SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
[X] Definitive proxy statement. Commission only (as permitted by Rule
[ ] Definitive additional materials. 14a-6(e)(2))
[ ] Soliciting material under
rule 14a-12
AEW Real Estate Income Fund
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (check the appropriate box): [X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
--------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------------------------
AEW Real Estate Income Fund
399 Boylston Street
Boston, Massachusetts 02116
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 14, 2006
To the Shareholders of the AEW Real Estate Income Fund:
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of the AEW Real Estate Income Fund (the "Fund") will be held at the
offices of IXIS Asset Management Advisors, L.P., located at 399 Boylston
Street, 4th Floor, Boston, Massachusetts 02116, on Wednesday, June 14, 2006 at
2 p.m., for the following purposes:
1. To elect four Trustees of the Fund, each to hold office for the term
indicated and until their successors shall have been elected and qualified;
and
2. To transact such other business as may properly come before the Meeting or
any adjournments or postponements thereof.
The Board of Trustees of the Fund has fixed the close of business on
March 31, 2006 as the record date for the determination of shareholders
entitled to notice of, and to vote at, the Meeting or any postponement or
adjournment thereof. The enclosed proxy is being solicited on behalf of the
Board of Trustees of the Fund.
By order of the Board of Trustees,
Coleen Downs Dinneen,
Secretary
Boston, Massachusetts
April 28, 2006
It is important that your shares be represented at the Meeting in person or by
proxy, no matter how many shares you own. If you do not expect to attend the
Meeting, please complete, date, sign and return the applicable enclosed proxy
or proxies in the accompanying envelope, which requires no postage if mailed in
the United States. Please mark and mail your proxy or proxies promptly in order
to save the Fund any additional costs of further proxy solicitations and in
order for the Meeting to be held as scheduled.
AEW REAL ESTATE INCOME FUND
399 Boylston Street
Boston, Massachusetts 02116
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
June 14, 2006
Introduction
This Proxy Statement is furnished in connection with the solicitation by the
Board of Trustees (the "Board") of AEW Real Estate Income Fund (the "Fund") of
a proxy to be voted at the Annual Meeting of Shareholders to be held on
June 14, 2006, and any adjournment or postponement thereof (the "Meeting"). The
Meeting will be held at the offices of IXIS Asset Management Advisors, L.P.,
399 Boylston Street, 4th Floor, Boston, Massachusetts 02116, on Wednesday,
June 14, 2006 at 2 p.m.
The Meeting is scheduled as a meeting of the respective holders of common
shares (the "Common Shareholders") and Series M Auction Market Preferred Shares
(the "Preferred Shareholders" and, together with Common Shareholders, the
"Shareholders") of the Fund because the Shareholders of the Fund are expected
to consider and vote on similar matters.
The Notice of Annual Meeting of Shareholders (the "Notice"), this Proxy
Statement and the enclosed Proxy Card are first being sent to Shareholders on
or about April 28, 2006.
The Board of Trustees of the Fund has fixed the close of business on
March 31, 2006 as the record date (the "Record Date") for the determination of
Shareholders of the Fund entitled to notice of, and to vote at, the Meeting,
and any postponement or adjournment thereof. Shareholders of the Fund on the
Record Date will be entitled to one vote for each share held, and a fractional
vote with respect to fractional shares, on each matter to which they are
entitled to vote and that is to be voted on, with no cumulative voting rights.
The following table sets forth the number of common shares of beneficial
interest, $0.00001 par value per share ("Common Shares"), and Series M Auction
Market Preferred Shares, $0.00001 par value per share ("Preferred Shares" and,
together with the Common Shares, the "Shares"), of the Fund issued and
outstanding at the close of business on the Record Date:
Outstanding Preferred
Outstanding Common Shares Shares
3,833,389.67 1,120
The classes of shares listed above are the only classes of shares currently
authorized by the Fund.
At the Meeting, Preferred Shareholders of the Fund will have equal voting
rights (i.e., one vote per Share) with the Fund's Common Shareholders and will
vote together with Common Shareholders as a single class on the Proposal to be
brought before the Meeting. As summarized in the table below, the Common
Shareholders and Preferred Shareholders, voting as a single class, have the
right to vote with respect to the election of four Trustees at the Meeting. The
following table shows the candidates (the "Nominees"), each of whom has been
nominated by the Trustees of the Fund who are not "interested persons" (as
defined in the Investment Company Act of 1940 (the "1940 Act")) of the Fund.
Common Shareholders and
Preferred Shareholders,
Proposal--Election of Trustees Voting Together
------------------------------ -----------------------
Election of Graham T. Allison, Jr. X
Election of Robert Blanding....... X
Election of Paul Chenault......... X
Election of Richard Darman........ X
1
You may vote by mailing the enclosed proxy card. Shares represented by duly
executed and timely proxies will be voted as instructed on the proxy. If you
mail the enclosed proxy and no choice is indicated for the Proposal listed in
the attached Notice, your proxy will be voted in favor of the election of all
Nominees. At any time before it has been voted, your proxy may be revoked in
one of the following ways: (i) by sending a signed, written letter of
revocation to the Secretary of the Fund, (ii) by properly executing a
later-dated proxy or (iii) by attending the Meeting, requesting the return of
any previously delivered proxy and voting in person.
I. PROPOSAL: ELECTION OF TRUSTEES
In accordance with the Fund's Amended and Restated Agreement and Declaration
of Trust dated as of October 10, 2002 (the "Declaration"), the Trustees are
divided into the following three classes (each a "Class"): Class I, whose term
will expire at the conclusion of this Meeting; Class II, whose term will expire
at the conclusion of the Fund's 2007 annual meeting; and Class III, whose term
will expire at the conclusion of the Fund's 2008 annual meeting. At each annual
meeting, successors to the Class of Trustees whose term expires at that annual
meeting shall be elected for a three-year term. Accordingly, shareholders will
vote to elect Class I Trustees at the Meeting for an approximate three-year
term expiring at the 2009 annual meeting. A Trustee elected at an annual
meeting shall hold office until the conclusion of the annual meeting for the
year in which his or her term expires and until his or her successor shall be
elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office.
Under this classified Board structure, generally only those Trustees in a
single Class may be replaced at any one annual meeting, and it would require a
minimum of two annual meetings to change a majority of the Board under normal
circumstances. This structure, which may be regarded as an "anti-takeover"
provision, may make it more difficult for the Fund's Shareholders to change the
majority of Trustees of the Fund and, thus, promotes the continuity of current
management.
The Board, upon recommendation of its Contract Review and Governance
Committee, which makes nominations for Trustee membership, approved the
nomination of Messrs. Allison, Blanding, Chenault and Darman for election at
the Meeting. If elected at the Meeting, they will be Class I Trustees.
All nominees named above are Trustees of the Fund. Messrs. Allison and
Darman have served in that capacity continuously since originally elected or
appointed in 2002. Messrs. Blanding and Chenault have served in that capacity
continuously since originally appointed in 2003.
It is currently expected that, in accordance with the Board's current
retirement policy, Mr. Chenault will retire prior to the 2007 Annual Meeting.
Unless authority is withheld, it is the intention of the persons named in
the enclosed proxy to vote each proxy for the persons listed above. Each of the
Nominees has indicated he will serve if elected, but if he should be unable to
serve for the Fund, the proxy holders may vote in favor of such substitute
nominee as the Board may designate (or the Board may determine to leave a
vacancy). A Trustee elected by the Board to fill any vacancy occurring in the
Board of Trustees shall serve until the next annual meeting of shareholders and
until his or her successor shall be elected and shall qualify, subject,
however, to the Trustee's prior death, resignation, retirement,
disqualification or removal from office. Any Trustee elected by shareholders to
fill a vacancy that has arisen since the preceding annual meeting of
shareholders (whether or not any such vacancy has been filled by election of a
new Trustee by the Board) shall hold office for a term that coincides with the
remaining term of the Class of Trustees to which such office was previously
assigned, if such vacancy arose other than by an increase in the number of
Trustees, and until his or her successor shall be elected and shall qualify.
