<PAGE> 1
As filed with the Securities and Exchange Commission on February 27, 1998
1933 Act Registration No. 2-27334
1940 Act Registration No. 811-1540
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
---
Pre-Effective Amendment No.
--- ---
Post-Effective Amendment No. 74 X
--- ---
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
---
Amendment No. 74 X
---- ---
(Check appropriate box or boxes.)
AIM FUNDS GROUP
--------------------------------------------------
(Exact name of Registrant as Specified in Charter)
11 Greenway Plaza, Suite 100, Houston, TX 77046
---------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (713) 626-1919
--------------
Charles T. Bauer
11 Greenway Plaza, Suite 100, Houston, TX 77046
-----------------------------------------------
(Name and Address of Agent for Service)
Copy to:
Samuel D. Sirko, Esquire Martha J. Hays, Esquire
A I M Advisors, Inc. Ballard Spahr Andrews & Ingersoll, LLP
11 Greenway Plaza, Suite 100 1735 Market Street, 51st Floor
Houston, Texas 77046 Philadelphia, Pennsylvania 19103-7599
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this
Amendment
It is proposed that this filing will become effective (check appropriate box)
___ immediately upon filing pursuant to paragraph (b)
___ on (date), pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(1)
_X_ on May 1, 1998, pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on (date) pursuant to paragraph (a)(2) of rule 485.
(Continued on Next Page)
<PAGE> 2
If appropriate, check the following box:
___ this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Beneficial Interest
<PAGE> 3
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495)
<TABLE>
<S> <C>
FORM N-1A ITEM PROSPECTUS CAPTION
- -------------- ------------------
Part A
Item 1. Cover Page.........................................................Cover Page; Investment Objectives
Item 2. Synopsis.........................................................Summary; Table of Fees and Expenses
Item 3. Condensed Financial Information....................................Financial Highlights; Performance
Item 4. General Description of Registrant.................................Cover Page; Investment Objectives;
Summary; About the Funds; Investment
Programs; Certain Investment Strategies
and Policies; General Information;
Description of Money Market Instruments
Item 5. Management of the Fund...............................................Management; General Information
Item 5A. Management's Discussion of Fund Performance.............................[included in annual reports]
Item 6. Capital Stock and Other Securities...............................Summary; Organization of the Trust;
How to Purchase Shares; Dividends,
Distributions and Tax Matters;
General Information
Item 7. Purchase of Securities Being Offered.............................Management; How to Purchase Shares;
Terms and Conditions of Purchase
of the AIM Funds; Special Plans;
Exchange Privilege; Determination
of Net Asset Value
Item 8. Redemption or Repurchase.........................................How To Redeem Shares; Special Plans
Item 9. Pending Legal Proceedings.............................................................Not Applicable
STATEMENT OF ADDITIONAL INFORMATION CAPTION
-------------------------------------------
Part B
Item 10. Cover Page................................................................................Cover Page
Item 11. Table of Contents..................................................................Table of Contents
Item 12. General Information and History....................................Introduction; General Information
About the Trust
Item 13. Investment Objectives and Policies...............................Investment Objectives and Policies;
Investment Restrictions; Description
of Money Market Instruments;
Repurchase Agreements and Reverse
Repurchase Agreements; Ratings of Securities
Item 14. Management of the Fund.......................................................Management of the Trust
Item 15. Control Persons and Principal
Holders of Securities..................................................Control Persons and Principal
Holders of Securities
Item 16. Investment Advisory and Other Services..................Investment Advisory and Other Services; The
Distribution Plans; Miscellaneous Information
Item 17. Brokerage Allocation and Other Practices........................Portfolio Transactions and Brokerage
Item 18. Capital Stock and Other Securities...............................General Information About the Trust
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered.......................................How to Purchase and Redeem Shares;
Qualifying for a Reduced Front-End
Sales Charge; Programs and Services
for Shareholders; Redemptions Paid in Cash
Item 20. Tax Status...............................................................................Tax Matters
Item 21. Underwriters.........................................................................The Distributor
Item 22. Calculation of Performance Data..............................................Performance Information
Item 23. Financial Statements............................................................Financial Statements
</TABLE>
<PAGE> 4
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.
<PAGE> 5
[APPLICATION INSIDE]
[AIM LOGO APPEARS HERE] THE AIM FAMILY OF FUNDS--Registered Trademark--
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
AIM VALUE FUND
(SERIES PORTFOLIOS OF AIM FUNDS GROUP)
P
PROSPECTUS
MAY 1, 1998
This Prospectus contains information about the nine mutual funds listed above
(the "Funds") which are separate series portfolios of AIM Funds Group (the
"Trust"), a Delaware business trust. The investment objectives of the Funds are
listed on the inside cover page.
This Prospectus sets forth basic information about the Funds that prospective
investors should know before investing. It should be read and retained for
future reference. A Statement of Additional Information, dated May 1, 1998, has
been filed with the United States Securities and Exchange Commission ("SEC") and
is incorporated herein by reference. The Statement of Additional Information is
available without charge upon written request to the Trust at P.O. Box 4739,
Houston, Texas 77210-4739. The SEC maintains a Web site at http://www.sec.gov
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding the Trust. Additional information
about the Funds may also be obtained on the Web at http://www.aimfunds.com.
AIM HIGH YIELD FUND MAY INVEST UP TO 100% OF ITS NET ASSETS IN NON-INVESTMENT
GRADE DEBT SECURITIES, COMMONLY REFERRED TO AS "JUNK BONDS." JUNK BONDS ARE
CONSIDERED TO BE SPECULATIVE, AND ENTAIL GREATER RISKS, INCLUDING DEFAULT RISKS,
THAN THOSE FOUND IN HIGHER RATED SECURITIES. SEE "INVESTMENT PROGRAMS -- AIM
HIGH YIELD FUND," "CERTAIN INVESTMENT STRATEGIES AND POLICIES -- RISK FACTORS
REGARDING NON-INVESTMENT GRADE DEBT SECURITIES" AND "APPENDIX C -- DESCRIPTIONS
OF RATING CATEGORIES."
THE FUNDS' SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND THE FUNDS' SHARES ARE NOT FEDERALLY INSURED OR GUARANTEED BY
THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. SHARES OF THE FUNDS INVOLVE INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THERE CAN BE NO ASSURANCE THAT AIM MONEY MARKET FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<PAGE> 6
INVESTMENT OBJECTIVES
- --------------------------------------------------------------------------------
The investment objectives of the Funds are as follows:
AIM BALANCED FUND: To achieve as high a total return as possible, consistent
with preservation of capital, by investing in a broadly diversified portfolio of
high-yielding securities, including common stocks, preferred stocks, convertible
securities and bonds.
AIM GLOBAL UTILITIES FUND: To achieve a high level of current income, and as a
secondary objective to achieve capital appreciation, by investing primarily in
the common and preferred stocks of public utility companies.
AIM HIGH YIELD FUND: To achieve a high level of current income by investing
primarily in publicly traded debt securities of less than investment grade.
AIM INCOME FUND: To achieve a high level of current income consistent with
reasonable concern for safety of principal by investing primarily in fixed rate
corporate debt and U.S. Government obligations.
AIM INTERMEDIATE GOVERNMENT FUND: To achieve a high level of current income
consistent with reasonable concern for safety of principal by investing in debt
securities issued, guaranteed or otherwise backed by the United States
Government.
AIM MONEY MARKET FUND: To provide as high a level of current income as is
consistent with the preservation of capital and liquidity.
AIM MUNICIPAL BOND FUND: To achieve a high level of current income exempt from
federal income taxes consistent with the preservation of principal by investing
in a diversified portfolio of municipal bonds.
AIM SELECT GROWTH FUND: To achieve long-term growth of capital by investing
primarily in the common stocks of established medium-to-large size companies
with prospects for above-average, long-term earnings growth.
AIM VALUE FUND: To achieve long-term growth of capital by investing primarily
in equity securities judged by the Fund's investment advisor to be undervalued
relative to the investment advisor's appraisal of the current or projected
earnings of the companies issuing the securities, or relative to current market
values of assets owned by the companies issuing the securities or relative to
the equity market generally. Income is a secondary objective.
SUMMARY
- --------------------------------------------------------------------------------
THE FUNDS. AIM Funds Group (the "Trust") is a Delaware business trust
organized as an open-end, series, management investment company. Currently the
Trust offers nine separate series portfolios, each of which pursues unique
investment objectives. This Prospectus relates to all of such portfolios (the
"Funds"), which are listed on the cover.
THE ADVISOR. A I M Advisors, Inc. ("AIM") serves as each Fund's investment
advisor pursuant to a Master Investment Advisory Agreement (the "Advisory
Agreement").
AIM, together with its subsidiaries, manages or advises over 50 investment
company portfolios encompassing a broad range of investment objectives. Under
the terms of the Advisory Agreement, AIM supervises all aspects of each Fund's
operations and provides investment advisory services to each Fund. As
compensation for these services AIM receives a fee based on each Fund's average
daily net assets. Under a Master Administrative Services Agreement, AIM may be
reimbursed by each Fund for its costs of performing, or arranging for the
performance of, certain accounting, shareholder servicing and other
administrative services for the Funds.
MULTIPLE DISTRIBUTION SYSTEM. Investors may select Class A, Class B or Class C
shares of each Fund and, in the case of AIM MONEY MARKET FUND, AIM Cash Reserve
Shares, all of which are offered by this Prospectus at an offering price that
reflects differing sales charges and expense levels. See "Terms and Conditions
of Purchase of the AIM Funds -- Sales Charges and Dealer Concessions."
Class A Shares -- Shares are offered at net asset value plus any
applicable initial sales charge.
Class B Shares -- Shares are offered at net asset value, without an
initial sales charge, and are subject to a maximum contingent deferred
sales charge of 5% on certain redemptions made within six years from the
date such shares were purchased. Class B shares automatically convert to
Class A shares of the same Fund eight years following the end of the
calendar month in which a purchase was made. Class B shares are subject to
higher expenses than Class A shares.
Class C Shares -- Shares are offered at net asset value, without an
initial sales charge, and are subject to a contingent deferred sales charge
of 1% on certain redemptions made within one year from the date such shares
were purchased.
AIM Cash Reserve Shares (AIM MONEY MARKET FUND only) -- Shares are
offered at net asset value, without an initial sales charge and without
contingent deferred sales charges.
SUITABILITY FOR INVESTORS. The multiple class structure permits an investor to
choose the method of purchasing shares that is most beneficial given the amount
of the purchase, the length of time the shares are expected to be held, whether
dividends will be paid in cash or reinvested in additional shares of a Fund and
other circumstances. Class A shares of AIM MONEY MARKET FUND are designed to
meet the needs of an investor who wishes to establish a dollar cost averaging
program, pursuant to which Class A shares of AIM MONEY MARKET FUND are exchanged
for shares of other funds advised by AIM that are sold with an initial sales
charge. Investors should consider whether, during the anticipated life of their
investment in a Fund, the accumulated distribution fees and any applicable
contingent deferred sales charges on Class B shares prior to conversion or on
Class C shares would be less than the initial sales
2
<PAGE> 7
charge and accumulated distribution fees on Class A shares purchased at the same
time, and to what extent such differential would be offset by the higher return
on Class A shares. To assist investors in making this determination, the table
under the caption "Table of Fees and Expenses" sets forth examples of the
charges applicable to each class of shares. Class A shares will normally be more
beneficial than Class B or Class C shares to the investor who qualifies for
reduced initial sales charges, as described below. Therefore, A I M
Distributors, Inc. will reject any order for purchase of more than $250,000 for
Class B shares.
PURCHASING SHARES. Initial investments in any class of shares must be at least
$500 and additional investments must be at least $50. The minimum initial
investment is modified for investments through tax-qualified retirement plans
and accounts initially established with an Automatic Investment Plan. The
distributor of the Funds' shares is A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, Texas 77210-4739. See "How to Purchase
Shares" and "Special Plans."
EXCHANGE PRIVILEGE. The Funds are among those mutual funds distributed by AIM
Distributors (collectively, "The AIM Family of Funds"). Class A, Class B and
Class C shares of the Funds, and AIM Cash Reserve Shares of AIM MONEY MARKET
FUND, may be exchanged for shares of other funds in The AIM Family of Funds in
the manner and subject to the policies and charges set forth herein. See
"Exchange Privilege."
REDEEMING SHARES. Holders of Class A shares may redeem all or a portion of
their shares at net asset value on any business day, generally without charge. A
contingent deferred sales charge of 1% may apply to certain redemptions of Class
A shares, where purchases of $1 million or more were made at net asset value.
See "How to Redeem Shares -- Contingent Deferred Sales Charge Program for Large
Purchases."
Holders of Class B shares may redeem all or a portion of their shares at net
asset value on any business day, less a contingent deferred sales charge for
redemptions made within six years from the date such shares were purchased.
Class B shares redeemed after six years from the date such shares were purchased
will not be subject to any contingent deferred sales charge. See "How to Redeem
Shares -- Multiple Distribution System."
Holders of Class C shares may redeem all or a portion of their shares at net
asset value on any business day, less a 1% contingent deferred sales charge for
redemptions made within one year from the date such shares were purchased. See
"How to Redeem Shares -- Multiple Distribution System."
Holders of AIM Cash Reserve Shares of AIM MONEY MARKET FUND may redeem all or
a portion of their shares at net asset value on any business day, without
charge.
DISTRIBUTIONS. AIM GLOBAL UTILITIES FUND, AIM HIGH YIELD FUND, AIM INCOME
FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM MONEY MARKET FUND and AIM MUNICIPAL
BOND FUND declare dividends from net investment income on a daily basis and pay
such dividends on a monthly basis. AIM BALANCED FUND declares and pays dividends
from net investment income on a quarterly basis. AIM SELECT GROWTH FUND and AIM
VALUE FUND declare and pay dividends from net investment income, if any, on an
annual basis. All of the Funds make distributions of realized capital gains, if
any, on an annual basis, although AIM MONEY MARKET FUND may distribute net
realized short-term capital gains more frequently. Dividends and distributions
paid with respect to Class A shares of a Fund may be paid by check, reinvested
in additional Class A shares of the Fund or reinvested in shares of another fund
in The AIM Family of Funds, subject to certain conditions. Dividends and
distributions paid with respect to Class B shares of a Fund may be paid by check
or reinvested in additional Class B shares of other funds in The AIM Family of
Funds at net asset value. Dividends and distributions paid with respect to Class
C shares of a Fund may be paid by check or reinvested in additional Class C
shares of another fund in The AIM Family of Funds at net asset value. Dividends
and distributions paid with respect to AIM Cash Reserve Shares of AIM MONEY
MARKET FUND may be paid by check, reinvested in additional AIM Cash Reserve
Shares of the Fund, or reinvested in shares of another fund in The AIM Family of
Funds, subject to certain conditions. See "Dividends, Distributions and Tax
Matters" and "Special Plans."
RISK FACTORS. Subject to certain restrictions designed to reduce any
associated risks, AIM MONEY MARKET FUND may invest in securities such as money
market instruments which are not rated (but are determined by AIM to be of
comparable quality to securities which have received the highest ratings),
certain repurchase agreements, and U.S. dollar-denominated obligations issued by
foreign banks. Accordingly, an investment in AIM MONEY MARKET FUND may entail
somewhat different risks from an investment in an investment company which does
not engage in such investment practices. See "Investment Programs." All Funds
other than AIM INTERMEDIATE GOVERNMENT FUND and AIM MUNICIPAL BOND FUND may
invest in foreign securities. See "Risk Factors Regarding Foreign Securities."
AIM HIGH YIELD FUND, and to a lesser extent AIM BALANCED FUND, AIM GLOBAL
UTILITIES FUND, AIM INCOME FUND and AIM MUNICIPAL BOND FUND, seek to meet their
respective investment objectives by investing in non-investment grade debt
securities, commonly known as "junk bonds." Investments in junk bonds, while
generally providing greater income and opportunity for gain, may be subject to
greater risks than higher rated securities. Such risks may include: greater
market fluctuations and risk of loss of income and principal, limited liquidity
and secondary market support, greater sensitivity to economic and business
downturns, and certain other risks. See "Certain Investment Strategies and
Policies -- Risk Factors Regarding Non-Investment Grade Debt Securities."
Investors should carefully consider the relative risks and rewards of investing
in each of the above-named Funds prior to investing, and should not consider an
investment in any of those Funds to represent a complete investment program.
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
mark of A I M Management Group Inc.
3
<PAGE> 8
THE FUNDS
- --------------------------------------------------------------------------------
TABLE OF FEES AND EXPENSES
The following table is designed to help an investor in the Funds understand
the various costs that an investor will bear, both directly and indirectly. The
fees and expenses set forth in the table for Class A and Class B shares of the
Funds and the AIM Cash Reserve Shares of AIM MONEY MARKET FUND are based on the
expenses for the 1997 fiscal year. The fees and expenses set forth in the table
for Class C shares are based on the estimated expenses for the current fiscal
year. The rules of the SEC require that the maximum sales charge be reflected in
the table even though certain investors may qualify for reduced sales charges.
See "How to Purchase Shares."
<TABLE>
<CAPTION>
AIM
AIM GLOBAL AIM AIM
BALANCED UTILITIES HIGH YIELD INCOME
FUND FUND FUND FUND
--------------------- --------------------- --------------------- ---------------------
CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS
A B C A B C A B C A B C
----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shareholder Transaction
Expenses
Maximum sales load
imposed on purchase
of shares (as a % of
offering price)...... 4.75% None None 5.50% None None 4.75% None None 4.75% None None
Maximum sales load on
reinvested
dividends............ None None None None None None None None None None None None
Deferred sales load (as
a % of
original purchase
price or
redemption proceeds,
whichever is
lower)............... None* 5.00% 1.00% None* 5.00% 1.00% None* 5.00% 1.00% None* 5.00% 1.00%
Redemption fee......... None None None None None None None None None None None None
Exchange fee........... None None None None None None None None None None None None
Annual Fund Operating
Expenses
(as a % of average net
assets)
Management fees........ 0.54% 0.54% 0.54% 0.58% 0.58% 0.58% 0.48% 0.48% 0.48% 0.45% 0.45% 0.45%
Rule 12b-1 distribution
plan payments........ 0.25% 1.00% 1.00% 0.25% 1.00% 1.00% 0.25% 1.00% 1.00% 0.25% 1.00% 1.00%
Interest expense....... -- -- -- -- -- -- -- -- -- -- -- --
All other expenses..... 0.19% 0.25% 0.25% 0.30% 0.33% 0.33% 0.17% 0.17% 0.17% 0.24% 0.24% 0.24%
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total fund
operating
expenses....... 0.98% 1.79% 1.79% 1.13% 1.91% 1.91% 0.90% 1.65% 1.65% 0.94% 1.69% 1.69%
==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ====
<CAPTION>
AIM
INTERMEDIATE
GOVERNMENT
FUND
---------------------
CLASS CLASS CLASS
A B C
----- ----- -----
<S> <C> <C> <C>
Shareholder Transaction
Expenses
Maximum sales load
imposed on purchase
of shares (as a % of
offering price)...... 4.75% None None
Maximum sales load on
reinvested
dividends............ None None None
Deferred sales load (as
a % of
original purchase
price or
redemption proceeds,
whichever is
lower)............... None* 5.00% 1.00%
Redemption fee......... None None None
Exchange fee........... None None None
Annual Fund Operating
Expenses
(as a % of average net
assets)
Management fees........ 0.48% 0.48% 0.48%
Rule 12b-1 distribution
plan payments........ 0.25% 1.00% 1.00%
Interest expense....... 0.11% 0.11% 0.11%
All other expenses..... 0.27% 0.28% 0.28%
---- ---- ----
Total fund
operating
expenses....... 1.11% 1.87% 1.87%
==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
AIM
MONEY AIM
MARKET FUND AIM SELECT AIM
------------------------------- MUNICIPAL GROWTH VALUE
AIM BOND FUND FUND FUND
CASH --------------------- --------------------- -----
CLASS CLASS CLASS RESERVE CLASS CLASS CLASS CLASS CLASS CLASS CLASS
A B C SHARES A B C A B C A
----- ----- ----- ------- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum sales load imposed on
purchase of shares (as a % of
offering price)................... 5.50% None None None 4.75% None None 5.50% None None 5.50%
Maximum sales load on reinvested
dividends......................... None None None None None None None None None None None
Deferred sales load (as a % of
original purchase price or
redemption proceeds, whichever is
lower)............................ None* 5.00% 1.00% None None* 5.00% 1.00% None* 5.00% 1.00% None*
Redemption fee...................... None None None None None None None None None None None
Exchange fee........................ None None None None None None None None None None None
Annual Fund Operating Expenses (as a %
of average net assets)
Management fees (after fee
waivers).......................... 0.55% 0.55% 0.55% 0.55% 0.46% 0.46% 0.46% 0.67% 0.67% 0.67% 0.61%(1)
Rule 12b-1 distribution plan
payments.......................... 0.25% 1.00% 1.00% 0.25% 0.25% 1.00% 1.00% 0.25% 1.00% 1.00% 0.25%
All other expenses.................. 0.25% 0.25% 0.25% 0.25% 0.19% 0.20% 0.20% 0.21% 0.32% 0.32% 0.18%
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total fund operating
expenses.................... 1.05% 1.80% 1.80% 1.05% 0.90% 1.66% 1.66% 1.13% 1.99% 1.99% 1.04%
==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ====
<CAPTION>
AIM
VALUE
FUND
-------------
CLASS CLASS
B C
----- -----
<S> <C> <C>
Shareholder Transaction Expenses
Maximum sales load imposed on
purchase of shares (as a % of
offering price)................... None None
Maximum sales load on reinvested
dividends......................... None None
Deferred sales load (as a % of
original purchase price or
redemption proceeds, whichever is
lower)............................ 5.00% 1.00%
Redemption fee...................... None None
Exchange fee........................ None None
Annual Fund Operating Expenses (as a %
of average net assets)
Management fees (after fee
waivers).......................... 0.61%(1) 0.61%(1)
Rule 12b-1 distribution plan
payments.......................... 1.00% 1.00%
All other expenses.................. 0.24% 0.24%
---- ----
Total fund operating
expenses.................... 1.85% 1.85%
==== ====
</TABLE>
- ------------------------
(1) After fee waivers. If management fees were not being waived, they would be
0.63% on all classes of AIM VALUE FUND.
* Purchases of $1 million or more are not subject to an initial sales charge.
However, a contingent deferred sales charge of 1% applies to certain
redemptions made within 18 months from the date such shares were purchased.
See the Investor's Guide, under the caption "How to Redeem Shares --
Contingent Deferred Sales Charge Program for Large Purchases."
4
<PAGE> 9
- --------------------------------------------------------------------------------
EXAMPLES. You would pay the following expenses on a $1,000 investment in Class
A shares of the Funds, assuming (1) a 5% annual return and (2) redemption at the
end of each time period:
<TABLE>
<CAPTION>
AIM AIM AIM AIM AIM AIM
AIM GLOBAL HIGH AIM INTERMEDIATE MONEY MUNICIPAL SELECT AIM
BALANCED UTILITIES YIELD INCOME GOVERNMENT MARKET BOND GROWTH VALUE
FUND FUND FUND FUND FUND FUND FUND FUND FUND
-------- --------- ---- ------ ------------ ------ --------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year............................... $ 57 $ 66 $ 56 $ 57 $ 58 $ 65 $ 56 $ 66 $ 65
3 years.............................. 77 89 75 76 87 87 75 89 86
5 years.............................. 99 114 95 97 106 110 95 114 109
10 years............................. 162 185 153 157 176 176 153 185 175
</TABLE>
The above examples assume payment of a sales charge at the time of purchase;
actual expenses may vary for purchases of $1 million or more, which are made at
net asset value and are subject to a contingent deferred sales charge for 18
months from the date such shares were purchased.
You would pay the following expenses on a $1,000 investment in Class B shares
of the Funds, assuming (1) a 5% annual return and (2) redemption at the end of
each time period:
<TABLE>
<CAPTION>
AIM AIM AIM AIM AIM AIM
AIM GLOBAL HIGH AIM INTERMEDIATE MONEY MUNICIPAL SELECT AIM
BALANCED UTILITIES YIELD INCOME GOVERNMENT MARKET BOND GROWTH VALUE
FUND FUND FUND FUND FUND FUND FUND FUND FUND
-------- --------- ---- ------ ------------ ------ --------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year............................... $ 68 $ 69 $ 67 $ 67 $ 69 $ 68 $ 67 $ 70 $ 69
3 years.............................. 86 90 82 83 89 87 82 92 88
5 years.............................. 117 123 110 112 121 117 110 127 120
10 years*............................ 189 203 175 180 199 192 176 209 196
</TABLE>
You would pay the following expenses on the same $1,000 investment in Class B
shares, assuming no redemption at the end of each time period:
<TABLE>
<CAPTION>
AIM AIM AIM AIM AIM AIM
AIM GLOBAL HIGH AIM INTERMEDIATE MONEY MUNICIPAL SELECT AIM
BALANCED UTILITIES YIELD INCOME GOVERNMENT MARKET BOND GROWTH VALUE
FUND FUND FUND FUND FUND FUND FUND FUND FUND
-------- --------- ---- ------ ------------ ------ --------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year............................... $ 18 $ 19 $ 17 $ 17 $ 19 $ 18 $ 17 $ 20 $ 19
3 years.............................. 56 60 52 53 59 57 52 62 58
5 years.............................. 97 103 90 92 101 97 90 107 100
10 years*............................ 185 203 175 180 199 192 176 209 196
</TABLE>
- ---------------
* Reflects the conversion to Class A shares eight years following the end of the
calendar month in which a purchase was made; therefore years nine and ten
reflect Class A expenses.
You would pay the following expenses on a $1,000 investment in Class C shares
of the Funds, assuming (1) a 5% annual return and (2) redemption at the end of
each time period:
<TABLE>
<CAPTION>
AIM AIM AIM AIM AIM AIM
AIM GLOBAL HIGH AIM INTERMEDIATE MONEY MUNICIPAL SELECT AIM
BALANCED UTILITIES YIELD INCOME GOVERNMENT MARKET BOND GROWTH VALUE
FUND FUND FUND FUND FUND FUND FUND FUND FUND
-------- --------- ---- ------ ------------ ------ --------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year............................... $ 28 $ 29 $ 27 $ 27 $ 29 $ 28 $ 27 $ 30 $ 29
3 years.............................. 56 60 52 53 59 57 52 62 58
</TABLE>
You would pay the following expenses on the same $1,000 investment in Class C
shares, assuming no redemption at the end of each time period:
<TABLE>
<CAPTION>
AIM AIM AIM AIM AIM AIM
AIM GLOBAL HIGH AIM INTERMEDIATE MONEY MUNICIPAL SELECT AIM
BALANCED UTILITIES YIELD INCOME GOVERNMENT MARKET BOND GROWTH VALUE
FUND FUND FUND FUND FUND FUND FUND FUND FUND
-------- --------- ---- ------ ------------ ------ --------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year............................... $ 18 $ 19 $ 17 $ 17 $ 19 $ 18 $ 17 $ 20 $ 19
3 years.............................. 56 60 52 53 59 57 52 62 58
</TABLE>
You would pay the following expenses on a $1,000 investment in AIM Cash
Reserve Shares of AIM MONEY MARKET FUND, assuming (1) a 5% annual return and (2)
redemption at the end of each time period:
<TABLE>
<CAPTION>
AIM MONEY
MARKET FUND
-----------
<S> <C>
1 year...................................................... $ 11
3 years..................................................... 33
5 years..................................................... 58
10 years.................................................... 128
</TABLE>
As a result of 12b-1 distribution plan payments, a long-term shareholder of
the Funds may pay more than the economic equivalent of the maximum front-end
sales charges permitted by rules of the National Association of Securities
Dealers, Inc. Given the maximum front-end and contingent deferred sales charges
and the 12b-1 distribution plan payments applicable to Class A shares, Class B
shares and Class C shares of the Funds, it is estimated that it would require a
substantial number of years to exceed the maximum permissible front-end sales
charges.
The above examples should not be considered to be representative of the Funds'
actual or future expenses, which may be greater or less than those shown. In
addition, while the examples assume a 5% annual return, each Fund's actual
performance will vary and may result in an actual return that is greater or less
than 5%. The examples assume reinvestment of all dividends and distributions and
that the percentage amounts for total fund operating expenses remain the same
for each year.
5
<PAGE> 10
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS+
The following per share data, ratios and supplemental data for the Class A
shares of AIM BALANCED FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH YIELD FUND, AIM
INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM MUNICIPAL BOND FUND, AIM
SELECT GROWTH FUND and AIM VALUE FUND for (i) all periods presented for AIM
BALANCED FUND and (ii) the years ended December 31, 1997, 1996, 1995, 1994 and
1993 for the Funds other than AIM BALANCED FUND have been audited by KPMG Peat
Marwick LLP, independent auditors, whose unqualified reports on the Funds'
financial statements and related notes appear in the Statement of Additional
Information. The per share data, ratios and supplemental data for the Class A
shares of AIM GLOBAL UTILITIES FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND, AIM MUNICIPAL BOND FUND, AIM SELECT GROWTH FUND
and AIM VALUE FUND for each of the periods presented other than those described
above have been derived from financial statements audited by Price Waterhouse
LLP, independent accountants, whose reports thereon were also unqualified. This
information should be read in conjunction with the Funds' financial statements
included in the Statement of Additional Information.
(PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
AIM BALANCED FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 1,
DECEMBER 31, 1993 TO
---------------------------------------------- DECEMBER 31,
1997 1996 1995 1994 1993
-------- -------- ------- ------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................... $ 21.84 $ 19.22 $ 14.62 $ 16.10 $ 15.97
Income from investment operations:
Net investment income................ 0.60 0.66 0.49 0.44 0.10
Net gains or losses on securities
(both realized and unrealized)....... 4.66 2.99 4.57 (1.31) 0.18
-------- -------- ------- ------- --------
Total from investment operations..... 5.26 3.65 5.06 (0.87) 0.28
-------- -------- ------- ------- --------
Less distributions:
Dividends from net investment
income............................. (0.55) (0.55) (0.46) (0.39) (0.15)
Distributions from net realized
capital gains...................... (0.77) (0.48) -- (0.22) --
-------- -------- ------- ------- --------
Total distributions.................. (1.32) (1.03) (0.46) (0.61) (0.15)
-------- -------- ------- ------- --------
Net asset value, end of period........ $ 25.78 $ 21.84 $ 19.22 $ 14.62 $ 16.10
======== ======== ======= ======= ========
Total return(a)....................... 24.41% 19.25% 34.97% (5.44)% 1.76%
======== ======== ======= ======= ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)........................... $683,633 $334,189 $92,241 $37,572 $ 23,520
======== ======== ======= ======= ========
Ratio of expenses to average net
assets............................. 0.98%(b)(c) 1.15% 1.43%(d) 1.25%(e) 2.17%(f)
======== ======== ======= ======= ========
Ratio of net investment income to
average net assets................... 2.48%(b) 2.97% 2.81%(d) 3.07%(e) 1.81%(f)
======== ======== ======= ======= ========
Portfolio turnover rate.............. 66% 72% 77% 76% 233%
======== ======== ======= ======= ========
Average broker commission rate
paid(g)............................ $ 0.0570 $ 0.0558 N/A N/A N/A
======== ======== ======= ======= ========
Borrowings for the period:
Amount of debt outstanding at end of
period............................. -- -- -- -- --
Average amount of debt outstanding
during the period(h)............... -- -- -- -- --
Average number of shares outstanding
during the period (000s
omitted)(h)........................ 21,792 9,778 3,173 2,061 1,305
Average amount of debt per share
during the period.................. -- -- -- -- --
<CAPTION>
YEAR ENDED AUGUST 31,
---------------------------------------------------
1993 1992 1991 1990 1989
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................... $ 12.77 $ 12.04 $ 9.73 $ 10.67 $ 9.08
Income from investment operations:
Net investment income................ 0.32 0.29 0.28 0.32 0.39
Net gains or losses on securities
(both realized and unrealized)....... 3.18 0.74 2.33 (0.91) 1.63
------- -------- -------- -------- --------
Total from investment operations..... 3.50 1.03 2.61 (0.59) 2.02
------- -------- -------- -------- --------
Less distributions:
Dividends from net investment
income............................. (0.30) (0.30) (0.30) (0.35) (0.43)
Distributions from net realized
capital gains...................... -- -- -- -- --
------- -------- -------- -------- --------
Total distributions.................. (0.30) (0.30) (0.30) (0.35) (0.43)
------- -------- -------- -------- --------
Net asset value, end of period........ $ 15.97 $ 12.77 $ 12.04 $ 9.73 $ 10.67
======= ======== ======== ======== ========
Total return(a)....................... 27.75% 8.66% 27.41% (5.67)% 22.96%
======= ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)........................... $19,497 $ 11,796 $ 11,750 $ 10,965 $ 14,405
======= ======== ======== ======== ========
Ratio of expenses to average net
assets............................. 2.07% 2.12% 2.39% 2.15% 1.94%
======= ======== ======== ======== ========
Ratio of net investment income to
average net assets................... 2.23% 2.32% 2.74% 3.18% 3.99%
======= ======== ======== ======== ========
Portfolio turnover rate.............. 154% 166% 208% 307% 149%
======= ======== ======== ======== ========
Average broker commission rate
paid(g)............................ N/A N/A N/A N/A N/A
======= ======== ======== ======== ========
Borrowings for the period:
Amount of debt outstanding at end of
period............................. -- -- -- -- $260,000
Average amount of debt outstanding
during the period(h)............... -- -- -- $138,181 $ 83,195
Average number of shares outstanding
during the period (000s
omitted)(h)........................ 1,046 939 1,051 1,238 1,589
Average amount of debt per share
during the period.................. -- -- -- $ 0.110 $ 0.052
</TABLE>
- ---------------
(a) Total returns do not deduct sales charges and are not annualized for periods
of less than one year.
(b) Ratios are based on average daily net assets of $530,358,031.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have remained the same.
(d) After waiver of advisory fees. Ratios of expenses and net investment income
to average net assets prior to waiver of advisory fees are 1.46% and 2.78%,
respectively.
(e) After waiver of advisory fees. Ratios of expenses and net investment income
to average net assets prior to waiver of advisory fees are 1.68% and 2.64%,
respectively.
(f) Annualized.
(g) The average commission rate paid is the total brokerage commission paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold, which is required to be
disclosed for fiscal year beginning September 1, 1995 and thereafter.
(h) Averages computed on a daily basis.
+ Each of the Funds is a separate series of shares of AIM Funds Group, a
Delaware business trust established May 5, 1993 (the "Trust"). The
shareholders of the applicable Funds separately approved a plan of
reorganization pursuant to which, effective October 15, 1993, each of the
predecessor funds to AIM GLOBAL UTILITIES FUND, AIM HIGH YIELD FUND, AIM
INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM MUNICIPAL BOND FUND, AIM
SELECT GROWTH FUND and AIM VALUE FUND, organized as separate series
portfolios of AIM Funds Group, a Massachusetts business trust ("AFG(MA)"),
and to AIM BALANCED FUND, organized as AIM Convertible Securities, Inc., a
Maryland corporation, was reorganized as a separate series portfolio of the
Trust. AIM Convertible Securities, Inc. had investment objectives and
policies that differed from those of AIM BALANCED FUND. Certain information
reported in these statements pertains to such Funds as separate series
portfolios of AFG(MA) and as a corporation, as applicable, rather than
separate series of the Trust.
6
<PAGE> 11
AIM GLOBAL UTILITIES FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1997 1996 1995 1994 1993 1992(a)
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 16.01 $ 14.59 $ 11.85 $ 14.09 $ 13.31 $ 13.75
Income from investment
operations:
Net investment income....... 0.47 0.55 0.55 0.59 0.60 0.67
Net gains or losses on
securities (both realized
and unrealized)........... 3.26 1.43 2.71 (2.20) 1.02 0.36
-------- -------- -------- -------- -------- --------
Total from investment
operations................ 3.73 1.98 3.26 (1.61) 1.62 1.03
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income......... (0.47) (0.56) (0.52) (0.60) (0.61) (0.68)
Distributions from net
realized capital gains.... (0.01) -- -- -- (0.23) (0.79)
Returns of capital.......... -- -- -- (0.03) -- --
-------- -------- -------- -------- -------- --------
Total distributions......... (0.48) (0.56) (0.52) (0.63) (0.84) (1.47)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period...................... $ 19.26 $ 16.01 $ 14.59 $ 11.85 $ 14.09 $ 13.31
======== ======== ======== ======== ======== ========
Total return(b).............. 23.70% 13.88% 28.07% (11.57)% 12.32% 7.92%
======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)............ $179,456 $164,001 $170,624 $150,515 $200,016 $111,771
======== ======== ======== ======== ======== ========
Ratio of expenses to average
net assets................ 1.13%(c)(d) 1.17% 1.21% 1.18% 1.16% 1.17%
======== ======== ======== ======== ======== ========
Ratio of net investment
income to average net
assets.................... 2.79%(c) 3.62% 4.20% 4.67% 4.21% 4.96%
======== ======== ======== ======== ======== ========
Portfolio turnover rate..... 26% 48% 88% 101% 76% 148%
======== ======== ======== ======== ======== ========
Average broker commission
rate paid(h).............. $ 0.0465 $ 0.0460 N/A N/A N/A N/A
======== ======== ======== ======== ======== ========
<CAPTION>
JANUARY 18, 1988*
YEAR ENDED DECEMBER 31, TO
-------------------------------- DECEMBER 31,
1991 1990 1989 1988
-------- -------- -------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 12.45 $ 13.73 $ 10.99 $ 10.00
Income from investment
operations:
Net investment income....... 0.70 0.66 0.77 0.82
Net gains or losses on
securities (both realized
and unrealized)........... 2.12 (1.10) 3.06 0.83
-------- -------- -------- -------
Total from investment
operations................ 2.82 (0.44) 3.83 1.65
-------- -------- -------- -------
Less distributions:
Dividends from net
investment income......... (0.66) (0.70) (0.69) (0.66)
Distributions from net
realized capital gains.... (0.86) (0.14) (0.40) --
Returns of capital.......... -- -- -- --
-------- -------- -------- -------
Total distributions......... (1.52) (0.84) (1.09) (0.66)
-------- -------- -------- -------
Net asset value, end of
period...................... $ 13.75 $ 12.45 $ 13.73 $ 10.99
======== ======== ======== =======
Total return(b).............. 23.65% (2.98)% 36.11% 17.03%
======== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period
(000s omitted)............ $ 91,939 $ 69,541 $ 58,307 $20,104
======== ======== ======== =======
Ratio of expenses to average
net assets................ 1.23% 1.21%(e) 1.05%(e) 1.22%(e)(f)
======== ======== ======== =======
Ratio of net investment
income to average net
assets.................... 5.36% 5.21%(g) 6.13%(g) 7.63%(f)(g)
======== ======== ======== =======
Portfolio turnover rate..... 169% 123% 115% 87%
======== ======== ======== =======
Average broker commission
rate paid(h).............. N/A N/A N/A N/A
======== ======== ======== =======
</TABLE>
- ---------------
(a) The Fund changed investment advisors on June 30, 1992.
(b) Total returns do not deduct sales charges and are not annualized for periods
of less than one year.
(c) Ratios are based on average daily net assets of $164,764,424.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been 1.12%.
(e) Ratios of expenses to average net assets prior to reduction of advisory fees
were 1.22%, 1.11% and 1.69% (annualized) for 1990-1988, respectively.
(f) Annualized.
(g) Ratios of net investment income to average net assets prior to reduction of
advisory fees were 5.20%, 6.07% and 7.16% (annualized) for 1990-1988,
respectively.
(h) The average broker commission rate paid is the total brokerage commission
paid on applicable purchases and sales of securities for the period divided
by the total number of related shares purchased or sold, which is required
to be disclosed for fiscal year beginning September 1, 1995 and thereafter.
* Commencement of operations.
7
<PAGE> 12
AIM HIGH YIELD FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992(a) 1991
---------- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 9.88 $ 9.43 $ 8.93 $ 10.05 $ 9.40 $ 8.86 $ 7.07
Income from investment operations:
Net investment income.................. 0.90 0.92 0.93 0.96 0.97 1.04 1.02
Net gains or losses on securities (both
realized and unrealized)............. 0.28 0.46 0.52 (1.12) 0.69 0.55 1.81
---------- ---------- -------- -------- -------- -------- --------
Total from investment operations....... 1.18 1.38 1.45 (0.16) 1.66 1.59 2.83
---------- ---------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income... (0.90) (0.93) (0.95) (0.96) (1.01) (1.05) (1.04)
---------- ---------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 10.16 $ 9.88 $ 9.43 $ 8.93 $ 10.05 $ 9.40 $ 8.86
========== ========== ======== ======== ======== ======== ========
Total return(b)......................... 12.52% 15.44% 16.86% (1.67)% 18.40% 18.60% 42.18%
========== ========== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)....................... $1,786,352 $1,272,974 $886,106 $578,959 $550,760 $324,518 $259,677
========== ========== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets............................... 0.90%(c)(d) 0.97% 0.96% 1.00% 1.12% 1.15% 1.22%
========== ========== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets................... 9.08%(c) 9.67% 9.95% 10.07% 9.82% 11.00% 12.67%
========== ========== ======== ======== ======== ======== ========
Portfolio turnover rate................ 80% 77% 61% 53% 53% 56% 61%
========== ========== ======== ======== ======== ======== ========
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1990 1989 1988
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period.... $ 8.94 $ 10.01 $ 9.67
Income from investment operations:
Net investment income.................. 1.09 1.21 1.18
Net gains or losses on securities (both
realized and unrealized)............. (1.84) (1.07) 0.34
-------- -------- --------
Total from investment operations....... (0.75) 0.14 1.52
-------- -------- --------
Less distributions:
Dividends from net investment income... (1.12) (1.21) (1.18)
-------- -------- --------
Net asset value, end of period.......... $ 7.07 $ 8.94 $ 10.01
======== ======== ========
Total return(b)......................... (9.03)% 1.18% 16.41%
======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)....................... $204,932 $261,920 $274,631
======== ======== ========
Ratio of expenses to average net
assets............................... 1.21%(e) 0.99% 0.96%(e)
======== ======== ========
Ratio of net investment income to
average net assets................... 13.59%(f) 12.40% 11.84%(f)
======== ======== ========
Portfolio turnover rate................ 27% 36% 76%
======== ======== ========
</TABLE>
- ---------------
(a) The Fund changed investment advisors on June 30, 1992.
(b) Total returns do not deduct sales charges.
(c) Ratios are based on average net assets of $1,479,737,639.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been 0.89%.
(e) Ratios of expenses to average net assets prior to reduction of advisory fees
were 1.22% and 1.00% for 1990 and 1988, respectively.
(f) Ratios of net investment income to average net assets prior to reduction of
advisory fees were 13.58% and 11.80% for 1990 and 1988, respectively.
AIM INCOME FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992(a) 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 8.24 $ 8.17 $ 7.20 $ 8.45 $ 8.03 $ 8.07 $ 7.41
Income from investment operations:
Net investment income.................. 0.55 0.57 0.58 0.58 0.60 0.60 0.61
Net gains or losses on securities (both
realized and unrealized)............. 0.39 0.09 1.00 (1.22) 0.61 (0.03) 0.66
-------- -------- -------- -------- -------- -------- --------
Total from investment operations....... 0.94 0.66 1.58 (0.64) 1.21 0.57 1.27
-------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income... (0.52) (0.59) (0.61) (0.49) (0.60) (0.61) (0.61)
Distributions from net realized capital
gains................................ (0.09) -- -- (0.01) (0.19) -- --
Returns of capital..................... -- -- -- (0.11) -- -- --
-------- -------- -------- -------- -------- -------- --------
Total distributions.................... (0.61) (0.59) (0.61) (0.61) (0.79) (0.61) (0.61)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 8.57 $ 8.24 $ 8.17 $ 7.20 $ 8.45 $ 8.03 $ 8.07
======== ======== ======== ======== ======== ======== ========
Total return(b)......................... 11.92% 8.58% 22.77% (7.65)% 15.38% 7.42% 18.00%
======== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)....................... $340,608 $286,183 $251,280 $201,677 $244,168 $218,848 $231,798
======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets............................... 0.94%(c)(d) 0.98% 0.98% 0.98% 0.98% 0.99%(e) 1.00%(e)
======== ======== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets................... 6.55%(c) 7.13% 7.52% 7.53% 7.01% 7.54%(e) 7.97%(e)
======== ======== ======== ======== ======== ======== ========
Portfolio turnover rate................ 54% 80% 227% 185% 99% 82% 67%
======== ======== ======== ======== ======== ======== ========
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1990 1989 1988
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period.... $ 7.80 $ 7.53 $ 7.55
Income from investment operations:
Net investment income.................. 0.65 0.66 0.68
Net gains or losses on securities (both
realized and unrealized)............. (0.39) 0.32 (0.02)
-------- -------- --------
Total from investment operations....... 0.26 0.98 0.66
-------- -------- --------
Less distributions:
Dividends from net investment income... (0.65) (0.71) (0.68)
Distributions from net realized capital
gains................................ -- -- --
Returns of capital..................... -- -- --
-------- -------- --------
Total distributions.................... (0.65) (0.71) (0.68)
-------- -------- --------
Net asset value, end of period.......... $ 7.41 $ 7.80 $ 7.53
======== ======== ========
Total return(b)......................... 3.65% 13.56% 9.01%
======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)....................... $215,987 $229,222 $218,946
======== ======== ========
Ratio of expenses to average net
assets............................... 1.00% 0.96% 0.95%
======== ======== ========
Ratio of net investment income to
average net assets................... 8.73% 8.56% 8.81%
======== ======== ========
Portfolio turnover rate................ 106% 222% 361%
======== ======== ========
</TABLE>
- ---------------
(a) The Fund changed investment advisors on June 30, 1992.
(b) Total returns do not deduct sales charges.
(c) Ratios are based on average net assets of $299,824,848.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid expenses,
the ratio of expenses to average daily net assets would have been the same.
(e) After waiver of advisory fees and expense reimbursements. Ratios of expenses
to average net assets prior to waiver of advisory fees and expense
reimbursements were 1.00% and 1.03% for 1992 and 1991, respectively. Ratios
of net investment income to average net assets prior to waiver of advisory
fees and expense reimbursements were 7.53% and 7.94% for 1992 and 1991,
respectively.
8
<PAGE> 13
AIM INTERMEDIATE GOVERNMENT FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992(a) 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period..... $ 9.28 $ 9.70 $ 8.99 $ 10.05 $ 10.19 $ 10.34 $ 9.95
Income from investment operations:
Net investment income................... 0.63 0.63 0.69 0.68 0.74 0.77 0.82
Net gains or losses on securities (both
realized and unrealized).............. 0.18 (0.42) 0.73 (1.02) (0.04) (0.15) 0.41
-------- -------- -------- -------- -------- -------- --------
Total from investment operations........ 0.81 0.21 1.42 (0.34) 0.70 0.62 1.23
-------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income.... (0.61) (0.59) (0.67) (0.58) (0.70) (0.74) (0.84)
Distributions from net realized capital
gains................................. -- -- -- (0.04) (0.14) (0.03) --
Returns of capital...................... (0.02) (0.04) (0.04) (0.10) -- -- --
-------- -------- -------- -------- -------- -------- --------
Total distributions..................... (0.63) (0.63) (0.71) (0.72) (0.84) (0.77) (0.84)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of period........... $ 9.46 $ 9.28 $ 9.70 $ 8.99 $ 10.05 $ 10.19 $ 10.34
======== ======== ======== ======== ======== ======== ========
Total return(b).......................... 9.07% 2.35% 16.28% (3.44)% 7.07% 6.26% 12.98%
======== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)........................ $167,427 $174,344 $176,318 $158,341 $139,586 $123,484 $101,409
======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets
(exclusive of interest expense)(c).... 1.00%(d)(e) 1.00% 1.08% 1.04% 1.00% 0.98% 1.00%
======== ======== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets(f)................. 6.77%(d) 6.76% 7.36% 7.34% 7.08% 7.53% 8.15%
======== ======== ======== ======== ======== ======== ========
Portfolio turnover rate................. 99% 134% 140% 109% 110% 42% 26%
Borrowings for the period:
Amount of debt outstanding at end of
period (000s omitted)................. $ -- -- -- -- -- -- --
Average amount of debt outstanding
during the period (000s omitted)(g)... $ 4,433 -- -- -- -- -- --
Average number of shares outstanding
during the period (000s omitted)(g)... $ 17,470 -- -- -- -- -- --
Average amount of debt per share during
the period............................ $ 0.2537 -- -- -- -- -- --
======== ======== ======== ======== ======== ======== ========
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1990 1989 1988
-------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period..... $ 9.91 $ 9.70 $ 9.92
Income from investment operations:
Net investment income................... 0.87 0.90 0.89
Net gains or losses on securities (both
realized and unrealized).............. 0.01 0.15 (0.27)
-------- ------- -------
Total from investment operations........ 0.88 1.05 0.62
-------- ------- -------
Less distributions:
Dividends from net investment income.... (0.84) (0.84) (0.84)
Distributions from net realized capital
gains................................. -- -- --
Returns of capital...................... -- -- --
-------- ------- -------
Total distributions..................... (0.84) (0.84) (0.84)
-------- ------- -------
Net asset value, end of period........... $ 9.95 $ 9.91 $ 9.70
======== ======= =======
Total return(b).......................... 9.39% 11.28% 6.43%
======== ======= =======
Ratios/supplemental data:
Net assets, end of period
(000s omitted)........................ $ 61,463 $57,077 $48,372
======== ======= =======
Ratio of expenses to average net assets
(exclusive of interest expense)(c).... 1.00% 1.00% 1.00%
======== ======= =======
Ratio of net investment income to
average net assets(f)................. 8.85% 9.10% 9.11%
======== ======= =======
Portfolio turnover rate................. 16% 15% 15%
Borrowings for the period:
Amount of debt outstanding at end of
period (000s omitted)................. -- -- --
Average amount of debt outstanding
during the period (000s omitted)(g)... -- -- --
Average number of shares outstanding
during the period (000s omitted)(g)... -- -- --
Average amount of debt per share during
the period............................ -- -- --
======== ======= =======
</TABLE>
- ---------------
(a) The Fund changed investment advisors on June 30, 1992.
(b) Total returns do not deduct sales charges.
(c) Ratios of expenses to average net assets prior to reduction of advisory fee
and expense reimbursement were 1.05%, 1.04%, 1.04%, 1.10%, 1.13%, 1.08% and
1.08% for 1994-1988, respectively.
(d) Ratios are based on average net assets of $162,149,081.
(e) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(f) Ratios of net investment income to average net assets prior to reduction of
advisory fee and expense reimbursement were 7.32%, 7.04%, 7.48%, 8.05%,
8.72%, 9.03% and 9.03% for 1994-1988, respectively.
(g) Averages computed on a daily basis.
9
<PAGE> 14
AIM MUNICIPAL BOND FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992(a) 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 8.19 $ 8.31 $ 7.78 $ 8.61 $ 8.27 $ 8.13 $ 7.66
Income from investment operations:
Net investment income.................. 0.42 0.43 0.43 0.46 0.48 0.51 0.52
Net gains or losses on securities (both
realized and unrealized)............. 0.16 (0.12) 0.56 (0.78) 0.46 0.21 0.46
-------- -------- -------- -------- -------- -------- --------
Total from investment operations....... 0.58 0.31 0.99 (0.32) 0.94 0.72 0.98
-------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income... (0.43) (0.43) (0.43) (0.45) (0.48) (0.51) (0.51)
Distributions from net realized capital
gains................................ -- -- -- (0.03) (0.11) (0.07) --
Returns of capital..................... -- -- (0.03) (0.03) (0.01) -- --
-------- -------- -------- -------- -------- -------- --------
Total distributions.................... (0.43) (0.43) (0.46) (0.51) (0.60) (0.58) (0.51)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 8.34 $ 8.19 $ 8.31 $ 7.78 $ 8.61 $ 8.27 $ 8.13
======== ======== ======== ======== ======== ======== ========
Total return(b)......................... 7.27% 3.90% 13.05% (3.79)% 11.66% 9.10% 13.30%
======== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................. $318,469 $278,812 $284,803 $257,456 $294,209 $271,205 $273,037
======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets............................... 0.90%(c)(d) 0.80%(b)(c) 0.88% 0.89% 0.91% 0.90% 0.94%
======== ======== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets................... 5.14%(c) 5.29% 5.26% 5.61% 5.65% 6.15% 6.58%
======== ======== ======== ======== ======== ======== ========
Portfolio turnover rate................ 24% 26% 36% 43% 24% 160% 289%
======== ======== ======== ======== ======== ======== ========
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1990 1989 1988
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period.... $ 7.81 $ 7.64 $ 7.32
Income from investment operations:
Net investment income.................. 0.53 0.54 0.53
Net gains or losses on securities (both
realized and unrealized)............. (0.14) 0.18 0.34
-------- -------- --------
Total from investment operations....... 0.39 0.72 0.87
-------- -------- --------
Less distributions:
Dividends from net investment income... (0.53) (0.55) (0.55)
Distributions from net realized capital
gains................................ -- -- --
Returns of capital..................... (0.01) -- --
-------- -------- --------
Total distributions.................... (0.54) (0.55) (0.55)
-------- -------- --------
Net asset value, end of period.......... $ 7.66 $ 7.81 $ 7.64
======== ======== ========
Total return(b)......................... 5.27% 9.70% 12.33%
======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................. $258,194 $262,997 $243,480
======== ======== ========
Ratio of expenses to average net
assets............................... 0.91% 0.89% 0.87%
======== ======== ========
Ratio of net investment income to
average net assets................... 6.91% 6.97% 7.11%
======== ======== ========
Portfolio turnover rate................ 230% 305% 381%
======== ======== ========
</TABLE>
- ---------------
(a) The Fund changed investment advisors on June 30, 1992.
(b) Total returns do not deduct sales charges.
(c) Ratios are based on average net assets of $293,030,139.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
AIM SELECT GROWTH FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992(a) 1991
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $ 14.78 $ 13.05 $ 10.32 $ 11.32 $ 12.28 $ 14.73 $ 12.35
Income from investment operations:
Net investment income................. 0.01(b) 0.07 0.02(b) -- -- 0.06 0.11
Net gains or losses on securities
(both realized and unrealized)...... 2.82 2.34 3.50 (0.57) 0.41 (0.04) 4.33
-------- -------- -------- -------- -------- -------- --------
Total from investment operations...... 2.83 2.41 3.52 (0.57) 0.41 0.02 4.44
-------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment
income.............................. (0.01) -- -- -- -- (0.06) (0.13)
Distributions from net realized
capital gains....................... (1.93) (0.68) (0.79) (0.43) (1.37) (2.41) (1.93)
-------- -------- -------- -------- -------- -------- --------
Total distributions................... (1.94) (0.68) (0.79) (0.43) (1.37) (2.47) (2.06)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of period......... $ 15.67 $ 14.78 $ 13.05 $ 10.32 $ 11.32 $ 12.28 $ 14.73
======== ======== ======== ======== ======== ======== ========
Total return(c)........................ 19.54% 18.61% 34.31% (4.99)% 3.64% 0.19% 37.05%
======== ======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................ $266,168 $227,882 $168,217 $123,271 $146,723 $168,395 $185,461
======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets.............................. 1.13%(d)(e) 1.18% 1.28% 1.22% 1.17% 1.17% 1.21%
======== ======== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets.................. 0.04%(d) 0.46% 0.20% 0.02% 0.02% 0.42% 0.73%
======== ======== ======== ======== ======== ======== ========
Portfolio turnover rate............... 110% 97% 87% 201% 192% 133% 73%
======== ======== ======== ======== ======== ======== ========
Average broker commission rate
paid(f)............................. $ 0.0568 $ 0.0621 N/A N/A N/A N/A N/A
======== ======== ======== ======== ======== ======== ========
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1990 1989 1988
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period... $ 13.92 $ 11.93 $ 11.04
Income from investment operations:
Net investment income................. 0.21 0.25 0.23
Net gains or losses on securities
(both realized and unrealized)...... (0.91) 3.16 0.89
-------- -------- --------
Total from investment operations...... (0.70) 3.41 1.12
-------- -------- --------
Less distributions:
Dividends from net investment
income.............................. (0.20) (0.27) (0.23)
Distributions from net realized
capital gains....................... (0.67) (1.15) --
-------- -------- --------
Total distributions................... (0.87) (1.42) (0.23)
-------- -------- --------
Net asset value, end of period......... $ 12.35 $ 13.92 $ 11.93
======== ======== ========
Total return(c)........................ (5.04)% 28.87% 10.13%
======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................ $153,245 $187,805 $180,793
======== ======== ========
Ratio of expenses to average net
assets.............................. 1.16% 1.00% 0.98%
======== ======== ========
Ratio of net investment income to
average net assets.................. 1.41% 1.62% 1.73%
======== ======== ========
Portfolio turnover rate............... 61% 53% 38%
======== ======== ========
Average broker commission rate
paid(f)............................. N/A N/A N/A
======== ======== ========
</TABLE>
- ---------------
(a) The Fund changed investment advisors on June 30, 1992.
(b) Calculated using average shares outstanding.
(c) Total returns do not deduct sales charges.
(d) Ratios are based on average net assets of $253,479,200.
(e) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(f) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
10
<PAGE> 15
AIM VALUE FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992(a) 1991
---------- ---------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 29.15 $ 26.81 $ 21.14 $ 20.82 $ 18.24 $ 17.55 $ 13.75
Income from investment operations:
Net investment income.................. 0.17 0.43(b) 0.14 0.16 0.04 0.12 0.13
Net gains on securities
(both realized and
unrealized).......................... 6.78 3.42 7.21 0.52 3.34 2.68 5.73
---------- ---------- ---------- ---------- -------- -------- --------
Total from investment operations....... 6.95 3.85 7.35 0.68 3.38 2.80 5.86
---------- ---------- ---------- ---------- -------- -------- --------
Less distributions:
Dividends from net investment income... (0.04) (0.41) (0.09) (0.16) (0.03) (0.12) (0.14)
Distributions from net realized capital
gains................................ (3.64) (1.10) (1.59) (0.20) (0.77) (1.99) (1.92)
---------- ---------- ---------- ---------- -------- -------- --------
Total distributions.................... (3.68) (1.51) (1.68) (0.36) (0.80) (2.11) (2.06)
---------- ---------- ---------- ---------- -------- -------- --------
Net asset value, end
of period.............................. $ 32.42 $ 29.15 $ 26.81 $ 21.14 $ 20.82 $ 18.24 $ 17.55
========== ========== ========== ========== ======== ======== ========
Total return(c)......................... 23.95% 14.52% 34.85% 3.28% 18.71% 16.39% 43.45%
========== ========== ========== ========== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)....................... $6,745,253 $5,100,061 $3,408,952 $1,358,725 $765,305 $239,663 $152,149
========== ========== ========== ========== ======== ======== ========
Ratio of expenses to average net
assets(d)............................ 1.04%(e)(f) 1.11% 1.12% 0.98% 1.09% 1.16% 1.22%
========== ========== ========== ========== ======== ======== ========
Ratio of net investment income to
average net assets(g)................ 0.57%(e) 1.65%(d) 0.74% 0.92% 0.30% 0.75% 0.89%
========== ========== ========== ========== ======== ======== ========
Portfolio turnover rate................ 137% 126% 151% 127% 177% 170% 135%
========== ========== ========== ========== ======== ======== ========
Average broker commission rate
paid(h).............................. $ 0.0481 $ 0.0436 N/A N/A N/A N/A N/A
========== ========== ========== ========== ======== ======== ========
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1990 1989 1988
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period.... $ 14.53 $ 12.79 $ 11.47
Income from investment operations:
Net investment income.................. 0.26 0.40 0.26
Net gains on securities
(both realized and
unrealized).......................... 0.01 3.58 2.07
-------- -------- --------
Total from investment operations....... 0.27 3.98 2.33
-------- -------- --------
Less distributions:
Dividends from net investment income... (0.26) (0.43) (0.26)
Distributions from net realized capital
gains................................ (0.79) (1.81) (0.75)
-------- -------- --------
Total distributions.................... (1.05) (2.24) (1.01)
-------- -------- --------
Net asset value, end
of period.............................. $ 13.75 $ 14.53 $ 12.79
======== ======== ========
Total return(c)......................... 1.88% 31.54% 20.61%
======== ======== ========
Ratios/supplemental data:
Net assets, end of period
(000s omitted)....................... $ 86,565 $ 76,444 $ 60,076
======== ======== ========
Ratio of expenses to average net
assets(d)............................ 1.21% 1.00% 1.00%
======== ======== ========
Ratio of net investment income to
average net assets(g)................ 1.87% 2.65% 1.98%
======== ======== ========
Portfolio turnover rate................ 131% 152% 124%
======== ======== ========
Average broker commission rate
paid(h).............................. N/A N/A N/A
======== ======== ========
</TABLE>
- ---------------
(a) The Fund changed investment advisors on June 30, 1992.
(b) Calculated using average shares outstanding.
(c) Total returns do not deduct sales charges.
(d) Ratios of expenses to average net assets prior to reduction of advisory fees
were 1.06%, 1.13%, 1.13%, 1.23%, 1.09% and 1.08% for 1997, 1996, 1995,
1990-1988, respectively.
(e) Ratios are based on average net assets of $6,039,532,925.
(f) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(g) Ratios of net investment income to average net assets prior to reduction of
advisory fees were 0.55%, 1.63%, 0.73%, 1.85%, 2.56% and 1.90% for 1997,
1996, 1995, 1990-1988, respectively.
(h) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
11
<PAGE> 16
The following per share data, ratios and supplemental data for the Class B and
Class C shares of AIM BALANCED FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH YIELD
FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM MUNICIPAL BOND
FUND, AIM SELECT GROWTH FUND and AIM VALUE FUND for the periods indicated have
been audited by KPMG Peat Marwick LLP, independent auditors, whose unqualified
reports on the Funds' financial statements and related notes appear in the
Statement of Additional Information. This information should be read in
conjunction with the Funds' financial statements included in the Statement of
Additional Information.
AIM BALANCED FUND
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
---------------------------------------------------------------------- ------------------
YEAR ENDED DECEMBER 31, OCTOBER 18, 1993* AUGUST 4, 1997*
------------------------------------------------- TO TO
1997 1996 1995 1994 DECEMBER 31, 1993 DECEMBER 31, 1997
-------- -------- ------- ------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................. $ 21.83 $ 19.22 $ 14.62 $ 16.11 $16.69 $ 25.55
Income from investment operations:
Net investment income.............. 0.38 0.48 0.31 0.31 0.04 0.16
Net gains (losses) on securities
(both realized and unrealized)... 4.68 2.99 4.61 (1.31) (0.58) 1.01
-------- -------- ------- ------- ------ -------
Total from investment operations... 5.06 3.47 4.92 (1.00) (0.54) 1.17
-------- -------- ------- ------- ------ -------
Less distributions:
Dividends from net investment
income........................... (0.37) (0.38) (0.32) (0.27) (0.04) (0.19)
Distributions from net realized
capital gains.................... (0.77) (0.48) -- (0.22) -- (0.77)
-------- -------- ------- ------- ------ -------
Total distributions................ (1.14) (0.86) (0.32) (0.49) (0.04) (0.96)
-------- -------- ------- ------- ------ -------
Net asset value, end of period...... $ 25.75 $ 21.83 $ 19.22 $ 14.62 $16.11 $ 25.76
======== ======== ======= ======= ====== =======
Total return(a)..................... 23.42% 18.28% 33.93% (6.23)% (3.23)% 4.67%
======== ======== ======= ======= ====== =======
Ratios/supplemental data:
Net assets, end of period (000s
omitted)......................... $486,506 $237,082 $72,634 $20,245 $2,754 $ 9,394
======== ======== ======= ======= ====== =======
Ratio of expenses to average net
assets........................... 1.79%(b)(c) 1.97% 2.21%(d) 1.98%(e) 2.83%(f) 1.78%(c)(g)
======== ======== ======= ======= ====== =======
Ratio of net investment income to
average net assets............... 1.67%(b) 2.15% 2.03%(d) 2.34%(e) 1.15%(f) 1.68%(g)
======== ======== ======= ======= ====== =======
Portfolio turnover rate............ 66% 72% 77% 76% 233% 66%
======== ======== ======= ======= ====== =======
Average broker commission rate
paid(h).......................... $ 0.0570 $ 0.0558 N/A N/A N/A $0.0570
======== ======== ======= ======= ====== =======
</TABLE>
- ---------------
(a) Total returns do not deduct contingent deferred sales charges and are not
annualized for periods of less than one year.
(b) Ratios are based on average net assets of $351,722,707.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(d) After waiver of advisory fees. Ratios of expenses and net investment income
to average net assets prior to waiver of advisory fees are 2.23% and 2.01%,
respectively.
(e) After waiver of advisory fees. Ratios of expenses and net investment income
to average net assets prior to waiver of advisory fees are 2.45% and 1.87%,
respectively.
(f) Annualized.
(g) Ratios are annualized and based on average net assets of $3,167,605.
(h) The average commission rate paid is the total brokerage commission paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
* Date sales commenced.
12
<PAGE> 17
AIM GLOBAL UTILITIES FUND
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
----------------------------------------------------------------- -----------------
YEAR ENDED DECEMBER 31, SEPTEMBER 1, 1993* AUGUST 4, 1997*
-------------------------------------------- TO TO
1997 1996 1995 1994 DECEMBER 31, 1993 DECEMBER 31, 1997
------- ------- ------- ------- ------------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 16.01 $ 14.60 $ 11.84 $ 14.08 $ 15.30 $ 17.67
Income from investment operations:
Net investment income.................. 0.34 0.42 0.44 0.47 0.17 0.13
Net gains (losses) on securities (both
realized and unrealized)............. 3.25 1.44 2.73 (2.19) (0.98) 1.58
------- ------- ------- ------- ------- -------
Total from investment operations....... 3.59 1.86 3.17 (1.72) (0.81) 1.71
------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income... (0.35) (0.45) (0.41) (0.49) (0.17) (0.13)
Distributions from net realized capital
gains................................ (0.01) -- -- -- (0.24) (0.01)
Returns of capital..................... -- -- -- (0.03) -- --
------- ------- ------- ------- ------- -------
Total distributions.................... (0.36) (0.45) (0.41) (0.52) (0.41) (0.14)
------- ------- ------- ------- ------- -------
Net asset value, end of period.......... $ 19.24 $ 16.01 $ 14.60 $ 11.84 $ 14.08 $ 19.24
======= ======= ======= ======= ======= =======
Total return(a)......................... 22.74% 12.98% 27.16% (12.35)% (5.32)% 9.74%
======= ======= ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................. $94,227 $79,530 $70,693 $42,568 $23,892 1,183
======= ======= ======= ======= ======= =======
Ratio of expenses to average net
assets............................... 1.91%(b)(c) 1.96% 1.97% 2.07% 1.99%(d) 1.90%(b)(c)(c)
======= ======= ======= ======= ======= =======
Ratio of net investment income to
average net assets................... 2.01%(b) 2.83% 3.44% 3.78% 3.38%(d) 2.02%(b)(d)
======= ======= ======= ======= ======= =======
Portfolio turnover rate................ 26% 48% 88% 101% 76% 26%
======= ======= ======= ======= ======= =======
Average broker commission rate
paid(e).............................. $0.0405 $0.0460 N/A N/A N/A 0.0465
======= ======= ======= ======= ======= =======
</TABLE>
- ---------------
(a) Total returns do not deduct contingent deferred sales charges and are not
annualized for periods of less than one year.
(b) Ratios are based on average net assets of 83,218,352 and $378,512,
respectively for Class B and Class C shares.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same for
Class B and 1.89% (annualized) for Class C.
(d) Annualized.
(e) The average commission rate paid is the total brokerage commission paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold, which is required to be
disclosed for fiscal year beginning September 1, 1995 and thereafter.
* Date sales commenced.
AIM HIGH YIELD FUND
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
------------------------------------------------------------------------- ------------------
YEAR ENDED DECEMBER 31, SEPTEMBER 1, 1993* AUGUST 4, 1997*
---------------------------------------------------- TO TO
1997 1996 1995 1994 DECEMBER 31, 1993 DECEMBER 31, 1997
---------- ---------- -------- -------- ------------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period......................... $ 9.88 $ 9.42 $ 8.92 $ 10.04 $ 9.96 $ 10.04
Income from investment
operations:
Net investment income.......... 0.83 0.85 0.85 0.87 0.32 0.35
Net gains (losses) on
securities (both realized and
unrealized).................. 0.28 0.47 0.52 (1.10) 0.07 0.10
---------- ---------- -------- -------- ------- -------
Total from investment
operations................... 1.11 1.32 1.37 (0.23) 0.39 0.45
---------- ---------- -------- -------- ------- -------
Less distributions:
Dividends from net investment
income....................... (0.83) (0.86) (0.87) (0.89) (0.31) (0.35)
---------- ---------- -------- -------- ------- -------
Net asset value, end of
period......................... $ 10.16 $ 9.88 $ 9.42 $ 8.92 $ 10.04 $ 10.14
========== ========== ======== ======== ======= =======
Total return(a)................. 11.71% 14.68% 15.91% (2.48)% 4.00% 4.49%
========== ========== ======== ======== ======= =======
Ratios/supplemental data:
Net assets, end of period (000s
omitted)..................... $1,647,801 $1,068,060 $557,926 $191,338 $31,264 $26,177
========== ========== ======== ======== ======= =======
Ratio of expenses to average
net assets................... 1.65%(b)(c) 1.68% 1.73% 1.80% 1.93%(d) 1.68%(b)(c)(d)
========== ========== ======== ======== ======= =======
Ratio of net investment income
to average net assets........ 8.33%(b) 8.95 9.18% 9.27% 8.99%(d) 8.30%(b)(d)
========== ========== ======== ======== ======= =======
Portfolio turnover rate........ 80% 77% 61% 53% 53% 80%
========== ========== ======== ======== ======= =======
</TABLE>
- ---------------
(a) Total returns do not deduct contingent deferred sales charges and are not
annualized for periods of less than one year.
(b) Ratios are based on average net assets of $1,345,322,915 and $10,445,598,
respectively, for Class B and Class C shares.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same for
Class B and 1.66% (annualized) for Class C shares.
(d) Annualized.
* Date sales commenced.
13
<PAGE> 18
AIM INCOME FUND
<TABLE>
<CAPTION>
CLASS C
CLASS B SHARES SHARES
--------------------------------------------------------------- ---------------
SEPTEMBER 7, AUGUST 4,
1993* 1997*
YEAR ENDED DECEMBER 31, TO TO
----------------------------------------------- DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994 1993 1997
-------- ------- ------- ------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $ 8.23 $ 8.15 $ 7.18 $ 8.43 $ 8.95 $ 8.38
Income from investment operations:
Net investment income..................... 0.48 0.50 0.53 0.52 0.19 0.19
Net gains (losses) on securities (both
realized and unrealized)................ 0.38 0.11 0.98 (1.23) (0.34) 0.22
-------- ------- ------- ------- ------- -------
Total from investment operations.......... 0.86 0.61 1.51 (0.71) (0.15) 0.41
-------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income...... (0.45) (0.53) (0.54) (0.42) (0.18) (0.16)
Distributions from net realized capital
gains................................... (0.09) -- -- (0.01) (0.19) (0.09)
Returns of capital........................ -- -- -- (0.11) -- --
-------- ------- ------- ------- ------- -------
Total distributions....................... (0.54) (0.53) (0.54) (0.54) (0.37) (0.25)
-------- ------- ------- ------- ------- -------
Net asset value, end of period............. $ 8.55 $ 8.23 $ 8.15 $ 7.18 $ 8.43 $ 8.54
======== ======= ======= ======= ======= =======
Total return(a)............................ 10.89% 7.87% 21.72% (8.46)% (0.75)% 4.96%
======== ======= ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted).. $125,871 $85,343 $44,304 $12,321 $ 3,602 $ 2,552
======== ======= ======= ======= ======= =======
Ratio of expenses to average net assets... 1.69%(b)(c) 1.80% 1.79% 1.83%(d) 1.75%(d)(e) 1.69%(b)(c)(e)
======== ======= ======= ======= ======= =======
Ratio of net investment income to average
net assets.............................. 5.80%(b) 6.30% 6.71% 6.69%(d) 6.24%(d)(e) 5.80%(b)(e)
======== ======= ======= ======= ======= =======
Portfolio turnover rate................... 54% 80% 227% 185% 99% 54%
======== ======= ======= ======= ======= =======
</TABLE>
- ---------------
(a) Total returns do not deduct contingent deferred sales charges and are not
annualized for periods of less than one year.
(b) Ratios are based on average net assets of $100,307,548 and $739,696,
respectively, for Class B and Class C shares.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been 1.68% for Class
B and Class C shares.
(d) After expense reimbursements. Ratios of expenses and net investment income
to average net assets prior to expense reimbursements were 2.04% and 2.50%
(annualized) and 6.48% and 5.49% (annualized) for 1994 and 1993,
respectively.
(e) Annualized.
* Date sales commenced.
AIM INTERMEDIATE GOVERNMENT FUND
<TABLE>
<CAPTION>
CLASS C
CLASS B SHARES SHARES
--------------------------------------------------------------- -----------
SEPTEMBER 7, AUGUST 4,
1993* 1997*
YEAR ENDED DECEMBER 31, TO TO
------------------------------------------------ DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994 1993 1997
-------- -------- -------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 9.28 $ 9.69 $ 8.99 $ 10.04 $ 10.44 $ 9.33
Income from investment operations:
Net investment income....................... 0.56 0.55 0.63 0.61 0.21 0.24
Net gains (losses) on securities (both
realized and unrealized).................. 0.17 (0.41) 0.70 (1.02) (0.27) 0.10
-------- -------- -------- -------- ------- -------
Total from investment operations............ 0.73 0.14 1.33 (0.41) (0.06) 0.34
-------- -------- -------- -------- ------- -------
Less distributions:
Dividends from net investment income........ (0.53) (0.51) (0.59) (0.50) (0.20) (0.22)
Distributions from net realized capital
gains..................................... -- -- -- (0.04) (0.14) --
Returns of capital.......................... (0.02) (0.04) (0.04) (0.10) -- (0.01)
-------- -------- -------- -------- ------- -------
Total distributions......................... (0.55) (0.55) (0.63) (0.64) (0.34) (0.23)
-------- -------- -------- -------- ------- -------
Net asset value, end of period............... $ 9.46 $ 9.28 $ 9.69 $ 8.99 $ 10.04 $ 9.44
======== ======== ======== ======== ======= =======
Total return(a).............................. 8.16% 1.61% 15.22% (4.13)% (0.52)% 3.64%
======== ======== ======== ======== ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted).... $ 89,265 $ 79,443 $ 61,300 $ 23,415 $ 6,160 $ 1,851
======== ======== ======== ======== ======= =======
Ratio of expenses to average net assets
(exclusive of interest expense)(b)........ 1.76%(c)(d) 1.76% 1.86% 1.82% 1.71%(e) 1.76%(c)(d)(e)
======== ======== ======== ======== ======= =======
Ratio of net investment income to average
net assets(f)............................. 6.01%(c) 6.00% 6.58% 6.56% 6.37%(e) 6.01%(c)(e)
======== ======== ======== ======== ======= =======
Portfolio turnover rate..................... 99% 134% 140% 109% 110% 99%
======== ======== ======== ======== ======= =======
Borrowings for the period:
Amount of debt outstanding at end of period
(000s omitted)............................ $ -- -- -- -- -- $ --
Average amount of debt outstanding during
the period (000s omitted)(g).............. $ 2,215 -- -- -- -- $ 25
Average number of shares outstanding during
the period (000s omitted)(g).............. 8,726 -- -- -- -- 99
Average amount of debt per share during the
period.................................... $ 0.2538 -- -- -- -- $0.2572
</TABLE>
- ---------------
(a) Total returns do not deduct contingent deferred sales charges and are not
annualized for periods of less than one year.
(b) Ratio of expenses to average net assets prior to reduction of advisory fee
and expense reimbursement for 1994 and 1993 were 1.87% and 2.18%
(annualized), respectively.
(c) Ratios are based on average net assets of $81,024,622 and $931,755,
respectively, for Class B and Class C shares.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(e) Annualized.
(f) Ratio of net investment income to average net assets prior to reduction of
advisory fee and expense reimbursement for 1994 and 1993 were 6.50% and
5.90% (annualized), respectively.
(g) Averages computed on a daily basis.
* Date sales commenced.
14
<PAGE> 19
AIM MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
-------------------------------------------------------------- ------------------
YEAR ENDED DECEMBER 31, SEPTEMBER 1, 1993* AUGUST 4, 1997*
----------------------------------------- TO TO
1997 1996 1995 1994 DECEMBER 31, 1993 DECEMBER 31, 1997
------- ------- ------- ------ ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 8.19 $ 8.31 $ 7.78 $ 8.61 $ 8.71 $ 8.30
Income from investment operations:
Net investment income.................. 0.36 0.37 0.39 0.39 0.14 0.15
Net gains (losses) on securities (both
realized and unrealized)............. 0.17 (0.13) 0.54 (0.78) 0.01 0.04
------- ------- ------- ------ ------ -------
Total from investment operations....... 0.53 0.24 0.93 (0.39) 0.15 0.19
------- ------- ------- ------ ------ -------
Less distributions:
Dividends from net investment income... (0.36) (0.36) (0.37) (0.38) (0.13) (0.14)
Distributions from net realized capital
gains................................ -- -- -- (0.03) (0.11) --
Returns of capital..................... -- -- (0.03) (0.03) (0.01) --
------- ------- ------- ------ ------ -------
Total distributions.................... (0.36) (0.36) (0.40) (0.44) (0.25) (0.14)
------- ------- ------- ------ ------ -------
Net asset value, end of period.......... $ 8.36 $ 8.19 $ 8.31 $ 7.78 $ 8.61 $ 8.35
======= ======= ======= ====== ====== =======
Total return(a)......................... 6.59% 2.99% 12.14% (4.57)% 1.95% 2.36%
======= ======= ======= ====== ====== =======
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................. $47,185 $33,770 $21,478 $9,175 $2,319 $ 825
======= ======= ======= ====== ====== =======
Ratio of expenses to average net
assets(b)............................ 1.66%(c)(d) 1.61% 1.68% 1.67% 1.65%(e) 1.67%(c)(d)(e)
======= ======= ======= ====== ====== =======
Ratio of net investment income to
average net assets(b)................ 4.38%(c) 4.49% 4.46% 4.83% 4.91%(e) 4.37%(c)(d)(e)
======= ======= ======= ====== ====== =======
Portfolio turnover rate................ 24% 26% 36% 43% 24% 24%
======= ======= ======= ====== ====== =======
</TABLE>
- ---------------
(a) Total returns do not deduct contingent deferred sales charges and are not
annualized for periods of less than one year.
(b) Ratios of expenses and net investment income to average daily net assets
prior to expense reimbursements are 1.77%, 1.84% and 3.08% (annualized) and
4.37%, 4.66% and 3.48% (annualized) for 1995-1993, respectively.
(c) Ratios are based on average net assets of $39,861,298 and $367,550,
respectively, for Class B and Class C shares.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid
indirectly, the ratio of expenses to average net assets would have been the
same. (e) Annualized.
* Date sales commenced.
AIM SELECT GROWTH FUND
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
-------------------------------------------------------------------- ------------------
YEAR ENDED DECEMBER 31, SEPTEMBER 1, 1993* AUGUST 4, 1997*
----------------------------------------------- TO TO
1997 1996 1995 1994 DECEMBER 31, 1993 DECEMBER 31, 1997
-------- -------- -------- ------- ------------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................... $ 14.32 $ 12.77 $ 10.21 $ 11.31 $ 12.83 $ 17.65
Income from investment operations:
Net investment income (loss)......... (0.13)(a) (0.05) (0.08)(a) (0.06) (0.01) (0.04)(a)
Net gains (losses) on securities
(both realized and unrealized)..... 2.72 2.28 3.43 (0.61) (0.14) (0.70)
-------- -------- -------- ------- ------- -------
Total from investment operations..... 2.59 2.23 3.35 (0.67) (0.15) (0.74)
-------- -------- -------- ------- ------- -------
Less distributions:
Distributions from net realized
capital gains...................... (1.93) (0.68) (0.79) (0.43) (1.37) (1.93)
-------- -------- -------- ------- ------- -------
Total distributions.................. (1.93) (0.68) (0.79) (0.43) (1.37) (1.93)
-------- -------- -------- ------- ------- -------
Net asset value, end of period........ $ 14.98 $ 14.32 $ 12.77 $ 10.21 $ 11.31 $ 14.98
======== ======== ======== ======= ======= =======
Total return(b)....................... 18.50% 17.60% 33.00% (5.88)% (0.92)% (3.86)%
======== ======== ======== ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s
omitted)........................... $356,186 $280,807 $138,034 $38,448 $11,053 $ 1,189
======== ======== ======== ======= ======= =======
Ratio of expenses to average net
assets............................. 1.99%(c)(d) 2.03% 2.13% 2.18% 1.91% (e) 1.95%(f)(g)
======== ======== ======== ======= ======= =======
Ratio of net investment income (loss)
to average net assets.............. (0.82)%(c) (0.39)% (0.65)% (0.94)% (0.72)%(e) 0.77%(f)
======== ======== ======== ======= ======= =======
Portfolio turnover rate.............. 110% 97% 87% 201% 192% 110%
======== ======== ======== ======= ======= =======
Average broker commission rate
paid(h)............................ $ 0.0568 $ 0.0621 N/A N/A N/A $0.0568
======== ======== ======== ======= ======= =======
</TABLE>
- ---------------
(a) Calculated using average shares outstanding.
(b) Total returns do not deduct contingent deferred sales charges and are not
annualized for periods of less than one year.
(c) Ratios are based on average net assets of $328,478,309 for Class B shares.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid
indirectly, the ratio of expenses to average net assets would have been the
same.
(e) Annualized.
(f) Ratios are annualized and based on average net assets of $625,699 for Class
C shares.
(g) Ratio includes expenses paid indirectly. Excluding expenses paid
indirectly, the ratio of expenses to average net assets would have been
1.94%.
(h) The average commission rate paid is the total brokerage commission paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold, which is required to be
disclosed for fiscal year beginning September 1, 1995 and thereafter.
* Date sales commenced.
15
<PAGE> 20
AIM VALUE FUND
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
------------------------------------------------------------------------- -----------------
YEAR ENDED DECEMBER 31, OCTOBER 18, 1993* AUGUST 4, 1997*
----------------------------------------------------- TO TO
1997 1996 1995 1994 DECEMBER 31, 1993 DECEMBER 31, 1997
---------- ---------- ---------- -------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period........................... $ 28.92 $ 26.65 $ 21.13 $ 20.82 $ 21.80 $ 35.60
Income from investment operations:
Net investment income............ (0.07) 0.20(a) (0.01) -- 0.02 (0.01)
Net gains (losses) on securities
(both realized and
unrealized).................... 6.68 3.38 7.12 0.51 (0.21) (0.05)
---------- ---------- ---------- -------- ------- -------
Total from investment
operations..................... 6.61 3.58 7.11 0.51 (0.19) (0.06)
---------- ---------- ---------- -------- ------- -------
Less distributions:
Dividends from net investment
income......................... -- (0.21) -- -- (0.02) --
Distributions from net realized
capital gains.................. (3.64) (1.10) (1.59) (0.20) (0.77) (3.64)
---------- ---------- ---------- -------- ------- -------
Total distributions.............. (3.64) (1.31) (1.59) (0.20) (0.79) (3.64)
---------- ---------- ---------- -------- ------- -------
Net asset value, end of period.... $ 31.89 $ 28.92 $ 26.65 $ 21.13 $ 20.82 $ 31.90
========== ========== ========== ======== ======= =======
Total return(b)................... 22.96% 13.57% 33.73% 2.46% (0.74)% (0.08)%
========== ========== ========== ======== ======= =======
Ratios/supplemental data:
Net assets, end of period (000s
omitted)....................... $6,831,796 $4,875,933 $2,860,531 $680,119 $63,215 $32,900
========== ========== ========== ======== ======= =======
Ratio of expenses to average net
assets(c)...................... 1.85%(d)(e) 1.94% 1.94% 1.90% 1.85%(f) 1.84%(d)(e)(f)
========== ========== ========== ======== ======= =======
Ratio of net investment income
(loss) to average net
assets(c)...................... (0.24)%(d) 0.82% (0.08)% 0.00% (0.46)%(f) (0.23)%(d)(f)
========== ========== ========== ======== ======= =======
Portfolio turnover rate.......... 137% 126% 151% 127% 177% 137%
========== ========== ========== ======== ======= =======
Average broker commission rate
paid(g)........................ $ 0.481 $ 0.0436 N/A N/A N/A $0.0481
========== ========== ========== ======== ======= =======
</TABLE>
- ---------------
(a) Calculated using average shares outstanding.
(b) Total returns do not deduct contingent deferred sales charges and are not
annualized for periods of less than one year.
(c) The ratios of expenses to average net assets prior to waiver of advisory
fees were 1.87%, 1.96% and 1.96%, for 1997-1995, respectively, for Class B
shares, and 1.86% for 1997 for Class C shares. The ratio of net investment
income (loss) to average net assets prior to waiver of advisory fees were
(0.26)%, 0.81% and (0.09%), for 1997-1995, respectively, for Class B shares
and (0.25)% for 1997 for Class C shares.
(d) Ratios are based on average net assets of $ .
(e) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same for
Class B shares, and 1.83% for Class C shares.
(f) Annualized.
(g) The average commission rate paid is the total brokerage commission paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
* Date sales commenced.
16
<PAGE> 21
The following per share data, ratios and supplemental data for the Class A
shares, Class B shares and AIM Cash Reserve Shares of AIM MONEY MARKET FUND for
the years ended December 31, 1997, 1996, 1995 and 1994 and the period October
16, 1993 (date operations commenced) through December 31, 1993, and for the
Class C shares for the period August 4, 1997 (date sales commenced) through
December 31, 1997, have been audited by KPMG Peat Marwick LLP, independent
auditors, whose unqualified report on the Fund's financial statements and
related notes appears in the Statement of Additional Information. This
information should be read in conjunction with the financial statements of AIM
MONEY MARKET FUND included in the Statement of Additional Information.
AIM MONEY MARKET FUND -- CLASS A, CLASS B, CLASS C AND AIM CASH RESERVE SHARES
<TABLE>
<CAPTION>
CLASS A SHARES
-------------------------------------------------------------
OCTOBER 16,
YEAR ENDED DECEMBER 31, 1993 TO
---------------------------------------------- DECEMBER 31,
1997 1996 1995 1994 1993
-------- -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income.................. 0.0453 0.0433 0.0495 0.0337 0.0048
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income... (0.0453) (0.0433) (0.0495) (0.0337) (0.0048)
-------- -------- -------- -------- --------
Net asset value, end of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total return(a)......................... 4.63% 4.42% 5.06% 3.43% 2.27%
======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................. $376,012 $287,905 $221,487 $148,886 $ 81,460
======== ======== ======== ======== ========
Ratio of expenses to average net
assets............................... 1.05%(b)(c) 1.07% 1.03% 0.97%(d) 1.00%(d)(e)
======== ======== ======== ======== ========
Ratio of net investment income to
average net assets................... 4.55%(b) 4.34% 4.91% 3.53%(d) 2.27%(d)(e)
======== ======== ======== ======== ========
<CAPTION>
CLASS B SHARES
--------
YEAR ENDED DECEMBER 31,
--------
1997
--------
<S> <C>
Net asset value, beginning of period.... $ 1.00
Income from investment operations:
Net investment income.................. 0.0378
--------
Less distributions:
Dividends from net investment income... (0.0378)
--------
Net asset value, end of period.......... $ 1.00
========
Total return(a)......................... 3.84%
========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................. $116,058
========
Ratio of expenses to average net
assets............................... 1.80%(b)(c)
========
Ratio of net investment income to
average net assets................... 3.80%(b)
========
<CAPTION>
CLASS C
SHARES
CLASS B SHARES
--------------------------------------------- AUGUST 4, --------
OCTOBER 16, 1997*
YEAR ENDED DECEMBER 31, 1993 to to
------------------------------ DECEMBER 31, DECEMBER 31, --------
1996 1995 1994 1993 1997 1997
-------- -------- -------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income.................. 0.0360 0.0419 0.0259 0.0032 0.0158 0.0456
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income... (0.0360) (0.0419) (0.0259) (0.0032) (0.0158) (0.0456)
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
Total return(a)......................... 3.66% 4.27% 2.62% 1.51% 3.92% 4.66%
======== ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................. $ 91,148 $ 69,857 $ 33,999 $ 1,289 $ 8,287 $344,117
======== ======== ======== ======== ======== ========
Ratio of expenses to average net
assets............................... 1.81% 1.78% 1.78%(f) 1.75%(e)(f) 1.80%(b)(c)(e) 1.05%(b)(c)
======== ======== ======== ======== ======== ========
Ratio of net investment income to
average net assets................... 3.60% 4.14% 3.14%(f) 1.54%(e)(f) 3.80%(b)(c) 4.55%(b)
======== ======== ======== ======== ======== ========
<CAPTION>
AIM CASH RESERVE SHARES
---------------------------------------------
OCTOBER 16,
YEAR ENDED DECEMBER 31, 1993 to
------------------------------ DECEMBER 31,
1996 1995 1994 1993
-------- -------- -------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income.................. 0.0433 0.0493 0.0337 0.0048
-------- -------- -------- --------
Less distributions:
Dividends from net investment income... (0.0433) (0.0493) (0.0337) (0.0048)
-------- -------- -------- --------
Net asset value, end of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
Total return(a)......................... 4.41% 5.04% 3.42% 2.27%
======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s
omitted)............................. $315,470 $293,450 $359,952 $241,778
======== ======== ======== ========
Ratio of expenses to average net
assets............................... 1.08% 1.04% 0.99%(g) 1.00%(e)(g)
======== ======== ======== ========
Ratio of net investment income to
average net assets................... 4.32% 4.92% 3.49%(g) 2.27%(e)(g)
======== ======== ======== ========
</TABLE>
- ---------------
(a) Does not deduct sales charges or contingent deferred sales charges, where
applicable, and are annualized for periods less than one year.
(b) Ratios are based on average daily net assets as follows: Class A
Shares - $340,257,685, Class B Shares - $119,512,069, Class C
Shares - $5,256,063 and AIM Cash Reserve Shares - $372,492,695.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(d) Ratios of expenses and net investment income to average daily net assets
prior to waiver of advisory fees are 1.06% and 3.44% for 1994 and 1.20%
(annualized) and 2.07% (annualized) for 1993.
(e) Annualized.
(f) Ratios of expenses and net investment income to average daily net assets
prior to waiver of advisory fees are 1.87% and 3.05% for 1994 and 1.95%
(annualized) and 1.34% (annualized) for 1993.
(g) Ratios of expenses and net investment income to average daily net assets
prior to waiver of advisory fees are 1.08% and 3.40% for 1994 and 1.20%
(annualized) and 2.07% (annualized) for 1993.
* Date sales commenced.
17
<PAGE> 22
- --------------------------------------------------------------------------------
PERFORMANCE
All advertisements of the Funds will disclose the maximum sales charge
(including deferred sales charges) imposed on purchases of a Fund's shares. If
any advertised performance data does not reflect the maximum sales charge (if
any), such advertisement will disclose that the sales charge has not been
deducted in computing the performance data, and that, if reflected, the maximum
sales charge would reduce the performance quoted. See the Statement of
Additional Information for further details concerning performance comparisons
used in advertisements by the Funds. Further information regarding each Fund's
performance is contained in that Fund's annual report to shareholders, which is
available upon request and without charge.
Each Fund's total return is calculated in accordance with a standardized
formula for computation of annualized total return. Standardized total return
for Class A shares reflects the deduction of a Fund's maximum front-end sales
charge at the time of purchase. Standardized total return for Class B and Class
C shares reflects the deduction of the maximum applicable contingent deferred
sales charge on a redemption of shares held for the period.
A Fund's total return shows its overall change in value, including changes in
share price and assuming all the Fund's dividends and capital gain distributions
are reinvested. A cumulative total return reflects the Fund's performance over a
stated period of time. An average annual total return reflects the hypothetical
compounded annual rate of return that would have produced the same cumulative
total return if the Fund's performance had been constant over the entire period.
BECAUSE AVERAGE ANNUAL RETURNS TEND TO EVEN OUT VARIATIONS IN THE FUND'S RETURN,
INVESTORS SHOULD RECOGNIZE THAT SUCH RETURNS ARE NOT THE SAME AS ACTUAL YEAR-
BY-YEAR RESULTS. To illustrate the components of overall performance, a Fund may
separate its cumulative and average annual returns into income results and
capital gains or losses.
Yield is computed in accordance with standardized formulas described in the
Statement of Additional Information and can be expected to fluctuate from time
to time and is not necessarily indicative of future results. Accordingly, yield
information may not provide a basis for comparison with investments which pay a
fixed rate of interest for a stated period of time. Yield reflects investment
income net of expenses over the relevant period attributable to a Fund share,
expressed as an annualized percentage of the maximum offering price per share
for Class A shares and net asset value per share for Class B shares and Class C
shares, and AIM Cash Reserve Shares of AIM MONEY MARKET FUND.
Yield is a function of the type and quality of a Fund's investments, the
maturity of the securities held in a Fund's portfolio and the operating expense
ratio of the Fund. A shareholder's investment in a Fund is not insured or
guaranteed. These factors should be carefully considered by the investor before
making an investment in a Fund. A tax-equivalent yield is calculated in the same
manner as the standard yield with an adjustment for a stated, assumed tax rate.
AIM MUNICIPAL BOND FUND may also demonstrate the effect of such tax-equivalent
adjustments generally by comparing various yield levels with their corresponding
tax-equivalent yields, given a stated tax rate.
From time to time and in its discretion, AIM may waive all or a portion of its
advisory fees and/or assume certain expenses of any Fund. Such practices will
have the effect of increasing that Fund's yield and total return. The
performance of each Fund will vary from time to time and past results are not
necessarily representative of future results. A Fund's performance is a function
of its portfolio management in selecting the type and quality of portfolio
securities and is affected by operating expenses of the Fund as well as by
general market conditions.
- --------------------------------------------------------------------------------
ABOUT THE FUNDS
The Funds are separate series of shares of the Trust, a Delaware business
trust established on May 5, 1993 and registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company (see "Organization of the Trust"). Each Fund has its own investment
objective(s) and policies designed to meet specific investment goals, operates
as a diversified portfolio and intends to be treated as a regulated investment
company for federal income tax purposes.
Each Fund invests in securities of different issuers and industry
classifications (with the exception of AIM GLOBAL UTILITIES FUND which
concentrates its investments in the utilities industry) in an attempt to spread
and reduce the risks inherent in all investing. Each Fund continuously offers
new shares for sale to the public, and stands ready to redeem its outstanding
shares for cash at net asset value (subject, in certain circumstances, to a
contingent deferred sales charge). See "How to Redeem Shares." AIM, the
investment advisor for each Fund, continuously reviews and, from time to time,
changes the portfolio holdings of each of the Funds in pursuit of each Fund's
objective(s).
18
<PAGE> 23
- --------------------------------------------------------------------------------
INVESTMENT PROGRAMS
The investment objective(s) of each Fund, except AIM HIGH YIELD FUND, are
deemed to be fundamental policies which may not be changed without the approval
of a majority of the Fund's outstanding shares (within the meaning of the 1940
Act). The Board of Trustees on behalf of AIM HIGH YIELD FUND is permitted to
change the investment objective of that Fund without shareholder approval;
however, shareholders will receive prior notice of any change in that Fund's
investment objective. Individuals considering the purchase of shares of any Fund
should recognize that there are risks in the ownership of any security and that
no assurance can be given that any particular Fund will attain its investment
objective(s).
AIM BALANCED FUND. The Fund's objective is to achieve as high a total return
to investors as possible, consistent with preservation of capital, by investing
in a broadly diversified portfolio of high-yielding securities, including common
stocks, preferred stocks, convertible securities and bonds. Although equity
securities will be purchased primarily for capital appreciation and fixed income
securities will be purchased primarily for income purposes, income and capital
appreciation potential will be considered in connection with all investments.
The Fund normally will have a minimum of 30% and a maximum of 70% of its total
assets invested in equity securities and a minimum of 30% and a maximum of 70%
of its total assets invested in (non-convertible) fixed income securities. Most
of such fixed income securities will be rated Baa or better by Moody's Investors
Service, Inc. ("Moody's") or BBB or better by Standard & Poor's Ratings Services
("S&P") or, if unrated, deemed to be of comparable quality by AIM, although the
Fund may invest to a limited extent in lower-rated securities. The fixed income
securities in which the Fund invests may include U.S. Government obligations,
mortgage-backed securities, asset-backed securities, bank obligations, corporate
debt obligations and unrated obligations, including those of foreign issuers.
The Fund may, in pursuit of its objective, invest up to 10% of its total assets
in debt securities rated lower than Baa by Moody's or BBB by S&P (or a
comparable rating of any other nationally recognized statistical rating
organizations "NRSROs") or unrated securities determined by AIM to be of
comparable quality. These types of non-investment grade debt securities are
commonly known as "junk bonds." During 1997, the Fund invested less than 5% of
its net assets in below investment grade debt securities. See "Certain
Investment Strategies and Policies -- Risk Factors Regarding Non-Investment
Grade Debt Securities" for more information concerning the risk factors
associated with investing in such securities.
The Fund may also invest up to 25% of its total assets in convertible
securities. Compliance with all of the above percentage requirements may limit
the ability of the Fund to maximize total return. The actual percentage of the
assets invested in equity and fixed income securities will vary from time to
time, depending on the judgment of AIM as to general market and economic
conditions and trends, yields and interest rates and changes in fiscal and
monetary policies.
AIM GLOBAL UTILITIES FUND. The Fund's objective is to achieve a high level of
current income, and as a secondary objective the Fund seeks to achieve capital
appreciation, by investing primarily in the common and preferred stocks of
public utility companies. Under normal circumstances, at least 65% of the Fund's
total assets will be invested in securities of public utility companies (either
domestic or foreign). Public utility companies include companies that provide
electricity, natural gas or water and other sanitary services to the public, and
telephone or telegraph companies, and other companies providing public
communications services. The Fund may also invest in developing utility
technology companies and in holding companies which derive a substantial portion
of their revenues from utility-related activities. Generally, a holding company
will be considered to derive a substantial portion of its revenues from
utility-related activities if such activities account for at least 40% of its
revenues. The Fund may invest up to 25% of its total assets in convertible
securities. When AIM deems it appropriate, the Fund may purchase bonds issued by
the above types of companies, although investments in non-convertible bonds will
not exceed 25% of the Fund's total assets. The Fund may invest up to 10% of its
total assets in bonds rated lower than Baa by Moody's or BBB by S&P (or
comparable ratings by other NRSROs) or unrated bonds which AIM determines to be
of comparable quality. During 1997, the Fund invested less than 5% of its net
assets in below investment grade debt securities. See "Certain Investment
Strategies and Policies -- Risk Factors Regarding Non-Investment Grade Debt
Securities" for more information concerning the risk factors associated with
investing in such securities.
The Fund may invest up to 80% of its total assets in foreign securities,
including investments in American Depositary Receipts, European Depositary
Receipts and other securities representing underlying securities of foreign
issuers. Under normal market conditions, the Fund will be invested in securities
of issuers located in at least four countries, one of which will be the United
States, although for temporary defensive purposes it may invest 100% of its
total assets in securities of United States issuers. In some foreign countries,
utility companies are partially owned by government agencies. In some cases,
foreign government agencies may have significant investments in businesses other
than utility companies. Also, investments in securities of foreign issuers may
involve other risks which are not ordinarily associated with investments in
domestic issuers (see "Certain Investment Strategies and Policies -- Investments
in Foreign Securities").
In addition, investors should also be aware that the Fund may invest in
companies located within emerging or developing countries. An "emerging or
developing country" is a country in the initial stages of its industrial cycle.
Investments in emerging or developing countries involve exposure to economic
structures that are generally less diverse and mature and to political systems
which can be
19
<PAGE> 24
'expected to have less stability than those of more developed countries. Such
countries may have relatively unstable governments, economies based on only a
few industries, and securities markets which trade only a small number of
securities. Historical experience indicates that markets of emerging or
developing countries have been more volatile than the markets of more mature
economies; such markets have also from time to time provided higher rates of
return and greater risks to investors. AIM believes that these characteristics
of emerging or developing countries can be expected to continue in the future.
A portfolio of utility company securities is subject to a different degree of
volatility than a more broadly diversified portfolio. Economic, operational or
regulatory changes that affect utility companies will have a material impact
upon the value of the securities that the Fund owns. Events that have no direct
connection with companies whose securities are owned by the Fund may affect the
prices of those securities, such as emergencies involving nuclear power plants.
Moreover, a portfolio of utilities industry securities is subject to the risks
unique to that industry, such as inflationary or other cost increases in fuel
and operating expenses, possible increases in the interest costs of loans needed
for capital construction programs, compliance with environmental regulations,
possible adverse changes in the regulatory climate and availability of fuel
sources. A description of the utilities industry is contained in the Statement
of Additional Information.
AIM HIGH YIELD FUND. The Fund's objective is to achieve a high level of
current income by investing primarily in publicly traded non-investment grade
debt securities. The Fund will also consider the possibility of capital growth
when it purchases and sells securities. Debt securities of less than investment
grade are considered "high risk" securities (commonly referred to as junk
bonds).
The Fund seeks high income principally by purchasing securities that are rated
Baa, Ba or B by Moody's or BBB, BB or B by S&P, or securities of comparable
quality in the opinion of AIM that are either unrated or rated by other NRSROs.
The Fund may also hold, from time to time, securities rated Caa by Moody's or
CCC by S&P, or, if unrated or rated by other NRSROs, securities of comparable
quality as determined by AIM. It should be noted, however, that achieving the
Fund's investment objective may be more dependent on the credit analysis of AIM,
and less on that of credit rating agencies, than may be the case for funds that
invest in more highly rated bonds. At least 80% of the value of the Fund's total
assets will be invested in debt securities, including convertible debt
securities, and/or cash and cash equivalents. At least 65% of the value of the
Fund's assets will be invested in high yield debt securities. The Fund may also
invest in preferred stocks.
For a breakdown of the quality ratings of the Fund's investments as of
December 31, 1997, see the chart on page 23.
While the securities held by the Fund are expected to provide greater income
and, possibly, opportunity for greater gain than investments in more highly
rated securities, they may be subject to greater risk of loss of income and
principal and are more speculative in nature. The Fund's yield and the net asset
value of its shares may be expected to fluctuate over time. Therefore, an
investment in the Fund may not be appropriate for some investors and should not
constitute a complete investment program for others. See "Certain Investment
Strategies and Policies -- Risk Factors Regarding Non-Investment Grade Debt
Securities."
The Fund may invest in both illiquid securities and securities which are
subject to restrictions on resale because they have not been registered under
the Securities Act of 1933. See "Certain Investment Strategies and
Policies -- Illiquid Securities" for further information regarding such
investments.
AIM INCOME FUND. The Fund's objective is to achieve a high level of current
income consistent with reasonable concern for safety of principal, by investing
primarily in fixed rate corporate debt, U.S. Government obligations and U.S.
Government Agency Mortgage-Backed Securities. The Fund may also invest in
preferred stock issues and convertible corporate debt. In selecting portfolio
securities the Fund will, in accordance with its concern for safety of
principal, consider individual credit risks, but shareholders should recognize
that the market value of even high quality long-term fixed rate securities will
fluctuate with changes in interest rate levels. The percent of the Fund's assets
in various types of securities will vary in light of the Fund's investment
objective and existing market conditions.
The Fund may invest up to 40% of its total assets in securities issued by
foreign entities. Purchases of foreign securities which are payable in foreign
currencies will be affected either favorably or unfavorably by changes in the
value of the foreign currencies against the U.S. dollar. Investing in foreign
securities payable in foreign currencies carries increased risk to the Fund (see
"Certain Investment Strategies and Policies -- Investments in Foreign
Securities" and " -- Foreign Exchange Transactions"). The Fund will maintain
less than 35% of its net assets in debt securities rated below Baa/BBB by
Moody's or S&P (or comparable ratings by other NRSROs) or unrated securities
determined by AIM to be of comparable quality. These types of non-investment
grade debt securities are commonly known as "junk bonds." See "Certain
Investment Strategies and Policies -- Risk Factors Regarding Non-Investment
Grade Debt Securities."
For a breakdown of the quality ratings of the Fund's investments as of
December 31, 1997, see the chart on page 23.
Ordinarily, the Fund does not purchase securities with the intention of
engaging in short-term trading. However, any particular security will be sold,
and the proceeds reinvested, whenever such action is deemed prudent in light of
the Fund's investment objectives, regardless of the holding period of that
security. The Fund will not necessarily dispose of a security because of a
reduction in rating. A higher rate of portfolio turnover may result in higher
transaction costs, including brokerage commissions. Also, to the extent
20
<PAGE> 25
that higher portfolio turnover results in a higher rate of net realized capital
gains to a Fund, the portion of the Fund's distributions constituting taxable
capital gains may increase. See "Dividends, Distributions and Tax Matters."
AIM INTERMEDIATE GOVERNMENT FUND. The Fund's objective is to achieve a high
level of current income consistent with reasonable concern for safety of
principal by investing, under normal circumstances, at least 65% of its total
assets in debt securities issued, guaranteed or otherwise backed by the United
States Government. The Government securities which may be purchased by the Fund
include but are not limited to (1) U.S. Treasury obligations such as Treasury
Bills (maturities of one year or less), Treasury Notes (maturities of one to ten
years) and Treasury Bonds (generally maturities of greater than ten years) and
(2) obligations issued or guaranteed by U.S. Government agencies and
instrumentalities ("Agency Securities") which are supported by any of the
following: (a) the full faith and credit of the U.S. Treasury, such as
obligations of the Government National Mortgage Association ("GNMA"), (b) the
right of the issuer to borrow an amount limited to a specific line of credit
from the U.S. Treasury, such as obligations of the Federal National Mortgage
Association ("FNMA"), the Federal Home Loan Banks and the U.S. Postal Service,
or (c) the credit of the agency or instrumentality, such as obligations of the
Federal Home Loan Mortgage Corporation ("FHLMC") and Federal Farm Credit System.
Although their close relationship with the U.S. Government is believed to make
them high-quality securities with minimal credit risks, the U.S. Government is
not obligated by law to support either FNMA or FHLMC. Accordingly, such
securities may involve risk of loss of principal and interest; however,
historically there have not been any defaults of such issues. For a listing of
some of the types of Agency Securities in which the Fund may invest, see
Appendix B to this Prospectus. The Fund may also invest in U.S. Government
Agency Mortgage-Backed Securities. Mortgage-backed securities consist of
interests in underlying mortgages with maturities of up to thirty years.
The Fund purchases primarily fixed-rate securities, including but not limited
to high coupon U.S. Government Agency Mortgage-Backed Securities, which provide
a higher coupon at the time of purchase than the then prevailing market rate
yield. The prices of high coupon U.S. Government Agency Mortgage-Backed
Securities do not tend to rise as rapidly as those of traditional fixed-rate
securities at times when interest rates are decreasing, and tend to decline more
slowly at times when interest rates are increasing. The Fund may purchase such
securities at a premium, which means that a faster principal prepayment rate
than expected will reduce the market value of and income from such securities,
while a slower prepayment rate will tend to increase the market value of and
income from such securities.
The composition and weighted average maturity of the Fund's portfolio will
vary from time to time, based upon AIM's determination of how best to achieve
the Fund's investment objective. The Fund may invest in Government securities of
all maturities, short-term, intermediate-term and long-term. The Fund will
maintain a dollar-weighted average portfolio maturity of between three and ten
years. This policy regarding portfolio maturity is a non-fundamental policy of
the Fund.
AIM MONEY MARKET FUND. The Fund's objective is to provide as high a level of
current income as is consistent with the preservation of capital and liquidity.
The Fund intends to invest in money market instruments such as bankers'
acceptances, certificates of deposit, repurchase agreements, master notes, time
deposits, taxable municipal securities and commercial paper, all of which will
be denominated in U.S. dollars (referred to collectively as "Money Market
Instruments") and U.S. Government direct obligations and U.S. Government
agencies' securities. Bankers' acceptances, certificates of deposit and time
deposits may be purchased from U.S. or foreign banks. Certain types of Money
Market Instruments are briefly described in Appendix A to this Prospectus and in
the Statement of Additional Information.
The Fund may invest in other types of Money Market Instruments not prohibited
by its investment restrictions, if approved by the trustees. The Fund will not
invest in instruments maturing more than 397 days from the date of investment,
and will maintain a dollar-weighted average portfolio maturity of 90 days or
less.
The Fund will limit investments in Money Market Instruments to those which at
the date of purchase are "First Tier" securities as defined in Rule 2a-7 under
the 1940 Act, as such Rule may be amended from time to time. Generally, "First
Tier" securities are securities that are rated in the highest rating category by
two NRSROs, or, if only rated by one NRSRO, are rated in the highest rating
category by that NRSRO, or, if unrated, are determined by AIM (under the
supervision of and pursuant to guidelines established by the Board of Trustees)
to be of comparable quality to a rated security that meets the foregoing quality
standards, or that are issued by a registered investment company that is a money
market fund or are government securities.
The Fund must also comply with the requirements of Rule 2a-7 under the 1940
Act, which govern the operations of money market funds and may be more
restrictive than the Fund's restrictions. If any of the Fund's policies and
restrictions are more restrictive than Rule 2a-7, such policies and restrictions
will be followed.
The Fund will normally hold portfolio securities to maturity but may dispose
of such securities prior to maturity if AIM believes such disposition advisable.
Investing in Money Market Instruments of short maturity and/or actively managing
its portfolio will result in a large number of transactions, but since the costs
of these transactions are small, they are not expected to have a significant
effect on net asset value or yield.
21
<PAGE> 26
AIM MUNICIPAL BOND FUND. The Fund's objective is to achieve a high level of
current income exempt from federal income taxes consistent with the preservation
of principal by investing in a diversified portfolio of municipal bonds. These
investments may include obligations issued by or on behalf of states,
territories and possessions of the United States and the District of Columbia
and their political subdivisions, agencies, authorities and instrumentalities,
the interest from which, in the opinion of bond counsel, is exempt from federal
income tax.
Municipal bonds include debt obligations of varying maturities issued to
obtain funds for various public purposes, including the construction of a wide
range of public facilities, the refunding of outstanding obligations, the
obtaining of funds for general operating expenses and the lending of such funds
to other public institutions and facilities. In addition, certain types of
industrial development bonds are issued by or on behalf of public authorities to
obtain funds to provide for the construction, equipment, repair or improvement
of privately operated facilities ("private activity bonds"). Such obligations
are considered to be municipal bonds appropriate for investment by the Fund,
provided that the interest paid thereon, in the opinion of bond counsel, is
exempt from federal income taxes. As used in this Prospectus and the Statement
of Additional Information, interest which is "tax-exempt" or "exempt from
federal income taxes" means interest on municipal bonds which is excluded from
gross income for federal income tax purposes, but which may give rise to federal
alternative minimum tax liability. The principal and interest payments on
private activity bonds (such as industrial development or pollution control
bonds) are the responsibility of the industrial user and, therefore, are not
backed by the taxing power of the issuing municipality. Such obligations are
included within the term municipal bonds if the interest paid thereon qualifies
for exemption from federal income tax, but the interest on private activity
bonds will be considered to be an item of preference for purposes of alternative
minimum tax liability under the Internal Revenue Code of 1986, as amended (the
"Code"). See "Tax Matters" in the Statement of Additional Information. The Fund
will invest at least 80% of its total invested assets in securities that do not
pay interest subject to federal income taxes and that do not constitute an item
of preference for purposes of the alternative minimum tax. Securities in which
the Fund invests may be insured by financial insurance companies. Since a
limited number of entities provide such insurance, the Fund may invest more than
25% of its total assets in securities insured by the same insurance company.
In addition, the Fund will invest at least 80% of its total invested assets in
municipal bonds. At least 80% of the Fund's total assets will be invested in
municipal securities rated within the four highest ratings of Moody's, S&P or
any other NRSRO. The Fund may invest up to 20% of its total assets in municipal
securities that are rated below Baa/BBB (or a comparable rating of any other
NRSRO) or unrated securities determined by AIM to be of comparable quality. For
purposes of the foregoing percentage limitations, municipal securities (i) which
have been collateralized with U.S. Government obligations held in escrow until
the municipal securities' scheduled redemption date or final maturity, but (ii)
which have not been rated by a NRSRO subsequent to the date of escrow
collateralization, will be treated by the Fund as the equivalent of Aaa/AAA
rated securities. During 1997, the Fund invested less than 5% of its net assets
in below investment grade debt securities. See "Certain Investment Strategies
and Policies -- Risk Factors Regarding Non-Investment Grade Debt Securities" for
more information concerning the risk factors associated with investing in such
securities.
Since the Fund invests primarily in municipal obligations, the marketability
and market value of these obligations may be affected by certain constitutional
amendments, legislative measures, executive orders, administrative regulations
and voter initiatives as well as regional economies. The ability of the Fund to
achieve its objective is affected by the ability of municipal issuers to meet
their payment obligations. Problems which may arise in the foregoing areas and
which are not resolved could adversely affect the various municipal issuers'
abilities to meet their financial obligations.
The Fund may invest in short-term obligations, including taxable investments,
to establish a defensive position in anticipation of a market decline with a
corresponding rise in interest rates. Such short-term obligations include notes
issued by or on behalf of municipal issuers, obligations of the U.S. Government,
its agencies or instrumentalities, instruments of domestic banks, domestic
commercial paper and other cash equivalent investments. Interest income from
certain short-term holdings may be taxable to shareholders as ordinary income.
AIM SELECT GROWTH FUND. The Fund's objective is to achieve long-term growth of
capital by investing primarily in the common stocks of established medium- to
large-size companies with prospects for above-average, long-term earnings
growth. Realization of current income is an incidental consideration.
It is anticipated that common stocks will be the principal form of investment
by the Fund, and that the Fund's portfolio will include securities of three
basic categories: (1) "core" companies, which AIM considers to have experienced
above-average and consistent long-term growth in earnings and to have excellent
prospects for outstanding future growth, (2) "earnings acceleration" companies,
which AIM believes are currently enjoying a dramatic increase in profits, and
(3) companies whose securities are judged by AIM to be undervalued relative to
(i) the issuing company's current or projected earnings, (ii) current market
values of the issuing company's assets, or (iii) the equity market generally.
AIM VALUE FUND. The Fund's objective is to achieve long-term growth of capital
by investing primarily in equity securities judged by the Fund's investment
advisor to be undervalued relative to the investment advisor's appraisal of the
current or projected earnings of the companies issuing the securities, or
relative to current market values of assets owned by the companies issuing the
securities or relative to the equity market generally. Income is a secondary
objective and would be satisfied principally from the income (interest
22
<PAGE> 27
and dividends) generated by the common stocks, convertible bonds and convertible
preferred stocks that make up the Fund's portfolio. The Fund should not be
purchased by those who seek income as their primary investment objective.
In addition to the securities described above, the Fund may also acquire
preferred stocks and debt instruments having prospects for growth of capital.
Although these different types of securities can be expected to generate amounts
of income to satisfy the Fund's secondary objective, they will be purchased for
their potential for growth of capital.
The primary emphasis of AIM's search for undervalued equity securities is in
four categories: (1) out-of-favor cyclical growth companies; (2) established
growth companies that are undervalued compared to historical relative valuation
parameters; (3) companies where there is early but tangible evidence of
improving prospects which are not yet reflected in the price of the company's
equity securities; and (4) companies whose equity securities are selling at
prices that do not reflect the current market value of their assets and where
there is reason to expect realization of this potential in the form of increased
equity values.
Because AIM VALUE FUND invests in equity securities judged by the Fund's
investment advisor to be undervalued relative to the investment advisor's
appraisal of the current or projected earnings of the companies issuing such
securities, investors should carefully assess the risks associated with an
investment in the Fund.
PORTFOLIO RATINGS. During 1997, the percentage of average annual assets of AIM
HIGH YIELD FUND and AIM INCOME FUND, calculated on a dollar weighted basis,
which was invested in securities within the various rating categories (based on
the higher of Standard and Poor's Corporation and Moody's Investors Service,
Inc. ratings as described in Appendix C), and in unrated securities determined
to be of comparable quality, was as follows:
<TABLE>
<CAPTION>
AIM HIGH AIM INCOME
YIELD FUND FUND
---------- ----------
<S> <C> <C>
AAA/Aaa..................................................... 5.94% 14.01%
AA/Aa....................................................... 0.01% 10.79%
A/A......................................................... 1.34% 20.73%
BBB/Baa..................................................... 0.36% 22.09%
BB/Ba....................................................... 11.13% 11.22%
B/B......................................................... 60.58% 11.70%
CCC/Caa..................................................... 12.22% 0.37%
CC/Ca....................................................... 0.21% 0%
C/C......................................................... 0% 0%
Not rated................................................... 8.21% 3.09%
------ ------
Total Average Annual Assets............................ 100% 100%
</TABLE>
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CERTAIN INVESTMENT STRATEGIES AND POLICIES
In pursuit of its objectives and policies, one or more of the Funds may employ
one or more of the following strategies in order to enhance investment results:
CASH MANAGEMENT AND TEMPORARY DEFENSIVE INVESTMENTS. A portion of each Fund's
assets may be held from time to time in cash, repurchase agreements, commercial
paper, taxable municipal securities or other Money Market Instruments when such
positions are deemed advisable in light of economic conditions or for daily cash
management purposes. In addition, each of the Funds may invest for temporary
defensive purposes all or a substantial portion of its assets in the foregoing
types of investments, although AIM MONEY MARKET FUND invests exclusively in
Money Market Instruments. None of the Funds (except AIM MONEY MARKET FUND) is
limited to investing in Money Market Instruments which are "First Tier"
securities as defined in Rule 2a-7 under the 1940 Act. To the extent that a Fund
(other than AIM MONEY MARKET FUND) invests in the foregoing types of
investments, its ability to achieve its investment objective may be adversely
affected.
SECURITIES ISSUED ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS. (All Funds).
Each Fund may purchase securities on a "when-issued" basis, that is, delivery of
and payment for the securities is not fixed at the date of purchase, but is set
after the securities are issued (normally within forty-five days after the date
of the transaction). Each Fund also may purchase or sell securities on a delayed
delivery basis. The payment obligation and the interest rate that will be
received on the delayed delivery securities are fixed at the time the buyer
enters into the commitment. A Fund will only make commitments to purchase
when-issued or delayed delivery securities with the intention of actually
acquiring such securities, but the Fund may sell these securities before the
settlement date if it is deemed advisable.
Investment in securities on a when-issued or delayed delivery basis may
increase a Fund's exposure to market fluctuation and may increase the
possibility that the Fund will incur short-term gains subject to federal
taxation or short-term losses if the Fund must en-
23
<PAGE> 28
gage in portfolio transactions in order to honor a when-issued or delayed
delivery commitment. In a delayed delivery transaction, the Fund relies on the
other party to complete the transaction. If the transaction is not completed,
the Fund may miss a price or yield considered to be advantageous. A Fund will
employ techniques designed to reduce such risks. If a Fund purchases a
when-issued security, the Fund's custodian bank will segregate liquid assets in
an amount equal to the when-issued commitment. If the market value of such
securities declines, additional liquid assets will be segregated on a daily
basis so that the market value of the segregated assets will equal the amount of
the Fund's when-issued commitments. To the extent liquid assets are segregated,
they will not be available for new investments or to meet redemptions.
Securities purchased on a delayed delivery basis may require a similar
segregation of liquid assets. For a more complete description of when-issued
securities and delayed delivery transactions see the Statement of Additional
Information.
DOLLAR ROLL TRANSACTIONS. (AIM INCOME FUND and AIM INTERMEDIATE GOVERNMENT
FUND only.) In order to enhance portfolio returns and manage prepayment risks,
AIM INCOME FUND and AIM INTERMEDIATE GOVERNMENT FUND may engage in dollar roll
transactions with respect to mortgage securities issued by GNMA, FNMA and FHLMC.
In a dollar roll transaction, a Fund sells a mortgage security held in the
portfolio to a financial institution such as a bank or broker-dealer, and
simultaneously agrees to repurchase a substantially similar security (same type,
coupon and maturity) from the institution at a later date at an agreed upon
price. The mortgage securities that are repurchased will bear the same interest
rate as those sold, but generally will be collateralized by different pools of
mortgages with different prepayment histories. During the period between the
sale and repurchase, a Fund will not be entitled to receive interest and
principal payments on the securities sold. Proceeds of the sale will be invested
in short-term instruments, and the income from these investments, together with
any additional fee income received on the sale, could generate income for a Fund
exceeding the yield on the sold security.
Dollar roll transactions involve the risk that the market value of the
securities retained by a Fund may decline below the price of the securities that
the Fund has sold but is obligated to repurchase under the agreement. In the
event the buyer of securities in a dollar roll transaction files for bankruptcy
or becomes insolvent, the Fund's use of the proceeds from the sale of the
securities may be restricted pending a determination by the other party, or its
trustee or receiver, whether to enforce the Fund's obligation to repurchase the
securities. A Fund will not purchase additional securities when any borrowings
from banks exceed 5% of the Fund's total assets. For further information
regarding reverse repurchase agreements see the Statement of Additional
Information.
BORROWING. Each of the Funds may borrow money to a limited extent from banks
(including the Funds' custodian bank) for temporary or emergency purposes
subject to the limitations under the 1940 Act. The Funds will restrict
borrowings, reverse repurchase agreements and dollar roll transactions to an
aggregate of 33- 1/3% of each Fund's respective total assets at the time of the
transaction. None of the Funds will purchase additional securities when
borrowings exceed 5% of its respective total assets.
INVESTMENT IN OTHER INVESTMENT COMPANIES. Each of the Funds is permitted to
invest in other investment companies to the extent permitted by the 1940 Act,
and rules and regulations thereunder, and, if applicable, exemptive orders
granted by the SEC.
STOCK INDEX FUTURES CONTRACTS AND RELATED OPTIONS. (AIM BALANCED FUND, AIM
GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND and AIM VALUE FUND ("Equity
Funds")). INTEREST RATE FUTURES CONTRACTS AND RELATED OPTIONS. (AIM BALANCED
FUND, AIM GLOBAL UTILITIES FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND and AIM MUNICIPAL BOND FUND ("Debt Funds")). Each
of the Equity Funds may purchase and sell stock index futures contracts or
purchase and sell options thereon in order to hedge the value of their
respective portfolios against changes in market conditions. Similarly, each of
the Debt Funds may purchase and sell interest rate futures contracts or purchase
and sell options thereon in order to hedge the value of their respective
portfolios against changes in market conditions. A stock index futures contract
is an agreement pursuant to which two parties agree to take or make delivery of
an amount of cash equal to a specified dollar or other currency amount times the
difference between the stock index value at the close of the last trading day of
the contract and the price at which the futures contract is originally struck.
No physical delivery of the underlying stocks in the index is made. An interest
rate futures contract is an agreement between two parties to buy and sell a debt
security for a set price on a future date. Generally, a Fund may elect to close
a position in a futures contract by taking an opposite position which will
operate to terminate the Fund's position in the futures contract.
There are risks associated with investments in stock index futures contracts,
interest rate futures contracts, and options on such contracts. During certain
market conditions, purchases and sales of futures contracts may not completely
offset a decline or rise in the value of a Fund's portfolio. In the futures
markets, it may not always be possible to execute a buy or sell order at the
desired price, or to close out an open position due to market conditions, limits
on open positions and/or daily price fluctuations. Changes in the market value
of a Fund's portfolio may differ substantially from the changes anticipated by
the Fund when hedged positions were established and unanticipated price
movements in a futures contract may result in a loss substantially greater than
a Fund's initial investment in such contract. Successful use of futures
contracts and related options is dependent upon AIM's ability to predict
correctly movements in the direction of the applicable markets. No assurance can
be given that AIM's judgment in this respect will be correct.
No Fund may purchase or sell futures contracts or purchase or sell related
options if, immediately thereafter, the sum of the amount of margin deposits and
premiums on open positions with respect to futures contracts and related options
would exceed 5% of the mar-
24
<PAGE> 29
ket value of a Fund's total assets. See the Statement of Additional Information
for a description of a Fund's investments in futures contracts and options on
futures contracts, including certain additional risks.
ILLIQUID SECURITIES. Each Fund may invest up to 15% of its net assets (10% of
the net assets of AIM MONEY MARKET FUND) in securities that are illiquid.
Illiquid securities include securities that have no readily available market
quotations and cannot be disposed of promptly (within seven days) in the normal
course of business at a price at which they are valued. Illiquid securities may
include securities that are subject to restrictions on resale because they have
not been registered under the Securities Act of 1933. Restricted securities may,
in certain circumstances, be resold pursuant to Rule 144A, and thus may or may
not constitute illiquid securities. Limitations on the resale of restricted
securities may have an adverse effect on their marketability, which may prevent
the Fund from disposing of them promptly at reasonable prices. The Fund may have
to bear the expense of registering such securities for resale, and the risk of
substantial delays in effecting such registrations. The Trust's Board of
Trustees is responsible for developing and establishing guidelines and
procedures for determining the liquidity of Rule 144A restricted securities on
behalf of the Funds and monitoring AIM's implementation of the guidelines and
procedures.
RISK FACTORS REGARDING NON-INVESTMENT GRADE DEBT SECURITIES. AIM HIGH YIELD
FUND, and to a lesser extent AIM BALANCED FUND, AIM GLOBAL UTILITIES FUND, AIM
INCOME FUND and AIM MUNICIPAL BOND FUND, seek to meet their respective
investment objectives by investing in non-investment grade debt securities,
commonly known as "junk bonds." While generally providing greater income and
opportunity for gain, non-investment grade debt securities may be subject to
greater risks than higher-rated securities. Economic downturns tend to disrupt
the market for junk bonds and adversely affect their values. Such economic
downturns may be expected to result in increased price volatility for junk bonds
and of the value of shares of the above-named Funds, and increased issuer
defaults on junk bonds.
In addition, many issuers of junk bonds are substantially leveraged, which may
impair their ability to meet their obligations. In some cases, junk bonds are
subordinated to the prior payment of senior indebtedness, which potentially
limits a Fund's ability to fully recover principal or to receive payments when
senior securities are subject to a default.
The credit rating of a junk bond does not necessarily address its market value
risk, and ratings may from time to time change to reflect developments regarding
the issuer's financial condition. Junk bonds have speculative characteristics
which are likely to increase in number and significance with each successive
lower rating category.
When the secondary market for junk bonds becomes more illiquid, or in the
absence of readily available market quotations for such securities, the relative
lack of reliable objective data makes it more difficult for the trustees to
value a Fund's securities, and judgment plays a more important role in
determining such valuations. Increased illiquidity in the junk bond market also
may affect a Fund's ability to dispose of such securities at desirable prices.
In the event a Fund experiences an unexpected level of net redemptions, the
Fund could be forced to sell its junk bonds without regard to their investment
merits, thereby decreasing the asset base upon which the Fund's expenses can be
spread and possibly reducing the Fund's rate of return. Prices of junk bonds
have been found to be less sensitive to fluctuations in interest rates, and more
sensitive to adverse economic changes and individual corporate developments than
those of higher-rated debt securities.
INVESTMENTS IN FOREIGN SECURITIES. (All Funds except AIM INTERMEDIATE
GOVERNMENT FUND and AIM MUNICIPAL BOND FUND). Each Fund may invest up to 25% of
its total assets (up to 20% for AIM BALANCED FUND, 40% for AIM INCOME FUND, 50%
for AIM MONEY MARKET FUND and 80% for AIM GLOBAL UTILITIES FUND) in foreign
securities, although AIM MONEY MARKET FUND may only invest in foreign securities
denominated in U.S. dollars. To the extent it invests in securities denominated
in foreign currencies, each Fund bears the risks of changes in the exchange
rates between U.S. currency and the foreign currency, as well as the
availability and status of foreign securities markets. Each Fund (other than AIM
MONEY MARKET FUND) may invest in securities of foreign issuers which are in the
form of American Depositary Receipts ("ADRs"), European Depositary Receipts
("EDRs"), or other securities representing underlying securities of foreign
issuers, and such investments are treated as foreign securities for purposes of
percentage limitations on investments in foreign securities. For a discussion of
the risks pertaining to investments in foreign securities. See "Risk Factors
Regarding Foreign Securities" below.
FOREIGN EXCHANGE TRANSACTIONS. (All Funds except AIM INTERMEDIATE GOVERNMENT
FUND, AIM MONEY MARKET FUND and AIM MUNICIPAL BOND FUND). Each Fund has
authority to deal in foreign exchange between currencies of the different
countries in which it will invest as a hedge against possible variations in the
foreign exchange rates between those countries. This may be accomplished through
direct purchases or sales of foreign currency, purchases of options on futures
contracts with respect to foreign currency, and contractual agreements to
purchase or sell a specified currency at a specified future date (up to one
year) at a price set at the time of the contract. Such contractual commitments
may be forward contracts entered into directly with another party or exchange
traded futures contracts.
The Funds may purchase and sell options on futures contracts, forward
contracts or futures contracts which are denominated in a particular foreign
currency to hedge the risk of fluctuations in the value of another currency.
Each Fund's dealings in foreign exchange will be limited to hedging involving
either specific transactions or portfolio positions. Transaction hedging is the
purchase or sale of
25
<PAGE> 30
foreign currency with respect to specific receivables or payables of the Fund
accruing in connection with the purchase or sale of its portfolio securities,
the sale and redemption of shares of the Fund, or the payment of dividends and
distributions by the Fund. Position hedging is the purchase or sale of foreign
currency with respect to portfolio security positions denominated or quoted in a
foreign currency. The Funds will not speculate in foreign exchange. No Fund will
commit a larger percentage of its total assets to foreign exchange hedges than
the percentage of its total assets which it could invest in foreign securities.
Further information concerning futures contracts and related options is set
forth above.
RISK FACTORS REGARDING FOREIGN SECURITIES. Investments by a Fund in foreign
securities, whether denominated in U.S. dollars or foreign currencies, may
entail all of the risks set forth below. Investments by a Fund in ADRs, EDRs or
similar securities also may entail some or all of the risks described below.
Currency Risk. The value of the Funds' foreign investments will be affected by
changes in currency exchange rates. The U.S. dollar value of a foreign security
decreases when the value of the U.S. dollar rises against the foreign currency
in which the security is denominated, and increases when the value of the U.S.
dollar falls against such currency.
Political and Economic Risk. The economies of many of the countries in which
the Funds may invest may not be as developed as the United States' economy and
may be subject to significantly different forces. Political or social
instability, expropriation or confiscatory taxation, and limitations on the
removal of funds or other assets could also adversely affect the value of the
Funds' investments.
Regulatory Risk. Foreign companies are not registered with the Securities and
Exchange Commission and are generally not subject to the regulatory controls
imposed on United States issuers and, as a consequence, there is generally less
publicly available information about foreign securities than is available about
domestic securities. Foreign companies are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to domestic companies. Income from foreign
securities owned by the Funds may be reduced by a withholding tax at the source,
which tax would reduce dividend income payable to the Fund's shareholders.
Market Risk. The securities markets in many of the countries in which the
Funds invest will have substantially less trading volume than the major United
States markets. As a result, the securities of some foreign companies may be
less liquid and experience more price volatility than comparable domestic
securities. Increased custodian costs as well as administrative costs (such as
the need to use foreign custodians) may be associated with the maintenance of
assets in foreign jurisdictions. There is generally less government regulation
and supervision of foreign stock exchanges, brokers and issuers which may make
it difficult to enforce contractual obligations. In addition, transaction costs
in foreign securities markets are likely to be higher, since brokerage
commission rates in foreign countries are likely to be higher than in the United
States.
PORTFOLIO TURNOVER. (All Funds except AIM MONEY MARKET FUND). Any particular
security will be sold, and the proceeds reinvested, whenever such action is
deemed prudent from the viewpoint of a Fund's investment objectives, regardless
of the holding period of that security. Each Fund's historical portfolio
turnover rates are included in the Financial Highlights tables herein. A higher
rate of portfolio turnover may result in higher transaction costs, including
brokerage commissions. Also, to the extent that higher portfolio turnover
results in a higher rate of net realized capital gains to a Fund, the portion of
the Fund's distributions constituting taxable capital gains may increase. See
"Dividends, Distributions and Tax Matters."
- --------------------------------------------------------------------------------
MANAGEMENT
The overall management of the business and affairs of the Funds is vested in
the Trust's Board of Trustees. The Board of Trustees approves all significant
agreements between the Trust, on behalf of one or more of the Funds, and persons
or companies furnishing services to the Funds, including the investment advisory
agreement and administrative services agreement with AIM, the agreements with
AIM Distributors regarding distribution of each Fund's shares, the agreements
with State Street Bank and Trust Company and The Bank of New York as the
custodians and the transfer agency agreement with A I M Fund Services, Inc., a
wholly owned subsidiary of AIM. The day-to-day operations of each Fund are
delegated to the officers of the Trust and to AIM, subject always to the
objective and policies of the applicable Fund and to the general supervision of
the Board of Trustees. Certain trustees and officers of the Trust are affiliated
with AIM and A I M Management Group Inc. ("AIM Management"), the parent
corporation of AIM. AIM Management is a holding company engaged in the financial
services business and is an indirect wholly owned subsidiary of AMVESCAP PLC.
AMVESCAP PLC and its subsidiaries are an independent investment management group
engaged in institutional investment management and retail mutual fund businesses
in the United States, Europe and the Pacific Region. Information concerning the
Board of Trustees may be found in the Statement of Additional Information.
For a discussion of AIM Management and its subsidiaries' Year 2000 Compliance
Project, see "Organization of the Trust -- Year 2000 Compliance Project."
26
<PAGE> 31
INVESTMENT ADVISOR. A I M Advisors, Inc., 11 Greenway Plaza, Suite 100,
Houston, Texas 77046, serves as the investment advisor to each Fund pursuant to
a Master Investment Advisory Agreement, dated as of February 28, 1997 (the
"Advisory Agreement"). AIM was organized in 1976 and, together with its
subsidiaries, manages or advises over 50 investment company portfolios
encompassing a broad range of investment objectives.
Under the terms of the Advisory Agreement, AIM supervises all aspects of each
Fund's operations and provides investment advisory services to the Funds. AIM
obtains and evaluates economic, statistical and financial information to
formulate and implement investment programs for the Funds. The Advisory
Agreement also provides that, upon the request of the Board of Trustees, AIM may
perform or arrange for certain accounting and other administrative services for
the Funds which are not required to be performed by AIM under the Advisory
Agreement. The Board of Trustees has made such a request. As a result, AIM and
the Trust have entered into a Master Administrative Services Agreement
("Administrative Services Agreement"), dated as of February 28, 1997, pursuant
to which AIM is entitled to receive from each Fund reimbursement of its costs or
such reasonable compensation as may be approved by the Board of Trustees.
Currently, AIM is reimbursed for the services of the Funds' principal financial
officer and his staff, and any expenses related to fund accounting services. In
addition, pursuant to the terms of a Transfer Agency and Service Agreement,
A I M Fund Services, Inc. ("AFS"), a wholly owned subsidiary of AIM and
registered transfer agent, receives a fee for its provision of transfer agency,
dividend distribution and disbursement and shareholder services to the Funds.
AFS' principal address is P.O. Box 4739, Houston, Texas 77210-4739.
For a discussion of AIM's brokerage allocation policies and practices, see
"Portfolio Transactions and Brokerage" in the Statement of Additional
Information. In accordance with policies established by the Board of Trustees,
AIM may take into account sales of shares of the Funds and other funds advised
by AIM in selecting broker-dealers to effect portfolio transactions on behalf of
the Funds.
PORTFOLIO MANAGEMENT. AIM uses a team approach and disciplined investment
strategy in providing investment advisory services to all its accounts,
including the Funds. AIM's investment staff consists of approximately 135
individuals. While individual members of AIM's investment staff are assigned
primary responsibility for the day-to-day management of each of AIM's accounts,
all accounts are reviewed on a regular basis by AIM's Investment Policy
Committee to ensure that they are being invested in accordance with the
accounts' and AIM's investment policies. The individuals on the investment team
who are primarily responsible for the day-to-day management of each of the Funds
(other than AIM MONEY MARKET FUND) and their titles, if any, with AIM or its
subsidiaries and the Trust, the length of time they have been responsible for
the management of the Funds, their years of investment experience and prior
experience (if they have been with AIM for less than five years) are described
below:
AIM Balanced Fund. Claude C. Cody IV is Vice President of A I M Capital
Management, Inc. ("AIM Capital"), a wholly owned subsidiary of AIM; and has been
responsible for the Fund since its investment objective and policies were
changed to that of a balanced fund in 1993. He has been associated with AIM
and/or its subsidiaries since 1992 and has been an investment professional since
1976. Robert G. Alley is Senior Vice President of AIM Capital; Vice President of
AIM and of the Trust; and has been responsible for the Fund since 1993. He has
been associated with AIM and/or its subsidiaries since 1992 and has been an
investment professional since 1972. Craig A. Smith is Vice President of AIM
Capital and has been responsible for the Fund since 1996. He has been associated
with AIM since he began working as an investment professional in 1989. Carolyn
L. Gibbs is Vice President of AIM Capital and has been responsible for the Fund
since 1998. She has been associated with AIM since 1992 and has been an
investment professional since 1983.
AIM Global Utilities Fund. Claude C. Cody IV and Robert G. Alley have been
responsible for the management of the Fund since 1992. Craig A. Smith has been
responsible for the management of the Fund since 1996. Background information
for Mr. Cody, Mr. Alley and Mr. Smith is discussed above with respect to the
management of AIM BALANCED FUND.
AIM High Yield Fund. John L. Pessarra is Vice President of AIM Capital and has
been responsible for the Fund since 1992. He has been associated with AIM since
1990 and has been an investment professional since 1984. Kevin E. Rogers is Vice
President of AIM Capital and has been responsible for the Fund since 1995. He
has been associated with AIM and/or its subsidiaries since 1991 and has been an
investment professional since 1986.
