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
Commission only (as
permitted by Rule
14a-6(e)(2))
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] 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
MAY 20, 2004
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
CDC IXIS Asset Management Advisers, L.P., located at 399 Boylston Street, 10th
Floor, Boston, Massachusetts 02116, on Thursday, May 20, 2004 at 9 a.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 9,
2004 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,
JOHN E. PELLETIER, Secretary
Boston, Massachusetts
March 25, 2004
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
MAY 20, 2004
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 May
20, 2004, and any adjournment or postponement thereof (the "Meeting"). The
Meeting will be held at the offices of CDC IXIS Asset Management Advisers, L.P.,
399 Boylston Street, 10th Floor, Boston, Massachusetts 02116, on Thursday, May
20, 2004 at 9 a.m.
The Meeting is scheduled as a meeting of the respective holders of common
shares (the "Common Shareholders") and 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 March 25, 2004.
The Board of Trustees of the Fund has fixed the close of business on March
9, 2004 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 shares of common stock, $0.00001 par value per
share ("Common Shares"), and shares of preferred stock, $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 COMMON SHARES OUTSTANDING PREFERRED SHARES
3,833,389.67 1,120
The classes of stock listed above are the only classes of stock 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,
except as described below, will vote together with Common Shareholders as a
single class on the Proposal to be brought before the Meeting. Under the terms
of the Fund's Bylaws, as amended (the "Bylaws"), the holders of the Preferred
Shares are entitled as a class, to the exclusion of the holders of the Common
Shares, to elect two Trustees of the Fund (one such Trustee is identified in the
chart below). Simply stated, these Trustees are only elected by the holders of
the Fund's Preferred Shares. As summarized in the table below, (i) the Common
Shareholders and Preferred Shareholders, voting as a single class, have the
right to vote with respect to the election of Messrs. Edward A. Benjamin,
Kenneth J. Cowan and John T. Hailer as Trustees, and (ii) the Preferred
Shareholders of the Fund, voting as a separate class, have the right to vote on
the election of Mr. Daniel M. Cain as a Trustee. The Common Shareholders of the
Fund do not have the right to vote with respect to the election of Mr. Cain. The
following candidates (the "Nominees") have been nominated by the Trustees of the
Fund who are not "interested persons" (as defined in the Investment Company Act
of 1940) of the Fund.
Common Preferred
Proposal - Election of Trustees Shareholders Shareholders
-------------------------------------- ---------------- ---------------
|X| Elections of Edward A. Benjamin X X
|X| Election of Kenneth J. Cowan X X
|X| Election of John T. Hailer X X
|X| Election of Daniel M. Cain X
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 Fund's 2006 annual meeting; Class II, whose term
will expire at this Meeting; and Class III, whose term will expire at the Fund's
2005 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 II Trustees at the
Meeting for an approximate three-year term expiring at the 2007 annual meeting.
A Trustee elected at an annual meeting shall hold office until 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.
1
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 the four persons listed below for election at the Meeting. If
elected at the Meeting, they will be Class II Trustees:
CLASS II TRUSTEE EXPIRATION OF TERM
---------------------------- -------------------------
Edward A. Benjamin 2007 Annual Meeting
Kenneth J. Cowan 2007 Annual Meeting
John T. Hailer 2007 Annual Meeting
Daniel M. Cain 2007 Annual Meeting
It is currently expected that, in accordance with the Board's current
retirement policy, Mr. Cowan will retire as a Trustee prior to the December 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 (including
the Trustees who are Nominees) and the Officers of the Fund.