2
Information Regarding Trustees, Nominees and Officers
The following table provides information concerning the Trustees, the
Nominees for election as Trustees and the Officers of the Fund. Unless
otherwise indicated, the address of all persons below is 399 Boylston Street,
Boston, MA 02116.
------------------------------------------------------------------------------------------------------------
Position(s) Held with the Number of Portfolios in
Fund, Length of Time Fund Complex
Served and Term of Principal Occupation(s) Overseen/(3)/ and Other
Name and Date of Birth Office/(1)/ During Past 5 Years/(2)/ Directorships Held
------------------------------------------------------------------------------------------------------------
Independent Trustees/(4)/
------------------------------------------------------------------------------------------------------------
Graham T. Allison, Jr. Trustee since 2002 and Douglas Dillon Professor 38; Director, Taubman
(3/23/40) Nominee, Contract and Director of the Belfer Centers, Inc. (real estate
(Class I) Review and Governance Center of Science for investment trust)
Committee Member International Affairs, John
F. Kennedy School of
Government, Harvard
University
------------------------------------------------------------------------------------------------------------
Charles D. Baker Trustee since 2005, President and Chief 38; None
(11/13/56) Contract Review and Executive Officer,
(Class III) Governance Committee Harvard Pilgrim Health
Member Care (health plan)
------------------------------------------------------------------------------------------------------------
Edward A. Benjamin Trustee since 2003, Retired 38; Director, Precision
(5/30/38) Contract Review and Optics Corporation (optics
(Class II) Governance Committee manufacturer)
Member
------------------------------------------------------------------------------------------------------------
Daniel M. Cain* Trustee since 2002, President and Chief 38; Director, Sheridan
(2/24/45) Chairman of the Audit Executive Officer, Cain Healthcare, Inc. (physician
(Class II) Committee Brothers & Company, practice management)
Incorporated (investment
banking)
------------------------------------------------------------------------------------------------------------
Paul G. Chenault Trustee since 2003 and Retired; Trustee, First 38; Director, Mailco
(9/12/33) Nominee, Contract Variable Life (variable life Office Products, Inc.
(Class I) Review and Governance insurance) (mailing equipment)
Committee Member
------------------------------------------------------------------------------------------------------------
Kenneth J. Cowan Trustee since 2002, Retired 38; None
(4/5/32) Chairman of the Contract
(Class II) Review and Governance
Committee
------------------------------------------------------------------------------------------------------------
Richard Darman Trustee since 2002 and Partner, The Carlyle 38; Director and Chairman
(5/10/43) Nominee, Contract Group (investments); of Board of Directors,
(Class I) Review and Governance formerly, Professor, John AES Corporation
Committee Member F. Kennedy School of (international power
Government, Harvard company)
University
------------------------------------------------------------------------------------------------------------
Sandra O. Moose* Chairperson of the Board President, Strategic 38; Director, Verizon
(2/17/42) of Trustees since Advisory Services Communications;
(Class III) November 2005, Trustee (management consulting); Director, Rohm and Haas
since 2002, ex officio formerly, Senior Vice Company (specialty
member of each of the President and Director, chemicals); Director, AES
Audit Committee and The Boston Consulting Corporation
Contract Review and Group, Inc. (management
Governance Committee consulting)
------------------------------------------------------------------------------------------------------------
3
---------------------------------------------------------------------------------------------------------
Position(s) Held with the Number of Portfolios in
Fund, Length of Time Fund Complex
Served and Term of Principal Occupation(s) Overseen/(3)/ and Other
Name and Date of Birth Office/(1)/ During Past 5 Years/(2)/ Directorships Held
---------------------------------------------------------------------------------------------------------
John A. Shane Trustee since 2002, Audit President, Palmer Service 38; Director, Gensym
(2/22/33) Committee Member Corporation (venture Corporation (software and
(Class III) capital organization) technology service
provider); Director and
Chairman of the Board,
Abt Associates Inc.
(research and consulting
firm)
---------------------------------------------------------------------------------------------------------
Cynthia L. Walker Trustee since 2005, Audit Executive Dean for 38; None
(7/25/56) Committee Member Administration (formerly,
(Class III) Dean for Finance and
CFO), Harvard Medical
School
---------------------------------------------------------------------------------------------------------
Interested Trustees
---------------------------------------------------------------------------------------------------------
Robert J. Blanding/(5)/ Trustee since 2003 and President, Chairman, 38; None
(4/14/47) Nominee Director and Chief
555 California Street Executive Officer,
San Francisco, CA 94104 Loomis, Sayles &
(Class I) Company, L.P.; President
and Chief Executive
Officer--Loomis Sayles
Funds I; Chief Executive
Officer--Loomis Sayles
Funds II
---------------------------------------------------------------------------------------------------------
John T. Hailer/(6)/ Trustee since 2002, President and Chief 38; None
(11/23/60) President and Chief Executive Officer, IXIS
(Class II) Executive Officer Asset Management
Advisors, L.P. and IXIS
Asset Management
Distributors, L.P.;
Executive Vice President,
Loomis Sayles Funds I;
President--Loomis Sayles
Funds II; President and
Chief Executive Officer,
IXIS Advisor Funds
Trusts I, II, III and IV and
IXIS Advisor Cash
Management Trust
---------------------------------------------------------------------------------------------------------
Officers
---------------------------------------------------------------------------------------------------------
Coleen Downs Dinneen Secretary, Clerk and Chief Senior Vice President, Not Applicable
(12/16/60) Legal Officer, since 2004 General Counsel,
Secretary and Clerk
(formerly, Deputy General
Counsel, Assistant
Secretary and Assistant
Clerk), IXIS Asset
Management Distribution
Corporation, IXIS Asset
Management Distributors,
L.P., IXIS Asset
Management Advisors,
L.P.
---------------------------------------------------------------------------------------------------------
4
---------------------------------------------------------------------------------------------------
Position(s) Held with the Number of Portfolios in
Fund, Length of Time Fund Complex
Served and Term of Principal Occupation(s) Overseen/(3)/ and Other
Name and Date of Birth Office/(1)/ During Past 5 Years/(2)/ Directorships Held
---------------------------------------------------------------------------------------------------
James J. Finnegan Executive Vice President, General Counsel, Not Applicable
(4/29/60) since 2004 Managing Director, Vice
Two Seaport Lane President and Clerk, AEW
Boston, MA 02110 Management and
Advisors, L.P.; General
Counsel and Vice
President, AEW Capital
Management, L.P.; Vice
President and Assistant
Clerk, AEW Investment
Group, Inc.; Vice
President and Assistant
Clerk, AEW Real Estate
Advisors, Inc.
---------------------------------------------------------------------------------------------------
Michael C. Kardok Treasurer, Principal Senior Vice President, Not Applicable
(7/17/59) Financial and Accounting IXIS Asset Management
Officer, since 2004 Advisors, L.P. and IXIS
Asset Management
Distributors, L.P.;
formerly, Senior Director,
PFPC Inc; formerly, Vice
President--Division
Manager, First Data
Investor Services, Inc.
---------------------------------------------------------------------------------------------------
Max J. Mahoney Anti-Money Laundering Senior Vice President, Not Applicable
(5/1/62) Officer and Assistant Deputy General Counsel,
Secretary, since 2005 Assistant Secretary and
Assistant Clerk, IXIS
Asset Management
Distribution Corporation,
IXIS Asset Management
Distributors, L.P. and
IXIS Asset Management
Advisors, L.P.; Chief
Compliance Officer, IXIS
Asset Management
Advisors, L.P.; formerly,
Senior Counsel, MetLife,
Inc.; formerly, Associate
Counsel, LPL Financial
Services, Inc.
