIP(s) HELD
- ---------------------- -------------------------------- --------------------------
Bob R. Baker - 1936 Consultant (2000-present); None
formerly, President and Chief
Executive Officer (1988-2000) of
AMC Cancer Research Center,
Denver, Colorado; until
mid-December 1988, Vice
Chairman of the Board of
First Columbia Financial
Corporation, Englewood,
Colorado; formerly, Chairman
of the Board and Chief
Executive Officer of First
Columbia Financial
Corporation.
James T. Bunch - 1942 Co-President and Founder of None
Green, Manning & Bunch Ltd.,
Denver, Colorado (1988-present)
(investment banking firm);
Director and Vice President of
Western Golf Association and
Evans Scholars Foundation;
Executive Committee, United
States Golf Association;
formerly, General Counsel and
Director of Boettcher & Co.,
Denver, Colorado; and formerly,
Chairman and Managing Partner,
law firm of Davis, Graham &
Stubbs, Denver, Colorado.
Gerald J. Lewis - 1933 Chairman of Lawsuit Resolution General Chemical Group, Inc.,
Services, San Diego, California Hampdon, New Hampshire
(1987-present); formerly, (1996-present), Wheelabrator
Associate Justice of the Technologies, Inc. (waste
California Court of Appeals; and management company), Fisher
Of Counsel, law firm of Latham & Scientific, Inc., Henley
Watkins, San Diego, California Manufacturing, Inc.
(1987-1997). (laboratory supplies), and
California Coastal
Properties, Inc.
Larry Soll, Ph.D. - 1942 Retired; formerly, Chairman of Synergen Inc. (biotechnology
the Board (1987-1994), Chief company)(since
Executive Officer (1982-1989 and incorporation in 1982) and
1993-1994) and President Isis Pharmaceuticals, Inc.
(1982-1989) of Synergen Inc.
(biotechnology company); and
formerly, Trustee of INVESCO
Global Health Sciences Fund.
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THE BOARDS' RECOMMENDATION ON PROPOSAL 1
Your Board, including the independent trustees of each Board,
unanimously recommends that you vote "FOR" these 16 nominees.
COMMITTEES OF THE BOARDS
Each Board has four standing committees: an Audit Committee, an
Investments Committee, a Valuation Committee and a Committee on
Directors/Trustees. These committees will remain as part of the combined board.
AUDIT COMMITTEE
Each Audit Committee is comprised entirely of independent trustees. The
current members of each Audit Committee are Messrs. Bruce L. Crockett, Albert R.
Dowden (Vice Chair), Edward K. Dunn, Jr. (Chair), Jack M. Fields, Lewis F.
Pennock, Louis S. Sklar, Dr. Prema Mathai-Davis and Miss Ruth H. Quigley. Each
Audit Committee is responsible for: (i) the appointment, compensation and
oversight of any independent auditors employed by each Fund (including
resolution of disagreements between each Fund's management and the auditor
regarding financial reporting) for the purpose of preparing or issuing an audit
report or related work; (ii) overseeing the financial reporting process of each
Fund; (iii) monitoring the process and the resulting financial statements
prepared by management to promote accuracy of financial reporting and asset
valuation; and (iv) pre-approving permissible non-audit services that are
provided to each Fund by its independent auditors.
COMMITTEE ON DIRECTORS/TRUSTEES
Each Committee on Directors/Trustees is comprised entirely of
independent trustees. The current members of each Committee on
Directors/Trustees are Messrs. Bayley, Crockett (Chair), Dowden, Dunn, Fields
(Vice Chair), Pennock and Sklar, Dr. Mathai-Davis and Miss Quigley. Each
Committee on Directors/Trustees is responsible for: (i) nominating persons who
are not interested persons of a Trust for election or appointment: (a) as
additions to the Board, (b) to fill vacancies which, from time to time, may
occur in the Board and (c) for election by shareholders of the Fund at meetings
called for the election of trustees; (ii) nominating persons who are not
interested persons of a Trust for selection as members of each committee of the
Board, including, without limitation, the Audit Committee, the Committee on
Directors/Trustees, the Investments Committee and the Valuation Committee, and
to nominate persons for selection as chair and vice chair of each such
committee; (iii) reviewing from time to time the compensation payable to the
independent trustees and making recommendations to the Board regarding
compensation; (iv) reviewing and evaluating from time to time the functioning of
the Board and the various committees of the Board; (v) selecting independent
legal counsel to the independent trustees and approving the compensation paid to
independent legal counsel; and (vi) approving the compensation paid to
independent counsel and other advisers, if any, to the Audit Committee of a
Trust.
Each Committee on Directors/Trustees will consider nominees recommended
by a shareholder to serve as trustees, provided: (i) that such person is a
shareholder of record at the time he or she submits such names and is entitled
to vote at the meeting of shareholders at which trustees will be elected; and
(ii) that the Committee on Directors/Trustees or the Board, as applicable, shall
make the final determination of persons to be nominated.
11
Notice procedures set forth in each Trust's bylaws require that any
shareholder of a Fund desiring to nominate a trustee for election at a
shareholder meeting must submit to the applicable Trust's Secretary the
nomination in writing not later than the close of business on the later of the
90th day prior to such shareholder meeting or the tenth day following the day on
which public announcement is made of the shareholder meeting and not earlier
than the close of business on the 120th day prior to the shareholder meeting.
The notice must set forth: (i) as to each person whom the shareholder proposes
to nominate for election or reelection as a trustee all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of trustees in an election contest, or is otherwise required, in each
case pursuant to Regulation 14A of the Securities Exchange Act of 1934
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a trustee if elected); and (ii) as to the
shareholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination is made: (a) the name and address of such shareholder, as they
appear on the Trust's books, and of such beneficial owner; and (b) the number of
shares of each series portfolio of a Trust which are owned of record or
beneficially by such shareholder and such beneficial owner.
INVESTMENTS COMMITTEE
The current members of each Trust's Investments Committee are Messrs.
Bayley, Crockett, Dowden, Dunn, Fields, Carl Frischling, Pennock and Sklar
(Chair), Dr. Mathai-Davis (Vice Chair) and Miss Quigley. Each Investments
Committee is responsible for: (i) overseeing AIM's investment-related compliance
systems and procedures to ensure their continued adequacy; and (ii) considering
and acting, on an interim basis between meetings of the full Board, on
investment-related matters requiring Board consideration, including dividends
and distributions, brokerage policies and pricing matters.
VALUATION COMMITTEE
The current members of each Trust's Valuation Committee are Messrs.
Dunn and Pennock (Chair), and Miss Quigley (Vice Chair). Each Valuation
Committee is responsible for: (i) periodically reviewing AIM's Procedures for
Valuing Securities ("Procedures"), and making any recommendations to AIM with
respect thereto; (ii) reviewing proposed changes to the Procedures recommended
by AIM from time to time; (iii) periodically reviewing information provided by
AIM regarding industry developments in connection with valuation; (iv)
periodically reviewing information from AIM regarding fair value and liquidity
determinations made pursuant to the Procedures, and making recommendations to
the full Board in connection therewith (whether such information is provided
only to the Committee or to the Committee and the full Board simultaneously);
and (v) if requested by AIM, assisting AIM's internal valuation committee and/or
the full Board in resolving particular valuation anomalies.
12
BOARD AND COMMITTEE MEETING ATTENDANCE
The following table sets forth information regarding the number of
meetings held by each Board and each committee of each Board for each Trust's
most recently completed fiscal year. All of the current trustees then serving
attended at least 75% of the meetings of each Board or applicable committee held
during the most recent fiscal year.
AUDIT COMMITTEE ON INVESTMENTS VALUATION
BOARD COMMITTEE DIRECTORS/TRUSTEES COMMITTEE COMMITTEE
AIM ADVISOR FUNDS(1) thirteen six five four one
AIM SERIES TRUST(2) ten seven five four one
(1) Information disclosed is for the fiscal year ended July 31, 2003.
(2) Information disclosed is for the fiscal year ended December 31, 2002.
TRUSTEE'S COMPENSATION
Each trustee who is not affiliated with AIM is compensated for his or
her services according to a fee schedule which recognizes the fact that such
trustee also serves as a director or trustee of other AIM Funds. Each such
trustee receives a fee, allocated among the AIM Funds for which he or she serves
as a director or trustee, which consists of an annual retainer component and a
meeting fee component.
Information regarding compensation paid or accrued for each trustee of
the Trusts who was not affiliated with AIM during the year ended December 31,
2002 is found in Exhibit B.
RETIREMENT PLAN FOR TRUSTEES
The trustees have adopted a retirement plan for the trustees of the
Trusts who are not affiliated with AIM. The retirement plan includes a
retirement policy as well as retirement benefits for the non-AIM-affiliated
trustees.
The retirement policy permits each non-AIM-affiliated trustee to serve
until December 31 of the year in which the trustee turns 72. A majority of the
trustees may extend from time to time the retirement date of a trustee.
Annual retirement benefits are available to each non-AIM-affiliated
trustee of the Trusts and/or the other AIM Funds (each, a "Covered Fund") who
has at least five years of credited service as a trustee (including service to a
predecessor fund) for a Covered Fund. The retirement benefits will equal 75% of
the trustee's annual retainer paid or accrued by any Covered Fund to such
trustee during the twelve-month period prior to retirement, including the amount
of any retainer deferred under a separate deferred compensation agreement
between the Covered Fund and the trustee. The annual retirement benefits are
payable in quarterly installments for a number of years equal to the lesser of
(i) ten or (ii) the number of such trustee's credited years of service. A death
benefit is also available under the plan that provides a surviving spouse with a
quarterly installment of 50% of a deceased trustee's retirement benefits for the
same length of
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time that the trustee would have received the benefits based on his or her
service. A trustee must have attained the age of 65 (55 in the event of death or
disability) to receive any retirement benefit. Payment of benefits under the
plan is not secured or funded by the Trusts.
DEFERRED COMPENSATION AGREEMENTS
Messrs. Dunn, Fields, Frischling and Sklar and Dr. Mathai-Davis (the
"Deferring Trustees") have each executed a Deferred Compensation Agreement
(collectively, the "Compensation Agreements"). Pursuant to the Compensation
Agreements, the Deferring Trustees have the option to elect to defer receipt of
up to 100% of their compensation payable by the Trusts, and such amounts are
placed into a deferral account. Currently, the Deferring Trustees have the
option to select various AIM Funds in which all or part of their deferral
accounts shall be deemed to be invested. Distributions from the Deferring
Trustees' deferral accounts will be paid in cash, generally in equal quarterly
installments over a period of up to ten (10) years (depending on the
Compensation Agreement) beginning on the date selected under the Compensation
Agreement. Each Board, in its sole discretion, may accelerate or extend the
distribution of such deferral accounts after the Deferring Trustee's retirement
benefits commence under the plan. Each Board, in its sole discretion, also may
accelerate or extend the distribution of such deferral accounts after the
Deferring Trustee's termination of service as a trustee of a Trust. If a
Deferring Trustee dies prior to the distribution of amounts in his or her
deferral account, the balance of the deferral account will be distributed to his
or her designated beneficiary. The Compensation Agreements are not funded and,
with respect to the payments of amounts held in the deferral accounts, the
Deferring Trustees have the status of unsecured creditors of the Trusts and of
each other AIM Fund from which they are deferring compensation.
PROPOSAL 2 -
APPROVAL OF THE AAF PLAN
TO RESTRUCTURE EACH SERIES PORTFOLIO OF AIM ADVISOR FUNDS
AS A NEW SERIES PORTFOLIO OF AIM INVESTMENT SECURITIES FUNDS
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 2?
Proposal 2 applies only to the shareholders of AIM Real Estate Fund.
BACKGROUND
AIM Advisor Funds ("AAF"), a Delaware statutory trust, currently is
comprised of two series portfolios: AIM International Core Equity Fund and AIM
Real Estate Fund. AMVESCAP has identified these two series portfolios as
appropriate to be restructured as new series portfolios of AIM Investment
Securities Funds, an existing open-end management investment company organized
as a statutory trust under the Delaware Statutory Trust Act ("AIS").
