SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
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[X] Preliminary Proxy Statement [ ] Confidential, for use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SHORT-TERM INVESTMENTS CO.
TAX-FREE INVESTMENTS CO.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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and 0-11
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Rule 0-11(a)(2) and identify the filing for which the offsetting fee
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previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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SHORT-TERM INVESTMENTS CO. TAX-FREE INVESTMENTS CO.
CASH ASSETS PORTFOLIO CASH RESERVE PORTFOLIO
LIQUID ASSETS PORTFOLIO
PRIME PORTFOLIO
August 25, 2002
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 Distributers, 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 directors
of your Board of Directors 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 directors.
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 all INVESCO Funds and AIM Funds organized as
Maryland corporations change their form and state of organization to Delaware
statutory trusts. Your Board has approved redomesticating your Fund as a series
of an existing Delaware statutory trust. The attached proxy statement seeks your
approval of this redomestication.
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. 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
SHORT-TERM INVESTMENTS CO.
CASH ASSETS PORTFOLIO
LIQUID ASSETS PORTFOLIO
PRIME PORTFOLIO
TAX-FREE INVESTMENTS CO.
CASH RESERVE PORTFOLIO
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 Short-Term
Investments Co. and Tax-Free Investments Co. (each, a "Company," and together,
the "Companies") listed above:
We cordially invite you to attend our Special Meetings of Shareholders
to:
1. Elect 16 directors to the Board of Directors of each Company,
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 redomestication of each series portfolio of Short-Term Investments Co.
as new series portfolios of Short-Term Investments Trust, an existing Delaware
statutory trust and, in connection therewith, the sale of all of Short-Term
Investments Co.'s assets and the dissolution of Short-Term Investments Co. as a
Maryland corporation.
3. Approve an Agreement and Plan of Reorganization which provides
for the redomestication of Tax-Free Investments Co. as a Delaware statutory
trust and, in connection therewith, the sale of all of Tax-Free Investments
Co.'s assets and the dissolution of Tax-Free Investments Co. as a Maryland
corporation.
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
DIRECTORS OF EACH COMPANY. 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 COMPANY'S SECRETARY OR BY VOTING IN
PERSON AT THE SPECIAL MEETINGS.
/s/ Nancy L. Martin
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Secretary
August 25, 2003
SHORT-TERM INVESTMENTS CO.
CASH ASSETS PORTFOLIO
LIQUID ASSETS PORTFOLIO
PRIME PORTFOLIO
TAX-FREE INVESTMENTS CO.
CASH RESERVE PORTFOLIO
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 directors 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 Short-Term Investments Co. and Tax-Free
Investments Co. (each a "Company," and together, the "Companies") listed above
(each a "Fund," and together, the "Funds") because the Boards of Directors of
the Companies (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.
The Companies intend to mail this Proxy Statement, the enclosed Notice
of Special Meetings of Shareholders and the enclosed proxy card on or about
August 25, 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, Texas 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 directors All Funds
2. Approving an Agreement and Plan of Cash Assets Portfolio
Reorganization to redomesticate each series Liquid Assets Portfolio
portfolio of Short-Term Investments Co. as Prime Portfolio
a new series portfolio of an existing
Delaware statutory trust
3. Approving an Agreement and Plan of Cash Reserve Portfolio
Reorganization to redomesticate Tax-Free
Investments Co. as a 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 Company 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 Company as follows and in accordance with
management's recommendation on other matters:
- FOR the election of all 16 nominees for directors of your
Company.
- FOR the proposal to approve an Agreement and Plan of
Reorganization (the "STIC Plan") to redomesticate each series
portfolio of Short-Term Investments Co. as a new series
portfolio of an existing Delaware statutory trust.
- FOR the proposal to approve an Agreement and Plan of
Reorganization (the "TFIC Plan") to redomesticate Tax-Free
Investments Co. as a Delaware statutory trust.
3
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 Company's Secretary in writing to the address of such Company set
forth on the cover page of this Proxy Statement before the Special Meetings 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.
QUORUM REQUIREMENT AND ADJOURNMENT
A quorum of shareholders is necessary to hold a valid meeting. A quorum
will exist for Proposals 1, 2 and 3 for a particular Company if shareholders
entitled to vote one-third of the issued and outstanding shares of such Company
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 Company is necessary to elect directors of that Company at a
Special Meeting, meaning that the director nominee with the most affirmative
votes for a particular slot is elected for that slot. In an uncontested election
for directors, 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 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 requires the affirmative vote of a
majority of the issued and outstanding shares of Short-Term Investments Co. at
its Special Meeting.
4
Abstentions and broker non-votes are counted as present but are not considered
votes cast at the Special Meeting. As a result, they have the same effect as a
vote against the STIC Plan because approval of the STIC Plan requires the
affirmative vote of a percentage of the outstanding voting securities.
PROPOSAL 3. Approval of Proposal 3 requires the affirmative vote of a
majority of the issued and outstanding shares of Tax-Free Investments Co. at its
Special Meeting. Abstentions and broker non-votes are counted as present but are
not considered votes cast at the Special Meeting. As a result, they have the
same effect as a vote against the TFIC Plan because approval of the TFIC Plan
requires the affirmative vote of a percentage of the outstanding voting
securities.
PROXY SOLICITATION
The Companies 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
$11,049. The Companies expect to solicit proxies principally by mail, but the
Companies or Solicitor may also solicit proxies by telephone, facsimile or
personal interview. The Companies' 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
Company 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
Company 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 director, 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 DIRECTORS
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 Boards 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 DIRECTORS
Each Board currently consists of 12 persons. Ten of the current
directors are "independent," meaning they are not "interested persons" of the
Companies within the meaning of the 1940 Act. Two of the current directors are
"interested persons" because of their business and financial relationships with
the Companies and AIM, each Company's investment advisor, and/or AIM's parent,
AMVESCAP.
NOMINEES FOR DIRECTORS
Each Company's Committee on Directors/Trustees (which consists solely
of independent directors) has approved the nomination of each of the 12 current
directors, as set forth below, to serve as director until his or her successor
is elected and qualified. In addition, each Company's Committee on
Directors/Trustees has approved the nomination of four new nominees, as set
forth below, to serve as director until his or her successor is elected and
qualified. These four new nominees were nominated to effect 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 director serves as a director or trustee
of the 17 registered investment companies comprising the AIM Funds. Each nominee
who is a current director oversees 86 portfolios that comprise the AIM Funds.
The business address of each nominee who is a current director 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 DIRECTORS
DIRECTOR PRINCIPAL OCCUPATION(S) DURING
NAME AND YEAR OF BIRTH SINCE PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
- -------------------------- -------- -------------------------------- ---------------------------------------------
Frank S. Bayley - 1939 2001(1) Of Counsel, law firm of Baker & Badgley Funds, Inc.
McKenzie (registered investment company)
Bruce L. Crockett - 1944 1993(2) Chairman, Crockett Technology ACE Limited (insurance company); Captaris,
1992(3) Associates (technology Inc. (unified messaging provider)
consulting company) and
Captaris, Inc. (unified
messaging provider)
Albert R. Dowden - 1941 2000(1) Director of a number of public Cortland Trust, Inc.
and private business (Chairman) (registered investment company);
corporations, including the Boss Annuity and Life Re (Holdings), Ltd.
Group, Ltd. (private investment (insurance company)
and management) and Magellan
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
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
First Century Group, Inc.
(government affairs company) and
Texana Timber LP
Carl Frischling - 1937 1993(2) Partner, law firm of Kramer Cortland Trust, Inc.
1992(3) Levin Naftalis & Frankel LLP (registered investment company)
Prema Mathai-Davis - 1950 1998(1) Formerly, Chief Executive None
Officer, YWCA of the USA
Lewis F. Pennock - 1942 1993(2) Partner, law firm of Pennock & None
1992(3) Cooper
Ruth H. Quigley - 1935 2001(1) Retired None
Louis S. Sklar - 1939 1993(2) Executive Vice President, None
1992(3) Development and Operations,
Hines Interests Limited
Partnership (real estate
development company)
(1) Denotes service as director of both Short-Term Investments Co. and
Tax-Free Investments Co.
7
(2) Denotes service as director of Short-Term Investments Co.
(3) Denotes service as director of Tax-Free Investments Co.
NOMINEES WHO CURRENTLY ARE INTERESTED PERSONS
NAME, YEAR OF BIRTH AND DIRECTOR PRINCIPAL OCCUPATION(S) DURING
POSITION(S) HELD WITH THE COMPANIES SINCE PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
- ----------------------------------- -------- -------------------------------- --------------------------
Robert H. Graham(1) - 1946 1994(2) Director and Chairman, A I M None
Chairman and President 1977(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 Companies because
he is a director of AMVESCAP PLC, parent of the advisor to, and
principal underwriter of, the Companies.