---------------------------------------------------------------------------------------------------
5
---------------------------------------------------------------------------------------------------
Position(s) Held with the Number of Portfolios in
Fund, Length of Time Fund Complex
Served and Term of Principal Occupation(s) Overseen/(3)/ and Other
Name and Date of Birth Office/(1)/ During Past 5 Years/(2)/ Directorships Held
---------------------------------------------------------------------------------------------------
John E. Pelletier Chief Operating Officer, Executive Vice President Not Applicable
(6/24/64) since 2004 and Chief Operating
Officer (formerly, Senior
Vice President, General
Counsel, Secretary and
Clerk), IXIS Asset
Management Distributors,
L.P. and IXIS Asset
Management Advisors,
L.P.; Executive Vice
President and Chief
Operating Officer
(formerly, Senior Vice
President, General
Counsel, Secretary and
Clerk), IXIS Asset
Management Distribution
Corporation; Executive
Vice President, Chief
Operating Officer and
Director (formerly,
President, Chief Operating
Officer and Director),
IXIS Asset Management
Services Company
---------------------------------------------------------------------------------------------------
Russell L. Kane Chief Compliance Officer Associate General Not Applicable
(7/23/69) of the Fund since 2006, Counsel, Assistant
Assistant Secretary Secretary and Assistant
since 2004 Clerk, IXIS Asset
Management Distributors,
L.P. and IXIS Asset
Management
Advisors, L.P.; Vice
President, Associate
General Counsel,
Assistant Secretary and
Assistant Clerk, IXIS
Asset Management
Distribution Corporation;
formerly, Interim Chief
Compliance Officer of the
Fund; formerly, Senior
Counsel, Columbia
Management Group.
/(1)/As described above, the Trustees are divided into three Classes and serve
staggered three-year terms, subject to their prior death, retirement,
resignation, disqualification or removal from the Board. It is currently
expected that, in accordance with the Board's current retirement policy,
Messrs. Chenault and Cowan will retire as Trustees prior to the 2007
Annual Meeting. The current retirement age is 72, but the retirement
policy was suspended for the remainder of calendar year 2005. At a meeting
held on August 26, 2005, the Trustees voted to lift the suspension of the
retirement policy and to designate 2006 as a transition period so that any
Trustees who are currently age 72 or older or who reach age 72 during the
remainder of 2005 or in 2006 will not be required to retire until the end
of calendar year 2006. The position of Chairperson of the Board is
appointed for a two-year term. Officers hold office at the pleasure of the
Fund's Board and until their successors are appointed and qualified or
until their earlier resignation or removal.
/(2)/Previous positions during the past five years with IXIS Asset Management
Distributors, L.P. (the "Distributor"), IXIS Asset Management Advisors,
L.P. or Loomis, Sayles & Company, L.P. are omitted if not materially
different from a Trustee's or officer's current position with such entity.
As indicated, each Trustee is also a trustee of certain other investment
companies for which the Distributor acts as principal underwriter.
6
/(3)/The Trustees of the Fund serve as Trustees of a fund complex that includes
all series of IXIS Advisor Funds Trust I, IXIS Advisor Funds Trust II,
IXIS Advisor Funds Trust III, IXIS Advisor Funds Trust IV, IXIS Advisor
Cash Management Trust, Loomis Sayles Funds I and Loomis Sayles Funds II.
/(4)/For purposes of this Proxy Statement, the term "Independent Trustees"
means those Trustees who are not "interested persons" (as defined in the
1940 Act) of the Fund, and the term "Interested Trustees" means those
Trustees who are "interested persons" of the Fund.
/(5)/Mr. Blanding is deemed an "interested person" of the Fund because he holds
the following positions with affiliated persons of the Fund: President,
Chairman, Director and Chief Executive Officer of Loomis, Sayles &
Company, L.P.
/(6)/Mr. Hailer is an "interested person" of the Fund because he holds the
following positions with affiliated persons of the Fund: Director and
Executive Vice President of IXIS Asset Management Distribution
Corporation; and President and Chief Executive Officer of IXIS Asset
Management Advisors, L.P. and IXIS Asset Management Distributors, L.P.
* The holders of the Fund's Preferred Shares are entitled to elect two
Trustees. Mr. Cain and Ms. Moose are elected by the Preferred Shareholders.
The remaining Trustees are elected by holders of Common Shares and Preferred
Shares, voting together as a single class. As required by the 1940 Act,
Preferred Shareholders may under certain circumstances elect a majority of
the Board of Trustees. Neither Mr. Cain nor Ms. Moose are nominees for
re-election at the Meeting; their terms run through the Fund's Annual
Meetings in 2007 and 2008, respectively.
The following table states the dollar range of equity securities
beneficially owned as of March 31, 2006 by each Trustee/Nominee of the Fund
and, on an aggregate basis, in any registered investment companies overseen or
to be overseen by the Trustee/Nominee in the Fund's "family of investment
companies."*
Aggregate Dollar Range of Equity Securities in All
Dollar Range of Equity Registered Investment Companies Overseen by
Name of Trustee or Nominee Securities in the Fund/(1)/ Trustee in Family of Investment Companies/(1),(2)/
-------------------------- -------------------------- --------------------------------------------------
Independent Trustees/Nominees
Graham T. Allison Jr......... A E
Charles D. Baker............. A A
Edward A. Benjamin........... A A
Daniel M. Cain............... A A
Paul G. Chenault............. A A
Kenneth J. Cowan............. A B
Richard Darman............... A A
Sandra O. Moose.............. A A
John A. Shane................ A E
Cynthia L. Walker............ A A
Interested Trustees
Robert J. Blanding........... A A
John T. Hailer............... A A
--------
* The "family of investment companies," as defined under the 1940 Act,
includes the Fund and the AEW Real Estate Fund.
/(1)/A. None
B. $1-$10,000
C. $10,001-$50,000
D. $50,001-$100,000
E. over $100,000
/(2)/Includes notional value of shares in which the Trustees are deemed to hold
an interest through the deferred compensation plan.
The Fund does not pay any compensation to its Officers or to its Interested
Trustees. Each Independent Trustee (other than the Chairperson) receives a
retainer fee at the annual rate of $2,000, and a fee of $375 and related
expenses for each meeting of the Board of Trustees attended. The Chairperson of
the Board receives an additional annual retainer fee of $200,000 for serving as
Chairperson of the Board of Trustees of the Fund Complex (as defined below).
The Chairperson does not receive any meeting attendance fees for Board of
Trustees meetings or committee meetings that she attends. Each committee member
receives an additional retainer fee at the annual rate of $2,000 while each
committee chairman receives a retainer fee at the annual rate of $3,000. The
retainer fees
7
assume four Board or Committee meetings per year. Trustees are compensated for
each additional Board or Committee meeting in excess of four meetings per year
at the rate of $375 and $200, respectively.
During the Fund's fiscal year ended January 31, 2006, the Trustees of the
Fund received the amounts set forth in the following table for serving as
Trustees of the Fund, IXIS Advisor Funds Trust I, IXIS Advisor Funds Trust II,
IXIS Advisor Funds Trust III, IXIS Advisor Funds Trust IV, IXIS Advisor Cash
Management Trust, Loomis Sayles Funds I and Loomis Sayles Funds II
(collectively, the "Fund Complex").
Aggregate Pension or
Compensation Retirement Estimated Total
from the Fund for Benefits Annual Compensation
the Fiscal Year Accrued as Benefits from the Fund
Ending Part of Fund upon Complex Paid to
Name of Trustee January 31, 2006 Expenses Retirement Trustees/(1),(2)/
--------------- ----------------- ------------ ---------- ----------------
Independent Trustees
Graham T. Allison, Jr. $5,700 $0 $0 $105,700
Charles D. Baker/(3)/. $2,750 $0 $0 $ 47,750
Edward A. Benjamin.... $5,700 $0 $0 $ 98,200
Daniel M. Cain........ $6,700 $0 $0 $158,950
Paul G. Chenault...... $5,700 $0 $0 $105,700
Kenneth J. Cowan...... $6,700 $0 $0 $164,450
Richard Darman........ $5,700 $0 $0 $105,700
Sandra O. Moose....... $5,325 $0 $0 $107,551
John A. Shane......... $5,700 $0 $0 $105,700
Cynthia L. Walker/(3)/ $2,750 $0 $0 $ 49,750
Interested Trustees
Robert J. Blanding.... $ 0 $0 $0 $ 0
John T. Hailer........ $ 0 $0 $0 $ 0
--------
/(1)/The Fund does not provide pension or retirement benefits to its Trustees.
