<PAGE> 1
As filed with the Securities and Exchange Commission on February 12, 1999
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. 75 X
--- ---
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
---
Amendment No. 75 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 3, 1999, 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
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion dated February 12, 1999
[AIM LOGO APPEARS HERE]
AIM BALANCED FUND
PROSPECTUS
MAY 3, 1999
AIM Balanced Fund seeks 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.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THE INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR
ACCURATE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES......................................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND.................................................................3
PERFORMANCE INFORMATION..................................................................................5
ANNUAL TOTAL RETURNS............................................................................5
PERFORMANCE TABLE...............................................................................6
FEE TABLE AND EXPENSE EXAMPLE............................................................................7
FEE TABLE.......................................................................................7
EXPENSE EXAMPLE.................................................................................7
FUND MANAGEMENT..........................................................................................9
THE ADVISOR.....................................................................................9
ADVISOR COMPENSATION............................................................................9
PORTFOLIO MANAGERS..............................................................................9
OTHER INFORMATION.......................................................................................10
INITIAL SALES CHARGES FOR CLASS A SHARES.......................................................10
DIVIDENDS AND DISTRIBUTIONS....................................................................10
FINANCIAL HIGHLIGHTS....................................................................................11
SHAREHOLDER INFORMATION................................................................................A-1
CHOOSING A SHARE CLASS............................................................................A-1
PURCHASING SHARES.................................................................................A-4
REDEEMING SHARES..................................................................................A-6
EXCHANGING SHARES.................................................................................A-9
PRICING OF SHARES................................................................................A-11
TAXES............................................................................................A-11
OBTAINING ADDITIONAL INFORMATION...........................................................BACK COVER PAGE
</TABLE>
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 5
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is 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.
The fund attempts to meet this objective by investing, normally, a minimum of
30% and a maximum of 70% of its total assets in equity securities and a minimum
of 30% and a maximum of 70% of its total assets in non-convertible debt
securities. The fund may also invest up to 25% of its total assets in
convertible securities. The fund may invest up to 10% of its total assets in
high-yield debt securities rated below investment grade, i.e., "junk bonds,"
and debt securities deemed of comparable quality. The fund may also invest up
to 20% of its total assets in foreign securities.
In selecting the percentages of assets to be invested in equity or debt
securities, the fund's portfolio managers consider such factors as general
market and economic conditions, as well as trends, yields, interest rates and
changes in fiscal and monetary policies. The fund's portfolio managers will
primarily purchase equity securities for growth of capital and debt securities
for income purposes. However, the portfolio managers will focus on companies
whose securities have the potential for both capital appreciation and income
generation. The fund's portfolio managers usually sell a particular security
when they believe that security no longer has that potential.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash,
money market securities, bonds or other debt securities. As a result, the fund
may not achieve its investment objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from the fund may vary. The value of
your investment in the fund will go up and down with the prices of the
securities in which the fund invests. The price of equity securities goes up
and down in response to many factors, including the historical and prospective
earnings of the issuer, the value of its assets, general economic conditions,
interest rates, investor perceptions and market liquidity. Interest rate
increases may cause the price of a debt security to decrease; the longer the
debt security's duration, the more sensitive it is to this risk. The issuer of
a security may default or otherwise be unable to honor a financial obligation.
The values of convertible securities in which the fund invests may also be
affected by market interest rates, the risk that the issuer may default on
interest or principal payments and the value of the underlying stock into which
these securities may be converted. Specifically, since these types of
convertible securities pay fixed interest or dividends, their values may fall
if interest rates rise. Additionally, an issuer may have the right to buy back
certain of the convertible securities at a time and at a price that is
unfavorable to the fund.
The fund may also invest in foreign securities, which have additional risks,
including exchange rate changes, political and economic upheaval, the relative
lack of information about these companies, relatively low market liquidity and
the potential lack of strict financial and accounting controls and standards.
[If the seller of a repurchase agreement in which the fund invests defaults on
its obligation or declares bankruptcy, the fund may experience delays in
selling the securities underlying the repurchase agreement. As a result, the
fund may incur losses arising from decline in the value of those securities,
reduced levels of income and expenses of enforcing its rights.]
The fund could be adversely affected if the computer systems used by the fund's
investment advisor and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
3
<PAGE> 6
The fund's investment advisor and independent technology consultants are
working to avoid year 2000-related problems in its systems and to obtain
assurances from other service providers that they are taking similar steps. In
addition, issuers of securities in which the fund invests may be adversely
affected by year 2000-related problems. This could have an impact on the value
of the fund's investments and its share price.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
4
<PAGE> 7
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class A
shares from year to year. The bar chart does not reflect sales loads. If it
did, the annual total returns shown would be lower.
AIM BALANCED FUND
<TABLE>
<CAPTION>
[GRAPH]
YEAR RETURN(%)
---- ----------
<S> <C>
1989............................... 14.84%
1990............................... (4.00)%
1991............................... 42.95%
1992............................... 9.64%
1993............................... 15.54%
1994............................... (5.44)%
1995............................... 34.97%
1996............................... 19.25%
1997............................... 24.41%
1998............................... 12.46%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
16.88% (quarter ended March 31, 1991) and the lowest quarterly return was
- -16.57% (quarter ended September 30, 1990).
5
<PAGE> 8
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
==========================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years 10 Years Inception Date
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A 7.10% 15.20% 15.01% 11.92% 03/30/78
- ----------------------------------------------------------------------------------------------------------
Class B 6.53% 15.15% -- 13.90% 10/18/93
- ----------------------------------------------------------------------------------------------------------
Class C 10.60% -- -- 11.67% 08/04/97
- ----------------------------------------------------------------------------------------------------------
S&P 500(1) 28.60% 24.08% 19.20% 17.70%(2) 03/31/78(2)
==========================================================================================================
</TABLE>
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks
frequently used as a general measure of U.S. stock market performance.
(2) [The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.]
6
<PAGE> 9
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
Shareholder Fees (fees paid directly from your investment)
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
Management Fees [0.54%] [0.54%] [0.54%]
Distribution and/or Service (12b-1) Fees [0.25] [1.00] [1.00]
Other Expenses [0.19] [0.25] [0.25]
Total Annual Fund Operating Expenses [0.98] [1.79] [1.79]
===== ===== =====
</TABLE>
- ----------------------
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in
different classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that
the fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
7
<PAGE> 10
FUND MANAGEMENT
THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
is responsible for its day-to-day management. The advisor is located at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises
all aspects of the fund's operations and provides investment advisory services
to the fund, including obtaining and evaluating economic, statistical and
financial information to formulate and implement investment programs for the
fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of [0.54]% of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio, all of whom are officers of A I M Capital Management,
Inc., a wholly owned subsidiary of the advisor, are
o Claude C. Cody IV, Senior Portfolio Manager, who has been responsible
for the fund since 1993 and has been associated with the advisor
and/or its affiliates since 1992.
o Robert G. Alley, Senior Portfolio Manager, who has been responsible
for the fund since 1993 and has been associated with the advisor
and/or its affiliates since 1992.
o Craig A. Smith, Portfolio Manager, who has been responsible for the
fund since 1996 and has been associated with the advisor and/or its
affiliates since 1989.
o Carolyn L. Gibbs, Senior Portfolio Manager, who has been responsible
for the fund since 1998 and has been associated with the advisor
and/or its affiliates since 1992.
o Meggan M. Walsh, Portfolio Manager, who has been responsible for the
fund since 1998 and has been associated with the advisor and/or its
affiliates since 1991.
8
<PAGE> 11
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 4.75%
initial sales charge as listed under the heading "CATEGORY II Initial Sales
Charges" in the "Shareholder Information--Choosing a Share Class" section of
this prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares and pays dividends, if any, quarterly.
Capital Gains Distributions
The fund generally distributes long-term and short-term capital gains
(including any net gains from foreign currency transactions), if any, annually.
9
<PAGE> 12
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the
fund's financial statements, is included in the fund's annual report, which is
available upon request.
<TABLE>
<CAPTION>
Class A Year Ended December 31
- ------- ----------------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- -------- --------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
-------- -------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx
-------- -------- -------- -------- --------
Ratio of expenses to average net assets (b) x.xx% (c) x.xx% x.xx% x.xx% x.xx%
-------- -------- -------- -------- --------
Ratio of net investment income (loss) to average net assets (d) (x.xx)%(c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
-------- -------- -------- -------- --------
Portfolio turnover rate xx% xx% xx% xx% xx%
-------- -------- -------- -------- --------
</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
[X.XX%, X.XX%, X.XX%, X.XX%, and X.XX% for 1998-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1998-1995.]
10
<PAGE> 13
<TABLE>
<CAPTION>
Class B Year Ended December 31,
- ------- ----------------------------------------------------------------
1998 1997 1996 1995 1994
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
-------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
-------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx% x.xx% x.xx% x.xx%
-------- ------- ------- ------- -------
Ratio of net investment income (loss) to average net assets(e) (x.xx)% (c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
-------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
-------- ------- ------- ------- -------
</TABLE>
(a) Does not deduct contingent deferred 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
[X.XX%, X.XX%, and X.XX%, respectively for 1997-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1997-1995.]
<TABLE>
<CAPTION>
Year For the Period
Ended August 4, through
Class C December 31, December 31,
- ------- 1998 1997
--------------------------------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
------------ ------------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)
------------ ------------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
------------ ------------
Total from investment operations (x.xx) (x.xx)
------------ ------------
Distributions from net realized gains (x.xx) (x.xx)
------------ ------------
Net asset value, end of period $ xx.xx $ xx.xx
------------ ------------
Total return (a) (x.xx)% (x.xx)%
------------ ------------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx
------------ ------------
Ratio of expenses to average net assets (b) x.xx%(c)(d) x.xx%
------------ ------------
Ratio of net investment income (loss) to average net assets (e) (x.xx)%(c)
------------ ------------
Portfolio turnover rate xx% xx%
------------ ------------
</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 net assets prior to fee waivers and/or expense reimbursements [is
X.XX% (annualized).]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements [is (X.XX)% (annualized).]
11
<PAGE> 14
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 15
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 16
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 17
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 18
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 19
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 20
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 21
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. 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.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 22
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 23
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and
semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov) or by sending a letter, including a duplicating fee, to
the SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call
the SEC at 1-800- SEC-0330 for information about the Public Reference Room.
AIM Balanced Fund
SEC 1940 Act file number: 811-1540
<PAGE> 24
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Subject to Completion dated February 12, 1999
[AIM LOGO APPEARS HERE]
AIM GLOBAL UTILITIES FUND
PROSPECTUS
MAY 3, 1999
AIM Global Utilities Fund seeks to achieve a high level of current income and
secondarily, growth of capital, by investing primarily in the common and
preferred stocks of public utility companies.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THE INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR
ACCURATE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
1
<PAGE> 25
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INVESTMENT OBJECTIVES AND STRATEGIES.....................................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND.................................................................3
PERFORMANCE INFORMATION..................................................................................5
ANNUAL TOTAL RETURNS............................................................................5
PERFORMANCE TABLE...............................................................................6
FEE TABLE AND EXPENSE EXAMPLE............................................................................7
FEE TABLE.......................................................................................7
EXPENSE EXAMPLE.................................................................................7
FUND MANAGEMENT..........................................................................................8
THE ADVISOR.....................................................................................8
ADVISOR COMPENSATION............................................................................8
PORTFOLIO MANAGERS..............................................................................8
OTHER INFORMATION........................................................................................9
INITIAL SALES CHARGES FOR CLASS A SHARES........................................................9
DIVIDENDS AND DISTRIBUTIONS.....................................................................9
FINANCIAL HIGHLIGHTS....................................................................................10
SHAREHOLDER INFORMATION................................................................................A-1
CHOOSING A SHARE CLASS............................................................................A-1
PURCHASING SHARES.................................................................................A-4
REDEEMING SHARES..................................................................................A-6
EXCHANGING SHARES.................................................................................A-9
PRICING OF SHARES................................................................................A-11
TAXES............................................................................................A-11
OBTAINING ADDITIONAL INFORMATION...........................................................BACK COVER PAGE
</TABLE>
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 26
INVESTMENT OBJECTIVES AND STRATEGIES
The fund's investment objectives are to achieve a high level of current income
and secondarily, growth of capital, by investing primarily in the common and
preferred stocks of public utility companies.
The fund attempts to meet these objectives by investing, normally, at least 65%
of its total assets in securities of domestic and foreign public utility
companies. Public utility companies include companies that provide electricity,
natural gas, water and sanitary services to the public, 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.
The fund may invest up to 80% of its total assets in foreign securities,
including securities of issuers located in developing countries. Developing
countries are those countries that are in the initial stages of their industrial
cycles. The fund will normally invest in the securities of companies located in
at least four different countries, including the United States. The fund may
invest up to 25% of its total assets in convertible securities of public utility
companies. The fund may also invest up to 25% of its total assets in public
utility company non-convertible bonds. The fund may invest up to 10% of its
total assets in lower-quality debt securities, i.e., "junk bonds," and debt
securities deemed of comparable quality.
The fund's portfolio managers focus on securities that have favorable prospects
for high current income and growth of capital. The fund's portfolio managers
usually sell a particular security when any of those factors materially changes.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may invest up to 100% of its total assets in
securities of U.S. issuers. During these periods, the fund may also hold all or
a portion of its assets in cash, money market securities, bonds or other debt
securities. As a result, the fund may not achieve its investment objectives.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from the fund may vary. The value of
your investment in the fund will go up and down with the prices of the
securities in which the fund invests. The price of equity securities goes up and
down in response to many factors, including the historical and prospective
earnings of the issuer, the value of its assets, general economic conditions,
interest rates, investor perceptions and market liquidity. Interest rate
increases may cause the price of a debt security to decrease; the longer a debt
security's duration, the more sensitive it is to this risk. The issuer of a
security may default or otherwise be unable to honor a financial obligation.
The value of the fund's shares is particularly vulnerable to factors affecting
the utility company industry, such as substantial economic, operational, or
regulatory changes. Such changes may, among other things, increase compliance
costs or the costs of doing business. In addition, increases in fuel, energy and
other prices have historically limited the growth potential of utility
companies. Because the fund focuses its investments in the public utility
industry, the value of your shares may rise and fall more than the value of
shares of a fund that invests more broadly.
The prices of foreign securities may be further affected by other factors
including:
o Currency exchange rates--The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and
the currencies in which those investments are valued.
3
<PAGE> 27
o Political and economic conditions--The value of the fund's foreign
investments may be adversely affected by political and social instability
in other countries and by changes in economic or taxation policies in those
countries.
o Regulations--Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, among other things, there generally is less
publicly available information about foreign companies than about U.S.
companies.
o Markets--The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less
liquid and more volatile than U.S. securities.
These factors may affect the prices of securities issued by foreign companies
located in developing countries more than those in countries with mature
economies. For example, many developing countries have, in the past, experienced
high rates of inflation or sharply devalued their currencies against the U.S.
dollar, thereby causing the value of investments in companies located in those
countries to decline. Transaction costs are often higher in developing countries
and there may be delays in settlement procedures. In addition, developing
countries may have greater political and economic instability, less regulation
and smaller, less liquid and more volatile markets than countries with more
mature economies.
The fund could be adversely affected if the computer systems used by the fund's
investment advisor and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances from
other service providers that they are taking similar steps. In addition, issuers
of securities in which the fund invests may be adversely affected by year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
4
<PAGE> 28
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class A
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
AIM GLOBAL UTILITIES FUND
<TABLE>
<CAPTION>
[GRAPH]
Year Return %
---- --------
<S> <C>
1989 ............................................ 36.11%
1990 ............................................ (2.99)%
1991 ............................................ 23.65%
1992 ............................................ 7.92%
1993 ............................................ 12.32%
1994 ............................................ (11.57)%
1995 ............................................ 28.07%
1996 ............................................ 13.88%
1997 ............................................ 23.71%
1998 ............................................ 16.01%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
12.84% (quarter ended December 31, 1998) and the lowest quarterly return was
- -8.95% (quarter ended September 30, 1990).
5
<PAGE> 29
PERFORMANCE TABLE
The following performance table compares the fund's average performance to that
of a broad-based securities market index.
<TABLE>
<CAPTION>
====================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years 10 Years Inception Date
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A 9.63% 11.83% 13.22% 13.60% 01/18/88
- ----------------------------------------------------------------------------------------------------
Class B 10.14% 11.97% -- 10.16% 09/01/93
- ----------------------------------------------------------------------------------------------------
Class C 14.09% -- -- 18.04% 08/04/97
- ----------------------------------------------------------------------------------------------------
Lipper Utility Fund Index(1) 18.40% 13.41% 13.49% -- 12/30/88
====================================================================================================
</TABLE>
1 The Lipper Utility Fund Index is an unmanaged index. It is an average of
the performance of the 30 largest utilities funds charted by Lipper, Inc.,
an independent mutual funds performance monitor.
[2 The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.]
6
<PAGE> 30
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 5.50% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)
Management Fees [0.58%] [0.58%] [0.58%]
Distribution and/or Service (12b-1) Fees [0.25] [1.00] [1.00]
Other Expenses [0.30] [0.33] [0.33]
Total Annual Fund Operating Expenses [1.13] [1.91] [1.91]
====== ====== ======
</TABLE>
- ------------
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
7
<PAGE> 31
FUND MANAGEMENT
THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
is responsible for its day-to-day management. The advisor is located at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all
aspects of the fund's operations and provides investment advisory services to
the fund, including obtaining and evaluating economic, statistical and financial
information to formulate and implement investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the the advisor received
compensation of [0.58]% of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio, all of whom are officers of A I M Capital Management,
Inc., a wholly owned subsidiary of the advisor, are
o Claude C. Cody IV, Senior Portfolio Manager, who has been responsible
for the fund since 1992 and has been associated with the advisor and/or
its affiliates since 1992.
o Robert G. Alley, Senior Portfolio Manager, who has been responsible for
the fund since 1992 and has been associated with the advisor and/or its
affiliates since 1992.
o Craig A. Smith, Portfolio Manager, who has been responsible for the
fund since 1996 and has been associated with the advisor and/or its
affiliates since 1989.
o Meggan M. Walsh, Portfolio Manager, who has been responsible for the
fund since 1998 and has been associated with the advisor and/or its
affiliates since 1991.
o Carolyn L. Gibbs, Senior Portfolio Manager, who has been responsible
for the fund since 1998 and has been associated with the advisor and/or
its affiliates since 1992.
8
<PAGE> 32
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 5.50% initial
sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in
the "Shareholder Information--Choosing a Share Class" section of this
prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares dividends daily and pays dividends, if any, monthly.
Capital Gains Distributions
The fund generally distributes long-term and short-term capital gains (including
any net gains from foreign currency transactions), if any, annually.
9
<PAGE> 33
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the
fund's financial statements, is included in the fund's annual report, which is
available upon request.
<TABLE>
<CAPTION>
Class A Year Ended December 31,
- ------- -----------------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to average net assets(d) (x.xx)% (c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</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
[X.XX%, X.XX%, X.XX%, X.XX%, and X.XX% for 1998-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1998-1995.]
10
<PAGE> 34
<TABLE>
<CAPTION>
Class B Year Ended December 31,
- ------- ------------------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to average net assets (e) (x.xx)% (c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</TABLE>
(a) Does not deduct contingent deferred 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
[X.XX%, X.XX%, and X.XX%, respectively for 1997-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1997-1995.]
<TABLE>
<CAPTION>
Year For the Period
Ended August 4, through
Class C December 31, December 31,
- ------- 1998 1997
------------ -----------------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
-------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)
-------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
-------- --------
Total from investment operations (x.xx) (x.xx)
-------- --------
Distributions from net realized gains (x.xx) (x.xx)
-------- --------
Net asset value, end of period $ xx.xx $ xx.xx
-------- --------
Total return (a) (x.xx)% (x.xx)%
-------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx
-------- --------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx%
-------- --------
Ratio of net investment income (loss) to average net assets (e) (x.xx)%(c) (x.xx)%
-------- --------
Portfolio turnover rate xx% xx%
-------- --------
</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 net assets prior to fee waivers and/or expense reimbursements [is
X.XX% (annualized).]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements [is (X.XX)% (annualized).]
11
<PAGE> 35
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 36
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 37
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 38
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 39
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 40
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 41
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 42
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. 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.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 43
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 44
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and
semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov) or by sending a letter, including a duplicating fee, to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the SEC
at 1-800-SEC-0330 for information about the Public Reference Room.
AIM Global Utilities Fund
SEC 1940 Act file number: 811-1540
<PAGE> 45
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Subject to Completion dated February 12, 1999
[AIM LOGO APPEARS HERE]
AIM HIGH YIELD FUND
PROSPECTUS
MAY 3, 1999
AIM High Yield Fund seeks to achieve a high level of current income by investing
primarily in publicly traded non-investment grade debt securities.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THE INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR ACCURATE. ANYONE
WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
1
<PAGE> 46
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES.......................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND..................................................3
PERFORMANCE INFORMATION...................................................................4
ANNUAL TOTAL RETURNS.............................................................4
PERFORMANCE TABLE................................................................5
FEE TABLE AND EXPENSE EXAMPLE.............................................................6
FEE TABLE........................................................................6
EXPENSE EXAMPLE..................................................................6
FUND MANAGEMENT...........................................................................7
THE ADVISOR......................................................................7
ADVISOR COMPENSATION.............................................................7
PORTFOLIO MANAGERS...............................................................7
OTHER INFORMATION.........................................................................8
INITIAL SALES CHARGES FOR CLASS A SHARES.........................................8
DIVIDENDS AND DISTRIBUTIONS......................................................8
FINANCIAL HIGHLIGHTS......................................................................9
SHAREHOLDER INFORMATION.................................................................A-1
CHOOSING A SHARE CLASS.........................................................A-1
PURCHASING SHARES..............................................................A-4
REDEEMING SHARES...............................................................A-6
EXCHANGING SHARES..............................................................A-9
PRICING OF SHARES ............................................................A-11
TAXES.........................................................................A-11
OBTAINING ADDITIONAL INFORMATION............................................BACK COVER PAGE
</TABLE>
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 47
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is to achieve a high level of current income by
investing primarily in publicly traded, non-investment grade debt securities.
The fund's investment objective may be changed by the fund's Board of Trustees
without shareholder approval.
The fund attempts to meet this objective by investing at least 65% of its total
assets in lower-quality debt securities, i.e., "junk bonds," including bonds
rated below B or deemed of comparable quality. The fund will invest at least 80%
of its total assets in debt securities, including convertible debt securities,
and/or cash or cash equivalents. The fund may also invest in preferred stock.
The fund may invest up to 25% of its total assets in foreign securities.
Although the fund's portfolio managers focus on debt securities that they
believe have favorable prospects for high current income, they also consider the
possibility of growth of capital of the security. The fund's portfolio managers
usually sell a particular security when any of those factors materially changes.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash,
money market securities, bonds or other debt securities. As a result, the fund
may not achieve its investment objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from your investment may vary. The
value of your investment in the fund will go up and down with the prices of the
securities in which the fund invests.
Compared to higher-quality debt securities, junk bonds involve greater risk of
default or price changes due to changes in the credit quality of the issuer
because they are generally unsecured and may be subordinated to other creditors'
claims. The value of junk bonds often fluctuates in response to company,
political or economic developments and can decline significantly over short
periods of time or during periods of general or regional economic difficulty.
During those times, the bonds could be difficult to value or to sell at a fair
price. Credit ratings on junk bonds do not necessarily reflect their actual
market risk.
Debt securities are particularly vulnerable to credit risk and interest rate
fluctuations. When interest rates rise, bond prices fall; lower quality bonds
are less sensitive to this risk than higher quality bonds.
Foreign securities have additional risks, including exchange rate changes,
political and economic upheaval, the relative lack of information about issuers,
relatively low market liquidity and the potential lack of strict financial and
accounting controls and standards.
[If the seller of a repurchase agreement in which the fund invests defaults on
its obligation or declares bankruptcy, the fund may experience delays in selling
the securities underlying the repurchase agreement. As a result, the fund may
incur losses arising from decline in the value of those securities, reduced
levels of income and expenses of enforcing its rights.]
The fund could be adversely affected if the computer systems used by the fund's
investment advisor and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000- related problems in its systems and to obtain assurances
from other service providers that they are taking similar steps. In addition,
issuers of securities in which the fund invests may be adversely affected by
year 2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
3
<PAGE> 48
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class A
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
AIM HIGH YIELD FUND
<TABLE>
<CAPTION>
[GRAPH]
Year Return %
---- --------
<S> <C>
1989 .................... 1.18%
1990 .................... (9.04)%
1991 .................... 42.50%
1992 .................... 18.34%
1993 .................... 18.40%
1994 .................... (1.68)%
1995 .................... 16.86%
1996 .................... 15.44%
1997 .................... 12.52%
1998 .................... (5.10)%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
14.35% (quarter ended March 31, 1991) and the lowest quarterly return was -9.71%
(quarter ended September 30, 1990).
4
<PAGE> 49
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
============================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years 10 Years Inception Date
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Class A (9.63)% 6.17% 9.50% 10.65% 06/08/78
- ------------------------------------------------------------------------------------------------------------
Class B (10.22)% 6.11% -- 6.63% 09/01/93
- ------------------------------------------------------------------------------------------------------------
Class C (6.78)% -- -- (1.21)% 08/04/97
- ------------------------------------------------------------------------------------------------------------
Lehman High Yield Index(1) 1.60% 8.52% 10.52% 11.43%(2) 06/30/83(2)
============================================================================================================
</TABLE>
(1) The Lehman High Yield Index is a rules-based index that includes all
fixed-income securities having a maximum quality rating of Ba1 (including
defaulted issues), a minimum amount outstanding of $100mm, and at least one
year to maturity.
(2) [The average annual total return given is since the earliest date the index
became available.]
5
<PAGE> 50
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)
Management Fees [0.48%] [0.48%] [0.48%]
Distribution and/or Service (12b-1) Fees [0.25] [1.00] [1.00]
Other Expenses [0.17] [0.17] [0.17]
Total Annual Fund Operating Expenses [0.90] [1.65] [1.65]
====== ====== ======
</TABLE>
- ----------
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
6
<PAGE> 51
FUND MANAGEMENT
THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
is responsible for its day-to-day management. The advisor is located at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all
aspects of the fund's operations and provides investment advisory services to
the fund, including obtaining and evaluating economic, statistical and financial
information to formulate and implement investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of [0.48]% of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio, all of whom are officers of A I M Capital Management,
Inc., a wholly owned subsidiary of the advisor, are
o John L. Pessarra, Senior Portfolio Manager, who has been responsible for
the fund since 1992 and has been associated with the advisor and/or its
affiliates since 1990.
o Kevin E. Rogers, Senior Portfolio Manager, who has been responsible for the
fund since 1995 and has been associated with the advisor and/or its
affiliates since 1991.
7
<PAGE> 52
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 4.75% initial
sales charge as listed under the heading "CATEGORY II Initial Sales Charges" in
the "Shareholder Information--Choosing a Share Class" section of this
prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares any dividends daily and pays dividends monthly.
Capital Gains Distributions
The fund generally distributes long-term and short-term capital gains (including
any net gains from foreign currency transactions), if any, annually.
8
<PAGE> 53
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the
fund's financial statements, is included in the fund's annual report, which is
available upon request.
<TABLE>
<CAPTION>
Class A Year Ended December 31,
- ------- --------------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
---------- ---------- ---------- ---------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- --------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- --------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- --------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
---------- ---------- ---------- ---------- --------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
---------- ---------- ---------- ---------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx
---------- ---------- ---------- ---------- --------
Ratio of expenses to average net assets (b) x.xx%(c) x.xx% x.xx% x.xx% x.xx%
---------- ---------- ---------- ---------- --------
Ratio of net investment income (loss) to average
net assets (d) (x.xx)%(c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
---------- ---------- ---------- ---------- --------
Portfolio turnover rate xx% xx% xx% xx% xx%
---------- ---------- ---------- ---------- --------
</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
[X.XX%, X.XX%, X.XX%, X.XX%, and X.XX% for 1998-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1998-1995.]
9
<PAGE> 54
<TABLE>
<CAPTION>
Class B Year Ended December 31,
- ------- -------------------------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
-------- -------- -------- -------- --------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
-------- -------- -------- -------- --------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
-------- -------- -------- -------- --------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx
-------- -------- -------- -------- --------
Ratio of expenses to average net assets (b) x.xx%(c)(d) x.xx% x.xx% x.xx% x.xx%
-------- -------- -------- -------- --------
Ratio of net investment income (loss) to average
net assets (e) (x.xx)%(c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
-------- -------- -------- -------- --------
Portfolio turnover rate xx% xx% xx% xx% xx%
-------- -------- -------- -------- --------
</TABLE>
(a) Does not deduct contingent deferred 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
[X.XX%, X.XX%, and X.XX%, respectively for 1997-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1997-1995.]
<TABLE>
<CAPTION>
For the Period
Ended August 4, through
Class C December 31, December 31,
- ------- 1998 1997
------------ -----------------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
---------- ----------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)
---------- ----------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
---------- ----------
Total from investment operations (x.xx) (x.xx)
---------- ----------
Distributions from net realized gains (x.xx) (x.xx)
---------- ----------
Net asset value, end of period $ xx.xx $ xx.xx
---------- ----------
Total return (a) (x.xx)% (x.xx)%
---------- ----------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx
---------- ----------
Ratio of expenses to average net assets (b) x.xx%(c)(d) x.xx%
---------- ----------
Ratio of net investment income (loss) to average net assets (e) (x.xx)%(c) (x.xx)%
---------- ----------
Portfolio turnover rate xx% xx%
---------- ----------
</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 net assets prior to fee waivers and/or expense reimbursements [is
X.XX% (annualized).]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements [is (X.XX)% (annualized).]
<PAGE> 55
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 56
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 57
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 58
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 59
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 60
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 61
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 62
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. 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.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 63
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 64
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual
and semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov) or by sending a letter, including a duplicating fee, to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the SEC
at 1-800-SEC-0330 for information about the Public Reference Room.
AIM High Yield Fund
SEC 1940 Act file number: 811-1540
<PAGE> 65
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Subject to Completion dated February 12, 1999
[AIM LOGO APPEARS HERE]
AIM INCOME FUND
PROSPECTUS
MAY 3, 1999
AIM Income Fund seeks to achieve high 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.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED WHETHER THE
INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR ACCURATE. ANYONE WHO TELLS YOU
OTHERWISE IS COMMITTING A CRIME.
1
<PAGE> 66
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES..........................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND.....................................3
PERFORMANCE INFORMATION......................................................5
ANNUAL TOTAL RETURNS................................................5
PERFORMANCE TABLE...................................................6
FEE TABLE AND EXPENSE EXAMPLE................................................7
FEE TABLE...........................................................7
EXPENSE EXAMPLE.....................................................7
FUND MANAGEMENT..............................................................8
THE ADVISOR.........................................................8
ADVISOR COMPENSATION................................................8
PORTFOLIO MANAGERS..................................................8
OTHER INFORMATION............................................................9
INITIAL SALES CHARGES FOR CLASS A SHARES............................9
DIVIDENDS AND DISTRIBUTIONS.........................................9
FINANCIAL HIGHLIGHTS........................................................10
SHAREHOLDER INFORMATION....................................................A-1
CHOOSING A SHARE CLASS................................................A-1
PURCHASING SHARES.....................................................A-4
REDEEMING SHARES......................................................A-6
EXCHANGING SHARES.....................................................A-9
PRICING OF SHARES....................................................A-11
TAXES................................................................A-11
OBTAINING ADDITIONAL INFORMATION...............................BACK COVER PAGE
</TABLE>
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 67
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is to achieve high 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 invest up to 40% of its total assets in foreign securities. The
fund may invest less than 35% of its net assets in lower-quality debt
securities, i.e., "junk bonds,"and unrated debt securities deemed of comparable
quality. The fund may also invest in preferred stock issues and convertible
corporate debt.
The fund's portfolio managers focus on securities that they believe have
favorable prospects for current income, consistent with their concerns for
safety of principal. The fund's portfolio managers usually sell a particular
security when any of those factors materially changes.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash,
money market securities, bonds or other debt securities. As a result, the fund
may not achieve its investment objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from your investment may vary. The
value of your investment in the fund will go up and down with the prices of the
securities in which the fund invests. Debt securities are particularly
vulnerable to credit risk and interest rate fluctuations. When interests rates
rise, bond prices fall; the longer a bond's duration, the more sensitive it is
to this risk. The issuer of a security may default or otherwise be unable to
honor a financial obligation.
The prices of foreign securities may be further affected by other factors
including:
o Currency exchange rates--The dollar value of the fund's foreign investments
will be affected by changes in the exchange rates between the dollar and
the currencies in which those investments are valued.
o Political and economic conditions--The value of the fund's foreign
investments may be adversely affected by political and social instability
in their home countries and by changes in economic or taxation policies in
those countries.
o Regulations--Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, among other things, there generally is less
publicly available information about foreign companies than about U.S.
companies.
o Markets--The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid
and more volatile than U.S. securities.
[Compared to higher-quality debt securities, junk bonds involve a greater risk
of default or price changes due to changes in the credit quality of the issuer
because they are generally unsecured and may be subordinated to other creditors'
claims. The value of junk bonds debt securities often fluctuates in response to
company, political or economic developments and can decline significantly over
short periods of time or during periods of general or regional economic
difficulty. During those times the bonds could be difficult to value or sell at
a fair price. Credit ratings on junk bonds do not necessarily reflect their
actual market risk.]
The fund could be adversely affected if the computer systems used by the fund's
investment advisor and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
3
<PAGE> 68
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances from
other service providers that they are taking similar steps. In addition, issuers
of securities in which the fund invests may be adversely affected by year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
4
<PAGE> 69
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class A
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
AIM INCOME FUND
<TABLE>
<CAPTION>
[GRAPH]
Year Return(%)
---- ---------
<S> <C>
1989 ............................ 13.56%
1990 ............................ 3.65%
1991 ............................ 18.01%
1992 ............................ 7.28%
1993 ............................ 15.38%
1994 ............................ (7.65%)
1995 ............................ 22.77%
1996 ............................ 8.58%
1997 ............................ 11.92%
1998 ............................ 4.94%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
8.10% (quarter ended June 30, 1989) and the lowest quarterly return was -5.88%
(quarter ended March 31, 1994).
5
<PAGE> 70
PERFORMANCE TABLE
The following performance table compares the fund's average performance to those
of a broad-based securities market index.
<TABLE>
<CAPTION>
==========================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years 10 Years Inception Date
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A (0.07)% 6.62% 9.00% 7.81% 11/21/68
- ----------------------------------------------------------------------------------------------------------
Class B (0.69)% 6.48% -- 6.07% 09/07/93
- ----------------------------------------------------------------------------------------------------------
Class C 3.23% -- -- 6.57% 08/04/97
- ----------------------------------------------------------------------------------------------------------
Lehman Aggregate Bond Index(1) 8.69% 7.27% 9.26% 9.70%(2) 12/31/75(2)
==========================================================================================================
</TABLE>
(1) The Lehman Aggregate Bond Index is an unmanaged index generally considered
representative of treasury issues, agency issues, corporate bond issues and
mortgage-backed securities.
(2) [The average annual total return given is since the date closest to the
earliest date the index became available.
6
<PAGE> 71
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)
Management Fees [0.45%] [0.45%] [0.45%]
Distribution and/or Service (12b-1) Fees [0.25] [1.00] [1.00]
Other Expenses [0.24] [0.24] [0.24]
Total Annual Fund Operating Expenses [0.94] [1.69] [1.69]
===== ===== =====
</TABLE>
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
7
<PAGE> 72
FUND MANAGEMENT
THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
is responsible for its day-to-day management. The advisor is located at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all
aspects of the fund's operations and provides investment advisory services to
the fund, including obtaining and evaluating economic, statistical and financial
information to formulate and implement investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of [0.45]% of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio, all of whom are officers of A I M Capital Management,
Inc., a wholly owned subsidiary of the advisor, are
o Robert G. Alley, Senior Portfolio Manager, who has been responsible for
the fund since 1992 and has been associated with the advisor and/or its
affiliates since 1992.
o John L. Pessarra, Senior Portfolio Manager, who has been responsible
for the fund since 1992 and has been associated with the advisor and/or
its affiliates since 1990.
o Carolyn L. Gibbs, Senior Portfolio Manager, who has been responsible
for the fund since 1995 and has been associated with the advisor and/or
its affiliates since 1992.
8
<PAGE> 73
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 4.75% initial
sales charge as listed under the heading "CATEGORY II Initial Sales Charges" in
the "Shareholder Information--Choosing a Share Class" section of this
prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares dividends daily and pays dividends, if any, monthly.
Capital Gains Distributions
The fund generally distributes long-term and short-term capital gains (including
any net gains from foreign currency transactions), if any, annually.
9
<PAGE> 74
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the
fund's financial statements, is included in the fund's annual report, which is
available upon request.
<TABLE>
<CAPTION>
Class A Year Ended December 31,
- ------- ------------------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to
average net assets (d) (x.xx)% (c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</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
[X.XX%, X.XX%, X.XX%, X.XX%, and X.XX% for 1998-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1998-1995.]
10
<PAGE> 75
<TABLE>
<CAPTION>
Class B Year Ended December 31,
- ------- ------------------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to
average net assets (e) (x.xx)% (c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</TABLE>
(a) Does not deduct contingent deferred 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
[X.XX%, X.XX%, and X.XX%, respectively for 1997-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1997-1995.]
<TABLE>
<CAPTION>
Year For the Period
Ended August 4, through
Class C December 31, December 31,
- ------- 1998 1997
------------ -----------------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)
------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
------- -------
Total from investment operations (x.xx) (x.xx)
------- -------
Distributions from net realized gains (x.xx) (x.xx)
------- -------
Net asset value, end of period $ xx.xx $ xx.xx
------- -------
Total return (a) (x.xx)% (x.xx)%
------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx
------- -------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx%
------- -------
Ratio of net investment income (loss) to average net assets (e) (x.xx)%(c) (x.xx)%
------- -------
Portfolio turnover rate xx% xx%
------- -------
</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 net assets prior to fee waivers and/or expense reimbursements [is
X.XX% (annualized).]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements [is (X.XX)% (annualized).]
11
<PAGE> 76
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 77
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 78
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 79
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 80
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 81
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 82
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 83
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. 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.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 84
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 85
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and
semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov) or by sending a letter, including a duplicating fee, to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the SEC
at 1-800- SEC-0330 for information about the Public Reference Room.
AIM Income Fund
SEC 1940 Act file number: 811-1540
12
<PAGE> 86
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Subject to Completion dated February 12, 1999
[AIM LOGO APPEARS HERE]
AIM INTERMEDIATE GOVERNMENT FUND
PROSPECTUS
MAY 3, 1999
AIM Intermediate Government Fund seeks to achieve high current income consistent
with reasonable concern for safety of principal by investing, normally, at least
65% of its total assets in debt securities issued, guaranteed or otherwise
backed by U.S. Government.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED WHETHER THE
INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR ACCURATE. ANYONE WHO TELLS YOU
OTHERWISE IS COMMITTING A CRIME.
1
<PAGE> 87
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES...........................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND......................................3
PERFORMANCE INFORMATION.......................................................4
ANNUAL TOTAL RETURNS.................................................4
PERFORMANCE TABLE....................................................5
FEE TABLE AND EXPENSE EXAMPLE.................................................6
FEE TABLE............................................................6
EXPENSE EXAMPLE......................................................6
FUND MANAGEMENT...............................................................7
THE ADVISOR..........................................................7
ADVISOR COMPENSATION.................................................7
PORTFOLIO MANAGERS...................................................7
OTHER INFORMATION.............................................................8
INITIAL SALES CHARGES FOR CLASS A SHARES.............................8
DIVIDENDS AND DISTRIBUTIONS..........................................8
FINANCIAL HIGHLIGHTS..........................................................9
SHAREHOLDER INFORMATION.....................................................A-1
CHOOSING A SHARE CLASS.................................................A-1
PURCHASING SHARES......................................................A-4
REDEEMING SHARES.......................................................A-6
EXCHANGING SHARES......................................................A-9
PRICING OF SHARES.....................................................A-11
TAXES.................................................................A-11
OBTAINING ADDITIONAL INFORMATION................................BACK COVER PAGE
</TABLE>
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 88
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is to achieve high current income consistent
with reasonable concern for safety of principal by investing, normally, at least
65% of its total assets in debt securities issued, guaranteed or otherwise
backed by the U.S. Government.
The fund may invest in securities of all maturities issued or guaranteed by the
U.S. Government or its agencies and instrumentalities, including: (1) U.S.
Treasury obligations, and (2) obligations issued or guaranteed by U.S.
Government agencies and instrumentalities and supported by (a) the full faith
and credit of the U.S. Treasury, (b) the right of the issuer to borrow from the
U.S. Treasury, or (c) the credit of the agency or instrumentality. The fund will
maintain a dollar-weighted average portfolio maturity of between three and ten
years. The fund invests primarily in fixed-rate securities such as high-coupon
U.S. Government agency mortgage-backed securities, which consist of interests in
underlying mortgages with maturities of up to thirty years.
The fund's portfolio managers focus on securities that they believe have
favorable prospects for current income, consistent with their reasonable concern
for safety of principal. The fund's portfolio managers usually sell a particular
security when any of those factors materially changes.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash,
money market securities, bonds or other debt securities. As a result, the fund
may not achieve its investment objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from your investment may vary. The
value of your investment in the fund will go up and down with the prices of the
securities in which the fund invests. Debt securities are particularly
vulnerable to credit risk and interest rate fluctuations. When interest rates
rise, bond prices fall; the longer a bond's duration, the more sensitive it is
to this risk. Some of the securities purchased by the fund are not guaranteed by
the U.S. Government. The agency or instrumentality issuing a security may
default or otherwise be unable to honor a financial obligation.
If the seller of a repurchase agreement in which the fund invests defaults on
its obligation or declares bankruptcy, the fund may experience delays in selling
the securities underlying the repurchase agreement. As a result, the fund may
incur losses arising from decline in the value of those securities, reduced
levels of income and expenses of enforcing its rights.
High-coupon U.S. Government agency mortgage-backed securities provide a higher
coupon at the time of purchase than current prevailing market interest rates.
The fund may purchase such securities at a premium. If these securities
experience a faster principal prepayment rate than expected, both the market
value of and income from such securities will decrease.
The fund could be adversely affected if the computer systems used by the fund's
investment advisor and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances from
other service providers that they are taking similar steps. In addition, issuers
of securities in which the fund invests may be adversely affected by year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
3
<PAGE> 89
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class A
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
AIM INTERMEDIATE GOVERNMENT FUND
<TABLE>
<CAPTION>
[GRAPH]
Year Return(%)
---- ---------
<S> <C>
1989 ............................................ 11.28%
1990 ............................................ 9.39%
1991 ............................................ 12.98%
1992 ............................................ 6.26%
1993 ............................................ 7.07%
1994 ............................................ (3.44)%
1995 ............................................ 16.28%
1996 ............................................ 2.35%
1997 ............................................ 9.07%
1998 ............................................ 8.17%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
5.49% (quarter ended June 30, 1995) and the lowest quarterly return was -2.92%
(quarter ended March 31, 1994).
4
<PAGE> 90
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
============================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years 10 Years Inception Date
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A 3.05% 5.25% 7.29% 7.15% 04/28/87
- ------------------------------------------------------------------------------------------------------------
Class B 2.40% 5.14% -- 4.96% 09/07/93
- ------------------------------------------------------------------------------------------------------------
Class C 6.31% -- -- 7.84% 08/04/97
- ------------------------------------------------------------------------------------------------------------
Lehman Intermediate Government Bond Index(1) 8.49% 6.45% 8.34% 8.06%(2) 04/30/87(2)
============================================================================================================
</TABLE>
(1) The Lehman Intermediate Government Bond Index is an unmanaged composite
generally considered representative of intermediate publicly issued debt of
U.S. Government agencies and quasi-federal corporations, and corporate debt
guaranteed by the U.S. Government.
(2) [The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.]
5
<PAGE> 91
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)
Management Fees [0.48%] [0.48%] [0.48%]
Distribution and/or Service (12b-1) Fees [0.25] [1.00] [1.00]
Other Expenses [0.27] [0.28] [0.28]
Total Annual Fund Operating Expenses [1.11] [1.87] [1.87]
===== ===== =====
</TABLE>
- ----------
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
6
<PAGE> 92
FUND MANAGEMENT
THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment and is
responsible for its day-to-day management. The advisor is located at 11 Greenway
Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all aspects
of the fund's operations and provides investment advisory services to the fund,
including obtaining and evaluating economic, statistical and financial
information to formulate and implement investment programs for the fund.
The advisor has acted as an investment since its organization in 1976. Today,
the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of [0.48]% of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio, all of whom are officers of A I M Capital Management,
Inc., a wholly owned subsidiary of the advisor, are
o Scot W. Johnson, Senior Portfolio Manager, who has been responsible for
the fund since 1998 and has been associated with the advisor and/or its
affiliates since 1994.
o Karen Dunn Kelley, Senior Portfolio Manager, who has been responsible
for the fund since 1992 and has been associated with the advisor and/or
its affiliates since 1989.
o Marcel S. Theriot, Portfolio Manager, who has been responsible for the
fund since 1998 and has been associated with the advisor and/or its
affiliates since 1994.
7
<PAGE> 93
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 4.75% initial
sales charge as listed under the heading "CATEGORY II Initial Sales Charges" in
the "Shareholder Information--Choosing a Share Class" section of this
prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares dividends daily and pays dividends, if any, monthly.
Capital Gains Distributions
The fund generally distributes long-term and short-term capital gains (including
any net gains from foreign currency transactions), if any, annually.
8
<PAGE> 94
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the
fund's financial statements, is included in the fund's annual report, which is
available upon request.
<TABLE>
<CAPTION>
Class A Year Ended December 31,
- ------- --------------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- ----------
Net gains on securities (both realized and
unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- ----------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- ----------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
---------- ---------- ---------- ---------- ----------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
---------- ---------- ---------- ---------- ----------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx
---------- ---------- ---------- ---------- ----------
Ratio of expenses to average net assets (b) x.xx%(c) x.xx% x.xx% x.xx% x.xx%
---------- ---------- ---------- ---------- ----------
Ratio of net investment income (loss) to average net
assets (d) (x.xx)%(c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
---------- ---------- ---------- ---------- ----------
Portfolio turnover rate xx% xx% xx% xx% xx%
---------- ---------- ---------- ---------- ----------
</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
[X.XX%, X.XX%, X.XX%, X.XX%, and X.XX% for 1998-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1998-1995.]
9
<PAGE> 95
<TABLE>
<CAPTION>
Class B Year Ended December 31,
- ------- ----------------------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- ----------
Net gains (losses) on securities
(both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- ----------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- ----------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
---------- ---------- ---------- ---------- ----------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
---------- ---------- ---------- ---------- ----------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx $ xx,xxx
---------- ---------- ---------- ---------- ----------
Ratio of expenses to average net assets (b) x.xx%(c)(d) x.xx% x.xx% x.xx% x.xx%
---------- ---------- ---------- ---------- ----------
Ratio of net investment income (loss) to
average net assets(e) (x.xx)%(c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
---------- ---------- ---------- ---------- ----------
Portfolio turnover rate xx% xx% xx% xx% xx%
---------- ---------- ---------- ---------- ----------
</TABLE>
(a) Does not deduct contingent deferred 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
[X.XX%, X.XX% and X.XX%, respectively.]
(c) Ratios are annualized and based on average net assets of $XX,XXX,XXX.
(d) Ratios include expenses paid indirectly. Excluding indirectly paid
expenses, the ratios of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratios of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements were [X.XX%, X.XX%, X.XX% and X.XX% for 1997-1995.]
<TABLE>
<CAPTION>
Year For the Period
Ended August 4, through
Class C December 31, December 31,
- ------- 1998 1997
----------------------------------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
---------- ----------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)
---------- ----------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
---------- ----------
Total from investment operations (x.xx) (x.xx)
---------- ----------
Distributions from net realized gains (x.xx) (x.xx)
---------- ----------
Net asset value, end of period $ xx.xx $ xx.xx
---------- ----------
Total return (a) (x.xx)% (x.xx)%
---------- ----------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx
---------- ----------
Ratio of expenses to average net assets (b) x.xx%(c)(d) x.xx%
---------- ----------
Ratio of net investment income (loss) to average net assets (e) (x.xx)%(c) (x.xx)%
---------- ----------
Portfolio turnover rate xx% xx%
---------- ----------
</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 net assets prior to fee waivers and/or expense reimbursements [is
X.XX% (annualized).]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements [is (X.XX)% (annualized).]