AIM Income Fund. Robert G. Alley and John L. Pessarra have been responsible
for the management of the Fund since 1992, and Carolyn L. Gibbs has been
responsible for the Fund since 1995. Mr. Alley's background is discussed above
with respect to the management of AIM BALANCED FUND, Mr. Pessarra's background
is discussed above with respect to the management of AIM HIGH YIELD FUND, and
Ms. Gibbs' background is discussed above with respect to the management of AIM
BALANCED FUND.
AIM Intermediate Government Fund. Karen Dunn Kelley is Senior Vice President
of AIM Capital, Vice President of AIM and of the Trust and has been responsible
for the Fund since 1992. She has been associated with AIM and/or its
subsidiaries since 1989 and has been an investment professional since 1982.
Meggan Walsh is Vice President of AIM Capital and has been responsible for the
Fund since 1992. She has been associated with AIM and/or its subsidiaries since
1991 and has been an investment professional since 1987. Paula A. Permenter has
been responsible for the Fund since 1996. She has been associated with AIM
and/or its subsidiaries since 1996 and has been an investment professional since
1986. Prior to joining AIM, she was an Associate Trader and Investment Assistant
with Van Kampen American Capital Asset Management, Inc.
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<PAGE> 32
AIM Municipal Bond Fund. Richard A. Berry is Vice President of AIM Capital and
has been responsible for the Fund since 1992. He has been associated with AIM
and/or its subsidiaries since 1987 and has been an investment professional since
1968. Stephen D. Turman is Vice President of AIM Capital and has been
responsible for the Fund since 1992. He has been associated with AIM and/or its
subsidiaries since 1985 and has been an investment professional since 1983.
AIM Select Growth Fund. The Fund is managed by a select committee comprised of
various equity research analysts employed by AIM and AIM Capital, who provide
knowledge regarding a variety of equity market capitalization sectors and
investment styles. The Committee for the Fund meets periodically to discuss
investment opportunities and ideas; however, purchases and sales of securities
by the Fund will have the prior approval of one of the following persons:
Jonathan C. Schoolar, Robert M. Kippes or Joel E. Dobberpuhl. Jonathan C.
Schoolar is Senior Vice President of AIM Capital, Vice President of AIM and the
Trust, and has been responsible for the Fund since 1994. He has been associated
with AIM and/or its subsidiaries since 1986 and has been an investment
professional since 1983. Robert M. Kippes is Vice President of AIM Capital and
has been responsible for the Fund since 1994. He has been associated with AIM
and/or its subsidiaries since he began working as an investment professional in
1989. Joel E. Dobberpuhl is Vice President of AIM Capital and has been
responsible for the Fund since 1998. He has been associated with AIM and/or its
subsidiaries since 1990 and has been an investment professional since 1989.
AIM Value Fund. Joel E. Dobberpuhl has been responsible for the Fund since
1992. Mr. Dobberpuhl's background is discussed above with respect to the
management of AIM SELECT GROWTH FUND. Robert A. Shelton is an Investment Officer
of AIM Capital and has been responsible for the Fund since 1997. Mr. Shelton has
been associated with AIM and/or its subsidiaries since 1995 and has been an
investment professional since 1991. Prior to 1995, he was a financial analyst
for CS First Boston.
FEES AND EXPENSES. For the fiscal year ended December 31, 1997, each Fund
(other than AIM MONEY MARKET FUND) paid the following compensation to AIM for
its advisory services, and the total expenses of each such Fund's class were,
stated as a percentage of that class' average daily net assets, as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
COMPENSATION EXPENSE EXPENSE EXPENSE
TO AIM RATIO RATIO RATIO
------------ ------- ------- -------
<S> <C> <C> <C> <C>
AIM BALANCED FUND...................... 0.54% 0.98% 1.79% 1.78%
AIM GLOBAL UTILITIES FUND.............. 0.58% 1.13% 1.91% 1.90%
AIM HIGH YIELD FUND.................... 0.48% 0.90% 1.65% 1.68%
AIM INCOME FUND........................ 0.45% 0.94% 1.69% 1.69%
AIM INTERMEDIATE GOVERNMENT FUND....... 0.48% 1.00% 1.76% 1.76%
AIM MUNICIPAL BOND FUND................ 0.46% 0.90% 1.66% 1.67%
AIM SELECT GROWTH FUND................. 0.67% 1.13% 1.99% 1.95%
AIM VALUE FUND......................... 0.61%** 1.04% 1.85% 1.84%
</TABLE>
- ---------------
* Annualized.
** Net of advisory fee waivers. Without such waivers, the amount would have been
0.63%
For the year ended December 31, 1997, AIM MONEY MARKET FUND paid 0.55% of its
average daily net assets to AIM as compensation for its advisory services, and
the Class A shares', Class B shares', Class C shares' and AIM Cash Reserve
Shares' total expenses for such period were 1.05%, 1.80%, 1.80% and 1.05% of
each Class' average daily net assets, respectively.
For the fiscal year ended December 31, 1997, each Fund reimbursed AIM for
administrative services in the following amounts, stated as a percentage of the
Funds' average daily net assets:
<TABLE>
<CAPTION>
REIMBURSEMENT
PAYMENTS
-------------
<S> <C>
AIM BALANCED FUND........................................... .01%
AIM GLOBAL UTILITIES FUND................................... .03%
AIM HIGH YIELD FUND......................................... .004%
AIM INCOME FUND............................................. .02%
AIM INTERMEDIATE GOVERNMENT FUND............................ .03%
AIM MONEY MARKET FUND....................................... .01%
AIM MUNICIPAL BOND FUND..................................... .02%
AIM SELECT GROWTH FUND...................................... .01%
AIM VALUE FUND.............................................. .002%
</TABLE>
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<PAGE> 33
FEE WAIVERS. In order to increase the return to investors, AIM may from time
to time voluntarily waive or reduce its fee, while retaining its ability to be
reimbursed for such fee prior to the end of each fiscal year. AIM is currently
voluntarily waiving a portion of its advisory fees payable by AIM VALUE FUND as
follows: 0.80% of the first $150 million of the Fund's average daily net assets,
plus 0.625% of the Fund's average daily net assets in excess of $150 million to
and including $2 billion, plus 0.60% of the Fund's average daily net assets in
excess of $2 billion. Fee waivers or reductions, other than those set forth in
the Advisory Agreement, may be rescinded at any time and without notice to
investors. During the year ended December 31, 1997, AIM VALUE FUND waived 0.02%
in advisory fees.
DISTRIBUTOR. The Trust has entered into master distribution agreements
relating to the Funds (the "Distribution Agreements"), dated February 28, 1997,
with A I M Distributors, Inc. ("AIM Distributors"), a registered broker-dealer
and a wholly owned subsidiary of AIM, pursuant to which AIM Distributors acts as
the distributor of Class A, Class B and Class C shares of the Funds and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND. The address of AIM Distributors is P.O.
Box 4739, Houston, Texas 77210-4739. Certain trustees and officers of the Trust
are affiliated with AIM Distributors.
The Distribution Agreements provide AIM Distributors with the exclusive right
to distribute shares of the Funds directly and through institutions with whom
AIM Distributors has entered into selected dealer agreements. Under the
Distribution Agreement for the Class B shares, AIM Distributors sells Class B
shares at net asset value subject to a contingent deferred sales charge
established by AIM Distributors. AIM Distributors is authorized to advance to
institutions through whom Class B shares are sold a sales commission under
schedules established by AIM Distributors. The Distribution Agreement for the
Class B shares provides that AIM Distributors (or its assignee or transferee)
will receive 0.75% (of the total 1.00% payable under the distribution plan
applicable to Class B shares) of each Fund's average daily net assets
attributable to Class B shares attributable to the sales efforts of AIM
Distributors. In the event the Class B shares Distribution Agreement is
terminated, AIM Distributors would continue to receive payments of asset-based
sales charges in respect of the outstanding Class B shares attributable to the
distribution efforts of AIM Distributors; provided, however, that a complete
termination of the Class B shares master distribution plan (as defined in the
plan) would terminate all payments to AIM Distributors. Termination of the Class
B shares distribution plan or Distribution Agreement does not affect the
obligation of Class B shareholders to pay contingent deferred sales charges.
DISTRIBUTION PLANS. Class A and C Plan. The Trust has adopted a Master
Distribution Plan applicable to Class A and Class C shares of the Funds and the
AIM Cash Reserve Shares of AIM MONEY MARKET 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 Funds or the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND.
Under the Class A and C Plan, the Trust may compensate AIM Distributors an
aggregate amount of 0.25% of the average daily net assets of Class A shares of
each Fund, and the AIM Cash Reserve Shares of AIM MONEY MARKET FUND, on an
annualized basis and an aggregate amount of 1.00% of the average daily net
assets of Class C shares of each Fund on an annualized basis.
The Class A and C Plan is designed to compensate AIM Distributors, on a
quarterly basis, for certain promotional and other sales-related costs, and to
implement a dealer incentive program which provides for periodic payments to
selected dealers who furnish continuing personal shareholder services to their
customers who purchase and own Class A or Class C shares of a Fund or AIM Cash
Reserve Shares of AIM MONEY MARKET FUND. Payments can also be directed by AIM
Distributors to selected institutions who have entered into service agreements
with respect to Class A and Class C shares of the Funds, and the AIM Cash
Reserve Shares of AIM MONEY MARKET FUND, and who provide continuing personal
shareholder services to their customers who own Class A or Class C shares of a
Fund or AIM Cash Reserve Shares of AIM MONEY MARKET FUND. The service fees
payable to selected 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 which were purchased on or after a prescribed
date set forth in the Plan.
Of the aggregate amount payable under the Class A and C Plan, payments to
dealers and other 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 daily net assets of such Fund
attributable to the customers of such dealers or financial institutions are
characterized as a service fee, and payments to dealers and other financial
institutions in excess of such amount and payments to AIM Distributors would be
characterized as an asset-based sales charge pursuant to the Class A and C Plan.
The Class A and C Plan also imposes a cap on the total amount of sales charges,
including asset-based sales charges, that may be paid by the Trust with respect
to a Fund. The Class A and C Plan does not obligate the Funds to reimburse AIM
Distributors for the actual expenses AIM Distributors may incur in fulfilling
its obligations under the Class A and C Plan on behalf of the Funds. Thus, under
the Class A and C Plan, even if AIM Distributors' actual expenses exceed the fee
payable to AIM Distributors thereunder at any given time, the Funds 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.
Class B Plan. The Trust has also adopted a Master Distribution Plan applicable
to Class B shares of the Funds (the "Class B Plan"). Under the Class B Plan,
each Fund pays distribution expenses at an annual rate of 1.00% of the average
daily net assets attributable to such Fund's Class B shares. Of such amount, the
Fund pays a service fee of 0.25% of the average daily net assets attributable to
such Fund's Class B shares to selected dealers and financial institutions who
furnish continuing personal shareholder services to
29
<PAGE> 34
their customers who purchase and own Class B shares of the Fund. Any amounts not
paid as a service fee would constitute an asset-based sales charge. Amounts paid
in accordance with the Class B Plan with respect to any Fund may be used to
finance any activity primarily intended to result in the sale of Class B shares
of such Fund.
Both Plans. Activities that may be financed under the Class A and C Plan and
the Class B Plan (collectively, the "Plans") include, but are not limited to:
printing of prospectuses and statements of additional information and reports
for other than existing shareholders, overhead, preparation and distribution of
advertising material and sales literature, supplemental payments to dealers and
other institutions such as asset-based sales charges or as payments of service
fees under shareholder service arrangements, and the cost of administering the
Plans. These amounts payable by a Fund under the Plans need not be directly
related to the expenses actually incurred by AIM Distributors on behalf of each
Fund. Thus, even if AIM Distributors' actual expenses exceed the fee payable to
AIM Distributors thereunder at any given time, the Trust will not be obligated
to pay more than that fee, and if AIM Distributors' expenses are less than the
fee it receives, AIM Distributors will retain the full amount of the fee.
Payments pursuant to the Plans are subject to any applicable limitations imposed
by the rules of the National Association of Securities Dealers, Inc.
Each of the Plans may be terminated at any time by a vote of the majority of
those trustees who are not "interested persons" of the Trust or by a vote of the
holders of the majority of the outstanding shares of the applicable class.
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 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 Funds on an agency basis, may
receive payments from the Funds pursuant to the respective Plans. AIM
Distributors does not act as principal, but rather as agent for the Funds, in
making such payments.
For additional information concerning the operation of the Plans see the
Statement of Additional Information.
- --------------------------------------------------------------------------------
ORGANIZATION OF THE TRUST
The Trust is organized as a Delaware business trust pursuant to an Agreement
and Declaration of Trust dated May 5, 1993, as amended (the "Trust Agreement").
The Trust is an open-end series management investment company, and may consist
of one or more series portfolios as authorized from time to time by the Board of
Trustees. The Trust currently consists of nine separate series, and each of the
Funds represents one series.
Class A shares, Class B shares, Class C shares and, in the case of AIM MONEY
MARKET FUND, AIM Cash Reserve Shares, of the same Fund represent interests in
that Fund's assets and have identical voting, dividend, liquidation and other
rights on the same terms and conditions, except that each class of shares bears
differing class-specific expenses, is subject to differing sales loads,
conversion features and exchange privileges, and has exclusive voting rights on
matters pertaining to that class' distribution plan (although shareholders of
Class A and Class C shares and AIM Cash Reserve Shares (of AIM MONEY MARKET
FUND) and Class B shareholders of a given portfolio must approve any material
increase in fees payable with respect to such portfolio under the Class A and C
Plan).
The Trust is not required to hold annual or regular meetings of shareholders.
Meetings of shareholders of a Fund will be held from time to time to consider
matters requiring a vote of such shareholders in accordance with the
requirements of the 1940 Act, state law or the provisions of the Trust
Agreement. It is not expected that shareholder meetings will be held annually.
Except as specifically noted above, shareholders of each Fund are entitled to
one vote per share (with proportionate voting for fractional shares),
irrespective of the relative net asset value of the shares of a Fund. However,
on matters affecting an individual Fund or class of shares, a separate vote of
shareholders of that Fund or class is required. Shareholders of a Fund or class
are not entitled to vote on any matter which does not affect that Fund or class
but which requires a separate vote of another Fund or class. An example of a
matter which would be voted on separately by shareholders of each Fund is the
approval of the Advisory Agreement, and an example of a matter which would be
voted on separately by shareholders of each class of shares is approval of the
distribution plans. When issued, shares of each Fund are fully paid and
nonassessable, have no preemptive or subscription rights, and are fully
transferable. Other than the automatic conversion of Class B shares to Class A
shares, there are no conversion rights. Shares do not have cumulative voting
rights, which means that in situations in which shareholders elect trustees,
holders of more than 50% of the shares voting for the election of trustees can
elect all of the trustees of the Trust, and the holders of less than 50% of the
shares voting for the election of trustees will not be able to elect any
trustees.
The Trust Agreement provides that the trustees of the Trust shall hold office
during the existence of the Trust, except as follows: (a) any trustee may resign
or retire; (b) any trustee may be removed by a vote of the majority of the
outstanding shares of the Trust, or at any time by written instrument signed by
at least two-thirds of the trustees and specifying when such removal becomes
effective; or (c) any trustee who has died or become incapacitated and is unable
to serve may be removed by a written instrument signed by a majority of the
trustees.
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 the Trust may be held
30
<PAGE> 35
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.
31
<PAGE> 36
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 37
THE TOLL-FREE NUMBER FOR ACCESS TO ROUTINE ACCOUNT INFORMATION AND SHAREHOLDER
ASSISTANCE IS
(800) 959-4246 (7:30 A.M. TO 6:00 P.M. CENTRAL TIME).
INVESTOR'S GUIDE
TO THE AIM FAMILY OF FUNDS--Registered Trademark--
- --------------------------------------------------------------------------------
INTRODUCTION TO THE AIM FAMILY OF FUNDS
THE AIM FAMILY OF FUNDS consists of the following mutual funds:
<TABLE>
<S> <C>
AIM ADVISOR FLEX FUND AIM GLOBAL UTILITIES FUND
AIM ADVISOR INTERNATIONAL VALUE FUND AIM HIGH INCOME MUNICIPAL FUND
AIM ADVISOR LARGE CAP VALUE FUND AIM HIGH YIELD FUND
AIM ADVISOR MULTIFLEX FUND AIM INCOME FUND
AIM ADVISOR REAL ESTATE FUND AIM INTERMEDIATE GOVERNMENT FUND
AIM AGGRESSIVE GROWTH FUND AIM INTERNATIONAL EQUITY FUND
AIM ASIAN GROWTH FUND AIM LIMITED MATURITY TREASURY FUND
AIM BALANCED FUND AIM MONEY MARKET FUND(*)
AIM BLUE CHIP FUND AIM MUNICIPAL BOND FUND
AIM CAPITAL DEVELOPMENT FUND AIM SELECT GROWTH FUND
AIM CHARTER FUND AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
AIM CONSTELLATION FUND AIM TAX-EXEMPT CASH FUND(*)
AIM EUROPEAN DEVELOPMENT FUND AIM TAX-FREE INTERMEDIATE FUND
AIM GLOBAL AGGRESSIVE GROWTH FUND AIM VALUE FUND
AIM GLOBAL INCOME FUND AIM WEINGARTEN FUND
</TABLE>
(*) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of
AIM MONEY MARKET FUND are offered to investors at net asset value, without
payment of a sales charge, as described below. Other funds, including the
Class A, Class B and Class C shares of AIM MONEY MARKET FUND, are sold with
an initial sales charge or subject to a contingent deferred sales charge
upon redemption, as described below.
IT IS IMPORTANT FOR SHAREHOLDERS CONSIDERING AN EXCHANGE TO CAREFULLY REVIEW
THE PROSPECTUS OF THE FUND WHOSE SHARES WILL BE ACQUIRED IN AN EXCHANGE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SHARES OF ANY FUND OTHER THAN
THE FUND(S) NAMED ON THE COVER PAGE OF THIS PROSPECTUS.
- --------------------------------------------------------------------------------
HOW TO PURCHASE SHARES
HOW TO OPEN AN ACCOUNT. In order to purchase shares of any of The AIM Family
of Funds ("AIM Funds"), an investor must submit a fully completed new Account
Application form directly to A I M Fund Services, Inc. ("AFS" or the "Transfer
Agent") or through any dealer authorized by A I M Distributors, Inc. ("AIM
Distributors") to sell shares of the AIM Funds.
Accounts submitted without a correct, certified taxpayer identification number
or, alternatively, a completed IRS Form W-8 (for non-resident aliens) or Form
W-9 (certifying exempt status) accompanying the registration information will be
subject to backup withholding. See the Account Application for applicable
Internal Revenue Service penalties. The minimum initial investment is $500,
except for accounts initially established through an Automatic Investment Plan,
which requires a special authorization form (see "Special Plans") and for
certain retirement accounts. The minimum initial investment for accounts
established with an Automatic Investment Plan is $50. The minimum initial
investment for an Individual Retirement Arrangement ("IRA") or Roth IRA is $250.
There are no minimum initial investment requirements applicable to
money-purchase/profit-sharing plans, 401(k) plans, Simplified Employee Pension
("SEP") accounts, Salary Reduction ("SARSEP") accounts, Savings Incentive Match
Plans for Employee IRA ("SIMPLE IRA") accounts, 403(b) plans or 457 (state
deferred compensation) plans (except that the minimum initial investment for
salary deferrals for such plans is $25), or for investment of dividends and
distributions of any of the AIM Funds into any existing AIM Funds account.
AFS' mailing address is:
A I M Fund Services, Inc.
P.O. Box 4739
Houston, TX 77210-4739
For additional information or assistance, investors should call the Client
Services Department of AFS at:
(800) 959-4246
Shares of any AIM Funds not named on the cover of this Prospectus are offered
pursuant to separate prospectuses. Copies of other prospectuses may be obtained
by calling (800) 347-4246.
AFG 02/98
A-1
<PAGE> 38
INITIAL AND SUBSEQUENT PURCHASES BY WIRE: To insure prompt credit to his
account, an investor or his dealer should call AFS' Client Services Department
at (800) 959-4246 prior to sending a wire to receive a reference number for the
wire. The following wire instructions should be used:
<TABLE>
<S> <C>
Beneficiary Bank ABA/Routing #: 113000609
Beneficiary Account Number: 00100366807
Beneficiary Account Name: A I M Fund Services, Inc.
RFB: Fund name, Reference Number (16 character limit)
OBI: Shareholder Name, Shareholder Account Number
(70 character limit)
</TABLE>
HOW TO PURCHASE ADDITIONAL SHARES. Additional shares may be purchased directly
through AIM Distributors or through any dealer who has entered into an agreement
with AIM Distributors. The minimum investment for subsequent purchases is $50.
The minimum employee salary deferral investment for participants in
money-purchase/profit sharing plans, 401(k), IRA/SEP, 403(b) or 457 plans is
$25. There are no such minimum investment requirements for investment of
dividends and distributions of any of the AIM Funds into any other existing AIM
Funds account.
BY MAIL: Investors must indicate their account number and the name of the Fund
being purchased. The remittance slip from a confirmation statement should be
used for this purpose, and sent to AFS.
BY AIM BANK CONNECTION(SM): To purchase additional shares by electronic funds
transfer, please contact the Client Services Department of AFS for detail.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS OF PURCHASE OF THE AIM FUNDS
Shares of the AIM Funds, including Class A shares (the "Class A shares") of
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
AGGRESSIVE GROWTH 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-FREE INTERMEDIATE FUND, AIM
VALUE FUND and AIM WEINGARTEN FUND, collectively (other than AIM AGGRESSIVE
GROWTH FUND, AIM LIMITED MATURITY TREASURY FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND), the "Multiple Class Funds," may
be purchased at their respective net asset value plus a sales charge as
indicated below, except that Class A shares of AIM TAX-EXEMPT CASH FUND and AIM
Cash Reserve Shares of AIM MONEY MARKET FUND are sold without a sales charge and
Class B shares (the "Class B shares") and Class C shares ("Class C shares") of
the Multiple Class Funds are sold at net asset value subject to a contingent
deferred sales charge payable upon certain redemptions. These contingent
deferred sales charges are described under the caption "How to Redeem
Shares -- Multiple Distribution System." Securities dealers and other persons
entitled to receive compensation for selling or servicing shares of a Multiple
Class Fund may receive different compensation for selling or servicing one
particular class of shares over another class in the same Multiple Class Fund.
Factors an investor should consider prior to purchasing Class A, Class B or
Class C shares (or, if applicable, AIM Cash Reserve Shares) of a Multiple Class
Fund are described below under "Special Information Relating to Multiple Class
Funds." For information on purchasing any of the AIM Funds and to receive a
prospectus, please call (800) 347-4246. As described below, the sales charge
otherwise applicable to a purchase of shares of a fund may be reduced if certain
conditions are met. In order to take advantage of a reduced sales charge, the
prospective investor or his dealer must advise AIM Distributors that the
conditions for obtaining a reduced sales charge have been met. Net asset value
is determined in the manner described under the caption "Determination of Net
Asset Value." The following tables show the sales charge and dealer concession
at various investment levels for the AIM Funds.
AFG 02/98
A-2
<PAGE> 39
SALES CHARGES AND DEALER CONCESSIONS
GROUP I. Certain AIM Funds are currently sold with a sales charge ranging from
5.50% to 2.00% of the offering price on purchases of less than $1,000,000. These
AIM Funds include Class A shares of each of AIM ADVISOR FLEX FUND, AIM ADVISOR
INTERNATIONAL VALUE FUND, AIM ADVISOR LARGE CAP VALUE FUND, AIM ADVISOR
MULTIFLEX FUND, AIM AGGRESSIVE GROWTH FUND, AIM ASIAN GROWTH FUND, AIM BLUE CHIP
FUND, AIM CAPITAL DEVELOPMENT FUND, AIM CHARTER FUND, AIM CONSTELLATION FUND,
AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL UTILITIES FUND, AIM INTERNATIONAL
EQUITY FUND, AIM MONEY MARKET FUND, AIM SELECT GROWTH FUND, AIM VALUE FUND and
AIM WEINGARTEN FUND.
<TABLE>
<CAPTION>
DEALER
CONCESSION
INVESTOR'S SALES CHARGE ----------
-------------------------- AS A
AS A AS A PERCENTAGE
PERCENTAGE PERCENTAGE OF THE
OF THE PUBLIC OF THE NET PUBLIC
AMOUNT OF INVESTMENT IN OFFERING AMOUNT OFFERING
SINGLE TRANSACTION PRICE INVESTED PRICE
----------------------- ------------- ---------- ----------
<S> <C> <C> <C>
Less than $ 25,000 5.50% 5.82% 4.75%
$ 25,000 but less than $ 50,000 5.25 5.54 4.50
$ 50,000 but less than $ 100,000 4.75 4.99 4.00
$100,000 but less than $ 250,000 3.75 3.90 3.00
$250,000 but less than $ 500,000 3.00 3.09 2.50
$500,000 but less than $1,000,000 2.00 2.04 1.60
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions. See "All Groups of AIM Funds." 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,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
GROUP II. Certain AIM Funds are currently sold with a sales charge ranging
from 4.75% to 2.00% of the offering price on purchases of less than $1,000,000.
These AIM Funds are: the Class A shares of each of AIM ADVISOR REAL ESTATE FUND,
AIM BALANCED FUND, AIM GLOBAL AGGRESSIVE GROWTH FUND, AIM GLOBAL GROWTH FUND,
AIM GLOBAL INCOME FUND, AIM HIGH INCOME MUNICIPAL FUND, AIM HIGH YIELD FUND, AIM
INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND, AIM MUNICIPAL BOND FUND and AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT.
<TABLE>
<CAPTION>
DEALER
CONCESSION
INVESTOR'S SALES CHARGE ----------
-------------------------- AS A
AS A AS A PERCENTAGE
PERCENTAGE PERCENTAGE OF THE
OF THE PUBLIC OF THE NET PUBLIC
AMOUNT OF INVESTMENT IN OFFERING AMOUNT OFFERING
SINGLE 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>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/ or advance a service fee on such
transactions. See "All Groups of AIM Funds." 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,
AS DESCRIBED UNDER THE CAPTION "HOW TO REDEEM SHARES -- CONTINGENT DEFERRED
SALES CHARGE PROGRAM FOR LARGE PURCHASES."
AFG 02/98
A-3
<PAGE> 40
GROUP III. Certain AIM Funds are currently sold with a sales charge ranging
from 1.00% to 0.50% of the offering price on purchases of less than $1,000,000.
These AIM Funds are the Class A shares of each of AIM LIMITED MATURITY TREASURY
FUND and AIM TAX-FREE INTERMEDIATE FUND.
<TABLE>
<CAPTION>
DEALER
CONCESSION
INVESTOR'S SALES CHARGE ----------
-------------------------- AS A
AS A AS A PERCENTAGE
PERCENTAGE PERCENTAGE OF THE
OF THE PUBLIC OF THE NET PUBLIC
AMOUNT OF INVESTMENT IN OFFERING AMOUNT OFFERING
SINGLE TRANSACTION PRICE INVESTED PRICE
----------------------- ------------- ---------- ----------
<S> <C> <C> <C>
Less than $ 100,000 1.00% 1.01% 0.75%
$100,000 but less than $ 250,000 0.75 0.76 0.50
$250,000 but less than $1,000,000 0.50 0.50 0.40
</TABLE>
There is no sales charge on purchases of $1,000,000 or more; however, AIM
Distributors may pay a dealer concession and/or advance a service fee on such
transactions.
ALL GROUPS OF AIM FUNDS. 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.
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 AIM Fund's
shares or the amount that any particular AIM Fund will receive as proceeds from
such sales. Dealers may not use sales of the AIM 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, for all AIM Funds
other than Class A shares of each of AIM LIMITED MATURITY TREASURY FUND and AIM
TAX-FREE INTERMEDIATE FUND 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, plus 0.25% of amounts in excess of $20
million of such purchases. See "Contingent Deferred Sales Charge Program for
Large Purchases." 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), and which
are sold at net asset value and are not subject to a contingent deferred sales
charge, in an amount up to 0.10% of such purchases of Class A shares of AIM
LIMITED MATURITY TREASURY FUND, and in an amount up to 0.25% of such purchases
of Class A shares of AIM TAX-FREE INTERMEDIATE FUND.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class B shares of the AIM Funds 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.
AIM Distributors may pay sales commissions to dealers and institutions who
sell Class C shares of the AIM Funds at the time of such sales. Payments with
respect to Class C shares will equal 1.00% of the purchase price of the Class C
shares sold by the dealer or institution, and will consist of a sales commission
of 0.75% of the purchase price of the Class C shares sold plus an advance of the
first year service fee of 0.25% with respect to such shares. AIM Distributors
will retain all payments received by it relating to Class C shares for the first
year after they are purchased. The portion of the payments to AIM Distributors
under the Class A and C Plan attributable to Class C shares which constitutes an
asset-based sales charge (0.75%) is intended in part to permit AIM Distributors
to recoup a portion of on-going sales commissions to dealers plus financing
costs, if any. After the first full year, AIM Distributors will make such
payments quarterly to dealers and institutions based on the average net asset
value of Class C shares which are attributable to shareholders for whom the
dealers and institutions are designated as dealers of record. These commissions
are not paid on sales to investors exempt from the CDSC, including shareholders
of record on April 30, 1995 who purchase additional shares in any of the Funds
on or after May 1, 1995, and in circumstances where AIM Distributors grants an
exemption on particular transactions.
AFG 02/98
A-4
<PAGE> 41
TIMING OF PURCHASE ORDERS. Orders for the purchase of shares of an AIM Fund
(other than AIM MONEY MARKET FUND, as described below) received prior to the
close of the New York Stock Exchange ("NYSE"), which is generally 4:00 p.m.
Eastern Time (and which is hereinafter referred to as "NYSE Close") on any
business day of an AIM Fund will be confirmed at the price next determined.
Orders received after NYSE Close will be confirmed at the price determined on
the next business day of the AIM Fund. It is the responsibility of the dealer to
ensure that all orders are transmitted on a timely basis to the Transfer Agent.
Any loss resulting from the dealer's failure to submit an order within the
prescribed time frame will be borne by that dealer. Please see "How to Purchase
Shares -- Purchases by Wire" for information on obtaining a reference number for
wire orders, which will facilitate the handling of such orders and ensure prompt
credit to an investor's account. A "business day" of an AIM Fund is any day on
which the NYSE is open for business. It is expected that the NYSE will be closed
during the next twelve months on Saturdays and Sundays and on the days on which
New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
are observed by the NYSE.
An investor who uses a check to purchase shares will be credited with the full
number of shares purchased at the time of receipt of the purchase order, as
previously described. However, in the event of a redemption or exchange of such
shares, the investor may be required to wait up to ten business days before the
redemption proceeds are sent. This delay is necessary in order to ensure that
the check has cleared. If the check does not clear, or if any investment order
must be cancelled due to nonpayment, the investor will be responsible for any
resulting loss to an AIM Fund or to AIM Distributors.
SPECIAL INFORMATION RELATING TO MULTIPLE CLASS FUNDS. The Multiple Class Funds
currently offer two or more classes of shares through separate distribution
systems (the "Multiple Distribution System"). Although each class of shares of a
particular Multiple Class Fund represents an interest in the same portfolio of
investments, each class is subject to a different distribution structure and, as
a result, differing expenses. This Multiple Distribution System allows investors
to select the class that is best suited to the investor's needs and objectives.
In considering the options afforded by the Multiple Distribution System,
investors should consider both the applicable initial sales charge or contingent
deferred sales charge, as well as the ongoing expenses borne by each class of
shares and other relevant factors, such as whether his or her investment goals
are long-term or short-term.
CLASS A SHARES are sold subject to the initial sales charges described
above and are subject to the other fees and expenses described herein.
Class A shares of AIM MONEY MARKET FUND are designed to meet the needs of
an investor who wishes to establish a dollar cost averaging program,
pursuant to which Class A shares an investor owns may be exchanged at net
asset value for Class A shares of another Multiple Class Fund or shares of
another AIM Fund which is not a Multiple Class Fund, subject to the terms
and conditions described under the caption "Exchange Privilege -- Terms and
Conditions of Exchanges."
CLASS B SHARES are sold without an initial sales charge. Thus, the entire
purchase price of Class B shares is immediately invested in Class B shares.
Class B shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class B shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class B shares redeemed
within six years from the date such shares were purchased are subject to a
contingent deferred sales charge ranging from 5% for redemptions made
within the first year to 1% for redemptions made within the sixth year. No
contingent deferred sales charge will be imposed if Class B shares are
redeemed after six years from the date such shares were purchased.
Redemptions of Class B shares and associated charges are further described
under the caption "How to Redeem Shares -- Multiple Distribution System."
Class B shares will automatically convert into Class A shares of the same
Multiple Class Fund (together with a pro rata portion of all Class B shares
acquired through the reinvestment of dividends and distributions) eight
years from the end of the calendar month in which the purchase of Class B
shares was made. Following such conversion of their Class B shares,
investors will be relieved of the higher Rule 12b-1 Plan payments
associated with Class B shares. See "Management -- Distribution Plans."
CLASS C SHARES are sold without an initial sales charge. Thus the entire
purchase price of Class C shares is immediately invested in Class C shares.
Class C shares are subject, however, to Rule 12b-1 Plan payments of 1.00%
per annum on the average daily net assets of a Multiple Class Fund
attributable to Class C shares. See the discussion under the caption
"Management -- Distribution Plans." In addition, Class C shares redeemed
within one year from the date such shares were purchased are subject to a
1.00% contingent deferred sales charge. No contingent deferred sales charge
will be imposed if Class C shares are redeemed after one year from the date
such shares were purchased. Redemptions of Class C shares and associated
charges are further described under the caption "How to Redeem
Shares -- Multiple Distribution System."
AIM Cash Reserve Shares of AIM MONEY MARKET FUND are sold without an
initial sales charge and are not subject to a contingent deferred sales
charge; however, they are subject to the other fees and expenses described
in the prospectus for AIM MONEY MARKET FUND.
TIMING OF PURCHASE, EXCHANGE AND REDEMPTION ORDERS (AIM MONEY MARKET FUND
ONLY). Orders for purchases, exchanges and redemptions of shares of AIM MONEY
MARKET FUND received prior to 12:00 noon Eastern Time or NYSE Close on any
business day of the Fund will be confirmed at the price next determined. Net
asset value is normally determined at 12:00 noon Eastern Time and NYSE Close on
each business day of AIM MONEY MARKET FUND.
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SPECIAL INFORMATION RELATING TO AIM MONEY MARKET FUND AND AIM TAX-EXEMPT CASH
FUND (THE "MONEY MARKET FUNDS"). Because each Money Market Fund uses the
amortized cost method of valuing the securities it holds and rounds its per
share net asset value to the nearest whole cent, it is anticipated that the net
asset value of the shares of such funds will remain constant at $1.00 per share.
However, there is no assurance that each Money Market Fund can maintain a $1.00
net asset value per share. In order to earn dividends with respect to AIM MONEY
MARKET FUND on the same day that a purchase is made, purchase payments in the
form of federal funds must be received by the Transfer Agent before 12:00 noon
Eastern Time on that day. Purchases made by payments in any other form, or
payments in the form of federal funds received after such time but prior to NYSE
Close, will begin to earn dividends on the next business day following the date
of purchase. The Money Market Funds generally will not issue share certificates
but will record investor holdings in noncertificate form and regularly advise
the shareholder of his ownership position.
SHARE CERTIFICATES. Share certificates for all AIM Funds will be issued upon
written request by a shareholder to AIM Distributors or the Transfer Agent.
Otherwise, such shares will be held on the shareholder's behalf by the
applicable AIM Fund(s) and be recorded on the books of such fund(s). See
"Exchange Privilege -- Exchanges by Telephone" and "How to Redeem
Shares -- Redemptions by Telephone" for restrictions applicable to shares issued
in certificate form. Please note that certificates will not be issued for shares
held in prototype retirement plans.
MINIMUM ACCOUNT BALANCE. If (1) an account opened in a fund has been in effect
for at least one year and the shareholder has not made an additional purchase in
that account within the preceding six calendar months and (2) the value of such
account drops below $500 for three consecutive months as a result of redemptions
or exchanges, the fund has the right to redeem the account, after giving the
shareholder 60 days' prior written notice, unless the shareholder makes
additional investments within the notice period to bring the account value up to
$500. If a fund determines that a shareholder has provided incorrect information
in opening an account with a fund or in the course of conducting subsequent
transactions with the fund related to such account, the fund may, in its
discretion, redeem the account and distribute the proceeds of such redemption to
the shareholder.
REDUCTIONS IN INITIAL SALES CHARGES
Reductions in the initial sales charges shown in the sales charge tables
(quantity discounts) apply to purchases of 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. Purchases of Class A shares of AIM
TAX-EXEMPT CASH FUND, AIM Cash Reserve Shares of AIM MONEY MARKET FUND and Class
B and Class C shares of the Multiple Class Funds will not be taken into account
in determining whether a purchase qualifies for a reduction in initial sales
charges.
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 Internal Revenue Code of 1986, as amended
(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
Plans 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 A I M Advisors, Inc. ("AIM") or A I M
Capital Management, Inc. ("AIM Capital").
Investors or dealers seeking to qualify orders for a reduced initial sales
charge must identify such orders and, if necessary, support their qualification
for the reduced charge. AIM Distributors reserves the right to determine whether
any purchaser is entitled, by vir-
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tue of the foregoing definition, to the reduced sales charge. No person or
entity may distribute shares of the AIM Funds without payment of the applicable
sales charge other than to persons or entities who qualify for a reduction in
the sales charge as provided herein.
(1) LETTERS OF INTENT. A purchaser, as previously defined, may pay reduced
initial sales charges by completing the appropriate section of the account
application and by fulfilling a Letter of Intent ("LOI"). The LOI privilege is
also available to holders of the Connecticut General Guaranteed Account,
established for tax qualified group annuities, for contracts purchased on or
before June 30, 1992. The LOI confirms such purchaser's intention as to the
total investment to be made in shares of the AIM Funds (except for
(i) Class A shares of AIM TAX-EXEMPT CASH FUND, and AIM Cash Reserve Shares of
AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the Multiple Class
Funds) within the following 13 consecutive months. By marking the LOI section on
the account application and by signing the account application, the purchaser
indicates that he understands and agrees to the terms of the LOI and is bound by
the provisions described below.
Each purchase of fund shares normally subject to an initial sales charge made
during the 13-month period will be made at the public offering price applicable
to a single transaction of the total dollar amount indicated by the LOI, as
described under "Sales Charges and Dealer Concessions." It is the purchaser's
responsibility at the time of purchase to specify the account numbers that
should be considered in determining the appropriate sales charge. The offering
price may be further reduced as described under "Rights of Accumulation" if the
Transfer Agent is advised of all other accounts at the time of the investment.
Shares acquired through reinvestment of dividends and capital gains
distributions will not be applied to the LOI. At any time during the 13-month
period after meeting the original obligation, a purchaser may revise his
intended investment amount upward by submitting a written and signed request.
Such a revision will not change the original expiration date. By signing an LOI,
a purchaser is not making a binding commitment to purchase additional shares,
but if purchases made within the 13-month period do not total the amount
specified, the investor will pay the increased amount of sales charge as
described below. Purchases made within 90 days before signing an LOI will be
applied toward completion of the LOI. The LOI effective date will be the date of
the first purchase within the 90-day period. The Transfer Agent will process
necessary adjustments upon the expiration or completion date of the LOI.
Purchases made more than 90 days before signing an LOI will be applied toward
completion of the LOI based on the value of the shares purchased calculated at
the public offering price on the effective date of the LOI.
To assure compliance with the provisions of the 1940 Act, out of the initial
purchase (or subsequent purchases if necessary) the Transfer Agent will escrow
in the form of shares an appropriate dollar amount (computed to the nearest full
share). All dividends and any capital gain distributions on the escrowed shares
will be credited to the purchaser. All shares purchased, including those
escrowed, will be registered in the purchaser's name. If the total investment
specified under this LOI is completed within the 13-month period, the escrowed
shares will be promptly released. If the intended investment is not completed,
the purchaser will pay the Transfer Agent the difference between the sales
charge on the specified amount and the amount actually purchased. If the
purchaser does not pay such difference within 20 days of the expiration date, he
irrevocably constitutes and appoints the Transfer Agent as his attorney to
surrender for redemption any or all shares, to make up such difference within 60
days of the expiration date.
If at any time before completing the LOI Program, the purchaser wishes to
cancel the agreement, he must give written notice to AIM Distributors. If at any
time before completing the LOI Program the purchaser requests the Transfer Agent
to liquidate or transfer beneficial ownership of his total shares, a
cancellation of the LOI will automatically be effected. If the total amount
purchased is less than the amount specified in the LOI, the Transfer Agent will
redeem an appropriate number of escrowed shares equal to the difference between
the sales charge actually paid and the sales charge that would have been paid if
the total purchases had been made at a single time.
(2) RIGHTS OF ACCUMULATION. A "purchaser," as previously defined, may also
qualify for reduced initial sales charges based upon such purchaser's existing
investment in shares of any of the AIM Funds (except for (i) Class A shares of
AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of AIM MONEY MARKET FUND
and (ii) Class B and Class C shares of the Multiple Class Funds) at the time of
the proposed purchase. Rights of Accumulation are also available to holders of
the Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992. To determine
whether or not a reduced initial sales charge applies to a proposed purchase,
AIM Distributors takes into account not only the money which is invested upon
such proposed purchase, but also the value of all shares of the AIM Funds
(except for (i) Class A shares of AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve
Shares of AIM MONEY MARKET FUND and (ii) Class B and Class C shares of the
Multiple Class Funds) owned by such purchaser, calculated at their then current
public offering price. If a purchaser so qualifies for a reduced sales charge,
the reduced sales charge applies to the total amount of money then being
invested by such purchaser and not just to the portion that exceeds the
breakpoint above which a reduced sales charge applies. For example, if a
purchaser already owns qualifying shares of any AIM Fund with a value of $20,000
and wishes to invest an additional $20,000 in a fund with a maximum initial
sales charge of 5.50%, the reduced initial sales charge of 5.25% will apply to
the full $20,000 purchase and not just to the $15,000 in excess of the $25,000
breakpoint. To qualify for obtaining the discount applicable to a particular
purchase, the purchaser or his dealer must furnish AFS with a list of the
account numbers and the names in which such accounts of the purchaser are
registered at the time the purchase is made.
PURCHASES AT NET ASSET VALUE. Purchases of shares of any of the AIM Funds at
net asset value (without payment of an initial sales charge) may be made in
connection with: (a) the reinvestment of dividends and distributions from a fund
(see "Dividends,
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<PAGE> 44
Distributions and Tax Matters"); (b) exchanges of shares of certain other funds
(see "Exchange Privilege"); (c) use of the reinstatement privilege (see "How to
Redeem Shares"); or (d) a merger, consolidation or acquisition of assets of a
fund.
Shareholders of record of Class A shares of AIM WEINGARTEN FUND and AIM
CONSTELLATION FUND on September 8, 1986, and shareholders of record of Class A
shares of AIM CHARTER FUND on November 17, 1986, may purchase additional Class A
shares of the particular AIM Fund(s) whose shares they owned on such date, at
net asset value (without payment of a sales charge) for as long as they
continuously own Class A shares of such AIM Fund(s) having a market value of at
least $500. In addition, discretionary advised clients of any investment
advisors whose clients held Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND on September 8, 1986, or who held Class A shares of AIM
CHARTER FUND on November 17, 1986, and have held such Class A shares at all
times subsequent to such date, may purchase Class A shares of the applicable AIM
Fund(s) at the net asset value of such shares.
The following persons may purchase shares of the AIM Funds 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 (formerly The Shareholders Services Group, Inc.); (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; and (i) employees of
Triformis Inc.
In addition, shares of any AIM 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 LOI, (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 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 Fund. PLEASE NOTE THAT TAX-EXEMPT FUNDS ARE NOT APPROPRIATE INVESTMENTS FOR
SUCH PLANS. AIM Distributors may pay investment dealers or other financial
service firms for share purchases of the Load Funds (as defined on page A-10
herein) 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, plus 0.25% of amounts in excess of $20 million of
such purchases and up to 0.10% of the net asset value of any Class A shares of
AIM LIMITED MATURITY TREASURY FUND sold at net asset value to an employee
benefit plan in accordance with this paragraph.
Class A shares of AIM WEINGARTEN FUND and AIM CONSTELLATION FUND may be
deposited at net asset value, without payment of a sales charge, in G/SET series
unit investment trusts, whose portfolios consist exclusively of Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Class A shares of such funds may also be purchased at net asset
value by other unit investment trusts approved by the Board of Directors of AIM
Equity Funds, Inc. Unit holders of such trusts may elect to invest cash
distributions from such trusts in Class A shares of AIM WEINGARTEN FUND or AIM
CONSTELLATION FUND at net asset value, including: (a) distributions of any
dividend income or other income received by such trusts; (b) distributions of
any net capital gains received in respect of Class A shares of AIM WEINGARTEN
FUND or AIM CONSTELLATION FUND and proceeds of the sale of Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND used to redeem units of such trusts;
and (c) proceeds from the maturity of the Treasury Obligations at the
termination dates of such trusts. Prior to the termination dates of such trusts,
a unit holder may invest the proceeds from the redemption or repurchase of his
units in Class A shares of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND at net
asset value, provided: (a) that the investment in Class A shares of AIM
WEINGARTEN FUND or AIM CONSTELLATION FUND is effected within 30 days of such
redemption or repurchase; and (b) that the unit holder or his dealer provides
AIM Distributors with a letter which: (i) identifies the name, address and
telephone number of the dealer who sold to the unit holder the units to be
redeemed or repurchased; and (ii) states that the investment in Class A shares
of AIM WEINGARTEN FUND or AIM CONSTELLATION FUND is being funded exclusively by
the proceeds from the redemption or repurchase of units of such trusts.
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FOR ANY FUND NAMED ON THE COVER PAGE OF THIS PROSPECTUS, 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 SUCH FUND. For any fund
named on the cover page, 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 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 "Exchange Privilege."
- --------------------------------------------------------------------------------
SPECIAL PLANS
Except as noted below, each AIM Fund provides the special plans described
below for the convenience of its shareholders. Once established, there is no
obligation to continue to invest through a plan, and a shareholder may terminate
a plan at any time.
Special plan applications and further information, including details of any
fees which are charged to a shareholder investing through a plan, may be
obtained by written request, directed to AFS at the address provided under "How
to Purchase Shares," or by calling the Client Services Department of AFS at
(800) 959-4246. IT IS RECOMMENDED THAT A SHAREHOLDER CONSIDERING ANY OF THE
PLANS DESCRIBED HEREIN CONSULT A TAX ADVISOR BEFORE COMMENCING PARTICIPATION IN
SUCH A PLAN.
SYSTEMATIC WITHDRAWAL PLAN. Under a Systematic Withdrawal Plan, a shareholder
who owns shares which are not subject to a contingent deferred sales charge, can
arrange for monthly, quarterly or annual amounts (but not less than $50) to be
drawn against the balance of his account in the designated AIM Fund.
Shareholders who own shares subject to a contingent deferred sales charge, can
only arrange for monthly or quarterly withdrawals under a Systematic Withdrawal
Plan. Payment of this amount can be made on any day of the month the shareholder
specifies, except the thirtieth or thirty-first day of each month in which a
payment is to be made. A minimum account balance of $5,000 is required to
establish a Systematic Withdrawal Plan, but there is no requirement thereafter
to maintain any minimum investment. With respect to shares subject to a
contingent deferred sales charge (all classes) no contingent deferred sales
charge will be imposed on withdrawals made under a Systematic Withdrawal Plan,
provided that the amounts withdrawn under such a plan do not exceed on an annual
basis 12% of the account value at the time the shareholder elects to participate
in the Systematic Withdrawal Plan. Systematic Withdrawal Plans with respect to
shares subject to a contingent deferred sales charge that exceed on an annual
basis 12% of such account will be subject to a contingent deferred sales charge
on the amounts exceeding 12% of the account value at the time the shareholder
elects to participate in the Systematic Withdrawal Plan.
Under a Systematic Withdrawal Plan, all shares are to be held by the Transfer
Agent and all dividends and distributions are reinvested in shares of the
applicable AIM Fund by the Transfer Agent. To provide funds for payments made
under the Systematic Withdrawal Plan, the Transfer Agent redeems sufficient full
and fractional shares at their net asset value in effect at the time of each
such redemption.
Payments under a Systematic Withdrawal Plan constitute taxable events. Since
such payments are funded by the redemption of shares, they may result in a
return of capital and in capital gains or losses, rather than in ordinary
income. Because sales charges are imposed on additional purchases of shares
(other than Class B or Class C Shares of the Multiple Class Funds and AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), it is disadvantageous to effect such
purchases while a Systematic Withdrawal Plan is in effect.
The Systematic Withdrawal Plan may be terminated at any time upon 10 days'
prior notice to AFS. Each AIM Fund bears its share of the cost of operating the
Systematic Withdrawal Plan. Each AIM Fund reserves the right to initiate a fee
for each withdrawal (not to exceed its cost), but there is no present intent to
do so.
AUTOMATIC INVESTMENT PLAN. Shareholders who wish to make regular systematic
investments may establish an Automatic Investment Plan. Under this plan
withdrawal is made on the shareholder's bank account in the amount specified by
the shareholder (minimum $50 per investment, per account) and on a day or
date(s) specified by the shareholder. The proceeds are invested in shares of the
designated AIM Fund at the applicable offering price determined on the date of
the withdrawal. An Automatic Investment Plan may be discontinued upon 10 days'
prior notice to the Transfer Agent or AIM Distributors.
AUTOMATIC DIVIDEND INVESTMENT PLAN. Shareholders may elect to have all
dividends and distributions declared by an AIM Fund paid in cash or invested at
net asset value, without payment of an initial sales charge, either in shares of
the same AIM Fund or invested in shares of another AIM Fund. For each of the
Multiple Class Funds, dividends and distributions attributable to Class A shares
may be reinvested in Class A shares of the same fund, in Class A shares of
another Multiple Class Fund or in shares of another AIM Fund which is not a
Multiple Class Fund; dividends and distributions attributable to Class B shares
may be reinvested in Class B shares of the same fund or in Class B shares of
another Multiple Class Fund; dividends and distributions attributable to Class C
shares may be reinvested in Class C shares of the same fund or in Class C shares
of another Multiple Class Fund; and dividends and distributions attributable to
AIM Cash Reserve Shares of AIM MONEY MARKET FUND may be reinvested in additional
shares of such fund, in Class A shares of another Multiple Class Fund or in
shares of another AIM Fund which is not a Multiple Class Fund. See "Dividends,
Distributions and
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Tax Matters -- Dividends and Distributions" for a description of payment dates
for these options. In order to qualify to have dividends and distributions of
one AIM Fund invested in shares of another AIM Fund, the following conditions
must be satisfied: (a) the shareholder must have an account balance in the
dividend paying fund of at least $5,000; (b) the account must be held in the
name of the shareholder (i.e., the account may not be held in nominee name); and
(c) the shareholder must have requested and completed an authorization relating
to the reinvestment of dividends into another AIM Fund. An authorization may be
given on the account application or on an authorization form available from AIM
Distributors. An AIM Fund will waive the $5,000 minimum account value
requirement if the shareholder has an account in the fund selected to receive
the dividends and distributions with a value of at least $500.
DOLLAR COST AVERAGING. Shareholders may elect to have a specified amount
automatically exchanged, either monthly or quarterly (on or about the 10th or
25th day of the applicable month), from one of their accounts into one or more
AIM Funds, subject to the terms and conditions described under the caption
"Exchange Privilege -- Terms and Conditions of Exchanges." The account from
which exchanges are to be made must have a value of at least $5,000 when a
shareholder elects to begin this program, and the exchange minimum is $50 per
transaction. All of the accounts that are part of this program must have
identical registrations. The net asset value of shares purchased under this
program may vary, and may be more or less advantageous than if shares were not
exchanged automatically. There is no charge for entering the Dollar Cost
Averaging program. Sales charges may apply, as described under the caption
"Exchange Privilege."
PROTOTYPE RETIREMENT PLANS. The AIM Funds (except for AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-FREE INTERMEDIATE FUND, AIM
TAX-EXEMPT CASH FUND and AIM TAX-EXEMPT BOND FUND OF CONNECTICUT) have made the
following prototype retirement plans available to corporations, individuals and
employees of non-profit organizations and public schools: combination
money-purchase/profit-sharing plans; 403(b) plans; IRA plans; Roth IRA plans;
SARSEP plans; SEP plans; and SIMPLE IRA plans (collectively, "retirement
accounts"). Information concerning these plans, including the custodian's fees
and the forms necessary to adopt such plans, can be obtained by calling or
writing the AIM Funds or AIM Distributors. Shares of the AIM Funds are also
available for investment through existing 401(k) plans (for both individuals and
employers) adopted under the Code. The plan custodian currently imposes an
annual $10 maintenance fee with respect to each retirement account for which it
serves as the custodian. This fee is generally charged in December. Each AIM
Fund and/or the custodian reserve the right to change this maintenance fee and
to initiate an establishment fee (not to exceed its cost).
AFG 02/98
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- --------------------------------------------------------------------------------
EXCHANGE PRIVILEGE
TERMS AND CONDITIONS OF EXCHANGES. Shareholders of the AIM Funds may
participate in an exchange privilege as described below. The exchange privilege
is also available to holders of the Connecticut General Guaranteed Account,
established for tax-qualified group annuities, for contracts purchased on or
before June 30, 1992. AIM Distributors acts as distributor for the AIM Funds,
which represent a range of different investment objectives and policies. As set
forth under the caption "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions," shares of certain of the AIM
Funds, including the Class A shares of the Multiple Class Funds, listed below
and referred to herein as the "Load Funds," are sold at a public offering price
that includes a maximum sales charge of 5.50% or 4.75% of the public offering
price of such shares; Class A shares (or shares which normally involve the
payment of initial sales charges) of certain of the AIM Funds, listed below and
referred to herein as the "Lower Load Funds," are sold at a public offering
price that includes a maximum sales charge of 1.00% of the public offering price
of such shares; and Class A shares or shares of certain other funds, listed
below and referred to herein as the "No Load Funds," are sold at net asset
value, without payment of a sales charge.
<TABLE>
<S> <C> <C>
LOAD FUNDS: LOWER LOAD FUNDS:
AIM ADVISOR FLEX FUND -- AIM GLOBAL GROWTH AIM LIMITED MATURITY TREASURY FUND
CLASS A FUND -- CLASS A -- CLASS A
AIM ADVISOR INTERNATIONAL AIM GLOBAL INCOME AIM TAX-FREE INTERMEDIATE FUND
VALUE FUND -- CLASS A FUND -- CLASS A -- CLASS A
AIM ADVISOR LARGE CAP AIM GLOBAL UTILITIES NO LOAD FUNDS:
VALUE FUND -- CLASS A FUND -- CLASS A
AIM ADVISOR MULTIFLEX AIM HIGH INCOME MUNICIPAL AIM MONEY MARKET FUND
FUND -- CLASS A FUND -- CLASS A -- AIM CASH RESERVE SHARES
AIM ADVISOR REAL ESTATE AIM HIGH YIELD FUND -- CLASS A AIM TAX-EXEMPT CASH FUND -- CLASS A
FUND -- CLASS A AIM INCOME FUND -- CLASS A
AIM AGGRESSIVE GROWTH AIM INTERMEDIATE GOVERNMENT
FUND -- CLASS A FUND -- CLASS A
AIM ASIAN GROWTH FUND -- CLASS A AIM INTERNATIONAL EQUITY
AIM BALANCED FUND -- CLASS A FUND -- CLASS A
AIM BLUE CHIP FUND -- CLASS A AIM MONEY MARKET
AIM CAPITAL DEVELOPMENT FUND -- CLASS A
FUND -- CLASS A AIM MUNICIPAL BOND
AIM CHARTER FUND -- CLASS A FUND -- CLASS A
AIM CONSTELLATION AIM SELECT GROWTH FUND -- CLASS A
FUND -- CLASS A AIM TAX-EXEMPT BOND FUND
AIM EUROPEAN DEVELOPMENT OF CONNECTICUT -- CLASS A
FUND -- CLASS A AIM VALUE FUND -- CLASS A
AIM GLOBAL AGGRESSIVE GROWTH AIM WEINGARTEN FUND -- CLASS A
FUND -- CLASS A
</TABLE>
Shares of any AIM Fund may be exchanged for shares of any other AIM Fund on
the terms described on the chart below, except that (i) Load Fund share
purchases of $1,000,000 or more which are subject to a contingent deferred sales
charge may not be exchanged for Lower Load Funds or for AIM TAX-EXEMPT CASH
FUND; (II) LOWER LOAD FUND SHARE PURCHASES OF $1,000,000 OR MORE AND AIM Cash
Reserve Shares of AIM MONEY MARKET FUND and AIM TAX-EXEMPT CASH FUND PURCHASES
MAY BE EXCHANGED FOR LOAD FUND SHARES IN AMOUNTS OF $1,000,000 OR MORE WHICH
WILL THEN BE SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE; HOWEVER, FOR
PURPOSES OF CALCULATING THE CONTINGENT DEFERRED SALES CHARGE ON THE LOAD FUND
SHARES ACQUIRED, THE 18-MONTH PERIOD SHALL BE COMPUTED FROM THE DATE OF SUCH
EXCHANGE; (iii) Class A shares may be exchanged for Class A shares, (iv) Class B
shares may be exchanged only for Class B shares; (v) Class C shares may only be
exchanged for Class C shares; and (vi) AIM Cash Reserve Shares of AIM MONEY
MARKET FUND may not be exchanged for Class A shares of AIM MONEY MARKET FUND or
for Class B or Class C shares.
AFG 02/98
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<PAGE> 48
DEPENDING UPON THE FUND FROM WHICH AND INTO WHICH AN EXCHANGE IS BEING MADE,
SHARES BEING ACQUIRED IN AN EXCHANGE MAY BE ACQUIRED AT THEIR OFFERING PRICE OR
AT THEIR NET ASSET VALUE (WITHOUT PAYMENT OF A SALES CHARGE) AS SET FORTH IN THE
TABLE BELOW FOR SHARES INITIALLY PURCHASED PRIOR TO MAY 1, 1994:
<TABLE>
<CAPTION>
MULTIPLE CLASS FUNDS:
LOWER LOAD NO LOAD ------------------------------
FROM: TO: LOAD FUNDS FUNDS FUNDS CLASS B CLASS C
----- -------------- ----------------------- ----------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load
Funds.......... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
No Load Funds.... Offering Price if No Load shares Net Asset Value if No Net Asset Value Not Applicable Not Applicable
were directly purchased. Net Load shares were
Asset Value if No Load shares acquired upon exchange
were acquired upon exchange of of shares of any Load
shares of any Load Fund or any Fund or any Lower Load
Lower Load Fund. Fund; otherwise,
Offering Price.
Multiple Class
Funds:
Class B........ Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
FOR SHARES INITIALLY PURCHASED ON OR AFTER MAY 1, 1994, THE FOREGOING TABLE IS REVISED AS FOLLOWS:
Load Funds....... Net Asset Value Net Asset Value Net Asset Value Not Applicable Not Applicable
Lower Load
Funds.......... Net Asset Value if shares were Net Asset Value Net Asset Value Not Applicable Not Applicable
acquired upon exchange of any
Load Fund. Otherwise, difference
in sales charge will apply.
No Load Funds.... Offering Price if No Load shares Net Asset Value if No Net Asset Value Not Applicable Not Applicable
were directly purchased. Net Load shares were
Asset Value if No Load shares acquired upon exchange
were acquired upon exchange of of shares of any Load
shares of any Load Fund. Fund or any Lower Load
Difference in sales charge will Fund; otherwise,
apply if No Load shares were Offering Price.
acquired upon exchange of Lower
Load Fund shares.
Multiple Class
Funds:
Class B........ Not Applicable Not Applicable Not Applicable Net Asset Value Not Applicable
Class C........ Not Applicable Not Applicable Not Applicable Not Applicable Net Asset Value
</TABLE>
An exchange is permitted only in the following circumstances: (a) if the funds
offer more than one class of shares, the exchange must be between the same class
of shares (e.g., Class A, Class B and Class C shares of a Multiple Class Fund
cannot be exchanged for each other), except that AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may be exchanged for Class A, Class B, or Class C shares of
another Multiple Class Fund; (b) the dollar amount of the exchange must be at
least equal to the minimum investment applicable to the shares of the fund
acquired through such exchange; (c) the shares of the fund acquired through
exchange must be qualified for sale in the state in which the shareholder
resides; (d) the exchange must be made between accounts having identical
registrations and addresses; (e) the full amount of the purchase price for the
shares being exchanged must have already been received by the fund; (f) the
account from which shares have been exchanged must be coded as having a
certified taxpayer identification number on file or, in the alternative, an
appropriate Internal Revenue Service ("IRS") Form W-8 (certificate of foreign
status) or Form W-9 (certifying exempt status) must have been received by the
fund; (g) newly acquired shares (through either an initial or subsequent
investment) are held in an account for at least ten business days, and all other
shares are held in an account for at least one day, prior to the exchange; and
(h) certificates representing shares must be returned before shares can be
exchanged. There is no fee for exchanges among the AIM Funds.
THE CURRENT PROSPECTUS OF EACH OF THE AIM FUNDS AND CURRENT INFORMATION
CONCERNING THE OPERATION OF THE EXCHANGE PRIVILEGE ARE AVAILABLE THROUGH AIM
DISTRIBUTORS OR THROUGH ANY DEALER WHO HAS EXECUTED AN APPLICABLE AGREEMENT WITH
AIM DISTRIBUTORS. BEFORE EXCHANGING SHARES, INVESTORS SHOULD REVIEW THE
PROSPECTUSES OF THE FUNDS WHOSE SHARES WILL BE ACQUIRED THROUGH EXCHANGE.
EXCHANGES OF SHARES ARE CONSIDERED TO BE SALES FOR FEDERAL AND STATE INCOME TAX
PURPOSES AND MAY RESULT IN A TAXABLE GAIN OR LOSS TO A SHAREHOLDER.
THE EXCHANGE PRIVILEGE IS NOT AN OPTION OR RIGHT TO PURCHASE SHARES BUT IS
PERMITTED UNDER THE RESPECTIVE POLICIES OF THE PARTICIPATING FUNDS, AND MAY BE
MODIFIED OR DISCONTINUED BY ANY OF SUCH FUNDS OR BY AIM DISTRIBUTORS AT ANY
TIME, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT NOTICE.
Shares of any AIM Fund (other than AIM MONEY MARKET FUND) to be exchanged are
redeemed at their net asset value as determined at NYSE Close on the day that an
exchange request in proper form (described below) is received. Exchange requests
received
AFG 02/98
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<PAGE> 49
after NYSE Close will result in the redemption of shares at their net asset
value at NYSE Close on the next business day. See "Terms and Conditions of
Purchase of the AIM Funds -- Timing of Purchase, Exchange and Redemption Orders
(AIM MONEY MARKET FUND only)" for information regarding the timing of exchange
orders for AIM MONEY MARKET FUND. Normally, shares of an AIM Fund to be acquired
by exchange are purchased at their net asset value or applicable offering price,
as the case may be, determined on the date that such request is received, but
under unusual market conditions such purchases may be delayed for up to five
business days if it is determined that a fund would be materially disadvantaged
by an immediate transfer of the proceeds of the exchange. If a shareholder is
exchanging into a fund paying daily dividends (See "Dividends, Distributions and
Tax Matters -- Dividends and Distributions," below), and the release of the
exchange proceeds is delayed for the foregoing five-day period, such shareholder
will not begin to accrue dividends until the sixth business day after the
exchange. Shares purchased by check may not be exchanged until it is determined
that the check has cleared, which may take up to ten business days from the date
that the check is received. See "Terms and Conditions of Purchase of the AIM
Funds -- Timing of Purchase Orders."
In the event of unusual market conditions, AIM Distributors reserves the right
to reject any exchange request, if, in the judgment of AIM Distributors, the
number of requests or the total value of the shares that are the subject of the
exchange places a material burden on a fund. For example, the number of
exchanges by investment managers making market timing exchanges may be limited.
EXCHANGES BY MAIL. Investors exchanging their shares by mail should send a
written request to AFS. The request should contain the account registration and
account number, the dollar amount or number of shares to be exchanged, and the
names of the funds from which and into which the exchange is to be made. The
request should comply with all of the requirements for redemption by mail,
except those required for redemption of IRAs. See "How to Redeem Shares."
EXCHANGES BY TELEPHONE. Shareholders or their agents may request an exchange
by telephone. If a shareholder does not wish to allow telephone exchanges by any
person in his account, he should decline that option on the account application.
AIM Distributors has made arrangements with certain dealers and investment
advisory firms to accept telephone instructions to exchange shares between any
of the AIM Funds. AIM Distributors reserves the right to impose conditions on
dealers or investment advisors who make telephone exchanges of shares of the
funds, including the condition that any such dealer or investment advisor enter
into an agreement (which contains additional conditions with respect to
exchanges of shares) with AIM Distributors. To exchange shares by telephone, a
shareholder, dealer or investment advisor who has satisfied the foregoing
conditions must call AFS at (800) 959-4246. If a shareholder is unable to reach
AFS by telephone, he may also request exchanges by telegraph or use overnight
courier services to expedite exchanges by mail, which will be effective on the
business day received by the Transfer Agent as long as such request is received
prior to NYSE Close. The Transfer Agent and AIM Distributors will not be liable
for any loss, expense or cost arising out of any telephone exchange request that
they reasonably believe to be genuine, but may in certain cases be liable for
losses due to unauthorized or fraudulent transactions if they do not follow
reasonable procedures for verification of telephone transactions. Such
reasonable procedures may include recordings of telephone transactions
(maintained for six months), requests for confirmation of the shareholder's
Social Security Number and current address, and mailings of confirmations
promptly after the transaction.
EXCHANGES OF CLASS B AND CLASS C SHARES. A contingent deferred sales charge
will not be imposed in connection with exchanges among Class B shares or among
Class C shares. For purposes of determining a shareholder's holding period of
Class B or Class C shares in the calculation of the applicable contingent
deferred sales charge, the period of time during which Class B or Class C shares
were held prior to an exchange will be added to the holding period of the
applicable Class B or Class C shares acquired in an exchange.
- --------------------------------------------------------------------------------
HOW TO REDEEM SHARES
Shares of the AIM Funds may be redeemed directly through AIM Distributors or
through any dealer who has entered into an agreement with AIM Distributors. In
addition to the obligation of the fund(s) named on the cover page to redeem
shares, AIM Distributors also repurchases shares. Although a contingent deferred
sales charge may be applicable to certain redemptions, as described below, there
is no redemption fee imposed when shares are redeemed or repurchased; however,
dealers may charge service fees for handling repurchase transactions.
MULTIPLE DISTRIBUTION SYSTEM. Class B shares. Class B shares purchased under
the Multiple Distribution System may be redeemed on any business day of a
Multiple Class Fund at the net asset value per share next determined following
receipt of the redemption order, as described under the caption "Timing and
Pricing of Redemption Orders," 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 attrib-
AFG 02/98
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<PAGE> 50
utable 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>
YEAR CONTINGENT DEFERRED
SINCE SALES CHARGE AS
PURCHASE % OF DOLLAR AMOUNT
MADE 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.
Class C Shares. Class C shares purchased under the Multiple Distribution
System may be redeemed on any business day of a Multiple Class Fund at the net
asset value per share next determined following receipt of the redemption order,
as described under the caption "Timing and Pricing of Redemption Orders," less a
1% contingent deferred sales charge. No deferred sales charge will be imposed
(i) on redemptions of Class C shares following one year from the date such
shares were purchased; (ii) on Class C shares acquired through reinvestment of
dividends and distributions attributable to Class C shares; (iii) on amounts
that represent capital appreciation in the shareholder's account above the
purchase price of the Class C shares; (iv) on redemptions of additional
purchases of shares of 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, by shareholders of record on April 30, 1995 of these
funds (shareholders whose broker/dealers maintain a single omnibus account with
the Transfer Agent on behalf of those shareholders, perform sub-accounting
functions with respect to those shareholders, and are unable to segregate
shareholders of record prior to April 30, 1995 from shareholders whose accounts
were opened after that date will be subject to a CDSC on all purchases made
after March 1, 1996).
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
Multiple Class 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 described in the prospectus of such Multiple Class Fund, (5)
effected by AIM of its investment in Class B or Class C shares and (6) of Class
C shares 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 payment otherwise payable to the dealer described in
the fifth paragraph under the caption "Terms and Conditions of Purchase of the
AIM Funds -- All Groups of AIM Funds."
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 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 Multiple Class
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.
AFG 02/98
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<PAGE> 51
CONTINGENT DEFERRED SALES CHARGE PROGRAM FOR LARGE PURCHASES. Except for
purchases of Class B and Class C shares of a Multiple Class Fund and purchases
of shares of the No Load Funds and Lower Load Funds, A CONTINGENT DEFERRED SALES
CHARGE OF 1% APPLIES TO PURCHASES OF $1,000,000 OR MORE THAT ARE REDEEMED WITHIN
18 MONTHS OF THE DATE OF PURCHASE. For a description of the AIM Funds
participating in this program, see "Terms and Conditions of Purchase of the AIM
Funds -- Sales Charges and Dealer Concessions." 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 (i) shares of any Load
Fund or AIM Cash Reserve Shares of AIM MONEY MARKET 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, and (ii) shares of any Load Fund which are subject to the 1%
contingent deferred sales charge and which were acquired through an exchange of
shares of a Lower Load Fund or a No Load Fund which previously were not subject
to the 1% contingent deferred sales charge will not be credited with the period
of time such exchanged shares were held. The charge will be waived in the
following circumstances: (1) 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 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
as described in the third paragraph under the caption "Terms and Conditions of
Purchase of the AIM Funds -- All Groups of AIM Funds"; 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.
REDEMPTIONS BY MAIL. Redemption requests must be in writing and sent to the
Transfer Agent. Upon receipt of a redemption request in proper form, payment
will be made as soon as practicable, but in any event will normally be made
within seven days after receipt. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders."
Requests for redemption must include: (a) original signatures of each
registered owner exactly as the shares are registered; (b) the Fund and the
account number of shares to be redeemed; (c) share certificates, either properly
endorsed or accompanied by a duly executed stock power, for the shares to be
redeemed if such certificates have been issued and the shares are not in the
custody of the Transfer Agent; (d) signature guarantees, as described below; and
(e) any additional documents that may be required for redemption by
corporations, partnerships, trusts or other entities. The burden is on the
shareholder to inquire as to whether any additional documentation is required.
Any request not in proper form may be rejected and in such case must be renewed
in writing.
In addition to these requirements, shareholders who have invested in a fund to
establish an IRA, should include the following information along with a written
request for either partial or full liquidation of fund shares: (a) a statement
as to whether or not the shareholder has attained age 59- 1/2; and (b) a
statement as to whether or not the shareholder elects to have federal income tax
withheld from the proceeds of the liquidation.
REDEMPTIONS BY TELEPHONE. Shareholders may request a redemption by telephone.
If a shareholder does not wish to allow telephone redemptions by any person in
his account, he should decline that option on the account application. The
telephone redemption feature can be used only if: (a) the redemption proceeds
are to be mailed to the address of record or transferred electronically or wired
to the pre-authorized bank account; (b) there has been no change of address of
record on the account within the preceding 30 days; (c) the shares to be
redeemed are not in certificate form; (d) the person requesting the redemption
can provide proper identification information; and (e) the proceeds of the
redemption do not exceed $50,000. Accounts in AIM Distributors' prototype
retirement plans (such as IRA and IRA/SEP) or 403(b) plans are not eligible for
the telephone redemption option. AIM Distributors has made arrangements with
certain dealers and investment advisors to accept telephone instructions for the
redemption of shares. AIM Distributors reserves the right to impose conditions
on these dealers and investment advisors, including the condition that they
enter into agreements (which contain additional conditions with respect to the
redemption of shares) with AIM Distributors. The Transfer Agent and AIM
Distributors will not be liable for any loss, expense or cost arising out of any
telephone redemption request effected in accordance with the authorization set
forth in the appropriate form if they reasonably believe such request to be gen-
AFG 02/98
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<PAGE> 52
uine, but may in certain cases be liable for losses due to unauthorized or
fraudulent transactions if they do not follow reasonable procedures for
verification of telephone transactions. Such reasonable procedures may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction.
EXPEDITED REDEMPTIONS (AIM MONEY MARKET FUND ONLY). If a redemption order is
received prior to 11:30 a.m. Eastern Time, the redemption will be effective on
that day and AIM MONEY MARKET FUND will endeavor to transmit payment on that
same business day. If the redemption order is received after 11:30 a.m. and
prior to NYSE Close, the redemption will be made at the next determined net
asset value and payment will generally be transmitted on the next business day.
REDEMPTIONS BY CHECK (AIM TAX-EXEMPT CASH FUND and AIM Cash Reserve Shares of
AIM MONEY MARKET FUND). After completing the appropriate authorization form,
shareholders may use checks to effect redemptions from AIM TAX-EXEMPT CASH FUND
and the AIM Cash Reserve Shares of AIM MONEY MARKET FUND. This privilege does
not apply to retirement accounts or qualified plans. Checks may be drawn in any
amount of $250 or more. Checks drawn against insufficient shares in the account,
against shares held less than ten business days, or in amounts of less than the
applicable minimum will be returned to the payee. The payee of the check may
cash or deposit it in the same way as an ordinary bank check. When a check is
presented to the Transfer Agent for payment, the Transfer Agent will cause a
sufficient number of shares of such fund to be redeemed to cover the amount of
the check. Shareholders are entitled to dividends on the shares redeemed through
the day on which the check is presented to the Transfer Agent for payment.
TIMING AND PRICING OF REDEMPTION ORDERS. Shares of the various AIM Funds
(other than AIM MONEY MARKET FUND) are redeemed at their net asset value next
computed after a request for redemption in proper form (including signature
guarantees and other required documentation for written redemptions) is received
by the Transfer Agent, except that shares that are subject to a contingent
deferred sales charge, may be subject to the imposition of deferred sales
charges that will be deducted from the redemption proceeds. See "Multiple
Distribution System" and "Contingent Deferred Sales Charge Program for Large
Purchases." Orders for the redemption of shares received in proper form prior to
NYSE Close on any business day of an AIM Fund will be confirmed at the price
determined as of the close of that day. Orders received after NYSE Close will be
confirmed at the price determined on the next business day of an AIM Fund.
Redemptions of shares of AIM MONEY MARKET FUND received prior to 12:00 noon or
NYSE Close on any business day of the Fund will be confirmed at the price next
determined. It is the responsibility of the dealer to ensure that all orders are
transmitted on a timely basis. Any resulting loss from the dealer's failure to
submit a request for redemption within the prescribed time frame will be borne
by that dealer. Telephone redemption requests must be made by NYSE Close on any
business day of an AIM Fund and will be confirmed at the price determined as of
the close of that day. No AIM Fund will accept requests which specify a
particular date for redemption or which specify any special conditions.
Payment of the proceeds of redeemed shares is normally made within seven days
following the redemption date. However, in the event of a redemption of shares
purchased by check, the investor may be required to wait up to ten business days
before the redemption proceeds are sent. See "Terms and Conditions of Purchase
of the AIM Funds -- Timing of Purchase Orders." A charge for special handling
(such as wiring of funds or expedited delivery services) may be made by the
Transfer Agent. The right of redemption may not be suspended or the date of
payment upon redemption postponed except under unusual circumstances such as
when trading on the NYSE is restricted or suspended. Payment of the proceeds of
redemptions relating to shares for which checks sent in payment have not yet
cleared will be delayed until it is determined that the check has cleared, which
may take up to ten business days from the date that the check is received.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect the
investor, the AIM Funds, AIM Distributors, and their agents by verifying the
signature of each investor seeking to redeem, transfer, or exchange shares of an
AIM Fund. Examples of when signature guarantees are required are: (1)
redemptions by mail in excess of $50,000; (2) redemptions by mail if the
proceeds are to be paid to someone other than the name(s) in which the account
is registered; (3) written redemptions requesting proceeds to be sent to other
than the bank of record for the account; (4) redemptions requesting proceeds to
be sent to a new address or an address that has been changed within the past 30
days; (5) requests to transfer the registration of shares to another owner; (6)
telephone exchange and telephone redemption authorization forms; (7) changes in
previously designated wiring or electronic funds transfer instructions; and (8)
written redemptions or exchanges of shares previously reported as lost, whether
or not the redemption amount is under $50,000 or the proceeds are to be sent to
the address of record. These requirements may be waived or modified upon notice
to shareholders.
Acceptable guarantors include banks, broker-dealers, credit unions, national
securities exchanges, savings associations and any other organization, provided
that such institution or organization qualifies as an "eligible guarantor
institution" as that term is defined in rules adopted by the Securities and
Exchange Commission ("SEC"), and further provided that such guarantor
institution is listed in one of the reference guides contained in the Transfer
Agent's current Signature Guarantee Standards and Procedures, such as certain
domestic banks, credit unions, securities dealers, or securities exchanges. The
Transfer Agent will also accept signatures with either: (1) a signature
guaranteed with a medallion stamp of the STAMP Program, or (2) a signature
guaranteed with a medallion stamp of the NYSE Medallion Signature Program,
provided that in either event, the amount of the transaction involved does not
exceed
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the surety coverage amount indicated on the medallion. For information regarding
whether a particular institution or organization qualifies as an "eligible
guarantor institution," an investor should contact the Client Services
Department of AFS.
REINSTATEMENT PRIVILEGE (CLASS A SHARES ONLY). Within 90 days of a redemption,
a shareholder may invest all or part of the redemption proceeds in Class A
shares of any AIM Fund at the net asset value next computed after receipt by the
Transfer Agent of the funds to be reinvested; provided, however, if the
redemption was made from Class A shares of either AIM LIMITED MATURITY TREASURY
FUND or AIM TAX-FREE INTERMEDIATE FUND, the reinvested proceeds will be subject
to the difference in sales charge between the shares redeemed and the shares the
proceeds are reinvested in. The shareholder must ask the Transfer Agent for such
privilege at the time of reinvestment. A realized gain on the redemption is
taxable, and reinvestment may alter any capital gains payable. If there has been
a loss on the redemption and shares of the same fund are repurchased, all of the
loss may not be tax deductible, depending on the timing and amount reinvested.
Under the Code, if the redemption proceeds of fund shares on which a sales
charge was paid are reinvested in (or exchanged for) shares of another AIM Fund
at a reduced sales charge within 90 days of the payment of the sales charge, the
shareholder's basis in the fund shares redeemed may not include the amount of
the sales charge paid, thereby reducing the loss or increasing the gain
recognized from the redemption; however, the shareholder's basis in the fund
shares purchased will include the sales charge. Each AIM Fund may amend, suspend
or cease offering this privilege at any time as to shares redeemed after the
date of such amendment, suspension or cessation. This privilege may only be
exercised once each year by a shareholder with respect to each AIM Fund.
Shareholders who are assessed a contingent deferred sales charge in connection
with the redemption of Class A shares and who subsequently reinvest a portion or
all of the value of the redeemed shares in Class A shares of any AIM Fund within
90 days after such redemption may do so at net asset value if such privilege is
claimed at the time of reinvestment. Such reinvested proceeds will not be
subject to either a front-end sales charge at the time of reinvestment or an
additional contingent deferred sales charge upon subsequent redemption. In order
to exercise this reinvestment privilege, the shareholder must notify the
Transfer Agent of his or her intent to do so at the time of reinvestment. This
reinvestment privilege does not apply to Class B or Class C shares.
- --------------------------------------------------------------------------------
DETERMINATION OF NET ASSET VALUE
The net asset value per share (or share price) of each AIM Fund is determined
as of 4:00 p.m. Eastern Time (12:00 noon Eastern Time and NYSE Close with
respect to AIM MONEY MARKET FUND), on each "business day" of a fund as
previously defined. In the event the NYSE closes early (i.e. before 4:00 p.m.
Eastern Time) on a particular day, the net asset value of an AIM Fund's share
will be determined as of the close of the NYSE on such day. For purposes of
determining net asset value per share, futures and options contracts generally
will be valued 15 minutes after the close of trading of the NYSE.The net asset
value per share is calculated by subtracting a class' liabilities from its
assets and dividing the result by the total number of class shares outstanding.
The determination of net asset value per share is made in accordance with
generally accepted accounting principles. Among other items, liabilities include
accrued expenses and dividends payable, and total assets include portfolio
securities valued at their market value, as well as income accrued but not yet
received. Securities for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the supervision of
the fund's officers and in accordance with methods which are specifically
authorized by its governing Board of Directors or Trustees. Short-term
obligations with maturities of 60 days or less, and the securities held by the
Money Market Funds, are valued at amortized cost as reflecting fair value. AIM
HIGH INCOME MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF
CONNECTICUT and AIM TAX-FREE INTERMEDIATE FUND value variable rate securities
that have an unconditional demand or put feature exercisable within seven days
or less at par, which reflects the market value of such securities.
Generally, trading in foreign securities, corporate bonds, U.S. Government
securities and money market instruments is substantially completed each day at
various times prior to the close of the NYSE. The values of such securities used
in computing the net asset value of an AIM Fund's shares are determined as of
such times. Foreign currency exchange rates are also generally determined prior
to the close of the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which the
values of the securities are determined and the close of the NYSE which will not
be reflected in the computation of an AIM Fund's net asset value. If events
materially affecting the value of such securities occur during such period, then
these securities will be valued at their fair value as determined in good faith
by or under the supervision of the Board of Directors or Trustees of the
applicable AIM Fund.
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- --------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
DIVIDENDS AND DISTRIBUTIONS
Each AIM Fund's policy regarding the payment of dividends and distributions is
set forth below.
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
OF NET OF NET
DIVIDENDS FROM REALIZED REALIZED
NET INVESTMENT SHORT-TERM LONG-TERM
FUND INCOME CAPITAL GAINS CAPITAL GAINS
---- -------------- ------------- -------------
<S> <C> <C> <C>
AIM ADVISOR FLEX FUND..................... declared and paid quarterly quarterly annually
AIM ADVISOR INTERNATIONAL VALUE FUND...... declared and paid annually annually annually
AIM ADVISOR LARGE CAP VALUE FUND.......... declared and paid quarterly quarterly annually
AIM ADVISOR MULTIFLEX FUND................ declared and paid quarterly quarterly annually
AIM ADVISOR REAL ESTATE FUND.............. declared and paid quarterly quarterly annually
AIM AGGRESSIVE GROWTH FUND................ declared and paid annually annually annually
AIM ASIAN GROWTH FUND..................... declared and paid annually annually annually
AIM BALANCED FUND......................... declared and paid quarterly annually annually
AIM BLUE CHIP FUND........................ declared and paid annually annually annually
AIM CAPITAL DEVELOPMENT FUND.............. declared and paid annually annually annually
AIM CHARTER FUND.......................... declared and paid quarterly annually annually
AIM CONSTELLATION FUND.................... declared and paid annually annually annually
AIM EUROPEAN DEVELOPMENT FUND............. declared and paid annually annually annually
AIM GLOBAL AGGRESSIVE GROWTH FUND......... declared and paid annually annually annually
AIM GLOBAL GROWTH FUND.................... declared and paid annually annually annually
AIM GLOBAL INCOME FUND.................... declared daily; paid monthly annually annually
AIM GLOBAL UTILITIES FUND................. declared daily; paid monthly annually annually
AIM HIGH INCOME MUNICIPAL FUND............ declared daily; paid monthly annually annually
AIM HIGH YIELD FUND....................... declared daily; paid monthly annually annually
AIM INCOME FUND........................... declared daily; paid monthly annually annually
AIM INTERMEDIATE GOVERNMENT FUND.......... declared daily; paid monthly annually annually
AIM INTERNATIONAL EQUITY FUND............. declared and paid annually annually annually
AIM LIMITED MATURITY TREASURY FUND........ declared daily; paid monthly annually annually
AIM MONEY MARKET FUND..................... declared daily; paid monthly at least annually annually
AIM MUNICIPAL BOND FUND................... declared daily; paid monthly annually annually
AIM SELECT GROWTH FUND.................... declared and paid annually annually annually
AIM TAX-EXEMPT BOND FUND OF CONNECTICUT... declared daily; paid monthly annually annually
AIM TAX-EXEMPT CASH FUND.................. declared daily; paid monthly at least annually annually
AIM TAX-FREE INTERMEDIATE FUND............ declared daily; paid monthly annually annually
AIM VALUE FUND............................ declared and paid annually annually annually
AIM WEINGARTEN FUND....................... declared and paid annually annually annually
</TABLE>
In determining the amount of capital gains, if any, available for
distribution, net capital gains are offset against available net capital losses,
if any, carried forward from previous fiscal periods.
All dividends and distributions of an AIM Fund are automatically reinvested on
the payment date in full and fractional shares of such fund, unless the
shareholder has made an alternate election as to the method of payment.
Dividends and distributions attributable to a class are reinvested in additional
shares of such class, absent an election by a shareholder to receive cash or to
have such dividends and distributions reinvested in like shares of another
Multiple Class Fund, to the extent permitted. For funds that do not declare a
dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the ex-dividend date. For funds that declare
a dividend daily, such dividends and distributions will be reinvested at the net
asset value per share determined on the payable date. Shareholders may elect, by
written notice to the Transfer Agent, to receive such distributions, or the
dividend portion thereof, in cash, or to invest such dividends and distributions
in shares of another fund in the AIM Funds; provided that (i) dividends and
distributions attributable to Class B shares may only be reinvested in Class B
shares, (ii) dividends and distributions attributable to Class C shares may only
be reinvested in Class C shares (iii) dividends and distributions attributable
to Class A shares may not be reinvested in Class B or Class C shares, and (iv)
dividends and distributions attributable to the AIM Cash Reserve Shares of AIM
MONEY MARKET FUND may not be reinvested in the Class A shares of that Fund or in
any Class B or Class C shares. Investors who have not previously selected such a
reinvestment option on the account application form may contact the Transfer
Agent at any time to obtain a form to authorize such reinvestments in another
AIM Fund. Such reinvestments into the AIM Funds are not subject to sales
charges, and shares so purchased are automatically credited to the account of
the shareholder.
Dividends on Class B and Class C shares are expected to be lower than those
for Class A shares or AIM Cash Reserve Shares because of higher distribution
fees paid by Class B and Class C shares. Dividends on all shares may also be
affected by other class-specific expenses.
Changes in the form of dividend and distribution payments may be made by the
shareholder at any time by notice to the Transfer Agent and are effective as to
any subsequent payment if such notice is received by the Transfer Agent prior to
the record date of such
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<PAGE> 55
payment. Any dividend and distribution election remains in effect until the
Transfer Agent receives a revised written election by the shareholder.
Any dividend or distribution paid by a fund which does not declare dividends
daily has the effect of reducing the net asset value per share on the
ex-dividend date by the amount of the dividend or distribution. Therefore, a
dividend or distribution declared shortly after a purchase of shares by an
investor would represent, in substance, a return of capital to the shareholder
with respect to such shares even though it would be subject to income taxes, as
discussed below.
TAX MATTERS
Each AIM Fund has qualified and intends to qualify for treatment as a
regulated investment company under Subchapter M of the Code. As long as a fund
qualifies for this tax treatment, it is not subject to federal income taxes on
net investment income and capital gains that are distributed to shareholders.
Each fund, for purposes of determining taxable income, distribution requirements
and other requirements of Subchapter M, is treated as a separate corporation.
Therefore, no fund may offset its gains against another fund's losses and each
fund must individually comply with all of the provisions of the Code which are
applicable to its operations.
TAX TREATMENT OF DISTRIBUTIONS -- GENERAL. Because each AIM Fund intends to
distribute substantially all of its net investment income and net realized
capital gains to its shareholders, it is not expected that any such fund will be
required to pay any federal income tax. Each AIM Fund also intends to meet the
distribution requirements of the Code to avoid the imposition of a
non-deductible 4% excise tax calculated as a percentage of certain undistributed
amounts of taxable ordinary income and capital gain net income. Nevertheless,
shareholders normally are subject to federal income taxes, and any applicable
state and local income taxes, on the dividends and distributions received by
them from a fund whether in the form of cash or additional shares of a fund,
except for tax-exempt dividends paid by AIM HIGH INCOME MUNICIPAL FUND, AIM
MUNICIPAL BOND FUND, AIM TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT
CASH FUND, and AIM TAX-FREE INTERMEDIATE FUND (the "Tax-Exempt Funds") which are
exempt from federal tax. Dividends paid by a fund (other than capital gain
distributions) may qualify for the federal 70% dividends received deduction for
corporate shareholders to the extent of the qualifying dividends received by the
fund on domestic common or preferred stock. It is not likely that dividends
received from AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ADVISOR REAL ESTATE
FUND, AIM ASIAN GROWTH FUND, AIM EUROPEAN DEVELOPMENT FUND, AIM GLOBAL
AGGRESSIVE GROWTH FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME 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 TAX-EXEMPT BOND FUND
OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND or AIM TAX-FREE INTERMEDIATE FUND will
qualify for this dividends received deduction. Shortly after the end of each
year, shareholders will receive information regarding the amount and federal
income tax treatment of all distributions paid during the year. Certain
dividends declared in October, November or December of a calendar year are
taxable to shareholders as though received on December 31 of that year if paid
to shareholders during January of the following calendar year. No gain or loss
will be recognized by shareholders upon the automatic conversion of Class B
shares of a Multiple Class Fund into Class A shares of such Fund. With respect
to tax-exempt shareholders, distributions from the Funds will not be subject to
federal income taxation to the extent permitted under the applicable tax-
exemption.
For each redemption of a fund's shares by a non-exempt shareholder, the fund
or the securities dealer effecting the transaction is required to file an
information return with the IRS.
TO AVOID BEING SUBJECT TO FEDERAL INCOME TAX WITHHOLDING AT THE RATE OF 31% ON
DIVIDENDS, DISTRIBUTIONS AND REDEMPTION PAYMENTS, SHAREHOLDERS OF A FUND MUST
FURNISH THE FUND WITH THEIR TAXPAYER IDENTIFICATION NUMBER AND CERTIFY UNDER
PENALTIES OF PERJURY THAT THE NUMBER PROVIDED IS CORRECT AND THAT THEY ARE NOT
SUBJECT TO BACKUP WITHHOLDING FOR ANY REASON.
Under existing provisions of the Code, nonresident alien individuals, foreign
partnerships and foreign corporations may be subject to federal income tax
withholding at a 30% rate on ordinary income dividends and distributions and
return of capital distributions. Under applicable treaty law, residents of
treaty countries may qualify for a reduced rate of withholding or a withholding
exemption.
DISTRIBUTIONS MAY BE SUBJECT TO TREATMENT UNDER FOREIGN, STATE OR LOCAL TAX
LAWS THAT DIFFERS FROM THE FEDERAL INCOME TAX CONSEQUENCES DISCUSSED HEREIN.
ADDITIONAL INFORMATION ABOUT TAXES IS SET FORTH IN THE STATEMENT OF ADDITIONAL
INFORMATION.
TAX-EXEMPT FUNDS -- SPECIAL TAX INFORMATION. Shareholders will not be required
to include the "exempt-interest" portion of dividends paid by the Tax-Exempt
Funds in their gross income for federal income tax purposes. However,
shareholders will be required to report the receipt of exempt-interest dividends
and other tax-exempt interest on their federal income tax returns. Moreover,
exempt-interest dividends from the Tax-Exempt Funds may be subject to state
income taxes, may give rise to a federal alternative minimum tax liability, may
affect the amount of social security benefits subject to federal income tax, may
affect the deductibility of interest on certain indebtedness of the shareholder,
and may have other collateral federal income tax consequences. The Tax-Exempt
Funds may invest in Municipal Securities the interest on which will constitute
an item of tax preference and which therefore could give rise to a federal
alternative minimum tax liability for shareholders, and may invest up to 20% of
their net assets in such securities and
AFG 02/98
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<PAGE> 56
other taxable securities. For additional information concerning the alternative
minimum tax and certain collateral tax consequences of the receipt of
exempt-interest dividends, see the Statements of Additional Information
applicable to the Tax-Exempt Funds.
The Tax-Exempt Funds may pay dividends to shareholders which are taxable, but
will endeavor to avoid investments which would result in taxable dividends. The
percentage of dividends which constitute exempt-interest dividends, and the
percentage thereof (if any) which constitute an item of tax preference, will be
determined annually. This percentage may differ from the actual percentages for
any particular day.
To the extent that dividends are derived from taxable investments or net
realized short-term capital gains, they will constitute ordinary income for
federal income tax purposes, whether received in cash or additional shares.
Distributions of net long-term capital gains will be taxable as long-term
capital gains, whether received in cash or additional shares, and regardless of
the length of time a particular shareholder may have held his shares.
From time to time, proposals have been introduced before Congress that would
have the effect of reducing or eliminating the federal tax exemption on
Municipal Securities. If such a proposal were enacted, the ability of the
Tax-Exempt Funds to pay exempt-interest dividends might be adversely affected.
AIM INTERMEDIATE GOVERNMENT FUND and AIM LIMITED MATURITY TREASURY
FUND -- SPECIAL TAX INFORMATION. Certain states exempt from state income taxes
dividends paid by mutual funds out of interest on U.S. Treasury and certain
other U.S. government obligations, and investors should consult with their own
tax advisors concerning the availability of such exemption.
AIM ADVISOR INTERNATIONAL VALUE FUND, AIM ASIAN GROWTH FUND, AIM EUROPEAN
DEVELOPMENT FUND, AIM INTERNATIONAL EQUITY FUND, AIM GLOBAL AGGRESSIVE GROWTH
FUND, AIM GLOBAL GROWTH FUND, AIM GLOBAL INCOME FUND AND AIM GLOBAL UTILITIES
FUND -- SPECIAL TAX INFORMATION. For taxable years in which it is eligible to do
so, each of these funds may elect to pass through to shareholders credits for
foreign taxes paid. If the fund makes such an election, a shareholder who
receives a distribution (1) will be required to include in gross income his
proportionate share of foreign taxes allocable to the distribution and (2) may
claim a credit or deduction for such share for his taxable year in which the
distribution is received, subject to the general limitations imposed on the
allowance of foreign tax credits and deductions. Shareholders should also note
that certain gains or losses attributable to fluctuations in exchange rates or
foreign currency forward contracts may increase or decrease the amount of income
of the fund available for distribution to shareholders, and should note that if
such losses exceed other income during a taxable year, the fund would not be
able to pay ordinary income dividends.
- --------------------------------------------------------------------------------
GENERAL INFORMATION
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, serves as custodian for the
portfolio securities and cash of the AIM Funds other than AIM HIGH INCOME
MUNICIPAL FUND, AIM MUNICIPAL BOND FUND, AIM LIMITED MATURITY TREASURY FUND, AIM
TAX-EXEMPT BOND FUND OF CONNECTICUT, AIM TAX-EXEMPT CASH FUND and AIM TAX-FREE
INTERMEDIATE FUND, for which The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, serves as custodian. Chase Bank of Texas, N.A.,
P.O. Box 2558, Houston, Texas 77252-8084, serves as Sub-Custodian for retail
purchases of the AIM Funds.
A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas 77210-4739, a wholly
owned subsidiary of AIM, serves as each AIM Fund's transfer agent and dividend
payment agent.
LEGAL COUNSEL. The law firm of Ballard Spahr Andrews & Ingersoll, LLP,
Philadelphia, Pennsylvania, serves as counsel to the AIM Funds and passes upon
legal matters.
SHAREHOLDER INQUIRIES. Shareholder inquiries concerning their accounts should
be directed to an A I M Fund Services, Inc. Client Services Representative by
calling (800) 959-4246. The Transfer Agent may impose certain copying charges
for requests for copies of shareholder account statements and other historical
account information older than the current year and the immediately preceding
year.
YEAR 2000 COMPLIANCE PROJECT. In providing services to the Trust, AIM
Management and its subsidiaries rely on both internal software systems as well
as external software systems provided by third parties (the "Software"). Many
software systems in use today are unable to distinguish between the year 2000
from the year 1900. This defect if not cured will likely adversely affect the
services that AIM Management, its subsidiaries and other service providers to
the Trust provide the Trust and its shareholders.
To address this issue, AIM Management and its subsidiaries, together with
independent technology consultants, are undertaking a comprehensive Year 2000
Compliance Project (the "Project"). The Project consists of three phases, namely
(i) inventorying every software application in use at AIM Management and its
subsidiaries, as well as remote, third party software systems on which AIM
Management and its subsidiaries rely, (ii) identifying those applications that
may not function properly after December 31, 1999, and (iii) correcting and
subsequently testing those applications that may not function properly after
December 31, 1999. Phases (i) and (ii) are complete and Phase (iii) has
commenced. The Project is scheduled to be completed during the fourth quarter of
1998. Software applications acquired by AIM Management and its subsidiaries
after completion of the Project will be reviewed to confirm Year 2000 compliance
upon installation.
AFG 02/98
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<PAGE> 57
OTHER INFORMATION. This Prospectus sets forth basic information that investors
should know about the fund(s) named on the cover page prior to investing.
Recipients of this Prospectus will be provided with a copy of the annual report
of the fund(s) to which this Prospectus relates, upon request and without
charge. If several members of a household own shares of the same fund, only one
annual or semi-annual report will be mailed to that address. To receive
additional copies, please call (800) 347-4246, or write to A I M Distributors,
Inc., P.O. Box 4739, Houston, Texas 77210-4739. A Statement of Additional
Information has been filed with the SEC and is available upon request and
without charge, by writing or calling AIM Distributors. The SEC maintains a Web
site at http://www.sec.gov that contains the Statement of Additional
Information, material incorporated by reference, and other information regarding
the Fund. This Prospectus omits certain information contained in the
registration statement filed with the SEC. Copies of the registration statement,
including items omitted from this Prospectus, may be obtained from the SEC by
paying the charges prescribed under its rules and regulations.
AFG 02/98
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APPENDIX A
- --------------------------------------------------------------------------------
DESCRIPTION OF MONEY MARKET INSTRUMENTS
The following list does not purport to be an exhaustive list of all Money
Market Instruments, and the Funds reserve the right to invest in Money Market
Instruments other than those listed below:
U.S. GOVERNMENT DIRECT OBLIGATIONS -- Bills, notes and bonds issued by the U.S.
Treasury.
U.S. GOVERNMENT AGENCIES SECURITIES -- Certain federal agencies such as the
Government National Mortgage Association have been established as
instrumentalities of the U.S. Government to supervise and finance certain types
of activities. Issues of these agencies, while not direct obligations of the
U.S. Government, are either backed by the full faith and credit of the United
States or are guaranteed by the Treasury or supported by the issuing agencies'
right to borrow from the Treasury.
BANKERS' ACCEPTANCES -- A bill of exchange or time draft drawn on and accepted
by a commercial bank. It is used by corporations to finance the shipment and
storage of goods and to furnish dollar exchange. Maturities are generally six
months or less.
CERTIFICATES OF DEPOSIT -- A negotiable interest-bearing instrument with a
specific maturity. Certificates of deposit are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market, prior to maturity.
TIME DEPOSITS -- A non-negotiable receipt issued by a bank in exchange for the
deposit of funds. Like a certificate of deposit, it earns a specified rate of
interest over a definite period of time; however, it cannot be traded in the
secondary market.
COMMERCIAL PAPER -- The term used to designate unsecured short-term promissory
notes issued by corporations and other entities. Maturities on these issues vary
from a few days to nine months.
REPURCHASE AGREEMENTS -- A repurchase agreement is a contractual undertaking
whereby the seller of securities (limited to U.S. Government securities,
including securities issued or guaranteed by the U.S. Treasury or the various
agencies and instrumentalities of the U.S. Government, including mortgage-backed
securities issued by U.S. Government agencies) agrees to repurchase the
securities at a specified price on a future date determined by negotiations.
MASTER NOTES -- Unsecured demand notes that permit investment of fluctuating
amounts of money at varying rates of interest pursuant to arrangements with
issuers who meet the quality criteria of a Fund. The interest rate on a master
note may fluctuate based upon changes in specified interest rates or be reset
periodically according to a prescribed formula or may be a set rate. Although
there is no secondary market in master notes, if such notes have a demand
feature, the payee may demand payment of the principal amount of the note on
relatively short notice.
VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain instruments issued, guaranteed
or sponsored by the U.S. Government or its agencies, state and local government
issuers, and certain debt instruments issued by domestic banks or corporations,
may carry variable or floating rates of interest. Such instruments bear interest
at rates which are not fixed, but which vary with changes in specified market
rates or indices, such as a Federal Reserve composite index.
A-22
<PAGE> 59
APPENDIX B
- --------------------------------------------------------------------------------
DESCRIPTION OF OBLIGATIONS ISSUED OR GUARANTEED
BY U.S. GOVERNMENT AGENCIES OR INSTRUMENTALITIES
AIM INTERMEDIATE GOVERNMENT FUND may invest in "Agency Securities," as defined
in the Prospectus, including some or all of those listed below. The following
list does not purport to be an exhaustive list of all Agency Securities, and the
Fund reserves the right to invest in Agency Securities other than those listed
below.
EXPORT-IMPORT BANK CERTIFICATES -- are certificates of beneficial interest and
participation certificates issued and guaranteed by the Export-Import Bank of
the United States.
FEDERAL FARM CREDIT SYSTEM NOTES AND BONDS -- are bonds issued by a
cooperatively owned, nationwide system of banks and associations supervised by
the Farm Credit Administration, an independent agency of the U.S. Government.
FEDERAL HOME LOAN BANK NOTES AND BONDS -- are notes and bonds issued by the
Federal Home Loan Bank System.
FHA DEBENTURES -- are debentures issued by the Federal Housing Administration
of the U.S. Government.
FHA INSURED NOTES -- are bonds issued by the Farmers Home Administration of
the U.S. Government.
FEDERAL HOME LOAN MORTGAGE CORPORATION ("FHLMC") BONDS -- are bonds issued and
guaranteed by FHLMC, a corporate instrumentality of the U.S. Government. The
Federal Home Loan Banks own all the capital stock of FHLMC, which obtains its
funds by selling mortgages (as well as participation interests in the mortgages)
and by borrowing funds through the issuance of debentures and otherwise.
FHLMC PARTICIPATION CERTIFICATES OR "FREDDIE MACS" -- represent undivided
interests in specified groups of conventional mortgage loans (and/or
participation interests in those loans) underwritten and owned by FHLMC. At
least 95% of the aggregate principal balance of the whole mortgage loans and/or
participations in a group formed by FHLMC typically consist of single-family
mortgage loans, and not more than 5% consists of multi-family loans. FHLMC
Participation Certificates are not guaranteed by, and do not constitute a debt
or obligation of, the U.S. Government or any Federal Home Loan Bank. FHLMC
Participation Certificates are issued in fully registered form only, in original
unpaid principal balances of $25,000, $100,000, $200,000, $500,000, $1 million
and $5 million. FHLMC guarantees to each registered holder of a Participation
Certificate, to the extent of such holder's pro rata share (i) the timely
payment of interest accruing at the applicable certificate rate on the unpaid
principal balance outstanding on the mortgage loans, and (ii) collection of all
principal on the mortgage loans without any offset or deductions. Pursuant to
these guaranties, FHLMC indemnifies holders of Participation Certificates
against any reduction in principal by reason of charges for property repairs,
maintenance, and foreclosure.
FEDERAL NATIONAL MORTGAGE ASSOCIATION ("FNMA") BONDS -- are bonds issued and
guaranteed by the Federal National Mortgage Association, a federally chartered
and privately-owned corporation.
FNMA PASS-THROUGH CERTIFICATES OR "FANNIE MAES" -- are mortgage pass-through
certificates issued and guaranteed by FNMA. FNMA Certificates represent a
fractional undivided ownership interest in a pool of mortgage loans either
provided from FNMA's own portfolio or purchased from primary lenders. The
mortgage loans included in the pool are conventional, insured by the Federal
Housing Administration or guaranteed by the Veterans Administration. FNMA
Certificates are not backed by, nor entitled to, the full faith and credit of
the U.S. Government.
Loans not provided from FNMA's own portfolio are purchased only from primary
lenders that satisfy certain criteria developed by FNMA, including depth of
mortgage origination experience, servicing experience and financial capacity.
FNMA may purchase an entire loan pool from a single lender, and issue
Certificates backed by that loan pool alone, or may package a pool made up of
loans purchased from various lenders.
Various types of mortgage loans, and loans with varying interest rates, may be
included in a single pool, although each pool will consist of mortgage loans
related to one-family or two-to-four family residential properties.
Substantially all FNMA mortgage pools currently consist of fixed interest rate
and growing equity mortgage loans, although FNMA mortgage pools may also consist
of adjustable interest rate mortgage loans or other types of mortgage loans.
Each mortgage loans must conform to FNMA's published requirements or guidelines
with respect to maximum principal amount, loan-to-value ratio, loan term,
underwriting standards and insurance coverage.
All mortgage loans are held by FNMA as trustee pursuant to a trust indenture
for the benefit of Certificate holders. The trust indenture gives FNMA
responsibility for servicing or administering the loans in a pool. FNMA
contracts with the lenders or other servicing institutions to perform all
services and duties customary to the servicing of mortgages, as well as duties
specifically prescribed by FNMA, and under FNMA supervision. FNMA may remove
service providers for cause.
The pass-through rate on FNMA Certificates is the lowest annual interest rate
borne by an underlying mortgage loan in the pool, less a fee to FNMA as
compensation for servicing and for FNMA's guarantee. Lenders servicing the
underlying mortgage loans receive as compensation a portion of the fee paid to
FNMA, the excess yields on pooled loans with coupon rates above the lowest rate
borne by any mortgage loan in the pool and certain other amounts collected, such
as late charges.
The minimum size of a FNMA pool is $1 million of mortgage loans. Registered
holders purchase Certificates in amounts not less than $25,000.
A-23
<PAGE> 60
FNMA Certificates are marketed by the servicing lender banks, usually through
securities dealers. The lender of a single lender pool typically markets all
Certificates based on that pool, and lenders of multiple lender pools market
Certificates based on a pro rata interest in the aggregate pool. The amounts of
FNMA Certificates currently outstanding is limited.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION ("GNMA") CERTIFICATES OR "GINNIE
MAES" -- are mortgage-backed securities which represent a partial ownership
interest in a pool of mortgage loans issued by lenders such as mortgage bankers,
commercial banks and savings and loan associations. Each mortgage loan included
in the pool is either insured by the Federal Housing Administration or
guaranteed by the Veterans Administration. A "pool" or group of such mortgages
is assembled, and, after being approved by GNMA, is offered to investors through
securities dealers. GNMA is a U.S. Government corporation within the Department
of Housing and Urban Development.
The Portfolio will purchase only GNMA Certificates of the "modified
pass-through" type, which entitle the holder to receive its proportionate share
of all interest and principal payments owed on the mortgage pool, net of fees
paid to the issuer and GNMA, regardless of whether or not the mortgagor actually
makes the payment. GNMA Certificates differ from bonds in that the principal is
paid back monthly by the borrower over the term of the loan rather than returned
in a lump sum at maturity. Payment of principal of and interest on GNMA
Certificates of the "modified pass-through" type is guaranteed by GNMA and
backed by the full faith and credit of the U.S. Government.
The average life of a GNMA Certificate is likely to be substantially less than
the original maturity of the mortgage pools underlying the securities.
Prepayments of principal by mortgagors and mortgage foreclosures will usually
result in the return on the greater part of principal invested far in advance of
the maturity of the mortgages in the pool. Foreclosures impose no risk to
principal investment because of the GNMA guarantee.
As the prepayment rates of individual mortgage pools will vary widely, it is
not possible to accurately predict the average life of a particular issue of
GNMA Certificates. However, statistics published by the FHA indicate that the
average life of a single-family dwelling mortgage with 25- to 30-year maturity,
the type of mortgage which backs the vast majority of GNMA Certificates, is
approximately 12 years. It is therefore customary practice to treat GNMA
Certificates as 30-year mortgage-backed securities which prepay fully in the
twelfth year.
As a consequence of the fees paid to GNMA and the issuer of GNMA Certificates,
the coupon rate of interest of GNMA Certificates is lower than the interest paid
on the VA-guaranteed or FHA-insured mortgages underlying the Certificates.
The yield which will be earned on GNMA Certificates may vary from their coupon
rates for the following reasons: (i) Certificates may be issued at a premium or
discount, rather than at par; (ii) Certificates may trade in the secondary
market at a premium or discount after issuance; (iii) interest is earned and
compounded monthly which has the effect of raising the effective yield earned on
the Certificates; and (iv) the actual yield of each Certificate is affected by
the prepayment of mortgages included in the mortgage pool underlying the
Certificates and the rate at which principal so prepaid is reinvested. In
addition, prepayment of mortgages included in the mortgage pool underlying a
GNMA Certificate purchased at a premium may result in a loss to the Portfolio.
Due to the large amount of GNMA Certificates outstanding and active
participation in the secondary market by securities dealers and investors, GNMA
Certificates are highly liquid instruments. Prices of GNMA Certificates are
readily available from securities dealers and depend on, among other things, the
level of market rates, the Certificate's coupon rate and the prepayment
experience of the pool of mortgages backing each Certificate.
GENERAL SERVICES ADMINISTRATION PARTICIPATION CERTIFICATES -- are
participation certificates issued by the General Services Administration of the
U.S. Government.
MARITIME ADMINISTRATION BONDS -- are bonds issued and provided by the
Department of Transportation of the U.S. Government.
NEW COMMUNITIES DEBENTURES -- are debentures issued in accordance with the
provisions of Title IV of the Housing and Urban Development Act of 1968, as
supplemented and extended by Title VII of the Housing and Urban Development Act
of 1970, the payment of which is guaranteed by the U.S. Government.
PUBLIC HOUSING NOTES AND BONDS -- are short-term project notes and long-term
bonds issued by public housing and urban renewal agencies in connection with
programs administered by the Department of Housing and Urban Development of the
U.S. Government, the payment of which is secured by the U.S. Government.
SBA DEBENTURES -- are debentures fully guaranteed as to principal and interest
by the Small Business Administration of the U.S. Government.
SLMA DEBENTURES -- are debentures backed by the Student Loan Marketing
Association.
TITLE XI BONDS -- are bonds issued in accordance with the provisions of Title
XI of the Merchant Marine Act of 1936, as amended, the payment of which is
guaranteed by the U.S. Government.
WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY BONDS -- are bonds issued by
the Washington Metropolitan Area Transit Authority and are guaranteed by the
Secretary of Transportation of the U.S. Government.
A-24
<PAGE> 61
APPENDIX C
- --------------------------------------------------------------------------------
DESCRIPTIONS OF RATING CATEGORIES
The following are descriptions of ratings assigned by Moody's Investors
Service, Inc. ("Moody's") and Standard and Poor's Ratings Services ("S&P") to
certain debt securities in which AIM HIGH YIELD FUND and AIM INCOME FUND may
invest. See the Statement of Additional Information for descriptions of other
Moody's and S&P rating categories and those of other rating agencies.
MOODY'S: Aaa -- Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt-edge." 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 -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high grade bonds. These 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 risks appear somewhat larger than in Aaa
securities.
A -- Bonds which are rated A possess many favorable investment attributes and
are to be considered as 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 -- Bonds which are rated Baa are considered as 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 -- Bonds which are rated Ba are judged to have speculative elements, 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 -- Bonds which are rated 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.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca -- Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
S&P: AAA -- Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA -- Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A -- Debt rated 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 -- Debt rated BBB is regarded as having an 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 as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. BB indicates the lowest degree of speculation and
C the highest. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or large exposures
to adverse conditions.
A-25
<PAGE> 62
APPLICATION INSTRUCTIONS
SOCIAL SECURITY OR TAXPAYER ID NUMBER. Investors should make sure that the
social security number or taxpayer identification number (TIN) which appears in
Section 1 of the Application complies with the following guidelines:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE SOCIAL SECURITY GIVE TAXPAYER I.D.
ACCOUNT TYPE NUMBER OF: ACCOUNT TYPE NUMBER OF:
<S> <C> <C> <C>
Individual Individual Trust, Estate, Pension Trust, Estate, Pension
Plan Trust Plan Trust and not
personal TIN of fiduciary
Joint Individual First individual listed in the
"Account Registration" portion
of the Application
Unif. Gifts to Minor Corporation, Partnership, Corporation, Partnership,
Minors/Unif. Other Organization Other Organization
Transfers to Minors
Legal Guardian Ward, Minor or
Incompetent
Sole Proprietor Owner of Business Broker/Nominee Broker/Nominee
</TABLE>
- --------------------------------------------------------------------------------
Applications without a certified TIN will not be accepted unless the applicant
is a nonresident alien, foreign corporation or foreign partnership and has
attached a completed IRS Form W-8.
BACKUP WITHHOLDING. Each AIM Fund, and other payers, must, according to IRS
regulations, withhold 31% of redemption payments and reportable dividends
(whether paid or accrued) in the case of any shareholder who fails to provide
the Fund with a TIN and a certification that he is not subject to backup
withholding.
An investor is subject to backup withholding if:
(1) the investor fails to furnish a correct TIN to the Fund, or
(2) the IRS notifies the Fund that the investor furnished an incorrect TIN, or
(3) the investor is notified by the IRS that the investor is subject to backup
withholding because the investor failed to report all of the interest and
dividends on such investor's tax return (for reportable interest and
dividends only), or
(4) the investor fails to certify to the Fund that the investor is not subject
to backup withholding under (3) above (for reportable interest and
dividend accounts opened after 1983 only), or
(5) the investor does not certify his TIN. This applies only to reportable
interest, dividend, broker or barter exchange accounts opened after 1983,
or broker accounts considered inactive during 1983.
Except as explained in (5) above, other reportable payments are subject to
backup withholding only if (1) or (2) above applies.
Certain payees and payments are exempt from backup withholding and information
reporting and such entities should check the box "Exempt from Backup
Withholding" on the Application. A complete listing of such exempt entities
appears in the Instructions for the Requester of Form W-9 (which can be obtained
from the IRS) and includes, among others, the following:
- - a corporation
- - an organization exempt from tax under Section 501(a), an individual retirement
plan (IRA), or a custodial account under Section 403(b)(7)
- - the United States or any of its agencies or instrumentalities
- - a state, the District of Columbia, a possession of the United States, or any
of their political subdivisions or instrumentalities
- - a foreign government or any of its political subdivisions, agencies or
instrumentalities
- - an international organization or any of its agencies or instrumentalities
- - a foreign central bank of issue
- - a dealer in securities or commodities required to register in the U.S. or a
possession of the U.S.
- - a futures commission merchant registered with the Commodity Futures Trading
Commission
- - a real estate investment trust
- - an entity registered at all times during the tax year under the Investment
Company Act of 1940
- - a common trust fund operated by a bank under Section 584(a)
- - a financial institution
- - a middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List
- - a trust exempt from tax under Section 664 or described in Section 4947
Investors should contact the IRS if they have any questions concerning
entitlement to an exemption from backup withholding.
NOTE: Section references are to sections of the Code.
IRS PENALTIES -- Investors who do not supply the AIM Funds with a correct TIN
will be subject to a $50 penalty imposed by the IRS unless such failure is due
to reasonable cause and not willful neglect. If an investor falsifies
information on this form or makes any other false statement resulting in no
backup withholding on an account which should be subject to backup withholding,
such investor may be subject to a $500 penalty imposed by the IRS and to certain
criminal penalties including fines and/or imprisonment.
AFG 02/98
B-1
<PAGE> 63
NONRESIDENT ALIENS -- Nonresident alien individuals and foreign entities are
not subject to the backup withholding previously discussed, but must certify
their foreign status by attaching IRS Form W-8 to their application. Form W-8
remains in effect for three calendar years beginning with the calendar year in
which it is received by the Fund. Such shareholders may, however, be subject to
appropriate withholding as described in the Prospectus under "Dividends,
Distributions and Tax Matters."
SPECIAL INFORMATION REGARDING TELEPHONE EXCHANGE PRIVILEGE. By signing the new
Account Application form, an investor appoints the Transfer Agent as his true
and lawful attorney-in-fact to surrender for redemption any and all unissued
shares held by the Transfer Agent in the designated account(s), or in any other
account with any of the AIM Funds, present or future, which has the identical
registration as the designated account(s), with full power of substitution in
the premises. The Transfer Agent and AIM Distributors are thereby authorized and
directed to accept and act upon any telephone redemptions of shares held in any
of the account(s) listed, from any person who requests the redemption proceeds
to be applied to purchase shares in any one or more of the AIM Funds, provided
that such fund is available for sale and provided that the registration and
mailing address of the shares to be purchased are identical to the registration
of the shares being redeemed. An investor acknowledges by signing the form that
he understands and agrees that the Transfer Agent and AIM Distributors may not
be liable for any loss, expense or cost arising out of any telephone exchange
requests effected in accordance with the authorization set forth in these
instructions if they reasonably believe such request to be genuine, but may in
certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transaction. The Transfer Agent
reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone exchange privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any exchanges must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "Exchange Privilege -- Exchanges
by Mail").
SPECIAL INFORMATION REGARDING TELEPHONE REDEMPTION PRIVILEGE. By signing the
new Account Application form, an investor appoints the Transfer Agent as his
true and lawful attorney-in-fact to surrender for redemption any and all
unissued shares held by the Transfer Agent in the designated account(s), present
or future, with full power of substitution in the premises. The Transfer Agent
and AIM Distributors are thereby authorized and directed to accept and act upon
any telephone redemptions of shares held in any of the account(s) listed, from
any person who requests the redemption. An investor acknowledges by signing the
form that he understands and agrees that the Transfer Agent and AIM Distributors
may not be liable for any loss, expense or cost arising out of any telephone
redemption requests effected in accordance with the authorization set forth in
these instructions if they reasonably believe such request to be genuine, but
may in certain cases be liable for losses due to unauthorized or fraudulent
transactions. Procedures for verification of telephone transactions may include
recordings of telephone transactions (maintained for six months), requests for
confirmation of the shareholder's Social Security Number and current address,
and mailings of confirmations promptly after the transactions. The Transfer
Agent reserves the right to cease to act as attorney-in-fact subject to this
appointment, and AIM Distributors reserves the right to modify or terminate the
telephone redemption privilege at any time without notice. An investor may elect
not to have this privilege by marking the appropriate box on the application.
Then any redemptions must be effected in writing by the investor (see the
applicable Fund's prospectus under the caption "How to Redeem
Shares -- Redemptions by Mail").
AFG 02/98
B-2
<PAGE> 64
[AIM LOGO APPEARS HERE] THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
TABLE OF CONTENTS
INVESTMENT OBJECTIVES.................... 2
Investment Advisor SUMMARY.................................. 2
A I M Advisors, Inc. THE FUNDS................................ 4
11 Greenway Plaza, Suite 100 Table of Fees and Expenses............. 4
Houston, TX 77046-1173 Financial Highlights................... 6
Performance............................ 18
Transfer Agent About the Funds........................ 18
A I M Fund Services, Inc. Investment Programs.................... 19
P.O. Box 4739 Certain Investment Strategies and
Houston, TX 77210-4739 Policies............................... 23
Management............................. 26
Custodian Organization of the Trust.............. 30
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110 INVESTOR'S GUIDE TO THE AIM FAMILY OF
FUNDS--Registered Trademark--.......... A-1
The Bank of New York Introduction to The AIM Family of
90 Washington Street Funds.................................. A-1
New York, NY 10286 How to Purchase Shares................. A-1
[AIM Municipal Bond Fund only] Terms and Conditions of Purchase of the
AIM Funds........................... A-2
Principal Underwriter Special Plans.......................... A-9
A I M Distributors, Inc. Exchange Privilege..................... A-11
P.O. Box 4739 How to Redeem Shares................... A-13
Houston, TX 77210-4739 Determination of Net Asset Value....... A-17
Dividends, Distributions and Tax
Independent Accountants Matters................................ A-18
KPMG Peat Marwick LLP General Information.................... A-20
700 Louisiana Appendix A............................. A-22
Houston, TX 77002 Appendix B............................. A-23
Appendix C............................. A-25
Application Instructions................. B-1
</TABLE>
For more complete information about any other fund in The AIM Family of
Funds--Registered Trademark--, including charges and expenses, please
call (800) 347-4246 or write to A I M Distributors, Inc. and request
a free prospectus. Please read the prospectus carefully before you
invest or send money.
AFG-PRO-1
<PAGE> 65
STATEMENT OF
ADDITIONAL INFORMATION
AIM FUNDS GROUP
AIM BALANCED FUND AIM MONEY MARKET FUND
AIM GLOBAL UTILITIES FUND AIM MUNICIPAL BOND FUND
AIM HIGH YIELD FUND AIM SELECT GROWTH FUND
AIM INCOME FUND AIM VALUE FUND
AIM INTERMEDIATE GOVERNMENT FUND
11 GREENWAY PLAZA
SUITE 100
HOUSTON, TEXAS 77046-1173
(713) 626-1919
-------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS, AND IT SHOULD BE
READ IN CONJUNCTION WITH A PROSPECTUS FOR THE ABOVE-NAMED FUNDS, A COPY OF
WHICH MAY BE OBTAINED FROM AUTHORIZED DEALERS OR BY WRITING A I M DISTRIBUTORS,
INC., P.O. BOX 4739, HOUSTON, TEXAS 77210-4739.
-------------------------
Statement of Additional Information Dated: May 1, 1998
Relating to the Prospectus Dated: May 1, 1998
<PAGE> 66
T A B L E O F C O N T E N T S
<TABLE>
<CAPTION>
PAGE
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
GENERAL INFORMATION ABOUT THE TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Trust and its Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Total Return Quotations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Yield Quotations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
PORTFOLIO TRANSACTIONS AND BROKERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
General Brokerage Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Allocation of Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 28(e) Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Transactions with Regular Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Brokerage Commissions Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
All Funds except AIM Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
AIM Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
AIM Municipal Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
AIM High Yield Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
AIM Global Utilities Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Lending Portfolio Securities: All Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Covered Call Options: All Funds except AIM Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . 13
Put Options: AIM Global Utilities Fund, AIM Select Growth Fund and AIM Value Fund . . . . . . . . . . . . . 14
Combined Option Positions: AIM Global Utilities Fund, AIM Select Growth Fund and AIM
Value Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Short Sales: AIM Balanced Fund and AIM High Yield Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Futures Contracts: All Funds except AIM Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . . 15
Options on Futures Contracts: All Funds except AIM Money Market Fund . . . . . . . . . . . . . . . . . . . 16
Risks as to Futures Contracts and Related Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Delayed Delivery Agreements: All Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
When-Issued Securities: All Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Foreign Exchange Transactions: All Funds (except AIM Intermediate Government Fund, AIM
Money Market Fund and AIM Municipal Bond Fund) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Rule 144A Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
INVESTMENT RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
AIM Balanced Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
AIM Global Utilities Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
AIM High Yield Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
AIM Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
AIM Intermediate Government Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
AIM Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
AIM Municipal Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
AIM Select Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
AIM Value Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
i
<PAGE> 67
<TABLE>
<S> <C>
MANAGEMENT OF THE TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Trustees and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
INVESTMENT ADVISORY AND OTHER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
THE DISTRIBUTION PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
THE DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
HOW TO PURCHASE AND REDEEM SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
AIM High Yield Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
QUALIFYING FOR A REDUCED FRONT-END SALES CHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
PROGRAMS AND SERVICES FOR SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Dividend Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
DESCRIPTION OF MONEY MARKET INSTRUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Money Market Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
MISCELLANEOUS INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Audit Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Custodians and Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
RATINGS OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FS
</TABLE>
ii
<PAGE> 68
INTRODUCTION
AIM Funds Group (the "Trust") is a series mutual fund. The rules and
regulations of the Securities and Exchange Commission (the "SEC") require all
mutual funds to furnish prospective investors certain information concerning
the activities of a fund being considered for investment. This information is
included in a Prospectus (the "Prospectus"), dated May 1, 1998, which relates
to all nine of the Trust's portfolios (collectively, the "Funds" and each
separately a "Fund"). Copies of the Prospectus and additional copies of this
Statement of Additional Information may be obtained without charge by writing
the principal distributor of the Funds' shares, A I M Distributors, Inc. ("AIM
Distributors"), P.O. Box 4739, Houston, Texas 77210-4739, or by calling (800)
347-4246. Investors must receive a Prospectus before they invest in any Fund.
This Statement of Additional Information is intended to furnish
prospective investors with additional information concerning the Funds. Some of
the information required to be in this Statement of Additional Information is
also included in the Funds' current Prospectus, and in order to avoid
repetition, reference will be made herein to sections of the Prospectus.
Additionally, the Prospectus and this Statement of Additional Information omit
certain information contained in the Trust's Registration Statement filed with
the SEC. Copies of the Registration Statement, including items omitted from the
Prospectus and this Statement of Additional Information, may be obtained from
the SEC by paying the charges prescribed under its rules and regulations.
GENERAL INFORMATION ABOUT THE TRUST
THE TRUST AND ITS SHARES
The Trust was previously organized as a Massachusetts business trust
pursuant to a Master Trust Agreement, dated October 30, 1984, as amended.
Pursuant to agreements and plans of reorganization, the Funds were reorganized
on October 15, 1993 as portfolios of AIM Funds Group, a Delaware business
trust. The Trust currently is organized under an Agreement and Declaration of
Trust, dated May 5, 1993, as amended (the "Trust Agreement"). Each Fund is a
series of shares of the Trust. Under the Trust Agreement, the Board of Trustees
is authorized to create new series of shares without the necessity of a vote of
shareholders of the Trust.
On October 15, 1993, the Funds (other than AIM BALANCED FUND and AIM
MONEY MARKET FUND) succeeded to the assets and assumed the liabilities of the
funds with corresponding names (the "Predecessor Funds") of AIM Funds Group, a
Massachusetts business trust ("AFG"), pursuant to an Agreement and Plan of
Reorganization between the Trust and AFG. Also on October 15, 1993, AIM
BALANCED FUND succeeded to the assets and assumed the liabilities of AIM
Convertible Securities, Inc., a Maryland corporation ("ACS"), pursuant to an
Agreement and Plan of Reorganization between the Trust and ACS. Finally, on
October 16, 1993, AIM MONEY MARKET FUND succeeded to the assets and assumed the
liabilities of the AIM Cash Fund and AIM Money Market Fund(C) portfolios of AFG
and the AIM Money Market Fund portfolio of Short-Term Investments Co., a
Massachusetts business trust ("STIC"), pursuant to an Agreement and Plan of
Reorganization among the Trust, AFG and STIC. All historical financial and
other information contained in this Statement of Additional Information for
periods prior to October 15, 1993 relating to the Funds (or a class thereof) is
that of the Predecessor Funds (or the corresponding class thereof) or ACS.
However, the historical financial and other information relating to AIM MONEY
MARKET FUND does not reflect information prior to October 16, 1993. Pursuant
to an Amendment to the Trust Agreement, dated May 1, 1995, AIM UTILITIES FUND
changed its name to AIM GLOBAL UTILITIES FUND. The Trust Agreement was further
amended on September 25, 1995 to reflect a name change of AIM Government
Securities Fund to AIM INTERMEDIATE GOVERNMENT FUND. The Trust Agreement was
amended on May 1, 1997 to change the name AIM MONEY MARKET FUND Class C shares
to AIM MONEY MARKET FUND AIM Cash Reserve Shares. The Trust Agreement was
amended on May 1, 1998, to change the name of AIM Growth Fund to AIM SELECT
GROWTH FUND. Shares of beneficial interest of the Trust are redeemable at
their net asset value at the option of the shareholder or at the option of the
Trust in certain circumstances. For information concerning the methods
1
<PAGE> 69
of redemption and the rights of share ownership, investors should consult the
Prospectus under the captions "Organization of the Trust" and "How to Redeem
Shares."
The assets received by the Trust from the issue or sale of shares of
each of its series of shares, and all income, earnings, profits and proceeds
thereof, subject only to the rights of creditors, are specifically allocated to
the appropriate Fund. They constitute the underlying assets of each Fund, are
required to be segregated on the Trust's books of account, and are to be
charged with the expenses with respect to such Fund and its respective classes.
Any general expenses of the Trust not readily identifiable as belonging to a
particular Fund are allocated by or under the direction of the Board of
Trustees, primarily on the basis of relative net assets, or other relevant
factors.
Each share of each Fund represents an equal proportionate interest in
that Fund with each other share and is entitled to such dividends and
distributions out of the income belonging to such Fund as are declared by the
Board. Each Fund, except AIM MONEY MARKET FUND, offers three separate classes
of shares: Class A shares, Class B shares and Class C shares. AIM MONEY MARKET
FUND offers four separate classes of shares: Class A shares, Class B shares,
Class C shares and AIM Cash Reserve Shares. Each such class represents
interests in the same portfolio of investments but, as further described in the
Prospectus, each such class is subject to differing sales charges and expenses,
which differences will result in differing net asset values and dividends and
distributions. Upon any liquidation of the Trust, shareholders of each class
are entitled to share pro rata in the net assets belonging to the applicable
Fund available for distribution.
PERFORMANCE INFORMATION
Total return and yield figures for the Funds are neither fixed nor
guaranteed, and no Fund's principal is insured. Performance quotations reflect
historical information and should not be considered representative of a Fund's
performance for any period in the future. Performance is a function of a
number of factors which can be expected to fluctuate. The Funds may provide
performance information in reports, sales literature and advertisements. The
Funds may also, from time to time, quote information about the Funds published
or aired by publications or other media entities which contain articles or
segments relating to investment results or other data about one or more of the
Funds. The following is a list of such publications or media entities:
<TABLE>
<S> <C> <C>
Advertising Age Forbes Nation's Business
Barron's Fortune New York Times
Best's Review Hartford Courant Pension World
Broker World Inc. Pensions & Investments
Business Week Institutional Investor Personal Investor
Changing Times Insurance Forum Philadelphia Inquirer
Christian Science Monitor Insurance Week USA Today
Consumer Reports Investor's Daily U.S. News & World Report
Economist Journal of the American Wall Street Journal
FACS of the Week Society of CLU & ChFC Washington Post
Financial Planning Kiplinger Letter CNN
Financial Product News Money CNBC
Financial Services Week Mutual Fund Forecaster PBS
Financial World
</TABLE>
2
<PAGE> 70
Each Fund may also compare its performance to performance data of
similar mutual funds as published by the following services:
Bank Rate Monitor Stanger
Donoghue's Weisenberger
Mutual Fund Values (Morningstar) Lipper Analytical Services
Each Fund's performance may also be compared in advertising to the
performance of comparative benchmarks such as the following:
Standard & Poor's 400 Index
Standard & Poor's 500 Stock Index Bond Buyer Index
Dow Jones Industrial Average NASDAQ
EAFE Index COFI
Consumer Price Index First Boston High Yield Index
Lehman Bond Indices
Each Fund may also compare its performance to rates on Certificates of
Deposit and other fixed rate investments such as the following:
10 year Treasuries
30 year Treasuries
90 day Treasury Bills
Advertising for AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND and
AIM VALUE FUND may from time to time include discussions of general economic
conditions and interest rates. Advertising for such Funds and for AIM BALANCED
FUND may also include references to the use of those Funds as part of an
individual's overall retirement investment program. From time to time, sales
literature and/or advertisements for any of the Funds may disclose (i) the
largest holdings in the Fund's portfolio, (ii) certain selling group members
and/or (iii) certain institutional shareholders.
From time to time, the Funds' sales literature and/or advertisements
may discuss generic topics pertaining to the mutual fund industry. This
includes, but is not limited to, literature addressing general information
about mutual funds, variable annuities, dollar-cost averaging, stocks, bonds,
money markets, certificates of deposit, retirement, retirement plans, asset
allocation, tax-free investing, college planning, inflation.
Although performance data may be useful to prospective investors when
comparing a Fund's performance with other funds and other potential
investments, investors should note that the methods of computing performance of
other potential investments are not necessarily comparable to the methods
employed by a Fund.
TOTAL RETURN QUOTATIONS
The standard formula for calculating total return, as described in the
Prospectus, is as follows:
n
P(1+T) =ERV
Where P = a hypothetical initial payment of $1,000.
T = average annual total return (assuming the applicable
maximum sales load is deducted at the beginning of the
1, 5, or 10 year periods).
n = number of years.
3
<PAGE> 71
ERV = ending redeemable value of a hypothetical $1,000 payment
at the end of the 1, 5, or 10 year periods (or
fractional portion of such period).
The average annual total returns for each of the named Funds, with
respect to its Class A shares, for the one, five and ten year periods (or since
inception, if shorter) ended December 31, 1997, were as follows:
<TABLE>
<CAPTION>
PERIODS ENDED DECEMBER 31, 1997
-------------------------------
CLASS A SHARES: 1 YEAR 5 YEARS 10 YEARS
-------------- ------ ------- --------
<S> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . . . . . . . . . . . 18.50% 15.81% 14.79%
AIM Global Utilities Fund . . . . . . . . . . . . . . . . 16.91% 11.12% 13.36%*
AIM High Yield Fund . . . . . . . . . . . . . . . . . . . 7.20% 10.97% 11.77%
AIM Income Fund . . . . . . . . . . . . . . . . . . . . . 6.62% 8.65% 9.41%
AIM Intermediate Government Fund . . . . . . . . . . . . . 3.92% 5.03% 7.12%
AIM Municipal Bond Fund . . . . . . . . . . . . . . . . . 2.16% 5.22% 7.53%
AIM Select Growth Fund . . . . . . . . . . . . . . . . . . 12.97% 12.13% 12.61%
AIM Value Fund . . . . . . . . . . . . . . . . . . . . . . 17.12% 17.27% 19.59%
</TABLE>
* The inception date of the Class A shares of AIM GLOBAL UTILITIES
FUND was January 18, 1988.
The average annual total returns for each of the named Funds, with
respect to its Class B shares, for the periods ended December 31, 1997, were as
follows:
<TABLE>
<CAPTION>
CLASS B SHARES: PERIODS ENDED DECEMBER 31, 1997
-------------- -------------------------------
1 YEAR SINCE INCEPTION**
------ -----------------
<S> <C> <C>
AIM Balanced Fund . . . . . . . . . . . . . . . . 18.42% 14.30%
AIM Global Utilities Fund . . . . . . . . . . . . 17.74% 8.84%
AIM High Yield Fund . . . . . . . . . . . . . . . 6.71% 9.58%
AIM Income Fund . . . . . . . . . . . . . . . . . 5.89% 6.31%
AIM Intermediate Government Fund . . . . . . . . . 3.16% 4.20%
AIM Municipal Bond Fund . . . . . . . . . . . . . 1.59% 3.86%
AIM Select Growth Fund . . . . . . . . . . . . . . 13.50% 13.16%
AIM Value Fund . . . . . . . . . . . . . . . . . . 17.96% 16.19%
</TABLE>
**The inception date of the Class B shares of AIM GLOBAL UTILITIES
FUND, AIM HIGH YIELD FUND, AIM MUNICIPAL BOND FUND and AIM SELECT
GROWTH FUND, was September 1, 1993; the inception date of the Class B
shares of AIM INCOME FUND and AIM INTERMEDIATE GOVERNMENT FUND was
September 7, 1993; and the inception date of the Class B shares of AIM
BALANCED FUND and AIM VALUE FUND was October 18, 1993.
The average annual total returns for AIM MONEY MARKET FUND, with
respect to its Class A shares, Class B shares and AIM Cash Reserve Shares, for
the year ended December 31, 1997 were -1.29%, -1.16% and 4.66%, respectively;
and since inception (October 16, 1993) were 2.85%, 3.07% and 4.28%,
respectively.
Standard total return quotes may be accompanied by total return
figures calculated by alternative methods. For example, average annual total
return may be calculated without assuming payment of the full sales load
according to the following formula:
4
<PAGE> 72
n
P(1+U) =ERV
Where P = a hypothetical initial payment of $1,000.
U = average annual total return assuming payment of only a
stated portion of, or none of, the applicable maximum
sales load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment
at the end of the stated period.
Cumulative total return across a stated period may be calculated as
follows:
n
P(1+V) =ERV
Where P = a hypothetical initial payment of $1,000.
V = cumulative total return assuming payment of all of, a
stated portion of, or none of, the applicable maximum
sales load at the beginning of the stated period.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 payment
at the end of the stated period.
Since quotations of average annual total return for periods of less
than one year may be misleading, and the Class C shares of the Funds have been
offered for less than one year, the performance of the Class C shares is
provided below in the form of cumulative total return. For the period August
4, 1997 (inception date) through December 31, 1997, the cumulative total
returns of the Class C shares of the Funds were as follows:
<TABLE>
<CAPTION>
CLASS C SHARES: PERIOD ENDED DECEMBER 31, 1997
-------------- ------------------------------
<S> <C>
AIM Balanced Fund . . . . . . . . . . . . . . . . . . . . . . . . 3.67%
AIM Global Utilities Fund . . . . . . . . . . . . . . . . . . . . 8.74%
AIM High Yield Fund . . . . . . . . . . . . . . . . . . . . . . . 3.49%
AIM Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . 3.96%
AIM Intermediate Government Fund . . . . . . . . . . . . . . . . . 2.64%
AIM Money Market Fund . . . . . . . . . . . . . . . . . . . . . . 0.59%
AIM Municipal Bond Fund . . . . . . . . . . . . . . . . . . . . . 1.36%
AIM Select Growth Fund . . . . . . . . . . . . . . . . . . . . . . -4.71%
AIM Value Fund . . . . . . . . . . . . . . . . . . . . . . . . . -0.98%
</TABLE>
YIELD QUOTATIONS
The standard formula for calculating yield (including tax-equivalent
yield for AIM MUNICIPAL BOND FUND) for each Fund except AIM MONEY MARKET FUND,
as described in the Prospectus, is as follows:
6
YIELD = 2[((a-b)/(c x d) + 1) -1]
Where a = dividends and interest earned during a stated 30-day
period. For purposes of this calculation, dividends are
accrued rather than recorded on the ex-dividend date.
Interest earned under this formula must generally be
calculated based on the yield to maturity of each
obligation (or, if more appropriate, based on yield to
call date).
b = expenses accrued during period (net of reimbursement).
c = the average daily number of shares outstanding during
the period.
d = the maximum offering price per share on the last day of
the period.
5
<PAGE> 73
Tax-equivalent yield for AIM MUNICIPAL BOND FUND will be calculated by
dividing that portion of the yield of the Fund (as determined above) which is
tax-exempt by one minus a stated income tax rate and adding the product to that
portion of the yield that is not tax-exempt.