(2) Denotes service as director of Short-Term Investments Co.
(3) Denotes service as director of Tax-Free Investments Co.
8
NAME, YEAR OF BIRTH AND DIRECTOR PRINCIPAL OCCUPATION(S) DURING
POSITION(S) HELD WITH THE COMPANIES SINCE PAST 5 YEARS OTHER DIRECTORSHIP(S) HELD
- ----------------------------------- -------- -------------------------------- ---------------------------
Mark H. Williamson(1) - 1951 2003(2) 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.
(1) Mr. Williamson is considered an interested person of the Companies
because he is an officer and a director of the advisor to, and a
director of the principal underwriter of, the Companies.
(2) Denotes service as director of both Short-Term Investments Co. and
Tax-Free Investments Co.
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NEW NOMINEES WHO WILL BE INDEPENDENT DIRECTORS
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 incorporation
Executive Officer (1982-1989 and in 1982) and Isis Pharmaceuticals,
1993-1994) and President 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 directors of each Board,
unanimously recommends that you vote "FOR" these 16 nominees.
COMMITTEES OF THE BOARDS
Each Board has five standing committees: an Audit Committee, an
Investments Committee, a Valuation Committee, a Capitalization 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 directors.
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.
CAPITALIZATION COMMITTEE
The current members of each Capitalization Committee are Messrs.
Bayley, Graham (Chairman) and Pennock. Each Capitalization Committee is
responsible for: (i) increasing or decreasing the aggregate number of shares of
any class of the applicable Company's stock by classifying and reclassifying
such Company's authorized but unissued shares of common stock, up to such
Company's authorized capital; (ii) fixing the terms of such classified or
reclassified shares of common stock, and (iii) issuing such classified or
reclassified shares of common stock upon the terms set forth in the applicable
Fund's prospectus, up to such Company's authorized capital.
COMMITTEE ON DIRECTORS/TRUSTEES
Each Committee on Directors/Trustees is comprised entirely of
independent directors. 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 Company 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 directors; (ii) nominating persons who are not
interested persons of a Company 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
11
time the compensation payable to the independent directors 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 directors 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 Company.
Each Committee on Directors/Trustees will consider nominees recommended
by a shareholder to serve as directors, 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 directors 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.
Notice procedures set forth in each Company's bylaws require that any
shareholder of a Fund desiring to nominate a director for election at a
shareholder meeting must submit to the applicable Company'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 director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors 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 director 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 Company's books, and of such beneficial owner; and (b) the number
of shares of each series portfolio of a Company which are owned of record or
beneficially by such shareholder and such beneficial owner.
INVESTMENTS COMMITTEE
The current members of each Company'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
12
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.
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 Company's
most recently completed fiscal year. All of the current directors then serving
attended at least 75% of the meetings of each Board or applicable committee held
during the most recent fiscal year.
COMMITTEE ON
AUDIT CAPITALIZATION DIRECTORS/ INVESTMENTS VALUATION
BOARD COMMITTEE COMMITTEE TRUSTEES COMMITTEE COMMITTEE
SHORT-TERM INVESTMENTS CO.(1) eleven six one five four one
TAX-FREE INVESTMENTS CO.(2) eight seven none five four one
(1) Information disclosed is for the fiscal year ended August 31, 2002.
(2) Information disclosed is for the fiscal year ended March 31, 2003.
DIRECTOR'S COMPENSATION
Each director who is not affiliated with AIM is compensated for his or
her services according to a fee schedule which recognizes the fact that such
director also serves as a director or trustee of other AIM Funds. Each such
director 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 director of
the Companies who was not affiliated with AIM during the year ended December 31,
2002 is found in Exhibit B.
RETIREMENT PLAN FOR DIRECTORS
The directors have adopted a retirement plan for the directors of the
Companies who are not affiliated with AIM. The retirement plan includes a
retirement policy as well as retirement benefits for the non-AIM-affiliated
directors.
The retirement policy permits each non-AIM-affiliated directors to
serve until December 31 of the year in which the director turns 72. A majority
of the directors may extend from time to time the retirement date of a director.
Annual retirement benefits are available to each non-AIM-affiliated
director of the Companies and/or the other AIM Funds (each, a "Covered Fund")
who has at least five years of credited service as a director (including service
to a predecessor fund) for a Covered Fund. The retirement benefits will equal
75% of the director's annual retainer paid or accrued by any Covered Fund to
such director during the twelve-month period prior to retirement, including the
13
amount of any retainer deferred under a separate deferred compensation agreement
between the Covered Fund and the director. 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 director'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 director's retirement benefits for
the same length of time that the director would have received the benefits based
on his or her service. A director 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 Companies.
DEFERRED COMPENSATION AGREEMENTS
Messrs. Dunn, Fields, Frischling and Sklar and Dr. Mathai-Davis (the
"Deferring Directors") have each executed a Deferred Compensation Agreement
(collectively, the "Compensation Agreements"). Pursuant to the Compensation
Agreements, the Deferring Directors have the option to elect to defer receipt of
up to 100% of their compensation payable by the Companies, and such amounts are
placed into a deferral account. Currently, the Deferring Directors 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
Directors' 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 Director'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 Director's termination of service as a director of a Company. If a
Deferring Director 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 Directors have the status of unsecured creditors of the Companies and
of each other AIM Fund from which they are deferring compensation.
PROPOSAL 2 -
APPROVAL OF THE STIC PLAN TO REDOMESTICATE EACH SERIES
PORTFOLIO OF SHORT-TERM INVESTMENTS CO.
AS NEW SERIES PORTFOLIOS OF SHORT-TERM INVESTMENTS TRUST
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 2?
Proposal 2 applies only to the shareholders of Cash Assets Portfolio,
Liquid Assets Portfolio and Prime Portfolio.
BACKGROUND
Short-Term Investments Co. ("STIC") currently is organized as a
Maryland corporation. AMVESCAP has identified each series portfolio of STIC as
appropriate to be redomesticated as new series portfolios of Short-Term
Investments Trust ("STIT"), an existing open-end
14
management investment company organized as a statutory trust under the Delaware
Statutory Trust Act.
STIC's Board of Directors (the "STIC Board") has approved the STIC
Plan, which provides for a series of transactions to convert each of Cash Assets
Portfolio, Liquid Assets Portfolio and Prime Portfolio (each, a "Current Fund")
to a corresponding series (a "New Fund") of STIT. Under the STIC 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 "STIC Redomestication"). A form of the STIC Plan relating to the proposed
STIC Redomestication is set forth in Appendix I. If Proposal 2 is not approved
by the STIC shareholders, STIC will continue to operate as a Maryland
corporation.
Approval of the STIC Plan requires the affirmative vote of a majority
of the issued and outstanding shares of STIC.
The STIC Redomestication is being proposed primarily to provide STIC
with greater flexibility in conducting its business operations. The operations
of each New Fund following the STIC Redomestication will be substantially
similar to those of its predecessor Current Fund. As described below, STIT's
Amended and Restated Agreement and Declaration of Trust, as amended (the "STIT
Declaration") differs from STIC's Articles of Incorporation, and the amendments
and supplements thereto (the "STIC Articles of Incorporation") in certain
respects that are expected to improve STIC's and each Current Fund's operations.
REASONS FOR THE PROPOSED STIC REDOMESTICATION
The STIC Redomestication is being proposed because, as noted above, AIM
and the STIC Board believe that the Delaware statutory trust organizational form
offers a number of advantages over the Maryland corporate organizational form.
As a result of these advantages, the Delaware statutory trust organizational
form has been increasingly used by mutual funds, including the majority of the
AIM Funds. STIT, like STIC, will operate as an open-end management investment
company registered with the Securities and Exchange Commission (the "SEC") under
the 1940 Act.
The Delaware statutory trust organizational form offers greater
flexibility than the Maryland corporate form. A Maryland corporation is governed
by the detailed requirements imposed by Maryland corporate law and by the terms
of its articles of incorporation. A Delaware statutory trust is subject to fewer
statutory requirements. STIT is governed primarily by the terms of the STIT
Declaration. In particular, STIT has greater flexibility to conduct business
without the necessity of engaging in expensive proxy solicitations to
shareholders. For example, under Maryland corporate law, amendments to the STIC
Articles of Incorporation would typically require shareholder approval. Under
Delaware law, unless the Declaration of Trust of a Delaware statutory trust
provides otherwise, amendments to it may be made without first obtaining
shareholder approval. In addition, unlike Maryland corporate law, which
restricts the delegation of a board of directors' functions, Delaware law
permits the board of trustees of a Delaware statutory trust to delegate certain
of its responsibilities. For example, the board of trustees of a Delaware
statutory trust may delegate the responsibility of declaring dividends to duly
empowered committees of the board or to appropriate officers. Finally, Delaware
law permits the trustees to adapt a Delaware statutory trust to future
contingencies. For example, the
15
trustees may, without a shareholder vote, change a Delaware statutory trust's
domicile or organizational form. In contrast, under Maryland corporate law, a
company's board of directors would be required to obtain shareholder approval
prior to changing domicile or organizational form.