10
<PAGE> 96
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 97
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 98
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 99
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 100
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 101
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 102
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 103
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. 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.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 104
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 105
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and
semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov) or by sending a letter, including a duplicating fee, to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the SEC
at 1-800-SEC-0330 for information about the Public Reference Room.
AIM Intermediate Government Fund
SEC 1940 Act file number: 811-1540
<PAGE> 106
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Subject to Completion dated February 12, 1999
[AIM LOGO APPEARS HERE]
AIM MONEY MARKET FUND
PROSPECTUS
MAY 3, 1999
AIM Money Market Fund seeks to provide as high a level of current income as is
consistent with the preservation of capital and liquidity.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE COMMISSION
HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED WHETHER THE
INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR ACCURATE. ANYONE WHO TELLS YOU
OTHERWISE IS COMMITTING A CRIME.
THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET
ASSET VALUE OF $1.00 PER SHARE.
1
<PAGE> 107
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES...................................... 3
PRINCIPAL RISKS OF INVESTING IN THE FUND................................. 3
PERFORMANCE INFORMATION ................................................. 5
ANNUAL TOTAL RETURNS ............................................. 5
PERFORMANCE TABLE ................................................ 6
FEE TABLE AND EXPENSE EXAMPLE ........................................... 7
FEE TABLE ........................................................ 7
EXPENSE EXAMPLE .................................................. 7
FUND MANAGEMENT ......................................................... 9
THE ADVISOR ...................................................... 9
ADVISOR COMPENSATION ............................................. 9
OTHER INFORMATION ....................................................... 10
DIVIDENDS AND DISTRIBUTIONS ...................................... 10
FINANCIAL HIGHLIGHTS .................................................... 11
SHAREHOLDER INFORMATION ................................................. A-1
CHOOSING A SHARE CLASS ............................................... A-1
PURCHASING SHARES .................................................... A-4
REDEEMING SHARES ..................................................... A-6
EXCHANGING SHARES .................................................... A-9
PRICING OF SHARES .................................................... A-11
TAXES ................................................................ A-11
OBTAINING ADDITIONAL INFORMATION ............................. BACK COVER PAGE
</TABLE>
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 108
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment objective is to provide as high a level of current income
as is consistent with the preservation of capital and liquidity.
The fund attempts to meet this objective by investing only in high-quality U.S.
dollar-denominated short-term obligations, including
o securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities
o bankers' acceptances, certificates of deposit, and time deposits from U.S.
or foreign banks
o repurchase agreements
o commercial paper
o taxable municipal securities
o master notes
The fund may invest up to 50% of its assets in U.S. dollar-denominated foreign
securities. The fund's portfolio managers focus on securities that they believe
have favorable prospects for current income, consistent with their concerns for
preservation of capital and liquidity. The fund's portfolio managers usually
hold portfolio securities to maturity, but may sell a particular security when
they deem it advisable.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash.
As a result, the fund may not achieve its investment objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the fund.
Additionally, the fund's yield will vary as the short-term securities in its
portfolio mature and the proceeds are reinvested in securities with different
interest rates.
The following factors could reduce the fund's income and/or share price:
o interest rates could rise sharply, causing the value of the fund's
securities, and share price, to drop
o any of the fund's holdings could have its credit rating downgraded or could
default
o the risks generally associated with concentrating investments in the
banking industry, such as interest rate risk, credit risk and regulatory
developments relating to the banking and financial services industries
o the risks generally associated with dollar-denominated foreign
investments, including political and economic upheaval, seizure or
nationalization of deposits, imposition of taxes or other restrictions on
the payment of principal and interest.
3
<PAGE> 109
If the seller of a repurchase agreement in which the fund invests defaults on
its obligation or declares bankruptcy, the fund may experience delays in selling
the securities underlying the repurchase agreement. As a result, the fund may
incur losses arising from decline in the value of those securities, reduced
levels of income and expenses of enforcing its rights.
The fund could be adversely affected if the computer systems used by the fund's
investment advisor and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances from
other service providers that they are taking similar steps. In addition, issuers
of securities in which the fund invests may be adversely affected by year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
4
<PAGE> 110
PERFORMANCE INFORMATION
The bar chart shown below provides an indication of the risks of investing in
the fund. The fund's past performance is not necessarily an indication of its
future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's AIM Cash
Reserve Shares from year to year.
AIM CASH RESERVE SHARES
<TABLE>
<CAPTION>
[GRAPH]
Year Return %
---- --------
<S> <C>
1994 .............................. 3.44%
1995 .............................. 5.04%
1996 .............................. 4.41%
1997 .............................. 4.66%
1998 .............................. 4.62%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
1.27% (quarters ended March 31, 1995 and June 30, 1995) and the lowest quarterly
return was 0.59% (quarter ended March 31, 1994).
5
<PAGE> 111
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
=============================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years 10 Years Inception Date
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
AIM Cash Reserve Shares
- -------------------------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------------------------
=============================================================================================================
</TABLE>
(1) [Index]
(2) [The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.]
AIM Cash Reserve Shares' seven day yield on December 31, 1998 was 4.07%. For the
current seven day yield, call (800) 347-4246.
6
<PAGE> 112
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
AIM Cash
Reserve Shares Class B Class C
-------------- ------- --------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) None None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None 5.00 1.00
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
Management Fees [0.55%] [0.55%] [0.55%]
Distribution and/or Service (12b-1) Fees [0.25] [1.00] [1.00]
Other Expenses [0.25] [0.25] [0.25]
Total Annual Fund Operating Expenses [1.05] [1.80] [1.80]
===== ===== =====
</TABLE>
- -----------------
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
AIM Cash Reserve Shares $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
7
<PAGE> 113
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
AIM Cash Reserve Shares $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
8
<PAGE> 114
FUND MANAGEMENT
THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
is responsible for its day-to-day management. The advisor is located at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all
aspects of the fund's operations and provides investment advisory services to
the fund, including obtaining and evaluating economic, statistical and financial
information to formulate and implement investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of [0.55]% of average net assets.
9
<PAGE> 115
OTHER INFORMATION
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares dividends daily and pays dividends, if any, monthly.
In order to earn dividends on a purchase of fund shares on the day of the
purchase, the transfer agent must receive payment in federal funds before 12:00
noon Eastern Time on that day. Purchases made by payments in other forms, or
payments in federal funds received after 12:00 noon Eastern Time but before the
close of the New York Stock Exchange, will begin to earn dividends on the next
business day.
Capital Gains Distributions
The fund generally distributes long-term and short-term capital gains (including
any net gains from foreign currency transactions), if any, annually.
10
<PAGE> 116
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the
fund's financial statements, is included in the fund's annual report, which is
available upon request.
<TABLE>
<CAPTION>
AIM Cash Reserve Shares Year Ended December 31,
- ----------------------- -------------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $xx.xx $xx.xx $xx.xx $xx.xx
------- ------- ------- ------- -------
Total return (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (a) x.xx% (b)(c) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to average net assets (d) (x.xx)%(c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</TABLE>
(a) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
[X.XX%, X.XX%, X.XX%, and X.XX% for 1998-1995.]
(b) Ratios are based on average daily net assets of $XXX,XXX,XXX.
(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 fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1998-1995.]
11
<PAGE> 117
<TABLE>
<CAPTION>
Class B Year Ended December 31,
- ------- -------------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to average net assets (e) (x.xx)% (c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</TABLE>
(a) Does not deduct contingent deferred 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
[X.XX%, X.XX%, and X.XX%, respectively for 1997-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX% and X.XX% for 1997-1995.]
<TABLE>
<CAPTION>
Year For the Period
Ended August 4, through
Class C December 31, December 31,
- ------- 1998 1997
---------- -----------------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
---------- ----------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)
---------- ----------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
---------- ----------
Total from investment operations (x.xx) (x.xx)
---------- ----------
Distributions from net realized gains (x.xx) (x.xx)
---------- ----------
Net asset value, end of period $ xx.xx $ xx.xx
---------- ----------
Total return (a) (x.xx)% (x.xx)%
---------- ----------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $ xx,xxx $ xx,xxx
---------- ----------
Ratio of expenses to average net assets (b) x.xx%(c)(d) x.xx%
---------- ----------
Ratio of net investment income (loss) to average net assets (e) (x.xx)%(c) (x.xx)%
---------- ----------
Portfolio turnover rate xx% xx%
---------- ----------
</TABLE>
(a) Does not deduct contingent deferred sales charges and for periods less than
one year, total return is not annualized.
(b) After fee waivers and/or expense reimbursements. Ratios of expenses to
average net assets prior to fee waivers and/or expense reimbursements were
X.XX% and X.XX% (annualized) for 1998 and ______________, respectively.
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes expenses paid indirectly. Excluding expenses paid
indirectly, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements were X.XX% and X.XX%, for 1998 and __________, respectively.
12
<PAGE> 118
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 119
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 120
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 121
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 122
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 123
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 124
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 125
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. 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.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 126
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 127
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual
and semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov) or by sending a letter, including a duplicating fee, to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the SEC
at 1-800-SEC-0330 for information about the Public Reference Room.
AIM Money Market Fund
SEC 1940 Act file number 811-1540
<PAGE> 128
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to completion dated February 12, 1999
[AIM LOGO APPEARS HERE]
AIM MUNICIPAL BOND FUND
PROSPECTUS
MAY 3, 1999
AIM Municipal Bond Fund seeks 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.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THE INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR
ACCURATE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
<PAGE> 129
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES......................................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND.................................................................3
PERFORMANCE INFORMATION..................................................................................5
ANNUAL TOTAL RETURNS............................................................................5
PERFORMANCE TABLE...............................................................................6
FEE TABLE AND EXPENSE EXAMPLE............................................................................7
FEE TABLE.......................................................................................7
EXPENSE EXAMPLE.................................................................................7
FUND MANAGEMENT..........................................................................................8
THE ADVISOR.....................................................................................8
ADVISOR COMPENSATION............................................................................8
PORTFOLIO MANAGERS..............................................................................8
OTHER INFORMATION........................................................................................9
INITIAL SALES CHARGES FOR CLASS A SHARES........................................................9
DIVIDENDS AND DISTRIBUTIONS.....................................................................9
SPECIAL TAX INFORMATION REGARDING THE FUND......................................................9
FINANCIAL HIGHLIGHTS....................................................................................10
SHAREHOLDER INFORMATION................................................................................A-1
CHOOSING A SHARE CLASS............................................................................A-1
PURCHASING SHARES.................................................................................A-4
REDEEMING SHARES..................................................................................A-6
EXCHANGING SHARES.................................................................................A-9
PRICING OF SHARES................................................................................A-11
TAXES............................................................................................A-11
OBTAINING ADDITIONAL INFORMATION...........................................................BACK COVER PAGE
</TABLE>
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 130
INVESTMENT OBJECTIVE AND STRATEGIES
The fund's investment 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 fund attempts to meet this objective by investing at least 80% of its total
invested assets in securities that pay interest exempt from all federal taxes.
The fund will invest at least 80% of its total invested assets in municipal
bonds. Municipal bonds include debt obligations of varying maturities issued to
obtain funds for various public purposes by or on behalf of states, territories
and possessions of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities. Municipal bonds will
also include certain types of industrial development bonds such as private
activity bonds, provided that the interest payable on the bonds is, in the
opinion of bond counsel, excluded from gross income for federal income tax
purposes.
The fund will also invest at least 80% of its total assets in investment-grade
municipal securities rated by Moody's Investors Service, Inc. (Moody's),
Standard & Poor's Ratings Services (S&P) or any other nationally recognized
statistical rating organization. Other securities meeting certain standards set
by the fund are included in this category. The fund may invest up to 20% of its
total assets in municipal securities rated below investment-grade, i.e. "junk
bonds," or unrated municipal securities.
The fund's portfolio managers focus on municipal securities they believe have
favorable prospects for current income consistent with the fund's objective of
preservation of principal. The fund's portfolio managers usually sell a
particular security when any of those factors materially changes.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash,
money market securities, bonds or other debt securities. As a result, the fund
may not achieve its investment objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from your investment may vary. The
value of your investment in the fund will go up and down with the prices of the
securities in which the fund invests. Interest rate increases can cause the
price of a debt security to decrease; the longer a debt security's duration,
the more sensitive it is to this risk. A municipality may default or otherwise
be unable to honor a financial obligation. Private activity bonds are not
backed by the taxing power of the issuing municipality.
The value of, payment of interest and repayment of principal by, and the
ability of the fund to sell, a municipal security may also be affected by
constitutional amendments, legislative enactments, executive orders,
administrative regulations and voter initiatives as well as the economies of
the regions in which the fund invests.
[Compared to higher quality debt securities, junk bonds involve greater risk of
default or price changes due to changes in the credit quality of the issuer
because they are generally unsecured and may be subordinated to other
creditors' claims. The value of junk bonds often fluctuates in response to
company, political or economic developments and can decline significantly over
short periods of time or during periods of general or regional economic
difficulty. During those times the bonds could be difficult to value or sell at
a fair price. Credit ratings on junk bonds do not necessarily reflect their
actual market risk.]
The fund could be adversely affected if the computer systems used by the fund's
investment advisor and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
3
<PAGE> 131
The fund's investment advisor and independent technology consultants are
working to avoid year 2000-related problems in its systems and to obtain
assurances from other service providers that they are taking similar steps. In
addition, issuers of securities in which the fund invests may be adversely
affected by year 2000-related problems. This could have an impact on the value
of the fund's investments and its share price.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
4
<PAGE> 132
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class A
shares from year to. The bar chart does not reflect sales loads. If it did, the
annual total returns shown would be lower.
AIM MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
[GRAPH]
YEAR RETURN %
---- ----------
<S> <C>
1989................... 9.70%
1990................... 5.27%
1991................... 13.30%
1992................... 9.10%
1993................... 11.66%
1994................... (3.79%)
1995................... 13.04%
1996................... 3.90%
1997................... 7.27%
1998................... 5.28%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
5.82% (quarter ended June 30, 1989) and the lowest quarterly return was -4.22%
(quarter ended March 31, 1994).
5
<PAGE> 133
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
==========================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years 10 Years Inception Date
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A 0.23% 3.98% 6.84% 6.69% 03/29/77
- ----------------------------------------------------------------------------------------------------------
Class B (0.52)% 3.85% 4.14% 09/01/93
- ----------------------------------------------------------------------------------------------------------
Class C 3.36% -- 4.80% 08/04/97
- ----------------------------------------------------------------------------------------------------------
Lehman Municipal Bond Index(1) 6.48% 6.22% 8.22% 8.63%(2) 12/31/79(2)
==========================================================================================================
</TABLE>
(1) The Lehman Municipal Bond Index is a broad based, total return index
comprised of 8000 actual bonds, all of which are investment grade,
fixed rate, long term maturities (greater than two years) and are
selected from issues larger than $50 million dated since January 1984.
[(2) The average annual total return given is since the earliest date the
index became available.]
6
<PAGE> 134
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
Shareholder Fees (fees paid directly from your investment)
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 4.75% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)
Management Fees [0.46%] [0.46%] [0.46%]
Distribution and/or Service (12b-1) Fees [0.25] [1.00] [1.00]
Other Expenses [0.19] [0.20] [0.20]
Total Annual Fund Operating Expenses [1.90] [1.66] [1.66]
===== ===== =====
</TABLE>
- -------------------
(1) If you buy $1,000,000 or more of Class A shares and redeem these
shares within 18 months from the date of purchase, you may pay a 1%
contingent deferred sales charge (CDSC) at the time of redemption.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in
different classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that
the fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
7
<PAGE> 135
FUND MANAGEMENT
THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
is responsible for its day-to-day management. The advisor is located at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises
all aspects of the fund's operations and provides investment advisory services
to the fund, including obtaining and evaluating economic, statistical and
financial information to formulate and implement investment programs for the
fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of [0.46]% of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio, all of whom are officers of A I M Capital Management,
Inc., a wholly owned subsidiary of the advisor, are
o Richard A. Berry, Senior Portfolio Manager, who has been responsible
for the fund since 1992 and has been associated with the advisor
and/or its affiliates since 1987.
o Stephen D. Turman, Senior Portfolio Manager, who has been responsible
for the fund since 1992 and has been associated with the advisor
and/or its affiliates since 1985.
8
<PAGE> 136
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 4.75%
initial sales charge as listed under the heading "CATEGORY II Initial Sales
Charges" in the "Shareholder Information--Choosing a Share Class" section of
this prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares dividends daily and pays dividends, if any,
monthly.
Capital Gains Distributions
The fund generally distributes long-term and short-term capital gains
(including any net gains from foreign currency transactions), if any, annually.
SPECIAL TAX INFORMATION REGARDING THE FUND
In addition to the general tax information set forth under the heading
"Shareholder Information--Taxes" in this prospectus, the following information
describes the tax impact of certain dividends you may receive from the fund.
You will not be required to include the "exempt-interest" portion of dividends
paid by the fund in your gross income for federal income tax purposes. You will
be required to report the receipt of exempt-interest dividends and other
tax-exempt interest on your federal income tax returns. Exempt-interest
dividends from the fund may be subject to state and local 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, and may have other
collateral federal income tax consequences for you. The fund may invest in
municipal securities the interest on which constitutes an item of tax
preference and could give rise to a federal alternative minimum tax liability
for you, and may invest up to 20% of its net assets in such securities and
other taxable securities. The fund will try to avoid investments that result in
taxable dividends.
To the extent that dividends paid by the fund are derived from taxable
investments or realized capital gains, they will be taxable as ordinary income
or long-term capital gains. The percentage of dividends that constitutes
exempt-interest dividends will be determined annually. This percentage may
differ from the actual percentage of exempt interest received by the fund for
the particular days in which you hold 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 fund
to pay exempt-interest dividends might be adversely affected.
9
<PAGE> 137
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the
fund's financial statements, is included in the fund's annual report, which is
available upon request.
<TABLE>
<CAPTION>
Class A Year Ended December 31,
- ------- ------------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to average net assets(d) (x.xx)%(c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</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
[X.XX%, X.XX%, X.XX%, X.XX%, and X.XX% for 1998-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1998-1995.]
10
<PAGE> 138
<TABLE>
<CAPTION>
Class B Year Ended December 31,
- ------- -----------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to average net assets(e) (x.xx)%(c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</TABLE>
(a) Does not deduct contingent deferred 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
[X.XX%, X.XX%, and X.XX%, respectively for 1997-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1997-1995.]
<TABLE>
<CAPTION>
Year For the Period
Ended August 4, through
Class C December 31, December 31,
- ------- 1998 1997
------------- -----------------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)
------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
------- -------
Total from investment operations (x.xx) (x.xx)
------- -------
Distributions from net realized gains (x.xx) (x.xx)
------- -------
Net asset value, end of period $ xx.xx $ xx.xx
------- -------
Total return (a) (x.xx)% (x.xx)%
------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx
------- -------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx%
------- -------
Ratio of net investment income (loss) to average net assets (e) (x.xx)%(c) (x.xx)
------- -------
Portfolio turnover rate xx% xx%
------- -------
</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 net assets prior to fee waivers and/or expense reimbursements [is
X.XX% (annualized).]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements [is (X.XX)% (annualized).]
11
<PAGE> 139
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 140
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 141
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 142
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 143
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 144
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 145
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 146
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. 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.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 147
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 148
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and
semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov) or by sending a letter, including a duplicating fee, to
the SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call
the SEC at 1-800- SEC-0330 for information about the Public Reference Room.
AIM Municipal Bond Fund
SEC 1940 Act file number: 811-1540
<PAGE> 149
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Subject to completion dated February 12, 1999
[AIM LOGO APPEARS HERE]
AIM SELECT GROWTH FUND
PROSPECTUS
MAY 3, 1999
AIM Select Growth Fund seeks 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.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THE INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR
ACCURATE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
<PAGE> 150
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INVESTMENT OBJECTIVE AND STRATEGIES.......................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND..................................3
PERFORMANCE INFORMATION...................................................4
ANNUAL TOTAL RETURNS.............................................4
PERFORMANCE TABLE................................................5
FEE TABLE AND EXPENSE EXAMPLE.............................................6
FEE TABLE........................................................6
EXPENSE EXAMPLE..................................................6
FUND MANAGEMENT...........................................................7
THE ADVISOR......................................................7
ADVISOR COMPENSATION.............................................7
PORTFOLIO MANAGEMENT COMMITTEE...................................7
OTHER INFORMATION.........................................................7
INITIAL SALES CHARGES FOR CLASS A SHARES.........................8
DIVIDENDS AND DISTRIBUTIONS......................................8
FINANCIAL HIGHLIGHTS......................................................9
SHAREHOLDER INFORMATION.................................................A-1
CHOOSING A SHARE CLASS.............................................A-1
PURCHASING SHARES..................................................A-4
REDEEMING SHARES...................................................A-6
EXCHANGING SHARES..................................................A-9
PRICING OF SHARES.................................................A-11
TAXES.............................................................A-11
OBTAINING ADDITIONAL INFORMATION............................BACK COVER PAGE
</TABLE>
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 151
INVESTMENT OBJECTIVE AND STRATEGIES
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.
The fund may invest up to 25% of its total assets in foreign securities.
The fund's management committee focuses on companies that have experienced
above-average, long-term growth in earnings, have excellent prospects for future
growth and whose securities they believe are undervalued relative to the
issuer's current or projected earnings, the current market value of the issuer's
assets or the equity markets generally. The fund's management committee usually
sells a particular security when any of those factors materially changes.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash,
money market securities, bonds or other debt securities. As a result, the fund
may not achieve its investment objective.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund. The value of your investment in the fund will go up and down with the
prices of the securities in which the fund invests. The price of common stock
fluctuates in response to many factors, including the historical and prospective
earnings of the issuer, the value of its assets, general economic conditions,
interest rates, investor perceptions and market liquidity.
Securities issued by foreign issuers have additional risks, including exchange
rate changes, political and economic upheaval, the relative lack of information
about these companies, relatively low market liquidity and the potential lack of
strict financial and accounting controls and standards.
[If the seller of a repurchase agreement in which the fund invests defaults on
its obligation or declares bankruptcy, the fund may experience delays in selling
the securities underlying the repurchase agreement. As a result, the fund may
incur losses arising from decline in the value of those securities, reduced
levels of income and expenses of enforcing its rights.]
The fund could be adversely affected if the computer systems used by the fund's
investment advisor and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances from
other service providers that they are taking similar steps. In addition, issuers
of securities in which the fund invests may be adversely affected by year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
3
<PAGE> 152
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class A
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
AIM SELECT GROWTH FUND
<TABLE>
<CAPTION>
[GRAPH]
YEAR RETURN (%)
---- ----------
<S> <C>
1989............................... 28.87%
1990............................... (5.04%)
1991............................... 37.05%
1992............................... 0.19%
1993............................... 3.63%
1994............................... (4.99%)
1995............................... 34.31%
1996............................... 18.61%
1997............................... 19.54%
1998............................... 27.09%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
29.40% (quarter ended December 31, 1998) and the lowest quarterly return was
- -19.50% (quarter ended September 30, 1990).
4
<PAGE> 153
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
==========================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years 10 Years Inception Date
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A 20.12% 16.79% 14.24% 9.99% 02/02/68
- ----------------------------------------------------------------------------------------------------------
Class B 21.13% 16.87% -- 15.64% 09/01/93
- ----------------------------------------------------------------------------------------------------------
Class C 25.07% -- -- 14.63% 08/04/97
- ----------------------------------------------------------------------------------------------------------
S&P 500(1) 28.60% 24.08% 19.20% 12.81%(2) 01/31/68(2)
==========================================================================================================
</TABLE>
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks
frequently used as a general measure of U.S. stock market performance.
(2) [The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.]
5
<PAGE> 154
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
Shareholder Fees (fees paid directly from your investment)
<S> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 5.50% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses (expenses that are deducted from fund assets)
Management Fees [0.67%] [0.67%] [0.67%]
Distribution and/or Service (12b-1) Fees [0.25] [1.00] [1.00]
Other Expenses [0.21] [0.32] [0.32]
Total Annual Fund Operating Expenses [1.13] [1.99] [1.99]
===== ===== =====
</TABLE>
- -------------------
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
6
<PAGE> 155
FUND MANAGEMENT
THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
is responsible for its day-to-day management. The advisor is located at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all
aspects of the fund's operations and provides investment advisory services to
the fund, including obtaining and evaluating economic, statistical and financial
information to formulate and implement investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of [0.67]% of average net assets.
PORTFOLIO MANAGERS
The fund is managed by a select committee comprised of equity research analysts
employed by the advisor or A I M Capital Management, Inc., a wholly owned
subsidiary of the advisor. The members of the committee provide knowledge
regarding a variety of equity market capitalization sectors and investment
styles. The committee meets periodically to discuss investment opportunities and
ideas; however, purchases and sales of securities must have the prior approval
of one of the following persons:
o Jonathan C. Schoolar, Senior Portfolio Manager, who has been
responsible for the fund since 1994 and has been associated with the
advisor and/or its affiliates since 1986.
o Bret W. Stanley, [Senior Portfolio Manager], who has been responsible
for the fund since 1999 and has been associated with the advisor and/or
its affiliates since 1998. From 1995 to 1998, he was Vice President and
portfolio manager with Van Kampen American Capital Asset Management,
Inc.
o Kenneth A. Zschappel, Senior Portfolio Manager, who has been
responsible for the fund since 1999 and has been associated with the
advisor and/or its affiliates since 1990.
7
<PAGE> 156
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 5.50% initial
sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in
the "Shareholder Information--Choosing a Share Class" section of this
prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares and pays dividends, if any, annually.
Capital Gains Distributions
The fund generally distributes long-term and short-term capital gains (including
any net gains from foreign currency transactions), if any, annually.
8
<PAGE> 157
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the
fund's financial statements, is included in the fund's annual report, which is
available upon request.
<TABLE>
<CAPTION>
Class A Year Ended December 31,
- ------- ------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to
average net assets(d) (x.xx)% (c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</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
[X.XX%, X.XX%, X.XX%, X.XX%, and X.XX% for 1998-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1998-1995.]
9
<PAGE> 158
<TABLE>
<CAPTION>
Class B Year Ended December 31,
- ------- ------------------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to
average net assets (e) (x.xx)% (c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</TABLE>
(a) Does not deduct contingent deferred 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
[X.XX%, X.XX%, and X.XX%, respectively for 1997-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1997-1995.]
<TABLE>
<CAPTION>
Year For the Period
Ended August 4, through
Class C December 31, December 31,
- ------- 1998 1997
------------ -----------------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)
------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
------- -------
Total from investment operations (x.xx) (x.xx)
------- -------
Distributions from net realized gains (x.xx) (x.xx)
------- -------
Net asset value, end of period $ xx.xx $ xx.xx
------- -------
Total return (a) (x.xx)% (x.xx)%
------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx
------- -------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx%
------- -------
Ratio of net investment income (loss) to average net assets (e) (x.xx)% (c) (x.xx)%
------- -------
Portfolio turnover rate xx% xx%
------- -------
</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 net assets prior to fee waivers and/or expense reimbursements [is
X.XX% (annualized).]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements [is (X.XX)% (annualized).]
10
<PAGE> 159
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 160
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 161
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 162
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 163
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 164
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 165
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 166
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. 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.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 167
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 168
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and
semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov) or by sending a letter, including a duplicating fee, to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the SEC
at 1-800- SEC-0330 for information about the Public Reference Room.
AIM Select Growth Fund
SEC 1940 Act file number: 811-1540
11
<PAGE> 169
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Subject to Completion dated February 12, 1999
[AIM LOGO APPEARS HERE]
AIM VALUE FUND
PROSPECTUS
MAY 3, 1999
AIM Value Fund seeks 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 markets generally. Income is a secondary objective.
This prospectus contains important information. Please read it before investing
and keep it for future reference.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. There is a risk that you could lose a portion or all of your money.
AS WITH ALL OTHER MUTUAL FUND SECURITIES, THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
WHETHER THE INFORMATION IN THIS PROSPECTUS IS ADEQUATE OR
ACCURATE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
1
<PAGE> 170
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INVESTMENT OBJECTIVES AND STRATEGIES.....................................................................3
PRINCIPAL RISKS OF INVESTING IN THE FUND.................................................................3
PERFORMANCE INFORMATION..................................................................................4
ANNUAL TOTAL RETURNS............................................................................4
PERFORMANCE TABLE...............................................................................5
FEE TABLE AND EXPENSE EXAMPLE............................................................................6
FEE TABLE.......................................................................................6
EXPENSE EXAMPLE.................................................................................6
FUND MANAGEMENT..........................................................................................8
THE ADVISOR.....................................................................................8
ADVISOR COMPENSATION............................................................................8
PORTFOLIO MANAGERS..............................................................................8
OTHER INFORMATION........................................................................................9
INITIAL SALES CHARGES FOR CLASS A SHARES........................................................9
DIVIDENDS AND DISTRIBUTIONS.....................................................................9
FINANCIAL HIGHLIGHTS....................................................................................10
SHAREHOLDER INFORMATION................................................................................A-1
CHOOSING A SHARE CLASS............................................................................A-1
PURCHASING SHARES.................................................................................A-4
REDEEMING SHARES..................................................................................A-6
EXCHANGING SHARES.................................................................................A-9
PRICING OF SHARES................................................................................A-11
TAXES............................................................................................A-11
OBTAINING ADDITIONAL INFORMATION...........................................................BACK COVER PAGE
</TABLE>
The AIM Family of Funds, The AIM Family of Funds and Design (i.e., the AIM
logo), AIM and Design, AIM, AIM LINK, AIM Institutional Funds, aimfunds.com, La
Familia AIM de Fondos, La Familia AIM de Fondos and Design and Invest with
Discipline are registered service marks and AIM Bank Connection is a service
mark of A I M Management Group Inc.
2
<PAGE> 171
INVESTMENT OBJECTIVES AND STRATEGIES
The fund's investment 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 markets generally. Income is a secondary objective.
The fund also may invest in preferred stocks and debt instruments that are
consistent with its investment objectives. Although the fund may receive income
from these investments, they will be purchased for their potential for growth of
capital and not for their ability to generate income. The fund also may invest
up to 25% of its total assets in foreign securities.
The fund's portfolio managers focus on undervalued equity securities of (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 that
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. The fund's
portfolio managers usually sell a particular security when they believe the
company no longer fits into any of the above categories.
In anticipation of or in response to adverse market conditions or for cash
management purposes, the fund may hold all or a portion of its assets in cash,
money market securities, bonds or other debt securities. As a result, the fund
may not achieve its investment objectives.
PRINCIPAL RISKS OF INVESTING IN THE FUND
There is a risk that you could lose all or a portion of your investment in the
fund and that the income you may receive from your investment may vary. The
value of your investment in the fund will go up and down with the prices of the
securities in which the fund invests. The price of equity securities fluctuates
in response to many factors, including the historical and prospective earnings
of the issuer, the value of its assets, general economic conditions, interest
rates, investor perceptions and market liquidity.
Securities issued by foreign issuers have additional risks, including exchange
rate changes, political and economic upheaval, the relative lack of information
about these companies, relatively low market liquidity and the potential lack of
strict financial and accounting controls and standards.
[If the seller of a repurchase agreement in which the fund invests defaults on
its obligation or declares bankruptcy, the fund may experience delays in selling
the securities underlying the repurchase agreement. As a result, the fund may
incur losses arising from decline in the value of those securities, reduced
levels of income and expenses of enforcing its rights.]
The fund could be adversely affected if the computer systems used by the fund's
investment advisor and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The fund's investment advisor and independent technology consultants are working
to avoid year 2000-related problems in its systems and to obtain assurances from
other service providers that they are taking similar steps. In addition, issuers
of securities in which the fund invests may be adversely affected by year
2000-related problems. This could have an impact on the value of the fund's
investments and its share price.
An investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
3
<PAGE> 172
PERFORMANCE INFORMATION
The bar chart and table shown below provide an indication of the risks of
investing in the fund. The fund's past performance is not necessarily an
indication of its future performance.
ANNUAL TOTAL RETURNS
The following bar chart shows changes in the performance of the fund's Class A
shares from year to year. The bar chart does not reflect sales loads. If it did,
the annual total returns shown would be lower.
AIM VALUE FUND
<TABLE>
<CAPTION>
[GRAPH]
Year Return (%)
---- ----------
<S> <C>
1989................................ 31.54%
1990................................ 1.88%
1991................................ 43.45%
1992................................ 16.39%
1993................................ 18.71%
1994................................ 3.28%
1995................................ 34.85%
1996................................ 14.52%
1997................................ 23.95%
1998................................ 32.76%
</TABLE>
During the periods shown in the bar chart, the highest quarterly return was
27.35% (quarter ended December 31, 1998) and the lowest quarterly return was
- -20.11% (quarter ended September 30, 1990).
4
<PAGE> 173
PERFORMANCE TABLE
The following performance table compares the fund's performance to that of a
broad-based securities market index.
<TABLE>
<CAPTION>
==========================================================================================================
Average Annual Total Returns
(for the periods ended December 31, 1998)
Since Inception
1 Year 5 Years 10 Years Inception Date
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A 25.45% 19.92% 20.75% 18.69% 05/01/84
- ----------------------------------------------------------------------------------------------------------
Class B 26.70% 20.11% -- 19.18% 10/18/93
- ----------------------------------------------------------------------------------------------------------
Class C 30.72% -- -- 21.54% 08/04/97
- ----------------------------------------------------------------------------------------------------------
S&P 500(1) 28.60% 24.08% 19.20% 18.44%(2) 04/30/84(2)
==========================================================================================================
</TABLE>
(1) The Standard & Poor's 500 Index is an unmanaged index of common stocks
frequently used as a general measure of U.S. stock market performance.
(2) [The average annual total return given is since the date closest to the
inception date of the class with the longest performance history.]
5
<PAGE> 174
FEE TABLE AND EXPENSE EXAMPLE
FEE TABLE
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund:
<TABLE>
<CAPTION>
Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Shareholder Fees (fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price) 5.50% None None
Maximum Deferred Sales Charge (Load)
(as a percentage of original purchase price
or redemption proceeds, whichever is less) None(1) 5.00 1.00
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)
Management Fees [0.63%] [0.63%] [0.63%]
Distribution and/or Service (12b-1) Fees [0.25] [1.00] [1.00]
Other Expenses [0.18] [0.24] [0.24]
Total Annual Fund Operating Expenses [1.06] [1.87] [1.87]
====== ====== ======
Fee Waiver(2) [0.03] [0.03] [0.03]
Net Expenses [1.03] [1.84] [1.84]
</TABLE>
- ----------
(1) If you buy $1,000,000 or more of Class A shares and redeem these shares
within 18 months from the date of purchase, you may pay a 1% contingent
deferred sales charge (CDSC) at the time of redemption.
(2) The investment advisor has agreed to waive a portion of its fees. The
waiver may not be terminated without the approval of the fund's Board of
Trustees.
As a result of 12b-1 fees, long-term shareholders in the fund may pay more than
the maximum permitted initial sales charge.
EXPENSE EXAMPLE
This example is intended to help you compare the costs of investing in different
classes of the fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
fund's operating expenses remain the same. Although your actual returns and
costs may be higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
6
<PAGE> 175
You would pay the following expenses if you did not redeem your shares:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Class A $ -- $ -- $ -- $ --
Class B -- -- -- --
Class C -- -- -- --
</TABLE>
7
<PAGE> 176
FUND MANAGEMENT
THE ADVISOR
A I M Advisors, Inc. (the advisor) serves as the fund's investment advisor and
is responsible for its day-to-day management. The advisor is located at 11
Greenway Plaza, Suite 100, Houston, Texas 77046-1173. The advisor supervises all
aspects of the fund's operations and provides investment advisory services to
the fund, including obtaining and evaluating economic, statistical and financial
information to formulate and implement investment programs for the fund.
The advisor has acted as an investment advisor since its organization in 1976.
Today, the advisor, together with its subsidiaries, advises or manages over 110
investment portfolios, including the fund, encompassing a broad range of
investment objectives.
ADVISOR COMPENSATION
During the fiscal year ended December 31, 1998, the advisor received
compensation of [0.60]% of average net assets.
PORTFOLIO MANAGERS
The advisor uses a team approach to investment management. The individual
members of the team who are primarily responsible for the day-to-day management
of the fund's portfolio, all of whom are officers of A I M Capital Management,
Inc., a wholly owned subsidiary of the advisor, are
o Joel E. Dobberpuhl, Senior Portfolio Manager, who has been responsible
for the fund since 1992 and has been associated with the advisor and/or
its affiliates since 1990.
o Robert A. Shelton, Portfolio Manager, who has been responsible for the
fund since 1997 and has been associated with the advisor and/or its
affiliates since 1995. Prior to 1995, he was a financial analyst for CS
First Boston.
o Evan G. Harrel, [Senior Portfolio Manager], who has been responsible
for the fund since 1998 and has been associated with the advisor and/or
its affiliates since 1998. From 1994 to 1998, he was Vice President of
Van Kampen American Capital Asset Management, Inc. and a portfolio
manager of various growth and equity funds.
8
<PAGE> 177
OTHER INFORMATION
INITIAL SALES CHARGES FOR CLASS A SHARES
Purchases of Class A shares of the fund are subject to the maximum 5.50% initial
sales charge as listed under the heading "CATEGORY I Initial Sales Charges" in
the "Shareholder Information--Choosing a Share Class" section of this
prospectus.
DIVIDENDS AND DISTRIBUTIONS
Dividends
The fund generally declares and pays dividends, if any, annually.
Capital Gains Distributions
The fund generally distributes long-term and short-term capital gains (including
any net gains from foreign currency transactions), if any, annually.
9
<PAGE> 178
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the fund's
financial performance. Certain information reflects financial results for a
single fund share.
The total returns in the table represent the rate that an investor would have
earned (or lost) on an investment in the fund (assuming reinvestment of all
dividends and distributions).
This information has been audited by KPMG LLP, whose report, along with the
fund's financial statements, is included in the fund's annual report, which is
available upon request.
<TABLE>
<CAPTION>
Class A Year Ended December 31,
- ------- ----------------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to average net assets (d) (x.xx)% (c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</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
[X.XX%, X.XX%, X.XX%, X.XX%, and X.XX% for 1998-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1998-1995.]
10
<PAGE> 179
<TABLE>
<CAPTION>
Class B Year Ended December 31,
- ------- -----------------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Total from investment operations (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Distributions from net realized gains (x.xx) (x.xx) (x.xx) (x.xx) (x.xx)
------- ------- ------- ------- -------
Net asset value, end of period $ xx.xx $ xx.xx $ xx.xx $ xx.xx $ xx.xx
------- ------- ------- ------- -------
Total return (a) (x.xx)% (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx $xx,xxx $xx,xxx $xx,xxx
------- ------- ------- ------- -------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx% x.xx% x.xx% x.xx%
------- ------- ------- ------- -------
Ratio of net investment income (loss) to average net assets (e) (x.xx)% (c) (x.xx)% (x.xx)% (x.xx)% (x.xx)%
------- ------- ------- ------- -------
Portfolio turnover rate xx% xx% xx% xx% xx%
------- ------- ------- ------- -------
</TABLE>
(a) Does not deduct contingent deferred 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
[X.XX%, X.XX%, and X.XX%, respectively for 1997-1995.]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursement were [X.XX%, X.XX%, X.XX% and X.XX% for 1997-1995.]
<TABLE>
<CAPTION>
Year For the Period
Ended August 4, through
Class C December 31, December 31,
- ------- 1998 1997
------------ -----------------
<S> <C> <C>
Net asset value, beginning of period $ xx.xx $ xx.xx
------- -------
Income from investment operations:
Net investment income (loss) (x.xx) (x.xx)
------- -------
Net gains on securities (both realized and unrealized) (x.xx) (x.xx)
------- -------
Total from investment operations (x.xx) (x.xx)
------- -------
Distributions from net realized gains (x.xx) (x.xx)
------- -------
Net asset value, end of period $ xx.xx $ xx.xx
------- -------
Total return (a) (x.xx)% (x.xx)%
------- -------
Ratios/supplemental data:
Net assets, end of period (000s omitted) $xx,xxx $xx,xxx
------- -------
Ratio of expenses to average net assets (b) x.xx% (c)(d) x.xx%
------- -------
Ratio of net investment income (loss) to average net assets (e) (x.xx)% (c) (x.xx)%
------- -------
Portfolio turnover rate xx% xx%
------- -------
</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 net assets prior to fee waivers and/or expense reimbursements [is
X.XX% (annualized).]
(c) Ratios are based on average net assets of $XXX,XXX,XXX.
(d) Ratio includes indirectly paid expenses. Excluding indirectly paid
expenses, the ratio of expenses to average net assets would have been
X.XX%.
(e) After fee waivers and/or expense reimbursements. Ratio of net investment
income (loss) to average net assets prior to fee waivers and/or expense
reimbursements [is (X.XX)% (annualized).]
11
<PAGE> 180
Shareholder Information
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Many of the funds advised by the advisor (the AIM Funds) have multiple classes
of shares, each class representing an interest in the same portfolio of
investments. When choosing a share class, you should consider the factors below:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
- - Initial sales charge - No initial sales charge - No initial sales charge
- - Reduced or waived initial sales - Contingent deferred sales - Contingent deferred sales
charge for certain purchases charge on redemptions within six charge on redemptions within
years one year
- - Lower distribution and service - 12b-1 fee of 1.00% - 12b-1 fee of 1.00%
(12b-1) fee than Class B or
Class C shares (See "Fee Table
and Expense Example")
- Converts to Class A shares - Does not convert to Class A
after eight years along with a shares
pro rata portion of its
reinvested dividends and
distributions*
- - Generally more appropriate for - Purchase orders limited to - Generally more appropriate
long-term investors amounts less than $250,000 for short-term investors
</TABLE>
* AIM Money Market Fund: Class B shares convert to AIM Cash Reserve Shares.
AIM Global Trends Fund: If you held Class B shares on May 29, 1998 and
continue to hold them, those shares will convert to Class A shares of that
fund seven years after your date of purchase. If you exchange those shares
for Class B shares of another AIM Fund, the shares into which you exchanged
will not convert to Class A shares until eight years after your date of
purchase of the original shares.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE (12B-1) FEES
Each AIM Fund (except AIM Tax-Free Intermediate Fund) has adopted 12b-1 plans
that allow the AIM Fund to pay distribution fees to A I M Distributors, Inc.
(the distributor) for the sale and distribution of its shares and fees for
services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the AIM Fund pays these fees out of its
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
MCF-03/99
A-1
<PAGE> 181
SALES CHARGES
Generally, you will not pay a sales charge on purchases or redemptions of Class
A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM Money
Market Fund. You may be charged a contingent deferred sales charge if you redeem
AIM Cash Reserve Shares of AIM Money Market Fund acquired through certain
exchanges. Sales charges on all other AIM Funds and classes of those Funds are
detailed below. As used below, the term "offering price" with respect to all
categories of Class A shares includes the initial sales charge.
INITIAL SALES CHARGES
The AIM Funds are grouped into three categories with respect to initial sales
charges. The "Other Information" section of your prospectus will tell you in
what category your particular AIM Fund is classified.
<TABLE>
<CAPTION>
CATEGORY I INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 25,000 5.50% 5.82%
$ 25,000 but less than $ 50,000 5.25 5.54
$ 50,000 but less than $ 100,000 4.75 4.99
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 3.00 3.09
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY II INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 50,000 4.75% 4.99%
$ 50,000 but less than $ 100,000 4.00 4.17
$100,000 but less than $ 250,000 3.75 3.90
$250,000 but less than $ 500,000 2.50 2.56
$500,000 but less than $1,000,000 2.00 2.04
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CATEGORY III INITIAL SALES CHARGES
<S> <C> <C>
- ----------------------------------------------------------
<CAPTION>
INVESTOR'S
SALES CHARGE
------------------------
AMOUNT OF INVESTMENT AS A % OF AS A % OF
IN SINGLE TRANSACTION OFFERING PRICE INVESTMENT
- ----------------------------------------------------------
<S> <C> <C>
Less than $ 100,000 1.00% 1.01%
$100,000 but less than $ 250,000 0.75 0.76
$250,000 but less than $1,000,000 0.50 0.50
- ----------------------------------------------------------
</TABLE>
CONTINGENT DEFERRED SALES CHARGES FOR CLASS A SHARES
You can purchase $1,000,000 or more of Class A shares at net asset value.
However, if you purchase shares of that amount in Categories I or II, they will
be subject to a contingent deferred sales charge (CDSC) of 1% if you redeem them
prior to 18 months after the date of purchase. The distributor may pay a dealer
concession and/or a service fee for purchases of $1,000,000 or more.
CONTINGENT DEFERRED SALES CHARGES FOR
CLASS B AND CLASS C SHARES
You can purchase Class B and Class C shares at their net asset value per share.
However, when you redeem them, they are subject to a CDSC in the following
percentages:
<TABLE>
<CAPTION>
YEAR SINCE
PURCHASE MADE CLASS B CLASS C
- ----------------------------------------------------------
<S> <C> <C>
First 5% 1%
Second 4 None
Third 3 None
Fourth 3 None
Fifth 2 None
Sixth 1 None
Seventh and following None None
- ----------------------------------------------------------
</TABLE>
A-2
<PAGE> 182
REDUCED SALES CHARGES AND SALES CHARGE EXCEPTIONS
You may qualify for reduced sales charges or sales charge exceptions. To qualify
for these reductions or exceptions, you or your financial consultant must
provide sufficient information at the time of purchase to verify that your
purchase qualifies for such treatment.
REDUCED SALES CHARGES
You may be eligible to buy Class A shares at reduced initial sales charge rates
under Rights of Accumulation or Letters of Intent under certain circumstances.
Rights of Accumulation
You may combine your new purchases of Class A shares with Class A shares
currently owned for the purpose of qualifying for the lower initial sales charge
rates that apply to larger purchases. The applicable initial sales charge for
the new purchase is based on the total of your current purchase and the current
value of all Class A shares you own.
Letters of Intent
Under a Letter of Intent (LOI), you commit to purchase a specified dollar amount
of Class A shares of AIM Funds during a 13-month period. The amount you agree to
purchase determines the initial sales charge you pay. If the full face amount of
the LOI is not invested by the end of the 13-month period, your account will be
adjusted to the higher initial sales charge level for the amount actually
invested.
INITIAL SALES CHARGE EXCEPTIONS
You will not pay initial sales charges
- - on shares purchased by reinvesting dividends and distributions;
- - when exchanging shares among certain AIM Funds;
- - when using the reinstatement privilege; and
- - when a merger, consolidation, or acquisition of assets of an AIM Fund occurs.
CONTINGENT DEFERRED SALES CHARGE (CDSC) EXCEPTIONS
You will not pay a CDSC
- - if you redeem Class B shares you held for more than six years;
- - if you redeem Class C shares you held for more than one year;
- - if you redeem shares acquired through reinvestment of dividends and
distributions; and
- - on increases in the net asset value of your shares.
There may be other situations when you may be able to purchase or redeem shares
at reduced or without sales charges. Consult the fund's Statement of Additional
Information for details.
A-3
<PAGE> 183
PURCHASING SHARES
MINIMUM INVESTMENTS PER AIM FUND ACCOUNT
The minimum investments for AIM Fund accounts (except for investments in AIM
Small Cap Opportunities Fund) are as follows:
<TABLE>
<CAPTION>
INITIAL ADDITIONAL
TYPE OF ACCOUNT INVESTMENTS INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings Plans (money-purchase/profit sharing $ 0 ($25 per AIM Fund investment for $25
plans, 401(k) plans, Simplified Employee Pension salary deferrals from Savings Plans)
(SEP) accounts, Salary Reduction (SARSEP)
accounts, Savings Incentive Match Plans for
Employee IRA (Simple IRA) accounts, 403(b) or
457 plans)
Automatic Investment Plans 50 50
IRA, Education IRA or Roth IRA 250 50
All other accounts 500 50
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
HOW TO PURCHASE SHARES
You may purchase shares using one of the options below.
<TABLE>
<CAPTION>
PURCHASE OPTIONS
- ----------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Through a Financial Consultant Contact your financial consultant. Same
By Mail Mail completed Account Application Mail your check and the remittance
and purchase payment to the slip from your confirmation
transfer agent, statement to the transfer agent.
A I M Fund Services, Inc.,
P.O. Box 4739,
Houston, TX 77210-4739.
By Wire Mail completed Account Application Call the transfer agent to receive
to the transfer agent. Call the a reference number. Then, use the
transfer agent at (800) 959-4246 to wire instructions at left.
receive a reference number. Then,
use the following wire
instructions:
Beneficiary Bank ABA/Routing #:
113000609
Beneficiary Account Number:
00100366807
Beneficiary Account Name: A I M
Fund Services, Inc.