AAF's Board of Trustees (the "AAF Board") has approved the AAF Plan,
which provides for a series of transactions to restructure each of AIM
International Core Equity Fund and AIM Real Estate Fund (each, a "Current Fund")
as a corresponding series (a "New Fund") of AIS. Under the AAF Plan, each
Current Fund will transfer all of its assets to a corresponding New Fund in
exchange solely for voting shares of beneficial interest in the New Fund and the
New Fund's assumption of all of the Current Fund's liabilities (collectively,
the "AAF
14
Restructuring"). A form of the AAF Plan relating to the proposed AAF
Restructuring is set forth in Appendix I.
Approval of the AAF Plan with respect to each Current Fund requires the
affirmative vote of a majority of the votes cast by the shareholders of that
Current Fund on Proposal 2. The Board is soliciting the proxies of the
shareholders of AIM Real Estate Fund to vote on the AAF Plan with this Proxy
Statement. The Board is soliciting the proxies of the shareholders of AIM
International Core Equity Fund to vote on the AAF Plan with a separate proxy
statement.
REASONS FOR THE PROPOSED AAF RESTRUCTURING
The AAF Restructuring is being proposed to simplify the organizational
structure and reduce the costs of the AIM Funds. The operations of each New Fund
following the AAF Restructuring will be substantially similar to those of its
predecessor Current Fund. Restructuring each Current Fund as a New Fund of AIS
will have the effect of consolidating the record-keeping, accounting, financial
reporting and securities law compliance in a single investment company, which
will in turn create greater operating efficiencies for the AIM Funds. AIS, like
AAF, operates as an open-end management investment company registered with the
SEC under the 1940 Act.
WHAT THE PROPOSED AAF RESTRUCTURING WILL INVOLVE
To accomplish the AAF Restructuring, each New Fund has been established
as a series portfolio of AIS. On the closing date, each Current Fund will
transfer all of its assets to the corresponding classes of the corresponding New
Fund in exchange solely for a number of full and fractional classes of shares of
the New Fund equal to the number of full and fractional shares of beneficial
interest of the corresponding classes of the Current Fund then outstanding and
the New Fund's assumption of the Current Fund's liabilities. Immediately
thereafter, each Current Fund will distribute those New Fund shares to its
shareholders in complete liquidation of such Current Fund. Upon completion of
the AAF Restructuring, each shareholder of each Current Fund will be the owner
of full and fractional shares of the corresponding New Fund equal in number and
aggregate net asset value to the shares he or she held in the Current Fund. As
soon as practicable after the consummation of the AAF Restructuring, each
Current Fund will be terminated as a designated series of AAF and AAF will be
terminated as a Delaware statutory trust.
The obligations of AAF and AIS under the AAF Plan are subject to
various conditions stated therein. To provide against unforeseen events, the AAF
Plan may be terminated or amended at any time prior to the closing of the AAF
Restructuring by action of the AAF Board, notwithstanding the approval of the
AAF Plan by the shareholders of either Current Fund. However, no amendments may
be made that would materially adversely affect the interests of shareholders of
either Current Fund. AAF and AIS may at any time waive compliance with any
condition contained in the AAF Plan, provided that the waiver does not
materially adversely affect the interests of shareholders of either Current
Fund.
The AAF Plan authorizes AAF to acquire one share of each class of each
New Fund and, as the sole shareholder of each New Fund prior to the AAF
Restructuring, to do each of the following:
15
- Approve with respect to each New Fund a new investment
advisory agreement with AIM that will be substantially
identical to AAF's existing investment advisory agreement with
AIM.
- Approve with respect to AIM International Core Equity Fund a
new sub-advisory agreement between AIM and INVESCO Global
Asset Management (N.A.), Inc. that will be substantially
identical to the existing sub-advisory agreement between AIM
and INVESCO Global Asset Management (N.A.), Inc.
- Approve with respect to each New Fund a new administrative
services agreement with AIM that will be substantially
identical to AAF's existing administrative services agreement
with AIM.
- Approve with respect to each New Fund a distribution agreement
with AIM Distributors. The proposed distribution agreement
will provide for substantially identical distribution services
as currently provided to each corresponding Current Fund by
AIM Distributors.
- Approve a distribution plan pursuant to Rule 12b-1 under the
1940 Act with respect to each class of each New Fund that will
be substantially identical to the corresponding Current Fund's
existing distribution plan for that class.
- Approve with respect to each New Fund a custodian agreement
with State Street Bank and Trust Company and a transfer agency
and servicing agreement with A I M Fund Services, Inc., each
of which currently provides such services to the corresponding
Current Fund, and a multiple class plan pursuant to Rule 18f-3
of the 1940 Act which will be substantially identical to the
multiple class plan that exists for the corresponding Current
Fund.
- Ratify the selection of Ernst & Young LLP, the accountants for
each Current Fund, as the independent public accountants for
each New Fund.
- Approve such other agreements and plans as are necessary for
each New Fund's operation as a series of an open-end
management investment company.
AIS's transfer agent will establish for each shareholder an account
containing the appropriate number of shares of each class of each New Fund. Such
accounts will be identical in all respects to the accounts currently maintained
by AAF's transfer agent for each shareholder of the Current Funds. Shares held
in Current Fund accounts will automatically be designated as shares of the New
Funds. Certificates for Current Fund shares issued before the AAF Restructuring
will represent shares of the corresponding New Fund after the AAF Restructuring.
Shareholders of the New Funds will not have the right to demand or require AIS
to issue share certificates. Any account options or privileges on accounts of
shareholders under the Current Funds will be replicated on the New Fund account.
No sales charges will be imposed in connection with the AAF Restructuring.
Assuming your approval of Proposal 2, AAF currently contemplates that
the AAF Restructuring will be consummated on October 29, 2003.
16
THE FEDERAL INCOME TAX CONSEQUENCES OF THE AAF RESTRUCTURING
AAF and AIS will receive an opinion of Ballard Spahr Andrews &
Ingersoll, LLP to the effect that the AAF Restructuring will qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended. Accordingly, the Current Funds, the New Funds and the
shareholders of the New Funds will recognize no gain or loss for Federal income
tax purposes as a result of the AAF Restructuring. Shareholders of the Current
Funds should consult their tax advisers regarding the effect, if any, of the AAF
Restructuring in light of their individual circumstances and as to state and
local consequences, if any, of the AAF Restructuring.
APPRAISAL RIGHTS
Appraisal rights are not available to shareholders. However,
shareholders retain the right to redeem their shares of the Current Funds or the
New Funds, as the case may be, at any time before or after the AAF
Restructuring.
AIS COMPARED TO AAF
General
AIS and AAF are both Delaware statutory trusts. The operations of AIS
and AAF, as Delaware statutory trusts, are governed by the terms of their
respective Declarations of Trust, Amended and Restated Bylaws and applicable
Delaware law.
Structure of AIS
AIS is an existing statutory trust established under the laws of the
State of Delaware by the filing of a certificate of trust in the office of the
Secretary of State of Delaware. AIS has established new series portfolios
corresponding to and having identical designations as the series portfolios of
AAF. AIS has also established classes with respect to each New Fund
corresponding to and having identical designations as the classes of each
Current Fund. Each New Fund will have the same investment objectives, policies,
and restrictions as its predecessor Current Fund. AIS's fiscal year is the same
as that of AAF. No New Fund will have any operations prior to the AAF
Restructuring. Initially, AAF will be the sole shareholder of each New Fund.
As a Delaware statutory trust, AIS's operations are governed by its
Amended and Restated Agreement and Declaration of Trust, as amended (the "AIS
Declaration"), Amended and Restated Bylaws and applicable Delaware law. Certain
issues relating to the form of organization of both AIS and AAF are summarized
below. The operations of AIS will continue to be subject to the provisions of
the 1940 Act and the rules and regulations thereunder.
17
Trustees and Officers of AIS
Subject to the provisions of the AIS Declaration, the business of AIS
will be managed by its trustees, who have all powers necessary or convenient to
carry out their responsibilities. The responsibilities, powers, and fiduciary
duties of the trustees of AIS and AAF are identical to one another.
Certain of the current officers of AAF currently serve as officers of
AIS and those current officers of AAF will perform the same functions on behalf
of the New Funds and AIS following the AAF Restructuring that they now perform
on behalf of AIM Real Estate Fund and AAF.
Shares of AIS
The beneficial interests in the New Funds will be represented by
transferable shares, par value $0.01 per share. Shareholders do not have the
right to demand or require AIS to issue share certificates. The trustees have
the power under the AIS Declaration to establish new series and classes of
shares. The AIS Declaration permits the trustees to issue an unlimited number of
shares of each class and series.
AIM Real Estate Fund currently has the classes of shares set forth in
Exhibit A. AIS has established for each New Fund the classes that currently
exist for its predecessor Current Fund. Except as discussed in this Proxy
Statement, shares of each class of each New Fund will have rights, privileges,
and terms substantially similar to those of the corresponding class of the
Current Fund.
Liability of Shareholders
The Delaware Statutory Trust Act provides that shareholders of a
Delaware statutory trust shall be entitled to the same limitations of liability
extended to shareholders of private for-profit corporations. There is, however,
a remote possibility that, under certain circumstances, shareholders of a
Delaware statutory trust might be held personally liable for the trust's
obligations to the extent the courts of another state that does not recognize
such limited liability were to apply the laws of such state to a controversy
involving such obligations. The AIS Declaration and the AAF Amended and Restated
Agreement and Declaration of Trust, as amended, (the "AAF Declaration" and
together with the AIS Declaration, the "Declarations of Trust") provide that
shareholders of AAF and AIS, as applicable, shall not be subject to any personal
liability for acts or obligations of AAF and AIS and that every written
agreement, obligation or other undertaking made or issued by AAF and AIS, shall
contain a provision to the effect that shareholders are not personally liable
thereunder. In addition, the Declarations of Trust provide for indemnification
out of the property of AAF and AIS, as applicable, for any shareholder held
personally liable solely by reason of his or her being or having been a
shareholder. Therefore, the risk of any shareholder incurring financial loss
beyond his or her investment due to shareholder liability is limited to
circumstances in which AAF and AIS, itself is unable to meet its obligations and
the express disclaimer of shareholder liabilities is determined not to be
effective. Given the nature of the assets and operations of AAF and AIS, the
possibility of AAF and AIS, as applicable, being unable to meet their
obligations is considered remote, and even if a claim were brought against AAF
or AIS, and a court determined that shareholders were personally liable, it
would likely not impose a material obligation on a shareholder.
18
Election of Trustees; Terms
The shareholders of each of AAF and AIS have elected a majority of the
trustees of AAF and AIS respectively. Such trustees serve for the life of AAF
and AIS, subject to their earlier death, incapacitation, resignation, retirement
or removal (see below). In the case of any vacancy on the AAF Board or the AIS's
Board of Trustees (the "AIS Board" and together with the AAF Board, the "Boards
of Trustees"), a majority of the trustees may appoint a successor to fill such
vacancy. The right of the Boards of Trustees to appoint trustees to fill
vacancies without shareholder approval is subject to the provisions of the 1940
Act.
Removal of Trustees
A trustee of AAF and AIS may be removed at any time by a written
instrument signed by at least two-thirds of the trustees or by vote of
two-thirds of the outstanding shares of AAF and AIS, respectively.
Meetings of Shareholders
AAF and AIS are not required to hold annual meetings of shareholders
unless required by the 1940 Act and do not intend to do so. The bylaws of each
of AAF and AIS provide that any trustee may call a special meeting of
shareholders and the trustees shall call a special meeting of the shareholders
solely for the purpose of removing one or more trustees upon written request of
the holders of not less than 10% of the outstanding shares of AAF and AIS, as
applicable. Special meetings may be called for the purpose of electing trustees
or for any other action requiring shareholder approval, or for any matter deemed
by the trustees to be necessary or desirable.
Liability of Trustees and Officers; Indemnification
Delaware law provides that trustees of a statutory trust shall not be
liable to the statutory trust or its shareholders for acting in good faith
reliance on the provisions of its governing instrument and that the trustee's
liabilities may be expanded or restricted by such instrument. Under the
Declarations of Trust, the trustees and officers of AAF and AIS are not liable
for any act or omission or any conduct whatsoever in their capacity as trustees,
except for liability to the trust or shareholders due to willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of trustee. Delaware law allows a statutory trust to
indemnify and hold harmless any trustee or other person against any and all
claims and demands. The Declarations of Trust provide for the indemnification of
their respective trustees and officers to the extent that such trustees and
officers act in good faith and reasonably believe that their conduct is in the
best interests of such trust, except with respect to any matter in which it has
been determined that such trustee acted with willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties.