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
TERM OF NUMBER OF
OFFICE PORTFOLIOS IN
AND LENGTH FUND COMPLEX
POSITION(S) OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER DIRECTORSHIPS HELD BY
NAME, AGE AND ADDRESS HELD WITH FUND SERVED(1) DURING PAST 5 YEARS TRUSTEE/NOMINEE TRUSTEE/NOMINEE
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
INDEPENDENT TRUSTEES(2)
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
GRAHAM T. ALLISON, JR. (64) Trustee Since Douglas Dillon 40 Director, Taubman Centers,
399 Boylston Street inception Professor and Director Inc.; Board Member, USEC Inc.
Boston, MA 02116 Contract (October of the Belfer Center
(Class I) Review and 2002) for Science and
Governance International Affairs,
Committee John F. Kennedy School
Member of Government, Harvard
University
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
EDWARD A. BENJAMIN (65)
399 Boylston Street Trustee and Since June Retired; formerly, 40 Director, Coal, Energy
Boston, MA 02116 Nominee 2003 Partner, Ropes & Gray Investments & Management,
(Class II) (law firm) LLC; Director, Precision
Audit Optics Corporation (optics
Committee manufacturer)
Member
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
DANIEL M. CAIN (59)(3) Trustee and Since President and CEO, Cain 40 Trustee, Universal Health
452 Fifth Avenue Nominee inception Brothers & Company, Realty Income Trust;
New York, NY 10018 (October Incorporated Director, Sheridan
(Class II) Chairperson 2002) (investment banking) Healthcorp (physician
of the Audit practice management)
Committee
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
PAUL G. CHENAULT (70)
5852 Pebble Beach Way Trustee Since June Retired; Trustee, First 40 Director, Mailco Office
San Luis Obispo, CA 93401 2003 Variable Life (variable Products, Inc.
(Class I) Contract life insurance)
Review and
Governance
Committee
Member
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
KENNETH J. COWAN (71) Trustee and Since Retired 40 None
399 Boylston Street Nominee inception
Boston, MA 02116 (October
(Class II) Chairperson 2002)
of the
Contract
Review and
Governance
Committee
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
RICHARD DARMAN (60) Trustee Since Partner, The Carlyle 40 Director and Chairman, AES
399 Boylston Street inception Group (investments); Corporation (international
Boston, MA 02116 Contract (October Chairman of the Board power company)
(Class I) Review and 2002) of Directors of AES
Governance Corporation
Committee (international power
Member company); formerly,
Professor, John F.
Kennedy School of
Government, Harvard
University
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
3
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
TERM OF NUMBER OF
OFFICE PORTFOLIOS IN
AND LENGTH FUND COMPLEX
POSITION(S) OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER DIRECTORSHIPS HELD BY
NAME, AGE AND ADDRESS HELD WITH FUND SERVED(1) DURING PAST 5 YEARS TRUSTEE/NOMINEE TRUSTEE/NOMINEE
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
SANDRA O. MOOSE (62)(3) Trustee Since President, Strategic 40 Director, Verizon
399 Boylston Street inception Advisory Services Communications; Director,
Boston, MA 02116 Audit (October (management Rohm and Haas Company
(Class III) Committee 2002) consulting); formerly, (specialty chemicals)
Member Senior Vice President
and Director, The
Boston Consulting
Group, Inc. (management
consulting)
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
JOHN A. SHANE (71) Trustee Since President, Palmer 40 Director, Gensym
200 Unicorn Park Drive inception Service Corporation Corporation; Director,
Woburn, MA 01801 Contract (October (venture capital Overland Storage, Inc.;
(Class III) Review and 2002) organization) Director, Abt Associates Inc.
Governance
Committee
Member
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
INTERESTED TRUSTEES(2)
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
ROBERT J. BLANDING (56)
555 California Street Trustee Since June President, Chairman, 40 None
San Francisco, CA 94104 2003 Director and Chief
(Class I) Executive Officer,
Loomis, Sayles &
Company, L.P.
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
4
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
JOHN T. HAILER (43)(4) President and Since President and Chief 40 None
399 Boylston Street Chief inception Executive Officer, CDC
Boston, MA 02116 Executive (October IXIS Asset Management
(Class II) Officer 2002) Distributors, L.P.
Trustee and
Nominee
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
PETER S. VOSS (57)(5) Chairman of Since Director, President and 40 Trustee, Harris Associates
399 Boylston Street the Board inception Chief Executive Investment Trust(6)
Boston, MA 02116 (October Officer, CDC IXIS Asset
(Class III) Trustee 2002) Management North
America, L.P.