IXIS Advisor Funds Trust I, IXIS Advisor Funds Trust II, IXIS Advisor
Funds Trust III, IXIS Advisor Funds Trust IV, IXIS Advisor Cash Management
Trust, Loomis Sayles Funds I and Loomis Sayles Funds II (collectively, the
"IXIS Advisor and Loomis Sayles Trusts") have adopted a deferred payment
arrangement under which each Trustee may elect not to receive fees from
the IXIS Advisor and Loomis Sayles Trusts on a current basis but to
receive in a subsequent period an amount equal to the value such fees
would have been if they had been invested in a series or series of the
IXIS Advisor and Loomis Sayles Trusts selected by the Trustee on a normal
payment date for such fees. As a result of this arrangement, the IXIS
Advisor and Loomis Sayles Trusts, upon making the deferred payments, will
be in substantially the same financial position as if the deferred fees
had been paid on the normal payment dates and immediately reinvested in
shares of the series selected by the Trustees.
/(2)/Total Compensation represents amounts paid for the fiscal year ended
January 31, 2006 to a Trustee for serving on the board of trustees of 8
trusts. As of January 31, 2006, the 8 trusts had a total of 38 funds.
Amounts include payments deferred by Trustees.
/(3)/Mr. Baker and Ms. Walker were elected as Trustees of the Fund on June 15,
2005.
Board Committees and Meetings
Contract Review and Governance Committee (the "Governance Committee"). The
Governance Committee is comprised solely of Independent Trustees and considers
matters relating to advisory arrangements, potential conflicts of interest
between the investment adviser and the Fund, governance matters relating to the
Fund and the effect of the use of leveraging on Common Shares through the
issuance of the Preferred Shares. The Governance Committee also reviews and
recommends to the Independent Trustees potential candidates for Trustee
membership when necessary. The Board has adopted a written charter for the
Governance Committee, a copy of which is included as Appendix A.
8
The Governance Committee will, when a vacancy on the Board of the Fund
exists or is anticipated, consider any candidate for Independent Trustee
recommended by a shareholder of the Fund if such recommendation contains
sufficient background information concerning the candidate to enable a proper
judgment to be made as to the candidate's qualifications, and the
recommendation is received in writing no later than the date specified for
receipt of shareholder proposals, as set forth below under "Shareholder
Proposals for 2007 Annual Meeting." Any such recommendations must be sent to
the address indicated below under "Communications with the Board."
The Governance Committee has not established specific, minimum
qualifications that must be met by an individual to be recommended by the
Governance Committee for nomination as an Independent Trustee. When identifying
an individual to potentially fill a vacancy on the Fund's Board, the Governance
Committee may seek referrals from a variety of sources, including current
Trustees, management of the Fund, and counsel to the Trustees. In evaluating
candidates for a position on the Board, the Governance Committee may consider a
variety of factors, including (i) the candidate's knowledge of the mutual fund
industry; (ii) any experience possessed by the candidate as a director or
senior officer of other public companies; (iii) the candidate's educational
background; (iv) the candidate's reputation for high ethical standards and
personal and professional integrity; (v) any specific financial, technical or
other expertise possessed by the candidate, and the extent to which such
expertise would complement the Board's existing mix of skills and
qualifications; (vi) the candidate's perceived ability to contribute to the
ongoing functions of the Board, including the candidate's ability and
commitment to attend meetings regularly and work collaboratively with other
members of the Board; (vii) the candidate's ability to qualify as an
Independent Trustee for purposes of applicable regulations; and (viii) such
other factors as the Governance Committee determines to be relevant in light of
the existing composition of the Board and any anticipated vacancies or other
transitions. Prior to making a final recommendation to the Board, the
Governance Committee may conduct personal interviews with the candidates it
concludes are the most qualified candidates. Any individuals recommended by
shareholders will be evaluated in the same manner as individuals brought to the
Board's attention in some other manner. A shareholder recommendation of a
candidate for Independent Trustee shall be kept on file and considered by the
Board for six (6) months from the date of receipt after which the shareholder
recommendation shall be considered stale and discarded.
The Governance Committee recommended for approval all nominees for Trustee
and the Independent Trustees unanimously nominated each nominee for the
position of Trustee.
Audit Committee. The Audit Committee is comprised solely of Independent
Trustees and considers matters relating to the scope and results of the Fund's
audits and serves as a forum in which the Fund's independent accountants can
raise any issues or problems identified in the audit with the Board of
Trustees. The Audit Committee also reviews and monitors compliance with stated
investment objectives and policies and certain Securities and Exchange
Commission (the "SEC") and Treasury regulations as well as operational issues
relating to the transfer agent, auction agent, administrator, sub-administrator
and custodian and the Preferred Shares. In addition, the Audit Committee
implements procedures for receipt, retention and treatment of complaints
received by the Fund regarding its accounting, internal accounting controls and
the confidential, anonymous submission by officers of the Fund or employees of
certain service providers of concerns related to such matters.
The Board of Trustees has determined that each member of the Audit Committee
is "independent" under the listing standards of the American Stock Exchange, on
which the Common Shares of the Fund are listed. The Board has adopted a written
charter for its Audit Committee, a copy of which is included as Appendix B. A
report of the Audit Committee, dated March 22, 2006, is attached to this Proxy
Statement as Appendix C.
9
Committee Membership. The current membership of each committee is as
follows:
Audit Committee Contract Review and Governance Committee
Daniel M. Cain--Chairman Kenneth J. Cowan--Chairman
John A. Shane Graham T. Allison, Jr.
Cynthia L. Walker Charles D. Baker
Edward A. Benjamin
Paul G. Chenault
Richard Darman
As Chairperson of the Board of Trustees, Ms. Moose is an ex officio member
of both Committees.
Board and Committee Meetings. During the Fund's fiscal year ended
January 31, 2006, the Board held five (5) meetings, the Contract Review and
Governance Committee held six (6) meetings and the Audit Committee held six
(6) meetings. The Trustees are not required to attend annual shareholder
meetings. None of the Trustees attended the 2005 Annual Meeting of Shareholders.
Communications with the Board. Shareholders may mail written communications
to the Board of Trustees, addressed as follows: To the Attention of the Board
of Trustees of AEW Real Estate Income Fund, c/o Secretary of the Fund, IXIS
Asset Management Advisors, L.P., 399 Boylston Street, Boston, Massachusetts
02116. Shareholders may also email communications to the Board of Trustees to
secretaryofthefunds@ixisag.com, provided however that communications regarding
recommendations for Trustee candidates may not be submitted by email. This
written communication must (i) be signed by the shareholder, (ii) include the
name and address of the shareholder, (iii) identify that the communication
relates to the Fund, and (iv) identify the account number, class and number of
shares held by the shareholder as of a recent date or the intermediary through
which the shares are held. The Secretary is responsible for collecting,
reviewing and organizing all properly submitted shareholder communications.
Except with respect to shareholder recommendations for candidates for
Independent Trustee, the Secretary shall either (i) provide a copy of each
properly submitted shareholder communications to the appropriate Committee of
the Board, as determined by the Secretary, at the next regularly scheduled
Board meeting or (ii) if the Secretary determines that the communication
requires more immediate attention, forward the communication to the appropriate
Board Committee promptly after receipt; in either case, the Secretary may also
provide, in addition to such shareholder communication, a proposed response to
such communication. The Secretary may, in good faith, determine that a
shareholder communication should not be provided to the Board because it does
not reasonably relate to the Fund or its operations, management, activities,
policies, service providers, Board, officers, shareholders or other matters
relating to an investment in the Fund or is otherwise ministerial in nature
(such as a request for Fund literature, share data or financial information).
These procedures shall not apply to (i) any communication from an officer or
Trustee of the Fund, (ii) any communication from an employee or agent (for
example, an employee of the Fund's investment advisor, administrator,
custodian, distributor and transfer agent) of the Fund, unless such
communication is made solely in such employee's or agent's capacity as a
shareholder, or (iii) any shareholder proposal submitted pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, as amended, or any communication
made in connection with such a proposal (i.e., shareholder proxy proposals).
