<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 1, 1998
1933 ACT REGISTRATION NO. 333-30551
1940 ACT REGISTRATION NO. 811-7787
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO. 4
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 5
------------------------
AIM SERIES TRUST
(AS SUCCESSOR TO GT GLOBAL SERIES TRUST)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
50 CALIFORNIA STREET, 27TH FLOOR
SAN FRANCISCO, CALIFORNIA 94111
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(415) 392-6181
------------------------
<TABLE>
<S> <C> <C>
MICHAEL A. SILVER, ESQ. SAMUEL D. SIRKO, ESQ. ARTHUR J. BROWN, ESQ.
INVESCO (NY), INC. A I M ADVISORS, INC. R. DARRELL MOUNTS, ESQ.
50 CALIFORNIA STREET, 11 GREENWAY PLAZA, KIRKPATRICK & LOCKHART LLP
27TH FLOOR SUITE 100 1800 MASSACHUSETTS AVENUE, N.W.,
SAN FRANCISCO, CA 94111 HOUSTON, TEXAS 77046 2ND FLOOR
(NAME AND ADDRESS OF AGENT 713-626-1919 WASHINGTON, D.C. 20036
FOR SERVICE) (202) 778-9000
</TABLE>
------------------------
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:
/ / IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (b) OF RULE 485.
/X/ ON JUNE 7, 1998 PURSUANT TO PARAGRAPH (b) OF RULE 485 OR SUCH OTHER DATE
AS IT MAY BE DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE
COMMISSION.
/ / 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (a)(1) OF RULE 485.
/ / ON , 1998 PURSUANT TO PARAGRAPH (a)(1) OF RULE 485.
/ / 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (a)(2) OF RULE 485.
/ / ON PURSUANT TO PARAGRAPH (a)(2) OF RULE 485.
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
/ / THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
PURSUANT TO RULE 414 UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
BY THIS AMENDMENT TO THE REGISTRATION STATEMENT ON FORM N-1A OF GT GLOBAL SERIES
TRUST, A MASSACHUSETTS BUSINESS TRUST, THE REGISTRANT HEREBY ADOPTS THE
REGISTRATION STATEMENT OF SUCH TRUST UNDER THE SECURITIES ACT AND NOTIFICATION
OF REGISTRATION AND REGISTRATION STATEMENT OF SUCH TRUST UNDER THE INVESTMENT
COMPANY ACT OF 1940.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
AIM SERIES TRUST
CONTENTS OF POST-EFFECTIVE AMENDMENT
THIS POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT OF AIM SERIES TRUST
CONTAINS THE FOLLOWING DOCUMENTS:
<TABLE>
<S> <C> <C>
Facing Sheet
Contents of Post-Effective Amendment
Cross Reference Sheet
Part A -- Prospectus
-- AIM New Dimension Fund
-- Prospectus -- Advisor Class
-- AIM New Dimension Fund
Part B -- Statement of Additional Information
-- AIM New Dimension Fund
-- Statement of Additional Information -- Advisor Class
-- AIM New Dimension Fund
Part C -- Other Information
Signature Pages
-- AIM Series Trust
-- GT Global Series Trust
Exhibits
</TABLE>
<PAGE>
AIM SERIES TRUST
FORM N-1A CROSS-REFERENCE SHEET
PROSPECTUS -- CLASS A, CLASS B AND CLASS C
<TABLE>
<CAPTION>
ITEM NO. OF
PART A OF FORM N-1A PROSPECTUS CAPTION
- ------------------------------------------- ---------------------------------------------------------------
<S> <C> <C>
1. Cover Page...................... Cover Page
2. Synopsis........................ Prospectus Summary
3. Condensed Financial
Information..................... Prospectus Supplement; Performance
4. General Description of
Registrant...................... Investment Objective and Policies; Description of the
Underlying Theme Funds; Risk Factors and Special
Considerations; Management; Other Information
5. Management of the Fund.......... Management
5A. Management's Discussion of Fund
Performance..................... Not Applicable
6. Capital Stock and Other
Securities...................... Dividends, Other Distributions and Federal Income Taxation;
Other Information
7. Purchase of Securities Being
Offered......................... How to Invest; How to Make Exchanges; Calculation of Net Asset
Value; Management
8. Redemption or Repurchase........ How to Redeem Shares; Calculation of Net Asset Value
9. Pending Legal Proceedings....... Not Applicable
<CAPTION>
PROSPECTUS -- ADVISOR CLASS
ITEM NO. OF
PART A OF FORM N-1A PROSPECTUS CAPTION
- ------------------------------------------- ---------------------------------------------------------------
<S> <C> <C>
1. Cover Page...................... Cover Page
2. Synopsis........................ Prospectus Summary
3. Condensed Financial
Information..................... Prospectus Supplement; Performance
4. General Description of
Registrant...................... Investment Objective and Policies; Description of the
Underlying Theme Funds; Risk Factors and Special
Considerations; Management; Other Information
5. Management of the Fund.......... Management
5A. Management's Discussion of Fund
Performance..................... Not Applicable
6. Capital Stock and Other
Securities...................... Dividends, Other Distributions and Federal Income Taxation;
Other Information
7. Purchase of Securities Being
Offered......................... How to Invest; How to Make Exchanges; Calculation of Net Asset
Value; Management
8. Redemption or Repurchase........ How to Redeem Shares; Calculation of Net Asset Value
9. Pending Legal Proceedings....... Not Applicable
</TABLE>
<PAGE>
AIM SERIES TRUST
FORM N-1A CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
STATEMENT OF ADDITIONAL INFORMATION -- CLASS A, CLASS B AND CLASS C
ITEM NO. OF
PART B OF FORM N-1A STATEMENT OF ADDITIONAL INFORMATION CAPTION
- ------------------------------------------- ---------------------------------------------------------------
<S> <C> <C>
10. Cover Page...................... Cover Page
11. Table of Contents............... Table of Contents
12. General Information and
History......................... Cover Page; Additional Information
13. Investment Objectives and
Policies........................ Investment Objective and Policies; Investment Limitations;
Options, Futures and Currency Strategies; Risk Factors of the
Underlying Theme Funds; Execution of Portfolio Transactions
14. Management of the Registrant.... Trustees and Executive Officers; Management
15. Control Persons and Principal
Holders of Securities........... Trustees and Executive Officers; Management
17. Brokerage Allocation and Other
Practices....................... Execution of Portfolio Transactions
18. Capital Stock and Other
Securities...................... Not Applicable
19. Purchase, Redemption and Pricing
of Securities Being Offered..... Valuation of Fund Shares; Information Relating to Sales and
Redemptions
20. Tax Status...................... Taxes
21. Underwriters.................... Management
22. Calculation of Performance
Data............................ Investment Results
23. Financial Statements............ Financial Statements
</TABLE>
<PAGE>
AIM SERIES TRUST
FORM N-1A CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
STATEMENT OF ADDITIONAL INFORMATION -- ADVISOR CLASS
<S> <C> <C>
ITEM NO. OF
PART B OF FORM N-1A STATEMENT OF ADDITIONAL INFORMATION CAPTION
- ------------------------------------- ----------------------------------------------------
10. Cover Page................ Cover Page
11. Table of Contents......... Table of Contents
12. General Information and
History................... Cover Page; Additional Information
13. Investment Objectives and
Policies.................. Investment Objective and Policies; Investment
Limitations; Options, Futures and Currency
Strategies; Risk Factors of the Underlying Theme
Funds; Execution of Portfolio Transactions
14. Management of the
Registrant................ Trustees and Executive Officers; Management
15. Control Persons and
Principal Holders of
Securities................ Trustees and Executive Officers; Management
16. Investment Advisory and
Other Services............ Management; Additional Information
17. Brokerage Allocation and
Other Practices........... Execution of Portfolio Transactions
18. Capital Stock and Other
Securities................ Not Applicable
19. Purchase, Redemption, and
Pricing of Securities
Being Offered............. Valuation of Fund Shares; Information Relating to
Sales and Redemptions
20. Tax Status................ Taxes
21. Underwriters.............. Management
22. Calculation of Performance
Data...................... Investment Results
23. Financial Statements...... Financial Statements
</TABLE>
PART C -- OTHER INFORMATION
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this Registration Statement.
<PAGE>
AIM NEW DIMENSION FUND
PROSPECTUS -- JUNE 1, 1998
- --------------------------------------------------------------------------------
AIM NEW DIMENSION FUND (the "Fund") seeks long-term growth of capital. Unlike a
typical mutual fund, which invests directly in portfolio securities, the Fund
invests substantially all of its assets in shares of the AIM theme funds: AIM
Global Consumer Products and Services Fund; AIM Global Financial Services Fund;
AIM Global Health Care Fund; AIM Global Infrastructure Fund; AIM Global
Resources Fund; and AIM Global Telecommunications Fund (collectively, the
"Underlying Theme Funds").
There is no assurance that the Fund will achieve its investment objective.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED BY,
ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
The Fund is managed by A I M Advisors, Inc. ("AIM") and is sub-advised and
sub-administered by INVESCO (NY), Inc. (the "Sub-adviser"). AIM and the
Sub-adviser and their worldwide asset management affiliates provide investment
management and/or administrative services to institutional, corporate and
individual clients around the world. AIM and the Sub-adviser are both indirect
wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are
an independent investment management group that has a significant presence in
the institutional and retail segment of the investment management industry in
North America and Europe, and a growing presence in Asia.
This Prospectus sets forth concisely the information an investor should know
before investing and should be read carefully and retained for future reference.
A Statement of Additional Information, dated June 1, 1998, has been filed with
the Securities and Exchange Commission ("SEC") and, as supplemented or amended
from time to time, is incorporated by reference. The Statement of Additional
Information is available without charge by writing to the Fund at 50 California
Street, 27th Floor, San Francisco, CA 94111, or by calling (800) 347-4246. It is
also available, along with other related materials, on the SEC's Internet web
site (http://www.sec.gov).
FOR FURTHER INFORMATION, CALL
(800) 824-1580 OR CONTACT YOUR FINANCIAL ADVISER.
[LOGO]
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM NEW DIMENSION FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Prospectus Summary........................................................................ 3
Investment Objective and Policies......................................................... 8
Description of the Underlying Theme Funds................................................. 9
Risk Factors and Special Considerations................................................... 11
How to Invest............................................................................. 14
How to Make Exchanges..................................................................... 23
How to Redeem Shares...................................................................... 25
Shareholder Account Manual................................................................ 27
Calculation of Net Asset Value............................................................ 28
Dividends, Other Distributions and Federal Income Taxation................................ 28
Management................................................................................ 30
Other Information......................................................................... 33
Performance............................................................................... 35
Appendix.................................................................................. 37
</TABLE>
Prospectus Page 2
<PAGE>
AIM NEW DIMENSION FUND
PROSPECTUS SUMMARY
- ------------------------------------------------------------
The following summary is qualified in its entirety by the more detailed
information appearing in the body of this Prospectus. Cross-references in the
summary are to headings in the body of this Prospectus.
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of AIM Series Trust (the "Trust").
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests, under normal circumstances, substantially all of its assets in shares of the
following Underlying Theme Funds: AIM Global Consumer Products and Services Fund ("Consumer Products
and Services Fund"); AIM Global Financial Services Fund ("Financial Services Fund"); AIM Global
Health Care Fund ("Health Care Fund"); AIM Global Infrastructure Fund ("Infrastructure Fund"); AIM
Global Resources Fund ("Resources Fund"); and AIM Global Telecommunications Fund ("Telecommu-
nications Fund"). The allocation of the Fund's assets to the Underlying Theme Funds is governed
strictly by a formula described herein. See "Investment Objective and Policies."
There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the net asset value of the shares of the Underlying Theme
Funds. Investors should review the investment objectives and policies of the Fund and the Underlying
Theme Funds carefully and consider their ability to assume these and other risks involved in
purchasing shares of the Fund. See "Investment Objective and Policies," "Description of the
Underlying Theme Funds" and "Risk Factors and Special Considerations." As a recently organized
entity, the Fund has a limited operating history.
Investment Managers: AIM and the Sub-adviser and their worldwide asset management affiliates provide investment management
and/or administrative services to institutional, corporate and individual clients around the world.
AIM and the Sub-adviser are both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and
its subsidiaries are an independent investment management group that has a significant presence in
the institutional and retail segment of the investment management industry in North America and
Europe, and a growing presence in Asia. AIM was organized in 1976 and, together with its affiliates,
currently advises approximately 90 investment company portfolios. AIM advises the Fund and other
investment company portfolios which are sub-advised by the Sub-adviser ("AIM/GT Funds"). On May 29,
1998, AMVESCAP PLC acquired the Asset Management Division of Liechtenstein Global Trust AG, which
included the Sub- adviser and certain other affiliates. AIM also serves as the investment adviser to
other mutual funds, which are not sub-advised by the Sub- adviser, that are part of The AIM Family of
Funds-Registered Trademark- ("The AIM Family of Funds," and together with the AIM/GT Funds, the "AIM
Funds").
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 3
<PAGE>
AIM NEW DIMENSION FUND
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Alternative Purchase Plan: Investors may select Class A, Class B or Class C shares, each subject to different expenses and a
different sales charge structure. Each class has distinct advantages and disadvantages for different
investors, and investors should choose the class that best suits their circumstances and objectives.
See "How to Invest."
Class A Shares: Offered at net asset value plus any applicable sales charge (maximum is 4.75% of public offering
price) and subject to 12b-1 service and distribution fees at the annualized rate of 0.50% of the
average daily net assets of Class A shares.
Class B Shares: Offered at net asset value with no initial sales charge (a maximum contingent deferred sales charge
of 5% of net asset value at time of purchase or sale, whichever is less, is imposed on certain
redemptions made within six years of date of purchase) and subject to 12b-1 service and distribution
fees at the annualized rate of 1.00% of the average daily net assets of Class B shares. Class B
shares automatically convert to Class A shares eight years following the end of the calendar month in
which a purchase was made. Class B shares are subject to higher annual expenses than Class A shares.
Class C Shares: Offered at net asset value with no initial sales charge (a contingent deferred sales charge of 1% of
net asset value at the time of purchase or sale, whichever is less, is imposed on certain redemptions
made within one year of purchase) and subject to 12b-1 service and distribution fees at the
annualized rate of 1.00% of the average daily net assets of Class C shares.
Shares Available Through: Class A, Class B and Class C shares are available through broker/dealers, bank and other financial
service entities ("Financial Institutions") that have entered into agreements with the Fund's
distributor, A I M Distributors, Inc. ("AIM Distributors"). Shares also may be acquired by sending an
application directly to GT Global Investor Services, Inc. (the "Transfer Agent") or through exchanges
of shares as described below. See "How to Invest" and "Shareholder Account Manual."
Exchange Privileges: Class A and Class B shares of the Fund may be exchanged for shares of other AIM/GT Funds. Class C
shares currently may not be exchanged for shares of any other AIM/GT Fund. See "How to Make
Exchanges" and "Shareholder Account Manual."
Redemptions: Shares may be redeemed either through Financial Institutions that sell shares of the Fund or the
Fund's Transfer Agent. See "How to Redeem Shares" and "Shareholder Account Manual."
Dividends and Other Dividends and capital gain distributions, if any, are paid annually.
Distributions:
Reinvestment: Dividends and other distributions may be reinvested automatically in Fund shares of the distributing
class or in shares of the corresponding class of other AIM/GT Funds without a sales charge.
First Purchase: $500 minimum ($100 for individual retirement accounts ("IRAs") and reduced amounts for certain other
retirement plans).
</TABLE>
Prospectus Page 4
<PAGE>
AIM NEW DIMENSION FUND
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Subsequent Purchases: $100 minimum ($25 for IRAs and reduced amounts for certain other retirement plans).
Net Asset Values: Class A and Class B shares quoted daily in the financial section of most newspapers; Class C shares
expected to be quoted.
Other Features:
Class A Shares: Letter of Intent Dollar Cost Averaging Program
Quantity Discounts Automatic Investment Plan
Right of Accumulation Systematic Withdrawal Plan
Reinstatement Privilege Portfolio Rebalancing Program
Class B Shares: Systematic Withdrawal Plan Automatic Investment Plan
Portfolio Rebalancing Program Dollar Cost Averaging Program
Conversion Feature
Class C Shares: Systematic Withdrawal Plan Automatic Investment Plan
Dollar Cost Averaging Program
</TABLE>
Prospectus Page 5
<PAGE>
AIM NEW DIMENSION FUND
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
SUMMARY OF INVESTOR COSTS. The expenses and maximum transaction costs associated
with investing in the Class A, Class B and Class C shares of the Fund are
reflected in the following tables.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------- ------- -------
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION COSTS *:
Maximum sales charge on purchases of shares (as a % of offering price).................. 4.75% None None
Sales charges on reinvested distributions to shareholders............................... None None None
Maximum deferred sales charge (as a % of net asset value at time of purchase or sale,
whichever is less)..................................................................... None 5.00% 1.00%
Redemption charges...................................................................... None None None
Exchange fees........................................................................... None None None
ANNUAL FUND OPERATING EXPENSES +:
(AS A % OF AVERAGE NET ASSETS)
Investment management fees.............................................................. None None None
12b-1 distribution and service fees..................................................... 0.50% 1.00% 1.00%
Other expenses.......................................................................... None None None
------- ------- -------
Total Fund Operating Expenses........................................................... 0.50% 1.00% 1.00%
------- ------- -------
------- ------- -------
</TABLE>
- ------------------
* Sales charge waivers are available for Class A, Class B and Class C shares,
and reduced sales charges are available for Class A shares. The maximum 5%
contingent deferred sales charge on Class B shares applies to redemptions
during the first year after purchase. The charge declines thereafter,
reaching zero after six years. The 1% contingent deferred sales charge on
Class C shares applies only to redemptions during the first year after
purchase. See "How to Invest."
+ The Annual Fund Operating Expenses are estimated for the Fund's initial
fiscal period. "Other expenses" (including transfer agency, legal and audit
fees and other operating expenses) initially will be borne by AIM and the
Sub-adviser. Subject to receipt of an order of the SEC pursuant to a pending
exemptive application, such expenses may be borne by AIM and the Sub-adviser
and the Underlying Theme Funds or the Underlying Theme Funds alone. See
"Other Information -- Special Servicing Agreement." Long-term shareholders
may pay more than the economic equivalent of the maximum front-end sales
charge permitted by the National Association of Securities Dealers, Inc.
rules regarding investment companies. See "Management" and the Statement of
Additional Information for more information. The Fund also offers Advisor
Class shares, which are not subject to 12b-1 distribution and service fees,
to certain categories of investors. See "How to Invest."
In addition to the Annual Fund Operating Expenses shown above, the Fund, as a
shareholder in the Underlying Theme Funds, indirectly bears its pro rata share
of the fees and expenses incurred by the Underlying Theme Funds. As a result,
the investment returns of the Fund reflect the expenses of the Underlying Theme
Funds in which it holds shares. Because the Fund invests only in Advisor Class
shares of the Underlying Theme Funds, it pays no sales charge or 12b-1
distribution or service fees in connection with these investments. The following
table shows the expense ratios applicable to Advisor Class shares of the
Underlying Theme Funds for their fiscal years ended October 31, 1997.
<TABLE>
<CAPTION>
EXPENSE RATIO OF
ADVISOR CLASS
UNDERLYING THEME FUND SHARES (1)
- ------------------------------------------------------------------------------------- -------------------
<S> <C>
Consumer Products and Services Fund.................................................. 1.34%
Financial Services Fund.............................................................. 1.50%
Health Care Fund..................................................................... 1.27%
Infrastructure Fund.................................................................. 1.50%
Resources Fund....................................................................... 1.50%
Telecommunications Fund.............................................................. 1.29%
</TABLE>
- ------------------
(1) AIM has undertaken to limit each Underlying Theme Fund's expenses (exclusive
of brokerage commissions, taxes, interest and extraordinary expenses) to a
maximum level of 1.50% of the average daily net assets of such fund's
Advisor Class shares.
Prospectus Page 6
<PAGE>
AIM NEW DIMENSION FUND
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
The following table shows the aggregate expense ratio of each class of the Fund
based on a weighted average of the expense ratios of Advisor Class shares of the
Underlying Theme Funds in which the Fund was invested as of October 31, 1997,
plus the Fund's total operating expenses. (1)
<TABLE>
<CAPTION>
AIM NEW DIMENSION FUND
(INCLUDING THE FUND'S INDIRECT PRO RATA SHARE OF THE EXPENSES OF THE UNDERLYING THEME ESTIMATED AGGREGATE
FUNDS) EXPENSE RATIO (2)
- ------------------------------------------------------------------------------------------ ---------------------------------
<S> <C>
Class A................................................................................... 1.85%
Class B................................................................................... 2.35%
Class C................................................................................... 2.35%
</TABLE>
- ------------------
(1) These percentages do not necessarily reflect the current allocation of the
Fund's assets to the Underlying Theme Funds or the allocation of the Fund's
assets on any other date.
(2) Because of AIM's undertaking to limit each Underlying Theme Fund's expenses
as described above, the Fund's aggregate expense ratio will not exceed
2.00%, 2.50% and 2.50% for Class A, Class B and Class C Shares,
respectively.
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (3):
An investor would have directly or indirectly paid the following expenses of the
Fund based upon the Fund's estimated aggregate expense ratio at the end of the
periods shown on a $1,000 investment in the Fund, assuming a 5% annual return:
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS
------------- ---------------
<S> <C> <C>
Class A shares (1)............................................................................. $ 66 $ 103
Class B shares:
Assuming a complete redemption at end of period (2).......................................... $ 75 $ 107
Assuming no redemption....................................................................... $ 24 $ 74
Class C shares:
Assuming a complete redemption at end of period (2).......................................... $ 34 $ 74
Assuming no redemption....................................................................... $ 24 $ 74
</TABLE>
- ------------------
(1) Assumes payment of maximum sales charge by the investor.
(2) Assumes deduction of the applicable contingent deferred sales charge.
(3) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF FUTURE EXPENSES. THE
FUND'S ACTUAL DIRECT AND INDIRECT EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The example assumes
payment by the Fund of operating expenses at the level set forth under
"Annual Fund Operating Expenses" above and of its indirect pro rata share of
the Advisor Class share expenses of the Underlying Theme Funds, as described
above.
THE FOREGOING TABLES ARE INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND.
The tables and the assumption in the Hypothetical Example of a 5% annual return
are required by regulations of the SEC applicable to all mutual funds. The 5%
annual return is not a prediction of and does not represent the Fund's or any
Underlying Theme Fund's projected or actual performance.
Prospectus Page 7
<PAGE>
AIM NEW DIMENSION FUND
INVESTMENT OBJECTIVE AND
POLICIES
- --------------------------------------------------------------------------------
The Fund seeks long-term growth of capital. Unlike a typical mutual fund, which
invests directly in securities, the Fund invests, under normal circumstances,
substantially all of its assets in the following Underlying Theme Funds:
/ / Consumer Products and Services Fund
/ / Financial Services Fund
/ / Health Care Fund
/ / Infrastructure Fund
/ / Resources Fund
/ / Telecommunications Fund
The Sub-adviser exercises no discretion in investing the Fund's assets. Rather,
the Sub-adviser periodically determines the allocation of the Fund's assets to
the Underlying Theme Funds according to the industry weightings of the companies
composing the Morgan Stanley Capital International All Country (AC) World Index
("MSCI"). (The MSCI is a broad unmanaged index of global stock prices,
comprising approximately 2,483 different issuers, located in 48 countries
including both developed and developing countries as of April 30, 1998. Each of
the 2,483 stocks is placed into one of 38 MSCI industry sectors.) The Sub-
adviser assesses which of the Underlying Theme Funds can invest, as part of its
primary focus, in each of these industries. For example, industries in the MSCI
in which the Financial Services Fund invests include the Banking, Financial
Services, Insurance and Real Estate industries. The percentage that those
industries compose in the MSCI is the initial weighting assigned to the
Financial Services Fund. Where two or more Underlying Theme Funds can invest in
an industry, the weighting of that industry in the MSCI is split equally among
each qualifying Underlying Theme Fund. See the Appendix for the allocation of
the 38 industries to the Underlying Theme Funds. Of course, the Underlying Theme
Funds do not invest necessarily in the same industries or the same companies
that compose the MSCI. Because the percentage weight assigned to each industry
in the MSCI changes over time and because the percentage of the Fund's assets
invested in each Underlying Theme Fund will change over time, the Sub-adviser
will rebalance the Fund's assets among the Underlying Theme Funds at least
semi-annually. In addition, the Sub-adviser will invest incoming money in, and
satisfy redemption requests by redeeming shares of, each Underlying Theme Fund
according to the MSCI weighting as of the last business day of the preceding
month.
As of April 30, 1998, the allocation of the Fund's assets to the Underlying
Theme Funds was as follows:
<TABLE>
<S> <C>
Consumer Products and Services Fund...... 30.8%
Financial Services Fund.................. 21.5%
Health Care Fund......................... 10.4%
Infrastructure Fund...................... 16.4%
Resources Fund........................... 11.1%
Telecommunications Fund.................. 9.7%
</TABLE>
These percentages do not include cash or money market instruments held by the
Fund and do not necessarily reflect the current allocation of the Fund's assets
to the Underlying Theme Funds or the allocation of the Fund's assets on any
other date.
The Fund is a more diversified investment than any single Underlying Theme Fund.
However, because the Underlying Theme Funds are actively managed without any
attempt to reflect the country, industry or company weightings of the MSCI, the
Underlying Theme Funds will perform differently than the corresponding industry
components of the MSCI, and the Underlying Theme Funds will perform differently
than the overall MSCI. While the Fund does not therefore represent the
performance of the MSCI, it does represent a globally diversified portfolio,
with allocations among developed and emerging countries, industries and
companies intended to achieve long-term growth of capital.
The Fund is designed to meet the needs of investors who seek professional money
management services and who appreciate the advantages of diversification. The
Fund by itself should not be considered a complete investment program. As a
recently organized entity, the Fund has a limited operating history.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval
Prospectus Page 8
<PAGE>
AIM NEW DIMENSION FUND
of a majority of its outstanding voting securities. As defined in the Investment
Company Act of 1940, as amended ("1940 Act"), and as used in this Prospectus, a
"majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations as
fundamental policies that also may not be changed without shareholder approval.
See "Investment Limitations" in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus,
and in the Statement of Additional Information, are not fundamental policies and
may be changed by the Trust's Board of Trustees without shareholder approval.
- --------------------------------------------------------------------------------
DESCRIPTION OF THE
UNDERLYING THEME FUNDS
- --------------------------------------------------------------------------------
The following descriptions summarize the investment objectives and policies of
the Underlying Theme Funds. There is no assurance that any Underlying Theme Fund
will achieve its investment objective. The Statement of Additional Information
includes more information about the investment policies of the Underlying Theme
Funds. Investors desiring more information on an Underlying Theme Fund should
call (800) 824-1580 or contact their financial adviser for the Underlying Theme
Fund's prospectus.
CONSUMER PRODUCTS AND SERVICES FUND. The Consumer Products and Services Fund's
investment objective is long-term capital growth. It seeks its objective by
investing all of its investable assets in the Consumer Products and Services
Portfolio, that, in turn, invests primarily in equity securities of companies
throughout the world that manufacture, market, retail or distribute consumer
products and services. The Consumer Products and Services Portfolio's investment
objective is identical to that of the Consumer Products and Services Fund.
At least 65% of the Consumer Products and Services Portfolio's total assets
normally will be invested in common and preferred stocks and warrants to acquire
such securities issued by consumer products and services companies. A "consumer
products or services" company is an entity in which (i) at least 50% of either
the revenues or earnings was derived from activities relating to consumer
products or services, or (ii) at least 50% of the assets was devoted to such
activities, based on the company's most recent fiscal year. The remainder of the
Consumer Products and Services Portfolio's assets may be invested in debt
securities issued by consumer products or services companies and/or equity and
debt securities of companies outside the consumer products or services
industries, which, in the opinion of the Sub-adviser, stand to benefit from
developments in such industries.
FINANCIAL SERVICES FUND. The Financial Services Fund's investment objective is
long-term capital growth. It seeks its objective by investing all of its
investable assets in the Financial Services Portfolio, that, in turn, invests
primarily in equity securities of companies throughout the world that operate in
the financial services industries. The Financial Services Portfolio's investment
objective is identical to that of the Financial Services Fund.
At least 65% of the Financial Services Portfolio's total assets normally will be
invested in common and preferred stocks and warrants to acquire such securities
issued by financial services companies. A "financial services" company is an
entity in which (i) at least 50% of either the revenues or earnings was derived
from financial services activities, or (ii) at least 50% of the assets was
devoted to such activities, based on the company's most recent fiscal year. The
remainder of the Financial Services Portfolio's assets may be invested in debt
securities issued by financial services companies and/or equity and debt
securities of companies outside of the financial services industries, which, in
the opinion of the Sub-adviser, stand to benefit from developments in the
financial services industries.
HEALTH CARE FUND. The Health Care Fund's investment objective is long-term
capital appreciation. It seeks its objective by investing primarily in equity
securities of health care companies throughout the world.
At least 65% of the Health Care Fund's total assets normally will be invested in
common and preferred stocks and warrants to acquire such securities issued by
health care companies. A "health care"
Prospectus Page 9
<PAGE>
AIM NEW DIMENSION FUND
company is an entity in which (i) at least 50% of either the revenues or
earnings was derived from health care activities, or (ii) at least 50% of the
assets was devoted to such activities, based on the company's most recent fiscal
year. The remainder of the Health Care Fund's assets may be invested in debt
securities issued by health care companies and/or equity and debt securities of
companies outside of the health care industry, which, in the opinion of the
Sub-adviser, stand to benefit from developments in the health care industries.
INFRASTRUCTURE FUND. The Infrastructure Fund's investment objective is long-term
capital growth. It seeks its objective by investing all of its investable assets
in the Infrastructure Portfolio, that, in turn, invests primarily in equity
securities of companies throughout the world that design, develop or provide
products and services significant to a country's infrastructure. The
Infrastructure Portfolio's investment objective is identical to that of the
Infrastructure Fund.
At least 65% of the Infrastructure Portfolio's total assets normally will be
invested in common and preferred stocks and warrants to acquire such securities
issued by infrastructure companies. An "infrastructure" company is an entity in
which (i) at least 50% of either the revenues or earnings was derived from
infrastructure activities, or (ii) at least 50% of the assets was devoted to
such activities, based on the company's most recent fiscal year. The remainder
of the Infrastructure Portfolio's assets may be invested in debt securities
issued by infrastructure companies and/or equity and debt securities of
companies outside of the infrastructure industries, which, in the opinion of the
Sub-adviser, stand to benefit from developments in the infrastructure
industries.
RESOURCES FUND. The Resources Fund's investment objective is long-term capital
growth. It seeks its objective by investing all of its investable assets in the
Resources Portfolio, that, in turn, invests primarily in equity securities of
companies throughout the world that own, explore or develop natural resources
and other basic commodities, or supply goods and services to such companies. The
Resources Portfolio's investment objective is identical to that of the Resources
Fund.
At least 65% of the Resources Portfolio's total assets will normally be invested
in common and preferred stocks and warrants to acquire such securities issued by
natural resource companies. A "natural resource" company is an entity in which
(i) at least 50% of either the revenues or earnings was derived from natural
resource activities, or (ii) at least 50% of the assets was devoted to such
activities, based upon the company's most recent fiscal year. The remainder of
the Resources Portfolio's assets may be invested in debt securities issued by
natural resource companies and/or equity and debt securities of companies
outside of the natural resource industries, which, in the opinion of the
Sub-adviser, stand to benefit from developments in the natural resource
industries.
TELECOMMUNICATIONS FUND. The Telecommunications Fund's investment objective is
long-term growth of capital. It seeks its objective by investing primarily in
equity securities of companies throughout the world engaged in the development,
manufacture or sale of telecommunications services or equipment.
At least 65% of the Telecommunications Fund's total assets normally will be
invested in common and preferred stocks and warrants to acquire such securities
issued by telecommunications companies. A "telecommunications" company is an
entity in which (i) at least 50% of either its revenues or earnings was derived
from telecommunications activities, or (ii) at least 50% of its assets was
devoted to telecommunications activities, based on the company's most recent
fiscal year. The remainder of the assets of the Telecommunications Fund may be
invested in debt securities issued by telecommunications companies and/or equity
and debt securities of companies outside of the telecommunications industry
which, in the opinion of the Sub-adviser, stand to benefit from developments in
the telecommunications industries.
Prospectus Page 10
<PAGE>
AIM NEW DIMENSION FUND
RISK FACTORS AND
SPECIAL CONSIDERATIONS
- --------------------------------------------------------------------------------
INVESTING IN THE UNDERLYING THEME FUNDS. The investments of the Fund are
concentrated in the Underlying Theme Funds, so the Fund's investment performance
is directly related to the investment performance of the Underlying Theme Funds.
The ability of the Fund to meet its investment objective is directly related to
the allocation among those Underlying Theme Funds as well as the ability of the
Underlying Theme Funds to meet their objectives. There is no assurance that the
investment objective of the Fund or any Underlying Theme Fund will be achieved.
The value of the Underlying Theme Funds' domestic and foreign investments varies
in response to many factors. The value of equity securities held by an
Underlying Theme Fund will fluctuate in response to general market and economic
developments, as well as developments affecting the particular issuers of such
securities. In addition, the value of debt securities held by an Underlying
Theme Fund generally will fluctuate with changes in the perceived
creditworthiness of the issuers of such securities and interest rates.
Because each Underlying Theme Fund focuses its investments on particular
industries, an investment in each may be more volatile than that of other
investment companies that do not concentrate their investments in such a manner.
The value of the shares of each Underlying Theme Fund will be especially
susceptible to factors affecting the industries in which it focuses. In
particular, each of the industries is subject to governmental regulation that
may have a material effect on the products and services offered by companies in
these industries.
UNDERLYING THEME FUNDS' INVESTMENT ALLOCATION. The Sub-adviser allocates each
Underlying Theme Fund's (or its corresponding Portfolio's) assets among
securities of countries and in currency denominations where opportunities for
meeting each Underlying Theme Fund's investment objective are expected to be the
most attractive. Each Underlying Theme Fund may invest substantially in
securities denominated in foreign currencies. Under normal conditions, each
Underlying Theme Fund invests in the securities of issuers located in at least
three countries, including the United States; investments in securities of
issuers in any one country, other than the United States, will represent no more
than 40% of the Financial Services Portfolio's and the Telecommunication Fund's
total assets, and no more than 50% of the Infrastructure Portfolio's, the
Resources Portfolio's, the Health Care Fund's and the Consumer Products and
Services Portfolio's total assets.
In analyzing specific companies for possible investment the Sub-adviser, on
behalf of the Underlying Theme Funds, ordinarily looks for several of the
following characteristics: above-average per share earnings growth; high return
on invested capital; a healthy balance sheet; sound financial and accounting
policies and overall financial strength; strong competitive advantages;
effective research and product development and marketing; development of new
technologies; efficient service; pricing flexibility; strong management; and
general operating characteristics that will enable the companies to compete
successfully in their respective markets. In assessing companies for the
Resources Portfolio, the Sub-adviser will also evaluate, among other factors,
their capabilities for expanded exploration and production, superior exploration
programs and production techniques and facilities, current inventories, expected
production and demand levels and the potential to accumulate new resources.
FOREIGN INVESTMENTS. The Underlying Theme Funds' investments in foreign
securities may involve risks in addition to those of U.S. investments, including
increased political and economic risk, as well as exposure to currency
fluctuations. By investing in foreign securities, the Underlying Theme Funds
also have increased economic and political risks as they are exposed to events
and factors in the various world markets. This is especially true of an
Underlying Theme Fund that invests in emerging markets. Many investments in
emerging markets are considered speculative and therefore may offer greater
return potential, but have significantly greater risk. Also, to the extent that
an Underlying Theme Fund's investments are denominated in foreign currencies,
changes in the value of foreign currencies can significantly affect the Fund's
share price.
Prospectus Page 11
<PAGE>
AIM NEW DIMENSION FUND
LOWER QUALITY DEBT SECURITIES. The Fund may invest in an Underlying Theme Fund
that invests in high yield, high risk securities, commonly known as "junk
bonds." As a result, the Fund may be subject to some of the risks resulting from
high yield investing. The Fund also may invest in Underlying Theme Funds that
invest in medium grade bonds. Lower quality debt instruments generally offer a
higher current yield than that available from higher grade issues, but typically
involve greater risk. Lower rated and comparable unrated securities are
especially subject to adverse changes in general economic conditions, to changes
in the financial condition of their issuers, and to price fluctuation in
response to changes in interest rates. During periods of economic downturn or
rising interest rates, issuers of these instruments may experience financial
stress that could adversely affect their ability to make payments of principal
and interest and increase the possibility of default.
ILLIQUID SECURITIES. The Underlying Theme Funds may invest in securities for
which no readily available market exists, so-called "illiquid securities."
Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at prices
lower than similar securities that are liquid.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Each Underlying Theme Fund
is authorized to enter into options, futures and forward currency transactions,
although they might not enter into such transactions. Options, futures and
forward currency transactions involve certain risks, which include: (1)
dependence on the Sub-adviser's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which an Underlying Theme Fund invests;
(4) lack of assurance that a liquid secondary market will exist for any
particular option, futures contract or option thereon at any particular time;
(5) the possible loss of principal under certain conditions; and (6) the
possible inability of an Underlying Theme Fund to purchase or sell a portfolio
security at a time when it would otherwise be favorable for it to do so, or the
possible need for an Underlying Theme Fund to sell a security at a
disadvantageous time, due to the need for the Underlying Theme Fund to maintain
"cover" or to set aside securities in connection with hedging transactions.
INVESTING IN SMALLER COMPANIES. Each Underlying Theme Fund may invest in smaller
companies that may present greater opportunities for capital appreciation, but
may also involve greater risks than large, established issuers. Such smaller
companies may have limited resources, and their securities may trade less
frequently and in more limited volume than the securities of larger, more
established companies. As a result, the prices of the securities of such smaller
companies may fluctuate to a greater degree than the prices of the securities of
other issuers.
OTHER INVESTMENT PRACTICES OF THE UNDERLYING THEME FUNDS. In addition to the
investment practices described in this Prospectus, the Underlying Theme Funds
may engage in certain other investment practices, including lending their
portfolio securities; purchasing securities on a when-issued or delayed delivery
basis; entering into repurchase or reverse repurchase agreements; and borrowing
money. Further information on the investment policies, practices and risks of
the Underlying Theme Funds can be found in the Statement of Additional
Information as well as the Underlying Theme Funds' prospectus and statement of
additional information.
PURCHASES AND REDEMPTIONS. From time to time, the Underlying Theme Funds may
experience relatively large purchases or redemptions due to rebalancing of the
Fund by the Sub-adviser. This may have a material effect on the Underlying Theme
Funds, because Underlying Theme Funds that experience redemptions as a result of
the rebalancing may have to sell portfolio securities and because Underlying
Theme Funds that receive additional cash will have to invest it. While it is
impossible to predict the overall impact of these transactions over time, there
could be adverse effects on portfolio management to the extent that Underlying
Theme Funds may be required to sell securities at times when they would not
otherwise do so, or receive cash that cannot be invested in an expeditious
manner. There may be tax consequences associated with purchases and sales of
Prospectus Page 12
<PAGE>
AIM NEW DIMENSION FUND
securities, and such sales also may increase transaction costs.
MASTER-FEEDER STRUCTURE OF CERTAIN UNDERLYING THEME FUNDS. The Financial
Services Fund, Infrastructure Fund, Resources Fund and Consumer Products and
Services Fund, unlike mutual funds that directly acquire and manage their own
portfolios of securities, each seeks its investment objective by investing all
of its investable assets in the Financial Services Portfolio, Infrastructure
Portfolio, Resources Portfolio and Consumer Products and Services Portfolio
(each a "Portfolio"), respectively. Each Portfolio is a separate investment
company. Because each such Underlying Theme Fund will invest only in its
corresponding Portfolio, that Underlying Theme Fund's shareholders will acquire
only an indirect interest in the investments of that Portfolio.
TEMPORARY DEFENSIVE STRATEGIES. The Underlying Theme Funds retain the
flexibility to respond promptly to changes in market and economic conditions.
Accordingly, in the interest of preserving shareholders' capital the Sub-adviser
may employ a temporary defensive investment strategy if it determines such a
strategy to be warranted due to market, economic or political conditions. Under
a defensive strategy, the Underlying Theme Funds may invest up to 100% of their
total assets in cash and/or high quality debt securities and money market
instruments. To the extent an Underlying Theme Fund adopts a temporary defensive
posture, it will not be invested so as to achieve directly its investment
objective.
In addition, pending investment of proceeds from new sales of the shares or to
meet its ordinary daily cash needs, the Underlying Theme Funds may hold cash
and/or may invest in high quality debt instruments and money market instruments.
The Fund may hold cash and/or may invest in money market instruments under
similar circumstances. Money market instruments in which the Underlying Theme
Funds and the Fund may invest include, but are not limited to, United States
government securities; high-grade commercial paper; bank certificates of
deposit; bankers' acceptances and repurchase agreements related to any of the
foregoing. "High-grade commercial paper" refers to commercial paper rated A-1 by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc., or P-1 by
Moody's Investors Service, Inc. or, if not rated, determined by the Sub-adviser
to be of comparable quality.
PORTFOLIO TURNOVER. The Fund's portfolio turnover rate is expected to be low and
is not anticipated to exceed 20% annually. The portfolio turnover rates of the
Underlying Theme Funds and their corresponding Portfolios have ranged from 35%
to 392% during their most recent fiscal years. There is no assurance that the
turnover rates of the Underlying Theme Funds and their corresponding Portfolios
will remain within this range during subsequent fiscal years. Higher turnover
rates may result in higher expenses being incurred by the Underlying Theme
Funds.
AFFILIATED PERSONS. The officers and trustees of the Trust currently serve as
officers and trustees of the
Underlying Theme Funds. AIM and the Sub-adviser also serves as investment
adviser and/or administrator and sub-adviser and/or sub-administrator,
respectively, to the Underlying Theme Funds. Therefore, conflicts may arise as
these persons fulfill their fiduciary responsibilities to the Fund and the
Underlying Theme Funds.
Prospectus Page 13
<PAGE>
AIM NEW DIMENSION FUND
HOW TO INVEST
- --------------------------------------------------------------------------------
GENERAL. Shares of the Fund may be purchased through Financial Institutions,
some of which may charge the investor a transaction fee. That fee will be in
addition to the sales charge payable by the investor, with respect to Class A
shares. Some of these Financial Institutions (or their designees) may be
authorized to accept purchase orders on behalf of the Fund. All purchase orders
will be executed at the public offering price next determined after the purchase
order is received, which includes any applicable sales charge for Class A
shares. Orders received by the Transfer Agent before the close of regular
trading on the New York Stock Exchange ("NYSE") (currently 4:00 p.m. Eastern
Time, unless weather, equipment failure or other factors contribute to an
earlier closing time) on any Business Day will be executed at the public
offering price for the applicable class of shares determined that day. Orders
received by authorized institutions (or their designees) before the close of
regular trading on the NYSE on a Business Day will be deemed to have been
received by the Fund on such day and will be effected that day, provided that
such orders are transmitted to the Transfer Agent prior to the time set for the
receipt of such orders. A "Business Day" is any day Monday through Friday on
which the NYSE is open for business. The authorized institution (or its
designee) will be responsible for forwarding the investor's order to the
Transfer Agent so that it will be received prior to such time.
The minimum initial investment is $500 ($100 for IRAs and $25 for custodial
accounts under Section 403(b)(7) of the Internal Revenue Code of 1986, as
amended (the "Code"), and other tax-qualified employer-sponsored retirement
accounts, if made under a systematic investment plan providing for monthly
payments of at least that amount). The minimum for additional purchases is $100
($25 for IRAs, Code Section 403 (b)(7) custodial accounts and other
tax-qualified employer-sponsored retirement accounts, as mentioned above). THE
FUND AND AIM DISTRIBUTORS RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER AND TO
SUSPEND THE OFFERING OF SHARES FOR A PERIOD OF TIME. In particular, the Fund and
AIM Distributors may reject purchase orders or exchanges by investors who appear
to follow, in the Sub-adviser's judgment, a market-timing strategy or otherwise
engage in excessive trading. See "How To Make Exchanges -- Limitations on
Purchase Orders and Exchanges."
WHEN PLACING PURCHASE ORDERS, INVESTORS SHOULD SPECIFY WHETHER THE ORDER IS FOR
CLASS A, CLASS B OR CLASS C SHARES OF THE FUND. ALL PURCHASE ORDERS THAT FAIL TO
SPECIFY A CLASS WILL AUTOMATICALLY BE INVESTED IN CLASS A SHARES. AIM
DISTRIBUTORS WILL REJECT ANY ORDER FOR PURCHASE OF MORE THAN $250,000 FOR CLASS
B SHARES.
PURCHASES THROUGH THE TRANSFER AGENT. After an initial investment is made and a
shareholder account is established through a Financial Institution, at the
investor's option subsequent purchases may be made directly through the Transfer
Agent. See "Shareholder Account Manual." Investors may also make an initial
investment in the Fund and establish a shareholder account directly through the
Transfer Agent by completing and signing an Account Application accompanying
this Prospectus. Investors should mail to the Transfer Agent the completed
Application together with a check to cover the purchase in accordance with the
instructions provided in the Shareholder Account Manual. Purchases will be
executed at the public offering price next determined after the Transfer Agent
has received the Account Application and check. Subsequent investments do not
need to be accompanied by an application.
Investors also may purchase shares of the Fund by bank wire. Bank wire purchases
will be effected at the next determined public offering price after the bank
wire is received. A wire investment is considered received when the Transfer
Agent is notified that the bank wire has been credited to the Fund. The investor
is responsible for providing prior telephonic or facsimile notice to the
Transfer Agent that a bank wire is being sent. An investor's bank may charge a
service fee for wiring money to the Fund. The Transfer Agent currently does not
charge a service fee for facilitating wire purchases, but reserves the right to
do so in the future. Investors desiring to open an account by bank wire should
call the Transfer Agent at the
Prospectus Page 14
<PAGE>
AIM NEW DIMENSION FUND
appropriate toll-free number provided in the Shareholder Account Manual to
obtain an account number and detailed instructions.
CERTIFICATES. Physical certificates representing the Fund's shares will not be
issued unless a written request is submitted to the Transfer Agent. Shares of
the Fund are recorded on a register by the Transfer Agent, and shareholders who
do not elect to receive certificates have the same rights of ownership as if
certificates had been issued to them. Redemptions and exchanges by shareholders
who hold certificates may take longer to effect than similar transactions
involving non-certificated shares because the physical delivery and processing
of properly executed certificates is required. ACCORDINGLY, THE FUND RECOMMENDS
THAT SHAREHOLDERS DO NOT REQUEST ISSUANCE OF CERTIFICATES.
DIFFERENCES AMONG THE CLASSES. The primary difference among the three classes of
the Fund's shares offered through this Prospectus lies in their sales charge
structures and ongoing expenses, as summarized below. Class A, Class B and Class
C shares represent the same interests in the Fund and have the same rights,
except that each class bears the separate expenses of its 12b-1 distribution
plan and normally has exclusive voting rights with respect to such plan, each
class can experience other minor expense differences and, in addition to
different sales charges, each class has a separate exchange privilege.
The decision as to which class of shares is more beneficial to an investor
depends on the amount invested, the intended length of time the investment is
held and the investor's personal situation. Large investments may qualify for a
reduced Class A sales charge. Investors in Class B shares and Class C shares
have 100% of the purchase invested immediately. Investors intending to invest
for a relatively short period might consider Class C shares. Consult your
financial adviser. Financial Institutions may receive different levels of
compensation for selling a particular class of shares.
ADVISOR CLASS SHARES. Advisor Class shares are offered through a separate
prospectus to (a) trustees or other fiduciaries purchasing shares for employee
benefit plans that are sponsored by organizations that have at least 1,000
employees; (b) any account with assets of at least $10,000 if (i) a financial
planner, trust company, bank trust department or registered investment adviser
has investment discretion over the account and (ii) the account holder pays such
person as compensation for its advice and other services an annual fee of at
least .50% of the assets in the account; (c) any account with assets of at least
$10,000 if (i) the account is established under a "wrap fee" program and (ii)
the account holder pays the sponsor of the program an annual fee of at least
.50% of the assets in the account; (d) accounts advised by INVESCO (NY), Inc. or
one of the companies formerly affiliated with Liechtenstein Global Trust AG,
provided such accounts were invested in Advisor Class shares of any of the
AIM/GT Funds on June 1, 1998; and (e) any of the companies composing or
affiliated with AMVESCAP PLC.
PURCHASING CLASS A SHARES
The Fund's public offering price for Class A shares is the next determined net
asset value per share (see "Calculation of Net Asset Value") plus a sales charge
determined in accordance with the following schedule:
<TABLE>
<CAPTION>
DEALER
INVESTOR'S SALES CHARGE CONCESSION
-------------------------------- ---------------
AS A AS A AS A
PERCENTAGE PERCENTAGE PERCENTAGE
AMOUNT OF OF THE OF THE OF THE
INVESTMENT PUBLIC NET PUBLIC
IN SINGLE OFFERING AMOUNT OFFERING
TRANSACTION PRICE INVESTED PRICE
- ------------------ --------------- --------------- ---------------
<S> <C> <C> <C>
Less than
$50,000......... 4.75% 4.99% 4.00%
$50,000 but less
than $100,000... 4.00 4.17 3.25
$100,000 but less
than $250,000... 3.75 3.90 3.00
$250,000 but less
than $500,000... 2.50 2.56 2.00
$500,000 but less
than
$1,000,000...... 2.00 2.04 1.60
</TABLE>
PURCHASES OF $1,000,000 OR MORE ARE AT NET ASSET VALUE, SUBJECT TO A CONTINGENT
DEFERRED SALES CHARGE OF 1% IF SHARES ARE REDEEMED PRIOR TO 18 MONTHS FROM THE
DATE SUCH SHARES WERE PURCHASED. AIM Distributors may pay a dealer concession
and/or advance a service fee on such transactions. Shares purchased prior to
June 1, 1998 without a sales charge based on the aggregate purchase amount equal
to at least $500,000 are subject to a contingent deferred sales charge for the
first year after their purchase equal to 1% of the lower of the original
purchase price or the net asset value of such shares at the time of redemption.
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to
Prospectus Page 15
<PAGE>
AIM NEW DIMENSION FUND
purchases of Class A shares of the AIM Funds that are otherwise subject to an
initial sales charge, provided that such purchases are made by a "purchaser" as
hereinafter defined. To receive a reduction in the initial sales charge, at the
time of purchase, investors must give their Financial Institution, the Transfer
Agent or AIM Distributors sufficient information to permit confirmation of
qualification. Purchases of Class B and Class C shares of the AIM Funds will not
be taken into account in determining whether a purchase qualifies for a
reduction in initial sales charges for Class A shares.
The term "purchaser" means:
/ / an individual and his or her spouse and children, including any trust
established exclusively for the benefit of any such person; or a pension,
profit-sharing, or other benefit plan established exclusively for the
benefit of any such person, such as an IRA, Roth IRA, a single-participant
money-purchase/profit-sharing plan or an individual participant in a 403(b)
Plan (unless such 403(b) plan qualifies as the purchaser as defined below);
/ / a 403(b) plan, the employer/sponsor of which is an organization described
under Section 501(c)(3) of the Code, provided that:
a. the employer/sponsor must submit contributions for all participating
employees in a single contribution transmittal (i.e., the funds will not
accept contributions submitted with respect to individual participants);
b. each transmittal must be accompanied by a single check or wire transfer;
and
c. all new participants must be added to the 403(b) plan by submitting an
application on behalf of each new participant with the contribution
transmittal;
/ / a trustee or fiduciary purchasing for a single trust, estate or single
fiduciary account (including a pension, profit-sharing or other employee
benefit trust created pursuant to a plan qualified under Section 401 of the
Code) and 457 plans, although more than one beneficiary or participant is
involved;
/ / a Simplified Employee Pension ("SEP"), Salary Reduction and other Elective
Simplified Employee Pension Account ("SARSEP"), a Savings Incentive Match
Plan for Employees IRA ("SIMPLE IRA") where the employer has notified AIM
Distributors in writing that all of its related employee SEP, SARSEP or
SIMPLE IRA accounts should be linked;
/ / any other organized group of persons, whether incorporated or not, provided
the organization has been in existence for at least six months and has some
purpose other than the purchase at a discount of redeemable securities of a
registered investment company; or
/ / the discretionary advised accounts of AIM or A I M Capital Management, Inc.
("AIM Capital").
SALES CHARGE WAIVERS -- CLASS A SHARES. The following persons may purchase Class
A shares of the Fund through AIM Distributors without payment of an initial
sales charge: (a) A I M Management Group Inc. ("AIM Management") and its
affiliated companies; (b) any current or retired officer, director, trustee or
employee, or any member of the immediate family (including spouse, children,
parents and parents of spouse) of any such person, of AIM Management or its
affiliates or of certain mutual funds which are advised or managed by AIM; or
any trust established exclusively for the benefit of such persons; (c) any
employee benefit plan established for employees of AIM Management or its
affiliates; (d) any current or retired officer, director, trustee or employee,
or any member of the immediate family (including spouse, children, parents and
parents of spouse) of any such person, or of CIGNA Corporation or of any of its
affiliated companies, or of First Data Investor Services Group; (e) any
investment company sponsored by CIGNA Investments, Inc. or any of its affiliated
companies for the benefit of its directors' deferred compensation plans; (f)
discretionary advised clients of AIM or AIM Capital; (g) registered
representatives and employees of dealers who have entered into agreements with
AIM Distributors (or financial institutions that have arrangements with such
dealers with respect to the sale of shares of the AIM Funds and any member of
the immediate family (including spouse, children, parents and parents of spouse)
of any such person, provided that purchases at net asset value are permitted by
the policies of such person's employer; (h) certain broker-dealers, investment
advisers or bank trust departments that provide asset allocation, similar
specialized investment services or investment company transaction services for
their customers, that charge a minimum annual fee for such services, and that
have entered into an agreement with AIM Distributors with respect to their use
of the AIM Funds in connection with such services; (i) employees of Triformis
Inc.; (j) shareholders of
Prospectus Page 16
<PAGE>
AIM NEW DIMENSION FUND
any of the AIM/GT Funds as of April 30, 1987 who since that date continually
have owned shares of one or more of the AIM/GT Funds; (k) certain former AMA
Investment Advisers' shareholders who became shareholders of the AIM Health Care
Fund in October 1989, and who have continuously held shares in the AIM/GT Funds
since that time; and (l) former or current Class A shareholders of The AIM
Family of Funds, but only to the extent that their purchase order is entered
with an instruction to have all or a portion of the proceeds from a concurrent
redemption of Class A shares of The AIM Family of Funds (on which a sales charge
was paid) invested in Class A shares of the Fund.
In addition, shares of any AIM/GT Fund may be purchased at net asset value,
without payment of a sales charge, by pension, profit-sharing or other employee
benefit plans created pursuant to a plan qualified under Section 401 of the Code
or plans under Section 457 of the Code, or employee benefit plans created
pursuant to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code. Such plans will qualify for
purchases at net asset value provided that (1) the total amount invested in the
plan is at least $1,000,000, (2) the sponsor signs a $1,000,000 Letter of
Intent, (3) such shares are purchased by an employer-sponsored plan with at
least 100 eligible employees, or (4) all of the plan's transactions are executed
through a single financial institution or service organization who has entered
into an agreement with AIM Distributors with respect to their use of the AIM/GT
Funds in connection with such accounts. Section 403(b) plans sponsored by public
educational institutions will not be eligible for net asset value purchases
based on the aggregate investment made by the plan or the number of eligible
employees. Participants in such plans will be eligible for reduced sales charges
based solely on the aggregate value of their individual investments in the
applicable AIM/GT Fund. AIM Distributors may pay investment dealers or other
financial service firms for share purchases of the Funds sold at net asset value
to an employee benefit plan in accordance with this paragraph as follows: 1% of
the first $2 million of such purchases, plus 0.80% of the next $1 million of
such purchases, plus 0.50% of the next $17 million of such purchases, and plus
0.25% of amounts in excess of $20 million of such purchases.
AIM DISTRIBUTORS AND ITS AGENTS RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW
ALL OR ANY PART OF THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY
PURCHASE OR EXCHANGE ORDER OR TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE
PURCHASE PRICE; (3) TO INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT
REQUIREMENTS; OR (4) TO MODIFY ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF
SHARES OF THE FUND. AIM Distributors and its agents will use their best efforts
to provide notice of any such actions through correspondence with broker-dealers
and existing shareholders, supplements to the AIM/GT Funds' prospectuses, or
other appropriate means, and will provide sixty (60) days' notice in the case of
termination or material modification to the exchange privilege discussed under
the caption "How to Make Exchanges."
REINSTATEMENT PRIVILEGE. Shareholders who redeem their Class A shares in the
Fund have a one time privilege of reinstating their investment by investing the
proceeds of the redemption at net asset value without a sales charge in Class A
shares of the Fund and/or one or more of the other AIM/GT Funds. The Transfer
Agent must receive from the investor or the investor's broker/dealer within 180
days after the date of the redemption both a written request for reinvestment
and a check not exceeding the amount of the redemption proceeds. The
reinstatement purchase will be effected at the net asset value per share next
determined after such receipt. Gain on the redemption is taxable notwithstanding
exercise of the reinvestment privilege (although loss thereon might not be
deductible as a result of such exercise). See "Dividends, Other Distributions
and Federal Income Taxation."
REDUCED SALES CHARGE PLANS. Class A shares may be purchased at reduced sales
charges either through the Right of Accumulation or under a Letter of Intent.
Investors should contact their Financial Institution or the Transfer Agent for
more information.
RIGHT OF ACCUMULATION. Pursuant to the Right of Accumulation, investors are
permitted to purchase shares of the Fund at the sales charge applicable to the
total of (a) the dollar amount then being purchased plus (b) the dollar amount
of the investor's concurrent purchases of other AIM Funds (other than AIM Dollar
Fund, AIM Cash Reserve Shares of AIM Money Market Fund and AIM Tax-Exempt Cash
Fund) plus (c) the price of all shares of AIM Funds (other than shares of AIM
Dollar Fund, AIM Cash Reserve Shares of AIM Money
Prospectus Page 17
<PAGE>
AIM NEW DIMENSION FUND
Market Fund and AIM Tax-Exempt Cash Fund) already held by the investor. To
receive the Right of Accumulation, at the time of purchase investors must give
their Financial Institution, the Transfer Agent or AIM Distributors sufficient
information to permit confirmation of qualification. THE FOREGOING RIGHT OF
ACCUMULATION APPLIES ONLY TO CLASS A SHARES OF THE FUND AND OTHER AIM/GT FUNDS
(OTHER THAN AIM DOLLAR FUND).
LETTER OF INTENT. In executing a Letter of Intent ("LOI"), an investor indicates
an aggregate investment amount he or she intends to invest in the Class A shares
of the Fund and the Class A shares of other AIM Funds (other than shares of AIM
Dollar Fund, AIM Cash Reserve Shares of AIM Money Market Fund and AIM Tax-Exempt
Cash Fund) in the following thirteen months. The LOI is included as part of the
Account Application located at the end of this Prospectus. The sales charge
applicable to that aggregate amount then becomes the applicable sales charge on
all purchases made concurrently with the execution of the LOI and in the
thirteen months following that execution. If an investor executes an LOI within
90 days of a prior purchase of AIM/GT Fund Class A shares (other than shares of
AIM Dollar Fund), the prior purchase may be included under the LOI and an
appropriate adjustment, if any, with respect to the sales charges paid by the
investor in connection with the prior purchase will be made, based on the
then-current net asset value(s) of the pertinent Fund(s). To receive a reduction
in the initial sales charge, at the time of purchase, investors must give their
Financial Institution, the Transfer Agent or AIM Distributors sufficient
information to permit confirmation of qualification.
If at the end of the thirteen month period covered by the LOI the total amount
of purchases does not equal the amount indicated, the investor will be required
to pay the difference between the sales charges paid at the reduced rate and the
sales charges applicable to the purchases actually made. Shares having a value
equal to 5% of the amount specified in the LOI will be held in escrow during the
thirteen month period (while remaining registered in the investor's name) and
are subject to redemption to assure any necessary payment to AIM Distributors of
a higher applicable sales charge.
For purposes of an LOI, any registered investment adviser, trust company or bank
trust department which exercises investment discretion and which intends within
thirteen months to invest $500,000 or more can be treated as a single purchaser,
provided further that such entity places all purchase and redemption orders.
Such entities should be prepared to establish their qualifications for such
treatment. THE FOREGOING LOI APPLIES ONLY TO CLASS A SHARES OF THE FUND AND
OTHER AIM/ GT FUNDS (OTHER THAN AIM DOLLAR FUND).
CONTINGENT DEFERRED SALES CHARGE. A CONTINGENT DEFERRED SALES CHARGE OF 1%
APPLIES TO PURCHASES OF CLASS A SHARES OF $1,000,000 OR MORE THAT ARE REDEEMED
WITHIN 18 MONTHS OF THE DATE OF PURCHASE. This charge will be 1% of the lesser
of the value of the shares redeemed (excluding reinvested dividends and capital
gain distributions) or the total original cost of such shares. In determining
whether a contingent deferred sales charge is payable, and the amount of any
such charge, shares not subject to the contingent deferred sales charge are
redeemed first (including shares purchased by reinvested dividends and capital
gains distributions and amounts representing increases from capital
appreciation), and then other shares are redeemed in the order of purchase. No
such charge will be imposed upon exchanges unless the shares acquired by
exchange are redeemed within 18 months of the date the shares were originally
purchased. For purposes of computing this 18 MONTH PERIOD, shares of any AIM/GT
Fund which were acquired through an exchange of shares which previously were
subject to the 1% contingent deferred sales charge will be credited with the
period of time such exchanged shares were held. The charge will be waived in the
following circumstances: (l) redemptions of shares by employee benefit plans
("Plans") qualified under Sections 401 or 457 of the Code, or Plans created
under Section 403(b) of the Code and sponsored by nonprofit organizations as
defined under Section 501(c)(3) of the Code, where shares are being redeemed in
connection with employee terminations or withdrawals, and (a) the total amount
invested in a Plan is at least $1,000,000, (b) the sponsor of a Plan signs a
letter of intent to invest at least $1,000,000 in one or more of the AIM Funds,
or (c) the shares being redeemed were purchased by an employer-sponsored Plan
with at least 100 eligible employees; provided, however, that Plans created
under Section 403(b) of the Code which are sponsored by public educational
institutions shall qualify under (a), (b) or (c) above on the basis of the value
of each Plan participant's aggregate investment in the AIM Funds, and not on the
aggregate investment made by the Plan or on the number of eligible employees;
(2) redemptions of shares following the death or post-purchase disability, as
defined in
Prospectus Page 18
<PAGE>
AIM NEW DIMENSION FUND
Section 72(m)(7) of the Code, of a shareholder or a settlor of a living trust;
(3) redemptions of shares purchased at net asset value by private foundations or
endowment funds where the initial amount invested was at least $1,000,000; (4)
redemptions of shares purchased by an investor in amounts of $1,000,000 or more
where such investor's dealer of record, due to the nature of the investor's
account, notifies AIM Distributors prior to the time of investment that the
dealer waives the payments otherwise payable to the dealer by AIM Distributors;
and (5) pursuant to a Systematic Withdrawal Plan, provided that amounts
withdrawn under such plan do not exceed on an annual basis 12% of the value of
the shareholder's investment in Class A shares at the time the shareholder
elects to participate in the Systematic Withdrawal Plan. Shareholders who
purchased $500,000 or more of Class A shares prior to June 1, 1998 are entitled
to certain waivers of the contingent deferred sales charge on those shares as
described in the Statement of Additional Information under "Information Relating
to Sales and Redemptions -- Sales Charge Waivers for Shares Purchased Prior to
June 1, 1998".
PURCHASING CLASS B SHARES
The public offering price of the Class B shares is the next determined net asset
value per share. See "Calculation of Net Asset Value." No initial sales charge
is imposed. A contingent deferred sales charge, however, is imposed on certain
redemptions of Class B shares. Because the Class B shares are sold without an
initial sales charge, the Fund receives the full amount of the investor's
purchase payment.
Class B shares may be redeemed on any business day at the net asset value per
share next determined following receipt of the redemption order, less the
applicable contingent deferred sales charge shown in the table below. No
deferred sales charge will be imposed (i) on redemptions of Class B shares
following six years from the date such shares were purchased, (ii) on Class B
shares acquired through reinvestments of dividends and distributions
attributable to Class B shares or (iii) on amounts that represent capital
appreciation in the shareholder's account above the purchase price of the Class
B shares.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS % OF DOLLAR
YEARS SINCE PURCHASE MADE AMOUNT SUBJECT TO CHARGE
- --------------------------- -------------------------
<S> <C>
First...................... 5%
Second..................... 4%
Third...................... 3%
Fourth..................... 3%
Fifth...................... 2%
Sixth...................... 1%
Seventh and Following...... None
</TABLE>
In determining whether a contingent deferred sales charge is applicable, it will
be assumed that a redemption is made first, of any shares held in the
shareholder's account that are not subject to such charge; second, of shares
derived from reinvestment of dividends and distributions; third, of shares held
for more than six years from the date such shares were purchased; and fourth, of
shares held less than six years from the date such shares were purchased. The
applicable sales charge will be applied against the lesser of the current market
value of shares redeemed or their original cost.
For example, assume an investor purchased 100 shares at $10 per share for a cost
of $1,000. Subsequently, the shareholder acquired 15 additional shares through
dividend reinvestment. During the second year after the purchase the investor
decided to redeem $500 of his or her investment. Assuming at the time of the
redemption a net asset value of $11 per share, the value of the investor's
shares would be $1,265 (115 shares at $11 per share). The contingent deferred
sales charge would not be applied to the value of the reinvested dividend
shares. Therefore, the 15 shares currently valued at $165.00 would be redeemed
without a contingent deferred sales charge. The number of shares needed to fund
the remaining $335 of the redemption would equal 30.455. Using the lower of cost
or market price to determine the contingent deferred sales charge, the original
purchase price of $10.00 per share would be used. The contingent deferred sales
charge calculation would therefore be 30.455 shares times $10.00 per share at
the contingent deferred sales charge rate of 4% (the applicable rate in the
second year after purchase) for a total contingent deferred sales charge of
$12.18.
Class B shares that are acquired pursuant to the exchange privilege during a
tender offer by AIM Floating Rate Fund ("Floating Rate Fund") will be subject,
in lieu of the contingent deferred sales charge described above, to a contingent
Prospectus Page 19
<PAGE>
AIM NEW DIMENSION FUND
deferred sales charge equivalent to the early withdrawal charge on the common
stock of the Floating Rate Fund. The purchase of Class B shares of the Fund will
be deemed to have occurred at the time of the initial purchase of the Floating
Rate Fund's common stock.
For federal income tax purposes, the amount of the contingent deferred sales
charge will reduce the gain or increase the loss, as the case may be, realized
on a redemption. The amount of any contingent deferred sales charge will be
payable to AIM Distributors.
CONVERSION OF CLASS B SHARES
Class B shares automatically convert to Class A shares eight years following the
end of the calendar month in which a purchase was made. Class B shares
outstanding on June 1, 1998 and which are continuously held by the investor,
automatically convert to Class A shares as of the close of business on the last
business day of the month in which the seventh anniversary of the initial
issuance of such Class B shares occurs. The conversion will be affected at the
relative net asset value per share of each class. At the time of conversion, a
portion of Class B shares purchased through reinvestment of dividends or other
distributions ("Dividend Shares") also will convert to Class A shares. The
portion of Dividend Shares that will convert is determined by the ratio of
converting Class B non-Dividend Shares to the total Class B non-Dividend Shares
held by the shareholder. Following such conversion of Class B shares, investors
will be relieved of the higher Rule 12b-1 distribution fees associated with
Class B shares. Class B shares of the other AIM/GT Funds with a conversion
feature have a conversion feature that is one year longer than the Fund's Class
B conversion feature for those shares outstanding prior to June 1, 1998. If a
shareholder exchanges Class B shares of the Fund that were outstanding prior to,
and continuously held since, June 1, 1998 for Class B shares of any of these
other AIM/GT Funds, he or she will be subject to the longer conversion feature
of the other AIM/GT Fund. See "How to Make Exchanges."
PURCHASING CLASS C SHARES
The public offering price of the Class C shares of the Fund is the next
determined net asset value per share. See "Calculation of Net Asset Value." No
initial sales charge is imposed. A contingent deferred sales charge of 1% of the
net asset value at the time of purchase or sale, whichever is less, however, is
charged on shares sold within one year of purchase. Because the Class C shares
are sold without an initial sales charge, the Fund receives the full amount of
the investor's purchase payment. Class C shares of the Fund may not be purchased
for a SIMPLE IRA for which a designated financial institution was selected by
the employer on Form 5305-SIMPLE. However, Class C shares of the Fund may be
purchased for SIMPLE IRAs using Form 5304-SIMPLE. In addition, Class A shares
may be purchased for all SIMPLE IRAs.
Class C shares will not be subject to the contingent deferred sales charge to
the extent that the value of such shares represents: (1) reinvestment of
dividends or other distributions or (2) shares redeemed more than one year after
their purchase. Redemptions of most other Class C shares will be subject to a
contingent deferred sales charge. See "Contingent Deferred Sales Charge
Waivers." For federal income tax purposes, the amount of the contingent deferred
sales charge will reduce the gain or increase the loss, as the case may be,
realized on a redemption. The amount of any contingent deferred sales charge
will be payable to AIM Distributors.
CONTINGENT DEFERRED
SALES CHARGE WAIVERS
Contingent deferred sales charges on Class B and Class C shares will be waived
on redemptions (1) following the death or post-purchase disability, as defined
in Section 72(m)(7) of the Code, of a shareholder or a settlor of a living trust
(provided AIM Distributors is notified of such death or post-purchase disability
at the time of the redemption request and is provided with satisfactory evidence
of such death or post-purchase disability), (2) in connection with certain
distributions from individual retirement accounts, custodial accounts maintained
pursuant to Code Section 403(b), deferred compensation plans qualified under
Code Section 457 and plans qualified under Code Section 401 (collectively,
"Retirement Plans"), (3) pursuant to a Systematic Withdrawal Plan, provided that
amounts withdrawn under such plan do not exceed on an annual basis 12% of the
value of the shareholder's investment in Class B or Class C shares at the time
the shareholder elects to participate in the Systematic Withdrawal Plan, (4)
effected pursuant to the right of a Fund to liquidate a shareholder's account if
the aggregate net asset value of shares held in the account is less than the
designated minimum account size
Prospectus Page 20
<PAGE>
AIM NEW DIMENSION FUND
described in this Prospectus, and (5) effected by AIM of its investment in Class
B or Class C shares.
Waiver category (1) above applies only to redemptions of Class B or Class C
shares held at the time of death or initial determination of post-purchase
disability. Waiver category (2) above applies only to redemptions resulting
from:
(i) required minimum distributions to plan participants or beneficiaries who
are age 70 1/2 or older, and only with respect to that portion of such
distributions which does not exceed 12% annually of the participant's or
beneficiary's account value in a particular AIM/GT Fund;
(ii) in-kind transfers of assets where the participant or beneficiary notifies
AIM Distributors of such transfer no later than the time such transfer
occurs;
(iii) tax-free rollovers or transfers of assets to another Retirement Plan
invested in Class B or Class C shares of one or more AIM Funds;
(iv) tax-free returns of excess contributions or returns of excess deferral
amounts; and
(v) distributions upon the death or disability (as defined in the Code) of the
participant or beneficiary.
Shareholders who purchased Class B or Class C shares prior to June 1, 1998 are
entitled to certain waivers of the contingent deferred sales charge on those
shares as described in the Statement of Additional Information under
"Information Relating to Sales and Redemptions -- Sales Charge Waivers for
Shares Purchased Prior to June 1, 1998."
PROGRAMS APPLICABLE TO CLASS A, CLASS B AND CLASS C SHARES
AUTOMATIC INVESTMENT PLAN. Investors may purchase either Class A, Class B or
Class C shares of the Fund through the Automatic Investment Plan. Under this
Plan, an amount specified by the shareholder of $100 or more ($25 or more for
IRAs, Code Section 403(b)(7) custodial accounts and other tax-qualified
employer-sponsored retirement accounts) on a monthly or quarterly basis will be
sent to the Transfer Agent from the investor's bank for investment in the Fund.
Participants in the Automatic Investment Plan should not elect to receive
dividends or other distributions from the Fund in cash. A sales charge will be
applied to each automatic monthly purchase of Class A shares in an amount
determined in accordance with the Right of Accumulation privilege described
above. To participate in the Automatic Investment Plan, investors should
complete the appropriate portion of the Supplemental Application provided at the
end of this Prospectus. Investors should contact their Financial Institution or
AIM Distributors for more information.
DOLLAR COST AVERAGING PROGRAM. Investors may purchase either Class A, Class B or
Class C shares of the Fund through the Dollar Cost Averaging Program whereby a
shareholder invests the same dollar amount each month. Accordingly, the investor
purchases more shares when the Fund's net asset value is relatively low and
fewer shares when the Fund's net asset value is relatively high. This can result
in a lower average cost-per-share than if the shareholder followed a less
systematic approach. Dollar cost averaging does not assure a profit and does not
protect against loss in declining markets. Because such a program involves
continuous investment in securities regardless of fluctuating price levels of
such securities, investors should consider their financial ability to continue
purchases when prices are declining.
A participant in the Dollar Cost Averaging Program first designates the size of
his or her monthly investment in the Fund ("Monthly Investment") after
participation in the Program begins. The Monthly Investment must be at least
$1,000. The investor then will make an initial investment of at least $10,000 in
the AIM Dollar Fund. Thereafter, each month an amount equal to the specified
Monthly Investment automatically will be redeemed from the AIM Dollar Fund and
invested in Fund shares. A sales charge will be applied to each automatic
monthly purchase of Class A shares of the Fund in an amount determined in
accordance with the Right of Accumulation privilege described above. Investors
should contact their Financial Institution or AIM Distributors for more
information.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program permits
eligible shareholders to establish and maintain an allocation across a range of
AIM/GT Funds. The Program is not available for Class C shares. This Program
automatically rebalances holdings of AIM/GT Funds to the established allocation
on a periodic basis. Under this Program, a shareholder may predesignate, on a
percentage basis, how the total value of his or her holdings in a minimum of
two, and a maximum of ten, AIM/GT Funds ("Personal Portfolio") is to be
rebalanced on a monthly, quarterly, semiannual, or annual basis.
Prospectus Page 21
<PAGE>
AIM NEW DIMENSION FUND
Rebalancing under this Program will be effected through the exchange of shares
of one or more AIM/GT Funds in the shareholder's Personal Portfolio for shares
of the same class(es) of one or more other AIM/GT Funds in the shareholder's
Personal Portfolio. See "How to Make Exchanges." If shares of the AIM/GT Funds
in a shareholder's Personal Portfolio have appreciated during a rebalancing
period, the Program will result in shares of AIM/GT Fund(s) that have
appreciated most during the period being exchanged for shares of AIM/GT Fund(s)
that have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Other Distributions and Federal Income Taxation."
Participation in this Program does not assure that a shareholder will profit
from purchases under the Program, nor does it prevent or lessen losses in a
declining market.
The Program will automatically rebalance the shareholder's Personal Portfolio on
the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular AIM/GT Fund would be 2% or
less. In predesignating percentages, shareholders must use whole percentages and
totals must equal 100%. Shareholders participating in the Program may not
request issuance of physical certificates representing a Fund's shares. The
AIM/GT Funds and AIM Distributors reserve the right to modify, suspend, or
terminate the Program at any time on 60 days' prior written notice to
shareholders. A request to participate in the Program must be received in good
order at least five business days prior to the next rebalancing date. Once a
shareholder establishes the Program for his or her Personal Portfolio, a
shareholder cannot cancel or change which rebalancing frequency, AIM/GT which
Funds or what allocation percentages are assigned to the Program, unless
canceled or changed in writing and received by the Transfer Agent in good order
at least five business days prior to the rebalancing date. Shareholders
participating in the Program may also participate in the Right of Accumulation,
Letter of Intent, and Dollar Cost Averaging programs. Certain Financial
Institutions may charge a fee for establishing accounts relating to the Program.
Investors should contact their Financial Adviser or AIM Distributors for more
information.
Prospectus Page 22
<PAGE>
AIM NEW DIMENSION FUND
HOW TO MAKE EXCHANGES
- --------------------------------------------------------------------------------
Class A and Class B shares of the Fund may be exchanged for shares of the same
class of any other AIM/GT Fund, based on their respective net asset values
without imposition of any sales charges, provided that the registration remains
identical. Exchange requests received in good order by the Transfer Agent before
the close of regular trading on the NYSE on any Business Day will be processed
at the net asset value calculated on that day.
EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A SHAREHOLDER REALIZING A GAIN OR
LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Other
Distributions and Federal Income Taxation." In addition to the Fund, the AIM/GT
Funds include the following:
- AIM AMERICA VALUE FUND
- AIM DEVELOPING MARKETS FUND
- AIM DOLLAR FUND
- AIM EMERGING MARKETS FUND
- AIM EUROPE GROWTH FUND
- AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
- AIM GLOBAL FINANCIAL SERVICES FUND
- AIM GLOBAL GOVERNMENT INCOME FUND
- AIM GLOBAL GROWTH & INCOME FUND
- AIM GLOBAL HEALTH CARE FUND
- AIM GLOBAL HIGH INCOME FUND
- AIM GLOBAL INFRASTRUCTURE FUND
- AIM GLOBAL RESOURCES FUND
- AIM GLOBAL TELECOMMUNICATIONS FUND
- AIM INTERNATIONAL GROWTH FUND
- AIM JAPAN GROWTH FUND
- AIM LATIN AMERICAN GROWTH FUND
- AIM MID CAP GROWTH FUND
- AIM NEW PACIFIC GROWTH FUND
- AIM SMALL CAP EQUITY FUND
- AIM STRATEGIC INCOME FUND
- AIM WORLDWIDE GROWTH FUND
An investor interested in making an exchange should contact his or her Financial
Institution or the Transfer Agent to request the prospectus of the other mutual
fund(s) being considered. Certain Financial Institutions may charge a fee for
handling exchanges. The terms of the exchange offer may be modified at any time,
on 60 days' prior written notice.
EXCHANGES BY TELEPHONE. A shareholder may give exchange instructions to the
shareholder's Financial Institution or the Transfer Agent by telephone at the
appropriate toll-free number provided in the Shareholder Account Manual.
Exchange orders will be accepted by telephone provided that the exchange
involves only uncertificated shares on deposit in the shareholder's account or
for which certificates have previously been deposited. Shareholders
automatically have telephone privileges to authorize exchanges. The Fund, AIM
Distributors and the Transfer Agent will not be liable for any loss or damage
for acting in good faith upon instructions received by telephone and reasonably
believed to be genuine. The Funds employ reasonable procedures to confirm that
instructions communicated by telephone are genuine prior to acting upon
instructions received by telephone, including requiring some form of personal
identification, providing written confirmation of such transactions, and/or tape
recording of telephone instructions.
EXCHANGES BY MAIL. Exchange orders should be sent by mail to the shareholder's
Financial Institution or to the Transfer Agent at the address set forth in the
Shareholder Account Manual.
EXCHANGES WITH THE AIM FAMILY OF FUNDS. Currently no exchanges are permitted
between the Fund and funds of The AIM Family of Funds. However, it is
anticipated that such exchanges will be offered prior to October 1, 1998. In
addition, as of the date of this prospectus, Class A shares of the Fund may be
redeemed and the proceeds invested without the imposition of a front-end sales
charge in Class A Shares of funds of The AIM Family of Funds upon receipt of the
redemption proceeds by the transfer agent of The AIM Family of Funds.
Prospectus Page 23
<PAGE>
AIM NEW DIMENSION FUND
The AIM Family of Funds includes the following funds:
- AIM ADVISOR FLEX FUND
- AIM ADVISOR INTERNATIONAL VALUE FUND
- AIM ADVISOR LARGE CAP VALUE FUND
- AIM ADVISOR MULTIFLEX FUND
- AIM ADVISOR REAL ESTATE FUND
- AIM ASIAN GROWTH FUND
- AIM BALANCED FUND
- AIM BLUE CHIP FUND
- AIM CAPITAL DEVELOPMENT FUND
- AIM CHARTER FUND
- AIM CONSTELLATION FUND
- AIM EUROPEAN DEVELOPMENT FUND
- AIM GLOBAL AGGRESSIVE GROWTH FUND
- AIM GLOBAL GROWTH FUND
- AIM GLOBAL INCOME FUND
- AIM GLOBAL UTILITIES FUND
- AIM HIGH INCOME MUNICIPAL FUND
- AIM HIGH YIELD FUND
- AIM INCOME FUND
- AIM INTERMEDIATE GOVERNMENT FUND
- AIM INTERNATIONAL EQUITY FUND
- AIM LIMITED MATURITY TREASURY FUND
- AIM MONEY MARKET FUND
- AIM MUNICIPAL BOND FUND
- AIM SELECT GROWTH FUND
- AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
- AIM TAX-EXEMPT CASH FUND
- AIM TAX-FREE INTERMEDIATE FUND
- AIM VALUE FUND
- AIM WEINGARTEN FUND
An investor interested in making a net asset value purchase of The AIM Family of
Funds should contact his or her Financial Institution or the Transfer Agent to
request the prospectus of the other mutual fund(s) being considered. Certain
Financial Institutions may charge a fee for handling net asset value purchases.
LIMITATIONS ON PURCHASE ORDERS AND EXCHANGES. The AIM/GT Funds are not intended
to serve as vehicles for frequent trading in response to short-term fluctuations
in the market. Due to the disruptive effect that market-timing investment
strategies and excessive trading can have on efficient portfolio management,
each AIM/GT Fund and AIM Distributors reserve the right to refuse purchase
orders and exchanges by any person or group, if, in the Sub-adviser's judgment,
such person or group was following a market-timing strategy or was otherwise
engaging in excessive trading.
In addition, each AIM/GT Fund and AIM Distributors reserve the right to refuse
purchase orders and exchanges by any person or group if, in the Sub-adviser's
judgment, the Fund would not be able to invest the money effectively in
accordance with that Fund's investment objective and policies or would otherwise
potentially be adversely affected. Although an AIM/GT Fund will attempt to give
investors prior notice whenever it is reasonably able to do so, it may impose
the above restrictions at any time.
Finally, as described above, each AIM/GT Fund and AIM Distributors reserve the
right to reject any purchase order.
Prospectus Page 24
<PAGE>
AIM NEW DIMENSION FUND
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
Fund shares may be redeemed at their net asset value (subject to any applicable
contingent deferred sales charge for Class B or Class C shares or, in limited
circumstances, Class A shares), and redemption proceeds will be sent within
seven days of the execution of a redemption request. If a redeeming shareholder
owns more than one class of shares, the shareholder must specify the class of
shares to be redeemed.
REDEMPTIONS THROUGH FINANCIAL INSTITUTIONS. Shareholders with accounts at
Financial Institutions who sell shares of the Fund may submit redemption
requests to such Financial Institutions. If the shares are held in the name of
the Financial Institution, the redemption must be made through the Financial
Institution. Financial Institutions may honor a redemption request either by
repurchasing shares from a redeeming shareholder at the Fund's shares' net asset
value next determined after the Financial Institution receives the request or,
as described below, by forwarding such requests to the Transfer Agent (see "How
to Redeem Shares -- Redemptions Through the Transfer Agent"). Redemption
proceeds normally will be paid by check or, if offered by the Financial
Institution, credited to the shareholder's account at the Financial Institution
at the election of the shareholder. Financial Institutions may impose a service
charge for handling redemption transactions placed through them and may have
other requirements concerning redemptions. Accordingly, shareholders should
contact their Financial Institution for more details.
REDEMPTIONS THROUGH THE TRANSFER AGENT. Redemption requests may be transmitted
to the Transfer Agent by telephone or by mail, in accordance with the
instructions provided in the Shareholder Account Manual. Redemptions will be
effected at the net asset value next determined after the Transfer Agent has
received the request in good order and any required supporting documentation
(less any applicable contingent deferred sales charge for Class B or Class C
shares or, in limited circumstances, Class A shares) or after an authorized
institution (or its designee) has received orders, provided such orders are
transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Redemption requests will not require a signature guarantee if the
redemption proceeds are to be sent either: (i) to the redeeming shareholder at
the shareholder's address of record as maintained by the Transfer Agent,
provided the shareholder's address of record has not been changed within the
preceding thirty days; or (ii) directly to a pre-designated bank, savings and
loan or credit union account ("Pre-Designated Account"). ALL OTHER REDEMPTION
REQUESTS MUST BE ACCOMPANIED BY A SIGNATURE GUARANTEE OF THE REDEEMING
SHAREHOLDER'S SIGNATURE. A signature guarantee can be obtained from any bank,
U.S. trust company, a member firm of a U.S. stock exchange or a foreign branch
of any of the foregoing or other eligible guarantor institution. A notary public
is not an acceptable guarantor. A shareholder with questions concerning the
Fund's signature guarantee requirement should contact the Transfer Agent.
Shareholders may qualify to have redemption proceeds sent to a Pre-Designated
Account by completing the appropriate section of the Account Application at the
end of this Prospectus. Shareholders with Pre-Designated Accounts should request
that redemption proceeds be sent either by bank wire or by check. The minimum
redemption amount for a bank wire is $1,000. Shareholders requesting a bank wire
should allow two business days from the time the redemption request is effected
for the proceeds to be deposited in the shareholder's Pre-Designated Account.
See "How to Redeem Shares -- Other Important Redemption Information."
Shareholders may change their Pre-Designated Accounts only by a letter of
instruction to the Transfer Agent containing all account signatures, each of
which must be guaranteed. The Transfer Agent currently does not charge a bank
wire service fee for each wire redemption sent, but reserves the right to do so
in the future. The shareholder's bank may charge a bank wire service fee.
REDEMPTIONS BY TELEPHONE. Redemption requests may be made by telephone by
calling the Transfer Agent at the appropriate toll-free number provided in the
Shareholder Account Manual. Shareholders who hold certificates for shares may
Prospectus Page 25
<PAGE>
AIM NEW DIMENSION FUND
not redeem by telephone. REDEMPTION REQUESTS MAY NOT BE MADE BY TELEPHONE FOR
THIRTY DAYS FOLLOWING ANY CHANGE OF THE SHAREHOLDER'S ADDRESS OF RECORD.
Shareholders automatically have telephone privileges to authorize redemptions.
The Fund, AIM Distributors and the Transfer Agent will not be liable for any
loss or damage for acting in good faith upon instructions received by telephone
and reasonably believed to be genuine. The Fund employs reasonable procedures to
confirm that instructions communicated by telephone are genuine prior to acting
upon instructions received by telephone, including requiring some form of
personal identification, providing written confirmation of such transactions,
and/or tape recording of telephone instructions.
REDEMPTIONS BY MAIL. Redemption requests should be mailed directly to the
Transfer Agent at the appropriate address provided in the Shareholder Account
Manual. As discussed above, requests for payment of redemption proceeds to a
party other than the shareholder of record and/or requests that redemption
proceeds be mailed to an address other than the shareholder's address of record
require a signature guarantee. In addition, if the shareholder's address of
record has been changed within the preceding thirty days, a signature guarantee
is required. Redemptions of shares for which certificates have been issued must
be accompanied by properly endorsed share certificates.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders owning shares with a value of $10,000
or more may participate in the Systematic Withdrawal Plan. A participating
shareholder will receive proceeds from monthly, quarterly or annual redemptions
of Fund shares with respect to either Class A, Class B or Class C shares. No
contingent deferred sales charge will be imposed on redemptions made under the
Systematic Withdrawal Plan. The minimum withdrawal amount is $100. The amount or
percentage a participating shareholder specifies to be redeemed may not, on an
annualized basis, exceed 12% of the value of the account, as of the time the
shareholder elects to participate in the Systematic Withdrawal Plan. To
participate in the Systematic Withdrawal Plan, investors should complete the
appropriate portion of the Supplemental Application provided at the end of this
Prospectus. Investors should contact their Financial Institution or the Transfer
Agent for more information. With respect to Class A shares, participation in the
Systematic Withdrawal Plan concurrent with purchases of Class A shares may be
disadvantageous to investors because of the sales charges involved and possible
tax implications, and therefore is discouraged. In addition, shareholders who
participate in the Systematic Withdrawal Plan should not elect to reinvest
dividends or other distributions in additional Fund shares. Systematic
withdrawal plans offered by Financial Institutions may have different features.
Accordingly, shareholders should contact their Financial Institution for more
details.
OTHER IMPORTANT REDEMPTION INFORMATION. A request for redemption will not be
processed until all of the necessary documentation has been received in good
order. A shareholder in doubt as to what documents are required should contact
his or her Financial Institution or the Transfer Agent.
Except in extraordinary circumstances and as permitted under the 1940 Act,
payment for shares redeemed by telephone or by mail will be made promptly after
receipt of a redemption request, if in good order, but not later than seven days
after the date the request is executed. Requests for redemption which are
subject to any special conditions or which specify a future or past effective
date cannot be accepted.
If the Transfer Agent is requested to redeem shares for which the Fund has not
yet received good payment, the Fund may delay payment of redemption proceeds
until the Transfer Agent has assured itself that good payment has been collected
for the purchase of the shares. In the case of purchases by check it can take up
to 10 business days to confirm that the check has cleared and good payment has
been received. Redemption proceeds will not be delayed when shares have been
paid for by wire or when the investor's account holds a sufficient number of
shares for which funds already have been collected.
The Fund may redeem the shares of any shareholder whose account is reduced to
less than $500 in value through redemptions or other action by the shareholder.
Written notice will be given to the shareholder at least 60 days prior to the
date fixed for such redemption, during which time the shareholder may increase
his or her holdings to an aggregate amount of $500 or more (with a minimum
purchase of $100).
Prospectus Page 26
<PAGE>
AIM NEW DIMENSION FUND
SHAREHOLDER ACCOUNT MANUAL
- --------------------------------------------------------------------------------
Shareholders are encouraged to place purchase, exchange and redemption orders
through their Financial Institutions. Shareholders also may place such orders
directly in accordance with this Manual. See "How to Invest," "How to Make
Exchanges," "How to Redeem Shares" and "Dividends, Other Distributions and
Federal Income Taxation" for more information.
The Fund's Transfer Agent is GT GLOBAL INVESTOR SERVICES, INC.
INVESTMENTS BY MAIL
Send the completed Account Application (if initial purchase) or letter stating
Fund name, class of shares, shareholder's registered name and account number (if
subsequent purchase) with a check to:
AIM/GT Funds
P.O. Box 7345
San Francisco, CA 94120-7345
INVESTMENTS BY BANK WIRE
An investor opening a new account should call 1-800-223-2138 to obtain an
account number. WITHIN SEVEN DAYS OF PURCHASE A COMPLETED ACCOUNT APPLICATION
CONTAINING THE INVESTOR'S CERTIFIED TAXPAYER IDENTIFICATION NUMBER MUST BE SENT
TO THE ADDRESS PROVIDED ABOVE UNDER "INVESTMENTS BY MAIL." Wire instructions
must state Fund name, class of shares, shareholder's registered name and account
number. Bank wires should be sent through the Federal Reserve Bank Wire System
to:
WELLS FARGO BANK N.A.
ABA 121000248
Attn: GT GLOBAL
Account No. 4023-050701
EXCHANGES BY TELEPHONE
Call the Transfer Agent at 1-800-223-2138.
EXCHANGES BY MAIL
Send complete instructions, including name of Fund exchanging from, class of
shares, amount of exchange, name of the AIM/GT Fund exchanging into,
shareholder's registered name and account number, to:
AIM/GT Funds
P.O. Box 7893
San Francisco, CA 94120-7893
REDEMPTIONS BY TELEPHONE
Call the Transfer Agent at 1-800-223-2138.
REDEMPTIONS BY MAIL
Send complete instructions, including name of Fund, class of shares, amount of
redemption, shareholder's registered name and account number, to:
AIM/GT Funds
P.O. Box 7893
San Francisco, CA 94120-7893
OVERNIGHT MAIL
Overnight mail services do not deliver to post office boxes. To send purchase,
exchange or redemption orders by overnight mail, follow the above instructions
but send to the following address:
GT Global Investor Services, Inc.
California Plaza
2121 N. California Boulevard
Suite 450
Walnut Creek, CA 94596
ADDITIONAL QUESTIONS
Shareholders with additional questions regarding purchase, exchange and
redemption procedures should call the Transfer Agent at 1-800-223-2138.
Prospectus Page 27
<PAGE>
AIM NEW DIMENSION FUND
CALCULATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund calculates its net asset value as of the close of regular trading on
the NYSE (currently 4:00 p.m. Eastern Time, unless weather, equipment failure or
other factors contribute to an earlier closing time) each Business Day. The
Fund's net asset value per share is computed by dividing the value of the Fund's
net assets by the total number of Fund shares outstanding. Net asset value is
determined separately for each class of shares of the Fund. The assets of the
Fund consist primarily of shares of the Underlying Theme Funds, which are valued
daily at their respective net asset values at the time of computation. Other
Fund assets are valued at current market price or, if unavailable, at fair value
determined in good faith by or under the direction of the Trust's Board of
Trustees.
The different service and distribution fees borne by each class of shares of the
Fund will result in different net asset values. The net asset value of the Class
B and Class C shares generally will be lower than that of the Class A shares
because of the higher service and distribution fees borne by the Class B and
Class C shares. The net asset value of the Advisor Class shares generally will
be higher than that of the Class A, Class B and Class C shares because of the
absence of any service and distribution fees applicable to the Advisor Class
shares. It is expected, however, that the net asset value per share of the
classes will tend to converge immediately after the payment of dividends, which
will differ by approximately the amount of the service and distribution fee
accrual differential among the classes.
- --------------------------------------------------------------------------------
DIVIDENDS, OTHER DISTRIBUTIONS
AND FEDERAL INCOME TAXATION
- --------------------------------------------------------------------------------
DIVIDENDS AND OTHER DISTRIBUTIONS. The Fund annually declares and pays as a
dividend all of its net investment income, if any, which includes dividends paid
to it from each Underlying Theme Fund's net investment income (if any) less
applicable expenses. The Fund also annually distributes substantially all of its
realized net capital gains, if any, which consist of (1) distributions to it
from each Underlying Theme Fund's realized net capital gains, if any, and (2)
net gains realized from the Fund's disposition of shares of the Underlying Theme
Funds (which dispositions generally are occasioned by reallocating the Fund's
assets among the Underlying Theme Funds to reflect the MCSI weightings (see
"Investment Objective and Policies") or by the need to make distributions and/
or payments of redemption proceeds in excess of available cash). The Fund may
make an additional dividend or other distribution each year if necessary to
avoid a 4% excise tax on certain undistributed income and gain.
Dividends and other distributions paid by the Fund with respect to all classes
of its shares are calculated in the same manner and at the same time. The per
share income dividends on Class B and Class C shares will be lower than the per
share income dividends on Class A shares as a result of the higher service and
distribution fees applicable to Class B and Class C shares; and the per share
income dividends on all such classes of shares will be lower than the per share
income dividends on the Advisor Class shares of the Fund as a result of the
absence of any service and distribution fees applicable to Advisor Class shares.
SHAREHOLDERS MAY ELECT:
/ / to have all dividends and other distributions automatically reinvested in
additional Fund shares of the distributing class (or, with respect to Class
A and Class B shares, in shares of the corresponding class of other AIM/GT
Funds); or
/ / to receive dividends in cash and have other distributions automatically
reinvested in additional Fund shares of the distributing class (or, with
respect to Class A and Class B shares, in shares
Prospectus Page 28
<PAGE>
AIM NEW DIMENSION FUND
of the corresponding class of other AIM/GT Funds); or
/ / to receive other distributions in cash and have dividends automatically
reinvested in additional Fund shares of the distributing class (or, with
respect to Class A and Class B shares, in shares of the corresponding class
of other AIM/GT Funds); or
/ / to receive dividends and other distributions in cash.
Automatic reinvestments in additional shares are made at net asset value without
imposition of a sales charge. IF NO ELECTION IS MADE BY A SHAREHOLDER, ALL
DIVIDENDS AND OTHER DISTRIBUTIONS WILL BE AUTOMATICALLY REINVESTED IN ADDITIONAL
FUND SHARES OF THE DISTRIBUTING CLASS. Reinvestments in another AIM/GT Fund may
only be directed to an account with the identical shareholder registration and
account number. These elections may be changed by a shareholder at any time; to
be effective with respect to a distribution, the shareholder or the
shareholder's broker must contact the Transfer Agent by mail or telephone at
least 15 Business Days prior to the payment date. THE FEDERAL INCOME TAX
CONSEQUENCES OF DIVIDENDS AND OTHER DISTRIBUTIONS ARE THE SAME WHETHER THEY ARE
RECEIVED IN CASH OR REINVESTED IN ADDITIONAL SHARES.
Any dividend or other distribution paid by the Fund has the effect of reducing
the net asset value per share on the ex-distribution date by the amount thereof.
Therefore, a dividend or other distribution paid shortly after a purchase of
shares would represent, in substance, a return of capital to the shareholder (to
the extent the distribution is paid on the shares so purchased) even though
subject to income tax, as discussed below.
TAXES. The Fund intends to continue to qualify for treatment as a regulated
investment company under the Code. In each taxable year that the Fund so
qualifies, the Fund (but not its shareholders) will be relieved of federal
income tax on that part of its investment company taxable income, consisting
generally of net investment income and net short-term capital gain ("taxable
income"), and net capital gain (i.e., the excess of net long-term capital gain
over net short-term capital loss) that is distributed to its shareholders.
Dividends paid to the Fund from an Underlying Theme Fund's taxable income (which
may include net gains from certain foreign currency transactions) are included
in the Fund's taxable income, and dividends from the latter (whether paid in
cash or reinvested in additional shares) are taxable to the Fund's shareholders
as ordinary income to the extent of its earnings and profits. Distributions of
the Fund's net capital gain (consisting of (1) distributions to it from each
Underlying Theme Fund's net capital gain, when designated as such, and (2) net
gains realized from the Fund's disposition of an Underlying Theme Fund's shares
held for more than twelve months), when designated as such, are taxable to its
shareholders as long-term capital gains, regardless of how long they have held
their Fund shares and whether the distributions are paid in cash or reinvested
in additional shares.
Under the Taxpayer Relief Act of 1997, different maximum tax rates apply to a
noncorporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on securities held for more than one year but not more than 18 months
and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain recognized
on securities held for more than 18 months. A notice issued by the Internal
Revenue Service in November 1997 permits the Fund to divide each net capital
gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with the Fund's holding periods for the securities
it sold that generated the distributed gain) and requires its shareholders to
treat those portions accordingly.
The Fund provides federal tax information to its shareholders annually,
including information about dividends and capital gain distributions paid during
the preceding year. The information regarding capital gain distributions
designates the portions of those distributions that are subject to the different
maximum rates of tax applicable to noncorporate taxpayers' net capital gain
indicated above.
The Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate
shareholders who have not furnished to the Fund a correct taxpayer
identification number or a properly completed claim for exemption on Form W-8 or
W-9. Withholding at that rate also is required from dividends and capital gain
distributions payable to such shareholders who otherwise are subject to backup
withholding. Fund accounts opened via a bank wire purchase (see "How to Invest
- -- Purchases Through the Transfer Agent") are considered to have uncertified
taxpayer identification numbers unless a completed Form W-8 or W-9 or Account
Application is
Prospectus Page 29
<PAGE>
AIM NEW DIMENSION FUND
received by the Transfer Agent within seven days after the purchase. A
shareholder should contact the Transfer Agent if the shareholder is uncertain
whether a proper taxpayer identification number is on file with the Fund.
A redemption of Fund shares may result in taxable gain or loss to the redeeming
shareholder, depending upon whether the redemption proceeds are more or less
than the shareholder's adjusted basis for the redeemed shares (which normally
includes any initial sales charge paid on Class A shares). An exchange of Fund
shares for shares of another fund generally will have similar tax consequences.
However, special tax rules apply when a shareholder (1) disposes of Class A
shares of the Fund through a redemption or exchange within 90 days after
purchase and (2) subsequently acquires Class A shares of the Fund or any other
mutual Fund on which an initial sales charge normally is imposed without paying
that sales charge due to the reinstatement privilege or exchange privilege. In
these cases, any gain on the disposition of the original Class A shares will be
increased, or loss decreased, by the amount of the sales charge paid when those
shares were acquired, and that amount will increase the adjusted basis of the
shares subsequently acquired. In addition, if Fund shares are purchased within
30 days before or after redeeming other Fund shares (regardless of class) at a
loss, all or a part of the loss will not be deductible and instead will increase
the basis of the newly purchased shares.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders. See "Taxes" in
the Statement of Additional Information for a further discussion. There may be
other federal, state, local or foreign tax considerations applicable to a
particular investor. Prospective investors therefore are urged to consult their
tax advisers.
- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment advisory and administrative
services agreement with AIM, the investment sub-advisory and sub-administration
agreement with the Sub-adviser, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement with State Street Bank
and Trust Company and the transfer agency agreement with GT Global Investor
Services, Inc. The day-to-day operations of the Fund are delegated to the
officers of the Trust, subject always to the objective and policies of the Fund
and to the general supervision of the Trust's Board of Trustees. See "Trustees
and Executive Officers" in the Statement of Additional Information for
information on the Trustees.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Subject to the supervision and
direction of the Trust's Board of Trustees, AIM and the Sub-adviser will ensure
that the Fund's assets are invested in the Underlying Theme Funds according to
the formula and pre-determined percentages described in the "Investment
Objective and Policies" section of this Prospectus. AIM and the Sub-adviser will
determine how the Fund's assets will be invested in short-term investments and
place all purchase and sale orders for such instruments and for the Underlying
Theme Funds. AIM and the Sub-adviser provide the following administration
services to the Fund: furnishing corporate officers and clerical staff;
providing office space, services and equipment; and supervising all matters
relating to the Fund's operation. The Sub-adviser also serves as the Fund's
pricing and accounting agent. Finally, AIM and the Sub-adviser will initially
assume all costs of the Fund's operation, except for service and distribution
fees described below and non-recurring and extraordinary expenses. The Fund, as
a shareholder in the Underlying Theme Funds, indirectly will bear its
proportionate share of any investment management fees and other expenses paid by
the Underlying Theme Funds.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment adviser to the Fund pursuant to a master investment advisory
agreement, dated as of May 29, 1998 (the "Advisory
Prospectus Page 30
<PAGE>
AIM NEW DIMENSION FUND
Agreement"). AIM was organized in 1976 and, together with its subsidiaries,
manages or advises approximately 90 investment company portfolios encompassing a
broad range of investment objectives. The Sub-adviser, INVESCO (NY), Inc., 50
California Street, 27th Floor, San Francisco, California 94111, and 1166 Avenue
of the Americas, New York, New York 10036, serves as the sub-adviser to the Fund
pursuant to an investment sub-advisory agreement dated as of May 29, 1998. Prior
to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset Management,
Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the former indirect
parent organization of the Sub-adviser, consummated a purchase agreement with
AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset Management
Division, which included the Sub-adviser and certain other affiliates. As a
result of this transaction, the Sub-adviser is now an indirect wholly owned
subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and its worldwide
asset management affiliates provided investment management and/or administrative
services to institutional, corporate and individual clients around the world
since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices including investment offices in Atlanta, Boston,
Dallas, Denver, Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong,
London, Singapore, Sydney, Tokyo and Toronto. In managing the Fund, the
Sub-adviser employs a team approach, taking advantage of its investment
resources around the world.
While the Fund will not be actively managed or have a portfolio manager, the
Underlying Theme Funds are actively managed by teams of investment
professionals. At least semi-annually the Fund will rebalance the Fund's assets
among the Underlying Theme Funds according to the MSCI weighting as of the last
business day of the preceding month.
DISTRIBUTION OF FUND SHARES. The Trust has entered into master distribution
agreements relating to the Fund (the "Distribution Agreements"), dated May 29,
1998, with AIM Distributors, a registered broker/dealer and a wholly owned
subsidiary of AIM. The address of AIM Distributors is P.O. Box 4739, Houston,
Texas 77210-4739. The Distribution Agreements provide AIM Distributors with the
exclusive rights to distribute shares of the Fund directly and through Financial
Institutions with whom AIM Distributors has entered into agreements. Under the
Distribution Agreements, AIM Distributors acts as the distributor of Class A,
Class B, Class C and Advisor Class shares of the Fund. As distributor, AIM
Distributors collects the sales charges imposed on purchases of Class A shares
and any contingent deferred sales charges that may be imposed on certain
redemptions of Class A, Class B and Class C shares. AIM Distributors may elect
to re-allow the entire initial sales charge to dealers for all sales with
respect to which orders are placed with AIM Distributors during a particular
period. Dealers to whom substantially the entire sales charge is re-allowed may
be deemed to be "underwriters" as that term is defined under the Securities Act
of 1933.
AIM Distributors may pay sales commissions to dealers and institutions who sell
Class B shares of the Fund at the time of such sales. Payments with respect to
Class B shares will equal 4.00% of the purchase price of the Class B shares sold
by the dealer or institution and will consist of a sales commission equal to
3.75% of the purchase price of the Class B shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. The portion of the
payments to AIM Distributors under the Class B Plan which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of such sales commissions plus financing costs. From time to
time, AIM Distributors may pay commissions in excess of these amounts.
Commissions are not paid on exchanges or certain reinvestments in Class B or
Class C shares. In addition, with respect to all three classes of shares, AIM
Distributors makes ongoing payments to broker/ dealers for distribution and
service activities in accordance with the Rule 12b-1 plans described below.
In addition, AIM Distributors makes ongoing payments to brokerage firms,
financial institutions (including banks) and others that facilitate the
Prospectus Page 31
<PAGE>
AIM NEW DIMENSION FUND
administration and servicing of shareholder accounts.
In addition to amounts paid to dealers as a dealer concession out of the initial
sales charge paid by investors, AIM Distributors may, from time to time, at its
expense or as an expense for which it may be compensated under a distribution
plan, if applicable, pay a bonus or other consideration or incentive to dealers
who sell a minimum dollar amount of the shares of the AIM Funds during a
specified period of time. In some instances, these incentives may be offered
only to certain dealers who have sold or may sell significant amounts of shares.
At the option of the dealer, such incentives may take the form of payment for
travel expenses, including lodging, incurred in connection with trips taken by
qualifying registered representatives and their families to places within or
outside the United States. The total amount of such additional bonus payments or
other consideration shall not exceed 0.25% of the public offering price of the
shares sold. Any such bonus or incentive programs will not change the price paid
by investors for the purchase of the applicable fund's shares or the amount that
any particular fund will receive as proceeds from such sales. Dealers may not
use sales of the Funds' shares to qualify for any incentives to the extent that
such incentives may be prohibited by the laws of any state.
AIM Distributors may make payments to dealers and institutions who are dealers
of record for purchases of $1 million or more of Class A shares (or shares which
normally involve payment of initial sales charges), which are sold at net asset
value and are subject to a contingent deferred sales charge as follows: 1% of
the first $2 million of such purchases, plus 0.80% of the next $1 million of
such purchases, plus 0.50% of the next $l7 million of such purchases, plus 0.25%
of amounts in excess of $20 million of such purchases.
The Trust has adopted a Master Distribution Plan applicable to Class A and Class
C shares of the Fund (the "Class A and C Plan") pursuant to Rule 12b-1 under the
1940 Act, to compensate AIM Distributors for the purpose of financing any
activity that is intended to result in the sale of Class A or Class C shares of
the Fund. Under the Class A and C Plan, the Fund pays compensation to AIM
Distributors at an annual rate of 0.50% of the average daily net assets of Class
A shares of the Fund and an aggreagate amount of 1.00% of the average daily net
assets of Class C shares of the Fund.
The Trust also has adopted a Master Distribution Plan applicable to Class B
shares of the Fund (the "Class B Plan"). Under the Class B Plan, the Fund pays
compensation to AIM Distributors at an annual rate of 1.00% of the average daily
net assets of Class B shares of the Fund.
The Class A and C Plan and the Class B Plan (together, the "Plans") are designed
to compensate AIM Distributors for certain promotional and other sales-related
costs, and to implement a dealer incentive program that provides for periodic
payments to selected dealers who furnish continuing personal shareholder
services to their customers who purchase and own Class A, Class B and Class C
shares of the Fund. Payments also can be directed by AIM Distributors to
Financial Institutions who have entered into service agreements with respect to
Class A, Class B and Class C shares of the Fund and who provide continuing
personal services to their customers who own Class A, Class B and Class C shares
of the Fund. The service fees payable to selected Financial Institutions are
calculated at the annual rate of 0.25% of the average daily net asset value of
those Fund shares that are held in such Institution's customers' accounts that
were purchased on or after a prescribed date set forth in the Plans. Of the
aggregate amount payable under the Plans, payments to Financial Institutions
that provide continuing personal shareholder services to their customers who
purchase and own shares of a Fund, in amounts of up to 0.25% of the average net
assets of the Fund attributable to the customers of such Financial Institutions
are characterized as a service fee, and payments to Financial Institutions in
excess of such amount and payments to AIM Distributors would be characterized as
an asset-based sales charge. Payments under the Plans are subject to any
applicable limitations imposed by the rules of the National Association of
Securities Dealers, Inc.
The Plans do not obligate the Fund to reimburse AIM Distributors for the actual
expenses AIM Distributors may incur in fulfilling its obligations under the
Plans. Thus, even if AIM Distributors' actual expenses exceed the fee payable to
AIM Distributors thereunder at any time, the Fund will not be obligated to pay
more than that fee. If AIM Distributors' expenses are less than the fee it
receives, AIM Distributors will retain the full amount of the fee.
Under the Plans, AIM Distributors may in its discretion from time to time agree
to waive voluntarily all or any portion of its fee that has not been assigned or
transferred, while retaining its ability to
Prospectus Page 32
<PAGE>
AIM NEW DIMENSION FUND
be reimbursed for such fee prior to the end of each fiscal year.
Under the Plans, certain Financial Institutions which have entered into service
agreements and which sell shares of the Fund on an agency basis, may receive
payments from the Fund pursuant to the respective Plans. AIM Distributors does
not act as principal, but rather as agent for the Fund, in making such payments.
For additional information concerning the operation of the Plans see
"Distribution Services Relating to the Fund" in the Management section of the
Statement of Additional Information.
The Glass-Steagall Act and other applicable laws, among other things, generally
prohibit federally chartered or supervised banks from engaging in the business
of underwriting or distributing securities. Accordingly, AIM Distributors
intends to engage banks (if at all) only to perform administrative and
shareholder servicing functions. If a bank were prohibited from so acting, its
shareholder clients would be permitted to remain shareholders, and alternative
means for continuing the servicing of such shareholders would be sought. It is
not expected that shareholders would suffer any adverse financial consequences
as a result of any of these occurrences.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
SPECIAL SERVICING AGREEMENT. Until the Special Servicing Agreement described
below is entered into, AIM and the Sub-adviser will pay all the expenses of the
Fund, excluding service and distribution fees and certain non-recurring and
extraordinary expenses. Expenses initially paid by AIM and the Sub-adviser will
include fees and expenses of the Fund's accounting agent; legal, auditing and
accounting expenses; taxes; fees and expenses of the Transfer Agent; fees and
expenses of registering or qualifying the Fund's shares for sale; fees and
expenses of Trustees, officers and employees of the Trust who are not affiliated
with AIM or the Sub-adviser; the cost of printing and distributing reports and
notices to existing shareholders; and fees and expenses incurred in connection
with membership in investment company organizations.
An exemptive application has been filed with the SEC requesting relief from
certain provisions of the 1940 Act to permit the Fund, AIM, the Sub-adviser, the
Underlying Theme Funds and the Transfer Agent to enter into a Special Servicing
Agreement ("Agreement"). If exemptive relief is obtained, all the Fund's
expenses except for service and distribution fees and certain non-recurring and
extraordinary expenses will be paid for in accordance with the Agreement. Under
the Agreement, to the extent that the aggregate expenses of the Fund are less
than the estimated savings to the Underlying Theme Funds from the operation of
the Fund, each Underlying Theme Fund will bear those expenses in proportion to
the average daily value of its shares owned by the Fund and/or the number of
shareholder accounts at the Fund. The estimated savings are expected to result
from the reduction of the Underlying Theme Funds' shareholder servicing costs
due to the elimination of separate shareholder accounts that either currently
are or have potential to be invested in the Underlying Theme Funds. The
estimated savings produced by the operation of the Fund may offset most, if not
all, the expenses incurred by the Fund other than service and distribution fees.
To the extent that the Fund's expenses exceed the aggregate financial benefits
to the Underlying Theme Funds, AIM and the Sub-adviser will pay that excess.
CONFIRMATIONS AND REPORTS TO SHAREHOLDERS. Each time a transaction is made that
affects a shareholder's account in the Fund, the shareholder will receive from
the Transfer Agent a confirmation statement reflecting the transaction.
Confirmations for transactions effected pursuant to the Fund's Automatic
Investment Plan, Systematic Withdrawal Plan and automatic dividend reinvestment
program may be provided quarterly. Shortly after the end of the Fund's fiscal
year on December 31 and fiscal half-year on June 30 of each year, shareholders
receive an annual and semiannual report, respectively. In addition, the federal
income status of distributions made by the Fund to shareholders is reported
after the end of each calendar year on Form 1099-DIV. Under certain
circumstances, duplicate mailings of the foregoing reports to the same household
may be consolidated.
Prospectus Page 33
<PAGE>
AIM NEW DIMENSION FUND
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. Prior to May 29, 1998, the Trust operated under the name "GT
Global Series Trust," a Massachusetts business trust organized on August 26,
1996. The Trust currently consists of one series. From time to time, the Trust
may establish other series, each holding a distinct investment portfolio and
issuing a distinct series of the Trust's shares. Shares of each series are
entitled to one vote per share (with proportional voting for fractional shares)
and are transferable. Shareholders have no preemptive or conversion rights.
If any additional series of the Trust are established, on any matter submitted
to a vote of shareholders, shares of each series will be voted by its
shareholders individually when the matter affects the specific interest of that
series only, such as approval of its investment management arrangements. The
shares of the Trust's series would be voted in the aggregate on other matters,
such as the election of Trustees and ratification of the selection by the Board
of Trustees of the Trust's independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. The Fund would be required to hold a shareholders'
meeting if at any time less than a majority of the Trustees holding office had
been elected by shareholders. Trustees continue to hold office until their
successors are elected and have qualified. Fund shares do not have cumulative
voting rights, which means that the holders of a majority of the shares voting
for the election of Trustees can elect all the Trustees. A Trustee may be
removed upon a majority vote of the shareholders qualified to vote in the
election. Shareholders holding 10% of the Trust's outstanding voting shares may
call a meeting of shareholders for the purpose of voting upon the question of
removal of any Trustee or for any other purpose. The 1940 Act requires the Trust
to assist shareholders in calling such a meeting.
Pursuant to the Trust's Declaration of Trust, the Trust may issue an unlimited
number of shares of the Fund. Each share of the Fund represents an interest in
the Fund only, has a par value of $0.01 per share, represents an equal
proportionate interest in the Fund with other Fund shares and is entitled to
such dividends and other distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared at the
discretion of the Board of Trustees. Each share of the Fund is equal in
earnings, assets and voting privileges, except that each class normally has
exclusive voting rights with respect to its distribution plan and bears the
expenses, if any, related to the distribution of its shares. Fund shares, when
issued, are fully paid and nonassessable.
YEAR 2000 COMPLIANCE PROJECT. In providing services to the Fund, AIM, AIM
Distributors, the Transfer Agent and the Sub-adviser rely on internal computer
systems as well as external computer systems provided by third parties. Some of
these systems were not originally designed to distinguish between the year 1900
and the year 2000. This inability, if not corrected, could adversely affect the
services AIM, AIM Distributors, the Transfer Agent and the Sub-adviser and
others provide the Fund and its shareholders.
To address this important issue, AIM, AIM Distributors, the Transfer Agent and
the Sub-adviser have undertaken a comprehensive Year 2000 Compliance Project
(the "Project"). The Project consists of four phases: (i) inventorying every
software and hardware system in use at AIM, AIM Distributors, the Transfer Agent
and the Sub-adviser, as well as remote, third-party systems on which AIM, AIM
Distributors, the Transfer Agent and the Sub-adviser rely; (ii) identifying
those systems that may not function properly after December 31, 1999; (iii)
correcting or replacing those systems that have been so identified; and (iv)
testing the processing of Mutual Fund data in all systems. Phase (i) has been
completed; phase (ii) is substantially completed; phase (iii) has commenced; and
phase (iv) is expected to commence during the third quarter of 1998. The Project
is scheduled to be completed by December 31, 1998. Following completion of the
Project, AIM, AIM Distributors and the Sub-adviser will review any systems
subsequently acquired to confirm that they are Year 2000 compliant.
SHAREHOLDER INQUIRIES. Shareholder inquiries may be made by calling the Fund
toll-free at (800) 223-2138 or by writing to the Fund at 50 California Street,
27th Floor, San Francisco, CA 94111.
TRANSFER AGENT. Shareholder servicing, reporting and general transfer agent
functions for the Fund are performed by GT Global Investor Services, Inc. The
Transfer Agent is an affiliate of the Sub-adviser and AIM, and maintains offices
at California Plaza, 2121 N. California Boulevard, Suite 450, Walnut Creek, CA
94596.
Prospectus Page 34
<PAGE>
AIM NEW DIMENSION FUND
CUSTODIAN. State Street Bank and Trust Company, 225 Franklin Street, Boston, MA
02110, is custodian of the assets of the Fund.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Kirkpatrick & Lockhart LLP also acts as counsel to the Sub-adviser and the
Transfer Agent in connection with other matters.
INDEPENDENT ACCOUNTANTS. The Fund's independent accountants are Coopers &
Lybrand L.L.P., One Post Office Square, Boston, MA 02109. Coopers & Lybrand
L.L.P. conducts an annual audit of the Fund, assists in the preparation of the
Fund's federal and state income tax returns, and consults with the Trust and the
Fund as to matters of accounting, regulatory filings, and federal and state
income taxation.
MULTIPLE TRANSLATIONS OF THE PROSPECTUS. This Prospectus may be translated into
other languages. In the event of any inconsistency or ambiguity as to the
meaning of any word or phrase contained in a translation, the English text shall
prevail.
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
FUND PERFORMANCE INFORMATION. The Fund, from time to time, may include
information on its investment results and/or comparisons of its investment
results to various unmanaged indices or results of other mutual funds or groups
of mutual funds in advertisements, sales literature or reports furnished to
present or prospective shareholders.
In such materials, the Fund may quote its average annual total return
("Standardized Return"). Standardized Return is calculated separately for each
class of shares of the Fund. Standardized Return shows percentage rates
reflecting the average annual change in the value of an assumed investment in
the Fund at the end of a one-year period and at the end of five- and ten-year
periods, reduced by the maximum applicable sales charge imposed on sales of Fund
shares. If a one-, five- and/or ten-year period has not yet elapsed, data will
be provided as of the end of a shorter period corresponding to the life of the
Fund. Standardized Return assumes the reinvestment of all dividends and other
distributions.
In addition, in order to more completely represent the Fund's performance or
more accurately compare the performance to other measures of investment return,
the Fund also may include other total return performance data ("Non-Standardized
Return") in advertisements, sales literature and shareholder reports.
Non-Standardized Return reflects percentage rates of return encompassing all
elements of return (i.e., income and capital appreciation or depreciation) and
assumes reinvestment of all dividends and other distributions. Non-Standardized
Return may be quoted for the same or different periods as those for which
Standardized Return is quoted; it may consist of an aggregate or average annual
percentage rate of return, actual year-by-year rates or any combination thereof.
Non-Standardized Return may or may not take sales charges into account;
performance data calculated without taking the effect of sales charges into
account will be higher than data including the effect of such charges.
The Fund's performance data will reflect past performance and will not
necessarily be indicative of future results. The Fund's investment results will
vary from time to time depending upon market conditions and the composition of
the Underlying Theme Funds' portfolios. These factors and possible differences
in calculation methods should be considered when comparing the Fund's investment
results with those published for other investment companies, other investment
vehicles and unmanaged indices. The Fund's results also should be considered
relative to the risks associated with its investment objective and policies. See
"Investment Results" in the Statement of Additional Information.
UNDERLYING THEME FUND PERFORMANCE. The Fund has a limited history and therefore
a limited performance record. Thus, the performance shown below is not the
performance of the Fund, but instead reflects the performance of the Underlying
Theme Funds. The following table shows the average annual total returns of Class
A and Class B shares of each Underlying Theme Fund for the
Prospectus Page 35
<PAGE>
AIM NEW DIMENSION FUND
most recent one- and five-year periods (as applicable) and for the life of the
Underlying Theme Funds. The performance information reflects deduction of the
maximum applicable sales charges. Returns would be higher if these charges were
not reflected. The Fund invests in the Advisor Class shares of the Underlying
Theme Funds, which are not subject to sales charges and distribution and service
fees. However, Class A and Class B shares of the Fund are subject to their own
sales charges and distribution and service fees.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN THROUGH 4/30/98
---------------------------------------------------------
ONE YEAR FIVE YEARS LIFE OF FUND
----------------- ----------------- -----------------
UNDERLYING THEME FUND CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
- ----------------------------------------------------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Consumer Products and Services Fund.............................. 45.69% 47.14% n/a n/a 30.87%(1) 31.66%(1)
Financial Services Fund.......................................... 33.53% 34.54% n/a n/a 17.52%(2) 17.94%(2)
Health Care Fund................................................. 28.90% 29.62% 17.91% 18.25% 14.59%(3) 18.50%(4)
Infrastructure Fund.............................................. 8.37% 8.14% n/a n/a 9.93%(5) 10.17%(5)
Resources Fund................................................... 7.91% 7.80% n/a n/a 9.00%(6) 9.24%(6)
Telecommunications Fund.......................................... 36.09% 37.17% 14.34% 14.64% 13.67%(7) 14.85%(8)
</TABLE>
Past performance of the Underlying Theme Funds is not a guarantee of future
results for either the Underlying Theme Funds or the Fund. Further information
about each Underlying Theme Fund's performance is contained in its Annual Report
to Shareholders, which may be obtained without charge by calling (800) 824-1580
or contacting your financial adviser.
- ------------------
(1) The Consumer Products and Services Fund commenced operations on December 30,
1994.
(2) The Financial Services Fund commenced operations on May 31, 1994.
(3) Class A shares of the Health Care Fund were initially offered on August 7,
1989.
(4) Class B shares of the Health Care Fund were initially offered on April 1,
1993.
(5) The Infrastructure Fund commenced operations on May 31, 1994.
(6) The Resources Fund commenced operations on May 31, 1994.
(7) Class A Shares of the Telecommunications Fund were initially offered on
January 27, 1992.
(8) Class B shares of the Telecommunications Fund were initially offered on
April 1, 1993.
Prospectus Page 36
<PAGE>
AIM NEW DIMENSION FUND
APPENDIX
- --------------------------------------------------------------------------------
The chart below shows the allocation of the 38 industries comprising the MSCI to
the Underlying Theme Funds as of April 30, 1998.
<TABLE>
<CAPTION>
CONSUMER
PRODUCTS AND FINANCIAL HEALTH INFRA- TELECOM-
MSCI AC WORLD INDEX INDUSTRY SERVICES SERVICES CARE STRUCTURE RESOURCES MUNICATIONS
- ---------------------------------------- ------------- ---------- ------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Aerospace and Military Technology....... X
Appliances & Household Durables......... X
Automobiles............................. X
Banking................................. X
Beverages & Tobacco..................... X
Broadcasting & Publishing............... X X
Building Materials & Components......... X
Business & Public Services.............. X
Chemicals............................... X
Construction & Housing.................. X
Data Processing & Reproduction.......... X
Electrical Components, Instruments...... X
Electrical & Electronics................ X X
Energy Equipment & Service.............. X
Energy Sources.......................... X
Financial Services...................... X
Food & Household Products............... X
Forest Products & Paper................. X
Gold Mines.............................. X
Health & Personal Care.................. X
Industrial Components................... X
Insurance............................... X
Leisure & Tourism....................... X
Machinery & Engineering................. X
Merchandising........................... X
Metals - Non Ferrous.................... X
Metals - Steel.......................... X
Misc. Materials & Commodities........... X
Multi-Industry.......................... X
Real Estate............................. X
Recreation, Consumer Goods.............. X
Telecommunications...................... X X
Textiles & Apparel...................... X
Transportation - Airlines............... X
Transportation - Road & Rail............ X
Transportation - Shipping............... X
Utilities Electrical & Gas.............. X
Wholesale & International Trade......... X
</TABLE>
Prospectus Page 37
<PAGE>
AIM NEW DIMENSION FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
AIM NEW DIMENSION FUND
AIM/GT FUNDS
AIM DISTRIBUTORS OFFERS A BROAD RANGE OF FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE FUNDS LISTED
BELOW, INCLUDING FEES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING MARKET
INVESTING AND THE RISKS OF INVESTING IN RELATED INDUSTRIES, PLEASE CONTACT
YOUR FINANCIAL ADVISER OR CALL 1-800-824-1580.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
AIM NEW DIMENSION FUND
Captures global growth opportunities by investing directly in the six global
theme funds
AIM WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
AIM INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.
AIM EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
AIM DEVELOPING MARKETS FUND
Invests in debt and equity securities of developing market issuers
/ / GLOBAL THEME FUNDS
AIM GLOBAL CONSUMER PRODUCTS AND
SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
AIM GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
AIM GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
AIM GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
AIM GLOBAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
AIM GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
AIM NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
AIM EUROPE GROWTH FUND
Focuses on investment opportunities in Europe
AIM LATIN AMERICAN GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
AIM SMALL CAP EQUITY FUND
Invests in equity securities of small U.S. companies
AIM MID CAP GROWTH FUND
Concentrates on medium-sized companies in the U.S.
AIM AMERICA VALUE FUND
Concentrates on equity securities of large cap U.S. companies believed to be
undervalued
AIM JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUND
AIM GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
INCOME FUNDS
AIM GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
AIM STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
AIM GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
AIM FLOATING RATE FUND
Invests primarily in senior secured floating rate loans that have the potential
to achieve a high level of current income
MONEY MARKET FUND
AIM DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
[LOGO]
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY AIM SERIES TRUST, AIM NEW
DIMENSION FUND, A I M ADVISORS, INC., INVESCO (NY), INC. OR A I M
DISTRIBUTORS, INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
NDM-PRO-1
<PAGE>
AIM NEW DIMENSION FUND:
ADVISOR CLASS
PROSPECTUS -- JUNE 1, 1998
- --------------------------------------------------------------------------------
AIM NEW DIMENSION FUND (the "Fund") seeks long-term growth of capital. Unlike a
typical mutual fund, which invests directly in portfolio securities, the Fund
invests substantially all of its assets in shares of the AIM theme funds: AIM
Global Consumer Products and Services Fund; AIM Global Financial Services Fund;
AIM Global Health Care Fund; AIM Global Infrastructure Fund; AIM Global
Resources Fund; and AIM Global Telecommunications Fund (collectively, the
"Underlying Theme Funds").
There is no assurance that the Fund will achieve its investment objective.
FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ENDORSED OR GUARANTEED BY,
ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
The Fund is managed by A I M Advisors, Inc. ("AIM") and is sub-advised and
sub-administered by INVESCO (NY), Inc. (the "Sub-adviser"). AIM and the
Sub-adviser and their worldwide asset management affiliates provide investment
management and/or administrative services to institutional, corporate and
individual clients around the world. AIM and the Sub-adviser are both indirect
wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its subsidiaries are
an independent investment management group that has a significant presence in
the institutional and retail segment of the investment management industry in
North America and Europe, and a growing presence in Asia.
Shares offered by this Prospectus are available for purchase only by certain
investors and are offered at net asset value without the imposition of a front-
end or contingent deferred sales charge or Rule 12b-1 fees.
This Prospectus sets forth concisely the information an investor should know
before investing and should be read carefully and retained for future reference.
A Statement of Additional Information, dated June 1, 1998, has been filed with
the Securities and Exchange Commission ("SEC") and, as supplemented or amended
from time to time, is incorporated by reference. The Statement of Additional
Information is available without charge by writing to the Fund at 50 California
Street, 27th Floor, San Francisco, CA 94111, or by calling (800) 347-4246. It is
also available, along with other related materials, on the SEC's Internet web
site (http://www.sec.gov).
FOR FURTHER INFORMATION, CALL (800) 824-1580 OR CONTACT YOUR FINANCIAL ADVISER.
[LOGO]
- ---------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Prospectus Page 1
<PAGE>
AIM NEW DIMENSION FUND
TABLE OF CONTENTS
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Page
---------
<S> <C>
Prospectus Summary........................................................................ 3
Investment Objective and Policies......................................................... 7
Description of the Underlying Theme Funds................................................. 8
Risk Factors and Special Considerations................................................... 10
How to Invest............................................................................. 13
How to Make Exchanges..................................................................... 15
How to Redeem Shares...................................................................... 16
Shareholder Account Manual................................................................ 18
Calculation of Net Asset Value............................................................ 19
Dividends, Other Distributions and Federal Income Taxation................................ 19
Management................................................................................ 21
Other Information......................................................................... 22
Performance............................................................................... 25
Appendix.................................................................................. 27
</TABLE>
Prospectus Page 2
<PAGE>
AIM NEW DIMENSION FUND
PROSPECTUS SUMMARY
- ------------------------------------------------------------
The following summary is qualified in its entirety by the more detailed
information appearing in the body of this Prospectus. Cross-references in the
summary are to headings in the body of this Prospectus.
<TABLE>
<S> <C> <C>
The Fund: The Fund is a diversified series of AIM Series Trust (the "Trust").
Investment Objective: The Fund seeks long-term growth of capital.
Principal Investments: The Fund invests, under normal circumstances, substantially all of its assets in shares of the
following Underlying Theme Funds: AIM Global Consumer Products and Services Fund ("Consumer Products
and Services Fund"); AIM Global Financial Services Fund ("Financial Services Fund"); AIM Global
Health Care Fund ("Health Care Fund"); AIM Global Infrastructure Fund ("Infrastructure Fund"); AIM
Global Resources Fund ("Resources Fund"); and AIM Global Telecommunications Fund ("Telecommu-
nications Fund"). The allocation of the Fund's assets to the Underlying Theme Funds is governed
strictly by a formula described herein. See "Investment Objective and Policies."
There is no assurance that the Fund will achieve its investment objective. The Fund's net asset value
will fluctuate, reflecting fluctuations in the net asset value of the shares of the Underlying Theme
Funds. Investors should review the investment objectives and policies of the Fund and the Underlying
Theme Funds carefully and consider their ability to assume these and other risks involved in
purchasing shares of the Fund. See "Investment Objective and Policies," "Description of the
Underlying Theme Funds" and "Risk Factors and Special Considerations." As a recently organized
entity, the Fund has a limited operating history.
Investment Managers: AIM and the Sub-adviser and their worldwide asset management affiliates provide investment management
and/or administrative services to institutional, corporate and individual clients around the world.
AIM and the Sub-adviser are both indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and
its subsidiaries are an independent investment management group that has a significant presence in
the institutional and retail segment of the investment management industry in North America and
Europe, and a growing presence in Asia. AIM was organized in 1976 and, together with its affiliates,
currently advises approximately 90 investment company portfolios. AIM advises the Fund and other
investment company portfolios which are sub-advised by the Sub-adviser ("AIM/GT Funds"). On May 29,
1998, AMVESCAP PLC acquired the Asset Management Division of Liechtenstein Global Trust AG, which
included the Sub- adviser and certain other affiliates. AIM also serves as the investment adviser to
other mutual funds, which are not sub-advised by the Sub- adviser, that are part of The AIM Family of
Funds-Registered Trademark- ("The AIM Family of Funds," and together with the AIM/GT Funds, the "AIM
Funds").
</TABLE>
THE AIM FAMILY OF FUNDS, THE AIM FAMILY OF FUNDS AND DESIGN (I.E., THE AIM
LOGO), AIM AND DESIGN, AIM, AIM LINK, AIM INSTITUTIONAL FUNDS, AIMFUNDS.COM, LA
FAMILIA AIM DE FONDOS AND LA FAMILIA AIM DE FONDOS AND DESIGN ARE REGISTERED
SERVICE MARKS AND INVEST WITH DISCIPLINE AND AIM BANK CONNECTION ARE SERVICE
MARKS OF A I M MANAGEMENT GROUP INC.
Prospectus Page 3
<PAGE>
AIM NEW DIMENSION FUND
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Advisor Class Shares: Advisor Class shares are offered through this Prospectus to (a) trustees or other fiduciaries
purchasing shares for employee benefit plans which are sponsored by organizations which have at least
1,000 employees; (b) any account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment adviser has investment discretion over such
account, and (ii) the account holder pays such person as compensation for its advice and other
services an annual fee of at least .50% on the assets in the account; (c) any account with assets of
at least $10,000 if (i) such account is established under a "wrap fee" program, and (ii) the account
holder pays the sponsor of such program an annual fee of at least .50% on the assets in the account;
(d) accounts advised by INVESCO (NY), Inc. or one of the companies formerly affiliated with
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor Class shares of any of
the AIM/GT Funds on June 1, 1998; and (e) any of the companies composing or affiliated with AMVESCAP
PLC.
Shares Available Through: Advisor Class shares are available through Financial Advisors (as defined herein) who have entered
into agreements with the Fund's distributor, A I M Distributors, Inc. ("AIM Distributors") or certain
of its affiliates. See "How to Invest" and "Shareholder Account Manual."
Exchange Privileges: Advisor Class shares may be exchanged for Advisor Class shares of other AIM/GT Funds. See "How to
Make Exchanges" and "Shareholder Account Manual."
Redemptions: Shares may be redeemed through the Fund's transfer agent, GT Global Investor Services, Inc.
("Transfer Agent"). See "How to Redeem Shares" and "Shareholder Account Manual."
Dividends and Other Dividends and capital gain distributions, if any, are paid annually.
Distributions:
Reinvestment: Dividends and other distributions may be reinvested automatically in Advisor Class shares of the Fund
or in Advisor Class shares of other AIM/GT Funds.
Net Asset Value: Expected to be quoted daily in the financial section of most newspapers.
</TABLE>
Prospectus Page 4
<PAGE>
AIM NEW DIMENSION FUND
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
SUMMARY OF INVESTOR COSTS. The expenses and maximum transaction costs associated
with investing in Advisor Class shares of the Fund are reflected in the
following tables.
<TABLE>
<CAPTION>
ADVISOR
CLASS
-------
<S> <C>
SHAREHOLDER TRANSACTIONS COSTS:
Maximum sales charge on purchase of shares (as a % of offering price)................... None
Sales charges on reinvested distributions to shareholders............................... None
Maximum deferred sales charges (as a % of net asset value at time of purchase or sale,
whichever is less)..................................................................... None
Redemption charges...................................................................... None
Exchange fees........................................................................... None
ANNUAL FUND OPERATING EXPENSES*:
(AS A % OF AVERAGE NET ASSETS)
Investment management fees.............................................................. None
12b-1 distribution and service fees..................................................... None
Other expenses.......................................................................... None
-------
Total Fund Operating Expenses........................................................... 0.00%
-------
-------
</TABLE>
- ------------------
* The Annual Fund Operating Expenses are estimated for the Fund's initial
fiscal period. "Other expenses" (including transfer agency, legal and audit
fees and other operating expenses) initially will be borne by AIM and the
Sub-adviser. Subject to receipt of an order of the SEC pursuant to a pending
exemptive application, such expenses may be borne by AIM, the Sub-adviser
and the Underlying Theme Funds or the Underlying Theme Funds alone. See
"Other Information -- Special Servicing Agreement." Investors purchasing
Advisor Class shares through financial planners, trust companies, bank trust
departments or registered investment advisers, or under a "wrap fee"
program, will be subject to additional fees charged by such entities or by
the sponsors of such programs. Where any account advised by one of the
companies composing or affiliated with AMVESCAP PLC invests in Advisor Class
shares of the Fund, such account shall not be subject to duplicative
advisory fees.
In addition to the Annual Fund Operating Expenses shown above, the Fund, as a
shareholder in the Underlying Theme Funds, indirectly bears its pro rata share
of the fees and expenses incurred by the Underlying Theme Funds. As a result,
the investment returns of the Fund reflect the expenses of the Underlying Theme
Funds in which it holds shares. Because the Fund invests only in Advisor Class
shares of the Underlying Theme Funds it pays no sales charge or 12b-1
distribution or service fees in connection with these investments. The following
table shows the expense ratios applicable to Advisor Class shares of the
Underlying Theme Funds for their fiscal years ended October 31, 1997.
<TABLE>
<CAPTION>
EXPENSE RATIO OF ADVISOR CLASS SHARES
UNDERLYING THEME FUND (1)
- ------------------------------------------------------------------------------------- ------------------
<S> <C>
Consumer Products and Services Fund.................................................. 1.34%
Financial Services Fund.............................................................. 1.50%
Health Care Fund..................................................................... 1.27%
Infrastructure Fund.................................................................. 1.50%
Resources Fund....................................................................... 1.50%
Telecommunications Fund.............................................................. 1.29%
</TABLE>
- ------------------
(1) AIM has undertaken to limit each Underlying Theme Fund's expenses (exclusive
of brokerage commissions, taxes, interest and extraordinary expenses) to a
maximum level of 1.50% of the average daily net assets of such fund's
Advisor Class shares.
Prospectus Page 5
<PAGE>
AIM NEW DIMENSION FUND
PROSPECTUS SUMMARY
(Continued)
- --------------------------------------------------------------------------------
The following table shows the aggregate expense ratio of each class of the Fund
based on a weighted average of the expense ratios of Advisor Class shares of the
Underlying Theme Funds in which the Fund was invested as of October 31, 1997,
plus the Fund's total operating expenses. (1)
<TABLE>
<CAPTION>
AIM NEW DIMENSION FUND
(INCLUDING THE FUND'S INDIRECT PRO RATA SHARE OF THE EXPENSES OF THE UNDERLYING THEME ESTIMATED AGGREGATE EXPENSE RATIO
FUNDS) (2)
- ------------------------------------------------------------------------------------------ ---------------------------------
<S> <C>
Advisor Class............................................................................. 1.35%
</TABLE>
- ------------------
(1) These percentages do not necessarily reflect the current allocation of the
Fund's assets to the Underlying Theme Funds or the allocation of the Fund's
assets on any other date.
(2) Because of AIM's undertaking to limit each Underlying Theme Fund's expenses
as described above, the Fund's aggregate expense ratio will not exceed 1.50%
for Advisor Class shares.
HYPOTHETICAL EXAMPLE OF EFFECT OF EXPENSES (3):
An investor would have directly or indirectly paid the following expenses of the
Fund based upon the Fund's estimated aggregate expense ratio at the end of the
periods shown on a $1,000 investment in the Fund, assuming a 5% annual return:
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS
------------- ---------------
<S> <C> <C>
Advisor Class shares........................................................................... $ 14 $ 43
</TABLE>
- ------------------
(3) THE "HYPOTHETICAL EXAMPLE" IS NOT A REPRESENTATION OF FUTURE EXPENSES. THE
FUND'S ACTUAL DIRECT AND INDIRECT EXPENSES, AND AN INVESTOR'S DIRECT AND
INDIRECT EXPENSES, MAY BE MORE OR LESS THAN THOSE SHOWN. The example assumes
payment by the Fund of operating expenses at the level set forth under
"Annual Fund Operating Expenses" above and of its indirect pro rata share of
the Advisor Class share expenses of the Underlying Theme Funds, as described
above.
THE FOREGOING TABLES ARE INTENDED TO ASSIST INVESTORS IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES ASSOCIATED WITH INVESTING IN THE FUND.
The tables and the assumption in the Hypothetical Example of a 5% annual return
are required by regulation of the SEC applicable to all mutual funds. The 5%
annual return is not a prediction of and does not represent the Fund's or any
Underlying Theme Fund's projected or actual performance.
Prospectus Page 6
<PAGE>
AIM NEW DIMENSION FUND
INVESTMENT OBJECTIVE AND
POLICIES
- --------------------------------------------------------------------------------
The Fund seeks long-term growth of capital. Unlike a typical mutual fund, which
invests directly in securities, the Fund invests, under normal circumstances,
substantially all of its assets in the following Underlying Theme Funds:
/ / Consumer Products and Services Fund
/ / Financial Services Fund
/ / Health Care Fund
/ / Infrastructure Fund
/ / Resources Fund
/ / Telecommunications Fund
The Sub-adviser exercises no discretion in investing the Fund's assets. Rather,
the Sub-adviser periodically determines the allocation of the Fund's assets to
the Underlying Theme Funds according to the industry weightings of the companies
composing the Morgan Stanley Capital International All Country (AC) World Index
("MSCI"). (The MSCI is a broad unmanaged index of global stock prices,
comprising approximately 2,483 different issuers, located in 48 countries
including both developed and developing countries as of April 30, 1998. Each of
the 2,483 stocks is placed into one of 38 MSCI industry sectors.) The Sub-
adviser assesses which of the Underlying Theme Funds can invest, as part of its
primary focus, in each of these industries. For example, industries in the MSCI
in which the Financial Services Fund invests include the Banking, Financial
Services, Insurance and Real Estate industries. The percentage that those
industries compose in the MSCI is the initial weighting assigned to the
Financial Services Fund. Where two or more Underlying Theme Funds can invest in
an industry, the weighting of that industry in the MSCI is split equally among
each qualifying Underlying Theme Fund. See the Appendix for the allocation of
the 38 industries to the Underlying Theme Funds. Of course, the Underlying Theme
Funds do not invest necessarily in the same industries or the same companies
that compose the MSCI. Because the percentage weight assigned to each industry
in the MSCI changes over time and because the percentage of the Fund's assets
invested in each Underlying Theme Fund will change over time, the Sub-adviser
will rebalance the Fund's assets among the Underlying Theme Funds at least
semi-annually. In addition, the Sub-adviser will invest incoming money in, and
satisfy redemption requests by redeeming shares of, each Underlying Theme Fund
according to the MSCI weighting as of the last business day of the preceding
month.
As of April 30, 1998, the allocation of the Fund's assets to the Underlying
Theme Funds was as follows:
<TABLE>
<S> <C>
Consumer Products and Services Fund..... 30.8%
Financial Services Fund................. 21.5%
Health Care Fund........................ 10.4%
Infrastructure Fund..................... 16.4%
Resources Fund.......................... 11.1%
Telecommunications Fund................. 9.7%
</TABLE>
These percentages do not include cash or money market instruments held by the
Fund and do not necessarily reflect the current allocation of the Fund's assets
to the Underlying Theme Funds or the allocation of the Fund's assets on any
other date.
The Fund is a more diversified investment than any single Underlying Theme Fund.
However, because the Underlying Theme Funds are actively managed without any
attempt to reflect the country, industry or company weightings of the MSCI, the
Underlying Theme Funds will perform differently than the corresponding industry
components of the MSCI, and the Underlying Theme Funds will perform differently
than the overall MSCI. While the Fund does not therefore represent the
performance of the MSCI, it does represent a globally diversified portfolio,
with allocations among developed and emerging countries, industries and
companies intended to achieve long-term growth of capital.
The Fund is designed to meet the needs of investors who seek professional money
management services and who appreciate the advantages of diversification. The
Fund by itself should not be considered a complete investment program. As a
recently organized entity, the Fund has a limited operating history.
OTHER INFORMATION. The investment objective of the Fund may not be changed
without the approval
Prospectus Page 7
<PAGE>
AIM NEW DIMENSION FUND
of a majority of its outstanding voting securities. As defined in the Investment
Company Act of 1940, as amended ("1940 Act"), and as used in this Prospectus, a
"majority of the Fund's outstanding voting securities" means the lesser of (i)
67% of the Fund's shares represented at a meeting at which more than 50% of the
outstanding shares are represented, or (ii) more than 50% of the outstanding
shares. In addition, the Fund has adopted certain investment limitations as
fundamental policies that also may not be changed without shareholder approval.
See "Investment Limitations" in the Statement of Additional Information. Unless
specifically noted, the Fund's investment policies described in this Prospectus,
and in the Statement of Additional Information are not fundamental policies and
may be changed by the Trust's Board of Trustees without shareholder approval.
- --------------------------------------------------------------------------------
DESCRIPTION OF THE
UNDERLYING THEME FUNDS
- --------------------------------------------------------------------------------
The following descriptions summarize the investment objectives and policies of
the Underlying Theme Funds. There is no assurance that any Underlying Theme Fund
will achieve its investment objective. The Statement of Additional Information
includes more information about the investment policies of the Underlying Theme
Funds. Investors desiring more information on an Underlying Theme Fund should
call (800) 824-1580 or contact their financial adviser for the Underlying Theme
Funds' prospectus.
CONSUMER PRODUCTS AND SERVICES FUND. The Consumer Products and Services Fund's
investment objective is long-term capital growth. It seeks its objective by
investing all of its investable assets in the Consumer Products and Services
Portfolio, that, in turn, invests primarily in equity securities of companies
throughout the world that manufacture, market, retail or distribute consumer
products and services. The Consumer Products and Services Portfolio's investment
objective is identical to that of the Consumer Products and Services Fund.
At least 65% of the Consumer Products and Services Portfolio's total assets
normally will be invested in common and preferred stocks and warrants to acquire
such securities issued by consumer products and services companies. A "consumer
products or services" company is an entity in which (i) at least 50% of either
the revenues or earnings was derived from activities relating to consumer
products or services, or (ii) at least 50% of the assets was devoted to such
activities, based on the company's most recent fiscal year. The remainder of the
Consumer Products and Services Portfolio's assets may be invested in debt
securities issued by consumer products or services companies and/or equity and
debt securities of companies outside the consumer products or services
industries, which, in the opinion of the Sub-adviser, stand to benefit from
developments in such industries.
FINANCIAL SERVICES FUND. The Financial Services Fund's investment objective is
long-term capital growth. It seeks its objective by investing all of its
investable assets in the Financial Services Portfolio, that, in turn, invests
primarily in equity securities of companies throughout the world that operate in
the financial services industries. The Financial Services Portfolio's investment
objective is identical to that of the Financial Services Fund.
At least 65% of the Financial Services Portfolio's total assets normally will be
invested in common and preferred stocks and warrants to acquire such securities
issued by financial services companies. A "financial services" company is an
entity in which (i) at least 50% of either the revenues or earnings was derived
from financial services activities, or (ii) at least 50% of the assets was
devoted to such activities, based on the company's most recent fiscal year. The
remainder of the Financial Services Portfolio's assets may be invested in debt
securities issued by financial services companies and/or equity and debt
securities of companies outside of the financial services industries, which, in
the opinion of the Sub-adviser, stand to benefit from developments in the
financial services industries.
HEALTH CARE FUND. The Health Care Fund's investment objective is long-term
capital appreciation. It seeks its objective by investing primarily in equity
securities of health care companies throughout the world.
Prospectus Page 8
<PAGE>
AIM NEW DIMENSION FUND
At least 65% of the Health Care Fund's total assets normally will be invested in
common and preferred stocks and warrants to acquire such securities issued by
health care companies. A "health care" company is an entity in which (i) at
least 50% of either the revenues or earnings was derived from health care
activities, or (ii) at least 50% of the assets was devoted to such activities,
based on the company's most recent fiscal year. The remainder of the Health Care
Fund's assets may be invested in debt securities issued by health care companies
and/or equity and debt securities of companies outside of the health care
industry, which, in the opinion of the Sub-adviser, stand to benefit from
developments in the health care industries.
INFRASTRUCTURE FUND. The Infrastructure Fund's investment objective is long-term
capital growth. It seeks its objective by investing all of its investable assets
in the Infrastructure Portfolio, that, in turn, invests primarily in equity
securities of companies throughout the world that design, develop or provide
products and services significant to a country's infrastructure. The
Infrastructure Portfolio's investment objective is identical to that of the
Infrastructure Fund.
At least 65% of the Infrastructure Portfolio's total assets normally will be
invested in common and preferred stocks and warrants to acquire such securities
issued by infrastructure companies. An "infrastructure" company is an entity in
which (i) at least 50% of either the revenues or earnings was derived from
infrastructure activities, or (ii) at least 50% of the assets was devoted to
such activities, based on the company's most recent fiscal year. The remainder
of the Infrastructure Portfolio's assets may be invested in debt securities
issued by infrastructure companies and/or equity and debt securities of
companies outside of the infrastructure industries, which, in the opinion of the
Sub-adviser, stand to benefit from developments in the infrastructure
industries.
RESOURCES FUND. The Resources Fund's investment objective is long-term capital
growth. It seeks its objective by investing all of its investable assets in the
Resources Portfolio, that, in turn, invests primarily in equity securities of
companies throughout the world that own, explore or develop natural resources
and other basic commodities, or supply goods and services to such companies. The
Resources Portfolio's investment objective is identical to that of the Resources
Fund.
At least 65% of the Resources Portfolio's total assets will normally be invested
in common and preferred stocks and warrants to acquire such securities issued by
natural resource companies. A "natural resource" company is an entity in which
(i) at least 50% of either the revenues or earnings was derived from natural
resource activities, or (ii) at least 50% of the assets was devoted to such
activities, based upon the company's most recent fiscal year. The remainder of
the Resources Portfolio's assets may be invested in debt securities issued by
natural resource companies and/or equity and debt securities of companies
outside of the natural resource industries, which, in the opinion of the
Sub-adviser, stand to benefit from developments in the natural resource
industries.
TELECOMMUNICATIONS FUND. The Telecommunications Fund's investment objective is
long-term growth of capital. It seeks its objective by investing primarily in
equity securities of companies throughout the world engaged in the development,
manufacture or sale of telecommunications services or equipment.
At least 65% of the Telecommunications Fund's total assets normally will be
invested in common and preferred stocks and warrants to acquire such securities
issued by telecommunications companies. A "telecommunications" company is an
entity in which (i) at least 50% of either its revenues or earnings was derived
from telecommunications activities, or (ii) at least 50% of its assets was
devoted to telecommunications activities, based on the company's most recent
fiscal year. The remainder of the assets of the Telecommunications Fund may be
invested in debt securities issued by telecommunications companies and/or equity
and debt securities of companies outside of the telecommunications industry
which, in the opinion of the Sub-adviser, stand to benefit from developments in
the telecommunications industries.
Prospectus Page 9
<PAGE>
AIM NEW DIMENSION FUND
RISK FACTORS AND
SPECIAL CONSIDERATIONS
- --------------------------------------------------------------------------------
INVESTING IN THE UNDERLYING THEME FUNDS. The investments of the Fund are
concentrated in the Underlying Theme Funds, so the Fund's investment performance
is directly related to the investment performance of the Underlying Theme Funds.
The ability of the Fund to meet its investment objective is directly related to
the allocation among those Underlying Theme Funds as well as the ability of the
Underlying Theme Funds to meet their objectives. There is no assurance that the
investment objective of the Fund or any Underlying Theme Fund will be achieved.
The value of the Underlying Theme Funds' domestic and foreign investments varies
in response to many factors. The value of equity securities held by an
Underlying Theme Fund will fluctuate in response to general market and economic
developments, as well as developments affecting the particular issuers of such
securities. In addition, the value of debt securities held by an Underlying
Theme Fund generally will fluctuate with changes in the perceived
creditworthiness of the issuers of such securities and interest rates.
Because each Underlying Theme Fund focuses its investments on particular
industries, an investment in each may be more volatile than that of other
investment companies that do not concentrate their investments in such a manner.
The value of the shares of each Underlying Theme Fund will be especially
susceptible to factors affecting the industries in which it focuses. In
particular, each of the industries is subject to governmental regulation that
may have a material effect on the products and services offered by companies in
these industries.
UNDERLYING THEME FUNDS' INVESTMENT ALLOCATION. The Sub-adviser allocates each
Underlying Theme Fund's (or its corresponding Portfolio's) assets among
securities of countries and in currency denominations where opportunities for
meeting each Underlying Theme Fund's investment objective are expected to be the
most attractive. Each Underlying Theme Fund may invest substantially in
securities denominated in foreign currencies. Under normal conditions, each
Underlying Theme Fund invests in the securities of issuers located in at least
three countries, including the United States; investments in securities of
issuers in any one country, other than the United States, will represent no more
than 40% of the Financial Services Portfolio's and the Telecommunication Fund's
total assets, and no more than 50% of the Infrastructure Portfolio's, the
Resources Portfolio's, the Health Care Fund's and the Consumer Products and
Services Portfolio's total assets.
In analyzing specific companies for possible investment the Sub-adviser, on
behalf of the Underlying Theme Funds, ordinarily looks for several of the
following characteristics: above-average per share earnings growth; high return
on invested capital; a healthy balance sheet; sound financial and accounting
policies and overall financial strength; strong competitive advantages;
effective research and product development and marketing; development of new
technologies; efficient service; pricing flexibility; strong management; and
general operating characteristics that will enable the companies to compete
successfully in their respective markets. In assessing companies for the
Resources Portfolio, the Sub-adviser will also evaluate, among other factors,
their capabilities for expanded exploration and production, superior exploration
programs and production techniques and facilities, current inventories, expected
production and demand levels and the potential to accumulate new resources.
FOREIGN INVESTMENTS. The Underlying Theme Funds' investments in foreign
securities may involve risks in addition to those of U.S. investments, including
increased political and economic risk, as well as exposure to currency
fluctuations. By investing in foreign securities, the Underlying Theme Funds
also have increased economic and political risks as they are exposed to events
and factors in the various world markets. This is especially true of an
Underlying Theme Fund that invests in emerging markets. Many investments in
emerging markets are considered speculative and therefore may offer greater
return potential, but have significantly greater risk. Also, to the extent that
an Underlying Theme Fund's investments are denominated in foreign currencies,
changes in the value of foreign currencies can significantly affect the fund's
share price.
Prospectus Page 10
<PAGE>
AIM NEW DIMENSION FUND
LOWER QUALITY DEBT SECURITIES. The Fund may invest in an Underlying Theme Fund
that invests in high yield, high risk securities, commonly known as "junk
bonds." As a result, the Fund may be subject to some of the risks resulting from
high yield investing. The Fund also may invest in Underlying Theme Funds that
invest in medium grade bonds. Lower quality debt instruments generally offer a
higher current yield than that available from higher grade issues, but typically
involve greater risk. Lower rated and comparable unrated securities are
especially subject to adverse changes in general economic conditions, to changes
in the financial condition of their issuers, and to price fluctuation in
response to changes in interest rates. During periods of economic downturn or
rising interest rates, issuers of these instruments may experience financial
stress that could adversely affect their ability to make payments of principal
and interest and increase the possibility of default.
ILLIQUID SECURITIES. The Underlying Theme Funds may invest in securities for
which no readily available market exists, so-called "illiquid securities."
Illiquid securities may be more difficult to value than liquid securities and
the sale of illiquid securities generally will require more time and result in
higher brokerage charges or dealer discounts and other selling expenses than the
sale of liquid securities. Moreover, illiquid securities often sell at prices
lower than similar securities that are liquid.
OPTIONS, FUTURES AND FORWARD CURRENCY TRANSACTIONS. Each Underlying Theme Fund
is authorized to enter into options, futures and forward currency transactions,
although they might not enter into such transactions. Options, futures and
forward currency transactions involve certain risks, which include: (1)
dependence on the Sub-adviser's ability to predict movements in the prices of
individual securities, fluctuations in the general securities markets or in the
appropriate market sector and movements in interest rates and currency markets;
(2) imperfect correlation, or even no correlation, between movements in the
price of options, forward contracts, futures contracts or options thereon and
movements in the price of the currency or security hedged or used for cover; (3)
the fact that skills and techniques needed to trade options, futures contracts
and options thereon or to use forward currency contracts are different from
those needed to select the securities in which an Underlying Theme Fund invests;
(4) lack of assurance that a liquid secondary market will exist for any
particular option, futures contract or option thereon at any particular time;
(5) the possible loss of principal under certain conditions; and (6) the
possible inability of an Underlying Theme Fund to purchase or sell a portfolio
security at a time when it would otherwise be favorable for it to do so, or the
possible need for an Underlying Theme Fund to sell a security at a
disadvantageous time, due to the need for the Underlying Theme Fund to maintain
"cover" or to set aside securities in connection with hedging transactions.
INVESTING IN SMALLER COMPANIES. Each Underlying Theme Fund may invest in smaller
companies that may present greater opportunities for capital appreciation, but
may also involve greater risks than large, established issuers. Such smaller
companies may have limited resources, and their securities may trade less
frequently and in more limited volume than the securities of larger, more
established companies. As a result, the prices of the securities of such smaller
companies may fluctuate to a greater degree than the prices of the securities of
other issuers.
OTHER INVESTMENT PRACTICES OF THE UNDERLYING THEME FUNDS. In addition to the
investment practices described in this Prospectus, the Underlying Theme Funds
may engage in certain other investment practices, including lending their
portfolio securities; purchasing securities on a when-issued or delayed delivery
basis; entering into repurchase or reverse repurchase agreements; and borrowing
money. Further information on the investment policies, practices and risks of
the Underlying Theme Funds can be found in the Statement of Additional
Information as well as the Underlying Theme Fund's prospectus and statement of
additional information.
PURCHASES AND REDEMPTIONS. From time to time, the Underlying Theme Funds may
experience relatively large purchases or redemptions due to rebalancing of the
Fund by the Sub-adviser. This may have a material effect on the Underlying Theme
Funds, because Underlying Theme Funds that experience redemptions as a result of
the rebalancing may have to sell portfolio securities and because Underlying
Theme Funds that receive additional cash will have to invest it. While it is
impossible to predict the overall impact of these transactions over time, there
could be adverse effects on portfolio management to the extent that Underlying
Theme Funds may be required to sell securities at times when they would not
otherwise do so, or receive cash that cannot be invested in an expeditious
manner. There may be tax consequences associated with purchases and sales of
Prospectus Page 11
<PAGE>
AIM NEW DIMENSION FUND
securities, and such sales also may increase transaction costs.
MASTER-FEEDER STRUCTURE OF CERTAIN UNDERLYING THEME FUNDS. The Financial
Services Fund, Infrastructure Fund, Resources Fund and Consumer Products and
Services Fund, unlike mutual funds that directly acquire and manage their own
portfolios of securities, each seeks its investment objective by investing all
of its investable assets in the Financial Services Portfolio, Infrastructure
Portfolio, Resources Portfolio and Consumer Products and Services Portfolio
(each a "Portfolio"), respectively. Each Portfolio is a separate investment
company. Because each such Underlying Theme Fund will invest only in its
corresponding Portfolio, that Underlying Theme Fund's shareholders will acquire
only an indirect interest in the investments of that Portfolio.
TEMPORARY DEFENSIVE STRATEGIES. The Underlying Theme Funds retain the
flexibility to respond promptly to changes in market and economic conditions.
Accordingly, in the interest of preserving shareholders' capital the Sub-adviser
may employ a temporary defensive investment strategy if it determines such a
strategy to be warranted due to market, economic or political conditions. Under
a defensive strategy, the Underlying Theme Funds may invest up to 100% of their
total assets in cash and/or high quality debt securities and money market
instruments. To the extent an Underlying Theme Fund adopts a temporary defensive
posture, it will not be invested so as to achieve directly its investment
objective.
In addition, pending investment of proceeds from new sales of the shares or to
meet its ordinary daily cash needs, the Underlying Theme Funds may hold cash
and/or may invest in high quality debt instruments and money market instruments.
The Fund may hold cash and/or may invest in money market instruments under
similar circumstances. Money market instruments in which the Underlying Theme
Funds and the Fund may invest include, but are not limited to, United States
government securities; high-grade commercial paper; bank certificates of
deposit; bankers' acceptances and repurchase agreements related to any of the
foregoing. "High-grade commercial paper" refers to commercial paper rated A-1 by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc., or P-1 by
Moody's Investors Service, Inc. or, if not rated, determined by the Sub-adviser
to be of comparable quality.
PORTFOLIO TURNOVER. The Fund's portfolio turnover rate is expected to be low and
is not anticipated to exceed 20% annually. The portfolio turnover rates of the
Underlying Theme Funds and their corresponding Portfolios have ranged from 35%
to 392% during their most recent fiscal years. There is no assurance that the
turnover rates of the Underlying Theme Funds and their corresponding Portfolios
will remain within this range during subsequent fiscal years. Higher turnover
rates may result in higher expenses being incurred by the Underlying Theme
Funds.
AFFILIATED PERSONS. The officers and trustees of the Trust currently serve as
officers and trustees of the Underlying Theme Funds. AIM and the Sub-adviser
also serves as investment adviser and/or administrator and sub-adviser and/or
sub-administrator, respectively, to the Underlying Theme Funds. Therefore,
conflicts may arise as these persons fulfill their fiduciary responsibilities to
the Fund and the Underlying Theme Funds.
Prospectus Page 12
<PAGE>
AIM NEW DIMENSION FUND
HOW TO INVEST
- --------------------------------------------------------------------------------
GENERAL. Advisor Class shares are offered through this Prospectus to (a)
trustees or other fiduciaries purchasing shares for employee benefit plans which
are sponsored by organizations which have at least 1,000 employees; (b) any
account with assets of at least $10,000 if (i) a financial planner, trust
company, bank trust department or registered investment adviser has investment
discretion over such account, and (ii) the account holder pays such person as
compensation for its advice and other services an annual fee of at least .50% on
the assets in the account ("Advisory Account"); (c) any account with assets of
at least $10,000 if (i) such account is established under a "wrap fee" program,
and (ii) the account holder pays the sponsor of such program an annual fee of at
least .50% on the assets in the account ("Wrap Fee Account"); (d) accounts
advised by INVESCO (NY), Inc. or one of the companies formerly affiliated with
Liechtenstein Global Trust AG, provided such accounts were invested in Advisor
Class shares of any of the AIM/GT Funds on June 1, 1998 and (e) any of the
companies composing or affiliated with AMVESCAP PLC. Financial planners, trust
companies, bank trust companies and registered investment advisers referenced in
subpart (b) and sponsors of "wrap fee" programs referenced in subpart (c) are
collectively referred to as "Financial Advisers." Investors in Wrap Fee Accounts
and Advisory Accounts may only purchase Advisor Class shares through Financial
Advisers who have entered into agreements with AIM Distributors or certain of
its affiliates. Some of these institutions (or their designees) may be
authorized to accept purchase orders on behalf of the Fund. Investors may be
charged a fee by their agents or brokers if they effect transactions other than
through a dealer.
All purchase orders will be executed at the public offering price next
determined after the purchase order is received. Orders received by authorized
institutions (or their designees) before the close of regular trading on the New
York Stock Exchange ("NYSE") (currently 4:00 p.m. Eastern Time, unless weather,
equipment failure or other factors contribute to an earlier closing time) on any
Business Day will be executed at the public offering price for the applicable
class of shares determined that day. Orders received by authorized institutions
(or their designees) before the close of regular trading on the NYSE on a
Business Day will be deemed to have been received by the Fund on such day and
will be effected that day, provided that such order is transmitted to the
Transfer Agent prior to the time set for the receipt of such orders. A "Business
Day" is any day Monday through Friday on which the NYSE is open for business.
The authorized institution (or its designee) will be responsible for forwarding
the investor's order to the Transfer Agent so that it will be received prior to
the required time.
THE FUND AND AIM DISTRIBUTORS RESERVE THE RIGHT TO REJECT ANY PURCHASE ORDER AND
TO SUSPEND THE OFFERING OF SHARES FOR A PERIOD OF TIME. In particular, the Fund
and AIM Distributors may reject purchase orders or exchanges by investors who
appear to follow, in the Sub-adviser's judgment, a market-timing strategy or
otherwise engage in excessive trading. See "How to Make Exchanges -- Limitations
on Purchase Orders and Exchanges."
Fiduciaries and Financial Advisers may be required to provide information
satisfactory to AIM Distributors concerning their eligibility to purchase
Advisor Class shares. For specific information on opening an account, please
contact your Financial Adviser or AIM Distributors.
AIM DISTRIBUTORS AND ITS AGENT RESERVE THE RIGHT AT ANY TIME (1) TO WITHDRAW ALL
OR ANY PART OF THE OFFERING MADE BY THIS PROSPECTUS; (2) TO REJECT ANY PURCHASE
OR EXCHANGE ORDER TO CANCEL ANY PURCHASE DUE TO NONPAYMENT OF THE PURCHASE
PRICE; (3) TO INCREASE, WAIVE OR LOWER THE MINIMUM INVESTMENT REQUIREMENTS; OR
(4) TO MODIFY ANY OF THE TERMS OR CONDITIONS OF PURCHASE OF SHARES OF THE FUND.
AIM Distributors and its agents will use their best efforts to provide notice of
any such actions through correspondence with broker-dealers and existing
shareholders, supplements to the AIM/ GT Funds' prospectuses, or other
appropriate means, and will provide sixty (60) days' notice in the case of
termination or material modification to the exchange privilege discussed under
the caption "How to Make Exchanges."
Prospectus Page 13
<PAGE>
AIM NEW DIMENSION FUND
PURCHASES BY BANK WIRE. Shares of the Fund may also be purchased by bank wire.
Bank wire purchases will be effected at the next determined public offering
price after the bank wire is received. A wire investment is considered received
when the Transfer Agent is notified that the bank wire has been credited to the
Fund. Prior telephonic or facsimile notice must be provided to the Transfer
Agent that a bank wire is being sent. A bank may charge a service fee for wiring
money to the Fund. The Transfer Agent currently does not charge a service fee
for facilitating wire purchases, but reserves the right to do so in the future.
For more information, please refer to the Shareholder Account Manual in this
Prospectus.
CERTIFICATES. Physical certificates representing the Fund's shares will not be
issued unless a written request is submitted to the Transfer Agent. Shares of
the Fund are recorded on a register by the Transfer Agent, and shareholders who
do not elect to receive certificates have the same rights of ownership as if
certificates had been issued to them. Redemptions and exchanges by shareholders
who hold certificates may take longer to effect than similar transactions
involving non-certificated shares because the physical delivery and processing
of properly executed certificates is required. ACCORDINGLY, THE FUND RECOMMENDS
THAT SHAREHOLDERS DO NOT REQUEST ISSUANCE OF CERTIFICATES.
PORTFOLIO REBALANCING PROGRAM. The Portfolio Rebalancing Program permits
eligible shareholders to establish and maintain an allocation across a range of
AIM/GT Funds. This Program automatically rebalances holdings of AIM/GT Funds to
the established allocation on a periodic basis. Under this Program, a
shareholder may predesignate, on a percentage basis, how the total value of his
or her holdings in a minimum of two, and a maximum of ten, AIM/GT Funds
("Personal Portfolio") is to be rebalanced on a monthly, quarterly, semiannual,
or annual basis.
Rebalancing under this Program will be effected through the exchange of shares
of one or more AIM/GT Funds in the shareholder's Personal Portfolio for shares
of the same class of one or more other AIM/GT Funds in the shareholder's
Personal Portfolio. See "How to Make Exchanges." If shares of the AIM/GT Fund(s)
in a shareholder's Personal Portfolio have appreciated during a rebalancing
period, the Program will result in shares of AIM/GT Fund(s) that have
appreciated most during the period being exchanged for shares of AIM/GT Fund(s)
that have appreciated least. SUCH EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A
SHAREHOLDER'S REALIZING A GAIN OR LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME
TAX PURPOSES. See "Dividends, Other Distributions and Federal Income Taxation."
Participation in this Program does not assure that a shareholder will profit
from purchases under the Program, nor does it prevent or lessen losses in a
declining market.
The Program will automatically rebalance the shareholder's Personal Portfolio on
the 28th day of the last month of the period chosen (or the immediately
preceding business day if the 28th is not a business day), subject to any
limitations below. The Program will not execute an exchange if the variance in a
shareholder's Personal Portfolio for a particular Fund would be 2% or less. In
predesignating percentages, shareholders must use whole percentages and totals
must equal 100%. Shareholders participating in the Program may not request
issuance of physical certificates representing a Fund's shares. The Fund and AIM
Distributors reserve the right to modify, suspend, or terminate the Program at
any time on 60 days' prior written notice to shareholders. A request to
participate in the Program must be received in good order at least five business
days prior to the next rebalancing date. Once a shareholder establishes the
Program for his or her Personal Portfolio, a shareholder cannot cancel or change
which rebalancing frequency, which Funds or what allocation percentages are
assigned to the Program, unless canceled or changed in writing and received by
the Transfer Agent in good order at least five business days prior to the
rebalancing date. Certain Financial Institutions may charge a fee for
establishing accounts relating to the Program. Investors should contact their
Financial Institution or AIM Distributors for more information.
Prospectus Page 14
<PAGE>
AIM NEW DIMENSION FUND
HOW TO MAKE EXCHANGES
- --------------------------------------------------------------------------------
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
any other AIM/GT Fund, based on their respective net asset values without
imposition of any sales charges, provided that the registration remains
identical. Exchange requests received in good order by the Transfer Agent before
the close of regular trading on the NYSE on any Business Day will be processed
at the net asset value calculated on that day.
EXCHANGES ARE NOT TAX-FREE AND MAY RESULT IN A SHAREHOLDER REALIZING A GAIN OR
LOSS, AS THE CASE MAY BE, FOR FEDERAL INCOME TAX PURPOSES. See "Dividends, Other
Distributions and Federal Income Taxation." In addition to the Fund, the AIM/GT
Funds include the following:
- AIM AMERICA VALUE FUND
- AIM DEVELOPING MARKETS FUND
- AIM DOLLAR FUND
- AIM EMERGING MARKETS FUND
- AIM EUROPE GROWTH FUND
- AIM GLOBAL CONSUMER PRODUCTS AND SERVICES FUND
- AIM GLOBAL FINANCIAL SERVICES FUND
- AIM GLOBAL GOVERNMENT INCOME FUND
- AIM GLOBAL GROWTH & INCOME FUND
- AIM GLOBAL HEALTH CARE FUND
- AIM GLOBAL HIGH INCOME FUND
- AIM GLOBAL INFRASTRUCTURE FUND
- AIM GLOBAL RESOURCES FUND
- AIM GLOBAL TELECOMMUNICATIONS FUND
- AIM INTERNATIONAL GROWTH FUND
- AIM JAPAN GROWTH FUND
- AIM LATIN AMERICAN GROWTH FUND
- AIM MID CAP GROWTH FUND
- AIM NEW PACIFIC GROWTH FUND
- AIM SMALL CAP EQUITY FUND
- AIM STRATEGIC INCOME FUND
- AIM WORLDWIDE GROWTH FUND
Investors in Wrap Fee Accounts and Advisory Accounts interested in making an
exchange should contact their Financial Advisers to request the prospectus of
the other AIM/GT Fund(s) being considered. Other investors should contact AIM
Distributors. The terms of the exchange offer may be modified at any time, on 60
days' prior written notice.
EXCHANGES BY TELEPHONE. A shareholder may give exchange information to his or
her Financial Adviser. Exchange orders will be accepted by telephone provided
that the exchange involves only uncertificated shares on deposit in the
shareholder's account or for which certificates have previously been deposited.
Shareholders automatically have telephone privileges to authorize exchanges. The
Fund, AIM Distributors and the Transfer Agent will not be liable for any loss or
damage for acting in good faith upon instructions received by telephone and
reasonably believed to be genuine. The Fund employs reasonable procedures to
confirm that instructions communicated by telephone are genuine prior to acting
upon instructions received by telephone, including requiring some form of
personal identification, providing written confirmation of such transactions,
and/or tape recording of telephone instructions.
LIMITATIONS ON PURCHASE ORDERS AND EXCHANGES. The AIM/GT Funds are not intended
to serve as vehicles for frequent trading in response to short-term fluctuations
in the market. Due to the disruptive effect that market-timing investment
strategies and excessive trading can have on efficient portfolio management,
each AIM/GT Fund and AIM Distributors reserve the right to refuse purchase
orders and exchanges by any person or group, if, in the Sub-adviser's judgment,
such person or group was following a market-timing strategy or was otherwise
engaging in excessive trading.
In addition, each AIM/GT Fund and AIM Distributors reserve the right to refuse
purchase orders and exchanges by any person or group if, in the Sub-adviser's
judgment, the Fund would not be able to invest the money effectively in
accordance with that Fund's investment objective and policies or would otherwise
potentially be adversely affected. Although an AIM/GT Fund will attempt to give
investors prior notice whenever it is reasonably able to do so, it may impose
the above restrictions at any time.
Finally, as described above, each AIM/GT Fund and AIM Distributors reserve the
right to reject any purchase order.
Prospectus Page 15
<PAGE>
AIM NEW DIMENSION FUND
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
Fund shares may be redeemed at their net asset value and redemption proceeds
will be sent within seven days of the execution of a redemption request. Fund
shares may be redeemed at their net asset value and redemption proceeds will be
sent within seven days of the execution of a redemption request.
Redemption requests may be transmitted to the Transfer Agent by telephone or by
mail, in accordance with the instructions provided in the Shareholder Account
Manual. Redemptions will be effected at the net asset value next determined
after the Transfer Agent or an authorized institution (or its designees) has
received the request in good order and any required supporting documentation
provided that orders received by an authorized institution (or its designees)
are transmitted to the Transfer Agent prior to the time set for receipt of such
orders. Redemption requests will not require a signature guarantee if the
redemption proceeds are to be sent either: (i) to the redeeming shareholder at
the shareholder's address of record as maintained by the Transfer Agent,
provided the shareholder's address of record has not been changed within the
preceding thirty days; or (ii) directly to a pre-designated bank, savings and
loan or credit union account ("Pre-Designated Account"). ALL OTHER REDEMPTION
REQUESTS MUST BE ACCOMPANIED BY A SIGNATURE GUARANTEE OF THE REDEEMING
SHAREHOLDER'S SIGNATURE. A signature guarantee can be obtained from any bank,
U.S. trust company, a member firm of a U.S. stock exchange or a foreign branch
of any of the foregoing or other eligible guarantor institution. A notary public
is not an acceptable guarantor.
Shareholders with Pre-Designated Accounts should request that redemption
proceeds be sent either by bank wire or by check. The minimum redemption amount
for a bank wire is $1,000. Shareholders requesting a bank wire should allow two
business days from the time the redemption request is effected for the proceeds
to be deposited in the shareholder's Pre-Designated Account. See "How to Redeem
Shares -- Other Important Redemption Information." Shareholders may change their
Pre-Designated Accounts only by a letter of instruction to the Transfer Agent
containing all account signatures, each of which must be guaranteed. The
Transfer Agent currently does not charge a bank wire service fee for each wire
redemption sent, but reserves the right to do so in the future. The
shareholder's bank may charge a bank wire service fee.
REDEMPTIONS BY TELEPHONE. Redemption requests may be made by telephone by
calling the Transfer Agent at the appropriate toll-free number provided in the
Shareholder Account Manual. Shareholders who hold certificates for shares may
not redeem by telephone. REDEMPTION REQUESTS MAY NOT BE MADE BY TELEPHONE FOR
THIRTY DAYS FOLLOWING ANY CHANGE OF THE SHAREHOLDER'S ADDRESS OF RECORD.
Shareholders automatically have telephone privileges to authorize redemptions.
The Fund, AIM Distributors and the Transfer Agent will not be liable for any
loss or damage for acting in good faith upon instructions received by telephone
and reasonably believed to be genuine. The Fund employs reasonable procedures to
confirm that instructions communicated by telephone are genuine prior to acting
upon instructions received by telephone, including requiring some form of
personal identification, providing written confirmation of such transactions,
and/or tape recording of telephone instructions.
REDEMPTIONS BY MAIL. Redemption requests should be mailed directly to the
Transfer Agent at the appropriate address provided in the Shareholder Account
Manual. As discussed above, requests for payment of redemption proceeds to a
party other than the shareholder of record and/or requests that redemption
proceeds be mailed to an address other than the shareholder's address of record
require a signature guarantee. In addition, if the shareholder's address of
record has been changed within the preceding thirty days, a signature guarantee
is required. Redemptions of shares for which certificates have been issued must
be accompanied by properly endorsed share certificates.
OTHER IMPORTANT REDEMPTION INFORMATION. A request for redemption will not be
processed until all of the necessary documentation has been received
Prospectus Page 16
<PAGE>
AIM NEW DIMENSION FUND
in good order. A shareholder in doubt as to what documents are required should
contact his or her Financial Adviser or the Transfer Agent.
Except in extraordinary circumstances and as permitted under the 1940 Act,
payment for shares redeemed by telephone or by mail will be made promptly after
receipt of a redemption request, if in good order, but not later than seven days
after the date the request is executed. Requests for redemption which are
subject to any special conditions or which specify a future or past effective
date cannot be accepted.
If the Transfer Agent is requested to redeem shares for which the Fund has not
yet received good payment, the Fund may delay payment of redemption proceeds
until the Transfer Agent has assured itself that good payment has been collected
for the purchase of the shares. In the case of purchases by check it can take up
to 10 business days to confirm that the check has cleared and good payment has
been received. Redemption proceeds will not be delayed when shares have been
paid for by wire or when the investor's account holds a sufficient number of
shares for which funds already have been collected.
AIM Distributors reserves the right to redeem the shares of any Advisory Account
or Wrap Fee Account if the amount invested in AIM/GT Funds through such account
is reduced to less than $500 through redemptions or other action by the
shareholder. Written notice will be given to the shareholder at least 60 days
prior to the date fixed for such redemption, during which time the shareholder
may increase the amount invested in AIM/GT Funds through such account to an
aggregate amount of $500 or more.
For additional information on how to redeem shares, see the Shareholder Account
Manual in this Prospectus, or contact your Financial Adviser.
Prospectus Page 17
<PAGE>
AIM NEW DIMENSION FUND
SHAREHOLDER ACCOUNT MANUAL
- --------------------------------------------------------------------------------
Purchase, exchange and redemption orders should be placed in accordance with
this Manual. It is recommended that investors in Wrap Fee Accounts and Advisory
Accounts make such orders through their Financial Advisor. PLEASE BE CAREFUL TO
REFERENCE "ADVISOR CLASS" IN ALL INSTRUCTIONS PROVIDED. For more information,
see "How to Invest," "How to Make Exchanges," "How to Redeem Shares" and
"Dividends, Other Distributions and Federal Income Taxation."
The Fund's Transfer Agent is GT GLOBAL INVESTOR SERVICES, INC.
INVESTMENTS BY MAIL
Send the completed Account Application (if initial purchase) or letter stating
Fund name, class of shares, shareholder's registered name and account number (if
subsequent purchase) with a check to:
AIM/GT Funds
P.O. Box 7345
San Francisco, CA 94120-7345
INVESTMENTS BY BANK WIRE
A new account may be opened by calling 1-800-223-2138 to obtain an account
number. WITHIN SEVEN DAYS OF PURCHASE A COMPLETED ACCOUNT APPLICATION CONTAINING
THE APPROPRIATE CERTIFIED TAXPAYER IDENTIFICATION NUMBER MUST BE SENT TO THE
ADDRESS PROVIDED ABOVE UNDER "INVESTMENTS BY MAIL." Wire instructions must state
Fund name, class of shares, shareholder's registered name and account number.
Bank wires should be sent through the Federal Reserve Bank Wire System to:
WELLS FARGO BANK N.A.
ABA 121000248
Attn: GT GLOBAL
Account No. 4023-050701
EXCHANGES BY TELEPHONE
Call the Transfer Agent at 1-800-223-2138.
EXCHANGES BY MAIL
Send complete instructions, including name of Fund exchanging from, class of
shares, amount of exchange, name of the AIM/GT Fund exchanging into,
shareholder's registered name and account number, to:
AIM/GT Funds
P.O. Box 7893
San Francisco, CA 94120-7893
REDEMPTIONS BY TELEPHONE
Call the Transfer Agent at 1-800-223-2138.
REDEMPTIONS BY MAIL
Send complete instructions, including name of Fund, class of shares, amount of
redemption, shareholder's registered name and account number, to:
AIM/GT Funds
P.O. Box 7893
San Francisco, CA 94120-7893
OVERNIGHT MAIL
Overnight mail services do not deliver to post office boxes. To send purchase,
exchange or redemption orders by overnight mail, follow the above instructions
but send to the following address:
GT Global Investor Services, Inc.
California Plaza
2121 N. California Boulevard
Suite 450
Walnut Creek, CA 94596
ADDITIONAL QUESTIONS
Shareholders with additional questions regarding purchase, exchange and
redemption procedures should call the Transfer Agent at 1-800-223-2138.
Prospectus Page 18
<PAGE>
AIM NEW DIMENSION FUND
CALCULATION OF NET ASSET VALUE
- --------------------------------------------------------------------------------
The Fund calculates its net asset value as of the close of regular trading on
the NYSE (currently 4:00 p.m. Eastern Time, unless weather, equipment failure or
other factors contribute to an earlier closing time) each Business Day. The
Fund's net asset value per share is computed by dividing the value of its assets
by the total number of Fund shares outstanding. Net asset value is determined
separately for each class of shares of the Fund. The assets of the Fund consist
primarily of the Underlying Theme Funds, which are valued at their respective
net asset values at the time of computation. Other Fund assets are valued at
current market price or, if unavailable, at fair value determined in good faith
by or under the direction of the Trust's Board of Trustees.
- --------------------------------------------------------------------------------
DIVIDENDS, OTHER DISTRIBUTIONS
AND FEDERAL INCOME TAXATION
- --------------------------------------------------------------------------------
DIVIDENDS AND OTHER DISTRIBUTIONS. The Fund annually declares and pays as a
dividend all of its net investment income, if any, which includes dividends paid
to it from each Underlying Theme Fund's net investment income (if any) less
applicable expenses. The Fund also annually distributes substantially all of its
realized net capital gains, if any, which consist of (1) distributions to it
from each Underlying Theme Fund's realized net capital gains, if any, and (2)
net gains realized from the Fund's disposition of shares of the Underlying Theme
Funds (which dispositions generally are occasioned by reallocating the Fund's
assets among the Underlying Theme Funds to reflect the MCSI weightings (see
"Investment Objective and Policies") or by the need to make distributions and/or
payments of redemption proceeds in excess of available cash). The Fund may make
an additional dividend or other distribution each year if necessary to avoid a
4% excise tax on certain undistributed income and gain.
Dividends and other distributions paid by the Fund with respect to all classes
of its shares are calculated in the same manner and at the same time. The per
share income dividends on Advisor Class shares will be higher than the per share
income dividends on shares of other classes of the Fund as a result of the
service and distribution fees applicable to those other shares. SHAREHOLDERS MAY
ELECT:
/ / to have all dividends and other distributions automatically reinvested in
additional Advisor Class shares of the Fund (or other AIM/GT Funds); or
/ / to receive dividends in cash and have other distributions automatically
reinvested in additional Advisor Class shares of the Fund (or other AIM/GT
Funds); or
/ / to receive other distributions in cash and have dividends automatically
reinvested in additional Advisor Class shares of the Fund (or other AIM/GT
Funds); or
/ / to receive dividends and other distributions in cash.
Automatic reinvestments in additional Advisor Class shares are made at net asset
value without imposition of a sales charge. IF NO ELECTION IS MADE BY A
SHAREHOLDER, ALL DIVIDENDS AND OTHER DISTRIBUTIONS WILL BE AUTOMATICALLY
REINVESTED IN ADDITIONAL ADVISOR CLASS SHARES OF THE FUND. Reinvestments in
another AIM/GT Fund may only be directed to an account with the identical
shareholder registration and account number. These elections may be changed by a
shareholder at any time; to be effective with respect to a distribution, the
shareholder or the shareholder's broker must contact the Transfer Agent by mail
or telephone at least 15 Business Days prior to the payment date. THE FEDERAL
INCOME TAX CONSEQUENCES OF DIVIDENDS AND OTHER DISTRIBUTIONS ARE THE SAME
WHETHER THEY ARE RECEIVED IN CASH OR REINVESTED IN ADDITIONAL SHARES.
Any dividend or other distribution paid by the Fund has the effect of reducing
the net asset value per share on the ex-distribution date by the amount
Prospectus Page 19
<PAGE>
AIM NEW DIMENSION FUND
thereof. Therefore, a dividend or other distribution paid shortly after a
purchase of shares would represent, in substance, a return of capital to the
shareholder (to the extent the distribution is paid on the shares so purchased)
even though subject to income tax, as discussed below.
TAXES. The Fund intends to continue to qualify for treatment as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"). In each taxable year that the Fund so qualifies, the Fund (but not its
shareholders) will be relieved of federal income tax on that part of its
investment company taxable income, consisting generally of net investment income
and net short-term capital gain ("taxable income"), and net capital gain (i.e.,
the excess of net long-term capital gain over net short-term capital loss) that
is distributed to its shareholders.
Dividends paid to the Fund from an Underlying Theme Fund's taxable income (which
may include net gains from certain foreign currency transactions) are included
in the Fund's taxable income, and dividends from the latter (whether paid in
cash or reinvested in additional shares) are taxable to the Fund's shareholders
as ordinary income to the extent of its earnings and profits. Distributions of
the Fund's net capital gain (consisting of (1) distributions to it from each
Underlying Theme Fund's net capital gain, when designated as such, and (2) net
gains realized from the Fund's disposition of an Underlying Theme Fund's shares
held for more than twelve months), when designated as such, are taxable to its
shareholders as long-term capital gains, regardless of how long they have held
their Fund shares and whether the distributions are paid in cash or reinvested
in additional shares.
Under the Taxpayer Relief Act of 1997, different maximum tax rates apply to a
noncorporate taxpayer's net capital gain depending on the taxpayer's holding
period and marginal rate of federal income tax -- generally, 28% for gain
recognized on securities held for more than one year but not more than 18 months
and 20% (10% for taxpayers in the 15% marginal tax bracket) for gain recognized
on securities held for more than 18 months. A notice issued by the Internal
Revenue Service in November 1997 permits the Fund to divide each net capital
gain distribution into a 28% rate gain distribution and a 20% rate gain
distribution (in accordance with the Fund's holding periods for the securities
it sold that generated the distributed gain) and requires its shareholders to
treat those portions accordingly.
The Fund provides federal tax information to its shareholders annually,
including information about dividends and capital gain distributions paid during
the preceding year. The information regarding capital gain distributions
designates the portions of those distributions that are subject to the different
maximum rates of tax applicable to noncorporate taxpayers' net capital gain
indicated above.
The Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate
shareholders who have not furnished to the Fund a correct taxpayer
identification number or a properly completed claim for exemption on Form W-8 or
W-9. Withholding at that rate also is required from dividends and capital gain
distributions payable to such shareholders who otherwise are subject to backup
withholding. Fund accounts opened via a bank wire purchase (see "How to Invest
- -- Purchases Through the Distributor") are considered to have uncertified
taxpayer identification numbers unless a completed Form W-8 or W-9 or Account
Application is received by the Transfer Agent within seven days after the
purchase. A shareholder should contact the Transfer Agent if the shareholder is
uncertain whether a proper taxpayer identification number is on file with the
Fund.
A redemption of Fund shares may result in taxable gain or loss to the redeeming
shareholder, depending upon whether the redemption proceeds are more or less
than the shareholder's adjusted basis for the redeemed shares. An exchange of
Fund shares for shares of another mutual fund generally will have similar tax
consequences. In addition, if Fund shares are purchased within 30 days before or
after redeeming other Fund shares at a loss, all or a part of the loss will not
be deductible and instead will increase the basis of the newly purchased shares.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders. See "Taxes" in
the Statement of Additional Information for a further discussion. There may be
other federal, state, local or foreign tax considerations applicable to a
particular investor. Prospective investors therefore are urged to consult their
tax advisers.
Prospectus Page 20
<PAGE>
AIM NEW DIMENSION FUND
MANAGEMENT
- --------------------------------------------------------------------------------
The Trust's Board of Trustees has overall responsibility for the operation of
the Fund. The Trust's Board of Trustees has approved all significant agreements
between the Trust on the one side and persons or companies furnishing services
to the Fund on the other, including the investment advisory and administrative
services agreement with AIM, the investment sub-advisory and sub-administration
agreement with the Sub-adviser, the agreements with AIM Distributors regarding
distribution of the Fund's shares, the custody agreement with State Street Bank
and Trust Company and the transfer agency agreement with GT Global Investor
Services, Inc. The day-to-day operations of the Fund are delegated to the
officers of the Trust, subject always to the objective and policies of the Fund
and to the general supervision of the Trust's Board of Trustees. See "Trustees
and Executive Officers" in the Statement of Additional Information for
information on the Trustees.
INVESTMENT MANAGEMENT AND ADMINISTRATION. Subject to the supervision and
direction of the Trust's Board of Trustees, AIM and the Sub-adviser will ensure
that the Fund's assets are invested in the Underlying Theme Funds according to
the formula and pre-determined percentages described in the "Investment
Objective and Policies" section of this Prospectus. AIM and the Sub-adviser will
determine how the Fund's assets will be invested in short-term investments and
place all purchase and sale orders for such instruments and for the Underlying
Theme Funds. AIM and the Sub-adviser provide the following administration
services to the Fund: furnishing corporate officers and clerical staff;
providing office space, services and equipment; and supervising all matters
relating to the Fund's operation. The Sub-adviser also serves as the Fund's
pricing and accounting agent. Finally, AIM and the Sub-adviser will initially
assume all costs of the Fund's operation, except for service and distribution
fees imposed on Class A, Class B and Class C shares and non-recurring and
extraordinary expenses. The Fund, as a shareholder in the Underlying Theme
Funds, indirectly will bear its proportionate share of any investment management
fees and other expenses paid by the Underlying Theme Funds.
AIM, 11 Greenway Plaza, Suite 100, Houston, Texas 77046, serves as the
investment adviser to the Fund pursuant to a master investment advisory
agreement, dated as of May 29, 1998 (the "Advisory Agreement"). AIM was
organized in 1976 and, together with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. The Sub-adviser, INVESCO (NY), Inc., 50 California
Street, 27th Floor, San Francisco, California 94111, and 1166 Avenue of the
Americas, New York, New York 10036, serves as the sub-adviser to the Fund
pursuant to an investment sub-advisory agreement dated as of May 29, 1998. Prior
to May 29, 1998, the Sub-adviser was known as Chancellor LGT Asset Management,
Inc. On May 29, 1998, Liechtenstein Global Trust AG ("LGT"), the former indirect
parent organization of the Sub-adviser, consummated a purchase agreement with
AMVESCAP PLC pursuant to which AMVESCAP PLC acquired LGT's Asset Management
Division, which included the Sub-adviser and certain other affiliates. As a
result of this transaction, the Sub-adviser is now an indirect wholly owned
subsidiary of AMVESCAP PLC. Prior to the sale, the Sub-adviser and its worldwide
asset management affiliates provided investment management and/or administrative
services to institutional, corporate and individual clients around the world
since 1969.
AIM and the Sub-adviser and their worldwide asset management affiliates provide
investment management and/or administrative services to institutional, corporate
and individual clients around the world. AIM and the Sub-adviser are both
indirect wholly owned subsidiaries of AMVESCAP PLC. AMVESCAP PLC and its
subsidiaries are an independent investment management group that has a
significant presence in the institutional and retail segment of the investment
management industry in North America and Europe, and a growing presence in Asia.
In addition to the investment resources of their Houston, San Francisco and New
York offices, AIM and the Sub-adviser draw upon the expertise, personnel, data
and systems of other offices, including investment offices in Atlanta, Boston,
Prospectus Page 21
<PAGE>
AIM NEW DIMENSION FUND
Dallas, Denver, Louisville, Miami, Portland (Oregon), Frankfurt, Hong Kong,
London, Singapore, Sydney, Tokyo and Toronto. In managing the Fund, the
Sub-adviser employs a team approach, taking advantage of its investment
resources around the world.
While the Fund will not be actively managed or have a portfolio manager, the
Underlying Theme Funds are actively managed by teams of investment
professionals. At least semi-annually the Fund will rebalance the Fund's assets
among the Underlying Theme Funds according to the MSCI weighting as of the last
business day of the preceding month.
DISTRIBUTION OF FUND SHARES. AIM Distributors, a registered broker/dealer and a
wholly owned subsidiary of AIM is the distributor of the Fund's Advisor Class
shares. The address of AIM Distributors is P.O. Box 4739, Houston, Texas
77210-4739. AIM, the Sub-adviser, or their affiliates may make ongoing payments
to Financial Advisors and others that facilitate the administration and
servicing of Advisor Class Shareholder accounts.
The Glass-Steagall Act and other applicable laws, among other things, generally
prohibit federally chartered or supervised banks from engaging in the business
of underwriting or distributing securities. Accordingly, AIM Distributors
intends to engage banks (if at all) only to perform administrative and
shareholder servicing functions. If a bank were prohibited from so acting, its
shareholder clients would be permitted to remain shareholders, and alternative
means for continuing the servicing of such shareholders would be sought. It is
not expected that shareholders would suffer any adverse financial consequences
as a result of any of these occurrences.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- --------------------------------------------------------------------------------
SPECIAL SERVICING AGREEMENT. Until the Special Servicing Agreement described
below is entered into, AIM and the Sub-adviser will pay all the expenses of the
Fund, excluding service and distribution fees imposed on Class A, Class B and
Class C shares and certain non-recurring and extraordinary expenses. Expenses
initially paid by AIM and the Sub-adviser will include fees and expenses of the
Fund's accounting agent; legal, auditing and accounting expenses; taxes; fees
and expenses of the Transfer Agent; fees and expenses of registering or
qualifying the Fund's shares for sale; fees and expenses of Trustees, officers
and employees of the Trust who are not affiliated with AIM or the Sub-adviser;
the cost of printing and distributing reports and notices to existing
shareholders; and fees and expenses incurred in connection with membership in
investment company organizations.
An exemptive application has been filed with the SEC requesting relief from
certain provisions of the 1940 Act to permit the Fund, AIM, the Sub-adviser, the
Underlying Theme Funds and the Transfer Agent to enter into a Special Servicing
Agreement ("Agreement"). If exemptive relief is obtained, all the Fund's
expenses except for service and distribution fees imposed on Class A, Class B
and Class C shares and certain non-recurring and extraordinary expenses will be
paid for in accordance with the Agreement. Under the Agreement, to the extent
that the aggregate expenses of the Fund are less than the estimated savings to
the Underlying Theme Funds from the operation of the Fund, each Underlying Theme
Fund will bear those expenses in proportion to the average daily value of its
shares owned by the Fund and/or the number of shareholder accounts at the Fund.