The STIC Redomestication will also have certain other effects on STIC,
its shareholders and management, which are described below under the heading
"STIT Compared to STIC."
WHAT THE PROPOSED STIC REDOMESTICATION WILL INVOLVE
To accomplish the STIC Redomestication, each New Fund has been
established as a series of STIT. 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 shares of the New
Fund equal to the number of full and fractional shares of common stock 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 STIC
Redomestication, 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 STIC Redomestication, each
Current Fund will be terminated and STIC will be dissolved as a Maryland
corporation.
The obligations of STIC and STIT under the STIC Plan are subject to
various conditions stated therein. To provide against unforeseen events, the
STIC Plan may be terminated or amended at any time prior to the closing of the
STIC Redomestication by action of the STIC Board, notwithstanding the approval
of the STIC Plan by the shareholders of any Current Fund. However, no amendments
may be made that would materially adversely affect the interests of shareholders
of any Current Fund. STIC and STIT may at any time waive compliance with any
condition contained in the STIC Plan, provided that the waiver does not
materially adversely affect the interests of shareholders of any Current Fund.
The STIC Plan authorizes STIC to acquire one share of each class of
each New Fund and, as the sole shareholder of each New Fund prior to the STIC
Redomestication, to do each of the following:
- Approve with respect to each New Fund a new investment
advisory agreement with AIM that will be substantially
identical to STIC's current investment advisory agreement with
AIM.
- Approve with respect to each New Fund a new administrative
services agreement with AIM that will be substantially
identical to each Current Fund'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.
16
- 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 Tait, Weller & Baker, 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.
STIT'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 STIC's transfer agent for each shareholder of the Current Funds. Shares held
in the Current Fund accounts will automatically be designated as shares of the
New Funds. Certificates for Current Fund shares issued before the STIC
Redomestication will represent shares of the corresponding New Fund after the
Redomestication. Shareholders of the New Funds will not have the right to demand
or require STIT 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 STIC
Redomestication.
Assuming your approval of Proposal 2, STIC currently contemplates that
the STIC Redomestication will be consummated on November 4, 2003.
THE FEDERAL INCOME TAX CONSEQUENCES OF THE STIC REDOMESTICATION
STIC and STIT will receive an opinion of Ballard Spahr Andrews &
Ingersoll, LLP to the effect that the STIC Redomestication 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 STIC Redomestication. Shareholders of the
Current Funds should consult their tax advisers regarding the effect, if any, of
the STIC Redomestication in light of their individual circumstances and as to
state and local consequences, if any, of the STIC Redomestication.
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 STIC
Redomestication.
17
STIT COMPARED TO STIC
Structure of STIT
STIT 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. STIT has established new series portfolios
corresponding to and having identical designations as the series portfolios of
STIC except that the new series portfolio corresponding to the Prime Portfolio
of STIC will be designated "STIC Prime." STIT 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. STIT's
fiscal year is the same as that of STIC. No New Fund will have any operations
prior to the STIC Redomestication. Initially, STIC will be the sole shareholder
of each New Fund.
As a Delaware statutory trust, STIT's operations are governed by the
STIT Declaration, STIT's Amended and Restated Bylaws (the "STIT Bylaws") and
applicable Delaware law rather than by the STIC Articles of Incorporation and
STIC's Amended and Restated Bylaws (the "STIC Bylaws") and applicable Maryland
law. Certain differences between the two domiciles and organizational forms are
summarized below. The operations of STIT will continue to be subject to the
provisions of the 1940 Act and the rules and regulations thereunder.
Trustees and Officers of STIT
Subject to the provisions of the STIT Declaration, the business of STIT
is 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 STIT are substantially the same as those of the directors of
STIC.
All of the current officers of STIC currently serve as officers of STIT
and those current officers of STIC will perform the same functions on behalf of
the New Funds and STIT following the STIC Restructuring that they now perform on
behalf of the Current Funds and STIC.
Shares of STIT
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 STIT to issue share certificates. The trustees have
the power under the STIT Declaration to establish new series and classes of
shares; STIC's directors currently have a similar right. The STIT Declaration
permits the trustees to issue an unlimited number of shares of each class and
series. STIC is authorized to issue only the number of shares specified in the
STIC Articles of Incorporation and may issue additional shares only with STIC
Board approval and after payment of a fee to the State of Maryland on any
additional shares authorized.
Your Fund currently has the classes of shares set forth in Exhibit A.
STIT 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.
18
Liability of Shareholders
Shareholders of a Maryland corporation generally do not have personal
liability for the corporation's obligations, except that a shareholder may be
liable to the extent that he or she receives any distribution which exceeds the
amount which he or she could properly receive under Maryland law or where such
liability is necessary to prevent fraud.
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 STIT Declaration provides that shareholders of
STIT shall not be subject to any personal liability for acts or obligations of
STIT and that every written agreement, obligation or other undertaking made or
issued by STIT shall contain a provision to the effect that shareholders are not
personally liable thereunder. In addition, the STIT Declaration provides for
indemnification out of STIT's property 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
STIT 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 STIT, the possibility of STIT being unable to meet
its obligations is considered remote, and even if a claim were brought against
STIT and a court determined that shareholders were personally liable, it would
likely not impose a material obligation on a shareholder.
Election of Directors/Trustees; Terms
The shareholders of STIC have elected a majority of the directors of
STIC. Each director serves until a successor is elected, subject to his or her
earlier death, resignation or removal in the manner provided by law (see below).
In the case of a vacancy on the STIC Board (other than a vacancy created by
removal by the shareholders), a majority of the directors may appoint a
successor to fill such vacancy. The right of the STIC Board to appoint directors
to fill vacancies without shareholder approval is subject to the provisions of
the 1940 Act.
The current shareholders of STIT have elected the trustees of STIT.
Such trustees serve for the life of STIT, subject to his or her earlier death,
incapacitation, resignation, retirement or removal (see below). In the case of
any vacancy on the Board of Trustees of STIT (the "STIT Board"), a majority of
the trustees may appoint a successor to fill such vacancy. The right of the STIT
Board to appoint trustees to fill vacancies without shareholder approval is
subject to the provisions of the 1940 Act.
Removal of Directors/Trustees
A director of STIC may be removed by the affirmative vote of a majority
of the STIC Board, a committee of the STIC Board appointed for such purpose, or
the holders of a majority of the outstanding shares of STIC.
A trustee of STIT 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 STIT.
19
Meetings of Shareholders
STIC is not required to hold annual meetings of shareholders and does
not intend to do so unless required by the 1940 Act. The STIC Bylaws provide
that a special meeting of shareholders may be called by the president or, in his
or her absence, the vice-president or by a majority of the STIC Board or holders
of shares entitled to cast at least 10% of the votes entitled to be cast at the
special meeting. Requests for special meetings must, among other things, state
the purpose of such meeting and the matters to be voted upon. No special meeting
needs to be called to consider any matter previously voted upon at a special
meeting called by the shareholders during the preceding twelve months, unless
requested by a majority of all shares entitled to vote at such meeting.
STIT is not required to hold annual meetings of shareholders unless
required by the 1940 Act and does not intend to do so. The STIT Bylaws 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 STIT. 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 Directors/Trustees and Officers; Indemnification
Maryland law permits a corporation to eliminate liability of its
directors and officers to the corporation or its stockholders, except for
liability arising from receipt of an improper benefit or profit and from active
and deliberate dishonesty. The STIC Articles of Incorporation eliminate director
and officer liability to the fullest extent permitted under Maryland law. Under
Maryland law, indemnification of a corporation's directors and officers is
mandatory if a director or officer has been successful on the merits or
otherwise in the defense of certain proceedings. Maryland law permits
indemnification for other matters unless it is established that the act or
omission giving rise to the proceeding was committed in bad faith, a result of
active and deliberate dishonesty, or one in which a director or officer actually
received an improper benefit.
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 STIT
Declaration, the trustees and officers of STIT 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 STIT Declaration provides for the indemnification of its 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 STIT, 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.