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
OFFICERS
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
JAMES J. FINNEGAN (43) Chief Since General Counsel, N/A N/A
399 Boylston Street Operating inception Managing Director, Vice
Boston, MA 02116 Officer (October President and Clerk,
2002) AEW Management and
Advisors, L.P.; General
Counsel and Principal,
formerly, Assistant
General Counsel and
Vice President, AEW
Capital Management,
L.P.; Managing Director
and Vice President, AEW
Advisors, Inc.; Vice
President and Assistant
Clerk, AEW Investment
Group, Inc.; Vice
President and Assistant
Clerk, AEW Real Estate
Advisors, Inc.
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
FRANK A. LOPICCOLO (50) Anti-Money Since Senior Vice President, N/A N/A
399 Boylston Street Laundering February CDC IXIS Asset
Boston, MA 02116 Officer 2003 Management Services,
Inc.
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
NICHOLAS H. PALMERINO (39) Treasurer Since Senior Vice President, N/A N/A
399 Boylston Street and February CDC IXIS Asset
Boston, MA 02116 Principal 2003 Management Services,
Financial Inc.; Senior Vice
and President, CDC IXIS
Accounting Asset Management
Officer Advisers, L.P.;
formerly, Vice
President, Loomis,
Sayles & Company, L.P.
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
JOHN E. PELLETIER (39) Secretary, Since Senior Vice President, N/A N/A
399 Boylston Street Clerk and inception General Counsel,
Boston, MA 02116 Chief Legal (October Secretary and Clerk,
Officer 2002) CDC IXIS Asset
Management Distribution
Corporation; Senior
Vice President, General
Counsel, Secretary and
Clerk, CDC IXIS Asset
Management
Distributors, L.P.;
Senior Vice President,
General Counsel,
Secretary and Clerk,
CDC IXIS Asset
Management Advisers,
L.P.; Executive Vice
President, General
Counsel, Secretary,
Clerk, and Director,
CDC IXIS Asset
Management Services,
Inc.
----------------------------- --------------- ------------- ------------------------- ---------------- -----------------------------
5
(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, Mr.
Cowan will retire as a Trustee prior to the 2007 Annual Meeting. The current
retirement age is 72. 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) For purposes of this Proxy Statement, the term "Independent Trustees" means
those Trustees who are not "interested persons" (as defined in the Investment
Company Act of 1940) of the Fund, and the term "Interested Trustees" means those
Trustees who are "interested persons" of the Fund.
(3) 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 Investment Company Act of
1940, Preferred Shareholders may under certain circumstances elect a majority of
the Board of Trustees.
(4) 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 CDC IXIS Asset Management Distribution Corporation ("CDC IXIS
Distribution Corporation"); and President and Chief Executive Officer of CDC
IXIS Asset Management Advisers, L.P. ("CDC IXIS Advisers").
(5) Mr. Voss is an "interested person" of the Fund because he holds the
following positions with affiliated persons of the Fund or its investment
adviser: Director of CDC IXIS Asset Management Services, Inc.; Director of CDC
IXIS Distribution Corporation; Director and Chairman of CDC IXIS Asset
Management Associates, Inc.; Director of AEW Capital Management, Inc.; Director
of Harris Associates, Inc.; Director of Loomis, Sayles & Company, Inc.; Director
of Reich & Tang Asset Management Inc.; Director of Westpeak Global Advisors,
Inc.; and Director of Vaughan Nelson Investment Management, Inc.
(6) As of December 31, 2003, Harris Associates Investment Trust had seven series
that were overseen by its Board of Trustees.
The following table states the dollar range of equity securities
beneficially owned as of March 1, 2004 by each Trustee 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 SECURITIES IN THE FUND(1) TRUSTEE IN FAMILY OF INVESTMENT COMPANIES(1),(2)
INDEPENDENT TRUSTEES
Graham T. Allison Jr. A E
Edward A. Benjamin A A
Daniel M. Cain A A
Paul G. Chenault A A
Kenneth J. Cowan A C
Richard Darman A B
Sandra O. Moose A A
John A. Shane A A
INTERESTED TRUSTEES
Robert J. Blanding A A
John T. Hailer A A
Peter S. Voss A E
(1) A. None
B. $1 - $10,000
C. $10,001 - $50,000
D. $50,001 - $100,000
E. over $100,000
6
(2) Includes amounts payable by the investment companies under deferred
compensation plans as of March 1, 2004. These amounts fluctuate with changes in
the value of a hypothetical investment in investment companies shares of
compensation the Trustee has elected to defer.