The estimated savings are expected to result from the reduction of the
Underlying Theme Funds' shareholder servicing costs due to the elimination of
separate shareholder accounts that either currently are or have potential to be
invested in the Underlying Theme Funds. The estimated savings produced by the
operation of the Fund may offset most, if not all, the expenses incurred by the
Fund other than service and distribution fees. To the extent that the Fund's
expenses exceed the aggregate financial benefits to the Underlying Theme Funds,
AIM and the Sub-adviser will pay that excess.
CONFIRMATIONS AND REPORTS TO SHAREHOLDERS. Each time a transaction is made that
affects a shareholder's account in the Fund, the shareholder will receive from
the Transfer Agent a confirmation
Prospectus Page 22
<PAGE>
AIM NEW DIMENSION FUND
statement reflecting the transaction. Confirmations for transactions effected
pursuant to the Fund's Automatic Investment Plan, Systematic Withdrawal Plan and
automatic dividend reinvestment program may be provided quarterly. Shortly after
the end of the Fund's fiscal year on December 31 and fiscal half-year on June 30
of each year, shareholders receive an annual and semiannual report,
respectively. In addition, the federal income status of distributions made by
the Fund to shareholders is reported after the end of each calendar year on Form
1099-DIV. Under certain circumstances, duplicate mailings of the foregoing
reports to the same household may be consolidated.
ORGANIZATION OF THE TRUST. The Trust was organized as a Delaware business trust
on May 7, 1998. Prior to May 29, 1998, the Trust operated under the name "GT
Global Series Trust," a Massachusetts business trust organized on August 26,
1996. The Trust currently consists of one series. From time to time, the Trust
may establish other series, each holding a distinct investment portfolio and
issuing a distinct series of the Trust's shares. Shares of each series are
entitled to one vote per share (with proportional voting for fractional shares)
and are transferable. Shareholders have no preemptive or conversion rights.
If any additional series of the Trust are established, on any matter submitted
to a vote of shareholders, shares of each series will be voted by its
shareholders individually when the matter affects the specific interest of that
series only, such as approval of its investment management arrangements. The
shares of the Trust's series would be voted in the aggregate on other matters,
such as the election of Trustees and ratification of the selection by the Board
of Trustees of the Trust's independent accountants.
Normally there will be no annual meeting of shareholders in any year, except as
required under the 1940 Act. The Fund would be required to hold a shareholders'
meeting if at any time less than a majority of the Trustees holding office had
been elected by shareholders. Trustees continue to hold office until their
successors are elected and have qualified. Fund shares do not have cumulative
voting rights, which means that the holders of a majority of the shares voting
for the election of Trustees can elect all the Trustees. A Trustee may be
removed upon a majority vote of the shareholders qualified to vote in the
election. Shareholders holding 10% of the Trust's outstanding voting shares may
call a meeting of shareholders for the purpose of voting upon the question of
removal of any Trustee or for any other purpose. The 1940 Act requires the Trust
to assist shareholders in calling such a meeting.
The Fund offers Advisor Class shares through this Prospectus to certain
investors. The Fund also offers Class A, Class B and Class C shares to investors
through a separate prospectus. Each class of shares will experience different
net asset values and dividends as a result of different expenses borne by each
class of shares. The per share net asset value and dividends of the Advisor
Class shares of the Fund generally will be higher than that of the Class A,
Class B and Class C shares of the Fund because of the higher expenses borne by
the Class A, Class B and Class C shares. Consequently, during comparable
periods, the Fund expects that the total return on an investment in shares of
the Advisor Class will be higher than the total return on Class A, Class B or
Class C shares.
Pursuant to the Trust's Agreement and Declaration of Trust, the Trust may issue
an unlimited number of shares of the Fund. Each share of the Fund represents an
interest in the Fund only, has a par value of $0.01 per share, represents an
equal proportionate interest in the Fund with other Fund shares and is entitled
to such dividends and other distributions out of the income earned and gain
realized on the assets belonging to the Fund as may be declared at the
discretion of the Board of Trustees. Each share of the Fund is equal in
earnings, assets and voting privileges, except that each class of shares of the
Fund normally has exclusive voting rights with respect to its distribution plan,
and each class bears the expenses, if any, related to the distribution of its
shares. Fund shares, when issued, are fully paid and nonassessable.
SHAREHOLDER INQUIRIES. Shareholder inquiries may be made by calling the Fund
toll-free at (800) 223-2138 or by writing to the Fund at 50 California Street,
27th Floor, San Francisco, CA 94111.
YEAR 2000 COMPLIANCE PROJECT. In providing services to the Fund, AIM, AIM
Distributors, the Transfer Agent and the Sub-adviser rely on internal computer
systems as well as external computer systems provided by third parties. Some of
these systems were not originally designed to distinguish between the year 1900
and the year 2000. This inability, if not corrected, could adversely affect the
services AIM, AIM Distributors, the Transfer Agent and the Sub-adviser and
others provide the Fund and its shareholders.
Prospectus Page 23
<PAGE>
AIM NEW DIMENSION FUND
To address this important issue, AIM, AIM Distributors, the Transfer Agent and
the Sub-adviser have undertaken a comprehensive Year 2000 Compliance Project
(the "Project"). The Project consists of four phases: (i) inventorying every
software and hardware system in use at AIM, AIM Distributors, the Transfer Agent
and the Sub-adviser, as well as remote, third-party systems on which AIM, AIM
Distributors, the Transfer Agent and the Sub-adviser rely; (ii) identifying
those systems that may not function properly after December 31, 1999; (iii)
correcting or replacing those systems that have been so identified; and (iv)
testing the processing of Fund data in all systems. Phase (i) has been
completed; phase (ii) is substantially completed; phase (iii) has commenced; and
phase (iv) is expected to commence during the third quarter of 1998. The Project
is scheduled to be completed by December 31, 1998. Following completion of the
Project, AIM, AIM Distributors and the Sub-adviser will review any systems
subsequently acquired to confirm that they are year 2000 compliant.
TRANSFER AGENT. Shareholder servicing, reporting and general transfer agent
functions for the Fund are performed by GT Global Investor Services, Inc. The
Transfer Agent is an affiliate of the Sub-adviser and AIM maintains offices at
California Plaza, 2121 N. California Boulevard, Suite 450, Walnut Creek, CA
94596.
CUSTODIAN. State Street Bank and Trust Company, 225 Franklin Street, Boston, MA
02110, is custodian of the assets of the Fund.
COUNSEL. The law firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue,
N.W., Washington, D.C. 20036-1800, acts as counsel to the Trust and to the Fund.
Kirkpatrick & Lockhart LLP also acts as counsel to the Sub-adviser, and the
Transfer Agent in connection with other matters.
INDEPENDENT ACCOUNTANTS. The Fund's independent accountants are Coopers &
Lybrand L.L.P., One Post Office Square, Boston, MA 02109. Coopers & Lybrand
L.L.P. conducts an annual audit of the Fund, assists in the preparation of the
Fund's federal and state income tax returns, and consults with the Trust and the
Fund as to matters of accounting, regulatory filings, and federal and state
income taxation.
MULTIPLE TRANSLATIONS OF THE PROSPECTUS. This Prospectus may be translated into
other languages. In the event of any inconsistency or ambiguity as to the
meaning of any word or phrase contained in a translation, the English text shall
prevail.
Prospectus Page 24
<PAGE>
AIM NEW DIMENSION FUND
PERFORMANCE
- --------------------------------------------------------------------------------
FUND PERFORMANCE INFORMATION. The Fund, from time to time, may include
information on its investment results and/or comparisons of its investment
results to various unmanaged indices or results of other mutual funds or groups
of mutual funds in advertisements, sales literature or reports furnished to
present or prospective shareholders.
In such materials, the Fund may quote its average annual total return
("Standardized Return"). Standardized Return is calculated separately for each
class of shares of the Fund. Standardized Return shows percentage rates
reflecting the average annual change in the value of an assumed investment in
the Fund at the end of a one-year period and at the end of five- and ten-year
periods, reduced by the maximum applicable sales charge imposed on sales of Fund
shares. If a one-, five- and/or ten-year period has not yet elapsed, data will
be provided as of the end of a shorter period corresponding to the life of the
Fund. Standardized Return assumes the reinvestment of all dividends and other
distributions.
In addition, in order to more completely represent the Fund's performance or
more accurately compare the performance to other measures of investment return,
the Fund also may include other total return performance data ("Non-Standardized
Return") in advertisements, sales literature and shareholder reports.
Non-Standardized Return reflects percentage rates of return encompassing all
elements of return (i.e., income and capital appreciation or depreciation) and
assumes reinvestment of all dividends and other distributions. Non-Standardized
Return may be quoted for the same or different periods as those for which
Standardized Return is quoted; it may consist of an aggregate or average annual
percentage rate of return, actual year-by-year rates or any combination thereof.
Non-Standardized Return may or may not take sales charges into account;
performance data calculated without taking the effect of sales charges into
account will be higher than data including the effect of such charges.
The Fund's performance data will reflect past performance and will not
necessarily be indicative of future results. The Fund's investment results will
vary from time to time depending upon market conditions, and the composition of
the Underlying Theme Funds' portfolios. These factors and possible differences
in calculation methods should be considered when comparing the Fund's investment
results with those published for other investment companies, other investment
vehicles and unmanaged indices. The Fund's results also should be considered
relative to the risks associated with its investment objective and policies. See
"Investment Results" in the Statement of Additional Information.
UNDERLYING THEME FUND PERFORMANCE. The Fund has a limited operating history and
therefore a limited performance record. Thus, the performance shown below is not
the performance of the Fund, but instead reflects the performance of the
Underlying Theme Funds. The following table shows the average annual total
returns of Class A and Class B shares of each Underlying Theme Fund for the most
recent one- and five-year periods (as applicable) and for the life of the
Underlying Theme Funds. The performance information reflects deduction of the
maximum applicable sales charges. Returns would be higher if these charges were
not reflected. The Fund invests in the Advisor Class shares of the Underlying
Theme Funds, which are not subject to sales charges and distribution and service
fees.
Prospectus Page 25
<PAGE>
AIM NEW DIMENSION FUND
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN THROUGH 4/30/98
------------------------------------------------------------
ONE YEAR FIVE YEARS LIFE OF FUND
----------------- ----------------- --------------------
UNDERLYING THEME FUND CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
- ----------------------------------------------------------------- ------- ------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Consumer Products and Services Fund.............................. 45.69% 47.14% n/a n/a 30.87%(1) 31.66%(1)
Financial Services Fund.......................................... 33.53% 34.54% n/a n/a 17.52%(2) 17.94%(2)
Health Care Fund................................................. 28.90% 29.62% 17.91% 18.25% 14.59%(3) 18.50%(4)
Infrastructure Fund.............................................. 8.37% 8.14% n/a n/a 9.93%(5) 10.17%(5)
Resources Fund................................................... 7.91% 7.80% n/a n/a 9.00%(6) 9.24%(6)
Telecommunications Fund.......................................... 36.09% 37.17% 14.34% 14.64% 13.67%(7) 14.85%(8)
</TABLE>
Past performance of the Underlying Theme Funds is not a guarantee of future
results for either the Underlying Theme Funds or the Fund. Further information
about each Underlying Theme Fund's performance is contained in its Annual Report
to Shareholders, which may be obtained without charge by calling (800) 824-1580
or contacting your financial adviser. Performance information for Advisor Class
shares has not been included because of the limited period for which Advisor
Class shares have been offered.
- ------------------
(1) The Consumer Products and Services Fund commenced operations on December 30,
1994.
(2) The Financial Services Fund commenced operations on May 31, 1994.
(3) Class A shares of the Health Care Fund were initially offered on August 7,
1989.
(4) Class B shares of the Health Care Fund were initially offered on April 1,
1993.
(5) The Infrastructure Fund commenced operations on May 31, 1994.
(6) The Resources Fund commenced operations on May 31, 1994.
(7) Class A shares of the Telecommunications Fund were initially offered on
January 27, 1992.
(8) Class B shares of the Telecommunications Fund were initially offered on
April 1, 1993.
Prospectus Page 26
<PAGE>
AIM NEW DIMENSION FUND
APPENDIX
- --------------------------------------------------------------------------------
The chart below shows the allocation of the 38 industries comprising the MSCI to
the Underlying Theme Funds as of April 30, 1998.
<TABLE>
<CAPTION>
CONSUMER
PRODUCTS AND FINANCIAL HEALTH INFRA- TELECOM-
MSCI AC WORLD INDEX INDUSTRY SERVICES SERVICES CARE STRUCTURE RESOURCES MUNICATIONS
- ---------------------------------------- ------------- ---------- ------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Aerospace and Military Technology....... X
Appliances & Household Durables......... X
Automobiles............................. X
Banking................................. X
Beverages & Tobacco..................... X
Broadcasting & Publishing............... X X
Building Materials & Components......... X
Business & Public Services.............. X
Chemicals............................... X
Construction & Housing.................. X
Data Processing & Reproduction.......... X
Electrical Components, Instruments...... X
Electrical & Electronics................ X X
Energy Equipment & Service.............. X
Energy Sources.......................... X
Financial Services...................... X
Food & Household Products............... X
Forest Products & Paper................. X
Gold Mines.............................. X
Health & Personal Care.................. X
Industrial Components................... X
Insurance............................... X
Leisure & Tourism....................... X
Machinery & Engineering................. X
Merchandising........................... X
Metals - Non Ferrous.................... X
Metals - Steel.......................... X
Misc. Materials & Commodities........... X
Multi-Industry.......................... X
Real Estate............................. X
Recreation, Consumer Goods.............. X
Telecommunications...................... X X
Textiles & Apparel...................... X
Transportation - Airlines............... X
Transportation - Road & Rail............ X
Transportation - Shipping............... X
Utilities Electrical & Gas.............. X
Wholesale & International Trade......... X
</TABLE>
Prospectus Page 27
<PAGE>
AIM NEW DIMENSION FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
AIM NEW DIMENSION FUND
AIM/GT FUNDS
AIM DISTRIBUTORS OFFERS A BROAD RANGE OF FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE FUNDS LISTED
BELOW, INCLUDING FEES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING MARKET
INVESTING AND THE RISKS OF INVESTING IN RELATED INDUSTRIES, PLEASE CONTACT
YOUR FINANCIAL ADVISER OR CALL 1-800-824-1580.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
AIM NEW DIMENSION FUND
Captures global growth opportunities by investing directly in the six global
theme funds
AIM WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
AIM INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.
AIM EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
AIM DEVELOPING MARKETS FUND
Invests in debt and equity securities of developing market issuers
/ / GLOBAL THEME FUNDS
AIM GLOBAL CONSUMER PRODUCTS AND
SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
AIM GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
AIM GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
AIM GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
AIM GLOBAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
AIM GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
AIM NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
AIM EUROPE GROWTH FUND
Focuses on investment opportunities in Europe
AIM LATIN AMERICAN GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
AIM SMALL CAP EQUITY FUND
Invests in equity securities of small U.S. companies
AIM MID CAP GROWTH FUND
Concentrates on medium-sized companies in the U.S.
AIM AMERICA VALUE FUND
Concentrates on equity securities of large cap U.S. companies believed to be
undervalued
AIM JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUND
AIM GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
INCOME FUNDS
AIM GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
AIM STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
AIM GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
AIM FLOATING RATE FUND
Invests primarily in senior secured floating rate loans that have the potential
to achieve a high level of current income
MONEY MARKET FUND
AIM DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
[LOGO]
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY AIM SERIES TRUST, AIM NEW
DIMENSION FUND, A I M ADVISORS, INC., INVESCO (NY), INC. OR A I M
DISTRIBUTORS, INC. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH
JURISDICTION.
NDM-PRO-2
<PAGE>
AIM NEW DIMENSION FUND
50 California Street, 27th Floor
San Francisco, California 94111
(415) 392-6181
Toll Free: (800) 824-1580
Statement of Additional Information
June 1, 1998
- --------------------------------------------------------------------------------
This Statement of Additional Information relates to Class A, Class B and Class C
shares of AIM New Dimension Fund (the "Fund"), a diversified series of AIM
Series Trust (the "Trust"), an open-end management investment company organized
as a Delaware business trust. The Fund seeks its investment objective by
investing substantially all of its assets in shares of the AIM theme funds: AIM
Global Consumer Products and Services Fund; AIM Global Financial Services Fund;
AIM Global Health Care Fund; AIM Global Infrastructure Fund; AIM Global
Resources Fund; and AIM Global Telecommunications Fund (collectively, the
"Underlying Theme Funds").
A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-adviser") serves as the
investment sub-adviser of and sub-administrator for, the Fund. The distributor
of the Fund's shares is A I M Distributors, Inc. ("AIM Distributors"). The
Fund's transfer agent is GT Global Investor Services, Inc. ("GT Services" or the
"Transfer Agent").
This Statement of Additional Information, which is not a prospectus, supplements
and should be read in conjunction with the Fund's current Prospectus dated June
1, 1998, a copy of which is available without charge by writing to the above
address or calling the Fund at the toll-free telephone number printed above.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Investment Objective and Policies........................................................................................ 2
Options, Futures and Currency Strategies................................................................................. 6
Risk Factors of the Underlying Theme Portfolios.......................................................................... 15
Investment Limitations................................................................................................... 21
Execution of Portfolio Transactions...................................................................................... 26
Trustees and Executive Officers.......................................................................................... 28
Management............................................................................................................... 30
Valuation of Fund Shares................................................................................................. 31
Information Relating to Sales and Redemptions............................................................................ 32
Taxes.................................................................................................................... 36
Additional Information................................................................................................... 38
Investment Results....................................................................................................... 39
Description of Debt Ratings.............................................................................................. 47
Financial Statements..................................................................................................... 49
</TABLE>
[LOGO]
Statement of Additional Information Page 1
<PAGE>
AIM NEW DIMENSION FUND
INVESTMENT OBJECTIVE AND
POLICIES
- --------------------------------------------------------------------------------
INVESTMENT POLICIES OF THE FUND
The following supplements the information contained in the Prospectus concerning
the investment policies of the Fund.
U.S. GOVERNMENT SECURITIES. The Fund may invest in various direct obligations of
the U.S. Treasury and obligations issued or guaranteed by the U.S. government or
one of its agencies or instrumentalities (collectively, "U.S. government
securities"). Among the U.S. government securities that may be held by the Fund
are securities that are supported by the full faith and credit of the United
States; securities that are supported by the right of the issuer to borrow from
the U.S. Treasury; and securities that are supported solely by the credit of the
instrumentality.
REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements. A
repurchase agreement is a transaction in which the Fund purchases securities
from a bank or recognized securities dealer and simultaneously commits to resell
the securities to the bank or dealer on an agreed-upon date or upon demand and
at a price reflecting a market rate of interest unrelated to the coupon rate or
maturity of the purchased securities. The Fund maintains custody of the
underlying securities prior to their repurchase; thus, the obligation of the
bank or dealer to pay the repurchase price on the date agreed to is, in effect,
secured by such securities. If the value of these securities is less than the
repurchase price, plus any agreed-upon additional amount, the other party to the
agreement must provide additional collateral so that at all times the collateral
is at least equal to the repurchase price, plus any agreed-upon additional
amount. The difference between the total amount to be received upon repurchase
of the securities and the price that was paid by the Fund upon acquisition is
accrued as interest and included in its net investment income. Repurchase
agreements carry certain risks not associated with direct investments in
securities, including possible declines in the market value of the underlying
securities and delays and costs to the Fund if the other party to a repurchase
agreement becomes insolvent.
INVESTMENT POLICIES OF THE UNDERLYING THEME FUNDS
The following supplements the information contained in the Prospectus concerning
the investment policies and limitations of the Underlying Theme Funds. More
information about the investment policies and restrictions and the investment
limitations of each Underlying Theme Fund is set forth in the Underlying Theme
Funds' prospectus and statement of additional information.
The Underlying Theme Funds are diversified series of AIM Investment Funds, Inc.
(the "Company"), a registered open-end management investment company. The AIM
Global Consumer Products and Services Fund ("Consumer Products and Services
Fund"), AIM Global Financial Services Fund ("Financial Services Fund"), AIM
Global Infrastructure Fund ("Infrastructure Fund"), and AIM Global Resources
Fund ("Resources Fund") (each, a "Feeder Fund," and, collectively, the "Feeder
Funds") each invests all of its investable assets in the Global Consumer
Products and Services Portfolio, Global Financial Services Portfolio, Global
Infrastructure Portfolio, and Global Resources Portfolio (each, a "Portfolio,"
and, collectively, the "Portfolios"), respectively.
Each Portfolio is a subtrust (a "series") of Global Investment Portfolio (an
open-end management investment company) with an investment objective that is
identical to that of its corresponding Underlying Theme Fund. Whenever the
phrase "all of the Underlying Theme Fund's investable assets" is used herein, it
means that the only investment securities held by a Feeder Fund will be its
interest in its corresponding Portfolio. A Feeder Fund may withdraw its
investment in its corresponding Portfolio at any time, if the Company's Board of
Trustees determines that it is in the best interests of the Feeder Fund and its
shareholders to do so. Upon any such withdrawal, a Feeder Fund's assets would be
invested in accordance with the investment policies of its corresponding
Portfolio described below and in the Underlying Theme Funds' prospectus.
The investment objective of each Feeder Fund is long-term capital growth. The
investment objectives of the AIM Global Health Care Fund ("Health Care Fund")
and the AIM Global Telecommunications Fund ("Telecommunications Fund") are
long-term capital appreciation and long-term capital growth, respectively. The
Portfolios and the Health Care Fund and the Telecommunications Fund, together,
are referred to herein as the "Underlying Theme Portfolios."
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SELECTION OF EQUITY INVESTMENTS. With respect to the Global Resources Portfolio,
the Sub-adviser has identified four areas that it expects will create investment
opportunities: (i) improving supply/demand fundamentals, which may result in
higher commodity prices; (ii) privatization of state-owned natural resource
businesses; (iii) management which can improve production efficiencies without
correspondingly increasing commodity prices; and (iv) service companies with
emerging technologies that can enhance productivity or reduce production costs.
Of course, there is no certainty that these factors will produce the anticipated
results.
With respect to the Telecommunications Fund, the Sub-adviser has identified four
areas that it expects will create investment opportunities: (i) deregulation of
companies in the industry, which will allow competition to promote greater
efficiencies; (ii) privatization of state-owned telecommunications businesses;
(iii) development of infrastructure in underdeveloped countries and upgrading of
services in other countries; and (iv) emerging technologies that will enhance
productivity and reduce costs in the telecommunications industry. Of course,
there is no certainty that these factors will produce the anticipated results.
There may be times when, in the opinion of the Sub-adviser, prevailing market,
economic or political conditions warrant reducing the proportion of the
Underlying Theme Portfolios' assets invested in equity securities and increasing
the proportion held in cash (U.S. dollars, foreign currencies or multinational
currency units) or invested in debt securities or high quality money market
instruments issued by corporations, or the United States, or a foreign
government. A portion of each Underlying Theme Portfolio's assets normally will
be held in cash (U.S. dollars, foreign currencies or multinational currency
units) or invested in foreign or domestic high quality money market instruments
pending investment of proceeds from new sales of Underlying Theme Fund shares to
provide for ongoing expenses and to satisfy redemptions.
For each Underlying Theme Portfolio's investment purposes, an issuer is
typically considered as located in a particular country if it (a) is organized
under the laws of or has its principal office in a particular country, or (b)
normally derives 50% or more of its total revenues from business in that
country, provided that, in the Sub-adviser's view, the value of such issuer's
securities will tend to reflect such country's development to a greater extent
than developments elsewhere. However, these are not absolute requirements, and
certain companies incorporated in a particular country and considered by the
Sub-adviser to be located in that country may have substantial foreign
operations or subsidiaries and/or export sales exceeding in size the assets or
sales in that country.
In certain countries, governmental restrictions and other limitations on
investment may affect a Underlying Theme Portfolio's ability to invest in such
countries. In addition, in some instances only special classes of securities may
be purchased by foreigners and the market prices, liquidity and rights with
respect to those securities may vary from shares owned by nationals. The
Sub-adviser is not aware at this time of the existence of any investment or
exchange control regulations which might substantially impair the operations of
the Underlying Theme Portfolios as described in the Underlying Theme Funds'
prospectus and statement of additional information. Restrictions may in the
future, however, make it undesirable to invest in certain countries. None of the
Underlying Theme Portfolios has a present intention of making any significant
investment in any country or stock market in which the Sub-adviser considers the
political or economic situation to threaten a Underlying Theme Portfolio with
substantial or total loss of its investment in such country or market.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. Each Underlying Theme Portfolio may
invest in the securities of investment companies within the limitations of the
Investment Company Act of 1940, as amended (the "1940 Act"). These limitations
currently provide that, in general, an Underlying Theme Portfolio may purchase
shares of an investment company unless (a) such a purchase would cause an
Underlying Theme Portfolio to own in the aggregate more than 3% of the total
outstanding voting stock of the investment company or (b) such a purchase would
cause the Underlying Theme Portfolio to have more than 5% of its assets invested
in the investment company or more than 10% of its assets invested in an
aggregate of all such investment companies. The foregoing restrictions do not
apply to the investment of the Feeder Funds in their corresponding Portfolios.
Investment in closed-end investment companies may involve the payment of
substantial premiums above the value of such companies' portfolio securities.
Each Underlying Theme Portfolio does not intend to invest in such investment
companies unless, in the judgment of the Sub-adviser, the potential benefits of
such investments justify the payment of any applicable premiums. The return on
such securities will be reduced by operating expenses of such companies,
including payments to the investment managers of those investment companies.
DEPOSITORY RECEIPTS. An Underlying Theme Portfolio may hold securities of
foreign issuers in the form of American Depository Receipts ("ADRs"), American
Depository Shares ("ADSs") and European Depository Receipts ("EDRs") or other
securities convertible into securities of eligible foreign issuers. These
securities may not necessarily be denominated in the same currency as the
securities for which they may be exchanged. ADRs and ADSs are typically issued
by an American bank or trust company and evidence ownership of underlying
securities issued by a foreign corporation. EDRs,
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AIM NEW DIMENSION FUND
which are sometimes referred to as Continental Depository Receipts ("CDRs"), are
issued in Europe typically by foreign banks and trust companies and evidence
ownership of either foreign or domestic securities. Generally, ADRs and ADSs in
registered form are designed for use in U.S. securities markets and EDRs in
bearer form are designed for use in European securities markets. For purposes of
each Underlying Theme Portfolio's investment policies, an Underlying Theme
Portfolio's investments in ADRs, ADSs and EDRs will be deemed to be investments
in the equity securities representing securities of foreign issuers into which
they may be converted.
ADR facilities may be established as either "unsponsored" or "sponsored." While
ADRs issued under these two types of facilities are in some respects similar,
there are distinctions between them relating to the rights and obligations of
ADR holders and the practices of market participants. A depository may establish
an unsponsored facility without participation by (or even necessarily the
acquiescence of) the issuer of the deposited securities, although typically the
depository requests a letter of non-objection from such issuer prior to the
establishment of the facility. Holders of unsponsored ADRs generally bear all
the costs of such facilities. The depository usually charges fees upon the
deposit and withdrawal of the deposited securities, the conversion of dividends
into U.S. dollars, the disposition of non-cash distributions, and the
performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass-through voting
rights to ADR holders in respect of the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depository. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain other costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other information to
the ADR holders at the request of the issuer of the deposited securities. The
Underlying Theme Portfolios may invest in both sponsored and unsponsored ADRs.
WARRANTS OR RIGHTS. Warrants or rights may be acquired by an Underlying Theme
Portfolio in connection with other securities or separately and provide the
Underlying Theme Portfolio with the right to purchase at a later date other
securities of the issuer.
LENDING OF UNDERLYING THEME PORTFOLIO SECURITIES. For the purpose of realizing
additional income, each Underlying Theme Portfolio may make secured loans of its
securities holdings amounting to not more than 30% of its total assets.
Securities loans are made to broker/dealers or institutional investors pursuant
to agreements requiring that the loans be continuously secured by collateral at
least equal at all times to the value of the securities lent plus any accrued
interest, "marked to market" on a daily basis. The Underlying Theme Portfolios
may pay reasonable administrative and custodial fees in connection with the loan
of their securities. While the securities loan is outstanding, an Underlying
Theme Portfolio will continue to receive the equivalent of the interest or
dividends paid by the issuer on the securities, as well as interest on the
investment of the collateral or a fee from the borrower. An Underlying Theme
Portfolio will have a right to call each loan and obtain the securities within
the stated settlement period. An Underlying Theme Portfolio will not have the
right to vote equity securities while they are being lent, but it may call in a
loan in anticipation of any important vote. Loans will only be made to firms
deemed by the Sub-adviser to be of good standing and will not be made unless, in
the judgment of the Sub-adviser, the consideration to be earned from such loans
would justify the risk. The risks in lending Underlying Theme Portfolio
securities, as with other extensions of secured credit, consist of possible
delays in receiving additional collateral or in recovery of the securities and
possible loss of rights in the collateral should the borrower fail financially.
COMMERCIAL BANK OBLIGATIONS. For the purposes of each Underlying Theme
Portfolio's investment policies with respect to bank obligations, obligations of
foreign branches of U.S. banks and of foreign banks are obligations of the
issuing bank and may be general obligations of the parent bank. Such obligations
may, however, be limited by the terms of a specific obligation and by government
regulation. As with investments in non-U.S. securities in general, investments
in the obligations of foreign branches of U.S. banks and of foreign banks may
subject each Underlying Theme Portfolio to investment risks that are different
in some respects from those of investments in obligations of U.S. issuers.
Although each Underlying Theme Portfolio will typically acquire obligations
issued and supported by the credit of U.S. or foreign banks having total assets
at the time of purchase of $1 billion or more, this $1 billion figure is not an
investment policy or restriction of each Underlying Theme Portfolio. For the
purposes of calculation with respect to the $1 billion figure, the assets of a
bank will be deemed to include the assets of its U.S. and non-U.S. branches.
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REPURCHASE AGREEMENTS. A repurchase agreement is a transaction in which an
Underlying Theme Portfolio purchases securities from a bank or recognized
securities dealer and simultaneously commits to resell the securities to the
bank or dealer on an agreed-upon date or upon demand and at a price reflecting a
market rate of interest unrelated to the coupon rate or maturity of the
purchased securities. Although repurchase agreements carry certain risks not
associated with direct investments in securities, including possible decline in
the market value of the underlying securities and delays and costs to the
Underlying Theme Portfolio if the other party to the repurchase agreement
becomes bankrupt, the Underlying Theme Portfolios intend to enter into
repurchase agreements only with banks and dealers believed by the Sub-adviser to
present minimal credit risks in accordance with guidelines established by the
Company's or Global Investment Portfolio's Board of Trustees (each a "Board"
and, collectively, the "Boards"), as applicable. The Sub-adviser will review and
monitor the creditworthiness of such institutions under the applicable Board's
general supervision.
Each Underlying Theme Portfolio will invest only in repurchase agreements
collateralized at all times in an amount at least equal to the repurchase price
plus accrued interest. To the extent that the proceeds from any sale of such
collateral upon a default in the obligation to repurchase were less than the
repurchase price, an Underlying Theme Portfolio would suffer a loss. If the
financial institution that is party to the repurchase agreement petitions for
bankruptcy or otherwise becomes subject to bankruptcy or other liquidation
proceedings, there may be restrictions on an Underlying Theme Portfolio's
ability to sell the collateral and it could suffer a loss. However, with respect
to financial institutions whose bankruptcy or liquidation proceedings are
subject to the U.S. Bankruptcy Code, each Underlying Theme Portfolio intends to
comply with provisions under such code that would allow the immediate resale of
such collateral. Each Underlying Theme Portfolio will not enter into a
repurchase agreement with a maturity of more than seven days if, as a result,
more than 15% of the value of its net assets (except for the Health Care Fund,
more than 10% of the value of its total assets) would be invested in such
repurchase agreements and other illiquid investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS. Each
Underlying Theme Portfolio's borrowings will not exceed 33 1/3% of its total
assets, I.E., the Underlying Theme Portfolio's total assets at all times will
equal at least 300% of the amount of outstanding borrowings. If market
fluctuations in the value of an Underlying Theme Portfolio's securities holdings
or other factors cause the ratio of its total assets to outstanding borrowings
to fall below 300%, within three days (excluding Sundays and holidays) of such
event that Underlying Theme Portfolio may be required to sell portfolio
securities to restore the 300% asset coverage, even though from an investment
standpoint such sales might be disadvantageous. Each Underlying Theme Portfolio
may also borrow up to 5% of its total assets for temporary or emergency purposes
other than to meet redemptions. Any borrowing by an Underlying Theme Portfolio
may cause greater fluctuation in the value of its shares than would be the case
if it did not borrow.
Each Underlying Theme Portfolio's fundamental investment limitations permit it
to borrow money for leveraging purposes. However, each Underlying Theme
Portfolio (except the Health Care Fund) is currently prohibited, pursuant to a
non-fundamental investment policy, from borrowing money in order to purchase
securities. Nevertheless, this policy may be changed in the future by the
applicable Board. If an Underlying Theme Portfolio employs leverage in the
future, it would be subject to certain additional risks. Use of leverage creates
an opportunity for greater growth of capital but would exaggerate any increases
or decreases in the net asset value of a Feeder Fund or an Underlying Theme
Portfolio. When the income and gains on securities purchased with the proceeds
of borrowings exceed the costs of such borrowings, an Underlying Theme
Portfolio's earnings or a Feeder Fund's net asset value will increase faster
than otherwise would be the case; conversely, if such income and gains fail to
exceed such costs, an Underlying Theme Portfolio's earnings or a Feeder Fund's
net asset value would decline faster than would otherwise be the case.
Each Underlying Theme Portfolio may enter into reverse repurchase agreements. A
reverse repurchase agreement is a borrowing transaction in which the Underlying
Theme Portfolio transfers possession of securities to another party, such as a
bank or broker/dealer, in return for cash, and agrees to repurchase the
securities in the future at an agreed upon price, which includes an interest
component. Each Underlying Theme Portfolio may also engage in "roll" borrowing
transactions, which involve the sale of Government National Mortgage Association
certificates or other securities together with a commitment (for which the
Underlying Theme Portfolio may receive a fee) to purchase similar, but not
identical, securities at a future date. Each Underlying Theme Portfolio will
segregate with a custodian, cash or liquid securities in an amount sufficient to
cover its obligations under "roll" transactions and reverse repurchase
agreements with broker/ dealers. No segregation is required for reverse
repurchase agreements with banks.
SHORT SALES. Each Underlying Theme Portfolio may make short sales of securities.
A short sale is a transaction in which an Underlying Theme Portfolio sells a
security in anticipation that the market price of that security will decline. An
Underlying Theme Portfolio may make short sales (i) as a form of hedging to
offset potential declines in long positions in
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AIM NEW DIMENSION FUND
securities it owns, or anticipates acquiring, or in similar securities, and (ii)
in order to maintain flexibility in its securities holdings.
When an Underlying Theme Portfolio makes a short sale of a security it does not
own, it must borrow the security sold short and deliver it to the broker/dealer
or other intermediary through which it made the short sale. The Underlying Theme
Portfolio may have to pay a fee to borrow particular securities and will often
be obligated to pay over any payments received on such borrowed securities.
An Underlying Theme Portfolio's obligation to replace the borrowed security when
the borrowing is called or expires will be secured by collateral deposited with
the intermediary. The Underlying Theme Portfolio will also be required to
deposit collateral with its custodian to the extent, if any, necessary so that
the value of both collateral deposits in the aggregate is at all times equal to
at least 100% of the current market value of the security sold short. Depending
on arrangements made with the intermediary from which it borrowed the security
regarding payment of any amounts received by it on such security, an Underlying
Theme Portfolio may not receive any payments (including interest) on its
collateral deposited with such intermediary.
If the price of the security sold short increases between the time of the short
sale and the time an Underlying Theme Portfolio replaces the borrowed security,
it will incur a loss; conversely, if the price declines, the Underlying Theme
Portfolio will realize a gain. Any gain will be decreased, and any loss
increased, by the transaction costs associated with the transaction. Although an
Underlying Theme Portfolio's gain is limited by the price at which it sold the
security short, its potential loss theoretically is unlimited.
No Underlying Theme Portfolio will make a short sale if, after giving effect to
the sale, the market value of the securities sold short exceeds 25% of the value
of its total assets or its aggregate short sales of the securities of any one
issuer exceed the lesser of 2% of its net assets or 2% of the securities of any
class of the issuer. Moreover, an Underlying Theme Portfolio may engage in short
sales only with respect to securities listed on a national securities exchange.
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OPTIONS, FUTURES AND CURRENCY
STRATEGIES
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SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
The use by the Underlying Theme Portfolios of options, futures contracts and
forward currency contracts ("Forward Contracts") involves special considerations
and risks, as described below. Risks pertaining to particular instruments are
described in the sections that follow.
(1) Successful use of most of these instruments depends upon the
Sub-adviser's ability to predict movements of the overall securities and
currency markets, which requires different skills than predicting changes in
the prices of individual securities. While the Sub-adviser is experienced in
the use of these instruments, there can be no assurance that any particular
strategy adopted will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of the
investments being hedged. For example, if the value of an instrument used in
a short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which the hedging instrument is traded. The effectiveness of
hedges using hedging instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly
or partially offsetting the negative effect of unfavorable price movements
in the investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if an Underlying Theme
Portfolio entered into a short hedge because the Sub-adviser projected a
decline in the price of a security in the Underlying Theme Portfolio's
portfolio, and the price of that security increased instead, the gain from
that increase might be wholly or partially offset by a decline in the price
of the hedging instrument. Moreover, if the price of the hedging instrument
declined by more than the increase in the price of the security, the
Underlying
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AIM NEW DIMENSION FUND
Theme Portfolio could suffer a loss. In either such case, the Underlying
Theme Portfolio would have been in a better position had it not hedged at
all.
(4) As described below, an Underlying Theme Portfolio might be required
to maintain assets as "cover," maintain segregated accounts or make margin
payments when it takes positions in instruments involving obligations to
third parties (I.E., instruments other than purchased options). If the
Underlying Theme Portfolio were unable to close out its positions in such
instruments, it might be required to continue to maintain such assets or
accounts or make such payments until the position expired or matured. The
requirements might impair the Underlying Theme Portfolio's ability to sell a
portfolio security or make an investment at a time when it would otherwise
be favorable to do so, or require that the Underlying Theme Portfolio sell a
portfolio security at a disadvantageous time. The Underlying Theme
Portfolio's ability to close out a position in an instrument prior to
expiration or maturity depends on the existence of a liquid secondary market
or, in the absence of such a market, the ability and willingness of the
other party to the transaction ("contra party") to enter into a transaction
closing out the position. Therefore, there is no assurance that any position
can be closed out at a time and price that is favorable to the Underlying
Theme Portfolio.
WRITING CALL OPTIONS
Each Underlying Theme Portfolio may write (sell) call options on securities,
indices and currencies. Call options generally will be written on securities and
currencies that, in the opinion of the Sub-adviser, are not expected to make any
major price moves in the near future but that, over the long term, are deemed to
be attractive investments for the Underlying Theme Portfolios.
A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
style) or on (European style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he or she may be
assigned an exercise notice, requiring him or her to deliver the underlying
security or currency against payment of the exercise price. This obligation
terminates upon the expiration of the call option, or such earlier time at which
the writer effects a closing purchase transaction by purchasing an option
identical to that previously sold.
Portfolio securities or currencies on which call options may be written will be
purchased solely on the basis of investment considerations consistent with each
Underlying Theme Portfolio's investment objective. When writing a call option,
an Underlying Theme Portfolio, in return for the premium, gives up the
opportunity for profit from a price increase in the underlying security or
currency above the exercise price, and retains the risk of loss should the price
of the security or currency decline. Unlike one who owns securities or
currencies not subject to an option, an Underlying Theme Portfolio has no
control over when it may be required to sell the underlying securities or
currencies, since most options may be exercised at any time prior to the
option's expiration. If a call option that an Underlying Theme Portfolio has
written expires, it will realize a gain in the amount of the premium; however,
such gain may be offset by a decline in the market value of the underlying
security or currency during the option period. If the call option is exercised,
the Underlying Theme Portfolio will realize a gain or loss from the sale of the
underlying security or currency, which will be increased or offset by the
premium received. The Underlying Theme Portfolios do not consider a security or
currency covered by a call option to be "pledged" as that term is used in their
policies that limit the pledging or mortgaging of their assets.
Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and an Underlying Theme Portfolio
will be obligated to sell the security or currency at less than its market
value.
The premium that an Underlying Theme Portfolio receives for writing a call
option is deemed to constitute the market value of an option. The premium the
Underlying Theme Portfolio will receive from writing a call option will reflect,
among other things, the current market price of the underlying investment, the
relationship of the exercise price to such market price, the historical price
volatility of the underlying investment, and the length of the option period. In
determining whether a particular call option should be written, the Sub-adviser
will consider the reasonableness of the anticipated premium and the likelihood
that a liquid secondary market will exist for those options.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit an Underlying Theme
Portfolio to write another call option on the underlying security or currency
with either a different exercise price or expiration date, or both.
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Each Underlying Theme Portfolio will pay transaction costs in connection with
the writing of options and in entering into closing purchase contracts.
Transaction costs relating to options activity are normally higher than those
applicable to purchases and sales of portfolio securities.
The exercise price of the options may be below, equal to or above the current
market values of the underlying securities, indices or currencies at the time
the options are written. From time to time, an Underlying Theme Portfolio may
purchase an underlying security or currency for delivery in accordance with the
exercise of an option, rather than delivering such security or currency from its
portfolio. In such cases, additional costs will be incurred.
An Underlying Theme Portfolio will realize a profit or loss from a closing
purchase transaction if the cost of the transaction is less or more,
respectively, than the premium received from writing the option. Because
increases in the market price of a call option generally will reflect increases
in the market price of the underlying security or currency, any loss resulting
from the repurchase of a call option is likely to be offset in whole or in part
by appreciation of the underlying security or currency owned by an Underlying
Theme Portfolio.
WRITING PUT OPTIONS
Each Underlying Theme Portfolio may write put options on securities, indices and
currencies. A put option gives the purchaser of the option the right to sell,
and the writer (seller) the obligation to buy, the underlying security or
currency at the exercise price at any time until (American style) or on
(European style) the expiration date. The operation of put options in other
respects, including their related risks and rewards, is substantially identical
to that of call options.
An Underlying Theme Portfolio generally would write put options in circumstances
where the Sub-adviser wishes to purchase the underlying security or currency for
the Underlying Theme Portfolio's holdings at a price lower than the current
market price of the security or currency. In such event, an Underlying Theme
Portfolio would write a put option at an exercise price that, reduced by the
premium received on the option, reflects the lower price it is willing to pay.
Since the Underlying Theme Portfolio would also receive interest on debt
securities or currencies maintained to cover the exercise price of the option,
this technique could be used to enhance current return during periods of market
uncertainty. The risk in such a transaction would be that the market price of
the underlying security or currency would decline below the exercise price less
the premium received.
Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and an Underlying Theme
Portfolio will be obligated to purchase the security or currency at greater than
its market value.
PURCHASING PUT OPTIONS
Each Underlying Theme Portfolio may purchase put options on securities, indices
and currencies. As the holder of a put option, an Underlying Theme Portfolio
would have the right to sell the underlying security or currency at the exercise
price at any time until (American style) or on (European style) the expiration
date. An Underlying Theme Portfolio may enter into closing sale transactions
with respect to such options, exercise such option or permit such option to
expire.
Each Underlying Theme Portfolio may purchase a put option on an underlying
security or currency ("protective put") owned by the Underlying Theme Portfolio
in order to protect against an anticipated decline in the value of the security
or currency. Such hedge protection is provided only during the life of the put
option when the Underlying Theme Portfolio, as the holder of the put option, is
able to sell the underlying security or currency at the put exercise price
regardless of any decline in the underlying security's market price or
currency's exchange value. The premium paid for the put option and any
transaction costs would reduce any profit otherwise available for distribution
when the security or currency is eventually sold.
An Underlying Theme Portfolio may also purchase put options at a time when it
does not own the underlying security or currency. By purchasing put options on a
security or currency it does not own, that Underlying Theme Portfolio seeks to
benefit from a decline in the market price of the underlying security or
currency. If the put option is not sold when it has remaining value, and if the
market price of the underlying security or currency remains equal to or greater
than the exercise price during the life of the put option, the Underlying Theme
Portfolio will lose its entire investment in the put option. In order for the
purchase of a put option to be profitable, the market price of the underlying
security or currency must decline sufficiently below the exercise price to cover
the premium and transaction costs, unless the put option is sold in a closing
sale transaction.
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PURCHASING CALL OPTIONS
Each Underlying Theme Portfolio may purchase call options on securities, indices
and currencies. As the holder of a call option, an Underlying Theme Portfolio
would have the right to purchase the underlying security or currency at the
exercise price at any time until (American style) or on (European style) the
expiration date. An Underlying Theme Portfolio may enter into closing sale
transactions with respect to such options, exercise such options or permit such
options to expire.
Call options may be purchased by an Underlying Theme Portfolio for the purpose
of acquiring the underlying security or currency for its portfolio. Utilized in
this fashion, the purchase of call options would enable an Underlying Theme
Portfolio to acquire the security or currency at the exercise price of the call
option plus the premium paid. At times, the net cost of acquiring the security
or currency in this manner may be less than the cost of acquiring the security
or currency directly. This technique may also be useful to an Underlying Theme
Portfolio in purchasing a large block of securities that would be more difficult
to acquire by direct market purchases. So long as it holds such a call option,
rather than the underlying security or currency itself, the Underlying Theme
Portfolio is partially protected from any unexpected decline in the market price
of the underlying security or currency and, in such event, could allow the call
option to expire, incurring a loss only to the extent of the premium paid for
the option.
An Underlying Theme Portfolio may also purchase call options on underlying
securities or currencies it owns to avoid realizing losses that would result in
a reduction of its current return. For example, where an Underlying Theme
Portfolio has written a call option on an underlying security or currency having
a current market value below the price at which it purchased the security or
currency, an increase in the market price could result in the exercise of the
call option written by the Underlying Theme Portfolio and the realization of a
loss on the underlying security or currency. Accordingly, the Underlying Theme
Portfolio could purchase a call option on the same underlying security or
currency, which could be exercised to fulfill its delivery obligations under its
written call (if it is exercised). This strategy could allow the Underlying
Theme Portfolio to avoid selling the portfolio security or currency at a time
when it has an unrealized loss; however, the Underlying Theme Portfolio would
have to pay a premium to purchase the call option plus transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of each
Underlying Theme Portfolio's total assets at the time of each purchase.
An Underlying Theme Portfolio may attempt to accomplish objectives similar to
those involved in using Forward Contracts by purchasing put or call options on
currencies. A put option gives an Underlying Theme Portfolio as purchaser the
right (but not the obligation) to sell a specified amount of currency at the
exercise price at any time until (American style) or on (European style) the
expiration date of the option. A call option gives an Underlying Theme Portfolio
as purchaser the right (but not the obligation) to purchase a specified amount
of currency at the exercise price at any time until (American style) or on
(European style) the expiration date of the option. An Underlying Theme
Portfolio might purchase a currency put option, for example, to protect itself
against a decline in the dollar value of a currency in which it holds or
anticipates holding securities. If the currency's value should decline against
the dollar, the loss in currency value should be offset, in whole or in part, by
an increase in the value of the put. If the value of the currency instead should
rise against the dollar, any gain to an Underlying Theme Portfolio would be
reduced by the premium it had paid for the put option. A currency call option
might be purchased, for example, in anticipation of, or to protect against, a
rise in the value against the dollar of a currency in which an Underlying Theme
Portfolio anticipates purchasing securities.
Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (I.E., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation) and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. An Underlying Theme Portfolio will not purchase an OTC option unless it
believes that daily valuations for such options are readily obtainable. OTC
options differ from exchange-traded options in that OTC options are transacted
with dealers directly and not through a clearing corporation (which guarantees
performance). Consequently, there is a risk of non-performance by the dealer.
Since no exchange is involved, OTC options are valued on the basis of an average
of the last bid prices obtained from dealers, unless a quotation from only one
dealer is available, in which case only that dealer's price will be used. In the
case of OTC options, there can be no assurance that a liquid secondary market
will exist for any particular option at any specific time.
The staff of the Securities and Exchange Commission ("SEC") considers purchased
OTC options to be illiquid securities. An Underlying Theme Portfolio may also
sell OTC options and, in connection therewith, segregate assets or cover its
obligations with respect to OTC options written by it. The assets used as cover
for OTC options written by an Underlying Theme Portfolio will be considered
illiquid unless the OTC options are sold to qualified dealers who agree that the
Underlying Theme Portfolio may repurchase any OTC option it writes at a maximum
price to be calculated by a formula
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set forth in the option agreement. The cover for an OTC option written subject
to this procedure would be considered illiquid only to the extent that the
maximum repurchase price under the formula exceeds the intrinsic value of the
option.
An Underlying Theme Portfolio's ability to establish and close out positions in
exchange-listed options depends on the existence of a liquid market. Each
Underlying Theme Portfolio intends to purchase or write only those
exchange-traded options for which there appears to be a liquid secondary market.
However, there can be no assurance that such a market will exist at any
particular time. Closing transactions can be made for OTC options only by
negotiating directly with the contra party or by a transaction in the secondary
market if any such market exists. Although an Underlying Theme Portfolio will
enter into OTC options only with contra parties that are expected to be capable
of entering into closing transactions with it, there is no assurance that the
Underlying Theme Portfolio will in fact be able to close out an OTC option
position at a favorable price prior to expiration. In the event of insolvency of
the contra party, the Underlying Theme Portfolio might be unable to close out an
OTC option position at any time prior to its expiration.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When an Underlying Theme
Portfolio writes a call on an index, it receives a premium and agrees that,
prior to the expiration date, the purchaser of the call, upon exercise of the
call, will receive from the Underlying Theme Portfolio an amount of cash if the
closing level of the index upon which the call is based is greater than the
exercise price of the call. The amount of cash is equal to the difference
between the closing price of the index and the exercise price of the call times
a specified multiple (the "multiplier"), which determines the total dollar value
for each point of such difference. When an Underlying Theme Portfolio buys a
call on an index, it pays a premium and has the same rights as to such call as
are indicated above. When an Underlying Theme Portfolio buys a put on an index,
it pays a premium and has the right, prior to the expiration date, to require
the seller of the put, upon the Underlying Theme Portfolio's exercise of the
put, to deliver to the Underlying Theme Portfolio an amount of cash if the
closing level of the index upon which the put is based is less than the exercise
price of the put, which amount of cash is determined by the multiplier, as
described above for calls. When the Underlying Theme Portfolio writes a put on
an index, it receives a premium and the purchaser has the right, prior to the
expiration date, to require the Underlying Theme Portfolio to deliver to it an
amount of cash equal to the difference between the closing level of the index
and the exercise price times the multiplier, if the closing level is less than
the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when an Underlying Theme
Portfolio writes a call on an index it cannot provide in advance for its
potential settlement obligations by acquiring and holding the underlying
securities. An Underlying Theme Portfolio can offset some of the risk of writing
a call index option position by holding a diversified portfolio of securities
similar to those on which the underlying index is based. However, an Underlying
Theme Portfolio cannot, as a practical matter, acquire and hold a portfolio
containing exactly the same securities as underlie the index and, as a result,
bears a risk that the value of the securities held will vary from the value of
the index.
Even if an Underlying Theme Portfolio could assemble a securities portfolio that
exactly reproduced the composition of the underlying index, it still would not
be fully covered from a risk standpoint because of the "timing risk" inherent in
writing index options. When an index option is exercised, the amount of cash
that the holder is entitled to receive is determined by the difference between
the exercise price and the closing index level on the date when the option is
exercised. As with other kinds of options, the Underlying Theme Portfolio, as
the call writer, will not know that it has been assigned until the next business
day at the earliest. The time lag between exercise and notice of assignment
poses no risk for the writer of a covered call on a specific underlying
security, such as common stock, because there the writer's obligation is to
deliver the underlying security, not to pay its value as of a fixed time in the
past. So long as the writer already owns the underlying security, it can satisfy
its settlement obligations by simply delivering it, and the risk that its value
may have declined since the exercise date is borne by the exercising holder. In
contrast, even if the writer of an index call holds securities that exactly
match the composition of the underlying index, it will not be able to satisfy
its assignment obligations by delivering those securities against payment of the
exercise price. Instead, it will be required to pay cash in an amount based on
the closing index value on the exercise date; and by the time it learns that it
has been assigned, the index may have declined, with a corresponding decline in
the value of its securities portfolio. This "timing risk" is an inherent
limitation on the ability of index call writers to cover their risk exposure by
holding securities positions.
If an Underlying Theme Portfolio purchases an index option and exercises it
before the closing index value for that day is available, it runs the risk that
the level of the underlying index may subsequently change. If such a change
causes the
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exercised option to fall out-of-the-money, the Underlying Theme Portfolio will
be required to pay the difference between the closing index value and the
exercise price of the option (times the applicable multiplier) to the assigned
writer.
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
Each Underlying Theme Portfolio may enter into interest rate, currency or stock
index futures contracts (collectively, "Futures" or "Futures Contracts") as a
hedge against changes in prevailing levels of interest rates, currency exchange
rates or stock price levels, respectively, in order to establish more definitely
the effective return on securities or currencies held or intended to be acquired
by it. An Underlying Theme Portfolio's hedging may include sales of Futures as
an offset against the effect of expected increases in interest rates, and
decreases in currency exchange rates and stock prices, and purchases of Futures
as an offset against the effect of expected declines in interest rates, and
increases in currency exchange rates or stock prices.
Each Underlying Theme Portfolio only will enter into Futures Contracts that are
traded on futures exchanges and are standardized as to maturity date and
underlying financial instrument. Futures exchanges and trading thereon in the
United States are regulated under the Commodity Exchange Act by the Commodity
Futures Trading Commission ("CFTC"). Futures are exchanged in London at the
London International Financial Futures Exchange.
Although techniques other than sales and purchases of Futures Contracts could be
used to reduce an Underlying Theme Portfolio's exposure to interest rate,
currency exchange rate and stock market fluctuations, an Underlying Theme
Portfolio may be able to hedge its exposure more effectively and at a lower cost
through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. A stock
index Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the stock index value at the close of trading on the contract
and the price at which the Futures Contract is originally struck; no physical
delivery of stocks comprising the index is made. Brokerage fees are incurred
when a Futures Contract is bought or sold, and margin deposits must be
maintained at all times the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments or currencies, Futures Contracts usually are closed out
before the delivery date. Closing out an open Futures Contract sale or purchase
is effected by entering into an offsetting Futures Contract purchase or sale,
respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Underlying Theme Portfolio
realizes a gain; if it is more, the Underlying Theme Portfolio realizes a loss.
Conversely, if the offsetting sale price is more than the original purchase
price, the Underlying Theme Portfolio realizes a gain; if it is less, the
Underlying Theme Portfolio realizes a loss. The transaction costs must also be
included in these calculations. There can be no assurance, however, that an
Underlying Theme Portfolio will be able to enter into an offsetting transaction
with respect to a particular Futures Contract at a particular time. If an
Underlying Theme Portfolio is not able to enter into an offsetting transaction,
it will continue to be required to maintain the margin deposits on the Futures
Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one Futures Contract of September Deutschemarks on an exchange
may be fulfilled at any time before delivery under the Futures Contract is
required (I.E., on a specified date in September, the "delivery month") by the
purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance, the difference between the price at which the
Futures Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Underlying
Theme Portfolio.
Each Underlying Theme Portfolio's Futures transactions will be entered into for
hedging purposes only; that is, Futures Contracts will be sold to protect
against a decline in the price of securities or currencies that an Underlying
Theme Portfolio owns, or Futures Contracts will be purchased to protect an
Underlying Theme Portfolio against an increase in the price of securities or
currencies it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by an Underlying Theme Portfolio in order to initiate Futures trading
and maintain its open positions in Futures Contracts. A margin deposit made when
the Futures Contract is entered into ("initial margin") is intended to ensure
the Underlying Theme Portfolio's performance under the Futures Contract. The
margin required for a particular Futures Contract is set by the exchange on
which the Futures Contract is traded and may be significantly modified from time
to time by the exchange during the term of the Futures Contract.
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Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Underlying Theme Portfolio entered into
the Futures Contract will be made on a daily basis as the price of the
underlying security, currency or index fluctuates making the Futures Contract
more or less valuable, a process known as marking-to-market.
RISKS OF USING FUTURES CONTRACTS. The prices of Futures Contracts are
volatile and are influenced by, among other things, actual and anticipated
changes in interest rates and currency exchange rates, and in stock market
movements, which in turn are affected by fiscal and monetary policies and
national and international political and economic events.
There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in an Underlying Theme
Portfolio's portfolio being hedged. The degree of imperfection of correlation
depends upon circumstances such as variations in speculative market demand for
Futures and for securities or currencies, including technical influences in
Futures trading; and differences between the financial instruments being hedged
and the instruments underlying the standard Futures Contracts available for
trading. A decision of whether, when and how to hedge involves skill and
judgment, and even a well-conceived hedge may be unsuccessful to some degree
because of unexpected market behavior or interest or currency rate trends.
Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and options on Futures Contracts prices during a single trading day.
The daily limit establishes the maximum amount that the price of a Futures
Contract or option may vary either up or down from the previous day's settlement
price at the end of a trading session. Once the daily limit has been reached in
a particular type of Futures Contract or option, no trades may be made on that
day at a price beyond that limit. The daily limit governs only price movement
during a particular trading day and therefore does not limit potential losses,
because the limit may prevent the liquidation of unfavorable positions. Futures
Contracts and option prices have occasionally moved to the daily limit for
several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of positions and subjecting some traders to substantial
losses.
If an Underlying Theme Portfolio were unable to liquidate a Futures or option on
Futures position due to the absence of a liquid secondary market or the
imposition of price limits, it could incur substantial losses. The Underlying
Theme Portfolio would continue to be subject to market risk with respect to the
position. In addition, except in the case of purchased options, the Underlying
Theme Portfolio would continue to be required to make daily variation margin
payments and might be required to maintain the position being hedged by the
Future or option or to maintain cash or securities in a segregated account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities or currencies
except that options on Futures Contracts give the purchaser the right, in return
for the premium paid, to assume a position in a Futures Contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the delivery of the Futures position by the writer of
the option to the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's Futures margin account, which represents the
amount by which the market price of the Futures Contract, at exercise, exceeds
(in the case of a call) or is less
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than (in the case of a put) the exercise price of the option on the Futures
Contract. If an option is exercised on the last trading day prior to the
expiration date of the option, the settlement will be made entirely in cash
equal to the difference between the exercise price of the option and the closing
level of the securities, currencies or index upon which the Futures Contract is
based on the expiration date. Purchasers of options who fail to exercise their
options prior to the exercise date suffer a loss of the premium paid.
The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can serve as a limited long hedge, using a strategy similar to that
used for writing options on securities, foreign currencies or indices.
If an Underlying Theme Portfolio writes an option on a Futures Contract, it will
be required to deposit initial and variation margin pursuant to requirements
similar to those applicable to Futures Contracts. Premiums received from the
writing of an option on a Futures Contract are included in the initial margin
deposit.
An Underlying Theme Portfolio may seek to close out an option position by
selling an option covering the same Futures Contract and having the same
exercise price and expiration date. The ability to establish and close out
positions on such options is subject to the maintenance of a liquid secondary
market.
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
To the extent that an Underlying Theme Portfolio enters into Futures Contracts,
options on Futures Contracts and options on foreign currencies traded on a
CFTC-regulated exchange, in each case other than for bona fide hedging purposes
(as defined by the CFTC), the aggregate initial margin and premiums required to
establish those positions (excluding the amount by which options are
"in-the-money") will not exceed 5% of the liquidation value of the Underlying
Theme Portfolio, after taking into account unrealized profits and unrealized
losses on any contracts it has entered into. In general, a call option on a
Futures Contract is "in-the-money" if the value of the underlying Futures
Contract exceeds the strike, I.E., exercise, price of the call; a put option on
a Futures Contract is "in-the-money" if the value of the underlying Futures
Contract is exceeded by the strike price of the put. This guideline may be
modified by the applicable Board, without a shareholder vote. This limitation
does not limit the percentage of an Underlying Theme Portfolio's assets at risk
to 5%.
FORWARD CONTRACTS
A Forward Contract is an obligation, usually arranged with a commercial bank or
other currency dealer, to purchase or sell a currency against another currency
at a future date and price as agreed upon by the parties. An Underlying Theme
Portfolio either may accept or make delivery of the currency at the maturity of
the Forward Contract. An Underlying Theme Portfolio may also, if its contra
party agrees prior to maturity, enter into a closing transaction involving the
purchase or sale of an offsetting contract.
An Underlying Theme Portfolio engages in forward currency transactions in
anticipation of, or to protect itself against, fluctuations in exchange rates.
An Underlying Theme Portfolio might sell a particular foreign currency forward,
for example, when it holds bonds denominated in a foreign currency but
anticipates, and seeks to be protected against, a decline in the currency
against the U.S. dollar. Similarly, an Underlying Theme Portfolio might sell the
U.S. dollar forward when it holds bonds denominated in U.S. dollars but
anticipates, and seeks to be protected against, a decline in the U.S. dollar
relative to other currencies. Further, an Underlying Theme Portfolio might
purchase a currency forward to "lock in" the price of securities denominated in
that currency that it anticipates purchasing.
Forward Contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A Forward
Contract generally has no deposit requirement, and no commissions are charged at
any stage for trades. Each Underlying Theme Portfolio will enter into such
Forward Contracts with major U.S. or foreign banks and securities or currency
dealers in accordance with guidelines approved by the applicable Board.
An Underlying Theme Portfolio may enter into Forward Contracts either with
respect to specific transactions or with respect to overall investments of that
Underlying Theme Portfolio. The precise matching of the Forward Contract amounts
and the value of specific securities generally will not be possible because the
future value of such securities in foreign currencies will change as a
consequence of market movements in the value of those securities between the
date the Forward Contract is entered into and the date it matures. Accordingly,
it may be necessary for that Underlying Theme Portfolio to purchase additional
foreign currency on the spot (I.E., cash) market (and bear the expense of such
purchase) if the market value of the security is less than the amount of foreign
currency the Underlying Theme Portfolio is obligated to deliver and if a
decision is made to sell the security and make delivery of the foreign currency.
Conversely, it may be necessary to sell on the spot market some of the foreign
currency the Underlying Theme Portfolio is obligated to deliver. The projection
of short-term currency market movements is extremely difficult, and the
successful execution of a short-
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term hedging strategy is highly uncertain. Forward Contracts involve the risk
that anticipated currency movements will not be predicted accurately, causing an
Underlying Theme Portfolio to sustain losses on these contracts and transaction
costs.
At or before the maturity of a Forward Contract requiring an Underlying Theme
Portfolio to sell a currency, it either may sell a security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which it will obtain, on the same maturity date, the same amount of
the currency that it is obligated to deliver. Similarly, an Underlying Theme
Portfolio may close out a Forward Contract requiring it to purchase a specified
currency by entering into a second contract, if its contra party agrees,
entitling it to sell the same amount of the same currency on the maturity date
of the first contract. An Underlying Theme Portfolio would realize a gain or
loss as a result of entering into such an offsetting Forward Contract under
either circumstance to the extent the exchange rate or rates between the
currencies involved moved between the execution dates of the first contract and
the offsetting contract.
The cost to an Underlying Theme Portfolio of engaging in Forward Contracts
varies with factors such as the currencies involved, the length of the contract
period and the market conditions then prevailing. Because Forward Contracts are
usually entered into on a principal basis, no fees or commissions are involved.
The use of Forward Contracts does not eliminate fluctuations in the prices of
the underlying securities an Underlying Theme Portfolio owns or intends to
acquire, but it does establish a rate of exchange in advance. In addition, while
Forward Contract sales limit the risk of loss due to a decline in the value of
the hedged currencies, they also limit any potential gain that might result
should the value of the currencies increase.
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
An Underlying Theme Portfolio may use options on foreign currencies, Futures on
foreign currencies, options on Futures on foreign currencies and Forward
Contracts to hedge against movements in the values of the foreign currencies in
which the Underlying Theme Portfolio's securities are denominated. Such currency
hedges can protect against price movements in a security that the Underlying
Theme Portfolio owns or intends to acquire that are attributable to changes in
the value of the currency in which it is denominated. Such hedges do not,
however, protect against price movements in the securities that are attributable
to other causes.
An Underlying Theme Portfolio might seek to hedge against changes in the value
of a particular currency when no Futures Contract, Forward Contract or option
involving that currency is available or one of such contracts is more expensive
than certain other contracts. In such cases, the Underlying Theme Portfolio may
hedge against price movements in that currency by entering into a contract on
another currency or basket of currencies, the values of which the Sub-adviser
believes will have a positive correlation to the value of the currency being
hedged. The risk that movements in the price of the contract will not correlate
perfectly with movements in the price of the currency being hedged is magnified
when this strategy is used.
The value of Futures Contracts, options on Futures Contracts, Forward Contracts
and options on foreign currencies depends on the value of the underlying
currency relative to the U.S. dollar. Because foreign currency transactions
occurring in the interbank market might involve substantially larger amounts
than those involved in the use of Futures Contracts, Forward Contracts or
options, the Underlying Theme Portfolio could be disadvantaged by dealing in the
odd lot market (generally consisting of transactions of less than $1 million)
for the underlying foreign currencies at prices that are less favorable than for
round lots.
There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirements that quotations available through dealers or
other market sources be firm or revised on a timely basis. Quotation information
generally is representative of very large transactions in the interbank market
and thus might not reflect odd-lot transactions where rates might be less
favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
Settlement of Futures Contracts, Forward Contracts and options involving foreign
currencies might be required to take place within the country issuing the
underlying currency. Thus, an Underlying Theme Portfolio might be required to
accept or make delivery of the underlying foreign currency in accordance with
any U.S. or foreign regulations regarding the maintenance of foreign banking
arrangements by U.S. residents and might be required to pay any fees, taxes and
charges associated with such delivery assessed in the issuing country.
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COVER
Transactions using Forward Contracts, Futures Contracts and options (other than
options purchased by an Underlying Theme Portfolio) expose the Underlying Theme
Portfolio to an obligation to another party. An Underlying Theme Portfolio will
not enter into any such transactions unless it owns either (1) an offsetting
("covered") position in securities, currencies, or other options, Forward
Contracts or Futures Contracts or (2) cash, receivables and short-term debt
securities with a value sufficient at all times to cover its potential
obligations not covered as provided in (1) above. Each Underlying Theme
Portfolio will comply with SEC guidelines regarding cover for these instruments
and, if the guidelines so require, set aside cash or liquid securities.
Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of an Underlying Theme Portfolio's assets is used for cover or otherwise set
aside, it could affect portfolio management or the Underlying Theme Portfolio's
ability to meet redemption requests or other current obligations.
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RISK FACTORS OF THE
UNDERLYING THEME PORTFOLIOS
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DEBT SECURITIES
The value of the debt securities held by each Underlying Theme Portfolio
generally will vary conversely with market interest rates. If interest rates in
a market fall, the value of the debt securities held by each Underlying Theme
Portfolio ordinarily will rise. If market interest rates increase, however, the
debt securities owned by each Underlying Theme Portfolio in that market will be
likely to decrease in value.
The Global Consumer Products and Services Portfolio, Global Infrastructure
Portfolio and Global Resources Portfolio may each invest up to 20% of its total
assets in debt securities rated below investment grade. Such investments involve
a high degree of risk. However, those Portfolios will not invest in debt
securities that are in default as to payment of principal and interest.
Debt rated Baa by Moody's Investors Service, Inc. ("Moody") is considered by
Moody's to have speculative characteristics. Debt rated BB, B, CCC, CC or C by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), and
debt rated Ba, B, Caa, Ca or C by Moody's is regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. For S&P, BB
indicates the lowest degree of speculation for such lower quality debt and C the
highest degree of speculation. For Moody's, Baa indicates the lowest degree of
speculation for such lower quality debt and C the highest degree of speculation.
While such lower quality debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions. Debt rated C by Moody's or S&P is the lowest
rated debt that is not in default as to principal or interest, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing. Lower quality debt securities also are generally
considered to be subject to greater risk than securities with higher ratings
with regard to a deterioration of general economic conditions. These lower
quality debt securities are the equivalent of high yield, high risk bonds,
commonly known as "junk bonds."
Ratings of debt securities represent the rating agency's opinion regarding their
quality and are not a guarantee of quality. Rating agencies attempt to evaluate
the safety of principal and interest payments and do not evaluate the risks of
fluctuations in market value. Also, rating agencies may fail to make timely
changes in credit ratings in response to subsequent events, so that an issuer's
current financial condition may be better or worse than a rating indicates.
The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
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meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
Lower quality debt securities of corporate issuers frequently have call or
buy-back features that permit the issuer to call or repurchase the security from
an Underlying Theme Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Underlying Theme Portfolio may have to
replace the security with a lower yielding security, resulting in a decreased
return for investors. In addition, the Underlying Theme Portfolios may have
difficulty disposing of lower quality securities because they may have a thin
trading market. There may be no established retail secondary market for many of
these securities, and each Underlying Theme Portfolio anticipates that such
securities could be sold only to a limited number of dealers or institutional
investors. The lack of a liquid secondary market also may have an adverse impact
on market prices of such instruments and may make it more difficult for the
Underlying Theme Portfolios to obtain accurate market quotations for purposes of
valuing their portfolio investments. The Underlying Theme Portfolios may also
acquire lower quality debt securities during an initial underwriting or which
are sold without registration under applicable securities laws. Such securities
involve special considerations and risks.
In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Underlying Theme
Portfolios may invest include: (i) potential adverse publicity; (ii) heightened
sensitivity to general economic or political conditions; and (iii) the likely
adverse impact of a major economic recession. An Underlying Theme Portfolio may
also incur additional expenses to the extent it is required to seek recovery
upon a default in the payment of principal or interest on portfolio holdings,
and the Underlying Theme Portfolio may have limited legal recourse in the event
of a default.
The Sub-adviser attempts to minimize the speculative risks associated with
investments in lower quality securities through credit analysis and by carefully
monitoring current trends in interest rates, political developments and other
factors.
ILLIQUID SECURITIES
Each Underlying Theme Portfolio may invest up to 15% of its net assets in
illiquid securities. Securities may be considered illiquid if an Underlying
Theme Portfolio cannot reasonably expect within seven days to sell the
securities for approximately the amount at which it values such securities. See
"Investment Limitations of the Underlying Theme Funds and Portfolios." The sale
of illiquid securities, if they can be sold at all, generally will require more
time and result in higher brokerage charges or dealer discounts and other
selling expenses than will the sale of liquid securities such as securities
eligible for trading on U.S. securities exchanges or in OTC markets. Moreover,
restricted securities, which may be illiquid for purposes of this limitation,
often sell, if at all, at a price lower than similar securities that are liquid.
Illiquid securities include those that are subject to restrictions contained in
the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, an Underlying Theme Portfolio may be obligated to pay
all or part of the registration expenses and a considerable period may elapse
between the time of the decision to sell and the time the Underlying Theme
Portfolio may be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to develop,
the Underlying Theme Portfolio might obtain a less favorable price than
prevailed when it decided to sell.
Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended (the "1933 Act"),
including private placements, repurchase agreements, commercial paper, foreign
securities and corporate bonds and notes. These instruments are often restricted
securities because the securities are sold in transactions not requiring
registration. Institutional investors generally will not seek to sell these
instruments to the general public, but instead will often depend either on an
efficient institutional market in which such unregistered securities can be
readily resold or on an issuer's ability to honor a demand for repayment.
Therefore, the fact that there are contractual or legal restrictions on resale
to the general public or certain institutions is not dispositive of the
liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
an Underlying Theme Portfolio, however, could affect adversely the marketability
of
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such portfolio securities, and the Underlying Theme Portfolio might be unable to
dispose of such securities promptly or at favorable prices.
With respect to liquidity determinations generally, the applicable Board has the
ultimate responsibility for determining whether specific securities, including
restricted securities pursuant to Rule 144A under the 1933 Act, are liquid or
illiquid. Each Board has delegated the function of making day-to-day
determinations of liquidity to the Sub-adviser, in accordance with procedures
approved by that Board. The Sub-adviser takes into account a number of factors
in reaching liquidity decisions, including (i) the frequency of trading in the
security, (ii) the number of dealers that make quotes for the security, (iii)
the number of dealers that have undertaken to make a market in the security,
(iv) the number of other potential purchasers and (v) the nature of the security
and how trading is effected (e.g., the time needed to sell the security, how
offers are solicited and the mechanics of transfer). The Sub-adviser monitors
the liquidity of securities held by each Underlying Theme Portfolio and
periodically reports such determinations to the applicable Board. If the
liquidity percentage restriction of a Theme Portfolio is satisfied at the time
of investment, a later increase in the percentage of illiquid securities held by
the Theme Portfolio resulting from a change in market value or assets will not
constitute a violation of that restriction. If as a result of a change in market
value or assets, the percentage of illiquid securities held by the Theme
Portfolio increases above the applicable limit, the Sub-adviser will take
appropriate steps to bring the aggregate amount of illiquid assets back within
the prescribed limitations as soon as reasonably practicable, taking into
account the effect of any disposition on the Theme Portfolio. The Sub-adviser
believes that carefully selected investments in joint ventures, cooperatives,
partnerships and state enterprises that are illiquid (collectively, "Special
Situations") could enable an Underlying Theme Portfolio to achieve capital
appreciation substantially exceeding the appreciation it would realize if it did
not make such investments. However, in order to attempt to limit investment
risk, each Underlying Theme Portfolio will invest no more than 5% of its total
assets in Special Situations.
FOREIGN SECURITIES
POLITICAL, SOCIAL AND ECONOMIC RISKS. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment convertibility of currencies into U.S. dollars and on repatriation of
capital invested. In the event of such expropriation, nationalization or other
confiscation by any country, an Underlying Theme Portfolio could lose its entire
investment in any such country.
RELIGIOUS, POLITICAL AND ETHNIC INSTABILITY. Certain countries in which an
Underlying Theme Portfolio may invest may have groups that advocate radical
religious or revolutionary philosophies or support ethnic independence. Any
disturbance on the part of such individuals could carry the potential for
widespread destruction or confiscation of property owned by individuals and
entities foreign to such country and could cause the loss of an Underlying Theme
Portfolio's investment in those countries. Instability may also result from,
among other things, (i) authoritarian governments or military involvement in
political and economic decision-making, including changes in government through
extra-constitutional means, (ii) popular unrest associated with demands for
improved political, economic and social conditions; and (iii) hostile relations
with neighboring or other countries. Such political, social and economic
instability could disrupt the principal financial markets in which an Underlying
Theme Portfolio invests and adversely affect the value of its assets.
FOREIGN INVESTMENT RESTRICTIONS. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as an Underlying Theme Portfolio.
These restrictions or controls may at times limit or preclude investments in
certain securities and may increase the cost and expenses of an Underlying Theme
Portfolio. For example, certain countries require prior governmental approval
before investments by foreign persons may be made or may limit the amount of
investment by foreign persons in a particular company or limit the investment by
foreign persons to only a specific class of securities of a company that may
have less advantageous terms than securities of the company available for
purchase by nationals. Moreover, the national policies of certain countries may
restrict investment opportunities in issuers or industries deemed sensitive to
national interests. In addition, some countries require governmental approval
for the repatriation of investment income, capital or the proceeds of securities
sales by foreign investors. In addition, if there is a deterioration in a
country's balance of payments or for other reasons, a country may impose
restrictions on foreign capital remittances abroad. An Underlying Theme
Portfolio could be adversely affected by delays in, or a refusal to grant, any
required governmental approval for repatriation, as well as by the application
to it of other restrictions on investments.
NON-UNIFORM CORPORATE DISCLOSURE STANDARDS AND GOVERNMENTAL
REGULATION. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the financial statements of such a company may not reflect its
financial position or results of operations in the way they would be reflected
had such financial statements
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been prepared in accordance with U.S. generally accepted accounting principles.
Most of the foreign securities held by an Underlying Theme Portfolio will not be
registered with the SEC or regulators of any foreign country, nor will the
issuers thereof be subject to the SEC's reporting requirements. Thus, there will
be less available information concerning most foreign issuers of securities held
by an Underlying Theme Portfolio than is available concerning U.S. issuers. In
instances where the financial statements of an issuer are not deemed to reflect
accurately the financial situation of the issuer, the Sub-adviser will take
appropriate steps to evaluate the proposed investment, which may include on-site
inspection of the issuer, interviews with its management and consultations with
accountants, bankers and other specialists. There is substantially less publicly
available information about foreign companies than there are reports and ratings
published about U.S. companies. In addition, where public information is
available, it may be less reliable than such information regarding U.S. issuers.
Issuers of securities in foreign jurisdictions are generally not subject to the
same degree of regulation as are U.S. issuers with respect to such matters as
restrictions on market manipulation, insider trading rules, shareholder proxy
requirements and timely disclosure of information.
CURRENCY FLUCTUATIONS. Because each Underlying Theme Portfolio, under normal
circumstances, will invest a substantial portion of its total assets in the
securities of foreign issuers that are denominated in foreign currencies, the
strength or weakness of the U.S. dollar against such foreign currencies will
account for part of an Underlying Theme Portfolio's investment performance. A
decline in the value of any particular currency against the U.S. dollar will
cause a decline in the U.S. dollar value of an Underlying Theme Portfolio's
holdings of securities and cash denominated in that currency and, therefore,
will cause an overall decline in its and its corresponding Feeder Fund's net
asset value (as applicable) and any net investment income and capital gains
derived from such securities to be distributed in U.S. dollars to the
shareholders thereof. Moreover, if the value of the foreign currencies in which
an Underlying Theme Portfolio receives its income falls relative to the U.S.
dollar between receipt of the income and the making of distributions, the
Underlying Theme Portfolio may be required to liquidate securities if it has
insufficient cash in U.S. dollars to meet distribution requirements.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors, including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the relative movement of
interest rates and the pace of business activity in the other countries and the
United States, and other economic and financial conditions affecting the world
economy.
Although each Underlying Theme Portfolio values its assets daily in terms of
U.S. dollars, the Underlying Theme Portfolios do not intend to convert their
holdings of foreign currencies into U.S. dollars on a daily basis. Each
Underlying Theme Portfolio will do so, from time to time, and investors should
be aware of the costs of currency conversion. Although foreign exchange dealers
do not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to an Underlying
Theme Portfolio at one rate, while offering a lesser rate of exchange should an
Underlying Theme Portfolio desire to sell that currency to the dealer.
ADVERSE MARKET CHARACTERISTICS. Securities of many foreign issuers may be
less liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the United
States, and foreign securities transactions usually are subject to fixed
commissions, which generally are higher than negotiated commissions on U.S.
transactions. In addition, foreign securities transactions may be subject to
difficulties associated with the settlement of such transactions. Delays in
settlement could result in temporary periods when assets of an Underlying Theme
Portfolio are uninvested and no return is earned thereon. The inability of an
Underlying Theme Portfolio to make intended security purchases due to settlement
problems could cause it to miss attractive investment opportunities. Inability
to dispose of a portfolio security due to settlement problems either could
result in losses to an Underlying Theme Portfolio due to subsequent declines in
value of the portfolio security or, if that Underlying Theme Portfolio has
entered into a contract to sell the security, could result in possible liability
to the purchaser. The Sub-adviser will consider such difficulties when
determining the allocation of an Underlying Theme Portfolio's assets, although
the Sub-adviser does not believe that such difficulties will have a material
adverse effect on an Underlying Theme Portfolio's portfolio trading activities.
Each Underlying Theme Portfolio may use foreign custodians, which may involve
risks in addition to those related to its use of U.S. custodians. Such risks
include uncertainties relating to (1) determining and monitoring the foreign
custodian's financial strength, reputation and standing, (2) maintaining
appropriate safeguards concerning an Underlying Theme Portfolio's investments,
and (3) possible difficulties in obtaining and enforcing judgments against such
custodians.
WITHHOLDING TAXES. Each Underlying Theme Portfolio's net investment income
from securities of foreign issuers may be subject to withholding taxes by the
foreign issuer's country, thereby reducing that income or delaying the receipt
of income when those taxes may be recaptured. See "Taxes."
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CONCENTRATION. To the extent an Underlying Theme Portfolio invests a
significant portion of its assets in securities of issuers located in a
particular country or region of the world, it may be subject to greater risks
and may experience greater volatility than a fund that is more broadly
diversified geographically.
SPECIAL CONSIDERATIONS AFFECTING WESTERN EUROPEAN COUNTRIES. The countries
that are members of the European Economic Community ("Common Market") (Belgium,
Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands,
Portugal, Spain, and the United Kingdom) eliminated certain import tariffs and
quotas and other trade barriers with respect to one another over the past
several years. The Sub-adviser believes that this deregulation should improve
the prospects for economic growth in many Western European countries. Among
other things, the deregulation could enable companies domiciled in one country
to avail themselves of lower labor costs existing in other countries. In
addition, this deregulation could benefit companies domiciled in one country by
opening additional markets for their goods and services in other countries.
Since, however, it is not clear what the exact form or effect of these Common
Market reforms will be on business in Western Europe, it is impossible to
predict the long-term impact of the implementation of these programs on the
securities owned by an Underlying Theme Portfolio.
SPECIAL CONSIDERATIONS AFFECTING RUSSIA AND EASTERN EUROPEAN
COUNTRIES. Investing in Russia and Eastern European countries involves a high
degree of risk and special considerations not typically associated with
investing in the U.S. securities markets and should be considered highly
speculative. Such risks include the following: (1) delays in settling portfolio
transactions and risk of loss arising out of the system of share registration
and custody; (2) the risk that it may be impossible or more difficult than in
other countries to obtain and/or enforce a judgment; (3) pervasiveness of
corruption and crime in the economic system; (4) currency exchange rate
volatility and the lack of available currency hedging instruments; (5) higher
rates of inflation (including the risk of social unrest associated with periods
of hyper-inflation) and high unemployment; (6) controls on foreign investment
and local practices disfavoring foreign investors and limitations on
repatriation of invested capital, profits and dividends, and on a fund's ability
to exchange local currencies for U.S. dollars; (7) political instability and
social unrest and violence; (8) the risk that the governments of Russia and
Eastern European countries may decide not to continue to support the economic
reform programs implemented recently and could follow radically different
political and/or economic policies to the detriment of investors, including
non-market-oriented policies such as the support of certain industries at the
expense of other sectors or investors, or a return to the centrally planned
economy that existed when such countries had a communist form of government; (9)
the financial condition of companies in these countries, including large amounts
of inter-company debt which may create a payments crisis on a national scale;
(10) dependency on exports and the corresponding importance of international
trade; (11) the risk that the tax system in these countries will not be reformed
to prevent inconsistent, retroactive and/or exorbitant taxation; and (12) the
underdeveloped nature of the securities markets.
SPECIAL CONSIDERATIONS AFFECTING JAPAN. Japan's economic growth has declined
significantly since 1990. The general government position has deteriorated as a
result of weakening economic growth and stimulative measures taken to support
economic activity and to restore financial stability. Although the decline in
interest rates and fiscal stimulation packages have helped to contain
recessionary forces, uncertainties remain. Japan is also heavily dependent upon
international trade, so its economy is especially sensitive to trade barriers
and disputes. Japan has had difficult relations with its trading partners,
particularly the United States, where the trade imbalance is the greatest. It is
possible that trade sanctions and other protectionist measures could impact
Japan adversely in both the short and the long term.
The common stocks of many Japanese companies trade at high price-earnings
ratios. Differences in accounting methods make it difficult to compare the
earnings of Japanese companies with those of companies in other countries,
especially in the United States. In general, however, reported net income in
Japan is understated relative to U.S. accounting standards and this is one
reason why price-earnings ratios of the stocks of Japanese companies have tended
historically to be higher than those for U.S. stocks. In addition, Japanese
companies have tended to have higher growth rates than U.S. companies and
Japanese interest rates have generally been lower than in the United States,
both factors which tend to result in lower discount rates and higher
price-earnings ratios in Japan than in the United States.
The Japanese securities markets are less regulated than those in the United
States. Evidence has emerged from time to time of distortion of market prices to
serve political or other purposes. Shareholders' rights are not always equally
enforced. In addition, Japan's banking industry is undergoing problems related
to bad loans and declining values in real estate.
SPECIAL CONSIDERATIONS AFFECTING PACIFIC REGION COUNTRIES. Certain of the
risks associated with international investments are heightened for investments
in Pacific region countries. For example, some of the currencies of Pacific
region countries have experienced steady devaluations relative to the U.S.
dollar, and major adjustments have been made periodically in certain of such
currencies. Certain countries, such as India, face serious exchange constraints.
Jurisdictional disputes also
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exist between South Korea and North Korea. In addition, the Underlying Theme
Portfolios may invest in Hong Kong, which reverted to Chinese administration on
July 1, 1997. Investments in Hong Kong may be subject to expropriation,
nationalization or confiscation, in which case an Underlying Theme Portfolio
could lose its entire investment in Hong Kong. In addition, the reversion of
Hong Kong also presents a risk that the Hong Kong dollar will be devalued and a
risk of possible loss of investor confidence in Hong Kong's currency, stock
market and assets.
SPECIAL CONSIDERATIONS AFFECTING LATIN AMERICAN COUNTRIES. Most Latin
American countries have experienced substantial, and in some periods extremely
high, rates of inflation for many years. Inflation and rapid fluctuations in
inflation rates have had and may continue to have very negative effects on the
economies and securities markets of certain Latin American countries. Certain
Latin American countries are also among the largest debtors to commercial banks
and foreign governments. At times certain Latin American countries have declared
moratoria on the payment of principal and/or interest on external debt. In
addition, certain Latin American securities markets have experienced high
volatility in recent years.
Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by foreign entities, investments may only be made in certain Latin
American countries solely or primarily through governmentally approved
investment vehicles or companies.
Certain Latin American countries may have managed currencies that are maintained
at artificial levels to the U.S. dollar rather than at levels determined by the
market. This type of system can lead to sudden and large adjustments in the
currency which, in turn, can have a disruptive and negative effect on foreign
investors. For example, in late 1994, the value of the Mexican peso lost more
than one-third of its value relative to the U.S. dollar.
SPECIAL CONSIDERATIONS AFFECTING EMERGING MARKETS. Investing in the
securities of companies in emerging markets may entail special risks relating to
potential political and economic instability and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, an Underlying Theme Portfolio could lose its
entire investment in any such country.
Emerging securities markets are substantially smaller, less developed, less
liquid and more volatile than the major securities markets. The limited size of
emerging securities markets and limited trading value in issuers compared to the
volume of trading in U.S. securities could cause prices to be erratic for
reasons apart from factors that affect the quality of the securities. For
example, limited market size may cause prices to be unduly influenced by traders
who control large positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease the value and
liquidity of portfolio securities, especially in these markets. In addition,
securities traded in certain emerging markets may be subject to risks due to the
inexperience of financial intermediaries, a lack of modern technology, the lack
of a sufficient capital base to expand business operations, and the possibility
of permanent or temporary termination of trading.
Settlement mechanisms in emerging securities markets may be less efficient and
reliable than in more developed markets. In such emerging securities there may
be share registration and delivery delays or failures.
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economies and securities
markets of certain emerging market countries.
PRIVATIZATIONS. The governments of some foreign countries have been engaged
in programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Underlying Theme Portfolios in privatizations in
appropriate circumstances. In certain foreign countries, the ability of foreign
entities such as the Underlying Theme Portfolios to participate in
privatizations may be limited by local law, or the terms on which the Underlying
Theme Portfolios may be permitted to participate may be less advantageous than
those for local investors. There can be no assurance that foreign governments
will continue to sell companies currently owned or controlled by them or that
privatization programs will be successful.
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INVESTMENT LIMITATIONS
- --------------------------------------------------------------------------------
INVESTMENT LIMITATIONS OF THE FUND
FUNDAMENTAL LIMITATIONS. The following fundamental limitations of the Fund
cannot be changed without the affirmative vote of the lesser of (i) 67% of the
Fund's shares represented at a meeting at which more than 50% of the outstanding
shares are represented or (ii) more than 50% of the outstanding shares
("Required Vote").
The Fund will not:
(1) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
(including the amount borrowed but reduced by any liabilities not
constituting borrowings) at the time of the borrowing, except that the Fund
may borrow up to an additional 5% of its total assets (not including the
amount borrowed) for temporary or emergency purposes;
(2) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this restriction, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances
or similar instruments will not be considered the making of a loan;
(3) Engage in the business of underwriting securities of other issuers,
except to the extent that the Fund might be considered an underwriter under
the federal securities laws in connection with its disposition of portfolio
securities;
(4) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
the Fund may exercise rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner;
(5) Purchase or sell physical commodities unless acquired as a result of
owning securities or other instruments, but the Fund may purchase, sell or
enter into financial options and futures, forward and spot currency
contracts, swap transactions and other financial contracts or derivative
instruments; or
(6) Purchase securities of any one issuer if, as a result, more than 5%
of the Fund's total assets would be invested in securities of that issuer or
the Fund would own or hold more than 10% of the outstanding voting
securities of that issuer, except that up to 25% of the Fund's total assets
may be invested without regard to this limitation, and except that this
limitation does not apply to securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities or to securities issued by
other investment companies.
Because of its investment objective and policies, the Fund will concentrate more
than 25% of its assets in the mutual fund industry. In accordance with the
Fund's investment program set forth in the Prospectus, the Fund may invest more
than 25% of its assets in the Underlying Theme Funds.
NON-FUNDAMENTAL LIMITATIONS. The following investment limitations of the Fund
are non-fundamental and may be changed by the vote of the Trust's Board of
Trustees without shareholder approval.
The Fund will not:
(1) Invest more than 15% of its net assets in illiquid securities, a
term which means securities that cannot be disposed of within seven days in
the ordinary course of business at approximately the amount at which the
Fund has valued the securities and includes, among other things, repurchase
agreements maturing in more than seven days;
(2) Purchase portfolio securities while borrowings in excess of 5% of
its total assets are outstanding;
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<PAGE>
AIM NEW DIMENSION FUND
(3) Purchase securities on margin, except for short-term credit
necessary for clearance of portfolio transactions and except that the Fund
may make margin deposits in connection with its use of financial options and
futures, forward and spot currency contracts, swap transactions and other
financial contract or derivative instruments;
(4) Engage in short sales of securities or maintain a short position,
except that the Fund may maintain short positions in connection with its use
of financial options an futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative instruments; or
(5) Purchase securities of other investment companies, except to the
extent permitted by the 1940 Act or under the terms of any exemptive order
granted by the SEC and except that this limitation does not apply to
securities received or acquired as dividends, through offers of exchange, or
as a result of reorganization, consolidation, or merger.
If a percentage restriction on investment or utilization of assets is adhered to
at the time of an investment or transaction, a later change in percentage
ownership of a security or kind of securities resulting from changing market
values or a similar type of event will not be considered a violation of the
Fund's policies or restrictions.
Notwithstanding the forgoing investment limitations, the Fund may invest in
Underlying Theme Funds that have adopted investment limitations that may be more
or less restrictive than those listed above. As a result, the Fund may engage
indirectly in investment strategies that are prohibited under the investment
limitations listed above. The investment limitations and other investment
policies and restrictions of each Underlying Theme Fund are described in its
prospectus and statement of additional information.
Pursuant to Section 12(d)(1)(G) of the 1940 Act, the Fund may invest
substantially all of its assets in the Underlying Theme Funds.
INVESTMENT LIMITATIONS OF THE UNDERLYING THEME FUNDS AND PORTFOLIOS
FEEDER FUNDS
The Financial Services Fund, Infrastructure Fund, Resources Fund and Consumer
Products and Services Fund (each, a "Feeder Fund," and collectively, the "Feeder
Funds") each has the following fundamental investment policy to enable it to
invest in the Financial Services Portfolio, Infrastructure Portfolio, Resources
Portfolio and Consumer Products and Services Portfolio (each a "Portfolio," and
collectively, the "Portfolios"), respectively:
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
All other fundamental investment policies, and the non-fundamental investment
policies, of each Feeder Fund and its corresponding Portfolio are identical.
Therefore, although the following discusses the investment policies of each
Portfolio and its Board of Trustees, it applies equally to each Feeder Fund and
its Board of Trustees.
Each Portfolio has adopted the following investment limitations as fundamental
policies that may not be changed without a Required Vote. Whenever a Feeder Fund
is requested to vote on a change in the investment limitations of its
corresponding Portfolio, the Fund will hold a meeting of its shareholders and
will cast its votes as instructed by its shareholders.
No Portfolio may:
(1) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
the Portfolio may exercise rights under agreements relating to such
securities, including the right to enforce security interests and to hold
real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner;
(2) Purchase or sell physical commodities, but the Portfolio may
purchase, sell or enter into financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments;
(3) Engage in the business of underwriting securities of other issuers,
except to the extent that the Portfolio might be considered an underwriter
under the federal securities laws in connection with its disposition of
portfolio securities;
Statement of Additional Information Page 22
<PAGE>
AIM NEW DIMENSION FUND
(4) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this limitation, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances
or similar instruments will not be considered the making of a loan;
(5) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Portfolio's total
assets (including the amount borrowed but reduced by any liabilities not
constituting borrowings) at the time of the borrowing, except that the
Portfolio may borrow up to an additional 5% of its total assets (not
including the amount borrowed) for temporary or emergency purposes; or
(6) Purchase securities of any one issuer if, as a result, more than 5%
of the Portfolio's total assets would be invested in securities of that
issuer or the Portfolio would own or hold more than 10% of the outstanding
voting securities of that issuer, except that up to 25% of the Portfolio's
total assets may be invested without regard to this limitation, and except
that this limitation does not apply to securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities or to securities
issued by other investment companies.
The following investment policies of each Portfolio are not fundamental policies
and may be changed by vote of the Portfolios' Board of Trustees without
shareholder approval. No Portfolio may:
(1) Invest in securities of an issuer if the investment would cause the
Portfolio to own more than 10% of any class of securities of any one issuer;
(2) Invest in companies for the purpose of exercising control or
management;
(3) Invest more than 15% of its net assets in illiquid securities,
including securities that are illiquid by virtue of the absence of a readily
available market;
(4) Enter into a futures contract, an option on a futures contract, or
an option on foreign currency traded on a CFTC-regulated exchange, in each
case other than for BONA FIDE hedging purposes (as defined by the CFTC), if
the aggregate initial margin and premiums required to establish all of those
positions (excluding the amount by which options are "in-the-money") exceeds
5% of the liquidation value of the Portfolio's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the
Portfolio has entered into;
(5) Borrow money except for temporary or emergency purposes (other than
to meet redemptions). While borrowings exceed 5% of the Portfolio's total
assets, the Portfolio will not make any additional investments;
(6) Invest more than 10% of its total assets in shares of other
investment companies and may not invest more than 5% of its total assets in
any one investment company or acquire more than 3% of the outstanding voting
securities of any one investment company;
(7) Purchase securities on margin, provided that each Portfolio may
obtain short-term credits as may be necessary for the clearance of purchases
and sales of securities, and further provided that the Portfolio may make
margin deposits in connection with its use of financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments; or
(8) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
Investors should refer to the Prospectus for further information with respect to
the investment objective of each Feeder Fund, which may not be changed without
the approval of Fund shareholders, and its corresponding Portfolio's investment
objective, which may be changed without the approval of its shareholders, and
other investment policies, techniques and limitations, which may or may not be
changed without shareholder approval.
HEALTH CARE FUND
The Health Care Fund has adopted the following investment limitations as
fundamental policies, which may not be changed without a Required Vote.
Statement of Additional Information Page 23
<PAGE>
AIM NEW DIMENSION FUND
The Health Care Fund may not:
(1) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
the Health Care Fund may exercise rights under agreements relating to such
securities, including the right to enforce security interests and to hold
real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner;
(2) Engage in the business of underwriting securities of other issuers,
except to the extent that the Health Care Fund might be considered an
underwriter under the federal securities laws in connection with its
disposition of portfolio securities;
(3) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this limitation, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances
or similar instruments will not be considered the making of a loan;
(4) Purchase or sell physical commodities, but the Health Care Fund may
purchase, sell or enter into financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments;
(5) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Health Care Fund's
total assets (including the amount borrowed but reduced by any liabilities
not constituting borrowings) at the time of the borrowing, except that the
Health Care Fund may borrow up to an additional 5% of its total assets (not
including the amount borrowed) for temporary or emergency purposes; or
(6) Purchase securities of any one issuer if, as a result, more than 5%
of the Health Care Fund's total assets would be invested in securities of
that issuer or the Health Care Fund would own or hold more than 10% of the
outstanding voting securities of that issuer, except that up to 25% of the
Health Care Fund's total assets may be invested without regard to this
limitation, and except that this limitation does not apply to securities
issued or guaranteed by the U.S. government, its agencies or
instrumentalities or to securities issued by other investment companies.
Notwithstanding any other investment policy of the Health Care Fund, the Health
Care Fund may invest all of its investable assets (cash, securities and
receivables related to securities) in an open-end management investment company
having substantially the same investment objective, policies and limitations as
the Fund.
The following investment policies of the Health Care Fund are not fundamental
policies and may be changed by vote of the Health Care Fund's Board of Trustees
without shareholder approval. The Health Care Fund will not:
(1) Purchase securities for which there is no readily available market,
or enter into repurchase agreements or purchase time deposits maturing in
more than seven days, or purchase OTC options or hold assets set aside to
cover OTC options written by the Health Care Fund, if immediately after and
as a result, the value of such securities would exceed, in the aggregate,
15% of the Health Care Fund's net assets;
(2) Purchase securities on margin, provided that the Health Care Fund
may obtain short-term credits as may be necessary for the clearance of
purchases and sales of securities, and further provided that the Health Care
Fund may make margin deposits in connection with its use of financial
options and futures, forward and spot currency contracts, swap transactions
and other financial contracts or derivative instruments; or
(3) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities; or
(4) Borrow money except for temporary or emergency purposes (other than
to meet redemptions). While borrowings exceed 5% of the Health Care Fund's
total assets it will not make any additional investments.
Investors should refer to the Prospectus for further information with respect to
the Health Care Fund's investment objective, which may not be changed without
the approval of its shareholders, and other investment policies, techniques and
limitations, which may be changed without shareholder approval.
TELECOMMUNICATIONS FUND
The Telecommunications Fund has adopted the following investment limitations as
fundamental policies, which may not be changed without a Required Vote.
Statement of Additional Information Page 24
<PAGE>
AIM NEW DIMENSION FUND
The Telecommunications Fund may not:
(1) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
the Telecommunications Fund may exercise rights under agreements relating to
such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real
estate can be liquidated in an orderly manner;
(2) Purchase or sell physical commodities, but the Telecommunications
Fund may purchase, sell or enter into financial options and futures, forward
and spot currency contracts, swap transactions and other financial contracts
or derivative instruments;
(3) Engage in the business of underwriting securities of other issuers,
except to the extent that the Telecommunications Fund might be considered an
underwriter under the federal securities laws in connection with its
disposition of portfolio securities;
(4) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this limitation, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances
or similar instruments will not be considered the making of a loan;
(5) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Telecommunications
Fund's total assets (including the amount borrowed but reduced by any
liabilities not constituting borrowings) at the time of the borrowing,
except that the Telecommunications Fund may borrow up to an additional 5% of
its total assets (not including the amount borrowed) for temporary or
emergency purposes; or
(6) Purchase securities of any one issuer if, as a result, more than 5%
of the Telecommunications Fund's total assets would be invested in
securities of that issuer or the Telecommunications Fund would own or hold
more than 10% of the outstanding voting securities of that issuer, except
that up to 25% of the Telecommunications Fund's total assets may be invested
without regard to this limitation, and except that this limitation does not
apply to securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities or to securities issued by other investment
companies.
Notwithstanding any other investment policy of the Telecommunications Fund, the
Telecommunications Fund may invest all of its investable assets (cash,
securities and receivables related to securities) in an open-end management
investment company having substantially the same investment objective, policies
and limitations as the Fund.
The following investment policies of the Telecommunications Fund are not
fundamental policies and may be changed by vote of the Company's Board of
Trustees without shareholder approval. The Telecommunications Fund may not:
(1) Invest in securities of an issuer if the investment would cause the
Telecommunications Fund to own more than 10% of any class of securities of
any one issuer;
(2) Invest in companies for the purpose of exercising control or
management;
(3) Invest more than 15% of its net assets in illiquid securities,
including securities that are illiquid by virtue of the absence of a readily
available market;
(4) Enter into a futures contract, an option on a futures contract, or
an option on foreign currency traded on a CFTC-regulated exchange, in each
case other than for BONA FIDE hedging purposes (as defined by the CFTC), if
the aggregate initial margin and premiums required to establish all of those
positions (excluding the amount by which options are "in-the-money") exceeds
5% of the liquidation value of the Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund
has entered into;
(5) Borrow money except for temporary or emergency purposes (other than
to meet redemptions). While borrowings exceed 5% of the Telecommunications
Fund's total assets, it will not make any additional investments;
(6) Purchase securities on margin, provided that the Telecommunications
Fund may obtain short-term credits as may be necessary for the clearance of
purchases and sales of securities, and further provided that the
Telecommunications Fund may make margin deposits in connection with its use
of financial options and futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative instruments; or
Statement of Additional Information Page 25
<PAGE>
AIM NEW DIMENSION FUND
(7) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
Investors should refer to the Prospectus for further information with respect to
the Telecommunications Fund's investment objective, which may not be changed
without the approval of shareholders, and other investment policies, techniques
and limitations, which may be changed without shareholder approval.
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of a Fund's or Portfolio's investment policies or
restrictions. A Fund or Portfolio may exchange securities, exercise conversion
or subscription rights, warrants or other rights to purchase common stock or
other equity securities and may hold, except to the extent limited by the 1940
Act, any such securities so acquired without regard to the Fund's or Portfolio's
investment policies and restrictions. The original cost of the securities so
acquired will be included in any subsequent determination of a Fund's or
Portfolio's compliance with the investment percentage limitations referred to
above and in the Prospectus.
- --------------------------------------------------------------------------------
EXECUTION OF PORTFOLIO
TRANSACTIONS
- --------------------------------------------------------------------------------
All orders for the purchase or sale of portfolio securities for the Fund
(normally shares of the Underlying Theme Funds) are placed on behalf of the Fund
by the Sub-adviser. As stated in the Prospectus, the Sub-adviser will exercise
no discretion in investing the assets of the Fund other than to make investments
in money market instruments and to rebalance the percentage of the Fund's assets
in each Underlying Theme Fund.
Subject to policies established by the applicable Board, the Sub-adviser is
responsible for the execution of each Underlying Theme Portfolio's securities
transactions and the selection of broker/dealers who execute such transactions
on behalf of each Underlying Theme Portfolio. In executing transactions, the
Sub-adviser seeks the best net results for each Underlying Theme Portfolio,
taking into account such factors as the price (including the applicable
brokerage commission or dealer spread), size of the order, difficulty of
execution and operational facilities of the firm involved. Although the Sub-
adviser generally seeks reasonably competitive commission rates and spreads,
payment of the lowest commission or spread is not necessarily consistent with
the best net results. While each Underlying Theme Portfolio may engage in soft
dollar arrangements for research services, as described below, it has no
obligation to deal with any broker/dealer or group of broker/dealers in the
execution of portfolio transactions.
Consistent with the interests of each Underlying Theme Portfolio, the
Sub-adviser may select broker/dealers to execute that Underlying Theme
Portfolio's portfolio transaction on the basis of the research and brokerage
services they provide to the Sub-adviser for its use in managing that Underlying
Theme Portfolio and its other advisory accounts. Such services may include
furnishing analyses, reports and information concerning issuers, industries,
securities, geographic regions, economic factors and trends, portfolio strategy,
and performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement).
Research and brokerage services received from such broker are in addition to,
and not in lieu of, the services required to be performed by the Sub-adviser
under investment management and administration contracts. A commission paid to
such broker may be higher than that which another qualified broker would have
charged for effecting the same transaction, provided that the Sub-adviser
determines in good faith that such commission is reasonable in terms either of
that particular transaction or the overall responsibility of the Sub-adviser to
the Underlying Theme Portfolio and its other clients and that the total
commissions paid by that Underlying Theme Portfolio will be reasonable in
relation to the benefits it receive over the long term. Research services may
also be received from dealers who execute portfolio transactions in OTC markets.
The Sub-adviser may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by an Underlying Theme Portfolio toward payment of its
expenses, such as custodian fees.
Statement of Additional Information Page 26
<PAGE>
AIM NEW DIMENSION FUND
Investment decisions for an Underlying Theme Portfolio and for other investment
accounts managed by the Sub-adviser are made independently of each other in
light of differing conditions. However, the same investment decision
occasionally may be made for two or more of such accounts, including an
Underlying Theme Portfolio. In such cases, simultaneous transactions may occur.
Purchases or sales are then allocated as to price or amount in a manner deemed
fair and equitable to all accounts involved. While in some cases this practice
could have a detrimental effect upon the price or value of the security as far
as an Underlying Theme Portfolio is concerned, in other cases the Sub-adviser
believes that coordination and the ability to participate in volume transactions
will be beneficial to that Underlying Theme Portfolio.
Under a policy adopted by the applicable Board, and subject to the policy of
obtaining the best net results, the Sub-adviser may consider a broker/dealer's
sale of the shares of the Underlying Theme Funds and the other portfolios for
which the Sub-adviser serves as investment manager or administrator in selecting
broker/dealers for the execution of portfolio transactions. This policy does not
imply a commitment to execute portfolio transactions through all broker/dealers
that sell shares of the Underlying Theme Funds and such other portfolios.
Each Underlying Theme Portfolio contemplates purchasing most foreign equity
securities in OTC markets or stock exchanges located in the countries in which
the respective principal offices of the issuers of the various securities are
located, if that is the best available market. The fixed commissions paid in
connection with most such foreign stock transactions generally are higher than
negotiated commissions on U.S. transactions. There generally is less government
supervision and regulation of foreign stock exchanges and brokers than in the
United States. Foreign security settlements may in some instances be subject to
delays and related administrative uncertainties.
Foreign equity securities may be held by an Underlying Theme Portfolio in the
form of ADRs, ADSs, EDRs, CDRs or securities convertible into foreign equity
securities. ADRs, ADSs, EDRs and CDRs may be listed on stock exchanges, or
traded in the OTC markets in the United States or Europe, as the case may be.
ADRs, like other securities traded in the United States, will be subject to
negotiated commission rates. The foreign and domestic debt securities and money
market instruments in which an Underlying Theme Portfolio may invest are
generally traded in the OTC markets.
An Underlying Theme Portfolio does not have any obligation to deal with any
broker/dealer or group of broker/dealers in the execution of securities
transactions. Each Underlying Theme Portfolio contemplates that, consistent with
the policy of obtaining the best net results, brokerage transactions may be
conducted through certain companies that are affiliated with AIM or the
Sub-adviser. Both Boards have adopted procedures in conformity with Rule 17e-1
under the 1940 Act to ensure that all brokerage commissions paid to such
affiliates are reasonable and fair in the context of the market in which they
are operating. Any such transactions will be effected and related compensation
paid only in accordance with applicable SEC regulations.
Statement of Additional Information Page 27
<PAGE>
AIM NEW DIMENSION FUND
TRUSTEES AND EXECUTIVE
OFFICERS
- --------------------------------------------------------------------------------
The Company's Trustees and Executive Officers are listed below.
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
COMPANY AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
William J. Guilfoyle*, 39 Mr. Guilfoyle is President, GT Global, Inc. ("GT Global") since 1995; Director, GT Global
Trustee, Chairman of the Board and since 1991; Senior Vice President and Director of Sales and Marketing, GT Global from May
President 1992 to April 1995; Vice President and Director of Marketing, GT Global from 1987 to 1992;
50 California Street Director, Liechtenstein Global Trust AG (holding company of the various international GT
San Francisco, CA 94111 companies) Advisory Board since January 1996; Director, G.T. Global Insurance Agency
("G.T. Insurance") since 1996; President and Chief Executive Officer, G.T. Insurance since
1995; Senior Vice President and Director, Sales and Marketing, G.T. Insurance from April
1995 to November 1995; Senior Vice President, Retail Marketing, G.T. Insurance from 1992
to 1993. Mr. Guilfoyle is also a trustee of each of the other investment companies
registered under the 1940 Act that is sub-advised or sub-administered by the Sub-adviser.
C. Derek Anderson, 57 Mr. Anderson is President, Plantagenet Capital Management, LLC (an investment
Trustee partnership); Chief Executive Officer, Plantagenet Holdings, Ltd. (an investment banking
220 Sansome Street firm); Director, Anderson Capital Management, Inc. since 1988; Director, PremiumWear, Inc.
Suite 400 (formerly Munsingwear, Inc.) (a casual apparel company) and Director, "R" Homes, Inc. and
San Francisco, CA 94104 various other companies. Mr. Anderson is also a trustee of each of the other investment
companies registered under the 1940 Act that is sub-advised or sub-administered by the
Sub-adviser.
</TABLE>
<TABLE>
<S> <C>
Frank S. Bayley, 58 Mr. Bayley is a partner of the law firm of Baker & McKenzie, and serves
Trustee as a Director and Chairman of C.D. Stimson Company (a private investment
Two Embarcadero Center company). Mr. Bayley is also a trustee of each of the other investment
Suite 2400 companies registered under the 1940 Act that is sub-advised or sub-
San Francisco, CA 94111 administered by the Sub-adviser.
Arthur C. Patterson, 54 Mr. Patterson is Managing Partner of Accel Partners (a venture capital
Trustee firm). He also serves as a director of Viasoft and PageMart, Inc. (both
428 University Avenue public software companies), as well as several other privately held
Palo Alto, CA 94301 software and communications companies. Mr. Patterson is also a trustee
of each of the other investment companies registered under the 1940 Act
that is sub-advised or sub-administered by the Sub-adviser.
Ruth H. Quigley, 63 Miss Quigley is a private investor. From 1984 to 1986, she was President
Trustee of Quigley Friedlander & Co., Inc. (a financial advisory services firm).
1055 California Street Miss Quigley is also a trustee of each of the other investment companies
San Francisco, CA 94108 registered under the 1940 Act that is sub-advised or sub-administered by
the Sub-adviser.
John J. Arthur+, 53 Director, Senior Vice President and Treasurer, A I M Advisors, Inc.;
Vice President Vice President and Treasurer, A I M Management Group Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc.
and Fund Management Company.
</TABLE>
- --------------
* Mr. Guilfolye is an "interested person" of the Company as defined by the 1940
Act due to his affiliation with the Sub-adviser.
+ Mr. Arthur and Ms. Relihan are married to each other.
Statement of Additional Information Page 28
<PAGE>
AIM NEW DIMENSION FUND
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
COMPANY AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- -------------------------------- ------------------------------------------------------------------------
<S> <C> <C>
Kenneth W. Chancey, 52 Senior Vice President -- Mutual Fund Accounting, the Sub-adviser since 1997; Vice
Vice President and President -- Mutual Fund Accounting, the Sub-adviser from 1992-1997.
Principal Accounting Officer
50 California Street
San Francisco, CA 94111
Melville B. Cox, 54 Vice President and Chief Compliance Officer, A I M Advisors, Inc., A I M Capital
Vice President Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc. and Fund Management
Company.
Gary T. Crum, 50 Director and President, A I M Capital Management, Inc.; Director and Senior Vice
Vice President President, A I M Management Group Inc. and A I M Advisors, Inc.; and Director, A I M
Distributors, Inc. and AMVESCAP PLC.
Robert H. Graham, 51 Director, President and Chief Executive Officer, A I M Management Group Inc.; Director and
Vice President President, A I M Advisors, Inc.; Director and Senior Vice President, A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc. and Fund Management
Company; Director, AMVESCAP PLC; Chairman of the Board of Directors and President, INVESCO
Holdings Canada Inc.; and Director, AIM Funds Group Canada Inc. and INVESCO G.P. Canada
Inc.
Helge K. Lee, 52 Chief Legal and Compliance Officer -- North America, the Sub-adviser since October 1997;
Vice President Executive Vice President of the Asset Management Division of Liechtenstein Global Trust
50 California Street since October 1996; Senior Vice President, General Counsel and Secretary of LGT Asset
San Francisco, CA 94111 Management, Inc., INVESCO (NY), Inc., GT Global, GT Global Investor Services, Inc. and
G.T. Insurance from May 1994 to October 1996; Senior Vice President, General Counsel and
Secretary of Strong/Corneliuson Management, Inc. and Secretary of each of the Strong Funds
from October 1991 through May 1994.
Carol F. Relihan+, 43 Director, Senior Vice President, General Counsel and Secretary, A I M Advisors, Inc.; Vice
Vice President President, General Counsel and Secretary, A I M Management Group Inc.; Director, Vice
President and General Counsel, Fund Management Company; Vice President and General
Counsel, A I M Fund Services, Inc.; and Vice President, A I M Capital Management, Inc. and
A I M Distributors, Inc.
</TABLE>
<TABLE>
<S> <C>
Dana R. Sutton, 39 Vice President and Fund Controller, A I M Advisors, Inc.; and Assistant
Vice President and Assistant Vice President and Assistant Treasurer, Fund Management Company.
Treasurer
</TABLE>
------------------------
The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Company and its
funds and recommending firms to serve as independent auditors of the Company.
Each of the Trustees and Officers of the Company is also a Trustee and Officer
of AIM Investment Portfolios, AIM Floating Rate Fund, AIM Investment Funds, AIM
Growth Series, AIM Eastern Europe Fund, GT Global Variable Investment Trust, GT
Global Variable Investment Series, Global Investment Portfolio, Growth
Portfolio, Floating Rate Portfolio and Global High Income Portfolio, which also
are registered investment companies advised by AIM and sub-advised by the
Sub-adviser or an affiliate thereof. Each Trustee and Officer serves in total as
a Trustee and Officer, respectively, of 12 registered investment companies with
47 series managed or administered by AIM and sub-advised or sub-administered by
the Sub-adviser. Each Trustee who is not a director, officer or employee of the
Sub-adviser or any other affiliated company is paid aggregate fees of $5,000 a
year, plus $300 per Fund for each meeting of the Board attended, and reimbursed
travel and other expenses incurred in connection with attendance at such
meetings. Other Trustees and Officers receive no compensation or expense
reimbursement from the Company. As of May 7, 1998, the Officers and Trustees and
their families as a group owned in the aggregate beneficially or of record less
than 1% of the shares of the Fund.
- --------------
+ Mr. Arthur and Ms. Relihan are married to each other.
Statement of Additional Information Page 29
<PAGE>
AIM NEW DIMENSION FUND
MANAGEMENT
- --------------------------------------------------------------------------------
MANAGEMENT SERVICES RELATING TO THE FUND
AIM serves as the investment manager and administrator to the Fund under an
investment management and administration contract ("Management Contract")
between the Trust and AIM. The Sub-adviser serves as the sub-adviser and sub-
administrator to the Fund under a Sub-Advisory and Sub-Administration Contract
between AIM and the Sub-adviser ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). Neither AIM nor the
Sub-adviser receives a fee for providing management services to the Fund.
DISTRIBUTION SERVICES RELATING TO THE FUND
The Fund's Class A, Class B and Class C shares are offered continuously through
the Fund's principal underwriter and distributor, AIM Distributors, on a "best
efforts" basis pursuant to separate distribution contracts between the Trust and
AIM Distributors.
As described in the Prospectus, on May 29, 1998, the Trust adopted a Master
Distribution Plan pursuant to Rule 12b-1 under the 1940 Act relating to the
Class A and Class C shares of the Fund (the "Class A and C Plan"). At the same
time, the Trust also adopted a Master Distribution Plan pursuant to Rule 12b-1
under the 1940 Act relating to Class B shares of the Fund (the "Class B Plan"
and together with the Class A and C Plan, the "Plans"). The rate of payments by
the Fund under the Plans, as described in the Prospectus, may not be increased
without the approval of the majority of the outstanding voting securities of the
affected class.
THE PLANS. Pursuant to an incentive program, AIM Distributors may enter into
agreements ("Shareholder Service Agreements") with investment dealers selected
from time to time by AIM Distributors for the provision of distribution
assistance in connection with the sale of the Fund's shares to such dealers'
customers, and for the provision of continuing personal shareholder services to
customers who may from time to time directly or beneficially own shares of the
Fund. The distribution assistance and continuing personal shareholder services
to be rendered by dealers under the Shareholder Service Agreements may include,
but shall not be limited to, the following: distributing sales literature;
answering routine customer inquiries concerning the Fund; assisting customers in
changing dividend options, account designations and addresses, and in enrolling
in any of several special investment plans offered in connection with the
purchase of the Fund's shares; assisting in the establishment and maintenance of
customer accounts and records and in the processing of purchase and redemption
transactions; investing dividends and any capital gains distributions
automatically in the Fund's shares; and providing such other information and
services as the Fund or the customer may reasonably request.
Under the Plans, in addition to the Shareholder Service Agreements authorizing
payments to selected dealers, banks may enter into Shareholder Service
Agreements authorizing payments under the Plans to be made to banks that provide
services to their customers who have purchased shares. Services provided
pursuant to Shareholder Service Agreements with banks may include some or all of
the following: answering shareholder inquiries regarding the Fund and the Trust;
performing sub-accounting; establishing and maintaining shareholder accounts and
records; processing customer purchase and redemption transactions; providing
periodic statements showing a shareholder's account balance and the integration
of such statements with those of other transactions and balances in the
shareholder's other accounts serviced by the bank; forwarding applicable
prospectuses, proxy statements, reports and notices to bank clients who hold
Fund shares; and such other administrative services as the Fund reasonably may
request, to the extent permitted by applicable statute, rule or regulation.
Similar agreements may be permitted under the Plans for institutions that
provide recordkeeping for and administrative services to 401(k) plans.
Financial intermediaries and any other person entitled to receive compensation
for selling Fund shares may receive different compensation for selling shares of
one particular class over another.
Under a Shareholder Service Agreement, the Fund agrees to pay periodically fees
to selected dealers and other institutions who render the foregoing services to
their customers. The fees payable under a Shareholder Service Agreement will be
calculated at the end of each payment period for each business day of the Fund
during such period at the annual rate of 0.25% of the average daily net asset
value of the Fund's shares purchased or acquired through exchange. Fees
calculated in this manner shall be paid only to those selected dealers or other
institutions who are dealers or institutions of record at the
Statement of Additional Information Page 30
<PAGE>
AIM NEW DIMENSION FUND
close of business on the last business day of the applicable payment period for
the account in which such Fund's shares are held.
Payments pursuant to the Plans are subject to any applicable limitations imposed
by rules of the National Association of Securities Dealers, Inc. ("NASD"). The
Plans conform to rules of the NASD by limiting payments made to dealers and
other financial institutions who provide continuing personal shareholder
services to their customers who purchase and own shares of the Fund to no more
than 0.25% per annum of the average daily net assets of the Fund attributable to
the customers of such dealers or financial institutions, and by imposing a cap
on the total sales charges, including asset-based sales charges, that may be
paid by the Fund and its respective classes.
AIM Distributors does not act as principal, but rather as agent for the Fund, in
making dealer incentive and shareholder servicing payments under the Plans.
These payments are an obligation of the Fund and not of AIM Distributors.
In approving the Plans, the Trustees determined that the adoption of the Plans
was in the best interests of the shareholders of the Fund. Agreements related to
the Plans must also be approved by such vote of the Trustees, including a
majority of Trustees who are not "interested persons" of the Trust (as defined
in the 1940 Act) and who have no direct or indirect financial interests in the
operation of the Plans, or in any agreement related thereto.
Each Plan requires that, at least quarterly, the Trustees review the amounts
expended thereunder and the purposes for which such expenditures were made. Each
Plan requires that so long as it is in effect, the selection and nomination of
Trustees who are not "interested persons" of the Trust will be committed to the
discretion of the Trustees who are not "interested persons" of the Trust, as
defined in the 1940 Act.
As discussed in the Prospectus, AIM Distributors collects sales charges on sales
of Class A shares of the Fund, retains certain amounts of such charges and
reallows other amounts of such charges to broker/dealers that sell shares.
AIM Distributors receives any contingent deferred sales charges ("CDSCs")
payable with respect to redemptions of Class B shares, Class C shares and
certain Class A shares.
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
The Transfer Agent has been retained by the Fund to perform shareholder
servicing, reporting and general transfer agent functions for it. For these
services, the Transfer Agent receives an annual maintenance fee of $17.50 per
account, a new account fee of $4.00 per account, a per transaction fee of $1.75
for all transactions other than exchanges and a per exchange fee of $2.25. The
Transfer Agent is also reimbursed for its out-of-pocket expenses for such items
as postage, forms, telephone charges, stationery and office supplies. The
Sub-adviser also serves as the Fund's pricing and accounting agent. See
"Additional Information -- Special Servicing Agreement."
- --------------------------------------------------------------------------------
VALUATION OF FUND SHARES
- --------------------------------------------------------------------------------
As described in the Prospectus, the Fund's net asset value per share for each
class of shares is determined each day on which the New York Stock Exchange
("NYSE") is open for business ("Business Day") as of the close of regular
trading on the NYSE (currently 4:00 p.m. Eastern Time, unless weather, equipment
failure or other factors contribute to an earlier closing time). Currently, the
NYSE is closed on weekends and on certain days relating to the following
holidays: New Year's Day, Martin Luther King Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The value of the shares of the Underlying Theme Funds will be their net asset
value at the time the net asset value of the Fund is determined.
Statement of Additional Information Page 31
<PAGE>
AIM NEW DIMENSION FUND
INFORMATION RELATING TO SALES
AND REDEMPTIONS
- --------------------------------------------------------------------------------
PAYMENT AND TERMS OF OFFERING
Payment for Class A, Class B or Class C shares of the Fund purchased should
accompany the purchase order, or funds should be wired to the Transfer Agent as
described in the Prospectus. Payment for Fund shares, other than by wire
transfer, must be made by check or money order drawn on a U.S. bank. Checks or
money orders must be payable in U.S. dollars.
As a condition of this offering, if an order to purchase Class A, Class B or
Class C shares is canceled due to nonpayment (for example, because a check is
returned for insufficient funds), the person who made the order will be
responsible for any loss incurred by the Underlying Theme Fund by reason of such
cancellation, and if such purchaser is a shareholder, the Fund shall have the
authority as agent of the shareholder to redeem shares in his or her account at
their then-current net asset value per share to reimburse the Fund for the loss
incurred. Investors whose purchase orders have been canceled due to nonpayment
may be prohibited from placing future orders.
The Fund reserves the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with respect to any
person or class of persons. An order to purchase shares is not binding on the
Fund until it has been confirmed in writing by the Transfer Agent (or other
arrangements made with the Fund, in the case of orders utilizing wire transfer
of funds, as described above) and payment has been received. To protect existing
shareholders, the Fund reserves the right to reject any offer for a purchase of
shares by any individual.
AUTOMATIC INVESTMENT PLAN -- CLASS A, CLASS B AND CLASS C SHARES
To establish participation in the Fund's Automatic Investment Plan ("AIP"),
investors or their broker/dealers should specify whether investment will be in
Class A, Class B or Class C shares and should send the following documents to
the Transfer Agent: (1) an AIP Application; (2) a Bank Authorization Form; and
(3) a voided personal check from the pertinent bank account. The necessary forms
are provided at the back of the Prospectus. Provided that an investor's bank
accepts the Bank Authorization Form, investment amounts will be drawn on the
designated dates (monthly on the 25th day or beginning quarterly on the 25th day
of the month the investor first selects) in order to purchase full and
fractional shares of the Fund at the public offering price determined on that
day. In the event that the 25th day falls on a Saturday, Sunday or holiday,
shares will be purchased on the next business day. If an investor's check is
returned because of insufficient funds or a stop payment order or if the account
is closed, the AIP may be discontinued, and any share purchase made upon deposit
of such check may be canceled. Furthermore, the shareholder will be liable for
any loss incurred by the Fund by reason of such cancellation. Investors should
allow one month for the establishment of an AIP. An AIP may be terminated by the
Transfer Agent or the Fund upon thirty days' written notice or by the
participant at any time without penalty, upon written notice to the Fund or the
Transfer Agent.
LETTER OF INTENT -- CLASS A SHARES
The Letter of Intent ("LOI") is not a binding obligation to purchase the
indicated amount. During such time as Class A shares are held in escrow under an
LOI to ensure payment of applicable sales charges if the indicated amount is not
met, all dividends and capital gain distributions on escrowed shares will be
reinvested in additional Class A shares or paid in cash, as specified by the
shareholder. If the intended investment is not completed within the specified
thirteen-month period, the purchaser must remit to AIM Distributors the
difference between the sales charge actually paid and the sales charge which
would have been applicable if the total Class A purchases had been made at a
single time. If this amount is not paid to AIM Distributors within twenty days
after written request, the appropriate number of escrowed shares will be
redeemed and the proceeds paid to AIM Distributors.
Any investor that entered into a LOI prior to June 1, 1998, under which the
indicated amount is not met, will be subject to the sales charge schedule that
was in effect when the LOI was entered into.
A registered investment adviser, trust company or trust department seeking to
execute an LOI as a single purchaser with respect to accounts over which it
exercises investment discretion is required to provide the Transfer Agent with
information establishing that it has discretionary authority with respect to the
money invested (e.g., by providing a copy of the pertinent investment advisory
agreement). Class A shares purchased in this manner must be registered with the
Transfer
Statement of Additional Information Page 32
<PAGE>
AIM NEW DIMENSION FUND
Agent so that only the investment adviser, trust company or trust department,
and not the beneficial owner, will be able to place purchase, redemption and
exchange orders.
CONVERSION OF CLASS B SHARES
Class B shares of the Fund automatically will convert to Class A shares eight
years following the end of the calendar month in which a purchase was made.
Class B shares outstanding on, and continuously held since, June 1, 1998
automatically convert to Class A shares as of the close of business on the last
business day of the month in which the seventh anniversary of the initial
issuance of such Class B shares occurs. For the purpose of calculating the
holding period required for conversion of Class B shares, the initial issuance
of Class B shares shall mean (i) the date on which such Class B shares were
issued, or (ii) for Class B shares obtained through an exchange, or a series of
exchanges, the date on which the original Class B shares were issued. For
purposes of conversion to Class A, Class B shares purchased through the
reinvestment of dividends and other distributions paid in respect of Class B
shares will be held in a separate sub-account. Each time any Class B shares in
the shareholder's regular account (other than those in the sub-account) convert
to Class A, a pro rata portion of the Class B shares in the sub-account will
also convert to Class A. The portion will be determined by the ratio that the
shareholder's Class B shares converting to Class A bears to the shareholder's
total Class B shares not acquired through dividends and other distributions.
Class B shareholders of the Fund who exchange Class B shares of the Fund that
were outstanding on, and which have been held by the investor continually since,
June 1, 1998 for Class B shares of another AIM/GT Fund offered with a conversion
feature will be subject to the conversion feature of such other AIM/GT Fund,
which is one year longer.
The availability of the conversion feature is subject to the continuing
availability of an opinion of counsel to the effect that the dividends and other
distributions paid on Class A and Class B shares will not result in
"preferential dividends" under the Internal Revenue Code and the conversion of
shares does not constitute a taxable event. If the conversion feature ceased to
be available, the Class B shares would not convert to Class A shares and would
continue to be subject to the higher ongoing expenses of the Class B shares. AIM
and the Sub-adviser have no reason to believe that this condition for the
availability of the conversion feature will not be met.
INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS") AND OTHER TAX-DEFERRED PLANS
Class A, Class B or Class C shares of the Fund may be purchased as the
underlying investment for an IRA meeting the requirements of sections 408(a),
408A or 530 of the Internal Revenue Code of 1986, as amended (the "Code"), as
well as for qualified retirement plans described in Code Section 401 and
custodial accounts complying with Code Section 403(b)(7).
IRAS: If you have earned income from employment (including self-employment), you
can contribute each year to an IRA up to the lesser of (1) $2,000 for yourself
or $4,000 for you and your spouse, regardless of whether your spouse is
employed, or (2) 100% of compensation. Some individuals may be able to take an
income tax deduction for the contribution. Regular contributions may not be made
for the year you become 70 1/2 or thereafter. Unless your and your spouse's
earnings exceed a certain level, you also may establish an "education IRA"
and/or a "Roth IRA." Although contributions to these new types of IRAs are
nondeductible, withdrawals from them will be tax-free under certain
circumstances. Please consult your tax advisor for more information. IRA
applications are available from brokers or AIM Distributors.
ROLLOVER IRAS: Individuals who receive distributions from qualified retirement
plans (other than required distributions) and who wish to keep their savings
growing tax-deferred can roll over (or make a direct transfer of) their
distribution to a Rollover IRA. These accounts can also receive rollovers or
transfers from an existing IRA. If an "eligible rollover distribution" from a
qualified employer-sponsored retirement plan is not directly rolled over to an
IRA (or certain qualified plans), withholding at the rate of 20% will be
required for federal income tax purposes. A distribution from a qualified plan
that is not an "eligible rollover distribution," including a distribution that
is one of a series of substantially equal periodic payments, generally is
subject to regular wage withholding or withholding at the rate of 10% (depending
on the type and amount of the distribution), unless you elect not to have any
withholding apply. Please consult your tax advisor for more information.
SEP-IRAS: Simplified employee pension plans ("SEPs" or "SEP-IRAs") provide
self-employed individuals (and any eligible employees) with benefits similar to
Keogh plans (i.e., self-employed individual retirement plans) or Code Section
401(k) plans, but with fewer administrative requirements and therefore
potentially lower annual administration expenses.
CODE SECTION 403(b)(7) CUSTODIAL ACCOUNTS: Employees of public schools and most
other tax-exempt organizations can make pre-tax salary reduction contributions
to these accounts.
Statement of Additional Information Page 33
<PAGE>
AIM NEW DIMENSION FUND
PROFIT-SHARING (INCLUDING SECTION 401(k)) AND MONEY PURCHASE PENSION
PLANS: Corporations and other employers can sponsor these qualified defined
contribution plans for their employees. A Section 401(k) plan, a type of
profit-sharing plan, additionally permits the eligible, participating employees
to make pre-tax salary reduction contributions to the plan (up to certain
limits).
SIMPLE PLANS: Employers with no more than 100 employees that do not maintain
another retirement plan may establish a Savings Incentive Match Plan for
Employees ("SIMPLE") either as separate IRAs or as part of a Section 401(k)
plan. SIMPLEs are not subject to the complicated nondiscrimination rules that
generally apply to qualified retirement plans.
EXCHANGES
Class A and Class B shares of the Fund may be exchanged for shares of the
corresponding class of other AIM/GT Funds, based on their respective net asset
values without imposition of any sales charges provided that the registration
remains identical. Class A shares of the Fund may be exchanged only for Class A
shares of other AIM/GT Funds. Class B shares of the Fund may be exchanged only
for Class B shares of other AIM/GT Funds. Exchange privileges for Class C shares
will not be available until other AIM/GT Funds commence offering Class C shares.
The exchange privilege is not an option or right to purchase shares but is
permitted under the current policies of the respective AIM/GT Funds. The
privilege may be discontinued or changed at any time by any of the funds upon
sixty days prior written notice to the shareholders of such fund and is
available only in states where the exchange may be made legally. Before
purchasing shares through the exercise of the exchange privilege, a shareholder
should obtain and read a copy of the prospectus of the fund to be purchased and
should consider the investment objective(s) of the fund.
SALES CHARGE WAIVERS FOR SHARES PURCHASED PRIOR TO JUNE 1, 1998
Class A shares that are subject to a contingent deferred sales charge and that
were purchased before June 1, 1998 are entitled to the following waivers from
the contingent deferred sales charge otherwise due upon redemption: (1) minimum
required distributions made in connection with an IRA, Keogh Plan or custodial
account under Section 403(b) of the Code or other retirement plan following
attainment of age 70 1/2; (2) total or partial redemptions resulting from a
distribution following retirement in the case of a tax-qualified
employer-sponsored retirement plan; (3) when a redemption results from a
tax-free return of an excess contribution pursuant to Section 408(d)(4) or (5)
of the Code or from the death or disability of the employee; (4) redemptions
pursuant to a Fund's right to liquidate a shareholder's account involuntarily;
(5) redemptions pursuant to distributions from a tax-qualified
employer-sponsored retirement plan, which is invested in AIM/GT Funds, which are
permitted to be made without penalty pursuant to the Code, other than tax-free
rollovers or transfers of assets, and the proceeds of which are reinvested in
AIM/GT Funds; (6) redemptions made in connection with participant-directed
exchanges between options in an employer-sponsored benefit plan; (7) redemptions
made for the purpose of providing cash to fund a loan to a participant in a
tax-qualified retirement plan; (8) redemptions made in connection with a
distribution from any retirement plan or account that is permitted in accordance
with the provisions of Section 72(t)(2) of the Code, and the regulations
promulgated thereunder; (9) redemptions made in connection with a distribution
from any retirement plan or account that involves the return of an excess
deferral amount pursuant to Section 401(k)(8) or Section 402(g)(2) of the Code;
(10) redemptions made in connection with a distribution from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code to a
participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon
hardship of the covered employee (determined pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)); and (11) redemptions made by or for the benefit of
certain states, counties or cities, or any instrumentalities, departments or
authorities thereof where such entities are prohibited or limited by applicable
law from paying a sales charge or commission.
Class B and Class C shares purchased before June 1, 1998 are subject to the
following waivers from the contingent deferred sales charge otherwise due upon
redemption in addition to the waivers provided for redemptions of currently
issued Class B and Class C shares as described in the Prospectus: (1) total or
partial redemptions resulting from a distribution following retirement in the
case of a tax-qualified employer-sponsored retirement; (2) minimum required
distributions made in connection with an IRA, Keogh Plan or custodial account
under Section 403(b) of the Code or other retirement plan following attainment
of age 70 1/2; (3) a one-time reinvestment in Class B or Class C shares of a
Fund within 180 days of a prior redemption; (4) redemptions pursuant to
distributions from a tax-qualified employer-sponsored retirement plan, which is
invested in AIM/GT Funds, which are permitted to be made without penalty
pursuant to the Code, other than tax-free rollovers or transfers of assets, and
the proceeds of which are reinvested in AIM/GT Funds; (5) redemptions made in
connection with participant-directed exchanges between options in an
employer-sponsored benefit plan; (6) redemptions made for the purpose of
providing cash to fund a loan to a participant in a tax-qualified retirement
plan; (7) redemptions made in connection with a distribution from any retirement
plan or account that is permitted in accordance with the provisions of Section
72(t)(2) of the Code, and the regulations promulgated thereunder;
Statement of Additional Information Page 34
<PAGE>
AIM NEW DIMENSION FUND
(8) redemptions made in connection with a distribution from a qualified
profit-sharing or stock bonus plan described in Section 401(k) of the Code to a
participant or beneficiary under Section 401(k)(2)(B)(IV) of the Code upon
hardship of the covered employee (determined pursuant to Treasury Regulation
Section 1.401(k)-1(d)(2)); and (9) redemptions made by or for the benefit of
certain states, counties or cities, or any instrumentalities, departments or
authorities thereof where such entities are prohibited or limited by applicable
law from paying a sales charge or commission.
TELEPHONE REDEMPTIONS
A corporation or partnership wishing to utilize telephone redemption services
must submit a "Corporate Resolution" or "Certificate of Partnership" indicating
the names, titles and the required number of signatures of persons authorized to
act on its behalf. The certificate must be signed by a duly authorized
officer(s), and, in the case of a corporation, the corporate seal must be
affixed. All shareholders may request that redemption proceeds be transmitted by
bank wire upon request directly to the shareholder's predesignated account at a
domestic bank or savings institution if the proceeds are at least $1,000. Costs
in connection with the administration of this service, including wire charges,
currently are borne by the Fund. Proceeds of less than $1,000 will be mailed to
the shareholder's registered address of record. The Fund and the Transfer Agent
reserve the right to refuse any telephone instructions and may discontinue the
aforementioned redemption options upon thirty days' written notice.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders owning Class A, Class B or Class C shares of the Fund with a value
of $10,000 or more may establish a Systematic Withdrawal Plan ("SWP"). Under an
SWP, a shareholder will receive monthly or quarterly payments, in amounts of not
less than $100 per payment, through the automatic redemption of the necessary
number of shares on the designated dates (monthly on the 25th day or quarterly
on the 25th day of January, April, July and October). In the event that the 25th
day falls on a Saturday, Sunday or holiday, the redemption will take place on
the prior business day. Certificates, if any, for the shares being redeemed must
be held by the Transfer Agent. Checks will be made payable to the designated
recipient and mailed within seven days. If the recipient is other than the
registered shareholder, the signature of each shareholder must be guaranteed on
the SWP application (see "How to Redeem Shares" in the Prospectus). A
corporation (or partnership) must also submit a "Corporation Resolution" (or
"Certificate of Partnership") indicating the names, titles, and signatures of
the individuals authorized to act on its behalf, and the SWP application must be
signed by a duly authorized officer(s) and the corporate seal affixed.
With respect to a SWP, the maximum annual SWP withdrawal is 12% of the initial
account value. Withdrawals in excess of 12% of the initial account value
annually may result in assessment of a contingent deferred sales charge. See
"How to Invest" in the Prospectus.
Shareholders should be aware that such systematic withdrawals may deplete or use
up entirely the initial investment and result in the realization of long-term or
short-term capital gains or losses. The SWP may be terminated at any time by the
Transfer Agent or the Fund upon thirty days' written notice or by a shareholder
upon written notice to the Fund or the Transfer Agent. Applications and further
details regarding establishment of an SWP are provided at the back of the
Prospectus.
SUSPENSION OF REDEMPTION PRIVILEGES
The Fund may suspend redemption privileges or postpone the date of payment for
more than seven days after a redemption order is received during any period (1)
when the NYSE is closed other than customary weekend and holiday closings, or
trading on the NYSE is restricted as directed by the SEC, (2) when an emergency
exists, as defined by the SEC, which would prohibit the Fund or the Underlying
Theme Portfolios from disposing of portfolio securities owned by them or in
fairly determining the value of their assets, or (3) as the SEC may otherwise
permit.
REDEMPTIONS IN KIND
It is possible that conditions may arise in the future that would, in the
opinion of the Trust's Board of Trustees, make it undesirable for the Fund to
pay for all redemptions in cash. In such cases, the Board may authorize payment
to be made in portfolio securities or other property of the Fund, so-called
"redemptions in kind." Payment of redemptions in kind will be made in readily
marketable securities. Such securities would be valued at the same value
assigned to them in computing the net asset value per share. Shareholders
receiving such securities would incur brokerage costs in selling any such
securities so received. However, despite the foregoing, the Trust has filed with
the SEC an election pursuant to Rule 18f-1 under the 1940 Act. This means that
the Fund will pay in cash all requests for redemption made by any shareholder of
record, limited in amount with respect to each shareholder during any ninety-day
period to the lesser of $250,000 or 1% of the net asset value of the Fund at the
beginning of such period. This election will be irrevocable so long as Rule
18f-1 remains in effect, unless the SEC by order upon application permits the
withdrawal of such election.
Statement of Additional Information Page 35
<PAGE>
AIM NEW DIMENSION FUND
TAXES
- --------------------------------------------------------------------------------
TAXATION OF THE FUND
To continue to qualify for treatment as a regulated investment company ("RIC")
under the Code, the Fund must distribute to its shareholders for each taxable
year at least 90% of its investment company taxable income (consisting generally
of net investment income and net short-term capital gain) ("Distribution
Requirement") and must meet several additional requirements. These requirements
include the following: (1) the Fund must derive at least 90% of its gross income
each taxable year from dividends, interest, payments with respect to securities
loans and gains from the sale or other disposition of securities, or other
income derived with respect to its business of investing in securities; (2) at
the close of each quarter of the Fund's taxable year, at least 50% of the value
of its total assets must be represented by cash and cash items, U.S. government
securities, securities of other RICs (including the Underlying Theme Funds) and
other securities, with these other securities limited, in respect of any one
issuer, to an amount that does not exceed 5% of the value of the Fund's total
assets and that does not represent more than 10% of the issuer's outstanding
voting securities; and (3) at the close of each quarter of the Fund's taxable
year, not more than 25% of the value of its total assets may be invested in
securities (other than U.S. government securities or the securities of other
RICs, including the Underlying Theme Funds) of any one issuer.
The Fund will invest its assets in shares of the Underlying Theme Funds, cash
and money market instruments. Accordingly, the Fund's income will consist of
distributions from the Underlying Theme Funds, net gains realized from the
disposition of Underlying Theme Fund shares and interest. If an Underlying Theme
Fund qualifies for treatment as a RIC under the Code -- each has done so for its
past taxable years and intends to continue to do so for its current and future
taxable years -- (1) dividends paid to the Fund from the Underlying Theme Fund's
investment company taxable income (which may include net gains from certain
foreign currency transactions) will be taxable to the Fund as ordinary income to
the extent of the Underlying Theme Fund's earnings and profits and (2)
distributions paid to the Fund from the Underlying Theme Fund's net capital gain
(the excess of net long-term capital gain over net short-term capital loss),
when designated as such, will be taxable to the Fund as long-term capital gains,
regardless of how long the Fund has held the Underlying Theme Fund's shares. If
shares of an Underlying Theme Fund are purchased within 30 days before or after
redeeming at a loss, other shares of that Underlying Theme Fund (whether
pursuant to a rebalancing of the Fund's portfolio or otherwise) all or a part of
the loss will not be deductible by the Fund and instead will increase its basis
for the newly purchased shares.
Although an Underlying Theme Fund will be eligible to elect to "pass-through" to
its shareholders (including the Fund) the benefit of the foreign tax credit with
respect to any foreign and U.S. possessions income taxes it pays if more than
50% in the value of its total assets at the close of any taxable year consists
of securities of foreign corporations, the Fund will not qualify to pass that
benefit through to its shareholders because of its inability to satisfy that
asset test.
The Fund will be subject to a nondeductible 4% excise tax to the extent it fails
to distribute by the end of any calendar year substantially all of its ordinary
income for that year and capital gain net income for the one-year period ending
on October 31 of that year, plus certain other amounts.
TAXATION OF THE FUND'S SHAREHOLDERS
Dividends and other distributions declared by the Fund, and payable to
shareholders of record as of a date, in October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
A portion of the dividends from the Fund's investment company taxable income
(whether paid in cash or reinvested in additional shares) may be eligible for
the dividends-received deduction allowed to corporations. The eligible portion
may not exceed the total of the Fund's share of the aggregate dividends received
by each Underlying Theme Fund from U.S. corporations. However, dividends
received by a corporate shareholder and deducted by it pursuant to the
dividends-received deduction may be subject indirectly to the alternative
minimum tax.
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be
Statement of Additional Information Page 36
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AIM NEW DIMENSION FUND
aware that if shares are purchased shortly before the record date for any
dividend or other distribution, the shareholder will pay full price for the
shares and receive some portion of the price back as a taxable distribution.
Dividends paid by the Fund to a shareholder who, as to the United States, is a
nonresident alien individual, nonresident alien fiduciary of a trust or estate,
foreign corporation or foreign partnership ("foreign shareholder") generally
will be subject to U.S. withholding tax (at a rate of 30% or lower treaty rate).
Withholding will not apply, however, to a dividend paid by the Fund to a foreign
shareholder that is "effectively connected with the conduct of a U.S. trade or
business," in which case the reporting and withholding requirements applicable
to domestic shareholders will apply. A distribution of net capital gain by the
Fund to a foreign shareholder generally will be subject to U.S. federal income
tax (at the rates applicable to domestic persons) only if the distribution is
"effectively connected" or the foreign shareholder is treated as a resident
alien individual for federal income tax purposes.
The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Fund and its shareholders. Investors are urged to
consult their own tax advisers for more detailed information and for information
regarding any foreign, state and local taxes applicable to distributions
received from the Fund.
Statement of Additional Information Page 37
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AIM NEW DIMENSION FUND
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
SPECIAL SERVICING AGREEMENT
Subject to the receipt of an exemptive order from the Securities and Exchange
Commission, a Special Servicing Agreement (the "Service Agreement") will be
entered into among AIM, the Sub-adviser, the Underlying Theme Funds, GT Global
Investor Services, Inc., and the Trust. The Service Agreement will provide that,
if the officers of any Underlying Theme Fund, at the direction of the Board of
Trustees, determine that the aggregate expenses of the Fund are less than the
estimated savings to the Underlying Theme Fund from the operation of the Fund,
the Underlying Theme Fund will bear those expenses in proportion to the average
daily value of its shares owned by the Fund and/or the number of shareholder
accounts at the Fund. No Underlying Theme Fund will bear such expenses in excess
of the estimated savings to it. Such savings are expected to result primarily
from the elimination of numerous separate shareholder accounts which are or
would have been invested directly in the Underlying Theme Funds and the
resulting reduction in shareholder servicing costs. In this regard, the
shareholder servicing costs to any Underlying Theme Fund for servicing one
account registered to the Trust would be significantly less than the cost to
that same Underlying Theme Fund of servicing the same pool of assets contributed
in the typical fashion by a large group of individual shareholders owning small
accounts in each Underlying Theme Fund. If the Fund's costs exceed the aggregate
estimated savings to the Underlying Theme Funds, the Sub-adviser will pay the
excess on behalf of the Fund.
Rule 12b-1 distribution and service fees will not be paid in accordance with the
Service Agreement. Nor will certain non-recurring and extraordinary expenses be
payable in accordance therewith including: the fees and costs of actions, suits
or proceedings and any penalties or damages in connection therewith, to which
the Trust and/or the Fund may incur directly, or may incur as a result of its
legal obligation to provide indemnification to its officers, trustees and
agents; the fees and costs of any governmental investigation and any fines or
penalties in connection therewith; and any federal, state or local tax, or
related interest penalties or additions to tax, incurred, for example, as a
result of the Trust's failure to distribute all of its income and gains, its
failure to qualify as a RIC under the Code, or failure to timely file any
required tax returns or other filings. Amounts not payable pursuant to the
Service Agreement will be paid by the Fund.
AIM was organized in 1976, and along with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. AIM is a direct, wholly owned subsidiary of A I M
Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Funds' principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are an
independent investment management group that has a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, acts as custodian of the Fund's and the Underlying Theme Portfolios'
assets.
INDEPENDENT ACCOUNTANTS
The Trust's independent accountants are Coopers & Lybrand L.L.P., One Post
Office Square, Boston, Massachusetts 02109. Coopers & Lybrand L.L.P. conducts
annual audits of the Fund's financial statements, assists in the preparation of
the Fund's federal and state income tax returns and consults with the Trust as
to matters of accounting, regulatory filings, and federal and state income
taxation.
The audited financial statements of the Trust included in this Statement of
Additional Information have been examined by Coopers & Lybrand L.L.P., as stated
in their opinion appearing herein, and are included in reliance upon such
opinion given upon the authority of that firm as experts in accounting and
auditing.
SHAREHOLDER LIABILITY
Under Delaware law, the shareholders of the Trust enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances shareholders of
Statement of Additional Information Page 38
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AIM NEW DIMENSION FUND
the Trust may be held personally liable for the Trust's obligations. However,
the Trust Agreement disclaims shareholder liability for acts or obligations of
the Trust and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Trust or a
trustee. The Trust Agreement provides for indemnification from the Trust
property for all losses and expenses of any shareholder held personally liable
for the Trust's obligations. Thus, the risk of a shareholder incurring financial
loss on account of such liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations and where the other party was
held not to be bound by the disclaimer.
NAME
Prior to May 29, 1998, the Fund operated under the name of GT Global New
Dimension Fund.
- --------------------------------------------------------------------------------
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
STANDARDIZED RETURNS
The Fund's "Standardized Returns," as referred to in the Prospectus (see "Other
Information -- Performance Information" in the Prospectus), is calculated
separately for Class A, Class B and Class C shares of the Fund, as follows:
Standardized Return (average annual total return ("T")) is computed by using the
ending redeeming value ("ERV") of a hypothetical initial investment of $1,000
("P") over a period of years ("n") according to the following formula as
required by the SEC: P(1+T) = ERV. The following assumptions will be reflected
in computations made in accordance with this formula: (1) for Class A shares,
deduction of the maximum sales charge of 4.75% from the $1,000 initial
investment; (2) for Class B shares, deduction of the applicable contingent
deferred sales charge imposed on a redemption of Class B shares held for the
period; (3) reinvestment of dividends and other distributions at net asset value
on the reinvestment date determined by the Trust's Board of Trustees; and (4) a
complete redemption at the end of any period illustrated.
NON-STANDARDIZED RETURNS
In addition to Standardized Returns, the Fund also may include in
advertisements, sales literature and shareholder reports other total return
performance data ("Non-Standardized Return"). Non-Standardized Return is
calculated separately for Class A, Class B and Class C shares of the Fund and
may be calculated according to several different formulas. Non-Standardized
Returns may be quoted for the same or different time periods for which
Standardized Returns are quoted. Non-Standardized Returns may or may not take
sales charges into account; performance data calculated without taking the
effect of sales charges into account will be higher than data including the
effect of such charges.
Average annual Non-Standardized Return ("T") is computed by using the ending
redeeming value ("ERV") of a hypothetical initial investment of $1,000 ("P")
over a period of years ("n") according to the following formula as required by
the SEC: P(1+T) = ERV. The following assumptions will be reflected in
computations made in accordance with this formula: (1) no deduction of sales
charges; (2) reinvestment of dividends and other distributions at net asset
value on the reinvestment date determined by the Board; and (3) a complete
redemption at the end of any period illustrated.
The Fund's investment results will vary from time to time depending upon market
conditions, the composition of each Underlying Theme Portfolio's portfolio, and
operating expenses of the Fund, so that current or past yield or total return
should not be considered representative of what an investment in the Fund may
earn in any future period. These factors and possible differences in the methods
used in calculating investment results should be considered when comparing the
Fund's investment results with those published for other investment companies
and other investment vehicles. The Fund's results also should be considered
relative to the risks associated with the Fund's investment objective and
policies.
IMPORTANT POINTS TO NOTE ABOUT DATA RELATING TO WORLD EQUITY AND BOND MARKETS
The Fund and AIM Distributors may from time to time in advertisements, sales
literature and reports furnished to present or prospective shareholders compare
the Fund with the following, among others:
(1) The Consumer Price Index ("CPI"), which is a measure of the average
change in prices over time in a fixed market basket of goods and services
(e.g., food, clothing, shelter, fuels, transportation fares, charges for
doctors' and dentists' services, prescription medicines, and other goods and
services that people buy for day-to-day living). There
Statement of Additional Information Page 39
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AIM NEW DIMENSION FUND
is inflation risk which does not affect a security's value but its
purchasing power, i.e. the risk of changing price levels in the economy that
affects security prices or the price of goods and services.
(2) Data and mutual fund rankings published or prepared by Lipper
Analytical Data Services, Inc. ("Lipper"), CDA/Wiesenberger Investment
Companies Service ("CDA/Wiesenberger"), Morningstar, Inc., Micropal, Inc.
and/or other companies that rank and/or compare mutual funds by overall
performance, investment objectives, assets, expense levels, periods of
existence and/or other factors. In this regard the Fund may be compared to
its "peer group" as defined by Lipper, CDA/Wiesenberger, Morningstar and/or
other firms, as applicable, or to specific funds or groups of funds within
or outside of such peer group. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared without
regard to tax consequences. In addition to the mutual fund rankings, the
Fund's performance may be compared to mutual fund performance indices
prepared by Lipper. Morningstar is a mutual fund rating service that also
rates mutual funds on the basis of risk-adjusted performance. Morningstar
ratings are calculated from a fund's three, five and ten year average annual
returns with appropriate fee adjustments and a risk factor that reflects
fund performance relative to the three-month U.S. Treasury bill monthly
returns. Ten percent of the funds in an investment category receive five
stars and 22.5% receive four stars. The ratings are subject to change each
month.
(3) Bear Stearns Foreign Bond Index, which provides simple average
returns for individual countries and gross national product ("GNP") weighted
index, beginning in 1975. The returns are broken down by local market and
currency.
(4) Ibbotson Associates International Bond Index, which provides a
detailed breakdown of local market and currency returns since 1960.
(5) Standard & Poor's 500 Composite Stock Price Index, which is a widely
recognized index composed of the capitalization-weighted average of the
price of 500 of the largest publicly traded stocks in the United States.
(6) Dow Jones Industrial Average.
(7) CNBC/Financial News Composite Index.
(8) Morgan Stanley Capital International World Indices, including, among
others, the Morgan Stanley Capital International Europe, Australia, Far East
Index ("EAFE Index"). The EAFE index is an unmanaged index of more than
1,000 companies in Europe, Australia and the Far East.
(9) Morgan Stanley Capital International All Country (AC) World Index
("MSCI"). The MSCI is a broad, unmanaged index of global stock prices,
currently comprising 2500 different issuers, located in 47 countries, and
grouped in 38 separate industries.
(10) Salomon Brothers World Government Bond Index and Salomon Brothers
World Government Bond Index-Non-U.S., each of which is a widely used index
composed of world government bonds.
(11) The World Bank Publication of Trends in Developing Countries (TIDE),
which provides brief reports on most of the World Bank's borrowing members.
The World Development Report is published annually and looks at global and
regional economic trends and their implications for the developing
economies.
(12) Salomon Brothers Global Telecommunications Index, which is composed
of telecommunications companies in the developing and emerging countries.
(13) Datastream and Worldscope, each of which is an on-line database
retrieval service for information including international financial and
economic data.
(14) International Financial Statistics, which is produced by the
International Monetary Fund.
(15) Various publications and annual reports, produced by the World Bank
and its affiliates.
(16) Various publications from the International Bank for Reconstruction
and Development.
(17) Various publications produced by ratings agencies such as Moody's,
S&P and Fitch.
(18) Wilshire Associates, which is an on-line database for international
financial and economic data including performance measure for a wide range
of securities.
(19) Bank Rate National Monitor Index, which an average of the quoted
rates for 100 leading banks and thrifts in ten U.S. cities.
Statement of Additional Information Page 40
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AIM NEW DIMENSION FUND
(20) International Finance Corporation ("IFC") Emerging Markets Data
Base, which provides detailed statistics on stock and bond markets in
developing countries.
(21) Various publications from the Organization for Economic Cooperation
and Development ("OECD").
(22) Average of savings accounts, which is a measure of all kinds of
savings deposits, including longer-term certificates. Savings accounts offer
a guaranteed rate of return on principal, but no opportunity for capital
growth. During a portion of the period, the maximum rates paid on some
savings deposits were fixed by law.
Indices, economic and financial data prepared by the research departments of
various financial organizations, such as Salomon Brothers, Inc., Lehman
Brothers, Merrill Lynch, Pierce, Fenner & Smith, Inc., Financial Research
Corporation, J.P. Morgan, Morgan Stanley, Smith Barney Shearson, S.G. Warburg,
Jardine Flemming, The Bank for International Settlements, Asian Development
Bank, Bloomberg, L.P., and Ibbotson Associates, may be used, as well as
information reported by the Federal Reserve and the respective central banks of
various nations. In addition, AIM Distributors may use performance rankings,
ratings and commentary reported periodically in national financial publications,
including Money Magazine, Mutual Fund Magazine, Smart Money, Global Finance,
EuroMoney, Financial World, Forbes, Fortune, Business Week, Latin Finance, the
Wall Street Journal, Emerging Markets Weekly, Kiplinger's Guide To Personal
Finance, Barron's, The Financial Times, USA Today, The New York Times, Far
Eastern Economic Review, The Economist and Investors Business Digest. The Fund
may compare its performance to that of other compilations or indices of
comparable quality to those listed above and other indices that may be developed
and made available in the future.
Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Fund or AIM
Distributors. The authors and publishers of such material are not to be
considered as "experts" under the 1933 Act, on account of the inclusion of such
information herein.
A portion of the performance figures for each market includes the positive or
negative effects of the currency exchange rates effective at December 31 of each
year between the U.S. dollar and currency of the foreign market (e.g., Japanese
Yen, German Deutschemark, and Hong Kong Dollar). A foreign currency that has
strengthened or weakened against the U.S. dollar will positively or negatively
affect the reported returns, as the case may be.
AIM Distributors believes that this information may be useful to investors
considering whether and to what extent to diversify their investments through
the purchase of mutual funds investing in securities on a global basis. However,
this data is not a representation of the past performance of the Fund, nor is it
a prediction of such performance. The performance of the Fund will differ from
the historical performance of relevant indices. The performance of indices does
not take expenses into account, while the Fund incurs expenses in its
operations, which will reduce performance. Each of these factors will cause the
performance of the Fund to differ from relevant indices.
From time to time, the Fund and AIM Distributors may refer to the number of
shareholders in the Fund or the aggregate number of shareholders in all AIM
Funds or the dollar amount of the Fund's assets under management or rankings by
DALBAR Surveys, Inc. in advertising materials.
AIM Distributors believes the Fund is an appropriate investment for long-term
investment goals including funding retirement, paying for education or
purchasing a house. AIM Distributors may provide information designed to help
individuals understand their investment goals and explore various financial
strategies. For example, AIM Distributors may describe general principles of
investing, such as asset allocation, diversification and risk tolerance. The
Fund does not represent a complete investment program, and investors should
consider the Fund as appropriate for a portion of their overall investment
portfolio with regard to their long-term investment goals. There is no assurance
that any such information will lead to achieving these goals or guarantee future
results.
From time to time, AIM Distributors may refer to or advertise the names of U.S.
and non-U.S. companies and their products, although there can be no assurance
that any AIM Fund may own the securities of these companies.
Ibbotson Associates of Chicago, Illinois ("Ibbotson") provides historical
returns of the capital markets in the United States, including common stocks,
small capitalization stocks, long-term corporate bonds, intermediate-term
government bonds, long-term government bonds, Treasury bills, the U.S. rate of
inflation (based on the CPI), and combinations of various capital markets. The
performance of these capital markets are based on the returns of different
indices.
AIM Funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any of
these
Statement of Additional Information Page 41
<PAGE>
AIM NEW DIMENSION FUND
capital markets. The risks associated with the security types in any capital
market may or may not correspond directly to those of the funds. Ibbotson
calculates total returns in the same method as the funds.
The Fund may quote various measures of volatility and benchmark correlation such
as beta, standard deviation and R in advertising. In addition, the Fund may
compare these measures to those of other funds. Measures of volatility seek to
compare the Fund's historical share price fluctuations or total returns compared
to those of a benchmark. All measures of volatility and correlation are
calculated using averages of historical data.
The Fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging programs. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares when prices are
low. While such a strategy does not assure a profit or guard against loss in a
declining market, the investor's average cost per share can be lower than if
fixed numbers of shares are purchased at the same intervals. In evaluating such
a plan, investors should consider their ability to continue purchasing shares
through periods of low price levels.
The Fund may describe in its sales material and advertisements how an investor
may invest in AIM Funds through various retirement plans or other programs that
offer deferral of income taxes on investment earnings and to which an investor
may make deductible contributions. Because of their advantages, these retirement
plans and programs may produce returns superior to comparable non-retirement
investments. For example, a $10,000 investment earning a taxable return of 10%
annually would have an after-tax value of $17,976 after ten years, assuming tax
was deducted from the return each year at a 39.6% rate. An equivalent
tax-deferred investment would have an after-tax value of $19,626 after ten
years, assuming tax was deducted at a 39.6% rate from the deferred earnings at
the end of the ten-year period. In sales material and advertisements, the Fund
may also discuss these plans and programs. See "Information Relating to Sales
and Redemptions -- Individual Retirement Accounts ("IRAs") and Other
Tax-Deferred Plans."
AIM Distributors may from time to time in its sales materials and advertising
discuss the risks inherent in investing. The major types of investment risk are
market risk, industry risk, credit risk, interest rate risk, liquidity risk and
inflation risk. Risk represents the possibility that you may lose some or all of
your investment over a period of time. A basic tenet of investing is the greater
the potential reward, the greater the risk.
From time to time, the Fund and AIM Distributors will quote data regarding
industries, companies, individual countries, regions, world stock exchanges, and
economic and demographic statistics from sources AIM Distributors deems
reliable, including the economic and financial data of financial organizations,
such as:
1) Stock market capitalization: Morgan Stanley Capital International World
Indices, IFC and Datastream.
2) Stock market trading volume: Morgan Stanley Capital International Industry
Indices and IFC.
3) The number of listed companies: IFC, GT Guide to World Equity Markets,
Salomon Brothers, Inc., and S.G. Warburg.
4) Wage rates: U.S. Department of Labor Statistics and Morgan Stanley Capital
International World.
5) International industry performance: Morgan Stanley Capital International
World Indices, Wilshire Associates and Salomon Brothers, Inc.
6) Stock market performance: Morgan Stanley Capital International World
Indices, IFC and Datastream.
7) The Consumer Price Index and inflation rate: The World Bank, Datastream and
IFC.
8) Gross Domestic Product ("GDP"): Datastream and The World Bank.
9) GDP growth rate: IFC, The World Bank and Datastream.
10) Population: The World Bank, Datastream and United Nations.
11) Average annual growth rate (%) of population: The World Bank, Datastream and
United Nations.
12) Age distribution within populations: OECD and United Nations.
13) Total exports and imports by year: IFC, The World Bank and Datastream.
14) Top three companies by country, industry or market: IFC, GT Guide to World
Equity Markets, Salomon Brothers Inc., and S.G. Warburg.
15) Foreign direct investments to developing countries: The World Bank and
Datastream.
Statement of Additional Information Page 42
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AIM NEW DIMENSION FUND
16) Supply, consumption, demand and growth in demand of certain products,
services and industries, including, but not limited to electricity, water,
transportation, construction materials, natural resources, technology, other
basic infrastructure, financial services, health care services and supplies,
consumer products and services and telecommunications equipment and services
(sources of such information may include, but would not be limited to, The
World Bank, OECD, IMF, Bloomberg and Datastream).
17) Standard deviation and performance returns for U.S. and non-U.S. equity and
bond markets: Morgan Stanley Capital International.
18) Countries restructuring their debt, including those under the Brady Plan:
the Sub-adviser.
19) Political and economic structure of countries: Economist Intelligence Unit.
20) Government and corporate bonds -- credit ratings, yield to maturity and
performance returns: Salomon Brothers, Inc.
21) Dividend yields for U.S. and non-U.S. companies: Bloomberg.
From time to time, AIM Distributors may include in its advertisement and sales
material, information about privatization which is an economic process involving
the sale of state-owned companies to the private sector.
In advertising and sales materials, AIM Distributors may make reference to or
discuss its products, services and accomplishments. Among these accomplishments
are that in 1983 the Sub-adviser provided assistance to the government of Hong
Kong in linking its currency to the U.S. dollar, and that in 1987 Japan's
Ministry of Finance licensed LGT Asset Management Ltd. as one of the first
foreign discretionary investment managers for Japanese investors. Such
accomplishments, however, should not be viewed as an endorsement of the
Sub-adviser by the government of Hong Kong, Japan's Ministry of Finance or any
other government or government agency. Nor do any such accomplishments of the
Sub-adviser provide any assurance that the AIM/GT Funds' investment objectives
will be achieved.
GENERAL INFORMATION ABOUT THE UNDERLYING THEME PORTFOLIOS
Each Underlying Theme Portfolio may invest worldwide across industries within
the Portfolio's area of concentration without national or regional restrictions.
The ability of each Underlying Theme Portfolio to invest worldwide may allow the
portfolio managers to select industries in different economic cycles and varying
stages of development, though there is no assurance that the managers will be
successful in this selection.
Each Underlying Theme Portfolio's area of concentration reflects the underlying
theme of the Portfolio. AIM Distributors believes that there are certain social,
political and economic trends that may benefit one or more industries within an
Underlying Theme Portfolio's area of concentration. Of course, there is no
assurance that any of the Funds will benefit as a result.
HEALTH CARE FUND
From time to time the Fund and AIM Distributors will quote information including
data regarding:
/ / Trading volume, number of listed companies and the largest companies of
the global health care industry
/ / Expenditures by various countries, regions and age groups on health care
/ / Population of countries, regions and age groups
/ / Natality and mortality rates in various regions, countries and age
groups
/ / Life expectancy rates in various regions, countries and age groups
/ / New health care products and products seeking approval
/ / Health maintenance organizations (HMOs) and their enrollment growth
/ / Studies from, but not limited to, the American Medical Association
showing the effectiveness of using drugs to cure illness
/ / Medical technology and devices in use or in development
/ / Regulatory environment of health care industries
/ / Consolidation in the health care industries
Statement of Additional Information Page 43
<PAGE>
AIM NEW DIMENSION FUND
The information quoted has not been independently verified by the Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including the following:
/ / Research firms such as Mehta and Isaly which publishes PHARMACEUTICAL
PORTFOLIO RECOMMENDATIONS
/ / OECD and its publications such as the OECD HEALTH DATA, as supplemented
annually
/ / Morgan Stanley Capital International stock market industry indices such
as Health & Personal Care
/ / The World Bank and its publications such as THE WORLD DEVELOPMENT
REPORT, as supplemented annually
/ / IFC and publications such as the EMERGING STOCK MARKETS FACTBOOK
INFORMATION ABOUT THE GLOBAL HEALTH CARE INDUSTRIES
The Fund and the Sub-adviser believe that certain market and demographic factors
merit an investor's consideration when making a health care investment.
Worldwide standards of living and life expectancy have increased at a
substantial rate. The Sub-adviser, the investment adviser to the AIM/GT Funds,
expects this growth, which works to the general benefit of the global health
care industry, to continue at a roughly comparable rate in the future, although
no assurances can be given in this regard. Moreover, according to the
Sub-adviser, the health care industry historically has proven to be a relatively
non-cyclical industry that continues to provide goods and services to the public
in periods of economic weakness as well as economic strength.
The Sub-adviser believes that the anticipated increase in the world's elderly
population could increase demand for health care products and services. For
example, according to data compiled by the Sub-adviser, in Japan the number of
people age 65 and older is expected to grow over 100% by the year 2025; in
Germany, France and the U.S., the same age group should grow 40%. Similarly, the
U.S. Census Bureau predicts the number of Americans 85 and older to double in
the next 30 years. From time to time, the Fund and AIM Distributors will quote
information including, but not limited to, international data regarding
populations, birth rates, mortality rates, life expectancy, health care
expenditures, and gross domestic product vs. life expectancy. The information
quoted has not been independently verified by the Fund or AIM Distributors and
will be based on data that is believed to be reliable and accurate.
TELECOMMUNICATIONS FUND
From time to time the Fund and AIM Distributors will quote information including
data regarding:
/ / Increased usage of new technologies such as, but not limited to,
cellular and wireless communications in emerging and established
countries around the world
/ / Supply and demand of telephone equipment and services
/ / Regulatory environment of telecommunications industries
/ / Revenue, price and usage of telecommunications products and services
/ / Privatization and/or deregulation of telecommunications companies
The information quoted has not been independently verified by the Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including the following:
/ / Salomon Brothers World Equity Telecommunications Index, which includes
stock market data about the telecommunications industry in established
and developing markets
/ / OECD and other publications from its subsidiaries such as the
International Telecommunications Union
/ / Morgan Stanley Capital International stock market industry indices such
as Telecommunications, Broadcasting & Publishing and Data Processing &
Reproduction
/ / International Technology Consultants, a Washington D.C. based firm which
publishes reports such as EASTERN EUROPEAN & SOVIET TELECOM REPORT and
LATIN AMERICAN TELECOM REPORT
/ / Telegeography and other publications
DEREGULATION IN THE UNITED STATES
The United States has been the bellwether for deregulation of the telephone
industry. The divestiture of the Bell System from American Telephone and
Telegraph has produced competing companies in the United States. Such U.S.
market-driven competition has, for example, led to lower costs for consumers
which in turn led to greater consumer usage and to higher industrywide revenues.
The Sub-adviser expects this scenario to continue to benefit such companies in
the U.S.
Statement of Additional Information Page 44
<PAGE>
AIM NEW DIMENSION FUND
and similarly to be realized by the established telecommunications companies in
established economies, although no assurances can be made in this regard.
CONSUMER PRODUCTS AND SERVICES FUND
From time to time the Fund and AIM Distributors will quote information including
data regarding:
/ / Trading volume, number of listed companies and the largest companies
located around the world in the consumer products and services
industries
/ / Expenditures, demand and consumption by various countries, regions,
income classes and age groups of consumer products and services
/ / Population of countries, regions and age groups
/ / Life expectancy rates in various regions, countries and age groups
/ / New consumer products and services in the development or manufacturing
stages
/ / Income of various regions, countries and age groups
/ / Sales and sales growth of consumer products and services companies in
their own country and abroad
/ / Sales, supply and demand of consumer products and services
/ / Parent companies and the products and services they distribute
/ / Regulatory environment of consumer products industries
The information quoted will not be independently verified by the Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including, but not limited to, the following:
/ / Consumer and trade groups
/ / Fortune magazine and other periodicals
/ / The World Bank and its publications
/ / The International Monetary Fund (IMF) and its publications
/ / IFC and its publications
/ / OECD and its publications
INFRASTRUCTURE FUND
From time to time the Fund and AIM Distributors may quote information including:
/ / Supply and demand of telephone equipment and services, electricity,
water, transportation, construction materials and other infrastructure
related products and services
/ / Regulatory environment of infrastructure industries
/ / Quantity and costs of current and projected infrastructure projects
/ / Privatization of industries and companies
/ / New technologies, products and services used in infrastructure
industries
/ / Infrastructure Finance Magazine and other periodicals
Statement of Additional Information Page 45
<PAGE>
AIM NEW DIMENSION FUND
FINANCIAL SERVICES FUND
From time to time the Fund and AIM Distributors may quote information including:
/ / Supply and demand of financial services
/ / Regulatory environment of financial service industries
/ / Credit ratings of U.S. and non-U.S. banks
/ / New technologies, products and services used in the financial services
industries
/ / Consolidation in the financial services industries
RESOURCES FUND
From time to time the Fund and AIM Distributors may quote information including:
/ / Supply, demand and prices of natural resources
/ / Regulatory environment of natural resources
/ / Supply, demand and prices of products manufactured from natural
resources
/ / New technologies, products and services used in the natural resources
industries
Statement of Additional Information Page 46
<PAGE>
AIM NEW DIMENSION FUND
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Moody's employs the designations "Prime-1" and "Prime-2" to indicate commercial
paper having the highest capacity for timely repayment. Issuers rated Prime-1
(or supporting institutions) have a superior ability for repayment of senior
short-term debt obligations. Prime-1 repayment ability will often be evidenced
by many of the following characteristics: leading market positions in
well-established industries; high rates of return on funds employed;
conservative capitalization structure with moderate reliance on debt and ample
asset protection; broad margins in earnings coverage of fixed financial charges
and high internal cash generation; and well-established access to a range of
financial markets and assured sources of alternate liquidity. Issuers rated
Prime-2 (or supporting institutions) have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
S&P rates commercial paper in four categories ranging from "A-1" for the highest
quality obligations to "D" for the lowest. A-1 -- This highest category
indicates that the degree of safety regarding timely payment is strong. Those
issues determined to possess extremely strong safety characteristics will be
denoted with a plus sign (+) designation. A-2 -- Capacity for timely payment on
issues with this designation is satisfactory. However, the relative degree of
safety is not as high as for issues designated "A-1." A-3 -- Issues carrying
this designation have adequate capacity for timely payment. They are, however,
more vulnerable to the adverse effects of changes in circumstances than
obligations carrying the higher designations. B -- Issues rated "B" are regarded
as having only speculative capacity for timely payment. C -- This rating is
assigned to short-term debt obligations with a doubtful capacity for payment. D
- -- Debt rated "D" is in payment default. The "D" rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period.
DESCRIPTION OF BOND RATINGS
Moody's rates the long-term debt securities issued by various entities from
"Aaa" to "C." Investment Grade Ratings are the first four categories:
Aaa -- Best quality. These securities carry the smallest degree of
investment risk and are generally referred to as "gilt edged." Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa -- High quality by all standards. Together with the Aaa group they
comprise what are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term
risk appear somewhat larger than the Aaa securities.
A -- Upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa -- Medium-grade obligations (i.e., they are neither highly protected
nor poorly secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba -- Have speculative elements and their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both good and bad
times over the future. Uncertainty of position characterizes bonds in this
class.
B -- Generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other
terms of the contract over any long period of time may be small.
Statement of Additional Information Page 47
<PAGE>
AIM NEW DIMENSION FUND
Caa -- Poor standing. Such issues may be in default or there may be
present elements of danger with respect to principal or interest.
Ca -- Speculative in a high degree. Such issues are often in default or
have other marked shortcomings.
C -- Lowest rated class of bonds. Issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment
standing.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies that
are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa to B in its corporate bond rating system. The modifier 1
indicates that the company ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.
S&P rates the securities debt of various entities in categories ranging from
"AAA" to "D" according to quality. Investment grade ratings are the first four
categories:
AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong.
AA -- Very strong capacity to pay interest and repay principal and
differs from the higher rated issues only in a small degree.
A -- Has a strong capacity to pay interest and repay principal although
it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB -- Regarded as having adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal for debt in
this category than in higher rated categories.
BB, B, CCC, CC, C -- Debt rated "BB," "B," "CCC," "CC," and "C" is
regarded, on balance, as predominantly speculative with respect to capacity
to pay interest and repay principal in accordance with the terms of the
obligation. "BB" indicates the lowest degree of speculation and "C" the
highest degree of speculation. While such debt will likely have some quality
and protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.
BB -- Has less near-term vulnerability to default than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to inadequate
capacity to meet timely interest and principal payments. The "BB" rating
category is also used for debt subordinated to senior debt that is assigned
an actual or implied "BBB-" rating.
B -- Has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied "BB" or "BB-" rating.
CCC -- Has a currently identifiable vulnerability to default, and is
dependent upon favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, it is not likely to
have the capacity to pay interest and repay principal. The "CCC" rating
category is also used for debt subordinated to senior debt that is assigned
an actual or implied "B" or "B-" rating.
Statement of Additional Information Page 48
<PAGE>
AIM NEW DIMENSION FUND
CC -- Typically applied to debt subordinated to senior debt that is
assigned an actual or implied "CCC" rating.
C -- Typically applied to debt subordinated to senior debt that is
assigned an actual or implied "CCC-" debt rating. The "C" rating may be used
to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.
C1 -- Reserved for income bonds on which no interest is being paid.
D -- In payment default. The "D" category is used when interest payments
or principal payments are not made on the date due even if the applicable
grace period has not expired, unless S&P believes that such payments will be
made during such grace period. This rating will also be used upon the filing
of a bankruptcy petition if debt service payments are jeopardized.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of the Fund as of December 31, 1997 and for the
fiscal year then ended appear on the following pages.
Statement of Additional Information Page 49
<PAGE>
GT GLOBAL NEW DIMENSION FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders of GT Global New Dimension Fund and
Board of Trustees of GT Global Series Trust:
We have audited the accompanying statement of assets and liabilities of GT
Global New Dimension Fund (the "Fund"), including the portfolio of investments,
as of December 31, 1997, the related statement of operations, the statement of
changes in net assets, and the financial highlights for the period from
September 15, 1997 (commencement of operations) to December 31, 1997. These
financial statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global New Dimension Fund as of December 31, 1997, the results of its
operations, the changes in its net assets, and the financial highlights for the
period from September 15, 1997 (commencement of operations) to December 31,
1997, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 17, 1998
F1
<PAGE>
GT GLOBAL NEW DIMENSION FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADVISOR
CLASS VALUE % OF NET
GT GLOBAL THEME FUNDS SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
GT Global Consumer Products and Services Fund ............. 515,881 $ 11,204,937 31.5
GT Global Financial Services Fund ......................... 426,322 7,499,007 21.1
GT Global Infrastructure Fund ............................. 388,281 5,886,334 16.6
GT Global Natural Resources Fund .......................... 240,790 4,054,907 11.4
GT Global Health Care Fund ................................ 162,161 3,278,897 9.2
GT Global Telecommunications Fund ......................... 185,442 3,089,470 8.7
------------ -----
TOTAL THEME FUND INVESTMENTS (cost $37,807,948) ............. 35,013,552 98.5
------------ -----
<CAPTION>
REPURCHASE AGREEMENT
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Dated December 31, 1997, with State Street Bank & Trust
Co., due January 2, 1998, for an effective yield of 5.80%,
collateralized by $445,000 U.S. Treasury Notes, 5.75% due
12/31/98 (market value of collateral is $445,417,
including accrued interest). (cost $432,000) ............ 432,000 1.2
------------ -----
TOTAL INVESTMENTS (cost $38,239,948) * ..................... 35,445,552 99.7
Other Assets and Liabilities ................................ 123,462 0.3
------------ -----
NET ASSETS .................................................. $ 35,569,014 100.0
------------ -----
------------ -----
</TABLE>
- --------------
* For Federal income tax purposes, cost is $38,277,690 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ --
Unrealized depreciation: (2,832,138)
-------------
Net unrealized depreciation: $ (2,832,138)
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL NEW DIMENSION FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments at value (cost $38,239,948) (Note 1).................................................. $35,445,552
U.S. currency..................................................................................... 113
Receivable for Fund shares sold................................................................... 929,466
Interest receivable............................................................................... 70
----------
Total assets.................................................................................... 36,375,201
----------
Liabilities:
Payable for investments purchased................................................................. 432,113
Payable for Fund shares repurchased............................................................... 352,532
Payable for service and distribution expenses (Note 2)............................................ 21,542
----------
Total liabilities............................................................................... 806,187
----------
Net assets.......................................................................................... $35,569,014
----------
----------
Class A:
Net asset value and redemption price per share ($15,144,662 DIVIDED BY 1,424,148 shares
outstanding)....................................................................................... $ 10.63
----------
----------
Maximum offering price per share (100/95.25 of $10.63) *............................................ $ 11.16
----------
----------
Class B:+
Net asset value and offering price per share ($19,183,648 DIVIDED BY 1,805,781 shares
outstanding)....................................................................................... $ 10.62
----------
----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($1,240,704 DIVIDED BY
116,587 shares outstanding)........................................................................ $ 10.64
----------
----------
Net assets consist of:
Paid in capital (Note 4).......................................................................... $37,829,140
Undistributed net investment income............................................................... 28,710
Accumulated net undistributed gain................................................................ 505,560
Net unrealized depreciation of investments........................................................ (2,794,396)
----------
Total -- representing net assets applicable to capital shares outstanding........................... $35,569,014
----------
----------
<FN>
- --------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL NEW DIMENSION FUND
STATEMENT OF OPERATIONS
September 15, 1997 (commencement of operations) to December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income............................................................................ $ 8,216
----------
Total investment income.................................................................. 8,216
----------
Expenses:
Service and distribution expenses: (Note 2)
Class A...................................................................... $ 11,800
Class B...................................................................... 27,856
----------
Total expenses............................................................................. 39,656
----------
Net investment loss.......................................................................... (31,440)
----------
Net realized and unrealized gain (loss) on investments: (Note 1)
Net realized loss on investments............................................... (37,742)
Capital gain distributions received............................................ 2,021,395
----------
Net realized gain during the period...................................................... 1,983,653
Net change in unrealized depreciation during the period.................................. (2,794,396)
----------
Net realized and unrealized loss on investments.............................................. (810,743)
----------
Net decrease in net assets resulting from operations......................................... $ (842,183)
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL NEW DIMENSION FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPTEMBER 15,
1997
(COMMENCEMENT
OF OPERATIONS)
TO
DECEMBER 31,
1997
--------------
<S> <C>
Increase in net assets
Operations:
Net investment loss..................................................................... $ (31,440)
Net realized gain on investments........................................................ 1,983,653
Net change in unrealized depreciation of investments.................................... (2,794,396)
--------------
Net decrease in net assets resulting from operations.................................. (842,183)
--------------
Class A:
Distributions to shareholders: (Note 1)
In excess of net investment income...................................................... (583,714)
Class B:
Distributions to shareholders: (Note 1)
In excess of net investment income...................................................... (781,183)
Advisor Class:
Distributions to shareholders: (Note 1)
In excess of net investment income...................................................... (53,046)
--------------
Total distributions................................................................... (1,417,943)
--------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested........................................ 41,029,628
Decrease from capital shares repurchased................................................ (3,300,488)
--------------
Net increase from capital share transactions.......................................... 37,729,140
--------------
Total increase in net assets.............................................................. 35,469,014
Net assets:
Beginning of period..................................................................... 100,000
--------------
End of period *......................................................................... $ 35,569,014
--------------
--------------
* Includes undistributed net investment income of........................................ $ 28,710
--------------
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL NEW DIMENSION FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements and market price
data for the shares.
<TABLE>
<CAPTION>
SEPTEMBER 15, 1997
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
--------------------------------------------
ADVISOR
CLASS A (D) CLASS B (D) CLASS (D)
------------ ------------ --------------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period.... $ 11.43 $ 11.43 $11.43
------------ ------------ --------------
Income from investment operations:
Net investment income (loss).......... (0.01) (0.02) 0.01
Net realized and unrealized loss on
investments.......................... (0.31) (0.32) (0.31)
------------ ------------ --------------
Net decrease from investment
operations......................... (0.32) (0.34) (0.30)
------------ ------------ --------------
Distributions to shareholders:
In excess of net investment income.... (0.48) (0.47) (0.49)
------------ ------------ --------------
Total distributions................. (0.48) (0.47) (0.49)
------------ ------------ --------------
Net asset value, end of period.......... $ 10.63 $ 10.62 $10.64
------------ ------------ --------------
------------ ------------ --------------
Total investment return (c)............. (2.68)% (b) (2.83)% (b) (2.51)% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's).... $15,145 $19,184 $1,241
Ratio of net investment income (loss) to
average net assets..................... (0.35)% (a) (0.85)% (a) 0.15% (a)
Ratio of expenses to average net assets
(Notes 1 & 5).......................... 0.50% (a) 1.00% (a) 0.00% (a)
Portfolio turnover rate+................ 1% (b) 1% (b) 1% (b)
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the period.
+ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL NEW DIMENSION FUND
NOTES TO
FINANCIAL STATEMENTS
December 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global New Dimension Fund ("Fund") is a diversified series of GT Global
Series Trust (the "Trust"). The Trust is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), as an open-end management investment company. The Fund invests
substantially all of its assets in Advisor Class shares of the GT Global theme
mutual funds: GT Global Consumer Products and Services Fund; GT Global Financial
Services Fund; GT Global Health Care Fund; GT Global Infrastructure Fund; GT
Global Natural Resources Fund; and GT Global Telecommunications Fund
(collectively, the "Underlying Theme Funds").
The Fund offers Class A, Class B and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses of the Fund are
allocated on a pro rata basis to each Class based on the relative net assets of
each Class to the total net assets of the Fund. Each Class of shares differs in
its respective service and distribution expenses. Beginning January 1, 1998, the
Fund will also offer Class C shares.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
Investments in the Underlying Funds are valued at the closing net asset value
per Advisor Class share of each Underlying Fund on the day of valuation.
Short-term investments with a maturity of 60 days or less are valued at
amortized cost.
(B) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.
(C) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains.
(D) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund and timing differences.
(E) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised and/ or
administered by the Manager, has a line of credit with BankBoston and State
Street Bank & Trust Company. The arrangements with the banks allow the Fund and
the GT Funds to borrow an aggregate maximum amount of $250,000,000. The Fund is
limited to borrowing up to 33 1/3% of the value of the Fund's total assets. For
the period ended December 31, 1997, the Fund had no outstanding loan balance.
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Fund's investment manager and
administrator. The Manager is also the pricing and accounting agent for the
Fund. The Manager will initially assume all costs of the Fund's operation,
except for service and distribution fees as described below and non-recurring
and extraordinary expenses. The Fund, as a shareholder in the Underlying Theme
Funds, indirectly will bear its proportionate share of any investment management
fees and other expenses paid by the Underlying Theme Funds. Subject to receipt
of a pending exemptive order from the Securities and Exchange Commission, the
Trust, on behalf of the Fund, will enter into a Special Servicing Agreement
("Agreement") with the Underlying Theme Funds, the Manager and GT Global
Investor Services, Inc., the transfer agent. If the Board of Trustees of the
Underlying Theme Funds makes certain findings, each Underlying Theme Fund will
pay certain nondistribution-related expenses of the Fund to the extent such
expenses are less than the estimated savings to the Underlying Theme Funds from
the operation of the Fund. The Manager and GT Global also voluntarily have
undertaken to limit the Underlying Theme Fund's expenses (exclusive of brokerage
commissions, taxes, interest, and extraordinary expenses) to the maximum annual
rate of 1.50% of the average daily net assets of the Underlying Theme Fund's
Advisor Class shares.
F7
<PAGE>
GT GLOBAL NEW DIMENSION FUND
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Fund's
distributor. The Fund offers Class A, Class B and Advisor Class shares for
purchase and will offer Class C shares for purchase beginning January 1, 1998.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period from September 15, 1997 (commencement of
operations) to December 31, 1997, GT Global retained $6,174 of such sales
charges. Purchases of Class A shares exceeding $500,000 may be subject to a
contingent deferred sales charge ("CDSC") upon redemption, in accordance with
the Fund's current prospectus. GT Global collected no CDSCs for the period from
September 15, 1997 (commencement of operations) to December 31, 1997. GT Global
also makes ongoing shareholder servicing and trail commission payments to
dealers whose clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the period from September 15, 1997 (commencement of operations)
to December 31, 1997, GT Global collected CDSCs in the amount of $1,902. In
addition, GT Global makes ongoing shareholder servicing and trail commission
payments to dealers whose clients hold Class B shares.
Class C shares will not be subject to initial sales charges. However, certain
redemptions of Class C shares made within one year of purchase will be subject
to CDSCs. In addition, GT Global will make ongoing shareholder servicing and
trail commission payments to dealers whose clients hold Class C shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Trust's Board of Trustees has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect. Class C shares will also be subject to a separate
distribution plan adopted by the Trust's Board of Trustees pursuant to Rule
12b-1 under the 1940 Act.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services is also reimbursed for
its out-of-pocket expenses for such items as postage, forms, telephone charges,
stationery and office supplies.
The Trust pays each of its Trustees who is not an employee, officer or director
of the Manager, GT Global or GT Services $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES
For the period from September 15, 1997 (commencement of operations) to December
31, 1997, purchases and sales, other than short-term investments, of the
Underlying Theme Funds by the Fund, are as follows:
<TABLE>
<CAPTION>
GT GLOBAL PURCHASES SALES
- -------------------------------------------------------------------------------- --------------- ----------
<S> <C> <C>
Consumer Products and Services Fund............................................. $ 11,777,579 $ 80,882
Telecommunications Fund......................................................... 3,462,408 23,798
Financial Services Fund......................................................... 7,690,319 53,175
Natural Resources Fund.......................................................... 4,847,276 32,530
Health Care Fund................................................................ 4,192,022 26,247
Infrastructure Fund............................................................. 6,136,745 44,025
</TABLE>
F8
<PAGE>
GT GLOBAL NEW DIMENSION FUND
4. CAPITAL SHARES
At December 31, 1997, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
SEPTEMBER 15, 1997
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
-----------------------------------
CLASS A SHARES AMOUNT
- ---------------------------------------- --------------- ------------------
<S> <C> <C>
Shares sold............................. 1,560,835 $ 17,768,084
Shares issued in connection with
reinvestment of distributions......... 54,891 563,181
--------------- ------------------
1,615,726 18,331,265
Shares repurchased...................... (194,494) (2,190,806)
--------------- ------------------
Net increase............................ 1,421,232 $ 16,140,459
--------------- ------------------
--------------- ------------------
<CAPTION>
SEPTEMBER 15, 1997
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
-----------------------------------
CLASS B SHARES AMOUNT
- ---------------------------------------- --------------- ------------------
<S> <C> <C>
Shares sold............................. 1,832,668 $ 20,681,472
Shares issued in connection with
reinvestment of distributions......... 67,039 687,825
--------------- ------------------
1,899,707 21,369,297
Shares repurchased...................... (96,841) (1,061,266)
--------------- ------------------
Net increase............................ 1,802,866 $ 20,308,031
--------------- ------------------
--------------- ------------------
<CAPTION>
SEPTEMBER 15, 1997
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
-----------------------------------
ADVISOR CLASS SHARES AMOUNT
- ---------------------------------------- --------------- ------------------
<S> <C> <C>
Shares sold............................. 113,102 $ 1,276,664
Shares issued in connection with
reinvestment of distributions......... 5,102 52,402
--------------- ------------------
118,204 1,329,066
Shares repurchased...................... (4,533) (48,416)
--------------- ------------------
Net increase............................ 113,671 $ 1,280,650
--------------- ------------------
--------------- ------------------
</TABLE>
5. SUBSEQUENT EVENT
On January 30, 1998, Liechtenstein Global Trust ("LGT") and AMVESCAP PLC
("AMVESCAP") entered into an agreement by which AMVESCAP will acquire LGT's
Asset Management Division, including Chancellor LGT Asset Management, Inc.
AMVESCAP is the holding company of the AIM and INVESCO asset management
businesses.
F9
<PAGE>
GT GLOBAL NEW DIMENSION FUND
NOTES
- --------------------------------------------------------------------------------
<PAGE>
AIM NEW DIMENSION FUND
AIM/GT FUNDS
AIM DISTRIBUTORS OFFERS A BROAD RANGE OF FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE FUNDS LISTED
BELOW, INCLUDING FEES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING MARKET
INVESTING AND THE RISKS OF INVESTING IN RELATED INDUSTRIES, PLEASE CONTACT
YOUR FINANCIAL ADVISER OR CALL 1-800-824-1580.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
AIM NEW DIMENSION FUND
Captures global growth opportunities by investing directly in the six global
theme funds
AIM WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
AIM INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.
AIM EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
AIM DEVELOPING MARKETS FUND
Invests in debt and equity securities of developing market issuers
/ / GLOBAL THEME FUNDS
AIM GLOBAL CONSUMER PRODUCTS AND
SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
AIM GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
AIM GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
AIM GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
AIM GLOBAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
AIM GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
AIM NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
AIM EUROPE GROWTH FUND
Focuses on investment opportunities in Europe
AIM LATIN AMERICAN GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
AIM SMALL CAP EQUITY FUND
Invests in equity securities of small U.S. companies
AIM MID CAP GROWTH FUND
Concentrates on medium-sized companies in the U.S.
AIM AMERICA VALUE FUND
Concentrates on equity securities of large cap U.S. companies believed to be
undervalued
AIM JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUND
AIM GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
INCOME FUNDS
AIM GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
AIM STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
AIM GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
AIM FLOATING RATE FUND
Invests primarily in senior secured floating rate loans that have the potential
to achieve a high level of current income
MONEY MARKET FUND
AIM DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
[LOGO]
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
STATEMENT OF ADDITIONAL INFORMATION AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY AIM
SERIES TRUST, AIM NEW DIMENSION FUND, A I M ADVISORS, INC., INVESCO (NY),
INC. OR A I M DISTRIBUTORS, INC. THIS STATEMENT OF ADDITIONAL INFORMATION
DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF ANY OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
DIMSA709.GT
<PAGE>
AIM NEW DIMENSION FUND:
ADVISOR CLASS
50 California Street, 27th Floor
San Francisco, California 94111
(415) 392-6181
Toll Free: [(800) 824-1580]
Statement of Additional Information
June 1, 1998
- --------------------------------------------------------------------------------
This Statement of Additional Information relates to the Advisor Class shares of
AIM New Dimension Fund (the "Fund"), a diversified series of AIM Series Trust
(the "Trust"), an open-end management investment company organized as a Delaware
business trust. The Fund seeks its investment objective by investing
substantially all of its assets in shares of the AIM theme funds: AIM Global
Consumer Products and Services Fund; AIM Global Financial Services Fund; AIM
Global Health Care Fund; AIM Global Infrastructure Fund; AIM Global Resources
Fund; and AIM Global Telecommunications Fund (collectively, the "Underlying
Theme Funds").
A I M Advisors, Inc. ("AIM") serves as the investment manager of and
administrator for, and INVESCO (NY), Inc. (the "Sub-adviser") serves as the
sub-adviser of and sub-administrator for, the Fund. The distributor of the
Fund's shares is A I M Distributors, Inc. ("AIM Distributors"). The Fund's
transfer agent is GT Global Investor Services, Inc. ("GT Services" or the
"Transfer Agent").
This Statement of Additional Information, which is not a prospectus, supplements
and should be read in conjunction with the Fund's current Advisor Class
Prospectus dated June 1, 1998, a copy of which is available without charge by
writing to the above address or calling the Fund at the toll-free telephone
number printed above.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Investment Objective and Policies........................................................................................ 2
Options, Futures and Currency Strategies................................................................................. 6
Risk Factors of the Underlying Theme Funds............................................................................... 15
Investment Limitations................................................................................................... 21
Execution of Portfolio Transactions...................................................................................... 26
Trustees and Executive Officers.......................................................................................... 28
Management............................................................................................................... 30
Valuation of Fund Shares................................................................................................. 30
Information Relating to Sales and Redemptions............................................................................ 30
Taxes.................................................................................................................... 32
Additional Information................................................................................................... 34
Investment Results....................................................................................................... 36
Description of Debt Ratings.............................................................................................. 43
Financial Statements..................................................................................................... 45
</TABLE>
[LOGO]
Statement of Additional Information Page 1
<PAGE>
AIM NEW DIMENSION FUND
INVESTMENT OBJECTIVE AND
POLICIES
- --------------------------------------------------------------------------------
INVESTMENT POLICIES OF THE FUND
The following supplements the information contained in the Prospectus concerning
the investment policies of the Fund.
U.S. GOVERNMENT SECURITIES. The Fund may invest in various direct obligations of
the U.S. Treasury and obligations issued or guaranteed by the U.S. government or
one of its agencies or instrumentalities (collectively, "U.S. government
securities"). Among the U.S. government securities that may be held by the Fund
are securities that are supported by the full faith and credit of the United
States; securities that are supported by the right of the issuer to borrow from
the U.S. Treasury; and securities that are supported solely by the credit of the
instrumentality.
REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements. A
repurchase agreement is a transaction in which the Fund purchases securities
from a bank or recognized securities dealer and simultaneously commits to resell
the securities to the bank or dealer on an agreed-upon date or upon demand and
at a price reflecting a market rate of interest unrelated to the coupon rate or
maturity of the purchased securities. The Fund maintains custody of the
underlying securities prior to their repurchase; thus, the obligation of the
bank or dealer to pay the repurchase price on the date agreed to is, in effect,
secured by such securities. If the value of these securities is less than the
repurchase price, plus any agreed-upon additional amount, the other party to the
agreement must provide additional collateral so that at all times the collateral
is at least equal to the repurchase price, plus any agreed-upon additional
amount. The difference between the total amount to be received upon repurchase
of the securities and the price that was paid by the Fund upon acquisition is
accrued as interest and included in its net investment income. Repurchase
agreements carry certain risks not associated with direct investments in
securities, including possible declines in the market value of the underlying
securities and delays and costs to the Fund if the other party to a repurchase
agreement becomes insolvent.
INVESTMENT POLICIES OF THE UNDERLYING THEME FUNDS
The following supplements the information contained in the Prospectus concerning
the investment policies and limitations of the Underlying Theme Funds. More
information about the investment policies and restrictions and the investment
limitations of each Underlying Theme Fund is set forth in the Underlying Theme
Funds' prospectus and statement of additional information.
The Underlying Theme Funds are diversified series of AIM Investment Funds, Inc.
(the "Company"), a registered open-end management investment company. The AIM
Global Consumer Products and Services Fund ("Consumer Products and Services
Fund"), AIM Global Financial Services Fund ("Financial Services Fund"), AIM
Global Infrastructure Fund ("Infrastructure Fund"), and AIM Global Resources
Fund ("Resources Fund") (each, a "Feeder Fund," and, collectively, the "Feeder
Funds") each invests all of its assets in the Global Consumer Products and
Services Portfolio, Global Financial Services Portfolio, Global Infrastructure
Portfolio and Global Resources Portfolio (each, a "Portfolio," and,
collectively, the "Portfolios"), respectively.
Each Portfolio is a subtrust (a "series") of Global Investment Portfolio (an
open-end management investment company) with an investment objective that is
identical to that of its corresponding Underlying Theme Fund. Whenever the
phrase "all of the Underlying Theme Fund's investable assets" is used herein, it
means that the only investment securities held by a Feeder Fund will be its
interest in its corresponding Portfolio. A Feeder Fund may withdraw its
investment in its corresponding Portfolio at any time, if the Company's Board of
Trustees determines that it is in the best interests of the Feeder Fund and its
shareholders to do so. Upon any such withdrawal, a Feeder Fund's assets would be
invested in accordance with the investment policies of its corresponding
Portfolio described below and in the Underlying Theme Funds' prospectus.
The investment objective of each Feeder Fund is long-term capital growth. The
investment objectives of the AIM Global Health Care Fund ("Health Care Fund")
and the AIM Global Telecommunications Fund ("Telecommunications Fund") are
long-term capital appreciation and long-term capital growth, respectively. The
Portfolios and the Health Care Fund and the Telecommunications Fund, together,
are referred to herein as the "Underlying Theme Portfolios."
Statement of Additional Information Page 2
<PAGE>
AIM NEW DIMENSION FUND
SELECTION OF EQUITY INVESTMENTS. With respect to the Global Resources Portfolio,
the Sub-adviser has identified four areas that it expects will create investment
opportunities: (i) improving supply/demand fundamentals, which may result in
higher commodity prices; (ii) privatization of state-owned natural resource
businesses; (iii) management which can improve production efficiencies without
correspondingly increasing commodity prices; and (iv) service companies with
emerging technologies that can enhance productivity or reduce production costs.
Of course, there is no certainty that these factors will produce the anticipated
results.
With respect to the Telecommunications Fund, the Sub-adviser has identified four
areas that it expects will create investment opportunities: (i) deregulation of
companies in the industry, which will allow competition to promote greater
efficiencies; (ii) privatization of state-owned telecommunications businesses;
(iii) development of infrastructure in underdeveloped countries and upgrading of
services in other countries; and (iv) emerging technologies that will enhance
productivity and reduce costs in the telecommunications industry. Of course,
there is no certainty that these factors will produce the anticipated results.
There may be times when, in the opinion of the Sub-adviser, prevailing market,
economic or political conditions warrant reducing the proportion of the
Underlying Theme Portfolios' assets invested in equity securities and increasing
the proportion held in cash (U.S. dollars, foreign currencies or multinational
currency units) or invested in debt securities or high quality money market
instruments issued by corporations, or the United States, or a foreign
government. A portion of each Underlying Theme Portfolio's assets normally will
be held in cash (U.S. dollars, foreign currencies or multinational currency
units) or invested in foreign or domestic high quality money market instruments
pending investment of proceeds from new sales of Underlying Theme Fund shares,
to provide for ongoing expenses and to satisfy redemptions.
For each Underlying Theme Portfolio's investment purposes, an issuer is
typically considered as located in a particular country if it (a) is organized
under the laws of or has its principal office in a particular country, or (b)
normally derives 50% or more of its total revenues from business in that
country, provided that, in the Sub-adviser's view, the value of such issuer's
securities will tend to reflect such country's development to a greater extent
than developments elsewhere. However, these are not absolute requirements, and
certain companies incorporated in a particular country and considered by the
Sub-adviser to be located in that country may have substantial foreign
operations or subsidiaries and/or export sales exceeding in size the assets or
sales in that country.
In certain countries, governmental restrictions and other limitations on
investment may affect an Underlying Theme Portfolio's ability to invest in such
countries. In addition, in some instances only special classes of securities may
be purchased by foreigners and the market prices, liquidity and rights with
respect to those securities may vary from shares owned by nationals. The
Sub-adviser is not aware at this time of the existence of any investment or
exchange control regulations which might substantially impair the operations of
the Underlying Theme Portfolios as described in the Underlying Theme Funds'
prospectus and statement of additional information. Restrictions may in the
future, however, make it undesirable to invest in certain countries. None of the
Underlying Theme Portfolios has a present intention of making any significant
investment in any country or stock market in which the Sub-adviser considers the
political or economic situation to threaten an Underlying Theme Portfolio with
substantial or total loss of its investment in such country or market.
INVESTMENTS IN OTHER INVESTMENT COMPANIES. Each Underlying Theme Portfolio may
invest in the securities of investment companies within the limitations of the
Investment Company Act of 1940, as amended (the "1940 Act"). These limitations
currently provide that, in general, an Underlying Theme Portfolio may purchase
shares of an investment company unless (a) such a purchase would cause an
Underlying Theme Portfolio to own in the aggregate more than 3% of the total
outstanding voting stock of the investment company or (b) such a purchase would
cause the Underlying Theme Portfolio to have more than 5% of its assets invested
in the investment company or more than 10% of its assets invested in an
aggregate of all such investment companies. The foregoing restrictions do not
apply to the investment of the Feeder Funds in their corresponding Portfolios.
Investment in closed-end investment companies may involve the payment of
substantial premiums above the value of such companies' portfolio securities.
Each Underlying Theme Portfolio does not intend to invest in such investment
companies unless, in the judgment of the Sub-adviser, the potential benefits of
such investments justify the payment of any applicable premiums. The return on
such securities will be reduced by operating expenses of such companies,
including payments to the investment managers of those investment companies.
DEPOSITORY RECEIPTS. An Underlying Theme Portfolio may hold securities of
foreign issuers in the form of American Depository Receipts ("ADRs"), American
Depository Shares ("ADSs") and European Depository Receipts ("EDRs") or other
securities convertible into securities of eligible foreign issuers. These
securities may not necessarily be denominated in the same currency as the
securities for which they may be exchanged. ADRs and ADSs are typically issued
by an American bank or trust company and evidence ownership of underlying
securities issued by a foreign corporation. EDRs,
Statement of Additional Information Page 3
<PAGE>
AIM NEW DIMENSION FUND
which are sometimes referred to as Continental Depository Receipts ("CDRs"), are
issued in Europe typically by foreign banks and trust companies and evidence
ownership of either foreign or domestic securities. Generally, ADRs and ADSs in
registered form are designed for use in U.S. securities markets and EDRs in
bearer form are designed for use in European securities markets. For purposes of
each Underlying Theme Portfolio's investment policies, an Underlying Theme
Portfolio's investments in ADRs, ADSs and EDRs will be deemed to be investments
in the equity securities representing securities of foreign issuers into which
they may be converted.
ADR facilities may be established as either "unsponsored" or "sponsored." While
ADRs issued under these two types of facilities are in some respects similar,
there are distinctions between them relating to the rights and obligations of
ADR holders and the practices of market participants. A depository may establish
an unsponsored facility without participation by (or even necessarily the
acquiescence of) the issuer of the deposited securities, although typically the
depository requests a letter of non-objection from such issuer prior to the
establishment of the facility. Holders of unsponsored ADRs generally bear all
the costs of such facilities. The depository usually charges fees upon the
deposit and withdrawal of the deposited securities, the conversion of dividends
into U.S. dollars, the disposition of non-cash distributions, and the
performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass-through voting
rights to ADR holders in respect of the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depository. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain other costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other information to
the ADR holders at the request of the issuer of the deposited securities. The
Underlying Theme Portfolios may invest in both sponsored and unsponsored ADRs.
WARRANTS OR RIGHTS. Warrants or rights may be acquired by an Underlying Theme
Portfolio in connection with other securities or separately and provide the
Underlying Theme Portfolio with the right to purchase at a later date other
securities of the issuer.
LENDING OF UNDERLYING THEME PORTFOLIO SECURITIES. For the purpose of realizing
additional income, each Underlying Theme Portfolio may make secured loans of its
securities holdings amounting to not more than 30% of its total assets.
Securities loans are made to broker/dealers or institutional investors pursuant
to agreements requiring that the loans be continuously secured by collateral at
least equal at all times to the value of the securities lent plus any accrued
interest, "marked to market" on a daily basis. The Underlying Theme Portfolios
may pay reasonable administrative and custodial fees in connection with the loan
of their securities. While the securities loan is outstanding, an Underlying
Theme Portfolio will continue to receive the equivalent of the interest or
dividends paid by the issuer on the securities, as well as interest on the
investment of the collateral or a fee from the borrower. An Underlying Theme
Portfolio will have a right to call each loan and obtain the securities within
the stated settlement period. An Underlying Theme Portfolio will not have the
right to vote equity securities while they are being lent, but it may call in a
loan in anticipation of any important vote. Loans will only be made to firms
deemed by the Sub-adviser to be of good standing and will not be made unless, in
the judgment of the Sub-adviser, the consideration to be earned from such loans
would justify the risk. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delays in receiving additional
collateral or in recovery of the securities and possible loss of rights in the
collateral should the borrower fail financially.
COMMERCIAL BANK OBLIGATIONS. For the purposes of each Underlying Theme
Portfolio's investment policies with respect to bank obligations, obligations of
foreign branches of U.S. banks and of foreign banks are obligations of the
issuing bank and may be general obligations of the parent bank. Such obligations
may, however, be limited by the terms of a specific obligation and by government
regulation. As with investments in non-U.S. securities in general, investments
in the obligations of foreign branches of U.S. banks and of foreign banks may
subject each Underlying Theme Portfolio to investment risks that are different
in some respects from those of investments in obligations of U.S. issuers.
Although each Underlying Theme Portfolio will typically acquire obligations
issued and supported by the credit of U.S. or foreign banks having total assets
at the time of purchase of $1 billion or more, this $1 billion figure is not an
investment policy or restriction of each Underlying Theme Portfolio. For the
purposes of calculation with respect to the $1 billion figure, the assets of a
bank will be deemed to include the assets of its U.S. and non-U.S. branches.
REPURCHASE AGREEMENTS. A repurchase agreement is a transaction in which an
Underlying Theme Portfolio purchases securities from a bank or recognized
securities dealer and simultaneously commits to resell the securities to the
bank or
Statement of Additional Information Page 4
<PAGE>
AIM NEW DIMENSION FUND
dealer on an agreed-upon date or upon demand and at a price reflecting a market
rate of interest unrelated to the coupon rate or maturity of the purchased
securities. Although repurchase agreements carry certain risks not associated
with direct investments in securities, including possible decline in the market
value of the underlying securities and delays and costs to the Underlying Theme
Portfolio if the other party to the repurchase agreement becomes bankrupt, the
Underlying Theme Portfolios intend to enter into repurchase agreements only with
banks and dealers believed by the Sub-adviser to present minimal credit risks in
accordance with guidelines established by the Company's or Global Investment
Portfolio's Board of Trustees (each a "Board" and, collectively, the "Boards"),
as applicable. The Sub-adviser will review and monitor the creditworthiness of
such institutions under the applicable Board's general supervision.
Each Underlying Theme Portfolio will invest only in repurchase agreements
collateralized at all times in an amount at least equal to the repurchase price
plus accrued interest. To the extent that the proceeds from any sale of such
collateral upon a default in the obligation to repurchase were less than the
repurchase price, an Underlying Theme Portfolio would suffer a loss. If the
financial institution that is party to the repurchase agreement petitions for
bankruptcy or otherwise becomes subject to bankruptcy or other liquidation
proceedings, there may be restrictions on an Underlying Theme Portfolio's
ability to sell the collateral and it could suffer a loss. However, with respect
to financial institutions whose bankruptcy or liquidation proceedings are
subject to the U.S. Bankruptcy Code, each Underlying Theme Portfolio intends to
comply with provisions under such code that would allow the immediate resale of
such collateral. Each Underlying Theme Portfolio will not enter into a
repurchase agreement with a maturity of more than seven days if, as a result,
more than 15% of the value of its net assets (except for the Health Care Fund,
more than 10% of the value of its total assets) would be invested in such
repurchase agreements and other illiquid investments.
BORROWING, REVERSE REPURCHASE AGREEMENTS AND "ROLL" TRANSACTIONS. Each
Underlying Theme Portfolio's borrowings will not exceed 33 1/3% of its total
assets, i.e., the Underlying Theme Portfolio's total assets at all times will
equal at least 300% of the amount of outstanding borrowings. If market
fluctuations in the value of an Underlying Theme Portfolio's securities holdings
or other factors cause the ratio of its total assets to outstanding borrowings
to fall below 300%, within three days (excluding Sundays and holidays) of such
event that Underlying Theme Portfolio may be required to sell portfolio
securities to restore the 300% asset coverage, even though from an investment
standpoint such sales might be disadvantageous. Each Underlying Theme Portfolio
may also borrow up to 5% of its total assets for temporary or emergency purposes
other than to meet redemptions. Any borrowing by an Underlying Theme Portfolio
may cause greater fluctuation in the value of its shares than would be the case
if it did not borrow.
Each Underlying Theme Portfolio's fundamental investment limitations permit it
to borrow money for leveraging purposes. However, each Underlying Theme
Portfolio (except the Health Care Fund) is currently prohibited, pursuant to a
non-fundamental investment policy, from borrowing money in order to purchase
securities. Nevertheless, this policy may be changed in the future by the
applicable Board. If an Underlying Theme Portfolio employs leverage in the
future, it would be subject to certain additional risks. Use of leverage creates
an opportunity for greater growth of capital but would exaggerate any increases
or decreases in the net asset value of a Feeder Fund or an Underlying Theme
Portfolio. When the income and gains on securities purchased with the proceeds
of borrowings exceed the costs of such borrowings, an Underlying Theme
Portfolio's earnings or a Feeder Fund's net asset value will increase faster
than otherwise would be the case; conversely, if such income and gains fail to
exceed such costs, an Underlying Theme Portfolio's earnings or a Feeder Fund's
net asset value would decline faster than would otherwise be the case.
Each Underlying Theme Portfolio may enter into reverse repurchase agreements. A
reverse repurchase agreement is a borrowing transaction in which the Underlying
Theme Portfolio transfers possession of securities to another party, such as a
bank or broker/dealer, in return for cash, and agrees to repurchase the
securities in the future at an agreed upon price, which includes an interest
component. Each Underlying Theme Portfolio may also engage in "roll" borrowing
transactions, which involve the sale of Government National Mortgage Association
certificates or other securities together with a commitment (for which the
Underlying Theme Portfolio may receive a fee) to purchase similar, but not
identical, securities at a future date. Each Underlying Theme Portfolio will
segregate with a custodian, cash or liquid securities in an amount sufficient to
cover its obligations under "roll" transactions and reverse repurchase
agreements with broker/ dealers. No segregation is required for reverse
repurchase agreements with banks.
SHORT SALES. Each Underlying Theme Portfolio may make short sales of securities.
A short sale is a transaction in which an Underlying Theme Portfolio sells a
security in anticipation that the market price of that security will decline. An
Underlying Theme Portfolio may make short sales (i) as a form of hedging to
offset potential declines in long positions in securities it owns, or
anticipates acquiring, or in similar securities, and (ii) in order to maintain
flexibility in its securities holdings.
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When an Underlying Theme Portfolio makes a short sale of a security it does not
own, it must borrow the security sold short and deliver it to the broker/dealer
or other intermediary through which it made the short sale. The Underlying Theme
Portfolio may have to pay a fee to borrow particular securities and will often
be obligated to pay over any payments received on such borrowed securities.
An Underlying Theme Portfolio's obligation to replace the borrowed security when
the borrowing is called or expires will be secured by collateral deposited with
the intermediary. The Underlying Theme Portfolio will also be required to
deposit collateral with its custodian to the extent, if any, necessary so that
the value of both collateral deposits in the aggregate is at all times equal to
at least 100% of the current market value of the security sold short. Depending
on arrangements made with the intermediary from which it borrowed the security
regarding payment of any amounts received by it on such security, an Underlying
Theme Portfolio may not receive any payments (including interest) on its
collateral deposited with such intermediary.
If the price of the security sold short increases between the time of the short
sale and the time an Underlying Theme Portfolio replaces the borrowed security,
it will incur a loss; conversely, if the price declines, the Underlying Theme
Portfolio will realize a gain. Any gain will be decreased, and any loss
increased, by the transaction costs associated with the transaction. Although an
Underlying Theme Portfolio's gain is limited by the price at which it sold the
security short, its potential loss theoretically is unlimited.
No Underlying Theme Portfolio will make a short sale if, after giving effect to
the sale, the market value of the securities sold short exceeds 25% of the value
of its total assets or its aggregate short sales of the securities of any one
issuer exceed the lesser of 2% of its net assets or 2% of the securities of any
class of the issuer. Moreover, an Underlying Theme Portfolio may engage in short
sales only with respect to securities listed on a national securities exchange.
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OPTIONS, FUTURES AND CURRENCY
STRATEGIES
- --------------------------------------------------------------------------------
SPECIAL RISKS OF OPTIONS, FUTURES AND CURRENCY STRATEGIES
The use by the Underlying Theme Portfolios of options, futures contracts and
forward currency contracts ("Forward Contracts") involves special considerations
and risks, as described below. Risks pertaining to particular instruments are
described in the sections that follow.
(1) Successful use of most of these instruments depends upon the
Sub-adviser's ability to predict movements of the overall securities and
currency markets, which requires different skills than predicting changes in
the prices of individual securities. While the Sub-adviser is experienced in
the use of these instruments, there can be no assurance that any particular
strategy adopted will succeed.
(2) There might be imperfect correlation, or even no correlation,
between price movements of an instrument and price movements of the
investments being hedged. For example, if the value of an instrument used in
a short hedge increased by less than the decline in value of the hedged
investment, the hedge would not be fully successful. Such a lack of
correlation might occur due to factors unrelated to the value of the
investments being hedged, such as speculative or other pressures on the
markets in which the hedging instrument is traded. The effectiveness of
hedges using hedging instruments on indices will depend on the degree of
correlation between price movements in the index and price movements in the
investments being hedged.
(3) Hedging strategies, if successful, can reduce risk of loss by wholly
or partially offsetting the negative effect of unfavorable price movements
in the investments being hedged. However, hedging strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements in the hedged investments. For example, if an Underlying Theme
Portfolio entered into a short hedge because the Sub-adviser projected a
decline in the price of a security in the Underlying Theme Portfolio's
portfolio, and the price of that security increased instead, the gain from
that increase might be wholly or partially offset by a decline in the price
of the hedging instrument. Moreover, if the price of the hedging instrument
declined by more than the increase in the price of the security, the
Underlying Theme Portfolio could suffer a loss. In either such case, the
Underlying Theme Portfolio would have been in a better position had it not
hedged at all.
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(4) As described below, an Underlying Theme Portfolio might be required
to maintain assets as "cover," maintain segregated accounts or make margin
payments when it takes positions in instruments involving obligations to
third parties (i.e., instruments other than purchased options). If the
Underlying Theme Portfolio were unable to close out its positions in such
instruments, it might be required to continue to maintain such assets or
accounts or make such payments until the position expired or matured. The
requirements might impair the Underlying Theme Portfolio's ability to sell a
portfolio security or make an investment at a time when it would otherwise
be favorable to do so, or require that the Underlying Theme Portfolio sell a
portfolio security at a disadvantageous time. The Underlying Theme
Portfolio's ability to close out a position in an instrument prior to
expiration or maturity depends on the existence of a liquid secondary market
or, in the absence of such a market, the ability and willingness of the
other party to the transaction ("contra party") to enter into a transaction
closing out the position. Therefore, there is no assurance that any position
can be closed out at a time and price that is favorable to the Underlying
Theme Portfolio.
WRITING CALL OPTIONS
Each Underlying Theme Portfolio may write (sell) call options on securities,
indices and currencies. Call options generally will be written on securities and
currencies that, in the opinion of the Sub-adviser, are not expected to make any
major price moves in the near future but that, over the long term, deemed to be
attractive investments for the Underlying Theme Portfolios.
A call option gives the holder (buyer) the right to purchase a security or
currency at a specified price (the exercise price) at any time until (American
style) or on (European style) a certain date (the expiration date). So long as
the obligation of the writer of a call option continues, he or she may be
assigned an exercise notice, requiring him or her to deliver the underlying
security or currency against payment of the exercise price. This obligation
terminates upon the expiration of the call option, or such earlier time at which
the writer effects a closing purchase transaction by purchasing an option
identical to that previously sold.
Portfolio securities or currencies on which call options may be written will be
purchased solely on the basis of investment considerations consistent with each
Underlying Theme Portfolio's investment objective. When writing a call option,
an Underlying Theme Portfolio, in return for the premium, gives up the
opportunity for profit from a price increase in the underlying security or
currency above the exercise price, and retains the risk of loss should the price
of the security or currency decline. Unlike one who owns securities or
currencies not subject to an option, an Underlying Theme Portfolio has no
control over when it may be required to sell the underlying securities or
currencies, since most options may be exercised at any time prior to the
option's expiration. If a call option that an Underlying Theme Portfolio has
written expires, it will realize a gain in the amount of the premium; however,
such gain may be offset by a decline in the market value of the underlying
security or currency during the option period. If the call option is exercised,
the Underlying Theme Portfolio will realize a gain or loss from the sale of the
underlying security or currency, which will be increased or offset by the
premium received. The Underlying Theme Portfolios do not consider a security or
currency covered by a call option to be "pledged" as that term is used in their
policies that limit the pledging or mortgaging of their assets.
Writing call options can serve as a limited short hedge because declines in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
appreciates to a price higher than the exercise price of the call option, it can
be expected that the option will be exercised and an Underlying Theme Portfolio
will be obligated to sell the security or currency at less than its market
value.
The premium that an Underlying Theme Portfolio receives for writing a call
option is deemed to constitute the market value of an option. The premium the
Underlying Theme Portfolio will receive from writing a call option will reflect,
among other things, the current market price of the underlying investment, the
relationship of the exercise price to such market price, the historical price
volatility of the underlying investment, and the length of the option period. In
determining whether a particular call option should be written, the Sub-adviser
will consider the reasonableness of the anticipated premium and the likelihood
that a liquid secondary market will exist for those options.
Closing transactions will be effected in order to realize a profit on an
outstanding call option, to prevent an underlying security or currency from
being called or to permit the sale of the underlying security or currency.
Furthermore, effecting a closing transaction will permit an Underlying Theme
Portfolio to write another call option on the underlying security or currency
with either a different exercise price or expiration date, or both.
Each Underlying Theme Portfolio will pay transaction costs in connection with
the writing of options and in entering into closing purchase contracts.
Transaction costs relating to options activity are normally higher than those
applicable to purchases and sales of portfolio securities.
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AIM NEW DIMENSION FUND
The exercise price of the options may be below, equal to or above the current
market values of the underlying securities, indices or currencies at the time
the options are written. From time to time, an Underlying Theme Portfolio may
purchase an underlying security or currency for delivery in accordance with the
exercise of an option, rather than delivering such security or currency from its
portfolio. In such cases, additional costs will be incurred.
An Underlying Theme Portfolio will realize a profit or loss from a closing
purchase transaction if the cost of the transaction is less or more,
respectively, than the premium received from writing the option. Because
increases in the market price of a call option generally will reflect increases
in the market price of the underlying security or currency, any loss resulting
from the repurchase of a call option is likely to be offset in whole or in part
by appreciation of the underlying security or currency owned by an Underlying
Theme Portfolio.
WRITING PUT OPTIONS
Each Underlying Theme Portfolio may write put options on securities, indices and
currencies. A put option gives the purchaser of the option the right to sell,
and the writer (seller) the obligation to buy, the underlying security or
currency at the exercise price at any time until (American style) or on
(European style) the expiration date. The operation of put options in other
respects, including their related risks and rewards, is substantially identical
to that of call options.
An Underlying Theme Portfolio generally would write put options in circumstances
where the Sub-adviser wishes to purchase the underlying security or currency for
the Underlying Theme Portfolio's holdings at a price lower than the current
market price of the security or currency. In such event, an Underlying Theme
Portfolio would write a put option at an exercise price that, reduced by the
premium received on the option, reflects the lower price it is willing to pay.
Since the Underlying Theme Portfolio would also receive interest on debt
securities or currencies maintained to cover the exercise price of the option,
this technique could be used to enhance current return during periods of market
uncertainty. The risk in such a transaction would be that the market price of
the underlying security or currency would decline below the exercise price less
the premium received.
Writing put options can serve as a limited long hedge because increases in the
value of the hedged investment would be offset to the extent of the premium
received for writing the option. However, if the security or currency
depreciates to a price lower than the exercise price of the put option, it can
be expected that the put option will be exercised and an Underlying Theme
Portfolio will be obligated to purchase the security or currency at greater than
its market value.
PURCHASING PUT OPTIONS
Each Underlying Theme Portfolio may purchase put options on securities, indices
and currencies. As the holder of a put option, an Underlying Theme Portfolio
would have the right to sell the underlying security or currency at the exercise
price at any time until (American style) or on (European style) the expiration
date. An Underlying Theme Portfolio may enter into closing sale transactions
with respect to such options, exercise such option or permit such option to
expire.
Each Underlying Theme Portfolio may purchase a put option on an underlying
security or currency ("protective put") owned by the Underlying Theme Portfolio
in order to protect against an anticipated decline in the value of the security
or currency. Such hedge protection is provided only during the life of the put
option when the Underlying Theme Portfolio, as the holder of the put option, is
able to sell the underlying security or currency at the put exercise price
regardless of any decline in the underlying security's market price or
currency's exchange value. The premium paid for the put option and any
transaction costs would reduce any profit otherwise available for distribution
when the security or currency is eventually sold.
An Underlying Theme Portfolio may also purchase put options at a time when it
does not own the underlying security or currency. By purchasing put options on a
security or currency it does not own, that Underlying Theme Portfolio seeks to
benefit from a decline in the market price of the underlying security or
currency. If the put option is not sold when it has remaining value, and if the
market price of the underlying security or currency remains equal to or greater
than the exercise price during the life of the put option, the Underlying Theme
Portfolio will lose its entire investment in the put option. In order for the
purchase of a put option to be profitable, the market price of the underlying
security or currency must decline sufficiently below the exercise price to cover
the premium and transaction costs, unless the put option is sold in a closing
sale transaction.
PURCHASING CALL OPTIONS
Each Underlying Theme Portfolio may purchase call options on securities, indices
and currencies. As the holder of a call option, an Underlying Theme Portfolio
would have the right to purchase the underlying security or currency at the
exercise price at any time until (American style) or on (European style) the
expiration date. An Underlying Theme Portfolio may enter into closing sale
transactions with respect to such options, exercise such options or permit such
options to expire.
Statement of Additional Information Page 8
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AIM NEW DIMENSION FUND
Call options may be purchased by an Underlying Theme Portfolio for the purpose
of acquiring the underlying security or currency for its portfolio. Utilized in
this fashion, the purchase of call options would enable an Underlying Theme
Portfolio to acquire the security or currency at the exercise price of the call
option plus the premium paid. At times, the net cost of acquiring the security
or currency in this manner may be less than the cost of acquiring the security
or currency directly. This technique may also be useful to an Underlying Theme
Portfolio in purchasing a large block of securities that would be more difficult
to acquire by direct market purchases. So long as it holds such a call option,
rather than the underlying security or currency itself, the Underlying Theme
Portfolio is partially protected from any unexpected decline in the market price
of the underlying security or currency and, in such event, could allow the call
option to expire, incurring a loss only to the extent of the premium paid for
the option.
An Underlying Theme Portfolio may also purchase call options on underlying
securities or currencies it owns to avoid realizing losses that would result in
a reduction of its current return. For example, where an Underlying Theme
Portfolio has written a call option on an underlying security or currency having
a current market value below the price at which it purchased the security or
currency, an increase in the market price could result in the exercise of the
call option written by the Underlying Theme Portfolio and the realization of a
loss on the underlying security or currency. Accordingly, the Underlying Theme
Portfolio could purchase a call option on the same underlying security or
currency, which could be exercised to fulfill its delivery obligations under its
written call (if it is exercised). This strategy could allow the Underlying
Theme Portfolio to avoid selling the portfolio security or currency at a time
when it has an unrealized loss; however, the Underlying Theme Portfolio would
have to pay a premium to purchase the call option plus transaction costs.
Aggregate premiums paid for put and call options will not exceed 5% of each
Underlying Theme Portfolio's total assets at the time of each purchase.
An Underlying Theme Portfolio may attempt to accomplish objectives similar to
those involved in using Forward Contracts by purchasing put or call options on
currencies. A put option gives an Underlying Theme Portfolio as purchaser the
right (but not the obligation) to sell a specified amount of currency at the
exercise price at any time until (American style) or on (European style) the
expiration date of the option. A call option gives an Underlying Theme Portfolio
as purchaser the right (but not the obligation) to purchase a specified amount
of currency at the exercise price at any time until (American style) or on
(European style) the expiration date of the option. An Underlying Theme
Portfolio might purchase a currency put option, for example, to protect itself
against a decline in the dollar value of a currency in which it holds or
anticipates holding securities. If the currency's value should decline against
the dollar, the loss in currency value should be offset, in whole or in part, by
an increase in the value of the put. If the value of the currency instead should
rise against the dollar, any gain to an Underlying Theme Portfolio would be
reduced by the premium it had paid for the put option. A currency call option
might be purchased, for example, in anticipation of, or to protect against, a
rise in the value against the dollar of a currency in which an Underlying Theme
Portfolio anticipates purchasing securities.
Options may be either listed on an exchange or traded in over-the-counter
("OTC") markets. Listed options are third-party contracts (i.e., performance of
the obligations of the purchaser and seller is guaranteed by the exchange or
clearing corporation) and have standardized strike prices and expiration dates.
OTC options are two-party contracts with negotiated strike prices and expiration
dates. An Underlying Theme Portfolio will not purchase an OTC option unless it
believes that daily valuations for such options are readily obtainable. OTC
options differ from exchange-traded options in that OTC options are transacted
with dealers directly and not through a clearing corporation (which guarantees
performance). Consequently, there is a risk of non-performance by the dealer.
Since no exchange is involved, OTC options are valued on the basis of an average
of the last bid prices obtained from dealers, unless a quotation from only one
dealer is available, in which case only that dealer's price will be used. In the
case of OTC options, there can be no assurance that a liquid secondary market
will exist for any particular option at any specific time.
The staff of the Securities and Exchange Commission ("SEC") considers purchased
OTC options to be illiquid securities. An Underlying Theme Portfolio may also
sell OTC options and, in connection therewith, segregate assets or cover its
obligations with respect to OTC options written by it. The assets used as cover
for OTC options written by an Underlying Theme Portfolio will be considered
illiquid unless the OTC options are sold to qualified dealers who agree that the
Underlying Theme Portfolio may repurchase any OTC option it writes at a maximum
price to be calculated by a formula set forth in the option agreement. The cover
for an OTC option written subject to this procedure would be considered illiquid
only to the extent that the maximum repurchase price under the formula exceeds
the intrinsic value of the option.
An Underlying Theme Portfolio's ability to establish and close out positions in
exchange-listed options depends on the existence of a liquid market. Each
Underlying Theme Portfolio intends to purchase or write only those
exchange-traded options for which there appears to be a liquid secondary market.
However, there can be no assurance that such a market will exist at any
particular time. Closing transactions can be made for OTC options only by
negotiating directly with the
Statement of Additional Information Page 9
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AIM NEW DIMENSION FUND
contra party or by a transaction in the secondary market if any such market
exists. Although an Underlying Theme Portfolio will enter into OTC options only
with contra parties that are expected to be capable of entering into closing
transactions with it, there is no assurance that the Underlying Theme Portfolio
will in fact be able to close out an OTC option position at a favorable price
prior to expiration. In the event of insolvency of the contra party, the
Underlying Theme Portfolio might be unable to close out an OTC option position
at any time prior to its expiration.
INDEX OPTIONS
Puts and calls on indices are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss depends on
changes in the index in question (and thus on price movements in the securities
market or a particular market sector generally) rather than on price movements
in individual securities or futures contracts. When an Underlying Theme
Portfolio writes a call on an index, it receives a premium and agrees that,
prior to the expiration date, the purchaser of the call, upon exercise of the
call, will receive from the Underlying Theme Portfolio an amount of cash if the
closing level of the index upon which the call is based is greater than the
exercise price of the call. The amount of cash is equal to the difference
between the closing price of the index and the exercise price of the call times
a specified multiple (the "multiplier"), which determines the total dollar value
for each point of such difference. When an Underlying Theme Portfolio buys a
call on an index, it pays a premium and has the same rights as to such call as
are indicated above. When an Underlying Theme Portfolio buys a put on an index,
it pays a premium and has the right, prior to the expiration date, to require
the seller of the put, upon the Underlying Theme Portfolio's exercise of the
put, to deliver to the Underlying Theme Portfolio an amount of cash if the
closing level of the index upon which the put is based is less than the exercise
price of the put, which amount of cash is determined by the multiplier, as
described above for calls. When the Underlying Theme Portfolio writes a put on
an index, it receives a premium and the purchaser has the right, prior to the
expiration date, to require the Underlying Theme Portfolio to deliver to it an
amount of cash equal to the difference between the closing level of the index
and the exercise price times the multiplier, if the closing level is less than
the exercise price.
The risks of investment in index options may be greater than options on
securities. Because index options are settled in cash, when an Underlying Theme
Portfolio writes a call on an index it cannot provide in advance for its
potential settlement obligations by acquiring and holding the underlying
securities. An Underlying Theme Portfolio can offset
some of the risk of writing a call index option position by holding a
diversified portfolio of securities similar to those on which the underlying
index is based. However, an Underlying Theme Portfolio cannot, as a practical
matter, acquire and hold a portfolio containing exactly the same securities as
underlie the index and, as a result, bears a risk that the value of the
securities held will vary from the value of the index.
Even if an Underlying Theme Portfolio could assemble a securities portfolio that
exactly reproduced the composition of the underlying index, it still would not
be fully covered from a risk standpoint because of the "timing risk" inherent in
writing index options. When an index option is exercised, the amount of cash
that the holder is entitled to receive is determined by the difference between
the exercise price and the closing index level on the date when the option is
exercised. As with other kinds of options, the Underlying Theme Portfolio, as
the call writer, will not know that it has been assigned until the next business
day at the earliest. The time lag between exercise and notice of assignment
poses no risk for the writer of a covered call on a specific underlying
security, such as common stock, because there the writer's obligation is to
deliver the underlying security, not to pay its value as of a fixed time in the
past. So long as the writer already owns the underlying security, it can satisfy
its settlement obligations by simply delivering it, and the risk that its value
may have declined since the exercise date is borne by the exercising holder. In
contrast, even if the writer of an index call holds securities that exactly
match the composition of the underlying index, it will not be able to satisfy
its assignment obligations by delivering those securities against payment of the
exercise price. Instead, it will be required to pay cash in an amount based on
the closing index value on the exercise date; and by the time it learns that it
has been assigned, the index may have declined, with a corresponding decline in
the value of its securities portfolio. This "timing risk" is an inherent
limitation on the ability of index call writers to cover their risk exposure by
holding securities positions.
If an Underlying Theme Portfolio purchases an index option and exercises it
before the closing index value for that day is available, it runs the risk that
the level of the underlying index may subsequently change. If such a change
causes the exercised option to fall out-of-the-money, the Underlying Theme
Portfolio will be required to pay the difference between the closing index value
and the exercise price of the option (times the applicable multiplier) to the
assigned writer.
INTEREST RATE, CURRENCY AND STOCK INDEX FUTURES CONTRACTS
Each Underlying Theme Portfolio may enter into interest rate, currency or stock
index futures contracts (collectively, "Futures" or "Futures Contracts") as a
hedge against changes in prevailing levels of interest rates, currency exchange
rates or stock price levels, respectively, in order to establish more definitely
the effective return on securities or currencies held or intended to be acquired
by it. An Underlying Theme Portfolio's hedging may include sales of Futures as
an offset
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AIM NEW DIMENSION FUND
against the effect of expected increases in interest rates, and decreases in
currency exchange rates and stock prices, and purchases of Futures as an offset
against the effect of expected declines in interest rates, and increases in
currency exchange rates or stock prices.
Each Underlying Theme Portfolio only will enter into Futures Contracts that are
traded on futures exchanges and are standardized as to maturity date and
underlying financial instrument. Futures exchanges and trading thereon in the
United States are regulated under the Commodity Exchange Act by the Commodity
Futures Trading Commission ("CFTC"). Futures are exchanged in London at the
London International Financial Futures Exchange.
Although techniques other than sales and purchases of Futures Contracts could be
used to reduce an Underlying Theme Portfolio's exposure to interest rate,
currency exchange rate and stock market fluctuations, an Underlying Theme
Portfolio may be able to hedge its exposure more effectively and at a lower cost
through using Futures Contracts.
A Futures Contract provides for the future sale by one party and purchase by
another party of a specified amount of a specific financial instrument (security
or currency) for a specified price at a designated date, time and place. A stock
index Futures Contract provides for the delivery, at a designated date, time and
place, of an amount of cash equal to a specified dollar amount times the
difference between the stock index value at the close of trading on the contract
and the price at which the Futures Contract is originally struck; no physical
delivery of stocks comprising the index is made. Brokerage fees are incurred
when a Futures Contract is bought or sold, and margin deposits must be
maintained at all times the Futures Contract is outstanding.
Although Futures Contracts typically require future delivery of and payment for
financial instruments or currencies, Futures Contracts usually are closed out
before the delivery date. Closing out an open Futures Contract sale or purchase
is effected by entering into an offsetting Futures Contract purchase or sale,
respectively, for the same aggregate amount of the identical financial
instrument or currency and the same delivery date. If the offsetting purchase
price is less than the original sale price, the Underlying Theme Portfolio
realizes a gain; if it is more, the Underlying Theme Portfolio realizes a loss.
Conversely, if the offsetting sale price is more than the original purchase
price, the Underlying Theme Portfolio realizes a gain; if it is less, the
Underlying Theme Portfolio realizes a loss. The transaction costs must also be
included in these calculations. There can be no assurance, however, that an
Underlying Theme Portfolio will be able to enter into an offsetting transaction
with respect to a particular Futures Contract at a particular time. If an
Underlying Theme Portfolio is not able to enter into an offsetting transaction,
it will continue to be required to maintain the margin deposits on the Futures
Contract.
As an example of an offsetting transaction, the contractual obligations arising
from the sale of one Futures Contract of September Deutschemarks on an exchange
may be fulfilled at any time before delivery under the Futures Contract is
required (i.e., on a specified date in September, the "delivery month") by the
purchase of another Futures Contract of September Deutschemarks on the same
exchange. In such instance, the difference between the price at which the
Futures Contract was sold and the price paid for the offsetting purchase, after
allowance for transaction costs, represents the profit or loss to the Underlying
Theme Portfolio.
Each Underlying Theme Portfolio's Futures transactions will be entered into for
hedging purposes only, that is, Futures Contracts will be sold to protect
against a decline in the price of securities or currencies that an Underlying
Theme Portfolio owns, or Futures Contracts will be purchased to protect an
Underlying Theme Portfolio against an increase in the price of securities or
currencies it has committed to purchase or expects to purchase.
"Margin" with respect to Futures Contracts is the amount of funds that must be
deposited by an Underlying Theme Portfolio in order to initiate Futures trading
and maintain its open positions in Futures Contracts. A margin deposit made when
the Futures Contract is entered into ("initial margin") is intended to ensure
the Underlying Theme Portfolio's performance under the Futures Contract. The
margin required for a particular Futures Contract is set by the exchange on
which the Futures Contract is traded and may be significantly modified from time
to time by the exchange during the term of the Futures Contract.
Subsequent payments, called "variation margin," to and from the futures
commission merchant through which the Underlying Theme Portfolio entered into
the Futures Contract will be made on a daily basis as the price of the
underlying security, currency or index fluctuates making the Futures Contract
more or less valuable, a process known as marking-to-market.
RISKS OF USING FUTURES CONTRACTS. The prices of Futures Contracts are
volatile and are influenced by, among other things, actual and anticipated
changes in interest rates and currency exchange rates, and in stock market
movements, which in turn are affected by fiscal and monetary policies and
national and international political and economic events.
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There is a risk of imperfect correlation between changes in prices of Futures
Contracts and prices of the securities or currencies in an Underlying Theme
Portfolio's portfolio being hedged. The degree of imperfection of correlation
depends upon circumstances such as variations in speculative market demand for
Futures and for securities or currencies, including technical influences in
Futures trading; and differences between the financial instruments being hedged
and the instruments underlying the standard Futures Contracts available for
trading. A decision of whether, when and how to hedge involves skill and
judgment, and even a well-conceived hedge may be unsuccessful to some degree
because of unexpected market behavior or interest or currency rate trends.
Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial loss, as
well as gain, to the investor. For example, if at the time of purchase, 10% of
the value of the Futures Contract is deposited as margin, a subsequent 10%
decrease in the value of the Futures Contract would result in a total loss of
the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit, if the Futures Contract were closed out.
Thus, a purchase or sale of a Futures Contract may result in losses in excess of
the amount invested in the Futures Contract.
Most U.S. Futures exchanges limit the amount of fluctuation permitted in Futures
Contract and options on Futures Contracts prices during a single trading day.
The daily limit establishes the maximum amount that the price of a Futures
Contract or option may vary either up or down from the previous day's settlement
price at the end of a trading session. Once the daily limit has been reached in
a particular type of Futures Contract or option, no trades may be made on that
day at a price beyond that limit. The daily limit governs only price movement
during a particular trading day and therefore does not limit potential losses,
because the limit may prevent the liquidation of unfavorable positions. Futures
Contracts and option prices have occasionally moved to the daily limit for
several consecutive trading days with little or no trading, thereby preventing
prompt liquidation of positions and subjecting some traders to substantial
losses.
If an Underlying Theme Portfolio were unable to liquidate a Futures or option on
Futures position due to the absence of a liquid secondary market or the
imposition of price limits, it could incur substantial losses. The Underlying
Theme Portfolio would continue to be subject to market risk with respect to the
position. In addition, except in the case of purchased options, the Underlying
Theme Portfolio would continue to be required to make daily variation margin
payments and might be required to maintain the position being hedged by the
Future or option or to maintain cash or securities in a segregated account.
Certain characteristics of the Futures market might increase the risk that
movements in the prices of Futures Contracts or options on Futures might not
correlate perfectly with movements in the prices of the investments being
hedged. For example, all participants in the Futures and options on Futures
markets are subject to daily variation margin calls and might be compelled to
liquidate Futures or options on Futures positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations could
increase price volatility of the instruments and distort the normal price
relationship between the Futures or options and the investments being hedged.
Also, because initial margin deposit requirements in the Futures market are less
onerous than margin requirements in the securities markets, there might be
increased participation by speculators in the Futures markets. This
participation also might cause temporary price distortions. In addition,
activities of large traders in both the Futures and securities markets involving
arbitrage, "program trading" and other investment strategies might result in
temporary price distortions.
OPTIONS ON FUTURES CONTRACTS
Options on Futures Contracts are similar to options on securities or currencies
except that options on Futures Contracts give the purchaser the right, in return
for the premium paid, to assume a position in a Futures Contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the delivery of the Futures position by the writer of
the option to the holder of the option will be accompanied by delivery of the
accumulated balance in the writer's Futures margin account, which represents the
amount by which the market price of the Futures Contract, at exercise, exceeds
(in the case of a call) or is less than (in the case of a put) the exercise
price of the option on the Futures Contract. If an option is exercised on the
last trading day prior to the expiration date of the option, the settlement will
be made entirely in cash equal to the difference between the exercise price of
the option and the closing level of the securities, currencies or index upon
which the Futures Contract is based on the expiration date. Purchasers of
options who fail to exercise their options prior to the exercise date suffer a
loss of the premium paid.
The purchase of call options on Futures can serve as a long hedge, and the
purchase of put options on Futures can serve as a short hedge. Writing call
options on Futures can serve as a limited short hedge, and writing put options
on Futures can
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serve as a limited long hedge, using a strategy similar to that used for writing
options on securities, foreign currencies or indices.
If an Underlying Theme Portfolio writes an option on a Futures Contract, it will
be required to deposit initial and variation margin pursuant to requirements
similar to those applicable to Futures Contracts. Premiums received from the
writing of an option on a Futures Contract are included in the initial margin
deposit.
An Underlying Theme Portfolio may seek to close out an option position by
selling an option covering the same Futures Contract and having the same
exercise price and expiration date. The ability to establish and close out
positions on such options is subject to the maintenance of a liquid secondary
market.
LIMITATIONS ON USE OF FUTURES, OPTIONS ON FUTURES AND CERTAIN OPTIONS ON
CURRENCIES
To the extent that an Underlying Theme Portfolio enters into Futures Contracts,
options on Futures Contracts and options on foreign currencies traded on a
CFTC-regulated exchange, in each case other than for BONA FIDE hedging purposes
(as defined by the CFTC), the aggregate initial margin and premiums required to
establish those positions (excluding the amount by which options are
"in-the-money") will not exceed 5% of the liquidation value of the Underlying
Theme Portfolio, after taking into account unrealized profits and unrealized
losses on any contracts it has entered into. In general, a call option on a
Futures Contract is "in-the-money" if the value of the underlying Futures
Contract exceeds the strike, i.e., exercise, price of the call; a put option on
a Futures Contract is "in-the-money" if the value of the underlying Futures
Contract is exceeded by the strike price of the put. This guideline may be
modified by the applicable Board, without a shareholder vote. This limitation
does not limit the percentage of an Underlying Theme Portfolio's assets at risk
to 5%.
FORWARD CONTRACTS
A Forward Contract is an obligation, usually arranged with a commercial bank or
other currency dealer, to purchase or sell a currency against another currency
at a future date and price as agreed upon by the parties. An Underlying Theme
Portfolio either may accept or make delivery of the currency at the maturity of
the Forward Contract. An Underlying Theme Portfolio may also, if its contra
party agrees prior to maturity, enter into a closing transaction involving the
purchase or sale of an offsetting contract.
An Underlying Theme Portfolio engages in forward currency transactions in
anticipation of, or to protect itself against, fluctuations in exchange rates.
An Underlying Theme Portfolio might sell a particular foreign currency forward,
for example, when it holds bonds denominated in a foreign currency but
anticipates, and seeks to be protected against, a decline in the currency
against the U.S. dollar. Similarly, an Underlying Theme Portfolio might sell the
U.S. dollar forward when it holds bonds denominated in U.S. dollars but
anticipates, and seeks to be protected against, a decline in the U.S. dollar
relative to other currencies. Further, an Underlying Theme Portfolio might
purchase a currency forward to "lock in" the price of securities denominated in
that currency that it anticipates purchasing.
Forward Contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers. A Forward
Contract generally has no deposit requirement, and no commissions are charged at
any stage for trades. Each Underlying Theme Portfolio will enter into such
Forward Contracts with major U.S. or foreign banks and securities or currency
dealers in accordance with guidelines approved by the applicable Board.
An Underlying Theme Portfolio may enter into Forward Contracts either with
respect to specific transactions or with respect to overall investments of that
Underlying Theme Portfolio. The precise matching of the Forward Contract amounts
and the value of specific securities generally will not be possible because the
future value of such securities in foreign currencies will change as a
consequence of market movements in the value of those securities between the
date the Forward Contract is entered into and the date it matures. Accordingly,
it may be necessary for that Underlying Theme Portfolio to purchase additional
foreign currency on the spot (i.e., cash) market (and bear the expense of such
purchase) if the market value of the security is less than the amount of foreign
currency the Underlying Theme Portfolio is obligated to deliver and if a
decision is made to sell the security and make delivery of the foreign currency.
Conversely, it may be necessary to sell on the spot market some of the foreign
currency the Underlying Theme Portfolio is obligated to deliver. The projection
of short-term currency market movements is extremely difficult, and the
successful execution of a short-term hedging strategy is highly uncertain.
Forward Contracts involve the risk that anticipated currency movements will not
be predicted accurately, causing an Underlying Theme Portfolio to sustain losses
on these contracts and transaction costs.
At or before the maturity of a Forward Contract requiring an Underlying Theme
Portfolio to sell a currency, it either may sell a security and use the sale
proceeds to make delivery of the currency or retain the security and offset its
contractual obligation to deliver the currency by purchasing a second contract
pursuant to which it will obtain, on the same maturity date, the same amount of
the currency that it is obligated to deliver. Similarly, an Underlying Theme
Portfolio may close
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out a Forward Contract requiring it to purchase a specified currency by entering
into a second contract, if its contra party agrees, entitling it to sell the
same amount of the same currency on the maturity date of the first contract. An
Underlying Theme Portfolio would realize a gain or loss as a result of entering
into such an offsetting Forward Contract under either circumstance to the extent
the exchange rate or rates between the currencies involved moved between the
execution dates of the first contract and the offsetting contract.
The cost to an Underlying Theme Portfolio of engaging in Forward Contracts
varies with factors such as the currencies involved, the length of the contract
period and the market conditions then prevailing. Because Forward Contracts are
usually entered into on a principal basis, no fees or commissions are involved.
The use of Forward Contracts does not eliminate fluctuations in the prices of
the underlying securities an Underlying Theme Portfolio owns or intends to
acquire, but it does establish a rate of exchange in advance. In addition, while
Forward Contract sales limit the risk of loss due to a decline in the value of
the hedged currencies, they also limit any potential gain that might result
should the value of the currencies increase.
FOREIGN CURRENCY STRATEGIES -- SPECIAL CONSIDERATIONS
An Underlying Theme Portfolio may use options on foreign currencies, Futures on
foreign currencies, options on Futures on foreign currencies and Forward
Contracts to hedge against movements in the values of the foreign currencies in
which the Underlying Theme Portfolio's securities are denominated. Such currency
hedges can protect against price movements in a security that the Underlying
Theme Portfolio owns or intends to acquire that are attributable to changes in
the value of the currency in which it is denominated. Such hedges do not,
however, protect against price movements in the securities that are attributable
to other causes.
An Underlying Theme Portfolio might seek to hedge against changes in the value
of a particular currency when no Futures Contract, Forward Contract or option
involving that currency is available or one of such contracts is more expensive
than certain other contracts. In such cases, the Underlying Theme Portfolio may
hedge against price movements in that currency by entering into a contract on
another currency or basket of currencies, the values of which the Sub-adviser
believes will have a positive correlation to the value of the currency being
hedged. The risk that movements in the price of the contract will not correlate
perfectly with movements in the price of the currency being hedged is magnified
when this strategy is used.
The value of Futures Contracts, options on Futures Contracts, Forward Contracts
and options on foreign currencies depends on the value of the underlying
currency relative to the U.S. dollar. Because foreign currency transactions
occurring in the interbank market might involve substantially larger amounts
than those involved in the use of Futures Contracts, Forward Contracts or
options, the Underlying Theme Portfolio could be disadvantaged by dealing in the
odd lot market (generally consisting of transactions of less than $1 million)
for the underlying foreign currencies at prices that are less favorable than for
round lots.
There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirements that quotations available through dealers or
other market sources be firm or revised on a timely basis. Quotation information
generally is representative of very large transactions in the interbank market
and thus might not reflect odd-lot transactions where rates might be less
favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or Futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Futures contracts or options until they
reopen.
Settlement of Futures Contracts, Forward Contracts and options involving foreign
currencies might be required to take place within the country issuing the
underlying currency. Thus, an Underlying Theme Portfolio might be required to
accept or make delivery of the underlying foreign currency in accordance with
any U.S. or foreign regulations regarding the maintenance of foreign banking
arrangements by U.S. residents and might be required to pay any fees, taxes and
charges associated with such delivery assessed in the issuing country.
COVER
Transactions using Forward Contracts, Futures Contracts and options (other than
options purchased by an Underlying Theme Portfolio) expose the Underlying Theme
Portfolio to an obligation to another party. An Underlying Theme Portfolio will
not enter into any such transactions unless it owns either (1) an offsetting
("covered") position in securities, currencies, or other options, Forward
Contracts or Futures Contracts or (2) cash, receivables and short-term debt
securities with a value sufficient at all times to cover its potential
obligations not covered as provided in (1) above. Each Underlying Theme
Portfolio will comply with SEC guidelines regarding cover for these instruments
and, if the guidelines so require, set aside cash or liquid securities.
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Assets used as cover or held in a segregated account cannot be sold while the
position in the corresponding Forward Contract, Futures Contract or option is
open, unless they are replaced with other appropriate assets. If a large portion
of an Underlying Theme Portfolio's assets is used for cover or otherwise set
aside, it could affect portfolio management or the Underlying Theme Portfolio's
ability to meet redemption requests or other current obligations.
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RISK FACTORS OF THE
UNDERLYING THEME FUNDS
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DEBT SECURITIES
The value of the debt securities held by each Underlying Theme Portfolio
generally will vary conversely with market interest rates. If interest rates in
a market fall, the value of the debt securities held by each Underlying Theme
Portfolio ordinarily will rise. If market interest rates increase, however, the
debt securities owned by each Underlying Theme Portfolio in that market will be
likely to decrease in value.
The Global Consumer Products and Services Portfolio, Global Infrastructure
Portfolio and Global Resources Portfolio may each invest up to 20% of its total
assets in debt securities rated below investment grade. Such investments involve
a high degree of risk. However, those Portfolios will not invest in debt
securities that are in default as to payment of principal and interest.
Debt rated Baa by Moody's Investors Service, Inc. ("Moody") is considered by
Moody's to have speculative characteristics. Debt rated BB, B, CCC, CC or C by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), and
debt rated Ba, B, Caa, Ca or C by Moody's is regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. For S&P, BB
indicates the lowest degree of speculation for such lower quality debt and C the
highest degree of speculation. For Moody's, Baa indicates the lowest degree of
speculation for such lower quality debt and C the highest degree of speculation.
While such lower quality debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions. Debt rated C by Moody's or S&P is the lowest
rated debt that is not in default as to principal or interest, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing. Lower quality debt securities also are generally
considered to be subject to greater risk than securities with higher ratings
with regard to a deterioration of general economic conditions. These lower
quality debt securities are the equivalent of high yield, high risk bonds,
commonly known as "junk bonds."
Ratings of debt securities represent the rating agency's opinion regarding their
quality and are not a guarantee of quality. Rating agencies attempt to evaluate
the safety of principal and interest payments and do not evaluate the risks of
fluctuations in market value. Also, rating agencies may fail to make timely
changes in credit ratings in response to subsequent events, so that an issuer's
current financial condition may be better or worse than a rating indicates.
The market values of lower quality debt securities tend to reflect individual
developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. In addition, lower quality debt securities tend to be more
sensitive to economic conditions and generally have more volatile prices than
higher quality securities. Issuers of lower quality securities are often highly
leveraged and may not have available to them more traditional methods of
financing. For example, during an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower quality securities may
experience financial stress. During such periods, such issuers may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations may also be adversely affected by
specific developments affecting the issuer, such as the issuer's inability to
meet specific projected business forecasts or the unavailability of additional
financing. The risk of loss due to default by the issuer is significantly
greater for the holders of lower quality securities because such securities are
generally unsecured and may be subordinated to the claims of other creditors of
the issuer.
Lower quality debt securities of corporate issuers frequently have call or
buy-back features that permit the issuer to call or repurchase the security from
an Underlying Theme Portfolio. If an issuer exercises these provisions in a
declining interest rate market, the Underlying Theme Portfolio may have to
replace the security with a lower yielding security, resulting in a decreased
return for investors. In addition, the Underlying Theme Portfolios may have
difficulty disposing of lower quality securities because they may have a thin
trading market. There may be no established retail secondary market for
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many of these securities, and each Underlying Theme Portfolio anticipates that
such securities could be sold only to a limited number of dealers or
institutional investors. The lack of a liquid secondary market also may have an
adverse impact on market prices of such instruments and may make it more
difficult for the Underlying Theme Portfolios to obtain accurate market
quotations for purposes of valuing their portfolio investments. The Underlying
Theme Portfolios may also acquire lower quality debt securities during an
initial underwriting or which are sold without registration under applicable
securities laws. Such securities involve special considerations and risks.
In addition to the foregoing, factors that could have an adverse effect on the
market value of lower quality debt securities in which the Underlying Theme
Portfolios may invest include: (i) potential adverse publicity; (ii) heightened
sensitivity to general economic or political conditions; and (iii) the likely
adverse impact of a major economic recession. An Underlying Theme Portfolio may
also incur additional expenses to the extent it is required to seek recovery
upon a default in the payment of principal or interest on portfolio holdings,
and the Underlying Theme Portfolio may have limited legal recourse in the event
of a default.
The Sub-adviser attempts to minimize the speculative risks associated with
investments in lower quality securities through credit analysis and by carefully
monitoring current trends in interest rates, political developments and other
factors.
ILLIQUID SECURITIES
Each Underlying Theme Portfolio may invest up to 15% of its net assets in
illiquid securities. Securities may be considered illiquid if an Underlying
Theme Portfolio cannot reasonably expect within seven days to sell the
securities for approximately the amount at which it values such securities. See
"Investment Limitations of the Underlying Theme Funds and Portfolios." The sale
of illiquid securities, if they can be sold at all, generally will require more
time and result in higher brokerage charges or dealer discounts and other
selling expenses than will the sale of liquid securities such as securities
eligible for trading on U.S. securities exchanges or in OTC markets. Moreover,
restricted securities, which may be illiquid for purposes of this limitation,
often sell, if at all, at a price lower than similar securities that are liquid.
Illiquid securities include those that are subject to restrictions contained in
the securities laws of other countries. However, securities that are freely
marketable in the country where they are principally traded, but would not be
freely marketable in the United States, will not be considered illiquid. Where
registration is required, an Underlying Theme Portfolio may be obligated to pay
all or part of the registration expenses and a considerable period may elapse
between the time of the decision to sell and the time the Underlying Theme
Portfolio may be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market conditions were to develop,
the Underlying Theme Portfolio might obtain a less favorable price than
prevailed when it decided to sell.
Not all restricted securities are illiquid. In recent years a large
institutional market has developed for certain securities that are not
registered under the Securities Act of 1933, as amended (the "1933 Act"),
including private placements, repurchase agreements, commercial paper, foreign
securities and corporate bonds and notes. These instruments are often restricted
securities because the securities are sold in transactions not requiring
registration. Institutional investors generally will not seek to sell these
instruments to the general public, but instead will often depend either on an
efficient institutional market in which such unregistered securities can be
readily resold or on an issuer's ability to honor a demand for repayment.
Therefore, the fact that there are contractual or legal restrictions on resale
to the general public or certain institutions is not dispositive of the
liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the registration
requirements of the 1933 Act for resales of certain securities to qualified
institutional buyers. Institutional markets for restricted securities have
developed as a result of Rule 144A, providing both readily ascertainable values
for restricted securities and the ability to liquidate an investment to satisfy
share redemption orders. Such markets include automated systems for the trading,
clearance and settlement of unregistered securities of domestic and foreign
issuers, such as the PORTAL System sponsored by the National Association of
Securities Dealers, Inc. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible restricted securities held by
an Underlying Theme Portfolio, however, could affect adversely the marketability
of such portfolio securities, and the Underlying Theme Portfolio might be unable
to dispose of such securities promptly or at favorable prices.
With respect to liquidity determinations generally, the applicable Board has the
ultimate responsibility for determining whether specific securities, including
restricted securities pursuant to Rule 144A under the 1933 Act, are liquid or
illiquid. Each Board has delegated the function of making day-to-day
determinations of liquidity to the Sub-adviser, in accordance with procedures
approved by that Board. The Sub-adviser takes into account a number of factors
in reaching liquidity decisions, including (i) the frequency of trading in the
security, (ii) the number of dealers that make quotes for the security, (iii)
the number of dealers that have undertaken to make a market in the security,
(iv) the number of other potential
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purchasers and (v) the nature of the security and how trading is effected (e.g.,
the time needed to sell the security, how offers are solicited and the mechanics
of transfer). The Sub-adviser monitors the liquidity of securities held by each
Underlying Theme Portfolio and periodically reports such determinations to the
applicable Board. The Sub-adviser believes that carefully selected investments
in joint ventures, cooperatives, partnerships and state enterprises that are
illiquid (collectively, "Special Situations") could enable an Underlying Theme
Portfolio to achieve capital appreciation substantially exceeding the
appreciation it would realize if it did not make such investments. However, in
order to attempt to limit investment risk, each Underlying Theme Portfolio will
invest no more than 5% of its total assets in Special Situations. If the
liquidity percentage restriction of a Theme Portfolio is satisfied at the time
of investment, a later increase in the percentage of illiquid securities held by
the Theme Portfolio resulting from a change in market value or assets will not
constitute a violation of that restriction. If as a result of a change in market
value or assets, the percentage of illiquid securities held by the Theme
Portfolio increases above the applicable limit, the Sub-adviser will take
appropriate steps to bring the aggregate amount of illiquid assets back within
the prescribed limitations as soon as reasonably practicable, taking into
account the effect of any disposition on the Theme Portfolio.
FOREIGN SECURITIES
POLITICAL, SOCIAL AND ECONOMIC RISKS. Investing in securities of non-U.S.
companies may entail additional risks due to the potential political, social and
economic instability of certain countries and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment convertibility of currencies into U.S. dollars and on repatriation of
capital invested. In the event of such expropriation, nationalization or other
confiscation by any country, an Underlying Theme Portfolio could lose its entire
investment in any such country.
RELIGIOUS, POLITICAL AND ETHNIC STABILITY. Certain countries in which an
Underlying Theme Portfolio may invest may have groups that advocate radical
religious or revolutionary philosophies or support ethnic independence. Any
disturbance on the part of such individuals could carry the potential for
widespread destruction or confiscation of property owned by individuals and
entities foreign to such country and could cause the loss of an Underlying Theme
Portfolio's investment in those countries. Instability may also result from,
among other things, (i) authoritarian governments or military involvement in
political and economic decision-making, including changes in government through
extra-constitutional means, (ii) popular unrest associated with demands for
improved political, economic and social conditions, and (iii) hostile relations
with neighboring or other countries. Such political, social and economic
instability could disrupt the principal financial markets in which an Underlying
Theme Portfolio invests and adversely affect the value of its assets.
FOREIGN INVESTMENT RESTRICTIONS. Certain countries prohibit or impose
substantial restrictions on investments in their capital markets, particularly
their equity markets, by foreign entities such as an Underlying Theme Portfolio.
These restrictions or controls may at times limit or preclude investments in
certain securities and may increase the cost and expenses of an Underlying Theme
Portfolio. For example, certain countries require prior governmental approval
before investments by foreign persons may be made or may limit the amount of
investment by foreign persons in a particular company or limit the investment by
foreign persons to only a specific class of securities of a company that may
have less advantageous terms than securities of the company available for
purchase by nationals. Moreover, the national policies of certain countries may
restrict investment opportunities in issuers or industries deemed sensitive to
national interests. In addition, some countries require governmental approval
for the repatriation of investment income, capital or the proceeds of securities
sales by foreign investors. In addition, if there is a deterioration in a
country's balance of payments or for other reasons, a country may impose
restrictions on foreign capital remittances abroad. An Underlying Theme
Portfolio could be adversely affected by delays in, or a refusal to grant, any
required governmental approval for repatriation, as well as by the application
to it of other restrictions on investments.
NON-UNIFORM CORPORATE DISCLOSURE STANDARDS AND GOVERNMENTAL
REGULATION. Foreign companies are subject to accounting, auditing and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. companies. In particular, the assets, liabilities and profits
appearing on the financial statements of such a company may not reflect its
financial position or results of operations in the way they would be reflected
had such financial statements been prepared in accordance with U.S. generally
accepted accounting principles. Most of the foreign securities held by an
Underlying Theme Portfolio will not be registered with the SEC or regulators of
any foreign country, nor will the issuers thereof be subject to the SEC's
reporting requirements. Thus, there will be less available information
concerning most foreign issuers of securities held by an Underlying Theme
Portfolio than is available concerning U.S. issuers. In instances where the
financial statements of an issuer are not deemed to reflect accurately the
financial situation of the issuer, the Sub-adviser will take appropriate steps
to evaluate the proposed investment, which may include on-site inspection of the
issuer, interviews with its management and consultations with accountants,
bankers and other specialists. There is substantially less publicly available
information about foreign companies than there are reports and ratings published
about U.S. companies. In addition, where public information is available, it may
be less reliable than such information
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regarding U.S. issuers. Issuers of securities in foreign jurisdictions are
generally not subject to the same degree of regulation as are U.S. issuers with
respect to such matters as restrictions on market manipulation, insider trading
rules, shareholder proxy requirements and timely disclosure of information.
CURRENCY FLUCTUATIONS. Because each Underlying Theme Portfolio, under normal
circumstances, will invest a substantial portion of its total assets in the
securities of foreign issuers that are denominated in foreign currencies, the
strength or weakness of the U.S. dollar against such foreign currencies will
account for part of an Underlying Theme Portfolio's investment performance. A
decline in the value of any particular currency against the U.S. dollar will
cause a decline in the U.S. dollar value of an Underlying Theme Portfolio's
holdings of securities and cash denominated in that currency and, therefore,
will cause an overall decline in its and its corresponding Feeder Fund's net
asset value (as applicable) and any net investment income and capital gains
derived from such securities to be distributed in U.S. dollars to the
shareholders thereof. Moreover, if the value of the foreign currencies in which
an Underlying Theme Portfolio receives its income falls relative to the U.S.
dollar between receipt of the income and the making of distributions, the
Underlying Theme Portfolio may be required to liquidate securities if it has
insufficient cash in U.S. dollars to meet distribution requirements.
The rate of exchange between the U.S. dollar and other currencies is determined
by several factors, including the supply and demand for particular currencies,
central bank efforts to support particular currencies, the relative movement of
interest rates and the pace of business activity in the other countries and the
United States, and other economic and financial conditions affecting the world
economy.
Although each Underlying Theme Portfolio values its assets daily in terms of
U.S. dollars, the Underlying Theme Portfolios do not intend to convert their
holdings of foreign currencies into U.S. dollars on a daily basis. Each
Underlying Theme Portfolio will do so, from time to time, and investors should
be aware of the costs of currency conversion. Although foreign exchange dealers
do not charge a fee for conversion, they do realize a profit based on the
difference ("spread") between the prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to an Underlying
Theme Portfolio at one rate, while offering a lesser rate of exchange should an
Underlying Theme Portfolio desire to sell that currency to the dealer.
ADVERSE MARKET CHARACTERISTICS. Securities of many foreign issuers may be
less liquid and their prices more volatile than securities of comparable U.S.
issuers. In addition, foreign securities markets and brokers generally are
subject to less governmental supervision and regulation than in the United
States, and foreign securities transactions usually are subject to fixed
commissions, which generally are higher than negotiated commissions on U.S.
transactions. In addition, foreign securities transactions may be subject to
difficulties associated with the settlement of such transactions. Delays in
settlement could result in temporary periods when assets of an Underlying Theme
Portfolio are uninvested and no return is earned thereon. The inability of an
Underlying Theme Portfolio to make intended security purchases due to settlement
problems could cause it to miss attractive investment opportunities. Inability
to dispose of a portfolio security due to settlement problems either could
result in losses to an Underlying Theme Portfolio due to subsequent declines in
value of the portfolio security or, if that Underlying Theme Portfolio has
entered into a contract to sell the security, could result in possible liability
to the purchaser. The Sub-adviser will consider such difficulties when
determining the allocation of an Underlying Theme Portfolio's assets, although
the Sub-adviser does not believe that such difficulties will have a material
adverse effect on an Underlying Theme Portfolio's portfolio trading activities.
Each Underlying Theme Portfolio may use foreign custodians, which may involve
risks in addition to those related to its use of U.S. custodians. Such risks
include uncertainties relating to (1) determining and monitoring the foreign
custodian's financial strength, reputation and standing, (2) maintaining
appropriate safeguards concerning an Underlying Theme Portfolio's investments,
and (3) possible difficulties in obtaining and enforcing judgments against such
custodians.
WITHHOLDING TAXES. Each Underlying Theme Portfolio's net investment income
from securities of its foreign issuers may be subject to withholding taxes by
the foreign issuer's country, thereby reducing that income or delaying the
receipt of income when those taxes may be recaptured. See "Taxes."
CONCENTRATION. To the extent an Underlying Theme Portfolio invests a
significant portion of its assets in securities of issuers located in a
particular country or region of the world, it may be subject to greater risks
and may experience greater volatility than a fund that is more broadly
diversified geographically.
SPECIAL CONSIDERATIONS AFFECTING WESTERN EUROPEAN COUNTRIES. The countries
that are members of the European Economic Community ("Common Market") (Belgium,
Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands,
Portugal, Spain, and the United Kingdom) eliminated certain import tariffs and
quotas and other trade barriers with respect to one another over the past
several years. The Sub-adviser believes that this deregulation should improve
the prospects for economic growth in many Western European countries. Among
other things, the deregulation could enable
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companies domiciled in one country to avail themselves of lower labor costs
existing in other countries. In addition, this deregulation could benefit
companies domiciled in one country by opening additional markets for their goods
and services in other countries. Since, however, it is not clear what the exact
form or effect of these Common Market reforms will be on business in Western
Europe, it is impossible to predict the long-term impact of the implementation
of these programs on the securities owned by an Underlying Theme Portfolio.
SPECIAL CONSIDERATIONS AFFECTING RUSSIA AND EASTERN EUROPEAN
COUNTRIES. Investing in Russia and Eastern European countries involves a high
degree of risk and special considerations not typically associated with
investing in the U.S. securities markets and should be considered highly
speculative. Such risks include the following: (1) delays in settling portfolio
transactions and risk of loss arising out of the system of share registration
and custody; (2) the risk that it may be
impossible or more difficult than in other countries to obtain and/or enforce a
judgement; (3) pervasiveness of corruption and crime in the economic system; (4)
currency exchange rate volatility and the lack of available currency hedging
instruments; (5) higher rates of inflation (including the risk of social unrest
associated with periods of hyper-inflation) and high unemployment; (6) controls
on foreign investment and local practices disfavoring foreign investors and
limitations on repatriation of invested capital, profits and dividends, and on a
fund's ability to exchange local currencies for U.S. dollars; (7) political
instability and social unrest and violence; (8) the risk that the governments of
Russia and Eastern European countries may decide not to continue to support the
economic reform programs implemented recently and could follow radically
different political and/or economic policies to the detriment of investors,
including non-market-oriented policies such as the support of certain industries
at the expense of other sectors or investors, or a return to the centrally
planned economy that existed when such countries had a communist form of
government; (9) the financial condition of companies in these countries,
including large amounts of inter-company debt which may create a payments crisis
on a national scale; (10) dependency on exports and the corresponding importance
of international trade; (11) the risk that the tax system in these countries
will not be reformed to prevent inconsistent, retroactive and/or exorbitant
taxation; and (12) the underdeveloped nature of the securities markets.
SPECIAL CONSIDERATIONS AFFECTING JAPAN. Japan's economic growth has declined
significantly since 1990. The general government position has deteriorated as a
result of weakening economic growth and stimulative measures taken to support
economic activity and to restore financial stability. Although the decline in
interest rates and fiscal stimulation packages have helped to contain
recessionary forces, uncertainties remain. Japan is also heavily dependent upon
international trade, so its economy is especially sensitive to trade barriers
and disputes. Japan has had difficult relations with its trading partners,
particularly the United States, where the trade imbalance is the greatest. It is
possible that trade sanctions and other protectionist measures could impact
Japan adversely in both the short and the long term.
The common stocks of many Japanese companies trade at high price-earnings
ratios. Differences in accounting methods make it difficult to compare the
earnings of Japanese companies with those of companies in other countries,
especially in the United States. In general, however, reported net income in
Japan is understated relative to U.S. accounting standards and this is one
reason why price-earnings ratios of the stocks of Japanese companies have tended
historically to be higher than those for U.S. stocks. In addition, Japanese
companies have tended to have higher growth rates than U.S. companies and
Japanese interest rates have generally been lower than in the United States,
both factors which tend to result in lower discount rates and higher
price-earnings ratios in Japan than in the United States.
The Japanese securities markets are less regulated than those in the United
States. Evidence has emerged from time to time of distortion of market prices to
serve political or other purposes. Shareholders' rights are not always equally
enforced. In addition, Japan's banking industry is undergoing problems related
to bad loans and declining values in real estate.
SPECIAL CONSIDERATIONS AFFECTING PACIFIC REGION COUNTRIES. Certain of the
risks associated with international investments are heightened for investments
in Pacific region countries. For example, some of the currencies of Pacific
region countries have experienced steady devaluations relative to the U.S.
dollar, and major adjustments have been made periodically in certain of such
currencies. Certain countries, such as India, face serious exchange constraints.
Jurisdictional disputes also exist between South Korea and North Korea. In
addition, the Underlying Theme Portfolios may invest in Hong Kong, which
reverted to Chinese administration on July 1, 1997. Investments in Hong Kong may
be subject to expropriation, nationalization or confiscation, in which case an
Underlying Theme Portfolio could lose its entire investment in Hong Kong. In
addition, the reversion of Hong Kong also presents a risk that the Hong Kong
dollar will be devalued and a risk of possible loss of investor confidence in
Hong Kong's currency, stock market and assets.
SPECIAL CONSIDERATIONS AFFECTING LATIN AMERICAN COUNTRIES. Most Latin
American countries have experienced substantial, and in some periods extremely
high, rates of inflation for many years. Inflation and rapid fluctuations in
inflation rates have had and may continue to have very negative effects on the
economies and securities markets of certain Latin
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American countries. Certain Latin American countries are also among the largest
debtors to commercial banks and foreign governments. At times certain Latin
American countries have declared moratoria on the payment of principal and/or
interest on external debt. In addition, certain Latin American securities
markets have experienced high volatility in recent years.
Latin American countries may also close certain sectors of their economies to
equity investments by foreigners. Further due to the absence of securities
markets and publicly owned corporations and due to restrictions on direct
investment by foreign entities, investments may only be made in certain Latin
American countries solely or primarily through governmentally approved
investment vehicles or companies.
Certain Latin American countries may have managed currencies that are maintained
at artificial levels to the U.S. dollar rather than at levels determined by the
market. This type of system can lead to sudden and large adjustments in the
currency which, in turn, can have a disruptive and negative effect on foreign
investors. For example, in late 1994, the value of the Mexican peso lost more
than one-third of its value relative to the U.S. dollar.
SPECIAL CONSIDERATIONS AFFECTING EMERGING MARKETS. Investing in the
securities of companies in emerging markets may entail special risks relating to
potential political and economic instability and the risks of expropriation,
nationalization, confiscation or the imposition of restrictions on foreign
investment, convertibility of currencies into U.S. dollars and on repatriation
of capital invested. In the event of such expropriation, nationalization or
other confiscation by any country, an Underlying Theme Portfolio could lose its
entire investment in any such country.
Emerging securities markets are substantially smaller, less developed, less
liquid and more volatile than the major securities markets. The limited size of
emerging securities markets and limited trading value in issuers compared to the
volume of trading in U.S. securities could cause prices to be erratic for
reasons apart from factors that affect the quality of the securities. For
example, limited market size may cause prices to be unduly influenced by traders
who control large positions. Adverse publicity and investors' perceptions,
whether or not based on fundamental analysis, may decrease the value and
liquidity of portfolio securities, especially in these markets. In addition,
securities traded in certain emerging markets may be subject to risks due to the
inexperience of financial intermediaries, a lack of modern technology, the lack
of a sufficient capital base to expand business operations, and the possibility
of permanent or temporary termination of trading.
Settlement mechanisms in emerging securities markets may be less efficient and
reliable than in more developed markets. In such emerging securities there may
be share registration and delivery delays or failures.
Many emerging market countries have experienced substantial, and in some periods
extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates and corresponding currency devaluations have had
and may continue to have negative effects on the economies and securities
markets of certain emerging market countries.
PRIVATIZATIONS. The governments of some foreign countries have been engaged
in programs of selling part or all of their stakes in government owned or
controlled enterprises ("privatizations"). The Sub-adviser believes that
privatizations may offer opportunities for significant capital appreciation and
intends to invest assets of the Underlying Theme Portfolios in privatizations in
appropriate circumstances. In certain foreign countries, the ability of foreign
entities such as the Underlying Theme Portfolios to participate in
privatizations may be limited by local law, or the terms on which the Underlying
Theme Portfolios may be permitted to participate may be less advantageous than
those for local investors. There can be no assurance that foreign governments
will continue to sell companies currently owned or controlled by them or that
privatization programs will be successful.
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INVESTMENT LIMITATIONS
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INVESTMENT LIMITATIONS OF THE FUND
FUNDAMENTAL LIMITATIONS. The following fundamental limitations of the Fund
cannot be changed without the affirmative vote of the lesser of (i) 67% of the
Fund's shares represented at a meeting at which more than 50% of the outstanding
shares are represented or (ii) more than 50% of the outstanding shares
("Required Vote").
The Fund will not:
(1) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Fund's total assets
(including the amount borrowed but reduced by any liabilities not
constituting borrowings) at the time of the borrowing, except that the Fund
may borrow up to an additional 5% of its total assets (not including the
amount borrowed) for temporary or emergency purposes;
(2) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this restriction, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances
or similar instruments will not be considered the making of a loan;
(3) Engage in the business of underwriting securities of other issuers,
except to the extent that the Fund might be considered an underwriter under
the federal securities laws in connection with its disposition of portfolio
securities;
(4) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
the Fund may exercise rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner;
(5) Purchase or sell physical commodities unless acquired as a result of
owning securities or other instruments, but the Fund may purchase, sell or
enter into financial options and futures, forward and spot currency
contracts, swap transactions and other financial contracts or derivative
instruments; or
(6) Purchase securities of any one issuer if, as a result, more than 5%
of the Fund's total assets would be invested in securities of that issuer or
the Fund would own or hold more than 10% of the outstanding voting
securities of that issuer, except that up to 25% of the Fund's total assets
may be invested without regard to this limitation, and except that this
limitation does not apply to securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities or to securities issued by
other investment companies.
Because of its investment objective and policies, the Fund will concentrate more
than 25% of its assets in the mutual fund industry. In accordance with the
Fund's investment program set forth in the Prospectus, the Fund may invest more
than 25% of its assets in the Underlying Theme Funds.
NON-FUNDAMENTAL LIMITATIONS. The following investment limitations of the Fund
are non-fundamental and may be changed by the vote of the Trust's Board of
Trustees without shareholder approval.
The Fund will not:
(1) Invest more than 15% of its net assets in illiquid securities, a
term which means securities that cannot be disposed of within seven days in
the ordinary course of business at approximately the amount at which the
Fund has valued the securities and includes, among other things, repurchase
agreements maturing in more than seven days;
(2) Purchase portfolio securities while borrowings in excess of 5% of
its total assets are outstanding;
(3) Purchase securities on margin, except for short-term credit
necessary for clearance of portfolio transactions and except that the Fund
may make margin deposits in connection with its use of financial options and
futures, forward and spot currency contracts, swap transactions and other
financial contract or derivative instruments;
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(4) Engage in short sales of securities or maintain a short position,
except that the Fund may maintain short positions in connection with its use
of financial options an futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative instruments; or
(5) Purchase securities of other investment companies, except to the
extent permitted by the 1940 Act or under the terms of any exemptive order
granted by the SEC and except that this limitation does not apply to
securities received or acquired as dividends, through offers of exchange, or
as a result of reorganization, consolidation, or merger.
If a percentage restriction on investment or utilization of assets is adhered to
at the time of an investment or transaction, a later change in percentage
ownership of a security or kind of securities resulting from changing market
values or a similar type of event will not be considered a violation of the
Fund's policies or restrictions.
Notwithstanding the forgoing investment limitations, the Fund may invest in
Underlying Theme Funds that have adopted investment limitations that may be more
or less restrictive than those listed above. As a result, the Fund may engage
indirectly in investment strategies that are prohibited under the investment
limitations listed above. The investment limitations and other investment
policies and restrictions of each Underlying Theme Fund are described in its
prospectus and statement of additional information.
Pursuant to Section 12(d)(1)(G) of the 1940 Act, the Fund may invest
substantially all of its assets in the Underlying Theme Funds.
INVESTMENT LIMITATIONS OF THE UNDERLYING THEME FUNDS AND PORTFOLIOS
FEEDER FUNDS
The Financial Services Fund, Infrastructure Fund, Resources Fund and Consumer
Products and Services Fund (each, a "Feeder Fund," and collectively, the "Feeder
Funds") each has the following fundamental investment policy to enable it to
invest in the Financial Services Portfolio, Infrastructure Portfolio, Resources
Portfolio and Consumer Products and Services Portfolio (each a "Portfolio," and
collectively, the "Portfolios"), respectively:
Notwithstanding any other investment policy of the Fund, the Fund may invest all
of its investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having substantially
the same investment objective, policies and limitations as the Fund.
All other fundamental investment policies, and the non-fundamental investment
policies, of each Feeder Fund and its corresponding Portfolio are identical.
Therefore, although the following discusses the investment policies of each
Portfolio and its Board of Trustees, it applies equally to each Feeder Fund and
its Board of Trustees.
Each Portfolio has adopted the following investment limitations as fundamental
policies that may not be changed without a Required Vote. Whenever a Feeder Fund
is requested to vote on a change in the investment limitations of its
corresponding Portfolio, the Fund will hold a meeting of its shareholders and
will cast its votes as instructed by its shareholders.
No Portfolio may:
(1) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
the Portfolio may exercise rights under agreements relating to such
securities, including the right to enforce security interests and to hold
real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner;
(2) Purchase or sell physical commodities, but the Portfolio may
purchase, sell or enter into financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments;
(3) Engage in the business of underwriting securities of other issuers,
except to the extent that the Portfolio might be considered an underwriter
under the federal securities laws in connection with its disposition of
portfolio securities;
(4) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this limitation, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances
or similar instruments will not be considered the making of a loan;
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(5) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Portfolio's total
assets (including the amount borrowed but reduced by any liabilities not
constituting borrowings) at the time of the borrowing, except that the
Portfolio may borrow up to an additional 5% of its total assets (not
including the amount borrowed) for temporary or emergency purposes; or
(6) Purchase securities of any one issuer if, as a result, more than 5%
of the Portfolio's total assets would be invested in securities of that
issuer or the Portfolio would own or hold more than 10% of the outstanding
voting securities of that issuer, except that up to 25% of the Portfolio's
total assets may be invested without regard to this limitation, and except
that this limitation does not apply to securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities or to securities
issued by other investment companies.
The following investment policies of each Portfolio are not fundamental policies
and may be changed by vote of the Portfolios' Board of Trustees without
shareholder approval. No Portfolio may:
(1) Invest in securities of an issuer if the investment would cause the
Portfolio to own more than 10% of any class of securities of any one issuer;
(2) Invest in companies for the purpose of exercising control or
management;
(3) Invest more than 15% of its net assets in illiquid securities,
including securities that are illiquid by virtue of the absence of a readily
available market;
(4) Enter into a futures contract, an option on a futures contract, or
an option on foreign currency traded on a CFTC-regulated exchange, in each
case other than for BONA FIDE hedging purposes (as defined by the CFTC), if
the aggregate initial margin and premiums required to establish all of those
positions (excluding the amount by which options are "in-the-money") exceeds
5% of the liquidation value of the Portfolio's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the
Portfolio has entered into;
(5) Borrow money except for temporary or emergency purposes (other than
to meet redemptions). While borrowings exceed 5% of the Portfolio's assets,
the Portfolio will not make any additional investments;
(6) Invest more than 10% of its total assets in shares of other
investment companies and may not invest more than 5% of its total assets in
any one investment company or acquire more than 3% of the outstanding voting
securities of any one investment company;
(7) Purchase securities on margin, provided that each Portfolio may
obtain short-term credits as may be necessary for the clearance of purchases
and sales of securities, and further provided that the Portfolio may make
margin deposits in connection with its use of financial options and futures,
forward and spot currency contracts, swap transactions and other financial
contracts or derivative instruments; or
(8) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
Investors should refer to the Prospectus for further information with respect to
the investment objective of each Feeder Fund, which may not be changed without
the approval of Fund shareholders, and its corresponding Portfolio's investment
objective, which may be changed without the approval of its shareholders, and
other investment policies, techniques and limitations, which may or may not be
changed without shareholder approval.
HEALTH CARE FUND
The Health Care Fund has adopted the following investment limitations as
fundamental policies, which may not be changed without a Required Vote.
The Health Care Fund may not:
(1) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
the Health Care Fund may exercise rights under agreements relating to such
securities, including the right to enforce security interests and to hold
real estate acquired by reason of such enforcement until that real estate
can be liquidated in an orderly manner;
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(2) Engage in the business of underwriting securities of other issuers,
except to the extent that the Health Care Fund might be considered an
underwriter under the federal securities laws in connection with its
disposition of portfolio securities;
(3) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this limitation, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances
or similar instruments will not be considered the making of a loan;
(4) Purchase or sell physical commodities, but the Health Care Fund may
purchase, sell or enter into financial options and futures, forward and spot
currency contracts, swap transactions and other financial contracts or
derivative instruments;
(5) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Health Care Fund's
total assets (including the amount borrowed but reduced by any liabilities
not constituting borrowings) at the time of the borrowing, except that the
Health Care Fund may borrow up to an additional 5% of its total assets (not
including the amount borrowed) for temporary or emergency purposes; or
(6) Purchase securities of any one issuer if, as a result, more than 5%
of the Health Care Fund's total assets would be invested in securities of
that issuer or the Health Care Fund would own or hold more than 10% of the
outstanding voting securities of that issuer, except that up to 25% of the
Health Care Fund's total assets may be invested without regard to this
limitation, and except that this limitation does not apply to securities
issued or guaranteed by the U.S. government, its agencies or
instrumentalities or to securities issued by other investment companies.
Notwithstanding any other investment policy of the Health Care Fund, the Health
Care Fund may invest all of its investable assets (cash, securities and
receivables related to securities) in an open-end management investment company
having substantially the same investment objective, policies and limitations as
the Fund.
The following investment policies of the Health Care Fund are not fundamental
policies and may be changed by vote of the Health Care Fund's Board of Trustees
without shareholder approval. The Health Care Fund will not:
(1) Purchase securities for which there is no readily available market,
or enter into repurchase agreements or purchase time deposits maturing in
more than seven days, or purchase OTC options or hold assets set aside to
cover OTC options written by the Health Care Fund, if immediately after and
as a result, the value of such securities would exceed, in the aggregate,
15% of the Health Care Fund's net assets;
(2) Purchase securities on margin, provided that the Health Care Fund
may obtain short-term credits as may be necessary for the clearance of
purchases and sales of securities, and further provided that the Health Care
Fund may make margin deposits in connection with its use of financial
options and futures, forward and spot currency contracts, swap transactions
and other financial contracts or derivative instruments; or
(3) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities; or
(4) Borrow money except for temporary or emergency purposes (other than
to meet redemptions). While borrowings exceed 5% of the Health Care Fund's
total assets it will not make any additional investments.
Investors should refer to the Prospectus for further information with respect to
the Health Care Fund's investment objective, which may not be changed without
the approval of its shareholders, and other investment policies, techniques and
limitations, which may be changed without shareholder approval.
TELECOMMUNICATIONS FUND
The Telecommunications Fund has adopted the following investment limitations as
fundamental policies, which may not be changed without a Required Vote.
The Telecommunications Fund may not:
(1) Purchase or sell real estate, except that investments in securities
of issuers that invest in real estate and investments in mortgage-backed
securities, mortgage participations or other instruments supported by
interests in real estate are not subject to this limitation, and except that
the Telecommunications Fund may exercise rights under agreements relating to
such securities, including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement until that real
estate can be liquidated in an orderly manner;
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(2) Purchase or sell physical commodities, but the Telecommunications
Fund may purchase, sell or enter into financial options and futures, forward
and spot currency contracts, swap transactions and other financial contracts
or derivative instruments;
(3) Engage in the business of underwriting securities of other issuers,
except to the extent that the Telecommunications Fund might be considered an
underwriter under the federal securities laws in connection with its
disposition of portfolio securities;
(4) Make loans, except through loans of portfolio securities or through
repurchase agreements, provided that for purposes of this limitation, the
acquisition of bonds, debentures, other debt securities or instruments, or
participations or other interests therein and investments in government
obligations, commercial paper, certificates of deposit, bankers' acceptances
or similar instruments will not be considered the making of a loan;
(5) Issue senior securities or borrow money, except as permitted under
the 1940 Act and then not in excess of 33 1/3% of the Telecommunications
Fund's total assets (including the amount borrowed but reduced by any
liabilities not constituting borrowings) at the time of the borrowing,
except that the Telecommunications Fund may borrow up to an additional 5% of
its total assets (not including the amount borrowed) for temporary or
emergency purposes; or
(6) Purchase securities of any one issuer if, as a result, more than 5%
of the Telecommunications Fund's total assets would be invested in
securities of that issuer or the Telecommunications Fund would own or hold
more than 10% of the outstanding voting securities of that issuer, except
that up to 25% of the Telecommunications Fund's total assets may be invested
without regard to this limitation, and except that this limitation does not
apply to securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities or to securities issued by other investment
companies.
Notwithstanding any other investment policy of the Telecommunications Fund, the
Telecommunications Fund may invest all of its investable assets (cash,
securities and receivables related to securities) in an open-end management
investment company having substantially the same investment objective, policies
and limitations as the Fund.
The following investment policies of the Telecommunications Fund are not
fundamental policies and may be changed by vote of the Company's Board of
Trustees without shareholder approval. The Telecommunications Fund may not:
(1) Invest in securities of an issuer if the investment would cause the
Telecommunications Fund to own more than 10% of any class of securities of
any one issuer;
(2) Invest in companies for the purpose of exercising control or
management;
(3) Invest more than 15% of its net assets in illiquid securities,
including securities that are illiquid by virtue of the absence of a readily
available market;
(4) Enter into a futures contract, an option on a futures contract, or
an option on foreign currency traded on a CFTC-regulated exchange, in each
case other than for BONA FIDE hedging purposes (as defined by the CFTC), if
the aggregate initial margin and premiums required to establish all of those
positions (excluding the amount by which options are "in-the-money") exceeds
5% of the liquidation value of the Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund
has entered into;
(5) Borrow money except for temporary or emergency purposes (other than
to meet redemptions). While borrowings exceed 5% of the Telecommunications
Fund's total assets, it will not make any additional investments;
(6) Purchase securities on margin, provided that the Telecommunications
Fund may obtain short-term credits as may be necessary for the clearance of
purchases and sales of securities, and further provided that the
Telecommunications Fund may make margin deposits in connection with its use
of financial options and futures, forward and spot currency contracts, swap
transactions and other financial contracts or derivative instruments; or
(7) Mortgage, pledge, or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
Investors should refer to the Prospectus for further information with respect to
the Telecommunications Fund's investment objective, which may not be changed
without the approval of shareholders, and other investment policies, techniques
and limitations, which may be changed without shareholder approval.
Statement of Additional Information Page 25
<PAGE>
AIM NEW DIMENSION FUND
If a percentage restriction on investment or utilization of assets in an
investment policy or restriction is adhered to at the time an investment is
made, a later change in percentage ownership of a security or kind of securities
resulting from changing market values or a similar type of event will not be
considered a violation of a Fund's or Portfolio's investment policies or
restrictions. A Fund or Portfolio may exchange securities, exercise conversion
or subscription rights, warrants or other rights to purchase common stock or
other equity securities and may hold, except to the extent limited by the 1940
Act, any such securities so acquired without regard to the Fund's or Portfolio's
investment policies and restrictions. The original cost of the securities so
acquired will be included in any subsequent determination of a Fund's or
Portfolio's compliance with the investment percentage limitations referred to
above and in the Prospectus.
- --------------------------------------------------------------------------------
EXECUTION OF PORTFOLIO
TRANSACTIONS
- --------------------------------------------------------------------------------
All orders for the purchase or sale of portfolio securities for the Fund
(normally shares of the Underlying Theme Funds) are placed on behalf of the Fund
by the Sub-adviser. As stated in the Prospectus, the Sub-adviser will exercise
no discretion in investing the assets of the Fund other than to make investments
in money market instruments and to rebalance the percentage of the Fund's assets
in each Underlying Theme Fund.
Subject to policies established by the applicable Board, the Sub-adviser is
responsible for the execution of each Underlying Theme Portfolio's securities
transactions and the selection of broker/dealers who execute such transactions
on behalf of each Underlying Theme Portfolio. In executing transactions, the
Sub-adviser seeks the best net results for each Underlying Theme Portfolio,
taking into account such factors as the price (including the applicable
brokerage commission or dealer spread), size of the order, difficulty of
execution and operational facilities of the firm involved. Although the Sub-
adviser generally seeks reasonably competitive commission rates and spreads,
payment of the lowest commission or spread is not necessarily consistent with
the best net results. While each Underlying Theme Portfolio may engage in soft
dollar arrangements for research services, as described below, it has no
obligation to deal with any broker/dealer or group of broker/dealers in the
execution of portfolio transactions.
Consistent with the interests of each Underlying Theme Portfolio, the
Sub-adviser may select broker/dealers to execute that Underlying Theme
Portfolio's portfolio transaction on the basis of the research and brokerage
services they provide to the Sub-adviser for its use in managing that Underlying
Theme Portfolio and its other advisory accounts. Such services may include
furnishing analyses, reports and information concerning issuers, industries,
securities, geographic regions, economic factors and trends, portfolio strategy,
and performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement).
Research and brokerage services received from such broker are in addition to,
and not in lieu of, the services required to be performed by the Sub-adviser
under investment management and administration contracts. A commission paid to
such broker may be higher than that which another qualified broker would have
charged for effecting the same transaction, provided that the Sub-adviser
determines in good faith that such commission is reasonable in terms either of
that particular transaction or the overall responsibility of the Sub-adviser to
the Underlying Theme Portfolio and its other clients and that the total
commissions paid by that Underlying Theme Portfolio will be reasonable in
relation to the benefits it receive over the long term. Research services may
also be received from dealers who execute portfolio transactions in OTC markets.
The Sub-adviser may allocate brokerage transactions to broker/dealers who have
entered into arrangements under which the broker/dealer allocates a portion of
the commissions paid by an Underlying Theme Portfolio toward payment of its
expenses, such as custodian fees.
Investment decisions for an Underlying Theme Portfolio and for other investment
accounts managed by the Sub-adviser are made independently of each other in
light of differing conditions. However, the same investment decision
occasionally may be made for two or more of such accounts, including an
Underlying Theme Portfolio. In such cases, simultaneous transactions may occur.
Purchases or sales are then allocated as to price or amount in a manner deemed
fair and equitable to all accounts involved. While in some cases this practice
could have a detrimental effect upon the price or value of the security as far
as an Underlying Theme Portfolio is concerned, in other cases the Sub-adviser
believes that coordination and the ability to participate in volume transactions
will be beneficial to that Portfolio.
Statement of Additional Information Page 26
<PAGE>
AIM NEW DIMENSION FUND
Under a policy adopted by the applicable Board, and subject to the policy of
obtaining the best net results, the Sub-adviser may consider a broker/dealer's
sale of the shares of the Underlying Theme Funds and the other portfolios for
which AIM or the Sub-adviser serves as investment manager or administrator in
selecting broker/dealers for the execution of portfolio transactions. This
policy does not imply a commitment to execute portfolio transactions through all
broker/dealers that sell shares of the Underlying Theme Funds and such other
portfolios.
Each Underlying Theme Portfolio contemplates purchasing most foreign equity
securities in OTC markets or stock exchanges located in the countries in which
the respective principal offices of the issuers of the various securities are
located, if that is the best available market. The fixed commissions paid in
connection with most such foreign stock transactions generally are higher than
negotiated commissions on U.S. transactions. There generally is less government
supervision and regulation of foreign stock exchanges and brokers than in the
United States. Foreign security settlements may in some instances be subject to
delays and related administrative uncertainties.
Foreign equity securities may be held by an Underlying Theme Portfolio in the
form of ADRs, ADSs, EDRs, CDRs or securities convertible into foreign equity
securities. ADRs, ADSs, EDRs and CDRs may be listed on stock exchanges, or
traded in the OTC markets in the United States or Europe, as the case may be.
ADRs, like other securities traded in the United States, will be subject to
negotiated commission rates. The foreign and domestic debt securities and money
market instruments in which an Underlying Theme Portfolio may invest are
generally traded in the OTC markets.
An Underlying Theme Portfolio does not have any obligation to deal with any
broker/dealer or group of broker/dealers in the execution of securities
transactions. Each Underlying Theme Portfolio contemplates that, consistent with
the policy of obtaining the best net results, brokerage transactions may be
conducted through certain companies that are affiliated with AIM or the
Sub-adviser. Both Boards have adopted procedures in conformity with Rule 17e-1
under the 1940 Act to ensure that all brokerage commissions paid to such
affiliates are reasonable and fair in the context of the market in which they
are operating. Any such transactions will be effected and related compensation
paid only in accordance with applicable SEC regulations.
Statement of Additional Information Page 27
<PAGE>
AIM NEW DIMENSION FUND
TRUSTEES AND EXECUTIVE
OFFICERS
- --------------------------------------------------------------------------------
The Company's Trustees and Executive Officers are listed below.
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
COMPANY AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- --------------------------------------- ------------------------------------------------------------------------------------------
<S> <C>
William J. Guilfoyle*, 39 Mr. Guilfoyle is President, GT Global, Inc. ("GT Global") since 1995; Director, GT Global
Trustee, Chairman of the Board and since 1991; Senior Vice President and Director of Sales and Marketing, GT Global from May
President 1992 to April 1995; Vice President and Director of Marketing, GT Global from 1987 to 1992;
50 California Street Director, Liechtenstein Global Trust AG (holding company of the various international GT
San Francisco, CA 94111 companies) Advisory Board since January 1996; Director, G.T. Global Insurance Agency
("G.T. Insurance") since 1996; President and Chief Executive Officer, G.T. Insurance since
1995; Senior Vice President and Director, Sales and Marketing, G.T. Insurance from April
1995 to November 1995; Senior Vice President, Retail Marketing, G.T. Insurance from 1992
to 1993. Mr. Guilfoyle is also a trustee of each of the other investment companies
registered under the 1940 Act that is sub-advised or sub-administered by the Sub-adviser.
C. Derek Anderson, 57 Mr. Anderson is President, Plantagenet Capital Management, LLC (an investment
Trustee partnership); Chief Executive Officer, Plantagenet Holdings, Ltd. (an investment banking
220 Sansome Street firm); Director, Anderson Capital Management, Inc. since 1988; Director, PremiumWear, Inc.
Suite 400 (formerly Munsingwear, Inc.) (a casual apparel company) and Director, "R" Homes, Inc. and
San Francisco, CA 94104 various other companies. Mr. Anderson is also a trustee of each of the other investment
companies registered under the 1940 Act that is sub-advised or sub-administered by the
Sub-adviser.
Frank S. Bayley, 58 Mr. Bayley is a partner of the law firm of Baker & McKenzie, and serves as a Director and
Trustee Chairman of C.D. Stimson Company (a private investment company). Mr. Bayley is also a
Two Embarcadero Center trustee of each of the other investment companies registered under the 1940 Act that is
Suite 2400 sub-advised or sub- administered by the Sub-adviser.
San Francisco, CA 94111
Arthur C. Patterson, 54 Mr. Patterson is Managing Partner of Accel Partners (a venture capital firm). He also
Trustee serves as a director of Viasoft and PageMart, Inc. (both public software companies), as
428 University Avenue well as several other privately held software and communications companies. Mr. Patterson
Palo Alto, CA 94301 is also a trustee of each of the other investment companies registered under the 1940 Act
that is sub-advised or sub-administered by the Sub-adviser.
Ruth H. Quigley, 63 Miss Quigley is a private investor. From 1984 to 1986, she was President of Quigley
Trustee Friedlander & Co., Inc. (a financial advisory services firm). Miss Quigley is also a
1055 California Street trustee of each of the other investment companies registered under the 1940 Act that is
San Francisco, CA 94108 sub-advised or sub-administered by the Sub-adviser.
</TABLE>
<TABLE>
<S> <C>
John J. Arthur+, 53 Director, Senior Vice President and Treasurer, A I M Advisors, Inc.;
Vice President Vice President and Treasurer, A I M Management Group Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc.
and Fund Management Company.
</TABLE>
- --------------
* Mr. Guilfolye is an "interested person" of the Company as defined by the 1940
Act due to his affiliation with the Sub-adviser.
+ Mr. Arthur and Ms. Relihan are married to each other.
Statement of Additional Information Page 28
<PAGE>
AIM NEW DIMENSION FUND
<TABLE>
<CAPTION>
NAME, POSITION(S) WITH THE PRINCIPAL OCCUPATIONS AND BUSINESS
COMPANY AND ADDRESS EXPERIENCE FOR PAST 5 YEARS
- -------------------------------- ------------------------------------------------------------------------
<S> <C> <C>
Kenneth W. Chancey, 52 Senior Vice President -- Mutual Fund Accounting, the Sub-adviser since 1992; Vice
Vice President and President -- Mutual Fund Accounting, the Sub-adviser from 1992-1997.
Principal Accounting Officer
50 California Street
San Francisco, CA 94111
Melville B. Cox, 54 Vice President and Chief Compliance Officer, A I M Advisors, Inc., A I M Capital
Vice President Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc. and Fund Management
Company.
Gary T. Crum, 50 Director and President, A I M Capital Management, Inc.; Director and Senior Vice
Vice President President, A I M Management Group Inc. and A I M Advisors, Inc.; and Director, A I M
Distributors, Inc. and AMVESCAP PLC.
Robert H. Graham, 51 Director, President and Chief Executive Officer, A I M Management Group Inc.; Director and
Vice President President, A I M Advisors, Inc.; Director and Senior Vice President, A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund Services, Inc. and Fund Management
Company; Director, AMVESCAP PLC; Chairman of the Board of Directors and President, INVESCO
Holdings Canada Inc.; and Director, AIM Funds Group Canada Inc. and INVESCO G.P. Canada
Inc.
Helge K. Lee, 52 Chief Legal and Compliance Officer -- North America, the Sub-adviser since October 1997;
Vice President Executive Vice President of the Asset Management Division of Liechtenstein Global Trust
50 California Street since October 1996; Senior Vice President, General Counsel and Secretary of LGT Asset
San Francisco, CA 94111 Management, Inc., INVESCO (NY), Inc., GT Global, GT Global Investor Services, Inc. and
G.T. Insurance from May 1994 to October 1996; Senior Vice President, General Counsel and
Secretary of Strong/Corneliuson Management, Inc. and Secretary of each of the Strong Funds
from October 1991 through May 1994.
Carol F. Relihan+, 43 Director, Senior Vice President, General Counsel and Secretary, A I M Advisors, Inc.; Vice
Vice President President, General Counsel and Secretary, A I M Management Group Inc.; Director, Vice
President and General Counsel, Fund Management Company; Vice President and General
Counsel, A I M Fund Services, Inc.; and Vice President, A I M Capital Management, Inc. and
A I M Distributors, Inc.
</TABLE>
<TABLE>
<S> <C>
Dana R. Sutton, 39 Vice President and Fund Controller, A I M Advisors, Inc.; and Assistant
Vice President and Assistant Vice President and Assistant Treasurer, Fund Management Company.
Treasurer
</TABLE>
------------------------
The Board of Trustees has a Nominating and Audit Committee, comprised of Miss
Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible for
nominating persons to serve as Trustees, reviewing audits of the Company and its
funds and recommending firms to serve as independent auditors of the Company.
Each of the Trustees and Officers of the Company is also a Trustee and Officer
of AIM Investment Portfolios, AIM Floating Rate Fund, AIM Investment Funds, AIM
Growth Series, AIM Eastern Europe Fund, GT Global Variable Investment Trust, GT
Global Variable Investment Series, Global Investment Portfolio, Growth
Portfolio, Floating Rate Portfolio and Global High Income Portfolio, which also
are registered investment companies advised by AIM and sub-advised by the
Sub-adviser or an affiliate thereof. Each Trustee and Officer serves in total as
a Trustee and Officer, respectively, of 12 registered investment companies with
47 series managed or administered by AIM and sub-advised or sub-administered by
the Sub-adviser. Each Trustee who is not a director, officer or employee of the
Sub-adviser or any other affiliated company is paid aggregate fees of $5,000 a
year, plus $300 per Fund for each meeting of the Board attended, and reimbursed
travel and other expenses incurred in connection with attendance at such
meetings. Other Trustees and Officers receive no compensation or expense
reimbursement from the Company. As of May 7, 1998, the Officers and Trustees and
their families as a group owned in the aggregate beneficially or of record less
than 1% of the shares of the Fund.
- --------------
+ Mr. Arthur and Ms. Relihan are married to each other.
Statement of Additional Information Page 29
<PAGE>
AIM NEW DIMENSION FUND
MANAGEMENT
- --------------------------------------------------------------------------------
MANAGEMENT SERVICES RELATING TO THE FUND
AIM serves as the investment manager and administrator to the Fund under an
investment management and administration contract ("Management Contract")
between the Trust and AIM. The Sub-adviser serves as the sub-adviser and sub-
administrator to the Fund under a Sub-Advisory and Sub-Administration Contract
between AIM and the Sub-adviser ("Sub-Management Contract," and together with
the Management Contract, the "Management Contracts"). Neither AIM nor the
Sub-adviser receives a fee for providing management services to the Fund.
DISTRIBUTION SERVICES RELATING TO THE FUND
The Fund's Advisor Class shares are offered continuously through the Fund's
principal underwriter and distributor, AIM Distributors, on a "best efforts"
basis pursuant to a distribution contract between the Company and AIM
Distributors without a front-end sales charge or contingent deferred sales
charge.
TRANSFER AGENCY AND ACCOUNTING AGENCY SERVICES
The Transfer Agent has been retained by the Fund to perform shareholder
servicing, reporting and general transfer agent functions for it. For these
services, the Transfer Agent receives an annual maintenance fee of $17.50 per
account, a new account fee of $4.00 per account, a per transaction fee of $1.75
for all transactions other than exchanges and a per exchange fee of $2.25. The
Transfer Agent is also reimbursed for its out-of-pocket expenses for such items
as postage, forms, telephone charges, stationery and office supplies. The
Sub-adviser also serves as the Fund's pricing and accounting agent. See
"Additional Information -- Special Servicing Agreement."
- --------------------------------------------------------------------------------
VALUATION OF FUND SHARES
- --------------------------------------------------------------------------------
As described in the Prospectus, the Fund's net asset value per share for each
class of shares is determined each day on which the New York Stock Exchange
("NYSE") is open for business ("Business Day") as of the close of regular
trading on the NYSE (currently 4:00 p.m. Eastern Time, unless weather, equipment
failure or other factors contribute to an earlier closing time). Currently, the
NYSE is closed on weekends and on certain days relating to the following
holidays: New Year's Day, Martin Luther King Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The value of the shares of the Underlying Theme Funds will be their net asset
value at the time the net asset value of the Fund is determined.
- --------------------------------------------------------------------------------
INFORMATION RELATING TO SALES
AND REDEMPTIONS
- --------------------------------------------------------------------------------
PAYMENT AND TERMS OF OFFERING
Payment for Advisor Class shares of the Fund purchased should accompany the
purchase order, or funds should be wired to the Transfer Agent as described in
the Prospectus. Payment for Fund shares, other than by wire transfer, must be
made by check or money order drawn on a U.S. bank. Checks or money orders must
be payable in U.S. dollars.
Statement of Additional Information Page 30
<PAGE>
AIM NEW DIMENSION FUND
As a condition of this offering, if an order to purchase Advisor Class shares is
canceled due to nonpayment (for example, because a check is returned for
insufficient funds), the person who made the order will be responsible for any
loss incurred by the Underlying Theme Fund by reason of such cancellation, and
if such purchaser is a shareholder, the Fund shall have the authority as agent
of the shareholder to redeem shares in his or her account at their then-current
net asset value per share to reimburse the Fund for the loss incurred. Investors
whose purchase orders have been canceled due to nonpayment may be prohibited
from placing future orders.
The Fund reserves the right at any time to waive or increase the minimum
requirements applicable to initial or subsequent investments with respect to any
person or class of persons. An order to purchase shares is not binding on the
Fund until it has been confirmed in writing by the Transfer Agent (or other
arrangements made with the Fund, in the case of orders utilizing wire transfer
of funds, as described above) and payment has been received. To protect existing
shareholders, the Fund reserves the right to reject any offer for a purchase of
shares by any individual.
INDIVIDUAL RETIREMENT ACCOUNTS ("IRAs") AND OTHER TAX-DEFERRED PLANS
IRAs: If you have earned income from employment (including self-employment), you
can contribute each year to an IRA up to the lesser of (1) $2,000 for yourself
or $4,000 for you and your spouse, regardless of whether your spouse is
employed, or (2) 100% of compensation. Some individuals may be able to take an
income tax deduction for the contribution. Regular contributions may not be made
for the year you become 70 1/2 or thereafter. Unless your and your spouse's
earnings exceed a certain level, you also may establish an "education IRA"
and/or a "Roth IRA." Although contributions to these new types of IRAs are
nondeductible, withdrawals from them will be tax-free under certain
circumstances. Please consult your tax advisor for more information. IRA
applications are available from brokers or AIM Distributors.
ROLLOVER IRAs: Individuals who receive distributions from qualified retirement
plans (other than required distributions) and who wish to keep their savings
growing tax-deferred can roll over (or make a direct transfer of) their
distribution to a Rollover IRA. These accounts can also receive rollovers or
transfers from an existing IRA. If an "eligible rollover distribution" from a
qualified employer-sponsored retirement plan is not directly rolled over to an
IRA (or certain qualified plans), withholding at the rate of 20% will be
required for federal income tax purposes. A distribution from a qualified plan
that is not an "eligible rollover distribution," including a distribution that
is one of a series of substantially equal periodic payments, generally is
subject to regular wage withholding or withholding at the rate of 10% (depending
on the type and amount of the distribution), unless you elect not to have any
withholding apply. Please consult your tax advisor for more information.
SEP-IRAs: Simplified employee pension plans ("SEPs" or "SEP-IRAs") provide
self-employed individuals (and any eligible employees) with benefits similar to
Keogh plans (i.e., self-employed individual retirement plans) or Code Section
401(k) plans, but with fewer administrative requirements and therefore potential
lower annual administration expenses.
CODE SECTION 403(b)(7) CUSTODIAL ACCOUNTS: Employees of public schools and most
other tax-exempt organizations can make pre-tax salary reduction contributions
to these accounts.
PROFIT-SHARING (INCLUDING SECTION 401(k)) AND MONEY PURCHASE PENSION
PLANS: Corporations and other employers can sponsor these qualified defined
contribution plans for their employees. A Section 401(k) plan, a type of
profit-sharing plan, additionally permits the eligible, participating employees
to make pre-tax salary reduction contributions to the plan (up to certain
limits).
SIMPLE PLANS: Employers with no more than 100 employees that do not maintain
another retirement plan may establish a Savings Incentive Match Plan for
Employees ("SIMPLE") either as separate IRAs or as part of a Section 401(k)
plan. SIMPLEs are not subject to the complicated nondiscrimination rules that
generally apply to qualified retirement plans.
EXCHANGES
Advisor Class shares of the Fund may be exchanged for Advisor Class shares of
other AIM/GT Funds, based on their respective net asset values without
imposition of any sales charges provided that the registration remains
identical. Advisor Class shares of the Fund may be exchanged only for Advisor
Class shares of other AIM/GT Funds. The exchange privilege is not an option or
right to purchase shares but is permitted under the current policies of the
respective AIM/GT Funds. The privilege may be discontinued or changed at any
time by any of the funds upon sixty days prior written notice to the
shareholders of such fund and is available only in states where the exchange may
be made legally. Before purchasing
Statement of Additional Information Page 31
<PAGE>
AIM NEW DIMENSION FUND
shares through the exercise of the exchange privilege, a shareholder should
obtain and read a copy of the prospectus of the fund to be purchased and should
consider the investment objective(s) of the fund.
TELEPHONE REDEMPTIONS
A corporation or partnership wishing to utilize telephone redemption services
must submit a "Corporate Resolution" or "Certificate of Partnership" indicating
the names, titles and the required number of signatures of persons authorized to
act on its behalf. The certificate must be signed by a duly authorized
officer(s), and, in the case of a corporation, the corporate seal must be
affixed. All shareholders may request that redemption proceeds be transmitted by
bank wire upon request directly to the shareholder's predesignated account at a
domestic bank or savings institution if the proceeds are at least $1,000. Costs
in connection with the administration of this service, including wire charges,
currently are borne by the Fund. Proceeds of less than $1,000 will be mailed to
the shareholder's registered address of record. The Fund and the Transfer Agent
reserve the right to refuse any telephone instructions and may discontinue the
aforementioned redemption options upon thirty days' written notice.
SUSPENSION OF REDEMPTION PRIVILEGES
The Fund may suspend redemption privileges or postpone the date of payment for
more than seven days after a redemption order is received during any period (1)
when the NYSE is closed other than customary weekend and holiday closings, or
trading on the NYSE is restricted as directed by the SEC, (2) when an emergency
exists, as defined by the SEC, which would prohibit the Fund or the Underlying
Theme Portfolios from disposing of portfolio securities owned by them or in
fairly determining the value of its assets, or (3) as the SEC may otherwise
permit.
REDEMPTIONS IN KIND
It is possible that conditions may arise in the future that would, in the
opinion of the Trust's Board of Trustees, make it undesirable for the Fund to
pay for all redemptions in cash. In such cases, the Board may authorize payment
to be made in portfolio securities or other property of the Fund, so-called
"redemptions in kind." Payment of redemptions in kind will be made in readily
marketable securities. Such securities would be valued at the same value
assigned to them in computing the net asset value per share. Shareholders
receiving such securities would incur brokerage costs in selling any such
securities so received. However, despite the foregoing, the Trust has filed with
the SEC an election pursuant to Rule 18f-1 under the 1940 Act. This means that
the Fund will pay in cash all requests for redemption made by any shareholder of
record, limited in amount with respect to each shareholder during any ninety-day
period to the lesser of $250,000 or 1% of the net asset value of the Fund at the
beginning of such period. This election will be irrevocable so long as Rule
18f-1 remains in effect, unless the SEC by order upon application permits the
withdrawal of such election.
- --------------------------------------------------------------------------------
TAXES
- --------------------------------------------------------------------------------
TAXATION OF THE FUND
To continue to qualify for treatment as a regulated investment company ("RIC")
under the Code, the Fund must distribute to its shareholders for each taxable
year at least 90% of its investment company taxable income (consisting generally
of net investment income and net short-term capital gain) ("Distribution
Requirement") and must meet several additional requirements. These requirements
include the following: (1) the Fund must derive at least 90% of its gross income
each taxable year from dividends, interest, payments with respect to securities
loans and gains from the sale or other disposition of securities, or other
income derived with respect to its business of investing in securities; (2) at
the close of each quarter of the Fund's taxable year, at least 50% of the value
of its total assets must be represented by cash and cash items, U.S. government
securities, securities of other RICs (including the Underlying Theme Funds) and
other securities, with these other securities limited, in respect of any one
issuer, to an amount that does not exceed 5% of the value of the Fund's total
assets and that does not represent more than 10% of the issuer's outstanding
voting securities; and (3) at the close of each quarter of the Fund's taxable
year, not more than 25% of the value of its total assets may be invested in
securities (other than U.S. government securities or the securities of other
RICs, including the Underlying Theme Funds) of any one issuer.
The Fund will invest its assets in shares of the Underlying Theme Funds, cash
and money market instruments. Accordingly, the Fund's income will consist of
distributions from the Underlying Theme Funds, net gains realized from the
disposition of Underlying Theme Fund shares and interest. If an Underlying Theme
Fund qualifies for treatment as a RIC
Statement of Additional Information Page 32
<PAGE>
AIM NEW DIMENSION FUND
under the Code -- each has done so for its past taxable years and intends to
continue to do so for its current and future taxable years -- (1) dividends paid
to the Fund from the Underlying Theme Fund's investment company taxable income
(which may include net gains from certain foreign currency transactions) will be
taxable to the Fund as ordinary income to the extent of the Underlying Theme
Fund's earnings and profits and (2) distributions paid to the Fund from the
Underlying Theme Fund's net capital gain (the excess of net long-term capital
gain over net short-term capital loss), when designated as such, will be taxable
to the Fund as long-term capital gains, regardless of how long the Fund has held
the Underlying Theme Fund's shares. If shares of an Underlying Theme Fund are
purchased within 30 days before or after redeeming at a loss, other shares of
that Underlying Theme Fund (whether pursuant to a rebalancing of the Fund's
portfolio or otherwise) all or a part of the loss will not be deductible by the
Fund and instead will increase its basis for the newly purchased shares.
Although an Underlying Theme Fund will be eligible to elect to "pass-through" to
its shareholders (including the Fund) the benefit of the foreign tax credit with
respect to any foreign and U.S. possessions income taxes it pays if more than
50% in the value of its total assets at the close of any taxable year consists
of securities of foreign corporations, the Fund will not qualify to pass that
benefit through to its shareholders because of its inability to satisfy that
asset test.
The Fund will be subject to a nondeductible 4% excise tax to the extent it fails
to distribute by the end of any calendar year substantially all of its ordinary
income for that year and capital gain net income for the one-year period ending
on October 31 of that year, plus certain other amounts.
TAXATION OF THE FUND'S SHAREHOLDERS
Dividends and other distributions declared by the Fund, and payable to
shareholders of record as of a date, in October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during the following January. Accordingly, those distributions will be
taxed to shareholders for the year in which that December 31 falls.
A portion of the dividends from the Fund's investment company taxable income
(whether paid in cash or reinvested in additional shares) may be eligible for
the dividends-received deduction allowed to corporations. The eligible portion
may not exceed the total of the Fund's share of the aggregate dividends received
by each Underlying Theme Fund from U.S. corporations. However, dividends
received by a corporate shareholder and deducted by it pursuant to the
dividends-received deduction may be subject indirectly to the alternative
minimum tax.
If Fund shares are sold at a loss after being held for six months or less, the
loss will be treated as long-term, instead of short-term, capital loss to the
extent of any capital gain distributions received on those shares. Investors
also should be aware that if shares are purchased shortly before the record date
for any dividend or other distribution, the shareholder will pay full price for
the shares and receive some portion of the price back as a taxable distribution.
Dividends paid by the Fund to a shareholder who, as to the United States, is a
nonresident alien individual, or nonresident alien fiduciary of a trust or
estate, foreign corporation or foreign partnership ("foreign shareholder")
generally will be subject to U.S. withholding tax (at a rate of 30% or lower
treaty rate). Withholding will not apply, however, to a dividend paid by the
Fund to a foreign shareholder that is "effectively connected with the conduct of
An U.S. trade or business," in which case the reporting and withholding
requirements applicable to domestic shareholders will apply. A distribution of
net capital gain by the Fund to a foreign shareholder generally will be subject
to U.S. federal income tax (at the rates applicable to domestic persons) only if
the distribution is "effectively connected" or the foreign shareholder is
treated as a resident alien individual for federal income tax purposes.
The foregoing is a general and abbreviated summary of certain federal tax
considerations affecting the Fund and its shareholders. Investors are urged to
consult their own tax advisers for more detailed information and for information
regarding any foreign, state and local taxes applicable to distributions
received from the Fund.
Statement of Additional Information Page 33
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AIM NEW DIMENSION FUND
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
SPECIAL SERVICING AGREEMENT
Subject to the receipt of an exemptive order from the Securities and Exchange
Commission, a Special Servicing Agreement (the "Service Agreement") will be
entered into among AIM, the Manager, the Underlying Theme Funds, GT Global
Investor Services, Inc., and the Trust. The Service Agreement will provide that,
if the officers of any Underlying Theme Fund, at the direction of the Board of
Trustees, determine that the aggregate expenses of the Fund are less than the
estimated savings to the Underlying Theme Fund from the operation of the Fund,
the Underlying Theme Fund will bear those expenses in proportion to the average
daily value of its shares owned by the Fund and/or the number of shareholder
accounts at the Fund. No Underlying Theme Fund will bear such expenses in excess
of the estimated savings to it. Such savings are expected to result primarily
from the elimination of numerous separate shareholder accounts which are or
would have been invested directly in the Underlying Theme Funds and the
resulting reduction in shareholder servicing costs. In this regard, the
shareholder servicing costs to any Underlying Theme Fund for servicing one
account registered to the Trust would be significantly less than the cost to
that same Underlying Theme Fund of servicing the same pool of assets contributed
in the typical fashion by a large group of individual shareholders owning small
accounts in each Underlying Theme Fund. If the Fund's costs exceed the aggregate
estimated savings to the Underlying Theme Funds, the Manager will pay the excess
on behalf of the Fund.
Rule 12b-1 distribution and service fees will not be paid in accordance with the
Service Agreement. Nor will certain non-recurring and extraordinary expenses be
payable in accordance therewith including: the fees and costs of actions, suits
or proceedings and any penalties or damages in connection therewith, to which
the Trust and/or the Fund may incur directly, or may incur as a result of its
legal obligation to provide indemnification to its officers, trustees and
agents; the fees and costs of any governmental investigation and any fines or
penalties in connection therewith; and any federal, state or local tax, or
related interest penalties or additions to tax, incurred, for example, as a
result of the Trust's failure to distribute all of its income and gains, its
failure to qualify as a RIC under the Code, or failure to timely file any
required tax returns or other filings. Amounts not payable pursuant to the
Service Agreement will be paid by the Fund.
AIM was organized in 1976, and along with its subsidiaries, manages or advises
approximately 90 investment company portfolios encompassing a broad range of
investment objectives. AIM is a direct, wholly owned subsidiary of A I M
Management Group Inc. ("AIM Management"), a holding company that has been
engaged in the financial services business since 1976. AIM is the sole
shareholder of the Funds' principal underwriter, AIM Distributors. AIM
Management is an indirect wholly owned subsidiary of AMVESCAP PLC, 11 Devonshire
Square, London, EC2M 4YR, England. AMVESCAP PLC and its subsidiaries are an
independent investment management group that has a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, acts as custodian of the Fund's and the Underlying Theme Portfolios'
assets.
INDEPENDENT ACCOUNTANTS
The Trust's independent accountants are Coopers & Lybrand L.L.P., One Post
Office Square, Boston, Massachusetts 02109. Coopers & Lybrand L.L.P. conducts
annual audits of the Fund's financial statements, assists in the preparation of
the Fund's federal and state income tax returns and consults with the Trust as
to matters of accounting, regulatory filings, and federal and state income
taxation.
The audited financial statements of the Trust included in this Statement of
Additional Information have been examined by Coopers & Lybrand L.L.P., as stated
in their opinion appearing herein, and are included in reliance upon such
opinion given upon the authority of that firm as experts in accounting and
auditing.
SHAREHOLDER LIABILITY
Under Delaware law, the shareholders of the Trust enjoy the same limitations of
liability extended to shareholders of private, for-profit corporations. There is
a remote possibility, however, that under certain circumstances shareholders of
Statement of Additional Information Page 34
<PAGE>
AIM NEW DIMENSION FUND
the Trust may be held personally liable for the Trust's obligations. However,
the Trust Agreement disclaims shareholder liability for acts or obligations of
the Trust and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by the Trust or a
trustee. The Trust Agreement provides for indemnification from the Trust
property for all losses and expenses of any shareholder held personally liable
for the Trust's obligations. Thus, the risk of a shareholder incurring financial
loss on account of such liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations and where the other party was
held not to be bound by the disclaimer.
NAME
Prior to May 29, 1998, the Fund operated under the name of GT Global New
Dimension Fund.
Statement of Additional Information Page 35
<PAGE>
AIM NEW DIMENSION FUND
INVESTMENT RESULTS
- --------------------------------------------------------------------------------
STANDARDIZED RETURNS
The Fund's "Standardized Returns," as referred to in the Prospectus (see "Other
Information -- Performance Information" in the Prospectus), is calculated
separately for Class A, Class B, Class C and Advisor Class shares of the Fund,
as follows: Standardized Return (average annual total return ("T")) is computed
by using the ending redeeming value ("ERV") of a hypothetical initial investment
of $1,000 ("P") over a period of years ("n") according to the following formula
as required by the SEC: P(1+T) to the (n)th power = ERV. The following
assumptions will be reflected in computations made in accordance with this
formula: (1) reinvestment of dividends and other distributions at net asset
value on the reinvestment date determined by the Trust's Board of Trustees; and
(2) a complete redemption at the end of any period illustrated.
NON-STANDARDIZED RETURNS
In addition to Standardized Returns, the Fund also may include in
advertisements, sales literature and shareholder reports other total return
performance data ("Non-Standardized Return"). Non-Standardized Return is
calculated separately for Class A, Class B, Class C and Advisor Class shares of
the Fund and may be calculated according to several different formulas.
Non-Standardized Returns may be quoted for the same or different time periods
for which Standardized Returns are quoted.
Average annual Non-Standardized Return ("T") is computed by using the ending
redeeming value ("ERV") of a hypothetical initial investment of $1,000 ("P")
over a period of years ("n") according to the following formula as required by
the SEC: P(1+T) = ERV. The following assumptions will be reflected in
computations made in accordance with this formula: (1) reinvestment of dividends
and other distributions at net asset value on the reinvestment date determined
by the Board; and (2) a complete redemption at the end of any period
illustrated.
The Fund's investment results will vary from time to time depending upon market
conditions, the composition of each Underlying Theme Portfolio's portfolio, and
operating expenses of the Fund, so that current or past yield or total return
should not be considered representative of what an investment in the Fund may
earn in any future period. These factors and possible differences in the methods
used in calculating investment results should be considered when comparing the
Fund's investment results with those published for other investment companies
and other investment vehicles. The Fund's results also should be considered
relative to the risks associated with the Fund's investment objective and
policies.
IMPORTANT POINTS TO NOTE ABOUT DATA RELATING TO WORLD EQUITY AND BOND MARKETS
The Fund and AIM Distributors may from time to time in advertisements, sales
literature and reports furnished to present or prospective shareholders compare
the Fund with the following, among others:
(1) The Consumer Price Index, which is a measure of the average change
in prices over time in a fixed market basket of goods and services (e.g.,
food, clothing, shelter, fuels, transportation fares, charges for doctors'
and dentists' services, prescription medicines, and other goods and services
that people buy for day-to-day living). There is inflation risk which does
not affect a security's value but its purchasing power i.e. the risk of
changing price levels in the economy that affects security prices or the
price of goods and services.
(2) Data and mutual fund rankings published or prepared by Lipper
Analytical Data Services, Inc. ("Lipper"), CDA/Wiesenberger Investment
Companies Service ("CDA/Wiesenberger"), Morningstar, Inc., Micropal, Inc.
and/or other companies that rank and/or compare mutual funds by overall
performance, investment objectives, assets, expense levels, periods of
existence and/or other factors. In this regard the Fund may be compared to
its "peer group" as defined by Lipper, CDA/Wiesenberger, Morningstar and/or
other firms, as applicable, or to specific funds or groups of funds within
or outside of such peer group. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared without
regard to tax consequences. In addition to the mutual fund rankings, the
Fund's performance may be compared to mutual fund performance indices
prepared by Lipper. Morningstar is a mutual fund rating service that also
rates mutual funds on the basis of risk-adjusted performance. Morningstar
ratings are calculated from a fund's three, five and ten year average annual
returns with appropriate fee adjustments and a risk factor that reflects
Statement of Additional Information Page 36
<PAGE>
AIM NEW DIMENSION FUND
fund performance relative to the three-month U.S. Treasury bill monthly
returns. Ten percent of the funds in an investment category receive five
stars and 22.5% receive four stars. The ratings are subject to change each
month.
(3) Bear Stearns Foreign Bond Index, which provides simple average
returns for individual countries and gross national product ("GNP") weighted
index, beginning in 1975. The returns are broken down by local market and
currency.
(4) Ibbotson Associates International Bond Index, which provides a
detailed breakdown of local market and currency returns since 1960.
(5) Standard & Poor's 500 Composite Stock Price Index, which is a widely
recognized index composed of the capitalization-weighted average of the
price of 500 of the largest publicly traded stocks in the United States.
(6) Dow Jones Industrial Average.
(7) CNBC/Financial News Composite Index.
(8) Morgan Stanley Capital International World Indices, including, among
others, the Morgan Stanley Capital International Europe, Australia, Far East
Index ("EAFE Index"). The EAFE index is an unmanaged index of more than
1,000 companies in Europe, Australia and the Far East.
(9) Morgan Stanley Capital International All Country (AC) World Index
("MSCI"). The MSCI is a broad, unmanaged index of global stock prices,
currently comprising 2500 different issuers, located in 47 countries, and
grouped in 38 separate industries.
(10) Salomon Brothers World Government Bond Index and Salomon Brothers
World Government Bond Index-Non-U.S., each of which is a widely used index
composed of world government bonds.
(11) The World Bank Publication of Trends in Developing Countries (TIDE),
which provides brief reports on most of the World Bank's borrowing members.
The World Development Report is published annually and looks at global and
regional economic trends and their implications for the developing
economies.
(12) Salomon Brothers Global Telecommunications Index, which is composed
of telecommunications companies in the developing and emerging countries.
(13) Datastream and Worldscope, each of which is an on-line database
retrieval service for information including international financial and
economic data.
(14) International Financial Statistics, which is produced by the
International Monetary Fund.
(15) Various publications and annual reports, produced by the World Bank
and its affiliates.
(16) Various publications from the International Bank for Reconstruction
and Development.
(17) Various publications produced by ratings agencies such as Moody's,
S&P and Fitch.
(18) Wilshire Associates, which is an on-line database for international
financial and economic data including performance measure for a wide range
of securities.
(19) Bank Rate National Monitor Index, which an average of the quoted
rates for 100 leading banks and thrifts in ten U.S. cities.
(20) International Finance Corporation ("IFC") Emerging Markets Data
Base, which provides detailed statistics on stock and bond markets in
developing countries.
(21) Various publications from the Organization for Economic Cooperation
and Development ("OECD").
(22) Average of savings accounts, which is a measure of all kinds of
savings deposits, including longer-term certificates. Savings accounts offer
a guaranteed rate of return on principal, but no opportunity for capital
growth. During a portion of the period, the maximum rates paid on some
savings deposits were fixed by law.
Indices, economic and financial data prepared by the research departments of
various financial organizations, such as Salomon Brothers, Inc., Lehman
Brothers, Merrill Lynch, Pierce, Fenner & Smith, Inc., Financial Research
Corporation, J.P. Morgan, Morgan Stanley, Smith Barney Shearson, S.G. Warburg,
Jardine Flemming, The Bank for International Settlements, Asian Development
Bank, Bloomberg, L.P., and Ibbotson Associates, may be used, as well as
information reported by the Federal Reserve and the respective central banks of
various nations. In addition, AIM Distributors may use
Statement of Additional Information Page 37
<PAGE>
AIM NEW DIMENSION FUND
performance rankings, ratings and commentary reported periodically in national
financial publications, including Money Magazine, Mutual Fund Magazine, Smart
Money, Global Finance, EuroMoney, Financial World, Forbes, Fortune, Business
Week, Latin Finance, the Wall Street Journal, Emerging Markets Weekly,
Kiplinger's Guide To Personal Finance, Barron's, The Financial Times, USA Today,
The New York Times, Far Eastern Economic Review, The Economist and Investors
Business Digest. The Fund may compare its performance to that of other
compilations or indices of comparable quality to those listed above and other
indices that may be developed and made available in the future.
Information relating to foreign market performance, capitalization and
diversification is based on sources believed to be reliable but may be subject
to revision and has not been independently verified by the Fund or AIM
Distributors. The authors and publishers of such material are not to be
considered as "experts" under the 1933 Act, on account of the inclusion of such
information herein.
A portion of the performance figures for each market includes the positive or
negative effects of the currency exchange rates effective at December 31 of each
year between the U.S. dollar and currency of the foreign market (e.g., Japanese
Yen, German Deutschemark, and Hong Kong Dollar). A foreign currency that has
strengthened or weakened against the U.S. dollar will positively or negatively
affect the reported returns, as the case may be.
AIM Distributors believes that this information may be useful to investors
considering whether and to what extent to diversify their investments through
the purchase of mutual funds investing in securities on a global basis. However,
this data is not a representation of the past performance of the Fund, nor is it
a prediction of such performance. The performance of the Fund will differ from
the historical performance of relevant indices. The performance of indices does
not take expenses into account, while the Fund incurs expenses in its
operations, which will reduce performance. Each of these factors will cause the
performance of the Fund to differ from relevant indices.
From time to time, the Fund and AIM Distributors may refer to the number of
shareholders in the Fund or the aggregate number of shareholders in all AIM
Funds or the dollar amount of the Fund's assets under management or rankings by
DALBAR Surveys, Inc. in advertising materials.
AIM Distributors believes the Fund is an appropriate investment for long-term
investment goals including funding retirement, paying for education or
purchasing a house. AIM Distributors may provide information designed to help
individuals understand their investment goals and explore various financial
strategies. For example, AIM Distributors may describe general principles of
investing, such as asset allocation, diversification and risk tolerance. The
Fund does not represent a complete investment program, and investors should
consider the Fund as appropriate for a portion of their overall investment
portfolio with regard to their long-term investment goals. There is no assurance
that any such information will lead to achieving these goals or guarantee future
results.
From time to time, AIM Distributors may refer to or advertise the names of U.S.
and non-U.S. companies and their products, although there can be no assurance
that any AIM Fund may own the securities of these companies.
Ibbotson Associates of Chicago, Illinois ("Ibbotson") provides historical
returns of the capital markets in the United States, including common stocks,
small capitalization stocks, long-term corporate bonds, intermediate-term
government bonds, long-term government bonds, Treasury bills, the U.S. rate of
inflation (based on the CPI), and combinations of various capital markets. The
performance of these capital markets are based on the returns of different
indices.
AIM Funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any of
these capital markets. The risks associated with the security types in any
capital market may or may not correspond directly to those of the funds.
Ibbotson calculates total returns in the same method as the funds.
The Fund may quote various measures of volatility and benchmark correlation such
as beta, standard deviation and R in advertising. In addition, the Fund may
compare these measures to those of other funds. Measures of volatility seek to
compare the Fund's historical share price fluctuations or total returns compared
to those of a benchmark. All measures of volatility and correlation are
calculated using averages of historical data.
The Fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging programs. In such a program, an
investor invests a fixed dollar amount in a fund at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares when prices are
low. While such a strategy does not assure a profit or guard against loss in a
declining market, the investor's average cost per share can be lower than if
fixed numbers of shares are purchased at the same intervals. In evaluating such
a plan, investors should consider their ability to continue purchasing shares
through periods of low price levels.
Statement of Additional Information Page 38
<PAGE>
AIM NEW DIMENSION FUND
The Fund may describe in its sales material and advertisements how an investor
may invest in AIM Funds through various retirement plans or other programs that
offer deferral of income taxes on investment earnings and to which an investor
may make deductible contributions. Because of their advantages, these retirement
accounts and plans and programs may produce returns superior to comparable
non-retirement investments. For example, a $10,000 investment earning a taxable
return of 10% annually would have an after-tax value of $17,976 after ten years,
assuming tax was deducted from the return each year at a 39.6% rate. An
equivalent tax-deferred investment would have an after-tax value of $19,626
after ten years, assuming tax was deducted at a 39.6% rate from the deferred
earnings at the end of the ten-year period. In sales material and
advertisements, the Fund may also discuss these plans and programs. See
"Information relating to Sales and Redemptions -- Individual Retirement Accounts
("IRAs") and Other Tax Deferred Plans."
AIM Distributors may from time to time in its sales materials and advertising
discuss the risks inherent in investing. The major types of investment risk are
market risk, industry risk, credit risk, interest rate risk, liquidity risk and
inflation risk. Risk represents the possibility that you may lose some or all of
your investment over a period of time. A basic tenet of investing is the greater
the potential reward, the greater the risk.
From time to time, the Fund and AIM Distributors will quote data regarding
industries, companies, individual countries, regions, world stock exchanges, and
economic and demographic statistics from sources AIM Distributors deems
reliable, including the economic and financial data of financial organizations,
such as:
1) Stock market capitalization: Morgan Stanley Capital International World
Indices, IFC and Datastream.
2) Stock market trading volume: Morgan Stanley Capital International Industry
Indices and IFC.
3) The number of listed companies: IFC, GT Guide to World Equity Markets,
Salomon Brothers, Inc., and S.G. Warburg.
4) Wage rates: U.S. Department of Labor Statistics and Morgan Stanley Capital
International World.
5) International industry performance: Morgan Stanley Capital International
World Indices, Wilshire Associates and Salomon Brothers, Inc.
6) Stock market performance: Morgan Stanley Capital International World
Indices, IFC and Datastream.
7) The Consumer Price Index and inflation rate: The World Bank, Datastream and
IFC.
8) Gross Domestic Product ("GDP"): Datastream and The World Bank.
9) GDP growth rate: IFC, The World Bank and Datastream.
10) Population: The World Bank, Datastream and United Nations.
11) Average annual growth rate (%) of population: The World Bank, Datastream and
United Nations.
12) Age distribution within populations: OECD and United Nations.
13) Total exports and imports by year: IFC, The World Bank and Datastream.
14) Top three companies by country, industry or market: IFC, GT Guide to World
Equity Markets, Salomon Brothers Inc., and S.G. Warburg.
15) Foreign direct investments to developing countries: The World Bank and
Datastream.
16) Supply, consumption, demand and growth in demand of certain products,
services and industries, including, but not limited to electricity, water,
transportation, construction materials, natural resources, technology, other
basic infrastructure, financial services, health care services and supplies,
consumer products and services and telecommunications equipment and services
(sources of such information may include, but would not be limited to, The
World Bank, OECD, IMF, Bloomberg and Datastream).
17) Standard deviation and performance returns for U.S. and non-U.S. equity and
bond markets: Morgan Stanley Capital International.
18) Countries restructuring their debt, including those under the Brady Plan:
the Sub-adviser.
19) Political and economic structure of countries: Economist Intelligence Unit.
20) Government and corporate bonds -- credit ratings, yield to maturity and
performance returns: Salomon Brothers, Inc.
21) Dividend yields for U.S. and non-U.S. companies: Bloomberg.
From time to time, AIM Distributors may include in its advertisement and sales
material, information about privatization which is an economic process involving
the sale of state-owned companies to the private sector.
Statement of Additional Information Page 39
<PAGE>
AIM NEW DIMENSION FUND
In advertising and sales materials, AIM Distributors may make reference to or
discuss its products, services and accomplishments. Among these accomplishments
are that in 1983 the Sub-adviser provided assistance to the government of Hong
Kong in linking its currency to the U.S. dollar, and that in 1987 Japan's
Ministry of Finance licensed LGT Asset Management Ltd. as one of the first
foreign discretionary investment managers for Japanese investors. Such
accomplishments, however, should not be viewed as an endorsement of the
Sub-adviser by the government of Hong Kong, Japan's Ministry of Finance or any
other government or government agency. Nor do any such accomplishments of the
Sub-adviser provide any assurance that the AIM/GT Funds' investment objectives
will be achieved.
GENERAL INFORMATION ABOUT THE UNDERLYING THEME PORTFOLIOS
Each Underlying Theme Portfolio may invest worldwide across industries within
the Portfolio's area of concentration without national or regional restrictions.
The ability of each Underlying Theme Portfolio to invest worldwide may allow the
portfolio managers to select industries in different economic cycles and varying
stages of development, though there is no assurance that the managers will be
successful in this selection.
Each Underlying Theme Portfolio's area of concentration reflects the underlying
theme of the Portfolio. AIM Distributors believes that there are certain social,
political and economic trends that may benefit one or more industries within an
Underlying Theme Portfolio's area of concentration. Of course, there is no
assurance that any of the Funds will benefit as a result.
HEALTH CARE FUND
From time to time the Fund and AIM Distributors will quote information including
data regarding:
/ / Trading volume, number of listed companies and the largest companies of
the global health care industry
/ / Expenditures by various countries, regions and age groups on health care
/ / Population of countries, regions and age groups
/ / Natality and mortality rates in various regions, countries and age
groups
/ / Life expectancy rates in various regions, countries and age groups
/ / New health care products and products seeking approval
/ / Health maintenance organizations (HMOs) and their enrollment growth
/ / Studies from, but not limited to, the American Medical Association
showing the effectiveness of using drugs to cure illness
/ / Medical technology and devices in use or in development
/ / Regulatory environment of health care industries
/ / Consolidation in the health care industries
The information quoted has not been independently verified by the Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including the following:
/ / Research firms such as Mehta and Isaly which publishes PHARMACEUTICAL
PORTFOLIO RECOMMENDATIONS
/ / OECD and its publications such as the OECD HEALTH DATA, as supplemented
annually
/ / Morgan Stanley Capital International stock market industry indices such
as Health & Personal Care
/ / The World Bank and its publications such as THE WORLD DEVELOPMENT
REPORT, as supplemented annually
/ / IFC and publications such as the EMERGING STOCK MARKETS FACTBOOK
INFORMATION ABOUT THE GLOBAL HEALTH CARE INDUSTRIES
The Fund and the Sub-adviser believe that certain market and demographic factors
merit an investor's consideration when making a health care investment.
Worldwide standards of living and life expectancy have increased at a
substantial rate. The Sub-adviser, the investment adviser to the AIM/GT Funds,
expects this growth, which works to the general benefit of the global health
care industry, to continue at a roughly comparable rate in the future, although
no assurances can be given in this regard. Moreover, according to the
Sub-adviser, the health care industry historically has proven to be a relatively
non-cyclical industry that continues to provide goods and services to the public
in periods of economic weakness as well as economic strength.
Statement of Additional Information Page 40
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AIM NEW DIMENSION FUND
The Sub-adviser believes that the anticipated increase in the world's elderly
population could increase demand for health care products and services. For
example, according to data compiled by the Sub-adviser, in Japan the number of
people age 65 and older is expected to grow over 100% by the year 2025; in
Germany, France and the U.S., the same age group should grow 40%. Similarly, the
U.S. Census Bureau predicts the number of Americans 85 and older to double in
the next 30 years. From time to time, the Fund and AIM Distributors will quote
information including, but not limited to, international data regarding
populations, birth rates, mortality rates, life expectancy, health care
expenditures, and gross domestic product vs. life expectancy. The information
quoted has not been independently verified by the Fund or AIM Distributors and
will be based on data that is believed to be reliable and accurate.
TELECOMMUNICATIONS FUND
From time to time the Fund and AIM Distributors will quote information including
data regarding:
/ / Increased usage of new technologies such as, but not limited to,
cellular and wireless communications in emerging and established
countries around the world
/ / Supply and demand of telephone equipment and services
/ / Regulatory environment of telecommunications industries
/ / Revenue, price and usage of telecommunications products and services
/ / Privatization and/or deregulation of telecommunications companies
The information quoted has not been independently verified by the Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including the following:
/ / Salomon Brothers World Equity Telecommunications Index, which includes
stock market data about the telecommunications industry in established
and developing markets
/ / OECD and other publications from its subsidiaries such as the
International Telecommunications Union
/ / Morgan Stanley Capital International stock market industry indices such
as Telecommunications, Broadcasting & Publishing and Data Processing &
Reproduction
/ / International Technology Consultants, a Washington D.C. based firm which
publishes reports such as EASTERN EUROPEAN & SOVIET TELECOM REPORT and
LATIN AMERICAN TELECOM REPORT
/ / Telegeography and other publications
DEREGULATION IN THE UNITED STATES
The United States has been the bellwether for deregulation of the telephone
industry. The divestiture of the Bell System from American Telephone and
Telegraph has produced competing companies in the United States. Such U.S.
market-driven competition has, for example, led to lower costs for consumers
which in turn led to greater consumer usage and to higher industrywide revenues.
The Sub-adviser expects this scenario to continue to benefit such companies in
the U.S. and similarly to be realized by the established telecommunications
companies in established economies, although no assurances can be made in this
regard.
CONSUMER PRODUCTS AND SERVICES FUND
From time to time the Fund and AIM Distributors will quote information including
data regarding:
/ / Trading volume, number of listed companies and the largest companies
located around the world in the consumer products and services
industries
/ / Expenditures, demand and consumption by various countries, regions,
income classes and age groups of consumer products and services
/ / Population of countries, regions and age groups
/ / Life expectancy rates in various regions, countries and age groups
/ / New consumer products and services in the development or manufacturing
stages
/ / Income of various regions, countries and age groups
/ / Sales and sales growth of consumer products and services companies in
their own country and abroad
/ / Sales, supply and demand of consumer products and services
Statement of Additional Information Page 41
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AIM NEW DIMENSION FUND
/ / Parent companies and the products and services they distribute
/ / Regulatory environment of consumer products industries
The information quoted will not be independently verified by the Fund or AIM
Distributors and will be based on data provided that is believed to be reliable
and accurate from sources including, but not limited to, the following:
/ / Consumer and trade groups
/ / Fortune magazine and other periodicals
/ / The World Bank and its publications
/ / The International Monetary Fund (IMF) and its publications
/ / IFC and its publications
/ / OECD and its publications
INFRASTRUCTURE FUND
From time to time the Fund and AIM Distributors may quote information including:
/ / Supply and demand of telephone equipment and services, electricity,
water, transportation, construction materials and other infrastructure
related products and services
/ / Regulatory environment of infrastructure industries
/ / Quantity and costs of current and projected infrastructure projects
/ / Privatization of industries and companies
/ / New technologies, products and services used in infrastructure
industries
/ / Infrastructure Finance Magazine and other periodicals
FINANCIAL SERVICES FUND
From time to time the Fund and AIM Distributors may quote information including:
/ / Supply and demand of financial services
/ / Regulatory environment of financial service industries
/ / Credit ratings of U.S. and non-U.S. banks
/ / New technologies, products and services used in the financial services
industries
/ / Consolidation in the financial services industries
RESOURCES FUND
From time to time the Fund and AIM Distributors may quote information including:
/ / Supply, demand and prices of natural resources
/ / Regulatory environment of natural resources
/ / Supply, demand and prices of products manufactured from natural
resources
/ / New technologies, products and services used in the natural resources
industries
Statement of Additional Information Page 42
<PAGE>
AIM NEW DIMENSION FUND
DESCRIPTION OF DEBT RATINGS
- --------------------------------------------------------------------------------
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Moody's employs the designations "Prime-1" and "Prime-2" to indicate commercial
paper having the highest capacity for timely repayment. Issuers rated Prime-1
(or supporting institutions) have a superior ability for repayment of senior
short-term debt obligations. Prime-1 repayment ability will often be evidenced
by many of the following characteristics: leading market positions in
well-established industries; high rates of return on funds employed;
conservative capitalization structure with moderate reliance on debt and ample
asset protection; broad margins in earnings coverage of fixed financial charges
and high internal cash generation; and well-established access to a range of
financial markets and assured sources of alternate liquidity. Issuers rated
Prime-2 (or supporting institutions) have a strong ability for repayment of
senior short-term debt obligations. This normally will be evidenced by many of
the characteristics cited above but to a lesser degree. Earnings trends and
coverage ratios, while sound may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.
S&P rates commercial paper in four categories ranging from "A-1" for the highest
quality obligations to "D" for the lowest. A-1 -- This highest category
indicates that the degree of safety regarding timely payment is strong. Those
issues determined to possess extremely strong safety characteristics will be
denoted with a plus sign (+) designation. A-2 -- Capacity for timely payment on
issues with this designation is satisfactory. However, the relative degree of
safety is not as high as for issues designated "A-1." A-3 -- Issues carrying
this designation have adequate capacity for timely payment. They are, however,
more vulnerable to the adverse effects of changes in circumstances than
obligations carrying the higher designations. B -- Issues rated "B" are regarded
as having only speculative capacity for timely payment. C -- This rating is
assigned to short-term debt obligations with a doubtful capacity for payment. D
- -- Debt rated "D" is in payment default. The "D" rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period.
DESCRIPTION OF BOND RATINGS
Moody's rates the long-term debt securities issued by various entities from
"Aaa" to "C." Investment Grade Ratings are the first four categories:
Aaa -- Best quality. These securities carry the smallest degree of
investment risk and are generally referred to as "gilt edged." Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa -- High quality by all standards. Together with the Aaa group they
comprise what are generally known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term
risk appear somewhat larger than the Aaa securities.
A -- Upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa -- Medium-grade obligations (i.e., they are neither highly protected
nor poorly secured). Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or
may be characteristically unreliable over any great length of time. Such
bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba -- Have speculative elements and their future cannot be considered as
well-assured. Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both good and bad
times over the future. Uncertainty of position characterizes bonds in this
class.
B -- Generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other
terms of the contract over any long period of time may be small.
Statement of Additional Information Page 43
<PAGE>
AIM NEW DIMENSION FUND
Caa -- Poor standing. Such issues may be in default or there may be
present elements of danger with respect to principal or interest.
Ca -- Speculative in a high degree. Such issues are often in default or
have other marked shortcomings.
C -- Lowest rated class of bonds. Issues so rated can be regarded as
having extremely poor prospects of ever attaining any real investment
standing.
ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies that
are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa to B in its corporate bond rating system. The modifier 1
indicates that the company ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.
S&P rates the securities debt of various entities in categories ranging from
"AAA" to "D" according to quality. Investment grade ratings are the first four
categories:
AAA -- Highest rating. Capacity to pay interest and repay principal is
extremely strong.
AA -- Very strong capacity to pay interest and repay principal and
differs from the higher rated issues only in a small degree.
A -- Has a strong capacity to pay interest and repay principal although
it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB -- Regarded as having adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal for debt in
this category than in higher rated categories.
BB, B, CCC, CC, C -- Debt rated "BB," "B," "CCC," "CC," and "C" is
regarded, on balance, as predominantly speculative with respect to capacity
to pay interest and repay principal in accordance with the terms of the
obligation. "BB" indicates the lowest degree of speculation and "C" the
highest degree of speculation. While such debt will likely have some quality
and protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.
BB -- Has less near-term vulnerability to default than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to inadequate
capacity to meet timely interest and principal payments. The "BB" rating
category is also used for debt subordinated to senior debt that is assigned
an actual or implied "BBB-" rating.
B -- Has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied "BB" or "BB-" rating.
CCC -- Has a currently identifiable vulnerability to default, and is
dependent upon favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, it is not likely to
have the capacity to pay interest and repay principal. The "CCC" rating
category is also used for debt subordinated to senior debt that is assigned
an actual or implied "B" or "B-" rating.
Statement of Additional Information Page 44
<PAGE>
AIM NEW DIMENSION FUND
CC -- Typically applied to debt subordinated to senior debt that is
assigned an actual or implied "CCC" rating.
C -- Typically applied to debt subordinated to senior debt that is
assigned an actual or implied "CCC-" debt rating. The "C" rating may be used
to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.
C1 -- Reserved for income bonds on which no interest is being paid.
D -- In payment default. The "D" category is used when interest payments
or principal payments are not made on the date due even if the applicable
grace period has not expired, unless S&P believes that such payments will be
made during such grace period. This rating will also be used upon the filing
of a bankruptcy petition if debt service payments are jeopardized.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
NR: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The audited financial statements of the Fund as of December 31, 1997 and for the
fiscal year then ended appear on the following pages.
Statement of Additional Information Page 45
<PAGE>
GT GLOBAL NEW DIMENSION FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders of GT Global New Dimension Fund and
Board of Trustees of GT Global Series Trust:
We have audited the accompanying statement of assets and liabilities of GT
Global New Dimension Fund (the "Fund"), including the portfolio of investments,
as of December 31, 1997, the related statement of operations, the statement of
changes in net assets, and the financial highlights for the period from
September 15, 1997 (commencement of operations) to December 31, 1997. These
financial statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of GT
Global New Dimension Fund as of December 31, 1997, the results of its
operations, the changes in its net assets, and the financial highlights for the
period from September 15, 1997 (commencement of operations) to December 31,
1997, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
BOSTON, MASSACHUSETTS
FEBRUARY 17, 1998
F1
<PAGE>
GT GLOBAL NEW DIMENSION FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADVISOR
CLASS VALUE % OF NET
GT GLOBAL THEME FUNDS SHARES (NOTE 1) ASSETS
- ------------------------------------------------------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
GT Global Consumer Products and Services Fund ............. 515,881 $ 11,204,937 31.5
GT Global Financial Services Fund ......................... 426,322 7,499,007 21.1
GT Global Infrastructure Fund ............................. 388,281 5,886,334 16.6
GT Global Natural Resources Fund .......................... 240,790 4,054,907 11.4
GT Global Health Care Fund ................................ 162,161 3,278,897 9.2
GT Global Telecommunications Fund ......................... 185,442 3,089,470 8.7
------------ -----
TOTAL THEME FUND INVESTMENTS (cost $37,807,948) ............. 35,013,552 98.5
------------ -----
<CAPTION>
REPURCHASE AGREEMENT
- -------------------------------------------------------------
<S> <C> <C> <C> <C>
Dated December 31, 1997, with State Street Bank & Trust
Co., due January 2, 1998, for an effective yield of 5.80%,
collateralized by $445,000 U.S. Treasury Notes, 5.75% due
12/31/98 (market value of collateral is $445,417,
including accrued interest). (cost $432,000) ............ 432,000 1.2
------------ -----
TOTAL INVESTMENTS (cost $38,239,948) * ..................... 35,445,552 99.7
Other Assets and Liabilities ................................ 123,462 0.3
------------ -----
NET ASSETS .................................................. $ 35,569,014 100.0
------------ -----
------------ -----
</TABLE>
- --------------
* For Federal income tax purposes, cost is $38,277,690 and
appreciation (depreciation) is as follows:
<TABLE>
<S> <C>
Unrealized appreciation: $ --
Unrealized depreciation: (2,832,138)
-------------
Net unrealized depreciation: $ (2,832,138)
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F2
<PAGE>
GT GLOBAL NEW DIMENSION FUND
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Assets:
Investments at value (cost $38,239,948) (Note 1).................................................. $35,445,552
U.S. currency..................................................................................... 113
Receivable for Fund shares sold................................................................... 929,466
Interest receivable............................................................................... 70
----------
Total assets.................................................................................... 36,375,201
----------
Liabilities:
Payable for investments purchased................................................................. 432,113
Payable for Fund shares repurchased............................................................... 352,532
Payable for service and distribution expenses (Note 2)............................................ 21,542
----------
Total liabilities............................................................................... 806,187
----------
Net assets.......................................................................................... $35,569,014
----------
----------
Class A:
Net asset value and redemption price per share ($15,144,662 DIVIDED BY 1,424,148 shares
outstanding)....................................................................................... $ 10.63
----------
----------
Maximum offering price per share (100/95.25 of $10.63) *............................................ $ 11.16
----------
----------
Class B:+
Net asset value and offering price per share ($19,183,648 DIVIDED BY 1,805,781 shares
outstanding)....................................................................................... $ 10.62
----------
----------
Advisor Class:
Net asset value, offering price per share, and redemption price per share ($1,240,704 DIVIDED BY
116,587 shares outstanding)........................................................................ $ 10.64
----------
----------
Net assets consist of:
Paid in capital (Note 4).......................................................................... $37,829,140
Undistributed net investment income............................................................... 28,710
Accumulated net undistributed gain................................................................ 505,560
Net unrealized depreciation of investments........................................................ (2,794,396)
----------
Total -- representing net assets applicable to capital shares outstanding........................... $35,569,014
----------
----------
<FN>
- --------------
* On sales of $50,000 or more, the offering price is reduced.
+ Redemption price per share is equal to the net asset value per share less
any applicable contingent deferred sales charge.
</TABLE>
The accompanying notes are an integral part of the financial statements.
F3
<PAGE>
GT GLOBAL NEW DIMENSION FUND
STATEMENT OF OPERATIONS
September 15, 1997 (commencement of operations) to December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Investment income: (Note 1)
Interest income............................................................................ $ 8,216
----------
Total investment income.................................................................. 8,216
----------
Expenses:
Service and distribution expenses: (Note 2)
Class A...................................................................... $ 11,800
Class B...................................................................... 27,856
----------
Total expenses............................................................................. 39,656
----------
Net investment loss.......................................................................... (31,440)
----------
Net realized and unrealized gain (loss) on investments: (Note 1)
Net realized loss on investments............................................... (37,742)
Capital gain distributions received............................................ 2,021,395
----------
Net realized gain during the period...................................................... 1,983,653
Net change in unrealized depreciation during the period.................................. (2,794,396)
----------
Net realized and unrealized loss on investments.............................................. (810,743)
----------
Net decrease in net assets resulting from operations......................................... $ (842,183)
----------
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F4
<PAGE>
GT GLOBAL NEW DIMENSION FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
SEPTEMBER 15,
1997
(COMMENCEMENT
OF OPERATIONS)
TO
DECEMBER 31,
1997
--------------
Increase in net assets
Operations:
Net investment loss..................................................................... $ (31,440)
Net realized gain on investments........................................................ 1,983,653
Net change in unrealized depreciation of investments.................................... (2,794,396)
--------------
Net decrease in net assets resulting from operations.................................. (842,183)
--------------
Class A:
Distributions to shareholders: (Note 1)
In excess of net investment income...................................................... (583,714)
Class B:
Distributions to shareholders: (Note 1)
In excess of net investment income...................................................... (781,183)
Advisor Class:
Distributions to shareholders: (Note 1)
In excess of net investment income...................................................... (53,046)
--------------
Total distributions................................................................... (1,417,943)
--------------
Capital share transactions: (Note 4)
Increase from capital shares sold and reinvested........................................ 41,029,628
Decrease from capital shares repurchased................................................ (3,300,488)
--------------
Net increase from capital share transactions.......................................... 37,729,140
--------------
Total increase in net assets.............................................................. 35,469,014
Net assets:
Beginning of period..................................................................... 100,000
--------------
End of period *......................................................................... $ 35,569,014
--------------
--------------
* Includes undistributed net investment income of........................................ $ 28,710
--------------
--------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F5
<PAGE>
GT GLOBAL NEW DIMENSION FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share outstanding,
total investment return, ratios and supplemental data. This information has been
derived from information provided in the financial statements and market price
data for the shares.
<TABLE>
<CAPTION>
SEPTEMBER 15, 1997
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
-----------------------------------------
ADVISOR
CLASS A (D) CLASS B (D) CLASS (D)
----------- ----------- -----------
<S> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of period................... $ 11.43 $ 11.43 $ 11.43
----------- ----------- -----------
Income from investment operations:
Net investment income (loss)......................... (0.01) (0.02) 0.01
Net realized and unrealized loss on investments...... (0.31) (0.32) (0.31)
----------- ----------- -----------
Net decrease from investment operations............ (0.32) (0.34) (0.30)
----------- ----------- -----------
Distributions to shareholders:
In excess of net investment income................... (0.48) (0.47) (0.49)
----------- ----------- -----------
Total distributions................................ (0.48) (0.47) (0.49)
----------- ----------- -----------
Net asset value, end of period......................... $ 10.63 $ 10.62 $ 10.64
----------- ----------- -----------
----------- ----------- -----------
Total investment return (c)............................ (2.68)% (b) (2.83)% (b) (2.51)% (b)
Ratios and supplemental data:
Net assets, end of period (in 000's)................... $15,145 $19,184 $ 1,241
Ratio of net investment income (loss) to average net
assets................................................ (0.35)% (a) (0.85)% (a) 0.15% (a)
Ratio of expenses to average net assets (Notes 1 &
5).................................................... 0.50% (a) 1.00% (a) 0.00% (a)
Portfolio turnover rate+............................... 1% (b) 1% (b) 1% (b)
</TABLE>
- ----------------
(a) Annualized
(b) Not annualized
(c) Total investment return does not include sales charges.
(d) These selected per share data were calculated based upon average
shares outstanding during the period.
+ Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
F6
<PAGE>
GT GLOBAL NEW DIMENSION FUND
NOTES TO
FINANCIAL STATEMENTS
December 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
GT Global New Dimension Fund ("Fund") is a diversified series of GT Global
Series Trust (the "Trust"). The Trust is organized as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended
("1940 Act"), as an open-end management investment company. The Fund invests
substantially all of its assets in Advisor Class shares of the GT Global theme
mutual funds: GT Global Consumer Products and Services Fund; GT Global Financial
Services Fund; GT Global Health Care Fund; GT Global Infrastructure Fund; GT
Global Natural Resources Fund; and GT Global Telecommunications Fund
(collectively, the "Underlying Theme Funds").
The Fund offers Class A, Class B and Advisor Class shares, each of which has
equal rights as to assets and voting privileges. Class A and Class B each has
exclusive voting rights with respect to its distribution plan. Investment
income, realized and unrealized capital gains and losses of the Fund are
allocated on a pro rata basis to each Class based on the relative net assets of
each Class to the total net assets of the Fund. Each Class of shares differs in
its respective service and distribution expenses. Beginning January 1, 1998, the
Fund will also offer Class C shares.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Funds in the preparation of the
financial statements.
(A) PORTFOLIO VALUATION
The Fund calculates the net asset value of and completes orders to purchase,
exchange or repurchase Fund shares on each business day, with the exception of
those days on which the New York Stock Exchange is closed.
Investments in the Underlying Funds are valued at the closing net asset value
per Advisor Class share of each Underlying Fund on the day of valuation.
Short-term investments with a maturity of 60 days or less are valued at
amortized cost.
(B) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Fund, it is the Fund's
policy to always receive, as collateral, United States government securities or
other high quality debt securities of which the value, including accrued
interest, is at least equal to the amount to be repaid to the Fund under each
agreement at its maturity.
(C) TAXES
It is the policy of the Fund to meet the requirements for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). It is also the intention of the Fund to make distributions
sufficient to avoid imposition of any excise tax under Section 4982 of the Code.
Therefore, no provision has been made for Federal taxes on income, capital
gains, or unrealized appreciation of securities held, and excise tax on income
and capital gains.
(D) DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded by the Fund on the ex-date. Income
and capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund and timing differences.
(E) LINE OF CREDIT
The Fund, along with certain other funds ("GT Funds") advised and/ or
administered by the Manager, has a line of credit with BankBoston and State
Street Bank & Trust Company. The arrangements with the banks allow the Fund and
the GT Funds to borrow an aggregate maximum amount of $250,000,000. The Fund is
limited to borrowing up to 33 1/3% of the value of the Fund's total assets. For
the period ended December 31, 1997, the Fund had no outstanding loan balance.
2. RELATED PARTIES
Chancellor LGT Asset Management, Inc. is the Fund's investment manager and
administrator. The Manager is also the pricing and accounting agent for the
Fund. The Manager will initially assume all costs of the Fund's operation,
except for service and distribution fees as described below and non-recurring
and extraordinary expenses. The Fund, as a shareholder in the Underlying Theme
Funds, indirectly will bear its proportionate share of any investment management
fees and other expenses paid by the Underlying Theme Funds. Subject to receipt
of a pending exemptive order from the Securities and Exchange Commission, the
Trust, on behalf of the Fund, will enter into a Special Servicing Agreement
("Agreement") with the Underlying Theme Funds, the Manager and GT Global
Investor Services, Inc., the transfer agent. If the Board of Trustees of the
Underlying Theme Funds makes certain findings, each Underlying Theme Fund will
pay certain nondistribution-related expenses of the Fund to the extent such
expenses are less than the estimated savings to the Underlying Theme Funds from
the operation of the Fund. The Manager and GT Global also voluntarily have
undertaken to limit the Underlying Theme Fund's expenses (exclusive of brokerage
commissions, taxes, interest, and extraordinary expenses) to the maximum annual
rate of 1.50% of the average daily net assets of the Underlying Theme Fund's
Advisor Class shares.
F7
<PAGE>
GT GLOBAL NEW DIMENSION FUND
GT Global, Inc. ("GT Global"), an affiliate of the Manager, serves as the Fund's
distributor. The Fund offers Class A, Class B and Advisor Class shares for
purchase and will offer Class C shares for purchase beginning January 1, 1998.
Class A shares are subject to initial sales charges imposed at the time of
purchase, in accordance with the schedule included in the Fund's current
prospectus. GT Global collects the sales charges imposed on sales of Class A
shares, and reallows a portion of such charges to dealers through which the
sales are made. For the period from September 15, 1997 (commencement of
operations) to December 31, 1997, GT Global retained $6,174 of such sales
charges. Purchases of Class A shares exceeding $500,000 may be subject to a
contingent deferred sales charge ("CDSC") upon redemption, in accordance with
the Fund's current prospectus. GT Global collected no CDSCs for the period from
September 15, 1997 (commencement of operations) to December 31, 1997. GT Global
also makes ongoing shareholder servicing and trail commission payments to
dealers whose clients hold Class A shares.
Class B shares are not subject to initial sales charges. When Class B shares are
sold, GT Global from its own resources pays commissions to dealers through which
the sales are made. Certain redemptions of Class B shares made within six years
of purchase are subject to CDSCs, in accordance with the Fund's current
prospectus. For the period from September 15, 1997 (commencement of operations)
to December 31, 1997, GT Global collected CDSCs in the amount of $1,902. In
addition, GT Global makes ongoing shareholder servicing and trail commission
payments to dealers whose clients hold Class B shares.
Class C shares will not be subject to initial sales charges. However, certain
redemptions of Class C shares made within one year of purchase will be subject
to CDSCs. In addition, GT Global will make ongoing shareholder servicing and
trail commission payments to dealers whose clients hold Class C shares.
Pursuant to Rule 12b-1 under the 1940 Act, the Trust's Board of Trustees has
adopted separate distribution plans with respect to the Fund's Class A shares
("Class A Plan") and Class B shares ("Class B Plan"), pursuant to which the Fund
reimburses GT Global for a portion of its shareholder servicing and distribution
expenses. Under the Class A Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class A shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.50% of the average daily net assets of the Fund's
Class A shares, less any amounts paid by the Fund as the aforementioned service
fee, for GT Global's expenditures incurred in providing services as distributor.
All expenses for which GT Global is reimbursed under the Class A Plan will have
been incurred within one year of such reimbursement.
Pursuant to the Fund's Class B Plan, the Fund may pay GT Global a service fee at
the annualized rate of up to 0.25% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in servicing and
maintaining shareholder accounts, and may pay GT Global a distribution fee at
the annualized rate of up to 0.75% of the average daily net assets of the Fund's
Class B shares for GT Global's expenditures incurred in providing services as
distributor. Expenses incurred under the Class B Plan in excess of 1.00%
annually may be carried forward for reimbursement in subsequent years as long as
that Plan continues in effect. Class C shares will also be subject to a separate
distribution plan adopted by the Trust's Board of Trustees pursuant to Rule
12b-1 under the 1940 Act.
GT Global Investor Services, Inc. ("GT Services"), an affiliate of the Manager
and GT Global, is the transfer agent of the Fund. For performing shareholder
servicing, reporting, and general transfer agent services, GT Services receives
an annual maintenance fee of $17.50 per account, a new account fee of $4.00 per
account, a per transaction fee of $1.75 for all transactions other than
exchanges and a per exchange fee of $2.25. GT Services is also reimbursed for
its out-of-pocket expenses for such items as postage, forms, telephone charges,
stationery and office supplies.
The Trust pays each of its Trustees who is not an employee, officer or director
of the Manager, GT Global or GT Services $5,000 per year plus $300 for each
meeting of the board or any committee thereof attended by the Trustee.
3. PURCHASES AND SALES
For the period from September 15, 1997 (commencement of operations) to December
31, 1997, purchases and sales, other than short-term investments, of the
Underlying Theme Funds by the Fund, are as follows:
<TABLE>
<CAPTION>
GT GLOBAL PURCHASES SALES
- -------------------------------------------------------------------------------- --------------- ----------
<S> <C> <C>
Consumer Products and Services Fund............................................. $ 11,777,579 $ 80,882
Telecommunications Fund......................................................... 3,462,408 23,798
Financial Services Fund......................................................... 7,690,319 53,175
Natural Resources Fund.......................................................... 4,847,276 32,530
Health Care Fund................................................................ 4,192,022 26,247
Infrastructure Fund............................................................. 6,136,745 44,025
</TABLE>
F8
<PAGE>
GT GLOBAL NEW DIMENSION FUND
4. CAPITAL SHARES
At December 31, 1997, there were an unlimited number of shares of beneficial
interest authorized, at no par value. Transactions in capital shares of the Fund
were as follows:
CAPITAL SHARE TRANSACTIONS
<TABLE>
<CAPTION>
SEPTEMBER 15, 1997
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
-----------------------------------
CLASS A SHARES AMOUNT
- ---------------------------------------- --------------- ------------------
<S> <C> <C>
Shares sold............................. 1,560,835 $ 17,768,084
Shares issued in connection with
reinvestment of distributions......... 54,891 563,181
--------------- ------------------
1,615,726 18,331,265
Shares repurchased...................... (194,494) (2,190,806)
--------------- ------------------
Net increase............................ 1,421,232 $ 16,140,459
--------------- ------------------
--------------- ------------------
<CAPTION>
SEPTEMBER 15, 1997
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
-----------------------------------
CLASS B SHARES AMOUNT
- ---------------------------------------- --------------- ------------------
<S> <C> <C>
Shares sold............................. 1,832,668 $ 20,681,472
Shares issued in connection with
reinvestment of distributions......... 67,039 687,825
--------------- ------------------
1,899,707 21,369,297
Shares repurchased...................... (96,841) (1,061,266)
--------------- ------------------
Net increase............................ 1,802,866 $ 20,308,031
--------------- ------------------
--------------- ------------------
<CAPTION>
SEPTEMBER 15, 1997
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
-----------------------------------
ADVISOR CLASS SHARES AMOUNT
- ---------------------------------------- --------------- ------------------
<S> <C> <C>
Shares sold............................. 113,102 $ 1,276,664
Shares issued in connection with
reinvestment of distributions......... 5,102 52,402
--------------- ------------------
118,204 1,329,066
Shares repurchased...................... (4,533) (48,416)
--------------- ------------------
Net increase............................ 113,671 $ 1,280,650
--------------- ------------------
--------------- ------------------
</TABLE>
5. SUBSEQUENT EVENT
On January 30, 1998, Liechtenstein Global Trust ("LGT") and AMVESCAP PLC
("AMVESCAP") entered into an agreement by which AMVESCAP will acquire LGT's
Asset Management Division, including Chancellor LGT Asset Management, Inc.
AMVESCAP is the holding company of the AIM and INVESCO asset management
businesses.
F9
<PAGE>
AIM NEW DIMENSION FUND
AIM/GT FUNDS
AIM DISTRIBUTORS OFFERS A BROAD RANGE OF FUNDS TO COMPLEMENT MANY INVESTORS'
PORTFOLIOS. FOR MORE INFORMATION AND A PROSPECTUS ON ANY OF THE FUNDS LISTED
BELOW, INCLUDING FEES, EXPENSES AND THE RISKS OF GLOBAL AND EMERGING MARKET
INVESTING AND THE RISKS OF INVESTING IN RELATED INDUSTRIES, PLEASE CONTACT
YOUR FINANCIAL ADVISER OR CALL 1-800-824-1580.
GROWTH FUNDS
/ / GLOBALLY DIVERSIFIED FUNDS
AIM NEW DIMENSION FUND
Captures global growth opportunities by investing directly in the six global
theme funds
AIM WORLDWIDE GROWTH FUND
Invests around the world, including the U.S.
AIM INTERNATIONAL GROWTH FUND
Provides portfolio diversity by investing outside
the U.S.
AIM EMERGING MARKETS FUND
Gives access to the growth potential of developing economies
AIM DEVELOPING MARKETS FUND
Invests in debt and equity securities of developing market issuers
/ / GLOBAL THEME FUNDS
AIM GLOBAL CONSUMER PRODUCTS AND
SERVICES FUND
Invests in companies that manufacture, market, retail, or distribute consumer
products or services
AIM GLOBAL FINANCIAL SERVICES FUND
Focuses on the worldwide opportunities from the demand for financial services
and products
AIM GLOBAL HEALTH CARE FUND
Invests in growing health care industries worldwide
AIM GLOBAL INFRASTRUCTURE FUND
Seeks companies that build, improve or maintain a country's infrastructure
AIM GLOBAL RESOURCES FUND
Concentrates on companies that own, explore or develop natural resources
AIM GLOBAL TELECOMMUNICATIONS FUND
Invests in companies worldwide that develop, manufacture or sell
telecommunications services or equipment
/ / REGIONALLY DIVERSIFIED FUNDS
AIM NEW PACIFIC GROWTH FUND
Offers access to the emerging and established markets of the Pacific Rim,
excluding Japan
AIM EUROPE GROWTH FUND
Focuses on investment opportunities in Europe
AIM LATIN AMERICAN GROWTH FUND
Invests in the emerging markets of Latin America
/ / SINGLE COUNTRY FUNDS
AIM SMALL CAP EQUITY FUND
Invests in equity securities of small U.S. companies
AIM MID CAP GROWTH FUND
Concentrates on medium-sized companies in the U.S.
AIM AMERICA VALUE FUND
Concentrates on equity securities of large cap U.S. companies believed to be
undervalued
AIM JAPAN GROWTH FUND
Provides U.S. investors with direct access to the Japanese market
GROWTH AND INCOME FUND
AIM GLOBAL GROWTH & INCOME FUND
Invests in blue-chip stocks and government bonds from around the world
INCOME FUNDS
AIM GLOBAL GOVERNMENT INCOME FUND
Earns monthly income from global government securities
AIM STRATEGIC INCOME FUND
Allocates its assets among debt securities from the U.S., developed foreign
countries and emerging markets
AIM GLOBAL HIGH INCOME FUND
Invests in debt securities in emerging markets
AIM FLOATING RATE FUND
Invests primarily in senior secured floating rate loans that have the potential
to achieve a high level of current income
MONEY MARKET FUND
AIM DOLLAR FUND
Invests in high quality, U.S. dollar-denominated money market securities
worldwide for stability and preservation of capital
[LOGO]
NO DEALER, SALES REPRESENTATIVE OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
STATEMENT OF ADDITIONAL INFORMATION AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY AIM
SERIES TRUST, AIM NEW DIMENSION FUND, A I M ADVISORS, INC., INVESCO (NY),
INC. OR A I M DISTRIBUTORS, INC. THIS STATEMENT OF ADDITIONAL INFORMATION
DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF ANY OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
DIMSX709.GT
<PAGE>
AIM SERIES TRUST
PART C: OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a)FINANCIAL STATEMENTS -- The following audited financial statements as of
December 31, 1997, and for the fiscal year then ended, for Class A, Class B and
Advisor Class shares of the AIM New Dimension Fund, the sole series of the
Registrant, are included in the Fund's Statement of Additional Information and
are filed herewith:
-- Report of Independent Accountants
-- Portfolio of Investments
-- Statement of Assets and Liabilities
-- Statement of Operations
-- Statement of Changes in Net Assets
-- Financial Highlights
-- Notes to Financial Statements
(b)EXHIBITS:
(1) Registrant's Agreement and Declaration of Trust dated May 7,
1998 -- Filed herewith.
(2) Registrant's By-Laws dated May 7, 1998 -- Filed herewith.
(3) Not applicable.
(4) Provisions of instruments defining the rights of holders of
Registrant's securities are contained in the Agreement and
Declaration of Trust Articles II, VI, VII, VIII and IX and
By-laws Articles IV, V, VI, VII and VIII included as part of
Exhibits (b)(1) and (2) of this Registration Statement.
(5)(a) Form of Investment Management and Administration Contract --
Filed herewith.
(5)(b) Form of Investment Sub-Advisory and Sub-Administration
Contract -- Filed herewith.
(6)(a) Form of Distribution Agreement with respect to Class A and
Class C shares -- Filed herewith.
(6)(b) Form of Distribution Agreement with respect to Class B
shares -- Filed herewith.
(6)(c) Form of Distribution Agreement with respect to Advisor Class
shares -- Filed herewith.
(7) Not applicable.
(8) Form of Custodian Agreement between Registrant and State
Street Bank and Trust Company -- Filed herewith.
(9)(a) Transfer Agency Contract (1).
(9)(b) Letter Agreement assigning Transfer Agency Contract -- Filed
herewith.
(9)(c) Form of Fund Accounting and Pricing Agent Agreement -- Filed
herewith.
C-1
<PAGE>
<TABLE>
<S> <C>
(9)(d) Other material contracts:
</TABLE>
(i) Form of Selected Dealer Agreement -- Filed herewith.
(ii) Form of Bank Sales Contract -- Filed herewith.
(iii) Form of Shareholder Service Agreement -- Filed herewith.
(iv) Form of Bank Shareholder Service Agreement -- Filed
herewith.
(v) Form of Service Agreement for Bank Trust Department and for
Broker -- To be Filed.
(10)(a) Opinion and Consent of Counsel -- Filed herewith.
(10)(b) Opinion and Consent of Delaware Counsel -- Filed herewith.
(11) Consent of Coopers & Lybrand L.L.P., Independent Accountants
-- Filed herewith.
(12) Not applicable.
(13) Letter of Investment Intent (1).
(14)(a) IRA Application -- Filed herewith.
(14)(b) SEP and SARSEP IRA Adoption Agreement -- Filed herewith.
(14)(c) Profit Sharing/Money Purchase Pension Plan -- Filed
herewith.
(14)(d) 403(b) Plan -- Filed herewith.
(14)(e) SIMPLE IRA Application -- Filed herewith.
(14)(f) Roth IRA Application -- Filed herewith.
(15)(a) Form of Distribution Plan adopted pursuant to Rule 12b-1
with respect to Class A and Class C shares -- Filed
herewith.
(15)(b) Form of Distribution Plan adopted pursuant to Rule 12b-1
with respect to Class B shares -- Filed herewith.
(16) Schedule for Computation of Performance Quotations -- None.
(17) Financial Data Schedule (3).
(18) Multiple Class Plan adopted pursuant to Rule 18f-3 -- Filed
herewith.
Other Exhibits:
(a) Power of Attorney for Helge K. Lee and Michael A. Silver for
AIM Series Trust -- Filed herewith.
(b) Power of Attorney for Helge K. Lee and Michael A. Silver for
GT Global Series Trust (3).
- ------------------------
(1) Incorporated by reference to the identically enumerated Exhibit of
Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1A,
filed on August 22, 1997.
(2) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 1 to the Registration Statement on Form N-1A,
filed on October 31, 1997.
(3) Incorporated by reference to the identically enumerated Exhibit of
Post-Effective Amendment No. 2 to the Registration Statement on Form N-1A,
filed on March 4, 1998.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
C-2
<PAGE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
NUMBER OF RECORD
HOLDERS AS OF
TITLE OF CLASS MAY 7, 1998
- ---------------------------------------------------------------------------------------------- -------------------
<S> <C>
Share of Beneficial Interest in:
AIM New Dimension Fund -- Class A....................................................... 2,103
AIM New Dimension Fund -- Class B....................................................... 2,482
AIM New Dimension Fund -- Class C....................................................... 63
AIM New Dimension Fund -- Advisor Class................................................. 152
</TABLE>
ITEM 27. INDEMNIFICATION
The Registrant's Agreement and Declaration of Trust dated May 7, 1998,
provides, among other things, (1) that a Trustee shall not be liable for any
act, omission, or obligation of the Registrant or any Trustee (except for
liability to the Registrant or its shareholders by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the Trustee's
duties); (2) that the Trustees and Officers shall be indemnified by the
Registrant to the fullest extent permitted by the Delaware Business Trust Act
and other applicable law; and (3) that the shareholders and former shareholders
of the Registrant shall be held harmless by the Registrant (or applicable
portfolio or class) from personal liability arising from their status as such,
and shall be indemnified by the Registrant (or applicable portfolio or class)
against all loss and expense arising from such personal liability in accordance
with the Registrant's By-Laws and applicable law.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER AND SUB-ADVISER
See the material under the heading "Management" included in Part A
(Prospectus) of this Amendment and the material appearing under the headings
"Trustees and Officers" and "Management" included in Part B (Statement of
Additional Information) of this Amendment. Information as to the Directors and
Officers of A I M Advisors, Inc. and INVESCO (NY), Inc. is included in Schedule
A and Schedule D of Part I of each entity's Form ADV (File No. 801-12313 and
File No. 801-10254, respectively), filed with the Securities and Exchange
Commission, which are incorporated herein by reference thereto.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) A I M Distributors, Inc. is also the principal underwriter for the
following other investment companies: AIM Advisor Funds, Inc. (which includes
five funds: AIM Advisor Flex Fund, AIM Advisor International Value Fund, AIM
Advisor Large Cap Value Fund, AIM Advisor Multiflex Fund and AIM Advisor Real
Estate Fund); AIM Equity Funds, Inc. (which includes six funds: AIM Aggressive
Growth Fund, AIM Blue Chip Fund, AIM Capital Development Fund, AIM Charter Fund,
AIM Constellation Fund and AIM Weingarten Fund); AIM Funds Group (which includes
nine funds: AIM Balanced Fund, AIM Global Utilities Fund, AIM High Yield Fund,
AIM Income Fund, AIM Intermediate Government Fund, AIM Money Market Fund, AIM
Municipal Bond Fund, AIM Select Growth Fund and AIM Value Fund); AIM
International Funds, Inc. (which includes six funds: AIM Asian Growth Fund, AIM
European Development Fund, AIM International Equity Fund, AIM Global Aggressive
Growth Fund, AIM Global Growth Fund and AIM Global Income Fund); AIM Investment
Securities Funds (which includes one fund: AIM Limited Maturity Treasury Fund);
AIM Summit Fund, Inc.; AIM Tax-Exempt Funds, Inc. (which includes four funds:
AIM High Income Municipal Fund, AIM Tax-Exempt Bond Fund of Connecticut, AIM
Tax-Exempt Cash Fund and AIM Tax-Free Intermediate Fund); AIM Variable Insurance
Funds, Inc. (which includes thirteen funds: AIM V.I. Aggressive Growth Fund, AIM
V.I. Balanced Fund, AIM V.I. Capital Appreciation Fund, AIM V.I. Capital
Development Fund and AIM V.I. High Yield Fund) AIM V.I. Diversified Income Fund,
AIM V.I. Global Utilities Fund, AIM V.I. Government Securities Fund, AIM V.I.
Growth Fund, AIM V.I. Growth and Income Fund, AIM V.I. International Equity
Fund, AIM V.I. Money Market Fund, AIM V.I. Value Fund; AIM Growth Series (which
C-3
<PAGE>
includes eight funds: AIM America Value Fund, AIM Small Cap Equity Fund, AIM Mid
Cap Growth Fund, AIM Europe Growth Fund, AIM International Growth Fund, AIM
Japan Growth Fund, AIM New Pacific Growth Fund, and AIM Worldwide Growth Fund);
AIM Investment Funds, Inc. (which includes thirteen funds: AIM Strategic Income
Fund, AIM Global Government Income Fund, AIM Global High Income Fund, AIM Global
Growth & Income Fund, AIM Latin American Growth Fund, AIM Global
Telecommunications Fund, AIM Global Health Care Fund, AIM Global Financial
Services Fund, AIM Global Infrastructure Fund, AIM Global Consumer Products and
Services Fund, AIM Global Resources Fund, AIM Emerging Markets Fund and AIM
Developing Markets Fund); AIM Investment Portfolios, Inc. (which includes one
fund: AIM Dollar Fund); GT Global Variable Investment Series (which includes
five funds: GT Global Variable New Pacific Fund, GT Global Variable Europe Fund,
GT Global Variable America Fund, GT Global Variable International Fund, GT
Global Money Market Fund); GT Global Variable Investment Trust (which includes
nine funds: GT Global Variable Latin America Fund, GT Global Variable
Telecommunications Fund, GT Global Variable Growth & Income Fund, GT Global
Variable Strategic Income Fund, GT Global Variable Emerging Markets Fund, GT
Global Variable Global Government Income Fund, GT Global Variable U.S.
Government Income Fund, GT Global Variable Infrastructure Fund and GT Global
Variable Natural Resources Fund); and GT Global Floating Rate Fund, Inc.
(b) Directors and Officers of A I M Distributors, Inc.
The business address of each person listed is 11 Greenway Plaza, Suite 100,
Houston, Texas 77046-1173.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES WITH
BUSINESS ADDRESS PRINCIPAL UNDERWRITER
- -------------------------------------- ---------------------------------------------------------------------------
<S> <C>
Charles T. Bauer Chairman of the Board of Directors
Michael J. Cemo President & Director
Gary T. Crum Director
Robert H. Graham Senior Vice President & Director
William G. Littlepage Senior Vice President & Director
John J. Caldwell Senior Vice President
Marilyn M. Miller Senior Vice President
James L. Salners Senior Vice President
Gordon J. Sprague Senior Vice President
Michael C. Vessels Senior Vice President
B.J. Thompson First Vice President
James R. Anderson Vice President
John J. Arthur Vice President & Treasurer
Mary K. Coleman Vice President
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES WITH
BUSINESS ADDRESS PRINCIPAL UNDERWRITER
- -------------------------------------- ---------------------------------------------------------------------------
<S> <C>
Melville B. Cox Vice President & Chief Compliance Officer
Charles R. Dewey Vice President
Sidney M. Dilgren Vice President
Tony D. Green Vice President
William H. Kleh Vice President
Ofelia M. Mayo Vice President, General Counsel & Assistant Secretary
Terri L. Ransdell Vice President
Carol F. Relihan Vice President
Kamala C. Sachidanandan Vice President
Frank V. Serebrin Vice President
Christopher T. Simutis Vice President
Robert D. Van Sant, Jr. Vice President
Gary K. Wendler Vice President
David E. Hessel Assistant Vice President, Assistant Treasurer & Controller
Kathleen J. Pflueger Secretary
Luke P. Beausoleil Assistant Vice President
Tisha B. Christopher Assistant Vice President
Glenda A. Dayton Assistant Vice President
Kathleen M. Douglas Assistant Vice President
Terri N. Fiedler Assistant Vice President
Mary E. Gentempo Assistant Vice President
Jeffrey L. Horne Assistant Vice President
Melissa E. Hudson Assistant Vice President
Jodie L. Johnson Assistant Vice President
Kathryn A. Jordan Assistant Vice President
Wayne W. LaPlante Assistant Vice President
</TABLE>
C-5
<PAGE>
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICES WITH
BUSINESS ADDRESS PRINCIPAL UNDERWRITER
- -------------------------------------- ---------------------------------------------------------------------------
<S> <C>
Kim T. Lankford Assistant Vice President
Ivy B. McLemore Assistant Vice President
David B. O'Neil Assistant Vice President
Patricia M. Shyman Assistant Vice President
Nicholas D. White Assistant Vice President
Norman W. Woodson Assistant Vice President
Nancy L. Martin Assistant General Counsel & Assistant Secretary
Samuel D. Sirko Assistant General Counsel & Assistant Secretary
Stephen I. Winer Assistant Secretary
</TABLE>
(c)None.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books, and other records required by Rules 31a-1 and 31a-2 under
the Investment Company Act of 1940, as amended, are maintained and held in the
offices of the Registrant and its sub-adviser, INVESCO (NY), Inc., 50 California
Street, 27th Floor, San Francisco, CA 94111.
Records covering stockholder accounts and portfolio transactions are also
maintained and kept by Registrant's Transfer Agent, GT Global Investor Services,
Inc., 2121 N. California Boulevard, Suite 450, Walnut Creek, CA 94596, and by
the Registrant's Custodian, State Bank and Trust Company, 225 Franklin Street,
Boston, MA 02110.
ITEM 31. MANAGEMENT SERVICES
None.
ITEM 32. UNDERTAKINGS
None.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant hereby certifies
that it meets all of the requirements for effectiveness of this Amendment
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Post-Effective Amendment to this Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of San
Francisco, and the State of California, on the 28th day of May, 1998.
AIM SERIES TRUST
WILLIAM J. GUILFOYLE
- ------------------------------------------------------------------------------
William J. Guilfoyle*
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following person in the
capacities indicated on the 28th day of May, 1998.
WILLIAM J. GUILFOYLE
- ---------------------------------------- President and Trustee
William J. Guilfoyle* (Principal Executive Officer)
/S/ KENNETH W. CHANCEY
- ---------------------------------------- Vice President and Principal
Kenneth W. Chancey Accounting Officer
C. Derek Anderson* Trustee
Arthur C. Patterson* Trustee
Frank S. Bayley* Trustee
Ruth H. Quigley* Trustee
*By: /S/ MICHAEL A. SILVER
-----------------------------------
Michael A. Silver
Attorney-in-Fact, pursuant to
Power of Attorney filed herewith
C-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant hereby certifies
that it meets all of the requirements for effectiveness of this Amendment
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused
this Post-Effective Amendment to this Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of San
Francisco, and the State of California, on the 28th day of May, 1998.
GT GLOBAL SERIES TRUST
WILLIAM J. GUILFOYLE
- ------------------------------------------------------------------------------
William J. Guilfoyle*
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following person in the
capacities indicated on the 28th day of May, 1998.
WILLIAM J. GUILFOYLE President, Trustee and
- ---------------------------------------- Chairman of the Board
William J. Guilfoyle* (Principal Executive Officer)
/S/ KENNETH W. CHANCEY
- ---------------------------------------- Vice President and Principal
Kenneth W. Chancey Accounting Officer
C. Derek Anderson* Trustee
Arthur C. Patterson* Trustee
Frank S. Bayley* Trustee
Ruth H. Quigley* Trustee
Robert G. Wade, Jr.* Trustee
*By: /S/ MICHAEL A. SILVER
-----------------------------------
Michael A. Silver
Attorney-in-Fact, pursuant to
Power of Attorney previously filed
C-8
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ---------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
(1) Registrant's Declaration of Trust dated May 7, 1998 -- Filed herewith.
(2) Registrant's By-Laws dated May 7, 1998 -- Filed herewith.
(3) Not applicable.
(4) Provisions of instruments defining the rights of holders of Registrant's securities are contained in
the Declaration of Trust Articles II, VI, VII, VIII and IX and By-laws Articles IV, V, VI, VII and
VIII included as part of Exhibits (b)(1) and (2) of this Registration Statement.
(5) (a) Form of Investment Management and Administration Contract -- Filed herewith.
(5) (b) Form of Investment Sub-Advisory and Sub-Administration Contract -- Filed herewith.
(6) (a) Form of Distribution Agreement with respect to Class A and Class C shares -- Filed herewith.
(6) (b) Form of Distribution Agreement with respect to Class B shares -- Filed herewith.
(6) (c) Form of Distribution Agreement with respect to Advisor Class shares -- Filed herewith.
(7) Not applicable.
(8) Form of Custodian Agreement between Registrant and State Street Bank and Trust Company -- Filed
herewith.
(9) (a) Transfer Agency Contract (1).
(9) (b) Letter Agreement assigning Transfer Agency Contract -- Filed herewith.
(9) (c) Form of Fund Accounting and Pricing Agent Agreement -- Filed herewith.
(9) (d) Other material contracts:
(i) Form of Selected Dealer Agreement --Filed herewith.
(ii) Form of Bank Sales Contract -- Filed herewith.
(iii) Form of Shareholder Service Agreement -- Filed herewith.
(iv) Form of Bank Shareholder Service Agreement -- Filed herewith.
(v) Form of Service Agreement for Bank Trust Department and for Broker -- To be Filed.
(10) (a) Opinion and Consent of Counsel -- Filed herewith.
(10) (b) Opinion and Consent of Delaware Counsel -- Filed herewith.
(11) Consent of Coopers & Lybrand L.L.P., Independent Accountants -- Filed herewith.
(12) Not applicable.
(13) Letter of Investment Intent (1).
(14) (a) IRA Application -- Filed herewith.
(14) (b) SEP and SARSEP IRA Adoption Agreement -- Filed herewith.
(14) (c) Profit Sharing/Money Purchase Pension Plan -- Filed herewith.
(14) (d) 403(b) Plan -- Filed herewith.
(14) (e) SIMPLE IRA Application -- Filed herewith.
(14) (f) Roth IRA Application -- Filed herewith.
(15) (a) Form of Distribution Plan adopted pursuant to Rule 12b-1 with respect to Class A
and Class C shares -- Filed herewith.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
(15) (b) Form of Distribution Plan adopted pursuant to Rule 12b-1 with respect to Class B shares -- Filed
herewith.
(16) Schedule for Computation of Performance Quotations -- None.
(17) Financial Data Schedule (3).
(18) Multiple Class Plan adopted pursuant to Rule 18f-3 -- Filed herewith.
</TABLE>
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
OF
AIM SERIES TRUST
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and entered into
as of May 7, 1998, among William J. Guilfoyle, C. Derek Anderson, Frank S.
Bayley, Arthur C. Patterson, and Ruth H. Quigley, as Trustees, and each person
who becomes a Shareholder in accordance with the terms hereinafter set forth.
WHEREAS, the parties hereto desire to create a business trust pursuant to
the Delaware Act for the investment and reinvestment of funds contributed
thereto;
NOW, THEREFORE, the Trustees hereby direct that a Certificate of Trust be
filed with the Office of the Secretary of State of Delaware and do hereby
declare that all money and property contributed to the trust hereunder shall be
held and managed in trust under this Agreement for the benefit of the
Shareholders as herein set forth below.