RFB: Fund Name, Reference #
OBI: Your Name, Account #
By AIM Bank Connection(SM) Open your account using one of the Mail completed AIM Bank
methods described above. Connection(SM) form to the transfer
agent. Once the transfer agent has
received the form, call the
transfer agent to place your
purchase.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
A-4
<PAGE> 184
SPECIAL PLANS
AUTOMATIC INVESTMENT PLAN
You can arrange for periodic investments in any of the AIM Funds by authorizing
the AIM Fund to withdraw the amount of your investment from your bank account on
a day or dates you specify and in an amount of at least $50. You may stop the
Automatic Investment Plan at any time by giving the transfer agent notice ten
days prior to your next scheduled withdrawal.
DOLLAR COST AVERAGING
Dollar Cost Averaging allows you to make automatic monthly or quarterly
exchanges, if permitted, from one AIM Fund account to one or more other AIM Fund
accounts with the identical registration. The account from which exchanges are
to be made must have a minimum balance of $5,000 before you can use this option.
Exchanges will occur on (or about) the 10th or 25th day of the month, whichever
you specify, in the amount you specify. The minimum amount you can exchange to
another AIM Fund is $50.
AUTOMATIC DIVIDEND INVESTMENT
All of your dividends and distributions may be paid in cash or invested in any
AIM Fund at net asset value. Unless you specify otherwise, your dividends and
distributions will automatically be reinvested in the same AIM Fund. You may
invest your dividends and distributions (1) into another AIM Fund in the same
class of shares; or (2) from Class A shares into AIM Cash Reserve Shares of AIM
Money Market Fund, or vice versa.
You must comply with the following requirements to be eligible to invest your
dividends and distributions in shares of another AIM Fund:
(1) Your account balance (a) in the AIM Fund paying the dividend must be at
least $5,000; or (b) in the AIM Fund receiving the dividend must be at least
$500;
(2) Both accounts must have identical registration information; and
(3) You must have completed an authorization form to reinvest dividends into
another AIM Fund.
PORTFOLIO REBALANCING PROGRAM
If you have at least $5,000 in your account, you may participate in the
Portfolio Rebalancing Program. Under this Program, you can designate how the
total value of your AIM Fund holdings should be rebalanced, on a percentage
basis, between two and ten of your AIM Funds on a quarterly, semiannual or
annual basis. Your portfolio will be rebalanced through the exchange of shares
in one or more of your AIM Funds for shares of the same class of one or more
other AIM Funds in your portfolio. If you wish to participate in the Program,
make changes or cancel the Program, the transfer agent must receive your request
to participate, changes or cancellation in good order at least five business
days prior to the next rebalancing date, which is normally the 28th day of the
last month of the period you choose. We may modify, suspend or terminate the
Program at any time on 60 days' prior written notice.
RETIREMENT PLANS
Shares of most of the AIM Funds can be purchased through
tax-sheltered retirement plans made available to corporations, individuals and
employees of non-profit organizations and public schools. A plan document must
be adopted to establish a retirement plan. You may use AIM Funds-sponsored
retirement plans, which include IRAs, Education IRAs, Roth IRAs, 403(b) plans,
401(k) plans, SIMPLE IRA plans, SEP/SARSEP plans and Money Purchase/Profit
Sharing plans, or another sponsor's retirement plan. The plan custodian of the
AIM Funds-sponsored retirement plan assesses an annual maintenance fee of $10.
Contact your financial consultant for details.
REDEEMING SHARES
REDEMPTION FEES
We will not charge you any fees to redeem your shares; however, your broker or
financial consultant may charge service fees for handling these transactions.
Your shares may be subject to a contingent deferred sales charge (CDSC).
COMPUTING A CDSC
The CDSC on redemptions of shares is computed based on the lower of their
original purchase price or current market value, net of reinvested dividends and
capital gains distributions. In determining whether to charge a CDSC, we will
assume that you have redeemed shares on which there is no CDSC first and, then,
shares in the order of purchase.
REDEMPTION OF AIM CASH RESERVE SHARES OF
AIM MONEY MARKET FUND ACQUIRED BY EXCHANGE
If you redeem AIM Cash Reserve Shares acquired by exchange from Class A shares
subject to a CDSC within eighteen months of the purchase of the Class A shares,
you will be charged a CDSC.
REDEMPTION OF CLASS B SHARES ACQUIRED BY
EXCHANGE FROM AIM FLOATING RATE FUND
If you redeem Class B shares you acquired by exchange via a tender offer by AIM
Floating Rate Fund, the early withdrawal charge applicable to shares of AIM
Floating Rate Fund will be applied instead of the CDSC normally applicable to
Class B shares.
A-5
<PAGE> 185
HOW TO REDEEM SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Through a Financial Contact your financial consultant.
Consultant
By Mail Send a written request to the transfer agent. Requests must
include (1) original signatures of all registered owners;
(2) the name of the AIM Fund and your account number; (3) if
the transfer agent does not hold your shares, endorsed share
certificates or share certificates accompanied by an
executed stock power; and (4) signature guarantees, if
necessary (see below). The transfer agent may require that
you provide additional information, such as corporate
resolutions or powers of attorney, if applicable. If you are
redeeming from an IRA account, you must include a statement
of whether or not you are at least 59 1/2 years old and
whether you wish to have federal income tax withheld from
your proceeds. The transfer agent may require certain other
information before you can redeem from an employer-sponsored
retirement plan. Contact your employer for details.
By Telephone Call the transfer agent. You will be allowed to redeem by
telephone if (1) the proceeds are to be mailed to the
address on record with us or transferred electronically to a
pre-authorized checking account; (2) the address on record
with us has not been changed within the last thirty days;
(3) you do not hold physical share certificates; (4) you can
provide proper identification information; (5) the proceeds
of the redemption do not exceed $50,000; and (6) you have
not previously declined the telephone redemption privilege.
Certain accounts, including retirement accounts and 403(b)
plans, may not redeem by telephone. The transfer agent must
receive your call during the hours the NYSE is open for
business in order to effect the redemption at that day's
closing price.
</TABLE>
- --------------------------------------------------------------------------------
TIMING AND METHOD OF PAYMENT
We normally will send out checks within one business day, and in any event no
more than seven days, after we accept your request to redeem. If you redeem
shares recently purchased by check, you will be required to wait up to ten
business days before we will send your redemption proceeds. This delay is
necessary to ensure that the purchase check has cleared.
REDEMPTION BY MAIL
If you mail us a request in good order to redeem your shares, we will mail you a
check in the amount of the redemption proceeds to the address on record with us.
If your request is not in good order, you may have to provide us with additional
documentation in order to redeem your shares.
REDEMPTION BY TELEPHONE
If you redeem by telephone, we will mail you a check in the amount of the
redemption proceeds to your address of record (if there has been no change
communicated to the transfer agent within the previous 30 days) or transmit them
electronically to your pre-authorized bank account. We use reasonable procedures
to confirm that instructions communicated by telephone are genuine and are not
liable for telephone instructions that are reasonably believed to be genuine.
PAYMENT FOR SYSTEMATIC WITHDRAWALS
You may arrange for regular monthly or quarterly withdrawals from your account
of at least $50. You also may make annual withdrawals if you own Class A shares.
We will redeem enough shares from your account to cover the amount withdrawn.
You must have an account balance of at least $5,000 to establish a Systematic
Withdrawal Plan. You can stop this plan at any time by giving ten days prior
notice to the transfer agent.
EXPEDITED REDEMPTIONS
(AIM Cash Reserve Shares of AIM Money Market Fund only)
If we receive your redemption order before 11:30 a.m. Eastern Time, we will try
to transmit payment of redemption proceeds on that same day. If we receive your
redemption order after 11:30 a.m. Eastern Time and before the close of trading
on the New York Stock Exchange (NYSE), we generally will transmit payment on the
next business day.
REDEMPTIONS BY CHECK
(Class A shares of AIM Tax-Exempt Cash Fund and AIM Cash Reserve Shares of AIM
Money Market Fund only)
You may redeem shares of these AIM Funds by writing checks in amounts of $250 or
more if you have completed an authorization form. Redemption by check is not
available for retirement accounts.
SIGNATURE GUARANTEES
We require a signature guarantee when you redeem by mail and
(1) the amount is greater than $50,000;
(2) you request that payment be made to someone other than the name registered
on the account;
(3) you request that payment be sent somewhere other than the bank of record on
the account; or
(4) you request that payment be sent to a new address or an address that changed
in the last 30 days.
The transfer agent will accept a guarantee of your signature by a number of
financial institutions. Call the transfer agent for additional information. Some
institutions have transaction amount maximums for these guarantees. Please check
with the guarantor institution.
A-6
<PAGE> 186
REINSTATEMENT PRIVILEGE (Class A shares only)
You may, within 90 days after you sell Class A shares (except Class A shares of
AIM Tax-Exempt Cash Fund), reinvest all or part of your redemption proceeds in
Class A shares of any AIM Fund at net asset value in an identically registered
account. If you sold Class A shares of AIM Limited Maturity Treasury Fund or AIM
Tax-Free Intermediate Fund, you will incur an initial sales charge reflecting
the difference between the initial sales charges on those Funds and the ones in
which you will be investing. In addition, if you paid a contingent deferred
sales charge (CDSC) on any reinstated amount, you will not be subject to a CDSC
if you later redeem that amount. You must notify the transfer agent in writing
at the time you reinstate that you are exercising your reinstatement privilege.
You may exercise this privilege only once per year.
REDEMPTIONS BY THE AIM FUNDS
If your account has been open at least one year, you have not made an additional
purchase in the account during the past six calendar months, and the value of
your account falls below $500 for three consecutive months due to redemptions or
exchanges (excluding retirement accounts), the AIM Funds have the right to
redeem the account after giving you 60 days' prior written notice. You may avoid
having your account redeemed during the notice period by bringing the account
value up to $500 or by utilizing the Automatic Investment Plan.
If an AIM Fund determines that you have provided incorrect information in
opening an account or in the course of conducting subsequent transactions, the
AIM Fund may, in its discretion, redeem the account and distribute the proceeds
to you.
EXCHANGING SHARES
You may, under certain circumstances, exchange shares in one AIM Fund for those
of another AIM Fund. Before requesting an exchange, review the prospectus of the
AIM Fund you wish to acquire. Exchange privileges also apply to holders of the
Connecticut General Guaranteed Account, established for tax-qualified group
annuities, for contracts purchased on or before June 30, 1992.
PERMITTED EXCHANGES
Except as otherwise stated below, you may exchange your shares for shares of the
same class of another AIM Fund. You also may exchange AIM Cash Reserve Shares of
AIM Money Market Fund for Class A shares of another AIM Fund, or vice versa. You
may be required to pay an initial sales charge when exchanging from a Fund with
a lower initial sales charge than the one into which you are exchanging. If you
exchange from Class A shares not subject to a CDSC into Class A shares subject
to those charges, you will be charged a CDSC when you redeem the exchanged
shares. The CDSC charged on redemption of those shares will be calculated
starting on the date you acquired those shares through exchange.
YOU WILL NOT PAY A SALES CHARGE WHEN EXCHANGING:
(1) Class A shares with an initial sales charge (except for Class A shares of
AIM Limited Maturity Treasury Fund and AIM Tax-Free Intermediate Fund) for
Class A shares of another AIM Fund or AIM Cash Reserve Shares of AIM Money
Market Fund;
(2) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund for
(a) one another;
(b) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of
AIM Tax-Exempt Cash Fund; or
(c) Class A shares of another AIM Fund, but only if
(i) you acquired the original shares before May 1, 1994; or
(ii) you acquired the original shares on or after May 1, 1994 by way of
an exchange from shares with higher sales charges;
(3) AIM Cash Reserve Shares of AIM Money Market Fund or Class A shares of AIM
Tax-Exempt Cash Fund for
(a) one another;
(b) Class A shares of an AIM Fund subject to an initial sales charge (except
for Class A shares of AIM Limited Maturity Treasury Fund and AIM
Tax-Free Intermediate Fund), but only if you acquired the original
shares
(i) prior to May 1, 1994 by exchange from Class A shares subject to an
initial sales charge;
(ii) on or after May 1, 1994 by exchange from Class A shares subject to
an initial sales charge (except for Class A shares of AIM Limited
Maturity Treasury Fund and AIM Tax-Free Intermediate Fund); or
(c) Class A shares of AIM Limited Maturity Treasury Fund and AIM Tax-Free
Intermediate Fund, but only if you acquired the original shares by
exchange from Class A shares subject to an initial sales charge; or
(4) Class B shares for other Class B shares, and Class C shares for other Class
C shares.
EXCHANGES NOT PERMITTED
You may not exchange Class A shares subject to contingent deferred sales charges
for Class A shares of AIM Limited Maturity Treasury Fund, AIM Tax-Free
Intermediate Fund or AIM Tax-Exempt Cash Fund.
EXCHANGE CONDITIONS
The following conditions apply to all exchanges:
- - You must meet the minimum purchase requirements for the AIM Fund into which
you are exchanging;
- - Shares of the AIM Fund you wish to acquire must be qualified for sale in your
state of residence;
- - Exchanges must be made between accounts with identical registration
information;
A-7
<PAGE> 187
- - The account you wish to exchange from must have a certified tax identification
number (or the Fund has received an appropriate Form W-8 or W-9);
- - Shares must have been held for at least one day prior to the exchange; and
- - If you have physical share certificates, you must return them to the transfer
agent prior to the exchange.
TERMS OF EXCHANGE
Under unusual market conditions, an AIM Fund may delay the issuance of shares
being purchased in an exchange for up to five business days if it determines
that it would be materially disadvantaged by the immediate transfer of exchange
proceeds. There is no fee for exchanges. The exchange privilege is not an option
or right to purchase shares. Any of the participating AIM Funds or the
distributor may modify or discontinue this privilege at any time.
BY MAIL
If you wish to make an exchange by mail, you must include original signatures of
each registered owner exactly as the shares are registered, the account
registration and account number, the dollar amount or number of shares to be
exchanged and the names of the AIM Funds from which and into which the exchange
is to be made.
BY TELEPHONE
Conditions that apply to exchanges by telephone are the same as redemptions by
telephone, including that the transfer agent must receive exchange requests
during the hours the NYSE is open for business; however, you still will be
allowed to exchange by telephone even if you have changed your address of record
within the preceding 30 days.
EXCHANGING CLASS B AND CLASS C SHARES
If you make an exchange involving Class B or Class C shares, the amount of time
you held the original shares will be added to the holding period of the Class B
or Class C shares, respectively, into which you exchanged for the purpose of
calculating contingent deferred sales charges (CDSC) if you later redeem the
exchanged shares. If you redeem Class B shares acquired by exchange via a tender
offer by AIM Floating Rate Fund, you will be credited with the time period you
held the shares of AIM Floating Rate Fund for the purpose of computing the early
withdrawal charge applicable to those shares.
EACH AIM FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR
CANCEL ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY AIM FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS.
PRICING OF SHARES
DETERMINATION OF NET ASSET VALUE
The price of each AIM Fund's shares is the fund's net asset value per share. The
AIM Funds value portfolio securities for which market quotations are readily
available at market value. The AIM Funds value short-term investments maturing
within 60 days at amortized cost, which approximates market value. AIM Money
Market Fund and AIM Tax-Exempt Cash Fund value all their securities at amortized
cost. 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.
The AIM Funds value all other securities and assets at their fair value.
Securities and other assets quoted in foreign currencies are valued in U.S.
dollars based on the prevailing exchange rates on that day. In addition, if,
between the time trading ends on a particular security and the close of the New
York Stock Exchange (NYSE), events occur that materially affect the value of the
security, the AIM Funds may value the security at its fair value as determined
in good faith by or under the supervision of the Board of Directors or Trustees
of the AIM Fund. The effect of using fair value pricing is that an AIM Fund's
net asset value will be subject to the judgment of the Board of Directors or
Trustees or its designee instead of being determined by the market. Because some
of the AIM Funds may invest in securities that are primarily listed on foreign
exchanges, the value of those funds' shares may change on days when you will not
be able to purchase or redeem shares.
Each AIM Fund determines the net asset value of its shares as of the close of
the NYSE on each day the NYSE is open for business. AIM Money Market Fund also
determines its net asset value as of 12:00 noon Eastern Time on each day the
NYSE is open for business.
TIMING OF ORDERS
You can purchase, exchange or redeem shares during the hours the NYSE is open
for business. The AIM Funds price purchase, exchange and redemption orders at
the net asset value calculated after the transfer agent receives an order in
good form. An AIM Fund may postpone the right of redemption only under unusual
circumstances, such as when the NYSE restricts or suspends trading.
TAXES
In general, dividends and distributions you receive are taxable as ordinary
income or long-term capital gains for federal income tax purposes, whether you
reinvest them in additional shares or take them in cash. Distributions are
taxable to you at different rates depending on the length of time the fund holds
its assets. Different tax rates apply to ordinary income and long-term capital
gain distributions, regardless of how long you have held your shares. Every
year, you will be sent information showing the amount of dividends and
distributions you received from each AIM Fund during the prior year.
A-8
<PAGE> 188
Any long-term or short-term capital gains realized from redemptions of AIM
Fund shares will be subject to federal income tax. Exchanges of shares for
shares of another AIM Fund are treated as a sale, and any gain realized on the
transaction will generally be subject to federal income tax.
The foreign, state and local tax consequences of investing in AIM Fund shares
may differ materially from the federal income tax consequences described above.
You should consult your tax advisor before investing.
A-9
<PAGE> 189
[BACK COVER PAGE]
OBTAINING ADDITIONAL INFORMATION
More information may be obtained free of charge upon request. The Statement of
Additional Information (SAI), a current version of which is on file with the
Securities and Exchange Commission (SEC), contains more details about the fund
and is incorporated by reference into the prospectus (is legally a part of this
prospectus). Annual and semiannual reports to shareholders contain additional
information about the fund's investments. The fund's annual report also
discusses the market conditions and investment strategies that significantly
affected the fund's performance during its last fiscal year.
If you have questions about this fund, another fund in The AIM Family of
Funds--Registered Trademark-- or your account, or wish to obtain free copies of
the fund's current SAI or annual or semiannual reports, please contact us:
BY MAIL: A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, TX 77046-1173
BY TELEPHONE: (800) 347-4246
BY E-MAIL: [email protected]
ON THE INTERNET: http://www.aimfunds.com (prospectuses and annual and
semiannual reports only)
You also can obtain copies of the fund's SAI and other information at the SEC's
Public Reference Room in Washington, D.C., on the SEC's website
(http://www.sec.gov) or by sending a letter, including a duplicating fee, to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Please call the SEC
at 1-800- SEC-0330 for information about the Public Reference Room.
AIM Value Fund
SEC 1940 Act file number: 811-1540
<PAGE> 190
Subject to Completion dated February 12, 1999
STATEMENT OF
ADDITIONAL INFORMATION
The information in this Statement of Additional Information is not complete and
may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
Statement of Additional Information is not an offer to sell these securities and
is not soliciting an offer to buy these securities in any state where the offer
or sale is not permitted.
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
(SERIES PORTFOLIOS OF
AIM FUNDS GROUP)
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 3, 1999, RELATING TO
THE AIM BALANCED FUND PROSPECTUS DATED MAY 3, 1999,
THE AIM GLOBAL UTILITIES FUND PROSPECTUS DATED MAY 3, 1999,
THE AIM HIGH YIELD FUND PROSPECTUS DATED MAY 3, 1999,
THE AIM INCOME FUND PROSPECTUS DATED MAY 3, 1999,
THE INTERMEDIATE GOVERNMENT FUND PROSPECTUS DATED MAY 3, 1999,
THE AIM MONEY MARKET FUND PROSPECTUS DATED MAY 3, 1999,
THE AIM MUNICIPAL BOND FUND PROSPECTUS DATED MAY 3, 1999,
THE AIM SELECT GROWTH FUND PROSPECTUS
DATED MAY 3, 1999, AND THE AIM VALUE
FUND PROSPECTUS DATED MAY 3, 1999
<PAGE> 191
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...................................................................................3
Total Return Quotations..............................................................................5
Yield Quotations.....................................................................................7
PORTFOLIO TRANSACTIONS AND BROKERAGE......................................................................9
General Brokerage Policy.............................................................................9
Allocation of Portfolio Transactions................................................................10
Section 28(e) Standards.............................................................................10
Transactions with Regular Brokers...................................................................11
Brokerage Commissions Paid..........................................................................11
Portfolio Turnover: (All Funds except AIM Money Market Fund).......................................12
INVESTMENT STRATEGIES AND RISKS..........................................................................12
All Funds except AIM Money Market Fund..............................................................12
AIM Money Market Fund...............................................................................13
AIM Municipal Bond Fund.............................................................................14
AIM High Yield Fund.................................................................................14
AIM Global Utilities Fund...........................................................................15
AIM Balanced Fund...................................................................................16
Risk Factors Regarding Non-Investment Grade Debt Securities.........................................17
Real Estate Investment Trusts ("REITs").............................................................17
Lending Portfolio Securities: All Funds............................................................18
Covered Call Options: All Funds except AIM Money Market Fund.......................................18
Put Options: AIM Global Utilities Fund, AIM Select Growth Fund and AIM Value Fund...................19
Combined Option Positions: AIM Global Utilities Fund, AIM Select Growth Fund and AIM Value Fund.....19
Short Sales: AIM Balanced Fund and AIM High Yield Fund.............................................19
Futures Contracts: All Funds except AIM Money Market Fund..........................................20
Options on Securities Indexes: AIM Balanced Fund, AIM Global Utilities Fund, AIM Select Growth
Fund and AIM Value Fund.......................................................................20
Options on Futures Contracts: All Funds except AIM Money Market Fund...............................21
Risks as to Futures Contracts and Related Options...................................................22
Delayed Delivery Agreements: All Funds.............................................................22
When-Issued Securities: All Funds..................................................................23
Investments in Foreign Securities: All Funds (except AIM Intermediate Government Fund and AIM
Municipal Bond Fund)..........................................................................23
Foreign Exchange Transactions: All Funds (except AIM Intermediate Government Fund, AIM Money
Market Fund and AIM Municipal Bond Fund)......................................................24
Risk Factors Regarding Foreign Securities...........................................................24
Illiquid Securities.................................................................................25
Rule 144A Securities................................................................................25
Repurchase Agreements...............................................................................26
Reverse Repurchase Agreements.......................................................................26
Dollar Roll Transactions: AIM Income Fund and AIM Intermediate Government Fund......................26
Borrowing...........................................................................................27
</TABLE>
i
<PAGE> 192
<TABLE>
<S> <C>
Investment in Other Investment Companies............................................................27
INVESTMENT RESTRICTIONS..................................................................................27
AIM Balanced Fund...................................................................................27
AIM Global Utilities Fund...........................................................................28
AIM High Yield Fund.................................................................................29
AIM Income Fund.....................................................................................30
AIM Intermediate Government Fund....................................................................31
AIM Money Market Fund...............................................................................31
AIM Municipal Bond Fund.............................................................................32
AIM Select Growth Fund..............................................................................33
AIM Value Fund......................................................................................34
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES......................................................35
MANAGEMENT...............................................................................................38
Trustees and Officers...............................................................................38
INVESTMENT ADVISORY AND OTHER SERVICES...................................................................43
THE DISTRIBUTION PLANS...................................................................................47
THE DISTRIBUTOR..........................................................................................52
SALES CHARGES AND DEALER CONCESSIONS.....................................................................53
REDUCTIONS IN INITIAL SALES CHARGES......................................................................56
Contingent Deferred Sales Charge Exceptions.........................................................59
HOW TO PURCHASE AND REDEEM SHARES........................................................................60
AIM High Yield Fund.................................................................................61
Backup Withholding..................................................................................62
NET ASSET VALUE DETERMINATION............................................................................63
TAX MATTERS..............................................................................................65
DESCRIPTION OF MONEY MARKET INSTRUMENTS..................................................................67
SHAREHOLDER INFORMATION..................................................................................68
MISCELLANEOUS INFORMATION................................................................................71
Charges for Certain Account Information.............................................................71
Audit Reports.......................................................................................71
Legal Matters.......................................................................................71
Custodians and Transfer Agent.......................................................................71
DESCRIPTION OF OBLIGATIONS ISSUED OR GUARANTEED
BY U.S. GOVERNMENT AGENCIES OR INSTRUMENTALITIES....................................................71
RATINGS OF SECURITIES....................................................................................74
FINANCIAL STATEMENTS.....................................................................................FS
</TABLE>
ii
<PAGE> 193
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. The information for AIM
BALANCED FUND is included in a Prospectus dated May 3, 1999. The information for
AIM GLOBAL UTILITIES FUND is included in a Prospectus dated May 3, 1999. The
information for AIM HIGH YIELD FUND is included in a Prospectus dated May 3,
1999. The information for AIM INCOME FUND is included in a Prospectus dated May
3, 1999. The information for AIM INTERMEDIATE GOVERNMENT FUND is included in a
Prospectus dated May 3, 1999. The information for AIM MONEY MARKET FUND is
included in a Prospectus dated May 3, 1999. The information for AIM MUNICIPAL
BOND FUND is included in a Prospectus dated May 3, 1999. The information for AIM
SELECT GROWTH FUND is included in a Prospectus dated May 3, 1999. The
information for AIM VALUE FUND is included in a Prospectus dated May 3, 1999.
Copies of each 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 Prospectuses, and in order to avoid repetition, reference
will be made herein to sections of the Prospectuses. Additionally, the
Prospectuses 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
Prospectuses 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
which is registered under the Investment Company Act of 1940, as amended (the
"1940 Act") as a diversified open-end series management investment company. The
Trust currently is organized under an Amended and Restated Agreement and
Declaration of Trust, dated November 5, 1998, (the "Trust Agreement"). Each Fund
is a series of shares of the Trust. The Trust currently consists of nine
separate portfolios: 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 a
"Fund" and collectively, the "Funds"). 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 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
1
<PAGE> 194
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
(subject, in certain circumstances, to a contingent deferred sales charge) at
the option of the shareholder or at the option of the Trust in certain
circumstances. For information concerning the methods of redemption, investors
should consult the Prospectus under the caption "Redeeming 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 offers three separate classes of shares as follows, except AIM
Money Market Fund,: Class A shares, Class B shares and Class C shares. AIM MONEY
MARKET FUND offers three separate classes of 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.
Class A shares (except for AIM MONEY MARKET FUND), 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 shares and Class B
shareholders of a given Fund (AIM Cash Reserve Shares and Class B shares of AIM
MONEY MARKET FUND) must approve any material increase in fees payable with
respect to the Class A shares of such Fund (AIM Cash Reserve Shares of AIM MONEY
MARKET FUND) 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.
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
2
<PAGE> 195
or subscription rights, and are fully transferable. Other than the automatic
conversion of Class B shares to Class A shares (Class B shares to AIM Cash
Reserve Shares of AIM MONEY MARKET FUND), 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 at least
two-thirds 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, shareholders of a Delaware business trust shall be
entitled to the same limitations of liability extended to shareholders of
private for-profit corporations, however, there is a remote possibility that
shareholders could, under certain circumstances, be held liable for the
obligations of the Trust to the extent the courts of another state which does
not recognize such limited liability were to apply the laws of such state to a
controversy involving such 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 the trustees to all parties, and each
party thereto must expressly waive all rights of action directly against
shareholders of the Trust. The Trust Agreement provides for indemnification out
of the property of a Fund for all losses and expenses of any shareholder of such
Fund held liable on account of being or having been a shareholder. Thus, the
risk of a shareholder incurring financial loss due to shareholder liability is
limited to circumstances in which a Fund would be unable to meet its obligations
and wherein the complaining party was held not to be bound by the disclaimer.
The Trust Agreement further provides that the trustees and officers will
not be liable for any act, omission or obligation of the Trust or any Trustee or
officer. However, nothing in the Trust Agreement protects a trustee or officer
against any liability to the Trust or to the shareholders to which a trustee or
officer would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the conduct of
his office with the Trust. The Trust Agreement provides for indemnification by
the Trust of the trustees, the officers and employees or agents of the Trust, if
it is determined that such person acted in good faith and reasonably believed:
(1) in the case of conduct in his official capacity for the Trust, that his
conduct was in the Trust's best interests, (2) in all other cases, that his
conduct was at least not opposed to the Trust's best interests and (3) in a
criminal proceeding, that he had no reason to believe that his conduct was
unlawful. Such person may not be indemnified against any liability to the Trust
or to the Trust's shareholders to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office. The Trust Agreement also
authorizes the purchase of liability insurance on behalf of trustees and
officers.
PERFORMANCE INFORMATION
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. 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
3
<PAGE> 196
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
below 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 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.
Total return and yield figures for the Funds are neither fixed nor
guaranteed. 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:
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
4
<PAGE> 197
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, Inc.
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 and 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 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.
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).
5
<PAGE> 198
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, 1998, were as follows:
<TABLE>
<CAPTION>
PERIODS ENDED DECEMBER 31, 1998
-------------------------------
CLASS A SHARES: 1 YEAR 5 YEARS 10 YEARS
- -------------- ------ ------- --------
<S> <C> <C> <C>
AIM Balanced Fund ................... 7.10% 15.20% 15.01%
AIM Global Utilities Fund ........... 9.63% 11.83% 13.22%
AIM High Yield Fund ................. -9.63% 6.17% 9.50%
AIM Income Fund ..................... -0.07% 6.62% 9.00%
AIM Intermediate Government Fund .... 3.05% 5.25% 7.29%
AIM Municipal Bond Fund ............. 0.23% 3.98% 6.84%
AIM Select Growth Fund .............. 20.12% 16.79% 14.24%
AIM Value Fund ...................... 25.45% 19.92% 20.75%
</TABLE>
The average annual total returns for each of the named Funds, with
respect to its Class B shares, for the periods ended December 31, 1998, were as
follows:
<TABLE>
<CAPTION>
PERIODS ENDED DECEMBER 31, 1998
-------------------------------
CLASS B SHARES: 1 YEAR 5 YEARS 10 YEARS
- -------------- ------ ------- --------
<S> <C> <C> <C>
AIM Balanced Fund ................... 6.53% 15.15% 13.90%
AIM Global Utilities Fund ........... 10.14% 11.97% 10.16%
AIM High Yield Fund ................. -10.22% 6.11% 6.63%
AIM Income Fund ..................... -0.69% 6.48% 6.07%
AIM Intermediate Government Fund .... 2.40% 5.14% 4.96%
AIM Municipal Bond Fund ............. -0.52% 3.85% 4.14%
AIM Select Growth Fund .............. 21.13% 16.87% 15.64%
AIM Value Fund ...................... 26.70% 20.11% 19.18%
</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 B shares and AIM Cash Reserve Shares, for the year ended
December 31, 1998 were -1.22% and 4.62%, respectively; and since inception
(October 16, 1993) were 3.38% and 4.35%, 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:
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.
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<PAGE> 199
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.
The average annual total returns for each of the Funds, with respect to its
Class C shares, for the periods ended December 31, 1998, were as follows:
<TABLE>
<CAPTION>
PERIODS ENDED DECEMBER 31, 1998
-------------------------------
CLASS C SHARES: 1 YEAR SINCE INCEPTION
- -------------- ------ ---------------
<S> <C> <C>
AIM Balanced Fund 10.60% 11.67%
AIM Global Utilities Fund 14.09% 18.04%
AIM High Yield Fund -6.78% -1.21%
AIM Income Fund 3.23% 6.57%
AIM Intermediate Government Fund 6.31% 7.84%
AIM Money Market Fund 2.78% 3.82%
AIM Municipal Bond Fund 3.36% 4.80%
AIM Select Growth Fund 25.07% 14.63%
AIM Value Fund 30.72% 21.54%
</TABLE>
* The inception date of the Class C shares of the Funds was August 4, 1997.
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.
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.
7
<PAGE> 200
The yields for each of the named Funds were as follows:
<TABLE>
<CAPTION>
30 DAYS ENDED DECEMBER 31, 1998
-------------------------------
CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------- -------------- --------------
<S> <C> <C> <C>
AIM Balanced Fund........................... [ ]% [ ]% [ ]%
AIM Global Utilities Fund................... [ ]% [ ]% [ ]%
AIM High Yield Fund......................... [ ]%* [ ]%* [ ]%*
AIM Income Fund............................. [ ]% [ ]% [ ]%
AIM Intermediate Government Fund............ [ ]% [ ]% [ ]%
AIM Municipal Bond Fund..................... [ ]%** [ ]%** [ ]%**]
</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 [ %, % and %], respectively.
The standard formula for calculating annualized yield for AIM MONEY
MARKET FUND 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 the Fund
0 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 period.
1
The annualized yield for each of the Class B, Class C shares and AIM
Cash Reserve Shares of AIM MONEY MARKET FUND for the 7 days ended December 31,
1998, was [ %, % and %], respectively.
The standard formula for calculating effective annualized yield for AIM
MONEY MARKET FUND 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 B, Class C shares
and AIM Cash Reserve Shares of AIM MONEY MARKET FUND for the 7 days ended
December 31, 1998, was [ %, % and %], respectively.
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.
8
<PAGE> 201
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 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.
9
<PAGE> 202
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 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,
10
<PAGE> 203
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, 1998, 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 High Yield Fund $ --
AIM Intermediate Government Fund --
AIM Money Market Fund --
AIM Value Fund
</TABLE>
As of December 31, 1998, 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 [$ , $ and $ .]
BROKERAGE COMMISSIONS PAID
For the year ended December 31, 1998, 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: [$ , $ , $ and $ ] , 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:
[$ , $ , $ and $ ], 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, 1998, 1997 and 1996.
11
<PAGE> 204
<TABLE>
<CAPTION>
FUND 1998 1997 1996
---- ------- ------- -------
(000) (000) (000)
<S> <C> <C> <C>
AIM Balanced Fund...................... $726 $357
AIM Global Utilities Fund.............. 150 275
AIM High Yield Fund.................... 102 87
AIM Income Fund........................ 28 11
AIM Intermediate Government Fund....... -0- -0-
AIM Municipal Bond Fund................ -0- -0-
AIM Select Growth Fund................. 1,101 929
AIM Value Fund......................... 35,473 29,515
</TABLE>
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 of the Fund's prospectus. 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 "Tax Matters."
INVESTMENT STRATEGIES AND RISKS
The following discussion of investment policies supplements the discussion
of the investment objectives and policies set forth in the Prospectuses under
the headings "Investment Objectives and Strategies" and "Principal Risks of
Investing in the Fund."
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.
A portion of each Fund's assets may be held in cash and high quality,
short-term money market instruments such as certificates of deposit, commercial
paper, bankers' acceptances, short-term U.S. Government obligations, taxable
municipal securities, master notes, 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 90 days or less and normally are held
to maturity. 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. See "Description of Money Market
Instruments." The underlying securities that are subject to a repurchase
agreement will be
12
<PAGE> 205
"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.
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 FNMA). 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 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 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 nationally recognized statistical rating organizations
("NRSROs"), or, if only rated by one NRSRO, are rated in the highest rating
category for short-term debt obligations 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, as well as securities
issued by a registered investment company that is a money market fund and U.S.
government securities.
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 must 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 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,
13
<PAGE> 206
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
For purposes of the Fund's investment policies and limitations, the term
"municipal bonds" includes 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 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."
At least 80% of the Fund's total assets will be invested in municipal
securities rated within the four highest rating categories 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 that are unrated. 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.
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.
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 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
14
<PAGE> 207
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.
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.
Electric utilities and their predominant business, electric energy
generation, transmission and distribution, are undergoing fundamental changes
that may materially affect their financial condition. These changes are
attributable to advancements in technology, as well as deregulation of the
retail sale of electric generation and other aspects of utilities' core
businesses. For example, Federal law and regulations have been amended to
provide for open transmission system access and competitive wholesale sales of
electric generation, and various states are considering, or have adopted
(including California, Illinois, Massachusetts, New Hampshire, New York, and
Pennsylvania), new regulatory structures to allow access by some or all
customers to energy suppliers in addition to the local utility.
Competition in electric generation is expected to create new uncertainties
in the electric utility industry. These uncertainties include future prices of
electricity in both the wholesale and retail markets, potential changes in the
composition of utilities' customer base and supply and demand volatility.
Specifically, it is expected that state deregulation of electric generating
operations will result in price pressures that will reduce the future revenues
of utilities in such states. In addition, to the extent a utility loses retail
customers, it may have to sell generation previously used to serve retail
customers in the wholesale market. Since margins in the wholesale market are
currently lower than in the retail market, this change could further reduce
revenues and adversely affect the profit margins of affected utilities.
Furthermore, the ability of utilities to compete in the retail electric
generation market may be compromised by the costs of earlier investments in
generation facilities such as nuclear power plants. While the trend in this area
has been to allow utilities to recover such costs through the imposition of
surcharges on customers' bills, not every state that deregulates its retail
electric generation market may do so. It is also unknown at this time whether
the existing state statutory schemes designed to address the loss of investments
suffered by
15
<PAGE> 208
deregulated utilities will adequately compensate such utilities or place them in
a position to effectively compete with new market entrants who are not
encumbered by these investments.
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.
In addition, the gas industry is continuing to undergo structural changes
in response to federal policies designed to increase competition. These policies
have required interstate gas pipelines to unbundle their gas sales service from
other regulated tariff services, such as transportation and storage. There are
also initiatives in several states, such as Pennsylvania, to deregulate the gas
industry.
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.
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.
AIM BALANCED FUND
Most debt securities purchased by the Fund 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.
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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.
REAL ESTATE INVESTMENT TRUSTS ("REITs")
To the extent consistent with their respective investment objectives and
policies, AIM BALANCED FUND, AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND
and AIM VALUE FUND may each invest up to 25% of its total assets and AIM INCOME
FUND and AIM HIGH YIELD FUND may each invest up to 10% of its net assets in
equity and/or debt securities issued by REITs.
REITs are trusts which sell equity or debt securities to investors and use
the proceeds to invest in real estate or interests therein. A REIT may focus on
particular projects, such as apartment complexes, or geographic regions, such as
the Southeastern United States, or both.
To the extent that a Fund has the ability to invest in REITs, such Fund
could conceivably own real estate directly as a result of a default on the
securities it owns. A Fund, therefore, may be subject to certain risks
associated with the direct ownership of real estate including difficulties in
valuing and trading real estate, declines in the value of real estate, risks
related to general and local economic conditions, adverse changes in the climate
for real estate, environmental liability risks, increases in property taxes and
operating expenses, changes in zoning laws, casualty or condemnation losses,
limitations on rents, changes in neighborhood values, the appeal of properties
to tenants, and increases in interest rates.
In addition to the risks described above, equity REITs may be affected by
any changes in the value of the underlying property owned by the trusts, while
mortgage REITs may be affected by the quality of any credit extended. Equity and
mortgage REITs are dependent upon management skill, are not diversified, and are
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therefore subject to the risk of financing single or a limited number of
projects. Such trusts are also subject to heavy cash flow dependency, defaults
by borrowers, self-liquidation, and the possibility of failing to maintain
exemption from the 1940 Act. Changes in interest rates may also affect the value
of debt securities held by a Fund. By investing in REITs indirectly through a
Fund, a shareholder will bear not only his/her proportionate share of the
expenses of the Fund, but also, indirectly, similar expenses of the REITs.
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 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.
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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
Each of AIM GLOBAL UTILITIES FUND, AIM SELECT GROWTH FUND and AIM VALUE
FUND, 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.
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
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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.
OPTIONS ON SECURITIES INDEXES: AIM BALANCED FUND, AIM GLOBAL UTILITIES FUND,
AIM SELECT GROWTH FUND AND AIM VALUE FUND
In addition, each of the Funds may purchase put options or write call
options on securities indexes for the purpose of providing a partial hedge
against a decline in the value of their respective portfolio securities. The
premium paid for a put option plus any transaction costs for a put or call
option will reduce the benefit, if any, realized by the Fund upon exercise or
liquidation of the option. Unless the level of the securities index changes by
an amount in excess of the premium paid, the put option may expire without value
to the Fund.
Options are subject to certain risks, including the risk of imperfect
correlation between the value of the option and the applicable Fund's other
investments and the risk that there may not be a liquid secondary market for the
option when the Fund seeks to hedge against adverse market movements. This may
cause the Fund to lose the entire premium on purchased options or reduce its
ability to effect closing transactions at favorable prices.
No Fund may purchase or sell futures contracts, purchase or sell related
options, or purchase or sell options on securities indexes if, immediately
thereafter, the sum of the amount of initial margin deposits and premiums on
open positions with respect to futures contracts, related options and options on
securities indexes would exceed 5% of the market value of a Fund's total assets.
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:
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Stock Index Futures Contracts - AIM BALANCED FUND, AIM GLOBAL UTILITIES
FUND, AIM SELECT GROWTH FUND and AIM VALUE FUND ("Equity Funds")
Each of the Equity Funds may purchase and sell stock index futures
contracts in order to hedge the value of their respective portfolios against
changes in market conditions. 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 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")
Each of the Debt Funds may purchase and sell interest rate futures
contracts in order to hedge the value of their respective portfolios against
changes in market conditions. 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.
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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 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
Each Fund may purchase or sell securities on a delayed delivery basis.
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. AIM INTERMEDIATE GOVERNMENT FUND also may engage in buy/sellback
transactions (a form of delayed delivery agreement). In a buy/sellback
transaction, the Fund enters a trade to sell securities at one price and
simultaneously enters a trade to buy the same securities at another price for
settlement at a future date. 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
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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.
WHEN-ISSUED SECURITIES: ALL FUNDS
Each Fund may purchase securities 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).
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 engage 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.
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,
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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 either for the settlement of
transactions or as a hedge against possible variations in the foreign exchange
rates between those currencies. 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 foreign
currency exposure and may involve either specific transactions or portfolio
positions. Transaction hedging is the purchase or sale of 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 (or underlying portfolio security positions,
such as in an ADR) 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
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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.
On January 1, 1999, certain members of the European Economic and Monetary
Union ("EMU"), namely Austria, Belgium, Finland, France, Germany, Ireland,
Italy, Luxembourg, the Netherlands, Portugal, and Spain established a common
European currency known as the "euro" and each member's local currency became a
denomination of the euro. It is anticipated that each participating country will
replace its local currency with the euro on July 1, 2002. Any other European
country that is a member of the European Union and satisfies the criteria for
participation in the EMU may elect to participate in the EMU and may supplement
its existing currency with the euro. The anticipated replacement of existing
currencies with the euro on July 1, 2002 could cause market disruptions before
or after July 1, 2002 and could adversely affect the value of securities held by
a Fund.
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.
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 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
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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.
REPURCHASE AGREEMENTS
Each of the Funds may engage in repurchase agreement transactions involving
the types of securities in which it is permitted to invest. Repurchase
Agreements are 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 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 up to 25% 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 (as defined in Rule
2a-7), 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
Reverse repurchase agreements are 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.
DOLLAR ROLL TRANSACTIONS: AIM INCOME FUND AND AIM INTERMEDIATE GOVERNMENT FUND
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
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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.
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.
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
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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 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.
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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.
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.
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AIM INTERMEDIATE GOVERNMENT 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, 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
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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.
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 or
32
<PAGE> 225
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.
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.
33
<PAGE> 226
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.
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.
34
<PAGE> 227
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. As a non-fundamental policy, AIM INTERMEDIATE GOVERNMENT
FUND will maintain a dollar-weighted average portfolio maturity of between three
and ten years.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of April 1, 1999, 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 [ ]% of the outstanding AIM Cash
Reserve Shares of AIM MONEY MARKET FUND, and [ ]% 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 April 1, 1999, 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 - [ ] % -0-
Class A shares
Class B shares [ ] % -0-
Class C shares [ ] % -0-
AIM Global Utilities Fund - [ ] % -0-
Class B shares
Class C shares [ ] % -0-
AIM High Yield Fund - [ ] % -0-
Class A shares
</TABLE>
- --------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
35
<PAGE> 228
<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 [ ] % -0-
Class C shares [ ] % -0-
AIM Income Fund - [ ] % -0-
Class A shares
Class B shares [ ] % -0-
Class C shares [ ] % -0-
AIM Intermediate Government Fund - [ ] % -0-
Class A shares
Class B shares [ ] % -0-
Class C shares [ ] % -0-
</TABLE>
- --------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
36
<PAGE> 229
<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 - [ ] % -0-
Class C shares
AIM Cash Reserve Shares [ ] % -0-
AIM Municipal Bond Fund - [ ] % -0-
Class B shares
Class C shares [ ] % -0-
AIM Select Growth Fund - [ ] % -0-
Class B shares
Class C shares [ ] % -0-
AIM Value Fund - [ ] % -0-
Class A shares
Class B shares [ ] % -0-
Class C shares [ ] % -0-
</TABLE>
- --------------
* The Trust has no knowledge as to whether all or any portion of the shares
owned of record are also owned beneficially.
37
<PAGE> 230
MANAGEMENT
The overall management of the business and affairs of the Funds and the
Trust is vested in the 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. The day-to-day
operations of each Fund are delegated to the officers of the Trust and to AIM,
subject always to the objective(s) 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.
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 (80) 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 (55) 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).
OWEN DALY II (74) 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.
EDWARD K. DUNN, JR. (63) Trustee Chairman of the Board of Directors, Mercantile Mortgage
Mercantile Mortgage Corp. Corp. Formerly, Vice Chairman of the Board of Directors
P. O. Box 1477 and President, Mercantile-Safe Deposit & Trust Co.; and
Baltimore, MD 21203 President, Mercantile Bankshares.
JACK FIELDS (47) Trustee Chief Executive Officer, Texana Global, Inc. (foreign
Jetero Plaza, Suite E trading company) and Twenty First Century Group, Inc.
8810 Will Clayton Parkway (governmental affairs company). Formerly, Member of
Humble, TX 77338 the U.S. House of Representatives.
</TABLE>
- -----------
* A trustee who is an "interested person" of the Trust and A I M Advisors,
Inc. as defined in the 1940 Act.
38
<PAGE> 231
<TABLE>
<CAPTION>
POSITIONS
HELD WITH PRINCIPAL OCCUPATION DURING AT LEAST
NAME, ADDRESS AND AGE REGISTRANT THE PAST 5 YEARS
- ------------------------------ ---------- ----------------------------------------------------
<S> <C> <C>
**CARL FRISCHLING (62) Trustee Partner, Kramer, Levin, Naftalis & Frankel LLP (law firm).
919 Third Avenue Formerly, Partner, Reid & Priest (law firm).
New York, NY 10022
*ROBERT H. GRAHAM (52) 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.
PREMA MATHAI-DAVIS (48) Trustee Chief Executive Officer, YWCA of the U.S.A.;
350 Fifth Avenue, Suite 301 Commissioner, New York City Department for the Aging;
New York, NY 10118 and Member of the Board of Directors, Metropolitan
Transportation Authority of New York State.
LEWIS F. PENNOCK (56) Trustee Attorney in private practice in Houston, Texas.
6363 Woodway, Suite 825
Houston, TX 77057
IAN W. ROBINSON (76) Trustee Formerly, Executive Vice President and Chief Financial
183 River Drive Officer, Bell Atlantic Management Services, Inc. (provider
Tequesta, FL 33469 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 (59) Trustee Executive Vice President, Development and Operations,
Transco Tower, 50th Floor Hines Interests Limited Partnership (real estate development).
2800 Post Oak Blvd.
Houston, TX 77056
***JOHN J. ARTHUR (54) Senior Vice Director, Senior Vice President, A I M Advisors, Inc.; and
President and Vice President and Treasurer, A I M Management Group
Treasurer Inc.
GARY T. CRUM (51) 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.
</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.
*** Mr. Arthur and Ms. Relihan are married to each other.
39
<PAGE> 232
<TABLE>
<CAPTION>
POSITIONS
HELD WITH PRINCIPAL OCCUPATION DURING AT LEAST
NAME, ADDRESS AND AGE REGISTRANT THE PAST 5 YEARS
- ------------------------------ ---------- ----------------------------------------------------
<S> <C> <C>
***CAROL F. RELIHAN (44) Senior Vice Director, Senior Vice President, General Counsel and
President Secretary, A I M Advisors, Inc.; Senior Vice President,
and Secretary General Counsel and Secretary, A I M Management
Group Inc.; Director, Vice President and General Counsel,
Fund Management Company; Vice President and General Counsel,
A I M Fund Services, Inc.; and Vice President, A I M Capital
Management, Inc. and A I M Distributors, Inc.
DANA R. SUTTON (40) 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 (50) Vice President Senior Vice President, A I M Capital Management, Inc.;
and Vice President, A I M Advisors, Inc.
STUART W. COCO (43) Vice President Senior Vice President, A I M Capital Management, Inc.;
and Vice President, A I M Advisors, Inc.
MELVILLE B. COX (55) 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 (38) Vice President Senior Vice President, A I M Capital Management, Inc.;
and Vice President, A I M Advisors, Inc.
JONATHAN C. SCHOOLAR (37) 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, Dunn,
Fields, Frischling, Pennock, Robinson (Chairman), Sklar and Ms. Mathai-Davis.
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, Dunn, Fields, Frischling, Pennock, Robinson, Sklar (Chairman) and Ms.