The Fund pays no compensation to its Officers or to its Interested
Trustees. Each other Trustee of the Fund receives a fee of $2,000 annually for
serving as a Trustee of the Fund, and a fee of $375 and related expenses for
each meeting of the Board of Trustees attended. Each Committee member receives a
fee of $2,000 annually for Committee service, and will also receive a meeting
fee of $200 for each additional meeting after the first four meetings of a
Committee during a given year. In addition, the Chairpersons of the Contract
Review and Governance and Audit Committees each receive an additional fee of
$1,000 per year.
During the Fund's fiscal year ended January 31, 2004, the Trustees of the
Fund received the amounts set forth in the following table for serving as
trustees of the Fund, CDC Nvest Funds Trust I, CDC Nvest Funds Trust II, CDC
Nvest Funds Trust III, CDC Nvest Companies Trust I, CDC Nvest Cash Management
Trust, Loomis Sayles Funds I and Loomis Sayles Funds II (collectively, the
"Complex").
PENSION OR
COMPENSATION FROM RETIREMENT ESTIMATED
THE FUND FOR THE BENEFITS ANNUAL TOTAL
FISCAL YEAR ACCRUED AS BENEFITS COMPENSATION FROM
ENDING PART OF FUND UPON THE COMPLEX PAID
NAME OF TRUSTEE JANUARY 31, 2004 EXPENSES* RETIREMENT* TO TRUSTEES(1),(2)
--------------- ---------------- -------- ---------- ----------------
INDEPENDENT TRUSTEES
--------------------
Graham T. Allison, Jr. $5,875 $0 $0 $82,125
Edward A. Benjamin $4,275 $0 $0 $56,775
Daniel M. Cain $8,142 $0 $0 $98,142
Paul G. Chenault $3,208 $0 $0 $46,958
Kenneth J. Cowan $6,875 $0 $0 $88,125
Richard Darman $5,750 $0 $0 $80,500
Sandra O. Moose $7,142 $0 $0 $92,142
John A. Shane $5,700 $0 $0 $81,950
INTERESTED TRUSTEES
Robert J. Blanding $0 $0 $0 $0
John T. Hailer $0 $0 $0 $0
Peter S. Voss $0 $0 $0 $0
(1) The Fund provides no pension or retirement benefits to its Trustees. CDC
Nvest Funds Trust I, CDC Nvest Funds Trust II, CDC Nvest Funds Trust III, CDC
Nvest Companies Trust I, CDC Nvest Cash Management Trust, Loomis Sayles Funds I
and Loomis Sayles Funds II (collectively, the "CDC Nvest and Loomis Sayles
Trusts") have adopted a deferred payment arrangement under which each Trustee
may elect not to receive fees from the CDC Nvest 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
CDC Nvest and Loomis Sayles Trusts selected by the Trustee on a normal payment
date for such fees. As a result of this arrangement, the CDC Nvest 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 during 2003 to a Trustee for
serving on the board of trustees of 7 trusts with a total of 40 funds as of
January 31, 2004. Amounts include payments deferred by Trustees.
7
BOARD COMMITTEES AND MEETINGS
CONTRACT REVIEW AND GOVERNANCE COMMITTEE. The Committee is comprised solely of
Independent Trustees and considers matters relating to advisory, subadvisory and
distribution arrangements, potential conflicts of interest between the
investment adviser and the Fund, governance matters relating to the Fund and the
effect on Common Shares of the use of leveraging through the issuance of the
Preferred Shares. The Committee also makes nominations for Trustee membership
when necessary. The Board has adopted a written charter for its Contract Review
and Governance Committee, a copy of which is included as APPENDIX A.
The 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 2005 Annual Meeting." Any such
recommendations must be sent to the address indicated below under
"Communications with the Board."