ARTICLE I
NAME, DEFINITIONS, PURPOSE AND CERTIFICATE OF TRUST
Section 1.1. NAME. The name of the business trust created hereby is "AIM
Series Trust," and the Trustees may transact the Trust's affairs in that name.
The Trust shall constitute a Delaware business trust in accordance with the
Delaware Act.
Section 1.2. DEFINITIONS. Whenever used herein, unless otherwise required by
the context or specifically provided:
(a) "Affiliated Person," "Company," "Person," and "Principal Underwriter"
shall have the meanings given them in the 1940 Act, as modified by or
interpreted by any applicable order or orders of the Commission or any
rules or regulations adopted or interpretive releases of the
Commission thereunder. The term "Commission" shall have the meaning
given it in the 1940 Act;
(b) "Agreement" means this Agreement and Declaration of Trust, as it may
be amended from time to time;
(c) "Bylaws" means the Bylaws referred to in Article IV, Section 4.1(e)
hereof, as from time to time amended;
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(d) "Class" means a portion of Shares of a Portfolio of the Trust
established in accordance with the provisions of Article II,
Section 2.3(b) hereof;
(e) "Covered Person" means every person who is, or has been, a Trustee or
an officer or employee of the Trust;
(f) The "Delaware Act" refers to the Delaware Business Trust Act, 12 Del.
C.Section 3801 et seq., as such Act may be amended from time to time;
(g) "Majority Shareholder Vote" means "the vote of a majority of the
outstanding voting securities" (as defined in the 1940 Act) of the
Trust, Portfolio, or Class, as applicable;
(h) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time;
(i) "Outstanding Shares" means Shares shown on the books of the Trust or
its transfer agent as then issued and outstanding, but does not
include Shares that have been repurchased or redeemed by the Trust;
(j) "Portfolio" means a series of Shares of the Trust established in
accordance with the provisions of Article II, Section 2.3(a) hereof;
(k) "Shareholder" means a record owner of Outstanding Shares of the Trust;
(l) "Shares" means, as to a Portfolio or any Class thereof, the equal
proportionate transferable units of beneficial interest into which the
beneficial interest of such Portfolio of the Trust or such Class
thereof shall be divided and may include fractions of Shares as well
as whole Shares;
(m) The "Trust" means AIM Series Trust, the Delaware business trust
established hereby, and reference to the Trust, when applicable to one
or more Portfolios, shall refer to each such Portfolio;
(n) The "Trustees" means the Persons who have signed this Agreement as
trustees so long as they shall continue to serve as trustees of the
Trust in accordance with the terms hereof, and all other Persons who
may from time to time be duly appointed as Trustee in accordance with
the provisions of Article III, Section 3.4 hereof or elected as
Trustee in accordance with the provisions of Article III, Section 3.6
hereof, and reference herein to a Trustee or to the Trustees shall
refer to such Persons in their capacity as Trustees hereunder; and
(o) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account
of the Trust or any Portfolio, or by the Trustees on behalf of the
Trust or any Portfolio.
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Section 1.3. PURPOSE. The purpose of the Trust is to conduct, operate and
carry on the business of a management investment company registered under the
1940 Act through one or more Portfolios investing primarily in securities and to
carry on such other business as the Trustees may from time to time determine
pursuant to their authority under this Agreement.
Section 1.4. CERTIFICATE OF TRUST. Immediately upon the execution of this
Agreement, the Trustees shall file a Certificate of Trust with respect to the
Trust in the Office of the Secretary of State of the State of Delaware pursuant
to the Delaware Act.
ARTICLE II
BENEFICIAL INTEREST
Section 2.1. SHARES OF BENEFICIAL INTEREST. The beneficial interest in
the Trust shall be divided into an unlimited number of Shares, with par value of
$0.01 per Share. The Trustees may, from time to time, (a) authorize the
division of the Shares into one or more series, each of which constitutes a
Portfolio, in accordance with Article II, Section 2.3(a) hereof, and (b) may
further authorize the division of the Shares of any Portfolio into one or more
separate and distinct Classes, in accordance with Article II, Section 2.3(b)
hereof. All Shares issued hereunder, including without limitation, Shares
issued in connection with a dividend or other distribution in Shares or a split
or reverse split of Shares, shall be fully paid and nonassessable.
Section 2.2. ISSUANCE OF SHARES. The Trustees in their discretion may,
from time to time, without vote of the Shareholders, issue Shares, in addition
to the then issued and outstanding Shares and Shares held in the treasury, to
such party or parties and for such amount and type of consideration, subject to
applicable law, including cash or securities, at such time or times and on such
terms as the Trustees may deem appropriate, and may in such manner acquire other
assets (including the acquisition of assets subject to, and in connection with,
the assumption of liabilities) and businesses. In connection with any issuance
of Shares, the Trustees may issue fractional Shares and Shares held in the
treasury. The Trustees may from time to time divide or combine the Shares into
a greater or lesser number without thereby changing the proportionate beneficial
interests in the Trust. Contributions to the Trust may be accepted for, and
Shares shall be redeemed as, whole Shares and/or 1/1,000th of a Share or
integral multiples thereof.
Section 2.3. ESTABLISHMENT OF PORTFOLIOS AND CLASSES. (a) The Trust
shall consist of one or more separate and distinct Portfolios, each with an
unlimited number of Shares unless otherwise specified. The Trustees hereby
establish and designate the Portfolios listed on Schedule A attached hereto and
made a part hereof ("Schedule A"). Each additional Portfolio shall be
established by the adoption of a resolution by the Trustees and shall be
effective upon the date stated therein (or, if no such date is stated, upon the
date of such adoption). The Shares of each Portfolio shall have the relative
rights and preferences provided for herein and such rights and preferences as
may be designated by the Trustees. The Trust shall maintain separate and
distinct records for each Portfolio and shall hold and account for the assets
belonging thereto separately from the other Trust Property and the assets
belonging to any other Portfolio. Each Share of a Portfolio shall represent an
equal
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beneficial interest in the net assets belonging to that Portfolio, except to the
extent of expenses separately allocated to Classes thereof as permitted herein.
A Portfolio may have exclusive voting rights with respect to matters affecting
only that Portfolio.
(b) The Trustees may divide the Shares of any Portfolio into two or more
Classes, each with an unlimited number of Shares unless otherwise specified.
Each Class so established and designated shall represent a Proportionate
Interest (as defined in Article II, Section 2.3.2(c) hereof) in the net assets
belonging to that Portfolio and shall have identical voting, dividend,
liquidation, and other rights and be subject to the same terms and conditions,
except that (1) expenses, costs, charges, and reserves allocated to a Class in
accordance with Article II, Section 2.3.2(d) hereof may be borne solely by that
Class, (2) dividends declared and payable to a Class pursuant to Article VII,
Section 7.1, shall reflect the items separately allocated thereto pursuant to
the preceding clause, (3) each Class may have separate rights to convert to
another Class, exchange rights, and similar rights, each as determined by the
Trustees, and (4) each Class may have exclusive voting rights with respect to
matters affecting only that Class. The Trustees hereby establish for each
Portfolio listed on Schedule A the Classes listed thereon. Each additional
Class for any or all Portfolios shall be established by the adoption of a
resolution by the Trustees and shall be effective upon the date stated therein
(or, if no such date is stated, upon the date of such adoption).
Section 2.3.1. Subject to Article VI, Section 6.1 of this Agreement, the
Trustees shall have full power and authority, in their sole discretion without
obtaining any prior authorization or vote of the Shareholders of any Portfolio,
or Class thereof, to establish and designate and to change in any manner any
Portfolio of Shares, or any Class or Classes thereof; to fix such preferences,
voting powers, rights, and privileges of any Portfolio, or Classes thereof, as
the Trustees may from time to time determine (but the Trustees may not change
the preferences, voting powers, rights, and privileges of Outstanding Shares in
a manner materially adverse to the Shareholders of such Shares without the prior
approval of the affected Shareholders); to divide or combine the Shares of any
Portfolio, or Classes thereof, into a greater or lesser number; to classify or
reclassify any issued Shares of any Portfolio, or Classes thereof, into one or
more Portfolios or Classes of Shares of a Portfolio; and to take such other
action with respect to the Shares as the Trustees may deem desirable. A
Portfolio and any Class thereof may issue any number of Shares but need not
issue any shares. At any time that there are no Outstanding Shares of any
particular Portfolio or Class previously established and designated, the
Trustees may abolish that Portfolio or Class and the establishment and
designation thereof.
Section 2.3.2. Unless the establishing resolution or any other resolution
adopted pursuant to this Section 2.3 otherwise provides, Shares of each
Portfolio or Class thereof established hereunder shall have the following
relative rights and preferences:
(a) Shareholders shall have no preemptive or other right to subscribe to
any additional Shares or other securities issued by the Trust or the
Trustees, whether of the same or other Portfolio (or Class).
(b) All consideration received by the Trust for the issue or sale of
Shares of a particular Portfolio, together with all assets in which
such consideration is invested or
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reinvested, all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange, or liquidation
of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
be held and accounted for separately from the other assets of the
Trust and of every other Portfolio and may be referred to herein as
"assets belonging to" that Portfolio. The assets belonging to a
particular Portfolio shall belong to that Portfolio for all purposes,
and to no other Portfolio, subject only to the rights of creditors of
that Portfolio. In addition, any assets, income, earnings, profits, or
funds, or payments and proceeds with respect thereto, which are not
readily identifiable as belonging to any particular Portfolio shall be
allocated by the Trustees between and among one or more of the
Portfolios for all purposes and such assets, income, earnings,
profits, or funds, or payments and proceeds with respect thereto,
shall be assets belonging to that Portfolio.
(c) Each Class of a Portfolio shall have a proportionate undivided
interest (as determined by or at the direction of, or pursuant to
authority granted by, the Trustees, consistent with industry practice)
("Proportionate Interest") in the net assets belonging to that
Portfolio. References herein to assets, expenses, charges, costs, and
reserves "allocable" or "allocated" to a particular Class of a
Portfolio shall mean the aggregate amount of such item(s) of the
Portfolio multiplied by the Class's Proportionate Interest.
(d) A particular Portfolio shall be charged with the liabilities of that
Portfolio, and all expenses, costs, charges and reserves attributable
to any particular Portfolio shall be borne by such Portfolio; provided
that the Trustees may, in their sole discretion, allocate or authorize
the allocation of particular expenses, costs, charges and/or reserves
of a Portfolio to less than all the Classes thereof, in which event
payment or other discharge of the expense(s), cost(s), charge(s)
and/or reserve(s) allocated to a particular Class shall be chargeable
first against the assets allocable to that Class and shall be
chargeable against the assets allocable to the other Classes of that
Portfolio only to the extent the amount of the payment or other
discharge exceeds such particular Class's allocable assets. Any
general liabilities, expenses, costs, charges or reserves of the Trust
(or any Portfolio) that are not readily identifiable as chargeable to
or bearable by any particular Portfolio (or any particular Class)
shall be allocated and charged by the Trustees between or among any
one or more of the Portfolios (or Classes) in such manner as the
Trustees in their sole discretion deem fair and equitable. Each such
allocation shall be conclusive and binding upon the Shareholders of
all Portfolios (or Classes) for all purposes. Without limitation of
the foregoing provisions of this Subsection 2.3.2, the debts,
liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a particular Portfolio shall be
enforceable against the assets of such Portfolio only, and not against
the assets of the Trust generally or the assets belonging to any other
Portfolio. Notice of this contractual limitation on inter-Portfolio
liabilities shall be set forth in the Certificate of Trust described
in Article I, Section 1.4 of this Agreement (whether originally or by
amendment), and upon the giving of such
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notice in the Certificate of Trust, the statutory provisions of
Section 3804 of the Delaware Act relating to limitations on
inter-Portfolio liabilities (and the statutory effect under
Section 3804 of setting forth such notice in the Certificate of Trust)
shall become applicable to the Trust and each Portfolio.
All references to Shares in this Agreement shall be deemed to be shares of
any or all Portfolios, or Classes thereof, as the context may require. All
provisions herein relating to the Trust shall apply equally to each Portfolio of
the Trust, and each Class thereof, except as the context otherwise requires.
Section 2.4. INVESTMENT IN THE TRUST. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as the Trustees from time to time may authorize. At the
Trustees' sole discretion, such investments, subject to applicable law, may be
in the form of cash or securities in which the affected Portfolio is authorized
to invest, valued as provided in applicable law. Each such investment shall be
credited to the individual Shareholder's account in the form of full and
fractional Shares of the Trust, in such Portfolio (or Class) as the Shareholder
shall select.
Section 2.5. PERSONAL LIABILITY OF SHAREHOLDERS. As provided by
applicable law, no Shareholder of the Trust shall be personally liable for the
debts, liabilities, obligations, and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or any Portfolio (or Class)
thereof. Neither the Trust nor the Trustees, nor any officer, employee, or
agent of the Trust shall have any power to bind personally any Shareholder or,
except as provided herein or by applicable law, to call upon any Shareholder for
the payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay by way of subscription for
any Shares or otherwise. The Shareholders shall be entitled, to the fullest
extent permitted by applicable law, to the same limitation of personal liability
as is extended under the Delaware General Corporation Law to stockholders of
private corporations for profit. Every note, bond, contract, or other
undertaking issued by or on behalf of the Trust or the Trustees relating to the
Trust or to any Portfolio shall include a recitation limiting the obligation
represented thereby to the Trust and its assets or to one or more Portfolios and
the assets belonging thereto (but the omission of such a recitation shall not
operate to bind any Shareholder or Trustee of the Trust).
Section 2.6. ASSENT TO AGREEMENT. Every Shareholder, by virtue of having
purchased a Share, shall be held to have expressly assented to, and agreed to be
bound by, the terms hereof. The death of a Shareholder during the continuance
of the Trust shall not operate to terminate the same nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to
rights of said decedent under this Trust.
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ARTICLE III
THE TRUSTEES
Section 3.1. MANAGEMENT OF THE TRUST. The Trustees shall have exclusive
and absolute control over the Trust Property and over the business of the Trust
to the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Agreement. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, in any
and all commonwealths, territories, dependencies, colonies, or possessions of
the United States of America, and in any and all foreign jurisdictions and to do
all such other things and execute all such instruments as they deem necessary,
proper or desirable in order to promote the interests of the Trust although such
things are not herein specifically mentioned. Any determination as to what is in
the interests of the Trust made by the Trustees in good faith shall be
conclusive. In construing the provisions of this Agreement, the presumption
shall be in favor of a grant of power to the Trustees.
The enumeration of any specific power in this Agreement shall not be
construed as limiting the aforesaid power. The powers of the Trustees may be
exercised without order of or resort to any court or other authority.
Section 3.2. INITIAL TRUSTEES. The initial Trustees shall be the persons
named herein.
Section 3.3. TERMS OF OFFICE OF TRUSTEES. The Trustees shall hold office
during the lifetime of this Trust, and until its termination as herein provided;
except (a) that any Trustee may resign his trusteeship or may retire by written
instrument signed by him and delivered to the other Trustees, which shall take
effect upon such delivery or upon such later date as is specified therein; (b)
that any Trustee may be removed at any time by written instrument, signed by at
least two-thirds of the number of Trustees prior to such removal, specifying the
date when such removal shall become effective; (c) that any Trustee who has
died, become physically or mentally incapacitated by reason of disease or
otherwise, or is otherwise unable to serve, may be retired by written instrument
signed by a majority of the other Trustees, specifying the date of his
retirement; and (d) that a Trustee may be removed at any meeting of the
Shareholders of the Trust by a vote of the Shareholders owning at least
two-thirds of the Outstanding Shares.
Section 3.4. VACANCIES AND APPOINTMENT OF TRUSTEES. A vacancy shall occur
in case of the declination to serve, death, resignation, retirement or removal
of a Trustee, or a Trustee is otherwise unable to serve, or an increase in the
number of Trustees. Whenever a vacancy in the Board of Trustees shall occur,
until such vacancy is filled, the other Trustees shall have all the powers
hereunder and the certification of the other Trustees of such vacancy shall be
conclusive. In the case of an existing vacancy, the remaining Trustees may fill
such vacancy by appointment of such other person as they in their discretion
shall see fit, or may leave such vacancy unfilled or may reduce the number of
Trustees to not less than two (2) Trustees. Such appointment shall be evidenced
by a written instrument signed by a majority of the Trustees in office or by
resolution of the Trustees,
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duly adopted, which shall be recorded in the minutes of a meeting of the
Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation, or
removal of a Trustee or an increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at the time or
after the expected vacancy occurs. As soon as any Trustee appointed pursuant to
this Section 3.4 shall have accepted this appointment in writing and agreed in
writing to be bound by the terms of the Agreement, the Trust estate shall vest
in the new Trustee or Trustees, together with the continuing Trustees, without
any further act or conveyance, and he shall be deemed a Trustee hereunder.
Section 3.5. TEMPORARY ABSENCE OF TRUSTEE. Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any one
time to any other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as herein
otherwise expressly provided.
Section 3.6. NUMBER OF TRUSTEES. The number of Trustees shall initially
be five (5), and thereafter shall be such number as shall be fixed from time to
time by a majority of the Trustees; provided, however, that the number of
Trustees shall in no event be less than two (2) nor more than twelve (12). The
Shareholders shall elect the Trustees (other than the initial Trustees) on such
dates as the Trustees may fix from time to time.
Section 3.7. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE. The
declination to serve, death, resignation, retirement, removal, incapacity, or
inability of the Trustees, or any one of them, shall not operate to terminate
the Trust or to revoke any existing agency created pursuant to the terms of this
Trust Agreement.
Section 3.8. OWNERSHIP OF ASSETS OF THE TRUST. The assets of the Trust
and of each Portfolio thereof shall be held separate and apart from any assets
now or hereafter held in any capacity other than as Trustee hereunder by the
Trustees or any successor Trustees. Legal title in all of the assets of the
Trust and the right to conduct any business shall at all times be considered as
vested in the Trustees on behalf of the Trust, except that the Trustees may
cause legal title to any Trust Property to be held by, or in the name of the
Trust, or in the name of any Person as nominee. No Shareholder shall be deemed
to have a severable ownership in any individual asset of the Trust, or belonging
to any Portfolio, or allocable to any Class thereof, or any right of partition
or possession thereof, but each Shareholder shall have, except as otherwise
provided for herein, a proportionate undivided beneficial interest in the Trust
or in the assets belonging to the Portfolio (or allocable to the Class) in which
the Shareholder holds Shares. The Shares shall be personal property giving only
the rights specifically set forth in this Agreement or the Delaware Act.
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ARTICLE IV
POWERS OF THE TRUSTEES
Section 4.1. POWERS. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust. Without
limiting the foregoing and subject to any applicable limitation in this
Agreement or the Bylaws of the Trust, the Trustees shall have power and
authority:
(a) To invest and reinvest cash and other property, and to hold cash or
other property uninvested, without in any event being bound or limited
by any present or future law or custom in regard to investments by
Trustees, and to sell, exchange, lend, pledge, mortgage, hypothecate,
write options on, and lease any or all of the assets of the Trust;
(b) To operate as, and to carry on the business of, an investment company,
and exercise all the powers necessary and appropriate to the conduct
of such operations;
(c) To borrow money and in this connection issue notes or other evidence
of indebtedness; to secure borrowings by mortgaging, pledging, or
otherwise subjecting as security the Trust Property; to endorse,
guarantee, or undertake the performance of an obligation or engagement
of any other Person and to lend Trust Property;
(d) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereafter provided for
or by the Trust itself, or both, or otherwise pursuant to a plan of
distribution of any kind;
(e) To adopt Bylaws not inconsistent with this Agreement providing for the
conduct of the business of the Trust and to amend and repeal them to
the extent that they do not reserve such right to the shareholders;
such Bylaws shall be deemed incorporated and included in this
Agreement;
(f) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies that are
members of a national securities exchange, or such other domestic or
foreign entities as custodians of any assets of the Trust subject to
any conditions set forth in this Agreement or in the Bylaws;
(h) To retain one or more transfer agents or Shareholder servicing agents,
or both;
(i) To set record dates in the manner provided herein or in the Bylaws;
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(j) To delegate such authority as they consider desirable to any officers
of the Trust and to any investment adviser, manager, administrator,
custodian, underwriter, or other agent or independent contractor;
(k) To sell or exchange any or all of the assets of the Trust, subject to
the provisions of Article VI, Section 6.1 hereof;
(l) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies and powers of attorney to such person or persons as
the Trustees shall deem proper, granting to such person or persons
such power and discretion with relation to securities or property as
the Trustee shall deem proper;
(m) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any trust,
whether in bearer, book entry, unregistered, or other negotiable form;
or either in the name of the Trust or of a Portfolio or of a custodian
or a nominee or nominees, subject in either case to proper safeguards
according to the usual practice of Delaware business trusts or
investment companies;
(o) To establish separate and distinct Portfolios with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article II hereof and to establish
Classes of such Portfolios having relative rights, powers, and duties
as they may provide consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware Act, to
allocate assets, liabilities, and expenses of the Trust to a
particular Portfolio or to apportion the same between or among two or
more Portfolios, provided that any liabilities or expenses incurred by
a particular Portfolio shall be payable solely out of the assets
belonging to that Portfolio as provided for in Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation, or merger of any corporation or concern, any security
of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not
limited to, claims for taxes;
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(s) To declare and pay dividends and make distributions of income and of
capital gains and capital to Shareholders in the manner hereinafter
provided;
(t) To establish, from time to time, a minimum investment for Shareholders
in the Trust or in one or more Portfolios or Classes, and to require
the redemption of the Shares of any Shareholder whose investment is
less than such minimum upon giving notice to such Shareholder;
(u) Subject to the requirements of the 1940 Act, to establish one or more
committees, to delegate any of the powers of the Trustees to said
committees, and to adopt a committee charter providing for such
responsibilities, membership (including Trustees, officers, or other
agents of the Trust therein) and any other characteristics of said
committees as the Trustees may deem proper. Notwithstanding the
provisions of this Article IV, and in addition to such provisions or
any other provision of this Agreement or of the Bylaws, the Trustees
may by resolution appoint a committee consisting of less than the
whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if the
acts of such committee were the acts of all the Trustees then in
office, with respect to the institution, prosecution, dismissal,
settlement, review, or investigation of any action, suit, or
proceeding which shall be pending or threatened to be brought before
any court, administrative agency, or other adjudicatory body;
(v) To interpret the investment policies, practices or limitations of any
Portfolios;
(w) To establish a registered office and have a registered agent in the
State of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable, or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore
set forth, either alone or in association with others, and to do every
other act or thing incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes, objects, or powers.
The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by one or
more of the Trustees in their capacity as such hereunder shall be deemed an
action on behalf of the Trust or the applicable Portfolio, and not an action in
an individual capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
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No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see to the application
of any payments made or property transferred to the Trustees or upon their
order.
Section 4.2. ISSUANCE AND REPURCHASE OF SHARES. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, and otherwise deal in Shares and, subject to the
provisions set forth in Articles II and VII, to apply to any such repurchase,
redemption, retirement, cancellation, or acquisition of Shares any funds or
property of the Trust, or any assets belonging to the particular Portfolio or
any assets allocable to the particular Class, with respect to which such Shares
are issued.
Section 4.3. ACTION BY THE TRUSTEES. The Trustees shall act by majority
vote of those present at a meeting duly called (including a meeting by
telephonic or other electronic means, unless the 1940 Act requires that a
particular action be taken only at a meeting of the Trustees in person) at which
a quorum is present or by unanimous written consent of the Trustees (or by
written consent of a majority of the Trustees if the President of the Trust
determines that such exceptional circumstances exist, and are of such urgency,
as to make unanimous written consent impossible or impractical, which
determination shall be conclusive and binding on all Trustees and not otherwise
subject to challenge) without a meeting. A majority of the Trustees shall
constitute a quorum at any meeting. Meetings of the Trustees may be called
orally or in writing by the President of the Trust or by any two Trustees.
Notice of the time, date, and place of all meetings of the Trustees shall be
given to each Trustee by telephone, facsimile, electronic-mail, or other
electronic mechanism sent to his or her home or business address at least
twenty-four hours in advance of the meeting or in person at another meeting of
the Trustees or by written notice mailed to his or her home or business address
at least seventy-two hours in advance of the meeting. Notice need not be given
to any Trustee who attends the meeting without objecting to the lack of notice
or who signs a waiver of notice either before or after the meeting. Subject to
the requirements of the 1940 Act, the Trustees by majority vote may delegate to
any Trustee or Trustees authority to approve particular matters or take
particular actions on behalf of the Trust. Any written consent or waiver may be
provided and delivered to the Trust by any means by which notice may be given to
a Trustee.
Section 4.4. PRINCIPAL TRANSACTIONS. The Trustees may, on behalf of the
Trust, buy any securities from or sell any securities to, or lend any assets of
the Trust to, any Trustee or officer of the Trust or any firm of which any such
Trustee or officer is a member acting as principal, or have any such dealings
with any investment adviser, distributor, or transfer agent for the Trust or
with any Affiliated Person of such Person; and the Trust may employ any such
Person, or firm or Company in which such Person is an Affiliated Person, as
broker, legal counsel, registrar, investment adviser, distributor,
administrator, transfer agent, dividend disbursing agent, custodian, or in any
capacity upon customary terms, subject in all cases to applicable laws, rules,
and regulations and orders of regulatory authorities.
Section 4.5. PAYMENT OF EXPENSES BY THE TRUST. The Trustees are
authorized to pay or cause to be paid out of the principal or income of the
Trust or any Portfolio, or partly out of the principal and partly out of income,
and to charge or allocate to, between or among such one or more of the
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Portfolios (or Classes), as they deem fair, all expenses, fees, charges, taxes,
and liabilities incurred or arising in connection with the Trust or Portfolio
(or Class), or in connection with the management thereof, including, but not
limited, to the Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, investment adviser and manager,
administrator, principal underwriter, auditors, counsel, custodian, transfer
agent, Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur.
Section 4.6. TRUSTEE COMPENSATION. The Trustees as such shall be entitled
to reasonable compensation from the Trust. They may fix the amount of their
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, administrative, legal, accounting, investment
banking, underwriting, brokerage, or investment dealer or other services and the
payment for the same by the Trust.
ARTICLE V
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND
TRANSFER AGENT
Section 5.1. INVESTMENT ADVISER. Subject to any vote of the Shareholders
pursuant to Article VI, Section 6.1(3) that is required by the 1940 Act, the
Trustees may in their discretion, from time to time, enter into an investment
advisory or management contract or contracts with respect to the Trust or any
Portfolio whereby the other party or parties to such contract or contracts shall
undertake to furnish the Trustees with such management, investment advisory,
statistical, and research facilities and services and such other facilities and
services, if any, and all upon such terms and conditions, as the Trustees may in
their discretion determine.
The Trustees may authorize the investment adviser to employ, from time to
time, one or more sub-advisers to perform such of the acts and services of the
investment adviser, and upon such terms and conditions, as may be agreed upon
among the Trustees, the investment adviser, and the sub-adviser. Any references
in this Agreement to the investment adviser shall be deemed to include such
sub-advisers, unless the context otherwise requires.
Section 5.2. OTHER SERVICE CONTRACTS. The Trustees may authorize the
engagement of a principal underwriter, transfer agent, administrator, custodian,
and similar service providers.
Section 5.3. PARTIES TO CONTRACT. Any contract of the character described
in Sections 5.1 and 5.2 of this Article V may be entered into with any
corporation, firm, partnership, trust, or association, although one or more of
the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract.
Section 5.4. MISCELLANEOUS. The fact that (i) any of the Shareholders,
Trustees, or officers of the Trust is a shareholder, director, officer, partner,
trustee, employee, manager, adviser, principal underwriter or distributor, or
agent of or for any Company or of or for any parent or affiliate of any Company,
with which an advisory or administration contract, or principal
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underwriter's or distributor's contract, or transfer, shareholder servicing,
custodian, or other agency contract may have been or may hereafter be made, or
that any such Company, or any parent or affiliate thereof, is a Shareholder or
has an interest in the Trust, or that (ii) any Company with which an advisory or
administration contract or principal underwriter's or distributor's contract, or
transfer, shareholder servicing, custodian, or other agency contract may have
been or may hereafter be made also has an advisory or administration contract,
or principal underwriter's or distributor's contract, or transfer, shareholder
servicing, custodian, or other agency contract with one or more other companies,
or has other business or interests shall not affect the validity of any such
contract or disqualify any Shareholder, Trustee, or officer of the Trust from
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.
ARTICLE VI
SHAREHOLDERS' VOTING POWERS AND MEETING
Section 6.1. VOTING POWERS. The Shareholders shall have power to vote
only with respect to (1) the election of Trustees as provided in Article III,
Section 3.6, (2) the removal of a Trustee as provided in Article III,
Section 3.3(d), (3) any investment advisory contract to the extent required by
the 1940 Act, (4) termination of the Trust or a Portfolio or Class thereof as
provided in Article IX, Section 9.3, (5) amendment of this Agreement only as
provided in Article IX, Section 9.7, (6) the sale of all or substantially all
the assets of the Trust or belonging to any Portfolio, unless the primary
purpose of such sale is to change the Trust's domicile or form of organization
or form of business trust; (7) the merger or consolidation of the Trust or any
Portfolio with and into another Company or a series or portfolio thereof, unless
(A) the primary purpose of such merger or consolidation is to change the Trust's
domicile or form of organization or form of business trust, or (B) after giving
effect to such merger or consolidation, based on the number of Outstanding
Shares as of a date selected by the Trustees, the Shareholders of the Trust or
such Portfolio will have a majority of the outstanding shares of the surviving
Company or series or portfolio thereof, as the case may be; and (8) such
additional matters relating to the Trust as may be required by law or as the
Trustees may consider desirable.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may make any action required or permitted by law, this
Agreement or any of the Bylaws of the Trust to be taken by Shareholders.
On any matter submitted to a vote of the Shareholders, all Shares shall be
voted together, except when required by applicable law or when the Trustees have
determined that the matter affects the interests of one or more Portfolios (or
Classes), then only the Shareholders of all such Portfolios (or Classes) shall
be entitled to vote thereon. Each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote, and each fractional Share shall
be entitled to a proportionate fractional vote. The vote necessary to approve
any such matter shall be set forth in this Agreement or in the Bylaws.
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ARTICLE VII
DISTRIBUTIONS AND REDEMPTIONS
Section 7.1. DISTRIBUTIONS. The Trustees may from time to time declare
and pay dividends and make other distributions with respect to any Portfolio, or
Class thereof, which may be from income, capital gains, or capital. The amount
of such dividends or distributions and the payment of them and whether they are
in cash or any other Trust Property shall be wholly in the discretion of the
Trustees. Dividends and other distributions may be paid pursuant to a standing
resolution adopted once or more often as the Trustees determine. All dividends
and other distributions on Shares of a particular Portfolio or Class shall be
distributed pro rata to the Shareholders of that Portfolio or Class, as the case
may be, in proportion to the number of Shares of that Portfolio or Class they
held on the record date established for such payment, provided that such
dividends and other distributions on Shares of a Class shall appropriately
reflect expenses allocated to that Class. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash distribution payout plans,
or similar plans as the Trustees deem appropriate.
Section 7.2. REDEMPTIONS. Any holder of record of Shares of a particular
Portfolio, or Class thereof, shall have the right to require the Trust to redeem
his Shares, or any portion thereof, subject to such terms and conditions as are
set forth in the Bylaws or are prescribed by the Trustees.
Section 7.3. REDEMPTION OF SHARES BY TRUSTEES. Upon the terms and
conditions set forth in the Bylaws, the Trustees may call for the redemption of
the Shares of any Person or may refuse to transfer or issue Shares to any Person
to the extent that the same is necessary to comply with applicable law or
advisable to further the purposes of which the Trust is formed. To the extent
permitted by law, the Trustees may retain the proceeds of any redemption of
Shares required by them for payment of amounts due and owing by a Shareholder to
the Trust or any Portfolio.
Section 7.4. REDEMPTION OF DE MINIMIS ACCOUNTS. If, at any time, when a
request for transfer or redemption of Shares of any Portfolio is received by the
Trust or its agent, the value of the Shares of such Portfolio in a Shareholder's
account is less than Five Hundred Dollars ($500.00), or such greater amount as
the Trustees in their discretion shall have determined in accordance with
Article IV, Section 4.1(t) hereof, after giving effect to such transfer or
redemption, the Trust may, at any time following such transfer or redemption and
upon giving thirty (30) days' notice to the Shareholder, cause the remaining
Shares of such Portfolio in such Shareholder's account to be redeemed at net
asset value and in accordance with such procedures as are set forth in the
Bylaws.
Section 7.5. SUSPENSION OF RIGHT OF REDEMPTION. Notwithstanding
Section 7.2 of this Article VII, the Trustees may postpone payment of the
redemption price and suspend the Shareholders' right to require any Portfolio or
Class to redeem Shares during any period when and to the extent permissible
under the 1940 Act. Any such postponement and suspension shall take effect at
the time the Trustees shall specify, but not later than the close of business on
the business day next following the declaration thereof, and shall continue
until the Trustees declare the end thereof. If the right of redemption is
suspended, a Shareholder may either withdraw his or her request for redemption
or receive payment based on the net asset value per Share next determined after
the suspension terminates.
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ARTICLE VIII
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 8.1. LIMITATION OF LIABILITY. A Trustee, when acting in such
capacity, shall not be personally liable to any person for any act, omission, or
obligation of the Trust or any Trustee; provided, however, that nothing
contained herein or in the Delaware Act shall protect any Trustee against any
liability to the Trust or to Shareholders to which he would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of the office of Trustee
hereunder.
Section 8.2. INDEMNIFICATION OF COVERED PERSONS. Every Covered Person
shall be indemnified by the Trust to the fullest extent permitted by the
Delaware Act and other applicable law.
Section 8.3. INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder or
former Shareholder of the Trust shall be held to be personally liable solely by
reason of his being or having been a Shareholder of the Trust or any Portfolio
or Class and not because of his acts or omissions or for some other reason, the
Shareholder or former Shareholder (or his heirs, executors, administrators, or
other legal representatives, or, in the case of a corporation or other entity,
its corporate or general successor) shall be entitled, out of the assets
belonging to the applicable Portfolio (or allocable to the applicable Class), to
be held harmless from and indemnified against all loss and expense arising from
such liability in accordance with the Bylaws and applicable law. The Trust, on
behalf of the affected Portfolio (or Class), shall, upon request by the
Shareholder, assume the defense of any claim made against the Shareholder for
any act or obligation of that Portfolio (or Class).
ARTICLE IX
MISCELLANEOUS
Section 9.1. TRUST NOT A PARTNERSHIP; TAXATION. It is hereby expressly
declared that a trust and not a partnership is created hereby. No Trustee
hereunder shall have any power to bind personally either the Trust's officers or
any Shareholder. All persons extending credit to, contracting with or having any
claim against the Trust or the Trustees shall look only to the assets of the
appropriate Portfolio or, until the Trustees shall have established any separate
Portfolio, of the Trust for payment under such credit, contract, or claim; and
neither the Shareholders nor the Trustee, nor any of their agents, whether past,
present, or future, shall be personally liable therefor.
It is intended that the Trust, or each Portfolio if there is more than one
Portfolio, be classified for income tax purposes as an association taxable as a
corporation, and the Trustees shall do all things that they, in their sole
discretion, determine are necessary to achieve that objective, including (if
they so determine) electing such classification on Internal Revenue Form 8832.
Any Trustee is hereby authorized to sign such form on behalf of the Trust or any
Portfolio, and the
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Trustees may delegate such authority to any executive officer(s) of any
Portfolio's investment adviser. The Trustees, in their sole discretion and
without the vote or consent of the Shareholders, may amend this Agreement to
ensure that this objective is achieved.
Section 9.2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretion hereunder
in good faith and with reasonable care under the circumstances then prevailing
shall be binding upon everyone interested. Subject to the provisions of
Article VIII hereof and to Section 9.1 of this Article IX, the Trustees shall
not be liable for errors of judgment or mistakes of fact or law. The Trustees
may take advice of counsel or other experts with respect to the meaning and
operation of this Agreement, and subject to the provisions of Article VIII
hereof and Section 9.1 of this Article IX, shall be under no liability for any
act or omission in accordance with such advice or for failing to follow such
advice. The Trustees shall not be required to give any bond as such, nor any
surety if a bond is obtained.
Section 9.3. TERMINATION OF TRUST OR PORTFOLIO OR CLASS. (a) The Trust
or any Portfolio (or Class) may be terminated by (1) a Majority Shareholder Vote
of the Trust or the affected Portfolio (or Class), respectively, or (2) if there
are fewer than 100 Shareholders of record of the Trust or of such terminating
Portfolio (or Class), the Trustees pursuant to written notice to the
Shareholders of the Trust or the affected Portfolio (or Class).
(b) On termination of the Trust or any Portfolio pursuant to paragraph
(a),
(1) the Trust or that Portfolio thereafter shall carry on no business
except for the purpose of winding up its affairs,
(2) the Trustees shall (i) proceed to wind up the affairs of the
Trust or that Portfolio, and all powers of the Trustees under this
Agreement with respect thereto shall continue until such affairs have been
wound up, including the powers to fulfill or discharge the contracts of the
Trust or that Portfolio, (ii) collect its assets or the assets belonging
thereto, (iii) sell, convey, assign, exchange, or otherwise dispose of all
or any part of those assets to one or more persons at public or private
sale for consideration that may consist in whole or in part of cash,
securities, or other property of any kind, (iv) discharge or pay its
liabilities, and (v) do all other acts appropriate to liquidate its
business, and
(3) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities, and refunding
agreements as they deem necessary for their protection, the Trustees shall
distribute the remaining assets ratably among the Shareholders of the Trust
or that Portfolio.
(c) On termination of any Class pursuant to paragraph (a),
(1) the Trust thereafter shall carry on no business with respect to
that Class except for the purpose of winding up its affairs,
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(2) the Trustees shall (i) proceed to wind up all affairs respecting
that Class, and all powers of the Trustees under this Agreement with
respect thereto shall continue until such affairs have been wound up,
including the powers to fulfill or discharge the contracts respecting that
Class, and (ii) do all other acts appropriate to liquidate its business
respecting that Class, and
(3) the Trustees shall distribute ratably among the Shareholders of
that Class, in cash or in kind, an amount equal to the net value of the
assets allocable to that Class (after taking into account any fees,
expenses, or charges allocated thereto), and in connection with any such
distribution in cash the Trustees are authorized to sell, convey, assign,
exchange, or otherwise dispose of such assets of the Portfolio of which
that Class is a part as they deem necessary.
(d) On completion of distribution of the remaining assets pursuant to
paragraph (b)(3) (or the net value of allocable assets pursuant to paragraph
(c)(3)), the Trust or the affected Portfolio (or Class) shall terminate and the
Trustees and the Trust shall be discharged from all further liabilities and
duties hereunder with respect thereto and the rights and interests of all
parties therein shall be canceled and discharged. On termination of the Trust,
following completion of winding up of its business, the Trustees shall cause a
Certificate of Cancellation of the Trust's Certificate of Trust to be filed in
accordance with the Delaware Act, which Certificate may be signed by any one
Trustee.
Section 9.4. SALE OF ASSETS; MERGER AND CONSOLIDATION. Subject to Article
VI, Section 6.1 of this Agreement, the Trustees may cause (i) the Trust or one
or more of its Portfolios to the extent consistent with applicable law to sell
all or substantially all of its assets, or be merged into or consolidated with
another business trust or Company, (ii) the Shares of the Trust or any Portfolio
(or Class) to be converted into beneficial interests in another business trust
(or series thereof) created pursuant to this Section 9.4 of Article IX, or
(iii) the Shares to be exchanged under or pursuant to any state or federal
statute to the extent permitted by law. In all respects not governed by statute
or applicable law, the Trustees shall have power to prescribe the procedure
necessary or appropriate to accomplish a sale of assets, merger or consolidation
including the power to create one or more separate business trusts to which all
or any part of the assets, liabilities, profits or losses of the Trust may be
transferred and to provide for the conversion of Shares of the Trust or any
Portfolio (or Class) into beneficial interests in such separate business trust
or trusts (or series or class thereof).
Section 9.5. FILING OF COPIES, REFERENCES, HEADINGS. The original or a
copy of this Agreement or any amendment hereto or any supplemental Agreement
shall be kept at the office of the Trust where it may be inspected by any
Shareholder. In this Agreement or in any such amendment or supplemental
Agreement, references to this Agreement, and all expressions like "herein,"
"hereof," and "hereunder," shall be deemed to refer to this Agreement as amended
or affected by any such supplemental Agreement. All expressions like "his,"
"he," and "him," shall be deemed to include the feminine and neuter, as well as
masculine, genders. Headings are placed herein for convenience of reference only
and in case of any conflict, the text of this Agreement,
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rather than the headings, shall control. This Agreement may be executed in any
number of counterparts each of which shall be deemed an original.
Section 9.6. GOVERNING LAW. The Trust and this Agreement, and the rights,
obligations and remedies of the Trustees and Shareholders hereunder, are to be
governed by and construed and administered according to the Delaware Act and the
other laws of the State of Delaware; provided, however, that there shall not be
applicable to the Trust, the Trustees, the Shareholders or this Trust Agreement
(a) the provisions of Section 3540 of Title 12 of the Delaware Code or (b) any
provisions of the laws (statutory or common) of the State of Delaware (other
than the Delaware Act) pertaining to trusts which relate to or regulate (i) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (ii) affirmative requirements to post
bonds for trustees, officers, agents, or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding, or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents, or employees of a trust,
(v) the allocation of receipts and expenditures to income or principal,
(vi) restrictions or limitations on the permissible nature, amount, or
concentration of trust investments or requirements relating to the titling,
storage, or other manner of holding of trust assets, or (vii) the establishment
of fiduciary or other standards or responsibilities or limitations on the
indemnification, acts or powers of trustees or other Persons, which are
inconsistent with the limitations of liabilities or authorities and powers of
the Trustees or officers of the Trust set forth or referenced in this Agreement.
The Trust shall be of the type commonly called a "business trust," and
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such a trust under Delaware law. The Trust
specifically reserves the right to exercise any of the powers or privileges
afforded to trusts or actions that may be engaged in by trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege, or action shall not imply that the Trust may not exercise such power
or privilege or take such actions, provided, however, that the exercise of any
such power, privilege, or action shall not otherwise violate applicable law.
Section 9.7. AMENDMENTS. Except as specifically provided herein, the
Trustees may, without any Shareholder vote, amend this Agreement by making an
amendment, an Agreement supplemental hereto, or an amended and restated trust
instrument. Any amendment submitted to Shareholders that the Trustees determine
would affect the Shareholders of less than all Portfolios (or less than all
Classes thereof) shall be authorized by vote of only the Shareholders of the
affected Portfolio(s) (or Class(es)), and no vote shall be required of
Shareholders of any Portfolio (or Class) that is not affected. Notwithstanding
anything else herein to the contrary, any amendment to Article VIII that would
have the effect of reducing the indemnification provided thereby to Covered
Persons or to Shareholders or former Shareholders, and any repeal or amendment
of this sentence shall each require the affirmative vote of Shareholders owning
at least two-thirds of the Outstanding Shares entitled to vote thereon. A
certification signed by a majority of the Trustees setting forth an amendment to
this Agreement and reciting that it was duly adopted by the Shareholders or by
the Trustees as aforesaid, or a copy of this Agreement, as amended, executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
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Section 9.8. PROVISIONS IN CONFLICT WITH LAW. The provisions of this
Agreement are severable, and the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with applicable law the
conflicting provision shall be deemed never to have constituted a part of this
Agreement; provided, however, that such determination shall not affect any of
the remaining provisions of this Agreement or render invalid or improper any
action taken or omitted prior to such determination. If any provision of this
Agreement shall be held invalid or enforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any other
jurisdiction or any other provision of this Agreement in any jurisdiction.
Section 9.9. SHAREHOLDERS' RIGHT TO INSPECT SHAREHOLDER LIST. One or more
Persons who together and for at least six months have been Shareholders of at
least five percent (5%) of the Outstanding Shares of any Class may present to
any officer or resident agent of the Trust a written request for a list of its
Shareholders. Within twenty (20) days after such request is made, the Trust
shall prepare and have available on file at its principal office a list verified
under oath by one of its officers or its transfer agent or registrar which sets
forth the name and address of each Shareholder and the number of Shares of each
Class which the Shareholder holds. The rights provided for herein shall not
extend to any Person who is a beneficial owner but not also a record owner of
Shares of the Trust.
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IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument this 7th day of May, 1998.
------------------------------------
William J. Guilfoyle, as Trustee
------------------------------------
C. Derek Anderson, as Trustee
------------------------------------
Frank S. Bayley, as Trustee
------------------------------------
Ruth H. Quigley, as Trustee
------------------------------------
Arthur C. Patterson, as Trustee
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SCHEDULE A
AIM Series Trust shall be divided into the following Portfolios, each of
which shall have four Classes (Class A, Class B, Class C, and Advisor Class):
AIM New Dimension Fund
Date: May 7, 1998
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BYLAWS
OF
AIM SERIES TRUST,
A DELAWARE BUSINESS TRUST
ADOPTED EFFECTIVE MAY 7, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I OFFICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1. REGISTERED OFFICE. . . . . . . . . . . . . . . . . . . . . . . .1
Section 2. OTHER OFFICES. . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II TRUSTEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1. NUMBER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 2. TERM.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 3. VACANCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 4. DELEGATION OF POWER. . . . . . . . . . . . . . . . . . . . . . .2
Section 5. INABILITY TO SERVE FULL TERM.. . . . . . . . . . . . . . . . . .2
Section 6. POWERS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 7. MEETINGS OF THE TRUSTEES.. . . . . . . . . . . . . . . . . . . .2
Section 8. REGULAR MEETINGS.. . . . . . . . . . . . . . . . . . . . . . . .3
Section 9. QUORUM.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Section 10. ACTION WITHOUT MEETING. . . . . . . . . . . . . . . . . . . . .3
Section 11. DESIGNATION, POWERS, AND NAME OF COMMITTEES.. . . . . . . . . .3
Section 12. MINUTES OF Committee. . . . . . . . . . . . . . . . . . . . . .3
Section 13. COMPENSATION OF TRUSTEES. . . . . . . . . . . . . . . . . . . .4
ARTICLE III OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Section 1. EXECUTIVE OFFICERS.. . . . . . . . . . . . . . . . . . . . . . .4
Section 2. TERM OF OFFICE.. . . . . . . . . . . . . . . . . . . . . . . . .4
Section 3. PRESIDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Section 4. CHAIRMAN OF THE BOARD. . . . . . . . . . . . . . . . . . . . . .4
Section 5. OTHER OFFICERS.. . . . . . . . . . . . . . . . . . . . . . . . .5
Section 6. SECRETARY. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Section 7. TREASURER. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Section 8. SURETY BOND. . . . . . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE IV MEETINGS OF SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . .5
Section 1. PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Section 2. NOMINATIONS OF TRUSTEES. . . . . . . . . . . . . . . . . . . . .6
Section 3. ELECTION OF TRUSTEES.. . . . . . . . . . . . . . . . . . . . . .6
Section 4. NOTICE OF MEETINGS.. . . . . . . . . . . . . . . . . . . . . . .6
Section 5. SPECIAL MEETINGS.. . . . . . . . . . . . . . . . . . . . . . . .6
Section 6. NOTICE OF SPECIAL MEETING. . . . . . . . . . . . . . . . . . . .6
Section 7. CONDUCT OF SPECIAL MEETING.. . . . . . . . . . . . . . . . . . .6
Section 8. QUORUM.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Section 9. ORGANIZATION OF MEETINGS.. . . . . . . . . . . . . . . . . . . .7
Section 10. VOTING STANDARD.. . . . . . . . . . . . . . . . . . . . . . . .7
Section 11. VOTING PROCEDURE. . . . . . . . . . . . . . . . . . . . . . . .7
Section 12. ACTION WITHOUT MEETING. . . . . . . . . . . . . . . . . . . . .8
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ARTICLE V NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Section 1. METHODS OF GIVING NOTICE.. . . . . . . . . . . . . . . . . . . .8
Section 2. WRITTEN WAIVER.. . . . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE VI CERTIFICATES OF SHARES. . . . . . . . . . . . . . . . . . . . . . .8
Section 1. ISSUANCE.. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Section 2. COUNTERSIGNATURE.. . . . . . . . . . . . . . . . . . . . . . . .9
Section 3. LOST CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . .9
Section 4. TRANSFER OF SHARES.. . . . . . . . . . . . . . . . . . . . . . .9
Section 5. FIXING RECORD DATE.. . . . . . . . . . . . . . . . . . . . . . .9
Section 6. REGISTERED SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . .9
ARTICLE VII GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1. DIVIDENDS AND DISTRIBUTIONS. . . . . . . . . . . . . . . . . . 10
Section 2. REDEMPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4. ADVANCE PAYMENTS OF INDEMNIFIABLE EXPENSES.. . . . . . . . . . 10
Section 5. SEAL.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 6. SEVERABILITY.. . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7. HEADINGS.. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VIII AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1. AMENDMENTS.. . . . . . . . . . . . . . . . . . . . . . . . . . 11
ii
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BYLAWS
OF
AIM SERIES TRUST,
A DELAWARE BUSINESS TRUST
Capitalized terms not specifically defined herein
shall have the meanings ascribed to them in the Trust's
Agreement and Declaration of Trust ("Agreement").
ARTICLE I
OFFICES
Section 1. REGISTERED OFFICE. The registered office of AIM Series Trust
(the "Trust") shall be in the County of New Castle, State of Delaware.
Section 2. OTHER OFFICES. The Trust may also have offices at such other
places both within and without the State of Delaware as the Trustees may from
time to time determine or the business of the Trust may require.
ARTICLE II
TRUSTEES
Section 1. NUMBER The number of Trustees shall initially be five, and
thereafter shall be such number as shall be fixed from time to time by
resolution of the Board of Trustees; provided, however, that the number of
Trustees shall in no event be less than two nor more than twelve.
Section 2. TERM. The Trustees shall hold office during the lifetime of
the Trust, except (a) that any Trustee may resign his trusteeship or may retire
by written instrument signed by him and delivered to the other Trustees, which
shall take effect upon such delivery or upon such later date as is specified
therein; (b) that any Trustee may be removed at any time by written instrument,
signed by at least two-thirds of the number of Trustees prior to such removal,
specifying the date when such removal shall become effective; (c) that any
Trustee who has died, become physically or mentally incapacitated by reason of
disease or otherwise, or is otherwise unable to serve, may be retired by written
instrument signed by a majority of the other Trustees, specifying the date of
his retirement; and (d) that a Trustee may be removed at any meeting of the
shareholders of the Trust.
Section 3. VACANCY. In case of the declination to serve, death,
resignation, retirement or removal of a Trustee, or a Trustee is otherwise
unable to serve, or an increase in the number of Trustees, a vacancy shall
occur. Whenever a vacancy in the Trustees shall occur, until such vacancy is
filled, the other Trustees shall have all the powers hereunder and the
certification of
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the other Trustees of such vacancy shall be conclusive. In the case of an
existing vacancy, the remaining Trustees may fill such vacancy by appointing
such other person as they in their discretion shall see fit, or may leave such
vacancy unfilled or may reduce the number of Trustees to not less than two
Trustees. Such appointment shall be evidenced by a written instrument signed by
a majority of the Trustees in office or by resolution of the Trustees, duly
adopted, which shall be recorded in the minutes of a meeting of the Trustees,
whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office in
anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to Sections 2 and 3 of Article II of these Bylaws, or
elected pursuant to Section 3 of Article IV, and the Agreement shall have
accepted this appointment in writing and agreed in writing to be bound by the
terms of the Trust Agreement, the Trust estate shall vest in the new Trustee or
Trustees, together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder.
Section 4. DELEGATION OF POWER. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at any one time to any
other Trustee or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.
Section 5. INABILITY TO SERVE FULL TERM. The declination to serve,
death, resignation, retirement, removal, incapacity, or inability of the
Trustees, or any one of them, shall not operate to terminate the Trust or to
revoke any existing agency created pursuant to the terms of the Agreement.
Section 6. POWERS. The Trustees shall have exclusive and absolute
control over the trust property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the trust property and
business in their own right, but with such powers of delegation as may be
permitted by the Agreement. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, in any
and all commonwealths, territories, dependencies, colonies, or possessions of
the United States of America, and in any foreign jurisdiction and to do all such
other things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of these Bylaws and the Agreement, the presumption
shall be in favor of a grant of power to the Trustees.
Section 7. MEETINGS OF THE TRUSTEES. The Trustees of the Trust may hold
meetings, both regular and special, either within or without the State of
Delaware.
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Section 8. REGULAR MEETINGS. Regular meetings of the Board of Trustees
shall be held each year, at such time and place as the Board of Trustees may
determine.
Section 9. NOTICE OF MEETINGS. Notice of the time, date, and place of
all meetings of the Trustees shall be given to each Trustee by telephone,
facsimile, electronic-mail, or other electronic mechanism sent to his or her
home or business address at least twenty-four hours in advance of the meeting or
in person at another meeting of the Trustees or by written notice mailed to his
or her home or business address at least seventy-two hours in advance of the
meeting.
Section 10. QUORUM. At all meetings of the Trustees, a majority of the
Trustees then in office (but in no event less than two Trustees) shall
constitute a quorum for the transaction of business and the act of a majority of
the Trustees present at any meeting at which there is a quorum shall be the act
of the Board of Trustees, except as may be otherwise specifically provided by
applicable law or by the Agreement or these Bylaws. If a quorum shall not be
present at any meeting of the Board of Trustees, the Trustees present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 11. ACTION WITHOUT MEETING. Unless otherwise restricted by the
Agreement or these Bylaws, any action required or permitted to be taken at any
meeting of the Board of Trustees or of any committee thereof may be taken
without a meeting by unanimous written consent of the Trustees or committee
members (or by written consent of a majority of the Trustees if the President of
the Trust determines that such exceptional circumstances exist, and are of such
urgency, as to make unanimous written consent impossible or impractical, which
determination shall be conclusive and binding on all Trustees and not otherwise
subject to challenge) and the writing or writings are filed with the minutes of
proceedings of the board or committee.
Section 12. DESIGNATION, POWERS, AND NAME OF COMMITTEES. The Board of
Trustees may, by resolution passed by a majority of the whole Board, designate
one or more committees, each committee to consist of two or more of the Trustees
of the Trust. The Board may designate one or more Trustee as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of such committee. Each committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Trustees in
the management of the business and affairs of the Trust; provided, however, that
in the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such members constitute a quorum, may
unanimously appoint another member of the Board of Trustees to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Trustees.
Section 13. MINUTES OF COMMITTEE. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Trustees when
required.
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Section 14. COMPENSATION OF TRUSTEES. The Trustees as such shall be
entitled to reasonable compensation for their services as determined from time
to time by the Board of Trustees. Nothing herein shall in any way prevent the
employment of any Trustee for advisory, management, administrative, legal,
accounting, investment banking, underwriting, brokerage, or investment dealer or
other services and the payment for the same by the Trust.
ARTICLE III
OFFICERS
Section 1. EXECUTIVE OFFICERS. The initial executive officers of the
Trust shall be elected by the Board of Trustees as soon as practicable after the
organization of the Trust. The executive officers may include a Chairman of the
Board, and shall include a President, one or more Vice Presidents (the number
thereof to be determined by the Board of Trustees), a Secretary and a Treasurer.
The Chairman of the Board, if any, shall be selected from among the Trustees.
The Board of Trustees may also in its discretion appoint Assistant Vice
Presidents, Assistant Secretaries, Assistant Treasurers, and other officers,
agents and employees, who shall have such authority and perform such duties as
the Board may determine. The Board of Trustees may fill any vacancy which may
occur in any office. Any two offices, except for those of President and Vice
President, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument on behalf of the Trust in more than one
capacity, if such instrument is required by law or by these Bylaws to be
executed, acknowledged or verified by two or more officers.
Section 2. TERM OF OFFICE. Unless otherwise specifically determined by
the Board of Trustees, the officers shall serve at the pleasure of the Board of
Trustees. If the Board of Trustees in its judgment finds that the best interests
of the Trust will be served, the Board of Trustees may remove any officer of the
Trust at any time with or without cause. The Trustees may delegate this power
to the President with respect to any other officer. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed. Any
officer may resign from office at any time by delivering a written resignation
to the Trustees or the President. Unless otherwise specified therein, such
resignation shall take effect upon delivery.
Section 3. PRESIDENT. The President shall be the chief executive
officer of the Trust and, subject to the Board of Trustees, shall generally
manage the business and affairs of the Trust. If there is no Chairman of the
Board, or if the Chairman of the Board has been appointed but is absent, the
President shall, if present, preside at all meetings of the shareholders and the
Board of Trustees.
Section 4. CHAIRMAN OF THE BOARD. The Chairman of the Board, if any,
shall preside at all meetings of the shareholders and the Board of Trustees, if
the Chairman of the Board is present. The Chairman of the Board shall have such
other powers and duties as shall be determined by the Board of Trustees, and
shall undertake such other assignments as may be requested by the President.
4
<PAGE>
Section 5. OTHER OFFICERS. The Chairman of the Board or one or more
Vice Presidents shall have and exercise such powers and duties of the President
in the absence or inability to act of the President, as may be assigned to them,
respectively, by the Board of Trustees or, to the extent not so assigned, by the
President. In the absence or inability to act of the President, the powers and
duties of the President not otherwise assigned by the Board of Trustees or the
President shall devolve upon the Chairman of the Board, or in the Chairman's
absence, the Vice Presidents in the order of their election.
Section 6. SECRETARY. The Secretary shall (a) have custody of the seal
of the Trust; (b) attend meetings of the shareholders, the Board of Trustees,
and any committees of Trustees and keep the minutes of such meetings of
shareholders, Board of Trustees and any committees thereof; and (c) issue all
notices of the Trust. The Secretary shall have charge of the shareholder records
and such other books and papers as the Board may direct, and shall perform such
other duties as may be incidental to the office or which are assigned by the
Board of Trustees. The Secretary shall also keep or cause to be kept a
shareholder book, which may be maintained by means of computer systems,
containing the names, alphabetically arranged, of all persons who are
shareholders of the Trust, showing their places of residence, the number and
class or series of any class of shares of beneficial interest held by them,
respectively, and the dates when they became the record owners thereof, and such
book shall be open for inspection as prescribed by the laws of the State of
Delaware.
Section 7. TREASURER. The Treasurer shall have the care and custody of
the funds and securities of the Trust and shall deposit the same in the name of
the Trust in such bank or banks or other depositories, subject to withdrawal in
such manner as these Bylaws or the Board of Trustees may determine. The
Treasurer shall, if required by the Board of Trustees, give such bond for the
faithful discharge of duties in such form as the Board of Trustees may require.
Section 8. SURETY BOND. The Trustees may require any officer or agent
of the Trust to execute a bond (including, without limitation, any bond required
by the Investment Company Act of 1940, as amended ("1940 Act") and the rules and
regulations of the Securities and Exchange Commission ("Commission") to the
Trust in such sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his or her duties to the
Trust, including responsibility for negligence and for the accounting of any of
the Trust's property, funds, or securities that may come into his or her hands.
ARTICLE IV
MEETINGS OF SHAREHOLDERS
Section 1. PURPOSE. All meetings of the shareholders for the election
of Trustees shall be held at such place as may be fixed from time to time by the
Trustees, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Trustees and stated in the
notice indicating that a meeting has been called for such purpose. Meetings of
shareholders may be held for any purpose determined by the Trustees and may be
held at such time and place, within or without the State of Delaware as shall be
stated in the notice of the
5
<PAGE>
meeting or in a duly executed waiver of notice thereof. At all meetings of the
shareholders, every shareholder of record entitled to vote thereat shall be
entitled to vote at such meeting either in person or by written proxy signed by
the shareholder or by his duly authorized attorney in fact. A shareholder may
duly authorize such attorney in fact through written, electronic, telephonic,
computerized, facsimile, telecommunication, telex or oral communication or by
any other form of communication. Unless a proxy provides otherwise, such proxy
is not valid more than eleven months after its date. A proxy with respect to
shares held in the name of two or more persons shall be valid if executed by any
one of them unless at or prior to exercise of the proxy the Trust receives a
specific written notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger.
Section 2. NOMINATIONS OF TRUSTEES. Nominations of individuals for
election to the Board of Trustees shall be made by the Board of Trustees or a
nominating committee of the Board of Trustees, if one has been established (the
"Nominating Committee"). Any shareholder of the Trust may submit names of
individuals to be considered by the Nominating Committee or the Board of
Trustees, as applicable, provided, however, (i) that such person was a
shareholder of record at the time of submission of such names and is entitled to
vote at the meeting, and (ii) that the Nominating Committee or the Board of
Trustees, as applicable, shall make the final determination of persons to be
nominated.
Section 3. ELECTION OF TRUSTEES. All meetings of shareholders for the
purpose of electing Trustees shall be held on such date and at such time as
shall be designated from time to time by the Trustees and stated in the notice
of the meeting, at which the shareholders shall elect by a plurality vote any
number of Trustees as the notice for such meeting shall state are to be elected,
and transact such other business as may properly be brought before the meeting
in accordance with Section 1 of this Article IV.
Section 4. NOTICE OF MEETINGS. Written notice of any meeting stating
the place, date, and hour of the meeting shall be given to each shareholder
entitled to vote at such meeting not less than ten days before the date of the
meeting in accordance with Article V hereof.
Section 5. SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by applicable law or by the
Agreement, may be called by any Trustee; provided, however, that the Trustees
shall promptly call a meeting of the shareholders solely for the purpose of
removing one or more Trustees, when requested in writing so to do by the record
holders of not less than ten percent of the outstanding shares of the Trust.
Section 6. NOTICE OF SPECIAL MEETING. Written notice of a special
meeting stating the place, date, and hour of the meeting and the purpose of
purposes for which the meeting is called, shall be given not less than ten days
before the date of the meeting, to each shareholder entitled to vote at such
meeting.
Section 7. CONDUCT OF SPECIAL MEETING. Business transacted at any
special meeting of shareholders shall be limited to the purpose stated in the
notice.
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Section 8. QUORUM. The holders of one-third of the shares of beneficial
interests that are issued and outstanding and entitled to vote thereat, present
in person or represented by proxy, shall constitute a quorum at all meetings of
the shareholders for the transaction of business except as otherwise provided by
applicable law or by the Agreement. If, however, such quorum shall not be
present or represented at any meeting of the shareholders, the vote of the
holders of a majority of shares cast shall have power to adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present or represented. At such adjourned meeting, at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 9. ORGANIZATION OF MEETINGS.
(a) The Chairman of the Board of Trustees shall preside at each
meeting of shareholders. In the absence of the Chairman of the Board, the
meeting shall be chaired by the President, or if the President shall not be
present, by a Vice President. In the absence of all such officers, the meeting
shall be chaired by a person elected for such purpose at the meeting. The
Secretary of the Trust, if present, shall act as Secretary of such meetings, or
if the Secretary is not present, an Assistant Secretary of the Trust shall so
act, and if no Assistant Secretary is present, then a person designated by the
Secretary of the Trust shall so act, and if the Secretary has not designated a
person, then the meeting shall elect a secretary for the meeting.
(b) The Board of Trustees of the Trust shall be entitled to make such
rules and regulations for the conduct of meetings of shareholders as it shall
deem necessary, appropriate or convenient. Subject to such rules and regulations
of the Board of Trustees, if any, the chairman of the meeting shall have the
right and authority to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing: an agenda or order of business for the
meeting; rules and procedures for maintaining order at the meeting and the
safety of those present; limitations on participation in such meeting to
shareholders of record of the Trust and their duly authorized and constituted
proxies, and such other persons as the chairman shall permit; restrictions on
entry to the meeting after the time fixed for the commencement thereof;
limitations on the time allotted to questions or comments by participants; and
regulation of the opening and closing of the polls for balloting on matters
which are to be voted on by ballot, unless and to the extent the Board of
Trustees or the chairman of the meeting determines that meetings of shareholders
shall not be required to be held in accordance with the rules of parliamentary
procedure.
Section 10. VOTING STANDARD. When a quorum is present at any meeting,
the vote of the holders of a majority of the shares cast shall decide any
question brought before such meeting, unless the question is one on which, by
express provision of applicable law, the Agreement, these Bylaws, or applicable
contract, a different vote is required, in which case such express provision
shall govern and control the decision of such question.
Section 11. VOTING PROCEDURE. Each whole share shall be entitled to one
vote, and each fractional share shall be entitled to a proportionate fractional
vote. On any matter submitted to a
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vote of the shareholders, all shares shall be voted together, except when
required by applicable law or when the Trustees have determined that the matter
affects the interests of one or more Portfolios (or Classes), then only the
shareholders of such Portfolios (or Classes) shall be entitled to vote thereon.
Section 12. ACTION WITHOUT MEETING. Unless otherwise provided in the
Agreement or applicable law, any action required to be taken at any meeting of
shareholders of the Trust, or any action which may be taken at any meeting of
such shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of any such action without a meeting by less
than unanimous written consent shall be given to those shareholders who have not
consented in writing.
ARTICLE V
NOTICES
Section 1. METHODS OF GIVING NOTICE. Whenever, under the provisions of
applicable law or of the Agreement or of these Bylaws, notice is required to be
given to any Trustee or shareholder, it shall not, unless otherwise provided
herein, be construed to mean personal notice, but such notice may be given
orally in person, or by telephone (promptly confirmed in writing) or in writing,
by mail addressed to such Trustee or shareholder, at his address as it appears
on the records of the Trust, with postage thereon prepaid, and such notice shall
be deemed to be given at the time when the same shall be deposited in the United
States mail. Notice to Trustees or members of a committee may also be given by
telex, telegram, telecopier or via overnight courier. If sent by telex or
telecopier, notice to a Trustee or member of a committee shall be deemed to be
given upon transmittal; if sent by telegram, notice to a Trustee or member of a
committee shall be deemed to be given when the telegram, so addressed, is
delivered to the telegraph company, and if sent via overnight courier, notice to
a Trustee or member of a committee shall be deemed to be given when delivered
against a receipt therefor.
Section 2. WRITTEN WAIVER. Whenever any notice is required to be given
under the provisions of applicable law or of the Agreement or of these Bylaws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE VI
CERTIFICATES OF SHARES
Section 1. ISSUANCE. Upon request, every holder of shares in the Trust
shall be entitled to have a certificate, signed by, or in the name of the Trust
by, a Trustee, certifying the number of shares owned by him in the Trust.
8
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Section 2. COUNTERSIGNATURE. Where a certificate is countersigned (1)
by a transfer agent other than the Trust or its employee, or, (2) by a registrar
other than the Trust or its employee, the signature of the Trustee may be a
facsimile.
Section 3. LOST CERTIFICATES. The Board of Trustees may direct a new
certificate or certificates to be issued in place of any certificate or
certificates therefore issued by the Trust alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of the fact by the person claiming
the certificate to be lost, stolen or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Trustees may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
to give the Trust a bond in such sum as it may direct as indemnity against any
claim that may be made against the Trust with respect to the certificate alleged
to have been lost, stolen or destroyed.
Section 4. TRANSFER OF SHARES. The Trustees shall make such rules as
they consider appropriate for the transfer of shares and similar matters. To the
extent certificates are issued in accordance with Section 1 of this Article VI,
upon surrender to the Trust or the transfer agent of the Trust of such
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Trust to issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 5. FIXING RECORD DATE. In order that the Trustees may determine
the shareholders entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or to express consent to action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution of
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of beneficial interests or for the purpose of any
other lawful action, the Board of Trustees may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Trustees, and which record date shall not be more
than ninety nor less than ten days before the date of such meeting, nor more
than ten days after the date upon which the resolution fixing the record date is
adopted by the Board of Trustees for action by shareholder consent in writing
without a meeting, nor more than ninety days prior to any other action. A
determination of shareholders of record entitled to notice of or to vote at a
meeting of shareholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Trustees may fix a new record date for the adjourned
meeting.
Section 6. REGISTERED SHAREHOLDERS. The Trust shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice hereof, except as otherwise provided by
the laws of Delaware.
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ARTICLE VII
GENERAL PROVISIONS
1. DIVIDENDS AND OTHER DISTRIBUTIONS. The Trustees may from time to
time declare and pay dividends and make other distributions with respect to any
Portfolio, or Class thereof, which may be from income, capital gains or capital.
The amount of such dividends or other distributions and the payment of them and
whether they are in cash or any other Trust Property shall be wholly in the
discretion of the Trustees.
2. REDEMPTIONS. Any holder of record of shares of a particular
Portfolio, or Class thereof, shall have the right to require the Trust to redeem
his shares, or any portion thereof, subject to the terms and conditions set
forth in the registration statement in effect from time to time. The redemption
price may in any case or cases be paid wholly or partly in kind if the Trustees
determine that such payment is advisable in the interest of the remaining
shareholders of the Portfolio or Class thereof for which the shares are being
redeemed. Subject to the foregoing, the fair value, selection and quantity of
securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any Person in transferring
securities selected for delivery as all or part of any payment in kind.
The Trustees may, at their option, and at any time, have the right to
redeem shares of any shareholder of a particular Portfolio or Class thereof in
accordance with Section 2 of this Article VII. The Trustees may refuse to
transfer or issue shares to any person to the extent that the same is necessary
to comply with applicable law or advisable to further the purposes for which the
Trust is formed.
If, at any time when a request for transfer or redemption of Shares of any
Portfolio is received by the Trust or its agent, the value of the shares of such
Portfolio in a Shareholder's account is less than Five Hundred Dollars
($500.00), after giving effect to such transfer or redemption, the Trust may, at
any time following such transfer or redemption and upon giving thirty (30) days'
notice to the Shareholder, cause the remaining Shares of such Portfolio in such
Shareholder's account to be redeemed at net asset value in accordance with such
procedures set forth above.
Section 3. INDEMNIFICATION. Every person who is, or has been, a Trustee
or officer of the Trust shall be indemnified by the Trust to the fullest extent
permitted by the Delaware Business Trust Act, these Bylaws and other applicable
law.
Section 4. ADVANCE PAYMENTS OF INDEMNIFIABLE EXPENSES. To the maximum
extent permitted by the Delaware Act and other applicable law, the Trust or
applicable Portfolio may advance to a Covered Person, in connection with the
preparation and presentation of a defense to any claim, action, suit, or
proceeding, expenses for which the Covered Person would ultimately be entitled
to indemnification; provided that the Trust or applicable Portfolio has received
an undertaking by or on behalf of such Covered Person that such amount will be
paid over by him to the Trust or applicable Portfolio if it is ultimately
determined that he is not entitled to
10
<PAGE>
indemnification for such expenses, and further provided that (i) such Covered
Person shall have provided appropriate security for such undertaking, (ii) the
Trust is insured against losses arising out of any such advance payments, or
(iii) either a majority of the Trustees who are not interested persons (as
defined in the 1940 Act) of the Trust nor parties to the matter, or independent
legal counsel in a written opinion shall have determined, based upon a review of
readily available facts (as opposed to a full trial-type inquiry) that there is
reason to believe that such Covered Person will not be disqualified from
indemnification for such expenses.
Section 5. SEAL. The business seal shall have inscribed thereon the
name of the business trust, the year of its organization and the word "Business
Seal, Delaware." The seal may be used by causing it or a facsimile thereof to
be impressed or affixed or otherwise reproduced. Any officer or Trustee of the
Trust shall have authority to affix the corporate seal of the Trust to any
document requiring the same.
Section 6. SEVERABILITY. The provisions of these Bylaws are severable.
If the Board of Trustees determines, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code, or other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of these Bylaws; provided, however, that such determination shall not
affect any of the remaining provisions of these Bylaws or render invalid or
improper any action taken or omitted prior to such determination. If any
provision hereof shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of these Bylaws.
Section 7. HEADINGS. Headings are placed in these Bylaws for
convenience of reference only and in case of any conflict, the text of these
Bylaws rather than the headings shall control.
ARTICLE VIII
AMENDMENTS
Section 1. AMENDMENTS. These Bylaws may be altered or repealed at any
regular or special meeting of the Board of Trustees without prior notice.
These Bylaws may also be altered or repealed at any special meeting of the
shareholders, but only if the Board of Trustees resolves to put a proposed
alteration or repealer to the vote of the shareholders and notice of such
alteration or repealer is contained in a notice of the special meeting
being held for such purpose.
11
<PAGE>
AIM SERIES TRUST
MASTER INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN
AIM SERIES TRUST
AND
A I M ADVISORS, INC.
Contract made as of May 29, 1998, between AIM Series Trust, a Delaware
business trust ("Company), and A I M Advisors, Inc., a Delaware corporation (the
"Adviser").
WHEREAS the Company is registered under the Investment Company Act of 1940,
as amended ("1940 Act"), as an open-end management investment company, and
intends to offer for public sale shares of AIM New Dimension Fund, a series of
the Company's shares of beneficial interest; and
WHEREAS the Company hereafter may establish additional series of its shares
of beneficial interest (any such additional series, together with the series
named in the paragraph immediately preceding, are collectively referred to
herein as the "Funds," and singly may be referred to as a "Fund"); and
WHEREAS the Company desires to retain Adviser as investment manager and
administrator to furnish certain investment advisory, portfolio management and
administration services to the Company and the Funds, and Adviser is willing to
furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Company hereby appoints Adviser as investment manager and
administrator of each Fund for the period and on the terms set forth in this
Contract. Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. DUTIES AS INVESTMENT MANAGER.
(a) The Adviser will be responsible for the daily allocation and periodic
rebalancing of the Fund's assets among the investment companies in which the
Fund invests ("Underlying Funds"). Such allocation and rebalancing shall be made
in accordance with the Company's Registration Statement. The Adviser will be
responsible for placing all trades on behalf of the Fund. The Adviser also will
determine from time to time what other securities, if any, will be purchased,
retained or sold by the Fund and what cash, if any, will be retained by the
Fund.
<PAGE>
(b) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Funds, and will furnish the Board
with such periodic and special reports as the Board reasonably may request. In
compliance with the requirements of Rule 31a-3 under the 1940 Act, Adviser
hereby agrees that all records which it maintains for the Company are the
property of the Company, agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act any records which it maintains for the Company and
which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Company any records which it
maintains for the Company upon request by the Company.
3. DUTIES AS ADMINISTRATOR. Adviser will administer the affairs of each Fund
subject to the supervision of the Board and the following understandings:
(a) Adviser will supervise all aspects of the operations of each Fund,
including the oversight of transfer agency and custodial services, except as
hereinafter set forth; provided, however, that nothing herein contained shall be
deemed to relieve or deprive the Board of its responsibility for control of the
conduct of the affairs of the Funds.
(b) At Adviser's expense, Adviser will provide the Company and the Funds
with such corporate, administrative and clerical personnel (including officers
of the Company) and services as are reasonably deemed necessary or advisable by
the Board.
(c) Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of each Fund's prospectus,
statement of additional information, proxy material, tax returns and required
reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
(d) Adviser will provide the Company and the Funds with, or obtain for
them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Adviser will act in conformity with the Agreement and Declaration of
Trust, By-Laws and Registration Statement of the Company and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules thereunder, and all other applicable federal and
state laws and regulations.
5. DELEGATION OF ADVISER'S DUTIES AS INVESTMENT MANAGER AND ADMINISTRATOR.
With respect to one or more of the Funds, Adviser may enter into one or more
contracts ("Sub-Advisory or Sub-Administration Contract") with a sub-adviser or
sub-administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or all of the services specified in
Paragraphs 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject
<PAGE>
with respect to the services under Paragraphs 2, 3 and 4 of this Contract; (ii)
each Sub-Advisory and Sub-Administration Contract meets all requirements of the
1940 Act and rules thereunder, and (iii) Adviser shall not enter into a
Sub-Advisory or Sub-Administration Contract unless it is approved by the Board
prior to implementation.
6. SERVICES NOT EXCLUSIVE. The services furnished by Adviser hereunder are
not to be deemed exclusive and Adviser shall be free to furnish similar services
to others so long as its services under this Contract are not impaired thereby.
Nothing in this Contract shall limit or restrict the right of any director,
officer or employee of Adviser, who may also be a Trustee, officer or employee
of the Company, to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
7. EXPENSES.
(a) During the term of this Contract, the Adviser shall bear all expenses
of the Fund (other than expenses reimbursed pursuant to the Fund's Rule 12b-1
plans of distribution and non-recurring and extraordinary expenses of the Fund)
until such time as the Fund enters into a special servicing or similar agreement
among the Company, the Adviser, AIM Investment Funds and GT Investor Services,
Inc. ("Special Servicing Agreement"). Once the Company enters into the Special
Servicing Agreement, all expenses of the Fund (other than expenses reimbursed
pursuant to the Fund's Rule 12b-1 plans of distribution and non-recurring and
extraordinary expenses of the Fund) shall be paid for pursuant to that
agreement. Without limiting the generality of the foregoing, such expenses
include the following: (i) the cost (including brokerage commissions, if any) of
securities purchased or sold by the Fund and any losses incurred in connection
therewith; (ii) expenses of organizing the Fund; (iii) filing fees and expenses
relating to the registration and qualification of the Fund's shares and the
Company under federal and/or state securities law and maintaining such
registrations and qualifications; (iv) fees and salaries payable to the
Company's Trustees who are not parties to this Agreement or interested persons
of any such party ("Independent Trustees"); (v) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(vi) costs of any liability, uncollectible items of deposit and other insurance
and fidelity bonds; (vii) legal, accounting and auditing expenses, including
legal fees of special counsel for the Independent Trustees; (viii) charges of
custodians, transfer agents, pricing agents and other agents; (ix) costs of
preparing share certificates; (x) expenses of setting in type, printing and
mailing prospectuses and supplements thereto, statements of additional
information, reports and proxy materials for existing shareholders; (xi) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xii) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xiii) the cost of investment company literature and other publications
provided by the Company to its Trustees and officers; and (xiv) costs of
mailing, stationery and communications equipment.
<PAGE>
(b) During the term of this Contract, the Fund shall bear any
non-recurring and extraordinary expenses incurred in its operations. Such
non-recurring and extraordinary expenses include: (i) the fees and costs of
actions, suits or proceedings, and any penalties, damages or payments in
settlement in connection therewith, for which the Company and/or the Fund may be
liable directly, or which they may incur as a result of their legal obligation
to provide indemnification to their officers, trustees and agents; (ii) the fees
and costs of any governmental investigation and any fines or penalties in
connection therewith; (iii) and any federal, state or local tax, or related
interest, penalties or additions to tax for which the Company or the Fund may be
liable.
(c) The payment or assumption by the Adviser of any expense of the Fund
prior to the effective date of the Special Servicing Agreement shall not
obligate the Adviser to pay or assume the same or any similar expense of the
Fund after the effective date of the Special Servicing Agreement.
8. COMPENSATION. The Adviser will not be paid any special compensation for
the services provided by it hereunder. However, the Adviser may receive fees for
performing investment management and other services on behalf of the Underlying
Funds and may receive further fees from the Underlying Funds pursuant to the
Special Servicing Agreement.
9. LIMITATION OF LIABILITY OF ADVISER AND INDEMNIFICATION. Adviser shall not
be liable and each Fund shall indemnify Adviser and its directors, officers and
employees, for any costs or liabilities arising from any error of judgment or
mistake of law or any loss suffered by the Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Adviser in the
performance by Adviser of its duties or from reckless disregard by Adviser of
its obligations and duties under this Contract. Any person, even though also an
officer, partner, employee, or agent of Adviser, who may be or become an
officer, Trustee, employee or agent of the Company shall be deemed, when
rendering services to a Fund or the Company or acting with respect to any
business of a Fund or the Company, to be rendering such service to or acting
solely for the Fund or the Company and not as an officer, partner, employee, or
agent or one under the control or direction of Adviser even though paid by it.
10. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect with respect to any Fund
unless it has first been approved (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of that Fund's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with
<PAGE>
respect to each Fund this Contract shall continue automatically for successive
periods not to exceed twelve months each, provided that such continuance is
specifically approved at least annually (i) by a vote of a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by the Board or by vote of a majority of the
outstanding voting securities of that Fund.
(c) Notwithstanding the foregoing, with respect to any Fund this Contract
may be terminated at any time, without the payment of any penalty, by vote of
the Board or by a vote of a majority of the outstanding voting securities of the
Fund on sixty days' written notice to Adviser or by Adviser at any time, without
the payment of any penalty, on sixty days' written notice to the Company.
Termination of this Contract with respect to one Fund shall not affect the
continued effectiveness of this Contract with respect to any other Fund. This
Contract will automatically terminate in the event of its assignment.
11. AMENDMENT OF THIS CONTRACT. No provision of this Contract may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Fund's outstanding voting
securities, when required by the 1940 Act.
12. GOVERNING LAW. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
13. LICENSE AGREEMENT. The Company shall have the non-exclusive right to use
the name "AIM" to designate any current or future series of shares only so long
as A I M Advisors, Inc. serves as investment manager or adviser to the Company
with respect to such series of shares.
14. LIMITATION OF SHAREHOLDER LIABILITY. It is expressly agreed that the
obligations of the Company hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Company
personally, but shall only bind the assets and property of the Funds, as
provided in the Company's Agreement and Declaration of Trust. The execution and
delivery of this Contract have been authorized by the Trustees of the Company
and shareholders of the Funds, and this Contract has been executed and delivered
by an authorized officer of the Company acting as such; neither such
authorization by such Trustees and shareholders nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the
assets and property of the Funds, as provided in the Company's Agreement and
Declaration of Trust.
15. MISCELLANEOUS. The captions in this Contract are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made
<PAGE>
invalid by a court decision, statute, rule or otherwise, the remainder of this
Contract shall not be affected thereby. This Contract shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors. As used in this Contract, the terms "majority of the outstanding
voting securities," "interested person," "assignment," "broker," "dealer,"
"investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: AIM SERIES TRUST
By:
Name:
Title:
Attest: A I M ADVISORS, INC.
By:
Name:
Title:
<PAGE>
AIM SERIES TRUST
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
INVESCO (NY), INC.
Contract made as of May 29, 1998, between A I M Advisors, Inc., a Delaware
corporation ("Adviser"), and INVESCO (NY), Inc., a California corporation
("Sub-Adviser").
WHEREAS Adviser has entered into an Investment Management and
Administration Contract with AIM Series Trust ("Company"), an open-end
management investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"), with respect to AIM New Dimension Fund, the Fund
being a series of the Company's shares of beneficial interest; and
WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser and
sub-administrator to furnish certain advisory and administrative services to the
Funds, and Sub-Adviser is willing to furnish such services;
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. Adviser hereby appoints Sub-Adviser as sub-adviser and
sub-administrator of each Fund for the period and on the terms set forth in this
Contract. Sub-Adviser accepts such appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. DUTIES AS SUB-ADVISER.
(a) The Sub-Adviser will be responsible for the daily allocation and
periodic rebalancing of the Fund's assets among the investment companies in
which the Fund invests ("Underlying Funds"). Such allocation and rebalancing
shall be made in accordance with the Company's Registration Statement. The
Sub-Adviser will be responsible for placing all trades on behalf of the Fund.
The Sub-Adviser also will determine from time to time what other securities, if
any, will be purchased, retained or sold by the Fund and what cash, if any, will
be retained by the Fund.
(b) The Sub-Adviser will maintain all books and records with respect to
the securities transactions of the Funds, and will furnish the Board and Adviser
with such periodic and special reports as the Board or Adviser reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records which it maintains for the
Company are the property of the Company, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act
<PAGE>
any records which it maintains for the Company and which are required to be
maintained by Rule 31a-1 under the 1940 Act, and further agrees to surrender
promptly to the Company any records which it maintains for the Company upon
request by the Company.
3. DUTIES AS SUB-ADMINISTRATOR. Sub-Adviser will administer the affairs of
each Fund subject to the supervision of the Company's Board of Trustees
("Board"), the Adviser and the following understandings:
(a) Sub-Adviser will supervise all aspects of the operations of each Fund,
including the oversight of transfer agency and custodial services except as
hereinafter set forth; provided, however, that nothing herein contained shall be
deemed to relieve or deprive the Board of its responsibility for control of the
conduct of the affairs of the Funds.
(b) At Sub-Adviser's expense, Sub-Adviser will provide the Company and the
Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.
(c) Sub-Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of each Fund's prospectus,
statement of additional information, proxy material, tax returns and required
reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
(d) Sub-Adviser will provide the Company and the Funds with, or obtain for
them, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Sub-Adviser will act in conformity with the Agreement and Declaration
of Trust, By-Laws and Registration Statement of the Company and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules thereunder, and all other applicable federal and
state laws and regulations.
5. SERVICES NOT EXCLUSIVE. The services furnished by Sub-Adviser hereunder
are not to be deemed exclusive and Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Sub-Adviser, who may also be a Trustee, officer
or employee of the Company, to engage in any other business or to devote his or
her time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature.
6. EXPENSES.
<PAGE>
(a) During the term of this Agreement, the Sub-Adviser shall bear all
expenses of the Fund (other than expenses reimbursed pursuant to the Fund's
Rule 12b-1 plans of distribution and non-recurring and extraordinary expenses of
the Fund) until such time as the Fund enters into a special servicing or similar
agreement among the Company, the Sub-Adviser, AIM Investment Funds and GT
Investor Services, Inc. ("Special Servicing Agreement"). Once the Company enters
into the Special Servicing Agreement, all expenses of the Fund (other than
expenses reimbursed pursuant to the Fund's Rule 12b-1 plans of distribution and
non-recurring and extraordinary expenses of the Fund) shall be paid for pursuant
to that agreement. Without limiting the generality of the foregoing, such
expenses include the following: (i) the cost (including brokerage commissions,
if any) of securities purchased or sold by the Fund and any losses incurred in
connection therewith; (ii) expenses of organizing the Fund; (iii) filing fees
and expenses relating to the registration and qualification of the Fund's shares
and the Company under federal and/or state securities law and maintaining such
registrations and qualifications; (iv) fees and salaries payable to the
Company's Trustees who are not parties to this Agreement or interested persons
of any such party ("Independent Trustees"); (v) all expenses incurred in
connection with the Independent Trustees' services, including travel expenses;
(vi) costs of any liability, uncollectible items of deposit and other insurance
and fidelity bonds; (vii) legal, accounting and auditing expenses, including
legal fees of special counsel for the Independent Trustees; (viii) charges of
custodians, transfer agents, pricing agents and other agents; (ix) costs of
preparing share certificates; (x) expenses of setting in type, printing and
mailing prospectuses and supplements thereto, statements of additional
information, reports and proxy materials for existing shareholders; (xi) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xii) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xiii) the cost of investment company literature and other publications
provided by the Company to its Trustees and officers; and (xiv) costs of
mailing, stationery and communications equipment.
(b) During the term of this Agreement, the Fund shall bear any
non-recurring and extraordinary expenses incurred in its operations. Such
non-recurring and extraordinary expenses include: (i) the fees and costs of
actions, suits or proceedings, and any penalties, damages or payments in
settlement in connection therewith, for which the Company and/or the Fund may be
liable directly, or which they may incur as a result of their legal obligation
to provide indemnification to their officers, trustees and agents; (ii) the fees
and costs of any governmental investigation and any fines or penalties in
connection therewith; (iii) and any federal, state or local tax, or related
interest, penalties or additions to tax for which the Company or the Fund may be
liable.
(c) The payment or assumption by the Sub-Adviser of any expense of the
Fund prior to the effective date of the Special Servicing Agreement shall not
obligate the Sub-Adviser to pay or assume the same or any similar expense of the
Fund after the effective date of the Special Servicing Agreement.
<PAGE>
7. COMPENSATION. The Sub-Adviser will not be paid any special compensation for
the services provided by it hereunder. However, the Sub-Adviser may receive fees
for performing investment management and other services on behalf of the
Underlying Funds and may receive further fees from the Underlying Funds pursuant
to the Special Servicing Agreement.
8. LIMITATION OF LIABILITY OF SUB-ADVISER AND INDEMNIFICATION. Sub-Adviser
shall not be liable for any costs or liabilities arising from any error of
judgment or mistake of law or any loss suffered by the Fund or the Company in
connection with the matters to which this Contract relates except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
Sub-Adviser in the performance by Sub-Adviser of its duties or from reckless
disregard by Sub-Adviser of its obligations and duties under this Contract. Any
person, even though also an officer, partner, employee, or agent of Sub-Adviser,
who may be or become a Trustee, officer, employee or agent of the Company, shall
be deemed, when rendering services to a Fund or the Company or acting with
respect to any business of a Fund or the Company to be rendering such service to
or acting solely for the Fund or the Company and not as an officer, partner,
employee, or agent or one under the control or direction of Sub-Adviser even
though paid by it.
9. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect with respect to any Fund
unless it has first been approved (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of that Fund's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to each Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of that Fund.
(c) Notwithstanding the foregoing, with respect to any Fund this Contract
may be terminated at any time, without the payment of any penalty, by vote of
the Board or by a vote of a majority of the outstanding voting securities of the
Fund on sixty days' written notice to Sub-Adviser or by Sub-Adviser at any time,
without the payment of any penalty, on sixty days' written notice to the
Company. Termination of this Contract with respect to one Fund shall not affect
the continued effectiveness of this Contract with respect to any other Fund.
This Contract will automatically terminate in the event of its assignment.
10. AMENDMENT. No provision of this Contract may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which
<PAGE>
enforcement of the change, waiver, discharge or termination is sought, and no
amendment of this Contract shall be effective until approved by vote of a
majority of the Fund's outstanding voting securities, when required by the 1940
Act.
11. GOVERNING LAW. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
12. MISCELLANEOUS. The captions in this Contract are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Contract shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Contract shall not be affected thereby. This
Contract shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors. As used in this Contract, the terms
"majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: A I M ADVISORS, INC.
By:
Name:
Title:
Attest: INVESCO (NY) INC.
By:
Name:
Title:
<PAGE>
DISTRIBUTION AGREEMENT
BETWEEN
AIM SERIES TRUST
AND
A I M DISTRIBUTORS, INC.
CLASS A AND CLASS C SHARES
THIS AGREEMENT made this 29th day of May, 1998, by and between AIM Series
Trust, a Delaware business trust (the "Company"), with respect to the series of
beneficial interest set forth on Appendix A to this Agreement, and any
applicable classes thereof, (the "Portfolios"), and A I M Distributors, Inc., a
Delaware corporation (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other good
and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
FIRST: The Company on behalf of the Portfolios hereby appoints the
Distributor as its exclusive agent for the sale of shares of the Portfolios to
the public directly and through investment dealers and financial institutions in
the United States and throughout the world.
SECOND: The Company shall not sell any shares of the Portfolios except
through the Distributor and under the terms and conditions set forth in
paragraph FOURTH below. Notwithstanding the provisions of the foregoing
sentence, however:
(A) the Company may issue shares of the Portfolios to any other investment
company or personal holding company, or to the shareholders thereof, in exchange
for all or a majority of the shares or assets of any such company; and
(B) the Company may issue shares of the Portfolios at their net asset
value in connection with certain classes of transactions or to certain classes
of persons, in accordance with Rule 22d-1 under the Investment Company Act of
1940, as amended (the "1940 Act"), provided that any such class is specified in
the then current prospectus of the applicable Portfolio.
THIRD: The Distributor hereby accepts appointment as exclusive agent for
the sale of the shares of the Portfolios and agrees that it will use its best
efforts to sell such shares; provided, however, that:
(A) the Distributor may, and when requested by the Company on behalf of a
Portfolio shall, suspend its efforts to effectuate such sales at any time when,
in the opinion of the Distributor or of the
<PAGE>
Company, no sales should be made because of market or other economic
considerations or abnormal circumstances of any kind; and
(B) the Company may withdraw the offering of the shares of a Portfolio (i)
at any time with the consent of the Distributor, or (ii) without such consent
when so required by the provisions of any statute or of any order, rule or
regulation of any governmental body having jurisdiction. It is mutually
understood and agreed that the Distributor does not undertake to sell any
specific amount of the shares of the Portfolios. The Company shall have the
right to speclify minimum amounts for initial and subsequent orders for the
purchase of shares of any Portfolio.
FOURTH:
(A) The public offering price of Class A shares of a Portfolio (the
"offering price") shall be the net asset value per share of the applicable
Portfolio plus a sales charge, if any. Net asset value per share shall be
determined in accordance with the provisions of the then current prospectus and
statement of additional information of the applicable Portfolio. The sales
charge shall be established by the Distributor, may reflect scheduled variations
in, or the elimination of, sales charges on sales of a Portfolio's Class A
shares either generally to the public, or to any specified class of investors or
in connection with any specified class of transactions, in accordance with Rule
22d-1 and as set forth in the then current prospectus and statement of
additional information of the applicable Portfolio. The Distributor shall apply
any scheduled variation in, or elimination of, the selling commission uniformly
to all offerees in the class specified. The Distributor shall be entitled to
receive the amount of any applicable contingent deferred sales charge that has
been subtracted from gross redemption proceeds (the "CDSC"), provided that the
Shares being redeemed were (i) issued by a Portfolio during the term of this
Agreement and any predecessor Agreement between the Company and the Distributor
or Distributor's predecessor, GT Global, Inc. ("GT Global"), or (ii) issued by a
Portfolio during or after the term of this Agreement or any predecessor
Agreement between the Company and the Distributor or GT Global in one or a
series of free exchanges of Shares for shares of the same class of another
portfolio, which can be traced to Shares or shares of the same class of another
portfolio initially issued by a Portfolio or such other portfolio during the
term of this Agreement, any predecessor Agreement or any other distribution
agreement with the Distributor or GT Global with respect to such other portfolio
(the "Distributor's Earned CDSC"). The Company shall pay or cause the Company's
transfer agent to pay the Distributor's Earned CDSC to the Distributor on the
date net redemption proceeds are payable to the redeeming shareholder.
The public offering price of the Class C shares of a Portfolio shall be the
net asset value per share of the applicable Class C shares. Net asset value per
share shall be determined in accordance with the provisions of the then current
prospectus and statement of additional information of the applicable Portfolio.
The Distributor may establish a schedule of contingent deferred sales charges to
be imposed at the time of redemption of the shares, and such schedule shall be
disclosed in the current prospectus of each Portfolio. Such schedule of
contingent deferred sales charges may reflect variations in or waivers of such
charges on redemptions of Class C shares, either generally to the public or to
any specified class of shareholders and/or in connection with any specified
class of transactions, in accordance with applicable rules and regulations and
exemptive relief granted by the Securities and Exchange Commission, and as set
forth in the current prospectus of the applicable Portfolio. The Distributor
and the Company shall apply any then applicable scheduled variation in or waiver
of contingent deferred sales charges uniformly to all shareholders and/or all
transactions belonging to a specified class. The Company shall pay or cause the
Company's transfer agent to pay the Distributor's Earned CDSC to the Distributor
on the date net redemption proceeds are payable to the redeeming shareholder.
2
<PAGE>
(B) The Company shall allow directly to investment dealers and other
financial institutions through whom Class A shares of the Portfolios are sold
such portion of the sales charge as may be payable to them and specified by the
Distributor, up to but not exceeding the amount of the total sales charge. The
difference between any commissions so payable and the total sales charges
included in the offering price shall be paid to the Distributor.
The Distributor may pay to investment dealers and other financial
institutions through whom Class C shares are sold, such sales commission as the
Distributor may specify from time to time. Payment of any such sales
commissions shall be the sole obligation of the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any
payments by a Portfolio to the Distributor or by a Portfolio or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company on
behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.
FIFTH: The Distributor shall act as agent of the Company on behalf of the
Portfolios in connection with the sale and repurchase of shares of the
Portfolios. Except with respect to such sales and repurchases, the Distributor
shall act as principal in all matters relating to the promotion of the sale of
shares of the Portfolios and shall enter into all of its own engagements,
agreements and contracts as principal on its own account. The Distributor shall
enter into agreements with investment dealers and financial institutions
selected by the Distributor, authorizing such investment dealers and financial
institutions to offer and sell shares of the Portfolios to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each agreement shall provide that the investment
dealer and financial institution shall act as a principal, and not as an agent,
of the Company on behalf of the Portfolios.
SIXTH: The Portfolios shall bear:
(A) the expenses of qualification of shares of the Portfolios for sale in
connection with such public offerings in such states as shall be selected by the
Distributor, and of continuing the qualification therein until the Distributor
notifies the Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final
proof and distributing the Portfolios' prospectuses and statements of additional
inforrnation (including supplements thereto) relating to public offerings made
by the Distributor pursuant to this Agreement (which shall not include those
prospectuses and statements of additional information, and supplements thereto,
to be distributed to shareholders of the Portfolios), and any other promotional
or sales literature used by the Distributor or furnished by the Distributor to
dealers in connection with such public offerings, and expenses of advertising in
connection with such public offerings.
(B) The Distributor may be reimbursed for all or a portion of such
expenses, or may receive reasonable compensation for distribution related
services, to the extent permitted by a distribution plan adopted by the Company
on behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.
3
<PAGE>
EIGHTH: The Distributor will accept orders for the purchase of shares of
the Portfolios only to the extent of purchase orders actually received and not
in excess of such orders, and it will not avail itself of any opportunity of
making a profit by expediting or withholding orders. It is mutually understood
and agreed that the Company may reject purchase orders where, in the judgment of
the Company, such rejection is in the best interest of the Company.
NINTH: The Company, on behalf of the Portfolios, and the Distributor shall
each comply with all applicable provisions of the 1940 Act, the Securities Act
of 1933 and all other federal and state laws, rules and regulations governing
the issuance and sale of shares of the Portfolios.
TENTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company on behalf of the Portfolios agrees to indemnify the
Distributor against any and all claims, demands, liabilities and expenses which
the Distributor may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein, the omission of
which makes any statement contained therein misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor. The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or a Portfolio may incur arising out of or based upon any act or
deed of the Distributor or its sales representatives which has not been
authorized by the Company or a Portfolio in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Company and the Portfolios
against any and all claims, demands, liabilities and expenses which the Company
or the Portfolios may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the Distributor
shall not be liable for any errors of the Portfolios' transfer agent(s), or for
any failure of any such transfer agent to perform its duties.
ELEVENTH: Nothing herein contained shall require the Company to take any
action contrary to any provision of its Agreement and Declaration of Trust, or
to any applicable statute or regulation.
TWELFTH: This Agreement shall become effective with respect to each
Portfolio as of the date hereof, shall continue in force and effect until May
29, 1999, and shall continue in force and effect from year to year thereafter,
provided, that such continuance is specifically approved with respect to such
Portfolio at least annually (a)(i) by the Board of Trustees of the Company or
(ii) by the vote of a majority of the outstanding voting securities (as defined
in Section 2(a)(42) of the 1940 Act), and (b) by vote of a majority of the
Company's trustees who are not parties to this Agreement or "interested persons"
(as defined in Section 2(a)(19) of the 1940 Act) of any party to this Agreement
cast in person at a meeting called for such purpose.
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<PAGE>
THIRTEENTH:
(A) This Agreement may be terminated with respect to any Portfolio at any
time, without the payment of any penalty, by vote of the Board of Trustees of
the Company or by vote of a majority of the outstanding voting securities of the
applicable Portfolio, or by the Distributor, on sixty (60) days' written notice
to the other party.
(B) This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act.
FOURTEENTH: Any notice under this Agreement shall be in writing, addressed
and delivered, or mailed postage prepaid, to the other party at such address as
the other party may designate for the receipt of notices. Until further notice
to the other party, it is agreed that the addresses of both the Company and the
Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
FIFTEENTH: Notice is hereby given that, as provided by applicable law, the
obligations of or arising out of this Agreement are not binding upon any of the
shareholders of the Company individually, but are binding only upon the assets
and property of the Company and that the shareholders shall be entitled, to the
fullest extent permitted by applicable law, to the same limitation on personal
liability as stockholders of private corporations for profit.
SIXTEENTH: This Agreement shall be deemed to be a contract made in the
State of Delaware and governed by, construed in accordance with and enforced
pursuant to the internal laws of the State of Delaware without reference to its
conflicts of laws rules.
5
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in duplicate on the day and year first above written.
AIM SERIES TRUST
By: __________________________
Name: ____________________
Title: President
Attest:
__________________________
Name:
Title:
A I M DISTRIBUTORS, INC.
By: __________________________
Name: Michael J. Cemo
Title: President
Attest:
__________________________
Name:
Title:
6
<PAGE>
APPENDIX A
TO
DISTRIBUTION AGREEMENT
OF
AIM SERIES TRUST
CLASS A SHARES
AIM New Dimension Fund
CLASS C SHARES
AIM New Dimension Fund
7
<PAGE>
DISTRIBUTION AGREEMENT
BETWEEN
AIM SERIES TRUST
AND
A I M DISTRIBUTORS, INC.
CLASS B SHARES
THIS AGREEMENT made this 29th day of May, 1998, by and between AIM Series
Trust, a Delaware business trust (the "Company"), with respect to each of the
Class B shares (the "Shares") of each series of shares of beneficial interest
set forth on Schedule A to this agreement (the "Portfolios"), and A I M
Distributors, Inc., a Delaware corporation (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other good
and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
FIRST: The Company hereby appoints the Distributor as its exclusive agent
for the sale of the Shares to the public directly and through investment dealers
in the United States and throughout the world. If subsequent to the termination
of the Distributor's services to the Company pursuant to this Agreement, the
Company retains the services of another distributor, the distribution agreement
with such distributor shall contain provisions comparable to Clauses FOURTH and
SEVENTH hereof and Exhibit A hereto, and without limiting the generality of the
foregoing, will require such distributor to maintain and make available to the
Distributor records regarding sales, redemptions and reinvestments of Shares
necessary to implement the terms of Clauses FOURTH, SEVENTH and EIGHTH hereof.
SECOND: The Company shall not sell any Shares except through the
Distributor and under the terms and conditions set forth in paragraph FOURTH
below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Company may issue Shares to any other investment company or
personal holding company, or to the shareholders thereof, in exchange for all or
a majority of the shares or assets of any such company;
(B) the Company may issue Shares at their net asset value in connection
with certain classes of transactions or to certain classes of persons, in
accordance with Rule 22d-1 under the Investment Company Act of 1940, as amended
(the "1940 Act"), provided that any such class is specified in the then current
prospectus of the applicable Shares; and
(C) the Company shall have the right to specify minimum amounts for
initial and subsequent orders for the purchase of Shares.
<PAGE>
THIRD: The Distributor hereby accepts appointment as exclusive agent for
the sale of the Shares and agrees that it will use its best efforts to sell such
Shares; provided, however, that:
(A) the Distributor may, and when requested by the Company on behalf of
the Shares shall, suspend its efforts to effectuate such sales at any time when,
in the opinion of the Distributor or of the Company, no sales should be made
because of market or other economic considerations or abnormal circumstances of
any kind;
(B) the Company may withdraw the offering of the Shares (i) at any time
with the consent of the Distributor, or (ii) without such consent when so
required by the provisions of any statute or of any order, rule or regulation of
any governmental body having jurisdiction; and
(C) the Distributor, as agent, does not undertake to sell any specific
amount of the Shares.
FOURTH:
(A) The public offering price of the Shares shall be the net asset value
per share of the applicable Shares. Net asset value per share shall be
determined in accordance with the provisions of the then current prospectus and
statement of additional information of the applicable Portfolio. The
Distributor may establish a schedule of contingent deferred sales charges to be
imposed at the time of redemption of the Shares, and such schedule shall be
disclosed in the current prospectus of each Portfolio. Such schedule of
contingent deferred sales charges may reflect variations in or waivers of such
charges on redemptions of Shares, either generally to the public or to any
specified class of shareholders and/or in connection with any specified class of
transactions, in accordance with applicable rules and regulations and exemptive
relief granted by the Securities and Exchange Commission, and as set forth in
the Portfolios' current prospectus(es). The Distributor and the Company shall
apply any then applicable scheduled variation in or waiver of contingent
deferred sales charges uniformly to all shareholders and/or all transactions
belonging to a specified class.
(B) The Distributor may pay to investment dealers and other financial
institutions through whom Shares are sold, such sales commission as the
Distributor may specify from time to time. Payment of any such sales
commissions shall be the sole obligation of the Distributor.
(C) No provision of this Agreement shall be deemed to prohibit any
payments by the Company to the Distributor or by the Company or the Distributor
to investment dealers, financial institutions and 401(k) plan service providers
where such payments are made under a distribution plan adopted by the Company
pursuant to Rule 12b-1 under the 1940 Act.
(D) The Company shall redeem the Shares from shareholders in accordance
with the terms set forth from time to time in the current prospectus and
statement of additional information of each Portfolio. The price to be paid to
a shareholder to redeem the Shares shall be equal to the net asset value of the
Shares being redeemed ("gross redemption proceeds"), less any applicable
contingent deferred sales charge, calculated pursuant to the then applicable
schedule of contingent deferred sales charges ("net redemption proceeds"). The
Distributor shall be entitled to receive the amount of the contingent deferred
sales charge that has been subtracted from gross redemption proceeds (the
"CDSC"), provided that the Shares being redeemed were (i) issued by a Portfolio
during the term of this Agreement and any predecessor Agreement between the
Company and the Distributor or Distributor's predecessor, GT Global, Inc. ("GT
Global"), or (ii) issued by a Portfolio during or after the term of this
Agreement or any predecessor Agreement between the Company and the Distributor
or GT Global in one or a series of free exchanges of Shares for Class B
2
<PAGE>
shares of another portfolio, which can be traced to Shares or Class B shares of
another portfolio initially issued by a Portfolio or such other portfolio during
the term of this Agreement, any predecessor Agreement or any other distribution
agreement with the Distributor or GT Global with respect to such other portfolio
(the "Distributor's Earned CDSC"). The Company shall pay or cause the Company's
transfer agent to pay the Distributor's Earned CDSC to the Distributor on the
date net redemption proceeds are payable to the redeeming shareholder.
(E) The Distributor shall maintain adequate books and records to identify
Shares (i) issued by a Portfolio during the term of this Agreement and any
predecessor Agreement between the Company and the Distributor or GT Global or
(ii) issued by a Portfolio during or after the term of this Agreement or any
predecessor Agreement between the Company and the Distributor or GT Global in
one or a series of free exchanges of Shares for class B shares of another
portfolio, which can be traced to Shares or class B shares of another portfolio
initially issued by a Portfolio or such other portfolio during the term of this
Agreement, any predecessor Agreement or any other distribution agreement with
the Distributor or GT Global with respect to such other portfolio and shall
calculate the Distributor's Earned CDSC, if any, with respect to such Shares,
upon their redemption. The Company shall be entitled to rely on Distributor's
books, records and calculations with respect to Distributor's Earned CDSC.
FIFTH: The Distributor shall act as an agent of the Company in connection
with the sale and redemption of Shares. Except with respect to such sales and
redemptions, the Distributor shall act as principal in all matters relating to
the promotion of the sale of Shares and shall enter into all of its own
engagements, agreements and contracts as principal on its own account. The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell the Shares to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each agreement shall provide that the investment
dealer or financial institution shall act as a principal, and not as an agent,
of the Company.
SIXTH: The Shares shall bear:
(A) the expenses of qualification of Shares for sale in connection with
such public offerings in such states as shall be selected by the Distributor,
and of continuing the qualification therein until the Distributor notifies the
Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH:
(A) The Distributor shall bear the expenses of printing from the final
proof and distributing the prospectuses and statements of additional information
for the Shares (including supplements thereto) relating to public offerings made
by the Company pursuant to such prospectuses (which shall not include those
prospectuses and statements of additional information, and supplements thereto,
to be distributed to existing shareholders of the Shares), and any other
promotional or sales literature used by the Distributor or furnished by the
Distributor to dealers in connection with such public offerings, and expenses of
advertising in connection with such public offerings.
(B) Subject to the limitations, if any, of applicable law including the
NASD Conduct Rules (formerly, the NASD Rules of Fair Practice) regarding
asset-based sales charges, the Company shall pay to the Distributor as a
reimbursement for all or a portion of such expenses, or as reasonable
compensation for
3
<PAGE>
distribution of the Shares, an asset-based sales charge in an amount equal to
0.75% per annum of the average daily net asset value of the Shares of each
Portfolio from time to time (the "Distributor's 12b-1 Share"), such sales charge
to be payable pursuant to the distribution plan adopted pursuant to Rule 12b-1
under the 1940 Act (the "Plan"). The Distributor's 12b-1 Share shall be a
percentage, which shall be recomputed periodically (but not less than monthly)
in accordance with Exhibit A to this Agreement. The Distributor's 12b-1 Share
shall accrue daily and be paid to the Distributor as soon as practicable after
the end of each calendar month within which it accrues but in any event within
10 business days after the end of each such calendar month (unless the
Distributor shall specify a later date in written instructions to the Company)
provided, however, that any notices and calculation required by Section EIGHTH:
(B) and (C) have been received by the Company.
(C) The Distributor shall maintain adequate books and records to permit
calculations periodically (but not less than monthly) of, and shall calculate on
a monthly basis, the Distributor's 12b-1 Share to be paid to the Distributor.
The Company shall be entitled to rely on Distributor's books, records and
calculations relating to Distributor's 12b-1 Share.
EIGHTH:
(A) The Distributor may, from time to time, assign, transfer or pledge
("Transfer") to one or more designees (each an "Assignee"), its rights to all or
a designated portion of (i) the Distributor's 12b-1 Share (but not the
Distributor's duties and obligations pursuant hereto or pursuant to the Plan),
and (ii) the Distributor's Earned CDSC, free and clear of any offsets or claims
the Company may have against the Distributor. Each such Assignee's ownership
interest in a Transfer of a designated portion of a Distributor's 12b-1 Share
and a Distributor's Earned CDSC is hereinafter referred to as an "Assignee's
12b-1 Portion" and an "Assignee's CDSC Portion," respectively. A Transfer
pursuant to this Section EIGHTH: (A) shall not reduce or extinguish any claim of
the Company against the Distributor.
(B) The Distributor shall promptly notify the Company in writing of each
Transfer pursuant to Section EIGHTH: (A) by providing the Company with the name
and address of each such Assignee.
(C) The Distributor may direct the Company to pay directly to an Assignee
such Assignee's 12b-1 Portion and Assignee's CDSC Portion. In such event,
Distributor shall provide the Company with a monthly calculation of (i) the
Distributor's Earned CDSC and Distributor's 12b-1 Share and (ii) each Assignee's
12b-1 Portion and Assignee's CDSC Portion, if any, for such month (the "Monthly
Calculation"). The Monthly Calculation shall be provided to the Company by the
Distributor promptly after the close of each month or such other time as agreed
to by the Company and the Distributor which allows timely payment of the
Distributor's 12b-1 Share and Distributor's Earned CDSC and/or the Assignee's
12b-1 Portion and Assignee's CDSC Portion. The Company shall not be liable for
any interest on such payments occasioned by delayed delivery of the Monthly
Calculation by the Distributor. In such event following receipt from the
Distributor of (i) notice of Transfer referred to in Section EIGHTH: (B) and
(ii) each Monthly Calculation, the Company shall make all payments directly to
the Assignee or Assignees in accordance with the information provided in such
notice and Monthly Calculation, on the same terms and conditions as if such
payments were to be paid directly to the Distributor. The Company shall be
entitled to rely on Distributor's notices, and Monthly Calculations in respect
of amounts to be paid pursuant to this Section EIGHTH: (B).
(D) Alternatively, in connection with a Transfer the Distributor may
direct the Company to pay all of such Distributor's 12b-1 Share and
Distributor's Earned CDSC from time to time to a depository or collection agent
designated by any Assignee, which depository or collection agent may be
4
<PAGE>
delegated the duty of dividing such Distributor's 12b-1 Share and Distributor's
Earned CDSC between the Assignee's 12b-1 Portion and Assignee's CDSC Portion and
the balance of the Distributor's 12b-1 Share (such balance, when distributed to
the Distributor by the depository or collection agent, the "Distributor's 12b-1
Portion") and of the Distributor's Earned CDSC (such balance, when distributed
to the Distributor by the depository or collection agent, the "Distributor's
Earned CDSC Portion"), in which case only the Distributor's 12b-1 Portion and
Distributor's Earned CDSC Portion may be subject to offsets or claims the
Company may have against the Distributor.
(E) The Company shall not amend the Plan to reduce the amount payable to
the Distributor or any Assignee under Section SEVENTH: (B) hereof with respect
to the Shares for any Shares which have been issued prior to the date of such
amendment.
NINTH: The Distributor will accept orders for the purchase of Shares only
to the extent of purchase orders actually received and not in excess of such
orders, and it will not avail itself of any opportunity of making a profit by
expediting or withholding orders.
TENTH:
(A) Pursuant to the Plan and this Agreement, the Distributor, as agent,
shall enter into Shareholder Service Agreements with investment dealers,
financial institutions and certain 401(K) plan service providers (collectively
"Service Providers") selected by the Distributor for the provision of certain
continuing personal services to customers of such Service Providers who have
purchased Shares. Such agreements shall authorize Service Providers to provide
continuing personal shareholder services to their customers upon the terms and
conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each Shareholder Service Agreement shall provide
that the Service Provider shall act as principal, and not as an agent of the
Company.
(B) Shareholder Service Agreements may provide that the Service Providers
may receive a service fee in the amount of 0.25% of the average daily net assets
of the Shares held by customers of such Service Providers provided that such
Service Providers furnish continuing personal shareholder services to their
customers in respect of such Shares. The continuing personal services to be
rendered by Service Providers under the Shareholder Service Agreements may
include, but shall not be limited to, some or all of the following:
distributing sales literature; answering routine customer inquiries concerning
the Company; assisting customers in changing dividend elections, options,
account designations and addresses, and in enrolling in any of several special
investment plans offered in connection with the purchase of Shares; assisting in
the establishment and maintenance of or establishing and maintaining customer
accounts and records and the processing of purchase and redemption transactions;
performing subaccounting; investing dividends and any capital gains
distributions automatically in the Company's shares; providing periodic
statements showing a customer's account balance and the integration of such
statements with those of other transactions and balances in the customer's
account serviced by the Service Provider; forwarding applicable prospectus,
proxy statements, reports and notices to customers who hold Shares and providing
such other information and services as the Company or the customers may
reasonably request.
(C) The Distributor may advance service fees payable to Service Providers
pursuant to the Plan or any other distribution plan adopted by the Company with
respect to Shares of one or more of the Portfolios pursuant to Rule 12b-1 under
the 1940 Act; and thereafter the Distributor may be reimbursed for such advances
through retention of service fee payments during the period for which the
service fees were advanced.
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<PAGE>
ELEVENTH: The Company and the Distributor shall each comply with all
applicable provisions of the 1940 Act, the Securities Act of 1933, as amended,
and of all other federal and state laws, rules and regulations governing the
issuance and sale of the Shares.
TWELFTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company shall indemnify the Distributor against any and all
claims, demands, liabilities and expenses which the Distributor may incur under
the Securities Act of 1933, or common law or otherwise, arising out of or based
upon any alleged untrue statement of a material fact contained in any
registration statement or prospectus of the Shares, or any omission to state a
material fact therein, the omission of which makes any statement contained
therein misleading, unless such statement or omission was made in reliance upon,
and in conformity with, information furnished to the Company in connection
therewith by or on behalf of the Distributor. The Distributor shall indemnify
the Company and the Shares against any and all claims, demands, liabilities and
expenses which the Company or the Shares may incur arising out of or based upon
(i) any act or deed of the Distributor or its sales representatives which has
not been authorized by the Company in its prospectus or in this Agreement and
(ii) the Company's reliance on the Distributor's books, records, calculations
and notices in Sections FOURTH: (E), SEVENTH: (C), EIGHTH: (B), EIGHTH: (C) and
EIGHTH: (D).
(B) The Distributor shall indemnify the Company and the Shares against any
and all claims, demands, liabilities and expenses which the Company or the
Shares may incur under the Securities Act of 1933, as amended, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of the
Shares, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company in connection therewith by or on behalf of the
Distributor.
(C) Notwithstanding any other provision of this Agreement, the Distributor
shall not be liable for any errors of the transfer agent(s) of the Shares, or
for any failure of any such transfer agent to perform its duties.
THIRTEENTH: Nothing herein contained shall require the Company to take any
action contrary to any provision of its Agreement and Declaration of Trust, as
amended, or to any applicable statute or regulation.
FOURTEENTH: This Agreement shall become effective with respect to the
Shares of each Portfolio upon its approval by the Board of Trustees of the
Company and by vote of a majority of the Company's trustees who are not
interested parties to this Agreement or "interested persons" (as defined in
Section 2(a)(19) of the 1940 Act) of any party to this Agreement cast in person
at a meeting called for such purpose, shall continue in force and effect until
May 29, 1999, and from year to year thereafter, provided, that such continuance
is specifically approved with respect to the Shares of each Portfolio at least
annually (a)(i) by the Board of Trustees of the Company or (ii) by the vote of a
majority of the outstanding Shares of such class of such Portfolio, and (b) by
vote of a majority of the Company's trustees who are not parties to this
Agreement or "interested persons" (as defined in Section 2(a)(19) of the 1940
Act) of any party to this Agreement cast in person at a meeting called for such
purpose.
FIFTEENTH:
6
<PAGE>
(A) This Agreement may be terminated with respect to the Shares of any
Portfolio, at any time, without the payment of any penalty, by vote of the Board
of Trustees of the Company or by vote of a majority of the outstanding Shares of
such Portfolio, or by the Distributor, on sixty (60) days' written notice to the
other party; and
(B) This Agreement shall also automatically terminate in the event of its
assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act; provided, that, subject to the provisions of the
following sentence, if this Agreement is terminated for any reason, the
obligations of the Company and the Distributor pursuant to Sections FOURTH: (D),
FOURTH: (E), SEVENTH: (B), SEVENTH: (C), EIGHTH: (A) through (E) and TWELFTH:
(A) of this Agreement will continue and survive any such termination.
Notwithstanding the foregoing, upon Complete Termination of the Plan (as such
term is defined in Section 8 of the Plan in effect at the date of this
Agreement), the obligations of the Company pursuant to the terms of Sections
SEVENTH: (B), EIGHTH: (A), EIGHTH: (C), EIGHTH: (D) and EIGHTH: (E) (with
respect to payments of Distributor's 12b-1 Share and Assignee's 12b-1 Portion)
of this Agreement shall terminate. A termination of the Plan with respect to
any or all Shares of any or all Portfolios shall not affect the obligations of
the Company pursuant to Sections FOURTH: (D), EIGHTH: (A), EIGHTH: (C), EIGHTH:
(D) and EIGHTH: (E) (with respect to payments of Distributor's Earned CDSC or
Assignee's CDSC Portion) hereof or of the obligations of the Distributor
pursuant to Section FOURTH: (E) or EIGHTH: (B) hereof.
(C) The Transfer of the Distributor's rights to Distributor's 12b-1 Share
or Distributor's Earned CDSC shall not cause a termination of this Agreement or
be deemed to be an assignment for purposes of Section FIFTEENTH: (B) above.
SIXTEENTH: Any notice under this Agreement shall be in writing, addressed
and delivered, or mailed postage prepaid, to the other party at such address as
the other party may designate for the receipt of notices. Until further notice
to the other party, the addresses of both the Company and the Distributor shall
be 11 Greenway Plaza, Suite 100, Houston. Texas 77046-1173.
SEVENTEENTH: Notice is hereby given that, as provided by applicable law,
the obligations of or arising out of this Agreement are not binding upon any of
the shareholders of the Company or any Portfolio individually, but are binding
only upon the assets and property of the Company or such Portfolio and that the
shareholders shall be entitled, to the fullest extent permitted by applicable
law, to the same limitation on personal liability as stockholders of private
corporations for profit.
EIGHTEENTH: This Agreement shall be deemed to be a contract made in the
State of Delaware and governed by, construed in accordance with and enforced
pursuant to the internal laws of the State of Delaware without reference to its
conflicts of laws rules.
7
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in duplicate on the day and year first above written.
AIM SERIES TRUST
By: __________________________
Name: _____________________
Title: President
Attest:
__________________________
Name:
Title:
A I M DISTRIBUTORS, INC.
By: __________________________
Name: Michael J. Cemo
Title: President
Attest:
__________________________
Name:
Title:
8
<PAGE>
SCHEDULE A
TO
DISTRIBUTION AGREEMENT
OF
AIM SERIES TRUST
CLASS B SHARES
AIM New Dimension Fund
9
<PAGE>
EXHIBIT A
The Distributor's 12b-1 Share in respect of each Portfolio shall be 100
percent until such time as the Distributor shall cease to serve as exclusive
distributor of the Shares of such Portfolio and thereafter shall be a
percentage, recomputed first on the date of any termination of the Distributor's
services as exclusive distributor of Shares of any Portfolio and thereafter
periodically (but not less than monthly), representing the percentage of Shares
of such Portfolio outstanding on each such computation date allocated to the
Distributor in accordance with the following rules:
1. DEFINITIONS. For purposes of this Exhibit A defined terms used
herein shall have the meaning assigned to such terms in the Distribution
Agreement and the following terms shall have the following meanings:
"COMMISSION SHARES" shall mean shares of the Portfolio or another
portfolio the redemption of which would, in the absence of the application of
some standard waiver provision, give rise to the payment of a CDSC and shall
include Commission Shares which due to the expiration of the CDSC period no
longer bear a CDSC.
"DISTRIBUTOR" shall mean the Distributor and the Distributor's
predecessor, GT Global, Inc.
"OTHER DISTRIBUTOR" shall mean each person appointed as the
exclusive distributor for the Shares of the Portfolio after the Distributor
ceases to serve in that capacity.
2. ALLOCATION RULES. In determining the Distributor's 12b-1 Share
in respect of a particular Portfolio:
(a) There shall be allocated to the Distributor and each Other
Distributor all Commission Shares of such Portfolio which were sold while such
Distributor or such Other Distributor, as the case may be, was the exclusive
distributor for the Shares of the Portfolio, determined in accordance with the
transfer records maintained for such Portfolio.
(b) REINVESTED SHARES: On the date that any Shares are issued
by a Portfolio as a result of the reinvestment of dividends or other
distributions, whether ordinary income, capital gains or exempt-interest
dividend or distributions ("Reinvested Shares"), Reinvested Shares shall be
allocated to the Distributor and each Other Distributor in a number obtained by
multiplying the total number of Reinvested Shares issued on such date by a
fraction, the numerator of which is the total number of all Shares outstanding
in such Fund as of the opening of business on such date and allocated to the
Distributor or Other Distributor as of such date of determination pursuant to
these allocation procedures and the denominator is the total number of Shares
outstanding as of the opening of business on such date.
(c) EXCHANGE SHARES: There shall be allocated to the
Distributor and each Other Distributor, as the case may be, all Commission
Shares of such Portfolio which were issued during or after the period referred
to in (a) as a consequence of one or more free exchanges of Commission Shares of
the Portfolio or of another portfolio (other than Free Appreciation Shares) (the
"Exchange Shares"), which in accordance with the transfer records maintained for
such Portfolio can be traced to Commission Shares of the Portfolio or another
portfolio initially issued by the Company or such other portfolio during
A-1
<PAGE>
the time the Distributor or such Other Distributor, as the case may be, was the
exclusive distributor for the Shares of the Portfolio or such other portfolio.
(d) FREE APPRECIATION SHARES: Shares (other than Exchange
Shares) that were acquired by the holders of such Shares in a free exchange of
Shares of any other Portfolio, which represent the appreciated value of the
Shares of the exiting portfolio over the initial purchase price paid for the
Shares being redeemed and exchanged and for which the original purchase date and
the original purchase price are not identified on an on-going basis, shall be
allocated to the Distributor and each Other Distributor ("Free Appreciation
Shares") daily in a number obtained by multiplying the total number of Free
Appreciation Shares issued by the exiting portfolio on such date by a fraction,
the numerator of which is the total number of all Shares outstanding as of the
opening of business on such date allocated to the Distributor or such Other
Distributor as of such date of determination pursuant to these allocation
procedures and the denominator is the total number of Shares outstanding as of
the opening of business on such date.
(e) REDEEMED SHARES: Shares (other than Reinvested Shares and
Free Appreciation Shares) that are redeemed will be allocated to the Distributor
and each Other Distributor to the extent such Share was previously allocated to
the Distributor or such Other Distributor in accordance with the rules set forth
in 2(a) or (c) above. Reinvested Shares and Free Appreciation Shares that are
redeemed will be allocated to the Distributor and each Other Distributor daily
in an amount equal to the number of Free Appreciation Shares and Reinvested
Shares of such Portfolio being redeemed on such date, which amount is obtained
by multiplying the total number of Free Appreciation Shares and Reinvested
Shares being redeemed by such Portfolio on such date by a fraction, the
numerator of which is the total number of all Free Appreciation Shares and
Reinvested Shares of such Portfolio outstanding as of the opening of business on
such date allocated to the Distributor or to such Other Distributor as of such
date of determination and the denominator is the total number of Free
Appreciation Shares and Reinvested Shares of such Portfolio outstanding as of
the opening of business on such date.
The Fund shall use its best efforts to assure that the transfer agents and
sub-transfer agents for each Portfolio maintain the data necessary to implement
the foregoing rules. If, notwithstanding the foregoing, the transfer agents or
sub-transfer agents for such Portfolio are unable to maintain the data necessary
to implement the foregoing rules as written, and if the Distributor shall cease
to serve as exclusive distributor of the Shares of the Portfolio, the
Distributor and the Portfolio agree to negotiate in good faith with each other,
with the transfer agents and sub-transfer agents for such Portfolio and with any
third party that has obtained an interest in the Distributor's 12b-1 Share in
respect of such Portfolio with a view to arriving at mutually satisfactory
modifications to the foregoing rules designed to accomplish substantially
identical results on the basis of data which can be made available.
A-2
<PAGE>
DISTRIBUTION AGREEMENT
BETWEEN
AIM SERIES TRUST
AND
A I M DISTRIBUTORS, INC.
ADVISOR CLASS SHARES
THIS AGREEMENT made this 29th day of May, 1998, by and between AIM Series
Trust, a Delaware business trust (the "Company"), with respect to the Advisor
Class shares (the "Shares") of each series of beneficial interest set forth on
Appendix A to this Agreement (the "Portfolios"), and A I M Distributors, Inc., a
Delaware corporation (the "Distributor").
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other good
and valuable consideration, the receipt whereof is hereby acknowledged, the
parties hereto agree as follows:
FIRST: The Company on behalf of the Portfolios hereby appoints the
Distributor as its exclusive agent for the sale of Shares to the public directly
and through investment dealers and financial institutions in the United States
and throughout the world.
SECOND: The Company shall not sell any Shares except through the
Distributor and under the terms and conditions set forth in paragraph FOURTH
below. Notwithstanding the provisions of the foregoing sentence, however:
(A) the Company may issue Shares to any other investment company or
personal holding company, or to the shareholders thereof, in exchange for all or
a majority of the shares or assets of any such company; and
(B) the Company shall have the right to specify minimum amounts for
initial and subsequent orders for the purchase of Shares in connection with
certain classes of transactions or to certain classes of persons, in accordance
with Rule 22d-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), provided that any such class is specified in the then current prospectus
of the applicable Portfolio.
THIRD: The Distributor hereby accepts appointment as exclusive agent for
the sale of the Shares and agrees that it will use its best efforts to sell such
Shares; provided, however, that:
<PAGE>
(A) the Distributor may, and when requested by the Company on behalf of
the Shares shall, suspend its efforts to effectuate such sales at any time when,
in the opinion of the Distributor or of the Company, no sales should be made
because of market or other economic considerations or abnormal circumstances of
any kind;
(B) the Company may withdraw the offering of the Shares (i) at any time
with the consent of the Distributor, or (ii) without such consent when so
required by the provisions of any statute or of any order, rule or regulation of
any governmental body having jurisdiction; and
(C) the Distributor, as agent, does not undertake to sell any specific
amount of the Shares.
FOURTH:
(A) The public offering price of Shares (the "offering price") shall be
the net asset value per share of the applicable Portfolio. Net asset value per
share shall be determined in accordance with the provisions of the then current
prospectus and statement of additional information of the applicable Portfolio.
FIFTH: The Distributor shall act as agent of the Company in connection
with the sale and repurchase of Shares. Except with respect to such sales and
repurchases, the Distributor shall act as principal in all matters relating to
the promotion of the sale of Shares and shall enter into all of its own
engagements, agreements and contracts as principal on its own account. The
Distributor shall enter into agreements with investment dealers and financial
institutions selected by the Distributor, authorizing such investment dealers
and financial institutions to offer and sell the Shares to the public upon the
terms and conditions set forth therein, which shall not be inconsistent with the
provisions of this Agreement. Each agreement shall provide that the investment
dealer and financial institution shall act as a principal, and not as an agent,
of the Company.
SIXTH: The Shares shall bear:
(A) the expenses of qualification of Shares for sale in connection with
such public offerings in such states as shall be selected by the Distributor,
and of continuing the qualification therein until the Distributor notifies the
Company that it does not wish such qualification continued; and
(B) all legal expenses in connection with the foregoing.
SEVENTH: The Distributor shall bear the expenses of printing from the
final proof and distributing the prospectuses and statements of additional
information for the Shares (including supplements thereto) relating to public
offerings made by the Company pursuant to such prospectuses (which shall not
include those prospectuses and statements of additional information, and
supplements thereto, to be distributed to existing shareholders of the Shares),
and any other promotional or sales literature used by the Distributor or
furnished by the
2
<PAGE>
Distributor to dealers in connection with such public offerings, and expenses of
advertising in connection with such public offerings.
EIGHTH: The Distributor will accept orders for the purchase of Shares only
to the extent of purchase orders actually received and not in excess of such
orders, and it will not avail itself of any opportunity of making a profit by
expediting or withholding orders. It is mutually understood and agreed that the
Company may reject purchase orders where, in the judgment of the Company, such
rejection is in the best interest of the Company.
NINTH: The Company, on behalf of the Portfolios, and the Distributor shall
each comply with all applicable provisions of the 1940 Act, the Securities Act
of 1933 and all other federal and state laws, rules and regulations governing
the issuance and sale of Shares.
TENTH:
(A) In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Distributor, the Company on behalf of the Portfolios agrees to indemnify the
Distributor against any and all claims, demands, liabilities and expenses which
the Distributor may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein, the omission of
which makes any statement contained therein misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor. The Distributor agrees to indemnify the Company and the
Portfolios against any and all claims, demands, liabilities and expenses which
the Company or a Portfolio may incur arising out of or based upon any act or
deed of the Distributor or its sales representatives which has not been
authorized by the Company or a Portfolio in its prospectus or in this Agreement.
(B) The Distributor agrees to indemnify the Company and the Portfolios
against any and all claims, demands, liabilities and expenses which the Company
or the Portfolios may incur under the Securities Act of 1933, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in any registration statement or prospectus of a
Portfolio, or any omission to state a material fact therein if such statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Company or a Portfolio in connection therewith by or on behalf
of the Distributor.
(C) Notwithstanding any other provision of this Agreement, the Distributor
shall not be liable for any errors of the Portfolios' transfer agent(s), or for
any failure of any such transfer agent to perform its duties.
ELEVENTH: Nothing herein contained shall require the Company to take any
action contrary to any provision of its Agreement and Declaration of Trust, or
to any applicable statute or regulation.
3
<PAGE>
TWELFTH: This Agreement shall become effective with respect to the Shares
of each Portfolio as of the date hereof, shall continue in force and effect for
two years from the date hereof, and shall continue in force and effect from year
to year thereafter, provided, that such continuance is specifically approved
with respect to such Portfolio at least annually (a)(i) by the Board of Trustees
of the Company or (ii) by the vote of a majority of the outstanding voting
securities (as defined in Section 2(a)(42) of the 1940 Act), and (b) by vote of
a majority of the Company's trustees who are not parties to this Agreement or
"interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of any
party to this Agreement cast in person at a meeting called for such purpose.
THIRTEENTH:
(A) This Agreement may be terminated with respect to the Shares of any
Portfolio at any time, without the payment of any penalty, by vote of the Board
of Trustees of the Company or by vote of a majority of the outstanding voting
securities of the applicable Portfolio, or by the Distributor, on sixty (60)
days' written notice to the other party.
(B) This Agreement shall automatically terminate in the event of its
assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act.
FOURTEENTH: Any notice under this Agreement shall be in writing, addressed
and delivered, or mailed postage prepaid, to the other party at such address as
the other party may designate for the receipt of notices. Until further notice
to the other party, it is agreed that the addresses of both the Company and the
Distributor shall be 11 Greenway Plaza, Suite 100, Houston, Texas 77046.
FIFTEENTH: Notice is hereby given that, as provided by applicable law, the
obligations of or arising out of this Agreement are not binding upon any of the
shareholders of the Company individually, but are binding only upon the assets
and property of the Company and that the shareholders shall be entitled, to the
fullest extent permitted by applicable law, to the same limitation on personal
liability as stockholders of private corporations for profit.
SIXTEENTH: This Agreement shall be deemed to be a contract made in the
State of Delaware and governed by, construed in accordance with and enforced
pursuant to the internal laws of the State of Delaware without reference to its
conflicts of laws rules.
4
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in duplicate on the day and year first above written.
AIM SERIES TRUST
By:
----------------------------------
Name: William J. Guilfoyle
Title: President
Attest:
- ------------------------------
Name: Michael A. Silver
Title: Assistant Secretary
A I M DISTRIBUTORS, INC.
By:
----------------------------------
Name: Michael J. Cemo
Title: President
Attest:
- ------------------------------
Name:
Title:
5
<PAGE>
APPENDIX A
TO
DISTRIBUTION AGREEMENT
OF
SERIES TRUST
ADVISOR CLASS SHARES
- --------------------
AIM New Dimension Fund
6
<PAGE>
CUSTODIAN CONTRACT
Between
AIM Series Trust
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
1. Employment of Custodian and Property to be Held By It 1
2. Duties of the Custodian with Respect to Property of the Fund Held by the
Custodian in the United States 2
2.1 Holding Securities 2
2.2 Delivery of Securities 3
2.3 Registration of Securities 7
2.4 Bank Accounts 8
2.5 Availability of Federal Funds 9
2.6 Collection of Income 9
2.7 Payment of Fund Monies 10
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased 12
2.9 Appointment of Agents 13
2.10 Deposit of Fund Assets in Securities System 13
2.10A Fund Assets Held in the Custodian's Direct Paper System 16
2.11 Segregated Account 17
2.12 Ownership Certificates for Tax Purposes 18
2.13 Proxies 18
2.14 Communications Relating to Portfolio Securities 18
3. Duties of Custodian With Respect to Property of the Fund Held
Outside of the United States 19
3.1 Appointment of Foreign Sub-Custodians 19
3.2 Assets to be Held 20
3.3 Foreign Securities Depositories 20
` 3.4 Segregation of Securities 20
3.5 Agreements with Foreign Banking Institutions 21
3.6 Access of Independent Accountants of the Fund 22
3.7 Reports by Custodian 22
3.8 Transactions in Foreign Custody Account 22
3.9 Liability of Foreign Sub-Custodian 23
3.10 Liability of Custodian 24
3.11 Reimbursement for Advances 24
3.12 Monitoring Responsibilities 25
3.13 Branches of U.S. Banks 26
<PAGE>
4. Payments for Sales or Repurchase or Redemptions of Shares
of the Fund 26
5. Proper Instructions 27
6. Actions Permitted Without Express Authority 28
7. Evidence of Authority 28
8. Records 29
9. Opinion of Fund's Independent Accountants 30
10. Reports to Fund by Independent Public Accountants 30
11. Compensation by Custodian 31
12. Responsibility of Custodian 31
13. Effective Period, Termination and Amendment 33
14. Successor Custodian 34
15. Interpretive and Additional Provisions 36
16. Additional Funds 36
17. Massachusetts Law to Apply 37
18. Prior Contracts 37
</TABLE>
<PAGE>
CUSTODIAN CONTRACT
This Contract between AIM Series Trust, a business trust organized and
existing under the laws of Delaware, having its principal place of business at
50 California Street, San Francisco, California 94111, "Fund", and State Street
Bank and Trust Company, a Massachusetts trust company, having its principal
place of business at 225 Franklin Street, Boston, Massachusetts, 02110,
hereinafter called the "Custodian."
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares in one series, the
AIM New Dimension Fund (such series together with all other series subsequently
established by the Fund and made subject to this Contract in accordance with
Article 16, being herein referred to as the "Portfolio(s)");
NOW THEREFOR, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolio(s) of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio(s), desires to be held in places within the United
States ("domestic securities") and securities it desires to be held outside the
United States ("foreign securities") pursuant to the provisions of the Fund's
Agreement and Declaration of Trust. The Fund, on behalf of the Portfolio(s),
agrees to deliver to the Custodian all securities and cash of
1
<PAGE>
the Portfolio(s), and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the
Portfolio(s) from time to time, and the cash consideration received by it for
such new or treasury shares of beneficial interest of the Fund representing
interests in the Portfolio(s) ("Shares"), as may be issued or sold from time to
time. The Custodian shall not be responsible for any property of a Portfolio
held or received by the Portfolio and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such sub-
custodian has to the Custodian. The Custodian may employ as sub-custodian for
the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY THE
CUSTODIAN IN THE UNITED STATES
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, to be held by
it in the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency
2
<PAGE>
which acts as a securities depository or in a book-entry system
authorized by the U. S. Department of the Treasury, collectively
referred to herein as "Securities System" and (b) commercial paper of an
issuer for which State Street Bank and Trust Company acts as issuing and
paying agent ("Direct Paper") which is deposited and/or maintained in
the Direct Paper System of the Custodian pursuant to Section 2.10A.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or in a
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only
upon receipt of Proper Instructions from the Fund on behalf of the
applicable Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the
Portfolio and receipt of payment therefor;
2) Upon the receipt of payment in connection with any
repurchase agreement related to such securities entered into
by the Portfolio;
3) In the case of a sale effected through a Securities System,
in accordance with the provisions of Section 2.10 thereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in
3
<PAGE>
any such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name
of any agent appointed pursuant to Section 2.9 or into the
name or nominee name of any sub-custodian appointed pursuant
to Article 1; or for exchange for a different number of
bonds, certificates or other evidence representing the same
aggregate face amount or number of units; PROVIDED that, in
any such case, the new securities are to be delivered to the
Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise
from the Custodian's own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant
4
<PAGE>
to any deposit agreement; provided that, in any such case,
the new securities and cash, if any, are to be delivered to
the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts
or temporary securities for definitive securities; provided
that, in any such case, the new securities and cash, if any,
are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made
by the Portfolio, BUT ONLY against receipt of adequate
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that
in connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the
receipt of such collateral;
11) For delivery as security in connection with any borrowings
by the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, BUT ONLY
against receipt of amounts borrowed;
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12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and a
member of The National Association of Securities Dealers,
Inc. ("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or
organizations regarding escrow or other arrangements in
connection with transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered
under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission
and/or any Contract Market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent,
("Transfer Agent") for the Fund, for delivery to such
Transfer Agent or to the holders of shares in connection
with distributions in kind, as may be described from time to
time in the currently effective prospectus and statement of
additional information of the Fund, related to the
6
<PAGE>
Portfolio ("Prospectus"), in satisfaction of requests by
holders of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, BUT ONLY upon
receipt of, in addition to Proper Instructions from the Fund
on behalf of the applicable Portfolio, a certified copy of a
resolution of the Board of Trustees or of the Executive
Committee signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, specifying the
securities of the Portfolio to be delivered, setting forth
the purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose, and naming
the person or persons to whom delivery of such securities
shall be made.
2.3 REGISTRATION OF SECURITIES. Domestic Securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, UNLESS the Fund has authorized in
writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as
the Portfolio, or in the name or nominee name of any agent appointed
pursuant to Section 2.9 or in the name or nominee name of any
sub-custodian appointed pursuant to Article 1. All securities accepted
by the Custodian on behalf of the Portfolio under the terms of this
Contract shall be in "street name" or other good delivery from.
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2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio
of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Portfolio, other than cash maintained by
the Portfolio in a bank account established and used in accordance with
Rule 17f-3 under the Investment Company Act of 1940 as amended (the
"1940 Act"). Funds held by the Custodian for a Portfolio may be
deposited by it to its credit as Custodian in the Banking Department of
the Custodian or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; PROVIDED, however, that every
such bank or trust company shall be qualified to act as a custodian
under the 1940 Act and that each such bank or trust company and the
funds to be deposited with each such bank or trust company shall on
behalf of each applicable Portfolio be approved by vote of a majority of
the Board of Trustees of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
2.5 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Fund
on behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf
of a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in
8
<PAGE>
payment for Shares of such Portfolio which are deposited into the
Portfolio's account.
2.6 COLLECTION OF INCOME. The Custodian shall collect on a timely basis all
income and other payments with respect to registered domestic securities
held hereunder to which each Portfolio shall be entitled either by law
or pursuant to custom in the securities business, and shall collect on a
timely basis all income and other payments with respect to bearer
domestic securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent thereof and shall
credit such income, as collected, to such Portfolio's custodian account.
Without limiting the generality of the foregoing, the Custodian shall
detach and present for payment all coupons and other income items
requiring presentation as and when they become due and shall collect
interest when due on securities held hereunder. Income due each
Portfolio on securities loaned pursuant to the provisions of Section
2.2(10) shall be the responsibility of the Fund. The Custodian will have
no duty or responsibility in connection therewith, other than to provide
the Fund with such information or data as may be necessary to assist the
Fund in arranging for the timely delivery to the Custodian of the income
to which the Portfolio is properly entitled.
2.7 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions from the
Fund on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall
pay out monies of a Portfolio in the following cases only:
9
<PAGE>
1) Upon the purchase of securities, options, futures contracts
or options on futures contracts for the account of the
Portfolio but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian
(or any bank, banking firm or trust company doing business
in the United States or abroad which is qualified under the
1940 Act to act as a custodian and has been designated by
the Custodian as its agent for this purpose) registered in
the name of the Portfolio or in the name of a nominee of the
Custodian referred to in Section 2.3 hereof or in proper
form for transfer; (b) in the case of a purchase effected
through a Securities System, in accordance with the
conditions set forth in Section 2.10 hereof; (c) in the case
of a purchase involving the Direct Paper System, in
accordance with the conditions set forth in Section 2.10A;
(d) in the case of repurchase agreements entered into
between the Fund on behalf of the Portfolio and the
Custodian, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities
either in certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with such
securities or (ii) against delivery of the receipt
evidencing purchase by the Portfolio of securities owned by
the Custodian along with written evidence of the agreement
by the Custodian to repurchase such securities from the
Portfolio or (e) for transfer to a time
10
<PAGE>
deposit account of the Fund in any bank, whether domestic or
foreign; such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Fund as defined in
Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section
2.2 hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following
payments for the account of the Portfolio: interest, taxes,
management, accounting, transfer agent and legal fees, and
operating expenses of the Fund whether or not such expenses
are to be in whole or part capitalized or treated as
deferred expenses;
5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect
of securities sold short;
7) For any other proper purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions from the Fund on behalf of
the Portfolio, a certified copy of a resolution of the Board
of Trustees or of the Executive Committee of the Fund signed
by an officer of the Fund and certified by its Secretary or
an Assistant Secretary, specifying
11
<PAGE>
the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to
be a proper purpose, and naming the person or persons to
whom such payment is to be made.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written instructions
from the Fund on behalf of such Portfolio to so pay in advance, the
Custodian shall be absolutely liable to the Fund for such securities to
the same extent as if the securities had been received by the Custodian.
2.9 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under 1940 Act to act as a custodian,
as its agent to carry out such of the provisions of this Article 2 as
the Custodian may from time to time direct; PROVIDED, however, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.10 DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS. The Custodian may deposit
and/or maintain securities owned by a Portfolio in a clearing agency
registered with the Securities and Exchange Commission under Section 17A
of the Exchange Act, which acts as a securities depository, or in the
book-entry system authorized by the U. S. Department of the Treasury and
certain federal agencies, collectively referred to herein as "Securities
System" in accordance with
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<PAGE>
applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a
Securities System provided that such securities are
represented in an account ("Account") of the Custodian in
the Securities System which shall not include any assets of
the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of
the Portfolio which are maintained in a Securities System
shall identify by book-entry those securities belonging to
the Portfolio;
3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the
Securities System that such securities have been transferred
to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and
transfer for the account of the Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the Securities
System that payment for such securities has been transferred
to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and
payment for the account of the Portfolio. Copies of all
advises from the Securities System of transfer of securities
for the account of the Portfolio shall identify the
Portfolio, be maintained for the Portfolio by the Custodian
and be
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<PAGE>
provided to the Fund at its request. Upon request, the
Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
portfolio in the form of a written advice or notice and
shall furnish to the Fund on behalf of the Portfolio copies
of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of the
Portfolio.
4) The Custodian shall provide the Fund for the Portfolio with
any report obtained by the Custodian on the Securities
System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the
Securities System;
5) The Custodian shall have received from the Fund on behalf of
the Portfolio the initial or annual certificate, as the case
may be, required by Article 13 hereof;
6) Anything to the contrary in this Contract notwithstanding,
the Custodian shall be liable to the Fund for the benefit of
the Portfolio for any loss or damage to the Portfolio
resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or
any of its agents or of any of its or their employees or
from failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the
Securities System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian
with respect to any
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<PAGE>
claim against the Securities System or any other person
which the Custodian may have as a consequence of any such
loss or damage if and to the extent that the Portfolio has
not been made whole for any such loss or damage.
2.10A FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM
The Custodian may deposit and/or maintain securities owned by a
Portfolio in the Direct Paper System of the Custodian subject to the
following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions from the Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are represented
in an account ("Account") of the Custodian in the Direct
Paper System which shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian
or otherwise for customers;
3) The records of the Custodian with respect to securities of
the Portfolio which are maintained in the Direct Paper
System shall identify by book-entry those securities
belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on the
records of the Custodian to reflect such payment and
transfer of securities to the account of the Portfolio. The
Custodian shall transfer securities sold for the account of
the Portfolio upon the making of an entry
15
<PAGE>
on the records of the Custodian to reflect such transfer and
receipt of payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the
account of the Portfolio, in the form of a written advice or
notice, of Direct Paper on the next business day following
such transfer and shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting each
day's transaction in the Securities System for the account
of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal
accounting control as the Fund may reasonably request from
time to time.
2.11 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on
behalf of each such Portfolio, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the Fund on behalf
of the Portfolio, the Custodian and a broker-dealer registered under the
Exchange Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating to
compliance with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or the Commodity Futures
Trading Commission or any
16
<PAGE>
registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection with
transactions by the Portfolio, (ii) for purposes of segregating cash or
government securities in connection with options purchased, sold or
written by the Portfolio or commodity futures contract or options
thereon purchased or sold by the Portfolio, (iii) for the purposes of
compliance by the Portfolio with the procedures required by Investment
Company Act Release No. 10666, or any subsequent release or releases of
the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for
other proper corporate purposes, BUT ONLY, in the case of clause (iv),
upon receipt of, in addition to Proper Instructions from the Fund on
behalf of the applicable Portfolio, a certified copy of a resolution of
the Board of Trustees or of the Executive Committee signed by an officer
of the Fund and certified by the Secretary or an Assistant Secretary,
setting forth the purpose or purposes of such segregated account and
declaring such purposes to be proper corporate purposes.
2.12 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to domestic securities of each Portfolio held by
it and in connection with transfers of securities.
2.13 PROXIES. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than in
the name of the
17
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Portfolio or a nominee of the Portfolio, all proxies, without indication
of the manner in which such proxies are to be voted, and shall promptly
deliver to the Portfolio such proxies, all proxy soliciting materials
and all notices relating to such securities.
2.14 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. The Custodian shall
transmit promptly to the Fund for each Portfolio all written information
(including, without limitation, pendency of calls and maturities of
domestic securities and expirations of rights in connection therewith
and notices of exercise of call and put options written by the Fund of
behalf of the Portfolio and the maturity of futures contracts purchased
or sold by the Portfolio) received by the Custodian from issuers of the
securities being held for the Portfolio. With respect to tender or
exchange offers, the Custodian shall transmit promptly to the Portfolio
all written information received by the Custodian from issuers of the
securities whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer. If the Portfolio desires
to take action with respect to any tender offer, exchange offer or any
other similar transaction, the Portfolio shall notify the Custodian at
least three business days prior to the date on which the Custodian is to
take such action.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD
OUTSIDE OF THE UNITED STATES
3.1 APPOINTMENT OF FOREIGN SUB-CUSTODIANS. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Portfolio's
securities and other assets maintained outside the United States the
foreign banking
18
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institutions and foreign securities depositories designated on Schedule
A hereto ("foreign sub-custodians"). Upon receipt of "Proper
Instructions", as defined in Section 5 of this Contract, together with a
certified resolution of the Fund's Board of Trustees, the Custodian and
the Fund may agree to amend Schedule A hereto from time to time to
designate additional foreign banking institutions and foreign securities
depositories to act as sub-custodian. Upon receipt of Property
Instructions, the Fund may instruct the Custodian to cease the
employment of any one or more such sub-custodians for marinating custody
of the Portfolio's assets.
3.2 ASSETS TO BE HELD. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities," as defined in paragraph (c)(1) of Rule 17f-5 under
the 1940 Act and (b) cash and cash equivalents in such amounts as the
Custodian or the Fund may determine to be reasonably necessary to effect
the Portfolio's foreign securities transactions.
3.3 FOREIGN SECURITIES DEPOSITORIES. Except as may otherwise be agreed upon
in writing by the Custodian and the Fund, assets of the Portfolios shall
be maintained in foreign securities depositories only through
arrangements implemented by the foreign banking institutions serving as
sub-custodians pursuant to the terms hereof. Where possible, such
arrangements shall include entry into agreements containing the
provisions set forth in Section 3.5 hereof.
3.4 SEGREGATION OF SECURITIES.
(a) The Custodian shall identify on its books as belonging to each
applicable Portfolio of the Fund, the foreign securities of such Portfolios held
by each foreign sub-
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custodian. Each agreement pursuant to which the Custodian employs a foreign
banking institution shall require that such institution establish a custody
account for the Custodian on behalf of the Fund for each applicable Portfolio of
the Fund and physically segregate in each account, securities and other assets
of the Portfolios, and, in the event that such institution deposits the
securities of one or more of the Portfolios in a foreign securities depository,
that it shall identify on its books as belonging to the Custodian, as agent for
each applicable Portfolio, the securities so deposited.
(b) Notwithstanding any provisions of this Contract to the contrary, the
Custodian may hold securities and other non-cash property for all of its
customers, including the Fund, with a foreign sub-custodian in a single account
that is identified as belonging to the Custodian for the benefit of its
customers PROVIDED HOWEVER, that (i) the records of the Custodian with respect
to securities and other non-cash property of the Fund which are maintained in
such account shall identify by book-entry those securities and other non-cash
property belonging to the Fund and (ii) the Custodian shall require that
securities and other non-cash property so held by the foreign sub-custodian be
held separately from any assets of the foreign sub-custodian or of others.
3.5 AGREEMENTS WITH FOREIGN BANKING INSTITUTIONS. Each agreement with a
foreign banking institution shall be substantially in the form set forth
in Exhibit 1 hereto and shall provide that: (a) the assets of each
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign
20
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banking institution of its creditors or agent, except a claim of payment
for their safe custody or administration; (b) beneficial ownership for
the assets of each portfolio will be freely transferable without the
payment of money or value other than for custody or administration; (c)
adequate records will be maintained identifying the assets as belonging
to each applicable Portfolio; (d) officers of or auditors employed by,
or other representatives of the Custodian, including to the extent
permitted under applicable law the independent public accountants for
the Fund, will be given access to the books and records of the foreign
banking institution relating to its actions under its agreement with the
Custodian; and (e) assets of the Portfolios held by the foreign
sub-custodian will be subject only to the instructions of the Custodian
or its agents.
3.6 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUND. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books
and records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the
performance of such foreign banking institution under its agreement with
the Custodian.
3.7 REPORTS BY CUSTODIAN. The Custodian will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Portfolio(s) held by foreign
sub-custodians, including but not limited to an identification of
entities having possession of the Portfolio(s) securities and other
assets and advises or notifications of any transfers of securities to or
from each custodial account maintained by a foreign banking institution
for the
21
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Custodian on behalf of each applicable Portfolio indicating, as to
securities acquired for a Portfolio, the identity of the entity having
physical possession of such securities.
3.8 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
(a) Except as otherwise provided in paragraph (b) of this Section 3.8,
the provision of Sections 2.2 and 2.7 of this Contract shall apply,
MUTATIS MUTANDIS, to the foreign securities of the Fund held outside the
United States by foreign sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the
account of each applicable Portfolio may be affected in accordance with
the customary established securities trading or securities processing
practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivering securities
to the purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of receiving
later payment for such securities from such purchaser or dealer.
(c) Securities maintained in the custody of a foreign sub-custodian may
be maintained in the name of such entity's nominee to the same extent as
set forth in Section 2.3 of this Contract, and the Fund agrees to hold
any such nominee harmless from any liability as a holder of record of
such securities.
3.9 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign
sub-custodian shall
22
<PAGE>
require the institution to exercise reasonable care in the performance
of its duties and to indemnify, and hold harmless, the Custodian and
each Fund from and against any loss, damage, cost, expense, liability or
claim arising out of or in connection with the institution's performance
of such obligations. At the election of the Fund, it shall be entitled
to be subrogated to the rights of the Custodian with respect to any
claims against a foreign banking institution as a consequence of any
such loss, damage, cost, expense, liability or claim if and to the
extent that the Fund has not been made whole for any such loss, damage,
cost, expense, liability or claim.
3.10 LIABILITY OF CUSTODIAN. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same standard of care
as set forth in Exhibit 1 and, regardless of whether assets are
maintained in the custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank as contemplated by
paragraph 3.13 hereof. The Custodian shall not be liable for any loss,
damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism or any loss where the sub-custodian has otherwise exercised
reasonable care. Notwithstanding the foregoing provisions of this
paragraph 3.10, in delegating custody duties to State Street London
Ltd., the Custodian shall not be relived of any responsibility to the
Fund for any loss due to such delegation, except such loss as may result
from (a) political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other losses
(excluding a bankruptcy or insolvency of State
23
<PAGE>
Street London, Ltd. not caused by political risk) due to acts of God,
nuclear incident or other losses under circumstances where the Custodian
and State Street London Ltd. have exercised reasonable care.
3.11 REIMBURSEMENT FOR ADVANCES. If the Fund requires the Custodian to
advance cash or securities for any purpose for the benefit of a
Portfolio including the purchase or sale of foreign exchange or of
contracts for foreign exchange, or in the event that the Custodian or
its nominee shall incur or be assessed any taxes (excluding any
corporate tax liability of the Custodian), charges, expenses,
assessments, claims or liabilities in connection with the performance of
this Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any
property at any time held for the account of the applicable Portfolio
shall be security therefor and should the Fund fail to repay the
Custodian promptly, the Custodian shall after five business days written
notice be entitled to utilize available cash and to dispose of such
Portfolios assets to the extent necessary to obtain reimbursement.
3.12 MONITORING RESPONSIBILITIES. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection
with the initial approval of this Contract. In addition, the Custodian
will promptly inform the Fund in the event that the Custodian learns of
a material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian not the subject of an exemptive order
from the
24
<PAGE>
Securities and Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or
the equivalent thereof) or that its shareholders' equity has declined
below $200 million (in each case computed in accordance with generally
accepted U.S. accounting principles).
3.13 BRANCHES OF U.S. BANKING.
(a) Except as otherwise set forth in this Contract, the provisions
hereof shall not apply where the custody of the Portfolios assets are
maintained in a foreign branch of a banking institution which is a
"bank" as defined by Section 2(a)(5) of the 1940 Act meeting the
qualification set forth in Section 26(a) of said Act. The appointment
of any such branch as a sub-custodian shall be governed by paragraph 1
of this Contract.
(b) Cash held for each Portfolio of the Fund in the United Kingdom
shall be maintained in an interest bearing account established for the
Fund with the Custodian's London branch, which account shall be subject
to the direction of the Custodian, State Street London Ltd. or both.
4. PAYMENT FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND. The
Custodian shall receive from the distributor for the Shares or from the Transfer
Agent of the Fund and deposit into the account of the appropriate Portfolio such
payments as are received for Shares of that Portfolio issued or sold from time
to time by the Fund. The Custodian will provide timely notification to the Fund
on behalf of each such Portfolio and the Transfer Agent of any receipt by it of
payments for Shares of such Portfolio.
25
<PAGE>
From such funds as may be available for the purpose but subject to the
limitations of the Agreement and Declaration of Trust and any applicable votes
of the Board of Trustees of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of shares of a Portfolio, the Custodian is authorized upon receipt
of instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the
redemption or repurchase of Shares of the Fund, the Custodian shall honor checks
drawn on the Custodian by a holder of Shares, which checks have been furnished
by the Fund to the holder of Shares, when presented to the Custodian in
accordance with such procedures and controls as are mutually agreed upon from
time to time between the Fund and the Custodian.
5. PROPER INSTRUCTIONS. Proper Instructions as used throughout this
Contract means a writing signed or initialed by one or more person or persons as
the Board of Trustees shall have from time authorized. Each such writing shall
set forth the specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action is requested. Oral
instructions will be considered Proper Instructions if the Custodian reasonably
believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. The Fund shall cause all
oral instructions to be confirmed in writing. Upon receipt of a certificate of
the Secretary or an Assistant Secretary as to the authorization by the Board of
Trustees of the Fund accompanied by a detailed description of procedures
approved by the Board of Trustees,
26
<PAGE>
Proper Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Board of Trustees and
the Custodian are satisfied that such procedures afford adequate safeguards for
the Portfolios' assets. For purposes of this Section, Proper Instructions shall
include instructions received by the Custodian pursuant to any three-party
agreement which requires a segregated asset account in accordance with Section
2.11.
6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
discretion, without express authority from the Fund on behalf of each applicable
Portfolio:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this Contract,
PROVIDED that all such payments shall be accounted for to the Fund on behalf of
the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other dealings
with the securities and property of the Portfolio except as otherwise directed
by the Board of Trustees of the Fund.
7. EVIDENCE OF AUTHORITY.
The Custodian shall be protected in acting upon any instructions,
notice, request, consent , certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the Fund.
The Custodian may receive and
27
<PAGE>
accept a certified copy of a vote of the Board of Trustees of the Fund as
conclusive evidence (a) of the authority of any person to act in accordance with
such vote or (b) of any determination or of any action by the Board of Trustees
pursuant to the Agreement and Declaration of Trust as described in such vote,
and such vote may be considered as in full force and effect until receipt by the
Custodian of written notice to the contrary.
8. RECORDS
The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such manner as will meet the obligations of the Fund under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All such records shall be
the property of the Fund and shall at all times during the regular business
hours of the Custodian be open for inspection by duly authorized officers,
employees or agents of the Fund and employees and agents of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request, supply the
Fund with a tabulation of securities owned by each Portfolio and held by the
Custodian and shall, when requested to do so by the Fund and for such
compensation as shall be agreed upon between the Fund and the Custodian, include
certificate numbers in such tabulations.
9. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund on behalf of
each applicable Portfolio may from time to time request, to obtain from year to
year favorable opinions from the Fund's independent accountants with respect to
its activities hereunder in connection with the preparation of the Fund's Form
N-1A, and Form N-SAR or other
28
<PAGE>
annual reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.
10. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Fund, on behalf of each of the
Portfolios at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or maintained
in a Securities System, relating to the services provided by the Custodian under
this Contract; such reports, shall be of sufficient scope and in sufficient
detail, as may reasonably be required by the Fund to provide reasonable
assurance that any material inadequacies would be disclosed by such examination,
and, if there are no such inadequacies, the reports shall so state.
11. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian.
12. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
29
<PAGE>
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice. Notwithstanding the
foregoing, the responsibility of the Custodian with respect to redemptions
effected by check shall be in accordance with a separate Agreement entered into
between the Custodian and the Fund.
If the Fund on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of the Custodian, result in the Custodian or
its nominee assigned to the Fund or the Portfolio being liable for the payment
of money or incurring liability of some other form, the Fund on behalf of the
Portfolio, as a prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form satisfactory to
it.
If the Fund requires the Custodian to advance cash or securities for any
purpose for the benefit of a Portfolio including the purchase or sale of foreign
exchange or of contracts for foreign exchange or in the event that the Custodian
or its nominee shall incur or be assessed any taxes (excluding any corporate
tax liability of the Custodian), charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, except such as
may arise from its or its nominee's own negligent action, negligent failure to
act or willful misconduct, any property at any time held for the
30
<PAGE>
account of the applicable Portfolio shall be security therefor and should the
Fund fail to repay the Custodian promptly, the Custodian shall upon five
business days written notice be entitled to utilize available cash and to
dispose of such Portfolio's assets to the extent necessary to obtain
reimbursement. Parties hereby agree that any use of the term reasonable care
shall be given the same meaning as ordinary negligence under Massachusetts law.
13. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than ninety (90) days after the date of such delivery or mailing; PROVIDED,
however that the Custodian shall not with respect to a Portfolio act under
Section 2.10 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of Trustees of the Fund has
approved the initial use of a particular Securities System by such Portfolio and
the receipt of an annual certificate of the Secretary or an Assistant Secretary
that the Board of Trustees has reviewed the use by such Portfolio of such
Securities System, as required in each case by Rules 17f-4 and 17f-5 under the
1940 Act, as amended and that the Custodian shall not with respect to a
Portfolio act under Section 2.10A hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has
31
<PAGE>
approved the initial use of the Direct Paper System by such Portfolio and the
receipt of an annual certificate of the Secretary or an Assistant Secretary that
the Board of Trustees has reviewed the use by such Portfolio of the Direct Paper
System; PROVIDED FURTHER, however, that the Fund shall not amend or terminate
this Contract in contravention of any applicable federal or state regulations,
or any provision of the Articles of Incorporation, and further provided, that
the Fund on behalf of one or more of the Portfolios may at any time by action of
its Board of Trustees (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
14. SUCCESSOR CUSTODIAN
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System.
32
<PAGE>
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank' as defined in the 1940 Act, doing business in Boston,
Massachusetts, of its won selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$25,000,000, all securities, funds and other properties held by the Custodian on
behalf of each applicable Portfolio and all instruments held by the Custodian
relative thereto and all other property held by it under this Contract on behalf
of each applicable Portfolio and to transfer to an account of such successor
custodian all the securities of each such Portfolio held in any Securities
System. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
33
<PAGE>
15. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, PROVIDED that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Agreement and Declaration of Trust of
the Fund. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Contract.
16. ADDITIONAL FUNDS
In the event that the Fund establishes one or more series of Shares in
addition to AIM New Dimension Fund with respect to which it desires to have the
Custodian render services as custodian under the terms hereof, it shall so
notify the Custodian in writing, and if the Custodian agrees in writing to
provide such services, such series of Shares shall become a Portfolio hereunder.
17. LIMITATION OF SHAREHOLDER LIABILITY
It is expressly agreed that the obligations of the Fund hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Fund personally, but shall only bind the assets and
property of the Fund, as provided in the Fund's Agreement and Declaration of
Trust. The execution and delivery of this Contract have been authorized by the
Trustees of the Company, and this Contract has been executed and delivered by an
authorized officer of the Company acting as such; neither such
34
<PAGE>
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the assets and property
of the Fund, as provided in the Fund's Agreement and Declaration of Trust.
18. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
19. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.
35
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the ____ day of May, 1998.
ATTEST: AIM SERIES TRUST
- ----------------------------------- ----------------------------------------
Michael A. Silver Kenneth W. Chancey
Assistant Secretary Vice President, Principal Accounting
Officer and (Acting) CFO
ATTEST: STATE STREET BANK AND TRUST
COMPANY
----------------------------------- ----------------------------------------
Name: Name:
Title: Title:
36
<PAGE>
SCHEDULE A
The following foreign banking institutions and foreign securities depositories
have been approved by the Board of Trustees for use as sub-custodians for the
Fund's securities and other assets:
NONE HAVE BEEN APPROVED.
37
<PAGE>
GT Global Investor Services, Inc. ("GT Services")
Attn: Earle A. Malm II
California Plaza
2121 N. California Boulevard
Suite 450
Walnut Creek, CA 94596
Re: Transfer Agency Agreement for AIM Series Trust (the "Company")
Dear Earle:
We are writing to inform you about the proposed reorganization of GT Global
Series Trust (the "Company") into a newly organized Delaware business trust, AIM
Series Trust (the "Trust"). In connection with this transaction, which is
scheduled to close on May 29, 1998, it is anticipated that each series of the
Company listed on Schedule A to this letter (each an "Old Fund") will transfer
all of its assets to the corresponding series listed on Schedule A (each a "New
Fund") in exchange solely for shares of beneficial interest in such New Fund and
such New Fund's assumption of such Old Fund's liabilities.
Consistent with the "Amendments" provision in Section XXIII of the Transfer
Agency Contract of September 10, 1997, as amended from time to time (the
"Contract"), between the Company and GT Global Investor Services, Inc., the
Company hereby requests that, as of the close of business on May 29, 1998, you
act under the terms of the Contract, including the fee schedule relating
thereto, as Transfer Agent for each New Fund, which shall be deemed to have
succeeded to the corresponding Old Fund's obligations, rights, and duties under
the Contract.
The Company hereby further requests that you agree that the obligations of
the Trust under the Contract shall not be binding upon any of the Trust's
trustees, shareholders, nominees, officers, agents, or employees of the Trust
personally, but shall be binding only upon the assets and property of the New
Fund or New Funds to which such obligations relate.
Please indicate your acceptance of the foregoing by executing two copies of
this Letter Agreement, returning one copy to the Company and retaining one for
your records.
Sincerely,
GT GLOBAL SERIES TRUST
--------------------------
William J. Guilfoyle
President
<PAGE>
Accepted by GT Global Investor Services, Inc.
- ------------------------------
Earle A. Malm II
Chief Operating Officer
<PAGE>
SCHEDULE A
- --------------------------------------------------------------------------------
GT GLOBAL SERIES TRUST AIM SERIES TRUST
- --------------------------------------------------------------------------------
GT Global New Dimension Fund AIM New Dimension Fund
- --------------------------------------------------------------------------------
<PAGE>
FUND ACCOUNTING AND PRICING AGENT AGREEMENT
This Fund Accounting and Pricing Agent Agreement (the "Agreement") is made
as of May 29, 1998, by and between AIM Series Trust (the "Company") and INVESCO
(NY), Inc. ("INVESCO (NY)").
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company;
WHEREAS, the Company currently operates one mutual fund, which is organized
as a separate and distinct series consisting of shares of beneficial interest
(such existing fund and such funds as may hereafter be established being
referred to in this Agreement as the "Funds" and singly as a "Fund");
WHEREAS, the Company is part of a complex of investment companies that are
sub-advised and/or sub-administered by INVESCO (NY) and with which INVESCO (NY)
has entered into Fund Accounting and Pricing Agent Agreements (the "INVESCO (NY)
Funds");
WHEREAS, the Company desires to retain INVESCO (NY) to act as its
accounting and pricing agent, and INVESCO (NY) is willing to act in such
capacities.
NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions hereinafter set forth, the Company and INVESCO (NY) hereby agree as
follows:
SECTION 1. APPOINTMENT. The Company hereby appoints INVESCO (NY) to
act as the accounting and pricing agent for each Fund for the period and on the
terms and conditions set forth in this Agreement. INVESCO (NY) hereby accepts
such appointment and agrees to render the services set forth for the
compensation herein provided.
SECTION 2. DEFINITIONS. As used in this Agreement and in addition to
the terms defined elsewhere herein, the following terms shall have the meanings
assigned to them in this Section:
(a) "Authorized Person" means any officer of the Company and any
other person, whether or not any such person is an officer or employee of
the Company, duly authorized by the Board of Trustees (the "Board"), the
President or any Vice President of the Fund to give Oral and/or Written
Instructions on behalf of the Company or any Fund.
(b) "Commission" means the Securities and Exchange Commission.
(c) "Custodian" means the custodian or custodians employed by
the Company to maintain custody of the Fund's assets.
(d) "Governing Documents" means the Declaration of Trust,
By-Laws and other applicable charter documents of the Company, all as they
may be amended from time to time.
(e) "Oral Instruction" means oral instructions actually received
by
<PAGE>
INVESCO (NY) from an Authorized Person or from a person reasonably believed
by INVESCO (NY) to be an Authorized Person, provided that, any Oral
Instruction shall be promptly confirmed by Written Instructions.
(f) "Prospectus" means the current prospectus and statement of
additional information of a Fund, taken together.
(g) "Shares" means shares of beneficial interest of any of the
Funds.
(h) "Shareholder" means any owner of Shares.
(i) "Written Instructions" means written instructions delivered
by hand, mail, tested telegram or telex, cable or facsimile sending device
received by INVESCO (NY) and signed by an Authorized Person.
SECTION 3. COMPLIANCE WITH LAWS, ETC. In performing its
responsibilities hereunder, INVESCO (NY) shall comply with all terms and
provisions of the Governing Documents, the Prospectus and all applicable state
and federal laws including, without limitation, the 1940 Act and the rules and
regulations promulgated by the Commission thereunder.
SECTION 4. SERVICES. In consideration of the compensation payable
hereunder and subject to the supervision and control of the Company's Boards,
INVESCO (NY) shall provide the following services to the Funds:
(a) PRICING AGENT. As pricing agent, INVESCO (NY) shall:
(1) Obtain security market quotes from services approved by the
investment manager of the Funds or, if such quotes are unavailable,
then obtain such prices from the investment manager of the Funds or
from such sources as the investment manager may direct, and, in either
case, calculate the market value of the Funds' investments; and
(2) Value the assets of the Funds and compute the net asset
value per Share of the Funds at such dates and times and in the manner
specified in the then currently effective Prospectus and transmit to
the Funds' investment manager.
(b) ACCOUNTING AGENT. As fund accounting agent, INVESCO (NY) shall:
(1) Calculate the net income of each Fund;
(2) Calculate capital gains or losses for each Fund from the
sale or disposition of assets, if any;
(3) Maintain the general ledger and other accounts, books and
financial records of the Company, as required under Section 31(a) of
the 1940 Act and the rules promulgated by the Commission thereunder in
connection with the services provided by INVESCO (NY);
-2-
<PAGE>
(4) Perform the following functions on a daily basis:
(A) journalize each Fund's investment, capital share
and income and expense activities;
(B) reconcile cash and investment balances of each Fund
with the Custodian and provide the Funds' investment manager with
the beginning cash balance available for investment purposes and
update the cash availability throughout the day as required by
the investment manager;
(C) verify investment buy/sell trade tickets received from
a Fund's investment manager and transmit trades to a Fund's
Custodian for proper settlement;
(D) maintain individual ledgers for investment securities;
(E) maintain historical tax lots for investment securities;
(F) calculate various contractual expenses (e.g., advisory
and custody fees);
(G) post to and prepare the Funds' statement of assets and
liabilities and statement of operations; and
(H) monitor expense accruals and notify an Authorized
Person of any proposed adjustments;
(5) Receive and act upon notices, Oral and Written Instructions,
certificates, instruments or other communications from a Fund's
shareholder servicing and transfer agent;
(6) Assist in the preparation of financial statements
semiannually which will include the following items:
(A) schedule of investments;
(B) statement of assets and liabilities;
(C) statement of operations;
(D) changes in net assets;
(E) cash statement; and
(F) schedule of capital gains and losses;
(7) Prepare monthly security transaction listings;
(8) Prepare quarterly broker security transactions summaries;
and
-3-
<PAGE>
(9) At the reasonable request of the Company, assist in the
preparation of various reports or other financial documents required
by federal, state and other appropriate laws and regulations.
SECTION 5. COMPENSATION. As compensation for the services rendered
by INVESCO (NY) hereunder during the term of the Agreement, each Fund shall pay
to INVESCO (NY) monthly such fees as shall be agreed to from time to time by the
Company and INVESCO (NY), in writing and attached hereto as Schedule A. In
addition, as may be agreed to from time to time in writing by the Company and
INVESCO (NY), each Fund shall reimburse INVESCO (NY) for certain expenses that
it incurs in rendering services with respect to that Fund under this Agreement.
SECTION 6. RELIANCE BY INVESCO (NY) ON INSTRUCTIONS. Unless
otherwise provided in this Agreement, INVESCO (NY) shall act only upon Oral or
Written Instructions. INVESCO (NY) shall be entitled to rely upon any such
Instructions actually received by it under this Agreement. The Company agrees
that INVESCO (NY) shall incur no liability to the Company or any of the Funds in
acting upon Oral or Written Instructions given to INVESCO (NY) hereunder,
provided that, such Instructions reasonably appear to have been received from an
Authorized Person.
SECTION 7. COOPERATION WITH AGENTS OF THE COMPANY. INVESCO (NY)
shall cooperate with the Company's agents and employees, including, without
limitation, their independent accountants, and shall take all reasonable action
in the performance of its obligations under this Agreement to assure that all
necessary information is made available to such agents to the extent necessary
in the performance of their duties to the Company.
SECTION 8. CONFIDENTIALITY. INVESCO (NY), on behalf of itself and
its employees, agrees to treat confidentially all records and other information
relating to the Company and the Funds except when requested to divulge such
information by duly constituted authorities provided that notification and prior
approval is obtained from the Company, which approval shall not be unreasonably
withheld and may not be withheld if INVESCO (NY), in its judgment, may be
subject to civil or criminal contempt proceedings for failure to comply.
SECTION 9. STANDARD OF CARE. In the performance of its
responsibilities hereunder, INVESCO (NY) shall exercise care and diligence in
the performance of its duties and act in good faith and use its best efforts to
ensure the accuracy and completeness of all services under this Agreement. In
performing services hereunder, INVESCO (NY):
(a) shall be under no duty to take any action on behalf of the
Company or the Funds except as specifically set forth herein or as may be
specifically agreed to by INVESCO (NY) in writing, and in computing the net
asset value per Share of a Fund, INVESCO (NY) may rely upon any information
furnished to it including, without limitation, information (1) as to the
accrual of liabilities of a Fund and as to liabilities of a Fund not
appearing on the books of account kept by INVESCO (NY), (2) as to the
existence, status and proper treatment of reserves, if any, authorized by a
Fund, (3) as to the sources of quotations to be used in computing net asset
value, (4) as to the fair value to be assigned to any securities or other
property for which price quotations are not readily available and (5) as to
the sources of information with respect to "corporate
-4-
<PAGE>
actions" affecting portfolio securities of a Fund (information as to
"corporate actions" shall include information as to dividends,
distributions, interest payments, prepayments, stock splits, stock
dividends, rights offerings, conversions, exchanges, recapitalizations,
mergers, redemptions, calls, maturity dates and similar actions, including
ex-dividend and record dates and the amounts and terms thereof);
(b) shall be responsible and liable for all losses, damages and
costs (including reasonable attorneys' fees) incurred by the Company or any
Fund which is due to or caused by INVESCO (NY)'s negligence in the
performance of its duties under this Agreement or for INVESCO (NY)'s
negligent failure to perform such duties as are specifically assumed by
INVESCO (NY) in this Agreement, provided that, to the extend that duties,
obligations and responsibilities are not expressly set forth in this
Agreement, INVESCO (NY) shall not be liable for any act or omission that
does not constitute willful misfeasance, bad faith or negligence on the
part of INVESCO (NY) or reckless disregard by INVESCO (NY) of such duties,
obligations and responsibilities; and
(c) without limiting the generality of the foregoing, INVESCO
(NY) shall not, in connection with INVESCO (NY)'s duties under this
Agreement, be under any duty or obligation to inquire into and shall not be
liable for or in respect of:
(1) the validity or invalidity or authority or lack of
authority of any Oral or Written Instruction, notice or other
instrument which conforms to the applicable requirements of this
Agreement, if any and that INVESCO (NY) reasonably believes to be
genuine; and
(2) delays or errors or loss of data occurring by reason of
circumstances beyond INVESCO (NY)'s control including, without
limitation, acts of civil or military authorities, national
emergencies, labor difficulties, fire, mechanical breakdown,
denial of access, earthquake, flood or catastrophe, acts of God,
insurrection, war, riots, or failure of the mails,
transportation, communication or power supply.
Notwithstanding any other provisions of this Agreement, the following provisions
shall apply with respect to INVESCO (NY)'s computation of a Fund's net asset
value: INVESCO (NY) shall be held to the exercise of reasonable care in
computing and determining net asset value as provided in Section 4(a), above,
but shall not be held accountable or liable for any losses, damages or expenses
of a Fund or any Shareholder or former Shareholder may incur arising from or
based upon errors or delays in the determination of such net asset value unless
such error or delay was due to INVESCO (NY)'s negligence or willful misfeasance
in the computation and determination of such net asset value. The parties
hereto acknowledge, however, that INVESCO (NY) causing an error or delay in the
determination of net asset value may, but does not in an of itself, constitute
negligence or willful misfeasance. In no event shall INVESCO (NY) be liable or
responsible to the Company or a Fund or any other party for any error or delay
which continued or was undetected after the date of an audit of the Company or
any Fund performed by the certified public accountants employed by the Company
if, in the exercise of reasonable care in accordance with generally accepted
accounting principles, such accountants should have become aware of such error
or delay in the course of performing such audit. INVESCO (NY)'s liability for
any such negligence or willful misfeasance which results in an error in
determination of such net asset value be limited to the direct out-of-pocket
loss a Fund and/or any Shareholder or
-5-
<PAGE>
former Shareholder shall actually incur.
Without limiting the generality of the foregoing, INVESCO (NY) shall
not be held accountable or liable to a Fund a Shareholder or former Shareholder
or any other person for any delays or losses, damages or expenses any of them
may suffer or incur resulting from (1) INVESCO (NY)'s failure to receive timely
and suitable notification concerning quotations, corporate actions or similar
matters relating to or affecting portfolio securities of a Fund or (2) any
errors in the computation of a net asset value based upon or arising out of
quotations or information as to corporate actions if received by INVESCO (NY)
from a source that INVESCO (NY) was authorized to rely upon. Nevertheless,
INVESCO (NY) will use its best judgment in determining whether to verify through
other sources any information that it has received as to quotations or corporate
actions if INVESCO (NY) has reason to believe that any such information is
incorrect.
SECTION 10. RECEIPT OF ADVICE. If INVESCO (NY) is in doubt as to any
action to be taken or omitted by it, INVESCO (NY) may request, and shall be
entitled to rely upon, directions and advice from the Company, including Oral or
Written Instructions where appropriate, or from counsel of its own choosing (who
may also be counsel for the Company or any Fund), with respect to any question
of law. In case of conflict between directions, advice or Oral and Written
Instructions received by INVESCO (NY) pursuant to this Section, INVESCO (NY)
shall be entitled to rely on and follow the advice received from counsel as
described above. INVESCO (NY) shall be protected in any action or in action
that it takes in reliance on any directions, advice or Oral or Written
Instructions received pursuant to this Section that INVESCO (NY), after the
receipt of the same, in good faith believes to be consistent with such
directions, advice or Oral or Written Instructions, as the case may be.
Notwithstanding the foregoing, nothing in this Section shall be construed as
imposing on INVESCO (NY) any obligation to seek such directions, advice or Oral
or Written Instruction, or to act in accordance with them when received, unless
the same is a condition to INVESCO (NY)'s properly taking or omitting to take
such action under the terms of this Agreement.
SECTION 11. INDEMNIFICATION OF INVESCO (NY). The Company agrees to
indemnify and hold harmless INVESCO (NY) and its officers, directors, employees,
nominees and subcontractors, if any, from all taxes, charges, expenses,
assessments, claims and liabilities, including, without limitation, liabilities
arising under the 1940 Act, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the Commodities Exchange Act and
any state or foreign securities or blue sky laws, and expenses, including,
without limitation, reasonable attorneys' fees and disbursements, arising
directly or indirectly from any action or thing that INVESCO (NY) takes or omits
to take or do:
(a) at the request or on the direction of or in reliance upon
the advice of the Company;
(b) upon Oral or Written Instructions; or
(c) in the performance by INVESCO (NY) of its responsibilities
under this Agreement;
provided that, INVESCO (NY) shall not be indemnified against any liability to
the Company or the Funds, or any expenses incident thereto, arising out of
INVESCO (NY)'s own willful
-6-
<PAGE>
misfeasance, bad faith or negligence or reckless disregard of its duties in
connection with the performance of its duties and obligations specifically
described in this Agreement.
SECTION 12. INDEMNIFICATION OF THE COMPANY. INVESCO (NY) agrees to
indemnify and hold harmless the Company and its officers, trustees, directors
and employees, from all taxes, charges, expenses, assessments, claims and
liabilities, including, without limitation, liabilities arising under the 1940
Act, the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, the Commodities Exchange Act and any state or foreign
securities or blue sky laws, and expenses, including, without limitation,
reasonable attorneys' fees and disbursements, arising directly or indirectly
from any action or omission of INVESCO (NY) that does not meet the standard of
care to which INVESCO (NY) is subject under Section 9, above.
SECTION 13. LIMITATION OF LIABILITY OF SHAREHOLDERS AND TRUSTEES OF
THE COMPANY. It is expressly agreed that the obligations of the Company
hereunder shall not be binding upon any of the shareholders, trustees,
directors, officers, nominees, agents or employees of the Company personally,
but shall only bind the assets and property of the applicable Funds, as provided
in the Governing Documents. The execution and delivery of this Agreement has
been authorized by the Board of the Company, and this Agreement has been
executed and delivered by an authorized officer of the Company acting as such,
and neither such authorization by the Board nor such execution and delivery by
such officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the assets
and property of the applicable Fund as provided in the Governing Documents.
SECTION 14. DURATION AND TERMINATION. This Agreement shall continue
with respect to the Company and each Fund until termination with respect to the
Company, or with respect to one or more Funds, is effected by the Company or
INVESCO (NY) upon sixty days' prior written notice to the other. In the event
of the "assignment" of this Agreement within the meaning of the 1940 Act, this
Agreement shall terminate automatically.
SECTION 15. NOTICES. All notices and other communications hereunder,
including Written Instructions, shall be in writing or by confirming telegram,
cable, telex or facsimile sending device. Notices with respect to a party shall
be directed to such address as may from time to time be designated by that party
to the other.
SECTION 16. FURTHER ACTIONS. The Company and INVESCO (NY) agree to
perform such further acts and to execute such further documents as may be
necessary or appropriate to effect the purposes of this Agreement.
SECTION 17. AMENDMENTS. This Agreement, or any part thereof, may be
amended only by an instrument in writing signed by the Company and INVESCO (NY).
SECTION 18. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
SECTION 19. SHAREHOLDER LIABILITY. It is expressly agreed that the
obligations of the Company hereunder shall not be binding upon any of the
Trustees,
-7-
<PAGE>
Shareholders, nominees, officers, agents or employees of the Company personally,
but shall only bind the assets and property of the Funds, as provided in the
Company's Agreement and Declaration of Trust. The execution and delivery of
this Agreement has been authorized by the Trustees of the Company and this
Agreement has been executed and delivered by an authorized officer of the
Company acting as such; neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the assets and property of the Funds, as provided in the
Company's Agreement and Declaration of Trust.
SECTION 20. MISCELLANEOUS. This Agreement embodies the entire
agreement and understanding between the Company and INVESCO (NY) and supersedes
all prior agreements and understandings relating to the subject matter hereof,
provided that the Company and INVESCO (NY) may embody in one or more separate
documents their agreement or agreements with respect to such matters that this
Agreement provides may be later agreed to by and between the Company and INVESCO
(NY) from time to time. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement shall be governed by and construed in accordance with California law.
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding upon and shall inure to
the benefit of the Company and INVESCO (NY) and their respective successors.
IN WITNESS WHEREOF, the Company and INVESCO (NY) have caused this
Agreement to be executed by their officers designated below as of this day,
month and year first above written.
AIM SERIES TRUST
By: ____________________________
Attest: _______________________
INVESCO (NY) INC.
By: ____________________________
Attest: _______________________
-8-
<PAGE>
SCHEDULE A
FUND ACCOUNTING AND PRICING AGENT FEES
The Fund shall pay a Fee to INVESCO (NY) determined as a percentage of the
Fund's net assets. The annualized rate at which the fee is paid (the Fee Rate)
and the Fee shall be calculated as set forth below:
- - An ASSET MULTIPLIER is determined by multiplying .0003 times the first $5
billion in average net assets of the INVESCO (NY) Funds plus .0002 times
the net assets over $5 billion.
- - The FEE RATE is determined by dividing the Asset Multiplier by the net
assets of the INVESCO (NY) Funds.
- - The MONTHLY FEE is determined then by multiplying the average daily Fee
Rate by the number of days in the month and by the Fund's average daily net
assets then dividing by 365/or 366
Example: For Fund X having $100 million in average net assets during December
1997, in which the INVESCO (NY) Funds have average net assets of $8 billion:
Asset Multiplier = (.0003) ($5 billion) + (.0002) ($3 billion) = $2.1 million
Fee Rate = $2.1 million = .0002625
$8 billion
Monthly Fee = ( 31 ) (.0002625) ($100 million) = $2,229.45
( 365 )
<PAGE>
[GRAPHIC]
SELECTED DEALER AGREEMENT
FOR INVESTMENT COMPANIES MANAGED
BY A I M ADVISORS, INC.
To the Undersigned Selected Dealer:
Gentlemen:
A I M Distributors, Inc., as the exclusive national distributor of shares (the
"Shares") of the registered investment companies for which we now or in the
future act as underwriter, as disclosed in each Fund's prospectus, which may be
amended from time to time by us (the "Funds"), understands that you are a member
in good standing of the National Association of Securities Dealers, Inc.
("NASD'), or, if a foreign dealer, that you agree to abide by all of the rules
and regulations of the NASD for purposes of this Agreement (which you confirm by
your signature below). In consideration of the mutual covenants stated below,
you and we hereby agree as follows:
1. Sales of Shares through you will be at the public offering price of such
Shares (the net asset value of the Shares plus any sales charge applicable
to such Shares (the "Sales Charge")), as determined in accordance with the
then effective prospectus or Statement of Additional Information used in
connection with the offer and sale of Shares (collectively, the
"Prospectus"), which public offering price may reflect scheduled variations
in, or the elimination of, the Sales Charge on sales of the Funds' Shares
either generally to the public or in connection with special purchase
plans, as described in the Prospectus. You agree that you will apply any
scheduled variation in, or elimination of, the Sales Charge uniformly to
all offerees in the class specified in the Prospectus.
2. You agree to purchase Shares solely through us and only for the purpose of
covering purchase orders already received from customers or for your own
bona fide investment. You agree not to purchase for any other securities
dealer unless you have an agreement with such other dealer or broker to
handle clearing arrangements and then only in the ordinary course of
business for such purpose and only if such other dealer has executed a
Selected Dealer Agreement with us. You also agree not to withhold any
customer order so as to profit therefrom.
3. The procedures relating to the handling of orders shall be subject to
instructions which we will forward from time to time to all selected
dealers with whom we have entered into a Selected Dealer Agreement. The
minimum initial order shall be specified in the Funds' then current
Prospectuses. All purchase orders are subject to receipt of Shares by us
from the Funds concerned and to acceptance of such orders by us. We reserve
the right in our sole discretion to reject any order.
4. With respect to the Funds the Shares of which are indicated in that Fund's
Prospectus as being sold with a Sales Charge (the "Load Funds"), you will
be allowed the concessions from the public offering price provided in the
Load Funds' Prospectus and/or periodic instruction from us. With respect to
the Funds, the Shares of which are indicated in that
<PAGE>
Page 2
Fund's Prospectus as being sold with a contingent deferred sales charge or
early withdrawal charge (the "CDSC Funds"), you will be paid a commission
as disclosed in the CDSC Fund's Prospectus and/or periodic instructions
from us. With respect to the Funds whose Shares are indicated as being
sold without a Sales Charge or a contingent deferred sales charge (the
"No-Load Funds"), you may charge a reasonable administrative fee. For the
purposes of this Agreement the term Dealer Commission means commissions or
concessions payable to you as disclosed in the Funds' Prospectuses and the
terms "Sales Charge" and "Dealer Commission" apply only to the Load Funds
and the CDSC Funds. All Dealer Commissions are subject to change without
notice by us and will comply with any changes in regulatory requirements.
You agree that you will not combine customer orders to reach breakpoints in
commissions for any purpose whatsoever unless authorized by the Prospectus
or by us in writing.
5. You agree that your transactions in Shares of the Funds will be limited to
(a) the purchase of Shares from us for resale to your customers at the
public offering price then in effect or for your own bona fide investment,
(b) exchanges of Shares between Funds, as permitted by the Funds' then
current registration statement (which includes the Prospectus) and in
accordance with procedures as they may be modified by us from time to time,
and (c) transactions involving the redemption of Shares by a Fund or the
repurchase of Shares by us as an accommodation to shareholders or where
applicable, through tender offers. Redemptions by a Fund and repurchases
by us will be effected in the manner and upon the terms described in the
Prospectus. We will, upon your request, assist you in processing such
orders for redemptions or repurchases. To facilitate prompt payment
following a redemption or repurchase of Shares, the owner's signature shall
appear as registered on the Funds' records and, as described in the
Prospectus, it may be required to be guaranteed by a commercial bank, trust
company or a member of a national securities exchange.
6. Sales and exchanges of Shares may only be made in those states and
jurisdictions where the Shares are registered or qualified for sale to the
public. We agree to advise you currently of the identity of those states
and jurisdictions in which the Shares are registered or qualified for sale,
and you agree to indemnify us and/or the Funds for any claim, liability,
expense or loss in any way arising out of a sale of Shares in any state or
jurisdiction in which such Shares are not so registered or qualified.
7. We shall accept orders only on the basis of the then current offering
price. You agree to place orders in respect of Shares immediately upon the
receipt of orders from your customers for the same number of Shares. Orders
which you receive from your customers shall be deemed to be placed with us
when received by us. Orders which you receive prior to the close of
business, as defined in the Prospectus, and placed with us within the time
frame set forth in the Prospectus shall be priced at the offering price
next computed after they are received by you. We will not accept from you a
conditional order on any basis. All orders shall be subject to confirmation
by us.
<PAGE>
Page 3
8. Your customer will be entitled to a reduction in the Sales Charge on
purchases made under a Letter of Intent or Right of Accumulation described
in the Prospectus. In such case, your Dealer Commission will be based upon
such reduced Sales Charge; however, in the case of a Letter of Intent
signed by your customer, an adjustment to a higher Dealer Commission will
thereafter be made to reflect actual purchases by your customer if he
should fail to fulfill his Letter of Intent. When placing wire trades, you
agree to advise us of any Letter of Intent signed by your customer or of
any Right of Accumulation available to him of which he has made you aware.
If you fail to so advise us, you will be liable to us for the return of any
Dealer Commission plus interest thereon.
9. You and we agree to abide by the Conduct Rules of the NASD and all other
federal and state rules and regulations that are now or may become
applicable to transactions hereunder. Your expulsion from the NASD will
automatically terminate this Agreement without notice. Your suspension from
the NASD or a violation by you of applicable state and federal laws and
rules and regulations of authorized regulatory agencies will terminate this
Agreement effective upon notice received by you from us. You agree that it
is your responsibility to determine the suitability of any Shares as
investments for your customers, and that AIM Distributors has no
responsibility for such determination.
10. With respect to the Load Funds and the CDSC Funds, and unless otherwise
agreed, settlement shall be made at the offices of the Funds' transfer
agent within three (3) business days after our acceptance of the order.
With respect to the No-Load Funds, settlement will be made only upon
receipt by the Fund of payment in the form of federal funds. If payment is
not so received or made within ten (10) business days of our acceptance of
the order, we reserve the right to cancel the sale or, at our option, to
sell the Shares to the Funds at the then prevailing net asset value. In
this event, or in the event that you cancel the trade for any reason, you
agree to be responsible for any loss resulting to the Funds or to us from
your failure to make payments as aforesaid. You shall not be entitled to
any gains generated thereby.
11. If any Shares of any of the Load Funds sold to you under the terms of this
Agreement are redeemed by the Fund or repurchased for the account of the
Funds or are tendered to the Funds for redemption or repurchase within
seven (7) business days after the date of our confirmation to you of your
original purchase order therefore, you agree to pay forthwith to us the
full amount of the Dealer Commission allowed to you on the original sale
and we agree to pay such amount to the Fund when received by us. We also
agree to pay to the Fund the amount of our share of the Sales Charge on the
original sale of such Shares.
12. Any order placed by you for the repurchase of Shares of a Fund is subject
to the timely receipt by the Fund's transfer agent of all required
documents in good order. If such documents are not received within a
reasonable time after the order is placed, the order is subject to
cancellation, in which case you agree to be responsible for any loss
resulting
<PAGE>
Page 4
to the Fund or to us from such cancellation.
13. We reserve the right in our discretion without notice to you to suspend
sales or withdraw any offering of Shares entirely, to change the offering
prices as provided in the Prospectus or, upon notice to you, to amend or
cancel this Agreement. You agree that any order to purchase Shares of the
Funds placed by you after notice of any amendment to this Agreement has
been sent to you shall constitute your agreement to any such amendment.
14. In every transaction, we will act as agent for the Fund and you will act as
principal for your own account. You have no authority whatsoever to act as
our agent or as agent for the Funds, any other Selected Dealer or the
Funds' transfer agent and nothing in this Agreement shall serve to appoint
you as an agent of any of the foregoing in connection with transactions
with your customers or otherwise.
15. No person is authorized to make any representations concerning the Funds or
their Shares except those contained in the Prospectus and any such
information as may be released by us as information supplemental to the
Prospectus. If you should make such unauthorized representation, you agree
to indemnify the Funds and us from and against any and all claims,
liability, expense or loss in any way arising out of or in any way
connected with such representation.
16. We will supply you with copies of the Prospectuses of the Funds (including
any amendments thereto) in reasonable quantities upon request. You will
provide all customers with a prospectus prior to or at the time such
customer purchases Shares. You will provide any customer who so requests a
copy of the Statement of Additional Information within the time dictated by
regulatory requirements, as they may be amended from time to time.
17. You shall be solely responsible for the accuracy, timeliness and
completeness of any orders transmitted by you on behalf of your customers
by wire or telephone for purchases, exchanges or redemptions, and shall
indemnify us against any claims by your customers as a result of your
failure to properly transmit their instructions.