Termination
Pursuant to the Declarations of Trust, each of AAF and AIS or any
series or class of shares of beneficial interest in such trust may be terminated
by: (1) a majority shareholder vote of such trust or the affected series or
class, or (2) if there are fewer than 100 shareholders of record of such trust
or of such terminating series or class, the trustees pursuant to written notice
to the shareholders of such trust or the affected series or class.
19
Voting Rights of Shareholders
The Declarations of Trust grant shareholders power to vote only with
respect to the following: (i) election of trustees, provided that a meeting of
shareholders has been called for that purpose; (ii) removal of trustees,
provided that a meeting of shareholders has been called for that purpose; (iii)
termination of such trust or a series or class of its shares of beneficial
interest, provided that a meeting of shareholders has been called for that
purpose; (iv) sale of all or substantially all of the assets of such trust or
one of its investment portfolios; (v) merger or consolidation of such trust or
any of its investment portfolios, with certain exceptions; (vi) approval of any
amendments to shareholders' voting rights under such Declarations of Trust; and
(vii) approval of such additional matters as may be required by law or as the
trustees, in their sole discretion, shall determine.
Dissenters' Rights
Neither Delaware law nor the Declarations of Trust confer upon
shareholders rights of appraisal or dissenters' rights.
Amendments to Organization Documents
Consistent with Delaware law, the Boards of Trustees may, without
shareholder approval, amend their respective Declarations of Trust at any time,
except to eliminate any voting rights pertaining to the shares of such trust,
without approval of the majority of the shares of such trust. The trustees shall
have the power to alter, amend or repeal the bylaws of such trust or adopt new
bylaws at any time.
The foregoing discussion is only a summary of certain of the issues
relating to the form of organization of both AIS and AAF. Shareholders should
refer to the provisions of the governing documents of AIS and AAF documents and
state law directly for more details. Copies of the Declarations of Trust and the
Amended and Restated Bylaws of AAF and AIS are available to shareholders without
charge upon written request to AAF.
THE BOARD'S RECOMMENDATION ON PROPOSAL 2
Your Board, including the independent trustees, unanimously recommends
that you vote "FOR" this Proposal.
PROPOSAL 3 -
APPROVAL OF THE AST PLAN
TO RESTRUCTURE THE SOLE SERIES PORTFOLIO OF AIM SERIES TRUST
AS A NEW SERIES PORTFOLIO OF AIM GROWTH SERIES
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 3?
Proposal 3 applies only to the shareholders of AIM Global Trends Fund.
BACKGROUND
AIM Series Trust ("AST"), a Delaware statutory trust, currently is
comprised of one series portfolio: AIM Global Trends Fund. AMVESCAP has
identified this series portfolio as appropriate to be restructured as a new
series portfolio of AIM Growth Series, an existing open-end
20
management investment company organized as a statutory trust under the Delaware
Statutory Trust Act ("AGS").
AST's Board of Trustees (the "AST Board") has approved the AST Plan,
which provides for a series of transactions to restructure AIM Global Trends
Fund (the "Current Fund") as a corresponding series (the "New Fund") of AGS.
Under the AST Plan, the Current Fund will transfer all of its assets to the New
Fund in exchange solely for voting shares of beneficial interest in the New Fund
and the New Fund's assumption of all the Current Fund's liabilities
(collectively, the "AST Restructuring"). A form of the AST Plan relating to the
proposed AST Restructuring is set forth in Appendix I.
Approval of the AST Plan requires the affirmative vote of a majority of
the votes cast by the shareholders of the Current Fund on Proposal 3.
REASONS FOR THE PROPOSED AST RESTRUCTURING
The AST Restructuring is being proposed to simplify the organizational
structure and reduce the costs of the AIM Funds. The operations of the New Fund
following the AST Restructuring will be substantially similar to those of the
predecessor Current Fund. Restructuring the Current Fund as a New Fund of AGS
will have the effect of consolidating the record-keeping, accounting, financial
reporting and securities law compliance in a single investment company, which
will in turn create greater operating efficiencies for the AIM Funds. AGS, like
AST, operates as an open-end management investment company registered with the
SEC under the 1940 Act.
WHAT THE PROPOSED AST RESTRUCTURING WILL INVOLVE
To accomplish the AST Restructuring, the New Fund has been established
as a series portfolio of AGS. On the closing date, the Current Fund will
transfer all of its assets to the corresponding classes of the New Fund in
exchange solely for a number of full and fractional classes of shares of the New
Fund equal to the number of full and fractional shares of beneficial interest of
the corresponding classes of the Current Fund then outstanding and the New
Fund's assumption of the Current Fund's liabilities. Immediately thereafter, the
Current Fund will distribute those New Fund shares to its shareholders in
complete liquidation of the Current Fund. Upon completion of the AST
Restructuring, each shareholder of the Current Fund will be the owner of full
and fractional shares of the New Fund equal in number and aggregate net asset
value to the shares he or she held in the Current Fund. As soon as practicable
after the consummation of the AST Restructuring, the Current Fund will be
terminated as a designated series of AST and AST will be terminated as a
Delaware statutory trust.
The obligations of AST and AGS under the AST Plan are subject to
various conditions stated therein. To provide against unforeseen events, the AST
Plan may be terminated or amended at any time prior to the closing of the AST
Restructuring by action of the AST Board, notwithstanding the approval of the
AST Plan by the shareholders of the Current Fund. However, no amendments may be
made that would materially adversely affect the interests of shareholders of the
Current Fund. AST and AGS may at any time waive compliance with any condition
contained in the AST Plan, provided that the waiver does not materially
adversely affect the interests of shareholders of the Current Fund.
21
The AST Plan authorizes AST to acquire one share of each class of the
New Fund and, as the sole shareholder of the New Fund prior to the AST
Restructuring, to do each of the following:
- Approve with respect to the New Fund a new investment advisory
agreement with AIM that will be substantially identical to
AST's existing investment advisory agreement with AIM.
- Approve with respect to the New Fund a new administrative
services agreement with AIM that will be substantially
identical to AST's existing administrative services agreement
with AIM.
- Approve with respect to the New Fund a distribution agreement
with AIM Distributors. The proposed distribution agreement
will provide for substantially identical distribution services
as currently provided to the Current Fund by AIM Distributors.
- Approve a distribution plan pursuant to Rule 12b-1 under the
1940 Act with respect to each class of the New Fund that will
be substantially identical to the Current Fund's existing
distribution plan for that class.
- Approve with respect to the New Fund a custodian agreement
with State Street Bank and Trust Company and a transfer agency
and servicing agreement with A I M Fund Services, Inc., each
of which currently provides such services to the Current Fund,
and a multiple class plan pursuant to Rule 18f-3 of the 1940
Act which will be substantially identical to the multiple
class plan that exists for the Current Fund.
- Ratify the selection of PricewaterhouseCoopers LLP, the
accountants for the Current Fund, as the independent public
accountants for the New Fund.
- Approve such other agreements and plans as are necessary for
the New Fund's operation as a series of an open-end management
investment company.
AGS's transfer agent will establish for each shareholder an account
containing the appropriate number of shares of each class of the New Fund. Such
accounts will be identical in all respects to the accounts currently maintained
by AST's transfer agent for each shareholder of the Current Fund. Shares held in
Current Fund accounts will automatically be designated as shares of the New
Fund. Certificates for Current Fund shares issued before the AST Restructuring
will represent shares of the New Fund after the AST Restructuring. Shareholders
of the New Fund will not have the right to demand or require AGS to issue share
certificates. Any account options or privileges on accounts of shareholders
under the Current Fund will be replicated on the New Fund account. No sales
charges will be imposed in connection with the AST Restructuring.
Assuming your approval of Proposal 3, AST currently contemplates that
the AST Restructuring will be consummated on November 4, 2003.
22
THE FEDERAL INCOME TAX CONSEQUENCES OF THE AST RESTRUCTURING
AST and AGS will receive an opinion of Ballard Spahr Andrews &
Ingersoll, LLP to the effect that the AST Restructuring will qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended. Accordingly, the Current Fund, the New Fund and the
shareholders of the New Fund will recognize no gain or loss for Federal income
tax purposes as a result of the AST Restructuring. Shareholders of the Current
Fund should consult their tax advisers regarding the effect, if any, of the AST
Restructuring in light of their individual circumstances and as to state and
local consequences, if any, of the AST Restructuring.
APPRAISAL RIGHTS
Appraisal rights are not available to shareholders. However,
shareholders retain the right to redeem their shares of the Current Fund or the
New Fund, as the case may be, at any time before or after the AST Restructuring.
AGS COMPARED TO AST
General
AGS and AST are both Delaware statutory trusts. The operations of AGS
and AST, as Delaware statutory trusts, are governed by the terms of their
respective Declarations of Trust, Amended and Restated Bylaws and applicable
Delaware law.
Structure of AGS
AGS is an existing statutory trust established under the laws of the
State of Delaware by the filing of a certificate of trust in the office of the
Secretary of State of Delaware. AGS has established a new series portfolio
corresponding to and having identical designations as the series portfolio of
AST. AGS has also established classes with respect to the New Fund corresponding
to and having identical designations as the classes of the Current Fund. The New
Fund will have the same investment objectives, policies, and restrictions as the
predecessor Current Fund. AGS's fiscal year is the same as that of AST. The New
Fund will not have any operations prior to the AST Restructuring. Initially, AST
will be the sole shareholder of the New Fund.
As a Delaware statutory trust, AGS's operations are governed by its
Amended and Restated Agreement and Declaration of Trust, as amended (the "AGS
Declaration"), Amended and Restated Bylaws and applicable Delaware law. Certain
issues relating to the form of organization of both AGS and AST are summarized
below. The operations of AGS will continue to be subject to the provisions of
the 1940 Act and the rules and regulations thereunder.
23
Trustees and Officers of AGS
Subject to the provisions of the AGS Declaration, the business of AGS
will be managed by its trustees, who have all powers necessary or convenient to
carry out their responsibilities. The responsibilities, powers, and fiduciary
duties of the trustees of AGS and AST are identical to one another.
All of the current officers of AST currently serve as officers of AGS
and those current officers of AST will perform the same functions on behalf of
the New Fund and AGS following the AST Restructuring that they now perform on
behalf of AIM Global Trends Fund and AST.
Shares of AGS
The beneficial interests in the New Fund will be represented by
transferable shares, par value $0.01 per share. Shareholders do not have the
right to demand or require AGS to issue share certificates. The trustees have
the power under the AGS Declaration to establish new series and classes of
shares. The AGS Declaration permits the trustees to issue an unlimited number of
shares of each class and series.
AIM Global Trends Fund currently has the classes of shares set forth in
Exhibit A. AGS has established for the New Fund the classes that currently exist
for the predecessor Current Fund. Except as discussed in this Proxy Statement,
shares of each class of the New Fund will have rights, privileges, and terms
substantially similar to those of the corresponding class of the Current Fund.
Liability of Shareholders
The Delaware Statutory Trust Act provides that shareholders of a
Delaware statutory trust shall be entitled to the same limitations of liability
extended to shareholders of private for-profit corporations. There is, however,
a remote possibility that, under certain circumstances, shareholders of a
Delaware statutory trust might be held personally liable for the trust's
obligations to the extent the courts of another state that does not recognize
such limited liability were to apply the laws of such state to a controversy
involving such obligations. The AGS Declaration and AST's Amended and Restated
Agreement and Declaration of Trust, as amended (the "AST Declaration" and
together with the AGS Declaration, the "Declarations of Trust") provide that
shareholders of AST and AGS, as applicable, shall not be subject to any personal
liability for acts or obligations of AST and AGS and that every written
agreement, obligation or other undertaking made or issued by AST and AGS, shall
contain a provision to the effect that shareholders are not personally liable
thereunder. In addition, the Declarations of Trust provide for indemnification
out of the property of AST and AGS, as applicable, for any shareholder held
personally liable solely by reason of his or her being or having been a
shareholder. Therefore, the risk of any shareholder incurring financial loss
beyond his or her investment due to shareholder liability is limited to
circumstances in which AST and AGS, itself is unable to meet its obligations and
the express disclaimer of shareholder liabilities is determined not to be
effective. Given the nature of the assets and operations of AST and AGS, the
possibility of AST and AGS, as applicable, being unable to meet their
obligations is considered remote, and even if a claim were brought against AST
or AGS, and a court determined that shareholders were personally liable, it
would likely not impose a material obligation on a shareholder.