The Committee has not established specific, minimum qualifications that
must be met by an individual to be recommended by the Committee for nomination
as an Independent Trustee. When nominating an individual to fill a vacancy on
the Fund's Board, the Committee may seek referrals from a variety of sources,
including current Trustees, management of the Fund, and counsel to the Trustees.
In evaluating nominees for a position on the Board, the Committee may consider a
variety of factors, including (i) the nominee's knowledge in matters relating to
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) such other factors as the
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 Committee may conduct personal interviews
with the nominees 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.
AUDIT COMMITTEE. The 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. This
Committee also reviews and monitors compliance with stated investment objectives
and policies and certain Securities and Exchange Commission and Treasury
8
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 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 18, 2004, is
attached to this Proxy Statement as APPENDIX C.
BOARD AND COMMITTEE MEETINGS. During the Fund's fiscal year ended January 31,
2004, the Board held five meetings, the Contract Review and Governance Committee
held five meetings and the Audit Committee held eleven meetings. The Trustees
are not required to attend annual shareholder meetings. None of the Trustees
attended the 2003 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 John E. Pelletier, Secretary, CDC
IXIS Asset Management Services, Inc., 399 Boylston Street, Boston, Massachusetts
02116. The written communication must be signed by the shareholder and include
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 as provided below, 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).
9
REQUIRED VOTE. Election of each of Messrs. Benjamin, Cowan and Hailer 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 (voting together
as a single class) cast in the election of Trustees at the Meeting, in person or
by proxy. Election of Mr. Cain to the Board of Trustees of the Fund will require
the affirmative vote of a plurality of the votes of the Preferred Shareholders
(voting as a separate 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 THIS
PROPOSAL FOR EACH OF THE FOUR NOMINEES FOR TRUSTEE.
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
INVESTMENT MANAGER. AEW Management and Advisors, L.P. (the "Investment
Manager"), located at Two Seaport Lane, World Trade Center East, Boston,
Massachusetts 02210, serves as investment adviser of the Fund.
TRANSFER AGENT, AUCTION AGENT, CUSTODIAN AND ADMINISTRATOR. EquiServe Trust
Company, N.A., located at 150 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. Investors Bank & Trust Company, located at 200 Clarendon Street, Boston,
Massachusetts 02116, serves as custodian of the Fund's investments. CDC IXIS
Asset Management Services, Inc., located at 399 Boylston Street, Boston,
Massachusetts, 02116, serves as administrator to the Fund.
INDEPENDENT AUDITORS. PricewaterhouseCoopers LLP ("PwC"), located at 125 High
Street, Boston, Massachusetts 02110, has been selected by the Board as the
independent auditors of the Fund for the current fiscal year ending January 31,
2005.
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.
10
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, 2003 and January 31, 2004.
AUDIT-RELATED
AUDIT FEES FEES (1) TAX FEES (2) ALL OTHER FEES
--------------- --------------- -------------- ---------------
--------------- --------------- -------------- ---------------
2003 $24,500 $9,500 $7,000 $0
2004 $20,000 $14,000 $7,000 $0
(1) Fees associated with the following audit-related services:
YEAR ENDED JANUARY 31, 2003
o $4,500 - Review and consent related to preferred offering for the Fund.
o $5,000 - Rating agency agreed-upon procedures report for the Fund.
YEAR ENDED JANUARY 31, 2004
o $4,000 - July 31, 2003 SAS 100 review procedures performed for the Fund.
o $10,000 - Rating agency agreed-upon procedures reports for the Fund.
(2) Fees for years ended January 31, 2004 and 2003 are for tax services for the
Fund.
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 rendered to 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 maximum fees that can be paid for each
service without further approval 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 maximum
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,
11
the entire Audit Committee is authorized to 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 waived 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, 2003 and January 31, 2004.
NON-AUDIT FEES
--------------------
2003 $200,500
2004 $216,500
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 Investment Company Act
of 1940 require the Fund's Trustees and Officers and certain other persons to
file timely 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. Based solely upon a review
of copies of such reports furnished to the Fund, the Fund believes Initial
Statements of Beneficial Ownership on Form 3 may not have been filed on a timely
basis for Mr. Jeffrey Caira, an employee of the Investment Manager. Mr. Caira
did not own or dispose of shares of the Fund during the reporting period.