18. No advertising or sales literature, as such terms are defined by the NASD,
of any kind whatsoever will be used by you with respect to the Funds or us
unless first provided to you by us or unless you have obtained our prior
written approval.
19. All expenses incurred in connection with your activities under this
Agreement shall be borne by you.
20. This Agreement shall not be assignable by you. This Agreement shall be
constructed in accordance with the laws of the State of Texas.
<PAGE>
Page 5
21. Any notice to you shall be duly given if mailed or telegraphed to you at
your address as registered from time to time with the NASD.
22. This Agreement constitutes the entire agreement between the undersigned and
supersedes all prior oral or written agreements between the parties hereto.
<PAGE>
Page 6
A I M DISTRIBUTORS, INC.
Date: By: X
------------------------ --------------------------
The undersigned accepts your invitation to become a Selected Dealer
and agrees to abide by the foregoing terms and conditions.
The undersigned acknowledges receipt of Prospectuses for use in
connection with offers and sales of the Funds.
Date By: X
------------------------ --------------------------
Signature
--------------------------
Print Name Title
--------------------------
Dealer's Name
--------------------------
Address
--------------------------
City State Zip
--------------------------
Telephone
Please sign both copies and return one copy of each to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
<PAGE>
[LOGO]
BANK ACTING AS AGENT
FOR ITS CUSTOMERS
Agreement Relating to shares
OF THE AIM FAMILY OF FUNDS-Registered Trademark-
(CONFIRMATION AND PROSPECTUS TO BE SENT BY A I M
DISTRIBUTORS, INC. TO CUSTOMER)
A I M Distributors, Inc. is the exclusive national distributor of the shares of
the registered investment companies for which we now or in the future act as
underwriter, as disclosed in each Fund's prospectus, which may be amended from
time to time (the "Funds"). As exclusive agent for the Funds, we are offering to
make available shares of the Funds (the "Shares") for purchase by your customers
on the following terms:
1. In all sales of Shares you shall act as agent for your customers, and in no
transaction shall you have any authority to act as agent for any Fund or
for us.
2. The customers in question are, for all purposes, your customers and not
customers of A I M Distributors, Inc. In receiving orders from your
customers who purchase Shares, A I M Distributors, Inc. is not soliciting
such customers and, therefore, has no responsibility for determining
whether Shares are suitable investments for such customers.
3. It is hereby understood that in all cases in which you place orders with us
for the purchase of Shares (a) you are acting as agent for the customer;
(b) the transactions are without recourse against you by the customer; (c)
as between you and the customer, the customer will have full beneficial
ownership of the securities; (d) each such transaction is initiated solely
upon the order of the customer; and (e) each such transaction is for the
account of the customer and not for your account.
4. Orders received from you will be accepted by us only at the public offering
price applicable to each order, as established by the then current
prospectus or Statement of Additional Information, (collectively, the
"Prospectus") of the appropriate Fund, subject to the discounts (defined
below) provided in such Prospectus. Following receipt from you of any order
to purchase Shares for the account of a customer, we shall confirm such
order to you in writing. We shall be responsible for sending your customer
a written confirmation of the order with a copy of the appropriate Fund's
current Prospectus. We shall send you a copy of such confirmation.
Additional instructions may be forwarded to you from time to time. All
orders are subject to acceptance or rejection by us in our sole discretion.
5. Members of the general public, including your customers, may purchase
Shares only at the public offering price determined in the manner described
in the current Prospectus of the appropriate Fund. With respect to the
Funds, the Shares of which are indicated in
<PAGE>
Bank Acting as Agent for its Customers Page 2
- --------------------------------------------------------------------------------
that Fund's Prospectus as being sold with a sales charge (i.e. the "Load
Funds"), you will be allowed to retain a commission or concession from the
public offering price provided in such Load Funds' current Prospectus
and/or periodic instructions from us. With respect to the Funds, the
Shares of which are indicated in that Fund's Prospectus as being sold with
a contingent deferred sales charge or early withdrawal charge (the "CDSC
Funds"), you will be paid a commission or concession as disclosed in the
CDSC Fund's then current Prospectus and/or periodic instructions from us.
With respect to the Funds whose Shares are indicated on the attached
Schedule as being sold without a sales charge or a contingent deferred
sales charge, (i.e. the "No-Load Funds"), you will not be allowed to retain
any commission or concession. All commissions or concessions set forth in
any of the Load Funds' or CDSC Funds' Prospectus are subject to change
without notice by us and will comply with any changes in regulatory
requirements.
6. The tables of sales charges and discounts set forth in the current
Prospectus of each Fund are applicable to all purchases made at any one
time by any "purchaser", as defined in the current Prospectus. For this
purpose, a purchaser may aggregate concurrent purchases of securities of
any of the Funds.
7. Reduced sales charges may also be available as a result of quantity
discounts, rights of accumulation or letters of intent. Further
information as to such reduced sales charges, if any, is set forth in the
appropriate Fund Prospectus. In such case, your discount will be based
upon such reduced sales charge; however, in the case of a letter of intent
signed by your customer, an adjustment to a higher discount will thereafter
be made to reflect actual purchases by your customer if he should fail to
fulfill his letter of intent. You agree to advise us promptly as to the
amounts of any sales made by you to your customers qualifying for reduced
sales charges. If you fail to so advise us of any letter of intent signed
by your customer or of any right of accumulation available to him of which
he has made you aware, you will be liable to us for the return of any
discount plus interest thereon.
8. By accepting this Agreement you agree:
a. that you will purchase Shares only from us;
b. that you will purchase Shares from us only to cover purchase orders
already received from your customers; and
c. that you will not withhold placing with us orders received from your
customers so as to profit yourself as a result of such withholdings.
9. We will not accept from you a conditional order for Shares on any basis.
10. Payment for Shares ordered from us shall be in the form of a wire transfer
or a cashiers check mailed to us. Payment shall be made within three (3)
business days after our acceptance of the order placed on behalf of your
customer. Payment shall be equal to the public offering price less the
discount retained by you hereunder.
<PAGE>
Bank Acting as Agent for its Customers Page 3
- --------------------------------------------------------------------------------
11. If payment is not received within ten (10) business days of our acceptance
of the order, we reserve the right to cancel the sale or, at our option, to
sell Shares to the Fund at the then prevailing net asset value. In this
event you agree to be responsible for any loss resulting to the Fund from
the failure to make payment as aforesaid.
12. Shares sold hereunder shall be available in book-entry form on the books of
the Funds' Transfer Agent unless other instructions have been given.
13. No person is authorized to make any representations concerning Shares of
any Fund except those contained in the applicable current Prospectus and
printed information subsequently issued by the appropriate Fund or by us as
information supplemental to such Prospectus. You agree that you will not
make Shares available to your customers except under circumstances that
will result in compliance with the applicable Federal and State Securities
and Banking Laws and that you will not furnish to any person any
information contained in the then current Prospectus or cause any
advertisement to be published in any newspaper or posted in any public
place without our consent and the consent of the appropriate Fund.
14. Sales and exchanges of Shares may only be made in those states and
jurisdictions where Shares are registered or qualified for sale to the
public. We agree to advise you currently of the identity of those states
and jurisdictions in which the Shares are registered or qualified for
sales, and you agree to indemnify us and/or the Funds for any claim,
liability, expense or loss in any way arising out of a sale of Shares in
any state or jurisdiction not identified by us as a state or jurisdiction
in which such Shares are so registered or qualified. We agree to indemnify
you for any claim, liability, expense or loss in any way arising out of a
sale of shares in any state or jurisdiction identified by us as a state or
jurisdiction in which shares are so registered or qualified.
15. You shall be solely responsible for the accuracy, timeliness and
completeness of any orders transmitted by you on behalf of your customers
by wire or telephone for purchases, exchanges or redemptions, and shall
indemnify us against any claims by your customers as a result of your
failure to properly transmit their instructions.
16. All sales will be made subject to our receipt of Shares from the
appropriate Fund. We reserve the right, in our discretion, without notice,
to modify, suspend or withdraw entirely the offering of any Shares and,
upon notice, to change the sales charge or discount or to modify, cancel or
change the terms of this Agreement. You agree that any order to purchase
Shares of the Funds placed by you after any notice of amendment to this
Agreement has been sent to you shall constitute your agreement to any such
agreement.
17. The names of your customers shall remain your sole property and shall not
be used by us for any purpose except for servicing and information mailings
in the normal course of
<PAGE>
Bank Acting as Agent for its Customers Page 4
- --------------------------------------------------------------------------------
business to Fund Shareholders.
18. Your acceptance of this Agreement constitutes a representation that you are
a "Bank" as defined in Section 3 (a) (6) of the Securities Exchange Act of
1934, as amended, and are duly authorized to engage in the transactions to
be performed hereunder.
All communications to us should be sent to A I M Distributors, Inc., Eleven
Greenway Plaza, Suite 100, Houston, Texas 77046. Any notice to you shall be
duly given if mailed or telegraphed to you at the address specified by you
below or to such other address as you shall have designated in writing to
us. This Agreement shall be construed in accordance with the laws of the
State of Texas.
A I M DISTRIBUTORS, INC.
Date: By: X
------------------------- ---------------------------------
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By: X
------------------------- ---------------------------------
Signature
---------------------------------
Print Name Title
---------------------------------
Dealer's Name
---------------------------------
Address
---------------------------------
City State Zip
Please sign both copies and return one copy of each to:
<PAGE>
Bank Acting as Agent for its Customers Page 5
- --------------------------------------------------------------------------------
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
<PAGE>
[LOGO]
SHAREHOLDER SERVICE AGREEMENT
FOR SALE OF SHARES
OF THE AIM MUTUAL FUNDS
This Shareholder Service Agreement (the "Agreement") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940, by each of the
AIM-managed mutual funds (or designated classes of such funds) listed in
Schedule A, which may be amended from time to time by AIM Distributors, Inc.
("Distributors") to this Agreement (the "Funds"), under a Distribution Plan (the
"Plan") adopted pursuant to said Rule. This Agreement, being made between
Distributors, solely as agent for such funds (the "Funds") and the undersigned
authorized dealer, defines the services to be provided by the authorized dealer
for which it is to receive payments pursuant to the Plan adopted by each of the
Funds. The Plan and the Agreement have been approved by a majority of the
directors of each of the Funds, including a majority of the directors who are
not interested persons of such Funds, and who have no direct or indirect
financial interest in the operation of the Plan or related agreements (the
"Dis-interested Directors"), by votes cast in person at a meeting called for the
purpose of voting on the Plan. Such approval included a determination that in
the exercise of their reasonable business judgement and in light of their
fiduciary duties, there is a reasonable likelihood that the Plan will benefit
such Fund and its shareholders.
1. To the extent that you provide distribution-related and continuing personal
shareholder services to customers who may, from time to time, directly or
beneficially own shares of the Funds, including but not limited to,
distributing sales literature, answering routine customer inquiries
regarding the Funds, assisting customers in changing dividend options,
account designations and addresses, and in enrolling into any of several
special investment plans offered in connection with the purchase of the
Funds' shares, assisting in the establishment and maintenance of customer
accounts and records and in the processing of purchase and redemption
transactions, investing dividends and capital gains distributions
automatically in shares and providing such other services as the Funds or
the customer may reasonably request, we, solely as agent for the Funds,
shall pay you a fee periodically or arrange for such fee to be paid to you.
2. The fee paid with respect to each Fund will be calculated at the end of
each payment period (as indicated in Schedule A) for each business day of
the Fund during such payment period at the annual rate set forth in
Schedule A as applied to the average net asset value of the shares of such
Fund purchased or acquired through exchange on or after the Plan
Calculation Date shown for such Fund on Schedule A. Fees calculated in
this manner shall be paid to you only if your firm is the dealer of record
at the close of business on the last business day of the applicable payment
period, for the account in which such shares are held (the "Subject
Shares"). In cases where Distributors has advanced payment to you of the
first year's fee for shares sold at net asset value and subject to a
contingent
<PAGE>
deferred sales charge, no additional payments will be made to you during
the first year the Subject Shares are held.
3. The total of the fees calculated for all of the Funds listed on Schedule A
for any period with respect to which calculations are made shall be paid to
you within 45 days after the close of such period.
4. We reserve the right to withhold payment with respect to the Subject Shares
purchased by you and redeemed or repurchased by the Fund or by us as Agent
within seven (7) business days after the date of our confirmation of such
purchase. We reserve the right at any time to impose minimum fee payment
requirements before any periodic payments will be made to you hereunder.
5. This Agreement and Schedule A does not require any broker-dealer to provide
transfer agency and recordkeeping related services as nominee for its
customers.
6. You shall furnish us and the Funds with such information as shall
reasonably be requested either by the directors of the Funds or by us with
respect to the fees paid to you pursuant to this Agreement.
7. We shall furnish the directors of the Funds, for their review on a
quarterly basis, a written report of the amounts expended under the Plan by
us and the purposes for which such expenditures were made.
8. Neither you nor any of your employees or agents are authorized to make any
representation concerning shares of the Funds except those contained in the
then current Prospectus or Statement of Additional Information for the
Funds, and you shall have no authority to act as agent for the Funds or for
Distributors.
9. We may enter into other similar Shareholder Service Agreements with any
other person without your consent.
10. This Agreement may be amended at any time without your consent by
Distributors mailing a copy of an amendment to you at address set forth
below. Such amendment shall become effective on the date specified in such
amendment unless you elect to terminate this Agreement within thirty (30)
days of your receipt of such amendment.
11. This Agreement may be terminated with respect to any Fund at any time
without payment of any penalty by the vote of a majority of the directors
of such Fund who are Dis-interested Directors or by a vote of a majority of
the Fund's outstanding shares, on sixty (60) days' written notice. It will
be terminated by any act which terminates either the Selected Dealer
Agreement between your firm and us or the Fund's Distribution Plan, and in
any event, it shall terminate automatically in the event of its assignment
as that term is defined in the 1940 Act.
12. The provisions of the Distribution Agreement between any Fund and us,
insofar as they relate to the Plan, are incorporated herein by reference.
This Agreement
<PAGE>
shall become effective upon execution and delivery hereof and shall
continue in full force and effect as long as the continuance of the Plan
and this related Agreement are approved at least annually by a
vote of the directors, including a majority of the Dis-interested
Directors, cast in person at a meeting called for the purpose of voting
thereon. All communications to us should be sent to the address of
Distributors as shown at the bottom of this Agreement. Any notice to you
shall be duly given if mailed or telegraphed to you at the address
specified by you below.
13. You represent that you provide to your customers who own shares of the
Funds personal services as defined from time to time in applicable
regulations of the National Association of Securities Dealers, Inc., and
that you will continue to accept payments under this Agreement only so long
as you provide such services.
14. This Agreement shall be construed in accordance with the laws of the State
of Texas.
A I M DISTRIBUTORS, INC.
Date: By:
----------------------- ------------------------------------------
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By:
----------------------- ------------------------------------------
Signature
------------------------------------------
Print Name Title
------------------------------------------
Dealer's Name
------------------------------------------
Address
------------------------------------------
City State Zip
------------------------------------------
Telephone
Please sign both copies and return one copy of each to:
<PAGE>
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
<PAGE>
SCHEDULE "A" TO
SHAREHOLDER SERVICE AGREEMENT
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation
Date
- --------------------------------------------------------------------------------
<S> <C> <C>
AIM America Value Fund A Shares 0.25 May 29, 1998
AIM America Value Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Dollar Fund A Shares 0.25 May 29, 1998
AIM Dollar Fund B Shares 0.25 May 29, 1998
AIM Emerging Markets Fund A Shares 0.40** May 29, 1998
AIM Emerging Markets Fund B Shares 0.25 May 29, 1998
AIM Europe Growth Fund A Shares 0.25 May 29, 1998
AIM Europe Growth Fund B Shares 0.25 May 29, 1998
AIM Global Consumer Products and
Services Fund A Shares 0.40** May 29, 1998
AIM Global Consumer Products and
Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Government Income Fund A Shares 0.40** May 29, 1998
AIM Global Government Income Fund B Shares 0.25 May 29, 1998
AIM Global Growth and Income Fund A Shares 0.25 May 29, 1998
AIM Global Growth and Income Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global High Income Fund A Shares 0.25 May 29, 1998
AIM Global High Income Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Resources Fund A Shares 0.40** May 29, 1998
AIM Global Resources Fund B Shares 0.25 May 29, 1998
AIM Global Telecommunications Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications Fund B Shares 0.25 May 29, 1998
AIM Growth & Income Fund A Shares 0.25 May 29, 1998
AIM Growth & Income Fund B Shares 0.25 May 29, 1998
AIM International Growth Fund A Shares 0.25 May 29, 1998
AIM International Growth Fund B Shares 0.25 May 29, 1998
AIM Japan Growth Fund A Shares 0.25 May 29, 1998
AIM Japan Growth Fund B Shares 0.25 May 29, 1998
AIM Latin American Growth Fund A Shares 0.40** May 29, 1998
AIM Latin American Growth Fund B Shares 0.25 May 29, 1998
AIM Mid Cap Growth Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Growth Fund B Shares 0.25 May 29, 1998
AIM New Dimension Fund A Shares 0.40** May 29, 1998
AIM New Dimension Fund B Shares 0.25 May 29, 1998
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
AIM New Dimension Fund C Shares 1.00** May 29, 1998
<CAPTION>
Fund Fee Rate* Plan Calculation
Date
- --------------------------------------------------------------------------------
<S> <C> <C>
AIM New Pacific Growth Fund A Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Small Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29, 1998
AIM Worldwide Growth Fund A Shares 0.25 May 29, 1998
AIM Worldwide Growth Fund B Shares 0.25 May 29, 1998
</TABLE>
*Frequency of Payments:
EFFECTIVE UNTIL JUNE 30, 1998: Class A and B share payments commence
immediately and are paid quarterly. Class C share payments commence after an
initial twelve month holding period and are paid quarterly.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
EFFECTIVE JULY 1, 1998: B share payments, like C share payments, will begin
after an initial 12 month holding period and are paid quarterly. Where the
broker dealer or financial institution waives the 1% up-front commission on
Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or more,
at no load, in cases where A I M Distributors, Inc. has advanced the service fee
to the dealer, bank or other service provider.
<PAGE>
[LOGO]
BANK SHAREHOLDER
SERVICE AGREEMENT
We desire to enter into an Agreement with A I M Distributors, Inc. (the
"Company") acting as agent for the "AIM Funds", for servicing of our agency
clients who are shareholders of, and the administration of such shareholder
accounts in the shares of the AIM Funds (hereinafter referred to as the
"Shares"). Subject to the Company's acceptance of this Agreement, the terms and
conditions of this Agreement shall be as follows:
1. We shall provide continuing personal shareholder and administration
services for holders of the Shares who are also our clients. Such services
to our clients may include, without limitation, some or all of the
following: answering shareholder inquires regarding the Shares and the AIM
Funds; performing subaccounting; establishing and maintaining shareholder
accounts and records; processing and bunching customer purchase and
redemption transactions; providing periodic statements showing a
shareholder's account balance and the integration of such statements with
those of other transactions and balances in the shareholder's other
accounts serviced by us; forwarding applicable AIM Funds prospectuses,
proxy statements, reports and notices to our clients who are holders of
Shares; and such other administrative services as you reasonably may
request, to the extent we are permitted by applicable statute, rule or
regulations to provide such services. We represent that we shall accept
fees hereunder only so long as we continue to provide personal shareholder
services to our clients.
2. Shares purchased by us as agents for our clients will be registered (choose
one) (in our name or in the name of our nominee) (in the names of our
clients). The client will be the beneficial owner of the Shares purchased
and held by us in accordance with the client's instructions and the client
may exercise all applicable rights of a holder of such Shares. We agree to
transmit to the AIM Funds' transfer agent in a timely manner, all purchase
orders and redemption requests of our clients and to forward to each client
any proxy statements, periodic shareholder reports and other communications
received form the Company by us on behalf of our clients. The Company
agrees to pay all out-of-pocket expenses actually incurred by us in
connection with the transfer by us of such proxy statements and reports to
our clients as required by applicable law or regulation. We agree to
transfer record ownership of a client's Shares to the client promptly upon
the request of a client. In addition, record ownership will be promptly
transferred to the client in the event that the person or entity ceases to
be our client.
3. Within three (3) business days of placing a purchase order we agree to send
(i) a cashiers check to the Company, or (ii) a wire transfer to the AIM
Funds' transfer agent, in an amount equal to the amount of all purchase
orders placed by us on behalf of our
<PAGE>
clients and accepted by the Company.
4. We agree to make available to the Company, upon the Company's request, such
information relating to our clients who are beneficial owners of Shares and
their transactions in such Shares as may be required by applicable laws and
regulations or as may be reasonably requested by the Company. The names of
our customers shall remain our sole property and shall not be used by the
Company for any other purpose except as needed for servicing and
information mailings in the normal course of business to holders of the
Shares.
5. We shall provide such facilities and personnel (which may be all or any
part of the facilities currently used in our business, or all or any
personnel employed by us) as may be necessary or beneficial in carrying out
the purposes of this Agreement.
6. Except as may be provided in a separate written agreement between the
Company and us, neither we nor any of our employees or agents are
authorized to assist in distribution of any of the AIM Funds' shares except
those contained in the then current Prospectus applicable to the Shares;
and we shall have no authority to act as agent for the Company or the AIM
Funds. Neither the AIM Funds, A I M Advisors, Inc. nor A I M Distributors,
Inc. will be a party, nor will they be represented as a party, to any
agreement that we may enter into with our clients.
7. In consideration of the services and facilities described herein, we shall
receive from the Company on behalf of the AIM Funds an annual service fee,
payable at such intervals as may be set forth in Schedule A hereto, of a
percentage of the aggregate average net asset value of the Shares owned
beneficially by our clients during each payment period, as set forth in
Schedule A hereto, which may be amended from time to time by the Company.
We understand that this Agreement and the payment of such service fees has
been authorized and approved by the Boards of Directors/Trustees of the AIM
Funds, and is subject to limitations imposed by the National Association of
Securities Dealers, Inc. In cases where the Company has advanced payments
to us of the first year's fee for shares sold with a contingent deferred
sales charge, no payments will be made to us during the first year the
subject Shares are held.
8. The AIM Funds reserve the right, at their discretion and without notice, to
suspend the sale of any Shares or withdraw the sale of Shares.
9. We understand that the Company reserves the right to amend this Agreement
or Schedule A hereto at any time without our consent by mailing a copy of
an amendment to us at the address set forth below. Such amendment shall
become effective on the date specified in such amendment unless we elect to
terminate this Agreement within thirty (30) days of our receipt of such
amendment.
10. This Agreement may be terminated at any time by the Company on not less
than 15 days' written notice to us at our principal place of business. We,
on 15 days' written
<PAGE>
Bank Shareholder Service Agreement Page 3
notice addressed to the Company at its principal place of business, may
terminate this Agreement, said termination to become effective on the date
of mailing notice to Company of such termination. The Company's failure to
terminate for any cause shall not constitute a waiver of the Company's
right to terminate at a later date for any such cause. This Agreement
shall terminate automatically in the event of its assignment, the term
"assignment" for this purpose having the meaning defined in Section 2(a)(4)
of the Investment Company Act of 1940, as amended.
11. All communications to the Company shall be sent to it at Eleven Greenway
Plaza, Suite 100, Houston, Texas, 77046-1173. Any notice to us shall be
duly given if mailed or telegraphed to us at this address shown on this
Agreement.
12. This Agreement shall become effective as of the date when it is executed
and dated below by the Company. This Agreement and all rights and
obligations of the parties hereunder shall be governed by and construed
under the laws of the State of Texas.
A I M DISTRIBUTORS, INC.
Date: By: X
------------------- ----------------------------------------------
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By: X
------------------- ----------------------------------------------
Signature
----------------------------------------
Print Name Title
----------------------------------------
Dealer's Name
----------------------------------------
Address
----------------------------------------
City State Zip
Please sign both copies and return one copy of each to:
<PAGE>
Bank Shareholder Service Agreement Page 4
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
SCHEDULE "A" TO BANK
SHAREHOLDER SERVICE AGREEMENT
Fund Fee Rate* Plan Calculation
Date
- --------------------------------------------------------------------------------
AIM America Value Fund A Shares 0.25 May 29, 1998
AIM America Value Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Dollar Fund A Shares 0.25 May 29, 1998
AIM Dollar Fund B Shares 0.25 May 29, 1998
AIM Emerging Markets Fund A Shares 0.40** May 29, 1998
AIM Emerging Markets Fund B Shares 0.25 May 29, 1998
AIM Europe Growth Fund A Shares 0.25 May 29, 1998
AIM Europe Growth Fund B Shares 0.25 May 29, 1998
AIM Global Consumer Products and
Services Fund A Shares 0.40** May 29, 1998
AIM Global Consumer Products and
Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Government Income Fund A Shares 0.40** May 29, 1998
AIM Global Government Income Fund B Shares 0.25 May 29, 1998
AIM Global Growth and Income Fund A Shares 0.25 May 29, 1998
AIM Global Growth and Income Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global High Income Fund A Shares 0.25 May 29, 1998
AIM Global High Income Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Resources Fund A Shares 0.40** May 29, 1998
AIM Global Resources Fund B Shares 0.25 May 29, 1998
<PAGE>
Bank Shareholder Service Agreement Page 5
AIM Global Telecommunications Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications Fund B Shares 0.25 May 29, 1998
AIM Growth & Income Fund A Shares 0.25 May 29, 1998
AIM Growth & Income Fund B Shares 0.25 May 29, 1998
AIM International Growth Fund A Shares 0.25 May 29, 1998
AIM International Growth Fund B Shares 0.25 May 29, 1998
AIM Japan Growth Fund A Shares 0.25 May 29, 1998
AIM Japan Growth Fund B Shares 0.25 May 29, 1998
AIM Latin American Growth Fund A Shares 0.40** May 29, 1998
AIM Latin American Growth Fund B Shares 0.25 May 29, 1998
Fund Fee Rate* Plan Calculation
Date
- --------------------------------------------------------------------------------
AIM Mid Cap Growth Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Growth Fund B Shares 0.25 May 29, 1998
AIM New Dimension Fund A Shares 0.40** May 29, 1998
AIM New Dimension Fund B Shares 0.25 May 29, 1998
AIM New Dimension Fund C Shares 1.00** May 29, 1998
AIM New Pacific Growth Fund A Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Small Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29, 1998
AIM Worldwide Growth Fund A Shares 0.25 May 29, 1998
AIM Worldwide Growth Fund B Shares 0.25 May 29, 1998
*Frequency of Payments:
EFFECTIVE UNTIL JUNE 30, 1998: Class A and B share payments commence
immediately and are paid quarterly. Class C share payments commence after an
initial twelve month holding period and are paid quarterly.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
EFFECTIVE JULY 1, 1998: B share payments, like C share payments, will begin
after an initial 12 month holding period and are paid quarterly. Where the
broker dealer or financial institution waives the 1% up-front commission on
Class C shares, payments commence immediately.
<PAGE>
Bank Shareholder Service Agreement Page 6
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or more,
at no load, in cases where A I M Distributors, Inc. has advanced the service fee
to the dealer, bank or other service provider.
<PAGE>
--------------------------
KIRKPATRICK & LOCKHART LLP
--------------------------
1800 MASSACHUSETIS AVENUE, N.W.
2ND FLOOR
WASHINGTON, D.C 20036-1800
TELEPHONE (202)778-9000
FACSIMILE (202) 778-9100
THEODORE L. PRESS
(202)778-9025
[email protected]
May 29, 1998
AIM Series Trust
50 California Street, 27th Floor
San Francisco, California 94111
Ladies and Gentlemen:
You have requested our opinion, as counsel to AIM Series Trust ("Trust"),
as to certain matters regarding the issuance of Shares of Trust. (As used in
this letter, the term "Shares" means the Class A, Class B, Class C, and Advisor
Class shares of beneficial interest in AIM New Dimension Fund, the only series
of Trust .)
As such counsel, we have examined certified or other copies, believed by us
to be genuine, of Trust's Agreement and Declaration of Trust dated as of May 7,
1998 ("Agreement"), and Bylaws and such other documents relating to its
organization and operation as we have deemed relevant to our opinion, as set
forth herein. Our opinion is limited to the laws and facts in existence on the
date hereof, and it is further limited to the laws (other than the conflict of
law rules) of the State of Delaware that in our experience are normally
applicable to the issuance of shares of beneficial interest by business trusts
and to the Securities Act of 1933 ("1933 Act"), the Investment Company Act of
1940 ("1940 Act") and the regulations of the Securities and Exchange Commission
("SEC") thereunder. With respect to matters governed by the laws of the State
of Delaware (excluding the securities laws thereof), we have relied solely on
the opinion of Potter Anderson & Corroon, LLP, Delaware counsel to the Trust, an
executed copy of which is appended hereto as Exhibit A.
Based on the foregoing, we are of the opinion that Trust has been duly
organized as a business trust under the laws of the State of Delaware and is
validly existing thereunder; that the issuance of the Shares has been duly
authorized by Trust; and that, when sold in accordance with the terms
contemplated by Trust's registration statement on Form N-1A (File No. 333-30551)
("Registration Statement"), including receipt by Trust of full payment for the
Shares and compliance with the 1933 Act and the 1940 Act, the Shares will have
been legally issued, fully paid, and non-assessable.
We note, however, that Trust is an entity of the type commonly known as
a "Delaware business trust." The Delaware Business Trust Act, 12 Del. C.,
Section 3801 et seq. ("Delaware Act"), provides that shareholders of a
Delaware business trust are entitled to the same limitation of personal
liability extended to stockholders of a Delaware corporation. Thus, under
Delaware law, shareholders will not be personally liable for the obligations
of Trust. This limitation of
<PAGE>
- --------------------------
KIRKPATRICK & LOCKHART LLP
- --------------------------
AIM Series Trust
May 29, 1998
Page 2
liability may not be absolute, however, as it is possible that a non-Delaware
court would not uphold this provision of the Delaware Act.
Consistent with the Delaware Act, the Agreement includes an express
disclaimer of shareholder liability for the debts, liabilities, obligations, and
expenses incurred by, contracted for, or otherwise existing with respect to
Trust or any Portfolio (as defined in the Agreement) (or class) thereof. The
Agreement also requires that every note, bond, contract, or other undertaking
issued by or on behalf of Trust or its trustees relating to Trust or to any
Portfolio include a recitation limiting the obligation represented thereby to
Trust and its assets or to one or more Portfolios and the assets belonging
thereto (but provides that the omission of such a recitation shall not operate
to bind any shareholder or trustee of Trust). Furthermore, the Agreement states
that the debts, liabilities, obligations, and expenses incurred by, contracted
for, or otherwise existing with respect to a particular Portfolio shall be
enforceable against the assets of such Portfolio only, and not against the
assets of Trust generally or the assets belonging to any other Portfolio.
Finally, the Agreement further provides (1) for indemnification from the assets
belonging to the applicable Portfolio (or allocable to the applicable class) for
all loss and expense of any shareholder held personally liable for the
obligations of Trust or any Portfolio (or class) by virtue of ownership of
Shares of Trust or such Portfolio (or class), and (2) for Trust, on behalf of
the affected Portfolio (or class), to assume the defense of any claim against
the shareholder for any act or obligation of that Portfolio (or class). Thus,
the risk of a shareholder's incurring financial loss because of shareholder
liability is limited to circumstances in which (a) a court refused to apply
Delaware law or otherwise failed to give full effect to the Agreement or
contractual provisions limiting shareholder liability and (b) Trust was unable
to meet its obligations.
We hereby consent to this opinion accompanying Post-Effective Amendment No.
4 to the Registration Statement when it is filed with the SEC and to the
reference to our firm in the prospectus that is being filed as part of such
amendment.
Very truly yours,
KIRKPATRICK & LOCKHART LLP
By: /s/ Theodore L. Press
-------------------------
<PAGE>
EXHIBIT A
POTTER ANDERSON & CORROON LLP
CHARLES S. CROMPTON, JR. JOHN P. SINCLAIR
ROBERT K. PAYSON HERCULES PLAZA BLAINE T. PHILLIPS
LEONARD S. TOGMAN HUGH CORROON
RICHARD E. POOLE P.O. BOX 951 JOSEPH H. GEOGHEGAN
MICHAEL D. GOLDMAN RICHARD L. McMAHON
JAMES F. BURNETT WILMINGTON, DELAWARE 19899 OF COUNSEL
DANIEL F. WOLCOTT, JR. ROBERT P. BARNETT
CHARLES S. McDOWELL (302) 984-6000 MICHAEL B. KEEHAN
DAVID B. BROWN W. LAIRD STABLER, JR.
SOMERS S. PRICE, JR. FACSIMILE (302) 658-1192 COUNSEL
DONALD J. WOLFE, JR.
GREGORY A. INSKIP HOME PAGE: ATTYS.PACDELAWARE.COM FREDERICK H. ALTERGOTT
DAVID J. BALDWIN PETER L. TRACEY
JOHN E. JAMES JENNIFER GIMLER BRADY
W. HARDING DRANE, JR. E-MAIL: @pacdelaware.com SCOTT E. WAXMAN
MARY E. COPPER DIRECT DIAL: (302) JOANNE CEBALLOS
W. LAIRD STABLER, III WENDY K. VOSS
RICHARD L. HORWITZ KEVIN R. SHANNON
WILLIAM J. MARSDEN, JR. TODD L. GOODMAN
MICHAEL B. TUMAS MICHAEL A. PITTENGER
KATHLEEN FUREY McDONOUGH COLLEEN E. HICKS
LAURIE SELBER SILVERSTEIN MICHAEL S. McGINNISS
PETER J. WALSH, JR. May 29, 1998 MATTHEW E. FISCHER
STEPHEN C. NORMAN WILLIAM A. HAZELTINE
ARTHUR L. DENT EILEEN M. FILLIBEN
HAROLD I. SALMONS, III EMILIE R. NINAN
WILLIAM R. DENNY BARRY J. BENZING*
PHILIP A. ROVNER DEBORAH A. CUOCO
ANDREW T. O'NEILL
GREGORY M. JOHNSON
ROGER D. ANDERSON
STEVEN L. CAPONI
JOHN J. QUINN, III
_________
*admitted in NY and PA only
[DRAFT FOR DISCUSSION PURPOSES ONLY]
To Each of the Persons Listed
on Schedule I Attached Hereto
Re: AIM Series Trust
----------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for AIM Series Trust, a
Delaware business trust (the "Trust") in connection with the proposed
issuance of shares (collectively the "Shares") of Class A, Class B, Class C,
and Advisor Class (collectively, the "Classes") of AIM New Dimension Fund
(the "Portfolio") as designated on Schedule A to that certain Agreement and
Declaration of Trust dated as of May 7, 1998, entered into among William J.
Guilfoyle, C. Derek Anderson, Frank S. Bayley, Arthur C. Patterson, and Ruth
H. Quigley, as Trustees, and the Shareholders of the Trust (the
"Declaration"). Initially capitalized terms used herein and not otherwise
defined are used herein as defined in the Declaration.
For purposes of giving the opinions hereinafter set forth, we have
examined only the following documents and have conducted no independent
factual investigation of our own:
1. The Certificate of Trust for the Trust, dated as of May 7,
1998, as filed in the Office of the Secretary of State of the State of
Delaware (the "Secretary of State") on May 7, 1998;
<PAGE>
To each of the persons on
Schedule I attached hereto
May 29, 1998
Page 2
2. The Declaration;
3. The By-laws of the Trust;
4. Resolutions of the Trustees (the "Reorganization Resolutions")
approving that certain plan of reorganization (the "Plan of Reorganization")
by and between the Trust and G.T. Global Growth Series (the "Old Trust");
5. The Plan of Reorganization;
6. Resolutions of the Trustees (the "18f-3 Resolutions" and
together with the Reorganization Resolutions, the "Resolutions") adopting
that certain plan pursuant to Rule 18f-3 of the Investment Company Act of
1940 (the "18f-3 Plan");
7. A Certificate of Good Standing for the Trust, dated May 29,
1998 obtained from the Secretary of State; and
8. The registration statement on Form N-1A filed with the
Securities and Exchange Commission on May 29, 1998, pursuant to the
Securities Act of 1933, as amended, covering the Shares (the "Registration
Statement").
As to certain facts material to the opinions expressed herein, we
have relied upon the representations and warranties contained in the
documents examined by us.
Based upon the foregoing, and upon an examination of such questions
of law of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act.
2. The Portfolio has been duly created and is validly existing as
a series under Section 3804 of the Delaware Act.
3. The Declaration constitutes the legal, valid and binding
obligation of the Trustees, enforceable against the Trustees, in accordance
with its terms.
<PAGE>
To each of the persons on
Schedule I attached hereto
May 29, 1998
Page 3
4. Subject to the other qualifications set forth herein
(including, without limitation, paragraph 5 below), the Shares have been duly
authorized and when (a) the actions referred to in the Plan of Reorganization
shall have occurred, and (b) the Shares shall have been otherwise issued and
sold in accordance with the Declaration, the Resolutions, the Plan of
Reorganization, the 18f-3 Plan, and the By-laws, such Shares will be validly
issued, fully paid, and non-assessable undivided beneficial interests in the
assets of the Portfolio.
5. When and if the actions referred to in paragraph 4 have
occurred, the holders of the Shares as beneficial owners of the Shares will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware, except that such holders of Shares
may be obligated to provide indemnity and/or security in connection with the
issuance of replacement certificates for lost or destroyed certificates, if
any, representing such Shares, if such holders request certificates in
accordance with the By-laws and such certificates are lost.
In addition to the assumptions and qualifications set forth above,
all of the foregoing opinions contained herein are subject to the following
assumptions, qualifications, limitations and exceptions:
a. The foregoing opinions are limited to the laws of the
State of Delaware presently in effect, excluding the securities laws thereof.
We have not considered and express no opinion on the laws of any other
jurisdiction, including, without limitation, federal laws and rules and
regulations relating thereto.
b. We have assumed the due execution and delivery by each
party listed as a party to the Plan of Reorganization. We have further
assumed the due authorization by the Old Trust of the Plan of Reorganization.
We have assumed further that the Old Trust has the full trust power,
authority, and legal right to execute, deliver and perform the Plan of
Reorganization. We also have assumed that the Old Trust is a trust validly
existing and in good standing under the laws of its jurisdiction of
organization. We have also assumed that the Plan of Reorganization does not
result in the breach of the terms of, and does not contravene the Old Trust's
constituent documents, any contractual restriction binding on
<PAGE>
To each of the persons on
Schedule I attached hereto
May 29, 1998
Page 4
any party to the Plan of Reorganization, or any law, rule or regulation
applicable to such parties (exclusive of the Trust, but only to the extent of
any Delaware law, rule or regulation). In addition, we have assumed the
legal capacity of any natural persons who are parties to any of the documents
examined by us.
c. The foregoing opinion regarding the enforceability of the
Declaration is subject to (i) applicable bankruptcy, insolvency, moratorium,
fraudulent conveyance, fraudulent transfer and similar laws relating to or
affecting creditors rights generally including, without limitation, the
Delaware Uniform Fraudulent Conveyance Act, the provisions of the United
States Bankruptcy Code and the Delaware insolvency statutes, (ii) principles
of equity including, without limitation, concepts of materiality, good faith,
fair dealing, conscionability and reasonableness (regardless of whether such
enforceability is considered in a proceeding in equity or at law), (iii)
applicable law relating to fiduciary duties, and (iv) public policy
limitations with respect to exculpation, contribution and indemnity
provisions.
d. We have assumed that all signatures on documents examined by
us are genuine, that all documents submitted to us as originals are authentic
and that all documents submitted to us as copies conform with the originals.
e. We have assumed that the Declaration, the By-laws, the Plan
of Reorganization, the Resolutions and the 18f-3 Plan collectively,
constitute the entire agreement with respect to the subject matter thereof,
including (i) with respect to the creation, dissolution and winding up of the
Trust and the Portfolio, (ii) the terms applicable to the Shares, and (iii)
the power and authority of the Trustees.
f. We have assumed that to the extent any additional rights
and/or preferences are stated in the 18f-3 Plan, such additional rights
and/or preferences (x) are enforceable in accordance with their terms, and
(y) do not conflict with the Certificate of Trust, the Declaration, the
By-laws, the Plan of Reorganization, or any statute, rule or regulation
applicable to the Trust or the Portfolio.
g. We have assumed that the Plan of Reorganization is the legal,
valid and binding obligation of
<PAGE>
To each of the persons on
Schedule I attached hereto
May 29, 1998
Page 5
the parties thereto, enforceable against such parties in accordance with its
terms.
h. We have assumed that no event set forth in Section 9.3(a) of the
Declaration has occurred with respect to the Trust or the Portfolio.
i. Notwithstanding any provision in the Declaration to the
contrary, we note that upon the occurrence of an event set forth in Section
9.3(a) thereof, with respect to the Trust or the Portfolio as the case may
be, the Trust or such Portfolio, as applicable, cannot make any payments or
distributions to the Shareholders thereof until their respective creditors'
claims are either paid in full or reasonable provision for payment thereof
has been made.
j. With respect to the enforceability of any provision of the
Declaration wherein the parties provide for the appointment of a liquidator,
we note that upon the application of any beneficial owner, the Delaware Court
of Chancery has the power, upon cause shown, to wind up the affairs of a
Delaware business trust or Portfolio thereof and in connection therewith to
appoint a liquidating trustee other than the one agreed to by the beneficial
owners thereof.
k. We have assumed that none of the By-laws, the Resolutions, the
Plan of Reorganization, or the 18f-3 Plan has been amended, modified, or
revoked in any manner from the date of its adoption, and that each of the
By-laws, the Resolutions, the Plan of Reorganization, and the 18f-3 Plan
remains in full force and effect on the date hereof.
l. We have assumed that the Trust maintains separate and distinct
records for the Portfolio and that the Trust and the Trustees hold and
account for the assets belonging to each such Portfolio separately from the
other assets of any other Portfolio and the assets of the Trust generally, if
any.
m. We note that we do not assume responsibility for the contents
of the Registration Statement.
This opinion is rendered solely for your benefit in connection with
the matters set forth herein and, without our prior written consent, may not
be furnished (except that it may be furnished to any federal, state or local
regulatory agencies
<PAGE>
To each of the persons on
Schedule I attached hereto
May 29, 1998
Page 6
or regulators having appropriate jurisdiction and entitled to such
disclosure) or quoted to, or relied upon by, any other person or entity for
any purpose. Kirkpatrick & Lockhart LLP may rely on this opinion with
respect to the matters set forth herein in connection with its opinion being
delivered on even date herewith.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In giving
the foregoing consents, we do not thereby admit that we come within the
category of Persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
PA&C-305410
<PAGE>
Schedule I
AIM Series Trust
50 California St., 27th Floor
San Francisco, CA 94111
GT Global Series Trust
50 California St., 27th Floor
San Francisco, CA 94111
<PAGE>
[LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of Aim Series Trust (formerly, GT Global Series Trust):
We hereby consent to the inclusion of our report dated February 17, 1998 on
our audit of the financial statements and financial highlights of AIM New
Dimension Fund (formerly, GT Global New Dimension Fund) as of December 31, 1997
in the Statement of Additional Information with respect to the Post-Effective
Amendment to the Registration Statement on Form N-1A under the Securities Act of
1933, as amended, of AIM Series Trust. We further consent to the reference to
our Firm under the captions "Financial Highlights" and "Other Information" in
the Prospectus and "Independent Accountants" in the Statement of Additional
Information.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Boston, Massachusetts
June 1, 1998
<PAGE>
EXHIBIT 14(a)
[AIM LOGO APPEARS HERE]
IRA APPLICATION
To open your AIM IRA account.
Complete Sections 1-11.
Return completed application and check to: A I M Fund Services, Inc., P.O. Box
4739, Houston, TX 77210-4739. Phone: 800-959-4246.
Make check payable to INVESCO Trust Company.
Please Note: To establish an IRA for your spouse, please copy and submit a
separate application.
Minors cannot open an AIM IRA account.
- --------------------------------------------------------------------------------
1. INVESTOR INFORMATION (Please print or type.)
Name
-----------------------------------------------------------------------
First Name Middle Last Name
Address
--------------------------------------------------------------------
Street
----------------------------------------------------------------------------
City State Zip Code
Social Security Number Birth Date / /
---------------------- -------------------
(Required to Open Account) Month Day Year
Home Telephone ( ) Work Telephone ( )
--- ----------------- --- -----------------
- --------------------------------------------------------------------------------
2. DEALER INFORMATION (To be completed by securities dealer.)
Name of Broker/Dealer Firm
-------------------------------------------------
Main Office Address
--------------------------------------------------------
Representative Name and Number
---------------------------------------------
Authorized Signature of Dealer
---------------------------------------------
Branch Address
-------------------------------------------------------------
Branch Telephone
-----------------------------------------------------------
[ ] Investor is authorized for NAV purchase. (If authorized for NAV
purchase, other than the Broker, please attach NAV Certification
Form.)
- --------------------------------------------------------------------------------
3. ACCOUNT TYPE (Choose one only.)
[ ] IRA [ ] Rollover IRA [ ] SEP IRA* [ ] SARSEP IRA* (No new
SARSEP plans after
12/31/96)
*Employer (for SEP & SARSEP plans only)
-------------------------------------
- --------------------------------------------------------------------------------
4. CONTRIBUTION (Indicate type of contribution.)
[ ] REGULAR - Contribution for tax year 19___.
[ ] ROLLOVER - Represents a rollover from an employer's pension, profit
sharing or 401(k) plan, another IRA or a 403(b) custodial account or
annuity. Please complete a Direct Rollover Form, unless coming from
another IRA.
[ ] TRANSFER - Transfer from another IRA account. Please complete an IRA
Asset-Transfer Form.
[ ] SEP - Employer sponsored. Complete separate application for each
employee.
[ ] SARSEP - Employee salary-reduction SEP. Complete separate application
for each employee. (No new SARSEP plans after 12/31/96.)
13
<PAGE>
- --------------------------------------------------------------------------------
5. FUND INVESTMENT
Indicate Fund(s) and contribution amount(s).
MAKE CHECK PAYABLE TO INVESCO TRUST COMPANY. Minimum purchase to open an
IRA is $250.
<TABLE>
<CAPTION>
Fund $ or % of Assets Class of Shares (Check one)
<S> <C> <C>
[ ]AIM Advisor Flex Fund $ [ ]Class A [ ]Class C
------------------------
[ ]AIM Advisor International Value Fund $ [ ]Class A [ ]Class C
------------------------
[ ]AIM Advisor Large Cap Value Fund $ [ ]Class A [ ]Class C
------------------------
[ ]AIM Advisor MultiFlex Fund $ [ ]Class A [ ]Class C
------------------------
[ ]AIM Advisor Real Estate Fund $ [ ]Class A [ ]Class C
------------------------
[ ]AIM Balanced Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Blue Chip Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Capital Development Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Cash Reserve Shares $ [ ]Class C
------------------------
[ ]AIM Charter Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Constellation Fund $ [ ]Class A [ ]Class C
------------------------
[ ]AIM Global Aggressive Growth Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Global Growth Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Global Income Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Global Utilities Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Intermediate Government Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Growth Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM High Yield Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Income Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM International Equity Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Limited Maturity Treasury Shares $ [ ]Class A
------------------------
[ ]AIM Money Market Fund $ [ ]Class A [ ]Class B
------------------------
[ ]AIM Value Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
[ ]AIM Weingarten Fund $ [ ]Class A [ ]Class B [ ]Class C
------------------------
Total $
------------------------
</TABLE>
If no class of shares is selected, Class A shares will be purchased, except
in the case of AIM Money Market Fund, AIM Cash Reserve Shares will be
purchased. If you are funding your retirement account through a transfer,
please indicate the contribution amounts both in this section and in Section
3 of the Asset-Transfer Form.
- --------------------------------------------------------------------------------
6. ACCOUNT OPTIONS
Please indicate options you desire:
TELEPHONE EXCHANGE PRIVILEGE
Unless indicated below, I authorize the Transfer Agent to accept
instructions from any person to exchange shares in my account(s) by
telephone in accordance with the procedures and conditions set forth in the
Fund's current prospectus.
[ ] I DO NOT want the Telephone Exchange Privilege.
DOLLAR-COST AVERAGING PLAN (Must be under the same registration and class of
shares.)
I have at least $5,000 in shares in my __________________________ Fund, for
which no certificates have been issued, and I would like to exchange:
$ into the Fund, Account #
---------------- ------------ -----------------
($50 minimum)
$ into the Fund, Account #
---------------- ------------ -----------------
($50 minimum)
$ into the Fund, Account #
---------------- ------------ -----------------
($50 minimum)
on a [ ] monthly [ ] quarterly basis starting in the month of_____________
on the [ ] 10th or [ ] 25th of the month.
14
<PAGE>
DIVIDENDS AND CAPITAL GAINS (For clients over 59 1/2)
All distributions are subject to income tax.
[ ] Reinvest dividends and capital gains (Automatic for clients under
59 1/2.)
[ ] Mail dividends and capital gains to home address
[ ] Mail dividends to my bank
Name of Bank
---------------------------------------------------------------
Address Account #
-------------------------------------- ---------------------
- --------------------------------------------------------------------------------
7. WITHHOLDING ELECTION
Distributions from your IRA will be subject to an automatic federal income
tax withholding of 10%, unless otherwise noted below:
[ ] I do not want any federal income tax withheld from my distribution.
[ ] Withhold federal income tax at a rate of _________% (NOTE: The
percentage indicated must be a whole percentage and higher than 10%).
- --------------------------------------------------------------------------------
8. REDUCED SALES CHARGE (optional)
RIGHT OF ACCUMULATION (This option is for Class A shares only.)
I apply for Right of Accumulation reduced sales charges based on the
following accounts in The AIM Family of Funds--Registered Trademark--:
Fund(s) Account No(s).
------------------------------ ------------------------
------------------------------ ------------------------
------------------------------ ------------------------
LETTER OF INTENT
I agree to the Letter of Intent provisions in the Application Instructions. I
plan to invest during a 13-month period a dollar amount of at least: [ ]$25,000
[ ]$50,000 [ ]$100,000 [ ]$250,000 [ ]$500,000 [ ]$1,000,000
- --------------------------------------------------------------------------------
9. BENEFICIARY INFORMATION
I hereby designate the following beneficiary(ies) to receive the balance in
my IRA custodial account upon my death. To be effective, the designation of
beneficiary and any subsequent change in designation of beneficiary must be
filed with the Custodian prior to my death. The balance of my account shall
be distributed in equal amounts to the beneficiary(ies) who survives me. If
no beneficiary is designated or no designated beneficiary or contingent
beneficiary survives me, the balance in my IRA will be distributed to the
legal representatives of my estate. This designation revokes any prior
designations. I retain the right to revoke this designation at any time. I
hereby certify that there is no legal impediment to the designation of this
beneficiary.
PRIMARY BENEFICIARY(IES)
Name % Relationship
------------------------------------- --------------------
Address
--------------------------------------------------------------------
Street City State Zip Code
Beneficiary's Social Security Number Birth Date / /
-------------- -- -- --
Month Day Year
Name % Relationship
------------------------------ ------ --------------------
Address
--------------------------------------------------------------------
Street City State Zip Code
Beneficiary's Social Security Number Birth Date / /
-------------- -- -- --
Month Day Year
15
<PAGE>
CONTINGENT BENEFICIARIES
In the event that I die and no primary beneficiary listed above is alive,
distribute all Fund accounts in my IRA to the following contingent
beneficiary(ies) who survives me, in equal amounts unless otherwise
indicated.
Name % Relationship
------------------------------ ------ --------------------
Address
--------------------------------------------------------------------
Street City State Zip Code
Beneficiary's Social Security Number Birth Date / /
-------------- -- -- ----
Month Day Year
Name % Relationship
------------------------------ ------ --------------------
Address
--------------------------------------------------------------------
Street City State Zip Code
Beneficiary's Social Security Number Birth Date / /
-------------- -- -- ----
Month Day Year
- --------------------------------------------------------------------------------
10. AUTHORIZATION AND SIGNATURE
I hereby establish the A I M Distributors, Inc. Individual Retirement
Account (IRA) appointing INVESCO Trust Company as Custodian. I have
received and read the current prospectus of the investment company(ies)
selected in this agreement and have read and understand the IRA custodial
agreement and disclosure statement and consent to the custodial account
fees as specified. I understand that a $10 annual AIM Fund IRA Maintenance
Fee will be deducted in early December from my AIM IRA.
WITHHOLDING INFORMATION (SUBSTITUTE FORM W-9)
Under the Interest and Dividend Tax Compliance Act of 1983, the Fund
is required to have the following certification: Under the penalties
of perjury I certify by signing this Application as provided below
that:
1. The number shown in Section 1 of this Application is my correct
Social Security (or Tax Identification) Number, and
2. I am not subject to backup withholding either because (a) I have
not been notified by the Internal Revenue Service (the "IRS") that I
am subject to backup withholding as a result of a failure to report
all interest or dividends or (b) the IRS has notified me that I am no
longer subject to backup withholding. (This paragraph (2) does not
apply to real estate transactions, mortgage interest paid, the
acquisition or abandonment of secured property, contributions to an
individual retirement arrangement and payments other than interest and
dividends.)
You must cross out paragraph (2) above if you have been notified by
the IRS that you are currently subject to backup withholding because
of underreporting interest or dividends on your tax return.
In addition, the Fund hereby incorporates by reference into this
section of the Application either the IRS instructions for Form W-9 or
the substance of those instructions whichever is attached to this
Application.
SIGNATURE PROVISIONS
I, the undersigned Depositor, have read and understand the foregoing
Application and the attached material included herein by reference. In
addition, I certify that the information which I have provided and the
information which is included within the Application and the attached
material included herein by reference is accurate including but not limited
to the representations contained in the Withholding Information section of
this Application above. (The Internal Revenue Service does not require your
consent to any provision of this document other than the certifications to
avoid backup withholding.)
Dated / /
--- --- ---
Signature of IRA Shareholder
-----------------------------------------------
16
<PAGE>
- --------------------------------------------------------------------------------
11. MAILING INSTRUCTIONS
Make check payable to INVESCO Trust Company.
Return Application to:
REGULAR MAIL OR OVERNIGHT DELIVERIES ONLY
AIM Fund Services, Inc. AIM Fund Services, Inc.
P.O. Box 4739 11 Greenway Plaza, Suite 763
Houston, TX 77210-4739 Houston, TX 77046
- --------------------------------------------------------------------------------
12. SERVICE ASSISTANCE
Our knowledgeable Client Service Representatives are available to assist you
between 7:30 a.m. and 6:00 p.m. Central time at 800-959-4246.
17 [AIM LOGO APPEARS HERE]
<PAGE>
INSTRUCTIONS FOR IRA ASSET-TRANSFER FORM
The IRA Asset-Transfer Form is used to transfer assets from an
existing IRA to an AIM Prototype IRA.
NOTE: It is not necessary to complete this form if the check
representing the transfer of assets has been attached to the
application.
1. Complete Sections 1 through 6 of the IRA Asset Transfer Form (on
pages 19 through 20 of this booklet).
2. Be sure that you have included your bank account or mutual fund
account number in Section 2 of the form, as well as the complete
mailing address for your existing custodian. You should contact
your existing custodian to verify that firm's proper mailing
address.
3. Be sure that your AIM account number is in Section 3 of the
form. If you do not have an AIM IRA, please complete the IRA
Application included on pages 13 through 16 of this booklet.
NOTE: If you currently hold AIM shares through a brokerage firm,
check with your investment representative to determine if you
should establish your IRA with the brokerage firm or directly
with AIM. If you decide to establish your IRA directly with AIM,
you must complete the AIM IRA Application.
4. Contact your existing custodian to determine whether a signature
guarantee is required in Section 5 of the IRA Asset Transfer
Form. Signature guarantees can be obtained at your bank or
brokerage firm.
5. You may wish to attach a current account statement for your
existing IRA to the IRA Asset Transfer Form.
6. Please mail any insurance or annuity policies and contracts
directly to the company which issued them. Do not attach them to
the IRA Application or IRA Asset Transfer Form.
7. Please mail the completed IRA Asset Transfer Form, along with
the completed IRA Application (if establishing a new AIM IRA)
to:
REGULAR MAIL OR OVERNIGHT DELIVERIES ONLY
AIM Fund Services, Inc. AIM Fund Services, Inc.
P.O. Box 4739 11 Greenway Plaza, Suite 763
Houston, TX 77210-4739 Houston, TX 77046
NOTE: If your existing account is a qualified plan, such as a
profit sharing, 401(k) or 403(b) plan, please complete the
Direct Rollover Form on page 23. Refer to the Instructions for
Direct Rollover Form to complete that form.
18
<PAGE>
[AIM LOGO APPEARS HERE]
IRA ASSET-TRANSFER FORM
Use this form only when transferring assets from an existing IRA to an AIM IRA.
Note: Use this form ONLY if you want AIM to request the money directly from
another custodian. Complete Sections 1-5.
If you do not already have an AIM IRA, you must also submit an AIM IRA
Application. AIM will arrange the transfer for you.
- --------------------------------------------------------------------------------
1. INVESTOR INFORMATION (PLEASE PRINT OR TYPE.)
Name
-----------------------------------------------------------------------
First Name Middle Last Name
Address
--------------------------------------------------------------------
Street
----------------------------------------------------------------------------
City State Zip Code
Social Security Number Birth Date / /
---------------------- -- -- --
Month Day Year
Home Telephone ( ) Work Telephone ( )
--- ----------------- --- -----------------
- --------------------------------------------------------------------------------
2. CURRENT TRUSTEE/CUSTODIAN
Name of Resigning Trustee
--------------------------------------------------
Account Number of Resigning Trustee
----------------------------------------
Address of Resigning Trustee
-----------------------------------------------
Street
----------------------------------------------------------------------------
City State Zip Code
Attention Telephone
---------------------------------- -----------------------
- --------------------------------------------------------------------------------
3. IRA ACCOUNT INFORMATION
Please deposit proceeds in my [ ]New* [ ]Existing
Existing AIM Account Number
------------------
[ ]IRA Account [ ]Rollover IRA Account
[ ]SEP IRA Account [ ]SARSEP IRA Account
INVESTMENT ALLOCATION:
Fund Name Class %
--------------------------- --------------------- ------------
Fund Name Class %
--------------------------- --------------------- ------------
Fund Name Class %
--------------------------- --------------------- ------------
*If this is a new AIM IRA account, you must attach a completed AIM IRA
Application. If no class of shares is selected, Class A shares will be
purchased, except in the case of AIM Money Market Fund, where AIM Cash
Reserve Shares will be purchased.
- --------------------------------------------------------------------------------
4. TRANSFER INSTRUCTIONS TO RESIGNING TRUSTEE OR CUSTODIAN
OPTION 1: Please liquidate from the account(s) listed in Section 2 and
issue a check to my IRA with INVESCO Trust Company.
Amount to liquidate: [ ] All [ ] Partial amount of $_______________
When to liquidate: [ ] Immediately [ ] At maturity ____ /___ /___
OPTION 2: (If the account listed in Section 2 contains shares of an AIM
Fund, you may choose to transfer them "in kind.") Please deposit "in kind"
the shares of the AIM Fund held in my account to INVESCO Trust Company.
NOTE: ONLY AIM FAMILY OF FUND SHARES MAY BE TRANSFERRED IN KIND. TO
TRANSFER ALL OTHER ASSETS, THEY MUST BE LIQUIDATED.
Amount to transfer "in kind" immediately:[ ]all [ ] partial amount of
shares_____________
19
<PAGE>
- --------------------------------------------------------------------------------
5. AUTHORIZATION AND SIGNATURE
I have established an Individual Retirement Account with the AIM Funds and
have appointed INVESCO Trust Company as the successor Custodian. Please
accept this as your authorization and instruction to liquidate or transfer
in kind the assets noted above, which your company holds for me.
Your Signature Date / /
---------------------------------- ----- ----- -----
Note: Your resigning trustee or custodian may require your signature to be
guaranteed. Call that institution for requirements.
Name of Bank or Brokerage Firm
---------------------------------------------
Signature Guaranteed by
---------------------------------------------------
(Name and title)
- --------------------------------------------------------------------------------
6. DISTRIBUTION ELECTION INFORMATION SECTION 6 OF FORM TO BE COMPLETED BY
PRIOR CUSTODIAN
If this participant is age 70 1/2 or older this year, the resigning
Trustee/Custodian must complete this section. Election made by the
participant as of the required beginning date:
1. Method of calculation [ ] declining years [ ] recalculation
[ ] annuitization [ ] amortization
2. Life expectancy [ ] single life payout [ ] joint life expectancy
factor-Joint birth date and relationship________________
3. The amount withheld from this rollover to satisfy this year's required
distribution $____________________
The life-expectancy ages used to calculate this required payment
was _________________________________________
Signature of Current Custodian/Trustee
------------------------------------
- --------------------------------------------------------------------------------
REMAINDER OF FORM TO BE COMPLETED BY AIM
7. CUSTODIAN ACCEPTANCE
This is to advise you that INVESCO Trust Company, as custodian, will accept
the account identified above for:
Depositor's Name Account Number
-------------------- ---------------------
This transfer of assets is to be executed from fiduciary to fiduciary and
will not place the participant in actual receipt of all or any of the plan
assets. No federal income tax is to be withheld from this transfer of
assets.
Authorized Signature Mailing Date / /
------------------------ ---- ---- ----
(INVESCO Trust Company)
- --------------------------------------------------------------------------------
8. INSTRUCTIONS TO RESIGNING TRUSTEE OR CUSTODIAN
Please attach a copy of this form to the check and return to:
INVESCO Trust Company, c/o A I M Fund Services, Inc., P.O. Box 4739,
Houston, TX 77210-4739.
Make check payable to INVESCO Trust Company.
Indicate the AIM account number and the social security number of the IRA
holder on all documents.
20 [AIM LOGO APPEARS HERE]
<PAGE>
[AIM LOGO APPEARS HERE]
DIRECT ROLLOVER FORM
To directly roll over distributions from your employer's qualified plan to your
AIM IRA.
Note: Use this form ONLY if you want AIM to request the money directly from
another custodian. Effective January 1, 1993, the Unemployment Compensation
Amendments of 1992 require that certain distributions from 403(b) accounts and
employer qualified plans (Keogh, money purchase pension, profit sharing and
401(k) plans) are subject to 20% withholding tax, unless the distribution is
"directly rolled over" to a new employer's qualified plan, a 403(b) account or
an IRA. Your employer will inform you what portion of your distribution is
eligible for rollover.
Please use this form to request a "direct rollover" to your AIM IRA. If you
currently do not have an IRA, you must also submit an AIM IRA Application with
this request. You may also use your former employer's direct rollover form.
PLEASE CONTACT YOUR EMPLOYER TO DETERMINE IF ADDITIONAL FORMS ARE REQUIRED.
- --------------------------------------------------------------------------------
1 PLAN TYPE Indicate type of retirement plan to be rolled over. [ ] 403(b) Plan
[ ] Employer's Qualified Retirement Plan
- --------------------------------------------------------------------------------
2 INVESTOR INFORMATION (Please print or type.)
Name
-------------------------------------------------------------------------
First Name Middle Last Name
Address
----------------------------------------------------------------------
Street City State Zip Code
Social Security Number Birth Date / /
-------------------- ---- ---- ----
Day Phone ( ) Month Day Year
---- ------------
- --------------------------------------------------------------------------------
3 CURRENT PLAN CUSTODIAN OR FORMER EMPLOYER INFORMATION
Name of Resigning Custodian or Former Employer
------------------------------
Former Employer Plan Name or Fund Account Number
------------------- --------
Address of Releasing Institution
--------------------------------------------
City State Zip Code
----------------------- ------------- ---------
Attention Telephone
------------------------------ ---------------------
- --------------------------------------------------------------------------------
4 ROLLOVER INSTRUCTIONS TO RESIGNING TRUSTEE OR CUSTODIAN
OPTION 1: Please liquidate from the account(s) listed in Section 3 and
issue a check to my IRA with INVESCO Trust Company.
Amount to liquidate: [ ] All [ ] Partial amount of $_______________
When to liquidate: [ ] Immediately [ ] At maturity_____ /_____ /_____
OPTION 2: (If the account listed in Section 2 contains shares of an AIM Fund,
you may choose to roll them over "in kind.")
NOTE: ONLY AIM FAMILY OF FUND SHARES MAY BE ROLLED OVER IN KIND.
Amount to roll over "in kind" immediately: [ ] all
[ ] partial amount of shares_____________
- --------------------------------------------------------------------------------
5 IRA ACCOUNT INFORMATION
Please deposit proceeds in my [ ] New* [ ] Existing
Existing AIM Account Number
----------------
[ ] IRA Account [ ] Rollover IRA Account
INVESTMENT ALLOCATION:
Fund Name Class %
---------------------- ------------------------- ---------
Fund Name Class %
---------------------- ------------------------- ---------
Fund Name Class %
--------------------- ------------------------- ---------
*If this is a new AIM IRA account, you must attach a completed AIM IRA
application. If no class of shares is selected, Class A shares will be
purchased, except in the case of AIM Money Market Fund, where AIM Cash
Reserve Shares will be purchased.
23
<PAGE>
- --------------------------------------------------------------------------------
6 AUTHORIZATION AND SIGNATURE
I have established an Individual Retirement Account with the AIM Funds and
have appointed INVESCO Trust Company as the successor Custodian. Please
accept this as your authorization and instruction to liquidate or transfer
in kind the assets noted above, which your company holds for me.
Your Signature Date / /
-------------------------------- ---- ---- ----
Note: Your resigning trustee or custodian may require your signature to be
guaranteed. Call that institution for requirements.
Name of Bank or Brokerage Firm
---------------------------------------------
Signature Guaranteed by
---------------------------------------------------
(Name and title)
NOTE: SOME CUSTODIANS OF RETIREMENT PLANS REQUIRE THE COMPLETION OF THEIR
OWN FORM BEFORE SENDING A CHECK TO AIM.
[ ] Yes, I have [ ] No, I have not filed the necessary completed forms
with the current custodian.
- --------------------------------------------------------------------------------
7 DISTRIBUTION ELECTION INFORMATION SECTION 7 OF FORM TO BE COMPLETED BY
PRIOR CUSTODIAN
If this participant is age 70 1/2 or older this year, the resigning
Trustee/Custodian must complete this section. Election made by the
participant as of the required beginning date:
1. Method of calculation [ ] declining years [ ] recalculation
[ ] annuitization [ ] amortization
2. Life expectancy [ ] single life payout
[ ] joint life expectancy factor-Joint birth date and relationship______
3. The amount withheld from this rollover to satisfy this year's required
distribution $____________________
The life-expectancy ages used to calculate this required payment was _______
Signature of Current Custodian/Trustee
-------------------------------------
- --------------------------------------------------------------------------------
REMAINDER OF FORM TO BE COMPLETED BY AIM
8 CUSTODIAN ACCEPTANCE
This is to advise you that INVESCO Trust Company, as custodian, will accept
the account identified above for:
Depositor's Name Account Number
--------------------- ----------------------
This direct rollover is to be executed from fiduciary to fiduciary and will
not place the participant in actual receipt of all or any of the plan
assets.
No federal income tax is to be withheld from this direct rollover.
Authorized Signature Mailing Date / /
------------------------- ---- ---- ----
(INVESCO Trust Company)
- --------------------------------------------------------------------------------
9 INSTRUCTIONS TO RESIGNING TRUSTEE OR CUSTODIAN
Please attach a copy of this form to the check and return to:
INVESCO Trust Company, c/o A I M Fund Services, Inc., P.O. Box 4739,
Houston, TX 77210-4739.
Make check payable to INVESCO Trust Company.
Indicate the AIM account number and the social security number of the IRA
holder on all documents.
24 [AIM LOGO APPEARS HERE]
<PAGE>
[AIM LOGO APPEARS HERE]
AUTOMATIC BANK DRAFT
To establish regular, monthly purchases of Fund shares.
The Automatic Bank Draft is a service available to shareholders of The AIM
Family of Funds--Registered Trademark--, making possible regular, monthly
purchases of Funds to allow dollar-cost averaging. Each month, A I M Fund
Services,Inc. will arrange for an amount of money selected by you ($50 minimum
per Fund) to be deducted from your checking account and used to purchase shares
of a specified AIM Fund. You will receive confirmations from A I M Fund
Services, Inc., and your bank statement will reflect the amount of the draft.
- --------------------------------------------------------------------------------
1 DRAFT AMOUNT
I authorize you to withdraw a total of $ __________________ ($50 minimum
per Fund) from my checking account at the bank shown below, beginning in
__________________________________ and invest this amount in shares of the
AIM Fund listed below. You have the option of selecting the 10th, 25th or
both dates each month for the automatic bank draft. Please refer to Section
2 for this selection. ALL DRAFTS WILL BE CONSIDERED CURRENT-YEAR IRA
CONTRIBUTIONS.
I agree that if the check is not honored by my bank upon presentation, AIM
Fund Services, Inc. may discontinue this service. I also authorize AIM Fund
Services, Inc. to liquidate sufficient shares of the Fund to make up any
deficiency resulting from a dishonored check. I understand that this program
may be discontinued at any time by the Fund or by myself by written notice to
AIM Fund Services, Inc. received no later than ten business days prior to the
above designated investment date.
- --------------------------------------------------------------------------------
2 FUND ACCOUNT INFORMATION (Please enter information exactly as your account is
registered.)
Name(s) AIM Account #
--------------------------------- -----------------------
---------------------------------
Fund $
--------------------- --------------------------------------------------
$50 Minimum per draft. Draft date: [ ]10th [ ]25th
Fund $
--------------------- --------------------------------------------------
$50 Minimum per draft. Draft date: [ ]10th [ ]25th
Fund $
--------------------- --------------------------------------------------
$50 Minimum per draft. Draft date: [ ]10th [ ]25th
Fund $
--------------------- --------------------------------------------------
$50 Minimum per draft. Draft date: [ ]10th [ ]25th
Fund $
--------------------- --------------------------------------------------
$50 Minimum per draft. Draft date: [ ]10th [ ]25th
*Total $
--------------------------------
Signature Signature
-------------------------- ------------------------------
(All registered owners must sign.) (All registered owners must sign.)
*Please note that each draft (per Fund account) will be treated as a
separate item by your bank.
- --------------------------------------------------------------------------------
3 BANK AUTHORIZATION
Name of Bank
-----------------------------------------------------------------
Address of Bank
--------------------------------------------------------------
Bank Account # ABA Routing #
---------------------- ---------------------------
Please honor checks on my account by The Shareholders Services Group, Inc.
(TSSG), a wholly-owned subsidiary of First Data Corporation. Your authority
to do so shall continue until you receive further notice from me revoking
this authority. You may terminate your participation in this arrangement by
written notice either to TSSG or me. I agree that your rights with respect to
each check shall be the same as if it were drawn by me. I further agree that
should any check be dishonored, with or without cause, intentionally or
inadvertently, you shall be under no liability whatsoever.
------------------------------- -------------------------------------------
Depositor's Name (please print) Signature (exactly as appearing on bank
records)
------------------------------- -------------------------------------------
Depositor's Name (please print) Signature (exactly as appearing on bank
records)
25
<PAGE>
- --------------------------------------------------------------------------------
4 VOIDED CHECK
ATTACH YOUR VOIDED CHECK HERE.
AIM Fund Services, Inc.
P.O. Box 4739
Houston, Texas 77210-4739
Phone: 800-959-4246
[Voided Check Graphic]
26 [AIM LOGO APPEARS HERE]
<PAGE>
[AIM LOGO APPEARS HERE]
Form 5305-A (Rev. October 1992) Department of the Treasury Internal Revenue
Service
INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
(under Section 408(a) of the Internal Revenue Code)
Please fill out and retain with your tax records. Do NOT file with Internal
Revenue Service or AIM.
- --------------------------------------------------------------------------------
Name of depositor
---------------------------------------------------------------
Date of birth of depositor / / Social Security Number
----- ----- ----- -----------
Month Day Year
Address of depositor [ ] Check if Amendment
-------------------------------------
Name of Custodian INVESCO Trust Company
Address or principal place of business of custodian The State of Colorado
The Depositor whose name appears above is establishing an individual retirement
account under section 408(a) to provide for his or her retirement and for the
support of his or her beneficiaries after death.
The Custodian named above has given the Depositor the disclosure statement
required under Regulations section 1.408-6.
The Depositor assigned the custodial account ________ dollars ($______) in cash.
The Depositor and the Custodian make the following agreement:
- --------------------------------------------------------------------------------
A I M DISTRIBUTORS, INC. CUSTODIAN AGREEMENT
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified
employee pension plan as described in section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer
contribution to a simplified employee pension plan as described in section
408(k).
ARTICLE II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE III
1. NO PART OF THE CUSTODIAL FUNDS may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. NO PART OF THE CUSTODIAL FUNDS may be invested in collectibles (within the
meaning of section 408(m)) except as otherwise permitted by section 408(m)(3)
which provides an exception for certain gold and silver coins and coins issued
under the laws of any state.
ARTICLE IV
1. NOTWITHSTANDING ANY PROVISION of this agreement to the contrary, the
distribution of the Depositor's interest in the custodial account shall be made
in accordance with the following requirements and shall otherwise comply with
section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section
1.401(a)(9)-2, the provisions of which are incorporated by reference.
2. UNLESS OTHERWISE ELECTED by the time distributions are required to begin
to the Depositor under paragraph 3, or to the surviving spouse under paragraph
4, other than in the case of a life annuity, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the Depositor
and the surviving spouse and shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be recalculated.
3. THE DEPOSITOR'S ENTIRE INTEREST in the custodial account must be, or begin
to be, distributed by the Depositor's required beginning date (April 1 following
the calendar year end in which the Depositor reaches age 70 1/2. By that date,
the Depositor may elect, in a manner acceptable to the Custodian, to have the
balance in the custodial account distributed in:
(a) A single-sum payment.
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of the
Depositor and his or her designated beneficiary.
4. IF THE DEPOSITOR DIES before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of his or her interest
has begun, distribution must continue to be made in accordance with paragraph 3.
(b) If the Depositor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the Depositor or,
if the Depositor has not so elected, at the election of the beneficiary or
beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over the
life expectancy of the designated beneficiary or beneficiaries starting by
December 31 of the year following the year of the Depositor's death. If,
however, the beneficiary is the Depositor's surviving spouse, then this
distribution is not required to begin before December 31 of the year in which
the Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has irrevocably
commenced distributions are treated as having begun on the Depositor's required
beginning date, even though payments may actually have been made before that
date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in the
account.
5. IN THE CASE OF DISTRIBUTION over life expectancy in equal or substantially
equal annual payments, to determine the minimum annual payment for each year,
divide the Depositor's entire interest in the Custodial account as of the close
of business on December 31 of the preceding year by the life expectancy of the
Depositor (or the joint life and last survivor expectancy of the Depositor and
the Depositor's designated beneficiary, or the life expectancy of the designated
beneficiary, whichever applies). In the case of distributions under paragraph 3,
determine the initial life expectancy (or joint life and last survivor
expectancy) using the attained ages of the Depositor and designated beneficiary
as of their birthdays in the year the Depositor reaches age 70 1/2. In the case
of distribution in accordance with paragraph 4(b)(ii), determine life expectancy
using the attained age of the designated beneficiary as of the beneficiary's
birthday in the year distributions are required to commence.
27
<PAGE>
6. THE OWNER OF TWO OR MORE INDIVIDUAL RETIREMENT ACCOUNTS may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524 to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
ARTICLE V
1. THE DEPOSITOR AGREES to provide the Custodian with information necessary
for the Custodian to prepare any reports required under section 408(i) and
Regulations sections 1.408-5 and 1.408.6.
2. THE CUSTODIAN AGREES to submit reports to the Internal Revenue Service and
the Depositor prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and the related
regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear below.
ARTICLE VIII
1. PURSUANT TO THE TERMS of this A I M Distributors, Inc. Individual
Retirement Custodial Account Agreement and the related IRA Account Application
(referred to herein as the "IRA Adoption Agreement") (such Agreements being
collectively referred to herein as the "Agreement"), the Depositor directs the
Custodian to invest all custodial account funds after deductions for sales
charges and Custodian fees, in shares issued by the investment company or
companies selected by the Depositor on the related IRA Adoption Agreement, until
the Depositor hereafter gives the Custodian contrary instructions pursuant to
Article XIII below. The investment companies from which the Depositor may select
are enumerated on the applicable list prepared by A I M Distributors, Inc. (the
"Distributor"), a copy of which accompanies the Adoption Agreement. Such
investment companies are part of "The AIM Family of Funds--Registered
Trademark--," which are managed or advised by subsidiaries of A I M Management
Group Inc., and any such investment company will hereafter be referred to as
"Investment Company."
2. (i) ANNUAL CASH CONTRIBUTIONS:
The Depositor may make annual cash contributions to the account within the
limits specified in Article I. All contributions shall be hand delivered or
mailed to the Custodian by the Depositor, with an indication of the taxable year
to which such contribution relates. Additionally, if the Depositor's employer
maintains a qualified simplified employee pension (SEP), such employer may
contribute on behalf of the Depositor, the lesser of 15% of the Depositor's
compensation from such employer or $30,000.
(ii) ROLLOVER CONTRIBUTIONS:
In addition to any annual contributions referred to in Paragraph (i) above,
but subject to this Paragraph (ii), the Depositor may contribute to the account,
at any time, a rollover contribution of such cash or other property as shall
constitute a rollover amount or contribution under section 402(a)(5), 402(a)(7),
403(a)(4), 403(b)(8) or 408(d)(3) of the Code. The Custodian will accept for the
account all rollover contributions which consist of cash, and it may, but shall
be under no obligation to, accept any other rollover contribution. In the case
of rollover contributions composed of assets other than cash, the prospective
Depositor shall provide the Custodian with a description of such assets and such
other information as the Custodian may reasonably require. The Custodian may
accept all or any part of such a rollover contribution if it determines that the
assets of which such contribution consists are either in a medium proper for
investment hereunder or that the assets can be promptly liquidated for cash.
The Depositor warrants that any rollover contribution to the account consists
of cash, the same property received in the distribution or, in the case of
amounts distributed to the Depositor from a qualified employer's plan or
annuity, the proceeds from the sale of the same property received in the
distribution. The Depositor also warrants that in the case of a rollover into
the account of amounts distributed to the Depositor from a qualified employer's
plan or annuity, only amounts in excess of the amounts considered to be the
Depositor's employee contributions included in such distribution constitute the
contribution to this account. Additionally, the Depositor affirms that the
contribution to the account does not consist of amounts received from an
inherited individual retirement account or annuity. An individual retirement
account or annuity shall be treated as inherited if it was acquired by reason of
the death of an individual other than the Depositor's spouse. The Depositor also
affirms that in the case of a rollover into the account of amounts distributed
from an individual retirement account or annuity or retirement bond, he has not
during the one year period ending on the date of the distribution received any
other distribution from an individual retirement account or annuity or
retirement bond which constituted a rollover contribution (as described in
section 408(d)(3) of the Code).
3. THE DEPOSITOR SHALL BE FULLY AND SOLELY RESPONSIBLE for all taxes,
interest and penalties which might accrue or be assessed by reason of any excess
deposit, and interest, if any, earned thereon. Any contributions made by or on
behalf of the Depositor in respect of a taxable year of the Depositor shall be
made by or on behalf of the Depositor to the Custodian for deposit in the
custodial account within the time period for claiming any income tax deduction
for such taxable year. It shall be the sole responsibility of the Depositor to
determine the amount of the contributions made hereunder. The Depositor shall
execute such forms as the Custodian may require in connection with any
contribution hereunder.
ARTICLE IX
1. THE CUSTODIAN SHALL from time to time, subject to the provisions of
Articles IV and V, make distributions out of the custodial account to the
Depositor, in such manner and amounts as may be specified in written
instructions of the Depositor. All such instructions shall be deemed to
constitute a certification by the Depositor that the distribution so directed is
one that the Depositor is permitted to receive. A declaration of the Depositor's
intention as to the disposition of an amount distributed pursuant to Article V
hereof shall be in writing and given to the Custodian. The Custodian shall have
no liability with respect to any contribution to the custodial account, any
investment of assets in the custodial account or any distribution therefrom
pursuant to instructions received from the Depositor or pursuant to this
Agreement, or for any consequences to the Depositor arising from such
contributions, investments or distributions including, but not limited to,
excise and other taxes and penalties which might accrue or be assessed by reason
thereof, nor shall the Custodian be under any duty to make any inquiry or
investigation with respect thereto.
2. IF THE DEPOSITOR IS DISABLED (as defined in Section 72(m) of the Code),
all or a portion of the balance in the custodial account may be distributed to
him/her as soon as practicable after the Custodian receives written notice of
the Depositor's disability and a written request for distribution. The Custodian
may require such proof of disability as it deems necessary prior to the time
that amounts are distributed to the Depositor due to such disability.
3. THE DEPOSITOR SHALL BE fully and solely responsible for all taxes and
penalties which might accrue or be assessed for having failed to make the annual
minimum withdrawal required in any year.
ARTICLE X
A Depositor shall have the right to designate a beneficiary or beneficiaries
to receive any amounts remaining in his account in the event of his death. Any
prior beneficiary designation may be changed or revoked at any time by a
Depositor by written designation signed by the Depositor on a form acceptable
to, and filed with, the Custodian; provided, however, that such designation, or
change or revocation of a prior designation shall not become effective until it
has been received by the Custodian, nor shall it be effective unless received by
the Custodian no later than thirty days before the death of the Depositor, and
provided further that the last such designation of beneficiary or change or
revocation of beneficiary executed by the Depositor, if received by the
Custodian within the time specified, shall control. Unless otherwise provided in
the beneficiary designation, amounts payable by reason of the Depositor's death
will be paid in equal shares only to the primary beneficiary or beneficiaries
who survive the Depositor, or, if no primary beneficiary survives the Depositor,
to the contingent beneficiary or beneficiaries who survive the Depositor. If the
Depositor had not, by the date of his death, properly designated a beneficiary
in accordance with the preceding sentences, or if no designated beneficiary
survives the Depositor, then the Depositor's beneficiary shall be the
Depositor's estate.
ARTICLE XI
1. ANY ADMINISTRATIVE OR OTHER FEES of the Custodian and its agents for
performing duties pursuant to this Agreement shall be in such amount as shall be
established from time to time. The Depositor agrees to pay the Custodian the
fees specified in its current fee schedule and authorizes the Custodian to
charge the Depositor's custodian account for the amount of such fees.
2. UPON THIRTY DAYS' PRIOR WRITTEN NOTICE, the Custodian may substitute a new
fee schedule. The Custodian's fees, any income, gift, estate and inheritance
taxes and other taxes of any kind whatsoever, including transfer taxes incurred
in connection with the investment or reinvestment of the assets of the custodial
account, that may be levied or assessed in respect of such assets, and all other
administrative expenses incurred by the Custodian in the performance of its
duties including fees for legal services rendered to the Custodian, may be
charged to the custodial account with the right to liquidate Investment Company
shares for this purpose, or at the Custodian's option, shall be billed to the
Depositor directly.
28
<PAGE>
ARTICLE XII
1. THIS AGREEMENT SHALL take effect only when accepted and signed by the
Custodian. As directed, the Custodian shall then open and maintain a separate
custodial account for Depositor and invest the initial contribution hereunder in
shares of the Investment Company. Where the IRA Adoption Agreement is checked
for spousal accounts, separate custodial accounts will be opened and maintained
in each spouse's name. The amounts specified in the IRA Adoption Agreement shall
be credited to each spouse's separate custodial account except that no more than
$2,000 shall be credited to either custodial account.
2. THE CUSTODIAN SHALL invest subsequent contributions as directed. If any
such written instructions are not received as required however, or if received,
are in the opinion of the Custodian unclear, or if the accompanying contribution
exceeds $2,000 for the Depositor and/or $2,000 for the Depositor's spouse, the
Custodian may hold or return all or a portion of the contribution uninvested
without liability for loss of income or appreciation, and without liability for
interest, pending receipt of written instructions or clarification.
3. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS, less charges, received on
Investment Company shares held in the custodial account shall (unless received
in additional such shares) be reinvested in shares of the Investment Company,
which shall be credited to the custodial account. If any distribution on such
shares may be received at the election of the Depositor in additional such
shares or in cash or other property, the Custodian shall elect to receive it in
additional Investment Company shares.
4. ALL INVESTMENT COMPANY SHARES ACQUIRED by the Custodian hereunder shall be
registered in the name of the Custodian (with or without identifying the
Depositor) or of its nominees. The Custodian shall deliver, or cause to be
executed and delivered, to the Depositor all notices, prospectuses, financial
statements, proxies and proxy solicitation materials relating to such Investment
Company shares held in the custodial account. The Custodian shall not vote any
Investment Company shares except in accordance with the written instructions
received from the Depositor.
ARTICLE XIII
1. THE CUSTODIAN SHALL keep adequate records of transactions it is required
to perform hereunder. Not later than six months after the close of each calendar
year or after the Custodian's registration or removal pursuant to Article XV
below, the Custodian shall render to the Depositor or the Depositor's legal
representative a written report or reports reflecting the transactions effected
by it during such period and the assets and liabilities of the custodial account
at the close of the period. Sixty days after rendering such report(s), the
Custodian shall (to the extent permitted by law) be forever released and
discharged from all liability and accountability to anyone with respect to its
acts and transactions shown in or reflected by such report(s), except with
respect to those as to which the Depositor or the Depositor's legal
representative shall have filed written objections with the Custodian within the
latter such sixty-day period.
2. THE CUSTODIAN SHALL receive and invest contributions as directed by the
Depositor, hold and distribute such investments, and keep adequate records and
reports thereon, all in accordance with this Agreement. The parties do not
intend to confer any other fiduciary duties of the Custodian, and none shall be
implied. The Custodian shall not be liable (and assumes no responsibility) for
the collection of contributions, the deductibility or propriety of any
contribution under this Agreement, or the purposes or propriety of any
distribution from the account, which matters are the responsibility of the
Depositor or the Depositor's legal representative.
3. THE DEPOSITOR, to the extent permitted by law, shall always fully
indemnify the Custodian and save it harmless from any and all liability
whatsoever which may arise in connection with this Agreement and matters which
it contemplates, except that which arises due to the Custodian's negligence and
willful misconduct. The Custodian shall not be obligated or expected to commence
or defend any legal action or preceding in connection with this Agreement or
such matters unless agreed upon by the Custodian and Depositor or said legal
representative, and unless fully indemnified for so doing to the Custodian's
satisfaction.
4. THE CUSTODIAN MAY conclusively rely upon and shall be protected in acting
upon any written order from the Depositor or the Depositor's legal
representative or any other notice, request, consent, certificate or other
instruments or paper believed by it to be genuine and to have been properly
executed, and as long as it acts in good faith in taking or omitting to take any
other action in reliance thereon.
ARTICLE XIV
1. THE CUSTODIAN MAY resign at any time upon thirty days' notice in writing
to the Depositor, and may be removed by the Depositor at any time upon thirty
days' notice in writing to the Custodian. Upon such resignation or removal, the
Depositor shall appoint a successor custodian to serve under this Agreement.
Upon receipt by the Custodian of written acceptance of such appointment by the
successor custodian, the Custodian shall transfer to such successor the assets
of the custodial account and all necessary records (or copies thereof)
pertaining thereto, provided that (at the Custodian's request) any successor
custodian shall agree not to dispose of any such records without the Custodian's
consent. The Custodian is authorized, however, to reserve such assets as it may
deem advisable for payment of any other liabilities constituting a charge on or
against the assets of the custodial account or on or against the Custodian, with
any balance of such reserve remaining after the payment of all such items to be
paid over to the successor custodian.
2. THE CUSTODIAN SHALL NOT be liable for the acts or omissions of such
successor custodian.
3. THE CUSTODIAN, AND EVERY SUCCESSOR CUSTODIAN appointed to serve under this
Agreement, must be a bank (as defined in Section 408(n) of the Code) or such
other person who qualifies with the Internal Revenue Service to serve in the
manner prescribed by Code section 408(a)(2) and satisfies the Custodian, upon
request, as to such qualification.
4. AFTER THE CUSTODIAN HAS transferred the custodial account assets
(including any reserve balance as contemplated above) to the successor
custodian, the Custodian shall be relieved of all further liability with respect
to this Agreement, the custodial account and the assets thereof.
ARTICLE XV
1. THE CUSTODIAN SHALL terminate the custodial account and pay the
proceeds of the account to the depositor if within thirty days after the
resignation or removal of the Custodian pursuant to Article XV above, the
Depositor has not appointed a successor custodian which has accepted such
appointment unless within that time the Distributor appoints such successor and
gives written notice thereof to the Depositor and the Custodian. The Distributor
shall have the right, but not the duty, to appoint such a successor. Termination
of the custodial account shall be effected by distributing all of the assets
therein in cash or in kind to the Depositor in a lump sum, subject to the
Custodian's right to reserve funds as provided in said Article XV.
2. UPON TERMINATION of the custodial account in any manner provided for in
this Article XVI, this Agreement shall terminate and have no further force and
effect, and the Custodian shall be relieved from all further liability with
respect to this Agreement, the custodial account and all assets thereof so
distributed.
ARTICLE XVI
1. ANY NOTICE FROM THE CUSTODIAN TO THE DEPOSITOR provided for in this
Agreement shall be effective when mailed if sent by first class mail to the
Depositor at the Depositor's last known address as shown on the Custodian's
records. Any notice required or permitted to be given to the Custodian, shall
become effective upon actual receipt by the Custodian at such address as the
Custodian shall provide the Depositor from time to time in writing.
2. THIS AGREEMENT IS accepted by the Custodian and shall be construed and
administered in accordance with the laws of The State of Colorado. The Custodian
and the Depositor hereby waive and agree to waive right to trial by jury in an
action or proceeding instituted in respect to this custodial account. The
Depositor further agrees that the venue of any litigation between him and the
Custodian with respect to the custodial account shall be in the State of
Colorado.
3. THIS AGREEMENT is intended to qualify under section 408 of the Code as an
Individual Retirement Account and to entitle the Depositor to any retirement
savings deduction which he may qualify for under section 219 of the Code, and if
any provision hereof is subject to more than one interpretation or any term used
herein is subject to more than one construction, such ambiguity shall be
resolved in favor of that interpretation or construction which is consistent
with that intent.
4. ALL PROVISIONS IN THIS AGREEMENT ARE subject to the Code and to
regulations promulgated thereunder. In the event that any one or more of the
provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement.
5. THE CUSTODIAN SHALL have no duties whatsoever except such duties as it
specifically agrees to in writing, and no implied covenants or obligations shall
be read into this Agreement against the Custodian. The Custodian shall not be
liable under this Agreement, except for its own bad faith, gross negligence or
willful misconduct.
6. NO INTEREST, RIGHT OR CLAIM IN OR TO ANY PART of the custodial account or
any payment therefrom shall be assignable, transferable, or subject to sale,
mortgage, pledge, hypothecation, communication, anticipation, garnishment,
attachment, execution, or levy of any kind and the Custodian shall not recognize
any attempt to assign, transfer, sell, mortgage, pledge, hypothecate, commute or
anticipate the same, except as required by law.
7. THE DEPOSITOR HEREBY DELEGATES to the Custodian the power to amend this
Agreement from time to time as it deems appropriate, and hereby consents to all
such amendments, provided, however, that all such amendments are in compliance
with the provisions of the Code and the regulations promulgated thereunder. All
such amendments shall be effective as of the date specified in a written notice
of amendment which will be sent to the Depositor.
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INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE OF FORM
This model custodial account agreement may be used by an individual who
wishes to adopt an individual retirement account under section 408(a). When
fully executed by the Depositor and the Custodian not later than the time
prescribed by law for filing the Federal income tax return for the Depositor's
tax year (not including any extensions thereof), a Depositor will have an
individual retirement account (IRA) custodial account which meets the
requirements of section 408(a). This account must be created in the United
States for the exclusive benefit of the Depositor or his/her beneficiaries.
DEFINITIONS
Custodian. -- The Custodian must be a bank or savings and loan association,
as defined in section 408(n), or other person who has the approval of the
Internal Revenue Service to act as custodian.
DEPOSITOR. -- The Depositor is the person who establishes the custodial
account.
IRA FOR NON-WORKING SPOUSES
Contributions to an IRA custodial account for a non-working spouse must be
made to a separate IRA custodial account established by the non-working spouse.
This form may be used to establish the IRA custodial account for the
non-working spouse.
An individual's social security number will serve as the identification
number of his or her individual retirement account.
For more information, obtain a copy of the required disclosure statement from
your custodian or get Publication 590, Individual Retirement Arrangements.
(IRAs).
SPECIFIC INSTRUCTIONS
Article IV -- Distribution made under this Article may be made in a single
sum, periodic payment, or a combination of both. The distribution option should
be reviewed in the year the Depositor reaches age 70 1/2 to make sure the
requirements of section 408(a)(6) have been met.
Article IX -- This article and any that follow it may incorporate additional
provisions that are agreed upon by the Depositor and the Custodian to complete
the agreement. These may include, for example: definitions, investment powers,
voting rights, exculpatory provisions, amendment and termination, removal of
Custodian, Custodian's fees, state law requirements, beginning date of
distributions, accepting only cash, treatment of excess contributions,
prohibited transactions with the Depositor, etc. Use additional pages if
necessary and attach them to this form.
Note: This form may be reproduced and reduced in size for adoption to
passbook or card purposes.
THE AIM FAMILY OF FUNDS--Registered Trademark--
INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
DISCLOSURE STATEMENT
Under applicable federal regulations, a custodian of an individual
retirement account is required to furnish each depositor who has established or
is establishing an individual retirement account with a statement which
discloses certain information regarding the account. INVESCO Trust Company
(hereinafter referred to as the "Custodian") is providing this Disclosure
Statement to you in accordance with that requirement, and this Disclosure
Statement contains general information about the The AIM Family of
Funds--Registered Trademark-- Individual Retirement Custodial Account
(hereinafter referred to as "IRA"). This Disclosure Statement should be reviewed
in conjunction with both the Individual Retirement Custodial Account agreement
(From 5305-A and any attachments thereto, hereinafter referred to as the
"Custodial Agreement") and the Adoption Agreement for your IRA. You should
review this Disclosure Statement and the IRA documents with your attorney or tax
advisor. The Custodian cannot give tax advice or determine whether or not the
IRA is appropriate for you.
A. SEVEN DAY RIGHT TO REVOKE YOUR IRA.
You may revoke your IRA at any time within seven business days after the date
the IRA is established, by giving proper notice. For purposes of revocation, it
will be assumed that you received the Disclosure Statement no later than the
date of your check with which you opened your IRA. Written notice must be hand
delivered or sent by first class mail, in which case, the revocation will be
effective as of the date the notice is postmarked (or if sent by certified or
registered mail, the date of certification or registration). Notice of
revocation should be made to: A I M Distributors, Inc., Eleven Greenway Plaza,
Suite 763, P.O. Box 4739, Houston, Texas 77210-4739, Attention: Shareholder
Services Department, area code (800) 959-4246. If you revoke your IRA, you are
entitled to a refund of your entire contribution to the IRA, without adjustment
for such items as sales commissions, administrative expenses or fluctuation in
market value. If you do not revoke within seven business days after the
establishment of the IRA, you will be deemed to have accepted the terms and
conditions of the IRA and cannot later revoke the IRA without certain potential
penalties.
B. STATUTORY REQUIREMENTS.
An IRA is a trust or custodial account created or organized in the United
States for your exclusive benefit or that of your beneficiaries. It must be
created by a written governing instrument that meets the following requirements:
(1) THE TRUSTEE OR CUSTODIAN MUST BE A BANK, federally insured credit union,
savings and loan association or another person eligible to act as trustee or
custodian;
(2) EXCEPT FOR ROLLOVER CONTRIBUTIONS (as described in Part F below), no
contribution will be accepted unless it is in cash or cash equivalent,
including, but not by way of limitation, personal checks, cashier's checks, and
wire transfers;
(3) EXCEPT FOR ROLLOVERS and simplified employee pension ("SEP")
contributions, contributions of more than $2,000 for any tax year may not be
made;
(4) YOU WILL HAVE A NONFORFEITABLE INTEREST IN THE ACCOUNT;
(5) NO PART OF THE TRUST OR CUSTODIAL FUNDS will be invested in life
insurance contracts, nor may the assets be commingled with other property except
in a common trust fund or common investment fund. Furthermore, as provided in
section 408(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
your IRA may not be invested in "collectibles," such as art works, antiques,
metals, gems, stamps, coins (with an exception for certain U.S.-minted gold and
silver coins), and certain other types of tangible personal property. An
investment in a collectible would be treated as a distribution from your IRA
which would be includible in your gross income, and, if you had not attained the
age of 59 1/2, the distribution would also be subject to the premature
distribution penalty as discussed in Part E(4) below;
(6) YOUR ENTIRE INTEREST IN THE ACCOUNT MUST BE, or begin to be, distributed
on or before April 1 of the calendar year following the calendar year in which
you reach age 70 1/2. The distribution may be made in a single sum, or you may
receive periodic distributions, so long as your entire interest is distributed
in equal or substantially equal payments over any of the following periods:
(a) your life;
(b) the lives of you and your designated beneficiary;
(c) a period certain not extending beyond your life expectancy;
(d) a period certain not extending beyond the life expectancy of you and
your designated beneficiary.
If the distributions from your IRA are to be made over one of the foregoing
periods, the amount distributed each year must meet the minimum distribution
requirements set forth in your IRA Custodial Agreement, or you will incur a
penalty as described in Part E(8) below;
(7) IF YOU DIE AFTER DISTRIBUTIONS HAVE commenced but before your entire
interest has been distributed to you, payments must continue at least as rapidly
as under the method of distribution in effect, at your death. If you die before
distributions have commenced, generally your entire interest must be distributed
within five years of your death. However, if your interest is payable to a
designated beneficiary, payments may be made over the life or a period not
exceeding the life expectancy of the beneficiary; provided, however, that such
payments must commence within one year of your death unless your designated
beneficiary is your surviving spouse, in which case payments need not commence
until the date on which you would have attained age 70 1/2. You should advise
the Custodian as to your beneficiary and the method of distribution desired.
C. INVESTMENT OF YOUR IRA.
Under the terms of the Custodial Agreement, your contributions will be
invested by the Custodian in full and fractional shares of the investment
company or companies that you select. As provided in the Custodial Agreement,
you may only invest your IRA Funds in shares of investment companies which are
part of "The AIM Family of Funds--Registered Trademark--," which are managed
or advised by subsidiaries of A I M Management Group Inc. You will be provided
with a list of the investment companies from which you may choose to invest.
Subject to the foregoing and to any additional restrictions described in the
Custodial Agreement, you have complete control over the investment of your IRA
Funds. The Custodian will not provide any form of investment advice or make
investment recommendations of any type, so you will make all investment
decisions on the basis of information you obtain from other sources. When you
make a decision on how you wish to invest Funds held in your IRA, you should
provide the Custodian with specific
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instructions, detailing your investment decision so that the Custodian can
effectuate such investments as provided in your IRA Custodial Agreement. If you
fail to direct the Custodian as to the Investment of all or any portion of your
IRA account, the Custodian shall hold such uninvested amount in your account and
shall incur no liability for interest or earnings thereon. All dividends and
capital gain distributions received on shares of an investment company held in
your IRA will be reinvested in shares of that investment company, if available,
which shall be credited to the Custodian account. Detailed information about the
shares of the AIM fund(s) you select must be furnished to you in the form of
prospectuses governed by rules of the Securities and Exchange Commission.
D. LIMITATIONS AND RESTRICTIONS ON IRA CONTRIBUTIONS AND DEDUCTIONS.
Except in the case of rollover contributions (see Part F below), generally
you may contribute up to the lesser of $2,000 or 100% of your compensation
(earned income) to your IRA for any taxable year. A non-working spouse may
contribute up to $2,000 to a separate IRA.
Section 219 of the Code contains special provisions governing whether amounts
contributed to your IRA will be deductible from gross income for federal income
tax purposes. To the extent you are not eligible or elect not to make deductible
IRA contributions, you may make nondeductible IRA contributions within the
aforementioned limits which are reduced by the amount of any deductible
contributions. The following is a summary of the rules regarding the
deductibility of contributions to your IRA. You should consult your tax advisor
to determine the specific application of such rules to your IRA contributions
for any particular taxable year.
(1) IF NEITHER YOU NOR YOUR SPOUSE IS an "active participant" (as
determined under section 219(g) of the Code and any regulations or rulings
thereunder) in a retirement plan during any part of the taxable year, you may
take a deduction for contributions to your IRA for such taxable year in an
amount equal to the lesser of $2,000 or 100% of your compensation (earned
income) for such taxable year.
(2) IF EITHER YOU OR YOUR SPOUSE (unless you file separate income tax returns
as noted below) is considered an "active participant" in a retirement plan for
any part of the taxable year, the extent, if any, to which contributions to your
IRA will be deductible depends on the amount of your adjusted gross income
("AGI"). The maximum IRA deduction as specified in Paragraph (1) above will be
reduced in the same ratio that the excess of your AGI over $25,000 (for a single
individual), $40,000 (for a married couple filing jointly) and zero (for a
married couple filing separately) bears to $10,000. Thus, if you are an active
participant in a retirement plan, no IRA deduction will be permitted if:
(a) You are a single individual with AGI in excess of $35,000,
(b) you are married and file a joint return with AGI in excess of $50,000,
or
(c) you are married, file separate returns and either you or your spouse
have AGI in excess of $10,000.
(3) IF YOU ARE MARRIED and your spouse has no compensation for the
taxable year, or elects to be treated as having no compensation for such year,
you are permitted an additional deduction in the amount of $2,000 for
contributions to an IRA for the benefit of your spouse provided that your spouse
has not attained age 70 1/2 and you file a joint income tax return for such
year, subject to the provisions of (1) or (2) above, whichever is applicable.
(see below)
You will be considered an "active participant" for any particular taxable
year if you are covered by a retirement plan for any part of such year.
Generally, you will be considered covered by a retirement plan for a year if
your employer or union has a retirement plan under which money is added to your
account or you are eligible to earn retirement credits for such year. For
example, if you are covered under a profit-sharing plan, certain government
plans, a salary reduction arrangement (such as a tax-sheltered annuity
arrangement or a 401(k) plan), a SEP or a plan which promises you a retirement
benefit which is based upon the number of years of service you have with the
employer, you are likely to be an active participant. Your Form W-2 for the
year should indicate your participation status. You are an active participant
for a year even if you are not yet vested in your retirement benefit. Also, if
you make required contributions or voluntary employee contributions to a
retirement plan, you are an active participant. In certain plans you may be an
active participant even if you were only with the employer for part of the
year. You should note that if you are married but file a separate tax return,
and you did not live with your spouse at any time during the taxable year, your
spouse's active participation does not affect your ability to make deductible
contributions.
No deduction will be allowed under (1) or (2) above for any contribution
which is made for the taxable year during which you attain age 70 1/2 or for any
subsequent year. You are permitted to contribute and deduct up to $4,000 for
contributions to your IRA and a spousal IRA, subject to the provisions of (1)
and (2) above. However, in no event shall the contribution to either IRA exceed
$2,000. It should be noted that if both you and your spouse work, each may
contribute up to $2,000 of compensation (earned income) to his or her own IRA.
If your employer maintains a SEP, your employer may contribute to your IRA up
to the lesser of 15% of your compensation from such employer or $30,000.
Since SEP contributions are excluded from your gross income, such contributions
are not deductible for federal income tax purposes.
If contributions to your IRA are deductible as outlined above, you may claim
such deduction even if you do not itemize your deductions on your federal income
tax return. You must make contributions to your IRA during the taxable year for
which you claim the deduction or by the deadline for filing your federal income
tax return for such year (without regard to any filing deadline extension). For
example, if you are a calendar-year taxpayer, you must make contributions no
later than April 15th in order to take a deduction for the previous year.
If any portion of a contribution to your IRA is nondeductible as outlined
above, you must so designate on your federal income tax return, as required
under section 408(o)(4) of the Code and file From 8606 with your tax return.
E. FEDERAL INCOME TAX STATUS OF THE IRA AND CERTAIN DISTRIBUTIONS.
(1) IN GENERAL. Except as described below, your IRA and earnings thereon are
exempt from federal income tax until distributions are made from the IRA.
(2) TAX TREATMENT OF DISTRIBUTIONS. If all contributions to your IRA (other
than rollover contributions) have been deductible for federal income tax
purposes then all distributions from your IRA will be taxable as ordinary
income. However, if you have made any nondeductible IRA contributions,
distributions from your IRA will be treated as partially a return of deductible
contributions, if any, (taxable), partially a return of nondeductible
contributions (nontaxable) and partially a distribution of earnings (taxable).
The portion of an IRA distribution which will be excludable from income will be
determined by multiplying the total amount distributed by a fraction, the
numerator of which is the aggregate of all your nondeductible IRA contributions,
and the denominator of which is the aggregate balance of all of your IRAs
(including rollover IRAs and SEPs). For purposes of the foregoing, (a) all of
your IRAs will be treated as a single IRA, (b) all distributions during a
taxable year will be treated as a single distribution and (c) the aggregate
balance of your IRAs will be determined as of the end of the calendar year with
or within which your taxable year ends, after adding back any distributions for
such year.
Distributions from your IRA are not eligible for any special tax treatment
such as five-or ten-year averaging or capital gains treatment.
(3) EXCESS CONTRIBUTIONS. If contributions to your IRA are in excess of the
limits stated in Part D above, you will be assessed a 6% nondeductible excise
tax on such excess amounts. This tax is payable for each year the excess is
permitted to remain in your IRA. However, if the excess contribution has not
been taken as a deduction, and if the excess and all earnings thereon are
returned before the due date for filing your income tax return for the year in
which the excess contribution was made, the 6% excise tax will not be assessed.
The earnings on such excess contribution that are returned to you will be
taxable as ordinary income and will be deemed to have been earned and taxable in
the tax year during which the excess contribution was made. In addition, if you
are not disabled or have not reached age 59 1/2, the earnings will be subject to
the 10% premature withdrawal penalty discussed below. The 6% excess contribution
tax may be eliminated for future tax years by withdrawing the excess
contribution from your IRA before the due date for filing your tax return for
that year or by under-contributing for a subsequent year by an amount equal to
the excess contribution. If the total contributions for the year to your IRA are
$2,000 or less, and there are no employer contributions for the year, you may
withdraw any excess contributions after the due date for filing your tax return,
including extensions, and not include the amount withdrawn in your gross income.
This applies only to the part of the excess that you did not take a deduction
for. It is not necessary to withdraw the interest or other income earned on the
excess. You will have to pay the 6% tax on the excess amount for each year the
excess contribution was in the IRA.
If the contributions to your IRA for any year are more than $2,000, you must
include in your gross income any excess over $2,000, unless it is an excess
rollover contribution attributable to erroneous information. You may also have
to pay a 10% tax on premature distributions on the amount you withdraw, unless
you are age 59 1/2 or disabled.
If less than the maximum amount of contributions has been made in years
before the year you make an excess contribution, the prior year's difference may
not be used to reduce the excess contribution. Qualified rollover contributions,
as described in Part F below, are not considered excess contributions.
(4) PREMATURE DISTRIBUTIONS. In addition to any regular income tax that may
be payable, distributions from your IRA that occur before you reach age 59 1/2
(except in the event of disability, death, rollover, medical expenses in excess
of 7.5% of adjusted gross income, medical insurance premiums in the event of
unemployment or as a qualifying distribution of an excess contribution), will be
assessed a 10% additional income tax on the amount distributed which is
includible in your gross income. However, the additional 10% income tax will not
be imposed if the distribution is one of a scheduled series of level payments to
be made over your life or life expectancy or over the joint lives or joint life
expectancies of you and your beneficiary. Amounts treated as distributions from
the IRA because of pledging the IRA as described below, or prohibited
transactions as described below, will also be considered premature distributions
if they occur before you reach age 59 1/2 (assuming you are not disabled).
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(5) PLEDGING THE IRA. If you pledge your IRA as security for a loan, the
portion so pledged is treated as being distributed to you in that year. In
addition
to any regular income tax that may be payable on the distribution, the premature
distribution penalty as discussed above may also be applicable.
(6) PROHIBITED TRANSACTIONS. If you or your beneficiary engages in a
prohibited transaction, as described in section 4975 of the Code with respect to
your IRA, your IRA will lose its exemption from tax and you must include the
fair market value of your IRA in your gross income for the year during which the
prohibited transaction occurred. In addition to any regular income tax that may
be payable, the premature distribution
penalty as discussed above may also be applicable.
(7) INSUFFICIENT OR LATE DISTRIBUTIONS. In addition to the regular income tax
that may be payable on distributions from your IRA, you will be assessed
penalties on certain accumulations if funds in your IRA are not distributed in
accordance with the rules described in Part B above. If the amount distributed
from your IRA during the year is less than the minimum amount required to be
distributed during such year, an excise tax will be imposed. The tax imposed is
equal to 50% of the amount by which the minimum required distribution exceeds
the amount actually distributed during the year.
(8) ESTATE AND GIFT TAX STATUS OF DISTRIBUTIONS. Generally, for estate tax
purposes, the value of your IRA will be fully includible in your gross estate in
the event of your death. For gift tax purposes, beneficiary designations will
not be treated as gifts. Also, contributions to an IRA on behalf of a spouse who
has no earned income or elects to be treated as having no earned income will
qualify for the annual present interest gift exclusion. You should consult your
tax advisor with respect to the application of community property laws on estate
and gift tax issues relating to your IRA.
(9) INHERITED IRAS. Your IRA will be treated as an inherited IRA if, upon
your death, it is acquired by a beneficiary other than your surviving spouse. An
inherited IRA may not be rolled over to a qualified plan or to another IRA, nor
may an inherited IRA accept any regular or rollover deposits. Only a beneficiary
who is your surviving spouse will be allowed to roll over the IRA funds into his
or her own IRA.
(10) FEDERAL INCOME TAX WITHHOLDING. The taxable portion of
distributions from your IRA is subject to federal income tax withholding unless
you elect not to have withholding applied. If you elect not to have withholding
applied to taxable distributions from your IRA, or if insufficient federal
income tax is withheld from any distribution, you may be responsible for payment
of estimated taxes, as well as for penalties under the estimated tax rules, if
withholding and estimated tax payments were not sufficient. Additional
information regarding withholding and the necessary election forms will be
provided no later than at the time a distribution is requested.
F. ROLLOVER CONTRIBUTIONS.
A rollover is a tax-free distribution of cash or other assets from one
retirement program to another. There are two kinds of rollover contributions to
an IRA. In one, you contribute amounts distributed to you from one IRA to
another IRA. With the other, you contribute amounts distributed to you from your
employer's qualified plan or 403(b) plan to an IRA. A rollover is an allowable
IRA contribution which is not subject to the limits on regular contributions
discussed in Part D above. However, you may not deduct a rollover contribution
to your IRA on your tax return.
If you receive a distribution from the qualified plan of your employer or
former employer, the distribution must be an "eligible rollover distribution" in
order for you to be able to roll all or part of the distribution over to your
IRA. The portion you contribute to your IRA will not be taxable to you until you
withdraw it from the IRA. Your employer or former employer will give you the
opportunity to roll over the distribution directly from the plan to the IRA. If
you elect, instead, to receive the distribution, you must deposit it into the
IRA within 60 days after you receive it.
An "eligible rollover distribution" is any distribution from a qualified plan
that would be taxable other than (1) a distribution that is one of a series of
periodic payments for an employee's life or over a period of 10 years or more,
(2) a required distribution after you attain age 70 1/2 and (3) certain
corrective distributions.
If the entire amount in your IRA has been contributed in a tax-free rollover
from your employer's or former employer's qualified plan or 403(b) plan, you may
later roll over the IRA to a new employer's plan if such plan permits rollovers.
Your IRA would then serve as a conduit for those assets. However, you may later
roll those IRA funds into a new employer's plan only if you make no further
contributions to that IRA, or commingle the IRA rollover funds with existing IRA
assets.
G. AMENDMENTS.
The Custodian of your IRA may amend the agreements establishing your IRA at
any time. The Custodian will comply with the amendment procedures set forth in
your Custodial Agreement.
H. FINANCIAL DISCLOSURE.
Because the value of assets held in your IRA is subject to market
fluctuation, the value of your IRA can neither be guaranteed nor projected.
There is no assurance of growth in the value of your IRA or guarantee of
investment results. You will, however, be provided with periodic statements of
your IRA, including current market values of investments. Certain fees will be
charged by the Custodian in connection with your IRA.
Such fees are disclosed on the Custodian's fee schedule, a copy of which
has been provided to you. Upon thirty days' prior written notice, the Custodian
may substitute a new fee schedule. Any fees or other expenses incurred in
connection with your IRA will be deducted from your IRA (with liquidation of
Fund Shares, if necessary), or at the Custodian's option, such fees or expenses
may be billed to you directly.
For its services to the various funds, in The AIM Family of
Funds--Registered Trademark--, INVESCO Trust Company receives a custodian fee.
This fee is in addition to fees it receives for acting as Custodian under the
IRA. INVESCO Trust Company and A I M Distributors, Inc. also will receive
additional fees for performing specific services with respect to the various
funds in the AIM Family of Funds. Any such fees will be fully disclosed to you.
Potential investors should obtain a copy of the current Prospectus relating to
the fund(s) selected for investment prior to making an investment. Also, copies
of the Statement of Additional Information relating to such fund(s) will be
provided upon your request to A I M Distributors, Inc.
I. MISCELLANEOUS.
Each year you will be provided a statement(s) of account which will give the
amount of contributions to the IRA, the year to which each contribution relates,
and the total value of the IRA as of the end of the year. Information relating
to contributions and distributions must be reported annually to the Internal
Revenue Service and to you. You must also file Form 5329 (Return for Individual
Retirement Savings Arrangement) with the Internal Revenue Service for each
taxable year during which you are assessed any penalty or tax as discussed in
Part E above.
Your IRA has been approved by the Internal Revenue Service. Such approval is
a determination as to the form of the IRA, and does not represent a
determination of the IRA's merits as an investment.
Further information about IRAs can be obtained from any district office of
the Internal Revenue Service or from the Custodian.
All provisions in this Disclosure Statement are subject to the Code and to
the regulations promulgated thereunder. This Disclosure Statement constitutes a
nontechnical restatement and summary of certain provisions of the Code which may
affect your IRA. This is not a legal document. Your legal rights and obligations
are governed by the federal tax laws and regulations and your Custodial
Agreement and Adoption Agreement with the Custodian.
32
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EXHIBIT 14(b)
SEP AND SARSEP IRA ADOPTION AGREEMENT [AIM LOGO APPEARS HERE]
The undersigned Employer hereby establishes a Simplified Employee Pension Plan
(SEP) and/or a Salary Reduction Simplified Employee Pension Plan (SARSEP) for
the exclusive benefit of Employees who are eligible to participate. The terms of
the Plan are set forth in this Adoption Agreement and the accompanying Plan
Document which is hereby adopted and incorporated herein by reference.
- --------------------------------------------------------------------------------
1. EMPLOYER AND PLAN INFORMATION
Employer's Name
-------------------------------------------------------------
Address
---------------------------------------------------------------------
Tax I.D. Number Telephone Number
---------------------------- --------------
Form of Business:
[ ] Sole Proprietor [ ] Partnership [ ] Corporation
[ ] Electing S Corporation
Name of individual authorized to issue instructions to AIM:
----------------------------------------------------------------------------
Plan Year: Plan Type:
[ ] Calendar year. [ ] SEP IRA only
[ ] Employer's Taxable Year ending on . [ ] SARSEP IRA only
------
[ ] Combined SEP and SARSEP IRA
- --------------------------------------------------------------------------------
2. EFFECTIVE DATES
(a) New Plan: Effective as of .
------------------
(b) Amended and Restated Plan:
(i) Original Plan effective as of .
------------------------
(ii) Amended and Restated Plan effective as of .
----------------------
(c) Elective Deferrals effective as of .
-----------------------
- --------------------------------------------------------------------------------
3. ELIGIBILITY REQUIREMENTS
(a) Age: [ ] No requirement. [ ] Minimum age _____________ (not over 21).
(b) Service:
Employees who have performed services for the Employer during at least
________ (maximum 3) of the immediately preceding 5 Plan Years.
(c) Excluded Classes of Employees (select all applicable options):
[ ] None.
[ ] Employees covered by a collective bargaining agreement under which
retirement plan benefits have been the subject of good faith bargaining.
[ ] Employees whose Compensation as defined at Code Section 414(q)(7)
is less than $400 (as adjusted for inflation) during the Plan Year.
[ ] Non-resident aliens.
- --------------------------------------------------------------------------------
4. EMPLOYER ALLOCATION FORMULA
[ ] (a) Proportionate Allocation described at paragraph 3.3(a) of the SEP
and SARSEP Plan Document, or
[ ] (b) Integrated Allocation described at paragraph 3.3(b) of the Plan
Document. This allocation formula may not be adopted if the Employer
maintains any other plan which is integrated with Social Security.
15
<PAGE>
- --------------------------------------------------------------------------------
5. EMPLOYEE ELECTIVE DEFERRALS (FOR SARSEP ONLY)
% limit ________ (not to exceed 15%). Dollar limit $ _________________(not
to exceed $9,240 as indexed).
- --------------------------------------------------------------------------------
6. CASH BONUS OPTION
An Employee [ ] may [ ] may not defer a bonus.
- --------------------------------------------------------------------------------
7. LIMITATIONS ON USE OF PROTOTYPE
An Employer may adopt this Plan even if such Employer maintains another
qualified defined contribution plan, provided that contributions are limited
in accordance with Code Section 415. An Employer may not participate in this
Plan if the Employer maintains currently or has ever maintained a defined
benefit plan which is now terminated. An Employer who participates in this
Plan and who adopts a qualified defined benefit plan, may no longer
participate in this Plan. Thereafter, such Employer shall be considered to
have an individually drafted plan.
- --------------------------------------------------------------------------------
8. TOP-HEAVY MINIMUM CONTRIBUTIONS
The Top-Heavy Plan requirements under Code Section 416 shall be satisfied
by:
[ ] (a) this Plan.
[ ] (b)
----------------------------------------------------------------------
(Name of other qualified plan of the Employer).
- --------------------------------------------------------------------------------
9. SPONSOR CONTACT
Employers should direct questions concerning the language contained in and
qualification of the prototype to:
A I M Distributors, Inc.
Retirement Plans Department
11 Greenway Plaza, Suite 1919
P.O. Box 4333
Houston, Texas 77210-4739
(800) 998-4246 Ext. 5612
In the event that the Sponsor amends, discontinues or abandons this
prototype Plan, notification will be provided to the Employer's address
provided on the first page of this Agreement.
- --------------------------------------------------------------------------------
10. SIGNATURES
(a) This Agreement was signed by the Employer the day of 19 .
------ --------- --
Signed for the Employer by
--------------------------------------------------
Title
-----------------------------------------------------------------------
Signature
-------------------------------------------------------------------
(b) This Agreement was signed by AIM Distributors, Inc. the day of 19 .
---- --- -
Signed for the Sponsor by
--------------------------------------------------
Title
-----------------------------------------------------------------------
Signature
-------------------------------------------------------------------
[AIM LOGO APPEARS HERE] AIM Distributors, Inc. 43101-10/95
16
<PAGE>
SEP AND SARSEP IRA PLAN DOCUMENT [AIM LOGO APPEARS HERE]
AIM Distributors, Inc. hereby establishes a Prototype Plan for use, in
conjunction with an Internal Revenue Service approved IRA, by Employers who wish
to establish a qualified Simplified Employee Pension Plan (SEP) and/or a Salary
Reduction Simplified Employee Pension Plan, sometimes called a SARSEP. If the
Employer executes an Adoption Agreement which is accepted by AIM Distributors,
Inc. and which incorporates this document by reference, the Boston Safe Deposit
& Trust will act as custodian or trustee of the IRA plans established by
Employees eligible to receive contributions under the terms of this Plan. The
salary reduction feature of this prototype SEP and SARSEP may not be used by an
Employer who: 1) at any time during the prior Plan Year had more than 25
Employees who would have been eligible to participate; 2) has any leased
employees within the meaning of Code Section 414(n)(2); 3) is a governmental or
tax-exempt entity; 4) has eligible Employees whose taxable year is not the
calendar year; 5) has less than 50% of the Employees that are eligible to make
Elective Deferrals elect to have Elective Deferrals made to the Plan. No part of
this prototype document may be used if the Employer currently maintains or has
ever maintained a defined benefit pension plan which is now terminated. The
Employer's SARSEP shall contain the following terms and conditions:
ARTICLE I
DEFINITIONS
1.1 ADOPTION AGREEMENT The document attached hereto by which the Employer
elects to establish a qualified Salary Reduction Simplified Employee Pension
Plan under the terms of this Prototype Plan.
1.2 CODE The Internal Revenue Code of 1986, including any amendment thereto.
1.3 COMPENSATION The total wages, salaries, fees (for professional services)
and other taxable remuneration (without regard to whether or not an amount is
paid in cash) paid to a Participant from the Employer which are includible in
the Participant's gross income for the taxable year, as defined within the
meaning of Code Section 415(c)(3). Compensation does not include:
(a) Contributions to this plan or any other plan of deferred
compensation; and
(b) Amounts realized from the exercise of a nonqualified stock option,
or when restricted stock becomes freely transferable or is no longer subject to
a substantial risk of forfeiture; and
(c) Amounts realized from the disposition of stock acquired under a
qualified stock option; and
(d) Amounts received as a pension or annuity.
When applicable to a Self-Employed Individual, Compensation shall mean
Earned Income. With respect to any Plan Year, Compensation will be limited to
the first $150,000 of Compensation [or such higher amount determined in
accordance with Code Section 408(k)(3)(C)]. If a Plan determines Compensation
on a period of time that contains fewer than 12 calendar months, then the annual
compensation limit is an amount equal to the annual compensation limit for the
calendar year in which the Compensation period begins multiplied by the ratio
obtained by dividing the number of full months in the period by 12.
1.4 CUSTODIAN BOSTON SAFE DEPOSIT & TRUST or any successor thereto.
1.5 DEFERRAL PERCENTAGE LIMITATION Deferral Percentage Limitation is the
maximum amount of Elective Deferrals, expressed as a percentage of Compensation,
that can be contributed on behalf of any Highly Compensated Employee for a
particular Plan Year. This limitation equals the product of the average of the
Elective Deferrals (expressed as a percentage of each such Employee's
Compensation) made on behalf of each non-highly compensated employee for the
same Plan Year, multiplied by 1.25.
In calculating this average, the percentage for an eligible non-highly
compensated Employee who chooses not to have Elective Deferrals made on his or
her behalf for a Plan Year, is zero. The determination of the deferral
percentage for any Employee is to be made in accordance with Code Section
408(k)(6) and such other requirements as may be provided by the Secretary of
the Treasury. In addition, for purposes of determining the deferral percentage
of a Highly Compensated Employee, the Elective Deferrals and Compensation of
the Employee will also include the Elective Deferrals and Compensation of
any Family Member. This special rule applies, however, only if the Highly
Compensated Employee owns more than 5% of the Employer or is one of the ten
most highly-paid employees. The Elective Deferrals and Compensation of Family
Members used in this special rule do not count in computing the average of the
deferral percentages of non-highly compensated Employees.
1.6 EARNED INCOME Net earnings from self-employment in the trade or business
with respect to which the Plan is established, determined without regard to
items not included in gross income and the deductions allocable to such items,
provided that personal services of the individual are a material income
producing factor. Earned Income shall be reduced by contributions made by an
Employer to a qualified plan, including this Plan, to the extent deductible
under Code Section 404. Earned Income shall also be reduced by one-half of the
self employed's social security taxes.
1.7 EFFECTIVE DATE The date on which the Employer's Plan commences or an
amendment becomes effective. The Effective Date of the Elective Deferral
provisions shall be designated by the Employer in the Adoption Agreement.
1.8 ELECTIVE DEFERRAL(s) Employer contributions made to the Plan at the
election of the Participant, in lieu of cash Compensation, pursuant to a Salary
Savings Agreement or other deferral mechanism, such as a cash option
contribution. With respect to any taxable year, a Participant's Elective
Deferral is the sum of all Employer contributions made on behalf of such
Participant pursuant to an election to defer under any of the following: a
qualified cash or deferred arrangement as described in Code Section 401(k);
this Plan or any other simplified employee pension cash or deferred
arrangement described in Code Section 402(h)(1)(B); an eligible deferred
compensation plan under Code Section 457; and a plan described in Code Section
501(c)(18). Also included are any Employer contributions made on the behalf of
Participant for the purchase of an annuity contract under Code Section 403(b)
pursuant to a Salary Savings Agreement.
1.9 EMPLOYEE Any person employed by the Employer (including Self-Employed
Individuals and partners), all Employees of a member of an affiliated service
group [as defined in Code Section 414(m)], Employees of a controlled group of
corporations [as defined in Code Section 414(b)], Employees of any incorporated
or unincorporated trade or business which is under common control [as defined in
Code Section 414(c)], and all leased Employees who are not Employees of the
Employer but are required to be treated as Employees of the Employer under
section 414(n), and all Employees required to be aggregated under section
414(o) of the Code. All such Employees shall be treated as employed by a
single Employer.
1.10 EMPLOYER Any corporation, partnership, or proprietorship which adopts
this prototype plan, including any entity which succeeds the Employer and adopts
this Plan.
1.11 FAMILY MEMBER An Employee who is related to a Highly Compensated
Employee as a spouse, or as a lineal ascendant (such as a parent or grandparent)
or descendant (such as a child or grandchild) or spouse of either of those, in
accordance with Code Section 414(q) and the regulations thereunder. Family
membership is only applicable to Highly Compensated Employees who either own
more than 5% of the Employer or are one of the ten most highly compensated
Employees.
1.12 HIGHLY COMPENSATED EMPLOYEE An individual described in Code Section
414(q) who, during the current or preceding Plan Year:
(a) Was a 5% owner as defined in Code Section 416(i)(1)(B)(i);
(b) Received Compensation in excess of $50,000, as adjusted pursuant to
Code Section 415(d), and was in the top-paid group (the top 20% of Employees
ranked by Compensation);
(c) Received Compensation in excess of $75,000, as adjusted pursuant to
Code Section 415(d); or
(d) Was an officer as defined in Code Section 416(i)(1)(A) and received
Compensation in excess of 50% of the dollar limit on annual benefits payable
under Code Section 415 for defined benefit plans.
1.13 INDIVIDUAL RETIREMENT ACCOUNT AIM Distributors, Inc. Individual
Retirement Account which meets the requirements of Code Section 408(a)
established in conjunction with the Employer's Plan (IRA), as the recipient
of the Employer's contributions for the benefit of a participating Employee.
1.14 KEY EMPLOYEE Any Employee or former Employee [and the beneficiaries of
these Employees] who, at any time during the current Plan Year and the four
preceding Plan Years, was:
(a) An officer of the Employer [if the Employee's Compensation exceeds
50% of the limit under Code Section 415(b)(1)(A)];
(b) An owner of one of the ten largest interests in the Employer [if the
Employee's Compensation exceeds 100% of the limit under Code Section
415(c)(1)(A) and the ownership interest exceeds 1/2% of the Employer];
(c) A 5% owner of the Employer as defined in Code Section
416(i)(1)(B)(i)]; or
(d) A 1% owner of the Employer [if the Employee has Compensation in
excess of $150,000].
1.15 OWNER-EMPLOYEE A sole proprietor or partner owning more than 10% of
either the capital or profits interest of the partnership.
17
<PAGE>
1.16 PARTICIPANT Any Employee of the Employer who is participating in the
Plan.
1.17 PLAN The Simplified Employee Pension Plan with salary reduction
provisions as embodied herein.
1.18 PLAN ADMINISTRATOR The Employer is the Plan's named fiduciary and Plan
Administrator.
1.19 PLAN YEAR The 12-consecutive month period designated by the Employer in
the Adoption Agreement.
1.20 SALARY SAVINGS AGREEMENT A written agreement between the Employer and a
participating Employee where the Employee authorizes the Employer to withhold a
specified percentage of his or her Compensation for deposit to the Plan on
behalf of such Employee.
1.21 SARSEP A Simplified Employee Pension Plan (SEP) in which a
participating Employee may make an election through a Salary Savings Agreement
to have a portion of his or her salary deferred and have the Employer contribute
the entire amount of deferred salary to an IRA on his or her behalf.
1.22 SELF-EMPLOYED INDIVIDUAL An individual who has Earned Income for the
taxable year from the trade or business for which the Plan is established
including an individual who would have had Earned Income but for the fact that
the trade or business had no net profits for the taxable year.
1.23 SEP-IRA The Individual Retirement Account established to receive the
Employer's contributions for the benefit of each participating Employee.
1.24 SPONSOR The institution whose name appears on the cover hereof.
1.25 TAXABLE WAGE BASE The maximum amount of earnings which may be
considered wages at the beginning of the Plan Year under Section 230 of the
Social Security Act.
1.26 TAXABLE YEAR The taxable year of an Employer for Federal income tax
purposes.
ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 PARTICIPATION Each Employee of the Employer shall automatically become a
Participant under the Plan as of the first day of the Plan Year during which
such Employee meets the eligibility requirements selected by the Employer in the
Adoption Agreement. Employees shall not be permitted to authorize Elective
Deferrals until the individual satisfies the Plan's eligibility requirements. In
the event an Employee who is not a member of the eligible class of Employees
becomes a member of the eligible class, such Employee shall participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have become a Participant had he or she been in the
eligible class. A former Participant shall again become a Participant
immediately upon returning to the employ of the Employer.
2.2 MAXIMUM AGE The Plan shall not exclude Employees who have attained age
70 1/2, provided such Employees meet the eligibility requirements in the
Adoption Agreement.
2.3 EMPLOYMENT RIGHTS Participation in the Plan shall not confer upon a
Participant any employment rights, nor shall it interfere with the Employer's
right to terminate the employment of any Employee at any time.
2.4 WITHDRAWAL OF CONTRIBUTIONS Participation in the Plan shall not be
terminated, suspended, or in any way affected, if a Participant withdraws all or
any part of his or her IRA. This Plan shall not impose any prohibition on a
Participant's right to make withdrawals from his or her IRA.
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 AMOUNT Prior to the close of each Plan Year, the Employer shall
determine in writing the amount of its contribution for such Plan Year. This is
in addition to any amount contributed pursuant to Salary Savings Agreements with
the Participants. The Employer's contribution shall be discretionary and the
Employer shall be under no obligation to contribute each year. The Employer may
make a contribution even if no Elective Deferrals are contributed for such year.
Contributions to the SEP are deductible by the Employer for the Taxable Year
with or within which the Plan Year of the SEP ends. Contributions made for a
particular Taxable Year and contributed by the due date of the Employer's income
tax return, including extensions, are deemed made in that Taxable Year.
3.2 LIMITATIONS ON ALLOCATIONS The Employer's contribution (including Salary
Savings Agreement amounts) when allocated to eligible Participants for any Plan
Year shall not exceed the lesser of 15% of each Participant's Compensation or
$30,000 [as indexed under Code Section 415]. In addition, the Employer's
contribution shall also bear a uniform relationship to the total Compensation
of each Participant. For purposes of the preceding sentence, the Employer's
contribution to the Old Age, Survivors and Disability Insurance program may be
considered as part of the Employer's contribution. Employer contributions to
the Old Age, Survivors and Disability Insurance Program may not be considered
under this Plan if it is considered under any other plan of the Employer.
3.3 ALLOCATION FORMULAS The Employer's contribution shall be allocated among
eligible Participants in accordance with one of the formulas provided below.
Employees and former Employees employed by the Employer at any time during the
Plan Year, who met the eligibility requirements at any time during the Plan
Year, shall share in the Employer's contribution for such Plan Year, even though
no longer employed. The Employer's contribution shall automatically be allocated
in accordance with paragraph (a) unless paragraph (b) is selected in the
Adoption Agreement.
(a) PROPORTIONATE ALLOCATION The Employer's contribution for each Plan
Year shall be allocated to the IRA of each eligible Employee in the same portion
as such Employee's Compensation [not in excess of $150,000 as adjusted for
inflation under Code Section 401(a)(17)] for such Plan Year bears to all
eligible Employees' Compensation for that year.
(b) INTEGRATED ALLOCATION The Employer's contribution for the Plan Year
shall be allocated to each eligible Participant (using his or her Compensation
earned during the Plan Year) as follows:
(i) First, to the extent contributions are sufficient, all
Participants will receive an allocation equal to 3% of their Compensation.
(ii) Next, any remaining Employer Contributions will be allocated to
Participants who have Compensation in excess of the Taxable Wage Base (excess
Compensation) as in effect at the beginning of the Plan Year. Each such
Participant will receive an allocation in the ratio that his or her excess
Compensation bears to the excess Compensation of all Participants. Participants
may only receive an allocation of 3% of excess Compensation.
(iii) Next, any remaining Employer contributions will be allocated
to all Participants in the ratio that their Compensation plus excess
Compensation bears to the total Compensation plus excess Compensation of all
Participants. Participants may only receive an allocation of up to 2.7% of their
Compensation plus excess Compensation, under this allocation method.
NOTE: If the Plan is not Top-Heavy or if the Top-Heavy minimum contribution or
benefit is provided under another Plan [see Section 8 of the Adoption
Agreement] covering the same Employees, sub-paragraphs (i) and (ii) above may
be disregarded and 5.7% may be substituted for 2.7% where it appears in (iii)
above.
(iv) Next, any remaining Employer contributions will be allocated to
all Participants in the ratio that each Participant's Compensation bears to all
Participants' Compensation.
3.4 RESPONSIBILITY FOR CONTRIBUTIONS The Sponsor shall not be required to
determine if the Employer has made a contribution or if the amount contributed
is in accordance with the Adoption Agreement or the Code. The Employer shall
have sole responsibility in this regard.
ARTICLE IV
EMPLOYEE ELECTIVE DEFERRALS
4.1 ELECTIVE DEFERRAL REQUIREMENTS Elective Deferrals shall only be
permitted for Plan Years in which:
(a) Not less than 50% of the Participants elect to make Elective
Deferrals to the SEP-IRA on their behalf; and
(b) The Employer had no more than 25 Employees at all times during the
prior Plan Year who were eligible to participate in the Plan.
4.2 SALARY SAVINGS AGREEMENT An Employee may elect to have Elective
Deferrals made under this Plan through either a lump sum or continuing Elective
Deferrals, or both, pursuant to his or her Salary Savings Agreement. The amount
of Elective Deferrals may not exceed the percentage or dollar amount specified
in the Employer's Adoption Agreement. Under no circumstances may an Employee's
Elective Deferrals in any calendar year exceed the lesser of:
(a) Fifteen percent of the Employee's Compensation determined without
including the SEP-IRA contributions, (13.0435% of Compensation plus Elective
Deferrals), or
(b) $7,000 as adjusted for inflation at the beginning of such taxable
year. This amount may be reduced if a Participant contributes pre-tax
contributions to qualified plans of this or other Employers.
4.3 TIMING OF ELECTIVE DEFERRALS Elective Deferrals may not be based on
Compensation an Employee has received, or had a right to receive, prior to the
execution of the Employee's Salary Savings Agreement. A Participant may amend
his or her Salary Savings Agreement to increase, decrease or terminate the
Elective Deferral percentage upon written notice to the Employer. Such increase,
decrease or termination shall be effective as soon as reasonably possible, but
in any event within 90 days of written notice. If a Participant terminates his
or her Elective Deferrals, such Participant shall not be permitted to put a new
Salary Savings Agreement into effect until after 90 days. The Employer may also
amend or terminate said agreement on written notice to the Participant to insure
the Plan's qualified status. If a Participant has not authorized the Employer to
withhold at the maximum rate and desires to increase the total withheld for a
Plan Year, such Participant may authorize the Employer to withhold a
supplemental amount up to 100% of his or her Compensation for one or more pay
periods. In no event may the sum of the amounts withheld under the Salary
18
<PAGE>
Savings Agreement plus the supplemental withholding exceed 15% of a
Participant's Compensation for a Plan Year (net of the Elective Deferrals).
The Employer agrees to deposit Elective Deferrals with the Sponsor for credit
to Participant IRAs within 30 days after being withheld from the Participant's
Compensation.
4.4 CASH BONUS OPTION If permitted by the Employer in the Adoption
Agreement, an Employee may base Elective Deferrals on cash bonuses during the
year that, at the Employee's election, may be contributed to the SEP-IRA or
received by the Employee in cash.
4.5 DISALLOWED ELECTIVE DEFERRALS If the 50% requirement in paragraph
4.1(a) is not satisfied as of the end of any Plan Year, all the Elective
Deferrals made by Employees for that Plan Year shall be considered disallowed
Elective Deferrals.
4.6 NOTIFICATION OF DISALLOWED ELECTIVE DEFERRALS The Employer shall notify
each affected Participant, within 2 1/2 months after the end of the Plan Year to
which the disallowed Elective Deferrals relate, that the deferrals are no longer
considered SARSEP contributions. Such notification shall specify the amount of
the disallowed Elective Deferrals and the Participant's calendar year in which
they are includible in income. Additionally, the notice must provide an
explanation of the applicable penalties if the disallowed Elective Deferrals are
not withdrawn in a timely fashion. The notice to each affected Participant shall
state the following:
(a) The amount of the disallowed Elective Deferral;
(b) That the disallowed Elective Deferrals are includible in the
Participant's gross income for the calendar year or years in which the amounts
deferred would have been received by the Participant in cash had she or he not
made the election to defer, and that the income allocable to such disallowed
Elective Deferrals is includible in the Participant's gross income in the year
withdrawn from the SEP-IRA; and
(c) That the Participant must withdraw the disallowed Elective Deferrals
and allocable income from the SEP-IRA by the April 15 following the calendar
year of notification by the Employer. Disallowed Elective Deferrals not
withdrawn by the April 15 following the calendar year of notification will be
subject to the IRA contribution limitations of Code Section 219 and Section 408
and may be considered excess contributions to the Participant's IRA. Disallowed
Elective Deferrals may be subject to the six percent tax on excess
contributions under Code Section 4973. If income allocable to a disallowed
Elective Deferral is not withdrawn by April 15 following the year of
notification by the Employer, the income may be subject to the ten percent tax
on early distributions under Code Section 72(t) when withdrawn.
4.7 REPORTING Disallowed Elective Deferrals are reported for tax purposes in
the same manner as excess SEP contributions.
ARTICLE V
ACCOUNTS OF PARTICIPANTS
5.1 INDIVIDUAL RETIREMENT ACCOUNT Each Employee, upon becoming a Participant
under the Plan, shall establish an IRA with the Sponsor. The Employee or Sponsor
shall furnish an account number to the Employer certifying the existence of such
account.
5.2 DETERMINATION OF DEPOSIT When making a contribution to the Plan, the
Employer shall calculate each Participant's proportionate share of the
Employer's contribution as determined in the Adoption Agreement. The Employer
shall then deliver the contribution to the Sponsor indicating the amount to be
credited to each Participant's SEP-IRA.
5.3 CONTROL OF ACCOUNT All contributions made under the Plan by the Employer
shall be irrevocable. After allocation to a Participant's SEP-IRA, the Employer
shall have no further control of such contribution and the terms of the
Participant's IRA shall be fully effective.
5.4 ALLOCATION OF ELECTIVE DEFERRALS The Employer shall contribute to each
Employee's SEP-IRA the amount of the Elective Deferrals designated in his or her
Salary Savings Agreement.
ARTICLE VI
LIMITATIONS ON CONTRIBUTIONS
6.1 LIMITATIONS ON ELECTIVE DEFERRALS A Participant's Elective Deferrals may
be limited to the extent necessary to satisfy the maximum contribution
limitations under Code Section 415(c)(1)(A) if the Employer maintains any
other SEP or any qualified plan to which contributions are made for such Plan
Year.
6.2 OVERALL LIMITATIONS ON CONTRIBUTIONS In addition to the dollar
limitation of Code Section 415(c)(1)(A) ($30,000 in 1991), contributions to this
Plan, when aggregated with contributions to all other SEPs and contributions
plus forfeitures under other qualified defined contribution plans of the
Employer, generally may not exceed 25% of Compensation for any Employee. If
these limits are exceeded on behalf of any Employee for a particular Plan Year,
that Employee's Elective Deferrals for that year must be reduced to the extent
of the excess.
6.3 LIMITATIONS FOR HIGHLY COMPENSATED EMPLOYEES Elective Deferrals by a
Highly Compensated Employee must satisfy the Deferral Percentage Limitation
under Code Section 408(k)(6) and paragraph 1.4 herein. Amounts in excess of the
Deferral Percentage Limitation will be deemed excess SEP contributions on behalf
of the affected Highly Compensated Employee.
6.4 NOTIFICATION OF EXCESS SEP CONTRIBUTIONS The Employer shall notify each
affected Participant, within 2 1/2 months following the end of the Plan Year to
which the excess SEP contributions relate, of any excess SEP contributions to
the Participant's SEP-IRA for the applicable year. Such notification shall
specify the amount of the excess SEP contributions and the calendar year in
which the contributions are includible in income and must provide an explanation
of applicable penalties if the excess contributions are not withdrawn in a
timely fashion.
6.5 NOTIFICATION REQUIREMENTS The notification to each affected Participant
of excess SEP contributions must specifically state in a manner calculated to be
understood by the average Employee:
(a) The amount of the excess SEP contributions attributable to the
Participant's Elective Deferrals;
(b) The calendar year in which the excess SEP contributions are
includible in gross income; and
(c) That the Participant must withdraw the excess SEP contributions (and
allocable income) from the SEP-IRA by April 15 following the year of
notification by the Employer. Those excess contributions not withdrawn by April
15 following the year of notification will be subject to the IRA contribution
limitations of Code Section 219 and Section 408 for the preceding calendar year
and thus may be considered an excess contribution to the Participant's IRA.
Such excess contributions may be subject to the six percent tax on excess
contributions under Code Section 4973. If income allocable to an excess SEP
contribution is not withdrawn by April 15 following the year of notification by
the Employer, the income may be subject to the ten percent tax on early
distributions under Code Section 72(t) when withdrawn.
6.6 EXCESS SEP CONTRIBUTIONS INCLUDIBLE IN INCOME Excess SEP contributions
are includible in the participating Employee's gross income on the earliest
dates any Elective Deferrals made on behalf of the Employee during the Plan Year
would have been received by the Employee had he or she originally elected to
receive the amounts in cash. However, if the excess SEP contributions (not
including allocable income) total less than $100, then the excess contributions
are includible in the Employee's gross income in the year of notification.
Income allocable to the excess SEP contributions is includible in the year of
withdrawal from the IRA.
6.7 EXCISE TAXES AND PENALTIES If the Employer fails to notify any of the
affected Employees within 2 1/2 months following the end of the Plan Year of an
excess SEP contribution, the Employer must pay a tax equal to 10% of the excess
SEP contribution. If the Employer fails to notify employees by the end of the
Plan Year following the Plan Year in which the excess SEP contributions arose,
the SEP no longer will be considered to meet the requirements of Code Section
408(k)(6) and contributions in the Employee's IRA will be subject to the IRA
contribution limitations and thus may be considered excess contributions to the
Employee's IRA.
6.8 WITHDRAWAL RESTRICTIONS The Employer shall notify each Participant who
makes an Elective Deferral for a Plan Year that, notwithstanding the prohibition
on withdrawal restrictions contained elsewhere in this Plan, any amount
attributable to such Elective Deferrals which is withdrawn or transferred before
the earlier of 2 1/2 months after the end of the particular Plan Year or the
date the Employer notifies its Employees that the Deferral Percentage
Limitations have been calculated, will be includible in income and possibly
subject to an early penalty tax.
ARTICLE VII
TOP-HEAVY RULES
7.1 TOP-HEAVY MINIMUM CONTRIBUTION Each Plan Year for which the Plan is Top
Heavy under Code Section 416, each non-key Employee shall receive an allocation
of Employer contributions equal to the lesser of 3% of Compensation or the
percentage of Compensation allocated to the Key Employee receiving the highest
percentage allocation. The Top-Heavy minimum contribution shall be satisfied
under this Plan unless the Employer designates another plan in the Adoption
Agreement.
7.2 CONTRIBUTIONS COUNTED TOWARDS MINIMUM For purposes of satisfying the
minimum contribution requirement under Code Section 416, only Employer
contributions shall be taken into account. Employee Elective Deferrals shall
not be considered.
7.3 TOP-HEAVY DETERMINATION This Plan is Top-Heavy for a Plan Year if, as of
the last day of the previous Plan Year (or current Plan Year if this is the
first year of the Plan) the total of elective and non-elective contributions
made on behalf of Key Employees for all years this Plan has been in existence
exceeds 60% of such contributions for all Employees who were eligible to
participate. If the Employer maintains (or maintained within the prior five
years) any other SEP or defined contribution plan in which a Key Employee
participates (or participated), the contributions or account balances, whichever
is applicable, must be aggregated with the contributions made to this Plan. The
contributions (and
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<PAGE>
account balances, if applicable) of an Employee who ceases to be a Key Employee
or of an individual who has not been in the employ of the Employer for the
previous five years shall be disregarded. The identification of Key Employees
and the Top-Heavy calculation shall be determined in accordance with Code
Section 416 and the regulations thereunder.
ARTICLE VIII
ADMINISTRATION
8.1 PLAN ADMINISTRATOR The Employer shall be the Plan's named fiduciary and
shall serve as Plan Administrator. As Plan Administrator, the Employer shall:
(a) Carry out the provisions of the Plan including determining
eligibility of Employees, allocating contributions, and interpreting the Plan
when necessary,
(b) Deliver all contributions to the Sponsor showing the amount to be
allocated to each Participant's IRA,
(c) Communicate with Employees regarding their participation and
benefits under the Plan,
(d) Advise Employees in writing of all contributions to their IRAs, and
(e) Perform any other duties required of the Plan Administrator.
8.2 SPONSOR The Sponsor shall be depository for individual IRAs established
by Plan Participants. As depository, the Sponsor shall:
(a) Accept for deposit contributions transmitted by the Employer. The
Sponsor need not verify the amount of the contributions received or the amounts
allocated to individual IRAs provided that no contribution for an individual IRA
exceeds the lesser of $30,000 as indexed or 15% of the individual's Compensation
for the Plan Year, and
(b) Administer each individual IRA in accordance with the provisions of
the Sponsor's IRA document.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 AMENDMENT BY SPONSOR The Sponsor may amend or terminate any or all
provisions of this prototype plan at any time without obtaining the approval or
consent of any Employer or Participant, provided that no amendment shall
authorize or permit any part of an Employer's contribution to be used for or
diverted to purposes other than for the exclusive benefit of Participants. The
Sponsor will inform each adopting Employer of any amendments to or termination
of the prototype SARSEP.
9.2 QUALIFICATION OF PROTOTYPE The Sponsor intends that this Plan will meet
the requirements of Code Section 408(k)(6) and the regulations thereunder as a
qualified Salary Reduction Simplified Employee Pension Plan. Should the
Commissioner of Internal Revenue or any delegate of the Commissioner at any time
determine that the Plan fails to meet the requirements of said Code
Section 408(k)(6), the Sponsor will amend the Plan so as to maintain its
qualified status.
9.3 AMENDMENT BY EMPLOYER The Employer may amend any option elected in the
Adoption Agreement provided that no amendment shall authorize or permit any part
of the Employer's contribution to be used for or diverted to purposes other than
for the exclusive benefit of Participants. If the Employer amends the Adoption
Agreement other than within the available options, the Employer may no longer
participate in this Plan.
9.4 TERMINATION The Employer may terminate its Plan at any time by filing
written notice with the Sponsor. In such event, the Sponsor shall continue to
administer each Participant's IRA as provided under the IRA agreement. The
Sponsor may also terminate the prototype upon written notice to the Employer.
ARTICLE X
GOVERNING LAW
Construction, validity and administration of the prototype plan, and any
Employer Plan as embodied in the prototype document and accompanying Adoption
Agreement, shall be governed by Federal law to the extent applicable and, to the
extent not applicable, by the laws of the State/Commonwealth in which the
principal office of the Sponsor is located.
<TABLE>
<S> <C>
INTERNAL REVENUE SERVICE Department of the Treasury
Prototype SEP with Salary Reduction Feature 002
FFN: 50441601900-002 Case: 9580093 EIN: 74-1894784 Washington, D.C. 20224
Letter Serial No. C410671b
AIM DISTRIBUTORS INC. Person to Contact: Ms. Arrington
11 GREENWAY PLAZA SUITE 1919 Telephone Number: (202) 622-8173
HOUSTON, TEXAS 77046 Refer Reply to: CP:E:EP:T1
Date: 11-13-95
</TABLE>
Dear Applicant:
In our opinion, the amendment to the form of your Simplified Employee Pension
(SEP) arrangement does not adversely affect its acceptability under section
408(k) of the Internal Revenue Code. This SEP arrangement is approved for use
only in conjunction with an Individual Retirement Arrangement (IRA) which meets
the requirements of Code section 408 and has received a favorable opinion
letter, or a model IRA (Forms 5308 and 5305-A).
Employers who adopt this approved plan will be considered to have a retirement
savings program that satisfies the requirements of Code section 408 provided
that it is used in conjunction with an approved IRA. Please provide a copy of
this letter to each adopting employer.
Code section 408(l) and related regulations require that employers who adopt
this SEP arrangement furnish employees in writing certain information about this
SEP arrangement and annual reports of savings program transactions.
Your program may have to be amended to include or revise provisions in order to
comply with future changes in the law or regulations.
If you have any questions concerning IRS processing of this case, call us at the
above telephone number. Please refer to the Letter Serial Number and File Folder
Number shown in the heading of this letter. Please provide those adopting this
plan with your phone number, and advise them to contact your office if they have
any questions about the operation of this plan.
You should keep this letter as a permanent record. Please notify us if you
terminate the term of this plan.
Sincerely yours,
/s/ [ILLEGIBLE]
-----------------------------------------
Chief, Employee Plans Technical Branch 1
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[AIM LOGO APPEARS HERE]
Form 5305-A (Rev. October 1992) Department of the Treasury
Internal Revenue Service
INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
(under Section 408(a) of the Internal Revenue Code)
A I M DISTRIBUTORS, INC. CUSTODIAN AGREEMENT
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified
employee pension plan as described in section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer
contribution to a simplified employee pension plan as described in section
408(k).
ARTICLE II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE III
1. NO PART OF THE CUSTODIAL FUNDS may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. NO PART OF THE CUSTODIAL FUNDS may be invested in collectibles (within
the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3) which provides an exception for certain gold and silver coins and
coins issued under the laws of any state.
ARTICLE IV
1. NOTWITHSTANDING ANY PROVISION of this agreement to the contrary, the
distribution of the Depositor's interest in the custodial account shall be made
in accordance with the following requirements and shall otherwise comply with
section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section 1.401(a)
(9)-2, the provisions of which are incorporated by reference.
2. UNLESS OTHERWISE ELECTED by the time distributions are required to begin
to the Depositor under paragraph 3, or to the surviving spouse under paragraph
4, other than in the case of a life annuity, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the Depositor
and the surviving spouse and shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be recalculated.
3. THE DEPOSITOR'S ENTIRE INTEREST in the custodial account must be, or
begin to be, distributed by the Depositor's required beginning date (April 1
following the calendar year end in which the Depositor reaches age 70 1/2. By
that date, the Depositor may elect, in a manner acceptable to the Custodian, to
have the balance in the custodial account distributed in:
(a) A single-sum payment.
(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last survivor lives of
the Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of the
Depositor and his or her designated beneficiary.
4. IF THE DEPOSITOR DIES before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of his or her
interest has begun, distribution must continue to be made in accordance with
paragraph 3.
(b) If the Depositor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the Depositor or,
if the Depositor has not so elected, at the election of the beneficiary or
beneficiaries, either
(i) Be distributed by the December 31 of the year containing the
fifth anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over
the life expectancy of the designated beneficiary or beneficiaries starting by
December 31, of the year following the year of the Depositor's death. If,
however, the beneficiary is the Depositor's surviving spouse, then this
distribution is not required to begin before December 31 of the year in which
the Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has irrevocably
commenced distributions are treated as having begun on the Depositor's required
beginning date, even though payments may actually have been made before that
date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in the
account.
5. IN THE CASE OF DISTRIBUTION over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual payment for
each year, divide the Depositor's entire interest in the Custodial account as of
the close of business on December 31 of the preceding year by the life
expectancy of the Depositor (or the joint life and last survivor expectancy of
the Depositor and the Depositor's designated beneficiary, or the life expectancy
of the designated beneficiary, whichever applies). In the case of distributions
under paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and designated
beneficiary as of their birthdays in the year the Depositor reaches age 70 1/2.
In the case of distribution in accordance with paragraph 4(b)(ii), determine
life expectancy using the attained age of the designated beneficiary as of the
beneficiary's birthday in the year distributions are required to commence.
6. THE OWNER OF TWO OR MORE INDIVIDUAL RETIREMENT ACCOUNTS may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524 to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
ARTICLE V
1. THE DEPOSITOR AGREES to provide the Custodian with information necessary
for the Custodian to prepare any reports required under section 408(i) and
Regulations sections 1.408-5 and 1.408.6.
2. THE CUSTODIAN AGREES to submit reports to the Internal Revenue Service
and the Depositor prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and the related
regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear below.
ARTICLE VIII
1. PURSUANT TO THE TERMS of this A I M Distributors, Inc. Individual
Retirement Custodial Account Agreement and the related IRA Account Application
(referred to herein as the "IRA Adoption Agreement") (such Agreements being
collectively referred to herein as the "Agreement"), the Depositor directs the
Custodian to invest all custodial account funds after deductions for sales
charges and Custodian fees, in shares issued by the investment company or
companies selected by the Depositor on the related IRA Adoption Agreement, until
the Depositor hereafter gives the Custodian contrary instructions pursuant to
Article XIII below. The investment companies from which the Depositor may select
are enumerated on the applicable list prepared by A I M Distributors, Inc. (the
21
<PAGE>
"Distributor"), a copy of which accompanies the Adoption Agreement. Such
investment companies are part of "The AIM Family of Funds," which are managed
or advised by subsidiaries of A I M Management Group Inc., and any such
investment company will hereafter be referred to as "Investment Company."
2. (i) ANNUAL CASH CONTRIBUTIONS:
The Depositor may make annual cash contributions to the account within the
limits specified in Article I. All contributions shall be hand delivered or
mailed to the Custodian by the Depositor, with an indication of the taxable year
to which such contribution relates. Additionally, if the Depositor's employer
maintains a qualified simplified employee pension (SEP), such employer may
contribute on behalf of the Depositor, the lesser of 15% of the Depositor's
compensation from such employer or $30,000.
(ii) ROLLOVER CONTRIBUTIONS:
In addition to any annual contributions referred to in Paragraph (i) above,
but subject to this Paragraph (ii), the Depositor may contribute to the account,
at any time, a rollover contribution of such cash or other property as shall
constitute a rollover amount or contribution under section 402(a)(5), 402(a)(7),
403(a)(4), 403(b)(8) or 408(d)(3) of the Code. The Custodian will accept for the
account all rollover contributions which consist of cash, and it may, but shall
be under no obligation to, accept any other rollover contribution. In the case
of rollover contributions composed of assets other than cash, the prospective
Depositor shall provide the Custodian with a description of such assets and such
other information as the Custodian may reasonably require. The Custodian may
accept all or any part of such a rollover contribution if it determines that the
assets of which such contribution consists are either in a medium proper for
investment hereunder or that the assets can be promptly liquidated for cash.
The Depositor warrants that any rollover contribution to the account
consists of cash, the same property received in the distribution or, in the case
of amounts distributed to the Depositor from a qualified employer's plan or
annuity, the proceeds from the sale of the same property received in the
distribution. The Depositor also warrants that in the case of a rollover into
the account of amounts distributed to the Depositor from a qualified employer's
plan or annuity, only amounts in excess of the amounts considered to be the
Depositor's employee contributions included in such distribution constitute the
contribution to this account. Additionally, the Depositor affirms that the
contribution to the account does not consist of amounts received from an
inherited individual retirement account or annuity. An individual retirement
account or annuity shall be treated as inherited if it was acquired by reason of
the death of an individual other than the Depositor's spouse. The Depositor also
affirms that in the case of a rollover into the account of amounts distributed
from an individual retirement account or annuity or retirement bond, he has not
during the one year period ending on the date of the distribution received any
other distribution from an individual retirement account or annuity or
retirement bond which constituted a rollover contribution (as described in
section 408(d)(3) of the Code).
3. THE DEPOSITOR SHALL BE FULLY AND SOLELY RESPONSIBLE for all taxes,
interest and penalties which might accrue or be assessed by reason of any excess
deposit, and interest, if any, earned thereon. Any contributions made by or on
behalf of the Depositor in respect of a taxable year of the Depositor shall be
made by or on behalf of the Depositor to the Custodian for deposit in the
custodial account within the time period for claiming any income tax deduction
for such taxable year. It shall be the sole responsibility of the Depositor to
determine the amount of the contributions made hereunder. The Depositor shall
execute such forms as the Custodian may require in connection with any
contribution hereunder.
ARTICLE IX
1. THE CUSTODIAN SHALL from time to time, subject to the provisions of
Articles IV and V, make distributions out of the custodial account to the
Depositor, in such manner and amounts as may be specified in written
instructions of the Depositor. All such instructions shall be deemed to
constitute a certification by the Depositor that the distribution so directed is
one that the Depositor is permitted to receive. A declaration of the Depositor's
intention as to the disposition of an amount distributed pursuant to Article V
hereof shall be in writing and given to the Custodian. The Custodian shall have
no liability with respect to any contribution to the custodial account, any
investment of assets in the custodial account or any distribution therefrom
pursuant to instructions received from the Depositor or pursuant to this
Agreement, or for any consequences to the Depositor arising from such
contributions, investments or distributions including, but not limited to,
excise and other taxes and penalties which might accrue or be assessed by reason
thereof, nor shall the Custodian be under any duty to make any inquiry or
investigation with respect thereto.
2. IF THE DEPOSITOR IS DISABLED (as defined in Section 72(m) of the Code),
all or a portion of the balance in the custodial account may be distributed to
him/her as soon as practicable after the Custodian receives written notice of
the Depositor's disability and a written request for distribution. The Custodian
may require such proof of disability as it deems necessary prior to the time
that amounts are distributed to the Depositor due to such disability.
3. THE DEPOSITOR SHALL BE fully and solely responsible for all taxes and
penalties which might accrue or be assessed for having failed to make the annual
minimum withdrawal required in any year.
ARTICLE X
A Depositor shall have the right to designate a beneficiary or beneficiaries
to receive any amounts remaining in his account in the event of his death. Any
prior beneficiary designation may be changed or revoked at any time by a
Depositor by written designation signed by the Depositor on a form acceptable
to, and filed with, the Custodian; provided, however, that such designation, or
change or revocation of a prior designation shall not become effective until it
has been received by the Custodian, nor shall it be effective unless received by
the Custodian no later than thirty days before the death of the Depositor, and
provided further that the last such designation of beneficiary or change or
revocation of beneficiary executed by the Depositor, if received by the
Custodian within the time specified, shall control. Unless otherwise provided in
the beneficiary designation, amounts payable by reason of the Depositor's death
will be paid in equal shares only to the primary beneficiary or beneficiaries
who survive the Depositor, or, if no primary beneficiary survives the Depositor,
to the contingent beneficiary or beneficiaries who survive the Depositor. If the
Depositor had not, by the date of his death, properly designated a beneficiary
in accordance with the preceding sentences, or if no designated beneficiary
survives the Depositor, then the Depositor's beneficiary shall be the
Depositor's surviving spouse, or if there is no surviving spouse, the
Depositor's estate.
ARTICLE XI
1. ANY ADMINISTRATIVE OR OTHER FEES of the Custodian and its agents for
performing duties pursuant to this Agreement shall be in such amount as shall be
established from time to time. The Depositor agrees to pay the Custodian the
fees specified in its current fee schedule and authorizes the Custodian to
charge the Depositor's custodian account for the amount of such fees.
2. UPON THIRTY DAYS' PRIOR WRITTEN NOTICE, the Custodian may substitute a
new fee schedule. The Custodian's fees, any income, gift, estate and inheritance
taxes and other taxes of any kind whatsoever, including transfer taxes incurred
in connection with the investment or reinvestment of the assets of the custodial
account, that may be levied or assessed in respect of such assets, and all other
administrative expenses incurred by the Custodian in the performance of its
duties including fees for legal services rendered to the Custodian, may be
charged to the custodial account with the right to liquidate Investment Company
shares for this purpose, or at the Custodian's option, shall be billed to the
Depositor directly.
ARTICLE XII
1. THIS AGREEMENT SHALL take effect only when accepted and signed by the
Custodian. As directed, the Custodian shall then open and maintain a separate
custodial account for Depositor and invest the initial contribution hereunder in
shares of the Investment Company. Where the IRA Adoption Agreement is checked
for spousal accounts, separate custodial accounts will be opened and maintained
in each spouse's name. The amounts specified in the IRA Adoption Agreement shall
be credited to each spouse's separate custodial account except that no more than
$2,000 shall be credited to either custodial account.
2. THE CUSTODIAN SHALL invest subsequent contributions as directed. If any
such written instructions are not received as required however, or if received,
are in the opinion of the Custodian unclear, or if the accompanying contribution
exceeds $2,000 for the Depositor and/or $2,000 for the Depositor's spouse, the
Custodian may hold or return all or a portion of the contribution uninvested
without liability for loss of income or appreciation, and without liability for
interest, pending receipt of written instructions or clarification.
3. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS, less charges, received on
Investment Company shares held in the custodial account shall (unless received
in additional such shares) be reinvested in shares of the Investment Company,
which shall be credited to the custodial account. If any distribution on such
shares may be received at the election of the Depositor in additional such
shares or in cash or other property, the Custodian shall elect to receive it in
additional Investment Company shares.
4. ALL INVESTMENT COMPANY SHARES ACQUIRED by the Custodian hereunder shall
be registered in the name of the Custodian (with or without identifying the
Depositor) or of its nominees. The Custodian shall deliver, or cause to be
executed and delivered, to the Depositor all notices, prospectuses, financial
statements, proxies and proxy solicitation materials relating to such Investment
Company shares held in the custodial account. The Custodian shall not vote any
Investment Company shares except in accordance with the written instructions
received from the Depositor.
ARTICLE XIII
1. THE CUSTODIAN SHALL keep adequate records of transactions it is required
to perform hereunder. Not later than six months after the close of each calendar
year or after the Custodian's registration or removal pursuant to Article XV
below,
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the Custodian shall render to the Depositor or the Depositor's legal
representative a written report or reports reflecting the transactions effected
by it during such period and the assets and liabilities of the custodial account
at the close of the period. Sixty days after rendering such report(s), the
Custodian shall (to the extent permitted by law) be forever released and
discharged from all liability and accountability to anyone with respect to its
acts and transactions shown in or reflected by such report(s), except with
respect to those as to which the Depositor or the Depositor's legal
representative shall have filed written objections with the Custodian within the
latter such sixty-day period.
2. THE CUSTODIAN SHALL receive and invest contributions as directed by the
Depositor, hold and distribute such investments, and keep adequate records and
reports thereon, all in accordance with this Agreement. The parties do not
intend to confer any other fiduciary duties of the Custodian, and none shall be
implied. The Custodian shall not be liable (and assumes no responsibility) for
the collection of contributions, the deductibility or propriety of any
contribution under this Agreement, or the purposes or propriety of any
distribution from the account, which matters are the responsibility of the
Depositor or the Depositor's legal representative.
3. THE DEPOSITOR, to the extent permitted by law, shall always fully
indemnify the Custodian and save it harmless from any and all liability
whatsoever which may arise in connection with this Agreement and matters which
it contemplates, except that which arises due to the Custodian's negligence and
willful misconduct. The Custodian shall not be obligated or expected to commence
or defend any legal action or preceding in connection with this Agreement or
such matters unless agreed upon by the Custodian and Depositor or said legal
representative, and unless fully indemnified for so doing to the Custodian's
satisfaction.
4. THE CUSTODIAN MAY conclusively rely upon and shall be protected in acting
upon any written order from the Depositor or the Depositor's legal
representative or any other notice, request, consent, certificate or other
instruments or paper believed by it to be genuine and to have been properly
executed, and as long as it acts in good faith in taking or omitting to take any
other action in reliance thereon.
ARTICLE XIV
1. THE CUSTODIAN MAY resign at any time upon thirty days' notice in writing
to the Depositor, and may be removed by the Depositor at any time upon thirty
days' notice in writing to the Custodian. Upon such resignation or removal, the
Depositor shall appoint a successor custodian to serve under this Agreement.
Upon receipt by the Custodian of written acceptance of such appointment by the
successor custodian, the Custodian shall transfer to such successor the assets
of the custodial account and all necessary records (or copies thereof)
pertaining thereto, provided that (at the Custodian's request) any successor
custodian shall agree not to dispose of any such records without the Custodian's
consent. The Custodian is authorized, however, to reserve such assets as it may
deem advisable for payment of any other liabilities constituting a charge on or
against the assets of the custodial account or on or against the Custodian, with
any balance of such reserve remaining after the payment of all such items to be
paid over to the successor custodian.
2. THE CUSTODIAN SHALL NOT be liable for the acts or omissions of such
successor custodian.
3. THE CUSTODIAN, AND EVERY SUCCESSOR CUSTODIAN appointed to serve under
this Agreement, must be a bank (as defined in Section 408(n) of the Code) or
such other person who qualifies with the Internal Revenue Service to serve in
the manner prescribed by Code section 408(a)(2) and satisfies the Custodian,
upon request, as to such qualification.
4. AFTER THE CUSTODIAN HAS transferred the custodial account assets
(including any reserve balance as contemplated above) to the successor
custodian, the Custodian shall be relieved of all further liability with respect
to this Agreement, the custodial account and the assets thereof.
ARTICLE XV
1. THE CUSTODIAN SHALL terminate the custodial account and pay the proceeds
of the account to the depositor if within thirty days after the resignation or
removal of the Custodian pursuant to Article XV above, the Depositor has not
appointed a successor custodian which has accepted such appointment unless
within that time the Distributor appoints such successor and gives written
notice thereof to the Depositor and the Custodian. The Distributor shall have
the right, but not the duty, to appoint such a successor. Termination of the
custodial account shall be effected by distributing all of the assets therein in
cash or in kind to the Depositor in a lump sum, subject to the Custodian's right
to reserve funds as provided in said Article XV.
2. UPON TERMINATION of the custodial account in any manner provided for in
this Article XVI, this Agreement shall terminate and have no further force and
effect, and the Custodian shall be relieved from all further liability with
respect to this Agreement, the custodial account and all assets thereof so
distributed.
ARTICLE XVI
1. ANY NOTICE FROM THE CUSTODIAN TO THE DEPOSITOR provided for in this
Agreement shall be effective when mailed if sent by first class mail to the
Depositor at the Depositor's last known address as shown on the Custodian's
records. Any notice required or permitted to be given to the Custodian, shall
become effective upon actual receipt by the Custodian at such address as the
Custodian shall provide the Depositor from time to time in writing.
2. THIS AGREEMENT is accepted by the Custodian and shall be construed and
administered in accordance with the laws of The Commonwealth of Massachusetts.
The Custodian and the Depositor hereby waive and agree to waive right to trial
by jury in an action or proceeding instituted in respect to this custodial
account. The Depositor further agrees that the venue of any litigation between
him and the Custodian with respect to the custodial account shall be in the
County of Suffolk, The Commonwealth of Massachusetts.
3. THIS AGREEMENT is intended to qualify under section 408 of the Code as an
Individual Retirement Account and to entitle the Depositor to any retirement
savings deduction which he may qualify for under section 219 of the Code, and if
any provision hereof is subject to more than one interpretation or any term used
herein is subject to more than one construction, such ambiguity shall be
resolved in favor of that interpretation or construction which is consistent
with that intent.
4. ALL PROVISIONS IN THIS AGREEMENT ARE subject to the Code and to
regulations promulgated thereunder. In the event that any one or more of the
provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement.
5. THE CUSTODIAN SHALL have no duties whatsoever except such duties as it
specifically agrees to in writing, and no implied covenants or obligations shall
be read into this Agreement against the Custodian. The Custodian shall not be
liable under this Agreement, except for its own bad faith, gross negligence or
willful misconduct.
6. NO INTEREST, RIGHT OR CLAIM IN OR TO ANY PART of the custodial account or
any payment therefrom shall be assignable, transferable, or subject to sale,
mortgage, pledge, hypothecation, communication, anticipation, garnishment,
attachment, execution, or levy of any kind and the Custodian shall not recognize
any attempt to assign, transfer, sell, mortgage, pledge, hypothecate, commute or
anticipate the same, except as required by law.
7. THE DEPOSITOR HEREBY DELEGATES to the Custodian the power to amend this
Agreement from time to time as it deems appropriate, and hereby consents to all
such amendments, provided, however, that all such amendments are in compliance
with the provisions of the Code and the regulations promulgated thereunder. All
such amendments shall be effective as of the date specified in a written notice
of amendment which will be sent to the Depositor.
INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE OF FORM
This model custodial account agreement may be used by an individual who
wishes to adopt an individual retirement account under section 408(a). When
fully executed by the Depositor and the Custodian not later than the time
prescribed by law for filing the Federal income tax return for the Depositor's
tax year (not including any extensions thereof), a Depositor will have an
individual retirement account (IRA) custodial account which meets the
requirements of section 408(a). This account must be created in the United
States for the exclusive benefit of the Depositor or his/her beneficiaries.
DEFINITIONS
CUSTODIAN. -- The Custodian must be a bank or savings and loan association,
as defined in section 408(n), or other person who has the approval of the
Internal Revenue Service to act as custodian.
DEPOSITOR. -- The Depositor is the person who establishes the custodial
account.
IRA FOR NON-WORKING SPOUSES
Contributions to an IRA custodial account for a non-working spouse must be
made to a separate IRA custodial account established by the non-working spouse.
This form may be used to establish the IRA custodial account for the
non-working spouse.
An employee's social security number will serve as the identification number
of his or her individual retirement account. An employer identification number
is only required for each participant-directed individual retirement account. An
employer identification number is required for a common fund created for
individual retirement accounts.
For more information, obtain a copy of the required disclosure statement
from your custodian or get Publication 590, Individual Retirement Arrangements.
(IRAs).
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SPECIFIC INSTRUCTIONS
ARTICLE IV -- Distribution made under this Article may be made in a single
sum, periodic payment, or a combination of both. The distribution option should
be reviewed in the year the Depositor reaches age 70 1/2 to make sure the
requirements of section 408(a)(6) have been met.
ARTICLE IX -- This article and any that follow it may incorporate additional
provisions that are agreed upon by the Depositor and the Custodian to complete
the agreement. These may include, for example: definitions, investment powers,
voting rights, exculpatory provisions, amendment and termination, removal of
Custodian, Custodian's fees, state law requirements, beginning date of
distributions, accepting only cash, treatment of excess contributions,
prohibited transactions with the Depositor, etc. Use additional pages if
necessary and attach them to this form.
Note: This form may be reproduced and reduced in size for adoption to
passbook or card purposes.
THE AIM FAMILY OF FUNDS --Registered Trademark--
INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
DISCLOSURE STATEMENT
Under applicable federal regulations, a custodian of an individual
retirement account is required to furnish each depositor who has established or
is establishing an individual retirement account with a statement which
discloses certain information regarding the account. Boston Safe Deposit and
Trust Company (hereinafter referred to as the "Custodian") is providing this
Disclosure Statement to you in accordance with that requirement, and this
Disclosure Statement contains general information about the The AIM Family of
Funds --Registered Trademark-- Individual Retirement Custodial Account
(hereinafter referred to as "IRA"). This Disclosure Statement should be reviewed
in conjunction with both the Individual Retirement Custodial Account agreement
(From 5305-A and any attachments thereto, hereinafter referred to as the
"Custodial Agreement") and the Adoption Agreement for your IRA. You should
review this Disclosure Statement and the IRA documents with your attorney or
tax advisor. The Custodian cannot give tax advice or determine whether or not
the IRA is appropriate for you.
A. SEVEN DAY RIGHT TO REVOKE YOUR IRA.
You may revoke your IRA at any time within seven business days after the
date the IRA is established, by giving proper notice. For purposes of
revocation, it will be assumed that you received the Disclosure Statement no
later than the date of your check with which you opened your IRA. Written notice
must be hand delivered or sent by first class mail, in which case, the
revocation will be effective as of the date the notice is postmarked (or if sent
by certified or registered mail, the date of certification or registration).
Notice of revocation should be made to: A I M Distributors, Inc., Eleven
Greenway Plaza, Suite 1919, P.O. Box 4739, Houston, Texas 77210-4739, Attention:
Shareholder Services Department, area code (800) 959-4246. If you revoke your
IRA, you are entitled to a refund of your entire contribution to the IRA,
without adjustment for such items as sales commissions, administrative expenses
or fluctuation in market value. If you do not revoke within seven business days
after the establishment of the IRA, you will be deemed to have accepted the
terms and conditions of the IRA and cannot later revoke the IRA without certain
potential penalties.
B. STATUTORY REQUIREMENTS.
An IRA is a trust or custodial account created or organized in the United
States for your exclusive benefit or that of your beneficiaries. It must be
created by a written governing instrument that meets the following requirements:
(1) THE TRUSTEE OR CUSTODIAN MUST BE A BANK, federally insured credit union,
savings and loan association or another person eligible to act as trustee or
custodian;
(2) EXCEPT FOR ROLLOVER CONTRIBUTIONS (as described in Part F below), no
contribution will be accepted unless it is in cash or cash equivalent,
including, but not by way of limitation, personal checks, cashier's checks, and
wire transfers;
(3) EXCEPT FOR ROLLOVERS, simplified employee pension ("SEP") contributions,
and spousal IRA contributions described below, contributions of more than $2,000
for any tax year may not be made;
(4) YOU WILL HAVE A NONFORFEITABLE INTEREST IN THE ACCOUNT;
(5) NO PART OF THE TRUST OR CUSTODIAL FUNDS will be invested in life
insurance contracts, nor may the assets be commingled with other property except
in a common trust fund or common investment fund. Furthermore, as provided in
section 408(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
your IRA may not be invested in "collectibles," such as art works, antiques,
metals, gems, stamps, coins (with an exception for certain U.S.-minted gold and
silver coins), and certain other types of tangible personal property. An
investment in a collectible would be treated as a distribution from your IRA
which would be includible in your gross income, and, if you had not attained the
age of 59 1/2, the distribution would also be subject to the premature
distribution penalty as discussed in Part E(4) below;
(6) YOUR ENTIRE INTEREST IN THE ACCOUNT MUST BE, or begin to be, distributed
on or before April 1 of the calendar year following the calendar year in which
you reach age 70 1/2. The distribution may be made in a single sum, or you may
receive periodic distributions, so long as your entire interest is distributed
in equal or substantially equal payments over any of the following periods:
(a) your life;
(b) the lives of you and your designated beneficiary;
(c) a period certain not extending beyond your life expectancy;
(d) a period certain not extending beyond the life expectancy of you and
your designated beneficiary.
If the distributions from your IRA are to be made over one of the foregoing
periods, the amount distributed each year must meet the minimum distribution
requirements set forth in your IRA Custodial Agreement, or you will incur a
penalty as described in Part E(8) below;
(7) IF YOU DIE AFTER DISTRIBUTIONS HAVE commenced but before your entire
interest has been distributed to you, payments must continue at least as rapidly
as under the method of distribution in effect, at your death. If you die before
distributions have commenced, generally your entire interest must be distributed
within five years of your death. However, if your interest is payable to a
designated beneficiary, payments may be made over the life or a period not
exceeding the life expectancy of the beneficiary; provided, however, that such
payments must commence within one year of your death unless your designated
beneficiary is your surviving spouse, in which case payments need not commence
until the date on which you would have attained age 70 1/2. You should advise
the Custodian as to your beneficiary and the method of distribution desired.
C. INVESTMENT OF YOUR IRA.
Under the terms of the Custodial Agreement, your contributions will be
invested by the Custodian in full and fractional shares of the investment
company or companies that you select. As provided in the Custodial Agreement,
you may only invest your IRA Funds in shares of investment companies which are
part of "The AIM Family of Funds --Registered Trademark--," which are managed
or advised by subsidiaries of A I M Management Group Inc. You will be provided
with a list of the investment companies from which you may choose to invest.
Subject to the foregoing and to any additional restrictions described in the
Custodial Agreement, you have complete control over the investment of your IRA
Funds. The Custodian will not provide any form of investment advice or make
investment recommendations of any type, so you will make all investment
decisions on the basis of information you obtain from other sources. When you
make a decision on how you wish to invest Funds held in your IRA, you should
provide the Custodian with specific instructions, detailing your investment
decision so that the Custodian can effectuate such investments as provided in
your IRA Custodial Agreement. If you fail to direct the Custodian as to the
Investment of all or any portion of your IRA account, the Custodian shall hold
such uninvested amount in your account and shall incur no liability for
interest or earnings thereon. All dividends and capital gain distributions
received on shares of an investment company held in your IRA will be reinvested
in shares of that investment company, if available, which shall be credited to
the Custodian account. Detailed information about the shares of the AIM fund(s)
you select must be furnished to you in the form of prospectuses governed by
rules of the Securities and Exchange Commission.
D. LIMITATIONS AND RESTRICTIONS ON IRA CONTRIBUTIONS AND DEDUCTIONS.
Except in the case of rollover contributions (see Part F below), generally
you may contribute up to the lesser of $2,000 or 100% of your compensation
(earned income) to your IRA for any taxable year. A non-working spouse may
contribute up to $2,000 to a separate IRA.
Section 219 of the Code contains special provisions governing whether
amounts contributed to your IRA will be deductible from gross income for federal
income tax purposes. To the extent you are not eligible or elect not to make
deductible IRA contributions, you may make nondeductible IRA contributions
within the aforementioned limits which are reduced by the amount of any
deductible contributions. The following is a summary of the rules regarding the
deductibility of contributions to your IRA. You should consult your tax advisor
to determine the specific application of such rules to your IRA contributions
for any particular taxable year.
(1) IF NEITHER YOU, NOR YOUR SPOUSE, IS an "active participant" (as
determined under section 219(g) of the Code and any regulations or rulings
thereunder) in a retirement plan during any part of the taxable year, you may
take a deduction for contributions to your IRA for such taxable year in an
amount equal to the lesser of $2,000 or 100% of your compensation (earned
income) for such taxable year.
(2) IF EITHER YOU, OR YOUR SPOUSE (unless you file separate income tax
returns as noted below), is considered an "active participant" in a retirement
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plan for any part of the taxable year, the extent, if any, to which
contributions to your IRA will be deductible depends on the amount of your
adjusted gross income ("AGI"). The maximum IRA deduction as specified in
Paragraph (1) above will be reduced in the same ratio that the excess of your
AGI over $25,000 (for a single individual), $40,000 (for a married couple filing
jointly) and zero (for a married couple filing separately) bears to $10,000.
Thus, if you are an active participant in a retirement plan, no IRA deduction
will be permitted if:
(a) You are a single individual with AGI in excess of $35,000,
(b) you are married and file a joint return with AGI in excess of
$50,000, or
(c) you are married, file separate returns and either you or your spouse
have AGI in excess of $10,000.
(3) IF YOU ARE MARRIED and your spouse has no compensation for the taxable
year, or elects to be treated as having no compensation for such year, you are
permitted an additional deduction in the amount of $250 for contributions to an
IRA for the benefit of your spouse provided that your spouse has not attained
age 70 1/2 and you file a joint income tax return for such year, subject to the
provisions of (1) or (2) above, whichever is applicable. (see below)
You will be considered an "active participant" for any particular taxable
year if you are covered by a retirement plan for any part of such year.
Generally, you will be considered covered by a retirement plan for a year if
your employer or union has a retirement plan under which money is added to your
account or you are eligible to earn retirement credits for such year. For
example, if you are covered under a profit-sharing plan, certain government
plans, a salary reduction arrangement (such as a tax-sheltered annuity
arrangement or a 401(k) plan), a SEP or a plan which promises you a retirement
benefit which is based upon the number of years of service you have with the
employer, you are likely to be an active participant. Your Form W-2 for the year
should indicate your participation status. You are an active participant for a
year even if you are not yet vested in your retirement benefit. Also, if you
make required contributions or voluntary employee contributions to a retirement
plan, you are an active participant. In certain plans you may be an active
participant even if you were only with the employer for part of the year. You
should note that if you are married but file a separate tax return, and you did
not live with your spouse at any time during the taxable year, your spouse's
active participation does not affect your ability to make deductible
contributions.
No deduction will be allowed under (1) or (2) above for any contribution
which is made for the taxable year during which you attain age 70 1/2 or for any
subsequent year. You are permitted to contribute and deduct up to $4,000 for
contributions to your IRA and a spousal IRA, subject to the provisions of (1)
and (2) above. However, in no event shall the contribution to either IRA exceed
$2,000. It should be noted that if both you and your spouse work, each may
contribute up to $2,000 of compensation (earned income) to his or her own IRA.
If your employer maintains a SEP, your employer may contribute to your IRA
up to the lesser of 15% of your compensation from such employer or $30,000.
Since SEP contributions are excluded from your gross income, such contributions
are not deductible for federal income tax purposes.
If contributions to your IRA are deductible as outlined above, you may claim
such deduction even if you do not itemize your deductions on your federal income
tax return. You must make contributions to your IRA during the taxable year for
which you claim the deduction or by the deadline for filing your federal income
tax return for such year (without regard to any filing deadline extension). For
example, if you are a calendar-year taxpayer, you must make contributions no
later than April 15th in order to take a deduction for the previous year.
If any portion of a contribution to your IRA is nondeductible as outlined
above, you must so designate on your federal income tax return, as required
under section 408(o)(4) of the Code and file From 8606 with your tax return.
E. FEDERAL INCOME TAX STATUS OF THE IRA AND CERTAIN DISTRIBUTIONS.
(1) IN GENERAL. Except as described below, your IRA and earnings thereon are
exempt from federal income tax until distributions are made from the IRA.
(2) TAX TREATMENT OF DISTRIBUTIONS. If all contributions to your IRA (other
than rollover contributions) have been deductible for federal income tax
purposes then all distributions from your IRA will be taxable as ordinary
income. However, if you have made any nondeductible IRA contributions,
distributions from your IRA will be treated as partially a return of deductible
contributions, if any, (taxable), partially a return of nondeductible
contributions (nontaxable) and partially a distribution of earnings (taxable).
The portion of an IRA distribution which will be excludable from income will be
determined by multiplying the total amount distributed by a fraction, the
numerator of which is the aggregate of all your nondeductible IRA contributions,
and the denominator of which is the aggregate balance of all of your IRAs
(including rollover IRAs and SEPs). For purposes of the foregoing, (a) all of
your IRAs will be treated as a single IRA, (b) all distributions during a
taxable year will be treated as a single distribution and (c) the aggregate
balance of your IRAs will be determined as of the end of the calendar year with
or within which your taxable year ends, after adding back any distributions for
such year.
Distributions from your IRA are not eligible for any special tax treatment
such as five-or ten-year averaging or capital gains treatment.
(3) EXCESS CONTRIBUTIONS. If contributions to your IRA are in excess of the
limits stated in Part D above, you will be assessed a 6% nondeductible excise
tax on such excess amounts. This tax is payable for each year the excess is
permitted to remain in your IRA. However, if the excess contribution has not
been taken as a deduction, and if the excess and all earnings thereon are
returned before the due date for filing your income tax return for the year in
which the excess contribution was made, the 6% excise tax will not be assessed.
The earnings on such excess contribution that are returned to you will be
taxable as ordinary income and will be deemed to have been earned and taxable in
the tax year during which the excess contribution was made. In addition, if you
are not disabled or have not reached age 59 1/2, the earnings will be subject to
the 10% premature withdrawal penalty discussed below. The 6% excess contribution
tax may be eliminated for future tax years by withdrawing the excess
contribution from your IRA before the due date for filing your tax return for
that year or by under-contributing for a subsequent year by an amount equal to
the excess contribution. If the total contributions for the year to your IRA are
$2,250 or less, and there are no employer contributions for the year, you may
withdraw any excess contributions after the due date for filing your tax return,
including extensions, and not include the amount withdrawn in your gross income.
This applies only to the part of the excess that you did not take a deduction
for. It is not necessary to withdraw the interest or other income earned on the
excess. You will have to pay the 6% tax on the excess amount for each year the
excess contribution was in the IRA.
If the contributions to your IRA for any year are more than $2,250, you must
include in your gross income any excess over $2,250, unless it is an excess
rollover contribution attributable to erroneous information. You may also have
to pay a 10% tax on premature distributions on the amount you withdraw, unless
you are age 59 1/2 or disabled.
If less than the maximum amount of contributions has been made in years
before the year you make an excess contribution, the prior year's difference may
not be used to reduce the excess contribution. Qualified rollover contributions,
as described in Part F below, are not considered excess contributions.
(4) PREMATURE DISTRIBUTIONS. In addition to any regular income tax that may
be payable, distributions from your IRA that occur before you reach age 59 1/2
(except in the event of disability, death, rollover, medical expenses in excess
of 7.5% of adjusted gross income, medical insurance premiums in the event of
unemployment or as a qualifying distribution of an excess contribution), will be
assessed a 10% additional income tax on the amount distributed which is
includible in your gross income. However, the additional 10% income tax will not
be imposed if the distribution is one of a scheduled series of level payments to
be made over your life or life expectancy or over the joint lives or joint life
expectancies of you and your beneficiary. Amounts treated as distributions from
the IRA because of pledging the IRA as described below, or prohibited
transactions as described below, will also be considered premature distributions
if they occur before you reach age 59 1/2 (assuming you are not disabled).
(5) EXCESS DISTRIBUTIONS If the aggregate of your distributions from
qualified plans and individual retirement accounts exceed a certain limit for
any calendar year, a 15% excise tax will be imposed on such excess
distributions. Generally, the limit is the greater of $150,000 (available only
if a special grandfather provision is not elected on a return filed for a
pre-1989 tax year) or $112,500 as adjusted for cost-of-living increases. For any
such excess distributions prior to your attainment of age 59 1/2, the 15% excise
tax will be offset by the 10% additional income tax on early distributions.
(6) PLEDGING THE IRA. If you pledge your IRA as security for a loan, the
portion so pledged is treated as being distributed to you in that year. In
addition to any regular income tax that may be payable on the distribution, the
premature distribution penalty as discussed above may also be applicable.
(7) PROHIBITED TRANSACTIONS. If you or your beneficiary engages in a
prohibited transaction, as described in section 4975 of the Code with respect to
your IRA, your IRA will lose its exemption from tax and you must include the
fair market value of your IRA in your gross income for the year during which the
prohibited transaction occurred. In addition to any regular income tax that may
be payable, the premature distribution penalty as discussed above may also be
applicable.
(8) INSUFFICIENT OR LATE DISTRIBUTIONS. In addition to the regular income
tax that may be payable on distributions from your IRA, you will be assessed
penalties on certain accumulations if funds in your IRA are not distributed in
accordance with the rules described in Part B above. If the amount distributed
from your IRA during the year is less than the minimum amount required to be
distributed during such year, an excise tax will be imposed. The tax imposed is
equal to 50% of the amount by which the minimum required distribution exceeds
the amount actually distributed during the year.
(9) ESTATE AND GIFT TAX STATUS OR DISTRIBUTIONS. Generally, for estate tax
purposes, the value of your IRA will be fully includible in your gross estate in
the event of your death. For gift tax purposes, beneficiary designations will
not be treated as gifts. Also, contributions to an IRA on behalf of a spouse who
has no earned income or elects to be treated as having no earned income will
qualify for
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the annual present interest gift exclusion. You should consult your tax advisor
with respect to the application of community property laws on estate and gift
tax issues relating to your IRA.
(10) INHERITED IRAs. Your IRA will be treated as an inherited IRA if, upon
your death, it is acquired by a beneficiary other than your surviving spouse. An
inherited IRA may not be rolled over to a qualified plan or to another IRA, nor
may an inherited IRA accept any regular or rollover deposits. Only a beneficiary
who is your surviving spouse will be allowed to roll over the IRA funds into his
or her own IRA.
(11) FEDERAL INCOME TAX WITHOLDING. The taxable portion of distributions
from your IRA is subject to federal income tax withholding unless you elect not
to have withholding applied. If you elect not to have withholding applied to
taxable distributions from your IRA, or if insufficient federal income tax is
withheld from any distribution, you may be responsible for payment of estimated
taxes, as well as for penalties under the estimated tax rules, if withholding
and estimated tax payments were not sufficient. Additional information regarding
withholding and the necessary election forms will be provided no later than at
the time a distribution is requested.
F. ROLLOVER CONTRIBUTIONS.
A rollover is a tax-free distribution of cash or other assets from one
retirement program to another. There are two kinds of rollover contributions to
an IRA. In one, you contribute amounts distributed to you from one IRA to
another IRA. With the other, you contribute amounts distributed to you from your
employer's qualified plan or 403(b) plan to an IRA. A rollover is an allowable
IRA contribution which is not subject to the limits on regular contributions
discussed in Part D above. However, you may not deduct a rollover contribution
to your IRA on your tax return.
If you receive a distribution from the qualified plan of your employer or
former employer, the distribution must be an "eligible rollover distribution" in
order for you to be able to roll all or part of the distribution over to your
IRA. The portion you contribute to your IRA will not be taxable to you until you
withdraw it from the IRA. Your employer or former employer will give you the
opportunity to roll over the distribution directly from the plan to the IRA. If
you elect, instead, to receive the distribution, you must deposit it into the
IRA within 60 days after you receive it.
An "eligible rollover distribution" is any distribution from a qualified
plan that would be taxable other than (1) a distribution that is one of a series
of periodic payments for an employee's life or over a period of 10 years or
more, (2) a required distribution after you attain age 70 1/2 and (3) certain
corrective distributions.
If the entire amount in your IRA has been contributed in a tax-free rollover
from your employer's or former employer's qualified plan or 403(b) plan, you may
later roll over the IRA to a new employer's plan if such plan permits rollovers.
Your IRA would then serve as a conduit for those assets. However, you may later
roll those IRA funds into a new employer's plan only if you make no further
contributions to that IRA, or commingle the IRA rollover funds with existing IRA
assets.
G. AMENDMENTS.
The Custodian of your IRA may amend the agreements establishing your IRA at
any time. The Custodian will comply with the amendment procedures set forth in
your Custodial Agreement.
H. FINANCIAL DISCLOSURE.
Because the value of assets held in your IRA is subject to market
fluctuation, the value of your IRA can neither be guaranteed nor projected.
There is no assurance of growth in the value of your IRA or guarantee of
investment results. You will, however, be provided with periodic statements of
your IRA, including current market values of investments.
Certain fees will be charged by the Custodian in connection with your IRA.
Such fees are disclosed on the Custodian's fee schedule, a copy of which has
been provided to you. Upon thirty days' prior written notice, the Custodian may
substitute a new fee schedule. Any fees or other expenses incurred in connection
with your IRA will be deducted from your IRA (with liquidation of Fund Shares,
if necessary), or at the Custodian's option, such fees or expenses may be billed
to you directly.
For its services to the various funds, in The AIM Family of
Funds--Registered trademark--, Boston Safe Deposit and Trust Company receives a
custodian fee. This fee is in addition to fees it receives for acting as
Custodian under the IRA. Boston Safe Deposit and Trust Company and A I M
Distributors, Inc. also will receive additional fees for performing specific
services with respect to the various funds in the AIM Family of Funds. Any such
fees will be fully disclosed to you. Potential investors should obtain a copy of
the current Prospectus relating to the fund(s) selected for investment prior to
making an investment. Also, copies of the Statement of Additional Information
relating to such fund(s) will be provided upon your request to A I M
Distributors, Inc.
I. MISCELLANEOUS.
Each year you will be provided a statement(s) of account which will give the
amount of contributions to the IRA, the year to which each contribution relates,
and the total value of the IRA as of the end of the year. Information relating
to contributions and distributions must be reported annually to the Internal
Revenue Service and to you. You must also file Form 5329 (Return for Individual
Retirement Savings Arrangement) with the Internal Revenue Service for each
taxable year during which you are assessed any penalty or tax as discussed in
Part E above.
Your IRA has been approved by the Internal Revenue Service. Such approval is
a determination as to the form of the IRA, and does not represent a
determination of the IRA's merits as an investment.
Further information about IRAs can be obtained from any district office of
the Internal Revenue Service or from the Custodian.
All provisions in this Disclosure Statement are subject to the Code and to
the regulations promulgated thereunder. This Disclosure Statement constitutes a
nontechnical restatement and summary of certain provisions of the Code which may
affect your IRA. This is not a legal document. Your legal rights and obligations
are governed by the federal tax laws and regulations and your Custodial
Agreement and Adoption Agreement with the Custodian.
26
<PAGE>
SEP AND SARSEP IRA APPLICATION [AIM LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
1. INVESTOR INFORMATION (Please print or type.)
Name Birth Date / /
--------------------------------------------------- -- -- --
First Name Middle Last Name Month Day Year
Address
---------------------------------------------------------------------
Street City State Zip Code
Social Security Number
---------------------
Daytime Telephone Evening Telephone
-------------------------- ----------------
- --------------------------------------------------------------------------------
2. TYPE OF ACCOUNT
[ ] SEP - Employer contributions only.
[ ] SARSEP - Employee salary-reduction SEP.
[ ] Combined SEP/SARSEP - Employer and Employee contributions.
Name of Employer Telephone
-------------------------------- ------------------
- --------------------------------------------------------------------------------
3. FUND INVESTMENT
Indicate Fund(s) and contribution amount(s). Make check payable to Boston
Safe Deposit and Trust Company. Minimum $25 per fund per contribution
submission.
<TABLE>
<CAPTION>
Fund $ or % of Assets Class of Shares (check one)
<S> <C> <C>
[ ] AIM Balanced Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM Charter Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM Constellation Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM Global Aggressive Growth Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM Global Growth Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM Global Income Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM Growth Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM Global Utilities Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM High Yield Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM Income Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM Intermediate Government Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM International Equity Fund $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM Limited Maturity Treasury Shares $ [ ] Class A [ ] Class B
----------------------------
[ ] AIM Money Market Fund $ [ ] Class A
----------------------------
[ ] AIM Value Fund $ [ ] Class A [ ] Class B [ ] Class C
----------------------------
[ ] AIM Weingarten Fund $ [ ] Class A [ ] Class B
----------------------------
Total $ [ ] Class A [ ] Class B
----------------------------
</TABLE>
If no class of shares is selected, Class A shares will be purchased.