Mathai-Davis. 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.
- -------------
*** Mr. Arthur and Ms. Relihan are married to each other.
40
<PAGE> 233
The members of the Nominating and Compensation Committee are Messrs.
Crockett (Chairman), Daly, Dunn, Fields, Pennock, Robinson, Sklar and Ms.
Mathai-Davis. 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.
Set forth below is information regarding compensation paid or accrued
for each trustee of the Trust during the year ended December 31, 1998:
<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
Owen Daly II
Jack Fields
Carl Frischling(4)
Robert H. Graham 0 0 0
John F. Kroeger(5)
Prema Mathai-Davis
Lewis F. Pennock
Ian W. Robinson
Louis S. Sklar
</TABLE>
- -------------
(1) The total amount of compensation deferred by all Trustees of the Trust
during the fiscal year ended December 31, 1998, including amounts earned
thereon, was $[ ].
41
<PAGE> 234
(2) During the fiscal year ended December 31, 1998, the total amount of
expenses allocated to the Trust in respect of such retirement benefits was $[ ].
Data reflect compensation estimated for the calendar year ended December 31,
1998.
(3) Each Trustee serves as a director or trustee of a total of 12
registered investment companies advised by AIM. Data reflect total compensation
for the calendar year ended December 31, 1998.
(4) During the year ended December 31, 1998, AIM BALANCED FUND, AIM GLOBAL
UTILITIES FUND, AIM HIGH YIELD FUND, AIM INCOME FUND, AIM INTERMEDIATE
GOVERNMENT FUND, AIM MONEY MARKET FUND, AIM MUNICIPAL BOND FUND, AIM SELECT
GROWTH FUND, and AIM VALUE FUND each paid [$ , $ , $ , $ , $ , $ ,
$ , $ , and $ ], respectively, in legal fees to Mr. Frischling's law
firm, Kramer, Levin, Naftalis & Frankel LLP for services rendered.
(5) Mr. Kroeger was a trustee until June 11, 1998, when he resigned. On
that date he became a consultant to the Trust. Of the amount listed above, $ was
for compensation for services as a trustee and the remainder as a consultant.
Mr. Kroeger passed away on November 26, 1998. Mr. Kroeger's widow will receive
his pension as described below under "AIM Funds Retirement Plan for Eligible
Directors/Trustees."
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, AIM Management 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 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, Dunn, Fields, Frischling, Kroeger, Pennock,
Robinson, Sklar and Ms. Mathai-Davis are 11, 11, 0, 1, 21, 20, 17, 11, 9 and
0 years, respectively.
42
<PAGE> 235
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT
<TABLE>
<CAPTION>
Number of Years Annual [Retainer]
of Service With [Compensation]
Applicable AIM Paid By All
Funds Applicable
AIM Funds
$90,000
--------------- -----------------
<S> <C>
10 $67,500
9 $60,750
8 $54,000
7 $47,250
6 $40,500
5 $33,750
</TABLE>
Deferred Compensation Agreements
Messrs. Daly, Dunn, Fields, Frischling, 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 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
AIM was organized in 1976, and along with its subsidiaries, manages or
advises over 110 investment portfolios encompassing a broad range of investment
objectives. The address of AIM is 11 Greenway Plaza, Suite 100, Houston, Texas
77046. 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 institutional investment
management and retail mutual fund businesses in the United States, Europe and
the Pacific Region. Certain of the directors and officers of AIM are also
executive officers of the Trust and their affiliations are shown under
"Management" herein.
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
43
<PAGE> 236
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.
The Trust, on behalf of each Fund, has entered into a Master Investment
Advisory Agreement and a Master Administrative Services Agreement with AIM. The
Master Investment Advisory Agreement will continue 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 by votes
cast in person at a meeting called for such purpose. The agreement 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.
Under the terms of the Master Investment Advisory Agreement, AIM
supervises all aspects of the Funds' 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. AIM will not be liable to the Funds or their shareholders except in the
case of AIM's willful misfeasance, bad faith, gross negligence or reckless
disregard of duty.
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:
<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:
44
<PAGE> 237
<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:
<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).
In order to increase the return to investors, AIM may from time to time
waive or reduce its fee or reimburse expenses, while retaining its ability to be
reimbursed for such fee prior to the end of each fiscal year. AIM is currently
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 may not be terminated without
approval of the Board of Trustees. During the year ended December 31, 1998, AIM
VALUE FUND waived [0.02%] in advisory fees.
45
<PAGE> 238
Each Fund paid to AIM the following management fees net of any expense
limitations and fee waivers for the years ended December 31, 1998, 1997 and
1996:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
AIM Balanced Fund..................... $ $ 4,789,939 $ 2,151,655
AIM Global Utilities Fund............. $ 1,440,692 1,397,762
AIM High Yield Fund................... $ 13,632,090 9,277,005
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
AIM Income Fund....................... $ 1,801,746 1,510,254
AIM Intermediate Government Fund...... $ 1,174,166 1,188,121
AIM Money Market Fund................ $ 4,586,148 4,136,659
AIM Municipal Bond Fund............... $ 1,532,157 1,417,007
AIM Select Growth Fund................ $ 3,901,342 2,874,943
AIM Value Fund........................ $ 72,810,450 50,259,125
</TABLE>
For the fiscal years ended December 31, 1998, 1997 and 1996, AIM waived
advisory fees for each Fund as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<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- -0-
AIM Select Growth Fund................ -0- -0- -0-
AIM Value Fund........................ [-0-] $2,501,999 $1,562,359
</TABLE>
For the fiscal years ended December 31, 1998, 1997 and 1996, AIM reimbursed
expenses as follows:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<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- -0-
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 will continue
from year to year only if such continuance is specifically approved at least
annually by the Trust's Board of Trustees, including the "dis-interested"
trustees, by votes cast in person at a meeting called for such purpose.
46
<PAGE> 239
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,
1998, 1997 and 1996:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
AVERAGE AVERAGE AVERAGE
AMOUNT PAID NET ASSETS AMOUNT PAID NET ASSETS AMOUNT PAID NET ASSETS
----------- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
AIM Balanced Fund...................... $ .00% 87,375 .01% $ 72,493 .02%
AIM Global Utilities Fund.............. .00% 77,375 .03% 80,256 .03%
AIM High Yield Fund.................... .00% 111,767 .004% 98,734 .01%
AIM Income Fund........................ .00% 81,464 .02% 75,132 .02%
AIM Intermediate Government Fund....... .00% 70,736 .03% 71,348 .03%
AIM Money Market Fund.................. .00% 68,947 .01% 58,665 .01%
AIM Municipal Bond Fund................ .00% 70,780 .02% 71,857 .02%
AIM Select Growth Fund................. .00% 74,201 .01% 72,903 .02%
AIM Value Fund......................... .00% 225,784 .002% 196,586 .002%
</TABLE>
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 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 (other
than AIM MONEY MARKET FUND) 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% per annum 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. 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. 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 (or AIM Cash Reserve Shares) of each
Fund and who provide continuing personal services to their customers who own
such shares of a 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. 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.
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 the Fund
attributable to the customers of such dealers or financial institutions are
characterized as a service fee, and payments to dealers
47
<PAGE> 240
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. Payments pursuant to the Plans are subject to any
applicable limitations imposed by rules of the National Association of
Securities Dealers, Inc.
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. Any amounts not
paid as a service fee would constitute an asset-based sales charge. 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.
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 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.
The Trust may also enter into Variable Group Annuity Contractholder
Service Agreements ("Variable Contract Agreements") on behalf of the Funds
(other than AIM MONEY MARKET FUND) authorizing payments to selected insurance
companies offering variable annuity contracts to employers as funding vehicles
for retirement plans qualified under Section 401(a) of the Code. Services
provided pursuant to such Variable Contract Agreements may include some or all
of the following: answering inquiries regarding the Fund and the Trust;
performing sub-accounting; establishing and maintaining contractholder accounts
and records; processing and bunching purchase and redemption transactions;
providing periodic statements of contract account balances;
48
<PAGE> 241
forwarding such reports and notices to contractholders relative to the Fund as
deemed necessary; generally, facilitating communications with contractholders
concerning investments in a Fund on behalf of plan participants; and performing
such other administrative services as deemed to be necessary or desirable, to
the extent permitted by applicable statute, rule or regulation to provide such
services.
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 may in its discretion from time to time agree to waive
voluntarily all or any portion of its 12b-1 fee for Class A and Class C shares,
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 Fund 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 dealer incentive and shareholder servicing payments under the Plans.
These payments are an obligation of the Funds and not of AIM Distributors. The
Funds will obtain a representation from such financial institutions that they
will either be licensed as dealers as required under applicable state law, or
that they will not engage in activities which would constitute acting as a
"dealer" as defined under applicable state law.
For the year ended December 31, 1998 (the period from January 1, 1998
to December 21, 1998 for Class A shares of AIM MONEY MARKET FUND), the various
classes of the Funds paid to AIM Distributors the following amounts pursuant to
the Plans:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------- -------------- --------------
<S> <C> <C> <C>
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........................
</TABLE>
For the year ended December 31, 1998, the AIM Cash Reserve Shares of
AIM MONEY MARKET FUND paid [$ ] to AIM Distributors pursuant to the Class A
and C Plan.
49
<PAGE> 242
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, 1998 (the period from January 1, 1998 to December 21, 1998 for
Class A shares of AIM MONEY MARKET FUND), was as follows:
<TABLE>
<CAPTION>
PRINTING COMPENSATION
ADVERTISING AND MAILING SEMINARS TO DEALERS
----------- ----------- -------- ------------
<S> <C> <C> <C> <C>
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.........................
</TABLE>
During the year ended December 31, 1998, 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: $[ ] was spent on advertising,
$[ ] was spent on printing and mailing, $[ ] was spent on seminars and $[ ] 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, 1998, was as
follows:
<TABLE>
<CAPTION>
COMPENSATION COMPENSATION
PRINTING AND TO TO
ADVERTISING MAILING SEMINARS UNDERWRITERS DEALERS
----------- ------------ ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
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.........................
</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 during the year ended
December 31, 1998, was as follows:
<TABLE>
<CAPTION>
COMPENSATION COMPENSATION
PRINTING AND TO TO
ADVERTISING MAILING SEMINARS UNDERWRITERS DEALERS
----------- ------------ ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
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.........................
</TABLE>
50
<PAGE> 243
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.
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.
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 from year to year as long as such continuance is specifically approved
at least annually by the Board of Trustees, including a majority of the
Independent Trustees.
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.
51
<PAGE> 244
THE DISTRIBUTOR
The Trust has entered into master distribution agreements relating to
the Funds (the "Distribution Agreements") 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.
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 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.
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<PAGE> 245
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.
From time to time, AIM Distributors may transfer and sell its right to
payments under the Distribution Agreements relating to Class B shares in order
to finance distribution expenditures in respect of Class B shares.
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, 1998, 1997 and 1996:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
SALES AMOUNT SALES AMOUNT SALES AMOUNT
CHARGES RETAINED CHARGES RETAINED CHARGES RETAINED
------- -------- ----------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
AIM Balanced Fund..................... $ $ $ 4,100,493 $ 672,146 $ 3,212,414 $ 611,603
AIM Global Utilities Fund............. 376,255 57864 545,746 95,058
AIM High Yield Fund................... 12,115,351 2,043,967 10,452,011 1,965,594
AIM Income Fund....................... 1,158,790 203,261 1,346,651 248,078
AIM Intermediate Government Fund...... 648,578 116,124 1.056,724 204,498
AIM Money Market Fund................. 2,470,808 443,904 3,696,001 736,782
AIM Municipal Bond Fund............... 480,346 87,434 624,162 122,269
AIM Select Growth Fund................ 895,672 143,669 1,266,626 219,373
AIM Value Fund........................ 31,118,672 4,660,735 46,277,225 7,792,991
</TABLE>
The following chart reflects the contingent deferred sales charges paid
by Class A and Class B shareholders for the years ended December 31, 1998, 1997
and 1996, and by Class C shareholders for the year ended December 31, 1998 and
for the period from August 4, 1997 through December 31, 1997:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
AIM Balanced Fund............................................ $ $ 99,075 $ 50,028
AIM Global Utilities Fund.................................... 88,250 145,184
AIM High Yield Fund.......................................... 581,549 976,702
AIM Income Fund.............................................. 45,242 65,445
AIM Intermediate Government Fund............................. 131,697 82,525
AIM Money Market Fund........................................ 344,545 211,316
AIM Municipal Bond Fund...................................... 44,830 49,906
AIM Select Growth Fund....................................... 109,547 105,215
AIM Value Fund............................................... 1,752,662 1,988,299
</TABLE>
SALES CHARGES AND DEALER CONCESSIONS
CATEGORY 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 Basic Value Fund, AIM Blue Chip Fund, AIM Capital Development Fund, AIM
Charter Fund, AIM Constellation Fund, AIM European
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<PAGE> 246
Development Fund, AIM Europe Growth Fund, AIM Global Utilities Fund, AIM Global
Growth & Income Fund, AIM International Equity Fund, AIM Japan Growth Fund, AIM
Large Cap Growth Fund, AIM Mid Cap Equity Fund, AIM New Pacific Growth Fund, AIM
Select Growth Fund, AIM Small Cap Growth Fund, AIM Small Cap Opportunities 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>
CATEGORY 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 Developing Markets Fund, AIM Emerging
Markets Debt Fund, AIM Global Aggressive Growth Fund, AIM Global Consumer
Products and Services Fund, AIM Global Financial Services Fund, AIM Global
Government Income Fund, AIM Global Growth Fund, AIM Global Health Care Fund, AIM
Global Income Fund, AIM Global Infrastructure Fund, AIM Global Resources Fund,
AIM Global Telecommunications Fund, AIM Global Trends Fund, AIM High Income
Municipal Fund, AIM High Yield Fund, AIM High Yield Fund II, AIM Income Fund,
AIM Intermediate Government Fund, AIM Latin American Fund, AIM Municipal Bond
Fund, AIM Strategic Income 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>
CATEGORY 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.
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<PAGE> 247
<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 as set forth below.
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. 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. 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.
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<PAGE> 248
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.
AIM Distributors may pay investment dealers or other financial service
firms for share purchases (measured on an annual basis) of Class A Shares of all
AIM Funds except AIM Limited Maturity Treasury Fund, AIM Tax-Free Intermediate
Fund and AIM Tax-Exempt Cash Fund sold at net asset value to an employee benefit
plan 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.
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 AIM Funds will not be taken into account in
determining whether a purchase qualifies for a reduction in initial sales
charges.
The term "purchaser" means:
o 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);
o 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"), if:
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;
o 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;
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<PAGE> 249
o a Simplified Employee Pension (SEP), Salary Reduction and other
Elective Simplified Employee Pension account (SAR-SEP) or a
Savings Incentive Match Plans for Employees IRA (SIMPLE IRA),
where the employer has notified the distributor in writing that
all of its related employee SEP, SAR-SEP or SIMPLE IRA accounts
should be linked; or
o 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.
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 virtue 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 AIM 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.
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<PAGE> 250
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 AIM 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 AIM
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; (b) exchanges of shares of certain other funds; (c) use of the
reinstatement privilege; or (d) a merger, consolidation or acquisition of assets
of a fund.
The following purchasers will not pay initial sales charges on
purchases of Class A shares because there is a reduced sales effort involved in
sales to these purchasers:
o AIM Management and its affiliates, or their clients;
o Any current or retired officer, director or employee (and members
of their immediate family) of AIM Management, its affiliates or
The AIM Family of Funds,--Registered Trademark-- and any
foundation, trust or employee benefit plan established
exclusively for the benefit of, or by, such persons;
o Any current or retired officer, director, or employee (and
members of their immediate family), of CIGNA Corporation or its
affiliates, or of First Data Investor Services Group; and any
deferred compensation plan for directors of investment companies
sponsored by CIGNA Investments, Inc. or its affiliates;
o Sales representatives and employees (and members of their
immediate family) of selling group members or financial
institutions that have arrangements with such selling group
members;
o Purchases through approved fee-based programs;
o Employee benefit plans designated as qualified purchasers as
defined above, provided the initial investment in the Fund(s) is
at least $1 million; the sponsor signs a $1 million LOI; the
employer-sponsored plan has at least 100 eligible employees; or
all plan transactions are executed through a single omnibus
account per Fund and the financial institution or service
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<PAGE> 251
organization has entered into the appropriate agreement with the
distributor. Section 403(b) plans sponsored by public educational
institutions are not eligible for a sales charge exception based
on the aggregate investment made by the plan or the number of
eligible employees. Purchases of AIM Small Cap Opportunities Fund
by such plans are subject to initial sales charges;
o Shareholders of record of Advisor Class shares of AIM
International Growth Fund or AIM Worldwide Growth Fund on
February 12, 1999 who have continuously owned shares of the AIM
Funds.
o Shareholders of record or discretionary advised clients of any
investment advisor holding shares of AIM Weingarten Fund or AIM
Constellation Fund on September 8, 1986, or of AIM Charter Fund
on November 17, 1986, who have continuously owned shares having a
market value of at least $500 and who purchase additional shares
of the same Fund;
o Unitholders of G/SET series unit investment trusts investing
proceeds from such trusts in shares of AIM Weingarten Fund or AIM
Constellation Fund; provided, however, prior to the termination
date of the trusts, a unitholder may invest proceeds from the
redemption or repurchase of his units only when the investment in
shares of AIM Weingarten Fund and AIM Constellation Fund is
effected within 30 days of the redemption or repurchase;
o A shareholder of a fund that merges or consolidates with an AIM
Fund or that sells its assets to an AIM Fund in exchange for
shares of an AIM Fund;
o Shareholders of the GT Global funds as of April 30, 1987 who
since that date continually have owned shares of one or more of
these funds; and
o Certain former AMA Investment Advisers' shareholders who became
shareholders of the AIM Global Health Care Fund in October 1989,
and who have continuously held shares in the GT Global funds
since that time.
As used above, immediate family includes an individual and his or her
spouse, children, parents and parents of spouse.
CONTINGENT DEFERRED SALES CHARGE EXCEPTIONS
CDSCs will not apply to the following:
o Additional purchases of Class C 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,
except that shareholders whose broker-dealers maintain a single
omnibus account with AFS 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;
o Redemptions following the death or post-purchase disability of
(1) any registered shareholders on an account or (2) a settlor of
a living trust, of shares held in the account at the time of
death or initial determination of post-purchase disability;
o Certain distributions from individual retirement accounts,
Section 403(b) retirement plans, Section 457 deferred
compensation plans and Section 401 qualified plans, where
redemptions result 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 that
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 the distributor of the transfer no later than the time
the transfer occurs; (iii) tax-free rollovers or transfers of
assets to another plan of the type described above invested in
Class B or Class C shares of one or more of the AIM Funds; (iv)
tax-free returns of excess contributions or returns of excess
deferral amounts; and (v) distributions on the death or
disability (as defined in the Internal Revenue Code of 1986, as
amended) of the participant or beneficiary;
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<PAGE> 252
o Amounts from a Systematic Withdrawal Plan of up to an annual
amount of 12% of the account value on a per fund basis, at the
time the withdrawal plan is established, provided the investor
reinvests his dividends;
o Liquidation by the Fund when the account value falls below the
minimum required account size of $500;
o Investment account(s) of AIM; and
o Class C shares where the investor's dealer or record notifies the
distributor prior to the time of investment that the dealer
waives the payment otherwise payable to him.
Upon the redemption of shares in Categories I and II purchased in
amounts of $1 million or more, no CDSC will be applied in the following
situations:
o Shares held more than 18 months;
o Redemptions from employee benefit plans designated as qualified
purchasers, as defined above, where the redemptions are in
connection with employee terminations or withdrawals, provided
the total amount invested in the plan is at least $1,000,000; the
sponsor signs a $1 million LOI; or the employer-sponsored plan
has at least 100 eligible employees; provided, however, that
403(b) plans sponsored by public educational institutions shall
qualify for the CDSC waiver 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;
o Private foundations or endowment funds;
o Redemption of shares by the investor where the investor's dealer
waives the amounts otherwise payable to it by the distributor and
notifies the distributor prior to the time of investment; and
o Shares acquired by exchange from Class A shares in Categories I
and II unless the shares acquired by exchange are redeemed within
18 months of the original purchase of the Class A shares.
HOW TO PURCHASE AND REDEEM SHARES
A description of the manner in which shares of the Funds may be
purchased appears in the Prospectus under the headings "Purchasing Shares - How
to Purchase Shares."
The sales charge normally deducted on purchases of Class A shares of
the Funds 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.
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Information concerning the method of exchanging shares of the Funds for
shares of the other mutual funds managed or advised by AIM is set forth in the
Prospectus under the caption "Exchanging Shares."
Information concerning redemption of the Funds' shares is set forth in
the Prospectus under the caption "Redeeming Shares - 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 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 AFS, 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.
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, 1998, AIM VALUE
FUND - Class A shares had [ ] shares outstanding, net assets of
$[ ] and a net asset value per share of $[ ]. The offering price,
therefore, was $[ ].
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
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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.
BACKUP WITHHOLDING
Accounts submitted without a correct, certified taxpayer identification
number or, alternatively, a completed Internal Revenue Service ("IRS") Form W-8
(for non-resident aliens) or Form W-9 (certifying exempt status) accompanying
the registration information will generally be subject to 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
taxpayer identification number ("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. 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:
o a corporation
o an organization exempt from tax under Section 501(a), an individual
retirement plan (IRA), or a custodial account under Section 403(b)(7)
o the United States or any of its agencies or instrumentalities
o a state, the District of Columbia, a possession of the United States,
or any of their political subdivisions or instrumentalities
o a foreign government or any of its political subdivisions, agencies or
instrumentalities
o an international organization or any of its agencies or
instrumentalities
o a foreign central bank of issue
o a dealer in securities or commodities required to register in the U.S.
or a possession of the U.S.
o a futures commission merchant registered with the Commodity Futures
Trading Commission
o a real estate investment trust
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o an entity registered at all times during the tax year under the 1940
Act
o a common trust fund operated by a bank under Section 584(a)
o a financial institution
o 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
o 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.
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 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.
NET ASSET VALUE DETERMINATION
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.
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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. For
purposes of determining net asset value per share, futures and options contract
closing prices which are available fifteen (15) minutes after the close of
trading on the NYSE will generally be used. 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.
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 closing bid price 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 on the basis
of prices provided by independent pricing services. 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 closing bid price on that
day; option contracts are valued at the mean between the closing bid and asked
prices on the exchange where the contracts are principally traded; futures
contracts are valued at final settlement price quotations from the primary
exchange on which they are traded. 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, dividend rate, 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 for which
market quotations are not reflective of fair value 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] [at]
amortized cost, which approximates market value.
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.
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Fund securities primarily traded in foreign markets may be traded in
such markets on days which are not business days of the Fund. Because the net
asset value per share of each Fund is determined only on business days of the
Fund, the net asset value per share of a Fund may be significantly affected on
days when an investor can not exchange or redeem shares of the Fund.
TAX MATTERS
The following is only a summary of certain additional tax
considerations generally affecting the Funds and their shareholders that are not
described in the Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of each Fund or its shareholders, and the
discussion here and in the Prospectus is not intended as a substitute for
careful tax planning.
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
losses) 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 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.
Each Fund may use "equalization accounting" in determining the portion
of its net investment income and capital gain net income that has been
distributed. A Fund that elects to use equalization accounting will allocate a
portion of its realized investment income and capital gains to redemptions of
Fund shares and will reduce the amount of such income and gains that it
distributes in cash. However, each Fund intends to make cash distributions for
each taxable year in an aggregate amount that is sufficient to satisfy the
Distribution Requirement without taking into account its use of equalization
accounting. The Internal Revenue Service has not published any guidance
concerning the methods to be used in allocating investment income and capital
gains to redemptions of shares. In the event that the Internal Revenue Service
determines that a Fund is
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using an improper method of allocation and has underdistributed its net
investment income and capital gain net income for any taxable year, such Fund
may be liable for additional federal income tax.
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.
AIM HIGH YIELD FUND: The notes to the financial statements of the Fund
for the year ended December 31, 1998, 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
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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.
For federal income tax purposes, exercise of the reinstatement
privilege may increase the amount of gain or reduce the amount of loss
recognized in the original redemption transaction because the initial sales
charge will not be taken into account in determining such gain or loss to the
extent there has been a reduction in the initial sales charge.
DESCRIPTION OF MONEY MARKET INSTRUMENTS
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.
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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.
BANKER'S 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: 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. The notes may be secured or unsecured.
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.
SHAREHOLDER INFORMATION
This information supplements the discussion in each Fund's Prospectus
under the title "Shareholder Information."
TIMING OF PURCHASE ORDERS. 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. If a check used to purchase
shares does not clear, or if any investment order must be canceled due to
nonpayment, the investor will be responsible for any resulting loss to an AIM
Fund or to AIM Distributors.
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SHARE CERTIFICATES. AIM Funds will issue share certificates upon
written request to AFS. Otherwise, shares are held on the shareholder's behalf
and recorded on the Fund books. AIM Funds will not issue certificates for shares
held in prototype retirement plans.
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 AIM 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.
Each AIM Fund bears its share of the cost of operating the Systematic
Withdrawal Plan.
TERMS AND CONDITIONS OF EXCHANGES. If a shareholder is exchanging into
a fund paying daily dividends, 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.
EXCHANGES BY TELEPHONE. 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 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.
By signing an 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. The Transfer Agent
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.
REDEMPTIONS BY TELEPHONE. By signing an 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
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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.
SIGNATURE GUARANTEES. In addition to those circumstances listed in the
"Shareholder Information" section of each Fund's prospectus, signature
guarantees are required in the following situations: (1) requests to transfer
the registration of shares to another owner; (2) telephone exchange and
telephone redemption authorization forms; (3) changes in previously designated
wiring or electronic funds transfer instructions; and (4) 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.
AIM Funds may waive or modify any signature guarantee requirements at any time.
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 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 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.
DIVIDENDS AND DISTRIBUTIONS. 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.
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.
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 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.
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MISCELLANEOUS INFORMATION
CHARGES FOR CERTAIN ACCOUNT INFORMATION
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.
AUDIT REPORTS
The Board of Trustees will issue to shareholders semi-annually the
Funds' financial statements. Financial statements, audited by independent
auditors, will be issued annually. The firm of KPMG LLP, 700 Louisiana, Houston,
Texas 77002, currently serves as the auditors of each Fund.
LEGAL MATTERS
Legal matters for the Trust have been passed upon by Ballard Spahr
Andrews & Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania.
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), 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.
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") has
entered into an agreement with the Company (and certain other AIM Funds), First
Data Investor Service Group and Financial Data Services, Inc., pursuant to which
MLPF&S has agreed to perform certain shareholder sub-accounting services for its
customers who beneficially own shares of the Fund(s).
DESCRIPTION OF OBLIGATIONS ISSUED OR GUARANTEED
BY U.S. GOVERNMENT AGENCIES OR INSTRUMENTALITIES
AIM INTERMEDIATE GOVERNMENT FUND may invest in "Agency Securities,"
which include 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.
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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
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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.
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 pool 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.
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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.
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.
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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.
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.
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
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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 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 exposure
to adverse conditions.
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+).
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S&P MUNICIPAL NOTE RATINGS
An 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.
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.
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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.
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.
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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.
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:
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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.
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.
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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.
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FINANCIAL STATEMENTS
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PART C
OTHER INFORMATION
Item 23. Exhibits
Exhibit
Number
- -------
a(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 on 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 on 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) was
filed electronically as an Exhibit to Post-Effective
Amendment No. 74 on February 27, 1998, and is hereby
incorporated by reference.
(2) - (a) Amended and Restated Agreement and Declaration of Trust
of the Registrant, dated as of November 5, 1998, is filed
herewith electronically.
- (b) Amendment No. 1, dated December 21, 1998 to Amended and
Restated Agreement and Declaration of Trust of the
Registrant (reclassification of Class A shares of AIM Money
Market Fund), dated as of November 5, 1998, is filed
herewith electronically.
b(1) - (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.
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- (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.
(2) - Amended and Restated By-Laws of the Registrant were filed
electronically as an Exhibit to Post- Effective Amendment
No. 72 on April 28, 1997.
(3) - Amended and Restated Bylaws of the Registrant are filed
herewith electronically.
c - Instruments Defining Rights of Security Holders - None.
d(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) - (a) 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.
- (b) 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.
- (c) 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.
(3) - 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.
(4) - (a) Foreign Country Selection and Mandatory Securities
Depository Responsibilities Delegation Agreement, dated
September 9, 1998, between Registrant and A I M Advisors,
Inc. is filed herewith electronically.
(b) Amendment No. 1, dated September 28, 1998 to Foreign
Country Selection and Mandatory Securities Depository
Responsibilities Delegation Agreement, dated September 9,
1998, between Registrant and A I M Advisors, Inc. is filed
herewith electronically.
(5) - 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.
(6) - 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.
e(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.
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(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.
(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. was filed electronically as an
Exhibit to Post-Effective Amendment No. 74 on February 27,
1998, and is hereby incorporated by reference.
(9) - Form of Selected Dealer Agreement between A I M
Distributors, Inc. and selected dealers is filed herewith
electronically.
(10) - Form of Bank Selling Group Agreement between A I M
Distributors, Inc. and banks is filed herewith
electronically.
f(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.
(3) - Form of Deferred Compensation Agreement for Non-Affiliated
Directors, approved March 12, 1997, was filed
electronically as an Exhibit to Post-Effective Amendment
No. 74 on February 27, 1998, and is hereby incorporated by
reference.
(4) - 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.
(5) - Form of Deferred Compensation Plan for Eligible
Directors/Trustees was filed as an Exhibit to
Post-Effective Amendment No. 69 on February 28, 1995.
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g(1) - (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) Amendment No. 2, dated September 28, 1996, to the
Custodian Contract, dated October 15, 1993, between
Registrant and State Street Bank and Trust Company is filed
herewith electronically.
- (d) Amendment, dated September 9, 1998, to the Custodian
Contract, dated October 15, 1993, between the Registrant
and State Street Bank and Trust Company is filed herewith
electronically.
(2) - 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.
(3) - (a) 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.
- (b) Amendment, dated July 30, 1996, to the Custodian
Contract, dated October 19, 1995, between the Registrant,
on behalf of AIM Municipal Bond Fund, and The Bank of New
York is filed herewith electronically.
h(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.
(2) - (a) 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.
- (b) 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. was filed
electronically as an Exhibit to Post-Effective Amendment
No. 74 on February 27, 1998, and is hereby incorporated by
reference.
(3) - (a) 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.
- (b) 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. was
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filed electronically as an Exhibit to Post-Effective
Amendment No. 71 on April 26, 1996, and is hereby
incorporated by reference.
- (c) 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. was filed electronically as
an Exhibit to Post-Effective Amendment No. 71 on April 26,
1996, and is hereby incorporated by reference.
- (d) 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. was filed electronically as
an Exhibit to Post-Effective Amendment No. 73 on July 25,
1997, and is hereby incorporated by reference.
- (e) Amendment No. 4, dated June 30, 1998, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between Registrant and First Data Investor Services
Group, Inc. is filed herewith electronically.
- (f) Amendment No. 5, dated July 1, 1998, to the Remote
Access and Related Services Agreement, dated December 23,
1994, between Registrant and First Data Investor Services
Group, Inc. is filed herewith electronically.
- (g) 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. was filed electronically as
an Exhibit to Post-Effective Amendment No. 74 on February
27, 1998, and is hereby incorporated by reference.
(4) - Preferred Registration Technology Escrow Agreement, dated
September 10, 1997, between the Registrant and First Data
Investor Services Group, Inc. was filed electronically as
an Exhibit to Post-Effective Amendment No. 74 on February
27, 1998, and is hereby incorporated by reference.
(5) - Shareholder Sub-Accounting Services Agreement, dated as of
October 1, 1993, between the Registrant and First Data
Investor 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.
(6) - 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.
(7) - 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.
(8) - (a) 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.
- (b) 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
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portfolios, and A I M Fund Services, Inc. was filed as an
Exhibit to Post-Effective Amendment No. 69 on February 28,
1995.
- (c) 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.
- (d) 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.
(9) - 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.
i - Opinion of Ballard Spahr Andrews & Ingersoll was filed in
connection with the Registrant's Rule 24f-2 Notice on or
about February 27, 1997.
j - Consent of Ballard Spahr Andrews & Ingersoll, LLP is filed
herewith electronically.
k - Financial Statements - None.
l - Agreements Concerning Initial Capitalization - None.
m(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 was filed electronically as an Exhibit to
Post-Effective Amendment No. 74 on February 27, 1998.
(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.
(8) - Third Amended and Restated Master Distribution Plan for
Registrant's Class A Shares, Class C Shares and AIM Cash
Reserve Shares is filed herewith electronically.
C-6
<PAGE> 282
(9) - Form of Shareholder Service Agreement to be used in
connection with Registrant's Master Distribution Plan is
filed herewith electronically.
(10) - Form of Bank Shareholder Service Agreement to be used in
connection with Registrant's Master Distribution Plan is
filed herewith electronically.
(11) - Form of Variable Group Annuity Contractholder Service
Agreement to be used in connection with Registrant's Master
Distribution Plan is filed herewith electronically.
(12) - Form of Agency Pricing Agreement to be used in connection
with Registrant's Master Distribution Plan is filed
herewith electronically.
(13) - 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.
n - Financial Data Schedule - None.
o(1) - 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.
(2) - Rule 18f-3 Second Amended and Restated Multiple Class Plan
(effective September 1, 1997) was filed electronically as
an Exhibit to Post-Effective Amendment No. 74 on February
27, 1998, and is hereby incorporated by reference.
Item 24. Persons Controlled by or Under Common Control with Registrant
Provide a list or diagram of all persons directly or indirectly controlled
by or under common control with the Registrant. For any person controlled by
another person, disclose the percentage of voting securities owned by the
immediately controlling person or other basis of that person's control. For each
company, also provide the state or other sovereign power under the laws of which
the company is organized.
None.
Item 25. 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 against any liability incurred in their official
capacity, other than insurance provided by any director, officer, affiliated
person or underwriter for their own protection.
The Registrant's Amended and Restated Agreement and Declaration of Trust,
dated November 5, 1998, 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 Bylaws; and (iii) that the shareholders and former
shareholders of the Registrant are held harmless by the 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.
C-7
<PAGE> 283
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 a joint Mutual Fund and
Investment Advisory Professional and Directors and Officers Liability
Policy, issued by ICI Mutual Insurance Company, with a $35,000,000 limit of
liability.
Item 26. Business and Other Connections of Investment Advisor
Describe any other business, profession, vocation or employment of a
substantial nature that each investment advisor of the Registrant, and each
director, officer or partner of the advisor, is or has been engaged within the
last two fiscal years, for his or her 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 "Fund Management--The Advisor" in the Prospectus which
comprises Part A of the Registration Statement, and to the caption
"Management" of the Statement of Additional Information which comprises Part
B of the Registration Statement, and to Item 27(b) of this Part C.
Item 27. Principal Underwriters
(a) State the name of each investment company (other than the Registrant) for
which each principal underwriter currently distributing the Registrant's
securities also acts as a principal underwriter, depositor, or investment
advisor.
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 Growth Series
AIM International Funds, Inc.
AIM Investment Funds
AIM Investment Portfolios
AIM Investment Securities Funds - (Retail Classes)
AIM Series Trust
AIM Special Opportunities Funds
AIM Summit Fund, Inc.
AIM Tax-Exempt Funds, Inc.
AIM Variable Insurance Funds, Inc.
GT Global Floating Rate Fund, Inc.
(b) Provide the information required by the following tables for each director,
officer or partner of each principal underwriter named in response to Item 20:
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
- ----------------- ---------------- ---------------
<S> <C> <C>
Charles T. Bauer Chairman of the Board of Directors Chairman & Trustee
Michael J. Cemo President & Director None
</TABLE>
- ---------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
C-8
<PAGE> 284
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
- ----------------- ---------------- ---------------
<S> <C> <C>
Gary T. Crum Director Senior Vice President
Robert H. Graham Senior Vice President & Director President & Trustee
William G. Littlepage Senior Vice President & Director None
James L. Salners Executive Vice President None
John Caldwell Senior Vice President None
Marilyn M. Miller Senior Vice President None
Gene L. Needles 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
Mary K. Coleman Vice President None
Mary A. Corcoran Vice President None
Melville B. Cox Vice President & Chief Vice President
Compliance Officer
Sidney M. Dilgren Vice President None
Tony D. Green Vice President None
Dawn M. Hawley Vice President & Treasurer 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
Gary K. Wendler Vice President None
</TABLE>
- ---------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
C-9
<PAGE> 285
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address* with Underwriter with Registrant
- ----------------- ---------------- ---------------
<S> <C> <C>
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
Mary E. Gentempo Assistant Vice President None
David E. Hessel Assistant Vice President, None
Assistant Treasurer
& Controller
Melissa E. Hudson Assistant Vice President None
Kathryn A. Jordan Assistant Vice President None
Mary C. Mangham Assistant Vice President None
Kim T. McAuliffe Assistant Vice President None
Ivy B. McLemore Assistant Vice President None
David B. O'Neil Assistant Vice President None
Rebecca Starling-Klatt 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
P. Michelle Grace Assistant Secretary Assistant Secretary
Lisa A. Moss Assistant Secretary Assistant Secretary
Stephen I. Winer Assistant Secretary Assistant Secretary
</TABLE>
- ---------------
* 11 Greenway Plaza, Suite 100, Houston, Texas 77046-1173
C-10
<PAGE> 286
(c) Provide the information required by the following table for all commissions
and other compensation received, directly or indirectly, from the Registrant
during the last fiscal year by each principal underwriter who is not an
affiliated person of the Registrant or any affiliated person of an affiliated
person:
None.
Item 28. Location of Accounts and Records
State the name and address of each person maintaining physical possession of
each account, book, or other document required to be maintained by section 31(a)
[15 U.S.C. 80a-30(a)] and the rules under that section.
A I M Advisors, Inc., 11 Greenway Plaza, Suite 100, Houston, Texas
77046-1173, will maintain physical possession of each such account, book or
other document 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 The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286 (for AIM Municipal Bond Fund), and the
Registrant's Transfer Agent and Dividend Paying Agent, A I M Fund Services,
Inc., P. O. Box 4739, Houston, Texas 77210-4739.
Item 29. Management Services
Provide a summary of the substantive provisions of any management-related
service contract not discussed in Part A or Part B, disclosing the parties to
the contract and the total amount paid and by whom for the Registrant's last
three fiscal years.
None.
Item 30. Undertakings
In initial registration statements filed under the Securities Act, provide
an undertaking to file an amendment to the registration statement with certified
financial statements showing the initial capital received before accepting
subscriptions from more than 25 persons if the Registrant intends to raise its
initial capital under section 14(a)(3) [15 U.S.C. 80a-14(a)(3)].
Not applicable.
C-11
<PAGE> 287
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 12th day of
February, 1999.
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 12, 1999
---------------------------------
(Charles T. Bauer)
/s/ ROBERT H. GRAHAM Trustee & President February 12, 1999
--------------------------------- (Principal Executive Officer)
(Robert H. Graham)
/s/ BRUCE L. CROCKETT Trustee February 12, 1999
---------------------------------
(Bruce L. Crockett)
/s/ OWEN DALY II Trustee February 12, 1999
---------------------------------
(Owen Daly II)
/s/ EDWARD K. DUNN, JR. Trustee February 12, 1999
---------------------------------
(Edward K. Dunn, Jr.)
/s/ JACK FIELDS Trustee February 12, 1999
---------------------------------
(Jack Fields)
/s/ CARL FRISCHLING Trustee February 12, 1999
---------------------------------
(Carl Frischling)
/s/ PREMA MATHAI-DAVIS Trustee February 12, 1999
---------------------------------
(Prema Mathai-Davis)
/s/ LEWIS F. PENNOCK Trustee February 12, 1999
---------------------------------
(Lewis F. Pennock)
/s/ IAN W. ROBINSON Trustee February 12, 1999
---------------------------------
(Ian W. Robinson)
/s/ LOUIS S. SKLAR Trustee February 12, 1999
---------------------------------
(Louis S. Sklar)
/s/ JOHN J. ARTHUR Senior Vice President & February 12, 1999
--------------------------------- Treasurer (Principal Financial
(John J. Arthur) and Accounting Officer)
</TABLE>
<PAGE> 288
INDEX TO EXHIBITS
AIM FUNDS GROUP
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
a(2)(a) Amended and Restated Agreement and Declaration of Trust of Registrant, dated as of November 5, 1998
a(2)(b) Amendment No. 1, dated December 21, 1998, to Amended and Restated Agreement and Declaration of Trust,
dated as of November 5, 1998
b(3) Amended and Restated Bylaws of the Registrant
d(4)(a) Foreign Country Selection and Mandatory Securities Depository Responsibilities Delegation Agreement,
dated September 9, 1998, between Registrant and A I M Advisors, Inc.
d(4)(b) Amendment No. 1, dated September 28, 1998, to Foreign Country Selection and Mandatory Securities
Depository Responsibilities Delegation Agreement, dated September 9, 1998, between Registrant and A I M
Advisors, Inc.
e(9) Form of Selected Dealer Agreement between A I M Distributors, Inc. and selected dealers
e(10) Form of Bank Selling Group Agreement between A I M Distributors, Inc. and banks
g(1)(c) Amendment No. 2, dated September 28, 1996, to the Custodian Contract, dated October 15, 1993, between
Registrant and State Street Bank and Trust Company
g(1)(d) Amendment, dated September 9, 1998, to the Custodian Contract, dated October 15, 1993, between
Registrant and State Street Bank and Trust Company
g(3)(b) Amendment, dated July 30, 1996, to the Custodian Contract, dated October 19, 1995, between Registrant,
on behalf of AIM Municipal Bond Fund, and The Bank of New York
h(3)(e) Amendment No. 4, dated June 30, 1998, to the Remote Access and Related Services Agreement, dated
December 23, 1994, between Registrant and First Data Investor Services Group, Inc. (formerly, The
Shareholder Services Group, Inc.)
h(3)(f) Amendment No. 5, dated July 1, 1998, to the Remote Access and Related Services Agreement, dated
December 23, 1994, between Registrant and First Data Investor Services Group, Inc. (formerly, The
Shareholder Services Group, Inc.)
j Consent of Ballard Spahr Andrews & Ingersoll, LLP
m(8) Third Amended and Restated Master Distribution Plan for Registrant's Class A Shares, Class C Shares
and AIM Cash Reserve Shares
m(9) Form of Shareholder Service Agreement to be used in connection with Registrant's Master Distribution
Plan
m(10) Form of Bank Shareholder Service Agreement to be used in connection with Registrant's Master
Distribution Plan
m(11) Form of Variable Group Annuity Contractholder Service Agreement to be used in connection with
Registrant's Master Distribution Plan
</TABLE>
<PAGE> 289
<TABLE>
<S> <C>
m(12) Form of Agency Pricing Agreement to be used in connection with Registrant's Master Distribution Plan
m(13) 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
</TABLE>
<PAGE> 1
EXHIBIT a(2)(a)
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
OF
AIM FUNDS GROUP
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST of AIM Funds Group,
dated May 5, 1993, as previously amended, is hereby amended and restated as of
November 5, 1998, among Charles T. Bauer, Bruce L. Crockett, Owen Daly II,
Edward K. Dunn, Jr., Jack Fields, Carl Frischling, Robert H. Graham, Prema
Mathai-Davis, Lewis F. Pennock, Ian W. Robinson and Louis S. Sklar, as Trustees,
and each person who becomes a Shareholder in accordance with the terms
hereinafter set forth.
NOW, THEREFORE, the Trustees do hereby declare that all money and
property contributed to the trust hereunder shall continue to be held and
managed in trust under this Agreement for the benefit of the Shareholders as
herein set forth below.
ARTICLE I
NAME, DEFINITIONS, PURPOSE AND RESTATED CERTIFICATE OF TRUST
Section 1.1. Name. The name of the business trust continued hereby is
AIM Funds Group, and the Trustees may transact the Trust's affairs in that name.
The Trust shall constitute a Delaware business trust in accordance with the
Delaware Act.
Section 1.2. Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:
(a) "Affiliated Person," "Company," "Person," and "Principal
Underwriter" shall have the meanings given them in the 1940 Act, as
modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted or interpretive
releases of the Commission thereunder. The term "Commission" shall
have the meaning given it in the 1940 Act;
(b) "Agreement" means this Amended and Restated Agreement and
Declaration of Trust, as it may be amended from time to time;
(c) "allocable" has the meaning specified in Section 2.5(d);
(d) "allocated" has the meaning specified in Section 2.5(d);
(e) "Bylaws" means the Bylaws referred to in Section 4.1(e), as from
time to time amended;
(f) "Class" means a portion of Shares of a Portfolio of the Trust
established in accordance with the provisions of Section 2.3(b);
<PAGE> 2
(g) "Class Expenses" means expenses incurred by a particular Class in
connection with a shareholder services arrangement or a
distribution plan that is specific to such Class or any other
differing share of expenses or differing fees, in each case
pursuant to or to the extent permitted by Rule 18f-3 under the 1940
Act;
(h) "Covered Persons" means a person who is or was a Trustee, officer,
employee or agent of the Trust, or is or was serving at the request
of the Trustees as a director, trustee, partner, officer, employee
or agent of a corporation, trust, partnership, joint venture or
other enterprise;
(i) The "Delaware Act" refers to the Delaware Business Trust Act, 12
Del. C. Section 3801 et seq., as such Act may be amended from time
to time;
(j) "Governing Instrument" means collectively this Agreement, the
Bylaws, all amendments to this Agreement and the Bylaws and every
resolution of the Trustees or any committee of the Trustees that by
its terms is incorporated by reference into this Agreement or
stated to constitute part of the Trust's Governing Instrument;
(k) "Majority Shareholder Vote" means "the vote of a majority of the
outstanding voting securities" (as defined in the 1940 Act) of the
Trust, Portfolio, or Class, as applicable;
(l) "Majority Trustee Vote" means the vote of a majority of the
Trustees;
(m) "New Class A Shares" has the meaning specified in Section 2.6(c);
(n) "New Class B Shares" has the meaning specified in Section 2.6(c);
(o) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time;
(p) "Outstanding Shares" means Shares shown on the books of the Trust
or its transfer agent as then issued and outstanding, and includes
Shares of one Portfolio that the Trust has purchased on behalf of
another Portfolio, but excludes Shares of a Portfolio that the
Trust has redeemed or repurchased;
(q) "Portfolio" means a series of Shares of the Trust established in
accordance with the provisions of Section 2.3(a);
(r) "Proportionate Interest" has the meaning specified in Section
2.5(d);
(s) "Purchasing Portfolio" has the meaning specified in Section 2.10;
2
<PAGE> 3
(t) "Schedule A" has the meaning specified in Section 2.3(a);
(u) "Selling Portfolio" has the meaning specified in Section 2.10;
(v) "Shareholder" means a record owner of Outstanding Shares of the
Trust;
(w) "Shares" means, as to a Portfolio or any Class thereof, the equal
proportionate transferable units of beneficial interest into which
the beneficial interest of such Portfolio of the Trust or such
Class thereof shall be divided and may include fractions of Shares
as well as whole Shares;
(x) The "Trust" means AIM Funds Group, the Delaware business trust
established hereby, and reference to the Trust, when applicable to
one or more Portfolios, shall refer to each such Portfolio;
(y) The "Trustees" means the Persons who have signed this Agreement as
trustees so long as they shall continue to serve as trustees of the
Trust in accordance with the terms hereof, and all other Persons
who may from time to time be duly appointed as Trustee in
accordance with the provisions of Section 3.4, or elected as
Trustee by the Shareholders, and reference herein to a Trustee or
to the Trustees shall refer to such Persons in their capacity as
Trustees hereunder; and
(z) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the
account of the Trust or any Portfolio, or by the Trustees on behalf
of the Trust.
Section 1.3. Purpose. The purpose of the Trust is to conduct, operate
and carry on the business of an open-end management investment company
registered under the 1940 Act through one or more Portfolios investing primarily
in securities and to carry on such other business as the Trustees may from time
to time determine pursuant to their authority under this Agreement.
Section 1.4. Restated Certificate Trust. Immediately upon the execution
of this Agreement, the Trustees shall file a Restated Certificate of Trust with
respect to the Trust in the Office of the Secretary of State of the State of
Delaware pursuant to the Delaware Act.
ARTICLE II
BENEFICIAL INTEREST
Section 2.1. Shares of Beneficial Interest. The beneficial interest in
the Trust shall be divided into an unlimited number of Shares, with par value of
$0.01 per Share. The Trustees may, from time to time, (a) authorize the division
of the Shares into one or more series, each of which constitutes a Portfolio,
and (b) may further authorize the division of the Shares of any Portfolio into
one or more separate and distinct Classes. All Shares issued hereunder,
including without limitation, Shares issued in connection with a dividend or
other distribution in Shares or a split or reverse split of Shares, shall be
fully paid and nonassessable.