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 therefor) may solicit proxies by telephone, mail, email and
personal interviews. In addition, D.F. King & Co., 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 $3,000 in the aggregate, plus out-of-pocket
expenses.
12
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 all the Nominees. They will vote
against any such adjournment those proxies required to be voted against any of
the Nominees and will not vote any proxies that direct them to abstain from
voting on the election of 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 the proposal 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, neither abstentions nor broker non-votes
have any effect on the outcome of the election.
SHAREHOLDER REPORTS. The Fund's annual report to shareholders for the fiscal
year ended January 31, 2004 is included with this proxy statement. Additional
copies of the Fund's annual report 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.
SHAREHOLDER PROPOSALS FOR 2005 ANNUAL MEETING. It is currently anticipated that
the Fund's next annual meeting of Shareholders will be held in May 2005.
Shareholders submitting any proposals for the Fund intended to be presented at
the 2005 annual meeting must ensure that such proposals are received by the
Fund, in good order and in compliance with all applicable legal requirements and
the requirements of the Fund's Bylaws, no later than February 9, 2005 and not
earlier than January 25, 2005. 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 Securities Act of 1933 must submit their
proposal so that it is received by the Fund no later than December 2, 2004. 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 Securities Act of 1933. Shareholder
proposals should be addressed to the attention of the Secretary of the Fund.
13
SIGNIFICANT SHAREHOLDERS. As of March 9, 2004, the following shareholders
benefically or of record owned 5% or more of the outstanding shares of the noted
class of the Fund:
PERCENTAGE
NUMBER OF OF SHARES
TITLE OF CLASS NAME AND ADDRESS OF RECORD OWNER SHARES OWNED OWNED
COMMON SHARES
Cede & Co.(1) (2) 3,822,633 99.72%
55 Water Street, 25th Floor
New York, New York 10041-0001
PREFERRED SHARES
Fleet National Bank(1) (3) 600 53.57%
111 Westminster Street
Providence, RI 02993
Merrill Lynch Government Securities Inc.(1) (3) 347 30.98%
World Financial Center North
250 Vesey Street
New York, NY 10281
Wachovia Securities, LLC(1) (3) 172 15.36%
901 East Byrd Street
Mail Code WS2031
Richmond, VA 23219
(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 Investment Company Act of 1940.
(2) A nominee for participants in the Depository Trust Company.
(3) Shares held at the Depository Trust Company.
As of March 9, 2004, the Trustees and Officers of the Fund as a group
beneficially owned less than one percent (1%) of the Fund's outstanding Common
Shares and Preferred Shares.
14
APPENDIX A
Contract Review & Governance Committee
of
CDC Nvest Funds Trust I
CDC Nvest Funds Trust II
CDC Nvest Funds Trust III
CDC Nvest Cash Management Trust
CDC Nvest Companies Trust I
AEW Real Estate Income Fund
Loomis Sayles Funds I
Loomis Sayles Funds II
CHARTER
1) The Contract Review & Governance Committee (the "Committee") of CDC Nvest
Funds Trust I, CDC Nvest Funds Trust II, CDC Nvest Funds Trust III, CDC
Nvest Cash Management Trust, CDC Nvest Companies Trust I, 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, if any, of the AEW Real Estate
Income 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 AEW Real Estate Income
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.
A-1
b) Governance Matters:
i) The Committee shall make nominations for independent trustee
membership on the Board of Trustees when necessary;
ii) The Committee shall periodically review board governance
practices and procedures and shall recommend any appropriate
changes to the full board;
iii) The Committee shall periodically 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 periodically 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
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; and
c) The Committee shall review this charter at least annually and
recommend any changes to the full board.