All dividends and capital gains will be reinvested in the fund(s)
automatically.
- --------------------------------------------------------------------------------
4. TELEPHONE EXCHANGE
Telephone Exchange Privilege. Unless indicated below, I authorize the
Transfer Agent to accept instructions from any person to exchange shares in
my account(s) by telephone in accordance with the procedures and conditions
set forth in the Fund's current prospectus.
[ ] I do not want the Telephone Exchange Privilege.
27
<PAGE>
- --------------------------------------------------------------------------------
5. BENEFICIARY INFORMATION
I hereby designate the following beneficiary to receive the balance in my
IRA custodial account upon my death. To be effective, the designation of
beneficiary and any subsequent change in designation of beneficiary must be
filed with the Custodian prior to my death. If no beneficiary is designated
or no designated beneficiary or contingent beneficiary survives me, the
balance in my IRA will be distributed to the legal representatives of my
estate. This designation revokes any prior designations. I retain the right
to revoke this designation. In the event that I die and no primary
beneficiary listed below (or such beneficiary's heirs, if applicable) is
alive, distribute all Fund accounts in my IRA to the following contingent
beneficiary, or contingent beneficiary's heirs, if applicable.
PRIMARY BENEFICIARY(IES)
Name % Relationship
------------------------------------ ---- --------------
Beneficiary's Social Security Number Birth Date / /
------------- -- -- --
Name % Relationship
------------------------------------ ---- --------------
Beneficiary's Social Security Number Birth Date / /
------------- -- -- --
CONTINGENT BENEFICIARY
Name % Relationship
------------------------------------ ---- --------------
Social Security Number Birth Date / /
--------------------------- -- -- --
- --------------------------------------------------------------------------------
6. AUTHORIZATION AND SIGNATURE
I hereby adopt the A I M Distributors, Inc. Individual Retirement Account
appointing Boston Safe Deposit and Trust Company as Custodian. I have
received and read the current prospectus of the investment company(ies)
selected in this agreement and have read and understand the IRA custodial
agreement and disclosure statement and consent to the custodial account fees
as specified. I understand that a $10 annual AIM Fund IRA Maintenance Fee
will be deducted in early December from my AIM IRA account. Under the
Interest and Dividend Tax Compliance Act of 1983, the Fund is required to
have the following certification. Under the penalties of perjury, I certify
that (i) the number shown in Section 1 is my correct Social
Security/Taxpayer Identification Number and (ii) I am not subject to backup
withholding because the Internal Revenue Service (a) has not notified me
that I am subject to backup withholding as a result of failure to report all
interest or dividends, or (b) has notified me that I am no longer subject to
backup withholding. Please refer to the Fund prospectus for complete
instructions regarding backup withholding.
Your Signature Date / /
---------------------------------------------- -- -- --
- --------------------------------------------------------------------------------
7. DEALER INFORMATION (To be completed by securities dealer.)
Name of Broker/Dealer Firm Branch #
----------------------- ------------------
Home Office
-----------------------------------------------------------------
Address
---------------------------------------------------------------------
Rep. Name Rep. #
----------------------------------------- --------------------
Authorized Signature Telephone
------------------------------ -----------------
Branch Address
------------------------------------------------
Street City State Zip Code
[ ] Authorized for NAV purchase
28 [AIM LOGO APPEARS HERE] A I M Distributors, Inc. 43102-10/95
<PAGE>
SARSEP IRA ENROLLMENT AND SALARY [ AIM LOGO APPEARS HERE]
SAVINGS AGREEMENT
- --------------------------------------------------------------------------------
8. INVESTOR INFORMATION (Please print or type.)
Name Date / /
---------------------------------------------------- -- -- --
First Name Middle Last Name Month Day Year
Address
---------------------------------------------------------------------
Street City State Zip Code
Birth Date / / Hire Date / /
--- --- --- --- --- ---
Month Day Year Month Day Year
- -------------------------------------------------------------------------------
Social Security Number
------------------------------------------------------
[ ] I HEREBY ELECT TO BECOME A PARTICIPANT IN THE SARSEP.
As a Participant, I hereby authorize the Company to deduct ______% of my
Compensation or a flat dollar amount of $ __________ per pay period which I
understand will be contributed by the Employer to my IRA. I understand that
my annual SARSEP contribution cannot exceed the lesser of 15% of my
compensation or $9,240, or an amount as limited by IRS regulations. The
minimum contribution is $25 PER FUND PER CONTRIBUTION SUBMISSION.
[ ] I AM PRESENTLY A PARTICIPANT IN THE SARSEP.
As a Participant, I hereby authorize the Company to change the amount it
deducts from my Compensation from _______% to _______% or if a dollar amount
has been specified, from $_______________ per pay period to $_______________
per pay period. I understand that this change will be effective 30 days from
the first day of the month following receipt of this notice.
[ ] I HEREBY WITHDRAW MY AUTHORIZATION TO CONTINUE PAYROLL DEDUCTIONS UNDER THE
SARSEP.
I understand this directive will be effective 30 days from delivery of this
notice to the Employer. I further understand that I may not again authorize
payroll deductions for a period of 90 days from the date of this notice.
[ ] CASH BONUS ELECTION (IF APPLICABLE)
I hereby authorize the Company to deduct ________% from my cash bonus as an
additional contribution to my IRA. I understand that my total annual
contribution cannot exceed the lesser of 15% of my compensation or $9,240,
or an amount as limited by IRS regulations.
--------------------------------------
Participant's Signature
29 [AIM LOGO APPEARS HERE] A I M Distributors, Inc. 43103-10/95
<PAGE>
30
<PAGE>
SEP AND SARSEP TOP-HEAVY TEST [AIM LOGO APPEARS HERE]
Plan Year End
--------------------------
- --------------------------------------------------------------------------------
1. A Top-Heavy Test must be performed at the end of each plan year. A Plan
becomes top heavy when 60% of the Plan's aggregate SEP and/or SARSEP
contributions or 60% of the aggregate market value of the Plan as of the
last day of the Plan year is allocated to key employees. You may test using
either market values or contributions, but you may find it easier to test
based on contributions.
<TABLE>
<CAPTION>
Key Employees' Names Contributions Market Value
(SEP and SARSEP) 12/31 or Fiscal Year End
<S> <C> <C>
$ $
- --------------------------------------- --------------------- -------------------------------
- --------------------------------------- --------------------- -------------------------------
- --------------------------------------- --------------------- -------------------------------
- --------------------------------------- --------------------- -------------------------------
- --------------------------------------- --------------------- -------------------------------
- --------------------------------------- --------------------- -------------------------------
(A) Total $ $
--------------------- -------------------------------
</TABLE>
<TABLE>
<CAPTION>
Non-Key Employees' Names Contributions Market Value
(SEP and SARSEP) 12/31 or Fiscal Year End
<S> <C> <C>
$ $
- --------------------------------------- --------------------- -------------------------------
- --------------------------------------- --------------------- -------------------------------
- --------------------------------------- --------------------- -------------------------------
- --------------------------------------- --------------------- -------------------------------
- --------------------------------------- --------------------- -------------------------------
- --------------------------------------- --------------------- -------------------------------
(B) Total S $
--------------------- -------------------------------
(C) Plan Totals (line A + line B) $ $
--------------------- -------------------------------
(D) Top-Heavy Percentage
(line A divided by line C) --------------------- -------------------------------
(If greater than 60%, plan is "top heavy")
</TABLE>
Note: If you have additional key or non-key employees, please attach additional
pages as necessary.
If the Plan is top heavy, the employer must make a minimum contribution on
behalf of all non-key eligible employees. The contribution must equal the
highest percentage deferred by a key employee, up to a maximum of 3%, based on
the non-key employee's compensation. These contributions can be made to any
qualified retirement plan (SEP or SARSEP IRA), as indicated in the adoption
agreement. Key employees may also receive the top-heavy contribution.
31 [AIM LOGO APPEARS HERE] A I M Distributors, Inc. 43104-10/95
<PAGE>
32
<PAGE>
SARSEP IRA ACTUAL DEFERRAL [AIM LOGO APPEARS HERE]
PERCENTAGE (ADP) TEST
Plan Year End
----------------------
- --------------------------------------------------------------------------------
1. THE ACTUAL DEFERRAL PERCENTAGE (ADP) TEST
The Actual Deferral Percentage (ADP) Test is an annual test which restricts
the amount that Highly Compensated Employees may contribute through salary
deferral to their SARSEP accounts. Each Highly Compensated Employee may
defer no more than 125% of the deferral percentage of the Non-Highly
Compensated (NHC) group of employees. The test must be performed annually as
of the last day of the plan year.
- --------------------------------------------------------------------------------
2. INSTRUCTIONS
(1) Separate eligible employees into two groups: Highly Compensated and
Non-Highly Compensated. The definition of Highly Compensated is provided
in the Question and Answer Section on page 13.
(2) List each ELIGIBLE employee in their respective group indicating their
compensation and salary deferral. IMPORTANT: You must also include all
eligible employees who elect not to make salary deferral contributions.
Indicate their deferral amount ($) in Column 4 as zero.
(3) Compute each eligible employees' deferral percentage in Column 4.
(4) Add up the deferred percentage of each employee in the Highly
Compensated group and the Non-Highly Compensated group separately.
Divide by the number of eligible employees in each group.
(5) Compare the two groups' average deferral percentages. Each Highly
Compensated participant cannot defer more than 125% of the average
deferral percentage of the Non-Highly Compensated group.
- --------------------------------------------------------------------------------
3. DEFINITIONS
(1) EMPLOYEE: For the purposes of this worksheet we are listing only
employees eligible for this SARSEP. An employee who was eligible at any
time during the Plan Year, but who terminates prior to the end of the
Plan Year is included for this test. Additionally, an eligible employee
who elects not to make Elective Deferrals shall be treated as having a
0% Deferral Percentage.
(a) HIGHLY COMPENSATED EMPLOYEE An Employee (and certain family
members) who meet the criteria listed in Sections 1.11 and 1.12
of the SEP and SARSEP IRA Plan Document. (Also see Question and
Answer Section on page 13.)
(b) NON-HIGHLY COMPENSATED EMPLOYEE: An Employee who doesn't meet
the definition of Highly Compensated.
(2) ELECTIVE DEFERRALS: All contributions made to the SARSEP at the election
of an eligible employee (Participant) in lieu of cash compensation or
bonuses pursuant to a salary savings agreement or cash option election.
(3) COMPENSATION: Total wages, salaries, fees, bonuses or other taxable
remuneration paid to Participant from the Employer during the period in
which the individual actually participated in the Plan. Compensation
shall be limited to $160,000 (or any higher limit announced by the IRS).
The Compensation limit must be adjusted proportionately for Plan Years
of less than 12 months.
33
<PAGE>
- --------------------------------------------------------------------------------
4. ELIGIBLE NON-HIGHLY COMPENSATED (NHC) EMPLOYEES
NOTE: Please read the Definitions before completing worksheet.
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Deferral
Employee Name Elective Deferrals Compensation Percentage
column 2 divided
by column 3
<S> <C> <C> <C>
$ $ %
- --------------------------------------- ---------------------------- ------------------- -----------------
$ $ %
- --------------------------------------- ---------------------------- ------------------- -----------------
$ $ %
- --------------------------------------- ---------------------------- ------------------- -----------------
$ $ %
- --------------------------------------- ---------------------------- ------------------- -----------------
$ $ %
- --------------------------------------- ---------------------------- ------------------- -----------------
$ $ %
- --------------------------------------- ---------------------------- ------------------- -----------------
</TABLE>
(5) Total of all Deferral Percentages (column 4)
---------------
(6) Number of eligible Non-Highly Compensated Employees (column 1)
-------------
(7) Average Deferral Percentage for Non-Highly Compensated
Employees (line 5 divided by line 6)
--------------------
- --------------------------------------------------------------------------------
5. ELIGIBLE HIGHLY COMPENSATED (HC) EMPLOYEES
NOTE: Please read the Definitions before completing worksheet.
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Deferral
Employee Name Elective Deferrals Compensation Percentage
column 2 divided
by column 3
<S> <C> <C> <C>
$ $ %
- --------------------------------------- ---------------------------- ------------------- -----------------
$ $ %
- --------------------------------------- ---------------------------- ------------------- -----------------
$ $ %
- --------------------------------------- ---------------------------- ------------------- -----------------
$ $ %
- --------------------------------------- ---------------------------- ------------------- -----------------
</TABLE>
(A) Total of all Deferral Percentages (column 4)
------------------
(B) Number of eligible Highly Compensated Employees (column 1)
----------------
(C) Average Deferral Percentage for Highly Compensated Employees
(line A divided by line B)
--------------------
(D) EACH HIGHLY COMPENSATED PARTICIPANT MAY NOT DEFER MORE THAN 125% X LINE 7,
SECTION 4
125% X _________________ = ______________ ADP FOR EACH HIGHLY COMPENSATED
PARTICIPANT
34 [AIM LOGO APPEARS HERE] A I M Distributors, Inc. 43105-3/96
<PAGE>
SEP/SARSEP TRANSMITTAL FORM [AIM LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
1. EMPLOYER INFORMATION (Please print or type.)
Name of Employer
------------------------------------------------------------
Address
---------------------------------------------------------------------
City State Zip Code
------------------------------ --------------- --------------
- --------------------------------------------------------------------------------
2. EMPLOYER'S AUTHORIZATION (Signature(s) of authorized employer
representative)
We hereby authorize Boston Safe Deposit and Trust Company to invest
contributions in accordance with the instructions below.
Date / /
- ------------------------------------------------------------ -- -- --
Month Day Year
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Name of Social Security Selected Contribution per Fund**
Participant Number AIM Funds* (Minimum $25 per Fund)
SEP SARSEP
<S> <C> <C> <C> <C>
1 $ $
----------------------------- ------------------------- ------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
2
----------------------------- ------------------------- ------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
3
----------------------------- ------------------------- ------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
4
----------------------------- ------------------------- ------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
5
----------------------------- ------------------------- ------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
6
----------------------------- ------------------------- ------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
</TABLE>
*Indicate funds used by each participant.
**Indicate dollar($) amount contributed per fund.
35
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Name of Social Security Selected Contribution per Fund**
Participant Number AIM Funds* (Minimum $25 per Fund)
SEP SARSEP
<S> <C> <C> <C> <C>
7 $ $
----------------------------- ------------------------- ------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
8
----------------------------- ------------------------- ------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
9
----------------------------- ------------------------- ------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
10
----------------------------- ------------------------- ------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
11
----------------------------- ------------------------- ------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
------------------------ ------------ ------------
Total Employer Contributions $
------------
Total Employee Salary
Deferral Contributions $
-----------
Total Employer and
Employee Contributions $
-----------
</TABLE>
If a contribution for a participant is to be invested in more than one fund, $25
or more must be invested in each fund selected. Attach form, check (payable to
Boston Safe Deposit and Trust) and SEP and SARSEP applications and mail to:
AIM Fund Services, Inc.
Attn: Retirement Plans Operations
P.O. Box 2646
Houston, Texas 77252-2646
*Indicate funds used by each participant.
**Indicate dollar($) amount contributed per fund.
36 [AIM LOGO APPEARS HERE] A I M Distributors, Inc. 43106-10/95
<PAGE>
EXHIBIT 14(c)
AIM PROFIT SHARING/MONEY PURCHASE PENSION PLAN
ENROLLMENT & BENEFICIARY DESIGNATION FORM [AIM LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
1. EMPLOYEE INFORMATION (Please Print)
Company Name Trust Tax ID #
------------------------------ ---------------
Last Name First Middle
------------- ------------ -----------------------
Social Security Number
----------------------------------------------------
Address
-------------------------------------------------------------------
Home Phone Work Phone
--------------------------- ------------------------
- --------------------------------------------------------------------------------
2. INVESTMENT SELECTION
I elect to have my Employer contributions invested as indicated below. If
any existing assets are being transferred to AIM, they will be invested the
same as your future contributions. (Write in the name of each AIM Fund you
choose to invest in as permitted by the Plan.)
[ %] AIM
--------------------------------
[ %] AIM
--------------------------------
[ %] AIM
--------------------------------
[ %] AIM
--------------------------------
[ %] AIM
--------------------------------
[ %] AIM
--------------------------------
[ %] AIM
--------------------------------
[ %] AIM
--------------------------------
100% Total (Minimum $25 per fund, per payroll deferral)
- --------------------------------------------------------------------------------
3. PRIMARY BENEFICIARY(IES)
I name the following person(s) to receive benefits payable from my
company's retirement plan upon my death:
<TABLE>
<S> <C> <C>
Name Relationship Percentage of Benefits
----------------------------------------------- ----------------------------------- [ %]
Social Security Number Birthdate / /
----------------------------- ------------ ------------- -----------
Street Address City State Zip Code
----------------------- ----------------- --- -------------------
Name Relationship Percentage of Benefits
----------------------------------------------- ----------------------------------- [ %]
Social Security Number Birthdate / /
----------------------------- ------------ ------------- ----------- Percentages must
Street Address City State Zip Code total 100%
----------------------- ----------------- --- -------------------
</TABLE>
Attach additional sheets if you wish to name more than two primary
beneficiaries.
- --------------------------------------------------------------------------------
4. CONTINGENT BENEFICIARY(IES)
If my primary beneficiary(ies) is/are deceased at the time of my death, the
following person(s) shall receive benefits payable from my Company
Retirement Plan upon my death:
<TABLE>
<S> <C> <C>
Name Relationship Percentage of Benefits
----------------------------------------------- ----------------------------------- [ %]
Social Security Number Birthdate / /
----------------------------- ------------ ------------- -----------
Street Address City State Zip Code
----------------------- ----------------- --- -------------------
Name Relationship Percentage of Benefits
----------------------------------------------- ----------------------------------- [ %]
Social Security Number Birthdate / /
----------------------------- ------------ ------------- ----------- Percentages must
Street Address City State Zip Code total 100%
----------------------- ----------------- --- -------------------
</TABLE>
Attach additional sheets if you wish to name more than two contingent
beneficiaries.
- --------------------------------------------------------------------------------
5. SPOUSAL CONSENT
(This section must be completed only if you are married and selecting a
primary beneficiary other than your spouse.)
I, the spouse of the above-named employee, consent to my spouse's
designation. I understand that if a primary beneficiary other than myself
has been named, no benefit will be paid to me from the Plan upon my
spouse's death unless I am named also as an additional primary beneficiary
or as a contingent beneficiary, and the primary beneficiary(ies) is/are
deceased.
Spouse's Signature Date / /
-------------------------------- ----- ----- -----
Signature of Witness (other than spouse) Date / /
---------- ----- ----- -----
- --------------------------------------------------------------------------------
6. EMPLOYEE AUTHORIZATION (Please sign and date this form)
I understand that my designation becomes effective on the day I submit this
form and replaces any earlier beneficiary designation I have made under the
Plan. If I am married at the time of my death, my spouse will receive my
Plan benefits, regardless of whom I have named as beneficiary, if Section 4
of this form is not complete.
Employee Signature Date / /
-------------------------------- ----- ----- -----
A I M Distributors, Inc. *40700-12/96
<PAGE>
PROFIT SHARING/MONEY PURCHASE
PLAN APPLICATION [AIM LOGO APPEARS HERE]
Complete Sections 1-9. Please print or type.
- -------------------------------------------------------------------------------
1. EMPLOYER INFORMATION
Name of Employer/Business
---------------------------------------------------
Plan Name
-------------------------------------------------------------------
Address
-------------------------------------------------------------------
Street City State Zip Code
Trust Tax I.D# Daytime Telephone - -
---- -------------- ---- ---- --------
- --------------------------------------------------------------------------------
2. DEALER INFORMATION: To be completed by securities dealer.
Dealer's Name
--------------------------------------------------------------
Main Office Address
--------------------------------------------------------
Rep. Name and Number
--------------------------------------------------------
Branch Rep. Signature
---------------------------- --------------------------
Home Office Address
---------------------------------------------------------
Telephone - -
---- ---- ---------
- --------------------------------------------------------------------------------
3. PLAN TRUSTEES
Name Plan Adm./Contact Person
------------------------- ----------------------
Name Plan Adm. Telephone - -
------------------------- ----- ----- -----
- --------------------------------------------------------------------------------
4. TYPE OF CONTRIBUTION
Note: If you have paired AIM Profit Sharing and Money Purchase Pension
Plans, you must submit separate applications and separate contribution
checks. [ ] Profit Sharing Plan [ ] Money Purchase Plan
- --------------------------------------------------------------------------------
5. TYPE OF ACCOUNT ESTABLISHMENT
[ ] Establish separate accounts for each participant. (Attach participant
listing.)
[ ] Establish a pooled account for all participants. (Record keeper is
responsible for allocating plan assets to each participant.)
- --------------------------------------------------------------------------------
6. FUND INVESTMENT
Indicate fund(s) and contribution amount(s). Make check payable to Boston
Safe Deposit and Trust Company.
<TABLE>
<CAPTION>
Class of
Shares Class of Shares
Fund $ or % of (Check one) Fund $ or % of (Check one)
Assets Assets
<S> <C> <C> <C> <C> <C>
[ ] AIM Balanced Fund $ [ ] A [ ] B [ ] AIM Intermediate Government Fund $ [ ] A [ ] B
----------- ----------
[ ] AIM Blue Chip Fund $ [ ] A [ ] B [ ] AIM Growth Fund $ [ ] A [ ] B
----------- ----------
[ ] AIM Capital Develop-
ment Fund $ [ ] A [ ] B [ ] AIM High Yield Fund $ [ ] A [ ] B
----------- ----------
[ ] AIM Charter Fund $ [ ] A [ ] B [ ] AIM Income Fund $ [ ] A [ ] B
----------- ----------
[ ] AIM Constellation
Fund $ [ ] A [ ] AIM International Equity Fund $ [ ] A [ ] B
----------- ----------
[ ] AIM Global Aggressive
Growth Fund $ [ ] A [ ] B [ ] AIM Limited Maturity Treasury Shares $ [ ] A
----------- ----------
[ ] AIM Global Growth
Fund $ [ ] A [ ] B [ ] AIM Money Market Fund $ [ ] A [ ] B [ ] C
----------- ----------
[ ] AIM Global Income
Fund $ [ ] A [ ] B [ ] AIM Value Fund $ [ ] A [ ] B
----------- ----------
[ ] AIM Global Utilities
Fund $ [ ] A [ ] B [ ] AIM Weingarten Fund $ [ ] A [ ] B
----------- ----------
Total from both columns $
----------
</TABLE>
If no class of shares is selected, Class A shares will be purchased, except
in the case of AIM Money Market Fund, where Class C shares will be
purchased. If you are funding your retirement account through a transfer,
please indicate the contribution amounts both in this section and in Section
3 of the Asset-Transfer Form.
<PAGE>
- -------------------------------------------------------------------------------
7. TELEPHONE EXCHANGE PRIVILEGE
Unless indicated below, the plan authorizes the Transfer Agent to accept
instructions from any person to exchange shares in its plan account(s) by
telephone, in accordance with the procedures and conditions set forth in the
Fund's current prospectus.
[ ] The plan DOES NOT want the telephone exchange privilege.
- --------------------------------------------------------------------------------
8. REDUCED SALES CHARGE (optional)
RIGHT OF ACCUMULATION
The plan applies for Right of Accumulation reduced sales charges based on
the following accounts in The AIM Family of Funds--Registered Trademark--.
Fund(s) Account No(s).
----------------------- -------------------------------
LETTER OF INTENT
The plan agrees to the Letter of Intent provisions as stated in Fund's
prospectus(es). The plan agrees to invest during a 13-month period a dollar
amount of at least:
[ ]$25,000 [ ]$50,000 [ ]$100,000 [ ]$250,000 [ ]$500,000 [ ]$1,000,000
- --------------------------------------------------------------------------------
9. DUPLICATE ACCOUNT STATEMENT
Name
------------------------------------------------------------------------
Address
---------------------------------------------------------------------
(AIM will only send one duplicate statement. Check one of the following
boxes.)
[ ]Plan Administrator [ ]Record Keeper [ ]Benefit Consultant [ ]Trustee
- --------------------------------------------------------------------------------
10. AUTHORIZATION AND SIGNATURE
The trustee(s) hereby adopts the AIM Distributors, Inc. Money
Purchase/Profit Sharing Plan appointing Boston Safe Deposit and Trust
Company as Custodian. The trustee(s) has received and read the current
prospectus of the investment company(ies) selected in this agreement. The
trustee(s) understands that a $10 annual maintenance fee for each
participant in the AIM Money Purchase/Profit Sharing Plan will be
deducted in early December. The trustee(s) acknowledges reading and
completing the AIM Funds Money Purchase/Profit Sharing Plan Adoption
Agreement(s) and Trust Agreement.
Under the Interest and Dividend Tax Compliance Act of 1983, the Fund is
required to have the following certification. Please refer to the Fund
prospectus for complete instructions regarding backup withholding. Under the
penalties of perjury, the trustee(s) certifies that (i) the number shown in
Section 1 is its correct Taxpayer Identification Number and (ii) the plan is
not subject to backup withholding because the Internal Revenue Service (a)
has not notified the plan that it is subject to backup withholding as a
result of failure to report all interest or dividends, or (b) has notified
the plan that it is no longer subject to backup withholding (does not apply
to real estate transactions, mortgage interest paid, the acquisition or
abandonment of secured property, contributions to an individual retirement
arrangement (IRA), and payments other than interest and dividends).
Certification Instructions - You must cross out item(b) above if you have
been notified by the IRS that you are currently subject to backup
withholding because of underreporting of interest or dividends on your tax
return.
[ ] Exempt from Backup Withholding (i.e. exempt entity as described in
Application Instructions)
Signature of Plan Trustee Date / /
----------------------------- ---- ---- ------
Signature of Plan Trustee Date / /
----------------------------- ---- ----- -------
Signature of Plan Trustee Date / /
----------------------------- ---- ----- -------
- --------------------------------------------------------------------------------
11. INSTRUCTIONS
Make check payable to Boston Safe Deposit and Trust Company.
Return completed application and check to A I M Distributors, Inc., P.O.
Box 4739, Houston, TX 77210-4739.
[AIM LOGO APPEARS HERE] A I M Distributors, Inc. 42600-12/96
<PAGE>
[AIM LOGO APPEARS HERE]
AIM FAMILY OF FUNDS
PROTOTYPE MONEY PURCHASE PENSION AND PROFIT SHARING PLANS
MONEY PURCHASE PENSION AND PROFIT SHARING PLAN DOCUMENT, TRUST AGREEMENT,
ADOPTION AGREEMENTS, SUMMARY PLAN DESCRIPTIONS AND APPLICATIONS
AIM DISTRIBUTORS, INC.
<PAGE>
AIM DISTRIBUTORS, INC.
PROTOTYPE PAIRED DEFINED CONTRIBUTION PLANS
PROFIT SHARING/MONEY PURCHASE PENSION PLANS
TABLE OF CONTENTS
I. Adopting the AIM Profit Sharing Plan: Adoption Agreement #001
II. Adopting the AIM Money Purchase Pension Plan: Adoption Agreement #002
III. Money Purchase Pension and Profit Sharing Plan Basic Document #01
IV. Determination Letters
V. Trust Agreement
VI. Employee Notices
- Model Summary Plan Description for Profit Sharing Plan
- Model Summary Plan Description for Money Purchase Plan
VII. Forms
- Money Purchase Pension and Profit Sharing Plan Account Application
- Participant Enrollment & Beneficiary Designation
- Asset Transfer Form
- Contribution Transmittal Form
1
<PAGE>
ESTABLISHING
YOUR
PROTOTYPE DEFINED CONTRIBUTION PLANS
PROFIT SHARING AND MONEY PURCHASE PENSION PLANS
The Prototype Paired Defined Contribution Plans sponsored by AIM Distributors,
Inc. are a Profit Sharing Plan and a Money Purchase Pension Plan. Both of these
plans are provided under one plan document with separate adoption agreements.
An employer can adopt either one or both of these plans.
AIM Distributors, Inc. will not act as trustee, plan administrator, nor record
keeper. Before establishing a qualified plan, you should consult with a tax
advisor or attorney. Failure to properly complete these documents could result
in plan disqualification.
To establish the AIM Prototype Profit Sharing and/or Money Purchase Pension
Plan the following forms need to be completed:
1. PLAN ADOPTION AGREEMENT(S). (Section I & II.)
You must complete the appropriate adoption agreement, Profit Sharing
Agreement #001, or Money Purchase Pension Agreement #002, and all
other documents stated in the plan set up instructions.
To establish both a Money Purchase Pension and a Profit Sharing Plan
(Paired Plans), you must complete both the Profit Sharing Adoption
Agreement (Agreement #001) and the Money Purchase Adoption Agreement
(Agreement #002) found in Sections I & II.
2. FIDELITY BOND REQUIREMENT: All qualified plans are required to be covered
by a Fidelity Bond equal to at least 10% of the asset value of the plan,
and not less than $1,000 nor greater than $500,000. Fidelity bonds can be
obtained through your business insurance agent.
3. TRUST AGREEMENT DOCUMENT (Section III.)
Complete and sign pages 77 and 78 of the Trust Document.
4. AIM PROFIT SHARING/MONEY PURCHASE PLAN ACCOUNT APPLICATION (Section VII.)
Complete a separate application for each plan established: Profit
Sharing and/or Money Purchase Pension Plan.
5. PARTICIPANT ENROLLMENT AND DESIGNATION OF BENEFICIARY FORM (Section VII
Employer retains)
Each eligible employee must complete an enrollment and beneficiary
form and return it to the plan administrator to be retained with plan
records. A copy of the employee's enrollment form should be forwarded
to AIM only if you are requesting that individual mutual fund accounts
be established for each employee.
2
<PAGE>
Do not return the employee enrollment forms if you are
establishing "pooled" investment accounts for the plan. AIM will
only establish "individual" mutual fund participant accounts for
plans with less than 50 participants.
6. TO TRANSFER ASSETS FROM AN EXISTING PLAN: Complete the Asset Transfer
Form in Section V as well as the documents indicated on the previous
page.
7. FEES: There is an annual custodial account fee of $10.00 for each
participant account or each "pooled" account establish at AIM.
After completion, return only the AIM Money Purchase Pension and Profit Sharing
Account Application and a copy of the participant enrollment forms (individual
mutual fund accounts only) with your contribution to establish the plan. Do not
return participant enrollment forms if establishing "pooled" AIM Fund
investment accounts.
Enclose your initial contribution check payable to: Boston Safe Deposit &
Trust Company.
DO NOT return the Adoption Agreement(s), Summary Plan Description(s),
Beneficiary Form, or Trust Agreement to AIM. These documents must be retained
with your permanent plan records.
Return to:
AIM Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
DEADLINE: New Plans must execute all plan documents prior to the last day of
the plan year (fiscal or calendar year). The plans contribution must be made
by the due date of the business tax return including extensions for the
contribution to be tax deductible.
NOTICE TO EMPLOYEES
Once you have adopted the AIM Money Purchase Pension and/or Profit Sharing Plan
you will need to communicate the adoption and principal provisions of the plan
to employees. This is done by providing the following information to employees:
1. SUMMARY PLAN DESCRIPTION
The employer must give each eligible employee a Summary Plan Description
(SPD) of the plan and file the Summary Plan Description with the Department
of Labor within 120 days of establishing the plan. You must complete the
SPD to indicate the plan features you have designated in the adoption
agreement. AIM has partially completed the SPD in accordance with the
features we pre-marked. Any future amendments to the adoption agreement
must also be made to the SPD.
There is a sample letter provided for filing the SPD with the Department
of Labor.
These notices are provided in Section VII.
3
<PAGE>
ADOPTING THE AIM PROFIT SHARING PLAN
ADOPTION AGREEMENT #001
4
<PAGE>
ADOPTING THE AIM PROFIT SHARING PLAN ADOPTION
AGREEMENT #001
TO ADOPT THE AIM SPONSORED PROFIT SHARING PLAN YOU WILL NEED TO COMPLETE
THE FOLLOWING FORMS:
- The Profit Sharing Adoption Agreement and Summary Plan Description
(SPD) and Trust Agreement
- A Profit Sharing Plan Account Application
- An Enrollment and Beneficiary Designation Form for each participant.
PLAN STRUCTURE:
If you are establishing "pooled" investment accounts, utilizing a third
party administrator for record keeping:
- Submit only the AIM Profit Sharing and/or Money Purchase Pension Plan
Account Application indicating all the AIM Funds permitted as
investment options by the Plan and the investment amount for each
fund. You must identify the Plan's trustees. If you are not making
your full contribution at this time, we require a minimum $1,000
initial contribution.
If you want AIM to establish separate mutual fund accounts for each plan
participant:
- Submit the AIM Profit Sharing Account Applications with the
participant enrollment forms (Section VII).
- Identify each participant's name, mailing address, SS # and their AIM
Fund'(s) investment election on the enrollment form.
- The plan administrator must submit all contributions with a breakdown
identifying each participant and their total contribution allocated to
the funds the participant has chosen.
- The minimum contribution per participant is $25 per fund, per
contribution submission.
- The maximum number of individual, participants accounts AIM will
establish is 50, utilizing no more than 6 AIM Funds.
- Duplicate statements will be issued to your recordkeeper or
administrator, if requested.
RETURN TO: AIM Fund Services
P.O. Box 4739
Houston, TX 71210-4739
ADOPTION AGREEMENT
To make it easy for you, the Profit Sharing Plan Adoption Agreement has been
partially completed to reflect the features most frequently chosen. Please
review the completed plan adoption agreement with your legal or tax advisor to
ensure that the plan provisions are appropriate.
NOTE: If desired, you may change any of the prechecked elections by making the
appropriate change and placing your initials and date next to the section being
changed.
[X] PRE-CHECKED SECTIONS:
The key sections in this Adoption Agreement which have been completed are as
follows:
5
<PAGE>
- - All employees who are Age 21 and have fulfilled one year of service are
eligible to share in plan for contributions. (Years of service cannot
exceed 2 years: all contributions are then 100% vested.)
- - An employee who completes 1,000 hours of service within 12 consecutive
months of their date of hire is credited with a year of service for initial
eligibility. Only 500 hours of service are required in any year thereafter
for a participant to be eligible for a plan contribution. There is no
requirement that a participant be employed on the last day of the plan year
to receive a contribution in the year they separate from service.
- - After fulfilling age and service eligibility requirements, employees may
enter the plan on the first day of a plan year on the first day of the
seventh month of the plan year. (Calendar Year = January 1 & July 1 entry
dates)
- - All union and non U.S. resident alien employees are excluded from
participation. Please note that all other employees of the plan sponsors,
as well as employees of certain companies related to the plan sponsor, are
eligible to participate.
- - Please note that all other employees of the plan sponsors, as well as
employees of certain companies related to the plan sponsor, are eligible to
participate.
- - The employees annual contribution will be discretionary.
- - The plan is not integrated with Social Security. If you choose to integrate
your contribution, AIM will not compute the integration allocation.
- - Normal retirement age of 65.
- - No Loans and No Hardship Distributions are permitted.
- - No Life Insurance may be purchased by the plan.
- - The Employer is the Plan Administrator responsible for administration of
the Plan. (If you appoint another entity as the Plan Administrator, that
entity must sign Section XV of the Adoption Agreement to accept the
responsibility of Plan Administrator.
[X] SECTIONS TO BE COMPLETED BY EMPLOYER
The following sections of the Adoption Agreement must be completed by the
employer.
Section II: Employer Data (Page 1 & 2) - Complete A through G. If
applicable, Complete H and I. (Name, address, TIN, etc.)
Section IX: Vesting - Choose the vesting schedule desired.
SECTION XIV: Allocation Limitation - complete this section.
Section XVI: Self Trusteed Plan - You must designate a trustee or trustees
of this plan. The trustee(s) must sign the Adoption Agreement.
NEITHER AIM NOR BOSTON SAFE DEPOSIT & TRUST COMPANY WILL ACT
AS THE PLAN TRUSTEE. The trustees must sign the Adoption
Agreement on page 12.
Section XVII: Employer Signature - Read the employer acknowledgment and
execute this section.
6
<PAGE>
Fidelity Bond - Contact your insurance company regarding the purchase of a
fidelity bond which will cover the plan administrator and plan fiduciaries. The
bond must be for at least $1,000 or an amount equal to 10% of the plan's assets
not to exceed $500,000.
FAILURE TO PROPERLY COMPLETE THESE DOCUMENTS COULD RESULT IN DISQUALIFICATION
OF YOUR PLAN AND LOSS OF TAX BENEFITS. DEADLINE: NEW PLANS MUST BE EXECUTED BY
THE LAST DAY OF THE PLAN'S TAX YEAR (CALENDAR OR FISCAL).
PLAN ADMINISTRATION: NEITHER AIM DISTRIBUTORS, NOR AIM FUND SERVICES WILL ACT AS
THE PLAN ADMINISTRATOR. AIM WILL NOT REVIEW PLAN DOCUMENTS, CALCULATE
CONTRIBUTION ALLOCATIONS, PROVIDE RECORD KEEPING SERVICES, PERFORM
DISCRIMINATION TEST, OR FILE FORM 5500. ALL ADMINISTRATIVE, TAX REPORTING AND
ACCOUNTING FUNCTIONS ARE THE RESPONSIBILITY OF THE PLAN SPONSOR OR APPOINTED
THIRD PARTY.
7
<PAGE>
PROFIT SHARING ADOPTION AGREEMENT
FOR PROTOTYPE PAIRED DEFINED CONTRIBUTION PLAN
#001 SPONSORED BY
AIM DISTRIBUTORS, INC.
ADOPTION AGREEMENT #001
This is the Adoption Agreement for paired defined contribution plan #001 of
basic plan document #001, which is a combined prototype profit sharing/money
purchase pension plan. This Adoption Agreement may be adopted either singly or
in combination with paired defined contribution plan #002, a prototype money
purchase pension plan.
NOTE: Before executing this Adoption Agreement, the Employer should consult
with a tax advisor or attorney. Failure to properly complete this
Adoption Agreement may result in Plan disqualification.
- -----------------------------------
The Employer hereby establishes a profit sharing plan and a trust upon the
respective terms and conditions contained in the prototype paired defined
contribution plan (the "Plan") and the Trust Agreement annexed hereto and
appoints as Trustee of such trust the person(s) who have executed this Adoption
Agreement evidencing their acceptance of such appointment. The Plan and, the
Trust Agreement, if applicable, shall be supplemented and modified by the terms
and conditions contained in this Adoption Agreement and shall be effective on
the Effective Date.
The Sponsor will inform the Employer of any amendments made to the Plan or the
discontinuance or abandonment of the Plan.
- -----------------------------------
1. SPONSOR DATA
------------
A. AIM DISTRIBUTORS, INC.
Name of Sponsor (or authorized representative)
B. 11 GREENWAY PLAZA- SUITE 1919
Address
HOUSTON, TX 77046
C. (713) 347-1919
Telephone Number
- -----------------------------------
II. EMPLOYER DATA
A. ___________________________________________________
Name of Employer and Employer Identification Number
B. ___________________________________________________
Address
C. (_____)____________________________________________
Telephone Number
D. ___________________________________________________
Employers Taxable Year End
E. ___________________________________________________
Plan Year End
F. The Employer is: [ ] A corporate entity
[ ] A non corporate entity
[ ] A corporation electing to be taxed under
Subchapter S
8
<PAGE>
G. ___________________________________________________
Effective Date (should be first day of a Plan Year)
H. If this is an amendment of an existing plan, complete the following:
______________________________________________________________________
Effective Date of Amendment (should be first day of a Plan Year)
______________________________________________________________________
Name of Prior Plan
______________________________________________________________________
Effective Date of Prior Plan
I. ______________________________________________________________________
Limitation Year, if different from E., above
III. ELIGIBILITY
A. Employees shall be eligible to participate in the Plan upon
completion of the eligibility requirements (complete 1 and 2)
(Plan section 3.1):
1. Years of Service. The Employee must complete (check one box):
[X] One Year of Service.
[ ] ____ Years of Service. (You can require less than or more
than one Year of Service, but not more than two (2). If
you select more than one Year of Service, the Employee
must be 100% vested once he becomes eligible, and you must
select vesting schedule B in section X of this Adoption
Agreement. If the Year of Service is or includes a
fractional year, an Employee will not be required to
complete any specified number of Hours of Service (sec IV,
A of this Adoption Agreement) to receive credit for such
fractional year.
2. Age. The Employee must attain age 21 (not greater than age
21).
B. The following Employees will not be eligible to participate in the
Plan (Plan section 3.1):
[X] Union Employees. Employees included in a unit of employees
covered by a collective bargaining agreement between the Employer
and Employee representatives (as defined in section 3.1(b)(i) of
the Plan), if retirement benefits were the subject of good faith
bargaining.
[X] Nonresident Aliens. Employees who are nonresident aliens and who
receive no earned income from the Employer which constitutes
income from sources within the United States. For purposes of
this section III, the term "Employee" includes all employees of
this Employer or any employer aggregated with this Employer under
sections 414(b), (c) or (m) or (o) of the Code and individuals who
are Leased Employees required to be considered Employees of any
such employer under section 414(n) or (o) of the Code. Therefore,
all employees of companies in a controlled group of businesses
will be eligible to participate in this plan.
- -----------------------------------
9
<PAGE>
IV. CREDITED SERVICE
A. The Plan provides that a Year of Service requires at least 1,000 Hours
of service during a Plan Year. If a lower number of hours is desired,
state the number here: 1,000 (Plan section 2.42).
B. The Plan permits Hours of Service to be determined by the use of
service equivalencies under one of the methods selected below (choose
one method)(Plan section 2.19):
1. [X] On the basis of actual hours for which an Employee is paid or
entitled to payment.
2. [ ] On the basis of days worked. An Employee will be credited with
ten (10) Hours of Service if under section 2.19 of the plan such
Employee would be credited with at least one (1) Hour of Service
during the day.
3. [ ] On the basis of weeks worked. An Employee will be credited
with forty-five (45) Hours of Service if under section 2.19 of the
Plan such Employee would be credited with at least one (1) Hour of
Service during the week.
4. [ ] On the basis of semimonthly payroll periods. An Employee will
be credited with ninety-five (95) Hours of Service if under section
2.19 of the Plan such Employee would be credited with at least one
(1) Hour of Service during the semimonthly payroll period.
5. [ ] On the basis of months worked. An Employee will be credited
with one hundred ninety (190) Hours of Service if under section
2.19 of the Plan such Employee would be credited with at least one
(1) Hour of Service during the month.
C. Service with a predecessor employer (choose 1 or 2)(Plan sections 3.3
and 8.5):
1. [X] No credit will be given for service with a predecessor
employer.
- or -
2. [ ] Credit will be given for service with the following
predecessor employer(s):
----------------------------------
NOTE: The Plan provides that if this is a continuation of a
predecessor plan, service under the predecessor plan must be
counted.
- ----------------------------------
V. COMPENSATION
A. Compensation (choose 1 or 2)(Plan section 2.7):
1. [ ] shall include
- or -
2. [X] shall not include
Employer Contributions made pursuant to a salary reduction agreement
which are not includable in the gross income of the Employee under
sections 125, 402(e)(3), 402(h) or 403(b) of the Code.
B. The effective date of the election in A. above shall be
___________________________ (but not earlier than the first day of the
first Plan Year beginning after 1986).
- ----------------------------------
10
<PAGE>
VI. CONTRIBUTIONS
A. Profit sharing plan formulas (choose 1 or 2)(Plan section 4.19(b)):
1. [X] Discretionary pursuant to Employer resolution. If no
resolution is adopted, then _0_% of Participants'
compensation.
-or-
2. [ ] ___% of Participants' Compensation, plus discretionary
amount, if any, by Employer resolution.
NOTE: Each of these formulas is subject to maximum limitations on
contributions as provided in the Plan and the Internal Revenue Code.
In no event may the Employer Contribution exceed 15% of the aggregate
compensation of all Participants for the year, plus up to 10% credit
carryover in certain circumstances. Additional limitations are
included in the Plan where the Employer also has another qualified
retirement plan. The limit on contributions and forfeitures allocated
to an individual participant's account, per year is generally the
lesser of 25% of compensation or $30,000.
- --------------------------------
VII. ALLOCATION OF EMPLOYER CONTRIBUTIONS
A. Formula (choose 1 or 2)(Plan section 5.3(b)). NOTE: If you provide
for hardship withdrawals you must use Formula 1.
1. [X] Nonintegrated Plan -- Employer contributions shall be
allocated to the accounts of all eligible Participants
prorated upon compensation.
-or-
2. [ ] Integrated Plan -- Employer contributions and forfeitures
shall be integrated with Social Security and allocated in
accordance with the provisions of Plan section 5.3(b). The
Plan's Integration Level shall be (choose (a),(b) or (c))):
(a) [ ] Taxable Wage Base. (The maximum amount considered as
wages for such year under section 3121(a)(1) of the
Internal Revenue Code (the Social Security taxable wage
base) as of the beginning of the Plan Year).
-or-
(b) [ ] $______ (a dollar amount not to exceed the Taxable
Wage Base).
-or-
(c) [ ] _____% of the Taxable Wage Base (not to exceed 100%).
NOTE: If you maintain any other plan in addition to this Plan,
only one plan may be integrated with Social Security.
B. Contribution Eligibility (Plan section 4.1(c)):
The Plan provides that all Participants will share in Employer
Contributions for the Plan Year, except the following (if elected):
[ ] Participants who terminate employment during the Plan year with
not more than 500 Hours of Service and who are not Employees as
of the last day of the Plan Year (other than Participants who
die, retire or become Totally and Permanently Disabled).
If a fewer number of hours than 500 is desired, state the number
here: _____.
11
<PAGE>
- --------------------------
VIII. DISTRIBUTIONS.
A. Normal Retirement Age is (choose 1 or 2)(Plan section 2.26):
1. [X] The date a Participant reaches age 65 (not more than 65
or less than 55). If no age is indicated, normal
retirement age shall be 65.
2. [ ] The later of age ____ (not more than 65) or the ____
(not more than 5th) anniversary of the day the
Participant commenced participation in the Plan. The
participation commencement date is the first day of the
first Plan Year in which the Participant commenced
participation in the Plan.
B. Early Retirement Date (choose 1 or 2)(Plan section 2.10):
1. [ ] Early Retirement Date is the first day of the month
coincident with or next following the date upon which a
Participant reaches age 55 (not less than 55) and
completes 5 years of service (not more than 15).
2. [X] Early Retirement will not be permitted under the Plan.
C. All distributions will be in the form of a lump sum in accordance with
the Safe Harbor Rules in Article 9, Section 9.6 of the Plan Document.
- --------------------------
IX. OPTIONAL FEATURES
A. Hardship withdrawals (choose 1 of 2)(Plan section 12.2):
1. [ ] The Plan permits hardship withdrawals.
- or -
2. [X] The Plan does not permit hardship withdrawals.
NOTE: The Plan may not provide hardship withdrawals if integration
with Social Security is elected in section VII.A.2.
B. Loans (choose 1 or 2)(Plan ARTICLE 13):
1. [ ] The Plan permits loans to Participants.
- or -
2. [X] The Plan does not permit loans to Participants.
NOTE: The Plan may not permit loans to Owner-Employees of
noncorporate entities or to Shareholder-Employees of
subchapter S corporations. If Plan loans are permitted, the
Trustee designated in section XVI of this Adoption Agreement
may not be the Sponsor's designated Trustee.]
C. Insurance (choose 1 or 2)(Plan ARTICLE 14):
1. [ ] The Plan permits Participants to designate a portion of
their Account to purchase life insurance contracts. (MUST
NOT be selected if Sponsor's designated trustee is appointed
as Trustee).
12
<PAGE>
The percentage of the Employer Contributions which may
be applied to purchase life insurance contracts shall
be equal to _____%.
-or -
2. [X] The Plan does not permit Participants to designate a
portion of their Account to purchase life insurance
contracts.
NOTE: Section 14.5 of the Plan provides certain limits on the amount
of Employer Contributions that can be applied to purchase life
insurance contracts.]
- ------------------------------
X. VESTING
Employer Contributions and earnings will become vested if the
Participant terminates employment for any reasons other than
retirement at or after Normal Retirement Age or Early Retirement Date,
death, or disability pursuant to the following schedule (choose A, B,
C or D) (Plan section 8.3):
<TABLE>
<CAPTION>
A. [ ] Years of
Service Vested Percentage
------- -------- ----------
<S> <C>
1 year 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 or more years 100%
</TABLE>
B. [ ] 100% vesting immediately after satisfaction of the
eligibility requirements.
NOTE: If a service requirement greater than one year is chosen for
eligibility in section III.A.1. of this Adoption Agreement, vesting
schedule B must be chosen.
C. [ ] 100% vesting after years of service (not to exceed
three).
- or -
<TABLE>
<CAPTION>
D. [ ] Years of
Service Vested Percentage
------- -------- ----------
<S> <C> <C>
1 year ___%
2 years ___% (not less than 20)
3 years ___% (not less than 40)
4 years ___% (not less than 60)
5 years ___% (not less than 80)
6 years ___% (not less than 100)
</TABLE>
- ------------------------------
XI. INVESTMENT CHOICES
A. [X] Investment of Trust assets may be selected only from
Shares or other investments offered by the Sponsor.
(AIM Distributors Inc., AIM Family of Funds)
B. [ ] ___% of the Trust assets must be invested in Shares
or other investments offered by the Sponsor with the
remainder in such other investments as may be
acceptable within the discretion of the Trustee.
13
<PAGE>
C. [ ] 50% of the Trust assets must be invested in Shares or
other investments offered by the Sponsor with the
remainder in such other investments as may be
acceptable within the discretion of the Trustee.
D. [ ] 25% of the Trust assets must be invested in Shares or
other investments offered by the Sponsor with the
remainder in such other investments as may be
acceptable within the discretion of the Trustee.
The Sponsor may impose additional limitations
relating to the type of permissible investments in
the Trust (Plan section 7.3).
- ------------------------------
XII. INVESTMENT AUTHORITY
Contributions to the Plan shall be invested by the Trustee in
accordance with instructions of the Employer or Plan Administrator
except that (choose A, B or C) (Plan section 7.2):
A. [ ] No exceptions; the or Plan Administrator shall make
all investment selections.
B. [ ] The Employer delegates all investment responsibility
to the Trustee. (MAY NOT be selected if Sponsor's
designated trustee is appointed as Trustee).]
C. [X] Each Participant [ ] may, [X] shall direct that:
1. [X] Amounts voluntarily contributed by such
Participant pursuant to section 4.3 of the
Plan, rollover contributions pursuant to
section 4.4 of the Plan and direct transfers
pursuant to section 4.5 of the Plan, if any,
- and/or -
2. [X] Employer Contributions on the Participant's
behalf, shall be invested in specified
investments offered by the Sponsor.
Participants may make or change such
directions by giving written notice to the
Plan Administrator. Reasonable restrictions
may be imposed on this privilege by the Plan
Administrator or the Sponsor for purposes of
administrative convenience.
- ------------------------------
XIII. TOP-HEAVY PROVISIONS
Participants who are eligible to receive the minimum allocation
provided by section 5.2 of the Plan shall receive a minimum allocation
of contributions and forfeitures under this Plan equal to 3% of
Compensation, or if lesser, the largest percentage of Compensation
allocated on behalf of any Key Employee for the Plan Year.
NOTE: If the Participant also participates in paired defined
contribution plan #002 (the money purchase pension plan), the
required minimum allocation must be made under paired defined
contribution plan #002 (the money purchase pension plan).
- ------------------------------
14
<PAGE>
XIV. ALLOCATION LIMITATIONS
COMPLETE THIS SECTION ONLY IF YOU MAINTAIN OR EVER MAINTAINED ANOTHER
QUALIFIED PLAN (OTHER THAN PAIRED PLAN #002) IN WHICH ANY PARTICIPANT
IN THIS PLAN IS (OR WAS) A PARTICIPANT OR COULD BECOME A PARTICIPANT.
THIS SECTION MUST ALSO BE COMPLETED IF THE EMPLOYER MAINTAINS A
WELFARE BENEFIT FUND, AS DEFINED IN SECTION 419(e) OF THE CODE, OR AN
INDIVIDUAL MEDICAL ACCOUNT, AS DEFINED IN SECTION 415(l)(2) OF THE
CODE, UNDER WHICH AMOUNTS ARE TREATED AS ANNUAL ADDITIONS WITH RESPECT
TO ANY PARTICIPANT IN THIS PLAN.
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a
master or prototype plan (choose either 1 or 2) (Plan section
6.3):
1. [ ] The provision of section 6.2 will apply as if the
other plan were a master or prototype plan.
- or -
2. [ ] (On an attachment, provide the method under which
the plans will limit total annual additions to the
maximum permissible amount, and will properly reduce
any excess amounts, in a manner that precludes
Employer discretion).
B. If the Participant is or has ever been a participant in a
defined benefit plan maintained by the Employer attach an
explanation of the method under which the plan involved will
satisfy the 1.0 limitation in a manner that precludes
Employer discretion.
- ------------------------------
XV. ADMINISTRATION
A. The Plan Administrator of the Plan will be (choose 1, 2, 3 or
4) (Plan sections 2.30 and 15.4):
1. [ ] The Trustee
- or -
2. [X] The Employer
- or -
3. [ ] An individual Plan Administrator designated
by the Employer
-----------------------------------
Name
-----------------------------------
Address
-----------------------------------
Signature
- or -
15
<PAGE>
4. [ ] A committee of two or more Employees
designated by the Employer:
-----------------------------
Name & Title
-----------------------------
Signature
-----------------------------
Name & Title
-----------------------------
Signature
-----------------------------
Name & Title
-----------------------------
Signature
NOTE: If no Plan Administrator has been designated or serving at any
time, the Employer will be deemed the Plan Administrator
(Plan section 15.4).
B. The Plan Administrator (including all members of a committee,
if a committee is named) is a Named Fiduciary for the Plan. If
other persons are also to be Named Fiduciaries, their names
and addresses are:
Name:
-------------------------------------------
Address:
----------------------------------------
------------------------------------------------
Signature
Name:
-------------------------------------------
Address:
----------------------------------------
------------------------------------------------
Signature
Name:
-------------------------------------------
Address:
----------------------------------------
------------------------------------------------
Signature
C. The Named Fiduciaries have all of the powers set forth in the
Plan. If any powers or duties are to be allocated among them,
or delegated to third parties, indicate below what the powers
or duties are and to whom they are to be delegated (Plan
section 15.3):
-------------------------------
-------------------------------
-------------------------------
-------------------------------
16
<PAGE>
XVI. THE TRUSTEE
A. The Employer hereby appoints the following to serve as
Trustee, and the trustee, by signing this Adoption Agreement
accepts the appointment (complete either A or B) (Plan section
2.39):
Name:
--------------------------------
Address:
-----------------------------
-----------------------------
Dated:
-------------------------------
(Signature of) Trustee
Name:
--------------------------------
Address:
-----------------------------
-----------------------------
Dated:
-------------------------------
(Signature of) Trustee
B. The Employer hereby appoints the Sponsor's designated
trustee(s) to serve as Trustee(s):
Name:
--------------------------------
Address:
-----------------------------
-----------------------------
Dated:
-------------------------------
(Signature of) Trustee
Name:
--------------------------------
Address:
-----------------------------
-----------------------------
Dated:
-------------------------------
(Signature of) Trustee
Name:
--------------------------------
Address:
-----------------------------
-----------------------------
Dated:
-------------------------------
(Signature of) Trustee
17
<PAGE>
VII. EMPLOYER SIGNATURE
The Employer acknowledges receipt of the current prospectus of the
investment companies designated by the Employer for its initial
investments under the Plan and represents that it has delivered a copy
thereof to each Participant in the Plan, and that it will deliver to
each Participant making contributions and each new Participant, a copy
of the then current prospectus of such investment companies. The
Employer further represents that the information in this Adoption
Agreement shall become effective only when approved and countersigned
by the Trustee. The right to reject this Adoption Agreement for any
reason is reserved by the sponsor.
This Adoption Agreement must be used only in conjunction with basic
plan document #01.
NOTE: An Employer who has ever maintained or who later adopts any
plan (including, after December 31, 1985, a welfare benefit
fund, as defined in section 419(e) of the Code, which provides
post-retirement medical benefits allocated to separate
accounts for Key Employees, as defined in section 419A(d)(3) of
the Code, or an individual medical account, as defined in
section 415(1)(2) of the Code), in addition to this Plan
(other than paired defined contribution plan #002), may not
rely on the opinion letter issued by the National Office of
the Internal Revenue Service as evidence that this Plan is
qualified under section 401 of the Internal Revenue Code. If
the Employer who adopts or maintains multiple plans wishes to
obtain reliance that the plans are qualified, application for a
determination letter should be made to the appropriate Key
District Director of Internal Revenue.
This Adoption Agreement consists of 11 pages.
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement
to be executed by its duly authorized officers this ___ day of ____.
-------------------------------
(Name of Employer)
By:
-------------------------------
(Name & Title)
Date:
------------------
18
<PAGE>
ADOPTING THE AIM MONEY PURCHASE PENSION PLAN
ADOPTION AGREEMENT #002
19
<PAGE>
ADOPTING THE AIM MONEY PURCHASE PENSION PLAN ADOPTION
AGREEMENT #002
To adopt the AIM Sponsored Money Purchase Pension Plan you will need to
complete the following forms:
o The Money Purchase Pension Adoption Agreement and Summary Plan
Description (SPD)
o A Money Purchase Pension Account Application
o An Enrollment and Beneficiary Designation Form for each participant.
PLAN STRUCTURE:
If you are establishing "pooled" investment accounts, utilizing a third party
administrator for record keeping:
o Submit only the AIM Money Purchase Profit Sharing and/or Profit Sharing
Plan Account Application indicating all the AIM Funds permitted as
investment options by the Plan. You must identify the Plan's trustees.
If you want AIM to establish separate mutual fund accounts for each plan
participant, registered in the plan's name:
o Submit the AIM Money Purchase Plan Account Application with the
participant enrollment forms (Section VII)
o Identify each participant's name, mailing address, SS # and their AIM
Fund's investment election on the enrollment form.
o The plan administrator must submit all contributions with a breakdown
identifying each participant, and their total contribution allocated
to the funds the participant has chosen.
o The minimum contribution per participant is $25 per fund, per
contribution submission.
o The maximum number of individual participants accounts AIM will
establish is 50 utilizing no more than 6 AIM Funds.
o Duplicate statements will be issued to your recordkeeper or
administrator if requested.
Return to:
AIM Fund Services
P.O. Box 4739
Houston, TX 77210-4739
ADOPTION AGREEMENT
To make it easy for you, the Money Purchase Pension Adoption Agreement has been
partially completed to reflect the retirement plans provisions most frequently
chosen. Please review the completed plan adoption agreement with your legal or
tax advisor to ensure that the plan provisions are correct. NOTE: If desired,
you may change any of the prechecked elections by making the appropriate change
and placing your initials and date next to the section being changed.
[X] PRE-CHECKED SECTIONS:
The key sections in this Adoption Agreement which have been completed are as
follows:
o All employees who are Age 21 and have fulfilled one year of service are
eligible for contributions. (Years of service cannot exceed 2 years:
all contributions are then 100% vested).
20
<PAGE>
o An employee who completes 1,000 hours of service, within 12 consecutive
months of their date of hire, is credited with a year of service for
initial eligibility. Only 500 hours of service are required in any year
thereafter for a participant to be eligible for a plan contribution.
There is no requirement that a participant be employed on the last day
of the plan year to receive a contribution in the year they separate
from service.
o After fulfilling age and service eligibility requirements, employees
will enter the plan on the plan anniversary date or the date which is
six months subsequent to each plan anniversary date. (Calendar Year =
January 1 & July 1)
o All union and non-resident alien employees are excluded from
participation.
o A MONEY PURCHASE PENSION PLAN REQUIRES A FIXED ANNUAL CONTRIBUTION FROM
THE EMPLOYER STATED AS A PERCENTAGE OF EACH ELIGIBLE EMPLOYEE'S
COMPENSATION (SECTION VI).
o The plan is not integrated with Social Security. If you choose to
integrate your contribution, AIM will not compute the allocation.
o Normal retirement age of 65.
o No Loans and No Hardship Distributions are permitted.
o No Life Insurance may be purchased by the plan
MONEY PURCHASE PENSION PLAN ADOPTION AGREEMENT
SECTIONS TO BE COMPLETED BY EMPLOYER
The following sections must be completed by the employer.
Section II: Employer Data (Page 2) - Complete A through G. If applicable,
Complete H and I. (Name, address, TIN, etc.)
Section VI: Contributions - Must complete percentage under A(1).
Section IX: Vesting - Choose the vesting schedule desired.
Section XV: Self Trusteed Plan - You must designate the trustee of this
plan. Neither AIM nor Boston Safe Deposit & Trust Company will
be the plan's trustee.
Section XVI: Employer Signature - Read the employer acknowledgment and
execute this section.
Fidelity Bond - Contact your insurance company regarding the purchase of a
fidelity bond which will cover the plan and plan fiduciaries.
The bond must be for at least $1,000 or an amount equal to 10%
of the plan's assets not to exceed $500,000.
21
<PAGE>
FAILURE TO PROPERLY COMPLETE THESE DOCUMENTS COULD RESULT IN DISQUALIFICATION
OF YOUR PLAN AND LOSS OF TAX BENEFITS. DEADLINE: NEW PLANS MUST BE EXECUTED BY
THE LAST DAY OF THE PLAN'S TAX YEAR (CALENDAR OR FISCAL).
PLAN ADMINISTRATION: NEITHER AIM DISTRIBUTIONS, NOR AIM FUND SERVICES WILL ACT
AS THE PLAN ADMINISTRATOR. AIM WILL NOT REVIEW PLAN DOCUMENTS, COMPUTE
CONTRIBUTION ALLOCATION, PROVIDE RECORD KEEPING SERVICES, PERFORM
DISCRIMINATION TEST, OR FILE FORM 5500. ALL ADMINISTRATIVE, TAX REPORTING AND
ACCOUNTING FUNCTIONS ARE THE RESPONSIBILITY OF THE PLAN SPONSOR OR APPOINTED
THIRD PARTY.
22
<PAGE>
MONEY PURCHASE PENSION ADOPTION AGREEMENT
FOR PROTOTYPE PAIRED DEFINED CONTRIBUTION PLAN
#002 SPONSORED BY
AIM DISTRIBUTORS, INC.
ADOPTION AGREEMENT #002
This is the Adoption Agreement for paired defined contribution plan #002 of
basic plan document #01, which is a combined prototype profit sharing/money
purchase pension defined contribution plan. This adoption agreement may be
adopted either singly or in combination with paired defined contribution plan
#001, a prototype profit sharing plan.
Note: Before executing this Adoption Agreement, the Employer should consult
with a tax advisor or attorney. Failure to properly complete this Adoption
Agreement may result in Plan disqualification.
- --------------------
The Employer hereby establishes a money purchase pension plan and a trust upon
the respective terms and conditions contained in the prototype paired defined
contribution plan (the "Plan") and the Trust Agreement annexed hereto and
appoints as Trustee of such trust the person(s) who have executed this Adoption
Agreement evidencing their acceptance of such appointment. The Plan, the Trust
Agreement, and the Custody Agreement, if applicable, shall be supplemented and
modified by the terms and conditions contained in this Adoption Agreement and
shall be effective on the Effective Date.
The Sponsor will inform the Employer of any amendments made to the Plan or the
discontinuance or abandonment of the Plan.
- --------------------
I. SPONSOR DATA
A. AIM DISTRIBUTORS, INC.
----------------------
Name of Sponsor (or authorized representative)
B. 11 GREENWAY PLAZA SUITE 1919
----------------------------
Address
HOUSTON, TX 77046
------------------
City State
C. (713) 347-1919
--------------
Telephone Number
- --------------------
II. EMPLOYER DATA
A.
----------------------------------------------
(Name of Employer and Employer Identification Number
B.
----------------------------------------------
Address
2. C. ( )
--- ------------------------------------------
Telephone Number
D.
-------------------------------
Employer's Taxable Year End
E.
-------------------------------
Plan Year End
23
<PAGE>
F. The Employer is: [ ] A corporate entity
[ ] A noncorporate entity
[ ] A corporation electing to be taxed under
Subchapter S
G.
-----------------------
Effective Date (should be first day of a Plan Year)
H. If this is an amendment of an existing plan, complete the following:
-----------------------
Effective Date of Amendment (should be first day of a Plan Year)
-----------------------
Name of Prior Plan
-----------------------
Effective Date of Prior Plan
I.
-----------------------
Limitation Year, if different from E., above
- ----------------------
III. ELIGIBILITY
A. Employee shall be eligible to participate in the Plan upon completion
of the eligibility requirements (complete 1 and 2)(Plan section 3.1):
1. Years of Service. The Employee must complete (check one box):
[X] One Year of Service
[ ] ___ Years of Service. (You can require less than or more
than one Year of Service, but not more than two (2). If you
select more than one Year of Service, the Employee must be
100% vested once he becomes eligible, and you must select
vesting schedule B in section IX of this Adoption Agreement.
If the Year of Service is or includes a fractional year, an
Employee will not be required to complete any specified
number of Hours of Service (Section IV, A of this Adoption
Agreement) to receive credit for such fractional year.
2. Age. The Employee must attain age 21 (not greater than age 21).
B. The following Employees will not be eligible to participate in the
Plan (Plan section 3.1):
[X] Union Employees. Employees included in a unit of employees
covered by a collective bargaining agreement between the
Employer and the Employee representatives (as defined in section
3.1(b)(i) of the Plan), if retirement benefits were the subject
of good faith bargaining.
[X] Nonresident Aliens. Employees who are nonresident aliens and
who receive no earned income from the Employer which constitutes
income from sources within the United States.
For purposes of this section III, the term "Employee" includes
all employees of this Employer or any employer aggregated with
this Employer under sections 414(b),(c),(m) or (o) of the Code
and individuals who are Leased Employees required to be
considered Employees of any such employer under section 414 (n)
or (o) of the Code.
- --------------------
24
<PAGE>
IV. CREDITED SERVICE
A. The Plan provides that a Year of Service requires at least 1,000 hours
during any Plan Year. If a lower number of hours is desired, state the
number here: 1,000 (Plan section 2.42).
B. The Plan permits Hours of Service to be determined by the use of
service equivalencies under one of the methods selected below (choose
one method) (Plan section 2.19):
1. [X] On the basis of actual hours of which an Employee is paid or
entitled to payment.
2. [ ] On the basis of days worked. An Employee will be credited
with ten (10) Hours of Service if under section 2.19 of the
Plan such Employee would be credited with at least one (1)
Hour of Service during the day.
3. [ ] On the basis of weeks worked. An Employee will be credited
with forty-five (45) Hours of Service if under section 2.19
of the Plan such Employee would be credited with at least
one (1) Hour of Service during the week.
4. [ ] On the basis of semimonthly payroll periods. An Employee
will be credited with ninety-five (95) Hours of Service if
under section 2.19 of the Plan such Employee would be
credited with at least one (1) Hour of Service during the
semimonthly payroll period.
- or -
5. [ ] On the basis of months worked. An Employee will be credited
with one hundred ninety (190) Hours of Service if under
section 2.19 of the Plan such Employee would be credited
with at least one (1) Hour of Service during the month.
C. Service with a predecessor employer (choose 1 or 2)(Plan sections 3.3
and 8.5):
1. [X] No credit will be given for service with a predecessor
employer.
- or -
2. [ ] Credit will be given for service with the following
predecessor employer(s):
---------------
NOTE: The Plan provides that if this is a continuation of a
predecessor plan, service under the predecessor plan must be
counted.
- --------------------------------
V. COMPENSATION
A. Compensation (choose 1 or 2)(Plan section 2.7):
1. [ ] shall include
- or -
2. [X] shall not include
Employer Contributions made pursuant to a salary reduction agreement
which are not includable in the gross income of the Employee under
sections 125, 402(a)(8), 402(h) or 403(b) of the Code.
B. The effective date of the election in A. above shall be __________
(but not earlier than the first day of the first Plan Year beginning
after 1986).
25
<PAGE>
VI. CONTRIBUTIONS
A. Formulas (choose 1 or 2)(Plan section 4.1.(a)):
1. [X] Plan no integrated with Social Security
The Employer will contribute ___% of compensation for each
Participant (not less than 3% if the profit sharing Adoption
Agreement is also adopted and, in any event, not more than 25%).
2. [ ] Integrated Plan - The Employer will contribute an amount
equal to ___% (base contribution percentage, not less than
3) of each Participant's Compensation (as defined in
section 2.7 of the Plan) for the Plan Year, up to the
Integration Level plus ___% (not less than 3% and not to
exceed the base contribution percentage by more than the
lesser of: (1) the base contribution percentage, or (2) the
Maximum Disparity Rate of such Participant's Compensation
in excess of the Integration Level.
a. [ ] Taxable Wage Base. (The maximum amount considered as
wages for such year under section 3121(a)(1) of the
Internal Revenue Code (the Social Security taxable
wage base) as of the beginning of the Plan Year).
-or-
b. [ ] $_________(a dollar amount not to exceed the Taxable
Wage Base).
-or-
c. [ ] ______% of the Taxable Wage Base (not to exceed 100%).
NOTE: If you maintain any other plan in addition to this Plan,
only one plan may be integrated with Social Security.
B. Forfeitures for a given Plan Year (choose 1 or 2)(Plan section 5.3(a)):
1. [ ] Shall be applied to reduce the Employer Contribution in that
year, or if in excess of the Employer Contribution for such Plan
Year, the excess amounts shall be used to reduce the Employer
Contribution in the next succeeding Plan Year or Years.
-or-
2. [ ] Shall be added to the Employer Contribution and allocated
accordingly.
C. Contribution Eligibility (Plan section 4.1(c)):
The Plan provides that all Participants will share in Employer
Contributions for the Plan Year, except the following (if elected):
[X] Participants who terminate employment during the Plan Year with not
more than 500 Hours of Service and who are not Employees as of the
last day of the Plan Year (other than Participants who die, retire or
become Totally and Permanently Disabled).
If a fewer number of hours than 500 is desired, state the number here:____.
26
<PAGE>
- ------------------------------
VII. DISTRIBUTIONS
A. Normal Retirement Age is (choose 1 or 2 )(Plan section 2.26):
1. [X] The date a Participant reaches age 65
(not more than 65 or less than 55.) If no age is indicated,
normal retirement age shall be 65.
-or-
2. [] The later of age ______ (not more than 65) or the ______
(not more than 5th) anniversary of the day the Participant
commenced participation in the Plan. The participation
commencement date is the first day of the first Plan Year
in which the Participant commenced participation in the
Plan.
B. Early Retirement (choose 1 or 2)(Plan section 2.10):
1. [] Early Retirement Date is the first day of the month
coincident with or next following the date upon which a
Participant reaches age 55 (not less than 55) and completes
5 years of service (not more than 15)
-or-
2. [X] Early Retirement will not be permitted under the Plan.
- ------------------------------
VIII. OPTIONAL FEATURES
A. Loans (choose 1 or 2)(Plan ARTICLE 13):
1. [] The Plan permits loans to Participants.
-or-
2. [X] The Plan does not permit loans to Participants.
NOTE: The Plan may not permit loans to Owner-Employees of noncorporate
entities or to Shareholder-Employees of subchapter S
corporations. If Plan loans are permitted, the Trustee
designated in section XV of this Adoption Agreement may not
be the Sponsor's designated Trustee.]
B. Insurance (choose 1 or 2)(Plan ARTICLE 14):
1. [ The Plan permits Participants to designate a portion of
their Account to purchase life insurance contracts. (MUST
NOT be selected if Sponsor's designated trustee is appointed
as Trustee).
The percentage of the Employer Contributions which may be
applied to purchase life insurance contracts shall be equal
to ___%.
-or-
2. [X] The Plan does not permit Participants to designate a portion
of their Account to purchase life insurance contracts.
NOTE: Section 14.5 of the Plan provides certain limits on the amount
of Employer contributions that can be applied to purchase life
insurance contracts.
27
<PAGE>
- ------------------------
IX. VESTING
Employer Contributions will become vested if the Participant terminates
employment for any reasons other than retirement, death, or disability
pursuant to the following schedule (chosen A, B, C or D) Plan section 8.3):
<TABLE>
<CAPTION>
A. [ ] Years of
Service Vested Percentage
-------------------------
<S> <C>
1 year 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 or more years 100%
</TABLE>
B. [ ] 100% vesting immediately after satisfaction of the eligibility
requirements.
NOTE: If a service requirement greater than one year is chosen for
eligibility in section III.A.1. of this Adoption Agreement,
vesting schedule B must be chosen).
C. [ ] 100% vesting after ____ years of service (not to exceed three).
- or -
<TABLE>
<CAPTION>
D. [ ] Years of
Service Vested Percentage
-------------------------
<S> <C>
1 year ___%
2 years ___%(not less than 20)
3 years ___%(not less than 40)
4 years ___%(not less than 60)
5 years ___%(not less than 80)
6 years ___%(not less than 100)
</TABLE>
- ------------------------
X. INVESTMENT CHOICES
A. [X] Investment of Trust assets may be selected only from Shares or
other investments offered by the Sponsor.
B. [ ] ___% of the Trust assets must be invested in Shares or other
investments offered by the Sponsor with the remainder in such
other investments as may be acceptable within the discretion of
the Trustee.]
C. [ ] 50% of the Trust assets must be invested in Shares or other
investments offered by the Sponsor with the remainder in such
other investments as may be acceptable within the discretion of
the Trustee.]
D. [ ] 25% of the Trust assets must be invested in Shares or other
investments offered by the Sponsor with the remainder in such
other investments as may be acceptable within the discretion of
the Trustee.]
The Sponsor may impose additional limitations relating to the
type of permissible investments in the Trust (Plan section 7.3).
28
<PAGE>
- ------------------------------
XI. INVESTMENT AUTHORITY
Contributions to the Plan shall be invested by the Trustee in accordance
with instructions of the Employer or Plan Administrator except that
(choose [A], [B] or [C])] (Plan section 7.2):
A. [ ] No exceptions; the Employer or Plan Administrator shall make
all investment selections.
B. [ ] The Employer delegates all investment responsibility to the
Trustee. (MUST NOT be selected if Sponsor's designated trustee
is appointed as Trustee.)]
-or-
C. [X] Each Participant [ ] may, [X] shall direct that:
1. [ ] Amounts voluntarily contributed by such Participant
pursuant to section 4.3 of the Plan rollover contributions
pursuant to section 4.4 of the Plan, and direct transfers
pursuant to section 4.5 of the Plan, if any,
-and/or-
2. [X] Employer Contributions on the Participant's behalf shall
be invested in specified investments offered by the
Sponsor. Participants may make or change such directions
by giving written notice to the Plan Administrator.
Reasonable restrictions may be imposed on this privilege
by the Plan Administrator or the Sponsor for purposes of
administrative convenience.
- ------------------------------
XII. TOP-HEAVY PROVISIONS
Participants who are eligible to receive the minimum allocation provided
by section 5.2 of the Plan shall receive a minimum contribution under
this Plan equal to 3% of Compensation, or if lesser, the largest
percentage of Compensation allocated on behalf of any Key Employee for
the Plan Year under this Plan and paired defined contribution plan #001.
NOTE: If the Participant also participates in paired defined
contribution plan #001 (the profit sharing plan), the required minimum
contribution must be made under this Plan, even if the integrated plan
combination formula is selected.
- ------------------------------
XIII. ALLOCATION LIMITATIONS
COMPLETED THIS SECTION ONLY IF YOU MAINTAIN OR EVER MAINTAINED ANOTHER
QUALIFIED PLAN (OTHER THAN PAIRED PLAN #001) IN WHICH ANY PARTICIPANT IN
THIS PLAN IS (OR WAS) A PARTICIPANT OR COULD BECOME A PARTICIPANT. THIS
SECTION MUST ALSO BE COMPLETED IF THE EMPLOYER MAINTAINS A WELFARE
BENEFIT FUND, AS DEFINED IN SECTION 419(e) OF THE CODE, OR AN INDIVIDUAL
MEDICAL ACCOUNT, AS DEFINED IN SECTION 415(1)(2) OF THE CODE, UNDER
WHICH AMOUNTS ARE TREATED AS ANNUAL ADDITIONS WITH RESPECT TO ANY
PARTICIPANT IN THIS PLAN.
A. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a master
or prototype plan (choose either 1 or 2)(Plan section 6.3):
1. [ ] The provisions of section 6.2 will apply as if the
other plan were a master or prototype plan.
29
<PAGE>
-or-
2. [ ] (On an attachment, provide the method under which the
plans will limit total annual additions to the
permissible amount, and will properly reduce any
excess amounts, in a manner that precludes
Employer discretion).
B. If the Participant is or has ever been a participant in a
defined benefit plan maintained by the Employer attach an
explanation of the method under which the plan involved will
satisfy the 1.0 limitation in a manner that precludes Employer
discretion.
- ------------------------------
XIV. ADMINISTRATION
A. The Plan Administrator of the Plan will be (choose [1], [2], [3]
or [4]) (Plan sections 2.30 and 15.4):
1. [ ] The Trustee
NOTE: If the Trustee designated in section XV of this Adoption
Agreement is the Sponsor's designated Trustee, it may be
appointed as Plan Administrator.
-or-
2. [X] The Employer
-or-
3. [ ] An individual Plan Administrator designated by the
Employer
--------------------------------------------------
Name
--------------------------------------------------
Address
--------------------------------------------------
-or-
4. [ ] A committee of two or more Employees designated by the
Employer:
--------------------------------------------------
Name & Title
--------------------------------------------------
Signature
--------------------------------------------------
Name & Title
--------------------------------------------------
Signature
--------------------------------------------------
Name & Title
--------------------------------------------------
30
<PAGE>
[Signature]
NOTE: If no Plan Administrator has been designated or serving at any time,
the Employer will be deemed the Plan Administrator (Plan section 15.4).
B. The Plan Administrator (including all members of a committee, if a
committee is named) is a Named Fiduciary for the Plan. If other persons are
also to be Named Fiduciaries, their names and addresses are:
Name:
-----------------------------------
Address:
--------------------------------
----------------------------------------
Name:
-----------------------------------
Address:
--------------------------------
----------------------------------------
Name:
-----------------------------------
Address:
--------------------------------
----------------------------------------
C. The Named Fiduciaries have all of the powers set forth in the Plan. If any
powers or duties are to be allocated among them, or delegated to third
parties, indicate below what the powers or duties are and to whom they are
to be delegated (Plan section 15.3):
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
***************************
XV. THE TRUSTEE
A. The Employer hereby appoints the following to serve as Trustee (Plan
section 2.39):
Name:
------------------------------------
Address:
----------------------------------
----------------------------------------
Dated:
---------------- ----------------------
(Signature of) Trustee
Name:
------------------------------
31
<PAGE>
Address:
------------------------------------
-------------------------------------------
Dated:
-------------- ----------------------
(Signature of) Trustee
Name:
--------------------------------------
Address:
-----------------------------------
-------------------------------------------
Dated:
-------------- ----------------------
(Signature of Trustee)
B. The Employer hereby appoints the Sponsor's designated trustee(s) to serve
as Trustee(s):
Name:
-------------------------------------
Address:
------------------------------------
-----------------------------------------
Dated:
--------------- -----------------------
(Signature of Trustee)
Name:
----------------------------------------
Address:
--------------------------------------
--------------------------------------------
Dated:
--------------- ------------------------
(Signature of Trustee)
Name:
----------------------------------------
Address:
--------------------------------------
--------------------------------------------
Dated:
--------------- ------------------------
(Signature of Trustee)
********************************
32
<PAGE>
XVI. EMPLOYER SIGNATURE
The Employer acknowledges receipt of the current prospectus of the
investment companies designated by the Employer for its initial investments
under the Plan and represents that it has delivered a copy thereof to each
Participant in the Plan, and that it will deliver to each Participant
making contributions and each new Participant, a copy of the then current
prospectus of such investment companies. The Employer further represents
that the information in this Adoption Agreement shall become effective
only when approved and countersigned by the Trustee. The right to reject
this Adoption Agreement for any reason is reserved.
This Adoption Agreement must be used only in conjunction with basic plan
document #01.
NOTE: An Employer who has ever maintained or who later adopts any plan
(including a welfare benefit fund, as defined in section 419(e) of the
Code, which provides post-retirement medical benefits allocated to
separate accounts for Key Employees, as defined in section 419A(d)(3)
of the Code, or an individual medical account as defined in section
415(l)(2) of the Code), in addition to this Plan (other than paired
plan #001), may not rely on the opinion letter issued by the National
Office of the Internal Revenue Service as evidence that this Plan is
qualified under section 401 of the Internal Revenue Code. If the
Employer who adopts or maintains multiple plans wishes to obtain
reliance that the plans are qualified, application for a
determination letter should be made to the appropriate Key District
Director of Internal Revenue.
This Adoption Agreement consists of 17 pages.
IN WITNESS WHEREOF, the Employer has caused this Adoption
Agreement to be executed by its duly authorized officers this _
day of ________________.
--------------------------------
(Name of Employer)
By:
--------------------------------
(Name & Title)
Date:
------------------
33
<PAGE>
MONEY PURCHASE PENSION AND PROFIT SHARING
PLAN BASIC DOCUMENT
34
<PAGE>
AMENDMENT TO THE
INVESTMENT COMPANY INSTITUTE
PROTOTYPE MONEY PURCHASE PENSION AND PROFIT SHARING PLAN
BASIC DOCUMENT #01
FIRST
The Plan is hereby amended by the word-for-word adoption of the model
language contained in Revenue Procedure 93-12, for distributions made on or
after January 1, 1993, as follows:
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this provision, a
Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the Distributee
in a Direct Rollover.
Definitions
(a) Eligible Rollover Distribution. An Eligible Rollover Distribution
is any distribution of all or any portion of the balance to the credit
of the Distributee, except that an Eligible Rollover Distribution does
not include: any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the Distributee or the joint lives
(or joint life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten (10) years or
more; any distribution to the extent such distribution is required
under section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
(b) Eligible Retirement Plan. An Eligible Retirement Plan is an
individual retirement account described in section 408(a) of the Code,
an individual retirement annuity described in section 408(b) of the
Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the Distributee's Eligible Rollover Distribution. However, in the case
of an Eligible Rollover Distribution to the surviving spouse, an
Eligible Retirement Plan is an individual retirement account or
individual retirement annuity.
(c) Distributee. A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving
spouse and the Employee's or former Employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in section 414(p) of the Code, are Distributees with regard
to the interest of the spouse or former spouse.
(d) Direct Rollover. A Direct Rollover is a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.
35
<PAGE>
SECOND
The Plan is hereby amended by the word-for-word adoption of the model language
contained in Revenue Procedure 94-13 as follows:
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the annual Compensation of each
Employee taken into account under the Plan shall not exceed the OBRA '93 Annual
Compensation Limit. The OBRA '93 Annual Compensation Limit is $150,000, as
adjusted by the Commissioner for increases in the cost-of-living in accordance
with section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding
12 months, over which Compensation is determine ("Determination Period")
beginning in such calendar year. If a Determination Period consists of fewer
than 12 months, the OBRA '93 Annual Compensation Limit will be multiplied by a
fraction, the numerator of which is the number of months in the Determination
period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in this
Plan to the limitation under section 401(a)(17) of the Code shall mean the OBRA
'93 Annual Compensation Limit set forth in this provision.
If Compensation for any prior Determination Period is taken into account in
determining an Employee's benefits accruing in the current Plan Year, the
Compensation for that prior Determination Period is subject to the OBRA '93
Annual Compensation Limit in effect for that prior Determination Period. For
this purpose, for Determination Periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 Annual
Compensation Limit is $150,000.
36
<PAGE>
MONEY PURCHASE PENSION AND
PROFIT SHARING PLAN
PLAN DOCUMENT
37
<PAGE>
PROTOTYPE MONEY PURCHASE PENSION
AND PROFIT SHARING PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
------- ----
ARTICLE 1
GENERAL
<S> <C> <C>
1.1 Purpose ...................................................................... 5
1.2 Trust ........................................................................ 5
ARTICLE 2
DEFINITIONS
2.1 Account ...................................................................... 5
2.2 Adoption Agreement ........................................................... 5
2.3 Affiliated Employers ......................................................... 5
2.4 Beneficiary ................................................................... 5
2.5 Break in Service ............................................................. 5
2.6 Code ......................................................................... 5
2.7 Compensation ................................................................. 5
2.8 Custodian .................................................................... 5
2.9 Determination Date ........................................................... 5
2.10 Early Retirement Date ......................................................... 5
2.11 Earned Income ................................................................ 6
2.12 Effective Date ............................................................... 6
2.13 Eligibility Computation Period ............................................... 6
2.14 Employee ..................................................................... 6
2.15 Employer ..................................................................... 6
2.16 Employer Contributions ....................................................... 6
2.17 Entry Dates .................................................................. 6
2.18 ERISA ........................................................................ 6
2.19 Hour of Service .............................................................. 6
2.20 Integration Level ............................................................ 7
2.21 Key Employee ................................................................. 7
2.22 Leased Employee .............................................................. 7
2.23 Maximum Disparity Rate ....................................................... 8
2.24 Maximum Profit Sharing Disparity Rate ........................................ 8
2.25 Non-Key Employee ............................................................. 8
2.26 Normal Retirement Age ........................................................ 8
2.27 Owner-Employee ............................................................... 8
2.28 Participant .................................................................. 8
2.29 Plan ......................................................................... 8
2.30 Plan Administrator ........................................................... 8
2.31 Plan Year .................................................................... 8
2.32 Self-Employed Individuals .................................................... 8
2.33 Shares ....................................................................... 8
2.34 Sponsor ...................................................................... 9
2.35 Taxable Wage Base ............................................................ 9
2.36 Total and Permanent Disability................................................ 9
2.37 Trust ........................................................................ 9
2.38 Trust Agreement .............................................................. 9
2.39 Trustee ...................................................................... 9
2.40 Valuation Date ............................................................... 9
2.41 Vesting Computation Period ................................................... 9
2.42 Year of Service ............................................................... 9
ARTICLE 3
ELIGIBILITY AND YEARS OF SERVICE
3.1 Eligibility Requirement ...................................................... 9
3.2 Participation and Service Upon Reemployment .................................. 9
3.3 Predecessor Employers ........................................................ 9
ARTICLE 4
CONTRIBUTIONS
4.1 Employer Contributions ....................................................... 9
4.2 Payment ...................................................................... 10
4.3 Nondeductible Voluntary Contributions by Participants......................... 10
4.4 Rollovers..................................................................... 10
</TABLE>
38
<PAGE>
<TABLE>
<S> <C> <C>
4.5 Direct Transfers ............................................................ 10
ARTICLE 5
ALLOCATIONS
5.1 Individual Accounts ......................................................... 10
5.2 Minimum Allocation .......................................................... 11
5.3 Allocation of Employer Contributions and Forfeitures ........................ 11
5.4 Coordination of Social Security Integration ................................. 12
5.5 Withdrawals and Distributions ............................................... 12
5.6 Determination of Value of Trust Fund and of Net Earnings or Losses .......... 12
5.7 Allocation of Net Earnings or Losses ........................................ 12
5.8 Responsibilities of the Plan Administrator .................................. 13
ARTICLE 6
LIMITATIONS ON ALLOCATIONS
6.1 Employers Who Do Not Maintain Other Qualified Plans ......................... 13
6.2 Employers Who Maintain Other Qualified Master
or Prototype Defined Contribution Plans ..................................... 13
6.3 Employers Who, In Addition to This Plan, Maintain Other Qualified Plans
Which are Defined Contribution Plans Other Than Master or Prototype Plans ... 14
6.4 Employers, Who In Addition To This Plan,
Maintain A Qualified Defined Benefit Plan ................................... 14
6.5 Definitions ................................................................. 14
ARTICLE 7
TRUST FUND
7.1 Receipt of Contributions by Trustee ......................................... 16
7.2 Investment Responsibility ................................................... 16
7.3 Investment Limitations ...................................................... 16
ARTICLE 8
VESTING
8.1 Nondeductible Voluntary Contributions and Earnings .......................... 16
8.2 Rollovers, Transfers and Earnings ........................................... 16
8.3 Employer Contributions and Earnings ......................................... 16
8.4 Amendments to Vesting Schedule .............................................. 17
8.5 Determination of Years of Service ........................................... 17
8.6 Forfeiture of Nonvested Amounts ............................................. 17
8.7 Reinstatement of Benefit..................................................... 18
ARTICLE 9
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
9.1 General...................................................................... 18
9.2 Qualified Joint and Survivor Annuity ........................................ 18
9.3 Qualified Preretirement Survivor Annuity .................................... 18
9.4 Definitions.................................................................. 18
9.5 Notice Requirements ......................................................... 19
9.6 Safe Harbor Rules ........................................................... 19
9.7 Transitional Rules .......................................................... 20
ARTICLE 10
DISTRIBUTION PROVISIONS
10.1 Vesting on Distribution Before Break In Service ............................. 21
10.2 Restrictions on Immediate Distributions ..................................... 21
10.3 Commencement of Benefits .................................................... 21
10.4 Early Retirement With Age and Service Requirement ........................... 22
10.5 Nontransferability of Annuities ............................................. 22
10.6 Conflicts With Annuity Contracts ............................................ 22
ARTICLE 11
TIMING AND MODES OF DISTRIBUTION
11.1 General Rules ............................................................... 22
11.2 Required Beginning Date ..................................................... 22
11.3 Limits on Distribution Periods .............................................. 22
11.4 Determination of Amount to be Distributed Each Year ......................... 22
</TABLE>
39
<PAGE>
<TABLE>
<S> <C> <C>
11.5 Death Distribution Provisions ............................................... 22
11.6 Designation of Beneficiary ................................................... 23
11.7 Definitions ................................................................. 23
11.8 Transitional Rules .......................................................... 24
11.9 Optional Forms of Benefit ................................................... 25
ARTICLE 12
WITHDRAWALS
12.1 Withdrawal of Nondeductible Voluntary Contributions ......................... 25
12.2 Hardship Withdrawals ........................................................ 25
12.3 Manner of Making Withdrawals ................................................ 25
I2.4 Limitations on Withdrawals .................................................. 26
ARTICLE 13
LOANS
13.1 General Provisions........................................................... 26
13.2 Administration of Loan Program............................................... 26
13.3 Amount of Loan............................................................... 26
13.4 Manner of Making Loans....................................................... 26
13.5 Terms of Loan................................................................ 27
13.6 Security for Loan............................................................ 27
13.7 Segregated Investment........................................................ 27
13.8 Repayment of Loan............................................................ 27
13.9 Default on Loan.............................................................. 27
13.10 Unpaid Amounts............................................................... 27
ARTICLE 14
INSURANCE
14.1 Insurance ................................................................... 27
14.2 Policies .................................................................... 27
14.3 Beneficiary ................................................................. 27
14.4 Payment of Premiums ......................................................... 28
14.5 Limitation on Insurance Premiums ............................................ 28
14.6 Insurance Company ........................................................... 28
14.7 Distribution of Policies .................................................... 28
14.8 Policy Features ............................................................. 29
14.9 Changed Conditions .......................................................... 29
14.10 Conflicts ................................................................... 29
ARTICLE 15
ADMINISTRATION
15.1 Duties and Responsibilities of Fiduciaries;
Allocation of Fiduciary Responsibility ...................................... 29
15.2 Powers and Responsibilities of the Plan Administrator ....................... 29
15.3 Allocation of Duties and Responsibilities ................................... 30
15.4 Appointment of the Plan Administrator ....................................... 30
15.5 Expenses .................................................................... 30
15.6 Liabilities ................................................................. 30
15.7 Claims Procedure ............................................................ 30
ARTICLE 16
AMENDMENT, TERMINATION AND MERGER
16.1 Sponsor's Power to Amend..................................................... 31
16.2 Amendment by Adopting Employer...............................................
16.3 Vesting Upon Plan Termination................................................ 31
16.4 Vesting Upon Complete Discontinuance of Contributions........................ 31
16.5 Maintenance of Benefits Upon Merger.......................................... 31
16.6 Special Amendments........................................................... 31
ARTICLE 17
MISCELLANEOUS
17.1 Exclusive Benefit of Participants and Beneficiaries ......................... 31
17.2 Nonguarantee of Employment................................................... 32
17.3 Rights to Trust Assets....................................................... 32
17.4 Nonalienation of Benefits.................................................... 32
17.5 Aggregation Rules............................................................ 32
17.6 Failure of Qualification..................................................... 32
17.7 Applicable Law............................................................... 32
</TABLE>
40
<PAGE>
ARTICLE 1
GENERAL
1.1 PURPOSE. The Employer hereby establishes this Plan to provide
retirement, death and disability benefits for eligible employees and their
Beneficiaries. This Plan is a standardized prototype paired defined contribution
plan and is designed to permit adoption of profit sharing provisions, money
purchase pension provisions, or both. The provisions herein and the selections
made by the Employer by execution of the money purchase pension or profit
sharing Adoption Agreement or Agreements, shall constitute the Plan. It is
intended that the Plan and Trust qualify under sections 401 and 501 of the
Internal Revenue Code of 1986, as amended and with the provisions of the
Employee Retirement Income Security Act of 1974, as amended.
1.2 TRUST. The Employer has simultaneously adopted a Trust authorizing a
Trustee to receive, invest, and distribute funds in accordance with the Plan.
ARTICLE 2
DEFINITIONS
2.1 ACCOUNT. The aggregate of the individual bookkeeping subaccounts
established for each Participant, as provided in section 5.1.
2.2 ADOPTION AGREEMENT. The written agreement or agreements of the
Employer and the Trustee by which the Employer establishes this Plan and adopts
the Trust Agreement forming a part hereof, as the same may be amended from
time to time. The Adoption Agreement contains all the options that may be
selected by the Employer. The information set forth in the Adoption Agreement
executed by the Employer shall be deemed to be a part of this Plan as if set
forth in full herein.
2.3 AFFILIATED EMPLOYERS. The Employer and any corporation which is a
member of a controlled group of corporations (as defined in section 414(b) of
the Code) which includes the Employer, any trade or business (whether or not
incorporated) which is under common control (as defined in section 414(c) of the
Code) with the Employer, or any service organization (whether or not
incorporated) which is a member of an affiliated service group (as defined in
sections 414(m) and (o) of the Code) which includes the Employer.
2.4 BENEFICIARY. The person or persons (natural or otherwise) designated
by a Participant in accordance with section 11.6 to receive any undistributed
amounts credited to the Participant's Account under the Plan at the time of the
Participant's death.
2.5 BREAK IN SERVICE. An Eligibility Computation Period or Vesting
Computation Period in which an Employee fails to complete more than five hundred
(500) Hours of Service.
2.6 CODE. The Internal Revenue Code of 1986, as amended from time to time,
or any successor statute.
2.7 COMPENSATION.
(a) Compensation will mean all of each Participant's W-2 earnings.
For purposes of determining allocations under Section 5.3, only
Compensation while the Employee is a Participant shall be
converted.
(b) For any self-employed individual covered under the Plan,
Compensation will mean Earned Income.
(c) Compensation shall include only that Compensation that is
actually paid to the Participant during the Plan Year.
(d) Notwithstanding the above, if elected by the Employer in the
Adoption Agreement, Compensation shall include any amount which is contributed
by the Employer pursuant to a salary reduction agreement and which is not
includable in the gross income of the Employee under sections 125, 402(e)(3),
402(h) or 403(b) of the Code. The effective date of this subsection shall be
elected by the Employer in the Adoption Agreement.
(e) The annual Compensation of each Participant taken into account
under the Plan for any year shall not exceed one hundred fifty thousand dollars
($150,000), as adjusted by the Secretary at the same time and in the same manner
as under section 415(d) of the Code. In determining the Compensation of a
Participant for purposes of this limitation, the rules of section 414(q)(6) of
the Code shall apply, except in applying such rules, the term "family" shall
include only the Spouse of the Participant and any lineal descendants of the
Participant who have not attained age nineteen (19) before the close of the
year. If, as a result of the application of such rules, the limitation is
exceeded, then (except for purposes of determining the portion of Compensation
up to the Integration Level to the extent this Plan provides for permitted
disparity), the limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined under this
section prior to the application of this limitation. The effective date of this
subsection shall be the first Plan Year beginning on or after January 1, 1989.
2.8 CUSTODIAN. The custodian, if any, designated in the Adoption
Agreement.
2.9 DETERMINATION DATE. With respect to any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year. For the first Plan
Year of the Plan, the last day of that Plan Year.
2.10 EARLY RETIREMENT DATE. The first day of the month coincident with or
next following the date upon which the Participant satisfies the early
retirement age and service requirements in the Adoption Agreement; provided,
however, such requirements may not be less than age fifty-five (55), nor more
than fifteen (15) Years of Service.
41
<PAGE>
2.11 EARNED INCOME. The net earnings from self-employment in the trade or
business with respect to which the Plan is established, for which personal
services of the individual are a material income-producing factor. Net earnings
will be determined without regard to items not included in gross income and the
deductions allocable to such items. Net earnings are reduced by contributions to
a qualified plan to the extent deductible under section 404 of the Code. Net
earnings shall be determined with regard to the deduction allowed to the
Employer by section 164(f) of the Code for taxable years beginning after
December 31, 1989.
2.12 EFFECTIVE DATE. The first day of the first Plan Year for which the
Plan is effective as specified in the Adoption Agreement.
2.13 ELIGIBILITY COMPUTATION PERIOD. For purposes of determining Years of
Service and Breaks in Service for eligibility to participate, the initial
Eligibility Computation Period shall be the twelve (12) consecutive month period
beginning with the day the Employee first performs an Hour of Service for the
Employer (employment commencement date). The succeeding twelve (12) consecutive
month periods commence with the first and each following anniversary of the
Employee's employment commencement date.
2.14 EMPLOYEE. Any person, including a Self-Employed Individual, who is
employed by the Employer maintaining the Plan or any other employer required to
be aggregated with such Employer under sections 414(b),(c),(m) or (o) of the
Code. The term "Employee" shall also include any Leased Employee deemed to be an
Employee of any Employer described above as provided in sections 414(n) or (o)
of the Code.
2.15 EMPLOYER. The corporation, proprietorship, partnership or other
organization that adopts the Plan by execution of an Adoption Agreement.
2.16 EMPLOYER CONTRIBUTIONS. The contribution of the Employer to the Plan
and Trust as set forth in section 4.1 and the Adoption Agreement.
2.17 ENTRY DATES. The Effective Date shall be the first Entry Date.
Thereafter, the Entry Dates shall be the first day of each Plan Year and the
first day of the seventh month of each Plan Year.
2.18 ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
2.19 HOUR OF SERVICE.
(a) Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. These hours shall be credited to
the Employee only for the computation period or periods in which the duties are
performed; and
(b) Each hour for which an Employee is paid, or entitled to payment,
by the Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability), layoff,
jury duty, military duty, or leave of absence. No more than five hundred one
(501) Hours of Service shall be credited under this paragraph to an Employee on
account of any single, continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period). Hours
under this paragraph will be calculated and credited pursuant to section
2530.200b-2 of the Department of Labor regulations which are incorporated herein
by this reference.
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under paragraph (a) or paragraph (b), as the
case may be, and under this paragraph (c). These hours shall be credited to
the Employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the award,
agreement, or payment is made.
(d) Solely for purposes of determining whether an Employee has a Break
in Service, Hours of Service shall also include an uncompensated authorized
leave of absence not in excess of two (2) years, or military leave while the
Employee's reemployment rights are protected by law or such additional or other
periods as granted by the Employer as military leave (credited on the basis of
forty (40) Hours of Service per each week or eight (8) Hours of Service per
working day), provided the Employee returns to employment at the end of his
leave of absence or within ninety (90) days of the end of his military leave,
whichever is applicable.
(e) Hours of Service will be credited for employment with other
members of an affiliated service group (under section 414(m)), a controlled
group of corporations (under section 414(b)), or a group of trades or businesses
under common control (under section 414(c)) of which the adopting Employer is a
member, and any other entity required to be aggregated with the Employer
pursuant to section 414(o) and the regulations thereunder. Hours of Service will
also be credited for any individual considered an Employee for purposes of this
Plan under section 414(n) or section 414(o) and the regulations thereunder.
(f) Solely for purposes of determining whether an Employee has a Break
in Service, Hours of Service shall also include absence from work for maternity
or paternity reasons, if the absence begins on or after the first day of the
first Plan Year beginning after 1984. During this absence, the Employee shall be
credited with the Hours of Service which would have been credited but for the
absence, or, if such hours cannot be determined with eight (8) hours per day.
An absence from work for maternity or paternity reasons means an absence:
(i) by reason of the pregnancy of an Employee;
(ii) by reason of the birth of a child of the Employee;
42
<PAGE>
(iii) by reason of the placement of a child with
the Employee in connection with adoption; or
(iv) for purposes of caring for such a child for a
period immediately following such birth or placement.
These Hours of Service shall be credited in the computation period following
the computation period in which the absence begins, except as necessary to
prevent a Break in Service in the computation period in which the absence
begins. However, no more than five hundred one (501) Hours of Service will be
credited for purposes of any such maternity or paternity absence from work.
(g) The Employer may elect to compute Hours of Service by
the use of one of the service equivalencies in the Adoption Agreement. Only one
method may be selected. If selected, the service equivalency must be applied to
all Employees covered under the Plan.
(h) If the Employer amends the method of crediting
service from the elapsed time method described in section 1.410 (a)-7 of the
Treasury regulations to the Hours of Service computation method by the adoption
of this Plan, or an Employee transfers from a plan under which service is
determined on the basis of elapsed time, the following rules shall apply for
purposes of determining the Employee's service under this Plan up to the time
of amendment or transfer:
(i) the Employee shall receive credit, as of the
date of amendment or transfer, for a number of Years of Service equal to the
number of one (1) year periods of service credited to the Employee as of the
date of the amendment or transfer; and
(ii) the Employee shall receive credit in the
applicable computation period which includes the date of amendment or transfer,
for a number of Hours of Service determined by applying the weekly service
equivalency specified in paragraph (g) to any fractional part of a year
credited to the Employee under this paragraph (h) as of the date of amendment
or transfer. The use of the weekly service equivalency shall apply to all
Employees who formerly were credited with service under the elapsed time
method.
2.20 INTEGRATION LEVEL. The Taxable Wage Base or such lesser amount
elected by the Employer in the Adoption Agreement.
2.21 KEY EMPLOYEE.
(a) Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the determination period
was an officer of the Employer if such individual's annual Compensation exceeds
fifty percent (50%) of the dollar limitation under section 415(b)(1)(A) of the
Code; an owner (or considered an owner under section 318 of the Code) of one of
the ten (10) largest interests in the Employer if such individual's
Compensation exceeds one hundred percent (100%) of the dollar limitation under
section 415(c)(1)(A) of the Code; a Five Percent (5%) Owner of the Employer; or
a one percent (1%) owner of the Employer who has annual Compensation of more
than one hundred fifty thousand dollars ($150,000).
(b) For purposes of this section, annual Compensation
means compensation as defined in section 415(c)(3) of the Code, but including
amounts contributed by the Employer pursuant to a salary reduction agreement
which are excludable from the Employee's gross income under sections 125,
402(a)(8), 402(h) or 403(b) of the Code.
(c) For purposes of this section, determination period is
the Plan Year containing the Determination Date and the four (4) preceding Plan
Years.
2.22 LEASED EMPLOYEE.
(a) Any person (other than an Employee of any of the
Affiliated Employers) who, pursuant to an agreement between any of the
Affiliated Employers and any other person ("leasing organization"), has
performed service for any of the Affiliated Employers (or for any of the
Affiliated Employers and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full-time basis for a period of at
least one (1) year and such services are of a type historically performed by
employees in the Affiliated Employer's business field. Contributions or benefits
provided a Leased Employee by the leasing organization which are attributable
to services performed for the Affiliated Employer shall be treated as provided
by the Affiliated Employer.
(b) A Leased Employee shall not be considered an Employee
of an Affiliated Employer if:
(i) such employee is covered by a money purchase
pension plan providing:
(1) a nonintegrated employer
contribution rate of at least ten percent (10%) of compensation (as defined in
section 415(c)(3) of the Code), but including amounts contributed pursuant to a
salary reduction agreement which are excludable from the employee's gross
income under sections 125, 402(a)(8), 402(h) or 403(b) of the Code;
(2) immediate participation; and
(3) full and immediate vesting.
and
(ii) Leased Employee's do not constitute more than
twenty percent (20%) of the Affiliated
Employees non-Highly-Compensated workforce.
(c) The determination of whether a person is a
Leased Employee will be made pursuant to
section 414(n) of the Code.
43
<PAGE>
2.23 MAXIMUM DISPARITY RATE. The lesser of.
(a) five and seven-tenths percent (5.7%);
(b) the applicable percentage determined in accordance
with the table below:
if the Integration Level is
<TABLE>
<CAPTION>
The Applicable
More Than But Not More Than Percentage Is:
- --------- ----------------- --------------
<S> <C> <C>
$0 X * 5.7%
X of TWB 80% Of TWB 4.3%
80% of TWB Y ** 5.4%
</TABLE>
* X = the greater of $10,000 or 20% of the Taxable Wage Base.
** Y = any amount more then 80% of the Taxable Wage Base but less than
100% of the Taxable Wage Base.
"TWB" means the Taxable Wage Base.
If the Integration Level used is equal to the Taxable Wage Base, the applicable
percentage is five and seven-tenths percent (5.7%).
2.24 MAXIMUM PROFIT SHARING DISPARITY RATE. The lesser of:
(a) two and seven-tenths percent (2.7%);
(b) the applicable percentage determined in accordance
with the table below:
If the Integration Level is
<TABLE>
<CAPTION>
The Applicable
More Than But Not More than Percentage Is:
- --------- ----------------- --------------
<S> <C> <C>
$0 X * 2.7%
X of TWB 80% of TWB 1.3%
80% of TWB Y ** 2.4%
</TABLE>
* X = the greater of $10,000 or 20% of the Taxable Wage Base.
** Y = any amount more than 80% of the Taxable Wage Base but less than
100 of the Taxable Wage Base.
"TWB" means the Taxable Wage Base.
If the Integration Level used is equal to the Taxable Wage Base, the applicable
percentage is two and seven-tenths percent (2.7%).
2.25 NON-KEY EMPLOYEE. Any Employee or former Employee who is not a
Key Employee. In addition, any Beneficiary of a Non-Key Employee shall be
treated as a Non-Key Employee.
2.26 NORMAL RETIREMENT AGE. The age selected in the Adoption
Agreement, but not less than age fifty-five (55). If the Employer enforces a
mandatory retirement age, the Normal Retirement Age is the lesser of that
mandatory age or the age specified in the Adoption Agreement.
2.27 OWNER-EMPLOYEE. An individual who is a sole proprietor, or who
is a partner owning more than ten percent (10%) of either the capital or
profits interest of a partnership.
2.28 PARTICIPANT. A person who has met the eligibility requirements
of section 3.1 and whose Account hereunder has been neither completely
forfeited nor completely distributed.
2.29 PLAN. The prototype paired defined contribution profit sharing
and money purchase pension plan provided under this basic plan document.
References to the Plan shall refer to the profit sharing provisions, the money
purchase pension provisions, or both, as the context may require.
2.30 PLAN ADMINISTRATOR. The person, persons or entity appointed by
the Employer pursuant to ARTICLE 15 to manage and administer the Plan.
2.31 PLAN YEAR. The twelve (12) consecutive month period designated
by the Employer in the Adoption Agreement.
2.32 SELF-EMPLOYED INDIVIDUAL. An individual who has Earned Income
for the taxable year from the trade or business for which the Plan is
established, or an individual who would have had Earned Income for the taxable
year but for the fact that the trade or business had no net profits for the
taxable year.
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2.33 SHARES. Shares of stock in any regulated investment company
registered under the Investment Company Act of 1940 that are made available for
investment purposes as an investment option under this Plan.
2.34 SPONSOR. The sponsor designated in the Adoption Agreement
which has made this Plan available to the Employer.
2.35 TAXABLE WAGE BASE. The maximum amount of earnings which may be
considered wages for a year under section 3121(a)(1) of the Code in effect as
of the beginning of the Plan Year.
2.36 TOTAL AND PERMANENT DISABILITY. The inability of the
Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment, which condition, in the
opinion of a physician chosen by the Plan Administrator, can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than twelve (12) months.
2.37 TRUST. The fund maintained by the Trustee for the investment
of Plan assets in accordance with the terms and conditions of the Trust
Agreement.
2.38 TRUST AGREEMENT. The agreement between the Employer and the
Trustee under which the assets of the Plan are held, administered, and managed.
The provisions of the Trust Agreement shall be considered an integral part of
this Plan as if set forth fully herein.
2.39 TRUSTEE. The individual or corporate Trustee or Trustees
under the Trust Agreement as they may be constituted from time to time.
2.40 VALUATION DATE. The last day of each Plan Year and such other
dates as may be determined by the Plan Administrator, as provided in section
5.6 for valuing the Trust assets.
2.41 VESTING COMPUTATION PERIOD. The Plan Year.
2.42 YEAR OF SERVICE. An Eligible Computation Period, Vesting
Computation Period, or Plan Year, whichever is applicable, during which an
Employee has completed at least one thousand (1,000) Hours of Service (whether
or not continuous). The Employer may, in the Adoption Agreement, specify a
fewer number of hours.
ARTICLE 3
ELIGIBILITY AND YEARS OF SERVICE
3.1 ELIGIBILITY REQUIREMENTS.
(a) Each Employee of the Affiliated Employers shall
become a Participant in the Plan as of the first Entry Date after the date on
which the Employee has satisfied the minimum age and service requirements
specified in the Adoption Agreement.
(b) The Employer may elect in the Adoption Agreement to
exclude from participation:
(i) Employees included in a unit of employees
covered by a collective bargaining agreement between the Employer and Employee
representatives, if retirement benefits were the subject of good faith
bargaining. For this purpose, the term "Employee representatives" does not
include any organization more than half of whose members are Employees who are
owners, officers, or executives of the Employer; and
(ii) nonresident aliens who receive no earned
income from the Employer which constitutes income from sources within the
United States.
3.2 PARTICIPATION AND SERVICE UPON REEMPLOYMENT. Upon the
reemployment of any Employee, the following rules shall determine his
eligibility to participate in the Plan and his credit for prior service.
(a) Participation. If the reemployed Employee was a
Participant in the Plan during his prior period of employment, he shall be
eligible upon reemployment to resume participation in the Plan. If the
reemployed Employee was not a Participant in the Plan, he shall be considered a
new Employee and required to meet the requirements of section 3.1 in order to
be eligible to participate in the Plan, subject to the reinstatement of credit
for prior service under paragraph (b) below.
(b) Credit for Prior Service. In the case of any Employee
who is reemployed before or after incurring a Break in Service, any Hour of
Service and Year of Service credited to the Employee at the and of his prior
period of employment shall be reinstated as of the date of his reemployment.
3.3 PREDECESSOR EMPLOYERS. If specified in the Adoption Agreement,
Years of Service with a predecessor employer will be treated as service for the
Employer for eligibility purposes; provided, however, If the Employer maintains
the plan of a predecessor employer, Years of Service with such employer will be
treated as service with the Employer without regard to any election.
ARTICLE 4
CONTRIBUTIONS
4.1 EMPLOYER CONTRIBUTIONS.
(a) Money Purchase Pension Contributions. For each Plan
Year, the Employer shall contribute to the Trust an amount equal to such
uniform percentage of Compensation of each eligible Participant as may be
determined by the Employer in accordance with the money purchase pension
contribution formula specified in the Adoption Agreement. Subject to the
limitations of section 5.4, the money purchase pension contribution formula may
be integrated with Social Security, as set forth in the Adoption Agreement.
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(b) Profit Sharing Contribution. For each Plan Year, the
Employer shall contribute to the Trust an amount as may be determined by the
Employer in accordance with the profit sharing formula set forth in the
Adoption Agreement.
(c) Eligible Participants. Subject to the Minimum
Allocation rules of section 5.2 and the exclusions specified in this section,
each Participant shall be eligible to share in the Employer Contribution. An
Employer may elect in the Adoption Agreement that Participants who terminate
employment during the Plan Year with not more than five hundred (500) Hours of
Service and who are not Employees as of the last day of the Plan Year (other
than Participants who die, retire or become totally and Permanently Disabled
during the Plan Year) shall not be eligible to share in the Employer
Contribution. An Employer may further elect in the Adoption Agreement to
allocate a contribution on behalf of a Participant who completes fewer than
five hundred (500) Hours of Service and is otherwise ineligible to share in the
Employer Contribution. If the Employer fails to specify in the Adoption
Agreement the number of Hours of Service required to share in the Employer
Contribution, the number shall be five hundred (500) Hours of Service.
(d) Contribution Limitation. In no event shall any
Employer Contribution exceed the maximum amount deductible from the Employer's
income under section 404 of the Code, or the maximum limitations under section
415 of the Code provided in ARTICLE 6.
4.2 PAYMENT. All Employer Contributions to the Trust for any Plan
Year shall be made either in one lump-sum or in installments in U.S. currency,
by check, or in Shares within the time prescribed by law, including extensions
granted by the Internal Revenue Service, for filing the Employer's federal
income tax return for the taxable year with or within which such Plan Year
ends. All Employer Contributions to the Trust for a money purchase pension plan
for any Plan Year shall be made within the time prescribed by regulations under
section 412(c)(10) of the Code.
4.3 NONDEDUCTIBLE VOLUNTARY CONTRIBUTIONS BY PARTICIPANTS.
(a) This Plan will not accept nondeductible Employee
contributions for Plan Years beginning after the Plan Year in which this Plan
is adopted by the Employer. Employee contributions made with respect to Plan
years beginning after December 31, 1986 will be limited so as to meet the
nondiscrimination test of section 401(m).
(b) A separate account shall be maintained by the Trustee
for the nondeductible Employee contributions of each Participant.
(c) Employee contributions and earnings thereon shall be
fully vested and nonforfeitable at all times.
(d) The provisions of this section shall apply to
Employee contributions made prior to the first Plan Year after the Plan Year in
which the Employer adopts this Plan.
4.4 ROLLOVERS.
(a) Subject to the approval of the Plan Administrator, a
participant who has participated in any other qualified plan described in
section 401(a) of the Code or in a qualified annuity plan described in section
403(a) of the Code shall be permitted to make a rollover contribution in the
form of cash to the Trustee of an amount received by the Participant that is
attributable to participation in such other plan (reduced by any nondeductible
voluntary contributions he made to the plan). provided that the rollover
contribution complies with all requirements of sections 402(c) or 403(a)(4) of
the Code, whichever is applicable.
(b) Before approving such a Participant rollover, the
Plan Administrator may request from the Participant or the Employer any
documents which the Plan Administrator, in its discretion, deems necessary for
such rollover.
(c) Any rollover contribution to the Trust shall be
credited to the Participants rollover subaccount established under section 5.1
and separately accounted for.
4.5 DIRECT TRANSFER.
(a) The Plan shall accept a transfer of assets directly
from another plan qualified under sections 401(a) or 403(a) of the Code only if
the Plan Administrator, in its sole discretion, agrees to accept such a
transfer. In determining whether to accept such a transfer the Plan
Administrator shall consider the administrative inconvenience engendered by
such a transfer and any risks to the continued qualification of the Plan under
section 401(a) of the Code. Acceptance of any such transfer shall not preclude
the Plan Administrator from refusing any subsequent such transfers.
(b) Any transfer of assets accepted under this section
shall be credited to the Participant's direct transfer subaccount and shall be
separately accounted for at all times and shall remain subject to the
provisions of the transferor plan (as it existed at the time of such transfer)
to the extent required by section 411(d)(6) of the Code (including, but not
limited to, any rights to Qualified Joint and Survivor Annuities and qualified
preretirement survivor annuities) as if such provisions were pan of the Plan.
In all other respects, however, such transferred assets will be subject to the
provisions of the Plan.
(c) Assets accepted under this section shall be fully
vested and nonforfeitable.
(d) Before approving such a direct transfer, the Plan
Administrator may request from the Participant or the Employer (or the prior
employer) any documents the Plan Administrator, in its discretion, deems
necessary for such direct transfer.
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ARTICLE 5
ALLOCATIONS
5.1 INDIVIDUAL ACCOUNTS. The Plan Administrator shall establish
and maintain an Account in the name of each Participant. The Account shall
contain the following subaccounts:
(a) A money purchase pension contribution subaccount to
which shall be credited each such Participant's share of (i) Employer
Contributions under section 4.1 (a); (ii) the net comings or net losses on the
investment of the assets of the Trust; (iii) distributions; and (iv) dividends,
capital gain distributions and other earnings received on any Shares credited
to the Participant's subaccount;
(b) A profit sharing contribution subaccount to which
shall be credited each such Participant's share of (i) Employer Contributions
under section 4.1 (b); (ii) forfeitures; (iii) the net earnings or net losses
on the investment of the assets of the mat; (iv) distributions; and (v)
dividends, capital gain distributions and other earnings received on any
Shares credited to the Participant's subaccount;
(c) A nondeductible voluntary contribution subaccount to
which shall be credited (i) nondeductible voluntary contributions by the
Participant under section 4.3; (ii) the net earnings or net losses on the
investment of the assets of the Trust; (iii) distributions; and (iv) dividends,
capital gain distributions and other earnings received on any Shares credited
to the Participant's subaccount;
(d) A direct transfer subaccount to which shall be
credited (i) contributions to the Trust accepted under section 4.5(a); (ii) the
not earnings or net losses on the investment of the assets of the Trust; (iii)
distributions; and (iv) dividends, capital gain distributions and other
earnings received on any Shares credited to the Participant's subaccount;
(e) A rollover subaccount to which shall be credited (i)
contributions to the Trust accepted under section 4.4(a); (ii) the net earnings
or net losses on the investment of the assets of the Trust; (iii)
distributions; and (iv) dividends, capital gain distributions and other
earnings received on any Shares credited to the Participant's subaccount.
5.2 MINIMUM ALLOCATION.
(a) Except as otherwise provided in this section, the
Employer Contributions and forfeitures allocated on behalf of any Participant
who is not a Key Employee shall not be less than the lesser of three percent
(3%) of such Participant's Compensation or in the case where the Employer has
no defined benefit plan which designates this Plan to satisfy section 401 of
the Code, the largest percentage of Employer Contributions and forfeitures, as
a percentage of the first one hundred and fifty thousand dollars ($150,000) of
the Key Employee's Compensation, allocated on behalf of any Key Employee for
that year. The minimum allocation is determined without regard to any Social
Security contribution. This minimum allocation shall be made even though, under
other Plan provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for the year
because of (i) the Participant's failure to complete one thousand (1,000) Hours
of Service (or any equivalent provided in the Plan); or (ii) the Participant's
failure to make mandatory Employee contributions to the Plan; or (iii)
Compensation less than a stated amount. For purposes of this subsection, all
defined contribution plans required to be included in an aggregation group
under section 416(g)(2)(A)(i) shall be treated as a single plan.
(b) For purposes of computing the minimum allocation,
Compensation shall mean Compensation as defined in section 6.5(b) of the Plan.
(c) The provision in subsection (a) above shall not apply
to any Participant who was not employed by the Employer on the last day of the
Plan Year.
(d) The provision in subsection (a) above shall not apply
to any Participant to the extent the Participant is covered under any other
plan or plans of the Employer and the Employer has provided in the Adoption
Agreement that the minimum allocation or benefit requirement applicable to
top-heavy plans will be met in the other plan or plans.
(e) The minimum allocation required (to the extent
required to be nonforfeitable under section 416(b)) may not be forfeited under
section 411 (a)(3)(B) or 411(a)(3)(D).
5.3 ALLOCATION OF EMPLOYER CONTRIBUTIONS AND FORFEITURES.
(a) All money purchase pension contributions for a given
Plan Year shall be allocated to the Account of the Participant for whom such
contribution was made. Any forfeiture from a Participant's money purchase
pension contribution subaccount arising under the Plan for a given Plan Year
shall be applied as specified In the Adoption Agreement, either (i) to reduce
the Employer Contribution in that year, or if in excess of the Employer
Contribution for such Plan Year, the excess amounts shall be used to reduce the
Employer Contribution in the next succeeding Plan Year or Years or (ii) to be
added to the Employer Contributions and allocated accordingly.
(b) All profit sharing contributions and forfeitures from
a Participant's profit sharing contribution subaccount will be allocated to the
Account of each Participant in the ratio that such Participant's Compensation
bears to the Compensation of all Participants. However, if the profit sharing
contribution formula selected in the Adoption Agreement is integrated with
Social Security, profit sharing contributions for the Plan Year plus any
forfeitures will be allocated to Participants' Accounts as follows:
(i) Step One. Contributions and forfeitures will
be allocated to each Participant's Account in the ratio that each Participant's
total Compensation bears to all Participants' total Compensation, but not in
excess of three percent (3%) of each Participant's Compensation. (Step One is
not applicable if the Employer enters into the money purchase pension Adoption
Agreement).
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(ii) Step Two. Any contributions and forfeitures
remaining after the allocation in Step One (if any) will be allocated to each
Participant's Account in the ratio that each Participant's Compensation for the
Plan Year in excess of the Integration Level bears to the excess Compensation
of all Participants, but not in excess of three percent (3%). (Step Two is not
applicable if the Employer enters into the money purchase pension Adoption
Agreement).
(iii) Step Three. Any contributions and
forfeitures remaining after the allocation in Step Two (if any) will be
allocated to each Participant's Account in the ratio that the sum of each
Participant's total Compensation and Compensation in excess of the Integration
Level bears to the sum of all Participants' total Compensation and Compensation
in excess of the Integration Level, but not in excess of whichever of the
following is applicable:
(1) if the Employer has not adopted the money
purchase pension Adoption Agreement, then the Maximum Profit Sharing Disparity
Rate; or
(2) If the Employer has adopted the money
purchase pension Adoption Agreement, then the lesser of:
(A) the percentage of each Participant's
Compensation for the Plan Year up to the Integration Level determined by
dividing the allocation by such Compensation (the base contribution
percentage); or
(B) the Maximum Disparity Rate.
(iv) Step Four. Any remaining contributions or
forfeitures will be allocated to each Participant's Account in the ratio that
each Participant's total Compensation for the Plan Year bears to all
Participants' total Compensation for that year.
(c) Notwithstanding anything in (a) or (b) above to the
contrary, forfeitures arising under a Participant's money purchase pension
contribution subaccount will only be used to reduce the contributions of the
Participant's Employer who adopted this Plan, and forfeitures arising under a
Participant's profit sharing contribution subaccount will be reallocated only
for the benefit of Employees of the Participant's Employer who adopted this
Plan.
5.4 COORDINATION OF SOCIAL SECURITY INTEGRATION. If the Employer
maintains plans involving integration with Social Security other than this
Plan, and if any Participant is eligible to participate in more than one of
such plans, all such plans will be considered to be integrated if the extent of
the integration of all such plans does not exceed one hundred percent (100%).
For purposes of the preceding sentence, the extent of integration of a plan is
the ratio (expressed as a percentage) which the actual benefits, benefit rate,
offset rate, or Employer Contribution rate under the plan bears to the
integration limitation applicable to such plan. If the Employer enters into
both the money purchase pension Adoption Agreement and the profit sharing
Adoption Agreement under this Plan, integration with Social Security may only
be selected in one Adoption. Agreement.
5.5 WITHDRAWALS AND DISTRIBUTIONS. Any distribution to a
Participant or his Beneficiary, any amount transferred from a Participant's
Account directly to the Trustee of any other qualified plan described in
section 401(a) of the Code or to a qualified annuity plan described in section
403(a) of the Code, or any withdrawal by a Participant shall be charged to the
appropriate subaccount(s) of the Participant as of the date of the distribution
or the withdrawal.
5.6 DETERMINATION OF VALUE OF TRUST FUND AND OF NET EARNINGS OR
LOSSES. As of each Valuation Date the Trustee shall determine for the period
then ended the sum of the net earnings or losses of the Trust (excluding with
respect to Shares and other assets specifically allocated to a specific
Participant's subaccount, (i) dividends and capital gain distributions from
Shares, (ii) receipts or income attributable to insurance policies, (iii)
income gains and/or losses attributable to a Participant's loans made pursuant
to ARTICLE 13 or to any other Assets) which shall reflect accrued but unpaid
interest, dividends, gains, or losses realized from the sale, exchange or
collection of assets, other income received, appreciation in the fair market
value of assets, depreciation in the fair market value of assets,
administration expenses, and taxes and other expenses paid. Gains or losses
realized and adjustments for appreciation or depreciation in fair market value
shall be computed with respect to the difference between such value as of the
preceding Valuation Date or date of purchase, whichever is applicable, and the
value as of the date of disposition or the current Valuation Date, whichever is
applicable.
5.7 ALLOCATION OF NET EARNINGS OR LOSSES.
(a) As of each Valuation Date the net earnings or losses
of the Trust (excluding with respect to Shares and other assets specifically
allocated to a specific Participant's subaccount, (i) dividends and capital
gain distributions from Shares, (ii) dividends or credits attributable to
insurance policies, (iii) income gains and/or losses attributable to a
Participant's loans made pursuant to ARTICLE 13 or to any other assets, all of
which shall be allocated to such Participant's subaccount) for the valuation
period then ending shall be allocated to the Accounts of all Participants (or
Beneficiaries) having credits in the fund both on such date and at the
beginning of such valuation period. Such allocation shall be made by the
application of a fraction, the numerator of which is the value of the Account
of a specific Participant (or Beneficiary) as of the immediately preceding
Valuation Date, reduced by any distributions therefrom since such preceding
Valuation Date, and the denominator of which is the total value of all such
Accounts as of the preceding Valuation Date, reduced by any distributions
therefrom since such preceding Valuation Date.
(b) To the extent that Shares and other assets are
specifically allocated to a specific Participant's subaccount: (i) dividends
and capital gain distributions from Shares; (ii) dividends or credits
attributable to insurance policies; and (iii) income gains and/or losses
attributable to a Participant's loans made pursuant to ARTICLE 13 or to any
other assets, all shall be allocated to such Participant's subaccount.
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5.8 RESPONSIBILITIES OF THE PLAN ADMINISTRATOR. The Plan
Administrator shall maintain accurate records with respect to the contributions
made by or on behalf of Participants under the Plan, and shall furnish the
Trustee with written instructions directing the Trustee to allocate all Plan
contributions to the Trust among the separate Accounts of Participants in
accordance with section 5.1 above, In making any such allocation, the Trustee
shall be fully entitled to rely on the instructions furnished by the Plan
Administrator, and shall be under no duty to make any inquiry or investigation
with respect there to.
ARTICLE 6
LIMITATIONS ON ALLOCATIONS
6.1 EMPLOYERS WHO DO NOT MAINTAIN OTHER QUALIFIED PLANS.
(a) If the Participant does not participate in, and has
never participated in another qualified plan or a welfare benefit fund, as
defined in section 419(e) of the Code, maintained by the Employer, or an
individual medical account, as defined in section. 415(1)(2) of the Code,
maintained by the Employer, which provides in Annual Addition as defined in
section 6.5(a), the amount of Annual Additions that may be credited to the
Participant's Account for any Limitation Year will not exceed the lesser of the
Maximum Permissible Amount or any other limitation contained in this Plan. If
the Employer Contribution that would otherwise be contributed or allocated to
the Participant's Account would cause the Annual Additions for the Limitation
Year to exceed the Maximum Permissible Amount, the amount contributed or
allocated will be reduced so that the Annual Additions for the Limitation Year
will equal the Maximum Permissible Amount.
(b) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant on the basis of a reasonable estimation of
the Participant's Compensation for the Limitation Year, uniformly determined
for all Participants similarly situated.
(c) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount for the Limitation Year
will be determined on the basis of the Participant's actual Compensation for
the Limitation Year.
(d) If, pursuant to subsection (c) or as a result of the
allocation of forfeitures, there is an Excess Amount the excess will be
disposed of as follows:
(i) Any nondeductible voluntary Employee
contributions, to the extent they would reduce the Excess Amount, will be
returned to the Participant;
(ii) If after the application of paragraph (i) an
Excess Amount still exists, and the Participant is covered by the Plan at the
and of the Limitation Year, the Excess Amount in the Participant's Account will
be used to reduce Employer Contributions (including any allocation of
forfeitures) for such Participant in the next Limitation Year, and each
succeeding Limitation Year if necessary;
(iii) if after the application of paragraph (i) an
Excess Amount still exists, and the Participant is not covered by the Plan at
the end of the Limitation Year, the Excess Amount will be held unallocated in a
suspense account. The suspense account will be applied to reduce future
Employer Contributions (including allocation of any forfeitures) for all
remaining Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary;
(iv) if a suspense account is in existence at any
time during the Limitation Year pursuant to this section, it will not
participate in the allocation of the Trust's investment gains and losses. If a
suspense account is in existence at any time during a particular Limitation
Year, all amounts in the suspense account must be allocated and reallocated to
Participants' Accounts before any Employer or any Employee contributions may be
made to the Plan for that Limitation Year. Excess accounts may not be
distributed to Participants or former Participants.
6.2 EMPLOYERS WHO MAINTAIN OTHER QUALIFIED MASTER OR PROTOTYPE
DEFINED CONTRIBUTION PLANS.
(a) This section applies if, in addition to this Plan,
the Participant is covered under another qualified master or prototype defined
contribution plan maintained by the Employer, a welfare benefit fund, as
defined in section 419(e) of the Code maintained by the Employer or an
individual medical account, a defined in section 415(1)(2) of the Code,
maintained by the Employer which provides an Annual Addition as defined in
section 6.5(a), during any Limitation Year. The Annual Additions that may be
credited to a Participant's Account under this Plan for any such Limitation
Year will not exceed the Maximum Permissible Amount reduced by the Annual
Additions credited to a Participant's Account under the other plans and welfare
benefit funds for the same Limitation Year. If the Annual Additions with
respect to the Participant under other defined contribution plans and welfare
benefit funds maintained by the Employer are less than the Maximum Permissible
Amount and the Employer Contribution that would otherwise be contributed or
allocated to the Participant's Account under this Plan would cause the Annual
Additions for the Limitation Year to exceed this limitation, the amount
contributed or allocated will be reduced so that the Annual Additions under all
such plans and funds for the Limitation Year will equal the Maximum Permissible
Amount. If the Annual Additions with respect to the Participant under such
other defined contribution plans and welfare benefit funds in the aggregate are
equal to or greater than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's Account under this Plan for the
Limitation Year.
(b) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described in section 6.1
(b).
(c) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount for the Limitation Year
will be determined on the basis of the Participant's actual Compensation for
the Limitation Year.
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(d) If, pursuant to section 6.2(c), or as a result of the
allocation of forfeitures, a Participants Annual Additions under this Plan and
such other plans would result in an Excess Amount for a Limitation Year, the
Excess Amount will be deemed to consist of the Annual Additions last allocated,
except that Annual Additions attributable to a welfare benefit fund or
individual medical account will be deemed to have been allocated first
regardless of the actual allocation date.
(e) If an Excess Amount was allocated to a Participant on
an allocation date of this Plan which coincides with an allocation date of
another plan, the Excess Amount attributed to this Plan will be the product of
(i) the total Excess Amount allocated as of such
date, times
(ii) the ratio of (1) the Annual Additions
allocated to the Participant for the Limitation Year as of such date under this
Plan to (2) the total Annual Additions allocated to the Participant for the
Limitation Year as of such date under this and all the other qualified master
or prototype defined contribution plans.
(f) Any Excess Amount attributed to this Plan will be
disposed of in the manner described in section 6.1 (d).
6.3 EMPLOYERS WHO, IN ADDITION TO THIS PLAN, MAINTAIN OTHER
QUALIFIED PLANS WHICH ARE DEFINED CONTRIBUTION PLANS OTHER THAN MASTER OR
PROTOTYPE PLANS. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a Master or Prototype
Plan, Annual Additions which may be credited to the Participant's Account under
this Plan for any Limitation Year will be limited in accordance with section
6.2 as though the other plan were a Master or Prototype Plan unless the
Employer provides other limitations in the Adoption Agreement.
6.4 EMPLOYERS WHO, IN ADDITION TO THIS PLAN, MAINTAIN A QUALIFIED
DEFINED BENEFIT PLAN. If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Participant in this Plan, the sum
of the Participant's Defined Benefit Fraction and Defined Contribution Fraction
will not exceed 1.0 in any Limitation Year. The Annual Additions which may be
credited to the Participant's Account under this Plan for any Limitation Year
will be limited in accordance with the Adoption Agreement.
6.5 DEFINITIONS. Unless otherwise expressly provided herein, for
purposes of this ARTICLE only, the following definitions and rules of
interpretation shall apply:
(a) Annual Additions. The sum of the following amounts
credited to a Participant's Account for the Limitation Year:
(i) Employer Contributions;
(ii) Employee contributions;
(iii) forfeitures; and
(iv) amounts allocated after March 31, 1984 to an
individual medical account; as defined in section 415(l)(2) of the Code, which
is part of a pension or annuity plan maintained by the Employer, are treated as
Annual Additions to a defined contribution plan. Also, amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement medical benefits
allocated to the separate account of a key employee, as defined in section
419A(d)(3) of the Code, under a welfare benefit fund, as defined in section
419(e) of the Code, maintained by the Employer, are treated as Annual Additions
to a defined contribution plan.
For this purpose, any Excess Amount applied under sections 6.1 (d) or 6.2(f) in
the Limitation Year to reduce Employer Contributions will be considered Annual
Additions for such Limitation Year.
(b) Compensation. A Participant's earned income, wages,
salaries, and fees for professional services and other amounts received for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses), and excluding the
following:
(i) Employer contributions to a plan of deferred
compensation which are not includable in the Employee's gross income for the
taxable year in which contributed, or Employer Contributions under a simplified
employee pension plan to the extent such contributions are excluded from the
Employee's gross income, or any distributions from a plan of deferred
compensation;
(ii) Amounts realized from the exercise of a
nonqualified stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(iii) Amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock option; and
(iv) Other amounts which received special tax
benefits, or contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in section
403(b) of the Code (whether or not the amounts are actually excludable from the
gross income of the Employee).
For purposes of applying the limitations of this
ARTICLE, Compensation for a Limitation Year is the Compensation actually paid
or includable in gross income during such year.
Notwithstanding the preceding sentence, Compensation
for a Participant in a defined contribution plan who is Totally and Permanently
Disabled (as defined in section 22(e)(3) of the Code) is the Compensation such
Participant would have received for the Limitation Year if the Participant had
been paid at the rate of Compensation paid Immediately before becoming
permanently and totally disabled; such imputed Compensation for the disabled
Participant may
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be taken into account only if the Participant is not a Highly-Compensated
Employee (as defined in section 414(q) of the Code), and contributions made on
behalf of such Participant are nonforfeitable when made.
(c) DEFINED BENEFIT FRACTION. A fraction, the numerator
of which is the sum of the Participant's Projected Annual Benefits under all the
defined benefit plans (whether or not terminated) maintained by the Employer,
and the denominator of which is the lesser of one hundred percent (100%) of the
dollar limitation determined for the Limitation Year under sections 415(b) and
(d) of the Code or one hundred forty percent (140%) of highest average
compensation, including any adjustments under section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of this
fraction will not be less than one hundred twenty-five percent (125%) of the
sum of the annual benefits under such plans which the Participant had accrued
as of the close of the last Limitation Year beginning before January 1, 1987
disregarding any changes in the terms and conditions of the plan after May 5,
1986. The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of section 415 of
the Code for all Limitation Years beginning before January 1, 1987.
(d) DEFINED CONTRIBUTION DOLLAR LIMITATION. Thirty
thousand dollars ($30,000) or, if greater, one-fourth (1/4) of the defined
benefit dollar limitation set forth in section 415(b)(1) of the Code as in
effect for the Limitation Year.
(e) DEFINED CONTRIBUTION FRACTION. A fraction, the
numerator of which is the sum of the Annual Additions to the Participant's
Account under all the defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all prior Limitation Years
(including the Annual Additions attributable to the Participant's nondeductible
voluntary contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the Annual Additions attributable
to all welfare benefit funds, as defined in section 419(e) of the Code and
individual medical accounts, as defined in section 415(1)(2) of the Code,
maintained by the Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior Limitation Years of
service with the Employer (regardless of whether a defined contribution plan
was maintained by the Employer). The maximum aggregate amount in any Limitation
Year is the lesser of one hundred percent (100%) of the dollar limitation in
effect under section 415(c)(1)(A) of the Code or thirty-five percent (35%) of
the Participant's Compensation for such year.
If the Participant was a Participant as of the end of the
first day of the first Limitation Yew beginning after December 31, 1986, in one
or mom defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted if the
sum of this fraction and the Defined Benefit Fraction would otherwise exceed
1.0 under the terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from the numerator
of this fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning before
January 1, 1987, and disregarding any changes in the terms and conditions of
the Plan made after May 5, 1986, but using the section 415 limitation
applicable to the first Limitation Year beginning on or after January 1, 1987.
the Annual Addition for any Limitation Year beginning before January 1, 1987,
shall not be recomputed to treat all Employee contributions as Annual
Additions.
(f) EMPLOYER. For purposes of this ARTICLE, Employer
shall mean the employer that adopts this Plan, and all members of a controlled
group of corporations (as defined in section 414(b) of the Code as modified by
section 415(h) of the Code), all commonly controlled trades or businesses (as
defined in section 414(c) of the Code as modified by section 415(h) of the
Code), or affiliated service groups (as defined in section 414(m) of the Code)
of which the adopting Employer is a part and any other entity required to be
aggregated with the Employer pursuant to regulations under section 414(o) of
the Code.
(g) EXCESS AMOUNT. The excess of the Participant's Annual
Addition for the Limitation Year over the Maximum Permissible Amount.
(h) HIGHEST AVERAGE COMPENSATION. The average
compensation for the three consecutive Plan Years that produce the highest
average.
(i) LIMITATION YEAR. A Plan Year, or the twelve (12)
consecutive month period elected by the Employer in the Adoption Agreement. All
qualified plans maintained by the Employer must use the same Limitation Year.
If the Limitation Year is amended to a different twelve (12) consecutive month
period, the new Limitation Year must begin on a date within the Limitation Year
in which the amendment is made.
(j) MASTER OR PROTOTYPE PLAN. A plan the form of which
is the subject of a favorable opinion letter from the Internal Revenue Service.
(k) MAXIMUM PERMISSIBLE AMOUNT. The maximum Annual
Addition that may be contributed or allocated to a Participant's Account under
the Plan for any Limitation Year shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation;
or
(ii) twenty-five percent (25%) of the Participant's
Compensation for the Limitation Year.
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The Compensation limitation referred to in subsection (b)
shall not apply to any contribution for medical benefits (within the meaning of
section 401(h) or section 419A(f)(2) of the Code) which is otherwise treated as
an Annual Addition under section 415(l)(1) or section 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different twelve (12) consecutive month
period, the Maximum Permissible Amount will not exceed the Defined Contribution
Dollar Limitation multiplied by the following fraction:
Number of Months in the Short Limitation Year
12
(l) PROJECTED ANNUAL BENEFIT. The annual retirement
benefit (adjusted to an actuarially equivalent straight life annuity if such
benefit is expressed in a form other than a straight life annuity or Qualified
Joint and Survivor Annuity) to which the Participant would be entitled under
the terms of the Plan assuming:
(i) the Participant will continue employment
until Normal Retirement Age under the Plan (or current age, if later), and
(ii) the Participant's Compensation for the current
Limitation Year and all other relevant factors used to determine benefits under
the Plan will remain constant for all future Limitation Years.
ARTICLE 7
TRUST FUND
7.1 RECEIPT OF CONTRIBUTIONS BY TRUSTEE. All contributions to the
Trust that we received by the Trustee, together with any earnings thereon,
shall be held, managed and administered by the Trustee named in the Adoption
Agreement in accordance with the terms and conditions of the Trust Agreement
and the Plan. The Trustee may use a Custodian designated by the Sponsor to
perform recordkeeping and custodial functions. The Trustee shall be subject to
the proper directions of the Employer or the Plan Administrator made in
accordance with the terms of the Plan and ERISA.
7.2 INVESTMENT RESPONSIBILITY.
(a) If the Employer elects in the Adoption Agreement to
exercise investment authority and responsibility, the selection of the
investments in which assets of the Trust are invested shall be the
responsibility of the Plan Administrator and each Participant will have a
ratable interest in all assets of the Trust.
(b) If the Adoption Agreement so provides and the
Employer elects to permit each Participant or Beneficiary to select the
investments in his Account, no person, including the Trustee and the Plan
Administrator, shall be liable for any loss or for any breach of fiduciary duty
which results from such Participant's or Beneficiary's exercise of control.
(c) If the Adoption Agreement so provides and the
Employer elects to permit each Participant or Beneficiary to select the
investments in his Account, the Employer or the Plan Administrator must
complete a schedule of Participant designations.
(d) If Participants and Beneficiaries are permitted to
select the investment in their Accounts, all investment related expenses,
including administrative fees charged by brokerage houses, will be charged
against the Accounts of the Participants.
(e) The Plan Administrator may at any time change the
selection of investments in which the assets of the Trust are invested, or
subject to such reasonable restrictions as may be imposed by the Sponsor for
administrative convenience, may submit an amended schedule of Participant
designations. Such amended documents may provide for a variance in the
percentages of contributions to any particular investment or a request that
Shares in the Trust be reinvested in whole or in part in other Shares.
7.3 INVESTMENT LIMITATIONS. The Sponsor may impose reasonable
investment limitations an the Employer and the Plan Administrator relating to
the type of permissible investments in the Trust or the minimum percentage of
Trust assets to be invested in Shares.
ARTICLE 8
VESTING
8.1 NONDEDUCTIBLE VOLUNTARY CONTRIBUTIONS AND EARNINGS. The
Participant's nondeductible voluntary contribution subaccount shall be fully
vested and nonforfeitable at all times and no forfeitures will occur as a
result of an Employee's withdrawal of nondeductible voluntary contributions.
8.2 ROLLOVERS, TRANSFERS AND EARNINGS. The Participant's rollover
subaccount and direct transfer subaccount shall be fully vested and
nonforfeitable at all times.
8.3 EMPLOYER CONTRIBUTIONS AND EARNINGS. Notwithstanding the
vesting schedule elected by the Employer in the Adoption Agreement, the
Participant's money purchase pension contribution subaccount and profit sharing
contribution subaccount shall be fully vested and nonforfeitable upon the
Participant's death, disability, attainment of Normal Retirement Age, or, if the
Adoption Agreement provides for an Early Retirement Date, attainment of the
required age and completion of the required service, In the absence of any of
the preceding events, the Participant's money purchase contribution subaccount
and his profit sharing contribution subaccount shall vest in accordance with a
minimum vesting
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schedule specified in the Adoption Agreement. The schedule must be at least as
favorable to Participants as either schedule (a) or (b) below.
(a) Graduated vesting according to the following schedule:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
(b) Full one hundred percent (100%) vesting after three (3) Years of
Service.
8.4 AMENDMENTS TO VESTING SCHEDULE.
(a) If the Plan's vesting schedule is amended, or the Plan is
amended in any way that directly or indirectly affects the computation of the
Participant's nonforfeitable percentage or if the Plan is deemed amended by an
automatic change to or from a top-heavy vesting schedule, each Participant with
at least three (3) Years of Service with the Employer may elect, within a
reasonable period after the adoption of the amendment or change, to have the
nonforfeitable percentage computed under the Plan without regard to such
amendment or change. For any Participants who do not have at least one (1) Hour
of Service in any Plan Year beginning after December 31, 1988, the preceding
sentence shall be applied by substituting "five (5) Years of Service" for
"three (3) Years of Service" where such language appears.
(b) The period during which the election may be made shall commence
with the date the amendment is adopted or deemed to be made and shall end on
the latest of:
(i) sixty (60) days after the amendment is adopted;
(ii) sixty (60) days after the amendment becomes effective;
or
(iii) sixty (60) days after the Participant is issued written
notice of the amendment by the Employer or Plan Administrator.
(c) No amendment to the Plan shall be effective to the extent that
it has the effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's Account balance may be
reduced to the extent permitted under section 412(c)(8) of the Code. For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's Account balance or eliminating an optional form of benefit,
with respect to benefits attributable to service before the amendment shall be
treated as reducing an accrued benefit. Furthermore, if the vesting schedule of
a Plan is amended, in the case of an Employee who is a Participant as of the
later of the date such amendment is adopted or the date it becomes effective,
the nonforfeitable percentage (determined as of such date) of such Employee's
right to his Employer-derived accrued benefit will not be less than his
percentage computed under the Plan without regard to such amendment.
8.5 DETERMINATION OF YEARS OF SERVICE. For purposes of determining the
vested and nonforfeitable percentage of the Participant's Employer Contribution
subaccounts, all of the Participant's Years of Service with the Employer or an
Affiliated Employer shall be taken into account. If specified in the Adoption
Agreement, Years of Service with a predecessor employer will be treated as
service for the Employer; provided, however, if the Employer maintains the plan
of a predecessor employer, Years of Service with such predecessor employer will
be treated as service with the Employer without regard to any election.
8.6 FORFEITURE OF NONVESTED AMOUNTS.
(a) For Plan Years beginning before 1985, any portion of a
Participant's Account that is not vested shall be forfeited by him as of the
last day of the Plan Year in which a Break in Service occurs. For Plan Years
beginning after 1984, any portion of a Participant's Account that is not vested
shall be forfeited by him as of the last day of the Plan Year in which his
fifth consecutive Break in Service occurs. Any amounts thus forfeited shall be
reallocated as provided in ARTICLE 5 and shall not be considered part of a
Participant's Account in computing his vested interest. The remaining portion of
the Participant's Account will be nonforfeitable.
(b) If a distribution is made at a time when a Participant has a
vested right to less than one hundred percent (100%) of the value of the
Participant's Account attributable to Employer Contributions and forfeitures,
as determined in accordance with the provisions of section 8.3, and the
nonvested portion of the Participant's Account has not yet been forfeited in
accordance with paragraph (a) above:
(i) a separate remainder subaccount shall be established
for the Participant's interest in the Plan as of the time of the distribution,
and
(ii) at any relevant time the Participant's vested portion
of the separate remainder subaccount shall be equal to an amount ("X")
determined by the following formula:
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X = P(AB + (R x D)) - (R x D)
For purposes of applying the formula: P is the vested percentage at
the relevant time; AB is the Account balance at the relevant time; D is the
amount of the distribution; and R is the ratio of the Account balance at the
relevant time to the Account balance after distribution.
8.7 REINSTATEMENT OF BENEFIT. If a benefit is forfeited because a
Participant or Beneficiary cannot be found, such benefit will be reinstated if
a claim is made by the Participant or Beneficiary.
ARTICLE 9
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
9.1 GENERAL. The provisions of this ARTICLE shall apply to any
Participant who is credited with at least one (1) Hour of Service with the
Employer on or after August 23, 1984, and such other Participants as provided
in section 9.7.
9.2 QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional form of
benefit is selected pursuant to a Qualified Election within the ninety (90) day
period ending on the Annuity Starting Date, a married Participant's Vested
Account Balance will be paid in the form of a Qualified Joint and Survivor
Annuity and an unmarried Participant's Vested Account Balance will be paid in
the form of a life annuity. The Participant may elect to have such annuity
distributed upon attainment of the Earliest Retirement Age under the Plan.
9.3 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an optional form of
benefit has been selected within the Election Period pursuant to a Qualified
Election, if a Participant dies before the Annuity Starting Date, then the
Participant's Vested Account Balance shall be applied toward the purchase of an
annuity for the life of the Surviving Spouse. The Surviving Spouse may elect to
have such annuity distributed within a reasonable period after the
Participant's death.
9.4 DEFINITIONS.
(a) Election Period.
(i) The period which begins on the first day of the Plan Year
in which the Participant attains age thirty-five (35) and ends on the date of
the Participant's death. If a Participant separates from service prior to the
first day of the Plan Year in which age thirty-five (35) is attained, with
respect to the Account balance as of the date of separation, the Election
Period shall begin on the date of separation.
(ii) A Participant who has not yet attained age thirty-five (35)
as of the end of any current Plan Year may make a special Qualified Election to
waive the qualified preretirement survivor annuity for the period beginning on
the date of such election and ending on the first day of the Plan Year in
which the Participant will attain age thirty-five (35). Such election shall not
be valid unless the Participant receives a written explanation of the qualified
preretirement survivor annuity in such terms as are comparable to the
explanation required under section 9.5. Qualified preretirement survivor
annuity coverage will be automatically reinstated as of the first day of the
Plan Year in which the Participant attains age thirty-five (35). Any new waiver
on or after such date shall be subject to the full requirements of this ARTICLE.
(b) Earliest Retirement Age. The earliest date on which, under the
Plan, the Participant could elect to receive retirement benefits.
(c) Qualified Election.
(i) A waiver of a Qualified Joint and Survivor Annuity or a
qualified preretirement survivor annuity. Any waiver of a Qualified Joint and
Survivor Annuity or a qualified preretirement survivor annuity shall not be
effective unless:
(1) the Participant's Spouse consents in writing to the
election;
(2) the election designates a specific Beneficiary,
including any class of Beneficiaries or any contingent Beneficiaries, which may
not be changed without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal consent);
(3) the Spouse's consent acknowledges the effect of the
election; and
(4) the Spouse's consent is witnessed by a Plan
representative or notary public. Additionally, a Participant's waiver of the
Qualified Joint and Survivor Annuity shall not be effective unless the election
designates a form of benefit payment which may not be changed without spousal
consent (or the Spouse expressly permits designations by the participant
without any further spousal consent). If it is established to the satisfaction
of a Plan representative that there is no Spouse or that the Spouse cannot be
located, a waiver will be deemed a Qualified Election.
(ii) Any consent by a Spouse obtained under this provision (or
establishment that the consent of Spouse may not be obtained) shall be
effective only with respect to such Spouse. A consent that permits designations
by the Participant without any requirement of further consent by such Spouse
must acknowledge that the Spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit where applicable, and that the
Spouse voluntarily elects to relinquish either or both of such rights.
A revocation of a prior waiver may be made by a Participant without the consent
of the Spouse at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this provision
shall be valid unless the Participant has received notice as provided in
section 9.5.
(d) Qualified Joint And Survivor Annuity. An immediate annuity for
the life of the Participant with a survivor annuity for the life of the Spouse
which equals fifty percent (50%) of the amount of the annuity which is payable
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during the joint lives of the Participant and the Spouse and which is the
amount of benefit which can be purchased with the Participant's Vested Account
Balance.
(e) Spouse(Surviving Spouse). The Spouse or Surviving Spouse of the
Participant, provided that a former spouse will be treated as the Spouse or
Surviving Spouse and a current Spouse will not be treated as the Spouse or
Surviving Spouse to the extent provided under a qualified domestic relations
order as described in section 414(p) of the Code.
(f) Annuity Starting Date. The first day of the first period for
which an amount is paid as an annuity or any other form.
(g) Vested Account Balance. The aggregate value of the Participant's
Vested Account Balances derived from Employer and Employee contributions
(including rollovers and direct transfers), whether vested before upon death,
including the proceeds of insurance contracts if any, on the Participant's life,
The provisions of this ARTICLE shall apply to a Participant who is vested in
amounts attributable to Employer Contributions, Employee contributions (or both)
at the time of death or distribution.
9.5 Notice Requirements
(a) In the case of a Qualified Joint and Survivor Annuity, the Plan
Administrator shall no less than thirty (30) days and no more than ninety (90)
days prior to the Annuity Starting Date, provide each Participant a written
explanation of:
(i) the terms and conditions of a Qualified Joint and Survivor
Annuity;
(ii) the Participant's right to make and the effect of an
election to waive the Qualified Joint and Survivor Annuity form of
benefit;
(iii) the rights of a Participant's Spouse; and
(iv) the right to make, and the effect of, a revocation of a previous
election to waive the Qualified Joint and Survivor Annuity.
(b) In the case of a qualified preretirement survivor annuity as
described in section 9.3, the Plan Administrator shall provide each Participant
within the applicable period for such Participant a written explanation of the
qualified preretirement survivor annuity in such terms and in such manner as
would be comparable to the explanation provided for meeting the requirements of
subsection (a) applicable to a Qualified Joint and Survivor Annuity.
(c) The applicable period for a Participant is whichever of the following
periods ends last:
(i) the period beginning with the first day of the Plan Year in
which the Participant attains age thirty-two (32) and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age thirty-five (35);
(ii) a reasonable period ending after the individual becomes a
Participant;
(iii) a reasonable period ending after subsection (e) ceases to
apply to the Participant;
(iv) a reasonable period ending after this ARTICLE first applies
to the Participant.
Notwithstanding the foregoing, notice must be provided within a reasonable
period ending after separation form service in the case of a participant who
separates from service before attaining age thirty-five (35).
(d) For purposes of applying subsection (c), a reasonable period ending
after the enumerated events described above in subsections (ii), (iii) and (iv)
is the end of the two-year period beginning one (1) year prior to the date the
applicable event occurs, and ending on (1) year after that date. In the case of
a Participant who separates from service before the Plan year in which age
thirty-five (35) is attained, notice shall be provided within the two (2) year
period beginning one (1) year prior to separation and ending one (1) year after
separation. If such a participant thereafter returns to employment with the
Employer, the applicable period for such Participant shall be redetermined.
(e) Notwithstanding the other requirements of this section, the
respective notices prescribed by this section need not be given to a
Participant if:
(i) the Plan "fully subsidizes" the cost of a Qualified Joint and
Survivor Annuity or qualified preretirement survivor annuity; and
(ii) the Plan does not allow the Participant to waive the Qualified
Joint and Survivor Annuity or qualified preretirement survivor annuity and does
not allow a married Participant to designate a nonspouse Beneficiary.
For purposes of this subsection, plan fully subsidizes the costs of a
benefit if no increase in cost, or decrease in benefits to the Participant may
result from the Participant's failure to elect another benefit.
9.6 Safe Harbor Rules
(a) This section shall apply to a Participant in a profit sharing plan,
and to any distribution, made on or after the first day of the first Plan year
beginning after December 31, 1988, from or under a separate account
attributable solely to accumulated deductible Employee contributions, as
defined in section 72(o)(5)(B) of the Code, and maintained on behalf of a
Participant in a money purchase pension plan (including a target benefit plan)
if the following conditions are satisfied:
(i) the Participant does not or cannot elect payments in the form of
a life annuity; and
(ii) on the death of a Participant, the Participant's Vested Account
Balance will be paid to the Participant's Surviving Spouse, but if there is no
Surviving Spouse, or if the Surviving Spouse has consented in a manner
conforming to a Qualified Election, then to the Participant's Designated
Beneficiary.
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(b) The Surviving Spouse may elect to have distribution of the
Vested Account Balance commence within the ninety (90) day period following the
date of the Participant's death. The Account balance shall be adjusted for
gains or losses occurring after the Participant's death in accordance with the
provisions of the Plan governing the adjustment of Account balances for other
types of distributions.
(c) This section shall not be operative with respect to a
Participant in a profit sharing plan if the plan is a direct or indirect
transferee of a defined benefit plan, money purchase plan, a target benefit
plan, stock bonus, or profit sharing plan which is subject to the survivor
annuity requirements of sections 401(a)(11) and 417 of the Code. If this
section is operative, then the provisions of the ARTICLE, other than section
9.7, shall be inoperative.
(d) The Participant may waive the spousal death benefit described in
this section at any time provided that no such waiver shall be effective unless
it satisfies the conditions of section 9.4(c) (other than the notification
requirement referred to therein) that would apply to the Participant's waiver
of the qualified preretirement survivor annuity.
(e) For purposes of this section, Vested Account Balance shall mean,
in the case of a money purchase pension plan or a target benefit plan, the
Participant's separate Account balance attributable solely to accumulated
deductible Employee contributions within the meaning of section 72(o)(5)(B) of
the Code. In the case of a profit sharing plan, Vested Account Balance shall
have the same meaning as provided in section 9.4(g).
9.7 TRANSITIONAL RULES.
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by the previous
sections of this ARTICLE must be given the opportunity to elect to have the
prior sections of this ARTICLE apply if such Participant is credited with at
least one (1) Hour of Service under this Plan or a predecessor plan in a Plan
Year beginning on or after January 1, 1976, and such Participant had at least
ten (10) years of vesting service when he or she separated from service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one (1) Hour of Service under this Plan or
a predecessor plan on or after September 2, 194, and who is not otherwise
credited with any service in a Plan Year beginning on or after January 1, 1976,
must be given the opportunity to have his or her benefits paid in accordance
with subsection (d).
(c) The respective opportunities to elect (as described in
subsections (a) and (b) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and ending on the
date benefits would otherwise commence to said Participants.
(d) Any Participant who has elected pursuant to subsection (b) and
any Participant who does not elect under subsection (a) or who meets the
requirements of subsection (a) except that such Participant does not have at
least ten (10) years of vesting service when he or she separates from service,
shall have his or her benefits distributed in accordance with all of the
following requirements if benefits would have been payable in the form of a
life annuity:
(i) Automatic Joint and Survivor Annuity. If benefits in the
form of a life annuity become payable to a married Participant who:
(1) begins to receive payments under the Plan on or after
Normal Retirement Age; or
(2) dies on or after Normal Retirement Age while still
working for the Employer; or
(3) begins to receive payments on or after the qualified
early retirement age; or
(4) separates from service on or after attaining Normal
Retirement age; (or qualified early retirement age) and under satisfying the
eligibility requirements for the payments of benefits under the Plan and
thereafter dies before beginning to receive such benefits; then such benefits
will be received under this Plan in the form of a Qualified Joint and Survivor
Annuity, unless the Participant has elected otherwise during the Election
Period. The Election Period must begin at least six (6) months before the
Participant attains qualified early retirement age and end not more than ninety
(90) days before the commencement of benefits. Any election hereunder will be
in writing and may be changed by the Participant at any time.
(ii) Election of Early Survivor Annuity. A Participant who is
employed after attaining the qualified early retirement age will be given the
opportunity to elect, during the Election Period, to have a survivor annuity
payable on death. If the Participant elects the survivor annuity, payments
under such annuity must not be less than the payments which would have been
made to the Spouse under the Qualified Joint and Survivor Annuity if the
Participant had retired on the day before his or her death. Any election under
this provision will be in writing and may be changed by the Participant at any
time. The Election Period begins on the later of (1) the 90th day before the
Participant attains the qualified early retirement age; or (2) the date on
which participation begins, and ends on the date the Participant terminates
employment.
(e) The following terms shall have the meanings specified herein:
(i) Qualified Early Retirement Age. The latest of:
(1) the earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits;
(2) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age; or
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(3) the date the Participant begins participation.
(ii) Qualified Joint and Survivor Annuity. An annuity for
the life of the Participant with a survivor annuity for the life of the Spouse
as described in section 9.4(d).
ARTICLE 10
DISTRIBUTION PROVISIONS
10.1 VESTING ON DISTRIBUTION BEFORE BREAK IN SERVICE.
(a) If an Employee terminates service, and the value of the
Employee's vested Account balance derived from Employer and Employee
Contributions is not greater than three thousand five hundred dollars ($3,500),
the Employee will receive a distribution of the value of the entire vested
portion of such Account balance and the nonvested portion will be treated as a
forfeiture. For purposes of this section, if the value of an Employee's
vested Account balance is zero, the Employee shall be deemed to have received a
distribution of such vested Account balance. A Participant's vested Account
balance shall not include accumulated deductible Employee contributions within
the meaning of section 72(o)(5)(B) of the Code for Plan Years beginning prior
to January 1, 1989.
(b) If an Employee terminates service and elects, in accordance with
the ARTICLE, to receive the value of his Vested Account Balance, the nonvested
portion will be treated as a forfeiture. If the Employee elects to have
distributed less than the entire vested portion of the Account balance derived
from Employer Contributions, the part of the nonvested portion that will be
treated as a forfeiture is the total nonvested portion multiplied by a
fraction, the numerator of which is the amount of the distribution attributable
to Employer Contributions and the denominator of which is the total value of
the vested Employer derived Account balance.
(c) If an Employee receives a distribution pursuant to this section
and the Employee resumes employment covered under this Plan, the Employee's
Employer-derived Account balance will be restored to the amount on the date of
distribution if the Employee repays to the Plan the full amount of the
distribution attributable to Employer Contributions before the earlier of five
(5) years after the first date on which the Participant is subsequently
reemployed by the Employer, or the date the Participant incurs five (5)
consecutive one (1) year Breaks in Service following the date of the
distribution. If an Employee is deemed to receive a distribution to this
section, and the Employee resumes employment covered under this Plan before the
date the Participant incurs five (5) consecutive one (1) year Breaks in
Service, upon the reemployment of such Employee, the Employer-derived Account
balance of the Employee will be restored to the amount on the date of such
deemed distribution.
10.2 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS.
(a) If the value of a Participant's vested Account balance derived
from Employer and Employee contributions exceeds(or at the time of any prior
distribution exceeds) three thousand five hundred dollars (3,500) and the
Account balance is immediately distributable, the Participant and the
Participant's Spouse (or where either the Participant or the Spouse has died,
the survivor) must consent to any distribution of such Account balance. The
consent of the Participant and the Participant's Spouse shall be obtained in
writing within the ninety (90) day period ending on the Annuity Starting Date.
The Annuity Starting Date is the first day of the first period for which an
amount is paid as an annuity or any other form. The Plan Administrator shall
notify the Participant and the Participant's Spouse of the right to defer any
distribution until the Participant's Account balance is no longer immediately
distributable. Such notification shall include a general description of the
material features, and an explanation of the relative values of, the optional
forms of benefit available under the Plan in a manner that would satisfy the
notice requirements of section 417(a)(3), and shall be provided no less than
thirty (30) days and no more than ninety (90) days prior to the Annuity
Starting Date.
(b) Notwithstanding the provisions of subsection (a), only the
Participant need consent to the commencement of a distribution in the form of a
Qualified Joint and Survivor Annuity while the Account balance is immediately
distributable. (Furthermore, if payment in the form of a Qualified Joint and
Survivor Annuity is not required with respect to the Participant pursuant to
section 9.6 of the Plan, only the Participant need consent to the distribution
of an Account balance that is immediately distributable).
Neither the consent of the Participant nor the Participant's Spouse shall be
required to the extent that a distribution is required to satisfy section
401(a)(9) or section 415 of the Code. In addition, upon termination of this
Plan if the Plan does not offer an annuity option (purchased from a commercial
provider), the Participant's Account balance may, without the Participant's
consent, be distributed to the Participant or transferred to another defined
contribution plan (other than an employee stock ownership plan as defined in
section 4975(e)(7) of the Code) within the same controlled group.
(c) An Account balance is immediately distributable if any part of
the Account balance could be distributed to the Participant (or Surviving
Spouse) before the Participant attains *or would have attained if not deceased)
the later of Normal Retirement Age or age sixty-two (62).
(d) For purposes of determining the applicability of the foregoing
consent requirements to distributions made before the first day of the first
Plan Year beginning after December 31, 1988, the Participant's vested Account
balance shall not include amounts attributable to accumulated deductible
Employee contributions within the meaning of section 72*o)(5)(B) of the Code.
10.3 COMMENCEMENT OF BENEFITS.
(a) Unless the Participant elects otherwise, distribution of
benefits will begin no later than the 60th day after the latest of the close of
the Plan Year in which:
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(i) the Participant attains age sixty-five (65) (or
Normal Retirement Age, if earlier);
(ii) the 10th anniversary of the year in which the
Participant commenced participant in the Plan occurs; or
(iii) the Participant terminates service with the
Employer.
(b) Notwithstanding the foregoing, the failure of a
Participant and Spouse to consent to a distribution while a benefit is
immediately distributable, within the meaning of section 10.2 of the Plan, shall
be deemed to be an election to defer commencement of payment of any benefit
sufficient to satisfy this section.
10.4 EARLY RETIREMENT WITH AGE AND SERVICE REQUIREMENT. If a
Participant separates from service before satisfying the age requirement for
early retirement, but has satisfied the service requirement, the Participant
will be entitled to elect an early retirement benefit upon satisfaction of such
age requirement.
10.5 NONTRANSFERABILITY OF ANNUITIES. Any annuity contract
distributed herefrom must be nontransferable.
10.6 CONFLICTS WITH ANNUITY CONTRACTS. The terms of any annuity
contract purchased and distributed by the Plan to a Participant or Spouse shall
comply with the requirements of this Plan.
ARTICLE 11
TIMING AND MODES OF DISTRIBUTION
11.1 GENERAL RULES.
(a) Subject to ARTICLE 9, the requirements of this ARTICLE
shall apply to any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan. Unless otherwise
specified, the provisions of this ARTICLE apply to calendar years beginning
after December 31, 1984.
(b) All distributions required under this ARTICLE shall be
determined and made in accordance with the income tax regulations under section
401(a)(9) of the Code, including the minimum distribution incidental benefit
requirement of section 1.40(a)(9)-2 of the proposed regulations.
11.2 REQUIRED BEGINNING DATE. The entire interest of a Participant
must be distributed or begin to be distributed no later than the Participant's
Required Beginning Date.
11.3 LIMITS ON DISTRIBUTION PERIODS. As of the first Distribution
Calendar Year, distributions, if not made in single-sum, may only be made over
one of the following periods (or a combination thereof):
(a) the life of the Participant;
(b) the life of the Participant and a Designated Beneficiary;
(c) a period certain not extending beyond the Life Expectancy
of the Participant; or
(d) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a Designated Beneficiary.
11.4 DETERMINATION OF AMOUNT TO BE DISTRIBUTED EACH YEAR.
(a) Individual Account.
(i) If a Participant's Benefit is to be distributed
over (1) a period not extending beyond the Life Expectancy of the Participant or
the joint life and last survivor expectancy of the Participant and the
Participant's Designated Beneficiary or (2) a period not extending beyond the
Life Expectancy of the Designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with distribution for the first
Distribution Calendar Year, must at least equal the quotient obtained by
dividing the Participant's Benefit by the Applicable Life Expectancy.
(ii) For calendar years beginning before January 1,
1989, if the Participant's Spouse is not the Designated Beneficiary, the method
of distribution selected must assure that at least fifty percent (50%) of the
present value of the amount available for distribution is paid within the Life
Expectancy of the Participant.
(iii) For calendar years beginning after December 31,
1988, the amount to be distributed each year, beginning with distributions for
the first Distribution Calendar Year shall not be less than the quotient
obtained by dividing the Participant's Benefit by the lesser of (1) the
Applicable Life Expectancy or (2) if the Participant's Spouse is not the
Designated Beneficiary, the applicable divisor determined from the table set
forth in Q&A-4 of section 1.40(a)(9)-2 of the proposed regulations.
Distributions after the death of the Participant shall be distributed using the
Applicable Life Expectancy in subsection (a)(i) above as the relevant divisor
without regard to proposed regulations section 1.40(a)(9)-2.
(iv) The minimum distribution required for the
Participant's first Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum distribution for other
calendar years, including the minimum distribution for the Distribution
Calendar Year in which the Employee's Required Beginning Date occurs, must be
made on or before December 31, of that Distribution Calendar Year.
(b) Other Forms. If the Participant's benefit is distributed
in the form of an annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of section
401(a)(9) of the Code and the proposed regulations thereunder.
11.5 DEATH DISTRIBUTION PROVISIONS.
(a) Distribution Beginning Before Death. If the Participant
dies after distribution of his or her interest has begun, the remaining portion
of such interest will continue to be distributed at least as rapidly as under
the method of distribution being used prior to the Participant's death.
(b) Distribution Beginning After Death. If the Participant
dies before distribution of his or her interest begins, distribution of the
Participant's entire interest shall be completed by December 31 of the calendar
year
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containing the fifth anniversary of the Participant's death except to the extent
that an election is made to receive distributions in accordance with (i) or (ii)
below:
(i) if any portion of the Participant's interest is payable
to a Designated Beneficiary, distributions may be made over the life or over a
period certain not greater than the Life Expectancy of the Designated
Beneficiary commencing on or before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
(ii) if the Designated Beneficiary is the Participant's
Surviving Spouse, the date distributions are required to begin in accordance
with (i) above shall not be earlier than the later of (1) December 31 of the
calendar year immediately following the calendar year in which the Participant
died and (2) December 31 of the calendar year in which the Participant would
have attained age seventy and one-half (70 1/2).
(c) If the Participant has not made an election pursuant to this
section by the time of his or her death, the Participant's Designated
Beneficiary must elect the method of distribution no later than the earlier of
(1) December 31 of the calendar year in which distributions would be required to
begin under this section; or (2) December 31 of the calendar year which contains
the fifth anniversary of the date of death of the Participant. If the
Participant has no Designated Beneficiary, or if the Designated Beneficiary does
not elect a method of distribution, distribution of the Participant's entire
interest must be completed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death.
(d) For purposes of subsection (b) above, if the Surviving Spouse
dies after the Participant, but before payments to such Spouse begin, the
provisions of subsection (b), with the exception of paragraph (ii) therein,
shall be applied as if the Surviving Spouse were the Participant.
(e) For purposes of this section, any amount paid to a child of
the Participant will be treated as if it had been paid to the Surviving Spouse
if the amount becomes payable to the Surviving Spouse when the child reaches the
age of majority.
(f) For the purposes of this section, distribution of a
Participant's interest is considered to begin on the Participant's Required
Beginning Date (or, if subsection (d) above is applicable, the date distribution
is required to begin to the Surviving Spouse pursuant to subsection (b) above).
If distribution is in the form of an annuity described in section 11.4(b) above
irrevocably commences to the Participant before the Required Beginning Date, the
date distribution is considered to begin is the date distribution actually
commences.
11.6 DESIGNATION OF BENEFICIARY. Subject to the rules of ARTICLE 9, a
Participant (or former Participant) may designate from time to time any person
or persons (who may be designated contingently or successively and may be an
entity other than a natural person) as his Beneficiary who will be entitled to
receive any undistributed amounts credited to the Participant's separate
Account under the Plan at any time of the Participant's death. Any such
beneficiary designation by a Participant shall be made in writing in the manner
prescribed by the Plan Administrator, and shall be effective only when filed
with the Plan Administrator during the Participant's lifetime. A Participant
my change or revoke his Beneficiary designation at any time in the manner
prescribed by the Plan Administrator. If any portion of the Participant's
Account is invested in insurance pursuant to ARTICLE 14, the Beneficiary of the
benefits under the insurance policy shall be the person or persons designated
under the policy. If the Designated Beneficiary (or each of the Designated
Beneficiaries) predeceases the Participant, the Participant's Beneficiary
designation shall be ineffective. If no Beneficiary designation is in effect
at the time of the Participant's death, his Beneficiary shall be his estate.
11.7 DEFINITIONS.
(a) APPLICABLE LIFE EXPECTANCY. The Life Expectancy (or
joint and last survivor expectancy) calculated using the attained age of the
Participant (or Designated Beneficiary) as of the Participant's (or Designated
Beneficiary's) birthday in the applicable calendar year reduced by one (1) for
each calendar year which as elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated, the Applicable Life
Expectancy shall be the Life Expectancy as so recalculated. The applicable
calendar year shall be the first Distribution Calendar Year, and if Life
Expectancy is being recalculated such succeeding calendar year.
If annuity payments commence in accordance with section 11.4(b) before the
Required Beginning Date, the applicable calendar year is the year such payments
commence. If distribution is in the form of an immediate annuity purchased
after the Participant's death with the Participant's remaining interest, the
applicable calendar year is the year of purchase.
(b) DESIGNATED BENEFICIARY. The individual who is designated
as the Beneficiary under the Plan in accordance with section 401(a)(9) and the
proposed regulations thereunder.
(c) DISTRIBUTION CALENDAR YEAR. A calendar year for which a
minimum distribution is required. For distributions beginning before the
Participant's death, the first Distribution Calendar Year is the calendar year
immediately preceding the calendar year which contains the Participant's
Required Beginning Date. For distributions beginning after the Participant's
death, the first Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to section 11.5 above.
(d) LIFE EXPECTANCY.
(i) Life Expectancy and joint and last survivor
expectancy are computed by use of the expected return multiples in Table V and
VI of section 1.72-9 of the income tax regulations.
(ii) Unless otherwise elected by the Participant (or
Spouse, in the case of distributions described in section 11.5(b)(ii)above) by
the time distributions are required to begin, life expectancies shall be
recalculated
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annually. Such election shall be irrevocable as to the Participant (or Spouse)
and shall apply to all subsequent years. The Life Expectancy of a non-
Spouse Beneficiary may not be recalculated.
(e) Participant's Benefit.
(i) The Account balance as of the last valuation date in the
calendar year immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any contributions or
forfeitures allocated to the Account balance as of dates in the valuation
calendar year after the valuation date and decreased by distributions made in
the valuation calendar year after the valuation date.
(ii) For purposes of subsection (i) above, if any portion of
the minimum distribution for the first Distribution Calendar Year is made in
the second Distribution Calendar Year on or before the Required Beginning Date,
the amount of the minimum distribution made in the second Distribution Calendar
Year shall be treated as if it had been made in the immediately preceding
Distribution Calendar Year.
(f) Required Beginning Date.
(i) General Rule. The Required Beginning Date of a Participant
is the first day of April of the calendar year following the calendar year in
which the Participant attains age seventy and one-half (70 1/2).
(ii) Transitional Rules. The Required Beginning Date of a
Participant who attains age seventy and one-half (70 1/2) before January 1,
1988, shall be determined in accordance with (1) or (2) below:
(1) Non-Five-Percent Owners. The Required Beginning Date
of a Participant who is not a Five Percent (5%) Owner is the first day of April
of the calendar year following the calendar year in which the later of
retirement or attainment of age seventy and one-half (70 1/2) occurs.
(2) Five Percent Owners. The Required Beginning Date of a
Participant who is a Five Percent (5%) Owner during any year beginning after
December 31, 1979, is the first day of April following the later of:
(A) the calendar year in which the Participant
attains age seventy and one-half (70 1/2); or
(B) the earlier of the calendar year with or within
which ends the Plan Year in which the Participant becomes a Five Percent (5%)
Owner, or the calendar year in which the Participant retires. The Required
Beginning Date of a Participant who is not a Five Percent (5%) Owner who
attains age seventy and one-half (70 1/2) during 1988 and who has not retired
as of January 1, 1989, is April 1, 1990.
(iii) Five Percent Owner. A Participant is treated as a Five
Percent (5%) Owner for purposes of this section if such Participant is a Five
Percent (5%) Owner as defined in section 416(i) of the Code (determined in
accordance with section 416 but without regard to whether the Plan is to-heavy)
at any time during the Plan Year ending with or within the calendar year in
which such owner attains age sixty-six and one-half (66 1/2) or any subsequent
year.
(iv) Once distributions have begun to a Five Percent (5%) Owner
under this section, they must continue to be distributed, even if the
Participant ceases to be a Five Percent (5%) Owner in a subsequent year.
11.8 Transitional Rule.
(a) Notwithstanding the other requirements of this ARTICLE and
subject to the requirements of ARTICLE 9, distribution on behalf of any
Employee, including a Five Percent (5%) Owner, may be made in accordance with
all of the following requirements (regardless of when such distribution
commences):
(i) The distribution by the Trust is one which would not have
disqualified such trust under section 401(a)(9) of the Internal Revenue Code as
in effect prior to amendment by the Deficit Reduction Act of 1984.
(ii) The distribution is in accordance with a method of
distribution designated by the Employee whose interest in the Trust is being
distributed or, if the Employee is deceased, by a Beneficiary of such Employee.
(iii) Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before January 1, 1984.
(iv) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
(v) The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distributions will be made, and in
the case of any distribution upon the Employee's death, the Beneficiaries of
the Employee listed in order of priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation contains the
required information described above with respect to the distributions to be
made upon the death of the Employee.
(c) For any distribution which commences before January 1, 1984, but
continues after December 31, 1983, the Employee, or the Beneficiary, to whom
such distribution is being made, will be presumed to have designated the method
of distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in subsections (a)(i) and (a)(v).
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of section 401(a)(9) of the Code and the proposed
regulations thereunder. If a designation is revoked subsequent to the date
distributions are required to begin, the Trust must distribute by the end of
the calendar year following the calendar year in which the revocation occurs
the total amount not yet distributed which would have been required to have
been distributed to satisfy section 401(a)(9) of the Code and the regulations
thereunder but for the section 242(b)(2) election.
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For calendar years beginning after December 31, 1988, such distributions must
meet the minimum distribution incidental benefit requirements in section
1.401(a)(9)-2 of the proposed regulations. Any changes in the designation will
be considered to be a revocation of the designation. However, the mere
substitution or addition of another beneficiary (one not named in the
designation)under the designation will not be considered to be a revocation of
the designation, so long as such substitution or addition does not alter the
period over which distributions are to be made under the designation, directly
or indirectly (for example, by altering the relevant measuring life). In the
case in which an amount is transferred or rolled over from one plan to another
plan, the rules in Q&A J-2 and Q&A J-3 shall apply.
11.9 OPTIONAL FORMS OF BENEFIT
(a) Except to the extent benefits are required to be paid in the form
of an automatic joint and survivor annuity under ARTICLE 9, any amount which a
Participant shall be entitled to receive under the Plan shall be distributed in
one or a combination of the following ways:
(i) in a lump-sum payment of cash, the amount of which
shall be determined by redeeming all Shares credited to the Participant's
Account under the Plan as of the date of distribution;
(ii) in a lump-sum payment including a distribution in kind
of all Shares credited to the Participant's Account under the Plan as of the
date of distribution;
(iii) in substantially equal monthly, quarterly, or annual
installment payments of cash, or the distribution of Shares in kind, over a
period certain not to exceed the Life Expectancy of the Participant or the joint
and last survivor Life Expectancy of the Participant and his Beneficiary,
determined in each case as of the earlier of: (1) the end of the Plan Year in
which occurs the event entitling the Participant to a distribution of benefits,
or (2) the date such installments commence;
(iv) if permitted by the Sponsor, in monthly, quarterly, or
annual installment payments of cash, or the distribution of Shares in kind, so
that the amount distributed in each Plan Year equals the quotient obtained by
dividing the Participant's Account at the beginning of that Plan Year by the
joint and last survivor Life Expectancy of the participant and the Beneficiary
for that Plan Year. The Life Expectancy will be computed using the recomputation
method described in section 11.7(d). Unless the Spouse of the retired
Participant is the Beneficiary, the actuarial present value of all expected
payments to the retired Participant must be more than fifty percent (50%) of the
actuarial present value of payments to the retired Participant and the
Beneficiary; or
(v) by application of the Participant's vested Account to
the purchase of a nontransferable immediate or deferred annuity contract, on an
individual or group basis. Unless the Spouse of the retired Participant is the
Beneficiary, the actuarial present value of all expected payments to the
retired Participant must be more than fifty percent (50%) of the actuarial
present value of payments to the retired Participant and the Beneficiary.
(b) If the Participant fails to select a method of distribution,
except as may be required by ARTICLE 9, all amounts which he is entitled to
receive under the Plan shall be distributed to him in a lump-sum payment.
ARTICLE 12
WITHDRAWALS
12.1 WITHDRAWAL OF NONDEDUCTIBLE VOLUNTARY CONTRIBUTIONS. Subject to the
Qualified Election requirements of ARTICLE 9 and section 12.3, any Participant
who has made nondeductible voluntary contributions may, upon thirty (30) days
notice in writing filed with the Plan Administrator, have paid to him all or
any portion of the fair market value of his nondeductible voluntary contribution
subaccount.
12.2 HARDSHIP WITHDRAWALS. If the Adoption Agreement so provides and
the Employer elects, this section applies only to the profit sharing
contribution subaccount and only if the profit sharing allocation formula
selected in the Adoption Agreement is not integrated with Social Security.
(a) Demonstration of Need. Subject to the Qualified Election
requirements of ARTICLE 9 and section 12.3, if a Participant establishes an
immediate and heavy financial need for funds because of a hardship resulting
form the purchase or renovation of a primary residence, the education of the
participant or a member of his immediate family, or (including special
education), the medial or personal expenses of the Participant or a member of
his immediate family, or other demonstrable emergency as determined by the Plan
Administrator on a uniform and nondiscriminatory basis, the Participant shall
be permitted, subject to the limitations of subsection (b) below, to make a
hardship withdrawal of an amount credited to his profit sharing contribution
subaccount under the Plan.
(b) Amount of Hardship Withdrawal. The amount of any hardship
withdrawal by a Participant under subsection (a) above shall not exceed the
amount required to meet the immediate financial need created by the hardship
and not reasonably available from other resources of the Participant.
(c) Prior Withdrawal of Nondeductible Voluntary Participant
Contributions. A Participant shall not be permitted to make a hardship
withdrawal under subsection (a) above unless he has already withdrawn, in
accordance with section 12.1, any amount credited to his nondeductible
voluntary contributions subaccount.
12.3 MANNER OF MAKING WITHDRAWALS. Any withdrawal by a Participant under
the Plan shall be made only after the Participant files a written request with
the plan Administrator specifying the nature of the withdrawal (and the reasons
therefor, if a hardship withdrawal), and the amount of funds requested to be
withdrawn. Upon approving any withdrawal, the Plan Administrator shall furnish
the Trustee with written instructions directing the Trustee to make the
withdrawal in a lump-sum payment of cash to the Participant. In making any
withdrawal payment, the Trustee shall be fully
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entitled to rely on the instructions furnished by the Plan Administrator, and
shall be under no duty to make any inquiry or investigation with respect
thereto. Unless section 9.6 is applicable, if the Participant is married, his
Spouse must consent to the withdrawal pursuant to a Qualified Election (as
defined in section 9.4(c)) within the ninety (90) day period ending on the date
of the withdrawal.
12.4 LIMITATIONS ON WITHDRAWALS. The Plan Administrator may prescribe
uniform and nondiscriminatory rules and procedures limiting the number of times
a Participant may make a withdrawal under the Plan during any Plan Year, and
the minimum amount a Participant may withdraw on any single occasion.
13.1 GENERAL PROVISIONS.
(a) If the Adoption Agreement so provides and the Employer so elects,
loans shall be made available to any Participant or Beneficiary who is
party-in-interest (as defined in section 3(14) of ERISA) on a reasonably
equivalent basis. A Participant or Beneficiary who is not a party-in-interest
(as defined in section 3(14) of ERISA) shall not be eligible to receive a loan
under this ARTICLE.
(b) Loans shall not be made available to Highly-Compensated
Employees (as defined in section 414(q) of the Code) in an amount greater than
the amount made available to other Employees.
(c) Loans must be adequately secured and bear a reasonable interest
rate.
(d) No participant loan shall exceed the present value of the
Participant's Vested Account Balance.
(e) Unless section 9.6 is applicable, a Participant must obtain the
consent of his or her Spouse, if any, to use of the Account balance as security
for the loan. Spousal consent shall be obtained no earlier than the beginning
of the ninety(90) day period that ends on the date on which the loan is to be
so secured. The consent must be in writing, must acknowledge the effect of the
loan, and must be witnessed by a Plan representative or notary public. Such
consent shall thereafter be binding with respect to the consenting Spouse or any
subsequent Spouse with respect to that loan. A new consent shall be required if
the Account balance is used for renegotiation, extension, renewal or other
revision of the loan.
(f) In the event of default, foreclosure on the note and attachment
of security will not occur until a distributable event occurs under the Plan.
(g) Loans will not be made to any shareholder-employee or
Owner-Employee. For purposes of this requirement, a shareholder-employee means
an Employee or officer of an electing small business (subchapter S) corporation
who owns (or is considered as owning within the meaning of section 318(a)(1)
of the Code), on any day during the taxable year of such corporation, more than
five percent(5%) of the outstanding stock of the corporation.
(h) If a valid spousal consent has been obtained in accordance with
subsection (e), then, notwithstanding any other provision of this Plan, the
portion of the Participant's Vested Account Balance used as a security interest
held by the Plan by reason of a loan outstanding to the Participant shall be
taken into account for purposes of determining the amount of the Account
balance payable at the time of death or distribution, but only if the reduction
is used as repayment of the loan. If less than one hundred percent (100%) of
the Participant's Vested Account Balance (determined without regard to the
preceding sentence) is payable to the Surviving Spouse, then the Account
balance shall be adjusted by first reducing the Vested Account Balance by the
amount of the security used as repayment of the loan, and then determining the
benefit payable to the Surviving Spouse.
13.2 ADMINISTRATION OF LOAN PROGRAM.
(a) The Plan's loan program will be administered by the Plan
Administrator.
(b) Loan requests shall be made on a form prescribed by the Plan
Administrator and shall comply with section 13.4.
(c) Loan request that comply with all the requirements of this
ARTICLE shall be approved by the Plan Administrator.
(d) The rate of interest to be charged on loans shall be determined
under section 13.5.
(e) The only collateral that may be used as security for a loan, and
the limitations and requirements applicable, are determined under
section 13.6.
(f) The rules regarding defaults are set forth in section 13.9.
13.3 AMOUNT OF LOAN. Loans to any Participant or Beneficiary will not be
made to the extent that such loan, when added to the outstanding balance of all
other loans to the Participant or Beneficiary, would exceed the lesser of:
(a) fifty thousand dollars ($50,000) reduced by the excess (if any) of
the highest outstanding balance of loans during the one (1) year period ending
on the day before the loan is made, over the outstanding balance of loans from
the Plan on the date the loan is made; or
(b) one-half(1/2) the present value of the nonforfeitable accrued
benefit of the Participant.
(c) For the purpose of the above limitation, all loans from all
plans of the Employer and other members of a group of employers described in
sections 414(b), 414(c) and 414(m) of the Code are aggregated.
13.4 MANNER OF MAKING LOANS. A request by a Participant for a loan shall
be made in writing to the Plan Administrator and shall specify the amount of
the loan, and the subaccount(s) or Shares of the Participant from which the loan
should be made. The terms and conditions on which the Plan Administrator shall
approve loans under the Plan shall be applied on a uniform and
nondiscriminatory basis with respect to all Participants. If a Participant's
request for a loan is
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approved by the Plan Administrator, the Plan Administrator shall furnish the
Trustee with written instructions directing the Trustee to make the loan in a
lump-sum payment of cash to the Participant. In making any loan payment under
this ARTICLE, the Trustee shall be fully entitled to rely on the instructions
furnished by the Plan Administrator and shall be under no duty to make any
inquiry or investigation with respect thereto.
13.5 TERMS OF LOAN. Loans shall be made on such terms and subject to
such limitations as the Plan Administrator shall prescribe. Furthermore, any
loan shall, by its terms, require that repayment (principal and interest) be
amortized in level payments, not less frequently than quarterly, over a period
not extending beyond five (5) years from the date of the loan, unless such loan
is used to acquire a dwelling unit which, within a reasonable time (determined
at the time the loan is made) will be used as the principal residence of the
Participant. The rate of interest to be charged shall be determined by the Plan
Administrator in accordance with the rates quoted by representative financial
institutions in the local area for similar loans.
13.6 SECURITY FOR LOAN. Any loan to a Participant under the Plan
shall be secured by the pledge of all the Participant's right, title, and
interest in the Trust. Such pledge shall be evidenced by the execution of a
promissory note by the Participant which shall provide that, in the event of
any default by the participant on a loan repayment, the Plan Administrator
shall be authorized (to the extent permitted by law) to deduct the amount of
the loan outstanding and any unpaid interest due thereon from the Participant's
wages or salary to be thereafter paid by the Employer, and to take any and all
other actions necessary and appropriate to enforce collection of the unpaid
loan. An assignment or pledge of any portion of the Participant's interest in
the Plan and a loan, pledge, or assignment with respect to any insurance
contract purchased under the Plan, will be treated as a loan under this
section. In the event the value of the Participant's vested Account at any time
is less than one hundred twenty-five percent (125%) of the outstanding loan
balance, the Plan Administrator shall request additional collateral of
sufficient value to adequately secure the repayment of the loan. Failure to
provide such additional collateral upon a request of the Plan Administrator
shall constitute an event of default.
13.7 SEGREGATED INVESTMENT. Loans shall be considered a Participant
directed investment and, for the limited purposes of allocated earnings and
losses pursuant to ARTICLE 5, shall not be considered a part of the common fund
under the Trust.
13.8 REPAYMENT OF LOAN. The Plan Administrator shall have the sole
responsibility for ensuring that a Participant timely makes all loan
repayments, and for notifying the Trustee in the event of any default by the
Participant on the loan. Each loan repayment shall be paid to the Trustee and
shall be accompanied by written instructions from the Plan Administrator that
identify the Participant on whose behalf the loan repayment was being made.
13.9 DEFAULT ON LOAN.
(a) In the event of a termination of the Participant's
employment with the Affiliated Employers or a default by a Participant on a
loan repayment, all remaining payments on the loan shall be immediately due and
payable. The Employer shall, upon the direction of the Plan Administrator, to
the extent permitted by law, deduct the total amount of the loan outstanding
and any unpaid interest due thereon from the wages or salaries payable to the
Participant by the Employer in accordance with the Participant's promissory
note. In addition, the Plan Administrator shall take any and all other actions
necessary and appropriate to enforce collection of the unpaid loan. However,
attachment of the Participant's Account pledged as security will not occur
until a distributable event occurs under the Plan.
(b) For purposes of this section, the term "default" shall
mean failure, by a period of at least ten (10) days, to make any loan payment
(whether principal or interest or both) that is due and payable. Neither the
Plan Administrator nor any other fiduciary is required to give any written or
oral notice of default.
13.10 UNPAID AMOUNTS. Upon the occurrence of a Participant's
retirement or death, or upon a Participant's fifth consecutive Break in Service
or earlier distribution, the unpaid balance of any loan, including any unpaid
interest, shall be deducted from any payment or distribution from the Trust to
which such Participant or his Beneficiary may be entitled. If after charging
the Participant's Account with the unpaid balance of the loan, including any
unpaid interest, there still remains an unpaid balance of any such loan and
interest, then the remaining unpaid balance of such loan and interest shall be
charged against any property pledged as security with respect to such loan.
ARTICLE 14
INSURANCE
14.1 INSURANCE. If the Adoption Agreement so provides and the
Employer elects to allocate or permit Participants to allocate a portion of
their Accounts to purchase life insurance, the ensuing subsections of this
ARTICLE shall apply:
14.2 POLICIES. The Plan Administrator shall instruct the Trustee
to procure one or more life insurance policies on the Participant's life, the
terms of which shall conform to the requirements of the Plan and the Code. The
policies and the companies which write them shall be subject to the approval of
the Plan Administrator and the Trustee. The Trustee shall procure and hold such
policies in the name of the nominee. The Trustee shall be the sole owner of all
contracts purchased hereunder, and it shall be so designated in each policy and
application therefor.
14.3 BENEFICIARY. The Participant shall have the right to name the
Beneficiary and to choose the benefit option under the policy for the
Beneficiary. The Trustee shall designate the Beneficiary of all such policies
in accordance with the written directions of the Plan Administrator and the
policy terms. Such designations may be outlined in the original application as
forwarded to the issuing company. However, the Plan Administrator shall have
available and shall furnish the
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Participant with the necessary forms for any Beneficiary designation or change
of Beneficiary and it will keep a copy of all executed designations as part of
its records. Upon a Participant's death, the Plan Administrator will promptly
furnish the Trustee a copy of the last designation and shall authorize the
Trustee to complete such forms as the insurance company may require in order to
effect the benefit option.
14.4 PAYMENT OF PREMIUMS. Subject to the provisions of sections 7.3 and
14.5, premium payments to the insurer may be made only by the Trustee with
respect to any insurance policy purchased on behalf of a Participant and shall
constitute first an investment of a portion of the funds of the Participant's
Employer Contribution subaccounts up to the maximum amount of such subaccounts
permitted to be applied toward such premium payments, as provided in section
14.5. If a Participant's subaccounts lack sufficient assets to pay premiums on
a life insurance policy due on his behalf, the Trustee, at the direction of the
Plan Administrator, acting upon the request of the Participant, shall borrow
under the policy loan provisions, if any, the amount necessary to pay such
premiums, using the cash value of the insurance as security, or the Trustee may
liquidate assets held in the Participant's Account, in the same order, of
sufficient value to pay such premiums. Any loans shall be repaid by the
application of earnings, contributions, or forfeitures to the Account of the
Participant insured by such policy. In the absence of the Plan administrator's
direction to borrow or to liquidate assets to pay premiums, the life insurance
policy shall be put on a paid-up-basis or, if it has no cash value, canceled.
14.5 LIMITATION ON INSURANCE PREMIUMS. The Trustee shall not pay, nor
shall anyone on behalf of the Trustee pay, any life insurance premium for any
Participant out of the Participant's Employer Contribution subaccounts unless
the amount of such payment, plus all premiums previously so paid on behalf of
the Participant, is less than fifty percent (50%) of the Employer Contributions
and forfeitures allocated to the Participant's Employer Contribution
subaccounts as determined on the date such premium is paid with respect to
reserve life insurance policies and shall be less than twenty-five percent
(25%) thereof with respect to nonreserve (term) policies, or, if both reserve
life and term insurance are purchased on the life of any Participant, the sum
of the term insurance premium plus one-half (1/2) of the reserve life premiums
may not exceed twenty-five percent (25%) of the Employer Contributions made on
behalf of such Participant. For purposes of these incidental insurance
provisions, reserve life insurance contracts are contracts with both
nondecreasing death benefits and nonincreasing premiums. Dividends received on
life insurance policies shall be considered a reduction of premiums paid in
such computations.
If payment of premiums on a Participant's life insurance policy is
prohibited because of the limitation, the Trustee, as directed by the Plan
Administrator, shall permit the Participant to maintain that part of the
coverage made available by the prohibited premiums, either by payment of the
amount of the prohibited premium by the Participant from sources other than the
Trust or by distributing the policy to the extent of the Participant's vested
interest to the Participant and eliminating it from the Trust.
Nothing contained in the foregoing provisions of section 14.4 and
this section shall be deemed to authorize the payment of any premium or
premiums for any Participant which would result in a failure to maintain any
mandatory investment in Shares required by the Sponsor in the account or
subaccounts of any such Participant.