The yields for each of the named Funds were as follows:
<TABLE>
<CAPTION>
30 DAYS ENDED DECEMBER 31, 1997
---------------------------------------------------------
CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------- -------------- --------------
<S> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . . 2.22% 1.51% 1.51%
AIM Global Utilities Fund . . . . . . . 2.10% 1.47% 1.47%
AIM High Yield Fund . . . . . . . . . . 7.63%* 7.26%* 7.26%*
AIM Income Fund . . . . . . . . . . . . 6.04% 5.54% 5.54%
AIM Intermediate Government Fund . . . . 5.71% 5.22% 5.22%
AIM Municipal Bond Fund . . . . . . . . 3.89%** 5.29%** 3.29%**
</TABLE>
* The relatively high yields in this Fund, like that of other junk
bond funds, reflect a substantial premium for the high default
risk perceived by the market. Investors should not consider these
yields a measure of income potential.
** The tax-equivalent yield, assuming a tax rate of 39.6%, for the
Class A shares, Class B shares and Class C shares of AIM
MUNICIPAL BOND FUND was 6.44%, 5.45% and 5.45%, respectively.
The standard formula for calculating annualized yield for AIM MONEY
MARKET FUND, as described in the Prospectus, is as follows:
Y = V - V X 365
1 0
------ ---
V 7
0
Where Y = annualized yield.
V = the value of a hypothetical pre-existing account in
0 the Fund having a balance of one share at the
beginning of a stated seven-day period.
V = the value of such an account at the end of the stated
1 period.
The annualized yield for each of the Class A, Class B and Class C
shares and AIM Cash Reserve Shares of AIM MONEY MARKET FUND for the 7 days ended
December 31, 1997, was 4.76%, 3.99%, 3.99% and 4.83%, respectively.
The standard formula for calculating effective annualized yield for AIM
Money Market Fund, as described in the Prospectus, is as follows:
365/7
EY = (Y+1) -1
Where EY = effective annualized yield.
Y = annualized yield, as determined above.
The effective annualized yield for each of the Class A, Class B and
Class C shares and AIM Cash Reserve Shares of AIM MONEY MARKET FUND for the 7
days ended December 31, 1997, was 4.87%, 4.06%, 4.06% and 4.95%, respectively.
6
<PAGE> 74
For the purpose of determining the annualized yield and effective
annualized yield, the net change in the value of the hypothetical AIM MONEY
MARKET FUND account reflects the value of additional shares purchased with
dividends from the original shares and any such additional shares, and all fees
charged, other than non-recurring account or sales charges, to all shareholder
accounts in proportion to the length of the base period and the Fund's average
account size, but does not include realized gains and losses or unrealized
appreciation and depreciation or income other than investment income.
PORTFOLIO TRANSACTIONS AND BROKERAGE
GENERAL BROKERAGE POLICY
A I M Advisors, Inc. ("AIM") makes decisions to buy and sell securities
for each Fund, selects broker-dealers, effects the Funds' investment portfolio
transactions, allocates brokerage fees in such transactions, and where
applicable, negotiates commissions and spreads on transactions. AIM's primary
consideration in effecting a security transaction is to obtain the most
favorable execution of the order, which includes the best price on the security
and a low commission rate. While AIM seeks reasonably competitive commission
rates, the Funds may not pay the lowest commission or spread available. See
"Section 28(e) Standards" below.
Some of the securities in which the Funds invest are traded in
over-the-counter markets. In such transactions, a Fund deals directly with
dealers who make markets in the securities involved, except when better prices
are available elsewhere. Portfolio transactions placed through dealers who are
primary market makers are effected at net prices without commissions, but which
include compensation in the form of a mark up or mark down.
Traditionally, commission rates have not been negotiated on stock
markets outside the United States. Although in recent years many overseas
stock markets have adopted a system of negotiated rates, a number of markets
maintain an established schedule of minimum commission rates.
AIM may determine target levels of commission business with various
brokers on behalf of its clients (including the Funds) over a certain time
period. The target levels will be based upon the following factors, among
others: (1) the execution services provided by the broker; (2) the research
services provided by the broker; and (3) the broker's interest in mutual funds
in general and in the Funds and other mutual funds advised by AIM or A I M
Capital Management, Inc. (collectively, the "AIM Funds") in particular,
including sales of the Funds and of the other AIM Funds. In connection with
(3) above, the Funds' trades may be executed directly by dealers that sell
shares of the AIM Funds or by other broker-dealers with which such dealers have
clearing arrangements. AIM will not use a specific formula in connection with
any of these considerations to determine the target levels.
AIM will seek, whenever possible, to recapture for the benefit of a
Fund any commissions, fees, brokerage or similar payments paid by the Fund on
portfolio transactions. Normally, the only fees which AIM can recapture are the
soliciting dealer fees on the tender of a Fund's portfolio securities in a
tender or exchange offer.
The Funds may engage in certain principal and agency transactions with
banks and their affiliates that own 5% or more of the outstanding voting
securities of a Fund, provided the conditions of an exemptive order received by
the Funds from the SEC are met. In addition, a Fund may purchase or sell a
security from or to another AIM Fund provided the Funds follow procedures
adopted by the Boards of Directors/Trustees of the various AIM Funds, including
the Trust. These inter-fund transactions do not generate brokerage commissions
but may result in custodial fees or taxes or other related expenses.
Under the 1940 Act, certain persons affiliated with the Trust are
prohibited from dealing with the Funds as principal in any purchase or sale of
securities unless an exemptive order allowing such transactions is
7
<PAGE> 75
obtained from the SEC. The 1940 Act also prohibits the Funds from purchasing a
security being publicly underwritten by a syndicate of which certain persons
affiliated with the Trust are members except in accordance with certain
conditions. These conditions may restrict the ability of a Fund to purchase
municipal securities being publicly underwritten by such syndicate, and the
Fund may be required to wait until the syndicate has been terminated before
buying such securities. At such time, the market price of the securities may
be higher or lower than the original offering price. A person affiliated with
the Trust may, from time to time, serve as placement agent or financial advisor
to an issuer of municipal securities and be paid a fee by such issuer. Each
Fund may purchase such municipal securities directly from the issuer, provided
that the purchase is reviewed by the Board of Trustees and a determination is
made that the placement fee or other remuneration paid by the issuer to a
person affiliated with the Trust is fair and reasonable in relation to the fees
charged by others performing similar services.
ALLOCATION OF PORTFOLIO TRANSACTIONS
AIM and its affiliates manage several other investment accounts. Some
of these accounts may have investment objectives similar to the Funds.
Occasionally, identical securities will be appropriate for investment by one of
the Funds and by another Fund or one or more of these investment accounts.
However, the position of each account in the same securities and the length of
time that each account may hold its investment in the same securities may vary.
The timing and amount of purchase by each account will also be determined by
its cash position. If the purchase or sale of securities is consistent with
the investment policies of the Fund(s) and one or more of these accounts, and
is considered at or about the same time, AIM will fairly allocate transactions
in such securities among the Fund(s) and these accounts. AIM may combine such
transactions, in accordance with applicable laws and regulations, to obtain the
most favorable execution. Simultaneous transactions could, however, adversely
affect a Fund's ability to obtain or dispose of the full amount of a security
which it seeks to purchase or sell.
Sometimes the procedure for allocating portfolio transactions among the
various investment accounts advised by AIM could have an adverse effect on the
price or amount of securities available to a Fund. In making such allocations,
AIM considers the investment objectives and policies of its advisory clients,
the relative size of portfolio holdings of the same or comparable securities,
the availability of cash for investment, the size of investment commitments
generally held, and the judgments of the persons responsible for recommending
the investment.
SECTION 28(e) STANDARDS
Section 28(e) of the Securities Exchange Act of 1934 provides that AIM,
under certain circumstances, lawfully may cause an account to pay a higher
commission than the lowest available. Under Section 28(e), AIM must make a
good faith determination that the commissions paid are "reasonable in relation
to the value of the brokerage and research services provided ... viewed in
terms of either that particular transaction or [AIM's] overall responsibilities
with respect to the accounts as to which it exercises investment discretion."
The services provided by the broker also must lawfully and appropriately assist
AIM in the performance of its investment decision-making responsibilities.
Accordingly, in recognition of research services provided to it, a Fund may pay
a broker higher commissions than those available from another broker.
Research services received from broker-dealers supplement AIM's own
research (and the research of its affiliates), and may include the following
types of information: statistical and background information on the U.S. and
foreign economies, industry groups and individual companies; forecasts and
interpretations with respect to the U.S. and foreign economies, securities,
markets, specific industry groups and individual companies; information on
federal, state, local and foreign political developments; portfolio management
strategies; performance information on securities, indexes and investment
accounts; information concerning prices of securities; and information supplied
by specialized services to AIM and to the Trust's trustees with respect to the
performance, investment activities, and fees and expenses of other mutual
funds. Broker-dealers may communicate such information electronically, orally
or in written form. Research services may
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<PAGE> 76
also include the providing of custody services, as well as the providing of
equipment used to communicate research information, the providing of
specialized consultations with AIM personnel with respect to computerized
systems and data furnished to AIM as a component of other research services,
the arranging of meetings with management of companies, and the providing of
access to consultants who supply research information.
The outside research assistance is useful to AIM since the
broker-dealers used by AIM tend to follow a broader universe of securities and
other matters than AIM's staff can follow. In addition, the research provides
AIM with a diverse perspective on financial markets. Research services
provided to AIM by broker-dealers are available for the benefit of all accounts
managed or advised by AIM or by its affiliates. Some broker-dealers may
indicate that the provision of research services is dependent upon the
generation of certain specified levels of commissions and underwriting
concessions by AIM's clients, including the Funds. However, the Funds are not
under any obligation to deal with any broker-dealer in the execution of
transactions in portfolio securities.
In some cases, the research services are available only from the
broker-dealer providing them. In other cases, the research services may be
obtainable from alternative sources in return for cash payments. AIM believes
that the research services are beneficial in supplementing AIM's research and
analysis and that they improve the quality of AIM's investment advice. The
advisory fee paid by the Funds is not reduced because AIM receives such
services. However, to the extent that AIM would have purchased research
services had they not been provided by broker-dealers, the expenses to AIM
could be considered to have been reduced accordingly.
TRANSACTIONS WITH REGULAR BROKERS
As of December 31, 1997, the following Funds entered into repurchase
agreements with the following regular brokers, as that term is defined in Rule
10b-1 under the 1940 Act, having the noted market values.
<TABLE>
<CAPTION>
Merrill Lynch,
Goldman Sachs Pierce Fenner &
& Co. Smith Inc.
-------------- ---------------
<S> <C> <C>
AIM Balanced Fund -- --
AIM Global Utilities Fund -- --
AIM High Yield Fund $ 42,498,600 --
AIM Income Fund -- --
AIM Intermediate Government Fund 26,089,190 --
AIM Money Market Fund 21,619,327 --
AIM Value Fund 1,009,483,498 200,000,000
</TABLE>
As of December 31, 1997, AIM BALANCED FUND, AIM SELECT GROWTH FUND and
AIM VALUE FUND held an amount of common stock issued by Merrill Lynch & Co.
Inc. having a market value of $2,917,500, $151,841 and $2,844,563.
9
<PAGE> 77
BROKERAGE COMMISSIONS PAID
For the year ended December 31, 1997, AIM BALANCED FUND, AIM GLOBAL
UTILITIES FUND, AIM SELECT GROWTH FUND and AIM VALUE FUND directed certain
brokerage transactions to broker-dealers that provided AIM with research,
statistical and other information: $34,314,244, $4,960,864, $74,595,852 and
$1,925,874,330, respectively. For the same period, AIM BALANCED FUND, AIM
GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND,and AIM VALUE FUND paid the
following in related brokerage commissions: $51,902, $7,994, $65,579 and
$1,737,500, respectively.
Except as noted, the Trust does not utilize an affiliated broker or
dealer in effecting portfolio transactions and does not recapture commissions
paid in such transactions. Brokerage commissions or underwriting concessions
(or both) paid by each of the Funds listed below were as follows for the years
ended December 31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
FUND 1997 1996 1995
---- ------- -------- --------
(000) (000) (000)
<S> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . . . . $ 726 $ 357 $ 117
AIM Global Utilities Fund . . . . . . . . . 150 275 596
AIM High Yield Fund . . . . . . . . . . . . 102 87 -0-
AIM Income Fund . . . . . . . . . . . . . . 28 11 4
AIM Intermediate Government Fund . . . . . -0- -0- -0-
AIM Municipal Bond Fund . . . . . . . . . . -0- -0- -0-
AIM Select Growth Fund . . . . . . . . . . 1,101 929 520
AIM Value Fund . . . . . . . . . . . . . . 35,473 29,515 17,964
</TABLE>
INVESTMENT OBJECTIVES AND POLICIES
For a general discussion of the investment objective(s) and policies of
each Fund, see the sections entitled "Investment Objectives" and "Investment
Programs" in the Prospectus.
ALL FUNDS EXCEPT AIM MONEY MARKET FUND
AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND and AIM VALUE FUND
invest in securities traded in the over-the-counter market or listed on a
national securities exchange, while AIM HIGH YIELD FUND, AIM INCOME FUND, AIM
INTERMEDIATE GOVERNMENT FUND and AIM MUNICIPAL BOND FUND generally acquire
bonds in new offerings or in principal trades with broker-dealers. AIM
BALANCED FUND, investing in both equity and debt securities, acquires
securities in the over- the-counter market and on national securities
exchanges, and acquires bonds in new offerings or in principal trades with
broker-dealers. Ordinarily, the Funds do not purchase securities with the
intention of engaging in short-term trading. However, any particular security
will be sold, and the proceeds reinvested, whenever such action is deemed
prudent from the viewpoint of a Fund's investment objectives, regardless of the
holding period of that security.
The Funds may invest in high quality, short-term money market instruments
such as certificates of deposit, commercial paper, bankers' acceptances,
short-term U.S. Government obligations and repurchase agreements, pending
investment in portfolio securities, to meet anticipated short-term cash needs
such as dividend payments or redemptions of shares, or for temporary defensive
purposes. Such investments generally are the type in which AIM MONEY MARKET
FUND invests, generally will have maturities of 60 days or less and normally
are held to maturity. See "Description of Money Market Instruments." The
underlying securities that are subject to a repurchase agreement will be
"marked-to-market" on a daily basis so that AIM can determine the value of the
securities in relation to the amount of the repurchase agreement.
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<PAGE> 78
U.S. Government securities may take the form of participation interests
in, and may be evidenced by, deposit or safekeeping receipts. Participation
interests are pro rata interests in U.S. Government securities. A Fund may
acquire participation interests in pools of mortgages sold by the Government
National Mortgage Association ("GNMA"), the Federal National Mortgage
Association ("FNMA") and the Federal Home Loan Banks. Instruments evidencing
deposit or safekeeping are documentary receipts for such original securities
held in custody by others.
U.S. Government securities, including those that are guaranteed by federal
agencies or instrumentalities, may or may not be backed by the "full faith and
credit" of the United States. Some securities issued by federal agencies or
instrumentalities are only supported by the credit of the agency or
instrumentality (such as the Federal Home Loan Banks) while others have an
additional line of credit with the U.S. Treasury (such as the Federal National
Mortgage Association). In the case of securities not backed by the full faith
and credit of the United States, the Funds must look principally to the agency
issuing or guaranteeing the obligation for ultimate repayment and may not be
able to assert a claim against the United States itself in the event the agency
or instrumentality does not meet its commitments.
AIM MONEY MARKET FUND
The types of money market instruments in which the Fund presently invests
are listed under "Description of Money Market Instruments" in the Prospectus
and this Statement of Additional Information. If the trustees determine that
it may be advantageous to invest in other types of money market instruments,
the Fund may invest in such instruments, if it is permitted to do so by its
investment objectives, policies and restrictions.
The rating applied to a security at the time the security is purchased by
the Fund may be changed while the Fund holds such security in its portfolio.
This change may affect, but will not necessarily compel, a decision to dispose
of a security. If the major rating services used by the Fund were to alter
their standards or systems for ratings, the Fund would then employ ratings
under the revised standards or systems that would be comparable to those
specified in its current investment objectives, policies and restrictions.
The Board of Trustees has established procedures in compliance with Rule
2a-7 under the 1940 Act that include reviews of portfolio holdings by the
trustees at such intervals as they may deem appropriate to determine whether
net asset value, calculated by using available market quotations, deviates from
$1.00 per share and, if so, whether such deviation may result in material
dilution or is otherwise unfair to investors or existing shareholders. In the
event the trustees determine that a deviation having such a result exists, they
intend to take such corrective action as they deem necessary and appropriate,
including, but not limited to, the following: the sale of portfolio
instruments prior to maturity in order to realize capital gains or losses or to
shorten average portfolio maturity; withholding dividends; authorizing
redemption of shares in kind; or establishing a net asset value per share by
using available market quotations, in which case, the net asset value could
possibly be greater or less than $1.00 per share. If the trustees deem it
inadvisable to continue the practice of maintaining a net asset value of $1.00
per share, they may alter this procedure. The shareholders of the Fund will be
notified promptly after any such change.
Any increase in the value of a shareholder's investment in the Fund
resulting from the reinvestment of dividend income is reflected by an increase
in the number of shares in the shareholder's account.
AIM MUNICIPAL BOND FUND
The two principal classifications of municipal bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable only from the revenues
derived from a particular facility or class of facilities or, in some cases,
from the proceeds of a special excise or other specific revenue source.
Industrial development bonds, which are municipal bonds, are in most cases
revenue bonds and do not generally constitute the pledge of the credit of the
issuer of such bonds.
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<PAGE> 79
The Fund invests in securities representing a number of different
investment classifications. In addition, there are variations in the security
of municipal bonds, both within a particular classification and between
classifications, depending on various factors.
Securities in which the Fund invests may be insured by financial insurance
companies. Since a limited number of entities provide such insurance, the Fund
may invest more than 25% of its assets in securities insured by the same
insurance company.
AIM HIGH YIELD FUND
The Fund will not acquire equity securities, other than preferred stocks,
except when (a) attached to or included in a unit with income-generating
securities that otherwise would be attractive to the Fund; (b) acquired
through the exercise of equity features accompanying convertible securities
held by the Fund, such as conversion or exchange privileges or warrants for the
acquisition of stock or equity interests of the same or a different issuer; or
(c) in the case of an exchange offer whereby the equity security would be
acquired with the intention of exchanging it for a debt security issued on a
"when-issued" basis. The Fund does not expect to invest more than 5% of the
value of its total assets in issues, other than preferred stocks, of the type
discussed in this paragraph.
AIM GLOBAL UTILITIES FUND
DESCRIPTION OF THE UTILITIES INDUSTRY
Electric Utility Industry. Electric utilities are heavily regulated.
Local rates are subject to the review of state commissions, and sales either
between companies or that cross state lines are subject to review by the
Federal Energy Regulatory Commission. The industry is also subject to
regulation by the SEC under the Public Utility Holding Company Act of 1935. In
addition, companies constructing or operating nuclear powered generating
stations are subject to extensive regulation by the Nuclear Regulatory
Commission.
Electric utility companies are also subject to extensive local regulation
in environmental and site location matters. Future legislation with regard to
the issues of acid rain and toxic and radioactive wastes could have a
significant impact on the manner in which utility companies conduct their
business, and the costs that they incur. Since the late 1970s, investor-owned
utilities have experienced a number of unfavorable regulatory trends, including
increased regulatory resistance to price increases and new legislation
encouraging deregulation and competition.
Natural Gas Industry. The natural gas industry is comprised primarily of
many small distribution companies and a few large interstate pipeline
companies. The Public Utility Holding Company Act of 1935 has generally acted
as a bar to the consolidation of pipeline and distribution companies.
Regulation of these companies is similar to that of electric companies. The
performance of natural gas utilities may also be substantially affected by
fluctuations in energy prices.
Communications Industry. Most of the communications industry capacity is
concentrated in the hands of a few very large publicly-held companies, unlike
the situation in the electric and gas industries. Significant risks for the
investor to overcome still exist, however, including risk related to pricing at
marginal versus embedded cost. New entrants may have lower costs of material
due to newer technologies or lower standards of reliability than those imposed
in the past by American Telephone & Telegraph ("AT&T") on the industry.
Accordingly, the marginal cost of incremental service is much lower than the
costs embedded in an existing network. Communications companies are not
subject to the Public Utility Holding Company Act of 1935.
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<PAGE> 80
Interstate communications service may be subject to Federal Communications
Commission regulation. Local service may be regulated by the states. In
addition, AT&T and its former subsidiaries are still subject to judicial review
pursuant to the settlement of the antitrust case brought against them by the
Department of Justice.
Water Utility Industry. The water utility industry is composed of
regulated public utilities that are involved in the distribution of drinking
water to densely populated areas. The industry is geographically diverse and
subject to the same rate base and rate of return regulations as are other
public utilities. Demand for water is most heavily influenced by the local
weather, population growth in the service area and new construction. Supplies
of clean, drinkable water are limited and are primarily a function of the
amount of past rainfall.
Other. In addition to the particular types of utilities industries
described above, the Fund may invest in developing utility technology companies
(such as cellular telephone, fiber optics and satellite communications firms)
and in holding companies which derive a substantial portion of their revenues
from utility-related activities. Generally, a holding company will be
considered to derive a substantial portion of its revenues from utility-related
activities if such activities account for at least 40% of its revenues.
LENDING PORTFOLIO SECURITIES: ALL FUNDS
Consistent with applicable regulatory requirements, the Funds may lend
their portfolio securities (principally to broker-dealers) to the extent of
one-third of their respective total assets. Such loans would be callable at
any time and would be continuously secured by collateral equal to no less than
the market value, determined daily, of the loaned securities. Such collateral
will be cash or debt securities issued or guaranteed by the U.S. Government or
any of its agencies. The Funds would continue to receive the income on loaned
securities and would, at the same time, earn interest on the loan collateral or
on the investment of the loan collateral if it were cash. Any cash collateral
pursuant to these loans would be invested in short-term money market
instruments. Where voting or consent rights with respect to loaned securities
pass to the borrower, the Funds will follow the policy of calling the loan, in
whole or in part as may be appropriate, to permit the exercise of such voting
or consent rights if the matters involved are expected to have a material
effect on the Funds' investment in the loaned securities. Lending securities
entails a risk of loss to the Funds if and to the extent that the market value
of the securities loaned were to increase and the lender did not increase the
collateral accordingly.
COVERED CALL OPTIONS: ALL FUNDS EXCEPT AIM MONEY MARKET FUND
Each Fund may write call options, but only on a covered basis; that is,
the Fund will own the underlying security. The exercise price of a call option
may be below, equal to, or above the current market value of the underlying
security at the time the option is written. When a Fund writes a covered call
option, an amount equal to the premium received by the Fund is recorded as an
asset and an equivalent liability. The amount of the liability is subsequently
"marked-to-market" to reflect the current market value of the option written.
The current market value of a written option is the last sale price, or in the
absence of a sale, the last offering price. If a written call option expires
on the stipulated expiration date, or if the Fund enters into a closing
purchase transaction, the Fund realizes a gain (or a loss if the closing
purchase transaction exceeds the premium received when the option was written)
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is extinguished. If a written option is
exercised, the Fund realizes a gain or a loss from the sale of the underlying
security and the proceeds of the sale are increased by the premium originally
received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the stated
exercise price during the option period. The purchaser of a call option owns
or has the right to acquire the security which is the subject of the call
option at any time during
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<PAGE> 81
the option period. During the option period, in return for the premium paid by
the purchaser of the option, a Fund has given up the opportunity for capital
appreciation above the exercise price should the market price of the underlying
security increase, but has retained the risk of loss should the price of the
underlying security decline. During the option period, a Fund may be required
at any time to deliver the underlying security against payment of the exercise
price. This obligation is terminated upon the expiration of the option period
or at such earlier time at which a Fund effects a closing purchase transaction
by purchasing (at a price which may be higher than was received when the call
option was written) a call option identical to the one originally written.
Each of AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND and AIM VALUE FUND,
as non-fundamental policies (a) will not write covered call options such that
the aggregate value of the securities underlying all such options exceeds 25%
of the value of their respective net assets, (b) will not write, sell or
purchase uncovered call options, straddles, spreads or combinations thereof,
and (c) will only write covered call options for hedging purposes and will not
use leverage in doing so.
PUT OPTIONS: AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND AND AIM VALUE
FUND
Each of AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND and AIM VALUE
FUND may purchase put options on securities. A put option constitutes a hedge
against a decline in the price of a security owned by a Fund. It may be sold
at a profit or loss depending upon changes in the price of the underlying
security. A put option may be exercised at a profit, provided that the amount
of the decline in the price of the underlying security below the option
exercise price during the option period exceeds the option premium, or a put
option may expire without value. The maximum loss exposure involved in the
purchase of a put option is the cost of the option contract. Each of AIM
GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND and AIM VALUE FUND, as
non-fundamental policies (a) will not purchase put options which exceed 25% of
the value of their respective net assets, (b) will not write or sell put
options, straddles, spreads or combinations thereof, and (c) will only purchase
put options for hedging purposes and will not use leverage in doing so.
COMBINED OPTION POSITIONS: AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND
AND AIM VALUE FUND
The Funds, for hedging purposes, may combine purchases and sales of
options to adjust the risk and return characteristics of a Fund's overall
position. For example, a Fund may purchase a put option and write a covered
call option on the same underlying instrument, in order to construct a combined
position. This technique, called a "collar," enables the Fund to offset the
cost of purchasing a put option with the premium received from writing the call
option. However, by selling the call option, the Fund gives up the ability for
potentially unlimited profit from the stock appreciation. Another possible
combined position would involve writing a covered call option at one strike
price and buying a call option at a higher price, in order to reduce the risk
of the written covered call option in the event of a substantial price
increase. Because combined options positions involve multiple trades, they
result in higher transaction costs and may be more difficult to open and close
out.
SHORT SALES: AIM BALANCED FUND AND AIM HIGH YIELD FUND
Each of AIM BALANCED FUND and AIM HIGH YIELD FUND may from time to time
make short sales of securities which it owns or which it has the right to
acquire through the conversion or exchange of other securities it owns. In a
short sale, a Fund does not immediately deliver the securities sold and does
not receive the proceeds from the sale. A Fund is said to have a short
position in the securities sold until it delivers the securities sold, at which
time it receives the proceeds of the sale. A Fund will neither make short
sales of securities nor maintain a short position unless, at all times when a
short position is open, the Fund owns an equal amount of such securities or
securities convertible into or exchangeable, without payment of any further
consideration, for securities of the same issue as, and equal in amount to, the
securities sold short. This is a technique known as selling short "against the
box." To secure its obligation to deliver the securities sold short, a Fund
will deposit in escrow in a separate account with its custodian, State Street
Bank and Trust Company ("State Street"), an equal amount of the securities sold
short or securities convertible into or exchangeable for such securities.
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<PAGE> 82
Since a Fund ordinarily will want to continue to receive interest and
dividend payments on securities in its portfolio which are convertible into the
securities sold short, the Fund will normally close out a short position by
purchasing and delivering an equal amount of the securities sold short, rather
than by delivering securities which it already holds.
A Fund will make a short sale, as a hedge, when it believes that the price
of a security may decline, causing a decline in the value of a security owned
by the Fund or a security convertible into or exchangeable for such security,
or when the Fund does not want to sell the security it owns, because, among
other reasons, it wishes to defer recognition of gain or loss for federal
income tax purposes. In such case, any future losses in a Fund's long position
should be reduced by a gain in the short position. Conversely, any gain in the
long position should be reduced by a loss in the short position. The extent to
which such gains or losses are reduced will depend upon the amount of the
security sold short relative to the amount a Fund owns, either directly or
indirectly, and, in the case where the Fund owns convertible securities,
changes in the conversion premium. In determining the number of shares to be
sold short against a Fund's position in a convertible security, the anticipated
fluctuation in the conversion premium is considered. A Fund may also make
short sales to generate additional income from the investment of the cash
proceeds of short sales.
FUTURES CONTRACTS: ALL FUNDS EXCEPT AIM MONEY MARKET FUND
In cases of purchases of futures contracts, an amount of liquid assets,
equal to the cost of the futures contracts (less any related margin deposits),
will be segregated with a Fund's custodian to collateralize the position and
ensure that the use of such futures contracts is unleveraged. Unlike when a
Fund purchases or sells a security, no price is paid or received by a Fund upon
the purchase or sale of a futures contract. Initially, a Fund will be required
to deposit with its custodian for the account of the broker a stated amount, as
called for by the particular contract, of liquid assets. This amount is known
as "initial margin." The nature of initial margin in futures transactions is
different from that of margin in securities transactions in that futures
contract margin does not involve the borrowing of funds by the customer to
finance the transactions.
Rather, the initial margin is in the nature of a performance bond or good
faith deposit on the contract which is returned to the Fund upon termination of
the futures contract assuming all contractual obligations have been satisfied.
Subsequent payments, called "variation margin," to and from the broker will be
made on a daily basis as the price of the futures contract fluctuates, making
the long and short positions in the futures contract more or less valuable.
This process is known as "marking-to-market." For example, when a Fund has
purchased a stock index futures contract and the price of the underlying stock
index has risen, that position will have increased in value and the Fund will
receive from the broker a variation margin payment with respect to that
increase in value. Conversely, where a Fund has purchased a stock index
futures contract and the price of the underlying stock index has declined, that
position would be less valuable and the Fund would be required to make a
variation margin payment to the broker. Variation margin payments would be
made in a similar fashion when a Fund has purchased an interest rate futures
contract. At any time prior to expiration of the futures contract, a Fund may
elect to close the position by taking an opposite position which will operate
to terminate the Fund's position in the futures contract. A final
determination of variation margin is then made, additional cash is required to
be paid by or released to the Fund and the Fund realizes a loss or a gain.
A description of the various types of futures contracts utilized by
certain Funds and the identification of those Funds whose investment policies
permit such investments is as follows:
Stock Index Futures Contracts - AIM BALANCED FUND, AIM GLOBAL UTILITIES
FUND, AIM SELECT GROWTH FUND and AIM VALUE FUND ("Equity Funds")
A stock index assigns relative values to the common stocks included in the
index and the index fluctuates with changes in the market values of the common
stocks so included. A stock index futures contract is an agreement pursuant to
which two parties agree to take or make delivery of an amount of cash equal to
a
15
<PAGE> 83
specified dollar amount times the difference between the stock index value at
the close of the last trading day of the contract and the price at which the
futures contract is originally struck. No physical delivery of the underlying
stocks in the index is made. Currently, stock index futures contracts can be
purchased or sold primarily with respect to broad based stock indices such as
the Standard & Poor's 500 Stock Index, the New York Stock Exchange Composite
Index, the American Stock Exchange Major Market Index, the NASDAQ - 100 Stock
Index and the Value Line Stock Index.
The stock indices listed above consist of a spectrum of stocks not limited
to any one industry such as utility stocks. Utility stocks, at most, would be
expected to comprise a minority of the stocks comprising the portfolio of an
index.
Interest Rate Futures Contracts - AIM BALANCED FUND, AIM GLOBAL UTILITIES
FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND
and AIM MUNICIPAL BOND FUND ("Debt Funds")
An interest rate futures contract is an agreement between two parties to
buy and sell a debt security for a set price on a future date. Currently,
there are futures contracts based on long-term U.S. Treasury bonds, U.S.
Treasury notes, U.S. Treasury bills, Eurodollars and the Bond Buyer Municipal
Bond Index.
Foreign Currency Futures Contracts - All Funds (except AIM INTERMEDIATE
GOVERNMENT FUND, AIM MONEY MARKET FUND and AIM MUNICIPAL BOND FUND)
Futures contracts may also be used to hedge the risk of changes in the
exchange rates of foreign currencies.
OPTIONS ON FUTURES CONTRACTS: ALL FUNDS EXCEPT AIM MONEY MARKET FUND
An option on a futures contract gives 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 option exercise period.
The writer of the option is required upon exercise to assume an offsetting
futures position (a short position if the option is a call and a long 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 assumption of
offsetting futures positions by the writer and holder of the option will be
accompanied by delivery of the accumulated cash 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 on a futures contract is exercised on the last trading date 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 price of the futures contract on the expiration date.
A Fund may purchase and sell put and call options on futures contracts in
order to hedge the value of its portfolio against changes in market conditions.
Depending on the pricing of the option compared to either the price of the
futures contract upon which it is based or the price of the underlying
securities or currency, it may or may not be less risky than ownership of the
futures contract or underlying securities or currency.
RISKS AS TO FUTURES CONTRACTS AND RELATED OPTIONS
The use of futures contracts and related options as hedging devices
presents several risks. One risk arises because of the imperfect correlation
between movements in the price of hedging instruments and movements in the
price of the stock, debt securities or foreign currency which are the subject
of the hedge. If the price of a hedging instrument moves less than the price
of the stocks, debt securities or foreign currency which are the subject of the
hedge, the hedge will not be fully effective. If the price of a hedging
instrument moves more than the price of the stock, debt securities or foreign
currency, a Fund will experience either a
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loss or a gain on the hedging instrument which will not be completely offset by
movements in the price of the stock, debt securities or foreign currency which
are the subject of the hedge. The use of options on futures contracts involves
the additional risk that changes in the value of the underlying futures
contract will not be fully reflected in the value of the option.
Successful use of hedging instruments by a Fund is also subject to AIM's
ability to predict correctly movements in the direction of the stock market
(Equity Funds), of interest rates (Debt Funds) or of foreign exchange rates
(foreign currencies). Because of possible price distortions in the futures and
options markets, and because of the imperfect correlation between movements in
the prices of hedging instruments and the investments being hedged, even a
correct forecast by AIM of general market trends may not result in a completely
successful hedging transaction.
It is also possible that where a Fund has sold futures contracts to hedge
its portfolio against a decline in the market, the market may advance and the
value of stocks or debt securities held in a Fund's portfolio may decline. If
this occurred, a Fund would lose money on the futures contracts and also
experience a decline in the value of its portfolio securities. Similar risks
exist with respect to foreign currency hedges.
Positions in futures contracts or options may be closed out only on an
exchange on which such contracts are traded. Although the Funds intend to
purchase or sell futures contracts or purchase options only on exchanges or
boards of trade where there appears to be an active market, there is no
assurance that a liquid market on an exchange or board of trade will exist for
any particular contract or at any particular time. If there is not a liquid
market at a particular time, it may not be possible to close a futures position
or purchase an option at such time. In the event of adverse price movements
under those circumstances, the Fund would continue to be required to segregate
additional liquid assets for payment of maintenance margin on its futures
positions. The extent to which the Fund may engage in futures contracts or
related options will be limited by Internal Revenue Code requirements for
qualification as a regulated investment company and the Funds' intent to
continue to qualify as such. The result of a hedging program cannot be
foreseen and may cause a Fund to suffer losses which it would not otherwise
sustain.
DELAYED DELIVERY AGREEMENTS: ALL FUNDS
Delayed delivery agreements involve commitments by a Fund to dealers or
issuers to acquire securities or instruments at a specified future date beyond
the customary same-day settlement for such securities or instruments. These
commitments may fix the payment price and interest rate to be received on the
investment. Delayed delivery agreements will not be used as a speculative or
leverage technique. Rather, from time to time, AIM can anticipate that cash
for investment purposes will result from, among other things, scheduled
maturities of existing portfolio instruments or from net sales of shares of a
Fund. To assure that a Fund will be as fully invested as possible in
instruments meeting the Fund's investment objective, the Fund may enter into
delayed delivery agreements, but only to the extent of anticipated funds
available for investment during a period of not more than five business days.
Until the settlement date, a Fund will segregate liquid assets of a dollar
value sufficient at all times to make payment for the delayed delivery
securities. No more than 25% of a Fund's total assets will be committed to
delayed delivery agreements and when-issued securities, as described below.
The delayed delivery securities, which will not begin to accrue interest or
dividends until the settlement date, will be recorded as an asset of a Fund and
will be subject to the risk of market fluctuation. The purchase price of the
delayed delivery securities is a liability of a Fund until settlement. Absent
extraordinary circumstances, a Fund will not sell or otherwise transfer the
delayed delivery securities prior to settlement. If cash is not available to a
Fund at the time of settlement, the Fund may be required to dispose of
portfolio securities that it would otherwise hold to maturity in order to meet
its obligation to accept delivery under a delayed delivery agreement. The
Board of Trustees has determined that entering into delayed delivery agreements
does not present a materially increased risk of loss to shareholders, but the
Board of Trustees may restrict the use of delayed delivery agreements if the
risk of loss is determined to be material, or if it affects the stable net
asset value of AIM MONEY MARKET FUND.
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WHEN-ISSUED SECURITIES: ALL FUNDS
Many new issues of securities are offered on a "when-issued" basis, that
is, the date for delivery of and payment for the securities is not fixed at the
date of purchase, but is set after the securities are issued (normally within
forty-five days after the date of the transaction). The payment obligation
and, if applicable, the interest rate that will be received on the securities
are fixed at the time the buyer enters into the commitment. A Fund will only
make commitments to purchase such securities with the intention of actually
acquiring such securities, but the Fund may sell these securities before the
settlement date if it is deemed advisable. No additional when-issued
commitments will be made if as a result more than 25% of a Fund's total assets
would become committed to purchases of when-issued securities and delayed
delivery agreements.
If a Fund purchases a when-issued security, it will direct its custodian
bank to collateralize the when-issued commitment by segregating liquid assets
in the same fashion as required for a delayed delivery agreement. Such
segregated liquid assets will likewise be marked-to-market, and the amount
segregated will be increased if necessary to maintain adequate coverage of the
when-issued commitments.
Securities purchased on a when-issued basis and the securities held in a
Fund's portfolio are subject to changes in market value based upon the public's
perception of the creditworthiness of the issuer and, if applicable, changes in
the level of interest rates. Therefore, if a Fund is to remain substantially
fully invested at the same time that it has purchased securities on a
when-issued basis, there will be a possibility that the market value of the
Fund's assets will fluctuate to a greater degree. Furthermore, when the time
comes for the Fund to meet its obligations under when-issued commitments, the
Fund will do so by using then available cash flow, by sale of the segregated
liquid assets, by sale of other securities or, although it would not normally
expect to do so, by directing the sale of the when-issued securities themselves
(which may have a market value greater or less than the Fund's payment
obligation).
A sale of securities to meet such obligations carries with it a greater
potential for the realization of net short-term capital gains, which are not
exempt from federal income taxes. The value of when-issued securities on the
settlement date may be more or less than the purchase price.
FOREIGN EXCHANGE TRANSACTIONS: ALL FUNDS (EXCEPT AIM INTERMEDIATE GOVERNMENT
FUND, AIM MONEY MARKET FUND AND AIM MUNICIPAL BOND FUND)
Purchases and sales of foreign securities are usually made with foreign
currencies, and consequently a Fund may from time to time hold cash balances in
the form of foreign currencies and multinational currency units. Such foreign
currencies and multinational currency units will usually be acquired on a spot
(i.e., cash) basis at the spot rate prevailing in foreign exchange markets, and
will result in currency conversion costs to a Fund. The Funds attempt to
purchase and sell foreign currencies on as favorable a basis as practicable;
however, some price spread on foreign exchange transactions (to cover service
charges) may be incurred, particularly when a Fund changes investments from one
country to another, or when U.S. dollars are used to purchase foreign
securities. Certain countries could adopt policies which would prevent the
Funds from transferring cash out of such countries, and the Funds may be
affected either favorably or unfavorably by fluctuations in relative exchange
rates while they hold foreign currencies.
RULE 144A SECURITIES
Each of the Funds may purchase securities which, while privately placed,
are eligible for purchase and resale pursuant to Rule 144A under the Securities
Act of 1933 (the "1933 Act"). This Rule permits certain qualified
institutional buyers, such as the Funds, to trade in privately placed
securities even though such securities are not registered under the 1933 Act.
AIM, under the supervision of the Trust's Board of Trustees, will consider
whether securities purchased under Rule 144A are illiquid and thus subject to
the Funds' restriction of investing no more than 15% of their respective net
assets (10% in the case of AIM MONEY
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MARKET FUND) in illiquid securities. Determination of whether a Rule 144A
security is liquid or not is a question of fact. In making this determination
AIM will consider the trading markets for the specific security taking into
account the unregistered nature of a Rule 144A security. In addition, AIM
could consider the (i) frequency of trades and quotes, (ii) number of dealers
and potential purchasers, (iii) dealer undertakings to make a market, and (iv)
nature of the security and of market place trades (for example, the time needed
to dispose of the security, the method of soliciting offers and the mechanics
of transfer). The liquidity of Rule 144A securities will also be monitored by
AIM and, if as a result of changed conditions, it is determined that a Rule
144A security is no longer liquid, a Fund's holdings of illiquid securities
will be reviewed to determine what, if any, action is required to assure that
such Fund does not invest more than 15% of its net assets (10% in the case of
AIM Money Market Fund) in illiquid securities. Investing in Rule 144A
securities could have the effect of increasing the amount of each Fund's
investments in illiquid securities if qualified institutional buyers are
unwilling to purchase such securities.
INVESTMENT RESTRICTIONS
Each Fund is subject to the following restrictions which may not be
changed without approval of the lesser of (i) 67% or more of the Fund's shares
present at a meeting if the holders of more than 50% of the outstanding shares
are present in person or represented by proxy, or (ii) more than 50% of the
Fund's outstanding shares. Any investment restriction that involves a maximum
or minimum percentage of securities or assets shall not be considered to be
violated unless an excess over or a deficiency under the percentage occurs
immediately after, and is caused by, an acquisition or disposition of
securities or utilization of assets by the Fund.
AIM BALANCED FUND
The Fund may not:
1. With respect to 75% of its total assets, purchase the securities
of any issuer if such purchase would cause more than 5% of the value of
its total assets to be invested in the securities of such issuer (except
U.S. Government securities or securities issued by its agencies and
instrumentalities), and except that the Fund may purchase securities of
other investment companies to the extent permitted by applicable law or
exemptive order.
2. Concentrate 25% or more of its investments in a particular
industry.
3. Make short sales of securities or maintain a short position in
securities unless at all times when a short position is open, it owns at
least an equal amount of such securities or owns securities comparable to
or exchangeable for at least an equal amount of such securities.
4. Purchase or sell commodity contracts, except that the Fund may,
as appropriate and consistent with its investment policies and other
investment restrictions, for hedging purposes, write, purchase or sell
options (including puts, calls and combinations thereof), write covered
call options, enter into futures contracts on securities, securities
indices and currencies, options on such futures contracts, forward foreign
currency exchange contracts, forward commitments and repurchase
agreements.
5. Purchase or sell real estate (except that this restriction does
not preclude investments in companies engaged in real estate activities or
in real estate investment trusts or in securities secured by real estate).
6. Borrow money or pledge its assets except that the Fund may enter
into reverse repurchase agreements and except, as a temporary measure for
extraordinary or emergency purposes and not for
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<PAGE> 87
investment purposes, the Fund may borrow from banks (including the Fund's
custodian bank) amounts of up to 33-1/3% of the value of its total assets
(including the amount of such borrowings) less its liabilities (excluding
the amount of such borrowings) and may pledge amounts of up to 33-1/3% of
its total assets to secure such borrowings. The Fund will not purchase
securities while borrowings in an amount in excess of 5% of its total
assets are outstanding. The Fund may not issue senior securities, except
to the extent permitted by the 1940 Act, including permitted borrowings.
7. Make loans, except (a) through the purchase of a portion of an
issue of bonds or other obligations of types commonly offered publicly and
purchased by financial institutions, (b) through the purchase of
short-term obligations (maturing within a year), including repurchase
agreements, and (c) the Fund may lend its portfolio securities, provided
that the value of the securities loaned does not exceed 33-1/3% of the
Fund's total assets.
AIM GLOBAL UTILITIES FUND
The Fund may not:
1. Purchase the securities of any issuer if such purchase would
cause more than 5% of the value of its assets to be invested in the
securities of such issuer, except that the Fund may purchase securities of
other investment companies to the extent permitted by applicable law or
exemptive order.
2. Purchase the securities of any issuer if such purchase would
cause more than 5% of the voting securities, or more than 10% of the
securities of any class of such issuer, to be held by the Fund, except
that the Fund may purchase securities of other investment companies to the
extent permitted by applicable law or exemptive order.
3. Make short sales of securities or purchase securities on margin,
but it may obtain such short-term credits as are necessary for the
clearance of purchases and sales of securities and may make margin
payments in connection with transactions in financial futures contracts
and options thereon.
4. Act as a securities underwriter.
5. Make loans, except (a) through the purchase of a portion of an
issue of bonds or other obligations of types commonly offered publicly and
purchased by financial institutions, and (b) through the purchase of
short-term obligations (maturing within a year), including repurchase
agreements, and (c) the Fund may lend its portfolio securities, provided
that the value of the securities loaned does not exceed 33-1/3% of the
Fund's total assets.
6. Borrow money or mortgage, pledge, or hypothecate its assets,
except that the Fund may enter into financial futures contracts, and
except that the Fund may borrow from banks to pay for redemptions and for
temporary purposes in an amount not exceeding one-third of the value of
its total assets (including the amount of such borrowings) less its
liabilities (excluding the amount of such borrowings) and may secure such
borrowings by pledging up to one-third of the value of its total assets.
For the purpose of this restriction, collateral arrangements with respect
to margin for a financial futures contract are not deemed to be a pledge
of assets. The Fund will not purchase securities while borrowings in an
amount in excess of 5% of its total assets are outstanding.
7. Buy or sell commodities or commodity contracts, although the Fund
may purchase and sell financial futures contracts and options thereon for
hedging purposes.
8. Invest in real estate, although the Fund may purchase securities
secured by real estate or interests therein or issued by issuers which
invest in real estate.
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AIM High Yield Fund
The Fund may not:
1. Borrow money or issue senior securities or mortgage, pledge, or
hypothecate its assets, except that the Fund may enter into financial
futures contracts, and borrow from banks to pay for redemptions and for
temporary purposes in an amount not exceeding one-third of the value of
its total assets (including the amount of such borrowings) less its
liabilities (excluding the amount of such borrowings) and may secure such
borrowings by pledging up to one-third of the value of its total assets.
For the purpose of this restriction, collateral arrangements with respect
to margin for a financial futures contract are not deemed to be a pledge
of assets. Secured temporary borrowings may take the form of reverse
repurchase agreements, pursuant to which the Fund would sell portfolio
securities for cash and simultaneously agree to repurchase them at a
specified date for the same amount of cash plus an interest component.
The Fund will not purchase securities while borrowings in excess of 5% of
its total assets are outstanding.
2. Make short sales of securities or maintain short positions,
unless, at all times when a short position is open, the Fund owns at least
an equal amount of the securities sold short or owns securities
convertible into or exchangeable for at least an equal amount of such
securities sold short, without the payment of further consideration.
3. Purchase or sell real estate or interests therein, but the Fund
may purchase and sell (a) securities which are secured by real estate,
and (b) the securities of companies which invest or deal in real estate or
interests therein, including real estate investment trusts.
4. Act as a securities underwriter.
5. Purchase or sell commodities or commodity contracts, other than
financial futures contracts and options thereon.
6. With respect to 75% of the value of its total assets, invest more
than 5% of the market value of its total assets in the securities of any
one issuer, other than obligations of or guaranteed by the U.S. Government
or any of its agencies or instrumentalities, except that the Fund may
purchase securities of other investment companies to the extent permitted
by applicable law or exemptive order.
7. Concentrate 25% or more of the value of its total assets in the
securities of issuers which conduct their principal business activities in
the same industry. Gas, electric, water and telephone companies as well
as banks, credit institutions, and insurance companies will be considered
to be in separate industries.
8. Make loans, except that the Fund may lend its portfolio
securities provided that the value of the securities loaned does not
exceed 33-1/3% of its total assets, and except that the Fund may enter
into repurchase agreements.
9. Purchase securities on margin, except that the Fund may obtain
such short-term credits as may be necessary for the clearance of purchases
and sales of securities and may make margin payments in connection with
transactions in financial futures contracts and options thereon.
10. Invest in puts, calls, or any combinations thereof, except,
however, that the Fund may invest in financial futures contracts, purchase
and sell options on financial futures contracts, may acquire and hold puts
which relate to equity securities acquired by the Fund when such puts are
attached to or included in a unit with such equity securities, and may
sell covered call options.
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AIM INCOME FUND
The Fund may not:
1. Purchase the securities of any issuer if such purchase would
cause more than 5% of the value of its assets to be invested in the
securities of such issuer (except U.S. Government securities, including
securities issued by its agencies and instrumentalities), and except that
the Fund may purchase securities of other investment companies to the
extent permitted by applicable law or exemptive order.
2. Purchase the securities of any issuer if such purchase would
cause more than 5% of the voting securities, or more than 10% of the
securities of any class of such issuer, to be held by the Fund, except
that the Fund may purchase securities of other investment companies to the
extent permitted by applicable law or exemptive order.
3. Concentrate 25% or more of its investments in a particular
industry.
4. Make short sales of securities or purchase securities on margin,
but it may obtain such short-term credits as are necessary for the
clearance of purchases and sales of securities and may make margin
payments in connection with transactions in financial futures contracts
and options thereon.
5. Act as a securities underwriter.
6. Make loans, except (a) through the purchase of a portion of an
issue of bonds or other obligations of types commonly offered publicly and
purchased by financial institutions, (b) through the purchase of
short-term obligations (maturing within a year), including repurchase
agreements, and (c) the Fund may lend its portfolio securities, provided
that the value of the securities loaned does not exceed 33-1/3% of the
Fund's total assets.
7. Borrow, except that the Fund may enter into financial futures
contracts and that the right is reserved to borrow from banks, provided
that no borrowing may exceed one-third of the value of its total assets
(including the amount of such borrowings) less its liabilities (excluding
the amount of such borrowings) and may secure such borrowings by pledging
up to one-third of the value of its total assets. (For the purposes of
this restriction, collateral arrangements with respect to margin for a
financial futures contract are not deemed to be a pledge of assets.) The
Fund will not purchase securities while borrowings in an amount in excess
of 5% of its total assets are outstanding.
8. Invest in puts, calls, straddles, spreads or any combination
thereof, except, however, that the Fund may purchase and sell options on
financial futures contracts and may sell covered call options.
9. Buy or sell commodities or commodity contracts, although the Fund
may purchase and sell financial futures contracts and options thereon.
10. Invest in real estate, although the Fund may purchase securities
secured by real estate or interests therein or issued by issuers which
invest in real estate.
11. Invest in securities with unlimited liability except for
assessability allowed by statutes with respect to wages.
12. Issue senior securities except to the extent permitted by the
1940 Act, including permitted borrowing.
AIM INTERMEDIATE GOVERNMENT FUND
The Fund may not:
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1. Purchase the securities of any issuer if such purchase would
cause more than 5% of the value of its assets to be invested in the
securities of such issuer (except U.S. Government securities, including
securities issued by its agencies and instrumentalities, as described
under "Investment Objectives" in the Prospectus, and except that the Fund
may purchase securities of other investment companies to the extent
permitted by applicable law or exemptive order).
2. Purchase the securities of any issuer if such purchase would
cause more than 5% of the voting securities, or more than 10% of the
securities of any class of such issuer, to be held by the Fund (except
U.S. Government securities including securities issued by its agencies and
instrumentalities, as described under "Investment Objectives" in the
Prospectus), and except that the Fund may purchase securities of other
investment companies to the extent permitted by applicable law or
exemptive order.
3. Concentrate 25% or more of its investments in a particular
industry.
4. Make short sales of securities or purchase securities on margin,
but it may obtain such short-term credits as are necessary for the
clearance of purchases and sales of securities and may make margin
payments in connection with transactions in financial futures contracts
and options thereon.
5. Act as a securities underwriter.
6. Make loans, except (a) through the purchase of a portion of an
issue of bonds or other obligations of types commonly offered publicly and
purchased by financial institutions, (b) through the purchase of
short-term obligations (maturing within a year), including repurchase
agreements, and (c) the Fund may lend its portfolio securities provided
that the value of the securities loaned does not exceed 33-1/3% of the
Fund's total assets.
7. Borrow money or mortgage, pledge, or hypothecate its assets,
except that the Fund may enter into financial futures contracts, and
except that the Fund may borrow from banks to pay for redemptions and for
temporary purposes in an amount not exceeding one-third of the value of
its total assets (including the amount of such borrowings) less its
liabilities (excluding the amount of such borrowings) and may secure such
borrowings by pledging up to one-third of the value of its total assets.
For the purpose of this restriction, collateral arrangements with respect
to margin for a financial futures contract are not deemed to be a pledge
of assets. The Fund will not purchase securities while borrowings in an
amount in excess of 5% of its total assets are outstanding.
8. Invest in puts, calls, straddles, spreads or any combination
thereof, except, however, that the Fund may purchase and sell options on
financial futures contracts and may sell covered call options.
9. Buy or sell commodities or commodity contracts, although the Fund
may purchase and sell financial futures contracts and options thereon.
10. Invest in real estate, although the Fund may purchase securities
secured by real estate or interests therein or issued by issuers which
invest in real estate.
AIM MONEY MARKET FUND
The Fund may not:
1. Purchase the securities of any issuer if such purchase would
cause more than 5% of the value of its assets to be invested in the
securities of such issuer, except (a) U.S. Government securities,
including securities issued by its agencies and instrumentalities, (b) to
the extent permitted by Rule 2a-7 under the 1940 Act, as amended from time
to time, and (c) that the Fund may purchase securities of other investment
companies to the extent permitted by applicable law or exemptive order.
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2. Concentrate 25% or more of its investments in a particular
industry, provided that this limitation does not apply to securities
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, and obligations of domestic banks.
3. Pledge, mortgage or hypothecate more than 33-1/3% of the total
assets of the Fund, except that reverse repurchase agreements and loans of
portfolio securities are not deemed to involve pledging, mortgaging or
hypothecating assets.
4. Purchase securities on margin or make short sales of securities,
except as is necessary for the clearance of purchases and sales of
securities.
5. Underwrite securities (except to the extent that the purchase of
securities either directly from the issuer or from an underwriter for an
issuer and the later disposition of such securities may be deemed an
underwriting).
6. Make loans, except it may purchase instruments and securities
permitted by the investment objectives and policies, it may invest in
reverse repurchase agreements, and it may loan portfolio securities in an
amount equal to one-third of its total assets.
7. Borrow money or issue senior securities (which term shall not
include delayed delivery and when-issued securities) except as a temporary
measure for extraordinary or emergency purposes and except that the Fund
may enter into reverse repurchase agreements in amounts, inclusive of all
borrowings, up to one-third of the value of the Fund's total assets
(including the amount of such borrowings) less its liabilities (excluding
the amount of such borrowings) at the time it enters into such agreements.
The Fund will not purchase portfolio securities while borrowings in an
amount in excess of 5% of its total assets are outstanding.
8. Invest in puts or calls or engage in arbitrage transactions.
9. Buy or sell commodities or commodity futures contracts.
10. Invest in real estate, although the Fund may purchase securities
secured by real estate or interests therein or issued by issuers which
invest in real estate or interests therein.
AIM MUNICIPAL BOND FUND
The Fund may not:
1. Invest less than 65% of its total assets in securities other than
municipal bonds.
2. Purchase the securities of any issuer if such purchase would
cause more than 5% of the value of its assets to be invested in the
securities of such issuer (except U.S. Government securities, including
securities issued by its agencies and instrumentalities, and except that
the Fund may purchase securities of other investment companies to the
extent permitted by applicable law or exemptive order). For the purpose
of this restriction and that set forth in restriction 3, the Fund will
regard each state and each political subdivision, agency or
instrumentality of such state and each multi-state agency of which such
state is a member as a separate issuer.
3. Purchase the securities of any issuer if such purchase would
cause more than 10% of the debt obligations of such issuer to be held by
the Fund.
4. Purchase securities if such purchase would cause, at the time of
purchase, 25% or more of total Fund assets to be invested in any one
industry. Investment in municipal bonds and obligations issued
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or guaranteed by the U.S. Government, its agencies, authorities or
instrumentalities does not involve investment in any industry.
5. Make short sales of securities or purchase securities on margin,
but it may obtain such short-term credits as are necessary for the
clearance of purchases and sales of securities and may make margin
payments in connection with transactions in financial futures contracts
and options thereon and municipal bond index futures contracts.
6. Act as a securities underwriter except to the extent that it may
be deemed to be an underwriter under the Securities Act of 1933 when
purchasing or selling a portfolio security.
7. Make loans, except that it may purchase debt instruments,
including repurchase agreements maturing within seven days, as permitted
by the investment objective and policies of the Fund, and except that it
may lend its portfolio securities provided that the value of the
securities loaned does not exceed 33-1/3% of its total assets.
8. Borrow, except that the Fund may enter into financial futures
contracts and municipal bond index futures contracts and that the right is
reserved to borrow from banks, provided that no borrowing may exceed
one-third of the value of its total assets (including the amount of such
borrowings) less its liabilities (excluding the amount of such borrowings)
and may secure such borrowings by pledging up to one-third of the value of
its total assets. (For the purposes of this restriction, collateral
arrangements with respect to margin for a financial or a municipal bond
index futures contract are not deemed to be a pledge of assets.) The Fund
will not purchase securities while borrowings in excess of 5% of its total
assets are outstanding.
9. Invest in puts, calls, straddles, spreads or any combination
thereof, except, however, that the Fund may purchase and sell options on
financial futures contracts and may sell covered call options.
10. Buy or sell commodities or commodity contracts, although the
Fund may purchase and sell financial futures contracts and options thereon
and municipal bond index futures contracts.
11. Invest in real estate, although the Fund may purchase securities
secured by real estate or interests therein or issued by issuers
which invest in real estate.
AIM SELECT GROWTH FUND
The Fund may not:
1. Purchase the securities of any issuer if such purchase would
cause more than 5% of the value of its assets to be invested in the
securities of such issuer (except U.S. Government securities, including
securities issued by its agencies and instrumentalities), and except that
the Fund may purchase securities of other investment companies to the
extent permitted by applicable law or exemptive order.
2. Purchase the securities of any issuer if such purchase would
cause more than 5% of the voting securities, or more than 10% of the
securities of any class of such issuer, to be held by the Fund, except
that the Fund may purchase securities of other investment companies to the
extent permitted by applicable law or exemptive order.
3. Concentrate 25% or more of its investments in a particular
industry.
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<PAGE> 93
4. Make short sales of securities or purchase securities on margin,
but it may obtain such short-term credits as are necessary for the
clearance of purchases and sales of securities and may make margin
payments in connection with transactions in stock index futures contracts
and options thereon.
5. Act as a securities underwriter.
6. Make loans, except (a) through the purchase of a portion of an
issue of bonds or other obligations of types commonly offered publicly and
purchased by financial institutions, (b) through the purchase of
short-term obligations (maturing within a year), including repurchase
agreements, and (c) the Fund may lend its portfolio securities, provided
that the value of the securities loaned does not exceed 33-1/3% of the
Fund's total assets.
7. Borrow, except that the Fund may enter into stock index futures
contracts and that the right is reserved to borrow from banks, provided
that no borrowing may exceed one-third of the value of its total assets
(including the amount of such borrowings) less its liabilities (excluding
the amount of such borrowings) and may secure such borrowings by pledging
up to one-third of the value of its total assets. For the purposes of
this restriction, collateral arrangements with respect to margin for a
stock index futures contract are not deemed to be a pledge of assets. The
Fund will not purchase securities while borrowings in excess of 5% of its
total assets are outstanding.
.
8. Buy or sell commodities or commodity contracts, although the Fund
may invest in financial futures and options thereon for hedging purposes.
9. Invest in real estate, although the Fund may purchase securities
secured by real estate or interests therein or issued by issuers which
invest in real estate.
AIM VALUE FUND
The Fund may not:
1. Purchase the securities of any issuer if such purchase would
cause more than 5% of the value of its assets to be invested in the
securities of such issuer (except U.S. Government securities, including
securities issued by its agencies and instrumentalities, and except that
the Fund may purchase securities of other investment companies to the
extent permitted by applicable law or exemptive order).
2. Purchase the securities of any issuer if such purchase would
cause more than 5% of the voting securities, or more than 10% of the
securities of any class of such issuer, to be held by the Fund, except
that the Fund may purchase securities of other investment companies to the
extent permitted by applicable law or exemptive order.
3. Concentrate 25% or more of its investments in a particular
industry.
4. Make short sales of securities or purchase securities on margin,
but it may obtain such short-term credits as are necessary for the
clearance of purchases and sales of securities and may make margin
payments in connection with transactions in stock index futures contracts
and options thereon.
5. Act as a securities underwriter.
6. Make loans, except (a) through the purchase of a portion of an
issue of bonds or other obligations of types commonly offered publicly and
purchased by financial institutions, (b) through the purchase of
short-term obligations (maturing within a year), including repurchase
agreements, and (c) the Fund may lend its portfolio securities, provided
that the value of the securities loaned does not exceed 33-1/3% of the
Fund's total assets.
26
<PAGE> 94
7. Borrow, except that the Fund may enter into stock index futures
contracts and that the right is reserved to borrow from banks, provided
that no borrowing may exceed one-third of the value of its total assets
(including the amount of such borrowings) less its liabilities (excluding
the amount of such borrowings) and may secure such borrowings by pledging
up to one-third of the value of its total assets. (For the purposes of
this restriction, collateral arrangements with respect to margin for a
stock index futures contract are not deemed to be a pledge of assets.)
The Fund will not purchase securities while borrowings in an amount in
excess of 5% of its total assets are outstanding.
8. Buy or sell commodities or commodity contracts, although the Fund
may invest in financial futures and options thereon for hedging purposes.
9. Invest in real estate, although the Fund may purchase securities
secured by real estate or interests therein or issued by issuers which
invest in real estate.
As a non-fundamental policy, none of the Funds will invest for the purpose
of influencing management or exercising control, except that a Fund may
purchase securities of other investment companies to the extent permitted by
applicable law or exemptive order.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of February 2, 1998, the trustees and officers of the Trust as a group
owned less than 1% of all classes of outstanding shares of the Trust; except
that the trustees and officers as a group owned 10.89% of the outstanding AIM
Cash Reserve Shares of AIM MONEY MARKET FUND, and 1.48% of the outstanding
Class A shares of AIM MUNICIPAL BOND FUND.
To the best knowledge of the Trust, the names and addresses of the holders
of 5% or more of the outstanding shares of each class of the Trust's equity
securities as of February 2, 1998, and the percentage of the outstanding shares
held by such holders are set forth below:
<TABLE>
<CAPTION>
Percent
Owned of
Percent Record
Name and Address Owned of and
Fund of Owner Record* Beneficially
- ---- ---------------- -------- ------------
<S> <C> <C> <C>
AIM Balanced Fund - MLTC TTEE FBO 7.16% -0-
Class A shares Qualified Retirement Plans
Merrill Lynch Grp Empl Svcs
265 Davidson Ave. 4th Fl.
Somerset, NJ 08873
Merrill Lynch, Pierce, 6.41% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
</TABLE>
- ----------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
27
<PAGE> 95
<TABLE>
<CAPTION>
Percent
Owned of
Percent Record
Name and Address Owned of and
Fund of Owner Record* Beneficially
- ---- ---------------- -------- ------------
<S> <C> <C> <C>
Class B shares Merrill Lynch, Pierce, 12.83% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
Class C shares Merrill Lynch, Pierce, 33.29% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
AIM Global Utilities Fund - Merrill Lynch, Pierce, 8.39% -0-
Class B shares Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
Class C shares Wheat First Securities, Inc. 34.13% -0-
Penelope R. Best
6068 Barnhill Ct.
Frederick, MD 21701
Bear Stearns Securities Corp. 6.04% -0-
FBO 629-01820-10
1 Metrotech Center North
Brooklyn, NY 11201
ITC Cust. IRA FBO
Arlie Albeck
342 N. 75th St.
Seattle, WA 98103
AIM High Yield Fund - Merrill Lynch, Pierce, 7.65% -0-
Class A shares Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
</TABLE>
- ----------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
28
<PAGE> 96
<TABLE>
<CAPTION>
Percent
Owned of
Percent Record
Name and Address Owned of and
Fund of Owner Record* Beneficially
- ---- ---------------- -------- ------------
<S> <C> <C> <C>
Class B shares Merrill Lynch, Pierce, 16.74% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
Class C shares Merrill Lynch, Pierce, 28.51% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
AIM Income Fund - Merrill Lynch, Pierce, 5.47% -0-
Class A shares Fenner & Smith
Mutual Fund Operations
P.O. Box 45286
Jacksonville, FL 32232-5286
Class B shares Merrill Lynch, Pierce, 11.25% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
Class C shares Merrill Lynch, Pierce, 21.58% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
Sharon Copeland Tr Young's Inc. 6.20% -0-
401K PSP Sharon Copeland Ttee
Dtd. 01/17/80
3121 SE 6th
Topeka, KS 66607
ITC Cust. IRA FBO 5.74% -0-
Charles Dee Slovak
2532 Yorktown
Houston, TX 77056
</TABLE>
- ----------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
29
<PAGE> 97
<TABLE>
<CAPTION>
Percent
Owned of
Percent Record
Name and Address Owned of and
Fund of Owner Record* Beneficially
- ---- ---------------- -------- ------------
<S> <C> <C> <C>
AIM Intermediate Government Fund - Merrill Lynch, Pierce, 8.00% -0-
Class A shares Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
Class B shares Merrill Lynch, Pierce, 17.68% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
Class C shares ITC Cust. IRA FBO 18.59% -0-
John R. Baker
Plan 09/16/92
301 Elizabeth St.
Summerville, SC 29483
ITC Cust. 403B Plan 16.74% -0-
First-Plymouth Conge. Church FBO
John M. Levick Jr.
2454 Ryons St.
Lincoln, NE 68502
Arden W. Richards and 15.11% -0-
Velma T. Richards
2401 E. Seventh St.
Tucson, AZ 85719
Victor P. Biasella Ttee 7.46% -0-
Victor P. Biasella Rev. Liv. Tr.
Dtd. 11-07-96
1509 Bailey Rd.
Cuyohoga Falls, OH 44221
Merrill Lynch, Pierce 5.50% -0-
Fenner Smith
Mutual Fund Operations
P.O. Box 45286
Jacksonville, FL 32232-5286
</TABLE>
- ----------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
30
<PAGE> 98
<TABLE>
<CAPTION>
Percent
Owned of
Percent Record
Name and Address Owned of and
Fund of Owner Record* Beneficially
- ---- ---------------- -------- ------------
<S> <C> <C> <C>
AIM Money Market Fund - Fahnestock & Co. Inc. FBO 5.34% -0-
Class C shares Frederick Mark Kuhlmann Rev. Lvg. Tr.
125 Broad St.
New York, NY 10004
ITC Cust. Rollover IRA FBO 5.07% -0-
Everett M. Devaney
7015 Wensley Way
Jacksonville, FL 32217
AIM Cash Reserve Shares A I M Advisors, Inc. 10.77% -0-
11 Greenway Plaza
Suite 100
Attn: David Hessel
Houston, TX 77046
Charles T. Bauer and 7.36% -0-
Ruth J. Bauer
11 Greenway Plaza, Suite 100
Houston, TX 77046
AIM Fund Services FBO 5.39% -0-
AIM Family of Fund Shareholders
Red. Acct., Attn: Rob Frazer
11 Greenway Plaza
Houston, TX 77046
AIM Municipal Bond Fund - Merrill Lynch, Pierce 11.76% -0-
Class B shares Fenner Smith
Mutual Fund Operations
P.O. Box 45286
Jacksonville, FL 32232-5286
Class C shares Merrill Lynch, Pierce, 23.75% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
Ellen D. Rogers 13.67% -0-
2316 Brookmanor Dr.
Birmingham, AL 35223
</TABLE>
- ----------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
31
<PAGE> 99
<TABLE>
<CAPTION>
Percent
Owned of
Percent Record
Name and Address Owned of and
Fund of Owner Record* Beneficially
- ---- ---------------- -------- ------------
<S> <C> <C> <C>
Patricia C. Chernow 13.43% -0-
4 Fox Run Ln.
Westport, CT 06880
Donaldson Lufkin Jenrette 11.42% -0-
Securities Corp. Inc.
P.O. Box 2052
Jersey City, NY 07303
Alice R. St John 8.54% -0-
600 6th Avenue S.E.
Cullman, AL 35055
NFSC FEBO #ASX-112330 6.95% -0-
Carl H. Sorgen
P.O. Box 310
Port Clinton, Oh 43452
Massih Zahedirad and 6.87% -0-
Atyeh Zahedirad
2219 Fiesta Dr.
Newport Beach, CA 92668
AIM Select Growth Fund - Merrill Lynch, Pierce, 17.00% -0-
Class B shares Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
Class C shares Merrill Lynch, Pierce, 48.77% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
Patricia C. Chernow 9.73% -0-
4 Fox Run Ln.
Westport, CT 06880
AIM Value Fund - Merrill Lynch, Pierce, 9.58% -0-
Class A shares Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
</TABLE>
- ----------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
32
<PAGE> 100
<TABLE>
<CAPTION>
Percent
Owned of
Percent Record
Name and Address Owned of and
Fund of Owner Record* Beneficially
- ---- ---------------- -------- ------------
<S> <C> <C> <C>
Class B shares Merrill Lynch, Pierce, 16.21% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
Class C shares Merrill Lynch, Pierce, 31.90% -0-
Fenner & Smith
Mutual Fund Operations
P. O. Box 45286
Jacksonville, FL 32232-5286
</TABLE>
- ----------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
MANAGEMENT OF THE TRUST
TRUSTEES AND OFFICERS
The trustees and officers of the Trust and their principal occupations
during at least the last five years are set forth below. Unless otherwise
indicated, the address of each trustee and officer is 11 Greenway Plaza, Suite
100, Houston, Texas 77046.
<TABLE>
<CAPTION>
POSITIONS
HELD WITH PRINCIPAL OCCUPATION DURING AT LEAST
NAME, ADDRESS AND AGE REGISTRANT THE PAST 5 YEARS
- --------------------- ---------- ------------------------------------
<S> <C> <C>
*CHARLES T. BAUER (79) Trustee and Chairman of the Board of Directors, A I M Management
Chairman Group Inc., A I M Advisors, Inc., A I M Capital
Management, Inc., A I M Distributors, Inc., A I M Fund
Services, Inc. and Fund Management Company; and Vice
Chairman and Director, AMVESCAP PLC.
BRUCE L. CROCKETT (54) Trustee Director, ACE Limited (insurance company). Formerly,
906 Frome Lane Director, President and Chief Executive Officer, COMSAT
McLean, VA 22102 Corporation and Chairman, Board of Governors of INTELSAT
(international communications company).
</TABLE>
- -------------------------
* A trustee who is an "interested person" of the Trust and A I M
Advisors, Inc. as defined in the 1940 Act.
33
<PAGE> 101
<TABLE>
<CAPTION>
POSITIONS
HELD WITH PRINCIPAL OCCUPATION DURING AT LEAST
NAME, ADDRESS AND AGE REGISTRANT THE PAST 5 YEARS
- --------------------- ---------- ------------------------------------
<S> <C> <C>
OWEN DALY II (73) Trustee Director, Cortland Trust Inc. (investment company).
Six Blythewood Road Formerly, Director, CF & I Steel Corp., Monumental Life
Baltimore, MD 21210 Insurance Company and Monumental General Insurance
Company; and Chairman of the Board of Equitable
Bancorporation.
JACK FIELDS (46) Trustee Chief Executive Officer, Texana Global, Inc. (foreign
Jetero Plaza, Suite E trading company). Formerly, Member of the U.S. House of
8810 Will Clayton Parkway Representatives.
Humble, TX 77338
**CARL FRISCHLING (61) Trustee Partner, Kramer, Levin, Naftalis & Frankel (law firm).
919 Third Avenue Director, ERD Waste, Inc. (waste management company),
New York, NY 10022 Aegis Consumer Finance (auto leasing company) and Lazard
Funds, Inc. (investment companies). Formerly, Partner,
Reid & Priest (law firm); and prior thereto, Partner,
Spengler Carlson Gubar Brodsky & Frischling (law firm).
*ROBERT H. GRAHAM (51) Trustee and Director, President and Chief Executive Officer, A I M
President Management Group Inc.; Director and 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.
JOHN F. KROEGER (73) Trustee Director, Flag Investors International Fund, Inc., Flag
37 Pippins Way Investors Emerging Growth Fund, Inc., Flag Investors
Morristown, NJ 07960 Telephone Income Fund, Inc., Flag Investors Equity
Partners Fund, Inc., Total Return U.S. Treasury Fund,
Inc., Flag Investors Intermediate Term Income Fund, Inc.,
Managed Municipal Fund, Inc., Flag Investors Value
Builder Fund, Inc., Flag Investors Maryland Intermediate
Tax-Free Income Fund, Inc., Flag Investors Real Estate
Securities Fund, Inc., Alex. Brown Cash Reserve Fund,
Inc. and North American Government Bond Fund, Inc.
(investment companies). Formerly, Consultant, Wendell &
Stockel Associates, Inc. (consulting firm).
</TABLE>
- -------------------------
** A trustee who is an "interested person" of the Trust as defined in the
1940 Act.
* A trustee who is an "interested person" of the Trust and A I M
Advisors, Inc. as defined in the 1940 Act.
34
<PAGE> 102
<TABLE>
<CAPTION>
POSITIONS
HELD WITH PRINCIPAL OCCUPATION DURING AT LEAST
NAME, ADDRESS AND AGE REGISTRANT THE PAST 5 YEARS
- --------------------- ---------- ------------------------------------
<S> <C> <C>
LEWIS F. PENNOCK (55) Trustee Attorney in private practice in Houston, Texas.
6363 Woodway, Suite 825
Houston, TX 77057
IAN W. ROBINSON (75) Trustee Formerly, Executive Vice President and Chief Financial
183 River Drive Officer, Bell Atlantic Management Services, Inc.
Tequesta, FL 33469 (provider of centralized management services to telephone
companies); Executive Vice President, Bell Atlantic
Corporation (parent of seven telephone companies); and
Vice President and Chief Financial Officer, Bell
Telephone Company of Pennsylvania and Diamond State
Telephone Company.
LOUIS S. SKLAR (58) Trustee Executive Vice President, Development and Operations,
Transco Tower, 50th Floor Hines Interests Limited Partnership (real estate
2800 Post Oak Blvd. development).
Houston, TX 77056
***JOHN J. ARTHUR (53) Senior Vice Director, Senior Vice President and Treasurer, A I M
President and Advisors, Inc.; Vice President and Treasurer, A I M
Treasurer Management Group Inc., A I M Capital Management, Inc.,
A I M Distributors, Inc., A I M Fund Services, Inc. and
Fund Management Company.
GARY T. CRUM (50) Senior Vice Director and President, A I M Capital Management, Inc.;
President Director and Senior Vice President, A I M Management
Group Inc. and A I M Advisors, Inc.; and Director, A I M
Distributors, Inc. and AMVESCAP PLC.
***CAROL F. RELIHAN (43) Senior Vice Director, Senior Vice President, General Counsel and
President Secretary, A I M Advisors, Inc.; Vice President, General
and Secretary 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.
DANA R. SUTTON (39) Vice President Vice President and Fund Controller, A I M Advisors, Inc.;
and Assistant and Assistant Vice President and Assistant Treasurer,
Treasurer Fund Management Company.
ROBERT G. ALLEY (49) Vice President Senior Vice President, A I M Capital Management, Inc.;
and Vice President, A I M Advisors, Inc.
</TABLE>
- -------------------------
*** Mr. Arthur and Ms. Relihan are married to each other.
35
<PAGE> 103
<TABLE>
<CAPTION>
POSITIONS
HELD WITH PRINCIPAL OCCUPATION DURING AT LEAST
NAME, ADDRESS AND AGE REGISTRANT THE PAST 5 YEARS
- --------------------- ---------- ------------------------------------
<S> <C> <C>
STUART W. COCO (42) Vice President Senior Vice President, A I M Capital Management, Inc.;
and Vice President, A I M Advisors, Inc.
MELVILLE B. COX (54) Vice President Vice President and Chief Compliance Officer, A I M
Advisors, Inc., A I M Capital Management, Inc., A I M
Distributors, Inc., A I M Fund Services, Inc. and Fund
Management Company.
KAREN DUNN KELLEY (37) Vice President Senior Vice President, A I M Capital Management, Inc.;
and Vice President, A I M Advisors, Inc.
JONATHAN C. SCHOOLAR (36) Vice President Senior Vice President, A I M Capital Management, Inc.;
and Vice President, A I M Advisors, Inc.
</TABLE>
The standing committees of the Board of Trustees are the Audit
Committee, the Investments Committee and the Nominating and Compensation
Committee.
The members of the Audit Committee are Messrs. Crockett, Daly, Fields,
Frischling, Kroeger (Chairman), Pennock, Robinson and Sklar. The Audit
Committee is responsible for meeting with the Funds' auditors to review audit
procedures and results and to consider any matters arising from an audit to be
brought to the attention of the trustees as a whole with respect to the Funds'
fund accounting or its internal accounting controls, and for considering such
matters as may from time to time be set forth in a charter adopted by the Board
of Trustees and such committee.
The members of the Investments Committee are Messrs. Bauer, Crockett,
Daly (Chairman), Fields, Frischling, Kroeger, Pennock, Robinson and Sklar. The
Investments Committee is responsible for reviewing portfolio compliance,
brokerage allocation, portfolio investment pricing issues, interim dividend and
distribution issues, and considering such matters as may from time to time be
set forth in a charter adopted by the Board of Trustees and such committee.
The members of the Nominating and Compensation Committee are Messrs.
Crockett, Daly, Fields, Kroeger, Pennock (Chairman), Robinson and Sklar. The
Nominating and Compensation Committee is responsible for considering and
nominating individuals to stand for election as trustees who are not interested
persons as long as the Trust maintains a distribution plan pursuant to Rule
12b-1 under the 1940 Act, reviewing from time to time the compensation payable
to the dis-interested trustees, and considering such matters as may from time
to time be set forth in a charter adopted by the Board of Trustees and such
committee.
All of the Trust's trustees also serve as directors or trustees of
some or all of the other investment companies managed or advised by AIM. All
of the Trust's executive officers hold similar offices with some or all of the
other investment companies managed or advised by AIM.
Remuneration of Trustees
Each trustee is reimbursed for expenses incurred in connection with
each meeting of the Board of Trustees or any committee thereof. Each Trustee
who is not also an officer of the Trust is compensated for his services
according to a fee schedule which recognizes the fact that such trustee also
serves as a director or trustee of other AIM Funds. Each such trustee receives
a fee, allocated among the AIM Funds, for which he serves as a director or
trustee, which consists of an annual retainer component and a meeting fee
component.
36
<PAGE> 104
Set forth below is information regarding compensation paid or accrued
for each trustee of the Trust:
<TABLE>
<CAPTION>
RETIREMENT
AGGREGATE BENEFITS TOTAL
COMPENSATION ACCRUED COMPENSATION
FROM THE BY ALL FROM ALL AIM
TRUSTEE TRUST(1) AIM FUNDS(2) FUNDS(3)
- ------- ------------ ------------- ------------
<S> <C> <C> <C>
Charles T. Bauer $ 0 $ 0 $ 0
Bruce L. Crockett 19,559 67,774 84,000
Owen Daly II 19,559 103,542 84,000
Jack Fields 16,318 0 71,000
Carl Frischling(4) 19,559 96,520 84,000
Robert H. Graham 0 0 0
John F. Kroeger 19,223 94,132 82,500
Lewis F. Pennock 19,559 55,777 84,000
Ian W. Robinson 19,559 85,912 84,000
Louis S. Sklar 19,447 84,370 83,500
</TABLE>
- ----------------
(1) The total amount of compensation deferred by all Trustees of the Trust
during the fiscal year ended December 31, 1997, including amounts earned
thereon, was $94,233.
(2) During the fiscal year ended December 31, 1997, the total amount of
expenses allocated to the Trust in respect of such retirement benefits was
$112,579. Data reflect compensation estimated for the calendar year ended
December 31, 1997.
(3) Each Trustee serves as a director or trustee of a total of 11
registered investment companies advised by AIM. Data reflect total
compensation for the calendar year ended December 31, 1997.
(4) During the year ended December 31, 1997, 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 each paid $5,966, $4,839, $10,687, $5,159,
$4,849, $6,392, $5,021, $5,583, and $22,577, respectively, in legal fees to Mr.
Frischling's law firm, Kramer, Levin, Naftalis & Frankel for services
rendered.
AIM Funds Retirement Plan for Eligible Directors/Trustees
Under the terms of the AIM Funds Retirement Plan for Eligible
Directors/Trustees (the "Plan"), each trustee (who is not an employee of any of
the AIM Funds, A I M Management Group Inc. or any of their affiliates) may be
entitled to certain benefits upon retirement from the Board of Trustees.
Pursuant to the Plan, the normal retirement date is the date on which the
eligible trustee has attained age 65 and has completed at least five
37
<PAGE> 105
years of continuous service with one or more of the regulated investment
companies managed, administered or distributed by AIM or its affiliates (the
"Applicable AIM Funds"). Each eligible trustee is entitled to receive an
annual benefit from the Applicable AIM Funds commencing on the first day of the
calendar quarter coincident with or following his date of retirement equal to
75% of the retainer paid or accrued by the Applicable AIM Funds for such
trustee during the twelve-month period immediately preceding the trustee's
retirement (including amounts deferred under a separate agreement between the
Applicable AIM Funds and the trustee) for the number of such Trustee's years of
service (not in excess of 10 years of service) completed with respect to any of
the Applicable AIM Funds. Such benefit is payable to each eligible trustee in
quarterly installments. If an eligible trustee dies after attaining the normal
retirement date but before receipt of any benefits under the Plan commences,
the trustee's surviving spouse (if any) shall receive a quarterly survivor's
benefit equal to 50% of the amount payable to the deceased trustee, for no more
than ten years beginning the first day of the calendar quarter following the
date of the trustee's death. Payments under the Plan are not secured or funded
by any Applicable AIM Fund.
Set forth below is a table that shows the estimated annual benefits
payable to an eligible trustee upon retirement assuming the retainer amount
reflected below and various years of service. The estimated credited years of
service for Messrs. Crockett, Daly, Fields, Frischling, Kroeger, Pennock,
Robinson and Sklar are 10, 11, 0, 20, 20, 16, 10 and 8 years, respectively.
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
<TABLE>
<CAPTION>
Annual Retainer Paid
By All AIM Funds
--------------------
<S> <C> <C>
$80,000
Number of 10 $60,000
Years of 9 $54,000
Service With 8 $48,000
Applicable AIM 7 $42,000
Funds 6 $36,000
5 $30,000
</TABLE>
Deferred Compensation Agreements
Messrs. Daly, Frischling, Kroeger, Robinson and Sklar (for purposes of
this paragraph only, the "deferring trustees") have each executed a Deferred
Compensation Agreement (collectively, the "Compensation Agreements"). Pursuant
to the Agreements, the deferring trustees may elect to defer receipt of up to
100% of their compensation payable by the Trust, and such amounts are placed
into a deferral account. Currently, the deferring trustees may select various
AIM Funds in which all or part of their deferral accounts shall be deemed to be
invested. Distributions from the deferring trustees' deferral accounts will be
paid in cash, generally in equal quarterly installments over a period of five
(5) or ten (10) years (depending on the Agreement) beginning on the date the
deferring trustee's retirement benefits commence under the Plan. The Trust's
Board of Trustees, in its sole discretion, may accelerate or extend the
distribution of such deferral accounts after the deferring trustee's
termination of service as a trustee of the Trust. If a deferring trustee dies
prior to the distribution of amounts in his deferral account, the balance of
the deferral account will be distributed to his designated
38
<PAGE> 106
beneficiary in a single lump sum payment as soon as practicable after such
deferring trustee's death. The Compensation Agreements are not funded and,
with respect to the payments of amounts held in the deferral accounts, the
deferring trustees have the status of unsecured creditors of the Trust and of
each other AIM Fund from which they are deferring compensation.
INVESTMENT ADVISORY AND OTHER SERVICES
The Trust, on behalf of each Fund, has entered into a Master
Investment Advisory Agreement and a Master Administrative Services Agreement,
both dated February 28, 1997, with AIM.
The Master Investment Advisory Agreement provides that it will
continue in effect from year to year only if such continuance is specifically
approved at least annually by the Trust's Board of Trustees and by the
affirmative vote of a majority of the trustees who are not parties to the
agreement or "interested persons" of any such party (the "Qualified Trustees")
by votes cast in person at a meeting called for such purpose. The Master
Investment Advisory Agreement was approved by the Trust's Board of Trustees
(including the affirmative vote of all the Qualified Trustees) on December 11,
1996. The Master Investment Advisory Agreement was approved by the Funds'
shareholders on February 7, 1997. The agreement became effective as of
February 28, 1997 and provides that either party may terminate such agreement
on 60 days' written notice without penalty. The agreement terminates
automatically in the event of its assignment.
AIM was organized in 1976, and along with its subsidiaries, manages or
advises over 50 investment company portfolios encompasing 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, A I M Distributors, Inc. ("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 engaged in
the business of investment management on an international basis. Certain of
the directors and officers of AIM are also executive officers of the Trust and
their affiliations are shown under "Management of the Trust" herein.
Subject to the control and periodic review of the Board of Trustees,
AIM determines what investments shall be purchased, held, sold or exchanged for
the account of the Funds and what portion, if any, of the assets of the Funds
shall be held in cash and other temporary investments. Accordingly, the role
of the trustees is not to approve specific investments, but rather to exercise
a control and review function.
AIM and the Trust have adopted a Code of Ethics which requires
investment personnel and certain other employees (a) to pre-clear all personal
securities transactions subject to the Code of Ethics, (b) to file reports or
duplicate confirmations regarding such transactions, (c) to refrain from
personally engaging in (i) short-term trading of a security, (ii) transactions
involving a security within seven days of an AIM Fund transaction involving the
same security, and (iii) transactions involving securities being considered for
investment by an AIM Fund, and (d) to abide by certain other provisions under
the Code of Ethics. The Code of Ethics also prohibits investment personnel and
all other AIM employees from purchasing securities in an initial public
offering. Personal trading reports are reviewed periodically by AIM, and the
Board of Trustees reviews quarterly and annual reports (including information
on any substantial violations of the Code of Ethics). Sanctions for violations
of the Code of Ethics may include censure, monetary penalties, suspension or
termination of employment.
Pursuant to the Master Investment Advisory Agreement, AIM receives a
fee from each of AIM INCOME FUND, AIM INTERMEDIATE GOVERNMENT FUND and AIM
MUNICIPAL BOND FUND calculated at the following annual rates, based on the
average daily net assets of the Fund during the year:
39
<PAGE> 107
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
- ---------- -----------
<S> <C>
First $200 million 0.50%
Next $300 million 0.40%
Next $500 million 0.35%
Amount over $1 billion 0.30%
</TABLE>
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee
from AIM MONEY MARKET FUND calculated at the following annual rates, based on
the average daily net assets of the Fund during the year:
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
- ---------- -----------
<S> <C>
First $1 billion 0.55%
Amount over $1 billion 0.50%
</TABLE>
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee
from AIM BALANCED FUND calculated at the following annual rates, based on the
average daily net assets of the Fund during the year:
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
- ---------- -----------
<S> <C>
First $150 million 0.75%
Amount over $150 million 0.50%
</TABLE>
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee
from AIM HIGH YIELD FUND calculated at the following annual rates, based on the
average daily net assets of the Fund during the year:
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
- ---------- -----------
<S> <C>
First $200 million 0.625%
Next $300 million 0.550%
Next $500 million 0.500%
Amount over $1 billion 0.450%
</TABLE>
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee
from AIM SELECT GROWTH FUND and AIM VALUE FUND calculated at the following
annual rates, based on the average daily net assets of the Fund during the
year:
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
- ---------- -----------
<S> <C>
First $150 million 0.80%
Amount over $150 million 0.625%
</TABLE>
Pursuant to the Master Investment Advisory Agreement, AIM receives a fee
from AIM GLOBAL UTILITIES FUND calculated at the following annual rates, based
on the average daily net assets of the Fund during the year:
40
<PAGE> 108
<TABLE>
<CAPTION>
NET ASSETS ANNUAL RATE
- ---------- -----------
<S> <C>
First $200 million 0.60%
Next $300 million 0.50%
Next $500 million 0.40%
Amount over $1 billion 0.30%
</TABLE>
The Master Investment Advisory Agreement provides that if, for any
fiscal year, the total of all ordinary business expenses of a Fund, including
all investment advisory fees, but excluding brokerage commissions and fees,
taxes, interest and extraordinary expenses, such as litigation costs, exceed
the applicable expense limitations imposed by state securities regulations in
any state in which the Fund's shares are qualified for sale, as such
limitations may be raised or lowered from time to time, the aggregate of all
such investment advisory fees paid by such Fund shall be reduced by the amount
of such excess. The amount of any such reduction to be borne by AIM shall be
deducted from the monthly investment advisory fee otherwise payable to AIM
during such fiscal year. If required pursuant to such state securities
regulations, AIM will reimburse the Fund no later than the last day of the
first month of the next succeeding fiscal year, for any such annual operating
expenses (after reduction of all investment advisory fees in excess of such
limitation).
Each Fund paid to AIM the following management fees net of any expense
limitations and fee waivers for the years ended December 31, 1997, 1996 and
1995:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . . . . $ 4,789,939 $ 2,151,655 $ 666,619
AIM Global Utilities Fund . . . . . . . . . 1,440,692 1,397,762 1,256,220
AIM High Yield Fund . . . . . . . . . . . . 13,632,090 9,277,005 5,717,303
AIM Income Fund . . . . . . . . . . . . . . 1,801,746 1,510,254 1,176,249
AIM Intermediate Government Fund . . . . . . 1,174,166 1,188,121 996,681
AIM Money Market Fund . . . . . . . . . . . 4,586,148 4,136,659 2,589,822
AIM Municipal Bond Fund . . . . . . . . . . 1,532,157 1,417,007 1,356,225
AIM Select Growth Fund . . . . . . . . . . . 3,901,342 2,874,943 1,715,406
AIM Value Fund . . . . . . . . . . . . . . . 72,810,450 50,259,125 25,332,486
</TABLE>
For the fiscal years ended December 31, 1997, 1996 and 1995, AIM waived
advisory fees for each Fund as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . . . . -0- -0- $ 24,176
AIM Global Utilities Fund . . . . . . . . . -0- -0- -0-
AIM High Yield Fund . . . . . . . . . . . . -0- -0- -0-
AIM Income Fund . . . . . . . . . . . . . . -0- -0- -0-
AIM Intermediate Government Fund . . . . . . -0- -0- -0-
AIM Money Market Fund . . . . . . . . . . . -0- -0- -0-
AIM Municipal Bond Fund . . . . . . . . . . -0- -0- -0-
AIM Select Growth Fund . . . . . . . . . . . -0- -0- -0-
AIM Value Fund . . . . . . . . . . . . . . . $ 2,501,999 $ 1,562,359 502,799
</TABLE>
41
<PAGE> 109
For the fiscal years ended December 31, 1997, 1996 and 1995, AIM reimbursed
expenses as follows:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . . . . -0- -0- -0-
AIM Global Utilities Fund . . . . . . . . . -0- -0- -0-
AIM High Yield Fund . . . . . . . . . . . . -0- -0- -0-
AIM Income Fund . . . . . . . . . . . . . . -0- -0- -0-
AIM Intermediate Government Fund . . . . . . -0- -0- -0-
AIM Money Market Fund . . . . . . . . . . . -0- -0- -0-
AIM Municipal Bond Fund . . . . . . . . . . -0- -0- $ 13,200
AIM Select Growth Fund . . . . . . . . . . . -0- -0- -0-
AIM Value Fund . . . . . . . . . . . . . . . -0- -0- -0-
</TABLE>
The Trust pays all expenses not specifically assumed by AIM or AIM
Distributors including compensation and expenses of trustees who are not
directors, officers or employees of AIM, AIM Distributors or any other
affiliates of AIM Management; registration, filing and other fees in connection
with filings with regulatory authorities; the fees and expenses of independent
accountants; costs of printing and mailing registration statements,
prospectuses, proxy statements, and annual and periodic reports to
shareholders; custodian and transfer agent fees; brokerage commissions and
securities transactions costs incurred by the Funds; taxes and corporate fees;
legal fees incurred in connection with the affairs of the Funds; and expenses
of meetings of shareholders and trustees.
AIM, at its own expense, furnishes to the Trust office space and
facilities. AIM furnishes to the Trust all personnel for managing the affairs
of the Trust and each of its series of shares and is reimbursed under the
Master Administrative Services Agreement for the services of a principal
financial officer of the Trust and his staff. The Master Administrative
Services Agreement between the Trust and AIM provides that AIM may perform or
arrange for the provision of certain accounting, and other administrative
services to each Fund which are not required to be performed by AIM under the
Master Investment Advisory Agreement. The Master Administrative Services
Agreement provides that such agreement will continue in effect from year to
year only if such continuance is specifically approved at least annually by the
Trust's Board of Trustees, including the Qualified Trustees, by votes cast in
person at a meeting called for such purpose. The Master Administrative
Services Agreement was approved by the Trust's Board of Trustees (including the
Qualified Trustees) on December 11, 1996, and became effective as of February
28, 1997.
The Funds paid AIM the following amounts, which represented the
indicated annualized percentage of average net assets for such period, as
reimbursement of administrative services costs for the years ended December 31,
1997, 1996 and 1995:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
PERCENTAGE PERCENTAGE PERCENTAGE
OF AVERAGE OF AVERAGE OF AVERAGE
AMOUNT PAID NET ASSETS AMOUNT PAID NET ASSETS AMOUNT PAID NET ASSETS
----------- ---------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
AIM Balanced Fund . . . . . . . $ 87,375 .01% 72,493 .02% $ 67,928 .07%
AIM Global Utilities Fund . . . . . 77,375 .03% 80,256 .03% 69,813 .03%
AIM High Yield Fund . . . . . . . 111,767 .004% 98,734 .01% 82,116 .01%
AIM Income Fund . . . . . . . . . . 81,464 .02% 75,132 .02% 82,185 .03%
AIM Intermediate Government Fund . 70,736 .03% 71,348 .03% 71,765 .04%
AIM Money Market Fund . . . . . . . 68,947 .01% 58,665 .01% 55,020 .01%
AIM Municipal Bond Fund . . . . . . 70,780 .02% 71,857 .02% 65,899 .02%
AIM Select Growth Fund . . . . . . 74,201 .01% 72,903 .02% 67,618 .03%
AIM Value Fund . . . . . . . . . 225,784 .002% 196,586 .002% 137,307 .003%
</TABLE>
42
<PAGE> 110
In addition, the Transfer Agency and Service Agreement between the
Trust and A I M Fund Services, Inc. ("AFS"), a registered transfer agent and
wholly owned subsidiary of AIM, provides that AFS will perform certain
shareholder services for the Funds for a fee per account serviced. The
Transfer Agency and Service Agreement provides that AFS will receive a per
account fee plus out-of-pocket expenses to process orders for purchases,
redemptions and exchanges of shares; prepare and transmit payments for
dividends and distributions declared by the Funds; maintain shareholder
accounts and provide shareholders with information regarding the Funds and
their accounts. The Transfer Agency and Service Agreement became effective on
November 1, 1994.
THE DISTRIBUTION PLANS
THE CLASS A AND C PLAN. The Trust has 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 Funds and the AIM Cash Reserve Shares of AIM MONEY MARKET
FUND (the "Class A and C Plan"). Such plan provides that the Class A shares
and AIM Cash Reserve Shares pay 0.25% per annum of their average daily net
assets as compensation to AIM Distributors for the purpose of financing any
activity which is primarily intended to result in the sale of the Class A
shares and AIM Cash Reserve Shares. Under the Class A and C Plan, Class C
shares of the Funds pay compensation to AIM Distributors at an annual rate of
1.00% of the average daily net assets attributable to Class C shares for the
purpose of financing any activity which is primarily intended to result in the
sale of Class C shares. Of such amount, the Funds pay a service fee of 0.25%
of the average daily net assets attributable to Class C shares to selected
dealers and other institutions which furnish continuing personal shareholder
services to their customers who purchase and own Class C shares. Activities
appropriate for financing under the Class A and C Plan include, but are not
limited to, the following: printing of prospectuses and statements of
additional information and reports for other than existing shareholders;
overhead; preparation and distribution of advertising material and sales
literature; expenses of organizing and conducting sales seminars; supplemental
payments to dealers and other institutions such as asset-based sales charges or
as payments of service fees under shareholder service arrangements; and costs
of administering the Class A and C Plan.
THE CLASS B PLAN. The Trust has also adopted a Master Distribution
Plan pursuant to Rule 12b-1 under the 1940 Act relating to Class B shares of
the Funds (the "Class B Plan", and collectively with the Class A and C Plan,
the "Plans"). Under the Class B Plan, each Fund pays compensation to AIM
Distributors at an annual rate of 1.00% of the average daily net assets
attributable to Class B shares. Of such amount, each Fund pays a service fee of
0.25% of the average daily net assets attributable to Class B shares to
selected dealers and other institutions which furnish continuing personal
shareholder services to their customers who purchase and own Class B shares.
Amounts paid in accordance with the Class B Plan may be used to finance any
activity primarily intended to result in the sale of Class B shares, including
but not limited to printing of prospectuses and statements of additional
information and reports for other than existing shareholders; overhead;
preparation and distribution of advertising material and sales literature;
expenses of organizing and conducting sales seminars; supplemental payments to
dealers and other institutions such as asset-based sales charges or as payments
of service fees under shareholder service arrangements; and costs of
administering the Class B Plan. AIM Distributors may transfer and sell its
rights to payments under the Class B Plan in order to finance distribution
expenditures in respect of Class B shares.
BOTH 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 Funds' 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 Funds. 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 Funds; 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 Funds' shares;
assisting in the establishment and maintenance of customer accounts and records
and in the processing
43
<PAGE> 111
of purchase and redemption transactions; investing dividends and any capital
gains distributions automatically in the Funds' shares; and providing such
other information and services as the Funds 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
which 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 a 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 a Fund reasonably may
request, to the extent permitted by applicable statute, rule or regulation.
Similar agreements may be permitted under the Plans for institutions which
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, a 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 Funds during such period at the annual rate of 0.25% of the
average daily net asset value of the Funds' 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 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 Funds to no more than 0.25% per annum of the average daily net assets of
the Funds 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 Funds and their respective
classes.
AIM Distributors does not act as principal, but rather as agent for
the Funds, in making dealer incentive and shareholder servicing payments under
the Plans. These payments are an obligation of the Funds and not of AIM
Distributors.
For the year ended December 31, 1997 (the period from August 4, 1997
to December 31, 1997 for Class C shares), the various classes of the Funds paid
to AIM Distributors the following amounts pursuant to the Plans:
44
<PAGE> 112
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------- -------------- --------------
<S> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . . . $ 1,325,895 $ 3,517,227 $13,018
AIM Global Utilities Fund . . . . . . . . 411,911 832,184 1,555
AIM High Yield Fund . . . . . . . . . . . 3,699,344 13,453,229 42,927
AIM Income Fund . . . . . . . . . . . . . 749,562 1,003,075 3,040
AIM Intermediate Government Fund . . . . 405,373 810,246 3,829
AIM Money Market Fund . . . . . . . . . . 850,644 1,195,121 21,600
AIM Municipal Bond Fund . . . . . . . . . 732,575 398,613 1,511
AIM Select Growth Fund . . . . . . . . . 633,698 3,284,783 2,571
AIM Value Fund . . . . . . . . . . . . . 15,098,832 59,621,333 63,254
</TABLE>
For the year ended December 31, 1997, the AIM Cash Reserve Shares of
AIM MONEY MARKET FUND paid $931,232 to AIM Distributors pursuant to the Class A
and C Plan.
An estimate by category of the allocation of actual fees paid by Class
A shares of the Funds under the Class A and C Plan during the year ended
December 31, 1997, was as follows:
<TABLE>
<CAPTION>
PRINTING COMPENSATION
ADVERTISING AND MAILING SEMINARS TO DEALERS
----------- ----------- -------- ------------
<S> <C> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . . . . $ 68,337 $ 6,145 $15,517 $ 1,235,896
AIM Global Utilities Fund . . . . . . . . . 4,332 393 999 406,187
AIM High Yield Fund . . . . . . . . . . . . 96,139 8,528 20,149 3,574,528
AIM Income Fund . . . . . . . . . . . . . . 15,443 1,356 3,212 729,551
AIM Intermediate Government Fund . . . . . 9,818 898 2,055 392,602
AIM Money Market Fund - Class A shares . . 46,715 4,249 10,073 789,607
AIM Municipal Bond Fund . . . . . . . . . . 18,292 1,648 4,070 708,565
AIM Select Growth Fund . . . . . . . . . . 10,400 914 2,538 619,846
AIM Value Fund . . . . . . . . . . . . . . 414,145 36,818 92,709 14,555,160
</TABLE>
During the year ended December 31, 1997, an estimate by category of
the allocation of actual fees paid by AIM Cash Reserve Shares of AIM MONEY
MARKET FUND under the Class A and C Plan was as follows: $276,956 was spent on
advertising, $24,785 was spent on printing and mailing, $63,399 was spent on
seminars and $566,092 was spent on compensation to dealers.
An estimate by category of the allocation of actual fees paid by the
Funds under the Class B Plan during the year ended December 31, 1997, was as
follows:
45
<PAGE> 113
<TABLE>
<CAPTION>
PRINTING COMPENSATION COMPENSATION
ADVERTISING AND MAILING SEMINARS TO UNDERWRITERS TO DEALERS
----------- ----------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . . $ 333,768 $29,895 $ 70,156 $ 2,637,920 $ 445,488
AIM Global Utilities Fund . . . . . . . 24,665 2,165 5,551 624,138 175,665
AIM High Yield Fund . . . . . . . . . . 1,056,737 94,258 236,236 10,089,922 1,976,076
AIM Income Fund . . . . . . . . . . . . 74,331 6,435 15,889 752,307 154,113
AIM Intermediate Government Fund . . . 44,829 4,042 9,246 607,685 144,445
AIM Money Market Fund . . . . . . . . . 94,721 8,237 21,840 896,341 173,982
AIM Municipal Bond Fund . . . . . . . . 29,306 2,772 5,133 298,960 62,442
AIM Select Growth Fund . . . . . . . . 171,990 15,476 39,466 2,463,587 594,264
AIM Value Fund . . . . . . . . . . . . 3,030,508 268,918 675,024 44,716,000 10,930,883
</TABLE>
An estimate by category of the allocation of actual fees paid by Class
C shares of the Funds under the Class A and C Plan for the period from August
4, 1997 through December 31, 1997, was as follows:
<TABLE>
<CAPTION>
PRINTING COMPENSATION COMPENSATION
ADVERTISING AND MAILING SEMINARS TO UNDERWRITERS TO DEALERS
----------- ----------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . . $ 2,593 $ 238 $ 329 $ 9,763 $ 95
AIM Global Utilities Fund . . . . . . . 367 21 -0- 1,167 1
AIM High Yield Fund . . . . . . . . . . 8,036 722 949 32,195 1,025
AIM Income Fund . . . . . . . . . . . . 351 33 -0- 2,280 376
AIM Intermediate Government Fund . . . 611 47 -0- 2,872 299
AIM Money Market Fund . . . . . . . . . 1,464 129 350 16,200 3,457
AIM Municipal Bond Fund . . . . . . . . 314 61 -0- 1,133 2
AIM Select Growth Fund . . . . . . . . 614 10 -0- 1,929 18
AIM Value Fund . . . . . . . . . . . . 11,735 1,020 1,772 47,440 1,287
</TABLE>
As required by Rule 12b-1, the Plans and related forms of Shareholder
Service Agreements were approved by the Board of Trustees, including a majority
of the trustees who are not "interested persons" (as defined in the 1940 Act)
of the Trust and who have no direct or indirect financial interest in the
operation of the Plans or in any agreements related to the Plans (the
"Independent Trustees"). In approving the Plans in accordance with the
requirements of Rule 12b-1, the trustees considered various factors and
determined that there is a reasonable likelihood that the Plans would benefit
each class of the Funds and its respective shareholders.
The Plans do not obligate the Funds 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 given time, the Funds 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.
The Plans require AIM Distributors to provide the Board of Trustees at
least quarterly with a written report of the amounts expended pursuant to the
Plans and the purposes for which such expenditures were made. The Board of
Trustees reviews these reports in connection with their decisions with respect
to the Plans.
Unless terminated earlier in accordance with their terms, the Plans
continue in effect until June 30, 1998 and thereafter, as long as such
continuance is specifically approved at least annually by the Board of
Trustees, including a majority of the Independent Trustees.
46
<PAGE> 114
The Plans may be terminated by the vote of a majority of the
Independent Trustees, or, with respect to a particular class, by the vote of a
majority of the outstanding voting securities of that class.
Any change in the Plans that would increase materially the
distribution expenses paid by the applicable class requires shareholder
approval; otherwise, it may be amended by the trustees, including a majority of
the Independent Trustees, by votes cast in person at a meeting called for the
purpose of voting upon such amendment. As long as the Plans are in effect, the
selection or nomination of the Independent Trustees is committed to the
discretion of the Independent Trustees. In the event the Class A and C Plan is
amended in a manner which the Board of Trustees determines would materially
increase the charges paid by holders of Class A shares under the Class A and C
Plan, the Class B shares of the Funds will no longer convert into Class A
shares of the Funds unless the Class B shares, voting separately, approve such
amendment. If the Class B shareholders do not approve such amendment, the
Board of Trustees will (i) create a new class of shares of the Funds which is
identical in all material respects to the Class A shares as they existed prior
to the implementation of the amendment, and (ii) ensure that the existing Class
B shares of the Funds will be exchanged or converted into such new class of
shares no later than the date the Class B shares were scheduled to convert into
Class A shares.
The principal differences between the Class A and C Plan and the Class
B Plan are: The Class A and C Plan allows payment to AIM Distributors or to
dealers or financial institutions of up to 0.25% of average daily net assets of
each Fund's Class A shares and AIM Cash Reserve Shares as compared to 1.00% of
such assets of each Fund's Class B and Class C shares; (ii) the Class B Plan
obligates Class B shares to continue to make payments to AIM Distributors
following termination of the Class B shares Distribution Agreement with respect
to Class B shares sold by or attributable to the distribution efforts of AIM
Distributors, unless there has been a complete termination of the Class B Plan
(as defined in such Plan); and (iii) the Class B Plan expressly authorizes AIM
Distributors to assign, transfer or pledge its rights to payments pursuant to
the Class B Plan.
THE DISTRIBUTOR
Information concerning AIM Distributors and the continuous offering of
the Funds' shares is set forth in the Prospectus under the headings "How to
Purchase Shares" and "Terms and Conditions of Purchase of the AIM Funds." A
Master Distribution Agreement, dated February 28, 1997, with AIM Distributors
relating to the Class A and Class C shares of the Funds and the AIM Cash
Reserve Shares of AIM MONEY MARKET FUND was approved by the Board of Trustees
on June 11, 1997. A Master Distribution Agreement, dated February 28, 1997,
with AIM Distributors relating to the Class B shares of the Funds was also
approved by the Board of Trustees on December 11, 1996. Both such Master
Distribution Agreements are hereinafter collectively referred to as the
"Distribution Agreements."
The Distribution Agreements provide that AIM Distributors will bear
the expenses of printing from the final proof and distributing the Funds'
prospectuses and statements of additional information relating to public
offerings made by AIM Distributors pursuant to the Distribution Agreements
(other than those prospectuses and statements of additional information
distributed to existing shareholders of the Funds), and any promotional or
sales literature used by AIM Distributors or furnished by AIM Distributors to
dealers in connection with the public offering of the Funds' shares, including
expenses of advertising in connection with such public offerings. AIM
Distributors has not undertaken to sell any specified number of shares of any
classes of the Funds.
AIM Distributors expects to pay sales commissions from its own
resources to dealers and institutions who sell Class B and Class C shares of
the Funds at the time of such sales.
Payments with respect to Class B shares will equal 4.0% 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
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<PAGE> 115
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. AIM Distributors anticipates that it requires a number of years to
recoup from Class B Plan payments the sales commissions paid to dealers and
institutions in connection with sales of Class B shares. In the future, if
multiple distributors serve a Fund, each such distributor (or its assignee or
transferee) would receive a share of the payments under the Class B Plan based
on the portion of the Fund's Class B shares sold by or attributable to the
distribution efforts of that distributor.
AIM Distributors may pay sales commissions to dealers and institutions
who sell Class C shares of the AIM Funds at the time of such sales. Payments
with respect to Class C shares will equal 1.00% of the purchase price of the
Class C shares sold by the dealer or institution, and will consist of a sales
commission of 0.75% of the purchase price of the Class C shares sold plus an
advance of the first year service fee of 0.25% with respect to such shares.
AIM Distributors will retain all payments received by it relating to Class C
shares for the first year after they are purchased. The portion of the
payments to AIM Distributors under the Class A and C Plan attributable to Class
C shares which constitutes an asset-based sales charge (0.75%) is intended in
part to permit AIM Distributors to recoup a portion of on-going sales
commissions to dealers plus financing costs, if any. After the first full
year, AIM Distributors will make such payments quarterly to dealers and
institutions based on the average net asset value of Class C shares which are
attributable to shareholders for whom the dealers and institutions are
designated as dealers of record.
The Trust (on behalf of any class of any Fund) or AIM Distributors may
terminate the Distribution Agreements on sixty (60) days' written notice
without penalty. The Distribution Agreements will terminate automatically in
the event of their assignment. In the event the Class B shares Distribution
Agreement is terminated, AIM Distributors would continue to receive payments of
asset-based distribution fees in respect of the outstanding Class B shares
attributable to the distribution efforts of AIM Distributors; provided,
however, that a complete termination of the Class B Plan (as defined in such
Plan) would terminate all payments to AIM Distributors. Termination of the
Class B Plan or the Distribution Agreement for Class B shares would not affect
the obligation of a Fund and its Class B shareholders to pay contingent
deferred sales charges.
The following chart reflects the total sales charges paid in
connection with the sale of Class A shares of each Fund and the amount retained
by AIM Distributors for the years ended December 31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
SALES AMOUNT SALES AMOUNT SALES AMOUNT
CHARGES RETAINED CHARGES RETAINED CHARGES RETAINED
------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . $ 4,100,493 $ 672,146 $ 3,212,414 $ 611,603 $ 979,475 $ 165,692
AIM Global Utilities Fund . . . . . . 376,255 57,864 545,746 95,058 745,539 106,920
AIM High Yield Fund . . . . . . . . . 12,115,351 2,043,967 10,452,011 1,965,594 8,338,447 1,388,106
AIM Income Fund . . . . . . . . . . . 1,158,790 203,261 1,346,651 248,078 914,135 154,679
AIM Intermediate Government Fund . . 648,578 116,124 1,056,724 204,498 876,411 144,669
AIM Money Market Fund . . . . . . . . 2,470,808 443,904 3,696,001 736,782 2,845,276 494,184
AIM Municipal Bond Fund . . . . . . . 480,346 87,434 624,162 122,269 684,242 116,667
AIM Select Growth Fund . . . . . . . 895,672 143,669 1,266,626 219,373 892,904 146,533
AIM Value Fund . . . . . . . . . . . 31,118,675 4,660,735 46,277,225 7,792,991 52,075,064 7,659,031
</TABLE>
The following chart reflects the contingent deferred sales charges
paid by Class A and Class B shareholders for the years ended December 31, 1997,
1996 and 1995, and by Class C shareholders for the period from August 4, 1997
through December 31, 1997:
48
<PAGE> 116
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
AIM Balanced Fund . . . . . . . . . . . . . . . . . . . . . . $ 99,075 $ 50,028 $ 92,409
AIM Global Utilities Fund . . . . . . . . . . . . . . . . . . . 88,250 145,184 167,444
AIM High Yield Fund . . . . . . . . . . . . . . . . . . . . . . 581,549 976,702 655,591
AIM Income Fund . . . . . . . . . . . . . . . . . . . . . . . . 45,242 65,445 48,320
AIM Intermediate Government Fund . . . . . . . . . . . . . . . 131,697 82,525 101,233
AIM Money Market Fund . . . . . . . . . . . . . . . . . . . . . 344,545 211,316 256,618
AIM Municipal Bond Fund . . . . . . . . . . . . . . . . . . . . 44,830 49,906 31,956
AIM Select Growth Fund . . . . . . . . . . . . . . . . . . . . 109,547 105,215 169,092
AIM Value Fund . . . . . . . . . . . . . . . . . . . . . . . . 1,752,662 1,988,299 2,052,439
</TABLE>
HOW TO PURCHASE AND REDEEM SHARES
A complete description of the manner in which shares of the Funds may
be purchased appears in the Prospectus under the headings "How to Purchase
Shares," "Terms and Conditions of Purchase of the AIM Funds" and "Special
Plans."
The sales charge normally deducted on purchases of Class A shares is
used to compensate AIM Distributors and participating dealers for their
expenses incurred in connection with the distribution of the Funds' Class A
shares. Since there is little expense associated with unsolicited orders
placed directly with AIM Distributors by persons who, because of their
relationship with the Funds or with AIM and its affiliates, are familiar with
the Funds, or whose programs for purchase involve little expense (e.g., because
of the size of the transaction and shareholder records required), AIM
Distributors believes that it is appropriate and in the Funds' best interests
that such persons, and certain other persons whose purchases result in
relatively low expenses of distribution, be permitted to purchase Class A
shares of the Funds through AIM Distributors without payment of a sales charge.
The persons who may purchase Class A shares of the Funds without a sales charge
are set forth in the Prospectus.
Complete information concerning the method of exchanging shares of the
Funds for shares of the other AIM Funds is set forth in the Prospectus under
the heading "Exchange Privilege."
Information concerning redemption of the Funds' shares is set forth in
the Prospectus under the heading "How to Redeem Shares." In addition to the
Funds' obligation to redeem shares, AIM Distributors may also repurchase shares
as an accommodation to shareholders. To effect a repurchase, those dealers who
have executed Selected Dealer Agreements with AIM Distributors must phone
orders to the order desk of the Funds at (800) 959-4246 and guarantee delivery
of all required documents in good order. A repurchase is effected at the net
asset value per share of the applicable Fund next determined after the
repurchase order is received. Such an arrangement is subject to timely receipt
by A I M Fund Services, Inc., the Funds' 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. While there is no charge imposed by a Fund or by AIM
Distributors (other than any applicable contingent deferred sales charge) when
shares are redeemed or repurchased, dealers may charge a fair service fee for
handling the transaction.
The right of redemption may be suspended or the date of payment
postponed when (a) trading on the New York Stock Exchange ("NYSE") is
restricted, as determined by applicable rules and regulations of the SEC, (b)
the NYSE is closed for other than customary weekend and holiday closings, (c)
the SEC has by order permitted such suspension, or (d) an emergency as
determined by the SEC exists making disposition of portfolio securities or the
valuation of the net assets of a Fund not reasonably practicable.
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<PAGE> 117
A Fund's net asset value is calculated by dividing the number of
outstanding shares into the net assets of the Fund. Net assets are the excess
of a Fund's assets over its liabilities.
For AIM Money Market Fund: The Fund may use the amortized cost method
to determine its net asset value so long as the Fund does not (a) purchase any
instrument with a remaining maturity greater than 397 days (for these purposes,
repurchase agreements shall not be deemed to involve the purchase by the Fund
of the securities pledged as collateral in connection with such agreements) or
(b) maintain a dollar-weighted average portfolio maturity in excess of 90 days,
and otherwise complies with the terms of rules adopted by the SEC.
For all other Funds: The following formula may be used to determine
the public offering price per Class A share of an investor's investment:
Net Asset Value / (1 - Sales Charge as % of Offering Price) = Offering
Price.
For example, at the close of business on December 31, 1997,AIM VALUE
FUND - Class A shares had 208,074,043 shares outstanding, net assets of
$6,745,252,900 and a net asset value per share of $32.42. The offering price,
therefore, was $34.31.
AIM HIGH YIELD FUND
Variable Annuity Contracts--Currently, shares of AIM HIGH YIELD FUND
may be purchased at net asset value by the Life Insurance Company of North
America ("LINA") under an arrangement whereby the shares will serve as an
underlying investment medium for certain variable annuity contracts previously
issued by LINA.
The basic objective of the variable annuity contracts is to provide
individuals with retirement benefits through net purchase payment accumulations
and annuity payments which are based upon the performance of AIM HIGH YIELD
FUND or other available funds. The contracts allow their owners and
participants to defer federal income tax ("FIT") payments on contract
investment accumulations until annuity payments begin. The annuity payment
options generally provide for lifetime annuity payments based upon the life of
the named annuitant (and joint annuitant, if applicable). Such payments may be
made for a guaranteed minimum number of years. Certain charges are made in
connection with the sale of the contracts.
The LINA contracts are no longer being issued except that existing
owners, participants and, in some cases, new participants under existing group
contracts under certain tax-qualified plans, may continue to make contributions
under the contract. Persons who wish to receive additional information
concerning investment in AIM HIGH YIELD FUND through LINA's variable annuity
contracts are urged to read the LINA prospectus which describes them. LINA
variable annuity information and a prospectus may be obtained by writing to INA
Security Corporation, 601 Walnut Street, Ninth Floor, Philadelphia,
Pennsylvania 19102, or by calling (215) 351-3121.
QUALIFYING FOR A REDUCED FRONT-END SALES CHARGE
As described in the Prospectus, the front-end sales charge for Class A
shares is calculated by multiplying an investor's total investment by the
applicable sales charge rate. The applicable rate varies with the amount
invested. The Funds offer programs such as Right of Accumulation and Letter of
Intent, which are described in the Prospectus, and are designed to permit
investors to aggregate purchases of different funds, or separate purchases over
time, in order to qualify for a lower sales charge rate. See "Terms and
Conditions of Purchase of the AIM Funds -- Reductions in Initial Sales Charges"
in the Prospectus.
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<PAGE> 118
DETERMINATION OF NET ASSET VALUE
For AIM Money Market Fund: The net asset value per share of the Fund
is determined daily as of 12:00 noon and the close of trading on the NYSE
(generally 4:00 p.m. Eastern time) on each business day of the Fund. In the
event the NYSE closes early (i.e., before 4:00 p.m. Eastern time) on a
particular day, the net asset value of a Fund is determined as of the close of
the NYSE on such day. Net asset value per share is determined by dividing the
value of the Fund's securities, cash and other assets (including interest
accrued but not collected) attributable to a particular class, less all its
liabilities (including accrued expenses and dividends payable) attributable to
that class, by the number of shares outstanding of that Class and rounding the
resulting per share net asset value to the nearest one cent. Determination of
the net asset value per share is made in accordance with generally accepted
accounting principles.
The securities of the Fund are valued on the basis of amortized cost.
This method values a security at its cost on the date of purchase and
thereafter assumes a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the security. While this method provides certainty in valuation, it
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price the Fund would receive if the security were
sold. During such periods, the daily yield on shares of the Fund computed as
described under "Performance Information" may differ somewhat from an identical
computation made by another investment company with identical investments
utilizing available indications as to the market value of its portfolio
securities.
The valuation of portfolio instruments based upon their amortized cost
and the concomitant maintenance of the net asset value per share of $1.00 for
the Fund is permitted in accordance with applicable rules and regulations of
the SEC which require the Fund to adhere to certain conditions. These rules
require, among other things, that the Fund maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase only instruments having
remaining maturities of 397 calendar days or less and invest only in securities
determined by the Board of Trustees to be "Eligible Securities" (as defined in
Rule 2a-7 under the 1940 Act) and to present minimal credit risk to the Fund.
The Board of Trustees is required to establish procedures designed to
stabilize, to the extent reasonably practicable, the Fund's price per share at
$1.00, as computed for the purpose of sales and redemptions. Such procedures
include review of the Fund's holdings by the Board of Trustees at such
intervals as they may deem appropriate, to determine whether the net asset
value calculated by using available market quotations or other reputable
sources for the Fund deviates from $1.00 per share and, if so, whether such
deviation may result in material dilution or is otherwise unfair to existing
holders of the Fund's shares. In the event the Board of Trustees determines
that such a deviation exists for the Fund, it will take such corrective action
as the Board of Trustees deems necessary and appropriate with respect to the
Fund, including the sale of portfolio instruments prior to maturity to realize
capital gains or losses or to shorten the average portfolio maturity; the
withholding of dividends; redemption of shares in kind; or the establishment of
a net asset value per share by using available market quotations.
The Fund intends to comply with any amendments made to Rule 2a-7 which
may require corresponding changes in the Fund's procedures which are designed
to stabilize the Fund's price per share at $1.00.
For All Other Funds: The net asset value per share of each Fund is
normally determined daily as of the close of trading of the NYSE (generally
4:00 p.m. Eastern time) on each business day of the Fund. In the event the
NYSE closes early (i.e., before 4:00 p.m. Eastern time) on a particular day,
the net asset value of a Fund is determined as of the close of the NYSE on such
day. Net asset value per share is determined by dividing the value of a Fund's
securities, cash and other assets (including interest accrued but not
collected) attributable to a particular class, less all its liabilities
(including accrued expenses and dividends payable) attributable to that class,
by the total number of shares outstanding of that class. Determination of a
Fund's net asset value per share is made in accordance with generally accepted
accounting principles.
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<PAGE> 119
Each equity security held by a Fund is valued at its last sales price
on the exchange where the security is principally traded or, lacking any sales
on a particular day, the security is valued at the mean between the closing bid
and asked prices on that day. Each security traded in the over-the-counter
market (but not including securities reported on the NASDAQ National Market
System) is valued at the mean between the last bid and asked prices based upon
quotes furnished by market makers for such securities. Each security reported
on the NASDAQ National Market System is valued at the last sales price on the
valuation date or absent a last sales price, at the mean between the closing
bid and asked prices on that day. Debt securities are valued on the basis of
prices provided by an independent pricing service. Prices provided by the
pricing service may be determined without exclusive reliance on quoted prices,
and may reflect appropriate factors such as institution-size trading in similar
groups of securities, developments related to special securities, yield,
quality, coupon rate, maturity, type of issue, individual trading
characteristics and other market data. Securities for which market quotations
are not readily available or are questionable are valued at fair value as
determined in good faith by or under the supervision of the Trust's officers in
a manner specifically authorized by the Board of Trustees. Short-term
obligations having 60 days or less to maturity are valued on the basis of
amortized cost. For purposes of determining net asset value per share, futures
and options contracts generally will be valued 15 minutes after the close of
trading of the NYSE.
Generally, trading in foreign securities, corporate bonds, U.S.
Government securities and money market instruments is substantially completed
each day at various times prior to the close of the NYSE. The values of such
securities used in computing the net asset value of each Fund's shares are
determined at such times. Foreign currency exchange rates are also generally
determined prior the close of the NYSE. Occasionally, events affecting the
values of such securities and such exchange rates may occur between the times
at which such values are determined and the close of the NYSE which will not be
reflected in the computation of a Fund's net asset value. If events materially
affecting the value of such securities occur during such period, then these
securities will be valued at their fair value as determined in good faith by or
under the supervision of the Board of Trustees.
TAX MATTERS
Each Fund is treated as a separate association taxable as a
corporation. Each Fund intends to qualify under the Internal Revenue Code of
1986, as amended (the "Code"), as a regulated investment company ("RIC") for
each taxable year. Accordingly, each Fund must, among other things, generally
derive at least 90% of its gross income from dividends, interest, payments with
respect to securities loans, gains from the sale or other disposition of stock,
securities, foreign currencies, or other income derived with respect to its
business of investing in such stock, securities or currencies. Each Fund must
diversify its holdings so that, at the end of each fiscal quarter: (i) at least
50% of the market value of the Fund's assets is represented by cash, U.S.
Government securities and other securities, with such other securities limited,
with respect to any one issuer, to an amount not greater than 5% of the Fund's
assets and not more than 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its assets is invested in
the securities of any one issuer (other than U.S. Government securities).
As a RIC, each Fund will generally not be subject to FIT on its income
and gains distributed to shareholders if it currently distributes the sum of
(i) at least 90% of its investment company taxable income (net investment
taxable income and the excess of net short-term capital gains over net
long-term capital gains) for the taxable year and (ii) at least 90% of the
excess of its tax-exempt interest income under Code Section 103(a) over its
deductions disallowed under Code Sections 265 and 171(a)(2) (the "Distribution
Requirement"). Distributions made by a Fund during its taxable year, or under
certain circumstances within 12 months after the end of its taxable year, will
be considered distributions made during the taxable year and will therefore
satisfy the Distribution Requirement.
Each Fund is subject to a nondeductible 4% excise tax if it does not
meet certain distribution requirements under the Code. To avoid this excise
tax, during each calendar year, each Fund must
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<PAGE> 120
distribute: (1) at least 98% of its ordinary income (not taking into account
any capital gains or losses) for the calendar year (except that any foreign
currency gain or loss occurring after October 31 shall be taken into account
the following year), (2) at least 98% of its capital gains in excess of its
capital losses for the 12-month period ending on October 31, and (3) all
ordinary income and capital gains from previous calendar years that were not
distributed during such years. Dividends declared to shareholders of record on
a date in October, November or December will be taxable to shareholders on
December 31 in the year declared as long as the Fund pays the dividends no
later than January 31 of the following year.
The Code and the regulations promulgated thereunder are subject to
change, and interpretations of the Code and the regulations may be modified or
affected at any time by Congress, the Department of the Treasury or judicial
decision. It should be noted that any such change could be applied
retroactively.
All Funds except AIM MONEY MARKET FUND: Section 1092 of the Code
affects the taxation of certain transactions involving futures or options
contracts. If a futures or options contract is part of a "straddle" (which
could include another futures contract or underlying stock or securities), as
defined in Section 1092 of the Code, then, generally, losses are deferred first
to the extent that the modified "wash sale" rules of the Section 1092
regulations apply, and second to the extent of unrecognized gains on offsetting
positions. Further, the Funds may be required to capitalize, rather than
deduct currently, any interest expense on indebtedness incurred or continued to
purchase or carry any positions that are part of a straddle. Sections 1092 and
246 of the Code and the regulations thereunder also suspend the holding periods
for straddle positions with possible adverse effects regarding long-term
capital gain treatment and the corporate dividends received-deduction.
Section 1256 of the Code generally requires that futures contracts and
options on future contracts be "marked-to-market" at the end of each year for
FIT purposes. Code Section 1256 further characterizes 60% of any capital gain
or loss with respect to such futures and options contracts as long-term capital
gain taxable at 20% or loss and 40% as short-term capital gain or loss. If
such a future or option is held as an offsetting position and can be considered
a straddle under Section 1092 of the Code, such a straddle will constitute a
mixed straddle. A mixed straddle will be subject to both Section 1256 and
Section 1092 unless certain elections are made by the Fund.
The Funds may have invested in certain foreign currency transactions,
the gain or loss from which may be subject to taxation as ordinary income or
loss under Code Section 988.
AIM BALANCED FUND and AIM HIGH YIELD FUND: These Funds may engage in
certain hedging transactions (such as short sales "against the box") that may
result in "constructive sales" of offsetting appreciated positions under
section 1259 of the Code. In the event of such a constructive sale, a Fund
will be deemed to recognize gain as if the offsetting position were sold or
otherwise terminated at its fair market value and will take such gain into
account in the taxable year in which the appreciated position was hedged.
AIM GLOBAL UTILITIES FUND: Pursuant to the investment objectives of
the Fund, the Fund may invest in foreign securities. Dividends and interest
received by the Fund with respect to these investments may give rise to
withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. If more than 50% in value of the Fund's total assets at the close of
its taxable year consists of stock or securities of foreign corporations, the
Fund will be eligible to file an election with the Internal Revenue Service
pursuant to which shareholders of the Fund will be required to include their
proportionate share of such withholding taxes in their United States income tax
returns as gross income, treat such proportionate share as taxes paid by them,
and deduct such proportionate share in computing their taxable income or,
alternatively, use them as foreign tax credits to the extent allowed against
their United States income taxes subject to certain provisions and limitations
contained in the Code. If the election is made, the Fund will report annually
to its shareholders the amount per share of such withholding taxes. Please
note that such foreign tax credits are non-refundable and therefore cannot be
claimed by certain retirement accounts and other persons not otherwise subject
to United States income taxation.
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<PAGE> 121
AIM HIGH YIELD FUND: The notes to the financial statements of the Fund
for the year ended December 31, 1997, detail the amount of capital loss
carryover for FIT purposes to which the Fund is entitled, subject to certain
limitations. To the extent losses are used to offset any future capital gains
realized during the carryover period, no capital gains tax liability will be
incurred for gains realized and not distributed.
AIM MUNICIPAL BOND FUND: With respect to interest income that is
exempt from FIT, the Fund intends to comply with Section 852(b)(5) of the Code,
which enables distributions of tax-exempt income to retain their character when
distributed to shareholders as an exempt interest dividend. Each year, the
Fund provides shareholders a statement indicating the amount of distribution
that is exempt from FIT. This statement also provides a breakdown showing the
percentage of such income that came from each state. In addition, the Fund
reports for FIT purposes any net realized capital gains and any ordinary income
from the Fund's short-term holdings. Further, the Fund also reports certain
interest from "Qualified Private Activity Bonds" which shareholders may be
required to include in the alternative minimum tax calculation.
The Tax Reform Act of 1986 (the "1986 Act") divided municipal debt
obligations into three categories, only one of which ("Public Purpose Bonds")
bears interest which is exempt from both the regular income tax and the
alternative minimum tax as it applies to individuals. For corporations, some
or all of the income from Public Purpose Bonds would be includable in the
corporate alternative minimum tax base. Of the other two categories
("Qualified Private Activity Bonds" and "Private Activity Bonds"), for both
individuals and corporations, Qualified Private Activity Bonds bear interest
which is excluded from income for purposes of the regular income tax but must
generally be included in the alternative minimum tax base, and Private Activity
Bonds are taxable under both the regular and alternative minimum taxes. For
taxable years beginning after 1997, however, certain small corporations are
wholly exempt from the alternative minimum tax.
The 1986 Act also applied limitations on the issuance of bonds whose
proceeds are used by organizations exempt from tax under Code Section
501(c)(3), as well as general limitations on the amount of Qualified Private
Activity Bonds governmental units may issue.
The 1986 Act limitations on tax-exempt bonds apply generally to bonds
issued after August 16, 1986. The private activity bond rules are generally
applicable to bonds issued on or after September 1, 1986, with the alternative
minimum tax rules applicable generally to bonds issued on or after August 7,
1986. AIM MUNICIPAL BOND FUND intends to limit its investments in Qualified
Private Activity Bonds and taxable securities to no more than 20% of its total
assets in any given year, consistent with its stated investment objective.
Original issue discount on tax-exempt bonds is accrued as tax-exempt
interest (except for a portion thereof in the case of certain stripped
tax-exempt bonds), and is included in the tax basis of the security for capital
gain and loss computation purposes. Any gain or loss from the sale or other
disposition of a tax-exempt security is generally treated as either long-term
or short-term capital gain or loss, depending upon its holding period, and is
fully taxable. However, gain recognized from the sale or other disposition of
a tax-exempt security purchased after April 30, 1993, will be treated as
ordinary income to the extent of the accrued market discount on such security.
Interest on indebtedness incurred by shareholders (including financial
institutions) will not be deductible for FIT purposes to the extent that the
money was used to purchase or carry tax-exempt securities. The purchase of
Fund shares may be considered to have been made with borrowed funds even though
the borrowed funds are not directly traceable to the purchase of Fund shares.
Further, persons who are "substantial users" (or persons related thereto) of
facilities financed by private activity bonds should consult their own tax
advisor before purchasing Fund shares.
The exemption of interest income for FIT purposes does not necessarily
result in exemption under state and local laws. Shareholders should consult
their tax advisors as to the treatment of such income under state and local
laws.
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PROGRAMS AND SERVICES FOR SHAREHOLDERS
The Funds provide certain services for shareholders and certain
investment or redemption programs. See "Exchange Privilege" and "How to Redeem
Shares" in the Prospectus. All inquiries concerning these programs should be
made directly to A I M Fund Services, Inc., P.O. Box 4739, Houston, Texas
77210-4739, toll free at (800) 959-4246.
DIVIDEND ORDER
Dividends may be paid to someone other than the registered owner, or
sent to an address other than the address of record. (Please note that
signature guarantees are required to effect this option.) An investor also may
direct that his or her dividends be invested in one of the other Funds in the
Trust, provided however, that dividends attributable to Class A shares may not
be reinvested in Class B or Class C shares, dividends attributable to Class B
shares may only be reinvested in Class B shares, dividends attributable to
Class C shares may only be reinvested in Class C shares and dividends
attributable to AIM Cash Reserve Shares may be reinvested in Class A shares or
AIM Cash Reserve Shares. There is no sales charge for these investments;
initial investment minimums apply. See "Dividends, Distributions and Tax
Matters -- Dividends and Distributions" in the Prospectus. To effect this
option, please contact your authorized dealer. For more information concerning
AIM Funds other than those in the Trust, please obtain a current prospectus by
contacting your authorized dealer, by writing to A I M Fund Services, Inc.,
P.O. Box 4739, Houston, Texas 77210-4739, or by calling toll free (800)
959-4246.
DESCRIPTION OF MONEY MARKET INSTRUMENTS
U.S. Government Obligations consist of marketable securities and
instruments issued or guaranteed by the United States Government or by certain
of its agencies or instrumentalities. Direct obligations are issued by the
United States Treasury and include bills, certificates of indebtedness, notes
and bonds. Obligations of United States Government agencies and
instrumentalities ("Agencies") are issued by government-sponsored agencies and
enterprises acting under authority of Congress. Certain Agencies are backed by
the full faith and credit of the United States Government, and others are not.
MONEY MARKET OBLIGATIONS
AIM MONEY MARKET FUND will limit its investments to those securities
which at the time of purchase are "First Tier" securities as defined in Rule
2a-7 under the 1940 Act, as such Rule may be amended from time to time.
Subsequent to its purchase by AIM MONEY MARKET FUND, a security may
cease to be a First Tier security. Subject to certain exceptions set forth in
Rule 2a-7, such an event will not require the disposition of the security by
the Fund, but AIM will consider such an event to be relevant in its
determination of whether the Fund should continue to hold the security.
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS
Each of the Funds may engage in repurchase and reverse repurchase
agreement transactions involving the types of securities in which it is
permitted to invest.
REPURCHASE AGREEMENTS under which the purchaser (for example, a Fund)
acquires ownership of a security and the seller agrees, at the time of the
sale, to repurchase the security at a mutually agreed upon time and price,
thereby determining the yield during the purchaser's holding period. A Fund
may, however, enter into a "continuing contract" or "open" repurchase agreement
under which the seller is under a continuing obligation
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to repurchase the underlying obligation from the Fund on demand and the
effective interest rate is negotiated on a daily basis. In general, a Fund
will enter into repurchase agreements only with domestic banks with total
assets of at least $1 billion or with primary dealers in U.S. Government
securities; however, total assets will not be the sole determinative factor,
and a Fund may enter into repurchase agreements with other institutions which
the Board of Trustees believes present minimal credit risks. Nevertheless, if
the seller of a repurchase agreement fails to repurchase the debt instrument in
accordance with the terms of the agreement, the Fund which entered into the
repurchase agreement may incur a loss to the extent that the proceeds it
realizes on the sale of the underlying obligation are less than the repurchase
price. Repurchase agreements are considered to be loans by a Fund under the
1940 Act.
Rule 2a-7 under the 1940 Act provides that AIM MONEY MARKET FUND may
not invest more than 5% of its total assets in securities issued by the issuer
of that security, provided that the Fund may invest more than 5% of its total
assets in the First Tier securities of a single issuer for a period of up to
three business days after the purchase thereof; provided further, that the Fund
may not make more than one investment in accordance with the foregoing proviso
at any time. Under Rule 2a-7, for purposes of determining the percentage of
the Fund's total assets that are invested in securities of an issuer, a
repurchase agreement shall be deemed to be an acquisition of the underlying
securities, provided that the obligation of the seller to repurchase the
securities from the Fund is fully collateralized. To be fully collateralized,
the collateral must, among other things, consist entirely of cash items, U.S.
Government securities or securities that, at the time the repurchase agreement
is entered into, are rated in the highest rating category by the Requisite
NRSROs, and the repurchase agreement must qualify under a provision of
applicable insolvency law providing an exclusion from any automatic stay of
creditors' rights against the seller.
REVERSE REPURCHASE AGREEMENTS,which involve the sale of securities
held by a Fund, with an agreement that the Fund will repurchase the securities
at an agreed upon price and date. A Fund may employ reverse repurchase
agreements (i) for temporary emergency purposes, such as to meet unanticipated
net redemptions so as to avoid liquidating other portfolio securities during
unfavorable market conditions; (ii) to cover short-term cash requirements
resulting from the timing of trade settlements; or (iii) to take advantage of
market situations where the interest income to be earned from the investment of
the proceeds of the transaction is greater than the interest expense of the
transaction. At the time it enters into a reverse repurchase agreement, a Fund
will segregate liquid assets having a dollar value equal to the repurchase
price. Reverse repurchase agreements are considered borrowings by a Fund under
the 1940 Act.
MISCELLANEOUS INFORMATION
AUDIT REPORTS
The Board of Trustees will issue to shareholders at least
semi-annually the Funds' financial statements. Financial statements, audited
by independent auditors, will be issued annually. The firm of Price Waterhouse
LLP served as the auditors to the Funds other than AIM BALANCED FUND and AIM
MONEY MARKET FUND for the year ended December 31, 1992. The firm of KPMG Peat
Marwick LLP served as the auditors of ACS (the predecessor of AIM BALANCED
FUND) for the year ended August 31, 1993. The firm of KPMG Peat Marwick LLP,
700 Louisiana, Houston, Texas 77002, currently serves as the auditors of the
Funds.
LEGAL MATTERS
Legal matters for the Trust have been passed upon by Ballard Spahr
Andrews & Ingersoll, LLP, Philadelphia, Pennsylvania.
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CUSTODIANS AND TRANSFER AGENT
State Street Bank and Trust Company (the "Custodian"), 225 Franklin
Street, Boston, Massachusetts 02110 is custodian of all securities and cash
of the Funds, except AIM MUNICIPAL BOND FUND, for which the Bank of New York,
90 Washington Street, 11th Floor, New York, New York 10286, is the custodian.
Under its respective contract with the Trust, each Custodian maintains the
portfolio securities of the Funds, administers the purchases and sales of
portfolio securities, collects interest and dividends and other distributions
made on the securities held in the portfolios of the Funds and performs other
ministerial duties. A I M Fund Services, Inc. (a wholly-owned subsidiary of
AIM) (the "Transfer Agent"), P.O. Box 4739, Houston, Texas 77210-4739 acts as
transfer and dividend disbursing agent for the Funds. These services do not
include any supervisory function over management or provide any protection
against any possible depreciation of assets. The Funds pay the Custodians and
the Transfer Agent such compensation as may be agreed upon from time to time.