24
Election of Trustees; Terms
The shareholders of each of AST and AGS have elected a majority of the
trustees of AST and AGS respectively. Such trustees serve for the life of AST
and AGS, subject to their earlier death, incapacitation, resignation, retirement
or removal (see below). In the case of any vacancy on the AST Board or AGS's
Board of Trustees (the "AGS Board" and together with the AST Board, the "Boards
of Trustees"), a majority of the trustees may appoint a successor to fill such
vacancy. The right of the Boards of Trustees to appoint trustees to fill
vacancies without shareholder approval is subject to the provisions of the 1940
Act.
Removal of Trustees
A trustee of AST and AGS may be removed at any time by a written
instrument signed by at least two-thirds of the trustees or by vote of
two-thirds of the outstanding shares of AST and AGS, respectively.
Meetings of Shareholders
AST and AGS are not required to hold annual meetings of shareholders
unless required by the 1940 Act and do not intend to do so. The bylaws of each
of AST and AGS provide that any trustee may call a special meeting of
shareholders and the trustees shall call a special meeting of the shareholders
solely for the purpose of removing one or more trustees upon written request of
the holders of not less than 10% of the outstanding shares of AST and AGS, as
applicable. Special meetings may be called for the purpose of electing trustees
or for any other action requiring shareholder approval, or for any matter deemed
by the trustees to be necessary or desirable.
Liability of Trustees and Officers; Indemnification
Delaware law provides that trustees of a statutory trust shall not be
liable to the statutory trust or its shareholders for acting in good faith
reliance on the provisions of its governing instrument and that the trustee's
liabilities may be expanded or restricted by such instrument. Under the
Declarations of Trust, the trustees and officers of AST and AGS are not liable
for any act or omission or any conduct whatsoever in their capacity as trustees,
except for liability to the trust or shareholders due to willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of trustee. Delaware law allows a statutory trust to
indemnify and hold harmless any trustee or other person against any and all
claims and demands. The Declarations of Trust provide for the indemnification of
their respective trustees and officers to the extent that such trustees and
officers act in good faith and reasonably believe that their conduct is in the
best interests of such trust, except with respect to any matter in which it has
been determined that such trustee acted with willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties.
Termination
Pursuant to the Declarations of Trust, each of AST and AGS or any
series or class of shares of beneficial interest in such trust may be terminated
by: (1) a majority shareholder vote of such trust or the affected series or
class, or (2) if there are fewer than 100 shareholders of record of such trust
or of such terminating series or class, the trustees pursuant to written notice
to the shareholders of such trust or the affected series or class.
25
Voting Rights of Shareholders
The Declarations of Trust grant shareholders power to vote only with
respect to the following: (i) election of trustees, provided that a meeting of
shareholders has been called for that purpose;(ii) removal of trustees, provided
that a meeting of shareholders has been called for that purpose; (iii)
termination of such trust or a series or class of its shares of beneficial
interest, provided that a meeting of shareholders has been called for that
purpose; (iv) sale of all or substantially all of the assets of such trust or
one of its investment portfolios; (v) merger or consolidation of such trust or
any of its investment portfolios, with certain exceptions; (vi) approval of any
amendments to shareholders' voting rights under such Declarations of Trust and
(vii) approval of such additional matters as may be required by law or as the
trustees, in their sole discretion, shall determine.
Dissenters' Rights
Neither Delaware law nor the Declarations of Trust confer upon
shareholders rights of appraisal or dissenters' rights.
Amendments to Organization Documents
Consistent with Delaware law, the Boards of Trustees may, without
shareholder approval, amend their respective Declarations of Trust at any time,
except to eliminate any voting rights pertaining to the shares of such trust,
without approval of the majority of the shares of such trust. The trustees shall
have the power to alter, amend or repeal the bylaws of such trust or adopt new
bylaws at any time.
The foregoing discussion above is only a summary of certain of the
issues relating to the form of organization of both AST and AGS. Shareholders
should refer to the provisions of the governing documents of AST and AGS and
state law directly for more details. Copies of the Declarations of Trust and the
Amended and Restated Bylaws of AST and AGS are available to shareholders without
charge upon written request to AST.
THE BOARD'S RECOMMENDATION ON PROPOSAL 3
Your Board, including the independent trustees, unanimously recommends
that you vote "FOR" this Proposal.
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the AAF Board has appointed Ernst & Young LLP
("E&Y") as such Trust's independent public accountants for the fiscal year
ending July 31, 2004. The Audit Committee of the AST Board has appointed
PricewaterhouseCoopers LLP ("PwC") as such Trust's independent public
accountants for the 2003 fiscal year ending December 31, 2003.
Representatives of E&Y and PwC are expected to be available at the
Special Meetings and to have the opportunity to make a statement and respond to
appropriate questions from the shareholders.
The Audit Committees of the AAF Board and the AST Board have considered
whether the provision of the services below is compatible with maintaining the
independence of E&Y and PwC, respectively.
26
FEES PAID TO E&Y RELATED TO AIM ADVISOR FUNDS (FOR 2002 FISCAL YEAR)
E&Y billed AIM Advisor Funds (consisting of two series portfolios)
aggregate fees for professional services rendered for the 2002 fiscal year as
follows:
FINANCIAL
INFORMATION SYSTEMS
DESIGN AND ALL OTHER
TRUST AND FISCAL YEAR END AUDIT FEES IMPLEMENTATION FEES FEES* TOTAL FEES
------------------------- ---------- ------------------- ----- ----------
AIM Advisor Funds (7/31/02).................... $33,394 $0 $4,746 $38,140
* All Other Fees includes fees billed for all other non-audit services,
including fees for tax-related services rendered to the AIM Advisor Funds.
FEES PAID TO E&Y NOT RELATED TO AIM ADVISOR FUNDS (FOR 2002 FISCAL YEAR)
E&Y billed AIM aggregate fees for professional services rendered for
the 2002 fiscal year to AIM, or any affiliate that provided services to AIM
Advisor Funds, as follows:
FINANCIAL
INFORMATION SYSTEMS
DESIGN AND
TRUST AND FISCAL YEAR END IMPLEMENTATION FEES ALL OTHER FEES** TOTAL FEES
------------------------- ------------------- ---------------- ----------
AIM Advisor Funds (7/31/02).................... $0 $39,340 $39,340
** As required by SEC rules, All Other Fees includes amounts paid to
E&Y by the Funds' advisor and other related entities that provide support for
the operations of AIM Advisor Funds. All Other Fees include services related to
tax services and research on accounting consultations. The services performed
for the Funds' advisor and related entities benefit many legal entities of AIM,
including many sister funds within the investment company complex.
FEES PAID TO PWC RELATED TO AIM SERIES TRUST (FOR 2002 FISCAL YEAR)
PwC billed AIM Series Trust (consisting of one series portfolio)
aggregate fees for professional services rendered for the 2002 fiscal year, as
follows:
FINANCIAL
INFORMATION SYSTEMS
DESIGN AND ALL OTHER
TRUST AND FISCAL YEAR END AUDIT FEES IMPLEMENTATION FEES FEES* TOTAL FEES
------------------------- ---------- ------------------- ----- ----------
AIM Series Trust (12/31/02).................... $27,420 $0 $4,438 $31,858
*All Other Fees Includes fees billed for all other non-audit services,
including fees for tax-related services rendered to AIM Series Trust.
27
FEES PAID TO PWC NOT RELATED TO AIM SERIES TRUST (FOR 2002 FISCAL YEAR)
PwC billed AIM aggregate fees for professional services rendered for
the 2002 fiscal year to AIM, or any affiliate that provided services to AIM
Series Trust, as follows:
FINANCIAL
INFORMATION SYSTEMS
DESIGN AND
TRUST AND FISCAL YEAR END IMPLEMENTATION FEES ALL OTHER FEES** TOTAL FEES
------------------------- ------------------- ---------------- ----------
AIM Series Trust (12/31/02).................... $0 $346,364 $346,364
** As required by SEC rules, All Other Fees includes amounts paid to
PwC by the Fund's advisor and other related entities that provide support for
the operations of AIM Series Trust. All Other Fees include business advisory
services performed for the selection of a transfer agent and its conversion. The
services provided benefited many legal entities of AIM, including other funds
within the AIM Fund complex.
ADDITIONAL INFORMATION
INVESTMENT ADVISOR
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, is the
investment advisor for the Funds.
ADMINISTRATOR
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173, is the
administrator for the Funds.
PRINCIPAL UNDERWRITER
AIM Distributors, 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173, is the principal underwriter for the Funds.
OFFICERS OF THE TRUSTS
Information regarding the current officers of the Trusts can be found
in Exhibit C.
SECURITY OWNERSHIP OF MANAGEMENT
Information regarding the ownership of each class of each Fund's shares
by the trustees, nominees, and current executive officers of the Trusts can be
found in Exhibit D.
OWNERSHIP OF SHARES
A list of the name, address and percent ownership of each person who,
as of July 25, 2003, to the knowledge of the Trusts owned 5% or more of any
class of the outstanding shares of each Fund can be found in Exhibit E.
28
TRUSTEE OWNERSHIP OF FUND SHARES
The dollar range of equity securities beneficially owned by each
trustee and nominee as of December 31, 2002 (i) in each Fund and (ii) on an
aggregate basis, in all registered investment companies overseen by the trustee
and nominee within the AIM Funds complex can be found in Exhibit F.
29
APPENDIX I
AIM ADVISOR FUNDS
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of
July 30, 2003, by and between AIM Advisor Funds, a Delaware statutory trust
("AAF"), acting on its own behalf and on behalf of each of its series
portfolios, all of which are identified on Schedule A to this Agreement, and AIM
Investment Securities Funds, a Delaware statutory trust (the "Trust"), acting on
its own behalf and on behalf of each of its series portfolios, all of which are
identified on Schedule A.
BACKGROUND
AAF is organized as a series management investment company and is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended. AAF currently publicly offers shares of
beneficial interest representing interests in two separate series portfolios.
Each of these two series portfolios is listed on Schedule A and is referred to
in this Agreement as a "Current Fund."
The Board of Trustees of AAF has designated multiple classes of shares
of beneficial interest that represent interests in each Current Fund. Each of
these classes is listed on Schedule B to this Agreement and is referred to in
this Agreement as a "Current Fund Class."
The Board of Trustees of AAF has determined that it would be in the
best interests of the shareholders of the Current Funds for the Current Funds to
reorganize as investment portfolios of the Trust. In anticipation of such
reorganization, the Board of Trustees of the Trust has established two
additional series portfolios corresponding to the Current Funds (each a "New
Fund"), and has designated multiple classes of shares of beneficial interest in
each New Fund corresponding to the Current Fund Classes (each a "New Fund
Class"). Schedule A lists the New Funds and Schedule B lists the New Fund
Classes.
Each Current Fund desires to provide for its reorganization (each, a
"Reorganization" and collectively, the "Reorganizations") through the transfer
of all of its assets to the corresponding New Fund in exchange for the
assumption by such New Fund of the liabilities of the corresponding Current Fund
and the issuance by the Trust to such Current Fund of shares of beneficial
interest in the New Fund ("New Fund Shares"). New Fund Shares received by a
Current Fund will have an aggregate net asset value equal to the aggregate net
asset value of the shares of the Current Fund immediately prior to the
Reorganization (the "Current Fund Shares"). Each Current Fund will then
distribute the New Fund Shares it has received to its shareholders.