14.6 INSURANCE COMPANY. No insurance company which may issue any policies
for the purposes of this Plan shall be required to take or permit any action
contrary to the provisions of said policies, nor shall such insurance company
be deemed to be a party to, or responsible for the validity of, this Plan for
any purpose. No such insurance company shall be required to look into the terms
of this Plan or question any action of the Trustee hereunder, nor be
responsible to see that any action of the Trustee is authorized by the terms of
this Plan. Any such issuing insurance company shall be fully discharged from
any and all liability for any amount paid to the Trustee or paid in accordance
with the direction of the Trustee, as the case may be, or for any change made
or action taken by such insurance company upon such direction and no such
insurance company shall be obliged to see the distribution or further
application of any monies paid by it. The certificate of the Trustee signed by
one of its trust officers, assistant secretary, or other authorized
representative thereof, may be received by any insurance company as conclusive
evidence of any of the matters mentioned in the Plan and any insurance company
shall be fully protected in taking or permitting any action on the faith
thereof and shall incur no liability or responsibility for so doing.
14.7 DISTRIBUTION OF POLICIES. Upon a Participant's death, the Trustee,
upon direction of the Plan Administrator, shall procure the payment of the
proceeds of any policy held by the Participant in accordance with its terms and
this Plan. The Trustee shall be required to pay over all the proceeds of any
policy to the Participant's Designated Beneficiary in accordance with the
distribution provisions of the Plan. A Participant's Spouse will be the
Designated Beneficiary unless a Qualified Election has been made in accordance
with section 9.4(c) of the Plan. Under no circumstances shall the Trust retain
any part of the proceeds. Subject to the joint and survivor annuity
requirements of ARTICLE 9, the policies shall be converted or distributed upon
commencement of benefits in accordance with the provisions of this section.
Upon a Participant's retirement at or after his Normal Retirement Age, unless
there is a single sum distribution in which case any policy shall be
distributed, any such policy shall be converted paid-up contract and delivered
to the Participant but the Plan Administrator may, with the Participant's
consent, direct that a portion or all of such cash value of the policy be
converted to provide retirement income as permitted within the terms of the
policy and this Plan. Upon a Participant's retirement due to Total and
Permanent Disability, any such policy shall be held for his account and
assigned or delivered to the Participant in addition to any other benefits
provided by this Plan. Upon a Participant's termination of employment for
reasons other than death, Total and Permanent Disability, or retirement as
stated above, to the extent of life insurance
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purchased by Employer Contributions, he shall be entitled to a vested interest
in any policy held for his account as his interest is vested in the remainder
of his Employer Contribution subaccounts (exclusive of any such policy).
Whenever the Participant is entitled to one hundred percent (100%), then such
policy shall be assigned and delivered to the Participant in accordance with its
terms and the terms of the Plan. Whenever the Participant is entitled to
vesting of less than one hundred percent(100%), then the Participant shall be
entitled to a vested interest of the cash surrender value of any such policy
equal to his percent of vested interest in his Employer Contribution
subaccounts, exclusive of the policy, and one of the following distribution
procedures shall apply:
(a) If the nonvested portion of the cash surrender value of all
policies held for the Participant's Account is less than the amount of his
vested termination benefit exclusive of the policies, then, such policy shall
be assigned to the Participant and the remainder of the Participant's vested
interest in the Participant's Employer Contribution subaccounts shall be
reduced by the cash surrender value of the nonvested portion of all policies,
after which it shall be paid or distributed to the Participant in accordance
with the terms of the Plan; or
(b) If the nonvested portion of the cash surrender value of all
policies held for the Participant's Account exceeds the Participant's vested
interest in the Employer Contribution subaccount exclusive of such policies,
the Participant shall be given the opportunity to purchase such policies by
paying to the Trustee the amount of such excess within thirty (30) days after
notice to him of the amount to be paid. Upon receipt of such payment said policy
shall be assigned and delivered to the Participant to the full satisfaction of
all termination benefits under this Plan. Any such policy not so purchased
shall be surrendered by the Trustee for its cash value and the proceeds thereof
deposited in the Trust for reallocation pursuant to ARTICLE 5.
It is the intention hereof that the total termination benefit of a
Participant whose interest is not fully vested shall be equal to the sum of the
vested percentage of his Employer Contribution subaccounts exclusive of all
such policies and the same percentage of the cash value of all such policies
held for his Account. To the extent possible under the foregoing provisions,
such total termination benefits shall be satisfied by the transfer and delivery
to the Participant of one or more such policies with the balance, if any, to be
paid in cash or in kind.
14.8 POLICY FEATURES. The Trustee shall arrange, where possible, that all
policies purchased for the benefit of a Participant shall have the same dividend
option which shall be on the premium reduction plan, and as nearly as may be
possible all policies issued under the Plan shall have the same anniversary
date. To the extent any dividends or credits earned on insurance policies are
not applied toward the next premiums due, they shall be allocated to the
Participant's Employer Contribution subaccount in the same manner as a
Participant's directed investment.
14.9 CHANGED CONDITIONS. From time to time because of changed conditions,
the Trustee, acting at the direction of the Plan Administrator upon the
election of the Participant concerned, shall obtain an additional contract or
policy or make such change in the contracts or policies maintained by the
Trustee on the life of the Participant as may be required by such changed
conditions, within the limits permitted by the insurance company which issued
or is requested to issue a contract and the limits established by this Plan.
14.10 CONFLICTS. In the event of any conflict between the terms of the
Plan and the provisions of any contract issued hereunder, the terms of the Plan
shall control.
ARTICLE 15
ADMINISTRATION
15.1 DUTIES AND RESPONSIBILITIES OF FIDUCIARIES; ALLOCATION OF FIDUCIARY
RESPONSIBILITY. A fiduciary of the Plan shall have only those specific powers,
duties, responsibilities, and obligations as are explicitly given him under the
Plan and Trust Agreement. In general, the Employer shall have the sole
responsibility for making contributions to the Plan required under ARTICLE 4;
appointing the Trustee and the Plan Administrator; and determining the funds
available for investment under the Plan. The Plan Administrator shall have the
sole responsibility for the administration of the Plan, as more fully described
in section 15.2. It is intended that each fiduciary shall be responsible only
for the proper exercise of his own powers duties, responsibilities, and
obligations under the Plan and Trust Agreement, and shall not be responsible
for any act or failure to act of another fiduciary. A fiduciary may serve in
more than one fiduciary capacity with respect to the Plan.
15.2 POWERS AND RESPONSIBILITIES OF THE PLAN ADMINISTRATOR.
(a) ADMINISTRATION OF THE PLAN. The Plan Administrator shall have all
powers necessary to administer the Plan, including the power to construe and
interpret the Plan documents; to decide all questions relating to an
individual's eligibility to participate in the Plan; to determine the amount,
manner and timing of any distribution of benefits or withdrawal under the Plan;
to approve and ensure the repayment of any loan to a Participant under the
Plan; to resolve any claim for benefits in accordance with section 15.7; and to
appoint or employ advisors, including legal counsel to render advice with
respect to any of the Plan Administrator's responsibilities under the Plan.
Any construction, interpretation, or application of the Plan by the Plan
Administrator shall be final, conclusive, and binding. All actions by the Plan
Administrator shall be taken pursuant to uniform standards applied to all
persons similarly situated. The Plan Administrator shall have no power to add
to, subtract from, or modify any of the terms of the Plan, or to change or add
to any benefits provided by the Plan, or to waive or fail to apply any
requirements of eligibility for a benefit under the Plan.
(b) RECORDS AND REPORTS. The Plan Administrator shall be responsible
for maintaining sufficient records to reflect the Eligibility Computation
Periods in which an Employee is credited with one or more Years of Service
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for purposes of determining his eligibility to participate in the Plan, and the
Compensation of each Participant for purposes of determining the amount of
contributions that may be made by or on behalf of the Participant under the
Plan. The Plan Administrator shall be responsible for submitting all required
reports and notifications relating to the Plan to Participants or their
Beneficiaries, the Internal Revenue Service and the Department of Labor.
(c) Furnishing Trustee with Instructions. The Plan Administrator
shall be responsible for furnishing the Trustee with written instructions
regarding all contributions to the Trust, all distributions to Participants in
accordance with ARTICLE 10 all withdrawals by Participants in accordance with
ARTICLE 12, all loans to Participants in accordance with ARTICLE 13 and all
purchases of life insurance in accordance with ARTICLE 14. In addition, the
Plan Administrator shall be responsible for furnishing the Trustee with any
further information respecting the Plan which the Trustee may request for the
performance of its duties or for the purpose of making any returns to the
Internal Revenue Service or Department of Labor as may be required of the
Trustee.
(d) Rules and Decisions. The Plan Administrator may adopt such
rules as it deems necessary, desirable, or appropriate in the administration of
the Plan. All rules and decisions of the Plan Administrator shall be applied
uniformly and consistently to all Participants in similar circumstances. When
making a determination or calculation, the Plan Administrator shall be entitled
to rely upon information furnished by a Participant or Beneficiary, the
Employer, the legal counsel of the Employer, or the Trustee.
(e) Application and Forms for Benefits. The Plan Administrator may
require a Participant or Beneficiary to complete and file with it an
application for a benefit, and to furnish all pertinent information requested
by it. The Plan Administrator may rely upon all such information so furnished
to it, including the Participant's or Beneficiary's current mailing address.
(f) Facility of Payment. Whenever, in the Plan Administrator's
opinion, a person entitled to receive a payment of a benefit or installment
thereof is under a legal disability or is incapacitated in any way so as to be
unable to manage his financial affairs, it may direct the Trustee to make
payments to such person or to the legal representative or to a relative or
friend of such person for that person's benefit, or it may direct the Trustee
to apply the payment for the benefit of such person in such manner as it
considers advisable.
15.3 ALLOCATION OF DUTIES AND RESPONSIBILITIES. The Plan Administrator
may, by written instrument, allocate among its members or employees any of its
duties and responsibilities not already allocated under the Plan or may
designate persons other than members or employees to carry out any of the Plan
Administrator's duties and responsibilities under the Plan. Any such duties or
responsibilities thus allocated must be described in the written instrument. If
a person other than an Employee of the Employer is so designated, such person
must acknowledge in writing his acceptance of the duties and responsibilities
allocated to him.
15.4 APPOINTMENT OF THE PLAN ADMINISTRATOR. The Employer shall designate
in the Adoption Agreement the Plan Administrator who shall administer the
Employer's Plan. Such Plan Administrator may consist of an individual, a
committee of two or more individuals, whether or not, in either such case, the
individual or any of such individuals are Employees of the Employer, a
consulting firm or other independent agent, the Trustee (with its consent), or
the Employer itself. The Plan Administrator shall be charged with the full
power and the responsibility for administering the Plan in all its details. If
no Plan Administrator has been appointed by the Employer, or if the person
designated as Plan Administrator by the Employer is not serving as such for any
reason, the Employer shall be deemed to be the Plan Administrator of the Plan.
The Plan Administrator may be removed by the Employer, or may resign by giving
notice in writing to the Employer, and in the event of the removal,
resignation, or death, or other termination of service by the Plan
Administrator, the Employer shall, as soon as practicable, appoint a successor
Plan Administrator, such successor thereafter to have all of the rights,
privileges, duties, and obligations of the predecessor Plan Administrator.
15.5 EXPENSES. The Employer shall pay all expenses authorized and
incurred by the Plan Administrator in the administration of the Plan except to
the extent such expenses are paid from the Trust.
15.6 LIABILITIES. The Plan Administrator and each person to whom duties
and responsibilities have been allocated pursuant to section 15.3 may be
indemnified and held harmless by the Employer with respect to any alleged
breach of responsibilities performed or to be performed hereunder. The Employer
and each Affiliated Employer shall indemnify and hold harmless the Sponsor
against all claims, liabilities, fines, and penalties, and all expenses
reasonably incurred by or imposed upon him (including, but not limited to,
reasonable attorney's fees) which arise as a result of actions or failure to
act in connection with the operation and administration of the Plan.
15.7 CLAIMS PROCEDURE.
(a) Filing a Claim. Any Participant or Beneficiary under the Plan
may file a written claim for a Plan benefit with the Plan Administrator or with
a person named by the Plan Administrator to receive claims under the Plan.
(b) Notice of Denial of Claim. In the event of a denial or
limitation of any benefit or payment due to or requested by any Participant or
Beneficiary under the Plan ("claimant"), claimant shall be given a written
notification containing specific reasons for the denial or limitation of his
benefit. The written notification shall contain specific reference to the
pertinent Plan provisions on which the denial or limitation of his benefit is
based. In addition, it shall contain a description of any other material or
information necessary for the claimant to perfect a claim, and an explanation
of why such material or information is necessary. The notification shall
further provide appropriate information as to the steps to be taken if the
claimant wishes to submit his claim for review. This written notification shall
be given to a claimant within ninety (90)
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days after receipt of his claim by the Plan Administrator unless special
circumstances require an extension of time for processing the claim. If such an
extension of time for processing is required, written notice of the extension
shall be furnished to the claimant prior to the termination of said ninety (90)
day period, and such notice shall indicate the special circumstances which make
the postponement appropriate.
(c) Right of Review. In the event of a denial or limitation of his
benefit, the claimant or his duly authorized representative shall be permitted
to review pertinent documents and to submit to the Plan Administrator issues and
comments in writing. In addition, the claimant or his duly authorized
representative may make a written request for a full and fair review of his
claim and its denial by the Plan Administrator; provided, however, that such
written request must be received by the Plan Administrator (or its delegate to
receive such requests) within sixty (60) days after receipt by the claimant of
written notification of the denial or limitation of the claim. The sixty (60)
day requirement may be waived by the Plan Administrator in appropriate cases.
(d) Decision on Review. A decision shall be rendered by the Plan
Administrator within sixty (60) days after the receipt of the request for
review, provided that where special circumstances require an extension of time
for processing the decision, it may be postponed on written notice to the
claimant (prior to the expiration of the initial sixty (60) day period) for an
additional sixty (60) days, but in no event shall the decision by rendered more
than one hundred twenty (120) days after the receipt of such request for
review. Any decision by the Plan Administrator shall be furnished to the
claimant in writing and shall set forth the specific reasons for the decision
and the specific Plan provisions on which the decision is based.
(e) Court Action. No Participant or Beneficiary shall have the
right to seek judicial review of a denial of benefits, or to bring any action
in any court to enforce a claim for benefits prior to filing a claim for
benefits or exhausting his rights to review under this section.
ARTICLE 16
AMENDMENT, TERMINATION AND MERGER
16.1 SPONSOR'S POWER TO AMEND. The Sponsor may amend any part of the
Plan. For purposes of Sponsor's amendments, the mass submitted shall be
recognized as the agent of the Sponsor. If the Sponsor does not adopt the
amendments made by the mass submitted, it will no longer be identical to or a
minor modifier of the mass submitted plan.
16.2 AMENDMENT BY ADOPTING EMPLOYER.
(a) The Employer may:
(i) change the choice of options in the Adoption Agreement;
(ii) add overriding language in the Adoption Agreement when
such language is necessary to satisfy section 415 or section 416 of the Code
because of the required aggregation of multiple plans; and
(iii) add certain model amendments published by the Internal
Revenue Service which specifically provide that their adoption will not cause
the Plan to be treated as individually designed.
(b) An Employer that amends the Plan for any other reason, including
a waiver of the minimum funding requirement under section 412(d) of the Code,
will no longer participate in this prototype plan and will be considered to
have an individually designed plan.
16.3 VESTING UPON PLAN TERMINATION. In the event of the termination or
partial termination of the Plan, the Account balance of each affected
Participant will be nonforfeitable.
16.4 VESTING UPON COMPLETE DISCONTINUANCE OF CONTRIBUTIONS. In the event
of a complete discontinuance of contributions under the Plan, the Account
balance of each affected Participant will be nonforfeitable.
16.5 MAINTENANCE OF BENEFITS UPON MERGER. In the event of a merger or
consolidation with, or transfer of assets to any other plan, each Participant
will receive a benefit immediately after such merger, consolidation or transfer
(if the Plan then terminated) which is at least equal to the benefit the
Participant was entitled to immediately before such merger, consolidation or
transfer (if the Plan had been terminated).
16.6 SPECIAL AMENDMENTS. The Employer may from time to time make any
amendment to the Plan that may be necessary to satisfy section 415 or 416 of
the Code. Any such amendment will be adopted by the Employer by completing
overriding Plan language in the Adoption Agreement. In the event of such an
agreement, the Employer must obtain a separate determination letter from the
Internal Revenue Service to continue reliance on the Plan's qualified status.
ARTICLE 17
MISCELLANEOUS
17.1 EXCLUSIVE BENEFIT OF PARTICIPANTS AND BENEFICIARIES.
(a) All assets of the Trust shall be retained for the exclusive
benefit of Participants and their Beneficiaries, and shall be used only to pay
benefits to such persons or to pay the fees and expenses of the Trust. The
assets of the Trust shall not revert to the benefit of the Employer, except as
otherwise specifically provided in section 17.1(b).
(b) To the extent permitted or required by ERISA and the Code,
contributions to the Trust under this Plan are subject to the following
conditions:
(i) If a contribution or any part thereof is made to the
Trust by the Employer under a mistake of fact, such contribution or part
thereof shall be returned to the Employer within one (1) year after the date
the contribution is made.
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(ii) In the event the Plan is determined not to meet the initial
qualification requirements of section 401 of the Code, contributions made in
respect of any period for which such requirements are not met shall be returned
to the Employer within one (1) year after the Plan is determined not to meet
such requirements, but only if the application for the qualification is made by
the time prescribed by law for filing the Employer's return for the taxable
year in which the Plan is adopted, or such later date as the Secretary of the
Treasury may prescribe.
(iii) Contributions to the Trust are specifically conditioned on
their deductibility under the Code and, to the extent a deduction is disallowed
for any such contribution, such amount shall be returned to the Employer within
one (1) year after the date of the disallowance of the deduction.
17.2 NONGUARANTEE OF EMPLOYMENT. Nothing contained in this Plan shall be
construed as a contract of employment between the Employer and any Employee, or
as a right of any Employee to be continued in the employment of the Employer,
or as a limitation of the right of the Employer to discharge any of its
Employees, with or without cause.
17.3 RIGHTS TO TRUST ASSETS. No Employee, Participant, or Beneficiary
shall have any right to, or interest in, any assets of the Trust upon
termination of employment or otherwise, except as provided under the Plan. All
payments of benefits under the Plan shall be made solely out of the assets of
the Trust.
17.4 NONALIENATION OF BENEFITS. No benefit or interest available
hereunder will be subject to assignment or alienation, either voluntarily or
involuntarily. The preceding sentence shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order is
determined to be a qualified domestic relations order, as defined in section
414(p) of the Code, or any domestic relations order entered before January 1,
1985.
17.5 AGGREGATION RULES.
(a) Except as provided in ARTICLE 6, all Employees of the Employer
or any Affiliated Employer will be treated as employed by a single employer.
(b) If this Plan provides contributions or benefits for one or more
Owner-Employees who control both the business for which this Plan is
established and one or more other trades or businesses, this Plan and the plan
established for other trades or businesses must, when looked at as a single
plan, satisfy sections 401(a) and (d) of the Code for the Employees of this
and all other trades or businesses.
(c) If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
employees of the other trades or businesses must be included in a plan which
satisfies sections 401(a) and (d) of the Code and which provides contributions
and benefits not less favorable than provided for Owner-Employees under this
Plan.
(d) If an individual is covered as an Owner-Employee under the plans
of two or more trades or businesses which are not controlled and the individual
controls a trade or business, then the contributions or benefits of the
employees under the plan of the trades or businesses which are controlled must
be as favorable as those provided for him under the most favorable plan of the
trade or business which is not controlled.
(e) For purposes of paragraphs (b), (c) and (d), an Owner-Employee,
or two or more Owner-Employees, will be considered to control a trade or
business if the Owner-Employee, or two or more Owner-Employees together:
(i) own the entire interest in an unincorporated trade or
business; or
(ii) in the case of a partnership, own more than fifty percent
(50%) of either the capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or
more Owner-Employees shall be treated as owning an interest in a partnership
which is owned, directly or indirectly, by a partnership which such
Owner-Employee, or such two or more Owner-Employees, are considered to control
within the meaning of the preceding sentence.
17.6 FAILURE OF QUALIFICATION. If the Employer's plan fails to attain or
retain qualification, such plan will no longer participate in this
master/prototype plan and will be considered an individually designed plan.
17.7 APPLICABLE LAW. Except to the extent otherwise required by ERISA, as
amended, this Plan shall be construed and enforced in accordance with the laws
of the state in which the Employer's principal place of business is located, as
specified in the Adoption Agreement.
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DETERMINATION LETTERS
69
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<TABLE>
<S> <C>
INTERNAL REVENUE SERVICE Department of the Treasury
Description: Prototype Standardized Profit Sharing Plan
50241605001 Case: 9012605 EIN: 74-1894784
01 Plan: 001 Letter Serial No: D248294a
Washington D.C. 20224
Person to Contact: Ms. Arrington
AIM DISTRIBUTORS, INC. Telephone Number: (202) 566-4576
ELEVEN GREENWAY PLAZA Refer Reply to: E:EP:Q:ICU
SUITE 1919
HOUSTON, TX 77046 Date: 07/10/90
</TABLE>
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit
of their employees. This opinion relates only to the acceptability of the form
of the plan under the Internal Revenue Code. It is not an opinion of the effect
of other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for officers, owners, or highly compensated
employees than for other employees. Except as stated below, the Key District
Director will not issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16) if: (1) an employer ever maintained another qualified plan for one
or more employees who are covered by this plan, other than a specified paired
plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-6 I.R.S. 14; or
(2) after December 31, 1985, the employer maintains a welfare benefit fund
defined in Code section 419(e), which provides postretirement medical benefits
allocated to separate accounts for key employees as defined in Code section
419A(d)(3). In such situations, the employer should request a determination as
to whether the plan, considered with all related qualified plans and, if
appropriate, welfare benefit funds, satisfies the requirements of Code section
401(a)(16) as to limitations on benefits and contributions in Code section 415.
The plan identified above is not a replacement plan as defined in section 3.10
of Rev. Proc. 89-9, 1989-6 I.R.S. 14. Therefore, an adopting employer may not
rely on this opinion letter to extend the remedial amendment period under
section 401(b) of the Code and regulations thereunder.
If you, the plan sponsor, have any questions concerning the IRS processing of
this case, please call the above telephone number. This number is only for use
of the plan sponsor. Individual participants and/or adopting employers with
questions concerning the plan should contact the plan sponsor. The plan's
adoption agreement must include the sponsor's address and telephone number for
inquiries by adopting employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of the plan.
Sincerely yours,
/s/ [ILLEGIBLE]
Chief, Employee Plans Qualifications Branch
<PAGE>
<TABLE>
<S> <C>
Internal Revenue Service Department of the Treasury
Plan Description: Prototype Standardized Money Purchase Pension Plan
M: 50241605001-002 Case: 9812606 EIN: 74-1894784
BPD: 01 Plan: 802 Letter Serial No: D248295a
Washington DC 20224
Person to Contact: Ms. Arrington
AIM DISTRIBUTORS INC
Telephone Number: (202) 566-4576
ELEVEN GREENWAY PLAZA
SUITE 1919 Refer Reply to: E:EP:Q:ICU
HOUSTON, TX 77046
Date: 07/10/90
</TABLE>
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit
of their employees. This opinion relates only to the acceptability of the form
of the plan under the Internal Revenue Code. It is not an opinion of the effect
of other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose jurisdiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). An employer who adopts this plan will be considered to have a plan
qualified under Code section 401(a) provided all the terms of the plan are
followed, and the eligibility requirements and contribution or benefit
provisions are not more favorable for officers, owners, or highly compensated
employees than for other employees. Except as stated below, the Key District
Director will not issue a determination letter with regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code section
401(a)(16). If: (1) an employer ever maintained another qualified plan for one
or more employees who are covered by this plan, other than a specified paired
plan within the meaning of section 7 of Rev. Proc. 89-9, 1989-6 I.R.S. 14; or
(2) after December 31, 1985, the employer maintains a welfare benefit fund
defined in Code section 419(e), which provides postretirement medical benefits
allocated to separate accounts for key employees as defined in Code section
419A(d)(3). In such situations, the employer should request a determination as
to whether the plan, considered with all related qualified plans and, if
appropriate, welfare benefit funds, satisfies the requirements of Code section
401(a)(16) as to limitations on benefits and contributions in Code section 415.
The plan identified above is not a replacement plan as defined in section 3.10
of Rev. Proc. 89-9, 1989-6 I.R.S. 14. Therefore, an adopting employer may not
rely on this opinion letter to extend the remedial amendment period under
section 401(b) of the Code and regulations thereunder.
If you, the plan sponsor, have any questions concerning the IRS processing of
this case, please call the above telephone number. This number is only for use
of the plan sponsor. Individual participants and/or adopting employers with
questions concerning the plan should contact the plan sponsor. The plan's
adoption agreement must include the sponsor's address and telephone number for
inquiries by adopting employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial
Number and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ [ILLEGIBLE]
Chief, Employee Plans Qualifications Branch
<PAGE>
TRUST AGREEMENT
70
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PROTOTYPE DEFINED CONTRIBUTION TRUST
71
<PAGE>
INVESTMENT COMPANY INSTITUTE
PROTOTYPE DEFINED CONTRIBUTION TRUST
TABLE OF CONTENTS
ARTICLE PAGE
- ------- ----
ARTICLE I ACCOUNTS
1.1 Establishing Accounts 4
1.2 Charges Against Accounts 4
1.3 Prospectus to be Provided 4
ARTICLE II RECEIPT OF CONTRIBUTIONS 4
ARTICLE III INVESTMENT POWERS OF THE TRUSTEE
3.1 Investment of Account Assets 4
3.2 Directed Investments 5
3.3 General Investment Powers 5
3.4 Investment in Combined Funds 5
3.5 Other Powers of the Trustee 6
3.6 General Powers 6
3.7 Valuation of Trust 6
3.8 Bonding 6
3.9 Duties not Assigned 6
ARTICLE IV DISTRIBUTIONS FROM A PARTICIPANT'S ACCOUNT 6
ARTICLE V REPORTS OF THE TRUSTEE AND THE PLAN ADMINISTRATOR 7
ARTICLE VI TRUSTEE'S FEES AND EXPENSES OF THE TRUST 7
ARTICLE VII DUTIES OF THE EMPLOYER AND THE PLAN ADMINISTRATOR
7.1 Information and Data to be Furnished 7
the Trustee
7.2 Limitation of Duties 7
ARTICLE VIII LIABILITY OF THE TRUST
8.1 Trustee's Liability 7
ARTICLE IX DELEGATION OF POWERS
9.1 Delegation by the Trustee 8
9.2 Delegation with Employer Approval 8
ARTICLE X AMENDMENT 8
ARTICLE XI RESIGNATION OR REMOVAL OF TRUSTEE 8
ARTICLE XII TERMINATION OF THE TRUST
12.1 Term of the Trust 9
12.2 Termination by the Trustee 9
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ARTICLE XIII MISCELLANEOUS
13.1 No Diversion of Assets 9
13.2 Notices 9
13.3 Multiple Trustees 9
13.4 Conflict with Plan 9
13.5 Applicable Law 9
13.6 Returned Contributions 9
13.7 General Undertaking 9
13.8 Invalidity of Certain Provisions 9
13.9 Counterpart Originals 9
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<PAGE>
TRUST AGREEMENT
The employer identified at the end of this Trust Agreement (the
"Employer") has established a prototype Money Purchase Pension and/ or Profit
Sharing Plan sponsored by the AIM Family of Funds (the "Plan") for the benefit
of Participants therein pursuant to section 401 of the Internal Revenue Code of
1986. As part of the Plan, the Employer has requested such person or persons
(individual, corporate, or other entity), as may be designated in the Adoption
Agreement, to serve as Trustee pursuant to the Trust established for the
investment of contributions under the Plan upon the terms and conditions set
forth in this Trust Agreement.
Unless the context of this Trust Agreement clearly indicates otherwise,
the terms defined in ARTICLE 2 of the Plan entered into by the Employer, of
which this Trust Agreement forms a part, shall, when used herein, have the same
meaning as in the Plan.
ARTICLE I
ACCOUNTS
1.1 ESTABLISHING ACCOUNTS. The Trustee shall open and maintain a Trust
account for the Plan and, as part thereof, Participants' Accounts for such
individuals as the Plan Administrator shall, from time to time, give written
notice to the Trustee as being Participants in the Plan. The Trustee shall also
open and maintain such other subaccounts as may be appropriate or desirable to
aid in the administration of the Plan. Separate subaccounts shall be maintained
for each Participant and shall be credited with the contributions made by the
Employer and with forfeitures allocated to each such Participant pursuant to
the Plan (and all earnings thereon). If nondeductible voluntary contributions
by Participants are permitted by the Plan, the Trustee shall open and maintain
as a part of the Trust a separate subaccount for each Participant who makes
such nondeductible voluntary contributions, each such subaccount to be credited
with the Participant's voluntary contributions (and all earnings attributable
to such contributions). If trustee transfers or rollover contributions from
another qualified plan are received, the Trustee shall open and maintain a
separate rollover subaccount for each Participant, each such subaccount to be
credited with the Participant's trustee transfers or rollover contributions
(and all earnings attributable to such contributions).
1.2 CHARGES AGAINST ACCOUNTS. Upon receipt of written instructions from
the Plan Administrator, the Trustee shall charge the appropriate subaccount of
the Participant for any withdrawals or distributions made under the Plan and
any forfeiture, which may be required under the Plan, of unvested interests
attributable to Employer Contributions. The Plan Administrator will give
written instructions to the Trustee specifying the manner in which Employer
Contributions and any forfeiture of the nonvested portion of Accounts, as
allocated by the Plan Administrator in accordance with the provisions of the
Plan, are to be credited to the various Accounts maintained for Participants.
1.3 PROSPECTUS TO BE PROVIDED. The Plan Administrator shall ensure that
a Participant who makes a nondeductible voluntary contribution has previously
received or receives a copy of the then current prospectus relating to the
Shares. Delivery of such a nondeductible voluntary contribution, pursuant to
the provisions of the Plan by the Plan Administrator to the Trustee shall
entitle the Trustee to assume that the Participant has received such a
prospectus.
ARTICLE II
RECEIPT OF CONTRIBUTIONS
The Trustee shall accept and hold in the Trust contributions made by the
Employer and Participants under the Plan. The Plan Administrator shall give
written instructions to the Trustee specifying the Participants' Accounts to
which contributions are to be credited, the amount of each such credit which is
attributable to Employer Contributions, and the amount, if any, which is
attributable to the Participant's nondeductible voluntary contributions. If
written instructions are not received by the Trustee, or is such instructions
are received but are deemed by the Trustee to be unclear, upon notice to the
Employer and Plan Administrator, the Trustee may elect to hold all or part of
any such contribution in cash, without liability for rising security prices or
distributions made, pending receipt by it from the Plan Administrator of
written instructions or other clarification, or the Trustee may return the
contribution to the Employer. If any contributions or earnings are less than
any minimum which the then current prospectus for the Shares requires, the
Trustee may hold the specified portion of contributions or earnings in cash,
without interest, until such time as the proper amount has been contributed or
earned so that the investment in the Shares required under the Plan may be
made. All payments to the Trust shall be remitted in U.S. currency or other
property to the Trustee at the address specified by it. Any payments not in U.S.
currency may, in the sole discretion of the Trustee, be refused.
ARTICLE III
INVESTMENT POWERS OF THE TRUSTEE
3.1 INVESTMENT OF ACCOUNT ASSETS. The Trustee shall invest the amount of
each contribution made hereunder and all earnings on the Trust in full and
fractional Shares in accordance with the current prospectus for such Shares, in
such amounts and proportions as shall from time to time be designated by the
Plan Administrator on forms provided by the Sponsor, and shall credit such
Shares to the Accounts of each Participant on whose behalf or by whom the
contributions are made and any forfeitures are allocated. All dividends and
capital gain distributions received on the Shares held by the Trustee in each
Account, shall, if received in cash, be reinvested in such Shares in accordance
with the current prospectus for such Shares and shall in any event be credited
to such Account. If any distribution on Shares may be received at the election
of the shareholder in additional Shares, the Trustee shall so elect. The Trustee
74
<PAGE>
shall deliver, or cause to be executed and delivered, to the Plan
Administrator, all notices, prospectuses, financial statements, proxies, and
proxy soliciting materials relating to Shares held hereunder. The Trustee shall
not vote any of the Shares held hereunder, except in accordance with the
written instructions of the Plan Administrator. If no such written instructions
are received, such Shares shall not be voted. The obligations of the Trustee
hereunder may be delegated by it as provided in Sections 9.1 and 9.2.
The Trustee shall sell Shares and purchase Shares to accomplish any change
in investments desired by the Employer as indicated on any amended Adoption
Agreement or other instructions in accordance with the terms of the Plan.
Notwithstanding the above, if periodic payments are being made to a
Participant pursuant to ARTICLE IV hereof, any dividends received on Shares held
in such Participant's Account, which dividends are invested at an offering price
which includes a sales charge, need not be invested in additional Shares but may
be held for distribution to the Participant in periodic payments. In such
instances, the Trustee may make any election necessary to receive any such
dividends in cash.
3.2 DIRECTED INVESTMENTS. When so instructed by the Plan Administrator,
the Trustee shall invest all or any portion of the individual Account of any
Participant in accordance with the direction of the Employer or such
Participant in lieu of participation in the general assets of the Trust. Such
directed investments shall be accounted for separately for each Participant.
Except as otherwise provided herein, the Trustee shall not have any discretion,
and is specifically prohibited from exercising any control or discretion, with
respect to such directed investments. Each Participant who directs the
investment of his Account shall be solely and absolutely responsible for the
investment or reinvestment of all directed investment assets held on is behalf
in Trust, and, except as otherwise provided herein, the Trustee shall not
question any such direction, review any securities or other such assets, or make
suggestions with respect to the investment, retention or disposition of any such
assets; provided that:
(a) If any contributions are transmitted to otherwise received or
held as directed investment assets without investment directions from the
Participant, the Trustee shall retain such amounts in a noninterest-bearing
savings account in a federally insured institution for the benefit of the
Participant.
(b) The Trustee may establish such reasonable rules and regulations,
applied on a uniform basis to all Participants, with respect to the
requirements for, and the form and manner of, effectuating any transaction with
respect to directed investment assets including, without limitation, minimum
amounts, rules applicable to conversion of directed investments into general
assets of the Trust, and appropriate adjustments (based on fair market values)
to Accounts to reflect any such conversion, as the Trustee shall determine to
be consistent with the purposes of the Plan. Any such rules and regulations
shall be binding upon all persons interested in the Trust.
(c) The Trustee may establish a procedure for the periodic review of
directed investment assets to determine, in light of the facts and
circumstances reasonably known to it, whether any actual or proposed investment
of such assets constitutes or would constitute a prohibited transaction as that
term is defined in sections 406-408 of ERISA and the corresponding provisions
of the Code. If the Trustee determines that any investment constitutes or would
constitute a prohibited transaction, the Trustee shall promptly communicate
this determination to the Plan Administrator, and shall recommend that the
investment be prevented or disposed of, as the case may be, and may recommend
any other action authorized or required by law, to prevent or remedy the
transaction.
(d) In accordance with and pursuant to uniform and nondiscriminatory
rules established under and in accordance with the Plan, the Trustee may deny
the Plan Administrator's application to allow a directed investment proposed by
a Participant.
(e) Notwithstanding anything herein to the contrary, in no event
shall the Trustee engage in any transaction that would be prohibited under
ERISA.
3.3 GENERAL INVESTMENT POWERS. Subject to any investment limitations or
minimum requirements for investments in Shares imposed by the Sponsor, and
subject to investment instructions given by the Plan Administrator, the Trustee
shall be authorized and empowered to invest and reinvest all or any part of the
Trust in any property, real or personal or mixed, including, but not being
limited to, capital or common stock (whether voting or nonvoting or whether or
not currently paying a dividend), preferred or preference stock (whether voting
or nonvoting or whether or not paying a dividend), Shares of regulated
investment companies, convertible securities, corporate and governmental
obligations, leaseholds, ground rents, mortgages, and other interests in
realty, trust, and participation certificates, oil, mineral or gas properties,
royalty interests or rights, including equipment pertaining thereto, notes and
other evidences of indebtedness or ownership, secured or unsecured, contracts,
choses in action, and warrants, and other instruments entitling the owner
thereof to subscribe to or purchase any of the aforesaid. Subject to any
investment limitations or requirements imposed by the Sponsor relating to the
type of permissible investments in the Trust or the minimum percentage of Trust
assets to be invested in Shares, and subject to the provisions of ARTICLE VIII
hereof, in making and retaining such investments and reinvestments pursuant
hereto, the Trustee shall not be bound as to the character of any investments
by any statute, rule of court, or custom governing the investment of Trust
funds.
3.4 INVESTMENT IN COMBINED FUNDS. If the Trustee is a banking
institution, subject to any investment limitations or minimum requirements for
investment in Shares imposed by the Sponsor, and subject to investment
instructions given by the Plan Administrator, it may, subject to the election
of the Sponsor or the Employer, cause funds
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of this Trust to be invested in its commingled funds for qualified employee
benefit plan trusts and such commingled funds are hereby adopted and made a
part of the Plan of which this Trust is a part, and any funds of this Trust
invested in any such commingled funds shall be subject to all the provisions
thereof, as the same may be amended from time to time.
3.5 OTHER POWERS OF THE TRUSTEE. The Trustee is authorized and empowered
with respect to the Trust:
(a) Subject to any investment limitations or minimum requirements
for investment in Shares imposed by the Sponsor, and subject to investment
instructions given by the Plan Administrator, to sell, exchange, convey,
transfer, or otherwise dispose of, either at public or private sale, any
property, real or personal or mixed, at any time held by it, for such
consideration and on such terms and conditions as to credit or otherwise as
the Trustee may deem best.
(b) Subject to the provisions of section 3.1, to vote in person or
by proxy any stocks, bonds, or other securities held by it; to exercise any
options appurtenant to any stocks, bonds, or other securities, or to exercise
any rights to subscribe for additional stocks, bonds, or other securities, and
to make any and all necessary payments therefor, to join in, or to dissent
from, and to oppose, the reorganizations, consolidation, liquidation, sale, or
merger of corporations, or properties in which if may be interested as Trustee,
upon such terms and conditions as it may deem wise.
(c) To make, execute, acknowledge, and deliver any and all documents
of transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted.
(d) To register any investment held in the Trust in the name of the
Trust or in the name of a nominee, and to hold any investment in bearer form,
but the books and records of the Trustee shall at all times show that all such
investments are part of the Trust.
(e) To employ suitable agents and counsel (who may also be agents
and/or counsel for the Employer or the Sponsor) and to pay their reasonable
expenses and compensation.
(f) To borrow or raise monies for the purpose of the Trust from any
source and, for any sum so borrowed to issue its promissory note as Trustee and
to secure the repayment thereof by pledging all or any part of the Trust fund,
but nothing herein contained shall obligate the Trustee to render itself liable
individually for the amount of any such borrowing; and no person loaning money
to the Trustee shall be bound to see the application of money loaned or to
inquire into the validity or propriety of any such borrowing.
Each and all of the foregoing powers may be exercised without a court
order or approval. No one dealing with the Trustee need inquire concerning the
validity or propriety of anything that is done or need see to the application
of any money paid or property transferred to or upon the order of the Trustee.
3.6 GENERAL POWERS. The Trustee shall have all of the powers necessary or
desirable to do all acts, take all such proceedings, and exercise all such
rights and privileges, whether or not expressly authorized herein, which it may
deem necessary or proper for the administration and protection of the property
of the Trust and to accomplish any action provided for in the Plan.
3.7 VALUATION OF TRUST. The Trustee, as of the Valuation Date, and at
such other time or times as it determines, shall determine the net worth of the
assets of the Trust. In determining such net worth, the assets of the Trust
shall be evaluated at their fair market value and all expenses shall be
deducted. The Trustee may adopt such methods of valuation as it deems advisable.
3.8 BONDING. Except to the extent otherwise required by law, the Trustee
shall not be required to obtain any bonds in connection with its duties
hereunder. The cost of any bond obtained may be charged as an expense of the
Trust, but if not so charged, shall be paid by the Employer.
3.9 DUTIES NOT ASSIGNED. The duties of the Trustee with respect to the
Plan are limited to those assumed by the Trustee by the terms of this Trust. The
Trustee shall not be deemed, by virtue hereof, to be the administrator or
sponsor of the Plan, and shall not be responsible for filing reports, returns
or disclosures with any government agency except as may otherwise be required
by its duties as Trustee under applicable law.
ARTICLE IV
DISTRIBUTIONS FROM A PARTICIPANT'S ACCOUNT
Distributions from the Trust shall be made by the Trustee in accordance
with proper written directions of the Plan Administrator in accordance with the
provisions of section 15.2 of the Plan, and the Plan Administrator shall have
the sole responsibility for determining that the directions given conform to
provisions of the Plan and applicable law, including (without limitation)
responsibility for calculating the vested interests of the Participant, for
calculating the amounts payable to a Participant pursuant to ARTICLE 11 of the
Plan, and for determining the proper person to whom benefits are payable under
the Plan. Except to the extent otherwise provided in the Plan, the interest of
Participants and Beneficiaries in the Trust and in the net earnings and profits
thereof may not be assigned or used by a Participant or Beneficiary as
collateral for a loan and shall not be subject to garnishment, attachment, levy
or execution of any kind for the debts or defaults of the Trustee or of any
person, natural or legal, having interest in the Trust.
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ARTICLE V
REPORTS OF THE TRUSTEE AND THE PLAN ADMINISTRATOR
The Trustee shall keep accurate and detailed records of all receipts,
investments, disbursements, and other transactions required to be performed
hereunder with respect to the Trust. The Trustee shall file with the Plan
Administrator a written report or reports reflecting the receipts,
disbursements, and other transactions effected by it with respect to the Trust
during such Plan Year and the assets and liabilities of the Trust at the close
of the Plan Year. Such report or reports shall be open to inspection by any
Participant for a period of one hundred eighty (180) days immediately following
the date on which it is filed with the Plan Administrator. Except as otherwise
prescribed by ERISA, upon the expiration of such one hundred eighty (180) day
period, the Trustee shall be forever released and discharged from all liability
and accountability to anyone with respect to its acts, transactions, duties,
obligations, or responsibilities as shown in or reflected by such report,
except with respect to any such acts or transactions as to which the Plan
Administrator shall have filed written objections with the Trustee within such
one hundred eighty (180) day period, and except for willful misconduct or lack
of good faith on the part of the Trustee.
ARTICLE VI
TRUSTEE'S FEES AND EXPENSES OF THE TRUST
The Trustee's fees for performing its duties hereunder shall be such
reasonable amounts as shall be established by it from time to time. The Trustee
shall furnish the Employer with its current schedule of fees and shall give
written notice to the Employer whenever its fees are changed or revised. Such
fees, any taxes of any kind whatsoever which may be levied or assessed upon or
in respect of the Trust, to the extent incurred by the Trustee and any and all
reasonable expenses incurred by the Trustee in the performance of its duties,
including fees for legal services rendered to the Trustee, shall, unless paid by
the Employer, be paid from the Trust in the manner provided in the Plan.
Unless paid by the Employer, all fees of the Trustee and taxes and other
expenses charged to a Participant's Account may be collected by the Trustee
from the amount of any contribution to be credited or distribution to be
charged to such Account or may be paid by redeeming or selling assets credited
to such Account.
ARTICLE VII
DUTIES OF THE EMPLOYER AND THE PLAN ADMINISTRATOR
7.1 INFORMATION AND DATA TO BE FURNISHED THE TRUSTEE. In addition to
making the contributions called for in ARTICLE II hereof, the Employer, through
the Plan Administrator, agrees to furnish the Trustee with such information and
data relative to the Plan as is necessary for the proper administration of the
Trust established hereunder.
7.2 LIMITATION OF DUTIES. Neither the Employer nor any of its officers,
directors, or partners, nor the Plan Administrator shall have any duties or
obligations with respect to this Trust Agreement, except those expressly set
forth herein and in the Plan.
ARTICLE VIII
LIABILITY OF THE TRUST
8.1 TRUSTEE'S LIABILITY
(a) The Employer shall indemnify and save the Trustee (including its
affiliates, representatives and agents) harmless from and against any
liability, cost or other expense, including, but not limited to, the payment of
attorneys' fees that the Trustee may incur in connection with this Trust
Agreement or the Plan unless such liability, cost or other expense (whether
direct or indirect) arises from the Trustee's own willful misconduct or gross
negligence. The Employer recognizes that a burden of litigation may be imposed
upon the Trustee as a result of some act or transaction for which it has no
responsibility or over which it has no control under this Trust Agreement.
Therefore, the Employer agrees to indemnify and hold harmless and, if
requested, defend the Trustee (including its affiliates, representatives and
agents) from any expenses (including counsel fees, liabilities, claims,
damages, actions, suits or other charges) incurred by the Trustee in
prosecuting or defending against any such litigation.
(b) The Trustee shall not be liable for, and the Employer will
indemnify and hold harmless the Trustee (including its affiliates,
representatives and agents) from and against all liability or expense
(including counsel fees) because of (i) any investment action taken or omitted
by the Trustee in accordance with any direction of the Employer or a
Participant, or investment inaction in the absence of directions from the
Employer or a Participant or (ii) any investment action taken by the Trustee
pursuant to an order to purchase or sell securities placed by the Employer or a
Participant directly with a broker, dealer or issuer. It is understood that
although, when the Trustee is subject to the direction of the Employer or a
Participant the Trustee will perform certain ministerial duties with respect to
the portion of the Fund subject to such direction (the "Directed Fund"), such
duties do not involve the exercise of any discretionary authority or other
authority to manage and control assets of the Directed Fund and will be
performed in the normal course of business by officers and employees of the
Trustee or its affiliates, representatives or agents who may be unfamiliar with
investment management. It is agreed that the Trustee is not undertaking any
duty or obligation, express or implied, to review, and will not be deemed to
have any knowledge of or responsibility with respect to, any transaction
involving the investment of the Directed Fund as a result of the performance of
its ministerial duties. Therefore, in the event that "knowledge" of the Trustee
shall be a prerequisite to imposing a duty upon or determining liability of the
Trustee under the Plan or this Trust or any law or regulation regulating the
conduct of the Trustee with
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respect to the Directed Fund, as a result of any act or omission of the
Employer or any Participant, or as a result of any transaction engaged in by
any of them, then the receipt and processing of investment orders and other
documents relating to Plan assets by an officer or other employee of the
Trustee or its affiliates, representatives or agents engaged in the performance
of purely ministerial functions shall not constitutes "knowledge" of the
Trustee.
(c) Notwithstanding the foregoing provisions of this Trust
Agreement, the Trustee shall discharge its duties hereunder with the care,
skill, prudence and diligence under the circumstances then prevailing that a
prudent man acting in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character and with like aims. Any
investment selected by the Trustee without specific direction from the Employer
shall be selected to diversify the investments of the Trust fund so as to
minimize the risk of large losses, unless in the circumstances it is clearly
prudent not to do so. The Trustee shall perform its duties in accordance with
this Trust Agreement insofar as this Trust Agreement is consistent with the
provisions of ERISA. To the extent not prohibited by ERISA, the Trustee shall
not be responsible in any way for any action or omission of the Employer or the
Plan Administrator with respect to the performance of their duties and
obligations set forth in the Plan. To the extent not prohibited by ERISA, the
Trustee shall not be responsible for any action or omission of any of its
agents, or with respect to reliance upon advice of its counsel (whether or not
such counsel is also counsel to the Employer or to the Plan Administrator),
provided that such agents or counsel were prudently chosen by the Trustee and
that the Trustee relied in good faith upon the action of such agent or the
advice of such counsel. The Trustee shall be indemnified and held harmless by
the Employer against liability or losses occurring by reason of any act or
omission of the Trustee under this Trust Agreement, unless such act or omission
is due to its own willful nonfeasance, malfeasance, or misfeasance or other
breach of duty under ERISA, to the extent that such indemnification does not
violate ERISA or any other federal or state laws.
ARTICLE IX
DELEGATION OF POWERS
9.1 DELEGATION BY THE TRUSTEE. With respect to Shares held by the Plan,
the Trustee hereby delegates to the custodian or other agent designated by the
Sponsor the functions designated in (a) through (d) hereunder, other than the
investment, management or control of the Trust assets. With respect to assets
other than Shares, the Trustee may delegate in writing pursuant to a procedure
permitted and established by the Sponsor, to a person (individual, corporate,
or other entity) designated by the Sponsor as an agent or custodian, any of the
powers or functions of the Trustee hereunder other than the investment,
management or control of the Trust assets, including (without limitation):
(a) custodianship of all or any part of the assets of the Trust;
(b) maintaining and accounting for the Trust and for Participants
and other Accounts as a part thereof;
(c) distribution of benefits as directed by the Plan Administrator;
and
(d) Preparation of the annual report on the status of the Trust.
The agent or custodian so appointed may act as agent for the Trustee,
without investment responsibility, for fees to be mutually agreed upon by the
Employer and the agent or custodian and paid in the same manner as Trustee's
fees. The Trustee shall not be responsible for any act or omission of the
agent or custodian arising from any such delegation, except to the extent
provided in ARTICLE VIII.
9.2 DELEGATION WITH EMPLOYER APPROVAL. The Trustee (whether or not a bank
or trust company) and the Employer may, by mutual agreement, arrange for the
delegation by the Trustee to the Plan Administrator or any agent of the
Employer of any powers of functions of the Trustee hereunder other than the
investment and custody of the Trust assets. The Trustee shall not be
responsible for any act or omission of such person or persons arising from any
such delegation, except to the extent provided in ARTICLE VIII.
ARTICLE X
AMENDMENT
As provided in section 16.1 of the Plan, and subject to the limitations
set forth herein, the prototype Adoption Agreement, Plan and Trust Agreement
may be amended at any time, in whole or in part, by the Sponsor. The Trustee
hereby delegates authority to the Sponsor, and to any successor Sponsor, to so
amend the prototype Adoption Agreement, Plan and Trust Agreement and the
Trustee hereby agrees that it shall be deemed to have consented to any
amendment so made which does not increase the duties of the Trustee without its
consent.
ARTICLE XI
RESIGNATION OR REMOVAL OF TRUSTEE
The Trustee may resign at any time upon thirty (30) days notice in writing
to the Employer, and may be removed by the Sponsor or Employer at any time upon
thirty (30) days notice in writing to the Trustee. Upon such resignation or
removal, the Sponsor or Employer shall appoint a successor Trustee or
Trustees. Upon receipt by the Trustee of written acceptance of such
appointment by the successor Trustee, the Trustee shall transfer and pay over
to such successor the assets of the Trust and all records pertaining thereto,
provided that any successor Trustee shall agree not to dispose of any such
records without the Trustee's consent. The successor Trustee shall be entitled
to rely upon all accounts, records, and other documents received by it from the
Trustee, and shall not incur any liability whatsoever for such reliance. The
Trustee is authorized, however, to reserve such sum of money or property as it
may deem advisable
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<PAGE>
for payment of all its fees, compensation, costs, and expenses, or for payment
of any other liabilities constituting a charge on or against the reasonable
assets of the Trust or on or against the Trustee, with any balance of such
reserve remaining after the payment of all such items to be paid over to the
successor Trustee. Upon the assignment, transfer, and payment over of the
assets of the Trust, and obtaining a receipt thereof from the successor
Trustee, the Trustee shall be released and discharged from any and all claims,
demands, duties, and obligations arising out of the Trust and its management
thereof, excepting only claims based upon the Trustee's willful misconduct or
lack of good faith. The successor Trustee shall hold the assets paid over to
it under terms similar to those of this Trust Agreement under a trust that will
qualify under section 401 of the Code. If within thirty (30) days after the
Trustee's resignation or removal, the Employer or Sponsor has not appointed a
successor Trustee which has accepted such appointment, the Trustee may apply to
a court of competent jurisdiction for appointment or a successor or appoint
such successor itself.
ARTICLE XII
TERMINATION OF THE TRUST
12.1 TERM OF THE TRUST. This Trust shall continue as to the Employer so
long as the Plan is in full force and effect. If the Plan ceases to be in full
force and effect, this Trust shall thereupon terminate unless expressly
extended by the Employer.
ARTICLE XIII
MISCELLANEOUS
13.1 NO DIVERSION OF ASSETS. At no time shall it be possible for any part
of the assets of the Trust to be used for or diverted to purposes other than
for the exclusive benefit of Participants and their Beneficiaries or revert to
the Employer, except as specifically provided in the Plan or this Trust
Agreement.
13.2 NOTICES. Any notice from the Trustee to the Employer or from the
Employer to the Trustee provided for in the Plan and Trust shall be effective
if sent by first class mail to their respective last address of record.
13.3 MULTIPLE TRUSTEES. In the event that there shall be two (2) or more
of the Trustees serving hereunder, any action taken or decision made by any
such Trustee may be taken or made by a majority of them with the same effect as
if all had joined therein, if there be more than two (2), or unanimously if
there be two (2).
13.4 CONFLICT WITH PLAN. In the event of any conflict between the
provisions of the Plan and those of this Trust Agreement, the Plan shall
prevail.
13.5 APPLICABLE LAW. Except to the extent otherwise required by ERISA,
as amended, this Trust Agreement shall be construed in accordance with the laws
of the state where the Trustee has its principal place of business.
13.6 RETURNED CONTRIBUTIONS.
(a) A contribution made by the Employer by a mistake of fact shall,
if the Administrator so directs, be returned to the Employer within one (1)
year after its repayment. The Administrator shall, in its sole discretion,
determine whether the contribution was made by mistake of fact based upon such
evidence as it deems appropriate.
(b) A contribution made by the Employer that is conditioned on
deductibility under section 404 of the Code shall, to the extent such deduction
is disallowed, be returned to the Employer within one (1) year after the
disallowance, if the Administrator so directs.
13.7 GENERAL UNDERTAKING. All parties to this Trust and all persons
claiming any interest whatsoever hereunder agree to perform any and all acts
and execute any and all documents and papers which may be necessary or
desirable for the carrying out of the Trust or any of its provisions.
13.8 INVALIDITY OF CERTAIN PROVISIONS. If any provision of this Trust
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions hereof and the Trust shall be construed
and enforced as if such provisions had not been included.
13.9 COUNTERPART ORIGINALS. This Trust may be executed in one or more
counterpart originals.
IN WITNESS WHEREOF, the Employer and the Trustee(s) have signed this Trust
effective as of the date specified in the Adoption Agreement.
----------------------------
Attest: [NAME OF EMPLOYER]
------------------ BY: ---------------------
Secretary President
TRUSTEE(S)
----------------------------
----------------------------
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<PAGE>
-------------------------------------
)
) SS
)
I,_______________________________________, a notary public in and for the
jurisdiction above named, do hereby certify that _____________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
did personally appear before me and do acknowledge that they executed the
foregoing Trust as their free act and deed.
Subscribed and sworn to before me this_____ day of ______________, 19____.
-------------------------------------
Notary Public
My Commission
Expires:
--------------------
80
<PAGE>
EMPLOYEE NOTICES
81
<PAGE>
SPD, Pension and Welfare Benefits Administration
Room N-5644
U.S. Department of Labor
200 Constitution Avenue N.W.
Washington, DC 20210
Re:
Dear Sir or Madam:
Enclosed is a copy of the _____________ Summary Plan Description. This copy is
(Plan Name)
respectfully being submitted to Department of Labor in order to satisfy the
disclosure requirements of ERISA for Qualified Plans.
Should you have any questions, please feel free to contact me at your earliest
convenience.
Sincerely,
Plan Sponsor
82
<PAGE>
MODEL
SUMMARY PLAN DESCRIPTION
OF THE
-------------------------------
[INSERT NAME OF EMPLOYER)
PROFIT SHARING PLAN
Copyright 1990 Investment Company Institute March 1990
83
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
I. INTRODUCTION ........................................................... 3
II. DESCRIPTION OF PLAN BENEFITS AND REQUIREMENTS .......................... 3
A. Terms With Special Meanings ...................................... 3
B. Participation .................................................... 4
C. Individual Accounts .............................................. 4
D. Contributions .................................................... 4
E. Allocations ...................................................... 5
F. Vesting .......................................................... 7
G. Forfeitures ...................................................... 8
H. Distributions of Benefits ........................................ 8
I. Investment of Plan Assets ........................................ 9
J. Withdrawals ...................................................... 10
K. Loans ............................................................ 10
L. Insurance ........................................................ 10
III. CLAIMS PROCEDURE ....................................................... 11
IV. CHANGES TO THE PLAN .................................................... 11
V. GENERAL INFORMATION .................................................... 11
VI. NON-APPLICATION OF PBGC GUARANTEES ..................................... 12
VII. SPECIAL RIGHTS UNDER ERISA ............................................. 12
</TABLE>
84
<PAGE>
MODEL
SUMMARY PLAN DESCRIPTION
OF THE
-------------------------------
(INSERT NAME OF EMPLOYER)
PROFIT SHARING PLAN
I. INTRODUCTION
_____________________________[INSERT NAME OF EMPLOYER] (the "Employer") is
pleased to be able to provide you with the ____________________ [INSERT NAME OF
EMPLOYER] Profit Sharing Plan (the "Plan" or the "Profit Sharing Plan"). The
Plan is effective as of ________________________________[INSERT EFFECTIVE DATE].
The Plan is a defined contribution plan, to which the Employer makes
contributions to an account held in your name. With this type of plan, the
retirement benefit you receive will depend on the investment performance of the
amounts that are in your account. The Plan is designed to provide retirement
income to employees who remain with the Employer until retirement and to those
who have a vested interest in their account when they terminate their employment
with the Employer.
Only the main features of the Plan am explained in this Summary Plan
Description. Any questions which are not answered here should be referred to
_________________________________________________(INSERT NAME OF DEPARTMENT OR
PERSONNEL RESPONSIBLE FOR PARTICIPANT INFORMATION), if there is any
inconsistency between the Plan as described in this Summary Plan Description
and the Plan document itself, the terms of the Plan document will govern.
Copies of the Plan document and the Trust Agreement are available for your
inspection during regular working hours.
II. DESCRIPTION OF PLAN BENEFITS AND REQUIREMENTS
A. TERMS-WITH SPECIAL MEANINGS
Certain words and terms used in this Summary have special meanings.
Many of these terms am defined in this section, while others are
explained in the text of the Summary. To assist you in identifying
these terms within the text; they are capitalized.
1. BENEFICIARY. Your designated Beneficiary is the person you name
to receive your benefit distribution in the event of your death.
If you are married, you will need written consent from your
spouse to name someone other than your spouse as your
Beneficiary.
2. BREAK IN SERVICE. A Break in Service occurs if you complete
less than 501 Hours of Service with the Employer during a Plan
Year.
3. COMPENSATION. Compensation is the total compensation paid to you
by the Employer during any portion of a Plan Year during which
you were a Plan Participant. If you an self employed, your
Compensation is your earned income less your deductible
contributions to any qualified retirement plans.
4. HOURS OF SERVICE. Each hour for which you are paid or entitled to
be paid by the Employer. In addition, uncompensated authorized
leaves of absence that do not exceed two years, military leave
while your reemployment rights are protected by law, and absences
from work for maternity or paternity reasons may be credited as
Hours of Service for the purpose of determining whether you had a
Break in Service.
5. PARTICIPANT. A Participant is an employee who has met the
requirements for participating in this Plan, and whose account
has been neither completely forfeited nor distributed.
6. PLAN YEAR. The Plan Year is the 12-month period ending on the
date shown in section V of this Summary.
7. SPONSOR. The Sponsor is the organization which has made this Plan
available to the Employer.
8. TRUST. The Trust is a fund maintained by the Trustee for the
investment of Plan assets, including the amount in your account.
9. YEAR OF SERVICE. A Year of Service is the applicable 12-month
period during which you complete 1,000 [INSERT NUMBER OF HOURS)
or more Hours of Service. For eligibility purposes, the
applicable 12-month period Is your first year of employment or
any Plan Year,
85
<PAGE>
beginning after your hire date. For vesting purposes, the
applicable 12-month period is the Plan Year.
B. PARTICIPATION
You will be eligible to participate in the Plan after you have met the
following eligibility requirements:
[CHECK ALL APPLICABLE ITEMS]
X You have reached age 21
- -
X You have completed 1 Year (s) of Service.
- -
X You are not a member of a collective bargaining unit.
- -
X You are not a nonresident alien.
- -
The first entry date, or date in which you can first participate in
the Plan if you meet these requirements, is _________________________ [INSERT
EFFECTIVE DATE). Thereafter, the entry date(s) will be January 1 & July 1 of
each year.
Once you become a Participant, you will remain a Participant as long
as you do not incur a Break in Service. If you do incur a Break in Service, and
are later reemployed by the Employer, you will be reinstated as a Participant
and any previous Hours of Service will be reinstated as of the date of your
reemployment.
C. INDIVIDUAL-ACCOUNTS
A separate account will be maintained for you within the Plan. This
account will be further divided into subaccounts, which will be
credited with the different types of contributions that are described
in the next section, the subaccounts that will be maintained for you
are as follows:
1. PROFIT SHARING CONTRIBUTION SUBACCOUNT. This subaccount will be
credited with your share of Employer Profit Sharing
Contributions, forfeitures (if any), distributions from this
subaccount, and the earnings and losses attributable to this
subaccount.
2. TRUSTEE TRANSFER AND ROLLOVER SUBACCOUNTS. These subaccounts will
be credited with any rollover contributions or transfer
contributions you may make to the Plan, any distributions from
this subaccount, and the earnings and losses attributable to this
subaccount. Include the following item if your plan permits
voluntary employee contributions:
3. NONDEDUCTIBLE VOLUNTARY CONTRIBUTION SUBACCOUNT. This subaccount
will be credited with your Voluntary Employee Contributions, any
distributions from this subaccount, and the earnings and losses
attributable to this subaccount.
D. CONTRIBUTIONS
X 1. EMPLOYER PROFIT SHARING CONTRIBUTIONS. The Employer will make
- Profit Sharing Contributions to the Plan each Plan Year in
accordance with the following contribution formula:
[CHECK ONE OF THE FOLLOWING]:
X Contributions will be made in an amount to be determined
each year by the Employer.
_ Contributions will be made in an amount equal to ___________
INSERT CONTRIBUTION PERCENTAGE] of each Participant's
Compensation, plus any discretionary amount the Employer may
choose to contribute.
2. ROLLOVER CONTRIBUTIONS AND DIRECT TRANSFERS. If you have
participated in other pension or profit sharing plans, you will
be permitted to make a rollover contribution to the Plan of
certain amounts you may receive from those other plans. You will
also be permitted, with the approval of
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<PAGE>
the Plan Administrator, to authorize a direct transfer to the
Plan of amounts that are attributable to your participation
in other pension or profit sharing plans.
CHECK THE FOLLOWING ITEM IF YOUR PLAN PERMITS VOLUNTARY
EMPLOYEE CONTRIBUTIONS:
3. VOLUNTARY EMPLOYEE CONTRIBUTIONS. To increase your
retirement benefits from this Plan, you may choose to make
voluntary contributions to the Plan of up to NA [INSERT
MAXIMUM VOLUNTARY EMPLOYEE CONTRIBUTION PERCENTAGE] of your
compensation. Such contributions will not be permitted,
however, for Plan Years beginning after __________ [THE PLAN
YEAR IN WHICH THE PLAN IS ADOPTED]. The minimum contribution
you must make if you choose to make a voluntary,contribution
is as follows:
[CHECK ONE OF THE FOLLOWING ITEMS]:
___ The minimum voluntary contribution is __________[INSERT
MINIMUM VOLUNTARY CONTRIBUTION PERCENTAGE] of your
Compensation.
X There is no minimum voluntary contribution.
E. ALLOCATIONS.
ELIGIBILITY FOR ALLOCATIONS. Each Plan Year the Employer may make a
Profit Sharing Contribution to the Plan in accordance with the formula
described in the previous section . If the Employer chooses to make a Profit
Sharing Contribution for a year, your account will be allocated a share of
that contribution. If you are an employee as of the last day of the Plan Year.
X Unless you terminate your employment during the Plan year with not more
- than 500 Hours of Service. (You will receive an allocation, however, if
you die, retire or become disabled during the Plan Year).
Under some circumstances, special minimum allocation rules may result in your
receiving an allocation even if you do not meet any of the requirements set
forth above.
AMOUNT OF ALLOCATION. If you are eligible, your account will be
credited with a portion of the Profit Sharing Contribution (and any
forfeitures) as follows:
[CHECK ONE OF THE FOLLOWING ITEMS]:
X * Your account will be credited with a portion of the Profit Sharing
- - Contribution that is equal to the ratio of your Compensation to the
Compensation of all Participants for such year.
For example, if your Compensation for a Plan Year was $10,000 and the
total Compensation of all Participants was $100,000, your account would
be credited with $10,000/$100,000 = 1/10 of the total contribution made
by the Employer for that Plan Year.
[CHOOSE IF YOUR PLAN IS INTEGRATED WITH SOCIAL SECURITY AND YOU HAVE
NOT ADOPTED THE MONEY PURCHASE PENSION PLAN)
__ * Profit Sharing Contributions WILL be allocated to eligible Participants
in four steps as follows:
Step One: Your account will be credited with a portion of the Profit
Sharing Contribution that is equal to the ratio of your Compensation to
the Compensation of all Participants for such year, but only up to a
maximum of three percent of each Participant's Compensation.
Step Two: Your account will be credited with a portion of the balance
of the Profit Sharing Contribution (after the allocation in Step One)
that is equal to the ratio of your Compensation in excess of the Plan's
Integration Level to the Compensation in excess of the Plan's
Integration Level of all Participants for such year, but only up to a
maximum of three percent of any Participant's Compensation in excess of
the Plan's Integration Level.
For example, if the Plan's Integration Level were $51,300 and your
Compensation were $61,300, your Compensation in excess of the
Integration Level would be $10,000. If the total Compensation in excess
of the Integration Level of all Participants were $70,000, your account
would be credited with $10,000/$70,000 = 1/7 of the total allocation
made under Step Two (but only up to a maximum of three percent of your
Compensation in excess of the Plan's Integration Level, or $300).
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<PAGE>
Step Three: Your account will be credited with a portion of the balance
of the Profit Sharing Contribution (after the allocations in Step One
and Step Two) that is equal to the ratio that the sum of your
Compensation plus your Compensation in excess of the Plan's Integration
Level bears to the sum of all Participants' Compensation plus their
Compensation in excess of the Plan's Integration Level for such year,
up to a maximum of the Maximum Profit Sharing Disparity Rate.
The Maximum Profit Sharing Disparity Rate is 2.7 percent if the
Integration Level equals the annual earnings subject to Social Security
(FICA) tax (the taxable wage base). If the Integration Level is lower
(see below), then the Maximum Profit Sharing Disparity Rate is
determined by the following formula:
If the Integration is:
<TABLE>
<CAPTION>
The Applicable
More Than But Not More Than Percentage Is:
--------- ----------------- --------------
<S> <C> <C>
$0 X */ 2.7%
-
X of TWB 80% of TWB 1.3%
80% of TWB Y **/ 2.4%
--
</TABLE>
*/ X = the greater of $10,000 or 20% of the Taxable Wage Base.
- -
**/ Y = any amount more than 80% of the Taxable Wage Base but less
- -- than 100% of the Taxable Wage Base.
"TWB" means the Taxable Wage Base.
For example, if the Maximum Profit Sharing Disparity Rate is 2.7 percent, your
Compensation is $61,300, the Plan's Integration Level is $51,300, the total
Compensation of all Participants is $700,000 and the Compensation of all
Participants that is in excess of the Plan's Integration Level is $70,000, then
the ratio applied under Step Three would be:
(61,300 + 10,000)/(700,000 + 70,000) - 9.25%
However, this exceeds the Maximum Profit Sharing Disparity Rate, so 2.7 percent
is applicable instead, and your account would receive 2.7% of the Employer
contribution under this step.
STEP FOUR: Your account will be credited with a portion of the balance of the
Profit Sharing Contribution (after the allocations in Step One, Step Two and
Step Three) that is equal to the ratio of your Compensation to the Compensation
of all Participants for such year.
[CHOOSE IF YOUR PLAN IS INTEGRATED WITH SOCIAL SECURITY AND YOU HAVE ADOPTED THE
MONEY PURCHASE PENSION PLAN]:
__ Profit Sharing Contributions will be allocated to eligible Participants in
two steps as follows:
STEP ONE: Your account will be credited with a portion of the Profit Sharing
Contribution that is equal to the ratio that the sum of your Compensation plus
your Compensation in excess of the Plan's Integration Level bears to the sum of
all Participants' Compensation plus their Compensation in excess of the Plan's
Integration level for such year, up to a maximum that does not exceed the lesser
of two amounts. The first is the percentage determined by dividing the
allocation by your Compensation up to the Plan's Integration Level. The second
is the Maximum Disparity Rate.
The Maximum Disparity Rate is 5.7 percent if the Integration Level equals the
annual earnings subject to Social Security (FICA) tax (the taxable wage base).
If the Integration Level is lower (see below), then the Maximum Disparity Rate
is determined by the following formula:
If the Integration is:
<TABLE>
<CAPTION>
The Applicable
More Than But Not More Than Percentage Is:
--------- ----------------- --------------
<S> <C> <C>
$0 X*/ 5.7%
-
</TABLE>
88
<PAGE>
X Of TWB 80% of TWB 4.3%
80% of TWB Y **/ 5.4%
*/ X - the greater of $ 10,000 or 20% of the Taxable
- Wage Base.
**/ Y - any amount more than 80% of the Taxable Wage
-- Base but less than 100% of the Taxable Wage
Base.
"TWB" means the Taxable Wage Base.
For example, if the Maximum Disparity Rate is 5.7 percent, your
Compensation is $61,300, the Plan's Integration Level is $51,300, the
total Compensation of all Participants is $700,000 and the
Compensation of all Participants that is in excess of the Plan's
Integration Level is $70,000, then the ratio applied under Step One
would be.
(61,300 + 10,000)/(700,000 + 70,000) = 9.25%
However, this exceeds the Maximum Disparity Rate, so 5.7 percent is
applicable instead. (This assumes the allocation as a percentage of
your Compensation up to the Plan's Integration Level would exceed 5.7
percent).
Step Two: Your account will be credited with a portion of the balance
of the Profit Sharing Contribution (after the allocation in Step One)
that is equal to the ratio of your Compensation to the Compensation
of all Participants for such year.
The Plan's Integration Level is equal to:
[CHECK ONE OF THE FOLLOWING ITEMS)
__ The taxable wage base, which is the annual earnings subject to Social
Security (FICA) tax.
__ A dollar amount equal to $__________________________[INSERT DOLLAR AMOUNT].
__ A percentage of the taxable wage base equal to ___% of the annual earnings
subject to Social Security (FICA) tax.
Under some circumstances, special minimum allocation rules may result in your
receiving a larger allocation than you normally would. The amount that can be
allocated to your Account in any Plan Year, including forfeitures (if any), is
limited by rules applying to all qualified plans.
F. VESTING.
Vesting refers to the nonforfeitable interest you have in each of your
subaccounts. In other words, your vested interest in your account is the
amount you will receive when your account is distributed to you.
You will always have a 100 percent vested and nonforfeitable interest
in the amounts you have in your:
__ * Trustee Transfer and Rollover Subaccounts.
(CHECK THE FOLLOWING ITEM ONLY IF YOUR PLAN PERMITS VOLUNTARY EMPLOYEE
CONTRIBUTIONS]:
__ * Nondeductible Voluntary Contribution Subaccount.
You will earn a vested interest in your Profit Sharing Contribution
Subaccount in accordance with the following:
[CHECK ONE OF THE FOLLOWING ITEMS]:
__ * You will always have a 100 percent vested and nonforfeitable interest
in your Profit Sharing Contribution Subaccount.
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__ * You will have a 100 percent vested and nonforfeitable interest
in your Profit Sharing Contribution Subaccount in the event of any of
the following:
* You reach your Normal Retirement Age or Early Retirement Date.
* You die or become disabled.
Otherwise, you will earn a vested interest in your Profit Sharing Contribution
Subaccount in accordance with the following schedule:
[CHECK ONE OF THE FOLLOWING ITEMS]:
<TABLE>
<CAPTION>
__ * YEARS 0F SERVICE VESTED PERCENTAGE
---------------- -----------------
<S> <C>
1 year 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 or more years 100%
</TABLE>
For example, if you are employed for six years, you will be entitled
to the entire amount in your Profit Sharing Contribution Subaccount.
However, if you terminate employment with the Employer after only four
years, even though you return to employment with the Employer six
years later, you will be entitled to receive only 60 percent of that
amount.
__ * You will be 100 percent vested after three years of service. If you
terminate employment prior to three years you will not have any vested
interest in your Profit Sharing Contribution Subaccount.
G. FORFEITURES.
[CHECK ONE OF THE FOLLOWING ITEMS]:
__ * You have a 100 percent vested and nonforfeitable interest in the
amounts in your account at all times. Your account therefore will not
be subject to forfeitures.
__ * Forfeitures occur when you terminate employment before becoming fully
vested in your account, as explained in the section on "Vesting."
Effective for the first Plan Year beginning after 1984, any portion of
your Account that is not vested will be forfeited as of the last day
of the Plan Year in which your fifth consecutive Break in Service
occurs. Forfeited amounts will not be reinstated, even if you return
to service with the Employer. Such forfeitures will be allocated among
the Accounts of other Participants in the same manner as Profit
Sharing Contributions.
H. DISTRIBUTION OF BENEFITS.
1. ELIGIBILITY FOR DISTRIBUTION. You will be entitled to receive a
distribution of the vested amounts in your account upon
occurrence of any of the following:
* Your termination of employment with the Employer for any reason.
* Your total and permanent disability.
* Your death.
* Termination of the Plan.
* Your attainment of normal retirement age, which is:
[CHECK ONE OF THE FOLLOWING ITEMS),
X * Age 65
-
__ * Age _____ [INSERT NORMAL RETIREMENT AGE] or the___________
INSERT ANNIVERSARY DATE) of the day you commenced
participation in the plan.
(CHECK THE FOLLOWING ITEM IF YOUR PLAN PERMITS EARLY RETIREMENT):
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<PAGE>
__ * If you elect Early Retirement, attainment of your Early
Retirement Date, which is the first day of the month
coincident with or next following the date you reach age
____________________INSERT EARLY RETIREMENT AGE] and
complete __________ INSERT NUMBER OF YEARS] Years of
Service.
2. TIMING OF DISTRIBUTION. You will begin receiving benefit
distributions in accordance with the following;
* Generally, benefit distributions will commence not later than 60 days
after the end of the Plan Year in which you become eligible to receive
benefits.
* In the event of your death, your spouse, if you are married, will
generally be entitled to receive your benefit distribution. If you are
unmarried, or if your spouse has given written consent, your
designated Beneficiary will receive your benefit distribution, If you
have no spouse or designated Beneficiary, your benefit distribution
will go to your estate.
* If you so elect, you may defer commencement of the distribution of
your benefit beyond the date you first become eligible to receive that
distribution, to a date which you may specify. The date you specify
must not be later than the April 1 following the close of your taxable
year in which you attain age 70-1/2.
* If you attained age 70-1/2 before January 1, 1988, special rules apply
to your distributions.
If you wish to receive benefit distributions before attaining age 59-1/2, you
may be subject to a penalty tax, and you must notify the Plan Administrator in
writing that you am aware of the consequences of this tax.
3. FORM OF DISTRIBUTION. Your benefit will automatically
be distributed or a lump sum payment of cash, or a lump sum payment that
includes an in-kind distribution of all mutual fund shares credited to your
account.
I. INVESTMENT OF PLAN ASSETS
All contributions made to the Plan are kept in the Trust. A separate
account including all of the subaccounts described in the section on
"Participant Accounts," is maintained for you within that Trust. The assets of
the Trust are invested as follows:
[CHECK ONE OF THE FOLLOWING ITEMS]:
X * You must direct the Plan Administrator to invest the amounts in all of
- - your subaccounts in specified investments offered by the Sponsor.
__ * _____________________ (INSERT PERCENTAGE) of the assets of the Trust
are invested in shares or other investments offered by the Sponsor. The
remaining assets are invested in such other investments as are
acceptable to the Trustee.
__ * You ___ [INSERT "MAY" OR "MUST"] direct the Plan Administrator to
invest the amounts in the following subaccount in specified investments
offered by the Sponsor:
[CHECK ONE OR MORE OF THE FOLLOWING ITEMS]:
__ * The amounts in your Nondeductible Voluntary Contribution
Subaccount.
__ * The amounts in your Profit Sharing Contribution Subaccount.
__ * The amounts in your Trustee Transfer and Rollover
Subaccounts.
[CHECK THE FOLLOWING ITEM IF YOUR PLAN PERMITS WITHDRAWALS]:
J. WITHDRAWALS
You may make the following types of withdrawals from your account:
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<PAGE>
(CHECK ALL APPLICABLE ITEMS]
__ * If you have made Voluntary Employee Contributions to the Plan, you will
be permitted to withdraw the amounts in your Nondeductible Voluntary
Contribution Subaccount. If you are married, your spouse must consent
to the withdrawal.
__ * In the event of an imminent and heavy financial need due to the
purchase or renovation of a primary residence, the educational, medical
or personal expenses of you or a member of your immediate family, or
other hardship, you will be permitted to make a hardship withdrawal of
amounts credited to your Profit Sharing Contribution Subaccount.
All hardship withdrawals are subject to approval by the Plan
Administrator. Such withdrawals can only be made after prior
withdrawal of all amounts in your Nondeductible Voluntary Contribution
Subaccount, and after exhausting all other reasonable sources of
funds. If you are married, your spouse must consent to any withdrawals.
(CHECK THE FOLLOWING ITEM IF PLAN LOANS ARE PERMITTED):
__ K. LOANS.
This Plan contains provisions that permit you to borrow (with the
consent of your spouse) from the Plan part of your vested interest in your
account. Such a loan will not be made, however, if the total of all outstanding
loans to you from all pension and profit sharing plans of the Employer exceed
the lesser of $50,000 (taking into account the highest principal balance of any
loan outstanding at any time during the preceding 12 months) or one-half of the
value of your vested interest in your account.
The Plan Administrator will set the terms of all loans. The maximum
payment term for any loan will generally be five years. The interest rate will
be determined by the Plan Administrator. Your account will be security for the
loan.
[CHECK THE FOLLOWING ITEM IF YOUR PLAN PERMITS PARTICIPANTS TO PURCHASE LIFE
INSURANCE]:
__ L. INSURANCE.
The Plan contains provisions permitting you to designate a portion of
the amounts in your Profit Sharing Contribution Subaccount to purchase life
insurance. The portion of your Profit Sharing Contribution Subaccount which may
be used to purchase life insurance is equal to____________________ [INSERT
PERCENTAGE] of that subaccount.
III. CLAIMS PROCEDURE
You or your Beneficiary may file a written claim for benefits under
this Plan with the Plan Administrator at any time. If your claim is denied to
any extent by the Plan Administrator, a written notification must be sent to you
within 90 days. If you choose to appeal the decision, a request for review must
be made in writing to the Plan Administrator within 60 days of receipt of
written notification of the denial. Within 60 days after the appeal is filed, or
within 120 days, if there are special circumstances involved, the Plan
Administrator will issue a written decision.
IV. CHANGES TO THE PLAN
A. AMENDMENT OF THE PLAN
The Employer, together with the Sponsor, reserves the right to amend
the Plan at any time. You will be kept informed of any material amendments to
the Plan by updates to this Summary Plan Description.
B. TERMINATION OF THE PLAN
The Employer intends to continue this Plan indefinitely. However, the
Employer reserves the right to terminate the Plan at any time. if a termination
takes place, or If the Employer discontinues making contributions to the Plan,
you WILL have a 100 percent vested and nonforfeitable interest in all of the
amounts in your account. These amounts may be distributed to you at that time,
or may be distributed in accordance with the benefit distribution rules.
C. MERGER, CONSOLIDATION OR TRANSFER OF THE PLAN
In the event of the merger, consolidation or transfer of assets or
liabilities of the Plan to any other plan, your benefits will not be decreased
from what they would have been prior to such an event.
V. GENERAL INFORMATION
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<PAGE>
Name of Plan: ______________________________________________________
[INSERT NAME OF EMPLOYER] Profit Sharing Plan
Employer: ______________________________________________________
______________________________________________________
[INSERT NAME, ADDRESS AND TELEPHONE NUMBER OF EMPLOYER)
Type of Plan: Profit Sharing Plan
Type of Administration: Trusteed
Employer's Fiscal Year: ______________________________________________________
Plan Year End: ______________________________________________________
Plan Administrator: ______________________________________________________
[INSERT NAME, ADDRESS AND TELEPHONE NUMBER OF PLAN
ADMINISTRATOR]
Trustees: ______________________________________________________
______________________________________________________
[INSERT NAME, TITLE, ADDRESS AND PHONE NUMBER OF
PRINCIPAL PLACE OF EACH TRUSTEE]
Agent for Service of Legal
Process: ______________________________________________________
[INSERT NAME AND ADDRESS OF PERSON DESIGNATED AS AGENT
FOR SERVICE OF LEGAL PROCESS)
Employer Identification # ______________________________________________________
Plan Number: ______________________________________________________
Also, a complete list of the employers and employee organizations sponsoring the
Plan may be obtained by participants and beneficiaries upon written request to
the Plan administrator, and is available for examination by participants and
beneficiaries, as required by Labor Reg. Section 1.2520.104-bl and Section
2520.104b-30.
VI. NON-APPLICATION OF PBGC GUARANTEES
Because this Plan is a defined contribution plan, the benefits you will
receive are exempt from and not insured by the Pension Benefit Guaranty
Corporation.
VII. SPECIAL RIGHTS UNDER ERISA
As a participant in the [INSERT NAME OF EMPLOYER] Profit Sharing Plan, you
are entitled to certain rights and protections under the Employee Retirement
Income Security Act of 1974 (ERISA). ERISA provides that all Plan Participants
shall be entitled to:
* Examine, without charge, at the Plan Administrator's office and at
other specified locations, all Plan documents, including insurance
contracts, affecting the individual making the request, and copies of
all documents filed by the Plan with the U.S. Department of Labor,
such as annual reports and Plan descriptions.
* Obtain copies of all Plan documents and other Plan information upon
written request to the Plan Administrator. The Plan Administrator may
make a reasonable charge for the copies.
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<PAGE>
* Receive a summary of the Plan's annual financial report. The Plan
Administrator is required by law to furnish each Participant with a
copy of this summary annual report.
* obtain a statement of the total value of your account under the Plan
and your vested (nonforfeitable) portion of this account. This
statement must be requested in writing and is not required to be
given more than once a year, The Plan will provide the statement free
of charge.
In addition to creating rights for Plan Participants, ERISA imposes
duties upon the people who are responsible for the operation of the Plan. These
people who operate your plan, called "fiduciaries" of the Plan, have a duty to
do so prudently and in the interest of you and other Plan Participants and
Beneficiaries. No one, including your Employer, or any other person, may fire
you or otherwise discriminate against you in any way to prevent you from
obtaining a benefit under this Plan or exercising your rights under ERISA. If
your claim for a benefit is denied in whole or in part you must receive a
written explanation of the reason for the denial. You have the right to have
the Plan review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above
rights. For instance, if you request materials from the Plan and do not receive
them within 30 days, you may file suit in a federal court. In such a case, the
court may require the Plan Administrator to provide the materials and pay you up
to $100 a day until you receive the materials unless the materials were not sent
because of reasons beyond the control of the Plan Administrator. If you have a
claim for benefits which is denied or ignored in whole or in part, you may file
suit in a state or federal court. If it should happen that Plan fiduciaries
misuse the Plan's money, or if you are discriminated against for asserting your
rights, you may seek assistance from the U.S. Department of Labor, or you may
file suit in a federal court. The court will decide who should pay court costs
and legal fees. If you lose, the court may order you to pay these costs and
fees, for example, if it finds your claim is frivolous. if you have any
questions about your Plan, you should contact the Plan Administrator. If you
have any questions about this statement or about your rights under ERISA, you
should contact the nearest Area Office of the U.S. Labor-Management Services
Administration, Department of Labor.
94
<PAGE>
MODEL
SUMMARY PLAN DESCRIPTION
OF THE
--------------------------------
[INSERT NAME OF EXPLOYER1
MONEY PURCHASE PENSION PLAN
Copyright 1990 Investment Company Institute March 1990
95
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
I. INTRODUCTION ............................................................. 3
II. DESCRIPTION OF PLAN BENEFITS AND REQUIREMENTS .......................... 3
A. Terms With Special Meanings ......................................... 3
B. Participation ....................................................... 4
C. Individual Accounts ................................................. 4
D. Contributions ....................................................... 4
E. Allocations ......................................................... 5
F. Vesting ............................................................. 6
G. Forfeitures ......................................................... 7
H. Distributions of Benefits ........................................... 7
I. Investment of Plan Assets ........................................... 8
J. Withdrawals ......................................................... 9
K. Loans ............................................................... 9
L. Insurance ........................................................... 9
III. CLAIMS PROCEDURE ....................................................... 9
IV. CHANGES TO THE PLAN .................................................... 9
V. GENERAL INFORMATION .................................................... 10
VI. NON-APPLICATION OF PBGC GUARANTEES ..................................... 11
VII. SPECIAL RIGHTS UNDER ERISA ............................................. 11
</TABLE>
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<PAGE>
MODEL
SUMMARY PLAN DESCRIPTION
OF THE
-------------------------------------
[INSERT NAME OF EMPLOYER]
MONEY PURCHASE PENSION PLAN
I. INTRODUCTION
__________________________________ [INSERT NAME OF EMPLOYER] (the
"Employer") is pleased to be able to provide you with the____________________
[INSERT NAME OF EMPLOYER] Money Purchase Pension Plan (the "Plan" or the
"Pension Plan"). The Plan is effective as of ____________________________
[INSERT EFFECTIVE DATE].
The Plan is a defined contribution plan, to which the Employer makes
contributions to an account hold in your name. With this type of plan; the
retirement benefit you receive will depend on the investment performance of the
amounts that are in your account. The Plan is designed to provide retirement
income to employees who remain with the Employer until retirement and to those
who have a vested interest in their account when they terminate their employment
with the Employer.
Only the main features of the Plan are explained in this Summary Plan
Description. Any questions which are not answered here should be referred to
____________________________ [INSERT NAME OF DEPARTMENT OR PERSONNEL RESPONSIBLE
FOR PARTICIPANT INFORMATION]. If there is any inconsistency between the Plan as
described in this Summary Plan Description and the Plan document itself, the
terms of the Plan document will govern. Copies of the Plan document and the
Trust Agreement are available for your inspection during regular working hours.
II. DESCRIPTION OF PLAN BENEFITS AND REQUIREMENTS
A. TERMS WITH SPECIAL MEANINGS
Certain words and terms used in this Summary have special meanings.
Many of these terms are fined in this section, while others are
explained in the text of the Summary. To assist you in identifying
these terms within the text, they are capitalized.
1. BENEFICIARY. Your designated Beneficiary is the person you name
to receive your benefit distribution in the event of your death.
If you are married, you will need written consent from your
spouse to name someone other than your spouse as your
Beneficiary.
2. BREAK IN SERVICE. A Break in Service occurs if you complete less
than 501 Hours of Service with the Employer during a Plan Year.
3. COMPENSATION. Compensation is the total compensation paid to you
by the Employer during any portion of a Plan Year during which
you were a Plan Participant. If you are self-employed, your
Compensation is your earned income less your deductible
contributions to any qualified retirement plans.
4. HOURS OF SERVICE. Each hour for which you are paid or entitled to
be paid by the Employer. In addition, uncompensated authorized
leaves of absence that do not exceed two years, military leave
while your reemployment rights are protected by law, and absences
from work for maternity or paternity reasons may be credited as
Hours of Service for the purpose of determining whether you had
a Break in Service.
5. PARTICIPANT. A Participant is an employee who has met the
requirements for participating in this Plan, and whose account
has been neither completely forfeited nor distributed.
6. Plan Year. The Plan Year is the 12-month period ending on the
date shown in section V of this Summary.
7. SPONSOR. The Sponsor is the organization which has made this Plan
available to the Employer.
8. TRUST. The Trust is a fund maintained by the Trustee for the
investment of Plan assets, including the amount in your account.
9. YEAR OF SERVICE. A Year of Service is the applicable 12-month
period during which you complete 1,000 or more Hours of Service.
For
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<PAGE>
eligibility purposes, the applicable 12-month period is your
first year of employment or any Plan Year, For vesting purposes,
the applicable 12-month period is the Plan Year.
B. PARTICIPATION.
You will be eligible to participate in the Plan after you have met the
following eligibility requirements:
[CHECK ALL APPLICABLE ITEMS]
[X] o You have reached age 21.
[X] o You have completed 1 Year(s) of Service.
[X] o You are not a member of a collective bargaining unit.
[X] o You are not a nonresident alien.
The first entry date, or date in which you can first participate in
the Plan if you meet these requirements, is ________________ [INSERT EFFECTIVE
DATE]. Thereafter, do entry date(s) will be January 1 & July 1 of each Plan
Year.
Once you become a Participant, you will remain a Participant as long
as you do not incur a Break in Service. If you do incur a Break in Service, and
are later reemployed by the Employer, you will be reinstated as a Participant
and any previous Hours of Service will be reinstated as of the date of your
reemployment.
C. INDIVIDUAL ACCOUNTS
A separate account will be maintained for you within the Plan. This account
will be further divided into subaccounts, which will be credited with the
different types of contributions that are described in the next section. The
subaccounts that will be maintained for you are as follows:
1. MONEY PURCHASE PENSION CONTRIBUTION SUBACCOUNT. This subaccount
will be credited with your share of Employer Money Purchase Pension
Contributions, distributions from this subaccount, and the earnings and losses
attributable to this subaccount.
2. TRUSTEE TRANSFER AND ROLLOVER SUBACCOUNTS. These subaccounts will
be credited with any rollover contributions or transfer contributions you
may make to the Plan, any distributions from the subaccount, and the earnings
and losses attributable to the subaccount.
(CHECK THE FOLLOWING ITEM IF YOUR PLAN PERMITS VOLUNTARY EMPLOYEE
CONTRIBUTIONS]:
___ 3. NONDEDUCTIBLE VOLUNTARY CONTRIBUTION SUBACCOUNT. This subaccount
will be credited with our Voluntary Employee Contributions, any distributions
from this subaccount, and the earnings and losses attributable to this
subaccount.
D. CONTRIBUTIONS
The Employer will make, or you will be permitted to make, the
following types of contributions. These contributions will be allocated to the
appropriate subaccounts within your account.
1. EMPLOYER MONEY PURCHASE PENSION CONTRIBUTIONS. The Employer
will make Money Purchase Pension Contributions to the Plan each
Plan Year in accordance with a formula based on your
Compensation. This formula is given in the section on
"Allocations."
2. ROLLOVER CONTRIBUTIONS AND DIRECT TRANSFERS. If you have
participated in other pension or profit sharing plans, you will
be permitted to make a rollover contribution to the Plan of
certain amounts you may receive from those other plans.
You will also be permitted, with the approval of the Plan
Administrator, to authorize a direct transfer to the Plan of
amounts that are attributable to your participation in other
pension or profit sharing plans.
[CHECK THE FOLLOWING ITEM IF YOUR PLAN PERMITS VOLUNTARY EMPLOYEE
CONTRIBUTIONS].
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<PAGE>
3. VOLUNTARY EMPLOYEE CONTRIBUTIONS. To increase your
--- retirement benefits from this Plan, you may choose to make
voluntary contributions to the Plan of up to _____ (INSERT
MAXIMUM VOLUNTARY EMPLOYEE CONTRIBUTION PERCENTAGE) of your
Compensation. Such contributions will not be permitted, however,
for Plan Years beginning after _____________ (THE PLAN YEAR IN
WHICH THE PLAN IS ADOPTED). The minimum contribution you must
make if you choose to make a voluntary contribution is as
follows:
[CHECK ONE OF THE FOLLOWING ITEMS]:
- The minimum voluntary contribution is ____ [INSERT MINIMUM
--- VOLUNTARY CONTRIBUTION PERCENTAGE] of your Compensation.
X - There is no minimum voluntary contribution.
---
E. Allocations
1. ELIGIBILITY FOR ALLOCATIONS. Each Plan Year the Employer will make
a Money Purchase Pension Contribution to the Plan in accordance with the
formula based on your Compensation. Your account will be allocated a
contribution if you are an employee as of the last day of the Plan Year.
[X] o Unless you terminate your employment during the Plan Year with not
more than 500 [INSERT HOURS OF SERVICE REQUIREMENT] Hours of Service.
(You will receive an allocation, however, if you die, retire or become
disabled during the Plan Year).
Under some circumstances, special minimum allocation rules may result in your
receiving an allocation, even if you do not meet any of the requirements set
forth above.
2. AMOUNT OF ALLOCATION. If you are eligible, your account will be
credited with a Money Purchase Pension Contribution as follows:
[CHECK ONE OF THE FOLLOWING ITEMS]
o The Employer will make a contribution on your behalf equal to _______
(INSERT CONTRIBUTION PERCENTAGE) of your Compensation.
[CHECK THE FOLLOWING ITEM IF YOUR PLAN IS INTEGRATED WITH SOCIAL
SECURITY]:
o The Employer will make a contribution equal to ______% of your
- --- Compensation up to the Plan's Integration Level, plus ____% of your
Compensation excess of the Plan's Integration Level.
The Plan's Integration Level is equal to:
(CHECK ONE OF THE FOLLOWING ITEMS):
[ ] o The taxable wage base, which is the annual earnings subject
to Social Security (FICA) tax.
[ ] o A dollar amount equal to ____ [INSERT DOLLAR AMOUNT].
[ ] o A percentage of the taxable wage base equal to ___% of the
annual earnings subject to Social Security (FICA) tax.
For example, suppose that the Plan's taxable wage base is
equal to $51,300, and that your Compensation during a Plan
Year totaled $61,300. You would receive an allocation of
____ [INSERT CONTRIBUTION PERCENTAGE] of your first $51,300
in Compensation, and
____ [INSERT EXCESS CONTRIBUTION PERCENTAGE] on the
remainder of $ 10,000.
Under some circumstances, special minimum allocation rules may cause you to
receive a larger allocation than you normally would. The amount that can be
allocated to your account in any Plan Year is limited by rules applying to all
qualified plans.
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<PAGE>
F. VESTING.
Vesting refers to the nonforfeitable interest you have in each of your
subaccounts. In other words, your vested interest in your account is the amount
you will receive when your account is distributed to you.
You will always have a 100 percent vested and nonforfeitable interest
in the amounts you have in your:
o Trustee transfer and rollover subaccounts.
[CHECK THE FOLLOWING ITEM IF YOUR PLAN PERMITS VOLUNTARY EMPLOYEE
CONTRIBUTIONS]:
o Nondeductible Voluntary Contribution Subaccount.
You will earn a vested interest in your Money Purchase Pension
Contribution Subaccount in accordance with the following:
[CHECK ONE OF THE FOLLOWING ITEMS]:
[ ] o You will always have a 100 percent vested and nonforfeitable interest
in your Money Purchase Pension Contribution Subaccount.
[ ] o You will have a 100 percent vested and nonforfeitable interest in your
Money Purchase Pension Contribution Subaccount in the event of any of
the following:
o You reach your Normal Retirement Age or Early Retirement Date.
o You die or become disabled.
Otherwise, you will earn a vested interest in your Money Purchase
Pension Contribution Subaccount in accordance with the following schedule:
[CHECK ONE OF THE FOLLOWING ITEMS]
[ ] o YEARS OF SERVICE VESTED PERCENTAGE
---------------- -----------------
1 year 0%
2 years 20%
3 yam 40%
4 years 60%
5 years 80%
6 or more years 100%
For example, If you are employed for six years, you will be entitled
to the entire amount in your Money Purchase Pension Contribution
Subaccount. However, If you terminate employment with the Employer
after only four years, even though you return to employment with the
Employer six years later, you will be entitled to receive only 60
percent of that amount.
[ ] o You will be 100 percent vested after three years of service. If you
terminate employment prior to three years you will not have any vested
amount in your Money Purchase Pension Contribution Subaccount.
Any portion of your Money Purchase Pension Contribution Subaccount in
which you do not have a vested interest will be forfeited by you as of
the last day of the Plan Year in which your fifth consecutive Break in
Service occurs.
G. FORFEITURES
[CHECK ONE OF THE FOLLOWING ITEMS]:
[ ] o You have a 100 percent vested and nonforfeitable interest in the
amounts in your account at all times. You will therefore not be
subject to forfeitures.
[ ] o Forfeitures occur when you terminate employment before becoming fully
vested in your account, as explained in the section on "Vesting."
Effective for the Trust Plan Year beginning after 1984, any portion of
your account that is not vested will be forfeited as of the last day
of the Plan Year in which your fifth consecutive Break in Service
occurs. Forfeited amounts will not be reinstated, even if you return
to service with the Employer. Such forfeitures either will be:
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<PAGE>
[CHECK ONE OF THE FOLLOWING ITEMS]:
[ ] o Used by the Employer as a credit against its future
contributions to the Plan; or
[ ] o Reallocated among the accounts of remaining Participants in
proportion to their pay.
H. DISTRIBUTION OF BENEFITS.
1. ELIGIBILITY FOR DISTRIBUTION. You will be entitled to receive a
distribution of the vested amounts in your account upon occurrence of any of the
following:
o Your termination of employment with the Employer for any reason.
o Your total and permanent disability.
o Your death.
o Termination of the Plan.
o Your attainment of normal retirement age, which is:
[CHECK ONE Of THE FOLLOWING ITEMS]:
[X] o Age 65.
[ ] o Age ____ [INSERT NORMAL RETIREMENT AGE] or the ____________
[INSERT ANNIVERSARY DATE] of the day you commenced
participation in the Plan.
[CHECK THE FOLLOWING IF YOUR PLAN PERMITS EARLY RETIREMENT]:
[ ] o If you elect early retirement, attainment of your early
retirement date, which is the first day of the month
coincident with or next following the date you reach age _
(INSERT EARLY RETIREMENT AGE) and complete _________ [INSERT
NUMBER OF YEARS] Years of Service.
2. TIMING OF DISTRIBUTIONS. You will begin receiving benefit
distributions in accordance with the following:
o Generally, benefit distributions will commence not later then 60 days
after the end of the Plan Year in which you become eligible to receive
benefits.
o In the event of your death, your spouse, if you are married, will
generally be entitled to receive your benefit distribution. If you are
unmarried, or if your spouse has given written consent, your
designated Beneficiary will receive your benefit distribution. If you
have no spouse or designated Beneficiary, your benefit distribution
will go to your estate.
o If you so elect, you may defer commencement of the distribution of
your benefit beyond the date you first become eligible to receive that
distribution, to a date which you may specify. The date you specify
must not be later than the April 1 following the close of your taxable
year in which you attain age 70-1/2.
o If you attained age 70-1/2 before January 1, 1988, special rules apply
to your distributions.
If you wish to receive benefit distributions before attaining age
59-1/2, you may be subject to a penalty tax, and you must notify the Plan
Administrator in writing that you are aware of the consequences of this tax.
3. FORM OF DISTRIBUTION. Your benefit will automatically be
distributed in the form of a in a lump sum payment of cash, or a lump sum
payment that includes an in-kind distribution of all mutual fund shares credited
to your account.
I. INVESTMENT OF PLAN ASSETS
All contributions made to the Plan are kept in the Trust. A separate
account, including all of the subaccounts described in the section on
"Participant accounts," is maintained for you within that Trust. The assets of
the Trust are invested as follows:
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(CHECK ONE OF THE FOLLOWING ITEMS::
[X] o All of the assets of the Trust are invested in shares or other
investments offered by the Sponsor.
[ ] o _________ [INSERT PERCENTAGE] of the assets of the Trust are invested
in shares or other investments offered by the Sponsor. The remaining
assets are invested in such other investments as are acceptable to the
Trustee.
[ ] o You ______ [INSERT "may" OR "must"] direct the Plan Administrator to
invest the amounts in the following subaccount in specified
investments offered by the Sponsor:
(CHECK ONE OR MORE OF THE FOLLOWING ITEMS):
[ ] o The amounts in your Nondeductible Voluntary Contribution Subaccount.
[ ] o The amounts in your Money Purchase Pension Contribution Subaccount.
[ ] o The amounts in your trustee transfer and rollover subaccounts.
[CHECK THE FOLLOWING ITEM IF YOUR PLAN PERMITS VOLUNTARY EMPLOYEE
CONTRIBUTIONS]:
[ ] J. WITHDRAWALS
If you have made Voluntary Employee Contributions to the Plan, you
will be permitted to withdraw the amounts in your Nondeductible Voluntary
Contribution Subaccount. If you are married, your spouse must consent to the
withdrawal.
[CHECK THE FOLLOWING ITEM IF PLAN LOANS ARE PERMITTED]
[ ] K. LOANS
The Plan contains provisions that permit you to borrow from the Plan
part of your vested interest in your account. Such a loan will not be made,
however, if the total of all outstanding loans to you from all pension and
profit sharing plans of the Employer exceed the lower of $50,000 (taking into
account the highest principal balance of any loan outstanding at any time during
the preceding 12 months) or one-half of the value of your vested interest in
your account.
The Plan Administrator will set the terms of all loans. The maximum
payment term for any loan will generally be five years. The interest rate will
be determined by the Plan Administrator, your account will be security for the
loan.
[CHECK THE FOLLOWING ITEM IF YOUR PLAN PERMITS PARTICIPANTS TO PURCHASE
LIFE INSURANCE]:
[ ] L. INSURANCE.
The Plan contains provisions permitting you to designate a portion of
the amounts in your Money Purchase Pension Contribution Subaccount to purchase
life insurance. The portion of your Money Purchase Pension Contribution
Subaccount which may be used to purchase life insurance is equal to ________
[INSERT PERCENTAGE] of that subaccount.
III. CLAIMS PROCEDURE
You or your Beneficiary may file a written claim for benefits under this
Plan with the Plan Administrator at any time. If your claim is denied to any
extent by the Plan Administrator, a written notification must be sent to you
within 90 days. If you choose to appeal the decision, a request for review must
be made in writing to the Plan Administrator within 60 days of receipt for
written notification of the denial. Within 60 days after the appeal is filed, or
within 120 days, if there are special circumstances involved, the Plan
Administrator will issue a written decision.
102
<PAGE>
IV. CHANGES TO PLAN
A. AMENDMENT OF THE PLAN
The Employer, together with the Sponsor, reserves the right to amend
the Plan at any time. You will be kept informed of any material amendments to
the Plan by updates to this Summary Plan Description.
B. TERMINATION OF THE PLAN
The Employer intends to continue this Plan indefinitely. However, the
Employer reserves the right to terminate the Plan at any time. If a termination
takes place, or if the Employer discontinues making contributions to the Plan,
you will have a 100 percent vested and nonforfeitable interest in all of the
amounts in your account. These amounts may be distributed to you at that time,
or may be distributed in accordance with the benefit distribution rules.
C. Merger, Consolidation, or Transfer of the Plan
In the event of the merger, consolidation or transfer of assets or
liabilities of the Plan to any other plan, your benefits will not be decreased
from what they would have been prior to such an event.
V. GENERAL INFORMATION
NAME OF PLAN: _____________________________________________________
Money Purchase Pension Plan
EMPLOYER: _____________________________________________________
_____________________________________________________
TYPE OF PLAN: Money Purchase Pension Plan
TYPE OF ADMINISTRATION: Trusteed
EMPLOYER'S FISCAL YEAR: __________________________
PLAN YEAR END: __________________________
PLAN ADMINISTRATOR: _____________________________________________________
_____________________________________________________
_____________________________________________________
Trustees: _____________________________________________________
_____________________________________________________
_____________________________________________________
[INSERT NAME, TITLE, ADDRESS AND PHONE NUMBER OF
PRINCIPAL PLACE OF BUSINESS OF EACH TRUSTEE)
AGENT FOR SERVICE OF LEGAL PROCESS: __________________________________________
__________________________________________
INSERT NAME AND ADDRESS OF PERSON DESIGNATED
AS AGENT FOR SERVICE OF LEGAL PROCESS)
EMPLOYER IDENTIFICATION NUMBER: __________________________________________
PLAN NUMBER: __________________________________________
Also, a complete list of the employers and employee organizations sponsoring the
Plan may be obtained by participants and beneficiaries upon written request to
the Plan administrator, and is available for examination by participants and
beneficiaries, as required by Labor Reg. Section 2520.104b-1 and Section
2520.104b-30.
V1. NON-APPLICATION OF PBGC GUARANTEES
Because this Plan is a defined contribution plan, the benefits you will
receive are exempt from and not insured by the Pension Benefit Guaranty
Corporation.
103
<PAGE>
VII. SPECIAL RIGHTS UNDER ERISA
As a participant in the ________________________________ [INSERT NAME OF
EMPLOYER] Money Purchase Pension Plan, you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974 (ERISA).
ERISA provides that all Plan Participants shall be entitled to:
o Examine, without charge, at the Plan Administrator's office and at
other specified locations, all Plan documents, including insurance
contracts, affecting the individual making the request, and copies of
all documents filed by the Plan with the U.S. Department of Labor, such
as detailed annual reports and Plan descriptions. Obtain copies of all
Plan documents and other Plan information upon written request to the
Plan Administrator. The Plan Administrator may make a reasonable charge
for the copies.
o Receive a summary of the Plan's annual financial report. The Plan
Administrator is required by law to furnish each Participant with
a copy of this summary annual report.
o Obtain a statement of the total value of your account under the
Plan and your vested (nonforfeitable) portion of this account. This
statement must be requested in writing and is not required to be
given more than once a year. The Plan will provide the statement
free of charge.
In addition to creating rights for Plan Participants, ERISA imposes
duties upon the people who are responsible for the operation of the Plan. These
people who operate your plan, called "fiduciaries" of the Plan, have a duty to
do so prudently and in the interest of you and other Plan Participants and
Beneficiaries. No one, including your Employer, or any other person, may fire
you or otherwise discriminate against you in any way to prevent you from
obtaining a benefit under this Plan or exercising your rights under ERISA. If
your claim for a benefit is denied in whole or in part you must receive a
written explanation of the reason for the denial. You have the right to have
the Plan review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the above rights.
For instance, if you request materials from the Plan and do not receive them
within 30 days, you may file suit in a federal court. In such a case, the court
may require the Plan Administrator to provide the materials and pay you up to
$100 a day until you receive the materials unless the materials were not sent
because of reasons beyond the control of the Plan Administrator. If you have a
claim for benefits which is denied or ignored, in whole or in part, you may file
suit in a state or federal court. If it should happen that Plan fiduciaries
misuse the Plan's money, or if you are discriminated against for asserting your
rights, you may seek assistance from the U.S. Department of Labor, or you may
file suit in a federal court. The court will decide who should pay court costs
and legal fees. If you lose, the court may order you to pay these costs and
fees, for example, if it finds your claim is frivolous. If you have any
questions about your Plan, you should contact the Plan Administrator. If you
have any questions about this statement or about your rights under ERISA, you
should contact the nearest Area Office of the U.S. Labor-Management Services
Administration, Department of Labor.
NOTICE TO INTERESTED PARTIES
Current employees of ________________________________ are hereby notified that
(Name of Employer)
___________________________ has adopted the __________________________________
(Name of Adopting Employer) (Name of Plan or Plans)
as its employee retirement benefit plan.
The employee eligible to participate under this Plan are
____________________________________.
(Insert Eligible Class of Employees)
It is not expected that this Plan will be submitted to the Internal Revenue
Service for an advance determination as to whether or not the Plan meets the
qualification requirements of section 401(a) of the Internal Revenue Code.
However, this Plan is a prototype plan and the Internal Revenue Service has
previously issued a favorable opinion letter to the sponsor with regard to the
this plan.
As in interested party, you have the right to submit to the Key District
Director of the Internal Revenue Service, either individually or jointly with
other interested parties, your comments as to whether this Plan meets the
qualification requirements of the Internal Revenue Code.
104
<PAGE>
You may also, either or jointly with other interested parties, request that the
Department of Labor submit, on your behalf, comments to the Key District
Director regarding qualification of this Plan.
If the Department of Labor declines to comment on all or some of the matters you
raise, you may, individually or jointly if your request was made to the
Department jointly, submit your comments on these matters directly to the Key
District Director as the following address:
___________________________________________
(NAME AND ADDRESS OF KEY DISTRICT DIRECTOR)
The Department of Labor may not comment on behalf of interested parties unless
requested to do so by the lesser of 10 employees or 10 percent of the employees
who qualify as interested parties. The number of persons needed for the
Department of Labor to comment with respect to this Plan is ___________________.
A request to the Department of Labor should be sent to the following address:
Administrator of Pension and Welfare Benefit Programs
U.S. Department of Labor
200 Constitution Avenue N.W.
Washington, D.C. 20216
Attention: 3001 Comment Request
Any comment you submit to the Key District to the Key District Director, or any
request to the Department of Labor must include the name of the Plan, the Plan
number, the opinion letter number, the adopting employer's identification
number, the name and address of the sponsor, and the name and address of the
Plan administrator. Any request to the Department of Labor must also include
the address of the Key District Director. This information can be found at the
end of this Notice.
A comment to the Key District must be received by
____________________________________.
(Date 45 Days After Plan is Adopted)
if you wish to preserve your right to comment to the Key District Director, or
by ____________________________________ if you wish to waive that right.
(Date 55 Days After Plan is Adopted)
If there are matters upon which you request the Department of Labor to comment
upon on your behalf, and the Department declines to do so, you may submit
comments on these matters directly to the Key District Director. These comments
must be received by the Key District Director within 15 days from the time the
Department of Labor notifies you that it will not comment on a particular
matter, or by ___________________________________ whichever is later.
(Date 75 Days After The Plan is Adopted).
Detailed instructions regarding the requirements for submitting comments may
be found in sections 6,7, and 8 of Revenue Procedure 80-30.
Additional information concerning this Plan (including, where applicable, a
description of the circumstances which may result in eligibility of loss of
benefits, a description of the source of financing of the plan, and copies of
section 6 of Revenue Procedure 80-30) is available at_________________________
(LOCATION)
during the hours of _________________, for inspection of copying. There may be
a normal charge for copying and/or mailing.
The following information will be needed for correspondence with the Department
of Labor or the Key District Director:
___________________________________
(Name of Adopting Employer)
105
<PAGE>
______________________________________
(Name of Plan or Plans)
______________________________________
Plan Identification Number(s)
______________________________________
(Opinion Letter Number)
______________________________________
(Name of Sponsor)
______________________________________
(Address of Sponsor)
______________________________________
(Adopting Employer's EIN)
______________________________________
(Name of Plan Administrator)
______________________________________
(Address of Plan Administrator)
______________________________________
(Address of Key District Director)
106
<PAGE>
FORMS
107
<PAGE>
[AIM LOGO APPEARS HERE]
ASSET TRANSFER FORM
AIM Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
Phone Number 1-800-347-1919 (ext. 506)
THIS FORM SHOULD BE USED ONLY IF YOU ARE TRANSFERRING PLAN ASSETS DIRECTLY
TO AIM.
================================================================================
1. PRINT PLAN NAME AND ADDRESS HERE
- --------------------------------------------------------------------------------
Plan Name/Trustees
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
City State Zip
Tax ID Number
-------------------------------------------------------------------
Telephone ( )
-----------------------------------------------------------------
================================================================================
2. ACCOUNT TO BE TRANSFERRED TO AIM
- --------------------------------------------------------------------------------
Account Number
- --------------------------------------------------------------------------------
Name of Resigning Trustee/Custodian
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
City State Zip
- --------------------------------------------------------------------------------
Attention Telephone
================================================================================
3. PLEASE TELL US WHERE TO INVEST THE MONEY YOU ARE TRANSFERRING
Please deposit proceeds in my [ ] existing [ ]* new
[ ] Money Purchase Plan
[ ] Profit Sharing
* Application Attached
- --------------------------------------------------------------------------------
Fund Name Account Number
- --------------------------------------------------------------------------------
Fund Name Account Number
If assets are to be invested in multiple participant accounts you must submit a
separate statement identifying each participant and the percentage to be
invested in each fund(s).
If transferred assets are to be invested in "pooled" accounts you must indicate
the percentage (%) to be invested in each funds.
================================================================================
4. PLEASE AUTHORIZE YOUR CURRENT OR CUSTODIAN TO TRANSFER ACCOUNT TO THE AIM
FUNDS
To Resign Trustee or Custodian:
Please transfer [ ] all or [ ] part ($_________________) of our assets listed in
Section 2 to The AIM Funds.
[ ] immediately [ ] at maturity
[ ] Please transfer [ ] all or part (__________________) of the assets to AIM
Fund Acct# ___________________________.
- --------------------------------------------------------------------------------
Signature/Trustee Date
An Important note: Your current investment manager or custodian may require your
signature to be guaranteed.
Call that institution for requirement.
Signature guaranteed by:
- --------------------------------------------------------------------------------
Name of Bank or Firm
- --------------------------------------------------------------------------------
Signature of Officer and Title
================================================================================
5. CUSTODIAN ACCEPTANCE OF PLAN
This to advise you that _______________________, trustee custodian, will accept
the account identified above for: Plan Name ________________________________
Account Number _____________________________
This transfer of assets is to be executed from fiduciary to fiduciary and will
not place the participant in actual receipt of all or any of the plan assets.
NO FEDERAL INCOME TAX IS TO BE WITHHELD FROM THIS TRANSFER OF ASSETS.
If you have any further questions regarding the transfer, please feel free to
contact us at the above toll-free number.
- --------------------------------------------------------------------------------
Authorized Signature/Trustee
- --------------------------------------------------------------------------------
Date
================================================================================
6. RESIGNING TRUSTEE OR CUSTODIAN
Please Indicate Account Number on all documents sent to AIM.
Please attach a copy of this form to the check.
Check Payable to: AIM Funds, FBO: (Plan Name)
c/o AIM Fund Services, Inc,
P.O. Box 4739
Houston, TX 77210-4739
108
<PAGE>
EXHIBIT 14(d)
403(b) PLAN [AIM LOGO APPEARS HERE]
ACCOUNT APPLICATION
To open your AIM 403(b) Plan account.
Employer mail to: A I M Fund Services, Inc., P.O. Box 4399, Houston, TX
77210-4399. Phone: 800-959-4246
ALL sections must be fully completed.
- --------------------------------------------------------------------------------
1. EMPLOYEE INFORMATION (please print)
Participant
--------------------------------- Birth Date / /
First Name Middle Last Name ---- ---- ---
Address
-------------------------------------------------------------------
Street City State Zip Code
Social Security # Daytime Telephone
-------------------- -------------------
Employer
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. INVESTMENT INFORMATION (Minimum investment in any AIM Fund is $25 per pay
period per Fund.)
CONTRIBUTIONS:
[ ] I will be making salary-deferral contributions in the amount of
$_______________ or______% of compensation.
[ ] This is a transfer of 403(b) assets only; no salary-deferral
contribution will be made at this time.
Each contribution to the Custodial Account shall be invested in the
following AIM Funds in the amounts specified.
<TABLE>
<CAPTION>
EQUITY FUNDS $ OR % OF ASSETS CLASS OF SHARES FIXED INCOME FUNDS $ OR % OF ASSETS CLASS OF SHARES
(CHECK ONE) (CHECK ONE)
<S> <C> <C> <C> <C> <C>
AIM Blue Chip Fund $ Class [ ] A [ ] B AIM Balanced Fund $ Class [ ] A [ ] B
------------ ------------
AIM Capital AIM Global Income Fund $ Class [ ] A [ ] B
Development Fund $ Class [ ] A [ ] B ------------
------------ AIM Intermediate
AIM Charter Fund $ Class [ ] A [ ] B Government Fund $ Class [ ] A [ ] B
------------ ------------
AIM High Yield Fund $ Class [ ] A [ ] B
AIM Global Aggressive ------------
Growth Fund $ Class [ ] A [ ] B AIM Income Fund $ Class [ ] A [ ] B
------------ ------------
AIM Global Growth Fund $ Class [ ] A [ ] B
------------ AIM Limited Maturity
AIM Constellation Fund $ Class [ ] A Treasury Shares $ Class [ ] A
------------ ------------
AIM Growth Fund $ Class [ ] A [ ] B MONEY MARKET FUNDS $
------------ ------------
AIM Money Market Fund $ Class [ ] A [ ] B [ ] C
AIM International ------------
Equity Fund $ Class [ ] A [ ] B Total $
------------ ------------
AIM Global Utilities
Fund $ Class [ ] A [ ] B
------------
AIM Value Fund $ Class [ ] A [ ] B
------------
AIM Weingarten Fund $ Class [ ] A [ ] B
------------
</TABLE>
If no class of shares is selected, Class A shares will be purchased, except
in the case of AIM Money Market Fund, where Class C Shares will be
purchased.
BILLING: PLEASE CONFIRM WITH YOUR EMPLOYER THAT THIS IS REQUIRED BEFORE
COMPLETING THIS SECTION. MY EMPLOYER HAS REQUESTED THAT AIM FORWARD A
BILLING EACH MONTH FOR SUBMISSION OF MY ON-GOING SALARY-DEFERRAL
CONTRIBUTION. (NOTE: BILLING IS ONLY AVAILABLE WHEN AN ORGANIZATION HAS 10
OR MORE 403(B) PARTICIPANTS WITH AIM.)
PLEASE REMIT THE BILLING TO:
Employer's Name Attention
-------------------------- -------------------
Address Telephone
---------------------------------- -------------------
- --------------------------------------------------------------------------------
3. ACCOUNT OPTIONS
Please indicate options you desire, if any.
TELEPHONE EXCHANGE PRIVILEGE. Unless indicated below, I authorize the
Transfer Agent to accept from any person instructions to exchange shares in
my account(s) by telephone for shares of other AIM Funds within the same
Class of Shares, in accordance with the procedures and conditions set forth
in the Fund's current prospectus.
[ ] I DO NOT want the telephone exchange privilege.
11
<PAGE>
REDUCED SALES CHARGE (optional/available for Class A shares only)
Right of Accumulation
I apply for Right of Accumulation reduced sales charges based on the
following accounts in The AIM Family of Funds(--Registered Trademark--):
Fund(s) Account No(s).
--------------------------- -------------------------
LETTER OF INTENT
I agree to the Letter of Intent provisions in the prospectus. I plan to
invest during a 13-month period a dollar amount of at least:
[ ]$25,000 [ ]$50,000 [ ]$100,000 [ ]$250,000 [ ]$500,000 [ ]$1,000,000
- --------------------------------------------------------------------------------
4. BENEFICIARY DESIGNATION
Primary Beneficiary:
I hereby designate the following individual(s) to receive the full value of
the assets of my 403(b) plan with A I M Distributors, Inc. upon my death.
This revokes any and all prior Beneficiary Designations made by me and
filed with the Custodian. (If you designate a beneficiary other than your
spouse, your spouse must acknowledge the designation by signing this form.)
Full Name
------------------------------------------------------------------
Address
-------------------------------------------------------------------
Social Security #
----------------------------------------------------------
Relationship
---------------------------------------------------------------
Percentage of Assets
-------------------------------------------------------
Please complete and sign the beneficiary designation. We cannot accept this
application without proper designation of beneficiary. If you wish to
identify additional or contingent beneficiaries, please attach a separate
letter identifying the same information requested above.
- --------------------------------------------------------------------------------
5. AUTHORIZATION AND SIGNATURE
I hereby adopt the A I M Distributors, Inc. 403(b)(7) Custodial Agreement
appointing Boston Safe Deposit and Trust Company as Custodian. I have
received and read the current prospectus of the investment company(ies)
selected in this agreement and have read and understand the 403(b)(7)
custodial agreement and consent to the custodial account fee as specified.
I understand that an annual AIM 403(b)(7) Maintenance Fee (currently $10)
will be deducted in early December from my 403(b)(7) Fund account.
Under the Interest and Dividend Tax Compliance Act of 1983, the Fund is
required to have the following certification. Please refer to the Fund
prospectus for complete instructions regarding backup withholding. Under
the penalties of perjury, I certify that (i) the number shown in Section 1
is my correct Social Security/Taxpayer Identification Number and (ii) I am
not subject to backup withholding because the Internal Revenue Service (a)
has not notified me that I am subject to backup withholding as a result of
failure to report all interest or dividends, or (b) has notified me that I
am no longer subject to backup withholding (does not apply to real estate
transactions, mortgage interest paid, the acquisition or abandonment of
secured property, contributions to an individual retirement arrangement
[403(b)(7)], and payments other than interest and dividends).
Certification Instructions-You must cross out item (b) above if you have
been notified by the IRS that you are currently subject to backup
withholding because of underreporting of interest or dividends on your tax
return.
[ ] Exempt from Backup Withholding (i.e. exempt entity as described in the
prospectus)
[ ] Nonresident alien [Form(s) W-8 attached]
Your Signature Date / /
------------------------------------------- --- --- ---
- --------------------------------------------------------------------------------
6. BROKER/DEALER INFORMATION:
Name of Broker/Dealer Firm
-------------------------------------------------
Branch Address
-------------------------------------------------------------
Rep. Name and Number
-------------------------------------------------------
Rep. Signature
-------------------------------------------------------------
Rep. Telephone
----------------------
12 [AIM LOGO APPEARS HERE] A I M Distributors, Inc.
<PAGE>
403(b) PLAN [AIM LOGO APPEARS HERE]
ASSET-TRANSFER FORM
To move assets from another 403(b) custodian to AIM.
Use this form only when transferring assets from an existing 403(b)
(account # __________) to an AIM 403(b) (account # __________).
If you do not already have an AIM 403(b), you must also submit a 403(b)
Application. AIM will arrange the transfer for you.
- --------------------------------------------------------------------------------
1. INVESTOR INFORMATION (please print)
Name
-----------------------------------------------------------------------
Address
--------------------------------------------------------------------
City State Zip
----------------------------------- ----------- -----------
Social Security Number Daytime Telephone
----------------- ----------------
- --------------------------------------------------------------------------------
2. CURRENT CUSTODIAN
Name of Resigning Trustee Account Number
--------------- -------------------
Address of Resigning Trustee
-----------------------------------------------
City State Zip
----------------------------------- ----------- -----------
Attention Telephone
------------------------------ -------------------------
- --------------------------------------------------------------------------------
3. 403(b) ACCOUNT INFORMATION
Please deposit proceeds in my
[ ] existing [ ] new*
<TABLE>
<CAPTION>
EQUITY FUNDS $ OR % OF ASSETS CLASS OF SHARES (CHECK ONE)
<S> <C> <C>
AIM Blue Chip Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Capital Development Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Charter Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Global Aggressive Growth Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Global Growth Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Constellation Fund $ [ ] Class A
-------------------------------
AIM Growth Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM International Equity Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Global Utilities Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Value Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Weingarten Fund $ [ ] Class A [ ] Class B
-------------------------------
FIXED INCOME FUNDS CLASS OF SHARES (CHECK ONE)
AIM Balanced Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Global Income Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Intermediate Government Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM High Yield Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Income Fund $ [ ] Class A [ ] Class B
-------------------------------
AIM Limited Maturity Treasury Shares $ [ ] Class A
-------------------------------
MONEY MARKET FUNDS CLASS OF SHARES (CHECK ONE)
AIM Money Market Fund $ [ ] Class A [ ] Class B [ ] Class C
-------------------------------
Total $
-------------------------------
</TABLE>
If no class of shares is selected, Class A shares will be purchased, except
in the case of AIM Money Market Fund, where Class C Shares will be
purchased.
- --------------------------------------------------------------------------------
4. TRANSFER INSTRUCTIONS
To Resigning Trustee or Custodian:
Please liquidate [ ] all or [ ] part of the account(s) listed in Section 2
and transfer the proceeds to my 403(b) account with Boston Safe Deposit and
Trust Company.
13
<PAGE>
[ ] Partial amount to transfer $
-------------------
[ ] immediately [ ] at maturity ( / / )
---- ---- ----
[ ] Please transfer "In Kind" [ ] all [ ] part of the shares of the AIM
Fund held in my account to Boston Safe Deposit and Trust Company.
Percent of shares to transfer %
-----
- --------------------------------------------------------------------------------
5. AUTHORIZATION AND SIGNATURE
I have established a 403(b) account with the AIM Funds and have appointed
Boston Safe Deposit and Trust Company as the successor Custodian. Please
accept this as your authorization and instruction to liquidate or transfer
in kind the assets noted above, which your company holds for me.
Your Signature Date / /
------------------------------------ ---- ---- ----
Note: Your resigning trustee or custodian may require your signature to be
guaranteed. Call that institution for requirements.
Name of Bank or Firm
-------------------------------------------------------
Signature Guaranteed by
----------------------------------------------------
(Name & Title)
- --------------------------------------------------------------------------------
6. CUSTODIAN ACCEPTANCE
This is to advise you that Boston Safe Deposit and Trust Company, as
custodian, will accept the account identified above for:
Depositor's Name Account Number
------------------------------- ------------
This transfer of assets is to be executed from fiduciary to fiduciary and
will not place the participant in actual receipt of all or any of the plan
assets. No federal income tax is to be withheld from this transfer of
assets.
Authorized Signature
---------------------------------------------------
(Boston Safe Deposit and Trust Company)
Mailing Date / /
---- ---- ----
- --------------------------------------------------------------------------------
7. INSTRUCTIONS TO RESIGNING TRUSTEE OR CUSTODIAN
Please attach a copy of this form to the check. Indicate account number on
all documents. Return this completed form and completed 403(b) Application
to Boston Safe Deposit and Trust Company, c/o A I M Fund Services, Inc.,
P.O. Box 4399, Houston, TX 77210-4399. Phone: 800-959-4246.
- --------------------------------------------------------------------------------
8. DISTRIBUTION ELECTION INFORMATION
If this participant is age 70-1/2 or older this year, the resigning
Trustee/Custodian must complete this section. Election made by the
participant as of the required beginning date:
1. Method of calculation (check one): [ ] declining years
[ ] recalculation
2. Life expectancy (check one): [ ] single life payout
[ ] joint life payout*
3. The amount withheld from this transfer to satisfy this year's required
distribution: $
-------------------
Were any previous distributions made to the participant this year?
[ ] No [ ] Yes $
------------------------------
The factor used to calculate this required payment was
---------------------
Name of Designated Beneficiary
--------------------------------------------
Relationship Date of Birth / /
------------------------------------ --- --- ---
Signature of Current Custodian/Trustee
-------------------------------------
[AIM LOGO APPEARS HERE] A I M Distributors, Inc.
14
<PAGE>
403(b) PLAN
EXCHANGE AND CONTRIBUTION CHANGE FORM [AIM LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
1. PARTICIPANT INFORMATION (PLEASE PRINT)
Employee Name
--------------------------------------------------------------
Social Security Number Account Number
---------------------- ---------------
Employer Name
--------------------------------------------------------------
- --------------------------------------------------------------------------------
2. FUND EXCHANGE
An AIM Fund exchange is the transfer of existing fund assets from one AIM
Fund to another AIM Fund. Please consult your investment adviser first.
Fund exchanges will not effect how your future 403(b) contributions are
invested. You must indicate under the 403(b) Contribution Section any
changes with respect to your future contribution.
From AIM Fund to AIM Fund Shares, or $ or %
---------- --------- ----- ---- ----
From AIM Fund to AIM Fund Shares, or $ or %
---------- --------- ----- ---- ----
- --------------------------------------------------------------------------------
3. 403(b) CONTRIBUTIONS
MARK BELOW THE STATEMENT THAT APPLIES
[ ] All future contributions are to be invested as previously indicated.
[ ] All future contributions (indicate % or dollar amount) are to be
invested as indicated below.
INVESTMENT SELECTION
I wish to change the investment of my future 403(b) contributions to the
AIM Funds listed below. This change is to be effective with the first
payroll contribution received following receipt of this form.
A. Fund %
--------------------------------- -----------------------
B. Fund %
--------------------------------- -----------------------
C. Fund %
--------------------------------- -----------------------
D. Fund %
--------------------------------- -----------------------
Total: 100%
Signature Date
--------------------------------------- ------------------
Please return the completed form to A I M Fund Services, Inc.,
Attn: Qualified Plan Services Department, P.O. Box 4399, Houston, TX
77210-4399. Phone: 800-959-4246.
If you have any questions, please call one of our Client Services
Representatives. Please retain a photocopy of this form for your records.
15 A I M Distributors, Inc.
<PAGE>
403(b) PLAN
AGREEMENT FOR SALARY DEFERRAL [AIM LOGO APPEARS HERE]
Use this form only if your employer does not supply you with its own form.
Submit this form to your employer.
[ ] Original Authorization
[ ] Amended Authorization
BY THIS AGREEMENT MADE BETWEEN
(the "Employee")
-----------------------------------------------------------
(Please Print)
and
(the "Employer")
-----------------------------------------------------------
the parties hereto agree as follows:
Effective with the paycheck dated ______________________________ , 19_____
(which date is subsequent to the date of execution of this Agreement), the
Employee's basic salary will be deferred by the amount indicated in item
(1) or (2) below, as designated by the Employee.
This Agreement shall be legally binding and irrevocable as to each of the
parties hereto while employment continues; provided, however, that either
party may terminate this Agreement by giving at least 30 days written
notice of the date of termination.
The amount of the Employee's salary deferral cannot exceed the Exclusion
Allowance under Section 403(b) of the Internal Revenue Code or the
limitations under Section 402(g) and 415 of the Internal Revenue Code.
The amount of the Employee's salary deferral will be: (select one)
1. $ per pay period beginning .
------------------- --------------------------
2. % of basic salary beginning .
------------------ -------------------------
It is understood that the amount of such salary deferral will be sent by
the Employer directly to A I M Fund Services, Inc., P.O. Box 4399, Houston,
Texas 77210-4399. Checks should be made payable to Boston Safe Deposit and
Trust Company. If your employer is requesting a billing from AIM, please
indicate this on the application.
Signed this day of , 19 .
---------------------- --------------------------- ----
Employee Signature
---------------------------------------------------------
Signed this day of , 19 .
---------------------- --------------------------- ----
Name of Employer
-----------------------------------------------------------
By
-------------------------------------------------------------------------
(Accepted)
Title
----------------------------------------------------------------------
17 A I M Distributors, Inc.
<PAGE>
403(b) PLAN
SALARY-DEFERRAL WORKSHEET [AIM LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
1. INSTRUCTIONS
Under current IRS rules, the maximum amount you may defer from your salary
is based upon a formula using a number of factors, including current
salary, years of service, type of employer, and plan contributions made on
your behalf in past years.
Simplified, the contribution to your 403(b) plan is the lesser of:
o Basic Exclusion Allowance
o 20% of your gross salary
o $9,500
It is important not to exceed the maximum permitted contribution in any tax
year. Excess contributions may be subject to federal taxes unless corrected
by April 15 of the tax year following the tax year for which the
contribution is made. Excess contributions, not corrected, are also subject
to a 6% non-deductible annual excise tax.
Please note that some employees of certain church organizations and
employees of more than one qualified organization are subject to somewhat
different limitations. Also, special "catch-up" provisions may permit you
to exceed the basic limits. If you think you may qualify for such special
treatment, consult your tax adviser for details.
The worksheet below will help you determine the amount you may defer.
However, you may be required to further reduce this amount if your employer
is making plan contributions in addition to your deferrals or you are
currently making salary-deferral contributions to other retirement plans.
You should keep this worksheet for your own records. Do not return it to
AIM.
- --------------------------------------------------------------------------------
2. WORKSHEET DEFINITIONS
Current Salary $ = Current annual salary (before
--------------- salary-deferral contributions)
Service Years = Years of service with current
--------------- employer (enter whole and fractional
years; however, if less than 1 year,
use "1" year).
Prior Contributions $ = All contributions (excluding this
--------------- year's salary deferrals) made by
your present employer to a pension
or profit sharing plan, state
teachers retirement plan,403(b)
plan, 457 deferred compensation
plan or SEP-IRA.
Prior Deferrals $ = All salary deferrals made to 403(b)
--------------- plans, including tax-sheltered
annuities, 457 plans (relating to
state deferred compensation plans),
SAR-SEP, and 401(k) plans on your
behalf by your present employer in
past years.
Current Deferrals $ = Your salary-deferral contributions
--------------- made in the current tax year. This
amount may be zero or the amount
deferred year to date.
- --------------------------------------------------------------------------------
3. BASIC EXCLUSION ALLOWANCE FOR SALARY DEFERRALS:
<TABLE>
<S> <C> <C>
a. $ x x .1667 = $
------------------------------------- --------------- ------------------------------
Current Salary Service Years
b. $ + $ = $
------------------------------------- ----------------------- ------------------------------
Prior Contributions Prior Deferrals
c. $ - $ = $
------------------------------------- ----------------------- ------------------------------
Total Line a Total Line b Basic Exclusion Allowance
d. $ x .20 = $
------------------------------------- ------------------------------
Current Salary Employer's Contribution Limit
e. $9,500 - = $
----------------------------- ------------------------------
Current Year's Salary Deferral Salary Deferral Limit
f. Your Basic Salary Deferral Limit is the lesser of c, d, or e = $
------------------------------
</TABLE>
19
<PAGE>
4. SPECIAL INCREASE IN DOLLAR LIMITATION:
This option is only available if you have at least 15 years of service with
the same qualified employer. This Special Increase in the Dollar Limitation
may permit you to exceed the $9,500 salary-deferral limit.
<TABLE>
<S> <C> <C>
g. ($5,000 x ) - $ = $
-------------------------- ------------------------ -----------------------------
Service Years Prior Deferrals
h. Total of Special Increase Dollars(1) used in prior years
under this option = $
-----------------------------
i. $15,000 - $ = $
------------------------ -----------------------------
Amount on Line h
j. Lesser of lines g or i or $3,000 = $
-----------------------------
k. $9,500 + = $
--------------------------- -----------------------------
Amount on Line j Special Deferral Limit
l. The maximum amount you can defer is the lesser of lines
c, d, or k = $
-----------------------------
</TABLE>
- --------------------------------------------------------------------------------
5. "CATCH-UP" OPTIONS
Employees of a qualified organization(2) may elect to use one of three
special "catch-up" options to increase your 403(b) contribution. Each
option is irrevocable and once chosen, no other "catch-up" option may be
used in future years. However, an individual may choose to use the Basic
Exclusion Allowance in any year instead of the "catch-up" option. NOTE: The
"catch-up" options calculate the total amount your employer plus you may
contribute. Your salary deferral may not exceed $9,500 even if the total
"catch-up" amount is greater than $9,500.
<TABLE>
<CAPTION>
OPTION A-May be elected only in the year in which the participant separates
from service.
<S> <C>
m. Amount on line c, recalculated using steps a, b, c based on
only the last 10 years of service = $
------------------------------
n. The option's limit is the lesser of line m or $30,000
(Your salary-deferral contribution is limited to $9,500.) = $
------------------------------
OPTION B-May be elected in any year of service.
o. Amount on line c = $
------------------------------
p. $3,200 + $ = $
---------------------- ------------------------------
Total Line d
q. Option b overall limit = $ $15,000
------------------------------
r. The maximum contribution under this option is the lesser
of line o, p or q
(Your salary-deferral contribution is limited to $9,500.) = $
------------------------------
OPTION C-May be elected in any year of service.
s. x .20 = $
--------------------------- ------------------------------
Current Salary
t. The maximum contribution under this option is the lesser
of line s, or $30,000
(Your salary-deferral contribution is limited to $9,500.) = $
------------------------------
</TABLE>
(1) Special Increase in Dollar Limitation permits you an additional
lifetime contribution up to $15,000, not to exceed $3,000 extra in any one
year. Step h accounts for previous contributions made under this option.
(2) A "qualified organization" is an educational organization [described
in IRC Section 170(b)(1)(A)(ii)], hospital, home health service agency
[described in IRC Section 501(c)(3) and which has been determined by the
Secretary of Health, Education, and Welfare to be a home health agency, as
defined in Section 1861(o) of the Social Security Act], health and welfare
service agency, church or convention or association of churches [described
in IRC Section 414(e)] or an organization which is exempt from tax under
IRC Section 501 and which is controlled by or associated with a church or a
convention or association of churches.
You should review these calculations with your tax adviser. You may also
want to consult the Internal Revenue Service Publication 571 as an
additional source of information. The Custodian, its agent or the sponsor
of the AIM 403(b) Plan will not provide legal or tax advice, nor calculate
your 403(b) plan contributions.
20 [AIM LOGO APPEARS HERE] A I M Distributors, Inc.
<PAGE>
403(b)(7) PLAN
CUSTODIAL AGREEMENT
ARTICLE I. EFFECTIVE DATE
This AIM 403(b)(7) Custodial Agreement shall become effective on the date on
which the Custodian or its agent, A I M Distributors, Inc., receives
incorporated AIM 403(b)(7) Application executed by the Employee.
ARTICLE II. DEFINITIONS
2.01. ACCOUNT OR FUND(S) means the separate account or accounts established
and maintained by the Custodian for an Employee pursuant to this Agreement.
2.02. AGREEMENT OR AIM 403(b)(7) AGREEMENT means this document and the
Application.
2.03. AIM FUND(S) means any of the mutual funds which are distributed by
A I M Distributors, Inc. and are part of The AIM Family of Funds--Registered
Trademark--.
2.04. APPLICATION OR AIM 403(b)(7) APPLICATION means the document(s) which
established the Agreement and is (are) executed by the Employer, Employee and
Custodian.
2.05. BENEFICIARY means the person or persons (including entities) designated
by the Employee as entitled to receive the Account balance, if any, at the
Employee's death. If at the time of the Employee's death, no designated
Beneficiary is alive, Beneficiary shall mean the Employee's surviving spouse or,
if the Employee does not have a surviving spouse, the Employee's estate.
2.06. CODE means the Internal Revenue Code of 1986, as amended.
2.07. CONTRIBUTIONS shall mean Salary Reduction Contributions and/or Employer
Contributions.
2.08. CUSTODIAN means the party who executed the Application as Custodian,
and any successor thereto, provide that such successor is either a bank or
another person who satisfies the requirements of Code Section 401(f)(2).
2.09. DESIGNATION OF BENEFICIARY means a form executed and submitted to the
Custodian in accordance with the terms of Article IX.
2.10. DISABILITY means the inability of the Employee to engage in any
substantial gainful activity because of any medically determinable physical or
mental impairment which can be expected to result in death or to be of
long-continued and indefinite duration. The Employee shall not be considered to
be suffering from Disability until the Custodian has received certification from
the Employer to such effect.
2.11. DISTRIBUTOR means A I M Distributors, Inc. and any successor thereto.
2.12. EMPLOYEE means an individual who is employed by the Employer and who
has properly executed the Application.
2.13. EMPLOYER means the employer who is listed on the Application.
2.14. EMPLOYER CONTRIBUTIONS mean the amount, if any, transmitted by the
Employer to the Custodian for addition to the Employee's Account other than
Salary Reduction Contributions.
2.15. SALARY REDUCTION CONTRIBUTION means the amount not included in the
Employee's compensation pursuant to a written salary reduction agreement and
transmitted by the Employer to the Custodian for addition to the Employee's
Account.
ARTICLE III. MAINTENANCE OF A CUSTODIAL ACCOUNT
3.01. SALARY REDUCTION CONTRIBUTIONS TO THE ACCOUNT. The Employee may make
Salary Reduction Contributions to the Account. Any salary reduction agreement
between the Employer and the Employee shall be effective only as to amounts
earned by the Employee after such agreement becomes effective. Each such
agreement shall be legally binding and irrevocable with respect to compensation
subsequently earned. A salary reduction agreement may be terminated by written
notice received at least 30 days prior to the date of termination. The Employer
and Employee shall not enter into more than one salary reduction agreement in
any one taxable year of the Employee.
3.02. TRANSFERS TO AND FROM THE ACCOUNT. All direct or indirect asset
transfers to an Account from an existing custodial account described in Code
Section 403(b)(7) or an annuity contract qualified under Code Section 403(b)(1)
shall be in cash unless the Custodian otherwise consents. Direct transfers into
an account may be accepted to the extent permitted by the Code. The Employee has
the right by proper written instruction to cause a transfer of cash or, if
agreed to by the Custodian, shares of AIM Fund(s) to another custodial account
described in Code Section 403(b)(7), an annuity contract qualified under Code
Section 403(b)(1), an individual retirement account described in Code Section
408(a) or an individual retirement annuity described in Code Section 408(b).
3.03. ROLLOVERS TO THE ACCOUNT. The Employee shall be permitted to make
rollover contributions to the Account of an amount received by the Employee that
is attributable to participation in another annuity or custodial account which
meets the requirements of Section 403(b) of the Code. Neither the Custodian nor
the Distributor shall have responsibility to ensure that contributions under
3.02 or 3.03 satisfy the applicable provisions of the Code.
3.04. EMPLOYER CONTRIBUTIONS. In addition to Salary Reduction Contributions,
the Employer may make a contribution to the Account on behalf of the Employee in
accordance with any retirement plan, fund or program for which the Employee is
eligible, subject to the limitations under 3.05.
3.05. CONTRIBUTION LIMITS.
(a) Unless the Employee has made a special election as described under
Section 415(c)(4) of the Code, the total amount of annual additions that may be
made to the Account on behalf of the Employee for any limitation year shall not
exceed the lesser of:
(i) $30,000 (or, if greater, one-fourth the defined benefit plan
dollar limitation in effect under Section 415(b)(1) of the Code for the
limitation year); or
(ii) 25 percent of the Employee's compensation (within the meaning of
Section 415(c)(3) of the Code) for the limitation year.
(b) For purposes of this subsection (a) above, the term "annual additions"
shall include contributions to the Account under 3.01 (pertaining to Salary
Reduction Contributions) for the limitation year.
(c) The term "limitation year" shall mean the calendar year, unless the
Employee elects to change the limitation year to another twelve-month period by
attaching a statement to his or her federal income tax return in accordance with
the regulations under Section 415 of the Code. If the Employee is in control of
the Employer (within the meaning of Code Section 414(b) or (c), as modified by
Code Section 415(h)), the limitation year shall be the same as the limitation
year of the Employer under Section 415 of the Code.
(d) If the Employer or any affiliated employer as described in Section
415(h) of the Code makes contributions on behalf of the Employee to any other
annuity contract described in Section 403(b) of the Code, then the contributions
to such annuity contract shall be combined with the contributions to the Account
for purposes of the limitations of subsection (a) above.
3.06. LIMITATIONS ON SALARY REDUCTION CONTRIBUTIONS. For any taxable year
beginning after December 31, 1986, Salary Reduction Contributions shall not
exceed the amount of $9,500, as adjusted in accordance with Code Section
402(g)(4), or such greater amount as may be permitted with respect to the
Employee for the taxable year under Code Section 402(g)(8).
ARTICLE IV. INVESTMENT OF CONTRIBUTIONS
4.01. PURCHASE OF SHARES. As soon as is practical after the Custodian
receives a Contribution, it shall invest such Contribution in shares of the
designated AIM Fund(s).
4.02. REPORTS AND VOTING OF SECURITIES. The Custodian shall deliver to
the Employee or, if applicable, his other Beneficiary, any notices,
prospectuses, financial statements, proxies and proxy solicitation materials
received by it with respect to investments made for the Employee's Account.
4.03. DIVIDEND. All capital gain distributions and dividends received on the
shares of the selected AIM Fund(s) shall be automatically reinvested in shares
of the Fund consistent with the Employee's investment instruction in effect on
the date such dividend or distribution is paid.
ARTICLE V. DISTRIBUTIONS AND WITHDRAWALS
5.01. INSTRUCTIONS TO CUSTODIAN. The Custodian shall not be responsible for
making any distributions until such time as it has been notified in writing by
the Employee to begin making distributions. No distribution will be made upon
the death of the Employee unless the Custodian has been notified in writing of
the Employee's death. The Custodian may require adequate verification of such
death. Distributions to the Employee (or, if applicable, his or her Beneficiary)
of amounts in the Account shall be made in cash and/or, if the Distributor
consents, in kind.
5.02. EMPLOYEE WITHDRAWALS.
(a) After Attainment of Age 59-1/2. At any time after the Employee attains
age 59-1/2, he or she may withdraw amounts from his or her Account by making
written instructions to the Custodian as to the amounts to be so withdrawn.
(b) Hardship Withdrawals. An Employee who has a financial hardship,
as determined by the Employer, and who has made all available withdrawals
pursuant to the paragraph above and pursuant to the provisions of any other
plans of the Employer and any related entities of which he is a member and who
has obtained all available loans pursuant to the provisions of any other plans
of the Employer and any related entities of which he or she is a member may
withdraw from his Account an amount not to exceed the lesser of the balance of
21
<PAGE>
his Account or the amount determined by the Employer as being available for
withdrawal pursuant to this paragraph. For purposes of this paragraph, financial
hardship means the immediate and heavy financial needs of the Employee. A
withdrawal based upon financial hardship pursuant to this paragraph shall not
exceed the amount required to meet the immediate financial need created by the
hardship and not reasonably available from other resources of the Employee. The
determination of the existence of an Employee's financial hardship and the
amount required to be distributed to meet the need created by the hardship shall
be made by the Employer. A withdrawal shall be deemed to be made on account of
an immediate and heavy financial need of an Employee if the withdrawal is on
account of:
(i) medical expenses described in Section 213(d) of the Code incurred by
the Employee, the Employee's spouse or any dependents of the Employee (as
defined in Section 152 of the Code);
(ii) purchase (excluding mortgage payments) of a principal residence of
the Employee;
(iii) payment of tuition for the next semester or quarter of
post-secondary education of the Employee, or the Employee's spouse, children or
dependents (as defined in Section 152 of the Code);
(iv) the need to prevent the eviction of the Employee from his principal
residence or foreclosure on the mortgage of the Employee's principal residence;
(v) such other financial needs which the Commissioner of Internal Revenue
may deem to be immediate and heavy financial needs through the publication of
revenue rulings, notices and other documents of general applicability; or
(vi) such other circumstances as the Employer determines, and certifies,
as an immediate and heavy financial need of the Employee in accordance with
applicable governmental regulations and procedures adopted by the Employer.
The decision of the Employer shall be final and binding, provided that all
Employees similarly situated shall be treated in a uniform and nondiscriminatory
manner. The above notwithstanding, (a) withdrawals under this paragraph from an
Employee's Account shall be limited to the sum of the Employee's Salary
Reduction Contributions to his Account, plus income allocable thereto and
credited to the Employee's Account as of December 31,1988, less any previous
withdrawals of such amounts. An Employee who makes a withdrawal under this
paragraph may not again make Salary Reduction Contributions or employee
contributions to the Account or to any other qualified or nonqualified plan of
the Employer or any related entity for a period of twelve months following such
withdrawal. Further, such Employee may not make Salary Reduction Contributions
to the Account or to any other plan maintained by the Employer or any related
entity for such Employee's taxable year immediately following the taxable year
of the withdrawal in excess of the applicable limit set forth in Section 402(g)
of the Code for such next taxable year less the amount of such Employee's Salary
Reduction Contributions for the taxable year of the withdrawal.All hardship
withdrawals shall be made by executing the Financial Hardship Form prescribed by
AIM Distributors and completed and signed by the Employer and filing such form
with AIM Distributors prior to the proposed date of withdrawal.
5.03. DISTRIBUTIONS AT SEPARATION FROM SERVICE. Unless the Employee otherwise
irrevocably elects in writing within 60 days after the Employee's separation
from service with the Employer, and the Custodian consents to such election,
distribution of the Account shall be made in a lump sum 90 days after the
Employee's separation from service. If the Employee makes such an election,
distribution of the Account shall not commence until the date specified in such
election unless the Employee earlier dies or becomes disabled as defined in this
Agreement.
If the Employee wishes to make such an irrevocable election, he or she may do
so by filing a written notice with the Custodian in a form acceptable to
the Custodian. The written notice to the Custodian shall list the date on which
distribution shall commence, the period over which distribution shall be made,
and amount(s) of each distribution. The Employee may not elect either (a) a date
for commencement of distribution which delays the commencement of distribution
from the Account beyond April 1 following the calendar year during which the
Employee attains age 70-1/2 or (b) a form of distribution which results in the
present value (determined at the time distribution commences) of payments to be
made to the Employee over the Employee's life expectancy (as determined under
Section 1.72-9 of the Treasury Regulations) equaling less than 50% of the
present value of the total payments to be made.
5.04. DISTRIBUTIONS AT THE EMPLOYEE'S DEATH. At the Employee's death, if such
Employee has not already specified the form of distribution, the Beneficiary (or
each beneficiary if there is more than one) may elect the form of distribution.
Such election, which will be irrevocable, must be in writing and provided to the
Custodian within 60 calendar days after the Custodian has received notification
of the Employee's death. If such an election is not made in the time provided,
distribution of the Account shall be made in a lump sum 90 days after the
Custodian receives notification of the Employee's death. Any form of
distribution must comply with the following requirements:
(a) Death While Receiving Distributions. If the Employee had already
begun to receive distributions from the Account and the Employee's spouse is not
the Beneficiary, the Account balance which remains at the time of the Employee's
death shall be distributed to the Beneficiary at least as rapidly as under the
distribution method being used at the time of the Employee's death.
(b) Death Prior to Receiving Distributions. If the Employee had not begun
to receive distributions at his or her death and the Employee's spouse is not
the Beneficiary, the entire Account balance which remains at the time of the
Employee's death shall be distributed to the Beneficiary either (i) within five
(5) years, or (ii) in installments over a period not exceeding the life
expectancy of the Beneficiary (as determined as of the date of the Employee's
death by using the return multiples contained in Section 1.72-9 of the Treasury
Regulations), provided that such distributions commence within one year after
the date of the Employee's death.
(c) Spousal Beneficiary. If the Employee's spouse is the Beneficiary,
regardless of whether distributions to the Employee have already commenced, this
Section 5.04 shall be applied to the spouse as though the spouse were the
Employee and, as though the spouse, as Employee, separated from service with the
Employer on the date of the Employee's death.
5.05. DISTRIBUTION UPON DISABILITY. If the Employee becomes disabled
as defined in this Agreement after his or her separation from service with the
Employer, he or she shall receive a lump sum distribution of the Account 90 days
after the date of such Disability unless, within 60 days after the date of such
Disability, the Employee elects another time for commencement and/or form of
distribution and the Custodian consents to such election. The Employee may not
elect either (a) a date for commencement of distribution which delays the
commencement of distribution from the Account beyond the first April 1 following
the calendar year during which the Employee attains age 70-1/2 or (b) a form of
distribution which results in the present value (determined at the time
distribution commences) of payments to be made to the Employee over the
Employee's life expectancy (as determined under Section 1.72-9 of the Treasury
Regulations) equaling less than 50% of the present value of the total payments
to be made.
5.06. DISTRIBUTION OF EXCESS DEFERRAL. Upon written notice to the Custodian
from the Employee, by the first March 1 following the close of the taxable year
of the Employee, that "excess deferrals" (as that term is defined in Code
Section 402(g)(2)(A)) have been made with respect to the Account for such
taxable year, the Custodian shall distribute to the Employee such "excess
deferrals" not later than the first April 15 following the close of such taxable
year. The Employer shall have sole responsibilities for determining such an
excess deferrals and timely notification to the Custodian.
5.07. DISTRIBUTION TO INCOMPETENTS. If a distribution is payable to a person
known by the Custodian to be a minor or a person under a legal disability, the
Custodian may, in its absolute discretion, make all or any part of the
distribution to (a) a parent of such person, (b) the guardian, committee or
other legal representative, wherever appointed, of such person, including a
custodian for such person under a Uniform Gifts to Minors Act or similar act,
(c) any person having the control and custody of such person, or (d) to such
person directly.
ARTICLE VI. CUSTODIAN
6.01. DUTIES. The Custodian shall:
(a) Receive transmitted Contributions;
(b) Provide safekeeping for the assets in the Account;
(c) Collect income;
(d) Execute orders for purchase, sale or exchange of shares of the AIM
Fund(s) and make settlements in accordance with general practice;
(e) Maintain records of all transactions in the Account;
(f) Transmit to each Employee, not less frequently than annually,
appropriate statements of the amount of the Custodian's compensation, if any,
charged to the Account;
(g) File with the Internal Revenue Service and/or any other government
agency such returns, reports, forms and other information as may be prescribed
as the responsibility of the Custodian in its capacity as Custodian by the
applicable statue and regulations thereunder; and
(h) Perform all other duties and services consistent with the purposes and
intentions of this Agreement.
The Custodian may perform any of its administrative duties through other persons
designated by the Custodian from time to time, including persons otherwise
unaffiliated with the Custodian.
6.02. SHARE REDEMPTIONS. If cash funds are required to pay taxes, fees, or
other expenses pursuant to Article VI or to make payments to the Employee or his
or her Beneficiary pursuant to Article V, the Employee (or Beneficiary, if
applicable) shall redeem shares of the AIM Fund(s) held in the Employee's
Account.
6.03. LIMITATIONS ON LIABILITIES AND DUTIES.
(a) The Custodian shall be fully protected in acting or omitting to take
any action in reliance upon any document, order or other direction believed by
the Custodian to be genuine and properly given. Conversely, the Custodian shall
22
<PAGE>
be fully protected in acting or omitting to take any action in reliance on its
belief that any document, order or other direction either is not genuine or was
not properly given.
(b) To the extent permitted by law, 30 days after providing to the Employee
the statements required under Section 6.01(f), the Custodian shall be released
and discharged from all liability to the Employee or any third party as to the
matters contained in such statement unless the Employee files written objections
with the Custodian within such 30-day period.
(c) In no event shall the Custodian or Distributor be under a fiduciary
duty to the Employee in regard to the selection of investments or be liable for
any loss incurred on account of a selected investment.
(d) The Custodian and Distributor shall have no responsibility with regard
to the initial or continued qualification of the Account under Code Section
403(b)(7) or with regard to whether the Account or any Contributions
to the Account satisfy any applicable minimum participation, coverage or
nondiscrimination requirements under the Code.
(e) Neither the Custodian nor the Distributor shall be obligated to
determine the amount of any Contribution due or to collect any Contribution from
the Employee or Employer.
(f) Neither the Custodian nor the Distributor shall be held responsible for
determining the amount, character, or timing of any distribution to the
Employee.
(g) Neither the Custodian nor the Distributor shall have responsibility,
and the Employee shall have sole responsibility, with respect to the computation
of the Employee's "exclusion allowance" as defined in Code Section 403(b)(2),
any applicable limitation(s) on contributions under Code Section 402(g) and Code
Section 415(c), any election available to the Employee under Code Section 415,
or any matters relating to any tax consequences with respect to Contributions,
Account earnings, Account distributions, transfers or rollovers.
(h) The Custodian shall not be required to carry out any instructions not
given in accordance with this Agreement and neither the Custodian nor the
Distributor shall be liable for loss of income, or for appreciation or
depreciation in share value that shall result from the Custodian's failure to
follow instructions not given in accordance with this Agreement.
(i) If instructions are received that, in the opinion of the Custodian, are
unclear, neither the Custodian nor the Distributor shall be liable for loss of
income, or for appreciation or depreciation in share value during the period
preceding the Custodian's receipt of written clarification of the instructions.
(j) The Custodian shall have no responsibility to make any distribution or
process any withdrawal by order of the Employee or Beneficiary unless and until
the requisite written instructions specify the occasion for such action and the
Custodian is furnished with any and all applications, certificates, tax waivers,
signature guarantees and other documents (including proof of any legal
representative's authority) deemed necessary or advisable by the Custodian.
(k) The Custodian shall neither assume nor have any duty of inquiry about
any matter arising under the Plan.
(l) Neither the Custodian nor the Distributor shall have any liability to
the Employee or Beneficiary for any tax penalty or other damages resulting from
any inadvertent failure by the Custodian to make a distribution under this
Agreement.
(m) Neither the Custodian nor the Distributor shall be liable for interest
on temporary cash balances, if any, maintained in the Account.
(n) To the extent permitted by law, the Employee shall always fully
indemnify the Custodian and hold it harmless from any and all liability
whatsoever which may arise either (i) in connection with this Agreement and
matter which it contemplates (except that which arises due to the Custodian's
gross negligence or willful misconduct) or (ii) with respect to making or
failing to make distribution, other than for failure to make distribution in
accordance with instructions therefore which are in full compliance with both
Article IX and this Section 6.03.
(o) Except as required by law, the Custodian shall not be obligated or
expected to commence or to defend a legal action or proceeding in connection
with this Agreement, unless the Custodian and the Employer agree that the
Custodian will defend a given legal action and the Custodian is fully
indemnified for so doing to its satisfaction.
(p) In no event shall the Employee, Employer, or Distributor have any
responsibility or liability for any acts or omissions of the Custodian (or its
agents or designees) hereunder.
6.04. COMPENSATION. In consideration for its services hereunder, the
Custodian shall be entitled to receive the applicable fees specified in its then
current fee schedule, if any. The Custodian may substitute a revised fee
schedule from time to time upon 30 days' written notice to the Employer or
Employee. The Custodian shall be entitled to such reasonable additional fees as
it may from time to time determine for services required of it and not clearly
identified on the fee schedule.
6.05. RESIGNATION AND REMOVAL. The Custodian may resign at any time
by giving at least 30 days' written notice to the Employer or Employee. The
Distributor may remove the Custodian hereunder by giving at least 30 days'
written notice to the Custodian. In each case, the Distributor shall designate a
successor custodian qualified pursuant to Section 2.07 hereof, which successor
custodian shall accept such appointment by a writing to be submitted to the
Employer or Employee and the Custodian.
On the effective date of its resignation or removal, the Custodian shall
transfer to the designated successor custodian the assets and records (or copies
thereof) of the Account provided, however, that the Custodian may retain
whatever assets it deems necessary for payment of its fees, costs, expenses,
compensation and any other liabilities which constitute a charge on or against
the assets of the Account or on or against the Custodian.
ARTICLE VII. FEES, TAXES AND OTHER EXPENSES
Any income taxes or other taxes of any kind whatsoever that may be levied
or assessed upon or in respect of the Account (including any transfer taxes
incurred in connection with the investment and reinvestment of Account assets),
expenses, fees and administrative costs incurred by the Custodian in the
performance of its duties (including fees for legal services rendered to the
Custodian), and the Custodian's compensation as determined under Section 6.04,
if any, shall constitute a charge upon the assets of the Account. At the
Custodian's option, such fee, tax or expense shall be paid from the Account or
directly by the Employee.
ARTICLE VIII. PROTECTION OF EMPLOYEE BENEFITS
At no time shall any part of the Account be used for purposes other than for
the exclusive benefit of the Employee. The Employee's rights to Contributions
shall be nonforfeitable at all times after such Contributions are transferred to
the Custodian.
ARTICLE IX. BENEFICIARY DESIGNATION
Each Employee may submit to the Custodian a properly executed written
Designation of Beneficiary acceptable to the Custodian who will receive any
undistributed assets held in the Account at the time of the Employee's death.
Any such Designation of Beneficiary shall not be effective unless it is filed
during the Employee's lifetime with the Custodian at the Custodian's home
office. Whether or not fully dispositive of the Account, the most recently filed
Designation of Beneficiary accepted by the Custodian shall be controlling and
all previously filed designations shall be considered superseded and shall have
no effect. To the extent that the Account is not fully disposed of at the time
of the Employee's death, it shall go to the Employee's surviving spouse, if any;
otherwise, to the Employee's estate. If a Beneficiary dies while receiving
distributions, the portion of the Account to which the Beneficiary would have
been entitled (had he or she survived) shall be paid to the Beneficiary's
beneficiary or beneficiaries (or if impossible, to the Beneficiary's estate) in
a lump sum within 90 days after the Custodian receives notification of the
Beneficiary's death.
ARTICLE X. AMENDMENT
10.01. BY THE DISTRIBUTOR. The Distributor may amend this Agreement in
its entirety or any portion thereof. The Distributor shall provide copies of
such amendment to the Employer and/or Employee. Neither this Section nor any
other portion of this agreement shall impose on the Distributor an affirmative
obligation to amend the Agreement.
10.02. LIMITATIONS. No amendment shall be made:
(a) Which would cause or permit any part of the Account to be diverted to
purposes other than for the exclusive benefit of the Employee and/or his or her
Beneficiary, or cause or permit any portion of such assets to revert to or
become the property of the Employer;
(b) Without the written consent of the Custodian; or
(c) Which would retroactively deprive any Employee of any benefit to which
he or she was entitled under the Agreement, unless such amendment is necessary,
in the opinion of counsel, to conform the Agreement to, or satisfy the
conditions of, Code Section 403(b), any other law, or any Governmental
regulation or ruling, provided that this prohibition shall not be construed to
prohibit prospective amendment of the Agreement (including prospective amendment
to eliminate a benefit) where such prospective amendment is permitted by law.
ARTICLE XI. TERMINATION
11.01. AUTOMATIC TERMINATION ON DISTRIBUTION. This Agreement shall terminate
when all the assets held in the Account established hereunder have been
distributed or otherwise transferred out of the Account.
11.02. TERMINATION ON DISQUALIFICATION. This Agreement shall terminate if,
after notification by the Internal Revenue Service that the Employee's Account
does not qualify under Code Section 403(b)(7), the Employer and/or Distributor
do not make the amendments necessary to so qualify the Account. On such
23
<PAGE>
termination of this Agreement, the Custodian shall distribute in cash or in
kind, to the Employee or, in the event of the Employee's death, to the
Beneficiary, subject to the Custodian's right to reserve funds as provided in
Section 6.05.
ARTICLE XII. LOANS
12.01. LOAN APPLICATION AND CONDITIONS. The Custodian may make a loan to an
Employee from the Employee's Account upon the Custodian's receipt of the
Employee's written application in a form acceptable to the Custodian, provided
the following conditions are satisfied:
(i) each loan shall satisfy rules adopted by the Custodian regarding the
minimum and maximum loan amounts permitted, which rules may be changed at any
time, provided, however, that in no event shall the total of all outstanding
loans to any Employee exceed the lesser of $50,000 (reduced by the highest
outstanding balance of loans from Account during the one year period ending the
day before the day on which such loan is made), or 50% of the balance in the
Employee's Account;
(ii) each loan shall be evidenced by the Employee's execution of a personal
demand note on a form supplied or approved by the Custodian, and each note shall
specify a reasonable rate of interest as determined by the Custodian and shall
require that the loan be repaid by the Employee in approximately equal
installments (not less frequently than quarterly) over a specified period of
time not exceeding five years;
(iii) each loan shall be secured by the Employee's Account balance.
12.02. DEFAULT. If the Employee dies or fails to pay any installment of the
loan when due, the unpaid balance of the loan shall become immediately due and
payable. The Employee may satisfy the loan by paying the outstanding balance of
the loan within such time as may be specified in the note and according to rules
adopted by the Custodian. If the loan and interest are not repaid within the
time specified, the Custodian shall treat the unpaid balance as a deemed
distribution from the Employee's Account, and shall offset the unpaid balance
before making any distribution payment otherwise due under this Agreement to the
Employee or his Beneficiary.
If an Employee does not repay any portion of the principal amount of a loan
within the required term, the Employee shall continue to be liable for the
unpaid balance of the loan including interest owed on principal payments not
made.
12.03. RULES OF ADMINISTRATION. The Custodian shall adopt such rules as from
time to time it deems proper under this Article XII (including, but not limited
to rules regarding maximum and minimum amounts of loans, and permitted number of
loans outstanding) which rules shall be applied on a uniform and
non-discriminatory basis. The Custodian reserves the right to charge an
administrative fee for processing and maintaining loans.
ARTICLE XIII. MISCELLANEOUS
13.01. APPLICABLE LAW. To the extent not preempted by Federal law, this
Agreement shall be construed and administered in accordance with the laws of the
state in which the home office of the Custodian is located. No provision of this
Agreement shall be construed to conflict with any provision of an Internal
Revenue Service regulation, ruling or order affecting the status of this
Agreement under Code Section 403(b)(7).
13.02. EMPLOYER'S SIGNATURE. If the Employer does not sign the Application
and is not required to do so under the Code and the regulations thereunder, the
Employee, to the extent allowed by law, assumes all obligations and
responsibilities of the Employer under this Agreement.
13.03. CHANGE OF ADDRESS. The Employer or if permitted by the Custodian, the
Employee, shall notify the Custodian in writing of any change of address within
30 days of such change.
13.04. NOTICE. Any notice from the Custodian to the Employee pursuant to this
Agreement shall be effective when sent by U.S. Mail to the address of record of
the Employer or Employee. Any notice to the Custodian pursuant to this Agreement
shall be by first class mail addressed to its home of office.
13.05. SUCCESSORS. This Agreement shall be binding upon and shall inure
to the benefit of the successors in interest of the parties hereto.
13.06. CONSTRUCTION. It is intended that this Agreement, together with the
other documents that compose the 403(b)(7) arrangement pursuant to which the
Employee's funds are invested under this Agreement, qualify as a custodial
account under Code Section 403(b)(7). This Agreement shall be construed and
limited by applicable laws, and the powers and discretions conferred hereunder
shall be exercised in a manner consistent with that purpose. Subject to the
foregoing provisions of this Section 12.06, in the event of any conflict between
these Articles I through XII and the documents incorporated in this Agreement by
reference, the provisions of these Articles I through Xll shall prevail.
13.07. SEPARABILITY. If any provision of this Agreement shall be held invalid
or illegal for any reason, such determination shall not affect any remaining
provisions of this Agreement, but this Agreement shall be construed and enforced
as if such invalid or illegal provision had never been included in this
Agreement.
13.08. STATUTORY REQUIREMENTS. In the event any applicable state or local
law, regulating or rule conflicts with and/or supplements the terms of this
Agreement, such law, regulation or rule shall be deemed to supersede and/or
supplement the terms of this Agreement, provided that the Distributor and the
Custodian receive written notice of such law, regulation or rule.
13.09. RETIREMENT PLAN PROVISIONS SHALL CONTROL. In the event Contributions
are being made to the Account pursuant to any retirement plan or program
sponsored by the Employer, to the extent any provisions of this Agreement are
inconsistent with such retirement plan or program, the provisions of the
Employer's retirement plan or program shall control, provided:
(a) such provisions are not contrary to the rules and regulations under
Section 403(b)(7) of the Code; and
(b) such provisions do not impose any additional responsibilities or
duties on the Custodian without its prior written consent. The Employer shall be
responsible for delivering the most recent copy of any such retirement plan or
program to the Custodian.
13.10. ERISA REQUIREMENTS. If the Agreement is determined to constitute part
of an "employee benefit plan" established or maintained by the Employer within
the meaning of Title I of the Employee Retirement Income Security Act of 1974,
as amended, then the Employer shall have sole responsibility and be solely
responsible for ensuring that such employee benefit plan complies at all times
within such law, including, but not limited to, any reporting and disclosure
requirement thereunder.
13.11. PLAN ADMINISTRATION. Absent a separate written agreement to the
contrary, neither the Custodian nor the Distributor shall be considered the plan
administrator for any purpose under the Code or the Employee Retirement Income
Security Act of 1974, as amended.
24
<PAGE>
AIM 403(b) PLAN
LOAN PROVISION TERMS AND CONDITIONS
Please retain for your records
AMOUNT
o The maximum loan amount is the lesser of:
50% of your AIM 403 (b) Plan Employee account balance or $50,000 (reduced
by the highest outstanding loan balance in past 12 months).
o The minimum loan amount is $1,000.
o Each account may have no more than one outstanding loan at any time.
o Contact our Customer Service department at 1 (800) 949-4246 ext. 5222
for details.
o Loans are not available for AIM B Shares
LOAN DURATION
The maximum loan duration is five years. The AIM 403(b) Plan does not provide
an extended loan term for the purchase of a principal residence.(1)
RATE OF INTEREST
The interest rate shall be based on the prime rate plus one point as quoted in
The Wall Street Journal on the first business day of the month in which the loan
is granted.
AUTOMATIC REPAYMENT METHOD
If you choose this method, loan payments will be deducted directly from your
checking account on or about the twenty-fifth (25th) of each month, starting on
the second month following the issuance of the loan check. Repayments (principal
and interest) are applied to the particular fund from which the loan was
granted or the fund currently selected to receive repayments. IF A LOAN IS FROM
MORE THAN ONE FUND, THE LOAN REPAYMENTS MUST BE MADE TO ONE PREDESIGNATED AIM
FUND ONLY. (Repayments will not be accepted through payroll deductions.)
COUPON REPAYMENT METHOD
If this method is chosen, A I M Fund Services, Inc. (with its affiliates,
referred to in this agreement as "AIM") will provide you with a repayment
coupon booklet that specifies your monthly payment schedule for the duration of
the loan. You will be responsible for mailing your loan repayments and the
coupon stub directly to AIM. Payments must be received by the 25th of each
month, starting on the second month following the issuance of the loan check.
(continued)
[AIM LOGO APPEARS HERE]
<PAGE>
AIM 403(b) PLAN
LOAN PROVISION TERMS AND CONDITIONS
Please retain for your records
LOAN APPLICATION FEE
If you choose the Automatic Repayment Method, there is a $50 application fee.
If you choose the Coupon Repayment Method, the application fee is $100. The
application fees are non-refundable and must be paid by check (made payable to
A I M Fund Services, Inc.). The application fee must accompany the loan
application to initiate the loan process.
ANNUAL FEES
For the Automatic Repayment Method the annual fee is $25. The annual fee for
Coupon Repayment Method is $50. The annual fee is deducted directly from your
AIM 403(b) Plan account in early December and cannot be paid with a separate
check.
LOAN PROCESS
Participants wishing to exercise the AIM 403(b) Plan loan provision are required
to complete and sign the Loan Application, Promissory Note and Security
Agreement, Automatic Repayment Method Authorization Form (if applicable), and
Truth in Lending Disclosure Statement. When all documents are received in good
order, a check for the requested loan amount will be mailed to your address of
record within 10 business days.
REPAYMENT PROCEDURE
All loans must be repaid in monthly installments and within the lesser of five
years or by the time required distributions must begin at age 70 1/2 or before
all of the assets are transferred out of the account.
DEFAULT PROCEDURES
A default shall occur upon AIM's failure to receive two consecutive monthly
installments when due. In the event of default, AIM shall serve the Participant
with a written notice of default. Within fifteen (15) days of the date of such
notice, the Participant shall tender to AIM all outstanding principal and
interest payments due as of the date of the notice of default. If the
Participant fails to remit such amount, AIM may deem the outstanding principal
balance to be a distribution of the Participant's account and will generate a
Form 1099R in the amount of the deemed distribution at the end of the year.
PREPAYMENT
Loans may be prepaid at any time. There is no prepayment penalty. Please
contact a Qualified Plans Representative at 1-800-949-4246 ext. 5222 for your
pay-off amount.
SECURITY
As security for the payment of this note, the Participant hereby grants to AIM
a security interest in the Participant's account balance in the account.
IMPORTANT
AIM assumes no responsibility for current or future tax consequences resulting
from this transaction. Participants should consult their tax advisers for
information concerning their particular situations. Participants assume
responsibility for all tax consequences if monthly payments are not made on a
timely basis.
[AIM LOGO APPEARS HERE]
<PAGE>
AIM 403(b) PLAN
LOAN APPLICATION
Please complete this loan application and send it with your application fee to
the address below. Once received, AIM will return the necessary documentation
to begin the loan process. Please allow 3-4 weeks for AIM to secure the
necessary documentation and to complete the loan process.
I hereby submit to AIM this application to borrow funds from my AIM 403(b)
Plan account.
Date of Application AIM Account No.
------------------------ -------------------
Social Security Number Date of Birth
--------------------- ---------------------
Name
----------------------------------------------------------------------------
Address
-------------------------------------------------------------------------
City State Zip
--------------------------------------- ------------- -----------
Phone: Home ( ) Work ( )
-------------------------- ------------------------
Please write in the name of each AIM fund from which the loan will be
withdrawn:
AIM Fund $
------------------------------------------- ---------------------
AIM Fund $
------------------------------------------- ---------------------
AIM Fund $
------------------------------------------- ---------------------
AIM Fund $
------------------------------------------- ---------------------
Total MUST equal amount of loan $
---------------------
REPAYMENTS: My loan repayments are to be made to the AIM _______________ Fund.
(ONE fund only)
All provisions of the AIM 403(b) Plan Custodial Agreement, as amended from time
to time, are incorporated herein by reference. Applicant assumes responsibility
for all tax consequences. AIM assumes no responsibility for current or future
tax consequences resulting from this transaction. We suggest that you consult
your tax adviser for information concerning your particular situation.
X
-------------------------------------- ----------------------------------
Applicant's Signature Date
IMPORTANT: A check made payable to A I M FUND SERVICES, INC. for your
non-refundable application fee must accompany this application to initiate the
loan process.
My loan repayment method is: [ ] Automatic Repayment ($50 application fee) or
[ ] Coupon Repayment ($100 application fee)
A I M Fund Services, Inc., Attn: 403(b) Loan Applications, P.O. Box 4399,
Houston, TX 77210-4399
[AIM LOGO APPEARS HERE]
<PAGE>
AIM 403(b) PLAN
AUTOMATIC REPAYMENT METHOD AUTHORIZATION
The Automatic Repayment Method enables you to make monthly loan repayments via
bank drafts from your checking account. The bank drafts are an electronic
transfer of funds from your bank to AIM's bank through the National Automated
Clearing House Association (NACHA). Please verify whether your bank participates
in the National Automated Clearing House Association (NACHA) before submitting
this authorization. (If it does not, you must repay your loan by monthly check
and the loan application fee is $100.) As soon as your bank has accepted your
authorization, and only if your bank is a member of the National Automated
Clearing House Association (NACHA), the amount of each payment will be
electronically deducted from your checking account on, or about, the
twenty-fifth (25th) of each month, starting the second month following the
issuance of the loan check. The bank will process the Electronic Fund Transfer
and a debit entry will appear on your checking account statement.
Please complete this form to authorize AIM to have your loan repayments
deducted from your personal checking account. Attach a voided personal check
in the space provided below.
Make each of my pre-authorized loan payments for $___________ (amount of
monthly loan repayment), and invest into the:
AIM ____________________ Fund.
ATTACH YOUR VOIDED CHECK HERE.
------------------------------------------------------------------------
John Doe 000
123 Main St.
Anywhere, USA 12345
______________________________________ $_____________________
_________________________________________________________________
___________________________ ___________________________
------------------------------------------------------------------------
Name of Bank
----------------------------------------------------------------
Address of Bank Bank Phone #
------------------------------- --------------------
Bank Account # ABA Routing #
------------------------------- -------------------
Please honor drafts on my account by A I M Fund Services, Inc. ("AIM"). Your
authority to so do shall continue until you receive further notice from me
revoking this authority. You may terminate your participation in this
arrangement by written notice either to AIM or me. I agree that your rights
with respect to each draft shall be the same as if it were drawn by me. I
further agree that should any draft be dishonored, with or without cause,
intentionally or inadvertently, you shall be under no liability whatsoever.
<TABLE>
<S> <C>
- ---------------------------------------- -------------------------------------------------
Depositor's Name (please print) Signature (exactly as it appears on bank records)
-------------------------------------------------
Date
</TABLE>
Please complete and return to:
A I M Fund Services, Inc., P.O. Box 4399, Houston, TX 77210-4399
Phone 800-949-4246 ext. 5242
[AIM LOGO APPEARS HERE]
<PAGE>
EXHIBIT 14(e)
SIMPLE IRA APPLICATION [AIM LOGO APPEARS HERE]
Complete Sections 1 - 10
Employee: Return completed application to your employer.
Employer: Return completed applications and check to: A I M Fund Services, Inc.,
P. O. Box 4739, Houston, TX 77210-4739.
Phone: 800-959-4246. Minors cannot open an AIM SIMPLE IRA Account. Make check
payable to INVESCO Trust Company.
- --------------------------------------------------------------------------------
1 PARTICIPANT INFORMATION (Please print or type)
Name
----------------------------------------------------------------------
First Name Middle Last Name
Address
-----------------------------------------------------------------
Street City State ZIP Code
Social Security Number Birth Date / /
-------------------- ------ ------ ------
Month Day Year
Home Telephone ( ) Work Telephone ( )
---- ------------------ ---- -------------
- --------------------------------------------------------------------------------
2 EMPLOYER INFORMATION (Please print or type)
Name Contact Person
--------------------------------------- ---------------
Address
-------------------------------------------------------------------
Street City State ZIP Code
Phone ( )
---- ------------------------
- --------------------------------------------------------------------------------
3 DEALER INFORMATION (To be completed by registered securities dealer)
Name of Broker/Dealer Firm
------------------------------------------------
Home Office Address
-------------------------------------------------------
Representative Name and Number
---------------------------------------------
Authorized Signature of Dealer
---------------------------------------------
Branch Address
------------------------------------------------------------
Branch Phone Number ( )
--------- ------------------------
/ / Authorized for NAV purchase (If authorized for NAV purchase, other
than the Broker, please attach NAV Certification Form)
- --------------------------------------------------------------------------------
4 ACCOUNT INFORMATION
Date of Initial Deposit / /
------ ------ ------
Month Day Year
Contribution Type:
/ / Elective Deferral
/ / Employer Contribution
/ / Rollover from SIMPLE IRA
/ / Transfer from SIMPLE IRA
11
<PAGE>
5 FUND INVESTMENT
Indicate Fund(s) and contribution amount(s). MAKE CHECK PAYABLE TO INVESCO
TRUST COMPANY (ITC)
<TABLE>
Fund Amount of Investment Class of Shares (check one)
<S> <C> <C> <C> <C>
/ / AIM Advisor Flex Fund $_________________ / / A Shares (522) / / C Shares (322)
/ / AIM Advisor Income Fund _________________ / / A Shares (521) / / C Shares (321)
/ / AIM Advisor International Value Fund _________________ / / A Shares (526) / / C Shares (326)
/ / AIM Advisor Large Cap Value Fund _________________ / / A Shares (520) / / C Shares (320)
/ / AIM Advisor MultiFlex Fund _________________ / / A Shares (524) / / C Shares (324)
/ / AIM Advisor Real Estate Fund _________________ / / A Shares (525) / / C Shares (325)
/ / AIM Aggressive Growth Fund _________________ Fund Currently Closed To New Investors (407)
/ / AIM Blue Chip Fund _________________ / / A Shares (515) / / B Shares (615) / / C Shares (315)
/ / AIM Capital Development Fund _________________ / / A Shares (514) / / B Shares (614) / / C Shares (314)
/ / AIM Constellation Fund _________________ / / A Shares (002) / / B Shares (602) / / C Shares (302)
/ / AIM Limited Maturity Treasury Fund _________________ Only "A Shares" Available (007)
/ / AIM Balanced Fund _________________ / / A Shares (006) / / B Shares (685) / / C Shares (306)
/ / AIM Charter Fund _________________ / / A Shares (010) / / B Shares (645) / / C Shares (310)
/ / AIM Global Aggressive Growth Fund _________________ / / A Shares (081) / / B Shares (691) / / C Shares (381)
/ / AIM Global Growth Fund _________________ / / A Shares (082) / / B Shares (692) / / C Shares (382)
/ / AIM Global Income Fund _________________ / / A Shares (083) / / B Shares (693) / / C Shares (383)
/ / AIM Global Utilities Fund _________________ / / A Shares (408) / / B Shares (655) / / C Shares (308)
/ / AIM Growth Fund _________________ / / A Shares (406) / / B Shares (650) / / C Shares (350)
/ / AIM High Yield Fund _________________ / / A Shares (425) / / B Shares (675) / / C Shares (375)
/ / AIM Income Fund _________________ / / A Shares (402) / / B Shares (665) / / C Shares (365)
/ / AIM Intermediate Government Fund _________________ / / A Shares (404) / / B Shares (660) / / C Shares (360)
/ / AIM International Equity Fund _________________ / / A Shares (016) / / B Shares (694) / / C Shares (316)
/ / AIM Money Market Fund _________________ / / A Shares (401) / / B Shares (680) / / C Shares (380)
/ / AIM Cash Reserve Shares (421)
/ / AIM Value Fund _________________ / / A Shares (405) / / B Shares (690) / / C Shares (305)
/ / AIM Weingarten Fund _________________ / / A Shares (001) / / B Shares (640) / / C Shares (301)
Total $_________________
</TABLE>
(Please note that if no class of shares is selected, Class A shares will be
purchased with the exception of the AIM Money Market Fund where AIM Cash
Reserve Shares will be purchased.)
- --------------------------------------------------------------------------------
6 TELEPHONE EXCHANGE PRIVILEGE
Unless indicated below, I authorize A I M Fund Services, Inc., to accept
instructions from any person to exchange shares in my account(s) by
telephone in accordance with the procedures and conditions set forth in the
AIM Fund's current prospectus.
/ / I DO NOT want the Telephone Exchange Privilege.
- --------------------------------------------------------------------------------
7 REDUCED SALES CHARGE (Optional)
Right of Accumulation (This option is for Class A shares only.) I apply for
Right of Accumulation reduced sales charges based on the following accounts
in The AIM Family of Funds-Registered Trademark-:
<TABLE>
<S> <C>
Fund(s)/Account No(s). Social Security No(s).
-------------- --------------
-------------- --------------
-------------- --------------
</TABLE>
LETTER OF INTENT
I agree to the Letter of Intent provisions in the prospectus. I plan to
invest during a 13-month period a dollar amount of at least:
/ / $25,000 / / $50,000 / / $100,000 / / $250,000
/ / $500,000 / / $1,000,000
12
<PAGE>
8 BENEFICIARY INFORMATION
I hereby designate the following beneficiary to receive the balance in my
SIMPLE IRA custodial account upon my death. To be effective, the
designation of beneficiary and any subsequent change in designation of
beneficiary must be filed with the Custodian prior to my death. The balance
of my account shall be distributed in equal amounts to the beneficiary(ies)
who survives me. If no beneficiary is designated or no designated
beneficiary or contingent beneficiary survives me, the balance in my IRA
will be distributed to the legal representatives of my estate. This
designation revokes any prior designations. I retain the right to revoke
this designation at any time. I hereby certify that there is no legal
impediment to the designation of this beneficiary.
PRIMARY BENEFICIARY(IES)
Name % Relationship
------------------------------ ----- -----------------
Address
--------------------------------------------------------------------
Street City State ZIP Code
Beneficiary's Social Security Number Birth Date / /
--------------- ----- --- ----
Month Day Year
Name % Relationship
------------------------------ ----- -----------------
Address
--------------------------------------------------------------------
Street City State ZIP Code
Beneficiary's Social Security Number Birth Date / /
--------------- ----- --- ----
Month Day Year
CONTINGENT BENEFICIARY
In the event that I die and no primary beneficiary listed above is alive,
distribute all Fund accounts in my SIMPLE IRA to the following contingent
beneficiary(ies) who survives me, in equal amounts. If more than on, please
attach a list.
Name % Relationship
------------------------------ ----- -----------------
Address
--------------------------------------------------------------------
Street City State ZIP Code
Beneficiary's Social Security Number Birth Date / /
--------------- ----- --- ----
Month Day Year
13
<PAGE>
9 AUTHORIZATION AND SIGNATURE
I hereby establish the A I M Distributors, Inc. SIMPLE Individual
Retirement Account appointing INVESCO Trust Company as Custodian. I have
received and read the current prospectus of the investment company(ies)
selected in this agreement and have read and understand the SIMPLE IRA
custodial agreement and disclosure statement and consent to the custodial
account fees as specified. I understand that a $10 annual AIM Fund SIMPLE
IRA Maintenance Fee will be deducted early in each December from my AIM
SIMPLE IRA.
WITHHOLDING INFORMATION (SUBSTITUTE FORM W-9)
Under the penalties of perjury I certify by signing this Application as
provided below that:
(1) The number shown in Section 1 of this Application is my correct Social
Security (or Tax Identification) Number, and
(2) I am not subject to backup withholding because (a) I am exempt from
backup withholding, (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as
a result of a failure to report all interest or dividends, (c) the IRS
has notified me that I am no longer subject to backup withholding.
(This paragraph (2) does not apply to real estate transactions,
mortgage interest paid, the acquisition or abandonment of secured
property, contributions to an individual retirement arrangement and
payments other than interest and dividends.)
YOU MUST CROSS OUT PARAGRAPH (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS
THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF
UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.
In addition, the Fund hereby incorporates by reference into this section of
the Application either the IRS instructions for Form W-9 or the substance
of those instructions whichever is included in the prospectus.
SIGNATURE PROVISIONS
I, THE UNDERSIGNED DEPOSITOR, HAVE READ AND UNDERSTAND THE FOREGOING
APPLICATION AND THE ATTACHED MATERIAL INCLUDED HEREIN BY REFERENCE. IN
ADDITION, I CERTIFY THAT THE INFORMATION WHICH I HAVE PROVIDED AND THE
INFORMATION WHICH IS INCLUDED WITHIN THE APPLICATION AND THE ATTACHED
MATERIAL INCLUDED HEREIN BY REFERENCE IS ACCURATE INCLUDING BUT NOT LIMITED
TO THE REPRESENTATIONS CONTAINED IN THE WITHHOLDING INFORMATION SECTION OF
THIS APPLICATION. [THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR
CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS
REQUIRED TO AVOID BACKUP WITHHOLDING.]
Dated / /
----- ----- -----
Month Day Year
Signature of SIMPLE IRA Shareholder
----------------------------------------
10 SERVICE ASSISTANCE
Our knowledgeable Client Service Representatives are available to assist
you between 7:30 a.m. and 5:30 p.m. Central time at 800-959-4246.
[AIM LOGO APPEARS HERE]
A I M Distributors, Inc. 12/97
14
<PAGE>
AIM SIMPLE IRA ASSET-TRANSFER FORM [AIM LOGO APPEARS HERE]
USE THIS FORM ONLY WHEN TRANSFERRING ASSETS FROM AN EXISTING SIMPLE IRA TO AN
AIM SIMPLE IRA.
Note: Use this form ONLY if you want AIM to request the money directly from
another custodian.
Complete Sections 1 - 5.
If you do not already have an AIM SIMPLE IRA, you must also submit an AIM SIMPLE
IRA Application. AIM will arrange the transfer for you.
- --------------------------------------------------------------------------------
1 INVESTOR INFORMATION (Please print or type.)
Name
----------------------------------------------------------------------
First Name Middle Last Name
Address
-----------------------------------------------------------------
Street
- --------------------------------------------------------------------------------
City State ZIP Code
Social Security Number Birth Date / /
-------------------- ------ ------ ------
Month Day Year
Home Telephone ( ) Work Telephone ( )
---- ------------------ ---- -------------
- --------------------------------------------------------------------------------
2 CURRENT TRUSTEE/CUSTODIAN
Name of Resigning Trustee
--------------------------------------------------
Account Number of Resigning Trustee
----------------------------------------
Address of Resigning Trustee
-----------------------------------------------
Street
- --------------------------------------------------------------------------------
City State ZIP Code
Attention Telephone
------------------------ ------------------------------
- --------------------------------------------------------------------------------
3 IRA ACCOUNT INFORMATION
Please deposit proceeds in my
/ / New*
/ / Existing AIM SIMPLE IRA Account Number
---------------------------
INVESTMENT ALLOCATION:
<TABLE>
<S> <C> <C>
Fund Name Class %
----------------------------- ------------------- --------
Fund Name Class %
----------------------------- ------------------- --------
Fund Name Class %
----------------------------- ------------------- --------
</TABLE>
*If this is a new AIM SIMPLE IRA account, you must attach a completed AIM
SIMPLE IRA Application. If no class of shares is selected, Class A shares
will be purchased, except in the case of AIM Money Market Fund, where AIM
Cash Reserve Shares will be purchased.
- --------------------------------------------------------------------------------
4 TRANSFER INSTRUCTIONS TO RESIGNING TRUSTEE OR CUSTODIAN
OPTION 1: Please liquidate from the account(s) listed in Section 2 and
issue a check in cash to my SIMPLE IRA with INVESCO Trust Company.
Amount to liquidate: / / All / / Partial amount of $
----------------
When to liquidate: / / Immediately / / At maturity / /
--- --- ---
OPTION 2: (If the account listed in Section 2 contains shares of an AIM
Fund, you may choose to transfer them "in kind.") Please deposit "in kind"
the shares of the AIM Fund held in my account to INVESCO Trust Company.
NOTE: ONLY AIM FUND SHARES MAY BE TRANSFERRED IN KIND. TO TRANSFER ALL
OTHER ASSETS, THEY MUST BE LIQUIDATED.
Amount to transfer "in kind": / / All / / Partial amount of shares
---------
15
<PAGE>
5 AUTHORIZATION AND SIGNATURE
I have established a SIMPLE IRA with the AIM Funds and have appointed
INVESCO Trust Company as the successor Custodian. Please accept this as
your authorization and instruction to liquidate or transfer in kind the
assets noted above, which your company holds for me.
Your Signature Date / /
---------------------------------- ---- ---- ----
Note: Your resigning trustee or custodian may require your signature to be
guaranteed. Call that institution for requirements.
Name of Bank or Brokerage Firm
---------------------------------------------
Signature Guaranteed by
---------------------------------------------------
(Name and title)
- --------------------------------------------------------------------------------
6 DISTRIBUTION ELECTION INFORMATION
SECTION 6 OF FORM TO BE COMPLETED BY PRIOR CUSTODIAN
If this participant is age 70 1/2 or older this year, the resigning
Trustee/Custodian must complete this section.
Election made by the participant as of the required beginning date:
1. Method of calculation / / declining years / / recalculation
/ / annuitization / / amortization
2. Life expectancy
/ / single life payout / / joint life expectancy factor-Joint birth
date and relationship
--------
3. The amount withheld from this rollover to satisfy this year's required
distribution $
------------------------------------------------------
The life-expectancy ages used to calculate this required payment was
---------------------------------------------------------------------------
Signature of Current Custodian/Trustee
------------------------------------
- --------------------------------------------------------------------------------
REMAINDER OF FORM TO BE COMPLETED BY AIM
7 CUSTODIAN ACCEPTANCE
This is to advise you that INVESCO Trust Company, as custodian, will accept
the account identified above for:
Depositor's Name Account Number
--------------------------- ---------------
This transfer of assets is to be executed from fiduciary to fiduciary and
will not place the participant in actual receipt of all or any of the plan
assets. No federal income tax is to be withheld from this transfer of
assets.
Authorized Signature /s/ Illegible Mailing Date / /
---------------------------- ---- ---- ----
(INVESCO Trust Company)
- --------------------------------------------------------------------------------
8 INSTRUCTIONS TO RESIGNING TRUSTEE OR CUSTODIAN
Please attach a copy of this form to the check and return to:
INVESCO Trust Company, c/o A I M Fund Services, Inc., P. O. Box 4739,
Houston, TX 77210-4739.
Make check payable to INVESCO Trust Company.
Indicate the AIM account number and the social security number of the
SIMPLE IRA holder on all documents.
[AIM LOGO APPEARS HERE]
A I M Distributors, Inc. 12/97
16
<PAGE>
SIMPLE INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT [AIM LOGO APPEARS HERE]
FORM 5305-SA (December 1996)
Department of the Treasury
Internal Revenue Service (under Sections 408(a) and 408(p) of the Internal
Revenue Code)
ARTICLE I
1.01 THE CUSTODIAN WILL ACCEPT CASH CONTRIBUTIONS made on behalf of the
participant by the participant's employer under the terms of a SIMPLE plan
described in section 408(p). In addition, the Custodian will accept transfers or
rollovers from other SIMPLE IRAs of the participant. No other contributions will
be accepted by the Custodian.
ARTICLE II
2.01 THE PARTICIPANT'S INTEREST in the balance in the custodial account is
nonforfeitable.
ARTICLE III
3.01 NO PART OF THE CUSTODIAL ACCOUNT MAY BE INVESTED IN LIFE INSURANCE
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
3.02 NO PART OF THE CUSTODIAL ACCOUNT MAY BE INVESTED IN COLLECTIBLES
(within the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3), which provides an exception for certain gold and silver coins and
coins issued under the laws of any state.
ARTICLE IV
4.01 NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT to the contrary, the
distribution of the participant's interest in the custodial account shall be
made in accordance with the following requirements and shall otherwise comply
with section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section
1.401(a)(9)-2, the provisions of which are herein incorporated by reference.
4.02 UNLESS OTHERWISE ELECTED by the time distributions are required to
begin to the participant under paragraph 3, or to the surviving spouse under
paragraph 4, other than in the case of a life annuity, life expectancies shall
be recalculated annually. Such election shall be irrevocable as to the
participant and the surviving spouse and shall apply to all subsequent years.
The life expectancy of a nonspouse beneficiary may not be recalculated.
4.03 THE PARTICIPANT'S ENTIRE INTEREST IN THE CUSTODIAL ACCOUNT must be, or
begin to be, distributed by the participant's required beginning date (April 1
following the calendar year-end in which the participant reaches age 70 1/2). By
that date, the participant may elect, in a manner acceptable to the Custodian,
to have the balance in the custodial account distributed in:
(a) A single-sum payment.
(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the participant.
(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last survivor lives of
the participant and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified
period that may not be longer than the participant's life expectancy.
(e) Equal or substantially equal annual payments over a specified
period that may not be longer than the joint life and last survivor expectancy
of the participant and his or her designated beneficiary.
4.04 IF THE PARTICIPANT DIES before his or her entire interest is
distributed to him or her, the entire remaining interest will be distributed as
follows:
(a) If the participant dies on or after distribution of his or her
interest has begun, distribution must continue to be made in accordance with
paragraph 3.
(b) If the participant dies before distribution of his or her interest
has begun, the entire remaining interest will, at the election of the
participant or, if the participant has not so elected, at the election of the
beneficiary or beneficiaries, either
(i) Be distributed by the December 31 of the year containing the
fifth anniversary of the participant's death, or
(ii) Be distributed in equal or substantially equal payments over
the life or life expectancy of the designated beneficiary or beneficiaries
starting by December 31 of the year following the year of the participant's
death. If, however, the beneficiary is the participant's surviving spouse, then
this distribution is not required to begin before December 31 of the year in
which the participant would have reached age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has irrevocably
commenced, distributions are treated as having begun on the participant's
required beginning date, even though payments may actually have been made before
that date.
(d) If the participant dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in the
account.