20
Dissolution and Termination
Maryland law provides that STIC may be dissolved by the vote of a
majority of the STIC Board and two-thirds of the shares entitled to vote on the
dissolution; however the STIC Articles of Incorporation reduce the required
shareholder vote from two-thirds to a majority of the shares entitled to vote on
the dissolution.
Pursuant to the STIT Declaration, STIT or any series or class of shares
of beneficial interest in STIT may be terminated by: (1) a majority shareholder
vote of STIT or the affected series or class, respectively; or (2) if there are
fewer than 100 shareholders of record of STIT or of such terminating series or
class, the trustees pursuant to written notice to the shares of STIT or the
affected series or class.
Voting Rights of Shareholders
Shareholders of a Maryland corporation such as STIC are entitled to
vote on, among other things, those matters which effect fundamental changes in
the corporate structure (such as a merger, consolidation or sale of
substantially all of the assets of the corporation) as provided by Maryland law.
The STIT Declaration grants 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 STIT 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 STIT or one of its investment
portfolios; (v) merger or consolidation of STIT or any of its investment
portfolios, with certain exceptions; (vi) approval of any amendments to
shareholders' voting rights under the STIT Declaration; 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
Under Maryland law, shareholders may not demand the fair value of their
shares from the successor company in a transaction involving the transfer of the
corporation's assets and are, therefore, bound by the terms of the transaction
if the stock is that of an open-end investment company registered with the SEC
under the 1940 Act and the value placed on the stock in the transaction is its
net asset value.
Neither Delaware law nor the STIT Declaration confer upon shareholders
rights of appraisal or dissenters' rights.
Amendments to Organization Documents
STIC has the right to amend, alter, change or repeal any provision
contained in the STIC Articles of Incorporation in the manner prescribed by
statute, including any amendment that alters the contract rights, as expressly
set forth in the STIC Articles of Incorporation, of any outstanding stock, and
all rights conferred on shareholders are granted subject to this reservation.
The STIC Board may approve amendments to the STIC Articles of Incorporation to
classify or reclassify unissued shares of a class of stock without shareholder
approval. Other amendments
21
to the STIC Articles of Incorporation may be adopted if approved by the
affirmative vote of a majority of all the votes entitled to be cast on the
matter. The directors have the power to alter, amend or repeal the STIC Bylaws
or adopt new bylaws at any time.
Consistent with Delaware law, the STIT Board may, without shareholder
approval, amend the STIT Declaration at any time, except to eliminate any voting
rights pertaining to the shares of STIT, without approval of the majority of the
shares of STIT. The trustees have the power to alter, amend or repeal the STIT
Bylaws or adopt new bylaws at any time.
The foregoing is only a summary of certain differences between and
among the STIC Articles of Incorporation and the STIC Bylaws and Maryland law,
and the STIT Declaration and STIT Bylaws and Delaware law. It is not a complete
list of the differences. Shareholders should refer to the provisions of the
governing documents of STIC and STIT and state law directly for a more thorough
comparison. Copies of the STIC Articles of Incorporation and STIC Bylaws and of
the STIT Declaration and STIT Bylaws are available to shareholders without
charge upon written request to STIC.
THE BOARD'S RECOMMENDATION ON PROPOSAL 2
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" this Proposal.
PROPOSAL 3 -
APPROVAL OF THE TFIC PLAN TO REDOMESTICATE
TAX-FREE INVESTMENTS CO. AS A DELAWARE STATUTORY TRUST
WHICH FUNDS' SHAREHOLDERS WILL VOTE ON PROPOSAL 3?
Proposal 3 applies only to the shareholders of Cash Reserve Portfolio.
BACKGROUND
Tax-Free Investments Co. ("TFIC") currently is organized as a Maryland
corporation. AMVESCAP has identified Cash Reserve Portfolio, the sole series
portfolio of TFIC, as appropriate to be redomesticated as a new series portfolio
of Tax-Free Investments Trust ("TFIT"), a newly created open-end management
investment company organized as a statutory trust under the Delaware Statutory
Trust Act.
TFIC's Board of Directors (the "TFIC Board") has approved the TFIC
Plan, which provides for a series of transactions to convert Cash Reserve
Portfolio (the "Current Fund") to a corresponding series (the "New Fund") of
TFIT. Under the TFIC 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 of the Current Fund's liabilities
(collectively, the "TFIC Redomestication"). A form of the TFIC Plan relating to
the proposed TFIC Redomestication is set forth in Appendix I. If Proposal 3 is
not approved by the TFIC shareholders, TFIC will continue to operate as a
Maryland corporation.
Approval of the TFIC Plan requires the affirmative vote of a majority
of the issued and outstanding shares of TFIC.
22
The TFIC Redomestication is being proposed primarily to provide TFIC
with greater flexibility in conducting its business operations. The operations
of the New Fund following the TFIC Redomestication will be substantially similar
to those of the Current Fund. As described below, TFIT's Declaration of Trust
(the "TFIT Declaration") differs from TFIC's Articles of Incorporation and the
amendments and supplements thereto (the "TFIC Articles of Incorporation") in
certain respects that are expected to improve TFIC's and the Current Fund's
operations.
REASONS FOR THE PROPOSED TFIC REDOMESTICATION
The TFIC Redomestication is being proposed because, as noted above, AIM
and the TFIC Board believe that the Delaware statutory trust organizational form
offers a number of advantages over the Maryland corporate organizational form.
As a result of these advantages, the Delaware statutory trust organizational
form has been increasingly used by mutual funds, including the majority of the
AIM Funds. TFIT, like TFIC, will operate as an open-end management investment
company registered with the Securities and Exchange Commission (the "SEC") under
the 1940 Act. As permitted by SEC rules, TFIT will adopt as its own the
registration statement of TFIC.
The Delaware statutory trust organizational form offers greater
flexibility than the Maryland corporate form. A Maryland corporation is governed
by the detailed requirements imposed by Maryland corporate law and by the terms
of its articles of incorporation. A Delaware statutory trust is subject to fewer
statutory requirements. TFIT will be governed primarily by the terms of the TFIT
Declaration. In particular, TFIT will have greater flexibility to conduct
business without the necessity of engaging in expensive proxy solicitations to
shareholders. For example, under Maryland corporate law, amendments to the TFIC
Articles of Incorporation would typically require shareholder approval. Under
Delaware law, unless the Declaration of Trust of a Delaware statutory trust
provides otherwise, amendments to it may be made without first obtaining
shareholder approval. In addition, unlike Maryland corporate law, which
restricts the delegation of a board of directors' functions, Delaware law
permits the board of trustees of a Delaware statutory trust to delegate certain
of its responsibilities. For example, the board of trustees of a Delaware
statutory trust may delegate the responsibility of declaring dividends to duly
empowered committees of the board or to appropriate officers. Finally, Delaware
law permits the trustees to adapt a Delaware statutory trust to future
contingencies. For example, the trustees may, without a shareholder vote, change
a Delaware statutory trust's domicile or organizational form. In contrast, under
Maryland corporate law, a company's board of directors would be required to
obtain shareholder approval prior to changing domicile or organizational form.
The TFIC Redomestication will also have certain other effects on TFIC,
its shareholders and management, which are described below under the heading
"TFIT Compared to TFIC."
WHAT THE PROPOSED TFIC REDOMESTICATION WILL INVOLVE
To accomplish the TFIC Redomestication, TFIT has been formed as a
Delaware statutory trust pursuant to the TFIT Declaration and the New Fund has
been established as the sole series of TFIT. 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 shares of the New
23
Fund equal to the number of full and fractional shares of common stock 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 TFIC
Redomestication, 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 TFIC Redomestication, the Current Fund will be
terminated and TFIC will be dissolved as a Maryland corporation.
The obligations of TFIC and TFIT under the TFIC Plan are subject to
various conditions stated therein. To provide against unforeseen events, the
TFIC Plan may be terminated or amended at any time prior to the closing of the
TFIC Redomestication by action of the TFIC Board, notwithstanding the approval
of the TFIC 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. TFIC and TFIT may at any time waive compliance with any
condition contained in the TFIC Plan, provided that the waiver does not
materially adversely affect the interests of shareholders of the Current Fund.
The TFIC Plan authorizes TFIC to acquire one share of each class of the
New Fund and, as the sole shareholder of the New Fund prior to the TFIC
Redomestication, 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
TFIC's current investment advisory agreement with AIM.
- Approve with respect to the New Fund a administrative services
agreement with AIM that will be substantially identical to the
Current Fund'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.
24
- Elect the directors of TFIC as the trustees of TFIT to serve
without limit in time, except as they may resign or be removed
by action of TFIT's trustees or shareholders, and except as
they retire in accordance with TFIT's retirement policy for
trustees. TFIT's retirement policy for trustees is
substantially identical to TFIC's retirement policy for
directors.