The Reorganization of either Current Fund is not dependent upon the
consummation of the Reorganization of the other Current Fund, so that the
Reorganization of a Current Fund may be consummated even if the Reorganization
of the other Current Fund is not consummated. For convenience, the balance of
this Agreement refers only to a single Reorganization, but the terms and
conditions hereof shall apply separately to each Reorganization and to the
Current Fund and the corresponding New Fund participating therein, as
applicable.
AP-1
The Reorganization is subject to, and shall be effected in accordance
with, the terms of this Agreement. This Agreement is intended to be and is
adopted by AAF, on its own behalf and on behalf of the Current Funds, and by the
Trust, on its own behalf and on behalf of the New Funds, as a Plan of
Reorganization within the meaning of the regulations under Section 368(a) of the
Internal Revenue Code of 1986, as amended.
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. DEFINITIONS.
Any capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the preamble or background to this Agreement. In addition,
the following terms shall have the following meanings:
1.1 "Assets" shall mean all assets including, without limitation,
all cash, cash equivalents, securities, receivables (including interest and
dividends receivable), claims and rights of action, rights to register shares
under applicable securities laws, books and records, deferred and prepaid
expenses shown as assets on a Current Fund's books, and other property owned by
a Current Fund at the Effective Time.
1.2 "Closing" shall mean the consummation of the transfer of
Assets, assumption of Liabilities and issuance of shares described in Sections
2.1 and 2.2 of this Agreement, together with the related acts necessary to
consummate the Reorganization, to occur on the date set forth in Section 3.1.
1.3 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.4 "Current Fund" shall mean each of the two series portfolios of
AAF as shown on Schedule A.
1.5 "Current Fund Class" shall mean each class of shares of
beneficial interest in a Current Fund as shown on Schedule B.
1.6 "Current Fund Shares" shall mean the shares of a Current Fund
outstanding immediately prior to the Reorganization.
1.7 "Effective Time" shall have the meaning set forth in Section
3.1.
1.8 "Liabilities" shall mean all liabilities of a Current Fund
including, without limitation, all debts, obligations, and duties of whatever
kind or nature, whether absolute, accrued, contingent, or otherwise, whether or
not determinable at the Effective Time, and whether or not specifically referred
to herein.
1.9 "New Fund" shall mean each of the two series portfolios of the
Trust, one of which shall correspond to one of the Current Funds as shown on
Schedule A.
AP-2
1.10 "New Fund Class" shall mean each class of shares of beneficial
interest in a New Fund, one of which shall correspond to one of the Current Fund
Classes as shown on Schedule B.
1.11 "New Fund Shares" shall mean those shares of beneficial
interest in a New Fund issued to a Current Fund hereunder.
1.12 "Registration Statement" shall have the meaning set forth in
Section 5.4.
1.13 "RIC" shall mean a "regulated investment company" (as defined
under Subchapter M of the Code).
1.14 "SEC" shall mean the Securities and Exchange Commission.
1.15 "Shareholder(s)" shall mean a Current Fund's shareholder(s) of
record, determined as of the Effective Time.
1.16 "Shareholders Meeting" shall have the meaning set forth in
Section 5.1.
1.17 "Transfer Agent" shall have the meaning set forth in Section
2.2.
1.18 "1940 Act" shall mean the Investment Company Act of 1940, as
amended.
2. PLAN OF REORGANIZATION.
2.1 AAF agrees, on behalf of each Current Fund, to assign, sell,
convey, transfer and deliver all of the Assets of each Current Fund to its
corresponding New Fund. The Trust, on behalf of each New Fund, agrees in
exchange therefor:
(a) to issue and deliver to the corresponding Current
Fund the number of full and fractional (rounded to the third decimal
place) New Fund Shares of each New Fund Class designated on Schedule B
equal to the number of full and fractional Current Fund Shares of each
corresponding Current Fund Class designated on Schedule B; and
(b) to assume all of the Current Fund's Liabilities.
Such transactions shall take place at the Closing.
2.2 At the Effective Time (or as soon thereafter as is reasonably
practicable), (a) the New Fund Shares issued pursuant to Section 5.2 shall be
redeemed by each New Fund for $1.00 and (b) each Current Fund shall distribute
the New Fund Shares received by it pursuant to Section 2.1 to the Current Fund's
Shareholders in exchange for such Shareholders' Current Fund Shares. Such
distribution shall be accomplished through opening accounts, by the transfer
agent for the Trust (the "Transfer Agent"), on each New Fund's share transfer
books in the Shareholders' names and transferring New Fund Shares to such
accounts. Each Shareholder's account shall be credited with the respective pro
rata number of full and fractional (rounded to the third decimal place) New Fund
Shares of each New Fund Class due that Shareholder. All outstanding Current Fund
Shares, including those represented by certificates, shall
AP-3
simultaneously be canceled on each Current Fund's share transfer books. The
Trust shall not issue certificates representing the New Fund Shares in
connection with the Reorganization. However, certificates representing Current
Fund Shares shall represent New Fund Shares after the Reorganization.
2.3 Following receipt of the required shareholder vote and as soon
as reasonably practicable after the Closing, the status of each Current Fund as
a designated series of AAF shall be terminated.
2.4 Any transfer taxes payable on issuance of New Fund Shares in a
name other than that of the registered holder of the Current Fund Shares
exchanged therefor shall be paid by the person to whom such New Fund Shares are
to be issued, as a condition of such transfer.
2.5 Any reporting responsibility of AAF or each Current Fund to a
public authority is and shall remain its responsibility up to and including the
date on which it is terminated.
3. CLOSING.
3.1 The Closing shall occur at the principal office of AAF on
October 29, 2003, or on such other date and at such other place upon which the
parties may agree. All acts taking place at the Closing shall be deemed to take
place simultaneously as of AAF's and the Trust's close of business on the date
of the Closing or at such other time as the parties may agree (the "Effective
Time").
3.2 AAF or its fund accounting agent shall deliver to the Trust at
the Closing, a certificate of an authorized officer verifying that the
information (including adjusted basis and holding period, by lot) concerning the
Assets, including all portfolio securities, transferred by the Current Funds to
the New Funds, as reflected on the New Funds' books immediately following the
Closing, does or will conform to such information on the Current Funds' books
immediately before the Closing. AAF shall cause the custodian for each Current
Fund to deliver at the Closing a certificate of an authorized officer of the
custodian stating that (a) the Assets held by the custodian will be transferred
to each corresponding New Fund at the Effective Time and (b) all necessary taxes
in conjunction with the delivery of the Assets, including all applicable federal
and state stock transfer stamps, if any, have been paid or provision for payment
has been made.
3.3 AAF shall deliver to the Trust at the Closing a list of the
names and addresses of each Shareholder of each Current Fund and the number of
outstanding Current Fund Shares of the Current Fund Class owned by each
Shareholder, all as of the Effective Time, certified by AAF's Secretary or
Assistant Secretary. The Trust shall cause the Transfer Agent to deliver at the
Closing a certificate as to the opening on each New Fund's share transfer books
of accounts in the Shareholders' names. The Trust shall issue and deliver a
confirmation to AAF evidencing the New Fund Shares to be credited to each
corresponding Current Fund at the Effective Time or provide evidence
satisfactory to AAF that such shares have been credited to each Current Fund's
account on such books. At the Closing, each party shall deliver to the other
such bills of sale, checks, assignments, stock certificates, receipts, or other
documents as the other party or its counsel may reasonably request.
AP-4
3.4 AAF and the Trust shall deliver to the other at the Closing a
certificate executed in its name by its President or a Vice President in form
and substance satisfactory to the recipient and dated the Effective Time, to the
effect that the representations and warranties it made in this Agreement are
true and correct at the Effective Time except as they may be affected by the
transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES.
4.1 AAF represents and warrants on its own behalf and on behalf of
each Current Fund as follows:
(a) AAF is a statutory trust duly organized, validly
existing, and in good standing under the laws of the State of Delaware,
and its Certificate of Trust has been duly filed in the Office of the
Secretary of State of Delaware;
(b) AAF is duly registered as an open-end series
management investment company under the 1940 Act, and such registration
is in full force and effect;
(c) Each Current Fund is a duly established and
designated series of AAF;
(d) At the Closing, each Current Fund will have good and
marketable title to its Assets and full right, power, and authority to
sell, assign, transfer, and deliver its Assets free of any liens or
other encumbrances; and upon delivery and payment for the Assets, the
corresponding New Fund will acquire good and marketable title to the
Assets;
(e) The New Fund Shares are not being acquired for the
purpose of making any distribution thereof, other than in accordance
with the terms hereof;
(f) Each Current Fund is a "fund" as defined in Section
851(g)(2) of the Code; each Current Fund qualified for treatment as a
RIC for each taxable year since it commenced operations that has ended
(or will end) before the Closing and will continue to meet all the
requirements for such qualification for its current taxable year (and
the Assets will be invested at all times through the Effective Time in
a manner that ensures compliance with the foregoing); each Current Fund
has no earnings and profits accumulated in any taxable year in which
the provisions of Subchapter M did not apply to it; and each Current
Fund has made all distributions for each calendar year that has ended
(or will end) before the Closing that are necessary to avoid the
imposition of federal excise tax or has paid or provided for the
payment of any excise tax imposed for any such calendar year;
(g) During the five-year period ending on the date of the
Reorganization, neither AAF nor any person related to AAF (as defined
in Section 1.368-1(e)(3) of the Federal income tax regulations adopted
pursuant to the Code without regard to Section 1.368-1(e)(3)(i)(A))
will have directly or through any transaction, agreement, or
arrangement with any other person, (i) acquired shares of a Current
Fund for consideration other than shares of such Current Fund, except
for shares redeemed in the ordinary course of such Current Fund's
business as an open-end investment company as required by the 1940 Act,
or (ii) made distributions with respect to a Current Fund's
AP-5
shares, except for (a) distributions necessary to satisfy the
requirements of Sections 852 and 4982 of the Code for qualification as
a regulated investment company and avoidance of excise tax liability
and (b) additional distributions, to the extent such additional
distributions do not exceed 50 percent of the value (without giving
effect to such distributions) of the proprietary interest in such
Current Fund at the Effective Time. There is no plan or intention of
the Shareholders who individually own 5% or more of any Current Fund
Shares and, to the best of AAF's knowledge, there is no plan or
intention of the remaining Shareholders to redeem or otherwise dispose
of any New Fund Shares to be received by them in the Reorganization.
AAF does not anticipate dispositions of those shares at the time of or
soon after the Reorganization to exceed the usual rate and frequency of
redemptions of shares of the Current Fund as a series of an open-end
investment company. Consequently, AAF is not aware of any plan that
would cause the percentage of Shareholder interests, if any, that will
be disposed of as a result of or at the time of the Reorganization to
be one percent (1%) or more of the shares of the Current Fund
outstanding as of the Effective Time;
(h) The Liabilities were incurred by the Current Funds in
the ordinary course of their business and are associated with the
Assets;
(i) AAF is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code or similar case
within the meaning of Section 368(a)(3)(A) of the Code;
(j) As of the Effective Time, no Current Fund will have
outstanding any warrants, options, convertible securities, or any other
type of rights pursuant to which any person could acquire Current Fund
Shares except for the right of investors to acquire its shares at net
asset value in the normal course of its business as a series of an
open-end diversified management investment company operating under the
1940 Act;
(k) At the Effective Time, the performance of this
Agreement with respect to a particular Current Fund shall have been
duly authorized by all necessary action by that Current Fund's
shareholders;
(l) Throughout the five-year period ending on the date of
the Closing, each Current Fund will have conducted its historic
business within the meaning of Section 1.368-1(d) of the Income Tax
Regulations under the Code in a substantially unchanged manner;
(m) The fair market value of the Assets of each Current
Fund transferred to the corresponding New Fund will equal or exceed the
sum of the Liabilities assumed by the New Fund plus the amount of
Liabilities, if any, to which the transferred Assets are subject; and
(n) The total adjusted basis of the Assets of each
Current Fund transferred to the corresponding New Fund will equal or
exceed the sum of the Liabilities assumed by the New Fund plus the
amount of Liabilities, if any, to which the transferred assets are
subject.