Chase Bank of Texas, N. A., 712 Main, Houston, Texas 77002, serves as
Sub-Custodian for retail purchases of the AIM Funds.
RATINGS OF SECURITIES
The following is a description of the factors underlying the
commercial paper and debt ratings of Moody's, S&P, Fitch and Duff & Phelps:
MOODY'S BOND RATINGS
Moody's describes its ratings for corporate bonds as follows:
Aaa: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt-edge." 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: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high grade bonds. These 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: Bonds which are rated A possess many favorable investment
attributes and are to be considered as 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: Bonds which are rated Baa are considered as 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: Bonds which are rated Ba are judged to have speculative
elements; 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.
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B: Bonds which are rated 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.
Caa: Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic
rating classification from Aa to B. 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 company
ranks in the lower end of its generic rating category.
MOODY'S MUNICIPAL BOND RATINGS
Aaa: Bonds rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." 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: Bonds rated Aa are judged to be of 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 risks appear somewhat larger than in Aaa
securities.
A: Bonds rated A possess many favorable investment attributes and
are to be considered as 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: Bonds rated Baa are considered as 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: Bonds rated Ba are judged to have speculative elements; 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: Bonds rated 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.
Caa: Bonds rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
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Ca: Bonds rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic
rating classification from Aa to B. The modifier indicates that the issue
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 category.
MOODY'S SHORT-TERM LOAN RATINGS
Moody's ratings for state and municipal short-term obligations will be
designated Moody's Investment Grade or (MIG). Such ratings recognize the
differences between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower and short-term cyclical elements are
critical in short-term ratings, while other factors of major importance in bond
risk, long-term secular trends for example, may be less important over the
short run.
A short-term rating may also be assigned on an issue having a demand
feature variable rate demand obligation (VRDO). Such ratings will be
designated as VMIG or, if the demand feature is not rated, as NR. Short-term
ratings on issues with demand features are differentiated by the use of the
VMIG symbol to reflect such characteristics as payment upon periodic demand
rather than fixed maturity dates and payment relying on external liquidity.
Additionally, investors should be alert to the fact that the source of payment
may be limited to the external liquidity with no or limited legal recourse to
the issuer in the event the demand is not met.
A VMIG rating may also be assigned to commercial paper programs. Such
programs are characterized as having variable short-term maturities but having
neither a variable rate nor demand feature.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4.
Gradations of investment quality are indicated by rating symbols, with
each symbol representing a group in which the quality characteristics are
broadly the same.
MIG 1/VMIG 1: This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2: This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
MIG 3/VMIG 3: This designation denotes favorable quality. All security
elements are accounted for but there is lacking the undeniable strength of the
preceding grades. Liquidity and cash flow protection may be narrow and market
access for refinancing is likely to be less well established.
MIG 4/VMIG 4: This designation denotes adequate quality. Protection
commonly regarded as required of an investment security is present and although
not distinctly or predominantly speculative, there is specific risk.
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MOODY'S COMMERCIAL PAPER RATINGS
Moody's commercial paper ratings are opinions of the ability of issues
to repay punctually promissory obligations not having an original maturity in
excess of nine months.
PRIME-1: Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following characteristics:
leading market positions in well-established industries; high rates of return
on funds employed; conservative capitalization structures 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.
PRIME-2: Issuers rated Prime-2 (or related supporting institutions) have a
strong capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternate liquidity is
maintained.
PRIME-3: Issuers rated Prime-3 (or related supported institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effects of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.
NOT PRIME: Issuers rated Not Prime do not fall within any of the Prime
rating categories.
S&P BOND RATINGS
S&P describes its ratings for corporate bonds as follows:
AAA: Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA: Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A: Debt rated 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: Debt rated BBB is regarded as having an 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 as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. BB indicates the least degree of speculation and
C the highest. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or large exposure
to adverse conditions.
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S&P DUAL RATINGS
S&P assigns "dual" ratings to all debt issues that have a put option
or demand feature as part of their structure.
The first rating addresses the likelihood of repayment of principal
and interest as due, and the second rating addresses only the demand feature.
The long-term debt rating symbols are used for bonds to denote the long-term
maturity and the commercial paper rating symbols for the put option (for
example, AAA/A-1+). With short-term demand debt, the note rating symbols are
used with the commercial paper rating symbols (for example, SP-1+/A-1+).
S&P MUNICIPAL NOTE RATINGS
A S&P note rating reflects the liquidity factors and market-access
risks unique to notes. Notes maturing in three years or less will likely
receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in making
that assessment: amortization schedule (the larger the final maturity relative
to other maturities, the more likely the issue will be treated as a note); and
source of payment (the more the issue depends on the market for its
refinancing, the more likely it is to be treated as a note).
Note rating symbols and definitions are as follows:
SP-1: Strong capacity to pay principal and interest. Issues determined to
possess very strong characteristics are given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.
SP-3: Speculative capacity to pay principal and interest.
S&P COMMERCIAL PAPER RATINGS
An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days.
Rating categories are as follows:
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 are 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 with this rating 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.
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D: Debt with this rating 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 it is believed that
such payments will be made during such grace period.
FITCH INVESTMENT GRADE BOND RATINGS
Fitch investment grade bond ratings provide a guide to investors in
determining the credit risk associated with a particular security. The ratings
represent Fitch's assessment of the issuer's ability to meet the obligations of
a specific debt issue in a timely manner.
The rating takes into consideration special features of the issue, its
relationship to other obligations of the issuer, the current and prospective
financial condition and operating performance of the issuer and any guarantor,
as well as the economic and political environment that might affect the
issuer's future financial strength and credit quality.
Fitch ratings do not reflect any credit enhancement that may be
provided by insurance policies or financial guaranties unless otherwise
indicated.
Bonds carrying the same rating are of similar but not necessarily
identical credit quality since the rating categories do not fully reflect small
differences in the degrees of credit risk.
Fitch ratings are not recommendations to buy, sell or hold any
security. Ratings do not comment on the adequacy of market price, the
suitability of any security for a particular investor, or the tax-exempt nature
or taxability of payments made in respect of any security.
Fitch ratings are based on information obtained from issuers, other
obligors, underwriters, their experts, and other sources Fitch believes to be
reliable. Fitch does not audit or verify the truth or accuracy of such
information. Ratings may be changed, suspended, or withdrawn as a result of
changes in, or the unavailability of, information or for other reasons.
AAA: Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.
AA: Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated "AAA." Because bonds rated in the
"AAA" and "AA" categories are not significantly vulnerable to foreseeable
future developments, short-term debt of these issuers is generally rated
"F-1+."
A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions
and circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these bonds
and, therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.
Plus (+) Minus (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus
and minus signs, however, are not used in the "AAA" category.
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NR: Indicates that Fitch does not rate the specific issue.
CONDITIONAL: A conditional rating is premised on the successful completion of
a project or the occurrence of a specific event.
SUSPENDED: A rating is suspended when Fitch deems the amount of information
available from the issuer to be inadequate for rating purposes.
WITHDRAWN: A rating will be withdrawn when an issue matures or is called or
refinanced, and, at Fitch's discretion, when an issuer fails to furnish proper
and timely information.
FITCHALERT: Ratings are placed on FitchAlert to notify investors of an
occurrence that is likely to result in a rating change and the likely direction
of such change. These are designated as "Positive," indicating a potential
upgrade, "Negative," for potential downgrade, or "Evolving," where ratings may
be raised or lowered. FitchAlert is relatively short-term, and should be
resolved within 12 months.
RATINGS OUTLOOK
An outlook is used to describe the most likely direction of any rating
change over the intermediate term. It is described as "Positive" or
"Negative." The absence of a designation indicates a stable outlook.
FITCH SPECULATIVE GRADE BOND RATINGS
Fitch speculative grade bond ratings provide a guide to investors in
determining the credit risk associated with a particular security. The ratings
("BB" to "C") represent Fitch's assessment of the likelihood of timely payment
of principal and interest in accordance with the terms of obligation for bond
issues not in default. For defaulted bonds, the rating ("DDD" to "D") is an
assessment of the ultimate recovery value through reorganization or
liquidation.
The rating takes into consideration special features of the issue, its
relationship to other obligations of the issuer or possible recovery value in
bankruptcy, the current and prospective financial condition and operating
performance of the issuer and any guarantor, as well as the economic and
political environment that might affect the issuer's future financial strength.
Bonds that have the same rating are of similar but not necessarily
identical credit quality since rating categories cannot fully reflect the
differences in degrees of credit risk.
BB: Bonds are considered speculative. The obligor's ability to pay interest
and repay principal may be affected over time by adverse economic changes.
However, business and financial alternatives can be identified, which could
assist the obligor in satisfying its debt service requirements.
B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued
timely payment of principal and interest reflects the obligor's limited margin
of safety and the need for reasonable business and economic activity throughout
the life of the issue.
CCC: Bonds have certain identifiable characteristics that, if not remedied,
may lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.
C: Bonds are in imminent default in payment of interest or principal.
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DDD, DD, and D: Bonds are in default on interest and/or principal payments.
Such bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. "DDD"
represents the highest potential for recovery on these bonds, and "D"
represents the lowest potential for recovery.
PLUS (+) MINUS (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus
and minus signs, however, are not used in the "DDD", "DD", or "D" categories.
FITCH SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal and
investment notes.
The short-term rating places greater emphasis than a long-term rating
on the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.
Fitch short-term ratings are as follows:
F-1+: Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1: Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+."
F-2: Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as
great as for issues assigned "F-1+" and "F-1" ratings.
F-3: Fair Credit Quality. Issues assigned this rating have characteristics
suggesting that the degree of assurance for timely payment is adequate,
however, near-term adverse changes could cause these securities to be rated
below investment grade.
F-S: Weak Credit Quality. Issues assigned this rating have characteristics
suggesting a minimal degree of assurance for timely payment and are vulnerable
to near-term adverse changes in financial and economic conditions.
D: Default. Issues assigned this rating are in actual or imminent payment
default.
LOC: The symbol LOC indicates that the rating is based on a letter of credit
issued by a commercial bank.
DUFF & PHELPS LONG-TERM RATINGS
AAA: Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA+, AA and AA-: High credit quality. Protection factors are strong. Risk
is modest but may vary slightly from time to time because of economic
conditions.
A+, A and A-: Protection factors are average but adequate. However, risk
factors are more variable and greater in periods of economic stress.
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BBB+, BBB and BBB-: Below average protection factors but still considered
sufficient for prudent investment. Considerable variability in risk during
economic cycles.
BB+, BB and BB-: Below investment grade but deemed likely to meet obligations
when due. Present or prospective financial protection factors fluctuate
according to industry conditions or company fortunes. Overall quality may move
up or down frequently within this category.
B+, B and B-: Below investment grade and possessing risk that obligations
will not be met when due. Financial protection factors will fluctuate widely
according to economic cycles, industry conditions and/or company fortunes.
Potential exists for frequent changes in the rating within this category or
into a higher or lower rating grade.
CCC: Well below investment grade securities. Considerable uncertainty
exists as to timely payment of principal, interest or preferred dividends.
Protection factors are narrow and risk can be substantial with unfavorable
economic/industry conditions, and/or with unfavorable company developments.
DD: Defaulted debt obligations. Issuer failed to meet scheduled principal
and/or interest payments.
DP: Preferred stock with dividend arrearages.
DUFF & PHELPS SHORT-TERM RATINGS
D - 1+: Highest certainty of timely payment. Short-term liquidity, including
internal operating factors and/or access to alternative sources of funds, is
outstanding and safety is just below risk-free U.S. Treasury short-term
obligations.
D - 1: Very high certainty of timely payment. Liquidity factors are excellent
and supported by good fundamental protection factors. Risk factors are minor.
D - 1-: High certainty of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very small.
D - 2: Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.
D - 3: Satisfactory liquidity and other protection factors qualify issue as
to investment grade. Risk factors are larger and subject to more variation.
Nevertheless, timely payment is expected.
D - 4: Speculative investment characteristics. Liquidity is not sufficient
to insure against disruption in debt service. Operating factors and market
access may be subject to a high degree of variation.
D - 5: Issuer failed to meet scheduled principal and/or interest payments.
65
<PAGE> 133
FINANCIAL STATEMENTS
FS
<PAGE> 134
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Balanced Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Balanced Fund (a portfolio of AIM
Funds Group), including the schedule of investments, as
of December 31, 1997, and the related statement of
operations for the year then ended, the statement of
changes in net assets for each of the years in the
two-year period then ended, and the financial highlights
for each of the years in the four-year period then ended,
the four-month period ended December 31, 1993, and the
year ended August 31, 1993. These financial statements
and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an
opinion on these financial statements and 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
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 and financial highlights. Our procedures
included confirmation of securities owned as of December
31, 1997, by correspondence with the custodian and
brokers. 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 financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Balanced
Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its
net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the
years in the four-year period then ended, the four-month
period ended December 31, 1993, and the year ended August
31, 1993, in conformity with generally accepted
accounting principles.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Houston, Texas
February 6, 1998
FS-1
<PAGE> 135
SCHEDULE OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
DOMESTIC BONDS & NOTES-25.68%
AIRLINES-2.38%
Airplanes Pass Through Trust,
Sub. Bonds, 10.875%, 03/15/19 $ 500,000 $ 562,815
- ---------------------------------------------------------------
America West Airlines, Pass
Through Ctfs., 6.86%, 07/02/04 5,989,758 6,034,801
- ---------------------------------------------------------------
American Airlines, Equipment
Trust, 9.90%, 01/15/11 2,955,000 3,726,344
- ---------------------------------------------------------------
Delta Air Lines, Inc.,
Deb., 9.00%, 05/15/16 5,000,000 5,912,050
- ---------------------------------------------------------------
Medium Term Notes, 8.52%,
01/30/04 2,000,000 2,179,580
- ---------------------------------------------------------------
Northwest Airlines Corp., Pass
Through Ctfs., 7.248%, 07/02/14 5,000,000 5,056,250
- ---------------------------------------------------------------
United Air Lines, Inc., Pass
Through Ctfs., 9.56%, 10/19/18 3,750,000 4,611,525
- ---------------------------------------------------------------
28,083,365
- ---------------------------------------------------------------
AUTOMOBILES-0.04%
General Motors Corp., Deb.,
8.80%, 03/01/21 400,000 491,084
- ---------------------------------------------------------------
BANKS (MAJOR REGIONAL)-0.42%
First Union Corp,
Sub. Deb., 7.50%, 04/15/35 3,000,000 3,427,290
- ---------------------------------------------------------------
Sub. Notes, 6.375%, 01/15/09 800,000 785,288
- ---------------------------------------------------------------
Wachovia Corp., Sub. Notes,
6.375%, 02/01/09 800,000 789,624
- ---------------------------------------------------------------
5,002,202
- ---------------------------------------------------------------
BANKS (MONEY CENTER)-1.17%
Bankers Trust New York Corp.,
Gtd. Notes, 7.875%, 02/25/27 3,000,000 3,092,895
- ---------------------------------------------------------------
Sub. Notes, 7.50%, 11/15/15 3,000,000 3,128,310
- ---------------------------------------------------------------
Deutsche Bank Financial, Gtd.
Unsec. Sub. Deb., 6.70%,
12/13/06 3,500,000 3,575,985
- ---------------------------------------------------------------
Marshall & Ilsley-Series D,
Medium Term Notes, 6.43%,
10/15/02 4,000,000 4,046,960
- ---------------------------------------------------------------
13,844,150
- ---------------------------------------------------------------
BANKS (REGIONAL)-1.59%
HSBC Americas Inc., Sub. Notes,
7.00%, 11/01/06 4,000,000 4,082,080
- ---------------------------------------------------------------
Mercantile Bancorp Inc.,
Sub. Notes, 6.375%, 01/15/04 700,000 697,914
- ---------------------------------------------------------------
Unsec. Sub. Notes, 7.30%,
06/15/07 3,000,000 3,158,790
- ---------------------------------------------------------------
Signet Banking Corp., Sub. Notes,
7.80%, 09/15/06 5,000,000 5,444,100
- ---------------------------------------------------------------
BANKS (REGIONAL)-(CONTINUED)
Swiss Bank Corp.-NY, Sub. Deb.,
7.375%, 07/15/15 $ 5,000,000 $ 5,340,400
- ---------------------------------------------------------------
18,723,284
- ---------------------------------------------------------------
BEVERAGES (NON-ALCOHOLIC)-0.29%
Coca-Cola Enterprises, Inc.,
Putable Notes, 7.24%,
06/20/20(a) 15,000,000 3,397,950
- ---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.79%
Cablevision Systems Corp., Sr.
Notes, 7.875%, 12/15/07 4,200,000 4,310,250
- ---------------------------------------------------------------
Comcast Cable Communications,
Notes, 8.50%, 05/01/27 3,400,000 3,969,500
- ---------------------------------------------------------------
TCI Communications Inc., Sr.
Notes, 8.00%, 08/01/05 1,000,000 1,071,860
- ---------------------------------------------------------------
9,351,610
- ---------------------------------------------------------------
CHEMICALS-0.79%
Solutia Inc., Bonds, 6.72%,
10/15/37 4,150,000 4,222,750
- ---------------------------------------------------------------
Union Carbide Corp., Deb., 6.79%,
06/01/25 5,000,000 5,136,000
- ---------------------------------------------------------------
9,358,750
- ---------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.43%
Millennium America Inc., Sr.
Unsec. Notes, 7.00%, 11/15/06 5,000,000 5,079,300
- ---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-0.27%
Platinum Technology, Inc., Conv.
Sub. Notes, 6.25%, 12/15/02
(acquired 12/11/97; cost
$3,000,000)(b) 3,000,000 3,221,250
- ---------------------------------------------------------------
CONSUMER FINANCE-1.46%
Commercial Credit Co.,
Notes, 6.625%, 06/01/15 2,000,000 2,037,140
- ---------------------------------------------------------------
Putable Notes, 7.875%, 02/01/25 4,000,000 4,606,720
- ---------------------------------------------------------------
Countrywide Funding Corp., Sub.
Notes, 8.25%, 07/15/02 500,000 536,105
- ---------------------------------------------------------------
Ford Motor Credit Co.,
Notes, 6.125%, 01/09/06 1,500,000 1,472,910
- ---------------------------------------------------------------
Notes, 6.75%, 08/15/08 800,000 816,896
- ---------------------------------------------------------------
GMAC, Notes, 9.00%, 10/15/02 4,175,000 4,645,439
- ---------------------------------------------------------------
Household Finance Corp., Notes,
7.125%, 09/01/05 3,000,000 3,116,880
- ---------------------------------------------------------------
17,232,090
- ---------------------------------------------------------------
ELECTRIC COMPANIES-1.91%
CMS Energy Corp., Sr. Notes,
7.375%, 11/15/00 (acquired
11/04/97; cost $3,497,095)(b) 3,500,000 3,518,690
- ---------------------------------------------------------------
</TABLE>
FS-2
<PAGE> 136
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
ELECTRIC COMPANIES-(CONTINUED)
El Paso Electric Co.,
Series D Sec. First Mortgage
Bonds, 8.90%, 02/01/06 $ 4,750,000 $ 5,258,962
- ---------------------------------------------------------------
Series E Sec. First Mortgage
Bonds, 9.40%, 05/01/11 4,000,000 4,523,200
- ---------------------------------------------------------------
UtiliCorp United, Inc., Sr.
Notes, 6.70%, 10/15/06 3,000,000 3,057,510
- ---------------------------------------------------------------
Western Resources Inc., Sr.
Notes, 7.125%, 08/01/09 6,000,000 6,179,040
- ---------------------------------------------------------------
22,537,402
- ---------------------------------------------------------------
ELECTRONICS (DEFENSE)-0.09%
Raytheon Co., Deb., 7.20%,
08/15/27 1,000,000 1,049,630
- ---------------------------------------------------------------
ENTERTAINMENT-1.26%
Time Warner, Inc.,
Notes, 8.18%, 08/15/07 925,000 1,015,853
- ---------------------------------------------------------------
Deb., 9.125%, 01/15/13 6,290,000 7,513,657
- ---------------------------------------------------------------
Unsec. Deb., 6.85%, 01/15/26 2,500,000 2,534,625
- ---------------------------------------------------------------
Viacom, Inc., Sr. Notes, 7.75%,
06/01/05 3,750,000 3,853,912
- ---------------------------------------------------------------
14,918,047
- ---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-1.83%
Associates Corp. of North
America, Series B Sr. Deb.,
7.95%, 02/15/10 5,900,000 6,601,510
- ---------------------------------------------------------------
BellSouth Capital Funding, Deb.,
6.04%, 11/15/26 4,000,000 4,110,320
- ---------------------------------------------------------------
Chrysler Financial Corp., Deb.,
8.50%, 02/01/18 150,000 156,225
- ---------------------------------------------------------------
Finova Capital Corp., Unsec.
Notes, 7.40%, 05/06/06 3,750,000 3,952,463
- ---------------------------------------------------------------
General Electric Capital Corp.,
Deb., 8.30%, 09/20/09 500,000 579,100
- ---------------------------------------------------------------
US West Cap Funding Inc., Unsec.
Bonds, 6.95%, 01/15/37 6,000,000 6,203,220
- ---------------------------------------------------------------
21,602,838
- ---------------------------------------------------------------
FOODS-1.00%
ConAgra Inc., Sr. Unsec. Notes,
7.125%, 10/01/26 7,000,000 7,459,480
- ---------------------------------------------------------------
Grand Metro Investment, Gtd.
Bonds, 7.45%, 04/15/35 4,000,000 4,387,720
- ---------------------------------------------------------------
11,847,200
- ---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC & OTHER)-0.36%
Atrix Labs Inc., Conv. Sub.
Notes, 7.00%, 12/01/04
(acquired 11/21/97; cost
$2,000,000)(b) 2,000,000 1,910,000
- ---------------------------------------------------------------
Nexstar Pharmaceuticals, Conv.
Sub. Deb., 6.25%, 08/01/04
(acquired 07/28/97; cost
$2,500,000)(b) 2,500,000 2,375,000
- ---------------------------------------------------------------
4,285,000
- ---------------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-0.32%
Tenet Healthcare Corp., Sr.
Notes, 8.00%, 01/15/05 $ 3,750,000 $ 3,825,000
- ---------------------------------------------------------------
HEALTH CARE (LONG TERM CARE)-0.97%
Alternative Living Services,
Conv. Sub. Deb., 5.25%,
12/15/02 5,000,000 5,762,500
- ---------------------------------------------------------------
Assisted Living Concepts, Inc.,
Conv. Sub. Deb., 6.00%,
11/01/02 3,000,000 3,067,500
- ---------------------------------------------------------------
Sunrise Assisted Living, Inc.,
Conv. Sub. Notes, 5.50%,
06/15/02 (acquired 06/03/97;
cost $2,000,000)(b) 2,000,000 2,582,500
- ---------------------------------------------------------------
11,412,500
- ---------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.50%
Omnicare, Inc., Sub. Deb., 5.00%,
12/01/07 (acquired 12/04/97;
cost $3,500,000)(b) 3,500,000 3,552,500
- ---------------------------------------------------------------
Res-Care Inc., Conv. Sub. Notes,
6.00%, 12/01/04 (acquired
11/18/97; cost $2,000,000)(b) 2,000,000 2,300,000
- ---------------------------------------------------------------
5,852,500
- ---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.37%
Torchmark Corp., Notes, 7.875%,
05/15/23 4,000,000 4,309,360
- ---------------------------------------------------------------
INSURANCE (PROPERTY-CASUALTY)-0.66%
Florida Windstorm-MBIA, Sr.
Notes, 6.85%, 08/25/07
(acquired 09/05/07; cost
$7,500,000)(b) 7,500,000 7,743,750
- ---------------------------------------------------------------
INVESTMENT MANAGEMENT-0.27%
JPM Capital Trust II, Bonds,
7.95%, 02/01/27 3,000,000 3,199,170
- ---------------------------------------------------------------
LODGING-HOTELS-0.49%
Hilton Hotels Corp., Notes,
7.20%, 12/15/09 5,000,000 5,040,500
- ---------------------------------------------------------------
ITT Corp., Unsec. Gtd. Deb.,
7.375%, 11/15/15 750,000 770,663
- ---------------------------------------------------------------
5,811,163
- ---------------------------------------------------------------
NATURAL GAS-0.74%
Enron Corp.,
Notes, 6.75%, 08/01/09 6,000,000 6,072,420
- ---------------------------------------------------------------
Sr. Sub. Deb., 6.75%, 07/01/05 800,000 806,360
- ---------------------------------------------------------------
Ferrellgas Partners, Series B Sr.
Sec. Gtd. Notes, 9.375%,
06/15/06 1,000,000 1,065,000
- ---------------------------------------------------------------
PanEnergy Corp., Notes, 7.875%,
08/15/04 750,000 815,257
- ---------------------------------------------------------------
8,759,037
- ---------------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-0.36%
Pride Petroleum Services, Inc.,
Conv. Sub. Deb., 6.25%,
02/15/06 2,000,000 4,232,060
- ---------------------------------------------------------------
</TABLE>
FS-3
<PAGE> 137
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
OIL & GAS (EXPLORATION & PRODUCTION)-1.01%
Louis Dreyfus Natural Gas Corp.,
Notes, 6.875%, 12/01/07
(acquired 12/04/97; cost
$4,969,600)(b) $ 5,000,000 $ 4,987,550
- ---------------------------------------------------------------
Tennessee Gas Pipeline Co.,
Bonds, 7.00%, 03/15/27 4,000,000 4,217,600
- ---------------------------------------------------------------
Union Pacific Resources Group
Inc., Deb., 7.50%, 10/15/26 2,500,000 2,674,075
- ---------------------------------------------------------------
11,879,225
- ---------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.50%
AES Corp.,
Sr. Sub. Notes, 10.25%,
07/15/06 1,000,000 1,087,500
- ---------------------------------------------------------------
Sr. Sub. Notes, 8.375%,
08/15/07 3,000,000 3,007,500
- ---------------------------------------------------------------
Indiana Michigan Power, Sec.
Lease Obligation Bonds, 9.82%,
12/07/22 1,357,579 1,776,406
- ---------------------------------------------------------------
5,871,406
- ---------------------------------------------------------------
PUBLISHING (NEWSPAPERS)-0.98%
News America Holdings, Inc.,
Sr. Gtd. Deb., 9.25%, 02/01/13 4,900,000 5,829,579
- ---------------------------------------------------------------
Sr. Gtd. Putable Bonds, 7.43%,
10/01/26 5,450,000 5,713,071
- ---------------------------------------------------------------
11,542,650
- ---------------------------------------------------------------
RAILROADS-0.54%
Norfolk Southern Corp., Putable
Bonds, 7.05%, 05/01/37 3,000,000 3,180,030
- ---------------------------------------------------------------
Union Pacific Corp., Notes,
7.25%, 11/01/08 3,000,000 3,145,590
- ---------------------------------------------------------------
6,325,620
- ---------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-0.17%
J.C. Penney Co., Inc., Notes,
6.50%, 06/15/02 2,015,000 2,030,777
- ---------------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.30%
Sovereign Bancorp, Inc., Sub.
Notes, 8.00%, 03/15/03 3,325,000 3,503,619
- ---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-0.22%
Atria Communities Inc., Conv.
Sub. Notes, 5.00%, 10/15/02
(acquired 10/10/97; cost
$2,500,000)(b) 2,500,000 2,565,625
- ---------------------------------------------------------------
SERVICES (EMPLOYMENT)-0.26%
Personnel Group of America, Inc.,
Conv. Sub. Notes, 5.75%,
07/01/04 (acquired 06/17/97;
cost $2,750,000)(b) 2,750,000 3,028,300
- ---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.36%
360 Communications Co.,
Sr. Notes, 7.60%, 04/01/09 2,000,000 2,116,200
- ---------------------------------------------------------------
Sr. Unsec. Notes, 7.50%,
03/01/06 2,000,000 2,096,820
- ---------------------------------------------------------------
4,213,020
- ---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-0.27%
MCI Communications Corp., Putable
Deb., 7.125%, 06/15/27 $ 3,000,000 $ 3,139,620
- ---------------------------------------------------------------
WASTE MANAGEMENT-0.31%
WMX Technologies, Inc., Unsec.
Notes, 7.10%, 08/01/26 3,500,000 3,622,395
- ---------------------------------------------------------------
Total Domestic Bonds & Notes 302,891,949
- ---------------------------------------------------------------
DOMESTIC COMMON STOCKS-50.19%
AIR FREIGHT-0.15%
AirNet Systems, Inc.(c) 80,100 $ 1,722,150
- ---------------------------------------------------------------
BANKS (MAJOR REGIONAL)-0.23%
NationsBank Corp. 45,000 2,736,563
- ---------------------------------------------------------------
BANKS (MONEY CENTER)-0.92%
BankAmerica Corp. 30,000 2,190,000
- ---------------------------------------------------------------
Chase Manhattan Corp. 45,000 4,927,500
- ---------------------------------------------------------------
Citicorp 30,000 3,793,125
- ---------------------------------------------------------------
10,910,625
- ---------------------------------------------------------------
BANKS (REGIONAL)-0.72%
Citizens National Bank of Texas 125,500 1,568,750
- ---------------------------------------------------------------
Southwest Bancorp of Texas,
Inc.(c) 80,300 2,499,338
- ---------------------------------------------------------------
TCF Financial Corp. 130,000 4,411,875
- ---------------------------------------------------------------
8,479,963
- ---------------------------------------------------------------
BEVERAGES (NON-ALCOHOLIC)-0.17%
PepsiCo, Inc. 56,000 2,040,500
- ---------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-1.14%
CBS Corp. 175,000 5,151,562
- ---------------------------------------------------------------
Heftel Broadcasting Corp.(c) 80,000 3,740,000
- ---------------------------------------------------------------
Univision Communications Inc.(c) 65,000 4,537,813
- ---------------------------------------------------------------
13,429,375
- ---------------------------------------------------------------
BUILDING MATERIALS-0.35%
Group Maintenance America
Corp.(c) 200,000 3,362,500
- ---------------------------------------------------------------
White Cap Industries, Inc.(c) 43,700 813,913
- ---------------------------------------------------------------
4,176,413
- ---------------------------------------------------------------
CHEMICALS-0.26%
IMC Global, Inc. 95,000 3,111,250
- ---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-2.21%
ADC Telecommunications, Inc.(c) 105,000 4,383,750
- ---------------------------------------------------------------
Brightpoint, Inc.(c) 90,000 1,248,750
- ---------------------------------------------------------------
Comverse Technology, Inc.(c) 60,000 2,340,000
- ---------------------------------------------------------------
Corsair Communications, Inc.(c) 26,800 435,500
- ---------------------------------------------------------------
Excel Switching Corp.(c) 20,900 373,588
- ---------------------------------------------------------------
Lucent Technologies, Inc. 43,200 3,450,600
- ---------------------------------------------------------------
</TABLE>
FS-4
<PAGE> 138
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMMUNICATIONS EQUIPMENT-(CONTINUED)
Motorola, Inc. 50,000 $ 2,853,125
- ---------------------------------------------------------------
NEXTLINK Communications,
Inc.-Class A(c) 64,900 1,383,181
- ---------------------------------------------------------------
Qwest Communications
International Inc.(c) 116,200 6,913,900
- ---------------------------------------------------------------
Tellabs, Inc.(c) 50,000 2,643,750
- ---------------------------------------------------------------
26,026,144
- ---------------------------------------------------------------
COMPUTERS (HARDWARE)-1.18%
Compaq Computer Corp. 85,000 4,797,187
- ---------------------------------------------------------------
Dell Computer Corp.(c) 40,000 3,360,000
- ---------------------------------------------------------------
International Business Machines
Corp. 37,000 3,868,813
- ---------------------------------------------------------------
Sun Microsystems, Inc.(c) 46,000 1,834,250
- ---------------------------------------------------------------
13,860,250
- ---------------------------------------------------------------
COMPUTERS (NETWORKING)-0.35%
Cisco Systems, Inc.(c)(d) 75,000 4,181,250
- ---------------------------------------------------------------
COMPUTERS (PERIPHERALS)-0.40%
Adaptec, Inc.(c) 41,000 1,522,125
- ---------------------------------------------------------------
EMC Corp.(c) 120,000 3,292,500
- ---------------------------------------------------------------
4,814,625
- ---------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-2.15%
America Online, Inc.(c)(d) 58,000 5,172,875
- ---------------------------------------------------------------
Computer Associates
International, Inc. 49,500 2,617,313
- ---------------------------------------------------------------
HBO & Co. 100,000 4,800,000
- ---------------------------------------------------------------
J.D. Edwards & Co.(c) 52,900 1,560,550
- ---------------------------------------------------------------
Microsoft Corp.(c) 20,000 2,585,000
- ---------------------------------------------------------------
Midway Games Inc.(c) 71,900 1,307,681
- ---------------------------------------------------------------
Sterling Commerce, Inc.(c) 35,000 1,345,313
- ---------------------------------------------------------------
USWeb Corp.(c) 250,000 2,343,750
- ---------------------------------------------------------------
Veritas Software Corp.(c) 50,000 2,550,000
- ---------------------------------------------------------------
Vestcom International, Inc.(c) 50,000 1,118,750
- ---------------------------------------------------------------
25,401,232
- ---------------------------------------------------------------
CONSUMER (JEWELRY, NOVELTIES & GIFTS)-0.13%
Blyth Industries, Inc.(c) 52,500 1,571,719
- ---------------------------------------------------------------
CONSUMER FINANCE-0.79%
First Alliance Corp.(c) 90,000 1,653,750
- ---------------------------------------------------------------
Green Tree Financial Corp. 65,000 1,702,188
- ---------------------------------------------------------------
MBNA Corp. 71,250 1,946,016
- ---------------------------------------------------------------
SLM Holding Corp. 29,000 4,034,625
- ---------------------------------------------------------------
9,336,579
- ---------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-0.45%
Cardinal Health, Inc. 40,000 3,005,000
- ---------------------------------------------------------------
Fine Host Corp.(c) 75,000 759,375
- ---------------------------------------------------------------
Weider Nutrition International,
Inc. 128,000 1,592,000
- ---------------------------------------------------------------
5,356,375
- ---------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.40%
General Electric Co. 29,710 $ 2,179,971
- ---------------------------------------------------------------
SCI Systems, Inc.(c) 58,000 2,526,625
- ---------------------------------------------------------------
4,706,596
- ---------------------------------------------------------------
ELECTRONICS (COMPONENT DISTRIBUTORS)-0.27%
Kent Electronics Corp.(c) 55,000 1,381,875
- ---------------------------------------------------------------
OSI Systems, Inc.(c) 150,000 1,837,500
- ---------------------------------------------------------------
3,219,375
- ---------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-0.70%
Analog Devices, Inc.(c) 70,000 1,938,125
- ---------------------------------------------------------------
General Scanning, Inc.(c) 120,000 2,070,000
- ---------------------------------------------------------------
Intel Corp. 60,000 4,215,000
- ---------------------------------------------------------------
8,223,125
- ---------------------------------------------------------------
EQUIPMENT (SEMICONDUCTORS)-0.20%
Applied Materials, Inc.(c) 80,000 2,410,000
- ---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-1.95%
American Express Co. 35,000 3,123,750
- ---------------------------------------------------------------
CIT Group, Inc. (The)(c) 93,700 3,021,825
- ---------------------------------------------------------------
Fannie Mae 55,000 3,138,438
- ---------------------------------------------------------------
Finova Group, Inc. 50,000 2,484,375
- ---------------------------------------------------------------
Franchise Mortgage Acceptance Co.
LLC(c) 155,000 2,848,125
- ---------------------------------------------------------------
Freddie Mac 68,000 2,851,750
- ---------------------------------------------------------------
Medallion Financial Corp. 67,900 1,493,800
- ---------------------------------------------------------------
MGIC Investment Corp. 60,000 3,990,000
- ---------------------------------------------------------------
22,952,063
- ---------------------------------------------------------------
FOODS-0.41%
American Italian Pasta Co.-Class
A(c) 57,600 1,440,000
- ---------------------------------------------------------------
Ralston-Ralston Purina Group 36,000 3,345,750
- ---------------------------------------------------------------
4,785,750
- ---------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-1.58%
Abbott Laboratories 32,500 2,130,781
- ---------------------------------------------------------------
American Home Products Corp. 53,000 4,054,500
- ---------------------------------------------------------------
Bristol-Myers Squibb Co. 56,000 5,299,000
- ---------------------------------------------------------------
Johnson & Johnson 43,000 2,832,625
- ---------------------------------------------------------------
Warner-Lambert Co. 35,000 4,340,000
- ---------------------------------------------------------------
18,656,906
- ---------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC & OTHER)-0.80%
Dura Pharmaceuticals, Inc.(c) 100,000 4,587,500
- ---------------------------------------------------------------
Forest Laboratories, Inc.(c) 50,000 2,465,625
- ---------------------------------------------------------------
Spiros Development Corp. II(c) 137,000 2,346,125
- ---------------------------------------------------------------
9,399,250
- ---------------------------------------------------------------
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)-1.59%
Lilly (Eli) & Co. 90,000 6,266,250
- ---------------------------------------------------------------
</TABLE>
FS-5
<PAGE> 139
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (DRUGS-MAJOR PHARMACEUTICALS)-(CONTINUED)
Merck & Co., Inc. 43,000 $ 4,568,750
- ---------------------------------------------------------------
Pfizer Inc. 60,000 4,473,750
- ---------------------------------------------------------------
Schering-Plough Corp. 56,000 3,479,000
- ---------------------------------------------------------------
18,787,750
- ---------------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-0.18%
Tenet Healthcare Corp.(c) 65,000 2,153,125
- ---------------------------------------------------------------
HEALTH CARE (LONG TERM CARE)-0.40%
Sunrise Assisted Living, Inc.(c) 110,000 4,743,750
- ---------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-0.18%
United Healthcare Corp. 43,000 2,136,562
- ---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-1.67%
Arterial Vascular Engineering,
Inc.(c) 60,000 3,900,000
- ---------------------------------------------------------------
Baxter International Inc. 41,500 2,093,156
- ---------------------------------------------------------------
Becton, Dickinson & Co. 30,000 1,500,000
- ---------------------------------------------------------------
Boston Scientific Corp.(c) 40,000 1,835,000
- ---------------------------------------------------------------
Guidant Corp. 40,000 2,490,000
- ---------------------------------------------------------------
Medtronic, Inc. 110,000 5,754,375
- ---------------------------------------------------------------
Quintiles Transnational Corp.(c) 56,000 2,142,000
- ---------------------------------------------------------------
19,714,531
- ---------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.44%
AmeriPath, Inc.(c) 68,400 1,162,800
- ---------------------------------------------------------------
Boron, LePore & Associates,
Inc.(c) 18,300 503,250
- ---------------------------------------------------------------
MAXIMUS, Inc.(c) 90,000 2,176,875
- ---------------------------------------------------------------
Omnicare, Inc. 43,000 1,333,000
- ---------------------------------------------------------------
5,175,925
- ---------------------------------------------------------------
HOUSEHOLD FURNITURE & APPLIANCES-0.36%
Ethan Allen Interiors, Inc. 110,000 4,241,875
- ---------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.59%
Colgate-Palmolive Co. 30,000 2,205,000
- ---------------------------------------------------------------
Kimberly-Clark Corp. 55,000 2,712,187
- ---------------------------------------------------------------
Procter & Gamble Co. 25,000 1,995,312
- ---------------------------------------------------------------
6,912,499
- ---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-1.67%
AmerUs Life Holdings, Inc.-Class A 66,700 2,459,563
- ---------------------------------------------------------------
Equitable Companies, Inc. 85,000 4,228,750
- ---------------------------------------------------------------
Hartford Life, Inc.-Class A 80,000 3,625,000
- ---------------------------------------------------------------
Nationwide Financial Services,
Inc.-Class A 140,000 5,057,500
- ---------------------------------------------------------------
PAULA Financial(c) 36,300 834,900
- ---------------------------------------------------------------
ReliaStar Financial Corp. 85,000 3,500,937
- ---------------------------------------------------------------
19,706,650
- ---------------------------------------------------------------
INSURANCE (MULTI-LINE)-0.55%
CIGNA Corp. 18,000 $ 3,115,125
- ---------------------------------------------------------------
Travelers Group, Inc. 61,999 3,340,196
- ---------------------------------------------------------------
6,455,321
- ---------------------------------------------------------------
INSURANCE (PROPERTY-CASUALTY)-0.73%
Chubb Corp. 32,000 2,420,000
- ---------------------------------------------------------------
Everest Reinsurance Holdings,
Inc. 92,000 3,795,000
- ---------------------------------------------------------------
Travelers Property Casualty
Corp.-Class A 55,000 2,420,000
- ---------------------------------------------------------------
8,635,000
- ---------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-0.25%
Merrill Lynch & Co., Inc. 40,000 2,917,500
- ---------------------------------------------------------------
INVESTMENT MANAGEMENT-0.04%
Conning Corp.(c) 27,200 455,600
- ---------------------------------------------------------------
INVESTMENTS-0.15%
Security Capital Group Inc.-Class
B(c) 55,700 1,810,250
- ---------------------------------------------------------------
LAND DEVELOPMENT-0.56%
Parkway Properties, Inc. 60,000 2,058,750
- ---------------------------------------------------------------
Silverleaf Resorts, Inc.(c) 65,800 1,612,100
- ---------------------------------------------------------------
Trendwest Resorts, Inc.(c) 130,000 2,973,750
- ---------------------------------------------------------------
6,644,600
- ---------------------------------------------------------------
LEISURE TIME (PRODUCTS)-0.63%
Coach USA, Inc.(c) 120,000 4,020,000
- ---------------------------------------------------------------
Florida Panthers Holdings,
Inc.(c) 100,000 1,725,000
- ---------------------------------------------------------------
Steinway Musical Instruments(c) 75,000 1,734,375
- ---------------------------------------------------------------
7,479,375
- ---------------------------------------------------------------
LODGING-HOTELS-0.18%
Marriott International, Inc. 30,000 2,077,500
- ---------------------------------------------------------------
MACHINERY (DIVERSIFIED)-0.53%
Case Corp. 26,000 1,571,375
- ---------------------------------------------------------------
Caterpillar Inc. 55,000 2,670,937
- ---------------------------------------------------------------
Deere & Co. 34,000 1,982,625
- ---------------------------------------------------------------
6,224,937
- ---------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-0.54%
Diebold, Inc. 30,000 1,518,750
- ---------------------------------------------------------------
Superior TeleCom Inc.(c) 76,000 2,626,750
- ---------------------------------------------------------------
US Filter Corp.(c) 75,000 2,245,313
- ---------------------------------------------------------------
6,390,813
- ---------------------------------------------------------------
METAL FABRICATORS-0.30%
Metals USA(c) 229,000 3,492,250
- ---------------------------------------------------------------
NATURAL GAS-1.93%
Coastal Corp. 42,000 2,601,375
- ---------------------------------------------------------------
Columbia Gas System, Inc. 25,000 1,964,062
- ---------------------------------------------------------------
</TABLE>
FS-6
<PAGE> 140
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
NATURAL GAS-(CONTINUED)
Consolidated Natural Gas Co. 25,000 $ 1,512,500
- ---------------------------------------------------------------
El Paso Natural Gas Co. 37,000 2,460,500
- ---------------------------------------------------------------
Energen Corp. 68,900 2,738,775
- ---------------------------------------------------------------
KN Energy, Inc. 48,000 2,592,000
- ---------------------------------------------------------------
MCN Corp. 45,000 1,816,875
- ---------------------------------------------------------------
Sonat, Inc. 72,000 3,294,000
- ---------------------------------------------------------------
Williams Companies, Inc. (The) 132,000 3,745,500
- ---------------------------------------------------------------
22,725,587
- ---------------------------------------------------------------
OIL (INTERNATIONAL INTEGRATED)-0.35%
Exxon Corp. 35,000 2,141,562
- ---------------------------------------------------------------
Mobil Corp. 27,000 1,949,062
- ---------------------------------------------------------------
4,090,624
- ---------------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-2.63%
Bayard Drilling Technologies,
Inc.(c) 69,600 1,131,000
- ---------------------------------------------------------------
Cooper Cameron Corp.(c) 48,000 2,928,000
- ---------------------------------------------------------------
Diamond Offshore Drilling, Inc. 60,000 2,887,500
- ---------------------------------------------------------------
EVI, Inc.(c) 45,000 2,328,750
- ---------------------------------------------------------------
Halliburton Co. 60,000 3,116,250
- ---------------------------------------------------------------
Hanover Compressor Co.(c) 105,000 2,145,938
- ---------------------------------------------------------------
Nabors Industries, Inc.(c) 102,000 3,206,625
- ---------------------------------------------------------------
Newpark Resources, Inc.(c) 187,000 3,272,500
- ---------------------------------------------------------------
Patterson Energy, Inc.(c) 97,800 3,783,637
- ---------------------------------------------------------------
Pride International, Inc.(c) 50,000 1,262,500
- ---------------------------------------------------------------
Santa Fe International Corp. 25,100 1,021,256
- ---------------------------------------------------------------
SEACOR Holdings Inc.(c) 28,000 1,687,000
- ---------------------------------------------------------------
Willbros Group, Inc.(c) 150,000 2,250,000
- ---------------------------------------------------------------
31,020,956
- ---------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.74%
Burlington Resources, Inc. 45,750 2,050,172
- ---------------------------------------------------------------
Carrizo Oil & Gas, Inc.(c) 115,000 905,625
- ---------------------------------------------------------------
Nuevo Energy Co.(c) 60,000 2,445,000
- ---------------------------------------------------------------
Swift Energy Co.(c) 44,000 926,750
- ---------------------------------------------------------------
Vintage Petroleum, Inc. 124,000 2,356,000
- ---------------------------------------------------------------
8,683,547
- ---------------------------------------------------------------
OIL & GAS (REFINING & MARKETING)-0.13%
Tosco Corp. 40,000 1,512,500
- ---------------------------------------------------------------
PERSONAL CARE-0.86%
Avon Products, Inc. 54,000 3,314,250
- ---------------------------------------------------------------
Estee Lauder Cos.-Class A 25,000 1,285,938
- ---------------------------------------------------------------
Gillette Co. 55,000 5,524,063
- ---------------------------------------------------------------
10,124,251
- ---------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.50%
AES Corp.(c) 46,000 $ 2,144,750
- ---------------------------------------------------------------
Calenergy, Inc.(c) 130,000 3,737,500
- ---------------------------------------------------------------
5,882,250
- ---------------------------------------------------------------
PUBLISHING-0.27%
Meredith Corp. 50,000 1,784,375
- ---------------------------------------------------------------
Petersen Companies, Inc.
(The)-Class A(c) 58,900 1,354,700
- ---------------------------------------------------------------
3,139,075
- ---------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST-3.13%
Alexandria Real Estate Equities,
Inc. 90,800 2,865,875
- ---------------------------------------------------------------
Bay Apartment Communities, Inc. 40,000 1,560,000
- ---------------------------------------------------------------
Boston Properties, Inc. 115,000 3,802,187
- ---------------------------------------------------------------
Cali Realty Corp. 80,000 3,280,000
- ---------------------------------------------------------------
Captec Net Lease Realty, Inc.(c) 90,000 1,546,875
- ---------------------------------------------------------------
CCA Prison Realty Trust 136,200 6,077,925
- ---------------------------------------------------------------
Crescent Real Estate Equities,
Co. 40,000 1,575,000
- ---------------------------------------------------------------
Entertainment Properties Trust 166,700 3,229,812
- ---------------------------------------------------------------
Golf Trust of America, Inc. 37,700 1,093,300
- ---------------------------------------------------------------
Imperial Credit Commercial
Mortgage Investment Corp. 131,100 1,917,338
- ---------------------------------------------------------------
Mid-Atlantic Realty Trust 175,900 2,583,531
- ---------------------------------------------------------------
Patriot American Hospitality,
Inc. 120,000 3,457,500
- ---------------------------------------------------------------
Starwood Lodging 67,000 3,877,625
- ---------------------------------------------------------------
36,866,968
- ---------------------------------------------------------------
RETAIL (COMPUTERS & ELECTRONICS)-0.32%
CompUSA, Inc.(c) 85,000 2,635,000
- ---------------------------------------------------------------
Ingram Micro, Inc.-Class A(c) 40,000 1,165,000
- ---------------------------------------------------------------
3,800,000
- ---------------------------------------------------------------
RETAIL (DISCOUNTERS)-0.19%
Ross Stores, Inc. 60,000 2,182,500
- ---------------------------------------------------------------
RETAIL (FOOD CHAINS)-0.60%
American Stores Co. 100,000 2,056,250
- ---------------------------------------------------------------
Safeway, Inc.(c) 80,000 5,060,000
- ---------------------------------------------------------------
7,116,250
- ---------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-0.31%
Dayton-Hudson Corp. 55,000 3,712,500
- ---------------------------------------------------------------
RETAIL (SPECIALTY)-1.13%
Audio Book Club, Inc.(c) 185,000 901,875
- ---------------------------------------------------------------
Inacom Corp.(c) 75,000 2,104,688
- ---------------------------------------------------------------
Linens 'N Things, Inc.(c) 70,000 3,053,750
- ---------------------------------------------------------------
Polo Ralph Lauren Corp.(c) 120,000 2,917,500
- ---------------------------------------------------------------
Toys "R" Us, Inc.(c) 75,000 2,357,812
- ---------------------------------------------------------------
</TABLE>
FS-7
<PAGE> 141
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (SPECIALTY)-(CONTINUED)
U.S. Office Products Co.(c) 102,000 $ 2,001,750
- ---------------------------------------------------------------
13,337,375
- ---------------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.43%
Washington Mutual, Inc. 80,000 5,105,000
- ---------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-0.59%
Abacus Direct Corp.(c) 42,400 1,738,400
- ---------------------------------------------------------------
JLK Direct Distribution
Inc.-Class A(c) 25,800 722,400
- ---------------------------------------------------------------
Outdoor Systems, Inc.(c) 116,100 4,455,337
- ---------------------------------------------------------------
6,916,137
- ---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-2.10%
American Residential Services,
Inc.(c) 130,000 2,031,250
- ---------------------------------------------------------------
Avis Rent A Car, Inc.(c) 118,300 3,778,206
- ---------------------------------------------------------------
Cendant Corp.(c) 148,992 5,121,607
- ---------------------------------------------------------------
Comfort Systems USA, Inc.(c) 149,200 2,946,700
- ---------------------------------------------------------------
Hertz Corp.-Class A 50,500 2,032,625
- ---------------------------------------------------------------
INSpire Insurance Solutions,
Inc.(c) 85,000 1,774,375
- ---------------------------------------------------------------
Metzler Group, Inc.(c) 55,000 2,206,875
- ---------------------------------------------------------------
Pegasus Systems, Inc.(c) 45,600 678,300
- ---------------------------------------------------------------
Service Corp. International 33,222 1,227,138
- ---------------------------------------------------------------
Trammell Crow Co.(c) 35,400 911,550
- ---------------------------------------------------------------
U.S. Rentals, Inc.(c) 87,700 2,060,950
- ---------------------------------------------------------------
24,769,576
- ---------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.61%
DST Systems, Inc.(c) 65,000 2,774,687
- ---------------------------------------------------------------
Equifax, Inc. 52,000 1,842,750
- ---------------------------------------------------------------
Learning Tree International,
Inc.(c) 90,000 2,598,750
- ---------------------------------------------------------------
7,216,187
- ---------------------------------------------------------------
SERVICES (EMPLOYMENT)-0.56%
AccuStaff, Inc.(c) 120,000 2,760,000
- ---------------------------------------------------------------
Administaff, Inc.(c) 63,000 1,630,125
- ---------------------------------------------------------------
Hall, Kinion & Associates,
Inc.(c) 100,000 2,187,500
- ---------------------------------------------------------------
6,577,625
- ---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.06%
LCC International, Inc.-Class
A(c) 45,000 652,500
- ---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-0.84%
IXC Communications, Inc.(c) 110,000 3,451,250
- ---------------------------------------------------------------
Tel-Save Holdings, Inc.(c) 125,000 2,484,375
- ---------------------------------------------------------------
WinStar Communications, Inc.(c) 160,000 3,990,000
- ---------------------------------------------------------------
9,925,625
- ---------------------------------------------------------------
TELEPHONE-0.98%
Cincinnati Bell, Inc. 82,000 2,542,000
- ---------------------------------------------------------------
TELEPHONE-(CONTINUED)
Electric Lightwave, Inc.-Class
A(c) 250,000 $ 3,718,750
- ---------------------------------------------------------------
McLeodUSA Inc.-Class A(c) 45,000 1,440,000
- ---------------------------------------------------------------
Teleport Communications Group
Inc.-Class A(c) 70,000 3,841,250
- ---------------------------------------------------------------
11,542,000
- ---------------------------------------------------------------
TEXTILES (APPAREL)-0.10%
Liz Claiborne, Inc. 27,000 1,128,938
- ---------------------------------------------------------------
TOBACCO-0.42%
Philip Morris Companies, Inc. 110,000 4,984,375
- ---------------------------------------------------------------
TRUCKERS-0.28%
C.H. Robinson Worldwide, Inc. 105,900 2,369,512
- ---------------------------------------------------------------
Jevic Transportation, Inc.(c) 56,700 914,288
- ---------------------------------------------------------------
3,283,800
- ---------------------------------------------------------------
WASTE MANAGEMENT-0.68%
Denali Inc.(c) 150,000 1,987,500
- ---------------------------------------------------------------
Thermo Instrument Systems,
Inc.(c) 62,500 2,152,344
- ---------------------------------------------------------------
USA Waste Services, Inc.(c) 55,000 2,158,750
- ---------------------------------------------------------------
Waterlink, Inc.(c) 107,200 1,768,800
- ---------------------------------------------------------------
8,067,394
- ---------------------------------------------------------------
Total Domestic Common Stocks 592,027,431
- ---------------------------------------------------------------
DOMESTIC CONVERTIBLE PREFERRED STOCKS-3.24%
AIR FREIGHT-0.22%
CNF Trust I-$2.50 Conv. Pfd. 45,000 2,632,500
- ---------------------------------------------------------------
BANKS (REGIONAL)-0.27%
WBK Trust-$3.135 Conv. Pfd. 95,000 3,182,500
- ---------------------------------------------------------------
CONSUMER FINANCE-0.19%
Money Store, Inc. (The)-$1.72
Conv. Pfd. 100,000 2,206,250
- ---------------------------------------------------------------
ENTERTAINMENT-0.07%
Time Warner Inc.-Series M,
$102.50 PIK Conv. Pfd. 712 801,907
- ---------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-0.30%
Medpartners Inc.-$1.442 Conv.
Pfd. TAPS 158,000 3,476,000
- ---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-0.14%
McKesson Corp.-$2.50 Conv. Pfd.
(acquired 02/13/97; cost
$1,105,000)(b) 22,100 1,675,047
- ---------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.38%
Conseco Inc.-$4.279 Conv. PRIDES 14,000 2,184,000
- ---------------------------------------------------------------
Penncorp Financial Group,
Inc.-$3.50 Conv. Pfd. (acquired
08/02/96-11/15/96; cost
$2,072,500)(b) 40,000 2,326,600
- ---------------------------------------------------------------
4,510,600
- ---------------------------------------------------------------
</TABLE>
FS-8
<PAGE> 142
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
INSURANCE (MULTI-LINE)-0.16%
American Bankers Insurance
Group-$3.125 Conv. Pfd. 20,000 $ 1,873,750
- ---------------------------------------------------------------
INSURANCE BROKERS-0.25%
Frontier Financing Trust-$3.125
Conv. Pfd. (acquired 10/09/96;
cost $2,500,000)(b) 50,000 2,918,750
- ---------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-0.07%
Salomon Inc.-$3.484 Conv. Pfd. 14,600 865,050
- ---------------------------------------------------------------
LODGING-HOTELS-0.31%
Host Marriott Corp.-$3.375 Conv.
Pfd. 30,000 1,843,140
- ---------------------------------------------------------------
Royal Caribbean Cruises
Ltd.-$3.63 Conv. Pfd. 20,750 1,765,047
- ---------------------------------------------------------------
3,608,187
- ---------------------------------------------------------------
NATURAL GAS-0.13%
MCN Corp.-$2.013 Conv. PRIDES 46,000 1,575,500
- ---------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.43%
AES Trust I-$2.69 Conv. Pfd. 70,500 5,058,375
- ---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-0.32%
WorldCom, Inc.-$2.68 Conv. Dep.
Pfd. 36,000 3,780,000
- ---------------------------------------------------------------
Total Domestic Convertible Preferred
Stocks 38,164,416
- ---------------------------------------------------------------
U.S. DOLLAR DENOMINATED FOREIGN
BONDS & NOTES-4.76%
CANADA-2.67%
Bell Canada
(Telecommunications-Long
Distance), Deb., 9.50%,
10/15/10 $ 1,750,000 $ 2,204,107
- ---------------------------------------------------------------
Great Atlantic & Pacific Tea Co.,
Inc. (Retail-Food Chains),
Yankee Gtd. Notes, 7.78%,
11/01/00 (acquired 10/18/95;
cost $500,000)(b) 500,000 516,453
- ---------------------------------------------------------------
Gulf Canada Resources, Ltd.
(Oil-International Integrated),
Sr. Yankee Unsec. Notes, 8.35%,
08/01/06 4,500,000 4,904,190
- ---------------------------------------------------------------
Husky Oil Ltd. (Oil-International
Integrated), Sr. Yankee Notes,
7.125%, 11/15/06 6,300,000 6,472,746
- ---------------------------------------------------------------
Laidlaw Inc. (Services-Commercial
& Consumer),
Deb., 6.65%, 10/01/04 4,000,000 4,028,360
- ---------------------------------------------------------------
Deb, 6.72%, 10/01/27 3,000,000 3,047,550
- ---------------------------------------------------------------
Nova Chemicals Ltd. (Chemicals),
Yankee Deb., 7.00%, 08/15/26 4,000,000 4,111,600
- ---------------------------------------------------------------
Province of Manitoba (Sovereign
Debt), Yankee Bonds, 7.75%,
07/17/16 1,500,000 1,717,050
- ---------------------------------------------------------------
Royal Bank of Canada (Banks-Major
Regional), Yankee Sub. Notes,
6.75%, 10/24/11 3,000,000 2,994,810
- ---------------------------------------------------------------
CANADA-(CONTINUED)
Talisman Energy (Oil &
Gas-Exploration & Production),
Yankee Deb., 7.125%, 06/01/07 $ 1,500,000 $ 1,549,140
- ---------------------------------------------------------------
31,546,006
- ---------------------------------------------------------------
CAYMAN ISLANDS-0.48%
Hutchison Whampoa Ltd.
(Shipping), Series D Sr. Gtd.
Unsec. Unsub. Deb., 6.988%,
08/01/37 (acquired 10/02/97;
cost $6,027,460)(b) 6,000,000 5,606,640
- ---------------------------------------------------------------
GERMANY-0.60%
Deutsche Bank Finance BV
(Financial-Diversified), Conv.
Gtd. Bonds, 3.80%, 02/12/17
(acquired 01/16/97; cost
$1,642,600)(a)(b) 4,000,000 1,790,000
- ---------------------------------------------------------------
Dresdner Bank A.G. (Banks-Major
Regional), Sub. Bonds, 6.00%,
11/03/08 4,000,000 3,840,000
- ---------------------------------------------------------------
Tarkett International (Household
Furniture & Appliances), Yankee
Sr. Sub. Notes, 9.00%, 03/01/02 1,500,000 1,477,500
- ---------------------------------------------------------------
7,107,500
- ---------------------------------------------------------------
NORWAY-0.22%
Petroleum Geo-Services A.S.A.
(Oil & Gas-Services), Yankee
Notes, 7.50%, 03/31/07 2,500,000 2,633,550
- ---------------------------------------------------------------
UNITED KINGDOM-0.79%
Royal Bank of Scotland PLC
(Banks-Major Regional), Yankee
Sub. Notes, 6.375%, 02/01/11 1,500,000 1,452,165
- ---------------------------------------------------------------
Terra Nova (U.K.) Holdings, Co.
(Insurance-Property), Gtd. Sr.
Secured Notes, 7.20%, 08/15/07 3,000,000 3,102,600
- ---------------------------------------------------------------
Videotron Holdings PLC
(Broadcasting-Television,
Radio, & Cable), Sr. Discount
Notes, 11.125%, 07/01/04(e) 5,000,000 4,725,000
- ---------------------------------------------------------------
9,279,765
- ---------------------------------------------------------------
Total U.S. Dollar Denominated
Foreign Bonds & Notes 56,173,461
- ---------------------------------------------------------------
NON-U.S. DOLLAR DENOMINATED FOREIGN
BONDS & NOTES-2.97%(f)
AUSTRALIA-0.53%
Australian Government (Sovereign
Debt), Bonds, 10.00%,
10/15/07 AUD 5,000,000 4,197,433
- ---------------------------------------------------------------
Queensland Treasury Corp.
(Sovereign Debt), Gtd. Bonds,
6.50%, 06/14/05 3,000,000 2,000,299
- ---------------------------------------------------------------
6,197,732
- ---------------------------------------------------------------
CANADA-1.13%
Bank of Montreal (Banks-Money
Center), Sub. Deb., 7.92%,
07/31/12 CAD 1,850,000 1,458,937
- ---------------------------------------------------------------
</TABLE>
FS-9
<PAGE> 143
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
CANADA-(CONTINUED)
Bell Mobility Cellular Inc.
(Telecommunications-Cellular/Wireless),
Deb., 6.55%, 06/02/08 CAD 2,500,000 $ 1,761,065
- ---------------------------------------------------------------
Canadian Oil Debco Inc. (Oil &
Gas-Exploration & Production),
Deb., 11.00%, 10/31/00 1,500,000 1,176,551
- ---------------------------------------------------------------
NAV Canada (Services-Commercial &
Consumer), Bonds, 7.40%,
06/01/27 3,500,000 2,795,249
- ---------------------------------------------------------------
Province of Ontario (Sovereign
Debt), Sr. Unsec. Unsub. Global
Bonds, 8.00%, 03/11/03 2,300,000 1,783,331
- ---------------------------------------------------------------
Telegobe Canada, Inc.
(Telephone), Unsec. Deb.,
8.35%, 06/20/03 1,000,000 776,572
- ---------------------------------------------------------------
Trans-Canada Pipelines (Natural
Gas), Series Q Deb., 10.625%,
10/20/09 1,500,000 1,427,858
- ---------------------------------------------------------------
Westcoast Energy, Inc. (Oil &
Gas-Exploration & Production),
Deb., 6.45%, 12/18/06 3,000,000 2,152,619
- ---------------------------------------------------------------
13,332,182
- ---------------------------------------------------------------
NEW ZEALAND-0.47%
Fannie Mae
(Financial-Diversified), Notes,
7.25%, 06/20/02 NZD 9,850,000 5,595,978
- ---------------------------------------------------------------
UNITED KINGDOM-0.84%
Fannie Mae
(Financial-Diversified), Sr.
Unsec. Notes, 6.875%,
06/07/02 GBP 2,800,000 4,612,605
- ---------------------------------------------------------------
Sutton Bridge Financial Ltd.,
(Financial-Diversified), Gtd.
Bonds 8.625%, 06/30/22
(acquired 05/29/97; cost
$4,890,565)(b) 3,000,000 5,327,372
- ---------------------------------------------------------------
9,939,977
- ---------------------------------------------------------------
Total Non-U.S. Dollar
Denominated Foreign Bonds &
Notes 35,065,869
- ---------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS-4.15%
ARGENTINA-0.07%
Banco Rio de La Plata S.A.
(Banks-Money Center)(c) 62,900 $ 880,600
- ---------------------------------------------------------------
BRAZIL-0.19%
Uniao de Bancos Brasileiros
S.A.-GDR (Banks-Regional)(c) 68,300 2,198,406
- ---------------------------------------------------------------
CANADA-0.65%
Cadillac Fairview Corp. (Land
Development)(c) 144,800 3,402,800
- ---------------------------------------------------------------
MetroNet Communications
Corp.-Class B (Communications
Equipment)(c) 99,800 1,734,025
- ---------------------------------------------------------------
Newcourt Credit Group, Inc.
Warrants
(Financial-Diversified) 21,700 713,388
- ---------------------------------------------------------------
CANADA-(CONTINUED)
Philip Services Corp. (Waste
Management)(c) 125,000 $ 1,796,875
- ---------------------------------------------------------------
7,647,088
- ---------------------------------------------------------------
CHINA-0.08%
China Southern Airlines Co.
Ltd.-ADR (Airlines)(c) 75,200 991,700
- ---------------------------------------------------------------
FINLAND-0.14%
Nokia Oyj A.B.-Class A-ADR
(Communications Equipment) 23,500 1,645,000
- ---------------------------------------------------------------
FRANCE-0.13%
AXA S.A.-ADR (Insurance-Life &
Health)(c) 40,000 1,560,000
- ---------------------------------------------------------------
IRELAND-0.16%
Warner Chilcott
Laboratories-SP-ADR (Health
Care-Drugs-Generic & Other)(c) 150,600 1,863,675
- ---------------------------------------------------------------
ISRAEL-0.49%
ECI Telecommunications Ltd.
(Communications Equipment) 24,000 612,000
- ---------------------------------------------------------------
Gilat Communications Ltd.
(Telecommunications-Cellular
/Wireless)(c) 200,000 1,475,000
- ---------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd.-ADR (Health
Care-Drugs-Generic & Other) 45,000 2,129,063
- ---------------------------------------------------------------
Zag Industries Ltd.
(Chemicals-Speciality)(c) 180,000 1,597,500
- ---------------------------------------------------------------
5,813,563
- ---------------------------------------------------------------
NETHERLANDS-0.17%
New Holland N.V.
(Machinery-Diversified)() 75,000 1,982,812
- ---------------------------------------------------------------
NEW ZEALAND-0.12%
Sky Network Television Ltd.
(Broadcasting-Television, Radio
& Cable)(c) 93,700 1,405,500
- ---------------------------------------------------------------
NORWAY-0.17%
Petroleum Geo-Services ASA-ADR
(Oil & Gas-Drilling &
Equipment)(c) 30,000 1,942,500
- ---------------------------------------------------------------
PORTUGAL-0.09%
Telecel-Comunicacaoes Pessoais,
S.A.
(Telecommunications-Cellular
/Wireless)(c) 10,300 1,102,100
- ---------------------------------------------------------------
SWEDEN-0.17%
Telefonaktiebolaget LM
Ericsson-ADR (Communications
Equipment) 55,000 2,052,188
- ---------------------------------------------------------------
UNITED KINGDOM-1.52%
Avis Europe PLC
(Services-Commercial &
Consumer) (acquired
03/26/97;cost $1,535,109)(b)(c) 765,450 2,187,418
- ---------------------------------------------------------------
Bass PLC (Beverages-Alcoholic)() 64,350 998,197
- ---------------------------------------------------------------
Danka Business Systems PLC-ADR
(Office Equipment & Supplies) 60,000 956,250
- ---------------------------------------------------------------
ESG Re Limited
(Insurance-Life/Health)(c) 70,300 1,652,050
- ---------------------------------------------------------------
</TABLE>
FS-10
<PAGE> 144
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
Railtrack Group PLC (Shipping)() 3,000,000 $ 4,764,457
- ---------------------------------------------------------------
SmithKline Beecham PLC-ADR
(Health Care-Drugs-Major
Pharmaceuticals) 46,000 2,366,125
- ---------------------------------------------------------------
Stirling Cooke Brown Holdings
Ltd. (Insurance-Life/Health)(c) 39,400 965,300
- ---------------------------------------------------------------
Stolt Comex Seaway, S.A. (Oil &
Gas-Exploration &
Production)(c) 80,000 4,000,000
- ---------------------------------------------------------------
17,889,797
- ---------------------------------------------------------------
Total Foreign Stocks & Other Equity
Interests 48,974,929
===============================================================
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
U.S. TREASURY SECURITIES-5.87%
U.S. TREASURY NOTES & BONDS-5.87%
Notes, 6.50%, 05/31/01 $17,000,000 $ 17,413,950
- ---------------------------------------------------------------
Notes, 7.25%, 08/15/04 2,500,000 2,703,400
- ---------------------------------------------------------------
Notes, 7.50%, 02/15/05 3,000,000 3,298,200
- ---------------------------------------------------------------
Notes, 6.50%, 10/15/06 $12,000,000 $ 12,570,480
- ---------------------------------------------------------------
Notes, 6.25%, 02/15/07 10,000,000 10,322,900
- ---------------------------------------------------------------
Bonds, 6.75%, 08/15/26 3,000,000 3,305,430
- ---------------------------------------------------------------
Bonds, 6.625%, 02/15/27 11,700,000 12,707,955
- ---------------------------------------------------------------
Bonds, 6.375%, 08/15/27 6,500,000 6,859,710
- ---------------------------------------------------------------
Total U.S. Treasury
Securities 69,182,025
- ---------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-0.35%
Tennessee Valley Authority,
Bonds, 5.98%, 04/01/36 4,000,000 4,093,880
- ---------------------------------------------------------------
REPURCHASE AGREEMENT-1.91%(g)
Smith Barney, Inc., 6.75%,
01/02/98(h) 22,553,820 22,553,820
- ---------------------------------------------------------------
TOTAL INVESTMENTS-99.12% 1,169,127,780
- ---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.88% 10,404,456
- ---------------------------------------------------------------
NET ASSETS-100.00% $1,179,532,236
===============================================================
</TABLE>
Notes to Schedule of investments:
(a) Zero coupon bond issued at a discount. The interest rate shown represents
the rate of original issue discount.
(b) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The
aggregate market value of these securities at 12/31/97 was $60,133,445
which represented 5.10% of the Fund's net assets.
(c) Non-income producing security.
(d) A portion of this security is subject to call options written. See Note 7.
(e) Discounted bond at purchase. The interest rate represents the coupon rate
at which the bond will accrue at a specified future date.
(f) Foreign denominated security. Par value and coupon are denominated in
currency of country indicated.
(g) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(h) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$400,150,000. Collateralized by $395,097,000 U.S. Government obligations,
0% to 13.875%, due 01/07/98 to 12/15/43 with an aggregate market value at
12/31/97 of $408,000,323.
Investment abbreviations:
ADR - American Depositary Receipts
AUD - Australian Dollar
CAD - Canadian Dollar
Conv. - Convertible
Ctfs. - Certificates
Deb. - Debenture
Dep. - Depository
GDR - Global Depositary Receipt
GBP - British Pounds
Gtd. - Guaranteed
NZD - New Zealand Dollar
Pfd. - Preferred
PIK - Payment in Kind
PRIDES- Preferred Redeemable Increased Dividend Equity Security
Sr. - Senior
Sub. - Subordinated
TAPS - Threshold Appreciation Price Securities
Unsec.- Unsecured
Unsub.- Unsubordinated
See Notes to Financial Statements.
FS-11
<PAGE> 145
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$972,947,165) $1,169,127,780
- ---------------------------------------------------------
Foreign currencies, at market value (cost
$92,811) 93,198
- ---------------------------------------------------------
Receivables for:
Investments sold 163,269
- ---------------------------------------------------------
Fund shares sold 6,660,956
- ---------------------------------------------------------
Interest and dividends 8,935,089
- ---------------------------------------------------------
Investment for deferred compensation plan 19,822
- ---------------------------------------------------------
Other assets 35,115
- ---------------------------------------------------------
Total assets 1,185,035,229
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 1,147,975
- ---------------------------------------------------------
Fund shares reacquired 2,491,186
- ---------------------------------------------------------
Options written 90,938
- ---------------------------------------------------------
Deferred compensation plan 19,822
- ---------------------------------------------------------
Accrued advisory fees 514,118
- ---------------------------------------------------------
Accrued administrative service fees 6,906
- ---------------------------------------------------------
Accrued distribution fees 914,189
- ---------------------------------------------------------
Accrued transfer agent fees 97,479
- ---------------------------------------------------------
Accrued trustees' fees 3,660
- ---------------------------------------------------------
Accrued operating expenses 216,720
- ---------------------------------------------------------
Total liabilities 5,502,993
- ---------------------------------------------------------
Net assets applicable to shares
outstanding $1,179,532,236
=========================================================
NET ASSETS:
Class A $ 683,632,584
=========================================================
Class B $ 486,505,816
=========================================================
Class C $ 9,393,836
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER SHARE:
Class A 26,517,207
=========================================================
Class B 18,896,410
=========================================================
Class C 364,691
=========================================================
Class A:
Net asset value and redemption price
per share $ 25.78
=========================================================
Offering price per share:
(Net asset value of $25.78 divided by
95.25%) $ 27.07
=========================================================
Class B:
Net asset value and offering price per
share $ 25.75
=========================================================
Class C:
Net asset value and offering price per
share $ 25.76
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 23,898,243
- ---------------------------------------------------------
Dividends (net of $63,548 foreign
withholding tax) 6,646,446
- ---------------------------------------------------------
Total investment income 30,544,689
- ---------------------------------------------------------
EXPENSES:
Advisory fees 4,789,939
- ---------------------------------------------------------
Administrative service fees 87,375
- ---------------------------------------------------------
Custodian fees 90,832
- ---------------------------------------------------------
Distribution fees-Class A 1,325,895
- ---------------------------------------------------------
Distribution fees-Class B 3,517,227
- ---------------------------------------------------------
Distribution fees-Class C 13,018
- ---------------------------------------------------------
Trustees' fees 12,799
- ---------------------------------------------------------
Transfer agent fees-Class A 637,946
- ---------------------------------------------------------
Transfer agent fees-Class B 642,019
- ---------------------------------------------------------
Transfer agent fees-Class C 3,692
- ---------------------------------------------------------
Other 435,860
- ---------------------------------------------------------
Total expenses 11,556,602
- ---------------------------------------------------------
Less: Expenses paid indirectly (27,927)
- ---------------------------------------------------------
Net expenses 11,528,675
- ---------------------------------------------------------
Net investment income 19,016,014
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN
CURRENCIES, FUTURES AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 30,048,747
- ---------------------------------------------------------
Foreign currencies (79,358)
- ---------------------------------------------------------
Futures contracts 4,307,606
- ---------------------------------------------------------
Option contracts 554,458
- ---------------------------------------------------------
34,831,453
- ---------------------------------------------------------
Net unrealized appreciation (depreciation)
of:
Investment securities 134,971,145
- ---------------------------------------------------------
Foreign currencies (42,818)
- ---------------------------------------------------------
Option contracts 10,684
- ---------------------------------------------------------
134,939,011
- ---------------------------------------------------------
Net gain from investment securities,
foreign currencies, futures and
option contracts 169,770,464
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $188,786,478
=========================================================
</TABLE>
See Notes to Financial Statements.
FS-12
<PAGE> 146
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 19,016,014 $ 9,321,617
- ---------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures and option contracts 34,831,453 12,716,582
- ---------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities,
foreign currencies, futures and option contracts 134,939,011 41,965,393
- ---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 188,786,478 64,003,592
- ---------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (12,472,168) (6,033,635)
- ---------------------------------------------------------------------------------------------
Class B (5,631,570) (3,100,998)
- ---------------------------------------------------------------------------------------------
Class C (29,666) --
- ---------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A (19,245,568) (6,912,890)
- ---------------------------------------------------------------------------------------------
Class B (13,549,718) (4,888,186)
- ---------------------------------------------------------------------------------------------
Class C (198,011) --
- ---------------------------------------------------------------------------------------------
Net equalization credits 8,681,162 7,707,610
- ---------------------------------------------------------------------------------------------
Share transactions-net:
Class A 260,376,777 212,483,093
- ---------------------------------------------------------------------------------------------
Class B 192,163,146 143,138,052
- ---------------------------------------------------------------------------------------------
Class C 9,380,380 --
- ---------------------------------------------------------------------------------------------
Net increase in net assets 608,261,242 406,396,638
- ---------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 571,270,994 164,874,356
- ---------------------------------------------------------------------------------------------
End of period $1,179,532,236 $ 571,270,994
=============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $ 958,373,243 $ 496,452,940
- ---------------------------------------------------------------------------------------------
Undistributed net investment income 19,641,775 10,459,581
- ---------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities,
foreign currencies, futures and option contracts 5,338,635 3,118,901
- ---------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities,
foreign currencies, futures and option contracts 196,178,583 61,239,572
- ---------------------------------------------------------------------------------------------
$1,179,532,236 $ 571,270,994
=============================================================================================
</TABLE>
See Notes to Financial Statements.
FS-13
<PAGE> 147
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Balanced Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of nine separate series portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers three different classes of shares: the Class A shares, the
Class B shares and the Class C shares. The new Class C shares commenced sales on
August 4, 1997. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's objective is to
achieve as high a total return to investors as possible, consistent with
preservation of capital, by investing in a broadly diversified portfolio of
high-yielding securities, including common stocks, preferred stocks, convertible
securities and bonds.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular day,
the security is valued at the mean between the closing bid and asked prices
on that day. Each security traded in the over-the-counter market (but not
including securities reported on the NASDAQ National Market System) is valued
at the mean between the last bid and asked prices based upon quotes furnished
by market makers for such securities. If a mean is not available, as is the
case in some foreign markets, the closing bid will be used absent a last
sales price. Each security reported on the NASDAQ National Market System is
valued at the last sales price on the valuation date or absent a last sales
price, at the mean of the closing bid and asked prices. Debt obligations
(including convertible bonds) are valued on the basis of prices provided by
an independent pricing service. Prices provided by the pricing service may be
determined without exclusive reliance on quoted prices and may reflect
appropriate factors such as yield, type of issue, coupon rate and maturity
date. Securities for which market prices are not provided by any of the above
methods are valued at the mean between last bid and asked prices based upon
quotes furnished by independent sources. Securities for which market
quotations either are not readily available or are questionable are valued at
fair value as determined in good faith by or under the supervision of the
Trust's officers in a manner specifically authorized by the Board of
Trustees. Short-term obligations having 60 days or less to maturity are
valued at amortized cost which approximates market value. Generally, trading
in foreign securities is substantially completed each day at various times
prior to the close of the New York Stock Exchange. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the New York Stock Exchange.
Occasionally, events affecting the values of such securities and such
exchange rates may occur between the times at which they are determined and
the close of the New York Stock Exchange which will not be reflected in the
computation of the Fund's net asset value. If events materially affecting the
value of such securities occur during such period, then these securities will
be valued at their fair value as determined in good faith by or under the
supervision of the Board of Trustees.
B. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
C. Bond Premiums -- It is the policy of the Fund not to amortize market premiums
on bonds for financial reporting purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
E. Equalization -- The Fund follows the accounting practice known as
equalization by which a portion of the proceeds from sales and the costs of
repurchases of Fund shares, equivalent on a per share basis to the amount of
undistributed net investment income, is credited or charged to undistributed
income when the transaction is recorded so the undistributed net investment
income per share is unaffected by sales or redemptions of Fund shares.
F. Expenses -- Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses which are attributable to more than one class are allocated among
the classes.
G. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items
FS-14
<PAGE> 148
denominated in foreign currencies are translated into U.S. dollar amounts on
the respective dates of such transactions.
H. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
I. Stock Index Futures Contracts -- The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities as collateral for the account of
the broker (the Fund's agent in acquiring the futures position). During the
period the futures contracts are open, changes in the value of the contracts
are recognized as unrealized gains or losses by "marking to market" on a
daily basis to reflect the market value of the contracts at the end of each
day's trading. Variation margin payments are made or received depending upon
whether unrealized gains or losses are incurred. When the contracts are
closed, the Fund recognizes a realized gain or loss equal to the difference
between the proceeds from, or cost of, the closing transaction and the
Fund's basis in the contract. Risks include the possibility of an illiquid
market and the change in the value of the contracts may not correlate with
changes in the value of the Fund's portfolio being hedged.
J. Covered Call Options -- The Fund may write call options, but only on a
covered basis; that is, the Fund will own the underlying security. Options
written by the Fund normally will have expiration dates between three and
nine months from the date written. The exercise price of a call option may
be below, equal to, or above the current market value of the underlying
security at the time the option is written. When the Fund writes a covered
call option, an amount equal to the premium received by the Fund is recorded
as an asset and an equivalent liability. The amount of the liability is
subsequently "marked-to-market" to reflect the current market value of the
option written. The current market value of a written option is the mean
between the last bid and asked prices on that day. If a written call option
expires on the stipulated expiration date, or if the Fund enters into a
closing purchase transaction, the Fund realizes a gain (or a loss if the
closing purchase transaction exceeds the premium received when the option
was written) without regard to any unrealized gain or loss on the underlying
security, and the liability related to such option is extinguished. If a
written option is exercised, the Fund realizes a gain or a loss from the
sale of the underlying security and the proceeds of the sale are increased
by the premium originally received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the
call option at any time during the option period. During the option period,
in return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has
retained the risk of loss should the price of the underlying security
decline. During the option period, the Fund may be required at any time to
deliver the underlying security against payment of the exercise price. This
obligation is terminated upon the expiration of the option period or at such
earlier time at which the Fund effects a closing purchase transaction by
purchasing (at a price which may be higher than that received when the call
option was written) a call option identical to the one originally written.
The Fund will not write a covered call option if, immediately thereafter,
the aggregate value of the securities underlying all such options,
determined as of the dates such options were written, would exceed 5% of the
net assets of the Fund.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays AIM an advisory fee at an annual rate of 0.75% of the
first $150 million of the Fund's average daily net assets, plus 0.50% of the
Fund's average daily net assets in excess of $150 million.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended December 31, 1997, AIM
was reimbursed $87,375 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the year ended December 31, 1997, AFS
was paid $653,940 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted
distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares and Class C shares (the "Class A and C Plan"), and the
Fund's Class B shares (the "Class B Plan") (collectively, the "Plans"). The
Fund, pursuant to the Class A and C Plan, pays AIM Distributors compensation at
an annual rate of 0.25% of the average daily net assets of the Class A shares
and 1.00% of the average daily net assets of the Class C shares. The Fund
pursuant to the Class B Plan, pays AIM Distributors an annual rate of 1.00% of
the average daily net assets attributable to the Class B shares. Of these
amounts, the Fund may pay a service fee of 0.25% of the average daily net assets
of the Class A, Class B or Class C shares to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own the appropriate class of shares of the Fund. Any
amounts not paid as a service fee by the Class B or Class C shares under the
Plans would constitute an asset-based sales charge. The Plans also impose a cap
on the total sales charges, including asset-based sales charges, that may be
paid by the respective classes. AIM Distributors may, from time
FS-15
<PAGE> 149
to time, assign, transfer, or pledge to one or more designees, its rights to all
or a designated portion of (a) compensation received by AIM Distributors from
the Fund pursuant to the Class B Plan (but not AIM Distributors' duties and
obligations pursuant to the Class B Plan) and (b) any contingent deferred sales
charges received by AIM Distributors related to the Class B shares. During the
year ended December 31, 1997, for the Class A shares and Class B shares, and the
period August 4, 1997 (date sales commenced) through December 31, 1997, for the
Class C shares, the Class A, Class B, and Class C shares paid AIM Distributors
$1,325,895, $3,517,227 and $13,018, respectively, as compensation under the
Plans.
AIM Distributors received commissions of $672,146 from sales of the Class A
shares of the Fund during the year ended December 31, 1997. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1997,
AIM Distributors received $99,075 in contingent deferred sales charges imposed
on redemptions of Fund shares. Certain officers and trustees of the Trust are
officers and directors of AIM, AIM Distributors and AFS.
During the year ended December 31, 1997, the Fund paid legal fees of $5,966
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
AIM has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses related to pricing services used by the Fund which reduced Fund
expenses by $3,714 during the year ended December 31, 1997. Also during the year
ended December 31, 1997 the Fund received reductions in transfer agency fees
from AFS (an affiliate of AIM) and reductions in custodian fees of $9,699 and
$14,514, respectively, under expense offset arrangements. The effect of the
above arrangements resulted in reductions of the Fund's total expenses of
$27,927 during the year ended December 31, 1997.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 15, 1997, the Fund was
limited to borrowing up to the lesser of (i) $325,000,000 or (ii) the limits set
by its prospectus for borrowings. During the year ended December 31, 1997, the
Fund did not borrow under the line of credit agreement. The funds which are
parties to the line of credit are charged a commitment fee of 0.05% on the
unused balance of the committed line. The commitment fee is allocated among such
funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1997 was
$999,679,075 and $562,878,959, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of December 31, 1997 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $210,448,136
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (14,427,520)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $196,020,616
=========================================================
</TABLE>
Cost of investments for tax purposes is $973,107,164.
NOTE 7-OPTION CONTRACTS WRITTEN
Transactions in call options written during the year ended December 31, 1997 are
summarized as follows:
<TABLE>
<CAPTION>
OPTION CONTRACTS
-----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- --------
<S> <C> <C>
Beginning of year -- --
- -------------------------------------------------------------------------------------
Written 2,585 $ 978,417
- -------------------------------------------------------------------------------------
Closed (1,700) (794,778)
- -------------------------------------------------------------------------------------
Exercised (135) (46,843)
- -------------------------------------------------------------------------------------
Expired (150) (35,174)
- -------------------------------------------------------------------------------------
End of year 600 $ 101,622
- -------------------------------------------------------------------------------------
</TABLE>
FS-16
<PAGE> 150
Open call option contracts written at December 31, 1997 were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, UNREALIZED
CONTRACT STRIKE NUMBER OF PREMIUM 1997 APPRECIATION
ISSUE MONTH PRICE CONTRACTS RECEIVED MARKET VALUE (DEPRECIATION)
- ----------------------------------------------- -------- ------ --------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
America Online, Inc. Jan. 98 95 300 $53,474 $41,251 $12,223
Cisco Systems, Inc. Jan. 98 56.67 300 48,148 49,687 (1,539)
--- -------- ------- -------
600 $101,622 $90,938 $10,684
=== ======== ======= =======
</TABLE>
NOTE 8-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 16,304,170 $ 379,544,296 11,936,333 $241,163,392
- ---------------------------------------------------------------------------------------------------------------------------
Class B 8,995,999 214,419,729 7,608,028 153,665,571
- ---------------------------------------------------------------------------------------------------------------------------
Class C* 363,376 9,356,324 -- --
- ---------------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 1,215,553 29,691,206 571,269 11,884,617
- ---------------------------------------------------------------------------------------------------------------------------
Class B 710,951 17,509,949 347,628 7,257,995
- ---------------------------------------------------------------------------------------------------------------------------
Class C* 8,636 215,490 -- --
- ---------------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (6,305,229) (148,858,725) (2,004,527) (40,564,916)
- ---------------------------------------------------------------------------------------------------------------------------
Class B (1,668,675) (39,766,532) (876,383) (17,785,514)
- ---------------------------------------------------------------------------------------------------------------------------
Class C* (7,321) (191,434) -- --
- ---------------------------------------------------------------------------------------------------------------------------
19,617,460 $ 461,920,303 17,582,348 $355,621,145
===========================================================================================================================
</TABLE>
* Class C shares commenced sales on August 4, 1997.
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A outstanding
during each of the years in the four-year period ended December 31, 1997, the
four months ended December 31, 1993 and the year ended August 31, 1993, for a
share of Class B outstanding during each of the years in the four-year period
ended December 31, 1997 and the period October 18, 1993 (date sales commenced)
through December 31, 1993, and for a share of Class C outstanding during the
period August 4, 1997 (date sales commenced) through December 31, 1997. Prior to
October 15, 1993, the Fund was known as AIM Convertible Securities, Inc. and had
a different investment objective.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------
DECEMBER 31, AUGUST 31,
----------------------------------------------------- ----------
1997 1996 1995 1994 1993 1993
-------- -------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 21.84 $ 19.22 $ 14.62 $ 16.10 $ 15.97 $ 12.77
- ------------------------------------------------------------ -------- -------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.60 0.66 0.49 0.44 0.10 0.32
- ------------------------------------------------------------ -------- -------- ------- ------- ------- -------
Net gains (losses) on securities (both realized and
unrealized) 4.66 2.99 4.57 (1.31) 0.18 3.18
- ------------------------------------------------------------ -------- -------- ------- ------- ------- -------
Total from investment operations 5.26 3.65 5.06 (0.87) 0.28 3.50
- ------------------------------------------------------------ -------- -------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.55) (0.55) (0.46) (0.39) (0.15) (0.30)
- ------------------------------------------------------------ -------- -------- ------- ------- ------- -------
Distributions from net realized gains (0.77) (0.48) -- (0.22) -- --
- ------------------------------------------------------------ -------- -------- ------- ------- ------- -------
Total distributions (1.32) (1.03) (0.46) (0.61) (0.15) (0.30)
- ------------------------------------------------------------ -------- -------- ------- ------- ------- -------
Net asset value, end of period $ 25.78 $ 21.84 $ 19.22 $ 14.62 $ 16.10 $ 15.97
============================================================ ======== ======== ======= ======= ======= =======
Total return(a) 24.41% 19.25% 34.97% (5.44)% 1.76% 27.75%
============================================================ ======== ======== ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $683,633 $334,189 $92,241 $37,572 $23,520 $19,497
============================================================ ======== ======== ======= ======= ======= =======
Ratio of expenses to average net assets 0.98%(b)(c) 1.15% 1.43%(d) 1.25%(d) 2.17%(f) 2.07%
============================================================ ======== ======== ======= ======= ======= =======
Ratio of net investment income to average net assets 2.48%(b) 2.97% 2.81%(e) 3.07%(e) 1.81%(f) 2.23%
============================================================ ======== ======== ======= ======= ======= =======
Portfolio turnover rate 66% 72% 77% 76% 233% 154%
============================================================ ======== ======== ======= ======= ======= =======
Average brokerage commission rate paid(g) $ 0.0570 $ 0.0558 N/A N/A N/A N/A
============================================================ ======== ======== ======= ======= ======= =======
</TABLE>
(a) Does not deduct sales charges and are not annualized for
periods less than one year.
(b) Ratios are based on average net assets of $530,358,031.
(c) Includes expenses paid indirectly. Excluding expenses paid
indirectly, the ratio of expenses to average net assets
would have remained the same.
(d) After fee waivers and/or expense reimbursements. Ratios of
expenses to average net assets prior to fee waivers and/or
expense reimbursements were 1.46% and 1.68% for 1995 and
1994, respectively.
(e) After fee waivers and/or expense reimbursements. Ratios of
net investment income to average net assets prior to fee
waivers and/or expense reimbursements were 2.78% and 2.64%
for 1995 and 1994, respectively.
(f) Annualized.
(g) The average commission rate paid is the total brokerage
commissions paid on applicable purchases and sales of
securities for the period divided by the total number of
related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and
thereafter.
FS-17
<PAGE> 151
NOTE 9-FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS B CLASS C
-------------------------------------------------------------- -------
1997 1996 1995 1994 1993 1997
-------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 21.83 $ 19.22 $ 14.62 $ 16.11 $ 16.69 $ 25.55
- ----------------------------------------------- -------- -------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.38 0.48 0.31 0.31 0.04 0.16
- ----------------------------------------------- -------- -------- ------- ------- ------- -------
Net gains (losses) on securities (both
realized and unrealized) 4.68 2.99 4.61 (1.31) (0.58) 1.01
- ----------------------------------------------- -------- -------- ------- ------- ------- -------
Total from investment operations 5.06 3.47 4.92 (1.00) (0.54) 1.17
- ----------------------------------------------- -------- -------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.37) (0.38) (0.32) (0.27) (0.04) (0.19)
- ----------------------------------------------- -------- -------- ------- ------- ------- -------
Distributions from net realized gains (0.77) (0.48) -- (0.22) -- (0.77)
- ----------------------------------------------- -------- -------- ------- ------- ------- -------
Total distributions (1.14) (0.86) (0.32) (0.49) (0.04) (0.96)
- ----------------------------------------------- -------- -------- ------- ------- ------- -------
Net asset value, end of period $ 25.75 $ 21.83 $ 19.22 $ 14.62 $ 16.11 $ 25.76
=============================================== ======== ======== ======= ======= ======= =======
Total return(a) 23.42% 18.28% 33.93% (6.23)% (3.23)% 4.67%
=============================================== ======== ======== ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $486,506 $237,082 $72,634 $20,245 $ 2,754 $ 9,394
=============================================== ======== ======== ======= ======= ======= =======
Ratio of expenses to average net assets 1.79%(b)(c) 1.97% 2.21%(d) 1.98%(d) 2.83%(f) 1.78%(c)(g)
=============================================== ======== ======== ======= ======= ======= =======
Ratio of net investment income to average net
assets 1.67%(b) 2.15% 2.03%(e) 2.34%(e) 1.15%(f) 1.68%(g)
=============================================== ======== ======== ======= ======= ======= =======
Portfolio turnover rate 66% 72% 77% 76% 233% 66%
=============================================== ======== ======== ======= ======= ======= =======
Average brokerage commission rate paid(h) $ 0.0570 $ 0.0558 N/A N/A N/A $0.0570
=============================================== ======== ======== ======= ======= ======= =======
</TABLE>
(a) Does not deduct contingent deferred sales charges and are
not annualized for periods less than one year.
(b) Ratios are based on average net assets of $351,722,707.
(c) Includes expenses paid indirectly. Excluding expenses paid
indirectly, the ratio of expenses to average net assets
would have remained the same.
(d) After fee waivers and/or expense reimbursements. Ratios of
expenses to average net assets prior to fee waivers and/or
expense reimbursements were 2.23% and 2.45% for 1995 and
1994, respectively.
(e) After fee waivers and/or expense reimbursements. Ratios of
net investment income to average net assets prior to fee
waivers and/or expense reimbursements were 2.01% and 1.87%
for 1995 and 1994, respectively.
(f) Annualized.
(g) Ratios are annualized and based on average net assets of
$3,167,605.
(h) The average commission rate paid is the total brokerage
commissions paid on applicable purchases and sales of
securities for the period divided by the total number of
related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and
thereafter.
FS-18
<PAGE> 152
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Global Utilities Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Global Utilities Fund (a portfolio of
AIM Funds Group), including the schedule of investments,
as of December 31, 1997, and the related statement of
operations for the year then ended, the statement of
changes in net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years or periods in the five-year period
then ended. These financial statements and financial
highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion
on these financial statements and 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
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 and financial highlights. Our procedures
included confirmation of securities owned as of December
31, 1997, by correspondence with the custodian and
brokers. 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
financial highlights referred to above present fairly, in
all material respects, the financial position of AIM
Global Utilities Fund as of December 31, 1997, the
results of its operations for the year then ended, the
changes in its net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years or periods in the five-year period
then ended, in conformity with generally accepted
accounting principles.
/s/ KPMG Peat Marwick LLP
------------------------
KPMG Peat Marwick LLP
Houston, Texas
February 6, 1998
FS-19
<PAGE> 153
SCHEDULE OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-48.27%
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.67%
Univision Communications Inc.(a) 26,500 $ 1,850,031
- --------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-3.06%
ADC Telecommunications, Inc.(a) 62,000 2,588,500
- --------------------------------------------------------------
Excel Switching Corp.(a) 4,900 87,587
- --------------------------------------------------------------
Lucent Technologies, Inc. 29,000 2,316,375
- --------------------------------------------------------------
NEXTLINK Communications, Inc.-Class
A(a) 15,900 338,869
- --------------------------------------------------------------
Qwest Communications International
Inc.(a) 34,100 2,028,950
- --------------------------------------------------------------
Tellabs, Inc.(a) 20,000 1,057,500
- --------------------------------------------------------------
8,417,781
- --------------------------------------------------------------
ELECTRIC COMPANIES-16.07%
Allegheny Energy, Inc. 106,500 3,461,250
- --------------------------------------------------------------
Carolina Power & Light Co. 57,000 2,418,937
- --------------------------------------------------------------
CINergy Corp. 57,000 2,183,813
- --------------------------------------------------------------
DQE, Inc. 110,000 3,863,750
- --------------------------------------------------------------
Edison International 61,000 1,658,437
- --------------------------------------------------------------
FPL Group, Inc. 80,000 4,735,000
- --------------------------------------------------------------
IPALCO Enterprises, Inc. 25,500 1,069,406
- --------------------------------------------------------------
New Century Energies, Inc. 65,200 3,125,525
- --------------------------------------------------------------
New York State Electric & Gas Corp. 75,000 2,662,500
- --------------------------------------------------------------
NIPSCO Industries, Inc. 85,000 4,202,188
- --------------------------------------------------------------
Pinnacle West Capital Corp. 150,000 6,356,250
- --------------------------------------------------------------
Public Service Company of New
Mexico 60,000 1,421,250
- --------------------------------------------------------------
Sierra Pacific Resources 45,500 1,706,250
- --------------------------------------------------------------
Southern Co. 109,000 2,820,375
- --------------------------------------------------------------
Teco Energy, Inc. 88,200 2,480,625
- --------------------------------------------------------------
44,165,556
- --------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-0.43%
Superior TeleCom Inc.(a) 34,100 1,178,581
- --------------------------------------------------------------
NATURAL GAS-8.81%
Coastal Corp. (The) 17,500 1,083,906
- --------------------------------------------------------------
Columbia Gas System, Inc. 25,000 1,964,063
- --------------------------------------------------------------
El Paso Natural Gas Co. 103,000 6,849,500
- --------------------------------------------------------------
Energen Corp. 19,100 759,225
- --------------------------------------------------------------
KN Energy, Inc. 41,600 2,246,400
- --------------------------------------------------------------
Public Service Company of North
Carolina, Inc. 40,000 915,000
- --------------------------------------------------------------
Sonat, Inc. 76,500 3,499,875
- --------------------------------------------------------------
Williams Companies, Inc. (The) 242,600 6,883,775
- --------------------------------------------------------------
24,201,744
- --------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-1.20%
AES Corp.(a) 28,400 $ 1,324,150
- --------------------------------------------------------------
Calenergy, Inc.(a) 69,000 1,983,750
- --------------------------------------------------------------
3,307,900
- --------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST-5.03%
Alexandria Real Estate Equities,
Inc. 27,500 867,969
- --------------------------------------------------------------
Boston Properties, Inc. 40,000 1,322,500
- --------------------------------------------------------------
Mack-Cali Realty Corp. 43,400 1,779,400
- --------------------------------------------------------------
Captec Net Lease Realty, Inc. 35,000 601,562
- --------------------------------------------------------------
CCA Prison Realty Trust 38,200 1,704,675
- --------------------------------------------------------------
Crescent Real Estate Equities, Co. 26,400 1,039,500
- --------------------------------------------------------------
Entertainment Properties Trust 30,400 589,000
- --------------------------------------------------------------
Golf Trust of America, Inc. 13,500 391,500
- --------------------------------------------------------------
Imperial Credit Commercial Mortgage
Investment Corp. 31,600 462,150
- --------------------------------------------------------------
Meditrust Corp. 25,594 937,380
- --------------------------------------------------------------
Parkway Properties, Inc. 15,000 514,688
- --------------------------------------------------------------
Patriot American Hospitality, Inc. 60,800 1,751,800
- --------------------------------------------------------------
Public Storage, Inc. 27,000 793,125
- --------------------------------------------------------------
Starwood Lodging Trust 18,500 1,070,688
- --------------------------------------------------------------
13,825,937
- --------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-1.42%
IXC Communications, Inc.(a) 36,500 1,145,188
- --------------------------------------------------------------
WinStar Communications, Inc.(a) 61,500 1,533,656
- --------------------------------------------------------------
WorldCom, Inc.(a) 40,000 1,210,000
- --------------------------------------------------------------
3,888,844
- --------------------------------------------------------------
TELEPHONE-11.58%
Ameritech Corp. 65,400 5,264,700
- --------------------------------------------------------------
BellSouth Corp. 89,100 5,017,444
- --------------------------------------------------------------
Century Telephone Enterprises 66,800 3,327,475
- --------------------------------------------------------------
Cincinnati Bell, Inc. 234,000 7,254,000
- --------------------------------------------------------------
Electric Lightwave, Inc.-Class A(a) 80,000 1,190,000
- --------------------------------------------------------------
GTE Corp. 36,600 1,912,350
- --------------------------------------------------------------
McLeodUSA Inc.-Class A(a) 40,000 1,280,000
- --------------------------------------------------------------
SBC Communications, Inc. 63,800 4,673,350
- --------------------------------------------------------------
Teleport Communications Group
Inc.-Class A(a) 35,000 1,920,625
- --------------------------------------------------------------
31,839,944
- --------------------------------------------------------------
Total Domestic Common Stocks 132,676,318
- --------------------------------------------------------------
</TABLE>
FS-20
<PAGE> 154
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC PREFERRED STOCKS-3.53%
ENTERTAINMENT-0.36%
Time Warner Inc.-Series M, $102.50
PIK Pfd. 891 $ 1,002,672
- --------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-0.14%
Salomon Inc.-$3.48 Conv. Pfd. 6,700 396,975
- --------------------------------------------------------------
NATURAL GAS-0.71%
MCN Corp.-$2.013 Conv. Pfd. PRIDES 57,000 1,952,250
- --------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-1.61%
AES Trust I-$2.69 Conv. Pfd. 54,000 3,874,500
- --------------------------------------------------------------
Citizens Utilities Co.-$2.50 Conv.
Pfd. 11,400 544,350
- --------------------------------------------------------------
4,418,850
- --------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-0.71%
WorldCom, Inc.-$2.68 Conv. Pfd. 18,500 1,942,500
- --------------------------------------------------------------
Total Domestic Preferred Stocks 9,713,247
- --------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY
INTERESTS-30.05%
ARGENTINA-0.70%
Central Costanera S.A.-Class B
(Electric Companies) 475,200 1,235,755
- --------------------------------------------------------------
Telefonica de Argentina S.A.-ADR
(Telephone) 18,300 681,675
- --------------------------------------------------------------
1,917,430
- --------------------------------------------------------------
AUSTRALIA-0.14%
Telstra Corp. Ltd. (Telephone)(a) 195,000 411,776
- --------------------------------------------------------------
AUSTRIA-0.48%
Oesterreichische
Elektrizitaetswirtschafts
A.G.-Class A (Electric Companies) 12,500 1,326,050
- --------------------------------------------------------------
BELGIUM-0.54%
Electrabel S.A. (Electric
Companies) 6,400 1,480,338
- --------------------------------------------------------------
BRAZIL-1.95%
Centrais Eletricas de Santa
Catarina S.A. (Electric
Companies) 590,000 734,824
- --------------------------------------------------------------
Companhia Paranaense de
Energia-Copel (Electric
Companies)(a) 45,700 625,519
- --------------------------------------------------------------
Eletricidade de Sao Paulo SA
(Electric Companies)(a) 3,990 750,773
- --------------------------------------------------------------
Telecomunicacoes Brasileiras
S.A.-Telebras-ADR (Telephone) 28,000 3,260,250
- --------------------------------------------------------------
5,371,366
- --------------------------------------------------------------
CANADA-1.82%
MetroNet Communications Corp.-Class
B (Communications Equipment)(a) 23,400 406,575
- --------------------------------------------------------------
Philip Services Corp. (Waste
Management)(a) 50,000 718,750
- --------------------------------------------------------------
TELUS Corp.
(Telecommunications-Cellular
/Wireless) 95,000 2,107,344
- --------------------------------------------------------------
Westcoast Energy Inc. (Natural Gas) 71,900 1,653,700
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
CANADA-(CONTINUED)
Westshore Terminals Inc.
(Services-Facilities &
Environmental) 40,800 $ 102,782
- --------------------------------------------------------------
4,989,151
- --------------------------------------------------------------
CHILE-1.40%
Cia. de Telecomunicaciones de Chile
S.A.-ADR (Telephone) 80,750 2,412,406
- --------------------------------------------------------------
Enersis S.A.-ADR (Electric
Companies) 49,600 1,438,400
- --------------------------------------------------------------
3,850,806
- --------------------------------------------------------------
DENMARK-0.31%
Tele Danmark A.S.-ADR (Telephone) 27,500 847,344
- --------------------------------------------------------------
FINLAND-0.30%
Nokia Oy A.B.-Class A-ADR
(Communications Equipment) 11,600 812,000
- --------------------------------------------------------------
GERMANY-2.27%
RWE A.G. (Electric Companies) 28,100 1,507,310
- --------------------------------------------------------------
VEBA A.G.
(Manufacturing-Diversified) 46,500 3,166,342
- --------------------------------------------------------------
Viag A.G.
(Manufacturing-Diversified) 2,900 1,562,034
- --------------------------------------------------------------
6,235,686
- --------------------------------------------------------------
FRANCE-0.37%
France Telecom S.A.-ADR
(Telecommunications-Cellular
/Wireless)(a) 28,000 1,008,000
- --------------------------------------------------------------
HONG KONG-0.23%
China Telecom Ltd.-ADR
(Telecommunications-Cellular
/Wireless)(a) 19,000 637,688
- --------------------------------------------------------------
HUNGARY-0.40%
Magyar Tavkozlesi-ADR
(Telecommunications-Long
Distance)(a) 42,700 1,110,200
- --------------------------------------------------------------
INDONESIA-0.16%
PT Indosat-ADR (Telephone) 23,000 444,187
- --------------------------------------------------------------
ISRAEL-0.51%
ECI Telecommunications Ltd.
(Communications Equipment) 33,200 846,600
- --------------------------------------------------------------
Gilat Communications Ltd.
(Communications Equipment)(a) 75,000 553,125
- --------------------------------------------------------------
1,399,725
- --------------------------------------------------------------
ITALY-2.81%
Telecom Italia Mobile S.p.A.
(Telecommunications-Cellular
/Wireless) 578,300 2,668,222
- --------------------------------------------------------------
Telecom Italia S.p.A. (Telephone) 788,333 5,042,835
- --------------------------------------------------------------
7,711,057
- --------------------------------------------------------------
JAPAN-0.58%
Nippon Telegraph & Telephone Corp.
(Telephone) 850 729,111
- --------------------------------------------------------------
</TABLE>
FS-21
<PAGE> 155
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
JAPAN-(CONTINUED)
Nippon Telegraph & Telephone Corp.-ADR
(Telephone) 20,000 $ 866,250
- ---------------------------------------------------------------
1,595,361
- ---------------------------------------------------------------
NETHERLANDS-0.66%
Royal PTT Nederland N.V.--ADR
(Telephone) 43,709 1,813,923
- ---------------------------------------------------------------
NEW ZEALAND-1.33%
Sky Network Television Ltd.
(Broadcasting-Television, Radio &
Cable)(a) 22,600 339,000
- ---------------------------------------------------------------
Telecom Corp. of New Zealand Ltd.-ADR
(Telephone) 85,600 3,317,000
- ---------------------------------------------------------------
3,656,000
- ---------------------------------------------------------------
PERU-0.48%
Luz del Sur S.A. (Power
Producers-Independent) 32,000 552,000
- ---------------------------------------------------------------
Telefonica del Peru S.A.-ADR
(Telephone) 33,000 769,313
- ---------------------------------------------------------------
1,321,313
- ---------------------------------------------------------------
PORTUGAL-1.57%
Electricidade de Portugal, S.A.-ADR
(Electric Companies)(a) 16,100 623,875
- ---------------------------------------------------------------
Portugal Telecom S.A.-ADR (Telephone) 68,100 3,200,700
- ---------------------------------------------------------------
Telecel-Comunicacaoes Pessoais, S.A.
(Telecommunications-Cellular
/Wireless)(a) 4,600 492,200
- ---------------------------------------------------------------
4,316,775
- ---------------------------------------------------------------
SPAIN-2.38%
Autopistas Concesionaria Espanola S.A.
(Services-Commercial & Consumer) 77,000 1,033,574
- ---------------------------------------------------------------
Iberdrola S.A. (Electric Companies) 233,000 3,066,393
- ---------------------------------------------------------------
Telefonica de Espana-ADR (Telephone) 26,800 2,440,475
- ---------------------------------------------------------------
6,540,442
- ---------------------------------------------------------------
SWEDEN-0.68%
Telefonaktiebolaget LM Ericsson-ADR
(Communications Equipment) 50,000 1,865,625
- ---------------------------------------------------------------
UNITED KINGDOM-7.22%
Energy Group PLC (Power
Producers-Independent) 30,000 1,338,750
- ---------------------------------------------------------------
Hyder PLC (Water Utilities) 53,955 857,774
- ---------------------------------------------------------------
National Grid Group PLC (Electric
Companies) 154,737 734,442
- ---------------------------------------------------------------
National Power PLC (Electric Companies) 175,000 1,724,468
- ---------------------------------------------------------------
National Power PLC-ADR (Electric
Companies) 40,000 1,585,000
- ---------------------------------------------------------------
PowerGen PLC (Electric Companies) 209,500 2,725,053
- ---------------------------------------------------------------
PowerGen PLC-ADR (Electric Companies) 40,900 2,172,812
- ---------------------------------------------------------------
Scottish Power PLC (Electric Companies) 201,550 1,780,864
- ---------------------------------------------------------------
Southern Electric PLC (Electric
Companies) 124,061 1,030,983
- ---------------------------------------------------------------
United Utilities PLC (Water Utilities) 197,100 2,524,916
- ---------------------------------------------------------------
Wessex Water PLC (Water Utilities) 152,775 1,287,168
- ---------------------------------------------------------------
UNITED KINGDOM-(CONTINUED)
Yorkshire Water PLC (Water
Utilities) 262,440 $ 2,090,439
- --------------------------------------------------------------
19,852,669
- --------------------------------------------------------------
VENEZUELA-0.76%
Cia. Anonima Nacional Telefonos de
Venezuela--ADR
(Telecommunications-Long
Distance)(a) 49,900 2,077,088
- --------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests 82,592,000
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
DOMESTIC NON-CONVERTIBLE BONDS &
NOTES-9.00%
BROADCASTING (TELEVISION, RADIO &
CABLE)-0.74%
Comcast Corp., Sr. Sub. Deb.,
9.50%, 01/15/08 $ 900,000 $ 961,875
- --------------------------------------------------------------
TCI Communications Inc., Sr.
Notes, 8.00%, 08/01/05 1,000,000 1,071,860
- --------------------------------------------------------------
2,033,735
- --------------------------------------------------------------
ELECTRIC COMPANIES-0.91%
El Paso Electric Co., Series D
Sec. 1st Mortgage Bonds, 8.90%,
02/01/06 1,425,000 1,577,688
- --------------------------------------------------------------
Western Resources Inc., Sr. Notes,
7.125%, 08/01/09 900,000 926,856
- --------------------------------------------------------------
2,504,544
- --------------------------------------------------------------
ENTERTAINMENT-0.89%
Time Warner, Inc.
Deb., 9.125%, 01/15/13 1,000,000 1,194,540
- --------------------------------------------------------------
Notes, 8.18%, 08/15/07 1,150,000 1,262,953
- --------------------------------------------------------------
2,457,493
- --------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-0.55%
California Energy Co., Notes,
10.25%, 01/15/04 1,400,000 1,512,000
- --------------------------------------------------------------
NATURAL GAS-2.64%
Enron Corp., Sr. Sub. Deb., 6.75%,
07/01/05 3,750,000 3,779,812
- --------------------------------------------------------------
Ferrellgas Partners, Series B Sr.
Sec. Gtd. Notes, 9.375%,
06/15/06 1,000,000 1,065,000
- --------------------------------------------------------------
PanEnergy Corp., Notes, 7.875%,
08/15/04 2,205,000 2,396,857
- --------------------------------------------------------------
7,241,669
- --------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.73%
Tennessee Gas Pipeline Co., Bonds,
7.00%, 03/15/27 1,900,000 2,003,360
- --------------------------------------------------------------
POWER PRODUCERS
(INDEPENDENT)-1.80%
AES Corp., Sr. Sub. Notes, 10.25%,
07/15/06 925,000 1,005,938
- --------------------------------------------------------------
Indiana Michigan Power, Sec. Lease
Obligation Bonds, 9.82%,
12/07/22 3,021,500 3,953,663
- --------------------------------------------------------------
4,959,601
- --------------------------------------------------------------
</TABLE>
FS-22
<PAGE> 156
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
TELECOMMUNICATIONS (LONG DISTANCE)-0.74%
AT&T Corp., Sr. Notes, 7.75%,
03/01/07 $ 1,850,000 $ 2,027,767
- --------------------------------------------------------------
Total Domestic Non-Convertible
Bonds & Notes 24,740,169
- --------------------------------------------------------------
FOREIGN NON-CONVERTIBLE BONDS &
NOTES-3.97%
CANADA-3.97%(b)
Bell Canada
(Telecommunications-Cellular/Wireless),
Series EW Deb., 8.80%, 08/17/05 CAD 950,000 780,169
- --------------------------------------------------------------
Unsec. Deb., 10.875, 10/11/04 1,700,000 1,500,468
- --------------------------------------------------------------
Canadian Oil Debco Inc. (Oil &
Gas-Exploration & Production),
Deb., 11.00%, 10/31/00 1,750,000 1,372,643
- --------------------------------------------------------------
Ontario Hydro (Electric
Companies), Global Bonds, 9.00%,
06/24/02 2,500,000 1,985,357
- --------------------------------------------------------------
Telegobe Canada, Inc. (Telephone),
Unsec. Deb., 8.35%, 06/20/03 2,400,000 1,863,772
- --------------------------------------------------------------
CANADA-(CONTINUED)
Trans-Canada Pipelines (Oil &
Gas-Exploration & Production),
Series Q Deb., 10.625%, 10/20/09CAD 1,750,000 $ 1,665,834
- --------------------------------------------------------------
Unsec. Notes, 8.55%, 02/01/06 2,150,000 1,741,650
- --------------------------------------------------------------
Total Foreign Non-Convertible
Bonds & Notes 10,909,893
- --------------------------------------------------------------
REPURCHASE AGREEMENT-4.69%(c)
Smith Barney, Inc., 6.75%,
01/02/98(d) $12,885,919 12,885,919
- --------------------------------------------------------------
TOTAL INVESTMENT SECURITIES-99.51% 273,517,546
- --------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-0.49% 1,348,748
- --------------------------------------------------------------
NET ASSETS-100.00% $274,866,294
==============================================================
</TABLE>
Notes to Schedule of Investments:
(a)Non-income producing security.
(b)Foreign denominated security. Par value and coupon are denominated in
Canadian dollars.
(c)Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts, and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(d)Joint repurchase agreement entered into 12/31/97 with a maturing value of
$400,150,000. Collateralized by $395,097,000 U.S. Government obligations, 0%
to 13.875% due 01/07/98 to 12/15/43 with an aggregate market value at
12/31/97 at $408,000,323.
Abbreviations:
ADR - American Depositary Receipt
CAD - Canadian Dollars
Conv. - Convertible
Deb. - Debentures
Gtd. - Guaranteed
Pfd. - Preferred
PIK - Payment in Kind
PRIDES - Preferred Redeemable Increased Dividend Equity Securities
Sec. - Secured
Sr. - Senior
Sub. - Subordinated
Unsec. - Unsecured
See Notes to Financial Statements.
FS-23
<PAGE> 157
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$185,929,099) $273,517,546
- ---------------------------------------------------------
Foreign currencies, at market value (cost
$88,841) 89,034
- ---------------------------------------------------------
Receivables for:
Investments sold 1,090,901
- ---------------------------------------------------------
Fund shares sold 709,629
- ---------------------------------------------------------
Dividends and interest 1,401,296
- ---------------------------------------------------------
Investment for deferred compensation plan 21,326
- ---------------------------------------------------------
Other assets 41,624
- ---------------------------------------------------------
Total assets 276,871,356
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 210,840
- ---------------------------------------------------------
Fund shares reacquired 1,155,229
- ---------------------------------------------------------
Dividends 80,868
- ---------------------------------------------------------
Deferred compensation 21,326
- ---------------------------------------------------------
Accrued advisory fees 130,112
- ---------------------------------------------------------
Accrued administrative service fees 4,301
- ---------------------------------------------------------
Accrued distribution fees 218,550
- ---------------------------------------------------------
Accrued trustees' fees 2,114
- ---------------------------------------------------------
Accrued transfer agent fees 86,224
- ---------------------------------------------------------
Accrued operating expenses 95,498
- ---------------------------------------------------------
Total liabilities 2,005,062
- ---------------------------------------------------------
Net assets applicable to shares outstanding $274,866,294
=========================================================
NET ASSETS:
Class A $179,456,316
=========================================================
Class B $ 94,226,860
=========================================================
Class C $ 1,183,118
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 9,317,846
=========================================================
Class B 4,897,285
=========================================================
Class C 61,490
=========================================================
Class A:
Net asset value and redemption price per
share $ 19.26
=========================================================
Offering price per share:
(Net asset value of $19.26 divided by
94.50%) $ 20.38
=========================================================
Class B:
Net asset value and offering price per
share $ 19.24
=========================================================
Class C:
Net asset value and offering price per
share $ 19.24
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $353,265 foreign
withholding tax) $ 6,525,168
- ---------------------------------------------------------
Interest 3,200,225
- ---------------------------------------------------------
Total investment income 9,725,393
- ---------------------------------------------------------
EXPENSES:
Advisory fees 1,440,692
- ---------------------------------------------------------
Administrative service fees 77,375
- ---------------------------------------------------------
Custodian fees 63,892
- ---------------------------------------------------------
Trustees' fees 9,921
- ---------------------------------------------------------
Distribution fees -- Class A 411,911
- ---------------------------------------------------------
Distribution fees -- Class B 832,184
- ---------------------------------------------------------
Distribution fees -- Class C 1,555
- ---------------------------------------------------------
Transfer agent fees -- Class A 298,837
- ---------------------------------------------------------
Transfer agent fees -- Class B 183,976
- ---------------------------------------------------------
Transfer agent fees -- Class C 315
- ---------------------------------------------------------
Other 129,993
- ---------------------------------------------------------
Total expenses 3,450,651
- ---------------------------------------------------------
Less: Expenses paid indirectly (4,257)
- ---------------------------------------------------------
Net expenses 3,446,394
- ---------------------------------------------------------
Net investment income 6,278,999
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT
SECURITIES AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) from
Investment securities 10,287,778
- ---------------------------------------------------------
Foreign currency transactions (85,284)
- ---------------------------------------------------------
10,202,494
- ---------------------------------------------------------
Net unrealized appreciation (depreciation) of:
Investment securities 36,483,295
- ---------------------------------------------------------
Foreign currency transactions (14,239)
- ---------------------------------------------------------
36,469,056
- ---------------------------------------------------------
Net gain from investment securities and
foreign currency transactions 46,671,550
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $52,950,549
=========================================================
</TABLE>
See Notes to Financial Statements.
FS-24
<PAGE> 158
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 6,278,999 $ 8,067,022
- --------------------------------------------------------------------------------------------
Net realized gain from investment securities and foreign
currency transactions 10,202,494 9,942,020
- --------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities and
foreign currency transactions 36,469,056 12,247,663
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 52,950,549 30,256,705
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (4,517,536) (6,101,120)
- --------------------------------------------------------------------------------------------
Class B (1,708,856) (2,294,587)
- --------------------------------------------------------------------------------------------
Class C (2,079)
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains on
investment securities:
Class A (99,987) --
- --------------------------------------------------------------------------------------------
Class B (52,584) --
- --------------------------------------------------------------------------------------------
Class C (629) --
- --------------------------------------------------------------------------------------------
Share transactions-net:
Class A (15,436,814) (21,359,001)
- --------------------------------------------------------------------------------------------
Class B (921,844) 1,711,797
- --------------------------------------------------------------------------------------------
Class C 1,124,595
- --------------------------------------------------------------------------------------------
Net increase in net assets 31,334,815 2,213,794
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 243,531,479 241,317,685
- --------------------------------------------------------------------------------------------
End of period $274,866,294 $243,531,479
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $186,636,908 $201,870,971
- --------------------------------------------------------------------------------------------
Undistributed net investment income 78,008 112,764
- --------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities and foreign currency transactions 567,427 (9,567,151)
- --------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities and
foreign currency transactions 87,583,951 51,114,895
- --------------------------------------------------------------------------------------------
$274,866,294 $243,531,479
============================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Global Utilities Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of nine separate series
portfolios, each having an unlimited number of shares of beneficial interest.
The Fund currently offers three different classes of shares: the Class A shares,
Class B shares and Class C shares. The new Class C shares commenced sales on
August 4, 1997. Class A shares are sold with a front-end sales charge. The Class
B and Class C shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's objective is to
achieve a high level of current income, and as a secondary objective the Fund
seeks to achieve capital appreciation, by investing primarily in the common and
preferred stocks of public utility companies.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular
day, the security is valued at the mean between the closing bid and asked
prices on that day. Each security traded in the over-the-counter market (but
FS-25
<PAGE> 159
not including securities reported on the NASDAQ National Market System) is
valued at the mean between the last bid and asked prices based upon quotes
furnished by market makers for such securities. If a mean is not available,
as is the case in some foreign markets, the closing bid will be used absent
a last sales price. Each security reported on the NASDAQ National Market
System is valued at the last sales price on the valuation date or absent a
last sales price, at the mean of the closing bid and asked prices. Debt
obligations (including convertible bonds) are valued on the basis of prices
provided by an independent pricing service. Prices provided by the pricing
service may be determined without exclusive reliance on quoted prices and
may reflect appropriate factors such as yield, type of issue, coupon rate
and maturity date. Securities for which market prices are not provided by
any of the above methods are valued at the mean between last bid and asked
prices based upon quotes furnished by independent sources. Securities for
which market quotations either are not readily available or are questionable
are valued at fair value as determined in good faith by or under the
supervision of the Trust's officers in a manner specifically authorized by
the Board of Trustees. Short-term obligations having 60 days or less to
maturity are valued at amortized cost which approximates market value.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of the New York Stock Exchange. The
values of such securities used in computing the net asset value of the
Fund's shares are determined as of such times. Foreign currency exchange
rates are also generally determined prior to the close of the New York Stock
Exchange. Occasionally, events affecting the values of such securities and
such exchange rates may occur between the times at which they are determined
and the close of the New York Stock Exchange which will not be reflected in
the computation of the Fund's net asset value. If events materially
affecting the value of such securities occur during such period, then these
securities will be valued at their fair value as determined in good faith by
or under the supervision of the Board of Trustees.
B. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date. It is the policy of the Fund to declare daily dividends
from net investment income. Such dividends are paid monthly. Distributions
from net realized capital gains, if any, are recorded on ex-dividend date
and are paid annually. On December 31, 1997 undistributed net investment
income was reduced and undistributed net realized gains increased by $85,284
in order to comply with the requirements of the American Institute of
Certified Public Accountants Statement of Position 93-2. Net assets of the
fund were unaffected by the reclassification discussed above.
C. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions.
D. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
E. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
F. Expenses -- Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses which are attributable to more than one class are allocated among
the classes.
NOTE 2- ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.60% of
the first $200 million of the Fund's average daily net assets, plus 0.50% of the
Fund's average daily net assets in excess of $200 million to and including $500
million, plus 0.40% of the Fund's average daily net assets in excess of $500
million to and including $1 billion, plus 0.30% of the Fund's average daily net
assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended December 31, 1997, AIM
was reimbursed $77,375 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the year ended December 31, 1997, AFS
was paid $293,817 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("A I M Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted
distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares and Class C shares (the "Class A and C Plan"), and the
Fund's Class B shares (the "Class B Plan") (collectively, the "Plans"). The
Fund, pursuant to the Class A and C Plan, pays AIM Distributors compensation at
an annual rate of 0.25% of the average daily net assets of the Class A shares
and 1.00% of the average daily net
FS-26
<PAGE> 160
assets of the Class C shares. The Fund pursuant to the Class B Plan, pays AIM
Distributors compensation at an annual rate of 1.00% of the average daily net
assets attributable to the Class B shares. Of these amounts, the Fund may pay a
service fee of 0.25% of the average daily net assets of the Class A, Class B, or
Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee by the Class B or Class C shares under the Plans would constitute an
asset-based sales charge. The Plans also impose a cap on the total sales
charges, including asset-based sales charges, that may be paid by the respective
classes. AIM Distributors may, from time to time, assign, transfer, or pledge to
one or more designees, its rights to all or a designated portion of (a)
compensation received by AIM Distributors from the Fund pursuant to the Class B
Plan (but not AIM Distributors' duties and obligations pursuant to the Class B
Plan) and (b) any contingent deferred sales charges received by AIM Distributors
related to the Class B shares. During the year ended December 31, 1997 for the
Class A shares and Class B shares, and the period August 4, 1997 (date sales
commenced) through December 31, 1997 for the Class C shares, the Class A, Class
B and Class C shares paid AIM Distributors $411,911, $832,184 and $1,555,
respectively, as compensation under the Plans.
AIM Distributors received commissions of $57,864 from sales of the Class A
shares of the Fund during the year ended December 31, 1997. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1997,
AIM Distributors received $88,250 in contingent deferred sales charges imposed
on redemptions of Fund shares. Certain officers and trustees of the Trust are
officers and directors of AIM, AIM Distributors and AFS.
During the year ended December 31, 1997, the Fund paid legal fees of $4,839
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
AIM has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses related to pricing services used by the Fund which reduced the
Fund's expenses by $873 during the year ended December 31, 1997. Also during the
year ended December 31, 1997 the Fund received reductions in transfer agency
fees from AFS (an affiliate of AIM) and reductions in custodian fees of $2,795
and $589, respectively, under expense offset arrangements. The effect of the
above arrangements resulted in a reduction of the Fund's total expenses of
$4,257 during the year ended December 31, 1997.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 15, 1997, the Fund was
limited to borrowing up to the lesser of (i) $325,000,000 or (ii) the limits set
by its prospectus for borrowings. During the year ended December 31, 1997, the
Fund did not borrow under the line of credit agreement. The funds which are
parties to the line of credit are charged a commitment fee of 0.05% on the
unused balance of the committed line. The commitment fee is allocated among such
funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1997 was
$61,910,794 and $81,509,097, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of December 31, 1997 was as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $88,905,655
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (1,317,208)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $87,588,447
=========================================================
</TABLE>
Investments have the same cost for tax and financial statement purposes.
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold:
Class A 2,718,197 $46,163,286 2,473,508 $36,689,173
- ------------------------------------------------------------------------
Class B 765,587 13,195,278 1,424,455 21,097,067
- ------------------------------------------------------------------------
Class C* 62,085 1,135,211 -- --
- ------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A 237,293 4,070,874 353,355 5,316,653
- ------------------------------------------------------------------------
Class B 87,895 1,505,898 127,578 1,926,340
- ------------------------------------------------------------------------
Class C* 94 1,781 -- --
- ------------------------------------------------------------------------
Reacquired:
Class A (3,882,294) (65,670,974) (4,274,871) (63,364,827)
- ------------------------------------------------------------------------
Class B (924,101) (15,623,020) (1,425,633) (21,311,610)
- ------------------------------------------------------------------------
Class C* (689) (12,397) -- --
- ------------------------------------------------------------------------
(935,933) $(15,234,063) (1,321,608) $(19,647,204)
=========================================================================
</TABLE>
* Class C shares commenced sales on August 4, 1997.
FS-27
<PAGE> 161
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A outstanding
during each of the years in the five-year period ended December 31, 1997, for a
share of Class B outstanding during each of the years in the four-year period
ended December 31, 1997 and the period September 1, 1993 (date sales commenced)
through December 31, 1993 and for a share of Class C outstanding during the
period August 4, 1997 (date sales commenced) through December 31, 1997.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.01 $ 14.59 $ 11.85 $ 14.09 $ 13.31
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.47 0.55 0.55 0.59 0.60
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) 3.26 1.43 2.71 (2.20) 1.02
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Total from investment operations 3.73 1.98 3.26 (1.61) 1.62
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.47) (0.56) (0.52) (0.60) (0.61)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Distributions from net realized gains (0.01) -- -- -- (0.23)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Returns of capital -- -- -- (0.03) --
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Total distributions (0.48) (0.56) (0.52) (0.63) (0.84)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Net asset value, end of period $ 19.26 $ 16.01 $ 14.59 $ 11.85 $ 14.09
- ------------------------------------------------------------ ======== ======== ======== ======== ========
Total return(a) 23.70% 13.88% 28.07% (11.57)% 12.32%
- ------------------------------------------------------------ ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $179,456 $164,001 $170,624 $150,515 $200,016
- ------------------------------------------------------------ ======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.13%(b)(c) 1.17% 1.21% 1.18% 1.16%
- ------------------------------------------------------------ ======== ======== ======== ======== ========
Ratio of net investment income to average net assets 2.79%(b) 3.62% 4.20% 4.67% 4.21%
- ------------------------------------------------------------ ======== ======== ======== ======== ========
Portfolio turnover rate 26% 48% 88% 101% 76%
- ------------------------------------------------------------ ======== ======== ======== ======== ========
Average brokerage commission rate paid(d) $ 0.0465 $ 0.0460 N/A N/A N/A
- ------------------------------------------------------------ ======== ======== ======== ======== ========
</TABLE>
(a) Does not deduct sales charges.
(b) Ratios are based on average net assets of $164,764,424.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been 1.12%.
(d) The average brokerage commission rate paid is the total brokerage
commissions paid on applicable purchases and sales of securities for the
period divided by the total number of related shares purchased and sold,
which is required to be disclosed for fiscal years beginning September 1,
1995 and thereafter.
<TABLE>
<CAPTION>
CLASS B CLASS C
---------------------------------------------------- -------
1997 1996 1995 1994 1993 1997
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.01 $ 14.60 $ 11.84 $ 14.08 $ 15.30 $ 17.67
- ------------------------------------------------------- -------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.34 0.42 0.44 0.47 0.17 0.13
- ------------------------------------------------------- -------- ------- ------- ------- ------- -------
Net gains (losses) on securities (both realized and
unrealized) 3.25 1.44 2.73 (2.19) (0.98) 1.58
- ------------------------------------------------------- -------- ------- ------- ------- ------- -------
Total from investment operations 3.59 1.86 3.17 (1.72) (0.81) 1.71
- ------------------------------------------------------- -------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.35) (0.45) (0.41) (0.49) (0.17) (0.13)
- ------------------------------------------------------- -------- ------- ------- ------- ------- -------
Distributions from net realized gains (0.01) -- -- -- (0.24) (0.01)
- ------------------------------------------------------- -------- ------- ------- ------- ------- -------
Returns of capital -- -- -- (0.03) --
- ------------------------------------------------------- -------- ------- ------- ------- ------- -------
Total distributions (0.36) (0.45) (0.41) (0.52) (0.41) (0.14)
- ------------------------------------------------------- -------- ------- ------- ------- ------- -------
Net asset value, end of period $ 19.24 $ 16.01 $ 14.60 $ 11.84 $ 14.08 $ 19.24
- ------------------------------------------------------- ======== ======== ======== ======== ======== =======
Total return(a) 22.74% 12.98% 27.16% (12.35)% (5.32)% 9.74%
- ------------------------------------------------------- ======== ======== ======== ======== ======== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $94,227 $79,530 $70,693 $42,568 $23,892 $1,183
- ------------------------------------------------------- ======== ======== ======== ======== ======== =======
Ratio of expenses to average net assets 1.91%(b)(c) 1.96% 1.97% 2.07% 1.99%(d) 1.90%(b)(c)(d)
- ------------------------------------------------------- ======== ======== ======== ======== ======== =======
Ratio of net investment income to average net assets 2.01%(b) 2.83% 3.44% 3.78% 3.38%(d) 2.02%(b)(d)
- ------------------------------------------------------- ======== ======== ======== ======== ======== =======
Portfolio turnover rate 26% 48% 88% 101% 76% 26%
- ------------------------------------------------------- ======== ======== ======== ======== ======== =======
Average brokerage commission rate paid(e) $ 0.0465 $0.0460 N/A N/A N/A $0.0465
- ------------------------------------------------------- ======== ======== ======== ======== ======== =======
</TABLE>
(a) Does not deduct contingent deferred sales charges and are not annualized for
periods less than one year.
(b) Ratios are based on average net assets of $83,218,352 and $378,512,
respectively, for Class B and Class C.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have remained the same for
Class B and would have been 1.89% for Class C.
(d) Annualized.
(e) The average brokerage commission rate paid is the total brokerage
commissions paid on applicable purchases and sales of securities for the
period divided by the total number of related shares purchased and sold,
which is required to be disclosed for fiscal years beginning September 1,
1995 and thereafter.