- Ratify the selection of Ernst & Young LLP 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.
TFIT'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 TFIC's transfer agent for each shareholder of the Current Fund. Shares held
in the Current Fund accounts will automatically be designated as shares of the
New Fund. Certificates for Current Fund shares issued before the TFIC
Redomestication will represent shares of the New Fund after the TFIC
Redomestication. Shareholders of the New Fund will not have the right to demand
or require TFIT 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 TFIC
Redomestication.
Assuming your approval of Proposal 3, TFIC currently contemplates that
the TFIC Redomestication will be consummated on November 4, 2003.
THE FEDERAL INCOME TAX CONSEQUENCES OF THE TFIC REDOMESTICATION
TFIC and TFIT will receive an opinion of Ballard Spahr Andrews &
Ingersoll, LLP to the effect that the TFIC Redomestication 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 TFIC Redomestication. Shareholders of the
Current Fund should consult their tax advisers regarding the effect, if any, of
the TFIC Redomestication in light of their individual circumstances and as to
state and local consequences, if any, of the TFIC Redomestication.
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 TFIC
Redomestication.
25
TFIT COMPARED TO TFIC
Structure of TFIT
TFIT has been 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. TFIT has established a sole series portfolio corresponding to Cash
Reserve Portfolio, the sole series portfolio of TFIC, except that the new series
portfolio will be designated "Tax-Free Cash Reserve Portfolio." TFIT has also
established classes with respect to the New Fund corresponding to and having
identical designations as the classes of the Current Fund. TFIT's fiscal year is
the same as that of TFIC. The New Fund will have the same investment objectives,
policies, and restrictions as the predecessor Current Fund. TFIT will not have
any operations prior to the TFIC Redomestication. Initially, TFIC will be the
sole shareholder of TFIT.
As a Delaware statutory trust, TFIT's operations are governed by the
TFIT Declaration, TFIT's Bylaws and applicable Delaware law rather than by the
TFIC Articles of Incorporation, TFIC's Amended and Restated Bylaws (the "TFIC
Bylaws") and applicable Maryland law. Certain differences between the two
domiciles and organizational forms are summarized below. The operations of TFIT
will continue to be subject to the provisions of the 1940 Act and the rules and
regulations thereunder.
Trustees of TFIT
Subject to the provisions of the TFIT Declaration, the business of TFIT
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 TFIT are substantially the same as those of the
directors of TFIC.
The trustees of TFIT would be those persons elected at this Special
Meeting to serve as directors of TFIC. Information concerning the nominees for
election as directors of TFIC is set forth above under Proposal 1.
Shares of TFIT
The beneficial interests in the New Fund will be represented by
transferable shares, par value $0.001 per share. Shareholders do not have the
right to demand or require TFIT to issue share certificates. The trustees have
the power under the TFIT Declaration to establish new series and classes of
shares; TFIC's directors currently have a similar right. The TFIT Declaration
permits the trustees to issue an unlimited number of shares of each class and
series. TFIC is authorized to issue only the number of shares specified in the
TFIC Articles of Incorporation and may issue additional shares only with TFIC
Board approval and after payment of a fee to the State of Maryland on any
additional shares authorized.
Your Fund currently has the classes of shares set forth in Exhibit A.
TFIT has established for the New Fund the classes that currently exist for the
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.
26
Liability of Shareholders
Shareholders of a Maryland corporation generally do not have personal
liability for the corporation's obligations, except that a shareholder may be
liable to the extent that he or she receives any distribution which exceeds the
amount which he or she could properly receive under Maryland law or where such
liability is necessary to prevent fraud.
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 TFIT Declaration provides that shareholders of
TFIT shall not be subject to any personal liability for acts or obligations of
TFIT and that every written agreement, obligation or other undertaking made or
issued by TFIT shall contain a provision to the effect that shareholders are not
personally liable thereunder. In addition, the TFIT Declaration provides for
indemnification out of TFIT's property 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
TFIT 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 TFIT, the possibility of TFIT being unable to meet
its obligations is considered remote, and even if a claim were brought against
TFIT and a court determined that shareholders were personally liable, it would
likely not impose a material obligation on a shareholder.
Election of Directors/Trustees; Terms
The shareholders of TFIC have elected a majority of the directors of
TFIC. Each director serves until a successor is elected, subject to his or her
earlier death, resignation or removal in the manner provided by law (see below).
In the case of a vacancy on the TFIC Board (other than a vacancy created by
removal by the shareholders), a majority of the directors may appoint a
successor to fill such vacancy. The right of the TFIC Board to appoint directors
to fill vacancies without shareholder approval is subject to the provisions of
the 1940 Act.
As set forth above, the TFIC Plan authorizes TFIC to acquire one share
of each class of the New Fund and, as the sole shareholder of TFIT prior to the
TFIC Redomestication, to elect the directors of TFIC as the trustees of TFIT.
Such trustees serve for the life of TFIT, subject to his or her earlier death,
incapacitation, resignation, retirement or removal (see below). In the case of
any vacancy on the Board of Trustees of TFIT (the "TFIT Board"), a majority of
the trustees may appoint a successor to fill such vacancy. The right of the TFIT
Board to appoint trustees to fill vacancies without shareholder approval is
subject to the provisions of the 1940 Act.
Removal of Directors/Trustees
A director of TFIC may be removed by the affirmative vote of a majority
of the holders of a majority of the outstanding shares of TFIC.
27
A trustee of TFIT 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 TFIT.
Meetings of Shareholders
TFIC is not required to hold annual meetings of shareholders and does
not intend to do so unless required by the 1940 Act. The TFIC Bylaws provide
that a special meeting of shareholders may be called by the president or, in his
or her absence, the vice-president or by a majority of the TFIC Board or holders
of shares entitled to cast at least 10% of the votes entitled to be cast at the
special meeting. Requests for special meetings must, among other things, state
the purpose of such meeting and the matters to be voted upon. No special meeting
needs to be called to consider any matter previously voted upon at a special
meeting called by the shareholders during the preceding twelve months, unless
requested by a majority of all shares entitled to vote at such meeting.
TFIT is not required to hold annual meetings of shareholders unless
required by the 1940 Act and does not intend to do so. The TFIT Bylaws 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 TFIT. 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 Directors/Trustees and Officers; Indemnification
Maryland law permits a corporation to eliminate liability of its
directors and officers to the corporation or its stockholders, except for
liability arising from receipt of an improper benefit or profit and from active
and deliberate dishonesty. The TFIC Articles of Incorporation eliminate director
and officer liability to the fullest extent permitted under Maryland law. Under
Maryland law, indemnification of a corporation's directors and officers is
mandatory if a director or officer has been successful on the merits or
otherwise in the defense of certain proceedings. Maryland law permits
indemnification for other matters unless it is established that the act or
omission giving rise to the proceeding was committed in bad faith, a result of
active and deliberate dishonesty, or one in which a director or officer actually
received an improper benefit.
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 TFIT
Declaration, the trustees and officers of TFIT 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 TFIT Declaration provides for the indemnification of its 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 TFIT, 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.
28
Dissolution and Termination
Maryland law provides that TFIC may be dissolved by the vote of a
majority of the TFIC Board and two-thirds of the shares entitled to vote on the
dissolution; however the TFIC Articles of Incorporation reduce the required
shareholder vote from two-thirds to a majority of the shares entitled to vote on
the dissolution.
Pursuant to the TFIT Declaration, TFIT or any series or class of shares
of beneficial interest in TFIT may be terminated by: (1) a majority shareholder
vote of TFIT or the affected series or class, respectively; or (2) if there are
fewer than 100 shareholders of record of TFIT or of such terminating series or
class, the trustees pursuant to written notice to the shares of TFIT or the
affected series or class.
Voting Rights of Shareholders
Shareholders of a Maryland corporation such as TFIC are entitled to
vote on, among other things, those matters which effect fundamental changes in
the corporate structure (such as a merger, consolidation or sale of
substantially all of the assets of the corporation) as provided by Maryland law.
The TFIT Declaration grants 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 TFIT 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 TFIT or one of its investment
portfolios; (v) merger or consolidation of TFIT or any of its investment
portfolios, with certain exceptions; (vi) approval of any amendments to
shareholders' voting rights under the TFIT Declaration; 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
Under Maryland law, shareholders may not demand the fair value of their
shares from the successor company in a transaction involving the transfer of the
corporation's assets and are, therefore, bound by the terms of the transaction
if the stock is that of an open-end investment company registered with the SEC
under the 1940 Act and the value placed on the stock in the transaction is its
net asset value.
Neither Delaware law nor the TFIT Declaration confer upon shareholders
rights of appraisal or dissenters' rights.