Required Vote. Re-election of Messrs. Allison and Darman and election of
Messrs. Blanding and Chenault to the Board of Trustees of the Fund will require
the affirmative vote of a plurality of the votes of Common Shareholders and
Preferred Shareholders of the Fund (voting together as a single class) cast in
the election of Trustees at the Meeting, in person or by proxy.
THE BOARD OF TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR EACH
OF THE FOUR NOMINEES FOR TRUSTEE.
10
II. OTHER BUSINESS
As of the date of this Proxy Statement, the only business that management of
the Fund intends to present or knows that others will present is the election
of four Trustees of the Fund. If any other matters properly come before the
Meeting, and on all matters incidental to the conduct of the Meeting, the
persons named as proxies intend to vote in accordance with their judgment,
unless the Secretary of the Fund has previously received written contrary
instructions from the Shareholder entitled to vote the Shares.
III. ADDITIONAL INFORMATION
Shareholder Reports. The Fund's annual report to shareholders for the
fiscal year ended January 31, 2006 may be obtained without charge from the Fund
by calling 1-800-862-4863 or by writing to the Fund at 399 Boylston Street,
Boston, Massachusetts 02116.
Investment Manager. AEW Management and Advisors, L.P. (the "Investment
Manager"), located at World Trade Center East, Two Seaport Lane, Boston,
Massachusetts 02210, serves as investment adviser of the Fund.
Transfer Agent, Auction Agent, Custodian and Administrator. Computershare
Investor Services, located at 250 Royall Street, Canton, Massachusetts 02021,
serves as the transfer agent, dividend disbursing agent and registrar of the
Fund's Common Shares. Deutsche Bank Trust Company Americas, located at 280 Park
Avenue, New York, New York 10017, serves as the auction agent for the Fund's
Preferred Shares. State Street Bank & Trust Company, located at One Lincoln
Street, Boston, Massachusetts, 02111, serves as custodian of the Fund's
investments. IXIS Asset Management Advisors, L.P., located at 399 Boylston
Street, Boston, Massachusetts, 02116, serves as administrator to the Fund.
Independent Registered Public Accounting Firm. PricewaterhouseCoopers LLP
("PwC"), located at 125 High Street, Boston, Massachusetts 02110, has been
selected by the Board as the independent registered public accounting firm of
the Fund for the current fiscal year ending January 31, 2007.
A representative of PwC, if requested by any Shareholder at a reasonable
time before the Meeting, will be present via telephone at the Meeting to
respond to appropriate questions from Shareholders and will have an opportunity
to make a statement if he or she chooses to do so.
The following table sets forth the aggregate fees billed for professional
services rendered by PwC to the Fund in each of the last two fiscal years ended
January 31, 2005 and January 31, 2006. This table lists only the fees paid by
the Fund; the aggregate Audit, Audit-Related and Tax Fees payable in respect of
the funds comprising the Fund's "Fund Complex" (defined above) are
significantly greater.
Audit- All
Audit Related Tax Other
Fees Fees/(1)/ Fees/(2)/ Fees
------- -------- -------- -----
2005.......................... $20,000 $10,000 $1,250 $0
2006.......................... $24,400 $ 7,900 $1,316 $0
--------
/(1)/Fees associated with the following audit-related services:
Year ended January 31, 2005
. $5,000--July 31, 2004 SAS 100 review procedures performed
for the Fund.
. $5,000--Rating agency agreed-upon procedures reports for
the Fund.
Year ended January 31, 2006
. $5,000--Rating agency agreed-upon procedures reports for
the Fund.
. $2,900--Agreed-upon procedures related to a change in the
Fund's custodian.
/(2)/Fees for years ended January 31, 2005 and 2006 are for the
review of year-end shareholder reporting information.
11
On an annual basis, the Treasurer of the Fund submits to the Audit Committee
information on the audit, audit-related, tax and other non-audit services to be
provided to the Fund, the Adviser or the adviser's affiliates that provide
ongoing services to the Fund if such services relate directly to the operation
of the Fund that require pre-approval by the Audit Committee. This information
provides a description of each type of service that is expected to require
pre-approval, the estimated fees expected to be paid for each service and the
rationale for engaging the independent auditor to perform each service. The
Audit Committee reviews and approves these services and reviews the projected
fees for the next calendar year.
A report is provided to the Audit Committee at regularly scheduled,
quarterly Audit Committee meetings containing a summary of the services
provided during the prior quarter and the level of fees associated with those
services. Any subsequent revisions to already pre-approved services or fees
(including fee increases) are also presented for consideration at the quarterly
meetings as needed. If subsequent to the annual pre-approval of services by the
Audit Committee, the Fund or one of its affiliates determine that they would
like to engage the Fund's independent auditors to perform a service not already
pre-approved, the Fund or such affiliate submits a request to the Treasurer. If
the Treasurer determines that the service fits within the independence
guidelines (e.g., it is not a prohibited service), the Treasurer will arrange
for a discussion of the service to be included on the agenda for the next
regularly scheduled Audit Committee meeting so that pre-approval can be
considered.
If, in the opinion of the Treasurer of the Fund, a proposed engagement needs
to commence before the next regularly scheduled Audit Committee meeting, the
Treasurer shall submit a written summary of the proposed engagement to all
members of the Audit Committee outlining the services, the estimated cost, the
category of the services (e.g., audit, audit-related, tax or other) and the
rationale for engaging the independent auditor to perform the services.
Pursuant to procedures approved by the Board, to the extent the proposed
engagement involves audit, audit-related or tax services, any one individual
member of the Audit Committee who is an Independent Trustee is authorized under
these procedures to pre-approve the engagement. To the extent the proposed
engagement involves non-audit services other than audit, audit-related or tax,
the entire Audit Committee must pre-approve the engagement. The Treasurer will
arrange for this interim review and coordinate with the appropriate member(s)
of the Audit Committee. An independent auditor must not commence the engagement
under consideration until the Treasurer has indicated that the requisite
approval has been obtained. The member of the Audit Committee who pre-approves
any engagements between regularly scheduled Audit Committee meetings must
report, for informational purposes only, any such pre-approval decisions to the
Audit Committee at its next regularly scheduled meeting. The percentage of
"Audit-Related Fees," "Tax Fees" and "All Other Fees" set forth in the table
above that were not pre-approved pursuant to 17 CFR 210.2-01(c)(7)(i)(C) was
zero.
The following table sets forth the aggregate fees billed for non-audit
services rendered by PwC to the Fund and to the Investment Manager, and any
other entity controlling, controlled by or under common control with the
Investment Manager that provides services to the Fund during each of the last
two fiscal years ended January 31, 2005 and January 31, 2006.
Non-Audit
Fees
---------
2005.......................... $191,250
2006.......................... $153,060
In approving the selection of PwC, the Audit Committee considered, in
addition to other practices and requirements relating to the selection of the
Fund's auditors, whether PwC's provision of the non-audit services covered in
the table above under "Non-Audit Fees" for the Fund, the Investment Manager and
for certain related other parties are compatible with maintaining the
independence of PwC as the Fund's principal accountants. Please refer to the
Audit Committee Report in Appendix C to this Proxy Statement.
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of
the Securities Exchange Act of 1934 and Section 30(f) of the 1940 Act require
the Fund's Trustees and Officers and certain other persons
12
to file within certain designated time periods certain reports regarding
ownership of, and transactions in, the Fund's securities with the Securities
and Exchange Commission. Copies of the required filings must also be furnished
to the Fund.
Information About Proxies
Solicitation of Proxies and Costs of Solicitation. Proxies will be
solicited primarily by mailing this Proxy Statement and its enclosures. The
cost of soliciting proxies for the Fund will be borne by the Fund. In addition,
certain officers of the Fund and certain officers and employees of the
Investment Manager or its affiliates (none of whom will receive additional
compensation therefore) may solicit proxies by telephone, mail, email and
personal interviews. In addition, Computershare Investor Services, Inc. may be
engaged to assist in the solicitation of proxies, the cost of which will be
borne by the Fund and is estimated to be approximately $1,500 in the aggregate,
plus out-of-pocket expenses.