FS-28
<PAGE> 162
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Growth Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Growth Fund (a portfolio of AIM Funds
Group), including the schedule of investments, as of
December 31, 1997, and the related statement of
operations for the year then ended, the statement of
changes in net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years or periods in the five-year period
then ended. These financial statements and financial
highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion
on these financial statements and 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
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 and financial highlights. Our procedures
included confirmation of securities owned as of December
31, 1997, by correspondence with the custodian and
brokers. 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 financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Growth
Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its
net assets for each of the years in the two-year period
then ended and the financial highlights for each of the
years or periods in the five-year period then ended, in
conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Houston, Texas
February 6, 1998
FS-29
<PAGE> 163
SCHEDULE OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-83.14%
AEROSPACE/DEFENSE-0.16%
BE Aerospace, Inc.(a) 15,000 $ 401,250
- --------------------------------------------------------------
Precision Castparts Corp. 10,000 603,125
- --------------------------------------------------------------
1,004,375
- --------------------------------------------------------------
AIR FREIGHT-0.13%
CNF Transportation Inc. 21,800 836,575
- --------------------------------------------------------------
AIRLINES-0.06%
Southwest Airlines Co. 15,450 380,456
- --------------------------------------------------------------
AUTO PARTS & EQUIPMENT-0.13%
Mark IV Industries, Inc. 37,590 822,281
- --------------------------------------------------------------
BANKS (MAJOR REGIONAL)-0.21%
BankBoston Corp. 14,100 1,324,518
- --------------------------------------------------------------
BANKS (MONEY CENTER)-1.56%
BankAmerica Corp. 30,000 2,190,000
- --------------------------------------------------------------
Chase Manhattan Corp. 55,200 6,044,400
- --------------------------------------------------------------
Citicorp 12,000 1,517,250
- --------------------------------------------------------------
9,751,650
- --------------------------------------------------------------
BANKS (REGIONAL)-0.21%
AmSouth Bancorporation 15,000 814,687
- --------------------------------------------------------------
TCF Financial Corp. 14,000 475,125
- --------------------------------------------------------------
1,289,812
- --------------------------------------------------------------
BIOTECHNOLOGY-0.03%
Curative Health Services, Inc.(a) 5,500 167,062
- --------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-1.17%
Clear Channel Communications,
Inc.(a) 76,700 6,092,856
- --------------------------------------------------------------
Jacor Communications, Inc.(a) 22,500 1,195,312
- --------------------------------------------------------------
7,288,168
- --------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.09%
Crompton & Knowles Corp. 22,000 583,000
- --------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-2.76%
ADC Telecommunications, Inc.(a) 119,700 4,997,475
- --------------------------------------------------------------
Brightpoint, Inc.(a) 21,600 299,700
- --------------------------------------------------------------
DSC Communications Corp.(a) 55,000 1,320,000
- --------------------------------------------------------------
Lucent Technologies, Inc. 40,200 3,210,975
- --------------------------------------------------------------
PairGain Technologies, Inc.(a) 113,700 2,202,937
- --------------------------------------------------------------
REMEC, Inc.(a) 5,000 112,500
- --------------------------------------------------------------
Scientific-Atlanta, Inc. 36,700 614,725
- --------------------------------------------------------------
Tellabs, Inc.(a) 83,800 4,430,925
- --------------------------------------------------------------
17,189,237
- --------------------------------------------------------------
COMPUTERS (HARDWARE)-2.85%
Citrix Systems, Inc.(a) 41,100 3,123,600
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (HARDWARE)-(CONTINUED)
Comdisco, Inc. 27,600 $ 922,875
- --------------------------------------------------------------
Compaq Computer Corp. 54,050 3,050,446
- --------------------------------------------------------------
Concord EFS, Inc.(a) 47,700 1,186,537
- --------------------------------------------------------------
Dell Computer Corp.(a) 69,000 5,796,000
- --------------------------------------------------------------
IDX Systems Corp.(a) 10,000 370,000
- --------------------------------------------------------------
International Business Machines
Corp. 32,000 3,346,000
- --------------------------------------------------------------
17,795,458
- --------------------------------------------------------------
COMPUTERS (NETWORKING)-0.25%
Bay Networks, Inc.(a) 60,000 1,533,750
- --------------------------------------------------------------
COMPUTERS (PERIPHERALS)-1.02%
Adaptec, Inc.(a) 41,900 1,555,537
- --------------------------------------------------------------
EMC Corp.(a) 100,000 2,743,750
- --------------------------------------------------------------
Iomega Corp.(a) 65,000 808,437
- --------------------------------------------------------------
SMART Modular Technologies, Inc.(a) 20,000 460,000
- --------------------------------------------------------------
Storage Technology Corp.(a) 13,000 805,187
- --------------------------------------------------------------
6,372,911
- --------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-7.43%
America Online, Inc.(a) 34,100 3,041,293
- --------------------------------------------------------------
Applied Voice Technology, Inc.(a) 5,000 141,250
- --------------------------------------------------------------
Autodesk, Inc. 10,500 388,500
- --------------------------------------------------------------
Avant! Corp.(a) 16,000 268,000
- --------------------------------------------------------------
BMC Software, Inc.(a) 54,000 3,543,750
- --------------------------------------------------------------
Broderbund Software, Inc.(a) 95,000 2,434,375
- --------------------------------------------------------------
Cadence Design Systems, Inc.(a) 100,000 2,450,000
- --------------------------------------------------------------
Computer Associates International,
Inc. 69,000 3,648,375
- --------------------------------------------------------------
Compuware Corp.(a) 104,000 3,328,000
- --------------------------------------------------------------
Electronic Arts, Inc.(a) 96,700 3,656,468
- --------------------------------------------------------------
Electronics for Imaging, Inc.(a) 6,400 106,400
- --------------------------------------------------------------
HBO & Co. 113,200 5,433,600
- --------------------------------------------------------------
Microsoft Corp.(a) 69,900 9,034,575
- --------------------------------------------------------------
Network Associates, Inc.(a) 3,800 200,925
- --------------------------------------------------------------
Parametric Technology Co.(a) 36,300 1,719,712
- --------------------------------------------------------------
Security Dynamics Technologies,
Inc.(a) 21,400 765,050
- --------------------------------------------------------------
Sterling Commerce, Inc.(a) 100,000 3,843,750
- --------------------------------------------------------------
Sybase, Inc.(a) 11,300 150,431
- --------------------------------------------------------------
Symantec Corp.(a) 23,000 504,562
- --------------------------------------------------------------
Synopsys, Inc.(a) 33,800 1,208,350
- --------------------------------------------------------------
Wind River Systems(a) 11,900 472,281
- --------------------------------------------------------------
46,339,647
- --------------------------------------------------------------
CONSUMER FINANCE-2.33%
Aames Financial Corp. 18,150 234,816
- --------------------------------------------------------------
Capital One Financial Corp. 18,000 975,375
- --------------------------------------------------------------
FIRSTPLUS Financial Group, Inc.(a) 38,000 1,458,250
- --------------------------------------------------------------
</TABLE>
FS-30
<PAGE> 164
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
CONSUMER FINANCE-(CONTINUED)
Green Tree Financial Corp. 53,000 $ 1,387,938
- --------------------------------------------------------------
Household International, Inc. 26,100 3,329,381
- --------------------------------------------------------------
IMC Mortgage Co.(a) 41,000 486,875
- --------------------------------------------------------------
MBNA Corp. 89,250 2,437,641
- --------------------------------------------------------------
Money Store, Inc. (The) 34,200 718,200
- --------------------------------------------------------------
Providian Financial Corp. 11,400 515,138
- --------------------------------------------------------------
SLM Holding Corp. 21,500 2,991,188
- --------------------------------------------------------------
14,534,802
- --------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-1.01%
AmeriSource Health Corp.-Class A(a) 28,000 1,631,000
- --------------------------------------------------------------
Cardinal Health, Inc. 31,050 2,332,631
- --------------------------------------------------------------
McKesson Corp. 10,000 1,081,875
- --------------------------------------------------------------
Sysco Corp. 28,000 1,275,750
- --------------------------------------------------------------
6,321,256
- --------------------------------------------------------------
ELECTRICAL EQUIPMENT-2.38%
AVX Corp. 21,700 400,093
- --------------------------------------------------------------
American Power Conversion Corp.(a) 50,000 1,181,250
- --------------------------------------------------------------
Avid Technology, Inc.(a) 10,000 267,500
- --------------------------------------------------------------
Berg Electronics Corp.(a) 22,400 509,600
- --------------------------------------------------------------
Black Box Corp.(a) 10,700 378,512
- --------------------------------------------------------------
General Electric Co. 61,200 4,490,550
- --------------------------------------------------------------
SCI Systems, Inc.(a) 55,500 2,417,718
- --------------------------------------------------------------
Sanmina Corp.(a) 43,600 2,953,900
- --------------------------------------------------------------
Sawtek Inc.(a) 8,000 211,000
- --------------------------------------------------------------
Solectron Corp.(a) 49,000 2,036,562
- --------------------------------------------------------------
14,846,685
- --------------------------------------------------------------
ELECTRONICS (COMPONENT DISTRIBUTORS)-0.35%
Arrow Electronics, Inc.(a) 26,600 862,837
- --------------------------------------------------------------
Avnet, Inc. 15,700 1,036,200
- --------------------------------------------------------------
Kent Electronics(a) 10,400 261,300
- --------------------------------------------------------------
2,160,337
- --------------------------------------------------------------
ELECTRONICS (INSTRUMENTATION)-0.61%
Methode Electronics, Inc.-Class A 22,400 364,000
- --------------------------------------------------------------
Perkin-Elmer Corp. 18,800 1,335,975
- --------------------------------------------------------------
Tektronix, Inc. 14,250 565,546
- --------------------------------------------------------------
Waters Corp.(a) 41,000 1,542,625
- --------------------------------------------------------------
3,808,146
- --------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-3.81%
Altera Corp.(a) 140,400 4,650,750
- --------------------------------------------------------------
ANADIGICS, Inc.(a) 15,000 451,875
- --------------------------------------------------------------
Analog Devices, Inc.(a) 40,000 1,107,500
- --------------------------------------------------------------
Atmel Corp.(a) 46,800 868,725
- --------------------------------------------------------------
Burr-Brown Corp.(a) 15,300 491,512
- --------------------------------------------------------------
Dallas Semiconductor Corp. 16,200 660,150
- --------------------------------------------------------------
Intel Corp. 36,000 2,529,000
- --------------------------------------------------------------
Linear Technology Corp. 44,400 2,558,550
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRONICS (SEMICONDUCTORS)-(CONTINUED)
Maxim Integrated Products, Inc.(a) 70,000 $ 2,415,000
- --------------------------------------------------------------
Microchip Technology, Inc.(a) 52,000 1,560,000
- --------------------------------------------------------------
National Semiconductor Corp.(a) 60,000 1,556,250
- --------------------------------------------------------------
PMC-Sierra, Inc.(a) 105,800 3,279,800
- --------------------------------------------------------------
Unitrode Corp.(a) 8,000 172,000
- --------------------------------------------------------------
Vitesse Semiconductor Corp.(a) 8,400 317,100
- --------------------------------------------------------------
Xilinx, Inc.(a) 32,200 1,129,013
- --------------------------------------------------------------
23,747,225
- --------------------------------------------------------------
EQUIPMENT (SEMICONDUCTOR)-1.18%
Applied Materials, Inc.(a) 90,000 2,711,250
- --------------------------------------------------------------
BMC Industries, Inc. 5,300 85,463
- --------------------------------------------------------------
KLA-Tencor Corp.(a) 42,000 1,622,250
- --------------------------------------------------------------
Lam Research Corp.(a) 30,000 877,500
- --------------------------------------------------------------
Novellus Systems, Inc.(a) 25,200 814,275
- --------------------------------------------------------------
Teradyne, Inc.(a) 38,000 1,216,000
- --------------------------------------------------------------
7,326,738
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-2.75%
American Express Co. 40,100 3,578,925
- --------------------------------------------------------------
Fannie Mae 40,000 2,282,500
- --------------------------------------------------------------
Freddie Mac 82,700 3,468,231
- --------------------------------------------------------------
MBIA, Inc. 12,000 801,750
- --------------------------------------------------------------
MGIC Investment Corp. 78,400 5,213,600
- --------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 30,500 1,803,313
- --------------------------------------------------------------
17,148,319
- --------------------------------------------------------------
FOODS-0.18%
Sara Lee Corp. 20,000 1,126,250
- --------------------------------------------------------------
FOOTWEAR-0.08%
Wolverine World Wide, Inc. 21,275 481,347
- --------------------------------------------------------------
GAMING, LOTTERY & PARI-MUTUEL COMPANIES-0.14%
International Game Technology 13,500 340,875
- --------------------------------------------------------------
MGM Grand, Inc.(a) 14,600 526,513
- --------------------------------------------------------------
867,388
- --------------------------------------------------------------
HEALTHCARE (DIVERSIFIED)-1.44%
Abbott Laboratories 27,200 1,783,300
- --------------------------------------------------------------
Bristol-Myers Squibb Co. 31,700 2,999,613
- --------------------------------------------------------------
Johnson & Johnson 24,000 1,581,000
- --------------------------------------------------------------
Warner-Lambert Co. 20,900 2,591,600
- --------------------------------------------------------------
8,955,513
- --------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC & OTHER)-1.52%
Alpharma, Inc. 10,200 221,850
- --------------------------------------------------------------
Dura Pharmaceuticals, Inc.(a) 17,900 821,163
- --------------------------------------------------------------
Forest Laboratories, Inc.(a) 25,100 1,237,744
- --------------------------------------------------------------
ICN Pharmaceuticals, Inc. 51,700 2,523,606
- --------------------------------------------------------------
Jones Medical Industries, Inc. 21,000 803,250
- --------------------------------------------------------------
Mylan Laboratories, Inc. 21,000 439,688
- --------------------------------------------------------------
</TABLE>
FS-31
<PAGE> 165
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (DRUGS-GENERIC & OTHER)-(CONTINUED)
Watson Pharmaceuticals, Inc.(a) 105,000 $ 3,405,938
- --------------------------------------------------------------
9,453,239
- --------------------------------------------------------------
HEATH CARE (DRUGS-MAJOR PHARMACEUTICALS)-2.10%
Lilly (Eli) & Co. 48,300 3,362,888
- --------------------------------------------------------------
Merck & Co., Inc. 35,000 3,718,750
- --------------------------------------------------------------
Pfizer Inc. 80,400 5,994,825
- --------------------------------------------------------------
13,076,463
- --------------------------------------------------------------
HEALTH CARE (LONG-TERM CARE)-1.35%
Beverly Enterprises, Inc.(a) 47,000 611,000
- --------------------------------------------------------------
Health Care and Retirement Corp.(a) 72,450 2,916,113
- --------------------------------------------------------------
HEALTHSOUTH Corp.(a) 176,700 4,903,425
- --------------------------------------------------------------
8,430,538
- --------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-0.96%
Concentra Managed Care, Inc.(a) 34,700 1,171,125
- --------------------------------------------------------------
Express Scripts, Inc.-Class A(a) 17,300 1,038,000
- --------------------------------------------------------------
HealthCare COMPARE Corp.(a) 55,900 2,857,888
- --------------------------------------------------------------
PhyCor, Inc.(a) 33,600 907,200
- --------------------------------------------------------------
5,974,213
- --------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-2.27%
Arterial Vascular Engineering,
Inc.(a) 7,900 513,500
- --------------------------------------------------------------
Becton, Dickinson & Co. 47,000 2,350,000
- --------------------------------------------------------------
Biomet, Inc. 20,600 527,875
- --------------------------------------------------------------
DENTSPLY International, Inc. 17,800 542,900
- --------------------------------------------------------------
DePuy, Inc. 9,600 276,000
- --------------------------------------------------------------
Guidant Corp. 35,800 2,228,550
- --------------------------------------------------------------
Henry Schein, Inc.(a) 7,717 270,095
- --------------------------------------------------------------
Medtronic, Inc. 18,900 988,706
- --------------------------------------------------------------
Physician Sales & Service, Inc.(a) 15,900 341,850
- --------------------------------------------------------------
Quintiles Transnational Corp.(a) 20,400 780,300
- --------------------------------------------------------------
Sofamor Danek Group, Inc.(a) 5,000 325,313
- --------------------------------------------------------------
Stryker Corp. 40,400 1,504,900
- --------------------------------------------------------------
Sybron International Corp.(a) 74,500 3,496,844
- --------------------------------------------------------------
14,146,833
- --------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.67%
Covance, Inc.(a) 42,650 847,669
- --------------------------------------------------------------
FPA Medical Management, Inc.(a) 31,900 594,138
- --------------------------------------------------------------
Omnicare, Inc. 71,400 2,213,400
- --------------------------------------------------------------
Orthodontic Centers of America,
Inc.(a) 17,800 295,925
- --------------------------------------------------------------
PharMerica, Inc.(a) 21,390 221,918
- --------------------------------------------------------------
Transition Systems, Inc.(a) 400 8,850
- --------------------------------------------------------------
4,181,900
- --------------------------------------------------------------
HOMEBUILDING-0.15%
Clayton Homes, Inc. 40,000 720,000
- --------------------------------------------------------------
Oakwood Homes Corp. 5,600 185,850
- --------------------------------------------------------------
905,850
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HOUSEHOLD FURNITURE & SUPPLIES-0.26%
Furniture Brands International,
Inc.(a) 28,000 $ 574,000
- --------------------------------------------------------------
Maytag Corp. 28,200 1,052,213
- --------------------------------------------------------------
1,626,213
- --------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.38%
Dial Corp. (The) 45,000 936,563
- --------------------------------------------------------------
Procter & Gamble Co. 18,000 1,436,625
- --------------------------------------------------------------
2,373,188
- --------------------------------------------------------------
HOUSEWARES-0.05%
Central Garden and Pet Co.(a) 11,300 296,625
- --------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-1.88%
Conseco, Inc. 204,400 9,287,425
- --------------------------------------------------------------
Equitable Companies, Inc. 36,000 1,791,000
- --------------------------------------------------------------
Torchmark Corp. 15,300 643,556
- --------------------------------------------------------------
11,721,981
- --------------------------------------------------------------
INSURANCE (MULTI-LINE)-2.00%
Ace, Ltd. 18,000 1,737,000
- --------------------------------------------------------------
American International Group, Inc. 12,000 1,305,000
- --------------------------------------------------------------
Century Business Services, Inc.(a) 11,000 189,750
- --------------------------------------------------------------
Travelers Group, Inc. 171,050 9,215,319
- --------------------------------------------------------------
12,447,069
- --------------------------------------------------------------
INSURANCE (PROPERTY-CASUALTY)-1.28%
Allstate Corp. 31,600 2,871,650
- --------------------------------------------------------------
CapMAC Holdings, Inc. 20,500 712,375
- --------------------------------------------------------------
Everest Reinsurance Holdings, Inc. 56,100 2,314,125
- --------------------------------------------------------------
EXEL Ltd. 16,000 1,014,000
- --------------------------------------------------------------
Fremont General Corp. 18,000 985,500
- --------------------------------------------------------------
HCC Insurance Holdings, Inc. 5,300 112,625
- --------------------------------------------------------------
8,010,275
- --------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-0.46%
Merrill Lynch & Co., Inc. 39,000 2,844,563
- --------------------------------------------------------------
INVESTMENT MANAGEMENT-0.93%
Affiliated Managers Group, Inc.(a) 54,300 1,574,700
- --------------------------------------------------------------
Franklin Resources, Inc. 21,650 1,882,197
- --------------------------------------------------------------
T. Rowe Price Associates, Inc. 36,900 2,320,088
- --------------------------------------------------------------
5,776,985
- --------------------------------------------------------------
LEISURE TIME (PRODUCTS)-0.11%
Callaway Golf Co. 10,200 291,338
- --------------------------------------------------------------
North Face, Inc. (The)(a) 10,000 220,000
- --------------------------------------------------------------
Speedway Motorsports, Inc.(a) 8,100 200,981
- --------------------------------------------------------------
712,319
- --------------------------------------------------------------
LODGING (HOTELS)-0.53%
Choice Hotels International,
Inc.(a) 20,800 332,800
- --------------------------------------------------------------
Host Marriott Corp.(a) 10,000 196,250
- --------------------------------------------------------------
ITT Corp. 22,000 1,823,250
- --------------------------------------------------------------
</TABLE>
FS-32
<PAGE> 166
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
LODGING (HOTELS)-(CONTINUED)
Promus Hotel Corp.(a) 22,500 $ 945,000
- --------------------------------------------------------------
3,297,300
- --------------------------------------------------------------
MACHINERY (DIVERSIFIED)-0.37%
Dover Corp. 37,800 1,365,525
- --------------------------------------------------------------
Ingersoll-Rand Co. 22,500 911,250
- --------------------------------------------------------------
2,276,775
- --------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-0.23%
Crane Co. 7,000 303,625
- --------------------------------------------------------------
U.S. Industries, Inc. 36,900 1,111,613
- --------------------------------------------------------------
1,415,238
- --------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-0.81%
Cognex Corp.(a) 116,600 3,177,350
- --------------------------------------------------------------
Diebold, Inc. 36,400 1,842,750
- --------------------------------------------------------------
5,020,100
- --------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-0.04%
HON INDUSTRIES, Inc. 3,800 224,200
- --------------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-7.71%
Baker Hughes, Inc. 21,000 916,125
- --------------------------------------------------------------
BJ Services Co.(a) 33,400 2,402,713
- --------------------------------------------------------------
Camco International, Inc. 19,000 1,210,062
- --------------------------------------------------------------
Cooper Cameron Corp.(a) 50,000 3,050,000
- --------------------------------------------------------------
Diamond Offshore Drilling, Inc. 58,400 2,810,500
- --------------------------------------------------------------
ENSCO International, Inc. 28,400 951,400
- --------------------------------------------------------------
EVI, Inc.(a) 93,300 4,828,275
- --------------------------------------------------------------
Falcon Drilling Company, Inc.(a) 30,000 1,051,875
- --------------------------------------------------------------
Global Industries Ltd.(a) 191,000 3,247,000
- --------------------------------------------------------------
Input/Output, Inc.(a) 29,800 884,688
- --------------------------------------------------------------
Marine Drilling Companies, Inc.(a) 35,000 726,250
- --------------------------------------------------------------
Nabors Industries, Inc.(a) 180,000 5,658,750
- --------------------------------------------------------------
National-Oilwell, Inc.(a) 90,000 3,076,875
- --------------------------------------------------------------
Newpark Resources, Inc.(a) 18,000 315,000
- --------------------------------------------------------------
Noble Drilling Corp.(a) 100,000 3,062,500
- --------------------------------------------------------------
Pride International, Inc.(a) 32,900 830,725
- --------------------------------------------------------------
Rowan Companies, Inc.(a) 20,000 610,000
- --------------------------------------------------------------
Santa Fe International Corp. 74,000 3,010,875
- --------------------------------------------------------------
Schlumberger Ltd. 35,100 2,825,550
- --------------------------------------------------------------
Smith International, Inc.(a) 21,500 1,319,562
- --------------------------------------------------------------
Varco International, Inc.(a) 66,600 1,427,738
- --------------------------------------------------------------
Veritas DGC, Inc.(a) 12,600 497,700
- --------------------------------------------------------------
Western Atlas Inc.(a) 45,000 3,330,000
- --------------------------------------------------------------
48,044,163
- --------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.25%
Apache Corp. 15,000 525,938
- --------------------------------------------------------------
Burlington Resources, Inc. 17,500 784,218
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
OIL & GAS (EXPLORATION &
PRODUCTION)-(CONTINUED)
Pioneer Natural Resources Co. 8,000 $ 231,500
- --------------------------------------------------------------
1,541,656
- --------------------------------------------------------------
PERSONAL CARE-0.72%
Avon Products, Inc. 29,100 1,786,012
- --------------------------------------------------------------
Gillette Co. 20,500 2,058,969
- --------------------------------------------------------------
Perrigo Co.(a) 50,000 668,750
- --------------------------------------------------------------
4,513,731
- --------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-1.16%
AES Corp.(a) 154,600 7,208,225
- --------------------------------------------------------------
PUBLISHING (NEWSPAPERS)-0.12%
Gannett Co., Inc. 12,000 741,750
- --------------------------------------------------------------
RESTAURANTS-0.23%
Cracker Barrel Old Country Store,
Inc. 25,000 834,375
- --------------------------------------------------------------
Starbucks Corp.(a) 15,600 598,650
- --------------------------------------------------------------
1,433,025
- --------------------------------------------------------------
RETAIL (BUILDING SUPPLIES)-0.26%
Fastenal Co. 7,300 279,225
- --------------------------------------------------------------
Home Depot, Inc. 22,600 1,330,575
- --------------------------------------------------------------
1,609,800
- --------------------------------------------------------------
RETAIL (COMPUTERS & ELECTRONICS)-1.56%
CHS Electronics, Inc.(a) 75,000 1,284,375
- --------------------------------------------------------------
CompUSA, Inc.(a) 104,300 3,233,300
- --------------------------------------------------------------
Ingram Micro, Inc.-Class A(a) 71,900 2,094,088
- --------------------------------------------------------------
Tech Data Corp.(a) 80,300 3,121,662
- --------------------------------------------------------------
9,733,425
- --------------------------------------------------------------
RETAIL (DEPARTMENT STORES)-0.56%
Federated Department Stores,
Inc.(a) 22,000 947,375
- --------------------------------------------------------------
Kohl's Corp.(a) 10,900 742,563
- --------------------------------------------------------------
Nordstrom, Inc. 15,200 917,700
- --------------------------------------------------------------
Proffitt's, Inc.(a) 30,000 853,125
- --------------------------------------------------------------
3,460,763
- --------------------------------------------------------------
RETAIL (DISCOUNTERS)-1.09%
Consolidated Stores Corp.(a) 86,593 3,804,680
- --------------------------------------------------------------
Dollar General Corp. 18,085 655,581
- --------------------------------------------------------------
Dollar Tree Stores, Inc.(a) 22,950 949,556
- --------------------------------------------------------------
Ross Stores, Inc. 37,700 1,371,338
- --------------------------------------------------------------
6,781,155
- --------------------------------------------------------------
RETAIL (DRUG STORES)-1.39%
CVS Corp. 96,249 6,165,951
- --------------------------------------------------------------
Rite Aid Corp. 42,600 2,500,088
- --------------------------------------------------------------
8,666,039
- --------------------------------------------------------------
RETAIL (FOOD CHAINS)-1.65%
Kroger Co.(a) 114,900 4,244,119
- --------------------------------------------------------------
Quality Food Centers, Inc.(a) 21,600 1,447,200
- --------------------------------------------------------------
</TABLE>
FS-33
<PAGE> 167
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (FOOD CHAINS)-(CONTINUED)
Safeway, Inc.(a) 73,000 $ 4,617,250
- --------------------------------------------------------------
10,308,569
- --------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-1.33%
Costco Companies, Inc.(a) 76,000 3,391,500
- --------------------------------------------------------------
Dayton Hudson Corp. 48,700 3,287,250
- --------------------------------------------------------------
Fred Meyer, Inc.(a) 43,800 1,593,225
- --------------------------------------------------------------
8,271,975
- --------------------------------------------------------------
RETAIL (HOME SHOPPING)-0.29%
CDW Computer Centers, Inc.(a) 23,050 1,201,481
- --------------------------------------------------------------
Micro Warehouse, Inc.(a) 42,500 592,344
- --------------------------------------------------------------
1,793,825
- --------------------------------------------------------------
RETAIL (SPECIALTY)-2.01%
Bed Bath & Beyond, Inc.(a) 45,900 1,767,150
- --------------------------------------------------------------
Hollywood Entertainment Corp.(a) 31,100 330,438
- --------------------------------------------------------------
Michaels Stores, Inc.(a) 25,000 731,250
- --------------------------------------------------------------
Office Depot, Inc.(a) 114,600 2,743,238
- --------------------------------------------------------------
Payless ShoeSource, Inc.(a) 10,400 698,100
- --------------------------------------------------------------
Petco Animal Supplies, Inc.(a) 20,400 489,600
- --------------------------------------------------------------
Tiffany & Co. 22,700 818,618
- --------------------------------------------------------------
Viking Office Products, Inc.(a) 64,800 1,413,450
- --------------------------------------------------------------
Williams-Sonoma, Inc.(a) 85,000 3,559,375
- --------------------------------------------------------------
12,551,219
- --------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-0.50%
Gap, Inc. 24,000 850,500
- --------------------------------------------------------------
TJX Companies, Inc. 65,400 2,248,125
- --------------------------------------------------------------
3,098,625
- --------------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.70%
Ahmanson (H.F.) & Co. 39,600 2,650,725
- --------------------------------------------------------------
Dime Bancorp, Inc. 15,000 453,750
- --------------------------------------------------------------
Washington Mutual, Inc. 19,500 1,244,344
- --------------------------------------------------------------
4,348,819
- --------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-0.14%
Omnicom Group, Inc. 20,000 847,500
- --------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-2.11%
Cendant Corp.(a) 120,395 4,138,589
- --------------------------------------------------------------
Cerner Corp.(a) 41,000 866,125
- --------------------------------------------------------------
Equity Corp. International(a) 11,200 259,000
- --------------------------------------------------------------
Service Corp. International 164,500 6,076,219
- --------------------------------------------------------------
Stewart Enterprises, Inc.-Class A 28,650 1,335,806
- --------------------------------------------------------------
Trammell Crow Co.(a) 20,000 515,000
- --------------------------------------------------------------
13,190,739
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SERVICES (COMPUTER SYSTEMS)-0.44%
Cambridge Technology Partners,
Inc.(a) 10,100 $ 420,413
- --------------------------------------------------------------
Gartner Group, Inc.(a) 23,000 856,750
- --------------------------------------------------------------
Shared Medical Systems Corp. 10,900 719,400
- --------------------------------------------------------------
SunGard Data Systems Inc.(a) 23,600 731,600
- --------------------------------------------------------------
2,728,163
- --------------------------------------------------------------
SERVICES (DATA PROCESSING)-2.12%
Affiliated Computer Services,
Inc.(a) 22,600 594,662
- --------------------------------------------------------------
BISYS Group, Inc.(a) 11,200 372,400
- --------------------------------------------------------------
CSG Systems International, Inc.(a) 90,000 3,600,000
- --------------------------------------------------------------
DST Systems, Inc.(a) 22,100 943,394
- --------------------------------------------------------------
Equifax, Inc. 72,400 2,565,675
- --------------------------------------------------------------
Fiserv, Inc.(a) 37,900 1,861,838
- --------------------------------------------------------------
National Data Corp. 32,000 1,156,000
- --------------------------------------------------------------
PMT Services, Inc.(a) 25,500 353,812
- --------------------------------------------------------------
Paychex, Inc. 34,600 1,751,625
- --------------------------------------------------------------
13,199,406
- --------------------------------------------------------------
SERVICES (EMPLOYMENT)-0.20%
AccuStaff, Inc.(a) 53,700 1,235,100
- --------------------------------------------------------------
SERVICES (FACILITIES & ENVIRONMENTAL)-0.13%
Corrections Corp. of America(a) 22,500 833,906
- --------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-2.45%
AT&T Corp. 30,000 1,837,500
- --------------------------------------------------------------
Billing Information Concepts
Corp.(a) 18,600 892,800
- --------------------------------------------------------------
CIENA Corp.(a) 41,100 2,512,238
- --------------------------------------------------------------
LCI International, Inc.(a) 40,000 1,230,000
- --------------------------------------------------------------
MCI Communications Corp. 62,800 2,688,625
- --------------------------------------------------------------
WorldCom, Inc.(a) 203,200 6,146,800
- --------------------------------------------------------------
15,307,963
- --------------------------------------------------------------
TEXTILES (APPAREL)-0.48%
Jones Apparel Group, Inc.(a) 26,200 1,126,600
- --------------------------------------------------------------
Liz Claiborne, Inc. 29,300 1,225,106
- --------------------------------------------------------------
Nautica Enterprises, Inc.(a) 28,800 669,600
- --------------------------------------------------------------
3,021,306
- --------------------------------------------------------------
TEXTILES (SPECIALTY)-0.17%
Unifi, Inc. 25,800 1,049,738
- --------------------------------------------------------------
TRUCKS & PARTS-0.02%
Wabash National Corp. 5,000 142,188
- --------------------------------------------------------------
WASTE MANAGEMENT-0.73%
American Disposal Services, Inc.(a) 10,000 365,000
- --------------------------------------------------------------
Thermo Instrument Systems, Inc.(a) 26,125 899,680
- --------------------------------------------------------------
</TABLE>
FS-34
<PAGE> 168
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
WASTE MANAGEMENT-(CONTINUED)
USA Waste Services, Inc.(a) 82,992 $ 3,257,436
- --------------------------------------------------------------
4,522,116
- --------------------------------------------------------------
Total Domestic Common Stocks 518,399,662
- --------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS-3.26%
BERMUDA-1.21%
Tyco International Ltd.
(Manufacturing-Diversified) 167,700 7,556,981
- --------------------------------------------------------------
CANADA-0.65%
Newcourt Credit Group, Inc.
(Financial-Diversified) 5,500 183,562
- --------------------------------------------------------------
Northern Telecom Ltd.-ADR
(Communications Equipment) 19,100 1,699,900
- --------------------------------------------------------------
Philip Services Corp. (Waste
Management)(a) 100,000 1,437,500
- --------------------------------------------------------------
Precision Drilling Corp. (Oil &
Gas-Drilling & Equipment)(a) 31,000 755,625
- --------------------------------------------------------------
4,076,587
- --------------------------------------------------------------
FINLAND-0.21%
Nokia Oyj A.B.-Class A-ADR
(Communications Equipment) 18,350 1,284,500
- --------------------------------------------------------------
IRELAND-0.02%
CBT Group PLC-ADR
(Computers-Software &
Services)(a) 1,800 147,825
- --------------------------------------------------------------
ISRAEL-0.15%
Tecnomatix Technologies Ltd.
(Computers-Software &
Services)(a) 10,000 337,500
- --------------------------------------------------------------
Teva Pharmaceutical Industries
Ltd.-ADR (Health
Care-Drugs-Generic & Other) 13,000 615,063
- --------------------------------------------------------------
952,563
- --------------------------------------------------------------
SWEDEN-0.44%
Telefonaktiebolaget LM Ericsson-ADR
(Communications Equipment) 72,700 2,712,619
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TAIWAN-0.03%
Taiwan Semiconductor Manufacturing
Co. Ltd.-ADR
(Electronics-Semiconductors)(a) 10,000 $ 181,875
- --------------------------------------------------------------
UNITED KINGDOM-0.55%
SmithKline Beecham PLC-ADR (Health
Care-Drugs-Major Pharmaceuticals) 67,000 3,446,312
- --------------------------------------------------------------
Total Foreign Stocks & Other
Equity Interests 20,359,262
- --------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK-0.15%
LODGING (HOTELS)-0.15%
Host Marriott Corp., $3.375 Conv.
Pfd. 14,950 918,498
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
DOMESTIC CONVERTIBLE CORPORATE NOTES-0.11%
COMPUTERS (PERIPHERALS)-0.11%
EMC Corp., 3.25%, Conv. Sub. Notes $ 500,000 674,875
- --------------------------------------------------------------
U.S. TREASURY SECURITIES-7.16%
U.S. TREASURY BILLS(b)-7.16%
4.566%, 01/02/98(c) 44,700,000 44,693,909
- --------------------------------------------------------------
Total Investments, excluding
repurchase agreement 585,046,206
- --------------------------------------------------------------
REPURCHASE AGREEMENT(d)-10.64%
Dean Witter Reynolds, Inc., 6.75%,
01/02/98(e) 66,326,931 66,326,931
- --------------------------------------------------------------
TOTAL INVESTMENTS-104.46% 651,373,137
- --------------------------------------------------------------
LIABILITIES LESS OTHER
ASSETS-(4.46%) (27,830,220)
- --------------------------------------------------------------
NET ASSETS-100.00% $623,542,917
==============================================================
</TABLE>
(a) Non-income producing security.
(b) U.S. Treasury bills are traded on a discount basis. In such cases the
interest rate shown represents the rate of discount paid or received at the
time of purchase by the Fund.
(c) A portion of the principal balance was pledged as collateral to cover
margin requirements for open futures contracts. See Note 8.
(d) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(e) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$200,075,000. Collateralized by $204,420,000 U.S. Government obligations,
0% to 8.80% due 01/09/98 to 11/15/29 with an aggregate market value at
12/31/97 of $204,000,245.
Investment Abbreviations:
ADR-American Depositary Receipt
Conv.-Convertible
Pfd.-Preferred
Sub.-Subordinated
See Notes to Financial Statements.
FS-35
<PAGE> 169
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase
agreement, at market value (cost
$466,409,789) $585,046,206
- ---------------------------------------------------------
Repurchase agreement 66,326,931
- ---------------------------------------------------------
Receivables for:
Investments sold 429,715
- ---------------------------------------------------------
Fund shares sold 722,005
- ---------------------------------------------------------
Dividends and interest 254,824
- ---------------------------------------------------------
Investment for deferred compensation plan 63,989
- ---------------------------------------------------------
Other assets 19,859
- ---------------------------------------------------------
Total assets 652,863,529
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 25,404,932
- ---------------------------------------------------------
Fund shares reacquired 2,649,663
- ---------------------------------------------------------
Variation margin 9,650
- ---------------------------------------------------------
Deferred compensation plan 63,989
- ---------------------------------------------------------
Accrued advisory fees 347,621
- ---------------------------------------------------------
Accrued administrative service fees 5,749
- ---------------------------------------------------------
Accrued distribution fees 596,362
- ---------------------------------------------------------
Accrued trustees' fees 2,890
- ---------------------------------------------------------
Accrued transfer agent fees 127,426
- ---------------------------------------------------------
Accrued operating expenses 112,330
- ---------------------------------------------------------
Total liabilities 29,320,612
- ---------------------------------------------------------
Net assets applicable to shares outstanding $623,542,917
=========================================================
NET ASSETS:
Class A $266,167,858
=========================================================
Class B $356,185,858
=========================================================
Class C $ 1,189,201
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 16,990,731
=========================================================
Class B 23,779,883
=========================================================
Class C 79,397
=========================================================
Class A:
Net asset value and redemption price per
share $ 15.67
=========================================================
Offering price per share:
(Net asset value of $15.67 divided by
94.50%) $ 16.58
=========================================================
Class B:
Net asset value and offering price per
share $ 14.98
=========================================================
Class C:
Net asset value and offering price per
share $ 14.98
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $31,497 foreign
withholding tax) $ 2,818,914
- ---------------------------------------------------------
Interest 4,030,884
- ---------------------------------------------------------
Total investment income 6,849,798
- ---------------------------------------------------------
EXPENSES:
Advisory fees 3,901,342
- ---------------------------------------------------------
Administrative service fees 74,201
- ---------------------------------------------------------
Custodian fees 145,850
- ---------------------------------------------------------
Transfer agent fees-Class A 369,991
- ---------------------------------------------------------
Transfer agent fees-Class B 731,596
- ---------------------------------------------------------
Transfer agent fees-Class C 750
- ---------------------------------------------------------
Trustees' fees 11,880
- ---------------------------------------------------------
Distribution fees-Class A 633,698
- ---------------------------------------------------------
Distribution fees-Class B 3,284,783
- ---------------------------------------------------------
Distribution fees-Class C 2,571
- ---------------------------------------------------------
Other 274,011
- ---------------------------------------------------------
Total expenses 9,430,673
- ---------------------------------------------------------
Less: Expenses paid indirectly (17,975)
- ---------------------------------------------------------
Net expenses 9,412,698
- ---------------------------------------------------------
Net investment income (loss) (2,562,900)
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES, FOREIGN CURRENCIES
AND FUTURES CONTRACTS:
Net realized gain (loss) from:
Investment securities 59,302,302
- ---------------------------------------------------------
Foreign currencies (53,295)
- ---------------------------------------------------------
Futures contracts 9,324,974
- ---------------------------------------------------------
68,573,981
- ---------------------------------------------------------
Net unrealized appreciation (depreciation)
of:
Investment securities 30,912,100
- ---------------------------------------------------------
Foreign currencies 21
- ---------------------------------------------------------
Futures contracts (1,308,102)
- ---------------------------------------------------------
29,604,019
- ---------------------------------------------------------
Net gain from investment securities,
foreign currencies and futures
contracts 98,178,000
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $95,615,100
=========================================================
</TABLE>
See Notes to Financial Statements.
FS-36
<PAGE> 170
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (2,562,900) $ 124,753
- -------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies and futures contracts 68,573,981 25,815,431
- -------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities,
foreign currencies and futures contracts 29,604,019 41,005,363
- -------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 95,615,100 66,945,547
- -------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (115,803) --
- -------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (28,869,623) (9,939,277)
- -------------------------------------------------------------------------------------------
Class B (40,478,955) (12,535,665)
- -------------------------------------------------------------------------------------------
Class C (105,058) --
- -------------------------------------------------------------------------------------------
Share transactions-net:
Class A 23,238,247 35,293,722
- -------------------------------------------------------------------------------------------
Class B 64,250,779 122,675,148
- -------------------------------------------------------------------------------------------
Class C 1,318,691 --
- -------------------------------------------------------------------------------------------
Net increase in net assets 114,853,378 202,439,475
- -------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 508,689,539 306,250,064
- -------------------------------------------------------------------------------------------
End of period $623,542,917 $508,689,539
===========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $499,110,813 $412,932,159
- -------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (34,200) 66,315
- -------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign currencies and futures contracts 6,119,260 6,948,040
- -------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and futures contracts 118,347,044 88,743,025
- -------------------------------------------------------------------------------------------
$623,542,917 $508,689,539
===========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Growth Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of nine separate series portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers three different classes of shares: the Class A shares, the
Class B shares and the Class C shares. The new Class C shares commenced sales on
August 4, 1997. Class A shares are sold with a front-end sales charge. Class B
shares and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class are voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to achieve long-term growth of capital by investing primarily in the common
stocks of established medium- to large-size companies with prospects for
above-average, long-term earnings growth. Realization of current income is an
incidental consideration.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular day,
the security is valued at the mean between the closing bid and asked prices
on that day. Each security traded in the over-the-counter market (but not
including securities reported on the NASDAQ National Market System) is valued
at the mean between the last bid and asked prices based upon quotes furnished
by market makers for such
FS-37
<PAGE> 171
securities. If a mean is not available, as is the case in some foreign
markets, the closing bid will be used absent a last sales price. Each
security reported on the NASDAQ National Market System is valued at the last
sales price on the valuation date or, absent a last sales price, at the mean
of the closing bid and asked prices. Debt obligations (including convertible
bonds) are valued on the basis of prices provided by an independent pricing
service. Prices provided by the pricing service may be determined without
exclusive reliance on quoted prices and may reflect appropriate factors such
as yield, type of issue, coupon rate and maturity date. Securities for which
market prices are not provided by any of the above methods are valued at the
mean between last bid and asked prices based upon quotes furnished by
independent sources. Securities for which market quotations either are not
readily available or are questionable are valued at fair value as determined
in good faith by or under the supervision of the Trust's officers in a manner
specifically authorized by the Board of Trustees. Short-term obligations
having 60 days or less to maturity are valued at amortized cost which
approximates market value. Generally, trading in foreign securities is
substantially completed each day at various times prior to the close of the
New York Stock Exchange. The values of such securities used in computing the
net asset value of the Fund's shares are determined as of such times. Foreign
currency exchange rates are also generally determined prior to the close of
the New York Stock Exchange. Occasionally, events affecting the values of
such securities and such exchange rates may occur between the times at which
they are determined and the close of the New York Stock Exchange which will
not be reflected in the computation of the Fund's net asset value. If events
materially affecting the value of such securities occur during such period,
then these securities will be valued at their fair value as determined in
good faith by or under the supervision of the Board of Trustees.
B. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollar
amounts at date of valuation. Purchases and sales of portfolio securities and
income items denominated in foreign currencies are translated into U.S.
dollar amounts on the respective dates of such transactions.
C. Foreign Currency Contracts -- A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract for the purchase or
sales of a security denominated in a foreign currency in order to "lock in"
the U.S. dollar price of that security. The Fund could be exposed to risk if
counterparties to the contracts are unable to meet the terms of their
contracts.
D. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. On December 31, 1997,
paid-in capital was decreased by $2,629,063, undistributed net investment
income was increased by $2,578,188 and undistributed net realized gains
increased by $50,875 in order to comply with the requirements of the American
Institute of Certified Public Accountants Statement of Position 93-2. Net
assets of the Fund were unaffected by the reclassifications discussed above.
E. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements.
F. Expenses -- Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses which are attributable to more than one class are allocated among
the classes.
G. Stock Index Futures Contracts -- The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities or cash as collateral for the
account of the broker (the Fund's agent in acquiring the futures position).
During the period the futures contracts are open, changes in the value of the
contracts are recognized as unrealized gains or losses by "marking to market"
on a daily basis to reflect the market value of the contracts at the end of
each day's trading. Variation margin payments are made or received depending
upon whether unrealized gains or losses are incurred. When the contracts are
closed, the Fund recognizes a realized gain or loss equal to the difference
between the proceeds from, or cost of, the closing transaction and the Fund's
basis in the contract. Risks include the possibility of an illiquid market
and the change in the value of the contracts may not correlate with changes
in the value of the Fund's portfolio being hedged.
NOTE 2- ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.80% of
the first $150 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $150 million.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended December 31, 1997, AIM
was reimbursed $74,201 for such services.
The Fund, pursuant to a transfer agency and shareholder service agreement, has
agreed to pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer
agency and shareholder services to the Fund. During the year ended December 31,
1997, AFS was paid $608,362 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted
distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares and Class C shares (the "Class A and C Plan") and the
Fund's Class B shares (the "Class B Plan") (collectively, the "Plans"). The
Fund, pursuant to the Class A and C Plan, pays AIM Distributors compensation at
an annual rate of 0.25% of the average daily net assets of the Class A shares
and 1.00% of the average daily net assets of the Class C shares. The Fund
pursuant to the Class B Plan,
FS-38
<PAGE> 172
pays AIM Distributors compensation at an annual rate of 1.00% of the average
daily net assets attributable to the Class B shares. Of these amounts, the Fund
may pay a service fee of 0.25% of the average daily net assets of the Class A,
Class B or Class C shares to selected dealers and financial institutions who
furnish continuing personal shareholder services to their customers who purchase
and own shares of the Fund. Any amounts not paid as a service fee by the Class B
or Class C shares under the Plans would constitute an asset-based sales charge.
The Plans also impose a cap on the total sales charges, including asset-based
sales charges that may be paid by the respective classes. AIM Distributors may,
from time to time, assign, transfer, or pledge to one or more designees, its
rights to all or a designated portion of (a) compensation received by AIM
Distributors from the Fund pursuant to the Class B Plan (but not AIM
Distributors' duties and obligations pursuant to the Class B Plan) and (b) any
contingent deferred sales charges received by AIM Distributors related to the
Class B shares. During the year ended December 31, 1997, for the Class A shares
and Class B shares and the period August 4, 1997 through December 31, 1997 for
the Class C shares, the Class A, Class B, and Class C shares paid AIM
Distributors $633,698, $3,284,783 and $2,571 respectively, as compensation under
the Plans.
AIM Distributors received commissions of $143,669 from sales of the Class A
shares of the Fund during the year ended December 31, 1997. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1997,
AIM Distributors received $109,547 in contingent deferred sales charges imposed
on redemptions of Fund shares. Certain officers and trustees of the Trust are
officers and directors of AIM, AIM Distributors and AFS.
During the year ended December 31, 1997, the Fund paid legal fees of $5,583
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
AIM has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses related to pricing services used by the Fund which reduced Fund
expenses by $2,139 during the year ended December 31, 1997. Also during the year
ended December 31, 1997, the Fund received reductions in transfer agency fees
from AFS (an affiliate of AIM) and reductions in custodian fees of $6,509 and
$9,327, respectively, under expense offset arrangements. The effect of the above
arrangements resulted in reductions of the Fund's total expenses of $17,975
during the year ended December 31, 1997.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 15, 1997, the Fund was
limited to borrowing up to the lesser of (i) $325,000,000 or (ii) the limits set
by its prospectus for borrowings. During the year ended December 31, 1997, the
Fund did not borrow under the line of credit agreement. The funds which are
parties to the line of credit are charged a commitment fee of 0.05% on the
unused balance of the committed line. The commitment fee is allocated among such
funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1997 was
$592,414,766 and $560,170,230, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of December 31, 1997 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $131,466,776
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (14,012,338)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $117,454,438
=========================================================
Cost of investments for tax purposes is
$467,591,768.
</TABLE>
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold:
Class A 14,466,946 $ 234,213,923 10,862,824 $ 152,766,558
- --------------------------------------------------------------------------------
Class B 7,100,475 113,053,525 12,013,218 167,088,540
- --------------------------------------------------------------------------------
Class C* 104,003 1,760,456 -- --
- --------------------------------------------------------------------------------
Issued as
reinvestment of
dividends:
Class A 1,802,991 27,333,257 657,046 9,474,936
- --------------------------------------------------------------------------------
Class B 2,600,309 37,704,454 845,350 11,809,495
- --------------------------------------------------------------------------------
Class C* 6,820 98,891 -- --
- --------------------------------------------------------------------------------
Reacquired:
Class A (14,695,429) (238,308,933) (8,993,672) (126,947,772)
- --------------------------------------------------------------------------------
Class B (5,524,470) (86,507,200) (4,060,745) (56,222,887)
- --------------------------------------------------------------------------------
Class C* (31,426) (540,656) -- --
- --------------------------------------------------------------------------------
5,830,219 $ 88,807,717 11,324,021 $ 157,968,870
================================================================================
</TABLE>
* Class C shares commenced sales on August 4, 1997.
NOTE 8-OPEN FUTURES CONTRACTS
On December 31, 1997, $2,156,000 principal amount of U.S. Treasury obligations
were pledged as collateral to cover margin requirements for open futures
contracts.
Open futures contracts at December 31, 1997 were as follows:
<TABLE>
<CAPTION>
UNREALIZED
NO. OF APPRECIATION
CONTRACT CONTRACTS MONTH COMMITMENT (DEPRECIATION)
<S> <C> <C> <C> <C>
193
S&P 500 Index contracts Mar. 98 Buy $(289,500)
=======================================================================
</TABLE>
FS-39
<PAGE> 173
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A outstanding
during each of the years in the five-year period ended December 31, 1997, for a
share of Class B outstanding during each of the years in the four-year period
ended December 31, 1997 and the period September 1, 1993 (date sales commenced)
through December 31, 1993, and for a share of Class C outstanding for the period
August 4, 1997 (date sales commenced) through December 31, 1997.
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.78 $ 13.05 $ 10.32 $ 11.32 $ 12.28
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.01(a) 0.07 0.02(a) -- --
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) 2.82 2.34 3.50 (0.57) 0.41
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Total from investment operations 2.83 2.41 3.52 (0.57) 0.41
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.01) -- -- -- --
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Distributions from net realized gains (1.93) (0.68) (0.79) (0.43) (1.37)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Total distributions (1.94) (0.68) (0.79) (0.43) (1.37)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Net asset value, end of period $ 15.67 $ 14.78 $ 13.05 $ 10.32 $ 11.32
============================================================ ======== ======== ======== ======== ========
Total return(b) 19.54% 18.61% 34.31% (4.99)% 3.64%
============================================================ ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $266,168 $227,882 $168,217 $123,271 $146,723
============================================================ ======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.13%(c)(d) 1.18% 1.28% 1.22% 1.17%
============================================================ ======== ======== ======== ======== ========
Ratio of net investment income to average net assets 0.04%(c) 0.46% 0.20% 0.02% 0.02%
============================================================ ======== ======== ======== ======== ========
Portfolio turnover rate 110% 97% 87% 201% 192%
============================================================ ======== ======== ======== ======== ========
Average broker commission rate paid(e) $ 0.0568 $ 0.0621 N/A N/A N/A
============================================================ ======== ======== ======== ======== ========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges.
(c) Ratios are based on average net assets of $253,479,200.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(e) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
<TABLE>
<CAPTION>
CLASS B CLASS C
------------------------------------------------------ -------
1997 1996 1995 1994 1993 1997
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.32 $ 12.77 $ 10.21 $ 11.31 $ 12.83 $ 17.65
- ----------------------------------------------------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (0.13)(a) (0.05) (0.08)(a) (0.06) (0.01) (0.04)(a)
- ----------------------------------------------------- ------- ------- ------- ------- ------- -------
Net gains (losses) on securities (both realized and
unrealized) 2.72 2.28 3.43 (0.61) (0.14) (0.70)
- ----------------------------------------------------- ------- ------- ------- ------- ------- -------
Total from investment operations 2.59 2.23 3.35 (0.67) (0.15) (0.74)
- ----------------------------------------------------- ------- ------- ------- ------- ------- -------
Less distributions:
Distributions from net realized gains (1.93) (0.68) (0.79) (0.43) (1.37) (1.93)
- ----------------------------------------------------- ------- ------- ------- ------- ------- -------
Total distributions (1.93) (0.68) (0.79) (0.43) (1.37) (1.93)
- ----------------------------------------------------- ------- ------- ------- ------- ------- -------
Net asset value, end of period $ 14.98 $ 14.32 $ 12.77 $ 10.21 $ 11.31 $ 14.98
===================================================== ======= ======= ======= ======= ======= =======
Total return(b) 18.50% 17.60% 33.00% (5.88)% (0.92)% (3.86)%
===================================================== ======= ======= ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $356,186 $280,807 $138,034 $38,448 $11,053 $ 1,189
===================================================== ======= ======= ======= ======= ======= =======
Ratio of expenses to average net assets 1.99%(c)(d) 2.03% 2.13% 2.18% 1.91%(e) 1.95%(f)(g)
===================================================== ======= ======= ======= ======= ======= =======
Ratio of net investment income (loss) to average net
assets (0.82)%(c) (0.39)% (0.65)% (0.94)% (0.72)%(e) (0.77)%(f)
===================================================== ======= ======= ======= ======= ======= =======
Portfolio turnover rate 110% 97% 87% 201% 192% 110%
===================================================== ======= ======= ======= ======= ======= =======
Average broker commission rate paid(h) $0.0568 $0.0621 N/A N/A N/A $0.0568
===================================================== ======= ======= ======= ======= ======= =======
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and are not annualized for
periods less than one year.
(c) Ratios are based on average net assets of $328,478,309.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(e) Annualized.
(f) Ratios are annualized and based on average net assets of $625,699.
(g) Ratio includes expenses paid indirectly. Excluding expenses paid
indirectly, the ratio of expenses to average net assets would have been
1.94%.
(h)The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
FS-40
<PAGE> 174
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM High Yield Fund:
We have audited the accompanying statement of assets and
liabilities of AIM High Yield Fund (a portfolio of AIM
Funds Group), including the schedule of investments, as
of December 31, 1997, the related statement of operations
for the year then ended, the statement of changes in its
net assets for each of the years in the two-year period
then ended and the financial highlights for each of the
years or periods in the five-year period then ended.
These financial statements and financial highlights are
the responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and 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
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 and financial highlights. Our procedures
included confirmation of securities owned as of December
31, 1997, by correspondence with the custodian and
brokers. 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 financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM High
Yield Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its
net assets for each of the years in the two-year period
then ended and the financial highlights for each of the
years or periods in the five-year period then ended, in
conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Houston, Texas
February 6, 1998
FS-41
<PAGE> 175
SCHEDULE OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
CORPORATE BONDS & NOTES-88.63%
AEROSPACE/DEFENSE-0.46%
Earthwatch Inc., Sr. Notes,
12.50%, 03/01/01(a)(b)
(Acquired 03/14/97; Cost
$15,000,000) $ 15,500,000 $ 15,577,500
- ---------------------------------------------------------------
AGRICULTURAL PRODUCTS-0.68%
Advance Agro Public Co.
(Thailand), Sr. Unsec. Notes,
13.00%, 11/15/07(a)
(Acquired 12/04/97; Cost
$5,252,739) 5,700,000 5,016,000
- ---------------------------------------------------------------
Hines Horticulture, Inc., Series
B Sr. Gtd. Sub. Notes, 11.75%,
10/15/05 16,710,000 18,464,550
- ---------------------------------------------------------------
23,480,550
- ---------------------------------------------------------------
AIR FREIGHT-0.52%
Atlas Air, Inc., Sr. Notes,
10.75%, 08/01/05 16,750,000 17,755,000
- ---------------------------------------------------------------
AIRLINES-1.66%
Airplanes Pass Through Trust,
Sub. Bonds, 10.875%, 03/15/19 26,550,000 29,885,476
- ---------------------------------------------------------------
Amtran, Inc., Sr. Unsec. Notes,
10.50%, 08/01/04(a)
(Acquired 07/17/97-07/30/97;
Cost $21,636,875) 21,500,000 22,576,720
- ---------------------------------------------------------------
World Airways, Inc., Sub. Conv.
Deb., 8.00%, 08/26/04(a)
(Acquired 08/21/97; Cost
$5,000,000) 5,000,000 4,775,000
- ---------------------------------------------------------------
57,237,196
- ---------------------------------------------------------------
AUTOMOBILES-0.82%
Ford Brasil LTDA (Brazil),
Unsec. Eurobonds, 9.125%,
11/08/04 7,840,000 7,565,600
- ---------------------------------------------------------------
Unsec. Eurobonds, 9.25%,
01/22/07 21,710,000 20,733,050
- ---------------------------------------------------------------
28,298,650
- ---------------------------------------------------------------
AUTO PARTS & EQUIPMENT-0.18%
Exide Corp., Conv. Sr. Sub.
Notes, 2.90%, 12/15/05(a)
(Acquired 12/19/96-04/03/97;
Cost $5,643,750) 9,500,000 6,362,340
- ---------------------------------------------------------------
BEVERAGES (NON-ALCOHOLIC)-0.82%
Coca-Cola Enterprises, Inc.,
Putable Notes, 7.24%,
06/20/20(c) 125,000,000 28,316,250
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
BROADCASTING (TELEVISION, RADIO
& CABLE)-6.79%
Capstar Broadcasting Partners,
Sr. Disc. Notes, 12.75%,
02/01/09(d) $ 28,500,000 $ 20,662,500
- ---------------------------------------------------------------
Diamond Cable Communications
PLC, (United Kingdom), Sr.
Yankee Disc. Notes, 11.75%,
12/15/05(d) 35,700,000 27,756,750
- ---------------------------------------------------------------
Digital Television Services, Sr.
Gtd. Sub. Notes, 12.50%,
08/01/07(a)
(Acquired 07/25/97-07/28/97;
Cost $25,571,400) 26,000,000 29,250,000
- ---------------------------------------------------------------
EchoStar Communications Corp.,
Sr. Sec. Gtd. Notes, 12.50%,
07/01/02 11,230,000 12,240,700
- ---------------------------------------------------------------
Fox Kids Worldwide, Inc., Sr.
Disc. Notes, 10.25%,
11/01/07(a)(d)
(Acquired 10/22/97; Cost
$19,851,085) 32,750,000 19,650,000
- ---------------------------------------------------------------
Frontiervision Holdings LP, Sr.
Disc. Notes, 11.875%,
09/15/07(d) 27,480,000 20,335,200
- ---------------------------------------------------------------
Kabelmedia Holdings GmbH
(Germany), Sr. Yankee Unsec.
Disc. Notes, 13.625%,
08/01/06(d) 26,000,000 19,110,000
- ---------------------------------------------------------------
Knology Holdings Inc., Sr. Disc.
Notes, 11.875%, 10/15/07(a)(d)(e)
(Acquired 10/16/97-11/14/97;
Cost $19,638,605) 35,650,000 19,429,250
- ---------------------------------------------------------------
Rifkin Acquisition Partners
L.L.P., Sr. Sub. Notes,
11.125%, 01/15/06 14,495,000 16,089,450
- ---------------------------------------------------------------
TeleWest Communications PLC
(United Kingdom), Sr. Yankee
Disc. Deb., 11.00%, 10/01/07(d) 34,620,000 27,090,150
- ---------------------------------------------------------------
United International Holdings, Inc.,
Series B Sr. Sec. Disc. Notes,
14.00%, 11/15/99(c) 18,790,000 15,501,750
- ---------------------------------------------------------------
Sr. Sec. Disc. Notes, 14.00%,
11/15/99(c)(f) 9,250,000 7,677,500
- ---------------------------------------------------------------
234,793,250
- ---------------------------------------------------------------
CHEMICALS-0.77%
Sterling Chemicals Holdings,
Sr. Unsec. Sub. Notes, 11.75%,
08/15/06 16,020,000 16,420,500
- ---------------------------------------------------------------
Sr. Sec. Disc. Notes, 13.50%,
08/15/08(d) 17,000,000 10,285,000
- ---------------------------------------------------------------
26,705,500
- ---------------------------------------------------------------
CHEMICALS (SPECIALTY)-1.03%
Crain Industries, Inc., Sr. Sub.
Notes, 13.50%, 08/15/05 16,360,000 18,732,200
- ---------------------------------------------------------------
</TABLE>
FS-42
<PAGE> 176
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
CHEMICALS (SPECIALTY)-(CONTINUED)
Key Plastics, Inc.,
Sr. Notes, 14.00%, 11/15/99 $ 1,900,000 $ 2,099,500
- ---------------------------------------------------------------
Sr. Sub. Notes, 10.25%,
03/15/07 14,000,000 14,910,000
- ---------------------------------------------------------------
35,741,700
- ---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-1.24%
GST Telecommunications, Inc.,
Sr. Sub. Notes, 12.75%, 11/15/07 16,500,000 17,283,750
- ---------------------------------------------------------------
ProNet, Inc., Sr. Sub. Notes,
11.875%, 06/15/05 23,640,000 25,590,300
- ---------------------------------------------------------------
42,874,050
- ---------------------------------------------------------------
CONSUMER (JEWELRY, NOVELTIES & GIFTS)-0.57%
Commemorative Brands, Sr. Sub.
Notes, 11.00%, 01/15/07 19,720,000 19,867,900
- ---------------------------------------------------------------
CONTAINERS & PACKAGING
(PAPER)-1.30%
BPC Holding Corp., Series B Sr.
Notes, 12.50%, 06/15/06 12,220,000 13,380,900
- ---------------------------------------------------------------
MVE Inc., Sr. Sec. Notes,
12.50%, 02/15/02 19,250,000 19,298,126
- ---------------------------------------------------------------
Tekni-Plex Inc., Sr. Sub. Notes,
11.25%, 04/01/07 11,400,000 12,340,500
- ---------------------------------------------------------------
45,019,526
- ---------------------------------------------------------------
DISTRIBUTORS (FOOD & HEALTH)-1.87%
Core-Mark International, Inc.,
Sr. Sub. Notes, 11.375%,
09/15/03 16,340,000 17,361,250
- ---------------------------------------------------------------
Fleming Companies, Inc., Sr. Sub
Notes, 10.625%, 07/31/07(a)
(Acquired 07/18/97-09/02/97;
Cost $20,635,355) 20,700,000 21,942,000
- ---------------------------------------------------------------
Nebco Evans Holding Co., Sr.
Disc. Notes, 12.375%,
07/15/07(d) 38,760,000 25,387,800
- ---------------------------------------------------------------
64,691,050
- ---------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.55%
Electronic Retailing Systems
International, Inc., Sr. Disc.
Notes, 13.25%, 02/01/04(d) 28,652,000 19,196,840
- ---------------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-0.96%
Advanced Micro Devices, Inc.,
Sr. Sec. Notes, 11.00%,
08/01/03 18,965,000 20,363,668
- ---------------------------------------------------------------
Panda Funding Corp. (China),
Series A-1 Pooled Project
Bonds, 11.625%, 08/20/12 11,775,869 13,012,335
- ---------------------------------------------------------------
33,376,003
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
ENTERTAINMENT-0.39%
Ascent Entertainment Group, Sr.
Disc. Notes, 11.875%,
12/15/04(a)(d)
(Acquired 12/17/97-12/23/97;
Cost $13,184,531) $ 23,300,000 $ 13,630,500
- ---------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-1.23%
Emergent Group, Inc., Sr. Notes,
10.75%, 09/15/04(a)
(Acquired 09/18/97-09/23/97;
Cost $24,067,575) 23,860,000 23,979,300
- ---------------------------------------------------------------
Trump Castle Funding, Inc.,
Mortgage Notes, 11.75%,
11/15/03 20,000,000 18,600,000
- ---------------------------------------------------------------
42,579,300
- ---------------------------------------------------------------
FOODS-0.68%
Del Monte Corp./Foods Co., Sr.
Unsec. Sub. Notes, 12.25%,
04/15/07 20,720,000 23,517,200
- ---------------------------------------------------------------
GAMING, LOTTERY & PARIMUTUEL
COMPANIES-4.41%
Alliance Gaming Corp., Sr. Sub.
Notes, 10.00%, 08/01/07(a)
(Acquired 09/12/97-11/13/97;
Cost $17,180,000) 17,500,000 17,675,000
- ---------------------------------------------------------------
Aztar Corp., Sr. Sub. Notes,
13.75%, 10/01/04 19,710,000 22,666,500
- ---------------------------------------------------------------
Coast Hotels & Casinos Inc.,
Series B Sec. First Mortgage
Gtd. Notes, 13.00%, 12/15/02 23,760,000 26,967,600
- ---------------------------------------------------------------
Resort At Summerlin LP, Sr. Sub.
Notes, 13.00%, 12/15/07(a)
(Acquired 12/23/97; Cost
$20,000,000) 20,000,000 20,100,000
- ---------------------------------------------------------------
Showboat Marina Casino
Partnership & Showboat Marina
Financial Corp., Series B Sec.
First Mortgage Notes, 13.50%,
03/15/03 21,600,000 26,244,000
- ---------------------------------------------------------------
Venetian Casino/LV Sands,
Mortgage Notes, 12.25%,
11/15/04(a)
(Acquired 11/06/97;
Cost $10,950,000) 10,950,000 11,018,437
- ---------------------------------------------------------------
Sr. Sub. Notes, 10.00%,
11/15/05(a)(d)
(Acquired 11/06/97-11/19/97;
Cost $28,877,170) 30,900,000 27,964,500
- ---------------------------------------------------------------
152,636,037
- ---------------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-1.61%
Tenet Healthcare Corp., Sr. Sub.
Notes, 10.125%, 03/01/05 50,790,000 55,615,050
- ---------------------------------------------------------------
</TABLE>
FS-43
<PAGE> 177
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
HEALTH CARE (LONG TERM CARE)-1.16%
Paragon Health Network, Inc.,
Sr. Sub. Notes, 10.50%,
11/01/07(a)(d)
(Acquired 10/30/97-12/19/97;
Cost $21,134,680) $ 35,350,000 $ 22,005,375
- ---------------------------------------------------------------
Sun Healthcare Group, Inc., Sr.
Sub. Notes, 9.50%, 07/01/07(a)
(Acquired 07/01/97; Cost
$17,338,500) 17,430,000 18,040,050
- ---------------------------------------------------------------
40,045,425
- ---------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.90%
Dynacare Inc. (Canada), Sr.
Yankee Notes, 10.75%, 01/15/06 15,430,000 16,317,225
- ---------------------------------------------------------------
HealthCor Holdings, Inc., Sr.
Notes, 11.00%, 12/01/04(a)
(Acquired 11/24/97; Cost
$14,460,000) 14,460,000 14,857,650
- ---------------------------------------------------------------
31,174,875
- ---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-1.79%
Alaris Medical Systems, Sr.
Unsec. Gtd. Sub. Deb., 9.75%,
01/01/06 22,870,000 24,127,850
- ---------------------------------------------------------------
Alliance Imaging Inc., Sr. Sub.
Notes, 10.0963%, 12/15/05 20,000,000 20,300,000
- ---------------------------------------------------------------
Dade International Inc., Series B
Sr. Sub. Notes, 11.125%,
05/01/06 15,710,000 17,438,100
- ---------------------------------------------------------------
61,865,950
- ---------------------------------------------------------------
HOMEBUILDING-0.52%
Continental Homes Holdings
Corp., Sr. Unsec. Gtd. Notes,
10.00%, 04/15/06 16,540,000 17,863,200
- ---------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.41%
Zeta Consumer Products, Sr.
Notes, 11.25%, 11/30/07(a)
(Acquired 11/20/97; Cost
$14,000,000) 14,000,000 14,315,000
- ---------------------------------------------------------------
INSURANCE (PROPERTY-CASUALTY)-0.30%
Superior National Capital Trust
Insurance, Gtd. Notes, 10.75%,
12/01/17(a)
(Acquired 11/26/97; Cost
$10,000,000) 10,000,000 10,275,000
- ---------------------------------------------------------------
IRON & STEEL-2.75%
GS Industries, Inc.,
Sr. Gtd. Notes, 12.00%,
09/01/04 15,755,000 17,310,806
- ---------------------------------------------------------------
Sr. Notes, 12.25%, 10/01/05 14,525,000 16,304,313
- ---------------------------------------------------------------
Gulf States Steel Corp., First
Mortgage Notes, 13.50%,
04/15/03 23,460,000 23,811,900
- ---------------------------------------------------------------
Sheffield Steel Corp., First
Mortgage Notes, 11.50%,
12/01/05(a)
(Acquired 11/26/97-12/12/97;
Cost $16,803,438) 16,750,000 17,168,750
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
IRON & STEEL-(CONTINUED)
Weirton Steel Corp., Sr. Notes,
11.375%, 07/01/04 $ 19,600,000 $ 20,531,000
- ---------------------------------------------------------------
95,126,769
- ---------------------------------------------------------------
LODGING-HOTELS-1.07%
American Skiing Corp., Series B
Sr. Sub. Notes, 12.00%,
07/15/06 18,000,000 19,980,000
- ---------------------------------------------------------------
Booth Creek Ski Holdings, Sr.
Notes, 12.50%, 03/15/07 17,610,000 17,345,850
- ---------------------------------------------------------------
37,325,850
- ---------------------------------------------------------------
MACHINERY (DIVERSIFIED)-0.42%
Fairfield Manufacturing Co.,
Inc., Sr. Sub. Notes, 11.375%,
07/01/01 13,725,000 14,548,500
- ---------------------------------------------------------------
MANUFACTURING (DIVERSIFIED)-1.81%
Elgin National Industries, Sr.
Notes, 11.00%, 11/01/07(a)
(Acquired 11/03/97-12/08/97;
Cost $12,857,500) 12,840,000 13,385,700
- ---------------------------------------------------------------
Glenoit Corp., Sr. Sub. Notes,
11.00%, 04/15/07(a)
(Acquired 03/26/97-11/17/97;
Cost $14,717,650) 14,690,000 15,865,200
- ---------------------------------------------------------------
Interlake Corp., Sr. Sub. Deb.,
12.125%, 03/01/02 32,050,000 33,332,000
- ---------------------------------------------------------------
62,582,900
- ---------------------------------------------------------------
MANUFACTURING (SPECIALIZED)-3.98%
Berry Plastics Corp., Sr. Sub.
Notes, 12.25%, 04/15/04 12,500,000 13,687,500
- ---------------------------------------------------------------
EV International Inc., Sr.
Unsec. Gtd. Sub., 11.00%,
03/15/07 16,850,000 17,271,250
- ---------------------------------------------------------------
Glasstech, Inc., Gtd., 12.75%,
07/01/04(a)
(Acquired 06/27/97; Cost
$12,000,000) 12,000,000 12,420,000
- ---------------------------------------------------------------
MMI Products Inc., Sr. Unsec.
Sub. Notes, 11.25%, 04/15/07 17,140,000 18,768,300
- ---------------------------------------------------------------
Neenah Corp., Sr. Sub. Notes,
11.125%, 05/01/07 4,000,000 4,410,000
- ---------------------------------------------------------------
Series C Sr. Sub. Notes,
11.125%, 05/01/07 15,000,000 16,537,500
- ---------------------------------------------------------------
Omega Cabinets, Sr. Sub Notes,
10.50%, 06/15/07(a)
(Acquired 07/18/97-11/11/97;
Cost $21,367,450) 21,140,000 21,985,600
- ---------------------------------------------------------------
Precise Technology Inc., Sr.
Unsec. Gtd. Sub., 11.125%,
06/15/07(a)
(Acquired 06/10/97-07/17/97;
Cost $14,664,250) 14,400,000 14,760,000
- ---------------------------------------------------------------
</TABLE>
FS-44
<PAGE> 178
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
MANUFACTURING (SPECIALIZED)-(CONTINUED)
Simmons Co., Sr. Sub. Notes,
10.75%, 04/15/06 $ 16,800,000 $ 17,850,000
- ---------------------------------------------------------------
137,690,150
- ---------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-0.63%
United Stationer Supply, Sr.
Sub. Notes, 12.75%, 05/01/05 19,021,000 21,731,493
- ---------------------------------------------------------------
OIL (INTERNATIONAL INTEGRATED)-0.48%
Rutherford-Moran Oil Corp., Sr.
Sub. Notes, 10.75%, 10/01/04(a)
(Acquired 10/06/97-10/08/97;
Cost $17,230,750) 16,400,000 16,769,000
- ---------------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-0.63%
Tokheim Corp., Series B Sr. Sub.
Notes, 11.50%, 08/01/06 18,975,000 21,631,500
- ---------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-2.82%
Abraxas Petroleum Corp., Series
B Sr. Notes, 11.50%, 11/01/04 19,290,000 21,219,000
- ---------------------------------------------------------------
Centaur Mining & Exploration,
Ltd. (Australia), Sr. Gtd.
Notes, 11.00%, 12/01/07(a)
(Acquired 11/24/97-12/10/97;
Cost $22,817,500) 22,800,000 23,028,000
- ---------------------------------------------------------------
Gerrity Oil & Gas Corp., Sr.
Sub. Notes, 11.75%, 07/15/04 14,750,000 16,151,250
- ---------------------------------------------------------------
Kelley Oil & Gas Corp., Series B
Sr. Gtd. Sub. Notes, 10.375%,
10/15/06 15,450,000 16,570,125
- ---------------------------------------------------------------
Southwest Royalties, Inc., Sr.
Gtd. Notes, 10.50%, 10/15/04(a)
(Acquired 10/08/97-10/21/97;
Cost $20,882,046) 20,780,000 20,676,100
- ---------------------------------------------------------------
97,644,475
- ---------------------------------------------------------------
OIL & GAS (REFINING & MARKETING)-0.41%
Texas Petrochemical Corp., Sr.
Sub. Notes, 11.125%, 07/01/06 13,000,000 14,235,000
- ---------------------------------------------------------------
PAPER & FOREST PRODUCTS-3.85%
American Pad & Paper Co., Series
B Sr. Sub. Notes, 13.00%,
11/15/05 21,820,000 25,202,100
- ---------------------------------------------------------------
Indah Kiat Fin Mauritius
(Indonesia), Sr. Gtd. Unsec.
Notes, 10.00%, 07/01/07(a)
(Acquired 06/26/97-10/24/97;
Cost $33,279,148) 33,890,000 28,298,150
- ---------------------------------------------------------------
National Fiberstok Corp., Series
B Sr. Notes, 11.625%, 06/15/02 20,790,000 21,881,475
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
PAPER & FOREST PRODUCTS-(CONTINUED)
Pindo Deli Pulp & Paper
(Indonesia), Sr. Gtd. Notes,
10.75%, 10/01/07(a)
(Acquired 09/25/97-12/08/97;
Cost $27,366,428) $ 27,290,000 $ 23,605,850
- ---------------------------------------------------------------
Tjiwi Kimia International Global
Co., BV, (Indonesia), Sr. Gtd.
Notes, 13.25%, 08/01/01 36,275,000 34,279,875
- ---------------------------------------------------------------
133,267,450
- ---------------------------------------------------------------
POWER PRODUCER (INDEPENDENT)-0.52%
Panda Global Energy Co. (China),
Sr. Yankee Gtd. Sec. Notes,
12.50%, 04/15/04(a)
(Acquired 04/11/97-08/13/97;
Cost $18,819,945) 19,562,000 17,899,230
- ---------------------------------------------------------------
PUBLISHING (NEWSPAPERS)-0.95%
Affiliated Newspaper
Investments, Sr. Disc. Notes,
13.25%, 07/01/06(d) 20,826,000 19,888,830
- ---------------------------------------------------------------
Garden State Newspapers, Inc.,
Sr. Sub. Sec. Notes, 12.00%,
07/01/04 11,500,000 12,937,500
- ---------------------------------------------------------------
32,826,330
- ---------------------------------------------------------------
RAILROADS-0.55%
TFM S.A. de C.V. (Mexico), Sr.
Gtd. Disc. Notes, 11.75%,
06/15/09(a)(d)
(Acquired 06/11/97-10/27/97;
Cost $17,589,557) 30,250,000 18,906,250
- ---------------------------------------------------------------
RESTAURANTS-0.56%
AFC Enterprises, Sr. Sub. Notes,
10.25%, 05/15/07 18,240,000 19,288,800
- ---------------------------------------------------------------
RETAIL (DISCOUNTERS)-0.58%
Loehmann's Holdings, Inc., Sr.
Unsec. Notes, 11.875%,
05/15/03 19,110,000 19,922,175
- ---------------------------------------------------------------
RETAIL (FOOD CHAINS)-2.55%
Carr-Gottstein Foods Co., Sr.
Sub. Notes, 12.00%, 11/15/05 29,955,000 33,250,050
- ---------------------------------------------------------------
Cumberland Farms, Sec. Notes,
10.50%, 10/01/03 16,977,000 17,019,443
- ---------------------------------------------------------------
Jitney-Jungle Stores of America
Inc., Sr. Gtd. Notes, 12.00%,
03/01/06 33,405,000 37,998,187
- ---------------------------------------------------------------
88,267,680
- ---------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-0.50%
Big 5 Corp., Sr. Notes, 10.875%,
11/15/07(a)
(Acquired 11/07/97-12/19/97;
Cost $17,264,563) 17,350,000 17,350,000
- ---------------------------------------------------------------
</TABLE>
FS-45
<PAGE> 179
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
RETAIL (SPECIALTY)-4.08%
Cabot Safety Corp., Sr. Sub.
Notes, 12.50%, 07/15/05 $ 18,975,000 $ 21,346,875
- ---------------------------------------------------------------
CSK Auto Inc., Sr. Gtd. Sub.
Deb., 11.00%, 11/01/06 22,010,000 24,321,050
- ---------------------------------------------------------------
Icon Fitness Corp., Series B Sr.
Disc. Notes, 14.00%, 11/15/06(d) 14,840,000 8,681,400
- ---------------------------------------------------------------
Icon Health & Fitness, Series B
Sr. Sub. Notes, 13.00%,
07/15/02 20,930,000 23,493,925
- ---------------------------------------------------------------
Selmer Co., Inc., Sr. Gtd. Sub.
Notes, 11.00%, 05/15/05 18,920,000 20,906,600
- ---------------------------------------------------------------
United Auto Group, Inc., Sr.
Sub. Notes, 11.00%, 07/15/07(a)
(Acquired 07/18/97-12/08/97;
Cost $24,120,600) 24,500,000 24,193,750
- ---------------------------------------------------------------
Wilsons-The Leather Experts
Inc., Sr. Notes, 11.25%,
08/15/04(a)
(Acquired 08/14/97; Cost
$18,290,000) 18,290,000 18,107,100
- ---------------------------------------------------------------
141,050,700
- ---------------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-1.63%
GFSI Holding Inc., Sr. Sub
Notes, 11.375%, 09/15/09(a)
(Acquired 09/12/97; Cost
$20,000,000) 20,000,000 20,750,000
- ---------------------------------------------------------------
J Crew Group, Deb., 13.125%,
10/15/08(a)(d)
(Acquired 10/14/97-12/16/97;
Cost $15,571,120) 30,780,000 14,158,800
- ---------------------------------------------------------------
J Crew Operating Corp., Sr. Sub.
Notes, 10.375%, 10/15/07(a)
(Acquired 10/14/97-12/09/97;
Cost $12,661,000) 12,745,000 11,343,050
- ---------------------------------------------------------------
Specialty Retailers Inc., Series
B Sec. Notes, 12.50%, 12/15/00 10,000,000 10,275,000
- ---------------------------------------------------------------
56,526,850
- ---------------------------------------------------------------
SERVICES (ADVERTISING/MARKETING)-1.19%
MDC Communications Corp.
(Canada), Sr. Yankee Unsec.
Sub. Notes, 10.50%, 12/01/06 17,470,000 18,561,875
- ---------------------------------------------------------------
Neodata Services, Inc., Series B
Sr. Notes, 12.00%, 05/01/03 21,000,000 22,619,310
- ---------------------------------------------------------------
41,181,185
- ---------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-3.83%
Coinmach Corp., Series B Sr.
Notes, 11.75%, 11/15/05 21,850,000 24,362,750
- ---------------------------------------------------------------
Coinmach Laundry Corp., Sr.
Notes, 11.75%, 11/15/05(a)
(Acquired 10/01/97; Cost
$3,845,625) 3,500,000 3,902,500
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
SERVICES (COMMERCIAL & CONSUMER)-(CONTINUED)
Dialog Corp. PLC (United
Kingdom), Sr. Sub. Notes,
11.00%, 11/15/07(a)
(Acquired 11/10/97-12/19/97;
Cost $18,059,375) $ 18,000,000 $ 18,765,000
- ---------------------------------------------------------------
Hydrochem Industrial Service,
Sr. Sec. Gtd. Sub. Notes,
10.375%, 08/01/07 21,300,000 22,152,000
- ---------------------------------------------------------------
Localiza Rent A Car (Brazil),
Sr. Gtd. Notes, 10.25%,
10/01/05(a) (Acquired
09/25/97-10/24/97; Cost
$22,323,438) 22,250,000 19,023,750
- ---------------------------------------------------------------
National Equipment Services, Sr.
Sub. Notes, 10.00%, 11/30/04(a)
(Acquired 12/02/97; Cost
$21,285,000) 22,000,000 21,890,000
- ---------------------------------------------------------------
Pegasus Shipping Hellas
(Bermuda), Sr. Gtd. Mortgage
Notes, 11.875%, 11/15/04(a)
(Acquired 11/19/97-12/19/97;
Cost $21,760,250) 22,500,000 22,387,500
- ---------------------------------------------------------------
132,483,500
- ---------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.42%
DecisionOne Holdings Corp., Sr.
Disc. Deb., 11.50%,
08/01/08(d)(g) 22,085,000 14,631,313
- ---------------------------------------------------------------
SHIPPING-1.71%
Gearbulk Holding Ltd., Sr.
Notes, 11.25%, 12/01/04 17,825,000 19,652,063
- ---------------------------------------------------------------
Navigator Gas Transport PLC
(United Kingdom), Notes,
10.50%, 06/30/07(a)
(Acquired 07/31/97-09/04/97;
cost $18,716,250) 18,520,000 19,723,800
- ---------------------------------------------------------------
Stena A.B. (Sweden), Sr. Yankee
Unsec. Notes, 10.50%, 12/15/05 18,150,000 19,828,875
- ---------------------------------------------------------------
59,204,738
- ---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-8.23%
CellNet Data Systems, Sr. Disc.
Notes, 14.00%, 10/01/07(a)(d)
(Acquired 09/24/97-10/15/97;
Cost $14,744,250) 29,000,000 14,065,000
- ---------------------------------------------------------------
Clearnet Communications Inc.
(Canada), Sr. Yankee Disc.
Notes, 14.75%, 12/15/05(d) 34,320,000 27,498,900
- ---------------------------------------------------------------
Dobson Communications, Sr.
Notes, 11.75%, 04/15/07 13,500,000 14,310,000
- ---------------------------------------------------------------
GST Telecommunications, Inc.,
Sr. Sec. Notes, 13.25%,
05/01/07 20,950,000 23,935,375
- ---------------------------------------------------------------
HighwayMaster Communications,
Inc., Sr. Notes, 13.75%,
09/15/05(a)
(Acquired 09/18/97-09/24/97;
Cost $18,739,950) 18,310,000 18,721,975
- ---------------------------------------------------------------
</TABLE>
FS-46
<PAGE> 180
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-(CONTINUED)
McCaw Intl., Ltd., Sr. Disc.
Notes, 13.00%, 04/15/07(d) $ 39,500,000 $ 23,107,500
- ---------------------------------------------------------------
Microcell Telecommunications
Inc., Sr. Disc. Notes, 14.00%,
06/01/06(d) 29,500,000 19,986,250
- ---------------------------------------------------------------
Nextel Communications, Inc., Sr.
Disc. Notes, 10.65%,
09/15/07(a)(d)
(Acquired 10/24/97; Cost
$18,712,500) 30,000,000 18,937,500
- ---------------------------------------------------------------
Nextel Communications, Sr. Disc.
Notes, 9.75%, 10/31/07(a)(d)
(Acquired 10/23/97; Cost
$9,770,625) 16,300,000 10,106,000
- ---------------------------------------------------------------
Orion Network Systems, Inc., Sr.
Gtd. Disc. Notes, 12.50%,
01/15/07(d) 36,000,000 26,910,000
- ---------------------------------------------------------------
Powertel, Inc., Sr. Unsec.
Notes, 11.125%, 06/01/07 26,000,000 28,210,000
- ---------------------------------------------------------------
PriCellular Wireless Corp., Sr.
Disc. Notes, 14.00%, 11/15/01 34,620,000 38,687,850
- ---------------------------------------------------------------
Sygnet Wireless Inc., Sr. Unsec.
Notes, 11.50%, 10/01/06 18,800,000 20,398,000
- ---------------------------------------------------------------
284,874,350
- ---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-3.19%
Esprit Telecom Group PLC (United
Kingdom), Sr. Yankee Notes,
11.50%, 12/15/07 17,500,000 18,112,500
- ---------------------------------------------------------------
Interamericas Communications
Corp., Sr. Notes, 14.00%,
10/27/07(h) 22,990,000 22,990,000
- ---------------------------------------------------------------
PhoneTel Technologies, Inc., Sr.
Gtd. Unsec. Notes, 12.00%,
12/15/06 14,840,000 15,470,700
- ---------------------------------------------------------------
Primus Telecommunications Group,
Inc., Sr. Sec. Notes, 11.75%,
08/01/04 20,000,000 21,800,000
- ---------------------------------------------------------------
RSL Communications, Ltd. (United
Kingdom), Sr. Yankee Gtd.
Notes, 12.25%, 11/15/06 29,620,000 32,137,700
- ---------------------------------------------------------------
110,510,900
- ---------------------------------------------------------------
TELEPHONE-2.98%
Esat Holdings Ltd. (Ireland),
Sr. Yankee Notes, 12.50%,
02/01/07(a)(d)
(Acquired 02/21/97-06/12/97;
cost $15,217,200) 25,530,000 18,381,600
- ---------------------------------------------------------------
Esat Telecom Group PLC
(Ireland), Sr. Yankee Notes ,
12.50%, 02/01/07(d) 4,500,000 3,228,750
- ---------------------------------------------------------------
Hermes Europe Railtel BV
(Netherlands), Sr. Notes,
11.50%, 08/15/07(a)
(Acquired 08/14/97-09/02/97;
Cost $29,303,500) 28,660,000 31,955,900
- ---------------------------------------------------------------
International CableTel, Inc.,
Sr. Notes, 11.50%, 02/01/06(d) 24,200,000 19,118,000
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
TELEPHONE-(CONTINUED)
Nextlink Communications Inc.,
Sr. Notes, 12.50%, 04/15/06 $ 26,620,000 $ 30,479,900
- ---------------------------------------------------------------
103,164,150
- ---------------------------------------------------------------
TRUCKERS-1.10%
AmeriTruck Distribution Corp.,
Series B Sr. Sub. Notes,
12.25%, 11/15/05 19,800,000 19,701,000
- ---------------------------------------------------------------
Travelcenters of America Inc.,
Sr. Gtd. Unsec. Sub. Deb.,
10.25%, 04/01/07 17,530,000 18,494,150
- ---------------------------------------------------------------
38,195,150
- ---------------------------------------------------------------
TRUCKS & PARTS-0.48%
Blue Bird Body Co., Series B Sr.
Sub. Notes, 10.75%, 11/15/06 15,425,000 16,659,000
- ---------------------------------------------------------------
WASTE MANAGEMENT-1.11%
Allied Waste Industries, Inc.,
Sr. Disc. Notes, 11.30%,
06/01/07(a)(d)
(Acquired 05/01/97; cost
$17,920,032) 31,200,000 22,074,000
- ---------------------------------------------------------------
Norcal Waste Systems Inc.,
Series B Sr. Gtd. Notes,
13.50%, 11/15/05 14,280,000 16,493,400
- ---------------------------------------------------------------
38,567,400
- ---------------------------------------------------------------
Total Corporate Bonds &
Notes 3,066,873,630
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
COMMON STOCKS & OTHER EQUITY INTERESTS-0.37%
PUBLISHING (NEWSPAPERS)-0.05%
Affiliated Newspaper Investments(i) 13,826 1,527,773
- ---------------------------------------------------------------
SERVICES (FACILITIES & ENVIRONMENTAL)-0.02%
Cobblestone Holdings Inc.(i) 23,250 813,750
- ---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.30%
Celcaribe S.A. Ordinary Trust
Certificates(i) 2,276,400 9,105,600
- ---------------------------------------------------------------
Nextel Communications, Inc.(i) 52,195 1,357,070
- ---------------------------------------------------------------
10,462,670
- ---------------------------------------------------------------
Total Common Stocks & Other
Equity Interests 12,804,193
- ---------------------------------------------------------------
PREFERRED STOCKS-2.65%
BROADCASTING (TELEVISION, RADIO & CABLE)-0.71%
Cablevision Systems Corp.,
Series M, 11.125% PIK Conv. Pfd.(i) 209,720 24,537,282
- ---------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-0.01%
ICG Holdings, Inc., $14.25 Pfd.(i) 404 481,207
- ---------------------------------------------------------------
</TABLE>
FS-47
<PAGE> 181
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRICAL EQUIPMENT-0.39%
EchoStar Communications Corp.,
12.1250% PIK Pfd.(i) 13,000 $ 13,422,500
- ---------------------------------------------------------------
ENTERTAINMENT-0.00%
Time Warner Inc.-Series M,
$102.50 PIK Conv. Pfd.(i) 1 1,154
- ---------------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-0.24%
Kelley Oil & Gas Corp., $2.625
Conv. Pfd.(i) 370,000 8,140,000
- ---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.83%
Nextel Communications, Inc.,
13.00% PIK Pfd.(i) 24,831 28,555,596
- ---------------------------------------------------------------
TELEPHONE-0.47%
Intermedia Communications Inc.,
7.00% Conv. Pfd.(a)(i)
(Acquired 10/24/97; Cost
$14,500,000) 580,000 16,385,000
- ---------------------------------------------------------------
Total Preferred Stocks 91,522,739
- ---------------------------------------------------------------
RIGHTS & WARRANTS-0.37%
CHEMICALS-0.01%
Sterling Chemicals Holdings,
expiring 08/15/08(i) 7,500 225,000
- ---------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.02%
Electronic Retailing Systems
International, expiring
02/01/04(i) 28,652 573,040
- ---------------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-0.01%
Republic Health Corp., expiring
04/03/00(i) 17,500 315,000
- ---------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-0.01%
Glasstech Inc., expiring
06/30/04(i) 12,000 12,000
- ---------------------------------------------------------------
Highwaymaster Communication Inc.,
expiring 01/20/49(a)(i)
(Acquired 09/18/97-09/24/97;
Cost $0) 18,310 18,310
- ---------------------------------------------------------------
MVE Inc., expiring 02/15/02(i) 6,750 202,500
- ---------------------------------------------------------------
Primus Telecommunications,
expiring 08/01/04(i) 20,000 200,000
- ---------------------------------------------------------------
Resort At Summerlin Corp.,
expiring 12/15/07(i) 20,000 200
- ---------------------------------------------------------------
433,010
- ---------------------------------------------------------------
IRON & STEEL-0.00%
Bar Technologies Inc., expiring
04/01/01(i) 6,000 36,000
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MANUFACTURING (SPECIALIZED)-0.01%
Berry Plastics Corp., expiring
04/15/04(i) 6,000 $ 270,120
- ---------------------------------------------------------------
METAL FABRICATORS-0.00%
Gulf States Steel Corp.,
expiring 04/15/03(i) 15,990 71,955
- ---------------------------------------------------------------
PERSONAL CARE-0.04%
IHF Capital Inc., Series H,
expiring 11/14/99(a)(i)
(Acquired 11/04/94; Cost $0) 8,000 1,280,000
- ---------------------------------------------------------------
Series I, expiring 11/14/99(a)(i)
(Acquired 11/04/94-03/01/95;
Cost $0) 7,250 366,125
- ---------------------------------------------------------------
1,646,125
- ---------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.14%
Cellnet Data System, expiring
10/01/07(i) 29,000 580,000
- ---------------------------------------------------------------
Clearnet Communications Inc.
expiring 09/15/05(i) 100,716 956,802
- ---------------------------------------------------------------
ICG Communications, Inc.,
expiring 10/15/05(i) 39,600 574,200
- ---------------------------------------------------------------
McCaw Intl. Ltd., expiring
04/15/07(i) 39,500 98,750
- ---------------------------------------------------------------
Microcell Telecommunications
Inc., expiring 06/01/06(a)(i)
(Acquired 12/18/96; Cost
$992,888) 118,000 1,711,000
- ---------------------------------------------------------------
Orion Network Systems, Inc.,
expiring 01/15/07(i) 43,600 538,400
- ---------------------------------------------------------------
Powertel Inc., expiring
02/01/06(i) 42,656 399,900
- ---------------------------------------------------------------
4,859,052
- ---------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-0.12%
RSL Communications, Ltd. (United
Kingdom), expiring 11/15/06(a)(i)
(Acquired 09/30/96-12/08/97;
Cost $2,023,063) 45,145 4,175,912
- ---------------------------------------------------------------
TELEPHONE-0.01%
ESAT Holdings Ltd., expiring
02/01/07(i)
(Acquired 06/16/97; Cost $0) 25,530 95,738
- ---------------------------------------------------------------
Intermedia Communications Inc.,
expiring 06/01/00(a)(i)
(Acquired 10/25/95; Cost $0) 1,500 165,000
- ---------------------------------------------------------------
260,738
- ---------------------------------------------------------------
Total Rights & Warrants 12,865,952
- ---------------------------------------------------------------
</TABLE>
FS-48
<PAGE> 182
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
U.S. TREASURY SECURITIES-5.30%
NOTES-5.30%
11.75%, 02/15/01 $ 25,000,000 $ 29,327,500
- ---------------------------------------------------------------
13.125%, 05/15/01 25,000,000 30,672,500
- ---------------------------------------------------------------
15.75%, 11/15/01 25,000,000 33,610,250
- ---------------------------------------------------------------
13.375%, 08/15/01 30,000,000 37,465,500
- ---------------------------------------------------------------
14.25%, 02/15/02 40,000,000 52,389,200
- ---------------------------------------------------------------
Total U.S. Treasury Securities 183,464,950
- ---------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENT-1.23%(j)
Goldman Sachs & Co., 4.75%,
01/02/98(k) $ 42,498,660 $ 42,498,660
- ---------------------------------------------------------------
TOTAL INVESTMENTS-98.55% 3,410,030,124
- ---------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-1.45% 50,299,302
- ---------------------------------------------------------------
NET ASSETS-100.00% $3,460,329,426
===============================================================
</TABLE>
Notes to Schedule of Investments:
(a) Restricted security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The
aggregate market value of these securities at 12/31/97 was $953,241,762
which represented 27.55% of the Fund's net assets.
(b) Issued as a unit. This unit also includes 15,500 warrants to purchase 31.12
shares of common stock per warrant.
(c) Zero coupon bonds. Interest rate shown represents the rate of original issue
discount.
(d) Discounted bond at purchase. Interest rate shown represents coupon rate at
which the bond will accrue at a specified future date.
(e) Issued as a unit. This unit also includes 35,650 warrants to purchase
.003734 shares of preferred stock per warrant.
(f) Issued as a unit. This unit also includes 9,250 warrants to buy 4.535
shares of common stock per warrant.
(g) Issued as a unit. This unit also includes 22,085 warrants to buy 1.9 shares
of common stock per warrant.
(h) Issued as a unit. This unit also includes 804,650 warrants to buy 1 share of
common stock per warrant.
(i) Non-income producing security.
(j) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts, and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(k) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$400,105,556. Collateralized by $384,914,000 U.S. Government agency
obligations, 5.625% to 6.625% due 11/30/99 to 02/15/27 with an aggregate
market value at 12/31/97 of $408,401,531.
Abbreviations:
Conv. - Convertible
Deb. - Debentures
Disc. - Discounted
Gtd. - Guarantee
PIK - Payment in Kind
Pfd. - Preferred
Sec. - Secured
Sr. - Senior
Sub. - Subordinated
Unsec. - Unsecured
Wts. - Warrants
See Notes to Financial Statements.
FS-49
<PAGE> 183
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$3,268,502,635) $3,410,030,124
- ----------------------------------------------------------
Receivables for:
Investments sold 1,941,550
- ----------------------------------------------------------
Fund shares sold 16,416,473
- ----------------------------------------------------------
Dividends and interest 69,937,898
- ----------------------------------------------------------
Investment for deferred compensation plan 60,157
- ----------------------------------------------------------
Other assets 97,377
- ----------------------------------------------------------
Total assets 3,498,483,579
- ----------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 19,936,494
- ----------------------------------------------------------
Dividends 12,857,399
- ----------------------------------------------------------
Deferred compensation plan 60,157
- ----------------------------------------------------------
Accrued advisory fees 1,383,818
- ----------------------------------------------------------
Accrued administrative service fees 9,059
- ----------------------------------------------------------
Accrued distribution fees 2,855,006
- ----------------------------------------------------------
Accrued trustees' fees 5,147
- ----------------------------------------------------------
Accrued transfer agent fees 350,310
- ----------------------------------------------------------
Accrued operating expenses 696,763
- ----------------------------------------------------------
Total liabilities 38,154,153
- ----------------------------------------------------------
Net assets applicable to shares
outstanding $3,460,329,426
- ----------------------------------------------------------
NET ASSETS:
Class A $1,786,351,699
==========================================================
Class B $1,647,801,094
==========================================================
Class C $ 26,176,633
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 175,835,012
==========================================================
Class B 162,246,965
==========================================================
Class C 2,581,428
==========================================================
Class A:
Net asset value and redemption price per
share $ 10.16
==========================================================
Offering price per share:
(Net asset value of $10.16
divided by 95.25%) $ 10.67
==========================================================
Class B:
Net asset value and offering price per
share $ 10.16
==========================================================
Class C:
Net asset value and offering price per
share $ 10.14
==========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $279,638,436
- ---------------------------------------------------------
Dividends 2,764,016
- ---------------------------------------------------------
Total investment income 282,402,452
- ---------------------------------------------------------
EXPENSES:
Advisory fees 13,632,090
- ---------------------------------------------------------
Administrative service fees 111,767
- ---------------------------------------------------------
Custodian fees 197,027
- ---------------------------------------------------------
Transfer agent fees -- Class A 1,720,365
- ---------------------------------------------------------
Transfer agent fees -- Class B 1,564,093
- ---------------------------------------------------------
Transfer agent fees -- Class C 4,991
- ---------------------------------------------------------
Trustees' fees 23,732
- ---------------------------------------------------------
Distribution fees -- Class A 3,699,344
- ---------------------------------------------------------
Distribution fees -- Class B 13,453,229
- ---------------------------------------------------------
Distribution fees -- Class C 42,927
- ---------------------------------------------------------
Other 1,163,559
- ---------------------------------------------------------
Total expenses 35,613,124
- ---------------------------------------------------------
Less: Expenses paid indirectly (224,536)
- ---------------------------------------------------------
Net expenses 35,388,588
- ---------------------------------------------------------
Net investment income 247,013,864
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM
INVESTMENT SECURITIES:
Net realized gain from investment securities 62,942,651
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities 18,112,537
- ---------------------------------------------------------
Net gain on investment securities 81,055,188
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $328,069,052
=========================================================
</TABLE>
See Notes to Financial Statements.
FS-50
<PAGE> 184
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 247,013,864 $ 174,137,830
- ----------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities 62,942,651 17,869,656
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities 18,112,537 86,550,248
- ----------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 328,069,052 278,557,734
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (133,510,208) (102,842,087)
- ----------------------------------------------------------------------------------------------
Class B (111,521,456) (72,629,856)
- ----------------------------------------------------------------------------------------------
Class C (357,582) --
- ----------------------------------------------------------------------------------------------
Share transactions-net:
Class A 469,620,256 327,466,596
- ----------------------------------------------------------------------------------------------
Class B 540,779,350 466,449,407
- ----------------------------------------------------------------------------------------------
Class C 26,215,648 --
- ----------------------------------------------------------------------------------------------
Net increase in net assets 1,119,295,060 897,001,794
- ----------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 2,341,034,366 1,444,032,572
- ----------------------------------------------------------------------------------------------
End of period $3,460,329,426 $2,341,034,366
==============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $3,332,603,649 $2,295,988,395
- ----------------------------------------------------------------------------------------------
Undistributed net investment income 4,691,600 2,868,653
- ----------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on sales of
investment securities (18,493,312) (81,237,634)
- ----------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 141,527,489 123,414,952
- ----------------------------------------------------------------------------------------------
$3,460,329,426 $2,341,034,366
==============================================================================================
</TABLE>
See Notes to Financial Statements.
FS-51
<PAGE> 185
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM High Yield Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of nine separate series portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers three different classes of shares: the Class A shares, the
Class B shares, and the Class C shares. The new Class C shares commenced sales
on August 4, 1997. Class A shares are sold with a front-end sales charge. Class
B and Class C shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class are voted on exclusively by the shareholders
of such portfolio or class. The assets, liabilities and operations of each
portfolio are accounted for separately. Information presented in these financial
statements pertains only to the Fund. The Fund's objective is to achieve a high
level of current income by investing primarily in publicly traded non-investment
grade debt securities. The Fund will also consider the possibility of capital
growth when it purchases and sells securities. Debt securities of less than
investment grade are considered "high risk" securities (commonly referred to as
junk bonds). These bonds may involve special risks in addition to the risks
associated with investment in higher rated debt securities. High yield bonds may
be more susceptible to real or perceived adverse economic and competitive
industry conditions than higher grade bonds. Also, the secondary market in which
high yield bonds are traded may be less liquid than the market for higher grade
bonds.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- Debt securities (including convertible bonds) are
valued on the basis of prices provided by an independent pricing service.
Prices provided by the pricing service may be determined without exclusive
reliance on quoted prices, and may reflect appropriate factors such as
institution-size trading in similar groups of securities, developments
related to special securities, yield, quality, coupon rate, maturity, type
of issue, individual trading characteristics and other market data.
Investment securities for which prices are not provided by the pricing
service and which are listed or traded on an exchange (except convertible
bonds) are valued at the last sales price on the exchange where principally
traded or, lacking any sales on a particular day, at the mean between the
closing bid and asked prices on that day unless the Board of Trustees, or
persons designated by the Board of Trustees, determines that
over-the-counter quotations more closely reflect the current market value of
the security. Securities traded in the over-the-counter market, except (i)
securities priced by the pricing service, (ii) securities for which
representative exchange prices are available, and (iii) securities reported
in the NASDAQ National Market System, are valued at the mean between
representative last bid and asked prices obtained from an electronic
quotation reporting system, if such prices are available, or from
established market makers. Each security reported in the NASDAQ National
Market System is valued at the last sales price on the valuation date or
absent a last sales price, at the mean between the closing bid and asked
prices. Securities for which market quotations either are not readily
available or are questionable are valued at fair value as determined in good
faith by or under the supervision of the Trust's officers in a manner
specifically authorized by the Board of Trustees. Short-term obligations
having 60 days or less to maturity are valued at amortized cost which
approximates market value.
B. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date. It is the policy of the Fund to declare daily dividends
from net investment income. Such dividends are paid monthly. Distributions
from net realized capital gains, if any, are recorded on ex-dividend date
and are paid annually subject to restrictions noted in section "C" below. On
December 31, 1997, undistributed net investment income was increased by
$198,329 and undistributed net realized gains reduced by $198,329 in order
to comply with the requirements of the American Institute of Certified
Public Accountants Statement of Position 93-2. Net assets of the Fund were
unaffected by the reclassifications discussed above.
C. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements. The Fund has a capital loss
carryforward of $5,680,483 (which may be carried forward to offset future
taxable capital gains, if any) which expires, if not previously utilized,
through the year 2003. The Fund cannot distribute capital gains to
shareholders until the tax loss carryforwards have been utilized.
D. Expenses -- Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses which are attributable to more than one class are allocated among
the classes.
FS-52
<PAGE> 186
NOTE 2- ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.625% of
the first $200 million of the Fund's average daily net assets, plus 0.55% of the
Fund's average daily net assets in excess of $200 million to and including $500
million, plus 0.50% of the Fund's average daily net assets in excess of $500
million to and including $1 billion, plus 0.45% of the Fund's average daily net
assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended December 31, 1997, AIM
was reimbursed $111,767 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the year ended December 31, 1997, the
Fund paid AFS $2,021,415 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted
distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares and Class C shares (the "Class A and C Plan"), and the
Fund's Class B shares (the "Class B Plan") (collectively, the "Plans"). The
Fund, pursuant to the Class A and C Plan pays AIM Distributors compensation at
an annual rate of 0.25% of the average daily net assets of Class A shares and
1.00% of the average daily net assets of the Class C shares. The Fund pursuant
to the Class B Plan, pays AIM Distributors compensation at an annual rate of
1.00% of the average daily net assets attributable to the Class B shares. Of
these amounts, the Fund may pay a service fee of 0.25% of the average daily net
assets of the Class A, Class B or Class C shares to selected dealers and
financial institutions who furnish continuing personal shareholder services to
their customers who purchase and own the appropriate class of shares of the
Fund. Any amounts not paid as a service fee by the Class B or Class C shares
under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. AIM Distributors may, from time to
time, assign, transfer, or pledge to one or more designees, its rights to all or
a designated portion of (a) compensation received by AIM Distributors from the
Fund pursuant to the Class B Plan (but not AIM Distributors' duties and
obligations pursuant to the Class B Plan) and (b) any contingent deferred sales
charges received by AIM Distributors related to the Class B shares. During the
year ended December 31, 1997, the Class A shares and Class B shares and the
period August 4, 1997 (date sales commenced) through December 31, 1997, the
Class A, Class B and Class C shares paid AIM Distributors $3,699,344,
$13,453,229 and $42,927, respectively, as compensation under the Plans.
AIM Distributors received commissions of $2,043,967 from sales of the Class A
shares of the Fund during the year ended December 31, 1997. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1997,
for the Class A shares and Class B shares, and the period August 4, 1997 (date
sales commenced) through December 31, 1997, for the Class C shares, the Class A,
Class B and Class C shares paid AIM Distributors $3,699,344, $13,453,209, and
$42,927 respectively, as compensation under the Plans.
During the year ended December 31, 1997, the Fund paid legal fees of $10,687
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
AIM has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses related to pricing services used by the Fund which reduced Fund
expenses by $11,070 during the year ended December 31, 1997. Also during the
year ended December 31, 1997 the Fund received reductions in transfer agency
fees from AFS (an affiliate of AIM) and reductions in custodian fees of $31,501
and $181,965, respectively, under expense offset arrangements. The effect of the
above arrangements resulted in reductions of the Fund's total expenses of
$224,536 during the year ended December 31, 1997.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 15, 1997, the Fund was
limited to borrowing up to the lesser of (i) $325,000,000 or (ii) the limits set
by its prospectus for borrowings. During the year ended December 31, 1997, the
Fund did not borrow under the line of credit agreement. The funds which are
parties to the line of credit are charged a commitment fee of 0.05% on the
unused balance of the committed line. The commitment fee is allocated among such
funds based on their respective average net assets for the period.
FS-53
<PAGE> 187
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1997 was
$3,485,380,448 and $2,193,406,469, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of December 31, 1997 was as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $174,083,384
- ----------------------------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (34,437,108)
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $139,646,276
======================================================================================================================
</TABLE>
Cost of investments for tax purposes is $3,270,383,848.
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ------------ -------------
<S> <C> <C> <C> <C>
Sold:
Class A 93,715,770 $ 935,998,102 76,485,479 $ 725,785,892
- --------------------------------------------------------- ----------- --------------- ------------ -------------
Class B 74,428,033 739,555,783 63,383,789 605,130,108
- --------------------------------------------------------- ----------- --------------- ------------ -------------
Class C* 2,840,747 28,847,843 -- --
- --------------------------------------------------------- ----------- --------------- ------------ -------------
Issued as reinvestment of dividends:
Class A 8,409,927 83,983,856 6,674,252 64,083,963
- --------------------------------------------------------- ----------- --------------- ------------ -------------
Class B 5,178,022 54,019,940 3,798,909 36,390,618
- --------------------------------------------------------- ----------- --------------- ------------ -------------
Class C* 19,254 195,246 -- --
- --------------------------------------------------------- ----------- --------------- ------------ -------------
Reacquired:
Class A (55,082,159) (550,361,702) (48,380,296) (462,403,259)
- --------------------------------------------------------- ----------- --------------- ------------ -------------
Class B (25,424,400) (252,796,373) (18,351,224) (175,071,319)
- --------------------------------------------------------- ----------- --------------- ------------ -------------
Class C* (278,573) (2,827,441) -- --
- --------------------------------------------------------- ----------- --------------- ------------ -------------
103,806,621 $ 1,036,615,254 83,610,909 $ 793,916,003
=========== =============== ============ =============
</TABLE>
* Class C shares commenced sales on August 4, 1997.
FS-54
<PAGE> 188
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A outstanding
during each of the years in the five-year period ended December 31, 1997, for a
share of Class B outstanding during each of the years in the four-year period
ended December 31, 1997 and the period September 1, 1993 (date sales commenced)
through December 31, 1993, and for a share of Class C outstanding during the
period August 4, 1997 (date sales commenced) through December 31, 1997.
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.88 $ 9.43 $ 8.93 $ 10.05 $ 9.40
- ------------------------------------------------------------ ---------- ---------- -------- -------- --------
Income from investment operations:
Net investment income 0.90 0.92 0.93 0.96 0.97
- ------------------------------------------------------------ ---------- ---------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) 0.28 0.46 0.52 (1.12) 0.69
- ------------------------------------------------------------ ---------- ---------- -------- -------- --------
Total from investment operations 1.18 1.38 1.45 (0.16) 1.66
- ------------------------------------------------------------ ---------- ---------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.90) (0.93) (0.95) (0.96) (1.01)
- ------------------------------------------------------------ ---------- ---------- -------- -------- --------
Net asset value, end of period $ 10.16 $ 9.88 $ 9.43 $ 8.93 $ 10.05
============================================================ ========== ========== ======== ======== ========
Total return(a) 12.52% 15.44% 16.86% (1.67)% 18.40%
============================================================ ========== ========== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,786,352 $1,272,974 $886,106 $578,959 $50,760
============================================================ ========== ========== ======== ======== ========
Ratio of expenses to average net assets 0.90%(b)(c) 0.97% 0.96% 1.00% 1.12%
============================================================ ========== ========== ======== ======== ========
Ratio of net investment income to average net assets 9.08%(b) 9.67% 9.95% 10.07% 9.82%
============================================================ ========== ========== ======== ======== ========
Portfolio turnover rate 80% 77% 61% 53% 53%
============================================================ ========== ========== ======== ======== ========
</TABLE>
(a) Does not deduct sales charges.
(b) Ratios are based on average net assets of $1,479,737,639.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly
the ratio of expenses to average net assets would have been 0.89%.
<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------------------------- --------
1997 1996 1995 1994 1993 1997
---------- ---------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.88 $ 9.42 $ 8.92 $ 10.04 $ 9.96 $ 10.04
- -------------------------------------------- ---------- ---------- -------- -------- ------- --------
Income from investment operations:
Net investment income 0.83 0.85 0.85 0.87 0.32 0.35
- -------------------------------------------- ---------- ---------- -------- -------- ------- --------
Net gains (losses) on securities (both
realized and unrealized) 0.28 0.47 0.52 (1.10) 0.07 0.10
- -------------------------------------------- ---------- ---------- -------- -------- ------- --------
Total from investment operations 1.11 1.32 1.37 (0.23) 0.39 0.45
- -------------------------------------------- ---------- ---------- -------- -------- ------- --------
Less distributions:
Dividends from net investment income (0.83) (0.86) (0.87) (0.89) (0.31) (0.35)
- -------------------------------------------- ---------- ---------- -------- -------- ------- --------
Net asset value, end of period $ 10.16 $ 9.88 $ 9.42 $ 8.92 $ 10.04 $ 10.14
============================================ ========== ========== ======== ======== ======= ========
Total return(a) 11.71% 14.68% 15.91% (2.48)% 4.00% 4.49%
============================================ ========== ========== ======== ======== ======= ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $1,647,801 $1,068,060 $557,926 $191,338 $31,264 $ 26,177
============================================ ========== ========== ======== ======== ======= ========
Ratio of expenses to average net assets 1.65%(b)(c) 1.68% 1.73% 1.80% 1.93%(d) 1.68%(b)(c)(d)
============================================ ========== ========== ======== ======== ======= ========
Ratio of net investment income to average
net assets 8.33%(b) 8.95% 9.18% 9.27% 8.99%(d) 8.30%(b)(d)
============================================ ========== ========== ======== ======== ======= ========
Portfolio turnover rate 80% 77% 61% 53% 53% 80%
============================================ ========== ========== ======== ======== ======= ========
</TABLE>
(a) Does not deduct contingent deferred sales charges and for periods less than
one year are not annualized.
(b) Ratios are based on average net assets of $1,345,322,915 and $10,445,598,
respectively, for Class B and Class C.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly
the ratio of expenses to average net assets would have been the same for
Class B and would have been 1.66% (annualized) for Class C.
(d) Annualized.
FS-55
<PAGE> 189
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Income Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Income Fund (a portfolio of AIM Funds
Group), including the schedule of investments, as of
December 31, 1997, and the related statement of
operations for the year then ended, the statement of
changes in net assets for each of the years in the
two-year period then ended, and the financial highlights
for each of the years or periods in the five-year period
then ended. These financial statements and financial
highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion
on these financial statements and 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
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 and financial highlights. 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 presentation. We believe
that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Income
Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its
net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the
years or periods in the five-year period then ended, in
conformity with generally accepted accounting principles.
/s/ KPMG PEAT MARWICK LLP
-------------------------
KPMG Peat Marwick LLP
Houston, Texas
February 6, 1998
FS-56
<PAGE> 190
SCHEDULE OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
U.S. DOLLAR DENOMINATED NON-CONVERTIBLE
BONDS & NOTES-70.07%
AGRICULTURAL PRODUCTS-0.24%
Hines Horticulture, Inc.,
Series B Sr. Gtd. Sub. Notes,
11.75%, 10/15/05 $ 1,000,000 $ 1,105,000
- -----------------------------------------------------------
AIRLINES-2.54%
Airplanes Pass Through Trust,
Sub. Bonds, 10.875%, 03/15/19 1,810,000 2,037,390
- -----------------------------------------------------------
Delta Air Lines, Inc.,
Deb., 9.00%, 05/15/16 500,000 591,205
- -----------------------------------------------------------
Equipment Trust Cert., 10.50%
04/30/16 5,000,000 6,430,900
- -----------------------------------------------------------
United Air Lines, Inc., Pass
Through Certificates, 9.56%,
10/19/18 2,325,000 2,859,145
- -----------------------------------------------------------
11,918,640
- -----------------------------------------------------------
AUTOMOBILES-1.75%
General Motors Corp., Deb.,
8.80%, 03/01/21 6,700,000 8,225,657
- -----------------------------------------------------------
BANKS (MAJOR REGIONAL)-1.29%
First Union Bancorp, Sub. Deb.,
7.50%, 04/15/35 5,300,000 6,054,879
- -----------------------------------------------------------
BANKS (MONEY CENTER)-0.66%
Bankers Trust New York Corp.,
Gtd. Notes, 7.875%, 02/25/27 3,000,000 3,092,895
- -----------------------------------------------------------
BANKS (REGIONAL)-1.34%
HSBC Americas Inc., Sub. Notes,
7.00%, 11/01/06 1,000,000 1,020,520
- -----------------------------------------------------------
Mercantile Bancorp Inc., Unsec.
Sub. Notes, 7.30%, 06/15/07 5,000,000 5,264,650
- -----------------------------------------------------------
6,285,170
- -----------------------------------------------------------
BEVERAGES (NON-ALCOHOLIC)-3.57%
Coca-Cola Enterprises, Inc.,
Putable Notes, 7.24%,
06/20/20(b) 74,000,000 16,763,220
- -----------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-3.91%
Diamond Cable Communications
PLC (United Kingdom), Sr.
Yankee Disc. Notes, 11.75%,
12/15/05(c) 4,000,000 3,110,000
- -----------------------------------------------------------
EchoStar DBS Corp., Sr. Gtd.
Notes, 12.50%, 07/01/02 2,340,000 2,550,600
- -----------------------------------------------------------
Kabelmedia Holdings GmbH,
(Germany) Sr. Yankee Unsec.
Disc. Notes, 13.625%,
08/01/06(c) 1,400,000 1,029,000
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
BROADCASTING (TELEVISION, RADIO & CABLE)-(CONTINUED)
Rifkin Acquisition Partners
L.L.P., Sr. Sub. Notes,
11.125%, 01/15/06 $ 630,000 $ 699,300
- -----------------------------------------------------------
TCI Communications Inc., Deb.,
8.75%, 08/01/15 6,000,000 6,969,960
- -----------------------------------------------------------
TeleWest Communications PLC
(United Kingdom), Sr. Yankee
Disc. Deb., 11.00%,
10/01/07(c) 3,000,000 2,347,500
- -----------------------------------------------------------
United International Holdings,
Inc., Sr. Sec. Disc. Notes,
12.78%, 11/15/99(b) 2,000,000 1,650,000
- -----------------------------------------------------------
18,356,360
- -----------------------------------------------------------
CHEMICALS-1.51%
Nova Chemicals Ltd. (Canada),
Yankee Deb., 7.00%, 08/15/26 2,000,000 2,055,800
- -----------------------------------------------------------
Solutia Inc., Bonds, 6.72%,
10/15/37 3,500,000 3,561,355
- -----------------------------------------------------------
Sterling Chemicals, Inc., Sr.
Unsec. Sub. Notes, 11.75%,
08/15/06 1,420,000 1,455,500
- -----------------------------------------------------------
7,072,655
- -----------------------------------------------------------
CHEMICALS (SPECIALTY)-0.26%
Crain Industries, Inc., Sr.
Sub. Notes, 13.50%, 08/15/05 1,070,000 1,225,150
- -----------------------------------------------------------
COMMUNICATIONS EQUIPMENT-0.56%
Dialog Corp. PLC (United
Kingdom), Sr. Sub. Notes,
11.00%, 11/15/07
(Acquired 11/10/97; Cost
$1,500,000)(d) 1,500,000 1,563,750
- -----------------------------------------------------------
ProNet, Inc., Sr. Sub. Notes,
11.875%, 06/15/05 1,000,000 1,082,500
- -----------------------------------------------------------
2,646,250
- -----------------------------------------------------------
CONSUMER (JEWELRY, NOVELTIES & GIFTS)-0.22%
Commemorative Brands, Sr. Sub.
Notes, 11.00%, 01/15/07 1,000,000 1,007,500
- -----------------------------------------------------------
CONSUMER FINANCE-0.34%
Commercial Credit Co., Putable
Notes, 7.875%, 02/01/25 1,400,000 1,612,352
- -----------------------------------------------------------
CONTAINERS & PACKAGING (PAPER)-0.45%
BPC Holding Corp., Series B Sr.
Notes, 12.50%, 06/15/06 1,000,000 1,095,000
- -----------------------------------------------------------
MVE Inc., Sr. Sec. Notes,
12.50%, 02/15/02 1,000,000 1,002,500
- -----------------------------------------------------------
2,097,500
- -----------------------------------------------------------
</TABLE>
FS-57
<PAGE> 191
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
DISTRIBUTORS (FOOD & HEALTH)-0.39%
AmeriServ Food Co., Gtd. Sr.
Sub. Notes, 10.125%, 07/15/07 $ 1,750,000 $ 1,846,250
- -----------------------------------------------------------
ELECTRIC COMPANIES-2.58%
El Paso Electric Co.,
Series D Sec. 1st Mortgage
Bonds, 8.90%, 02/01/06 2,500,000 2,767,875
- -----------------------------------------------------------
Series E Sec. 1st Mortgage
Bonds, 9.40%, 05/01/11 4,600,000 5,201,680
- -----------------------------------------------------------
Western Resources Inc., Sr.
Notes, 7.125%, 08/01/09 4,000,000 4,119,360
- -----------------------------------------------------------
12,088,915
- -----------------------------------------------------------
ELECTRICAL EQUIPMENT-0.52%
Electronic Retailing Systems
International, Inc., Sr.
Disc. Notes, 13.25%,
02/01/04(c) 3,630,000 2,432,100
- -----------------------------------------------------------
ELECTRONICS (SEMICONDUCTORS)-0.25%
Advanced Micro Devices, Inc.,
Sr. Sec. Notes, 11.00%,
08/01/03 1,100,000 1,181,125
- -----------------------------------------------------------
ENTERTAINMENT-4.34%
Ascent Entertainment Group, Sr.
Disc. Notes, 11.875%,
12/15/04 (Acquired
12/17/97-12/18/97; Cost
$1,699,385)(c)(d) 3,000,000 1,755,000
- -----------------------------------------------------------
Time Warner, Inc.,
Deb., 9.15%, 02/01/23 8,500,000 10,493,250
- -----------------------------------------------------------
Unsec. Deb., 6.85%, 01/15/26 4,300,000 4,359,555
- -----------------------------------------------------------
Viacom, Inc., Sr. Notes, 7.75%,
06/01/05 3,650,000 3,751,142
- -----------------------------------------------------------
20,358,947
- -----------------------------------------------------------
FINANCIAL (DIVERSIFIED)-2.04%
Associates Corp. of North
America, Series B Sr. Deb.,
7.95%, 02/15/10 6,000,000 6,713,400
- -----------------------------------------------------------
U.S. West Capital Funding Inc.,
Gtd. Notes, 6.95%, 01/15/37 2,750,000 2,843,142
- -----------------------------------------------------------
9,556,542
- -----------------------------------------------------------
FOODS-3.06%
ConAgra Inc., Sr. Unsec. Notes,
7.125%, 10/01/26 6,100,000 6,500,404
- -----------------------------------------------------------
Del Monte Corp./Foods Co., Sr.
Unsec. Sub. Notes, 12.25%,
04/15/07 2,080,000 2,360,800
- -----------------------------------------------------------
Grand Metro Investment, Gtd.
Bonds, 7.45%, 04/15/35 5,000,000 5,484,650
- -----------------------------------------------------------
14,345,854
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
GAMING, LOTTERY & PARIMUTUEL COMPANIES-1.28%
Coast Hotels & Casinos Inc.,
Series B Sec. 1st Mortgage
Gtd. Notes, 13.00%, 12/15/02 $ 1,160,000 $ 1,316,600
- -----------------------------------------------------------
Showboat, Inc., 1st Mortgage
Notes, 9.25%, 05/01/08 2,000,000 2,170,000
- -----------------------------------------------------------
Venetian Casino Resort LLC,
Mortgage Notes, 12.25%,
11/15/04 (Acquired 11/06/97;
Cost $2,500,000)(d) 2,500,000 2,515,625
- -----------------------------------------------------------
6,002,225
- -----------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-0.87%
Tenet Healthcare Corp., Sr.
Notes, 8.00%, 01/15/05 4,000,000 4,080,000
- -----------------------------------------------------------
HEALTH CARE (LONG TERM CARE)-0.69%
Paragon Health Network, Inc.,
Sr. Sub Notes, 10.50%,
11/01/07 (Acquired 10/30/97;
Cost $2,118,851)(c)(d) 3,500,000 2,178,750
- -----------------------------------------------------------
Sun Healthcare Group, Inc., Sr.
Sub. Notes, 9.50%, 07/01/07
(Acquired 10/20/97; Cost
$1,036,250)(d) 1,000,000 1,035,000
- -----------------------------------------------------------
3,213,750
- -----------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS &
SUPPLIES)-0.24%
Dade International Inc., Series
B Sr. Sub. Notes, 11.125%,
05/01/06 1,000,000 1,110,000
- -----------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.26%
Dynacare Inc. (Canada), Sr.
Yankee Notes, 10.75%,
01/15/06 1,140,000 1,205,550
- -----------------------------------------------------------
HOMEBUILDING-0.17%
Continental Homes Holdings
Corp., Sr. Unsec. Gtd. Notes,
10.00%, 04/15/06 745,000 804,600
- -----------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.41%
Zeta Consumer Products, Sr.
Notes, 11.25%, 11/30/07
(Acquired 11/20/97; Cost
$1,900,000)(d) 1,900,000 1,942,750
- -----------------------------------------------------------
INSURANCE (LIFE/HEALTH)-1.22%
Americo Life Inc., Sr. Sub.
Notes, 9.25%, 06/01/05 1,000,000 1,027,500
- -----------------------------------------------------------
Torchmark Corp., Notes, 7.875%,
05/15/23 4,350,000 4,686,429
- -----------------------------------------------------------
5,713,929
- -----------------------------------------------------------
</TABLE>
FS-58
<PAGE> 192
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
INSURANCE (PROPERTY-CASUALTY)-1.59%
Terra Nova Holdings, Co.
(United Kingdom), Yankee Gtd.
Notes, 7.20%, 08/15/07 $ 2,000,000 $ 2,068,400
- -----------------------------------------------------------
USF&G Corp., Gtd. Bonds, 8.47%,
01/10/27 5,000,000 5,385,800
- -----------------------------------------------------------
7,454,200
- -----------------------------------------------------------
IRON & STEEL-0.59%
GS Industries, Inc., Sr. Gtd.
Notes, 12.00%, 09/01/04 1,000,000 1,098,750
- -----------------------------------------------------------
Gulf States Steel Corp., 1st
Mortgage Notes, 13.50%,
04/15/03 1,650,000 1,674,750
- -----------------------------------------------------------
2,773,500
- -----------------------------------------------------------
LODGING-HOTELS-2.26%
Hilton Hotels Corp., Notes,
7.20%, 12/15/09 5,000,000 5,040,500
- -----------------------------------------------------------
ITT Corp., Unsec. Gtd. Deb.,
7.375%, 11/15/15 3,350,000 3,442,293
- -----------------------------------------------------------
John Q. Hammons Hotels Inc.,
Sec. 1st Mortgage Notes,
9.75%, 10/01/05 2,000,000 2,130,000
- -----------------------------------------------------------
10,612,793
- -----------------------------------------------------------
MACHINERY (DIVERSIFIED)-1.95%
Caterpillar Inc., Deb., 9.375%,
08/15/11 5,000,000 6,326,150
- -----------------------------------------------------------
Elgin National Industries, Sr.
Notes, 11.00%, 11/01/07
(Acquired 11/03/97; Cost
$1,690,000)(d) 1,690,000 1,761,825
- -----------------------------------------------------------
Fairfield Manufacturing Co.,
Inc., Sr. Sub. Notes,
11.375%, 07/01/01 1,000,000 1,060,000
- -----------------------------------------------------------
9,147,975
- -----------------------------------------------------------
MANUFACTURING (SPECIALIZED)-0.48%
MMI Products Inc., Sr. Unsec.
Sub. Notes, 11.25%, 04/15/07 2,070,000 2,266,650
- -----------------------------------------------------------
METALS MINING-0.76%
Rio Algom Ltd. (Canada), Yankee
Unsec. Deb., 7.05%, 11/01/05 3,500,000 3,569,405
- -----------------------------------------------------------
NATURAL GAS-1.02%
Enron Corp., Notes, 6.75%,
08/01/09 2,500,000 2,530,175
- -----------------------------------------------------------
Ferrellgas Partners, Series B
Sr. Sec. Gtd. Notes, 9.375%,
06/15/06 2,100,000 2,236,500
- -----------------------------------------------------------
4,766,675
- -----------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-0.29%
United Stationer Supply, Sr.
Sub. Notes, 12.75%, 05/01/05 1,170,000 1,336,725
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
OIL (INTERNATIONAL INTEGRATED)-1.62%
Gulf Canada Resources, Ltd.
(Canada), Sr. Yankee Unsec.
Notes, 8.35%, 08/01/06 $ 5,100,000 $ 5,558,082
- -----------------------------------------------------------
Husky Oil Ltd. (Canada), Sr.
Yankee Notes, 7.125%,
11/15/06 2,000,000 2,054,840
- -----------------------------------------------------------
7,612,922
- -----------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-0.09%
Falcon Drilling Co., Inc.,
Series B Sr. Notes, 9.75%,
01/15/01 410,000 431,525
- -----------------------------------------------------------
OIL & GAS (EXPLORATION & PRODUCTION)-3.34%
Abraxas Petroleum Corp., Series
B Sr. Notes, 11.50%, 11/01/04 900,000 990,000
- -----------------------------------------------------------
Anadarko Petroleum Corp., Deb.,
7.25%, 03/15/25 5,395,000 5,758,569
- -----------------------------------------------------------
Centaur Mining & Exploration,
Ltd., Co. (Australia), Sr.
Gtd. Notes, 11.00%, 12/01/07
(Acquired 11/24/97; Cost
$2,500,000)(d) 2,500,000 2,525,000
- -----------------------------------------------------------
Southwest Royalties, Inc., Sr.
Gtd. Notes, 10.50%, 10/15/04
(Acquired 10/08/97; Cost
$2,550,849)(d) 2,540,000 2,527,300
- -----------------------------------------------------------
Talisman Energy, Inc. (Canada),
Yankee Deb., 7.125%, 06/01/07 3,750,000 3,872,850
- -----------------------------------------------------------
15,673,719
- -----------------------------------------------------------
OIL & GAS (REFINING & MARKETING)-1.05%
Sun Co., Inc., Deb., 9.00%,
11/01/24 4,000,000 4,922,240
- -----------------------------------------------------------
PAPER & FOREST PRODUCTS-0.47%
Pindo Deli Pulp & Paper, Gtd.
Notes, 10.75%, 10/01/07
(Acquired 10/14/97-10/16/97;
Cost $2,557,481)(d) 2,540,000 2,197,100
- -----------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-1.95%
AES Corp., Sr. Sub. Notes,
10.25%, 07/15/06 1,000,000 1,087,500
- -----------------------------------------------------------
Indiana Michigan Power, Sec.
Lease Obligation Bonds,
9.82%, 12/07/22 4,969,574 6,502,738
- -----------------------------------------------------------
Panda Global Energy Co.
(China), Sr. Yankee Sec. Gtd.
Notes, 12.50%, 04/15/04 1,720,000 1,573,800
- -----------------------------------------------------------
9,164,038
- -----------------------------------------------------------
</TABLE>
FS-59
<PAGE> 193
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
PUBLISHING (NEWSPAPERS)-2.02%
News America Holdings, Inc.,
Sr. Gtd. Deb., 9.25%,
02/01/13 $ 7,100,000 $ 8,446,941
- -----------------------------------------------------------
Sr. Gtd. Putable Bonds,
7.43%, 10/01/26 1,000,000 1,048,270
- -----------------------------------------------------------
9,495,211
- -----------------------------------------------------------
RAILROADS-0.62%
Norfolk Southern Corp., Putable
Bonds, 7.05%, 05/01/37 2,750,000 2,915,028
- -----------------------------------------------------------
RETAIL (FOOD CHAINS)-0.86%
Great Atlantic & Pacific Tea
Co., Inc. (Canada), Yankee
Gtd. Notes, 7.78%, 11/01/00
(Acquired 10/18/95; Cost
$3,900,000)(d) 3,900,000 4,028,330
- -----------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-0.43%
Big 5 Corp., Senior Notes,
10.88%, 11/15/07 (Acquired
11/07/97-11/24/97; Cost
$1,990,110)(d) 2,000,000 2,000,000
- -----------------------------------------------------------
RETAIL (SPECIALTY)-0.60%
CSK Auto Inc., Sr. Gtd. Sub.
Deb., 11.00%, 11/01/06 650,000 718,250
- -----------------------------------------------------------
Icon Health & Fitness, Series B
Sr. Sub. Notes, 13.00%,
07/15/02 1,200,000 1,347,000
- -----------------------------------------------------------
Wilson's-The Leather Experts,
Inc., Sr. Notes, 11.25%,
08/15/04 (Acquired 08/14/97;
Cost $760,000)(d) 760,000 752,400
- -----------------------------------------------------------
2,817,650
- -----------------------------------------------------------
RETAIL (SPECIALTY-APPAREL)-0.24%
J Crew Operating Corp., Sr.
Sub. Notes, 10.375%, 10/15/07
(Acquired 10/14/97; Cost
$1,255,000)(d) 1,255,000 1,116,950
- -----------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.56%
Sovereign Bancorp, Inc., Sub.
Notes, 8.00%, 03/15/03 2,500,000 2,634,300
- -----------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-1.04%
Laidlaw Inc. (Canada), Yankee
Deb., 6.72%, 10/01/27 2,000,000 2,031,700
- -----------------------------------------------------------
Pegasus Shipping Hellas, Co.
(Bermuda), Gtd. Sr. Mortgage
Notes, 11.875%, 11/15/04
(Acquired 11/19/97; Cost
$2,753,956)(d) 2,850,000 2,835,750
- -----------------------------------------------------------
4,867,450
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
SHIPPING-1.58%
Gearbulk Holding Ltd., Sr.
Notes, 11.25%, 12/01/04 $ 1,000,000 $ 1,102,500
- -----------------------------------------------------------
Hutchison Whampoa Ltd. (Cayman
Islands), Series D Sr. Gtd.
Unsec. Unsub. Deb., 6.988%,
08/01/37 (Acquired 12/15/97;
Cost $4,689,900)(d) 5,000,000 4,672,200
- -----------------------------------------------------------
Stena A.B.(Sweden), Sr. Yankee
Unsec. Notes, 10.50%,
12/15/05 1,500,000 1,638,750
- -----------------------------------------------------------
7,413,450
- -----------------------------------------------------------
SOVEREIGN DEBT-2.59%
Province of Manitoba (Canada),
Yankee Bonds, 7.75%, 07/17/16 7,500,000 8,585,250
- -----------------------------------------------------------
Province of Quebec (Canada),
Yankee Deb., 6.29% 03/06/26 3,500,000 3,574,025
- -----------------------------------------------------------
12,159,275
- -----------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-2.28%
Clearnet Communications
Inc.(Canada), Sr. Yankee
Unsec. Disc. Notes, 14.75%,
12/15/05(c) 920,000 737,150
- -----------------------------------------------------------
Nextel Communications, Sr.
Disc. Notes, 9.75%, 10/31/07
(Acquired 10/22/97-10/23/97;
Cost $3,061,031)(c)(d) 5,000,000 3,100,000
- -----------------------------------------------------------
Orion Network Systems, Inc.,
Sr. Notes, 11.25%,
01/15/07(e) 3,400,000 3,867,500
- -----------------------------------------------------------
Pricellular Wireless Corp., Sr.
Notes, 10.75%, 11/01/04 1,425,000 1,556,812
- -----------------------------------------------------------
Sygnet Wireless Inc., Sr.
Unsec. Notes, 11.50%,
10/01/06 1,320,000 1,432,200
- -----------------------------------------------------------
10,693,662
- -----------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-1.11%
Esprit Telecom Group PLC
(United Kingdom), Sr. Yankee
Notes, 11.50%, 12/15/07 1,500,000 1,552,500
- -----------------------------------------------------------
MCI Communications Corp.,
Putable Sr. Unsec. Deb.,
7.125%, 06/15/27 2,750,000 2,877,985
- -----------------------------------------------------------
PhoneTel Technologies, Inc.,
Sr. Unsec. Gtd. Notes,
12.00%, 12/15/06 740,000 771,450
- -----------------------------------------------------------
5,201,935
- -----------------------------------------------------------
TELEPHONE-0.24%
Hermes Europe Railtel BV
(Netherlands), Sr. Yankee
Notes, 11.50%, 08/15/07
(Acquired 08/14/97; Cost
$1,006,125)(d) 990,000 1,103,850
- -----------------------------------------------------------
</TABLE>
FS-60
<PAGE> 194
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
TRUCKERS-0.49%
Travelcenters of America Inc.,
Sr. Gtd. Unsec. Sub. Deb.,
10.25%, 04/01/07 $ 2,180,000 $ 2,299,900
- -----------------------------------------------------------
WASTE MANAGEMENT-0.99%
Allied Waste Industries, Inc.,
Sr. Disc. Notes, 11.30%,
06/01/07 (Acquired 05/01/97;
Cost $2,931,642)(c)(d) 4,930,000 3,487,975
- -----------------------------------------------------------
Norcal Waste Systems Inc.,
Series B Sr. Gtd. Notes,
13.50%, 11/15/05 1,000,000 1,155,000
- -----------------------------------------------------------
4,642,975
- -----------------------------------------------------------
Total U.S. Dollar Denominated
Non-Convertible Bonds & Notes 328,665,198
- -----------------------------------------------------------
U.S. DOLLAR DENOMINATED CONVERTIBLE
BONDS & NOTES-1.28%
COMPUTERS (PERIPHERALS)-0.29%
EMC Corp., Conv. Sub. Notes,
3.25%, 03/15/02 (Acquired
03/06/97; Cost $1,000,000)(d) 1,000,000 1,349,750
- -----------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.43%
Omnicare, Inc., Sub. Deb.,
5.00%, 12/01/07 (Acquired
12/04/97; Cost $2,000,000)(d) 2,000,000 2,030,000
- -----------------------------------------------------------
MANUFACTURING (SPECIALIZED)-0.29%
U.S. Filter Corp., Conv. Sub.
Notes, 6.00%, 09/15/05 800,000 1,373,528
- -----------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-0.27%
CUC International, Inc., Conv.
Sub. Notes, 3.00%, 02/15/02
(Acquired 02/05/97; Cost
$1,000,000)(d) 1,000,000 1,255,940
- -----------------------------------------------------------
Total U.S. Dollar
Denominated Convertible
Bonds & Notes 6,009,218
- -----------------------------------------------------------
NON-U.S. DOLLAR DENOMINATED
NON-CONVERTIBLE BONDS & NOTES(f)-6.58%
CANADA-4.92%
Bank of Montreal (Banks-Money Center),
Sub. Deb., 7.92%, 07/31/12 CAD
4,000,000 3,154,459
- -----------------------------------------------------------
Bell Canada (Telephone), Unsec.
Deb., 10.875, 10/11/04 3,000,000 2,647,885
- -----------------------------------------------------------
Bell Mobility Cellular Inc.
(Telecommunications-Cellular/Wireless),
Deb., 6.55%, 06/02/08 2,250,000 1,584,959
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
CANADA-(CONTINUED)
Clearnet Communications Inc.
(Telecommunications-Cellular/Wireless),
Sr. Disc. Notes, 11.75%,
08/13/07(c) $ 8,200,000 $ 3,643,679
- -----------------------------------------------------------
Microcell Telecommunications
(Telecommunications-Cellular/Wireless),
Sr. Disc. Notes, 11.125%,
10/15/07 (Acquired 10/08/97;
Cost $1,517,301)(c)(d) 3,500,000 1,359,295
- -----------------------------------------------------------
NAV Canada (Services-Commercial
& Consumer), Bonds, 7.40%,
06/01/27 2,500,000 1,996,606
- -----------------------------------------------------------
Teleglobe Canada, Inc.
(Telephone), Unsec. Deb.,
8.35%, 06/20/03 5,000,000 3,882,859
- -----------------------------------------------------------
Trans-Canada Pipelines (Natural
Gas), Series Q Deb., 10.625%,
10/20/09 1,750,000 1,665,834
- -----------------------------------------------------------
Unsec. Notes, 8.55%, 02/01/06 3,000,000 2,430,209
- -----------------------------------------------------------
Westcoast Energy, Inc.
(Oil & Gas-Exploration &
Production), Deb., 6.45%, 12/18/06
(Acquired 12/03/96; Cost
$739,252)(d) 1,000,000 717,540
- -----------------------------------------------------------
23,083,325
- -----------------------------------------------------------
GERMANY-0.41%
LKB Global (Financial-Diversified),
Gtd. Notes, 6.00%, 01/25/06
DEM 3,300,000 1,901,306
- -----------------------------------------------------------
NEW ZEALAND-0.49%
International Bank for Reconstruction &
Development (Banks-Money Center),
Sr. Notes, 6.77%, 08/20/07(b)
NZD 8,000,000 2,309,547
- -----------------------------------------------------------
UNITED KINGDOM-0.76%
Sutton Bridge Financial
Ltd. (Financial-Diversified), Gtd.
Eurobonds,
8.625%, 06/30/22 (Acquired 05/29/97;
Cost $3,260,479)(d)
GBP 2,000,000 3,551,582
- -----------------------------------------------------------
Total Non-U.S. Dollar Denominated
Non-Convertible Bonds & Notes 30,845,760
- -----------------------------------------------------------
NON-U.S. DOLLAR DENOMINATED
CONVERTIBLE BONDS & NOTES(f)-5.10%
GERMANY-1.07%
Daimler-Benz A.G. (Automobiles), Conv. Gtd.
Unsub. Eurobonds, 4.125%, 07/05/03
DEM 6,440,000 $ 5,011,673
- -----------------------------------------------------------
JAPAN-3.05%
Matsushita Electric Industrial Co. Ltd.
(Electrical Equipment), Conv. Bonds,
1.30%, 03/29/02
JPY 250,000,000 2,378,992
- -----------------------------------------------------------
Sony Corp. (Electrical
Equipment),
Conv. Deb., 1.40%, 03/31/05 465,000,000 5,288,543
- -----------------------------------------------------------
</TABLE>
FS-61
<PAGE> 195
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
JAPAN-(CONTINUED)
Toyota Motor Corp.
(Automobiles),
Conv. Bonds, 1.20%, 01/28/98 $455,000,000 $ 6,655,816
- -----------------------------------------------------------
14,323,351
- -----------------------------------------------------------
SWITZERLAND-0.24%
Yamada Denki Co. Ltd.
(Retail-Computers & Electronics),
Unsec. Conv. Notes, 0.25%, 03/31/00
CHF 1,700,000 1,116,661
- -----------------------------------------------------------
UNITED KINGDOM-0.74%
British Airport Authority PLC (Airlines),
Conv. Bonds,
5.75%, 03/29/06
GBP 2,000,000 3,465,359
- -----------------------------------------------------------
Total Non-U.S. Dollar Denominated
Convertible Bonds & Notes 23,917,044
- -----------------------------------------------------------
NON-U.S. DOLLAR DENOMINATED
GOVERNMENT BONDS & NOTES-9.84%(f)
CANADA-0.88%
Ontario Province, Sr. Unsec. Unsub. Global
Bonds, 8.00%, 03/11/03
CAD 5,350,000 4,148,183
- -----------------------------------------------------------
ITALY-0.51%
Republic of Italy, Conv. Eurobonds,
6.50%, 06/28/01
ITL 3,050,000,000 2,381,466
- -----------------------------------------------------------
NEW ZEALAND-1.69%
Federal National Mortgage Association,
Notes, 7.25%, 06/20/02
NZD 2,900,000 1,647,547
- -----------------------------------------------------------
New Zealand Government,
Bonds, 10.00%, 03/15/02 6,500,000 4,134,626
- -----------------------------------------------------------
Bonds, 8.00%, 04/15/04 3,500,000 2,119,266
- -----------------------------------------------------------
7,901,439
- -----------------------------------------------------------
SWEDEN-1.71%
Swedish Government,
Bonds, 10.25%, 05/05/03
SEK 19,000,000 2,884,973
- -----------------------------------------------------------
Bonds, 6.00%, 02/09/05 20,000,000 2,540,750
- -----------------------------------------------------------
Bonds, 6.50%, 10/25/06 20,000,000 2,611,720
- -----------------------------------------------------------
8,037,443
- -----------------------------------------------------------
UNITED KINGDOM-5.05%
Federal National Mortgage Association, Sr.