Amendments to Organization Documents
TFIC has the right to amend, alter, change or repeal any provision
contained in the TFIC Articles of Incorporation in the manner prescribed by
statute, including any amendment that alters the contract rights, as expressly
set forth in the TFIC Articles of Incorporation, of any outstanding stock, and
all rights conferred on shareholders are granted subject to this reservation.
The TFIC Board may approve amendments to the TFIC Articles of Incorporation to
classify or reclassify unissued shares of a class of stock without shareholder
approval. Other amendments
29
to the TFIC Articles of Incorporation may be adopted if approved by the
affirmative vote of a majority of all the votes entitled to be cast on the
matter. The directors have the power to alter, amend or repeal the TFIC Bylaws
or adopt new bylaws at any time.
Consistent with Delaware law, the TFIT Board may, without shareholder
approval, amend the TFIT Declaration at any time, except to eliminate any voting
rights pertaining to the shares of TFIT, without approval of the majority of the
shares of TFIT. The trustees have the power to alter, amend or repeal the TFIT
Bylaws or adopt new bylaws at any time.
The foregoing is only a summary of certain differences between and
among the TFIC Articles of Incorporation, the TFIC Bylaws and Maryland law, and
the TFIT Declaration, TFIT Bylaws and Delaware law. It is not a complete list of
the differences. Shareholders should refer to the provisions of the governing
documents of TFIC and TFIT and state law directly for a more thorough
comparison. Copies of the TFIC Articles of Incorporation and TFIC Bylaws and of
the TFIT Declaration and TFIT Bylaws are available to shareholders without
charge upon written request to TFIC.
THE BOARD'S RECOMMENDATION ON PROPOSAL 3
Your Board, including the independent directors, unanimously recommends
that you vote "FOR" this Proposal.
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the STIC Board has appointed Tait, Weller &
Baker ("TWB") as such Company's independent public accountants for the fiscal
year ending August 31, 2003. The Audit Committee of the TFIC Board has appointed
Ernst & Young LLP ("E&Y") as such Company's independent public accountants for
the fiscal year ending March 31, 2004.
Representatives of TWB and E&Y 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 STIC Board and the TFIC Board have
considered whether the provision of the services below is compatible with
maintaining the independence of TWB and E&Y, respectively.
FEES PAID TO TWB RELATED TO SHORT-TERM INVESTMENTS CO. (FOR 2002 FISCAL YEAR)
TWB billed Short-Term Investments Co. (consisting of three separate
series portfolios) aggregate fees for professional services rendered for the
2002 fiscal year as follows:
FINANCIAL
INFORMATION SYSTEMS
DESIGN AND
IMPLEMENTATION ALL OTHER
COMPANY AND FISCAL YEAR END AUDIT FEES FEES FEES TOTAL FEES
- --------------------------- ---------- ---- ---- ----------
Short-Term
Investments Co. (8/31/02)................. $36,000 $0 $0 $36,000
30
FEES PAID TO TWB NOT RELATED TO SHORT-TERM INVESTMENTS CO. (FOR 2002 FISCAL
YEAR)
TWB billed AIM aggregate fees for professional services rendered for
the 2002 fiscal year to AIM, or any affiliate that provided services to
Short-Term Investments Co., as follows:
Financial Information Systems Design and Implementation Fees................................... $ 0
All Other Fees................................................................................. $ 0
----
Total Fees..................................................................................... $ 0
FEES PAID TO E&Y RELATED TO TAX-FREE INVESTMENTS CO. (FOR 2003 FISCAL YEAR)
E&Y billed Tax-Free Investments Co. (consisting of one series
portfolio) aggregate fees for professional services rendered for the 2003 fiscal
year as follows:
FINANCIAL
INFORMATION SYSTEMS
DESIGN AND
IMPLEMENTATION ALL OTHER
COMPANY AND FISCAL YEAR END AUDIT FEES FEES FEES(*) TOTAL FEES
- --------------------------- ---------- ---- ------- ----------
Tax-Free Investments Co. (3/31/03)............. $21,862 $0 $850 $22,712
* All Other Fees includes fees billed for all other non-audit services,
including fees for tax-related services rendered to Tax-Free Investments Co.
FEES PAID TO E&Y NOT RELATED TO TAX-FREE INVESTMENTS CO. (FOR 2003 FISCAL YEAR)
E&Y billed AIM aggregate fees for professional services rendered for
the 2003 fiscal year to AIM, or any affiliate that provided services to Tax-Free
Investments Co., as follows:
Financial Information Systems Design and Implementation Fees................................... $ 0
All Other Fees(**)............................................................................. $300,661
--------
Total Fees..................................................................................... $300,661
** As required by SEC rules, All Other Fees includes amounts paid to
E&Y by the Fund's advisor and other related entities that provide support for
the operations for the Company. All Other Fees include services relating to
audits of related entities, tax services and research on accounting
consultations, and issuance of SAS No. 70 Reports, Reports on The Processing of
Transactions by Service Organization. The services performed for the Fund's
advisor and related entities benefit many legal entities of AIM, including many
sister funds within the investment company complex.
31
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
Fund Management Company, 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173, is the principal underwriter for the Funds.
OFFICERS OF THE COMPANIES
Information regarding the current officers of the Companies can be
found in Exhibit C.
SECURITY OWNERSHIP OF MANAGEMENT
Information regarding the ownership of each class of each Fund's shares
by the directors, nominees, and current executive officers of the Companies 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 Companies owned 5% or more of any
class of the outstanding shares of each Fund can be found in Exhibit E.
DIRECTOR OWNERSHIP OF FUND SHARES
The dollar range of equity securities beneficially owned by each
director 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 director
and nominee within the AIM Funds complex can be found in Exhibit F.
32
APPENDIX I
SHORT-TERM INVESTMENTS CO.
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of
July 30, 2003, by and between Short-Term Investments Co., a Maryland corporation
(the "Company"), 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
Short-Term Investments Trust, 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
The Company 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. The Company currently publicly offers shares of
common stock representing interests in one or more separate series portfolios.
Each of these series portfolios is listed on Schedule A and is referred to in
this Agreement as a "Current Fund."
The Board of Directors of the Company has designated multiple classes
of common stock 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 Company desires to change its form and place of organization by
reorganizing as the Trust. In anticipation of such reorganization, the Board of
Trustees of the Trust has established a series portfolio corresponding to each
of 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.
Each Reorganization of each Current Fund is dependent upon the
consummation of the Reorganization of all of the other Current Funds, so that
the Reorganizations of all of the Current Funds must be consummated if any of
them are to be 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.
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 the Company, on its own
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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 series portfolios of the
Company as shown on Schedule A.
1.5 "Current Fund Class" shall mean each class of common stock of
the Company representing an 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 series portfolios of the
Trust, one of which shall correspond to one of the Current Funds as shown on
Schedule A.
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.
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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 The Company 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 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.
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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 the Company shall be terminated; provided, however, that
the termination of each Current Fund as a designated series of the Company shall
not be required if the Reorganization shall not have been consummated.
2.4 Following receipt of the required shareholder vote and as soon
as reasonably practicable after distribution of the New Fund Shares pursuant to
Section 2.2, the Company and the Trust shall cause Articles of Transfer to be
filed with the State Department of Assessments and Taxation of Maryland and,
following the filing of Articles of Transfer, the Company shall file Articles of
Dissolution with the State Department of Assessments and Taxation of Maryland to
dissolve the Company as a Maryland corporation; provided, however, that the
filing of Articles of Transfer and Articles of Dissolution as aforesaid shall
not be required if the Reorganization shall not have been consummated.
2.5 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.
2.6 Any reporting responsibility of the Company 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 the Company
on November 4, 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 the Company'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 The Company 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. The Company 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 The Company 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 the Company's
Secretary or Assistant Secretary. The Trust shall cause the Transfer
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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 the Company evidencing the New Fund
Shares to be credited to each corresponding Current Fund at the Effective Time
or provide evidence satisfactory to the Company 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.
3.4 The Company 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 The Company represents and warrants on its own behalf and on
behalf of each Current Fund as follows:
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maryland,
and its Charter is on file with the Maryland Department of Assessments
and Taxation;
(b) The Company 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 the Company;
(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;
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(g) During the five-year period ending on the date of the
Reorganization, neither Company nor any person related to Company (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
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 the Company'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.
The Company 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, the Company 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) The Company 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 shall have been duly authorized by all necessary action by
the Company'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
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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.
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
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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 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 the Company 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.
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5. COVENANTS.