Quorum, Adjournments and Methods of Tabulation. A quorum for the Fund at
the Meeting will consist of the presence in person or by proxy of thirty three
and 1/3 percent (33 1/3%) of the total Shares of the Fund entitled to vote at
the Meeting. In the event that a quorum is not present at the Meeting for the
Fund or, even if a quorum is so present, in the event that sufficient votes to
elect all the Nominees are not received by the time scheduled for the Meeting,
the persons named as proxies may propose one or more adjournments of the
Meeting with no other notice than announcement at the Meeting, to permit
further solicitation of proxies with respect to the Proposal. In addition, if,
in the judgment of the persons named as proxies, it is advisable to defer
action on the Proposal, the persons named as proxies may propose one or more
adjournments of the Meeting with respect to the Proposal for a reasonable time.
Any adjournments will be decided by a plurality of the Shares entitled to vote
present in person or represented by proxy at the session of the Meeting to be
adjourned. The persons named as proxies will vote in favor of such adjournment
those proxies which they are entitled to vote in favor of any of the Nominees.
They will vote against any such adjournment those proxies required to be voted
against all of the Nominees and will not vote any proxies that withhold
authority to vote on the election of all the Nominees. The costs of any
additional solicitation and of any adjourned session will be borne by the Fund.
Votes cast by proxy or in person at the Meeting will be counted by persons
appointed by the Fund as tellers (the "Tellers") for the Meeting. The Tellers
will count the total number of votes cast "for" approval of each nominee for
purposes of determining whether sufficient affirmative votes have been cast.
The Tellers will count shares represented by proxies that reflect abstentions
and "broker non-votes" (i.e., shares held by brokers or nominees as to which
(i) instructions have not been received from the beneficial owners or the
persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on a particular matter) as shares that are present
and entitled to vote on the matter for purposes of determining the presence of
a quorum. With respect to the election of Trustees, assuming a quorum is
present, neither abstentions nor broker non-votes have any effect on the
outcome of the election.
Shareholder Proposals for 2007 Annual Meeting. It is currently anticipated
that the Fund's next annual meeting of Shareholders will be held in June 2007.
Under the Fund's Bylaws, shareholders submitting any proposals for the Fund
intended to be presented at the 2007 annual meeting must ensure that such
proposals are received by the Fund, in good order and in compliance with all
applicable legal requirements, no later than March 14, 2007 and not earlier
than February 28, 2007. Shareholders who wish for the Fund to include a
proposal in the proxy statement for next year's annual meeting of shareholders
pursuant to Rule 14a-8 under the Exchange Act of 1934 must submit their
proposal so that it is received by the Fund no later than December 29, 2006.
The submission by a Shareholder of a proposal for inclusion in the proxy
materials does not guarantee that it will be included. Shareholder proposals
are subject to certain requirements under the federal securities laws and must
be submitted in accordance with the Fund's Bylaws and the Exchange Act of 1934.
Shareholder proposals should be addressed to the attention of the Secretary of
the Fund.
13
Significant Shareholders. As of March 31, 2006, the following shareholders
beneficially or of record owned 5% or more of the outstanding shares of the
noted class of the Fund:
Number of Percentage
Shares of Shares of
Title of Class Name and Address of Record Owner Owned Class Owned
-------------- -------------------------------- ------------ ------------
Common Shares
Cede & Co./(1) (2)/ 3,820,473.00 99.66%
c/o Depository Trust Company
Box 20
New York, NY 10004-9998
Preferred Shares
First Clearing, LLC/(1)(3)/ 421 37.59%
10700 Wheat First Drive
WS 1195
Glen Allen, VA 23060
JP Morgan Chase Bank/Correspondence Clearing Services/(1)(3)/ 120 10.71%
Proxy Services
14201 Dallas Parkway, Suite 121
Dallas, TX 75254
Merrill Lynch, Pierce, Fenner & Smith Safekeeping/(1)(3)/ 209 18.66%
101 Hudson Street, 8/th/ Floor
Jersey City, NJ 07302
Merrill Lynch, Pierce, Fenner & Smith Incorporated/(1)(3)/ 146 13.04%
101 Hudson Street, 9/th/ Floor
Jersey City, NJ 07302
National Financial Services LLC/(1)(3)/ 151 13.48%
200 Liberty Street
New York, NY 10281
Wells Fargo Brokerage Services, LLC/(1)(3)/ 67 5.98%
608 Second Avenue South, 5/th/ Floor
Minneapolis, MN 55479
--------
/(1)/Such ownership may be beneficially held by individuals or entities other
than the owner listed. To the extent that any listed shareholder
beneficially owns more than 25% of the Fund, it may be deemed to "control"
the Fund within the meaning of the 1940 Act.
/(2)/A nominee for participants in the Depository Trust Company.
/(3)/Shares held at the Depository Trust Company.
Ownership of Shares by Management. As of March 31, 2006, none of the
Trustees/Nominees and Executive Officers of the Fund owned any of the Fund's
outstanding Common Shares or Preferred Shares.
14
Appendix A
Contract Review & Governance Committee
of
IXIS Advisor Funds Trust I
IXIS Advisor Funds Trust II
IXIS Advisor Funds Trust III
IXIS Advisor Cash Management Trust
IXIS Advisor Funds Trust IV
AEW Real Estate Income Fund
Loomis Sayles Funds I
Loomis Sayles Funds II
CHARTER
1) The Contract Review & Governance Committee (the "Committee") of IXIS
Advisor Funds Trust I, IXIS Advisor Funds Trust II, IXIS Advisor Funds Trust
III, IXIS Advisor Cash Management Trust, IXIS Advisor Funds Trust IV, AEW Real
Estate Income Fund, Loomis Sayles Funds I and Loomis Sayles Funds II (the
"Trusts") shall be composed entirely of independent trustees.
2) The purposes of the Committee are:
a) Contract Review Matters:
i) To request and evaluate such information as may reasonably be
necessary to evaluate the terms of the advisory agreements, subadvisory
agreements, distribution agreements and related distribution plans
pursuant to Rule 12b-1 relating to the funds in each Trust on an annual
basis and as needed throughout the year;
ii) To monitor the performance of the advisers and oversee the
performance of the subadvisers to the funds in each Trust on a quarterly
and annual basis, and as needed throughout the year;
iii) To monitor the discount or premium, if any, of the closed end
fund's market price on the American Stock Exchange to its net asset
value;
iv) To monitor the effect of the use of leveraging (through the
issuance of preferred shares) of the closed-end fund on common share
total return;
v) To hold scheduled meetings on a regular basis in order to conduct
such Committee business and report to the full Board of Trustees at
their next regularly scheduled meeting or sooner; and
vi) To submit minutes of such meetings to the full Board on a regular
basis.
b) Governance Matters:
i) The Committee (or a subcommittee established by the Board) shall
make and consider nominations for independent trustee membership on the
Board of Trustees when necessary, pursuant to the procedures set forth
in Appendix A hereto;
ii) The Committee shall, at least annually, review board governance
practices and procedures and shall recommend any appropriate changes to
the full board;
iii) The Committee shall review the composition of the board to
determine whether it may be appropriate to add individuals with
different backgrounds or skill sets from those already on the board;
iv) The Committee shall, at least annually, review trustee
compensation and shall recommend any appropriate changes to the
independent trustees;
v) The Committee shall review committee assignments on an annual
basis; and
A-1
vi) The Committee shall review as necessary the responsibilities of
each committee of the Board, whether there is continuing need for each
committee, whether there is a need for additional committees of the
Board, and whether committees should be combined or reorganized. The
Committee shall make recommendations for any such action to the full
board.