Unsec. Notes, 6.875%, 06/07/02
GBP 2,400,000 3,953,662
- -----------------------------------------------------------
United Kingdom Treasury,
Bonds, 8.00%, 12/07/00 1,500,000 2,548,985
- -----------------------------------------------------------
Bonds, 7.50%, 12/07/06
GBP 3,100,000 5,483,492
- -----------------------------------------------------------
Gtd. Notes, 7.25%, 03/30/98 5,600,000 9,201,483
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT(a) VALUE
<S> <C> <C>
UNITED KINGDOM-(CONTINUED)
Gtd. Notes, 7.00%, 11/06/01 $ 1,500,000 $ 2,492,397
- -----------------------------------------------------------
23,680,019
- -----------------------------------------------------------
Total Non-U.S. Dollar Denominated
Government Bonds & Notes 46,148,550
- -----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
<S> <C> <C>
DOMESTIC COMMON STOCK-0.03%
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.03%
Nextel Communications, Inc.(g) 4,601 $ 119,626
- --------------------------------------------------------------
DOMESTIC CONVERTIBLE PREFERRED STOCKS-3.33%
BANKS (REGIONAL)-0.68%
Westpac Banking Corp. STRYPES
Trust-$3.135 Conv. Pfd. 95,000 3,182,500
- --------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-0.26%
Loral Space & Communications-$3.00
Conv. Pfd. (Acquired 11/01/96;
Cost $1,000,000)(d) 20,000 1,226,820
- --------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-0.35%
Microsoft Corp., Series A-$2.196
Conv. Pfd. 18,000 1,617,750
- --------------------------------------------------------------
ELECTRIC COMPANIES-0.27%
Houston Industries Inc.-$3.22 Conv.
Pfd. 22,000 1,255,375
- --------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-0.53%
SunAmerica, Inc.-$3.188 Conv. Pfd. 53,350 2,484,109
- --------------------------------------------------------------
FOODS-0.34%
Ralston Purina Co.-$4.34 Conv. Pfd. 23,000 1,601,375
- --------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-0.42%
Medpartners Inc.-$1.44 Conv. Pfd. 90,000 1,980,000
- --------------------------------------------------------------
OIL & GAS (REFINING & MARKETING)-0.27%
Tosco Financing Trust-$2.875 Conv.
Pfd. (Acquired 12/10/96-12/11/96;
Cost $1,006,950)(d) 20,000 1,281,500
- --------------------------------------------------------------
POWER PRODUCERS (INDEPENDENT)-0.21%
Citizens Utilities Co.-$2.50 Conv.
Pfd. 21,100 1,007,525
- --------------------------------------------------------------
Total Domestic Convertible Preferred Stocks 15,636,954
- --------------------------------------------------------------
FOREIGN STOCKS & OTHER EQUITY INTERESTS-0.40%
ELECTRIC COMPANIES-0.40%
National Power PLC-ADR (United
Kingdom) 24,300 962,888
- --------------------------------------------------------------
PowerGen PLC-ADR (United Kingdom) 17,300 919,062
- --------------------------------------------------------------
Total Foreign Stocks & Other Equity
Interests 1,881,950
- --------------------------------------------------------------
WARRANTS-0.06%
BROADCASTING (TELEVISION, RADIO & CABLE)-0.00%
Wireless One, Inc., expiring
10/19/00(h) 2,670 0
- --------------------------------------------------------------
</TABLE>
FS-62
<PAGE> 196
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRICAL EQUIPMENT-0.02%
Electronic Retailing Systems,
expiring 01/24/98(h) 3,630 $ 72,600
- --------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-0.01%
MVE Inc., expiring 02/15/02(h) 1,000 30,000
- --------------------------------------------------------------
METAL FABRICATORS-0.00%
Gulf States Steel Corp., expiring
04/15/03(h) 1,650 7,425
- --------------------------------------------------------------
PERSONAL CARE-0.01%
IHF Capital Inc., expiring
11/14/99(h) (Acquired
11/04/94-12/07/94; cost $0)(d)(h) 1,200 60,600
- --------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.02%
Clearnet Communications Inc.
(Canada), expiring 09/15/05(h) 5,874 55,803
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-(CONTINUED)
Orion Network Systems, Inc.,
expiring 01/15/07(h) 3,400 $ 47,600
- --------------------------------------------------------------
103,403
- --------------------------------------------------------------
Total Warrants 274,028
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (a)
<S> <C> <C>
REPURCHASE AGREEMENT(i)-1.11%
Smith Barney, Inc., 6.75%,
01/02/98(j) $ 5,213,923 5,213,923
- --------------------------------------------------------------
TOTAL INVESTMENTS-97.80% 458,712,251
- --------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-2.20% 10,317,580
- --------------------------------------------------------------
NET ASSETS-100.00% $469,029,831
- --------------------------------------------------------------
</TABLE>
Abbreviations:
ADR - American Depositary Receipts
CAD - Canadian Dollar
Cert. - Certificates
CHF - Swiss Franc
Conv. - Convertible
Deb. - Debentures
DEM - German Deutschemark
Disc. - Discounted
GBP - British Pound
Gtd. - Guaranteed
ITL - Italian Lira
Pfd. - Preferred
PRIDES - Preferred Redemption Increase Dividend Equity Security
JPY - Japanese Yen
NZD - New Zealand Dollar
Sec. - Secured
SEK - Swedish Krona
STRYPES - Structured Yield Product Exchangeable for Stock
Sr. - Senior
Sub. - Subordinated
Unsec. - Unsecured
Unsub. - Unsubordinated
Notes to Schedule of Investments:
(a) Principal amount is in U.S. Dollars, except as indicated by note (f).
(b) Zero coupon bond issued at a discount. The interest rate shown represents
the rate of original issue discount.
(c) Discounted bond at purchase. The interest rate represents the coupon rate at
which the bond will accrue at a specified future date.
(d) Restricted Security. May be resold to qualified institutional buyers in
accordance with the provisions of Rule 144A under the Securities Act of
1933, as amended. The valuation of these securities has been determined in
accordance with procedures established by the Board of Trustees. The
aggregate market value of these securities at 12/31/97 was $55,932,582 which
represented 11.93% of the Fund's net assets.
(e) Issued as a unit. Each unit also includes warrants to purchase 0.8444 shares
of common stock per warrant.
(f) Foreign denominated security. Par value and coupon are denominated in
currency of country indicated.
(g) Non-income producing security.
(h) Non-income producing security acquired as part of a unit with or in exchange
for other securities.
(i) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(j) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$400,150,000. Collateralized by $395,097,000 U.S. Government obligations, 0%
to 13.875%, due 01/07/98 to 12/15/43 with an aggregate market value at
12/31/97 of $408,000,323.
See Notes to Financial Statements.
FS-63
<PAGE> 197
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$435,939,899) $458,712,251
- ---------------------------------------------------------
Foreign currencies, at value (cost
$301,698) 301,263
- ---------------------------------------------------------
Receivables for:
Forward currency contracts 2,502,706
- ---------------------------------------------------------
Fund shares sold 1,863,627
- ---------------------------------------------------------
Interest and dividends 7,868,466
- ---------------------------------------------------------
Investment for deferred compensation plan 72,139
- ---------------------------------------------------------
Other assets 107,800
- ---------------------------------------------------------
Total assets 471,428,252
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 1,064,087
- ---------------------------------------------------------
Dividends to shareholders 584,641
- ---------------------------------------------------------
Deferred compensation plan 72,139
- ---------------------------------------------------------
Accrued advisory fees 172,603
- ---------------------------------------------------------
Accrued distribution fees 342,659
- ---------------------------------------------------------
Accrued administrative service fees 6,104
- ---------------------------------------------------------
Accrued transfer agent fees 60,223
- ---------------------------------------------------------
Accrued trustees' fees 3,760
- ---------------------------------------------------------
Accrued operating expenses 92,205
- ---------------------------------------------------------
Total liabilities 2,398,421
- ---------------------------------------------------------
Net assets applicable to shares outstanding $469,029,831
=========================================================
NET ASSETS:
Class A $340,607,691
=========================================================
Class B $125,870,516
=========================================================
Class C $ 2,551,624
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE
Class A 39,748,143
- ---------------------------------------------------------
Class B 14,719,515
- ---------------------------------------------------------
Class C 298,700
- ---------------------------------------------------------
CLASS A:
Net asset value and redemption price per
share $ 8.57
- ---------------------------------------------------------
Offering price per share:
(Net asset value of $8.57
divided by 95.25%) $ 9.00
- ---------------------------------------------------------
CLASS B:
Net asset value and offering price per
share $ 8.55
- ---------------------------------------------------------
CLASS C:
Net asset value and offering price per
share $ 8.54
- ---------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 29,179,932
- ---------------------------------------------------------
Dividends (net of $24,339 foreign
withholding tax) 807,572
- ---------------------------------------------------------
Total investment income 29,987,504
- ---------------------------------------------------------
EXPENSES:
Advisory fees 1,801,746
- ---------------------------------------------------------
Administrative service fees 81,464
- ---------------------------------------------------------
Custodian fees 90,793
- ---------------------------------------------------------
Trustees' fees 11,852
- ---------------------------------------------------------
Distribution fees -- Class A 749,562
- ---------------------------------------------------------
Distribution fees -- Class B 1,003,075
- ---------------------------------------------------------
Distribution fees -- Class C 3,040
- ---------------------------------------------------------
Transfer agent fees -- Class A 419,508
- ---------------------------------------------------------
Transfer agent fees -- Class B 145,173
- ---------------------------------------------------------
Transfer agent fees -- Class C 440
- ---------------------------------------------------------
Other 209,214
- ---------------------------------------------------------
Total expenses 4,515,867
- ---------------------------------------------------------
Less: Expenses paid indirectly (11,734)
- ---------------------------------------------------------
Net expenses 4,504,133
- ---------------------------------------------------------
Net investment income 25,483,371
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENT
SECURITIES, FOREIGN CURRENCY TRANSACTIONS, FORWARD
CURRENCY CONTRACTS AND FUTURES CONTRACTS:
Net realized gain (loss) from:
Investment securities 10,189,229
- ---------------------------------------------------------
Foreign currency transactions (1,785,693)
- ---------------------------------------------------------
Forward currency contracts 4,303,382
- ---------------------------------------------------------
Futures contracts (1,794,375)
- ---------------------------------------------------------
10,912,543
- ---------------------------------------------------------
Net unrealized appreciation (depreciation)
of:
Investment securities 7,163,467
- ---------------------------------------------------------
Foreign currency transactions (27,949)
- ---------------------------------------------------------
Forward currency contracts 1,601,096
- ---------------------------------------------------------
8,736,614
- ---------------------------------------------------------
Net gain from investment securities,
foreign currency transactions, forward
currency contracts and futures
contracts 19,649,157
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $ 45,132,528
- ---------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
FS-64
<PAGE> 198
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 25,483,371 $ 22,816,117
- --------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currency transactions, forward currency contracts and
futures contracts 10,912,543 2,116,227
- --------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities,
foreign currency transactions and forward currency
contracts 8,736,614 4,238,364
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 45,132,528 29,170,708
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (18,740,017) (19,414,227)
- --------------------------------------------------------------------------------------------
Class B (5,379,787) (4,277,769)
- --------------------------------------------------------------------------------------------
Class C (8,381) --
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (3,481,635) --
- --------------------------------------------------------------------------------------------
Class B (1,280,178) --
- --------------------------------------------------------------------------------------------
Class C (19,105) --
- --------------------------------------------------------------------------------------------
Share transactions-net:
Class A 42,455,896 31,245,815
- --------------------------------------------------------------------------------------------
Class B 36,284,875 39,218,171
- --------------------------------------------------------------------------------------------
Class C 2,539,241
- --------------------------------------------------------------------------------------------
Net increase in net assets 97,503,437 75,942,698
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 371,526,394 295,583,696
============================================================================================
End of period $469,029,831 $371,526,394
- --------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Shares of beneficial interest $441,939,444 $360,736,285
- --------------------------------------------------------------------------------------------
Undistributed net investment income (57,239) 33,129
- --------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from sales of
investment securities, foreign currency transactions,
forward currency contracts and futures contracts 1,908,862 (5,745,170)
- --------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currency transactions and forward currency contracts 25,238,764 16,502,150
- --------------------------------------------------------------------------------------------
$469,029,831 $371,526,394
============================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Income Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of nine separate series portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers three different classes of shares: the Class A shares, Class B
shares and the Class C shares. The new Class C shares commenced sales on August
4, 1997. Class A shares are sold with a front-end sales charge. The Class B and
Class C shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to seek to achieve a high level of current income consistent with reasonable
concern for safety of principal by investing primarily in fixed rate corporate
debt and U.S. Government obligations.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
FS-65
<PAGE> 199
A. Security Valuations-Debt obligations (including convertible bonds) are
valued on the basis of prices provided by an independent pricing service.
Prices provided by the pricing service may be determined without exclusive
reliance on quoted prices, and may reflect appropriate factors such as
institution-size trading in similar groups of securities, developments
related to special securities, yield, quality, coupon rate, maturity, type
of issue, individual trading characteristics and other market data.
Investment securities for which prices are not provided by the pricing
service and which are listed or traded on an exchange (except convertible
bonds) are valued at the last sales price on the exchange where the security
is principally traded or, lacking any sales on a particular day, at the mean
between the closing bid and asked prices on that day unless the Board of
Trustees, or persons designated by the Board of Trustees, determines that
the over-the-counter quotations more closely reflect the current market
value of the security. Securities traded in the over-the-counter market,
except (i) securities priced by the pricing service, (ii) securities for
which representative exchange prices are available, and (iii) securities
reported in the NASDAQ National Market System, are valued at the mean
between representative last bid and asked prices obtained from an electronic
quotation reporting system, if such prices are available, or from
established market makers. Each security reported in the NASDAQ National
Market System is valued at the last sales price on the valuation date or
absent a last sales price, at the mean of the closing bid and asked prices.
Securities for which market quotations are either not readily available or
are questionable are valued at fair value as determined in good faith by or
under the supervision of the Trust's officers in a manner specifically
authorized by the Board of Trustees. Short-term obligations having 60 days
or less to maturity are valued at amortized cost which approximates market
value. Generally, trading in foreign securities, as well as corporate bonds
and U.S. Government securities, is substantially completed each day at
various times prior to the close of the New York Stock Exchange. The values
of such securities used in computing the net asset value of the Fund's
shares are determined as of such times. Foreign currency exchange rates are
also generally determined prior to the close of the New York Stock Exchange.
Occasionally, events affecting the values of such securities and such
exchange rates may occur between the times at which they are determined and
the close of the New York Stock Exchange which will not be reflected in the
computation of the Fund's net asset value. If events materially affecting
the value of such securities occur during such period, then these securities
will be valued at their fair value as determined in good faith by or under
the supervision of the Board of Trustees.
B. Foreign Currency Translations-Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions.
C. Foreign Currency Contracts-A foreign currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock-in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably. Outstanding contracts at December 31, 1997 were as follows:
<TABLE>
<CAPTION>
Contract to
Settlement ------------------------------- Unrealized
Date Deliver Receive Value Appreciation
---------- ------------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
3/10/98 CHF 1,630,000 $1,131,866 $1,124,266 $ 7,600
2/20/98 DEM 8,000,000 4,674,536 4,460,092 214,444
3/2/98 DEM 3,700,000 2,133,672 2,063,917 69,755
1/30/98 GBP 4,300,000 7,182,720 7,090,928 91,792
2/27/98 GBP 7,150,000 11,947,150 11,831,436 115,714
3/31/98 GBP 5,600,000 9,314,200 9,309,535 4,665
1/14/98 JPY 114,500,000 958,159 876,943 81,216
1/20/98 JPY 300,000,000 2,509,410 2,297,687 211,723
2/6/98 JPY 669,000,000 5,565,724 5,123,968 441,756
3/5/98 JPY 718,000,000 5,660,675 5,499,476 161,199
2/18/98 NZD 14,200,000 8,846,600 8,256,202 590,398
3/19/98 NZD 3,500,000 2,037,000 2,036,462 538
1/29/98 SEK 61,000,000 8,201,129 7,689,223 511,906
----------- ----------- ----------
$70,162,841 $67,660,135 $2,502,706
=========== =========== ==========
</TABLE>
D. Securities Transactions, Investment Income and Distributions-Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date. It is the policy of the Fund to declare daily dividends
from net investment income. Such dividends are paid monthly. Distributions
from net realized capital gains, if any, are recorded on ex-dividend date and
are paid annually subject to restrictions noted in section "E" below. On
December 31, 1997, undistributed net investment income was decreased by
$1,445,554, undistributed net realized gain(loss) increased by $1,522,407 and
paid-in-capital decreased by $76,853 in order to comply with the requirements
of the American Institute of Certified Public Accountants Statement of
Position 93-2. Net assets of the Fund were unaffected by the
reclassifications discussed above.
E. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
F. Expenses -- Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses which are attributable to more than one class are allocated among
the classes.
FS-66
<PAGE> 200
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays AIM an advisory fee at an annual rate of 0.50% of the
first $200 million of the Fund's average daily net assets, plus 0.40% of the
Fund's average daily net assets in excess of $200 million to and including $500
million, plus 0.35% of the Fund's average daily net assets in excess of $500
million to and including $1 billion, plus 0.30% of the Fund's average daily net
assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended December 31, 1997, AIM
was reimbursed $81,464 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the year ended December 31, 1997, the
Fund paid AFS $352,055 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted
distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares and Class C shares (the "Class A and C Plan"), and the
Fund's Class B shares (the "Class B Plan") (collectively, the "Plans"). The
Fund, pursuant to the Class A and C Plan, pays AIM Distributors compensation at
an annual rate of 0.25% of the average daily net assets of the Class A shares
and 1.00% of the average daily net assets of Class C shares. The Fund pursuant
to the Class B Plan, pays AIM Distributors compensation at an annual rate of
1.00% of the average daily net assets attributable to the Class B shares. Of
these amounts, the Fund may pay a service fee of 0.25% of the average daily net
assets of the Class A, Class B or C shares to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own the appropriate class of shares of the Fund. Any
amounts not paid as a service fee by the Class B or C shares under the Plans
would constitute an asset-based sales charge. The Plans also impose a cap on the
total sales charges, including asset-based sales charges that may be paid by the
respective classes. AIM Distributors may, from time to time, assign, transfer,
or pledge to one or more designees, its rights to all or a designated portion of
(a) compensation received by AIM Distributors from the Fund pursuant to the
Class B Plan (but not AIM Distributors' duties and obligations pursuant to the
Class B Plan) and (b) any contingent deferred sales charges received by AIM
Distributors related to the Class B shares. During the year ended December 31,
1997 for the Class A shares and Class B shares, and the period August 4, 1997
(date sales commenced) through December 31, 1997 for the Class C shares, the
Class A, Class B and Class C shares paid AIM Distributors $749,562, $1,003,075
and $3,040, respectively, as compensation under the Plans.
AIM Distributors received commissions of $203,261 from sales of the Class A
shares of the Fund during the year ended December 31, 1997. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1997,
AIM Distributors received $45,242 in contingent deferred sales charges imposed
on redemptions of Fund shares. Certain officers and trustees of the Trust are
officers and directors of AIM, AIM Distributors and AFS.
During the year ended December 31, 1997, the Fund paid legal fees of $5,159
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
AIM has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses related to pricing services used by the Fund which reduced the
Fund's expenses by $1,501 during the year ended December 31, 1997. Also during
the year ended December 31, 1997 the Fund received reductions in transfer agency
fees from AFS (an affiliate of AIM) and reductions in custodian fees of $4,486
and $5,747, respectively, under expense offset arrangements. The effect of the
above arrangements resulted in a reduction of the Fund's total expenses of
$11,734 during the year ended December 31, 1997.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 15, 1997, the Fund was
limited to borrowing up to the lesser of (i) $325,000,000 or (ii) the limits set
by its prospectus for borrowings. During the year ended December
31, 1997, the Fund did not borrow under the line
of credit agreement. The funds which are parties to the line of credit
are charged a commitment fee of 0.05% on the unused balance
of the committed line. The commitment fee is allocated among such
funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1997 was
$288,736,048 and $211,539,995, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
on a tax basis as of December 31, 1997 was as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $28,297,995
- -----------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (5,525,643)
- -----------------------------------------------------------
Net unrealized appreciation of investment
securities $22,772,352
- -----------------------------------------------------------
Investments have the same cost for tax and financial
statement purposes.
</TABLE>
FS-67
<PAGE> 201
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Sold:
Class A 12,161,983 $101,688,372 10,956,910 $87,131,342
- ------------------------------------------------------------------------------------- -----------------------
Class B 6,428,479 53,514,758 7,662,222 60,657,835
- ------------------------------------------------------------------------------------- -----------------------
Class C* 309,134 2,628,227 -- --
- ------------------------------------------------------------------------------------- -----------------------
Issued as reinvestment of dividends:
Class A 1,967,802 16,363,229 1,985,876 15,762,291
- ------------------------------------------------------------------------------------- -----------------------
Class B 490,120 4,073,672 357,055 2,833,327
- ------------------------------------------------------------------------------------- -----------------------
Class C* 1,676 14,278 -- --
- ------------------------------------------------------------------------------------- -----------------------
Reacquired:
Class A (9,099,096) (75,595,705) (8,997,073) (71,647,818)
- ------------------------------------------------------------------------------------- -----------------------
Class B (2,573,466) (21,303,555) (3,079,249) (24,272,991)
- ------------------------------------------------------------------------------------- -----------------------
Class C* (12,110) (103,264) -- --
- ------------------------------------------------------------------------------------- -----------------------
9,674,522 $81,280,012 8,885,741 $70,463,986
===================================================================================== =======================
</TABLE>
* Class C shares commenced sales on August 4, 1997.
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A outstanding
during each of the years in the five-year period ended December 31, 1997, for a
share of Class B outstanding during each of the years in the four-year period
ended December 31, 1997 and the period September 7, 1993 (date sales commenced)
through December 31, 1993 and for a share of Class C outstanding during the
period August 4, 1997 (date sales commenced) through December 31, 1997.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.24 $ 8.17 $ 7.20 $ 8.45 $ 8.03
- ------------------------------------------------------ -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.55 0.57 0.58 0.58 0.60
- ------------------------------------------------------ -------- -------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) 0.39 0.09 1.00 (1.22) 0.61
- ------------------------------------------------------ -------- -------- -------- -------- --------
Total from investment operations 0.94 0.66 1.58 (0.64) 1.21
- ------------------------------------------------------ -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.52) (0.59) (0.61) (0.49) (0.60)
- ------------------------------------------------------ -------- -------- -------- -------- --------
Distributions from net realized gains (0.09) -- -- (0.01) (0.19)
- ------------------------------------------------------ -------- -------- -------- -------- --------
Return of capital -- -- -- (0.11) --
- ------------------------------------------------------ -------- -------- -------- -------- --------
Total distributions (0.61) (0.59) (0.61) (0.61) (0.79)
- ------------------------------------------------------ -------- -------- -------- -------- --------
Net asset value, end of period $ 8.57 $ 8.24 $ 8.17 $ 7.20 $ 8.45
- ------------------------------------------------------ -------- -------- -------- -------- --------
Total return(a) 11.92% 8.58% 22.77% (7.65)% 15.38%
- ------------------------------------------------------ -------- -------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $340,608 $286,183 $251,280 $201,677 $244,168
- ------------------------------------------------------ -------- -------- -------- -------- --------
Ratio of expenses to average net assets 0.94%(b)(c) 0.98% 0.98% 0.98% 0.98%
- ------------------------------------------------------ -------- -------- -------- -------- --------
Ratio of net investment income to average net assets 6.55%(b) 7.13% 7.52% 7.53% 7.01%
- ------------------------------------------------------ -------- -------- -------- -------- --------
Portfolio turnover rate 54% 80% 227% 185% 99%
- ------------------------------------------------------ -------- -------- -------- -------- --------
</TABLE>
(a) Does not deduct sales charges.
(b) Ratios are based on average net assets of $299,824,848.
(c) Includes indirectly paid expenses. Excluding indirectly paid expenses, the
ratio of expenses to average net assets would have remained the same.
FS-68
<PAGE> 202
<TABLE>
<CAPTION>
CLASS B CLASS C
----------------------------------------------------- -------
1997 1996 1995 1994 1993 1997
-------- ------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.23 $ 8.15 $ 7.18 $ 8.43 $ 8.95 $ 8.38
- ------------------------------------------------------- -------- ------- ------- ------- ------ -------
Income from investment operations:
Net investment income 0.48 0.50 0.53 0.52 0.19 0.19
- ------------------------------------------------------- -------- ------- ------- ------- ------ -------
Net gains (losses) on securities (both realized and
unrealized) 0.38 0.11 0.98 (1.23) (0.34) 0.22
- ------------------------------------------------------- -------- ------- ------- ------- ------ -------
Total from investment operations 0.86 0.61 1.51 (0.71) (0.15) 0.41
- ------------------------------------------------------- -------- ------- ------- ------- ------ -------
Less distributions:
Dividends from net investment income (0.45) (0.53) (0.54) (0.42) (0.18) (0.16)
- ------------------------------------------------------- -------- ------- ------- ------- ------ -------
Distributions from net realized gains (0.09) -- -- (0.01) (0.19) (0.09)
- ------------------------------------------------------- -------- ------- ------- ------- ------ -------
Return of capital -- -- -- (0.11) -- --
- ------------------------------------------------------- -------- ------- ------- ------- ------ -------
Total distributions (0.54) (0.53) (0.54) (0.54) (0.37) (0.25)
- ------------------------------------------------------- -------- ------- ------- ------- ------ -------
Net asset value, end of period $ 8.55 $ 8.23 $ 8.15 $ 7.18 $ 8.43 $ 8.54
======================================================= ======== ======= ======= ======= ====== =======
Total return(a) 10.89% 7.87% 21.72% (8.46)% (0.75)% 4.96%
======================================================= ======== ======= ======= ======= ====== =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $125,871 $85,343 $44,304 $12,321 $3,602 $ 2,552
======================================================= ======== ======= ======= ======= ====== =======
Ratio of expenses to average net assets 1.69%(b)(c) 1.80% 1.79% 1.83%(d) 1.75%(d)(e) 1.69%(b)(c)(e)
======================================================= ====== ======= ======= ======= ====== =======
Ratio of net investment income to average net assets 5.80%(b) 6.30% 6.71% 6.69%(f) 6.24%(e)(f) 5.80%(b)(e)
======================================================= ====== ======= ======= ======= ====== =======
Portfolio turnover rate 54% 80% 227% 185% 99% 54%
======================================================= ====== ======= ====== ======= ====== =======
</TABLE>
(a) Does not deduct contingent deferred sales charges and are not annualized for
periods less than one year.
(b) Ratios are based on average net assets of $100,307,548 and $739,696,
respectively, for Class B and Class C.
(c) Includes indirectly paid expenses. Excluding indirectly paid expenses, the
ratio of expenses to average net assets would have been 1.68% for Class B
and Class C.
(d) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
2.04% and 2.50% (annualized) for 1994 and 1993, respectively.
(e) Annualized.
(f) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average net assets prior to fee waivers and/or expense
reimbursements were 6.48% and 5.49% (annualized) for 1994 and 1993,
respectively.
FS-69
<PAGE> 203
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Intermediate Government Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Intermediate Government Fund (a
portfolio of AIM Funds Group), including the schedule of
investments, as of December 31, 1997, and the related
statement of operations for the year then ended, the
statement of changes in net assets for each of the years
in the two-year period then ended and the financial
highlights for each of the years or periods in the
five-year period then ended. These financial statements
and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an
opinion on these financial statements and 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
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 and financial highlights. Our procedures
included confirmation of securities owned as of December
31, 1997, by correspondence with the custodian and
brokers. 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 financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM
Intermediate Government Fund as of December 31, 1997, the
results of its operations for the year then ended, the
changes in its net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years or periods in the five-year period
then ended, in conformity with generally accepted
accounting principles.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Houston, Texas
February 6, 1998
FS-70
<PAGE> 204
SCHEDULE OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
U.S. GOVERNMENT AGENCY SECURITIES-78.59%
FEDERAL HOME LOAN BANK-4.73%
Debentures
5.97%, 12/11/00 $ 5,000,000 $ 5,023,950
- ---------------------------------------------------------------
7.31%, 07/06/01 4,000,000 4,184,040
- ---------------------------------------------------------------
7.36%, 07/01/04 2,800,000 3,007,676
- ---------------------------------------------------------------
12,215,666
- ---------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. ("FHLMC")-12.08%
Pass through certificates
9.00%, 12/01/05 to 04/01/25 8,165,358 8,644,311
- ---------------------------------------------------------------
8.00%, 07/01/06 to 12/01/06 29,966 30,968
- ---------------------------------------------------------------
8.50%, 07/01/07 to 12/01/08 4,956,860 5,221,726
- ---------------------------------------------------------------
10.50%, 09/01/09 to 01/01/21 2,991,415 3,294,400
- ---------------------------------------------------------------
7.00%, 11/01/10 to 04/01/11 2,065,329 2,107,877
- ---------------------------------------------------------------
6.50%, 02/01/11 4,314,857 4,343,162
- ---------------------------------------------------------------
10.00%, 11/01/11 to 02/01/16 37,850 41,059
- ---------------------------------------------------------------
12.00%, 02/01/13 24,920 28,487
- ---------------------------------------------------------------
9.50%, 04/01/25 7,005,688 7,525,573
- ---------------------------------------------------------------
31,237,563
- ---------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION ("FNMA")-33.20%
Debentures
8.625%, 11/10/04 3,500,000 3,655,785
- ---------------------------------------------------------------
8.50%, 02/01/05 4,500,000 4,709,745
- ---------------------------------------------------------------
7.875%, 02/24/05 3,000,000 3,325,620
- ---------------------------------------------------------------
Medium term notes
5.97%, 07/31/00 6,000,000 6,024,660
- ---------------------------------------------------------------
Pass through certificates
6.24%, 02/01/06 4,418,679 4,441,479
- ---------------------------------------------------------------
8.50%, 01/01/07 to 03/01/07 36,079 37,488
- ---------------------------------------------------------------
6.625%, 02/01/07 4,466,185 4,620,491
- ---------------------------------------------------------------
7.50%, 06/01/10 to 03/01/27 29,622,511 30,434,149
- ---------------------------------------------------------------
7.00%, 05/01/11 to 10/01/12 11,489,189 11,684,575
- ---------------------------------------------------------------
9.50%, 07/01/16 to 08/01/22 3,004,005 3,234,923
- ---------------------------------------------------------------
8.00%, 04/01/25 to 07/01/26 11,933,045 12,363,889
- ---------------------------------------------------------------
STRIPS(a)
7.37%, 10/09/19 5,000,000 1,305,900
- ---------------------------------------------------------------
85,838,704
- ---------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
("GNMA")-28.58%
Pass through certificates
9.00%, 10/15/08 to 06/15/21 $ 6,514,942 $ 7,076,255
- ---------------------------------------------------------------
9.50%, 06/15/09 to 03/15/23 8,033,006 8,736,245
- ---------------------------------------------------------------
10.00%, 11/15/09 to 07/15/24 4,076,462 4,457,737
- ---------------------------------------------------------------
11.00%, 12/15/09 to 12/15/15 190,254 213,174
- ---------------------------------------------------------------
13.50%, 07/15/10 to 04/15/15 435,562 516,352
- ---------------------------------------------------------------
12.50%, 11/15/10 217,080 252,965
- ---------------------------------------------------------------
13.00%, 01/15/11 to 05/15/15 421,209 493,168
- ---------------------------------------------------------------
12.00%, 01/15/13 to 07/15/15 742,181 850,681
- ---------------------------------------------------------------
10.50%, 07/15/13 to 02/15/16 241,000 266,606
- ---------------------------------------------------------------
8.00%, 03/15/23 to 06/15/27 6,200,612 6,441,766
- ---------------------------------------------------------------
6.50%, 01/22/28 TBA(b) 45,000,000 44,585,159
- ---------------------------------------------------------------
73,890,108
- ---------------------------------------------------------------
Total U.S. Government Agency
Securities 203,182,041
- ---------------------------------------------------------------
U.S. TREASURY SECURITIES-27.18%
U.S. Treasury Notes & Bonds-25.73%
5.625%, 11/30/99 6,000,000 5,997,360
- ---------------------------------------------------------------
6.125%, 12/31/01 10,000,000 10,140,200
- ---------------------------------------------------------------
6.00%, 07/31/02 5,000,000 5,056,000
- ---------------------------------------------------------------
7.00%, 07/15/06 4,000,000 4,319,520
- ---------------------------------------------------------------
6.125%, 08/15/07 14,500,000 14,906,290
- ---------------------------------------------------------------
7.25%, 05/15/16 6,500,000 7,404,345
- ---------------------------------------------------------------
7.50%, 11/15/16 5,500,000 6,420,370
- ---------------------------------------------------------------
8.125%, 08/15/19 4,000,000 5,008,120
- ---------------------------------------------------------------
6.375%, 08/15/27 2,500,000 2,638,350
- ---------------------------------------------------------------
6.125%, 11/15/27 4,500,000 4,625,055
- ---------------------------------------------------------------
66,515,610
- ---------------------------------------------------------------
U.S. Treasury STRIPS(a)-1.45%
6.77%, 11/15/08 4,000,000 2,116,240
- ---------------------------------------------------------------
6.79%, 11/15/18 5,750,000 1,640,705
- ---------------------------------------------------------------
3,756,945
- ---------------------------------------------------------------
Total U.S. Treasury
Securities 70,272,555
- ---------------------------------------------------------------
Total Investments (excluding
Repurchase Agreement) 273,454,596
- ---------------------------------------------------------------
</TABLE>
FS-71
<PAGE> 205
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENT-10.09%(c)
Goldman Sachs & Co., 6.53%,
01/02/98(d) $26,089,190 $ 26,089,190
- ---------------------------------------------------------------
TOTAL INVESTMENTS-115.86% 299,543,786
- ---------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-(15.86%) (41,000,580)
- ---------------------------------------------------------------
NET ASSETS-100.00% $ 258,543,206
===============================================================
</TABLE>
Notes to Schedule of Investments:
(a) STRIPS are traded on a discount basis. In such cases the interest rate shown
represents the rate of discount paid or received at the time of purchase by
the Fund.
(b) At 12/31/97, the cost of securities purchased on a when-issued basis
totalled $44,354,688. These securities are also subject to dollar roll
transactions. See Note I section C of Notes to Financial Statements.
(c) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts, and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(d) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$900,326,500. Collateralized by $856,643,000 U.S. Government obligations, 0%
to 14% due 01/08/98 to 08/15/23 with an aggregate market value at 12/31/97
of $918,902,583.
Abbreviations:
TBA -- To Be Announced
See Notes to Financial Statements.
FS-72
<PAGE> 206
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$290,539,341) $299,543,786
- ---------------------------------------------------------
Receivables for:
Fund shares sold 1,820,448
- ---------------------------------------------------------
Interest 2,545,894
- ---------------------------------------------------------
Investment for deferred compensation plan 27,011
- ---------------------------------------------------------
Other assets 229,658
- ---------------------------------------------------------
Total assets 304,166,797
- ---------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 44,354,688
- ---------------------------------------------------------
Fund shares reacquired 410,205
- ---------------------------------------------------------
Dividends 406,499
- ---------------------------------------------------------
Deferred compensation plan 27,011
- ---------------------------------------------------------
Accrued advisory fees 104,069
- ---------------------------------------------------------
Accrued administrative service fees 5,387
- ---------------------------------------------------------
Accrued distribution fees 203,620
- ---------------------------------------------------------
Accrued transfer agent fees 32,966
- ---------------------------------------------------------
Accrued operating expenses 79,146
- ---------------------------------------------------------
Total liabilities 45,623,591
- ---------------------------------------------------------
Net assets applicable to shares outstanding $258,543,206
=========================================================
NET ASSETS:
Class A $167,426,799
=========================================================
Class B $ 89,265,162
=========================================================
Class C $ 1,851,245
=========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 17,706,225
=========================================================
Class B 9,436,436
=========================================================
Class C 196,010
=========================================================
Class A:
Net asset value and redemption price per
share $ 9.46
=========================================================
Offering price per share:
(Net asset value of $9.46 divided
by 95.25%) $ 9.93
=========================================================
Class B:
Net asset value and offering price per
share $ 9.46
=========================================================
Class C:
Net asset value and offering price per
share $ 9.44
=========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $19,191,667
- ---------------------------------------------------------
EXPENSES:
Advisory fees 1,174,166
- ---------------------------------------------------------
Administrative service fees 70,736
- ---------------------------------------------------------
Custodian fees 51,111
- ---------------------------------------------------------
Distribution fees -- Class A 405,373
- ---------------------------------------------------------
Distribution fees -- Class B 810,246
- ---------------------------------------------------------
Distribution fees -- Class C 3,829
- ---------------------------------------------------------
Interest (Note C) 278,331
- ---------------------------------------------------------
Transfer agent fees -- Class A 241,066
- ---------------------------------------------------------
Transfer agent fees -- Class B 120,445
- ---------------------------------------------------------
Transfer agent fees -- Class C 565
- ---------------------------------------------------------
Trustees' fees 9,912
- ---------------------------------------------------------
Other 166,284
- ---------------------------------------------------------
Total expenses 3,332,064
- ---------------------------------------------------------
Less: Expenses paid indirectly (3,621)
- ---------------------------------------------------------
Net expenses 3,328,443
- ---------------------------------------------------------
Net investment income 15,863,224
- ---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES:
Net realized gain (loss) from investment
securities (73,291)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities 4,443,700
- ---------------------------------------------------------
Net gain on investment securities 4,370,409
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $20,233,633
=========================================================
</TABLE>
See Notes to Financial Statements.
FS-73
<PAGE> 207
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 15,863,224 $ 16,155,081
- --------------------------------------------------------------------------------------------
Net realized gain (loss) on sales of investment securities (73,291) (4,339,042)
- --------------------------------------------------------------------------------------------
Unrealized appreciation (depreciation) of investment
securities 4,443,700 (6,405,094)
- --------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 20,233,633 5,410,945
- --------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (10,575,295) (11,114,092)
- --------------------------------------------------------------------------------------------
Class B (4,595,241) (3,966,734)
- --------------------------------------------------------------------------------------------
Class C (19,501) --
- --------------------------------------------------------------------------------------------
Return of capital:
Class A (430,314) (712,857)
- --------------------------------------------------------------------------------------------
Class B (214,788) (292,831)
- --------------------------------------------------------------------------------------------
Class C (713) --
- --------------------------------------------------------------------------------------------
Share transactions-net:
Class A (9,731,599) 5,857,162
- --------------------------------------------------------------------------------------------
Class B 8,255,456 20,988,143
- --------------------------------------------------------------------------------------------
Class C 1,834,127 --
- --------------------------------------------------------------------------------------------
Net increase in net assets 4,755,765 16,169,736
- --------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 253,787,441 237,617,705
- --------------------------------------------------------------------------------------------
End of period $258,543,206 $253,787,441
============================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $264,984,880 $265,272,711
- --------------------------------------------------------------------------------------------
Undistributed net investment income (32,484) (19,243)
- --------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (15,413,635) (16,026,772)
- --------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 9,004,445 4,560,745
- --------------------------------------------------------------------------------------------
$258,543,206 $253,787,441
============================================================================================
</TABLE>
See Notes to Financial Statements.
FS-74
<PAGE> 208
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Intermediate Government Fund (the "Fund") is a series portfolio of AIM Funds
Group (the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of nine separate series
portfolios, each having an unlimited number of shares of beneficial interest.
The Fund currently offers three different classes of shares: the Class A shares,
the Class B shares, and the Class C shares. The new Class C shares commenced
sales on August 4, 1997. Class A shares are sold with a front-end sales charge.
Class B and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. The Fund's investment objective
is to seek to achieve a high level of current income consistent with reasonable
concern for safety of principal by investing in debt securities issued,
guaranteed or otherwise backed by the United States Government. Information
presented in these financial statements pertains only to the Fund.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- Debt obligations that are issued or guaranteed by the
U.S. Government, its agencies, authorities, and instrumentalities are valued
on the basis of prices provided by an independent pricing service. Prices
provided by the pricing service may be determined without exclusive reliance
on quoted prices, and may reflect appropriate factors such as yield, type of
issue, coupon rate, maturity date and seasoning differential. Securities for
which market prices are not provided by the pricing service are valued at
the mean between the last bid and asked prices based upon quotes furnished
by independent sources. Securities for which market quotations are either
not readily available or are questionable are valued at fair value as
determined in good faith by or under the supervision of the Trust's officers
in a manner specifically authorized by the Board of Trustees. Short-term
obligations having 60 days or less to maturity are valued at amortized cost
which approximates market value.
B. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. It is the policy of the Fund to
declare daily dividends from net investment income. Such dividends are paid
monthly. Distributions from net realized capital gains, if any, are recorded
on ex-dividend date and are paid annually subject to restrictions described
in Note 1 Section "D". On December 31, 1997, $686,428 was reclassified from
undistributed net realized gain (loss) to undistributed net investment
income as a result of permanent book/tax differences due to the differing
book/tax treatment for principal paydown losses on mortgage-backed
securities. The Fund incurred a return of capital in the amount of $645,815
that is reflected in the Statement of Changes in Net Assets. These
reclassifications were made in order to comply with the requirements of the
American Institute of Certified Public Accountants Statement of Position
93-2. Net assets of the Fund were unaffected by the reclassifications
discussed above.
C. Reverse Repurchase Agreements and Dollar Roll Transactions -- A reverse
repurchase agreement involves the sale of securities held by the Fund, with
an agreement that the Fund will repurchase such securities at an agreed-upon
price and date. Proceeds from reverse repurchase agreements are treated as
borrowings. The agreements are collateralized by the underlying securities
and are carried at the amount at which the securities will subsequently be
repurchased as specified in the agreements. The maximum amount outstanding
during the year ended December 31, 1997 was $20,568,750 while borrowings
averaged $6,673,588 per day with a weighted average interest rate of 5.08%.
The Fund may also engage in dollar roll transactions with respect to
mortgage securities issued by GNMA, FNMA and FHLMC. In a dollar roll
transaction, the Fund sells a mortgage security held in the portfolio to a
financial institution such as a bank or broker-dealer, and simultaneously
agrees to repurchase a substantially similar security (same type, coupon and
maturity) from the institution at a later date at an agreed upon price. The
mortgage securities that are repurchased will bear the same interest rate as
those sold, but generally will be collateralized by different pools of
mortgages with different prepayment histories. During the period between the
sale and repurchase, the Fund will not be entitled to receive interest and
principal payments on the securities sold. Proceeds of the sale will be
invested in short-term instruments, and the income from these investments,
together with any additional fee income received on the sale, could generate
income for the Fund exceeding the yield on the security sold.
FS-75
<PAGE> 209
Dollar roll transactions involve the risk that the market value of the
securities retained by the Fund may decline below the price of the securities
that the Fund has sold but is obligated to repurchase under the agreement. In
the event the buyer of securities in a dollar roll transaction files for
bankruptcy or becomes insolvent, the Fund's use of the proceeds from the sale
of the securities may be restricted pending a determination by the other
party, or its trustee or receiver, whether to enforce the Fund's obligation
to repurchase the securities. The Fund will limit its borrowings from banks,
reverse repurchase agreements and dollar roll transactions to an aggregate of
33 1/3% of its total assets at the time of investment. The Fund will not
purchase additional securities when any borrowings from banks exceed 5% of
the Fund's total assets.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements. The Fund has a capital loss
carryforward of $15,253,330 (which may be carried forward to offset future
taxable capital gains, if any) which expires, if not previously utilized,
through the year 2004. The Fund cannot distribute capital gains to
shareholders until the tax loss carryforwards have been utilized.
E. Expenses -- Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses which are attributable to more than one class are allocated among
the classes.
NOTE 2- ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays AIM an advisory fee at an annual rate of 0.50% of the
first $200 million of the Fund's average daily net assets, plus 0.40% of the
Fund's average daily net assets in excess of $200 million to and including $500
million, plus 0.35% of the Fund's average daily net assets in excess of $500
million to and including $1 billion, plus 0.30% of the Fund's average daily net
assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended December 31, 1997, AIM
was reimbursed $70,736 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the year ended December 31, 1997, the
Fund paid AFS $213,155 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted
distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares and Class C shares (the "Class A and C Plan"), and the
Fund's Class B shares (the "Class B Plan") (collectively, the "Plans"). The
Fund, pursuant to the Class A and C Plan, pays AIM Distributors compensation at
an annual rate of 0.25% of the average daily net assets of the Class A shares
and 1.00% of the average daily net assets of the Class C shares. The Fund
pursuant to the Class B Plan, pays AIM Distributors an annual rate of 1.00% of
the average daily net assets attributable to the Class B shares. Of these
amounts, the Fund may pay a service fee of 0.25% of the average daily net assets
of the Class A, Class B or C shares to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own the appropriate class of shares of the Fund. Any
amounts not paid as a service fee by the Class B or Class C shares under the
Plans would constitute an asset-based sales charge. The Plans also impose a cap
on the total sales charges, including asset-based sales charges that may be paid
by the respective classes. AIM Distributors may, from time to time, assign,
transfer, or pledge to one or more designees, its rights to all or a designated
portion of (a) compensation received by AIM Distributors from the Fund pursuant
to the Class B Plan (but not AIM Distributors' duties and obligations pursuant
to the Class B Plan) and (b) any contingent deferred sales charged received by
AIM Distributors related to the Class B shares. During the year ended December
31, 1997, the Class A shares and Class B shares, and the period August 4, 1997
through December 31, 1997 for the Class C shares, the Class A, Class B and Class
C shares paid AIM Distributors $405,373, $810,246 and $3,829 respectively, as
compensation under the Plans.
AIM Distributors received commissions of $116,124 from sales of the Class A
shares of the Fund during the year ended December 31, 1997. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1997,
AIM Distributors received $131,697 in contingent deferred sales charges imposed
on redemptions of Fund shares. Certain officers and trustees of the Trust are
officers and directors of AIM, AIM Distributors and AFS.
During the year ended December 31, 1997, the Fund paid legal fees of $4,849
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
AIM has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses related to pricing services used by the Fund which reduced Fund
expenses by $845 during the year ended December 31, 1997. Also during the year
ended
FS-76
<PAGE> 210
December 31, 1997, the Fund received reductions in transfer agency fees from AFS
(an affiliate of AIM) and reductions in custodian fees of $2,756 and $20,
respectively, under expense offset arrangements. The effect of the above
arrangements resulted in a reduction of the Fund's total expenses of $3,621
during the year ended December 31, 1997.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 15, 1997, the Fund was
limited to borrowing up to the lesser of (i) $325,000,000 or (ii) the limits set
by its prospectus for borrowings. During the year ended December 31, 1997, the
Fund did not borrow under the line of credit agreement. The funds which are
parties to the line of credit are charged a commitment fee of 0.05% on the
unused balance of the committed line. The commitment fee is allocated among such
funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1997 was
$216,459,929 and $234,399,579, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
on a tax basis as of December 31, 1997 is as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $8,907,017
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (5,411)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $8,901,606
=========================================================
</TABLE>
Cost of investments for tax purposes is $290,642,180.
NOTE 7 - SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 6,693,588 $ 62,348,371 7,920,265 $ 74,033,231
- --------------------- -----------------------------------------------------
Class B 4,448,136 41,365,183 5,052,488 47,193,668
- --------------------- -----------------------------------------------------
Class C* 734,169 6,890,070 -- --
- --------------------- -----------------------------------------------------
Issued as
reinvestment of
dividends:
Class A 953,629 8,857,846 1,025,026 9,536,042
- --------------------- -----------------------------------------------------
Class B 349,182 3,245,433 314,728 2,925,034
- --------------------- -----------------------------------------------------
Class C* 1,978 18,637 -- --
- --------------------- -----------------------------------------------------
Reacquired:
Class A (8,720,230) (80,937,816) (8,340,854) (77,712,111)
- --------------------- -----------------------------------------------------
Class B (3,920,140) (36,355,160) (3,132,635) (29,130,559)
- --------------------- -----------------------------------------------------
Class C* (540,137) (5,074,580) -- --
- --------------------- -----------------------------------------------------
175 $ 357,984 2,839,018 $ 26,845,305
=====================================================
</TABLE>
* Class C shares commenced sales on August 4, 1997.
FS-77
<PAGE> 211
NOTE 8 - FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A outstanding
during each of the years in the five-year period ended December 31, 1997, for a
share of Class B outstanding during each of the years in the four-year period
ended December 31, 1997 and the period September 7, 1993 (date sales commenced)
through December 31, 1993 and for a share of Class C outstanding during the
period August 4, 1997 (date sales commenced) through December 31, 1997.
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.28 $ 9.70 $ 8.99 $ 10.05 $ 10.19
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.63 0.63 0.69 0.68 0.74
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) 0.18 (0.42) 0.73 (1.02) (0.04)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Total from investment operations 0.81 0.21 1.42 (0.34) 0.70
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.61) (0.59) (0.67) (0.58) (0.70)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Distributions from net realized gains -- -- -- (0.04) (0.14)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Return of capital (0.02) (0.04) (0.04) (0.10) --
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Total distributions (0.63) (0.63) (0.71) (0.72) (0.84)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Net asset value, end of period $ 9.46 $ 9.28 $ 9.70 $ 8.99 $ 10.05
============================================================ ======== ======== ======== ======== ========
Total return(a) 9.07% 2.35% 16.28% (3.44)% 7.07%
============================================================ ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $167,427 $174,344 $176,318 $158,341 $139,586
============================================================ ======== ======== ======== ======== ========
Ratio of expenses to average net assets (exclusive of
interest expense)(b) 1.00%(c)(d) 1.00% 1.08% 1.04% 1.00%
============================================================ ======== ======== ======== ======== ========
Ratio of net investment income to average net assets(e) 6.77%(c) 6.76% 7.36% 7.34% 7.08%
============================================================ ======== ======== ======== ======== ========
Portfolio turnover rate 99% 134% 140% 109% 110%
============================================================ ======== ======== ======== ======== ========
Borrowings for the period:
Amount of debt outstanding at end of period (000s omitted) $ -- -- -- -- --
============================================================ ======== ======== ======== ======== ========
Average amount of debt outstanding during the period (000s
omitted)(f) $ 4,433 -- -- -- --
============================================================ ======== ======== ======== ======== ========
Average number of shares outstanding during the period (000s
omitted)(f) 17,470 -- -- -- --
============================================================ ======== ======== ======== ======== ========
Average amount of debt per share during the period $ 0.2537 -- -- -- --
============================================================ ======== ======== ======== ======== ========
</TABLE>
(a) Does not deduct sales charges.
(b) After fee waivers and/or expense reimbursements. Ratios of
expenses to average net assets prior to fee waivers and/or
expense reimbursements were 1.05% and 1.04%, for 1994-93,
respectively.
(c) Ratios are based on average net assets of $162,149,081.
(d) Includes expenses paid indirectly. Excluding expenses paid
indirectly, the ratio of expenses to average net assets
would have remained the same.
(e) After fee waivers and/or expense reimbursements. Ratios of
net investment income to average net assets prior to fee
waivers and/or expense reimbursements were 7.32% and 7.04%
for 1994-93, respectively.
(f) Averages computed on a daily basis.
FS-78
<PAGE> 212
<TABLE>
<CAPTION>
CLASS B CLASS C
----------------------------------------------------- -------
1997 1996 1995 1994 1993 1997
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.28 $ 9.69 $ 8.99 $ 10.04 $ 10.44 $ 9.33
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.56 0.55 0.63 0.61 0.21 0.24
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Net gains (losses) on securities (both realized and
unrealized) 0.17 (0.41) 0.70 (1.02) (0.27) 0.10
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Total from investment operations 0.73 0.14 1.33 (0.41) (0.06) 0.34
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.53) (0.51) (0.59) (0.50) (0.20) (0.22)
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Distributions from net realized gains -- -- -- (0.04) (0.14) --
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Return of capital (0.02) (0.04) (0.04) (0.10) -- (0.01)
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Total distributions (0.55) (0.55) (0.63) (0.64) (0.34) (0.23)
- ------------------------------------------------------------ ------- ------- ------- ------- ------- -------
Net asset value, end of period $ 9.46 $ 9.28 $ 9.69 $ 8.99 $ 10.04 $ 9.44
============================================================ ======= ======= ======= ======= ======= =======
Total return(a) 8.16% 1.61% 15.22% (4.13)% (0.52)% 3.64%
============================================================ ======= ======= ======= ======= ======= =======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $89,265 $79,443 $61,300 $23,415 $ 6,160 $ 1,851
============================================================ ======= ======= ======= ======= ======= =======
Ratio of expenses to average net assets (exclusive of
interest expense)(b) 1.76%(c)(d) 1.76% 1.86% 1.82% 1.71%(e) 1.76%(c)(d)(e)
============================================================ ======= ======= ======= ======= ======= =======
Ratio of net investment income to average net assets(f) 6.01%(c) 6.00% 6.58% 6.56% 6.37%(e) 6.01%(c)(e)
============================================================ ======= ======= ======= ======= ======= =======
Portfolio turnover rate 99% 134% 140% 109% 110% 99%
============================================================ ======= ======= ======= ======= ======= =======
Borrowings for the period:
Amount of debt outstanding at ended of period (000s omitted) $ -- -- -- -- -- $ --
============================================================ ======= ======= ======= ======= ======= =======
Average amount of debt outstanding during the period (000s
omitted)(g) $ 2,215 -- -- -- -- $ 25
============================================================ ======= ======= ======= ======= ======= =======
Average number of shares outstanding during the period (000s
omitted)(g) 8,726 -- -- -- -- 99
============================================================ ======= ======= ======= ======= ======= =======
Average amount of debt per share during the period $0.2537 -- -- -- -- $0.2537
============================================================ ======= ======= ======= ======= ======= =======
</TABLE>
(a) Does not deduct contingent deferred sales charges and are
not annualized for periods less than one year.
(b) After fee waivers and/or expense reimbursements. Ratio of
expenses to average net assets prior to fee waivers and/or
expense reimbursements were 1.87% and 2.18% (annualized) for
1994-93, respectively.
(c) Ratios are based on average net assets of $81,024,662 and
$931,755, respectively for Class B and Class C.
(d) Includes expenses paid indirectly. Excluding expenses paid
indirectly, the ratio of expenses to average net assets
would have remained the same.
(e) Annualized.
(f) After fee waivers and/or expense reimbursements. Ratios of
net investment income to average net assets prior to fee
waivers and/or expense reimbursements were 6.50% and 5.90%
(annualized) for 1994-93, respectively.
(g) Averages computed on a daily basis.
FS-79
<PAGE> 213
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Money Market Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Money Market Fund (a portfolio of AIM
Funds Group), including the schedule of investments, as
of December 31, 1997, and the related statement of
operations for the year then ended, the statement of
changes in net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years or periods in the four-year period
then ended and the period October 16, 1993 (date
operations commenced) through December 31, 1993. These
financial statements and financial highlights are the
responsibility of the Fund's management. Our
responsibility is to express an opinion on these
financial statements and 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
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 and financial highlights. 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 financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Money
Market Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in net
assets for each of the years in the two-year period then
ended and the financial highlights for each of the years
or periods in the four-year period then ended, and the
period October 16, 1993 (date operations commenced)
through December 31, 1993, in conformity with generally
accepted accounting principles.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Houston, Texas
February 6, 1998
FS-80
<PAGE> 214
SCHEDULE OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
COMMERCIAL PAPER-35.99%(a)
ASSET-BACKED SECURITIES-11.83%
Ciesco, L.P.
5.67% 02/09/98 $ 3,750 $ 3,726,965
- -----------------------------------------------------------------
Delaware Funding Corp.
5.57% 01/23/98 10,000 9,965,961
- -----------------------------------------------------------------
Eiger Capital Corp.
5.92% 02/13/98 11,000 10,922,218
- -----------------------------------------------------------------
Falcon Asset Securitization
Corp.
5.64% 01/23/98 10,000 9,965,533
- -----------------------------------------------------------------
6.00% 01/29/98 5,000 4,976,667
- -----------------------------------------------------------------
Fleet Funding Corp.
5.83% 01/30/98 6,819 6,786,976
- -----------------------------------------------------------------
Preferred Receivable Funding
Corp.
5.64% 01/06/98 8,000 7,993,733
- -----------------------------------------------------------------
5.59% 01/23/98 20,000 19,931,678
- -----------------------------------------------------------------
5.80% 02/11/98 5,050 5,016,642
- -----------------------------------------------------------------
5.75% 03/11/98 4,975 4,920,171
- -----------------------------------------------------------------
Sheffield Receivables Corp.
5.76% 01/23/98 8,700 8,669,376
- -----------------------------------------------------------------
5.81% 02/02/98 7,100 7,063,332
- -----------------------------------------------------------------
99,939,252
- -----------------------------------------------------------------
AUTOMOBILE-2.26%
Daimler-Benz North America
5.62% 04/09/98 19,381 19,084,492
- -----------------------------------------------------------------
CHEMICALS-2.59%
Henkel Corp.
5.60% 02/04/98 22,000 21,883,645
- -----------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES-2.00%
First Data Corp.
5.60% 02/10/98 5,000 4,968,889
- -----------------------------------------------------------------
5.72% 03/03/98 12,000 11,883,693
- -----------------------------------------------------------------
16,852,582
- -----------------------------------------------------------------
ELECTRICAL EQUIPMENT-1.77%
Hitachi America, Inc.
5.89% 01/15/98 15,000 14,965,642
- -----------------------------------------------------------------
FINANCE (BUSINESS CREDIT)-1.53%
National Rural Utilities
Cooperative Finance Corp.
5.54% 01/14/98 8,000 7,983,996
- -----------------------------------------------------------------
5.54% 02/02/98 5,000 4,975,378
- -----------------------------------------------------------------
12,959,374
- -----------------------------------------------------------------
FINANCE (MISCELLANEOUS)-0.60%
USAA Capital Corp.
6.50% 01/16/98 5,050 5,036,323
- -----------------------------------------------------------------
FINANCE (MULTIPLE INDUSTRY)-1.18%
General Electric Capital
Corp.
5.55% 01/28/98 10,000 9,958,375
- -----------------------------------------------------------------
FINANCE (PERSONAL CREDIT)-2.71%
AVCO Financial Services,
Inc.
5.55% 02/11/98 $10,000 $ 9,936,792
- -----------------------------------------------------------------
Associates Corporation of
North America
5.68% 02/11/98 13,000 12,915,905
- -----------------------------------------------------------------
22,852,697
- -----------------------------------------------------------------
INSURANCE (LIFE)-1.84%
MetLife Funding, Inc.
5.71% 03/20/98 15,730 15,535,394
- -----------------------------------------------------------------
MACHINERY-1.39%
Dover Corp.
6.50% 01/16/98 11,795 11,763,055
- -----------------------------------------------------------------
METAL MINING-3.93%
Rio Tinto America, Inc.
5.70% 03/16/98 20,800 20,556,292
- -----------------------------------------------------------------
U.S. Borax, Inc.
5.70% 03/19/98 12,750 12,594,554
- -----------------------------------------------------------------
33,150,846
- -----------------------------------------------------------------
OIL & GAS (INTEGRATED)-1.18%
Shell Oil Co.
5.81% 03/11/98 10,000 10,000,000
- -----------------------------------------------------------------
TRANSPORTATION (EQUIPMENT)-1.18%
Rockwell International Corp.
5.70% 02/03/98 10,000 9,947,750
- -----------------------------------------------------------------
Total Commercial Paper 303,929,427
- -----------------------------------------------------------------
MASTER NOTE AGREEMENTS-18.18%
Citicorp Securities, Inc.(b)
7.00% 01/26/98 20,000 20,000,000
- -----------------------------------------------------------------
Goldman Sachs & Co.(c)
5.6875% 04/20/98 41,000 41,000,000
- -----------------------------------------------------------------
Merrill Lynch Mortgage
Capital, Inc.(d)
7.05% 08/17/98 37,150 37,150,000
- -----------------------------------------------------------------
Morgan (J.P.) Securities,
Inc.(e)
6.82% 04/06/98 18,650 18,650,000
- -----------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co.(f)
6.85% 05/26/98 36,750 36,750,000
- -----------------------------------------------------------------
Total Master Note Agreements 153,550,000
- -----------------------------------------------------------------
MEDIUM-TERM NOTES-1.18%
FINANCE (PERSONAL
CREDIT)-1.18%
Associates Corp. of North
America(g)
6.12% 03/02/98 10,000 9,998,730
- -----------------------------------------------------------------
TAXABLE MUNICIPAL BONDS-2.49%
HEALTH CARE-1.19%
Jacksonville Florida Health
Facilities; Hospital
Series Revenue Bonds
6.00%(h) 08/15/19 10,000 10,000,000
- -----------------------------------------------------------------
</TABLE>
FS-81
<PAGE> 215
<TABLE>
<CAPTION>
MATURITY PAR (000) VALUE
<S> <C> <C> <C>
HOSPITAL MANAGEMENT-1.30%
Illinois Health Facilities
Authority (Loyola
University Health
Systems); Revenue Bond
6.00%(h) 07/01/24 $11,000 $ 11,000,000
- -----------------------------------------------------------------
Total Taxable Municipal Bonds 21,000,000
- -----------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES-5.28%
Federal National Mortgage
Association
5.504%(h) 06/02/99 32,000 32,000,000
- -----------------------------------------------------------------
Student Loan Marketing
Association
5.619%(h) 08/20/98 2,600 2,600,000
- -----------------------------------------------------------------
5.639%(h) 02/08/99 10,000 10,001,870
- -----------------------------------------------------------------
Total U.S. Government Agency Securities 44,601,870
- -----------------------------------------------------------------
U.S. TREASURY SECURITIES-0.58%
U.S. Treasury Bills(a)
4.975% 04/30/98 $ 5,000 $ 4,917,774
- -----------------------------------------------------------------
Total Investments (excluding Repurchase
Agreements) 537,997,801
- -----------------------------------------------------------------
REPURCHASE AGREEMENTS-23.88%(i)
Goldman Sachs & Co.(j)
6.53% 01/02/98 21,619 21,619,327
- -----------------------------------------------------------------
SBC Capital Markets, Inc.(k)
6.55% 01/02/98 180,000 180,000,000
- -----------------------------------------------------------------
Total Repurchase Agreements 201,619,327
- -----------------------------------------------------------------
TOTAL INVESTMENTS-87.58% 739,617,128(l)
- -----------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-12.42% 104,856,519
- -----------------------------------------------------------------
NET ASSETS-100.00% $844,473,647
=================================================================
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Treasury bills and some commercial paper are traded on a discount basis. In
such cases the interest rate shown represents the rate of discount paid or
received at the time of purchase by the Fund.
(b) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon three business days notice. Interest rates on master
notes are redetermined periodically. Rate shown is the rate in effect on
12/31/97.
(c) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon seven business days prior written notice. Interest
rates on master notes are redetermined periodically. Rate shown is the rate
in effect on 12/31/97.
(d) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement generally upon two business days notice. Interest rates
on master notes are redetermined periodically. Rate shown is the rate in
effect on 12/31/97.
(e) The Fund may demand prepayment of notes purchased under the Master Note
Purchase Agreement upon seven calendar days notice. Interest rates on
master notes are redetermined periodically. Rate shown is the rate in
effect on 12/31/97.
(f) Master Note Purchase Agreement may be terminated by either party upon three
business days prior written notice. Interest rates on master notes are
redetermined periodically. Rate shown is the rate in effect on 12/31/97.
(g) Interest rates are redetermined daily. Rate shown is rate in effect on
12/31/97.
(h) Interest rates are redetermined weekly. Rates shown are rates in effect on
12/31/97.
(i) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(j) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$900,326,500. Collateralized by $856,643,000 U.S. Government obligations,
0% to 14% due 01/08/98 to 08/15/23 with an aggregate market value at
12/31/97 of $918,902,583.
(k) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$500,181,944. Collateralized by $601,835,000 U.S. Government obligations, 0%
to 10.75%, due 05/21/98 to 08/15/23 with an aggregate market value at
12/31/97 of $510,077,411.
(l) Also represents cost for federal income tax purposes.
See Notes to Financial Statements.
FS-82
<PAGE> 216
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, excluding repurchase
agreements, at value (amortized cost) $ 537,997,801
- ----------------------------------------------------------
Repurchase agreements 201,619,327
- ----------------------------------------------------------
Receivables for:
Fund shares sold 125,761,897
- ----------------------------------------------------------
Interest 1,228,005
- ----------------------------------------------------------
Investment for deferred compensation plan 89,136
- ----------------------------------------------------------
Other assets 305,351
- ----------------------------------------------------------
Total assets 867,001,517
- ----------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 21,090,083
- ----------------------------------------------------------
Dividends 192,464
- ----------------------------------------------------------
Deferred compensation plan 89,136
- ----------------------------------------------------------
Accrued advisory fees 405,694
- ----------------------------------------------------------
Accrued administrative service fees 5,003
- ----------------------------------------------------------
Accrued distribution fees 570,983
- ----------------------------------------------------------
Accrued transfer agent fees 155,291
- ----------------------------------------------------------
Accrued operating expenses 19,216
- ----------------------------------------------------------
Total liabilities 22,527,870
- ----------------------------------------------------------
Net assets applicable to shares
outstanding $ 844,473,647
==========================================================
NET ASSETS:
Class A $ 376,011,656
==========================================================
Class B $ 116,057,949
==========================================================
Class C $ 8,286,877
==========================================================
AIM Cash Reserve Shares $ 344,117,165
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 375,997,608
==========================================================
Class B 116,052,514
==========================================================
Class C 8,286,622
==========================================================
AIM Cash Reserve Shares 344,102,576
==========================================================
Class A:
Net asset value and redemption price per
share $ 1.00
==========================================================
Offering price per share:
(Net asset value of $1.00 divided by
94.50%) $ 1.06
==========================================================
Class B:
Net asset value and offering price per
share $ 1.00
==========================================================
Class C:
Net asset value and offering price per
share $ 1.00
==========================================================
AIM Cash Reserve Shares:
Net asset value, offering and redemption
price per share $ 1.00
==========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $46,694,810
- ---------------------------------------------------------
EXPENSES:
Advisory fees 4,586,148
- ---------------------------------------------------------
Administrative service fees 68,947
- ---------------------------------------------------------
Custodian fees 33,501
- ---------------------------------------------------------
Distribution fees -- Class A 850,644
- ---------------------------------------------------------
Distribution fees -- Class B 1,195,121
- ---------------------------------------------------------
Distribution fees -- Class C 21,600
- ---------------------------------------------------------
Distribution fees -- AIM Cash Reserve Shares 931,232
- ---------------------------------------------------------
Trustees' fees 14,225
- ---------------------------------------------------------
Transfer agent fees -- Class A 629,608
- ---------------------------------------------------------
Transfer agent fees -- Class B 221,143
- ---------------------------------------------------------
Transfer agent fees -- Class C 4,033
- ---------------------------------------------------------
Transfer agent fees -- AIM Cash Reserve
Shares 689,255
- ---------------------------------------------------------
Other 432,259
- ---------------------------------------------------------
Total expenses 9,677,716
- ---------------------------------------------------------
Less: Expenses paid indirectly (9,867)
- ---------------------------------------------------------
Net expenses 9,667,849
- ---------------------------------------------------------
Net investment income 37,026,961
- ---------------------------------------------------------
Net realized gain on sales of investments 19,347
- ---------------------------------------------------------
Net increase in net assets resulting from
operations $37,046,308
=========================================================
</TABLE>
See Notes to Financial Statements.
FS-83
<PAGE> 217
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 37,026,961 $ 31,806,351
- ------------------------------------------------------------------------------------------
Net realized gain on sales of investments 19,347 108,101
- ------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 37,046,308 31,914,452
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (15,420,950) (11,567,004)
- ------------------------------------------------------------------------------------------
Class B (4,508,913) (3,560,364)
- ------------------------------------------------------------------------------------------
Class C (81,245) --
- ------------------------------------------------------------------------------------------
AIM Cash Reserve Shares (17,015,853) (16,678,983)
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A 88,133,325 66,344,581
- ------------------------------------------------------------------------------------------
Class B 24,881,617 21,306,761
- ------------------------------------------------------------------------------------------
Class C 8,286,622 --
- ------------------------------------------------------------------------------------------
AIM Cash Reserve Shares 28,629,341 21,970,272
- ------------------------------------------------------------------------------------------
Net increase in net assets 149,950,252 109,729,715
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 694,523,395 584,793,680
- ------------------------------------------------------------------------------------------
End of period $844,473,647 $694,523,395
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $844,439,320 $694,508,415
- ------------------------------------------------------------------------------------------
Undistributed net realized gain on sales of investments 34,327 14,980
- ------------------------------------------------------------------------------------------
$844,473,647 $694,523,395
==========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Money Market Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of nine separate series portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers four different classes of shares: the Class A shares, the Class
B shares, the Class C shares and AIM Cash Reserve Shares. The new Class C shares
commenced sales on August 4, 1997. Class A shares are sold with a front-end
sales charge. Class B shares and Class C shares are sold with a contingent
deferred sales charge. AIM Cash Reserve Shares are sold at net asset value.
Matters affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's objective is to
provide as high a level of current income as is consistent with preservation of
capital and liquidity.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- The Fund's securities are valued on the basis of
amortized cost which approximates market value. This method values a
security at its cost on the date of purchase and thereafter, assumes a
constant amortization to maturity of any discount or premiums.
B. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income, adjusted for amortization of premiums and
discounts on investments, is recorded as earned from settlement date and is
recorded on the accrual basis.
FS-84
<PAGE> 218
Dividends to shareholders are declared daily and are paid monthly.
C. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
D. Expenses -- Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses which are attributable to more than one class are allocated among
the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.55% of
the first $1 billion of the Fund's average daily net assets plus 0.50% of the
Fund's average daily net assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended December 31, 1997, AIM
was reimbursed $68,947 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") for certain costs incurred in providing
transfer agency and shareholder services to the Fund. During the year ended
December 31, 1997, the Fund paid AFS $784,714 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B, Class C and the AIM Cash Reserve Shares of the Fund. The Trust
has adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act with
respect to the Fund's Class A shares, Class C shares and the AIM Cash Reserve
Shares (the "Class A and C Plan"), and the Fund's Class B shares (the "Class B
Plan") (collectively, the "Plans"). The Fund, pursuant to the Class A and C
Plan, pays AIM Distributors compensation at an annual rate of 0.25% of the
average daily net assets attributable to the Class A shares and the AIM Cash
Reserve Shares, and 1.00% of the average daily net assets of the Class C shares.
The Fund, pursuant to the Class B Plan pays AIM Distributors compensation at an
annual rate of 1.00% of the average daily net assets attributable to the Class B
shares. Of these amounts, the Fund may pay a service fee of 0.25% of the average
daily net assets of the Class A, Class B, Class C or AIM Cash Reserve Shares to
selected dealers and financial institutions who furnish continuing personal
shareholder services to their customers who purchase and own the appropriate
class of shares of the Fund. Any amounts not paid as a service fee by the Class
B or Class C shares under the Plans would constitute an asset-based sales
charge. The Plans also impose a cap on the total sales charges, including asset-
based sales charges that may be paid by the respective classes. AIM Distributors
may, from time to time, assign, transfer, or pledge to one or more designees,
its rights to all or a designated portion of (a) compensation received by AIM
Distributors from the Fund pursuant to the Class B Plan (but not AIM
Distributors' duties and obligations pursuant to the Class B Plan) and (b) any
contingent deferred sales charges received by AIM Distributors related to the
Class B shares. During the year ended December 31, 1997, the Class A and Class B
shares and the AIM Cash Reserve Shares, and during the period August 4, 1997
through December 31, 1997 the Class C shares, paid AIM Distributors $850,644,
$1,195,121, $931,232 and $21,600, respectively, as compensation under the Plans.
AIM Distributors received commissions of $443,904 from sales of the Class A
shares of the Fund during the year ended December 31, 1997. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1997,
AIM Distributors received $344,545 in contingent deferred sales charges imposed
on redemptions of Fund shares. Certain officers and trustees of the Trust are
officers and directors of AIM, AIM Distributors and AFS.
During the year ended December 31, 1997, the Fund paid legal fees of $6,392
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
During the year ended December 31, 1997, the Fund received reductions in
transfer agency fees from AFS (an affiliate of AIM) and reductions in custodian
fees of $9,526 and $341, respectively under expense offset arrangements. The
effect of the above arrangements resulted in reductions of the Fund's total
expenses of $9,867 during the year ended December 31, 1997.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
FS-85
<PAGE> 219
NOTE 5-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold:
Class A 4,653,429,305 $ 4,653,429,305 2,107,832,986 $ 2,107,832,986
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class B 420,215,854 420,215,854 334,518,591 334,518,591
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class C* 61,859,578 61,859,578 -- --
- ----------------------------------------------------- --------------------------------- ---------------------------------
AIM Cash Reserve Shares 4,356,728,398 4,356,728,398 3,871,719,488 3,871,719,488
- ----------------------------------------------------- --------------------------------- ---------------------------------
Issued as reinvestment of dividends:
Class A 13,299,323 13,299,323 10,061,164 10,061,164
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class B 3,988,737 3,988,737 3,197,896 3,197,896
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class C* 75,390 75,390 -- --
- ----------------------------------------------------- --------------------------------- ---------------------------------
AIM Cash Reserve Shares 13,807,718 13,807,718 14,185,926 14,185,926
- ----------------------------------------------------- --------------------------------- ---------------------------------
Reacquired:
Class A (4,578,595,303) (4,578,595,303) (2,051,549,569) (2,051,549,569)
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class B (399,322,974) (399,322,974) (316,409,726) (316,409,726)
- ----------------------------------------------------- --------------------------------- ---------------------------------
Class C* (53,648,346) (53,648,346) -- --
- ----------------------------------------------------- --------------------------------- ---------------------------------
AIM Cash Reserve Shares (4,341,906,775) (4,341,906,775) (3,863,935,142) (3,863,935,142)
- ----------------------------------------------------- --------------------------------- ---------------------------------
149,930,905 $ 149,930,905 109,621,614 $ 109,621,614
================================= =================================
</TABLE>
*Class C shares commenced sales on August 4, 1997.
NOTE 6-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A, Class B and AIM
Cash Reserve Shares outstanding during each of the years in the four-year period
ended December 31, 1997 and the period October 16, 1993 (date operations
commenced) through December 31, 1993 and for a share of Class C outstanding
during the period August 4, 1997 (date sales commenced) through December 31,
1997.
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
------------------------------------------------------ -------------------------------
1997 1996 1995 1994 1993 1997 1996 1995
-------- -------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------- -------- -------- -------- -------- -------- -------- -------- -------
Income from
investment
operations:
Net investment
income 0.0453 0.0433 0.0495 0.0337 0.0048 0.0378 0.0360 0.0419
- --------------------- -------- -------- -------- -------- -------- -------- -------- -------
Less distributions:
Dividends from net
investment income (0.0453) (0.0433) (0.0495) (0.0337) (0.0048) (0.0378) (0.0360) (0.0419)
- --------------------- -------- -------- -------- -------- -------- -------- -------- -------
Net asset value, end
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===================== ======== ======== ======== ======== ======== ======== ======== =======
Total return(a) 4.63% 4.42% 5.06% 3.43% 2.27%(e) 3.84% 3.66% 4.27%
===================== ======== ======== ======== ======== ======== ======== ======== =======
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $376,012 $287,905 $221,487 $148,886 $ 81,460 $116,058 $ 91,148 $69,857
===================== ======== ======== ======== ======== ======== ======== ======== =======
Ratio of expenses to
average net assets 1.05%(b)(c) 1.07% 1.03% 0.97%(d) 1.00%(d)(e) 1.80%(b)(c) 1.81% 1.78%
===================== ======== ======== ======== ======== ======== ======== ======== =======
Ratio of net
investment income to
average net assets 4.55%(b) 4.34% 4.91% 3.53%(d) 2.27%(d)(e) 3.80%(b) 3.60% 4.14%
===================== ======== ======== ======== ======== ======== ======== ======== =======
<CAPTION>
CLASS C
CLASS B SHARES SHARES AIM CASH RESERVE SHARES
------------------- -------- ------------------------------------------------------
1994 1993 1997 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------- -------- -------- -------- -------- -------- -------- -------- --------
Income from
investment
operations:
Net investment
income 0.0259 0.0032 0.0158 0.0456 0.0433 0.0493 0.0337 0.0048
- --------------------- -------- -------- -------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net
investment income (0.0259) (0.0032) (0.0158) (0.0456) (0.0433) (0.0493) (0.0337) (0.0048)
- --------------------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
===================== ======== ======== ======= ======== ======== ======== ======== ========
Total return(a) 2.62% 1.51%(e) 3.92%(e) 4.66% 4.41% 5.04% 3.42% 2.27%(e)
===================== ======== ======== ======= ======== ======== ======== ======== ========
Ratios/supplemental
data:
Net assets, end of
period (000s
omitted) $ 33,999 $ 1,289 $ 8,287 $344,117 $315,470 $293,450 $359,952 $241,778
===================== ======== ======== ======= ======== ======== ======== ======== ========
Ratio of expenses to
average net assets 1.78%(f) 1.75%(e)(f) 1.80%(b)(c)(e) 1.05%(b)(c) 1.08% 1.04% 0.99%(g) 1.00%(e)(g)
===================== ======== ======== ======= ======== ======== ======== ======== ========
Ratio of net
investment income to
average net assets 3.14%(f) 1.54%(e)(f) 3.80%(b)(e) 4.55%(b) 4.32% 4.92% 3.49%(g) 2.27%(e)(g)
===================== ======== ======== ======= ======== ======== ======== ======== ========
</TABLE>
(a) Does not deduct sales charges where applicable and are annualized for
periods less than one year.
(b) Ratios are based on average net assets as follows: Class A shares -
$340,257,685, Class B shares - $119,512,069, Class C shares - $5,256,063 and
AIM Cash Reserve Shares - $372,492,695.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly
the ratio of expenses to average daily net assets would have been the same.
(d) After fee waivers and/or expense reimbursements. Ratios of expenses and net
investment income to average daily net assets prior to fee waivers and/or
expense reimbursements were 1.06% and 3.44%, respectively, for 1994 and
1.20% (annualized) and 2.07% (annualized), respectively, for 1993.
(e) Annualized.
(f) After fee waivers and/or expense reimbursements. Ratios of expenses and net
investment income to average daily net assets prior to fee waivers and/or
expense reimbursements were 1.87% and 3.05%, respectively, for 1994 and
1.95% (annualized) and 1.34% (annualized), respectively, for 1993.
(g) After fee waivers and/or expense reimbursements. Ratios of expenses and net
investment income to average daily net assets prior to fee waivers and/or
expense reimbursements were 1.08% and 3.40%, respectively, for 1994 and
1.20% (annualized) and 2.07% (annualized), respectively, for 1993.
FS-86
<PAGE> 220
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Municipal Bond Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Municipal Bond Fund (a portfolio of
AIM Funds Group), including the schedule of investments,
as of December 31, 1997, and the related statement of
operations for the year then ended, the statement of
changes in net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years or periods in the five-year period
then ended. These financial statements and financial
highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion
on these financial statements and 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
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 and financial highlights. Our procedures
included confirmation of securities owned as of December
31, 1997, by correspondence with the custodian and
brokers. 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 financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM
Municipal Bond Fund as of December 31, 1997, the results
of its operations for the year then ended, the changes in
its net assets for each of the years in the two-year
period then ended and the financial highlights for each
of the years or periods in the five-year period then
ended, in conformity with generally accepted accounting
principles.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Houston, Texas
February 6, 1998
FS-87
<PAGE> 221
SCHEDULE OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
ALABAMA-0.68%
Courtland Industrial
Development Board
(Champion International
Corp. Project); Refunding
PCR
6.40%, 11/01/26(b) - Baa1 $2,315 $ 2,500,617
- ------------------------------------------------------------------
ALASKA-1.78%
Alaska (State of) Housing
Finance Corp.;
Collateralized First
Veterans' Home Mortgage
Series A-2 RB
6.75%, 12/01/24(b) AAA Aaa 4,800 5,107,055
- ------------------------------------------------------------------
Alaska (State of) Housing
Finance Corp.;
Collateralized Mortgage
Program First Series RB
6.875%, 06/01/33 AAA Aaa 1,330 1,411,901
- ------------------------------------------------------------------
6,518,956
- ------------------------------------------------------------------
ARKANSAS-1.43%
Fayetteville (City of);
Water and Sewer Refunding
and Improvement Series
1992 RB
6.15%, 08/15/12 A A 2,000 2,095,820
- ------------------------------------------------------------------
Independence (County of)
(Mississippi Power & Light
Project); PCR
9.50%, 07/01/14 - Baa2 1,000 1,073,330
- ------------------------------------------------------------------
Little Rock (City of); Sewer
Improvement Series B RB
5.75%, 02/01/06 AA+ Aa 2,000 2,055,620
- ------------------------------------------------------------------
5,224,770
- ------------------------------------------------------------------
ARIZONA-2.09%
Arizona (State of)
Educational Loan Marketing
Corp.; RB
6.125%, 09/01/02(b) - Aa 1,900 2,024,070
- ------------------------------------------------------------------
Gila (County of) Industrial
Development Authority
(ASARCO Inc.); Refunding
PCR
8.90%, 07/01/06 BBB Baa2 1,000 1,035,960
- ------------------------------------------------------------------
Mohave (County of) Unified
School District #1 (Lake
Havasu); Series 1996 A GO
5.90%, 07/01/15(c) AAA Aaa 1,000 1,083,340
- ------------------------------------------------------------------
Pima (County of) Unified
School District #10
(Amphitheater); School
Improvement
Series 1992 E GO
6.50%, 07/01/05 A+ A3 3,100 3,521,940
- ------------------------------------------------------------------
7,665,310
- ------------------------------------------------------------------
CALIFORNIA-1.55%
Foothill/Eastern Corridor
Agency (California Toll
Road Project); Senior Lien
Series A RB
6.00%, 01/01/16 BBB- Baa 400 427,536
- ------------------------------------------------------------------
Irvine Ranch Water District
Joint Powers Agency; Issue
II Series RB
8.25%, 08/15/23 A+ - 500 512,365
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
CALIFORNIA-(CONTINUED)
Los Angeles Unified School
District (Multiple
Properties Project);
Refunding Certificates of
Participation
5.625%, 11/01/13(c) AAA Aaa $3,000 $ 3,003,600
- ------------------------------------------------------------------
Sacramento (City of)
California Cogeneration
Authority (Procter &
Gamble Project); Series
1995 RB
7.00%, 07/01/04 BBB- - 500 566,035
- ------------------------------------------------------------------
San Francisco (City and
County of) Parking
Authority; Parking Meter
Series 1994 RB
7.00%, 06/01/13(c) AAA Aaa 1,000 1,167,490
- ------------------------------------------------------------------
5,677,026
- ------------------------------------------------------------------
COLORADO-1.00%
Adams County School District
Number 1; Unlimited Tax
Building Series 1992 A GO
6.625%, 12/01/02(d)(e) AAA Aaa 500 557,270
- ------------------------------------------------------------------
Colorado (State of) Housing
Finance Authority (Single
Family Residential
Housing); Series 1987 B RB
9.00%, 09/01/17 AA Aa1 360 368,212
- ------------------------------------------------------------------
Highlands Ranch Metro
District No. 1; Refunding
& Improvement Unlimited
Tax Series A GO
7.30%, 09/01/02(d)(e) NRR NRR 500 576,060
- ------------------------------------------------------------------
Mesa County School District
#51; 1989 Series B
Certificates of
Participation
6.875%, 12/01/05(c) AAA Aaa 1,465 1,619,323
- ------------------------------------------------------------------
Mountain Village Metro
District (San Miguel
County); Unlimited Tax
Refunding Series GO
7.95%, 12/01/03(f) - - 500 559,005
- ------------------------------------------------------------------
3,679,870
- ------------------------------------------------------------------
CONNECTICUT-3.42%
Bridgeport (City of);
Unlimited Tax Series A GO
6.00%, 09/01/06 AAA Aaa 1,000 1,117,850
- ------------------------------------------------------------------
Connecticut (State of);
General Purpose Public
Improvement Series 1992-A
GO
6.50%, 03/15/02(d)(e) NRR NRR 5,500 6,062,320
- ------------------------------------------------------------------
Connecticut (State of)
Health and Education
Facility Authority;
Special Care Hospital
Series B RB
5.375%, 07/01/17 BBB Baa2 500 496,120
- ------------------------------------------------------------------
Connecticut (State of)
Housing Finance Authority;
Housing Mortgage Financing
Program
Sub-Series C-2 RB
5.85%, 11/15/28(b) AA Aa3 1,000 1,028,350
- ------------------------------------------------------------------
Connecticut Resource
Recovery Authority
(American Ref-Fuel Co.)
(Southeastern Connecticut
Project); Corporate Credit
Series 1988 RB
8.10%, 11/15/15(b) A A2 925 981,555
- ------------------------------------------------------------------
</TABLE>
FS-88
<PAGE> 222
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
CONNECTICUT-(CONTINUED)
Connecticut Resource
Recovery Authority
(American Ref-Fuel Co.)
(Southeastern Connecticut
Project); Series 1988 A RB
7.875%, 11/15/06(b) AA- Baa1 $1,700 $ 1,800,742
- ------------------------------------------------------------------
8.00%, 11/15/15(b) AA- Baa1 1,000 1,060,300
- ------------------------------------------------------------------
12,547,237
- ------------------------------------------------------------------
DELAWARE-0.08%
Delaware Economic
Development Authority
(Osteopathic Hospital
Association); Series A RB
6.75%, 01/01/13(d) - Aaa 250 291,015
- ------------------------------------------------------------------
FLORIDA-1.00%
Dade (County of) (Courthouse
Center Project); RB
5.90%, 04/01/10 - A3 500 532,535
- ------------------------------------------------------------------
Escambia (County of)
(Champion International
Corp. Project); PCR
6.90%, 08/01/22(b) BBB Baa1 1,125 1,260,990
- ------------------------------------------------------------------
Leon (County of);
Certificates of
Participation Series A RB
5.875%, 01/01/98 - Baa1 355 355,000
- ------------------------------------------------------------------
Miami (City of) Parking
System; Series 1992 A RB
6.70%, 10/01/06 A A 1,120 1,227,610
- ------------------------------------------------------------------
Plantation (City of) Health
Facilities Authority
(Covenant Retirement
Communities Inc.); RB
7.75%, 12/01/22 A- - 250 276,787
- ------------------------------------------------------------------
3,652,922
- ------------------------------------------------------------------
GEORGIA-0.59%
Georgia (State of) Housing and
Finance
Authority (Home Ownership
Opportunity Program);
Series C RB
6.50%, 12/01/11 AA+ Aa 975 1,050,485
- ------------------------------------------------------------------
Savannah (City of) Economic
Development Authority
(Hershey Foods Corp.
Project); IDR
6.60%, 06/01/12 A+ - 1,000 1,103,640
- ------------------------------------------------------------------
2,154,125
- ------------------------------------------------------------------
ILLINOIS-10.78%
Berwyn (City of) (Macneal
Memorial Hospital
Association); Hospital
Series 1991 RB
7.00%, 06/01/01(d)(e) AAA Aaa 3,250 3,608,443
- ------------------------------------------------------------------
Chicago Emergency Telephone
System; Unlimited Tax
Series GO
5.60%, 01/01/10(c) AAA Aaa 400 432,315
- ------------------------------------------------------------------
Chicago Midway Airport;
Series A RB
5.625%, 01/01/22(c) AAA Aaa 1,000 1,038,610
- ------------------------------------------------------------------
Chicago Wastewater
Transmission; Second Lien
Series RB
5.25%, 01/01/17(c) AAA Aaa 2,500 2,508,800
- ------------------------------------------------------------------
Cook (County of); Series
1992 B GO
5.75%, 11/15/02(d)(e) AAA Aaa 2,000 2,162,920
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
ILLINOIS-(CONTINUED)
Crestwood (City of); Revenue
Refunding Non-Qualified
Tax Increment Notes
7.25%, 12/01/08(f) - - $ 100 $ 106,936
- ------------------------------------------------------------------
Illinois (State of); Sales
Tax Series 1993 B RB
6.50%, 06/15/13 AAA Aa3 1,500 1,626,360
- ------------------------------------------------------------------
Illinois (State of);
Unlimited Tax Series GO
5.25%, 07/01/22(c) AAA Aaa 4,475 4,517,244
- ------------------------------------------------------------------
Illinois (State of)
Development Finance
Authority (CPC
International Project); PCR
6.75%, 05/01/16 - A2 2,500 2,703,150
- ------------------------------------------------------------------
Illinois Educational
Facilities Authority
(Northwestern University);
Adjustable Medium Term
Series RB
5.25%, 11/01/14(e) AA+ Aa1 1,000 1,013,330
- ------------------------------------------------------------------
Illinois Educational
Facilities Authority
(Shedd Aquarium Society);
RB
5.60%, 07/01/27(c) AAA Aaa 3,500 3,604,615
- ------------------------------------------------------------------
Illinois Health Facilities
Authority (Evangelical
Hospital Corp.); RB
6.25%, Series A
04/15/22(d) NRR NRR 1,000 1,137,430
- ------------------------------------------------------------------
6.25%, Series 1992-C
04/15/22(d) NRR NRR 1,150 1,308,045
- ------------------------------------------------------------------
Illinois Health Facilities
Authority (Franciscan
Sisters Health Care);
Refunding Series 1992 RB
6.40%, 09/01/04(c) AAA Aaa 2,475 2,725,866
- ------------------------------------------------------------------
Illinois Health Facilities
Authority (Memorial
Hospital); RB
7.25%, 05/01/22 BBB - 200 215,234
- ------------------------------------------------------------------
Illinois Health Facilities
Authority
(Ravenswood Hospital Medical
Center);
Refunding Series 1987 A RB
8.80%, 06/01/06 - Baa1 1,000 1,018,100
- ------------------------------------------------------------------
Kane (County of) School
District No. 131 (Aurora
East Side); Limited GO
5.35%, 01/01/04(c) AAA Aaa 1,000 1,057,050
- ------------------------------------------------------------------
Lake County Community
Consolidated School
District #73 (Hawthorn);
Unlimited Tax Series 1997
GO
5.45%, 01/01/12(c) - Aaa 1,950 2,092,448
- ------------------------------------------------------------------
Peoria and Pekin and
Waukegan (Cities of); GNMA
Collateralized Mortgage
Series 1990 RB
7.875%, 08/01/22(b) AAA - 130 137,912
- ------------------------------------------------------------------
Saint Charles (City of)
(Tri-City Center
Associates Limited
Project); IDR
7.50%, 11/01/13(f) - - 100 107,138
- ------------------------------------------------------------------
Tazewell County Community
High School District #303
(Pekin); Unlimited Tax
Series 1996 GO
5.625%, 01/01/14(c) AAA Aaa 1,435 1,510,940
- ------------------------------------------------------------------
University of Illinois
Auxiliary Facilities
System; Series 1991 RB
5.75%, 04/01/22 AA- Aa 4,750 4,881,100
- ------------------------------------------------------------------
39,513,986
- ------------------------------------------------------------------
</TABLE>
FS-89
<PAGE> 223
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
INDIANA-0.67%
Carmel Retirement Rental
Housing (Beverly
Enterprises Project);
Refunding Series RB
8.75%, 12/01/08(f) - - $ 95 $ 106,523
- ------------------------------------------------------------------
Columbus (City of) Four Star
School Building; First
Mortgage Series RB
6.00%, 01/15/06(b) AAA Aaa 1,000 1,113,610
- ------------------------------------------------------------------
Indiana (State of) Housing
Finance Authority; Series
B-1 RB
6.15%, 07/01/17 - Aaa 185 196,461
- ------------------------------------------------------------------
Indiana Municipal Power
Agency Power Supply;
Refunding Series A RB
5.75%, 01/01/18 A A1 500 501,195
- ------------------------------------------------------------------
Indiana Transportation
Finance Authority (Airport
Lease Facility); Series A
RB
6.25%, 11/01/02(d)(e) NRR Aaa 395 435,518
- ------------------------------------------------------------------
6.25%, 11/01/16 NRR A2 105 112,112
- ------------------------------------------------------------------
2,465,419
- ------------------------------------------------------------------
IOWA-0.33%
Iowa Finance Authority (Park
West Project); Refunding
Multifamily Series RB
8.00%, 10/01/23(f) - - 100 102,203
- ------------------------------------------------------------------
Iowa Finance Authority
(Trinity Regional Hospital
Project); Hospital
Facilities Refunding
Series 1997 RB
6.00%, 07/01/12(c) AAA Aaa 1,000 1,105,460
- ------------------------------------------------------------------
1,207,663
- ------------------------------------------------------------------
KANSAS-0.08%
Newton (City of) (Newton
Healthcare Corp.);
Hospital Series A RB
7.375%, 11/15/14 BBB- - 250 277,928
- ------------------------------------------------------------------
KENTUCKY-1.15%
Kentucky Economic
Development Finance
Authority (Appalachian
Regional Healthcare);
Refunding & Improvement
Hospital Systems Series RB
5.875%, 10/01/22 BBB - 1,000 1,027,590
- ------------------------------------------------------------------
Mount Sterling (City of);
Lease Funding Series 1993
A RB
6.15%, 03/01/13 - Aa 3,000 3,184,710
- ------------------------------------------------------------------
4,212,300
- ------------------------------------------------------------------
LOUISIANA-3.52%
Louisiana Public Facilities
Authority (Medical Center
at New Orleans Project);
RB
6.125%, 10/15/07(c) AAA - 2,775 2,971,498
- ------------------------------------------------------------------
Louisiana Public Facilities
Authority (Our Lady of
Lake Regional Hospital);
Hospital Refunding Series
C RB
6.00%, 12/01/07(c) AAA Aaa 2,500 2,678,475
- ------------------------------------------------------------------
Louisiana Public Facilities
Authority (Tulane
University of Louisiana);
RB
6.00%, 10/01/16(c) AAA Aaa 2,500 2,735,425
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
LOUISIANA-(CONTINUED)
New Orleans Levee District;
Series 1995 A RB
5.95%, 11/01/07(c) AAA Aaa $1,000 $ 1,108,960
- ------------------------------------------------------------------
Ouachita Parish Hospital
Service District No 1
(Glenwood Regional Medical
Center); Refunding Series
1996 RB
5.70%, 05/15/16(c) AAA Aaa 1,000 1,047,880
- ------------------------------------------------------------------
St. John Baptist Parish
(Sales Tax Distribution);
Public Improvement Series
1987 RB
7.60%, 01/01/08(d)(e) - NRR 500 614,505
- ------------------------------------------------------------------
7.60%, 01/01/09(d)(e) - NRR 500 624,780
- ------------------------------------------------------------------
West Feliciana Parish (Gulf
States Utility Co.);
Series A PCR
7.50%, 05/01/15 BB+ Ba1 1,000 1,135,710
- ------------------------------------------------------------------
12,917,233
- ------------------------------------------------------------------
MAINE-0.28%
Maine (State of) Education
Loan Authority; Education
Loan Series A-2 RB
6.95%, 12/01/07(b) - A 955 1,039,126
- ------------------------------------------------------------------
MARYLAND-0.54%
Maryland Health and Higher
Education Facilities
Authority (Doctors
Community Hospital Inc.);
Series 1990 RB
8.75%, 07/01/00(d)(e) AAA Aaa 1,000 1,129,460
- ------------------------------------------------------------------
Maryland State Community
Development Administration
(Department of Economic
and Community
Development); Single
Family Housing Refunding
Series 5 RB
7.70%, 04/01/15(b) - Aa2 790 837,075
- ------------------------------------------------------------------
1,966,535
- ------------------------------------------------------------------
MASSACHUSETTS-4.54%
Massachusetts (State of);
Consolidated Loan Series
1991 C GO
7.00%, 08/01/01(d)(e) NRR NRR 2,450 2,721,656
- ------------------------------------------------------------------
Massachusetts Health and
Education Facilities
Authority (Lowell General
Hospital); Series 1991 A
RB
8.40%, 06/01/01(d)(e) NRR NRR 3,550 4,091,837
- ------------------------------------------------------------------
Massachusetts Health and
Education Facilities
Authority (Valley Regional
Health System Issue);
Series 1990 B RB
8.00%, 07/01/00(d)(e) NRR Aaa 3,000 3,335,640
- ------------------------------------------------------------------
Massachusetts Health and
Education Facilities
Authority (Winchester
Hospital); Series D RB
5.80%, 07/01/09(c) AAA - 1,000 1,068,300
- ------------------------------------------------------------------
Massachusetts Housing
Finance Authority; Single
Family
Series 13 RB
7.95%, 06/01/23(b) A+ Aa 1,675 1,791,932
- ------------------------------------------------------------------
</TABLE>
FS-90
<PAGE> 224
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MASSACHUSETTS-(CONTINUED)
Massachusetts Industrial
Finance Agency (Beverly
Enterprises); Refunding
Series RB
8.00%, 05/01/02(f) - - $ 250 $ 271,213
- ------------------------------------------------------------------
Massachusetts Municipal
Wholesale Electric
Cooperative Power Supply;
System Series 1992 A RB
6.75%, 07/01/08(c) AAA Aaa 3,000 3,374,040
- ------------------------------------------------------------------
16,654,618
- ------------------------------------------------------------------
MICHIGAN-3.94%
Detroit (City of) School
District; School Building
and Site Unlimited Tax
Series 1992 GO
6.00%, 05/01/05 AA Aa2 1,000 1,069,070
- ------------------------------------------------------------------
6.15%, 05/01/07 AA Aa2 1,300 1,392,001
- ------------------------------------------------------------------
Lake Orion Community School
District; School Building
and Site Unlimited Tax
Refunding Series 1994 GO
7.00%, 05/01/05(d)(e) AAA Aaa 2,500 2,938,125
- ------------------------------------------------------------------
Lakeview Community School
District; Unlimited Tax
Series 1996 GO
5.75%, 05/01/16(c) AAA Aaa 1,000 1,060,600
- ------------------------------------------------------------------
Lincoln Park (City of)
School District; Unlimited
Tax Series 1996 GO
6.00%, 05/01/12(c) AAA Aaa 1,210 1,320,158
- ------------------------------------------------------------------
Michigan (State of) Housing
Development Authority;
Refunding Series A RB
6.60%, 04/01/12 A+ - 1,000 1,062,830
- ------------------------------------------------------------------
Michigan (State of)
Underground Storage Tank
Financial Assurance
Authority; Refunding
Series I RB
6.00%, 05/01/05(c) AAA Aaa 1,000 1,105,050
- ------------------------------------------------------------------
Ypsilanti (City of) School
District; Refunding
Unlimited Tax Series 1996
GO
5.75%, 05/01/15(b) AAA Aaa 2,100 2,232,090
- ------------------------------------------------------------------
5.75%, 05/01/16(b) AAA Aaa 2,175 2,303,456
- ------------------------------------------------------------------
14,483,380
- ------------------------------------------------------------------
MINNESOTA-0.32%
Centennial Independent
School District No. 12;
Unlimited Tax Series A GO
5.60%, 02/01/05(c) AAA Aaa 1,000 1,081,650
- ------------------------------------------------------------------
Minneapolis Health Care
Facilities (Ebenezer
Society Project); Series A
RB
7.00%, 07/01/12(f) - - 100 102,012
- ------------------------------------------------------------------
1,183,662
- ------------------------------------------------------------------
MISSISSIPPI-1.57%
Mississippi Higher Education
Assistance Corp.; Student
Loan Series 1994 C RB
7.50%, 09/01/09(b) - A 5,000 5,463,100
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
MISSISSIPPI-(CONTINUED)
Ridgeland Urban Renewal (The
Orchard Limited Project);
Refunding Series A RB
7.75%, 12/01/15(f) - - $ 250 $ 273,468
- ------------------------------------------------------------------
5,736,568
- ------------------------------------------------------------------
MISSOURI-1.25%
Joplin Industrial
Development Authority
(Catholic Health
Initiatives); Refunding
Series A RB
5.125%, 12/01/15 AA Aa2 1,350 1,347,570
- ------------------------------------------------------------------
Kansas City Industrial
Development Authority
(General Motors Corp.
Project); PCR
6.05%, 04/01/06 A- A3 1,435 1,480,690
- ------------------------------------------------------------------
Kansas City Municipal
Assistance Corp.(Truman
Medical Center Charitable
Foundation); Leasehold
Improvement Series 1991 A
RB
7.00%, 11/01/08 A A3 605 659,033
- ------------------------------------------------------------------
Missouri (State of)
Environmental Improvement
and Energy Resources;
Series 1995 C PCR
5.85%, 01/01/10 - Aa1 1,000 1,079,990
- ------------------------------------------------------------------
4,567,283
- ------------------------------------------------------------------
NEVADA-1.54%
Humboldt (County of) (Sierra
Pacific Project); Series
1987 PCR
6.55%, 10/01/13(c) AAA Aaa 3,000 3,284,520
- ------------------------------------------------------------------
Las Vegas (City of);
Refunding 1992 Limited Tax
GO
6.50%, 04/01/02(d)(e) AAA Aaa 1,000 1,103,040
- ------------------------------------------------------------------
Reno Redevelopment Agency;
Refunding Sub-Series A Tax
Allocation Notes
6.00%, 06/01/10 - Baa 1,185 1,242,591
- ------------------------------------------------------------------
5,630,151
- ------------------------------------------------------------------
NEW HAMPSHIRE-1.17%
New Hampshire Higher
Educational & Health
Facilities Authority
(Daniel Webster College);
RB
7.625%, 07/01/16(f) - - 100 104,740
- ------------------------------------------------------------------
New Hampshire State Turnpike
System; Series 1990 RB
7.40%, 04/01/00(d)(e) AAA Aaa 3,850 4,194,845
- ------------------------------------------------------------------
4,299,585
- ------------------------------------------------------------------
NEW JERSEY-1.40%
Hudson County Correctional
Facility; Certificates of
Participation Series 1992
RB
6.60%, 12/01/21(c) AAA Aaa 1,250 1,356,075
- ------------------------------------------------------------------
Lacey School District;
Unlimited Tax Series 1996
GO
5.30%, 11/01/06(c) AAA Aaa 1,000 1,074,970
- ------------------------------------------------------------------
New Jersey City Economic
Development Authority
(Atlantic City Sewer Co.);
Sewer Facility Series 1991
RB
7.25%, 12/01/11(b)(f) - - 1,795 1,986,311
- ------------------------------------------------------------------
</TABLE>
FS-91
<PAGE> 225
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
NEW JERSEY-(CONTINUED)
New Jersey City Economic
Development Authority
(Franciscan Oaks Project);
First Mortgage Series RB
5.70%, 10/01/17(f) - - $ 500 $ 504,335
- ------------------------------------------------------------------
New Jersey Health Care
Facility Financing
Authority (St. Peters
Medical Center); Series
1987 C RB
8.60%, 07/01/17(c) AAA Aaa 200 204,500
- ------------------------------------------------------------------
5,126,191
- ------------------------------------------------------------------
NEW MEXICO-1.65%
Albuquerque (City of)
(Albuquerque Academy
Project); Educational
Facilities Series 1995 RB
5.75%, 10/15/15 AA- Aa2 915 960,192
- ------------------------------------------------------------------
Las Cruces South Central Solid Waste
Authority; Environmental
Services RB
5.65%, 06/01/09 - A 575 598,219
- ------------------------------------------------------------------
Los Alamos (County of);
Utility Series A RB
6.00%, 07/01/15(c) AAA Aaa 2,000 2,144,060
- ------------------------------------------------------------------
Santa Fe (City of); Series
1994 A RB
6.25%, 06/01/04(d)(e) AAA Aaa 2,100 2,326,968
- ------------------------------------------------------------------
6,029,439
- ------------------------------------------------------------------
NEW YORK-10.39%
New York (City of); GO
8.25%, Unlimited Tax
Series 1991 F
11/15/01(d)(e) AAA Aaa 1,840 2,133,388
- ------------------------------------------------------------------
7.00%, Unlimited Tax
Series C, Sub-Series C-1
08/01/02(d)(e) NRR Aaa 55 62,022
- ------------------------------------------------------------------
7.00%, Unlimited Tax
Series H 02/01/02(d)(e) NRR NRR 175 195,015
- ------------------------------------------------------------------
7.20%, Unlimited Tax
Series H 02/01/02(d)(e) NRR NRR 335 375,793
- ------------------------------------------------------------------
7.70%, Series D
02/01/02(d)(e) NRR Aaa 1,840 2,101,814
- ------------------------------------------------------------------
7.65%, Series 1992 F
02/01/02(d)(e) NRR NRR 4,295 4,898,190
- ------------------------------------------------------------------
7.375%, Unlimited Tax
Series B, Sub-Series B-1
08/15/04(d)(e) NRR Aaa 60 70,964
- ------------------------------------------------------------------
7.65%, Series 1992 F
02/01/06 BBB+ Baa1 480 540,874
- ------------------------------------------------------------------
7.70%, Series D 02/01/09 BBB+ Baa1 160 180,331
- ------------------------------------------------------------------
7.375%, Unlimited Tax
Series B, Sub-Series B-1
08/15/13 BBB+ Baa1 440 507,778
- ------------------------------------------------------------------
7.20%, Unlimited Tax
Series H 02/01/15 BBB+ Baa1 165 182,741
- ------------------------------------------------------------------
8.25%, Unlimited Tax
Series 1991 F 11/15/15 BBB+ Baa1 160 182,981
- ------------------------------------------------------------------
6.25%, Unlimited Tax
Series A 08/01/17 BBB+ Baa1 3,035 3,260,440
- ------------------------------------------------------------------
7.00%, Unlimited Tax
Series C, Sub-Series C-1
08/01/17 BBB+ Baa1 1,945 2,153,912
- ------------------------------------------------------------------
7.00%, Series B
02/01/18(c) AAA Aaa 1,000 1,112,390
- ------------------------------------------------------------------
7.00%, Unlimited Tax
Series H 02/01/20 BBB+ Baa1 175 192,189
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
NEW YORK-(CONTINUED)
New York City Industrial
Development Agency
(Brooklyn Navy Yard Cogen
Partners); RB
5.65%, 10/01/28(b) BBB- Baa3 $ 500 $ 502,205
- ------------------------------------------------------------------
New York City Industrial
Development Agency (The
Lighthouse Inc. Project);
Series 1992 RB
6.50%, 07/01/22(g) AA Aa2 1,500 1,607,175
- ------------------------------------------------------------------
New York City Industrial
Development Agency
(Marymount Manhattan
College Project); RB
7.00%, 07/01/23(f) - - 150 161,162
- ------------------------------------------------------------------
New York City Municipal
Water Finance Authority;
Water & Sewer Systems
Series A RB
5.00%, 06/15/17 A- A2 1,350 1,333,422
- ------------------------------------------------------------------
New York State Dorm
Authority (City University
System); Series C RB
6.00%, 07/01/16 BBB+ Baa1 500 508,860
- ------------------------------------------------------------------
New York State Dorm
Authority (State
University Educational
Facilities); Refunding
Series A RB
6.50%, 05/15/06 A- A3 1,000 1,136,480
- ------------------------------------------------------------------
New York State Environmental
Facility Corp.; Water
Revenue Series E PCR
6.875%, 06/15/01(d)(e) NRR NRR 2,300 2,542,857
- ------------------------------------------------------------------
6.875%, 06/15/10 A Aa 1,100 1,211,287
- ------------------------------------------------------------------
New York & New Jersey Port
Authority; Consolidated
One Hundred & Ninth Series
RB
5.375%, 07/15/22 AA- A1 2,000 2,042,520
- ------------------------------------------------------------------
New York State Urban
Development Corp.; Capital
Facilities 1991 Series 3
RB
7.375%, 01/01/02(d)(e) NRR Aaa 7,850 8,888,948
- ------------------------------------------------------------------
38,085,738
- ------------------------------------------------------------------
NORTH CAROLINA-2.19%
North Carolina Eastern
Municipal Power Agency;
Series A RB
6.125%, 01/01/10(c) AAA Aaa 1,500 1,638,135
- ------------------------------------------------------------------
North Carolina Housing
Finance Agency; Single
Family-Series II RB
6.20%, 03/01/16 AA Aa2 625 669,181
- ------------------------------------------------------------------
North Carolina Medical Care
Community Health Care
Facilities (Glenaire
Project); First Mortgage
Series RB
5.75%, 07/01/19(f) - - 500 495,250
- ------------------------------------------------------------------
5.85%, 07/01/27(f) - - 500 498,600
- ------------------------------------------------------------------
North Carolina Municipal
Power Agency (No. 1
Catawba Electric Project);
Refunding RB
7.25%, 01/01/07 A- A3 2,750 3,234,880
- ------------------------------------------------------------------
North Carolina Municipal
Power Agency (No. 1
Catawba Electric Project);
Series 1990 RB
6.50%, 01/01/10(c)(d) AAA Aaa 260 297,497
- ------------------------------------------------------------------
6.50%, 01/01/10(c) AAA Aaa 1,115 1,186,984
- ------------------------------------------------------------------
8,020,527
- ------------------------------------------------------------------
</TABLE>
FS-92
<PAGE> 226
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
NORTH DAKOTA-0.42%
Grand Forks Senior Housing
(4000 Valley Square
Project); Special Term
Series RB
6.375%, 12/01/34(f) - - $ 500 $ 504,705
- ------------------------------------------------------------------
North Dakota Housing Finance
Agency; Home Mortgage
Series B RB
5.85%, 07/01/28(b) - Aa3 1,000 1,026,930
- ------------------------------------------------------------------
1,531,635
- ------------------------------------------------------------------
OHIO-2.63%
Cleveland (City of) Parking
Facilities; Improvement
Series RB
8.00%, 09/15/02(d)(e) NRR NRR 500 587,155
- ------------------------------------------------------------------
Fairfield (City of) Economic
Development (Beverly
Enterprises Project);
Refunding Series RB
8.50%, 01/01/03(f) - - 190 207,343
- ------------------------------------------------------------------
Fairfield (City of) School
District; Unlimited Tax
Series 1995 GO
6.10%, 12/01/15(c) AAA Aaa 1,000 1,092,160
- ------------------------------------------------------------------
Findlay (City of); Limited
Tax Series 1996 GO
5.875%, 07/01/17 AA- A1 1,000 1,055,680
- ------------------------------------------------------------------
Hamilton (County of);
Electric System Mortgage
Series 1998 RB
8.00%, 10/15/98(d)(e) AAA Aaa 1,000 1,052,300
- ------------------------------------------------------------------
Mason (City of) Health Care
Facilities (MCV Health
Care Facilities, Inc.);
Series 1990 RB
7.625%, 02/01/40(c) AAA - 2,170 2,401,170
- ------------------------------------------------------------------
Montgomery (County of)
(Grandview Hospital &
Medical Center); Refunding
Hospital Series RB
5.50%, 12/01/10 BBB - 1,000 1,013,020
- ------------------------------------------------------------------
Ohio Department of
Transportation (Panhandle
Rail Line Project); Series
1992 Certificates of
Participation
6.50%, 04/15/12(c) AAA Aaa 1,100 1,203,235
- ------------------------------------------------------------------
Washington (County of)
(Marietta Memorial
Hospital); Series B RB
7.00%, 09/01/12(c) AAA Aaa 1,000 1,013,650
- ------------------------------------------------------------------
9,625,713
- ------------------------------------------------------------------
OKLAHOMA-1.77%
McAlester (City of) Public
Works Authority; Refunding
and Improvement Series
1995 RB
5.50%, 12/01/10(c) AAA Aaa 975 1,058,636
- ------------------------------------------------------------------
Southern Oklahoma Memorial
Hospital Authority; Series
1993 A RB
5.60%, 02/01/00(d) NRR NRR 1,250 1,288,550
- ------------------------------------------------------------------
Tulsa (City of) Industrial
Authority (St. Johns
Hospital); RB
6.25%, 02/15/14 AA Aa3 2,000 2,162,940
- ------------------------------------------------------------------
Tulsa (City of) Industrial
Authority (Tulsa Regional
Medical Center); Hospital
Series RB
7.20%, 06/01/03(d)(e) AAA NRR 500 578,475
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
OKLAHOMA-(CONTINUED)
Tulsa Public Facilities
Authority-Capital
Improvements-Water System;
Series 1988 B RB
6.00%, 03/01/08 A+ - $1,305 $ 1,396,076
- ------------------------------------------------------------------
6,484,677
- ------------------------------------------------------------------
OREGON-0.96%
Marion (County of) (Ogden
Martin Systems); Refunding
Solid Waste & Electric
Series RB
5.50%, 10/01/06(c) AAA Aaa 1,000 1,089,590
- ------------------------------------------------------------------
Portland (City of) Sewer
System; Series 1994 A RB
6.20%, 06/01/04(d)(e) A+ A1 1,200 1,331,952
- ------------------------------------------------------------------
6.25%, 06/01/04(d)(e) A+ A1 1,000 1,112,730
- ------------------------------------------------------------------
3,534,272
- ------------------------------------------------------------------
PENNSYLVANIA-3.81%
Chester (County of) Health
and Educational Facilities
Authority (Jefferson
Health Systems); Series B
RB
5.375%, 05/15/27 AA- A1 4,000 4,019,440
- ------------------------------------------------------------------
Chester Upland School
Authority; Refunding
School Series B RB
5.25%, 09/01/21(c) AAA Aaa 1,000 1,007,460
- ------------------------------------------------------------------
Doylestown Hospital
Authority (Pine Run
Hospital); Hospital Series
A RB
7.20%, 07/01/23(f) - - 150 163,046
- ------------------------------------------------------------------
Lancaster (County of) Solid
Waste Management
Authority; Resource
Recovery System Series
1988 A RB
8.50%, 12/15/10(b) BBB A 3,500 3,626,210
- ------------------------------------------------------------------
Montgomery County Industrial
Development Authority
(Meadowood Corp. Project);
Refunding First Mortgage
Series A RB
10.25%, 12/01/00(d)(e) NRR NRR 100 113,502
- ------------------------------------------------------------------
Montgomery County Industrial
Development
Authority (Pennsburg
Nursing & Rehabilitation
Center); RB
7.625%, 07/01/18 - Ba3 100 111,242
- ------------------------------------------------------------------
Pennsylvania (State of);
Third Series GO
6.75%, 11/15/13(c) AAA Aaa 1,250 1,421,750
- ------------------------------------------------------------------
Pennsylvania Economic
Development Finance
Authority (Colver
Project); Resource
Recovery Series 1994 D RB
7.05%, 12/01/10(b) BBB- - 2,900 3,223,292
- ------------------------------------------------------------------
Scranton-Lackawanna Health &
Welfare Authority (Moses
Taylor Hospital Project);
Series B RB
8.50%, 07/01/01(d)(e) AAA NRR 250 289,290
- ------------------------------------------------------------------
13,975,232
- ------------------------------------------------------------------
</TABLE>
FS-93
<PAGE> 227
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
PUERTO RICO-1.51%
Puerto Rico (Commonwealth
of) Electric Power
Authority; Series 1991 P
RB 7.00%, 07/01/01(d)(e) NRR Aaa $1,325 $ 1,476,222
- ------------------------------------------------------------------
6.00%, Series 1989
07/01/10 BBB+ Baa1 4,000 4,057,680
- ------------------------------------------------------------------
5,533,902
- ------------------------------------------------------------------
RHODE ISLAND-0.68%
Rhode Island Depositors
Economic Protection Corp.;
Special Obligation Series
1992 A RB
6.95%, 08/01/02(d)(e) AAA Aaa 1,250 1,409,400
- ------------------------------------------------------------------
Rhode Island Housing and
Mortgage Finance Agency;
Homeownership Opportunity
Series 15 B RB
6.00%, 10/01/04 AA+ Aa2 1,000 1,079,020
- ------------------------------------------------------------------
2,488,420
- ------------------------------------------------------------------
SOUTH CAROLINA-0.60%
Piedmont Municipal Power
Agency; Refunding Electric
Series A RB
5.75%, 01/01/24 BBB Baa1 1,150 1,150,955
- ------------------------------------------------------------------
South Carolina State
Education Assistance
Authority; Guaranteed
Student Loan Series 1990
RB
6.60%, 09/01/01(b) AA - 500 529,010
- ------------------------------------------------------------------
South Carolina State Housing
Finance and Development
Authority; Homeownership
Mortgage Series 1990 C RB
7.50%, 07/01/05(b) AA Aa2 500 529,755
- ------------------------------------------------------------------
2,209,720
- ------------------------------------------------------------------
SOUTH DAKOTA-0.03%
South Dakota Health &
Educational Facilities
Authority (Huron Regional
Medical Center); RB
7.25%, 04/01/20 BBB - 100 110,939
- ------------------------------------------------------------------
TENNESSEE-1.20%
Franklin Industrial
Development Board
(Landings Apartment
Project); Multifamily
Housing Series A RB
5.75%, 04/01/10(c) AAA Aaa 1,165 1,224,928
- ------------------------------------------------------------------
Nashville and Davidson
(Counties of) Metropolitan
Government; Water and
Sewer Refunding Series
1986 RB
7.25%, 01/20/98(e) A A1 145 145,580
- ------------------------------------------------------------------
Shelby (County of);
Unlimited Tax School GO
6.00%, 03/01/02(d)(e) NRR NRR 1,000 1,074,310
- ------------------------------------------------------------------
Shelby County Health,
Educational & Housing
Facilities Board (Kirby
Pines); Health Care
Facilities Series A RB
6.25%, 11/15/16(f) - - 1,000 1,014,960
- ------------------------------------------------------------------
Tennessee Housing
Development Agency;
Homeownership Progressive
Series Q RB
6.80%, 07/01/17 AA Aa2 895 953,614
- ------------------------------------------------------------------
4,413,392
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
TEXAS-14.66%
Arlington Independent School
District; Refunding Series
1995 GO
5.75%, 02/15/21(c) - Aaa $1,000 $ 1,041,910
- ------------------------------------------------------------------
Austin (City of); Utility
System RB
6.50%, 05/15/01(d)(e) AAA Aaa 1,380 1,506,919
- ------------------------------------------------------------------
Austin Community College
District; Combined Fee
Revenue Building and
Refunding Series 1995 RB
6.10%, 02/01/13(c) AAA Aaa 1,115 1,205,839
- ------------------------------------------------------------------
Bellville Independent School
District; Unlimited Tax
School Building and
Refunding Series 1995 GO
6.125%, 02/01/20(c) - Aaa 830 897,637
- ------------------------------------------------------------------
Brazos (County of) Health
Facilities Development
Corp. (Franciscan Services
Corp.); Series A RB
5.375%, 01/01/22(c) AAA Aaa 2,000 2,026,500
- ------------------------------------------------------------------
Brazos Higher Education Loan
Authority Inc.; Student
Loan Refunding RB
6.30%, Refunding Series
1992 C-1 11/01/01(b) - Aa 325 343,888
- ------------------------------------------------------------------
6.45%, Series 1992 C-1
11/01/02(b) - Aa 1,135 1,216,141
- ------------------------------------------------------------------
6.50%, Series 1994 B-1
06/01/04(b) - A 260 280,831
- ------------------------------------------------------------------
Carrollton (City of); GO
5.75%, 08/15/16 AA- Aa 1,000 1,049,750
- ------------------------------------------------------------------
Comal County Industrial
Development Authority (The
Coleman Company, Inc.
Project); Industrial
Development Series 1980 RB
9.25%, 08/01/00(d) NRR NRR 840 907,158
- ------------------------------------------------------------------
Dallas (City of); Waterworks
and Sewer System Refunding
and Improvement Series RB
5.35%, 04/01/14 AA Aa 3,055 3,134,430
- ------------------------------------------------------------------
Dallas (City of); Waterworks
and Sewer System Series A
RB
6.00%, 10/01/14 AA Aa2 2,030 2,130,607
- ------------------------------------------------------------------
Dallas-Fort Worth Regional
Airport Authority; Airport
Series 1985 RB
6.10%, 11/01/07 AAA Aaa 200 200,496
- ------------------------------------------------------------------
6.10%, 11/01/07(c) A+ A1 430 433,255
- ------------------------------------------------------------------
Georgetown (City of);
Utility System Series 1995
A RB
6.20%, 08/15/15(c) AAA Aaa 1,500 1,618,560
- ------------------------------------------------------------------
Harris County; Toll Road
Unlimited Tax General
Obligation and Subordinate
Lien Refunding Series 1991
RB
6.75%, 08/01/14 AA Aa2 3,850 4,234,654
- ------------------------------------------------------------------
5.375%, 08/15/20(c) AAA Aaa 1,000 1,012,650
- ------------------------------------------------------------------
Harris County Health
Facilities Development
Corp. (Saint Luke's
Episcopal Hospital
Project); Series 1991 RB
6.70%, 02/15/03(d)(e) AAA NRR 1,000 1,108,960
- ------------------------------------------------------------------
</TABLE>
FS-94
<PAGE> 228
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
TEXAS-(CONTINUED)
Harris County Mental Health
and Mental Retardation
Authority; Refunding
Series 1992 RB
6.25%, 09/15/10(c) AAA Aaa $4,500 $ 4,817,565
- ------------------------------------------------------------------
Houston (City of); Refunding
Series 1992 C GO
6.25%, 03/01/02(d)(e) NRR NRR 1,470 1,577,854
- ------------------------------------------------------------------
Hurst, Euless, Bedford,
Texas Independent School
District; Refunding RB
6.50%, 08/15/04(c)(d)(e) AAA Aaa 640 718,253
- ------------------------------------------------------------------
6.50%, 08/15/24(c) AAA Aaa 360 396,636
- ------------------------------------------------------------------
Keller (City of) Independent
School District;
Certificates of
Participation Series 1994
RB
6.00%, 08/15/05(c) AAA Aaa 1,000 1,107,900
- ------------------------------------------------------------------
Lockhart (City of);
Certificates of
Participation Tax and
Utility Systems Series
1996 GO
5.85%, 08/01/11(c) AAA Aaa 605 653,146
- ------------------------------------------------------------------
5.90%, 08/01/16(c) AAA Aaa 1,100 1,161,204
- ------------------------------------------------------------------
North Texas Higher Education
Authority Inc.; Student
Loan Refunding Series D RB
6.10%, 04/01/08(b) - Aa 1,000 1,041,970
- ------------------------------------------------------------------
6.30%, 04/01/09(b) - A 500 523,865
- ------------------------------------------------------------------
Plano (City of) Independent
School District; Unlimited
Tax Series 1991 B GO
5.625%, 02/15/01(d)(e) AAA Aaa 2,500 2,610,075
- ------------------------------------------------------------------
Tarrant (County of) Texas
Water Control and
Improvement District #1;
Refunding Series 1993 RB
5.20%, 03/01/10 AAA Aaa 2,000 2,035,080
- ------------------------------------------------------------------
Texas (State of) Public
Property Finance Corp.
(Mental Health Mental
Retardation); Series 1996
RB
6.20%, 09/01/16 BBB+ - 1,590 1,665,541
- ------------------------------------------------------------------
Texas (State of); Unlimited
Tax Veteran's Land GO
6.40%, 12/01/24(b) AA Aa2 2,000 2,131,600
- ------------------------------------------------------------------
Texas (State of) Department
of Housing and Community
Affairs (Asmara Project);
Multifamily Housing Series
1996 A RB
6.30%, 01/01/16 A - 310 335,832
- ------------------------------------------------------------------
Texas (State of) Housing
Agency; Residential
Development Mortgage
Series 1987 D RB
8.40%, 07/01/20(b) A+ Aa 3,045 3,220,209
- ------------------------------------------------------------------
Texas (State of) Public
Finance Authority (General
Services Community
Projects); Refunding
Building Series A RB
5.00%, 02/01/15(c) AAA Aaa 1,500 1,493,115
- ------------------------------------------------------------------
Texas National Research
Laboratory Community
Financing Corp.
(Superconducting Super
Collider); Lease RB
7.10%, 12/01/01(d)(e) AAA Aaa 600 673,356
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
TEXAS-(CONTINUED)
Tyler Health Facilities
Development Corp. (Mother
Frances Hospital);
Hospital Series A RB
5.625%, 07/01/13 - Baa2 $1,000 $ 1,004,110
- ------------------------------------------------------------------
Victoria (County of) Texas
Hospital Citizens Medical
Center; RB
6.20%, 01/01/10(c) - Aaa 1,000 1,092,060
- ------------------------------------------------------------------
Weatherford (City of)
Independent School
District; Refunding Series
1994 GO
6.40%, 02/15/05(d)(e) AAA Aaa 1,000 1,101,020
- ------------------------------------------------------------------
53,710,576
- ------------------------------------------------------------------
UTAH-1.88%
Intermountain Power Agency
(Utah Power Supply); RB
5.00%, Series 1986 B,
07/01/16 A+ A1 1,550 1,492,061
- ------------------------------------------------------------------
5.00%, Series 1986 C,
07/01/18 A+ A1 950 906,633
- ------------------------------------------------------------------
Salt Lake (County of)
(Westminster College
Project); RB
5.75%, 10/01/27 BBB - 1,000 1,029,860
- ------------------------------------------------------------------
Utah (State of) Housing
Finance Agency; Federally
Insured Term Subordinate
Single Family Mortgage RB
6.30%, Series 1994 E-1,
07/01/06 A+ - 615 667,077
- ------------------------------------------------------------------
7.15%, Series 1994 G-1,
07/01/06 A+ A1 530 588,607
- ------------------------------------------------------------------
Utah (State of) Housing
Finance Agency; Series
1994 C RB
6.05%, 07/01/06 - A1 810 864,756
- ------------------------------------------------------------------
Utah (State of) Housing
Finance Agency; Single
Family Mortgage Series G2
RB
6.45%, 07/01/27(b) AAA Aaa 1,235 1,325,192
- ------------------------------------------------------------------
6,874,186
- ------------------------------------------------------------------
VIRGIN ISLANDS-1.08%
Virgin Islands Public
Finance Authority;
Matching Fund Loan Notes
Series A RB
7.25%, 10/01/18(f) - - 1,000 1,129,480
- ------------------------------------------------------------------
Virgin Islands Territory
(Hugo Insurance Claims
Fund); Special Tax Bond
Series 1991 GO
7.75%, 10/01/06(f) - - 2,565 2,838,532
- ------------------------------------------------------------------
3,968,012
- ------------------------------------------------------------------
VIRGINIA-0.67%
Covington-Alleghany (County
of) Industrial Development
Authority (Beverly
Enterprises); Refunding
Series RB
9.375%, 09/01/01(f) - - 55 61,612
- ------------------------------------------------------------------
Richmond (City of); Public
Improvement Refunding
Series B GO
6.25%, 01/15/18 AA A1 2,000 2,138,760
- ------------------------------------------------------------------
Virginia Housing Development
Authority; Commonwealth
Mortgage Series A RB
7.10%, 01/01/17 AA+ Aa1 250 264,552
- ------------------------------------------------------------------
2,464,924
- ------------------------------------------------------------------
</TABLE>
FS-95
<PAGE> 229
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
WASHINGTON-2.95%
Clark (County of) Gamas
School District #117; GO
6.00%, 12/01/14(c) AAA Aaa $1,000 $ 1,085,620
- ------------------------------------------------------------------
King (County of); Unlimited
Tax GO
5.50%, 07/01/07(d) AAA Aaa 500 533,480
- ------------------------------------------------------------------
King (County of); Unlimited
Tax Refunding GO
6.50%, 12/01/11 AA+ Aa1 500 500,975
- ------------------------------------------------------------------
Pend Oreille (County of)
Public Utility District
#1; Electric Series B RB
6.30%, 01/01/17 BBB+ A 1,400 1,477,448
- ------------------------------------------------------------------
Seattle (City of)
Metropolitan Municipality;
Refunding Unlimited Sales
Tax Series GO
6.875%, 01/01/20 A+ Aa 1,450 1,491,514
- ------------------------------------------------------------------
Seattle (City of)
Metropolitan Municipality
Sewer District; Series T
RB
6.80%, 01/01/00(d)(e) NRR NRR 1,780 1,904,296
- ------------------------------------------------------------------
Washington State Public
Power Supply System
(Nuclear Project No. 1);
Refunding Series A RB
6.00%, 07/01/07(c) AAA Aaa 1,000 1,109,880
- ------------------------------------------------------------------
5.75%, 07/01/12(c) AAA Aaa 2,000 2,131,320
- ------------------------------------------------------------------
West Richland (City of);
Water & Sewer Series RB
7.00%, 12/01/04(d)(e) AAA Aaa 500 578,250
- ------------------------------------------------------------------
10,812,783
- ------------------------------------------------------------------
WEST VIRGINIA-0.14%
Ohio County Board of
Education; Unlimited Tax
Refunding Series GO
5.125%, 06/01/18 A+ A 500 497,155
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR MARKET
S&P MOODY'S (000) VALUE
<S> <C> <C> <C> <C>
WISCONSIN-1.11%
Wisconsin Housing and
Economic Development
Authority; Home Ownership
RB
7.40%, Series 1994 F
07/01/13(b) AA Aa2 $1,000 $ 1,096,150
- ------------------------------------------------------------------
7.35%, Series 1994 E
01/01/17 AA Aa2 500 545,340
- ------------------------------------------------------------------
8.00%, Series 1990 E
03/01/21(b) AA Aa 300 316,472
- ------------------------------------------------------------------
Wisconsin Health and
Educational Facilities
Authority (Sinai Samaritan
Medical Center); Series
1994 F RB 5.75%,
08/15/16(c) AA Aa 1,500 1,576,515
- ------------------------------------------------------------------
Wisconsin Health and
Educational Facilities
Authority (Wheaton
Franciscan Services Inc.);
RB
8.20%, 08/15/98(d)(e) NRR Aaa 500 523,155
- ------------------------------------------------------------------
4,057,632
- ------------------------------------------------------------------
WYOMING-0.96%
Campbell (County of) School
District No. 1 (Gillette);
Unlimited Tax Series GO
5.35%, 06/01/04 AAA Aaa 1,000 1,064,510
- ------------------------------------------------------------------
Laramie (County of)
(Memorial Hospital
Project); Hospital
Series RB
6.70%, 05/01/12(c) AAA Aaa 250 276,915
- ------------------------------------------------------------------
Natrona (County of) Wyoming
Medical Center; RB
6.00%, 09/15/11(c) AAA Aaa 1,000 1,086,470
- ------------------------------------------------------------------
Sweetwater (County of)
(Idaho Power Company
Project); PCR
Series 1996 A RB
6.05%, 07/15/26 A A3 1,000 1,073,240
- ------------------------------------------------------------------
3,501,135
- ------------------------------------------------------------------
TOTAL INVESTMENTS-97.99% 359,123,485
- ------------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-2.01% 7,355,322
- ------------------------------------------------------------------
NET ASSETS-100.00% $366,478,807
==================================================================
</TABLE>
Notes to Schedule of Investments:
(a) Ratings assigned by Moody's Investors Service, Inc. ("Moody's") and Standard
& Poor's Corporation ("S&P"). NRR indicates a security that is not re-rated
subsequent to funding of an escrow fund (consisting of U.S. Treasury
obligations); this funding is pursuant to an advance refunding for the
security. Ratings are not covered by Independent Auditors' Report.
(b) Security subject to the alternative minimum tax.
(c) Secured by bond insurance.
(d) Secured by an escrow fund of U.S. Treasury obligations.
(e) Security has an irrevocable call or mandatory put by the issuer. Maturity
date reflects such call or put.
(f) Unrated security; determined by the investment advisor to be of comparable
quality to the rated securities in which the Fund may invest pursuant to
guidelines of quality adopted by the Board of Trustees and followed by the
investment advisor.
(g) Secured by a letter of credit.
Investment Abbreviations:
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
NRR - Not Re-Rated
PCR - Pollution Control Revenue Bonds
RB - Revenue Bonds
See Notes to Financial Statements.
FS-96
<PAGE> 230
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$331,790,903) $359,123,485
- ----------------------------------------------------------
Cash 787,976
- ----------------------------------------------------------
Receivables for:
Fund shares sold 488,687
- ----------------------------------------------------------
Interest 6,554,748
- ----------------------------------------------------------
Investments sold 830,750
- ----------------------------------------------------------
Investment for deferred compensation plan 65,053
- ----------------------------------------------------------
Other assets 28,067
- ----------------------------------------------------------
Total assets 367,878,766
- ----------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 95,828
- ----------------------------------------------------------
Dividends 699,674
- ----------------------------------------------------------
Deferred compensation plan 65,053
- ----------------------------------------------------------
Accrued advisory fees 140,726
- ----------------------------------------------------------
Accrued administrative service fees 5,442
- ----------------------------------------------------------
Accrued distribution fees 251,546
- ----------------------------------------------------------
Accrued trustees' fees 2,970
- ----------------------------------------------------------
Accrued transfer agent fees 106,994
- ----------------------------------------------------------
Accrued operating expenses 31,726
- ----------------------------------------------------------
Total liabilities 1,399,959
- ----------------------------------------------------------
Net assets applicable to shares outstanding $366,478,807
==========================================================
NET ASSETS:
Class A $318,468,805
==========================================================
Class B $ 47,185,232
==========================================================
Class C $ 824,770
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 38,171,168
==========================================================
Class B 5,647,120
==========================================================
Class C 98,779
==========================================================
Class A:
Net asset value and redemption price per
share $ 8.34
==========================================================
Offering price per share:
(Net asset value of $8.34
divided by 95.25%) $ 8.76
==========================================================
Class B:
Net asset value and offering price per
share $ 8.36
==========================================================
Class C:
Net asset value and offering price per
share $ 8.35
==========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $20,118,944
- ----------------------------------------------------------
EXPENSES:
Advisory fees 1,532,157
- ----------------------------------------------------------
Administrative service fees 70,780
- ----------------------------------------------------------
Custodian fees 17,893
- ----------------------------------------------------------
Transfer agent fees - Class A 240,369
- ----------------------------------------------------------
Transfer agent fees - Class B 32,698
- ----------------------------------------------------------
Transfer agent fees - Class C 124
- ----------------------------------------------------------
Trustees' fees 10,573
- ----------------------------------------------------------
Distribution fees - Class A 732,575
- ----------------------------------------------------------
Distribution fees - Class B 398,613
- ----------------------------------------------------------
Distribution fees - Class C 1,511
- ----------------------------------------------------------
Other 268,154
- ----------------------------------------------------------
Total expenses 3,305,447
- ----------------------------------------------------------
Less: Expenses paid indirectly (4,966)
- ----------------------------------------------------------
Net expenses 3,300,481
- ----------------------------------------------------------
Net investment income 16,818,463
- ----------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT
SECURITIES:
Net realized gain on sales of investment
securities 114,781
- ----------------------------------------------------------
Net unrealized appreciation of investment
securities 9,751,922
- ----------------------------------------------------------
Net gain on investment securities 9,866,703
- ----------------------------------------------------------
Net increase in net assets resulting from
operations $26,685,166
==========================================================
</TABLE>
See Notes to Financial Statements.
FS-97
<PAGE> 231
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 16,818,463 $ 15,871,748
- ------------------------------------------------------------------------------------------
Net realized gain on sales of investment securities 114,781 118,748
- ------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investment
securities 9,751,922 (4,496,798)
- ------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 26,685,166 11,493,698
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (15,139,605) (14,634,820)
- ------------------------------------------------------------------------------------------
Class B (1,703,002) (1,210,672)
- ------------------------------------------------------------------------------------------
Class C (5,880) --
- ------------------------------------------------------------------------------------------
Distributions in excess of net investment income:
Class A (152,238) --
- ------------------------------------------------------------------------------------------
Class B (20,640) --
- ------------------------------------------------------------------------------------------
Class C (62) --
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A 30,852,332 (1,870,211)
- ------------------------------------------------------------------------------------------
Class B 12,563,423 12,523,478
- ------------------------------------------------------------------------------------------
Class C 817,511 --
- ------------------------------------------------------------------------------------------
Net increase in net assets 53,897,005 6,301,473
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 312,581,802 306,280,329
- ------------------------------------------------------------------------------------------
End of period $366,478,807 $312,581,802
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $340,696,817 $296,629,932
- ------------------------------------------------------------------------------------------
Undistributed net investment income (71,348) (34,765)
- ------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) on investment
securities (1,479,244) (1,594,025)
- ------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 27,332,582 17,580,660
- ------------------------------------------------------------------------------------------
$366,478,807 $312,581,802
==========================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Municipal Bond Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of nine separate series
portfolios, each having an unlimited number of shares of beneficial interest.
The Fund currently offers three different classes of shares: the Class A shares,
the Class B shares, and the Class C shares. The new Class C shares commenced
sales on August 4, 1997. Class A shares are sold with a front-end sales charge.
Class B and Class C shares are sold with a contingent deferred sales charge.
Matters affecting each portfolio or class are voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's objective is to
achieve a high level of current income exempt from federal income taxes
consistent with the preservation of principal by investing in a diversified
portfolio of municipal bonds.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- Portfolio securities are valued based on market
quotations or at fair value determined by a pricing service approved by the
Board of Trustees, provided that securities with a demand feature exercisable
within one to seven days will be valued at par. Prices provided by the
pricing service may be determined without exclusive reliance on quoted prices
and may reflect appropriate factors such as institution-size trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, individual trading characteristics and other market data. Portfolio
securities for which prices are not provided by the pricing service are
valued at the mean between the last available bid and asked prices, unless
the Board of Trustees, or persons designated by the Board of Trustees,
determines that the mean between the last available bid and asked prices does
not accurately reflect the current market value of the security. Securities
for which market quotations either are not readily available or are
questionable are valued at fair value as determined in good faith by or under
the supervision of the Trust's officers in a manner specifically authorized
by the Board of Trustees. Notwithstanding the above, short-term
FS-98
<PAGE> 232
obligations with maturities of 60 days or less are valued at amortized cost.
B. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. It is the policy of the Fund to declare
daily dividends from net investment income. Such dividends are paid monthly.
Distributions from net realized capital gains, if any, are recorded on
ex-dividend date and are paid annually. On December 31, 1997, undistributed
net investment income was increased by $166,381 and paid-in capital reduced
by $166,381 in order to comply with the requirements of the American
Institute of Certified Public Accountants Statement of Position 93-2. Net
assets of the Fund were unaffected by the reclassifications discussed above.
C. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements. The Fund has a capital loss
carryforward of $1,479,245 (which may be carried forward to offset future
taxable capital gains, if any) which expires, if not previously utilized, in
the year 2002. The Fund cannot distribute capital gains to shareholders until
the tax loss carryforwards have been utilized.