3
<PAGE> 4
Section 2.2. Issuance of Shares. The Trustees in their discretion may,
from time to time, without vote of the Shareholders, issue Shares, in addition
to the then issued and outstanding Shares and Shares held in the treasury, to
such party or parties and for such amount and type of consideration, subject to
applicable law, including cash or securities, at such time or times and on such
terms as the Trustees may deem appropriate, and may in such manner acquire
other assets (including the acquisition of assets subject to, and in connection
with, the assumption of liabilities) and businesses. In connection with any
issuance of Shares, the Trustees may issue fractional Shares. The Trustees may
from time to time divide or combine the Shares into a greater or lesser number
without thereby changing the proportionate beneficial interests in the Trust.
Contributions to the Trust may be accepted for, and Shares shall be redeemed as,
whole Shares and/or 1/1,000th of a Share or integral multiples thereof.
Section 2.3. Establishment of Portfolios and Classes.
(a) The Trust shall consist of one or more separate and
distinct Portfolios, each with an unlimited number of
Shares unless otherwise specified. The Trustees hereby
establish and designate the Portfolios listed on Schedule A
attached hereto and made a part hereof ("Schedule A"). Each
additional Portfolio shall be established by the adoption
of a resolution by the Trustees. Each such resolution is
hereby incorporated herein by this reference and made a
part of the Trust's Governing Instrument whether or not
expressly stated in such resolution, and shall be effective
upon the occurrence of both (i) the date stated therein
(or, if no such date is stated, upon the date of such
adoption) and (ii) the execution of an amendment either to
this Agreement or to Schedule A hereto establishing and
designating such additional Portfolio or Portfolios. The
Shares of each Portfolio shall have the relative rights and
preferences provided for herein and such rights and
preferences as may be designated by the Trustees in any
amendment or modification to the Trust's Governing
Instrument. The Trust shall maintain separate and distinct
records of each Portfolio and shall hold and account for
the assets belonging thereto separately from the other
Trust Property and the assets belonging to any other
Portfolio. Each Share of a Portfolio shall represent an
equal beneficial interest in the net assets belonging to
that Portfolio, except to the extent of Class Expenses and
other expenses separately allocated to Classes thereof (if
any Classes have been established) as permitted herein.
(b) The Trustees may establish one or more Classes of Shares of
any Portfolio, each with an unlimited number of Shares
unless otherwise specified. Each Class so established and
designated shall represent a Proportionate Interest (as
defined in Section 2.5(d)) in the net assets belonging to
that Portfolio and shall have
4
<PAGE> 5
identical voting, dividend, liquidation, and other rights
and be subject to the same terms and conditions, except
that (1) Class Expenses allocated to a Class for which such
expenses were incurred shall be borne solely by that Class,
(2) other expenses, costs, charges, and reserves allocated
to a Class in accordance with Section 2.5(e) may be borne
solely by that Class, (3) dividends declared and payable to
a Class pursuant to Section 7.1 shall reflect the items
separately allocated thereto pursuant to the preceding
clauses, (4) each Class may have separate rights to convert
to another Class, exchange rights, and similar rights, each
as determined by the Trustees, and (5) subject to Section
2.6(c), each Class may have exclusive voting rights with
respect to matters affecting only that Class. The Trustees
hereby establish for each Portfolio listed on Schedule A
the Classes listed thereon. Each additional Class for any
or all Portfolios shall be established by the adoption of a
resolution by the Trustees, each of which is hereby
incorporated herein by this reference and made a Governing
Instrument whether or not expressly stated in such
resolution, and shall be effective upon the occurrence of
both (i) the date stated therein (or, if no such date is
stated, upon the date of such adoption) and (ii) the
execution of an amendment to this Agreement establishing
and designating such additional Class or Classes.
Section 2.4. Actions Affecting Portfolios and Classes. Subject to the
right of Shareholders, if any, to vote pursuant to Section 6.1, the Trustees
shall have full power and authority, in their sole discretion without obtaining
any prior authorization or vote of the Shareholders of any Portfolio, or Class
thereof, to establish and designate and to change in any manner any Portfolio of
Shares, or any Class or Classes thereof; to fix or change such preferences,
voting powers, rights, and privileges of any Portfolio, or Classes thereof, as
the Trustees may from time to time determine, including any change that may
adversely affect a Shareholder; to divide or combine the Shares of any
Portfolio, or Classes thereof, into a greater or lesser number; to classify or
reclassify or convert any issued Shares of any Portfolio, or Classes thereof,
into one or more Portfolios or Classes of Shares of a Portfolio; and to take
such other action with respect to the Shares as the Trustees may deem desirable.
A Portfolio and any Class thereof may issue any number of Shares but need not
issue any Shares. At any time that there are no Outstanding Shares of any
particular Portfolio or Class previously established and designated, the
Trustees may abolish that Portfolio or Class and the establishment and
designation thereof.
Section 2.5. Relative Rights and Preferences. Unless the establishing
resolution or any other resolution adopted pursuant to Section 2.3 otherwise
provides, Shares of each Portfolio or Class thereof established hereunder shall
have the following relative rights and preferences:
5
<PAGE> 6
(a) Except as set forth in paragraph (e) of this Section 2.5,
each Share of a Portfolio, regardless of Class, shall
represent an equal pro rata interest in the assets
belonging to such Portfolio and shall have identical
voting, dividend, liquidation and other rights,
preferences, powers, restrictions, limitations,
qualifications and designations and terms and conditions
with each other Share of such Portfolio.
(b) Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities
issued by the Trust or the Trustees, whether of the same or
other Portfolio (or Class).
(c) All consideration received by the Trust for the issue or
sale of Shares of a particular Portfolio, together with all
assets in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale,
exchange, or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall be held and accounted
for separately from the other assets of the Trust and of
every other Portfolio and may be referred to herein as
"assets belonging to" that Portfolio. The assets belonging
to a particular Portfolio shall belong to that Portfolio
for all purposes, and to no other Portfolio, subject only
to the rights of creditors of that Portfolio. In addition,
any assets, income, earnings, profits or funds, or payments
and proceeds with respect thereto, which are not readily
identifiable as belonging to any particular Portfolio shall
be allocated by the Trustees between and among one or more
of the Portfolios in such manner as the Trustees, in their
sole discretion, deem fair and equitable. Each such
allocation shall be conclusive and binding upon the
Shareholders of all Portfolios thereof for all purposes,
and such assets, income, earnings, profits, or funds, or
payments and proceeds with respect thereto shall be assets
belonging to that Portfolio.
(d) Each Class of a Portfolio shall have a proportionate
undivided interest (as determined by or at the direction
of, or pursuant to authority granted by, the Trustees,
consistent with industry practice) ("Proportionate
Interest") in the net assets belonging to that Portfolio.
References herein to assets, expenses, charges, costs, and
reserves "allocable" or "allocated" to a particular Class
of a Portfolio shall mean the aggregate amount of such
item(s) of the Portfolio multiplied by the Class's
Proportionate Interest.
(e) A particular Portfolio shall be charged with the
liabilities of that Portfolio, and all expenses, costs,
charges and reserves attributable to any particular
Portfolio shall be borne by such Portfolio; provided that
the Trustees may, in their sole discretion, allocate or
authorize the allocation of particular expenses, costs,
charges, and/or reserves of a Portfolio to fewer than all
the Classes thereof. Class Expenses shall, in all cases, be
allocated to the Class for which such Class Expenses were
incurred. Any general liabilities, expenses, costs, charges
or reserves of the Trust (or any Portfolio) that are not
readily identifiable as
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chargeable to or bearable by any particular Portfolio (or
any particular Class) shall be allocated and charged by the
Trustees between or among any one or more of the Portfolios
(or Classes) in such manner as the Trustees in their sole
discretion deem fair and equitable. Each such allocation
shall be conclusive and binding upon the Shareholders of
all Portfolios (or Classes) for all purposes. Without
limitation of the foregoing provisions of this Section
2.5(e), (i) the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing
with respect to a particular Portfolio shall be enforceable
against the assets of such Portfolio only, and not against
the assets of the Trust generally or assets belonging to
any other Portfolio, and (ii) none of the debts,
liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to the Trust
generally that have not been allocated to a specified
Portfolio, or with respect to any other Portfolio, shall be
enforceable against the assets of such specified Portfolio.
Notice of this contractual limitation on inter-Portfolio
liabilities shall be set forth in the Trust's Restated
Certificate of Trust described in Section 1.4, and upon the
giving of such notice in the Restated Certificate of Trust,
the statutory provisions of Section 3804 of the Delaware
Act relating to limitations on inter-Portfolio liabilities
(and the statutory effect under Section 3804 of setting
forth such notice in the Restated Certificate of Trust)
shall become applicable to the Trust and each Portfolio.
All references to Shares in this Agreement shall be deemed
to be shares of any or all Portfolios, or Classes thereof, as the context may
require. All provisions herein relating to the Trust shall apply equally to each
Portfolio of the Trust, and each Class thereof, except as the context otherwise
requires.
Section 2.6. Additional Rights and Preferences of Class B Shares. In
addition to the relative rights and preferences set forth in Section 2.5 and all
other provisions of this Agreement relating to Shares of the Trust generally,
any Class of any Portfolio designated as Class B Shares shall have the following
rights and preferences:
(a) Subject to the provisions of paragraph (c) below, all Class
B Shares other than those purchased through the
reinvestment of dividends and distributions shall
automatically convert to Class A Shares eight (8) years
after the end of the calendar month in which a
Shareholder's order to purchase such shares was accepted.
(b) Subject to the provisions of paragraph (c) below, Class B
Shares purchased through the reinvestment of dividends and
distributions paid in respect of Class B Shares will be
considered held in a separate sub-account, and will
automatically convert to Class A Shares in the same
proportion as any Class B Shares (other than those in the
sub-account) convert to Class A Shares. Other than this
conversion feature, the Class B Shares purchased through
the reinvestment of dividends and distributions paid in
respect of Class B Shares shall have all the
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rights and preferences, restrictions, limitations as to
dividends, qualifications and terms and conditions of
redemption of Class B Shares generally.
(c) If a Portfolio of the Trust implements any amendment to a
Plan of Distribution adopted under Rule 12b-1 promulgated
under the 1940 Act (or, if presented to Shareholders,
adopts or implements a non-Rule 12b-1 shareholder services
plan) that the Trustees determine would materially increase
the charges that may be borne by the Class A Shareholders
under such plan, the Class B Shares will stop converting
to the Class A Shares unless the Class B Shares, voting
separately, approve the amendment or adoption. The Trustees
shall have sole discretion in determining whether such
amendment or adoption is submitted to a vote of the Class B
Shareholders. Should such amendment or adoption not be
submitted to a vote of the Class B Shareholders or, if
submitted, should the Class B Shareholders fail to approve
such amendment or adoption, the Trustees shall take such
action as is necessary to: (1) create a new class (the "New
Class A Shares") which shall be identical in all material
respects to the Class A Shares as they existed prior to the
implementation of the amendment or adoption; and (2) ensure
that the existing Class B Shares will be exchanged or
converted into New Class A Shares no later than the date
such Class B Shares were scheduled to convert to Class A
Shares. If deemed advisable by the Trustees to implement
the foregoing, and at the sole discretion of the Trustees,
such action may include the exchange of all Class B Shares
for a new class (the "New Class B Shares"), identical in
all material respects to the Class B Shares except that the
New Class B Shares will automatically convert into the New
Class A Shares. Such exchanges or conversions shall be
effected in a manner that the Trustees reasonably believe
will not be subject to federal taxation.
Section 2.7. Investment in the Trust. Investments may be accepted by
the Trust from such Persons, at such times, on such terms, and for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as the Trustees from time to time may authorize. At the
Trustees' sole discretion, such investments, subject to applicable law, may be
in the form of cash or securities in which the affected Portfolio is authorized
to invest, valued as provided in applicable law. Each such investment shall be
credited to the individual Shareholder's account in the form of full and
fractional Shares of the Trust, in such Portfolio (or Class) as the Shareholder
shall select.
Section 2.8. Personal Liability of Shareholders. As provided by
applicable law, no Shareholder of the Trust shall be personally liable for the
debts, liabilities, obligations and expenses incurred by, contracted for, or
otherwise existing with respect to, the Trust or any Portfolio (or Class)
thereof. Neither the Trust nor the Trustees, nor any officer, employee, or
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agent of the Trust shall have any power to bind personally any Shareholder or,
except as provided herein or by applicable law, to call upon any Shareholder for
the payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay by way of subscription for
any Shares or otherwise. The Shareholders shall be entitled, to the fullest
extent permitted by applicable law, to the same limitation of personal liability
as is extended under the Delaware General Corporation Law to stockholders of
private corporations for profit. Every note, bond, contract or other undertaking
issued by or on behalf of the Trust or the Trustees relating to the Trust or to
any Portfolio shall include a recitation limiting the obligation represented
thereby to the Trust and its assets or to one or more Portfolios and the assets
belonging thereto (but the omission of such a recitation shall not operate to
bind any Shareholder or Trustee of the Trust).
Section 2.9. Assent to Agreement. Every Shareholder, by virtue of
having purchased a Share, shall be held to have expressly assented to, and
agreed to be bound by, the terms hereof. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same nor entitle
the representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to
rights of said decedent under this Trust.
Section 2.10. Purchases of Shares Among Portfolios. The Trust may
purchase, on behalf of any Portfolio (the "Purchasing Portfolio"), Shares of
another Portfolio (the "Selling Portfolio") or any Class thereof. Shares of the
Selling Portfolio so purchased on behalf of the Purchasing Portfolio shall be
Outstanding Shares, and shall have all preferences, voting powers, rights and
privileges established for such Shares.
ARTICLE III
THE TRUSTEES
Section 3.1. Management of the Trust. The Trustees shall have exclusive
and absolute control over the Trust Property and over the business of the Trust
to the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Agreement. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, in any
and all commonwealths, territories, dependencies, colonies, or possessions of
the United States of America, and in any and all foreign jurisdictions and to do
all such other things and execute all such instruments as they deem necessary,
proper or desirable in order to promote the interests of the Trust although such
things are not herein specifically mentioned. Any determination as to what is in
the interests of the Trust made by the Trustees in good faith shall be
conclusive. In construing the provisions of this Agreement, the presumption
shall be in favor of a grant of power to the Trustees.
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The enumeration of any specific power in this Agreement shall not
be construed as limiting the aforesaid power. The powers of the Trustees may be
exercised without order of or resort to any court or other authority.
Section 3.2. Trustees. The number of Trustees shall be such number as
shall be fixed from time to time by a majority of the Trustees; provided,
however, that the number of Trustees shall in no event be less than three (3)
nor more than fifteen (15). The current Trustees are those first identified
above.
Section 3.3. Terms of Office of Trustees. The Trustees shall hold
office during the lifetime of this Trust, and until its termination as herein
provided; except that (a) any Trustee may resign his trusteeship or may retire
by written instrument signed by him and delivered to the other Trustees, which
shall take effect upon such delivery or upon such later date as is specified
therein; (b) any Trustee may be removed at any time by written instrument,
signed by at least two-thirds of the number of Trustees prior to such removal,
specifying the date when such removal shall become effective; (c) any Trustee
who has died, become physically or mentally incapacitated by reason of disease
or otherwise, or is otherwise unable to serve, may be retired by written
instrument signed by a majority of the other Trustees, specifying the date of
his retirement; and (d) a Trustee may be removed at any meeting of the
Shareholders by a vote of the Shareholders owning at least two-thirds of the
Outstanding Shares.
Section 3.4. Vacancies and Appointment of Trustees. In case of the
declination to serve, death, resignation, retirement or removal of a Trustee, or
a Trustee is otherwise unable to serve, or an increase in the number of
Trustees, a vacancy shall occur. Whenever a vacancy in the Board of Trustees
shall occur, until such vacancy is filled, the other Trustees shall have all the
powers hereunder and the certification of the other Trustees of such vacancy
shall be conclusive. In the case of an existing vacancy, the remaining Trustees
may fill such vacancy by appointing such other person as they in their
discretion shall see fit, or may leave such vacancy unfilled or may reduce the
number of Trustees to not less than two (2) Trustees. Such appointment shall be
evidenced by a written instrument signed by a majority of the Trustees in office
or by resolution of the Trustees, duly adopted, which shall be recorded in the
minutes of a meeting of the Trustees, whereupon the appointment shall take
effect.
An appointment of a Trustee may be made by the Trustees then in
office in anticipation of a vacancy to occur by reason of retirement,
resignation, or removal of a Trustee, or an increase in number of Trustees
effective at a later date, provided that said appointment shall become effective
only at the time or after the expected vacancy occurs. As soon as any Trustee
appointed pursuant to this Section 3.4 or elected by the Shareholders shall have
accepted the Trust and agreed in writing to be bound by the terms of the
Agreement, the Trust estate shall vest in the new Trustee or Trustees, together
with the continuing Trustees, without any further act or conveyance, and he
shall be deemed a Trustee hereunder.
Section 3.5. Temporary Absence of Trustee. Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any one
time to any other Trustee or
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Trustees, provided that in no case shall less than two Trustees personally
exercise the other powers hereunder except as herein otherwise expressly
provided.
Section 3.6. Effect of Death, Resignation, etc. of a Trustee. The
declination to serve, death, resignation, retirement, removal, incapacity, or
inability of the Trustees, or any one of them, shall not operate to terminate
the Trust or to revoke any existing agency created pursuant to the terms of this
Trust Agreement.
Section 3.7. Ownership of Assets of the Trust. The assets of the
Trust and of each Portfolio thereof shall be held separate and apart from any
assets now or hereafter held in any capacity other than as Trustee hereunder by
the Trustees or any successor Trustees. Legal title in all of the assets of the
Trust and the right to conduct any business shall at all times be considered as
vested in the Trustees on behalf of the Trust, except that the Trustees may
cause legal title to any Trust Property to be held by, or in the name of the
Trust, or in the name of any Person as nominee. No Shareholder shall be deemed
to have a severable ownership in any individual asset of the Trust, or belonging
to any Portfolio, or allocable to any Class thereof, or any right of partition
or possession thereof, but each Shareholder shall have, except as otherwise
provided for herein, a proportionate undivided beneficial interest in the Trust
or in assets belonging to the Portfolio (or allocable to the Class) in which the
Shareholder holds Shares. The Shares shall be personal property giving only the
rights specifically set forth in this Agreement or the Delaware Act.
ARTICLE IV
POWERS OF THE TRUSTEES
Section 4.1. Powers. The Trustees in all instances shall act as
principals, and are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust. Without
limiting the foregoing and subject to any applicable limitation in this
Agreement or the Bylaws of the Trust, the Trustees shall have power and
authority:
(a) To invest and reinvest cash and other property, and to hold
cash or other property uninvested, without in any event
being bound or limited by any present or future law or
custom in regard to investments by Trustees, and to sell,
exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(b) To operate as, and to carry on the business of, an
investment company, and exercise all the powers necessary
and appropriate to the conduct of such operations;
(c) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by
mortgaging,
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pledging or otherwise subjecting as security the Trust
Property; to endorse, guarantee, or undertake the
performance of an obligation or engagement of any other
Person and to lend Trust Property;
(d) To provide for the distribution of interests of the Trust
either through a principal underwriter in the manner
hereafter provided for or by the Trust itself, or both, or
otherwise pursuant to a plan of distribution of any kind;
(e) To adopt Bylaws not inconsistent with this Trust Agreement
providing for the conduct of the business of the Trust and
to amend and repeal them to the extent that they do not
reserve such right to the Shareholders; such Bylaws shall
be deemed incorporated and included in this Trust
Agreement;
(f) To elect and remove such officers and appoint and terminate
such agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies
that are members of a national securities exchange or such
other domestic or foreign entities as custodians of any
assets of the Trust subject to any conditions set forth in
this Agreement or in the Bylaws;
(h) To retain one or more transfer agents and shareholder
servicing agents;
(i) To set record dates in the manner provided herein or in the
Bylaws;
(j) To delegate such authority as they consider desirable to
any officers of the Trust and to any investment adviser,
manager, administrator, custodian, underwriter or other
agent or independent contractor;
(k) To sell or exchange any or all of the assets of the Trust,
subject to the right of Shareholders, if any, to vote on
such transaction pursuant to Section 6.1;
(l) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or
property; and to execute and deliver proxies and powers of
attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power
and discretion with relation to securities or property as
the Trustee shall deem proper;
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(m) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating any
trust, whether in bearer, book entry, unregistered or other
negotiable form; or either in the name of the Trust or of a
Portfolio or a custodian or a nominee or nominees, subject in
either case to proper safeguards according to the usual practice
of Delaware business trusts or investment companies;
(o) To establish separate and distinct Portfolios with separately
defined investment objectives and policies and distinct
investment purposes in accordance with the provisions of Article
II hereof and to establish Classes of such Portfolios having
relative rights, powers and duties as they may provide
consistent with applicable law;
(p) Subject to the provisions of Section 3804 of the Delaware Act,
to allocate assets, liabilities and expenses of the Trust to a
particular Portfolio or to apportion the same between or among
two or more Portfolios, provided that any liabilities or
expenses incurred by a particular Portfolio shall be payable
solely out of the assets belonging to that Portfolio as provided
for in Article II hereof;
(q) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any
contract, lease, mortgage, purchase, or sale of property by such
corporation or concern, and to pay calls or subscriptions with
respect to any security held in the Trust;
(r) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but
not limited to, claims for taxes;
(s) To declare and pay dividends and make distributions of income
and of capital gains and capital to Shareholders in the manner
hereinafter provided;
(t) To establish, from time to time, a minimum investment for
Shareholders in the Trust or in one or more Portfolios or
Classes, and to require the redemption of the Shares of any
Shareholder whose investment is less than such minimum upon
giving notice to such Shareholder;
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(u) To establish one or more committees, to delegate any of the
powers of the Trustees to said committees and to adopt a
committee charter providing for such responsibilities,
membership (including Trustees, officers or other agents of the
Trust therein) and any other characteristics of said committees
as the Trustees may deem proper, each of which committees may
consist of less than the whole number of Trustees then in
office, and may be empowered to act for and bind the Trustees
and the Trust, as if the acts of such committee were the acts of
all the Trustees then in office;
(v) To interpret the investment policies, practices or limitations
of any Portfolios;
(w) To establish a registered office and have a registered agent in
the State of Delaware; and
(x) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything
necessary, suitable or proper for the accomplishment of any
purpose or the attainment of any object or the furtherance of
any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing
incidental or appurtenant to or growing out of or connected with
the aforesaid business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by one or
more of the Trustees in their capacity as such hereunder shall be deemed an
action on behalf of the Trust or the applicable Portfolio, and not an action in
an individual capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to make
any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or upon
their order.
Section 4.2. Issuance and Repurchase of Shares. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, and otherwise deal in Shares and, subject to the
provisions set forth in Articles II and VII hereof, to apply to any such
repurchase, redemption, retirement, cancellation or acquisition of Shares any
funds or property of the Trust, or any assets belonging to the particular
Portfolio or any assets allocable to the particular Class, with respect to which
such Shares are issued.
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Section 4.3. Action by the Trustees. The Board of Trustees or any
committee thereof shall act by majority vote of those present at a meeting duly
called (including a meeting by telephonic or other electronic means, unless the
1940 Act requires that a particular action be taken only at a meeting of the
Trustees in person) at which a quorum required by the Bylaws is present or by
unanimous written consent of the Trustees or committee, as the case may be,
without a meeting, provided that the writing or writings are filed with the
minutes of proceedings of the Board or committee. Written consents or waivers of
the Trustees may be executed in one or more counterparts. Any written consent or
waiver may be provided and delivered to the Trust by any means by which notice
may be given to a Trustee. Subject to the requirements of the 1940 Act, the
Trustees by Majority Trustee Vote may delegate to any Trustee or Trustees
authority to approve particular matters or take particular actions on behalf of
the Trust.
Section 4.4. Principal Transactions. The Trustees may, on behalf of the
Trust, buy any securities from or sell any securities to, or lend any assets of
the Trust to, any Trustee or officer of the Trust or any firm of which any such
Trustee or officer is a member acting as principal, or have any such dealings
with any investment adviser, distributor, or transfer agent for the Trust or
with any Affiliated Person of such Person; and the Trust may employ any such
Person, or firm or Company in which such Person is an Affiliated Person, as
broker, legal counsel, registrar, investment adviser, distributor,
administrator, transfer agent, dividend disbursing agent, custodian, or in any
capacity upon customary terms, subject in all cases to applicable laws, rules,
and regulations and orders of regulatory authorities.
Section 4.5. Payment of Expenses by the Trust. The Trustees are
authorized to pay or cause to be paid out of the principal or income of the
Trust or any Portfolio, or partly out of the principal and partly out of income,
and to charge or allocate to, between or among such one or more of the
Portfolios (or Classes), as they deem fair, all expenses, fees, charges, taxes
and liabilities incurred or arising in connection with the Trust or Portfolio
(or Class), or in connection with the management thereof, including, but not
limited to, the Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, investment adviser and manager,
administrator, principal underwriter, auditors, counsel, custodian, transfer
agent, Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur.
Section 4.6. Trustee Compensation. The Trustees as such shall be
entitled to reasonable compensation from the Trust. They may fix the amount of
their compensation. Nothing herein shall in any way prevent the employment of
any Trustee for advisory, management, administrative, legal, accounting,
investment banking, underwriting, brokerage, or investment dealer or other
services and the payment for the same by the Trust.
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ARTICLE V
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND
TRANSFER AGENT
Section 5.1. Investment Adviser. The Trustees may in their discretion,
from time to time, enter into an investment advisory or management contract or
contracts with respect to the Trust or any Portfolio whereby the other party or
parties to such contract or contracts shall undertake to furnish the Trustees
with such management, investment advisory, statistical and research facilities
and services and such other facilities and services, if any, and all upon such
terms and conditions, as the Trustees may in their discretion determine.
The Trustees may authorize the investment adviser to employ, from
time to time, one or more sub-advisers to perform such of the acts and services
of the investment adviser, and upon such terms and conditions, as may be agreed
upon among the Trustees, the investment adviser and sub-adviser. Any references
in this Agreement to the investment adviser shall be deemed to include such
sub-advisers, unless the context otherwise requires.
Section 5.2. Other Service Contracts. The Trustees may authorize the
engagement of a principal underwriter, transfer agent, administrator, custodian,
and similar service providers.
Section 5.3. Parties to Contract. Any contract of the character
described in Sections 5.1 and 5.2 may be entered into with any corporation,
firm, partnership, trust or association, although one or more of the Trustees or
officers of the Trust may be an officer, director, trustee, shareholder, or
member of such other party to the contract.
Section 5.4. Miscellaneous. The fact that (i) any of the Shareholders,
Trustees or officers of the Trust is a shareholder, director, officer, partner,
trustee, employee, manager, adviser, principal underwriter or distributor or
agent of or for any Company or of or for any parent or affiliate of any Company,
with which an advisory or administration contract, or principal underwriter's or
distributor's contract, or transfer, shareholder servicing, custodian or other
agency contract may have been or may hereafter be made, or that any such
Company, or any parent or affiliate thereof, is a Shareholder or has an interest
in the Trust, or that (ii) any Company with which an advisory or administration
contract or principal underwriter's or distributor's contract, or transfer,
shareholder servicing, custodian, or other agency contract may have been or may
hereafter be made also has an advisory or administration contract, or principal
underwriter's or distributor's contract, or transfer, shareholder servicing,
custodian or other agency contract with one or more other companies, or has
other business or interests shall not affect the validity of any such contract
or disqualify any Shareholder, Trustee or officer of the
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Trust from voting upon or executing the same or create any liability or
accountability to the Trust or its Shareholders.
ARTICLE VI
SHAREHOLDERS' VOTING POWERS AND MEETING
Section 6.1. Voting Powers. The Shareholders shall have power to vote
only to: (i) elect Trustees, provided that a meeting of Shareholders has been
called for that purpose; (ii) remove Trustees, provided that a meeting of
Shareholders has been called for that purpose; (iii) approve the termination of
the Trust or any Portfolio or Class, unless, as of the date on which the
Trustees have determined to so terminate the Trust or such Portfolio or Class,
there are fewer than 100 holders of record of the Trust or of such terminating
Portfolio or Class and provided, further, that the Trustees have called a
meeting of the Shareholders for the purpose of approving any such termination;
(iv) approve the sale of all or substantially all the assets of the Trust or any
Portfolio or Class, unless the primary purpose of such sale is to change the
Trust's domicile or form of organization or form of business trust; (v) approve
the merger or consolidation of the Trust or any Portfolio or Class with and into
another Company, unless (A) the primary purpose of such merger or consolidation
is to change the Trust's domicile or form of organization or form of business
trust, or (B) after giving effect to such merger or consolidation, based on the
number of Shares outstanding as of a date selected by the Trustees, the
Shareholders of the Trust or such Portfolio or Class will have a majority of the
outstanding shares of the surviving Company or Portfolio or Class thereof, as
the case may be; (vi) approve any amendment to this Article VI, Section 6.1; and
(vii) approve such additional matters as may be required by law or as the
Trustees, in their sole discretion, shall determine.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required or permitted by law, this Trust
Agreement or any of the Bylaws of the Trust to be taken by Shareholders.
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted together, except when required by applicable law or when the
Trustees have determined that the matter affects the interests of one or more
Portfolios (or Classes), then only the Shareholders of all such Portfolios (or
Classes) shall be entitled to vote thereon. Each whole Share shall be entitled
to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote. The vote
necessary to approve any such matter shall be set forth in the Bylaws.
ARTICLE VII
DISTRIBUTIONS AND REDEMPTIONS
Section 7.1. Distributions. The Trustees may from time to time declare
and pay dividends and make other distributions with respect to any Portfolio, or
Class thereof, which may be from income, capital gains or capital. The amount of
such dividends or distributions and the payment of them and whether they are in
cash or any other Trust Property shall be wholly in the discretion of the
Trustees. Dividends and other distributions may be paid pursuant to a standing
17
<PAGE> 18
resolution adopted once or more often as the Trustees determine. All dividends
and other distributions on Shares of a particular Portfolio or Class shall be
distributed pro rata to the Shareholders of that Portfolio or Class, as the case
may be, in proportion to the number of Shares of that Portfolio or Class they
held on the record date established for such payment, provided that such
dividends and other distributions on Shares of a Class shall appropriately
reflect Class Expenses and other expenses allocated to that Class. The Trustees
may adopt and offer to Shareholders such dividend reinvestment plans, cash
distribution payment plans, or similar plans as the Trustees deem appropriate.
Section 7.2. Redemptions. Any holder of record of Shares of a particular
Portfolio, or Class thereof, shall have the right to require the Trust to redeem
his Shares, or any portion thereof, subject to such terms and conditions as are
set forth in the registration statement of the Trust in effect from time to
time. The redemption price may in any case or cases be paid wholly or partly in
kind if the Trustees determine that such payment is advisable in the interest
of the remaining Shareholders of the Portfolio or Class thereof for which the
Shares are being redeemed. Subject to the foregoing, the fair value, selection
and quantity of securities or other property so paid or delivered as all or part
of the redemption price may be determined by or under authority of the Trustees.
In no case shall the Trust be liable for any delay of any Person in transferring
securities selected for delivery as all or part of any payment in kind.
Section 7.3. Redemption of Shares by Trustees. The Trustees may, at
their option, call for the redemption of the Shares of any Person or may refuse
to transfer or issue Shares to any Person to the extent that the same is
necessary to comply with applicable law or advisable to further the purposes for
which the Trust is formed. To the extent permitted by law, the Trustees may
retain the proceeds of any redemption of Shares required by them for payments of
amounts due and owing by a Shareholder to the Trust or any Portfolio.
Section 7.4. Redemption of De Minimis Accounts. If, at any time when a
request for transfer or redemption of Shares of any Portfolio is received by the
Trust or its agent, the value of the Shares of such Portfolio in a Shareholder's
account is less than Five Hundred Dollars ($500.00), or such greater amount as
the Trustees in their discretion shall have determined in accordance with
Section 4.1(t), after giving effect to such transfer or redemption and upon
giving thirty (30) days' notice to the Shareholder, the Trust may cause the
remaining Shares of such Portfolio in such Shareholder's account to be redeemed,
subject to such terms and conditions as are set forth in the registration
statement of the Trust in effect from time to time.
ARTICLE VIII
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 8.1. Limitation of Liability. A Trustee or officer, when acting
in such capacity, shall not be personally liable to any person for any act,
omission or obligation of the Trust or any Trustee or officer; provided,
however, that nothing contained herein or in the Delaware Act shall protect any
Trustee or officer against any liability to the Trust or to Shareholders to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office with the Trust.
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<PAGE> 19
Section 8.2. Indemnification of Covered Persons. Every Covered Person
shall be indemnified by the Trust to the fullest extent permitted by the
Delaware Act, the Bylaws and other applicable law.
Section 8.3. Indemnification of Shareholders. In case any Shareholder or
former Shareholder of the Trust shall be held to be personally liable solely by
reason of his being or having been a Shareholder of the Trust or any Portfolio
or Class and not because of his acts or omissions or for some other reason, the
Shareholder or former Shareholder (or his heirs, executors, administrators or
other legal representatives, or, in the case of a corporation or other entity,
its corporate or general successor) shall be entitled, out of the assets
belonging to the applicable Portfolio, to be held harmless from and indemnified
against all loss and expense arising from such liability in accordance with the
Bylaws and applicable law. The Trust, on behalf of the affected Portfolio, shall
upon request by the Shareholder, assume the defense of any such claim made
against the Shareholder for any act or obligation of that Portfolio.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Trust Not a Partnership: Taxation. It is hereby expressly
declared that a trust and not a partnership is created hereby. No Trustee
hereunder shall have any power to bind personally either the Trust's officers or
any Shareholder. All persons extending credit to, contracting with or having any
claim against the Trust or the Trustees shall look only to the assets of the
appropriate Portfolio or, until the Trustees shall have established any separate
Portfolio, of the Trust for payment under such credit, contract or claim; and
neither the Shareholders, the Trustees, nor the Trust's officers nor any of the
agents of the Trustees whether past, present or future, shall be personally
liable therefor.
It is intended that the Trust, or each Portfolio if there is more
than one Portfolio, be classified for income tax purposes as an association
taxable as a corporation, and the Trustees shall do all things that they, in
their sole discretion, determine are necessary to achieve that objective,
including (if they so determine), electing such classifications on Internal
Revenue Form 8832. The Trustees, in their sole discretion and without the vote
or consent of the Shareholders, may amend this Agreement to ensure that this
objective is achieved.
Section 9.2. Trustee's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretion hereunder in
good faith and with reasonable care under the circumstances then prevailing
shall be binding upon everyone interested. Subject to the provisions of Article
VIII and to Section 9.1., the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice of counsel or
other experts with respect to the meaning and operation of this Agreement, and
subject to the provisions of Article VIII and Section 9.1, shall be under no
liability for any act or omission in accordance with such advice or for failing
to follow such advice. The Trustees shall not be required to give any bond as
such, nor any surety if a bond is obtained.
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<PAGE> 20
Section 9.3. Termination of Trust or Portfolio or Class.
(a) Unless terminated as provided herein, the Trust shall
continue without limitation of time. The Trust may be
terminated at any time by the Trustees by written notice
to the Shareholders, subject to the right of
Shareholders, if any, to vote pursuant to Section 6.1.
Any Portfolio or Class may be terminated at any time by
the Trustees by written notice to the Shareholders of
that Portfolio or Class, subject to the right of
Shareholders, if any, to vote pursuant to Section 6.1.
(b) On termination of the Trust or any Portfolio pursuant to
paragraph (a) above,
(1) the Trust or that Portfolio thereafter shall carry on
no business except for the purpose of winding up its
affairs,
(2) the Trustees shall (i) proceed to wind up the affairs
of the Trust or that Portfolio, and all powers of the
Trustees under this Agreement with respect thereto
shall continue until such affairs have been wound up,
including the powers to fulfill or discharge the
contracts of the Trust or that Portfolio, (ii)
collect its assets or the assets belonging thereto,
(iii) sell, convey, assign, exchange, or otherwise
dispose of all or any part of those assets to one or
more persons at public or private sale for
consideration that may consist in whole or in part of
cash, securities, or other property of any kind, (iv)
discharge or pay its liabilities, and (v) do all
other acts appropriate to liquidate its business,
and
(3) after paying or adequately providing for the payment
of all liabilities, and upon receipt of such
releases, indemnities, and refunding agreements as
they deem necessary for their protection, the
Trustees shall distribute the remaining assets
ratably among the Shareholders of the Trust or that
Portfolio.
(c) On termination of any Class pursuant to paragraph (a)
above,
(1) the Trust thereafter shall no longer issue Shares of
that Class,
(2) the Trustees shall do all other acts appropriate to
terminate the Class, and
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<PAGE> 21
(3) the Trustees shall distribute ratably among the
Shareholders of that Class, in cash or in kind, an
amount equal to the Proportionate Interest of that
Class in the net assets of the Portfolio (after
taking into account any Class Expenses or other fees,
expenses, or charges allocable thereto), and in
connection with any such distribution in cash the
Trustees are authorized to sell, convey, assign,
exchange or otherwise dispose of such assets of the
Portfolio of which that Class is a part as they deem
necessary.
(d) On completion of distribution of the remaining assets
pursuant to paragraph (b)(3) above, the Trust or the
affected Portfolio shall terminate and the Trustees and
the Trust shall be discharged from all further
liabilities and duties hereunder with respect thereto
and the rights and interests of all parties therein
shall be cancelled and discharged. On termination of the
Trust, following completion of winding up of its
business, the Trustees shall cause a Certificate of
Cancellation of the Trust's Certificate of Trust to be
filed in accordance with the Delaware Act, which
Certificate may be signed by any one Trustee.
Section 9.4. Sale of Assets; Merger and Consolidation. Subject to right
of Shareholders, if any, to vote pursuant to Section 6.1, the Trustees may cause
(i) the Trust or one or more of its Portfolios to the extent consistent with
applicable law to sell all or substantially all of its assets to, or be merged
into or consolidated with, another Portfolio, business trust (or series thereof)
or Company (or series thereof), (ii) the Shares of the Trust or any Portfolio
(or Class) to be converted into beneficial interests in another business trust
(or series thereof) created pursuant to this Section 9.4, or (iii) the Shares to
be exchanged under or pursuant to any state or federal statute to the extent
permitted by law. In all respects not governed by statute or applicable law, the
Trustees shall have power to prescribe the procedure necessary or appropriate to
accomplish a sale of assets, merger or consolidation including the power to
create one or more separate business trusts to which all or any part of the
assets, liabilities, profits or losses of the Trust may be transferred and to
provide for the conversion of Shares of the Trust or any Portfolio (or Class)
into beneficial interests in such separate business trust or trusts (or series
or class thereof).
Section 9.5. Filing of Copies, References, Headings. The original or a
copy of this Agreement or any amendment hereto or any supplemental agreement
shall be kept at the office of the Trust where it may be inspected by any
Shareholder. In this Agreement or in any such amendment or supplemental
agreement, references to this Agreement, and all expressions like "herein,"
"hereof," and "hereunder," shall be deemed to refer to this Agreement as amended
or affected by any such supplemental agreement. All expressions like "his,"
"he," and "him," shall be deemed to include the feminine and neuter, as well as
masculine, genders. Headings are placed herein for convenience of reference only
and in case of any conflict, the text of this
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<PAGE> 22
Agreement, rather than the headings, shall control. This Agreement may be
executed in any number of counterparts each of which shall be deemed an
original.
Section 9.6. Governing Law. The Trust and this Agreement, and the
rights, obligations and remedies of the Trustees and Shareholders hereunder, are
to be governed by and construed and administered according to the Delaware Act
and the other laws of the State of Delaware; provided, however, that there shall
not be applicable to the Trust, the Trustees, the Shareholders or this Trust
Agreement (a) the provisions of Section 3540 of Title 12 of the Delaware Code or
(b) any provisions of the laws (statutory or common) of the State of Delaware
(other than the Delaware Act) pertaining to trusts which relate to or regulate
(i) the filing with any court or governmental body or agency of trustee accounts
or schedules of trustee fees and charges, (ii) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents or employees of a trust, (v)
the allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding of trust assets, or (vii) the establishment of fiduciary or
other standards or responsibilities or limitations on the indemnification, acts
or powers of trustees or other Persons, which are inconsistent with the
limitations or liabilities or authorities and powers of the Trustees or officers
of the Trust set forth or referenced in this Agreement.
The Trust shall be of the type commonly called a "business
trust," and without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by trusts under
the Delaware Act, and the absence of a specific reference herein to any such
power, privilege or action shall not imply that the Trust may not exercise such
power or privilege or take such actions; provided, however, that the exercise of
any such power, privilege or action shall not otherwise violate applicable law.
Section 9.7. Amendments. Except as specifically provided in Section 6.1,
the Trustees may, without any Shareholder vote, amend this Agreement by making
an amendment to this Agreement or to Schedule A, an agreement supplemental
hereto, or an amended and restated trust instrument. Any such amendment, having
been approved by a Majority Trustee Vote, shall become effective, unless
otherwise provided by such Trustees, upon being executed by a duly authorized
officer of the Trust. Any amendment submitted to Shareholders that the Trustees
determine would affect the Shareholders of fewer than all Portfolios (or fewer
than all Classes thereof) shall be authorized by a vote of only the Shareholders
of the affected Portfolio(s) (or Class(es)), and no vote shall be required of
Shareholders of any Portfolio (or Class) that is not affected. Notwithstanding
anything else herein to the contrary, any amendment to Article VIII that would
have the effect of reducing the indemnification provided thereby to Covered
Persons or to Shareholders or former Shareholders, and any repeal or amendment
of this sentence shall each require the affirmative vote of Shareholders owning
at least two-thirds of the Outstanding Shares entitled to vote thereon. A
certification signed by a duly authorized officer of the Trust
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<PAGE> 23
setting forth an amendment to this Agreement and reciting that it was duly
adopted by the Shareholders or by the Trustees as aforesaid, or a copy of this
Agreement, as amended, executed by a majority of the Trustees, or a duly
authorized officer of the Trust, shall be conclusive evidence of such amendment
when lodged among the records of the Trust.
Section 9.8. Provisions in Conflict with Law. The provisions of this
Agreement are severable, and if the Trustees shall determine, with the advice of
counsel, that any of such provisions is in conflict with applicable law the
conflicting provision shall be deemed never to have constituted a part of this
Agreement; provided, however, that such determination shall not affect any of
the remaining provisions of this Agreement or render invalid or improper any
action taken or omitted prior to such determination. If any provision of this
Agreement shall be held invalid or enforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provisions in any other
jurisdiction or any other provision of this Agreement in any jurisdiction.
Section 9.9. Shareholders' Right to Inspect Shareholder List. One or
more Persons who together and for at least six months have been Shareholders of
at least five percent (5%) of the Outstanding Shares of any Class may present to
any officer or resident agent of the Trust a written request for a list of its
Shareholders. Within twenty (20) days after such request is made, the Trust
shall prepare and have available on file at its principal office a list verified
under oath by one of its officers or its transfer agent or registrar which sets
forth the name and address of each Shareholder and the number of Shares of each
Portfolio and Class which the Shareholder holds. The rights provided for herein
shall not extend to any Person who is a beneficial owner but not also a record
owner of Shares of the Trust.
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<PAGE> 24
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument this 5th day of November, 1998.
/s/ CHARLES T. BAUER
-----------------------------------
Charles T. Bauer
/s/ BRUCE L. CROCKETT
-----------------------------------
Bruce L. Crockett
/s/ OWEN DALY II
-----------------------------------
Owen Daly II
/s/ EDWARD K. DUNN, JR.
-----------------------------------
Edward K. Dunn, Jr.
/s/ JACK FIELDS
-----------------------------------
Jack Fields
/s/ CARL FRISCHLING
-----------------------------------
Carl Frischling
/s/ ROBERT H. GRAHAM
-----------------------------------
Robert H. Graham
/s/ PREMA MATHAI-DAVIS
-----------------------------------
Prema Mathai-Davis
/s/ LEWIS F. PENNOCK
-----------------------------------
Lewis F. Pennock
/s/ IAN W. ROBINSON
-----------------------------------
Ian W. Robinson
/s/ LOUIS S. SKLAR
-----------------------------------
Louis S. Sklar
24
<PAGE> 25
SCHEDULE A
AIM FUNDS GROUP
PORTFOLIOS AND CLASSES THEREOF
AIM Balanced Fund
Class A Shares
Class B Shares
Class C Shares
AIM Global Utilities Fund
Class A Shares
Class B Shares
Class C Shares
AIM High Yield Fund
Class A Shares
Class B Shares
Class C Shares
AIM Income Fund
Class A Shares
Class B Shares
Class C Shares
AIM Intermediate Government Fund
Class A Shares
Class B Shares
Class C Shares
AIM Money Market Fund
Class A Shares
Class B Shares
Class C Shares
AIM Cash Reserve Shares
AIM Municipal Bond Fund
Class A Shares
Class B Shares
Class C Shares
AIM Select Growth Fund
Class A Shares
Class B Shares
Class C Shares
AIM Value Fund
Class A Shares
Class B Shares
Class C Shares
25
<PAGE> 1
EXHIBIT a(2)(b)
AMENDMENT NO. 1
TO
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
OF
AIM FUNDS GROUP
This Amendment No. 1 to the Amended and Restated Agreement and
Declaration of Trust of AIM Funds Group (this "Amendment") amends, effective as
of December 21, 1998, the Amended and Restated Agreement and Declaration of
Trust of AIM Funds Group dated as of November 5, 1998 (the "Restated
Agreement").
Background
A. On September 25, 1998, the Trustees, by a Majority Trustee Vote,
approved the reclassification of issued and outstanding Class A Shares of AIM
Money Market Fund, a portfolio of AIM Funds Group (the "Trust"), as AIM Cash
Reserve Shares of AIM Money Market Fund (the "Reclassification"), pursuant to a
Plan of Reclassification for the Class A Shares of AIM Money Market Fund (the
"Plan"), subject to approval of the Plan by the holders of such Class A Shares.
B. The Shareholders of Class A Shares of AIM Money Market Fund
approved the Plan, and all issued and outstanding Class A Shares of AIM Money
Market Fund were reclassified as AIM Cash Reserve Shares of AIM Money
Market Fund on December 21, 1998 at 9:00 a.m. Eastern Time. No Class A Shares of
AIM Money Market Fund remain outstanding.
C. The Plan provides for the amendment to the Restated Agreement to
eliminate the Class A Shares of AIM Money Market Fund as a class established
thereunder as soon as practicable after the Reclassification occurs, and the
Board of Trustees has approved this amendment to reflect such elimination.
D. Under Section 9.7 of the Restated Agreement, this Amendment may
be executed by a duly authorized officer of the Trust.
NOW, THEREFORE, the Restated Agreement is hereby amended as follows:
1. Unless defined herein, each capitalized term used in this
Amendment shall have the meaning given it in the Restated Agreement.
2. Schedule A of the Restated Agreement is hereby amended and
restated to read in full as set forth on Exhibit 1 to this Amendment.
<PAGE> 2
3. All references in the Restated Agreement to "this Agreement"
shall mean the Restated Agreement as amended by this Amendment.
4. Except as specifically amended by this Amendment, the Restated
Agreement is hereby confirmed and remains in full force and effect.
IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the
Trust, has executed this Amendment as of December 21, 1998.
/s/ ROBERT H. GRAHAM
-----------------------------
Name: Robert H. Graham
Title: President
2
<PAGE> 3
EXHIBIT 1 TO AMENDMENT NO. 1
DATED AS OF DECEMBER 21, 1998
TO
AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
OF
AIM FUNDS GROUP
SCHEDULE A
AIM FUNDS GROUP
PORTFOLIOS AND CLASSES THEREOF
AIM Balanced Fund AIM Money Market Fund
- ----------------- ---------------------
Class A Shares Class B Shares
Class B Shares Class C Shares
Class C Shares AIM Cash Reserve Shares
AIM Global Utilities Fund AIM Municipal Bond Fund
- ------------------------- -----------------------
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
AIM High Yield Fund AIM Select Growth Fund
- ------------------- ----------------------
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
AIM Income Fund AIM Value Fund
- --------------- --------------
Class A Shares Class A Shares
Class B Shares Class B Shares
Class C Shares Class C Shares
AIM Intermediate Government Fund
- --------------------------------
Class A Shares
Class B Shares
Class C Shares
1-1
<PAGE> 1
EXHIBIT b(3)
AMENDED AND RESTATED BYLAWS
OF
AIM FUNDS GROUP,
A DELAWARE BUSINESS TRUST
Adopted effective November 5, 1998.