4.05 IN THE CASE OF A DISTRIBUTION OVER LIFE EXPECTANCY in equal or
substantially equal annual payments, to determine the minimum annual payment for
each year, divide the participant's entire interest in the custodial account as
of the close of business on December 31 of the preceding year by the life
expectancy of the participant (or the joint life and last survivor expectancy of
the participant and the participant's designated beneficiary, or the life
expectancy of the designated beneficiary, whichever applies). In the case of
distributions under paragraph 3, determine the initial life expectancy (or joint
life and last survivor expectancy) using the attained ages of the participant
and designated beneficiary as of their birthdays in the year the participant
reaches age 70 1/2. In the case of a distribution in accordance with section
404(b)(ii), determine life expectancy using the attained age of the designated
beneficiary as of the beneficiary's birthday in the year distributions are
required to commence.
4.06 THE OWNER OF TWO OR MORE INDIVIDUAL RETIREMENT ACCOUNTS may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
ARTICLE V
5.01 THE PARTICIPANT AGREES TO PROVIDE THE CUSTODIAN with information
necessary for the Custodian to prepare any reports required under sections
408(i) and 408(l)(2) and Regulations section 1.408-5 and 1.408-6.
5.02 THE CUSTODIAN AGREES TO SUBMIT REPORTS to the Internal Revenue Service
and the participant as prescribed by the Internal Revenue Service.
5.03 THE CUSTODIAN ALSO AGREES TO PROVIDE THE PARTICIPANT'S EMPLOYER the
summary description described in section 408(l)(2) unless this SIMPLE IRA is a
transfer SIMPLE lRA.
ARTICLE VI
6.01 NOTWITHSTANDING ANY OTHER ARTICLES which may be added or incorporated,
the provisions of Articles I through III and this sentence will be controlling.
Any additional articles that are not consistent with sections 408(a) and 408(p)
and related regulations will be invalid.
ARTICLE VII
7.01 THIS AGREEMENT WILL BE AMENDED from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear below.
ARTICLE VIII
8.01 APPLICABLE LAW: This Custodial Agreement shall be governed by the laws
of the state where the Trust resides.
8.02 ANNUAL ACCOUNTING: The Custodian shall, at least annually, provide the
Participant or Beneficiary (in the case of death) with an accounting of such
Participant's account. Such accounting shall be deemed to be accepted by the
Participant, if the Participant or Beneficiary does not object in writing within
60 days after the mailing of such accounting statement.
8.03 AMENDMENT: The Participant irrevocably delegates to the Custodian the
right and power to amend this Custodial Agreement. Except as hereafter provided,
the Custodian will give the Participant 30 days prior written notice of any
amendment. In case of a retroactive amendment required by law, the Custodian
will provide written notice to the Participant of the amendment within 30 days
after the amendment is made or, if later, by the time that notice of the
amendment is required to be given under regulations or other guidance provided
by the IRS. The Participant shall be deemed to have consented to any such
amendment unless the Participant notifies the Custodian to the contrary within
30 days after notice to the Participant and requests a distribution or transfer
of the balance in the account.
17
<PAGE>
8.04 RESIGNATION AND REMOVAL OF CUSTODIAN:
(a) The Custodian may resign at any time by giving at least 30 days
notice to the Participant. The Custodian may resign and appoint a successor
trustee or custodian to serve under this agreement or under another governing
instrument selected by the successor trustee or custodian by giving the
Participant written notice at least 30 days prior to the effective date of such
resignation and appointment, which notice shall also include a copy of such
other governing instrument, if applicable, and the related disclosure statement.
The Participant shall then have 30 days from the date of such notice to either
request a complete distribution of the account balance or designate a different
successor trustee or custodian. If the Participant does not request distribution
of the account or designate a different successor within such 30 days, the
Participant shall be deemed to have consented to the appointment of the
successor trustee or custodian and the terms of any new governing instrument,
and neither the Participant nor the successor shall be required to execute any
written document to complete the transfer of the account to the successor
trustee or custodian. The successor trustee or custodian may rely on any
information, including beneficiary designations, previously provided by the
Participant.
(b) The Participant may at any time remove the Custodian and replace
the Custodian with a successor trustee or custodian of the Participant's choice
by giving 30 days written notice to the Custodian. In such event, the Custodian
shall then deliver the assets of the account as directed by the Participant.
However, the Custodian may retain a portion of the assets of the SIMPLE IRA as a
reserve for payment of any anticipated remaining fees and expenses, and shall
pay over any remainder of this reserve to the successor trustee or custodian
upon satisfaction of such fees and expenses.
8.05 CUSTODIAN'S FEES AND EXPENSES:
(a) This Section 8.05 of the Custodial Agreement shall be governed by
the requirements of Section 408(p)(7) and IRS Notice 97-6, Section J, and is
further explained in the accompanying SIMPLE IRA Disclosure Statement.
(b) The Participant agrees to pay the Custodian any and all fees
specified in the Custodian's current published fee schedule for establishing and
maintaining this SIMPLE IRA, including any fees for distributions from,
transfers from, and terminations of this SIMPLE IRA. The Custodian may change
its fee schedule at any time by giving the Participant 30 days prior written
notice.
(c) The Participant agrees to pay any expenses incurred by the
Custodian in the performance of its duties in connection with the account. Such
expenses include, but are not limited to, administrative expenses, such as legal
and accounting fees, and any taxes of any kind whatsoever that may be levied or
assessed with respect to such account.
(d) All such fees, taxes, and other administrative expenses charged to
the account shall be collected either from the assets in the account or from any
contributions to or distributions from such account if not paid by the
Participant, but the Participant shall be responsible for any deficiency.
(e) In the event that for any reason the Custodian is not certain as
to who is entitled to receive all or part of the custodial account, the
Custodian reserves the right to withhold any payment from the custodial account,
to request a court ruling to determine the disposition of the custodial assets,
and to charge the custodial account for any expenses incurred in obtaining such
legal determination.
8.06 WITHDRAWAL REQUESTS: All requests for withdrawal shall be in writing
on the form provided by the Custodian. Such written notice must also contain the
reason for the withdrawal and the method of distribution being requested.
8.07 AGE 70 1/2 DEFAULT PROVISIONS:
(a) Unless the Custodian (or the Participant, if the Custodian
permits) elects otherwise, life expectancies for purposes of calculating the
required minimum distribution shall not be recalculated.
(b) If the Participant does not choose any of the distribution methods
under Section 4.03 of this Custodial Agreement by April 1st following the
calendar year in which he/she reaches age 70 1/2, distribution shall be made to
the Participant based on such Participant's single life expectancy.
8.08 DEATH BENEFIT DEFAULT PROVISIONS: Unless the Custodian (or the
Beneficiary, if the Custodian permits) elects otherwise, life expectancies for
purposes of calculating the required minimum death distribution shall not be
recalculated. If the Participant dies before his or her required beginning date
and the beneficiary does not select a method of distribution described in
section 4.04(b)(i) or (ii) by December 31st following the year of death, then
distributions will be made pursuant to proposed regulation 1.401(a)(9)-1.
8.09 INVESTMENT PROVISIONS: Pursuant to IRS Notice 97-6, Q&A J-4, if the
Custodian is the Designated Financial Institution (DFI) and the Participant
timely elects that his or her balance be transferred without cost or penalty to
another SIMPLE IRA in accordance with the provisions described in the
accompanying SIMPLE IRA Disclosure Statement, the Custodian reserves the right
to restrict the participant's choice of investment alternatives as determined by
the Custodian.
8.10 RESPONSIBILITIES: Participant agrees that all information and
instructions given to the Custodian by the Participant is complete and accurate
and that the Custodian shall not be responsible for any incomplete or inaccurate
information provided by the Participant or Participant's beneficiary(ies).
Participant agrees to be responsible for all tax consequences arising from
contributions to and distributions from this Custodial Account and acknowledges
that no tax advice has been provided by the Custodian.
8.11 DESIGNATION OF BENEFICIARY: Except as may be otherwise required by
State law, in the event of the Participant's death, the balance in the account
shall be paid to the beneficiary or beneficiaries designated by the Participant
on a beneficiary designation acceptable to and filed with the Custodian. The
Participant may change the Participant's beneficiary or beneficiaries at any
time by filing a new beneficiary designation with the Custodian. If no
beneficiary designation is in effect, if none of the named beneficiaries survive
the Participant, or if the Custodian cannot locate any of the named
beneficiaries after reasonable search, any balance in the account will be
payable to the Participant's estate.
ARTICLE IX
SELF-DIRECTED SIMPLE IRA PROVISIONS
9.01 INVESTMENT OF CONTRIBUTIONS: At the direction of the Participant, the
Custodian shall invest all contributions to the account and earnings thereon in
investments acceptable to the Custodian, which may include marketable securities
traded on a recognized exchange or "over the counter" (excluding any securities
issued by the Custodian), covered call options, certificates of deposit, and
other investments to which the Custodian consents, in such amounts as are
specifically selected and specified by Participant in orders to the Custodian in
such form as may be acceptable to the Custodian, without any duty to diversify
and without regard to whether such property is authorized by the laws of any
jurisdiction as a trust investment. The Custodian shall be responsible for the
execution of such orders and for maintaining adequate records thereof. However,
if any such orders are not received as required, or, if received, are unclear in
the opinion of the Custodian, all or a portion of the contribution may be held
uninvested without liability for loss of income or appreciation, and without
liability for interest pending receipt of such orders or clarification, or the
contribution may be returned. The Custodian may, but need not, establish
programs under which cash deposits in excess of a minimum set by it will be
periodically and automatically invested in interest-bearing investment funds.
The Custodian shall have no duty other than to follow the written investment
directions of the Participant, and shall be under no duty to question said
instructions and shall not be liable for any investment losses sustained by the
Participant.
9.02 REGISTRATION: All assets of the account shall be registered in the
name of the Custodian or of a suitable nominee. The same nominee may be used
with respect to assets of other investors whether or not held under agreements
similar to this one or in any capacity whatsoever. However, each Participant's
account shall be separate and distinct; a separate account therefor shall be
maintained by the Custodian, and the assets thereof shall be held by the
Custodian in individual or bulk segregation either in the Custodian's vaults or
in depositories approved by the Securities and Exchange Commission under the
Securities Exchange Act of 1934.
9.03 INVESTMENT ADVISOR: The Participant may appoint an Investment Advisor,
qualified under Section 3(38) of the Employee Retirement Income Security Act of
1974, to direct the investment of his SIMPLE IRA. The Participant shall notify
the Custodian in writing of any such appointment by providing the Custodian a
copy of the instruments appointing the Investment Advisor and evidencing the
Investment Advisor's acceptance of such appointment, an acknowledgement by the
Investment Advisor that it is a fiduciary of the account, and a certificate
evidencing the Investment Advisor's current registration under the Investment
Advisor's Act of 1940. The Custodian shall comply with any investment directions
furnished to it by the Investment Advisor, unless and until it receives written
notification from the Participant that the Investment Advisor's appointment has
been terminated. The Custodian shall have no duty other than to follow the
written investment directions of such Investment Advisor and shall be under no
duty to question said instructions, and the Custodian shall not be liable for
any investment losses sustained by the Participant.
9.04 NO INVESTMENT ADVICE: The Custodian does not assume any responsibility
for rendering advice with respect to the investment and reinvestment of
Participant's account and shall not be liable for any loss which results from
Participant's exercise of control over his account. The Custodian and
Participant may specifically agree in writing that the Custodian shall render
such advice, but the Participant shall still have and exercise exclusive
responsibility for control over the investment of the assets of his account, and
the Custodian shall not have any duty to question his investment directives.
9.05 PROHIBITED TRANSACTIONS: Notwithstanding anything contained herein to
the contrary, the Custodian shall not lend any part of the corpus or income of
the account to; pay any compensation for personal services rendered to the
account to; make any part of its services available on a preferential basis to;
acquire for the account any property, other than cash, from; or sell any
property to, any Participant, any member of a Participant's family, or a
corporation con-
18
<PAGE>
trolled by any Participant through the ownership, directly or indirectly, of 50%
or more of the total combined voting power of all classes of stock entitled to
vote, or of 50% or more of the total value of shares of all classes of stock of
such corporation.
9.06 UNRELATED BUSINESS INCOME TAX: If the Participant directs investment
of the account in any investment which results in unrelated business taxable
income, it shall be the responsibility of the Participant to so advise the
Custodian and to provide the Custodian with all information necessary to prepare
and file any required returns or reports for the account. As the Custodian may
deem necessary, and at the Participant's expense, the Custodian may request a
taxpayer identification number for the account, file any returns, reports, and
applications for extension, and pay any taxes or estimated taxes owed with
respect to the account. The Custodian may retain suitable accountants,
attorneys, or other agents to assist it in performing such responsibilities.
9.07 DISCLOSURES AND VOTING: The Custodian shall deliver, or cause to be
executed and delivered, to Participant all notices, prospectuses, financial
statements, proxies and proxy soliciting materials relating to assets credited
to the account. The Custodian shall not vote any shares of stock or take any
other action, pursuant to such documents, with respect to such assets except
upon receipt by the Custodian of adequate written instructions from Participant.
9.08 MISCELLANEOUS EXPENSES: In addition to those expenses set out in
section 8.05 of this plan, the Participant agrees to pay any and all expenses
incurred by the Custodian in connection with the investment of the account,
including expenses of preparation and filing any returns and reports with regard
to unrelated business income, including taxes and estimated taxes, as well as
any transfer taxes incurred in connection with the investment or reinvestment of
the assets of the account.
9.09 NONBANK TRUSTEE PROVISION: If the Custodian is a nonbank trustee, the
Participant shall substitute another trustee or custodian in place of the
Custodian upon receipt of notice from the Commissioner of the Internal Revenue
Service or his delegate that such substitution is required because the Custodian
has failed to comply with the requirements of Income Tax Regulations Section
1.408-2(e), or is not keeping such records, making such returns, or rendering
such statements as are required by applicable law, regulations, or other
rulings. The successor trustee or custodian shall be a bank, insured credit
union, or other person satisfactory to the Secretary of the Treasury pursuant to
Section 408(a)(2) of the Code. Upon receipt by the Custodian of written
acceptance by its successor of such successor's appointment, Custodian shall
transfer and pay over to such successor the assets of the account (less amounts
retained pursuant to section 8.04 of the Custodial Agreement) and all records
(or copies thereof) of the Custodian pertaining thereto, provided that the
successor trustee or custodian agrees not to dispose of any such records without
the Custodian's consent.
- --------------------------------------------------------------------------------
GENERAL INSTRUCTIONS
Section references are to the Internal Revenue Code unless otherwise noted.
PURPOSE OF FORM
Form 5305-SA is a model custodial account agreement that meets the requirements
of sections 408(a) and 408(p) and has been automatically approved by the IRS. A
SIMPLE individual retirement account (SIMPLE IRA) is established after the form
is fully executed by both the individual (participant) and the Custodian. This
account must be created in the United States for the exclusive benefit of the
participant or his or her beneficiaries. Individuals may rely on regulations for
the Tax Reform Act of 1986 to the extent specified in those regulations. Do not
file Form 5305-SA with the IRS. Instead, keep it for your records.
For more information on SIMPLE IRAs, including the required disclosures the
Custodian must give the participant, get Pub. 590, Individual Retirement
Arrangements (IRAs).
DEFINITIONS
Participant - The participant is the person who establishes the custodial
account. Custodian - The Custodian must be a bank or savings and loan
association, as defined in section 408(n), or any person who has the approval of
the IRS to act as Custodian.
TRANSFER SIMPLE IRA
This SIMPLE IRA is a "transfer SIMPLE IRA" if it is not the original recipient
of contributions under any SIMPLE plan. The summary description requirements of
section 408(l)(2) do not apply to transfer SIMPLE IRAs.
SPECIFIC INSTRUCTIONS
Article IV - Distributions made under this article may be made in a single sum,
periodic payment, or a combination of both. The distribution option should be
reviewed in the year the participant reaches age 70 1/2 to ensure that the
requirements of section 408(a)(6) have been met.
Article VIII - Article VIII and any that follow it may incorporate additional
provisions that are agreed to by the participant and Custodian to complete the
agreement. They may include, for example, definitions, investment powers, voting
rights, exculpatory provisions, amendment and termination, removal of the
Custodian, Custodian's fees, state law requirements, beginning date of
distributions, accepting only cash, treatment of excess contributions,
prohibited transactions with the participant, etc. Use additional pages if
necessary and attach them to this form.
FINANCIAL DISCLOSURE
IN GENERAL: IRS regulations require the Custodian to provide you with a
financial projected growth of your SIMPLE IRA account based upon certain
assumptions.
GROWTH IN THE VALUE OF YOUR SIMPLE IRA: Growth in the value of your SIMPLE IRA
is neither guaranteed nor projected. The value of your SIMPLE IRA will be
computed by totaling the fair market value of the assets credited to your
account. At least once a year the Custodian will send you a written report
stating the current value of your SIMPLE IRA assets. The Custodian shall
disclose separately a description of:
(a) The type and amount of each charge;
(b) the method of computing and allocating earnings, and
(c) any portion of the contribution, if any, which may be used for the purchase
of life insurance.
CUSTODIAN FEES: The Custodian may charge reasonable fees or compensation for its
services and it may deduct all reasonable expenses incurred by it in the
administration of your SIMPLE IRA, including any legal, accounting,
distribution, transfer, termination or other designated fees. Any charges made
by the Custodian will be separately disclosed on an attachment hereto. Such fees
may be charged to you or directly to your custodial account. In addition,
depending on your choice of investment vehicles, you may incur brokerage
commissions attributable to the purchase or sale of assets.
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SIMPLE IRA DISCLOSURE STATEMENT [AIM LOGO APPEARS HERE]
RIGHT TO REVOKE YOUR SIMPLE IRA ACCOUNT: You may revoke your SIMPLE IRA within
seven days after you sign the SIMPLE IRA Plan Application by hand delivering or
mailing a written notice to the name and address indicated on the SIMPLE IRA
Plan Application. If you revoke your account by mailing a written notice, such
notice must be postmarked by the seventh day after you sign the Plan
Application. If you revoke your SIMPLE IRA within the seven-day period you will
receive a refund of the entire amount of your contributions to the SIMPLE IRA
without any adjustment for earnings or any administrative expenses. If you
exercise this revocation, we are still required to report certain information to
the IRS.
GENERAL REQUIREMENTS OF A SIMPLE IRA:
1. All SIMPLE contributions must be made in cash, unless you are making a
rollover contribution or transfer, and the Custodian accepts such noncash
assets.
2. The only types of contributions permitted to be made to this SIMPLE IRA are
salary reduction contributions and employer contributions under the
employer's SIMPLE Retirement Plan.
3. The Custodian of your SIMPLE IRA must be a bank, savings and loan
association, credit union or a person who is approved to act in such a
capacity by the Secretary of the Treasury.
4. No portion of your SIMPLE IRA funds may be invested in life insurance
contracts.
5. Your interest in your SIMPLE IRA must be fully vested and is nonforfeitable
at all times.
6. The assets in your SIMPLE IRA may not be commingled with other property
except in a common trust fund or common investment fund.
7. You may not invest the assets of your SIMPLE IRA in collectibles (as
described in Section 408(m) of the Internal Revenue Code.) A collectible is
defined as any work of art, rug or antique, metal or gem, stamp or coin,
alcoholic beverage, or any other tangible personal property specified by
the IRS. However, if the Custodian permits, specially minted U.S. Gold and
Silver bullion coins and certain state-issued coins are permissible SIMPLE
IRA investments.
8. Your interest in your SIMPLE IRA must begin to be distributed to you by the
April 1st following the calendar year you attain the age of 70 1/2. The
methods of distribution, election deadlines and other limitations are
described in detail below.
9. For purposes of the SIMPLE Plan rules, in the case of an individual who is
not a self-employed individual, compensation means the amount described in
section 6051(a)(3) which includes wages, tips and other compensation from
the employer subject to income tax withholding under section 3401(a), and
amounts described in section 6051(a)(8), including elective contributions
made under a SIMPLE plan, and compensation deferred under a section 457
plan. In the case of a self-employed individual, compensation means net
earnings from self-employment determined under section 1402(a), prior to
subtracting any contributions made under the SIMPLE plan on behalf of the
individual.
10. Contributions to a SIMPLE IRA are excludible from federal income tax and
not subject to federal income tax withholding when made to the SIMPLE IRA.
Salary reduction contributions are subject to FICA, FUTA or RRTA tax when
made and must be reported on the employee's Form W-2 wage statement.
Matching and nonelective employer contributions made to a SIMPLE IRA are
not subject to FICA, FUTA or RRTA and are not required to be reported on
Form W-2.
11. A SIMPLE IRA must be established by or on behalf of an employee prior to
the first date by which a contribution is required to be deposited into the
SIMPLE IRA.
ELIGIBLE EMPLOYEES: Under a SIMPLE Retirement Plan established by an Eligible
Employer, all employees of the employer who received at least $5,000 in
compensation from the employer during any two preceding calendar years, whether
or not consecutive, and who are reasonably expected to receive at least $5,000
in compensation during the calendar year, must be eligible to participate in the
SIMPLE Plan for the calendar year. An employer may impose less restrictive
eligibility requirements, such as eliminating or reducing the prior year
compensation requirements, the current year compensation requirement, or both,
under its SIMPLE Plan.
An employer, at its option, may exclude from eligibility employees who are
included in a unit of employees covered by an agreement that the Secretary of
Labor finds to be a collective bargaining agreement between employee
representatives and one or more employers, if there is evidence that retirement
benefits were the subject of good faith bargaining between such employee
representatives and such employer or employers; in the case of a trust
established or maintained pursuant to an agreement that the Secretary of Labor
finds to be a collective bargaining agreement between air pilots represented in
accordance with Title II of the Railway Labor Act and one or more employees, all
employees not covered by that agreement; and employees who are nonresident
aliens and who received no earned income from the employer that constitutes
income from sources within the United States.
PARTICIPATION IN ANOTHER PLAN: An eligible employee may participate in an
employer's SIMPLE Plan, even if he or she also participates in a plan of a
different employer for the same year. However, the employee's salary reduction
contributions are subject to the limitation of section 402(g), which provides an
aggregate limit on the exclusion for elective deferrals for any individual.
Also, an eligible employee who participates in an employer's SIMPLE plan and an
eligible deferred compensation plan described in section 457(b) is subject to
the limitation described in section 457(c). The employee is responsible for
monitoring compliance with these limitations.
ELIGIBLE EMPLOYERS: SIMPLE plans may be established by employers (including
tax-exempt employers and governmental entities) that had no more than 100
employees who earned $5,000 or more in compensation during the preceding
calendar year. For purposes of the 100-employee limitation, all employees
employed at any time during the calendar year are taken into account, regardless
of whether they are eligible to participate in the SIMPLE plan. This means that
otherwise excludible employees (i.e., certain union employees, nonresident
aliens with no U.S.-source income, and those employees who have not met the
plan's minimum eligibility requirements) must be taken into account.
SIMPLE PLAN CONTRIBUTIONS:
ELECTIVE DEFERRALS (SALARY REDUCTION CONTRIBUTIONS) - A salary reduction
contribution is a contribution made pursuant to an employee's election to have
an amount contributed to his or her SIMPLE IRA, rather than have the amount paid
directly to the employee in cash. An eligible employee must be permitted to
elect to have salary reduction contributions made at the level specified by the
employee, expressed as a percentage of compensation for the year or as a
specific dollar amount. The maximum salary reduction contribution per calendar
year may not exceed $6,000, subject to cost of living adjustments. Salary
reduction contributions may not begin until the eligible employee completes a
form provided by the employer designed to permit the employee to elect the
salary reduction percentage or specific dollar amount. An employer may not place
any restrictions on the amount of an employee's salary reduction contributions
(e.g., by limiting the contribution percentage), except to the extent needed to
comply with the annual limit.
EMPLOYER CONTRIBUTIONS - TWO OPTIONS
1. MATCHING CONTRIBUTIONS: Under a SIMPLE plan, an employer is generally
required to make a contribution on behalf of each eligible employee in an amount
equal to the employee's salary reduction contributions, up to a limit of 3% of
the employee's compensation for the entire calendar year.
The 3% limit on matching contributions is permitted to be reduced for a
calendar year at the election of the employer, but only if: the limit is not
reduced below 1%; the limit is not reduced for more than two years out of the
five-year period that ends with and includes the year for which the election is
effective; and employees are notified of the reduced limit within a reasonable
period of time before the 60-day election period during which employees can
enter into salary reduction agreements as described below.
In determining whether the limit was reduced below 3% for a year, any year
before the first year in which an employer (or a predecessor employer) maintains
a SIMPLE plan will be treated as a year for which the limit was 3%. If an
employer chooses to make nonelective contributions for a year in lieu of
matching contributions, that year also will be treated as a year for which the
limit was 3%.
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2. NONELECTIVE CONTRIBUTIONS: Under a SIMPLE plan, an employer may make
nonelective contributions in lieu of matching contributions. These nonelective
contributions must be equal to 2% of each eligible employee's compensation for
the entire calendar year, regardless of whether the employee elects to make
salary reduction contributions for the calendar year. The employer may, but is
not required to, limit nonelective contributions to eligible employees who have
at least $5,000 (or some lower amount selected by the employer) of compensation
for the year. For purposes of this 2% nonelective contribution only, the
compensation taken into account must be limited to the amount of compensation
under section 401(a)(17) for the year. For 1997, this limit is $160,000 and will
be adjusted in accordance with the cost of living.
An employer may substitute the 2% nonelective contribution for the matching
contribution for a year only if eligible employees are notified within a
reasonable period of time before the 60-day election period during which
employees can enter into salary reduction agreements that a 2% nonelective
contribution will be made instead of a matching contribution.
EMPLOYEE ELECTIONS: During the 60-day period immediately preceding January 1st
of a calendar year (i.e., November 2 to December 31 of the preceding calendar
year), an eligible employee must be given the right to enter into a salary
reduction agreement for the calendar year, or to modify a prior agreement
(including reducing the amount subject to this agreement to $0). However, for
the year in which the employee becomes eligible to make salary reduction
contributions, the period during which the employee may enter into a salary
reduction agreement or modify a prior agreement is a 60-day period that includes
either the date the employee becomes eligible or the day before that date. For
example, if an employer establishes a SIMPLE plan effective as of July 1, 1997,
each eligible employee becomes eligible to make salary reduction contributions
on that date and the 60-day period must begin no later than July 1 and cannot
end before June 30, 1997.
During these 60-day periods, employees have the right to modify their salary
reduction agreements without restrictions. In addition, for the year in which an
employee becomes eligible to make salary reduction contributions, the employee
must be able to commence these contributions as soon as the employee becomes
eligible, regardless of whether the 60-day period has ended. An employer may,
but is not required to, provide additional opportunities or longer periods for
permitting eligible employees to enter into salary reduction agreements or to
modify prior agreements.
An employee must be given the right to terminate a salary reduction agreement
for a calendar year at any time during the year even if this is outside a SIMPLE
plan's normal election period. The employer's SIMPLE plan may, however, provide
that an employee who terminates a salary reduction agreement at any time other
than the normal election period is not eligible to resume participation until
the beginning of the next calendar year.
EMPLOYER ADMINISTRATIVE AND NOTIFICATION REQUIREMENTS: An employer must notify
each employee, immediately before the employee's 60-day election period, of the
employee's opportunity to enter into a salary reduction agreement or to modify a
prior agreement. If applicable, this notification must disclose an employee's
ability to select the financial institution that will serve as the trustee or
custodian of the employee's SIMPLE IRA. Such notification must also include the
Summary Description required under section 408(l)(2)(B). Such notification must
also include whether the employer will be making either matching contributions
(including the employer's election to reduce the matching contribution below 3%)
or nonelective contributions as previously described.
If an eligible employee who is entitled to a contribution under the
employer's SIMPLE plan is unwilling or unable to establish a SIMPLE IRA with any
financial institution prior to the date on which the contribution is required to
be made to the SIMPLE IRA of the employee, the employer may execute the
necessary SIMPLE IRA documents on the employee's behalf with a financial
institution selected by the employer.
The employer must deliver the salary reduction contributions to the financial
institution maintaining the SIMPLE IRA as of the earliest date on which the
contributions can reasonably be segregated from the employer's general assets,
but no later than the close of the 30-day period following the last day of the
month in which amounts would otherwise have been payable to the employee in
cash.
Matching and nonelective employer contributions must be made to the financial
institution maintaining the SIMPLE IRA no later than the due date for filing the
employer's income tax return, including extensions, for the taxable year that
includes the last day of the calendar year for which the contributions are made.
ROLLOVERS:
ROLLOVER CONTRIBUTIONS FROM ANOTHER SIMPLE IRA - A rollover contribution to this
SIMPLE IRA is only permitted from another SIMPLE IRA. A rollover contribution
from another SIMPLE IRA is any amount the participant receives from one SIMPLE
IRA and redeposits some or all of it into this SIMPLE IRA. The participant is
not required to roll over the entire amount received from the first SIMPLE IRA.
However, any amount you do not roll over will be taxed at ordinary income tax
rates for federal income tax purposes and may also be subject to an additional
tax if the distribution is a premature distribution described below.
ROLLOVER DISTRIBUTIONS FROM A SIMPLE IRA - A distribution from any SIMPLE IRA
may be rolled over only to another SIMPLE IRA during the two-year period the
participant first participated in the employer's SIMPLE plan. Thus, a
distribution from a SIMPLE IRA during that two-year period qualifies as a
rollover contribution (and is not includible in gross income of the participant)
only if the distribution is paid into another SIMPLE IRA and satisfies the other
requirements that apply to all IRA rollovers under section 408(d)(3). SIMPLE
IRAs may never be rolled into an employer's plan, such as a qualified plan or
section 403(b) plan. After this two-year period, a distribution from a SIMPLE
IRA may be rolled over to any IRA maintained by the individual. This two-year
period begins on the first day on which contributions made by the individual's
employer are deposited in the individual's SIMPLE IRA.
SPECIAL RULES THAT APPLY TO ROLLOVERS -
o The rollover must be completed no later than the 60th day after the day the
distribution was received by you.
o You may have only one IRA-to-IRA rollover during a 12-consecutive-month
period measured from the date you received a distribution of an IRA which
was rolled over to another IRA. (See IRS Publication 590 for more
information.)
o The same property you receive in a distribution must be the same property
you roll over into the second IRA. For example, if you receive a
distribution from an IRA of property, such as stocks, that same stock must
be rolled over into the second IRA.
o You are required to make an irrevocable election indicating that this
transaction will be treated as a rollover contribution.
o You are not required to receive a complete distribution from your IRA in
order to make a rollover contribution into another IRA, nor are you
required to roll over the entire amount you received from the first IRA.
o If you inherit an IRA due to the death of the participant, you may not roll
this IRA into your own IRA unless you are the spouse of the decedent.
o If you are age 70 1/2 or older and wish to roll over to another IRA, you
must first satisfy the minimum distribution requirement for that year and
then the rollover of the remaining amount may be made.
o Rollover contributions to a SIMPLE IRA may not be made from a qualified
plan, 403(b) plan, or any other IRA that is not a SIMPLE IRA.
EXCESS DEFERRALS: Excess elective deferrals (amounts in excess of the $6,000
SIMPLE elective deferral limit) are includible in your gross income in the
calendar year of deferral. Income on the excess elective deferrals is includible
in your income in the year of withdrawal from the SIMPLE IRA. You should
withdraw excess elective deferrals and any allocable income, from your SIMPLE
IRA by April 15 following the year to which the deferrals relate. These amounts
may not be transferred or rolled over tax-free to another SIMPLE IRA. If you
fail to withdraw excess elective deferrals, and any allocable income, by the
following April 15th, the excess elective deferrals will be subject to the IRA
contribution limitations of sections 219 and 408 of the Code and thus may be
considered an excess contribution to your IRA. Such excess deferrals may be
subject to a 6% excise tax for each year they remain in your SIMPLE IRA. Income
on excess elective deferrals is includible in your gross income in the year you
withdraw it from your IRA and must be withdrawn by April 15 following the
calendar year to which the deferrals relate. Income withdrawn from the IRA after
that date may be subject to a 10% tax (or 25% if withdrawn within the first two
years of participation) on early distributions. The rules for determining and
allocating income attributable to excess elective deferrals and other excess
SIMPLE contributions are the same as those governing regular IRA excess
contributions. The trustee or custodian of your SIMPLE IRA will inform you of
the income allocable to such excess amounts.
DISTRIBUTIONS: In general, all distributions from a SIMPLE IRA are subject to
federal income tax by the payee or distributee, whichever the case may be. When
you start withdrawing from your SIMPLE IRA, you may take the distributions in
regular payments, random withdrawals or in a single-sum payment. Generally, all
amounts distributed to you from your SIMPLE IRA are included in your gross
income in the taxable year in which they are received. However, if you have made
nondeductible contributions to any regular IRA as permitted under section
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408(o) of the Code, the nontaxable portion of the distribution, if any, will be
a percentage based upon the ratio of your unrecovered nondeductible
contributions to the aggregate of all IRA balances, including SEP, SIMPLE and
rollover contributions, as of the end of the year in which you take the
distribution, plus distributions from the account during the year. All taxable
distributions from your SIMPLE IRA are taxed at ordinary income tax rates for
federal income tax purposes and are not eligible for either capital gains
treatment or 5/10 year averaging. An employer may not require an employee to
retain any portion of the contribution in the SIMPLE IRA or otherwise impose any
withdrawal restrictions.
PREMATURE DISTRIBUTIONS - In general, if you are under age 59 1/2 and receive
a distribution from your SIMPLE IRA account, a 10% additional income tax will
apply to the taxable portion of the distribution, unless the distribution is
received due to death; disability; a series of substantially equal periodic
payments at least annually over your life expectancy or the joint life
expectancy of you and your designated beneficiary; medical expenses that exceed
7.5% of your adjusted gross income; health insurance premiums paid by certain
unemployed individuals; a qualifying rollover distribution; or the timely
withdrawal of an excess deferral plus income attributable. If you request a
distribution in the form of a series of substantially equal payments, and you
modify the payments before five years have elapsed and before attaining age 59
1/2, the 10% additional income tax will apply retroactively to the year payments
began through the year of such modification. In addition, if you request a
distribution from your SIMPLE IRA within your first two years of participation
in the SIMPLE plan and none of the exceptions listed above applies to the
distribution, the normal 10% additional income tax referred to earlier is
increased to 25%.
AGE 70 1/2 REQUIRED MINIMUM DISTRIBUTIONS - You are required to begin
receiving minimum distributions from your SIMPLE IRA by your required beginning
date (the April 1 of the year following the year you attain age 70 1/2). The
year you attain age 70 1/2 is referred to as your "first distribution calendar
year." Your minimum distribution is based upon the value of your account at the
end of the prior year (less any required distributions you received between
January 1 and April 1 of the year following your first distribution calendar
year) by the joint life expectancy of you and your designated beneficiary. If
you do not have a designated beneficiary then the minimum distribution will be
based upon your single life expectancy.
As you can see, who you designate as beneficiary under your SIMPLE IRA will
affect the period over which distributions may be made. If you have more than
one primary beneficiary, generally the beneficiary with the shortest life
expectancy will be the measuring life expectancy used for determining the period
over which distributions will be made. If no beneficiary is named or you name a
beneficiary which is not an individual (i.e., your estate), distributions will
be based upon your single life expectancy.
By the April 1 following your first distribution calendar year, you must make
certain elections on a form provided by the Custodian. If no election is made,
you will be deemed to have elected to take your distributions over a period not
to exceed your single life expectancy. The required distributions for the second
distribution calendar year and for each subsequent distribution calendar year
must be made by December 31 of such year.
Unless otherwise elected by the Custodian (or by you, if the Custodian
permits) in determining the amount to be distributed for the second distribution
calendar year and subsequent distribution calendar years, your life expectancy
(and your designated beneficiary's life expectancy) shall not be recalculated.
If the Custodian elects (or you elect, if the Custodian permits) to recalculate
your life expectancy or your spouse's life expectancy, you will generally have a
longer period of time over which payments will be made and therefore the minimum
distribution will be less.
CAUTION: If you or your spouse should die, the decedent's life expectancy
that is being recalculated is reduced to zero which will reduce the period of
distribution to the survivor's single life expectancy. If recalculation is not
elected, the death of either person will not have an effect on the payment
period.
In any distribution calendar year you may take more than the required
minimum. However, if you take less than the required minimum with respect to any
distribution calendar year, you are subject to a federal excise tax penalty of
50% of the difference between the amount required to be distributed and the
amount actually distributed.
MINIMUM DISTRIBUTION INCIDENTAL BENEFIT (MDIB) RULE - Basically, this rule
specifies that benefits provided under a retirement plan must be for the primary
benefit of a participant rather than for his/her beneficiaries. If your spouse
is your sole beneficiary, these special MDIB rules do not apply. The amount
required to be distributed under the MDIB rule may in some cases be more than
the amount required under the normal age 70 1/2 required minimum distribution
rules. If someone other than or in addition to your spouse is a named primary
beneficiary, the minimum distribution required is the greater of the amount
determined under the regular 70 1/2 rules and the amount determined under the
MDIB rules. The minimum amount to be distributed under the MDIB rules is the
amount determined by taking the balance in your SIMPLE IRA account and dividing
it by a factor taken from an IRS table specified in IRS regulations. The table
provides life expectancies for you and a beneficiary who is assumed to be 10
years younger.
DEATH DISTRIBUTIONS - If you die after your required beginning date, the
balance in your SIMPLE IRA will be distributed in a manner which is at least as
rapid as the method of distribution being used on the date of your death. If you
die before your required beginning date, the balance in your SIMPLE IRA must
generally be distributed within five years from the date of your death. However
your beneficiary(ies) may elect to receive the balance in your account over the
single life expectancy of your designated beneficiary if distributions begin no
later than the end of the year containing the one year anniversary of your
death. In addition, if your only beneficiary is your surviving spouse,
distributions need not commence until December 31st of the year you would have
attained age 70 1/2.
PROHIBITED TRANSACTIONS - If you or your beneficiary engage in a prohibited
transaction (as defined under Section 4975 of the Internal Revenue Code) with
your SIMPLE IRA, it will lose its tax exemption and you must include the value
of your account in your gross income for that taxable year. If you pledge any
portion of your SIMPLE IRA as collateral for a loan, the amount so pledged will
be treated as a distribution and will be included in your gross income for that
year.
INCOME TAX WITHHOLDING - All withdrawals from your SIMPLE IRA (except a
direct transfer) are subject to federal income tax withholding. You may,
however, elect not to have withholding apply to your SIMPLE IRA distribution in
most cases. If withholding does apply to your distribution, it is at the rate of
10% of the amount of the distribution.
DESIGNATED FINANCIAL INSTITUTION "DFI":
In general, under section 408(p), an employer must permit an employee to select
the financial institution for the SIMPLE IRA to which the employer will make all
contributions on behalf of the employee. In this case, the financial institution
is referred to as a "Non-DFI." Alternatively, under section 408(p)(7), an
employer may require that all SIMPLE contributions initially be made to a single
designated financial institution selected by the employer. In this case, the
financial institution is referred to as a "DFI." Refer to your employer's SIMPLE
Retirement Plan document to determine if the financial institution is a DFI or a
Non-DFI.
USE OF A DESIGNATED FINANCIAL INSTITUTION "DFI" - If an employer requires
that all SIMPLE contributions initially be made to a DFI, the following
requirements must be met:
1. The employer and the financial institution must agree that the
financial institution will be a DFI for the employer's SIMPLE plan;
2. The DFI must agree that, if a participant elects before the expiration
of the employee's 60-day election period, the participant's balance
will be transferred without cost or penalty to another SIMPLE IRA (or
after the two year period no longer applies, to any IRA) to a
financial institution selected by the participant; and
3. Each participant is given written notification describing the
procedures under which, if a participant so elects, the participant's
balance will be transferred without cost or penalty to another SIMPLE
IRA (or after the two year period no longer applies, to any IRA) to a
financial institution selected by the participant.
If the participant elects before the expiration of the 60-day election period
to have the balance transferred without cost or penalty as described above, such
election is valid only with respect to the balance attributable to SIMPLE
contributions for the calendar year following that 60-day election period (or,
for the year in which an employee becomes eligible to make salary reduction
contributions for the remainder of that year) and subsequent calendar years if
such election so provides.
If the participant timely elects the transfer of the balance without cost or
penalty as described above, the participant's balance must be transferred on a
reasonably frequent basis, such as on a monthly basis. If a participant timely
elects this transfer without cost or penalty, the Custodian reserves the right
to restrict the investment to a specified investment option until transferred,
even though a variety of investment options are available with respect to
contributions that the participant has not elected to transfer.
A transfer is deemed to be made without cost or penalty if no liquidation,
transaction, redemption or termination fee, or any commission, load (whether
front-end or back-end) or surrender charge or similar fee or charge is imposed
with respect to the balance being transferred that the participant has filed a
timely election with the DFI. However, the DFI can charge a reasonable annual
administrative fee to a SIMPLE IRA from which balances must be transferred in
accordance with the participant's timely transfer election.
In order to timely elect a transfer without cost or penalty, the participant
must indicate such election on the SIMPLE IRA Plan Application attached hereto
and must be received by the DFI no later than the expiration of the 60-day
election period applicable to the employee. If the participant fails to timely
elect such transfers without cost or penalty, the DFI reserves the right to
charge any or all fees and expenses described in Section 8.05 of this SIMPLE IRA
plan agreement.
USE OF A NONDESIGNATED FINANCIAL INSTITUTION "NON-DFI" - If the employer's
SIMPLE plan permits the participants to select their own financial institution
to serve as trustee or custodian of the SIMPLE IRA, the rules explained above do
not apply and the Custodian may charge any and all fees described in Section
8.05 of the SIMPLE IRA plan agreement.
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TRANSFERS DEFINED - A direct transfer is a payment from this SIMPLE IRA
directly to another trustee or custodian of a SIMPLE IRA (or, after the two-year
period no longer applies, to the trustee or custodian of any IRA). Transfers do
not constitute a distribution since you are never in receipt of the funds. The
monies are transferred directly to the new trustee or custodian. If you should
transfer all or a portion of your SIMPLE IRA to your former spouse's IRA under a
divorce decree (or under a written instrument incident to divorce) or separation
instrument, you will not be deemed to have made a taxable distribution, but
merely a transfer. The portion so transferred will be treated at the time of the
transfer as the IRA of your spouse or former spouse. If your spouse is the
beneficiary of your SIMPLE IRA, in the event of your death, your spouse may
"assume" your SIMPLE IRA. The assumed IRA is then treated as your surviving
spouse's IRA.
SUMMARY DESCRIPTION REQUIREMENTS: In general, the Custodian of any SIMPLE IRA
must annually provide to the employer maintaining the SIMPLE plan a Summary
Description early enough to allow the employer to meet its notification
obligations. If the Custodian of this SIMPLE IRA is a DFI, the Summary
Description will be provided directly to the employer by the Custodian in the
underlying SIMPLE plan agreement. If the Custodian of this SIMPLE IRA is a
Non-DFI, the Summary Description will be provided directly to the employee by
the Custodian. The employee agrees to have the employer complete certain
information contained on the Summary Description with respect to the employer's
SIMPLE plan provisions. A sample Summary Description for a Non-DFI is located on
the following page. The Custodian of a "transfer SIMPLE IRA" is not required to
provide this Summary Description. A SIMPLE IRA is a "transfer SIMPLE IRA" if it
is not a SIMPLE IRA to which the employer has made contributions under the
SIMPLE plan.
PROCEDURES FOR WITHDRAWALS: All distributions from this SIMPLE IRA must be
requested in writing on a form provided to the participant by the Custodian.
After the withdrawal form has been completed and executed by the recipient, the
form must be either hand delivered to the Custodian during normal business hours
or mailed to the Custodian by first class mail, certified or registered mail
prepaid through the U.S. Postal Service, or through any means of an expedited
delivery service. After receipt of a properly executed withdrawal form, the
Custodian will process the distribution as soon as administratively feasible.
FEDERAL ESTATE AND GIFT TAXES: Generally, there is no specific exclusion for
SIMPLE IRAs under the estate tax rules. Therefore, in the event of your death,
your SIMPLE IRA balance will be includible in your gross estate for federal
estate tax purposes. However, if your surviving spouse is the beneficiary of
your SIMPLE IRA, the amount in your SIMPLE IRA may qualify for the marital
deduction available under Section 2056 of the Internal Revenue Code. A transfer
of property for federal gift tax purposes does not include an amount which a
beneficiary receives from a SIMPLE IRA plan.
PENALTIES: If you are under age 59 1/2 and receive a premature distribution from
your SIMPLE IRA, an additional 10% (or 25% for certain SIMPLE IRA distributions)
income tax will apply on the taxable amount of the distribution. If you make an
excess deferral to your SIMPLE IRA and it is not corrected on a timely basis, an
excise tax of 6% is imposed on the excess amount. This tax will apply each year
to any part or all of the excess which remains in your account. If you are age
70 1/2 or over or if you should die, and the appropriate required minimum
distributions are not made from your SIMPLE IRA, an additional tax of 50% is
imposed upon the difference between what should have been distributed and what
was actually distributed.
For tax years ending before 1/1/97, you will be taxed an additional 15% on
any amount you receive and include in income during a calendar year from
qualified plans, TSAs and all IRAs which exceeds the greater of $150,000
(unindexed) or $112,500 (indexed for cost of living). Before you receive an
excess distribution, you should seek advice from your tax advisor with respect
to the application of these rules. For tax years 1997, 1998 and 1999, the 15%
excess distribution tax will not apply. In the event of your death, your estate
may be subject to a 15% tax on the "excess accumulation" in all of your
qualified plans, TSAs and IRAs. You should seek the advice of your own tax
advisor with respect to the application of this excess accumulation excise tax.
You must file IRS Form 5329 with the Internal Revenue Service for any year an
additional tax is due.
IRS APPROVAL AS TO FORM: This SIMPLE IRA Custodial Agreement has been approved
by the Internal Revenue Service as to form. This is not an endorsement of the
plan in operation or of the investments offered.
ADDITIONAL INFORMATION: You may obtain further information on IRAs and SIMPLE
IRAs from your District Office of the Internal Revenue Service. In particular
you may wish to obtain IRS Publication 590 (Individual Retirement Arrangements).
23
<PAGE>
SIMPLE TRANSMITTAL FORM [AIM LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
1. EMPLOYER INFORMATION (Please print or type.)
Name of Employer_____________________________________________________________
Address______________________________________________________________________
City_________________________________State_____________________Zip Code______
- --------------------------------------------------------------------------------
2. EMPLOYER'S AUTHORIZATION (Signature(s) of authorized employer representative)
We hereby authorize INVESCO Trust Company to invest contributions in
accordance with the instructions below.
_________________________________________________ Date _________ /___ /____
Month Day Year
<TABLE>
<CAPTION>
(1) (2) (3) (4)
NAME OF SOCIAL SECURITY SELECTED CONTRIBUTION PER FUND**
PARTICIPANT NUMBER AIM FUNDS* (MINIMUM $25 PER FUND)
Salary Employer Nonelective
Deferral Match 2% Contribution
<S> <C> <C> <C> <C> <C>
1 ___________________________________ _______________ __________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
2 ___________________________________ _______________ __________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
3 ___________________________________ _______________ __________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
4 ___________________________________ _______________ __________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
5 ___________________________________ _______________ __________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
6 ___________________________________ _______________ __________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
7 ___________________________________ _______________ __________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
__________________ $_____________ $_____________ $_____________
</TABLE>
* Indicate funds used by each participant. ** Indicate dollar($) amount
contributed per fund.
15
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3) (4)
NAME OF SOCIAL SECURITY SELECTED CONTRIBUTION PER FUND**
PARTICIPANT NUMBER AIM FUNDS* (MINIMUM $25 PER FUND)
Salary Employer Nonelective
Deferral Match 2% Contribution
<S> <C> <C> <C> <C> <C>
8 __________________ __________________ ________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
9 __________________ __________________ ________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
10 __________________ __________________ ________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
11 __________________ __________________ ________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
12 __________________ __________________ ________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
________________ $______________ $______________ $______________
Total Employer Contributions $______________
Total Employee Salary
Deferred Contributions $______________
Total Employer and
Employee Contributions $______________
</TABLE>
If a contribution for a participant is to be invested in more than one fund, $25
or more must be invested in each fund selected. Attach form, check (payable to
INVESCO Trust Company) and SIMPLE applications and mail to:
REGULAR MAIL OR OVERNIGHT DELIVERIES ONLY
------------------------------------------------------------------------
AIM FUND SERVICES, INC. AIM FUND SERVICES, INC.
ATTN: RETIREMENT PLANS ATTN: RETIREMENT PLANS
OPERATIONS OPERATIONS
P.O. BOX 4739 P.O. BOX 4739
HOUSTON, TEXAS 77210-4739 HOUSTON, TEXAS 77210-4739
* Indicate funds used by each participant. ** Indicate dollar($) amount
contributed per fund.
[AIM LOGO APPEARS HERE] A I M Distributors, Inc.
12/97
16
<PAGE>
[AIM LOGO APPEARS HERE]
SAVINGS INCENTIVE MATCH PLAN FOR EMPLOYEES OF SMALL EMPLOYERS (SIMPLE)
FORM 5304-SIMPLE (DECEMBER 1996)
(NOT SUBJECT TO THE DESIGNATED FINANCIAL INSTITUTION RULES)
Department of the Treasury
Internal Revenue Service
- --------------------------------------------------------------------------------
Name of Employer_____________________________________establishes the following
SIMPLE plan under section 408(p) of the Internal Revenue Code and pursuant to
the instructions contained in this form.
ARTICLE I - EMPLOYEE ELIGIBILITY REQUIREMENTS (Complete appropriate box(es) and
blanks--see instructions.)
1. GENERAL ELIGIBILITY REQUIREMENTS. The Employer agrees to permit salary
reduction contributions to be made in each calendar year to the SIMPLE IRA
established by each employee who meets the following requirements (select either
1a or 1b):
a / / FULL ELIGIBILITY. All employees are eligible.
b / / LIMITED ELIGIBILITY. Eligibility is limited to employees who are
described in both (i) and (ii) below:
(i) CURRENT COMPENSATION. Employees who are reasonably expected
to receive at least $____________ in compensation (not to exceed
$5,000) for the calendar year.
(ii) PRIOR COMPENSATION. Employees who have received at least
$_____________ in compensation (not to exceed $5,000) during any
___________ calendar year(s) (insert 0, 1, or 2) preceding the
calendar year.
2. EXCLUDABLE EMPLOYEES. (OPTIONAL)
/ / The Employer elects to exclude employees covered under a
collective bargaining agreement for which retirement benefits were the
subject of good faith bargaining.
ARTICLE II - SALARY REDUCTION AGREEMENTS (Complete the box and blank, if
appropriate--see instructions.)
1. SALARY REDUCTION ELECTION. An eligible employee may make a salary
reduction election to have his or her compensation for each pay period
reduced by a percentage. The total amount of the reduction in the
employee's compensation cannot exceed $6,000* for any calendar year.
2. TIMING OF SALARY REDUCTION ELECTIONS.
a. For a calendar year, an eligible employee may make or modify a
salary reduction election during the 60-day period immediately
preceding January 1 of that year. However, for the year in which the
employee becomes eligible to make salary reduction contributions, the
period during which the employee may make or modify the election is a
60-day period that includes either the date the employee becomes
eligible or the day before.
b. In addition to the election periods in 2a, eligible employees may
make salary reduction elections or modify prior elections
___________________. If the Employer chooses this option, insert a
period or periods (e.g., semiannually, quarterly, monthly or daily)
that will apply uniformly to all eligible employees.)
c. No salary reduction election may apply to compensation that an
employee received, or had a right to immediately receive, before
execution of the salary reduction election.
d. An employee may terminate a salary reduction election at any time
during the calendar year. / / If this box is checked, an employee who
terminates a salary reduction election not in accordance with 2b may
not resume salary reduction contributions during the calendar year.
17
<PAGE>
ARTICLE III - CONTRIBUTIONS (Complete the blank, if appropriate-see
instructions.)
1. SALARY REDUCTION CONTRIBUTIONS. The amount by which the employee
agrees to reduce his or her compensation will be contributed by the
Employer to the employee's SIMPLE IRA.
2. OTHER CONTRIBUTIONS.
a. Matching Contributions
(i) For each calendar year, the Employer will contribute a
matching contribution to each eligible employee's SIMPLE IRA
equal to the employee's salary reduction contributions up to a
limit of 3% of the employee's compensation for the calendar year.
(ii) The Employer may reduce the 3% limit for the calendar year
in (i) only if:
(1) The limit is not reduced below 1%; (2) The limit is not
reduced for more than two calendar years during the
five-year period ending with the calendar year the reduction
is effective; and (3) Each employee is notified of the
reduced limit within a reasonable period of time before the
employees' 60-day election period for the calendar year
(described in Article II, item 2a).
b. Nonelective Contributions
(i) For any calendar year, instead of making matching
contributions, the Employer may make nonelective contributions
equal to 2% of compensation for the calendar year to the SIMPLE
IRA of each eligible employee who has at least $___________ (not
more than $5,000) in compensation for the calendar year. No more
than $160,000* in compensation can be taken into account in
determining the nonelective contribution for each eligible
employee.
(ii) For any calendar year, the Employer may make 2% nonelective
contributions instead of matching contributions only if:
(1) Each eligible employee is notified that a 2% nonelective
contribution will be made instead of a matching
contribution; and
(2) This notification is provided within a reasonable period
of time before the employees' 60-day election period for the
calendar year (described in Article II, item 2a).
3. TIME AND MANNER OF CONTRIBUTIONS.
a. The Employer will make the salary reduction contributions
(described in 1 above) for each eligible employee to the SIMPLE IRA
established at the financial institution selected by that employee no
later than 30 days after the end of the month in which the money is
withheld from the employee's pay. See instructions.
b. The Employer will make the matching or nonelective contributions
(described in 2a and 2b above) for each eligible employee to the
SIMPLE IRA established at the financial institution selected by that
employee no later than the due date for filing the Employer's tax
return, including extensions, for the taxable year that includes the
last day of the calendar year for which the contributions are made.
ARTICLE IV - OTHER REQUIREMENTS AND PROVISIONS
1. CONTRIBUTIONS IN GENERAL. The Employer will make no contributions to
the SIMPLE IRAs other than salary reduction contributions (described
in Article III, item 1) and matching or nonelective contributions
(described in Article III, items 2a and 2b).
2. VESTING REQUIREMENTS. All contributions made under this SIMPLE plan
are fully vested and nonforfeitable.
3. NO WITHDRAWAL RESTRICTIONS. The Employer may not require the employee
to retain any portion of the contributions in his or her SIMPLE IRA or
otherwise impose any withdrawal restrictions.
4. SELECTION OF IRA TRUSTEE. The Employer must permit each eligible
employee to select the financial institution that will serve as the
trustee, custodian, or issuer of the SIMPLE IRA to which the employer
will make all contributions on behalf of that employee.
5. AMENDMENTS TO THIS SIMPLE PLAN. This SIMPLE plan may not be amended
except to modify the entries inserted in the blanks or boxes provided
in Articles I, II, III, VI, and VII.
6. EFFECTS OF WITHDRAWALS AND ROLLOVERS.
a. An amount withdrawn from the SIMPLE IRA is generally includible in
gross income. However, a SIMPLE IRA balance may be rolled over or
transferred on a tax-free basis to another IRA designed solely to hold
funds under a SIMPLE plan. In addition, an individual may roll over or
transfer his or her SIMPLE IRA balance to any IRA on a tax-free basis
after a two-year period has expired since the individual first
participated in a SIMPLE plan. Any rollover or transfer must comply
with the requirements under section 408.
18
<PAGE>
b. If an individual withdraws an amount from a SIMPLE IRA during the
two-year period beginning when the individual first participated in a
SIMPLE plan and the amount is subject to the additional tax on early
distributions under section 72(t), this additional tax is increased
from 10% to 25%.
ARTICLE V - DEFINITIONS
1. COMPENSATION.
a. GENERAL DEFINITION OF COMPENSATION. Compensation means the sum of
the wages, tips, and other compensation from the Employer subject to
federal income tax withholding [as described in section 6051(a)(3)]
and the employee's salary reduction contributions made under this
plan, and, if applicable, elective deferrals under a section 401(k)
plan, a SARSEP, or a section 403(b) annuity contract and compensation
deferred under a section 457 plan required to be reported by the
Employer on Form W-2 [as described in section 6051(a)(8)].
b. COMPENSATION FOR SELF-EMPLOYED INDIVIDUALS. For self-employed
individuals, compensation means the net earnings from self-employment
determined under section 1402(a) prior to subtracting any
contributions made pursuant to this plan on behalf of the individual.
2. EMPLOYEE. Employee means a common-law employee of the Employer. The
term employee also includes a self-employed individual and a leased
employee described in section 414(n) but does not include a
nonresident alien who received no earned income from the Employer that
constitutes income from sources within the United States.
3. ELIGIBLE EMPLOYEE. An eligible employee means an employee who
satisfies the conditions in Article 1, item 1 and is not excluded
under Article 1, item 2.
4. SIMPLE IRA. A SIMPLE IRA is an individual retirement account described
in section 408(a), or an individual retirement annuity described in
section 408(b), to which the only contributions that can be made are
contributions under a SIMPLE plan and rollovers or transfers from
another SIMPLE IRA.
ARTICLE VI - PROCEDURES FOR WITHDRAWAL (The Employer will provide each employee
with the procedures for withdrawals of contributions received by the financial
institution selected by that employee, and that financial institution's name and
address (by attaching that information or inserting it in the space below)
unless: (1) that financial institution's procedures are unavailable, or (2) that
financial institution provides the procedures directly to the employee.
See Employee Notification section in the instructions.)
ARTICLE VII - EFFECTIVE DATE
This SIMPLE plan is effective __________________________. (See instructions.)
Name of Employer
-------------------------------------------------------------
By:
--------------------------------------------------------------------------
Signature Date
Address of Employer
-----------------------------------------------------------
Name and Title
---------------------------------------------------------------
*This amount will be adjusted to reflect any annual cost-of-living increases
announced by the IRS.
19
<PAGE>
MODEL NOTIFICATION TO ELIGIBLE EMPLOYEES
I. OPPORTUNITY TO PARTICIPATE IN THE SIMPLE PLAN
You are eligible to make salary reduction contributions to
the_________________SIMPLE plan. This notice and the attached summary
description provide you with information that you should consider before
you decide whether to start, continue, or change your salary reduction
agreement.
II. EMPLOYER CONTRIBUTION ELECTION
For the ____________ calendar year, the Employer elects to contribute to
your SIMPLE IRA [employer must select either (1), (2), or (3)]:
/ / (1) A matching contribution equal to your salary reduction
contributions up to a limit of 3% of your compensation for the year;
/ / (2) A matching contribution equal to your salary reduction
contributions up to a limit of ___________% (employer must insert a
number from 1 to 3 and is subject to certain restrictions) of your
compensation for the year; or
/ / (3) A nonelective contribution equal to 2% of your compensation
for the year (limited to $160,000, adjusted periodically by the IRS)
if you are an employee who makes at least $____________ (Employer must
insert an amount that is $5,000 or less) in compensation for the year.
III. ADMINISTRATIVE PROCEDURES
If you decide to start or change your salary reduction agreement, you must
complete the salary reduction agreement and return it to
__________________________ (Employer should designate a place or
individual) by _________________(Employer should insert a date that is not
less than 60 days after notice is given).
IV. EMPLOYEE SELECTION OF FINANCIAL INSTITUTION
You must select the financial institution that will serve as the trustee,
custodian, or issuer of your SIMPLE IRA and notify your Employer of your
selection.
20
<PAGE>
PAPERWORK REDUCTION ACT NOTICE
You are not required to provide the information requested on a form that is
subject to the Paperwork Reduction Act unless the form displays a valid OMB
control number. Books or records relating to a form or its instructions must be
retained as long as their contents may become material in the administration of
any Internal Revenue law. Generally, tax returns and return information are
confidential, as required by section 6103.
The time needed to complete this form will vary depending on individual
circumstances. The estimated average time is:
<TABLE>
<S> <C> <C>
Recordkeeping. . . . . . . . . . . . . . 3 hr., 38 min.
Learning about the law or the form . . . 2 hr., 26 min.
Preparing the form . . . . . . . . . . . 47 min.
</TABLE>
If you have comments concerning the accuracy of these time estimates or
suggestions for making this form simpler, we would be happy to hear from you.
You can write to the Tax Forms Committee, Western Area Distribution Center,
Rancho Cordova, CA 95743-0001. DO NOT send this form to this address. Instead,
keep it for your records.
GENERAL INSTRUCTIONS
Section references are to the Internal Revenue Code unless otherwise noted.
NOTE: THE INSTRUCTIONS FOR THIS FORM ARE DESIGNED TO ASSIST IN THE ESTABLISHMENT
AND ADMINISTRATION OF THE SIMPLE PLAN; THEY ARE NOT INTENDED TO SUPERSEDE ANY
PROVISIONS IN THE SIMPLE PLAN.
PURPOSE OF FORM
Form 5304-SIMPLE is a model Savings Incentive Match Plan for Employees of Small
Employers (SIMPLE) plan document that an employer may use to establish a SIMPLE
plan described in section 408(p), under which each eligible employee is
permitted to select the financial institution for his or her SIMPLE IRA. It is
important that you keep this form for your records. DO NOT file this form with
the IRS. For more information, see Pub. 560, Retirement Plans for the Self-
Employed, and Pub. 590, Individual Retirement Arrangements (IRAs).
INSTRUCTIONS FOR THE EMPLOYER
WHICH EMPLOYERS MAY ESTABLISH AND MAINTAIN A SIMPLE PLAN?
You are eligible to establish and maintain a SIMPLE plan only if you meet both
of the following requirements:
1. Last calendar year, you had no more than 100 employees (including
self-employed individuals) who earned $5,000 or more in compensation from you
during the year. If you have a SIMPLE plan but later exceed this 100-employee
limit, you will be treated as meeting the limit for the two years following the
calendar year in which you last satisfied the limit. If the failure to continue
to satisfy the 100-employee limit is due to an acquisition or similar
transaction involving your business, special rules apply. Consult your tax
advisor to find out if you can still maintain the plan after the transaction.
2. You do not maintain during any part of the calendar year another
qualified plan with respect to which contributions are made, or benefits are
accrued, for service in the calendar year. For this purpose, a qualified plan
[defined in section 219(g)(5)] includes a qualified pension plan, a
profit-sharing plan, a stock bonus plan, a qualified annuity plan, a
tax-sheltered annuity plan, and a simplified employee pension (SEP) plan.
Certain related employers (trades or businesses under common control) must
be treated as a single employer for purposes of the SIMPLE requirements. These
are: (1) a controlled group of corporations under section 414(b); (2) a
partnership or sole proprietorship under common control under section 414(c); or
(3) an affiliated service group under section 414(m). In addition, if you have
leased employees required to be treated as your own employees under the rules of
section 414(n), then you must count all such leased employees for the
requirements listed above.
21
<PAGE>
WHAT IS A SIMPLE PLAN?
A SIMPLE plan is a written arrangement that provides you and your employees with
a simplified way to make contributions to provide retirement income for your
employees. Under a SIMPLE plan, employees may choose whether to make salary
reduction contributions to the SIMPLE plan rather than receiving these amounts
as part of their regular compensation. In addition, you will contribute matching
or nonelective contributions on behalf of eligible employees (see Employee
Eligibility Requirements below and Contributions on page 23). All contributions
under this plan will be deposited into a SIMPLE individual retirement account or
annuity established for each eligible employee with the financial institution
selected by each eligible employee (SIMPLE IRA).
The information provided below is intended to help you understand and
administer the rules of your SIMPLE plan.
WHEN TO USE FORM 5304-SIMPLE
A SIMPLE plan may be established by using this Model Form or any other document
that satisfies the statutory requirements. Thus, you are not required to use
Form 5304-SIMPLE to establish and maintain a SIMPLE plan. Further, do not use
Form 5304-SIMPLE if:
1. You want to require that all SIMPLE plan contributions initially go to a
financial institution designated by you (i.e., you do not want to permit each of
your eligible employees to choose a financial institution that will initially
receive contributions). However, Form 5305-SIMPLE, Savings Incentive Match Plan
for Employees of Small Employers (SIMPLE) (for Use With a Designated Financial
Institution), may be used in such a case;
2. You want employees who are nonresident aliens receiving no earned income
from you that constitutes income from sources within the United States to be
eligible under this plan; or
3. You want to establish a SIMPLE 401(k) plan.
COMPLETING FORM 5304-SIMPLE
Pages 1 and 2 of Form 5304-SIMPLE contain the operative provisions of your
SIMPLE plan. This SIMPLE plan is considered adopted when you have completed all
appropriate boxes and blanks and it has been executed by you.
The SIMPLE plan is a legal document with important tax consequences for you
and your employees. You may want to consult with your attorney or tax advisor
before adopting this plan.
EMPLOYEE ELIGIBILITY REQUIREMENTS (ARTICLE I)
Each year for which this SIMPLE plan is effective, you must permit salary
reduction contributions to be made by all of your employees who are reasonably
expected to receive at least $5,000 in compensation from you during the year,
and who received at least $5,000 in compensation from you in any two preceding
years. However, you can expand the group of employees who are eligible to
participate in the SIMPLE plan by completing the options provided in Article I,
items 1a and 1b. To choose full eligibility, check the box in Article I, item
1a. Alternatively, to choose limited eligibility, check the box in Article I,
item 1b, and then insert $5,000 or a lower compensation amount (including zero)
and two or a lower number of years of service in the blanks in (i) and (ii) of
Article I, item 1b.
In addition, you can exclude from participation those employees covered
under a collective bargaining agreement for which retirement benefits were the
subject of good faith bargaining. You may do this by checking the box in Article
I, item 2.
SALARY REDUCTION AGREEMENTS (ARTICLE II)
As indicated in Article II, item 1, a salary reduction agreement permits an
eligible employee to make a salary reduction election to have his or her
compensation for each pay period reduced by a percentage (expressed as a
percentage or dollar amount). The total amount of the reduction in the
employee's compensation cannot exceed $6,000* for any calendar year.
TIMING OF SALARY REDUCTION ELECTIONS
For a calendar year, an eligible employee may make or modify a salary reduction
election during the 60-day period immediately preceding January 1 of that year.
However, for the year in which the employee becomes eligible to make salary
reduction contributions, the period during which the employee may make or modify
the election is a 60-day period that includes either the date the employee
becomes eligible or the day before.
* This amount will be adjusted to reflect any annual cost-of-living increases
announced by the IRS.
22
<PAGE>
You can extend the 60-day election periods to provide additional
opportunities for eligible employees to make or modify salary reduction
elections using the blank in Article II, item 2b. For example, you can provide
that eligible employees may make new salary reduction elections or modify prior
elections for any calendar quarter during the 30 days before that quarter.
You may use (but are not required to) the Model Salary Reduction Agreement
to enable eligible employees to make or modify salary reduction elections.
Employees must be permitted to terminate their salary reduction elections
at any time. They may resume salary reduction contributions if permitted under
Article II, item 2b. However, by checking the box in Article II, item 2d, you
may prohibit an employee who terminates a salary reduction election outside the
normal election cycle from resuming salary reduction contributions during the
remainder of the calendar year.
CONTRIBUTIONS (ARTICLE III)
Only contributions described below may be made to this SIMPLE plan. No
additional contributions may be made.
SALARY REDUCTION CONTRIBUTIONS
As indicated in Article III, item 1, salary reduction contributions consist of
the amount by which the employee agrees to reduce his or her compensation. You
must contribute the salary reduction contributions to the financial institution
selected by each eligible employee.
OTHER CONTRIBUTIONS
MATCHING CONTRIBUTIONS.
In general, you must contribute a matching contribution to each eligible
employee's SIMPLE IRA equal to the employee's salary reduction contributions.
This matching contribution cannot exceed 3% of the employee's compensation. See
Definition of Compensation, below.
You may reduce this 3% limit to a lower percentage, but not lower than 1%.
You cannot lower the 3% limit for more than two calendar years out of the
five-year period ending with the calendar year the reduction is effective. NOTE:
If any year in the five-year period described above is a year before you first
established any SIMPLE plan, you will be treated as making a 3% matching
contribution for that year for purposes of determining when you may reduce the
employer matching contribution.
In order to elect this option, you must notify the employees of the reduced
limit within a reasonable period of time before the applicable 60-day election
periods for the year. See Timing of Salary Reduction Elections above.
NONELECTIVE CONTRIBUTIONS.
Instead of making a matching contribution, you may, for any year, make a
nonelective contribution equal to 2% of compensation for each eligible employee
who has at least $5,000 in compensation for the year. Nonelective contributions
may not be based on more than $160,000* of compensation.
In order to elect to make nonelective contributions, you must notify
employees within a reasonable period of time before the applicable 60-day
election periods for such year. See Timing of Salary Reduction Elections above.
NOTE: Insert $5,000 in Article III, item 2b(i) to impose the $5,000 compensation
requirement. You may expand the group of employees who are eligible for
nonelective contributions by inserting a compensation amount lower than $5,000.
EFFECTIVE DATE (ARTICLE VII)
Insert in Article VII, the date you want the provisions of the SIMPLE plan to
become effective. You must insert January 1 of the applicable year unless this
is the first year for which you are adopting any SIMPLE plan. If this is the
first year for which you are adopting a SIMPLE plan, you may insert any date
between January 1 and October 1, inclusive of the applicable year. Do not insert
any date before January 1, 1997.
OTHER IMPORTANT INFORMATION ABOUT YOUR SIMPLE PLAN
TIMING OF SALARY REDUCTION CONTRIBUTIONS
Under the Internal Revenue Code, for all SIMPLE plans, the employer must make
the salary reduction contributions to the financial institution selected by each
eligible employee for his or her SIMPLE IRA no later than the 30th day of the
month following the month in which the
*This amount will be adjusted to reflect any annual cost-of-living increases
announced by the IRS.
23
<PAGE>
amounts would otherwise have been payable to the employee in cash. The
Department of Labor has indicated that most SIMPLE plans are also subject to
Title I of the Employee Retirement Income Security Act of 1974 (ERISA). The
Department of Labor has informed the IRS that, as a matter of enforcement
policy, for these plans, salary reduction contributions must be made to each
participant's SIMPLE IRA as of the earliest date on which those contributions
can reasonably be segregated from the employer's general assets, but in no event
later than the 30-day deadline described above.
DEFINITION OF COMPENSATION
"Compensation" means the amount described in section 6051(a)(3) [wages, tips,
and other compensation from the employer subject to federal income tax
withholding under section 3401(a)]. Usually, this is the amount shown in box 1
of Form W-2, Wage and Tax Statement. For further information, see Pub. 15
(Circular E), Employer's Tax Guide. Compensation also includes the salary
reduction contributions made under this plan, and, if applicable, compensation
deferred under a section 457 plan. In determining an employee's compensation for
prior years, the employee's elective deferrals under a section 401(k) plan, a
SARSEP, or a section 403(b) annuity contract are also included in the employee's
compensation.
For self-employed individuals, compensation means the net earnings from
self-employment determined under section 1402(a) prior to subtracting any
contributions made pursuant to this SIMPLE plan on behalf of the individual.
EMPLOYEE NOTIFICATION
You must notify each eligible employee prior to the employee's 60-day election
period described above that he or she can make or change salary reduction
elections and select the financial institution that will serve as the trustee,
custodian, or issuer of the employee's SIMPLE IRA. In this notification, you
must indicate whether you will provide:
1. A matching contribution equal to your employees' salary reduction
contributions up to a limit of 3% of their compensation;
2. A matching contribution equal to your employees' salary reduction
contributions subject to a percentage limit that is between 1 and 3% of their
compensation; or
3. A nonelective contribution equal to 2% of your employees' compensation.
You can use the Model Notification to Eligible Employees on page 20 to
satisfy these employee notification requirements for this SIMPLE plan. A Summary
Description must also be provided to eligible employees at this time. This
summary description requirement may be satisfied by providing a completed copy
of pages 1 and 2 of Form 5304-SIMPLE (including the information described in
Article VI - Procedures for Withdrawal).
If you fail to provide the employee notification (including the summary
description) described above, you will be liable for a penalty of $50 per day
until the notification is provided. If you can show that the failure was due to
reasonable cause, the penalty will not be imposed.
If the summary description information with respect to the financial
institution (i.e., the name and address of the financial institution and its
withdrawal procedures) is not available at the time the employee must be given
the summary description, you must provide the summary description without this
information. In such a case, you will have reasonable cause for not including
this information with respect to the financial institution in the summary
description, but only if you see to it that this information is provided to the
employee as soon as administratively feasible once the financial institution has
been selected.
REPORTING REQUIREMENTS
You are not required to file any annual information returns for your SIMPLE
plan, such as Forms 5500, 5500-C/R or 5500-EZ. However, you must report to the
IRS which eligible employees are active participants in the SIMPLE plan and the
amount of your employees' salary reduction contributions to the SIMPLE plan on
Form W-2. These contributions are subject to social security, medicare, railroad
retirement and federal unemployment tax.
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DEDUCTING CONTRIBUTIONS
Contributions to this SIMPLE plan are deductible in your tax year containing the
end of the calendar year for which the contributions are made.
Contributions will be treated as made for a particular tax year if they are
made for that year and are made by the due date (including extensions) of your
income tax return for that year.
SUMMARY DESCRIPTION
Each year the SIMPLE plan is in effect, the financial institution for the SIMPLE
IRA of each eligible employee must provide the employer the information
described in section 408(I)(2)(B). This requirement may be satisfied by
providing the employer a current copy of Form 5304-SIMPLE (including
instructions) together with the financial institution's procedures for
withdrawals from SIMPLE IRAs established at that financial institution,
including financial institution's name and address. The summary description must
be received by the employer in sufficient time to comply with the Employee
Notification requirements above.
There is a penalty of $50 per day imposed on the financial institution for
each failure by the financial institution to provide the summary description
described above. However, if the failure was due to reasonable cause, the
penalty will not be imposed.
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[AIM LOGO APPEARS HERE]
SUMMARY DESCRIPTION FOR NONDESIGNATED FINANCIAL INSTITUTION
Employer must complete the following:
ELIGIBILITY REQUIREMENTS
All Employees of the Employer shall be eligible to participate under the Plan
except:
a. Employees included in a unit of employees covered under a collective
bargaining agreement described in Section 2.02(a) of the Plan.
b. Nonresident alien employees who did not receive U.S. source income
described in Section 2.02(b) of the Plan.
c. Employees who are not reasonably expected to earn $_____________(not to
exceed $5,000) during the Plan Year for which the contribution is being
made.
d. There are no eligibility requirements. All Employees are eligible to
participate upon the later of the plan's effective date or the employee's
date of hire.
Each Eligible Employee will be eligible to become a Participant after having
worked for the Employer during any prior years (not to exceed 2) and received at
least $____________ in compensation (not to exceed $5,000), during each of such
prior years.
WRITTEN ALLOCATION FORMULA
The Employer has agreed to provide contributions for the _______________ Plan
Year as follows (complete only one choice):
a. Matching Contribution
The amount of the Participant's Elective Deferral not in excess of 3% of
such Participant's Compensation (not to exceed $6,000).
b. Matching Contribution
The amount of the Participant's Elective Deferral not in excess of _______%
(not less than 1% nor more than 3%) of each Participant's Compensation (not
to exceed $6,000).
c. Nonelective Employer Contribution 2% of each Participant's Compensation.
The Employer has designated _________________________________________________
(insert Name & Title) to provide additional information to participants about
the Employer's SIMPLE Plan.
- --------------------------------------------------------------------------------
GENERAL DISCLOSURE INFORMATION
The following information explains what a Savings Incentive Match Plan for
Employees ("SIMPLE") is, how contributions are made and how to treat these
contributions for tax purposes. For more specific information, refer to the
employer's SIMPLE Retirement Plan document itself. For a calendar year, you may
make or modify a salary reduction election during the 60-day period immediately
preceding January 1 of that year. However, for the year in which you first
become eligible to make salary reduction contributions, the period during which
you may make or modify the election is a 60-day period that includes either the
date you become eligible or the day before. If indicated in your Employer's
SIMPLE plan, you may have additional opportunities during a calendar year to
make or modify your salary reduction election.
I. SIMPLE RETIREMENT PLAN AND SIMPLE IRA DEFINED
A SIMPLE Retirement Plan is a retirement income arrangement established by your
Employer. Under this SIMPLE Plan, you may choose to defer compensation to your
own Individual Retirement Account or Annuity ("IRA"). You may base these
"elective deferrals" on a salary reduction basis that, at your election, may be
contributed to an IRA or received in cash. This type of plan is available only
to an employer with 100 or fewer employees who earned at least $5,000 during the
prior calendar year. A SIMPLE IRA is a separate IRA plan that you establish with
an eligible financial institution for the purpose of receiving contributions
under this SIMPLE Retirement Plan. Your Employer must provide you with a copy of
the SIMPLE agreement containing eligibility requirements and a description of
the basis upon which contributions may be made. All amounts contributed to your
IRA belong to you, even after you quit working for your Employer.
II. ELECTIVE DEFERRALS - NOT REQUIRED
You are not required to make elective deferrals under this SIMPLE Retirement
Plan. However, if the Employer is matching your elective deferrals, no Employer
contribution will be made on your behalf unless you elect to defer under the
plan.
III. ELECTIVE DEFERRALS - ANNUAL LIMITATION
The maximum amount that you may defer under this SIMPLE Plan for any calendar
year is limited to the lesser of the percentage of your compensation that you
select or $6,000, subject to cost-of-living increases. If you work for other
employers (unrelated to this Employer) who also maintain a salary deferral plan,
there is an overall limit on the maximum amount that you may defer in each
calendar year to all elective SEPs, cash or deferred arrangements under section
401(k) of the Code, other SIMPLE plans and 403(b) plans regardless of how many
employers you may have worked for during the year. This limitation is referred
to as the section 402(g) limit. The section 402(g) limit on elective deferrals
is currently $9,500 and is indexed according to the cost of living.
IV. ELECTIVE DEFERRALS - TAX TREATMENT
The amount that you may elect to contribute to your SIMPLE IRA is excludible
from gross income, subject to the limitations discussed above, and is not
includible as taxable wages on Form W-2. However, these amounts are subject to
FICA taxes.
V. ELECTIVE DEFERRALS - EXCESS AMOUNTS CONTRIBUTED
When "excess elective deferrals" (i.e., amounts in excess of the $6,000 SIMPLE
elective deferral limit or the section 402(g) limit) are made, you are
responsible for calculating whether you have exceeded these limits in the
calendar year. For 1997, the section 402(g) limit for contributions made to all
elective deferral plans is $9,500. Excess elective deferrals are calculated on
the basis of the calendar year.
VI. EXCESS ELECTIVE DEFERRALS - HOW TO AVOID ADVERSE TAX CONSEQUENCES
Excess elective deferrals are includible in your gross income in the calendar
year of deferral. Income on the excess elective deferrals is includible in your
income in the year of withdrawal from the IRA. You should withdraw excess
elective deferrals and any allocable income, from your SIMPLE IRA by April 15
following the year to which the deferrals relate. These amounts may not be
transferred or rolled over tax-free to another SIMPLE IRA. If you fail to
withdraw excess elective deferrals, and any allocable income, by the following
April 15th, the excess elective deferrals will be subject to the IRA
contribution limitations of sections 219 and 408 of the Code and thus may be
considered an excess contribution to your IRA. Such excess deferrals may be
subject to a 6% excise tax for each year they remain in your SIMPLE IRA. Income
on excess elective deferrals is includible in your gross income in the year you
withdraw it from your IRA and must be withdrawn by April 15 following the
calendar year to which the deferrals relate.
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Income withdrawn from the IRA after that date may be subject to a 10% tax (or
25% if withdrawn within the first two years of participation) on early
distributions.
VII. INCOME ALLOCABLE TO EXCESS AMOUNTS
The rules for determining and allocating income attributable to excess elective
deferrals and other excess SIMPLE contributions are the same as those governing
regular IRA excess contributions. The trustee or custodian of your SIMPLE IRA
will inform you of the income allocable to such excess amounts.
VIII. AVAILABILITY OF REGULAR IRA CONTRIBUTION DEDUCTION
In addition to any SIMPLE contribution, you may contribute to a separate IRA the
lesser of $2,000 or 100% of compensation to an IRA as a regular IRA
contribution. However, the amount that you may deduct is subject to various
limitations since you will be considered an "active participant" in an
employer-sponsored plan. See Pub. 590, "Individual Retirement Arrangement," for
more specific information.
IX. SIMPLE IRA AMOUNTS - ROLLOVER OR TRANSFER TO ANOTHER IRA
You may not roll over or transfer from your SIMPLE IRA any SIMPLE contributions
(or income on these contributions) made during the plan year to another IRA
(other than a SIMPLE IRA) until the two years following the date you first
participated in the SIMPLE plan. Also, any distribution made before this time
will be includible in your gross income and may also be subject to a 25% percent
additional income tax for early withdrawal. You may, however, remove excess
elective deferrals and income allocable to such excess amounts from your SIMPLE
IRA before this time, but you may not roll over or transfer these amounts to
another IRA.
After the two-year restriction no longer applies, you may withdraw, or
receive, funds from your SIMPLE IRA, and no more than 60 days later, place such
funds in another IRA or SIMPLE IRA. This is called a "rollover" and may not be
done without penalty more frequently than at one-year intervals. However, there
are no restrictions on the number of times that you may make "transfers" if you
arrange to have such funds transferred between the trustees so that you never
have possession of the funds. You may not, however, roll over or transfer excess
elective deferrals, and income allocable to such excess amounts from your SIMPLE
IRA to another IRA. These excess amounts may be reduced only by a distribution
to you.
X. FILING REQUIREMENTS
You do not need to file any additional forms with the IRS because of your
participation in your employer's SIMPLE Plan.
XI. EMPLOYER TO PROVIDE INFORMATION
Your employer must provide you with a copy of the executed SIMPLE agreement, a
Summary Description, the form you should use to elect to defer amounts to your
SIMPLE IRA, and a statement for each taxable year showing any contribution to
your SIMPLE IRA.
XII. FINANCIAL INSTITUTION WHERE IRA IS ESTABLISHED TO PROVIDE
INFORMATION
The financial institution must provide you with a disclosure statement that
contains information described in section 1.408-6 of the regulations. The
Disclosure Statement that is a part of this Custodian's SIMPLE IRA account
documentation must be read in conjunction with this Summary Description for
Nondesignated Financial Institutions. The Disclosure Statement contains
important information about the SIMPLE plan rules and the contents of such
Disclosure Statement are incorporated herein by reference.
See Publication 590, "Individual Retirement Arrangements," which is available at
most IRS offices, for a more complete explanation of the disclosure
requirements. In addition to the disclosure statement, the financial institution
is required to provide you with a financial statement each year. It may be
necessary to retain and refer to statements for more than one year in order to
evaluate the investment performance of your IRA and in order that you will know
how to report IRA distributions for tax purposes.
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SIMPLE IRA DISCLOSURE STATEMENT [AIM LOGO APPEARS HERE]
RIGHT TO REVOKE YOUR SIMPLE IRA ACCOUNT: You may revoke your SIMPLE IRA within
seven days after you sign the SIMPLE IRA Plan Application by hand delivering or
mailing a written notice to the name and address indicated on the SIMPLE IRA
Plan Application. If you revoke your account by mailing a written notice, such
notice must be postmarked by the seventh day after you sign the Plan
Application. If you revoke your SIMPLE IRA within the seven-day period you will
receive a refund of the entire amount of your contributions to the SIMPLE IRA
without any adjustment for earnings or any administrative expenses. If you
exercise this revocation, we are still required to report certain information to
the IRS.
GENERAL REQUIREMENTS OF A SIMPLE IRA:
1. All SIMPLE contributions must be made in cash, unless you are making a
rollover contribution or transfer, and the Custodian accepts such noncash
assets.
2. The only types of contributions permitted to be made to this SIMPLE IRA are
salary reduction contributions and employer contributions under the
employer's SIMPLE Retirement Plan.
3. The custodian of your SIMPLE IRA must be a bank, savings and loan
association, credit union or person who is approved to act in such a
capacity by the Secretary of the Treasury.
4. No portion of your SIMPLE IRA funds may be invested in life insurance
contracts.
5. Your interest in your SIMPLE IRA must be fully vested and is nonforfeitable
at all times.
6. The assets in your SIMPLE IRA may not be commingled with other property
except in a common trust fund or common investment fund.
7. You may not invest the assets of your SIMPLE IRA in collectibles (as
described in Section 408(m) of the Internal Revenue Code.) A collectible is
defined as any work of art, rug or antique, metal or gem, stamp or coin,
alcoholic beverage, or any other tangible personal property specified by the
IRS. However, if the Custodian permits, specially minted U.S. Gold and
Silver bullion coins and certain state-issued coins are permissible SIMPLE
IRA investments.
8. Your interest in your SIMPLE IRA must begin to be distributed to you by the
April 1st following the calendar year you attain the age of 70-1/2. The
methods of distribution, election deadlines and other limitations are
described in detail below.
9. For purposes of the SIMPLE IRA Plan rules, in the case of an individual who
is not a self-employed individual, compensation means the amount described
in section 6051(a)(3) which includes wages, tips and other compensation from
the employer subject to income tax withholding under section 3401(a), and
amounts described in section 6051(a)(8), including elective contributions
made under a SIMPLE plan, and compensation deferred under a section 457
plan. In the case of a self-employed individual, compensation means net
earnings from self-employment determined under section 1402(a), prior to
subtracting any contributions made under the SIMPLE plan on behalf of the
individual.
10. Contributions to a SIMPLE IRA are excludible from federal income tax and not
subject to federal income tax withholding when made to the SIMPLE IRA.
Salary reduction contributions are subject to FICA, FUTA or RRTA tax when
made and must be reported on the employee's Form W-2 wage statement.
Matching and nonelective employer contributions made to a SIMPLE IRA are not
subject to FICA, FUTA or RRTA and are not required to be reported on Form
W-2.
11. A SIMPLE IRA must be established by or on behalf of an employee prior to the
first date by which a contribution is required to be deposited into the
SIMPLE IRA.
ELIGIBLE EMPLOYEES: Under a SIMPLE Retirement Plan established by an Eligible
Employer, all employees of the employer who received at least $5,000 in
compensation from the employer during any two preceding calendar years, whether
or not consecutive, and who are reasonably expected to receive at least $5,000
in compensation during the calendar year, must be eligible to participate in
the SIMPLE Plan for the calendar year. An employer may impose less restrictive
eligibility requirements, such as eliminating or reducing the prior year
compensation requirements, the current year compensation requirement, or both,
under its SIMPLE Plan.
An employer, at its option, may exclude from eligibility employees who are
included in a unit of employees covered by an agreement that the Secretary of
Labor finds to be a collective bargaining agreement between employee
representatives and one or more employers, if there is evidence that retirement
benefits were the subject of good faith bargaining between such employee
representatives and such employer or employers; in the case of a trust
established or maintained pursuant to an agreement that the Secretary of Labor
finds to be a collective bargaining agreement between air pilots represented in
accordance with Title II of the Railway Labor Act and one or more employees, all
employees not covered by that agreement; and employees who are nonresident
aliens and who received no earned income from the employer that constitutes
income from sources within the United States.
PARTICIPATION IN ANOTHER PLAN: An eligible employee may participate in an
employer's SIMPLE Plan, even if he or she also participates in a plan of a
different employer for the same year. However, the employee's salary reduction
contributions are subject to the limitation of section 402(g), which provides an
aggregate limit on the exclusion for elective deferrals for any individual.
Also, an eligible employee who participates in an employer's SIMPLE plan and an
eligible deferred compensation plan described in section 457(b) is subject to
the limitation described in section 457(c). The employee is responsible for
monitoring compliance with these limitations.
ELIGIBLE EMPLOYERS: SIMPLE plans may be established by employers (including
tax-exempt employers and governmental entities) that had no more than 100
employees who earned $5,000 or more in compensation during the preceding
calendar year. For purposes of the 100-employee limitation, all employees
employed at any time during the calendar year are taken into account,
regardless of whether they are eligible to participate in the SIMPLE plan. This
means that otherwise excludible employees (i.e., certain union employees,
nonresident aliens with no U.S.-source income, and those employees who have not
met the plan's minimum eligibility requirements) must be taken into account.
SIMPLE PLAN CONTRIBUTIONS:
ELECTIVE DEFERRALS (SALARY REDUCTION CONTRIBUTIONS) -- A salary reduction
contribution is a contribution made pursuant to an employee's election to have
an amount contributed to his or her SIMPLE IRA, rather than have the amount
paid directly to the employee in cash. An eligible employee must be permitted
to elect to have salary reduction contributions made at the level specified by
the employee, expressed as a percentage of compensation for the year or as a
specific dollar amount. The maximum salary reduction contribution per calendar
year may not exceed $6,000, subject to cost of living adjustments. Salary
reduction contributions may not begin until the eligible employee completes a
form provided by the employer designed to permit the employee to elect the
salary reduction percentage or specific dollar amount. An employer may not
place any restrictions on the amount of an employee's salary reduction
contributions (e.g., by limiting the contribution percentage), except to the
extent needed to comply with the annual limit.
EMPLOYER CONTRIBUTIONS -- TWO OPTIONS
1. MATCHING CONTRIBUTIONS: Under a SIMPLE plan, an employer is generally
required to make a contribution on behalf of each eligible employee in an
amount equal to the employee's salary reduction contributions, up to a limit of
3% of the employee's compensation for the entire calendar year.
The 3% limit on matching contributions is permitted to be reduced for a
calendar year at the election of the employer, but only if: the limit is not
reduced below 1%; the limit is not reduced for more than two years out of the
five-year period that ends with and includes the year for which the election is
effective; and employees are notified of the reduced limit within a reasonable
period of time before the 60-day election period during which employees can
enter into salary reduction agreements as described below.
In determining whether the limit was reduced below 3% for a year, any year
before the first year in which an employer (or a predecessor employer)
maintains a SIMPLE plan will be treated as a year for which the limit was 3%.
If an employer chooses to make nonelective contributions for a year in lieu of
matching contributions, that year also will be treated as a year for which the
limit was 3%.
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2. NONELECTIVE CONTRIBUTIONS: Under a SIMPLE plan, an employer may make
nonelective contributions in lieu of matching contributions. These nonelective
contributions must be equal to 2% of each eligible employee's compensation for
the entire calendar year, regardless of whether the employee elects to make
salary reduction contributions for the calendar year. The employer may, but is
not required to, limit nonelective contributions to eligible employees who have
at least $5,000 (or some lower amount selected by the employer) of compensation
for the year. For purposes of this 2% nonelective contribution only, the
compensation taken into account must be limited to the amount of compensation
under section 401(a)(17) for the year. For 1997, this limit is $160,000 and will
be adjusted in accordance with the cost of living.
An employer may substitute the 2% nonelective contribution for the matching
contribution for a year only if eligible employees are notified within a
reasonable period of time before the 60-day election period during which
employees can enter into salary reduction agreements that a 2% nonelective
contribution will be made instead of a matching contribution.
EMPLOYEE ELECTIONS: During the 60-day period immediately preceding
January 1st of a calendar year (i.e., November 2 to December 31 of the preceding
calendar year), an eligible employee must be given the right to enter into a
salary reduction agreement for the calendar year, or to modify a prior agreement
(including reducing the amount subject to this agreement to $0). However, for
the year in which the employee becomes eligible to make salary reduction
contributions, the period during which the employee may enter into a salary
reduction agreement or modify a prior agreement is a 60-day period that includes
either the date the employee becomes eligible or the day before that date. For
example, if an employer establishes a SIMPLE plan effective as of July 1, 1997,
each eligible employee becomes eligible to make salary reduction contributions
on that date and the 60-day period must begin no later than July 1 and cannot
end before June 30, 1997.
During these 60-day periods, employees have the right to modify their
salary reduction agreements without restrictions. In addition, for the year in
which an employee becomes eligible to make salary reduction contributions, the
employee must be able to commence these contributions as soon as the employee
becomes eligible, regardless of whether the 60-day period has ended. An employer
may, but is not required to, provide additional opportunities or longer periods
for permitting eligible employees to enter into salary reduction agreements or
to modify prior agreements.
An employee must be given the right to terminate a salary reduction
agreement for a calendar year at any time during the year even if this is
outside a SIMPLE plan's normal election period. The employer's SIMPLE plan may,
however, provide that an employee who terminates a salary reduction agreement
at any time other than the normal election period is not eligible to resume
participation until the beginning of the next calendar year.
EMPLOYER ADMINISTRATIVE AND NOTIFICATION REQUIREMENTS: An employer must notify
each employee, immediately before the employee's 60-day election period, of the
employee's opportunity to enter into a salary reduction agreement or to modify
a prior agreement. If applicable, this notification must disclose an employee's
ability to select the financial institution that will serve as the trustee or
custodian of the employee's SIMPLE IRA. Such notification must also include the
Summary Description required under section 408(1)(2)(B). Such notification must
also include whether the employer will be making either matching contributions
(including the employer's election to reduce the matching contribution below
3%) or nonelective contributions as previously described.
If an eligible employee who is entitled to a contribution under the
employer's SIMPLE plan is unwilling or unable to establish a SIMPLE IRA with
any financial institution prior to the date on which the contribution is
required to be made to the SIMPLE IRA of the employee, the employer may execute
the necessary SIMPLE IRA documents on the employee's behalf with a financial
institution selected by the employer.
The employer must deliver the salary reduction contributions to the
financial institution maintaining the SIMPLE IRA as of the earliest date on
which the contributions can reasonably be segregated from the employer's
general assets, but no later than the close of the 30-day period following the
last day of the month in which amounts would otherwise have been payable to
the employee in cash.
Matching and nonelective employer contributions must be made to the
financial institution maintaining the SIMPLE IRA no later than the due date for
filing the employer's income tax return, including extensions, for the taxable
year that includes the last day of the calendar year for which the
contributions are made.
ROLLOVERS:
ROLLOVER CONTRIBUTIONS FROM ANOTHER SIMPLE IRA - A rollover contribution to
this SIMPLE IRA is only permitted from another SIMPLE IRA. A rollover
contribution from another SIMPLE IRA is any amount the participant receives
from one SIMPLE IRA and redeposits some or all of it into this SIMPLE IRA. The
participant is not required to roll over the entire amount received from the
first SIMPLE IRA. However, any amount you do not roll over will be taxed at
ordinary income tax rates for federal income tax purposes and may also be
subject to an additional tax if the distribution is a premature distribution
described below.
ROLLOVER DISTRIBUTIONS FROM A SIMPLE IRA - A distribution from any SIMPLE
IRA may be rolled over only to another SIMPLE IRA during the two-year period
the participant first participated in the employer's SIMPLE plan. Thus, a
distribution from a SIMPLE IRA during that two-year period qualifies as a
rollover contribution (and is not includible in gross income of the
participant) only if the distribution is paid into another SIMPLE IRA and
satisfies the other requirements that apply to all IRA rollovers under section
408(d)(3). SIMPLE IRAs may never be rolled into an employer's plan, such as a
qualified plan or section 403(b) plan. After this two-year period, a
distribution from a SIMPLE IRA may be rolled over to any IRA maintained by the
individual. This two-year period begins on the first day on which contributions
made by the individual's employer are deposited in the individual's SIMPLE IRA.
SPECIAL RULES THAT APPLY TO ROLLOVERS -
o The rollover must be completed no later than the 60th day after the day the
distribution was received by you.
o You may have only one IRA-to-IRA rollover during a 12-consecutive-month
period measured from the date you received a distribution of an IRA which
was rolled over to another IRA. (See IRS Publication 590 for more
information).
o The same property you receive in a distribution must be the same property
you roll over into the second IRA. For example, if you receive a
distribution from an IRA of property, such as stocks, that same stock must
be rolled over into the second IRA.
o You are required to make an irrevocable election indicating that this
transaction will be treated as a rollover contribution.
o You are not required to receive a complete distribution from your IRA in
order to make a rollover contribution into another IRA, nor are you
required to roll over the entire amount you received from the first IRA.
o If you inherit an IRA due to the death of the participant, you may not roll
this IRA into your own IRA unless you are the spouse of the decedent.
o If you are age 70 1/2 or older and wish to roll over to another IRA, you
must first satisfy the minimum distribution requirement for that year and
then the rollover of the remaining amount may be made.
o Rollover contributions to a SIMPLE IRA may not be made from a qualified
plan, 403(b) plan, or any other IRA that is not a SIMPLE IRA.
EXCESS DEFERRALS: Excess elective deferrals (amounts in excess of the $6,000
SIMPLE elective deferral limit) are includible in your gross income in the
calendar year of deferral. Income on the excess elective deferrals is
includible in your income in the year of withdrawal from the SIMPLE IRA. You
should withdraw excess elective deferrals and any allocable income, from your
SIMPLE IRA by April 15 following the year to which the deferrals relate. These
amounts may not be transferred or rolled over tax-free to another SIMPLE IRA.
If you fail to withdraw excess elective deferrals, and any allocable income, by
the following April 15th, the excess elective deferrals will be subject to the
IRA contribution limitations of sections 219 and 408 of the Code and thus may
be considered an excess contribution to your IRA. Such excess deferrals may be
subject to a 6% excise tax for each year they remain in your SIMPLE IRA. Income
on excess elective deferrals in includible in your gross income in the year you
withdraw it from your IRA and must be withdrawn by April 15 following the
calendar year to which the deferrals relate. Income withdrawn from the IRA
after that date may be subject to a 10% tax (or 25% if withdrawn within the
first two years of participation) on early distributions. The rules for
determining and allocating income attributable to excess elective deferrals and
other excess SIMPLE contributions are the same as those governing regular IRA
excess contributions. The trustee or custodian of your SIMPLE IRA will inform
you of the income allocable to such excess amounts.
DISTRIBUTIONS: In general, all distributions from a SIMPLE IRA are subject to
federal income tax by the payee or distributee, whichever the case may be. When
you start withdrawing from your SIMPLE IRA, you may take the distributions in
regular payments, random withdrawals or in a single-sum payment. Generally, all
amounts distributed to you from your SIMPLE IRA are included in your gross
income in the taxable year in which they are received. However, if you have
made nondeductible contributions to any regular IRA as permitted under section
408(o) of the Code, the nontaxable portion of the distribution, if any, will be
a percentage based upon the ratio of your unrecovered nondeductible
contributions to the aggregate of all IRA balances, including SEP, SIMPLE and
rollover contributions, as of the end of the year in which you take the
distribution, plus distributions from the account during the year. All taxable
distributions from your SIMPLE IRA are taxed at ordinary income tax rates for
federal income tax purposes and
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are not eligible for either capital gains treatment or 5/10 year averaging. An
employer may not require an employee to retain any portion of the contribution
in the SIMPLE IRA or otherwise impose any withdrawal restrictions.
PREMATURE DISTRIBUTIONS -- In general, if you are under age 59 1/2 and
receive a distribution from your SIMPLE IRA account, a 10% additional income tax
will apply to the taxable portion of the distribution, unless the distribution
is received due to death; disability; a series of substantially equal periodic
payments at least annually over your life expectancy or the joint life
expectancy of you and your designated beneficiary; medical expenses that exceed
7.5% of your adjusted gross income; health insurance premiums paid by certain
unemployed individuals; a qualifying rollover distribution; or the timely
withdrawal of an excess deferral plus income attributable. If you request a
distribution in the form of a series of substantially equal payments, and you
modify the payments before five years have elapsed and before attaining age
59 1/2, the 10% additional income tax will apply retroactively to the year
payments began through the year of such modification. In addition, if you
request a distribution from your SIMPLE IRA within your first two years of
participation in the SIMPLE plan and none of the exceptions listed above applies
to the distribution, the normal 10% additional income tax referred to earlier is
increased to 25%.
AGE 70 1/2 REQUIRED MINIMUM DISTRIBUTIONS -- You are required to begin
receiving minimum distributions from your SIMPLE IRA by your required
beginning date (the April 1 of the year following the year you attain age
70 1/2). The year you attain age 70 1/2 is referred to as your "first
distribution calendar year." Your minimum distribution is based upon the value
of your account at the end of the prior year (less any required distributions
you received between January 1 and April 1 of the year following your first
distribution calendar year) by the joint life expectancy of you and your
designated beneficiary. If you do not have a designated beneficiary then the
minimum distribution will be based upon your single life expectancy.
As you can see, who you designate as beneficiary under your SIMPLE IRA
will affect the period over which distributions may be made. If you have more
than one primary beneficiary, generally the beneficiary with the shortest life
expectancy will be the measuring life expectancy used for determining the
period over which distributions will be made. If no beneficiary is named or
you name a beneficiary which is not an individual (i.e., your estate),
distributions will be based upon your single life expectancy.
By the April 1 following your first distribution calendar year, you must
make certain elections on a form provided by the Custodian. If no election is
made, you will be deemed to have elected to take your distributions over a
period not to exceed your single life expectancy. The required distributions
for the second distribution calendar year and for each subsequent distribution
calendar year must be made by December 31 of such year.
Unless otherwise elected by the Custodian (or by you, if the Custodian
permits) in determining the amount to be distributed for the second
distribution calendar year and subsequent distribution calendar years, your
life expectancy (and your designated beneficiary's life expectancy) shall not
be recalculated. If the Custodian elects (or you elect, if the Custodian
permits) to recalculate your life expectancy or your spouse's life expectancy,
you will generally have a longer period of time over which payments will be
made and therefore the minimum distribution will be less.
CAUTION: If you or your spouse should die, the decedent's life expectancy
that is being recalculated is reduced to zero which will reduce the period of
distribution to the survivor's single life expectancy. If recalculation is not
elected, the death of either person will not have an effect on the payment
period.
In any distribution calendar year you may take more than the required
minimum. However, if you take less than the required minimum with respect to
any distribution calendar year, you are subject to a federal excise tax penalty
of 50% of the difference between the amount required to be distributed and the
amount actually distributed.
MINIMUM DISTRIBUTION INCIDENTAL BENEFIT (MDIB) RULE -- Basically, this
rule specifies that benefits provided under a retirement plan must be for the
primary benefit of a participant rather than for his/her beneficiaries. If your
spouse is your sole beneficiary, these special MDIB rules do not apply. The
amount required to be distributed under the MDIB rule may in some cases be more
than the amount required under the normal age 70 1/2 required minimum
distribution rules. If someone other than or in addition to your spouse is a
named primary beneficiary, the minimum distribution required is the greater of
the amount determined under the regular 70 1/2 rules and the amount determined
under the MDIB rules. The minimum amount to be distributed under the MDIB rules
is the amount determined by taking the balance in your SIMPLE IRA account and
dividing it by a factor taken from an IRS table specified in IRS regulations.
The table provides life expectancies for you and a beneficiary who is assumed
to be 10 years younger.
DEATH DISTRIBUTIONS -- If you die after your required beginning date, the
balance in your SIMPLE IRA will be distributed in a manner which is at least as
rapid as the method of distribution being used on the date of your death. If
you die before your required beginning date, the balance in your SIMPLE IRA
must generally be distributed within five years from the date of your death.
However your beneficiary(ies) may elect to receive the balance in your account
over the single life expectancy of your designated beneficiary if distributions
begin no later than the end of the year containing the one year anniversary of
your death. In addition, if your only beneficiary is your surviving spouse,
distributions need not commence until December 31st of the year you would have
attained age 70 1/2.
PROHIBITED TRANSACTIONS -- If you or your beneficiary engage in a
prohibited transaction (as defined under Section 4975 of the Internal Revenue
Code) with your SIMPLE IRA, it will lose its tax exemption and you must include
the value of your account in your gross income for that taxable year. If you
pledge any portion of your SIMPLE IRA as collateral for a loan, the amount so
pledged will be treated as a distribution and will be included in your gross
income for that year.
INCOME TAX WITHHOLDING -- All withdrawals from your SIMPLE IRA (except a
direct transfer) are subject to federal income tax withholding. You may,
however, elect not to have withholding apply to your SIMPLE IRA distribution in
most cases. If withholding does apply to your distribution, it is at the rate
of 10% of the amount of the distribution.
DESIGNATED FINANCIAL INSTITUTION "DFI":
In general, under section 408(p), an employer must permit an employee to select
the financial institution for the SIMPLE IRA to which the employer will make
all contributions on behalf of the employee. In this case, the financial
institution is referred to as a "Non-DFI." Alternatively, under section
408(p)(7), an employer may require that all SIMPLE contributions initially be
made to a single designated financial institution selected by the employee. In
this case, the financial institution is referred to as a "DFI." Refer to your
employer's SIMPLE Retirement Plan document to determine if the financial
institution is a DFI or a Non-DFI.
USE OF A DESIGNATED FINANCIAL INSTITUTION "DFI" -- If an employer
requires that all SIMPLE contributions initially be made to a DFI, the
following requirements must be met:
1. The employer and the financial institution must agree that the
financial institution will be a DFI for the employer's SIMPLE plan;
2. The DFI must agree that, if a participant elects before the
expiration of the employee's 60-day election period, the
participant's balance will be transferred without cost or penalty to
another SIMPLE IRA (or after the two-year period no longer applies,
to any IRA) to a financial institution selected by the participant;
and
3. Each participant is given written notification describing the
procedures under which, if a participant so elects, the participant's
balance will be transferred without cost or penalty to another SIMPLE
IRA (or after the two-year period no longer applies, to any IRA) to a
financial institution selected by the participant.
If the participant elects before the expiration of the 60-day election
period to have the balance transferred without cost or penalty as described
above, such election is valid only with respect to the balance attributable to
SIMPLE contributions for the calendar year following that 60-day election
period (or, for the year in which an employee becomes eligible to make salary
reduction contributions for the remainder of that year) and subsequent calendar
years if such election so provides.
If the participant timely elects the transfer of the balance without cost
or penalty as described above, the participant's balance must be transferred on
a reasonably frequent basis, such as on a monthly basis. If a participant
timely elects this transfer without cost or penalty, the Custodian reserves the
right to restrict the investment to a specified investment option until
transferred, even though a variety of investment options are available with
respect to contributions that the participant has not elected to transfer.
A transfer is deemed to be made without cost or penalty if no liquidation,
transaction, redemption or termination fee, or any commission, load (whether
front-end or back-end) or surrender charge or similar fee or charge is imposed
with respect to the balance being transferred that the participant has filed a
timely election with the DFI. However, the DFI can charge a reasonable annual
administrative fee to a SIMPLE IRA from which balances must be transferred in
accordance with the participant's timely transfer election.
In order to timely elect a transfer without cost or penalty, the
participant must indicate such election on the SIMPLE IRA Plan Application
attached hereto and must be received by the DFI no later than the expiration of
the 60-day election period applicable to the employee. If the participant fails
to timely elect such transfers without cost or penalty, the DFI reserves the
right to charge any or all fees and expenses described in Section 8.05 of this
SIMPLE IRA plan agreement.
USE OF A NONDESIGNATED FINANCIAL INSTITUTION "NON-DFI" -- If the
employer's SIMPLE plan permits the participants to select their own financial
institution to serve as trustee or custodian of the SIMPLE IRA, the rules
explained above do not apply and the Custodian may charge any and all fees
described in Section 8.05 of the SIMPLE IRA plan agreement.
TRANSFERS DEFINED -- A direct transfer is a payment from this SIMPLE IRA
directly to another trustee or custodian of a SIMPLE IRA (or, after the
two-year period no longer applies, to the trustee or custodian of any IRA).
Transfers do not constitute a distribution since you are never in receipt of
the funds. The monies
31
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are transferred directly to the new trustee or custodian. If you should transfer
all or a portion of your SIMPLE IRA to your former spouse's IRA under a divorce
decree (or under a written instrument incident to divorce) or separation
instrument, you will not be deemed to have made a taxable distribution, but
merely a transfer. The portion so transferred will be treated at the time of the
transfer as the IRA of your spouse or former spouse. If your spouse is the
beneficiary of your SIMPLE IRA, in the event of your death, your spouse may
"assume" your SIMPLE IRA. The assumed IRA is then treated as your surviving
spouse's IRA.
SUMMARY DESCRIPTION REQUIREMENTS: In general, the Custodian of any
SIMPLE IRA must annually provide to the employer maintaining the SIMPLE plan a
Summary Description early enough to allow the employer to meet its notification
obligations. If the Custodian of this SIMPLE IRA is a DFI, the Summary
Description will be provided directly to the employer by the Custodian in the
underlying SIMPLE plan agreement. If the Custodian of this SIMPLE IRA is a
Non-DFI, the Summary Description will be provided directly to the employee by
the Custodian. The employee agrees to have the employer complete certain
information contained on the Summary Description with respect to the employer's
SIMPLE plan provisions. A sample Summary Description for a Non-DFI is located on
the following page. The Custodian of a "transfer SIMPLE IRA" is not required to
provide this Summary Description. A SIMPLE IRA is a "transfer SIMPLE IRA" if it
is not a SIMPLE IRA to which the employer has made contributions under the
SIMPLE plan.
PROCEDURES FOR WITHDRAWALS: All distributions from this SIMPLE IRA
must be requested in writing on a form provided to the participant by the
Custodian. After the withdrawal form has been completed and executed by the
recipient, the form must be either hand delivered to the Custodian during normal
business hours or mailed to the Custodian by first class mail, certified or
registered mail prepaid through the U.S. Postal Service, or through any means of
an expedited delivery service. After receipt of a properly executed withdrawal
form, the Custodian will process the distribution as soon as administratively
feasible.
FEDERAL ESTATE AND GIFT TAXES: Generally, there is no specific exclusion for
SIMPLE IRAs under the estate tax rules. Therefore, in the event of your death,
your SIMPLE IRA balance will be includible in your gross estate for federal
estate tax purposes. However, if your surviving spouse is the beneficiary of
your SIMPLE IRA, the amount in your SIMPLE IRA may qualify for the marital
deduction available under Section 2056 of the Internal Revenue Code. A transfer
of property for federal gift tax purposes does not include an amount which a
beneficiary receives from a SIMPLE IRA plan.
PENALTIES: If you are under age 59 1/2 and receive a premature distribution from
your SIMPLE IRA, an additional 10% (or 25% for certain SIMPLE IRA distributions)
income tax will apply on the taxable amount of the distribution. If you make an
excess deferral to your SIMPLE IRA and it is not corrected on a timely basis, an
excise tax of 6% is imposed on the excess amount. This tax will apply each year
to any part or all of the excess which remains in your account. If you are age
70 1/2 or over or if you should die, and the appropriate required minimum
distributions are not made from your SIMPLE IRA, an additional tax of 50% is
imposed upon the difference between what should have been distributed and what
was actually distributed.
For tax years ending before 1/1/97, you will be taxed an additional 15% on
any amount you receive and include in income during a calendar year from
qualified plans, TSAs and all IRAs which exceeds the greater of $150,000
(unindexed) or $112,500 (indexed for cost of living). Before you receive an
excess distribution, you should seek advice from your tax advisor with respect
to the application of these rules. For tax years 1997, 1998 and 1999, the 15%
excess distribution tax will not apply. In the event of your death, your estate
may be subject to a 15% tax on the "excess accumulation" in all of your
qualified plans, TSAs and IRAs. You should seek the advice of your own tax
advisor with respect to the application of this excess accumulation excise tax.
You must file IRS Form 5329 with the Internal Revenue Service for any year an
additional tax is due.
IRS APPROVAL AS TO FORM: This SIMPLE IRA Custodial Agreement has been approved
by the Internal Revenue Service as to form. This is not an endorsement of the
plan in operation or of the investments offered.
ADDITIONAL INFORMATION: You may obtain further information on IRAs and SIMPLE
IRAs from your District Office of the Internal Revenue Service. In particular
you may wish to obtain IRS Publication 590 (Individual Retirement Arrangements).
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EXHIBIT 14(f)
[AIM LOGO APPEARS HERE]
ROTH IRA APPLICATION
TO OPEN YOUR AIM ROTH IRA ACCOUNT.
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Complete Sections 1-9.
Return completed application and check to: A I M Fund Services, Inc., P.O. Box 4739, Houston, TX 77210-4739. Phone: 800-959-4246.
Minors cannot open an AIM Roth IRA account.
1 INVESTOR INFORMATION (Please print or type.)
Name ________________________________________________________________________________________________________________________
First Middle Last
Address _____________________________________________________________________________________________________________________
Street
_____________________________________________________________________________________________________________________________
City State ZIP Code
Social Security Number _____________________________________________________________________ Birth Date _____ /_____ /_____
(Required to Open Account) Month Day Year
Home Telephone (_____)_______________________________________Work Telephone (_____)__________________________________________
2 DEALER INFORMATION (To be completed by securities dealer.)
Name of Broker/Dealer Firm _________________________________________________________________________________________________
Home Office Address _________________________________________________________________________________________________________
Representative Name and Number _____________________________________________________________________________________________
Authorized Signature of Dealer _____________________________________________________________________________________________
Branch Address ______________________________________________________________________________________________________________
Branch Telephone _____________________________________________________________________________________________________________
/ / Authorized for NAV purchase. (If authorized for NAV purchase, other than the Broker, please attach NAV Certification
Form.)
3 CONTRIBUTION TYPE
/ / REGULAR - Contribution for tax year 19 _____ .
/ / CONVERSION - Represents a conversion from a Traditional IRA account.
/ / TRANSFER - Transfer from another Roth IRA account. Please complete Roth IRA Asset-Transfer Form.
4 FUND INVESTMENT
Indicate Fund(s) and contribution amount(s).
MAKE CHECK PAYABLE TO INVESCO TRUST COMPANY. Minimum purchase to open a Roth IRA is $250.
Fund Amount of Investment Class of Shares (check one)
/ / AIM Advisor Flex Fund $_________________ / / Class A / / Class C
/ / AIM Advisor International Value Fund $________________ / / Class A / / Class C
/ / AIM Advisor Large Cap Value Fund $________________ / / Class A / / Class C
/ / AIM Advisor MultiFlex Fund $________________ / / Class A / / Class C
/ / AIM Advisor Real Estate Fund $________________ / / Class A / / Class C
/ / AIM Aggressive Growth Fund $________________ Fund currently closed to new investors
/ / AIM Balanced Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Blue Chip Fund $________________ / / Class A / / Class B / / Class C
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/ / AIM Capital Development Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Charter Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Constellation Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Global Aggressive Growth Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Global Growth Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Global Income Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Global Utilities Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Growth Fund $________________ / / Class A / / Class B / / Class C
/ / AIM High Yield Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Income Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Intermediate Government Fund $________________ / / Class A / / Class B / / Class C
/ / AIM International Equity Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Limited Maturity Treasury Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Money Market Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Cash Reserve Shares
/ / AIM Value Fund $________________ / / Class A / / Class B / / Class C
/ / AIM Weingarten Fund $________________ / / Class A / / Class B / / Class C
Total $________________
If no class of shares is selected, Class A shares will be purchased, except in the case of AIM Money Market Fund, where AIM
Cash Reserve Shares will be purchased. If you are funding your retirement account through a transfer, please indicate the
contribution amounts both in this section and in Section 3 of the Asset-Transfer Form.
5 TELEPHONE EXCHANGE PRIVILEGE
Unless indicated below, I authorize A I M Fund Services, Inc., to accept instructions from any person to exchange shares in my
account(s) by telephone in accordance with the procedures and conditions set forth in the Fund's current prospectus.
/ / I DO NOT want the Telephone Exchange Privilege.
6 DOLLAR-COST AVERAGING PLAN (Must be under the same registration and class of shares with the exception of AIM Cash
Reserve Shares of the AIM Money Market Fund, which may only be exchanged for Class A shares of another AIM fund.)
I have at least $5,000 in shares in my __________________________ Fund, for which no certificates have been issued, and I
would like to exchange:
$ _________________ into the ______________________________ Fund, Account # ____________________________
($50 minimum)
$__________________ into the ______________________________ Fund, Account # ____________________________
($50 minimum)
$__________________ into the ______________________________ Fund, Account # ____________________________
($50 minimum)
on a / / monthly / / quarterly basis starting in the month of ________ on or near the / / 10th or / / 25th of the
month.
7 REDUCED SALES CHARGE (optional)
RIGHT OF ACCUMULATION (This option is for Class A shares only.)
I apply for Right of Accumulation reduced sales charges based on the following accounts in The AIM Family of Funds-Registered
Trademark-:
Fund(s)/ Account No.(s) _______________________ Social Security No.(s)_________________________________
_______________________ __________________________________
_______________________ __________________________________
LETTER OF INTENT
I agree to the Letter of Intent provisions in the Prospectus. I plan to invest during a 13-month period a dollar amount of at
least:
/ / $25,000 / / $50,000 / / $100,000 / / $250,000 / / $500,000 / / $1,000,000
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8 BENEFICIARY INFORMATION
I hereby designate the following beneficiary(ies) to receive the balance in my Roth IRA custodial account upon my death. To be
effective, the designation of beneficiary and any subsequent change in designation of beneficiary must be filed with the
Custodian prior to my death. The balance of my account shall be distributed in equal amounts to the beneficiary(ies) who
survives me. If no beneficiary is designated or no designated beneficiary or contingent beneficiary survives me, the balance
in my Roth IRA will be distributed to the legal representatives of my estate. This designation revokes any prior designations.
I retain the right to revoke this designation at any time.
I hereby certify that there is no legal impediment to the designation of this beneficiary.
PRIMARY BENEFICIARY(IES)
Name _____________________________________________ __________ % Relationship _________________________
Address _____________________________________________________________________________________________________
Street City State ZIP Code
Beneficiary's Social Security Number _________________________________ Birth Date _____ /_____ /_____
Month Day Year
Name__________________________________________________ _________ % Relationship_________________________
Address ___________________________________________________________________________________________________
Street City State ZIP Code
Beneficiary's Social Security Number______________________________________ Birth Date _____ /_____ /_____
Month Day Year
CONTINGENT BENEFICIARY
In the event that I die and no primary beneficiary listed above is alive, distribute all Fund accounts in my Roth IRA to the
following contingent beneficiary(ies) who survives me, in equal amounts unless otherwise indicated. If more than one, please
attach a list.
Name _________________________________________________ _________ % Relationship______________________________
Address __________________________________________________________________________________________________________
Street City State ZIP Code
Beneficiary's Social Security Number_______________________________________ Birth Date _____ /_____ /_____
Month Day Year
9 SERVICE ASSISTANCE
Our knowledgeable Client Service Representatives are available to assist you between 7:30 a.m. and 5:30 p.m. Central time
at 800-959-4246.
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10 AUTHORIZATION AND SIGNATURE
I hereby establish the A I M Distributors, Inc. Roth Individual Retirement
Account (IRA) appointing INVESCO Trust Company as Custodian. I have
received and read the current prospectus of the investment company(ies)
selected in this agreement and have read and understand the Roth IRA
custodial agreement and disclosure statement and consent to the custodial
account fees as specified. I understand that a $10 annual Maintenance Fee
will be deducted early in each December from my AIM Roth IRA.
WITHHOLDING INFORMATION (SUBSTITUTE FORM W-9)
Under the Interest and Dividend Tax Compliance Act of 1983, the Fund
is required to have the following certification: Under the penalties
of perjury I certify by signing this Application as provided below
that:
1. The number shown in Section 1 of this Application is my correct
Social Security (or Tax Identification) Number, and
2. I am not subject to backup withholding either because (a) I have
not been notified by the Internal Revenue Service (the "IRS") that I
am subject to backup withholding as a result of a failure to report
all interest or dividends or (b) the IRS has notified me that I am no
longer subject to backup withholding. (This paragraph (2) does not
apply to real estate transactions, mortgage interest paid, the
acquisition or abandonment of secured property, contributions to an
individual retirement arrangement and payments other than interest and
dividends.)
YOU MUST CROSS OUT PARAGRAPH (2) ABOVE IF YOU HAVE BEEN NOTIFIED BY
THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE
OF UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.
In addition, the Fund hereby incorporates by reference into this
section of the Application either the IRS instructions for Form
W-9 or the substance of those instructions--whichever is
incorporated in the Prospectus.
SIGNATURE PROVISIONS
I, the undersigned Depositor, have read and understand the foregoing
Application and the attached material included herein by reference. In
addition, I certify that the information which I have provided and the
information which is included within the Application and the attached
material included herein by reference is accurate including but not limited
to the representations contained in the Witholding Information section of
this Application above. (The Internal Revenue Service does not require your
consent to any provision of this document other than the certifications to
avoid backup withholding.)
Dated _____ /_____ /_____
Signature of Roth IRA Shareholder ______________________________________
11 MAILING INSTRUCTIONS
Make check payable to INVESCO Trust Company.
Return Application to:
REGULAR MAIL OR OVERNIGHT DELIVERIES ONLY
AIM Fund Services, Inc. AIM Fund Services, Inc.
P.O. Box 4739 11 Greenway Plaza, Suite 763
Houston, TX 77210-4739 Houston, TX 77046
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[AIM LOGO APPEARS HERE]
ROTH IRA ASSET-TRANSFER FORM
USE THIS FORM ONLY WHEN TRANSFERRING ASSETS FROM AN EXISTING ROTH IRA TO AN AIM
ROTH IRA.
THIS FORM IS NOT TO BE USED FOR CONVERSIONS.
Note: Use this form ONLY if you want AIM to request the money directly from
another custodian.
Complete Sections 1-5.
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If you do not already have an AIM Roth IRA, you must also submit an AIM Roth IRA Application. AIM will arrange
the transfer for you.
1 INVESTOR INFORMATION (Please print or type.)
Name_________________________________________________________________________________________________________________________
First Name Middle Last Name
Address______________________________________________________________________________________________________________________
Street
_____________________________________________________________________________________________________________________________
City State Zip Code
Social Security Number______________________________________________________________________ Birth Date _____ /_____ /_____
Month Day Year
Home Telephone (_____)______________________________________________________ Work Telephone(_____)__________________________
2 CURRENT TRUSTEE/CUSTODIAN
Name of Resigning Trustee/Custodian__________________________________________________________________________________________
Account Number of Resigning Trustee/Custodian _____________________________________________________________________________
Address of Resigning Trustee/Custodian_______________________________________________________________________________________
Street
_____________________________________________________________________________________________________________________________
City State Zip Code
Attention _______________________________________________________ Telephone________________________________________________
3 ROTH IRA ACCOUNT INFORMATION
Please deposit proceeds in my / / New AIM Roth IRA* / / Existing AIM Roth IRA Account Number _________________________
INVESTMENT ALLOCATION:
Fund Name ____________________________________________________ Class __________________________ % ______________________
Fund Name ____________________________________________________ Class __________________________ % ______________________
Fund Name ____________________________________________________ Class __________________________ % ______________________
*If this is a new AIM Roth IRA account, you must attach a completed AIM Roth IRA Application. If no class of shares is
selected, Class A shares will be purchased with the exception of the AIM Money Market Fund, where AIM Cash Reserve Shares
will be purchased.
4 TRANSFER INSTRUCTIONS TO RESIGNING TRUSTEE OR CUSTODIAN
OPTION 1: Please liquidate from my Roth IRA account listed in Section 2 and transfer the amount indicated below to my Roth IRA
with INVESCO Trust Company.
Amount to liquidate: / / All / / Partial amount of $_______________
When to liquidate: / / Immediately / / At maturity _____/_____ /_____
OPTION 2: (If the account listed in Section 2 contains shares of an AIM Fund, you may choose to transfer them "in kind.")
Please deposit "in kind" the shares of the AIM Fund held in my account to INVESCO Trust Company. NOTE: ONLY AIM FAMILY OF FUND
SHARES MAY BE TRANSFERRED IN KIND. TO TRANSFER ALL OTHER ASSETS, THEY MUST BE LIQUIDATED.
Amount to transfer "in kind" immediately: / / All / / Partial amount of shares_____________
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5 AUTHORIZATION AND SIGNATURE
I have established a Roth Individual Retirement Account with the AIM Funds and have appointed INVESCO Trust Company as the
successor Custodian. Please accept this as your authorization and instruction to liquidate or transfer in kind the assets
noted above, which your company holds for me.
Your Signature ___________________________________________________________________________________ Date _____ /_____ /_____
Note: Your resigning trustee or custodian may require your signature to be guaranteed. Call that institution for
requirements.
Name of Bank or Brokerage Firm ______________________________________________________________________________________________
Signature Guaranteed by _____________________________________________________________________________________________________
(Name and title)
REMAINDER OF FORM TO BE COMPLETED BY AIM
6 CUSTODIAN ACCEPTANCE
This is to advise you that INVESCO Trust Company, as custodian, will accept the account identified above for:
Depositor's Name ____________________________________________________________________ Account Number ______________________
This transfer of assets is to be executed from fiduciary to fiduciary and will not place the participant in actual receipt
of all or any of the plan assets. No federal income tax is to be withheld from this transfer of assets.
Authorized Signature /s/ illegible Mailing Date _____ /_____ /_____
-------------------------------------------------------------------
(INVESCO Trust Company)
7 INSTRUCTIONS TO RESIGNING TRUSTEE OR CUSTODIAN
Please attach a copy of this form to the check. Return this completed form and completed Roth IRA application to:
INVESCO Trust Company, c/o A I M Fund Services, Inc., P.O. Box 4739, Houston, TX 77210-4739.
Make check payable to INVESCO Trust Company.
Indicate the AIM account number and the Social Security number of the Roth IRA holder on all documents.
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[AIM LOGO APPEARS HERE]
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Form 5305-RA ROTH INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT Do not file
(January 1998) (Under Section 408A of the Internal Revenue Code) with the Internal
Department of the Treasury Revenue Service
Internal Revenue Services
- --------------------------------------------------------------------------------------------------------------------------
Name of depositor Date of birth of depositor Social security number
- --------------------------------------------------------------------------------------------------------------------------
Address of depositor Check if Roth Conversion IRA / /
Check if Amendment / /
- ---------------------------------------------------------------------------------------------------------------------------
Name of Custodian Address or principal place of business or custodian
- ---------------------------------------------------------------------------------------------------------------------------
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The depositor whose name appears above is establishing a Roth individual
retirement account (Roth IRA) under section 408A to provide for his or her
retirement and for the support of his or her beneficiaries after death.
The custodian named above has given the depositor the disclosure statement
required under Regulations section 1.408-6.
The depositor assigned the custodial account $........................
The depositor and the custodian make the following agreement:
- --------------------------------------------------------------------------------
ARTICLE I
1. If this Roth IRA is not designated as a Roth Conversion IRA, then,
except in the case of a rollover contribution described in section 408A(e), the
custodian will accept only cash contributions and only up to a maximum amount of
$2,000 for any tax year of the depositor.
2. If this Roth IRA is designated as a Roth Conversion IRA, no
contributions other than IRA Conversion Contributions made during the same tax
year will be accepted.
ARTICLE II
The $2,000 limit described in Article I is gradually reduced to $0
between certain levels of adjusted gross income (AGI). For a single
depositor, the $2,000 annual contribution is phased out between AGI of
$95,000 and $110,000; for a married depositor who files jointly, between AGI
of $150,000 and $160,000; and for a married depositor who files separately,
between $0 and $10,000. In the case of a conversion, the custodian will not
accept IRA Conversion Contributions in a tax year if the depositor's AGI for
that tax year exceeds $100,000 or if the depositor is married and files a
separate return. Adjusted gross income is defined in section 408A(c)(3) and
does not include IRA Conversion Contributions.
ARTICLE III
The depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE IV
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with
other property except in a common trust fund or common investment fund
(within the meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3), which provides an exception for certain gold, silver, and platinum
coins, coins issued under the laws of any state, and certain bullion.
ARTICLE V
1. If the depositor dies before his or her entire interest is distributed
to him or her and the grantor's surviving spouse is not the sole beneficiary,
the entire remaining interest will, at the election of the depositor or, if the
depositor has not so elected, at the election of the beneficiary or
beneficiaries, either:
(a) Be distributed by December 31 of the year containing the fifth
anniversary of the depositor's death, or
(b) Be distributed over the life expectancy of the designated
beneficiary starting no later than December 31 of the following the year of
the depositor's death.
If distributions do not begin by the date described in (b), distribution
method (a) will apply.
2. In case of distribution method 1.(b) above, to determine the minimum
annual payment for each year, divide the grantor's entire interest in the trust
as of the close of business on December 31 of the preceding year by the life
expectancy of the designated beneficiary using the attained age of the
designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence and subtract 1 for each subsequent year.
3. If the depositor's spouse is the sole beneficiary on the depositor's
date of death, such spouse will then be treated as the depositor.
ARTICLE VI
1. The depositor agrees to provide the custodian with information
necessary for the custodian to prepare any reports required under sections
408(I) and 408A(d)(3)(E). Regulations sections 1.408-5 and 1.408-6, and under
guidance published by the Internal Revenue Service.
2. The custodian agrees to submit reports to the Internal Revenue Service
and the depositor prescribed by the Internal Revenue Service.
ARTICLE VII
Notwithstanding any other articles which may be added or Incorporated, the
provisions of Articles I through IV and this sentence will be controlling. Any
additional articles that are not consistent with section 408A, the related
regulations, and other published guidance will be invalid.
ARTICLE VIII
This agreement will be amended from time to time to comply with the
provisions of the Code, related regulations, and other published guidance. Other
amendments may be made with the consent of the persons whose signatures appear
below.
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17 Cat No. 25094Y Form 5305-RA (1-98)
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ARTICLE IX
The following information is applicable to Roth IRAs, not Traditional IRAs.
The rules regarding Roth IRAs are new. Congress and the Internal Revenue Service
are refining the rules, so the following rules and/or their interpretation are
subject to change.
1. PURSUANT TO THE TERMS of this A I M Distributors, Inc. Individual
Retirement Custodial Account Agreement and the related Roth IRA Application
(referred to herein as the "Roth IRA Adoption Agreement"), the Depositor directs
the Custodian to invest all custodial account funds after deductions for sales
charges and Custodian fees, in shares issued by the investment company or
companies selected by the Depositor on the Roth IRA Adoption Agreement, until
the Depositor hereafter gives the Custodian contrary instructions pursuant to
Article XIII below. The investment companies from which the Depositor may select
are enumerated on the applicable list prepared by A I M Distributors, Inc. (the
"Distributor"), a copy of which accompanies the Adoption Agreement. Such
investment companies are part of "The AIM Family of Funds-Registered
Trademark-," which are managed or advised by subsidiaries of A I M Management
Group Inc. and any such investment company will hereafter be referred to as
"Investment Company."
2. (i) ANNUAL CASH CONTRIBUTIONS:
The Depositor may make annual cash contributions to the account within the
limits specified in Article I. All contributions shall be hand delivered or
mailed to the Custodian by the Depositor, with an indication of the taxable year
to which such contribution relates.
(ii) ROLLOVER CONTRIBUTIONS:
In addition to any annual contributions referred to in Paragraph (i) above,
but subject to this Paragraph (ii), the Depositor may contribute to the account,
at any time, a rollover contribution of such cash or other property as shall
constitute a rollover amount or contribution under section 402(c), 403(a)(4),
403(b)(8), 408(d)(3) or 408A(e) of the Code. The Depositor shall be responsible
for determining whether a rollover to a Roth IRA is permissible under the
Internal Revenues Code, and the timeliness of any rollover. The Custodian will
accept for the account all rollover contributions which consist of cash, and it
may, but shall be under no obligation to, accept any other rollover
contribution. In the case of rollover contributions composed of assets other
than cash, the prospective Depositor shall provide the Custodian with a
description of such assets and such other information as the Custodian may
reasonably require. The Custodian may accept all or any part of such a rollover
contribution if it determines that the assets of which such contribution
consists are either in a medium proper for investment hereunder or that the
assets can be promptly liquidated for cash. The Custodian may reject any
rollover contribution.
The Depositor warrants that any rollover contribution to the account
consists of cash, the same property received in the distribution or, in the case
of amounts distributed to the Depositor from a qualified employer's plan or
annuity, the proceeds from the sale of the same property received in the
distribution.
3. THE DEPOSITOR SHALL BE FULLY AND SOLELY RESPONSIBLE for all taxes,
interest and penalties which might accrue or be assessed by reason of any excess
or impermissible deposit, and interest, if any, earned thereon. Any
contributions made by or on behalf of the Depositor in respect of a taxable year
of the Depositor shall be made by or on behalf of the Depositor to the Custodian
for deposit in the custodial account within the time period for claiming any
income tax deduction for such taxable year. It shall be the sole responsibility
of the Depositor to determine the amount of the contributions made hereunder.
The Depositor shall execute such forms as the Custodian may require in
connection with any contribution hereunder.
ARTICLE X
1. THE CUSTODIAN SHALL from time to time, subject to the provisions of
Articles IV and V, make distributions out of the custodial account to the
Depositor, in such manner and amounts as may be specified in written
instructions of the Depositor. All such instructions shall be deemed to
constitute a certification by the Depositor that the distribution so directed is
one that the Depositor is permitted to receive. A declaration of the Depositor's
intention as to the disposition of an amount distributed pursuant to Article V
hereof shall be in writing and given to the Custodian. The Custodian shall have
no liability with respect to any contribution to the custodial account, any
investment of assets in the custodial account or any distribution therefrom
pursuant to instructions received from the Depositor or pursuant to this
Agreement, or for any consequences to the Depositor arising from such
contributions, investments or distributions including, but not limited to,
excise and other taxes and penalties which might accrue or be assessed by reason
thereof, nor shall the Custodian be under any duty to make any inquiry or
investigation with respect thereto.
2. THE DEPOSITOR SHALL BE fully and solely responsible for all taxes and
penalties which might accrue or be assessed for having failed to make the annual
minimum withdrawal required in any year.
ARTICLE XI
A Depositor shall have the right to designate a beneficiary or
beneficiaries to receive any amounts remaining in his account in the event of
his death. Any prior beneficiary designation may be changed or revoked at any
time by a Depositor by written designation signed by the Depositor on a form
acceptable to, and filed with, the Custodian; provided, however, that such
designation, or change or revocation of a prior designation shall not become
effective until it has been received by the Custodian, nor shall it be effective
unless received by the Custodian no later than thirty days before the death of
the Depositor, and provided further that the last such designation of
beneficiary or change or revocation of beneficiary executed by the Depositor, if
received by the Custodian within the time specified, shall control. Unless
otherwise provided in the beneficiary designation, amounts payable by reason of
the Depositor's death will be paid in equal shares only to the primary
beneficiary or beneficiaries who survive the Depositor, or, if no primary
beneficiary survives the Depositor, to the contingent beneficiary or
beneficiaries who survive the Depositor. If the Depositor had not, by the date
of his death, properly designated a beneficiary in accordance with the preceding
sentences, or if no designated beneficiary survives the Depositor, then the
Depositor's beneficiary shall be the Depositor's estate.
ARTICLE XII
1. ANY ADMINISTRATIVE OR OTHER FEES of the Custodian and its agents for
performing duties pursuant to this Agreement shall be in such amount as shall be
established from time to time. The Depositor agrees to pay the Custodian the
fees specified in its current fee schedule and authorizes the Custodian to
charge the Depositor's custodian account for the amount of such fees.
2. UPON 30 DAYS' PRIOR WRITTEN NOTICE, the Custodian may substitute a new
fee schedule. The Custodian's fees, any income, gift, estate and inheritance
taxes and other taxes of any kind whatsoever, including transfer taxes incurred
in connection with the investment or reinvestment of the assets of the custodial
account, that may be levied or assessed in respect of such assets, and all other
administrative expenses incurred by the Custodian in the performance of its
duties including fees for legal services rendered to the Custodian, may be
charged to the custodial account with the right to liquidate Investment Company
shares for this purpose, or at the Custodian's option, shall be billed to the
Depositor directly.
ARTICLE XIII
1. THIS AGREEMENT SHALL take effect only when accepted and signed by the
Custodian. As directed, the Custodian shall then open and maintain a separate
custodial account for Depositor and invest the initial contribution hereunder in
shares of the Investment Company. Where the Roth IRA Adoption Agreement is
checked for spousal accounts, separate custodial accounts will be opened and
maintained in each spouse's name. The amounts specified in the Roth IRA Adoption
Agreement shall be credited to each spouse's separate custodial account except
that no more than $2,000 shall be credited to either custodial account.
2. THE CUSTODIAN SHALL invest subsequent contributions as directed. If any
such written instructions are not received as required however, or if received,
are in the opinion of the Custodian unclear, or if the accompanying contribution
exceeds $2,000 for the Depositor and/or $2,000 for the Depositor's spouse, the
Custodian may hold or return all or a portion of the contribution uninvested
without liability for loss of income or appreciation, and without liability for
interest, pending receipt of written instructions or clarification.
3. ALL DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS, less charges, received on
Investment Company shares held in the custodial account shall (unless received
in additional such shares) be reinvested in shares of the Investment Company,
which shall be credited to the custodial account. If any distribution on such
shares may be received at the election of the Depositor in additional such
shares or in cash or other property, the Custodian shall elect to receive it in
additional Investment Company shares.
4. ALL INVESTMENT COMPANY SHARES ACQUIRED by the Custodian hereunder shall
be registered in the name of the Custodian (with or without identifying the
Depositor) or of its nominees. The Custodian shall deliver, or cause to be
executed and delivered, to the Depositor all notices, prospectuses, financial
statements, proxies and proxy solicitation materials relating to such Investment
Company shares held in the custodial account. The Custodian shall not vote any
Investment Company shares except in accordance with the written instructions
received from the Depositor.
ARTICLE XIV
1. THE CUSTODIAN SHALL keep adequate records of transactions it is required
to perform hereunder. Not later than six months after the close of each calendar
year or after the Custodian's registration or removal pursuant to Article XV
below, the Custodian shall render to the Depositor or the Depositor's legal
representative a written report or reports reflecting the transactions effected
by it during such period and the assets and liabilities of the custodial account
at the close of the period. Sixty days after rendering such report(s), the
Custodian shall (to the extent permitted by law) be forever released and
discharged from all liability and accountability to anyone with respect to its
acts and transactions shown in or reflected by such report(s), except with
respect to those as to which the Depositor or the Depositor's legal
representative shall have filed written objections with the Custodian within the
latter such sixty-day period.
2. THE CUSTODIAN SHALL receive and invest contributions as directed by the
Depositor, hold and distribute such investments, and keep adequate records and
reports thereon, all in accordance with this Agreement. The parties do not
intend to confer any other fiduciary duties of the Custodian, and none shall be
implied. The Custodian shall not be liable (and assumes no responsibility) for
the
18
<PAGE>
collection of contributions, the deductibility or propriety of any contribution
under this Agreement, or the purposes or propriety of any distribution from the
account, which matters are the responsibility of the Depositor or the
Depositor's legal representative.
3. THE DEPOSITOR, to the extent permitted by law, shall always fully
indemnify the Custodian and save it harmless from any and all liability
whatsoever which may arise in connection with this Agreement and matters which
it contemplates, except that which arises due to the Custodian's negligence and
willful misconduct. The Custodian shall not be obligated or expected to commence
or defend any legal action or proceeding in connection with this Agreement or
such matters unless agreed upon by the Custodian and Depositor or said legal
representative, and unless fully indemnified for so doing to the Custodian's
satisfaction.
4. THE CUSTODIAN MAY conclusively rely upon and shall be protected in
acting upon any written order from the Depositor or the Depositor's legal
representative or any other notice, request, consent, certificate or other
instruments or paper believed by it to be genuine and to have been properly
executed, and as long as it acts in good faith in taking or omitting to take any
other action in reliance thereon.
ARTICLE XV
1. THE CUSTODIAN MAY resign at any time upon 30 days' notice in writing to
the Depositor, and may be removed by the Depositor at any time upon thirty days'
notice in writing to the Custodian. Upon such resignation or removal, the
Depositor shall appoint a successor custodian to serve under this Agreement.
Upon receipt by the Custodian of written acceptance of such appointment by the
successor custodian, the Custodian shall transfer to such successor the assets
of the custodial account and all necessary records (or copies thereof)
pertaining thereto, provided that (at the Custodian's request) any successor
custodian shall agree not to dispose of any such records without the Custodian's
consent. The Custodian is authorized, however, to reserve such assets as it may
deem advisable for payment of any other liabilities constituting a charge on or
against the assets of the custodial account or on or against the Custodian, with
any balance of such reserve remaining after the payment of all such items to be
paid over to the successor custodian.
2. THE CUSTODIAN SHALL NOT be liable for the acts or omissions of such
successor custodian.
3. THE CUSTODIAN, AND EVERY SUCCESSOR CUSTODIAN appointed to serve under
this Agreement, must be a bank (as defined in Section 408(n) of the Code) or
such other person who qualifies with the Internal Revenue Service to serve in
the manner prescribed by Code section 408(a)(2) and satisfies the Custodian,
upon request, as to such qualification.
4. AFTER THE CUSTODIAN HAS transferred the custodial account assets
(including any reserve balance as contemplated above) to the successor
custodian, the Custodian shall be relieved of all further liability with respect
to this Agreement, the custodial account and the assets thereof.
ARTICLE XVI
1. THE CUSTODIAN SHALL terminate the custodial account and pay the
proceeds of the account to the depositor if within 30 days after the resignation
or removal of the Custodian pursuant to Article XV above, the Depositor has not
appointed a successor custodian which has accepted such appointment unless
within that time the Distributor appoints such successor and gives written
notice thereof to the Depositor and the Custodian. The Distributor shall have
the right, but not the duty, to appoint such a successor. Termination of the
custodial account shall be effected by distributing all of the assets therein in
cash or in kind to the Depositor in a lump sum, subject to the Custodian's right
to reserve funds as provided in said Article XV.
2. UPON TERMINATION of the custodial account in any manner provided for in
this Article XVI, this Agreement shall terminate and have no further force and
effect, and the Custodian shall be relieved from all further liability with
respect to this Agreement, the custodial account and all assets thereof so
distributed.
ARTICLE XVII
1. ANY NOTICE FROM THE CUSTODIAN TO THE DEPOSITOR provided for in this
Agreement shall be effective when mailed if sent by first class mail to the
Depositor at the Depositor's last known address as shown on the Custodian's
records. Any notice required or permitted to be given to the Custodian, shall
become effective upon actual receipt by the Custodian at such address as the
Custodian shall provide the Depositor from time to time in writing.
2. THIS AGREEMENT IS accepted by the Custodian and shall be construed and
administered in accordance with the laws of the State of Colorado. The Custodian
and the Depositor hereby waive and agree to waive right to trial by jury in an
action or proceeding instituted in respect to this custodial account. The
Depositor further agrees that the venue of any litigation between him and the
Custodian with respect to the custodial account shall be in the State of
Colorado.
3. THIS AGREEMENT IS intended to qualify under section 408A of the Code as
a Roth IRA and if any provision hereof is subject to more than one
interpretation or any term used herein is subject to more than one construction,
such ambiguity shall be resolved in favor of that interpretation or construction
which is consistent with that intent.
4. ALL PROVISIONS IN THIS AGREEMENT ARE subject to the Code and to
regulations promulgated thereunder. In the event that any one or more of the
provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement.
5. THE CUSTODIAN SHALL have no duties whatsoever except such duties as it
specifically agrees to in writing, and no implied covenants or obligations shall
be read into this Agreement against the Custodian. The Custodian shall not be
liable under this Agreement, except for its own bad faith, gross negligence or
willful misconduct.
6. NO INTEREST, RIGHT OR CLAIM IN OR TO ANY PART of the custodial account
or any payment therefrom shall be assignable, transferable, or subject to sale,
mortgage, pledge, hypothecation, communication, anticipation, garnishment,
attachment, execution, or levy of any kind and the Custodian shall not recognize
any attempt to assign, transfer, sell, mortgage, pledge, hypothecate, commute or
anticipate the same, except as required by law.
7. THE DEPOSITOR HEREBY DELEGATES to the Custodian the power to amend
this Agreement from time to time as it deems appropriate, and hereby consents
to all such amendments, provided, however, that all such amendments are in
compliance with the provisions of the Code and the regulations promulgated
thereunder. All such amendments shall be effective as of the date specified
in a written notice of amendment which will be sent to the Depositor.
INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE OF FORM
This model custodial account agreement may be used by an individual who
wishes to adopt a Roth IRA under section 408A. When fully executed by the
Depositor and the Custodian not later than the time prescribed by law for filing
the Federal income tax return for the Depositor's tax year (not including any
extensions thereof), a Depositor will have a Roth IRA custodial account which
meets the requirements of section 408A. This account must be created in the
United States for the exclusive benefit of the Depositor or his/her
beneficiaries.
DEFINITIONS
CUSTODIAN. The Custodian must be a bank or savings and loan association, as
defined in section 408(n), or other person who has the approval of the Internal
Revenue Service to act as custodian.
DEPOSITOR. The Depositor is the person who establishes the custodial
account.
ROTH IRA FOR NONWORKING SPOUSES
Contributions to a Roth IRA custodial account for a non-working spouse must
be made to a separate Roth IRA custodial account established by the nonworking
spouse.
This form may be used to establish the Roth IRA custodial account for the
nonworking spouse.
An individual's social security number will serve as the identification
number of his or her individual retirement account.
For more information, obtain a copy of the required disclosure statement
from your custodian or get Publication 590, Individual Retirement Arrangements
(IRAs).
SPECIFIC INSTRUCTIONS
ARTICLE IV -- Distribution made under this Article may be made in a single
sum, periodic payment, or a combination of both.
ARTICLE IX -- This article and any that follow it may incorporate
additional provisions that are agreed upon by the Depositor and the Custodian to
complete the agreement. These may include, for example: definitions, investment
powers, voting rights, exculpatory provisions, amendment and termination,
removal of Custodian, Custodian's fees, state law requirements, beginning date
of distributions, accepting only cash, treatment of excess contributions,
prohibited transactions with the Depositor, etc. Use additional pages if
necessary and attach them to this form.
Note: This form may be reproduced and reduced in size for adoption to
passbook or card purposes.
THE AIM FAMILY OF FUNDS-Registered Trademark-
ROTH IRA CUSTODIAL ACCOUNT DISCLOSURE STATEMENT
Under applicable federal regulations, a custodian of a Roth IRA account is
required to furnish each depositor who has established or is establishing a Roth
IRA account with a statement which discloses certain information regarding the
account. INVESCO Trust Company (hereinafter referred to as the "Custodian") is
providing this Disclosure Statement to you in accordance with that requirement,
and this Disclosure Statement contains general information about the The AIM
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Family of Funds-Registered Trademark- Roth IRA Custodial Account (hereinafter
referred to as "Roth IRA"). This Disclosure Statement should be reviewed in
conjunction with both the Roth Individual Retirement Custodial Account agreement
(Form 5305 and any attachments thereto, hereinafter referred to as the
"Custodial Agreement") and the Adoption Agreement for your Roth IRA. You should
review this Disclosure Statement and the Roth IRA documents with your attorney
or tax advisor. The Custodian cannot give tax advice or determine whether or not
the Roth IRA is appropriate for you.
The following information is applicable to Roth IRAs, not Traditional IRAs. The
rules regarding Roth IRAs are new. Congress and the Internal Revenue Service are
refining the rules, so the following rules and/or their interpretation are
subject to change.
A. SEVEN DAY RIGHT TO REVOKE YOUR ROTH IRA.
You may revoke your Roth IRA at any time within 7 business days after the
date the Roth IRA is established, by giving proper notice. For purposes of
revocation, it will be assumed that you received the Disclosure Statement no
later than the date of your check with which you opened your Roth IRA. Written
notice must be hand delivered or sent by first class mail, in which case, the
revocation will be effective as of the date the notice is postmarked (or if sent
by certified or registered mail, the date of certification or registration).
Notice of revocation should be made to: A I M Distributors, Inc., Eleven
Greenway Plaza, Suite 763, P.O. Box 4739, Houston, Texas 77210-4739, Attention:
Shareholder Services Department, area code (800) 959-4246. If you revoke your
Roth IRA, you are entitled to a refund of your entire contribution to the Roth
IRA, without adjustment for such items as sales commissions, administrative
expenses or fluctuation in market value. If you do not revoke within 7 business
days after the establishment of the Roth IRA, you will be deemed to have
accepted the terms and conditions of the Roth IRA and cannot later revoke the
Roth IRA without certain potential penalties.
B. STATUTORY REQUIREMENTS.
A Roth IRA is a trust or custodial account created or organized in the
United States for your exclusive benefit or that of your beneficiaries. It must
be created by a written governing instrument that meets the following
requirements:
(1) THE TRUSTEE OR CUSTODIAN MUST BE A BANK, federally insured credit
union, savings and loan association or another person eligible to act as trustee
or custodian;
(2) EXCEPT FOR ROLLOVER CONTRIBUTIONS (as described in Part F below), no
contribution will be accepted unless it is in cash or cash equivalent,
including, but not by way of limitation, personal checks, cashier's checks,
and wire transfers;
(3) EXCEPT FOR ROLLOVERS contributions of more than $2,000 for any tax year
may not be made;
(4) YOU WILL HAVE A NONFORFEITABLE INTEREST IN THE ACCOUNT;
(5) NO PART OF THE TRUST OR CUSTODIAL FUNDS will be invested in life
insurance contracts, nor may the assets be commingled with other property
except in a common trust fund or common investment fund. Furthermore, as
provided in section 408(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), your Roth IRA may not be invested in "collectibles," such as
art works, antiques, metals, gems, stamps, coins (with an exception for
certain U.S.-minted gold and silver coins and certain bullion), and certain
other types of tangible personal property. An investment in a collectible
would be treated as a distribution from your Roth IRA which would be
includible in your gross income, and, if you had not attained the age of 59
1/2, the distribution would also be subject to the premature distribution
penalty as discussed in Part E(5) below;
(6) UNLIKE A TRADITIONAL IRA, YOUR INTEREST IN YOUR ROTH IRA IS NOT
REQUIRED TO BE DISTRIBUTED WHEN YOU REACH AGE 70 1/2.
C. INVESTMENT OF YOUR ROTH IRA.
Under the terms of the Custodial Agreement, your contributions will be
invested by the Custodian in full and fractional shares of the investment
company or companies that you select. As provided in the Custodial Agreement,
you may only invest your Roth IRA Funds in shares of investment companies which
are part of "The AIM Family of Funds-Registered Trademark-," which are managed
or advised by subsidiaries of A I M Management Group Inc. You will be provided
with a list of the investment companies from which you may choose to invest.
Subject to the foregoing and to any additional restrictions described in the
Custodial Agreement, you have complete control over the investment of your Roth
IRA Funds. The Custodian will not provide any form of investment advice or make
investment recommendations of any type, so you will make all investment
decisions on the basis of information you obtain from other sources. When you
make a decision on how you wish to invest Funds held in your Roth IRA, you
should provide the Custodian with specific instructions, detailing your
investment decision so that the Custodian can effectuate such investments as
provided in your Roth IRA Custodial Agreement. If you fail to direct the
Custodian as to the Investment of all or any portion of your Roth IRA account,
the Custodian shall hold such uninvested amount in your account and shall incur
no liability for interest or earnings thereon. All dividends and capital gain
distributions received on shares of an investment company held in your Roth IRA
will be reinvested in shares of that investment company, if available, which
shall be credited to the Custodian account. Detailed information about the
shares of the AIM fund(s) you select must be furnished to you in the form of
prospectuses governed by rules of the Securities and Exchange Commission.
D. LIMITATIONS AND RESTRICTIONS ON ROTH IRA CONTRIBUTIONS AND DEDUCTIONS.
Except in the case of rollover contributions (see Part F below), generally
you may contribute up to the lesser of $2,000 or 100% of your compensation
(earned income) to your Roth IRA for any taxable year. A non-working spouse may
contribute up to $2,000 to a separate Roth IRA.
Contributions to a Roth IRA are nondeductible, but earnings on a Roth IRA
generally are not subject to federal income tax. The $2,000 individual Roth IRA
limit is reduced by any deductible or nondeductible contributions you make to a
Traditional IRA. You should consult your tax advisor to determine the specific
application of such rules to your Roth IRA contributions for any particular
taxable year.
Contributions to a Roth IRA are not deductible, but earnings on a Roth
IRA generally are not subject to federal income tax if they are distributed
after the account has been in existence for five years and the distribution
is made on account of death, disability, after age 59 1/2, or for certain
qualifying events. The $2,000 maximum contribution to a Roth IRA is reduced
for taxpayers whose income exceeds $95,000 (single filer) or $150,000 (joint
filers) and is phased-out entirely for taxpayers whose income exceeds
$110,000 (single) or $160,000 (joint).
E. FEDERAL INCOME TAX STATUS OF THE ROTH IRA AND CERTAIN DISTRIBUTIONS.
(1) IN GENERAL. Except as described below, your Roth IRA and earnings
thereon are exempt from federal income tax at least until distributions are made
from the Roth IRA.
(2) TAX TREATMENT OF DISTRIBUTIONS FROM A ROTH IRA. Contributions to a Roth
IRA are not tax-deductible, but distributions may be received tax-free under
certain circumstances. After a Roth IRA account has been maintained for at least
five years (whether or not contributions were made for all years), investment
earnings may be withdrawn without being subject to federal income tax if the
distribution is made after age 59 1/2, in the case of death or disability, or
for a first home purchase. A withdrawal for a first home purchase is limited to
$10,000 and is available to a person who has not had an ownership interest in a
principal residence during the two years ending on the date of purchase. The
dollar amount of contributions (but not earnings) to a Roth IRA may be withdrawn
without penalty at any time.
(3) EXCESS CONTRIBUTIONS. If contributions to your Roth IRA are in excess
of the limits stated in Part D above, you will be assessed a 6% nondeductible
excise tax on such excess amounts. This tax is payable for each year the excess
is permitted to remain in your Roth IRA. However, if the excess contribution and
all earnings thereon are returned before the due date for filing your income tax
return for the year in which the excess contribution was made, the 6% excise tax
will not be assessed. The earnings on such excess contributions that are
returned to you will be taxable as ordinary income and will be deemed to have
been earned and taxable in the tax year during which the excess contribution was
made. In addition, if you are not disabled or have not reached age 59 1/2, the
earnings will be subject to the 10% premature withdrawal penalty discussed
below. The 6% excess contribution tax may be eliminated for future tax years by
withdrawing the excess contribution from your Roth IRA before the due date for
filing your tax return for that year or by under-contributing for a subsequent
year by an amount equal to the excess contribution. If the total contributions
for the year to your Roth IRA are $2,000 or less, you may withdraw any excess
contributions after the due date for filing your tax return, including
extensions, and not include the amount withdrawn in your gross income. It is not
necessary to withdraw the interest or other income earned on the excess. You
will have to pay the 6% tax on the excess amount for each year the excess
contribution was in the Roth IRA.
If less than the maximum amount of contributions has been made in years
before the year you make an excess contribution, the prior year's difference may
not be used to reduce the excess contribution. Qualified rollover contributions,
as described in Part F below, are not considered excess contributions.
(4) PREMATURE DISTRIBUTIONS. In addition to any regular income tax that
may be payable, distributions from your Roth IRA that occur before you reach
age 59 1/2 (except in the event of disability, death, rollover, or as a
qualifying distribution), will be assessed a 10% additional income tax on the
amount distributed which is includible in your gross income. However, the
additional 10% income tax will not be imposed if the distribution is one of a
scheduled series of level payments to be made over your life or life
expectancy or over the joint lives or joint life expectancies of you and your
beneficiary. Amounts treated as distributions from the Roth IRA because of
pledging the Roth IRA as described below, or prohibited transactions as
described below, will also be considered premature distributions if they
occur before you reach age 59 1/2 (assuming you are not disabled).
(5) PLEDGING THE ROTH IRA. If you pledge your Roth IRA as security for a
20
<PAGE>
loan, the portion so pledged is treated as being distributed to you in that
year. In addition to any regular income tax that may be payable on the
distribution, the premature distribution penalty as discussed above may also be
applicable.
(6) PROHIBITED TRANSACTIONS. If you or your beneficiary engages in a
prohibited transaction, as described in section 4975 of the Code with respect to
your Roth IRA, your Roth IRA will lose its exemption from tax and you must
include the fair market value of your Roth IRA in your gross income for the year
during which the prohibited transaction occurred. In addition to any regular
income tax that may be payable, the premature distribution penalty as discussed
above may also be applicable.
(7) ESTATE AND GIFT TAX STATUS OF DISTRIBUTIONS. You should consult your
tax advisor with respect to the application of community property laws on estate
and gift tax issues relating to your Roth IRA.
(8) FEDERAL INCOME TAX WITHHOLDING. The taxable portion of distributions
from your Roth IRA, if any, is subject to federal income tax withholding unless
you elect not to have withholding applied. If you elect not to have withholding
applied to taxable distributions from your IRA, or if insufficient federal
income tax is withheld from any distribution, you may be responsible for payment
of estimated taxes, as well as for penalties under the estimated tax rules, if
withholding and estimated tax payments were not sufficient. Additional
information regarding withholding and the necessary election forms will be
provided no later than at the time a distribution is requested.
F. ROLLOVER CONTRIBUTIONS.
A rollover is a contribution of cash or other assets from one retirement
program to another. There are two kinds of rollover contributions to an IRA.
In one, you contribute amounts distributed to you from one IRA to another IRA.
With the other type, you contribute amounts distributed to you from your
employer's qualified plan or 403(b) plan to an IRA. A rollover is an allowable
IRA contribution which is not subject to the limits on regular contributions
discussed in Part D above. However, you may not deduct a rollover contribution
to your IRA on your tax return.
If you receive a distribution from the qualified plan of your employer or
former employer, the distribution must be an "eligible rollover distribution" in
order for you to be able to roll all or part of the distribution over to your
IRA. Your employer or former employer will give you the opportunity to roll over
the distribution directly from the plan to the IRA. If you elect, instead, to
receive the distribution, you must deposit it into the IRA within 60 days after
you receive it.
An "eligible rollover distribution" is any distribution from a qualified
plan that would be taxable other than (1) a distribution that is one of a series
of periodic payments for an employee's life or over a period of 10 years or
more, (2) a required distribution after you attain age 70 1/2 and (3) certain
corrective distributions.
The proceeds of a Roth IRA may be rolled over only to another Roth IRA. A
Roth IRA may accept the proceeds of a tax-qualified plan or a traditional IRA,
but any taxable portion of such a rollover shall be subject to federal income
tax. Similarly, a Traditional IRA may be redesignated as a Roth IRA, with the
taxable portion of the converted IRA being subject to federal income tax at the
time of conversion. In the case of such a rollover or conversion during 1998,
the amount required to be included in income shall be spread ratably over four
years.
G. AMENDMENTS.
The Custodian of your Roth IRA may amend the agreements establishing your
Roth IRA at any time. The Custodian will comply with the amendment procedures
set forth in your Custodial Agreement.
H. FINANCIAL DISCLOSURE.
Because the value of assets held in your Roth IRA is subject to market
fluctuation, the value of your Roth IRA can neither be guaranteed nor projected.
There is no assurance of growth in the value of your Roth IRA or guarantee of
investment results. You will, however, be provided with periodic statements of
your Roth IRA, including current market values of investments.
Certain fees will be charged by the Custodian in connection with your Roth
IRA. Such fees are disclosed on the Custodian's fee schedule, a copy of which
has been provided to you. Upon thirty days' prior written notice, the Custodian
may substitute a new fee schedule. Any fees or other expenses incurred in
connection with your Roth IRA will be deducted from your Roth IRA (with
liquidation of Fund Shares, if necessary), or at the Custodian's option, such
fees or expenses may be billed to you directly.
For its services to the various funds, in The AIM Family of
Funds-Registered Trademark-, INVESCO Trust Company receives a custodian fee.
This fee is in addition to fees it receives for acting as Custodian under the
Roth IRA. INVESCO Trust Company and A I M Distributors, Inc., also will receive
additional fees for performing specific services with respect to the various
funds in the AIM Family of Funds. Any such fees will be fully disclosed to you.
Potential investors should obtain a copy of the current Prospectus relating to
the fund(s) selected for investment prior to making an investment. Also, copies
of the Statement of Additional Information relating to such fund(s) will be
provided upon your request to A I M Distributors, Inc.
I. MISCELLANEOUS.
Each year you will be provided a statement(s) of account which will give
the amount of contributions to the Roth IRA, the year to which each contribution
relates, and the total value of the Roth IRA as of the end of the year.
Information relating to contributions and distributions must be reported
annually to the Internal Revenue Service and to you. You must also file Form
5329 (Return for Individual Retirement Savings Arrangement) with the Internal
Revenue Service for each taxable year during which you are assessed any penalty
or tax as discussed in Part E above.
Further information about Roth IRAs can be obtained from any district
office of the Internal Revenue Service or from the Custodian.
All provisions in this Disclosure Statement are subject to the Code and to
the regulations promulgated thereunder. This Disclosure Statement constitutes a
nontechnical restatement and summary of certain provisions of the Code which may
affect your Roth IRA. This is not a legal document. Your legal rights and
obligations are governed by the federal tax laws and regulations and your
Custodial Agreement and Adoption Agreement with the Custodian.
The Depositor has assigned the Roth IRA custodial account ______ dollars
($______) in cash.
The Depositor has assigned the Roth IRA custodial account ______ dollars
($______) in cash.
__________________________________________________________________________
Depositor's signature Date
__________________________________________________________________________
Custodian's signature Date
__________________________________________________________________________
Witness
(Use only if signature of the Depositor or the Custodian is required to be
witnessed.)
21
<PAGE>
DISTRIBUTION PLAN
OF
AIM SERIES TRUST
(CLASS A SHARES AND CLASS C SHARES)
SECTION 1. AIM Series Trust, a Delaware business trust (the "Fund"), on
behalf of the series of shares of beneficial interest set forth in Schedule A to
this plan (the "Portfolios"), may act as a distributor of the Class A Shares and
Class C Shares (each a "Class") of such Portfolios as described in Schedule A to
this plan (the "Shares") of which the Fund is the issuer, pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act"), according to the
terms of this Distribution Plan (the "Plan").
SECTION 2. The Fund may incur as a distributor of the Shares, expenses at
the rates set forth in Schedule A per annum of the average daily net assets of
the Fund attributable to the Shares, subject to any applicable limitations
imposed from time to time by applicable rules of the NASD Regulation, Inc.
SECTION 3. Amounts set forth in Schedule A may be expended when and if
authorized in advance by the Fund's Board of Trustees. Such amounts may be used
to finance any activity which is primarily intended to result in the sale of the
Shares, including, but not limited to, expenses of organizing and conducting
sales seminars, advertising programs, finders fees, printing prospectuses and
statements of additional information (and supplements thereto) and reports for
other than existing shareholders, preparation and distribution of advertising
material and sales literature, supplemental payments to dealers and other
institutions as asset-based sales charges. Amounts set forth on Schedule A may
also be used to finance payments of service fees under a shareholder service
arrangement to be established by A I M Distributors, Inc. ("Distributors") as
the Fund's distributor in accordance with Section 4, and the costs of
administering the Plan. To the extent that amounts paid hereunder are not used
specifically to reimburse Distributors for any such expense, such amounts may be
treated as compensation for distribution-related services of Distributors or the
Fund's former distributor, GT Global, Inc. All amounts expended pursuant to the
Plan shall be paid to Distributors and are the legal obligation of the Fund and
not of Distributors. That portion of the amounts paid under the Plan that is not
paid or advanced by Distributors to dealers or other institutions that provide
personal continuing shareholder service as a service fee pursuant to Section 4
shall be deemed an asset-based sales charge. No provision of this Plan shall be
interpreted to prohibit any payments by the Fund during periods when the Fund
has suspended or otherwise limited sales.
<PAGE>
SECTION 4.
(a) Amounts expended by the Fund under the Plan shall be used in part for
the implementation by Distributors of shareholder service
arrangements. The maximum service fee paid to any service provider
shall be twenty-five one-hundredths of one percent (0.25%), or such
lower rate for the Portfolio and Class as is specified on Schedule A,
per annum of the average daily net assets of the Fund attributable to
the Shares owned by the customers of such service provider.
(b) Pursuant to this program, Distributors may enter into agreements
substantially in the form attached hereto as Exhibit A ("Service
Agreements") with such broker-dealers ("Dealers") as may be selected
from time to time by Distributors for the provision of
distribution-related personal shareholder services in connection with
the sale of Shares to the Dealers' clients and customers ("Customers")
who may from time to time directly or beneficially own Shares. The
distribution-related personal continuing shareholder services to be
rendered by Dealers under the Service Agreements may include, but
shall not be limited to, the following: (i) distributing sales
literature; (ii) answering routine Customer inquiries concerning the
Fund and the Shares; (iii) assisting Customers in changing dividend
options, account designations and addresses, and in enrolling into any
of several retirement plans offered in connection with the purchase of
the Shares; (iv) assisting in the establishment and maintenance of
customer accounts and records, and in the processing of purchase and
redemption transactions; (v) investing dividends and capital gains
distributions automatically in Shares; and (vi) providing such other
information and services as the Fund or the Customer may reasonably
request.
(c) Distributors may also enter into Bank Shareholder Service Agreements
substantially in the form attached hereto as Exhibit B ("Bank
Agreements") with selected banks acting in an agency capacity for
their customers ("Banks"). Banks acting in such capacity will provide
some or all of the shareholder services to their customers as set
forth in the Bank Agreements from time to time.
(d) Distributors may also enter into Agency Pricing Agreements
substantially in the form attached hereto as Exhibit C ("Pricing
Agreements") with selected retirement plan service providers acting in
an agency capacity for their customers ("Retirement Plan Providers").
Retirement Plan Providers acting in such a capacity will provide some
or all of the shareholders services to their customers as set forth in
the Pricing Agreements from time to time.
<PAGE>
(e) Distributors may also enter into Shareholder Service Agreements
substantially in the form attached hereto as Exhibit D ("Bank Trust
Department Agreements and Brokers for Bank Trust Department
Agreements") with selected bank trust departments and brokers for bank
trust departments. Such bank trust departments and brokers for bank
trust departments will provide some or all of the shareholder services
to their customers as set forth in the Bank Trust Department
Agreements and Brokers for Bank Trust Department Agreements.
SECTION 5. Any amendment to this Plan that requires the approval of the
shareholders of a Class pursuant to Rule 12b-1 under the 1940 Act shall become
effective as to such Class upon approval of such amendment by a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of such Class,
provided that the Board of Trustees of the Fund has approved such amendment in
accordance with the provisions of Section 6 of this Plan.
SECTION 6. This Plan, any amendment to this Plan and any agreements
related to this Plan shall become effective with respect to any Class of any
Portfolio immediately upon receipt by the Fund of both (a) the affirmative vote
of a majority of the Board of Trustees of the Fund, and (b) the affirmative vote
of a majority of those trustees of the Fund who are not "interested persons" of
the Fund (as defined in the 1940 Act) and have no direct or indirect financial
interest in the operation of this Plan or any agreements related to it (the
"Disinterested Trustees"), cast in person at a meeting called for the purpose of
voting on this Plan or such agreements. Notwithstanding the foregoing, no such
amendment that requires the approval of the shareholders of a Class of a
Portfolio shall become effective as to such Class until such amendment has been
approved by the shareholders of such Class in accordance with the provisions of
Section 5 of this Plan.
SECTION 7. Unless sooner terminated pursuant to Section 9, this Plan shall
continue in effect until May 29, 1999 and thereafter shall continue in effect so
long as such continuance is specifically approved, at least annually, in the
manner provided for approval of this Plan in Section 6.
SECTION 8. Distributors shall provide to the Fund's Board of Trustees and
the Board of Trustees shall review, at least quarterly, a written report of the
amounts so expended and the purposes for which such expenditures were made.
SECTION 9. This Plan may be terminated with respect to the shares of any
Class of any Portfolio at any time by vote of a majority of the Disinterested
Trustees, or by a vote of a majority of the outstanding voting securities of
such Class of such Portfolio. Upon termination of this Plan with respect to any
or all such Classes, the obligation of the Fund to make payments pursuant to
this Plan with respect to such Classes shall terminate, and the Fund shall not
be required to make payments hereunder beyond such termination date with respect
to expenses incurred in connection with shares of such Classes sold prior to
such termination date.
<PAGE>
SECTION 10. Any agreement related to this Plan shall be made in writing,
and shall provide:
(a) that such agreement may be terminated with respect to the shares of
any Class of any Portfolio at any time, without payment of any
penalty, by vote of a majority of the Disinterested Trustees or by a
vote of the outstanding voting securities of such Class of such
Portfolio, on not more than sixty (60) days' written notice to any
other party to the agreement; and
(b) that such agreement shall terminate automatically in the event of its
assignment.
SECTION 11. This Plan may not be amended with respect to the shares of any
Class of any Portfolio to increase materially the amount of distribution
expenses provided for in Section 2 hereof unless such amendment is approved by
such Class in the manner provided in Section 5 hereof, and no material amendment
to the Plan with respect to the shares of any Class of any Portfolio shall be
made unless approved in the manner provided for in Section 6 hereof.
AIM SERIES TRUST
(on behalf of its Class A Shares
and Class C Shares)
Attest: By:
Assistant Secretary President
Effective as of May 29, 1998.
<PAGE>
SCHEDULE A
TO
DISTRIBUTION PLAN
OF
AIM SERIES TRUST
The Fund shall pay the Distributor as full compensation for all services
rendered and all facilities furnished under the Distribution Plan for each
Portfolio (or Class thereof) designated below, a Distribution Fee* determined by
applying the annual rate set forth below as to each Portfolio (or Class thereof)
to the average daily net assets of the Portfolio (or Class thereof) for the plan
year, computed in a manner used for the determination of the offering price of
shares of the Portfolio.
<TABLE>
<CAPTION>
PORTFOLIO (CLASS A SHARES) MAXIMUM MAXIMUM MAXIMUM
ASSET-BASED SERVICE AGGREGATE
SALES FEE FEE
CHARGE
-------------------------- ---------- ------- ----------
<S> <C> <C> <C>
AIM New Dimension Fund 0.25% 0.25% 0.50%
PORTFOLIO (CLASS C SHARES) MAXIMUM MAXIMUM MAXIMUM
ASSET-BASED SERVICE AGGREGATE
SALES FEE FEE
CHARGE
AIM New Dimension Fund 0.75% 0.25% 1.00%
</TABLE>
The Distributor will waive part or all of its Distribution Fee as to a
Portfolio (or Class thereof) to the extent that the ordinary business
expenses of the Portfolio exceed the expense limitation as to the Portfolio
(if any) as contained in the Master Investment Advisory Agreement between the
Company and A I M Advisors, Inc.
THIS PLAN REFERS TO EXHIBITS A-D, WHICH RELATE TO AGREEMENTS THAT THE
DISTRIBUTOR MAY ENTER INTO WITH THIRD PARTIES. FORMS OF THESE AGREEMENTS HAVE
NOT BEEN INCLUDED WITH THIS PLAN.
___________
* The Distribution Fee is payable apart from the sales charge, if any, as
stated in the current prospectus for the applicable Portfolio (or Class
thereof).
<PAGE>
DISTRIBUTION PLAN
OF
AIM SERIES TRUST
(CLASS B SHARES)
SECTION 1. AIM Series Trust (the "Fund"), on behalf of the series of
beneficial interest set forth in Schedule A to this plan (the "Portfolios"), may
pay for distribution of the Class B Shares of such Portfolios (the "Shares")
which the Fund issues from time to time, pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "1940 Act"), according to the terms of this
Distribution Plan (the "Plan").
SECTION 2. The Fund may incur expenses for and pay any institution selected to
act as the Fund's agent for distribution of the Shares of any portfolio from
time to time (each, a "Distributor") at the rates set forth in Schedule A hereto
based on the average daily net assets of each class of Shares subject to any
applicable limitations imposed by the Conduct Rules of the NASD Regulation, Inc.
in effect from time to time (the "Conduct Rules"). All such payments are the
legal obligation of the Fund and not of any Distributor or its designee.
SECTION 3.
(a) Amounts set forth in Section 2 may be used to finance any activity
which is primarily intended to result in the sale of the Shares, including, but
not limited to, expenses of organizing and conducting sales seminars and running
advertising programs, payment of finders fees, printing of prospectuses and
statements of additional information (and supplements thereto) and reports for
other than existing shareholders, preparation and distribution of advertising
material and sales literature, payment of overhead and supplemental payments to
dealers and other institutions as asset-based sales charges. Amounts set forth
in Section 2 may also be used to finance payments of service fees under a
shareholder service arrangement, which may be established by each Distributor in
accordance with Section 4, and the costs of administering the Plan. To the
extent that amounts paid hereunder are not used specifically to reimburse the
Distributor for any such expense, such amounts may be treated as compensation
for the Distributor's distribution-related services. No provision of this Plan
shall be interpreted to prohibit any payments by the Fund during periods when
the Fund has suspended or otherwise limited sales.
(b) Subject to the provisions in Sections 8 and 9 hereof, amounts payable
pursuant to Section 2 in respect of Shares of each Portfolio shall be paid by
the Fund to the Distributor in respect of such Shares or, if more than one
institution has acted or is acting as Distributor in respect of such Shares,
then amounts payable pursuant to Section 2 in respect of such Shares shall be
paid to each such Distributor in proportion to the number of such Shares sold by
or attributable to such Distributor's distribution efforts
<PAGE>
in respect of such Shares in accordance with allocation provisions of each
Distributor's distribution agreement (the "Distributor's 12b-1 Share")
notwithstanding that such Distributor's distribution agreement with the fund may
have been terminated. The Distributor's 12b-1 Share shall include amounts
payable pursuant to Section 2 in respect of Shares sold by or attributable to
distribution efforts of GT Global, Inc. That portion of the amounts paid under
the Plan that is not paid or advanced by the Distributor to dealers or other
institutions that provide personal continuing shareholder service as a service
fee pursuant to Section 4 shall be deemed an asset-based sales charge.
(c) Any Distributor may assign, transfer or pledge ("Transfer") to one or
more designees (each an "Assignee"), its rights to all or a designated portion
of its Distributor's 12b-1 Share from time to time (but not such Distributor's
duties and obligations pursuant hereto or pursuant to any distribution agreement
in effect from time to time, if any, between such Distributor and the Fund),
free and clear of any offsets or claims the Fund may have against such
Distributor. Each such Assignee's ownership interest in a Transfer of a specific
designated portion of a Distributor's 12b-1 Share is hereafter referred to as an
"Assignee's 12b-1 Portion." A Transfer pursuant to this Section 3(c) shall not
reduce or extinguish any claims of the Fund against the Distributor.
(d) Each Distributor shall promptly notify the Fund in writing of each
such Transfer by providing the Fund with the name and address of each such
Assignee.
(e) A Distributor may direct the Fund to pay an Assignee's 12b-1 Portion
directly to such Assignee. In such event, the Distributor shall provide the Fund
with a monthly calculation of the amount of (i) the Distributor's 12b-1 Share,
and (ii) each Assignee's 12b-1 Portion, if any, for such month (the "Monthly
Calculation"). In such event, the Fund shall, upon receipt of such notice and
Monthly Calculation from the Distributor, make all payments required under such
distribution agreement directly to the Assignee in accordance with the
information provided in such notice and Monthly Calculation upon the same terms
and conditions as if such payments were to be paid to the Distributor.
(f) Alternatively, in connection with a Transfer, a Distributor may direct
the Fund to pay all of such Distributor's 12b-1 Share from time to time to a
depository or collection agent designated by any Assignee, which depository or
collection agent may be delegated the duty of dividing such Distributor's 12b-1
Share between the Assignee's 12b-1 Portion and the balance of the Distributor's
12b-1 Share (such balance, when distributed to the Distributor by the depository
or collection agent, the "Distributor's 12b-1 Portion"), in which case only the
Distributor's 12b-1 Portion may be subject to offsets or claims the Fund may
have against such Distributor.
<PAGE>
SECTION 4.
(a) Amounts expended by the Fund under the Plan shall be used in part for
the implementation by the Distributor of shareholder service arrangements with
respect to the Shares. The maximum service fee payable to any provider of such
shareholder service shall be twenty-five one-hundredths of one percent (0.25%)
per annum of the daily net assets of the Shares attributable to the customers of
such service provider. All such payments are the legal obligation of the Fund
and not of any Distributor or its designee.
(b) Pursuant to this Plan, the Distributor may enter into agreements
substantially in the form attached hereto as Exhibit A ("Service Agreements")
with such broker-dealers ("Dealers") as may be selected from time to time by the
Distributor for the provision of continuing shareholder services in connection
with Shares held by such Dealers' clients and customers ("Customers") who may
from time to time directly or beneficially own Shares. The personal continuing
shareholder services to be rendered by Dealers under the Service Agreements may
include, but shall not be limited to, some or all of the following:
(i) distributing sales literature; (ii) answering routine Customer inquiries
concerning the Fund and the Shares; (iii) assisting Customers in changing
dividend options, account designations and addresses, and in enrolling in any of
several retirement plans offered in connection with the purchase of Shares;
(iv) assisting in the establishment and maintenance of Customer accounts and
records, and in the processing of purchase and redemption transactions; (v)
investing dividends and capital gains distributions automatically in Shares;
(vi) performing sub-accounting; (vii) providing periodic statements showing a
Customer's shareholder account balance and the integration of such statements
with those of other transactions and balances in the Customer's account serviced
by such institution; (viii) forwarding applicable prospectuses, proxy
statements, reports and notices to Customers who hold Shares; and (ix) providing
such other information and administrative services as the Fund or the Customer
may reasonably request.
(c) The Distributor may also enter into Bank Shareholder Service
Agreements substantially in the form attached hereto as Exhibit B ("Bank
Agreements") with selected banks and financial institutions acting in an agency
capacity for their customers ("Banks"). Banks acting in such capacity will
provide some or all of the shareholder services to their customers as set forth
in the Bank Agreements from time to time.
(d) The Distributor may also enter into Agency Pricing Agreements
substantially in the form attached hereto as Exhibit C ("Pricing Agreements")
with selected retirement plan service providers acting in an agency capacity for
their customers ("Retirement Plan Providers"). Retirement Plan Providers acting
in such capacity will provide some or all of the shareholder services to their
customers as set forth in the Pricing Agreements from time to time.
<PAGE>
(e) The Distributor may also enter into Shareholder Service Agreements
substantially in the form attached hereto as Exhibit D ("Bank Trust Department
Agreements and Brokers for Bank Trust Department Agreements") with selected bank
trust departments and brokers for bank trust departments. Such bank trust
departments and brokers for bank trust departments will provide some or all of
the shareholder services to their customers as set forth in the Bank Trust
Department Agreements and Brokers for Bank Trust Department Agreements from time
to time.
SECTION 5. This Plan shall not take effect with respect to any Shares of any
Portfolio until (i) it has been approved, together with any related agreements,
by votes of the majority of both (a) the Board of Trustees of the Fund, and (b)
those trustees of the Fund who are not "interested persons" of the Fund (as
defined in the 1940 Act) and have no direct or indirect financial interest in
the operation of this Plan or any agreements related to it (the "Disinterested
Trustees"), cast in person at a meeting called for the purpose of voting on this
Plan or such agreements, and (ii) the execution by the Fund and A I M
Distributors, Inc. of a Master Distribution Agreement in respect of the Shares
of such Portfolio.
SECTION 6. Unless sooner terminated pursuant to Section 8, this Plan shall
continue in effect until May 29, 1999 and thereafter shall continue in effect so
long as such continuance is specifically approved, at least annually, in the
manner provided for approval of this Plan in Section 5.
SECTION 7. Each Distributor shall provide the Fund's Board of Trustees and the
Board of Trustees shall review, at least quarterly, a written report of the
amounts expended for distribution of the Shares and the purposes for which such
expenditures were made.
SECTION 8. This Plan may be terminated with respect to the Shares of any
Portfolio at any time by vote of a majority of the Disinterested Trustees, or by
a vote of a majority of outstanding Shares of such Portfolio. Upon termination
of this Plan with respect to any or all such classes, the obligation of the Fund
to make payments pursuant to this Plan with respect to such classes shall
terminate, and the Fund shall not be required to make payments hereunder beyond
such termination date with respect to expenses incurred in connection with
Shares sold prior to such termination date, provided, in each case that each of
the requirements of a Complete Termination of the Plan in respect of such class,
as defined below, are met. A termination of this Plan with respect to any or all
Shares of any or all Portfolios shall not affect the obligation of the Fund to
withhold and pay to any Distributor contingent deferred sales changes to which
such distributor is entitled pursuant to any distribution agreement. For
purposes of this Section 8, a "Complete Termination" of this Plan in respect of
any Portfolio shall mean a termination of this Plan in respect of such
Portfolio, provided that: (i) the Disinterested Trustees of the Fund shall have
acted in good faith and shall have determined that such termination is in the
best interest of the Fund and the shareholders of such Portfolio; (ii) the Fund
does not alter the terms of the contingent deferred sales charges applicable to
Shares outstanding at the time of such termination; and (iii) unless the
applicable Distributor at the time of such termination was
<PAGE>
in material breach under the distribution agreement in respect of such
Portfolio, the Fund shall not, in respect of such Portfolio, pay to any person
or entity, other than such Distributor or its designee, either the asset-based
sales charge or the service fee (or any similar fee) in respect of the Shares
sold by such Distributor prior to such termination.
SECTION 9. Any agreement related to this Plan shall be made in writing, and
shall provide:
(a) that such agreement may be terminated with respect to the Shares of
any or all Portfolios at any time, without payment of any penalty, by vote of a
majority of the Disinterested Trustees or by a vote of the majority of the
outstanding Shares of such Portfolio, on not more than sixty (60) days' written
notice to any other party to the agreement; and
(b) that such agreement shall terminate automatically in the event of its
assignment; provided, however, that, subject to the provisions of Section 8
hereof, if such agreement is terminated for any reason, the obligation of the
Fund to make payments of (i) the Distributor's 12b-1 Share in accordance with
the directions of the Distributor pursuant to Section 3(e) or (f) hereof if
there exist Assignees for all or any portion of such Distributor's 12b-1 Share,
and (ii) the remainder of such Distributor's 12b-1 Share to such Distributor if
there are no Assignees for such Distributor's Share, pursuant to such agreement
and this Plan will continue with respect to the Shares until such Shares are
redeemed or automatically converted into another class of shares of the Fund.
SECTION 10. This Plan may not be amended with respect to the shares of any
Portfolio to increase materially the amount of distribution expenses provided
for in Section 2 hereof unless such amendment is approved by a vote of at least
a "majority of the outstanding voting securities" (as defined in the 1940 Act)
of the Shares of such Portfolio, and no material amendment to the Plan with
respect to the shares of any Portfolio shall be made unless approved in the
manner provided for in Section 5 hereof.
AIM SERIES TRUST
(on behalf of its Class B Shares)
Attest:
Secretary By:
Effective as of May 29, 1998. President
<PAGE>
SCHEDULE A
TO
DISTRIBUTION PLAN
OF
AIM SERIES TRUST
<TABLE>
<CAPTION>
CLASS B SHARES MAXIMUM MAXIMUM MAXIMUM
ASSET-BASED SERVICE AGGREGATE
SALES FEE FEE
CHARGE
-------------- --------- ------- ---------
<S> <C> <C> <C>
AIM New Dimension Fund 0.75% 0.25% 1.00%
</TABLE>
<PAGE>
MULTIPLE CLASS PLAN
OF
AIM GROWTH SERIES
AIM SERIES TRUST
1. This Multiple Class Plan ("Plan") adopted in accordance with Rule 18f-3
under the Act shall govern the terms and conditions under which the Funds
may issue separate Classes of Shares representing interests in one or more
Portfolios of each Fund.
2. DEFINITIONS. As used herein, the terms set forth below shall have the
meanings ascribed to them below.
a. ACT - Investment Company Act of 1940, as amended.
b. ADVISOR CLASS SHARES - shall mean those Shares of a Fund designated as
Advisor Class Shares in the Fund's organizing documents.
c. CDSC - contingent deferred sales charge.
d. CDSC PERIOD - the period of years following acquisition of Shares
during which such Shares may be assessed a CDSC upon redemption.
e. CLASS - a class of Shares of a Fund representing an interest in a
Portfolio.
f. CLASS A SHARES - shall mean those Shares designated as Class A Shares
in the Fund's organizing documents, as well as those Shares deemed to
be Class A Shares for purposes of this Plan.
g. CLASS B SHARES - shall mean those Shares designated as Class B Shares
in the Fund's organizing documents.
h. CLASS C SHARES - shall mean those Shares designated as Class C Shares
in the Fund's organizing documents, as well as those Shares deemed to
be Class C Shares for purposes of this Plan. Class C Shares may not
be available for each Fund.
i. DISTRIBUTION EXPENSES - expenses incurred in activities which are
primarily intended to result in the distribution and sale of Shares as
defined in a Plan of Distribution and/or agreements relating thereto.
j. DISTRIBUTION FEE - a fee paid by a Fund to the Distributor to
compensate the Distributor for Distribution Expenses.
<PAGE>
k. DIRECTORS - the directors or trustees of a Fund.
l. DISTRIBUTOR - A I M Distributors, Inc. or Fund Management Company, as
applicable.
m. FUND - each of AIM Growth Series and AIM Series Trust.
n. PLAN OF DISTRIBUTION - Any plan adopted under Rule 12b-1 under the Act
with respect to payment of a Distribution Fee.
o. PORTFOLIO - a series of the Shares of a Fund constituting a separate
investment portfolio of the Fund.
p. SERVICE FEE - a fee paid to financial intermediaries for the ongoing
provision of personal services to Fund shareholders and/or the
maintenance of shareholder accounts.
q. SHARE - a share of common stock or of beneficial interest in a Fund,
as applicable.
3. ALLOCATION OF INCOME AND EXPENSES.
a. DISTRIBUTION AND SERVICE FEES - Each Class shall bear directly any and
all Distribution Fees and/or Service Fees payable by such Class
pursuant to a Plan of Distribution adopted by the Fund with respect to
such Class.
b. ALLOCATION OF OTHER EXPENSES - Each Class shall bear proportionately
all other expenses incurred by a Fund based on the relative net assets
attributable to each such Class.
c. ALLOCATION OF INCOME, GAINS, AND LOSSES - Except to the extent
provided in the following sentence, each Portfolio will allocate
income and realized and unrealized capital gains and losses to a Class
based on the relative net assets of each Class. Notwithstanding the
foregoing, each Portfolio that declares dividends on a daily basis
will allocate income on the basis of settled shares.
d. WAIVER AND REIMBURSEMENT OF EXPENSES - A Portfolio's adviser,
underwriter, or any other provider of services to the Portfolio may
waive or reimburse the expenses of a particular Class or Classes.
4. DISTRIBUTION AND SERVICING ARRANGEMENTS. The distribution and servicing
arrangements identified below will apply for the following Classes offered
by a Fund with respect to a Portfolio. The provisions of the Fund's
prospectus describing the distribution and servicing arrangements in detail
are incorporated herein by this reference.
a. CLASS A SHARES. Class A Shares shall be offered at net asset value
plus a front-end sales charge as approved from time to time by the
Directors and set forth in the Fund's prospectus, which may be reduced
or eliminated for certain money market fund shares,
2
<PAGE>
for larger purchases, under a combined purchase privilege, under a
right of accumulation, under a letter of intent or for certain
categories of purchasers as permitted by Rule 22(d) of the Act and as
set forth in the Fund's prospectus. Class A Shares that are not
subject to a front-end sales charge as a result of the foregoing shall
be subject to a CDSC for the CDSC Period set forth in Section 5(a) of
this Plan if so provided in the Fund's prospectus. The offering price
of Shares subject to a front-end sales charge shall be computed in
accordance with Rule 22c-1 and Section 22(d) of the Act and the rules
and regulations thereunder. Class A Shares shall be subject to ongoing
Service Fees and/or Distribution Fees approved from time to time by
the Directors and set forth in the Fund's prospectus.
b. CLASS B SHARES. Class B Shares shall be (i) offered at net asset
value, (ii) subject to a CDSC for the CDSC Period set forth in Section
5(b), (iii) subject to ongoing Service Fees and Distribution Fees
approved from time to time by the Directors and set forth in the
Fund's prospectus, and (iv) converted to Class A Shares eight years
from the end of the calendar month in which the shareholder's order to
purchase was accepted as set forth in the Fund's prospectus, except
that Class B Shares of AIM Series Trust which were acquired prior to
June 1, 1998 shall convert to Class A Shares as of the close of
business on the last business day of the month in which the seventh
anniversary of the initial issuance of such Class B Shares occurs.
c. CLASS C SHARES. Class C Shares shall be (i) offered at net asset
value, (ii) subject to a CDSC for the CDSC Period set forth in Section
5(c), and (iii) subject to ongoing service Fees and Distribution Fees
approved from time to time by the Directors and set forth in the
Fund's prospectus.
d. ADVISOR CLASS SHARES. Advisor Class Shares shall be (i) offered at net
asset value and (ii) offered only to certain categories of investors
as approved from time to time by the Trustees and as set forth in the
Fund's prospectus.
5. CDSC. A CDSC shall be imposed upon redemptions of Class A Shares that do
not incur a front-end sales charge and of Class B Shares and Class C Shares
as follows:
a. CLASS A SHARES. The CDSC Period for Class A Shares shall be the period
set forth in the Fund's prospectus. The CDSC Rate shall be as set
forth in the Fund's prospectus, the relevant portions of which are
incorporated herein by this reference. No CDSC shall be imposed on
Class A Shares unless so provided in a Fund's prospectus.
b. CLASS B SHARES. The CDSC Period for the Class B Shares shall be six
years. The CDSC Rate for the Class B Shares shall be as set forth in
the Fund's prospectus, the relevant portions of which are incorporated
herein by this reference.
c. CLASS C SHARES. The CDSC Period for the Class C Shares shall be one
year. The CDSC Rate for the Class C Shares shall be as set forth in
the Fund's prospectus, the relevant portions of which are incorporated
herein by reference.
3
<PAGE>
d. METHOD OF CALCULATION. The CDSC shall be assessed on an amount equal
to the lesser of the then current market value or the cost of the
Shares being redeemed. No CDSC shall be imposed on increases in the
net asset value of the Shares being redeemed above the initial
purchase price. No CDSC shall be assessed on Shares derived from
reinvestment of dividends or capital gains distributions. The order in
which Shares are to be redeemed when not all of such Shares would be
subject to a CDSC shall be determined by the Distributor in accordance
with the provisions of Rule 6c-10 under the Act.
e. WAIVER. The Distributor may in its discretion waive a CDSC otherwise
due upon the redemption of Shares and disclosed in the Fund's
prospectus or statement of additional information and, for the Class A
Shares, as allowed under Rule 6c-10 under the Act.
6. EXCHANGE PRIVILEGES. Exchanges of Shares shall be permitted as follows:
a. Class A Shares may be exchanged for Class A Shares of such other
mutual funds as are disclosed in the Fund's prospectus, subject to
such terms and limitations as disclosed in the Fund's prospectus and
statement of additional information.
b. Class B Shares may be exchanged for Class B Shares of such other
mutual funds as are disclosed in the Fund's prospectus, subject to
such terms and limitations as disclosed in the Fund's prospectus and
statement of additional information.
c. Class C Shares may be exchanged for Class C Shares of such other
mutual funds as are disclosed in the Fund's prospectus, subject to
such terms and limitations as disclosed in the Fund's prospectus and
statement of additional information.
d. Advisor Class Shares may be exchanged for Advisor Class Shares of such
other mutual funds as are disclosed in the Fund's prospectus, subject
to such terms and limitations as disclosed in the Fund's prospectus
and statement of additional information.
e. Depending upon the Portfolio from which and into which an exchange is
being made and when the shares were purchased, shares being acquired
in an exchange may be acquired at their offering price, at their net
asset value or by paying the difference in sales charges, as disclosed
in the Fund's prospectus and statement of additional information.
f. CDSC Computation. The CDSC payable upon redemption of Class A Shares,
Class B Shares, and Class C Shares subject to a CDSC shall be computed
in the manner described the Fund's prospectus
7. SERVICE AND DISTRIBUTION FEES. The Service Fee and Distribution Fee
applicable to any Class shall be those set forth in the Fund's prospectus,
relevant portions of which are incorporated herein by this reference. All
other terms and conditions with respect to Service Fees and Distribution
Fees shall be governed by the Plan of Distribution adopted by the Fund with
respect to such fees and Rule 12b-1 under the Act.
4
<PAGE>
8. CONVERSION OF CLASS B SHARES.
a. SHARES RECEIVED UPON REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS -
Shares purchased through the reinvestment of dividends and
distributions paid on Shares subject to conversion shall be treated as
if held in a separate sub-account. Each time any Shares in a
shareholder's account (other than Shares held in the sub-account)
convert to Class A Shares, a proportionate number of Shares held in
the sub-account shall also convert to Class A Shares.
b. CONVERSIONS ON BASIS OF RELATIVE NET ASSET VALUE - All conversions
shall be effected on the basis of the relative net asset values of the
two Classes without the imposition of any sales load or other charge.
c. AMENDMENTS TO PLAN OF DISTRIBUTION FOR CLASS A SHARES - If any
amendment is proposed to the Plan of Distribution under which Service
Fees and Distribution Fees are paid with respect to Class A Shares of
a Fund that would increase materially the amount to be borne by those
Class A Shares, then no Class B Shares shall convert into Class A
Shares of that Fund until the holders of Class B Shares of that Fund
have also approved the proposed amendment. If the holders of such
Class B Shares do not approve the proposed amendment, the Directors of
the Fund and the Distributor shall take such action as is necessary to
ensure that the Class voting against the amendment shall convert into
another Class identical in all material respects to Class A Shares of
the Fund as constituted prior to the amendment.
9. This Plan shall not take effect until a majority of the Directors of a
Fund, including a majority of the Directors who are not interested persons
of the Fund, shall find that the Plan, as proposed and including the
expense allocations, is in the best interests of each Class individually
and the Fund as a whole.
10. This Plan may not be amended to materially change the provisions of this
Plan unless such amendment is approved in the manner specified in Section A
above.
5
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Helge K. Lee and Michael A. Silver, and each of them, with full power to act
without the other, his or her true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities (until revoked in writing) to
sign the Registration Statement and any and all Amendments to the Registration
Statement (including Post-Effective Amendments), and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
AIM SERIES TRUST
<TABLE>
<S> <C> <C>
/s/ WILLIAM J. GUILFOYLE Trustee, Chairman of the
- ---------------------------------------- Board and President May 7, 1998
William J. Guilfoyle
/s/ C. DEREK ANDERSON
- ---------------------------------------- Trustee May 7, 1998
C. Derek Anderson
/s/ FRANK S. BAYLEY
- ---------------------------------------- Trustee May 7, 1998
Frank S. Bayley
/s/ ARTHUR C. PATTERSON
- ---------------------------------------- Trustee May 7, 1998
Arthur C. Patterson
/s/ RUTH H. QUIGLEY
- ---------------------------------------- Trustee May 7, 1998
Ruth H. Quigley
</TABLE>