3) Other Powers and Responsibilities:
a) The Committee shall monitor the performance of legal counsel employed
by the Trusts and the independent trustees, and shall be responsible for the
supervision of counsel for the independent trustees;
b) The Committee shall have the resources and authority appropriate to
discharge its responsibilities, including authority to retain special
counsel and other experts or consultants at the expense of the appropriate
Trust;
c) when appropriate the Committee shall review potential conflict of
interest situations; and
d) The Committee shall review this charter at least annually and
recommend any changes to the full board.
--------------------------------------------------------------------------------
Appendix A--Procedures with Respect to Nominees to the Board
I. Identification of Candidates. When a vacancy on the Board of the Trusts
exists or is anticipated, the Committee may make nominations for Trustee
membership. When nominating an individual to fill a vacancy on the Trust's
Board, the Committee may seek referrals from a variety of sources, including
current Trustees, management of the Funds, Funds counsel and counsel to the
Independent Trustees, and shareholders of a Fund who submit recommendations
in accordance with these procedures. The Committee has not established
specific, minimum qualifications that must be met by an individual in order
for such person to be considered by the Committee for nomination as an
Independent Trustee.
II.Shareholder Candidates. Except as provided below, the Committee also shall
consider any candidate for Independent Trustee recommended by a shareholder
of a Trust if such recommendation contains sufficient background information
concerning the candidate to enable a proper judgment to be made as to the
candidate's qualifications, and the recommendation is received in a
sufficiently timely manner (and in any event no later than the date
specified for receipt of shareholder proposals in any applicable proxy
statement with respect to a Fund). Shareholders shall be directed to address
any such recommendations to the attention of the Board of Trustees, c/o
Secretary of the Trust. Such requirements may be contained in a Trust's
Declaration of Trust or Bylaws. For example, the Bylaws of the AEW Real
Estate Income Fund contain detailed requirements that must be met by
shareholders submitting Trustee candidates. In such case, any shareholder
nominations must meet such requirements in order to be considered. A
recommendation from a shareholder shall be kept on file and considered by
the Board for six (6) months from the date of receipt, after which the
recommendation shall be considered stale and discarded.
III.Evaluation of Candidates. In evaluating nominees for a position on the
Board, the Committee may consider any factors it deems appropriate,
including, without limitation, (i) the nominee's knowledge of the mutual
fund industry; (ii) any experience possessed by the nominee as a director
or senior officer of other public companies; (iii) the nominee's
educational background; (iv) the nominee's reputation for high ethical
standards and personal and professional integrity; (v) any specific
financial, technical or other expertise possessed by the nominee, and the
extent to which such expertise would complement the Board's existing mix of
skills and qualifications; (vi) the nominee's perceived ability to
contribute to the ongoing functions of the Board, including the nominee's
ability and commitment to attend meetings regularly and work
collaboratively with other members of the Board; (vii) the nominee's
ability to qualify as an Independent Trustee for purposes of applicable
regulations; and (viii) the existing composition of the Board and any
anticipated vacancies or other transitions. Any individuals recommended by
shareholders will be evaluated in the same manner as individuals brought to
the Board's attention in some other manner.
A-2
Appendix B
Audit Committee
of
IXIS Advisor Funds Trust I
IXIS Advisor Funds Trust II
IXIS Advisor Funds Trust III
IXIS Advisor Funds Trust IV
IXIS Advisor Cash Management Trust
AEW Real Estate Income Fund
Loomis Sayles Funds I
Loomis Sayles Funds II
CHARTER
1) The Audit Committee (the "Committee") of IXIS Advisor Funds Trust I, IXIS
Advisor Funds Trust II, IXIS Advisor Funds Trust III, IXIS Advisor Cash
Management Trust, IXIS Advisor Funds Trust IV, AEW Real Estate Income Fund,
Loomis Sayles Funds I and Loomis Sayles Funds II (the "Trusts"):
a) shall be composed entirely of trustees who are not "interested
persons" (as defined for purposes of the Investment Company Act of 1940) of
the Trusts; and
b) with respect to the Audit Committee of the AEW Real Estate Income Fund
only:
i) shall be composed entirely of trustees who (i) meet the
independence standards set forth in Section 121(A) of the American Stock
Exchange Company Guide (Listing Standards, Policies and Requirements)
(the "AMEX Guide") and any additional or different independence
standards adopted by the American Stock Exchange to implement the
standards set forth in Rule 10A-3 under the Securities Exchange Act of
1934 and (ii) the financial literacy requirements set forth in the first
sentence of Section 121(B)(a)(ii) of the AMEX Guide; and
ii) shall include at least one trustee who meets the financial
sophistication and experience requirements set forth in
Section 121(B)(a)(ii) of the AMEX Guide.
2) The purposes of the Committee are:
a) to oversee the Trusts' accounting and financial reporting policies and
practices, its internal controls and, as appropriate, the internal controls
of certain service providers;
b) to oversee the quality and objectivity of the Trusts' financial
statements and the independent audit thereof;
c) to review such aspects of the operations of the Trusts as the
Committee or the full Board of Trustees shall deem appropriate;
d) to act as liaison between the Trusts' independent auditors and the
full Board of Trustees;
e) to review operational issues relating to the preferred shares of the
AEW Real Estate Income Fund, including performance by the auction agent of
its duties in connection with the auctions;
f) to oversee any issues in connection with the AEW Real Estate Income
Fund's implementation of a managed dividend policy;
g) to oversee, pursuant to Section 307 of the Sarbanes-Oxley Act of 2002,
the Funds' "reporting up" compliance process for attorneys appearing and
practicing before the Securities and Exchange Commission in the
representation of the Funds, as such process is implemented by the Funds'
Chief Legal Officer;
h) to hold scheduled meetings on a quarterly basis, or more frequently if
the Committee determines that more frequent meetings are necessary for it to
fulfill its responsibilities, in order to conduct such Committee business
and report to the full Board of Trustees at their next regularly scheduled
meeting or sooner; and
B-1
i) to submit minutes of such meetings to the full Board of Trustees on a
regular basis.
The function of the Audit Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
control, the auditors' responsibility to plan and carry out a proper audit, and
management's and the auditors' responsibility to determine that the Trusts'
financial statements are complete and accurate and in accordance with generally
accepted accounting principles.
3) Powers and Responsibilities:
a) Audit Matters:
(1) the auditors are ultimately responsible to the Audit Committee
and, with respect to all Trusts other than the AEW Real Estate Income
Fund, the full Board of Trustees, as representatives of the Trusts'
shareholders, and the Audit Committee has the ultimate authority and
responsibility for the selection, evaluation, compensation (at the
expense of the relevant Trust(s)) and, where appropriate, replacement of
the auditors (or, if applicable, to nominate the auditors to be proposed
for shareholder approval in any proxy statement), who will report
directly to the Audit Committee, and, in connection therewith, to
evaluate the independence of the auditors, including, to the extent
required by applicable law, a review of any non-audit services provided
to any entities in the same investment company complex as the Trusts,
and to receive from the auditors a formal written statement delineating
all relationships between the auditors and the Trusts consistent with
Independence Standards Board Standard No. 1, to actively engage in a
dialogue with the auditors with respect to any disclosed relationships
or services that may impact the objectivity and independence of the
auditors, and to take, or recommend that the full Board of Trustees
take, appropriate action to oversee the independence of the auditors;
(2) to meet with the Trusts' independent auditors, including private
meetings, and to request such information as they deem appropriate in
connection therewith, as necessary to discuss the matters required to be
discussed by Statement of Auditing Standards No. 61, including without
limitation, (i) the arrangements for and scope of the annual audit and
any special audits; (ii) any matters of concern relating to the Trusts'
financial statements, including any adjustments to such statements
recommended by the auditors, or other results of said audit(s);
(iii) the auditors' comments with respect to the Trusts' financial
policies, procedures and internal accounting controls and management's
response thereto; and (iv) the form of opinion the auditors propose to
render to the Board of Trustees and shareholders;
(3) to the extent required by applicable law, to approve all audit
and non-audit services rendered to the Trusts and all non-audit services
rendered to the Trusts' investment advisers and certain of their
affiliates; provided, however, that the Audit Committee may implement
policies and procedures pursuant to which services are pre-approved
other than by the full Audit Committee, subject to the requirement that
the full Audit Committee be notified in a timely manner of each such
service;
(4) to consider the effect upon the Trusts of any changes in
accounting principles or practices proposed by management or the
auditors; to review an analysis, if any, prepared by the Trusts'
management and auditors of significant financial reporting issues and
judgments (including issues relating to the valuation of the Trusts'
portfolio securities) made in connection with the preparation of the
Trusts' financial statements; and to resolve disagreements between the
Trusts' management and the auditors regarding financial reporting;
(5) to review the fees charged by the auditors for audit and
non-audit services;
(6) to review and discuss the Trusts' financial statements with
management; and
(7) with respect to the AEW Real Estate Income Fund only, to consider
whether to recommend to the Board of Trustees that the Trusts' audited
financial statements be included in the Trusts' annual reports to
shareholders.