Capitalized terms not specifically defined herein
shall have the meanings ascribed to them in the Trust's
Amended and Restated Agreement and Declaration of Trust (the "Agreement")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of AIM Funds Group
(the "Trust") shall be at the offices of The Corporation Trust Company in the
County of New Castle, State of Delaware.
Section 2. Other Offices. The Trust may also have offices at such other
places both within and without the State of Delaware as the Trustees may from
time to time determine or the business of the Trust may require.
ARTICLE II
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees of the Trust may
hold meetings, both regular and special, either within or without the State of
Delaware. Meetings of the Trustees may be called orally or in writing by the
President of the Trust or by any two Trustees.
Section 2. Regular Meetings. Regular meetings of the Board of Trustees
shall be held each year, at such time and place as the Board of Trustees may
determine.
Section 3. Notice of Meetings. Notice of the time, date, and place of
all meetings of the Trustees shall be given to each Trustee (i) by telephone,
telex, telegram, facsimile, electronic-mail, or other electronic mechanism sent
to his or her home or business address at least twenty-four hours in advance of
the meeting or (ii) in person at another meeting of the Trustees or (iii) by
written notice mailed or sent via overnight courier to his or her home or
business address at least seventy-two hours in advance of the meeting. Notice
need not be given to any Trustee who attends the meeting without objecting to
the lack of notice or who signs a waiver of notice either before or after the
meeting.
<PAGE> 2
Section 4. Quorum. At all meetings of the Trustees, one-third of the
Trustees then in office (but in no event less than two Trustees) shall
constitute a quorum for the transaction of business and the act of a majority of
the Trustees present at any meeting at which there is a quorum shall be the act
of the Board of Trustees, except as may be otherwise specifically provided by
applicable law or by the Agreement or these Bylaws. If a quorum shall not be
present at any meeting of the Board of Trustees, the Trustees present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 5. Designation, Powers, and Name of Committees. The Board of
Trustees may, by resolution passed by a majority of the whole Board, designate
one or more committees, each committee to consist of two or more of the Trustees
of the Trust. The Board may designate one or more Trustees as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of such committee. Each committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Trustees in
the management of the business and affairs of the Trust; provided, however, that
in the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such members constitute a quorum, may
unanimously appoint another member of the Board of Trustees to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Trustees.
Section 6. Minutes of Committee. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Trustees when
required.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The initial executive officers of the
Trust shall be elected by the Board of Trustees as soon as practicable after the
organization of the Trust. The executive officers may include a Chairman of the
Board, and shall include a President, one or more Vice Presidents (the number
thereof to be determined by the Board of Trustees), a Secretary and a Treasurer.
The Chairman of the Board, if any, shall be selected from among the Trustees.
The Board of Trustees may also in its discretion appoint Assistant Vice
Presidents, Assistant Secretaries, Assistant Treasurers, and other officers,
agents and employees, who shall have such authority and perform such duties as
the Board may determine. The Board of Trustees may fill any vacancy which may
occur in any office. Any two offices, except for those of President and Vice
President, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument on behalf of the Trust in more than one
capacity, if such instrument is required by law or by these Bylaws to be
executed, acknowledged or verified by two or more officers.
2
<PAGE> 3
Section 2. Term of Office. Unless otherwise specifically determined by
the Board of Trustees, the officers shall serve at the pleasure of the Board of
Trustees. If the Board of Trustees in its judgment finds that the best interests
of the Trust will be served, the Board of Trustees may remove any officer of the
Trust at any time with or without cause. The Trustees may delegate this power to
the President (without supervision by the Trustees) with respect to any other
officer. Such removal shall be without prejudice to the contract rights, if any,
of the person so removed. Any officer may resign from office at any time by
delivering a written resignation to the Trustees or the President. Unless
otherwise specified therein, such resignation shall take effect upon delivery.
Section 3. President. The President shall be the chief executive
officer of the Trust and, subject to the Board of Trustees, shall generally
manage the business and affairs of the Trust. If there is no Chairman of the
Board, or if the Chairman of the Board has been appointed but is absent, the
President shall, if present, preside at all meetings of the Shareholders and the
Board of Trustees.
Section 4. Chairman of the Board. The Chairman of the Board, if any,
shall preside at all meetings of the Shareholders and the Board of Trustees, if
the Chairman of the Board is present. The Chairman of the Board shall have such
other powers and duties as shall be determined by the Board of Trustees, and
shall undertake such other assignments as may be requested by the President.
Section 5. Chairman; Vice Presidents. The Chairman of the Board or one
or more Vice Presidents shall have and exercise such powers and duties of the
President in the absence or inability to act of the President, as may be
assigned to them, respectively, by the Board of Trustees or, to the extent not
so assigned, by the President. In the absence or inability to act of the
President, the powers and duties of the President not otherwise assigned by the
Board of Trustees or the President shall devolve upon the Chairman of the Board,
or in the Chairman's absence, the Vice Presidents in the order of their
election.
Section 6. Secretary. The Secretary shall (a) have custody of the seal
of the Trust; (b) attend meetings of the Shareholders, the Board of Trustees,
and any committees of Trustees and keep the minutes of such meetings of
Shareholders, the Board of Trustees and any committees thereof; and (c) issue
all notices of the Trust. The Secretary shall have charge of the Shareholder
records and such other books and papers as the Board may direct, and shall
perform such other duties as may be incidental to the office or which are
assigned by the Board of Trustees. The Secretary shall also keep or cause to be
kept a Shareholder book, which may be maintained by means of computer systems,
containing the names, alphabetically arranged, of all persons who are
Shareholders of the Trust, showing their places of residence, the number and
series and class of any Shares held by them, respectively, and the dates when
they became the record owners thereof.
Section 7. Treasurer. The Treasurer shall have the care and custody of
the funds and securities of the Trust and shall deposit the same in the name of
the Trust in such bank or banks or other depositories, subject to withdrawal in
such manner as these Bylaws or the Board of
3
<PAGE> 4
Trustees may determine. The Treasurer shall, if required by the Board of
Trustees, give such bond for the faithful discharge of duties in such form as
the Board of Trustees may require.
Section 8. Assistant Officers. Assistant officers, which may include
one or more Assistant Vice Presidents, Assistant Secretaries and Assistant
Treasurers, shall perform such functions and have such responsibilities as the
Board of Trustees may determine.
Section 9. Surety Bond. The Trustees may require any officer or agent
of the Trust to execute a bond (including, without limitation, any bond required
by the Investment Company Act of 1940, as amended (the "1940 Act") and the rules
and regulations of the Securities and Exchange Commission (the "Commission") to
the Trust in such sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his or her duties to the
Trust, including responsibility for negligence and for the accounting of any of
the Trust's property, funds, or securities that may come into his or her hands.
Section 10. Authorized Signatories. Unless a specific officer is
otherwise designated in a resolution adopted by the Board of Trustees, the
proper officers of the Trust for executing agreements, documents and instruments
other than Internal Revenue Service forms shall be the President, any Vice
President, the Secretary or any Assistant Secretary. Unless a specific officer
is otherwise designated in a resolution adopted by the Board of Trustees, the
proper officers of the Trust for executing any and all Internal Revenue Service
forms shall be the President, any Vice President, the Secretary, any Assistant
Secretary, or the Treasurer.
ARTICLE IV
MEETINGS OF SHAREHOLDERS
Section 10. Purpose. All meetings of the Shareholders for the election
of Trustees shall be held at such place as may be fixed from time to time by the
Trustees, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Trustees and stated in the
notice indicating that a meeting has been called for such purpose. Meetings of
Shareholders may be held for any purpose determined by the Trustees and may be
held at such time and place, within or without the State of Delaware as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof. At all meetings of the Shareholders, every shareholder of record
entitled to vote thereat shall be entitled to vote at such meeting either in
person or by written proxy signed by the Shareholder or by his duly authorized
attorney in fact. A Shareholder may duly authorize such attorney in fact through
written, electronic, telephonic, computerized, facsimile, telecommunication,
telex or oral communication or by any other form of communication. Unless a
proxy provides otherwise, such proxy is not valid more than eleven months after
its date. A proxy with respect to shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to exercise of
the proxy the Trust receives a specific written notice to the contrary from any
one of them. A proxy purporting to be executed by or on behalf of a Shareholder
shall be deemed valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger.
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<PAGE> 5
Section 2. Nominations of Trustees. Nominations of individuals for
election to the board of trustees shall be made by the Board of Trustees or a
nominating committee of the Board of Trustees, if one has been established (the
"Nominating Committee"). Any Shareholder may submit names of individuals to be
considered by the Nominating Committee or the Board of Trustees, as applicable,
provided, however, (i) that such person was a shareholder of record at the time
of submission of such names and is entitled to vote at the meeting, and (ii)
that the Nominating Committee or the Board of Trustees, as applicable, shall
make the final determination of persons to be nominated.
Section 3. Election of Trustees. All meetings of Shareholders for the
purpose of electing Trustees shall be held on such date and at such time as
shall be designated from time to time by the Trustees and stated in the notice
of the meeting, at which the Shareholders shall elect by a plurality vote any
number of Trustees as the notice for such meeting shall state are to be elected,
and transact such other business as may properly be brought before the meeting
in accordance with Section 1 of this Article IV.
Section 4. Notice of Meetings. Written notice of any meeting stating
the place, date, and hour of the meeting shall be given to each Shareholder
entitled to vote at such meeting not less than ten days before the date of the
meeting in accordance with Article V hereof.
Section 5. Special Meetings. Special meetings of the Shareholders, for
any purpose or purposes, unless otherwise prescribed by applicable law or by the
Agreement, may be called by any Trustee; provided, however, that the Trustees
shall promptly call a meeting of the Shareholders solely for the purpose of
removing one or more Trustees, when requested in writing so to do by the record
holders of not less than ten percent of the Outstanding Shares of the Trust.
Section 6. Notice of Special Meeting. Written notice of a special
meeting stating the place, date, and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given not less than ten days
before the date of the meeting, to each Shareholder entitled to vote at such
meeting.
Section 7. Conduct of Special Meeting. Business transacted at any
special meeting of Shareholders shall be limited to the purpose stated in the
notice.
Section 8. Quorum. The holders of one-third of the Outstanding Shares
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the Shareholders for the transaction of
business except as otherwise provided by applicable law or by the Agreement. If,
however, such quorum shall not be present or represented at any meeting of the
Shareholders, the vote of the holders of a majority of Shares cast shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting, at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
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<PAGE> 6
Section 9. Organization of Meetings.
(a) The Chairman of the Board of Trustees shall preside at
each meeting of Shareholders. In the absence of the Chairman of the Board, the
meeting shall be chaired by the President, or if the President shall not be
present, by a Vice President. In the absence of all such officers, the meeting
shall be chaired by a person elected for such purpose at the meeting. The
Secretary of the Trust, if present, shall act as Secretary of such meetings, or
if the Secretary is not present, an Assistant Secretary of the Trust shall so
act, and if no Assistant Secretary is present, then a person designated by the
Secretary of the Trust shall so act, and if the Secretary has not designated a
person, then the meeting shall elect a secretary for the meeting.
(b) The Board of Trustees of the Trust shall be entitled to
make such rules and regulations for the conduct of meetings of Shareholders as
it shall deem necessary, appropriate or convenient. Subject to such rules and
regulations of the Board of Trustees, if any, the chairman of the meeting shall
have the right and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are necessary,
appropriate or convenient for the proper conduct of the meeting, including,
without limitation, establishing: an agenda or order of business for the
meeting; rules and procedures for maintaining order at the meeting and the
safety of those present; limitations on participation in such meeting to
shareholders of record of the Trust and their duly authorized and constituted
proxies, and such other persons as the chairman shall permit; restrictions on
entry to the meeting after the time fixed for the commencement thereof;
limitations on the time allotted to questions or comments by participants; and
regulation of the opening and closing of the polls for balloting on matters
which are to be voted on by ballot, unless and to the extent the Board of
Trustees or the chairman of the meeting determines that meetings of Shareholders
shall not be required to be held in accordance with the rules of parliamentary
procedure.
Section 10. Voting Standard. When a quorum is present at any meeting,
the vote of the holders of a majority of the Shares cast shall decide any
question brought before such meeting, unless the question is one on which, by
express provision of applicable law, the Agreement, these Bylaws, or applicable
contract, a different vote is required, in which case such express provision
shall govern and control the decision of such question.
Section 11. Voting Procedure. Each whole Share shall be entitled to one
vote, and each fractional Share shall be entitled to a proportionate fractional
vote. On any matter submitted to a vote of the Shareholders, all Shares shall be
voted together, except when required by applicable law or when the Trustees have
determined that the matter affects the interests of one or more Portfolios (or
Classes), then only the Shareholders of such Portfolios (or Classes) shall be
entitled to vote thereon.
Section 12. Action Without Meeting. Unless otherwise provided in the
Agreement or applicable law, any action required to be taken at any meeting of
the Shareholders, or any action which may be taken at any meeting of the
Shareholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of Outstanding Shares having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all Shares entitled to vote thereon were present and voted.
Prompt notice of the taking of any such action without a
6
<PAGE> 7
meeting by less than unanimous written consent shall be given to those
Shareholders who have not consented in writing.
Section 13. Broker Non-Votes. At any meeting of Shareholders the Trust
will consider broker non-votes as present for purposes of determining whether a
quorum is present at the meeting. Broker non-votes will not count as votes cast.
ARTICLE V
NOTICES
Section 1. Methods of Giving Notice. Whenever, under the provisions of
applicable law or of the Agreement or of these Bylaws, notice is required to be
given to any Trustee or Shareholder, it shall not, unless otherwise provided
herein, be construed to mean personal notice, but such notice may be given
orally in person, or by telephone (promptly confirmed in writing) or in
writing, by mail addressed to such Trustee at his or her last given address or
to such Shareholder at his address as it appears on the records of the Trust,
with postage thereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail. Notice to
Trustees or members of a committee may also be given by telex, telegram,
facsimile, electronic-mail or via overnight courier. If sent by telex or
facsimile, notice to a Trustee or member of a committee shall be deemed to be
given upon transmittal; if sent by telegram, notice to a Trustee or member of a
committee shall be deemed to be given when the telegram, so addressed, is
delivered to the telegraph company; if sent by electronic-mail, notice to a
Trustee or member of a committee shall be deemed to be given and shall be
presumed valid when the Trust's electronic-mail server reflects the
electronic-mail message as having been sent; and if sent via overnight courier,
notice to a Trustee or member of a committee shall be deemed to be given when
delivered against a receipt therefor.
Section 2. Written Waiver. Whenever any notice is required to be given
under the provisions of applicable law or of the Agreement or of these Bylaws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE VI
CERTIFICATES OF SHARES
Section 1. Issuance. Upon request, every holder of Shares in the Trust
shall be entitled to have a certificate, signed by, or in the name of the Trust
by, the President, certifying the number of Shares owned by him in the Trust.
7
<PAGE> 8
Section 2. Countersignature. Where a certificate is countersigned (1)
by a transfer agent other than the Trust or its employee, or (2) by a registrar
other than the Trust or its employee, the signature of the President may be a
facsimile.
Section 3. Lost Certificates. The Board of Trustees may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Trust alleged to have been lost, stolen
or destroyed, upon the making of an affidavit of the fact by the person claiming
the certificate to be lost, stolen or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Trustees may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
to give the Trust a bond in such sum as it may direct as indemnity against any
claim that may be made against the Trust with respect to the certificate alleged
to have been lost, stolen or destroyed.
Section 4. Transfer of Shares. The Trustees shall make such rules as
they consider appropriate for the transfer of Shares and similar matters. To the
extent certificates are issued in accordance with Section 1 of this Article VI,
upon surrender to the Trust or the transfer agent of the Trust of such
certificate for Shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
Trust to issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 5. Fixing Record Date. In order that the Trustees may determine
the Shareholders entitled to notice of or to vote at any meeting of Shareholders
or any adjournment thereof, or to express consent to action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution of
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of beneficial interests or for the purpose of any
other lawful action, the Board of Trustees may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Trustees, and which record date shall not be more
than ninety nor less than ten days before the date of such meeting, nor more
than ten days after the date upon which the resolution fixing the record date is
adopted by the Board of Trustees for action by Shareholder consent in writing
without a meeting, nor more than ninety days prior to any other action. A
determination of shareholders of record entitled to notice of or to vote at a
meeting of Shareholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Trustees may fix a new record date for the adjourned
meeting.
Section 6. Registered Shareholders. The Trust shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of Shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim of interest in such Share or
Shares on the part of any other person, whether or not it shall have express or
other notice hereof.
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<PAGE> 9
ARTICLE VII
GENERAL PROVISIONS
Section 1. Seal. The business seal shall have inscribed thereon the
name of the business trust, the year of its organization and the word "Business
Seal, Delaware." The seal may be used by causing it or a facsimile thereof to
be impressed or affixed or otherwise reproduced. Any officer or Trustee of the
Trust shall have authority to affix the seal of the Trust to any document
requiring the same.
Section 2. Severability. The provisions of these Bylaws are severable.
If any provision hereof shall be held invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall attach only to such
provision only in such jurisdiction and shall not affect any other provision of
these Bylaws.
Section 3. Headings. Headings are placed in these Bylaws for
convenience of reference only and in case of any conflict, the text of these
Bylaws rather than the headings shall control.
ARTICLE VIII
INDEMNIFICATION
Section 1. Indemnification. For the purpose of this Section 1, "Trust"
includes any domestic or foreign predecessor entity of this Trust in a merger,
consolidation, or other transaction in which the predecessor's existence ceased
upon consummation of the transaction; "proceeding" means any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative; and "expenses" includes without limitation
attorney's fees and any expenses of establishing a right to indemnification
under this Section 1.
(a) The Trust shall indemnify any person who was or is
a party or is threatened to be made a party to any proceeding (other
than an action by or in the right of the Trust) by reason of the fact
that such person is or was a Covered Person, against expenses,
judgments, fines and amounts paid in settlements actually and
reasonably incurred by such person in connection with such proceeding,
if it is determined that person acted in good faith and reasonably
believed: (a) in the case of conduct in his official capacity as a
Covered Person, that his conduct was in the Trust's best interests and
(b) in all other cases, that his conduct was at least not opposed to
the Trust's best interests and (c) in the case of a criminal
proceeding, that he had no reasonable cause to believe that his
conduct was
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<PAGE> 10
unlawful. The termination of any proceeding by judgment, order or
settlement shall not, of itself, create a presumption that the person
did not meet the requisite standard of conduct set forth in this
Section 1. The termination of any proceeding by conviction, or a plea
of nolo contendere or its equivalent, or an entry of an order of
probation prior to judgment, creates a rebuttable presumption that the
person did not meet the requisite standard of conduct set forth in this
Section 1.
(b) The Trust shall indemnify any person who was or is
a party or is threatened to be made a party to any proceeding by or in
the right of the Trust to procure a judgment in its favor by reason of
the fact that person is or was a Covered Person, against expenses
actually and reasonably incurred by that person in connection with the
defense or settlement of such action or suit if that person acted in
good faith, in a manner that person believed to be in the best
interests of the Trust and with such care, including reasonable
inquiry, as an ordinarily prudent person in a like position would use
under similar circumstances.
(c) Notwithstanding any provision to the contrary
contained herein, there shall be no right to indemnification for any
liability arising by reason of willful misfeasance, bad faith, gross
negligence, or the reckless disregard of the duties involved in the
conduct of the Covered Person's office with the Trust.
Section 2. Advance Payments of Indemnifiable Expenses. To the maximum
extent permitted by law, the Trust or applicable Portfolio may advance to a
Covered Person, in connection with the preparation and presentation of a defense
to any claim, action, suit, or proceeding, expenses for which the Covered Person
would ultimately be entitled to indemnification; provided that the Trust or
applicable Portfolio has received an undertaking by or on behalf of such Covered
Person that such amount will be paid over by him to the Trust or applicable
Portfolio if it is ultimately determined that he is not entitled to
indemnification for such expenses, and further provided that (i) such Covered
Person shall have provided appropriate security for such undertaking, (ii) the
Trust is insured against losses arising out of any such advance payments, or
(iii) either a majority of the Trustees who are not interested persons (as
defined in the 1940 Act) of the Trust nor parties to the matter, or independent
legal counsel in a written opinion shall have determined, based upon a review of
readily available facts (as opposed to a full trial-type inquiry) that there is
reason to believe that such Covered Person will not be disqualified from
indemnification for such expenses.
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ARTICLE IX
AMENDMENTS
Section 1. Amendments. These Bylaws may be altered or repealed at any
regular or special meeting of the Board of Trustees without prior notice. These
Bylaws may also be altered or repealed at any special meeting of the
Shareholders, but only if the Board of Trustees resolves to put a proposed
alteration or repealer to the vote of the Shareholders and notice of such
alteration or repealer is contained in a notice of the special meeting being
held for such purpose.
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<PAGE> 1
EXHIBIT d(4)(a)
FOREIGN COUNTRY SELECTION
AND MANDATORY SECURITIES DEPOSITORY RESPONSIBILITIES
DELEGATION AGREEMENT
This FOREIGN COUNTRY SELECTION AND MANDATORY SECURITIES DEPOSITORY
RESPONSIBILITIES DELEGATION AGREEMENT (the "Agreement") is made this 9th day of
September, 1998 by and between A I M ADVISORS, INC., a Delaware corporation
("AIM") and each registered investment company (the "Investment Companies") and
its respective portfolios (the "Funds") listed on the signature page hereof.
W I T N E S S E T H:
WHEREAS, AIM has agreed to accept responsibility for selecting and
monitoring relationships with compulsory depositories; and
WHEREAS, AIM has agreed to accept responsibility for the selection of
foreign countries in which the Funds may invest;
NOW, THEREFORE, AIM hereby agrees to exercise reasonable care, prudence and
diligence such as a person having safekeeping of fund assets would exercise in
performing the following responsibilities:
1. DEFINITIONS.
A. "FOREIGN ASSETS" means any of a Fund's investments (including foreign
currencies) for which the primary market is outside the United States,
currency contracts that are settled outside the United States, and
such cash and cash equivalents as are reasonably necessary to effect
the Fund's transactions in such investments.
B. "FOREIGN CUSTODY MANAGER" means State Street Bank and Trust Company.
C. "MANDATORY SECURITIES DEPOSITORY" means a foreign securities
depository or clearing agency that, either as a legal or practical
matter, must be used if a Fund determines to place Foreign Assets in a
country outside the United States (i) because required by law or
regulation; (ii) because securities cannot be withdrawn from such
foreign securities depository or clearing agency; or (iii) because
maintaining or effecting trades in securities outside the foreign
securities depository or clearing agency is not consistent with
prevailing or developing custodial or market practices.
D. "PREVAILING COUNTRY RISKS" means all factors reasonably related to the
systemic risk of holding Foreign Assets in a particular country,
including but not limited to, such country's political environment;
economic and financial infrastructure (including any Mandatory
Securities Depositories operating in the country); prevailing or
developing custody and settlement practices; laws and regulations
applicable to the safekeeping and recovery of Foreign Assets held in
custody in that country; and factors comprising "prevailing country
risk", including the effects of foreign law on the safekeeping of Fund
assets, the likelihood of expropriation, nationalization, freezing or
confiscation of the Fund's assets and any reasonably foreseeable
difficulties in repatriating the Fund's assets.
<PAGE> 2
E. "SECURITIES DEPOSITORY" means a system for the central handling of
securities where all securities of any particular class or series of
any issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical
delivery of the securities. A Securities Depository includes a
Mandatory Securities Depository.
2. FOREIGN COUNTRY SELECTION. Selection of foreign countries in which a Fund
invests. AIM may determine that an issuer is located in a particular
country based on various factors, including the following: (i) the issuer
is organized under the laws of and maintains a principal office in that
country; (ii) the issuer derives 50% or more of its total revenues from
business in that country; or (iii) the primary market for the issuer's
securities is in that country. In addition, in determining whether to
maintain assets of a Fund in a foreign country, AIM shall consider
Prevailing Country Risks. AIM may rely on information provided by
computerized information services, such as Bloomberg terminals, in making
the foregoing determinations. AIM may also rely on information and
opinions provided by the Foreign Custody Manager in making such
determinations. AIM may add or delete foreign countries to or from the
list of approved foreign countries from time to time, as determined by the
AIM employees who are portfolio managers of the Funds.
3. MANDATORY SECURITIES DEPOSITORIES SELECTION. Selection of Mandatory
Securities Depositories for the placement and maintenance of Foreign
Assets. AIM shall not make any such selection unless and until it has
complied with the terms of paragraphs 4 through 6 of this Agreement.
4. DETERMINATION OF REASONABLE CARE. Determinations by AIM that the Foreign
Assets will be subject to reasonable care, based on the standards
applicable to custodians in the relevant market, if such Assets are held
with a Mandatory Securities Depository. In making such determinations, AIM
shall consider all factors relevant to the safekeeping of such Foreign
Assets, including without limitation:
A. The practices, procedures, and internal controls of the Mandatory
Securities Depository, including, but not limited to, the physical
protections available for certificated securities (if applicable), the
method of keeping custodial records, and the security and data
protection practices;
B. Whether the Mandatory Securities Depository has the requisite
financial strength to provide reasonable care for the Foreign Assets;
C. The general reputation and standing of the Mandatory Securities
Depository and its operating history and number of participants; and
D. Whether the Fund will have jurisdiction over and be able to enforce
judgments against the Mandatory Securities Depository, such as by
virtue of the existence of any offices of the Mandatory Securities
Depository in the United States or the consent by the Mandatory
Securities Depository to service of process in the United States.
5. FOREIGN CUSTODY ARRANGEMENTS. Implementation of the Funds' foreign custody
arrangements pursuant to written contracts, by the rules or established
practices or
<PAGE> 3
procedures of the Mandatory Securities Depository, or by any combination of the
foregoing that AIM determines will provide reasonable care for the Funds'
Foreign Assets based on the standards specified in paragraph A.2. above. Any
such contracts shall include provisions that provide:
A. For indemnification or insurance arrangements (or any combination of
the foregoing) such that the Funds will be adequately protected
against the risk of loss of Foreign Assets held in accordance with
such contracts;
B. That the Funds' Foreign Assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of the
custodian or its creditors except a claim of payment for their safe
custody or administration or, in the case of cash deposits, liens or
rights in favor of creditors of the custodian arising under
bankruptcy, insolvency, or similar laws;
C. That beneficial ownership for the Funds' Foreign Assets will be freely
transferable without the payment of money or value other than for safe
custody or administration;
D. That adequate records will be maintained identifying the Foreign
Assets as belonging to a Fund or as being held by a third party for
the benefit of the Fund;
E. That each Fund's independent public accountants will be given access
to those records or confirmation of the content of those records; and
F. That a Fund will receive periodic reports with respect to the
safekeeping of the Fund's Foreign Assets, including, but not limited
to, notification of any transfer to or from the Fund's accounts or a
third party account containing Foreign Assets held for the benefit of
the Fund.
In lieu of any or all of the provisions specified in a. through f.
above, such contracts may contain such other provisions that AIM
determines will provide, in their entirety, the same or a greater
level of care and protection for Fund Foreign Assets as the specified
provisions, in their entirety.
6. MONITORING MANDATORY SECURITIES DEPOSITORIES. Establishment of a system
(a) to monitor the appropriateness of maintaining the Fund's Foreign Assets
with a particular Mandatory Securities Depository under Section 4 above,
and the contracts governing the Funds' arrangements under Section 5 above;
and (b) to notify the Funds promptly if an arrangement no longer meets the
requirements of [this section B] and to withdraw promptly the Funds'
Foreign Assets from such Mandatory Securities Depository in such event.
7. REPORTS AND OTHER INFORMATION.
A. ANNUAL REPORTS AND OTHER INFORMATION. AIM shall furnish annually to
the Boards of Directors/Trustees information regarding the factors
used in its system to monitor Mandatory Securities Depositories.
B. QUARTERLY REPORTS. AIM will submit to the Boards of
Directors/Trustees a quarterly report listing all newly approved
countries and all countries in which a Fund invested
<PAGE> 4
for the first time during the preceding quarter. Such report shall
include a revised Appendix 1 to the Foreign Custody and Country
Selection Procedures, if applicable, listing the approved countries.
AIM will submit to the Boards of Directors/Trustees a quarterly report
indicating changes to Mandatory Securities Depositories to the extent
such report is not provided by the Foreign Custody Manager.
C. OTHER REPORTS. AIM will notify the Boards of Directors/Trustees in
writing of any material change in the Mandatory Securities
Depositories for a Fund that has not been reported by the Foreign
Custody Manager promptly after the occurrence of the material change.
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
A I M ADVISORS, INC.
Attest: /s/ NANCY L. MARTIN By: /s/ ROBERT H. GRAHAM
------------------------ -------------------------
Assistant Secretary Name:
Title:
(SEAL)
AIM ADVISOR FUNDS, INC. AIM SUMMIT FUND, INC.
AIM Advisor Flex Fund
AIM Advisor International Value Fund AIM INTERNATIONAL FUNDS, INC.
AIM Advisor Large Cap Value Fund AIM Asian Growth Fund
AIM Advisor MultiFlex Fund AIM European Development Fund
AIM Advisor Real Estate Fund AIM International Equity Fund
AIM Global Aggressive Growth Fund
AIM EQUITY FUNDS, INC. AIM Global Growth Fund
AIM Aggressive Growth Fund AIM Global Income Fund
AIM Blue Chip Fund
AIM Capital Development Fund AIM VARIABLE INSURANCE FUNDS, INC.
AIM Charter Fund AIM V.I. Aggressive Growth Fund
AIM Constellation Fund AIM V.I. Balanced Fund
AIM Weingarten Fund AIM V.I. Capital Appreciation Fund
AIM V.I. Capital Development Fund
AIM FUNDS GROUP AIM V.I. Diversified Income Fund
AIM Balanced Fund AIM V.I. Global Utilities Fund
AIM Global Utilities Fund AIM V.I. Government Securities Fund
AIM High Yield Fund AIM V.I. Growth Fund
AIM Income Fund AIM V.I. Growth & Income Fund
AIM Money Market Fund AIM V.I. High Yield Fund
AIM Select Growth Fund AIM V.I. International Equity Fund
AIM Value Fund AIM V.I. Money Market Fund
AIM V.I. Value Fund
AIM SPECIAL OPPORTUNITIES FUNDS
AIM Small Cap Opportunities Fund
Attest: /s/ P. MICHELLE GRACE By: /s/ JOHN J. ARTHUR
------------------------ ---------------------------
Assistant Secretary Name: John J. Arthur
Title: Senior Vice President
(SEAL)
<PAGE> 1
EXHIBIT d(4)(b)
AMENDMENT NO. 1
TO
FOREIGN COUNTRY SELECTION
AND MANDATORY SECURITIES DEPOSITORY RESPONSIBILITIES
DELEGATION AGREEMENT
This Amendment No. 1 dated as of September 28, 1998, amends the Foreign
Country Selection and Mandatory Securities Depository Responsibilities
Delegation Agreement (the "Agreement"), dated September 9, 1998, between A I M
Advisors, Inc., a Delaware corporation and each registered investment company
(the "Investment Companies") and its respective portfolios (the "Funds") listed
on the signature page thereof.
W I T N E S S E T H:
WHEREAS, the parties to the Agreement desire to amend the Agreement to
add AIM Investment Securities Funds on behalf of its AIM High Yield Fund II
portfolio as a party to the agreement;
NOW, THEREFORE, the parties agree as follows;
1. The list of Investment Companies and Funds covered by the
Agreement is hereby amended to include the following:
"AIM INVESTMENT SECURITIES FUNDS
AIM High Yield Fund II"
2. In all other respects, the Agreement is hereby confirmed and
remains in full force and effect.
<PAGE> 2
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be
executed by their respective officers on the date first written above.
A I M ADVISORS, INC.
Attest: /s/ SAMUEL D. SIRKO By: /s/ ROBERT H. GRAHAM
---------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
AIM ADVISOR FUNDS, INC. AIM SPECIAL OPPORTUNITIES FUNDS
AIM Advisor Flex Fund AIM Small Cap Opportunities Fund
AIM Advisor International Value Fund
AIM Advisor Large Cap Value Fund AIM SUMMIT FUND, INC.
AIM Advisor MultiFlex Fund
AIM Advisor Real Estate Fund AIM INTERNATIONAL FUNDS, INC.
AIM Asian Growth Fund
AIM EQUITY FUNDS, INC. AIM European Development Fund
AIM Aggressive Growth Fund AIM International Equity Fund
AIM Blue Chip Fund AIM Global Aggressive Growth Fund
AIM Capital Development Fund AIM Global Growth Fund
AIM Charter Fund AIM Global Income Fund
AIM Constellation Fund
AIM Weingarten Fund AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Aggressive Growth Fund
AIM FUNDS GROUP AIM V.I. Balanced Fund
AIM Balanced Fund AIM V.I. Capital Appreciation Fund
AIM Global Utilities Fund AIM V.I. Capital Development Fund
AIM High Yield Fund AIM V.I. Diversified Income Fund
AIM Income Fund AIM V.I. Global Utilities Fund
AIM Money Market Fund AIM V.I. Government Securities Fund
AIM Select Growth Fund AIM V.I. Growth Fund
AIM Value Fund AIM V.I. Growth & Income Fund
AIM V.I. High Yield Fund
AIM INVESTMENT SECURITIES FUNDS AIM V.I. International Equity Fund
AIM High Yield Fund II AIM V.I. Money Market Fund
AIM V.I. Value Fund
Attest: /s/ SAMUEL D. SIRKO By: /s/ ROBERT H. GRAHAM
---------------------------- ---------------------------------
Assistant Secretary President
(SEAL)
<PAGE> 1
EXHIBIT e(9)
[LOGO]
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 (the
"Shares") of the registered investment companies for which we now or in the
future act as underwriter, as disclosed in each Fund's prospectus, which may be
amended from time to time by us (the "Funds"), understands that you are a member
in good standing of the National Association of Securities Dealers, Inc.
(""NASD"), or, if a foreign dealer, that you agree to abide by all of the rules
and regulations of the NASD for purposes of this Agreement (which you confirm by
your signature below). In consideration of the mutual covenants stated below,
you and we hereby agree as follows:
1. Sales of Shares through you will be at the public offering price of such
Shares (the net asset value of the Shares plus any sales charge
applicable to such Shares (the "Sales Charge")), as determined in
accordance with the then effective prospectus or Statement of Additional
Information used in connection with the offer and sale of Shares
(collectively, the "Prospectus"), which public offering price may reflect
scheduled variations in, or the elimination of, the Sales Charge on sales
of the Funds' Shares either generally to the public or in connection with
special purchase plans, as described in the Prospectus. You agree that
you will apply any scheduled variation in, or elimination of, the Sales
Charge uniformly to all offerees in the class specified in the
Prospectus.
2. You agree to purchase Shares solely through us and only for the purpose
of covering purchase orders already received from customers or for your
own bona fide investment. You agree not to purchase for any other
securities dealer unless you have an agreement with such other dealer or
broker to handle clearing arrangements and then only in the ordinary
course of business for such purpose and only if such other dealer has
executed a Selected Dealer Agreement with us. You also agree not to
withhold any customer order so as to profit therefrom.
3. The procedures relating to the handling of orders shall be subject to
instructions which we will forward from time to time to all selected
dealers with whom we have entered into a Selected Dealer Agreement. The
minimum initial order shall be specified in the Funds' then current
Prospectuses. All purchase orders are subject to receipt of Shares by us
from the Funds concerned and to acceptance of such orders by us. We
reserve the right in our sole discretion to reject any order.
4. With respect to the Funds the Shares of which are indicated in that
Fund's Prospectus as being sold with a Sales Charge (the "Load Funds"),
you will be allowed the concessions from the public offering price
provided in the Load Funds' Prospectus and/or periodic instruction from
us. With respect to the Funds, the Shares of which are indicated in that
Fund's Prospectus as being sold with a contingent deferred sales charge
or early withdrawal charge (the "CDSC Funds"), you will be paid a
commission as disclosed in the CDSC Fund's Prospectus and/or periodic
instructions from us. With respect to the Funds whose Shares are
indicated as being sold without a Sales Charge or a contingent deferred
sales charge (the "No-Load Funds"), you may charge a reasonable
administrative fee. For the purposes of this Agreement the term Dealer
Commission means commissions or concessions
5/98
<PAGE> 2
Page 2
payable to you as disclosed in the Funds' Prospectuses and the terms
"Sales Charge" and "Dealer Commission" apply only to the Load Funds and
the CDSC Funds. All Dealer Commissions are subject to change without
notice by us and will comply with any changes in regulatory requirements.
You agree that you will not combine customer orders to reach breakpoints
in commissions for any purpose whatsoever unless authorized by the
Prospectus or by us in writing.
5. You agree that your transactions in Shares of the Funds will be limited
to (a) the purchase of Shares from us for resale to your customers at the
public offering price then in effect or for your own bona fide
investment, (b) exchanges of Shares between Funds, as permitted by the
Funds' then current registration statement (which includes the
Prospectus) and in accordance with procedures as they may be modified by
us from time to time, and (c) transactions involving the redemption of
Shares by a Fund or the repurchase of Shares by us as an accommodation to
shareholders or where applicable, through tender offers. Redemptions by a
Fund and repurchases by us will be effected in the manner and upon the
terms described in the Prospectus. We will, upon your request, assist you
in processing such orders for redemptions or repurchases. To facilitate
prompt payment following a redemption or repurchase of Shares, the
owner's signature shall appear as registered on the Funds' records and,
as described in the Prospectus, it may be required to be guaranteed by a
commercial bank, trust company or a member of a national securities
exchange.
6. Sales and exchanges of Shares may only be made in those states and
jurisdictions where the Shares are registered or qualified for sale to
the public. We agree to advise you currently of the identity of those
states and jurisdictions in which the Shares are registered or qualified
for sale, and you agree to indemnify us and/or the Funds for any claim,
liability, expense or loss in any way arising out of a sale of Shares in
any state or jurisdiction in which such Shares are not so registered or
qualified.
7. We shall accept orders only on the basis of the then current offering
price. You agree to place orders in respect of Shares immediately upon
the receipt of orders from your customers for the same number of Shares.
Orders which you receive from your customers shall be deemed to be placed
with us when received by us. Orders which you receive prior to the close
of business, as defined in the Prospectus, and placed with us within the
time frame set forth in the Prospectus shall be priced at the offering
price next computed after they are received by you. We will not accept
from you a conditional order on any basis. All orders shall be subject to
confirmation by us.
8. Your customer will be entitled to a reduction in the Sales Charge on
purchases made under a Letter of Intent or Right of Accumulation
described in the Prospectus. In such case, your Dealer Commission will be
based upon such reduced Sales Charge; however, in the case of a Letter of
Intent signed by your customer, an adjustment to a higher Dealer
Commission will thereafter be made to reflect actual purchases by your
customer if he should fail to fulfill his Letter of Intent. When placing
wire trades, you agree to advise us of any Letter of Intent signed by
your customer or of any Right of Accumulation available to him of which
he has made you aware. If you fail to so advise us, you will be liable to
us for the return of any Dealer Commission plus interest thereon.
9. You and we agree to abide by the Conduct Rules of the NASD and all other
federal and state rules and regulations that are now or may become
applicable to transactions hereunder. Your expulsion from the NASD will
automatically terminate this Agreement without notice. Your suspension
from the
5/98
<PAGE> 3
Page 3
NASD or a violation by you of applicable state and federal laws and rules
and regulations of authorized regulatory agencies will terminate this
Agreement effective upon notice received by you from us. You agree that
it is your responsibility to determine the suitability of any Shares as
investments for your customers, and that AIM Distributors has no
responsibility for such determination.
10. With respect to the Load Funds and the CDSC Funds, and unless otherwise
agreed, settlement shall be made at the offices of the Funds' transfer
agent within three (3) business days after our acceptance of the order.
With respect to the No-Load Funds, settlement will be made only upon
receipt by the Fund of payment in the form of federal funds. If payment
is not so received or made within ten (10) business days of our
acceptance of the order, we reserve the right to cancel the sale or, at
our option, to sell the Shares to the Funds at the then prevailing net
asset value. In this event, or in the event that you cancel the trade for
any reason, you agree to be responsible for any loss resulting to the
Funds or to us from your failure to make payments as aforesaid. You shall
not be entitled to any gains generated thereby.
11. If any Shares of any of the Load Funds sold to you under the terms of
this Agreement are redeemed by the Fund or repurchased for the account of
the Funds or are tendered to the Funds for redemption or repurchase
within seven (7) business days after the date of our confirmation to you
of your original purchase order therefore, you agree to pay forthwith to
us the full amount of the Dealer Commission allowed to you on the
original sale and we agree to pay such amount to the Fund when received
by us. We also agree to pay to the Fund the amount of our share of the
Sales Charge on the original sale of such Shares.
12. Any order placed by you for the repurchase of Shares of a Fund is subject
to the timely receipt by the Fund's transfer agent of all required
documents in good order. If such documents are not received within a
reasonable time after the order is placed, the order is subject to
cancellation, in which case you agree to be responsible for any loss
resulting 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.
5/98
<PAGE> 4
Page 4
16. We will supply you with copies of the Prospectuses of the Funds
(including any amendments thereto) in reasonable quantities upon request.
You will provide all customers with a prospectus prior to or at the time
such customer purchases Shares. You will provide any customer who so
requests a copy of the Statement of Additional Information within the
time dictated by regulatory requirements, as they may be amended from
time to time.
17. You shall be solely responsible for the accuracy, timeliness and
completeness of any orders transmitted by you on behalf of your customers
by wire or telephone for purchases, exchanges or redemptions, and shall
indemnify us against any claims by your customers as a result of your
failure to properly transmit their instructions.
18. No advertising or sales literature, as such terms are defined by the
NASD, of any kind whatsoever will be used by you with respect to the
Funds or us unless first provided to you by us or unless you have
obtained our prior written approval.
19. All expenses incurred in connection with your activities under this
Agreement shall be borne by you.
20. This Agreement shall not be assignable by you. This Agreement shall be
constructed in accordance with the laws of the State of Texas.
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.
5/98
<PAGE> 5
Page 5
A I M DISTRIBUTORS, INC.
Date: By: X
------------------------------ ------------------------------------
The undersigned accepts your invitation to become a Selected Dealer and agrees
to abide by the foregoing terms and conditions. The undersigned acknowledges
receipt of Prospectuses for use in connection with offers and sales of the
Funds.
Date By:X
------------------------------ ------------------------------------
Signature
------------------------------------
Print Name Title
------------------------------------
Dealer's Name
------------------------------------
Address
------------------------------------
City State Zip
------------------------------------
Telephone
Please sign both copies and return one copy of each to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
5/98
<PAGE> 1
EXHIBIT e(10)
[LOGO]
A I M Distributors, Inc.--Registered Trademark--
BANK ACTING AS AGENT
FOR ITS CUSTOMERS
AGREEMENT RELATING TO SHARES
OF THE AIM FAMILY OF FUNDS--Registered Trademark--
(CONFIRMATION AND PROSPECTUS TO BE SENT
BY A I M DISTRIBUTORS, INC. TO CUSTOMER)
A I M Distributors, Inc. is the exclusive national distributor of the shares of
the registered investment companies for which we now or in the future act as
underwriter, as disclosed in each Fund's prospectus, which may be amended from
time to time (the "Funds"). As exclusive agent for the Funds, we are offering to
make available shares of the Funds (the "Shares") for purchase by your customers
on the following terms:
1. In all sales of Shares you shall act as agent for your customers, and
in no transaction shall you have any authority to act as agent for any
Fund or for us.
2. The customers in question are, for all purposes, your customers and not
customers of A I M Distributors, Inc. In receiving orders from your
customers who purchase Shares, A I M Distributors, Inc. is not
soliciting such customers and, therefore, has no responsibility for
determining whether Shares are suitable investments for such customers.
3. It is hereby understood that in all cases in which you place orders
with us for the purchase of Shares (a) you are acting as agent for the
customer; (b) the transactions are without recourse against you by the
customer; (c) as between you and the customer, the customer will have
full beneficial ownership of the securities; (d) each such transaction
is initiated solely upon the order of the customer; and (e) each such
transaction is for the account of the customer and not for your
account.
4. Orders received from you will be accepted by us only at the public
offering price applicable to each order, as established by the then
current prospectus or Statement of Additional Information,
(collectively, the "Prospectus") of the appropriate Fund, subject to
the discounts (defined below) provided in such Prospectus. Following
receipt from you of any order to purchase Shares for the account of a
customer, we shall confirm such order to you in writing. We shall be
responsible for sending your customer a written confirmation of the
order with a copy of the appropriate Fund's current Prospectus. We
shall send you a copy of such confirmation. Additional instructions may
be forwarded to you from time to time. All orders are subject to
acceptance or rejection by us in our sole discretion.
5. Members of the general public, including your customers, may purchase
Shares only at the public offering price determined in the manner
described in the current Prospectus of the appropriate Fund. With
respect to the Funds, the Shares of which are indicated in that Fund's
Prospectus as being sold with a sales charge (i.e. the "Load Funds"),
you will be allowed to retain a commission or concession from the
public offering price provided in such Load Funds' current Prospectus
and/or periodic instructions from us. With respect to the Funds, the
Shares of which are indicated in that Fund's Prospectus as being sold
with a contingent deferred sales charge or early withdrawal charge (the
5/98
<PAGE> 2
Bank Acting as Agent for its Customers Page 2
"CDSC Funds"), you will be paid a commission or concession as disclosed
in the CDSC Fund's then current Prospectus and/or periodic instructions
from us. With respect to the Funds whose Shares are indicated on the
attached Schedule as being sold without a sales charge or a contingent
deferred sales charge, (i.e. the "No-Load Funds"), you will not be
allowed to retain any commission or concession. All commissions or
concessions set forth in any of the Load Funds' or CDSC Funds'
Prospectus are subject to change without notice by us and will comply
with any changes in regulatory requirements.
6. The tables of sales charges and discounts set forth in the current
Prospectus of each Fund are applicable to all purchases made at any one
time by any "purchaser", as defined in the current Prospectus. For this
purpose, a purchaser may aggregate concurrent purchases of securities
of any of the Funds.
7. Reduced sales charges may also be available as a result of quantity
discounts, rights of accumulation or letters of intent. Further
information as to such reduced sales charges, if any, is set forth in
the appropriate Fund Prospectus. In such case, your discount will be
based upon such reduced sales charge; however, in the case of a letter
of intent signed by your customer, an adjustment to a higher discount
will thereafter be made to reflect actual purchases by your customer if
he should fail to fulfill his letter of intent. You agree to advise us
promptly as to the amounts of any sales made by you to your customers
qualifying for reduced sales charges. If you fail to so advise us of
any letter of intent signed by your customer or of any right of
accumulation available to him of which he has made you aware, you will
be liable to us for the return of any discount plus interest thereon.
8. By accepting this Agreement you agree:
a. that you will purchase Shares only from us;
b. that you will purchase Shares from us only to cover purchase orders
already received from your customers; and
c. that you will not withhold placing with us orders received from
your customers so as to profit yourself as a result of such
withholdings.
9. We will not accept from you a conditional order for Shares on any
basis.
10. Payment for Shares ordered from us shall be in the form of a wire
transfer or a cashiers check mailed to us. Payment shall be made within
three (3) business days after our acceptance of the order placed on
behalf of your customer. Payment shall be equal to the public offering
price less the discount retained by you hereunder.
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.
5/98
<PAGE> 3
Bank Acting as Agent for its Customers Page 3
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.
5/98
<PAGE> 4
Bank Acting as Agent for its Customers Page 4
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
5/98
<PAGE> 1
EXHIBIT g(1)(c)
AMENDMENT NO. 2 TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and AIM Funds Group (the "Fund") on behalf of 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 and AIM Value Fund
(the "Portfolios").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated October 15, 1993 (the "Custodian Contract") governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Portfolios of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Portfolios' securities and
other non-cash property in the custody of certain foreign sub-custodians in
conformity with the requirements of Rule 17f-5 under the Investment Company Act
of 1940, as amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of each Portfolio of the Fund which are maintained in such account shall
identify by book-entry those securities and other non-cash property belonging to
each Portfolio of the Fund and (ii) the Custodian shall require that securities
and other non-cash property so held by the foreign sub-custodian be held
separately from any assets of the foreign sub-custodian or of others.
2. Except as specifically superseded or modified herein, the terms
and provisions of the Custodian Contract shall continue to apply with full force
and effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed as a sealed instrument in its name and behalf by its duly authorized
representative this 28th day of September, 1996.
AIM FUNDS GROUP
(on behalf of 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 and AIM Value Fund)
By: /s/ ROBERT H. GRAHAM
-------------------------------
Title: President
----------------------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ [ILLEGIBLE]
-------------------------------
Title: Executive Vice President
----------------------------
<PAGE> 1
EXHIBIT g(1)(d)
AMENDMENT TO CUSTODIAN CONTRACT
This Amendment to the Custodian Contract is made as of September 9,
1998 by and between AIM Funds Group (the "Fund") and State Street Bank and Trust
Company (the "Custodian"). Capitalized terms used in this Amendment without
definition shall have the respective meanings ascribed to such terms in the
Custodian Contract referred to below.