AP-6
4.2 The Trust represents and warrants on its own behalf and on
behalf of each New Fund as follows:
(a) The Trust is a statutory trust duly organized,
validly existing, and in good standing under the laws of the State of
Delaware, and its Certificate of Trust has been duly filed in the
office of the Secretary of State of Delaware;
(b) The Trust is duly registered as an open-end
management investment company under the 1940 Act. At the Effective
Time, the New Fund Shares to be issued pursuant to Section 2.1 of this
Agreement shall be duly registered under the Securities Act of 1933 by
a Registration Statement filed with the SEC;
(c) At the Effective Time, each New Fund will be a duly
established and designated series of the Trust;
(d) No New Fund has commenced operations nor will it
commence operations until after the Closing;
(e) Prior to the Effective Time, there will be no issued
and outstanding shares in any New Fund or any other securities issued
by the Trust on behalf of any New Fund, except as provided in Section
5.2;
(f) No consideration other than New Fund Shares (and each
New Fund's assumption of the Liabilities) will be issued in exchange
for the Assets in the Reorganization;
(g) The New Fund Shares to be issued and delivered to
each corresponding Current Fund hereunder will, at the Effective Time,
have been duly authorized and, when issued and delivered as provided
herein, will be duly and validly issued and outstanding shares of the
New Fund, fully paid and nonassessable;
(h) Each New Fund will be a "fund" as defined in Section
851(g)(2) of the Code and will meet all the requirements to qualify for
treatment as a RIC for its taxable year in which the Reorganization
occurs;
(i) The Trust, on behalf of the New Funds, has no plan or
intention to issue additional New Fund Shares following the
Reorganization except for shares issued in the ordinary course of its
business as an open-end investment company; nor does the Trust, on
behalf of the New Funds, have any plan or intention to redeem or
otherwise reacquire any New Fund Shares issued pursuant to the
Reorganization, other than in the ordinary course of such business or
to the extent necessary to comply with its legal obligation under
Section 22(e) of the 1940 Act;
(j) Each New Fund will actively continue the
corresponding Current Fund's business in substantially the same manner
that the Current Fund conducted that business immediately before the
Reorganization; and no New Fund has any plan or intention to sell or
otherwise dispose of any of the Assets, except for dispositions made in
the ordinary course of its business or dispositions necessary to
maintain its qualification as a
AP-7
RIC, although in the ordinary course of its business the New Fund will
continuously review its investment portfolio (as each Current Fund did
before the Reorganization) to determine whether to retain or dispose of
particular stocks or securities, including those included in the
Assets, provided, however that this Section 4.2(j) shall not preclude
any of the combinations of funds set forth on Schedule C to this
Agreement; and
(k) There is no plan or intention for any of the New
Funds to be dissolved or merged into another corporation or statutory
trust or "fund" thereof (within the meaning of Section 851(g)(2) of the
Code) following the Reorganization, provided, however that this Section
4.2(k) shall not preclude any of the combinations of Funds set forth on
Schedule C.
4.3 Each of AAF and the Trust, on its own behalf and on behalf of
each Current Fund or each New Fund, as appropriate, represents and warrants as
follows:
(a) The fair market value of the New Fund Shares of each
New Fund received by each Shareholder will be equal to the fair market
value of the Current Fund Shares of the corresponding Current Fund
surrendered in exchange therefor;
(b) Immediately following consummation of the
Reorganization, the Shareholders will own all the New Fund Shares of
each New Fund and will own such shares solely by reason of their
ownership of the Current Fund Shares of the corresponding Current Fund
immediately before the Reorganization;
(c) The Shareholders will pay their own expenses, if any,
incurred in connection with the Reorganization;
(d) There is no intercompany indebtedness between a
Current Fund and a New Fund that was issued or acquired, or will be
settled, at a discount; and
(e) Immediately following consummation of the
Reorganization, each New Fund will hold the same assets, except for
assets distributed to shareholders in the course of its business as a
RIC and assets used to pay expenses incurred in connection with the
Reorganization, and be subject to the same liabilities that the
corresponding Current Fund held or was subject to immediately prior to
the Reorganization. Assets used to pay (i) expenses, (ii) all
redemptions (other than redemptions at the usual rate and frequency of
the Current Fund as a series of an open-end investment company), and
(iii) distributions (other than regular, normal distributions), made by
a Current Fund after the date of this Agreement will, in the aggregate,
constitute less than one percent (1%) of its net assets.
5. COVENANTS.
5.1 As soon as practicable after the date of this Agreement, AAF
shall call a meeting of the shareholders of the Current Funds (the "Shareholders
Meeting") to consider and act on this Agreement and, in connection therewith,
the sale of each Current Fund's assets and the termination of each Current Fund
as a designated series of AAF. The Board of Trustees of AAF shall recommend that
shareholders approve this Agreement and, in connection therewith, the sale
AP-8
of each Current Fund's assets and the termination of each Current Fund as a
designated series of AAF. Approval of this Agreement by the shareholders of a
Current Fund will authorize AAF, and AAF hereby agrees, to vote on the matters
referred to in Sections 5.2 and 5.3 for the corresponding New Fund.
5.2 Prior to the Closing, AAF shall acquire one New Fund Share in
each New Fund Class of each New Fund for the purpose of enabling AAF to elect
AAF's trustees as the Trust's trustees (to serve without limit in time, except
as they may resign or be removed by action of the Trust's trustees or
shareholders), to ratify the selection of the Trust's independent accountants,
and to vote on the matters referred to in Section 5.3.
5.3 Immediately prior to the Closing, the Trust (on its own behalf
and with respect to each New Fund or each New Fund Class, as appropriate) shall
enter into a Master Investment Advisory Agreement, a Master Sub-Advisory
Agreement, if applicable, a Master Administrative Services Agreement, Master
Distribution Agreements, a Custodian Agreement, and a Transfer Agency and
Servicing Agreement; shall adopt plans of distribution pursuant to Rule 12b-l of
the 1940 Act, a multiple class plan pursuant to Rule 18f-3 of the 1940 Act; and
shall enter into or adopt, as appropriate, such other agreements and plans as
are necessary for each New Fund's operation as a series of an open-end
investment company. Each such agreement and plan shall have been approved by the
Trust's trustees and, to the extent required by law, by such of those trustees
who are not "interested persons" of the Trust (as defined in the 1940 Act) and
by AAF as the sole shareholder of each New Fund.
5.4 AAF or the Trust, as appropriate, shall file with the SEC one
or more post-effective amendments to the Trust's Registration Statement on Form
N-lA under the Securities Act of 1933, as amended, and the 1940 Act, as amended
(the "Registration Statement"), which (i) will contain such amendments to such
Registration Statement as are determined by the Trust to be necessary and
appropriate to effect the Reorganization and (ii) will register the New Fund
Shares to be issued pursuant to Section 2.1 of this Agreement, and shall use its
best efforts to have such post-effective amendment or amendments to the
Registration Statement become effective prior to the Closing.
6. CONDITIONS PRECEDENT.
The obligations of AAF, on its own behalf and on behalf of each Current
Fund, and the Trust, on its own behalf and on behalf of each New Fund, will be
subject to (a) performance by the other party of all its obligations to be
performed hereunder at or before the Effective Time, (b) all representations and
warranties of the other party contained herein being true and correct in all
material respects as of the date hereof and, except as they may be affected by
the transactions contemplated hereby, as of the Effective Time, with the same
force and effect as if made on and as of the Effective Time, and (c) the further
conditions that, at or before the Effective Time:
6.1 The shareholders of that Current Fund shall have approved this
Agreement and the transactions contemplated by this Agreement in accordance with
applicable law.
6.2 All necessary filings shall have been made with the SEC and
state securities authorities, and no order or directive shall have been received
that any other or further action is required to permit the parties to carry out
the transactions contemplated hereby. All consents,
AP-9
orders, and permits of federal, state, and local regulatory authorities
(including the SEC and state securities authorities) deemed necessary by either
AAF or the Trust to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where failure
to obtain such consults, orders, and permits would not involve a risk of a
material adverse effect on the assets or properties of either a Current Fund or
a New Fund, provided that either AAF or the Trust may for itself waive any of
such conditions.
6.3 Each of AAF and the Trust shall have received an opinion from
Ballard Spahr Andrews & Ingersoll, LLP as to the federal income tax consequences
mentioned below. In rendering such opinion, such counsel may rely as to factual
matters, exclusively and without independent verification, on the
representations made in this Agreement (or in separate letters of representation
that AAF and the Trust shall use their best efforts to deliver to such counsel)
and the certificates delivered pursuant to Section 3.4. Such opinion shall be
substantially to the effect that, based on the facts and assumptions stated
therein and conditioned on consummation of the Reorganization in accordance with
this Agreement, for federal income tax purposes:
(a) The Reorganization will constitute a "reorganization"
within the meaning of section 368(a) of the Code, and each Current Fund
and each New Fund will be "a party to a reorganization" within the
meaning of section 368(b) of the Code;
(b) No gain or loss will be recognized to a Current Fund
on the transfer of its Assets to the corresponding New Fund in exchange
solely for the New Fund's New Fund Shares and the New Fund's assumption
of the Current Fund's Liabilities or on the subsequent distribution of
those New Fund Shares to its Shareholders, in constructive exchange for
their Current Fund Shares, in liquidation of the Current Fund;
(c) No gain or loss will be recognized to a New Fund on
its receipt of the corresponding Current Fund's Assets in exchange for
New Fund Shares and its assumption of the Current Fund's Liabilities;
(d) Each New Fund's basis for the corresponding Current
Fund's Assets will be the same as the basis thereof in the Current
Fund's hands immediately before the Reorganization, and the New Fund's
holding period for those Assets will include the Current Fund's holding
period therefor;
(e) A Shareholder will recognize no gain or loss on the
constructive exchange of Current Fund Shares solely for New Fund Shares
pursuant to the Reorganization; and
(f) A Shareholder's basis for the New Fund Shares of each
New Fund to be received in the Reorganization will be the same as the
basis for the Current Fund Shares of the corresponding Current Fund to
be constructively surrendered in exchange for such New Fund Shares, and
a Shareholder's holding period for such New Fund Shares will include
its holding period for such Current Fund Shares, provided that such
Current Fund Shares are held as capital assets by the Shareholder at
the Effective Time.
6.4 No stop-order suspending the effectiveness of the Registration
Statement shall have been issued, and no proceeding for that purpose shall have
been initiated or threatened by the SEC (and not withdrawn or terminated).
AP-10
At any time prior to the Closing, any of the foregoing conditions
(except those set forth in Sections 6.1 and 6.3) may be waived by the trustees
of either AAF or the Trust if, in their judgment, such waiver will not have a
material adverse effect on the interests of the Current Fund's Shareholders.
7. EXPENSES.
Except as otherwise provided in Section 4.3(c), all expenses incurred
in connection with the transactions contemplated by this Agreement (regardless
of whether they are consummated) will be borne by the parties as they mutually
agree.
8. ENTIRE AGREEMENT.
Neither party has made any representation, warranty, or covenant not
set forth herein, and this Agreement constitutes the entire agreement between
the parties.
9. AMENDMENT.
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding its approval with respect to a Current Fund by the shareholders
of that Current Fund, in such manner as may be mutually agreed upon in writing
by the parties; provided that following such approval no such amendment shall
have a material adverse effect on the shareholders' interests.
10. TERMINATION.
This Agreement may be terminated with respect to a Current Fund at any
time at or prior to the Effective Time, whether before or after approval by the
shareholders of that Current Fund:
10.1 By either AAF or the Trust (a) in the event of the other
party's material breach of any representation, warranty, or covenant contained
herein to be performed at or prior to the Effective Time, (b) if a condition to
its obligations has not been met and it reasonably appears that such condition
will not or cannot be met, or (c) if the Closing has not occurred on or before
December 31, 2003; or
10.2 By the parties' mutual agreement.
Except as otherwise provided in Section 7, in the event of termination
under Sections 10.1(c) or 10.2, there shall be no liability for damages on the
part of either AAF or the Trust or any Current Fund or corresponding New Fund,
to the other.
11. MISCELLANEOUS.
11.1 This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware; provided that, in
the case of any conflict between such laws and the federal securities laws, the
latter shall govern.
11.2 Nothing expressed or implied herein is intended or shall be
construed to confer upon or give any person, firm, trust, or corporation other
than the parties and their respective successors and assigns any rights or
remedies under or by reason of this Agreement.