A-2
APPENDIX B
Audit Committee
of
CDC Nvest Funds Trust I
CDC Nvest Funds Trust II
CDC Nvest Funds Trust III
CDC Nvest Cash Management Trust
CDC Nvest Companies Trust I
AEW Real Estate Income Fund
Loomis Sayles Funds I
Loomis Sayles Funds II
CHARTER
1) The Audit Committee (the "Committee") of CDC Nvest Funds Trust I, CDC Nvest
Funds Trust II, CDC Nvest Funds Trust III, CDC Nvest Cash Management Trust,
CDC Nvest Companies Trust I, 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;
B-1
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 in order to conduct
such Committee business and report to the full Board of Trustees at
their next regularly scheduled meeting or sooner; and
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,
B-2
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) 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;
B-3
(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-4
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 accountants, the matters required to
be discussed by 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 (Independence Discussions 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, 2004 for filing with the Securities and Exchange Commission.
Edward A. Benjamin
Daniel M. Cain
Sandra O. Moose
C-1
RIFPROXY-0304
COMMON SHAREHOLDERS
AEW LOGO
C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
[X] Please mark votes as in this example.
1. Election of trustees.
Nominees: (01) Mr. Edward A. Benjamin
(02) Mr. Kenneth J. Cowan
(03) Mr. John T. Hailer
FOR ALL NOMINEES [ ] [ ] WITHHELD FROM ALL NOMINEES
[ ] --------------------------------------------------
(To withhold authority for a nominee, check this box and list the names of such
nominee(s) on the line above. Your shares will be voted for the remaining
nominees.)
Mark box at right if you plan to attend the Annual Meeting. [ ]
Mark box at right if an address change or comment has been noted on the
reverse side of this card. [ ]
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: _____________ Date: _______ Signature: ______________ Date: _________
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
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
MAY 20, 2004
The undersigned hereby appoints John E. Pelletier, Nicholas H. Palmerino and
Coleen Downs Dinneen, and each of them separately, will 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 CDC IXIS Asset Management Advisers, L.P., 399
Boylston Street, 10th Floor, Boston, MA 02116, at 9:00 a.m., on Thursday, May
20, 2004, 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.
--------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
------------------------- --------------------------
------------------------- --------------------------
------------------------- --------------------------
PREFERRED SHAREHOLDERS
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
[X] Please mark votes as in this example.
1. Election of trustees.
Nominees: (01) Mr. Edward A. Benjamin
(02) Mr. Kenneth J. Cowan
(03) Mr. John T. Hailer
(04) Mr. Daniel M. Cain
FOR ALL NOMINEES [ ] [ ] WITHHELD FROM ALL NOMINEES
[ ] --------------------------------------------------
(To withhold authority for a nominee, check this box and list the names of such
nominee(s) on the line above. Your shares will be voted for the remaining
nominees.)
Mark box at right if you plan to attend the Annual Meeting. [ ]
Mark box at right if an address change or comment has been noted on
the reverse side of this card. [ ]
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: ______________ Date: _____ Signature: _______________ Date: _________
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
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
MAY 20, 2004
The undersigned hereby appoints John E. Pelletier, Nicholas H. Palmerino and
Coleen Downs Dinneen, and each of them separately, will 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 CDC IXIS Asset Management Advisers, L.P., 399
Boylston Street, 10th Floor, Boston, MA 02116, at 9:00 a.m., on Thursday, May
20, 2004, 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.
--------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
AEW REAL ESTATE INCOME FUND
March 25, 2004
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: AEW REAL ESTATE INCOME FUND
(File Nos.: 333-102009 and 811-21206)
Dear Sir or Madam:
Conveyed herewith pursuant to Rule 14a-6(b) under the Securities Exchange
Act of 1934 and Rule 101(a)(1)(iii) of Regulation S-T for use in connection with
an annual meeting of shareholders of the AEW Real Estate Income Fund is the
definitive proxy statement.
The annual meeting of shareholders, scheduled for May 20, 2004, is being
called for the purpose of submitting one proposal to shareholders that relates
to the annual election of trustees of the AEW Real Estate Income Fund.
The Fund expects to begin mailing the proxy materials to shareholders on or
about March 25, 2004.
Please direct any comments you may have to me at 617-449-2810 or my
colleague, Rachel Downey, at 617-449-2815. Thank you for your attention to this
matter.
Sincerely,
/S/ COLEEN DOWNS DINNEEN
Coleen Downs Dinneen
Assistant Secretary