WHEREAS, the Fund and the Custodian entered into a Custodian Contract
dated as of October 15, 1993 (as amended and in effect from time to time, the
"Contract"); and
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets, and the Fund has made AIM Balanced Fund; AIM Global
Utilities Fund; AIM Select Growth Fund; AIM High Yield Fund; AIM Income Fund;
AIM Intermediate Government Fund; AIM Money Market Fund; and AIM Value Fund
subject to the Contract (each such series, together with all other series
subsequently established by the Fund and made subject to the Contract in
accordance with the terms thereof, shall be referred to as a "Portfolio", and,
collectively, the "Portfolios"); and
WHEREAS, the Fund and the Custodian desire to amend certain provisions
of the Contract to reflect revisions to Rule 17f-5 ("Rule 17f-5") promulgated
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund and the Custodian desire to amend and restate certain
other provisions of the Contract relating to the terms and conditions of the
custody of assets of each of the Portfolios held outside of the United States.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter contained, the parties hereby agree to
amend the Contract, pursuant to the terms thereof, as follows:
I. Article 3 of the Contract is hereby deleted, and Articles 4 through 17
of the Contract are hereby amended, as of the effective date of this
Amendment, by renumbering same as Articles 5 through 18, respectively.
II. New Articles 3 and 4 of the Contract are hereby added, as of the
effective date of this Amendment, as set forth below.
3. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
3.1. DEFINITIONS
Capitalized terms in this Article 3 of the Contract shall have the following
meanings:
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's
<PAGE> 2
political environment; economic and financial infrastructure (including any
Mandatory Securities Depositories operating in the country); prevailing or
developing custody and settlement practices; laws and regulations applicable to
the safekeeping and recovery of Foreign Assets held in custody in that country;
and factors comprising the "prevailing country risk", including the effects of
foreign law on the safekeeping of Portfolio assets, the likelihood of
expropriation, nationalization, freezing, or confiscation of a Portfolio's
assets and any reasonably foreseeable difficulties in repatriating a Portfolio's
assets.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the SEC, or a foreign branch of a Bank (as defined in Section 2(a)(5)
of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of
the 1940 Act, except that the term does not include Mandatory Securities
Depositories.
"Foreign Assets" means any of the Portfolio's investments (including foreign
currencies) for which the primary market is outside the United States, currency
contracts that are settled outside the United States and such cash and cash
equivalents as are reasonably necessary to effect the Portfolio's transactions
in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(2) of Rule
17f-5.
"Mandatory Securities Depository" means a foreign securities depository or
clearing agency that, either as a legal or practical matter, must be used if the
Fund determines to place Foreign Assets in a country outside the United States
(i) because required by law or regulation; (ii) because securities cannot be
withdrawn from such foreign securities depository or clearing agency; or (iii)
because maintaining or effecting trades in securities outside the foreign
securities depository or clearing agency is not consistent with prevailing or
developing custodial or market practices.
3.2. DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
The Fund, by resolution adopted by its Board of Trustees (the "Board"), hereby
delegates to the Custodian, subject to Section (b) of Rule 17f-5, the
responsibilities set forth in this Article 3 with respect to Foreign Assets
held outside the United States, and the Custodian hereby accepts such
delegation, as Foreign Custody Manager of each Portfolio.
3.3. COUNTRIES COVERED.
The Foreign Custody Manager shall be responsible for performing the delegated
responsibilities defined below only with respect to (a) the countries listed on
Schedule A hereto as approved by the Board, which list of Board-approved
countries may be amended from time to time by the Fund with the agreement of the
Foreign Custody Manager, and (b) the custody arrangements set forth on such
Schedule A. The Foreign Custody Manager shall list on Schedule A the Eligible
Foreign Custodians selected by the Foreign Custody Manager to maintain the
assets of each Portfolio, which list of Eligible Foreign Custodians may be
amended from time to time in the sole discretion of the Foreign Custody Manager.
Mandatory Securities Depositories are listed on Schedule
<PAGE> 3
B to this Contract, which Schedule B may be amended from time to time by the
Foreign Custody Manager. The Foreign Custody Manager will provide amended
versions of Schedules A and B in accordance with Section 3.7 of this Article 3.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account, or to place or maintain Foreign Assets, in a country listed on
Schedule A, and the fulfillment by the Fund of the account opening requirements
for such country (if any), the Foreign Custody Manager shall be deemed to have
been appointed by the Board as Foreign Custody Manager with respect to that
country and to have accepted the delegation. Execution of this Amendment by the
Fund shall be deemed to be a Proper Instruction to open an account, or to place
or maintain Foreign Assets, in each Board-approved country listed on Schedule A
in which the Custodian has previously placed or currently maintains Foreign
Assets pursuant to the terms of the Contract. Following the receipt of Proper
Instructions directing the Foreign Custody Manager to close the account of a
Portfolio with the Eligible Foreign Custodian selected by the Foreign Custody
Manager in a designated country, the delegation by the Board to the Custodian as
Foreign Custody Manager for that country shall be deemed to have been withdrawn
and the Custodian shall immediately cease to be the Foreign Custody Manager of
the Portfolio with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Thirty days (or such longer period as to which the parties agree in
writing) after receipt of any such notice by the Fund, the Custodian shall have
no further responsibility as Foreign Custody Manager to a Portfolio with
respect to the country as to which the Custodian's acceptance of delegation is
withdrawn.
3.4. SCOPE OF DELEGATED RESPONSIBILITIES.
3.4.1. SELECTION OF ELIGIBLE FOREIGN CUSTODIANS.
Subject to the provisions of this Article 3, the Foreign Custody Manager may
place and maintain the Foreign Assets in the care of the Eligible Foreign
Custodians selected by the Foreign Custody Manager in each country listed as
"approved" on Schedule A, as such Schedule is amended from time to time.
In performing its delegated responsibilities as Foreign Custody Manager to place
or maintain the Foreign Assets with an Eligible Foreign Custodian, the Foreign
Custody Manager shall determine that the Foreign Assets will be subject to
reasonable care, based on the standards applicable to custodians in the country
in which the Foreign Assets will be held by that Eligible Foreign Custodian,
after considering all factors relevant to the safekeeping of such assets,
including, without limitation, the factors specified in Rule 17f-5(c)(1).
3.4.2. CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS.
The Foreign Custody Manager shall determine that the contract (or the rules or
established practices or procedures in the case of an Eligible Foreign Custodian
that is a
<PAGE> 4
foreign securities depository or clearing agency) governing the foreign custody
arrangements with each Eligible Foreign Custodian selected by the Foreign
Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
3.4.3. MONITORING.
In each case in which the Foreign Custody Manager maintains Foreign Assets with
an Eligible Foreign Custodian, selected by the Foreign Custody Manager, the
Foreign Custody Manager shall maintain a system to monitor (i) the
appropriateness of maintaining the Foreign Assets with such Eligible Foreign
Custodian, and (ii) the contract governing the custody arrangements established
by the Foreign Custody Manager with the Eligible Foreign Custodian (or the rules
or established practices and procedures in the case of an Eligible Foreign
Custodian selected by the Foreign Custody Manager which is a foreign securities
depository or clearing agency that is not a Mandatory Securities Depository).
The Foreign Custody Manager shall provide the Board with information at least
annually as to the factors used in such monitoring system. In the event the
Foreign Custody Manager determines that the custody arrangements with an
Eligible Foreign Custodian that it has selected are no longer appropriate, the
Foreign Custody Manager shall promptly transfer the Fund's Foreign Assets to
another Eligible Foreign Custodian in the market and shall notify the Board in
accordance with Section 3.7 hereunder.
3.5. GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY.
For purposes of this Article 3, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and maintaining
the Foreign Assets in each country for which the Custodian is serving as Foreign
Custody Manager of a Portfolio, and the Board shall be deemed to be monitoring
on a continuing basis such Country Risk to the extent that the Board considers
necessary or appropriate.
Notwithstanding any provision of this Contract to the contrary, the Fund on
behalf of the Portfolios and the Custodian expressly acknowledge and agree that
the Foreign Custody Manager shall not be delegated any responsibilities under
this Article 3 with respect to Mandatory Securities Depositories, and that the
determination by or on behalf of the Board to place the Foreign Assets in a
particular country shall be deemed to include the determination to place such
Foreign Assets eligible for any Mandatory Securities Depository with such
Mandatory Securities Depository, whether the Mandatory Securities Depository
exists at the time the Foreign Assets are acquired, or after the acquisition
thereof.
3.6. STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF A PORTFOLIO.
In performing the responsibilities delegated to it, the Foreign Custody Manager
shall exercise reasonable care, prudence and diligence such as a person having
responsibility for the safekeeping of assets of management investment companies
registered under the 1940 Act would exercise.
<PAGE> 5
3.7. REPORTING REQUIREMENTS.
The Foreign Custody Manager shall report at least quarterly on the Foreign
Assets held with each Eligible Foreign Custodian and in connection therewith if
applicable, provide to the Board amended Schedules A or B at the end of the
calendar quarter in which an amendment to either Schedule has occurred. The
Foreign Custody Manager will make written reports notifying the Board of any
other material change in the foreign custody arrangements of the Portfolios
described in this Article 3 promptly after the occurrence of the material
change.
3.8. REPRESENTATIONS WITH RESPECT TO RULE 17f-5.
The Foreign Custody Manager represents to the Fund that it is a U.S. Bank as
defined in section (a)(7) of Rule 17f-5.
The Fund represents to the Custodian that the Board has determined that it is
reasonable for the Board to rely on the Custodian to perform the
responsibilities delegated pursuant to this Contract to the Custodian as the
Foreign Custody Manager of each Portfolio.
3.9. EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN CUSTODY
MANAGER.
The Board's delegation to the Custodian as Foreign Custody Manager of a
Portfolio shall be effective as of the date hereof and shall remain in effect
until terminated at any time, without penalty, by written notice from the
terminating party to the non-terminating party. Termination will become
effective thirty days after receipt by the non-terminating party of such notice.
The provisions of Section 3.3 hereof shall govern the delegation to and
termination of the Custodian as Foreign Custody Manager of the Fund with respect
to designated countries.
3.10. FUTURE NEGOTIATIONS.
If at any time prior to termination of this Amendment the Custodian as a matter
of standard business practice, accepts delegation as Foreign Custody Manager for
its U.S. mutual fund clients on terms materially different than set forth in
this Amendment, the Custodian hereby agrees to negotiate with the fund in good
faith with respect thereto.
4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS HELD
OUTSIDE THE UNITED STATES.
4.1 DEFINITIONS.
Terms used in this Article 4 and not defined below shall have the meanings
ascribed them in the Contract or in this Amendment:
"Foreign Securities System" means either a clearing agency or a securities
depository which is listed on Schedule A hereto or a Mandatory Securities
Depository.
<PAGE> 6
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
4.2. HOLDING SECURITIES.
The Custodian shall identify on its books as belonging to the Portfolios the
foreign securities held by each Foreign Sub-Custodian or Foreign Securities
System. The Custodian may hold foreign securities for all of its customers,
including the Portfolios, with any Foreign Sub-Custodian in an account that is
identified as belonging to the Custodian for the benefit of its customers,
provided however, that (i) the records of the Custodian with respect to foreign
securities of the Portfolios which are maintained in such account shall
identify those securities as belonging to the Portfolios and (ii), to the
extent permitted and customary in the market in which the account is
maintained, the Custodian shall require that securities so held by the Foreign
Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian
or of other customers of such Foreign Sub-Custodian.
4.3. FOREIGN SECURITIES SYSTEMS.
Foreign securities shall be maintained in a Foreign Securities System in a
designated country only through arrangements implemented by the Foreign
Sub-Custodian in such country pursuant to the terms of this Contract.
4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. DELIVERY OF FOREIGN ASSETS.
The Custodian or a Foreign Sub-Custodian shall release and deliver foreign
securities of a Portfolio held by such Foreign Sub-Custodian, or in a Foreign
Securities System account, only upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, and only in
the following cases:
(i) upon sale of such foreign securities for the Portfolio in
accordance with reasonable market practice in the country
where such Foreign Assets are held or traded, including,
without limitation: (A) delivery against expectation of
receiving later payment; or (B), in the case of a sale
effected through a Foreign Securities System, in accordance
with the rules governing the operation of the Foreign
Securities System;
(ii) in connection with any repurchase agreement related to foreign
securities;
(iii) to the depository agent in connection with tender or other
similar offers for foreign securities of the Portfolio;
(iv) to the issuer thereof or its agent when such foreign
securities are called, redeemed, retired or otherwise become
payable;
<PAGE> 7
(v) to the issuer thereof, or its agent, for transfer into the
name of the Custodian (or the name of the respective Foreign
Sub-Custodian or of any nominee of the Custodian (or such
Foreign Sub-Custodian)) or for exchange for a different number
of bonds, certificates or other evidence representing the same
aggregate face amount or number of units;
(vi) to brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with reasonable
market practices in the country where such securities are held
or traded; provided that in any such case the Sub-Custodian
shall have no responsibility or liability for any loss arising
from the delivery of such securities prior to receiving
payment for such securities except as may arise from the
Sub-Custodian's own negligence or willful misconduct;
(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
(viii) in the case of warrants, rights or similar foreign securities,
the surrender thereof in the exercise of such warrants, rights
or similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(ix) for delivery as security in connection with any borrowing by
the Fund requiring a pledge of assets by the Portfolio;
(x) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(xi) in connection with the lending of foreign securities; and
(xii) for any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions, a copy of a resolution
of the Board or of an Executive Committee of the Board so
authorized by the Board, signed by an officer of the Fund and
certified by its Secretary or an Assistant Secretary that the
resolution was duly adopted and is in full force and effect (a
"Certified Resolution"), specifying the Foreign Assets to be
delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of
such Foreign Assets shall be made.
4.4.2. PAYMENT OF PORTFOLIO MONIES.
Upon receipt of Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay out, or direct the
respective Foreign Sub-Custodian or the respective Foreign Securities System to
pay out, moneys of a Portfolio in the following cases only:
<PAGE> 8
(i) upon the purchase of foreign securities for the Portfolio,
unless otherwise directed by Proper Instructions, in
accordance with reasonable market settlement practice in the
country where such foreign securities are held or traded,
including, without limitation: (A) delivering money to the
seller thereof or to a dealer therefor (or an agent for such
seller or dealer) against expectation of receiving later
delivery of such foreign securities; or (B) in the case of
a purchase effected through a Foreign Securities System, in
accordance with the rules governing the operation of such
Foreign Securities System;
(ii) in connection with the conversion, exchange or surrender of
foreign securities of the Portfolio;
(iii) for the payment of any expense or liability of the Portfolio
including but not limited to the following payments: interest,
taxes, investment advisory fees, transfer agency fees, fees
under this Contract, legal fees, accounting fees, and other
operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign
exchange contracts for the Portfolio, including transactions
executed with or through the Custodian or its Foreign
Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vii) in connection with the borrowing or lending of foreign
securities; and
(viii) for any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a Certified Resolution
specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or
persons to whom such payment is to be made.
4.4.3. MARKET CONDITIONS; MARKET INFORMATION.
Notwithstanding any provision of this Contract to the contrary, settlement and
payment for Foreign Assets received for the account of a Portfolio and delivery
of Foreign Assets maintained for the account of a Portfolio may be effected in
accordance with the customary established securities trading or processing
practices and procedures in the country or market in which the transaction
occurs generally accepted by Institutional Clients, including, without
limitation, delivering Foreign Assets to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such Foreign Assets from such
purchaser or dealer. For purposes of this Contract, "Institutional Clients"
means U.S. registered investment companies or major U.S. based commercial banks,
insurance companies, pension funds or substantially similar institutions which,
as a part of their ordinary business operations, purchase or sell securities and
make use of global custody services.
<PAGE> 9
The Custodian shall provide to the Board the information with respect to custody
and settlement practices in countries in which the Custodian employs a Foreign
Sub-Custodian, including without limitation information relating to Foreign
Securities Systems, described on Schedule C hereto at the time or times set
forth on such Schedule. The Custodian may revise Schedule C from time to time,
provided that no such revision shall result in the Board being provided with
substantively less information than had been previously provided hereunder and,
provided further, that the Custodian shall in any event provide to the Board and
to A I M Advisors, Inc. annually the following information and opinions with
respect to the Board-approved countries listed on Schedule A:
(i) legal opinions relating to whether local law restricts with
respect to U.S. registered mutual funds (a) access of a fund's
independent public accountants to books and records of a
Foreign Sub-Custodian or Foreign Securities System, (b) a
fund's ability to recover in the event of bankruptcy or
insolvency of a Foreign Sub-Custodian or Foreign Securities
System, (c) a fund's ability to recover in the event of a loss
by a Foreign Sub-Custodian or Foreign Securities System, and
(d) the ability of a foreign investor to convert cash and cash
equivalents to U.S. dollars;
(ii) summary of information regarding Foreign Securities Systems;
and
(iii) country profile information containing market practice for (a)
delivery versus payment, (b) settlement method, (c) currency
restrictions, (d) buy-in practices, (e) foreign ownership
limits, and (f) unique market arrangements.
4.5. REGISTRATION OF FOREIGN SECURITIES.
The foreign securities maintained in the custody of a Foreign Custodian (other
than bearer securities) shall be registered in the name of the Fund (on behalf
of the applicable Portfolio) or in the name of the Custodian or in the name of
any Foreign Sub-Custodian or in the name of any nominee of the foregoing, and
the Fund agrees to hold any such nominee harmless from any liability as a holder
of record of such foreign securities, except to the extent that the Fund incurs
loss or damage due to failure of such nominee to meet its standard of care as
set forth in the Contract. The Custodian or a Foreign Sub-Custodian shall not be
obligated to accept securities on behalf of the Fund (on behalf of the
applicable Portfolio) under the terms of this Contract unless the form of such
securities and the manner in which they are delivered are in accordance with
reasonable market practice.
4.6. BANK ACCOUNTS.
The Custodian shall identify on its books as belonging to a Portfolio cash
(including cash denominated in foreign currencies) deposited with the Custodian.
Where the Custodian is unable to maintain, or market practice does not
facilitate the maintenance of, cash on the books of the Custodian, a bank
account or bank accounts opened and maintained outside
<PAGE> 10
the United States on behalf of a Portfolio with a Foreign Sub-Custodian shall be
subject only to draft or order by the Custodian or such Foreign Sub-Custodian,
acting pursuant to the terms of this Contract to hold cash received by or from
or for the account of the Portfolio.
4.7. COLLECTION OF INCOME.
The Custodian shall use reasonable commercial efforts to collect all dividends,
income and other payments with respect to the Foreign Assets held hereunder to
which a Portfolio shall be entitled and shall credit such income, as collected,
to the Portfolio. In the event the Custodian or a Foreign Sub-Custodian must use
measures beyond those which are customary in a particular country to collect
such payments, the Fund and the Custodian shall consult as to such measures and
as to the compensation and expenses of the Custodian attendant thereto.
4.8. SHAREHOLDER RIGHTS.
With respect to the foreign securities held under this Article 4, the Custodian
will use commercially reasonable efforts to facilitate the exercise by the Fund
on behalf of the Portfolios of voting and other shareholder rights, subject
always to the laws, regulations and practical constraints that may obtain in the
country where such securities are issued. The Fund acknowledges that local
conditions, including lack of regulation, onerous procedural obligations, lack
of notice and other factors may have the effect of severely limiting the ability
of the Fund to exercise shareholder rights.
4.9. COMMUNICATIONS RELATING TO FOREIGN SECURITIES.
The Custodian shall transmit promptly to the Fund written information
(including, without limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith) received by the
Custodian via the Foreign Sub-Custodians from issuers of the foreign securities
being held for the account of a Portfolio. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund written information so
received by the Custodian from issuers of the foreign securities whose tender or
exchange is sought or from the party (or its agents) making the tender or
exchange offer. Subject to the standard of care to which the Custodian is held
under this Contract, the Custodian shall not be liable for any untimely exercise
of any tender, exchange or other right or power in connection with foreign
securities or other property of the Portfolio at any time held by it unless (i)
the Custodian or the respective Foreign Sub-Custodian is in actual possession of
such foreign securities or property and (ii) the Custodian receives Proper
Instructions with regard to the exercise of any such right or power, and both
(i) and (ii) occur at least two New York business days prior to the date on
which the Custodian is to take action to exercise such right or power.
4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS AND FOREIGN SECURITIES SYSTEMS.
Each agreement pursuant to which the Custodian employs a Foreign Sub-Custodian
shall, to the extent possible consistent with prevailing market practice,
require the Foreign Sub-Custodian to exercise reasonable care in the performance
of its duties and to indemnify, and hold harmless, the Custodian from and
against any loss, damage, cost, expense,
<PAGE> 11
liability or claim arising out of or in connection with such Foreign
Sub-Custodian's performance of such obligations. At the election of the Fund,
the Fund shall be entitled to be subrogated to the rights of the Custodian with
respect to any claims against a Foreign Sub-Custodian as a consequence of any
such loss, damage, cost, expense, liability or claim if and to the extent that
the Fund and any applicable Portfolio has not been made whole for any such loss,
damage, cost, expense, liability or claim.
4.11. TAX LAW.
The Custodian shall have no responsibility or liability for any obligations now
or hereafter imposed on the Fund or the Custodian as custodian of the Portfolios
by the tax law of the United States or of any state or political subdivision
thereof. With respect to jurisdictions other than the United States, the sole
responsibility of the Custodian with regard to the tax law of any such
jurisdiction shall be to use reasonable efforts to (a) notify the Fund of the
obligations imposed on the Fund with respect to the Portfolios or the Custodian
as custodian of such Portfolios by the tax law of such jurisdictions, including
responsibility for withholding and other taxes, assessment or other governmental
charges, certifications and government reporting and (b) perform such
ministerial steps as are required to collect any tax refund, to ascertain the
appropriate rate of tax withholding and to provide such documents as may be
required to enable each Fund to receive appropriate tax treatment under
applicable tax laws and any applicable treaty provisions. The Custodian, in
performance of its duties under this Section, shall be entitled to treat each
Fund as a Delaware business trust which is a "registered investment company"
under the laws of the United States, and it shall be the duty of each Fund to
inform the Custodian of any change in the organization, domicile or, to the
extent within the knowledge of the Fund, other relevant facts concerning tax
treatment of the Fund and further to inform the Custodian if the Fund is or
becomes the beneficiary of any special ruling or treatment not applicable to the
general nationality and category of entity of which the Fund is a part under
general laws and treaty provisions. The Custodian shall be entitled to rely on
any information supplied by the Fund. The Custodian may engage reasonable
professional advisors disclosed to the Fund by the Custodian, which may include
attorneys, accountants or financial institutions in the regular business of
investment administration and may rely upon advice received therefrom.
4.12. LIABILITY OF CUSTODIAN.
Except as may arise from the Custodian's own negligence or willful misconduct
or the negligence or willful misconduct of a Sub-Custodian, the Custodian shall
be without liability to the Fund for any loss, liability, claim or expense
resulting from or caused by Country Risk (as such term is defined in Article 3
hereof), regardless of whether assets are maintained in the custody of a Foreign
Sub-Custodian or a Foreign Securities Depository, the Custodian shall be without
liability for any loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism, or any other similar loss beyond the reasonable control of the
Custodian or the Sub-Custodian.
The Custodian shall be liable to the fund on account of any actions or omissions
of any Foreign Sub-Custodian to the same extent as such Foreign Sub-Custodian
shall be liable to the Custodian.
<PAGE> 12
4.13. USE OF TERM "FUND"; ASSETS AND LIABILITIES
All references in this Article 4 or in Article 3 of this Agreement to "Fund"
shall mean the Fund, or a Portfolio of the Fund, as the context requires or as
applicable.
The Custodian shall maintain separate and distinct records for each Portfolio
and the assets allocated solely with such Portfolio shall be held and accounted
for separately from the assets of the Fund associated solely with any other
Portfolio. The debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular Portfolio shall be
enforceable against the assets of such Portfolio only, and not against the
assets of the Fund generally or the assets of any other Portfolio.
III. Except as specifically superseded or modified herein, the terms and
provisions of the Contract shall continue to apply with full force and effect.
In the event of any conflict between the terms of the Contract prior to this
Amendment and this Amendment, the terms of this Amendment shall prevail. If the
Custodian is delegated the responsibilities of Foreign Custody Manager pursuant
to the terms of Article 3 hereof, in the event of any conflict between the
provisions of Articles 3 and 4 hereof, the provisions of Article 3 shall
prevail.
<PAGE> 13
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed in its name and behalf by its duly authorized representative as of the
date first above written.
WITNESSED BY: STATE STREET BANK AND TRUST
COMPANY
/s/ MARC L. PARSONS By: /s/ RONALD E. LOGUE
- -------------------------- -------------------------------
Marc L. Parsons Name: Ronald E. Logue
Associate Counsel Title: Executive Vice President
WITNESSED BY: AIM FUNDS GROUP
/s/ MICHELLE GRUE By: /s/ JOAN J. ARTHUR
- -------------------------- -------------------------------
Name: Michelle Grue Name: Joan J. Arthur
Title: Assistant Secretary Title: SVP
<PAGE> 14
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria Erste Bank der Oesterreichischen --
Sparkassen AG
Bahrain British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Generale de Banque --
Bermuda The Bank of Bermuda Limited --
Bolivia Banco Boliviano Americano S.A. --
Botswana Barclays Bank of Botswana Limited --
Brazil Citibank, N.A. --
Bulgaria ING Bank N.V. --
Canada Canada Trustco Mortgage Company --
Chile Citibank, N.A. --
People's Republic The Hongkong and Shanghai --
of China Banking Corporation Limited,
Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. --
Sociedad Fiduciaria
</TABLE>
8/13/98 1
<PAGE> 15
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Croatia Privredna Banka Zagreb d.d --
Cyprus Barclays Bank Plc. --
Cyprus Offshore Banking Unit
Czech Republic Ceskoslovenska Obchodni --
Banka, A.S.
Denmark Den Danske Bank --
Ecuador Citibank, N.A. --
Egypt National Bank of Egypt --
Estonia Hansabank --
Finland Merita Bank Limited --
France Banque Paribas --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited --
Greece National Bank of Greece S.A. The Bank of Greece,
System for Monitoring Transactions in
Securities in Book-Entry Form
Hong Kong Standard Chartered Bank --
Hungary Citibank Budapest Rt. --
Iceland Icebank Ltd. --
</TABLE>
8/13/98 2
<PAGE> 16
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
India Deutsche Bank AG --
The Hongkong and Shanghai --
Banking Corporation Limited
Indonesia Standard Chartered Bank --
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
Italy Banque Paribas --
Ivory Coast Societe Generale de Banques --
en Cote d'Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant --
Bank Ltd.
Japan The Daiwa Bank, Limited Japan Securities Depository
Center
The Fuji Bank, Limited
Jordan British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited --
Republic of Korea The Hongkong and Shanghai Banking --
Corporation Limited
Latvia JSC Hansabank-Latvija --
Lebanon British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
</TABLE>
8/13/98 3
<PAGE> 17
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Lithuania Vilniaus Bankas AB --
Malaysia Standard Chartered Bank --
Malaysia Berhad
Mauritius The Hongkong and Shanghai --
Banking Corporation Limited
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South Africa --
The Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group --
(New Zealand) Limited
Norway Christiania Bank og --
Kreditkasse
Oman British Bank of the Middle East --
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG --
Peru Citibank, N.A. --
Philippines Standard Chartered Bank --
Poland Citibank (Poland) S.A. --
Bank Polska Kasa Opieki S.A.
Portugal Banco Comercial Portugues --
</TABLE>
8/13/98 4
<PAGE> 18
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Romania ING Bank N.V. --
Russia Credit Suisse First Boston AO, Moscow --
(as delegate of Credit Suisse
First Boston, Zurich)
Singapore The Development Bank --
of Singapore Limited
Slovak Republic Ceskoslovenska Obchodna --
Banka, A.S.
Slovenia Banka Creditanstalt d.d. --
South Africa Standard Bank of South Africa Limited --
Spain Banco Santander, S.A. --
Sri Lanka The Hongkong and Shanghai --
Banking Corporation Limited
Swaziland Standard Bank Swaziland Limited --
Sweden Skandinaviska Enskilda Banken --
Switzerland UBS AG --
Taiwan - R.O.C. Central Trust of China --
Thailand Standard Chartered Bank --
Trinidad & Tobago Republic Bank Limited --
Tunisia Banque Internationale Arabe de Tunisie --
</TABLE>
8/13/98 5
<PAGE> 19
STATE STREET SCHEDULE A
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Turkey Citibank N.A. --
Ottoman Bank
Ukraine ING Bank, Ukraine --
United Kingdom State Street Bank and Trust Company, --
London Branch
Uruguay Citibank, N.A. --
Venezuela Citibank, N.A. --
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe Limited --
</TABLE>
Euroclear (The Euroclear System)/State Street London Limited
Cedel, S.A. (Cedel Bank, societe anonyme)/State Street London Limited
INTERSETTLE (for EASDAQ Securities)
8/13/98
6
<PAGE> 20
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Reserve Bank Information
and Transfer System
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium Caisse Interprofessionnelle de Depot et
de Virement de Titres S.A.
Banque Nationale de Belgique
Brazil Companhia Brasileira de Liquidacao e
Custodia (CBLC)
Bolsa de Valores de Rio de Janeiro
All SSB clients presently use CBLC
Central de Custodia e de Liquidacao Financeira,
de Titulos
Banco Central do Brasil,
Sistema Especial de Liquidacao de
Custodia
Bulgaria Central Depository AD
Bulgarian National Bank
Canada The Canadian Depository
for Securities Limited
People's Republic Shanghai Securities Central Clearing and
of China Registration Corporation
Shenzhen Securities Central Clearing
Co., Ltd.
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 1
<PAGE> 21
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Croatia Ministry of Finance
National Bank of Croatia
Czech Republic Stredisko cennych papirti
Czech National Bank
Denmark Vaerdipapircentralen (the Danish
Securities Center)
Egypt Misr Company for Clearing, Settlement,
and Central Depository
Estonia Eesti Vaartpaberite Keskdepositoorium
Finland The Finnish Central Securities
Depository
France Societe Interprofessionnelle
pour la Compensation des
Valeurs Mobilieres (SICOVAM)
Germany Deutsche Borse Clearing AG
Greece The Central Securities Depository
(Apothetirion Titlon AE)
Hong Kong The Central Clearing and
Settlement System
Central Money Markets Unit
Hungary The Central Depository and Clearing
House (Budapest) Ltd. (KELER)
[Mandatory for Gov't Bonds only;
SSB does not use for other securities]
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 2
<PAGE> 22
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
India The National Securities Depository Limited
Indonesia Bank Indonesia
Ireland Central Bank of Ireland
Securities Settlement Office
Israel The Tel Aviv Stock Exchange Clearing
House Ltd.
Bank of Israel
Italy Monte Titoli S.p.A.
Banca d'Italia
Jamaica The Jamaican Central Securities Depository
Japan Bank of Japan Net System
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository Corporation
Latvia The Latvian Central Depository
Lebanon The Custodian and Clearing Center of
Financial Instruments for Lebanon
and the Middle East (MIDCLEAR) S.A.L.
The Central Bank of Lebanon
Lithuania The Central Securities Depository of Lithuania
Malaysia The Malaysian Central Depository Sdn. Bhd.
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 3
<PAGE> 23
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Bank Negara Malaysia,
Scripless Securities Trading and Safekeeping
System
Mauritius The Central Depository & Settlement
Co. Ltd.
Mexico S.D. INDEVAL, S.A. de C.V.
(Instituto para el Deposito de
Valores)
Morocco Maroclear
(pending publication of enabling legislation
in the Moroccan government Gazette)
The Netherlands Nederlands Centraal Instituut voor
Giraal Effectenverkeer B.V. (NECIGEF)
De Nederlandsche Bank N.V.
New Zealand New Zealand Central Securities
Depository Limited
Norway Verdipapirsentralen (the Norwegian
Registry of Securities)
Oman Muscat Securities Market
Pakistan Central Depository Company of Pakistan Limited
Peru Caja de Valores y Liquidaciones S.A.
(CAVALI)
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 4
<PAGE> 24
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Philippines The Philippines Central Depository. Inc.
The Registry of Scripless Securities
(ROSS) of the Bureau of the Treasury
Poland The National Depository of Securities
(Krajowy Depozyt Papierow Wartosciowych)
Central Treasury Bills Registrar
Portugal Central de Valores Mobiliarios (Central)
Romania National Securities Clearing, Settlement and
Depository Co.
Bucharest Stock Exchange Registry Division
Singapore The Central Depository (Pte)
Limited
Monetary Authority of Singapore
Slovak Republic Stredisko Cennych Papierov
National Bank of Slovakia
Slovenia Klirinsko Depotna Druzba d.d.
South Africa The Central Depository Limited
Spain Servicio de Compensacion y
Liquidacion de Valores, S.A.
Banco de Espana
Central de Anotaciones en Cuenta
Sri Larika Central Depository System
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 5
<PAGE> 25
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
(Pvt) Limited
Sweden Vardepapperscentralen AB
(the Swedish Central Securities Depository)
Switzerland Schweizerische Effekten - Giro AG
INTERSETTLE
Taiwan - R.O.C. The Taiwan Securities Central
Depository Co., Ltd.
Thailand Thailand Securities Depository
Company Limited
Tunisia Societe Tunisienne Interprofessionelle de
Compensation et de Depot de
Valeurs Mobilieres
Central Bank of Tunisia
Tunisian Treasury
Turkey Takas ve Saklama Bankasi A.S.
(TAKASBANK)
Central Bank of Turkey
Ukraine The National Bank of Ukraine
United Kingdom The Bank of England,
The Central Gilts Office and
The Central Moneymarkets Office
Uruguay Central Bank of Uruguay
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 6
<PAGE> 26
STATE STREET SCHEDULE B
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Venezuela Central Bank of Venezuela
Zambia Lusaka Central Depository Limited
Bank of Zambia
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
8/13/98 7
<PAGE> 27
SCHEDULE C
MARKET INFORMATION
<TABLE>
<CAPTION>
PUBLICATION/TYPE OF INFORMATION BRIEF DESCRIPTION
- ------------------------------- -----------------
(FREQUENCY)
<S> <C>
The Guide to Custody in World Markets An overview of safekeeping and settlement practices and
(annually) procedures in each market in which State Street Bank and
Trust Company offers custodial services.
Global Custody Network Review Information relating to the operating history and structure of
(annually) depositories and subcustodians located in the markets in
which State Street Bank and Trust Company offers custodial
services, including transnational depositories.
Global Legal Survey With respect to each market in which State Street Bank and
(annually) Trust Company offers custodial services, opinions relating to
whether local law restricts (i) access of a fund's independent
public accountants to books and records of a Foreign Sub-Custodian
or Foreign Securities System, (ii) the Fund's ability to recover in
the event of bankruptcy or insolvency of a Foreign Sub-Custodian
or Foreign Securities System, (iii) the Fund's ability to recover in
the event of a loss by a Foreign Sub-Custodian or Foreign Securities
System, and (iv) the ability of a foreign investor to convert cash
and cash equivalents to U.S. dollars.
Subcustodian Agreements Copies of the subcustodian contracts State Street Bank and
(annually) Trust Company has entered into with each subcustodian in the
markets in which State Street Bank and Trust Company offers
subcustody services to its US mutual fund clients.
Network Bulletins (weekly): Developments of interest to investors in the markets in which
State Street Bank and Trust Company offers custodial
services.
Foreign Custody Advisories (as
necessary): With respect to markets in which State Street Bank and Trust
Company offers custodial services which exhibit special custody
risks, developments which may impact State Street's ability to
deliver expected levels of service.
</TABLE>
<PAGE> 1
EXHIBIT g(3)(b)
THE BANK OF NEW YORK
NEW YORK'S FIRST BANK-FOUNDED 1784 BY ALEXANDER HAMILTON
90 WASHINGTON STREET, NEW YORK, N. Y. 10286
July 30, 1996
Mr. Robert H. Graham
President
AIM Funds Group - AIM Municipal Bond Fund
AIM Investment Securities Funds
AIM Tax-Exempt Funds, Inc.
Short-Term Investments Co.
Short-Term Investments Trust
Tax-Free Investments Co.
11 Greenway Plaza, Suite 1919
Houston, Texas 77046
Dear Mr. Graham
Upon reviewing the existing Terminal Link Amendment dated May 17, 1993, we have
noted that originally the process called for The Bank of New York receiving data
transmissions directly from AIM, and not via a third party. Now that DST is
involved and will be acting as an intermediary there is a need to modify the
Terminal Link Amendment.
It is our understanding that the new methodology for receiving data
transmissions from DST via NDM software line utilizes NDM's
Secure-Point-of-Entry security. This process calls for the issuance of a
Security ID by DST for AIM's sole use. This security ID along with DST's
specific NDM node name will identify each transmission sent to the Bank.
Internally, the Bank has pre-set an associated security ID that will allow the
data transmission to be processed according to the method pre-selected for the
AIM Funds. Both the AIM Security ID and the DST name node must match to what the
Bank expects to receive before the file is accepted and processed.
In light of how far along all parties are in this project, and in order to not
detain its implementation due to legal considerations, we ask that you please
acknowledge receipt of this letter as confirmation of AIM's understanding of the
process until such time as the new Terminal Link Amendment is drafted.
We would like to thank you and your staff for your time and cooperation
throughout this project.
<PAGE> 2
THE BANK OF NEW YORK
Mr. Robert Graham
July 30, 1996
Page 2
It is understood that this Amendment applies to the Custodian Agreements between
The Bank of New York and the entities listed below:
AIM Funds Group - AIM Municipal Bond Fund (Date of Agreement: October 19,
1995)
AIM Investment Securities Funds (Date of Agreement: June 16, 1987)
AIM Tax-Exempt Funds, Inc. (Date of Agreement: October 19, 1995)
Short-Term Investments Co. (Date of Agreement: June 16, 1987)
Short-Term Investments Trust (Date of Agreement: June 16, 1987)
Tax-Free Investments Co. (Date of Agreement: October 19, 1995)
Sincerely,
/s/ MAYRA ADONNINO
Mayra Adonnino
Vice President
Relationship Management
Acknowledged by:
/s/ ROBERT H. GRAHAM
- -----------------------------------
Robert H. Graham
Date: July 30, 1996
MA/df
cc: M. Yamaguchi
P. Holland
S. Grunston
<PAGE> 1
EXHIBIT h(3)(e)
AMENDMENT NUMBER 4 TO THE REMOTE
ACCESS AND RELATED SERVICES AGREEMENT
THIS AMENDMENT, dated as of June 30, 1998 is made to the Remote Access
and Related Services Agreement dated December 23, 1994, as amended (the
"Agreement") between each registered investment company listed on Exhibit 1 of
the Agreement (the "Fund") and First Data Investor Services Group, Inc,
("FDISG").
WITNESSETH
WHEREAS, the Fund and FDISG desire to further amend the Agreement to
reflect certain changes thereto.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree that as of the date first referenced above, the
Agreement shall be amended as follows:
1. Section 14(a) of the Agreement (as amended by Amendment Number 3) is
hereby deleted in its entirety and replaced with the following new Section
14(a):
"(a) This Agreement which became effective as of December 23, 1994 is
hereby extended and shall continue through December 31, 2002 (the
"Initial Term"). Upon the expiration of the Initial Term, this
Agreement shall automatically renew for successive terms of one
(1) year ("Renewal Terms") each, unless the Fund or FDISG
provides written notice to the other of its intent not to renew.
Such notice must be received not less than one-hundred and eighty
(180) days prior to the expiration of the Initial Term or the
then current Renewal Term."
2. Effective January 1, 1999, Section I "Shareholder Account Fees" of
Schedule C "Fee Schedule" (as amended by Amendment Number 3) is amended by
deleting Section I in its entirety and adding the following new Section I:
"I. SHAREHOLDER ACCOUNT FEES. The Fund shall pay the following
fees:
For the period beginning on January 1, 1999, and continuing through
December 31, 2002, the Fund shall pay FDISG an annualized fee for
shareholder accounts open during any monthly period ("Open Account
Fee") as follows:
<TABLE>
<CAPTION>
Account Volume Fee per shareholder account
-------------- ---------------------------
<S> <C> <C>
1-1.5 million $3.50
1.5-3 million $2.40
3-4 million $2.00
4-5 million $1.90
Exceeding 5 million $1.80
</TABLE>
<PAGE> 2
The Fund also shall pay FDISG Group an annualized fee of $1.60 per
shareholder account that is closed during any monthly period (Closed
Account Fee")(The Open Account Fees and Closed Account Fees hereafter
collectively referred to as "Shareholder Account Fees"). The
Shareholder Account Fees shall be billed by FDISG monthly in arrears on
a prorated basis of 1/12 of the annualized fee, for all such accounts.
In addition, on January 1 of the years 2001 and 2002 the Shareholder
Account fees may be increased by FDISG in an amount equal to the lesser
of (i) the cumulative percentage increase in the Consumer Price Index
for all Urban Consumers (CPI-U) U.S. City Average, All Items
(unadjusted = (1982-84 + 100). published by the U.S. Department of
Labor, or (ii) seven percent (7%) of the Shareholder Account Fees
charged by FDISG to the Fund for the preceding twelve (12) month
period.
In return for the Shareholder Account Fees, FDISG agrees to provide the
following to the Fund:
o Remote Access to FDISG's FSR System
o License for 512 IMPRESS Plus seats. Includes six weeks of
technical training (Completed)
o Conversion of the GT Global Funds into the AIM Family of Funds.
Conversion estimated at 4500 hours of systems development
o License for up to 15 copies of FDISG's ACE+ (Automate Control
Environment) software as further defined in Schedule H
o Dedicated Programming Support equivalent to 1 Systems Manager, 4
Programmers, and 2 Business Systems Analysts
o Separate FSR processing cycle
o Implementation of a Separate FSR processing cycle by September
15, 1997, as more fully described in the attached Exhibit 3 of
this Schedule C (Completed)
o Implementation of the core TA system functionality identified in
Exhibit 1 of this Schedule C (Completed)
o Implementation of IWT Release 5.x functionality as identified in
Exhibit 2 of this Schedule C (Completed)
o Continued use of FDISG's Price/Rate Transmission (PRAT)
application. The PRAT Application will accept prices and dividend
rates from the Fund Accounting Department of the Fund
electronically and post them to the FDISG Pricing System. The
PRAT application will run interconnected via Local Area Network
hardware and software."
The Agreement, as previously amended and as amended by this Amendment,
("Modified Agreement") constitutes the entire agreement between the parties with
respect to the subject matter hereof. The Modified Agreement supersedes all
prior and contemporaneous agreements between the parties in connection with the
subject matter hereof. No officer, employee, servant
<PAGE> 3
or other agent of either party is authorized to make any representation,
warranty, or other promises not expressly contained herein with respect to the
subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first above
written.
On behalf of the Funds and respective Portfolios and Classes set forth in
Exhibit 1 of the Agreement, as amended and as may be amended in the future from
time to time.
By: /s/ [ILLEGIBLE]
--------------------------------------
Title: AIM Fund Services, Inc.
-----------------------------------
FIRST DATA INVESTOR SERVICES GROUP, INC
By: /s/ [ILLEGIBLE]
--------------------------------------
Title: Executive VP
-----------------------------------
<PAGE> 1
EXHIBIT h(3)(f)
AMENDMENT NUMBER 5 TO THE REMOTE
ACCESS AND RELATED SERVICES AGREEMENT
THIS AMENDMENT, dated as of July 1, 1998 is made to the Remote Access
and Related Services Agreement dated December 23, 1994, as amended (the
"Agreement") between each registered investment company listed on Exhibit 1 of
the Agreement (the "Fund") and First Data Investor Services Group, Inc.
("FDISG").
WITNESSETH
WHEREAS, the Fund and FDISG desire to further amend the Agreement to
reflect certain changes thereto.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree that as of the date first referenced above, the
Agreement shall be amended as follows:
1. Exhibit 1 of the Agreement is hereby deleted and replaced with the
Attached revised Exhibit 1.
2. Section III "Additional Fees" of Schedule C "Fee Schedule" is hereby
amended to add the following new subsection h:
"h. Fees for IMPRESS Plus COLD:
(i) IMPRESS Plus COLD Software License Fees - The Fund shall pay an
initial license fee of $302,469 (the "License Fee) based on 512
IMPRESS Plus COLD seats licensed, which includes the use of the
INSCI Software. The initial License Fee shall be financed over a
period of 36 months and be payable monthly in arrears in amounts of
$8,401.66. Thereafter, the then current monthly License Fee
payments shall continue so long as the Fund continues to license
and use the IMPRESS Plus COLD Software. License Fee payments shall
commence on the earlier of a) first production usage of IMPRESS
Plus COLD software or b) September 1, 1998.
(ii) IMPRESS Plus Software Usage Fees. In addition to the License
Fee set forth above, the Fund shall pay a monthly usage fee of
$9,728.00 (the "Usage Fee") based on 512 IMPRESS Plus COLD seats
licensed, which includes the use of the INSCI Software. The Usage
Fee shall commence on the earlier of a) first production usage of
IMPRESS Plus COLD software or b) September 1, 1998.
(iii) IMPRESS Plus COLD Installation Fees. - Thirty (30) days
following the execution of Amendment Number 4 to the Agreement and
receipt of an invoice, the Fund shall pay to FDISG one-time
installation fee of $140,000. Installation
<PAGE> 2
covers 3 line data application and 1 Intelligent Data Stream
application. Installation activities include:
o Hardware installation at FDISG site
o IMPRESS Plus COLD application installation
o IMPRESS Plus COLD third party software installation
o Network Design Assistance
o Project Management
o Post Installation Support
(iv) Additional IMPRESS Plus COLD Fees:
o One-time fee for each additional Line Data Application - $10,000
o One-time fee for each additional Intelligent Data Stream
Application - $20,000
o Application Enhancements - $150/hr
(v) Maintenance and Support for IMPRESS Plus COLD includes items
listed in Section III.b above and the following:
o Report conversion to Express Delivery/IMPRESS Plus COLD
o Hardware support and maintenance
(v) IMPRESS Plus COLD License and Usage and IMPRESS Plus COLD
Installation Fees do not include the following:
o Hardware
o Network and Server Software not listed in Exhibit 1 of
Schedule G
o Customization or application integration
o Support for IMPRESS Plus COLD applications customized or built
by the Fund (see Section 3 of Exhibit 3 of Schedule G)
o Installation, Integration and On-going Support of hardware,
network, and software components not included in Schedule G
o Travel Expenses for install and support staff for on-site
visits (billed separately per Schedule D)
o Application Source Code
(vi) IMPRESS Plus COLD Hardware and Network Fees:
<TABLE>
<CAPTION>
One-time* Monthly Support Fee*
--------- --------------------
(Due Upon Execution)
<S> <C> <C>
Hardware $308,729.52 $3276.27
</TABLE>
* Fee is subject to change based on actual vendor costs"
<PAGE> 3
3. Section 1.3 of Schedule G is amended by adding the following:
"Notwithstanding the foregoing provisions of this Section 1.3 to the
contrary, FDISG shall install and maintain the equipment associated
with FDISG's IMPRESS Plus COLD product set forth in Exhibit 2.3 of this
Schedule G at its facility for the fees set forth in Section III.h. of
Schedule C. At the expense of the Fund, upon termination of the
Agreement or at the request of the Funds FDISG shall deliver to the
Fund such equipment."
4. Exhibit 1 of Schedule G is hereby amended as follows:
(a) Section 1.1 is amended by adding "IMPRESS Plus COLD Release 6.0" to
the list of IMPRESS Plus software products.
(b) Section 2.1 "FDISG Provided Third Party Software" is amended by
adding the following new section 2.1.3:
"2.1.3 INSCI Software. The following Third Party Software is
licensed directly to the Fund by FDISG subject to the terms and
conditions set forth in this Agreement:
Advanced COINSERV Software w/Hierarchical Storage Mgr.
WINCOINS Software
Vector Forms Software
Jukebox Driver Software, Two, 12" Drives
Metacode Server License
CDP Metacode Viewer, 300 Concurrent Users
Metacode Desktop & Converter
Operating Kit (Includes Dial-In for Trouble Shooting)"
5. Exhibit 1.1 of Schedule G "Specifications" is hereby amended to add the
IMPRESS Plus COLD Specifications attached hereto as Exhibit 1.1a of Schedule G.
The Agreement, as previously amended and as amended by this Amendment,
("Modified Agreement") constitutes the entire agreement between the parties with
respect to the subject matter hereof. The Modified Agreement supersedes all
prior and contemporaneous agreements between the parties in connection with the
subject matter hereof. No officer, employee, servant or other agent of either
party is authorized to make any representation, warranty, or other promises not
expressly contained herein with respect to the subject matter hereof.