AP-11
11.3 The execution and delivery of this Agreement have been
authorized by the Trust's trustees, and this Agreement has been executed and
delivered by a duly authorized officer of the Trust in his or her capacity as an
officer of the Trust intending to bind the Trust as provided herein, and no
officer, trustee or shareholder of the Trust shall be personally liable for the
liabilities or obligations of the Trust incurred hereunder. The liabilities and
obligations of the Trust pursuant to this Agreement shall be enforceable against
the assets of the New Funds only and not against the assets of the Trust
generally.
AP-12
IN WITNESS WHEREOF, each party has caused this Agreement to be executed
and delivered by its duly authorized officers as of the day and year first
written above.
Attest: AIM ADVISOR FUNDS, on behalf of each
of its series listed in Schedule A
_________________________________ By: ________________________________
Title: _____________________________
Attest: AIM INVESTMENT SECURITIES FUNDS,
on behalf of each of its series
listed in Schedule A
_________________________________ By: ________________________________
Title: _____________________________
AP-13
SCHEDULE A
SERIES OF AIM ADVISOR FUNDS CORRESPONDING SERIES OF AIM INVESTMENT
(EACH A "CURRENT FUND") SECURITIES FUNDS (EACH A "NEW FUND")
----------------------- ------------------------------------
AIM International Core Equity Fund AIM International Core Equity Fund
AIM Real Estate Fund AIM Real Estate Fund
AP-14
SCHEDULE B
CLASSES OF EACH CURRENT FUND CORRESPONDING CLASSES OF EACH NEW FUND
---------------------------- --------------------------------------
AIM International Core Equity Fund AIM International Core Equity Fund
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
Class R Shares Class R Shares
AIM Real Estate Fund AIM Real Estate Fund
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
AP-15
SCHEDULE C
PERMITTED COMBINATIONS OF FUNDS
INVESCO Advantage Fund into AIM Opportunities III Fund
INVESCO Growth Fund into AIM Large Cap Growth Fund
INVESCO Growth & Income Fund into AIM Blue Chip Fund
INVESCO European Fund into AIM European Growth Fund
AIM International Core Equity Fund into INVESCO International Blue Chip Value
Fund
AIM New Technology Fund into INVESCO Technology Fund
AIM Global Science and Technology Fund into INVESCO Technology Fund
INVESCO Telecommunications Fund into INVESCO Technology Fund
AIM Global Financial Services Fund into INVESCO Financial Services Fund
AIM Global Energy Fund into INVESCO Energy Fund
AIM Global Utilities Fund into INVESCO Utilities Fund
INVESCO Real Estate Opportunity Fund into AIM Real Estate Fund
INVESCO Tax-Free Bond Fund into AIM Municipal Bond Fund
INVESCO High Yield Fund into AIM High Yield Fund
INVESCO Select Income Fund into AIM Income Fund
INVESCO U.S. Government Securities Fund into AIM Intermediate Government Fund
INVESCO Cash Reserves Fund into AIM Money Market Fund
INVESCO Tax-Free Money Fund into AIM Tax-Exempt Cash Fund
INVESCO Balanced Fund into INVESCO Total Return Fund
INVESCO Value Equity Fund into AIM Large Cap Basic Value Fund
AIM Premier Equity Fund II into AIM Premier Equity Fund
AP-16
EXHIBIT A
SHARES OF AIM ADVISOR FUNDS
OUTSTANDING ON JULY 25, 2003
NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND (CLASS) JULY 25, 2003
-------------------- -------------
AIM International Core Equity Fund
Class A ..............................................................
Class B...............................................................
Class C...............................................................
Class R...............................................................
AIM Real Estate Fund
Class A ..............................................................
Class B...............................................................
Class C...............................................................
SHARES OF AIM SERIES TRUST
OUTSTANDING ON JULY 25, 2003
NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND (CLASS) JULY 25, 2003
-------------------- -------------
AIM Global Trends Fund
Class A...............................................................
Class B...............................................................
Class C...............................................................
A-1
EXHIBIT B
TRUSTEE COMPENSATION TABLE
Set forth below is information regarding compensation paid or accrued
for each trustee of each Trust who was not affiliated with AIM during the year
ended December 31, 2002.
AGGREGATE
COMPENSATION FROM
TRUST(1)
-----------------
AIM AIM RETIREMENT BENEFITS
ADVISOR SERIES ACCRUED BY ALL AIM ESTIMATED ANNUAL BENEFITS TOTAL COMPENSATION FROM ALL
NAME OF TRUSTEE FUNDS TRUST FUNDS(2) UPON RETIREMENT(3) AIM FUNDS(4)
--------------- ----- ----- -------- ------------------ ------------
Frank S. Bayley $1,491 $940 $142,800 $90,000 $150,000
Bruce L. Crockett 1,904 933 50,132 90,000 149,000
Owen Daly II(5) 840 -0- 40,045 75,000 -0-
Albert R. Dowden 1,904 940 57,955 90,000 150,000
Edward K. Dunn, Jr. 1,904 933 94,149 90,000 149,000
Jack M. Fields 1.897 940 29,153 90,000 153,000
Carl Frischling(6) 1,897 940 74,511 90,000 150,000
Prema Mathai-Davis 1,904 940 33,931 90,000 150,000
Lewis F. Pennock 1,953 965 54,802 90,000 154,000
Ruth H. Quigley 1,498 940 142,502 90,000 153,000
Louis S. Sklar 1,953 959 78,500 90,000 153,000
(1) Amounts shown for AIM Advisor Funds are based on the fiscal year ended
July 31, 2002. The total amount of compensation deferred by all
trustees of AIM Advisor Funds, during the fiscal year ended July 31,
2002, including earnings, was $10,027. The total amount of compensation
deferred by all trustees of AIM Series Trust during the fiscal year
ended December 31, 2002, including earnings, was $4,014.
(2) During the fiscal year ended July 31, 2002, the total amount of
expenses allocated to AIM Advisor Funds in respect of such retirement
benefits was $219. During the fiscal year ended December 31, 2002, the
total amount of expenses allocated to AIM Series Trust in respect of
such retirement benefits was $560.
(3) Amounts shown assume each trustee serves until his or her normal
retirement date.
(4) All trustees currently serve as directors or trustees of 17 registered
investment companies advised by AIM.
(5) Mr. Daly was a trustee until December 31, 2001, when he retired.
(6) During the fiscal year ended July 31, 2002, AIM Advisor Funds paid
$6,079 in legal fees to Kramer Levin Naftalis & Frankel LLP ("Kramer
Levin") for services rendered by such firm as counsel to the
independent trustees of such Trust. During the fiscal year ended
December 31, 2002, AIM Series Trust paid $2,925 in legal fees to Kramer
Levin for services rendered by such firm as counsel to the independent
trustees of such Trust. Mr. Frischling is a partner of Kramer Levin.
B-1
EXHIBIT C
OFFICERS OF TRUSTS
The following table provides information with respect to the current
officers of each Trust. Each officer is elected by each Board and serves until
his or her successor is chosen and qualified or until his or her resignation or
removal by a Board. The business address of each of the following persons is 11
Greenway Plaza, Suite 100, Houston, Texas 77046.
NAME, YEAR OF BIRTH AND POSITION(S) OFFICER
HELD WITH TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ----------------------------------- ------- ---------------------------------------------------------------
Robert H. Graham - 1946 1997* Director and Chairman, A I M Management Group Inc.
Chairman and President 1998** (financial services holding company); and Director and Vice
Chairman, AMVESCAP PLC (parent of AIM and a global investment
management firm) and Chairman, AMVESCAP PLC - AIM Division;
formerly, President and Chief Executive Officer, A I M
Management Group Inc.; Director, Chairman and President, A I M
Advisors, Inc. (registered investment advisor); Director and
Chairman, A I M Capital Management, Inc. (registered investment
advisor), A I M Distributors, Inc. (registered broker dealer),
A I M Fund Services, Inc. (registered transfer agent), and Fund
Management Company (registered broker dealer); and Chief
Executive Officer, AMVESCAP PLC - Managed Products
Mark H. Williamson - 1951 2003*** Director, President and Chief Executive Officer, A I M
Executive Vice President Management Group Inc.; Director, Chairman and President, A I
M Advisors, Inc. (registered investment advisor); Director, A I
M Distributors, Inc. (registered broker dealer); and Chief
Executive Officer of the AIM Division of AMVESCAP
PLC (2003-present); formerly, Chief Executive Officer, Managed
Products Division, AMVESCAP PLC (2001-2002); Chairman of
the Board (1998-2002), President (1998-2002) and Chief Executive
Officer (1998-2002) of INVESCO Funds Group, Inc. (registered
investment advisor) and INVESCO Distributors, Inc.
(registered broker dealer); Chief Operating Officer and Chairman
of the Board of INVESCO Global Health Sciences Fund; Chairman and
Chief Executive Officer of NationsBanc Advisors, Inc.; and
Chairman of NationsBanc Investments, Inc.
Kevin M. Carome - 1956 2003*** Director, Senior Vice President and General Counsel, A I M
Senior Vice President Management Group Inc. (financial services holding company)
and A I M Advisors, Inc.; and Vice President, A I M Capital
Management, Inc., A I M Distributors, Inc. and A I M Fund
Services; Director, Vice President and General Counsel, Fund
Management Company
* Denotes service as officer of AIM Advisor Funds.
** Denotes service as officer of AIM Series Trust.
*** Denotes service as officer of both AIM Advisor Funds and AIM Series Trust.
C-1
NAME, YEAR OF BIRTH AND POSITION(s) OFFICER
HELD WITH TRUST SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ----------------------------------- ------- ---------------------------------------------------------------
Gary T. Crum - 1947 1997* Director, Chairman and Director of Investments, A I M
Senior Vice President 1998** Capital Management, Inc.; Director and Executive Vice
President, A I M Management Group, Inc.; Director and Senior
Vice President, A I M Advisors, Inc.; and Director, A I M
Distributors, Inc. and AMVESCAP PLC; formerly Chief
Executive Officer and President, A I M Capital Management,
Inc.
Robert G. Alley - 1948 1997* Managing Director and Chief Fixed Income Officer, A I M
Vice President Capital Management, Inc. and Vice President, A I M Advisors,
Inc.
Stuart W. Coco - 1955 1997* Managing Director and Chief Research Officer - Fixed Income,
Vice President 2002** A I M Capital Management, Inc.; and Vice President, A I M
Advisors, Inc.
Melville B. Cox - 1943 1997* Vice President and Chief Compliance Officer, A I M
Vice President 1998** Advisors, Inc. and A I M Capital Management, Inc.; and Vice
President, A I M Fund Services, Inc.
Karen Dunn Kelley - 1960 1997*** Managing Director and Chief Cash Management Officer, A I M
Capital Management, Inc.; Director and President, Fund
Management Company; and Vice President, A I M Advisors, Inc.
Edgar M. Larsen - 1940 1999* Vice President, A I M Advisors, Inc.; and President, Chief
Vice President 2002** Executive Officer and Chief Investment Officer, A I M
Capital Management, Inc.
Dana R. Sutton - 1959 1997* Vice President and Fund Treasurer, A I M Advisors, Inc.
Vice President and Treasurer 1998**
Nancy L. Martin - 1957 2003*** Vice President, A I M Advisors, Inc.; and Vice President
Secretary and General Counsel, A I M Capital Management, Inc.
* Denotes service as officer of AIM Advisor Funds.
** Denotes service as officer of AIM Series Trust.
*** Denotes service as officer of both AIM Advisor Funds and AIM Series Trust.
C-2
EXHIBIT D
SECURITY OWNERSHIP OF MANAGEMENT
To the best knowledge of the Trusts, the following table sets forth
certain information regarding the ownership, as of July 25, 2003, of shares of
beneficial interest of each class of each of the Funds by the trustees,
nominees, and current executive officers of the Trusts. No information is given
as to a Fund or a class if a trustee, nominee or current executive officer held
no shares of any or all classes of such Fund as of July 25, 2003.
NUMBER OF SHARES OF THE FUNDS PERCENT OF
NAME OF TRUSTEE/NOMINEE/OFFICER FUND AND CLASS OWNED BENEFICIALLY CLASS*
------------------------------- -------------- ------------------ ------
Frank S. Bayley..........................