D. Expenses -- Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses which are attributable to more than one class are allocated among
the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.50% of
the first $200 million of the Fund's average daily net assets, plus 0.40% of the
Fund's average daily net assets in excess of $200 million to and including $500
million, plus 0.35% of the Fund's average daily net assets in excess of $500
million to and including $1 billion, plus 0.30% of the Fund's average daily net
assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended December 31, 1997, AIM
was reimbursed $70,780 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund. During the year ended December 31, 1997, AFS
was paid $113,921 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted
distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares and Class C shares (the "Class A and C Plan"), and the
Fund's Class B shares (the "Class B Plan") (collectively, the "Plans"). The
Fund, pursuant to the Class A and C Plan, pays AIM Distributors compensation at
an annual rate of 0.25% of the average daily net assets of the Class A shares
and 1.00% of the average daily net assets of the Class C shares. The Fund,
pursuant to the Class B Plan, pays AIM Distributors an annual rate of 1.00% of
the average daily net assets attributable to the Class B shares. Of these
amounts, the Fund may pay a service fee of 0.25% of the average daily net assets
of the Class A, Class B or Class C shares to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own the appropriate class of shares of the Fund. Any
amounts not paid as a service fee by the Class B or Class C shares under the
Plans would constitute an asset-based sales charge. The Plans also impose a cap
on the total sales charges, including asset-based sales charges that may be paid
by the respective classes. AIM Distributors may, from time to time, assign,
transfer, or pledge to one or more designees, its rights to all or a designated
portion of (a) compensation received by AIM Distributors from the Fund pursuant
to the Class B Plan (but not AIM Distributors' duties and obligations pursuant
to the Class B Plan) and (b) any contingent deferred sales charges received by
AIM Distributors related to the Class B shares. During the year ended December
31, 1997, for the Class A shares and Class B shares and the period August 4,
1997 (date sales commenced) through December 31, 1997, the Class A, Class B and
Class C shares paid AIM Distributors $732,575, $398,613, and $1,511
respectively, as compensation under the Plans.
AIM Distributors received commissions of $87,434 from sales of the Class A
shares of the Fund during the year ended December 31, 1997. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1997,
AIM Distributors received $44,830 in contingent deferred sales charges imposed
on redemptions of Fund shares. Certain officers and trustees of the Trust are
officers and directors of AIM, AIM Distributors and AFS.
During the year ended December 31, 1997, the Fund paid legal fees of $5,021
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 4-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 15, 1997, the Fund was
limited to borrowing up to the lesser of (i) $325,000,000 or (ii) the limits set
by its prospectus for borrowings. During the year ended December 31, 1997, the
Fund did not borrow under the line of credit agreement. The funds which are
parties to the line of credit are charged a commitment fee of 0.05% on the
unused balance of the committed line. The commitment fee is allocated among such
funds based on their respective average net assets for the period.
NOTE 5-INDIRECT EXPENSES
AIM has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses related to pricing services used by the Fund which reduced Fund
expenses by $1,233 during the year ended December 31, 1997. Also during the year
ended December 31, 1997, the Fund received a reduction in transfer agency fees
from AFS (an affiliate of AIM) of $3,733, under an expense offset arrangement.
The effect of the above arrangements resulted in reductions of the Fund's total
expenses of $4,966 during the year ended December 31, 1997.
FS-99
<PAGE> 233
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1997 was
$94,911,754 and $78,890,833, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
on a tax basis, as of December 31, 1997 was as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of investment securities $27,334,470
- ------------------------------------------------------------------------------------------------------------------------
Aggregate unrealized (depreciation) of investment securities (1,888)
- ------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investment securities $27,332,582
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Investments have the same cost for tax and financial statement purposes.
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
-------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold:
Class A 10,031,224 $ 79,386,539 5,797,996 $ 47,332,136
- ------------------------------------------------------------ -------------------------- ---------------------------
Class B 2,368,696 19,504,059 2,660,265 21,695,791
- ------------------------------------------------------------ -------------------------- ---------------------------
Class C* 111,584 923,229 -- --
- ------------------------------------------------------------ -------------------------- ---------------------------
Issued as reinvestment of dividends:
Class A 1,051,195 8,642,466 1,054,624 8,611,381
- ------------------------------------------------------------ -------------------------- ---------------------------
Class B 131,460 1,082,551 85,876 701,022
- ------------------------------------------------------------ -------------------------- ---------------------------
Class C* 510 4,239 -- --
- ------------------------------------------------------------ -------------------------- ---------------------------
Reacquired:
Class A (6,962,233) (57,176,673) (7,075,891) (57,813,728)
- ------------------------------------------------------------ -------------------------- ---------------------------
Class B (975,132) (8,023,187) (1,208,742) (9,873,335)
- ------------------------------------------------------------ -------------------------- ---------------------------
Class C* (13,315) (109,957) -- --
- ------------------------------------------------------------ -------------------------- ---------------------------
5,743,989 $ 44,233,266 1,314,128 $ 10,653,267
============================================================ ========================== ===========================
</TABLE>
* Class C shares commenced sales on August 4, 1997.
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A outstanding
during each of the years in the five-year period ended December 31, 1997, for a
share of Class B outstanding during each of the years in the four-year period
ended December 31, 1997 and the period September 1, 1993 (date sales commenced)
through December 31, 1993, and for a share of Class C outstanding during the
period August 4, 1997 (date sales commenced) through December 31, 1997.
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.19 $ 8.31 $ 7.78 $ 8.61 $ 8.27
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.42 0.43 0.43 0.46 0.48
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Net gains (losses) on securities
(both realized and unrealized) 0.16 (0.12) 0.56 (0.78) 0.46
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Total from investment operations 0.58 0.31 0.99 (0.32) 0.94
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.43) (0.43) (0.43) (0.45) (0.48)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Distributions from net realized gains -- -- -- (0.03) (0.11)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Returns of capital -- -- (0.03) (0.03) (0.01)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Total distributions (0.43) (0.43) (0.46) (0.51) (0.60)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Net asset value, end of period $ 8.34 $ 8.19 $ 8.31 $ 7.78 $ 8.61
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Total return(a) 7.27% 3.90% 13.05% (3.79)% 11.66%
============================================================ ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $318,469 $278,812 $284,803 $257,456 $294,209
============================================================ ======== ======== ======== ======== ========
Ratio of expenses to average net assets 0.90%(b)(c) 0.80% 0.88% 0.89% 0.91%
============================================================ ======== ======== ======== ======== ========
Ratio of net investment income to average net assets 5.14%(b) 5.29% 5.26% 5.61% 5.65%
============================================================ ======== ======== ======== ======== ========
Portfolio turnover rate 24% 26% 36% 43% 24%
============================================================ ======== ======== ======== ======== ========
</TABLE>
(a) Does not deduct sales charges.
(b) Ratios are based on average daily net assets of $293,030,139.
(c) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
FS-100
<PAGE> 234
<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------------- -------
1997 1996 1995 1994 1993 1997
---- ------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.19 $ 8.31 $ 7.78 $ 8.61 $ 8.71 $ 8.30
- -------------------------------------------------------- ------- ------- ------- ------ ------ ------
Income from investment operations:
Net investment income 0.36 0.37 0.39 0.39 0.14 0.15
- -------------------------------------------------------- ------- ------- ------- ------ ------ ------
Net gains (losses) on securities (both realized and
unrealized) 0.17 (0.13) 0.54 (0.78) 0.01 0.04
- -------------------------------------------------------- ------- ------- ------- ------ ------ ------
Total from investment operations 0.53 0.24 0.93 (0.39) 0.15 0.19
- -------------------------------------------------------- ------- ------- ------- ------ ------ ------
Less distributions:
Dividends from net investment income (0.36) (0.36) (0.37) (0.38) (0.13) (0.14)
- -------------------------------------------------------- ------- ------- ------- ------ ------ ------
Distributions from net realized gains -- -- -- (0.03) (0.11) --
- -------------------------------------------------------- ------- ------- ------- ------ ------ ------
Returns of capital -- -- (0.03) (0.03) (0.01) --
- -------------------------------------------------------- ------- ------- ------- ------ ------ ------
Total distributions (0.36) (0.36) (0.40) (0.44) (0.25) (0.14)
- -------------------------------------------------------- ------- ------- ------- ------ ------ ------
Net asset value, end of period $ 8.36 $ 8.19 $ 8.31 $ 7.78 $ 8.61 $ 8.35
======================================================== ======= ======= ======= ====== ====== ======
Total return(a) 6.59% 2.99% 12.14% (4.57)% 1.95% 2.36%
======================================================== ======= ======= ======= ====== ====== ======
Ratios/supplemental data:
Net assets, end of period (000s omitted) $47,185 $33,770 $21,478 $9,175 $2,319 $ 825
======================================================== ======= ======= ======= ====== ====== ======
Ratio of expenses to average net assets(b) 1.66%(c)(d) 1.61% 1.68% 1.67% 1.65%(e) 1.67%(c)(d)(e)
======================================================== ======= ======= ======= ====== ====== ======
Ratio of net investment income to average net assets(f) 4.38%(c) 4.49% 4.46% 4.83% 4.91%(e) 4.37%(c)(e)
======================================================== ======= ======= ======= ====== ====== ======
Portfolio turnover rate 24% 26% 36% 43% 24% 24%
======================================================== ======= ======= ======= ====== ====== ======
</TABLE>
(a) Does not deduct contingent deferred sales charges and are not annualized for
periods less than one year.
(b) After fee waivers and/or expense reimbursements. Ratios of expenses to
average daily net assets prior to fee waivers and/or expense reimbursements
were 1.77%, 1.84% and 3.08% (annualized) for the periods 1995-1993,
respectively.
(c) Ratios are based on average daily net assets of $39,861,298 and $367,550,
respectively for Class B and Class C.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid indirectly,
the ratio of expenses to average net assets would have been the same.
(e) Annualized.
(f) After fee waivers and/or expense reimbursements. Ratios of net investment
income to average daily net assets prior to fee waivers and/or expense
reimbursements are 4.37%, 4.66% and 3.48% (annualized) for the periods
1995-1993, respectively.
FS-101
<PAGE> 235
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders of
AIM Value Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Value Fund (a portfolio of AIM Funds
Group), including the schedule of investments, as of
December 31, 1997, and the related statement of
operations for the year then ended, the statement of
changes in net assets for each of the years in the
two-year period then ended and the financial highlights
for each of the years or periods in the five-year period
then ended. These financial statements and financial
highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion
on these financial statements and 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
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 and financial highlights. Our procedures
included confirmation of securities owned as of December
31, 1997, by correspondence with the custodian and
brokers. 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 financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM Value
Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its
net assets for each of the years in the two-year period
then ended and the financial highlights for each of the
years or periods in the five-year period then ended, in
conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
Houston, Texas
February 6, 1998
FS-102
<PAGE> 236
SCHEDULE OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
DOMESTIC COMMON STOCKS-66.18%
AEROSPACE/DEFENSE-0.43%
Boeing Co. (The) 47,500 $ 2,324,530
- -------------------------------------------------------------
Lockheed Martin Corp. 34,900 3,437,650
- -------------------------------------------------------------
Orbital Sciences Corp.(a) 271,200 8,068,200
- -------------------------------------------------------------
Precision Castparts Corp. 738,300 44,528,718
- -------------------------------------------------------------
58,359,098
- -------------------------------------------------------------
AIRFREIGHT-0.24%
Airborne Freight Corp. 331,800 20,613,075
- -------------------------------------------------------------
Federal Express Corp.(a) 188,700 11,522,493
- -------------------------------------------------------------
32,135,568
- -------------------------------------------------------------
AIRLINES-0.64%
Continental Airlines,
Inc.(a) 1,800,000 86,625,000
- -------------------------------------------------------------
BANKS (MAJOR REGIONAL)-0.85%
Banc One Corp. 2,000,000 108,625,000
- -------------------------------------------------------------
Wachovia Corp. 87,400 7,090,325
- -------------------------------------------------------------
115,715,325
- -------------------------------------------------------------
BANKS (MONEY CENTER)-5.03%
BankAmerica Corp.(b) 3,300,000 240,900,000
- -------------------------------------------------------------
Chase Manhattan Corp. 1,855,400 203,166,300
- -------------------------------------------------------------
Citicorp (b) 1,900,000 240,231,250
- -------------------------------------------------------------
684,297,550
- -------------------------------------------------------------
BROADCASTING (TELEVISION, RADIO & CABLE)-0.28%
US West Media Group(a) 1,292,300 37,315,162
- -------------------------------------------------------------
BUILDING MATERIALS-0.19%
Masco Corp. 500,000 25,437,500
- -------------------------------------------------------------
CHEMICALS (SPECIALTY)-0.41%
Cytec Industries Inc.(a) 1,178,000 55,292,375
- -------------------------------------------------------------
COMMUNICATIONS EQUIPMENT-0.32%
Comverse Technology,
Inc.(a) 1,100,000 42,900,000
- -------------------------------------------------------------
COMPUTERS (HARDWARE)-1.73%
Compaq Computer Corp. 1,000,000 56,437,500
- -------------------------------------------------------------
Stratus Computer, Inc.(a) 700,000 26,468,750
- -------------------------------------------------------------
Sun Microsystems, Inc.(a) 3,800,000 151,525,000
- -------------------------------------------------------------
234,431,250
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
COMPUTERS (NETWORKING)-0.32%
Bay Networks, Inc.(a) 1,700,000 $ 43,456,250
- -------------------------------------------------------------
COMPUTERS (PERIPHERALS)-0.94%
Adaptec, Inc.(a) 1,000,000 37,125,000
- -------------------------------------------------------------
Quantum Corp.(a)(b) 4,500,000 90,281,250
- -------------------------------------------------------------
127,406,250
- -------------------------------------------------------------
COMPUTERS (SOFTWARE & SERVICES)-3.25%
America Online, Inc.(a) 250,000 22,296,875
- -------------------------------------------------------------
American Management
Systems, Inc.(a) 750,000 14,625,000
- -------------------------------------------------------------
Autodesk, Inc. 200,000 7,400,000
- -------------------------------------------------------------
Avant! Corp.(a) 65,600 1,098,800
- -------------------------------------------------------------
Computer Associates
International, Inc. 4,500,000 237,937,500
- -------------------------------------------------------------
Network Associates, Inc.(a) 891,690 47,148,108
- -------------------------------------------------------------
Sybase, Inc.(a) 3,000,000 39,937,500
- -------------------------------------------------------------
Unisys Corp.(a) 5,200,000 72,150,000
- -------------------------------------------------------------
442,593,783
- -------------------------------------------------------------
CONSUMER (JEWELRY, NOVELTIES & GIFTS)-0.29%
American Greetings
Corp.-Class A 1,000,000 39,125,000
- -------------------------------------------------------------
CONSUMER FINANCE-1.24%
Household International,
Inc. 490,500 62,569,406
- -------------------------------------------------------------
MBNA Corp. 1,747,800 47,736,787
- -------------------------------------------------------------
SLM Holding Corp. 421,000 58,571,625
- -------------------------------------------------------------
168,877,818
- -------------------------------------------------------------
ELECTRIC COMPANIES-0.31%
Allegheny Energy, Inc. 653,400 21,235,500
- -------------------------------------------------------------
Carolina Power & Light Co. 262,400 11,135,600
- -------------------------------------------------------------
Wisconsin Energy Corp. 339,400 9,757,750
- -------------------------------------------------------------
42,128,850
- -------------------------------------------------------------
ELECTRICAL EQUIPMENT-0.83%
American Power Conversion
Corp.(a) 2,700,000 63,787,500
- -------------------------------------------------------------
AVX Corp. 189,000 3,484,687
- -------------------------------------------------------------
SCI Systems, Inc.(a) 800,000 34,850,000
- -------------------------------------------------------------
Symbol Technologies, Inc. 302,200 11,408,050
- -------------------------------------------------------------
113,530,237
- -------------------------------------------------------------
ELECTRONICS (INSTRUMENTATION)-0.13%
Waters Corp.(a) 466,100 17,537,012
- -------------------------------------------------------------
</TABLE>
FS-103
<PAGE> 237
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
ELECTRONICS (SEMICONDUCTORS)-0.68%
Maxim Integrated Products,
Inc.(a) 1,249,000 $ 43,090,500
- -------------------------------------------------------------
Microchip Technology,
Inc.(a) 800,000 24,000,000
- -------------------------------------------------------------
National Semiconductor
Corp.(a) 1,000,000 25,937,500
- -------------------------------------------------------------
93,028,000
- -------------------------------------------------------------
ENTERTAINMENT-0.51%
Viacom, Inc.-Class B(a) 1,675,100 69,411,957
- -------------------------------------------------------------
FINANCIAL (DIVERSIFIED)-4.95%
Ambac Financial Group, Inc. 1,200,000 55,200,000
- -------------------------------------------------------------
Fannie Mae 3,963,000 226,138,688
- -------------------------------------------------------------
Freddie Mac 5,182,000 217,320,125
- -------------------------------------------------------------
MBIA, Inc. 1,032,600 68,990,587
- -------------------------------------------------------------
Morgan Stanley, Dean Witter,
Discover & Co. 1,794,000 106,070,250
- -------------------------------------------------------------
673,719,650
- -------------------------------------------------------------
FOODS-0.19%
Interstate Bakeries Corp. 708,000 26,461,500
- -------------------------------------------------------------
HEALTH CARE (DIVERSIFIED)-0.76%
Bristol-Myers Squibb Co. 1,100,000 104,087,500
- -------------------------------------------------------------
HEALTH CARE (DRUGS-GENERIC & OTHER)-0.92%
ICN Pharmaceuticals, Inc. 1,660,035 81,030,458
- -------------------------------------------------------------
Watson Pharmaceuticals,
Inc.(a) 1,371,400 44,484,787
- -------------------------------------------------------------
125,515,245
- -------------------------------------------------------------
HEALTH CARE (HOSPITAL MANAGEMENT)-0.64%
Quorum Health Group,
Inc.(a) 2,700,000 70,537,500
- -------------------------------------------------------------
Tenet Healthcare
Corp.(a)(b) 500,000 16,562,500
- -------------------------------------------------------------
87,100,000
- -------------------------------------------------------------
HEALTH CARE (LONG-TERM CARE)-0.57%
Genesis Health Ventures,
Inc.(a) 1,420,000 37,452,500
- -------------------------------------------------------------
Health Care and Retirement
Corp.(a) 1,000,000 40,250,000
- -------------------------------------------------------------
77,702,500
- -------------------------------------------------------------
HEALTH CARE (MANAGED CARE)-2.13%
MedPartners, Inc.(a) 9,100,000 203,612,500
- -------------------------------------------------------------
PhyCor, Inc.(a) 3,200,000 86,400,000
- -------------------------------------------------------------
290,012,500
- -------------------------------------------------------------
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-1.56%
Allegiance Corp. 549,000 19,455,188
- -------------------------------------------------------------
Baxter International Inc. 1,682,000 84,835,875
- -------------------------------------------------------------
Becton, Dickinson & Co. 800,000 40,000,000
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES)-(CONTINUED)
Sybron International
Corp.(a) 1,445,000 $ 67,824,687
- -------------------------------------------------------------
212,115,750
- -------------------------------------------------------------
HEALTH CARE (SPECIALIZED SERVICES)-0.26%
FPA Medical Management,
Inc.(a) 225,300 4,196,212
- -------------------------------------------------------------
Omnicare, Inc. 1,000,000 31,000,000
- -------------------------------------------------------------
35,196,212
- -------------------------------------------------------------
HOMEBUILDING-0.08%
Clayton Homes, Inc. 600,000 10,800,000
- -------------------------------------------------------------
HOUSEHOLD PRODUCTS (NON-DURABLES)-0.45%
Colgate-Palmolive Co. 840,000 61,740,000
- -------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-1.57%
Conseco, Inc. 2,550,000 115,865,625
- -------------------------------------------------------------
Equitable Companies, Inc. 400,000 19,900,000
- -------------------------------------------------------------
Provident Companies, Inc. 2,000,000 77,250,000
- -------------------------------------------------------------
213,015,625
- -------------------------------------------------------------
INSURANCE (MULTI-LINE)-5.31%
Ace, Ltd. 1,292,800 124,755,200
- -------------------------------------------------------------
American International
Group, Inc.(b) 3,400,000 369,750,000
- -------------------------------------------------------------
CIGNA Corp. 198,600 34,370,212
- -------------------------------------------------------------
Hartford Financial Services
Group Inc. (The) 1,420,700 132,924,244
- -------------------------------------------------------------
Travelers Group, Inc. 1,125,000 60,609,375
- -------------------------------------------------------------
722,409,031
- -------------------------------------------------------------
INSURANCE (PROPERTY-CASUALTY)-5.46%
Allstate Corp. 5,305,000 482,091,875
- -------------------------------------------------------------
Chubb Corp. 300,000 22,687,500
- -------------------------------------------------------------
Exel Ltd. 2,000,000 126,750,000
- -------------------------------------------------------------
Progressive Corp. 600,000 71,925,000
- -------------------------------------------------------------
Transatlantic Holdings,
Inc. 562,000 40,183,000
- -------------------------------------------------------------
743,637,375
- -------------------------------------------------------------
INVESTMENT BANKING/BROKERAGE-1.12%
Merrill Lynch & Co., Inc. 2,081,800 151,841,288
- -------------------------------------------------------------
LODGING-HOTELS-2.09%
Carnival Corp.-Class A 2,986,100 165,355,288
- -------------------------------------------------------------
Host Marriott Corp.(a) 700,000 13,737,500
- -------------------------------------------------------------
Promus Hotel Corp.(a) 1,125,000 47,250,000
- -------------------------------------------------------------
Royal Caribbean Cruises
Ltd. 1,094,000 58,323,875
- -------------------------------------------------------------
284,666,663
- -------------------------------------------------------------
</TABLE>
FS-104
<PAGE> 238
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
MANUFACTURING (DIVERSIFIED)-0.62%
Eaton Corp. 355,600 $ 31,737,300
- -------------------------------------------------------------
Hillenbrand Industries,
Inc. 400,000 20,475,000
- -------------------------------------------------------------
Tyco International Ltd.
(Bermuda) 723,800 32,616,237
- -------------------------------------------------------------
84,828,537
- -------------------------------------------------------------
NATURAL GAS-1.05%
El Paso Natural Gas Co. 1,486,400 98,845,600
- -------------------------------------------------------------
Williams Companies, Inc.
(The) 1,540,000 43,697,500
- -------------------------------------------------------------
142,543,100
- -------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES-0.16%
Wallace Computer Services,
Inc. 575,300 22,364,789
- -------------------------------------------------------------
OIL & GAS (DRILLING & EQUIPMENT)-0.79%
Baker Hughes, Inc. 500,000 21,812,500
- -------------------------------------------------------------
BJ Services Co.(a) 600,000 43,162,500
- -------------------------------------------------------------
Cooper Cameron Corp.(a) 400,000 24,400,000
- -------------------------------------------------------------
Noble Drilling Corp.(a) 600,000 18,375,000
- -------------------------------------------------------------
107,750,000
- -------------------------------------------------------------
OIL & GAS (REFINING & MARKETING)-0.58%
Tosco Corp. 2,100,221 79,414,607
- -------------------------------------------------------------
PHOTOGRAPHY/IMAGING-1.19%
Xerox Corp. 2,200,000 162,387,500
- -------------------------------------------------------------
PUBLISHING-0.04%
Meredith Corp. 135,800 4,846,363
- -------------------------------------------------------------
RAILROADS-0.26%
Kansas City Southern
Industries, Inc. 1,111,100 35,277,425
- -------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST-0.30%
Cali Realty Corp. 1,000,000 41,000,000
- -------------------------------------------------------------
RESTAURANTS-0.33%
Cracker Barrel Old Country
Store, Inc. 1,143,900 38,177,662
- -------------------------------------------------------------
Papa John's International,
Inc.(a) 192,400 6,709,950
- -------------------------------------------------------------
44,887,612
- -------------------------------------------------------------
RETAIL (COMPUTERS & ELECTRONICS)-0.61%
CompUSA, Inc.(a) 800,000 24,800,000
- -------------------------------------------------------------
Ingram Micro, Inc.-Class
A(a) 1,200,000 34,950,000
- -------------------------------------------------------------
Tech Data Corp.(a)(b) 607,400 23,612,676
- -------------------------------------------------------------
83,362,676
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
RETAIL (FOOD CHAINS)-0.87%
Kroger Co.(a) 1,500,000 $ 55,406,250
- -------------------------------------------------------------
Safeway, Inc.(a) 1,000,100 63,256,326
- -------------------------------------------------------------
118,662,576
- -------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)-0.40%
Dayton-Hudson Corp. 800,000 54,000,000
- -------------------------------------------------------------
RETAIL (SPECIALTY)-0.47%
Corporate Express, Inc.(a) 5,000,000 64,375,000
- -------------------------------------------------------------
SAVINGS & LOAN COMPANIES-0.95%
Charter One Financial, Inc. 420,000 26,512,500
- -------------------------------------------------------------
Washington Mutual, Inc. 1,600,080 102,105,105
- -------------------------------------------------------------
128,617,605
- -------------------------------------------------------------
SERVICES (COMMERCIAL & CONSUMER)-1.90%
Cendant Corp.(a) 961,240 33,042,626
- -------------------------------------------------------------
Service Corp. International 3,600,000 132,975,000
- -------------------------------------------------------------
Stewart Enterprises,
Inc.-Class A 2,000,000 93,250,000
- -------------------------------------------------------------
259,267,626
- -------------------------------------------------------------
SERVICES (DATA PROCESSING)-0.16%
National Data Corp. 600,000 21,675,000
- -------------------------------------------------------------
SERVICES (EMPLOYMENT)-0.37%
AccuStaff, Inc.(a) 2,200,000 50,600,000
- -------------------------------------------------------------
TELECOMMUNICATIONS (CELLULAR/WIRELESS)-0.12%
Nextel Communications,
Inc.(a) 650,900 16,923,400
- -------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-6.21%
AT&T Corp.(b) 1,416,100 86,736,125
- -------------------------------------------------------------
LCI International, Inc.(a) 1,273,400 39,157,050
- -------------------------------------------------------------
MCI Communications Corp. 6,000,000 256,875,000
- -------------------------------------------------------------
Sprint Corp. 654,200 38,352,475
- -------------------------------------------------------------
WorldCom, Inc.(a) 14,000,093 423,502,814
- -------------------------------------------------------------
844,623,464
- -------------------------------------------------------------
TOBACCO-1.66%
Philip Morris Companies,
Inc.(b) 5,000,000 226,562,500
- -------------------------------------------------------------
WASTE MANAGEMENT-0.46%
USA Waste Services, Inc.(a) 1,600,000 62,800,000
- -------------------------------------------------------------
Total Domestic Common Stocks 9,006,394,604
- -------------------------------------------------------------
</TABLE>
FS-105
<PAGE> 239
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
FOREIGN STOCKS & OTHER EQUITY INTERESTS-13.16%
BRAZIL-0.33%
Uniao de Bancos Brasileiros
S.A.-GDR
(Banks-Regional)(a) 1,400,000 $ 45,062,500
- -------------------------------------------------------------
CANADA-4.76%
Bank of Montreal
(Banks-Money Center) 1,200,000 53,196,179
- -------------------------------------------------------------
Canadian National Railway
Co.-ADR (Railroads) 700,000 33,075,000
- -------------------------------------------------------------
Philip Services Corp.-ADR
(Waste Management)(a) 2,300,000 33,062,500
- -------------------------------------------------------------
Royal Bank of Canada
(Banks-Major Regional) 10,001,800 529,118,001
- -------------------------------------------------------------
648,451,680
- -------------------------------------------------------------
DENMARK-0.34%
Novo Nordisk A/S (Health
Care-Drugs-Generic &
Other) 321,000 45,911,353
- -------------------------------------------------------------
FINLAND-0.77%
Nokia Oyj A.B.-Class A-ADR
(Communications
Equipment) 1,500,000 105,000,000
- -------------------------------------------------------------
ITALY-1.45%
Credito Italiano S.p.A.
(Banks-Major Regional) 30,000,000 92,798,191
- -------------------------------------------------------------
Istituto Mobiliare Italiano
S.p.A. (Banks-Major
Regional) 5,000,000 59,279,254
- -------------------------------------------------------------
Telecom Italia S.p.A.
(Telephone) 7,079,638 45,287,272
- -------------------------------------------------------------
197,364,717
- -------------------------------------------------------------
NETHERLANDS-0.33%
Akzo Nobel N.V. (Chemicals-
Diversified) 259,000 44,655,833
- -------------------------------------------------------------
PHILIPPINES-0.01%
Metro Pacific Corp.
(Manufacturing-
Diversified) 28,646,870 792,210
- -------------------------------------------------------------
PORTUGAL-0.08%
Portugal Telecom S.A.
(Telephone) 223,750 10,382,097
- -------------------------------------------------------------
SPAIN-0.15%
Endesa S.A. (Electric
Companies) 445,300 7,906,377
- -------------------------------------------------------------
Telefonica de Espana
(Telephone) 415,300 11,857,926
- -------------------------------------------------------------
19,764,303
- -------------------------------------------------------------
SWEDEN-1.62%
Nordbanken Holding A.B.
(Banks-Major Regional) 16,438,800 92,961,136
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<S> <C> <C>
SWEDEN-(CONTINUED)
Sparbanken Sverige
A.B.-Class A (Banks-Major
Regional) 4,980,850 $ 113,231,077
- -------------------------------------------------------------
Telefonaktiebolaget LM
Ericsson-ADR
(Communications
Equipment) 400,000 14,925,000
- -------------------------------------------------------------
221,117,213
- -------------------------------------------------------------
SWITZERLAND-0.71%
Novartis A.G. (Health Care-
Diversified) 60,000 97,297,297
- -------------------------------------------------------------
UNITED KINGDOM-2.61%
Danka Business Systems
PLC-ADR (Office Equipment
& Supplies) 1,207,500 19,244,531
- -------------------------------------------------------------
Ladbroke Group PLC (Leisure
Time-Products) 6,750,000 29,266,677
- -------------------------------------------------------------
Railtrack Group PLC
(Shipping) 3,857,100 61,256,628
- -------------------------------------------------------------
SmithKline Beecham PLC-ADR
(Health Care-Drugs-Major
Pharmaceuticals)(b) 4,667,200 240,069,100
- -------------------------------------------------------------
Standard Chartered PLC
(Banks-Major Regional) 460,100 4,911,694
- -------------------------------------------------------------
354,748,630
- -------------------------------------------------------------
Total Foreign Stocks & Other Equity
Interests 1,790,547,833
- -------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS-0.48%
HEALTH CARE (MANAGED CARE)-0.15%
Medpartners Inc.-$1.44
Conv. Pfd. 903,000 19,866,000
- -------------------------------------------------------------
INSURANCE (LIFE/HEALTH)-0.12%
Conseco Inc.-$4.278 Conv.
PRIDES 105,000 16,380,000
- -------------------------------------------------------------
TELECOMMUNICATIONS (LONG DISTANCE)-0.21%
WorldCom, Inc.-$2.68 Conv.
Pfd. 283,100 29,725,500
- -------------------------------------------------------------
Total Convertible Preferred Stocks 65,971,500
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
TIME DEPOSIT-0.62%
Deutsche Bank Securities
Corp.
6.75%, 01/02/98 $ 85,000,000 85,000,000
- ------------------------------------------------------------
Total Investments (excluding
Repurchase Agreements) 10,947,913,937
- ------------------------------------------------------------
REPURCHASE AGREEMENTS(c)-20.79%
Barclays De Zoete Wedd,
6.60%(d), 01/02/98 70,469,028 70,469,028
- ------------------------------------------------------------
CBIC Wood Gundy Securities
Corp.,
6.75%(e), 01/02/98 400,000,000 400,000,000
- ------------------------------------------------------------
</TABLE>
FS-106
<PAGE> 240
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENTS-(CONTINUED)
Dresdner Bank AG,
5.25%(f), 01/02/98 $ 100,000,000 $ 100,000,000
- -------------------------------------------------------------
Goldman Sachs & Co.,
5.25%(g), 01/02/98 300,000,000 300,000,000
- -------------------------------------------------------------
6.53%(h), 01/02/98 396,659,217 396,659,217
- -------------------------------------------------------------
6.80%(i), 01/02/98 312,824,281 312,824,281
- -------------------------------------------------------------
Merrill Lynch & Co. Inc.,
5.50%(j) 200,000,000 200,000,000
- -------------------------------------------------------------
SBC Capital Markets, Inc.,
4.25%(k), 01/02/98 150,000,000 150,000,000
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
REPURCHASE AGREEMENTS-(CONTINUED)
5.15%(l), 01/02/98 $ 400,000,000 $ 400,000,000
- -------------------------------------------------------------
6.75%(m), 01/02/98 500,000,000 500,000,000
- -------------------------------------------------------------
Total Repurchase Agreements 2,829,952,526
- -------------------------------------------------------------
TOTAL INVESTMENTS-101.23% 13,777,866,463
- -------------------------------------------------------------
OTHER ASSETS LESS LIABILITIES-(1.23%) (167,917,952)
- -------------------------------------------------------------
NET ASSETS-100.00% $13,609,948,511
=============================================================
</TABLE>
Abbreviations:
ADR - American Depositary Receipt
Conv. - Convertible
Deb. - Debentures
GDR - Global Depositary Receipt
Pfd. - Preferred
PRIDES - Preferred Redemption Increase Dividend Equity Security
Sub. - Subordinated
Notes to Schedule of Investments:
(a) Non-income producing security.
(b) A portion of these securities are subject to call options written. See Note
8.
(c) Collateral on repurchase agreements, including the Fund's pro-rata interest
in joint repurchase agreements, is taken into possession by the Fund upon
entering into the repurchase agreement. The collateral is marked to market
daily to ensure its market value as being 102% of the sales price of the
repurchase agreement. The investments in some repurchase agreements are
through participation in joint accounts with other mutual funds, private
accounts and certain non-registered investment companies managed by the
investment advisor or its affiliates.
(d) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$300,110,000. Collateralized by $299,790,000 U.S. Government obligations, 0%
to 7.025% due 01/15/98 to 11/13/07 with an aggregate market value at
12/31/97 of $306,000,850.
(e) Repurchase agreement entered into 12/31/97 with a maturing value of
$400,150,000. Collateralized by $399,965,000 U.S. Government obligations, 0%
to 11.25% due 06/01/98 to 02/15/15 with an aggregate market value at
12/31/97 of $408,000,501.
(f) Repurchase agreement entered into 12/31/97 with a maturing value of
$100,029,167. Collateralized by $101,670,000 U.S. Government obligations, 0%
to 6.25% due 05/07/98 to 08/31/02 with an aggregate market value at 12/31/97
of $102,000,802.
(g) Repurchase agreement entered into 12/31/97 with a maturing value of
$300,087,500. Collateralized by $293,402,000 U.S. Government obligations,
5.625% to 6.50% due 08/15/99 to 10/15/06 with an aggregate market value at
12/31/97 of $306,301,187.
(h) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$900,326,500. Collateralized by $856,643,000 U.S. Government obligations, 0%
to 14% due 01/08/98 to 08/15/23 with an aggregate market value at 12/31/97
of $918,902,583.
(i) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$800,302,222. Collateralized by $1,489,204,572 U.S. Government obligations,
5.107% to 9.136% due 08/01/02 to 05/01/35 with an aggregate market value at
12/31/97 of $816,000,078.
(j) Open repurchase agreement entered into 12/31/97. Collateralized by
$469,973,264 U.S. Government obligations, 0% to 16.50% due 05/01/98 to
08/01/31 with an aggregate market value at 12/31/97 of $204,001,008.
(k) Joint repurchase agreement entered into 12/31/97 with a maturing value of
$500,118,056. Collateralized by $503,848,000 U.S. Government obligations,
3.375% to 6.50% due 05/31/98 to 01/15/07 with an aggregate market value at
12/31/97 of $510,059,173.
(l) Repurchase agreement entered into 12/31/97 with a maturing value of
$400,114,444. Collateralized by $337,547,000 U.S. Government obligations, 0%
to 12% due 08/31/98 to 08/15/25 with an aggregate market value at 12/31/97
of $408,282,570.
(m) Repurchase agreement entered into 12/31/97 with a maturing value of
$500,187,500. Collateralized by $511,195,000 U.S. Government obligations,
6.50% to 7% due 12/01/12 to 10/01/27 with an aggregate market value at
12/31/97 of $512,386,030.
See Notes to Financial Statements.
FS-107
<PAGE> 241
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments (excluding repurchase
agreements), at market value (cost
$8,628,039,403) $10,947,913,937
- ----------------------------------------------------------
Repurchase agreements (cost
2,829,952,526) 2,829,952,526
- ----------------------------------------------------------
Foreign currencies, at value (cost
$7,797,037) 7,683,993
- ----------------------------------------------------------
Receivables for:
Investments sold 59,096,899
- ----------------------------------------------------------
Fund shares sold 41,392,487
- ----------------------------------------------------------
Dividends and interest 12,832,137
- ----------------------------------------------------------
Investment for deferred compensation plan 93,487
- ----------------------------------------------------------
Other assets 144,622
- ----------------------------------------------------------
Total assets 13,899,110,088
- ----------------------------------------------------------
LIABILITIES:
Payables for:
Investments purchased 233,364,138
- ----------------------------------------------------------
Fund shares reacquired 18,366,529
- ----------------------------------------------------------
Options written 14,124,863
- ----------------------------------------------------------
Deferred compensation plan 93,487
- ----------------------------------------------------------
Accrued advisory fees 6,940,004
- ----------------------------------------------------------
Accrued administrative service fees 17,368
- ----------------------------------------------------------
Accrued distribution fees 12,229,970
- ----------------------------------------------------------
Accrued transfer agent fees 2,386,762
- ----------------------------------------------------------
Accrued trustees' fees 14,896
- ----------------------------------------------------------
Accrued operating expenses 1,623,560
- ----------------------------------------------------------
Total liabilities 289,161,577
- ----------------------------------------------------------
Net assets applicable to shares
outstanding $13,609,948,511
==========================================================
NET ASSETS:
Class A $ 6,745,252,900
==========================================================
Class B $ 6,831,795,749
==========================================================
Class C $ 32,899,862
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 208,074,043
==========================================================
Class B 214,229,189
==========================================================
Class C 1,031,375
==========================================================
Class A:
Net asset value and redemption price
per share $ 32.42
==========================================================
Offering price per share:
(Net asset value of $32.42 divided
by 94.50%) $ 34.31
==========================================================
Class B:
Net asset value and offering price per
share $ 31.89
==========================================================
Class C:
Net asset value and offering price per
share $ 31.90
==========================================================
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of $5,373,214 foreign
withholding tax) $ 147,003,956
- ----------------------------------------------------------
Interest 46,029,269
- ----------------------------------------------------------
Total investment income 193,033,225
- ----------------------------------------------------------
EXPENSES:
Advisory fees 75,312,449
- ----------------------------------------------------------
Custodian fees 1,562,667
- ----------------------------------------------------------
Distribution fees -- Class A 15,098,832
- ----------------------------------------------------------
Distribution fees -- Class B 59,621,333
- ----------------------------------------------------------
Distribution fees -- Class C 63,254
- ----------------------------------------------------------
Administrative service fees 225,784
- ----------------------------------------------------------
Trustees' fees 77,336
- ----------------------------------------------------------
Transfer agent fees -- Class A 8,289,133
- ----------------------------------------------------------
Transfer agent fees -- Class B 11,799,719
- ----------------------------------------------------------
Transfer agent fees -- Class C 15,522
- ----------------------------------------------------------
Other 3,414,777
- ----------------------------------------------------------
Total expenses 175,480,806
- ----------------------------------------------------------
Less: Fees waived by advisor (2,501,999)
- ----------------------------------------------------------
Expenses paid indirectly (260,298)
- ----------------------------------------------------------
Net expenses 172,718,509
- ----------------------------------------------------------
Net investment income 20,314,716
- ----------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM
INVESTMENT SECURITIES, FOREIGN
CURRENCIES AND OPTION CONTRACTS:
Net realized gain (loss) from:
Investment securities 1,420,125,127
- ----------------------------------------------------------
Foreign currencies (2,453,966)
- ----------------------------------------------------------
Option contracts 32,600,560
- ----------------------------------------------------------
1,450,271,721
- ----------------------------------------------------------
Net unrealized appreciation of:
Investment securities 951,396,114
- ----------------------------------------------------------
Foreign currencies 718,971
- ----------------------------------------------------------
Option contracts 9,872,222
- ----------------------------------------------------------
961,987,307
- ----------------------------------------------------------
Net gain from investment securities,
foreign currencies and option contracts 2,412,259,028
- ----------------------------------------------------------
Net increase in net assets resulting from
operations $2,432,573,744
==========================================================
</TABLE>
See Notes to Financial Statements.
FS-108
<PAGE> 242
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
--------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 20,314,716 $ 103,535,521
- -------------------------------------------------------------------------------------------------
Net realized gain from investment securities, foreign
currencies, futures and option contracts 1,450,271,721 379,159,846
- -------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and option contracts 961,987,307 687,919,898
- -------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 2,432,573,744 1,170,615,265
- -------------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (7,048,371) (68,036,562)
- -------------------------------------------------------------------------------------------------
Class B -- (33,169,539)
- -------------------------------------------------------------------------------------------------
Distributions to shareholders from net realized gains:
Class A (677,329,447) (182,879,810)
- -------------------------------------------------------------------------------------------------
Class B (697,438,107) (175,428,877)
- -------------------------------------------------------------------------------------------------
Class C (2,766,027) --
- -------------------------------------------------------------------------------------------------
Share transactions-net:
Class A 1,076,707,236 1,320,636,081
- -------------------------------------------------------------------------------------------------
Class B 1,473,648,468 1,674,774,506
- -------------------------------------------------------------------------------------------------
Class C 35,606,705 --
- -------------------------------------------------------------------------------------------------
Net increase in net assets 3,633,954,201 3,706,511,064
- -------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 9,975,994,310 6,269,483,246
- -------------------------------------------------------------------------------------------------
End of period $13,609,948,511 $9,975,994,310
=================================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $11,116,186,261 $8,530,223,852
- -------------------------------------------------------------------------------------------------
Undistributed net investment income 17,752,405 6,940,026
- -------------------------------------------------------------------------------------------------
Undistributed net realized gain from investment
securities, foreign
currencies, futures and option contracts 151,380,707 76,188,601
- -------------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities, foreign
currencies and option contracts 2,324,629,138 1,362,641,831
- -------------------------------------------------------------------------------------------------
$13,609,948,511 $9,975,994,310
=================================================================================================
</TABLE>
See Notes to Financial Statements.
FS-109
<PAGE> 243
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Value Fund (the "Fund") is a series portfolio of AIM Funds Group (the
"Trust"). The Trust is a Delaware business trust registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company consisting of nine separate series portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers three different classes of shares: the Class A shares, the
Class B shares and the Class C shares. The new Class C shares commenced sales on
August 4, 1997. Class A shares are sold with a front-end sales charge. Class B
and Class C shares are sold with a contingent deferred sales charge. Matters
affecting each portfolio or class will be voted on exclusively by the
shareholders of such portfolio or class. The assets, liabilities and operations
of each portfolio are accounted for separately. Information presented in these
financial statements pertains only to the Fund. The Fund's investment objective
is to seek to achieve long-term growth of capital by investing primarily in
equity securities judged by the Fund's investment advisor to be undervalued
relative to the investment advisor's appraisal of the current or projected
earnings of the companies issuing the securities, or relative to current market
values of assets owned by the companies issuing the securities or relative to
the equity market generally. Income is a secondary objective.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.
A. Security Valuations -- A security listed or traded on an exchange (except
convertible bonds) is valued at its last sales price on the exchange where
the security is principally traded, or lacking any sales on a particular
day, the security is valued at the mean between the closing bid and asked
prices on that day. Each security traded in the over-the-counter market (but
not including securities reported on the NASDAQ National Market System) is
valued at the mean between the last bid and asked prices based upon quotes
furnished by market makers for such securities. If a mean is not available,
as is the case in some foreign markets, the closing bid will be used absent
a last sales price. Each security reported on the NASDAQ National Market
System is valued at the last sales price on the valuation date or absent a
last sales price, at the mean of the closing bid and asked prices. Debt
obligations (including convertible bonds) are valued on the basis of prices
provided by an independent pricing service. Prices provided by the pricing
service may be determined without exclusive reliance on quoted prices, and
may reflect appropriate factors such as yield, type of issue, coupon rate
and maturity date. Securities for which market prices are not provided by
any of the above methods are valued at the mean between last bid and asked
prices based upon quotes furnished by independent sources. Securities for
which market quotations either are not readily available or are questionable
are valued at fair value as determined in good faith by or under the
supervision of the Trust's officers in a manner specifically authorized by
the Board of Trustees. Short-term obligations having 60 days or less to
maturity are valued at amortized cost which approximates market value.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of the New York Stock Exchange. The
values of such securities used in computing the net asset value of the
Fund's shares are determined as of such times. Foreign currency exchange
rates are also generally determined prior to the close of the New York Stock
Exchange. Occasionally, events affecting the values of such securities and
such exchange rates may occur between the times at which they are determined
and the close of the New York Stock Exchange which will not be reflected in
the computation of the Fund's net asset value. If events materially
affecting the value of such securities occur during such period, then these
securities will be valued at their fair value as determined in good faith by
or under the supervision of the Board of Trustees.
B. Foreign Currency Translations -- Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S.
dollar amounts at the date of valuation. Purchases and sales of portfolio
securities and income items denominated in foreign currencies are translated
into U.S. dollar amounts on the respective dates of such transactions.
C. Foreign Currency Contracts -- A foreign currency contract is an obligation
to purchase or sell a specific currency for an agreed-upon price at a future
date. The Fund may enter into a foreign currency contract to attempt to
minimize the risk to the Fund from adverse changes in the relationship
between currencies. The Fund may also enter into a foreign currency contract
for the purchase or sale of a security denominated in a foreign currency in
order to "lock in" the U.S. dollar price of that security. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the
terms of their contracts or if the value of the foreign currency changes
unfavorably.
D. Securities Transactions, Investment Income and Distributions -- Securities
transactions are accounted for on a trade date basis. Realized gains or
losses on sales are computed on the basis of specific identification of the
securities sold. Interest income is recorded as earned from settlement date
and is recorded on the accrual basis. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. On December 31, 1997,
$2,453,966 was reclassified from undistributed net investment income to
undistributed net realized gains as a result of differing book/tax treatment
of foreign currency transactions in order to comply with the requirements of
the American Institute of Certified Public Accountants Statement of Position
93-2. Net
FS-110
<PAGE> 244
assets of the Fund were unaffected as a result of this reclassification.
E. Stock Index Futures Contracts -- The Fund may purchase or sell stock index
futures contracts as a hedge against changes in market conditions. Initial
margin deposits required upon entering into futures contracts are satisfied
by the segregation of specific securities or cash, and/or by securing a
standby letter of credit from a major commercial bank, as collateral, for
the account of the broker (the Fund's agent in acquiring the futures
position). During the period the futures contract is open, changes in the
value of the contract are recognized as unrealized gains or losses by
"marking to market" on a daily basis to reflect the market value of the
contract at the end of each day's trading. Variation margin payments are
made or received depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the proceeds from (or cost of) the
closing transaction and the Fund's basis in the contract. Risks include the
possibility of an illiquid market and the change in the value of the
contract may not correlate with changes in the value of the Fund's portfolio
being hedged.
F. Covered Call Options -- The Fund may write call options, but only on a
covered basis; that is, the Fund will own the underlying security. Options
written by the Fund normally will have expiration dates between three and
nine months from the date written. The exercise price of a call option may
be below, equal to, or above the current market value of the underlying
security at the time the option is written. When the Fund writes a covered
call option, an amount equal to the premium received by the Fund is recorded
as an asset and an equivalent liability. The amount of the liability is
subsequently "marked-to-market" to reflect the current market value of the
option written. The current market value of a written option is the mean
between the last bid and asked prices on that day. If a written call option
expires on the stipulated expiration date, or if the Fund enters into a
closing purchase transaction, the Fund realizes a gain (or a loss if the
closing purchase transaction exceeds the premium received when the option
was written) without regard to any unrealized gain or loss on the underlying
security, and the liability related to such option is extinguished. If a
written option is exercised, the Fund realizes a gain or a loss from the
sale of the underlying security and the proceeds of the sale are increased
by the premium originally received.
A call option gives the purchaser of such option the right to buy, and the
writer (the Fund) the obligation to sell, the underlying security at the
stated exercise price during the option period. The purchaser of a call
option has the right to acquire the security which is the subject of the
call option at any time during the option period. During the option period,
in return for the premium paid by the purchaser of the option, the Fund has
given up the opportunity for capital appreciation above the exercise price
should the market price of the underlying security increase, but has
retained the risk of loss should the price of the underlying security
decline. During the option period, the Fund may be required at any time to
deliver the underlying security against payment of the exercise price. This
obligation is terminated upon the expiration of the option period or at
such earlier time at which the Fund effects a closing purchase transaction
by purchasing (at a price which may be higher than that received when the
call option was written) a call option identical to the one originally
written.
G. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income
taxes is recorded in the financial statements.
H. Expenses -- Distribution and transfer agency expenses directly attributable
to a class of shares are charged to that class' operations. All other
expenses which are attributable to more than one class are allocated among
the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.80% of
the first $150 million of the Fund's average daily net assets, plus 0.625% of
the Fund's average daily net assets in excess of $150 million. AIM is currently
voluntarily waiving a portion of its advisory fees payable by the Fund to AIM to
the extent necessary to reduce the fees paid by the Fund at net asset levels
higher than those currently incorporated in the present advisory fee schedule.
AIM will receive a fee calculated at 0.80% of the first $150 million of the
Fund's average daily net assets, plus 0.625% of the Fund's average daily net
assets in excess of $150 million to and including $2 billion, plus 0.60% of the
Fund's average daily net assets in excess of $2 billion. The waiver of fees is
entirely voluntary and the Board of Trustees would be advised of any decision by
AIM to discontinue the waiver. During the year ended December 31, 1997, AIM
voluntarily waived advisory fees in the amount of $2,501,999.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to reimburse AIM for certain administrative costs incurred in providing
accounting services to the Fund. During the year ended December 31, 1997, AIM
was reimbursed $225,784 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency
services to the Fund. During the year ended December 31, 1997, AFS was paid
$11,353,884 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted
distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to the
Fund's Class A shares and Class C shares (the "Class A and C Plan"), and the
Fund's Class B shares (the "Class B Plan") (collectively, the "Plans"). The
Fund, pursuant to the Class A and C Plan, pays AIM Distributors compensation at
an annual rate of 0.25% of the average daily net assets of the Class A shares
and 1.00% of the average daily net assets of the Class C shares. The Fund
pursuant to the Class B Plan, pays AIM Distributors compensation at an annual
rate of 1.00% of
FS-111
<PAGE> 245
the average daily net assets attributable to the Class B shares. Of these
amounts, the Fund may pay a service fee of 0.25% of the average daily net assets
of the Class A, Class B or Class C shares to selected dealers and financial
institutions who furnish continuing personal shareholder services to their
customers who purchase and own the appropriate class of shares of the Fund. Any
amounts not paid as a service fee by the Class B or Class C shares under the
Plans would constitute an asset-based sales charge. The Plans also impose a cap
on the total sales charges, including asset-based sales charges that may be paid
by the respective classes. AIM Distributors may, from time to time, assign,
transfer, or pledge to one or more designees, its rights to all or a designated
portion of (a) compensation received by AIM Distributors from the Fund pursuant
to the Class B Plan (but not AIM Distributors' duties and obligations pursuant
to the Class B Plan) and (b) any contingent deferred sales charges received by
AIM Distributors related to the Class B shares. During the year ended December
31, 1997, for the Class A shares and Class B shares and the period August 4,
1997 (date sales commenced) through December 31, 1997, for the Class C shares,
the Class A, Class B and Class C shares, paid AIM Distributors $15,098,832,
$59,621,333 and $63,254, respectively, as compensation under the Plans.
AIM Distributors received commissions of $4,660,735 from sales of the Class A
shares of the Fund during the year ended December 31, 1997. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1997,
AIM Distributors received $1,752,662 in contingent deferred sales charges
imposed on redemptions of Fund shares. Certain officers and trustees of the
Trust are officers and directors of AIM, AIM Distributors and AFS.
During the year ended December 31, 1997, the Fund paid legal fees of $22,577
for services rendered by Kramer, Levin, Naftalis & Frankel as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
AIM has directed certain portfolio trades to brokers who paid a portion of the
Fund's expenses related to pricing services used by the Fund which reduced Fund
expenses by $45,555 during the year ended December 31, 1997. Also during the
year ended December 31, 1997 the Fund received reductions in transfer agency
fees from AFS (an affiliate of AIM) and reductions in custodian fees of $133,849
and $80,894, respectively, under expense offset arrangements. The effect of the
above arrangements resulted in reductions of the Fund's total expenses of
$260,298 during the year ended December 31, 1997.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid or accrued to each trustee who is not
an "interested person" of AIM. The Trust may invest trustees' fees, if so
elected by a trustee, in mutual fund shares in accordance with a deferred
compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $500,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. Interest on
borrowings under the line of credit is payable on maturity or prepayment date.
Prior to an amendment of the line of credit on July 15, 1997, the Fund was
limited to borrowing up to the lesser of (i) $325,000,000 or (ii) the limits set
by its prospectus for borrowings. During the year ended December 31, 1997, the
Fund did not borrow under the line of credit agreement. The funds which are
parties to the line of credit are charged a commitment fee of 0.05% of the
unused balance of the committed line. The commitment fee is allocated among such
funds based on their respective average net assets for the period.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1997 was
$14,975,071,788 and $15,170,340,041, respectively.
The amount of unrealized appreciation (depreciation) of investment securities
on a tax basis as of December 31, 1997 was as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $2,583,202,659
- ----------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (299,435,866)
- ----------------------------------------------------------
Net unrealized appreciation of investment
securities $2,283,766,793
==========================================================
</TABLE>
Cost of investments for tax purposes is $8,664,147,144
FS-112
<PAGE> 246
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1997 and 1996
were as follows:
<TABLE>
<CAPTION>
1997 1996
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- --------------
<S> <C> <C> <C> <C>
Sold:
Class A 56,549,515 $ 1,862,338,902 83,369,308 $2,309,759,146
- ------------------------------------------------------------ ----------- --------------- ----------- --------------
Class B 44,494,521 1,452,059,926 73,576,913 2,011,544,498
- ------------------------------------------------------------ ----------- --------------- ----------- --------------
Class C* 982,300 34,164,971 -- --
- ------------------------------------------------------------ ----------- --------------- ----------- --------------
Issued as reinvestment of dividends:
Class A 20,397,239 655,150,256 8,503,122 239,780,446
- ------------------------------------------------------------ ----------- --------------- ----------- --------------
Class B 20,756,501 656,098,487 7,058,251 197,560,616
- ------------------------------------------------------------ ----------- --------------- ----------- --------------
Class C* 82,603 2,611,962 -- --
- ------------------------------------------------------------ ----------- --------------- ----------- --------------
Reacquired:
Class A (43,852,562) (1,440,781,922) (44,030,263) (1,228,903,511)
- ------------------------------------------------------------ ----------- --------------- ----------- --------------
Class B (19,618,229) (634,509,945) (19,368,345) (534,330,608)
- ------------------------------------------------------------ ----------- --------------- ----------- --------------
Class C* (33,528) (1,170,228) -- --
- ------------------------------------------------------------ ----------- --------------- ----------- --------------
* Class C shares commenced sales on August 4, 1997. 79,758,360 $ 2,585,962,409 109,108,986 $2,995,410,587
============================================================ =========== =============== =========== ==============
</TABLE>
NOTE 8-OPTION CONTRACTS WRITTEN
Transactions in call options written during the year ended December 31, 1997 are
summarized as follows:
<TABLE>
<CAPTION>
OPTION CONTRACTS
-------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- ------------
<S> <C> <C>
Beginning of period 100,123 $ 31,917,627
- ------------------------------------------------------ --------- ------------
Written 174,516 72,203,112
- ------------------------------------------------------ --------- ------------
Closed (41,450) (18,916,369)
- ------------------------------------------------------ --------- ------------
Exercised (126,094) (39,884,228)
- ------------------------------------------------------ --------- ------------
Expired (63,194) (26,236,892)
- ------------------------------------------------------ --------- ------------
End of period 43,901 $ 19,083,250
====================================================== ========= ============
</TABLE>
Open call option contracts written at December 31, 1997 were as follows:
<TABLE>
<CAPTION>
NUMBER DECEMBER 31, UNREALIZED
CONTRACT STRIKE OF PREMIUM 1997 APPRECIATION
ISSUE MONTH PRICE CONTRACTS RECEIVED MARKET VALUE (DEPRECIATION)
----- -------- ------ --------- ----------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
AT&T Corp. Apr. 60 4,000 $ 2,397,960 $ 2,075,000 $ 322,960
AT&T Corp. Apr. 65 1,075 413,324 335,938 77,386
American International Group, Inc. Feb. 100 5,000 3,229,892 5,250,000 (2,020,108)
BankAmerica Corp. Apr. 80 2,850 1,603,546 855,000 748,546
Citicorp Apr. 135 5,000 5,116,728 3,375,000 1,741,728
Philip Morris Companies, Inc. Jan. 45 5,000 797,473 546,875 250,598
Quantum Corp. Feb. 27.5 9,000 2,897,903 337,500 2,560,403
SmithKline Beecham PLC Jan. 50 4,000 1,212,959 887,500 325,459
Tech Data Corp. Jan. 45 2,976 617,251 55,800 561,451
Tenet Healthcare Corp. Feb. 35 5,000 796,214 406,250 389,964
- -------------------------------------------------------------------------------------------------------------------------------
43,901 $19,083,250 $14,124,863 $ 4,958,387
===============================================================================================================================
</TABLE>
FS-113
<PAGE> 247
NOTE 9-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A outstanding
during each of the years in the five-year period ended December 31, 1997, for a
share of Class B outstanding during each of the years in the four-year period
ended December 31, 1997 and the period October 18, 1993 (date sales commenced)
through December 31, 1993, and for a share of Class C outstanding during the
period August 4, 1997 (date sales commenced) through December 31, 1997.
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 29.15 $ 26.81 $ 21.14 $ 20.82 $ 18.24
- -------------------------------------------------- ------------ ------------ ------------ ------------ ---------
Income from investment operations:
Net investment income 0.17 0.43(a) 0.14 0.16 0.04
- -------------------------------------------------- ------------ ------------ ------------ ------------ ---------
Net gains on securities (both realized and
unrealized) 6.78 3.42 7.21 0.52 3.34
- -------------------------------------------------- ------------ ------------ ------------ ------------ ---------
Total from investment operations 6.95 3.85 7.35 0.68 3.38
- -------------------------------------------------- ------------ ------------ ------------ ------------ ---------
Less distributions:
Dividends from net investment income (0.04) (0.41) (0.09) (0.16) (0.03)
- -------------------------------------------------- ------------ ------------ ------------ ------------ ---------
Distributions from net realized gains (3.64) (1.10) (1.59) (0.20) (0.77)
- -------------------------------------------------- ------------ ------------ ------------ ------------ ---------
Total distributions (3.68) (1.51) (1.68) (0.36) (0.80)
- -------------------------------------------------- ------------ ------------ ------------ ------------ ---------
Net asset value, end of period $ 32.42 $ 29.15 $ 26.81 $ 21.14 $ 20.82
================================================== ============ ============ ============ ============ =========
Total return(b) 23.95% 14.52% 34.85% 3.28% 18.71%
================================================== ============ ============ ============ ============ =========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ 6,745,253 $5,100,061 $ 3,408,952 $ 1,358,725 $765,305
================================================== ============ ============ ============ ============ =========
Ratio of expenses to average net assets(c) 1.04%(d)(e) 1.11% 1.12% 0.98% 1.09%
================================================== ============ ============ ============ ============ =========
Ratio of net investment income to average net
assets(f) 0.57%(d) 1.65% 0.74% 0.92% 0.30%
================================================== ============ ============ ============ ============ =========
Portfolio turnover rate 137% 126% 151% 127% 177%
================================================== ============ ============ ============ ============ =========
Average brokerage commission rate paid(g) $ 0.0481 $ 0.0436 N/A N/A N/A
================================================== ============ ============ ============ ============ =========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct sales charges.
(c) After fee waivers. Ratios of expenses to average net assets prior to fee
waivers were 1.06%, 1.13% and 1.13%, for 1997-1995, respectively.
(d) Ratios are based on average net assets of $6,039,532,925.
(e) Includes expenses paid indirectly. Excluding expenses paid indirectly, the
ratio of expenses to average net assets would have been the same.
(f) After fee waivers. Ratios of net investment income to average net assets
prior to fee waivers were 0.55%, 1.63% and 0.73%, for 1997-1995,
respectively.
(g) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
FS-114
<PAGE> 248
NOTE 9-FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS B CLASS C
-------------------------------------------------------------------- ----------
1997 1996 1995 1994 1993 1997
---------- ------------ ------------ --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 28.92 $ 26.65 $ 21.13 $ 20.82 $ 21.80 $ 35.60
- -------------------------------------- ---------- ------------ ------------ --------- -------- ----------
Income from investment operations:
Net investment income (loss) (0.07) 0.20(a) (0.01) -- 0.02 (0.01)
- -------------------------------------- ---------- ------------ ------------ --------- -------- ----------
Net gains (losses) on securities
(both realized and unrealized) 6.68 3.38 7.12 0.51 (0.21) (0.05)
- -------------------------------------- ---------- ------------ ------------ --------- -------- ----------
Total from investment operations 6.61 3.58 7.11 0.51 (0.19) (0.06)
- -------------------------------------- ---------- ------------ ------------ --------- -------- ----------
Less distributions:
Dividends from net investment income -- (0.21) -- -- (0.02) --
- -------------------------------------- ---------- ------------ ------------ --------- -------- ----------
Distributions from net realized gains (3.64) (1.10) (1.59) (0.20) (0.77) (3.64)
- -------------------------------------- ---------- ------------ ------------ --------- -------- ----------
Total distributions (3.64) (1.31) (1.59) (0.20) (0.79) (3.64)
- -------------------------------------- ---------- ------------ ------------ --------- -------- ----------
Net asset value, end of period $ 31.89 $ 28.92 $ 26.65 $ 21.13 $ 20.82 $ 31.90
====================================== ========== ============ ============ ========= ======== ==========
Total return(b) 22.96% 13.57% 33.73% 2.46% (0.74)% (0.08)%
====================================== ========== ============ ============ ========= ======== ==========
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $6,831,796 $ 4,875,933 $ 2,860,531 $ 680,119 $ 63,215 $ 32,900
====================================== ========== ============ ============ ========= ======== ==========
Ratio of expenses to average net
assets(c) 1.85%(d)(e) 1.94% 1.94% 1.90% 1.85%(f) 1.84%(d)(e)(f)
====================================== ========== ============ ============ ========= ======== ==========
Ratio of net investment income (loss)
to average net assets(c) (0.24)%(d) 0.82% (0.08)% 0.00% (0.46)%(f) (0.23)%(d)(f)
====================================== ========== ============ ============ ========= ======== ==========
Portfolio turnover rate 137% 126% 151% 127% 177% 137%
====================================== ========== ============ ============ ========= ======== ==========
Average brokerage commission rate
paid(g) $ 0.0481 $ 0.0436 N/A N/A N/A $ 0.0481
====================================== ========== ============ ============ ========= ======== ==========
</TABLE>
(a) Calculated using average shares outstanding.
(b) Does not deduct contingent deferred sales charges and are not annualized for
periods less than one year .
(c) After fee waivers. Ratios of expenses to average net assets prior to fee
waivers were 1.87%, 1.96% and 1.96% for 1997-1995, respectively for Class B
and 1.86% for 1997 for Class C. Ratios of net investment income (loss) to
average net assets prior to fee waivers were (0.26)%, 0.81% and (0.09)% for
1997-1995, respectively for Class B and (0.25)% for 1997 for Class C.
(d) Ratios are based on average net assets of $5,962,133,311 for Class B and
$15,391,746 for Class C, respectively.
(e) Includes expenses paid indirectly. Excluding expenses paid indirectly, the
ratio of expenses to average net assets would have been the same for Class B
and would have been 1.83% for Class C.
(f) Annualized.
(g) The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased and sold, which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
FS-115
<PAGE> 249
PART C
OTHER INFORMATION
Item 24. (a) Financial Statements:
Class A, B and C Shares of 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; AIM Value Fund;
and AIM Cash Reserve Shares (formerly, Class C Shares) of AIM
Money Market Fund
In Part A: Financial Highlights
In Part B: (1) Reports of Independent Auditors
(2) Schedules of Investments as of December 31,
1997
(3) Statements of Assets and Liabilities as of
December 31, 1997
(4) Statements of Operations for the year ended
December 31, 1997
(5) Statements of Changes in Net Assets for the
years ended December 31, 1997 and 1996
(b) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
(1) (a) - Agreement and Declaration of Trust of the Registrant was filed as an Exhibit to Post-Effective
Amendment No. 66 on September 15, 1993, and was filed electronically as an Exhibit to Post-Effective
Amendment No. 70 on November 17, 1995, and is hereby incorporated by reference.
(b) - First Amendment to Agreement and Declaration of Trust of the Registrant was filed as an Exhibit to
Post-Effective Amendment No. 66 on September 15, 1993, and was filed electronically as an Exhibit to
Post-Effective Amendment No. 70 on November 17, 1995, and is hereby incorporated by reference.
(c) - Second Amendment to Agreement and Declaration of Trust of the Registrant (name change of AIM
Utilities Fund) was filed electronically as an Exhibit to Post-Effective Amendment No. 70 on November
17, 1995, and is hereby incorporated by reference.
(d) - Third Amendment to Agreement and Declaration of Trust of the Registrant (name change of AIM
Government Securities Fund) was filed electronically as an Exhibit to Post-Effective Amendment No. 70
on November 17, 1995, and is hereby incorporated by reference.
(e) - Fourth Amendment to Agreement and Declaration of Trust of the Registrant (name change of Class C
shares of AIM Money Market Fund) was filed electronically as an Exhibit to Post-Effective Amendment
No. 73 of July 25, 1997, and is hereby incorporated by reference.
(f) - Fifth Amendment to Agreement and Declaration of Trust of the Registrant (designation of Class C shares of
the Funds) was filed electronically as an Exhibit to Post-Effective Amendment No. 73 of July 25, 1997, and
is hereby incorporated by reference.
(g) - Sixth Amendment to Agreement and Declaration of Trust of the Registrant (name change of AIM Growth
Fund) is filed herewith electronically.
</TABLE>
C-1
<PAGE> 250
<TABLE>
<S> <C> <C> <C>
(2) (a) - By-Laws of the Registrant were filed as an Exhibit to Post-Effective Amendment No. 66 on September
15, 1993, and were filed electronically as an Exhibit to Post-Effective Amendment No. 70 on November
17, 1995.
(b) - Amendment to By-Laws of the Registrant was filed as an Exhibit to Post-Effective Amendment No. 68 on
April 11, 1994, and was filed electronically as an Exhibit to Post-Effective Amendment No. 70 on
November 17, 1995.
(c) - Second Amendment to By-Laws of the Registrant was filed electronically as an
Exhibit to Post -Effective Amendment No. 70 on November 17,1995.
(d) - Amended and Restated By-Laws of the Registrant were filed electronically as an Exhibit to Post-
Effective Amendment No. 72 on April 28, 1997, and are hereby incorporated by reference.
(3) - Voting Trust Agreements - None.
(4) (a) - Specimen share certificates for the nine series of Class A Shares of Registrant (transfer agent
change) were filed as Exhibits to Post-Effective Amendment No. 69 on February 28, 1995.
(b) - Specimen share certificates for the nine series of Class B Shares of Registrant (transfer agent
change) were filed as Exhibits to Post-Effective Amendment No. 69 on February 28, 1995.
(c) - Specimen share certificate for the AIM Money Market Fund - Class C Shares of Registrant (transfer
agent change) was filed as an Exhibit to Post-Effective Amendment No. 69 on February 28, 1995.
(d) - Specimen share certificate for the AIM Global Utilities Fund - Class A Shares of Registrant (name
change) was filed electronically as an Exhibit to Post-Effective Amendment No. 70 on November 17,
1995.
(e) - Specimen share certificate for the AIM Global Utilities Fund - Class B Shares of Registrant (name
change) was filed electronically as an Exhibit to Post-Effective Amendment No. 70 on November
17,1995.
(f) - Specimen share certificate for the AIM Intermediate Government Fund - Class A Shares of Registrant
(name change) was filed electronically as an Exhibit to Post-Effective Amendment No. 71 on April 26,
1996.
(g) - Specimen share certificate for the AIM Intermediate Government Fund - Class B Shares of Registrant
(name change) was filed electronically as an Exhibit to Post-Effective Amendment No. 71 on April 26,
1996.
(5) (a) - (1) Master Investment Advisory Agreement, dated August 6, 1993, between the Registrant and A I M
Advisors, Inc. was filed as an Exhibit to Post-Effective Amendment No. 67 on October 15, 1993.
- (2) Master Investment Advisory Agreement, dated October 18, 1993, between the Registrant and A I M
Advisors, Inc. was filed as an Exhibit to Post-Effective Amendment No. 68 on February 28, 1995, and
was filed electronically as an Exhibit to Post-Effective Amendment No. 71 on April 26, 1996.
</TABLE>
C-2
<PAGE> 251
<TABLE>
<S> <C> <C> <C>
- (3) Amendment No. 1, dated as of September 28, 1994, to the Master Investment Advisory Agreement
between the Registrant and A I M Advisors, Inc., with respect to AIM Growth Fund was filed as an
Exhibit to Post-Effective Amendment No. 69 on February 28, 1995, and was filed electronically as an
Exhibit to Post-Effective Amendment No. 71 on April 26, 1996.
- (4) Amendment No. 2, dated as of November 14, 1994, to the Master Investment Advisory Agreement
between Registrant and A I M Advisors, Inc., with respect to AIM Value Fund was filed as an Exhibit
to Post-Effective Amendment No. 69 on February 28, 1995, and was filed electronically as an Exhibit
to Post-Effective Amendment No. 71 on April 26, 1996.
- (5) Master Investment Advisory Agreement, dated February 28, 1997, between the Registrant and A I M
Advisors, Inc. was filed electronically as an Exhibit to Post-Effective Amendment No. 72 on April 28,
1997, and is hereby incorporated by reference.
(b) - (1) Form of Sub-Advisory Agreement, dated August 6, 1993, among the Registrant, A I M Advisors, Inc.
and CIGNA Investments, Inc. was filed as an Exhibit to Post-Effective Amendment No. 66 on September
15, 1993.
- (2) Sub-Advisory Agreement, dated October 18, 1993, among the Registrant, A I M Advisors, Inc. and
CIGNA Investments, Inc. was filed as an Exhibit to Post-Effective Amendment No. 68 on April 11, 1994.
(6) (a) - (1) Master Distribution Agreement, dated August 6, 1993, between the Registrant (on behalf of its
Class A Shares and Class C Shares) and A I M Distributors, Inc. was filed as an Exhibit to
Post-Effective Amendment No. 67 on October 15, 1993.
- (2) Master Distribution Agreement, dated August 6, 1993, between the Registrant (on behalf of its
Class B Shares) and A I M Distributors, Inc. was filed as an Exhibit to Post-Effective Amendment No.
67 on October 15, 1993.
- (3) Master Distribution Agreement, dated October 18, 1993, between the Registrant (on behalf of its
Class A Shares and Class C Shares) and A I M Distributors, Inc. was filed as an Exhibit to
Post-Effective Amendment No. 68 on April 11, 1994, and was filed electronically as an Exhibit to
Post-Effective Amendment No. 71 on April 26, 1997.
- (4) Master Distribution Agreement, dated October 18, 1993, between the Registrant (on behalf of its
Class B Shares) and A I M Distributors, Inc. was filed as an Exhibit to Post-Effective Amendment No.
68 on April 11, 1994.
- (5) Amended and Restated Master Distribution Agreement, dated May 2, 1995, between the Registrant (on
behalf of its Class B Shares) and A I M Distributors, Inc. was filed electronically as an Exhibit to
Post-Effective Amendment No. 70 on November 17, 1995.
- (6) Master Distribution Agreement, dated February 28, 1997, between the Registrant (on behalf of its
Class A shares and its AIM Cash Reserve Shares) and A I M Distributors, Inc. was filed
electronically as an Exhibit to Post-Effective Amendment No. 72 on April 28, 1997.
- (7) Master Distribution Agreement, dated February 28, 1997, between the Registrant (on behalf of its
Class B shares) and A I M Distributors, Inc. was filed electronically as an Exhibit to Post-Effective
Amendment No. 72 on April 28, 1997, and is hereby incorporated by reference.
</TABLE>
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<PAGE> 252
<TABLE>
<S> <C> <C> <C>
- (8) Amended and Restated Master Distribution Agreement, dated August 4, 1997, between the
Registrant (on behalf of
its Class A Shares, Class C Shares and AIM Cash Reserve Shares) and A I M Distributors, Inc.
is filed herewith electronically.
(b) - Form of Selected Dealer Agreement between A I M Distributors, Inc. and selected dealers is filed
herewith electronically.
(c) - Form of Bank Selling Group Agreement between A I M Distributors, Inc. and banks is filed herewith
electronically.
(7) (a) - (1) AIM Funds Retirement Plan for Eligible Directors/Trustees, effective as of March 8, 1994, as
restated September 18, 1995, was filed electronically as an Exhibit to Post-Effective Amendment No.
71 on April 26, 1996, and is hereby incorporated by reference.
- (2) AIM Funds Retirement Plan for Eligible Directors/Trustees was filed as an Exhibit to
Post-Effective Amendment No. 69 on February 28, 1995.
(b) - (1) Form of Deferred Compensation Agreement for Non-Affiliated Directors, approved March 12, 1997,
is filed herewith electronically.
- (2) Form of Deferred Compensation Plan for Eligible Directors/Trustees as approved on December 5,
1995, was filed electronically as an Exhibit to Post-Effective Amendment No. 71 on April 26, 1996,
and is hereby incorporated by reference.
- (3) Form of Deferred Compensation Plan for Eligible Directors/Trustees was filed as an Exhibit to
Post-Effective Amendment No. 69 on February 28, 1995.
(8) (a) - Custodian Contract, dated October 15, 1993, between the Registrant and State Street Bank and Trust
Company was filed as an Exhibit to Post-Effective Amendment No. 68 on April 11, 1994, and was filed
electronically as an Exhibit to Post-Effective Amendment No. 71 on April 26, 1996, and is hereby
incorporated by reference.
(b) - Amendment No. 1, dated as of September 19, 1995, to the Custodian Contract, dated October 15, 1993,
between the Registrant and State Street Bank and Trust Company was filed electronically as an Exhibit
to Post-Effective Amendment No. 71 on April 26, 1996, and is hereby incorporated by reference.
(c) - Subcustodian Agreement, dated September 9, 1994, among the Registrant, Texas Commerce Bank National
Association, State Street Bank and Trust Company and A I M Fund Services, Inc., was filed as an
Exhibit to Post-Effective Amendment No. 69 on February 28, 1995, and was filed electronically as an
Exhibit to Post-Effective Amendment No. 71 on April 26, 1996, and is hereby incorporated by
reference.
(d) - Custody Agreement, dated October 19, 1995, between the Registrant, on behalf of AIM Municipal Bond
Fund, and The Bank of New York was filed electronically as an Exhibit to Post-Effective Amendment No.
70 on November 17, 1995, and is hereby incorporated by reference.
(9) (a) - (1) Form of Transfer Agency and Registrar Agreement, dated as of June 7, 1993, between AIM Funds
Group, a Massachusetts business trust, and The Shareholder Services Group, Inc. was filed as an
Exhibit to Post-Effective Amendment No. 65 on July 16, 1993.
</TABLE>
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<PAGE> 253
<TABLE>
<S> <C> <C>
- (2) Transfer Agency and Service Agreement, dated as of November 1, 1994, between the Registrant and
A I M Fund Services, Inc. was filed electronically as an Exhibit to Post-Effective Amendment No. 70
on November 17, 1995 and is hereby incorporated by reference.
- (3) Amendment No. 1, dated August 4, 1997, to the Transfer Agency and Service Agreement, dated as of
November 1, 1994, between Registrant and A I M Fund Services, Inc. is filed herewith electronically.
(b) - (1) Remote Access and Related Service Agreement, dated as of December 23, 1994, between the
Registrant and First Data Investor Services Group, Inc. (formerly, The Shareholder Services Group,
Inc.) was filed electronically as an Exhibit to Post-Effective Amendment No. 71 on April 26, 1996,
and is hereby incorporated by reference.
- (2) Amendment No. 1, effective October 4, 1995, to the Remote Access and Related Services Agreement,
dated as of December 23, 1994, between the Registrant and First Data Investor Services Group, Inc.
(formerly, The Shareholder Services Group, Inc.) was filed electronically as an Exhibit to
Post-Effective Amendment No. 71 on April 26, 1996, and is hereby incorporated by reference.
- (3) Addendum No. 2, effective October 12, 1995, to the Remote Access and Related Services Agreement,
dated as of December 23, 1994, between the Registrant and First Data Investor Services Group, Inc.
(formerly, The Shareholder Services Group, Inc.) was filed electronically
as an Exhibit to Post-Effective Amendment No. 71 on April 26, 1996, and is hereby incorporated by
reference.
- (4) Amendment No. 3, effective February 1, 1997, to the Remote Access and Related
Services Agreement, dated December 23, 1994, between the Registrant and First Data
Investor Services Group, Inc. (formerly, The Shareholder Services Group, Inc.) was
filed electronically as an Exhibit to Post-Effective Amendment No. 73 on July 25,
1997, and is hereby incorporated by reference.
- (5) Exhibit 1, effective as of August 4, 1997, to the Remote Access and Related Services Agreement,
dated December 23, 1994, between the Registrant and First Data Investor Services Group, Inc. is filed
herewith electronically.
- (6) Preferred Registration Technology Escrow Agreement, dated September 10, 1997, between the
Registrant and First Data Investor Services Group, Inc. is filed herewith electronically.
- (7) Shareholder Sub-Accounting Services Agreement, dated as of October 1, 1993, between the
Registrant and First Data Investor Services Group, Inc. (formerly, The Shareholder Services Group,
Inc.), Financial Data Services, Inc. and Merrill, Lynch, Pierce, Fenner & Smith Incorporated was
filed electronically as an Exhibit to Post-Effective Amendment No. 71 on April 26, 1996, and is
hereby incorporated by reference.
(c) - (1) Master Administrative Services Agreement, dated August 6, 1993, between the Registrant and A I M
Advisors, Inc. was filed as an Exhibit to Post-Effective Amendment No. 67 on October 15, 1993.
- (2) Master Administrative Services Agreement, dated October 18, 1993, between the Registrant and
A I M Advisors, Inc. was filed as an Exhibit to Post-Effective Amendment No. 68 on April 11, 1994,
and was filed electronically as an Exhibit to Post-Effective Amendment No. 71 on April 26, 1996.
</TABLE>
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<PAGE> 254
<TABLE>
<S> <C> <C> <C>
- (3) Master Administrative Services Agreement, dated February 28, 1997, between the Registrant and
A I M Advisors, Inc. was filed electronically as an Exhibit to Post-Effective Amendment No. 72 on
April 28, 1997, and is hereby incorporated by reference.
- (4) Administrative Services Agreement, dated October 18, 1993, between A I M Advisors, Inc., on
behalf of the Registrant's portfolios, and A I M Fund Services, Inc. was filed as an Exhibit to
Post-Effective Amendment No. 68 on April 11, 1994.
- (5) Amendment No. 1, dated as of May 11, 1994, to the Administrative Services Agreement, dated
October 18, 1993, between A I M Advisors, Inc., on behalf of the Registrant's portfolios, and
A I M Fund Services, Inc. was filed as an Exhibit to Post-Effective Amendment No. 69 on
February 28, 1995.
- (6) Amendment No. 2, dated as of July 1, 1994, to the Administrative Services Agreement, dated
October 18, 1993, between A I M Advisors, Inc., on behalf of the Registrant's portfolios, and
A I M Fund Services, Inc. was filed as an Exhibit to Post-Effective Amendment No. 69 on
February 28, 1995.
- (7) Amendment No. 3, dated as of September 16, 1994, to the Administrative Services Agreement, dated
October 18, 1993, between A I M Advisors, Inc., on behalf of the Registrant's portfolios, and
A I M Fund Services, Inc. was filed as an Exhibit to Post-Effective Amendment No. 69 on
February 28, 1995.
(10) - Opinion of Ballard Spahr Andrews & Ingersoll was filed in connection with the Registrant's Rule 24f-2
Notice on or about February 27, 1997.
(11) (a) - Consent of KPMG Peat Marwick LLP is filed herewith electronically.
(b) - Consent of Price Waterhouse LLP is filed herewith electronically.
(c) - Consent of Ballard Spahr Andrews & Ingersoll, LLP is filed herewith electronically.
(12) - Financial Statements - None.
(13) - Agreements Concerning Initial Capitalization - None.
(14) (a) - (1) Form of Registrant's IRA Documents are filed herewith electronically.
- (2) Form of Registrant's IRA Documents were filed as an Exhibit to Post-Effective Amendment No. 64
on April 30, 1993.
(b) - (1) Form of Registrant's Simplified Employee Pension Plan and Salary Reduction Simplified Employee
Pension Plan Documents are filed herewith electronically.
- (2) Form of Registrant's Simplified Employee Pension - Individual Retirement Accounts Contribution
Agreement was filed as an Exhibit to Post-Effective Amendment No. 64 on April 30, 1993.
(c) - Forms of Registrant's Money Purchase Pension and Profit Sharing Plan Document, Trust Agreement,
Adoption Agreements, Summary Plan Descriptions and Applications are filed herewith electronically.
(d) - (1) Forms of Registrant's 403(b) Plan Documents are filed herewith electronically.
</TABLE>
C-6
<PAGE> 255
<TABLE>
<S> <C> <C> <C>
- (2) Form of Registrant's 403(b) Plan was filed electronically as an Exhibit to Post-Effective
Amendment No. 72 on April 28, 1997.
(e) - Forms of Registrant's SIMPLE IRA are filed herewith electronically.
(f) - Forms of Registrant's Roth IRA are filed herewith electronically.
(15) (a) - (1) Master Distribution Plan for Registrant's Class A Shares and Class C Shares, and related forms,
were filed as an Exhibit to Post-Effective Amendment No. 68 on April 11, 1994.
- (2) Amended Master Distribution Plan for Registrant's Class A Shares and AIM Cash Reserve Shares
(formerly, Class C Shares), and related forms, were filed electronically as an Exhibit to
Post-Effective Amendment No. 71 on April 26, 1996.
- (3) Amended and Restated Master Distribution Plan for Registrant's Class A Shares and AIM Cash
Reserve Shares was filed electronically as an Exhibit to Post-Effective Amendment No. 73 on July 25,
1997, and is hereby incorporated by reference.
- (4) Second Amended and Restated Master Distribution Plan for Registrant's Class A Shares, Class C
Shares and AIM Cash Reserve Shares is filed herewith electronically.
- (5) Master Distribution Plan for Registrant's Class B Shares, and related forms, were filed as an
Exhibit to Post-Effective Amendment No. 68 on April 11, 1994.
- (6) Amended and Restated Master Distribution Plan for Registrant's Class B Shares, and related
forms, were filed electronically as an Exhibit to Post-Effective Amendment No. 70 on November 17,
1995.
- (7) Second Amended and Restated Master Distribution Plan for Registrant's Class B Shares was filed
electronically as an Exhibit to Post-Effective Amendment No. 73 on July 25, 1997, and is hereby
incorporated by reference.
(b) - Form of Shareholder Service Agreement to be used in connection with Registrant's Master Distribution
Plan is filed herewith electronically.
(c) - Form of Bank Shareholder Service Agreement to be used in connection with Registrant's Master
Distribution Plan is filed herewith electronically.
(d) - Form of Variable Group Annuity Contractholder Service Agreement to be used in connection with
Registrant's Master Distribution Plan is filed herewith electronically.
(e) - Form of Agency Pricing Agreement to be used in connection with Registrant's Master Distribution Plan
is filed herewith electronically.
(f) - Forms of Service Agreement for Bank Trust Department and for Brokers for Bank Trust Departments to be
used in connection with Registrant's Master Distribution Plan are filed herewith electronically.
(16) - Computation of Performance Quotations was filed electronically as an Exhibit to Post-Effective
Amendment No. 72 on April 28, 1997, and is hereby incorporated by reference.
(18) (a) - Rule 18f-3 Amended and Restated Multiple Class Plan (effective July 1, 1997) was filed electronically
as an Exhibit to Post-Effective Amendment No. 73 on July 25, 1997.
</TABLE>
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<PAGE> 256
(b) - Rule 18f-3 Second Amended and Restated Multiple Class Plan
(effective September 1, 1997) is filed herewith
electronically.
(27) - Financial Data Schedule is filed herewith electronically.
Item 25. Persons Controlled by or Under Common Control with Registrant
Furnish a list or diagram of all persons directly or indirectly
controlled by or under common control with the Registrant and as to each such
person indicate (1) if a company, the state or other sovereign power under the
laws of which it is organized, and (2) the percentage of voting securities
owned or other basis of control by the person, if any, immediately controlling
it.
None.
Item 26. Number of Holders of Securities
State in substantially the tabular form indicated, as of a specified
date within 90 days prior to the date of filing, the number of record holders
of each class of securities of the Registrant.
<TABLE>
<CAPTION>
Number of Record Holders as
Title of Series of February 2, 1998
--------------- ---------------------------------------
AIM Cash
Reserve
Class A Class B Class C Shares
------- ------- ------- ------
<S> <C> <C> <C> <C>
AIM Balanced Fund 25,820 31,072 680 N/A
AIM Global Utilities Fund 10,205 6,239 47 N/A
AIM High Yield Fund 66,661 62,602 988 N/A
AIM Income Fund 13,808 7,836 167 N/A
AIM Intermediate Government Fund 7,213 4,335 104 N/A
AIM Money Market Fund 13,271 7,437 367 15,467
AIM Municipal Bond Fund 5,197 1,217 24 N/A
AIM Select Growth Fund 14,766 25,911 105 N/A
AIM Value Fund 332,472 432,785 2,893 N/A
</TABLE>
Item 27. Indemnification
State the general effect of any contract, arrangements or statute
under which any director, officer, underwriter or affiliated person of the
Registrant is insured or indemnified in any manner against any liability which
may be incurred in such capacity, other than insurance provided by any
director, officer, affiliated person or underwriter for their own protection.
The Registrant's Agreement and Declaration of Trust (the "Agreement"),
dated May 5, 1993, as amended, provides, among other things (i) that
trustees shall not be liable for any act or omission or any conduct
whatsoever (except for liabilities to the Registrant or its
shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of duty); (ii) for the
indemnification by the Registrant of the trustees and officers to the
fullest extent permitted by the Delaware Business Trust Act; and (iii)
that the shareholders and former shareholders of the Registrant are
held harmless by the
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<PAGE> 257
Registrant (or applicable portfolio or class) from personal liability
arising from their status as such, and are 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 Bylaws and applicable law.
A I M Advisors, Inc., the Registrant and other investment companies
managed by A I M Advisors, Inc., their respective officers, trustees,
directors and employees (the "Insured Parties") are insured under an
Investment Advisory Professional and Directors and Officers Liability
Policy, issued by ICI Mutual Insurance Company, with a $25,000,000
limit of liability.
Item 28. Business and Other Connections of Investment Advisor
Describe any other business, profession, vocation or employment of a
substantial nature in which each investment advisor of the Registrant, and each
director, officer or partner of any such investment advisor, is or has been, at
any time during the past two fiscal years, engaged for his own account or in
the capacity of director, officer, employee, partner, or trustee.
The only employment of a substantial nature of the Advisor's directors
and officers is with the Advisor and its affiliated companies.
Reference is also made to the caption "Management--Investment Advisor"
in the Prospectus which comprises Part A of the Registration
Statement, and to the caption "Management of the Trust" of the
Statement of Additional Information which comprises Part B of the
Registration Statement, and to Item 29(b) of this Part C.
Item 29. Principal Underwriters
(a) A I M Distributors, Inc., the Registrant's principal
underwriter, also acts as a principal underwriter to
the following investment companies:
AIM Advisor Funds, Inc.
AIM Equity Funds, Inc. (Retail Classes)
AIM International Funds, Inc.
AIM Investment Securities Funds
AIM Summit Fund, Inc.
AIM Tax-Exempt Funds, Inc.
AIM Variable Insurance Funds, Inc.
(b)
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ---------------- -------------------------- ---------------
<S> <C> <C>
Charles T. Bauer Chairman of the Board of Directors Chairman & Trustee
Michael J. Cemo President & Director None
Gary T. Crum Director Senior Vice President
Robert H. Graham Senior Vice President & Director President & Trustee
William G. Littlepage Senior Vice President & Director None
</TABLE>
- ------------------------------------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
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<PAGE> 258
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ---------------- -------------------------- ---------------
<S> <C> <C>
John Caldwell Senior Vice President None
Marilyn M. Miller Senior Vice President None
James L. Salners Senior Vice President None
Gordon J. Sprague Senior Vice President None
Michael C. Vessels Senior Vice President None
B.J. Thompson First Vice President None
James R. Anderson Vice President None
John J. Arthur Vice President & Treasurer Senior Vice President
& Treasurer
Mary K. Coleman Vice President None
Melville B. Cox Vice President & Chief Vice President
Compliance Officer
Charles R. Dewey Vice President None
Sidney M. Dilgren Vice President None
Tony D. Green Vice President None
William H. Kleh Vice President None
Ofelia M. Mayo Vice President, General Counsel Assistant Secretary
& Assistant Secretary
Terri L. Ransdell Vice President None
Carol F. Relihan Vice President Senior Vice President
& Secretary
Kamala C. Sachidanandan Vice President None
Frank V. Serebrin Vice President None
Christopher T. Simutis Vice President None
Robert D. Van Sant, Jr. Vice President None
Gary K. Wendler Vice President None
</TABLE>
- -----------------------------------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
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<PAGE> 259
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Principal Underwriter with Registrant
- ---------------- -------------------------- ---------------
<S> <C> <C>
David E. Hessel Assistant Vice President, None
Assistant Treasurer
& Controller
Kathleen J. Pflueger Secretary Assistant Secretary
Luke P. Beausoleil Assistant Vice President None
Tisha B. Christopher Assistant Vice President None
Glenda A. Dayton Assistant Vice President None
Kathleen M. Douglas Assistant Vice President None
Terri N. Fiedler Assistant Vice President None
Mary E. Gentempo Assistant Vice President None
Jeffrey L. Horne Assistant Vice President None
Melissa E. Hudson Assistant Vice President None
Jodie L. Johnson Assistant Vice President None
Kathryn A. Jordan Assistant Vice President None
Wayne W. LaPlante Assistant Vice President None
Kim T. Lankford Assistant Vice President None
Ivy B. McLemore Assistant Vice President None
David B. O'Neil Assistant Vice President None
Patricia M. Shyman Assistant Vice President None
Nicholas D. White Assistant Vice President None
Norman W. Woodson Assistant Vice President None
Nancy L. Martin Assistant General Counsel Assistant Secretary
& Assistant Secretary
Samuel D. Sirko Assistant General Counsel Assistant Secretary
& Assistant Secretary
Stephen I. Winer Assistant Secretary Assistant Secretary
</TABLE>
- ------------------------------------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
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<PAGE> 260
(c) - Not Applicable
Item 30. Location of Accounts and Records
With respect to each account, book or other document required to be
maintained by Section 31(a) of the 1940 Act and the Rules (17 CFR 270.31a-1 to
31a-3) promulgated thereunder, furnish the name and address of each person
maintaining physical possession of each such account, book or other document.
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173, maintains physical possession of each such accounts, books
or other documents of the Registrant at its principal executive
offices, except for those maintained by the Registrant's Custodians,
State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110 (except AIM Municipal Bond Fund) and Bank of New
York , 90 Washington Street, 11th Floor, New York, New York 10286 (for
AIM Municipal Bond Fund only), and the Registrant's Transfer Agent and
Dividend Paying Agent, A I M Fund Services, Inc., 11 Greenway Plaza,
Suite 100, Houston, Texas 77046-1173.
Item 31. Management Services
Furnish a summary of the substantive provisions of any
management-related service contract not discussed in Part A or Part B of this
Form (because the contract was not believed to be of interest to a purchaser of
securities of the Registrant) under which services are provided to the
Registrant, indicating the parties to the contract, the total dollars paid and
by whom, for the last three fiscal years.
None.
Item 32. Undertakings
The Registrant undertakes to furnish each person to whom a prospectus
is delivered with a copy of the applicable Fund's latest annual report
to shareholders, upon request and without charge.
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<PAGE> 261
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment
to its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Houston, Texas on the 27th day of
February, 1998.
REGISTRANT: AIM FUNDS GROUP
By: /s/ Robert H. Graham
---------------------------------
Robert H. Graham, President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Charles T. Bauer Chairman & Trustee February 27, 1998
--------------------------
(Charles T. Bauer)
/s/ Robert H. Graham Trustee & President February 27, 1998
------------------------- (Principal Executive Officer)
(Robert H. Graham)
/s/ Bruce L. Crockett Trustee February 27, 1998
--------------------------
(Bruce L. Crockett)
/s/ Owen Daly II Trustee February 27, 1998
-----------------------------
(Owen Daly II)
/s/ Jack Fields Trustee February 27, 1998
-------------------------------
(Jack Fields)
/s/ Carl Frischling Trustee February 27, 1998
-------------------------------
(Carl Frischling)
/s/ John F.Kroeger Trustee February 27, 1998
----------------------------
(John F. Kroeger)
/s/ Lewis F. Pennock Trustee February 27, 1998
----------------------------
(Lewis F. Pennock)
/s/ Ian W. Robinson Trustee February 27, 1998
----------------------------
(Ian W. Robinson)
/s/ Louis S. Sklar Trustee February 27, 1998
-----------------------------
(Louis S. Sklar)
Senior Vice President &
/s/ John J. Arthur Treasurer (Principal Financial February 27, 1998
----------------------------- and Accounting Officer)
(John J. Arthur)
</TABLE>
<PAGE> 262
INDEX TO EXHIBITS
AIM FUNDS GROUP
<TABLE>
<CAPTION>
Exhibit Number
- --------------
<S> <C>
1(g) Sixth Amendment to Agreement and Declaration of Trust of the Registrant (name change of AIM Growth Fund)
6(a)(8) Amended and Restated Master Distribution Agreement, dated August 4, 1997, between the Registrant (on
behalf of its Class A Shares, Class C Shares and AIM Cash Reserve Shares) and A I M Distributors, Inc.
6(b) Form of Selected Dealer Agreement between A I M Distributors, Inc. and selected dealers
6(c) Form of Bank Selling Group Agreement between A I M Distributors, Inc. and banks
7(b)(1) Form of Deferred Compensation Agreement for Non-Affiliated Directors, approved March 12, 1997
9(a)(3) Amendment No. 1, dated August 4, 1997, to the Transfer Agency and Service Agreement, dated as of November
1, 1994, between Registrant and A I M Fund Services, Inc.
9(b)(5) Exhibit 1, effective as of August 4, 1997, to the Remote Access and Related Services Agreement, dated
December 23, 1994, between the Registrant and First Data Investor Services Group, Inc.
9(b)(6) Preferred Registration Technology Escrow Agreement, dated September 10, 1997, between the Registrant and
First Data Investor Services Group, Inc.
11(a) Consent of KPMG Peat Marwick LLP
11(b) Consent of Price Waterhouse LLP
11(c) Consent of Ballard Spahr Andrews & Ingersoll, LLP
14(a)(1) Form of Registrant's IRA Documents
14(b)(1) Form of Registrant's Simplified Employee Pension Plan and Salary Reduction Simplified Employee Pension
Plan Documents
14(c) Forms of Registrant's Money Purchase Pension and Profit Sharing Plan Document, Trust Agreement, Adoption
Agreement, Summary Plan Descriptions and Applications
14(d)(1) Forms of Registrant's 403(b) Plan Documents
14(e) Forms of Registrant's SIMPLE IRA
14(f) Forms of Registrant's Roth IRA
15(a)(4) Second Amended and Restated Master Distribution Plan for Registrant's Class A Shares, Class C Shares and
AIM Cash Reserve Shares
</TABLE>
<PAGE> 263
<TABLE>
<S> <C>
15(b) Form of Shareholder Service Agreement to be used in connection with Registrant's Master Distribution Plan
15(c) Form of Bank Shareholder Service Agreement to be used in connection with Registrant's Master Distribution
Plan
15(d) Form of Variable Group Annuity Contractholder Service Agreement to be used in connection with
Registrant's Master Distribution Plan
15(e) Form of Agency Pricing Agreement to be used in connection with Registrant's Master Distribution Plan
15(f) Forms of Service Agreement for Bank Trust Department and for Brokers for Bank Trust Departments to be
used in connection with Registrant's Master Distribution Plan
18(b) Rule 18f-3 Second Amended and Restated Multiple Class Plan (effective September 1, 1997)
27 Financial Data Schedule
</TABLE>
C-14
<PAGE> 1
EXHIBIT 1(g)
SIXTH AMENDMENT
TO
AGREEMENT AND DECLARATION OF TRUST
OF
AIM FUNDS GROUP
THIS SIXTH AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST OF AIM FUNDS
GROUP (the "Amendment") is entered into as of the 9th day of December, 1997,
among Charles T. Bauer, Bruce L. Crockett, Owen Daly II, Jack Fields, Carl
Frischling, Robert H. Graham, John F. Kroeger, Lewis F. Pennock, Ian W. Robinson
and Louis S. Sklar, as Trustees, and each person who became or becomes a
Shareholder in accordance with the terms set forth in that certain Agreement and
Declaration of Trust of AIM Funds Group entered into as of May 5, 1993, as
amended (the "Agreement").
WHEREAS, Section 9.7 of the Agreement authorizes the Trustees without
Shareholder vote to amend or otherwise supplement the Agreement by making an
amendment; and
WHEREAS, at a meeting duly called and held on the 9th day of December,
1997, the Trustees have resolved to amend, effective May 1, 1998, the Agreement
as hereinafter set forth.
NOW, THEREFORE, the Trustees hereby amend the Agreement as hereinafter
set forth:
1. Capitalized terms not specifically defined in this Amendment shall
have the meanings ascribed to them in the Agreement.
2. Section 2.3 of the Agreement, as amended, is hereby further amended
to read in its entirety as follows:
"Section 2.3. Establishment of Portfolios and Classes. The Trust shall
be divided into nine Portfolios, the AIM Balanced Fund, the AIM Global Utilities
Fund, the AIM High Yield Fund, the AIM Income Fund, the AIM Intermediate
Government Fund, the AIM Money Market Fund, the AIM Municipal Bond Fund, the AIM
Select Growth Fund, and the AIM Value Fund. With the exception of the AIM Money
Market Fund, all of the eight other Portfolios shall have three Classes, the
Class A Shares, the Class B Shares, and the Class C Shares. The AIM Money Market
Fund shall have four Classes, the Class A Shares, the Class B Shares, the Class
C Shares, and the AIM Cash Reserve Shares. The above Portfolios and their
respective Classes as set forth in this Section 2.3 are collectively referred to
as the "Portfolios." The establishment and designation of any other Portfolio or
Class thereof, or, subject to Section 6.1 hereof, any change to the Portfolios,
shall be effective upon the adoption by a majority of the then Trustees of a
resolution which sets forth such establishment, designation or change."
The foregoing shall not be construed to amend or replace Sections 2.3.1
and 2.3.2 of the Agreement.
3. With the exception of the amendment in the preceding paragraph 2 of
this Amendment, the Agreement shall in all other respects remain in full force
and effect.
4. This Amendment may be executed in multiple counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same Amendment.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this Sixth Amendment to Agreement and Declaration of Trust
of AIM Funds Group as of the day first above written.
/s/ Charles T. Bauer /s/ Bruce L. Crockett
- -------------------------------- -------------------------------
Charles T. Bauer, Trustee Bruce L. Crockett, Trustee
/s/ Owen Daly II /s/ Jack Fields
- -------------------------------- -------------------------------
Owen Daly II, Trustee Jack Fields, Trustee
/s/ Carl Frischling /s/ Robert H. Graham
- -------------------------------- -------------------------------
Carl Frischling, Trustee Robert H. Graham, Trustee
/s/ John F. Kroeger /s/ Lewis F. Pennock
- -------------------------------- -------------------------------
John F. Kroeger, Trustee Lewis F. Pennock, Trustee
/s/ Ian w. Robinson /s/ Louis S. Sklar
- -------------------------------- -------------------------------
Ian W. Robinson, Trustee Louis S. Sklar, Trustee
[THIS IS THE SIGNATURE PAGE FOR
THE SIXTH AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
OF AIM FUNDS GROUP]
2
<PAGE> 1
EXHIBIT 6(a)(8)
AMENDED AND RESTATED
MASTER DISTRIBUTION AGREEMENT
BETWEEN
AIM FUNDS GROUP
AND
A I M DISTRIBUTORS, INC.
(APPLICABLE TO CLASS A SHARES, CLASS C SHARES AND AIM CASH RESERVE SHARES)
THIS AGREEMENT made this 4th day of August, 1997, by and between AIM
FUNDS GROUP, 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
<PAGE> 2
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 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 specify 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 or AIM Cash Reserve
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 or 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 or AIM Cash Reserve 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.
-2-
<PAGE> 3
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.
(B) The Company shall allow directly to investment dealers and other
financial institutions through whom Class A shares or AIM Cash Reserve 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
-3-
<PAGE> 4
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
information (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.
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
-4-
<PAGE> 5
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 of 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.
-5-
<PAGE> 6
(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
February 28, 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.
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.
-6-
<PAGE> 7
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.
-7-
<PAGE> 8
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
AIM FUNDS GROUP
By: /s/ Robert H. Graham
----------------------------
Name: Robert H. Graham
Title: President
Attest: /s/ Samuel D. Sirko
------------------------
Name: Samuel D. Sirko
Title: Assistant Secretary
A I M DISTRIBUTORS, INC.
By: /s/ Michael J. Cemo
----------------------------
Name: Michael J. Cemo
Title: President
Attest: /s/ Stephen I. Winer
------------------------
Name: Stephen I. Winer
Title: Assistant Secretary
-8-
<PAGE> 9
APPENDIX A
TO
MASTER DISTRIBUTION AGREEMENT
OF
AIM FUNDS GROUP
CLASS A SHARES
- --------------
AIM Balanced Fund
AIM Global Utilities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund AIM Value Fund
AIM Value Fund
CLASS C SHARES
- --------------
AIM Balanced Fund
AIM Global Utilities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Value Fund
AIM CASH RESERVE SHARES
- -----------------------
AIM Money Market Fund
-9-
<PAGE> 1
EXHIBIT 6(b)
[AIM LOGO APPEARS HERE]
A I M DISTRIBUTORS, INC.
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 of
the common stock (the "Shares") of the registered investment companies listed
on Schedule A attached hereto 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), as determined in accordance with the then effective
prospectus used in connection with the offer and sale of Shares
(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 on the attached
Schedule 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. With respect to the Funds, the Shares of which are
indicated on the attached Schedule A as being sold with a contingent
deferred sales charge (the "CDSC Funds"), you will be paid a commission or
concession as disclosed in the CDSC Fund's then current prospectus. 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
(the "No-Load Funds"), you may charge a reasonable administrative fee. For
the purpose of this Agreement the terms "Sales Charge" and "Dealer
Commission" apply only to the Load Funds and the CDSC Funds. All commissions
and concessions 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. 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.
7/97
<PAGE> 2
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.
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's Concession 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's Concession
will thereafter be made to reflect actual purchases by your customer if he
should fail to fulfil 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 commissions plus interest thereon.
9 You and we agree to abide by the Rules of Fair Practice 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 concession 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 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.
7/97
<PAGE> 3
16 We will supply you with copies of the Prospectuses and Statements of
Additional Information 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 on file with the U.S. Securities and Exchange Commission.
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.
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.
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
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
7/97
<PAGE> 4
[AIM LOGO APPEARS HERE]
A I M DISTRIBUTORS, INC.
SCHEDULE "A" TO
SELECTED DEALER AGREEMENT
<TABLE>
<CAPTION>
Shares Sold Shares Sold
Fund With Sales Charges* With CDSC**
- --------------------------------------------------------------------------------
<S> <C> <C>
AIM Advisor Flex Fund Yes Yes
AIM Advisor International Value Fund Yes Yes
AIM Advisor Large Cap Value Fund Yes Yes
AIM Advisor MultiFlex Fund Yes Yes
AIM Advisor Real Estate Fund Yes Yes
AIM Aggressive Growth Fund Yes No
AIM Asian Growth Fund Yes Yes
AIM Balanced Fund Yes Yes
AIM Blue Chip Fund Yes Yes
AIM Capital Development Fund Yes Yes
AIM Charter Fund Yes Yes
AIM Constellation Fund Yes Yes
AIM European Development Fund Yes Yes
AIM Global Aggressive Growth Fund Yes Yes
AIM Global Growth Fund Yes Yes
AIM High Income Municipal Fund Yes Yes
AIM Global Income Fund Yes Yes
AIM Global Utilities Fund Yes Yes
AIM Growth Fund Yes Yes
AIM High Income Municipal Fund Yes Yes
AIM High Yield Fund Yes Yes
AIM Income Fund Yes Yes
AIM Intermediate Government Fund Yes Yes
AIM International Equity Fund Yes Yes
AIM Limited Maturity Treasury Fund Yes No
AIM Money Market Fund Yes Yes
AIM Cash Reserve Shares No No
AIM Municipal Bond Fund Yes Yes
AIM Tax-Exempt Bond Fund of Connecticut Yes No
AIM Tax-Exempt Cash Fund No No
AIM Tax-Free Intermediate Fund Yes No
</TABLE>
2/98
<PAGE> 5
<TABLE>
Shares Sold Shares Sold
Fund With Sales Charges* With CDSC**
- --------------------------------------------------------------------------------
<S> <C> <C>
AIM Value Fund Yes Yes
AIM Weingarten Fund Yes Yes
</TABLE>
A I M Distributors may from time to time make payments of finders fees
or sponsor other incentive programs as described in the applicable fund
prospectus and statement of additional information, which are incorporated
herein by reference as they may be amended from time to time.
*Trades at $1 million and over breakpoint automatically subject to CDSC with
exception of AIM Cash Reserve Shares, AIM Limited Maturity Treasury Fund, AIM
Tax-Exempt Cash Fund and AIM Tax-Free Intermediate Fund.
**For all Funds sold with CDSC (includes Class B and Class C shares).
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
2/98
<PAGE> 1
EXHIBIT 6(c)
[AIM LOGO APPEARS HERE]
A I M DISTRIBUTORS, INC.
BANK ACTING AS AGENT
FOR ITS CUSTOMERS
Agreement Relating to Shares
of AIM Family of Mutual Funds
(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 listed on Schedule A hereto which may be
amended from time to time by us (the "Funds"). As exclusive agent for the
Funds, we are offering to make available shares of common stock or of
beneficial interest, as the case may be, 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 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 on the attached Schedule A 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. With respect to the Funds,
the Shares of which are indicated on the attached Schedule A as being sold
with a contingent deferred sales charge (the "CDSC Funds"), you will be
paid a commission or concession as disclosed in the CDSC Fund's then
current prospectus. 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.
7/97
<PAGE> 2
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 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:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
7/97
<PAGE> 3
[AIM LOGO APPEARS HERE]
A I M DISTRIBUTORS, INC.
SCHEDULE "A" TO
BANK SELLING GROUP AGREEMENT
<TABLE>
<CAPTION>
Shares Sold Shares Sold
Fund With Sales Charges* With CDSC**
- --------------------------------------------------------------------------------
<S> <C> <C>
AIM Advisor Flex Fund Yes Yes
AIM Advisor International Value Fund Yes Yes
AIM Advisor Large Cap Value Fund Yes Yes
AIM Advisor MultiFlex Fund Yes Yes
AIM Advisor Real Estate Fund Yes Yes
AIM Aggressive Growth Fund Yes No
AIM Asian Growth Fund Yes Yes
AIM Balanced Fund Yes Yes
AIM Blue Chip Fund Yes Yes
AIM Capital Development Fund Yes Yes
AIM Charter Fund Yes Yes
AIM Constellation Fund Yes Yes
AIM European Development Fund Yes Yes
AIM Global Aggressive Growth Fund Yes Yes
AIM Global Growth Fund Yes Yes
AIM Global Income Fund Yes Yes
AIM Global Utilities Fund Yes Yes
AIM Growth Fund Yes Yes
AIM High Income Municipal Fund Yes Yes
AIM High Yield Fund Yes Yes
AIM Income Fund Yes Yes
AIM Intermediate Government Fund Yes Yes
AIM International Equity Fund Yes Yes
AIM Limited Maturity Treasury Fund Yes No
AIM Money Market Fund Yes Yes
AIM Cash Reserve Shares No No
AIM Municipal Bond Fund Yes Yes
AIM Tax-Exempt Bond Fund of Connecticut Yes No
AIM Tax-Exempt Cash Fund No No
AIM Tax-Free Intermediate Fund Yes No
</TABLE>
2/98
<PAGE> 4
<TABLE>
Shares Sold Shares Sold
Fund With Sales Charges* With CDSC**
- --------------------------------------------------------------------------------
<S> <C> <C>
AIM Value Fund Yes Yes
AIM Weingarten Fund Yes Yes
</TABLE>
A I M Distributors may from time to time make payments of finders fees
or sponsor other incentive programs as described in the applicable fund
prospectus and statement of additional information, which are incorporated
herein by reference as they may be amended from time to time.
*Trades at $1 million and over breakpoint automatically subject to CDSC with
exception of AIM Cash Reserve Shares, AIM Limited Maturity Treasury Fund, AIM
Tax-Exempt Cash Fund and AIM Tax-Free Intermediate Fund.
**For all Funds sold with CDSC (includes Class B and Class C shares).
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
2/98
<PAGE> 1
EXHIBIT 7(b)(1)
DEFERRED COMPENSATION AGREEMENT
SUMMARY
Your Deferred Compensation Agreement (the "Agreement") allows
you to defer some or all of your annual trustee's fees otherwise payable by the
Funds. Deferred fees are deemed invested in certain mutual funds selected by
you. The deferral is pre-tax, and the deferred amount and the credited gains,
losses and income are not subject to tax until paid out to you.
Your deferrals (and investment experience) are posted to a
bookkeeping account maintained by the Funds in your name. In order for you to
enjoy the tax deferral, the payments due under the Agreement will be paid from
the Funds' general assets, and you are considered a general unsecured creditor
of the Funds; you may not transfer your right to receive payments under the
Agreement to any other person, nor may you pledge that right to secure any debt
or other obligation; finally, an election to defer must be made in writing
before the first day of the calendar year for which the fees are earned (the
"Election Date") and elections can be changed only prospectively, effective for
the next calendar year.
An important change has been made to your Agreement to give
you greater flexibility to select the time and method of payment of amounts
that you defer: for amounts previously deferred and for future elections you
now designate a specific Payment Date and payment method which generally may be
changed with at least one year's advance notice.
PAYMENT DATE ELECTION
Deferred fees (and the income, gains and losses credited
during the deferral period) generally will be paid out as elected by you in
installments or a single sum in cash within 30 days of the Payment Date
elected. (For payments in connection with your termination of service as a
trustee, see below.)
Deferrals must be for a minimum two year period (unless your
retirement date under the Retirement Plan is earlier). Thus, the Payment Date
may be the first day of any calendar quarter that follows the second
anniversary of the applicable Election Date or your retirement date. Thus, fees
previously deferred and fees payable for the calendar year beginning January 1,
1997 may be deferred to the first day of any calendar quarter in any year from
1999.
EXTENDING A PAYMENT DATE
At least one year prior to any Payment Date, you may extend
that Date, provided that the additional period of deferral is at least two
years. You may make this change in Payment Date only once.
-1-
<PAGE> 2
PAYMENT METHOD
The value of your deferrals (based on your election as to how
your deferral account is to be considered invested) will be paid in cash, in
one lump sum or in annual installments (over a period not to exceed 10 years)
as you select at the time you select your Payment Date. You may change this
election, but the change will not be given effect unless it is made at least
one year before your Payment Date or your ceasing to be a trustee (whichever
occurs first). This one year requirement is waived in the case of your death
(see Termination of Service, below).
TERMINATION OF SERVICE
Upon your death, your account under the Agreement will be paid
out as elected by you in installments or in a single sum in cash as soon as
practicable. Payment will be made to your designated Beneficiary or
Beneficiaries or to your estate if there is no surviving Beneficiary.
Upon termination of your service as trustee for any reason
other than death or your retirement (as defined in the Retirement Plan), your
account will be paid to you as a single sum (or in installments if you had
timely elected that method) in cash within three months following the end of
the fiscal year in which you terminate, regardless of the Payment Dates you
elected.
-2-
<PAGE> 3
DEFERRED COMPENSATION AGREEMENT
-------------------------------
AGREEMENT, made on this __ day of _______, 19__, by and
between the registered open-end investment companies listed on Appendix A
hereto (the "Funds"), and
________________________________________________________________ (the
"Director") residing at ___________________________________________________.
WHEREAS, the Funds and the Director have entered into
agreements pursuant to which the Director will serve as a director/trustee of
the Funds; and
WHEREAS, if the Funds and the Director have previously entered
into an additional agreement whereby the Funds will provide to the Director a
vehicle under which the Director can defer receipt of directors' fees payable
by the Funds and now desire to amend and restate such agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth in this Agreement, the Funds and the Director hereby
agree as follows:
1. DEFINITION OF TERMS AND CONSTRUCTION
------------------------------------
1.1 Definitions. Unless a different meaning is plainly implied by
the context, the following terms as used in this Agreement shall have the
following meanings:
(a) "Beneficiary" shall mean such person or persons
designated pursuant to Section 4.3 hereof to receive benefits after the death
of the Director.
(b) "Boards of Directors" shall mean the respective
Boards of Directors of the Funds.
(c) "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, or any successor statute.
(d) "Compensation" shall mean the amount of directors'
fees paid by each of the Funds to the Director during a Deferral Year prior to
reduction for Compensation Deferrals made under this Agreement.
(e) "Compensation Deferral" shall mean the amount or
amounts of the Director's Compensation deferred under the provisions of Section
3 of this Agreement.
-1-
<PAGE> 4
(f) "Deferral Accounts" shall mean the accounts
maintained to reflect the Director's Compensation Deferrals made pursuant to
Section 3 hereof (or pursuant to any prior agreement) and any other credits or
debits thereto.
(g) "Deferral Year" shall mean each calendar year during
which the Director makes, or is entitled to make, Compensation Deferrals under
Section 3 hereof.
(h) "Retirement" shall have the same meaning as set forth
under the Retirement Plan.
(i) "Retirement Plan" shall mean the "AIM Funds
Retirement Plan for Eligible Directors/Trustees."
(j) "Valuation Date" shall mean the last business day of
each calendar year and any other day upon which the Funds makes valuations of
the Deferral Accounts.
1.2 Plurals and Gender. Where appearing in this Agreement the
singular shall include the plural and the masculine shall include the feminine,
and vice versa, unless the context clearly indicates a different meaning.
1.3 Directors and Trustees. Where appearing in this Agreement,
"Director" shall also refer to "Trustee" and "Board of Directors" shall also
refer to "Board of Trustees."
1.4 Headings. The headings and sub-headings in this Agreement are
inserted for the convenience of reference only and are to be ignored in any
construction of the provisions hereof.
1.5 Separate Agreement for Each Fund. This Agreement is drafted,
and shall be construed, as a separate agreement between the Director and each
of the Funds.
2. PERIOD DURING WHICH COMPENSATION DEFERRALS ARE PERMITTED
--------------------------------------------------------
2.1 Commencement of Compensation Deferrals. The Director may
elect, on a form provided by, and submitted to, the Presidents of the
respective Funds, to commence Compensation Deferrals under Section 3 hereof for
the period beginning on the later of (i) the date this Agreement is executed or
(ii) the date such form is submitted to the Presidents of the Funds.
2.2 Termination of Deferrals. The Director shall not be eligible
to make Compensation Deferrals after the earliest of the following dates:
(a) The date on which he ceases to serve as a Director of
all of the Funds; or
(b) The effective date of the termination of this
Agreement.
-2-
<PAGE> 5
3. COMPENSATION DEFERRALS
----------------------
3.1 Compensation Deferral Elections.
(a) On or prior to the first day of any Deferral Year,
the Director may elect, on the form described in Section 2.1 hereof, to defer
the receipt of all or a portion of his Compensation for such Deferral Year.
Such writing shall set forth the amount of such Compensation Deferral (in whole
percentage amounts). Such election shall continue in effect for all subsequent
Deferral Years unless it is canceled or modified as provided below.
(b) Compensation Deferrals shall be withheld from each
payment of Compensation by the Funds to the Director based upon the percentage
amount elected by the Director under Section 3.1(a) hereof.
(c) The Director may cancel or modify the amount of his
Compensation Deferrals on a prospective basis by submitting to the Presidents
of the Funds a revised Compensation Deferral election form. Such change will
be effective as of the first day of the Deferral Year following the date such
revision is submitted to the Presidents of the Funds.
3.2 Valuation of Deferral Account.
(a) Each Fund shall establish a bookkeeping Deferral
Account to which will be credited an amount equal to the Director's
Compensation Deferrals under this Agreement made with respect to Compensation
earned from each such Fund. Compensation Deferrals shall be allocated to the
Deferral Accounts on the first business day following the date such
Compensation Deferrals are withheld from the Director's Compensation. As of
the date of this Agreement, the Deferral Accounts also shall be credited with
the amounts credited to the Director under each other outstanding elective
deferred compensation agreement entered into by and between the Funds and the
Director which is superseded by this Agreement pursuant to Section 6.11 hereof.
The Deferral Accounts shall be debited to reflect any distributions from such
Accounts. Such debits shall be allocated to the Deferral Accounts as of the
date such distributions are made.
(b) As of each Valuation Date, income, gain and loss
equivalents (determined as if the Deferral Accounts are invested in the manner
set forth under Section 3.3, below) attributable to the period following the
next preceding Valuation Date shall be credited to and/or deducted from the
Director's Deferral Accounts.
3.3 Investment of Deferral Account Balances.
(a) (1) The Director may select, from various options
made available by the Funds, the investment media in which all or part of his
Deferral Accounts shall be deemed to be invested.
-3-
<PAGE> 6
(2) The Director shall make an investment
designation on a form provided by the Presidents of the Funds which shall
remain effective until another valid direction has been made by the Director as
herein provided. The Director may amend his investment designation by giving
written direction to the Presidents of the Funds in such manner and at such
time as the Funds may permit, but no less frequently than quarterly on thirty
(30) days' notice prior to the end of a calendar quarter. A timely change to a
Director's investment designation shall become effective as soon as practicable
following receipt by the Presidents of the Funds.
(3) The investment media deemed to be made
available to the Director, and any limitation on the maximum or minimum
percentages of the Director's Deferral Accounts that may be invested any
particular medium, shall be the same as from time-to-time communicated to the
Director by the Presidents of the Funds.
(b) Except as provided below, the Director's Deferral
Accounts shall be deemed to be invested in accordance with his investment
designations, provided such designations conform to the provisions of this
Section. If -
(1) the Director does not furnish the Presidents
of the Funds with complete, written investment instructions, or
(2) the written investment instructions from the
Director are unclear,
then the Director's election to make Compensation Deferrals hereunder shall be
held in abeyance and have no force or effect until such time as the Director
shall provide the Presidents of the Funds with complete investment
instructions. Notwithstanding the above, the Boards of Directors, in their
sole discretion, may disregard the Director's election and determine that all
Compensation Deferrals shall be deemed to be invested in a fund determined by
the Boards of Directors. In the event that any fund under which any portion of
the Director's Deferral Accounts is deemed to be invested ceases to exist, such
portion of the Deferral Accounts thereafter shall be held in the successor to
such fund, subject to subsequent deemed investment elections.
The Fund shall provide an annual statement to the Director
showing such information as is appropriate, including the aggregate amount in
the Deferral Accounts, as of a reasonably current date.
-4-
<PAGE> 7
4. DISTRIBUTIONS FROM DEFERRAL ACCOUNTS
------------------------------------
4.1 Payment Date and Methods.
(a) Designation of Date. Each deferral direction given
pursuant to Section 3.1 shall include designation of the Payment Date for the
value of the amount deferred. Such Payment Date shall be the first day of any
calendar quarter, subject to the limitation set forth in paragraph 4.1(c).
(b) Extension Date. At least one year before the Payment
Date initially designated pursuant to paragraph 4.1(a) above, the Participant
may irrevocably elect to extend such Payment Date to the first day of any
calendar quarter, subject to the limitation set forth in paragraph 4.1(c).
(c) Limitation. The Director shall select a Payment Date
(or extended Payment Date) that is no sooner than the earlier of (i) the
January 1 that follows the second anniversary of the Participant's deferral
election made pursuant to paragraph 4.1(a) or (b) or (ii) the January 1 of the
year after the Participant's Retirement.
(d) Methods of Payment. Distributions from the
Director's Deferral Accounts shall be paid in cash in a single sum unless the
Participant elects, at the time a Payment Date is selected pursuant to
paragraph 4.1(a) or 4.1(b), to receive the amount payable in generally equal
quarterly installments over a period not to exceed ten (10) years. In
addition, as least one year before the Payment Date, a Director may change the
method of payment previously selected.
(e) Irrevocability. Except as provided in paragraph
4.1(b) and 4.1(d), a designation of a Payment Date and an election of
installment payments shall be irrevocable; provided, however, that payment
shall be made or begin on a different date as follows:
(1) Upon the Director's death, payment shall be
made in accordance with Section 4.2,
(2) Upon the Director's ceasing to serve as a
director of all of the Funds for reasons other than death or Retirement,
payment shall be made or begin within three months after the end of the
calendar year in which such termination occurs in accordance with the method
elected by the Director pursuant to paragraph 4.1(d) provided the designation
of such method had been made at least one year before such termination occurred,
except that the Boards of Directors, in their sole discretion, may accelerate
the distribution of such Deferral Accounts,
(3) Upon termination of this Agreement, payment
shall be made in accordance with Section 5.2, and
-5-
<PAGE> 8
(4) In the event of the liquidation, dissolution
or winding up of a Fund or the distribution of all or substantially all of a
Fund's assets and property relating to one or more series of its shares to
the shareholders of such series (for this purpose a sale, conveyance or
transfer of a Fund's assets to a trust, partnership, association or
corporation in exchange for cash, shares or other securities with the
transfer being made subject to, or with the assumption by the transferee of,
the liabilities of the Fund shall not be deemed a termination of the Fund or
such a distribution), all unpaid balances of the Deferral Accounts related to
such Fund as of the effective date thereof shall be paid in a lump sum on
such effective date.
4.2 Death Prior to Complete Distribution of Deferral Accounts.
Upon the death of the Director prior to the commencement of the distribution of
the amounts credited to his Deferral Accounts, the balance of such Accounts
shall be distributed to his Beneficiary in accordance with the method of
payment selected pursuant to paragraph 4.1(d), commencing as soon as practicable
after the Director's death. In the event of the death of the Director after
the commencement of such distribution, but prior to the complete distribution
of his Deferral Accounts, the balance of the amounts credited to his Deferral
Accounts shall be distributed to his Beneficiary over the remaining period
during which such amounts were distributable to the Director under Section 4.1
hereof. Notwithstanding the above, the Boards of Directors, in their sole
discretion, may accelerate the distribution of the Deferral Accounts.
4.3 Designation of Beneficiary. For purposes of Section 4.2
hereof, the Director's Beneficiary shall be the person or persons so designated
by the Director in a written instrument submitted to the Presidents of the
Funds. In the event the Director fails to properly designate a Beneficiary,
his Beneficiary shall be the person or persons in the first of the following
classes of successive preference Beneficiaries surviving at the death of the
Director: the Director's (1) surviving spouse or (2) estate.
4.4 Payments Due Missing Persons. The Funds shall make a
reasonable effort to locate all persons entitled to benefits under this
Agreement. However, notwithstanding any provisions of this Agreement to the
contrary, if, after a period of five (5) years from the date such benefit shall
be due, any such persons entitled to benefits have not been located, their
rights under this Agreement shall stand suspended. Before this provision
becomes operative, the Funds shall send a certified letter to all such persons
to their last known address advising them that their benefits under this
Agreement shall be suspended. Any such suspended amounts shall be held by the
Funds for a period of three (3) additional years (or a total of eight (8) years
from the time the benefits first become payable) and thereafter, if unclaimed,
such amounts shall be forfeited.
-6-
<PAGE> 9
5. AMENDMENTS AND TERMINATION
--------------------------
5.1 Amendments.
(a) The Funds and the Director may, by a written
instrument signed by, or on behalf of, such parties, amend this Agreement at
any time and in any manner.
(b) The Funds reserve the right to amend, in whole or in
part, and in any manner, any or all of the provisions of this Agreement by
action of their Boards of Directors for the purposes of complying with any
provision of the Code or any other technical or legal requirements, provided
that:
(1) No such amendment shall make it possible for
any part of the Director's Deferral Accounts to be used for, or diverted to,
purposes other than for the exclusive benefit of the Director or his
Beneficiaries, except to the extent otherwise provided in this Agreement;
and
(2) No such amendment may reduce the amount of
the Director's Deferral Accounts as of the effective date of such amendment.
5.2 Termination. The Director and the Funds may, by written
instrument signed by, or on behalf of, such parties, terminate this Agreement
at any time. In the event of the termination of this Agreement, the Boards of
Directors, in their sole discretion, may choose to pay out the Director's
Deferral Accounts prior to the designated Payment Dates. Otherwise, following
a termination of this Agreement, such Accounts shall continue to be maintained
in accordance with the provisions of this Agreement until the time they are
paid out.
6. MISCELLANEOUS.
--------------
6.1 Rights of Creditors.
(a) This Agreement is unfunded. Neither the Director nor
any other persons shall have any interest in any specific asset or assets of
the Funds by reason of any Deferral Accounts hereunder, nor any rights to
receive distribution of his Deferral Accounts except and as to the extent
expressly provided hereunder. The Funds shall not be required to purchase,
hold or dispose of any investments pursuant to this Agreement; however, if in
order to cover their obligations hereunder the Funds elect to purchase any
investments the same shall continue for all purposes to be a part of the
general assets and property of the Funds, subject to the claims of their
general creditors and no person other than the Funds shall by virtue of the
provisions of this Agreement have any interest in such assets other than an
interest as a general creditor.
-7-
<PAGE> 10
(b) The rights of the Director and the Beneficiaries to
the amounts held in the Deferral Accounts are unsecured and shall be subject to
the creditors of the Funds. With respect to the payment of amounts held under
the Deferral Accounts, the Director and his Beneficiaries have the status of
unsecured creditors of the Funds. This Agreement is executed on behalf of the
Funds by an officer, or other representative, of the Funds as such and not
individually. Any obligation of the Funds hereunder shall be an unsecured
obligation of the Funds and not of any other person.
6.2 Agents. The Funds may employ agents and provide for such
clerical, legal, actuarial, accounting, advisory or other services as it deems
necessary to perform their duties under this Agreement. The Funds shall bear
the cost of such services and all other expenses they incur in connection with
the administration of this Agreement.
6.3 Liability and Indemnification. Except for their own gross
negligence, willful misconduct or willful breach of the terms of this
Agreement, the Funds shall be indemnified and held harmless by the Director
against liability or losses occurring by reason of any act or omission of the
Funds or any other person.
6.4 Incapacity. If the Funds shall receive evidence satisfactory
to them that the Director or any Beneficiary entitled to receive any benefit
under the Agreement is, at the time when such benefit becomes payable, a minor,
or is physically or mentally incompetent to receive such benefit and to give a
valid release therefor, and that another person or an institution is then
maintaining or has custody of the Director or Beneficiary and that no guardian,
committee or other representative of the estate of the Director or Beneficiary
shall have been duly appointed, the Funds may make payment of such benefit
otherwise payable to the Director or Beneficiary to such other person or
institution, including a custodian under a Uniform Gifts to Minors Act, or
corresponding legislation (who shall be an adult, a guardian of the minor or a
trust company), and the release of such other person or institution shall be a
valid and complete discharge for the payment of such benefit.
6.5 Cooperation of Parties. All parties to this Agreement and any
person claiming any interest hereunder agree to perform any and all acts and
execute any and all documents and papers which are necessary or desirable for
carrying out this Agreement or any of its provisions.
6.6 Governing Law. This Agreement is made and entered into in the
State of Texas and all matters concerning its validity, construction and
administration shall be governed by the laws of the State of Texas.
6.7 Nonguarantee of Directorship. Nothing contained in this
Agreement shall be construed as a contract or guarantee of the right of the
Director to be, or remain as, a director of any of the Funds or to receive any,
or any particular rate of, Compensation from any of the Funds.
-8-
<PAGE> 11
6.8 Counsel. The Funds may consult with legal counsel with
respect to the meaning or construction of this Agreement, their obligations or
duties hereunder or with respect to any action or proceeding or any question of
law, and they shall be fully protected with respect to any action taken or
omitted by them in good faith pursuant to the advice of legal counsel.
6.9 Spendthrift Provision. The Director's and Beneficiaries'
interests in the Deferral Accounts may not be anticipated, sold, encumbered,
pledged, mortgaged, charged, transferred,
alienated, assigned nor become subject to execution, garnishment or
attachment and any attempt to do so by any person shall render the Deferral
Accounts immediately forfeitable.
6.10 Notices. For purposes of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally or mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, or by nationally recognized overnight delivery service providing for a
signed return receipt, addressed to the Director at the home address set forth
in the Funds' records and to the Funds at the address set forth on the first
page of this Agreement, provided that all notices to the Funds shall be
directed to the attention of the Presidents of the Funds or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
6.11 Entire Agreement. This Agreement contains the entire
understanding between the Funds and the Director with respect to the payment of
non-qualified elective deferred compensation by the Fund to the Director.
Effective as of the date hereof, this Agreement replaces, and supersedes, all
other non-qualified elective deferred compensation agreements by and between
the Director and the Funds.
6.12 Interpretation of Agreement. Interpretations of, and
determinations (including factual determinations) related to, this Agreement
made by the Funds in good faith, including any determinations of the amounts of
the Deferral Accounts, shall be conclusive and binding upon all parties; and
the Funds shall not incur any liability to the Director for any such
interpretation or determination so made or for any other action taken by it in
connection with this Agreement in good faith.
6.13 Successors and Assigns. This Agreement shall be binding upon,
and shall inure to the benefit of, the Funds and their successors and assigns
and to the Director and his heirs, executors, administrators and personal
representatives.
6.14 Severability. In the event any one or more provisions of this
Agreement are held to be invalid or unenforceable, such illegality or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof and such other provisions shall remain in full force and
effect unaffected by such invalidity or unenforceability.
-9-
<PAGE> 12
6.15 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.
-10-
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
The Funds
________________________ By:_________________________
Witness Name:
Title:
________________________ ____________________________
Witness Director
-11-
<PAGE> 14
APPENDIX A
----------
AIM ADVISOR FUNDS, INC.
AIM EQUITY FUNDS, INC.
AIM FUNDS GROUP
AIM INTERNATIONAL FUNDS, INC.
AIM INVESTMENT SECURITIES FUNDS
AIM SUMMIT FUND, INC.
AIM TAX-EXEMPT FUNDS, INC.
AIM VARIABLE INSURANCE FUNDS, INC.
SHORT-TERM INVESTMENTS CO.
SHORT-TERM INVESTMENTS TRUST
TAX-FREE INVESTMENTS CO.
<PAGE> 15
DEFERRED COMPENSATION AGREEMENT
DEFERRAL ELECTION FORM
-------------------------------
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation agreement (the
"Agreement") dated as of ________________ by and between the undersigned and
the AIM Funds, I hereby make the following elections:
Deferral of Compensation
------------------------
Starting with Compensation to be paid to me with respect to
services provided by me to the AIM Funds after the date this election Form is
received by the AIM Funds, I hereby elect that 50 percent (50%) of my
Compensation (as defined under the Agreement) be reduced and that the Fund
establish a bookkeeping account credited with amounts equal to the amount so
reduced (the "Deferral Account"). The Deferral Account shall be further
credited with income equivalents as provided under the Agreement. I understand
that this election will remain in effect with respect to Compensation I earn in
subsequent years unless I modify or revoke it. I further understand that such
modification or revocation will be effective only prospectively and will apply
commencing with the Compensation I earn in the calendar year that begins after
the change is received by you.
Payment Date
------------
I hereby designate ________ 1 (select the first month in any
calendar quarter) in the year ______ (select a year that is at least two years
after the year this election is made) as the Payment Date for the amounts
credited to my Deferral Account pursuant to the election made above. If my
Retirement (as defined in the Agreement) occurs sooner, I o do o do not (check
the appropriate box) want payment of such amounts to commence effective the
January 1 following my Retirement. I understand that amounts credited to my
Deferral Account may be paid to me prior to the Payment Date as provided in the
Agreement.
-5-
<PAGE> 16
Payment Method
--------------
I hereby elect to receive the amounts credited to my Deferral
Account in (check one)
o a single payment in cash
o quarterly installments for a period of ____ years (select no more
than 10 years)
o annual installments for a period of ____ (select no more than 10
years)
beginning within 30 days following the payment date selected above.
I understand that the amounts credited to my Deferral Account
shall remain the general assets of the AIM Funds and that, with respect to the
payment of such amounts, I am merely a general creditor of the AIM Funds. I
may not sell, encumber, pledge, assign or otherwise alienate the amounts
credited to my Deferral Account.
I hereby agree that the terms of the Agreement are
incorporated herein and are made a part hereof. Dated as of the day and year
first above written.
WITNESS: DIRECTOR:
_________________________ ______________________________
WITNESS: RECEIVED:
_________________________ AIM Funds
By:___________________________
Date:_________________________
-6-
<PAGE> 17
DEFERRED COMPENSATION AGREEMENT
BENEFICIARY DESIGNATION FORM
-------------------------------
TO: Presidents of the AIM Funds
FROM:
DATE:
With respect to the Deferred Compensation Agreement (the
"Agreement") dated as of _____________ by and between the undersigned and the
AIM Funds, I hereby make the following beneficiary designations:
I. Primary Beneficiary
-------------------
I hereby appoint the following as my Primary Beneficiary(ies)
to receive at my death the amounts credited to my Deferral Account under the
Agreement. In the event I am survived by more than one Primary Beneficiary,
such Primary Beneficiaries shall share equally in such amounts unless I
indicate otherwise on an attachment to this form:
_________________________________________________________________
Name Relationship
_________________________________________________________________
Address
_________________________________________________________________
City State Zip
-1-
<PAGE> 18
II. Secondary Beneficiary
---------------------
In the event I am not survived by any Primary Beneficiary, I
hereby appoint the following as Secondary Beneficiary(ies) to receive death
benefits under the Agreement. In the event I am survived by more than one
Secondary Beneficiary, such Secondary Beneficiaries shall share equally unless
I indicate otherwise on an attachment to this form:
_________________________________________________________________
Name Relationship
_________________________________________________________________
Address
_________________________________________________________________
City State Zip
I understand that I may revoke or amend the above designations
at any time. I further understand that if I am not survived by a Primary or
Secondary Beneficiary, my Beneficiary shall be as set forth under the
Agreement.
WITNESS: DIRECTOR:
_________________________ ______________________________
WITNESS: RECEIVED:
_________________________ AIM Funds
By:___________________________
Date:_________________________
-2-
<PAGE> 1
EXHIBIT 9(a)(3)
AMENDMENT NO. 1
TRANSFER AGENCY AND SERVICE AGREEMENT
The Transfer Agency and Service Agreement (the "Agreement"), dated
November 1, 1994, by and between AIM Funds Group, a Delaware business trust, and
A I M Fund Services, Inc., a Delaware corporation, is hereby amended as follows
(terms used herein but not otherwise defined herein have the meaning ascribed
them in the Agreement):
1) Section 1. of the Fee Schedule to the Agreement is hereby deleted in its
entirety and replaced with the following:
"1. For performance by the Transfer Agent pursuant to this
Agreement, the Fund agrees on behalf of each of the Portfolios
to pay the Transfer Agent an annualized fee for shareholder
accounts that are open during any monthly period as set forth
below, and an annualized fee of $.70 per shareholder account
that is closed during any monthly period. Both fees shall be
billed by the Transfer Agent monthly in arrears on a prorated
basis of 1/12 of the annualized fee for all such accounts.
Per Account Fee
Fund Type Annualized
--------- ----------
Class A Annual/Semi-Annual Dividends $15.15
Class A Quarterly & Monthly Dividend 17.15
Class A Daily Accrual 19.65
Class B 19.65
Class C 19.65
AIM Cash Reserve Shares 19.65 "
All other terms and provisions of the Agreement not amended herein
shall remain in full force and effect.
Dated: August 4, 1997
AIM FUNDS GROUP
Attest: /s/ Samuel D. Sirko By: /s/ Robert H. Graham
---------------------- ----------------------------
Assistant Secretary Robert H. Graham
President
(SEAL)
A I M FUND SERVICES, INC.
Attest: /s/ Ofelia M. Mayo By: /s/ John Caldwell
---------------------- ----------------------------
Assistant Secretary John Caldwell
President
(SEAL)
<PAGE> 1
EXHIBIT 9(b)(5)
EXHIBIT 1
LIST OF FUNDS
<TABLE>
<S> <C>
AIM ADVISOR FUNDS, INC.
Portfolios: Classes:
AIM Advisor Cash Management Fund Class A and Class C Shares
AIM Advisor Flex Fund Class A and Class C Shares
AIM Advisor Income Fund Class A and Class C Shares
AIM Advisor International Value Fund Class A and Class C Shares
AIM Advisor Large Cap Value Fund Class A and Class C Shares
AIM Advisor MultiFlex Fund Class A and Class C Shares
AIM Advisor Real Estate Fund Class A and Class C Shares
AIM EQUITY FUNDS, INC.