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their duly authorized officers, as of the day and year first
above written.
On behalf of the Funds and respective Portfolios and Classes set forth in
Exhibit 1 attached hereto as may be amended from time to time.
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: Senior Vice President
--------------------------------
FMT DATA INVESTOR SERVICES GROUP, INC.
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: Executive VP
--------------------------------
<PAGE> 5
EXHIBIT 1
List of Funds
<TABLE>
<CAPTION>
Fund# Fund Name
<S> <C>
1 AIM WEINGARTEN FUND - CLASS A
2 AIM CONSTELLATION FUND - CLASS A
6 AIM BALANCED FUND - CLASS A
7 AIM LIMITED MATURITY TREASURY FUND - CL
8 AIM TAX-FREE INTERMEDIATE SHARES
10 AIM CHARTER FUND - CLASS A
16 AIM INTERNATIONAL EQUITY FUND - CLASS A
17 AIM HIGH INCOME MUNICIPAL FUND - CLASS
30 AIM EUROPEAN DEVELOPMENT FUND - CLASS A
31 AIM ASIAN GROWTH FUND - CLASS A
34 AIM SMALL CAP OPPORTUNITIES FUND - CLASS
81 AIM GLOBAL AGGRESSIVE GROWTH FUND - CLASS
82 AIM GLOBAL GROWTH FUND - CLASS A
83 AIM GLOBAL INCOME FUND - CLASS A
301 AIM WEINGARTEN FUND - CLASS C
302 AIM CONSTELLATION FUND - CLASS C
303 AIM MUNICIPAL BOND FUND - CLASS C
305 AIM VALUE FUND - CLASS C
306 AIM BALANCED FUND - CLASS C
308 AIM GLOBAL UTILITIES FUND - CLASS C
310 AIM CHARTER FUND - CLASS C
314 AIM CAPITAL DEVELOPMENT FUND - CLASS C
315 AIM BLUE CHIP FUND - CLASS C
316 AIM INTERNATIONAL EQUITY FUND - CLASS C
317 AIM HIGH INCOME MUNICIPAL FUND - CLASS
320 AIM ADVISOR LARGE CAP VALUE FUND - CLASS
321 AIM ADVISOR INCOME FUND - CLASS C
322 AIM ADVISOR FLEX FUND - CLASS C
323 AIM ADVISOR CASH MANAGEMENT FUND - CLASS
324 AIM ADVISOR MULTIFLEX FUND - CLASS C
325 AIM ADVISOR REAL ESTATE FUND - CLASS C
326 AIM ADVISOR INTERNATIONAL VALUE FUND -
330 AIM EUROPEAN DEVELOPMENT FUND - CLASS C
331 AIM ASIAN GROWTH FUND - CLASS C
350 AIM SELECT GROWTH FUND - CLASS C
360 AIM INTERMEDIATE GOVERNMENT FUND - CLASS
365 AIM INCOME FUND - CLASS C
375 AIM HIGH YIELD FUND - CLASS C
380 AIM MONEY MARKET FUND - CLASS C
381 AIM GLOBAL AGGRESSIVE GROWTH FUND - CLASS
382 AIM GLOBAL GROWTH FUND - CLASS C
383 AIM GLOBAL INCOME FUND - CLASS C
384 AIM NEW DIMENSION FUND - CLASS C
401 AIM MONEY MARKET FUND - CLASS A
402 AIM INCOME FUND - CLASS A
403 AIM MUNICIPAL BOND FUND - CLASS A
404 AIM INTERMEDIATE GOVERNMENT FUND - CLASS
405 AIM VALUE FUND - CLASS A
</TABLE>
Page 1
<PAGE> 6
EXHIBIT 1
List of Funds
<TABLE>
<S> <C>
406 AIM SELECT GROWTH FUND - CLASS A
407 AIM AGGRESSIVE GROWTH FUND - CLASS A
408 AIM GLOBAL UTILITIES FUND - CLASS A
421 AIM CASH RESERVE SHARES
422 AIM TAX-EXEMPT CASH FUND
425 AIM HIGH YIELD FUND - CLASS A
430 CG GUARANTEED ACCT 71-73
431 CG GUARANTEED ACCT 74-77
432 CG GUARANTEED ACCT 1978
433 CG GUARANTEED ACCT 1979
434 CG GUARANTEED ACCT 1980
435 CG GUARANTEED ACCT 1981
436 CG GUARANTEED ACCT 1982
437 CG GUARANTEED ACCT 1983
438 CG GUARANTEED ACCT 1984
439 CG GUARANTEED ACCT 1985
440 CG GUARANTEED ACCT 1985A
441 CG GUARANTEED ACCT 1985B
442 CG GUARANTEED ACCT 1986
443 CG GUARANTEED ACCT 1986A
444 CG GUARANTEED ACCT 1987
445 CG GUARANTEED ACCT 1988
446 CG GUARANTEED ACCT 1989
447 CG GUARANTEED ACCT 1990
448 CG GUARANTEED ACCT 1991
449 CG GUARANTEED ACCT 1992
460 AIM TAX-EXEMPT BOND FUND OF CONNECTICUT
514 AIM CAPITAL DEVELOPMENT FUND - CLASS A
515 AIM BLUE CHIP FUND - CLASS A
520 AIM ADVISOR LARGE CAP VALUE FUND - CLASS
521 AIM ADVISOR INCOME FUND - CLASS A
522 AIM ADVISOR FLEX FUND - CLASS A
523 AIM ADVISOR CASH MANAGEMENT FUND - CLASS
524 AIM ADVISOR MULTIFLEX FUND - CLASS A
525 AIM ADVISOR REAL ESTATE FUND - CLASS A
526 AIM ADVISOR INTERNATIONAL VALUE FUND -
541 AIM DOLLAR FUND CLASS A
542 AIM NEW PACIFIC GROWTH FUND CLASS A
543 AIM EUROPE GROWTH FUND CLASS A
544 AIM JAPAN GROWTH FUND CLASS A
546 AIM MID CAP GROWTH FUND CLASS A
547 AIM WORLDWIDE GROWTH FUND CLASS A
548 AIM STRATEGIC INCOME FUND CLASS A
549 AIM GLOBAL GOVERNMENT INCOME FUND CLASS
551 AIM GLOBAL HEALTH CARE FUND CLASS A
553 AIM LATIN AMERICAN GROWTH FUND CLASS A
556 AIM EMERGING MARKETS FUND CLASS A
557 AIM FINANCIAL SERVICES FUND CLASS A
558 AIM GLOBAL HIGH INCOME - CLASS A
</TABLE>
Page 2
<PAGE> 7
EXHIBIT 1
List of Funds
<TABLE>
<S> <C>
559 AIM GLOBAL INFRASTRUCTURE - CLASS A
561 AIM GLOBAL RESOURCES - CLASS A
562 AIM GLOBAL CONSUMER PRODUCTS & SERVICES
563 AIM AMERICA VALUE FUND - CLASS A
564 AIM SMALL CAP EQUITY FUND - CLASS A
576 AIM DEVELOPING MARKETS FUND - CLASS A
577 AIM INTERNATIONAL GROWTH FUND - CLASS A
578 AIM GLOBAL GROWTH AND INCOME FUND - CLASS
579 AIM GLOBAL TELECOMMUNICATIONS FUND - CLASS
584 AIM NEW DEVELOPING MARKETS FUND - CLASS
602 AIM CONSTELLATION FUND - CLASS B
614 AIM CAPITAL DEVELOPMENT FUND - CLASS B
615 AIM BLUE CHIP FUND - CLASS B
617 AIM HIGH INCOME MUNICIPAL FUND - CLASS
620 AIM ADVISOR LARGE CAP VALUE FUND - CLASS
622 AIM ADVISOR FLEX FUND - CLASS B
624 AIM ADVISOR MULTIFLEX FUND - CLASS B
625 AIM ADVISOR REAL ESTATE FUND - CLASS B
626 AIM ADVISOR INTERNATIONAL VALUE FUND - CLASS
630 AIM EUROPEAN DEVELOPMENT FUND - CLASS B
631 AIM ASIAN GROWTH FUND - CLASS B
634 AIM SMALL CAP OPPORTUNITIES - CLASS B
640 AIM WEINGARTEN FUND - CLASS B
641 AIM DOLLAR FUND CLASS B
642 AIM NEW PACIFIC GROWTH FUND CLASS B
643 AIM EUROPE GROWTH FUND CLASS B
644 AIM JAPAN GROWTH FUND CLASS B
645 AIM CHARTER FUND - CLASS B
646 AIM MID CAP GROWTH FUND CLASS B
647 AIM WORLDWIDE GROWTH FUND CLASS B
648 AIM STRATEGIC INCOME FUND CLASS B
649 AIM GLOBAL GOVERNMENT INCOME FUND CLASS
650 AIM SELECT GROWTH FUND - CLASS B
651 AIM GLOBAL HEALTH CARE FUND CLASS B
653 AIM LATIN AMERICAN GROWTH FUND CLASS B
655 AIM GLOBAL UTILITIES FUND - CLASS B
656 AIM EMERGING MARKETS FUND CLASS B
657 AIM GLOBAL FINANCIAL SERVICES FUND CLASS
658 AIM GLOBAL HIGH INCOME FUND CLASS B
659 AIM GLOBAL INFRASTRUCTURE FUND CLASS B
660 AIM INTERMEDIATE GOVERNMENT FUND - CLASS
661 AIM GLOBAL RESOURCES FUND CLASS B
662 AIM GLOBAL CONSUMER PRODUCTS AND SERVICE
663 AIM AMERICA VALUE FUND CLASS B
664 AIM SMALL CAP EQUITY FUND CLASS B
665 AIM INCOME FUND - CLASS B
670 AIM MUNICIPAL BOND FUND - CLASS B
675 AIM HIGH YIELD FUND - CLASS B
676 AIM DEVELOPING MARKETS FUND CLASS B
</TABLE>
Page 3
<PAGE> 8
EXHIBIT I
List of Funds
<TABLE>
<S> <C>
677 AIM INTERNATIONAL GROWTH FUND CLASS B
678 AIM GLOBAL GROWTH AND INCOME FUND CLASS
679 AIM GLOBAL TELECOMMUNICATIONS FUND CLASS
680 AIM MONEY MARKET FUND - CLASS B
684 AIM NEW DIMENSION FUND CLASS B
685 AIM BALANCED FUND - CLASS B
690 AIM VALUE FUND - CLASS B
691 AIM GLOBAL AGGRESSIVE GROWTH FUND - CLASS
692 AIM GLOBAL GROWTH FUND - CLASS B
693 AIM GLOBAL INCOME FUND - CLASS B
694 AIM INTERNATIONAL EQUITY FUND. - CLASS B
695 AIM FLOATING RATE FUND
800 SHORT-TERM INVESTMENTS TRUST - TREASURY
841 AIM DOLLAR FUND ADVISOR CLASS
842 AIM NEW PACIFIC GROWTH ADVISOR CLASS
843 AIM EUROPE GROWTH ADVISOR CLASS
844 AIM JAPAN GROWTH ADVISOR CLASS
846 AIM MID CAP GROWTH ADVISOR CLASS
847 AIM WORLDWIDE GROWTH ADVISOR CLASS
848 AIM STRATEGIC INCOME ADVISOR CLASS
849 AIM GLOBAL GOVT INCOME ADVISOR CLASS
851 AIM GLOBAL HEALTH CARE ADVISOR CLASS
853 AIM LATIN AMERICAN GROWTH ADVISOR CLASS
856 AIM EMERGING MARKETS ADVISOR CLASS
857 AIM GLOBAL FINANCIAL SERVICES ADVISOR CLASS
858 AIM GLOBAL HIGH INCOME ADVISOR CLASS
859 AIM GLOBAL INFRASTRUCTURE ADVISOR CLASS
861 AIM GLOBAL RESOURCES ADVISOR CLASS
862 AIM GLOBAL CONSUMER PRODUCTS & SERVICES
863 AIM AMERICAN VALUE FUND ADVISOR CLASS
864 AIM SMALL CAP EQUITY ADVISOR CLASS
876 AIM DEVELOPING MARKETS ADVISOR CLASS
877 AIM INTERNATIONAL GROWTH ADVISOR CLASS
878 AIM GLOBAL GROWTH & INCOME ADVISOR CLASS
879 AIM GLOBAL TELECOMMUNICATIONS ADVISOR CLASS
884 AIM NEW DIMENSION ADVISOR CLASS
</TABLE>
Page 4
<PAGE> 9
EXHIBIT 1.1a OF SCHEDULE G
SPECIFICATIONS
TABLE OF CONTENTS
III. HIGH LEVEL OVERVIEW OF IMPRESS PLUS FUNCTIONALITY
E. Computer Output to Laser Disc (COLD)
This item is the property of First Data Investor Services Group (First Data) of
Boston, Massachusetts, and contains confidential and trade secret information.
This Item may not be transferred from the custody or control of First Data
except as authorized by, and then only by way of loan for limited purposes. It
must be returned to First Data upon request and, in all events, upon completion
of the purpose of the loan. Neither this item nor the information it contains
may be used or disclosed to persons not having a need for such use or disclosure
consistent with the purpose of the loan, without the prior written consent of
First Data.
Copyright First Data Investor Services Group
1994,1995,1996,1997
ALL RIGHTS RESERVED
This media contains unpublished, confidential, and proprietary information of
First Data Investor Services Group. No disclosure or use of any portion of these
materials may be made without the express written consent of First Data Investor
Services Group.
<PAGE> 10
COMPUTER OUTPUT TO LASER DISC (COLD)
IMPRESS PLUS COMPUTER OUTPUT TO LASER DISC (COLD)
The IMPRESS Plus COLD module is a client/server based, graphical user interface
(GUI) system designed to provide an intelligent real-time application to enable
clients to improve the quality of the service provided to both shareholders and
broker dealers. This system provides functionality in the following areas:
STATEMENTS AND TAX FORMS
IMPRESS Plus COLD provides the client with on-line access to shareholder and
broker statements and tax forms. The print mail output stream is stored on
optical platters for retrieval and printing later. The forms and statements can
be searched for on-line through a common browse window integrated with the
IMPRESS Plus Imaging application. Daily output journals can also be migrated to
on-line access eliminating microfiche.
TECHNICAL OVERVIEW
IMPRESS Plus Cold is a high-speed, electronic document storage and retrieval
system which utilizes the high-density, low-cost storage capabilities of optical
and RAID disks. IMPRESS Plus COLD operates in a true client-server environment
and has the capability to simultaneously store multiple document types in a
single system. Among these document types are traditional Line Data; AFP;
Metacode; DJDE; Scanned Images, etc. Each of these data types can be stored on a
single system and are all viewed with a common viewer.
IMPRESS Plus utilizes third-party Metacode composition software from Gentext,
Inc. and third-party viewing software from CDP for local viewing and Adobe
Intranet/Internet viewing.
<PAGE> 11
EXHIBIT 2.3 OF SCHEDULE C
IMPRESS PLUS COLD
EQUIPMENT LIST AND NETWORK CONFIGURATION
<TABLE>
<CAPTION>
QUANTITY CATEGORY DESCRIPTION
=================================================================================
<S> <C> <C>
1 JUKEBOX Phillips 12Gb Tower Drive w/onsite installation
- ---------------------------------------------------------------------------------
2 JUKEBOX Phillips 6000 series media (10 to a box)
- ---------------------------------------------------------------------------------
1 JUKEBOX Cygnet 1802-2 with Philips Drives and SCSI Robotics
- ---------------------------------------------------------------------------------
1 JUKEBOX COLD Feet
- ---------------------------------------------------------------------------------
1 SUN CPU SUN Ultra 3000 base, CD-ROM, Solaris license, Cooling
package, (2) 25OMHZ Cpu's 4mb Cache, (1) CPU/Memory
Board/SharedApp
- ---------------------------------------------------------------------------------
2 SUN CPU SUN Sbus I/0 Board
- ---------------------------------------------------------------------------------
2 SUN CPU SUN 256Mb RAM Kit
- ---------------------------------------------------------------------------------
2 SUN CPU SUN 7200 RPM 9.1Gb Internal Hard Drive
- ---------------------------------------------------------------------------------
2 SUN CPU Enterprise Power/Cooling Module 300W
- ---------------------------------------------------------------------------------
1 SUN CPU Second Peripheral Power Supply
- ---------------------------------------------------------------------------------
2 SUN CPU X1052A Fast Differential/Buffered E-Net Card (SCSI
Controller)
- ---------------------------------------------------------------------------------
2 SUN CPU X1062A fast Wide Differential Sbus Card (SCSI Controller)
- ---------------------------------------------------------------------------------
1 SUN CPU SUN 17" Color Monitor and TGX Card
- ---------------------------------------------------------------------------------
1 SUN CPU SUN DLT7000 35-7OGb External Tape Drive w/50-68 pin
cable
- ---------------------------------------------------------------------------------
1 IBM Netfiniity Rack Cabinet with Power Supply
- ---------------------------------------------------------------------------------
1 DISK SUB Data General Clarion 2900D Raid Array w/2 SPs, and 3 PS's
(20) Drive Chassis
- ---------------------------------------------------------------------------------
1 DISK SUB DG Clarion 64mb mirrored cache upgrade
- ---------------------------------------------------------------------------------
2 DISK SUB Solaris Interface Kit
- ---------------------------------------------------------------------------------
5 DISK SUB Data General 7200 RPM 18Gb Disk Drives
- ---------------------------------------------------------------------------------
1 UPS Exide Electronics Powerware Plus 12 10 Kva UPS for SUN
CPU, DISK SUB and JUKEBOX
- ---------------------------------------------------------------------------------
1 UPS Exide Power Distribution Module for Powerware Plus 12
W/(1) L5.30 and (3) 5-15 receptacles
- ---------------------------------------------------------------------------------
1 NDM NOM TCP-IP 2 Concurrent Sessions SUN
- ---------------------------------------------------------------------------------
3 PREPRO PC Config #1
- ---------------------------------------------------------------------------------
1 SUPPORT PC Config #1/software/modem
- ---------------------------------------------------------------------------------
2 CABLES 25' Differential SCSI Cables (M) HD68 Thumbscrews (M)
- ---------------------------------------------------------------------------------
2 CABLES Active Differential Terminators Min DB-50
=================================================================================
</TABLE>
<PAGE> 1
EXHIBIT j
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 "Miscellaneous Information - Legal Matters" in the
Statement of Additional Information for 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, which is included in Post-Effective Amendment No. 75 to the
Registration Statement under the Securities Act of 1933, as amended (No.
2-27334) and Amendment No. 75 to the Registration Statement under the
Investment Company Act of 1940, as amended (No. 811-1540) on Form N-1A of AIM
Funds Group.
/s/ BALLARD SPAHR ANDREWS & INGERSOLL, LLP
------------------------------------------
Ballard Spahr Andrews & Ingersoll, LLP
Philadelphia, PA
February 11, 1999
<PAGE> 1
EXHIBIT m(8)
THIRD
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 Variable Group
Annuity Contractholder Service Agreements substantially in the
form attached hereto as Exhibit C ("Variable Contract
Agreements") with selected insurance companies ("Companies")
offering variable annuity contracts to employers as funding
vehicles for retirement plans qualified under Section 401(a)
of the Internal Revenue Code, where amounts contributed under
such plans are invested pursuant to such variable annuity
contracts in Shares of the Fund. The Companies receiving
payments under such Variable Contract Agreements will provide
specialized services to contractholders and plan participants,
as set forth in the Variable Contract Agreements from time to
time.
(e) Distributors may also enter into Agency Pricing
Agreements substantially in the form attached hereto as
Exhibit D ("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.
(f) Distributors may also enter into Shareholder
Service Agreements substantially in the form attached hereto
as Exhibit E ("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.
- 2 -
<PAGE> 3
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 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.
- 3 -
<PAGE> 4
AIM FUNDS GROUP
(on behalf of its Class A Shares, Class C Shares and
Shares and AIM Cash Reserve Shares)
Attest: /s/ OFELIA M. MAYO By: 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, and as further
amended and restated as of June 30, 1998.
-4-
<PAGE> 5
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.
<TABLE>
<CAPTION>
MINIMUM
ASSET
PORTFOLIO BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS A SHARES CHARGE FEE FEE
-------------- ------- ------- ---------
<S> <C> <C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
MINIMUM
ASSET
PORTFOLIO BASED MAXIMUM MAXIMUM
SALES SERVICE AGGREGATE
CLASS C SHARES CHARGE FEE FEE
-------------- ------- ------- ---------
<S> <C> <C> <C>
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%
</TABLE>
The Distributor will waive part or all of its Distribution Fee as to a
Portfolio (or Class thereof) to the extent that the ordinary business expenses
of the Portfolio exceed the expense limitation as to the Portfolio (if any) as
contained in the Master Investment Advisory Agreement between the Company and
A I M Advisors, Inc.
- -----------------
* 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).
- 5 -
<PAGE> 1
EXHIBIT m(9)
[LOGO ONLY]
A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
FOR SALE OF SHARES
OF THE AIM MUTUAL FUNDS
This Shareholder Service Agreement (the "Agreement") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940, by each of the
AIM-managed mutual funds (or designated classes of such funds) listed in
Schedule A, which may be amended from time to time by AIM Distributors, Inc.
("Distributors") to this Agreement (the "Funds"), under a Distribution Plan (the
"Plan") adopted pursuant to said Rule. This Agreement, being made between
Distributors, solely as agent for such Funds and the undersigned authorized
dealer, defines the services to be provided by the authorized dealer for which
it is to receive payments pursuant to the Plan adopted by each of the Funds. The
Plan and the Agreement have been approved by a majority of the directors of each
of the Funds, including a majority of the directors who are not interested
persons of such Funds, and who have no direct or indirect financial interest in
the operation of the Plan or related agreements (the "Dis-interested
Directors"), by votes cast in person at a meeting called for the purpose of
voting on the Plan. Such approval included a determination that in the exercise
of their reasonable business judgement and in light of their fiduciary duties,
there is a reasonable likelihood that the Plan will benefit such Fund and its
shareholders.
1. To the extent that you provide distribution-related and continuing
personal shareholder services to customers who may, from time to time,
directly or beneficially own shares of the Funds, including but not
limited to, distributing sales literature, answering routine customer
inquiries regarding the Funds, assisting customers in changing dividend
options, account designations and addresses, and in enrolling into any
of several special investment plans offered in connection with the
purchase of the Funds' shares, assisting in the establishment and
maintenance of customer accounts and records and in the processing of
purchase and redemption transactions, investing dividends and capital
gains distributions automatically in shares and providing such other
services as the Funds or the customer may reasonably request, we,
solely as agent for the Funds, shall pay you a fee periodically or
arrange for such fee to be paid to you.
2. The fee paid with respect to each Fund will be calculated at the end of
each payment period (as indicated in Schedule A) for each business day
of the Fund during such payment period at the annual rate set forth in
Schedule A as applied to the average net asset value of the shares of
such Fund purchased or acquired through exchange on or after the Plan
Calculation Date shown for such Fund on Schedule A. Fees calculated in
this manner shall be paid to you only if your firm is the dealer of
record at the close of business on the last business day of the
applicable payment period, for the account in which such shares are
held (the "Subject Shares"). In cases where Distributors has advanced
payment to you of the first year's fee for shares sold at net asset
value and subject to a contingent deferred sales charge, no additional
payments will be made to you during the first year the Subject Shares
are held.
1/99
<PAGE> 2
3. The total of the fees calculated for all of the Funds listed on
Schedule A for any period with respect to which calculations are made
shall be paid to you within 45 days after the close of such period.
4. We reserve the right to withhold payment with respect to the Subject
Shares purchased by you and redeemed or repurchased by the Fund or by
us as Agent within seven (7) business days after the date of our
confirmation of such purchase. We reserve the right at any time to
impose minimum fee payment requirements before any periodic payments
will be made to you hereunder.
5. This Agreement and Schedule A does not require any broker-dealer to
provide transfer agency and recordkeeping related services as nominee
for its customers.
6. You shall furnish us and the Funds with such information as shall
reasonably be requested either by the directors of the Funds or by us
with respect to the fees paid to you pursuant to this Agreement.
7. We shall furnish the directors of the Funds, for their review on a
quarterly basis, a written report of the amounts expended under the
Plan by us and the purposes for which such expenditures were made.
8. Neither you nor any of your employees or agents are authorized to make
any representation concerning shares of the Funds except those
contained in the then current Prospectus or Statement of Additional
Information for the Funds, and you shall have no authority to act as
agent for the Funds or for Distributors.
9. We may enter into other similar Shareholder Service Agreements with any
other person without your consent.
10. This Agreement may be amended at any time without your consent by
Distributors mailing a copy of an amendment to you at address set forth
below. Such amendment shall become effective on the date specified in
such amendment unless you elect to terminate this Agreement within
thirty (30) days of your receipt of such amendment.
11. This Agreement may be terminated with respect to any Fund at any time
without payment of any penalty by the vote of a majority of the
directors of such Fund who are Dis-interested Directors or by a vote of
a majority of the Fund's outstanding shares, on sixty (60) days'
written notice. It will be terminated by any act which terminates
either the Selected Dealer Agreement between your firm and us or the
Fund's Distribution Plan, and in any event, it shall terminate
automatically in the event of its assignment as that term is defined in
the 1940 Act.
12. The provisions of the Distribution Agreement between any Fund and us,
insofar as they relate to the Plan, are incorporated herein by
reference. This Agreement 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
1/99
<PAGE> 3
Agreement. Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below.
13. You represent that you provide to your customers who own shares of the
Funds personal services as defined from time to time in applicable
regulations of the National Association of Securities Dealers, Inc.,
and that you will continue to accept payments under this Agreement only
so long as you provide such services.
14. This Agreement shall be construed in accordance with the laws of the
State of Texas.
A I M DISTRIBUTORS, INC.
Date: By:
----------------------- --------------------------------------------
The undersigned agrees to abide by the foregoing terms and conditions.
Date: By:
----------------------- --------------------------------------------
Signature
--------------------------------------------
Print Name Title
--------------------------------------------
Dealer's Name
--------------------------------------------
Address
--------------------------------------------
City State Zip
--------------------------------------------
Telephone
Please sign both copies and return one copy of each to:
A I M Distributors, Inc.
11 Greenway Plaza, Suite 100
Houston, Texas 77046-1173
1/99
<PAGE> 4
SCHEDULE "A" TO
SHAREHOLDER SERVICE AGREEMENT
<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 Aggressive Growth Fund B Shares 0.25 March 1, 1999
AIM Aggressive Growth Fund C Shares 1.00** March 1, 1999
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
</TABLE>
1/99
<PAGE> 5
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Global Growth Fund C Shares 1.00** August 4, 1997
AIM Global Income Fund A Shares 0.50** September 15, 1994
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 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 High Yield Fund II A Shares 0.25 October 1, 1998
AIM High Yield Fund II B Shares 0.25 November 20, 1998
AIM High Yield Fund II C Shares 1.00** November 20, 1998
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 Large Cap Growth Fund A Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund B Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund C Shares 1.00** March 1, 1999
AIM Limited Maturity Treasury Fund 0.15 December 2, 1987
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Money Market Fund 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 Select Growth Fund A Shares 0.25 July 1, 1992
AIM Select Growth Fund B Shares 0.25 September 1,1993
AIM Select Growth Fund C Shares 1.00** August 4, 1997
AIM Small Cap Opportunities Fund A Shares 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares 1.00** December 30, 1998
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
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>
1/99
<PAGE> 6
*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 the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or more,
at no load, in cases where A I M Distributors, Inc. has advanced the service fee
to the dealer, bank or other service provider.
THE FOLLOWING FUNDS ARE ADDED AS OF THE CLOSE OF BUSINESS MAY 29, 1998:
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Basic Value Fund A Shares 0.25 May 29, 1998
AIM Basic Value Fund B Shares 0.25 May 29, 1998
AIM Basic Value Fund C Shares 1.00** May 3, 1999
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund C Shares 1.00** March 1, 1999
AIM Europe Growth Fund A Shares 0.25 May 29, 1998
AIM Europe Growth Fund B Shares 0.25 May 29, 1998
AIM Europe Growth Fund C Shares 1.00** May 3, 1999
AIM Global Consumer Products and
Services Fund A Shares 0.40** May 29, 1998
AIM Global Consumer Products and
Services Fund B Shares 0.25 May 29, 1998
AIM Global Consumer Products and
Services Fund C Shares 1.00** March 1, 1999
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund C Shares 1.00** March 1, 1999
AIM Global Government Income Fund A Shares 0.25 May 29, 1998
AIM Global Government Income Fund B Shares 0.25 May 29, 1998
AIM Global Government Income Fund C Shares 1.00** March 1, 1999
AIM Global Growth & Income Fund A Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund B Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund C Shares 1.00** March 1, 1999
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund C Shares 1.00** March 1, 1999
AIM Emerging Markets Debt Fund A Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund B Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund C Shares 1.00** March 1, 1999
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund C Shares 1.00** March 1, 1999
AIM Global Resources Fund A Shares O.40** May 29, 1998
AIM Global Resources Fund B Shares O.25 May 29, 1998
AIM Global Resources Fund C Shares 1.00** March 1, 1999
AIM Global Telecommunications Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications Fund B Shares 0.25 May 29, 1998
AIM Global Telecommunications Fund C Shares 1.00** March 1, 1999
</TABLE>
1/99
<PAGE> 7
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Japan Growth Fund A Shares 0.25 May 29, 1998
AIM Japan Growth Fund B Shares 0.25 May 29, 1998
AIM Japan Growth Fund C Shares 1.00** March 1, 1999
AIM Latin American Growth Fund A Shares 0.40** May 29, 1998
AIM Latin American Growth Fund B Shares 0.25 May 29, 1998
AIM Latin American Growth Fund C Shares 1.00** May 3, 1999
AIM Mid Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund C Shares 1.00** May 3, 1999
AIM Global Trends Fund A Shares 0.40** May 29, 1998
AIM Global Trends Fund B Shares 0.25 May 29, 1998
AIM Global Trends Fund C Shares 1.00** May 29, 1998
AIM New Pacific Growth Fund A Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund B Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund C Shares 1.00** May 3, 1999
AIM Small Cap Growth Fund A Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares 1.00** May 3, 1999
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29, 1998
AIM Strategic Income Fund C Shares 1.00** March 1, 1999
</TABLE>
*Frequency of Payments:
EFFECTIVE UNTIL JUNE 30, 1998: Class A and B share payments commence immediately
and are paid quarterly. Class C share payments commence after an initial twelve
month holding period and are paid quarterly.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
EFFECTIVE JULY 1, 1998: B share payments, like C share payments, will begin
after an initial 12 month holding period and are paid quarterly. Where the
broker dealer or financial institution waives the 1% up-front commission on
Class C shares, payments commence immediately.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or more,
at no load, in cases where A I M Distributors, Inc. has advanced the service fee
to the dealer, bank or other service provider.
1/99
<PAGE> 1
EXHIBIT m(10)
[LOGO ONLY]
A I M DISTRIBUTORS, INC.
BANK SHAREHOLDER
SERVICE AGREEMENT
We desire to enter into an Agreement with A I M Distributors, Inc. (the
"Company") acting as agent for the "AIM Funds", for servicing of our agency
clients who are shareholders of, and the administration of such shareholder
accounts in the shares of the AIM Funds (hereinafter referred to as the
"Shares"). Subject to the Company's acceptance of this Agreement, the terms and
conditions of this Agreement shall be as follows:
1. We shall provide continuing personal shareholder and administration
services for holders of the Shares who are also our clients. Such
services to our clients may include, without limitation, some or all of
the following: answering shareholder inquires regarding the Shares and
the AIM Funds; performing subaccounting; establishing and maintaining
shareholder accounts and records; processing and bunching customer
purchase and redemption transactions; providing periodic statements
showing a shareholder's account balance and the integration of such
statements with those of other transactions and balances in the
shareholder's other accounts serviced by us; forwarding applicable AIM
Funds prospectuses, proxy statements, reports and notices to our
clients who are holders of Shares; and such other administrative
services as you reasonably may request, to the extent we are permitted
by applicable statute, rule or regulations to provide such services. We
represent that we shall accept fees hereunder only so long as we
continue to provide personal shareholder services to our clients.
2. Shares purchased by us as agents for our clients will be registered
(choose one) (in our name or in the name of our nominee) (in the names
of our clients). The client will be the beneficial owner of the Shares
purchased and held by us in accordance with the client's instructions
and the client may exercise all applicable rights of a holder of such
Shares. We agree to transmit to the AIM Funds' transfer agent in a
timely manner, all purchase orders and redemption requests of our
clients and to forward to each client any proxy statements, periodic
shareholder reports and other communications received 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 three (3) business days of placing a purchase order we agree to
send (i) a cashiers check to the Company, or (ii) a wire transfer to
the AIM Funds' transfer agent, in an amount equal to the amount of all
purchase orders placed by us on behalf of our 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
1/99
<PAGE> 2
Bank Shareholder Service Agreement Page 2
Company. The names of our customers shall remain our sole property and
shall not be used by the Company for any other purpose except as needed
for servicing and information mailings in the normal course of business
to holders of the Shares.
5. We shall provide such facilities and personnel (which may be all or any
part of the facilities currently used in our business, or all or any
personnel employed by us) as may be necessary or beneficial in carrying
out the purposes of this Agreement.
6. Except as may be provided in a separate written agreement between the
Company and us, neither we nor any of our employees or agents are
authorized to assist in distribution of any of the AIM Funds' shares
except those contained in the then current Prospectus applicable to the
Shares; and we shall have no authority to act as agent for the Company
or the AIM Funds. Neither the AIM Funds, A I M Advisors, Inc. nor A I M
Distributors, Inc. will be a party, nor will they be represented as a
party, to any agreement that we may enter into with our clients.
7. In consideration of the services and facilities described herein, we
shall receive from the Company on behalf of the AIM Funds an annual
service fee, payable at such intervals as may be set forth in Schedule
A hereto, of a percentage of the aggregate average net asset value of
the Shares owned beneficially by our clients during each payment
period, as set forth in Schedule A hereto, which may be amended from
time to time by the Company. We understand that this Agreement and the
payment of such service fees has been authorized and approved by the
Boards of Directors/Trustees of the AIM Funds, and is subject to
limitations imposed by the National Association of Securities Dealers,
Inc. In cases where the Company has advanced payments to us of the
first year's fee for shares sold with a contingent deferred sales
charge, no payments will be made to us during the first year the
subject Shares are held.
8. The AIM Funds reserve the right, at their discretion and without
notice, to suspend the sale of any Shares or withdraw the sale of
Shares.
9. We understand that the Company reserves the right to amend this
Agreement or Schedule A hereto at any time without our consent by
mailing a copy of an amendment to us at the address set forth below.
Such amendment shall become effective on the date specified in such
amendment unless we elect to terminate this Agreement within thirty
(30) days of our receipt of such amendment.
10. This Agreement may be terminated at any time by the Company on not less
than 15 days' written notice to us at our principal place of business.
We, on 15 days' written notice addressed to the Company at its
principal place of business, may terminate this Agreement, said
termination to become effective on the date of mailing notice to
Company of such termination. The Company's failure to terminate for any
cause shall not constitute a waiver of the Company's right to terminate
at a later date for any such cause. This Agreement shall terminate
automatically in the event of its assignment, the term "assignment" for
this purpose having the meaning defined in Section 2(a)(4) of the
Investment Company Act of 1940, as amended.
1/99
<PAGE> 3
Bank Shareholder Service Agreement Page 3
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
1/99
<PAGE> 4
Bank Shareholder Service Agreement Page 4
SCHEDULE "A" TO
SHAREHOLDER SERVICE AGREEMENT
<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 Aggressive Growth Fund B Shares 0.25 March 1, 1999
AIM Aggressive Growth Fund C Shares 1.00** March 1, 1999
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
</TABLE>
1/99
<PAGE> 5
Bank Shareholder Service Agreement Page 5
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
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
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 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 High Yield Fund II A Shares 0.25 October 1, 1998
AIM High Yield Fund II B Shares 0.25 November 20, 1998
AIM High Yield Fund II C Shares 1.00** November 20, 1998
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 Large Cap Growth Fund A Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund B Shares 0.25 March 1, 1999
AIM Large Cap Growth Fund C Shares 1.00** March 1, 1999
AIM Limited Maturity Treasury Fund 0.15 December 2, 1987
AIM Money Market Fund B Shares 0.25 October 18, 1993
AIM Money Market Fund C Shares 1.00** August 4, 1997
AIM Money Market Fund 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 Select Growth Fund A Shares 0.25 July 1, 1992
AIM Select Growth Fund B Shares 0.25 September 1,1993
AIM Select Growth Fund C Shares 1.00** August 4, 1997
AIM Small Cap Opportunities Fund A Shares 0.25 June 29, 1998
AIM Small Cap Opportunities Fund B Shares 0.25 July 13, 1998
AIM Small Cap Opportunities Fund C Shares 1.00** December 30, 1998
</TABLE>
1/99
<PAGE> 6
Bank Shareholder Service Agreement Page 6
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
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
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 the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
Minimum Payments: $50 (with respect to all funds in the aggregate.)
No payment pursuant to this Schedule is payable to a dealer, bank or other
service provider for the first year with respect to sales of $1 million or more,
at no load, in cases where A I M Distributors, Inc. has advanced the service fee
to the dealer, bank or other service provider.
THE FOLLOWING FUNDS ARE ADDED AS OF THE CLOSE OF BUSINESS MAY 29, 1998:
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Basic Value Fund A Shares 0.25 May 29, 1998
AIM Basic Value Fund B Shares 0.25 May 29, 1998
AIM Basic Value Fund C Shares 1.00** May 3, 1999
AIM Developing Markets Fund A Shares 0.25 May 29, 1998
AIM Developing Markets Fund B Shares 0.25 May 29, 1998
AIM Developing Markets Fund C Shares 1.00** March 3, 1999
AIM Europe Growth Fund A Shares 0.25 May 29, 1998
AIM Europe Growth Fund B Shares 0.25 May 29, 1998
AIM Europe Growth Fund C Shares 1.00** May 3, 1999
AIM Global Consumer Products and
Services Fund A Shares 0.40** May 29, 1998
AIM Global Consumer Products and
Services Fund B Shares 0.25 May 29, 1998
AIM Global Consumer Products and
Services Fund C Shares 1.00** March 1, 1999
</TABLE>
1/99
<PAGE> 7
Bank Shareholder Service Agreement Page 7
<TABLE>
<CAPTION>
Fund Fee Rate* Plan Calculation Date
---- -------- ---------------------
<S> <C> <C>
AIM Global Financial Services Fund A Shares 0.40** May 29, 1998
AIM Global Financial Services Fund B Shares 0.25 May 29, 1998
AIM Global Financial Services Fund C Shares 1.00** March 1, 1999
AIM Global Government Income Fund A Shares 0.25 May 29, 1998
AIM Global Government Income Fund B Shares 0.25 May 29, 1998
AIM Global Government Income Fund C Shares 1.00** March 1, 1999
AIM Global Growth & Income Fund A Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund B Shares 0.25 May 29, 1998
AIM Global Growth & Income Fund C Shares 1.00** March 1, 1999
AIM Global Health Care Fund A Shares 0.40** May 29, 1998
AIM Global Health Care Fund B Shares 0.25 May 29, 1998
AIM Global Health Care Fund C Shares 1.00** March 1, 1999
AIM Emerging Markets Debt Fund A Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund B Shares 0.25 May 29, 1998
AIM Emerging Markets Debt Fund C Shares 1.00** March 1, 1999
AIM Global Infrastructure Fund A Shares 0.40** May 29, 1998
AIM Global Infrastructure Fund B Shares 0.25 May 29, 1998
AIM Global Infrastructure Fund C Shares 1.00** March 1, 1999
AIM Global Resources Fund A Shares 0.40** May 29, 1998
AIM Global Resources Fund B Shares 0.25 May 29, 1998
AIM Global Resources Fund C Shares 1.00** March 1, 1999
AIM Global Telecommunications Fund A Shares 0.40** May 29, 1998
AIM Global Telecommunications Fund B Shares 0.25 May 29, 1998
AIM Global Telecommunications Fund C Shares 1.00** March 1, 1999
AIM Japan Growth Fund A Shares 0.25 May 29, 1998
AIM Japan Growth Fund B Shares 0.25 May 29, 1998
AIM Japan Growth Fund C Shares 1.00** May 3, 1999
AIM Latin American Growth Fund A Shares 0.40** May 29, 1998
AIM Latin American Growth Fund B Shares 0.25 May 29, 1998
AIM Latin American Growth Fund C Shares 1.00** March 1, 1999
AIM Mid Cap Equity Fund A Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund B Shares 0.25 May 29, 1998
AIM Mid Cap Equity Fund C Shares 1.00** May 3, 1999
AIM Global Trends Fund A Shares 0.40** May 29, 1998
AIM Global Trends Fund B Shares 0.25 May 29, 1998
AIM Global Trends Fund C Shares 1.00** May 29, 1998
AIM New Pacific Growth Fund A Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund B Shares 0.25 May 29, 1998
AIM New Pacific Growth Fund C Shares 1.00** May 3, 1999
AIM Small Cap Growth Fund A Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund B Shares 0.25 May 29, 1998
AIM Small Cap Growth Fund C Shares 1.00** May 3, 1999
AIM Strategic Income Fund A Shares 0.25 May 29, 1998
AIM Strategic Income Fund B Shares 0.25 May 29, 1998
AIM Strategic Income Fund C Shares 1.00** March 1, 1999
</TABLE>
*Frequency of Payments:
1/99
<PAGE> 8
Bank Shareholder Service Agreement Page 8
EFFECTIVE UNTIL JUNE 30, 1998: Class A and B share payments commence immediately
and are paid quarterly. Class C share payments commence after an initial twelve
month holding period and are paid quarterly.
**Of this amount, 0.25% is paid as a shareholder servicing fee and the remainder
is paid as an asset-based sales charge, as those terms are defined under the
rules of the National Association of Securities Dealers, Inc.
EFFECTIVE JULY 1, 1998: B share payments, like C share payments, will begin
after an initial 12 month holding period and are paid quarterly. Where the
broker dealer or financial institution waives the 1% up-front commission on
Class C shares, payments commence immediately.
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.
1/99
<PAGE> 1
EXHIBIT m(ll)
VARIABLE GROUP ANNUITY CONTRACTHOLDER SERVICE AGREEMENT
This Variable Group Annuity Contractholder 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
FUND FEE RATE*
- ---- --------
AIM Advisor Funds, Inc. (Class A and Class C Shares)
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 and Class C Shares)
AIM Aggressive Growth Fund .25%
AIM Blue Chip Fund .25%
AIM Capital Development Fund .25%
AIM Charter Fund .25%
AIM Constellation Fund .25%
AIM Large Cap Growth Fund .25%
AIM Weingarten Fund .25%
AIM Funds Group (Class A and Class C Shares)
AIM Balanced Fund .25%
AIM Global Utilities Fund .25%
AIM High Yield Fund .25%
AIM Income Fund .25%
AIM Intermediate Government Fund .25%
AIM Municipal Bond Fund .25%
AIM Select Growth Fund .25%
AIM Value Fund .25%
AIM International Funds, Inc. (Class A and Class C Shares)
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 and Class C Shares)
AIM Limited Maturity Treasury Fund** .15%
AIM High Yield Fund II .25%
AIM Special Opportunities Funds (Class A and Class C Shares)
AIM Small Cap Opportunities Fund .25%
- ---------------
* Frequency of Payments: Quarterly.
** AIM Limited Maturity Treasury Fund currently offer Class A Shares only.
C-4
<PAGE> 1
EXHIBIT m(12)
AGENCY PRICING AGREEMENT
(THE AIM FAMILY OF FUNDS--Registered Trademark--)
This Agreement is entered into as of the ___ of _________, 19__,
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
which may be amended from time to time by Distributor (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. (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 Large Cap Growth Fund .25%
AIM Weingarten Fund .25%
AIM Funds Group (Class A Shares Only)
AIM Balanced Fund .25%
AIM Global Utilities Fund .25%
AIM High Yield Fund .25%
AIM Income Fund .25%
AIM Intermediate Government Fund .25%
AIM Municipal Bond Fund .25%
AIM Select Growth Fund .25%
AIM Value Fund .25%
AIM Growth Series (Class A Shares Only)
AIM Basic Value Fund .25%
AIM Europe Growth Fund .25%
AIM Japan Growth Fund .25%
AIM Mid Cap Equity Fund .25%
AIM New Pacific Growth Fund .25%
AIM Small Cap Growth Fund .25%
</TABLE>
<PAGE> 8
<TABLE>
<S> <C>
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 Funds (Class A Shares Only)
AIM Emerging Markets Fund .25%
AIM Emerging Markets Debt Fund .25%
AIM Global Consumer Products and Services Fund .25%
AIM Global Financial Services Fund .25%
AIM Global Government Income Fund .25%
AIM Global Growth & Income Fund .25%
AIM Global Health Care Fund .25%
AIM Global Infrastructure Fund .25%
AIM Global Resources Fund .25%
AIM Global Telecommunications Fund .25%
AIM Latin American Growth Fund .25%
AIM Strategic Income Fund .25%
AIM Investment Securities Funds (Class A Shares Only)
AIM High Yield Fund II .25%
AIM Limited Maturity Treasury Fund .15%
AIM Series Trust (Class A Shares Only)
AIM Global Trends Fund .25%
AIM Special Opportunities Funds (Class A Shares Only)
AIM Small Cap Opportunities Fund .25%
</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.)
<PAGE> 1
EXHIBIT m(13)
[LOGO ONLY]
A I M DISTRIBUTORS, INC.
A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
(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> 2
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> 3
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> 4
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> 5
Shareholder Service Agreement Page 5
(Bank Trust Departments)
SCHEDULE A
<TABLE>
<CAPTION>
Funds Fees
----- ----
<S> <C> <C>
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 Aggressive Growth Fund
AIM Blue Chip Fund
AIM Capital Development Fund
AIM Charter Fund (Retail Class)
AIM Constellation Fund (Retail Class)
AIM Large Cap Growth Fund
AIM Weingarten Fund (Retail Class)
AIM Funds Group
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
AIM Growth Series
AIM Basic Value Fund
AIM Europe Growth Fund
AIM Japan Growth Fund
AIM Mid Cap Equity Fund
AIM New Pacific Growth Fund
AIM Small Cap Growth 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
</TABLE>
<PAGE> 6
Shareholder Service Agreement Page 6
(Bank Trust Departments)
<TABLE>
<S> <C>
AIM Investment Funds
AIM Developing Markets Fund
AIM Emerging Markets Debt Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Government Income Fund
AIM Global Growth & Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Latin American Growth Fund
AIM Strategic Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund
AIM High Yield Fund II
AIM Series Trust
AIM Global Trends Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund
AIM Tax-Exempt Funds, Inc.
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
</TABLE>
<PAGE> 7
[LOGO ONLY]
A I M Distributors, Inc.
A I M DISTRIBUTORS, INC.
SHAREHOLDER SERVICE AGREEMENT
(BROKERS FOR BANK TRUST DEPARTMENTS)
__________________ , 19__
A I M Distributors, Inc.
11 Greenway Plaza, Suite 1919
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, which may be amended from time to time by AIM Distributors (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> 8
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> 9
Shareholder Service Agreement Page 3
(Brokers for Bank Trust Departments)
A I M Distributors, Inc., 11 Greenway Plaza, Suite 1919, 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> 10
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 1919
Houston, Texas 77046-1173
<PAGE> 11
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 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
AIM Growth Series
AIM Basic Value Fund
AIM Europe Growth Fund
AIM International Growth Fund
AIM Japan Growth Fund
AIM Mid Cap Equity Fund
AIM New Pacific Growth Fund
AIM Small Cap Growth Fund
AIM Worldwide Growth 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
<PAGE> 12
Shareholder Service Agreement Page 6
(Brokers for Bank Trust Departments)
AIM Investment Funds
AIM Developing Markets Fund
AIM Emerging Markets Fund
AIM Emerging Markets Debt Fund
AIM Global Consumer Products and Services Fund
AIM Global Financial Services Fund
AIM Global Government Income Fund
AIM Global Growth & Income Fund
AIM Global Health Care Fund
AIM Global Infrastructure Fund
AIM Global Resources Fund
AIM Global Telecommunications Fund
AIM Latin American Growth Fund
AIM Strategic Income Fund
AIM Investment Securities Funds
AIM Limited Maturity Treasury Fund
AIM High Yield Fund II
AIM Series Trust
AIM Global Trends Fund
AIM Special Opportunities Funds
AIM Small Cap Opportunities Fund
AIM Tax-Exempt Funds, Inc.
AIM High Income Municipal Fund
AIM Tax-Exempt Cash Fund
AIM Tax-Exempt Bond Fund of Connecticut