5.1 As soon as practicable after the date of this Agreement, the
Company shall call a meeting of its shareholders (the "Shareholders Meeting") to
consider and act on this Agreement and, in connection therewith, the sale of all
of the Company's assets and the dissolution of the Company as a Maryland
corporation. The Board of Directors of the Company shall recommend that
shareholders approve this Agreement and, in connection therewith, sale of all of
the Company's assets and the dissolution of the Company as a Maryland
corporation. Approval by shareholders of this Agreement will authorize the
Company, and the Company hereby agrees, to vote on the matters referred to in
Sections 5.2 and 5.3.
5.2 Prior to the Closing, the Company shall acquire one New Fund
Share in each New Fund Class of each New Fund for the purpose of enabling the
Company to elect the Company's directors 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 the Company as the sole shareholder of each New Fund.
5.4 The Company or the Trust, as appropriate, shall file with the
SEC one or more post-effective amendments to the Company'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 Company 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 as of the Closing.
6. CONDITIONS PRECEDENT.
The obligations of the Company, 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
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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 the Company 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, orders, and permits of
federal, state, and local regulatory authorities (including the SEC and state
securities authorities) deemed necessary by either the Company 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 the Company or the Trust may for itself waive any of such conditions.
6.3 Each of the Company 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 the Company 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
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(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).
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
directors/trustees of either the Company 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 by the Company's shareholders, in such manner as
may be mutually agreed upon in writing by the parties; provided that following
such approval no such amendment shall have a material adverse effect on the
shareholders' interests.
10. TERMINATION.
This Agreement may be terminated at any time at or prior to the
Effective Time, whether before or after approval by the Company's shareholders:
10.1 By either the Company 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 the Company or the Trust or any Current Fund or corresponding New
Fund, to the other.
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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.
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.
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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: SHORT-TERM INVESTMENTS CO., on
behalf of each of its series
listed in Schedule A
______________________________________ By:_________________________________
Title:______________________________
Attest: SHORT-TERM INVESTMENTS TRUST,
on behalf of each of its series
listed in Schedule A
______________________________________ By:_________________________________
Title:______________________________
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SCHEDULE A
SERIES OF SHORT-TERM INVESTMENTS CO. CORRESPONDING SERIES OF SHORT-TERM
(EACH A "CURRENT FUND") INVESTMENTS TRUST (EACH A "NEW FUND")
- ------------------------------------ -------------------------------------
Cash Assets Portfolio Cash Assets Portfolio
Liquid Assets Portfolio Liquid Assets Portfolio
Prime Portfolio STIC Prime Portfolio
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SCHEDULE B
CLASSES OF EACH CURRENT FUND CORRESPONDING CLASSES OF EACH NEW FUND
- ---------------------------------------------------- -------------------------------------------
Cash Assets Portfolio Cash Assets Portfolio
Cash Management Class Shares Cash Management Class Shares
Institutional Class Shares Institutional Class Shares
Personal Investment Class Shares Personal Investment Class Shares
Private Investment Class Shares Private Investment Class Shares
Reserve Class Shares Reserve Class Shares
Resource Class Shares Resource Class Shares
Sweep Class Shares Sweep Class Shares
Liquid Assets Portfolio Liquid Assets Portfolio
Cash Management Class Shares Cash Management Class Shares
Institutional Class Shares Institutional Class Shares
Personal Investment Class Shares Personal Investment Class Shares
Private Investment Class Shares Private Investment Class Shares
Reserve Class Shares Reserve Class Shares
Resource Class Shares Resource Class Shares
Sweep Class Shares Sweep Class Shares
Prime Portfolio STIC Prime Portfolio
Cash Management Class Shares Cash Management Class Shares
Institutional Class Shares Institutional Class Shares
Personal Investment Class Shares Personal Investment Class Shares
Private Investment Class Shares Private Investment Class Shares
Reserve Class Shares Reserve Class Shares
Resource Class Shares Resource Class Shares
Sweep Class Shares Sweep Class Shares
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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 SHORT-TERM INVESTMENTS CO.
OUTSTANDING ON JULY 25, 2003
NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND (CLASS) JULY 25, 2003
-------------------- ----------------
Cash Assets Portfolio
Institutional Class...................................................
Liquid Assets Portfolio
Cash Management Class.................................................
Institutional Class...................................................
Personal Investment Class.............................................
Private Investment Class..............................................
Reserve Class.........................................................
Resource Class........................................................
Sweep Class...........................................................
Prime Portfolio
Cash Management Class.................................................
Institutional Class...................................................
Personal Investment Class.............................................
Private Investment Class..............................................
Reserve Class.........................................................
Resource Class........................................................
Sweep Class...........................................................
SHARES OF TAX-FREE INVESTMENTS CO.
OUTSTANDING ON JULY 25, 2003
NUMBER OF SHARES
OUTSTANDING ON
NAME OF FUND (CLASS) JULY 25, 2003
-------------------- ----------------
Cash Reserve Portfolio
Cash Management Class.................................................
Institutional Class...................................................
Personal Investment Class.............................................
Private Investment Class..............................................
Reserve Class.........................................................
Resource Class........................................................
Sweep Class...........................................................
A-1
EXHIBIT B
DIRECTOR COMPENSATION TABLE
Set forth below is information regarding compensation paid or accrued
for each director of each Company who was not affiliated with AIM during the
year ended December 31, 2002.
AGGREGATE COMPENSATION
FROM COMPANY(1) RETIREMENT TOTAL
------------------------------------ BENEFITS ACCRUED ESTIMATED ANNUAL COMPENSATION
SHORT-TERM TAX-FREE BY ALL BENEFITS UPON FROM ALL
NAME OF DIRECTOR INVESTMENTS CO. INVESTMENTS CO. AIM FUNDS(2) RETIREMENT(3) AIM FUNDS(4)
- ------------------------- --------------- --------------- ---------------- ---------------- ------------
Frank S. Bayley $24,539 $2,170 $142,800 $90,000 $150,000
Bruce L. Crockett 26,210 2,156 50,132 90,000 149,000
Owen Daly II(5) 7,902 -0- 40,045 75,000 -0-
Albert R. Dowden 26,210 2,170 57,955 90,000 150,000
Edward K. Dunn, Jr. 26,210 2,156 94,149 90,000 149,000
Jack M. Fields 26,117 2,170 29,153 90,000 153,000
Carl Frischling(6) 26,117 2,170 74,511 90,000 150,000
Prema Mathai-Davis 26,210 2,170 33,931 90,000 150,000
Lewis F. Pennock 26,967 2,170 54,802 90,000 154,000
Ruth H. Quigley 24,632 2,170 142,502 90,000 153,000
Louis S. Sklar 26,967 2,156 78,500 90,000 153,000
(1) Amounts shown for Short-Term Investments Co. and Tax-Free Investments
Co. are based on the fiscal years ended August 31, 2002 and March 31,
2003, respectively. The total amount of compensation deferred by all
directors of Short-Term Investments Co., during the fiscal year ended
August 31, 2002, including earnings, was $130,885. The total amount of
compensation deferred by all directors of Tax-Free Investments Co.
during the fiscal year ended March 31, 2003, including earnings, was
$8,539.
(2) During the fiscal year ended August 31, 2002, the total amount of
expenses allocated to Short-Term Investments Co. in respect of such
retirement benefits was $76,779. During the fiscal year ended March 31,
2003, the total amount of expenses allocated to Tax-Free Investments
Co. in respect of such retirement benefits was $17,575.
(3) Amounts shown assume each director serves until his or her normal
retirement date.
(4) All directors currently serve as directors or trustees of 17 registered
investment companies advised by AIM.
(5) Mr. Daly was a director until December 31, 2001, when he retired.
(6) During the fiscal year ended August 31, 2002, Short-Term Investments
Co. paid $128,388 in legal fees to Kramer Levin Naftalis & Frankel LLP
("Kramer Levin") for services rendered by such firm as counsel to the
independent directors of such Company. During the fiscal year ended
March 31, 2003, Tax-Free Investments Co. paid $7,079 in legal fees to
Kramer Levin for services rendered by such firm as counsel to the
independent directors of such Company. Mr. Frischling is a partner of
Kramer Levin.
B-1
EXHIBIT C
OFFICERS OF COMPANIES
The following table provides information with respect to the current
officers of each Company. 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 COMPANY SINCE PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ----------------------------------- ------- -------------------------------------------------------------
Robert H. Graham - 1946 1994* Director and Chairman, A I M Management Group Inc.
Chairman and President 1977** (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 Short-Term Investments Co.
** Denotes service as officer of Tax-Free Investments Co.
*** Denotes service as officer of both Short-Term Investments Co. and
Tax-Free Investments Co.
C-1
Gary T. Crum - 1947 1993* Director, Chairman and Director of Investments, A I M
Senior Vice President 1977** 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.