Bruce L. Crockett........................
Albert R. Dowden.........................
Edward K. Dunn, Jr.......................
Jack M. Fields...........................
Carl Frischling..........................
Robert H. Graham.........................
Prema Mathai-Davis.......................
Lewis F. Pennock.........................
Ruth H. Quigley..........................
Louis S. Sklar...........................
Mark H. Williamson.......................
Bob R. Baker.............................
James T. Bunch...........................
Gerald J. Lewis..........................
Larry Soll, Ph.D.........................
Kevin M. Carome..........................
Gary T. Crum.............................
Robert G. Alley..........................
Stuart W. Coco...........................
Melville B. Cox..........................
Edgar M. Larsen..........................
Karen Dunn Kelley........................
Dana R. Sutton...........................
Nancy L. Martin..........................
All trustees, nominees, and current
executive officers as a group............
D-1
* To the best knowledge of each Trust, the ownership of shares of each
series portfolio of each Trust by trustees, nominees and current
executive officers of each Trust as a group constituted less than 1% of
each class of each series portfolio of the Trusts as of July 25, 2003.
[NEED TO CONFIRM].
D-2
EXHIBIT E
OWNERSHIP OF SHARES OF THE FUNDS
SIGNIFICANT HOLDERS
Listed below is the name, address and percent ownership of each person
who, as of July 25, 2003, to the best knowledge of Trusts owned 5% or more of
any class of the outstanding shares of a Fund. A shareholder who owns
beneficially 25% or more of the outstanding securities of a Fund is presumed to
"control" the Fund as defined in the 1940 Act. Such control may affect the
voting rights of other shareholders.
NAME AND ADDRESS OF RECORD NUMBER OF SHARES OWNED OF PERCENT OF CLASS OWNED
FUND (CLASS) OWNER RECORD OF RECORD*
------------ ----- ------ ----------
- ----------------------
* The Trust have no knowledge of whether all or any portion of the shares
owned of record are also owned beneficially.
E-1
EXHIBIT F
TRUSTEE OWNERSHIP OF FUND SHARES
Set forth below is the dollar range of equity securities beneficially
owned by each trustee and nominee as of December 31, 2002 (i) in each Fund and
(ii) on an aggregate basis, in all registered investment companies overseen by
the trustee within the AIM Funds complex.
DOLLAR RANGE OF EQUITY
SECURITIES PER FUND
INTERESTED TRUSTEES
-------------------
ROBERT H. GRAHAM MARK H. WILLIAMSON
---------------- ------------------
AIM ADVISOR FUNDS
AIM Real Estate Fund None None
AIM SERIES TRUST
AIM Global Trends Fund None None
Aggregate Dollar Range of Equity Over $100,000 $10,001-$50,000
Securities in All Registered Investment
Companies Overseen By Trustee in the
AIM Funds Complex
F-1
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
INDEPENDENT TRUSTEES
--------------------
FRANK S. BRUCE L. ALBERT R. EDWARD K. JACK M.
BAYLEY CROCKETT DOWDEN DUNN, JR.(1) FIELDS(1)
------ -------- ------ ------------ ---------
AIM ADVISOR FUNDS
AIM Real Estate Fund None None None None None
AIM SERIES TRUST
AIM Global Trends Fund None None None None None
Aggregate Dollar Range of Equity $ 10,001- $ 1- $ 50,001- Over Over
Securities in All Registered Investment $ 50,000 $10,000 $ 100,000 $ 100,000 $100,000
Companies Overseen By Trustee in the
AIM Funds Complex
INDEPENDENT TRUSTEES
--------------------
PREMA
CARL MATHAI- LEWIS F. RUTH H. LOUIS S.
FRISCHLING(1) DAVIS(1) PENNOCK QUIGLEY SKLAR(1)
------------- -------- ------- ------- --------
AIM ADVISOR FUNDS
AIM Real Estate Fund None None None None None
AIM SERIES TRUST
AIM Global Trends Fund None None None None None
Aggregate Dollar Range of Equity Over Over $ 50,001- $ 1- Over
Securities in All Registered Investment $100,000 $100,000 $100,000 $10,000 $100,000
Companies Overseen By Trustee in the
AIM Funds Complex
- -----------------------
(1) Amounts shown include the total amount of compensation deferred by
the trustee at his or her election pursuant to a deferred compensation plan.
Such deferred compensation is placed in a deferral account and deemed to be
invested in one or more of the AIM Funds.
F-2
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
INDEPENDENT NOMINEES
--------------------
BOB R. JAMES T. GERALD J. LARRY SOLL,
BAKER BUNCH LEWIS PH.D.
----- ----- ----- -----
AIM ADVISOR FUNDS
AIM Real Estate Fund None None None None
AIM SERIES TRUST
AIM Global Trends Fund None None None None
Aggregate Dollar Range of Equity None None None None
Securities in All Registered Investment
Companies Overseen By Trustee in the
AIM Funds Complex
F-3
EVERY SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
<Table>
<Caption>
VOTING BY TELEPHONE VOTING BY INTERNET VOTING BY MAIL
Follow these six easy steps: Follow these three easy steps:
Follow these four easy steps: 1. Read the accompanying Proxy 1. Read the accompanying Proxy
1. Read the accompanying Proxy Statement and Proxy Card. Statement and Proxy Card.
Statement and Proxy Card. 2. Go to the Web site 2. Please mark, sign and date
2. Call the toll-free number www.aiminvestments.com. your Proxy Card.
1-888-221-0697. 3. Click on the My Account tab. 3. Return the Proxy Card in the
3. Enter your Control Number listed 4. Click on the 2003 Proxy Information postage-paid envelope provided or
on the Proxy Card. link. return it to Proxy Tabulator, P.O.
4. Follow the recorded instructions. 5. Follow the instructions provided. Box 9123, Hingham, MA 02043-9723.
6. Enter your Control Number listed on
the Proxy Card.
</Table>
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET.
--------------------------------------------------
CONTROL NUMBER FOR TELEPHONE OR INTERNET VOTING.
EACH PROXY CARD HAS ITS OWN CONTROL NUMBER.
****CONTROL NUMBER: 999 999 999 999 99****
--------------------------------------------------
o Please fold and detach card at perforation before mailing. o
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF TRUSTEES (THE "BOARD")
OF
AIM REAL ESTATE FUND
(A PORTFOLIO OF AIM ADVISOR FUNDS)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD OCTOBER 21, 2003
The undersigned hereby appoints Robert H. Graham and Mark H. Williamson, 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 on October 21, 2003, 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"
EACH NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSAL.
o PROXY MUST BE SIGNED AND DATED BELOW.
Dated ____________________ 2003
-------------------------------------------
-------------------------------------------
Signature(s) (if held jointly)
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, please sign
in the partnership name.
o Please fold and detach card at perforation before mailing. o
o PLEASE FILL IN BOX AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. o
PLEASE DO NOT USE FINE POINT PENS.
PLEASE MARK
X VOTE AS IN
THIS EXAMPLE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" EACH PROPOSAL.
<Table>
1. To elect sixteen individuals to the Board of AIM Advisor Funds, each of whom WITHHOLD
will serve until his or her successor is elected and qualified: FOR AUTHORITY FOR ALL
ALL FOR ALL NOMINEES EXCEPT
01 Bob R. Baker 05 Albert R. Dowden 09 Robert H. Graham 13 Ruth H. Quigley
02 Frank S. Bayley 06 Edward K. Dunn, Jr. 10 Gerald J. Lewis 14 Louis S. Sklar [ ] [ ] [ ]
03 James T. Bunch 07 Jack M. Fields 11 Prema Mathai-Davis 15 Larry Soll, Ph.D.
04 Bruce L. Crockett 08 Carl Frischling 12 Lewis F. Pennock 16 Mark H. Williamson
- --------------------------------------------------------------------------------
TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "FOR ALL EXCEPT" BOX
AND WRITE THE NOMINEE'S NUMBER ON THE LINE PROVIDED.
FOR AGAINST ABSTAIN
2. Approve an Agreement and Plan of Reorganization which provides for the [ ] [ ] [ ]
restructuring of AIM Real Estate Fund and AIM Advisor Funds' other series
portfolio, AIM International Core Equity Fund, as new series portfolios of
AIM Investment Securities Funds, an existing open-end management investment
company organized as a Delaware statutory trust and, in connection
therewith, the sale of all of AIM Real Estate Fund's assets and the
termination of AIM Real Estate Fund as a designated series of AIM Advisor
Funds.
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
</Table>
EVERY SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE YOUR PROXY TODAY!
<Table>
<Caption>
VOTING BY TELEPHONE VOTING BY INTERNET VOTING BY MAIL
Follow these six easy steps: Follow these three easy steps:
Follow these four easy steps: 1. Read the accompanying Proxy 1. Read the accompanying Proxy
1. Read the accompanying Proxy Statement and Proxy Card. Statement and Proxy Card.
Statement and Proxy Card. 2. Go to the Web site 2. Please mark, sign and date
2. Call the toll-free number www.aiminvestments.com. your Proxy Card.
1-888-221-0697. 3. Click on the My Account tab. 3. Return the Proxy Card in the
3. Enter your Control Number listed 4. Click on the 2003 Proxy Information postage-paid envelope provided or
on the Proxy Card. link. return it to Proxy Tabulator, P.O.
4. Follow the recorded instructions. 5. Follow the instructions provided. Box 9123, Hingham, MA 02043-9723.
6. Enter your Control Number listed on
the Proxy Card.
</Table>
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET.
--------------------------------------------------
CONTROL NUMBER FOR TELEPHONE OR INTERNET VOTING.
EACH PROXY CARD HAS ITS OWN CONTROL NUMBER.
****CONTROL NUMBER: 999 999 999 999 99****
--------------------------------------------------
-- Please fold and detach card at perforation before mailing. --
PROXY CARD PROXY CARD
PROXY SOLICITED BY THE BOARD OF TRUSTEES (THE "BOARD")
OF
AIM GLOBAL TRENDS FUND
(A PORTFOLIO OF AIM SERIES TRUST)
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD OCTOBER 21, 2003
The undersigned hereby appoints Robert H. Graham and Mark H. Williamson, 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 on October 21, 2003, 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"
EACH NOMINEE AND "FOR" THE APPROVAL OF THE PROPOSAL.
-- PROXY MUST BE SIGNED AND DATED BELOW.
Dated ____________________ 2003
-------------------------------------------
-------------------------------------------
Signature(s) (if held jointly)
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, please sign
in the partnership name.
o Please fold and detach card at perforation before mailing. o
-- PLEASE FILL IN BOX AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. --
PLEASE DO NOT USE FINE POINT PENS.
PLEASE MARK
[X] VOTE AS IN
THIS EXAMPLE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD. THE BOARD RECOMMENDS VOTING
"FOR" EACH PROPOSAL.
<Table>
1. To elect sixteen individuals to the Board of AIM Series Trust, each of whom WITHHOLD
will serve until his or her successor is elected and qualified: FOR AUTHORITY FOR ALL
ALL FOR ALL NOMINEES EXCEPT
01 Bob R. Baker 05 Albert R. Dowden 09 Robert H. Graham 13 Ruth H. Quigley
02 Frank S. Bayley 06 Edward K. Dunn, Jr. 10 Gerald J. Lewis 14 Louis S. Sklar [ ] [ ] [ ]
03 James T. Bunch 07 Jack M. Fields 11 Prema Mathai-Davis 15 Larry Soll, Ph.D.
04 Bruce L. Crockett 08 Carl Frischling 12 Lewis F. Pennock 16 Mark H. Williamson
TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "FOR ALL EXCEPT" BOX
AND WRITE THE NOMINEE'S NUMBER ON THE LINE PROVIDED.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve an Agreement and Plan of Reorganization which provides for the
restructuring of AIM Global Trends Fund as a new series portfolio of AIM [ ] [ ] [ ]
Growth Series, an existing open-end management investment company organized
as a Delaware statutory trust and, in connection therewith, the sale of all
of AIM Global Trends Fund's assets and the termination AIM Global Trends
Fund as a designated series of AIM Series Trust.
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
</Table>