Portfolios: Classes:
AIM Blue Chip Fund Class A, Class B and Class C Shares
AIM Capital Development Fund Class A, Class B and Class C Shares
AIM Charter Fund Class A, Class B and Class C Shares
AIM Weingarten Fund Class A, Class B and Class C Shares
AIM Aggressive Growth Fund Class A Shares
AIM Constellation Fund Class A and Class C Shares
AIM FUNDS GROUP
Portfolios: Classes:
AIM Balanced Fund Class A, Class B and Class C Shares
AIM Global Utilities Fund Class A, Class B and Class C Shares
AIM Growth Fund Class A, Class B and Class C Shares
AIM High Yield Fund Class A, Class B and Class C Shares
AIM Income Fund Class A, Class B and Class C Shares
AIM Intermediate Government Fund Class A, Class B and Class C Shares
AIM Municipal Bond Fund Class A, Class B and Class C Shares
AIM Value Fund Class A, Class B and Class C Shares
AIM Money Market Fund Class A, Class B, Class C and AIM Cash
Reserve Shares
AIM INTERNATIONAL FUNDS, INC.
Portfolios: Classes:
AIM International Equity Fund Class A, Class B and Class C Shares
AIM Global Aggressive Growth Fund Class A, Class B and Class C Shares
AIM Global Growth Fund Class A, Class B and Class C Shares
AIM Global Income Fund Class A, Class B and Class C Shares
AIM Asian Growth Fund Class A, Class B and Class C Shares
AIM European Development Fund Class A, Class B and Class C Shares
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
AIM INVESTMENT SECURITIES FUNDS
Portfolios: Classes:
Limited Maturity Treasury Portfolio AIM Limited Maturity Treasury Shares
AIM TAX-EXEMPT FUNDS, INC.
Portfolios: Classes:
AIM Tax-Exempt Cash Fund Class A Shares
AIM Tax-Exempt Bond Fund
Of Connecticut Class A Shares
Intermediate Portfolio AIM Tax-Free Intermediate Shares - Class A
</TABLE>
On behalf of the Funds and respective Portfolios and Classes as set forth in
this Exhibit 1, which may be amended from time to time.
By: /s/ ROBERT H. GRAHAM
------------------------------
Title: President
FIRST DATA INVESTOR SERVICES GROUP, INC.
By: /s/ LEONARD A. WEISS
------------------------------
Title: EVP and CFO
Effective as of August 4, 1997.
<PAGE> 1
9(b)(6)
EXHIBIT 2
PREFERRED REGISTRATION
TECHNOLOGY ESCROW AGREEMENT
Account Number 0609111-00002-0109001
Recitals
This Preferred Registration Technology Escrow Agreement including any
Exhibits ("Agreement") is effective this 10th day of September 1997, by and
among Data Securities International, Inc. ("DSI"), a Delaware corporation, First
Data Investor Services Group, Inc. ("Depositor"), and each registered investment
company listed on the attached Schedule A hereof ("Preferred Registrant").
WHEREAS, Depositor has entered into a certain Remote Access and
Related Services Agreement dated December 23, 1994, as amended by Amendment
Number 3 dated as of February 1, 1997 (the "Remote Agreement") with the
Preferred Registrant which pursuant thereto certain proprietary software, as
described in Section 12(i) of the Remote Agreement, in object-code form and
other materials of Depositor have been licensed to Preferred Registrant (the
"Software");
WHEREAS, Depositor and Preferred Registrant desire the Agreement to be
supplementary to said contract pursuant to 11 United States Code Section
365(n);
WHEREAS, availability of or access to the source code and other
proprietary data related to the Software is critical to Preferred Registrant in
the conduct of its business;
WHEREAS, Depositor has deposited or will deposit with DSI such source
code and other proprietary data to provide for retention, administration and
controlled access for Preferred Registration under conditions specified herein;
NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in consideration of the promises, mutual
covenants and conditions contained herein, the parties hereto agree as follows:
1. Deposit Account. Following the delivery of the executed Agreement, DSI
shall open a deposit account ("Deposit Account") for Depositor. The
opening of the Deposit Account means that DSI shall establish an account
ledger in the name of Depositor, assign a deposit account number
("Deposit Account Number"), calendar renewal notices to be sent to
Depositor as provided in Section 30, and request the initial deposit
("Initial Deposit") from Depositor. Depositor has an obligation to make
the Initial Deposit. In the event that Depositor has not made the
Initial Deposit within sixty (60) days of the execution of this
1
<PAGE> 2
Agreement, DSI shall request the initial Deposit from Depositor and
notify Preferred Registrant that such Initial Deposit has not been
received.
2. Preferred Registration Account. Following the execution and delivery of
the Agreement, DSI shall open a registration account ("Registration
Account") for Preferred Registrant. The opening of the Registration
Account means that DSI shall establish under the Deposit Account an
account ledger with a unique registration number ("Registration Number")
in the name of Preferred Registrant, calendar renewal notices to be sent
to Preferred Registrant as provided in Section 30, and request the
Initial Deposit from Depositor. DSI shall notify Preferred Registrant
upon receipt of Initial Deposit.
3. Term of Agreement. The Agreement will commence on the effective date
and continue through January 31, 2000, unless terminated earlier as
provided in the Agreement. The Agreement may be extended for one (1)
year terms.
4. Exhibit A, Notices and Communications. Notices and invoices to
Depositor, Preferred Registrant or DSI should be sent to the parties at
the addresses identified in the Exhibit A.
Documents, payment of fees, deposits of material, and any written
communication should be sent to the DSI offices as identified in the
Exhibit A.
Depositor and Preferred Registrant agree to each name their respective
designated contact ("Designated Contact") to receive notices from DSI
and to act on their behalf in the performance of their obligations as
set forth in the Agreement. Depositor and Preferred Registrant agree to
notify DSI immediately in the event of a change of their Designated
Contact in the manner stipulated in Exhibit A.
5. Exhibit B and Deposit Material. Depositor will submit proprietary data
and related material ("Deposit Material") to DSI for retention and
administration in the Deposit Account.
The Deposit Material will be submitted together with a completed
document called a "Description of Deposit Material", hereinafter
referred to as Exhibit B. Each Exhibit B should be signed by Depositor
prior to submission to DSI and will be signed by DSI upon completion of
the Deposit Material inspection.
Depositor represents and warrants that it lawfully possesses all Deposit
Material, can transfer Deposit Material to DSI and has the authority to
store Deposit Material in accordance with the terms of the Agreement.
2
<PAGE> 3
6. Deposit Material Inspection. Upon receipt of an Exhibit B and Deposit
Material, DSI will be responsible only for reasonably matching the
labeling of the materials to the item descriptions listed on the Exhibit
B and validating the count of the materials to the quantity listed on
the Exhibit B. DSI will not be responsible for any other claims made by
the Depositor on the Exhibit B. Acceptance will occur when DSI concludes
that the Deposit Material Inspection is complete. Upon acceptance DSI
will sign the Exhibit B and assign it the next Exhibit B number. DSI
shall issue a copy of the Exhibit B to Depositor and Preferred
Registrant within ten (10) days of acceptance.
7. Initial Deposit. The Initial Deposit will consist of all material
initially supplied by Depositor to DSI.
8. Deposit Changes. Depositor may desire or may be obligated to update the
Deposit Account with supplemental or replacement Deposit Material of
technology releases.
Supplemental Deposit ("Supplemental") is Deposit Material which is to be
added to the Deposit Account.
Replacement Deposit ("Replacement") is Deposit Material which will
replace existing Deposit Material as identified by any one or more
Exhibit B(s) in the Deposit Account. Replaced Deposit Material will be
destroyed or returned to Depositor.
9. Deposit. The existing deposit ("Deposit") means all Exhibit B(s) and
their associated Deposit Material currently in DSI's possession.
Destroyed or returned Deposit Material is not part of the Deposit;
however, DSI shall keep records of the destruction or return of Deposit
Material.
10. Replacement Option. Within ten (10) days of receipt of Replacement from
Depositor, DSI will send a letter to Preferred Registrant stating that
Depositor requests to replace existing Deposit Material, and DSI will
include a copy of the new Exhibit B(s) listing the new Deposit Material.
Preferred Registrant has twenty (20) days from the mailing of such
letter by DSI to instruct DSI to retain the existing Deposit Material
held by DSI, and if so instructed, DSI will change the Replacement to a
Supplemental. Conversion to Supplemental may cause an additional
storage unit fee as specified by DSI's Fee and Services Schedule.
If Preferred Registrant does not instruct DSI to retain the existing
Deposit Material, DSI shall permit such Deposit Material to be replaced
with the Replacement. Within ten (10) days of acceptance of the
Replacement by DSI, DSI shall issue a copy of the executed Exhibit B(s)
to Depositor and Preferred Registrant. DSI will either destroy or
return to Depositor all Deposit Material replaced by the Replacement.
3
<PAGE> 4
11. Storage Unit. DSI will store the Deposit in defined units of space,
called storage units. The cost of the first storage unit will be
included in the annual Deposit Account fee.
12. Deposit Obligations of Confidentiality. DSI agrees to establish a
locked receptacle in which it shall place the Deposit and shall put the
receptacle under the administration of one or more of its officers,
selected by DSI, whose identity shall be available to Depositor at all
times. DSI shall exercise a professional level of care in carrying out
the terms of the Agreement.
DSI acknowledges Depositor's assertion that the Deposit shall contain
proprietary data and that DSI has an obligation to preserve and
protect the confidentiality of the Deposit.
Except as provided for in the Agreement, DSI agrees that it shall not
divulge, disclose, make available to third parties, or make any use
whatsoever of the Deposit.
13. Audit Rights. DSI agrees to keep records of the activities undertaken
and materials prepared pursuant to the Agreement. DSI may issue to
Depositor and Preferred Registrant an annual report profiling the
Deposit Account. Such annual report will identify the Depositor,
Preferred Registrant, the current Designated Contacts, selected
special services, and the Exhibit B history, which includes Deposit
Material acceptance and destruction or return dates.
Upon reasonable notice, during normal business hours and during the
term of the Agreement, Depositor or Preferred Registrant will be
entitled to inspect the records of DSI pertaining to the Agreement,
and accompanied by an employee of DSI, inspect the physical status and
condition of the Deposit. The Deposit may not be changed during the
audit.
14. Renewal Period of Agreement. Upon payment of the initial fee or
renewal fee, the Agreement will be in full force and will have an
initial period of at least one (1) year unless otherwise specified.
The Agreement may be renewed for additional periods upon receipt by
DSI of the specified renewal fees prior to the last day of the period
("Expiration Date"). DSI may extend the period of the Agreement to
cover the processing of any outstanding instruction made during any
period of the Agreement.
Preferred Registrant has the right to pay renewal fees and other
related fees. In the event Preferred Registrant pays the renewal fees
and Depositor is of the opinion that any necessary condition for
renewal is not met, Depositor may so notify DSI and Preferred
Registrant in writing. The resulting dispute will be resolved
pursuant to the dispute resolution process defined in Section 25.
4
<PAGE> 5
15. Expiration. If the Agreement is not renewed, or is otherwise
terminated, all duties and obligations of DSI to Depositor and
Preferred Registrant will terminate. If Depositor requests the return
of the Deposit, DSI shall return the Deposit to Depositor only after
any outstanding invoices and the Deposit return fee are paid. If the
fees are not received by the Expiration Date of the Agreement, DSI, at
its option, may destroy the Deposit.
16. Certification by Depositor. Depositor represents to Preferred
Registrant that:
a. The Deposit delivered to DSI consists of the following: source
code deposited on computer magnetic media; all necessary and
available information, proprietary information, and technical
documentation which will enable a reasonably skilled
programmer of Preferred Registrant to create, maintain and/or
enhance the Software without the aid of Depositor or any other
person or reference to any other materials; maintenance tools
(test programs and program specifications); proprietary or
third party system utilities (compiler and assembler
descriptions); description of the system/program generation;
descriptions and locations of programs not owned by Depositor
but required for use and/or support; and names of key
developers for the technology on Depositor's staff.
b. The Deposit will be defined in the Exhibit B(s).
These representations shall be deemed to be made continuously
throughout the term of the Agreement.
17. Indemnification. Depositor and Preferred Registrant agree to defend
and indemnify DSI and hold DSI harmless from and against any and all
claims, actions and suits, whether in contract or in tort, and from
and against any and all liabilities, losses, damages, costs, charges,
penalties, counsel fees, and other expenses of any nature (including,
without limitation, settlement costs) incurred by DSI as a result of
performance of the Agreement except in the event of a judgment which
specifies that DSI acted with gross negligence or willful misconduct.
18. Filing for Release of Deposit by Preferred Registrant. Upon notice to
DSI by Preferred Registrant of the occurrence of a release condition
as defined in Section 21 and payment of the release request fee, DSI
shall notify Depositor by certified mail or commercial express mail
service with a copy of the notice from Preferred Registrant. If
Depositor provides contrary instruction within ten (1O) days of the
mailing of the notice to Depositor, DSI shall not deliver a copy of
the Deposit to Preferred Registrant.
19. Contrary Instruction. "Contrary Instruction" is the filing of an
instruction with DSI by Depositor stating that a Contrary Instruction
is in effect. Such Contrary Instruction
5
<PAGE> 6
means an officer of Depositor warrants that a release condition has not
occurred or has been cured. DSI shall send a copy of the instruction by
certified mail or commercial express mail service to Preferred
Registrant. DSI shall notify both Depositor and Preferred Registrant
that there is a dispute to be resolved pursuant to Section 25. Upon
receipt of Contrary Instruction, DSI shall continue to store the
Deposit pending Depositor and Preferred Registrant joint instruction,
resolution pursuant to Section 25, order by a court of competent
jurisdiction, or termination by non-renewal of the Agreement.
20. Release of Deposit to Preferred Registrant. Pursuant to Section 18, if
DSI does not receive Contrary Instruction from Depositor, DSI is
authorized to release the Deposit, or if more than one Preferred
Registrant is registered to the Deposit, a copy of the Deposit, to the
Preferred Registrant filing for release following receipt of any fees
due to DSI including Deposit copying and delivery fees.
21. Release Conditions of Deposit to Preferred Registrant.
Release conditions are:
a. Depositor ceases to do business, makes an assignment for the
benefit of creditors, becomes insolvent (as revealed by its
books and records or otherwise), is generally unable to pay
its debts as such debts become due, or commences, or has
commenced against it a case under any chapter of state or
federal bankruptcy laws; and Depositor fails to cure any such
event within 60 days after receiving notice from Preferred
Registrant; and
b. Preferred Registrant has paid all amounts due Depositor under
the Remote Agreement.
22. Grant of Use License. Subject to the terms and conditions of the
Agreement, Depositor hereby transfers and upon execution by DSI, DSI
hereby accepts a non-exclusive, nontransferable, royalty-free license
("Use License") for the unexpired term of the Remote Agreement subject
to Section 15 thereof which DSI will transfer to Preferred Registrant
upon controlled release of the Deposit as described in the Agreement.
The Use License will be solely for Preferred Registrant's internal
purposes in connection with support, maintenance, and operation of the
Software solely as set forth in the Remote Agreement and not for any
other purpose or person.
23. Use License Representation. Depositor represents and warrants to
Preferred Registrant and DSI that it has no knowledge of any
incumbrance or infringement of the Deposit, or that any claim has been
made that the Deposit infringes any patent, trade secret, copyright or
other proprietary right of any third party. Depositor warrants that it
has
6
<PAGE> 7
the full right, power, and ability to enter into and perform the
Agreement, to grant the foregoing Use License, and to permit the
Deposit to be placed with DSI.
24. Conditions Following Release. Following a release and subject to
payment to DSI of all outstanding fees, DSI shall transfer the Use
License to Preferred Registrant. Additionally Preferred Registrant
shall be required to maintain the confidentiality of the released
Deposit.
25. Disputes. In the event of a dispute, DSI shall so notify Depositor and
Preferred Registrant in writing. Upon agreement of the parties at the
time of a dispute, such dispute will be settled by arbitration in
accordance with the commercial rules of the American Arbitration
Association ("AAA"). Unless otherwise agreed to by Depositor and
Preferred Registrant, arbitration will take place in San Diego,
California, USA.
26. Verification Rights. Depositor grants to Preferred Registrant the
option to verify the Deposit for accuracy, completeness and
sufficiency. Depositor agrees to permit DSI and at least one employee
of Preferred Registrant to be present at Depositor's facility to
verify, audit and inspect of the Deposit for the benefit of Preferred
Registrant. If DSI is present or is selected to perform the
verification, DSI will be paid according to DSI's then current
verification service hourly rates and any out of pocket expenses.
27. General. DSI may act in reliance upon any instruction, instrument, or
signature believed to be genuine and may assume that any employee
giving any written notice, request, advice or instruction in
connection with or relating to the Agreement has apparent authority
and has been duly authorized to do so. DSI may provide copies of the
Agreement or account history information to any employee of Depositor
or Preferred Registrant upon their request. For purposes of
termination or replacement, Deposit Material shall be returned only to
Depositor's Designated Contact, unless otherwise instructed by
Depositor's Designated Contact.
DSI is not responsible for failure to fulfill its obligations under the
Agreement due to causes beyond DSI's control.
The Agreement is to be governed by and construed in accordance with
the laws of the State of California.
The Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof, and supersedes all previous
communications, representations, understandings, and agreements,
either oral or written, between the parties. The Agreement may be
amended only in a writing signed by the parties.
7
<PAGE> 8
If any provision of the Agreement is held by any court to be invalid
or unenforceable, that provision will be severed from the Agreement
and any remaining provisions will continue in full force.
28. Title to Media. Subject to the terms of the Agreement, title to the
media, upon which the proprietary data is written or stored, is and
shall be irrevocably vested in DSI. Notwithstanding the foregoing,
Depositor will retain ownership of the proprietary data contained on
the media including all copyright, trade secret, patent or other
intellectual property ownership rights subsisting in such proprietary
data.
29. Termination of Rights. The Use License as described above will
terminate in the event that the Agreement is terminated without the
Use License transferring to Preferred Registrant.
30. Fees. Fees are due upon receipt of signed contract, receipt of Deposit
Material, or when service is requested, whichever is earliest. If
invoiced fees are not paid within sixty (60) days of the date of the
invoice, DSI may terminate the Agreement. If the payment is not timely
received by DSI, DSI shall have the right to accrue and collect
interest at the rate of one and one-half percent per month (18% per
annum) from the date of the invoice for all late payments.
Renewal fees will be due in full upon the receipt of invoice unless
otherwise specified by the invoice. In the event that renewal fees are
not received thirty (30) days prior to the Expiration Date, DSI shall
so notify Depositor and Preferred Registrant. If the renewal fees are
not received by the Expiration Date, DSI may terminate the Agreement
without further notice and without liability of DSI to Depositor or
Preferred Registrant.
DSI shall not be required to process any request for service unless
the payment for such request shall be made or provided for in a manner
satisfactory to DSI.
All service fees and renewal fees will be those specified in DSI's Fee
and Services Schedule in effect at the time of renewal or request for
service, except as otherwise agreed. For any increase in DSI's
standard fees, DSI shall notify Depositor and Preferred Registrant at
least ninety (90) days prior to the renewal of the Agreement.
8
<PAGE> 9
For any service not listed on the Fee and Services Schedule, DSI shall
provide a quote prior to rendering such service.
Fees invoiced by DSI are the responsibility of the Preferred
Registrant and as such all invoices in accordance with this Agreement
are to be sent to the Preferred Registrant.
On behalf of the Investment Companies
and respective Portfolios and Classes
set forth in Schedule A attached
hereto as may be amended from
time to time.
<TABLE>
<S> <C>
By: /s/ ROBERT H. GRAHAM FIRST DATA INVESTOR SERVICES
--------------------------------- GROUP, INC.
Name: Robert H. Graham
------------------------------- By: /s/ ILLEGIBLE
Title: President ---------------------------------
------------------------------ Name: ILLEGIBLE
-------------------------------
Title: Executive Vice President
------------------------------
DATA SECURITIES
INTERNATIONAL, INC.
By: /s/ CHRISTIE WOODWARD
---------------------------------
Name: Christie Woodward
-------------------------------
Title: Contract Administrator
------------------------------
</TABLE>
<PAGE> 10
SCHEDULE A
LIST OF FUNDS
AIM ADVISOR FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Advisor Cash Management Fund Class A and Class C Shares
AIM Advisor Flex Fund Class A and Class C Shares
AIM Advisor Income Fund Class A and Class C Shares
AIM Advisor International Value Fund Class A and Class C Shares
AIM Advisor Large Cap Value Fund Class A and Class C Shares
AIM Advisor MultiFlex Fund Class A and Class C Shares
AIM Advisor Real Estate Fund Class A and Class C Shares
</TABLE>
AIM EQUITY FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Blue Chip Fund Class A, B and Class C Shares
AIM Capital Development Fund Class A, B and Class C Shares
AIM Charter Fund Class A, B and Class C Shares
AIM Weingarten Fund Class A, B and Class C Shares
AIM Aggressive Growth Fund Class A Shares
AIM Constellation Fund Class A Shares and Class C Shares
</TABLE>
AIM FUNDS GROUP
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Balanced Fund Class A, Class B and Class C Shares
AIM Global Utilities Fund Class A, Class B and Class C Shares
AIM Growth Fund Class A, Class B and Class C Shares
AIM High Yield Fund Class A, Class B and Class C Shares
AIM Income Fund Class A, Class B and Class C Shares
AIM Intermediate Government Fund Class A, Class B and Class C Shares
AIM Municipal Bond Fund Class A, Class B and Class C Shares
AIM Value Fund Class A, Class B and Class C Shares
AIM Money Market Fund Class A, Class B, Class C and AIM Cash Reserve Shares
</TABLE>
AIM INTERNATIONAL FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM International Equity Fund Class A, Class B and Class C Shares
AIM Global Aggressive Growth Fund Class A, Class B and Class C Shares
AIM Global Growth Fund Class A, Class B and Class C Shares
AIM Global Income Fund Class A, Class B and Class C Shares
AIM Asian Growth Fund Class A, Class B and Class C Shares
AIM European Development Fund Class A, Class B and Class C Shares
</TABLE>
<PAGE> 11
AIM INVESTMENT SECURITIES FUNDS
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
Limited Maturity Treasury Portfolio AIM Limited Maturity Treasury Shares
</TABLE>
AIM TAX-EXEMPT FUNDS, INC.
<TABLE>
<CAPTION>
Portfolios: Classes:
<S> <C>
AIM Tax-Exempt Cash Fund Class A
AIM Tax-Exempt Bond Fund of Connecticut Class A
Intermediate Portfolio AIM Tax-Free Intermediate Shares - Class A
</TABLE>
<PAGE> 12
EXHIBIT A
DESIGNATED CONTACT
Account Number: 0609111-00002-01090011
<TABLE>
<S> <C>
NOTICES, DEPOSIT MATERIAL RETURNS AND INVOICES TO DEPOSITOR SHOULD BE ADDRESSED TO:
COMMUNICATION, INCLUDING DELINQUENCIES TO First Data Investor Services Group, Inc.
DEPOSITOR SHOULD BE ADDRESSED TO: ------------------------------------------------
4400 Computer Drive
First Data Investor Services Group, Inc. ------------------------------------------------
- ---------------------------------------- Westboro, MA 01581
4400 Computer Drive ------------------------------------------------
- ----------------------------------------
Westboro, MA 01581 ------------------------------------------------
- ----------------------------------------
Invoice Contact: Brendan Bowen
- ---------------------------------------- --------------------------------
Designated Contact: John Corey
---------------------
Telephone: (508) 871-9601
------------------------------
Facsimile:
------------------------------
State of Incorporation: Massachusetts
-----------------
NOTICES AND COMMUNICATION, INCLUDING INVOICES TO PREFERRED REGISTRANT SHOULD BE
DELINQUENCIES TO PREFERRED REGISTRANT ADDRESSED TO:
SHOULD BE ADDRESSED TO: A I M Fund Service, Inc.
-----------------------------------------------
A I M Fund Service, Inc. Eleven Greenway Plaza
Eleven Greenway Plaza -----------------------------------------------
Houston, TX 77046 Houston, TX 77046
-----------------------------------------------
-----------------------------------------------
Designated Contact: Jack Caldwell Invoice Contact: Jack Caldwell
--------------------- -------------------------------
Telephone: (713) 214-1633
------------------------------
Facsimile:
------------------------------
Requests from Depositor or Preferred Registrant INVOICE INQUIRIES AND FEE REMITTANCES TO DSI
Contact should be given Contact or authorized SHOULD BE ADDRESSED TO:
employee Registrant.
DSI
CONTRACTS, DEPOSIT MATERIAL AND NOTICES TO DSI Attn: Accounts Receivable
SHOULD BE ADDRESSED TO:
DSI
Attn: Contract Administration
Telephone:
-------------------------------------
Facsimile:
-------------------------------------
Telephone:
------------------------------
Facsimile:
------------------------------
Date:
-----------------------------------
</TABLE>
<PAGE> 13
]EXHIBIT B
DESCRIPTION OF DEPOSIT MATERIAL
<TABLE>
<S> <C> <C> <C>
Deposit Account Number: 0609111-00002
------------------------------------------------------------------
Depositor Company Name: First Data Investor Services Group
------------------------------------------------------------------
DEPOSIT TYPE:
X Initial Supplemental Replacement
- ------ ------ ------
If Replacement: Destroy Deposit Return Deposit
------ ------
ENVIRONMENT:
Host System CPU/OS: MS Windows 3.11 or MS/Windows 95 OS on Intel x 86 processor based PC
----------------------------------------------------------------------
Version:
---------------------------------------------------------------------------------
Backup:
----------------------------------------------------------------------------------
Source System CPU/OS: MS Windows 3.11 OS on Intel Pentium 133 MHz PC
--------------------------------------------------------------------
Version:
---------------------------------------------------------------------------------
Compiler: Impress Imaging - Plexus AD v4.1, Informix ESQL v2.2, MS Visual C++ v4.1
--------------------------------------------------------------------------------
Impress Clearinghouse & Toolbar - MS Visual C++ v4.1
--------------------------------------------------------------------------------
ACE Plus - MS Visual Basic 4.0, MS Access v2.0
--------------------------------------------------------------------------------
Special Instructions:
--------------------------------------------------------------------
</TABLE>
DEPOSIT MATERIAL:
Exhibit B Name: Impress Imaging System Version: v5.2.06.01
------------------------- -----------------------------
Impress Clearinghouse Version: v5.2.02.01
------------------------- -----------------------------
Impress Toolbar Version: v5.2.01.01
------------------------- -----------------------------
ACE Plus Version: v2.05.07
------------------------- -----------------------------
<TABLE>
<CAPTION>
Item Label Description Media Quantity
<S> <C> <C>
AIM Funds Source, CD 1
August 8, 1997
</TABLE>
<TABLE>
<S> <C>
For Depositor, I certify that the above For DSI, I received the above described
described Deposit Material was sent to DSI: Deposit Material subject to the terms on
the reverse side of this Exhibit:
By: ILLEGIBLE By: /s/ CHRISTIE WOODWARD
--------------------------------------- ---------------------------------------
Print Name: ILLEGIBLE Print Name: Christie Woodward
------------------------------- -------------------------------
Date: 9/3/97 Date of Acceptance: 9-10-97
------------------------------------- -----------------------
ISE: EXHIBIT B#:
--------- ---------------
</TABLE>
<PAGE> 14
EXHIBIT B
DESCRIPTION OF DEPOSIT MATERIAL
Deposit Account Number: 0609111-00002
--------------------------------------------------------
Depositor Company Name: First Data Investor Services Group
--------------------------------------------------------
DEPOSIT TYPE:
X Initial Supplemental Replacement
- ------ ------ ------
If Replacement: Destroy Deposit Return Deposit
------ ------
ENVIRONMENT:
Host System CPU/OS: 3090/MVS
------------------------------------------------------------
Version:
-----------------------------------------------------------------------
Backup:
------------------------------------------------------------------------
Source System CPU/OS: 3090/MVS
----------------------------------------------------------
Version:
-----------------------------------------------------------------------
Compiler: Standard IBM Compiler
----------------------------------------------------------------------
Special Instructions:
----------------------------------------------------------
DEPOSIT MATERIAL:
Exhibit B Name: FSR Source Code - 931761 Version:
------------------------- -----------------------------
FSR JCL - 931384
------------------------- -----------------------------
<TABLE>
<CAPTION>
Item Label Description Media Quantity
<S> <C> <C>
DSN=P03AIM.PRIV.VENDOR.SEA.CSSP Data Tape 1
ROD. PANLIB VOLSER=932154
DSN=P03AIM.PRIV.VENDOR.SEQ.ESC Data Tape 1
ROW.TAPE VOLSER=932155
</TABLE>
<TABLE>
<S> <C>
For Depositor, I certify that the above For DSI, I received the above described
described Deposit Material was sent to DSI: Deposit Material subject to the terms on
the reverse side of this Exhibit:
By: ILLEGIBLE By: /s/ CHRISTIE WOODWARD
--------------------------------------- ---------------------------------------
Print Name: ILLEGIBLE Print Name: Christie Woodward
------------------------------- -------------------------------
Date: 9/3/97 Date of Acceptance: 9-10-97
------------------------------------- -----------------------
ISE: EXHIBIT B#:
--------- ---------------
</TABLE>
<PAGE> 1
EXHIBIT 11(a)
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees and Shareholders of
AIM Funds Group:
We consent to the use of our reports on the 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 Growth
Fund and AIM Value Fund (portfolios of AIM Funds Group) dated February 6, 1998
included herein and to the references to our firm under the headings "Financial
Highlights" in the Prospectus and "Audit Reports" in the Statement of
Additional Information.
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
Houston, Texas
February 20, 1998
<PAGE> 1
EXHIBIT 11(b)
[PRICE WATERHOUSE LOGO APPEARS HERE]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of Post-Effective Amendment No. 74 to the registration
statement of AIM Funds Group on Form N-1A (the"Registration Statement") of our
report dated February 16, 1993, relating to the selected per share data and
ratios appearing in the December 31, 1992 Annual Report to Shareholders of AIM
Global Utilities Fund, AIM Growth Fund, AIM High Yield Fund, AIM Income Fund,
AIM Intermediate Government Fund, AIM Municipal Bond Fund, and AIM Value Fund
constituting parts of the AIM Funds Group (formerly AIM Funds (C)). We also
consent to the reference to us under the heading "Financial Highlights" in the
Prospectus and under the heading "Audit Reports" in the Statement of Additional
Information.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Houston, Texas
February 26, 1998
<PAGE> 1
EXHIBIT 11(c)
CONSENT OF COUNSEL
AIM FUNDS GROUP
---------------
We hereby consent to the use of our name and to the reference to our firm
under the caption "General Information - Legal Counsel" in the Prospectus for
AIM Funds Group (the "Fund") and under the caption "Miscellaneous Information -
Legal Matters" in the Statement of Additional Information for the Fund, which
are included in Post-Effective Amendment No. 74 to the Registration Statement
under the Securities Act of 1933 (No. 2-27334) and Amendment No. 74 to the
Registration Statement under the Investment Company Act of 1940 (No. 811-1540)
on Form N-1A of the Fund.
/s/ Ballard Spahr Andrews & Ingersoll, LLP
------------------------------------------
Ballard Spahr Andrews & Ingersoll, LLP
Philadelphia, Pennsylvania
February 20, 1998
<PAGE> 1
EXHIBIT 14(a)(1)
[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> 2
- --------------------------------------------------------------------------------
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> 3
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> 4
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> 5
- --------------------------------------------------------------------------------
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> 6
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> 7
[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> 8
- --------------------------------------------------------------------------------
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> 9
[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> 10
- --------------------------------------------------------------------------------
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> 11
[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> 12
- --------------------------------------------------------------------------------
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> 13
[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> 14
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.
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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
<PAGE> 1
EXHIBIT 14(b)(1)
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> 2
- --------------------------------------------------------------------------------
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> 3
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> 4
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> 5
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> 6
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
20
<PAGE> 7
[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> 8
"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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<PAGE> 11
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
25
<PAGE> 12
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> 13
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> 14
- --------------------------------------------------------------------------------
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> 15
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> 16
30
<PAGE> 17
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> 18
32
<PAGE> 19
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> 20
- --------------------------------------------------------------------------------
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> 21
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> 22
<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> 1
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> 2
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> 3
- -------------------------------------------------------------------------------
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> 4
[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> 5
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> 6
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> 7
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> 8
ADOPTING THE AIM PROFIT SHARING PLAN
ADOPTION AGREEMENT #001
4
<PAGE> 9
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> 10
- - 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> 11
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> 12
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> 13
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> 14
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> 15
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> 16
- --------------------------
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> 17
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> 18
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> 19
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> 20
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> 21
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> 22
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> 23
ADOPTING THE AIM MONEY PURCHASE PENSION PLAN
ADOPTION AGREEMENT #002
19
<PAGE> 24
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> 25
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> 26
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> 27
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> 28
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> 29
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> 30
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> 31
- ------------------------------
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> 32
- ------------------------
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> 33
- ------------------------------
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> 34
-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> 35
[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> 36
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> 37
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> 38
MONEY PURCHASE PENSION AND PROFIT SHARING
PLAN BASIC DOCUMENT
34
<PAGE> 39
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> 40
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> 41
MONEY PURCHASE PENSION AND
PROFIT SHARING PLAN
PLAN DOCUMENT
37
<PAGE> 42
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> 43
<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> 44
<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> 45
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> 46
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> 47
(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.
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<PAGE> 48
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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<PAGE> 49
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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<PAGE> 50
(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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<PAGE> 51
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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<PAGE> 52
(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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<PAGE> 53
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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<PAGE> 54
(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
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<PAGE> 74
<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> 75
<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> 76
TRUST AGREEMENT
70
<PAGE> 77
PROTOTYPE DEFINED CONTRIBUTION TRUST
71
<PAGE> 78
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> 80
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
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<PAGE> 81
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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<PAGE> 82
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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<PAGE> 83
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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<PAGE> 84
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> 85
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> 86
-------------------------------------
)
) 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:
--------------------
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<PAGE> 87
EMPLOYEE NOTICES
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<PAGE> 88
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
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<PAGE> 89
MODEL
SUMMARY PLAN DESCRIPTION
OF THE
-------------------------------
[INSERT NAME OF EMPLOYER)
PROFIT SHARING PLAN
Copyright 1990 Investment Company Institute March 1990
83
<PAGE> 90
<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>
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<PAGE> 91
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,
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<PAGE> 92
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> 93
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> 94
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> 95
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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<PAGE> 96
__ * 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> 97
__ * 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> 98
(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> 99
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> 100
* 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> 101
MODEL
SUMMARY PLAN DESCRIPTION
OF THE
--------------------------------
[INSERT NAME OF EXPLOYER1
MONEY PURCHASE PENSION PLAN
Copyright 1990 Investment Company Institute March 1990
95
<PAGE> 102
<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>
96
<PAGE> 103
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> 104
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> 105
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> 106
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:
100
<PAGE> 107
[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:
101
<PAGE> 108
(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> 109
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> 110
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> 111
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> 112
______________________________________
(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> 113
FORMS
107
<PAGE> 114
[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> 115
PROFIT SHARING AND/OR MONEY PURCHASE PENSION PLAN
CONTRIBUTION TRANSMITTAL FORM
All contributions must be allocated in dollars to the fund(s) selected as
investment options of the plan. For plans using individual mutual fund accounts
for each participant, you must allocate each participant's contribution to their
selected AIM Fund(s). The minimum investment in $25 per fund per contribution
submission for each participant.
Plan Name:
----------------------------------------------------------------------
Tax ID#:
------------------------------------------------------------------------
Contribution for Plan Year:
-----------------------
<TABLE>
<CAPTION>
================================================================================
NAME SS# AIM AIM AIM TOTAL
____ FUND ____ FUND ____ FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ $ $ $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total $ $ $ $
================================================================================
</TABLE>
1
<PAGE> 1
EXHIBIT 14(d)(1)
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> 2
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> 3
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> 4
[ ] 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> 5
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> 6
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> 7
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> 8
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> 9
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> 10
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> 11
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> 12
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> 13
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> 14
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> 15
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> 16
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> 1
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> 2
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> 3
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> 4
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> 5
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> 6
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> 7
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
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> 9
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.
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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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<PAGE> 13
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).
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<PAGE> 14
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> 15
<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> 16
[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.
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<PAGE> 17
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> 18
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.
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<PAGE> 19
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> 20
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> 21
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.
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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.
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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
30
<PAGE> 30
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
<PAGE> 31
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).
32
<PAGE> 1
EXHIBIT 14(f)
[AIM LOGO APPEARS HERE]
ROTH IRA APPLICATION
TO OPEN YOUR AIM ROTH IRA ACCOUNT.
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 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 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)
- --------------------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
Fund Amount of Investment Class of Shares (check one)
<S> <C> <C> <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 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
</TABLE>
9
<PAGE> 2
<TABLE>
<S> <C> <C> <C> <C>
/ / 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 $________________
</TABLE>
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:
<TABLE>
<S> <C> <C>
$ _________________ into the ______________________________ Fund, Account # ____________________________
($50 minimum)
$__________________ into the ______________________________ Fund, Account # ____________________________
($50 minimum)
$__________________ into the ______________________________ Fund, Account # ____________________________
($50 minimum)
</TABLE>
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-:
<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
10
<PAGE> 3
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 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
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.
11
<PAGE> 4
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:
<TABLE>
<CAPTION>
REGULAR MAIL OR OVERNIGHT DELIVERIES ONLY
<S> <C>
AIM Fund Services, Inc. AIM Fund Services, Inc.
P.O. Box 4739 11 Greenway Plaza, Suite 763
Houston, TX 77210-4739 Houston, TX 77046
</TABLE>
12
<PAGE> 5
[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.
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
<TABLE>
<S> <C> <C>
Please deposit proceeds in my / / New AIM Roth IRA* / / Existing AIM Roth IRA Account Number __________________
</TABLE>
INVESTMENT ALLOCATION:
<TABLE>
<S> <C> <C>
Fund Name ______________________________ Class _________________ % _______________
Fund Name ______________________________ Class _________________ % _______________
Fund Name ______________________________ Class _________________ % _______________
</TABLE>
*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____________
13
<PAGE> 6
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.
[AIM LOGO APPEARS HERE]
14
<PAGE> 7
<TABLE>
<CAPTION>
Form 5305-RA ROTH INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT Do not file
(January 1998) (Under Section 408A of the Internal Revenue Code) with the Internal
Revenue Service
<S> <C> <C>
Department of the Treasury
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
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
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.
- --------------------------------------------------------------------------------
17 Cat No. 25094Y Form 5305-RA (1-98)
<PAGE> 8
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> 9
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
19
<PAGE> 10
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> 11
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> 1
EXHIBIT 15(a)(4)
SECOND
AMENDED AND RESTATED
MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(CLASS A SHARES, CLASS C SHARES AND AIM CASH RESERVE SHARES)
SECTION 1. AIM Funds Group, 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,
Class C Shares and AIM Cash Reserve Shares, 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 National Association of
Securities Dealers, 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 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, supplemental payments to dealers and other
institutions as asset-based sales charges. Amounts set forth in 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 Distributors' distribution-related services. 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.
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 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.
<PAGE> 2
(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") to
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 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 capacity will provide some or all of
the shareholders services to their customers as set forth in
the Pricing Agreements from time to time.
(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 the 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 immediately upon the 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 of a majority of those trustees of the Fund
who are not "interested persons" of the Fund (as defined in the 1940
- 2 -
<PAGE> 3
Act) and have no direct or indirect financial interest in the operation of this
Plan or any agreements related to it (the "Dis-interested 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 Fund 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 June 30, 1998 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 at any time by vote of a majority
of the Disinterested Trustees, or by vote of a majority of the outstanding
voting securities of the Shares. If this Plan is terminated, the obligation of
the Fund to make payments pursuant to this Plan will also cease and the Fund
will not be required to make any payments beyond the termination date even with
respect to expenses incurred prior to the termination date.
SECTION 10. Any agreement related to this Plan shall be made in writing,
and shall provide:
(a) that such agreement may be terminated at any time,
without payment of any penalty, by vote of a majority of the
Dis-interested Trustees or by a vote of the outstanding voting
securities of the Fund attributable to the Shares, 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 to increase materially the
amount of distribution expenses provided for in Section 2 hereof unless such
amendment is approved in the manner provided in Section 5 hereof, and no
material amendment to the Plan shall be made unless approved in the manner
provided for in Section 6 hereof.
AIM FUNDS GROUP
(on behalf of its Class A Shares, Class C
Shares and Shares and AIM Cash Reserve Shares)
Attest: /s/ Samuel D. Sirko By: /s/ Robert H. Graham
-------------------- ----------------------
Assistant Secretary President
Effective as of August 31, 1993, as amended as of March 8, 1994, and as further
amended as of September 10, 1994.
Amended and restated for all Portfolios as of June 30, 1997, and as further
amended and restated for all Portfolios as of August 4, 1997.
- 3 -
<PAGE> 4
SCHEDULE A
TO
MASTER DISTRIBUTION PLAN
OF
AIM FUNDS GROUP
(DISTRIBUTION FEE)
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.
MINIMUM
ASSET
PORTFOLIO BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS A SHARES CHARGE FEE FEE
-------------- ------ --- ---
AIM Balanced Fund 0.00% 0.25% 0.25%
AIM Global Utilities Fund 0.00% 0.25% 0.25%
AIM Growth Fund 0.00% 0.25% 0.25%
AIM High Yield Fund 0.00% 0.25% 0.25%
AIM Income Fund 0.00% 0.25% 0.25%
AIM Intermediate Government Fund 0.00% 0.25% 0.25%
AIM Money Market Fund 0.00% 0.25% 0.25%
AIM Municipal Bond Fund 0.00% 0.25% 0.25%
AIM Value Fund 0.00% 0.25% 0.25%
MAXIMUM
ASSET
BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS C SHARES CHARGE FEE FEE
-------------- ------ --- ---
AIM Balanced Fund 0.75% 0.25% 1.00%
AIM Global Utilities Fund 0.75% 0.25% 1.00%
AIM Growth Fund 0.75% 0.25% 1.00%
AIM High Yield Fund 0.75% 0.25% 1.00%
AIM Income Fund 0.75% 0.25% 1.00%
AIM Intermediate Government Fund 0.75% 0.25% 1.00%
AIM Money Market Fund 0.75% 0.25% 1.00%
AIM Municipal Bond Fund 0.75% 0.25% 1.00%
AIM Value Fund 0.75% 0.25% 1.00%
AIM CASH RESERVE SHARES
AIM Money Market Fund 0.00% 0.25% 0.25%
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.
- -----------------
* 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).
- 4 -
<PAGE> 1
EXHIBIT 15(b)
EXHIBIT A
SHAREHOLDER SERVICE AGREEMENT
[LOGO APPEARS HERE] FOR SALE OF SHARES
A I M Distributors, Inc. 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 (the "1940 Act") by each
of the AIM-managed mutual funds (or designated classes of such funds) listed on
Schedule A which may be amended from time to time by A I M 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 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 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
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 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 contingent 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 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 for the Funds, and you shall have no authority
to act as agent for the Funds or for Distributors.
11/97
<PAGE> 2
9 We may enter into other similar Shareholder Service Agreements with any
other person without your consent.
10 This Agreement and Schedule A may be amended at any time without your
consent by Distributors mailing a copy of an amendment to you at the 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 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: 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:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
11/97
<PAGE> 3
SCHEDULE "A"
[LOGO APPEARS HERE] SHAREHOLDER SERVICE AGREEMENT
A I M Distributors, Inc.
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ------------------------------------------------------------------------------------------
<S> <C> <C>
AIM Advisor Flex Fund A Shares 0.25 August 4, 1997
AIM Advisor Flex Fund B Shares 0.25 March 3, 1998
AIM Advisor Flex Fund C Shares 1.00** August 4, 1997
AIM Advisor International Value Fund A Shares 0.25 August 4, 1997
AIM Advisor International Value Fund B Shares 0.25 March 3, 1998
AIM Advisor International Value Fund C Shares 1.00** August 4, 1997
AIM Advisor Large Cap Value Fund A Shares 0.25 August 4, 1997
AIM Advisor Large Cap Value Fund B Shares 0.25 March 3, 1998
AIM Advisor Large Cap Value Fund C Shares 1.00** August 4, 1997
AIM Advisor MultiFlex Fund A Shares 0.25 August 4, 1997
AIM Advisor Multiflex Fund B Shares 0.25 March 3, 1998
AIM Advisor MultiFlex Fund C Shares 1.00** August 4, 1997
AIM Advisor Real Estate Fund A Shares 0.25 August 4, 1997
AIM Advisor Real Estate Fund B Shares 0.25 March 3, 1998
AIM Advisor Real Estate Fund C Shares 1.00** August 4, 1997
AIM Aggressive Growth Fund A Shares 0.25 July 1, 1992
AIM Asian Growth Fund A Shares 0.25 November 1, 1997
AIM Asian Growth Fund B Shares 0.25 November 1, 1997
AIM Asian Growth Fund C Shares 1.00** November 1, 1997
AIM Balanced Fund A Shares 0.25 October 18, 1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Balanced Fund C Shares 1.00** August 4, 1997
AIM Blue Chip Fund A Shares 0.25 June 3, 1996
AIM Blue Chip Fund B Shares 0.25 October 1, 1996
AIM Blue Chip Fund C Shares 1.00** August 4, 1997
AIM Capital Development Fund A Shares 0.25 July 17, 1996
AIM Capital Development Fund B Shares 0.25 October 1, 1996
AIM Capital Development Fund C Shares 1.00** August 4, 1997
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Charter Fund C Shares 1.00** August 4, 1997
AIM Constellation Fund A Shares 0.25 September 9, 1986
AIM Constellation Fund B Shares 0.25 November 3, 1997
AIM Constellation Fund C Shares 1.00** August 4, 1997
AIM European Development Fund A Shares 0.25 November 1, 1997
AIM European Development Fund B Shares 0.25 November 1, 1997
AIM European Development Fund C Shares 1.00** November 1, 1997
AIM Global Aggressive Growth Fund A Shares 0.50 September 15, 1994
AIM Global Aggressive Growth Fund B Shares 0.25 September 15, 1994
AIM Global Aggressive Growth Fund C Shares 1.00** August 4, 1997
AIM Global Growth Fund A Shares 0.50 September 15, 1994
AIM Global Growth Fund B Shares 0.25 September 15, 1994
AIM Global Growth Fund C Shares 1.00** August 4, 1997
AIM Global Income Fund A Shares 0.50 September 15, 1994
</TABLE>
2/98
<PAGE> 4
SCHEDULE "A"
[LOGO APPEARS HERE] SHAREHOLDER SERVICE AGREEMENT
A I M Distributors, Inc.
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------
<S> <C> <C>
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund C Shares 1.00** August 4, 1997
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Global Utilities Fund C Shares 1.00** August 4, 1997
AIM Growth Fund A Shares 0.25 July 1, 1992
AIM Growth Fund B Shares 0.25 September 1, 1993
AIM Growth Fund C Shares 1.00** August 4, 1997
AIM High Income Municipal Fund A Shares 0.25 December 22, 1997
AIM High Income Municipal Fund B Shares 0.25 December 22, 1997
AIM High Income Municipal Fund C Shares 1.00** December 22, 1997
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM High Yield Fund C Shares 1.00** August 4, 1997
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM Income Fund C Shares 1.00** August 4, 1997
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Intermediate Government Fund C Shares 1.00** August 4, 1997
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM International Equity Fund C Shares 1.00** August 4, 1997
AIM Limited Maturity Treasury Fund 0.15 December 2, 1987
AIM Money Market Fund A Shares 0.25 October 18, 1993
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Cash Reserve Shares 0.25 October 18, 1993
AIM Municipal Bond Fund A Shares 0.25 July 1, 1992
AIM Municipal Bond Fund B Shares 0.25 September 1, 1993
AIM Municipal Bond Fund C Shares 1.00** August 4, 1997
AIM Tax-Exempt Bond Fund of Connecticut A Shares 0.25 July 1, 1992
AIM Tax-Exempt Cash Fund A Shares 0.10 July 1, 1992
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Value Fund C Shares 1.00** August 4, 1997
</TABLE>
2/98
<PAGE> 5
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------
<S> <C> <C>
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
AIM Weingarten Fund C Shares 1.00** August 4, 1997
</TABLE>
* Frequency of Payments: Quarterly, B and C share payments begin after an
initial 12 month holding period. 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 0.75%
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.
2/98
<PAGE> 1
EXHIBIT 15(c)
EXHIBIT B
[LOGO APPEARS HERE] BANK SHAREHOLDER
A I M Distributors, Inc. 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 inquiries 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 from 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 five (5) 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 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.
11/97
<PAGE> 2
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 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 us 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:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
11/97
<PAGE> 3
SCHEDULE "A" TO BANK
[LOGO APPEARS HERE] SHAREHOLDER SERVICE AGREEMENT
A I M Distributors, Inc.
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ------------------------------------------------------------------------------------------
<S> <C> <C>
AIM Advisor Flex Fund A Shares 0.25 August 4, 1997
AIM Advisor Flex Fund B Shares 0.25 March 3, 1998
AIM Advisor Flex Fund C Shares 1.00** August 4, 1997
AIM Advisor International Value Fund A Shares 0.25 August 4, 1997
AIM Advisor International Value Fund B Shares 0.25 March 3, 1998
AIM Advisor International Value Fund C Shares 1.00** August 4, 1997
AIM Advisor Large Cap Value Fund A Shares 0.25 August 4, 1997
AIM Advisor Large Cap Value Fund B Shares 0.25 March 3, 1998
AIM Advisor Large Cap Value Fund C Shares 1.00** August 4, 1997
AIM Advisor MultiFlex Fund A Shares 0.25 August 4, 1997
AIM Advisor MultiFlex Fund B Shares 0.25 March 3, 1998
AIM Advisor MultiFlex Fund C Shares 1.00** August 4, 1997
AIM Advisor Real Estate Fund A Shares 0.25 August 4, 1997
AIM Advisor Real Estate Fund B Shares 0.25 March 3, 1998
AIM Advisor Real Estate Fund C Shares 1.00** August 4, 1997
AIM Aggressive Growth Fund A Shares 0.25 July 1, 1992
AIM Asian Growth Fund A Shares 0.25 November 1, 1997
AIM Asian Growth Fund B Shares 0.25 November 1, 1997
AIM Asian Growth Fund C Shares 1.00** November 1, 1997
AIM Balanced Fund A Shares 0.25 October 18, 1993
AIM Balanced Fund B Shares 0.25 October 18, 1993
AIM Balanced Fund C Shares 1.00** August 4, 1997
AIM Blue Chip Fund A Shares 0.25 June 3, 1996
AIM Blue Chip Fund B Shares 0.25 October 1, 1996
AIM Blue Chip Fund C Shares 1.00** August 4, 1997
AIM Capital Development Fund A Shares 0.25 June 17, 1996
AIM Capital Development Fund B Shares 0.25 October 1, 1996
AIM Capital Development Fund C Shares 1.00** August 4, 1997
AIM Charter Fund A Shares 0.25 November 18, 1986
AIM Charter Fund B Shares 0.25 June 15, 1995
AIM Charter Fund C Shares 1.00** August 4, 1997
AIM Constellation Fund A Shares 0.25 September 9, 1986
AIM Constellation Fund B Shares 0.25 November 3, 1997
AIM Constellation Fund C Shares 1.00** August 4, 1997
AIM European Development Fund A Shares 0.25 November 1, 1997
AIM European Development Fund B Shares 0.25 November 1, 1997
AIM European Development Fund C Shares 1.00** November 1, 1997
AIM Global Aggressive Growth Fund A Shares 0.50 September 15, 1994
AIM Global Aggressive Growth Fund B Shares 0.25 September 15, 1994
AIM Global Aggressive Growth Fund C Shares 1.00** August 4, 1997
AIM Global Growth Fund A Shares 0.50 September 15, 1994
AIM Global Growth Fund B Shares 0.25 September 15, 1994
AIM Global Growth Fund C Shares 1.00** August 4, 1997
AIM Global Income Fund A Shares 0.50 September 15, 1994
</TABLE>
2/98
<PAGE> 4
SCHEDULE "A" TO BANK
[LOGO APPEARS HERE] SHAREHOLDER SERVICE AGREEMENT
A I M Distributors, Inc.
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ----------------------------------------------------------------------------------------
<S> <C> <C>
AIM Global Income Fund B Shares 0.25 September 15, 1994
AIM Global Income Fund C Shares 1.00** August 4, 1997
AIM Global Utilities Fund A Shares 0.25 July 1, 1992
AIM Global Utilities Fund B Shares 0.25 September 1, 1993
AIM Global Utilities Fund C Shares 1.00** August 4, 1997
AIM Growth Fund A Shares 0.25 July 1, 1992
AIM Growth Fund B Shares 0.25 September 1, 1993
AIM Growth Fund C Shares 1.00** August 4, 1997
AIM High Income Municipal Fund A Shares 0.25 December 22, 1997
AIM High Income Municipal Fund B Shares 0.25 December 22, 1997
AIM High Income Municipal Fund C Shares 1.00** December 22, 1997
AIM High Yield Fund A Shares 0.25 July 1, 1992
AIM High Yield Fund B Shares 0.25 September 1, 1993
AIM High Yield Fund C Shares 1.00** August 4, 1997
AIM Income Fund A Shares 0.25 July 1, 1992
AIM Income Fund B Shares 0.25 September 1, 1993
AIM Income Fund C Shares 1.00** August 4, 1997
AIM Intermediate Government Fund A Shares 0.25 July 1, 1992
AIM Intermediate Government Fund B Shares 0.25 September 1, 1993
AIM Intermediate Government Fund C Shares 1.00** August 4, 1997
AIM International Equity Fund A Shares 0.25 May 21, 1992
AIM International Equity Fund B Shares 0.25 September 15, 1994
AIM International Equity Fund C Shares 1.00** August 4, 1997
AIM Limited Maturity Treasury Fund 0.15 December 2, 1987
AIM Money Market Fund A Shares 0.25 October 18, 1993
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Cash Reserve Shares 0.25 October 18, 1993
AIM Municipal Bond Fund A Shares 0.25 July 1, 1992
AIM Municipal Bond Fund B Shares 0.25 September 1, 1993
AIM Municipal Bond Fund C Shares 1.00** August 4, 1997
AIM Tax-Exempt Bond Fund of Connecticut A Shares 0.25 July 1, 1992
AIM Tax-Exempt Cash Fund A Shares 0.10 July 1, 1992
AIM Value Fund A Shares 0.25 July 1, 1992
AIM Value Fund B Shares 0.25 October 18, 1993
AIM Value Fund C Shares 1.00** August 4, 1997
</TABLE>
2/98
<PAGE> 5
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
- ---------------------------------------------------------------------------------------
<S> <C> <C>
AIM Weingarten Fund A Shares 0.25 September 9, 1986
AIM Weingarten Fund B Shares 0.25 June 15, 1995
AIM Weingarten Fund C Shares 1.00** August 4, 1997
</TABLE>
* Frequency of Payments: Quarterly, B and C share payments begin after an
initial 12 month holding period. 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 0.75%
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.
2/98
<PAGE> 1
EXHIBIT 15(d)
EXHIBIT C
VARIABLE GROUP ANNUITY CONTRACTHOLDER SERVICE AGREEMENT
This Variable Group Annuity Conractholder Service Agreement (the
"Agreement") has been adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the "1940 Act") under a Distribution Plan adopted pursuant
to said Rule. This Agreement, being made between A I M Distributors, Inc.
("Distributors") and the authorized insurance company, sets forth the terms for
the provision of specialized services to holders of Group Annuity Contracts
(the "Contracts") issued by insurance company separate accounts to employers
for their pension, stock bonus or profit-sharing plans qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Plans"), where
amounts contributed under such plans are invested pursuant to the Contracts in
shares of one or more of the series portfolios of the AIM - managed mutual
funds (or designated classes of such funds) (the "Fund(s)") listed in Appendix
A, attached hereto, which may be amended from time to time by Distributors.
Distributors' role in these arrangements will be solely as agent for the Funds.
1. To the extent you provide specialized services to holders of
Contracts who have selected the Fund(s) for purposes of their Group Annuity
Contracts ("Contractholders") you will receive payment pursuant to the
distribution plan adopted by each of the Funds. Such services to Group
Contractholders may include, without limitation, some or all of the
following: answering inquiries regarding the Fund(s); performing
sub-accounting for Contractholders; establishing and maintaining
Contractholder accounts and records; processing and bunching purchase and
redemption transactions; providing periodic statements of Contract account
balances; forwarding such reports and notices to Contractholders relative
to the Fund(s) as we deem necessary; generally, facilitating communications
with Contractholders concerning investments in the Fund(s) on behalf of
Plan participants; and performing such other administrative services as we
deem to be necessary or desirable, to the extent permitted by applicable
statute, rule or regulation. You represent that you will accept a fee
hereunder only so long as you continue to provide personal services to
Contractholders.
2. Shares of the Fund(s) purchased by you will be registered in your
name and you may exercise all applicable rights of a holder of such Shares.
You agree to transmit to the Funds, in a timely manner, all purchase orders
and redemption requests and to forward to each of your Contractholders as
you deem necessary, periodic shareholder reports and other communications
received from the Funds.
3. You agree to wire to the Fund(s)' custodian bank, within three (3)
business days of the placing of a purchase order, federal funds in an
amount equal to the amount of all purchase orders placed by you on behalf
of your Contractholders and accepted by the Funds (net of any redemption
orders placed by you on behalf of your Contractholders).
C-1
<PAGE> 2
4. You shall provide such facilities and personnel (which may be all
or any part of the facilities currently used in your business, or all or
any personnel employed by you) as may be necessary or beneficial in
carrying out the purposes of this Agreement.
5. Except as may be provided in a separate written agreement between
Distributors and you, neither you nor any of your employees or agents are
authorized to assist in the distribution of any shares of the Fund(s) to
the public or to make any representations to Contractholders concerning the
Fund(s) except those contained in the then current prospectus applicable to
the Fund(s). Neither the Funds, A I M Advisors, Inc. ("Advisors"),
Distributors nor any of their affiliates will be a party, nor will they be
represented as a party, to any Group Annuity Contract agreement between you
and the Contractholders nor shall the Funds, Advisors, Distributors or any
of their affiliates participate, directly or indirectly, in any
compensation that you may receive from Contractholders and their Plans'
participants.
6. In consideration of the services and facilities described herein,
you shall receive an annual fee, payable quarterly, as set forth in
Appendix A, of the aggregate average net asset value of shares of the
Fund(s) owned by you during each quarterly period for the benefit of
Contractholders' Plans' participants. You understand that this Agreement
and the payment of such distribution fees have been authorized and approved
by the Boards of Directors/Trustees of the Fund(s). You further understand
that this Agreement and the fees payable hereunder are subject to
limitations imposed by applicable rules of the National Association of
Securities Dealers, Inc.
7. The Funds reserve the right, at their discretion and without
notice, to suspend the sale of their shares or to withdraw the sale of
their shares.
8. This Agreement may be amended at any time without your consent by
mailing a copy of an amendment to you at the address set forth below. Such
amendment shall become effective on the date set forth in such amendment
unless you terminate this Agreement as set forth below within thirty (30)
days of your receipt of such amendment.
9. This Agreement may be terminated at any time by us on not less than
60 days' written notice to you at your principal place of business. You
may terminate this Agreement on 60 days' written notice addressed to us at
our principal place of business. We may also terminate this Agreement for
cause on violation by you of any of the provisions of this Agreement, said
termination to become effective on the date of mailing notice to you of
such termination. Our failure to terminate for any cause shall not
constitute a waiver of our right to terminate at a later date for any such
cause.
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/trustees of such Fund who are Dis-interested Directors/Trustees,
as defined in the 1940 Act, 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 Fund's Distribution
Agreement with us, 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.
C-2
<PAGE> 3
10. All communications to us shall be sent to 11 Greenway Plaza,
Suite 100, Houston, Texas 77046. Any notice to you shall be duly given if
mailed, telegraphed or sent by facsimile to you at the address shown on
this Agreement.
11. This Agreement shall become effective as of the date when it is
executed and dated below by us. 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:
------------------- ----------------------------
Signature
----------------------------
Print Name
The undersigned agrees to abide by the foregoing terms and conditions.
Date:
------------------- ----------------------------
(Firm Name)
----------------------------
(Address)
----------------------------
(City) / (State) / (County)
By:
-------------------------
Name:
-----------------------
Title:
-----------------------
C-3
<PAGE> 4
APPENDIX A
TO
VARIABLE GROUP ANNUITY CONTRACTHOLDER SERVICE AGREEMENT
<TABLE>
<CAPTION>
Fund Fee Rate*
- ---- ---------
<S> <C>
AIM Advisor Funds, Inc. (Class A Shares Only)
- ---------------------------------------------
AIM Advisor Flex Fund .25%
AIM Advisor International Value Fund .25%
AIM Advisor Large Cap Value Fund .25%
AIM Advisor MultiFlex Fund .25%
AIM Advisor Real Estate Fund .25%
AIM Equity Funds, Inc. (Class A Shares Only)
- --------------------------------------------
AIM Aggressive Growth Fund** .25%
AIM Blue Chip Fund .25%
AIM Capital Development Fund .25%
AIM Charter Fund .25%
AIM Constellation Fund .25%
AIM Weingarten Fund .25%
AIM Funds Group (Class A Shares Only)
- -------------------------------------
AIM Balanced Fund .25%
AIM Global Utilities Fund .25%
AIM Growth Fund .25%
AIM High Yield Fund .25%
AIM Income Fund .25%
AIM Intermediate Government Fund .25%
AIM Municipal Bond Fund .25%
AIM Value Fund .25%
AIM International Funds, Inc. (Class A Shares Only)
- ---------------------------------------------------
AIM Asian Growth Fund .25%
AIM European Development Fund .25%
AIM Global Aggressive Growth Fund .25%
AIM Global Growth Fund .25%
AIM Global Income Fund .25%
AIM International Equity Fund .25%
AIM Investment Securities Funds (Class A Shares)
- ------------------------------------------------
AIM Limited Maturity Treasury Fund .15%
</TABLE>
*Frequency of Payments: Quarterly
**AIM Aggressive Growth Fund is currently closed to new investors.
C-4
<PAGE> 1
EXHIBIT 15(e)
EXHIBIT D
AGENCY PRICING AGREEMENT
(THE AIM FAMILY OF FUNDS--Registered Trademark--)
This Agreement is entered into as of the____ of ____________, 1997,
between _______________________(the "Plan Provider") and A I M Distributors,
Inc. (the "Distributor").
RECITAL
Plan Provider acts as a trustee and/or servicing agent for defined
contribution plans and/or deferred compensation plans (the "Plans") and invests
and reinvests such Plans' assets as specified by an investment advisor, sponsor
or administrative committee of the Plan (a "Plan Representative") generally
upon the direction of Plan beneficiaries (the "Participants").
Plan Provider and Distributor desire to facilitate the purchase and
redemption of shares (the "Shares") of the funds listed on Exhibit A hereto
(the "Fund" or "Funds"), registered investment companies distributed by
Distributor, on behalf of the Plans, through one or more accounts (not to
exceed one per Plan) in each Fund (individually an "Account" and collectively
the "Accounts"), subject to the terms and conditions of this Agreement.
Distributor shall, on behalf of the Funds, pay to Plan Provider a fee in
accordance with Exhibit A hereto.
AGREEMENT
1. SERVICES
Plan Provider shall provide shareholder and administration services
for the Plans and/or their Participants, including, without
limitation: answering questions about the Funds; assisting in changing
dividend options, account designations and addresses; establishing and
maintaining shareholder accounts and records; and assisting in
processing purchase and redemption transactions (the "Services").
Plan Provider shall comply with all applicable laws, rules and
regulations, including requirements regarding prospectus delivery and
maintenance and preservation of records. To the extent allowed by
law, Plan Provider shall provide Distributor with copies of all
records that Distributor may reasonably request. Distributor or its
affiliate will recognize each Plan as an unallocated account in each
Fund, and will not maintain separate accounts in each Fund for each
Participant. Except to the extent provided in Section 3, all Services
performed by Plan Provider shall be as an independent contractor and
not as an employee or agent of Distributor or any of the Funds. Plan
Provider and Plan Representatives, and not Distributor, shall take all
necessary action so that the transactions contemplated by this
Agreement shall not be "Prohibited Transactions" under section 406 of
the Employee Retirement Income Security Act of 1974, or section 4975
of the Internal Revenue Code.
2. PRICING INFORMATION
Each Fund or its designee will furnish Plan Provider on each business
day that the New York Stock Exchange is open for business ("Business
Day"), with (i) net asset value information as of the close of trading
(currently 4:00 p.m. Eastern Time) on the New York
<PAGE> 2
Stock Exchange or as at such later times at which a Fund's net asset
value is calculated as specified in such Fund's prospectus ("Close of
Trading"), (ii) dividend and capital gains information as it becomes
available, and (iii) in the case of income Funds, the daily accrual or
interest rate factor (mil rate). The Funds shall use their best efforts
to provide such information to Plan Provider by 6:00 p.m. Central Time
on the same Business Day.
Distributor or its affiliate will provide Plan Provider (a) daily
confirmations of Account activity within five Business Days after each
day on which a purchase or redemption of Shares is effected for the
particular Account, (b) if requested by Plan Provider, quarterly
statements detailing activity in each Account within fifteen Business
Days after the end of each quarter, and (c) such other reports as may
be reasonably requested by Plan Provider.
3. ORDERS AND SETTLEMENT
If Plan Provider receives instructions in proper form from
Participants or Plan Representatives before the Close of Trading on a
Business Day, Plan Provider will process such instructions that same
evening. On the next Business Day, Plan Provider will transmit orders
for net purchases or redemptions of Shares to Distributor or its
designee by 9:00 a.m. Central Time and wire payment for net purchases
by 2:00 p.m. Central Time. Distributor or its affiliate will wire
payment for net redemptions on the Business Day following the day the
order is executed for the Accounts. In doing so, Plan Provider will
be considered the Funds' agent, and Shares will be purchased and
redeemed as of the Business Day on which Plan Provider receives the
instructions. Plan Provider will record time and date of receipt of
instructions and will, upon request, provide such instructions and
other records relating to the Services to Distributor's auditors. If
Plan Provider receives instructions in proper form after the Close of
Trading on a Business Day, Plan Provider will treat the instructions
as if received on the next Business Day.
4. REPRESENTATIONS WITH RESPECT TO THE DISTRIBUTOR AND THE FUNDS
Plan Provider and its agents shall limit representations concerning a
Fund or Shares to those contained in the then current prospectus of
such Fund, in current sales literature furnished by Distributor to
Plan Provider, in publicly available databases, such as those
databases created by Standard & Poor's and Morningstar, and in current
sales literature created by Plan Provider and submitted to and
approved in writing by Distributor prior to its use.
5. USE OF NAMES
Plan Provider and its affiliates will not, without the prior written
approval of Distributor, make public references to A I M Management
Group Inc. or any of its subsidiaries, or to the Funds. For purposes
of this provision, the public does not include Plan Providers'
representatives who are actively engaged in promoting the Funds. Any
brochure or other communication to the public that mentions the Funds
shall be submitted to Distributor for written approval prior to use.
Plan Provider shall provide copies of its regulatory filings that
include any reference to A I M Management Group Inc. or its
subsidiaries or the Funds to Distributor. If Plan Provider or its
affiliates should make unauthorized references or representations,
Plan Provider agrees to indemnify and hold harmless the Funds, A I M
Management Group
-2-
<PAGE> 3
Inc. and its subsidiaries from any claims, losses, expenses or
liability arising in any way out of or connected in any way
with such references or representations.
6. TERMINATION
(a) This Agreement may be terminated with respect to any Fund at
any time without any penalty by the vote of a majority of the
directors of such Fund who are "disinterested directors", as
that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), 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
Fund's Distribution Plan, or any related agreement thereunder,
and in any event, it shall terminate automatically in the
event of its assignment as that term is defined in the 1940
Act.
(b) Either party may terminate this Agreement upon ninety (90)
days' prior written notice to the other party at the address
specified below.
7. INDEMNIFICATION
(a) Plan Provider agrees to indemnify and hold harmless the
Distributor, its affiliates, the Funds, the Funds' investment
advisors, and each of their directors, officers, employees,
agents and each person, if any, who controls them within the
meaning of the Securities Act of 1933, as amended (the
"Securities Act"), (the "Distributor Indemnitees") against any
losses, claims, damages, liabilities or expenses to which a
Distributor Indemnitee may become subject insofar as those
losses, claims, damages, liabilities or expenses or actions in
respect thereof, arise out of or are based upon (i) Plan
Provider's negligence or willful misconduct in performing the
Services, (ii) any breach by Plan Provider of any material
provision of this Agreement, or (iii) any breach by Plan
Provider of a representation, warranty or covenant made in
this Agreement; and Plan Provider will reimburse the
Distributor Indemnitee for any legal or other expenses
reasonably incurred, as incurred, by them in connection with
investigating or defending such loss, claim or action. This
indemnity agreement will be in addition to any liability which
Plan Provider may otherwise have.
(b) Distributor agrees to indemnify and hold harmless Plan
Provider and its affiliates, and each of its directors,
officers, employees, agents and each person, if any, who
controls Plan Provider within the meaning of the Securities
Act (the "Plan Provider Indemnitees") against any losses,
claims, damages, liabilities or expenses to which a Plan
Provider Indemnitee may become subject insofar as such losses,
claims, damages, liabilities or expenses (or actions in
respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact
contained in the Registration Statement or Prospectus of a
Fund, or the omission or the alleged omission to state therein
a material fact required to be stated therein or necessary to
make statements therein not misleading, (ii) any breach by
Distributor of any material provision of this Agreement, (iii)
Distributor's negligence or willful misconduct in carrying out
its duties and responsibilities under this Agreement, or (iv)
any breach by Distributor of a representation, warranty or
covenant made in this Agreement; and Distributor will
reimburse the Plan Provider Indemnitees for any
-3-
<PAGE> 4
legal or other expenses reasonably incurred, as incurred, by
them, in connection with investigating or defending any such
loss, claim or action. This indemnity agreement will be in
addition to any liability which Distributor may otherwise have.
(c) If any third party threatens to commence or commences any
action for which one party (the "Indemnifying Party") may be
required to indemnify another person hereunder (the
"Indemnified Party"), the Indemnified Party shall promptly
give notice thereof to the Indemnifying Party. The
Indemnifying Party shall be entitled, at its own expense and
without limiting its obligations to indemnify the Indemnified
Party, to assume control of the defense of such action with
counsel selected by the Indemnifying Party which counsel shall
be reasonably satisfactory to the Indemnified Party. If the
Indemnifying Party assumes the control of the defense, the
Indemnified Party may participate in the defense of such claim
at its own expense. Without the prior written consent of the
Indemnified Party, which consent shall not be withheld
unreasonably, the Indemnifying Party may not settle or
compromise the liability of the Indemnified Party in such
action or consent to or permit the entry of any judgment in
respect thereof unless in connection with such settlement,
compromise or consent each Indemnified Party receives from
such claimant an unconditional release from all liability in
respect of such claim.
8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Texas applicable to agreements fully
executed and to be performed therein.
9. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each party represents that it is free to enter into this Agreement and
that by doing so it will not breach or otherwise impair any other
agreement or understanding with any other person, corporation or other
entity. Each party represents that it has full power and authority
under applicable law, and has taken all action necessary to enter into
and perform this Agreement and the person executing this Agreement on
its behalf is duly authorized and empowered to execute and deliver
this Agreement. Additionally, each party represents that this
Agreement, when executed and delivered, shall constitute its valid,
legal and binding obligation, enforceable in accordance with its
terms.
Plan Provider further represents, warrants, and covenants that:
(a) it is registered as a transfer agent pursuant to Section 17A
of the Securities Exchange Act of 1934, as amended (the "1934
Act"), or is not required to be registered as such;
(b) the arrangements provided for in this Agreement will be
disclosed to the Plan Representatives; and
(c) it is registered as a broker-dealer under the 1934 Act or any
applicable state securities laws, or, including as a result of
entering into and performing the services set forth in this
Agreement, is not required to be registered as such.
-4-
<PAGE> 5
Distributor further represents, warrants and covenants, that:
(a) it is registered as a broker-dealer under the 1934 Act and any
applicable state securities laws; and
(b) the Funds' advisors are registered as investment advisors
under the Investment Advisers Act of 1940, the Funds are
registered as investment companies under the 1940 Act and Fund
Shares are registered under the Securities Act.
10. MODIFICATION
This Agreement and Exhibit A may be amended at any time by Distributor
without Plan Provider's consent by Distributor mailing a copy of an
amendment to Plan Provider at the address set forth below. Such
amendment shall become effective thirty (30) days from the date of
mailing unless this Agreement is terminated by the Plan Provider
within such thirty (30) days.
11. ASSIGNMENT
This Agreement shall not be assigned by a party hereto, without the
prior written consent of the other parties hereto, except that a party
may assign this Agreement to an affiliate having the same ultimate
ownership as the assigning party without such consent.
12. SURVIVAL
The provisions of Sections 1, 5 and 7 shall survive termination of
this Agreement.
-5-
<PAGE> 6
IN WITNESS WHEREOF, the undersigned have executed this Agreement by
their duly authorized officers as of the date first above written.
______________________________________
(PLAN PROVIDER)
By:___________________________________
Print Name:___________________________
Title:________________________________
Address: _____________________________
______________________________________
______________________________________
A I M DISTRIBUTORS, INC.
(DISTRIBUTOR)
By:___________________________________
Print Name:___________________________
Title:________________________________
11 Greenway Plaza
Suite 100
Houston, Texas 77210
-6-
<PAGE> 7
EXHIBIT A
For the term of this Agreement, Distributor, or its affiliates, shall
pay Plan Provider the following amounts for each of the following Funds with
respect to the average daily net asset value of the Class A Shares of the
Plans' balances for the prior quarter:
<TABLE>
<CAPTION>
FUND ANNUAL FEE
- ---------- ----------
<S> <C>
AIM Advisor Funds, Inc.
- -----------------------
AIM Advisor Flex Fund .25%
AIM Advisor Income Fund .25%
AIM Advisor International Value Fund .25%
AIM Advisor Large Cap Value Fund .25%
AIM Advisor MultiFlex Fund .25%
AIM Advisor Real Estate Fund .25%
AIM Equity Funds, Inc.
- ----------------------
AIM Aggressive Growth Fund * .25%
AIM Blue Chip Fund .25%
AIM Capital Development Fund .25%
AIM Charter Fund .25%
AIM Constellation Fund .25%
AIM Weingarten Fund .25%
AIM Funds Group
- ---------------
AIM Balanced Fund .25%
AIM Global Utilities Fund .25%
AIM Growth Fund .25%
AIM High Yield Fund .25%
AIM Income Fund .25%
AIM Intermediate Government Fund .25%
AIM Municipal Bond Fund .25%
AIM Value Fund .25%
AIM International Funds, Inc.
- -----------------------------
AIM Asian Growth Fund .25%
AIM European Development Fund .25%
AIM Global Aggressive Growth Fund .25%
AIM Global Growth Fund .25%
AIM Global Income Fund .25%
AIM International Equity Fund .25%
AIM Investment Securities Funds
- -------------------------------
AIM Limited Maturity Treasury Fund .15%
</TABLE>
Distributor or its affiliates shall calculate the amount of quarterly
payment and shall deliver to Plan Provider a quarterly statement showing the
calculation of the quarterly amounts payable to Plan Provider. Distributor
reserves the right at any time to impose minimum fee payment requirements
before any quarterly payments will be made to Plan Provider. Payment to Plan
Provider shall occur within 30 days following the end of each quarter. All
parties agree that the payments referred to herein are for record keeping and
administrative services only and are not for legal, investment advisory or
distribution services.
Minimum Payments: $50 (with respect to all Funds in the aggregate.)
** AIM Aggressive Growth Fund is currently closed to new investors.
<PAGE> 1
EXHIBIT 15(f)
EXHIBIT E
A I M DISTRIBUTORS, INC.
[LOGO APPEARS HERE] SHAREHOLDER SERVICE AGREEMENT
A I M Distributors, Inc.
(BROKERS FOR BANK TRUST DEPARTMENTS)
_____________, 19___
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc. ("AIM
Distributors") as agent on behalf of the funds listed on Schedule A hereto (the
"Funds"), for the servicing of our clients who are shareholders of, and the
administration of accounts in, the Funds. We understand that this Shareholder
Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds,
under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is
subject to applicable rules of the National Association of Securities Dealers,
Inc. ("NASD"). This Agreement defines the services to be provided by us for
which we are to receive payments pursuant to the Plan. The Plan and the
Agreement have been approved by a majority of the directors or trustees of the
applicable Fund, including a majority of directors or trustees who are not
interested persons of the applicable Fund, and who have no direct or indirect
financial interest in the operation of the Plan or related agreements, by votes
cast in person at a meeting called for the purpose of voting on the Plan. Such
approval included a determination by the directors or trustees of the
applicable Fund, in the exercise of their reasonable business judgement and in
light of their fiduciary duties, that there is a reasonable likelihood that the
Plan will benefit the Fund and the holders of its Shares. The terms and
conditions of this Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services
and administrative support services to our customers who may from time
to time own shares of the Funds of record or beneficially, including but
not limited to, forwarding 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 of the Funds and providing
such other services as AIM Distributors or the customer may reasonably
request, you shall pay us a fee periodically. We represent that we shall
accept fees hereunder only so long as we continue to provide such
personal shareholder services.
2. We agree to transmit to AIM Distributors in a timely manner, all
purchase orders and redemption requests of our clients and to forward to
each client all proxy statements, periodic
<PAGE> 2
Shareholder Service Agreement Page 2
(Brokers for Bank Trust Departments)
shareholder reports and other communications received from AIM
Distributors by us relating to shares of the Funds owned by our clients.
AIM Distributors, on behalf of the Funds, 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 under
applicable laws or regulations.
3. We agree to transfer to AIM Distributors in a timely manner as set forth
in the applicable prospectus, federal funds in an amount equal to the
amount of all purchase orders placed by us and accepted by AIM
Distributors. In the event that AIM Distributors fails to receive such
federal funds on such date (other than through the fault of AIM
Distributors), we shall indemnify the applicable Fund and AIM
Distributors against any expense (including overdraft charges) incurred
by the applicable Fund and/or AIM Distributors as a result of the
failure to receive such federal funds.
4. We agree to make available upon AIM Distributors's request, such
information relating to our clients who are beneficial owners of Fund
shares and their transactions in such shares as may be required by
applicable laws and regulations or as may be reasonably requested by AIM
Distributors.
5. We agree to transfer record ownership of a client's Fund 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.
6. Neither we nor any of our employees or agents are authorized to make any
representation to our clients concerning the Funds except those
contained in the then current prospectuses applicable to the Funds,
copies of which will be supplied to us by AIM Distributors; and we shall
have no authority to act as agent for any Fund or AIM Distributors.
Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be a party, nor
will they be represented as a party, to any agreement that we may enter
into with our clients and neither a Fund nor AIM shall participate,
directly or indirectly, in any compensation that we may receive from our
clients in connection with our acting on their behalf with respect to
this Agreement.
7. In consideration of the services and facilities described herein, we
shall receive a maximum annual service fee and asset-based sales charge,
payable monthly, as set forth on Schedule A hereto. We understand that
this Agreement and the payment of such service fees and asset-based
sales charge has been authorized and approved by the Board of Directors
or Trustees of the applicable Fund, and that the payment of fees
thereunder is subject to limitations imposed by the rules of the NASD.
8. AIM Distributors reserves the right, in its discretion and without
notice, to suspend the sale of any Fund or withdraw the sale of shares
of a Fund, or upon notice to us, to amend this Agreement. We agree that
any order to purchase shares of the Funds placed by us after notice of
any amendment to this Agreement has been sent to us shall constitute our
agreement to any such amendment.
9. All communications to AIM Distributors shall be duly given if mailed to
<PAGE> 3
Shareholder Service Agreement Page 3
(Brokers for Bank Trust Departments)
A I M Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173. Any notice to us shall be duly given if mailed to us at the
address specified by us in this Agreement or to such other address as we
shall have designated in writing to AIM Distributors.
10. This Agreement may be terminated at any time by AIM Distributors on not
less than 60 days' written notice to us at our principal place of
business. We, on 60 days' written notice addressed to AIM Distributors
at its principal place of business, may terminate this Agreement. AIM
Distributors may also terminate this Agreement for cause on violation by
us of any of the provisions of this Agreement, said termination to
become effective on the date of mailing notice to us of such
termination. AIM Distributors's failure to terminate for any cause shall
not constitute a waiver of AIM Distributors's right to terminate at a
later date for any such cause. This Agreement may be terminated with
respect to any Fund at any time by the vote of a majority of the
directors or trustees of such Fund who are disinterested directors or by
a vote of a majority of the Fund's outstanding shares, on not less than
60 days' written notice to us at our principal place of business. This
Agreement will be terminated by any act which terminates the Selected
Dealer Agreement between us and AIM Distributors or a Fund's
Distribution Plan, and in any event, shall terminate automatically in
the event of its assignment by us, the term "assignment" for this
purpose having the meaning defined in Section 2(a)(4) of the 1940 Act.
11. We represent that our activities on behalf of our clients and pursuant
to this Agreement either (i) are not such as to require our registration
as a broker-dealer in the state(s) in which we engage in such
activities, or (ii) we are registered as a broker-dealer in the state(s)
in which we engage in such activities. We represent that we are
registered as a broker-dealer with the NASD if required under applicable
law.
12. 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.
This Agreement may be executed in counterparts, each of which shall be
deemed an original but all of which shall constitute the same
instrument. This Agreement shall not relieve us or AIM Distributors from
any obligations either may have under any other agreements between us.
13. This Agreement shall become effective as of the date when it is executed
and dated by AIM Distributors.
<PAGE> 4
Shareholder Service Agreement Page 4
(Brokers for Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
-----------------------------------
(Firm Name)
-----------------------------------
(Address)
-----------------------------------
City/State/Zip/County
By:
----------------------------
Name:
------------------------------
Title:
----------------------------
Dated:
-----------------------------
ACCEPTED:
A I M DISTRIBUTORS, INC.
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
Dated:
----------------------------
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
<PAGE> 5
Shareholder Service Agreement Page 5
(Brokers for Bank Trust Departments)
SCHEDULE A
Funds Fees
AIM Advisor Funds, Inc.
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 Equity Funds, Inc.
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
*AIM Aggressive Growth Fund
AIM Funds Group
AIM Balanced Fund
AIM Global Utilities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Value Fund
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM International Equity Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund
AIM Tax-Exempt Funds, Inc.
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
- ---------
* Shares of AIM Aggressive Growth Fund may only be sold to current
shareholders who maintain open accounts in AIM Aggressive Growth Fund.
<PAGE> 6
A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
[LOGO APPEARS HERE]
A I M Distributors, Inc. (BANK TRUST DEPARTMENTS)
_________________, 19_____
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
Gentlemen:
We desire to enter into an Agreement with A I M Distributors, Inc. ("AIM
Distributors") as agent on behalf of the funds listed on Schedule A hereto (the
"Funds"), for the servicing of our clients who are shareholders of, and the
administration of accounts in, the Funds. We understand that this Shareholder
Service Agreement (the "Agreement") has been adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "1940 Act") by each of the Funds,
under a Distribution Plan (the "Plan") adopted pursuant to said Rule, and is
subject to applicable rules of the National Association of Securities Dealers,
Inc. ("NASD"). This Agreement defines the services to be provided by us for
which we are to receive payments pursuant to the Plan. The Plan and the
Agreement have been approved by a majority of the directors or trustees of the
applicable Fund, including a majority of directors or trustees who are not
interested persons of the applicable Fund, and who have no direct or indirect
financial interest in the operation of the Plan or related agreements, by votes
cast in person at a meeting called for the purpose of voting on the Plan. Such
approval included a determination by the directors or trustees of the
applicable Fund, in the exercise of their reasonable business judgement and in
light of their fiduciary duties, that there is a reasonable likelihood that the
Plan will benefit the Fund and the holders of its Shares. The terms and
conditions of this Agreement shall be as follows:
1. To the extent that we provide continuing personal shareholder services
and administrative support services to our customers who may from time
to time own shares of the Funds of record or beneficially, including but
not limited to, forwarding 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 of the Funds and providing
such other services as AIM Distributors or the customer may reasonably
request, you shall pay us a fee periodically. We represent that we
shall accept fees hereunder only so long as we continue to provide such
personal shareholder services.
2. We agree to transmit to AIM Distributors in a timely manner, all
purchase orders and redemption requests of our clients and to forward to
each client all proxy statements, periodic shareholder reports and other
communications received from AIM Distributors by us relating
<PAGE> 7
Shareholder Service Agreement Page 2
(Bank Trust Departments)
to shares of the Funds owned by our clients. AIM Distributors, on
behalf of the Funds, 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 under applicable laws
or regulations.
3. We agree to make available upon AIM Distributors's request, such
information relating to our clients who are beneficial owners of Fund
shares and their transactions in such shares as may be required by
applicable laws and regulations or as may be reasonably requested by AIM
Distributors.
4. We agree to transfer record ownership of a client's Fund 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.
5. Neither we nor any of our employees or agents are authorized to make any
representation to our clients concerning the Funds except those
contained in the then current prospectuses applicable to the Funds,
copies of which will be supplied to us by AIM Distributors; and we shall
have no authority to act as agent for any Fund or AIM Distributors.
Neither a Fund, nor A I M Advisors, Inc. ("AIM") will be a party, nor
will they be represented as a party, to any agreement that we may enter
into with our clients and neither a Fund nor AIM shall participate,
directly or indirectly, in any compensation that we may receive from our
clients in connection with our acting on their behalf with respect to
this Agreement.
6. In consideration of the services and facilities described herein, we
shall receive a maximum annual service fee and asset-based sales charge,
payable monthly, as set forth on Schedule A hereto. We understand that
this Agreement and the payment of such service fees and asset-based
sales charge has been authorized and approved by the Board of Directors
or Trustees of the applicable Fund, and that the payment of fees
thereunder is subject to limitations imposed by the rules of the NASD.
7. AIM Distributors reserves the right, in its discretion and without
notice, to suspend the sale of any Fund or withdraw the sale of shares
of a Fund, or upon notice to us, to amend this Agreement. We agree that
any order to purchase shares of the Funds placed by us after notice of
any amendment to this Agreement has been sent to us shall constitute our
agreement to any such amendment.
8. All communications to AIM Distributors shall be duly given if mailed to
A I M Distributors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173. Any notice to us shall be duly given if mailed to us at the
address specified by us in this Agreement or to such other address as we
shall have designated in writing to AIM Distributors.
9. This Agreement may be terminated at any time by AIM Distributors on not
less than 60 days' written notice to us at our principal place of
business. We, on 60 days' written notice addressed to AIM Distributors
at its principal place of business, may terminate this Agreement. AIM
Distributors may also terminate this Agreement for cause on violation by
us of any of the provisions of this Agreement, said termination to
become effective on the date of mailing notice to us of such
termination. AIM Distributors's failure to terminate for any cause
shall not constitute a waiver of AIM Distributors's right to terminate
at a later date for
<PAGE> 8
Shareholder Service Agreement Page 3
(Bank Trust Departments)
any such cause. This Agreement may be terminated with respect to any
Fund at any time by the vote of a majority of the directors or trustees
of such Fund who are disinterested directors or by a vote of a majority
of the Fund's outstanding shares, on not less than 60 days' written
notice to us at our principal place of business. This Agreement will be
terminated by any act which terminates the Agreement for Purchase of
Shares of The AIM Family of Funds--Registered Trademark-- between us and
AIM Distributors or a Fund's Distribution Plan, and in any event, it
shall terminate automatically in the event of its assignment by us, the
term "assignment" for this purpose having the meaning defined in Section
2(a)(4) of the 1940 Act.
10. We represent that our activities on behalf of our clients and pursuant
to this Agreement either (i) are not such as to require our registration
as a broker-dealer in the state(s) in which we engage in such
activities, or (ii) we are registered as a broker-dealer in the state(s)
in which we engage in such activities. We represent that we are
registered as a broker-dealer with the NASD if required under applicable
law.
11. This Agreement and the Agreement for Purchase of Shares of The AIM Family
of Funds--Registered Trademark-- through Bank Trust Departments
constitute the entire agreement between us and AIM Distributors and
supersede all prior oral or written agreements between the parties
hereto. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which shall constitute the same
instrument.
12. 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.
13. This Agreement shall become effective as of the date when it is executed
and dated by AIM Distributors.
<PAGE> 9
Shareholder Service Agreement Page 4
(Bank Trust Departments)
The undersigned agrees to abide by the foregoing terms and conditions.
----------------------------------
(Firm Name)
----------------------------------
(Address)
----------------------------------
City/State/Zip/County
By:
---------------------------
Name:
-----------------------------
Title:
---------------------------
Dated:
----------------------------
ACCEPTED:
A I M DISTRIBUTORS, INC.
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Dated:
---------------------------------
Please sign both copies and return to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
<PAGE> 10
Shareholder Service Agreement Page 5
(Bank Trust Departments)
SCHEDULE A
Funds Fees
AIM Advisor Funds, Inc.
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 Equity Funds, Inc.
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Weingarten Fund (Retail Class)
AIM Aggressive Growth Fund*
AIM Funds Group
AIM Balanced Fund
AIM Global Utilities Fund
AIM Growth Fund
AIM High Yield Fund
AIM Income Fund
AIM Intermediate Government Fund
AIM Money Market Fund
AIM Municipal Bond Fund
AIM Value Fund
AIM International Funds, Inc.
AIM Asian Growth Fund
AIM European Development Fund
AIM Global Aggressive Growth Fund
AIM Global Growth Fund
AIM Global Income Fund
AIM International Equity Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund
AIM Tax-Exempt Funds, Inc.
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
- ----------
* Shares of AIM Aggressive Growth Fund may only be sold to current
shareholders who maintain open accounts in AIM Aggressive Growth Fund.
<PAGE> 1
EXHIBIT 18(b)
SECOND AMENDED AND RESTATED MULTIPLE CLASS PLAN
OF
THE AIM FAMILY OF FUNDS
1. This Second Amended and Restated Multiple Class Plan (the "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. CDSC - contingent deferred sales charge.
c. CDSC Period - the period of years following acquisition of
Shares during which such Shares may be assessed a CDSC upon
redemption.
d. Class - a class of Shares of a Fund representing an interest
in a Portfolio.
e. 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.
f. Class B Shares - shall mean those Shares designated as Class
B Shares in the Fund's organizing documents.
g. 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.
h. Directors - the directors or trustees of a 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.
k. Distributor - A I M Distributors, Inc. or Fund Management
Company, as applicable.
l. Fund - those investment companies advised by A I M Advisors,
Inc. which have adopted this Plan.
1
<PAGE> 2
m. Institutional Shares - shall mean Shares of a Fund
representing an interest in a Portfolio offered for sale to
institutional customers as may be approved by the Directors
from time to time and as set forth in the Fund's prospectus.
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 of or 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. Transfer Agency and Shareholder Recordkeeping Fees - Each
Class shall bear directly the transfer agency fees and
expenses and other shareholder recordkeeping fees and
expenses specifically attributable to that Class; provided,
however, that where two or more Classes of a Portfolio pay
such fees and/or expenses at the same rate or in the same
amount, those Classes shall bear proportionately such fees
and expenses based on the relative net assets attributable to
each such Class.
c. 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.
d. 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.
e. 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.
2
<PAGE> 3
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,
may be reduced or eliminated for certain money market fund
shares, 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. Although AIM Cash Reserve Shares, AIM Limited
Maturity Treasury Shares, AIM Tax-Free Intermediate Shares
and shares of AIM Tax-Exempt Bond Fund of Connecticut and AIM
Tax Exempt Cash Fund are not designated as "Class A", they
are substantially similar to Class A Shares as defined herein
and shall be deemed to be Class A Shares for the purposes of
this Plan.
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.
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. Institutional Shares. Institutional Shares shall be (i)
offered at net asset value, (ii) offered only to certain
categories of institutional customers as approved from time
to time by the Directors and as set forth in the Fund's
prospectus and (iii) may be subject to ongoing Service Fees
and/or Distribution Fees as approved from time to time by the
Directors and 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
18 months. 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.
3
<PAGE> 4
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.
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 sales charge
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 between
Funds as follows:
a. Class A Shares may be exchanged for Class A Shares of another
Portfolio, subject to certain limitations set forth in the
Fund's prospectus as it may be amended from time to time,
relevant portions of which are incorporated herein by this
reference.
b. Class B Shares may be exchanged for Class B Shares of another
Portfolio at their relative net asset value.
c. Class C Shares may be exchanged for Class C Shares of any
other Portfolio at their relative net asset value.
d. 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.
e. 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 in 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 of the
Act.
4
<PAGE> 5
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 9 above.
5
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Balanced Fund
Class A Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 1
<NAME> AIM BALANCED FUND CLASS A SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 972947165
<INVESTMENTS-AT-VALUE> 1169127780
<RECEIVABLES> 15759314
<ASSETS-OTHER> 54937
<OTHER-ITEMS-ASSETS> 93198
<TOTAL-ASSETS> 1185035229
<PAYABLE-FOR-SECURITIES> 1147975
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4355018
<TOTAL-LIABILITIES> 5502993
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 958373243
<SHARES-COMMON-STOCK> 45778308
<SHARES-COMMON-PRIOR> 26160848
<ACCUMULATED-NII-CURRENT> 19641775
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5338635
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 196178583
<NET-ASSETS> 1179532236
<DIVIDEND-INCOME> 6646446
<INTEREST-INCOME> 23898243
<OTHER-INCOME> 0
<EXPENSES-NET> (11528675)
<NET-INVESTMENT-INCOME> 19016014
<REALIZED-GAINS-CURRENT> 34831453
<APPREC-INCREASE-CURRENT> 134939011
<NET-CHANGE-FROM-OPS> 188786478
<EQUALIZATION> 8681162
<DISTRIBUTIONS-OF-INCOME> (18514982)
<DISTRIBUTIONS-OF-GAINS> (32611719)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25663545
<NUMBER-OF-SHARES-REDEEMED> (7981225)
<SHARES-REINVESTED> 1935140
<NET-CHANGE-IN-ASSETS> 608261242
<ACCUMULATED-NII-PRIOR> 10459581
<ACCUMULATED-GAINS-PRIOR> 3118901
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4789939
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11556602
<AVERAGE-NET-ASSETS> 530358031
<PER-SHARE-NAV-BEGIN> 21.84
<PER-SHARE-NII> .60
<PER-SHARE-GAIN-APPREC> 4.66
<PER-SHARE-DIVIDEND> (.55)
<PER-SHARE-DISTRIBUTIONS> (.77)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.78
<EXPENSE-RATIO> .98
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Balanced Fund
Class B Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 2
<NAME> AIM BALANCED FUND CLASS B SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 972947165
<INVESTMENTS-AT-VALUE> 1169127780
<RECEIVABLES> 15759314
<ASSETS-OTHER> 54937
<OTHER-ITEMS-ASSETS> 93198
<TOTAL-ASSETS> 1185035229
<PAYABLE-FOR-SECURITIES> 1147975
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4355018
<TOTAL-LIABILITIES> 5502993
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 958373243
<SHARES-COMMON-STOCK> 45778308
<SHARES-COMMON-PRIOR> 26160848
<ACCUMULATED-NII-CURRENT> 19641775
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5338635
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 196178583
<NET-ASSETS> 1179532236
<DIVIDEND-INCOME> 6646446
<INTEREST-INCOME> 23898243
<OTHER-INCOME> 0
<EXPENSES-NET> (11528675)
<NET-INVESTMENT-INCOME> 19016014
<REALIZED-GAINS-CURRENT> 34831453
<APPREC-INCREASE-CURRENT> 134939011
<NET-CHANGE-FROM-OPS> 188786478
<EQUALIZATION> 8681162
<DISTRIBUTIONS-OF-INCOME> (18514982)
<DISTRIBUTIONS-OF-GAINS> (32611719)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25663545
<NUMBER-OF-SHARES-REDEEMED> (7981225)
<SHARES-REINVESTED> 1935140
<NET-CHANGE-IN-ASSETS> 608261242
<ACCUMULATED-NII-PRIOR> 10459581
<ACCUMULATED-GAINS-PRIOR> 3118901
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4789939
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11556602
<AVERAGE-NET-ASSETS> 351722707
<PER-SHARE-NAV-BEGIN> 21.83
<PER-SHARE-NII> .38
<PER-SHARE-GAIN-APPREC> 4.68
<PER-SHARE-DIVIDEND> (.37)
<PER-SHARE-DISTRIBUTIONS> (.77)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.75
<EXPENSE-RATIO> 1.79
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Balanced Fund
Class C Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 3
<NAME> AIM BALANCED FUND CLASS C SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 972947165
<INVESTMENTS-AT-VALUE> 1169127780
<RECEIVABLES> 15759314
<ASSETS-OTHER> 54937
<OTHER-ITEMS-ASSETS> 93198
<TOTAL-ASSETS> 1185035229
<PAYABLE-FOR-SECURITIES> 1147975
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4355018
<TOTAL-LIABILITIES> 5502993
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 958373243
<SHARES-COMMON-STOCK> 45778308
<SHARES-COMMON-PRIOR> 26160848
<ACCUMULATED-NII-CURRENT> 19641775
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5338635
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 196178583
<NET-ASSETS> 1179532236
<DIVIDEND-INCOME> 6646446
<INTEREST-INCOME> 23898243
<OTHER-INCOME> 0
<EXPENSES-NET> (11528675)
<NET-INVESTMENT-INCOME> 19016014
<REALIZED-GAINS-CURRENT> 34831453
<APPREC-INCREASE-CURRENT> 134939011
<NET-CHANGE-FROM-OPS> 188786478
<EQUALIZATION> 8681162
<DISTRIBUTIONS-OF-INCOME> (18514982)
<DISTRIBUTIONS-OF-GAINS> (32611719)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25663545
<NUMBER-OF-SHARES-REDEEMED> (7981225)
<SHARES-REINVESTED> 1935140
<NET-CHANGE-IN-ASSETS> 608261242
<ACCUMULATED-NII-PRIOR> 10459581
<ACCUMULATED-GAINS-PRIOR> 3118901
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4789939
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11556602
<AVERAGE-NET-ASSETS> 3167605
<PER-SHARE-NAV-BEGIN> 25.55
<PER-SHARE-NII> .16
<PER-SHARE-GAIN-APPREC> 1.01
<PER-SHARE-DIVIDEND> (.19)
<PER-SHARE-DISTRIBUTIONS> (.77)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 25.76
<EXPENSE-RATIO> 1.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Global
Utilities Fund Class A Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 4
<NAME> AIM GLOBAL UTILITIES FUND CLASS A SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 185929099
<INVESTMENTS-AT-VALUE> 273517546
<RECEIVABLES> 3201826
<ASSETS-OTHER> 62950
<OTHER-ITEMS-ASSETS> 89034
<TOTAL-ASSETS> 276871356
<PAYABLE-FOR-SECURITIES> 210840
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1794222
<TOTAL-LIABILITIES> 2005062
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 186636908
<SHARES-COMMON-STOCK> 14276621
<SHARES-COMMON-PRIOR> 15212554
<ACCUMULATED-NII-CURRENT> 78008
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 567427
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 87583951
<NET-ASSETS> 274866294
<DIVIDEND-INCOME> 6525168
<INTEREST-INCOME> 3200225
<OTHER-INCOME> 0
<EXPENSES-NET> (3446394)
<NET-INVESTMENT-INCOME> 6278999
<REALIZED-GAINS-CURRENT> 10202494
<APPREC-INCREASE-CURRENT> 36469056
<NET-CHANGE-FROM-OPS> 52950549
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (6228471)
<DISTRIBUTIONS-OF-GAINS> (153200)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3545869
<NUMBER-OF-SHARES-REDEEMED> (4807084)
<SHARES-REINVESTED> 325282
<NET-CHANGE-IN-ASSETS> 31334815
<ACCUMULATED-NII-PRIOR> 112764
<ACCUMULATED-GAINS-PRIOR> (9567151)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1440692
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3450651
<AVERAGE-NET-ASSETS> 164764424
<PER-SHARE-NAV-BEGIN> 16.01
<PER-SHARE-NII> .47
<PER-SHARE-GAIN-APPREC> 3.26
<PER-SHARE-DIVIDEND> (.47)
<PER-SHARE-DISTRIBUTIONS> (.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.26
<EXPENSE-RATIO> 1.13
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Global
Utilities Fund Class B Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 5
<NAME> AIM GLOBAL UTILITIES FUND CLASS B SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 185929099
<INVESTMENTS-AT-VALUE> 273517546
<RECEIVABLES> 3201826
<ASSETS-OTHER> 62950
<OTHER-ITEMS-ASSETS> 89034
<TOTAL-ASSETS> 276871356
<PAYABLE-FOR-SECURITIES> 210840
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1794222
<TOTAL-LIABILITIES> 2005062
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 186636908
<SHARES-COMMON-STOCK> 14276621
<SHARES-COMMON-PRIOR> 15212554
<ACCUMULATED-NII-CURRENT> 78008
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 567427
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 87583951
<NET-ASSETS> 274866294
<DIVIDEND-INCOME> 6525168
<INTEREST-INCOME> 3200225
<OTHER-INCOME> 0
<EXPENSES-NET> (3446394)
<NET-INVESTMENT-INCOME> 6278999
<REALIZED-GAINS-CURRENT> 10202494
<APPREC-INCREASE-CURRENT> 36469056
<NET-CHANGE-FROM-OPS> 52950549
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (6228471)
<DISTRIBUTIONS-OF-GAINS> (153200)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3545869
<NUMBER-OF-SHARES-REDEEMED> (4807084)
<SHARES-REINVESTED> 325282
<NET-CHANGE-IN-ASSETS> 31334815
<ACCUMULATED-NII-PRIOR> 112764
<ACCUMULATED-GAINS-PRIOR> (9567151)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1440692
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3450651
<AVERAGE-NET-ASSETS> 83218352
<PER-SHARE-NAV-BEGIN> 16.01
<PER-SHARE-NII> .34
<PER-SHARE-GAIN-APPREC> 3.25
<PER-SHARE-DIVIDEND> (.35)
<PER-SHARE-DISTRIBUTIONS> (.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.24
<EXPENSE-RATIO> 1.91
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Global
Utilities Fund Class C Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 6
<NAME> AIM GLOBAL UTILITIES FUND CLASS C SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 185929099
<INVESTMENTS-AT-VALUE> 273517546
<RECEIVABLES> 3201826
<ASSETS-OTHER> 62950
<OTHER-ITEMS-ASSETS> 89034
<TOTAL-ASSETS> 276871356
<PAYABLE-FOR-SECURITIES> 210840
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1794222
<TOTAL-LIABILITIES> 2005062
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 186636908
<SHARES-COMMON-STOCK> 14276621
<SHARES-COMMON-PRIOR> 15212554
<ACCUMULATED-NII-CURRENT> 78008
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 567427
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 87583951
<NET-ASSETS> 274866294
<DIVIDEND-INCOME> 6525168
<INTEREST-INCOME> 3200225
<OTHER-INCOME> 0
<EXPENSES-NET> (3446394)
<NET-INVESTMENT-INCOME> 6278999
<REALIZED-GAINS-CURRENT> 10202494
<APPREC-INCREASE-CURRENT> 36469056
<NET-CHANGE-FROM-OPS> 52950549
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (6228471)
<DISTRIBUTIONS-OF-GAINS> (153200)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3545869
<NUMBER-OF-SHARES-REDEEMED> (4807084)
<SHARES-REINVESTED> 325282
<NET-CHANGE-IN-ASSETS> 31334815
<ACCUMULATED-NII-PRIOR> 112764
<ACCUMULATED-GAINS-PRIOR> (9567151)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1440692
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3450651
<AVERAGE-NET-ASSETS> 378512
<PER-SHARE-NAV-BEGIN> 17.67
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 1.58
<PER-SHARE-DIVIDEND> (.13)
<PER-SHARE-DISTRIBUTIONS> (.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.24
<EXPENSE-RATIO> 1.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Growth Fund
Class A Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 7
<NAME> AIM GROWTH FUND CLASS A SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 532736720
<INVESTMENTS-AT-VALUE> 651373137
<RECEIVABLES> 1406544
<ASSETS-OTHER> 83848
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 652863529
<PAYABLE-FOR-SECURITIES> 25404932
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3915680
<TOTAL-LIABILITIES> 29320612
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 499110813
<SHARES-COMMON-STOCK> 40850011
<SHARES-COMMON-PRIOR> 35019792
<ACCUMULATED-NII-CURRENT> (34200)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6119260
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 118347044
<NET-ASSETS> 623542917
<DIVIDEND-INCOME> 2818914
<INTEREST-INCOME> 4030884
<OTHER-INCOME> 0
<EXPENSES-NET> (9412698)
<NET-INVESTMENT-INCOME> (2562900)
<REALIZED-GAINS-CURRENT> 68573981
<APPREC-INCREASE-CURRENT> 29604019
<NET-CHANGE-FROM-OPS> 95615100
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (115803)
<DISTRIBUTIONS-OF-GAINS> (69453636)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 21671424
<NUMBER-OF-SHARES-REDEEMED> (20251325)
<SHARES-REINVESTED> 4410120
<NET-CHANGE-IN-ASSETS> 114853378
<ACCUMULATED-NII-PRIOR> 66315
<ACCUMULATED-GAINS-PRIOR> 6948040
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3901342
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9430673
<AVERAGE-NET-ASSETS> 253479200
<PER-SHARE-NAV-BEGIN> 14.78
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 2.82
<PER-SHARE-DIVIDEND> (.01)
<PER-SHARE-DISTRIBUTIONS> (1.93)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.67
<EXPENSE-RATIO> 1.13
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Growth Fund
Class B Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 8
<NAME> AIM GROWTH FUND CLASS B SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 532736720
<INVESTMENTS-AT-VALUE> 651373137
<RECEIVABLES> 1406544
<ASSETS-OTHER> 83848
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 652863529
<PAYABLE-FOR-SECURITIES> 25404932
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3915680
<TOTAL-LIABILITIES> 29320612
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 499110813
<SHARES-COMMON-STOCK> 40850011
<SHARES-COMMON-PRIOR> 35019792
<ACCUMULATED-NII-CURRENT> (34200)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6119260
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 118347044
<NET-ASSETS> 623542917
<DIVIDEND-INCOME> 2818914
<INTEREST-INCOME> 4030884
<OTHER-INCOME> 0
<EXPENSES-NET> (9412698)
<NET-INVESTMENT-INCOME> (2562900)
<REALIZED-GAINS-CURRENT> 68573981
<APPREC-INCREASE-CURRENT> 29604019
<NET-CHANGE-FROM-OPS> 95615100
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (115803)
<DISTRIBUTIONS-OF-GAINS> (69453636)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 21671424
<NUMBER-OF-SHARES-REDEEMED> (20251325)
<SHARES-REINVESTED> 4410120
<NET-CHANGE-IN-ASSETS> 114853378
<ACCUMULATED-NII-PRIOR> 66315
<ACCUMULATED-GAINS-PRIOR> 6948040
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3901342
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9430673
<AVERAGE-NET-ASSETS> 328478309
<PER-SHARE-NAV-BEGIN> 14.32
<PER-SHARE-NII> (.13)
<PER-SHARE-GAIN-APPREC> 2.72
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.93)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.98
<EXPENSE-RATIO> 1.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Growth Fund
Class C Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 9
<NAME> AIM GROWTH FUND CLASS C SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 532736720
<INVESTMENTS-AT-VALUE> 651373137
<RECEIVABLES> 1406544
<ASSETS-OTHER> 83848
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 652863529
<PAYABLE-FOR-SECURITIES> 25404932
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3915680
<TOTAL-LIABILITIES> 29320612
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 499110813
<SHARES-COMMON-STOCK> 40850011
<SHARES-COMMON-PRIOR> 35019792
<ACCUMULATED-NII-CURRENT> (34200)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6119260
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 118347044
<NET-ASSETS> 623542917
<DIVIDEND-INCOME> 2818914
<INTEREST-INCOME> 4030884
<OTHER-INCOME> 0
<EXPENSES-NET> (9412698)
<NET-INVESTMENT-INCOME> (2562900)
<REALIZED-GAINS-CURRENT> 68573981
<APPREC-INCREASE-CURRENT> 29604019
<NET-CHANGE-FROM-OPS> 95615100
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (115803)
<DISTRIBUTIONS-OF-GAINS> (69453636)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 21671424
<NUMBER-OF-SHARES-REDEEMED> (20251325)
<SHARES-REINVESTED> 4410120
<NET-CHANGE-IN-ASSETS> 114853378
<ACCUMULATED-NII-PRIOR> 66315
<ACCUMULATED-GAINS-PRIOR> 6948040
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3901342
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9430673
<AVERAGE-NET-ASSETS> 625699
<PER-SHARE-NAV-BEGIN> 17.65
<PER-SHARE-NII> (.04)
<PER-SHARE-GAIN-APPREC> (.70)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.93)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.98
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM High Yield
Fund Class A Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 10
<NAME> AIM HIGH YIELD FUND CLASS A SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 3268502635
<INVESTMENTS-AT-VALUE> 3410030124
<RECEIVABLES> 88295921
<ASSETS-OTHER> 157534
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3498483579
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 38154153
<TOTAL-LIABILITIES> 38154153
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3332603649
<SHARES-COMMON-STOCK> 340663405
<SHARES-COMMON-PRIOR> 236856784
<ACCUMULATED-NII-CURRENT> 4691600
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (18493312)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 141527489
<NET-ASSETS> 3460329426
<DIVIDEND-INCOME> 2764016
<INTEREST-INCOME> 279638436
<OTHER-INCOME> 0
<EXPENSES-NET> (35388588)
<NET-INVESTMENT-INCOME> 247013864
<REALIZED-GAINS-CURRENT> 62942651
<APPREC-INCREASE-CURRENT> 18112537
<NET-CHANGE-FROM-OPS> 328069052
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (245389246)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 170984550
<NUMBER-OF-SHARES-REDEEMED> (80785132)
<SHARES-REINVESTED> 13607203
<NET-CHANGE-IN-ASSETS> 1119295060
<ACCUMULATED-NII-PRIOR> 2868653
<ACCUMULATED-GAINS-PRIOR> (81237634)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 13632090
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 35613124
<AVERAGE-NET-ASSETS> 1479737639
<PER-SHARE-NAV-BEGIN> 9.88
<PER-SHARE-NII> .90
<PER-SHARE-GAIN-APPREC> .28
<PER-SHARE-DIVIDEND> (.90)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.16
<EXPENSE-RATIO> .90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM High Yield
Fund Class B Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 11
<NAME> AIM HIGH YIELD FUND CLASS B SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 3268502635
<INVESTMENTS-AT-VALUE> 3410030124
<RECEIVABLES> 88295921
<ASSETS-OTHER> 157534
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3498483579
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 38154153
<TOTAL-LIABILITIES> 38154153
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3332603649
<SHARES-COMMON-STOCK> 340663405
<SHARES-COMMON-PRIOR> 236856784
<ACCUMULATED-NII-CURRENT> 4691600
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (18493312)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 141527489
<NET-ASSETS> 3460329426
<DIVIDEND-INCOME> 2764016
<INTEREST-INCOME> 279638436
<OTHER-INCOME> 0
<EXPENSES-NET> (35388588)
<NET-INVESTMENT-INCOME> 247013864
<REALIZED-GAINS-CURRENT> 62942651
<APPREC-INCREASE-CURRENT> 18112537
<NET-CHANGE-FROM-OPS> 328069052
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (245389246)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 170984550
<NUMBER-OF-SHARES-REDEEMED> (80785132)
<SHARES-REINVESTED> 13607203
<NET-CHANGE-IN-ASSETS> 1119295060
<ACCUMULATED-NII-PRIOR> 2868653
<ACCUMULATED-GAINS-PRIOR> (81237634)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 13632090
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 35613124
<AVERAGE-NET-ASSETS> 1345322915
<PER-SHARE-NAV-BEGIN> 9.88
<PER-SHARE-NII> .83
<PER-SHARE-GAIN-APPREC> .28
<PER-SHARE-DIVIDEND> (.83)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.16
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM High Yield
Fund Class C Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 12
<NAME> AIM HIGH YIELD FUND CLASS C SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 3268502635
<INVESTMENTS-AT-VALUE> 3410030124
<RECEIVABLES> 88295921
<ASSETS-OTHER> 157534
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3498483579
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 38154153
<TOTAL-LIABILITIES> 38154153
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3332603649
<SHARES-COMMON-STOCK> 340663405
<SHARES-COMMON-PRIOR> 236856784
<ACCUMULATED-NII-CURRENT> 4691600
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (18493312)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 141527489
<NET-ASSETS> 3460329426
<DIVIDEND-INCOME> 2764016
<INTEREST-INCOME> 279638436
<OTHER-INCOME> 0
<EXPENSES-NET> (35388588)
<NET-INVESTMENT-INCOME> 247013864
<REALIZED-GAINS-CURRENT> 62942651
<APPREC-INCREASE-CURRENT> 18112537
<NET-CHANGE-FROM-OPS> 328069052
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (245389246)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 170984550
<NUMBER-OF-SHARES-REDEEMED> (80785132)
<SHARES-REINVESTED> 13607203
<NET-CHANGE-IN-ASSETS> 1119295060
<ACCUMULATED-NII-PRIOR> 2868653
<ACCUMULATED-GAINS-PRIOR> (81237634)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 13632090
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 35613124
<AVERAGE-NET-ASSETS> 10445598
<PER-SHARE-NAV-BEGIN> 10.04
<PER-SHARE-NII> .35
<PER-SHARE-GAIN-APPREC> .10
<PER-SHARE-DIVIDEND> (.35)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.14
<EXPENSE-RATIO> 1.68
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Income Fund
Class A Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 13
<NAME> AIM INCOME FUND CLASS A SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 435939899
<INVESTMENTS-AT-VALUE> 458712251
<RECEIVABLES> 12120511
<ASSETS-OTHER> 294227
<OTHER-ITEMS-ASSETS> 301263
<TOTAL-ASSETS> 471428252
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2398421
<TOTAL-LIABILITIES> 2398421
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 442016297
<SHARES-COMMON-STOCK> 54766358
<SHARES-COMMON-PRIOR> 45091836
<ACCUMULATED-NII-CURRENT> (296344)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2071114
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 25238764
<NET-ASSETS> 469029831
<DIVIDEND-INCOME> 807572
<INTEREST-INCOME> 29179932
<OTHER-INCOME> 0
<EXPENSES-NET> (4504133)
<NET-INVESTMENT-INCOME> 25483371
<REALIZED-GAINS-CURRENT> 10912543
<APPREC-INCREASE-CURRENT> 8736614
<NET-CHANGE-FROM-OPS> 45132528
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (24128185)
<DISTRIBUTIONS-OF-GAINS> (4780918)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 18899596
<NUMBER-OF-SHARES-REDEEMED> (11684672)
<SHARES-REINVESTED> 2459598
<NET-CHANGE-IN-ASSETS> 97503437
<ACCUMULATED-NII-PRIOR> 33129
<ACCUMULATED-GAINS-PRIOR> (5745170)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1801746
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4515867
<AVERAGE-NET-ASSETS> 299824848
<PER-SHARE-NAV-BEGIN> 8.24
<PER-SHARE-NII> .55
<PER-SHARE-GAIN-APPREC> .39
<PER-SHARE-DIVIDEND> (.52)
<PER-SHARE-DISTRIBUTIONS> (.09)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.57
<EXPENSE-RATIO> .94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Income Fund
Class B Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 14
<NAME> AIM INCOME FUND CLASS B SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 435939899
<INVESTMENTS-AT-VALUE> 458712251
<RECEIVABLES> 12120511
<ASSETS-OTHER> 294227
<OTHER-ITEMS-ASSETS> 301263
<TOTAL-ASSETS> 471428252
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2398421
<TOTAL-LIABILITIES> 2398421
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 442016297
<SHARES-COMMON-STOCK> 54766358
<SHARES-COMMON-PRIOR> 45091836
<ACCUMULATED-NII-CURRENT> (296344)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2071114
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 25238764
<NET-ASSETS> 469029831
<DIVIDEND-INCOME> 807572
<INTEREST-INCOME> 29179932
<OTHER-INCOME> 0
<EXPENSES-NET> (4504133)
<NET-INVESTMENT-INCOME> 25483371
<REALIZED-GAINS-CURRENT> 10912543
<APPREC-INCREASE-CURRENT> 8736614
<NET-CHANGE-FROM-OPS> 45132528
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (24128185)
<DISTRIBUTIONS-OF-GAINS> (4780918)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 18899596
<NUMBER-OF-SHARES-REDEEMED> (11684672)
<SHARES-REINVESTED> 2459598
<NET-CHANGE-IN-ASSETS> 97503437
<ACCUMULATED-NII-PRIOR> 33129
<ACCUMULATED-GAINS-PRIOR> (5745170)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1801746
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4515867
<AVERAGE-NET-ASSETS> 100307548
<PER-SHARE-NAV-BEGIN> 8.23
<PER-SHARE-NII> .48
<PER-SHARE-GAIN-APPREC> .38
<PER-SHARE-DIVIDEND> (.45)
<PER-SHARE-DISTRIBUTIONS> (.09)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.55
<EXPENSE-RATIO> 1.69
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Income Fund
Class C Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 15
<NAME> AIM INCOME FUND CLASS C SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 435939899
<INVESTMENTS-AT-VALUE> 458712251
<RECEIVABLES> 12120511
<ASSETS-OTHER> 294227
<OTHER-ITEMS-ASSETS> 301263
<TOTAL-ASSETS> 471428252
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2398421
<TOTAL-LIABILITIES> 2398421
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 442016297
<SHARES-COMMON-STOCK> 54766358
<SHARES-COMMON-PRIOR> 45091836
<ACCUMULATED-NII-CURRENT> (296344)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2071114
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 25238764
<NET-ASSETS> 469029831
<DIVIDEND-INCOME> 807572
<INTEREST-INCOME> 29179932
<OTHER-INCOME> 0
<EXPENSES-NET> (4504133)
<NET-INVESTMENT-INCOME> 25483371
<REALIZED-GAINS-CURRENT> 10912543
<APPREC-INCREASE-CURRENT> 8736614
<NET-CHANGE-FROM-OPS> 45132528
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (24128185)
<DISTRIBUTIONS-OF-GAINS> (4780918)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 18899596
<NUMBER-OF-SHARES-REDEEMED> (11684672)
<SHARES-REINVESTED> 2459598
<NET-CHANGE-IN-ASSETS> 97503437
<ACCUMULATED-NII-PRIOR> 33129
<ACCUMULATED-GAINS-PRIOR> (5745170)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1801746
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4515867
<AVERAGE-NET-ASSETS> 739696
<PER-SHARE-NAV-BEGIN> 8.38
<PER-SHARE-NII> .19
<PER-SHARE-GAIN-APPREC> .22
<PER-SHARE-DIVIDEND> (.16)
<PER-SHARE-DISTRIBUTIONS> (.09)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.54
<EXPENSE-RATIO> 1.69
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Intermediate
Government Fund Class A Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 16
<NAME> AIM INTERMEDIATE GOVERNMENT FUND CLASS A SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 290539341
<INVESTMENTS-AT-VALUE> 299543786
<RECEIVABLES> 4366342
<ASSETS-OTHER> 256669
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 304166797
<PAYABLE-FOR-SECURITIES> 44354688
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1268903
<TOTAL-LIABILITIES> 45623591
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 264984880
<SHARES-COMMON-STOCK> 27338671
<SHARES-COMMON-PRIOR> 27338496
<ACCUMULATED-NII-CURRENT> (32484)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (15413635)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9004445
<NET-ASSETS> 258543206
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 19191667
<OTHER-INCOME> 0
<EXPENSES-NET> (3328443)
<NET-INVESTMENT-INCOME> 15863224
<REALIZED-GAINS-CURRENT> (73291)
<APPREC-INCREASE-CURRENT> 4443700
<NET-CHANGE-FROM-OPS> 20233633
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (15190037)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (645815)
<NUMBER-OF-SHARES-SOLD> 11875893
<NUMBER-OF-SHARES-REDEEMED> (13180507)
<SHARES-REINVESTED> 1304789
<NET-CHANGE-IN-ASSETS> 4755765
<ACCUMULATED-NII-PRIOR> (19243)
<ACCUMULATED-GAINS-PRIOR> (16026772)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1174166
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3332064
<AVERAGE-NET-ASSETS> 162149081
<PER-SHARE-NAV-BEGIN> 9.28
<PER-SHARE-NII> .63
<PER-SHARE-GAIN-APPREC> .18
<PER-SHARE-DIVIDEND> (.61)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> (.02)
<PER-SHARE-NAV-END> 9.46
<EXPENSE-RATIO> 1.00
<AVG-DEBT-OUTSTANDING> 4432986
<AVG-DEBT-PER-SHARE> .25
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Intermediate
Government Fund Class B Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 17
<NAME> AIM INTERMEDIATE GOVERNMENT FUND CLASS B SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 290539341
<INVESTMENTS-AT-VALUE> 299543786
<RECEIVABLES> 4366342
<ASSETS-OTHER> 256669
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 304166797
<PAYABLE-FOR-SECURITIES> 44354688
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1268903
<TOTAL-LIABILITIES> 45623591
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 264984880
<SHARES-COMMON-STOCK> 27338671
<SHARES-COMMON-PRIOR> 27338496
<ACCUMULATED-NII-CURRENT> (32484)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (15413635)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9004445
<NET-ASSETS> 258543206
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 19191667
<OTHER-INCOME> 0
<EXPENSES-NET> (3328443)
<NET-INVESTMENT-INCOME> 15863224
<REALIZED-GAINS-CURRENT> (73291)
<APPREC-INCREASE-CURRENT> 4443700
<NET-CHANGE-FROM-OPS> 20233633
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (15190037)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (645815)
<NUMBER-OF-SHARES-SOLD> 11875893
<NUMBER-OF-SHARES-REDEEMED> (13180507)
<SHARES-REINVESTED> 1304789
<NET-CHANGE-IN-ASSETS> 4755765
<ACCUMULATED-NII-PRIOR> (19243)
<ACCUMULATED-GAINS-PRIOR> (16026772)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1174166
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3332064
<AVERAGE-NET-ASSETS> 81024662
<PER-SHARE-NAV-BEGIN> 9.28
<PER-SHARE-NII> .56
<PER-SHARE-GAIN-APPREC> .17
<PER-SHARE-DIVIDEND> (.53)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> (.02)
<PER-SHARE-NAV-END> 9.46
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 2215129
<AVG-DEBT-PER-SHARE> .25
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Intermediate
Government Fund Class C Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 18
<NAME> AIM INTERMEDIATE GOVERNMENT FUND CLASS C SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 290539341
<INVESTMENTS-AT-VALUE> 299543786
<RECEIVABLES> 4366342
<ASSETS-OTHER> 256669
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 304166797
<PAYABLE-FOR-SECURITIES> 44354688
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1268903
<TOTAL-LIABILITIES> 45623591
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 264984880
<SHARES-COMMON-STOCK> 27338671
<SHARES-COMMON-PRIOR> 27338496
<ACCUMULATED-NII-CURRENT> (32484)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (15413635)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9004445
<NET-ASSETS> 258543206
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 19191667
<OTHER-INCOME> 0
<EXPENSES-NET> (3328443)
<NET-INVESTMENT-INCOME> 15863224
<REALIZED-GAINS-CURRENT> (73291)
<APPREC-INCREASE-CURRENT> 4443700
<NET-CHANGE-FROM-OPS> 20233633
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (15190037)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (645815)
<NUMBER-OF-SHARES-SOLD> 11875893
<NUMBER-OF-SHARES-REDEEMED> (13180507)
<SHARES-REINVESTED> 1304789
<NET-CHANGE-IN-ASSETS> 4755765
<ACCUMULATED-NII-PRIOR> (19243)
<ACCUMULATED-GAINS-PRIOR> (16026772)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1174166
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3332064
<AVERAGE-NET-ASSETS> 931755
<PER-SHARE-NAV-BEGIN> 9.33
<PER-SHARE-NII> .24
<PER-SHARE-GAIN-APPREC> .10
<PER-SHARE-DIVIDEND> (.22)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> (.01)
<PER-SHARE-NAV-END> 9.44
<EXPENSE-RATIO> 1.76
<AVG-DEBT-OUTSTANDING> 25473
<AVG-DEBT-PER-SHARE> .26
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Money Market
Fund Class A Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 19
<NAME> AIM MONEY MARKET FUND CLASS A SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 739617128
<INVESTMENTS-AT-VALUE> 739617128
<RECEIVABLES> 126989902
<ASSETS-OTHER> 394487
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 867001517
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22527870
<TOTAL-LIABILITIES> 22527870
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 844439320
<SHARES-COMMON-STOCK> 844439320
<SHARES-COMMON-PRIOR> 694508415
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 34327
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 844473647
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 46694810
<OTHER-INCOME> 0
<EXPENSES-NET> (9667849)
<NET-INVESTMENT-INCOME> 37026961
<REALIZED-GAINS-CURRENT> 19347
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 37046308
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (37026961)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9492233135
<NUMBER-OF-SHARES-REDEEMED> 9373473398
<SHARES-REINVESTED> 31171168
<NET-CHANGE-IN-ASSETS> 149950252
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 14980
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4586148
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9677716
<AVERAGE-NET-ASSETS> 340257685
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Money Market
Fund Class B Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 20
<NAME> AIM MONEY MARKET FUND CLASS B SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 739617128
<INVESTMENTS-AT-VALUE> 739617128
<RECEIVABLES> 126989902
<ASSETS-OTHER> 394487
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 867001517
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22527870
<TOTAL-LIABILITIES> 22527870
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 844439320
<SHARES-COMMON-STOCK> 844439320
<SHARES-COMMON-PRIOR> 694508415
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 34327
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 844473647
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 46694810
<OTHER-INCOME> 0
<EXPENSES-NET> (9667849)
<NET-INVESTMENT-INCOME> 37026961
<REALIZED-GAINS-CURRENT> 19347
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 37046308
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (37026961)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9492233135
<NUMBER-OF-SHARES-REDEEMED> 9373473398
<SHARES-REINVESTED> 31171168
<NET-CHANGE-IN-ASSETS> 149950252
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 14980
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4586148
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9677716
<AVERAGE-NET-ASSETS> 119512069
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.04)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Money Market
Fund Class C Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 21
<NAME> AIM MONEY MARKET FUND CLASS C SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 739617128
<INVESTMENTS-AT-VALUE> 739617128
<RECEIVABLES> 126989902
<ASSETS-OTHER> 394487
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 867001517
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22527870
<TOTAL-LIABILITIES> 22527870
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 844439320
<SHARES-COMMON-STOCK> 844439320
<SHARES-COMMON-PRIOR> 694508415
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 34327
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 844473647
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 46694810
<OTHER-INCOME> 0
<EXPENSES-NET> (9667849)
<NET-INVESTMENT-INCOME> 37026961
<REALIZED-GAINS-CURRENT> 19347
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 37046308
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (37026961)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9492233135
<NUMBER-OF-SHARES-REDEEMED> 9373473398
<SHARES-REINVESTED> 31171168
<NET-CHANGE-IN-ASSETS> 149950252
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 14980
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4586148
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9677716
<AVERAGE-NET-ASSETS> 5256063
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.02)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Money Market
Fund AIM Cash Reserve Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 22
<NAME> AIM MONEY MARKET FUND AIM CASH RESERVE SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 739617128
<INVESTMENTS-AT-VALUE> 739617128
<RECEIVABLES> 126989902
<ASSETS-OTHER> 394487
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 867001517
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22527870
<TOTAL-LIABILITIES> 22527870
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 844439320
<SHARES-COMMON-STOCK> 844439320
<SHARES-COMMON-PRIOR> 694508415
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 34327
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 844473647
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 46694810
<OTHER-INCOME> 0
<EXPENSES-NET> (9667849)
<NET-INVESTMENT-INCOME> 37026961
<REALIZED-GAINS-CURRENT> 19347
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 37046308
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (37026961)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9492233135
<NUMBER-OF-SHARES-REDEEMED> 9373473398
<SHARES-REINVESTED> 31171168
<NET-CHANGE-IN-ASSETS> 149950252
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 14980
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4586148
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 9677716
<AVERAGE-NET-ASSETS> 372492695
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Municipal Bond
Fund Class A Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 23
<NAME> AIM MUNICIPAL BOND FUND CLASS A SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 331790903
<INVESTMENTS-AT-VALUE> 359123485
<RECEIVABLES> 7874185
<ASSETS-OTHER> 881096
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 367878766
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1399959
<TOTAL-LIABILITIES> 1399959
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 340696817
<SHARES-COMMON-STOCK> 43917067
<SHARES-COMMON-PRIOR> 38173078
<ACCUMULATED-NII-CURRENT> (71348)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1479244)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 27332582
<NET-ASSETS> 366478807
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 20118944
<OTHER-INCOME> 0
<EXPENSES-NET> (3300481)
<NET-INVESTMENT-INCOME> 16818463
<REALIZED-GAINS-CURRENT> 114781
<APPREC-INCREASE-CURRENT> 9751922
<NET-CHANGE-FROM-OPS> 26685166
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (16848487)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (172940)
<NUMBER-OF-SHARES-SOLD> 12511504
<NUMBER-OF-SHARES-REDEEMED> (7950680)
<SHARES-REINVESTED> 1183165
<NET-CHANGE-IN-ASSETS> 53897005
<ACCUMULATED-NII-PRIOR> (34765)
<ACCUMULATED-GAINS-PRIOR> (1594025)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1532157
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3305447
<AVERAGE-NET-ASSETS> 293030139
<PER-SHARE-NAV-BEGIN> 8.19
<PER-SHARE-NII> .42
<PER-SHARE-GAIN-APPREC> .16
<PER-SHARE-DIVIDEND> (.43)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.34
<EXPENSE-RATIO> .90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Municipal Bond
Fund Class B Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 24
<NAME> AIM MUNICIPAL BOND FUND CLASS B SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 331790903
<INVESTMENTS-AT-VALUE> 359123485
<RECEIVABLES> 7874185
<ASSETS-OTHER> 881096
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 367878766
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1399959
<TOTAL-LIABILITIES> 1399959
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 340696817
<SHARES-COMMON-STOCK> 43917067
<SHARES-COMMON-PRIOR> 38173078
<ACCUMULATED-NII-CURRENT> (71348)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1479244)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 27332582
<NET-ASSETS> 366478807
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 20118944
<OTHER-INCOME> 0
<EXPENSES-NET> (3300481)
<NET-INVESTMENT-INCOME> 16818463
<REALIZED-GAINS-CURRENT> 114781
<APPREC-INCREASE-CURRENT> 9751922
<NET-CHANGE-FROM-OPS> 26685166
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (16848487)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (172940)
<NUMBER-OF-SHARES-SOLD> 12511504
<NUMBER-OF-SHARES-REDEEMED> (7950680)
<SHARES-REINVESTED> 1183165
<NET-CHANGE-IN-ASSETS> 53897005
<ACCUMULATED-NII-PRIOR> (34765)
<ACCUMULATED-GAINS-PRIOR> (1594025)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1532157
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3305447
<AVERAGE-NET-ASSETS> 39861298
<PER-SHARE-NAV-BEGIN> 8.19
<PER-SHARE-NII> .36
<PER-SHARE-GAIN-APPREC> .17
<PER-SHARE-DIVIDEND> (.36)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.36
<EXPENSE-RATIO> 1.66
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Municipal Bond
Fund Class C Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 25
<NAME> AIM MUNICIPAL BOND FUND CLASS C SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 331790903
<INVESTMENTS-AT-VALUE> 359123485
<RECEIVABLES> 7874185
<ASSETS-OTHER> 881096
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 367878766
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1399959
<TOTAL-LIABILITIES> 1399959
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 340696817
<SHARES-COMMON-STOCK> 43917067
<SHARES-COMMON-PRIOR> 38173078
<ACCUMULATED-NII-CURRENT> (71348)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1479244)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 27332582
<NET-ASSETS> 366478807
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 20118944
<OTHER-INCOME> 0
<EXPENSES-NET> (3300481)
<NET-INVESTMENT-INCOME> 16818463
<REALIZED-GAINS-CURRENT> 114781
<APPREC-INCREASE-CURRENT> 9751922
<NET-CHANGE-FROM-OPS> 26685166
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (16848487)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (172940)
<NUMBER-OF-SHARES-SOLD> 12511504
<NUMBER-OF-SHARES-REDEEMED> (7950680)
<SHARES-REINVESTED> 1183165
<NET-CHANGE-IN-ASSETS> 53897005
<ACCUMULATED-NII-PRIOR> (34765)
<ACCUMULATED-GAINS-PRIOR> (1594025)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1532157
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3305447
<AVERAGE-NET-ASSETS> 367550
<PER-SHARE-NAV-BEGIN> 8.30
<PER-SHARE-NII> .15
<PER-SHARE-GAIN-APPREC> .04
<PER-SHARE-DIVIDEND> (.14)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.35
<EXPENSE-RATIO> 1.67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Value Fund
Class A Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 26
<NAME> AIM VALUE FUND CLASS A SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 11457991929
<INVESTMENTS-AT-VALUE> 13777866463
<RECEIVABLES> 113321523
<ASSETS-OTHER> 238109
<OTHER-ITEMS-ASSETS> 7683993
<TOTAL-ASSETS> 13899110088
<PAYABLE-FOR-SECURITIES> 233364138
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 55797439
<TOTAL-LIABILITIES> 289161577
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11116186261
<SHARES-COMMON-STOCK> 423334607
<SHARES-COMMON-PRIOR> 343576247
<ACCUMULATED-NII-CURRENT> 17752405
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 151380707
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2324629138
<NET-ASSETS> 13609948511
<DIVIDEND-INCOME> 147003956
<INTEREST-INCOME> 46029269
<OTHER-INCOME> 0
<EXPENSES-NET> (172718509)
<NET-INVESTMENT-INCOME> 20314716
<REALIZED-GAINS-CURRENT> 1450271721
<APPREC-INCREASE-CURRENT> 961987307
<NET-CHANGE-FROM-OPS> 2432573744
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7048371)
<DISTRIBUTIONS-OF-GAINS> (1377533581)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 102026336
<NUMBER-OF-SHARES-REDEEMED> (63504319)
<SHARES-REINVESTED> 41236343
<NET-CHANGE-IN-ASSETS> 3633954201
<ACCUMULATED-NII-PRIOR> 6940026
<ACCUMULATED-GAINS-PRIOR> 76188601
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 75312449
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 175480806
<AVERAGE-NET-ASSETS> 6039532925
<PER-SHARE-NAV-BEGIN> 29.15
<PER-SHARE-NII> .17
<PER-SHARE-GAIN-APPREC> 6.78
<PER-SHARE-DIVIDEND> (.04)
<PER-SHARE-DISTRIBUTIONS> (3.64)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 32.42
<EXPENSE-RATIO> 1.04
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Value Fund
Class B Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 27
<NAME> AIM VALUE FUND CLASS B SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 11457991929
<INVESTMENTS-AT-VALUE> 13777866463
<RECEIVABLES> 113321523
<ASSETS-OTHER> 238109
<OTHER-ITEMS-ASSETS> 7683993
<TOTAL-ASSETS> 13899110088
<PAYABLE-FOR-SECURITIES> 233364138
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 55797439
<TOTAL-LIABILITIES> 289161577
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11116186261
<SHARES-COMMON-STOCK> 423334607
<SHARES-COMMON-PRIOR> 343576247
<ACCUMULATED-NII-CURRENT> 17752405
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 151380707
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2324629138
<NET-ASSETS> 13609948511
<DIVIDEND-INCOME> 147003956
<INTEREST-INCOME> 46029269
<OTHER-INCOME> 0
<EXPENSES-NET> (172718509)
<NET-INVESTMENT-INCOME> 20314716
<REALIZED-GAINS-CURRENT> 1450271721
<APPREC-INCREASE-CURRENT> 961987307
<NET-CHANGE-FROM-OPS> 2432573744
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7048371)
<DISTRIBUTIONS-OF-GAINS> (1377533581)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 102026336
<NUMBER-OF-SHARES-REDEEMED> (63504319)
<SHARES-REINVESTED> 41236343
<NET-CHANGE-IN-ASSETS> 3633954201
<ACCUMULATED-NII-PRIOR> 6940026
<ACCUMULATED-GAINS-PRIOR> 76188601
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 75312449
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 175480806
<AVERAGE-NET-ASSETS> 5962133311
<PER-SHARE-NAV-BEGIN> 28.92
<PER-SHARE-NII> (.07)
<PER-SHARE-GAIN-APPREC> 6.68
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (3.64)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 31.89
<EXPENSE-RATIO> 1.85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information from the AIM Value Fund
Class C Shares December 31, 1997 annual report.
</LEGEND>
<CIK> 0000019034
<NAME> AIM FUNDS GROUP
<SERIES>
<NUMBER> 28
<NAME> AIM VALUE FUND CLASS C SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 11457991929
<INVESTMENTS-AT-VALUE> 13777866463
<RECEIVABLES> 113321523
<ASSETS-OTHER> 238109
<OTHER-ITEMS-ASSETS> 7683993
<TOTAL-ASSETS> 13899110088
<PAYABLE-FOR-SECURITIES> 233364138
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 55797439
<TOTAL-LIABILITIES> 289161577
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11116186261
<SHARES-COMMON-STOCK> 423334607
<SHARES-COMMON-PRIOR> 343576247
<ACCUMULATED-NII-CURRENT> 17752405
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 151380707
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2324629138
<NET-ASSETS> 13609948511
<DIVIDEND-INCOME> 147003956
<INTEREST-INCOME> 46029269
<OTHER-INCOME> 0
<EXPENSES-NET> (172718509)
<NET-INVESTMENT-INCOME> 20314716
<REALIZED-GAINS-CURRENT> 1450271721
<APPREC-INCREASE-CURRENT> 961987307
<NET-CHANGE-FROM-OPS> 2432573744
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7048371)
<DISTRIBUTIONS-OF-GAINS> (1377533581)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 102026336
<NUMBER-OF-SHARES-REDEEMED> (63504319)
<SHARES-REINVESTED> 41236343
<NET-CHANGE-IN-ASSETS> 3633954201
<ACCUMULATED-NII-PRIOR> 6940026
<ACCUMULATED-GAINS-PRIOR> 76188601
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 75312449
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 175480806
<AVERAGE-NET-ASSETS> 15391746
<PER-SHARE-NAV-BEGIN> 35.60
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> (.05)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (3.64)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 31.90
<EXPENSE-RATIO> 1.84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