B-2
b) Operational Matters:
(1) to review performance of the transfer agent, sub-transfer agents,
custodian, sub-custodians and other service providers to the Trusts;
(2) to review such operational matters with respect to the advisers
and subadvisers to the Trusts as the Committee shall deem appropriate;
(3) to review the codes of ethics of the advisers and subadvisers to
the Trusts and review and evaluate reports of any violations of such
codes of ethics;
(4) to investigate any improprieties in Trust operations, including
the establishment of procedures for the receipt, retention and treatment
of complaints regarding accounting, internal accounting controls or
auditing matters, including procedures for the confidential, anonymous
submission of concerns regarding questionable accounting or auditing
matters;
(5) to review dividend and capital gain distributions;
(6) to report its activities to the full Board of Trustees on a
regular basis and to make such recommendations with respect to the above
and other matters as the Committee may deem necessary or appropriate; and
(7) to regularly meet with the Treasurer or other officers of the
Trusts, if the Committee deems such meetings are necessary;
4) Additional Powers and Responsibilities.
a) the Committee shall have the resources and authority necessary or
appropriate to discharge its responsibilities, including the authority to
retain independent counsel and other advisers, experts or consultants at the
expense of the appropriate Trust;
b) when appropriate, and to the full extent required by Section 120 of
the AMEX Guide, the Audit Committee shall review potential conflict of
interest situations; and
c) the Committee shall review this Charter at least annually and
recommend any changes to the full Board of Trustees.
B-3
Appendix C
The Audit Committee of the Board of Trustees issued the following report
concerning the financial statements for the Fund's most recent fiscal year.
The Audit Committee reviewed and discussed the audited financial statements
with Fund management. The Audit Committee also discussed with
PricewaterhouseCoopers LLP, the Fund's independent registered public
accountants, the matters required to be discussed by SAS 90 (Audit Committee
Communications), which amends SAS 61 (Communication with Audit Committees). The
Audit Committee received the written disclosures and the letter from
PricewaterhouseCoopers LLP required by Independence Standards Board Standard
No. 1 (Communications with Audit Committees), and discussed with
PricewaterhouseCoopers LLP its independence.
Based on this review and these discussions, the Audit Committee recommended
to the Board of Trustees that the audited financial statements be included in
the Fund's annual report to shareholders for the fiscal year ended January 31,
2006 for filing with the Securities and Exchange Commission.
John A. Shane
Daniel M. Cain
Cynthia L. Walker
C-1
RIFPROXY-0406
[LOGO]
MR A SAMPLE
DESIGNATION (IF ANY)
ADD 1
ADD 2
ADD 3
ADD 4
ADD 5
ADD 6
[_] Mark this box with an X if you have made
changes to your name or address details
above.
================================================================================
Annual Meeting Proxy Card
================================================================================
A Election of Directors
1. The Board of Directors recommends a vote FOR the listed nominees.
For Withhold
01 - Mr. Graham T. Allison, Jr. [_] [_]
02 - Mr. Robert Blanding [_] [_]
03 - Mr. Paul Chenault [_] [_]
04 - Mr. Richard Darman [_] [_]
[_] Mark this box with an X if you plan
to attend the Annual Meeting.
[_] Mark this box with an X if you have
made comments below.
-------------------------------------------
-------------------------------------------
-------------------------------------------
B Authorized Signatures - Sign Here - This section must be completed for your
instructions to be executed.
Please sign this proxy exactly as name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name and indicate the signer's office. If a partnership,
sign in the partnership name.
Signature 1 - Please keep signature within the box Signature 2 - Please keep
signature within the box Date (mm/dd/yyyy)
------------------------------- -------------------------------- --------
/ /
------------------------------- -------------------------------- --------
================================================================================
Proxy - AEW Real Estate Income Fund
================================================================================
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF TRUSTEES OF THE FUND
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON JUNE 14, 2006
The undersigned hereby appoints Michael Kardok, Russell Kane and Coleen Downs
Dinneen, and each of them separately, with full power of substitution, as
proxies for the undersigned, to vote, act and consent with respect to any and
all shares of AEW Real Estate Income Fund (the "Fund"), which the undersigned
is entitled to vote at the Annual Meeting of Shareholders of the Fund (the
"Meeting") to be held at IXIS Asset Management Advisors, L.P., 399 Boylston
Street, 4th Floor, Boston, MA 02116, at 2:00 p.m., on Wednesday, June 14, 2006,
and at any continuation or adjournment thereof, with all powers the undersigned
would possess if personally present, upon such business as may properly come
before the Meeting including the matters indicated on the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting. The Trustees recommend a vote
FOR each nominee.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement.
SHAREHOLDERS ARE URGED TO MARK, SIGN AND RETURN THIS PROXY IN THE ENVELOPE
PROVIDED. PLEASE DO NOT FORGET TO DATE THIS PROXY.
[LOGO]
MR A SAMPLE
DESIGNATION (IF ANY)
ADD 1
ADD 2
ADD 3
ADD 4
ADD 5
ADD 6
[_] Mark this box with an X if you have made
changes to your name or address details
above.
================================================================================
Annual Meeting Proxy Card
================================================================================
A Election of Directors
1. The Board of Directors recommends a vote FOR the listed nominees.
For Withhold
01 - Mr. Graham T. Allison, Jr. [_] [_]
02 - Mr. Robert Blanding [_] [_]
03 - Mr. Paul Chenault [_] [_]
04 - Mr. Richard Darman [_] [_]
[_] Mark this box with an X if you plan
to attend the Annual Meeting.
[_] Mark this box with an X if you have
made comments below.
-------------------------------------------
-------------------------------------------
-------------------------------------------
B Authorized Signatures - Sign Here - This section must be completed for your
instructions to be executed.
Please sign this proxy exactly as name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name and indicate the signer's office. If a partnership,
sign in the partnership name.
Signature 1 - Please keep signature within the box Signature 2 - Please keep
signature within the box Date (mm/dd/yyyy)
------------------------------- -------------------------------- --------
/ /
------------------------------- -------------------------------- --------
================================================================================
Proxy - AEW Real Estate Income Fund
================================================================================
PREFERRED SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF TRUSTEES OF THE FUND
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON JUNE 14, 2006
The undersigned hereby appoints Michael Kardok, Russell Kane and Coleen Downs
Dinneen, and each of them separately, with full power of substitution, as
proxies for the undersigned, to vote, act and consent with respect to any and
all shares of AEW Real Estate Income Fund (the "Fund"), which the undersigned
is entitled to vote at the Annual Meeting of Shareholders of the Fund (the
"Meeting") to be held at IXIS Asset Management Advisors, L.P., 399 Boylston
Street, 4th Floor, Boston, MA 02116, at 2:00 p.m., on Wednesday, June 14, 2006,
and at any continuation or adjournment thereof, with all powers the undersigned
would possess if personally present, upon such business as may properly come
before the Meeting including the matters indicated on the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting. The Trustees recommend a vote
FOR each nominee.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement.
SHAREHOLDERS ARE URGED TO MARK, SIGN AND RETURN THIS PROXY IN THE ENVELOPE
PROVIDED. PLEASE DO NOT FORGET TO DATE THIS PROXY.