Stuart W. Coco - 1955 2002** Managing Director and Chief Research Officer - Fixed Income,
Vice President A I M Capital Management, Inc.; and Vice President, A I M
Advisors, Inc.
Melville B. Cox - 1943 1993* Vice President and Chief Compliance Officer, A I M
Vice President 1992** Advisors, Inc. and A I M Capital Management, Inc.; and Vice
President, A I M Fund Services, Inc.
Karen Dunn Kelley - 1960 1993* Managing Director and Chief Cash Management Officer, A I M
Vice President 1992** Capital management, Inc.; Director and president, fund
Management company; and Vice President, A I M Advisors, Inc.
Dana R. Sutton - 1959 1993* Vice President and Fund Treasurer, A I M Advisors, Inc.
Vice President and Treasurer 1988**
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 Short-Term Investments Co.
** Denotes service as officer of Tax-Free Investments Co.
*** Denotes service as officer of both Short-Term Investments Co. and
Tax-Free Investments Co.
C-2
EXHIBIT D
SECURITY OWNERSHIP OF MANAGEMENT
To the best knowledge of the Companies, 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 directors,
nominees, and current executive officers of the Companies. No information is
given as to a Fund or a class if a director, nominee or current executive
officer held no shares of any or all classes of such Fund as of July 25, 2003.
FUND AND NUMBER OF SHARES OF THE FUNDS PERCENT OF
NAME OF DIRECTOR/NOMINEE/OFFICER 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...........................
Stuart W. Coco.........................
Melville B. Cox........................
Karen Dunn Kelley......................
Dana R. Sutton.........................
Nancy L. Martin........................
All directors, nominees, and current
executive officers as a group..........
* To the best knowledge of each Company, the ownership of shares of each
series portfolio of each Company by directors, nominees and current
executive officers of each Company as a group constituted less than 1%
of each class of each series portfolio of the Companies as of July 25,
2003. [NEED TO CONFIRM].
D-1
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 the Companies 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 NUMBER OF SHARES PERCENT OF CLASS OWNED
FUND (CLASS) RECORD OWNER OWNED OF RECORD OF RECORD*
----------- ------------ --------------- ----------
- ------------------
* The Companies have no knowledge of whether all or any portion of the
shares owned of record are also owned beneficially.
E-1
EXHIBIT F
DIRECTOR OWNERSHIP OF FUND SHARES
Set forth below is the dollar range of equity securities beneficially
owned by each director 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 director within the AIM Funds complex.
DOLLAR RANGE OF EQUITY
SECURITIES PER FUND
INTERESTED DIRECTORS
--------------------
ROBERT H. GRAHAM MARK H. WILLIAMSON
---------------- ------------------
SHORT-TERM INVESTMENTS CO.
Cash Assets Portfolio None None
Liquid Assets Portfolio None None
Prime Portfolio None None
TAX-FREE INVESTMENTS CO.
Cash Reserve Portfolio None None
Aggregate Dollar Range of Equity Over $100,000 $10,001 - $50,000
Securities in All Registered Investment
Companies Overseen By Director in the
AIM Funds Complex
F-1
DOLLAR RANGE OF EQUITY SECURITIES PER FUND
INDEPENDENT DIRECTORS
---------------------
FRANK S. BRUCE L. ALBERT R. EDWARD K. JACK M.
BAYLEY CROCKETT DOWDEN DUNN, JR.(1) FIELDS(1)
------ -------- ------ ------------ ---------
SHORT-TERM INVESTMENTS CO.
Cash Assets Portfolio None None None None None
Liquid Assets Portfolio None None None None None
Prime Portfolio None None None None None
TAX-FREE INVESTMENTS CO.
Cash Reserve Portfolio 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 Director in the
AIM Funds Complex
INDEPENDENT DIRECTORS
---------------------
PREMA
CARL MATHAI- LEWIS F. RUTH H. LOUIS S.
FRISCHLING(1) DAVIS(1) PENNOCK QUIGLEY SKLAR(1)
---------- ----- ------- ------- -----
SHORT-TERM INVESTMENTS CO.
Cash Assets Portfolio None None None None None
Liquid Assets Portfolio None None None None None
Prime Portfolio None None None None None
TAX-FREE INVESTMENTS CO.
Cash Reserve Portfolio 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 $100,0 $10,000
Companies Overseen By Director in the
AIM Funds Complex
- ------------------
(1) Amounts shown include the total amount of compensation deferred by the
director 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.
----- -------- --------- -----------
SHORT-TERM INVESTMENTS CO.
Cash Assets Portfolio None None None None
Liquid Assets Portfolio None None None None
Prime Portfolio None None None None
TAX-FREE INVESTMENTS CO.
Cash Reserve Portfolio None None None None
Aggregate Dollar Range of Equity None None None None
Securities in All Registered Investment
Companies Overseen By Director in the
AIM Funds Complex
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 postage-paid envelope provided or
on the Proxy Card. Information 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 DIRECTORS (THE "BOARD")
OF
CASH ASSETS PORTFOLIO
(A PORTFOLIO OF SHORT-TERM INVESTMENTS CO.)
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 Short-Term Investments Co., WITHHOLD
each of whom 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
</Table>
TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "FOR ALL EXCEPT"
BOX AND WRITE THE NOMINEE'S NUMBER ON THE LINE PROVIDED.
- --------------------------------------------------------------------------------
<Table>
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Approve an Agreement and Plan of Reorganization which provides for the
redomestication of each series portfolio of Short-Term Investments Co. as
new series portfolios of Short-Term Investments Trust, an existing Delaware
statutory trust and, in connection therewith, the sale of all of Short-Term
Investments Co.'s assets and the dissolution of Short-Term Investments Co.
as a Maryland Corporation.
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 DIRECTORS (THE "BOARD")
OF
LIQUID ASSETS PORTFOLIO
(A PORTFOLIO OF SHORT-TERM INVESTMENTS CO.)
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.
-- 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. 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 Short-Term Investments Co.,
each of whom will serve until his or her successor is elected and qualified: WITHHOLD
FOR AUTHORITY FOR ALL
01 Bob R. Baker 05 Albert R. Dowden 09 Robert H. Graham 13 Ruth H. Quigley ALL FOR ALL NOMINEES EXCEPT
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
</Table>
TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER ON THE LINE PROVIDED.
- --------------------------------------------------------------------------------
<Table>
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Approve an Agreement and Plan of Reorganization which provides for the
redomestication of each series portfolio of Short-Term Investments Co. as
new series portfolios of Short-Term Investments Trust, an existing Delaware
statutory trust and, in connection therewith, the sale of all of Short-Term
Investments Co.'s assets and the dissolution of Short-Term Investments Co.
as a Maryland Corporation.
</Table>
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
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 DIRECTORS (THE "BOARD")
OF
PRIME PORTFOLIO
(A PORTFOLIO OF SHORT-TERM INVESTMENTS CO.)
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 Short-Term Investments Co., WITHHOLD
each of whom 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
</Table>
TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER ON THE LINE PROVIDED.
- --------------------------------------------------------------------------------
<Table>
2. Approve an Agreement and Plan of Reorganization which provides for the FOR AGAINST ABSTAIN
redomestication of each series portfolio of Short-Term Investments Co. as [ ] [ ] [ ]
new series portfolios of Short-Term Investments Trust, an existing Delaware
statutory trust and, in connection therewith, the sale of all of Short-Term
Investments Co.'s assets and the dissolution of Short-Term Investments Co.
as a Maryland Corporation.
</Table>
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
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 DIRECTORS (THE "BOARD")
OF
CASH RESERVE PORTFOLIO
(A PORTFOLIO OF TAX-FREE INVESTMENTS CO.)
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 Tax-Free Investments Co., each
of whom will serve until his or her successor is elected and qualified: WITHHOLD
FOR AUTHORITY FOR ALL
01 Bob R. Baker 05 Albert R. Dowden 09 Robert H. Graham 13 Ruth H. Quigley ALL FOR ALL NOMINEES EXCEPT
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
</Table>
TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "FOR ALL
EXCEPT" BOX AND WRITE THE NOMINEE'S NUMBER ON THE LINE PROVIDED.
- --------------------------------------------------------------------------------
<Table>
2. Approve an Agreement and Plan of Reorganization which provides for the FOR AGAINST ABSTAIN
redomestication of Tax-Free Investments Co. as a Delaware statutory trust [ ] [ ] [ ]
and, in connection therewith, the sale of all of Tax-Free Investments Co.'s
assets and the dissolution of Tax-Free Investments Co. as a Maryland
corporation.
</Table>
IN THE DISCRETION OF SUCH PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.